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TVS ELECTRONICS LIMITED

1. Board of Directors ... ... ... ... ... 2

2. Financial Highlights ... ... ... ... ... 3

3. Notice to the Shareholders ... ... ... ... ... 4

4. Directors’ Report to the Shareholders ... ... ... ... ... 10

5. Report on Corporate Governance ... ... ... ... ... 18

6. Auditors’ Report ... ... ... ... ... 29

7. Balance Sheet ... ... ... ... ... 32

8. Profit&LossAccount ............... 33

9. Schedules ... ... ... ... ... 34

10. Notes on Accounts ... ... ... ... ... 44

11.Disclosure-Clause32oftheListingAgreement ............... 60

12.CashFlowStatement ............... 61

13.StatementrelatingtoSubsidiaries ............... 62

CONSOLIDATED ACCOUNTS

1. Auditors’ Report on Consolidated Accounts ... ... ... ... ... 63

2. Consolidated Balance Sheet ... ... ... ... ... 64

3. ConsolidatedProfit&LossAccount ............... 65

4. Consolidated Schedules ... ... ... ... ... 66

5. ConsolidatedCashFlowStatement ............... 76

6. Accounting Policies on Consolidation ... ... ... ... ... 77

7. DisclosureofinformationrelatingtoSubsidiaries ............... 78

Contents

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Board of DirectorsGopalSrinivasan ChairmanHLakshmananDSundaramRRamarajBaluDoraisamyKenneth TaiSrilalitha Gopal (From10thNovember,2011)PraveenChakravarty (From10thNovember,2011)SSRaman (Upto 31stDecember,2011)SRVijayakar (Upto 2ndFebruary,2012)R R Nair (Upto 2ndFebruary,2012)Sridhar Mitta (Upto 2ndFebruary,2012)

Committees of the Board

Audit CommitteeDSundaram ChairmanHLakshmananRRamarajPraveenChakravarty (From10thNovember,2011)SRVijayakar (Upto 2ndFebruary,2012)Sridhar Mitta (Upto 2ndFebruary,2012)

Investors' Grievance CommitteeRRamarajChairmanHLakshmananDSundaram (From2ndFebruary,2012)Gopal Srinivasan (Upto 2ndFebruary,2012)

Remuneration/Compensation CommitteeGopal Srinivasan (From2ndFebruary,2012)BaluDoraisamy (From2ndFebruary,2012)RRamaraj (From2ndFebruary,2012) HLakshmananDSundaramSRVijayakar (Upto 2ndFebruary,2012)R R Nair (Upto 2ndFebruary,2012)

AuditorsSundaram&SrinivasanCharteredAccountants,NewNo.4,C.P.RamaswamyRoadAlwarpet,Chennai-600018

President & CEOJNSastry

Chief Financial OfficerN Yogeshwaran

BankersStateBankofMysoreStateBankofTravancoreCanaraBank

Registered Office"JayalakshmiEstates"29,HaddowsRoadChennai - 600 006Tel: 91-44-28277155

Administrative OfficeSouthPhase-7A,SecondFloorIndustrialEstate,GuindyChennai - 600 032Tel:91-44-4200 5200Fax No: 91-44-2225 7577Website:www.tvs-e.in

PlantUttarkhand-PlantI&IINo.E-12&F-92,F-93,SelaquiIndustrialEstateSelaqui,Dehradun,UttarkhandTel: 0135 - 2698662/3

Share Transfer AgentsSundaram-ClaytonLimited,22,RailwayColonyIIIStreet,MehtaNagar,Chennai-600029Tel:91-44-23741889,23742939Fax No: 91-44-23741889E-mail:[email protected]

Shares Listed atBombayStockExchangeLimitedNationalStockExchangeofIndiaLimited

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Financial Highlights - Ten Years at a glance

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NOTICEisherebygiventhattheSeventeenthAnnualGeneralMeetingof theCompanywillbeheldatSriThyagaBrahmaGana Sabha (Vani Mahal), No. 103, G N Chetty Road,T.Nagar,Chennai-600017,onSaturday,the4thAugust,2012at10:35AMtotransactthefollowingbusiness.

ORDINARY BUSINESS

1. To consider and if thought fit, to pass with or withoutmodification, the following resolution as an OrdinaryResolution:

“RESOLVED THAT the audited Balance Sheet as at31stMarch,2012andtheProfitandLossAccountoftheCompanyfortheyearendedonthatdate,togetherwiththe Directors’ Report and the Auditors’ Report thereon as presented to themeetingbeand thesameareherebyapproved and adopted”.


“RESOLVED THAT Mr. D Sundaram who retires byrotationandbeingeligible for re-appointmentbeand isherebyre-appointedasaDirectoroftheCompany”.


“RESOLVED THAT Mr. H Lakshmanan who retires byrotationandbeingeligible for re-appointmentbeand isherebyre-appointedasaDirectoroftheCompany”.

4. To consider and if thought fit to pass, with or withoutmodification, the following resolution as an OrdinaryResolution:

“RESOLVEDTHATtheretiringAuditors,M/s.Sundaram& Srinivasan, Chartered Accountants, Chennai,(Firm Registration No.004207S) be and are hereby re-appointedasAuditorsof theCompany toholdofficefrom the conclusion of thisAnnualGeneralMeeting tillthe conclusion of the next Annual General Meeting of the CompanyonsuchremunerationasmaybefixedinthisbehalfbytheBoardofDirectorsoftheCompany”.

SPECIAL BUSINESS


“RESOLVEDTHATMr.PraveenChakravartybeand isherebyappointedasaDirectoroftheCompanyliabletoretirebyrotation”.


“RESOLVEDTHATMrs.SrilalithaGopalbeandisherebyappointedasaDirectoroftheCompanyliabletoretirebyrotation”.

7. To consider and if thought fit to pass, with or withoutmodification, the following resolution as a SpecialResolution:

“RESOLVEDTHATpursuanttoSection31andallotherapplicableprovisions,ifany,oftheCompaniesAct,1956,theArticlesofAssociationoftheCompanybealteredbyaddition of Article 193 after the existing Article 192 as givenbelow:

E-GOVERNANCE

(193) The regulations contained herein shall always beconstruedasfacilitatingandpromotinge-governanceandothersocio-economic initiativesenvisagedthroughstatutes,policypronouncementsorinanyothermannerandaccordingly:

(a)Noticesconveningmeetingsof theBoardofDirectorsorany Committee thereof and notices for passing resolutionsby circulation amongst the Directors/ Committee Members,together with the agenda papers and other relevant annexures/ enclosures,maybesenttotheDirectors/CommitteeMembersandotherpersonsentitledthereto,throughe-mailtothee-mailaddress furnishedby them for thepurposeor throughsuchother electronicmeansasmaybe statutorily permissible orrecognised.

(b)MeetingsoftheBoardofDirectorsoraCommitteethereofmay be held with participation of one or more directorsthrough video-conferencing or through such other electronic meansasmaybestatutorilypermissibleorrecognised.TheDirector(s)/CommitteeMember(s)soparticipatinginaBoardorCommitteemeetingvalidlyheldshallhavetherighttovoteandwillcountforthepurposeofquorum.

(c) Notices convening General Meetings, including AnnualGeneral Meetings, together with the required annexures/enclosures/ attachments (including theAnnual Report)maybe sent to themembers and other persons entitled theretothroughe-mailtothee-mailaddressregisteredbythemwiththeCompany/Depositories for thepurposeor throughsuchother electronicmeansasmaybe statutorily permissible orrecognised.

(d) The Company may permit and provide facilities forparticipation of Shareholders in General Meetings through video-conferencingorthroughsuchotherelectronicmeansasmaybestatutorilypermissibleorrecognised.TheShareholders

NOTICE TO THE SHAREHOLDERS

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so participating in a General Meeting shall have the right to discussandvoteonthebusinesstransactedthereat;buttheyshallnotcountforthepurposeofminimumquorumrequiredforaGeneralMeeting,unlessstatutorilypermitted.

(e) The Company may, for the purpose of voting by themembersat aGeneralMeetingeither by showof handsoronapollandalsoforvotinginapostalballotprocess,provideforvotingonanelectronicplatformorthroughe-mailorotherelectronic means in such manner as may be permitted orrecognizedunderanystatute.

(f)TheCompanymaykeepandmaintainstatutoryregisters,documents and information as electronic records, to beauthenticatedwhereverrequiredbyadulyauthorisedofficer.Where any document is required to be sent to any person,servicemaybeeffectedthroughe-mailtothee-mailaddressintimatedorregisteredbythosepersonsforthepurpose.

(g) References in these regulations to electronic means,electronic records, electronic platform, video-conferencingandotherrelevantterms,eithergenerallyorspecificallyandthelegalvaliditythereofshallbeconstruedwithreferencetotheInformationTechnologyAct,2000,notifications/circularsissued by the Ministry of CorporateAffairs, Government ofIndia and other applicable statutory provisions, as may beprevailingfromtimetotime”.

By Order of the Board

Registered Office: “JayalakshmiEstates” 29,HaddowsRoad Chennai - 600 006

Gopal Srinivasan 19thJune,2012 Chairman

NOTES

1. A Member entitled to attend and vote at the meeting is entitled to appoint one or more Proxies to attend and vote instead of himself and the Proxy or Proxies so appointed need not be a Member or Members as the case may be of the Company. The instrument appointing the Proxy and the Power of Attorney or other authority, if any, under which it is signed or a notarially certified copy of that Power of Attorney or other authority shall be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for holding the meeting.

2. TherelativeExplanatoryStatementpursuanttoSection173oftheCompaniesAct,1956,inrespectoftheSpecialBusinesses as set out in the Notice is annexed hereto.

3. TheRegisterofMembersandthesharetransferbooksoftheCompanywillremainclosedfromWednesday,1st

August, 2012 toSaturday,4thAugust, 2012,bothdaysinclusive.

4. IntermsofSection205AreadwithSection205CoftheCompanies Act, 1956, the dividends declared by theCompany,whichremainunclaimedforaperiodofsevenyears will be transferred on due dates to the InvestorEducation and Protection Fund (IEPF), established bythe Central Government. The particulars of due datesfor transfer of such unclaimed dividends to IEPF arefurnished in the Report on Corporate Governance,formingpartoftheAnnualReport.

Memberswhohavenotencashedtheirdividendwarrantsarerequestedtomaketheirclaim(s)totheCompanybysurrenderingtheunencashedwarrantsimmediately.

5. Members holding shares in physical form, in their owninterest, are requested to dematerialise the shares toavailthebenefitsofelectronicholdingandtrading.

6. Membersholdingsharesinphysicalformarerequestedtonotifyimmediatelyanychangeintheiraddress/e-mailaddress to the Company/its Share Transfer Agents.Membersholdingsharesinelectronicformarerequestedto advice change of address/e-mail address to theirDepositoryParticipants.

7. Asameasureofeconomy,copiesoftheAnnualReportwillnotbedistributedattheAnnualGeneralMeeting.

8. Members are requested to sign at the space providedon theattendance slip andhandover the sameat theentranceofthemeetinghall.

9. The Ministry of Corporate Affairs (vide circular nos.17/2011and18/2011datedApril21andApril29,2011respectively), has undertaken a ‘Green Initiative inCorporateGovernance’andallowedcompaniestoservedocumentsonitsshareholdersthroughelectronicmode.Membersarerequestedtosupportthisgreeninitiativebyregistering/updatingtheire-mailaddresses,inrespectofsharesheld indematerialisedformwiththeirrespectiveDepositoryParticipantsandinrespectofsharesheldinphysicalformwithCompany/itsShareTransferAgents.

NOTICE TO THE SHAREHOLDERS (Contd.)

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10. IntermsofClause49oftheListingAgreementwiththeStockExchanges, a brief resumeofDirectorswhoareproposed tobeappointed/re-appointedat thismeeting,nature of their expertise in specific functional areas,their otherDirectorships andCommitteeMemberships,(only Audit Committee and Shareholders’/Investors’Grievances Committee) their shareholding in theCompany and relationships between directors inter-searegivenbelow:

MR. D SUNDARAM

Mr.DSundaramisaFellowMemberoftheInstituteofCostAccountants of India and a Post Graduate in ManagementStudies. He has done Advanced Management Programmeat Harvard Business School.Mr. D Sundaram has handledvarious assignments in his career in Unilever both in India(HUL)and inLondon (Unilever,plc).Hewas theSr.VP forFinance and IT at London for SouthAsia,Middle East and

NorthAfricabetween1996to1999andcamebacktoIndiatobetheFinanceDirector/CFOfrom1999to2009.

He retired as the Vice Chairman and CFO of HindustanUnilever Limited in July 2009 and took over the position ofViceChairmanandManagingDirectorinTVSCapitalFundsLimited.Hewasawarded theprestigious “CFOof theYear”Award forFMCGsectorbyCNBCTV18 twice in2006and2009.

Mr. D Sundaram does not hold any Equity Shares in theCompany.HeisnotrelatedtoanyDirectoroftheCompany.

Details of Mr. Sundaram’s other Directorships andMemberships/ChairmanshipsofCommitteesaregivenbelow:

MR. H LAKSHMANAN

Born on 14thAugust,1933,Mr.HLakshmananisaCompanyExecutivewithavastexperience.He joined theTVSGroupin 1953. He became the Executive Director of Sundaram -ClaytonLimitedin1982andcontinuestoholdtheposition.Hehasrichexperience,expertiseandknowledgeintheareas

ofFinance,HR,IndustrialRelations,BusinessAdministrationandManagement.

Mr.HLakshmananholds350EquitySharesintheCompany.HeisnotrelatedtoanyDirectoroftheCompany.

Details of Mr. H Lakshmanan’s other Directorships andMemberships/ChairmanshipsofCommitteesaregivenbelow:

S. No. NameoftheCompany Nature of interest CommitteeMemberships/

Chairmanships

1. TVSCapitalFundsLimited ViceChairman&Managing Director -

2. StateBankofIndia DirectorMemberAuditCommittee,RiskCommitteeandITStrategyCommittee

3. SBICapitalMarketsLimited Director AuditCommittee,Chairman

4. GlaxoSmithklinePharmaceuticalsLimited Director AuditCommittee,Chairman

5. InstituteofFinancialManagement&Research(IFMR) Member-Boardof Governors -

6. NineDotNineMediaworxPrivateLimited Director -

7. MedfortHospitalsPrivateLimited Director -

8. MaxivisionLaserCentrePrivateLimited Director -


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S. No. NameoftheCompany Nature of Interest CommitteeMemberships/

Chairmanships

1. TVSMotorCompanyLimited Director -

2. HaritaSeatingSystemsLimited Chairman Chairman,Investors’GrievanceCommitteeandChairman,AuditCommittee

3. AnushaInvestmentsLimited WholetimeDirector Member,AuditCommittee

4. SundaramAutoComponentsLimited Director Chairman,Auditcommittee

5. TVSFinanceandServicesLimited Director Member,AuditCommittee

6. TVSInvestmentsLimited Director Member,AuditCommittee

7. TVSCapitalFundsLimited Director -

8. Harita-NTILimited Director -

9. HaritaTechservLimited Director Chairman,AuditCommittee

10. TVSMotorServicesLimited Director -

11. HaritaFehrerLimited Director Member,AuditCommittee

12. TVSEnergyLimited Director -

13. TVSHousingLimited Director -

14. TVSTrainingandServicesLimited Director -

15. TVSMotor(Singapore)PteLimited Director -

16. TVSMotorCompany(Europe)B.V,Netherlands Director -

17. PTTVSMotorCompanyIndonesia Commissioner -

18. HaritaPropertiesPrivateLimited Director -

19. HaritaInteriorsPrivateLimited Director -

20. LaksonTechnologyPrivateLimited Director -

MR. PRAVEEN CHAKRAVARTYBorn on 21stJuly,1973,Mr.PraveenChakravarty isasenior financial servicesprofessionalof repute,publicpolicyenthusiastandanactiveangelinvestor. He is the CEO of Anand Rathi Advisors, a growthfocused investmentbank.Prior tohis current role, hewasonanassignmentwiththeUniqueIdentityAuthorityofIndia(UIDAI)undertheChairmanshipofMr.NandanNilekani.

Mr.PraveenreceivedhisMBAdegreefromtheWhartonSchool and his undergraduate degree from BITS,Pilani.

Mr.PraveendoesnotholdanySharesintheCompany.HeisnotrelatedtoanyotherDirectoroftheCompany.Details of Mr. Praveen’s other Directorships and Memberships/ChairmanshipsofCommitteesaregivenbelow:


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MRS. SRILALITHA GOPAL

Mrs. Srilalitha Gopal, born on 27th May, 1967, is anEngineeringGraduate inComputerSciencefromIISc,Bengaluru.

SheistheManagingDirectorofHaritaTechservLimited(HTL). Her direction has enabled the growth of thebusinessofHTLtobecomeoneof themostpreferreddesign engineering and talent services partners,ensuring success for every stakeholder of HTL. Theappointment of Mrs. Srilalitha Gopal will be useful totheCompanywhen theCompanyhas takenover the

servicesbusinessandisexpandingtootherITproductsespeciallyinthePointofSaledomainandreachingtoinstitutional and other retail customers. She providesactive directional support to the TVS group cluster of companiesintheirCSRinitiatives.

Mrs.SrilalithaGopaldoesnotholdanyShares in theCompany.She is thespouseofMr.GopalSrinivasan,ChairmanoftheCompany.

Details of Mrs. Srilalitha’s other Directorships and Memberships/ChairmanshipsofCommitteesaregivenbelow:

Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956

Thefollowingexplanatorystatementsetsoutallmaterialfacts relating to special businesses mentioned in theaccompanyingNoticedated19thJune,2012andshallbetakenasformingpartoftheNotice.

Item No.5

Mr.PraveenChakravartywasappointedasanAdditionalDirector of theCompanyat themeeting of theBoardof Directors held on 10th November, 2011. Pursuantto the provisions of Section 260 of the CompaniesAct, 1956,Mr. PraveenChakravarty holds office uptothe date of the ensuing Annual General Meeting. The CompanyhasreceivedaNoticeunderSection257oftheCompaniesAct,1956fromaMember,alongwithadepositofRs.500/-signifyinghisintensiontoproposethe appointment of Mr. Praveen Chakravarty as aDirectoroftheCompany.

The resolution proposing Mr. Praveen Chakravarty’sappointmentasaDirector issubmitted to themeetingfor consideration.

As a person with rich experience in technology andfinancial services with active involvement in financialinclusion initiatives, the appointment of Mr. PraveenChakravarty to theBoard is considered very valuableto the Company which has taken strategic initiativesto expand the product profile and expand to solutions and services. The Directors recommend the saidresolutiontobeapprovedasanordinaryresolutionbythe shareholders.

NoneoftheDirectors,exceptMr.PraveenChakravarty,is deemed to be concerned or interested in theresolution.

Item No.6

Mrs. Srilalitha Gopal was appointed as an Additional Director of theCompanyat themeeting of theBoard

S. No. NameoftheCompany Nature of Interest CommitteeMemberships/Chairmanships

1. BSEInstituteLimited Director -2. Meljol,Mumbai BoardMember -3. CentreforCivilSociety MemberoftheBoardofAdvisors -4. PRSLegislativeResearch Member -5. MumbaiAngels Co-Founder -

S. No. NameoftheCompany Nature of Interest CommitteeMemberships/Chairmanships

1. HaritaTechservLimited Managing Director -2. HaritaAcademyLimited Director -


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of Directors held on 10th November, 2011. Pursuantto the provisions of Section 260 of the CompaniesAct,1956,Mrs.SrilalithaGopalholdsofficeonlyuptothe date of the ensuing Annual General Meeting. The CompanyhasreceivedaNoticeunderSection257oftheCompaniesAct,1956fromaMember,alongwithadepositofRs.500/-signifyinghisintensiontoproposetheappointmentofMrs.SrilalithaGopalasaDirectoroftheCompany.

The resolution proposing Mrs. Srilalitha Gopal’s appointmentasaDirector issubmitted to themeetingfor consideration.

TheappointmentofMrs.SrilalithaGopal to theBoardisconsideredveryvaluabletotheCompanygivenherwideandrichexperience.TheDirectorsrecommendthesaidresolutiontobeapprovedasanordinaryresolutionbytheshareholders.

Mrs. Srilalitha Gopal and Mr. Gopal Srinivasan are deemedtobeconcernedorinterestedintheresolution.

Item No.7

TheMinistry ofCorporateAffairs has been promotingvarious E-governance initiatives duly recognizingtechnologicaladvancementsandforallowingpaperlesscomplianceundertheCompaniesAct,1956.

Keeping in tune with those initiatives as well as the technologicaladvancementsandtheneedtoparticipate

in environment friendly measures, certain alterationswith regard to electronic governance are proposed as anadditiontotheexistingArticlesofAssociation(AOA)oftheCompany.

Thesealterationsembodiedintheformofanadditionalregulations,seektoempowertheCompanytoleverageonthevariouselectronicmeansforstatutorycomplianceintunewithitsownelectronicgovernancepolicy.

TheBoard recommends the special resolution for theapprovaloftheMembers,consideringitspositiveimpactontheenvironmentalandtechnologicaloutlookfortheCompany.

NoneoftheDirectorsareinanyway,directlyorindirectlyconcerned or interested in the resolution.

The proposed alteration and the existing Articles of AssociationareavailableforinspectionattheRegisteredOffice of the Company, during working hours, till thedateofthemeeting.

By Order of the Board

Registered Office: “JayalakshmiEstates” 29,HaddowsRoad Chennai - 600 006

Gopal Srinivasan 19thJune,2012 Chairman


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The Directors hereby present their Seventeenth AnnualReportonthebusinessandoperationsoftheCompanyandthefinancialaccountsfortheyearended31st March,2012.

Financial Results ThehighlightsofthefinancialperformanceoftheCompanyare as follows: (Rs.inLakhs)

ParticularsYear ended31st March,

2012

Year ended31st March,

2011Salesandotherincome 22,036 18,361EarningsBeforeInterest&Tax(EBIT)

820 774

Profit/(Loss)BeforeTax(PBT)beforeexceptionalitems

161 151

ExceptionalItems (21) (62)Profit/(Loss)BeforeTax 141 89

Lossfrom Discontinuing Operations - (25)

Profit/(Loss)afterTax(PAT) 140 154Add: Brought forward frompreviousyear

589 435

Totalavailableforappropriations 729 589SurplusinProfitandLossaccount 729 589

Business results and key highlights of operations

Fortheyearended31stMarch,2012,theCompanyreportedSalesRevenue andOther Income ofRs.220Cr as againstRs.184 Cr in the previous year. Sales include Rs.23.33 CrfromServicesbusinesstakenoverfromTVS-EServicetecLtdeffective 1stOctober2011.

TheCompanyhasinthelasttwoyearssignificantlyimproveditspresenceinthe“PointofSaleandTransactionManagementProducts”businessconsistingofReceiptandInvoicePrinters,LabelPrinters,BarCodeScanners,POSsystems&terminals(Cash Registers), Key Board and accessories. Significantgrowthhasbeenseenascomparedtopreviousyear in thiscategory. On Point of Sale and Transaction Managementproductsandsolutions,theCompanyhasevolvedmoredirectcustomerengagementtogrowitsbusiness.

During thesecondhalfof theyear, theCompany increasedfocusonChannelEngagementandServiceimprovementforits customerbase,whichhas shown results better than thefirsthalfoftheyear.

TheoverallDotMatrixPrinter(DMP)marketshrunkbetween

3-4% in theyearboth in termsof volumeandvalue.Goingforward,theCompanybelievesthatthereshouldbeincreasedfocusonrevenuemixandsuppliesbusiness.

Due to sustained focus on cost and cash managementexercise,theEarningsbeforeInterestandTax(EBIT)fortheyearimprovedtoRs.8.20CrasagainstRs.7.74Crinpreviousyear.

TheCompanyhasovertheyearsbuilt internalcapability forextensivecustomizationandstandardizationoftheproductstosuitdiverseanddemandingIndianconditions.TheCompanyhasalsobuiltrobustServiceandSupportinfrastructureasakeydifferentiatorfordrivinggrowth.TheCompanyhasmadesubstantialprogressasakeyhardwareproviderforthePointofSalemarketsegment.

From the overall operational excellence perspective, theCompany continues to drive aggressively the Total Qualityand Cost Management initiatives with lean manufacturingprinciplestoreducevariableandfixedcostscontinuously.

Growing the business

TheBoardofDirectorsoftheCompanyintheirReportfortheYear2010-11hadarticulatedtheIndustryOutlook,emergingtrendsintheIndustryandkeyinitiativestakenbytheCompanytomove into a higher growth trajectory. The Company hastakeninitiativesaspartofitsgrowthstrategytoprovidemoreeffectiveandrelevantproductsappropriateforthecustomerswithaviewtogrowtheCompanyandextendingitsactivitiestoencompasstheTransactionandAuthenticationbusinessesaspartofthegrowthstrategy.

Around this strategy, the Company proposes to buildadditionalproductstoexpandmarketforthepaymentindustryalong with improvements to Transaction andAuthenticationProducts. This transformation process is being carried outundertheguidanceofStrategicAdvisorswhoformapartoftheTransformationSteeringGroup.

The proposal envisages building more comprehensiveand competitive product offering and matching servicescapabilities for customers in the Banking and FinancialServices, Hospitality, Healthcare and Retail segments. Insupportof thisgrowthstrategy, theCompanyhaveacquiredthe Services business from TVS-E Servicetec Ltd.TVS-EServicetecLtdisanestablishedplayerinprovidingwarrantymanagement,AMCandotherrepairservices.Theirclientlistincludes leading brand owners in IT, Banking,Telecomandother corporate customers. During the past 5 years, theyhadbuiltanexcellentandsustainablebusinesswith leadingbrandowners in thesesegmentsandhavealsobuilt robustinfrastructure consisting of

Directors’ Report to the Shareholders

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• Technology platform, customer relationship andmanagement applications to handle large call volumesandremotediagnostics

• Partner network across India with over 200AuthorizedService Partners.

• Qualified and experienced human resources,whichwillbenefittheBuyerinitsotherbusinessinitiatives.

• Repair factory, Repair centres, Call centre &Warehouses.

• Expertise in managing the business of Services anda wealth of experience and knowledge acquired inmanagingthecustomer’srequirements.

The above acquisition, in addition to its current business,bringsinvalueadditionbymeansofitsstrategicfit.Thiswillbring synergy towards Cost management with integratedcommonservices.

ThisacquisitionnotonlyprovidesincrementaltoplinetotheCompanybutalsodeliverssustainableprofitmarginsconsistentwiththeindustrytrends.InadditionthefollowingbenefitsandvaluecreationarelikelytoaccruetotheCompany:

•Betterplacementforgettingqualifiedintenders

• Additonal AMC and supplies revenue from the TVSEcustomers(postwarranty)

• Expansion of Services business with new customerbrands

• Crossfunctionalcostoptimisationfromtheintegration.

TheaboveacquisitioninadditiontoitscurrentbusinessbringsinvalueadditionbymeansofitsstrategicfitandtheCompanyis closely working on the growth with a leading StrategicAdvisorinthisregardtoimplementthegrowthstrategies.

TheCompanyisconfidentthatalltheseinitiativeswillyieldthedesired results that will provide value to the shareholders who continuetomaintaintheirtrustinus.TheCompanywillsustainitsefforts todeliver improved results coming from initiativessuch as• IncreasedpenetrationintothePointofSalemarket• Transformingsalestomatchwiththeproductcategories• Strengtheningexistingproductportfolio• Introducing new products for payment industry

(MicroATMs/financialinclusion).MANAGEMENT DISCUSSION AND ANALYSIS

As required under Clause 49 of the ListingAgreements, adetailedReportonManagementDiscussionsandAnalysisisgivenbelow:

A. The Industry and Trends Macro Economic Environment Oneofthekeyfactorsimpactingtheindustryisthedepreciatingrupee and higher inflation which affect the IT spend of our customers. While the customers show sustained interestin the Company’s products, the Company is challenged bysevere pricing pressure. While the economy continues topose challenges, the retail industry is expanding and thereareenoughopportunitiestogrow.Recentgovernmentpolicyand theRBIdecision toallowbrandneutralATMbyNBFCsprovidesenhancedopportunitiesfortheCompany.

Significant allocation for infrastructure and other related initiatives will drive further growth. Government’s initiativeson Rural Broadband connectivity to all Panchayats in thecountrywillalsodriveITpenetration.Increasedallocationtoeducation and banking facilities to all inhabitants are somepositive drivers.

Industry Outlook

TheoverallPCsales(Desktop+Notebook)inthefirsthalfoftheyearclockedagrowthof59%ascomparedwiththesameperiod lastyear. Improvedretailmarketgrowthcoupledwiththegrowthintosmallercitiesarethekeydriversforgrowth.Some key trendsa. Atretail level:Therehasbeenanexplosionofmodern

retailing. In Metro cities, contribution by modern retailformatisestimatedtobe28%anditisgrowingatarapidpace. Organized retail is expected to grow at 35-40% CAGR.

b. Atbusinesslevel:IncreaseinPCpenetrationinbusinessestablishmentscontinuesata healthy rate.CorporategrowthisdrivenbygrowthinSmallMediumEnterprises/ Businesses, computerization of various businessprocessesandstatutoryrequirementliketaxation,etc.

Stability in policy frame-work is critical for sustenance andgrowthofbusiness.ThoughoverallsentimentforITHardwarebusiness remains sluggish, sectors like Retail, Hospitality,Manufacturing, Logistics & Transportation, Health Care,Banking,FinancialServices& Insuranceande-Governance&EducationareexpectedtoacceleratetheirITspendsgiventheir focus to increase their products and services penetration intoHeartofIndia.SmallformatorMiniprinters(lessthan10”)withotherperipheralsforPOSarelikelytoplayakeyroleinthis growth phase.

Directors’ Report to the Shareholders (Contd.)

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GrowthofretailandincreasedITspendbytheindustryoffersopportunity for the Company in the POS product categoryand solutions space in Banking and e-Governance areas.There are more than 15 million unorganized shops andestablishmentsinthecountrythatneeddigitization.ConsistentwiththeCompany’sthemeof‘TakingITtotheHeartofIndia’the Company believes that customers prefer products thatoperate inhumidanddustyenvironmentwith lowestcostofownership and yet provideeaseof operationand capabilityin Indian languages. With an enviable market reach as anadvantage,theCompanyhasintroduced“IndiPOS”rangeofproductswiththetheme“ThetouchpointofIndia”thatnotonlymeet theneedsofcustomersbutalsoprovidecosteffectivesupport.

With the estimated expansion of economy in the comingyearsandconsequentexpansion in themarket forproductslike smart phones,ATMs etc., there is growing demand forwarrantybusinessanditisexpectedtogrowsignificantlyandasanational serviceproviderwitha countrywidenetworkthatwehaveandtheexpertise,thereispotentialforgrowingmaintenanceandrepairservicesintheB2BandB2OandB2Csegments.

B. Business Risks & OpportunitiesEconomic growth of India and the attendant expansion ofdomestic demand and consumption leads to a significantneed for data capturing, authentication processing anddisseminatinginformation.Ineverysegmentoftheeconomytheaboveneedis increasinglybecomingcriticalforsuccessofbusinesses.ThebankingsectorwithitsFinancialInclusionobjective, organized retail with a need to penetrate moremarkets, logistics and supply chain wanting to efficientlyreachmoreproductsandmanyotherbusinesseswithsimilarobjectivesarekeentoincreaseautomationrightfromthepointof capture of data. Consequently, demand for many typesof digital devices and services is expected to dramaticallyexpand.

Recognising the changing mix and greater emphasison products and services even from small and mediumenterprises,theCompanyhasembarkedonatransformationprocess and is building product and services for customersinsectorslikeBanking,FinancialServices,Retail,Hospitalityand Healthcare. At the same time, the Company’s classicDMP product range is expected to sustain its position as a low costprintingdevice.TheCompany’sstrategygoingforthisto

capturerevenueandmarginsthroughtheentire lifecycleofdevicesfordatacaptureandinformationdissemination.

• ThekeyimperativesoftheCompanyduring2012-13willbetosustainthecurrentrevenuestreams,buildstrategicframework to go beyond product with engagement indatacapture,processinganddisseminationactivitiesforvalueenhancementtocustomersacrosssegmentsandproducts,continuefocusoncostandrenewengagementin Human Resources Development for retaining andrefreshingkeyleadershiptalentsinthejourneytowardsgrowth.

• Goingforward,theCompany’skeyfocusareawillbetoprovidesignificantvalueadditiontocustomersacrossthevaluechainfortheirbusinesssuccess.Towardsthis,eachof the customer segments, such asRetail,Hospitality,Manufacturing&Logistics,Healthcare,Banking,FinanceServices& Insuranceande-Governance&Education,will beaddressed comprehensively.TheCompanywillexpanditscurrentreachintodirectconsumers,NationalSystem Integrators (NSls), Local System Integrators(LSIs) and Channel Partners comprehensively. TheCompanywillalsocoverkeyinfluencers, like,softwaresolutionpartners inastructuredway for their shareofmindandproactivereferrals.

• POSdomainhashighpotentialtogrowwithlargestakesandinvestmentstakingplaceintheIndianITlandscapeasexplainedearlier.TheCompanyismakingappropriateinvestments in high quality products and servicecapabilities toexploit thesegrowingopportunities.TheCompany has entered into strategic relationships withcore technology leaders in Japan, Taiwan and Koreato offer cutting edge products covering POS printing,automatic identification devices (bar coding), POSTerminals,Systemsetc.

• To sustain and grow the business, the Companyrecognizes theneed for additional demandgenerationprogramstoaugmentthecurrentGotoMarketmodel.

C. Internal Control Systems and Risk Management The Company has robust and adequate internal controlsystems to ensure that all the assets of the Company aresafe-guarded and protected against any loss and all thetransactionsareproperlyauthorized,recordedandreported.ThekeyprocessesarealignedwithIS09001:2008systemandauditedperiodicallyforcompliance.


13

TheAuditCommitteeof theBoard reviews the findingsandrecommendations of the internal auditors periodically. TheCompany follows thepolicyof fullyhedging forex riskon itsimportsbytakingfullcover.TheRiskmanagementframeworkcovering business, operational and financial risks is beingcontinuouslyreviewed.

D. Business Planning and Information Technology

The Company leverages its IT investment to drive robustbusiness planning processes. The Company benefits fromthe SAP system especially with shortened planning cycleshelpingtheCompanytoalign to therequirementsofmarketandcustomers.

E. Human Resource Development

PerformanceandLeadershiparethecornerstonesforHRinthe organization. As on 31stMarch,2012, theCompanyhad671employees.Significantinvestmentismadeonemployeesthroughextensivetraininganddevelopmentprograms.GoodamountofresourceshavebeeninvestedtodriveandembraceChangeManagement processes across the organization tocreateperformanceandgrowthfocus.Theoverallperformancemanagementprocesses supportedby theCompany’s talentmanagement programs now cover the entire organizationand are constantly being reviewed for their effectiveness.TheCompanyhas invested in IT infrastructurecoveringHRprocesseswithsignificantbenefitsthereof.Inductionoffreshtalent from recognisedUniversities andColleges at variouslevels remains an important theme. Training inputs includeperiodic interaction with domain experts particularly in theareas of Total QualityManagement. TheCompany focusesonattractingthebesttalentandblendssuccessfullythemid-careerrecruitmentwithinternallygrowntalents.Arewardandrecognition system is in place tomotivate and provide fasttrackgrowthforhighpotentialemployees.

F. Safety

Safety of products to customers and safe manufacturingpractices are both critical parts of the Company’s valuesystem.Trainingandauditsareconductedfrequentlyduringtheyear.TheCompanymaintainsconsistent track record intermsofzeroreportableaccidentsinthefactoriesforseveralyearsnow.

G. Corporate Social Responsibility

TheCompanycontinuestobeactivelyengagedincorporatesocial responsibility (CSR) initiatives fordevelopmentof the

societythroughpartnershipsparticularlytoimprovethelesserprivileged communities. The Company has identified thefollowingareasaroundwhichtheTeamCSRoperates:

Health and hygiene: Medical camps like eye, dental and anaemia and hygieneprogrammeswereheldespeciallyforschoolchildrentoimprovethe well being of the children belonging to the vulnerablesections. In theareasofhygieneSelfHelfGroupofwomenwere trained inTamil Nadu,MP,Chatisgarh andKarnatakaespeciallyinbackwardareas,halfofwhichwerewithsupportof StateGovernments Symposium heldwithDepartment ofScience andTechnology, NewDelhi, IIT-Madras – RuTAGandUNICEFwas conducted to help improve quality of theproducts used in this regard.

Education:

Improvement in the learningoutcomesandsupport tothe existing educational system with bridge classes,computerbasedlearningprogrammescounsellingandmotivation of students appearing public examinationsare the areas of focus . This resulted in a cent per cent pass percentage in the target population.

Culture and Heritage:

In the last year, culture and heritage activities, wereorganized to promote and maintain the culture andtradition.

TheemployeesoftheCompanyhavealsobeenactivelyengaged in CSR activities like blood donation campsandJoyofGivingprogramme

Cautionary Statement

Statements in the Management Discussion andAnalysisReport describing theCompany’s objectives,projections, estimates and expectations may be“forward looking statements” within the meaning ofapplicable securities laws and regulations. Actualresultscoulddiffermaterially fromthoseexpressedorimplied.Importantfactorsthatcouldmakeadifferenceto the Company’s operations, include, among others,economic conditions affecting demand/supply andpriceconditionsinthedomesticandoverseasmarkets,changesinGovernmentregulations,taxlawsandotherstatutes and incidental factors.


14

Awards and Recognitions

TheCompanyhasbeenawarded:

i) VAR IndiaAward for Best Key Board (Mechanical) 2011

ii)VARIndiaAwardforBestPOS–IndianBrand2011

iii)DELLBestPartnerAwardforFieldServices2012

Subsidiary Companies

TheCompanyhastwosubsidiariesviz.,PrimePropertyHoldings Limited and Tumkur Property HoldingsLimited.

Consolidated AccountsThe accounts of the subsidiaries are consolidated with theaccounts of the Company in accordance with AccountingStandard21(AS21)prescribedbyTheInstituteofCharteredAccountantsofIndia.Theconsolidatedaccountsdulyauditedby the Statutory Auditors and the consolidated financialinformationformpartoftheAnnualReport.

In accordance with the general exemption granted by theCentralGovernmentunderSection212(8)oftheCompaniesAct, 1956 in February, 2011, the BalanceSheet, Profit andLossAccount,ReportoftheBoardofDirectorsandReportoftheAuditorsofthesubsidiarycompaniesarenotattachedtotheBalanceSheetoftheCompany.

TheAnnualAccountsofthesubsidiarycompaniesandrelateddetailed information will be available for inspection by theShareholdersattheRegisteredOfficesoftheCompanyandthesubsidiary companies concernedandwill alsobemadeavailabletotheShareholdersuponrequest.

DividendConsideringthecurrentfinancialpositionoftheCompanyandwithaview toconserve the resources, theDirectorsdonotproposeanydividendforthefinancialyearended31stMarch,2012.

DirectorsAfter a long years of association with the Company, Mr. S R Vijayakar, Mr. R R Nair and Dr. Sridhar Mitta,Directors,resignedfromtheBoardofDirectorswitheffectfrom 2nd February,2012.TheCompanywas immenselybenefitedby their wise counsel and direction during its journey sinceinception. In linewith the transformationof thebusinessoftheCompany, theBoardofDirectorsdecidedtobroadbasetheBoardtotaketheCompanytothenextlevelofgrowth.In

thisconnection,MrBaluDoraisamy,MrPraveenChakravartyand Mrs Srilalitha Gopal were inducted in to the Board of Directors.

During the year, Mr.BaluDoraisamywasappointedasanAdditional Director on 27th May, 2011. The ShareholdershaveapprovedhisappointmentasaDirectorattheSixteenthAnnual General Meeting held on 21st September,2011.

Mr. Praveen Chakravarty and Mrs. Srilalitha Gopal havebeen appointed asAdditional Directors on 10th November,2011. In accordance with the provisions of Section 260 of the CompaniesAct,1956, theywillholdofficeup to thedateoftheensuingAnnualGeneralMeetingoftheCompany.Noticeunder Section 257 of the Companies Act, 1956 has beenreceived fromaMemberproposing theircandidature for theoffice of Director.

Mr.DSundaramandMr.HLakshmanan,Directors,retirebyrotation at the ensuingAnnual General Meeting and beingeligible,offerthemselvesforre-appointment.

Necessaryresolutionsarebeingplacedbeforethemembersfor approval.

Auditors

M/s.Sundaram&Srinivasan,CharteredAccountants,Chennai(Registration No.004207S) retire at the ensuing AnnualGeneralMeetingandareeligibleforre-appointment.

Employee Stock Option Plan2,11,000 options were issued at Rs.70 per share to theeligible employees of the Company under the EmployeesStock Option Scheme (ESOP) in 2003 fully lapsed on 31stMarch,2012.NofreshESOPoptionshavebeenissuedduringthefinancialyearended31stMarch,2012.Detailsoftheoptions granted and options in force as required under Clause 12oftheSecuritiesandExchangeBoardofIndia(EmployeeStockOptionScheme&EmployeeStockPurchaseScheme)Guidelines,1999aresetoutinAnnexure“A”tothisReport.

Recognisingthefactthathumanresourcesarekeytogrowthof the organization and as per the policy of rewarding theemployees, the Company approached the shareholdersandobtainedtheirapproval to instituteandEmployeeStockOption Scheme (ESOP Scheme 2011) for grant of EquityStockOptionsconvertibletoequalnumberofEquitySharesofRs.10eachof theCompany (Options) notexceedinganaggregateof17,65,000optionsconstitutingabout10%ofthepaidupequitysharecapitaloftheCompanyason31stMarch,2011.


15

Personnel

TherewerenoemployeescoveredbytheprovisionsofSection217(2A) of the CompaniesAct, 1956 read with Companies(Particulars of Employees) Rules, 1975 as amended videNotificationNo.GSR289(E)dated31stMarch,2012.

E-Waste ManagementTheCompanyiswellaheadintermsofeWastemanagementcompliancedirectedbyGovernmentofIndiawitheffectfrom1stMay,2012.

Report on energy conservation, foreign exchange and research and developmentInformationrelatingtoenergyconservation,foreignexchangeearned and spent and research and development activitiesundertakenbytheCompanyinaccordancewiththeprovisionsof Section 217(1)(e) of theCompaniesAct, 1956 readwithCompanies(DisclosuresofparticularsinthereportofBoardof Directors) Rules, 1988 are given inAnnexure “C” to theDirectors’ Report.

Corporate GovernancePursuant to Clause 49 of the Listing Agreements with theStock Exchanges, a Management Discussion andAnalysisReportandaCorporateGovernanceReportaremadeapartof this Annual Report.

A Certificate from the Auditors of the Company regardingcompliance of the conditions of Corporate Governance asstipulatedbyClause49of the listingagreement isattachedto this Report.

Public DepositsTheCompanyhasnotacceptedanydeposit fromthepublicwithinthemeaningofSection58AoftheCompaniesAct,1956fortheyearended31stMarch,2012.

InvestmentsThe Company during the year made additional investmentof Rs.10.50 Crores for the fourth and final call in respect of itscommitmenttoTVSShriramGrowthFund-I(Fund).Withthis the total commitment of Rs.35Cr was fully paid by theCompany.DuringtheyeartheCompanyreceivedRs.0.90CrasredemptionproceedsfromtheFund.Duringtheyear,theCompanyaspartofitsacquisitionofServicesbusinessfromTVS-EServicetec Limited, paid part of the consideration inkindbytransferring2,70,000unitsoftheFundatFaceValue

ofRs.1000eachatpar.This reduced its investments in theFundtoRs.7.10Crandimproveditscapitalemployedintheformofcorebusinessassets.

Directors’ Responsibility StatementAsrequiredbySection217(2AA)oftheCompaniesAct,1956,theDirectorsherebystate:

i) that in the preparation of the annual accounts, theapplicableaccountingstandardshadbeenfollowedalongwithproperexplanationrelatingtomaterialdepartures;

ii) thattheDirectorshadselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyattheendofthefinancialyear(namely31stMarch,2012)andoftheprofitoftheCompanyforthatperiod;

iii) that theDirectorshad takenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordance with the provisions of th Act for safeguarding the assets of the Company and for preventing anddetectingfraudandotherirregularities;

iv) thattheDirectorshadpreparedtheannualaccountsfortheyearended31st March,2012ona“goingconcern”basis.

ACKNOWLEDGEMENTThe Directors wish to place on record their appreciation for the committedserviceofalltheemployees.

The Directors would also like to express their gratefulappreciationfortheassistanceandco-operationreceivedfromthe customers, dealer partners, business partners, bankersandtheCompany’sholdingcompaniesviz.,TVSInvestmentsLimited,Sundaram-ClaytonLimitedandT.V.SundramIyengar&SonsLimited.

The Directors thank the Shareholders for the continuedconfidenceandtrustplacedbythemintheCompany.

For and on behalf of the Board

Chennai Gopal Srinivasan 3rd May,2012 Chairman


16

Annexure ‘A’ to Directors’ Report

Statementasat31stMarch,2012pursuanttoClause12(DisclosureintheDirectors’Report)oftheSEBI(ESOP&ESPS)Guidelines,1999.

Employees Stock Option Scheme 2003 (ESOP -2003)

a) Options Granted 2,11,000optionsgrantedon1.1.2003.

b) PricingFormula AverageofthemarketpricequotedintheNationalStockExchangethreemonthsprecedingthedateofgrant,roundedofftothenearestrupee.

c) Options Vested 2,11,000

d) OptionsExercised Nil

e) The total no. of ordinary shares arising as a result of exercise ofoptions

Nil

f) Options lapsed 2,11,000

g) Variationoftermsofoptions Nil

h) Moneyrealizedbyexerciseofoptions Nil

i) Total no. of options in force Nil

j) (i) Details of options granted to Senior Managerial Personnelduringtheyear

Nil

(ii) Anyotheremployeewhoreceivesagrant in anyoneyearofoptionamountingto5%ormoreofoptionsgrantedduringtheyear

Nil

(iii)Identifiedemployeeswhoweregrantedoptions,duringanyoneyear, equal to or exceeding 1% of the issued capital outstandingCompany (excluding outstanding warrants & conversions) of theCompanyatthetimeofgrant.

Nil

k) Diluted earnings per share (EPS) pursuant issue of shares onexercise of option calculated in accordance with the International AccountingStandard(IAS33)

NotApplicable


Chennai Gopal Srinivasan3rdMay,2012 Chairman


17

Annexure “B” to the Directors’ Report for the year ended 31st March, 2012Information as required under Section 217 (1) (e) of theCompaniesAct,1956A. CONSERVATION OF ENERGY(a) Measures taken:

a. ROHScompliant24Wireprinterallpartscompleted,commence to migrate from October, 2012, Samplesvalidation in progress.

(b) Proposed measures:Low power consumption printers based on new BEEstandard.

B. TECHNOLOGY ABSORPTION 1. Specific areas in whichR&Dwas carried out by the

Company:(a) IT Peripheralsi. IndigenousdevelopmentofOwnMicroControllerand

GateArraytechnologyfor24Wireprintersii. Alphadesigncompletedforowncashregister.iii. New32bitScannersvalidationinprogress.iv. LaunchofnewredesignMainlogiccardfor9Wirewith

inbuiltflash,heatlesscarriageIC.v. NewTVS-EGoldKBVariantlaunched(Non-Tactilefor

Noiselessoperation)(b) Customization projectsi. New Thermal printer for Indian Railways for UTS

ticketingapplicationwithexistingcustomerapplicationii. NewThermalPrinterMechanismforBharatElectronics

Ltd.iii. Customizationof40column.PrinterForDairysegment

withDCOperationforMobileprintingapplicationiv. Customizationof40columnPrinterforDiarysegment

which operates with AC as well as DC (Auto change over)

v. Secure 40 Column UTS Ticket printer with built-inBarcode scanner

2. Future plan of action The Company will be repositioning some of the existingproducts and introducing new products in areas of Retail Printing, Point of Sale applications, Authentication andPaymentindustry.3. Expenditure on R&D Rs.InLakhs

Particulars Year ended 31st March,2012

Year ended 31st March,2011

CapitalExpenditure 0.41 0.83 RevenueExpenditure 116.64 136.70Total 117.05 137.53

Total expenditure as a percentage of total turnover = 0.53% (0.75%)

4. Technology absorption, adoption and Innovationsa) Efforts in brief

i. Keyresearchemployeesandnewjoineeshavebeentrained in paper transportation for DMP system,Thermaltechnology,ElectronicCashRegisters,Powerconsumption, Plastic / Sheetmetal parts design andROHScompliance.

ii. All R&D Personnel have been trained in Six SigmaGreen belt program, NewProduct Introduction (NPI)programandAnalysistools.

b) Benefits derived as a result of the above efforts

i. Knowhowof24wireprintingtechnologyscalable forhigherprintingspeeds&costcontrol

ii. Know how of Rugged High Speed 2” Thermalprinter mechanism with high degree of Security &Customization

c) Technology absorption In addition to the DMP, the Company has added POSproducts like Thermal printers, Bar code scanners, Poledisplay,Electronic cash register,MSRKeyBoard,etc. asafocuscategoryforproductdevelopmentintheretailsegmentwith migrating from ASIC chips to own IP related areas.TheCompanywill designanddevelopproductswithhigherstandards to compete in the international market. This willencompass developing of innovative products to reducethe power consumption, meet customer needs, meeting allthe International standards at an affordable cost to the endcustomer.C. EXPORT ACTIVITIESThe Company exported Printers / Printer components.

Particulars 31stMarch,2012

31stMarch,2011

inRs.Lakhs

(a)TotalForexearned(FOB) 84.56 Nil(b)TotalForexused(FOB) 5366.37 4327.42

Total 112.70 137.53


Chennai Gopal Srinivasan3rdMay,2012 Chairman


18

(As required by Clause 49 of the Listing Agreements with the Stock Exchanges)

Company’s Philosophy on Corporate Governance

TheCompany embodies on the philosophy of professional,transparent, fair and ethical practices the basic tenets ofCorporate Governance.TheCompanyhasadoptedaCodeofBusinessConductandEthicsforitsDirectors(includingitsNon-ExecutiveDirectors)andseniormanagementpersonnel.TheCodeisavailableontheCompany’swebsite. TheCompany has also adopted aCode of Conduct for Prevention of Insider Trading as also a Code of Corporate Disclosure Practices. TheCompany is incompliancewiththerequirementsof theguidelines on Corporate Governance stipulated under Clause 49oftheListingAgreementswiththeStockExchanges.A. MANDATORY REQUIREMENTS

1. Board of Directors

1.1 A strong Corporate Governance is key to businesssustainability. This is overseen by the Board of Directorsin respect of strategies, fairness to stakeholders, strongaccounting principles and ethical corporate practices.

1.2 The structure consists of Board of Directors and various Sub-Committees overseeing the entire management. TheBoardconsistsofeightDirectorsofwhomfiveareIndependentDirectorsandallofthemareNon-ExecutiveDirectors.1.3 During the financial year 2011-12 four Board Meetingswere held. The gap between twomeetings did not exceedfourmonths.Thedatesonwhichthesaidmeetingswereheldare as follows:27th May,2011,23rd July,2011,10th November,2011and2nd February,2012.1.4ThelastAnnualGeneralMeeting(AGM)oftheCompanywas held on 21st September,2011andsixDirectorsincludingtheChairmanoftheAuditCommitteeattendedtheAGM.1.5ThenamesandcategoriesoftheDirectorsontheBoard,theirattendanceatBoardMeetingsheldduringtheyearandthenumberofdirectorshipsandCommitteeChairmanships/Memberships held by them in other companies are givenhereinbelow.1.6 None of the Directors is a member in more than tenCommittees and acts as a Chairman in more than fiveCommitteesacrossallcompaniesinwhichhe/sheisaDirector.NecessarydisclosuresregardingCommitteepositionsinotherpubliccompanieshavebeenmadebytheDirectors.

NameoftheDirector Category

No. of Board Meetings duringtheyear2011-12

Whether attended last AGM held on

21stSeptember,2011

NumberofotherDirectorshipsandCommitteeMemberships/Chairmanships

Held Attended LastAGM Other Directorships(a)

CommitteeMemberships(b)

CommitteeChairmanships

Mr. Gopal SrinivasanChairmanDIN 00177699

Non- Independent Non-Executive

4 4 Yes 19 - -

Mr.HLakshmananDIN 00057973

Non- Independent Non-Executive

4 4 Yes 21 8 5

Mr.RRamarajDIN 00090279

Independent Non-Executive

4 4 Yes 13 1 -

Mr.DSundaramDIN 00016304

IndependentNon-Executive

4 4 Yes 6 3 2

Mr. Kenneth Tai DIN 01964412


4 1 No 8 - -

Mr.BaluDoraisamyDIN 00081807


4 4 Yes 1 - -

Mr.SRVijayakar*DIN 00496583


4 2 No 2 - -

Dr.SridharMitta*DIN 00003952


4 4 Yes 7 2 1

Mr.RRNair*DIN 00202551


4 3 No 3 2 1

Mr.SSRaman**Managing DirectorDIN 00214782

Non-IndependentExecutive

4 2 Yes 4 - -

Mr.PraveenChakravarty#DIN00766422(#)

Independent Non-Executive

4 2 NA 1 - -

Mrs. Srilalitha Gopal DIN02329790(#)

Non-Independent Non-Executive

4 2 NA 2 - -

*resignedon2ndFebruary2012**resignedon31st December,2011.#appointedasAdditionalDirectorswitheffectfrom10th November,2011.

Report on Corporate Governance

19

(a) includes directorship of private limited companies,Section25companiesandforeigncompanies

(b) onlymembershipofAuditCommitteeandShareholdersGrievance Committee of other companies have beenconsidered which includes Committees where theDirectorisalsoChairman.

1.7None of theNon-ExecutiveDirectors have anymaterialpecuniaryrelationshiportransactionswiththeCompany.

1.8 None of the Directors are related to each other except Mr. Gopal Srinivasan and Mrs. Srilalitha Gopal who are spouses.

1.9 The Company ensures that all statutory, significantmaterialinformationareplacedbeforetheBoard/CommitteesofDirectorsfortheirapprovaltoenablethemtodischargetheirresponsibilitiesastrusteesofthelargefamilyofshareholders.Duringtheyear,informationasmentionedinAnnexure1AtoClause49oftheListingAgreementshasbeenplacedbeforetheBoardforitsconsideration.TheBoardperiodicallyreviewscomplianceofalllawsapplicabletotheCompany.

1.10 Scheduling and selection of Agenda items for BoardMeetings:

All departments of the Company schedule their work plansin advance, particularly with regard to matters requiringconsiderationattheBoard/CommitteeMeetings.

1.11Postmeetingfollow-upmechanism:

Importantdecisions takenat theBoard/CommitteeMeetingsare promptly communicated to the concerned departments.Action Taken Report on decisions/minutes of previousmeetingsisplacedatthesucceedingmeetingsoftheBoard/Committeefornoting.

1.12 Code of Conduct for Board of Directors and Senior Management:

The Company has adopted a Code of Business Conductand Ethics for Board of Directors and Senior Managementpersonnelviz.,allmembersofmanagementonelevelbelowDirectors, including all functional heads (Code). The CodehasbeencommunicatedtoalltheDirectorsandmembersofthe seniormanagement.TheCode is also available on theCompany's website www.tvs-e.in. All Directors and seniormanagementpersonnelhaveconfirmedcompliancewiththeCodefortheyearended31stMarch,2012.TheAnnualReportcontainsadeclaration to thiseffect signedby thePresidentandChiefExecutiveOfficer.

2. Audit CommitteeThe Board constituted anAudit Committee on 18thAugust,2003. The said Committee is constituted in line with the

provisions of Clause 49 of the Listing Agreements withthe Stock Exchanges read with Section 292A of theCompanies Act, 1956. Consequent to the resignation of Mr. S R Vijayakar and Dr. Sridhar Mitta, Directors theCommitteewas reconstituted by theBoard on 2nd February,2012andthePowersoftheCommitteewerealsoredefinedinlinewiththeexistingamendments:

2.1 Brief terms of reference of theAudit Committee are asunder:

1) Overseeing the Company's financial reporting processanddisclosureof its financial information toensure that thefinancialstatementiscorrect,sufficientandcredible.

2) Reviewing, with the management, the annual financialstatementsbeforesubmissiontotheBoardforapproval,withparticular reference to:

a. Matters required to be included in the Director’sResponsibilityStatementtobeincludedintheBoard’sreportin terms ofClause (2AA) of Section 217 of theCompaniesAct,1956.

b.Changes, ifany, inaccountingpoliciesandpracticesandreasonsforthesame.

c.Majoraccountingentriesinvolvingestimatesbasedontheexerciseofjudgementbymanagement.

d. Significant adjustmentsmade in the financial statementsarising out of audit findings.

e.CompliancewithAccountingStandardsandwithlistingandotherlegalrequirementsrelatingtofinancialstatements.

f.Disclosureofanyrelatedpartytransactions.

g.QualificationsinthedraftAuditReport.

3)Reviewing,withthemanagement,thequarterlyandannualfinancial statements before submission to the Board forapproval.

4)Reviewing,withthemanagement,thestatementofuses/applicationoffundsraisedthroughanissue(publicissue,rightsissue,preferentialissue,etc.),thestatementoffundsutilizedfor purposesother than those stated in theoffer document/prospectus/noticeandthereportsubmittedbythemonitoringagencymonitoring the utilisation of proceeds of a public orrightsissueandmakingappropriaterecommendationstotheBoardtotakeupstepsinthismatter.

5)Reviewing,withthemanagement,performanceofstatutoryand internal auditors, adequacy of the internal controlsystems.6)Reviewingtheadequacyofinternalauditfunction,includingthe structure of the internal audit department, staffing and

Report on Corporate Governance (Contd.)

20

seniority of the official heading the department, reportingstructure,coverageandfrequencyofinternalaudit.7)TherecommendationsoftheAuditCommitteeonfinancialmanagementincludingtheAuditReportshallbebindingontheBoard.IncasetheBoarddoesnotaccepttherecommendationsof the Committee it shall record the reasons there for andcommunicatesuchreasonstotheShareholders.8)Discussionwithinternalauditorsonanysignificantfindingsand follow up thereon. 9)ReviewingthefindingsofanyinternalinvestigationsbytheinternalauditorsoranyotherfirmsofCharteredAccountantsorotherentities/agenciesintomatterswherethereissuspectedfraudorirregularityorafailureofinternalcontrolsystemsofamaterialnatureandreportingthemattertotheBoard.10) Discussion with Statutory Auditors, before the auditcommences,natureandscopeofauditaswellashavepostauditdiscussiontoascertainanyareaofconcern.11) Recommending to the Board, the appointment, re-appointmentand,ifrequired,thereplacementorremovalofthestatutoryauditorandthefixationofauditfees.12)ReviewingtheCompany'sfinancialandriskmanagementpolicies. 13) To look into the reasons for substantial defaults in thepayment to thedepositors,debentureholders,shareholders(incaseofnon-paymentofdividendsdeclared)andcreditors.14)ToreviewthefunctioningoftheWhistleBlowermechanism,incasethesameisexisting.15)ApprovalofappointmentofChiefFinancialOfficeroranyother person heading the finance function or discharging thatfunctionafterassessingthequalifications,experience&background,etc.,ofthecandidate.16)Authority to investigate into anymatter referred to it bythe Board. Explanation:Theterm"relatedpartytransactions"shallhavethesamemeaningascontained in theAccountingStandard

18, Related Party Transactions, issued by The Institute ofChartered Accountants of India.17)TheAuditCommitteeshallmandatorilyreviewthefollowinginformation:i)Managementdiscussionandanalysisoffinancialconditionandresultsofoperations;ii) Statement of significant related party transactions (as defined by the audit committee), submitted bymanagement;iii)Managementletters/lettersofinternalcontrolweaknessesissuedbythestatutoryauditors;iv)Internalauditreportsrelatingtointernalcontrolweaknesses;and v)Theappointment,removalandtermsofremunerationoftheChief internalauditorshallbesubject toreviewby theAuditCommittee.18)All regulations pertaining to the meetings of the Board/ Committees of the Board as contained in the Articles ofAssociationoftheCompanyinsofarastheyarenotrepugnanttothecontextandmeaningthereof,totheprovisionscontainedherein,shallmutatis-mutandis,apply to themeetingsof thisCommittee.2.2 The previousAnnual General Meeting of the Companywas held on 21st September, 2011 and was attended by Mr.D.Sundaram,ChairmanoftheAuditCommittee.2.3SixAuditCommitteeMeetingswereheldduringtheyear.Thegapbetweentwomeetingsdidnotexceedfourmonths.The dates on which the said meetings were held are asfollows:5th April, 2011, 27th May, 2011, 23rd July, 2011, 21st September, 2011, 10th November, 2011 and 2nd February,2012.2.4Thecompositionof theAuditCommitteeand thedetailsofAuditCommitteemeetingsattendedbyitsmembersduringthefinancialyear2011-12aregivenbelow:

S. No. NameoftheMember Status

NumberofMeetingsHeld Attended

1. Mr.DSundaram,Chairman Non-ExecutiveDirector-Independent

6 6

2. Mr.SRVijayakar* Non-ExecutiveDirector- Independent

6 2

3. Mr.HLakshmanan Non-ExecutiveDirector-Non-Independent

6 6

4. Dr.SridharMitta* Non-ExecutiveDirector-Independent

6 6

5. Mr.RRamaraj** Non-ExecutiveDirector-Independent

NA NA

6. Mr.PraveenChakravarty** Non-ExecutiveDirector-Independent

NA NA

*Mr.SRVijayakarandDr.SridharMittaresignedwitheffectfrom2nd February,2012.**Mr.RRamarajandMr.PraveenChakravartywereappointedwitheffectfrom2nd February,2012.


21

3. Remuneration/Compensation Committee:

3.1 The Remuneration/Compensation Committeewas constituted on 18thJuly, 2003. The Committee wasreconstitutedwithMr.GopalSrinivasan,Mr.BaluDoraisamy,Mr.D.Sundaram,Mr.H.LakshmananandMr.R.RamarajasMemberson2nd Februray,2012.TheCommittee

(i) shall act as Remuneration Committee for the purposesof approving any minimum remuneration payable to anymanagerialpersonandothersasdelegatedbytheBoardfromtimetotimeand

(ii) shall act as Compensation Committee to formulate andadministertheemployeestockoptionsoftheCompany.

3.2 The brief terms of reference of the RemunerationCommitteeareasunder:

TheCommittee,onbehalfoftheBoardofDirectorsdeterminewith agreed terms of reference, theCompany’s policy onspecific remuneration packages for executive directorsincluding payment of minimum remuneration in terms ofSchedule XIII of the Companies Act, 1956 and deal withany matters of remuneration to seniorexecutivesof the

Company and also have such power asmay be entrustedto them from time to timeby theBoardofDirectors or anyothermatter includingpensionrightsandanycompensationpaymentetc.

3.3 The Remuneration Committee met on 27th May, 2011to determine the minimum remuneration payable to Mr.SSRaman,ManagingDirector.

3.4 The Committee which also functions as CompensationCommittee administers and superintends the stock optionsgrantedtoeligibleemployeesoftheCompany.TheCommitteeis also empowered to formulate any proposal or issue ofsharesunderEmployeeStockOptionSchemes.

3.5 The Compensation Committee did not meet during theyearintheabsenceofanyspecificagenda.Atotalof2,11,000stock options have been recommended and issued by theCompensationCommittee toeligibleemployees in2003.Allthe2,11,000optionshavelapsedason31stMarch,2012.

3.6 The composition of the Remuneration/CompensationCommitteeanddetailsofRemunerationCommitteemeetingsattendedbyitsmembersaregivenbelow:

S. No. NameoftheMember Status

NumberofMeetingsHeld Attended

1. Mr.RRNair,Chairman* Non-ExecutiveDirector-Independent 1 1

2. Mr.SRVijayakar* Non-ExecutiveDirector- Independent 1 -

3. Mr.HLakshmanan Non-ExecutiveDirector-Non-Independent 1 1

4. Mr.DSundaram Non-ExecutiveDirector-Independent 1 1

5. Mr.GopalSrinivasan** Non-ExecutiveDirector-Non-Independent NA NA

6. Mr.BaluDoraisamy** Non-ExecutiveDirector-Independent NA NA

7. Mr.RRamaraj** Non-ExecutiveDirector-Independent NA NA

*Mr.RRNairandMr.SRVijayakarresignedwitheffectfrom2nd February,2012**Mr.GopalSrinivasan,Mr.BaluDoraisamyandMr.RRamarajwereappointedwitheffectfrom2nd February,2012


3.7RemunerationPolicy

TheCompany’sremunerationpolicyisdrivenbythesuccessandperformanceoftheindividualemployeeandtheCompany.Through its compensation programme, the Company endeavors to attract, retain, develop and motivate a highperformanceworkforce.TheCompanyfollowsacompensationmix of fixed pay, benefits and variable pay. Individualperformance pay is determined by business performanceandtheperformanceoftheindividualsmeasuredthroughtheappraisal process.

During the year, 2011-12, the Company paid Sitting FeesofRs.2,500/-permeeting to itsNon-ExecutiveDirectors forattendingmeetingsoftheBoardandmeetingsofCommitteesof the Board. The Company also reimburses out-of-pocketexpenses incurred by the Directors for attending meetings.3.8DetailsofRemunerationfortheyearended31st March,2012

22

S.No. NameoftheMember StatusNumberofmeetings

Held Attended

1 Mr.GopalSrinivasan,Chairman* Non-ExecutiveDirector 4 4

2 Mr.HLakshmanan Non-ExecutiveDirector 4 4

3 Mr.RRamaraj Non-ExecutiveDirector 4 3

4 Mr.DSundaram** Non-ExecutiveDirector NA NA

*Mr.GopalSrinivasanceasedtobememberwitheffectfrom2ndFebruary,2012**Mr.DSundaramwasappointedwitheffectfrom2ndFebruary,2012

(a)Non-ExecutiveDirectors:

NameoftheDirector SittingFeespaid(Rs.)Mr. Gopal Srinivasan 22,500Mr.HLakshmanan 50,000Mr.SRVijayakar 10,000Mr. R R Nair 10,000Mr.R.Ramaraj 22,500Dr. Sridhar Mitta 25,000Mr.DSundaram 37,500Mr. Kenneth Tai 2,500Mr.BaluDoraisamy 20,000Mr.PraveenChakravarty 5,000Mrs. Srilalitha Gopal 5,000

(b)ManagingDirector:

The remunerationpayable to theManagingDirector is fixedbytheBoardwithinthelimitsapprovedbytheShareholdersintermsoftherelevantprovisionsoftheCompaniesAct,1956.

Mr. SSRaman,ManagingDirectorwaspaidremunerationbywayofsalary,allowances,commissiononprofits,performancelinked incentiveor bonus, (including theannual increments/revisions), medical reimbursement, leave travel concessionfor self and family, club fees, medical/personal accidentinsurancepremiumsandotherbenefitsoramenitiessubjecttoaceilingofRs.30Lakhsperannum.Mr.SSRamanwaspaida total remunerationofRs.19.94Lakhs for theperiod from 1st April,2011to31stDecember,2011.

3.9DetailsofsharesoftheCompanyheldbytheDirectorsason 31stMarch,2012aregivenbelow:

NameoftheDirector NumberofEquityShares held

Mr. Gopal Srinivasan 150Mr.HLakshmanan 350Mr.R.Ramaraj 35,000Mr.DSundaram NILMr. Kenneth Tai NILMr.BaluDoraisamy NILMr.PraveenChakravarty NILMrs. Srilalitha Gopal NIL

4. Investors’ Grievance CommitteeThe Board constituted the Investors’ Grievance Committeeon 18th August, 2003 to, inter alia, approve transfers,transmissions, issue of fresh certificates etc, look into theredressalofcomplaintsofinvestorssuchastransferorcreditofshares,non-receiptofdividend/notices/annualreports,etc.The Investors’ Grievance Committee was reconstituted on 2ndFebruary,2012,withMr.H.Lakshmanan,Mr.R.RamarajandMr.D.SundaramasMembers.4.1FiveInvestors’GrievanceCommitteeMeetingswereheldduringtheyear.Thedatesonwhichthesaidmeetingswereheld are as follows: 7thApril,2011,6thJuly,2011,21stSeptember,2011,3rd October,2011 and 2ndJanuary,2012.4.2Thecompositionof Investors’GrievanceCommitteeanddetailsofmeetingsattendedbyitsmembersaregivenbelow:


23

4.3Complaintsreceivedandredressedduringthefinancialyear2011-12:

Pendingatbeginningofyear Receivedduringtheyear Resolvedduringtheyear PendingatendofyearNil 8 8 Nil

S. No. NatureofComplaint No.ofComplaints

1. Non receipt of share certificates 4

2. Non receipt of dividend warrants 2

3. OtherComplaints 2

Total 8

As on 31st March, 2012 all the complaints received from the investors were redressed and no complaints were pendingfor redressal as on that date. The dematerialisation requests from the Shareholders were also carried out withinthe stipulated time period and no Certificates were pending for dematerialisation as at the end of the financial year 31st March,2012.5. Reconciliation of Share Capital AuditAsrequiredbytheRegulationsoftheSecuritiesandExchangeBoardofIndia(SEBI),theissuedandlistedcapitaloftheCompanyisreconciledwiththeaggregateofthenumberofsharesheldbyinvestorsinphysicalmodeandinthedematmode.ACertificateisbeingobtainedonaquarterlybasistothiseffectfromaPracticingCompanySecretaryandsubmittedtotheStockExchangeswheretheCompany’ssharesarelisted.NodiscrepancieswerefoundorreportedbytheSecretarialAuditorbetweentheissuedandlistedcapitalandtheaggregateofsharesheldbyinvestorsinbothphysicalformandinelectronicformwiththedepositoriesforthefinancialyear2011-12.

5.1GeneralBodyMeetings

a. Annual General Meetings

The last three Annual General Meetings were held as under:

Year Location Date Time

2009 SriThyagaBrahmaGanaSabha(VaniMahal)No.103,GNChettyRoad,T.Nagar,Chennai–600017 4thSeptember,2009 2.45 PM

2010SriThyagaBrahmaGanaSabha(VaniMahal)No.103,GNChettyRoad,T.Nagar,Chennai–600017

6thSeptember,2010 10.00 AM

2011SriThyagaBrahmaGanaSabha(VaniMahal)No.103,GNChettyRoadT.Nagar,Chennai–600017

21stSeptember,2011 10.30 AM

b.ExtraordinaryGeneralMeeting

NoExtraordinaryGeneralMeetingoftheMemberswasheldduringtheyear.

c. Postal Ballot

NoPostalBallotwasconductedduringtheyearbytheCompany.


24

d. Special Resolutions DetailsofSpecialResolutionspassedbyShareholdersduringthelastthreeyearsaregivenbelow

Year SubjectmatterofResolution Date of AGM2008-09 AppointmentofMr.SSRamanasWholetimeDirectoroftheCompanyforaperiodof

threeyearseffective1stMay,2009withoutanyremuneration.4thSeptember,2009

2009-10 AppointmentofMr.SSRamanasManagingDirectoroftheCompanyfrom1stApril,2010 to 30thApril,2012

6thSeptember,2010

2010-11 1.Offernotexceeding3,50,000warrantswithoptiontoexercisetherighttobeallottedequal number of Equity Shares of Rs.10/- each on preferential basis to TranzmuteBusinessAdvisoryLLP,Mumbai.

2.Offernotexceeding12,35,000EquityStockOptionsconvertibleintoequalnumberofEquitySharesofRs.10/-eachconstitutingabout7%of thepaid-upcapitalof theCompanyason31stMarch,2011toEmployeesandDirectorsoftheCompanyundertheESOPScheme2011.

3.Offernotexceeding5,30,000EquityStockOptionsconvertible intoequalnumberofEquitySharesofRs.10/-eachconstitutingabout3%of thepaid-upcapitalof theCompanyason31st March,2011toDirectorsofTVSInvestmentsLimited,theHoldingCompanyunderESOPScheme2011.

4.OfferofStockOptionsequaltoorexceeding1%oftheissuedcapitaloftheCompanyin any year to Employees and Directors of the Company and to Directors of TVSInvestmentsLimitedundertheESOPScheme2011.

21stSeptember,2011

e.NoSpecialResolutionsisproposedtobepassedthroughpostalballotattheensuingAGM.6. Disclosures6.1During theyear, theCompanyhasnotentered intoanytransactionofmaterialnaturewiththeDirectors,theirrelativesormanagement,whichwereinconflictwiththeinterestoftheCompany. The transactions with promoters, its subsidiariesand associate companies etc., of routine nature have beenreported elsewhere in the annual report as per the Accounting Standard (AS 18) issued by the Institute of CharteredAccountants of India.

6.2. There were no instances of imposition of penalties orstrictures on the Company by Stock Exchanges or SEBI,or any statutory authority, on any matter related to capitalmarkets,duringthelastthreeyears.

6.3.AllthemandatoryrequirementsspecifiedunderClause49of theListingAgreementswithStockExchangeshavebeencompliedwith.7. Non-Mandatory Requirements7.1.TheCompanyhas fulfilled the followingnon-mandatoryrequirementsasprescribedinAnnexureIDtotheClause49oftheListingAgreementswiththeStockExchanges.

7.2. The Company ensures that any person who is beingappointed as an Independent Director has the requisite qualifications and experiencewhichwould be of use to theCompanyandwhich, in theopinionof theCompany,wouldenable him to contribute effectively to the Company in hiscapacityasanIndependentDirector.

7.3. TheCompany has set up a Remuneration Committee,detailsofwhichhavebeengivenearlier in thisReport.ThesaidCommitteealsofunctionsasCompensationCommittee.

7.4. The statutory financial statements of theCompany areunqualified.8. Means of Communication8.1ThequarterlyunauditedresultsoftheCompanyhavebeenpublishedinEnglishinBusinessLineandtheTamilversioninMakkalKural.TheCompanyhasoptedtopublishtheauditedannualresultsfortheyearended31stMarch,2012.

8.2Thequarterly/annualfinancialresults,shareholdingpattern,etc.,aresenttoStockExchangesbothinphysicalandinelectronicforms.Theshareholderscanaccessthesameatwww.nseindia.comandatwww.bseindia.comandtheCompany’swebsiteat www.tvs-e.in.


25

9. General Information for Shareholders:a.AnnualGeneralMeeting– Date :Saturday,4thAugust,2012 Time :10:35a.m Venue :SriThyagaBrahmaGanaSabha (VaniMahal),No.103,GNChetty Road,TNagar,Chennai-600017AsrequiredunderClause49(IV)(G)(i)oftheListingAgreementswith the Stock Exchanges, particulars of Directors seekingappointment/re-appointment at the forthcoming AnnualGeneral Meeting (AGM) are given in the Annexure to theNoticeoftheAGMtobeheldonSaturday,4thAugust,2012.

b.FinancialYear:1st April to 31st March

c.Financialreportingforthequarterendingforfinancialyearending 31stMarch,2013(Tentative)

30thJune,2012 UA / A On or Before 14thAugust,2012

30thSeptember,2012 UA / A On or Before 14th November,2012

31stDecember,2012 UA / A On or Before 14th February,2013

31stMarch,2013 UA / A On or Before15thMay,2012 On or Before 30thMay,2012

UA-Unaudited;A-Audited

10. Listing on Stock Exchanges:- The Company’s Equity Shares are listed on the followingStockExchanges:

Sl. No. NameoftheStockExchange StockCode

1 BombayStockExchangeLimitedFloor25,P.J.Towers,DalalStreetMumbai400001

532513

2 NationalStockExchangeofIndiaLimitedExchangePlaza,BandraKurlaComplexBandra(E),Mumbai400051

TVSELECT

Annual listing fees have been paid to the above StockExchanges.

Corporate Identification Number (CIN) of the Company:L30007TN1995PLC032941

11. Market Price Data

11.1 High, Low (based on closing prices) and number ofsharestradedduringeachmonth in thefinancialyear2011-12onBombayStockExchangeLimitedandNationalStockExchangeofIndiaLimited:

Month BombayStockExchangeLimited NationalStockExchangeofIndiaLimited

High(Rs.) Low(Rs.) Total No. of shares traded High(Rs.) Low(Rs.) Total No. of

shares traded

April,2011 25.40 21.50 74,374 25.50 20.20 2,21,280

May,2011 25.80 23.05 51,192 26.00 22.10 2,27,823

June,2011 24.75 23.30 42,093 24.75 22.70 78,698

July,2011 25.70 23.05 62,880 25.70 22.55 1,21,920

August,2011 25.15 18.10 47,422 25.30 18.00 97,460

September,2011 22.00 18.25 54268 21.50 18.00 70,792

October,2011 19.90 17.20 24,931 20.20 16.50 54,035

November,2011 24.50 16.80 1,12,281 24.60 18.10 2,05,520

December,2011 20.55 15.00 35,667 20.65 16.35 46,042

January,2012 20.50 17.00 19,142 21.40 17.15 82,004

February,2012 20.50 18.00 52,639 21.00 17.35 1,63,885

March,2012 19.50 16.00 44,978 20.90 16.25 78,706


d.PeriodofBookClosure,1stAugust,2012to4th August,2012bothdaysinclusive.

26

11.2SharePriceperformanceincomparisontobroadbasedindices–BSESensex

The Company’s share price performance in comparison toBSESensexbasedonsharepriceason31stMarch,2012.

Financial year

Percentage change inCompany’s

shareprice(%)Sensex(%)

2011-12 (22.14) (10.50)2010-11 (17.97) 10.942009-10 90.33 80.542008-09 (56.40) (37.95)

12. Transfer System: With a view to rendering prompt and efficient servicesto the investors, the Company has handed over theshare registry work pertaining to the Company to M/sSundaram-ClaytonLimited,(SCL)Chennai, theultimateHoldingCompanywitheffect from11thOctober,2004.SCLhas registered itself with SEBI as share transfer agents inCategoryIItocarryontheshareregistryworkofgroupaswellasassociatecompanieswitheffectfrom21stApril,2004.

95.21% of the Equity shares of the Company are held inelectronic form as on 31st March, 2012. Transfer of thesesharesisdonethroughthedepositorieswithnoinvolvementoftheCompany.Asregardstransferofsharesheldinphysicalform the transfer documents can be lodged with SCL ataddressgivenbelow.

Sundaram-Clayton Limited 22,RailwayColonyIIIStreet MehtaNagar,Chennai–600029 Telephone : 91 44 23741889/2939 Fax : 91 44 23741889 E-mail:[email protected] [email protected] Time:10.00a.m.to3.30p.m. (MondaytoFridayexceptholidays)

Transfer of shares in physical form is normally processedwithintendaysfromthedateofreceipt,ifthedocumentsarecompleteinallrespects.

13 a. Distribution of equity shareholding as on 31st March,2012:

No. of shares held

No. of share

holders

% of share

Holders

No. of shares held

% of share

holdingUpto 500 21,411 91.68 28,31,872 16.02501 to 1000 1,149 4.92 9,48,577 5.371001 to 2000 395 1.69 6,03,781 3.422001 to 3000 133 0.57 3,32,973 1.883001 to 4000 72 0.31 2,54,479 1.444001 to 5000 57 0.24 2,68,510 1.525001 to 10000 86 0.37 6,51,814 3.6910001andabove 52 0.22 1,17,80,812 66.66TOTAL 23,355 100.00 1,76,72,818 100.00

b.Patternofequityshareholdingason31stMarch,2012

Shareholders No. of shares held

% of totalshares held

PromoterCompanies 1,05,53,449 59.72Directors&Relatives 36,050 0.20Corporate Bodies 5,03,777 2.85NationalisedBanks/MF/UTI/PFI 67,050 0.38Resident Individuals 61,65,877 34.89Foreign Institutional Investors 100 0.00Non-Resident Indians/Overseas Corporate Bodies 3,46,515 1.96

TOTAL 1,76,72,818 100.00

14. Dematerialisation of Shares and Liquidity:The Company’s shares are compulsorily traded indematerialisedformandareavailablefortradingonboththedepositoriesinIndiaviz.NationalSecuritiesDepositoryLimited(NSDL) and Central Depository Services (India) Limited(CDSL).EquitysharesoftheCompanyrepresenting95.21%oftheCompany’sequitysharecapitalaredematerialisedason 31stMarch,2012.

The Company’s equity shares are regularly traded on theNational Stock Exchange of India Limited and the BombayStockExchangeLimited,indematerialisedform.

Under the Depository System, the International SecuritiesIdentificationNumber(ISIN)allottedtotheCompany’ssharesisINE236G01019.

• Outstanding GDRs/ADRs/Warrants or any Convertibleinstruments,conversiondateandlikelyimpactonequity:


27

• Ason31stMarch,2012, theCompanyhadoutstandingwarrants of 3,50,000 issued to an investor which areconvertibletoequalnumberofEquitySharesofRs.10/-each. Upon conversion, this will constitute 1.94% ofenhancedequitysharecapitaloftheCompany

15. Plant locations:

Uttarkhand : No.E12,F-92&F-93 SelaquiIndustrialEstate Selaqui,Dehradun, Uttarkhand Tel: 0135-269 8662/63

16. Address for Investor’s Correspondence:

Sundaram-Clayton Limited, Share Transfer Agent

Unit:TVSElectronicsLimited Sundaram-ClaytonLimited 22,RailwayColonyIIIStreet MehtaNagar,Chennai-600029 Tel:+91-44-23741889/2939 Fax No: 91-44-23741889

E-mail:[email protected];[email protected]; [email protected]

Designated e-mail address for investor services:[email protected]

17. Request to Investors

• Investorsholdingsharesinphysicalmodearerequestedto communicate change of address, bank accountdetails,dematerialisationrequest,etc.,ifany,directlytothe Registered Office or the Share Transfer Agent of the Company.

• Investorsholdingsharesinelectronicformarerequestedto deal only with their Depository Participant (DP) inrespectofchangeofaddress,bankaccountdetails,etc.

• Dematerialise yourPhysicalShares toElectronicFormandeliminateall risksassociatedwithholdingphysicalshare certificates. It also provides ease in Portfolio Management.

• GreenInitiative-Investorstoregistere-mailidswithDPortheCompany

• Investors who have not availed nomination facility arerequestedtokindlyfillinthenominationformandsubmitthesame to theCompany/ShareTransferAgentor theDPalongwiththerequisiteproofofnomination.

• Investorsarerequestedtokindlynotethatanydividendwhichremainsunencashedforaperiodofsevenyearswillbetransferredtothe“InvestorEducationandProtectionFund”(IEPF)intermsofSection205CoftheCompaniesAct,1956.

StatusofunclaimeddividendsdueforremittanceintoIEPFisgivenbelow:

Financial Year Date of Declaration Date of transfer to Special Account DueDatefortransfertoIEPF

Period ended 31.3.2005 (15months) 08.08.2005 13.09.2005 13.09.2012

Year ended 31.3.2006 28.09.2006 03.10.2006 03.10.2013

Year ended 31.3 2007 24.09.2007 30.10.2007 30.11.2014

Year ended 31.3 2008 05.09.2008 11.10.2008 11.10.2015


28

Declaration pursuant to Clause 49 of the Listing Agreement regarding adherence to the Code of Conduct

To

The Shareholders of TVS Electronics Limited Chennai - 600 006

WeherebydeclarethatallMembersoftheBoardandtheSeniorManagementPersonnelhaveaffirmedcompliancewiththerespectiveprovisionsoftheCodeofConductoftheCompanyformulatedbytheBoardofDirectorsforthefinancialyearended31stMarch,2012.

Chennai J N SASTRY 3rdMay,2012 PresidentandChiefExecutiveOfficer

Auditors’ Certificate on Compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreements

To TheShareholdersofTVSElectronicsLimited Chennai–600006

WehaveexaminedthecomplianceoftheconditionsofCorporateGovernancebyTVSElectronicsLimited,Chennai(“theCompany”)fortheyearended31stMarch,2012asstipulatedinClause49oftheListingAgreementoftheCompanywithStockExchanges.

ThecomplianceofconditionsoftheCorporateGovernanceistheresponsibilityofthemanagement.Ourexaminationwaslimitedtoareviewoftheproceduresandimplementationthereof,adoptedbytheCompanyforensuringthecomplianceoftheconditionsoftheCorporateGovernance.ItisneitheranauditnoranexpressionofopiniononthefinancialstatementsoftheCompany.

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,wecertifythattheCompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulatedintheabovementionedListingAgreement.

We further state that such compliance is neither anassuranceas to the further viability of theCompanynor theefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.

For SUNDARAM & SRINIVASAN Chartered Accountants

FirmRegistrationNo:004207S

Chennai M BALASUBRAMANIYAM 3rdMay,2012 Partner

MembershipNo:F7945

Auditors’ Certificate

29

Auditors’ Report to the Members of TVS Electronics Limited, Chennai for the year ended 31st March, 2012

We have audited the attached Balance Sheet of M/s. TVS Electronics Limited, “Jayalakshmi Estates”, 29, HaddowsRoad,Chennai-600006asat31stMarch,2012,theStatementofProfit&Lossfortheyearended31stMarch,2012annexedtheretoandtheCashFlowStatementfortheyearendedonthatdate.ThesefinancialstatementsaretheresponsibilityoftheCompany’sManagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

1. We conducted our audit in accordance with the Auditing Standards generally accepted in India. These standardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis evidence supporting the amounts and disclosures inthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditprovidesareasonablebasisforouropinion.

2.As required by the Companies (Auditor’s Report) Order,2003 and amended by the Companies (Auditor’s Report)(Amendment)Order,2004issuedbytheCentralGovernmentintermsofsub-section(4A)ofSection227oftheCompaniesAct, 1956, we enclose in the annexure a statement on themattersspecifiedinparagraphs4and5ofthesaidOrder.

3.FurthertoourcommentsintheAnnexurereferredtoabove,we state that -

(a) Wehaveobtainedalltheinformationandexplanations,whichtothebestofourknowledgeandbelief,werenecessaryforthepurposeofouraudit;

(b) Inouropinion,properbooksofaccountasrequiredby law, have been kept by theCompany so far asappearsfromourexaminationofthosebooks;

(c) TheBalanceSheet,StatementofProfitandLossandCashFlowStatementreferredtointhisreportareinagreementwiththebooksofaccount;

(d) Inouropinion,theBalanceSheet,StatementofProfitandLossandtheCashFlowStatementdealtwithbythis report comply with the Accounting Standards,referredtoinsub-section(3C)ofSection211oftheCompaniesAct,1956.

(e) OnthebasisofwrittenrepresentationsreceivedfromtheDirectors of theCompany and taken on recordbytheBoardofDirectors,wereportthatnoDirectorisdisqualifiedfrombeingappointedasaDirector intermsofclause(g)ofsub-section(1)ofSection274oftheCompaniesAct,1956onthesaiddate;

(f) Inouropinionandtothebestofourinformationandaccording to the explanations given to us, the saidaccounts, read together with the notes thereon,particularly the notes under AS13 (Accounting forInvestments), give the information required by theCompanies Act, 1956, in the manner so requiredandgivea trueand fair view inconformitywith theaccountingprinciplesgenerallyacceptedinIndia:

(i) insofarasitrelatestotheBalanceSheet,ofthestateofaffairsoftheCompanyasat31stMarch,2012;

(ii) insofarasitrelatestotheStatementofProfitandLoss, of the profit of theCompany for the yearended 31stMarch,2012;and

(iii)insofarasitrelatestotheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.



M BALASUBRAMANIYAM

Partner Chennai MembershipNo.F7945 May3,2012.

Auditors’ Report

30

Annexure referred to in our report of even date on the accounts for the year ended 31st March, 2012

1. a) The Company has maintained proper recordsshowing full particulars including quantitative details and situation of the fixed assets.

b) The assets are physically verified, in phases, bytheManagementduring theyearasper the regularprogramme of verification, which in our opinion isreasonablehavingregardtothesizeoftheCompanyandthenatureofitsassets.Nomaterialdiscrepancieswere noticed on such physical verification. ThediscrepanciesnoticedonsuchverificationhavebeenappropriatelydealtwithinthebooksofaccountoftheCompany.

c) DuringtheyeartheCompanyhasdisposedoffunusedassetsandthelossarisingtherefromisdisclosedasexceptionalitemofexpenditure.TheassetsdisposedoffduringtheyeararenotsubstantialandthereforedonotaffectthegoingconcernstatusoftheCompany.

2. a) The stock of rawmaterials, stores, spare parts andfinished goods other than in transit were physicallyverifiedduringtheyearbytheManagement. Inouropinion, the frequency of verification is reasonable.Inrespectofinventorywiththirdparties,whichhavenot been physically verified, there is a process ofobtainingconfirmationfromsuchparties.

b) In our opinionandaccording to the information andexplanationsgiventous,theproceduresofphysicalverificationofinventoryfollowedbytheManagementarereasonableandadequateinrelationtothesizeoftheCompanyandthenatureofitsbusiness.

c) In our opinion, theCompanyhasmaintainedproperrecords of inventory. Thediscrepancies noticed onverificationbetweenthephysicalstocksandthebookrecords were not material and have been properlydealtwithinthebooksofaccount.

3. a)Duringtheyear,theCompanyhasgrantedunsecuredloan of ` 521 lakhs (Balance as at 31.03.2012 - `200lakhs)toaCompanycoveredintheRegistermaintained under Section 301 of the CompaniesAct,1956.The rateof interestandother termsandconditionsoftheloanarenotprimafacieprejudicialtotheinterestoftheCompany.ThereceiptofPrincipalamount and interest thereon are regular.As on thedateofBalanceSheettherewasnooverdueamountrecoverableonthesaidunsecuredloans.

b) DuringtheyeartheCompanyhasnotavailedanyloanfromcompaniescovered in theRegistermaintainedunderSection301oftheCompaniesAct,1956.

4. In our opinion and according to the information andexplanationsgiventous,thereareadequateinternalcontrolprocedurescommensuratewiththesizeoftheCompanyandthenatureofitsbusiness,withregardtopurchaseofinventoryand fixed assets and for the sale of goods and services. During the course of our audit, nomajorweaknesses havebeennoticedintheinternalcontrolsystem.5. a) Based on the audit procedures applied by us and

according to the information and explanationsprovidedbytheManagement,weareof theopinionthat the contracts or arrangements that need to beentered in theRegistermaintained in pursuance ofSection301of theCompaniesAct,1956havebeenproperlyenteredinthesaidRegister.

b) Inouropinionandaccording to the informationandexplanations given to us, the transactions enteredin the Register maintained under Section 301 andexceedingduringthefinancialyearby`5.00lakhsinrespectofeachpartyhavebeenmadeatpriceswhicharereasonablehavingregardtotheprevailingmarketpricesattherelevanttime.

6. The Company has not accepted any deposits from thepublic.7. The Company has an internal audit system, which inouropinion, iscommensuratewith itssizeandnatureof itsbusiness.8.Wehavebroadlyreviewedthebooksofaccountmaintainedby theCompanypursuant to the rulesmadeby theCentralGovernmentunderSection209(1)(d)of theCompaniesAct,1956formaintenanceofcostrecordsandareoftheopinionthat,prima facie, theprescribedaccountsand recordshavebeenmadeandmaintained.9. a) Accordingtotherecordsprovidedtous,theCompany

isgenerallyregularindepositingundisputedstatutorydues including Provident Fund, Investor Educationand Protection Fund, Employees’ State Insurance,Income-Tax, Sales-Tax, Wealth Tax, Service Tax,CustomsDuty,ExciseDuty,Cessandotherstatutorydues with the appropriate authorities. However marginal delay was noticed in respect of oneEmployeeStateInsuranceremittance.

b) Accordingtothe informationandexplanationsgivento us, no undisputed amounts payable in respectof IncomeTax,WealthTax,SalesTax,ServiceTax,CustomsDuty,ExciseDutyandCesswereinarrears,as at 31stMarch,2012foraperiodofmorethansixmonthsfromthedatetheybecamepayable.

Annexure to the Auditors’ Report

31

NameoftheStatute Nature of dues Amount (`inlakhs) Forumwheredisputeispending

Sales Tax Acts of various states

StatutoryForms/EntryTax/Warrantyreplacementstockrelated/Turnoverdispute

270.08AssistantCommissioner/DeputyCommissioner/AppellateAuthorities – Commercial Taxes ofvarious states.

Income Tax Act,1961

a)Costofacquisitionofcertaincapitalassetsoldanddeterminationofcapitalgain.b)ClaimofTDSdisallowed.c)Inventorywrite-offdisallowed.d)Wronglevyofinterestundervarious provisions of the Act.

220.20

49.65193.82

14.42

Commissioner of Income Tax (Appeal),Chennai.

Service Tax Dispute on availment of input tax credit for exemptedanddutiablegoods. 121.15 Customs, Excise and Service Tax Appellate

Tribunal,Chennai(CESTAT).

Excise Refund disputed. 13.23 Customs, Excise and Service Tax AppellateTribunal,Chennai(CESTAT).

Customs Special Additional Duty refund claim rejected bydepartment. 10.25 The Commissioner of Customs (Appeals),

Chennai.

10.TheCompanyneitherhasaccumulated lossesasat theendofthefinancialyearnorhasincurredcashlossesduringthefinancialyearandintheimmediatelyprecedingyear.

11.BasedonourverificationandaccordingtotheinformationandexplanationsgivenbytheManagement,theCompanyhasnotdefaultedinrepaymentofduestoanyfinancialinstitutionorbank.

12.Basedonourexaminationandaccordingtotheinformationandexplanationsgiventous,theCompanyhasnotgrantedloansandadvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities.

13. The Company is not a chit / nidhi / mutual benefitfund / society and as such clause (xiii) of theOrder is notapplicable.

14.TheCompanyisnotdealingortradinginshares,securities,debenturesandotherinvestments.AllinvestmentsareheldintheCompany’sownnameexcept in thecaseof investmentinwhollyownedsubsidiarieswherecertainnumberofsharesare held by nominees as provided in Section 49 (3) of theCompaniesAct,1956.

15.TheCompanyhasnotgivenanyguaranteeforloanstakenbyothersfrombankorfinancialinstitution.

16.Inouropinion,thetermloanswereappliedforthepurposeforwhichtheloanswereobtained.

17.On thebasisof ourexamination, theCompanyhasnotused the funds raised on short-term basis for long-terminvestments.

18.Duringtheyear,theCompanyhasnotallottedanysharesonpreferentialbasistopartiesandcompaniescoveredintheRegistermaintainedunderSection301oftheCompaniesAct,1956.

19. During the year, the Company has not issued anydebentures.

20.Duringtheyear,theCompanyhasnotraisedanymoneybypublicissue.

21.Basedon theauditproceduresadoptedand informationandexplanationsgiventousbytheManagement,nofraudonorbytheCompanyhasbeennoticedorreportedduringthecourse of our audit.



M BALASUBRAMANIYAM Partner

Chennai MembershipNo.F7945 May3,2012.

c Accordingtotheinformationandexplanationsgiventous,thefollowingarethedetailsofthedisputeddues,thatwerenotdeposited with the concerned authorities.

Annexure to the Auditors’ Report (Contd.)

32

Balance Sheet as at 31st March, 2012

33

Statement of Profit & Loss for the Year ended 31st March, 2012

34

Note no. 1 - Share Capital

Notes to Balance Sheet

Particulars As at 31.03.2012 As at 31.03.2011

Number ìnlakhs Number ìnlakhs

AuthorisedEquitySharesofparvalueof` 10/- each

IssuedEquitySharesofparvalueof` 10/- each Subscribed & Paid up1,76,72,818EquitySharesof` 10eachfullypaid

2,50,00,000

1,76,72,818

1,76,72,818

2,500.00

1,767.28

1,767.28

2,50,00,000

1,76,72,818

1,76,72,818

2,500.00

1,767.28

1,767.28

Total 1,76,72,818 1,767.28 1,76,72,818 1,767.28

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period

ParticularsEquityShares

Number ìnlakhsShares outstanding at the beginningoftheyear 1,76,72,818 1,767.28

Shares Issued during the year

- -

Sharesboughtbackduringtheyear

- -

Shares outstanding at the endoftheyear

1,76,72,818 1,767.28

Right and preferences attached to equity share:

(i) Everyshareholderisentitledtosuchrightsastoattendthemeeting of the shareholders, to receive dividendsdistributedandalsohasaright in theresidual interestof the company. Every shareholder is also entitledto rightof inspectionofdocumentsasprovided in theCompaniesAct,1956.

(ii) Therearenorestrictionsattachedtotheequityshares.

Money received against share warrants:

This is in respect of 3,50,000 warrants. The holder of thewarrants has the option to exercise the right to be allottedequal number of Equity shares of par value of .̀10/- each at a premium of .̀12.75 per equity share. The aggregateprice of warrants is .̀79.62Lakhs.Aspertermsofallotment25% is tobepaid immediatelyonallotment.Thusasumof.̀19.91Lakhsisreceivedon3rdOctober,2011viz.,thedateof

allotment.Eachwarrantcarriesanoptionforconversionintoequity.Theoptioncanbeexercisedinrespectofanynumberofwarrants.Theconversionoptionistobeexercisedbefore2ndApril,2013.Incasethewarrantholderdoesnotexercisetheoptionbefore thesaiddate theoption to thatextentnotexercised shall lapse and the consideration paid in respect of suchwarrantsshallbeforfeited.Pendingallotmentofequityshares the warrants do not bear any interest. The equitysharesallottedonexerciseofoptionshallrankparipassuinallrespectswiththethenexistingfullypaidupequityshares.Thewarrantsallottedandequitysharesallottedpursuant totheexerciseofoptionshallbe locked-in foraperiodofoneyearfromthedateoftheirallotment.

Particulars of shares held by the Holding Company

OutofequitysharesissuedbytheCompany,sharesheldbytheHoldingCompanyareasbelow:

Name of the HoldingCompany

No. of Shares heldAs at

31.03.2012As at

31.03.2011TVS Investments Limited,Chennai 1,05,53,449 1,05,53,449

Details of shareholders holding more than five percentshares

NameofShareholder

As at 31.03.2012

As at 31.03.2011

No. of Shares held

No. of Shares held

TVSInvestmentsLimited,Chennai

1,05,53,449 1,05,53,449

35

Notes to Balance Sheet (Contd.)

36


37


38

Fixe

d A

sset

sG

ross

Blo

ckA

ccum

ulat

ed D

epre

ciat

ion

Net

Blo

ckBa

lance

as

at

01.04

.2011

Addit

ions

/(Disposals

)

Acqui

red

throug

hbusi

ness

combin

ations

Balan

ce

as at

31

.03.20

12

Balan

ce

as at

01

.04.20

11

Depr

eciat

ion

cha r

ge fo

r the

year

With

draw

n on

dispo

sals

Balan

ce as

at

31.03

.2012

Bal

ance

as

at

31.0

3. 2

012

Balan

ce as

at

01.04

.2011

aTa

ngib

le A

sset

sLand

223.5

8 -

-

22

3.58

-

-

-

-

223

.58

223.5

8 La

nd T

otal

223.5

8 -

-

22

3.58

-

-

-

-

223

.58

223.5

8 Bu

ilding

sinclud

ingim

provem

ents

897.7

1 (237.16

) 30

.61 -

691.1

6 58

4.19

32.21

23

6.50

379.9

0 3

11.2

6 31

3.52

Bui

ldin

gs T

otal

897.7

1 (237.16

) 30

.61

691.1

6 58

4.19

32.21

23

6.50

379.9

0 3

11.2

6 31

3.52

PlantandEquipm

ent

4,072.5

8 22

.71

(928.91

) 29

5.44 -

3,461.8

23,254.2

0 14

3.43

856.1

3 2,541.5

0 9

20.3

2 81

8.38

Plan

t and

Equ

ipm

ent T

otal

4,072.5

8(906.20

) 29

5.44

3,461.8

23,254.2

0 14

3.43

856.1

3 2,541.5

0 9

20.3

2 81

8.38

Furn

iture

and F

ixtur

es 18

9.43

0.50

(13.9

4) 24

.39 -

200.3

8 -

115.6

5 10

.47

9.82

11

6.30

84.

08

73.78

Furn

iture

and

Fix

ture

s To

tal

189.4

3 (13.4

4) 24

.39

200.3

8 11

5.65

10.47

9.

82

116.3

0 8

4.08

73

.78

Vehic

les 41

.77

0.52

(12.3

4) -

29

.95

39.29

1.

82

11.86

29

.25

0.7

0 2.

48

Vehi

cles

Tot

al 41

.77

(11.8

2) -

29

.95

39.29

1.

82

11.86

29

.25

0.7

0 2.

48

Officee

quipm

ent

1,487.9

4 22

.21

(20.1

8) 32

.97

1,522.9

41,395.0

5 48

.28

10.80

1,432.5

3 9

0.41

92

.89

Offi

ce e

quip

men

t Tot

al1,487.9

4 2.

03

32.97

1,522.9

41,395.0

5 48

.28

10.80

1,432.5

3 9

0.41

92

.89

Othe

rs: Ta

ngib

le A

sset

s Add

ition

s To

tal

Tang

ible

Ass

ets

Disp

osal

s To

tal

-

-

45.94

(1,21

2.53)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Tot

al

6,913.0

1(1,16

6.59)

383.4

1 6,129.8

35,388.3

8 23

6.21

1,125.1

14,499.4

8 1

,630

.35

1,524.6

3b

Inta

ngib

le A

sset

sCo

mpute

rsoftwa

re -

-

66

.94

66.94

-

36

.88

-

36.88

3

0.06

-

C

ompu

ter s

oftw

are

Tota

l -

-

66

.94

66.94

-

36

.88

-

36.88

3

0.06

-

Intellectua

lPropertyRigh

tsBu

sines

s Righ

ts 80

0.00

-

3,262.9

1 80

0.00

3,262.9

1 63

9.67 -

76

.00

154.9

9 -

-

71

5.67

154.9

9 8

4.33

3

,107

.92

160.3

3 -

Inte

llect

ual P

rope

rty

and

Bus

ines

s R

ight

s To

tal

800.0

0 -

3,262.9

14,062.9

1 63

9.67

230.9

9 -

87

0.66

3,1

92.2

5 16

0.33

Tot

al

800.0

0 -

3,329.8

54,129.8

5 63

9.67

267.8

7 -

90

7.54

3,2

22.3

1 16

0.33

cC

apita

l Wor

k In

Pro

gres

sBu

ilding

sPlant&

Equipm

ent

4.73

71

.70

-

-

4.73

71

.70

-

-

-

-

-

-

-

-

4.7

3 7

1.70

-

-

T

otal

-

76

.43

-

76.43

-

-

-

-

7

6.43

-

G

rand

Tot

al

7,7

13.0

1 (1

,090

.16)

3,7

13.2

6 1

0,33

6.11

6

,028

.05

504

.08

1,1

25.1

1 5

,407

.02

4,9

29.0

9 1

,684

.96

Not

e no

.9 -

Non

-Cur

rent

Ass

ets

- Fix

ed A

sset

s` inlak

hs


39

Details of Other Investments - Non trade

Sl.No.

NameoftheBodyCorporate

Subsidiary/Associate /

JV/ Controlled Entity/Others

No. of Shares / Units

Quoted/Unquoted

PartlyPaid / Fullypaid

Extentof Holding(%)

Amount(` inLakhs)

"Whether stated at

Cost Yes / No"

"If Answer toColumn(9)is'No'-

Basis of Valuation"

2012 2011 2012 2011 2012 2011

(a) Investement in Equity Instruments

TumkurPropertyHoldingsLimited,Chennai

Subsidiary 50,000 50,000 Unquoted Fullypaid

100% 100% 5.00 5.00 Yes

PrimePropertyHoldingsLimited,Chennai

Subsidiary 50,000 50,000 Unquoted Fullypaid

100% 100% 5.00 5.00 Yes

Modular Infotech Private Limited,Pune

Others 907,255 907,255 Unquoted Fullypaid

90.73 90.73 Yes

100.73 100.73

(b) Other investments:

CapitalcontributiontoTVSShriramGrowthFund,Chennai

Others 71,050 245,000 Unquoted Fullypaid

- - 710.50 2,450.00 Yes -

Total 811.23 2,550.73

Notes to Balance Sheet as at 31.03.2012Notes to Balance Sheet (Contd.)

40


41


42

Notes to Statement of Profit and Loss

43

Notes to Statement of Profit and Loss (Contd.)

44

As at / Year ended 31.03.2012

1

23- NOTES ON ACCOUNTS

ACCOUNTING STANDARDS COMPLIANCE

The financial statements have been prepared in accordancewith thenorms and principles prescribed in theAccounting Standards issuedby the Institute ofCharteredAccountants of Indiawhich are itemisedbelow.AS - 1 Disclosure of accounting policies

TheCompanyisfollowingaccrualbasisofaccountingonagoingconcernconcept and the policies applied are consistent with those applied in the previousyear.AS - 2 Valuation of inventories

Raw materials,components, stores and spares and other tradingproducts are valued at cost determined on weighted average basis.Workinprocessincludesmaterialcostandapplicabledirectoverheads.Finishedgoodsandtradedgoodsarevaluedattheaggregateofmaterialcostandapplicabledirectandindirectoverheadsornetrealisablevaluewhichever is lower.

b Excise Duty in respect of finished goods lying within the factory areincluded in the valuation of inventories.

c Asperpracticeconsistentlyfollowed,CustomsDutyandCountervailingDuty payable on rawmaterials, components and finishedgoods lyingin customsbondedwarehouses is accounted for on debonding.Non-provisionofthisdutywillnotaffecttheprofitfortheyear.AS - 3 Cash Flow Statements

CashFlowStatementhasbeenpreparedunder"IndirectMethod".AS - 4 Contingencies and Events occurring after the Balance Sheet date

There are no contingencies and events after the Balance Sheet date thataffectthefinancialpositionoftheCompany.Contestedliabilitiesandoutstandingbankguaranteesaredisclosedbywayofanote.AS - 5 Net Profit or Loss for the year, prior period items and changes in accounting policies

DetailsofpriorperioditemsinProfitandLossAccount


i) Expenses Power and Fuel - 0.28 Welfare - 0.09 Leaserent 3.79 0.05 RepairsandMaintenance-Housekeeping - 0.86 RepairsandMaintenance-OfficeEquipments - 0.01 Rates and Taxes - 0.95 Interest- Others - 0.56 Foreign Travel 1.53 - Consultancy 1.09 - Data Processing charges 0.07 -

Notes on Accounts

a

` inlakhs

45


AS - 6 Depreciation accounting

a DepreciationonFixedAssetsisprovidedonstraightlinemethodattheratesandinthemannerprescribedinScheduleXIVtotheCompaniesAct,1956withapplicableshiftallowanceexcept:i)Oncomputers(includingprinters,uninterruptiblepowersupplysystemsand computer accessories) and vehicles acquired on or after 01-04-1998, depreciation has been charged at 30% and 18% respectivelyonstraight linemethod,whicharehigher than the ratesprescribed inSchedule XIV.ii) In respect of Buildings acquired on lease, depreciation has beenchargedat 20%on straight linemethodwhich is higher than the rateprescribedinScheduleXIVtotheCompaniesAct,1956.iii)On IntellectualPropertyRights , depreciationhasbeenchargedat9.5%perannumunderstraightlinemethod.iv) OnBusinessRights, depreciation has been charged at 9.5% perannumunderstraightlinemethod.v)OnSoftware,depreciationhasbeenchargedat50%perannumonpro-ratabasisunderstraightlinemethod.vi)Onassetswhoseactualcostdoesnotexceed` 5,000 individually,depreciationhasbeenprovidedat100%.vi)Fromfinancialyear2005-06,ToolsandMouldswhicharethreeyearoldhavebeensubjecttodepreciation@31.67%asagainstnormalrateof16.21%,soastobringthewrittendownvalueofsuchassetsto5%of original cost.vii)OncertainclassofOfficeEquipmentsdepreciationhasbeenchargedat99%ofitsoriginalcostonpro-ratabasis,consideringtheusefullifeofassetasoneyearasagainstScheduleXIVrates.

b Inrespectofassetsdepreciatedonstraightlinemethodwhichhavebeenacquiredonamalgamation/businesstransfer,depreciationisprovidedontheoriginalcostofacquisitionasappearinginthebooksoftransferorcompanies.AS - 7 Accounting for Construction Contracts

TheCompanyisnotengagedinanyConstructionbusinesscoveredbythis Standard.AS - 8 Accounting for Research and Development

ThisStandardstandswithdrawnasAccountingStandard26-IntangibleAssetshasbecomemandatory.


ii) IncomeElectricitycharges 0.18 - Interest 0.19 0.80Repairs&Maintenance-Others 0.02 -

Notes on Accounts (Contd.)` inlakhs

46



` inlakhs

a

AS - 9 Revenue Recognition

IncomeandExpenditureareaccountedonagoingconcernbasis.b TheCompany’s incomeconsistsof income fromsaleofmanufactured

equipments, traded goods, after sales service, warranty management& repairservicesand income from InformationTechnology (IT) relatedconsultancyservices.

c SalesisaccountednetofExciseDuty,ServiceTaxandSalesTax/ValueAdded Tax.

d

a)Incomefromconsultancyservicesandannualmaintenancecontractsareconsideredonaccrualbasis.

b)Incomefromservicesisrecognisedafterrenderingservices.

c)IncomefromITsolutionsarerecogniseddependinguponthestageofcompletionoftheproject.

Saleofproducts,incomefromservicesandotherincomeincluderealisedexchange fluctuations on exports of `84.56lakhs(Previousyear`Nil).

e Interest income is recognised on a time proportion basis taking intoaccounttheamountofoutstandingandtherateapplicable.

f TheCompanyhasnotderivedanyincomeduringthecurrentyearoutofitsinvestments.

g Inrespectofdomesticsales,therecognitionisonthebasisofdeliveryofgoodstocustomerswhileinrespectofexportsalestherecognitionisonthebasisof“LETExport”certificationissuedbyCustomsAuthorities.AS - 10 Accounting for Fixed AssetsFixed Assets are stated at cost of acquisition or construction cost net of cenvat and includes expenditure incurred upto the date the asset is put touse,lessaccumulateddepreciation.Technicalknow-howfeespaidiscapitalisedunderPlantandMachinery.Temporaryconstructions /alterationcostsarechargedoff in thesameyear.Lease hold land represents ` 199.15 lakhs(Previous year `199.15 Lakhs) paid to State Industrial Promotion Corporation of Tamil NaduLimited (SIPCOT),Chennai for 6.16acresof land in theirOragadamSpecialEconomicZone(SEZ),TamilNadu forwhich the registrationofleasedeedwascompletedinJune2009.Theunithasbeenapprovedby the Development Commissioner, Madras Export Promotion Zone(MEPZ)inMarch2009.AS - 11 Accounting for effects in foreign exchange rates

a Purchase of imported raw materials, components, spare parts andcapitalgoodsareaccountedbasedonretirementmemosfrombanks.Inrespectofliabilitiesonimportofrawmaterials,components,sparepartsandcapitalgoodswhichareintransitandwhereinvoices/billsareyettobereceived,theliabilityisaccountedbasedonthemarketexchangerateprevailing on the date of the Balance Sheet.

Notes on Accounts (Contd.)

47



` inlakhs

Year end foreign currency denominated liabilities and receivablesare translated at exchange rates prevailing as at Balance Sheet date,the difference being charged/credited to respective revenue or capital account.Anydifferencebetweentheforwardrateandtheexchangerateon the date of inception of forward contract is recognised as discount or premiumovertheperiodofthecontract.Derivative transactions :

TheCompanyusesforwardexchangecontractstohedgeitsexposureinforeigncurrency:-a)Forwardexchangecontractsoutstandingasat31stMarch,2012

-Euro3,44,043equivalentto`

-JapaneseYen67,92,967equivalentto`

-USD10,73,239equivalentto`

182.55

43.71

543.05

99.32

22.82

95.06b) Foreign currency exposures not covered by Forward exchangecontracts as at 31stMarch,2012-Euro2,27,719equivalentto`

- Japanese Yen-Nil equivalent to `

-USD1,64,759equivalentto`

151.63

-

81.82

156.88

4.47

337.04

TheamendmentintroducedtoAS11byGovernmentofIndiaon31stMarch,2009 allowing the loss/profit on restatement of External CommercialBorrowingsmade for acquisition of capital assets to bededucted fromoraddedtocostofcapitalasset isnotapplicabletotheCompanyasithasnoExternalCommercialBorrowingsforacquisitionofcapitalassets.SimilarlyCompanyhasnotavailedExternalCommercialBorrowingsforpurposes other than acquisition of capital assets also.

AS - 12 Accounting for Government Grants

TheCompanyhasnotreceivedanyGovernmentgrantsduringthecurrentaccountingyear.

AS - 13 Accounting for Investments Investmentsarestatedatcost.Provisionfordiminutioninvalueismadeonly if such a decline is other than temporary in the opinion of theManagement.InvestmentinShriramGrowthFund(Fund),Chennai-viz.,71,050unitsarecarriedatparvalueof`1000/- per unit aggregating to ` 710.50lakhs.HowevertheFundhasdeclareditsNetAssetValueasat31st March 2012 at ` 943/-perunit.Thusthereisadiminutioninvaluetothe extent of ` 57/- per unit aggregating to ` 40.50lakhs.Thisdiminutionisnotprovided for in theaccountsas theManagementopines that theportfolio isrelativelyyounger in its investmenthorizonof4-5yearswithlifeoftheFundof7yearswithreturnscommencingfromyear4onwardsandhencethefallinvalueisonlytemporary.Thisopinionisbasedonthefactthatthefundreturnswillstarttorisesteeplyandgrowthfundwillmakepositive returns soon.

b

c


48



Theinvestmentworthof50,000equitysharesinvestedinTumkurPropertyHoldingsLimited,Chennaiaggregates to` 3.14 lakhsagainst cost of ` 5lakhs.Thediminutionamountsto` 1.86lakhs.This isalsonotprovidedforastheManagementhas longtermstrategytomakethiswhollyownedsubsidiaryprofitable.

AS - 14 Accounting for amalgamation

This Standard is not applicable to the Company for the year underreview.

AS - 15 Accounting for Retirement Benefits

AsperAccountingStandard15on“EmployeeBenefits”,thedisclosuresofEmployeebenefitsasdefined in theAccountingStandardaregivenbelow:

(a) Short term Employee Benefits Shorttermemployeebenefitspayablewithintwelvemonthsofrenderingthe service including accumulated leave encashment, at the BalanceSheetdate,arerecognisedasanexpenseaspertheCompany’sschemebasedonexpectedobligationsonundiscountedbasis.(b) Long term Employee Benefits

In case of long term compensated absences i.e. long term leaveencashment,thesameisprovidedforbasedonactuarialvaluationasattheBalanceSheetdate,usingtheProjectedUnitCreditMethod.Post retirementbenefits comprisingofemployeesProvidentFundandGratuityFundareaccountedforasfollows:(a)ProvidentFund:Thisisadefinedcontributionplanandcontributionspaid to the fund are charged to revenue during the period in which the employee renders the related service. The Company has nofurtherobligations for futureprovident fundbenefitsother than regularcontributions.(b)Gratuity:ThisisadefinedcontributionplanandtheCompany’sSchemeisadministeredbyTrusteesand fundsmanagedby theLife InsuranceCorporation of India(LIC).The liability forGratuity to employees as attheBalanceSheetdateisdeterminedbasedontheactuarialvaluationusingtheProjectedUnitCreditMethod.Thecontributionpaidthereofischargedinthebooksofaccounts.Disclosure as per AS15 revised – Defined benefit PlansPastServicebenefit 155.17 85.96 Present Value of the obligation as at the beginning of the year 85.96 80.67 Interest Cost 6.43 5.60 Current Service Cost 10.52 9.31 Benefits Paid (15.00) (17.44)


49



Acquisitions 60.76 - Planamendmentcost - 18.45 ActuarialGain/(Loss)onobligation 6.50 (10.64)Present Value of the obligation as at Balance Sheet date 155.17 85.96 Fair value of planned assets as at the beginning of the year 90.22 85.42 ExpectedReturnonplannedassets 8.33 7.84 Contributions 13.62 15.35 Benefits paid (15.00) (17.44)

Acquisitions 60.76 - ActuarialGain/(Loss)onplannedassets (0.30) (0.95)Fair value of planned assets as at Balance Sheet date 157.63 90.22 Amounts recognized in the Balance SheetPresentValueoftheobligationasatBalanceSheetdate 155.17 85.96Fair value of planned assets as at Balance Sheet date 157.63 90.22Fundedstatusoftheplan-(assets)/Liability (2.46) (4.26)Amounts recognized in the Statement of Profit and LossCurrent Service cost 10.52 9.31Interest cost 6.43 5.60ExpectedReturnonplannedassets (8.33) (7.84)Netactuarialgainorlossrecognizedintheyear 6.81 (9.69)ExpensesrecognizedinthestatementofProfitandLoss 15.43 15.83Principal actuarial assumptionsDiscount Rate 8.77% 8.20%Salaryescalation 5.00% 5.00%Expectedreturnonplannedassets 9.30% 9.30%AS - 16 Borrowing cost

Allborrowingcostsarechargedtorevenueexcepttotheextenttheyareattributabletoqualifyingassetswhicharecapitalised.Duringtheyearunder review therewasnoborrowingattributable toqualifyingassetsandhencenoborrowingcostwascapitalised.AS - 17 Segment reporting

SincethegroupofproductssoldandservicesrenderedbytheCompanypertains to InformationTechnology relatedproductsandservices, theoperationsoftheCompanyrelatetoasinglereportablesegment.


50


AS - 18 Related Party disclosure

Disclosure ismade as per the requirements of the Standard and asper theclarifications issuedby the InstituteofCharteredAccountantsof India.AS - 19 Leases

This Standard is not applicable as theCompany does not have anyfinanceleaseagreementinforce.AS - 20 - Earnings Per Share

Earningspershare(BasicandDiluted)hasbeencalculatedbydividingthenetprofit for theperiodattributable toequityshareholdersby theweightedaveragenumberofequitysharesoutstandingduringtheperiodanddisclosedonthefaceofstatementofProfitandLossinaccordancewith the Standard.Profit after tax 139.61 154.44 Weightednumberofequityshares-Nos. 1,76,72,818 1,76,72,818Nominalvalueoftheshares ` 10/- 10/-(i)Earningspershare-Basic 0.79 0.87

(ii)Earningspershare-Diluted 0.79 0.87 AS - 21 Consolidated Financial Statements

Consolidated Financial Statements of the Company and its WhollyownedSubsidiaries viz., Tumkur PropertyHoldings Limited, ChennaiandPrimePropertyHoldingsLimited,Chennaiareenclosed.AS - 22 Accounting for taxes on incomeProvisionforcurrenttaxismadeaftertakingintoconsiderationbenefitsadmissableundertheprovisionofIncomeTaxAct,1961.CurrenttaxiscalculatedasperprovisionofSection115JBviz.,MinimumAlternateTax.

Deferredtaxliabilityresultingfromtimingdifferencesbetweenbookandtaxableprofit is accounted for, using the tax rates in forceason theBalance Sheet date.AS - 23 Accounting for Investments in Associates in Consolidated Financial Statements

This Standard is not applicable to the Company for the year underreview.AS - 24 Discontinuing Operations

In respect of Contract Manufacturing Services business which wassold during2007, thedetails of liabilities carriedover in the financialstatementsarefurnishedbelow:



51


Liabilities in respect of discontinued operationsOpening Balance on 01.04.2011 20.46 38.98Less:Dischargedduringthecurrentyear - 18.52Closingbalanceason31.03.2012 20.46 20.46Noexpenditurehasbeenincurredduringthecurrentyearrelatingtotheabovediscontinuedbusiness.(Previousyear`0.91lakhs).AS - 25 Interim Financial Reporting

Quarterly financial results are published in accordance with therequirementofListingAgreementwithStockExchanges.Therecognitionandmeasurement principle as laid down in theStandard have beenfollowed in the preparation of these results.AS - 26 Intangible Assets

The Company owns Intellectual Property Rights & Business Rightsrelatingtoitsservicebusinessandthesameisamortisedoveraperiodoftenyears@9.5%perannum.

During the year, the Company has acquired from TVS-E ServicetecLimited, Chennai, its Customer Support Service Businessalongwith Assets and Liabilities on a going concern basis effective 1stOctober ,2011.Theassetsand liabilitiesof theacquiredbusinesshave been taken over at fair value and the difference between theconsideration and fair value of net assets acquired, aggregating to ` 3263LakhsrepresentsvalueofBusinessRights.AS - 27 Financial Reporting of Interest in Joint Ventures

ThisStandardisnotapplicabletotheCompany.AS - 28 Impairment of Assets

AsontheBalanceSheetdatethecarryingamountsoftheassetsnetof accumulateddepreciation isnot less than the recoverableamountofsuchassets.HencethereisnoimpairmentlossontheassetsoftheCompany.AS - 29 Provisions, Contingent Liabilities and Contingent Assets

Warranty cost on sale of products has been determined based onmanagement estimates/ historical data and provided for - ` 328.17 lakhs(PreviousYear-`275.44Lakhs).

ContingentliabilitiesaredisclosedinNoteno.5andContestedliabilitiesare disclosed in Note no.6AS - 30 Financial Instruments: Recognition and Measurement

ThisStandardisnotapplicablefortheyearunderreview.AS - 31 Financial Instruments: Presentation

ThisStandardisnotapplicablefortheyearunderreview.



52



AS - 32 Financial Instruments: Disclosures

ThisStandardisnotapplicablefortheyearunderreview.2 Previous year figures have been regrouped wherever necessary to

conformtocurrentyear’sclassification.3 Deposits include Depositswith(a)PostOfficeandTelephones 0.91 0.71 (b)SalesTax 2.83 72.24 4 Current Liabilities

Thereare2MicroandSmallEnterprises,withwhomtheCompanyhadtransactions.HoweverduestothemasatBalanceSheetdateis` NIL( Previous year` Nil). This information as required to be disclosedundertheMicro,SmallandMediumEnterprisesDevelopmentAct2006(MSMEDAct,2006),hasbeendetermined to theextentsuchpartieshave been identified on the basis of information available with theCompany.i)PrincipalamountduetosuppliersunderMSMEDAct,2006asat31stMarch,2012

- -

ii)InterestaccruedandduetosuppliersunderMSMEDAct,2006ontheaboveamountasat31stMarch,2012

- -

iii)Paymentmadetosuppliers(otherthaninterest)beyondtheappointedday,duringtheyear.

7.37 2.79

iv) Interest paid to suppliers under MSMED Act, 2006 (other thanSection16).

0.03 0.21

v)InterestpaidtosuppliersunderMSMEDAct,2006(Section16). - 0.61 vi) InterestdueandpayabletosuppliersunderMSMEDAct,2006forpaymentsalreadymade.

- -

vii) Interest accrued and remaining unpaid at the end of the year tosuppliersunderMSMEDAct,2006.

- -

5 Contingent liabilities and Commitments not provided fora Contingent Liabilities

ClaimsagainsttheCompanynotacknowledgedasdebt 49.22 127.50 Guarantees 229.30 296.74 Other money for which the company is contingently liableOnLettersofCreditopenedwithBanks 2,821.79 2,433.18CentralExciseDuty 45.62 45.62 CustomsDuty(IncludingSpecialAdditionalDutyof`41.26Lakhs) 339.06 339.06 Service Tax 2.78 2.78


53



b CommitmentsEstimated amount of contracts remaining to be executed on capitalaccount

11.21 2.70

CapitalcommitmentmadetoTVSShriramGrowthFund,Chennai - 1,050.006 Liability disputed not provided fora) Sales Tax 221.95 306.98 b) CentralExciseDuty 13.23 13.23 c) CustomsDuty(SpecialAdditionalDuty) 10.25 10.25 d) IncomeTax 478.09 1,522.24e) Service Tax 121.15 121.15 7 Payment to Auditors a) As Auditor 10.36 8.27 b) Fortaxationmatters 2.42 1.65 c) Forcompanylawmatters 0.28 - d) For other services 1.47 0.55 e) Reimbursementofexpenses 1.30 3.83

Total 15.83 14.30 8 Other expenses in excess of ` 1,00,000 or 1% of

Revenue from operations whichever is highera) Travelling&conveyance 326.78 269.58 b) Carriage outwards 397.44 273.53 c) Salescommission,discounts 1,115.10 1,187.72d) Othersellingexpensesincludingwarrantyexpenses 958.47 717.08 e) Managementservicefees 614.19 476.32 f) Software&dataprocessingcharges 351.61 154.72 9 Miscellaneous Income includes

BusinessAuxillaryServices/ManagementServices 62.16 103.81 TDS `6.28Lakhs(Previousyear-`8.85Lakhs)

10 Details of Revenue/Capital Expenditure incurred for "In House" R & D Unita) Revenue Expenditure incurred under the following heads of accountSalaries,Wages&Allowances 68.53 79.31 Travelling&Conveyance 8.39 6.89 ProductDevelopment 22.04 24.22 Tools&Accessories 0.04 0.64


54



StoresConsumables 0.11 0.30 Consultancy&Technology 9.32 16.12 ReliabilityTesting,FieldTests&Trials 6.45 8.28 MiscellaneousExpenses 1.76 0.94

116.64 136.70 b) Capital Expenditure

Addition to Fixed assets

OfficeEquipments 0.41 0.8311 Related Party Disclosures as per Accounting Standard - 18A) List of Related Parties as per Clause 3(a)

of the Standard where control existsReporting Entity

TVS Electronics Limited, Chennai Period

Holding CompaniesT.V.SundramIyengar&SonsLimited,Madurai (HoldingCompanyofSundaram-ClaytonLimited,Chennai)

01.04.2011 to 31.03.2012

Sundaram-ClaytonLimited,Chennai (HoldingCompanyofTVSInvestmentsLimited,Chennai)

01.04.2011 to 31.03.2012

TVSInvestmentsLimited,Chennai (HoldingCompanyofReportingEntity)

01.04.2011 to 31.03.2012

Wholly owned SubsidiariesTumkurPropertyHoldingsLimited,Chennai 01.04.2011 to 31.03.2012PrimePropertyHoldingsLimited,Chennai 01.04.2011 to 31.03.2012

B) Other Related Parties with whom transactions have been made during the year

Fellow SubsidiariesTVSMotorCompanyLimited,Chennai 01.04.2011 to 31.03.2012SundaramAutoComponentsLimited,Chennai 01.04.2011 to 31.03.2012TVSCapitalFundsLimited,Chennai-(SubsidiaryofTVSInvestmentsLimited,Chennai)

01.04.2011 to 31.03.2012

TVS-EAccessIndiaLimited,Chennai-(SubsidiaryofTVSInvestmentsLimited,Chennai)

01.04.2011 to 31.03.2012

TVS-EServicetecLimited,Chennai -(SubsidiaryofTVS InvestmentsLimited,Chennai)

01.04.2011 to 31.03.2012

SravanaaPropertiesLimited,Chennai-SubsidiaryofTVSInvestmentsLimited,Chennai)

01.04.2011 to 31.03.2012


55



C) Particulars of transactions with Related Parties(i) Purchases made

Holding CompanySundaram-ClaytonLimited,Chennai 32.97 212.35

(ii) Services availedHolding CompaniesT.V.SundramIyengar&SonsLimited,Madurai. - 0.06 Sundaram-ClaytonLimited,Chennai 7.26 14.83 TVSInvestmentsLimited,Chennai 487.03 494.96 Fellow SubsidiariesTVS-EServicetecLimited,Chennai 263.57 580.30 TVSCapitalFundsLimited,Chennai 1.23 0.71

(iii) Sale of Materials / Fixed AssetsFellow Subsidiary TVS-EServicetecLimited,Chennai 156.74 25.87 Holding CompaniesSundaram-ClaytonLimited,Chennai - 30.39 TVSInvestmentsLimited,Chennai - 0.04

(iv) Services renderedFellow SubsidiariesTVSMotorCompanyLimited,Chennai 49.03 0.47 TVS-EServicetecLimited,Chennai 220.60 128.61 TVSCapitalFundsLimited,Chennai 7.89 - Holding CompaniesSundaram-ClaytonLimited,Chennai 18.14 - TVSInvestmentsLimited,Chennai 8.03 31.58

(v) Rent paidFellow SubsidiarySravanaaPropertiesLimited,Chennai 2.70 2.85

(vi) Rent ReceivedHolding CompanySundaram-ClaytonLimited,Chennai - 3.31 Fellow Subsidiary TVS-EServicetecLimited,Chennai 1.09 -


56



Interest paid /payable on Inter Corporate Deposits received during the current yearFellow Subsidiary TVS-EServicetecLimited,Chennai 2.33 - Inter Corporate Deposits received and paid back by the Company during the current yearHolding CompanyTVSInvestmentsLimited,Chennai(Received` 435Lakhsandrepaid`235Lakhs)

200.00 -

(ix) Contribution to TVS Shriram Growth Fund, Chennai ( Investment)

Contributionduringtheyear 1,050.00 1,050.00Redemptionduringtheyear 89.50 -

(x) Amount outstanding as at Balance Sheet datea) Sundry DebtorsHolding CompaniesSundaram-Clayton Limited, Chennai (more than 6months -` 4.64 Lakhs)

5.06 0.58

Fellow SubsidiariesTVSMotorCompanyLimited,Chennai(morethan6months-` 0.18 Lakhs)

4.97 0.01

TVS-EAccessIndiaLimited,Chennai(morethan6months-` 28.00 Lakhs)

28.00 28.00

SundaramAutoComponentsLimited,Chennai - 0.12 TVSCapitalFundsLimited,Chennai(morethan6months-` Nil) 7.89 - TVS-EServicetecLimited,Chennai(morethan6months-` Nil) 172.45 78.39 Wholly owned SubsidiariesPrime Property Holdings Limited,Chennai - Due under 'ContractualObligation'.

330.00 330.00

PrimePropertyHoldingsLimited,Chennai-Dueunder'Loan'. 112.00 112.00 TumkurPropertyHoldingsLimited,Chennai - 0.17 b) Sundry CreditorsHolding CompaniesSundaram-ClaytonLimited,Chennai 3.61 4.49 TVSInvestmentsLimited,Chennai 65.89 73.56 Fellow Subsidiary

TVS-EServicetecLimited,Chennai 58.17 -


(vii)

(viii)

57

12 Information pursuant to the provisions of Part II of Schedule VI of the Companies Act, 1956(videnotificationdated30thOctober,1973ofDepartmentofCompanyAffairs,GovernmentofIndia) ` inlakhs

Particulars Year ended 31.03. 2012

Year ended 31.03. 2011

Quantity Value Quantity Value I

1

RAW MATERIALS & COMPONENTS CONSUMED

Raw Material & Intermediates & Components Consumedi)IntegratedCircuits(Nos)ii)MiscellaneousItems(whichdonotindividuallyaccountformorethan 10%ofthevalueoftheconsumption)

3,72,657 236.83 9,615.68

2,67,732 87.86 9,341.28

Total 9,852.51 9,429.14

Particulars % of total consumption Amount % of total

consumption Amount

2 Consumption of Raw Materials & Components

a)Importedb)Indigenous

45.20%54.80%

4,453.33 5,399.18

42.41%57.59%

3,998.905,430.24

Total 100.00% 9,852.51 100.00% 9,429.14

II Consumption of Machinery Spares

a)Importedb)Indigenous

48.80%51.20%

19.39 20.34

43.12%56.88%

18.95 25.00

Total 100.00% 39.73 100.00% 43.95

III Imports (CIF VALUE)

a)Rawmaterialsb)Spares,StoresandComponentsc)Capitalgoodsd)Tradedgoods

62.87

2,546.39 3.54

2,706.21

56.16 2,335.32

8.57 1,870.58

Total 5,319.01 4,270.63


58


IV OTHER EXPENDITURE IN FOREIGN CURRENCYSalaries 26.16 31.36 Staff Welfare 0.04 0.42 Rent 2.48 5.62 Rates&Taxes 0.36 5.09 Repairs&Maintenance 1.45 0.48Travel&Conveyance 14.94 10.43 Communicationexpenses 0.75 1.56 Other selling expenses 0.09 0.10 Consultancy,Legalfee&Retainers 0.81 1.57 Subscriptions - 0.04 Bankcharges 0.14 0.11 ResearchandDevelopment - 0.01 Sitting fees 0.03 - Stationary 0.12 -

QuantityNos. Quantity

Nos.

V SALE BY CLASS OF GOODS

(a)ComputerPeripherals 6,49,336 16,283.28 6,11,748 15,298.42

(b)IncomeonServicesrendered 1,718.19 189.27

(c)Service,Spares&others 3,913.44 2,652.67

21,914.91 18,140.36

VI EARNINGS IN FOREIGN EXCHANGE

Exports(onF.O.B.basis) 84.56 -

84.56 -



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45

Notes on Accounts (Contd.)` inlak

hs

60

Disclosure made in terms of Clause 32 of the Listing Agreement with Stock Exchanges(i) Disclosure in respect of Loans and Advances/Investments to Parent/Subsidiary/Associate companies during the year.

(II) Disclosure in respect of Loans and Advances /Investments by Parent/Subsidiary/Associate companies during the year.

Particulars Name of the Parent/Subsidiary/Associate Company

Amount Outstanding as on 31st

March, 2012

Maximum amount

due at any one time

of the year

Remarks

A.LOANS AND ADVANCES**

1. Loans and Advances in the nature ofLoansmadetoParentCompany

2.Loans and Advances in the nature ofLoansmadetoSubsidiary

3.LoansandLdvancesinthenatureofLoansmadetoAssociates

4.Loans and Advances in the nature ofloansmadetofirms/companiesinwhichtheDirectorsoftheCompanyareinterestedB.INVESTMENTS

1.InvestmentmadeinParentCompany

2.InvestmentsmadeinAssociateCompany

3.InvestmentsmadeinSubsidiaryCompany(including application money pendingallotment)

Tumkur Property Holdings Limited,Chennai


5.00

5.00

5.00

5.00

A.LOANS AND ADVANCES**

1. Loans and Advances in the nature ofLoansmadetoParentCompany

2.LoansandAdvancesinthenatureofLoansmadetoSubsidiary

3.LoansandAdvancesinthenatureofLoansmadetoAssociates


112.00

112.00

B.INVESTMENTS

1.InvestmentmadebyParentCompany

2.InvestmentsmadeinAssociateCompany

TVSInvestmentsLimited,Chennai 1,055.34 1,055.34

**TheaboveLoansaresubjecttorepaymentscheduleasagreedbetweentheCompanyanditsloaneeandarerepayablewithinsevenyearsandcarryinterestatagreedrateswhicharenotlessthanintereststipulatedinSection372AoftheCompaniesAct,1956.

InvestmentbytheloaneeinthesharesoftheParentCompanyandtheSubsidiaryCompanywhentheCompanyhasmadeaLoanorAdvanceinthenatureofloan-Nil

` InLakhs

Disclosure Statement

61

`inLakhs

A. CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) before Tax and exceptional items 161.19 150.96 Adjustmentfor:Depreciation 504.08 396.33 Employeestockoptionexpense (0.25) (6.07)Profit on sale of assets (4.46) (2.40)Lossonsaleofassets 54.77 9.90 Interest 627.76 577.51

1,181.90 975.27 Operating Profit before Working Capital changes 1,343.09 1,126.23Adjustmentfor:Inventories (423.87) 184.30 SundryDebtors (1,309.93) 1,046.43LoansandAdvances (391.06) 202.49 Currentliabilitiesandprovisions 1,186.64 (99.78)

(938.22) 1,333.44Cashgeneratedfromoperations 404.87 2,459.67Direct taxes paid net of provision (33.21) (13.00)Net cash from operating activities (A) 371.66 2,446.67

B. CASH FLOW FROM INVESTING ACTIVITIESFixed Assets (3,759.20) (29.88)CapitalWork-in-Progress (76.43) 3.15 SaleofInvestments 2,700.00 - NewInvestmentsmade (960.50) (1,050.00)Exceptionalitemsofexpenditure (20.61) (87.25)Sale of fixed assets 37.10 72.99 Net cash from / (used in ) investing activities (B) (2,079.64) (1,090.99)

C. CASH FLOW FROM FINANCING ACTIVITIESIssueofEquityShareCapital-ConvertibleWarrants 19.91 (RepaymentofLoans)/LoansReceived(Net) 2,110.32 (1,635.20)(Interestpaid)(Net) (627.76) (577.51)Dividend paid - - Corporate Dividend tax paid - - Net cash used in financing activities (C) 1,502.47 (2,212.71)

D. NET DECREASE IN CASH AND CASH EQUIVALENT (A+B+C) (205.51) (857.03)Opening Cash and Cash equivalents as at 01.04.2011 624.15 1,481.18Closing Cash and Cash equivalents as at 31.03.2012 418.64 624.15

Notes : 1Theabovestatementshavebeenpreparedinindirectmethod.2CashandcashequivalentrepresentsCashandBankbalances. 3 Interest paid net of receipts is treated as arising out of financing activities.4Previousyearfigureshavebeenregroupedwherevernecessarytoconformtocurrentyearsclassification.

GOPAL SRINIVASAN H.LAKSHMANAN For SUNDARAM & SRINIVASAN Chairman Director CharteredAccountants FirmRegistrationNo:004207S

Chennai N.YOGESHWARAN M BALASUBRAMANIYAM May3,2012 ChiefFinancialOfficer Partner MembershipNo:F7945

ForandonbehalfoftheBoard Asperourreportofevendateannexed

Cash Flow Statement

Year ended 31.03.2011


62

Statement under Section 212 of the Companies Act, 1956 relating to Subsidiaries

Particulars

Name of the SubsidiariesTumkurPropertyHoldingsLimited,

Chennai

PrimePropertyHoldingsLimited,

Chennai 1.FinancialyearoftheSubsidiaryendedon

2.SharesofSubsidiaryheldbytheCompanyon31.03.2012a.Numberandfacevalueofequity

b.Extentofholding

3.NetaggregateamountofProfit/(Loss)oftheSubsidiariesfortheabovefinancialyearoftheSubsidiariesnotdealtwithintheCompany’saccountssofarasitconcernsthemembersoftheholdingCompany

a.ForthefinancialyearoftheSubsidiaries-Profit/(Loss)

b.For the previous financial years since they became Subsidiaries -Profit/(Loss)

4.NetaggregateamountofProfit/(Loss)oftheSubsidiariesfortheabove financialyearof theSubsidiaries dealtwith in theCompany’saccountssofarasitconcernsthemembersoftheholdingCompany

a.ForthefinancialyearoftheSubsidiaries-Profit/(Loss)

b.For the previous financial years since they becameSubsidiaries. -Profit/(Loss)

5.ChangeofinterestoftheCompanyintheSubsidiariesbetweentheendofthefinancialyearoftheSubsidiariesandthefinancialyearoftheCompany.

6. Material changes between the end of the financial year of theSubsidiariesandtheendofthefinancialyearoftheCompanyi)FixedAssetsii)Investmentsiii)MoneyLentiv)Borrowingsotherthanformeetingcurrentliabilities

31stMarch,2012

50,000equitysharesof`10/-eachfullypaidup

100%

Amountin`

(57,791)

(1,28,185)

Nil

Nil

NotApplicable

NotApplicable

31stMarch,2012

50,000equitysharesof`10/-eachfullypaidup

100%

Amountin`

(8,23,079)

3,05,10,318

Nil

Nil

NotApplicable

NotApplicable

ForandonbehalfoftheBoard

Statement relating to Subsidiaries

GOPAL SRINIVASAN H.LAKSHMANAN Chairman Director Chennai N.YOGESHWARANMay3,2012 ChiefFinancialOfficer

We have audited the attached Consolidated Balance Sheet of M/s. TVS Electronics Limited, “JayalakshmiEstates, 29, Haddows Road, Chennai - 600 006and its two subsidiaries namely i) Prime PropertyHoldingsLimited,Chennaiii)TumkurPropertyHoldingsLimited,Chennaiasat31stMarch,2012andalsotherelated Statement of Profit and Loss and the CashFlow Statement for the year ended on that date.These financial statements are the responsibility ofthe Company’s management. Our responsibility is toexpressanopiniononthesefinancialstatementsbasedonouraudit.Wedidnotauditthefinancialstatementsofthesaidsubsidiarycompaniesfortheyearended31st March2012.ThesestatementswereauditedbyotherfirmofCharteredAccountantswhose reporthasbeenfurnishedtous,andouropinion,sofarasitrelatestothese companies is based solely on the report of theother auditior.

We conducted our audit in accordance with the auditing standardsgenerally accepted in India.Thesestandards require thatwe plan and perform the auditto obtain reasonable assurance about whether thefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements. An audit also includes assessing theaccounting principles used and significant estimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethat

ourauditprovidesareasonablebasisforouropinion.

We report that theConsolidatedFinancialStatementshave been prepared by the Company in accordancewith the requirements of Accounting Standard 21 “Consolidated Financial Statements” issued by theInstituteofCharteredAccountantsofIndia,onthebasisoftheindividualfinancialstatementsofTVSElectronicsLimited, Chennai and its 100% subsidiaries - PrimeProperty Holdings Limited, Chennai and TumkurPropertyHoldingsLimited,Chennai.

Inouropinion,andbasedonouraudit,theConsolidatedFinancialStatementsreferredtoabovegiveatrueandfair view of the financial position of TVS ElectronicsLimitedanditssubsidiariesasat31st March 2012 and of the results of their operations and their cash flows fortheyearendedonthatdate, inconformitywiththeaccountingprinciplesgenerallyacceptedinIndia.



Chennai M BALASUBRAMANIYAM May3,2012 Partner

MembershipNo.F7945

AUDITORS REPORT ON CONSOLIDATED ACCOUNTS

Consolidated Financial Statements

63

64

Consolidated Balance Sheet as at 31st March, 2012

65

Consolidated Statement of Profit and Loss for the year ended 31st March, 2012

66

Note no. 1 - Share Capital

Particulars As at 31.03.2012 As at 31.03.2011

Number ìnlakhs Number ìnlakhsAuthorised

EquitySharesofparvalueof`10/- each

Issued

EquitySharesofparvalueof`10/- each

Subscribed & Paid up

1,76,72,818EquitySharesof`10eachfullypaid

2,50,00,000

1,76,72,818

1,76,72,818

2,500.00

1,767.28

1,767.28

2,50,00,000

1,76,72,818

1,76,72,818

2,500.00

1,767.28

1,767.28Total 1,76,72,818 1,767.28 1,76,72,818 1,767.28

ParticularsEquityShares

Number ìnlakhsShares outstanding at the beginningoftheyear 1,76,72,818 1,767.28

SharesIssuedduringtheyear - - Sharesboughtbackduringtheyear

- -

Shares outstanding at the end oftheyear

1,76,72,818 1,767.28

Right and preferences attached to equity share:

(i) Everyshareholderisentitledtosuchrightsastoattendthemeetingoftheshareholders,toreceivedividendsdistributedandalsohasarightintheresidualinterestofthecompany.Everyshareholderisalsoentitledtoright of inspection of documents as provided in theCompaniesAct,1956.

(ii) There are no restrictions attached to the equityshares.

Money received against share warrants: This is inrespectof3,50,000warrants.Theholderofthewarrantshas the option to exercise the right to be allotted equalnumberofEquitysharesofparvalueof`10/- each at a premiumof`12.75perequityshare.Theaggregatepriceof warrants is `79.62 Lakhs. As per terms of allotment25%istobepaidimmediatelyonallotment.Thusasumof`19.91Lakhsisreceivedon3rdOctober,2011viz.,thedateofallotment.Eachwarrantcarriesanoptionforconversioninto equity. The option can be exercised in respect ofany number of warrants. The conversion option is to

be exercised before 2ndApril, 2013. In case thewarrantholderdoesnotexercise theoptionbefore thesaiddatethe option to that extent not exercised shall lapse and the consideration paid in respect of such warrants shall beforfeited.Pendingallotmentofequitysharesthewarrantsdo not bear any interest. The equity shares allotted onexerciseofoptionshallrankparipassuinallrespectswiththethenexistingfullypaidupequityshares.Thewarrantsallottedandequitysharesallottedpursuanttotheexerciseofoptionshallbelocked-inforaperiodofoneyearfromthedateoftheirallotment.

Particulars of shares held by the Holding Company

OutofequitysharesissuedbytheCompany,sharesheldbytheHoldingCompanyareasbelow:

Name of the HoldingCompany

No. of Shares held

As at 31.03.2012

As at 31.03.2011

TVSInvestmentsLimited,Chennai 1,05,53,449 1,05,53,449

Details of shareholders holding more than five percentshares

NameofShareholder

As at 31.03.2012

As at 31.03.2011

No. of Shares held

No. of Shares held

TVSInvestmentsLimited,Chennai

1,05,53,449 1,05,53,449

Notes to Consolidated Balance Sheet

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period

67

Notes to Consolidated Balance Sheet (Contd.)

68


69


70

Fixe

d A

sset

s

Gro

ss B

lock

Acc

umul

ated

Dep

reci

atio

nN

et B

lock

Balan

ce

as a

t 01

.04.20

11

Addit

ions

/(Disposals

)

Acqui

red

throug

hbusi

ness

combin

ations

Balan

ce

as at

31

.03.20

12

Balan

ce

as at

01

.04.20

11

Depr

eciat

ion

char

ge fo

r the

year

With

draw

n on

disp

osals

Balan

ce as

at

31.03

.2012

Balan

ce

as at

31

.03.20

12

Balan

ce as

at

01.04

.2011

ìnlakhs

ìnlakhs

ìnlakhs

ìn

lakhs

ìnlakhs

ìnlak

hs ìnlakhs

` inlak

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hsìnlak

hsa

Tang

ible

Ass

ets

Land

335.2

2 -

-

33

5.22

-

-

-

-

335

.22

335.2

2 La

nd T

otal

335.2

2 -

-

33

5.22

-

-

-

-

335

.22

335.2

2 Bu

ilding

sinclud

ingim

provem

ents

897.7

1 (237.16

) 30

.61

691.1

6 58

4.19

32.21

23

6.50

379.9

0 3

11.2

6 31

3.52

Bui

ldin

gs T

otal

897.7

1 (237.16

) 30

.61

691.1

6 58

4.19

32.21

23

6.50

379.9

0 3

11.2

6 31

3.52

PlantandEquipm

ent

4,072.5

8(22.7

1)(928.91

) 29

5.44 -

3,461.8

23,254.2

0 14

3.43

856.1

3 2,541.5

0 9

20.3

2 81

8.38

Plan

t and

Equ

ipm

ent T

otal

4,072.5

8(906.20

) 29

5.44

3,461.8

23,254.2

0 14

3.43

856.1

3 2,541.5

0 9

20.3

2 81

8.38

Furn

iture

and F

ixtur

es 18

9.43

0.50

(13.9

4) 24

.39 -

200.3

8 -

115.6

5 10

.47

9.82

11

6.30

84.

08

73.78

Furn

iture

and

Fix

ture

s To

tal

189.4

3 (13.4

4) 24

.39

200.3

8 11

5.65

10.47

9.

82

116.3

0 8

4.08

73

.78

Vehic

les 41

.77

0.52

(12.3

4) -

29

.95

39.29

1.

82

11.86

29

.25

0.7

0 2.

48

Vehi

cles

Tot

al 41

.77

(11.82

) -

29

.95

39.29

1.

82

11.86

29

.25

0.7

0 2.

48

Officee

quipm

ent

1,487.9

4 22

.21

(20.1

8) 32

.97

1,522.9

41,395.0

5 48

.28

10.80

1,432.5

3 9

0.41

92

.89

Offi

ce e

quip

men

t Tot

al1,487.9

4 2.

03

32.97

1,522.9

41,395.0

5 48

.28

10.80

1,432.5

3 9

0.41

92

.89

Othe

rs: Ta

ngib

le A

sset

s Ad

ditio

ns T

otal

T

angi

ble A

sset

s Di

spos

als

Tota

l

-

-

45.94

(1,21

2.53)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Tot

al

7,024.6

5(1,16

6.59)

383.4

1 6,241.4

75,388.3

8 23

6.21

1,125.1

14,499.4

8 1

,741

.99

1,636.2

7b

Inta

ngib

le A

sset

sCo

mpute

rsoftwa

re -

-

66

.94

66.94

-

36

.88

-

36.88

3

0.06

-

C

ompu

ter s

oftw

are

Tota

l -

-

66

.94

66.94

-

36

.88

-

36.88

3

0.06

-

Intellectua

lPropertyRigh

tsBu

sines

s Righ

ts 80

0.00

-

3,262.9

1 80

0.00

3,262.9

1 63

9.67 -

76

.00

154.9

9 -

-

71

5.67

154.9

9 8

4.33

3

,107

.92

160.3

3 -

Inte

llect

ual P

rope

rty

and

Bus

ines

s R

ight

s To

tal

800.0

0 -

3,262.9

14,062.9

1 63

9.67

230.9

9 -

87

0.66

3,1

92.2

5 16

0.33

Tot

al

800.0

0 -

3,329.8

54,129.8

5 63

9.67

267.8

7 -

90

7.54

3,2

22.3

1 16

0.33

cC

apita

l Wor

k In

Pro

gres

sBu

ilding

sPlant&

Equipm

ent

4.73

71

.70

-

-

4.73

71

.70

-

-

-

-

-

-

-

-

4.7

3 7

1.70

-

-

T

otal

-

76

.43

-

76.43

-

-

-

-

7

6.43

-

G

rand

Tot

al

7,8

24.6

5 (1

,090

.16)

3,7

13.2

6 1

0,44

7.75

6

,028

.05

504

.08

1,1

25.1

1 5

,407

.02

5,0

40.7

3 1

,796

.60

Not

e N

o.9

- Non

-Cur

rent

Ass

ets

- Fix

ed A

sset

s


` inlak

hs

71

Details of Other Investments - Non trade

Sl.No.

NameoftheBodyCorporate

Subsidiary

/ Associate

/ JV/

Controlled

Entity/

Others

No. of Shares / Units

Quoted/Unquoted

PartlyPaid/Fullypaid

Extentof Holding(%)

Amount(`)inLakhs

"Whether stated at

Cost Yes / No"

"If Answer toColumn(9)is'No'-

Basis of Valuation"

2012 2011 2012 2011 2012 2011

(a) Investement in Equity Instruments

Modular Infotech Private Limited,Pune

Others 907,255 907,255 Unquoted Fullypaid 90.73 90.73 Yes

90.73 90.73

(b) Other investments

Capital contributiontoTVSShriramGrowthFund,Chennai

Others 71,050 245,000 Unquoted Fullypaid 710.50 2,450.00 Yes -

Pro-rata share in the profit of the erstwhile associate company

0.09 0.09

Total 710.59 2,450.09


72

Note No. 10 - Non-Current Investments (At Cost)Notes to Consolidated Balance Sheet (Contd.)

73


74

Note no. 13 - Trade ReceivablesNotes to Consolidated Statement of Profit and Loss

75

Note:16 - REVENUE FROM OPERATIONSNotes to Consolidated Statement of Profit and Loss (Contd.)

76

`inLakhs

A. CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) before Tax and exceptional items 153.13 146.12 Adjustmentfor:Depreciation 504.08 396.33 Employeestockoptionexpense (0.25) (6.07)Profit on sale of assets (4.46) (2.40)Lossonsaleofassets 54.77 9.90 Interest 627.76 577.50

1,181.90 975.26 Operating Profit before Working Capital changes 1,335.03 1,121.38Adjustmentfor:Inventories (423.87) 184.30 SundryDebtors (1,310.10) 1,046.43LoansandAdvances (384.18) (3.79)Currentliabilitiesandprovisions 1,191.74 (240.13)PreliminaryExpenses - 0.81

(926.41) 987.62 Cashgeneratedfromoperations 408.62 2,109.00Direct taxes paid net of provision (33.96) (13.63)Net cash from operating activities (A) 374.66 2,095.37

B. CASH FLOW FROM INVESTING ACTIVITIESFixed Assets (3,759.20) (29.88)CapitalWork-in-Progress (76.43) 3.15 SaleofInvestments 2,700.00 - NewInvestmentsmade (960.50) (1,050.00)Exceptionalitemsofexpenditure (20.61) (87.25)Sale of fixed assets 37.10 72.99 Net cash from / (used in ) investing activities (B) (2,079.64) (1,090.99)

C. CASH FLOW FROM FINANCING ACTIVITIESIssueofEquityShareCapital-ConvertibleWarrants 19.91 (RepaymentofLoans)/LoansReceived(Net) 2,110.32 (1,635.20)(Interestpaid)(Net) (627.76) (577.50)Dividend paid - - Corporate Dividend tax paid - - Net cash used in financing activities (C) 1,502.47 (2,212.70)

D. NET DECREASE IN CASH AND CASH EQUIVALENT (A+B+C) (202.51) (1,208.32)Opening Cash and Cash equivalents as at 01.04.2011 780.85 1,989.17Closing Cash and Cash equivalents as at 31.03.2012 578.34 780.85

Notes:1Theabovestatementshavebeenpreparedinindirectmethod.2CashandcashequivalentrepresentsCashandBankbalances. 3. Interest paid net ofreceiptsistreatedasarisingoutoffinancingactivities.4.Previousyearfigureshavebeenregroupedwherevernecessarytoconformtocurrentyearsclassification.

GOPAL SRINIVASAN H.LAKSHMANAN For SUNDARAM & SRINIVASAN Chairman Director CharteredAccountants FirmRegistrationNo:004207S

Chennai N.YOGESHWARAN M BALASUBRAMANIYAM May3,2012 ChiefFinancialOfficer Partner

MembershipNo:F7945

ForandonbehalfoftheBoard Asperourreportofevendateannexed



Consolidated Cash Flow Statement

77

B. Details of subsidiary companies considered in the consolidated accounts:

Nameofthesubsidiary CountryofIncorporation Shareholding as on ExtentofHolding

(%)Direct

PrimePropertyHoldingsLimited,Chennai India 31.03.2012 100%

TumkurPropertyHoldingsLimited,Chennai India 31.03.2012 100%

A. Principles of Consolidation

The consolidated accounts relate to TVS ElectronicsLimited, Chennai (Parent Company) and 100%subsidiaries-PrimePropertyHoldingsLimited,ChennaiandTumkurPropertyHoldingsLimited,ChennaihavebeenpreparedinaccordancewithAccountingStandard21 “ConsolidatedFinancialStatements” issuedby theInstitute of Chartered Accountants of India.

Theconsolidatedaccountshavebeenpreparedbasedonlinebylineconsolidationbyaddingtogetherthebook

values of like items of assets, liabilities, income andexpensesasper theaccountsof theparentcompanyanditssubsidiarycompany(dulycertifiedbyitsauditor)andIntraGroupbalances/IntraGrouptransactionshavebeeneliminated.

Theconsolidatedaccountshavebeenpreparedusinguniform accounting policies for like transactions andothereventsinsimilarcircumstancesandarepresentedtotheextentpossible,inthesamemannerastheparentcompany’sindividualaccounts.

C. Other significant accounting policies:

AccountingStandards1to32(totheextentapplicable)issuedbytheInstituteofCharteredAccountantsofIndiahavebeendulyconsideredwhilepreparingtheaccountsofbothholdingandsubsidiarycompanyandthesamehavebeenexplainedindetailinthenotesonaccountsof the respectivecompanieswhichmaybe referred to.

Notes to Accounts annexed to respective financial statements form part of the Consolidated financialstatements.

D. Previous year figures have been regrouped wherever necessary to confirm to current year’s classification.

22. Accounting Policies adopted in the preparation of Consolidated Accounts

78

TheMinistryofCorporateAffairs,GovernmentofIndia,vide general circular No.2 and 3 dated 8th February,2011 and 21stFebruary,2011respectivelyhasgrantedageneralexemptionfromcompliancewithSection212oftheCompaniesAct,1956,subjecttofulfillmentofcertain

conditions stipulated in the circular. The Companyhas satisfied the conditions stipulated in the circular includingthedisclosureofinformationofSubsidiariesintheconsolidatedfinancialstatementsoftheCompany.

$ReservesandSurplusisnetofdebitbalanceinProfitandLossAccount

*TotalLiabilitiesincludesCurrentLiabilites&Provisions

+TotalAssetsincludesNetFixedAssets,CurrentAssetsandMiscellaneousExpenditure

#Financialresultsfortheyear2011havebeenregrouped/reclassifiedwherevernecessaryaspertherequirements of revised Schedule VI.

DISCLOSURE OF INFORMATION RELATING TO SUBSIDIARIES

ParticularsPrime Property Holdings Limited Tumkur Property Holdings Limited





1.ShareCapital-Equity 5.00 5.00 5.00 5.00 2. Reserves and Surplus $ 296.87 305.10 (1.86) (1.28)3.TotalLiabilities* 613.16 608.05 0.17 0.33 4.TotalAssets+ 915.03 918.15 3.31 4.05 5.Investments - - - - 6.GrossIncome 7.73 8.28 - - 7.Profit/(Loss)beforeTax# (7.48) (4.26) (0.58) (0.58)8.Provisionfortaxation-Current# (0.75) (0.63) - - 9.Profit/(Loss)aftertax# (8.23) (4.89) (0.58) (0.58)10. Divident/Proposed Dividend including dividend tax

- - - -

` inlakhs

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