Sundaram Clayton : Annual reports of subsidiaries 2022-2023

SUNDARAM-CLAYTON LIMITED

Annual Report of Subsidiary Companies for the year 2022-2023

Contents

Indian Subsidiaries

1. TVS Motor Company Limited
2. Sundaram - Clayton DCD Limited
3. Sundaram Auto Components Limited
4. TVS Housing Limited
5. TVS Motor Services Limited
6. TVS Electric Mobility Limited
7. TVS Credit Services Limited
8. Harita ARC Private Limited
9. TVS Housing Finance Private Limited
10. Harita Two-wheeler Mall Private Limited

Overseas Subsidiaries

1. Sundaram Holding USA Inc
2. Sundaram-Clayton(USA) Limited
3. TVS Motor (Singapore) Pte. Limited
4. The Norton Motorcycle Co Limited
5. Swiss E-Mobility Group (Holding) AG
6. The GO Corporation
7. TVS Digital Pte. Limited
8. Celerity Motor GmbH, Germany
9. EBCO Limited, UK
10. PT TVS Motor Company Indonesia
11. TVS Motor Company (Europe) B.V.,

TVS MOTOR COMPANY LIMITED

Board of Directors	PROF. SIR RALF DIETER SPETH
	Chairman
	VENU SRINIVASAN
	Chairman Emeritus & Managing Director
	SUDARSHAN VENU
	Managing Director
	K.N. RADHAKRISHNAN
	Director & CEO
	C. R. DUA
	R. GOPALAN
	LALITA D. GUPTE
	T. KANNAN *
	KUOK MENG XIONG
	HEMANT KRISHAN SINGH
	B SRIRAM
	DR. LAKSHMI VENU
Audit Committee	R. GOPALAN, Chairman
	C. R. DUA
	T. KANNAN *
Nomination and	C.R. DUA, Chairman
Remuneration	T. KANNAN *
Committee	KUOK MENG XIONG
	LALITA D. GUPTE [Effective 25.05.2023]
Risk Management	T. KANNAN *
Committee	SUDARSHAN VENU
	K.N. RADHAKRISHNAN
	LALITA D. GUPTE
	HEMANT KRISHAN SINGH
	K. GOPALA DESIKAN
Stakeholders'	HEMANT KRISHAN SINGH, Chairman
Relationship	VENU SRINIVASAN
Committee	SUDARSHAN VENU
	C.R. DUA
	LALITA D. GUPTE
Corporate	VENU SRINIVASAN, Chairman
Social Responsibility	T. KANNAN *
Committee	R. GOPALAN
Chief Financial	K. GOPALA DESIKAN
Officer
Company Secretary	K.S. SRINIVASAN
Statutory Auditors	V. SANKAR AIYAR & Co.,
	Chartered Accountants,
	2-C, Court Chambers,
	35 New Marine Lines, Mumbai - 400 020.
	Tel. : [phone]
	E-mail : [e-mail]
Cost Auditor	A.N. RAMAN
	Cost Accountant,
	No. 10 P, Muthukumaraswami Salai,
	Off. Baby Nagar 1st Main Road,
	Velachery, Chennai - 600 042.
	Tel. [phone]
	E-mail : [e-mail]

• Demise on 23.05.2023

Secretarial Auditors S. KRISHNAMURTHY & CO., Company Secretaries,

No. 16, Pattammal Street, Mandaveli, Chennai - 600 028. Tel. : [phone]

E-mail : [e-mail]

Shares listed with BSE Ltd., Mumbai.

National Stock Exchange of India Ltd., Mumbai.

Bankers

STATE BANK OF INDIA

Corporate Accounts Group Branch, Chennai.

Registered Office

"Chaitanya" No. 12, Khader Nawaz Khan Road, Nungambakkam, Chennai 600 006, Tamil Nadu, India Tel : [phone] Fax : [phone]

CIN No. L35921TN1992PLC022845 E-mail:[e-mail] Website: www.tvsmotor.com

Share Transfer Agent

Integrated Registry Management Services Private Limited 2nd Floor, Kences Towers, No. 1, Ramakrishna Street, North Usman Road, T Nagar, Chennai-600 017

Tel: [phone]; Fax: [phone]

Email:[e-mail], [e-mail]

Plant Locations

1. Post Box No. 4, Harita, Hosur - 635 109, Tamil Nadu, India. Tel : 04344 - 276780
2. Post Box No. 1, Byathahalli Village,
   Kadakola Post, Mysuru - 571 311, Karnataka, India. Tel : 0821 - 2596561
3. Bhatian Village, Bharatgarh Road, Teh. Nalagarh, Solan District - 174 101, Himachal Pradesh, India. Tel : 01795 - 220492/93

Subsidiary Companies

Sundaram Auto Components Limited TVS Housing Limited

TVS Motor Services Limited

TVS Credit Services Limited

TVS Electric Mobility Limited

TVS Motor (Singapore) Pte. Limited, Singapore The Norton Motorcycle Co Limited, United Kingdom TVS Motor Company (Europe) B.V., Amsterdam PT TVS Motor ddCompany Indonesia, Jakarta Swiss E-Mobility Group (Holding) AG, Switzerland The GO Corporation, Switzerland

TVS Digital Pte. Ltd, Singapore

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TVS MOTOR COMPANY LIMITED DIRECTORS' REPORT TO THE SHAREHOLDERS

The Directors have the pleasure in presenting the 31st annual report and the audited accounts of the Company for the year ended 31st March 2023.

1. COMPANY PERFORMANCE

Key Performance Snapshot

The Company registered sales of 35.13 lakh units of two- wheelers in 2022-23. The Company, in-spite of headwinds, registered an all-time high turnover of $ 26,378 Cr and an all-time high profit before tax of $ 2,003 Cr.

Macro Overview: Indian economy outperforms global peers in Fiscal 2023

India was open for business throughout FY 23, this stability, was a welcome respite from the lockdown led disruptions of the previous 2 years. The remarkable and unprecedented rapid mass vaccination drive undertaken by the Government made this possible. India experienced a revival with improvement in markers of labour participation, income, consumption, savings and gross fixed capital formation.

The global geo-political strife, persisted unresolved. This led to global supply chain challenges, semiconductor shortages, commodity inflation. Advanced global economies also tightened their monetary policies with consequent cascade impacts on global markets especially on the economies of emerging and low income countries.

The growth trajectory of the Indian Economy has been better than global peers. This has been made possible by an active and prudent policy management by the government and also the inherent fundamentals of the Indian economy. The diverse growth drivers provided much needed stability in a globally volatile economic environment.

India recovery continued to demonstrate its strong economic fundamentals, a growing and young population, a skilled educated cost competitive workforce, access to vast natural resources, a consistent political leadership. Further, the low but rising penetration of discretionary consumption, increasing digitization, and a new wave entrepreneurship aided by the improved ease of doing business are also providing renewed impetus for growth.

Government has made significant push towards building infrastructure leading to $ 7.28 Lakh Cr public capital expenditure in FY 23 and has followed that up with the highest ever outlay for public capital expenditure at $ 10 Lakh Cr earmarked for FY24. This consistent infrastructure build will vitalize the economy in the short term and improve quality of life in the mid to long term.

The Service sector growth was robust in fiscal 2023 and offset the moderation in manufacturing sector. Despite external pressures, India's service exports have continued to increase. The agricultural sector grew by 3.5%, and also strengthened the Company's position as a net exporter of agricultural products.

In fiscal 2023, the overall growth of rural was slower than urban due to relatively slower recovery in the rural non- agricultural sector.

RBI has been actively intervening to contain rising inflation which showed signs of moderation by the end of the fiscal. The inflation was driven by core and food inflation which adversely impacted the low income consumers however, there was buoyant private consumption, particularly among higher income earners.

As India emerges as the most populous nation in the world, a milestone it will cross in mid FY 24, it also retains its position as the fastest growing global economy. The large demand base, strong infrastructure buildout, robust fundamentals, diversified strength across manufacturing, services, agricultural and export sectors are poised for continued sustenance of India growth story ahead of all global peers.

Mobility Industry Performance - India overview

In a vital step towards e-governance, VAHAN 4.0 portal, records registrations of all automotive vehicles barring 1 state in India. This flagship project of the National Transport project, has become a reliable indicator of automotive retail trends. Andhra Pradesh & Madhya Pradesh states registration details started flowing in from Q2 of 2022-23. 16.1% two-wheeler industry retail growth in 2022-23 was recorded on VAHAN. (excluding Andhra Pradesh, Madhya Pradesh & Telangana).

The VAHAN retail industry growth trends across quarters, over comparable periods year on year saw sharp changes, Q1 2022-23 growth of 54.5% was driven primarily by the low Q1 2021-22 base, Q2 decline of 3.7%, however there was a positive inflation, as Q3 and Q4 2022-23 grew by 13.5% and 10.7% respectively.

The two-wheeler Industry wholesale stood at 15.5 million units compared to 13.4 million units in last fiscal. While this reflects a growth of 15.5%, it should also been in the context that this is still less than the 8 years ago level of 16 million units in 2014-15 and a long way off from Industry high of

21.2 million in 2018-19. This juxtaposition reflects both the healthy growth momentum and the ample headroom for future growth.

Compared to the Industry growth of 15.5%, the Company recorded a growth of 22.8%.

Mobility Industry Performance - International Business overview

In the International Business, Industry exports of two-wheelers in 2022-23 were at 3.65 million units, a decline of 18% over 2021-22. The Company out performed the industry, however declined by 16%. The industry was affected by liquidity crunch, currency devaluations and country specific local socio- political and economic disturbances.

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TVS MOTOR COMPANY LIMITED

In terms of movement across the quarters, the year began with Q1 2022-23 showing small positive growth which progressively weakened each quarter, as more of the headwinds across geographies mounted. This led to lowered exports to these markets. We are circumspect yet optimistic that while its taking longer than expected, but by the second half of the forthcoming fiscal the industry will find its way back to a growth trajectory.

The Company's two wheeler exports stood at 0.91 million units down from 1.09 million in the previous year. Three- wheeler exports during the year reached 1.53 lakh units, a decline of 6.1% compared to 2021-22.

Mobility Industry Performance - Electric Vehicles (EV) Overview

The two wheeler EV retail Industry on VAHAN reached 7.18 lakh units FY 2023-24 up from 2.3 lakh units of FY 2022- 23 that is a 3x growth over last year. The penetration of EV two wheelers for the year stood at 4.7%, with exit of 5.4% for Q4 2022-23.

The consumer demand remained overwhelmingly in favour of the scooter format.

In course of the year, there was a consistent policy and regulatory interventions to ensure standardized quality and enhanced safety levels for the consumers. This also led to the formalization of the industry, and the result product mix moved from low quality, low cost options in favour of the offerings meeting quality and safety requirements.

The accelerated pace of EV adoption as witnessed by the 3x growth in industry volumes have been driven by the support extended in form of FAME II and PLI support from the Central Government. In addition, state specific support policies have also been rolled out by the State Governments. The vision of accelerated EV adoption is being driven by the government and the Company is responding with investments in technology and building capacity to help realize this vision.

The Company retailed 0.91 lakh units vehicles for the year with a ~10x growth. In Q4 2022-23 approximately 1 in 5 EV two wheelers retailed was a TVS iQUBE. The Company increased its geographical presence to 130 towns, while its ICE distribution network covers 600+ towns. The phased expansion is to ensure that the Company's customer receives the intended usage experience. In this year, through a series of ecosystem partnerships the public charging network available to TVS iQUBE owners now exceeds 2000.

In a short time, the Company has cumulative of over 1 lac delighted customers.

New Product Launches

The Company's new product launches have been well received by consumers, experts and trade.

In July '22, the Company launched TVS Ronin in a segment of its own to cater to the #unscripted new-age rider. It's a

225cc lifestyle motorcycle which refuses to be typecast in any segment.

The Company clocked a global sales milestone of 5 million units for the TVS Apache.

In the year 2022, TVS Apache RTR 160 and RTR 180 were updated with striking style elements and attractive graphics that are in line with its racing DNA.

TVS Racing went beyond the racetrack and right into the virtual gaming world with the introduction of the Apache RR 310 in Gameloft's Asphalt 8: Airborne. Gamers and racing enthusiasts will get to virtually ride the Apache RR 310, making it the first Indian two-wheeler company to bring its motorcycle to a popular gaming franchise.

TVS Jupiter, clocked the Fastest Five Million milestone for the TVS Jupiter series.

A new refresh was also launched as the new TVS Jupiter Classic. TVS Jupiter was consistently one of the top 10 selling two wheelers in India.

TVS NTORQ 125 XT was launched with TFT screen coupled with its SmartXonnect connectivity platform including new age features like VOICE ASSIST. This has created a new benchmark first-in-class features for its connected GenZ customers.

The Company built upon its TVS RAIDER franchise with the new TVS RAIDER SMARTXONNECT with TFT CLUSTER. This was a truly WICKED UPDATE, and line with its new age consumers, this became the first two wheeler in the world to be launched in the metaverse, on TVS Motor's proprietary metaverse platform, TVS Motoverse. In the second half of the year TVS Raider has broken into the TOP 10 selling two wheeler in India.

TVS XL 100 retained it place amongst the top 10 selling two wheelers in the country. Its continuous innovation of providing usable and relevant technology innovation to the utility user has seen it maintain a dedicated consumer franchise.

TVS HLX series celebrates its 3 million global sales milestone. TVS HLX series has been instrumental in transforming millions of lives across Africa and has been offering easy mobility solutions in personal commute, motorcycle taxi and delivery segments. It has delivered to the brand's promise of being a sturdy product that is highly reliable across rugged terrains.

The JD Power (JDP) syndicated studies assess each of the industry offerings on JDP APEAL (Automotive Performance Execution and Layout) and JDP IQS (Initial Quality Study). the Company has been adjudged No. 1 in ICE Scooter and Motorcycle in the JDP APEAL study. The Company has been adjudged No. 1 in Scooter and No. 2 in Motorcycle in the JDP IQS study. The Company continued its winning streak of over 8 years.

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