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Sundaram Finance Ltd.

BSE: 590071 Sector: Financials
BSE 00:00 | 24 Apr Sundaram Finance Ltd
NSE 05:30 | 01 Jan Sundaram Finance Ltd
OPEN 1255.55
52-Week high 1780.90
52-Week low 1019.75
P/E 16.88
Mkt Cap.(Rs cr) 13,517
Buy Price 1210.00
Buy Qty 1.00
Sell Price 1323.75
Sell Qty 1.00
OPEN 1255.55
CLOSE 1248.80
52-Week high 1780.90
52-Week low 1019.75
P/E 16.88
Mkt Cap.(Rs cr) 13,517
Buy Price 1210.00
Buy Qty 1.00
Sell Price 1323.75
Sell Qty 1.00

Sundaram Finance Ltd. (SUNDARMFIN) - Director Report

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Company director report

Your directors have pleasure in presenting the 66th Annual Reporttogether with audited accounts for the year ended 31st March 2019. The summarisedfinancial results of the Company are presented hereunder:


(र in cr.)


Year ended March 31 2019

Year ended March 31 2018

Revenue from Operations 3397.61 2806.27
Other Income 20.56 49.13
Total Revenue 3418.17 2855.40
Less: Total Expenses 2522.89 2005.69
Profit before exceptional items and tax 895.28 849.71
Add: Exceptional item 592.43
Profit before tax 1487.71 849.71
Profit after Tax 1126.31 563.44
Other Comprehensive Income * (4.02) (1.51)
Surplus brought forward 767.20 636.85
Amount available for appropriation 1889.49 1198.78
Appropriations to:
- Statutory Reserve 225.26 106.59
- General Reserve 997.30 243.39
Dividend – Final 2016-17 72.22
Interim 2017-18 55.55
Final 2017-18 77.77
Interim 2018-19 55.55
Dividend Tax 33.30 9.38
Surplus carried to balance sheet 444.76 767.20

* Remeasurement of (loss)/gain (net) on defined plans recognised as apart of retained earnings.

Your Company has for the first time adopted Indian AccountingStandards (IND AS) notified under Section 133 of Companies Act 2013 read with Companies(Indian Accounting Standards) Rules 2015 from 1st April 2018 and the effective date suchtransition is 1st April 2017. The impact of the transition has been recorded in theopening reserves as at 1st April 2017.

FY 2015-16 2016-17 2017-18 2018-19
EPS (र) 42.96 44.58 50.71 54.37

*excludes Exceptional Profit ofर522.26 cr.


Your Company paid an interim dividend of र5/- per share inFebruary 2019. Your directors are pleased to recommend a final dividend of र7.50/-per share which together with the interim dividend would aggregate to a total dividendof र12.50/- per share (125% on the face value of र10/-). In addition yourdirectors are pleased to recommend a special dividend of र5/-per share (50% on theface value of र10/-).

The Dividend Distribution Policy formulated in accordance with theprovisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is attached as part of this report vide Annexure I.

FY 2015-16 2016-17 2017-18 2018-19
% 110 115 120 175*

*includes Special Dividend - 50%


A detailed report on corporate governance together with a certificatefrom the Statutory Auditors in compliance with the relevant provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached as part of thisreport vide Annexure II.

Compliance reports in respect of all laws applicable to the Companyhave been reviewed by the Board of Directors.


All transactions entered into by the Company with related parties werein the ordinary course of business and on an arm's length basis. The Company did notenter into any material transaction with such related parties under Section 188 of theCompanies Act 2013 during the year. Form AOC-2 as required under Section 134 (3)(h) of the Act read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is attachedas part of this report vide Annexure III (i). Further the Company's policy onRelated Party Transactions is attached as part of this report vide Annexure III (ii).

The Company did not enter into any transactions with any person orentity belonging to the promoter or promoter group and holding 10% or more shareholding inthe Company.


Your Company along with its subsidiaries and associates has alwaysresponded in a responsible manner to the growing needs of the communities in which itoperates. During the year your Company has in consonance with the CSR policy of theCompany undertaken a number of initiatives that contribute to society at large in theareas of health education environment and preservation of the country's richculture and heritage.

The Annual Report on CSR Activities undertaken by the Company for theFinancial Year 2018-19 is annexed with this report vide Annexure IV.


A Business Responsibility Report as required under Regulation 34(2) (f)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isenclosed as part of this report vide Annexure V.


The Company has in place a Policy for prevention of Sexual Harassmentin line with the requirements of The Sexual

Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints. All employees (permanent contractual temporary trainees) are covered underthis policy. No complaints were received during the financial year. None was pendingunresolved as on 31st March 2019.


In terms of Section 204 of the Companies Act 2013 and the rulesthereunder the Company has appointed M/s Damodaran & Associates PractisingCompany Secretaries as the Secretarial Auditor of the Company. The Secretarial AuditReport as provided by them is annexed to this Report vide Annexure VI.


Disclosure pursuant to Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed vide Annexure VII.


Based on the recommendations of the Nomination Compensation andRemuneration Committee your Board of Directors has granted subject to regulatoryapprovals where necessary 18750 stock options to select eligible employees on 30th May2019. The disclosure required under SEBI (Share Based Employee Benefits) Regulations 2014is furnished vide Annexure VIII.


As required under Section 92 (3) of the Companies Act 2013 and Rule 12(1) of the Companies (Management and Administration) Rules 2014 an extract of the AnnualReturn in MGT-9 is annexed as part of this report vide Annexure IX.


During the year under review no significant and material orders werepassed by the regulators courts or tribunals against the Company impacting its goingconcern status or its future operations.


Your company has no activity relating to conservation of energy ortechnology absorption. During 2018-19 expenditure in foreign currencies amounted toर83.57 cr. foreign currency earnings amounted to र244.38 lakhs.


The International Monetary Fund (IMF) has cautioned that"following a broad-based upswing in cyclical growth that lasted nearly two years theglobal economic expansion decelerated in the second half of 2018. Activity softened amidan increase in trade tensions and tariff hikes between the United States and China adecline in business confidence a tightening of financial conditions and higher policyuncertainty across many economies. Against this global backdrop a combination of countryand sector specific factors further reduced momentum. After peaking at close to 4% in2017 global growth remained strong at 3.8% in the first half of 2018 but dropped to3.2% in the second half of the year." The IMFs growth forecast for 2019 is 3.3%.


India's GDP has averaged 7.5% over the last five years indicatinga near normal growth and making it one of the fastest growing major economies in theworld. However it is estimated to have slowed down to about 7% during 2018-19 as againstthe original projection of 7.2%.

Tax collections for the period ended 2018-19 marked an increase of18.3% over the previous year but were well below the targeted collections for the year.Prices largely remained under control. While the average WPI inflation for 2018-19 was at4.3% (an increase from 2.9% in the previous year) headline inflation based on theConsumer Price Index for 2018-19 came in at 3.4% (compared to 3.6% in 2017-18) helped bysofter food inflation.

Foreign Direct Investment flows continued to be encouraging and India'sforeign exchange reserves stood at USD 412 billion at the end of March 2019 as compared toUSD 424 billion at the end of the previous year as per RBI data. The Current accountdeficit (CAD) was higher at 2.6% as against 2.0% in the previous year reflecting a lowergrowth in exports as also the effects of higher crude oil prices. The gross fiscal deficitcame down marginally to 3.4% for the period April 2018 to February 2019 as compared to3.6% for the year 2017-18. The Rupee depreciated ending the year at र69.20 to theDollar. According to the World Bank's Ease of Doing

Business Report India has improved its global ranking by severalnotches from 142 to 77 in the last five years.

Almost two years have elapsed since the introduction of The Goods andServices Tax (GST). While the operational issues in implementation are being addressedmovement of goods across the country has become easier thanks to the abolition of checkposts and introduction of e-way billing making for faster movement of goods across thecountry thus creating a seamless national market.

Despite strong economic fundamentals capital markets remained volatilethough the NIFTY grew 14% during the year. Interest rates also fluctuated but the 10-yearG-Sec ended the year roughly where it began at 7.35%. Overall bank credit is reported tohave grown at 12.3% in FY19 but industrial credit grew by only 7% and small and mediumenterprises even lower.

The NBFC sector and the wider financial markets witnessed considerableturbulence with the default of AAA rated IL&FS in August 2018. This was followed by afew more downgrades of NBFCs and Housing finance companies as a result of which lendingto the NBFC sector particularly smaller players was severely constricted. With a view topartially mitigate this RBI announced a relaxation in the securitisation norms wherebythe asset seasoning requirement was reduced from 12 to 6 months thus enabling easieraccess to funds. This led to a dramatic increase in securitisation volumes which morethan doubled to 1.90 lakh crores for the year. However the cost of funds for the NBFCsector witnessed a sharp increase reflecting the liquidity situation as well as theheightened risk perception of lenders.

Thanks to the prudent financial practices followed by your Company anda robust Asset Liability Management framework your company continues to enjoy theconfidence of its lenders and was therefore able to withstand market pressures without anydislocation to its business during the second half of 2018-19.


2018-19 was a difficult year for the automotive industry. Festiveseason demand which is one of the key drivers of vehicle sales was lacklustre at best.Natural calamities in two of the Southern states also acted as a dampener. Increasing fuelprices withdrawal of several NBFCs from the market revised axle load norms and buyerfatigue are some of the reasons attributed to the overall slowing down in the automotivesector. The M&HCV segment which witnessed very strong growth during the first half ofthe financial year saw a complete reversal of fortunes in the second half with volumesdropping dramatically month after month ending with an overall growth of 10% for theyear. Passenger car/SUV sales registered a meagre 3% growth over the previous year.


Your Company's disbursements at र17170 cr. (PY र15712 cr.) grew by 9.3% during the year under review. Gross receivables managed bythe Company stood at र33447 cr. as against र 28648 cr. a growth of 17%over the previous year.

With sales of Medium and Heavy commercial vehicles falling sharply inthe second half of the year and sales of passenger cars/SUVs remaining sluggish throughthe year competition for the available business intensified resulting in a squeeze onmargins. The relaxation in axle load norms announced by the Government in July 2018resulted in a capacity increase of 20-25% and had a dampening effect on freight rates.Coupled with the increase in fuel prices transport operator's viability came understrain. The liquidity squeeze faced by the NBFC sector meant that small and mediumtransport operators were starved of much needed working capital thereby exerting pressureon their cash flows. Given this scenario your Company tightened its credit filters forthe M&HCV segment. However its increased presence in the Construction equipmentintermediate and light commercial vehicle and tractor segments enabled it to register ahealthy growth in all of them.

As always your Company's sustained focus on maintaining superiorasset quality ensured that its portfolio continued to be best in class. Gross and Net NPAsstood at 1.33% (1.27%) and 0.83% (0.66%) respectively as at 31st March 2019. The netprofit for the year after considering the exceptional profit (र522.26 cr.) on saleof 25.9% stake in Royal Sundaram General Insurance Co. Limited was `1126.31 cr. asagainst `563.43 cr. in the previous year. The company's net-worth crossed a majormilestone and stood at `5043.81 cr. as on 31.3.2019. Capital adequacy (CRAR) at 19.46%was comfortably higher than the statutory requirement of 15%.

There are no significant changes in key financial ratios of the Companyfor F.Y. 2018-19 as compared to F.Y. 2017-18 except for the following;

Ratios March 2019 March 2018 Variance
Net Profit Margin (%)* 28.08% 19.73% 42%
Return on Net Worth (RONW)(%)* 24.55% 14.48% 70%

* The change in Net profit Margin and RONW as compared to the previousfinancial year is due to profit on sale of shares in Royal Sundaram General Insurance CoLtd which is shown as an exceptional item in the audited financial statements.


a) Deposits

During the year your Company mobilised fresh deposits aggregating to`701.52 cr. Renewal of deposits during the year amounted to `980.71 cr representing 85%of the matured deposits of `1150.27 cr. Deposits outstanding at the year-end were at`2975.16 cr. as against `2499.32 cr in the previous year. Your Company's DepositBalance crossed the `3000 cr. mark during the second week of April 2019. TheNet accretion for the financial year was `475.84 Cr being the highest ever in the historyof your Company. As at 31st March 2019 3452 deposits amounting to `31.11 Cr. had maturedfor payment and were due to be claimed or renewed. After close follow-up these figuresare currently 2216 and

`15.17 Cr. respectively. Continuous efforts are being made to arrangefor repayment or renewal of these deposits. There has been no default in repayment ofdeposits or payment of interest thereon during the year. Bureau Veritas (India) PrivateLimited has conferred accreditation for the Company's Deposits to the revised ISO9001:2015 Standard.

b) Term Funding

During the year your Company raised term funding from Banks Mutualfunds Insurance companies and others in the form of non-convertible debentures and termloans to the tune of `7014 cr. across various tenors.

c) Bank Finance

As part of the overall funding plan your Company's workingcapital limits with Consortium banks were increased from `2750 cr. to `3000 cr. During theyear your Company also issued several tranches of commercial paper aggregating to `12498cr. The maximum amount outstanding at any time was `5250 cr. and the amount outstanding atthe end of the year was `1800 cr. d) Assets Securitised / Assigned

During the year your Company raised resources to the extent of `3236cr. through securitisation and assignment of receivables.


Your Company's long term credit ratings have been retained at"AAA" (Highest Degree of Safety) with a "Stable Outlook" by both ICRA& CRISIL. The short term borrowings (including commercial paper) are rated"A1+" (very strong degree of safety) by both ICRA and CRISIL. Fixed Deposits arerated "AAA" (Highest Credit Quality) by ICRA and CRISIL.


Most economic indicators seem to indicate a slowing growth momentum.Commercial vehicle and Passenger car / SUV have fallen sharply in April 2019 by 14% and17% respectively. Vehicle sales growth has been feeble for nearly nine months now forreasons articulated earlier. February saw the IIP growth drop to a twenty month low of0.01% (y-o-y). The PMI manufacturing index slipped to an eight month low while theservices sector PMI also declined to a six month low.

As per the Society of Indian Automotive Manufacturers (SIAM) M&HCVsales are estimated to grow at a mere 5% and LCVs at 9%-10% in 2019-20. With the new BSVI emission norms slated for implementation effective April 1 2020 predictions ofsignificant pre-buying ahead of the BS VI rollout countered by the excess capacityargument have lent an air of uncertainty to how the market participants would respond.Sales of passenger vehicles (Cars and SUVs) are projected to grow at 3%-5%. Tractor salesare expected to moderate after three or four years of strong growth. No doubt thebehaviour of the Southwest monsoon will have an important bearing not only on tractorsales but also on the overall prosperity and well-being of rural India which in turnwill influence overall rural spending.

With the new Government in place it is reasonably expected that thethrust on infrastructure would continue. Additionally private sector investments whichwere subdued for the past few years are expected to pick up. However the uncertaintiessurrounding market liquidity interest rates imminent introduction of the BS VI emissionnorms and global oil prices render forecasts difficult. Most economic commentaries seemto point to a challenging year ahead for the economy in general and the automotive sectorin particular.

Your Company has taken these factors into account in drawing up itsplans for the year without losing sight of its core markets and segments. Rising interestrates in light of the tight liquidity and intensifying competition are likely to exertfurther pressure on margins. Your company expects to manage this through financing anappropriate mix of higher and lower yielding assets while ensuring that asset qualitycontinues to remain best in class.


The Company has a well established internal financial control and riskmanagement framework with appropriate policies and procedures to ensure the higheststandards of integrity and transparency in its operations and a strong corporategovernance structure while maintaining excellence in services to all its stakeholders.Appropriate controls are in place to ensure: (a) the orderly and efficient conduct ofbusiness including adherence to policies (b) safeguarding of assets (c) prevention anddetection of frauds/errors (d) accuracy and completeness of the accounting records and (e)timely preparation of reliable financial information.


Your Company has built a robust risk management framework over theyears. Engaged as it is in retail financing the

Company has to manage various risks including credit risk liquidityrisk interest rate risk and operational risk. The Risk Management Committee and the AssetLiability Management Committee review and monitor these risks on a regular basis. TheCompany manages credit risk through stringent credit norms established through severaldecades of experience in retail lending and continues to follow the time tested practiceof personally assessing every borrower before committing to a credit exposure. TheCompany monitors ALM on an ongoing basis to mitigate liquidity risk while interest raterisks arising out of maturity mismatch of assets and liabilities are managed throughregular monitoring of the maturity profiles. The Company also measures the interest raterisk by the duration gap method.

Operational risks arising from inadequate or failed internal processespeople and systems or from external events are adequately addressed by the internalcontrol systems. These systems are continuously reviewed monitored and modified asnecessary. A stable and experienced management team provides much needed continuity andexpertise in managing the dynamic changes in the market environment. The company has welldocumented standard operating procedures for all processes to ensure better control overtransaction processing and regulatory compliance and periodical review of the same ensuresthat the risk of obsolescence is avoided.


As part of its efforts to evaluate the effectiveness of the internalcontrol systems your Company's internal audit department independently evaluates theadequacy of control measures on a periodic basis and recommends improvements whereverappropriate. The Internal Audit team plays a vital role in continuously monitoring theeffectiveness of the Standard Operating Procedures and makes extensive use of software andanalytical tools which enables effective offsite monitoring.

The internal audit department is manned by highly qualified andexperienced personnel and reports directly to the Audit Committee of the Board. The AuditCommittee regularly reviews the audit findings as well as the adequacy and effectivenessof the internal control measures. Additionally an Information Security Assurance Serviceis also provided by independent external professionals. Based on their recommendationsthe Company has implemented a number of control measures both in operational and ITrelated areas apart from information security related measures.


In an environment that is rapidly becoming technology and digitaloriented your Company continues to invest in long term people development fororganisational excellence. Part of the enduring Sundaram Finance tradition over thedecades has been our adherence to the ‘Sundaram Way'- the value system that hasformed the bedrock of the Company and the percolation of these values to successivegenerations of employees. For talent development we have a healthy mix of learningprogrammes addressing both domain knowledge and soft skills. During the year 30% ofprogrammes were for domain knowledge and 70% in the area of soft skills involving 3312man hours of learning. The Sundaram Finance Centre of Excellence (CoE) launched in2016-17 with a view to effectively leverage technology to accelerate the pace ofinstitutional knowledge transfer across the Sundaram Finance landscape has grown by leapsand bounds. The response has been very enthusiastic and over 2500 employees haveparticipated in various modules of the CoE during the year. The increase in penetration ofCoE has meant that the percentage of Facilitator led Domain Knowledge training programmesfor senior managers has come down.


The IT Strategy Committee of the Company has laid down a comprehensivepolicy relating to Cyber Security Business Continuity Outsourcing and InformationSecurity / Technology in line with its terms of reference.

Your Company has a State of the Art Data Centre catering not only toits own needs but also those of its subsidiaries and associates with a capacity of over300 servers managed by professionals providing 24/7 support with over 99.99% uptime. TheData Centre is accredited for ISO/IEC 27001:2013 by TUV Rheinland for Information SecurityManagement System. The Disaster Recovery Site for all critical applications is hosted at aseparate facility located in a different seismic zone with near real-time datareplication. Your company has implemented various protocols for managing Information andCyber security across the organization. In its continuous efforts to ensure a secureenvironment your Company has built a robust infrastructure and carries out periodiccomprehensive vulnerability assessments and penetration testing to identify and minimizeexternal threats.

The internal IT Team has mastered a complex landscape of currenttechnologies marketing approaches and operational capabilities to cater to the variousbusiness applications within the Company. Of special significance is their contribution tothe complex task of transitioning to the IND AS regimen. Digital services and operationsare raising the competitive bar in every sector. Your Company's digital strategy isdriven by the twin objectives of enriching our employee's jobs on the one hand whileenhancing the customer experience on the other. Our digital initiatives address thesevery objectives by enhancing our speed of response to our customers and providing them ahost of digital options to interact and transact with us and a number of productivityenhancements through process automation which free up our people to deliver the unique‘Sundaram Experience' to our customers. We are a relationship centric businessand have consciously adopted digital to augment these relationships and be digitallyavailable for our customers as and when they need us.


In accordance with the provisions of Section 129 (3) of the CompaniesAct 2013 the Consolidated Financial Statements drawn up in accordance with theapplicable Accounting Standards form part of the Annual Report. A separate statementcontaining the salient features of the financial statements of Subsidiaries and Associatesin Form AOC-I forms part of the Annual Report.

The Consolidated profit after tax is `1160.85 cr. as against `729.91cr. of the previous year. The total comprehensive income for the year was `1012.79 cr. asagainst `877.87 cr.

The annual accounts of all the Subsidiary Companies have been posted onyour Company's website – Detailed information includingthe annual accounts of the Subsidiary Companies will be available for inspection by themembers at the registered office of the Company and will also be made available to themembers upon request.


Sundaram Finance Holdings Limited

Your Company along with its promoters holds 53.34% in SundaramFinance Holdings Limited and hence the latter is treated under the applicable AccountingStandards as subsidiary for consolidation purposes. Sundaram Finance Holdings Limitedreported a gross income of `120.71 cr. as against `75.59 cr. in the previous year. Profitafter tax was `84.93 as compared to `54.40 cr in the previous year.

Sundaram Asset Management Company


The Company reported a gross income of `270.43 cr. as against `328.73cr. in the previous year. Profit after tax was `19.86 cr. as compared to `27.46 cr. duringthe previous year. The Average Assets under Management amounted to ` 31933 cr. forthe year 2018-19 as compared to `34164 cr. in the previous year. The companyrecommended a dividend of `7.50 per share for the year on the paid-up equity capital of`20 cr.

Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of `1.55 cr. asagainst `1.56 cr. in the previous year and reported a profit after tax of `0.80 cr. forthe year as against `0.85 cr. in the previous year. The company recommended a dividend of`120 per share for the year.

LGF Services Limited

During the year the Company reported a gross income of `0.38 cr. asagainst `1.90 cr. in the previous year. The profit after tax for the year was `0.25 cr. asagainst `0.34 cr. in the previous year. The company proposed a dividend of `6 per/-share for the year.


Sundaram BNP Paribas Home Finance


The company approved loans aggregating to `2672 cr. (Previous year`2993 cr.). Disbursements during the year were lower by 7% at `2449 cr. (PY `2626 cr.).

The company earned a gross income of `1006.27 cr. (PY `934.58cr.) and reported a profit after tax at `145.48 cr. (PY `144.42 cr.). The loan portfoliounder management as at 31st March 2019 stood at `9041 cr. as against `8336 cr. inthe previous year. The gross and net NPA stood at 2.95% and 1.39% respectively as of31.03.2019. The company proposed a dividend of ` 3.50 per share for the year (PY35%).

Royal Sundaram General Insurance Co.

Limited (Royal Sundaram)

During the year your Company sold 116291000 equity shares of RoyalSundaram representing 25.90% to Ageas Insurance International N.V. Belgium for a totalconsideration of `984.17 cr. reducing your Company's shareholding in Royal Sundaramfrom 75.90% to 50%. Consequently Royal Sundaram has become a joint venture.

Royal Sundaram reported a robust increase of 21% in Gross WrittenPremium (GWP) at `3196 cr. as compared to `2643 cr. in the previous year. Profit after taxfor the year was `121 cr. as against `83 cr. in the previous year.

Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited earned an income of `35.25cr. during the year. The company reported loss after tax at `8.68 cr. during the year asagainst `0.15 cr. in the previous year.


The details regarding number of board meetings held during thefinancial year and composition of Audit Committee are furnished in the CorporateGovernance Report.


Sri N. Venkataramani Independent Director of your Company since 2010relinquished his directorship after completion of his first term as Independent Directorunder the Companies Act 2013 on 31st March 2019. Your directors place on record thesignificant contribution made by him to the deliberations of the Board for nearly tenyears.

Sri R Raghuttama Rao was co-opted as an Additional Director on theBoard in independent capacity for a term of five (5) consecutive years with effect from1st April 2019 and holds office as Additional Director up to the date of the ensuingAnnual General Meeting. The Company has received due notice from a member proposing theappointment of Sri R Raghuttama Rao as Independent Director of the Company.

Sri S. Ravindran and Sri T.T. Srinivasaraghavan Directors retire byrotation and being eligible offer themselves for re-election.


The Company has received necessary declaration from each IndependentDirector of the Company under Section 149 (7) of the Companies Act 2013 that theIndependent Directors of the Company meet with the criteria of their Independence laiddown in Section 149 (6).


The Board has made a formal evaluation of its own performance and thatof its committees and individual directors as required under Section 134(3)(p) of theCompanies Act 2013.


Your directors confirm that:

1. In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;

2. The Company has selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period;

3. Proper and sufficient care has been exercised for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities;

4. The annual accounts have been prepared on a going concern basis;

5. Adequate internal financial controls have been put in place and theyare operating effectively; and

6. Proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.


M/S Sundaram & Srinivasan Chartered Accountants Chennai have beenappointed as Statutory Auditors of your Company to hold office for a term of five (5)consecutive years from the conclusion of the 64th Annual General Meeting until theconclusion of the 69th Annual General Meeting at such remuneration as may be mutuallyagreed between the Board of Directors of the Company and the Statutory Auditors.


Your directors gratefully acknowledge the support and co-operationextended to your Company by all its customers depositors shareholders and bankers asalso the various mutual funds insurance companies automotive manufacturers and dealers.

Your directors also place on record their special appreciation of TeamSundaram for their dedication and commitment in delivering the highest quality of serviceto every one of our valued customers.

For and on behalf of the Board
Chennai 600 002 S VIJI
30.05.2019 Chairman