TUBE INVESTMENTS Directors Report

Dear Shareholders,

The Directors take pleasure in presenting the 67th Annual Report
together with the audited Financial Statements of the Company for the
year ended 31st March 2016.

1. Business Environment

The business environment during 2015-16 continued to be a cause for
concern due to adverse monsoon conditions in several parts of India
which impacted crop yields, resulting in reduced rural disposable
income and a lower spending tendency in the nation''''s bigger cities
affecting thereby overall consumer demand and consumption.

Globally, the year was marked by the Euro zone crisis, economic reforms
and changing economic policies of the People''''s Republic of China mainly
depreciation of its currency, RMB (Renminbi) against the USD (American
Dollar), a rise in terrorism and meltdown of commodity prices. Growth
fell much short of expectations in 2015, decelerating to 2.4% from 2.6%
in the previous year.

Going forward, global growth is projected to edge up in the coming
years, as per the World Bank''''s Report on Global Economic Prospects
albeit at a slower pace than originally envisioned, reaching 2.9% in
2016 and 3.1% in 2017. This pickup is predicated on continued gains in
the major high-income countries, a gradual tightening of financing
conditions, a stabilisation of commodity prices and a gradual
rebalancing in the People''''s Republic of China.

India''''s economic growth for 2015-16 is estimated at 7.5%. It is
expected to further accelerate to 7.8% in 2016-17 and 7.9% in 2017-18
as per the World Bank''''s update on Indian economy.

The Indian automobile sector grew 3% during 2015-16. In the four
wheeler segment, passenger vehicles and commercial vehicles sale
volumes were up 6% and 12% respectively. In the two wheeler segment,
while scooters grew by 12%, motor cycles showed a decline by 2%.

2. Standalone Financial Highlights Rs. in Cr

Particulars 2015-16 2014-15

Sale of Products - Gross 4057.57 3916.16

Excise Duty on Sales (267.52) (270.38)

Sale of Products - Net 3790.05 3645.78

Profit Before Exceptional Items and Tax 138.80 121.15

Profit on sale of Non-Current Investments 820.78 -

Provision for Impairment of Tangible Fixed
Assets (37.05) -

Compensation under Voluntary Retirement Scheme - (27.43)

Profit on sale of Non-Operating Asset 1.25 61.43

Profit Before Tax 923.78 155.15

Tax Expense (193.89) (34.29)

Profit After Tax 729.89 120.86

Surplus at the beginning of the year 181.53 176.98

Earlier year''''s provision for dividend tax
no longer required 1.45 1.22

Depreciation on Tangible Fixed Assets on
transition to Schedule II of the Companies
Act, 2013 - (4.63)

Profit Available for Appropriation 912.87 294.43

Transfer to General Reserve - (30.00)

Transfer to Debenture Redemption Reserve (Net) (24.27) (42.18)

Interim Dividend @ Rs.1.50 (Previous year Rs.1.50) per Equity Share of Rs.2 each (28.09) (28.06)

Special Dividend proposed @ Rs.3.50
(Previous year-Final Rs.0.50) per
Equity Share of Rs.2 each (65.57) (9.36)

Dividend Distribution Tax - Current year (18.49) (3.30)

Balance carried to Balance Sheet 776.45 181.53

3. Performance Overview

During 2015-16, the Company achieved a net turnover of Rs.3790 Cr.,
growing 4% over 2014-15. The Profit before Depreciation, Interest,
Exceptional Items and Tax for the year was at Rs.385 Cr. as against
Rs.356 Cr. in the previous year, a growth of 8%. The Profit before
Exceptional items and Tax was at Rs.139 Cr. as against Rs.121 Cr. in
the previous year, a growth of 15% mainly due to higher sales.

During the year, the Company disinvested part of its shareholding in
its subsidiary, M/s. Cholamandalam MS General Insurance Co Ltd., to the
joint venture partner, M/s. Mitsui Sumitomo Insurance Co Ltd., Japan,
which yielded a profit of Rs.821 Cr.

On account of various market factors, changes in future project
potential and expected usage, the Company has, during the year under
review, recognised an impairment loss of Rs.37 Cr. in Engineering and
Metal Formed Products segments based on recoverable amounts determined
by considering estimated net selling price for various asset classes.

The Cycles and Accessories segment recorded a revenue of Rs.1485 Cr. as
compared to Rs.1314 Cr. during 2014-15, growing 13%, which was on the
back of higher institutional and Specials'''' sales. The operating profit
before interest and tax stood at Rs.79 Cr. as compared to Rs.58 Cr.
during the previous year, a growth of 37%.

The Engineering segment registered revenue of Rs.1629 Cr. as compared
to Rs.1725 Cr. during the previous year. The operating profit before
interest and tax stood at Rs.95 Cr. as compared to Rs.103 Cr. during
2014-15. The drop in profits was due to additional costs associated
with the new Large Diameter Tube manufacturing facility.

The Metal Formed Products segment recorded a revenue of Rs.954 Cr. as
compared to Rs.929 Cr. during the previous year, a growth of 3%. The
operating profit before interest and tax stood at Rs.86 Cr. as compared
to Rs.81 Cr. during the previous year, a growth of 6%.

4. Business Review - Standalone

4.1. Cycles and Accessories TI''''s Presence

The Cycles and Accessories segment of the Company comprises bicycles of
the Standard and Special variety including alloy bikes & specialty
performance bikes, bicycle components sold as spares, fitness equipment
such as motorised tread mills, elliptical, recumbent bikes etc.

Industry Scenario

Bicycles fall under two distinct categories - Standard and Special. The
bicycle has come to be looked at as a product for fun, fitness and
leisure activities in addition to being viewed as just a transportation
medium. As per the industry estimates, buoyed by orders from the State
Governments, bicycle industry volumes grew approximately 10% in
2015-16. However, aside of the institutional sales, trade volumes have
actually witnessed a decline of around 8% during the year. Consumers
today pay greater attention to design, features and retail experience
in their purchase decisions. Increasing aspirations, higher purchasing
power, international exposure to usage patterns and growing fitness
consciousness have provided impetus to the high-end and Special
bicycles. These segments continue to grow steadily year-on-year.

Nearly 80% of the country''''s requirements are met by four major players.
The smaller regional players and imports constitute the balance. The
Company enjoys a share of over one-third of the total organised market
with a much higher share in the premium segment.

The domestic Fitness Industry remained attractive achieving significant
growth during the year under review. The fitness equipment business can
be broadly classified under two segments - home and commercial. The
fitness business of the Company is largely restricted to the home
segment. Higher income and a greater desire to be healthy and fit drive
the growth of the Fitness Industry in India.

Review of Performance

The segment sold over 45 lakh bicycles during the year, registering a
growth of 13% over 2014-15 mainly due to higher institutional volumes.
The segment continues to focus on creating an enhanced retail
experience especially with regard to the Specials and premium segment.
Exclusive stores numbering 642 spread all over the country provide the
customers with a superior purchasing experience of the segment''''s
offerings. These retail outlets facilitate a better understanding of
the market requirements through a direct interaction with the
customers. In order to address the market''''s requirements, the segment
invests continuously in strengthening the supply chain capabilities.

The segment also has 16 premium stores under the "Track and Trail"
banner in select identified locations. New retail concepts like the
''''Ciclo Cafe'''', a cafe-cum-store, which was launched in Chennai in
2014-15 to promote the sale of high-end bicycles and to strengthen the
presence amongst cycling communities, continue to receive encouraging
response from cycling aficionados and experts alike. Extension of the
cafe-cum-store concept to all major metro cities of the country is part
of the segment''''s plans to reach out to even more customers, providing
them with the opportunity for experiential purchase. Similar new
concepts are also being planned in the Fitness business. Upgrading of
the retail network under "Track and Trail" brand is also being done on
a continuous basis.

The segment expects to further improve its product portfolio by
launching new products and designs. As part of its constant efforts to
bring to the Indian customer the best bicycles available
internationally, the Company launched the entire range of the world
renowned ''''Ridley'''' brand of bicycles in India, including an
India-specific product portfolio, during the year. The latest premium
bicycles from the Ridley stable have met with encouraging response from
the Indian customers.

The segment will pursue initiatives including foray into e-commerce to
widen its distribution reach, targeted advertising to drive demand and
enhancing plant capacities. Construction of the green-field bicycle
plant at Rajpura, Punjab with a production capacity of 250,000 bicycles
per month is nearing completion and commercial production is expected
to commence in the second quarter of FY 2016-17. The Rajpura facility
will enable the segment to take advantage of an established vendor base
available nearby in Ludhiana and to cater to the high demand in select
segments and geographies. The plant for producing bicycles for export
at the existing Ambattur facility is expected to reach its rated
capacity (30,000 bicycles per month) during the current year. To
optimise capacities and costs across various plants, the segment is
currently rolling out several initiatives. Efforts will also continue
on cost reduction initiatives in order to improve competitiveness and
profitability.

The Fitness business is being revamped with an improved product
portfolio and restructured operations.

During the year under review, the segment recorded revenue of Rs.1485
Cr. as compared to Rs.1314 Cr. during 2014-15, a growth of 13%. The
operating profit before interest and tax stood at Rs.79 Cr. as compared
to Rs.58 Cr. during the previous year, a growth of 37%.

4.2. Engineering

TI''''s Presence

The Engineering segment of the Company consists of cold rolled steel
strips and precision steel tubes viz., Cold Drawn Welded tubes (CDW),
Electric Resistance Welded tubes (ERW) and Stainless Steel tubes.
These products primarily cater to the needs of the automotive, boiler,
bicycle, general engineering and process industries. The Company is
further engaged in the manufacture of large diameter welded tubes
mainly for non-auto application which are largely imported.

Industry Scenario

The overall automotive industry grew by 3% during 2015-16. The
passenger vehicle and two-wheeler segments registered growth of 6% and
2% respectively over the last fiscal. Within the two wheeler segment,
while the sale volumes in scooters grew by 12%, motorcycles declined by
2%. The domestic commercial vehicle industry started recovering during
the year from a prolonged slump lasting over two years.

In Cold Rolled Steel Strips, the Company continued to be a ''''niche
player'''' in a market dominated by integrated steel manufacturers by
focussing on special grades catering to varied applications in
different sizes and grades.

Review of Performance

The Engineering segment continued to grow during the year under review
thanks to the growth of the auto industry by taking good advantage of
the capabilities, regional plants and distribution network of the
segment.

During the year, volumes of the precision steel tubes business grew 8%,
while the cold rolled steel strips business declined 7%. Production of
the large diameter tube manufacturing plant, which caters to the
requirements of the power, infrastructure, off-highway and general
engineering segments, is getting stablilised. Plans have been drawn up
for optimum utilisation of this facility and improvement in the market
share.

During the year under review, the segment registered revenue of Rs.1629
Cr. as compared to Rs.1725 Cr. during the previous year. The operating
profit before interest and tax stood atRs.95Cr. as compared to Rs.103
Cr. during 2014-15.

Product value addition, management of cost, modernisation of facility
and further enhancement in efficiencies were the key business emphasis
areas aiding improved profitability during the year under review.

4.3. Metal Formed Products

TI''''s presence

Automotive & industrial chains, fine blanked products, stamped
products, roll-formed car doorframes and cold rolled formed sections
for railway wagons and passenger coaches constitute the Metal Formed
Products segment.

Industry scenario

The two wheeler segment registered a 2% growth in 2015-16. The scooter
segment grew 12% and the passenger car segment 6%. The segment is one
of the three major players manufacturing roller chains and fine blanked
parts for the automotive industry in India. With the increasing two
wheeler population, the replacement market for chains and sprockets
continued to register healthy growth. The domestic demand for
industrial chains has grown moderately.

There are currently three established roll-formed car doorframe
manufacturers in India. International car majors continue to invest in
India and are increasingly using India as an export base. As a result,
many component manufacturers have the opportunity to cater to the
global needs of automobile manufacturers and theirTier 1 suppliers.
Within the railway segment, while the freight sub-segment is yet to
show signs of a major revival, a pick-up was witnessed with regard to
the passenger coach sub-segment with the segment supplying 112 coaches
to the Integral Coach Factory, Chennai.

Review of Performance

The sale of automotive chains to OEMs (Original Equipment
Manufacturers) registered a growth of 7% compared to 2014-15. The
Company continues to expand its presence in the aftermarket segment
benefiting from the growing population of two-wheelers. The sale of
industrial chains in the domestic market recorded a growth of 6% during
the year due to new products developed substituting imports as well as
through appointment of dealers in the growing industrial belts. Fine
blanked components volume grew by 8% primarily through new parts
developed for four wheeler segment. Exports showed a decline of 1% over
2014-15 and continued to be a challenge in the light of difficult
demand conditions in Europe, with a weak Euro affecting realisations.

Doorframe sale volumes were lower at 5% during 2015-16 due to a decline
in the sale of select models of major car manufacturers. The focus is
on generating more business from the Auto OEMs, leveraging the Tier-1
position with specific emphasis on roll form channels used in passenger
cars. In addition, growing the casings vertical with efforts spread
across sectors and geographical regions, strengthening the current
position in respect of coach parts and foraying into agri-rotovators,
blades and other farm implements are some of the opportunities that
will be looked into closely to sustain the journey towards growth.

To sustain profitable growth, the chains business segment will be
pursuing its core business processes to successfully handle
fluctuations as well as change in the product mix to meet customers
demand. The auto aftermarket continues to provide opportunities for
growth, albeit with good competition and the business expects to
strengthen on the sales structure, deepen its coverage and launch new
products for new categories.

During the year under review, the segment recorded revenue of Rs.954
Cr. as compared to Rs.929 Cr. during the previous year, a growth of 3%.
The operating profit before interest and tax stood at Rs.86 Cr. as
compared to Rs.81 Cr. during the previous year, a growth of 6%.

5. Dividend

The Board of Directors has recommended a Special Dividend of Rs.3.50
per share, on equity share of face value of Rs.2 each for the financial
year ended 31st March, 2016 considering the profit on sale of 14% stake
in Cholamandalam MS General Insurance Company Limited. Together with
the interim dividend of Rs.1.50 per share, paid on 5th February, 2016,
the total dividend for the year works out to Rs.5 per share on equity
share of face value of Rs.2 each. The Special Dividend, if approved by
shareholders, will be paid on or after 8th August, 2016.

6. Share Capital

The paid up equity share capital as on 31st March 2016 was Rs.37.47 Cr.
During the year under review, the Company has issued 2,14,873 equity
shares to eligible employees under the Employee Stock Option Scheme.

7. Finance

Cash and Cash Equivalents as at 31st March 2016 were Rs.735 Cr. The
Company continues to focus on judicious management of its working
capital. Receivables, inventories and other working capital parameters
were kept under strict check through continuous monitoring.

7.1. Non-Convertible Debentures

During the year, Non-Convertible Debentures aggregating Rs.375 Cr. were
issued and Rs.350 Cr. were redeemed. As on 31st March 2016,
Non-Convertible Debentures aggregating Rs.1075 Cr. were outstanding.

7.2. Deposits

The Company has not accepted any fixed deposits under Chapter V of the
Companies Act, 2013 and as such no amount of principal and interest was
outstanding as on 31st March 2016.

7.3. Particulars of Loans, Guarantees or Investments

During the year, the Company has not invested or given any loans or
guarantees under the provisions of Section 186 of the Companies Act,
2013.

8. Consolidated Financial Highlights

Rs. in Cr.

Particulars 2015-16 2014-15

Revenue from Operation 7991.21 9722.11

Profit Before Tax 1374.18 1003.28

Tax Expense (367.07) (319.64)

Profit for the year before Minority Interest
and share of profit from Associate 1007.11 683.64

Minority Interest (142.04) (259.28)

Share of profit from Associate 173.84 -

Net Profit for the Year 1038.91 424.36

The Company''''s consolidated Net Profit for the year was at Rs.1039 Cr.
as compared to Rs.424 Cr. during the previous year, a growth of 145%.

9. Business Review - Associate, Subsidiaries and Joint Ventures

9.1. Cholamandalam Investment and Finance Co Ltd (CIFCL)

CIFCL, an associate of the Company, had another year of fine
performance on the back of sustained performance by its vehicle finance
and home equity verticals, CIFCL''''s profit before tax grew 32%, at
Rs.870 Cr. (previous year: Rs.657 Cr.) and profit after tax increased
to Rs.569 Cr. (previous year: Rs.435 Cr.). Disbursements of CIFCL
increased to Rs.16,380 Cr. in 2015-16 (previous year: Rs.12,808 Cr.).

CIFCL allotted 1,22,85,012 equity shares of Rs.10/- each to M/s.
Dynasty Acquisition (FDI) Ltd., on conversion of the Compulsorily
Convertible Preference Shares issued by them, resulting in reduction of
Company''''s shareholding in CIFCL from 50.24% to 46.28%, even though the
number of shares held by our Company in CIFCL remains at 7,22,33,019
equity shares as in the previous year. Consequently, CIFCL ceased to be
a subsidiary of the Company with effect from 2nd September, 2015.

9.2. Cholamandalam MS General Insurance Co. Ltd (CMSGICL)

CMSGICL, a joint venture with M/s. Mitsui Sumitomo Insurance Company
Ltd., Japan (MS), achieved a Gross Written Premium (including
reinsurance acceptance) of Rs.2466 Cr. during 2015-16 (previous year:
Rs.1,896 Cr.), registering a growth of 30%. The profit before tax was
Rs.213 Cr. for the year (previous year: Rs.199 Cr.), registering a
growth of 6%.

During the year, the Company sold 4,18,32,798 equity shares of face
value Rs.10/- each representing 14% shareholding in CMSGICL to MS for
an aggregate consideration of Rs.882.67 Cr. Consequent to this, the
Company''''s shareholding in CMSGICL reduced from about 74% to 60% and MS''''
shareholding has gone up from 26% to 40%. The Company continues to hold
17,92,82,861 equity shares, aggregating about 60% in CMSGICL''''s equity
capital.

9.3. Shanthi Gears Ltd (SGL)

SGL, the Company''''s subsidiary, recorded a turnover of Rs.162 Cr. in
2015-16 against Rs.152 Cr. in the previous year. Profit before tax was
Rs.23 Cr. (previous year: Rs.13 Cr.). During the year, SGL renewed its
focus on re-establishing itself in the market and gaining new
customers.

SGL grew its order book by 34% due to the efforts taken in the previous
years to enhance presence in the market especially in key user
locations, enhancing its reach by strengthening its sales and service
teams, building references in high potential segments, entry into the
defence segment and building its capability in certain high-end
applications.

SGL continues to pursue opportunities to grow the customer base,
enhance product offerings, reduce cost and improve execution
capabilities to meet customer expectations.

9.4. Financi?re C10 SAS (FC10)

FC10, the Company''''s wholly-owned subsidiary in France, recorded a
consolidated turnover of Euro 33 Mn in 2015 (previous year: Euro 33
Mn). The loss before tax for the year was Euro 0.34 Mn (previous year:
loss before tax Euro 0.38 Mn). The consolidated results of FC10 include
results of its subsidiaries viz., Sedis SAS & S2CI in France and Sedis
Co Ltd in UK.

9.5. TI Tsubamex Private Ltd (TTPL)

TTPL is a joint venture of the Company with Tsubamex Company Limited,
Japan to engage in the business of design and engineering of sheet
metal dies and fixtures and providing related services. The Company
holds 1,95,00,000 equity shares, aggregating 75% of TTPL''''s equity
capital.

TTPL''''s die manufacturing facility at Oragadam near Chennai is currently
in trial production mode after successful installation and
commissioning of imported capital equipment. With a good order book
for die design and manufacture secured from the major Japanese
automakers in India, TTPL is set to commence commercial production in
the current year.

TTPL''''s loss before tax for the year was Rs.3.52 Cr. (previous year:
Rs.1.94 Cr.).

9.6. TI Financial Holdings Ltd (TIFHL)

TIFHL is a wholly-owned subsidiary of the Company with an investment of
Rs.0.11 Cr. and is yet to commence its operations.

9.7. Cholamandalam MS Risk Services Ltd (CMSRSL)

CMSRSL, a joint venture with M/s. Mitsui Sumitomo Insurance Company
Ltd., Japan, offers consulting services in the areas of risk assessment
and mitigation across a range of industries. CMSRSL recorded a revenue
of Rs.32.42 Cr. during 2015-16 (previous year: Rs.35.33 Cr.). The
profit before tax for the year was Rs.2.83 Cr. (previous year: Rs.2.04
Cr.).

The Statement containing the information in respect of the Company''''s
subsidiaries, joint ventures and associate companies is attached. The
Consolidated Financial Statements of the Company and its subsidiaries,
prepared in accordance with the Accounting Standard (AS) 21, form part
of the Annual Report.

10. Financial Review

10.1. Profits & Profitability

While Operating Profit before Depreciation and Interest registered a
marginal growth over the previous year through continued control on
costs and better operating efficiencies, the Operating Profit before
Tax excluding exceptional items was impacted by costs incurred on the
Large Diameter Tube plant which is yet to reach full production levels.
On certain occasions, the Company was not able to fully recover the
increase in cost from its customers.

All the business segments of the Company maintained their focus on
servicing customers, improving efficiencies, controlling working
capital and reducing resources employed in the business.

10.2. Capital Expenditure

The Company''''s Large Diameter Tube manufacturing plant is expected to
stabilise its production in the current year. The Company continues to
invest in facilities with a view to servicing its customers in a more
timely and efficient manner, modernising its assets and aims to be the
best in class. The Company continues to assess the trends emerging in
the industry and the changing requirements of its customers and invest
appropriately for the long-term. To compete more effectively in the
market and to address the growing bicycle segment in the northern and
western parts of the country, the Company is setting up a new facility
in Punjab for manufacturing bicycles. The Company provides for
accelerated depreciation with respect to some of its assets to reflect
the remaining estimated useful life given the dynamic market
conditions.

10.3. Interest Cost

The Company''''s average cost of borrowing reduced to 9% p.a. through a
judicious mix of foreign currency and Indian Rupee borrowing in long
and short-term funds. The interest cost for the year was lower due to
the lower quantum of borrowings and lower interest rates.

10.4. Internal Control Systems

Internal control systems in the organisation are looked at as the key
to its effective functioning. The Internal Audit team periodically
evaluates the adequacy and effectiveness of these internal controls,
recommends improvements and also reviews adherence to policies based on
which corrective action is taken to address gaps, if any.

The Company has a risk management policy and its internal control
systems are an integral part of this policy. The Company has extensive
internal control systems to mitigate risks inherent to day-to-day
functioning and covers all areas of operations.

Revenue and capital expenditures are governed by approved budgets and
the levels are defined by a delegation of authority mechanism. Review
of capital expenditure is undertaken with reference to benefits
expected in line with the policy for the same.

Investment decisions are subject to formal detailed evaluation and
approved by the relevant authority as defined in the delegation of
authority mechanism. The Audit Committee reviews the plan for internal
audit, significant internal audit observations and functioning of the
Company''''s Internal Audit department on a periodic basis.

10.5. Internal Financial Control Systems with reference to the
Financial Statements

The Company has a formal system of internal financial control to ensure
the reliability of financial and operational information, and
regulatory and statutory compliances. The Company''''s business processes
are enabled by an Enterprise-wide Resource Platform (ERP) for
monitoring and reporting processes resulting in financial discipline
and accountability.

11. Enterprise Risk Analysis and Management

Risk management refers to the formal processes whereby risks associated
with the "enterprise", as a whole, are managed. Risk management
encompasses the following sequence:

- Identification of risks and risk owners

- Evaluation of the risks as to likelihood and consequences

- Assessment of options for mitigating the risks

- Prioritising the risk management efforts

- Development of risk management plans

- Authorisation for the implementation of the risk management plans

- Implementation and review of the risk management efforts

Risk management strengthens the robustness of the business. The Company
has an established risk assessment and minimisation procedure. There
are normal constraints of time, efficiency and cost.

Some of the risks associated with the businesses and the related
mitigation plans are discussed hereunder. The risks given below are not
exhaustive and the evaluation of risk is based on management''''s
perception.

The Risk Management Committee of the Board of Directors, constituted
specifically to identify/ monitor key risks of the Company and evaluate
the management of such risks for effective mitigation, met on four
occasions during the year as per details given in the Annexure to the
Corporate Governance Report. At its meetings, the Committee
comprehensively reviewed the risks and related mitigation plans across
the various SBUs (Strategic Business Units) of the Company.

11.1. Bicycles and Accessories

Risk Why considered as Risk

Product - Availability of alternatives
Obsolescence - increased affordability for motorised
Risk vehicles
- Shrinking road space for cycling

Price Risk - High competition leading to reduction
in prices

Sourcing Risk - Dependence on vendor base

- Consistent quality and supplies

- 25% of vendors located in residential area

Competition Risk - Competition from domestic suppliers

- Imports

Risk Mitigation Plan/Counter Measure

Product Obsolescence Risk - Higher variety, especially of premium bikes

- Products based on customer need

- "Cycling" as a concept - leisure,
fitness, fun and recreation

Price Risk - Cost competitiveness

- Development of lower cost models

- Consumerinsightbased newproduct
development and improving quality of
aesthetic

Sourcing Risk - Continuous upgrading of vendor capability

- Relationship building

- Imports from quality sources

- Relocate vendor base through vendor park
at new location

Competition Risk - Enhancing the Brand awareness

- Introducing new models with a healthy
innovation funnel

- Consistent quality and timely delivery

- Enhancing competitiveness

11.2. Engineering

Risk Why considered as Risk

User Industry - Significant exposure to auto sector
Concentration - Lag in pass through of input cost
Risk changes
- Demand declining in global markets

Technology - Cheaper alternatives for auto
Obsolescence applications affecting revenue streams
Risk

Raw Material - Volatility in steel price
Risk - inconsistency in quality

- High inventory holding

Competition Risk - Competition from integrated steel mills

- New entrants with financial strength

- Imports

Risk Mitigation Plan/Counter Measure

User Industry
Concentration Risk - New products/applications to existing
new customers

- Introduction of new products catering
to non-auto users

- Leverage application engineering skills
for tubular solutions

- Drive operational efficiencies vigorously

- Cost reduction through operational
excellence initiatives

Technology Obsolescence
Risk - Strategic alliance with educational/
research institutions

- Technology tie-up with global major

- Imbibing new and relevant technologies

Raw Material Risk - Alliance with steel producers

- Global sourcing

- Strategic sourcing

- Rationalisation and standardisation
of grades

- Move to products with higher value
addition

Competition Risk - Consistent quality and timely delivery

- Project range of offering leveraging all
businesses of the Company

- Innovate on products, process and
applications

- Leveraging metallurgy skills

- Enhancing competitiveness

- Lock-in with customers

11.3. Metal Formed Products

Risk Why considered as Risk

Product Risk - Revenues are model specific

User Industry - Dependence on auto sector
Concentration - impact of slowdown
Risk

Customer - Availability of alternative source
Retention Risk - Disruption in supplies

Entry of - Low technology barrier
competition - impact on profit

Entry of - Better product range
internationally - Tie-up with local player/end user
established - High quality image
players in
domestic market

Sourcing Risk - Dependence on few vendors for certain
components

Risk Mitigation Plan/Counter Measure

Product Risk - Increase in customer base and models

- Indigenisation of equipment

- Pursue options for other business using
the same facilities

- Model specific investments to be done
by OEMs

User Industry
Concentration Risk - Diversification into non-auto business

- Focus on industrial applications

- Develop range of power transmission
products

Customer Retention Risk - Cost competitiveness through Operational
Excellence initiatives

- Leverage design strength

- Leverage proximity to customer

- Build technology superiority

- Product - plant rationalisation

Entry of Competition - Leverage position with customer as
technology leader

- Continuous upgrading of technical
specifications

- Cost reduction

- Concentration in focus markets

Entry of internationally - Enhance product portfolio leveraging
acquisition
established players in
domestic market - Leverage leadership and competitive
position in industry

- Strengthen collaboration with R&D
team of customers

- Pursue opportunities in systems/components

- Pursue options for collaborating with
other multi- national player(s) of repute

Sourcing Risk - Vendor relationship building

- Enhancing vendor base, both locally as
well as overseas

- Leveraging strength of combined entity

11.4 General

Risk Why considered as Risk

HR Risk - Ability to attract talent, especially
people with domain knowledge for new
projects

- Retention of talent

Internal Control - Multiple locations
Risk

Currency Risk - Foreign currency exposure on exports,
imports and borrowings

IT Related Risk - Confidentiality, integrity and availability

Project - Delay in implementation
Management - Increase in cost
Risk - Potential delay in stabilisation of
production


Risk Mitigation Plan/Counter Measure

H R Risk - Corporate Brand Building

- Robust recruitment process

- Structured induction and on the job
training

- Coaching and team building

- Individual career and development plan

- Effective communication exercises

- Continuous engagement with identified
talent pool

- Deskill operations


Internal Control Risk - Review of controls in a structured manner,
at defined frequency

- Risk based audit of controls

Currency Risk - Early identification and monitoring of
exposures

- Hedging of exposures based on risk profile

IT Related Risk - Access controls

- Secure Network Architecture

- Infrastructure redundancies & disaster
recovery mechanism

- Audit of controls

Project Management Risk - Effective project management

- Pre-implementation planning

- Deployment of adequate resources

- Effective monitoring

12. Corporate Social Responsibility (CSR)

The Company, being part of the Murugappa Group, is known for its
tradition of philanthropy and community service. The Company''''s
philosophy is to reach out to the community by establishing
service-oriented philanthropic institutions in the field of education
and healthcare as the core focus areas. With the enactment of the CSR
provisions in the Companies Act, 2013, the Company has put in place a
CSR policy incorporating the requirements therein which is also
available on the Company''''s website at the following link,
http://www.tiindia.com/article/values/467.

As per the provisions of the Companies Act, 2013, the Company is
required to spend Rs.2.11 Cr. The Company has spent Rs.2.73 Cr. towards
CSR projects/ activities during 2015-16. The projects/activities were
identified with a view to make an impact in the areas of the Company''''s
operations by working closely with the local communities. Details are
furnished in the Annual Report of CSR activities for 2015-16 annexed to
and forming part of this Report as Annexure-B as well as in the
Company''''s website at the following link,
http://www.tiindia.com/article/values/547.

13. Corporate Governance

Your Company is committed to maintaining high standards of corporate
governance.

During the year under review, the Securities & Exchange Board of India
(SEBI) notified the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing Regulations") with the
objective of bringing the framework governing listed entities in line
with the Companies Act, 2013 and to consolidate all the SEBI
Regulations and Circulars hitherto governing the equity and the debt
segments of the capital market under a single document. As required
under the new SEBI Listing Regulations, the Company executed the
Uniform Listing Agreement with the National Stock Exchange of India and
the BSE Ltd.

The Company was wholly in compliance with the requirements of the
Listing Agreement with the Stock Exchanges (up to 30th November, 2015)
as well as the new SEBI Listing Regulations (from 1st December, 2015).

A report on corporate governance together with a certificate from the
Auditors is annexed in accordance with the terms of the SEBI Listing
Regulations and forms part of the Board''''s Report. The Managing Director
has submitted a certificate to the Board regarding the financial
statements and other matters in terms of Part B of Schedule II
[Corporate Governance] of the SEBI Listing Regulations.

The Report further contains details as required to be provided in the
Board''''s Report on the policy on Directors'''' appointment and remuneration
including the criteria, annual evaluation by the Board and Directors,
composition and other details of Board committees, implementation of
risk management policy, whistle-blower policy/vigil mechanism etc.

14. Human Resources

The Company firmly believes that human resources play a vital role in
its continued growth and success. The Company continued to invest in
the development of people capabilities during the year under review
with the objective of building an internal talent pipeline. Identified
promising employees were put through a program aimed at building their
capabilities to handle future leadership roles. The central recruitment
team sources and recruits the best talent for the various businesses of
the Company. Further, in continuation of the initiative taken during
last year, the Individual Development Plans (IDPs) of high-potential
employees were given sharp focus to address specific organisational
needs. Development Centre to identify the strengths, areas for
improvement and learning styles of such employees followed by a
business simulation program was conducted to enable them appreciate
holistic business perspective. A reverse mentoring programme has been
introduced in the Bicycles business where the senior leadership team
members are being mentored by their young professional colleagues. This
initiative is well received and appreciated by all concerned.

The Operational Excellence (OPEX) initiative to bring about process
excellence gained greater momentum and comprehensive implementation
during the year under review across the Company by involving each
employee. The OPEX team continues to actively support the Company''''s
businesses in the thrust areas viz., OPEX structure and systems and
culture.

Industrial relations remained cordial at all our units and long-term
settlements were successfully concluded at Tl Cycles of India, Ambattur
and NashikandTIDC India, Hyderabad.

Number of permanent employees on the rolls of the Company as on 31st
March 2016 was 3409.

The information relating to employees and other particulars required
under Section 197 of the Companies Act, 2013 read with Rule 5 of the
Companies (Appointment & Remuneration of Managerial Personnel) Rules,
2014 will be provided upon request. In terms of Section 136 of the
Companies Act, 2013, the Report and Accounts are being sent to the
Members excluding the information on employees, particulars of which
are available for inspection by the Members at the Registered Office of
the Company during business hours on all working days of the Company up
to the date of the forthcoming Annual General Meeting. If any Member is
interested in obtaining a copy thereof, such Member may write to the
Company Secretary in the said regard.

The disclosure with regard to remuneration as required under Section
197 of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is attached and forms
part of this Report as Annexure-C.

15. Prevention of sexual harassment at workplace

The Company has framed a policy on prevention of sexual harassment at
workplace in line with the requirement of the Sexual Harassment of
Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
An internal Complaints Committee (ICC) to redress complaints received
regarding sexual harassment has been constituted. The policy extends to
all employees (permanent, contractual, temporary and trainees).
Employees at all levels are being sensitised about the new Policy and
the remedies available thereunder. No complaints were received and
disposed off during the year under review.

16. Employee Stock Option Scheme

Details of the Company''''s Employee Stock Option Scheme as required under
the relevant SEBI Regulations are displayed in the Company''''s website at
the following link, http://www.tiindia.com/article/ values/554.

17. Directors'''' Responsibility Statement

The Board of Directors confirm that the Company has in place a
framework of internal financial controls and compliance system, which
is monitored and reviewed by the Audit Committee and the Board besides
the statutory, internal and secretarial auditors. Further, pursuant to
Section 134(5) of the Companies Act, 2013, the Board of Directors
confirm that:

(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there were no material
departures therefrom;

(ii) they have, in the selection of the accounting policies, consulted
the statutory auditors and have applied their recommendations
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2016 and of the profit of the Company for
the year ended on that date;

(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively during the year ended 31st March, 2016; and

(vi) proper system has been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively during the year ended 31st March, 2016.

18. Auditors

At the previous Annual General Meeting, M/s. S.R. Batliboi & Associates
LLP, Chartered Accountants were appointed as the Statutory Auditors of
the Company for a period of 5 years from the conclusion of the said
66th Annual General Meeting till the conclusion of the 71st Annual
General Meeting. In terms of the Companies Act, 2013, the appointment
of the said Statutory Auditors is subject to ratification each year.
Further, in terms of the Shareholders'''' approval, the remuneration
payable to the said Statutory Auditors in respect of their appointment
is to be fixed each year. Accordingly, the Board of Directors recommend
the ratification of the appointment of M/s. S.R. Batliboi & Associates
LLP, Chartered Accountants as the Statutory Auditors of the Company for
the period from the conclusion of the 67th Annual General Meeting to
the 68th Annual General Meeting on the terms of remuneration as set out
in the resolution contained the Notice of the Annual General Meeting.

Consequent to the applicability of cost audit under the Companies (Cost
Records and Audit) Amendment Rules, 2014, Mr. V Kalyanaraman, Cost
Accountant was appointed as the Cost Auditor for auditing the cost
accounting records maintained by the Company in respect of the
applicable products for the financial year ended 31st March, 2016. The
Cost Audit Report will be filed within the stipulated period of 180
days from the close of financial year.

In respect of the previous year, 2014-15, the Cost Audit and Compliance
Reports relating to Steel Products and Metal Formed Products, audited
by Mr. V Kalyanaraman, Cost Auditor, were filed electronically in XBRL
mode, on 18th September, 2015 viz., well within the limit of within 180
days from the end of the financial year stipulated by Ministry of
Corporate Affairs.

19. Related Party Transactions

All related party transactions that were entered into during the
financial year under review were on an arm''''s length basis and were in
the ordinary course of business. There are no materially significant
related party transactions during the year which may have a potential
conflict with the interest of the Company at large. Necessary
disclosures as required under the Accounting Standard (AS) 18 have been
made in the notes to the Financial Statements.

The policy on Related Party Transactions as approved by the Board is
uploaded and is available on the following link on the Company''''s
website, http://www.tiindia.com/article/values/476. None of the
Directors had any pecuniary relationships or transactions vis-a-vis the
Company.

20. Directors

Mr. N Srinivasan will retire by rotation at the ensuing Annual General
Meeting under Section 152 of the Companies Act, 2013 ("the Act") and
being eligible, he offers himself for re-appointment.

Mr. L Ramkumar was re-appointed by the Board of Directors, at the
meeting held on 30th March, 2016, as Managing Director of the Company,
for a fresh term, from 9th April, 2016 till the conclusion of the
Annual General Meeting of the Company in 2018 (both days inclusive).
Necessary resolution for the re-appointment of Mr. L Ramkumar, payment
of remuneration and other terms of his re-appointment thereof form part
of the Notice of the ensuing Annual General Meeting for Shareholders''''
approval.

The Board takes pleasure in recommending the appointment of Mr. N
Srinivasan as Director and the re-appointment of Mr. L Ramkumar as
Managing Director of the Company at the forthcoming Annual General
Meeting.

All the Independent Directors of the Company have furnished necessary
declaration in terms of Section 149(6) of the Act affirming that they
meet the criteria of independence as stipulated thereunder.

21. Declarations/Affirmations

During the year under review:

- there was no change in the Company''''s nature of business;

- there were no material changes and commitments which occurred during
the period under review affecting the Company''''s financial position; &

- there were no significant material orders passed by the regulators or
courts or tribunals impacting the Company''''s going concern status and
its operations in future.

22. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. R Sridharan of
Messrs R. Sridharan & Associates, a firm of Company Secretaries in
Practice to undertake the Secretarial Audit of the Company. The
Secretarial Audit Report is annexed herewith and forms part of this
Report as Annexure-D. No qualifications or observation or other remarks
have been made by the Secretarial Auditor in his said Report.

23. Annual Return

Extract of the Annual Return is annexed and forms part of this Report
as Annexure-E.

24. Key Managerial Personnel

Mr. L Ramkumar, Managing Director and Mr. S Suresh, Company Secretary
are the Key Managerial Personnel of the Company as per Section 203 of
the Companies Act, 2013.

Mr. L Ramkumar, Managing Director was also appointed by the Board of
Directors of Tl Tsubamex Private Limited, the Company''''s die
manufacturing joint venture with Tsubamex Co. Limited, Japan, as its
Managing Director in accordance with the requirements of the Companies
Act, 2013. His term of appointment is from 1st January, 2016 to 31st
March, 2018 (both days inclusive) without any remuneration.

Mr Arjun Ananth, Chief Financial Officer of the Company resigned from
the services of the Company for personal reasons and was relieved on
29th February, 2016.

25. Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo

The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts)
Rules, 2014 is annexed herewith and forms part of this Report as
Annexure-F.

The Directors thank all Customers, Vendors, Financial Institutions,
Banks, State Governments, Joint Venture Partners and Investors for
their continued support to your Company''''s performance and growth. The
Directors also wish to place on record their appreciation of the
contribution made by all the employees of the Company resulting in the
good performance during the year under review.

On behalf of the Board

M M Murugappan

Chairman
Chennai

3rd May, 2016

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

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