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Directors Report of Tata Elxsi Ltd.

Mar 31, 2023

1. Your Directors are pleased to present the Thirty Fourth Annual Report on the business and operations of the Company along with the Audited standalone financial statements for the financial year ended March 31, 2023.

2. FINANCIAL SUMMARY

The highlights of financial performance on standalone basis, for the year ended March 31, 2023, are summarised hereunder:

'' In crores

FY 2022-23

FY 2021-22

Revenue from operations

3,144.72

2,470.80

Other income (Net)

73.81

44.53

Total Income

3,218.53

2,515.33

Profit before financial expenses, depreciation and tax

1,035.09

810.25

Less: Financial expenses

16.2

9.43

Depreciation/ Amortisation

81.39

55.34

Profit before tax

937.50

745.49

Tax expenses

182.31

195.82

Profit after tax for the year

755.19

549.67

Other Comprehensive income

(5.65)

(2.01)

Net Profit for the year

749.54

547.66

Add: Profit brought forward

1,432.67

1,193.94

Less: Dividend

264.68

298.93

Transfer to General Reserve

10.00

10.00

Balance Profit carried to Balance Sheet

1,907.53

1,432.67

3. DIVIDEND

The Board of Directors are pleased to recommend a final dividend of 606% (''60.60 per share), subject to tax, for the financial year ended March 31, 2023, on 6,22,76,440 equity shares of ''10/- each fully paid-up, in comparison to 425% (''42.50 per share) on 6,22,76,440 equity shares of ''10/- each fully paid-up in the previous year. The said dividend on equity shares is subject to the approval of the Members at the ensuing Annual General Meeting ("AGM”) scheduled to be held on Tuesday, July 04, 2023. If approved, this will involve an outflow of ''377.4 crores, compared to ''264.69 crores, in the previous year.

According to the Finance Act, 2020, dividend income will be taxable in the hands of the

Members w.e.f. April 01, 2020, and the Company is required to deduct tax at source from the dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

The Company’s Dividend Distribution Policy, as adopted in line with Regulation 43A of the Listing Regulations is available on the website of the Company at the link: www.tataelxsi.com/ investors/policies-and-disclosures.

4. TRANSFER TO RESERVES

Your Directors have approved a transfer of ''10 crores to the General Reserves for the year ended March 31, 2023, as against an amount of ''10 crores transferred in the previous year.

5. REVIEW OF OPERATIONS AND PERFORMANCE

The total income during the year under review increased by 27.96% from ''2,515.33 crores in the previous year to ''3,218.53 crores. The Profit Before Tax (PBT) was ''937.50 crores as against ''745.48 crores in the previous year. The Profit After Tax (PAT) was ''755.19 crores against ''549.67 crores in the previous year.

6. SHARE CAPITAL

As on March 31, 2023, the authorised share capital of the Company consisted of 7,00,00,000 equity shares of ''10 each, and the paid-up equity share capital as on March 31, 2023, consisted of 6,22,76,440 equity shares of ''10 each. During FY 2022-23, the Company has not issued any shares, securities / instruments convertible into equity shares, sweat equity shares and shares with differential voting rights.

During FY 2022-23, the Company had sought approval of the Members through Postal Ballot Notice dated January 25, 2023 for the adoption and implementation of the Tata Elxsi Limited Performance Stock Option Plan 2023 (hereinafter referred to as "PSOP 2023” or "the Plan”) for grant of 3,11,000 Performance Stock Options to the eligible employees of the Company. The Members, vide special resolution passed through Postal Ballot on March 04, 2023, approved the adoption and implementation of PSOP 2023. PSOP 2023 seeks to drive long-term performance, retain key talent, and to provide an opportunity for the employees to participate in the growth of the Company.

The Plan has been formulated in accordance with the provisions of the Companies Act, 2013 (''the Act’) and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB&SE Regulations”). The Nomination and Remuneration Committee ("NRC”) administers the Plan and functions as the Compensation Committee for the purposes of SBEB&SE Regulations.

In compliance with the requirements of the SBEB&SE Regulations, a certificate from Secretarial Auditors, confirming the implementation of the Plan in compliance with the SBEB&SE Regulations and shareholder’s resolution, will be available for electronic inspection by the Members during the AGM of the Company. Members desirous of inspecting the certificate, may follow the procedure listed down in the Notes to the Notice of the Annual General Meeting. During the year under review, there have been no grants made by the Company to any of the eligible employees of the Company. The eligible employees shall be granted Performance Stock Options (PSOP), as determined by the Nomination and Remuneration Committee of the Board, which will vest as per the approved vesting schedule and are be exercisable into fully paid-up equity shares of ''10/- (Rupee Ten Only) each of the Company, on the terms and conditions as provided under the Plan, in accordance with the provisions of the applicable laws and regulations for the time being in force. During the year under review, no grants were made to eligible employees of the Company.

The statutory disclosures as mandated under the Act and SBEB&SE Regulation and a certificate from Secretarial Auditors, confirming implementation of the Scheme in accordance with SBEB&SE Regulations and shareholder’s resolution have been hosted on the website of the Company at https://tataelxsi.com/investors/ policies-and-disclosures.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the Listing Regulations, a separate section on Management Discussion and Analysis Report is annexed to this Directors’ Report.

Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. N Ganapathy Subramaniam, Director retires by rotation and being eligible, offers himself for re-appointment. During the year, and under the approval granted by the Members at the 33rd Annual General Meeting of the Company, Mr. Manoj Raghavan was re-appointed as the Chief Executive Officer and Managing Director of the Company for a further period of five years with effect from October 02, 2022, up to October 01, 2027.

During the year under review, five (5) Board meetings were held. The details of the Board Meeting / Committee Meetings and the attendance of the Directors are provided in the Corporate Governance Section of the Annual Report. The calendar of meetings for FY 2022-23 had been circulated to all the directors detailing the schedule of Board and Committee meetings during FY 2022-23.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations”). The Directors have further confirmed that they are not debarred from holding the office of the director under any SEBI order or any other such authority. During FY 2022-23, there here has been no change in the circumstances affecting their status as Independent Directors of the Company. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013, a seperate meeting of the Independent Directors was held on April 18, 2022.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and

reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committee of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2023 are Mr. Manoj Raghavan, Managing Director and CEO; Mr. Gaurav Bajaj, Chief Financial Officer and Ms. Cauveri Sriram, Company Secretary & Compliance Officer.

8. DIRECTORS’ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2022-23.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures.

b. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit for that period.

c. The Directors had 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 and for preventing and detecting fraud and other irregularities.

d. The Directors have prepared the annual accounts on a going concern basis.

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

9. PARTICULARS ON REMUNERATION

The statement containing particulars of the top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this Report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. The said Statement is also open for inspection through electronic mode up to the date of the ensuing Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under:

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam*

-

Mrs. S. Gopinath

27.32

Mr. Sudhakar Rao

26.16

Prof. Anurag Kumar

21.51

Mr. Ankur Verma*

-

Executive Director

Mr. Manoj Raghavan, MD & CEO

65.00

* In line with the internal guidelines of the Company, no payment is made towards commission to the Non-Executive Directors of the Company, who are in full-time employment with any other Tata company and hence not stated.

" Since the remuneration is only for part of the year, the ratio of their remuneration to median remuneration and percentage increase in remuneration is not comparable and hence, not stated

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. N G Subramaniam*

-

Mrs. S. Gopinath

14%

Mr. Sudhakar Rao

12%

Prof. Anurag Kumar

14%

Mr. Ankur Verma*

-

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. Manoj Raghavan, MD & CEO

30%

Mr. Gaurav Bajaj, CFO"

-

Ms. Cauveri Sriram, Company Secretary"

-

*In line with the internal guidelines of the Company, no payment is made towards commission to the Non-Executive Directors of the Company, who are in full-time employment with any other Tata company and hence not stated.

" Since the remuneration is only for part of the year, the ratio of their remuneration to median remuneration and percentage increase in remuneration is not comparable and hence, not stated (ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year.

(iii) The percentage increase/(decrease) in the median remuneration of employees in the financial year: (11.12%)

During the year, the Company onboarded significant number of freshers which resulted in decrease of overall median remuneration.

(iv) The number of permanent employees on the rolls of the Company: 11,254

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than the managerial personnel in FY 2022-23 was 9.1%. The percentage increase/(decrease) in the managerial remuneration for the year was 20%

(vi) The Company hereby affirms that the remuneration is as per the Remuneration Policy of the Company, which was adopted by the Board and is also laid out in the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the matters related to remuneration to the Managing Director, Key Managerial Personnel and other officers. The Charter lays down the rights, roles and responsibilities of the NRC. A Policy on Board diversity and Governance Guidelines have also been adopted by the Board, on the recommendation of NRC. The Guidelines lay down the following:

• Composition and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing Director, Executive Director, Non-Executive Directors, Independent Directors, their term, tenure and directorship)

> Board appointment

> Directors’ Remuneration (Guided by the Remuneration Policy)

> Subsidiary Oversight

> Code of Conduct (Managing Director, Executive Director, Non-Executive Directors, Independent Directors)

> Board effectiveness review

> Mandate of the Board Committee

The Remuneration Policy and the Charter for NRC are available at www.tataelxsi.com/investors/policies-and-disclosures.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars pursuant to Section 134(m) of the Companies Act, 2013 and read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is attached with this report as Annexure A.

11. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

I n terms of Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (''Listing Regulations’) the Business Responsibility and Sustainability Report, in the prescribed format, forms an Integral Part of the Annual Report.

12. RISK MANAGEMENT POLICY

The Board has adopted a Risk Management Policy to identify and categorise various risks, implement measures to minimise impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis including to review and monitor the cyber security measure. Further details on the Risk Management Framework is provided in the Corporate Governance Report, forming part of the Annual Report.

13. CORPORATE SOCIAL RESPONSIBILITY

In line with Section 135 of the Companies Act, 2013 read with applicable rules made thereunder, Corporate Social Responsibility (CSR) Committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board, based on the recommendation of the CSR Committee, has formulated and adopted a CSR Policy, in line with Section 135 of the Companies Act, 2013 read with the applicable rules made thereunder, which is available on the website of the Company at www.tataelxsi.com/ investors/policies-and-disclosures.

The CSR objectives are designed to serve societal, local and national goals in the locations we operate, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 (as amended) is annexed as Annexure B. The details relating to the composition of the CSR Committee is provided in the Corporate Governance Report, forming part of the Annual Report.

14. DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

15. CORPORATE GOVERNANCE

In terms of Regulation 34(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Corporate Governance Report, Management Discussion & Analysis Report, and the Auditors’ Certificate regarding Compliance to Corporate Governance requirements forms part of this Annual Report.

16. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered during the year under review were on an arm’s length basis and in the ordinary course of business and are in compliance with the applicable provisions of the Act and the Listing Regulations. In terms of Section 188 of the Act and other applicable provisions, if any, read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended till date and Regulation 23(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

("Listing Regulations”), the Company had sought the approval of Members at the 32nd AGM for transactions with Jaguar Land Rover Limited, a related party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, for providing Automotive Design & Engineering support, up to a maximum aggregate value of ''250 crores per year, for each of the financial years 2021-22 and 2022-23.

Further, the limits as approved in the 32nd AGM were revised vide approval granted by the Members through postal ballot on February 26, 2022, from ''250 crores per annum for each of the financial years 2021-22 and 2022-23, to up to a maximum aggregate value of ''325 crores per annum for the financial year 2021-22 and ''450 crores per annum for the financial year 2022-23 for related party transactions with Jaguar Land Rover Limited.

The Company proposes to enter into material related party transactions with Jaguar Land Rover Limited during FY 2023-24, for which the approval of Members is sought at this Annual General Meeting, in compliance with Section 188 of the Companies Act, 2013 read with applicable rules made thereunder and Regulation 23(4) of the Listing Regulations.

The Company has formulated and adopted a policy on dealing with related party transactions, in line with Regulation 23 of the Listing Regulations, which is available on the website of the Company at https://www.tataelxsi.com/ investors/policies-and-disclosures.

As a part of the mandate under the Listing Regulations and the terms of reference, the Audit Committee undertakes quarterly review of related party transactions entered into by the Company with its related parties. Pursuant to Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013, the Audit Committee has granted omnibus approval in respect of transactions which are repetitive

in nature, which may or may not be foreseen, not exceeding the limits specified thereunder. The transactions under the purview of omnibus approval are reviewed on quarterly basis by the Audit Committee.

Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of contracts / arrangements entered with related parties in prescribed Form AOC-2, is enclosed with this Report as Annexure C.

17. SECRETARIAL AUDIT AND ANNUAL CERTIFICATION

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Jayashree Parthasarathy of M/s. Jayashree Parthasarathy & Co., a Company Secretary in practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Auditor along with the certificate of non-disqualification of Directors for the year ended March 31, 2023 is annexed to the Directors’ Report as Annexure D.

18. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2022-23 is available on Company’s website at https://www.tataelxsi.com/investors/policies-and-disclosures.

19. PREVENTION OF SEXUAL HARASSMENT

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for prevention and redressal of

complaints under the above Act. The Company has constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Three (3) complaints were received by the local Internal Complaints Committee during the year under review, the same has been redressed to the satisfaction of the complainant.

20. VIGIL MECHANISM

Your Company has established a "Vigil Mechanism” for its employees and Directors, enabling them to report any concerns of unethical behaviour, suspected fraud or violation of the Company’s ''Code of Conduct’.

To this effect, the Board has adopted a ''Whistle Blower Policy’ (WBP), which is overseen by the Audit Committee. The policy inter alia provides safeguards against victimisation of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review. The said policy has been posted on our intranet where all the employees have access. The Company conducts ''Policies Awareness Campaign’ regularly for its employees at its various centers and the WBP features in these campaigns.

21. OTHERS

There are no loans, guarantees and investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review. Your Company has neither accepted nor renewed any deposit during the year under review. There are no material changes and commitments affecting the Company’s financial position between the end of the financial year to which this financial statement relates and the date of this report.

The Unclaimed Dividend in respect to the financial year 2015-16 is due for remittance to Investors’ Education & Protection Fund (IEPF) on

August 30, 2023 in terms of Section 125 of the Companies Act, 2013.

The Company has constituted an Audit Committee in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations. The Composition of the Audit Committee in terms of Section 177(8) is disclosed and is available in the Corporate Governance Report forming part of the Annual Report. During FY 2022-23, there are no such instances where the Board has not accepted the recommendations of the Audit Committee.

Considering the services rendered by the Company, the Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013.

There are no frauds reported by the Auditors under Section 143(12) of the Companies Act, 2013. There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

22. AUDITORS

The Members of the Company at the 33rd AGM held on June 23, 2022, approved the appointment of M/s BSR & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W - 100022) as the statutory auditors of the Company for a period of 5 years commencing from the conclusion of the 33rd AGM, until the conclusion of the 38th AGM of the Company to be held in 2027.

23. PERFORMANCE EVALUATION

The Company has laid down a process for performance evaluation of the Board and its Committees as well as a framework for evaluation of the performance of each of the Directors. The evaluation criteria include inter alia, structure of the Board, qualifications, experience and competency of Directors, diversity in Board, effectiveness of the Board process, information

and functioning, Board culture and dynamics, quality of relationship between the Board and management, meetings of the Board, including regularity and frequency, discussion and dissent, corporate culture and values, governance and compliance, evaluation of risk amongst others. The criteria is based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. The evaluation process is conducted and monitored by the Chairperson, Nomination & Remuneration Committee (''NRC’) in consultation with the members of the Committee. Upon the receipt of feedback from Directors, the Chairperson, NRC conducts a one to one meeting with the Members. Thereafter, the Chairperson, NRC briefs the Chairman of the Board on the outcome, which in subsequently discussed at the Board meeting.

For the FY 2022-23, the performance evaluation has been conducted as per the process adopted by the Company, which is detailed out above.

24. SECRETARIAL STANDARDS

Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

25. ACKNOWLEDGEMENTS

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

For and on behalf of the BoardN. G. Subramaniam

Chairman

Bengaluru, May 18, 2023


Mar 31, 2022

1. Your Directors are pleased to present the Thirty Third Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2022.

2. Result of Operations - Extract

Rs. In crores

FY 2021-22

FY 2020-21

Revenue from operations

2,471

1,826

Other income( Net)

44

40

Total Income

2,515

1,866

Profit before financial expenses, depreciation

810

562

Less: Financial expenses

9

6

Depreciation/ Amortisation

55

44

Profit before tax

745

512

Tax expenses

196

144

Profit after tax for the year

549

368

Other Comprehensive income

(2)

(3)

Net Profit for the year

547

365

Add: Profit brought forward

1,194

942

Less: Dividend

299

103

Transfer to General Reserve

10

10

Balance Profit carried to Balance Sheet

1,432

1,194

3. Dividend

Your Directors recommend for your approval, a final dividend of 425% (Rs. 42.50 per share), subject to tax for the year ended March 31, 2022, on 6,22,76,440 equity shares of Rs. 10/- each fully paid-up, compared to 480% (Rs. 48/- per share) on 6,22,76,440 equity shares of Rs. 10/- each fully paid-up in the previous year.

This will involve an outgo of Rs. 264.69 crores, compared to Rs. 298.93 crores, in the previous year. The Company’s Dividend Distribution Policy (DDP) is available in the Investors section of the company website: www.tataelxsi.com/ DividendDistributionPolicy

4. Reserves

Your Directors have approved a transfer of Rs. 10 crores to the General Reserves for the year ended March 31, 2022, as against an amount of Rs. 10 crores transferred in the previous year.

5. Review of Operations

The total income during the year under review increased by 34.8% from Rs. 1,866 crores in the

previous year to Rs. 2,515 crores. The Profit Before Tax (PBT) was Rs. 745 crores against Rs. 512 crores in the previous year. The Profit After Tax (PAT) was Rs. 547 crores against Rs. 365 crores in the previous year.

6. Management Discussion and Analysis is included as Annexure B to the Directors’ ReportDirectors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. Ankur Verma retires by rotation and being eligible, offers himself for re-appointment.

The Board on the recommendation of the Nomination Remuneration Committee has appointed Mr. Gaurav Bajaj as the Chief Financial Officer and KMP of the Company, with effect from August 01, 2021, in place of Mr. H.V. Muralidharan who superannuated on July 31, 2021.

The Board at the Meeting held on January 18, 2022, on the recommendation of the Nomination Remuneration Committee appointed Ms. Cauveri Sriram as the Company Secretary & Compliance

Officer and KMP of the Company with effect from March 01, 2022, in place of Mr. G. Vaidyanathan who superannuated from the services of the Company on February 28, 2022.

During the year under review, five (5) Board meetings were held and have been well attended by the Directors. The calendar of meetings for the year 2021-22 had been circulated to all the Directors detailing the schedule of Board and Committee meetings during 2021-22.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors’ have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations”). During the year 21-22, there has been no change in the circumstances affecting their status as Independent Directors’ of the Company. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013 the Independent Directors had a separate meeting on April 21, 2021.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committee of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2022 are Mr. Manoj Raghavan, M.D and CEO Mr. Gaurav Bajaj, Chief Financial Officer and Ms. Cauveri Sriram, Company Secretary & Compliance Officer.

7. Directors’ Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors

and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2021-22.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures.

b. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

c. The Directors had 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 and for preventing and detecting fraud and other irregularities.

d. The Directors have prepared the annual accounts on a going concern basis.

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

8. Particulars on Remuneration

The statement containing particulars of the top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said Statement is also open for inspection at the Registered Office of the Company, up to the date of the ensuing Annual General Meeting. Any member interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under:

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam*

-

Mrs. S. Gopinath

21.33

Mr. Sudhakar Rao

20.78

Prof. Anurag Kumar"

16.78

Mr. Ankur Verma*

-

Executive Directors

Mr. Manoj Raghavan, MD & CEO

44.44

* In line with the internal guidelines of the Company, no payment is made towards commission to the Non-Executive Directors of the Company, who are in full-time employment with any other Tata company and hence not stated.

" Since the remuneration is only for part of the year, the ratio of their remuneration to median remuneration and percentage increase in remuneration is not comparable and hence not stated

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. N G Subramaniam*

-

Mrs. S. Gopinath

20%

Mr. Sudhakar Rao

39%

Prof. Anurag Kumar"

Mr. Ankur Verma*

Mr. Manoj Raghavan, MD & CEO

47%

Mr. Gaurav Bajaj, CFO"

Ms. Cauveri Sriram, Company Secretary"

**In line with the internal guidelines of the Company, no payment is made towards commission to the Non-Executive Directors of the Company, who are in full-time employment with any other Tata company and hence not stated.

" Since the remuneration is only for part of the year, the ratio of their remuneration to median remuneration and percentage increase in remuneration is not comparable and hence, not stated (ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year.

(iii) The percentage increase in the median remuneration of employees in the financial year: 10%

(iv) The number of permanent employees on the rolls of the company: 9,376 (including consultants)

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than the managerial personnel in 2021-22 was 12%.

Percentage increase/(decrease) in the managerial remuneration for the year was 32.50%

(vi) The Company hereby affirms that the remuneration is as per the remuneration policy of the company, which was adopted by the Board and is also laid out in the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to the Managing Director, Key Managerial Personnel and other officers. The Charter lays down the rights, roles and responsibilities of the NRC. A Policy on Board diversity and Governance Guidelines have also been adopted by the Board, on the recommendation of NRC. The Guidelines lay down the following:

♦ Composition and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing Director, Executive Director, Non-Executive Directors, Independent Directors, their term, tenure and directorship)

> Board appointment

> Directors’ Remuneration (Guided by the Remuneration Policy)

> Subsidiary Oversight

> Code of Conduct (Managing Director, Executive Director, NonExecutive Directors, Independent Directors)

> Board effectiveness review

> Mandate of the Board Committee The Remuneration Policy and the Charter for NRC are available at www.tataelxsi. com/NRC-Charter

9. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars pursuant to section 134 (m) of the Companies Act, 2013 and read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is attached with this report as Annexure-A.

10. Business Responsibility Report (BRR)

In terms of Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (''Listing Regulations’) the Business Responsibility Report forms part of the Annual Report.

11. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorise various risks, implement measures to minimise impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis including to review and monitor the cyber security measure. More details are provided in the Management Discussion and Analysis and Corporate Governance Report.

12. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company’s website at www.tataelxsi. com/corporatesocial-responsibility.

The CSR objectives are designed to serve societal, local and national goals in the locations we

operate, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-B. The detail of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

13. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Corporate Governance Report, Management Discussion & Analysis, and the Auditors’ Certificate regarding Compliance to Corporate Governance requirements are part of this Annual Report.

14. Related Party Transactions

All Related Party Transactions that were entered during the financial year were on an arm’s length basis and in the ordinary course of business and is in compliance with the applicable provisions of the Act and the Listing Regulations.

In terms of Section 188 of the Act and other applicable provisions, if any, read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended till date and Regulation 23(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations”), the Company had sought the approval of shareholders at the 32nd AGM for transactions with Jaquar Land Rover Limited, a related party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, for providing Automotive Design & Engineering support, up to a maximum aggregate value of Rs. 250 crores per year, for each of the financial years 2021-22 and 2022-23.

Further, the limits as approved in the 32nd AGM were revised vide postal ballot dated December 17, 2021 from Rs. 250 crores per annum for each of the financial years 2021-22 and 2022-23, to up to a maximum aggregate value of Rs.325 crores

per annum for the financial year 2021-22 and Rs. 450 crores per annum for the financial year 2022-23 for related party transactions with Jaquar Land Rover Limited.

15. Secretarial Audit and Annual Certification

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Jayashree Parthasarathy of M/s Jayashree Parthasarathy & Co, a Company Secretary-in-Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Auditor along with the certificate of non-disqualification of Directors for the year ended March 31, 2022 is annexed to the Directors’ Report as Annexure - C.

16. Extract of annual return

In terms of the Companies Act, 2013 as amended, the Annual Return is available on www.tataelxsi. com/AnnualReturn.

17. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for prevention and redressal of complaints under the above Act. 3 (three) complaints were received by the local Internal Complaints Committee during the year under review, the same has been redressed to the satisfaction of the complainant.

18. Vigil Mechanism

Your Company has established a "Vigil Mechanism” for its employees and Directors, enabling them to report any concerns of unethical behaviour, suspected fraud or violation of the Company’s ''Code of Conduct’.

To this effect, the Board has adopted a ''Whistle Blower Policy’ (WBP), which is overseen by the Audit Committee. The policy interalia provides safeguards against victimisation of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review. The said policy has been posted on our intranet where all the employees have access. The Company conducts ''Policies Awareness Campaign’ regularly for its employees at its various centers and the WBP features in these campaigns.

19. Others

There are no loans, guarantees and investments made by the Company u/s 186 of the Companies Act, 2013 during the year under review. Your Company has neither accepted nor renewed any deposit during the year under review. There are no material changes and commitments affecting the Company’s financial position between the end of the financial year to which this financial statement relates and the date of this report.

The Unclaimed Dividend in respect to the financial year 2014-15 is due for remittance to Investors’ Education & Protection Fund (IEPF) on August 30, 2022 in terms of Section 125 of the Companies Act, 2013.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has during the year transferred 18,420 equity shares pertaining to those shareholders who have not claimed their dividend for 7 consecutive

years since 2014, to the IEPF account on October 22, 2021.

20. Auditors

Members of the Company at the AGM held on July 27, 2017, approved the appointment of M/s BSR & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W - 100022) as the statutory auditors of the Company for a period of 5 years commencing from the conclusion of the 28th AGM, until the conclusion of the 33rd AGM of the Company to be held in 2022.

The Board approved the re-appointment of M/s BSR & Co. LLP, Chartered Accountants based on the recommendations of the Audit Committee and the same is subject to the approval of the Members of the Company.

The necessary resolutions for re-appointments of M/s BSR & Co. LLP form part of the notice convening the 33rd AGM of the Company.

21. Acknowledgements

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

For and on behalf of the Board

N. G. Subramaniam

Chairman

Bengaluru, April 20, 2022


Mar 31, 2021

1. Your Directors are pleased to present the Thirty Second Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2021.

2. Result of Operations - Extract

'' In Crores

2020-21

2019-20

Revenue from operations

1,826

1,610

Other income (Net)

40

58

Total Income

1,866

1,668

Profit before financial expenses, depreciation

562

401

Less: Financial expenses

6

6

Depreciation/ Amortization

44

43

Profit before tax

512

352

Tax expenses

144

96

Profit after tax for the year

368

256

Other Comprehensive income

-3

-4

Net Profit for the year

365

252

Add: Profit brought forward

942

804

Transition impact of Ind As 116

-

3

Less: Dividend and Dividend Tax*

103

101

Transfer to General Reserve

10

10

Balance Profit carried to Balance Sheet

1,194

942

*Pertains to previous years

3. Dividend

Your Directors recommend for your approval, final dividend of 240 % ('' 24 per share), subject to tax, and a one-time special dividend of 240% ('' 24 per share) subject to tax, for the year ended March 31, 2021 on 6,22,76,440 equity shares of '' 10/- each fully paid-up, aggregating to 480% ('' 48 per share), compared to 165% ('' 16.50/- per share) on 6,22,76,440 equity shares of '' 10/- each fully paid-up in the previous year.

This will involve an outgo of '' 298.93 crores, compared to '' 102.76 crores, in the previous year.

The Company''s Dividend Distribution Policy (DDP) is available in the Investors section of the company website: www.tataelxsi.com/DividendDistributionPolicy

4. Reserves

Your Directors have approved a transfer of '' 10 Crores to the General Reserves for the year ended March 31, 2021, as against an amount of '' 10 crores transferred in the previous year.

5. Review of Operations

The total income during the year under review increased by 12.0% from '' 1668 crores in the previous year to '' 1866 crores.

The Profit Before Tax (PBT) was '' 512 crores against '' 352 crores in the previous year. The Profit After Tax (PAT) was '' 365 crores against '' 252 crores in the previous year.

During the year under review, despite the unprecedented situation where the entire world was engulfed with the pandemic, your Company and its employees immediately adapted to the new normal and continued seamless -customer commitments and promises to its customers.

6. Management Discussion and Analysis

Industry Outlook

The year 2020 was disrupted by pandemic-related sharp declines in growth across industries. When the global economy shrank by 3.3% YoY in 2020 (IMF), India''s IT & ITeS sector shone brightly, growing by 2.3% YoY (Nasscom) thanks to faster digital technology adoption. According to Nasscom''s Strategic Review 2021, India''s technology sector contributed 8% of national GDP and 52% of services exports.

The rate of digital technology adoption has increased across industries, resulting in rapid revenue growth for technology service providers. Enterprises are diverting their CAPEX budgets to technology and prioritizing digitization in the face of a pandemic. According to Nasscom''s CEO survey, 70% of businesses expect increased investment in global technology in 2021. With

increased hyper-digitization and technology adoption across industries, growth verticals such as healthcare, pharma, medical devices, software & internet, and consumer electronics are expected to accelerate in 2021.

In 2021, depressed economic activity and wages, increasing interest rates and geopolitical tension, foreign exchange rate volatility, and a downturn in some industries such as cars, travel, and tourism would all pose challenges to development. However, due to advanced economies'' resilience against recession and a better-than-expected recovery in emerging markets, a faster vaccination, central bank monetary support, and fiscal stimulus across major economies have significantly reduced the magnitude of the economic downturn than previously predicted. We expect this growth to intensify in the coming months, resulting in global economic normalization.

According to Zinnov, the global ER&D was USD 1.4 Trillion and is expected to grown by a CAGR of 11% to 1.9 Trillion by 2023.

While Manufacturing verticals such as Aerospace, Automotive, and Industrial bore the brunt of the pandemic and witnessed a change in ER&D priorities, 5G, Digital Thread, and Sustainable engineering are the key pillars that will drive digital engineering spend going forward.

The rapid adoption of intelligent, connected and smart initiatives such as Tele X, intelligent workplaces, contactless commerce, leveraging new age technologies such as Artificial intelligence, AR/VR, IoT is set to further fuel ER&D spend across verticals and make enterprises anti-fragile.

Covid-19 triggered significant disturbances in the automotive industry as well. Lockdowns resulted in a substantial drop in car sales in the first half of FY21. The selling of LV/passenger cars has declined sharply in developed/larger economies such as the United States, the United Kingdom, and China and major EU economies such as Germany, France, Italy, Spain, and others. The second half of FY21 saw a modest rebound, but the total car and SUV sales fell by 16% to 76.5 million in 2020.

As per Moody''s stable outlook, auto demand is likely to improve in 2021, but at a slower pace, which is expected to continue next year with mid-to-high single-digit sales growth in 2022. China, the world''s largest market, witnessed 10% contraction in auto sales in 2020, and the other geographies also witnessed similar dip. However, demand began to return to normal levels in H2 2020 and it is expected to see 2.5% YoY growth in auto unit sales in 2021.

One of the few sectors that was positively affected by the pandemic was the Media and Communications

sector. With a surge in data & telecom services due to global lockdowns, the Media & Communications sector is expected to grow by a CAGR of 4% between 2020-2023. Furthermore, investments are expected to increase in OTT, 5G, SDN/NFV and AI. The pandemic acted as a trigger, accelerating several developments that were already in motion. With movie theatres closing, OTT (direct-to-consumer through streaming platforms) saw a healthy increase in streaming content consumption, subscription services, and ad-supported models. With the increased adoption of remote working teams and the availability of successful digital collaborative tools, demand for services such as in-home access, home broadband, and over-the-top (OTT) services is increasing. Consumer and enterprise adoption of innovative wireless technology like 5G has increased due to the COVID-19 pandemic, as has customers'' desire to try new content options.

According to numerous research and industry data, pandemic-driven lockdowns and social distancing recommendations have profoundly rooted digital technologies in consumers'' attitudes and day-to-day lives. Consumers are collaborating with colleagues, staying in touch with friends and family, and consulting with physicians digitally. They make unprecedented use of mobile banking and contactless payment apps.

COVID has served as an inflection point for digital transformation across the healthcare ecosystem. Transforming the patient experience value chain is top priority for providers. The uberization of patient care is the biggest COVID led disruption.

Healthcare payers are accelerating digital investments to automate the trifecta of sales, operations, and services. Medical devices firms are unlikely to witness a significant change in their R&D roadmaps; their focus on connected devices will receive an impetus. The global health spending is expected to rise at a 3.9% CAGR during 2020-2024, led by Asia and Australia (5.3%) and the economies of Central and Eastern Europe (5.2%).

A new trend has emerged during this pandemic phase: creating digitally enabled, on-demand, and seamlessly connected consumer experiences that drive doctor-patient interactions. Consumers are increasingly turning to technology to track their well-being, track their fitness, and order medicines. Consumers are more comfortable than ever before to use virtual visits with doctors and adopt tools for consultation, and this trend is expected plan to continue even post Covid. Consumers'' attention has turned to disease prevention by fostering healthier habits, vitality, well-being, and early detection.

Cloud computing, artificial intelligence, and virtual care delivery systems are becoming increasingly important in the digital transformation of healthcare around the world. Because of its ability to process and distribute data effectively and collaboratively, cloud computing technology will help health systems develop their IT infrastructure and lower costs. AI employs algorithms and machine learning (ML) to analyze and interpret data, provide customized interactions, and automate routine and costly healthcare operations.

Business Analysis

Your Company reported operating revenues of 1826.2 crores in FY 2021, an increase of 13.4% year on year. This growth was mostly volume-led with constant currency growth of 8% YoY Our operating profit (EBITDA) was 522.4 crores, up 52.3% year on year, with EBITDA margins of 28.6%, up 730 bps. Profit before tax was 511.9 crores, up 45.3% year on year and surpassing 500 crores for the first time in the Company''s history. The Company''s net profit for the year was '' 368.1 crore, up 43.7% year on year.

The onsite offshore revenue mix has also shifted this year, with the offshore share rising by 920 bps to 66.9%. Operating margins have also improved as a result of this.

Over the year, the Company hired a net of 785 new engineers and saw its attrition rate drop by 360 bps (6.6% for FY21).

Your Company has been diligently working to reduce client concentration which is evident from FY21 results. The contribution of the top client in operating revenues has declined from 16.1% in FY 2020 to 11.8% in FY 2021. The top 5 clients and top 10 clients in operating revenues have also reduced by 320 bps and 370 bps respectively in FY2021.

Our geographical revenue contribution has also further diversified, with US contributing to 36.8%, Europe 36.1% and India 13.3%.

Software Development and Services

During the financial year 2021, the Software Development and Services business generated revenues of '' 1,781.6 crores, registering a growth of 14.1% year on year. The segment profit increased by 34.7% from '' 409.6 crores in the previous year to '' 551.8 crores in FY21.

This segment witnessed healthy growth in FY 2020-21, supported by all key segments. The transportation business has been showing a sustained recovery while the media & communications business and healthcare business are growing at a steady pace. Our efforts to diversify revenues by redeploying the available resources and capabilities into other adjacencies, i.e., off-road and rail, accelerating new customer acquisition, and diversification strategies to de-risk revenue dependency from customer/ segment/ region are yielding results.

The software development and services segment consists of two business divisions; Embedded Product Design and Industrial Design & Visualization that provide technology and design services to customers across industries.

Embedded Product Design

The Embedded Product Design (EPD) division provides technology consulting, new product design, development, and testing services for the Transportation, Media, Broadcast & Communication and Healthcare. During the year 2020-21, this division generated revenues of '' 1611 crores, registering a growth of 14.8% Y-o-Y.

In the latest Zinnov Zones 2020 Study, your Company was ranked in the ''Leadership Zone'' across multiple sectors. Your Company''s extensive and well-established ER&D services were recognized in the survey, and it was rated in the Leadership Zone in the Automotive and Media & Communications industries. With three decades

of experience in providing product design, technology development, testing, and systems integration services, Tata Elxsi has an unparalleled depth of industry expertise in each of these segments. According to the report, Tata Elxsi was also recognized as a well-established niche player in advanced technologies such as Digital Engineering, Artificial Intelligence, and the Internet of Things.

The key sectors addressed by EPD include: Transportation

Your Company is a preferred partner for leading car manufacturers, OEMs, and suppliers to develop electronics and software for powertrain, infotainment, connectivity, active safety, and comfort. Tata Elxsi provides R&D, design, and product engineering services to leading global automotive and transportation industry players. This business segment contributed to 41.2% of EPD revenues.

Consumer demand is driving the emergence, progress, and adoption of new trends and technologies in the global transportation sector. Market preferences are transitioning to 24/7 communication in this digital age. Connected devices are now supporting telematics, infotainment, navigation services, vehicle control, ADAS (Advanced Driver Assistance Systems), and autonomous driving, among other services, in the automotive world. Digitally connected vehicles are incredible ways for brands and OEMs to understand their purchasers and their preferences better, nurture this relationship all through the possession lifecycle, and set out open doors for new income streams for themselves and the entire value chain through this association. Tata Elxsi plays at this specific intersection, taking knowledge and technology from various industries and blending it with award-winning design thinking and digital capabilities to generate value.

Automotive OEMs and component manufacturers are growing their R&D expenditures on digital innovation initiatives to develop autonomous, ADAS, and industry 4.0 capabilities. Digital ER&D (US$ 133.5 bn) constitutes a significant part of global automotive ER&D spend.

Though the Automotive ER&D segment registered an 8% decline in spend in 2020, it is expected to reach US$ 157 bn by 2023.

During FY2020-21, your Company announced the opening of the Global Engineering Center (GEC) with Schaeffler Technologies AG & Co. KG, a world leader in providing mechatronics solutions for the Transportation industry. Tata Elxsi is the global engineering services partner for Schaeffler, and the GEC is part of a strategic multi-year engineering services engagement. This relationship strengthens your Company''s automotive presence in Europe and reinforces the strategic investments as a design-led engineering solutions provider over the years.

Your Company is investing in strengthening electric vehicles'' development capabilities, including control software development, battery management systems, and validation. We continue to invest in developing IP in select areas, creating new monetization opportunities, and demonstrating expertise in specific areas of future growth.

Media, Broadcast and Communications

Tata Elxsi addresses the complete product development lifecycle from R&D, new product development, and testing to maintenance engineering for Broadcast, Consumer Electronics, and Communications. Your Company works with leading broadcasters & operators to develop and deliver new connected services and superior customer experience. The Media, Broadcast and Communications division contributes 44.7% of EPD revenues.

As per Zinnov''s report, global hi-tech-led verticals consisting of software & internet, semiconductor, and telecom are expected to reach the US $484 Billion by 2023, registering a CAGR of 14%, 2019-2023.

Pandemic-led viewership and content consumption experienced in the recent past by OTT platforms and streaming has led Broadcast and Media companies to allocate more resources to connect directly with their audiences through new platforms or digital media.

Your Company offers better customer engagement through the user-centric design and AI-based video analytics for hyper-personalization for rich interaction with users. Our FalconEye solution enables a superior quality experience, thereby helping content providers increase customer loyalty, retention and extend their customer base. We help our customers adopt new strategies and agile approaches for application and content development, aggregation, and delivery.

Your Company also assists leading telecom operators in their digital and network transformation efforts, assisting with integration, process automation, and new service rollouts.

In FY 2020-21, Tata Elxsi expanded its RDK offerings by developing an end-to-end, full-stack, intuitive User Interface solution for RDK Video Accelerator set-top boxes. This solution offers faster application development cycles for operators adopting RDK for their video and broadband services.

Tata Elxsi teamed up with Syntiant Corp., a deep learning chip technology company, to assist manufacturers in designing and developing low-power always-on voice applications for various product categories, including smart home devices and consumer electronics, as well as industrial and transportation use cases.

Tata Elxsi announced an expansion of its relationship with INVIDI Technologies to bring addressable television capabilities to pay-TV operators in India, Asia-Pacific, and MEA.

Your Company was selected as a 3PL certification partner for Google Widevine to deliver secure premium content protection for Broadcast, Media, Consumer Electronics, and Automotive applications. This certification partnership further expands Tata Elxsi''s offerings and leadership in the Broadcast, media, consumer devices, and transportation domains and enabling leading brands, content distributors, OTT providers, and operators with a seamless development, integration, and certification service for Widevine solutions, ensuring faster time-to-market for their revenue-generating services.

Healthcare

The Healthcare segment contributed 9.9% of EPD revenues and continues to be fastest-growing segment, registering a 49.4% Y-o-Y revenue growth in FY 2020-21.

With the growing demand for point-of-care devices, digital self-diagnosis devices, wearable monitoring, and alert systems. Your Company supports global medtech, digital health, pharmaceuticals, and biotech businesses conceptualize, launch, and sustain products in one of the most regulated industries in the world.

The sector''s GDP share should average 10.3% in 2021 and 2022.

As per Zinnov''s report, Global Healthcare (services led) ER&D is expected to reach US$ 45 Billion by 2023, registering a CAGR of 9.8%, 2019-23. The total global R&D spend in the Medical Devices industry stands at USD 48-49 Bn in 2019 (Zinnov), concentrated on top players. North America is the biggest spender, with 59% of the pie, followed by Europe at 34% and APAC, 7%.

With our deep expertise in product design and engineering space, your Company is continuously piloting design innovation in the healthcare industry. We engage with our customers to design next-generation products in critical care, patient monitoring, and drug delivery. We are working on cloud-based platforms that help consolidate and provide valuable data for analytics on the digital side. We are developing software accelerator platforms in regulatory intelligence and clinical workflow automation to improve operational efficiencies for the end-users significantly.

During the year, Tata Elxsi announced the opening of a Global Engineering Center (GEC) with Aesculap AG, a subsidiary of B.Braun, one of the world''s leading manufacturers of medical devices and pharmaceutical products and services. This GEC brings together integrated competencies in R&D and innovation, digital technologies, deep domain understanding of medical devices and ever-evolving regulatory standards. This center will be essential to accelerate innovation and drive Aesculap‘s medical business''s transformation and growth.

Industrial Design and Visualization

Tata Elxsi works with customers to develop innovative products, services, and experiences that help them establish brands and grow their businesses. We assist clients worldwide in bringing new concepts and goods to market by combining design and technology.

Your Company''s services span across consumer research and strategy, branding and graphics, product design, service design, user experience design, transportation design, 3D-prototyping, visualization, and manufacturing support.

Together with our clients, we simplify and enhance service value by analyzing problems, identifying opportunities, improving processes, and creating unified solutions, meaningful interactions, spaces, and products.

This business continues to deliver integrated services for customers in Transportation, Media & Communication & Healthcare sectors, enabling differentiation and added value, even as it addresses independent design projects in other sectors such as FMCG and consumer appliances.

During the year under review, this business registered a turnover of '' 170 crores and a growth of 9% YoY

DishTV selected your Company to develop ‘Orbit,'' the new user interface (UI) for both its brands DishTV & d2h. This enables subscribers with a seamless TV and online viewing experience. The new interface will leverage artificial intelligence and machine learning to make it easier to find content on TV where users are restricted to traditional remotes. This engagement is a great example of our integrated service offering where our design and technology teams worked together to create a completely new, yet intuitive UI with robust product performance that helped create a visual identity and a branded experience for Dish TV.

Your Company has won its second iF Design Award this year after the first one in 2017. Tata Elxsi won this world-renowned award for design excellence for its innovative and exceptional design concept for a Mixed Reality (MR) Based Smart Assistive Wearable Device. These devices have been designed to help people with special needs such as Autism or Alzheimer''s to deal with social situations, which they might otherwise find difficult.

Your Company also won two ‘India''s Best Design Awards (IBDA) for Packaging Design for Sunny Sun-lite oil and Product Design for Orient Ultimo tower cooler. The jury recognized our work for innovative design and solving customer pain points through unique features developed for each of these products. Going beyond the awards, both the products have been very well received in the market, reiterating our design''s impact on driving strategic business growth for our customers.

System Integration and Support

Our System Integration & Support segment reported a turnover of '' 44.5 crores during the year under review, a decline of 5.5% Y-o-Y. The segment generated a profit of '' 3.7 crores during the year.

Your Company implements and integrates complete systems and solutions for specialized applications such as Experience Centers, Training and Safety, and Design Visualisation. Your Company helps customers implement complex design solutions across market segments such as Automotive, Aerospace, Entertainment, Manufacturing, Government, and Education.

We continue to strengthen our solution portfolio to address emerging digital technology needs with our customers, including professional services for cloud and infrastructure management, Virtual Reality (VR), and 3D Printing.

This division is also bringing together design, technology, and content to help corporate brands set up Experience Centres to better communicate their brands and businesses'' impact on consumers, stakeholders, and the community. We executed several such Experience Centers for leading brands and corporate houses in the medical devices, transportation, consumer products, and manufacturing industries.

Threats, concerns, and risks

With more than 15 months into the pandemic, the global economy has encountered new challenges. It is holding back economic development in some of the poorest parts of the world; at the same time, there are concerns that the fight against the pandemic is taking resources away from other critical challenges. Geopolitical risks, inflation, interest rate volatility, and forex volatility are expected to keep policymakers on their toes in 2021.

The health and well-being of our employees is the top priority of your Company. It has been our constant endeavor to ensure employees feel safe, cared for, and supported. Your management team is working towards delivering resilience and continuity of our services to our clients.

Your Company''s diversified revenues in sectors with low correlation namely Transportation, Media & Communication and Healthcare has enabled us to register a healthy 13.4% Y-o-Y revenue growth during the period when the entire global economy reported a decline. Your Company''s customer base is diversified in terms of both geographies we operate in, and currencies we bill in. This mitigates risks arising from geopolitical and currency volatility to a certain degree.

The Company also follows a well-defined hedging policy to address any possible risk associated with volatility in foreign exchange.

We have robust business continuity plans and are continuously testing and upgrading our disaster management infrastructure. Your Company has a well-defined disaster recovery plan to protect business operations and critical data and improve our response to threats, especially cyberattacks.

Internal Control Systems and their adequacy

Your company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Chairperson of the Audit Committee of the Board. The internal auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Your Company has appointed an external audit firm Grant Thornton Bharat LLP to provide an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company''s internal controls. The audit firm periodically evaluates and tests the efficacy and adequacy of internal controls. The internal control systems also aim to strengthen the overall assurance practices, processes and controls.

Significant audit observations and follow up actions thereon are reported to the Audit Committee.

Based on the internal audit reports, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. The Audit Committee approves the annual internal audit plan, reviews the adequacy and effectiveness of the internal control system, significant audit observations and monitors the implementation of audit recommendations.

Risk management

Your company has developed and implemented a Board approved Risk Management Policy that ensures appropriate management of risks which aligns with its internal systems and culture. Moreover, it has a well-defined Enterprise Risk Management (ERM) framework that is designed to enable risks identification, assessment, mitigation, monitoring and reporting. The risk management process encompasses a spectrum of strategic, operational, financial and compliance risks that your company is exposed to. Further, it is also embedded across all the major functions and regions of the organisation. The Risk Management Committee, comprising of Directors and the Chief Financial Officer, assist the Board in overseeing the responsibilities with respect to identification, assessment and mitigation of these risks.

Financial Analysis

Particulars

'' in Crores

Change over

Percentage of Income

2020-21

2019-20

previous year% |

2020-21

2019-20

Sales and services

1826

1610

13

98

97

Other income

40

58

-31

2

3

Total Revenues

1866

1668

12

100

100

Cost of sales

87

81

7

5

5

Personnel expenses

1025

951

8

55

57

Financial expenses

6

6

-

-

-

Depreciation/ Amortization

44

43

2

2

3

Other expenses

192

235

-18

10

14

Total Expenditure

1354

1316

3

73

79

Profit before tax and exceptional items

512

352

45

27

21

Tax expenses

144

96

50

8

6

Profit after tax for the year

368

256

44

20

15

Analysis of Overheads

Particulars

'' in Crores

Variance %

¦2020-21

| 2019-20

Communication expenses

5.94

7.35

(19)

Inland travel and conveyance

2.02

7.90

(74)

Overseas travel

26.94

68.02

(60)

Advertisement and Sales Promotion

6.71

8.39

(20)

Legal and Professional Expenses

10.84

10.04

8

Consultant fees for software development

71.53

70.12

2

Significant Ratio Analysis

Sl. No. Particulars

Unit |

31.03.2021

31.03.2020

1 Earnings before interest, depreciation and tax/Sales

%

30.78

24.9

2 Profit before tax/ Sales

%

28.04

21.86

3 Profit after tax/ Sales

%

20.15

15.90

4 Current Ratio*

No. of times

5.30

5.53

5 Earnings per share

INR

59.11

41.12

Human Resources

Your Company recognizes the critical importance of its human capital. As a technology-led design Company, we continue to focus on attracting and retaining top talent.

Your Company undertakes significant initiatives to increase effectiveness and efficiency through Leadership training, Performance management, Talent development, Employee engagement and Succession planning. Across the organization there are leadership programs for all job levels, technical training programs are hosted to up-skill and re-skill employees on the latest technologies, there are curated learning paths for all employees and employee engagement is at the centre of everything we do. There are programs like Future leaders to identify young aspiring talent early in their career and nurture that talent.

Your Company believes in Diversity & Inclusion and is committed to the principle of Equal Employment Opportunity for all employees. About 35% of our total workforce comprises of female employees, underscoring the emphasis that Tata Elxsi places on providing equal opportunities for its workforce. Our total headcount was 7362 as of March 31, 2021.

Quality initiatives

In line with our Vision, Mission and Value statements and the Quality policy, we have instituted robust quality processes for execution of our projects. We have also implemented a set of robust information security management processes to assure our global customer base of the required level of confidentiality and protection of data and information. Our processes are complying to and certified against generic standards like ISO 9001:2015 and ISO 27001:2013. In addition our processes are also certified against domain specific requirements like ISO 13485:2016 for medical devices, and Automotive SPICE® Level 5 certification for the transportation business. In addition, our facilities comply with the rigors of ISO 45001:2018, an international standard on Occupational Health and Safety. Our Trivandrum and Pune facilities are also certified for TISAX (Trusted Information Security Assessment Exchange), a new assessment and exchange mechanism for information security focused towards automotive industry.

Directors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. N G Subramaniam retires by rotation and being eligible, offers himself for re-appointment.

Prof. M.S. Ananth, Independent Director, retired on November 15, 2020 on expiry of his term and upon attaining the age of 75 years, in line with the Tata Group Policy. The Board placed on record their appreciation for the valuable contribution made by Prof. Ananth during his tenure with the Company.

The Board on the recommendation of the Nomination & Remuneration Committee, subject to the approval of the shareholders, has appointed Dr. Anurag Kumar as an Independent Director (additional Director) to hold office for a term of five (5) years from November 15, 2020 upto November 14, 2025.

The term of Mr. Sudhakar Rao as an Independent Director is due to expire on July 31, 2021. The Board, on the recommendation of the Nomination and Remuneration Committee, subject to approval of the shareholders, has approved the re-appointment of Mr. Sudhakar Rao as an Independent Director for the second term commencing from August 01, 2021 up to September 02, 2024 (3 years, 1 month and 2 days).

During the year under review, six (6) Board meetings were held and have been well attended by the Directors. The calendar of meetings for the year 2020-21 had been circulated to all the directors detailing the schedule of Board and Committee meetings during 2020-21.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”). During the year 20-21, there here has been no change in the circumstances affecting their status as Independent Directors of the Company. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013 the Independent Directors had a separate meeting on April 20, 2020.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Pursuant to the provisions of section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Mr. Manoj Raghavan, (CEO & MD); Mr. Muralidharan H.V, Chief Financial Officer (CFO) and Mr. G Vaidyanathan, General Counsel & Company Secretary.

7. Directors’ Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2020-21.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures.

b. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as

to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

c. The Directors had taken proper and sufficient care, for the maintenance of adequate accounting records, in accordance with the provisions of Companies Act 2013, for safeguarding the assets and for preventing and detecting fraud and other irregularities.

d. The Directors have prepared the annual accounts on a going concern basis.

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

8. Particulars on Remuneration

Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said Statement is also open for inspection at the Registered Office of the Company, up to the date of the ensuing Annual General Meeting. Any member interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under:

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam*

-

Mrs. S. Gopinath

19.53

Mr. Sudhakar Rao

16.36

Dr. Anurag Kumar" (from November 15, 2020)

-

Mr. Ankur Verma*

-

Prof. M.S. Ananth" (up to November 15, 2020)

-

Executive Directors

Mr. Manoj Raghavan, MD & CEO

53.86

* Being in full time employment with other Tata Company and is not eligible for commission.

" Since the information is for the part of the year, either current or past the same is not comparable.

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. N G Subramaniam**

-

Mrs. S. Gopinath

41.59%

Mr. Sudhakar Rao

91.43%

Dr. Anurag Kumar" (from November 15, 2020)

-

Mr. Ankur Verma**

-

Prof. M.S. Ananth" (up to November 15, 2020)

-

Mr. Manoj Raghavan, MD & CEO"

-

Mr. Muralidharan H.V, CFO

12%

Mr V^irh/^n^fh^n Cnmn^n\/ Qcirrof^rv/

**Being in full time employment with other Tata Company and is not eligible for commission.

" Since the information is for the part of the year, either current or past, the same is not comparable.

(iii) The percentage increase in the median remuneration of employees in the financial year: 2.4 %

(iv) The number of permanent employees on the rolls of company: 7,362 (including consultants)

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than managerial personnel in 2020-21 was 7.9%.

Percentage increase/(decrease) in the managerial remuneration for the year was (2.01%).

(vi) The Company hereby affirms that the remuneration is as per the remuneration policy of the company.

The Board has adopted a Remuneration Policy as also the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to the Managing Director, Key Managerial Personnel and other officers. The Charter lays down the Rights, Roles and Responsibilities of the NRC. A Policy on Board diversity has also been adopted by the Board. A comprehensive Governance Guidelines for Board effectiveness has also been adopted by the Board on the recommendation of NRC. The Guidelines lay down the following:

• Composition and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing Director, Executive Director, NonExecutive Directors, Independent Directors, their term, tenure and directorship)

• Board appointment

• Directors'' Remuneration (Guided by the Remuneration Policy)

• Subsidiary Oversight

• Code of Conduct (Managing Director, Executive Director, Non-Executive Directors, Independent Directors)

• Board effectiveness review

• Mandate of the Board Committee

The Remuneration Policy and the Charter for NRC are available at www.tataelxsi.com/NRC-Charter

9. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars pursuant to section 134 (m) of the Companies Act, 2013 and read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is attached with this report as Annexure-A.

10. Business Responsibility Report (BRR)

In terms of the Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (‘Listing Regulations'') the Business Responsibility Report forms part of the Annual Report.

11. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis including to review and monitor the cyber security measure. More details are given under Section-6 of Corporate Governance Report.

12. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company''s website at www.tataelxsi.com/corporate-social-responsibility. The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-B. The detail of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

13. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Corporate Governance Report, Management Discussion & Analysis, and the Auditors'' Certificate regarding Compliance to Corporate Governance requirements are part of this Annual Report.

14. Related Party Transactions

All Related Party Transactions that were entered during the financial year were on an arm''s length basis and in the ordinary course of business and is in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders'' approval under Regulation 23 of the Listing Regulations.

None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2020-21 and hence does not form part of this report.

15. Secretarial Audit and Annual Certification

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Jayashree Parthasarathy of M/s Jayashree Parthasarathy & Co, a Company Secretary-in-Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Auditor along with the

certificate of non-disqualification of Directors for the year ended March 31, 2021 is annexed to the Directors'' Report as Annexure - C.

16. Extract of annual return

In terms of the Companies Act, 2013 as amended, the Annual Return is available on www.tataelxsi.com/ AnnualReturn

17. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for prevention and redressal of complaints under the above Act. 2 (two) complaints were received by the local Internal Complaints Committee during the year under review, the same has been redressed to the satisfaction of the complainant.

18. Vigil Mechanism

Your Company has established a “Vigil Mechanism” for its employees and Directors, enabling them to report any concerns of unethical behaviour, suspected fraud or violation of the Company''s ‘Code of Conduct''.

To this effect, the Board has adopted a ‘Whistle Blower Policy'' (WBP), which is overseen by the Audit Committee. The policy interalia provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review.

The said policy has been posted on our intranet where all the employees have access. The Company conducts ‘Policies Awareness Campaign'' regularly for its employees at its various centers, and the WBP features in these campaigns.

19. Amendment to Articles of Association

The Company with the approval of its members, vide postal ballot dated October 14, 2020, amended its Articles of Association by inserting Article 137A and altering Article 167 with respect to Nomination of Directors and Chairman respectively, w.e.f. December 01, 2020.

20. Others

There are no loans, guarantees and investments made by the Company u/s 186 of the Companies Act, 2013 during the year under review. Your Company has neither accepted nor renewed any deposit during the year under

There are no material changes and commitments affecting the Company''s financial position between the end of the financial year to which this financial statement relates and the date of this report.

The Unclaimed Dividend in respect to the financial year 2013-14 is due for remittance to Investors'' Education & Protection Fund (IEPF) on August 25, 2021 in terms of Section 125 of the Companies Act, 2013.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has during the year transferred 22,339 equity shares pertaining to those shareholders who have not claimed their dividend for 7 consecutive years since 2013, to the IEPF account on December 02, 2020. So far, the Company has transferred 331,109 equity shares to the IEPF account.

mm

21. Auditors

M/s BSR & Co. LLP, Chartered Accountants, the statutory auditors of the company have been appointed at the 28th Annual General meeting held on July 27, 2017 for a period of 5 years from the conclusion of 28th Annual General Meeting up to the conclusion of the 33rd Annual General meeting to be held in the year 2022.

22. Acknowledgements

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

For and on behalf of the Board

N. G. Subramaniam

Chairman

Bengaluru, April 22, 2021


Mar 31, 2019

DIRECTORS' REPORT TO THE MEMBERS

1. Your Directors are pleased to present the Thirtieth Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2019.

 

2018-19

2017-18

Revenue from operations

1597

1386

Other income( Net)

43

43

Total Income

1640

1429

Profit before financial expenses, depreciation

458

389

Less: Financial expenses

-

-

Depreciation/ Amortization

25

25

Profit before tax

433

364

Tax expenses

143

124

Profit after tax for the year

290

240

Other Comprehensive income

-3

1

Total comprehensive income

287

241

Add: Profit brought forward

610

439

Less: Dividend and Dividend Tax*

83

60

Transfer to General Reserve

10

10

Balance Profit carried to Balance Sheet

804

610

*Pertains to previous years

3. Dividend

Your Directors recommend for your approval, a dividend of 135 % (Rs 13.50 per share) for the year ended March 31, 2019 on 6,22,76,440 equity shares of Rs 10/- each fully paid-up, compared to 110% (Rs 117- per share) on 6,22,76,440 equity shares of Rs 10/- each fully paid-up in the previous year.

This will involve an outgo of Rs 101.37 crores compared to Rs 82.60 crores in the previous year, including dividend distribution tax.

The Company's Dividend Distribution Policy (DDP) is available in the Investors section of the company website: http:77www.tataelxsi.com7investors7TataElxsi-dividend-distribution-policy.pdf

4. Reserves

Your Directors have approved a transfer of Rs 10 crores to the General Reserves for the year ended March 31, 2019, as against an amount of Rs 10 crores transferred in the previous year.

5. Review of Operations

The total income during the year under review increased by 15% from Rs 1429 crores in the previous year to Rs 1640 crores.

The Profit Before Tax (PBT) increased by 19% from Rs 364 crores in the previous year to Rs 433 crores. The Profit After Tax (PAT) increased by 21 % from Rs 240 crores in the previous year to Rs 290 crores.

2. Result of Operations - Extract

Rs In Crores

During the year under review, your Company continued its momentum of growth despite geo-political uncertainties, considerable headwinds in the business environment and currency volatility in some currencies.

6. MANAGEMENT DISCUSSION AND ANALYSIS

Industry Outlook

According to NASSCOM, India's IT-BPM industry (excl. e-commerce) is expected to grow by 6.1% in FY19 to $ 177 billion. Technologies such as robotics, cloud, loT, and AR/ VR are driving a large part of this growth.

According to NASSCOM, India continues to be the core for developing 'Intelligent Solutions' with enormous opportunities for digital engineering& connected solutions, innovation and R&D hubs, SaaS& deep tech solutions, IT digital solutions partners, intelligent operations partners, and disruptive products & solutions.

Business Analysis

Our operations are classified into two business segments, i.e. Software Development & Services and Systems Integration & Support.

Software Development and Services

This business segment grew by 16% from Rs 1329 crores in the previous year to Rs 1543 crores in FY19. The segment profit increased by 16% from Rs 396 crores during the last year to Rs 456 crores during FY19.

In order to enhance the customer experience, there is a need to create the 'market of one,' which involves all the components right from strategy, customer insights to design, implementation and post-delivery delight to be carefully packaged. Tata Elxsi brings together this unique capability of integrated design and technology teams across verticals, which helps it stand out for its customers and helping deliver innovation for new products and services.

Leveraging Digital

Your Company has been investing in key digital technologies over the past few years, through Centers of Excellence in areas such as Al and Analytics, loT and Automation, which have helped enhance the service portfolio, not only for existing customers but also to win new customers across the world.

To illustrate, NOS, a Portugal based entertainment & communication provider, has collaborated with your Company to launch a Digital Centre of Excellence (CoE). This center will focus on digital transformation initiatives that are geared to deliver next-generation services, enhance subscriber experience, and improve operational efficiency across their entire portfolio.

The software development and services segment consist of two business divisions that provide technology and design services respectively to customers across industries.

Embedded Product Design

The Embedded Product Design (EPD) division provides technology consulting, new product design, development, and testing services for the automotive, broadcast, consumer electronics, healthcare, telecom, and transportation industries. The key sectors addressed by EPD include:

Transportation

Tata Elxsi works with leading OEMs and suppliers in the automotive and transportation industries for R&D, design and product engineering services from architecture to launch and beyond. Your Company works with leading car manufacturers and suppliers, in developing electronics and software for powertrain, infotainment, connectivity, active safety, and comfort and convenience.

By 2020, over 250 million vehicles are estimated to be connected to the internet and equipped with a myriad of sensors, connectivity platforms, and geo-analytical capabilities.

Your Company brings together deep expertise in digital technologies including Artificial Intelligence, Extended Reality, and loT to help OEMs & suppliers to realize the future of autonomous, connected& electric vehicles.

As vehicles become more integrated, complex and autonomous, the amount of software and hardware required will significantly increase. Your Company has been working on driverless car solutions for the past few years now and has also invested in developing in-house software and components to help customers accelerate their product development.

For instance, Tata Elxsi has collaborated with Mobis Technical Centre (HMTCI), a wholly owned subsidiary of Hyundai Mobis for the development of a Synthetic Scene Generator Tool. This tool can replicate every real-world scenario an automobile could encounter, which could run into millions of possibilities, accelerating the ongoing research and development support HMTCI is providing to their OEMs in Autonomous Driving.

Electric vehicles are slowly gaining momentum, and even as the industry embraces electric, we will see a shift from conventional to hybrid to fully electric powertrains.Tata Elxsi has been working in various aspects of the electric vehicle space especially in powertrain development, from program management to software development and validation of new platforms.

Your Company participated in leading trade shows and events across geographies, such as the CES 2019 (Consumer Electronics Show) in Las Vegas, Hybrid & Electric Vehicle Confex in Pune, and Autonomous & Smart Vehicle Summit in Shanghai, where it showcased its capabilities and new product offerings for autonomous vehicles, connected cars, and next-gen infotainment.

Broadcast and Communications

Tata Elxsi addresses the complete product development lifecycle from R&D, new product development and testing to maintenance engineering for Broadcast, Consumer Electronics, and Communications.

With the penetration of high-speed internet, smart devices and content flooding in the market, the borders between entertainment, media, and telecommunications have dissolved. New services such as smart, connected homes& OTT are creating new revenue opportunities for operators & broadcasters.

Tata Elxsi works with leading broadcasters & operators to create solutions for smarter living, engaged entertainment and a digital future driven by loT, analytics and artificial intelligence thereby enabling new revenue streams and enhanced customer experience.

Tata Elxsi has partnered with Airtel to deliver an engaging digital platform for customers with an innovative hybrid DTH set-top-box - 'Internet TV which brings together the best of online content and linear TV on one platform, bridging the gap between online and offline world for TV users.

We continue to participate in leading international industry events such as IBC (International Broadcasting Convention) in Amsterdam, Appliances & Electronics World Expo in Shanghai, and Broadcast Asia in Singapore to reiterate our established presence and brand in these markets.

Industrial Design and Visualization

Tata Elxsi helps customers create innovative products, services, and experiences to build brands and help businesses grow. By intersecting design and technology, we help clients globally to bring new ideas and products to market.

Your Company's services span across consumer research and strategy, branding and graphics, product design, service design, user experience design, transportation design, 3D-prototyping, visualization and manufacturing support.

Tata Elxsi brings together emerging technologies including digital, innovative design and content to create new products and experiences for customers that drive business success.

Together with our clients we simplify and enhance service value by analyzing problems, identifying opportunities, improving processes and creating unified solutions, meaningful interactions, spaces, and products.

Your Company has been awarded India's Best Design Studio 2018 by Pool magazine. We have also won four Best Design Project Awards in the Product Design, Branding & Graphics, and User Experience Design categories. This is a testimony to our world-class design thinking, strategy and end-to-end service capabilities.

Systems Integration and Support

During the year under review, our Systems Integration & Support segment reported a turnover of Rs 54 crores and profit of Rs 9 crores.

Your Company implements and integrates complete systems and solutions for specialized applications such as High-Performance Computing, Computer Aided Design, and Virtual Reality. We also provide Professional Services for the maintenance and support of such installations in India and key overseas markets.

We continue to expand our solution portfolio to address emerging digital technology needs with our customers, including Virtual Reality (VR), 3D Printing and Robotics.

In the VR space, your Company has been named as an exclusive distributor for VR driver training in India by VR Motion. This will promote easier and more sophisticated fleet driver training and higher road safety using Virtual Reality.

Threats, concerns, and risks

With global trade risk rising this year as the U.S. plans tariffs on a range of products, the pressure to protect the competitiveness of export industries is set to build. India will likely prefer to keep its currencies competitive relative to Asian counterparts. As almost 85% of company's revenue comes from outside India, and the majority of the delivery team is based in India, a weakening of Rupee against leading foreign currencies or strengthening of these currencies will only help the company's top-line and bottom-line.

Tata Elxsi's revenue is uniformly distributed across Euro and US dollar currencies, which provides us a natural hedge against possible currency risk from any single region. Your Company has also institutionalised a hedging policy to address any possible risks associated with global currencies.

The UK is going through some protectionism measures like the minimum wage bill for a work permit, but again the impact to Tata Elxsi is small.

The new US H1B policy is likely to have minimal impact on our operations as most of our projects are delivered via offshore locations in India.

Internal Control Systems and their adequacy

The Company's internal control systems commensurate with the nature of its business and the size and complexity of its operations. Your Company has appointed an external audit firm Deloitte Haskin & Sells LLP to provide an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company's internal controls. The audit firm periodically evaluates and tests the efficacy and adequacy of internal controls. The internal control systems also aim to strengthen the overall assurance practices, processes and controls. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

Based on the internal audit reports, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. The Audit Committee approves the annual internal audit plan, reviews the adequacy and effectiveness of the internal control system, significant audit observations and monitors the implementation of audit recommendations.

Financial Analysis

Particulars

2018-19

2017-18

Change over previous year %

Percentage of Income

 

2018-19

2017-18

 

Rs Crs

 

Sales and services

1597

1386

15

97

97

 

Other income

43

43

-

3

3

 

Total Revenues

1640

1429

15

100

100

 

Cost of sales

99

77

28

6

5

 

Personnel expenses

843

749

13

51

52

 

Financial expenses

-

-

-

-

-

 

Depreciation/ Amortization

25

25

-

2

2

 

Other expenses

240

214

12

15

15

 

Total Expenditure

1207

1065

13

74

75

 

Profit before tax and exceptional items

433

364

19

26

25

 

Tax expenses

143

124

16

9

9

 

Profit after tax for the year

290

240

21

18

17

 

Analysis of Overheads

Particulars

2018-19

2017-18

Variance %

Rs Crs

Rs Crs

Operating lease rent

19.61

17.04

15.08

Communication expenses

8.13

8.80

(7.56)

Inland travel and conveyance

8.53

7.91

7.84

Overseas travel

66.24

66.38

(0.21)

Consultant fees for software development

61.71

50.88

21.29

Significant Ratio Analysis

SI. No.

Particulars

Unit

31.03.19

31.03.18

1

Earnings before interest, depreciation and tax/Sales

%

28.71

28.08

2

Profit before tax/ Sales

%

27.14

26.25

3

Profit after tax/ Sales

%

18.16

17.32

4

Current Ratio*

No. of times

5.39

4.23

5

Earnings per share

Rs

46.56

38.54

"Increase in Current Ratio is due to cash generation during the year resulting in higher cash and bank balances.

Human Resources

Your Company recognizes the critical importance of its human capital. As a technology-led design Company, we continue to focus on attracting and retaining top talent.

Your Company undertakes significant initiatives to increase effectiveness and efficiency through Leadership training. Performance management. Talent development. Employee engagement and Succession planning. Across the organization there are leadership programs for all job levels, technical training programs are hosted to up-skill and re-skill employees on latest technologies, there are curated learning paths for all employees and employee engagement is at the centre of everything we do. There are programs like Future leaders to identify young aspiring talent early in their career and nurture that talent.

Your Company believes in Diversity & Inclusion and is committed to the principle of Equal Employment Opportunity for all employees. About 33% of our total workforce comprises of female employees, underscoring the emphasis that Tata Elxsi places on providing equal opportunities for its workforce. Our total headcount was 6060 as of March 31, 2019.

Quality initiatives

We have instituted quality processes in the execution of our software development projects, and implemented robust information security management processes to assure our global customer base of the required level of confidentiality and protection of data and information. To this effect, we have been assessed and certified for ISO 9001:2015 and ISO 27001:2013. Additionally, we have been certified for design and development of medical devices with ISO 13485:2012 certification, and Automotive SPICE® Level 5 certification for transportation business.

Directors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. N.G. Subramaniam retires by rotation and being eligible, offers himself for re-appointment.

The Board had, on the recommendation of the Nomination and Remuneration Committee (NRC), at its meeting held on July 25, 2018 appointed Mr. Ankur Verma as an Additional Director of the Company with effect from August 01, 2018. In terms of section 161 of the Companies Act, 2013, Mr. Verma holds office up to the date of the ensuing Annual General meeting and being eligible offers himself for re-appointment. The NRC at its meeting held on April 24, 2019  has recommended the appointment of Mr. Verma to the office of the Directorship of the Company whose term of office shall be determined by retirement by rotation, subject to the approval of the shareholders.

Dr. Gopichand Katragadda, Non-Executive Non Independent-Director, resigned from the office of the directorship of the Company with effect from July 13, 2018. The Board placed on record their appreciation for the valuable contribution and guidance rendered by Dr. Katragadda during his tenure on the Board.

The term of Mrs. Shyamala Gopinath and Mr. Patrick McGoldrick, Independent Directors is due to expire on July 17, 2019. The Nomination and Remuneration Committee (NRC) at its meeting held on April 24, 2019 has recommended the re-appointment of Mrs. Shyamala Gopinath, Independent Director, for a further term commencing from July 18, 2019 upto June 19, 2024, subject to the approval of the shareholders. Mr. Patrick McGoldrick, Independent Director, did not wish to be re-appointed due to his domestic commitments.

The Board as a part of succession plan for the CEO & Managing Director, Mr. Madhukar Dev, who retires on October 01, 2019, and on the recommendation of the Nomination and Remuneration Committee (NRC) decided to appoint Mr. Manoj Raghavan, Executive Vice President (EPD) as the CEO& Managing Director of the Company on and from October 02, 2019, subject to the approval of the shareholders.

During the year under review, five (5) Board meetings were held and have been well attended by the Directors. The calendar of meetings for the year 2019-20 has been circulated to all the directors detailing the schedule of Board and Committee meetings during 2019-20.

The Independent Directors have submitted their declaration that they fulfill the requirements as stipulated in Section 149 (6) of the Companies Act, 2013. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013 the Independent Directors had a separate meeting on April 25, 2018.

Pursuant to the provisions of section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Mr. Madhukar Dev, MD & CEO; Mr. Muralidharan H. V, Chief Financial Officer (CFO) and Mr. G Vaidyanathan, General Counsel & Company Secretary.

7. Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2018-19.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures;

b. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

c. The Directors had taken proper and sufficient care, for the maintenance of adequate accounting records, in accordance with the provisions of Companies Act 2013, for safeguarding the assets and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the annual accounts on a going concern basis.

e. The Directors had laid down internal financial controls to be followed by us and that such internal controls are adequate and were operating effectively.

f. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

8. Particulars on Remuneration

The statement showing the names of the top ten employees in terms of remuneration drawn and the information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment& Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors' Report and have not been attached. However, in terms of first proviso to Section 136(1) the particulars as referred above are available for inspection at our Registered office during business hours on working days, up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under:

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam*

-

Mr. Patrick McGoldrick

11.87

Mrs. S. Gopinath

14.96

Dr. G Katragadda* (up to July 13, 2018)

-

Prof. M.S. Ananth

8.00

Mr. Sudhakar Rao

9.68

Mr. Ankur Verma* (on and from August 01, 2018)

-

Executive Director

 

Mr. Madhukar Dev, MD & CEO

93.32

For Non-Executive Director only Commission is considered.

*Being in full time employment of other Tata Company is not eligible for commission.

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. N G Subramaniam**

-

Mr. Patrick McGoldrick

23.89

Mrs. S. Gopinath

18.34

Dr. G Katragadda** (up to July 13, 2018)

-

Prof. M.S. Ananth

22.77

Mr. Sudhakar Rao

-

Mr. Ankur Verma** (on and from August 01, 2018)

-

Mr. Madhukar Dev, MD & CEO

15.60

Mr. Muralidharan H.V, CFO*

-

Mr. G Vaidyanathan, Company Secretary

13.64

*Since information is part of the year, either current or past, the same is not comparable.

**Being in full time employment of other Tata Company is not eligible for commission, (iii) The percentage increase in the median remuneration of employees in the financial year: 5% (iv) The number of permanent employees on the rolls of company: 6060 (including consultants)

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than managerial personnel in 2018-19 was 12%. Percentage increase in the managerial remuneration for the year was 16%.

(vi) The Company hereby affirms that the remuneration is as per the remuneration policy of the company.

The Board has adopted a Remuneration Policy as also the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to our Managing Director, Key Managerial Personnel and other officers. The Charter lays down the Rights, Roles and Responsibilities of the NRC. A Policy on Board diversity has also been adopted by the Board. A comprehensive Governance Guidelines for Board effectiveness has also been adopted by the Board on the recommendation of NRC. The Guidelines lay down the following:

• Composition and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing Director, Executive Director, Non-Executive Directors, Independent Directors, their term, tenure and directorship).

• Board appointment.

• Directors' remuneration (Guided by Remuneration policy).

• Subsidiary oversight.

• Code of Conduct (Managing Director, Executive Director, Non-Executive Directors, Independent Directors).

• Board effectiveness review.

• Mandate of the Board Committee.

The Remuneration Policy and the Charter for NRC are available at http://tataelxsi.com/investors/nrccharter.pdf

9. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars pursuant to section 134 (m) of the Companies Act, 2013 is attached with this report as Annexure-A.

10. Business Responsibility Report (BRR)

In terms of the Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 ('Listing Regulations') the Business Responsibility Report is attached as Annexure-C.

11. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis including to review and monitor the cyber security measure. More details are given under Section-6 of Corporate Governance Report.

12. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company's website at (http://tataelxsi.com/company/social-responsibility.html). The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-D. The detail of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

13. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations& Disclosure Requirements) Regulations, 2015 the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors' Certificate regarding Compliance to Corporate Governance requirements are part of this Annual Report.

14. Related Party Transactions

All Related Party Transactions that were entered during the financial year were on an arm's length basis and in the ordinary course of business and is in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders' approval under Regulation 23 of the Listing Regulations.

None of the transactions entered with related parties falls under the scope of Section 188(1) of the Act. Details of transactions with related parties as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are provided in Annexure - B in Form AOC-2 and forms part of this Report.

15. 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, Ms. Jayashree Parthasarthy of M/s Jayashree Parthasarathy& Co, a Company Secretary-in-Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Auditor for the year ended March 31, 2019 is attached to the Directors' Report at page No. 43.

16. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints under the above Act.

One (1) complaint was received by the local ICC during the year under review, the same has been redressed to the satisfaction of the complainant.

17. Vigil Mechanism

Your Company has established a "Vigil Mechanism" for its employees and Directors, enabling them to report any concerns of unethical behavior, suspected fraud or violation of the Company's 'Code of Conduct'.

To this effect, the Board has adopted a 'Whistle Blower Policy' (WBP), which is overseen by the Audit Committee. The policy provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review.

The said policy has been posted on our intranet where all the employees have access. The Company conducts 'Policies Awareness Campaign' regularly for its employees at its various centers, and the WBP features in these campaigns.

18. Others

There are no loans, guarantees and investments made by us u/s 186 of the Companies Act, 2013 during the year under review. Your Company has neither accepted nor renewed any deposit during the year under review.

The extract of Annual Return in MGT-9 is attached and forms part of the Directors' Report.

The Unclaimed Dividend in respect to the financial year 2011-12 is due for remittance to Investors' Education & Protection Fund (IEPF) on August 29, 2019 in terms of Section 125 of the Companies Act, 2013.

There are no material changes and commitments affecting the Company's financial position between the end of the financial year to which this financial statement relates and the date of this report.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has during the year transferred 26,784 equity shares pertaining to those shareholders who have not claimed their dividend for 7 consecutive years since 2011, to the IEPF account on October 30, 2018. So far, the Company has transferred 281,010 equity shares to the IEPF account.

19. Auditors

M/s BSR & Co. LLP, Chartered Accountants, the statutory auditors of the company have been appointed at the 28th Annual General meeting held on July 27, 2017 for a period of 5 years from the conclusion of 28th Annual General Meeting up to the conclusion of the 33rd Annual General meeting to be held in the year 2022.

20. Acknowledgements

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

 

For and on behalf of the Board

 

N. G. Subramaniam

 

Chairman

Bengaluru, April 24, 2019

 

ANNEXURE "A" TO DIRECTORS' REPORT

Particulars pursuant to Section 134(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014

1. Conservation of Energy

Prevention of the wasteful use of natural resources, particularly concerning the emission of greenhouse gases, consumption of water and energy, and the management of waste and hazardous materials have been the key enablers in our journey of environmental sustainability. Few of our initiatives towards reducing negative environmental impact include deploying mass transport for our employees through an arrangement with Bengaluru Metropolitan Transport Corporation (BMTC) for buses.

We have invested in technology to monitor and control the power consumption of ACs and other related equipment, use of energy efficient light bulbs, using technology for switching off computer monitors, motion sensors for lighting controls, etc. to conserve energy.

Our emissions and waste generated are well within limits prescribed by the State Pollution Control Board.

As a Tata group company, ensuring an appropriate and conducive Office environment and employee safety is paramount to us. We have instituted a comprehensive safety policy and procedures to govern the same. We regularly train employees and monitor various safety measures to ensure a safe working environment.

2. Technology absorption, adaption, and innovation

Your Company undertakes various learning and development initiatives to build critical organizational capabilities to its employees. These aim to cross-skill resources across BUs on a need basis, training on new methodologies and developing leadership capabilities at various levels.

These programs also facilitate training and preparing design and engineering teams for upcoming projects in terms of delivery capability and capacity. The outcomes of these programs also help showcase technology and development capability to potential customers without violating the confidentiality of work being executed for existing customers in the same area.

Further, certain programs are focused on creating reusable software components and frameworks which have the potential to generate future revenue streams through commercialization and licensing.

R&D Activities and Expenditure

During the year, we invested 1.37% of revenue towards in-house R&D projects. We intend to continue investing in technology IP development, especially those related to automotive, broadcast and communications.

Expenditure incurred in the R&D centers and innovation centers during the financial year 2018-19 are given below:

i. Capital: Nil

ii. Recurring :Rs 22.54 crores

iii. Total : Rs 22.54crores

iv. Total R & D expenditure as a total percentage of turnover: 1.37%

3. Foreign Exchange earnings and outgo

Export revenue constituted 87% of the total revenue in financial year 2018-19

Foreign exchange earnings

1407.96

CIF Value of imports

40.12

Expenditure in foreign currency

475.88

 

 

For and on behalf of the Board

 

N. G. Subramaniam

 

Chairman

Bengaluru, April 24, 2019

 

(Rs In Crores)

ANNEXURE "B" TO THE DIRECTORS REPORT

Form No. AOC-2

Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-Section (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm's length basis:

Tata Elxsi Limited (the Company) has not entered into any contract/arrangement/transaction with its related parties which are not in ordinary course of business or at arm's length during the financial year 2018-19.

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts / arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: Not Applicable

(f) Date(s) of approval by the Board: Not Applicable

(g) Amount paid as advances, if any: Not Applicable

(h) Date on which the special resolution was passed in general meeting as required under first proviso to Section 188: Not Applicable

2. Details of material contracts or arrangement or transactions at arm's length basis:

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Date(s) of approval by the Board, if any: Not Applicable

(f) Amount paid as advances, if any: Not Applicable

 

For and on behalf of the Board

 

N. G. Subramaniam

 

Chairman

Bengaluru, April 24, 2019

 

Affirmation regarding Compliance with the Code of Conduct

The Company has adopted a Code of Conduct for all its employees, including the Managing Director. In addition, the Company has adopted a Code of Conduct for its Non-Executive Directors. Both these Codes are available in the Company's website (www.tataelxsi.com)

I hereby confirm that all Board Members and Senior Management personnel have affirmed compliance with the Code of Conduct applicable to them in respect of the year ended March 31, 2019.

 

Madhukar Dev

Bengaluru, April 24, 2019

Managing Director

ANNEXURE "C" TO THE DIRECTORS REPORT

BUSINESS RESPONSIBILITY REPORT [Regulation 34(2) (f)]  SECTION

A: GENERAL INFORMATION ABOUT THE COMPANY

1. Corporate Identity Number (CIN) of the Company: L85110KA1989PLC009968

2. Name of the Company: Tata Elxsi Limited

3. Registered address: ITPB Road, Whitefield, Bengaluru 560048, India

4. Website: www.tataelxsi.com

5. E-mail Id: [email protected]

6. Financial Year reported: April 1, 2018 to March 31, 2019

7. Sector(s) that the Company is engaged in (industrial activity code-wise): 620

8. List three key products/services that the Company manufactures/provides (as in balance sheet):

• Software Development & Services

o Technology consulting, new product design, development, and testing services

o Consumer Insights & Strategy, Visual Design& Branding, Product & Packaging design. User Experience design. Service Experience Design & Transportation Design

o High-end content and 3D Animation services

• Systems Integration & Support

o Implement and integrate complete systems and solutions for High-Performance Computing, CAD/CAM/ CAE/PLM, Broadcast, Virtual Reality, Storage, and Disaster Recovery

o Professional Services for maintenance and support of IT infrastructure in India and overseas

9. Total number of locations where business activity is undertaken by the Company

a) Number of International Locations (Provide details of major 5): Sales operations are in fourteen international locations including France, Germany, Japan, UAE, UK, and USA.

b) Number of National Locations: The Company is headquartered in Bengaluru, and operates through twelve design and development centers and six sales offices.

10. Markets served by the Company - The Company deliver design and engineering services, catering to both national and international markets.

SECTION B: FINANCIAL DETAILS OF THE COMPANY

1. Paid up Capital (INR): Rs 6,227.64 Lakhs

2. Total Turnover (INR): Rs 164, 039.32 Lakhs

3. Total profit after taxes(INR): Rs 28,996.89 Lakhs

4. Total Spending on Corporate Social Responsibility(CSR) as percentage of profit after tax (%): Two (2)

5. List of activities in which expenditure in 4 above has been incurred: -

Description

Project Outlay (in Rs)

Shiksha, Niramay and Others

574.36 Lakhs (including Rs 90.23 lakhs unspent amount pertaining to FY 18)

* Please refer to the CSR Report in Page No. 31 of this Annual Report

SECTION C: OTHER DETAILS

1. Does the Company have any Subsidiary Company/ Companies? No.

2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s): Not Applicable.

3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with; participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]: No.

SECTION D: BR INFORMATION

1. Details of Director/Directors responsible for BR

a) Details of the Director/Director responsible for implementation of the BR policy/ policies

1. DIN Number: 00082103

2. Name: Mr. Madhukar Dev

3. Designation: Managing Director & Chief Executive Officer

b) Details of the BR head

No.

Particulars

Details

1

DIN Number (if applicable)

-

2

Name

Mr. Sajiv Madhavan

3

Designation

Joint General Manager

4

Telephone number

+91 80 2297 9302

5

E-mail Id

[email protected]

2. Principle-wise (as per NVGs) BR Policy/policies

(a) Details of compliance (Reply in Y/N)

No.

Questions

P1

P2

P3

P4

P5

P6

P7

P8

P9

1

Do you have policy/ policies for...?

Y

Y

Y

Y

Y

Y

Y

Y

Y

2

Has the policy being formulated in consultation with the relevant stakeholders?

Y

Y

Y

Y

Y

Y

Y

Y

Y

3

Does the policy conform to any national / international standards? If yes, specify? (50 words) *

Y

Y

Y

Y

Y

Y

Y

Y

Y

4

Has the policy being approved by the Board? Is yes, has it been signed by MD/ owner/ CEO/ appropriate Board Director? *

Y

Y

Y

Y

Y

Y

Y

Y

Y

5

Does the company have a specified committee of the Board/ Director/ Official to oversee the implementation of the policy?

Y

Y

Y

Y

Y

Y

Y

Y

Y

6

Indicate the link for the policy to be viewed online? (http://www.tataelxsi.com/ attachment/TATA-ELXSI-code-of-conduct. pdf)

Y

Y

Y

Y

Y

Y

Y

Y

Y

7

Has the policy been formally communicated to all relevant internal and external stakeholders? $

Y

Y

Y

Y

Y

Y

Y

Y

Y

8

Does the company have in-house structure to implement the policy/ policies?

Y

Y

Y

Y

Y

Y

Y

Y

Y

9

Does the Company have a grievance redressal mechanism related to the policy/ policies to address stakeholders' grievances related to the policy/ policies?

Y

Y

Y

Y

Y

Y

Y

Y

Y

10

Has the company carried out independent audit/ evaluation of the working of this policy by an internal or external agency?

Y

Y

Y

Y

Y

Y

Y

Y

Y

 

*Our BRR is formulated based on NVG guidelines on Social, Environmental and Economic Responsibilities of Business.

# Tata Code of Conduct (TCoC) and CSR policy is approved by the Board of Directors and is monitored by the Managing Director.

$The policies are accessible to the employees always and are available on the intranet. The policies that are relevant to other stakeholders are communicated to them, time-to-time.

3. Governance related to BR

(a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company.

Annually

(b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?

The Company's Business Responsibility Report is a part of the Annual Report. It is also hosted on the company's website - https://www.tataelxsi.com/investors/Policies/BRR1819.pdf

SECTION E: PRINCIPLE-WISE PERFORMANCE

Principle 1

1. Does the policy relating to ethics, bribery and corruption cover only the company? Yes/ No. Does it extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs /Others?

The Tata Code of Conduct that the Company has adopted is applicable to its employees, business partners and suppliers.

2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.

No concerns/complaints were received relating to ethics, bribery and corruption from any of our stakeholders during 2018-19.

Principle 2

1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities.

a) Product Design: Products designed by us have been awarded the I Mark (India Design Mark) which signifies good design not only in terms of form and aesthetic appeal, but also in terms of product quality, functionality, safety, sustainability, usability and social responsibility. We also work with leading FMCG and product companies in creating sustainable packaging design and environmentally friendly products that lowers carbon footprint and is recyclable and biodegradable.

b) Social Concerns: We have developed, integrated point-of-care diagnostic device for Malaria and Sickle cell detection. This solution identifies low level infections that currently go undetected and is targeted for emerging economies. It is an easy to use device and delivers accurate results at a very low cost, thus enabling affordable healthcare.

c) Sustainable Transport: In the automotive industry, we work with leading OEMs and suppliers in mechanical and electronic design for electric / hybrid vehicle, to help reduce pollution and fossil fuel consumption.

d) Reduction of Carbon Emission: We carry out research based on technology and trends on behalf of the customers that help in finding solutions for reduced carbon emission.

2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional):

(a) Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?

(b) Reduction during usage by consumers (energy, water) has been achieved since the previous year?

We work with our customers in developing these products and we function as an enabler for designing products that fulfill social or environmental concerns. Hence, we are not able to directly measure the resource use.

3. Does the company have procedures in place for sustainable sourcing (including transportation)?

(a) If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.

The company emphasizes on sustainable procurement practices as much as possible. Suppliers are selected based on TCoC and are constantly evaluated against the same. All our suppliers conform to our norms on Code of Conduct, safety, ethics and other good practices.

4. Has the company taken any steps to procure goods and services from local& small producers, including communities surrounding their place of work?

(a) If yes, what steps have been taken to improve their capacity and capability of local and small vendors?

The Company engages with multiple suppliers, local and international. Preference is always given to local suppliers. Proximity to the Company's location is one significant consideration for selection of suppliers. We also consolidate our imports from various ports to optimize on transport. Preference is given to MSME vendors. The Company also employs local service providers for housekeeping, security, gardening, maintenance and transport.

5. Does the company have a mechanism to recycle products and waste? If yes, what is the percentage of recycling of products and waste (separately as< 5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.

The Company has in place policies and guidelines to set a direction that addresses environmental protection. The company has systems and processes that take measures in up-keeping the environment and our specific actions include recharging ground water using rainwater, and effluent treatment and re-use of treated water for gardening. Our e-waste recycling process takes care of computers, monitors, computer accessories and other electronic office equipments and specialized agencies are hired to carry out the e-waste disposal. We encourage reduced use of printing papers and thus reduce the use of paper, wherever feasible. Our resource usage and processes enable optimal use of equipments and sharing or transferring of equipments based on their needs and utility.

Principle 3

1. Please indicate the Total number of employees: 6060

2. Please indicate the Total number of employees hired on temporary/contractual/casual basis: 276 consultants

3. Please indicate the Number of permanent women employees: 1934

4. Please indicate the Number of permanent employees with disabilities: 8

5. Do you have an employee association that is recognized by management? No

6. What percentage of your permanent employees is members of this recognized employee association? Not applicable

7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

No.

Category

No. of complaints filed during the financial year

No. of complaints pending as on end of the financial year

1

Child labour/forced labour/involuntary labour

The company does not employ child labour. There were no complaints relating to child labor, forced labor and involuntary labor

2

Sexual harassment

01

Nil

3

Discriminatory employment

Nil

Nil

8. What percentage of your undermentioned employees were given safety & skill up- gradation training in the last year?

(a) Permanent Employees - 71.13%

(b) Permanent Women Employees - 84.26%

(c) Casual/Temporary/Contractual Employees - 31.43%

(d) Employees with Disabilities - Safety and skill upgradation training is an ongoing process in the company. This data is not separately maintained.

Principle 4

1. Has the company mapped its internal and external stakeholders?

Yes. The Company has mapped its stakeholders and they include, but are not limited to, shareholders, employees, customers, business partners, suppliers, and the wider communities that we serve.

2. Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders?

The Company is an equal opportunity employer. It has policies instituted to prevent sexual harassment, aid safety of employees, mandate travel guidelines for women employees, obtain the voice of employees' opinions and grievances through employee touch base, periodic employee satisfaction surveys and code of conduct.

3. Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders? If so, provide details thereof, in about 50 words or so.

The Company engages with each of its stakeholders through multiple channels and includes engagement initiatives, feedback process. Code of Conduct briefings and investor meetings. Our CSR initiatives engage the disadvantaged, vulnerable and marginalized by promoting healthcare, socio-economic development and education.

Principle 5

1. Does the policy of the company on human rights cover only the company or extend to the Group/ Joint Ventures/ Suppliers/ Contractors/ NGOs/Others?

The Company's TCoC covers its employees, contractors and extends to its suppliers.

2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?

Our processes enable our stakeholders to voice their grievances and complaints. Dedicated emails are instituted and communicated to each of our stakeholders. Helpdesks are made available to our employees and SLAs put in place for timely closure. During this period, we have received 28 complaints from our investors all complaints stand resolved. There were no other complaints from any other stakeholders.

Principle 6

1. Does the policy related to Principle 6 cover only the company or extends to the Group/ Joint Ventures/ Suppliers/ Contractors/ NGOs/ others?

The Company's Code of Conduct applies to its business partners, contractors and suppliers.

2. Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc.? Y/N. If yes, please give hyperlink for webpage etc.

The Company strives for environmental sustainability and complies with all applicable laws and regulations, in all its services. It also seeks to prevent the wasteful use of natural resources and is committed to improving the environment, particularly about the emission of greenhouse gases, consumption of water and energy, and the management of waste and hazardous materials. A few examples are our initiatives on deployment of mass transport for our employees by getting into an arrangement with Bengaluru Metropolitan Transport Corporation for buses, procurement of star rated electric and electronic equipments and tree plantations inside and outside our premises. In our development process, our initiatives include adopting India Mark Design, mechanical and electronic design of electric/ hybrid vehicle and building RoHS compliance.

3. Does the company identify and assess potential environmental risks?

The nature of our business does not entail assets or processes with significant environmental footprints, and hence, the Company does not have a specific process to identify environmental risks. However, there are ongoing initiatives on energy, emissions and waste which is outlined in question 5 below. Our nature of work requires us to operate in workstations and hence office environment and safety is paramount to us. We have instituted safety policy and procedures to govern the same. We regularly train employees and monitor these to overcome hazards and threats. We take the help of external agencies to provide us with guidance for the upkeep of our process to industry standards.

4. Does the company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if yes, whether any environmental compliance report is filed?

This is not applicable.

5. Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc.? Y/N. If yes, please give hyperlink for web page etc.

We are in a knowledge intensive industry, and do not operate industrial machinery, production facilities, or other such energy intensive operations. However, as a responsible corporate citizen, we continue to pursue and adopt appropriate energy conservation measures.

Active measures taken by us towards energy conservation and carbon footprint reduction include using technology to monitor and control the power consumption of air conditioning and other related equipment, use of energy efficient light bulbs, using technology for switching off computer monitors, motion sensors for lighting controls, etc.

We undertake regular reviews of energy requirements and consumption patterns, with action plans for effective utilization of power, during peak and non-peak seasons.

We also undertake continuing education and awareness programmes among all employees on energy conservation measures that can be adopted at individual levels, to help conserve power and energy.

6. Are the Emissions/Waste generated by the Company within the permissible limits given by CPCB/ SPCB for the financial year being reported?

Yes, the emissions and waste generated by the Company are within the limits prescribed by Pollution Control Board.

7. Number of show cause/ legal notices received from CPCB/SPCB which is pending (i.e. not resolved to satisfaction) as on end of Financial Year.

None Principle 7

1. Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with:

The Company is not a member of any trade and chamber or association.

2. Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas (drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security. Water, Food Security, Sustainable Business Principles, Others)

No

Principle 8

1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof.

We have constituted a CSR committee for the purposes of recommending and monitoring the CSR initiatives of the Company. The Board on the recommendation of CSR Committee adopted a CSR Policy. The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

Our flagship programmes are Shiksha and Niramay. The primary goal of Shiksha is to provide education and skill development, especially for the disadvantaged (underprivileged) groups/communities and the differently abled. Another goal is to promote cutting edge research in emerging technologies, to benefit the society. Through Niramay, we help the needy by providing financial support for life-saving treatments, extending quality medical care in slums, geriatric care for needy elderly ladies and palliative care for the terminally ill.

2. Are the programmes/projects undertaken through in-house team/own foundation/external NGO/ government structures /any other organization?

The programmes / projects chosen are a mix of in-house, external and group level initiatives.

3. Have you done any impact assessment of your initiative? Assessments are carried out as a part of the planning and review process.

4. What is your company's direct contribution to community development projects- Amount in INR and the details of the projects undertaken?

The Company has spent an amount of Rs 574.36 lakhs including Rs 90.23 lakhs pertaining to FY 18 during this financial year. The programmes have been mainly directed towards education & research /skill development and healthcare.

5. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

We work closely with professional institutions with proven track record that mediate these initiatives to ensure that the benefits are passed on to the target community. Examples of such institutions are Kidwai Memorial Institute of Oncology, Sri Jayadeva Hospital, Baptist Hospital, Nightingales Trust, RASA (Ramana Sunritya Aalaya), Indian Institute of Science, Vishranthi Trust and Karunashraya in Bangalore, Sree Chitra Tirunal Hospital in Trivandrum, Adyar Cancer Hospital and Hindu Mission Health Services in Chennai and KEM Hospital in Pune. Our association with FAEA (Foundation for Academic Excellence and Access) is for a national mission.

Principle 9

1. What percentage of customer complaints/consumer cases are pending as on the end of financial year?

The Company has a process of obtaining customer queries, complaints and satisfaction by means of periodic interactions, emails, dedicated relationship managers, established SLAs and escalation mechanisms. These processes help the Company to resolve any dissonance with our customers in a timely manner.

2. Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A. /Remarks (additional information)

Not Applicable

3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year? If so, provide details thereof, in about 50 words or so.

There are no cases filed by any stakeholder against the Company regarding unfair trade practices, irresponsible advertising, and/or anti-competitive behavior during the last five years.

4. Did your company carry out any consumer survey/ consumer satisfaction trends?

The Company carries our periodic customer satisfaction surveys. They provide us an index of our customers' satisfaction levels along with qualitative feedback on our services.

ANNEXURE "D" TO DIRECTORS' REPORT

Annual Report on Corporate Social Responsibility (CSR)

[Pursuant to Companies (Corporate Social Responsibility Policy) Rules, 2014]

1. A brief outline of the Company's CSR Policy, including overview of the projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

Our CSR activities will be designed to:

• Serve - societal, local and national goals in all the locations where we operate.

• Create a significant and sustained impact on communities affected by our businesses.

• Provide opportunities for Tata employees to contribute to these efforts through volunteering

CSR Policy has been adopted and the same is available on the Company's Website at the following link: http://www.tataelxsi.com/company/corporate-sustainability/CSR policy.

2. The Composition of the CSR Committee:

Mr. Sudhakar Rao, Chairman (Independent Director) Mrs. S. Gopinath, Member (Independent Director) Mr. Madhukar Dev, Member (MD & CEO)

3. Average net profit of the Company for last three financial years: Rs 24,206.39 lakhs

4. Prescribed CSR Expenditure (two percent of the amount as in Item No. 3 above): Rs 484.13 lakhs

5. Details of CSR spent during the financial year:

(a) Total amount to be spent for the financial year: Rs 574.36 lakhs (Including Rs 90.23 lakhs, unspent pertaining to FY 2017-18)

(b) Amount unspent, if any: NIL

(c) Manner in which the amount spent during the financial year is detailed below:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

SI. No.

CSR Project or Activity identified

Sector in which the project is covered

Projects or Programs 1) Local area or other 2) Specify the state and other districts where projects or programs was/ were undertaken

Amount outlay (budget) project or program wise

Amount spent on the projects or programs Sub heads: 1) Direct expenditure on projects or programs 2) Overheads

Cumulative Expenditure up to the reporting period

Amount spent Direct or through implementing agency

1.

Providing Aid to Cancer Patients who could not afford the medical expenditure

Promotion of Health Care

Kidwai Memorial Institute of Oncology Bengaluru (Karnataka)

Rs 60.00 lakhs

Direct-Rs 60.00 lakhs

Rs 150. 00 lakhs

Direct- A sum of Rs 50,000/- average per patient who does not have means to provide for the treatment. The impact is expected to aid at least 120 patients for FY19. Actual impact - 481 cases.

2.

Providing Aid to Heart Patients who could not afford the medical expenditure

Promotion of Health Care

Sri Jayadeva Institute of Cardiovascular Sciences and Research, Bengaluru (Karnataka)

Rs 60.00 lakhs

Direct- Rs 60.00 lakhs

Rs 156.00 lakhs

Direct- A sum of Rs 50,000/- average per patient who does not have means to provide for the treatment. The impact is expected to aid at least 120 patients for FY19. Actual impact 284 cases.

3.

Providing Aid to Heart and Neurology Patients who could not afford the medical expenditure

Promotion of Health Care

Sree Chitra Tirunal Institute for Medical Science & Technology (SCTIMST) under DST, Trivandrum (Kerala)

Rs. 60.00 lakhs

Direct- Rs 60.00 lakhs

Rs 200.00 lakhs

Direct- A sum of Rs 50,000/- average per patient who does not have means to provide for the treatment. The impact is expected to aid at least 120 patients for FY1 9. Actual impact 365 cases.

4.

Providing Aid to Heart, Cancer and Neurology Patients who could not afford the medical expenditure

Promotion of Health Care

Baptist Hospital, Bengaluru, Karnataka

Rs 50.00 lakhs

Direct- Rs 50.00 lakhs

Rs 61 lakhs

Direct- Rs 11 lakhs for medical treatment of patients at rate of average ? 50,0007- per patient who do not have means to provide for the treatment. The impact is expected to aid at least 22 patients during FY19. Actual impact 44 cases. Direct- Rs 39 lakhs to Bangalore Baptist Hospital -Community Health Division to improve the health and well-being of women and children in Urban Slum of D J Halli, Bangalore. The intervention includes health needs in the area of basic medical, pediatric and obstetric. They also run a mobile clinic" Smile on Wheels" which is equipped with basic laboratory and ECG facilities. Actual impact 2796 cases.

5.

Providing Hospital Equipment for Health care

Promotion of Health Care

Hindu Mission Health Services Chennai, Tamil Nadu

Rs 50.00 lakhs

Direct -Rs 50.00 lakhs

? 50 Lakhs

Direct- Part financed the cost of Medical equipment required for expansion of their Hospital at Chennai, Tamil Nadu.

6.

Providing Aid to Cancer Patients those who could not afford the medical expenditure

Promotion of Health Care

Cancer Institute of Adyar, Chennai, Tamil Nadu

Rs 50.00 lakhs

Direct- Rs 50.00 lakhs

Rs 50 lakhs

Direct-A sum of average Rs 50,000/-per patient who does not have means to provide for the treatment. The impact is expected to aid at least 100 patients for FY19. Actual impact - 49 cases as on March 31, 2019.

7.

Providing Aid to Cancer, Heart & Neurology Patients who could not afford the Medical expenditure

Promotion of Health Care

King Edward memorial Hospital Pune(Maharashtra)

Rs 20.00 lakhs

Direct- Rs 20.00 lakhs

Rs 40.00 lakhs

Direct- A sum of Rs 50,000/- average per patient who does not have means to provide for the treatment. The impact is expected to aid at least 40 patients Actual impact - 37 cases as on March 31, 2019.

8.

Providing Health care. Nutrition, Counselling, livelihood etc. services to elderly destitute women.

Promotion of Health Care

Nightingales Medical Trust, Bengaluru, Karnataka

 

Direct- Rs 14.03 lakhs

Rs 14.03 lakhs

Direct: Funded Rs 14.03 lakhs to Nightingales Medical Trust for their requirement of an ambulance to their project "Sandhya Suraksha" - Home for Helpless Elderly Women for bringing them to the Home for Transit care and Home. The transit care services provide the missing elderly women with a safe place till they are reunited with their family. For the abandoned elderly women, the home will provide a new lease of life. With good nutrition, livelihood opportunities, social engagement and quality health treatment, elders will recover and will steadily enjoy better health. The talents of the elders would be utilized to run the day to day activities of the centre and would help to create belongingness and sense of dignity. The balance amount left after the procurement of Ambulance to be utilised for Medicine and Health care requirements of the elderly persons.

9.

Providing Aid to Cancer Patients those who could not afford the medical expenditure

Promotion of Health Care

V Care Foundation, Mumbai, Maharashtra

Rs 10.00 lakhs

Direct- Rs 10.00 lakhs

? 10 lakhs

Direct- V Care Foundation works closely with Tata Memorial Hospital amongst others in Mumbai. Its core services include Counselling & Emotional Support, Financial Support, Palliative, Food & Nutritional Support and Child Care Support. Actual impact - 55 cases.

10.

Aid for undertaking research

Promotion of Education

Indian Institute of Science, Bengaluru, Karnataka

Rs 50.00 lakhs

Direct- Rs 39.00 lakhs

Rs 39.00 lakhs

Visible Light Wireless Communications and Artificial Intelligence (Al)/ Machine Learning (ML) in Wireless Communications

11.

Education for ensuring employment

Promotion of Education

Pan India

Rs 21.00 lakhs

Direct- Rs 21.00 lakhs

Rs 42 lakhs

Foundation for Academic Excellence and Access (FAEA) (Implementing Agency) -Contributed to support 30 (thirty) girl Students from SC/ST communities for Under Graduate education.

12.

Training to develop life skills, holistic empowerment, confidence building, problem solving skills, social interaction skills and physical training to individuals with special needs as well as to normal individuals.

Promotion of Education

Ramana Sunritya Aalaya (RASA), Bangalore, Karnataka

Rs 10.00 lakhs

Direct- Rs 10.00 Lakhs

Rs 20.00 lakhs

Direct - Funded RASA to defray its Bangalore centre expenses for the calendar year 2019. RASA Bangalore center primarily deals with students with ADHD, Autism, Downs' Syndrome and Dyslexia. Actual impact - 30 cases.

13.

Providing Home, Medical and Education to destitute Children

Promotion of Education

Vishranthi Trust, Bengaluru, Karnataka

? 6.00 lakhs

Direct- Rs 6.00 lakhs

? 6.00 lakhs

Direct - ? 6 lakhs towards provision of ? 60,000 per child per annum to provide a child food, accommodation, supplements, medical care at Vishranthi's Children's Home - a unique experiment in Orphan and Destitute care. Actual impact - 10 cases.

14.

Promotion of road Safety

Education (promotion of road safety)

Bengaluru (Karnataka)

Rs 10.00 lakhs

Direct- Rs 9.73 lakhs

Rs 9.73 lakhs

Direct - The Company assisted the Traffic Police by reimbursing the salary of Traffic Wardens deployed in different road crossings for control of vehicular traffic and safe movement of pedestrians, ensuring road safety.

15.

Miscellaneous

Health care

Karunashraya -Bangalore Hospice Trust - a joint project of the Indian Cancer Society (Karnataka Chapter) and the Rotary Club of Bangalore Indiranagar, to provide free professional palliative care for advanced stage cancer patients who are beyond cure.

Rs 3.13 lakhs

Direct- Rs 0.37 lakhs

Rs 0.37 lakhs

Direct - For purchase of palliative medicine for critically ill cancer patients

 

TOTAL

 

 

 

Rs 460.13 lakhs

 

 

16.

Allowable expenditure (overheads) towards personnel & administration expenses for CSR team

 

 

Rs 24.00 lakhs

Overheads-? 24.00 lakhs

 

Apportioned compensation for CSR staff, travel expenses for CSR activities and the working hours utilized by Tata Elxsi personnel for supervision of the CSR activities.

 

TOTAL (A)

 

 

 

Rs 484.13 lakhs

 

 

 

UTILISTION OF UNSPENT AMOUNT -2017-18

 

 

 

 

 

 

17.

Education of drivers on safe driving byway of an app driven software

Education (promotion of road safety)

Strive an initiative of Tata Community Initiatives Trust -Pan India

Rs 150 Lakhs

Direct- Rs 90.10 Lakhs

Rs 150.10 Lakhs

The balance amount of Rs 90.10 Lakhs (unspent committed amount) was disbursed in FY19. Strive is a vocational training initiative of Tata community Initiatives Trust. The project involves a unique app driven education program for drivers on safe driving and safe road behavior. This will be a certification program for the drivers. The project is expected to go live from May, 2019.

18.

Health care

Health care

Karunashraya -bangalore hospice trust - a joint project of the Indian cancer society (karnataka chapter) and the rotary club of bangalore indiranagar, to provide free professional palliative care for advanced stage cancer patients who are beyond cure.

 

Direct- Rs 0.13 Lakhs

Rs 0.13 Lakhs

Direct - for purchase of palliative medicine for critically ill cancer patients

 

TOTAL (B)

 

 

 

Rs 90.23 Lakhs

 

 

 

TOTAL A + B

 

 

 

Rs 574.36 Lakhs

 

 

 

 

 

 

 

Responsibility statement: The CSR Committee hereby confirms that the implementation and monitoring of the CSR Policy, is in compliance with CSR objectives and Policy of the Company.

 

Madhukar Dev

Sudhakar Rao

 

Managing Director

Chairman, CSR Committee

Bengaluru, April 23, 2019

 

 

Form No. MGT -9

EXTRACT OF ANNUAL RETURN as on the financial year ended 31st March 2019

[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i)

CIN:

L85110KA1989PLC009968

ii)

Registration Date:

30.3.1989

iii)

Name of the company:

Tata Elxsi Limited

iv)

Category/ Sub-Category of the Company:

Public Company having Share Capital

v)

Address of the Registered office and Contact Details:

ITPB Road, Whitefield,

Bengaluru-560048

Tel: 080 22979123

email: [email protected]

website:www.tataelxsi.com

vi)

Whether listed or unlisted Company (Yes/No):

Listed

vii)

Name, Address and Contact details of Registrar and Share transfer Agents:

TSR DARASHAW LIMITED

6-10, Haji Moosa Patrawala Industrial Estate,

#20 Dr. E. Moses Road, Mahalaxmi,

Mumbai-400011, Tel: 022 6656 8484

email: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

SI. No.

Name and Description of the main products / services

NIC Code of the Product / Service

% to total turnover of the Company

1

Design and Development of Computer Hardware and Software

NA

96.63%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SI. No.

NAME AND ADDRESS OF THE COMPANY

CIN/GLN

HOLDING/ SUBSIDIARY/ ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

-

NA

NA

NA

NA

NA

IV. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

 i) Category-wise Share Holding

 

Category of shareholders

No. of Shares held at the beginning of the year i.e. 01.04.2018

No. of Shares held at the end of the year 31.03.2019

 

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A.

Promoters

 

 

 

 

 

 

 

 

 

(a)

Individuals /Hindu Undivided Family

0

0

0

0.00

0

0

0

0.00

0.00

(b)

Central Government /State Governments

0

0

0

0.00

0

0

0

0.00

0.00

(c)

Bodies Corporate

27755264

0

27755264

44.57

27730264

0

27730264

44.53

-0.04

(d)

Financial Institutions /Banks

0

0

0

0.00

0

0

0

0.00

0.00

(e)

Any Other (specify)

0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total (A) (1)

27755264

0

27755264

44.57

27730264

0

27730264

44.53

-0.04

(2)

Foreign

 

 

 

 

 

 

 

 

0.00

(a)

Individuals (Non-Resident Individuals/ Foreign Individuals)

0

0

0

0.00

0

0

0

0.00

0.00

(b)

Bodies Corporate

0

0

0

0.00

0

0

0

0.00

0.00

(c)

Institutions

0

0

0

0.00

0

0

0

0.00

0.00

(d)

Qualified Foreign Investor

0

0

0

0.00

0

0

0

0.00

0.00

(e)

Any Other (specify)

0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total (A) (2)

0

0

0

0.00

0

0

0

0.00

0.00

Total Shareholding of Promoter and Promoter Group (A)

27755264

0

27755264

44.57

27730264

0

27730264

44.53

-0.04

(B)

Public Shareholding

 

 

 

 

 

 

 

 

 

(D

Institutions

 

 

 

 

 

 

 

 

 

(a)

Mutual Funds/ UTI

2895693

200

2895893

4.65

1695018

200

1695218

2.72

-1.93

(b)

Financial Institutions /Banks

228017

400

228417

0.37

366456

400

366856

0.59

0.22

(c)

Central Government /State Governments

0

0

0

0.00

0

0

0

0.00

0.00

(d)

Venture Capital Funds

0

0

0

0.00

0

0

0

0.00

0.00

(e)

Insurance Companies

772442

0

772442

1.24

272892

0

272892

0.44

-0.80

(f)

Foreign Institutional Investors

0

0

0

0.00

0

0

0

0.00

0.00

(q)

Foreign Venture Capital Investors

0

0

0

0.00

0

0

0

0.00

0.00

(h)

Qualified Foreign Investor

0

0

0

0.00

0

0

0

0.00

0.00

(i)

Foreign Financial Institutions

0

2300

2300

0.00

0

2300

2300

0.00

0.00

(j)

Foreign Portfolio Investors (Corporate)

5764502

0

5764502

9.26

5950698

0

5950698

9.56

0.30

(k)

Any Other Alternate Investment Funds

481965

0

481965

0.77

948263

0

948263

1.52

0.75

Sub-Total (B)(1)

10142619

2900

10145519

16.29

9233327

2900

9236227

14.83

-1.46

(2)

Non-Institutions

 

 

 

 

 

 

 

 

 

(a)

Bodies Corporate

2556113

5102

2561215

4.11

2751297

5725

2757022

4.43

0.31

(b)

Individuals -

 

 

 

 

 

 

 

 

 

i

Individual shareholders holding nominal share capital upto Rs 1 lakh

15703482

2380595

18084077

29.04

19673368

2065389

21738757

34.91

5.87

ii

Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

3686849

0

3686849

5.92

720926

0

720926

1.16

-4.76

(c)

Qualified Foreign Investor

0

0

0

0.00

0

0

0

0.00

0.00

(d)

Any Other

0

0

0

0.00

0

0

0

0.00

0.00

i

Trusts

41316

0

41316

0.07

91044

0

91044

0.15

0.08

ii

Directors & Relatives

2200

0

2200

0.00

2200

0

2200

0.00

0.00

Sub-total (B) (2)

21989960

2385697

24375657

39.14

23238835

2071114

25309949

40.64

1.50

Total Public Shareholding (B) = (B)(1)+(B)(2)

32132579

2388597

34521176

55.43

32472162

2074014

34546176

55.47

0.04

TOTAL (A)+(B)

59887843

2388597

62276440

100.00

60202426

2074014

62276440

100.00

 

(C)

Shares held by Custodians and against which Depository Receipts have been issued

0

0

0

0.00

0

0

0

0.00

0.00

GRAND TOTAL (A)+(B)+(C)

59887843

2388597

62276440

100.00

60202426

2074014

62276440

100.00

 

ii) Share Holding of Promoters (Including promoter group)

SI. No.

Shareholder's Name

Shareholding at the beginning of the year 01.04.2018

Shareholding at the end of the year 31.03.2019

% change in shareholding during the year

 

 

No.of Shares

% of total Shares of the company

% of Shares Pledged/ encumbered to total shares

No. of Shares

% of total Shares of the company

% of Shares Pledged/ encumbered to total shares

1

Tata Sons Limited

26,295,264

42.22

0.00

26,295,264

42.22

0.00

0.00

2

Tata Investment Corporation Limited

1,460,000

2.34

0.00

1,435,000

2.30

0.00

-0.04

 

 

27,755,264

44.57

0.00

27,730,264

44.53

0.00

-0.04

iii) Change in Promoter's Shareholding (please specify, if there is no change)

SI. No.

Name of the Shareholder

Date

Reason

Shareholding

Cumulative Shareholding during the year

No. of Shares

% of total Shares of the company

No. of Shares

% of total Shares of the company

1

Tata Investment Corporation Limited*

01-Apr-2019

At the beginning of the year

1,460,000

2.34

1,460,000

2.34

13-Feb-2019

Decrease

(17,829)

-0.03

1,442,171

2.32

15-Feb-2019

Decrease

(7,171)

-0.01

1,435,000

2.30

31-Mar-2019

At the end of the year

1,435,000

2.30

1,435,000

2.30

* part of the promoter group.

Note : Except for the above there is no change in the holding of the Promoter and/ or Promoter Group during FY 2018-19

iv) Shareholding Pattern of top ten shareholders (other than Directors. Promoters )

SI. No.

Name of the Shareholder

No. of shares as on 01.04.2018

No. of shares as on 31.03.2019

Net Changes

% to Capital

1

J P Morgan Funds

1,779,741

800,311

-979,430

1.29

2

Avendus Enhanced Return Fund

361,050

685,790

324,740

1.10

3

Matthews India Fund

0

578,649

578,649

0.93

4

Motilal Oswal Midcap 100 Etf

683,516

547,039

-136,477

0.88

5

Acadian Emerging Markets Small Cap Equity Fund Lic

72,462

546,494

474,032

0.88

6

Tata Young Citizens Fund

607,000

342,000

-265,000

0.55

7

Ishares Core Emerging Markets Mauritius Co

259,235

333,389

74,154

0.54

8

Chetan Jayantilal Shah

350,000

300,000

-50,000

0.48

9

Ups Group Trust

247,200

295,127

47,927

0.47

10

State Bank Of India

107,000

262,000

155,000

0.42

11

Sundaram Mutual Fund A/C

Sundaram Long Term Micro Cap

Tax Advantage Fund Series Iv

158,515

258,485

99,970

0.42

12

The Master Trust Bank Of Japan, Ltd As Trustee Of Jpm BricsS Mother Fund

0

250,630

250,630

0.40

13

Slg International Opportunities.L.P

247,813

247,813

0

0.40

14

Emerging Markets Core Equity Portfolio (The Portfolio) Of Dfa Investment Dimensions Group Inc. (Dfaidg)

268,658

226,824

-41,834

0.36

15

Life Insurance Corporation Of India

772,442

172,892

-599,550

0.28

16

Kotak Equity Arbitrage Fund

299,200

134,800

-164,400

0.22

17

Lakshmi Capital Investments Limited

315,000

96,226

-218,774

0.15

 

*The shares of the Company are traded on daily basis and hence the datewise increase/decrease in shareholding is not indicated. Shareholding is consolidated based on permanent account number (PAN) of the shareholder

v) Shareholding of Directors and Key Managerial Personnel :

SI. No.

Name of the Shareholder

Date

Reason

Shareholding

Cumulative Shareholding

No.of Shares

% of total Shares of the company

No.of Shares

% of total Shares of the company

1

Mr. Madhukar Rajendra Dev

1-4-2018

At the beginning of the year

2200

0.00

2200

0.00

 

Increase/Decrease during the year

0

0.00

0

0.00

31-3-2019

At the end of the year

2200

0.00

2200

0.00

2

Mr. G Vaidyanathan

1-4-2018

At the beginning of the year

104

0.00

104

0.00

 

Increase/Decrease during the year

0

0.00

0

0.00

31-3-2019

At the end of the year

104

0.00

104

0.00

3

Mr. Muralidharan H. V

1-4-2018

At the beginning of the year

100

0.00

100

0.00

 

Increase/Decrease during the year

0

0.00

0

0.00

31-3-2019

At the end of the year

100

0.00

100

0.00

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment:

 

Secured Loan excluding Deposits

Unsecured Loans

Deposits

Total Indebtedness

Indebtedness at the beginning of the financial year

NIL

NIL

NIL

NIL

i) Principal Amount

NIL

NIL

NIL

NIL

ii) Interest due but not paid

NIL

NIL

NIL

NIL

Mi) Interest accrued but not due

NIL

NIL

NIL

NIL

Total (i + ii + iii)

NIL

NIL

NIL

NIL

Change in Indebtedness during the financial year

NIL

NIL

NIL

NIL

i) Addition

NIL

NIL

NIL

NIL

ii) Reduction

NIL

NIL

NIL

NIL

Net Change

NIL

NIL

NIL

NIL

 

Secured loan excluding Deposits

Unsecured Loans

Deposits

Total Indebtedness

Indebtedness at the end of the financial year

NIL

NIL

NIL

NIL

i) Principal Amount

NIL

NIL

NIL

NIL

ii) Interest due but not paid

NIL

NIL

NIL

NIL

iii) Interest accrued but not due

NIL

NIL

NIL

NIL

Total (i + ii + iii)

NIL

NIL

NIL

NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-Time Directors and / or Manager:

SI. No.

Particulars of Remuneration

Name of MD/WTD/ Manager

Total Amount

Mr. Madhukar Dev (MD&CEO)

Amount (Rs in Lakhs)

Amount (Rs in Lakhs)

1

Gross Salary

313.90

313.90

 

a) Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961

 

 

 

b) Value of perquisites u/s 17(2) Income Tax Act, 1961

 

 

 

c) Profits in Lieu of Salary u/s 17(3) of the Income tax Act, 1961

 

 

2

Stock Option

 

 

3

Sweat Equity

 

 

4

Commission

375.00

375.00

 

as % of profit

 

 

 

others, specify

 

 

5

Others, specify (Contributions to PF and super annuation)

34.34

34.34

 

Total (A)

723.24

723.24

 

Ceiling as per Act (5% of the profit calculated u/s 198 of the Companies Act, 2013)

 

2226.30

B. Remuneration to other Directors :

Rs In Lakhs

SI. No.

Particulars of Remuneration

Mr. P. Mc Goldrick

Mrs. Shyamala Gopinath

Prof. M.S. Ananth

Mr.Sudhakar Rao

Mr. N.G. Subramaniam

Mr. Ankur Verma

Dr. Gopichand Katragadda*

Total Amount

1

Independent Directors

 

 

 

 

 

 

 

 

Fee for attending Board / Committee Meetings

2.25

2.40

1.65

1.95

NA

NA

NA

8.25

Commission

92.00

116.00

69.00

75.00

 

 

 

352.00

Others, Please Specify

 

 

 

 

 

 

 

 

Sub Total (1)

 

 

 

 

 

 

 

360.25

2

Other Non - Executive Directors

 

 

 

 

 

 

 

 

Fee for attending Board / Committee Meetings

NA

NA

NA

NA

1.05

0.30

0.30

1.65

Commission

 

 

 

 

-

 

-

-

Others, Please Specify

 

 

 

 

 

 

 

-

Sub Total (2)

 

 

 

 

 

 

 

1.65

Total (1) + (2)

 

 

 

 

 

 

 

361.90

Total Managerial Remuneration (Commission)

 

 

 

 

 

 

 

352.00

Overall Ceiling as per the Act(1 % of the profit calculated u/s 198 of the Companies Act, 2013

 

 

 

 

 

 

 

445.26

* Relinquished the office of Directorship of the Company w.e.f 13-07-2019. C. Remuneration to KMPs other than MD / Manager / WTD :

SL No.

Particulars of Remuneration

Mr. G. Vaidyanathan (Company Secretary)

Mr. H.V.Muralidharan (Chief Financial Officer)

Total

Amount (Rs In Lakhs)

Amount (Rs In Lakhs)

Amount (Rs In Lakhs)

1

Gross Salary

 

 

 

 

a) Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961

79.93

103.35

183.28

 

b) Value of perquisites u/s 17(2) Income Tax Act, 1961

 

 

 

 

c) Profits in Lieu of Salary u/s 17(3) of the Income tax Act, 1961

 

 

 

2

Stock Option

 

 

 

3

Sweat Equity

 

 

 

4

Commission

 

 

 

 

as % of profit

 

 

 

 

others, specify

 

 

 

5

Others, specify (contributions to PF and Superannuation)

3.43

6.73

10.16

 

Total

83.36

110.08

193.44

PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES

There were no Penalties, Punishments or Compounding of Offences during the year ended March 31, 2019.

SECRETARIAL AUDIT REPORT

For the financial year ended March 31, 2019

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration  of Managerial Personnel) Rules, 2014]

TO THE MEMBERS OF TATA ELXSI LIMITED

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Tata Elxsi Limited, (Hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Tata Elxsi Limited's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit and as per the explanations given to us and the representations made by the Management, We, hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2019 generally complied with the statutory provisions listed hereunder and also that the company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minutes' books, forms and returns filed and other records made available to us and maintained by Tata Elxsi Limited for the financial year ended on March 31, 2019 according to the applicable provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts ( Regulations) Act, 1956 ('SCRA') and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign

Direct Investment, Overseas Direct Investment and External commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act,1992("SEBI Act"):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insiders Trading) Regulations, 2015

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; and

(vi) Other Laws as informed and certified by the management of the company which are specifically applicable to the company based on their sector/industry are:

(a) The Information Technology Act, 2000 and the Rules made thereunder.

(b) Policy relating to the Software Technology Park of India and its regulations

(c) The Indian Copyright Act, 1957

(d) The Patents Act, 1970

(e) The Trade Marks Act, 1999

(f) The Special Economic Zone Act 2005 & the rules made thereunder, (vii) Other Laws:

(a) The Shops and Establishment Act 1953

(b) The Water (Prevention and Control of Pollution) Act, 1974 & Rules there under

(c) The Sexual harassment of Women at Workplace (Prevention, Prohibition& Redressal) Act 2013

(d) The Payment of Bonus Act, 1965

(e) The Payment of Gratuity Act, 1972

(f) The Employees Provident Funds and Miscellaneous Provisions Act, 1952

(g) The Contract Labour (Regulations & Abolition) Act, 1970

We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards of The Institute of Company Secretary of India with respect to Board and General meeting

ii. SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.

During the period under review and as per the explanation and clarifications given to us and the representations made by the Management, the Company has generally complied with the provisions of the Act, Rules, Regulations,

Guidelines, Standards, etc. mentioned above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provision of the Act.

Adequate notice was given to all Directors at least seven days in advance to schedule the Board Meetings. Agenda and detailed notes on agenda were sent in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decisions at the Board meeting and committee meeting are carried out unanimously.

We, hereby certify that none of the Directors on the Board of the Company for the Financial Year ending on March 31, 2019 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

We further report that as per the explanations given to us and the representations made by the Management and relied upon by us there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

 

For Jayashree Parthasarathy & Co.

 

Company Secretaries

 

Jayashree Parthasarathy

 

Proprietrix,

 

FCS No. 4610;CP NO. 1988

Place: Bengaluru

 

Date: April 24, 2019

 

Note: This report is to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report.

ANNEXURE: A

TO THE MEMBERS OF TATA ELXSI LIMITED

My report on even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on their secretarial records based on my Audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on the random test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices followed provide a reasonable basis for my opinion.

3. The correctness and appropriateness of the financial records and Books of accounts of the company have not been verified.

4. Wherever required, we have obtained the Management representation about the compliances of laws. Rules, Regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. Our examination is limited to verification of procedure on random test basis.

6. The Secretarial Audit is neither an assurance as to future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For Jayashree Parthasarathy & Co

Company Secretaries

Jayashree Parthasarathy

Proprietrix,

FCS No 4610;CP NO. 1988

Place: Bengaluru

Date: April 24, 2019

 


Mar 31, 2018

DIRECTORS'' REPORT TO THE MEMBERS

1. The Directors are pleased to present the Twenty Ninth Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2018.

2. Result of Operations - Extract

Rs, In Crores

2017-18

2016-17

Revenue from Operations

1386

1237

Other income

43

(5)

Total Income

1429

1232

Profit before financial expenses, depreciation and exceptional items

389

291

Less: Financial expenses

-

-

Depreciation/Amortization

25

27

Profit before tax

364

264

Less: Provision for Income tax

124

89

Profit after tax

240

175

Other comprehensive income

1

-3

Total comprehensive income

241

172

Add: Profit brought forward

439

329

Less: Dividend and Dividend Tax*

60

52

Transfer to General Reserve

10

10

Balance Profit carried to Balance Sheet

610

439

*Pertains to previous years

3. Dividend

Your Directors recommend for your approval, a dividend of 110% (Rs, 11/- per share) for the year ended 31st March, 2018 on 6,22,76,440 equity shares of Rs, 10/- each fully paid-up, compared to 160% (Rs, 16/- per share) on 3,11,38,220 equity shares of Rs, 10/- each fully paid-up in the previous year.

This will involve an outgo of Rs, 82.60 crores compared to Rs, 59.96 crores in the previous year, including dividend distribution tax.

The Company''s Dividend Distribution Policy (DDP) is available in the Investors section of the company website: http://www.tataelxsi.com/investors/TataElxsi-dividend-distribution-policy.pdf

4. Capitalization of Reserves

Your Directors at their meeting held on July 27, 2017 had recommended the capitalization of reserves of the Company for issuance of Bonus Shares to the shareholders in the ratio of 1 (one) bonus equity share of ''10/- each fully paid-up for every 1(one) existing equity share of Rs,10/- each fully paid-up (in the ratio of 1:1) held by the shareholders as on the "Record date". The said capitalization was approved by the members vide postal ballot.

The Allotment Committee at its meeting held on September 20, 2017 approved the allotment of 3,11,38,220 equity shares of Rs,10/- each fully paid-up as Bonus equity shares to those shareholders/beneficiaries whose name appeared on Register of Members/Depositories as on the record date i.e., September 19, 2017 and has been duly listed with BSE and NSE.

The trading of the said Bonus Equity Shares was granted by Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on and from September 27, 2017 respectively.

5. Reserves

Your Directors have approved a transfer of Rs, 10 crores to the General Reserves for the year ended 31st March, 2018, as against an amount of Rs, 10 crores in the previous year.

6. Review of Operations

The total income during the year under review increased by 16 % from Rs, 1232 crores in the previous year to Rs, 1429 crores.

The Profit Before Tax (PBT) increased by 38 % from Rs, 264 crores in the previous year to Rs, 364 crores. The Profit After Tax (PAT) increased by 38 % from Rs, 175 crores in the previous year to Rs, 240 crores.

During the year under review, your Company continued its momentum of growth despite geo-political uncertainties, considerable headwinds in the business environment and currency volatility in some currencies.

7. MANAGEMENT DISCUSSION AND ANALYSIS Industry Outlook

According to NASSCOM, India''s IT-BPM industry (excl. eCommerce) is expected to grow 8% in FY18 to $ 167 billion from $ 154 billion in FY17.

Engineering Research & Development continues to be the fastest growing segment at over 12%, driven by global OEMs increasingly embedding software & services into their products.

India continues to be the core for digital innovation with a rich ecosystem of start-ups, tech providers and services providers engaging in global delivery and investing in IP, solutions and Centers of Excellence (CoEs).

Business Analysis

Our operations are classified into two business segments, i.e. Software Development & Services and Systems Integration & Support.

Software Development and Services

This business segment grew by 14% from Rs, 1171 crores in the previous year to Rs, 1329 crores in FY18. The segment profit increased by 37% from Rs, 290 crores in the previous year to Rs, 396 crores during FY18.

Tata Elxsi has consistently maintained leadership positions globally in the Automotive and Broadcast industries.

Tata Elxsi''s integrated Design and Technology teams help enterprises re-imagine their products and services - from strategy, consumer research and insights, to service and experience design, technology implementation, integration, launch and beyond.

Your Company''s design capabilities differentiates it from the competitors and its leadership in design and other verticals has helped it retain the customer''s trust and exceed the sector benchmark over the years.

Leveraging Digital

Your Company has been investing in key digital technologies over the past few years, through Centers of Excellence in areas such as AI and Analytics, IoT and Automation, which have helped enhance the service portfolio, not only for existing customers, but also to win new customers across the world.

As an example, Panasonic Appliances has selected your company as their strategic global R&D partner. Your company has established an Offshore Development Center (ODC) to enable Panasonic to bring in advanced technologies such as robotics and AI to create smart and futuristic products for global markets.

During this financial year, we launched a Centre of Excellence (CoE) for Virtual and Augmented Reality, in partnership with Unity Technologies - the company behind the world''s leading platform used to create real-time interactive 2D, 3D, VR and AR experiences. The CoE will serve as a global innovation platform, enabling it to support its customers in developing new applications across industries for marketing, promotions, operations and workforce training.

Your Company is also investing in developing products and solutions that leverage digital technologies for key industry verticals - such as AUTONOMAI, Tata Elxsi''s software platform for driverless cars; and FalconEye, an integrated test automation and Quality of Experience monitoring platform for the online video and broadcast industry.

The software development and services segment consists of two business divisions that provide technology and design services respectively to customers across industries.

Embedded Embedded Product Design

The Embedded Product Design (EPD) division provides technology consulting, new product design, development, and testing services for the automotive, broadcast, consumer electronics, healthcare, telecom and transportation industries.

We have been awarded the ''Best Electronics Design Company'' award at the 3rd edition of Electronics Maker Best of Industry Awards 2017. The award honors leading performers in the industry, best Individual Contributors, Organizations that drive the industry forward, and provide them with a platform to highlight their achievements & product successes.

The key sectors addressed by EPD include:

Transportation

Tata Elxsi works with leading OEMs, system suppliers, and software and silicon providers in the automotive and transportation industries for R&D, design and product engineering services from architecture to launch and beyond.

We bring together expertise in mechanical, software and electronics development, domain experience across Infotainment, Active Safety, Telematics, Electric and Hybrid power trains, Body & Chassis systems, along with technologies such as artificial intelligence, analytics, cloud and IoT.

We are among the few companies in the world to be accredited with Automotive SPICE Level 5 certification, which is a testimony to the quality of our technology and software development.

We are proud to have been awarded the Jaguar Land Rover Supplier Excellence Award for 2017. This award recognizes our excellent on-time delivery, continuous quality, technical innovation and consistently meeting production and design challenges. This is a testimony to the customer focus and delivery excellence that Tata Elxsi brings to its clients across the world.

Over the next decade there will be a major shift to Autonomous vehicles in key markets. We have invested in internal innovation and capability building in these area, along with strategic investments in creating IPs and solutions, and are well positioned to addressing this emerging area.

We have licensed our advanced autonomous vehicle middleware platform "AUTONOMAI" to one of the world''s top five automotive OEMs for their driverless car R&D.

As the number of connected cars grow, security becomes even more critical to ensure a safe driving experience while still providing the connectivity that consumers desire. Tata Elxsi has partnered with leading technology providers such as Irdeto and BlackBerry Technology Solutions to help companies design and develop secure, mission-critical solutions for the automotive industry.

Tata Elxsi is member and active contributor in leading consortiums related to the automotive industry and technology standards bodies such as AUTOSAR.

We participated in leading trade shows and events across geographies, such as the CES 2018 (Consumer Electronics Show) in Las Vegas, China International Connected & Autonomous Vehicles 2017 in Shanghai and VDI ELIV in Germany, where we showcased our capabilities and new product offerings for autonomous vehicles, connected cars and next-gen infotainment.

Broadcast and Communications

Tata Elxsi addresses the complete product development lifecycle from R&D, new product development and testing to maintenance engineering for Broadcast, Consumer Electronics and Communications.

The Broadcast and Communications industries are rapidly converging with Broadcasters & Telecom operators both vying for share of consumer wallet for voice, data, and content services.

Your Company is at the forefront of enabling digital transformation for leading media companies and operators across the world, helping them develop innovative services and applications that create subscriber stickiness and drive revenue growth.

Tata Elxsi has been chosen by Airtel as a technology partner for system integration for their Internet TV. Tata Elxsi has developed and integrated key software components to ensure that the Android TV application suite provides a seamless user experience whether the viewer accesses online or offline content.

Across the world, consumers are increasingly preferring direct consumption of content over-the-top (OTT) via devices such as Smart TVs, Mobiles and Tablets. Tata Elxsi''s OTT services helps customers launch multi-platform OTT services, supported by tools for content analytics, content discovery, Ad integration and 24x7 monitoring support.

Tata Elxsi has partnered with ZEE5, the newly launched digital entertainment destination by Zee Entertainment for multi-platform front-end application development of its new digital entertainment platform. This includes multilingual front-end user experience and next generation voice-based user interfaces across devices.

Globally, telecom operators are moving towards virtualization and creating Software Defined Networks (SDN) to reduce capital & operating expenditures.

Tata Elxsi has a comprehensive portfolio of SDN and virtualization services that enable global customers to deliver business service agility in their next generation networking technology solutions, and is engaged with leading operators in these areas.

We continue to participate in leading international industry events such as IBC 2017 (International Broadcasting Convention), to reiterate our established presence and brand in these industries.

Industrial Design and Visualization

Tata Elxsi helps customers develop enduring brands and products by using design as a strategic tool for business success. Our expertise extends across consumer insight, branding, industrial design, visual design & merchandising, design engineering and manufacturing support.

Our design services span digital and physical aspects, to provide users with products, solutions and services that humanize the complexity of the underlined technologies and make them intuitive and easy to use, driving customer delight, loyalty and business growth.

Together with our clients we simplify and enhance service value by analyzing problems, identifying opportunities, improving processes and creating unified solutions, meaningful interactions, spaces and products.

As an example, your Company has been selected by the Airports Authority of India (AAI) to improve passenger experience for all AAI managed airports. As a strategic design partner, we will help AAI to provide a seamless passenger travel experience and will be primarily responsible to set the way finding and information design guidelines for all AAI airports coming up in the future. We have already commenced work to redefine the passenger experience for 10 airports - Goa, Kolkata, Varanasi, Lucknow, Chennai, Bhubaneshwar, Pune, Trivandrum, Coimbatore, and Guwahati.

Your Company has been awarded India''s Best Digital Design Studio 2017 by Pool magazine for our exceptional work delivered in digital design for Kochi Metro.

It was also awarded with the ''Interaction Design Award'' and ''Overall Category Winner in Visual Communication'' at the CII Design Excellence Awards 2017. These awards acknowledge and celebrate outstanding design and innovation, and reflect the high quality of our work and our strong commitment to consumer-focused innovation.

Systems Integration and Support

During the year under review, our Systems Integration & Support segment reported a turnover of Rs, 57crores and profit of Rs, 8 crores.

We implement and integrate complete systems and solutions for specialized applications such as High-Performance Computing, Computer Aided Design, and Virtual Reality. We also provide Professional Services for maintenance and support of such installations in India and key overseas markets.

We have also expanded our solution portfolio, with technologies like 3D printing to cater to emerging industry needs.

We continue to focus on increasing the share of software sales, value-added systems integration and support services in this segment, for improved margins.

Threats, concerns and risks

While 87% of your Company''s revenue comes from outside India, we foresee minimized impact on our cost structures as the majority of the delivery team is based in India.

Tata Elxsi''s revenue is well distributed between Euro, GBP and US dollar currencies, which protects us from currency related risks arising from any single currency. We also have a hedging policy in place to manage foreign exchange risk.

Despite the uncertain political climate in Eurozone, the confidence in the economy remains high. Economic confidence across the 19 countries that use the euro currency is at its highest in more than 17 years, according to a survey published by the European Commission.

The Eurozone grew faster than the US region in 2017 and is expected to grow further in 2018. For Tata Elxsi, Europe remains another important customer region, and positive economic sentiments will have positive impact towards our demand generation, despite UK leaving the European Union (EU).

The company has consciously built an offshore oriented delivery model to derisk potential visa and foreign policy related uncertainties in key overseas geographies.

Internal Control Systems and their adequacy

We believe that internal control and risk management are necessary prerequisites of the principle of governance. Our Management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business which provides assurance on the efficiency of operations and security of assets. We have an effective internal control which ensures that all our assets are safeguarded and protected against any losses.

We have appointed Deloitte Haskins & Sells LLP to oversee and carry out quarterly internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the CFO and MD and their audit plans are approved by the Audit Committee. Over the years, the internal audit has been oriented towards the review of internal controls in its operations such as revenue, legal & statutory compliance, accounting and finance, procurement, employee engagement, IT processes and information security etc.

Based on the internal audit reports, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Internal Audit Reports along with corrective actions are discussed with the management and are reviewed by the Audit Committee. Suggestions for improvement are considered and the Audit Committee follows up on corrective action.

Financial Analysis

Particulars

2017-18

2016-17

Change over previous year %

Percentage of Income

2017-18

2016-17

'' Crs

Sales and services

1386

1237

12.05

96.99

100.41

Other income

43

(5)

960.00

3.01

-0.41

Total Revenues

1429

1232

15.99

100.00

100.00

Cost of sales

77

76

1.32

5.39

6.17

Personnel expenses

749

666

12.46

52.41

54.06

Financial expenses

-

-

-

-

-

Depreciation/ Amortization

25

27

-7.41

1.75

2.19

Other expenses

214

199

7.54

14.98

16.15

Total Expenditure

1065

968

10.02

74.53

78.57

Profit before tax and exceptional items

364

264

37.88

25.47

21.43

Tax expenses

124

89

39.33

8.68

7.22

Profit after tax for the year

240

175

37.14

16.79

14.21

Analysis of Overheads

2017-18

2016-17

Variance %

Particulars

Rs, Crs

Rs, Crs

Operating lease rent

17.04

16.15

5.51

Communication expenses

10.95

10.80

1.39

Travel and conveyance

74.29

64.85

14.55

Consultant fees

50.88

53.06

(4.11)

Significant Ratio Analysis

Particulars

Unit

31.03.18

31.03.17

Earnings before interest, depreciation and tax / Sales

%

28.08

23.53

Profit before taxes / Sales

%

26.25

21.36

Profit after taxes / Sales

%

17.32

14.13

Current Ratio

No. of times

4.23

4.30

Earnings per share

''

38.54

28.07

Human Resources

Your Company recognizes the critical importance of its human capital. As a technology-led design company, we continue to focus on attracting and retaining top talent.

Your Company undertakes significant initiatives to increase effectiveness and efficiency through Leadership training, Performance management, Talent development, Employee engagement and Succession planning.

Your Company believes in Diversity & Inclusion and is committed to the principle of Equal Employment Opportunity for all employees.

We have been awarded the STPI IT Export Award 2016-17 for ''High growth in Women Empowerment - IT'' in the category of over 1000 employees. About 25% of our total workforce comprises of female employees, underscoring the emphasis that Tata Elxsi places on providing equal opportunities for its workforce.

Our total headcount, excluding associates, was 5287 as of March 31, 2018.

Quality initiatives

We have instituted strong quality processes in the execution of our software development projects, and I implemented robust information security management processes to assure our global customer base of the required level of confidentiality and protection of data and information. To this effect, we have been assessed and certified organization wide for ISO 9001:2015 and ISO 27001:2013 and our systems are SEI CMMi L5 compliant. Additionally, we have been audited and certified for industry-specific standards in the design and development of medical devices with ISO 13485:2012 certification, and for our transportation business, we have Automotive SPICE® Level 5 certification.

8. Directors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. N.G. Subramaniam retires by rotation and being eligible, offers himself for re-appointment.

During the year under review, Six (6) Board meetings were held and have been well attended by the Directors. The calendar of meetings for the year 2018-19 has been circulated to all the directors detailing the schedule of Board and Committee meetings during 2018-19.

The Independent Directors have submitted their declaration that they fulfill the requirements as stipulated in Section 149 (6) of the Companies Act, 2013. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013 the Independent Directors had a separate meeting on 26th April, 2017.

During the year under review, Mr. K Ramaseshan, the then Chief Financial Officer, tendered his resignation from the services of the Company with effect from June 01, 2017.The Board, on the recommendation of the Audit Committee, had at its meeting held on July 27, 2017 appointed Mr. Muralidharan H.V as the Chief Financial Officer (CFO) of the Company with effect from July 27, 2017.

Pursuant to the provisions of section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Mr. Madhukar Dev, MD & CEO; Mr. Muralidharan H.V, Chief Financial Officer (CFO) and Mr. G Vaidyanathan, Company Secretary.

9. Directors'' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2017-18.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

(c) The Directors had taken proper and sufficient care, for the maintenance of adequate accounting records, in accordance with the provisions of Companies Act 2013, for safeguarding the assets and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the annual accounts on a going concern basis.

(e) The directors had laid down internal financial controls to be followed by us and that such internal Controls are adequate and were operating effectively.

(f) The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

10. Particulars on Remuneration

The statement showing the names of the top ten employees in terms of remuneration drawn and the information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors'' Report and have not been attached. However, in terms of first proviso to Section 136(1) the particulars as referred above are available for inspection at our Registered office during business hours on working days, up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under:

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam*

-

Mr. Patrick McGoldrick

10.04

Mrs. S. Gopinath

13.26

Dr. G Katragadda*

-

Prof. M.S. Ananth

6.83

Mr. Sudhakar Rao

10.44

Executive Director

Mr. Madhukar Dev, MD & CEO

84.66

For Non-Executive Directors (NEDs) only Commission is considered. *No Commission was provided for the year 2017-18

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. N G Subramaniam1

-

Mr. Patrick McGoldrick

96.77

Mrs. S. Gopinath

54.61

Dr. G Katragadda**

-

Prof. M.S. Ananth

139.00

Mr. Sudhakar Rao2

-

Mr. Madhukar Dev, MD & CEO

18.32

Mr. K. Ramaseshan, CFO*

-

Mr. Muralidharan H.V, CFO*

-

Mr. G Vaidyanathan, Company Secretary

27.66

*since the information is part of the year, either current or past, the same is not comparable **since no commission was provided for 2017-18.

(iii) The percentage increase in the median remuneration of employees in the financial year: 9%

(iv) The number of permanent employees on the rolls of company: 5287

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than managerial personnel in 2017-18 was 11%. Percentage increase in the managerial remuneration for the year was 19%.

(vi) The Company hereby affirms that the remuneration is as per the remuneration policy of the company.

The Board has adopted a Remuneration Policy as also the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to our Managing Director, Key Managerial Personnel and other officers. The Charter lays down the Rights, Roles and Responsibilities of the NRC. A Policy on Board diversity has also been adopted by the Board. A comprehensive Governance Guidelines for Board effectiveness has also been adopted by the Board on the recommendation of NRC. The Guidelines lay down the following:

13. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis. More details are given under Section-6 of Corporate Governance Report.

14. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company''s website at (http://tataelxsi.com/company/social-responsibility.html). The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-C. The detail of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

15. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors'' Certificate regarding Compliance to Corporate Governance requirements are part of this Annual Report.

16. 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, Ms. Jayashree Parthasarthy, a Company Secretary-in-Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Audit for the year ended 31st March, 2018 is attached to the Directors'' Report at page No. 36.

17. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints under the above Act.

No complaints have been raised during the year 2017-18.

18. Vigil Mechanism

Our company has established a "Vigil Mechanism" for its employees and Directors, enabling them to report any concerns of unethical behavior, suspected fraud or violation of the Company''s ''Code of Conduct''.

To this effect, the Board has adopted a ''Whistle Blower Policy'' (WBP), which is overseen by the Audit Committee. The policy provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review.

The said policy has been posted on our intranet where all the employees have access. Our Company conducts ''Policies Awareness Campaign'' regularly for its employees at its various centers, and the WBP features in these campaigns.

19. Others

There are no loans, guarantees and investments made by us u/s 186 of the Companies Act, 2013 during the year under review.

The extract of Annual Return in MGT-9 is attached and forms part of the Directors'' Report. We have neither accepted nor renewed any deposit during the year under review.

The Unclaimed Dividend in respect to the financial year 2010-11 is due for remittance to Investors'' Education & Protection Fund (IEPF) on August 27, 2018 in terms of Section 125 of the Companies Act, 2013.

There are no material changes and commitments affecting the Company''s financial position between the end of the financial year to which this financial statement relates and the date of this report.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred 254,226 equity shares pertaining to those shareholders who have not claimed their dividend for 7 consecutive years since 2009 and 2010, to the IEPF account on 30th November, 2017.

20. Auditors

M/s BSR & Co. LLP, Chartered Accountants, the statutory auditors of the company have been appointed at the 28th Annual General meeting held on April 27, 2017 for a period of 5 years from the conclusion of 28th Annual General Meeting up to the conclusion of the 33rd Annual General meeting to be held in the year 2022, whose re-appointment is to be ratified at the ensuring Annual General Meeting. Accordingly, ratification of the reappointment is included in the Notice to this Annual General Meeting.

21. Acknowledgements

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors

N.G. Subramaniam

Chairman

Bengaluru, April 26, 2018


Mar 31, 2017

DIRECTORS'' REPORT TO THE MEMBERS

1 The Directors are pleased to present the Twenty Eighth Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2017.

2. Result of Operations - Extract

Rs,In Crores

2016-17

2015-16

Revenue from Operations

1233.04

1075.21

Other income

16.37

11.86

Total Income

1249.41

1087.07

Profit before financial expenses, depreciation and exceptional items

288.42

258.95

Less: Financial expenses

-

-

Depreciation

26.92

22.61

Profit for the year

261.50

236.34

Less: Provision for Income tax

88.21

81.53

Profit after tax

173.29

154.81

Add: Profit brought forward

277.21

184.86

Amount available for appropriation

450.50

339.67

Dividend on Equity Shares

-

43.59

Tax on Dividend

-

8.87

General Reserve

10.00

10.00

Balance Profit carried to Balance Sheet

440.50

277.21

3. Dividend

Your Directors recommend for your approval, a dividend of 160% (Rs, 16/- per share) for the year ended 31st March, 2017, compared to 140% (Rs,14 per share) in the previous year.

This will involve an outgo of Rs, 59.96 crores compared to Rs, 52.46 crores in the previous year, including dividend distribution tax.

The Company has adopted a Dividend Distribution Policy (DDP), a copy of which is available in the Investors section of the company website: https://tataelxsi.com/investors/investor-relations.html.

4. Reserves

Your Directors have approved a transfer of Rs, 10 crores to the General Reserves for the year ended 31st March, 2017, as against an amount of Rs,10 crores in the previous year.

5. Review of Operations

The total income during the year under review increased by 15% from Rs, 1087.07 crores in the previous year to Rs, 1249.41 crores.

The Profit Before Tax (PBT) increased by 11% from Rs, 236.34 crores in the previous year to Rs, 261.50 crores. The Profit After Tax (PAT) increased by 12% from Rs, 154.81 crores in the previous year to Rs, 173.29. Crores.

During the year under review, your Company continued its momentum of growth despite the global slowdown in IT and R&D spend, and adverse currency impact, especially with the British Pound, which depreciated over 20%, during the year.

The growth was driven primarily by Your Company''s concerted effort in growing its revenues from design and technology services, and focusing on select industry segments. This was supported by effective cost control and improved utilization.

6. MANAGEMENT DISCUSSION AND ANALYSIS

Industry Outlook

In FY2017, IT-BPM exports from India is expected to reach USD 117 billion, a 7.6% year-on-year growth. ER&D (Engineering Research & Development) continues to be the fastest growing segment at 10.5%, driven by global OEMs increasingly embedding software & services into their products.

Business Analysis

Our operations are classified into two business segments, i.e. Software Development & Services and Systems Integration & Support.

Software Development and Services

This business segment grew by 15.7% from Rs, 1008.17 crores in the previous year to Rs, 1166.45 crores in FY17. The segment profit increased by 10.5% from Rs, 259.66 crores in the previous year to Rs, 286.97 crores during FY17.

The software development and services segment consists of two distinct business divisions:

Embedded Product Design

The Embedded Product Design (EPD) division provides technology consulting, new product design, development, and testing services for the broadcast, consumer electronics, healthcare, telecom and transportation industries.

We see an exponential increase in the technological complexity required to develop and deliver new products and services. In addition, advanced technologies like Artificial Intelligence, Virtual Reality, Cloud based applications and IoT (Internet of Things) are being integrated into consumer contexts, services and products.

Your company is actively investing in developing capabilities in these technologies and providing solutions and services for the emerging technologies such as IoT (Internet of Things), cloud, mobility, and artificial intelligence.

Customer experience is going to be the key differentiator for businesses of the future. The ability to provide users with products, solutions and services that humanize the complexity of the underlying technologies and make them intuitive and easy to use will drive customer delight, loyalty and business growth.

This presents us with a unique opportunity to leverage our technological capabilities, user centric design and creative experience, and position ourselves as an integrated design and technology services provider.

Tata Elxsi was awarded the ''Best in Engineering Innovation'' award by Electronics Maker at the Best of Industry Awards ceremony 2016, in recognition of our excellence in delivering innovation to customers, including technology consulting, new product design, development, and testing services.

The key sectors addressed by EPD include:

Transportation

We offer electronics, software development and system design services for the automotive, rail and aerospace industry.

We leverage our cross-technology expertise in multimedia, imaging, connectivity technologies and well-established processes for automotive software development, to support both car manufacturers and system suppliers in product development and engineering.

We are also working on emerging requirements for mass transportation and urban mobility solutions for smart cities of the future.

We are actively investing in developing solutions and software components that help accelerate time to market and innovation for our customers. This includes solutions for next-gen infotainment, driverless cars and V2X.

We participated in leading trade shows and events such as the CES 2017 (Consumer Electronics Show) in Las Vegas and Car HMI Europe 2016 in Germany, where we showcased our capabilities and new product offerings for autonomous vehicles, connected cars and next-gen infotainment.

We are members of leading consortiums and technology standards bodies related to the automotive industry such as Genivi and AUTOSAR, and actively participate in associated events such as Genivi All Member Meet in California and Automotive Linux Summit in Japan.

Broadcast and Communications

We address the complete product development lifecycle from R&D, new product development and testing to maintenance engineering for Broadcast, Consumer Electronics and Communications.

We engage with leading Broadcast and Communications service providers across the world for the development of value-added applications, and help them reduce engineering costs associated with development and deployment through cost-effective offshore services.

Emerging technologies such as IoT (Internet of Things) and Analytics are creating new opportunities to drive operational efficiency, reduce costs, deliver new services to consumers and enable new streams of revenues for operators and product manufacturers.

We are investing in developing capability to support customers in these new technologies and help them in their digital transformation journey.

With the advent of a variety of screens, platforms and communication technologies, the complexity of test automation has scaled up exponentially for the broadcast industry.

We have developed a Test Automation solution that incorporates Artificial Intelligence to enable operators automate their entire testing.

We continue to participate in leading international industry events and standards bodies, to strengthen our leadership position and keep abreast of technology trends.

Tata Elxsi featured in the leading broadcast event IBC 2016 (International Broadcasting Convention), with a session on the topic "What Caught My Eye: Future business opportunities". We also featured in RDK Americas Summit 2017, with a session titled ''RDK Machine Learning = Predictive Analytics That Satisfy'', where we shared our insights on rise of Predictive Analytics fueled by Machine Learning.

Industrial Design and Visualization

Tata Elxsi helps customers develop endearing brands and products by using design and technology as a strategic tool for business success. It has supported the launch of multiple brands and products across the world, winning various international awards for design and innovation.

This division services a broad spectrum of industries including automotive, consumer electronics, retail & consumer goods and healthcare.

As an added offering, we offer visualization services to help customers & marketing organizations communicate their product capabilities better to their end consumers.

Tata Elxsi has won the coveted international iF Design Award 2017, for Kochi Metro Rail Limited. Our comprehensive passenger experience design to develop India''s first seamless and integrated transport system for Kochi Metro, impressed the 58 professional judges from around the world.

Tata Elxsi was awarded the ''Best Industrial Design Studio'' award 2016 by Pool Magazine - India''s first International Design Magazine. The jury recognized our overall approach to work and business and appreciated our work ethics, teamwork, customer response, organizational response and open & transparent methodologies.

Systems Integration and Support

During the year under review, our Systems Integration & Support segment reported a turnover of '' 66.58 crores and profit of '' 8.35 crores.

We implement and integrate complete systems and solutions for High-Performance Computing, Computer Aided Design, Virtual Reality, Storage, and Disaster Recovery. We also provide Professional Services for maintenance and support of IT infrastructure in India and overseas.

We continue to focus on increasing the share of software sales and support services in this segment, for improved margins.

We are also expanding our solution portfolio, with technologies like 3D printing to cater to emerging industry needs. Threats, concerns and risks

Protectionist government policies and tightening of Visa rules, especially in the US, may create barriers for on-site deployment of India-based talent. We are focusing on maximizing offshore project execution, and hiring locally wherever necessary and possible, in order to mitigate the impact of such policies.

Currency volatility continues to be a risk. Our revenues are well distributed amongst various currencies and geographies, thereby reducing the impact from any single geography or currency to some extent.

As a technology-led design company, we continue to invest in acquiring and retaining the best talent, as well as continuous skill development, to help absorb the rapid changes in technologies and deliver greater value to our customers.

We constantly endeavor to stay ahead of the technology curve by building capabilities and solutions to meet the current and future needs of our customers.

For example, in the area of autonomous driving, we have developed an indigenous autonomous vehicle middleware platform ''Autonomai'', that integrates futuristic technologies such as AI and deep learning to help OEMs (Original Equipment Manufacturers) and system suppliers rapidly build driverless cars of the future.

Internal Control Systems and their adequacy

We believe that internal control and risk management are necessary prerequisites of the principle of governance. Our Management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides assurance on the efficiency of operations and security of assets. We have an effective internal control system, which ensures that all our assets are safeguarded and protected against any losses.

We have co-sourced the internal audit function. We have entrusted quarterly internal audits to an external Audit firm of repute. In addition, the in-house internal audit team also regularly carries out audits of specific processes. Their annual audit plans are approved by the Audit Committee of the Board. Based on the internal audit reports, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Internal Audit Reports along with corrective actions are discussed with the Management and are reviewed by the Audit Committee of the Board, which also reviews the adequacy and effectiveness of our internal controls.

Financial Analysis

20016-17

Rs,

Crores

2015-16

Rs,

Crores

Change over previous year

%

Percentage of Income

2016-17

2015-16

Sales and services

1233.04

1075.21

14.68

98.69

98.91

Other income

16.37

11.86

38.03

1.31

1.09

Total Revenues

1249.41

1087.07

14.93

100.00

100.00

Cost of sales

74.72

69.98

6.77

5.98

6.44

Personnel expenses

669.34

576.49

16.11

53.57

53.03

Financial expenses

-

-

-

-

-

Depreciation/ Amortization

26.92

22.61

19.06

2.15

2.08

Other expenses

216.93

181.65

19.42

17.36

16.71

Total Expenditure

987.91

850.73

16.13

79.06

78.26

Profit before tax and exceptional items

261.50

236.34

10.64

20.94

21.74

Tax expenses

88.21

81.53

8.19

7.06

7.50

Profit after tax for the year

173.29

154.81

11.94

13.88

14.24

Analysis of Overheads

Items

2016-17 Rs, crores

2015-16 Rs, crores

Variance %

Operating lease rent

15.84

15.73

0.70

Communication expenses

10.79

9.70

11.24

Inland travel and conveyance

8.24

8.03

2.61

Overseas travel

54.13

50.23

7.76

Consultant fees for software development

53.06

45.13

17.57

Provision for doubtful debts/ advances

0.58

0.82

-29.27

Significant Ratio Analysis

Sl.

No.

Particulars

Unit

31.03.17

31.03.16

1

Earnings before interest, depreciation and tax/Sales

%

23.39

24.08

2

Profit before taxes/ Sales

%

21.21

21.98

3

Profit after taxes/ Sales

%

14.05

14.40

4

Current Ratio

No. of times

4.14

2.32

5

Debt Equity Ratio

Ratio

6

Earnings per share

Rs,

55.65

49.72

Human Resources

Your Company recognizes the critical importance of its human capital. As a technology-led design company, we continue to attract and retain top talent. Capacity addition, through the induction of fresh engineers and lateral hires are driven by the annual business planning exercise. Your Company takes significant initiatives to increase efficiency through Leadership training, Performance management, Talent development, Employee engagement and Succession planning.

Our total headcount including consultants was 5205 as of March 31, 2017.

Quality initiatives

We have instituted very strong quality processes in the execution of our software development projects, and implemented robust information security management processes to assure our global customer base of the required level of confidentiality and protection of data and information. We have also been assessed and certified organization wide for industry-specific standards such as ISO 9001:2008 and ISO 27001:2013. Additionally, for Medical Engineering BU we have ISO 13485:2012 certification and for Automotive and Transportation BU we have Transportation SPICE OML5 certification.

Tata Business Excellence Model (TBEM)

Tata Business Excellence Model (TBEM) is a ''customized-to-Tata'' adaptation of the globally renowned Malcolm Baldrige model. The TBEM philosophy has been molded to deliver a combination of strategic direction and concerted effort to maximize business performance. This is managed through an annual process of assessment and assurance.

TBEM is administered and coordinated through TBExG, a division of Tata Sons. Its criterion is designed to help Tata organizations use an integrated approach to organizational performance management that results in:

- Delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability

- Improvement of overall organizational performance practices, effectiveness and capabilities

- Organizational and personal learning

As one of the key companies within Tata group, Tata Elxsi is covered under TBEM and assessed on an annual basis by a select team constituted by TQMS.

During this year''s assessment we crossed an important milestone and have been recognized as an ''Emerging Industry Leader''.

7. Directors and Key Managerial Personnel

In terms of Section 152 of the Companies Act, 2013 Dr. Gopichand Katragadda retires by rotation and being eligible offers himself for re-appointment.

Mr. Piyush Mankad, Independent Director, retired from the Board with effect from November 19, 2016 in terms of his appointment. The Board placed on record their appreciation for the valuable contributions and guidance rendered by Mr. Mankad during his tenure on the Board and the Committees in which he was member.

The Board, on the recommendation of the Nomination & Remuneration Committee, had at its meeting held on July

26, 2016 appointed Mr. Sudhakar Rao as an Additional Director (Independent Director) of the Company with effect from August 01, 2016. In terms of section 161(4) of the Companies Act, 2013 Mr. Sudhakar Rao holds office up to the date of the ensuing Annual General meeting and being eligible offers himself for re-appointment. Notice has been received from a member u/s 161 of the Companies Act, 2013, proposing Mr. Sudhakar to the office of the Directorship of the Company. The Board recommends the appointment of Mr. Sudhakar Rao as an Independent Director to hold office up to July 31, 2021.

The Board, on the recommendation of Nomination & Remuneration Committee, at its meetings held on October 27, 2016 and April 27, 2017 has, subject to the approval of the members, re-appointed Mr. Madhukar Dev as the Managing Director & Chief Executive Officer (MD&CEO) of the Company for a period of 2 years 8 months and 16 days with effect from 16.01.2017 up to 1.10.2019.

During the year under review, Five (5) Board meetings were held and have been well attended by the Directors. The calendar of meetings for the year 2017-18 has been circulated to all the directors detailing the schedule of Board and Committee meetings during 2017-18.

The Independent Directors have submitted their declaration that they fulfill the requirements as stipulated in Section 149 (6) of the Companies Act, 2013. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013 the Independent Directors had separate meetings on 28th April, 2016 during 2016-17.

Pursuant to the provisions of section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the company are Mr. Madhukar Dev, MD & CEO, Mr. K. Ramaseshan, CFO and Mr. G. Vaidyanathan, Company secretary. There is no change in the KMP during the year.

8. Directors'' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

(c) The Directors had taken proper and sufficient care, for the maintenance of adequate accounting records, in accordance with the provisions of Companies Act 2013, for safeguarding our assets and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the annual accounts on a going concern basis;

(e) The directors had laid down internal financial controls to be followed by us and that such internal Controls are adequate and were operating effectively;

(f) The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

9. Particulars on Remuneration

The statement showing the names of the top ten employees in terms of remuneration drawn and the information required under Section 197(12) of the Companies Act 2013 Read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors'' Report and have not been attached. However, in terms of first proviso to Section 136(1) the particulars as referred above are available for inspection at our Registered office during business hours on working days, up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act 2013 Read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under.

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam

9.17

Mr.Patrick McGoldrick

5.59

Mrs. S. Gopinath

9.39

Dr. G Katragadda

2.68

Pro. M.S. Ananth

3.13

Mr. Sudhakar Rao1

-

Mr. Piyush Mankad *

-

Executive Director

Mr. Madhukar Dev, MD & CEO

78.33

*since the information is part of the year, the same is not comparable (For Non-Executive Directors (NEDs) only commission is considered).

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/ KMP in the Financial year

Mr. N G Subramaniam

31.68

Mr. Patrick McGoldrick

14.36

Mrs. S. Gopinath

26.80

Dr. G Katragadda

6.50

Prof. M.S. Ananth*

-

Mr. Sudhakar Rao*

-

Mr. Piyush Mankad*

-

Mr. Madhukar Dev, MD & CEO

25.25

Mr. K.Ramaseshan, CFO

13.69

Mr. G Vaidyanathan, Company Secretary

42.35

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average increase in salaries of employees other than managerial personnel in 2016-17 was 11.5 %. Percentage increase in the managerial remuneration for the year was 20%.

(vi) The Company hereby affirms that the remuneration is as per the remuneration policy of the company.

The Board has adopted a Remuneration Policy as also the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to our Managing Director, Key Managerial Personnel and other officers. The Charter lays down the Rights, Roles and Responsibilities of the NRC. A Policy on Board diversity has also been adopted by the Board. A comprehensive Governance Guidelines for Board effectiveness has also been adopted by the Board on the recommendation of NRC. The Guidelines lay down the following:

- Composition and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing Director, Executive Director, Non-Executive Directors, Independent Directors, their term, tenure and Directorship).

- Board appointment. Industrial Development.

- Directors'' remuneration (Guided by Remuneration policy).

- Subsidiary oversight.

- Code of Conduct (Managing Director, Executive Director, Non-Executive Directors, Independent Directors).

- Board effectiveness review.

- Mandate of the Board Committee.

The Remuneration Policy and the Charter for NRC are available at http://www.tataelxsi.com/company/board-of-directors/related links/Policies

10. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars pursuant to section 134 (m) of the Companies Act, 2013 is attached with this report as Annexure-A.

11. Business Responsibility Report (BRR)

In terms of the regulation 34(2) (f) Securities Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 (''Listing Regulations") the Business Responsibility Report is attached as Annexure-B.

12. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis. More details are given under Section-6 of Corporate Governance Report.

13. Corporate Social Responsibility

Corporate Social Responsibility (CSR) committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company''s website at (http://www.tataelxsi.com/company/corporate-sustainability). The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-C. The detail of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

14. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors'' Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

15. 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, Ms. Jayashree Parthasarthy, a Company Secretary-in-Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Audit for the year ended 31st March,

2017 is attached to the Directors'' Report at page No. 39.

16. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and Redressal of complaints of sexual harassment at workplace.

No concerns have been raised under POSH during the year 2016-17.

17. Vigil Mechanism

Our company has established a "Vigil Mechanism" for its employees and Directors, enabling them to report any concerns of unethical behavior, suspected fraud or violation of the Company''s ''Code of Conduct''.

To this effect, the Board has adopted a ''Whistle Blower Policy'' (WBP), which is overseen by the Audit Committee. The policy provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review.

The said policy has been posted on our intranet where all the employees have access. Our Company conducts ''Policies Awareness Campaign'' regularly for its employees at its various centers, and the WBP also features in the campaign amongst others.

18. Others

There are no loans, guarantees and investments made by us u/s 186 of the Companies Act, 2013 during the year under review.

The extract of Annual Return in MGT-9 is attached and forms part of the Directors'' report. We have neither accepted nor renewed any deposit during the year under review.

The Unclaimed Dividend in respect to the financial year 2009-10 is due for remittance to Investors'' Education & Protection Fund (IEPF) on August 31, 2017 in terms of Section 125 of the Companies Act, 2013.

There are no material changes and commitments affecting the Company''s financial position between the end of the financial year to which this financial statement relate and the date of this report.

19. Auditors

Delloitte Haskins & Sells (DHS), Chartered Accountants, the Statutory Auditors, who have been appointed at the Annual General Meeting, held on 18th July, 2014 for a period of 3 years retires at the conclusion of the ensuing Annual General Meeting. The Board places on record their appreciation for the valuable contribution on the Audit and review front made by Deloitte Haskins & Sells (DHS) during their long association with the Company.

The Board has consented to recommend to the members the appointment of M/s BSR & Co. LLP, Chartered Accountants, as the statutory auditors of the company for a period of 5 years from the conclusion of 28th Annual General Meeting up to the conclusion of the 33rd Annual General meeting to be held in the year 2022 subject to ratification of their reappointment by the members at each AGM to be held between the above periods. M/s. BSR & Co. LLP has confirmed vide their certificate dated April 12, 2017 that they in compliance to the conditions provided in Section 139(1) read with Section 141 of the Companies Act, 2013.

20. Acknowledgements

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors

N.G. Subramaniam

Chairman

Bengaluru, 27th April, 2017


Mar 31, 2015

THE MEMBERS

1. The Directors are pleased to present the Twenty sixth Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2015.

2. Result of Operations - Extract

(Rs. Crores) Standalone Consolidated 2014-151 2013-14 2014-151 2013-14

Sales and Service 849.40 772.10 849.40 774.79

Other income 4.14 15.68 3.35 12.54

Total Income 853.54 787.78 852.75 787.33

Profit before financial expenses, depreciation and exceptional items 181.52 151.80 180.66 149.00

Less: Financial expenses - 1.83 - 1.83

Depreciation 25.54 34.99 25.54 34.99

Profit for the year 155.98 114.99 155.12 112.19

Less: Provision for Income tax 53.08 39.88 53.10 39.93

Profit after tax ~ 102.90 75.11 102.02 72.26

Add: Profit brought forward 146.34 111.36 146.37 114.24

Balance available for appropriation which has been appropriated as 249.24 186.47 248.39 186.50 under:

Depreciation on transition to Schedule-II of the Companies Act, 2013 on 13.30 - 13.30 - tangible fixed assets with Nil remaining useful life

Proposed dividend 34.25 28.02 34.25 28.02

Dividend tax thereon net of reversal thereof 6.82 4.11 6.82 4.11

Transfer to General Reserve 10.00 8.00 10.00 8.00

Balance of profit carried to Balance Sheet 184.87 146.34 184.02 146.37

Total appropriations 249.24 186.47 248.39 186.50

3. Dividend

Your Directors recommend for your approval, a dividend of 110% (Rs. 11/- per share) for the year ended 31st March, 2015, compared to 90% (Rs.9 per share) in the previous year.

This will involve an outgo of Rs. 41.07 crores compared to Rs. 32.13 crores in the previous year, including dividend distribution tax.

4. Reserves

Your Directors have approved a transfer of Rs. 10 crores to the General Reserves for the year ended 31st March, 2015, as against an amount of Rs. 8 crores in the previous year.

5. Review of Operations

The total income during the year under review increased by 8% from 787.78 crores in the previous year to Rs. 853.54 crores.

The Profit Before Tax (PBT) increased by 36% from 114.99 crores in the previous year to Rs. 155.98 crores.

The Profit After Tax (PAT) increased by 37% from 75.11 crores in the previous year to Rs. 102.90 crores.

During the year under review, our concerted effort in growing revenues from the embedded product design and industrial design services, increasing the composition of software sales and support services in the Systems Integration business, and balanced control of operational costs, resulted in improved top line and bottom line performance.

7. Directors and Key Managerial Personnel

In terms of Section 161 of the Companies Act, 2013 Mr. N.G. Subramaniam and Dr. G. Katragadda, Non - Executive and Not-Independent Directors, who have been appointed as Additional Directors retire at the ensuing Annual General Meeting. We have received a Notice under Section 160 (1) of the Companies Act, 2013 from a member proposing the candidatures of Mr. N.G. Subramaniam and Dr. G. Katragadda to the office of Directorship, whose terms of office shall be determined for retirement by rotation.

Mr. S. Ramadorai, the then Chairman, retired from the Board with effect from October 06, 2014, on attaining the age of 70 years as per our policy. The Board placed on record their appreciation for the exemplary leadership and guidance rendered by Mr. Ramadorai during his tenure on the Board.

Mrs. Sudha Madhavan, CFO, resigned from her position w.e.f. September 19, 2014 to seek other career opportunities.

The Board on the recommendation of the Audit Committee, appointed Mr.K. Ramaseshan as our CFO w.e.f. January 21, 2015.

During the year under review, Seven (7) Board meetings were held and well attended by the Directors. We have circulated the Calendar of meetings for the year 2015-16 to the Directors.

The Independent Directors have submitted their declaration that they fulfill the requirements as stipulated in Section 149 (6) of the Companies Act, 2013. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013. The Independent Directors had a separate meeting on 25th March,2015.

8. Directors'' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

(c) the Directors had taken proper and sufficient care, for the maintenance of adequate accounting records, in accordance with the provisions of Companies Act 2013, for safeguarding our assets and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis.

(e) the directors had laid down internal financial controls to be followed by us and that such internal Controls are adequate and were operating effectively.

(f) the Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

10. Particulars on Remuneration

The information required under Section 197(12) of the Companies Act 2013 Read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors'' Report and have not been attached. However, in terms of first proviso to Section 136(1) the particulars as referred above are available for inspection at our Registered office during business hours on working days, up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act 2013 Read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure-A.

Our Board has adopted a Remuneration Policy as also the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to our Managing Director, Key Managerial Personnel and other officers. The Charter lays down the Rights, Roles and Responsibilities of the NRC. A Policy on Board diversity has also been adopted by the Board. A comprehensive Governance Guidelines for Board effectiveness has also been adopted by the Board on the recommendation of NRC. The Guidelines lay down the following:

- Composition and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing Director, Executive Director, Non-Executive Directors, Independent Directors, their term, tenure and Directorship).

- Board appointment, Industrial Development.

- Directors remuneration (Guided by Remuneration policy).

- Subsidiary oversight.

- Code of Conduct (Managing Director, Executive Director, Non-Executive Directors, Independent Directors).

- Board effectiveness review.

- Mandate of the Board Committee.

11. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars pursuant to section 134 (m) of the Companies Act, 2013 is attached with this report as Annexure-B.

12. Risk Management Policy

We have adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis. More details are given under Section-6 of Corporate Governance Report.

13. Corporate Social Responsibility

We have constituted a CSR committee for the purposes of recomending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company''s website at (http://www.tataelxsi.com/company/corporate-sustainability). The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-C. The details of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

14. Subsidiary Company, Statement under Section 129 of the Companies Act, 2013 and Consolidated Financial Statements

Our wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. did not accrue any revenue during the year under review. There has been an expenditure of Rs. 0.06 crores during the year under review. Our Board of Directors have given their consent to the closure of Subsidiary and the same is under process. The details of subsidiary as required under the provisions of the Companies Act, 2013 are given in page No. 93 Members interested in obtaining a copy of the Audited annual accounts of the subsidiary company may write to the Company Secretary.

15. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors'' Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

16. 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, Ms. Jayashree Parthasarthy, a Company Secretary in Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Audit for the year ended 31st March, 2015 is attached to the Directors'' Report at page No. 27.

17. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and Redressal of complaints of sexual harassment at workplace.

During the year FY15, we received one (1) complaint related to sexual harassment; the same has been disposed of and appropriate action taken. There are no pending complaints for FY15.

18. Vigil Mechanism

Our company has established a "Vigil Mechanism" for its employees and Directors, enabling them to report any concerns of unethical behaviour, suspected fraud or violation of the Company''s ''Code of Conduct''.

To this effect the Board has adopted a ''Whistle Blower Policy'' (WBP), which is overseen by the Audit Committee. The policy provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review.

The said policy has been posted on our intranet where all the employees have access. Our Company conducts ''Policies Awarness Campaign'' regularly for its employees at its various centres, and the WBP also features in the campaign amongst others.

19. Others

There are no loans, guarantees and investments made by us u/s 186 of the Companies Act, 2013 during the year under review.

The extract of Annual Return in MGT-9 is attached and forms part of the Directors''report.

We have neither accepted nor renewed any deposit during the year under review.

The Unclaimed Dividend in respect to the financial year 2007-08 is due for remittance to Investors'' Education & Protection Fund (IEPF) on 27th August, 2015 in terms of Section 125 of the Companies Act, 2013.

There are no material changes and commitments affecting our financial position between the end of the financial year to which this financial statement relate and the date of this report.

20. Auditors

Delloitte Haskins & Sells (DHS), Chartered Accountants, the Statutory Auditors, who have been appointed for a period of 3 years and whose reappointment is to be ratified at the ensuing Annual General Meeitng, have confirmed that their certificate dated April 21, 2014 issued pursuant to the provisions of Section 139(1) of the Companies Act, 2013 holds good for the period of re-appointment.

21. Acknowledgements

Your Directors wish to thank employees, customers, partners, suppliers, and above all, our shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors

N.G. Subramaniam Chairman

Bengaluru, 28th April, 2015


Mar 31, 2014

TO THE MEMBERS

1. The Directors present the Twenty-Fifth Annual Report, along with the Audited Statements of Accounts of your Company, for the year ended March 31, 2014.

2. Financial Highlights:

During the financial year 2013-14, the operations of your Company resulted in the following:

(Rs. Crores)

Unconsolidated Consolidated

2013-14 2012-13 2013-14 2012-13

Sales and Service 772.10 604.68 774.79 621.67

Other income 15.68 6.23 12.54 4.84

Total Income 787.78 610.91 787.33 626.51

Profit before financial expenses, depreciation and exceptional items 151.81 75.29 149.01 76.90

Less: Financial expenses 1.83 3.91 1.83 3.91

Depreciation 34.99 23.72 34.99 23.72

Exceptional Items – 15.90 – 15.90

Profit for the year 114.99 31.76 112.19 33.37

Less: Provision for Income tax 39.88 10.77 39.93 10.99

Share of loss from associate Company – – – 1.07

Profit after tax 75.11 20.99 72.26 21.31

Add: Profit brought forward 111.36 111.09 114.24 113.65

Balance available for appropriation which has been appropriated as under: 186.47 132.08 186.50 134.96

Proposed dividend 28.02 15.57 28.02 15.57

Dividend tax thereon net of reversal thereof 4.11 2.65 4.11 2.65

Transfer to General Reserve 8.00 2.50 8.00 2.50

Balance of Profit carried to Balance Sheet 146.34 111.36 146.37 114.24

Total appropriations 186.47 132.08 186.50 134.96

3. Dividend:

Your Directors recommend for your approval, a dividend of 90% (Rs. 9 per share) [previous year 50% (Rs.5.00 per share)] for the year ended 31st March 2014, involving an outgo of Rs. 28.02 crores compared to Rs. 15.57 crores in the previous year. Additionally, the dividend distribution tax will involve an outlay of Rs. 4.11 crores compared to Rs. 2.65 crores in the previous year. The total payout ratio is 43% for this year as compared to 87% in the previous year.

4. Review of Operations:

The total consolidated income during the year under review was Rs. 787.33 crores as against Rs. 626.51 crores in the previous year, registering an increase of 26%.

The Profit Before Tax (PBT) was Rs. 112.19 crores, as against Rs. 33.37 crores in the previous year. The Profit Before Tax increased by 236% over the previous year. The Profit After Tax (PAT) was Rs. 72.26 crores, as against Rs. 21.31 crores in the previous year, registering an increase of 239%.

During the year under review, your Company''s concerted effort in growing its revenues from the embedded and industrial design services, focussing on solutions and services in the systems integration business, and containing costs of its animation and visual effects business, resulted in improved top line and bottom line performance.

More details are set out in the attached Management Discussion and Analysis Statement.

A business-wise analysis of your Company''s two main segments viz. Software Development & Services and Systems Integration & Support follow hereunder:

Software Development & Services:

The services constituting this segment are Embedded Product Design, Industrial Design and Visual Computing Labs. This segment reported revenue of Rs. 682.70 crores in FY14 against Rs. 552.95 crores in the previous year, registering an increase of 23% over the previous year. The segment''s Profit was Rs. 137.90 crores.

Embedded Product Design

The Embedded Product Design helps customers develop electronic products by providing design of hardware, implementation of technologies such as audio, video, imaging and connectivity onto the hardware, and developing software applications and user interface that enable users to use the product and its functionality with ease and convenience. It addresses the automotive, aerospace, broadcast, consumer electronics, communications, healthcare, and semiconductor industries.

Embedded Product Design division worked with a leading Japanese automotive OEM to design and develop a complete Electronic Control Unit (ECU) for a hybrid electric vehicle, including software and hardware. The hybrid vehicle was successfully released in the market in June 2013.

The division supported India''s Mars Orbiter mission – Mangalyaan, by designing the Data Control Hardware which was installed in the Mars Orbiter and launched into space on November 05, 2013.

The division announced the licensing of its in-house developed Ultra High Definition (UHD) video decoder software to a US based company, which will enable very high-quality video on embedded devices.

Your Company participated in leading industry events such as the International Broadcast Conference (IBC) – Amsterdam, Consumer Electronics Show (CES) - Las Vegas and Mobile World Congress (MWC) – Barcelona, to showcase its capability and innovations to the global market. It also presented technical papers on topics such as next-generation vehicle security at the VDI conference in Germany.

Industrial Design

The Industrial Design division helps customers deliver a superior product or service through design. In the case of products, this includes the form, color, branding and textures, as well as the way the product interfaces with the user. The division also help customers improve their service delivery by studying, analyzing, and providing design interventions that improve end-user experience at every touch point.

It worked with GVK to design the experiential services for various consumer touch points at Mumbai International Airport''s new integrated Terminal 2, and helped redefine the passenger experience, while enhancing efficiencies and productivity for the airport staff at T2. As part of this project, the division designed entertainment zones, customer service zones, general and lifestyle seating areas from the security to the boarding gates. Other elements included designing pay/help phones, charging stations, housing of ATM vending machine, internet workstations/ kiosks amongst others.

The division worked with St. James'' Court, A Taj Hotel and Taj 51 Buckingham Gate, Suites and Residences to redefine the visual identity of the hotel. This involved developing the brand identity for both the hotels. Over 100 collaterals were designed including stationery, promotional collaterals, amenities, and service and communication collaterals amongst others.

Your Company was declared winner of the first Automotive Grade Linux (AGL) User Experience Contest in the "Best User Experience" category. The AGL contest was centered on the theme ''Designing the Future of Automotive Infotainment User Experience''. Your Company''s concept Human Machine Interface (HMI) won the award for its intuitive and effortless navigation.

Visual Computing Labs (VCL)

Visual Computing Labs provides high-end animation and Visual Effects (VFX) services. It caters to the entertainment industry by providing these services for feature films, episodic television serials and high-end gaming. It also caters to the marketing and advertising industry by providing these services for TV ad commercials and corporate videos for visualization and new product launches.

The division won the coveted Film fare 2014 award and the Star Guild Award 2014 for Best Visual Effects for a feature film, for its work in Dhoom 3.

The division was also recognized for its stellar work in delivering Visual Effects for Bhaag Milkha Bhaag.

Systems Integration & Support:

During the year under review, the segment turnover and Profit were Rs. 92.08 crores and Rs. 8.43 crores respectively.

This business segment, designs and implements solutions, using contemporary hardware and application software for in-house R&D and design centers of organizations. It provides solutions for Computer Aided Design and Manufacturing (CAD/CAM), Virtual Reality and High Performance Computing. It also supports enterprises in effectively managing their IT infrastructure, including storage, computing and networking.

This business delivered improved results through its focus on a solution-centric approach that drives higher composition of software and support services in the business mix to improve revenues and margins.

5. Finance:

The interest cost for FY14 was Rs.1.83 crores, as against Rs. 3.91 crores in the previous year. Borrowings as at the end of FY14 were NIL, compared to Rs. 58.51 crores in the previous year.

6. Corporate Social Responsibility (CSR):

The Board, pursuant to the provisions of section 135 of the Companies Act, 2013, has at its meeting held on 2nd April, 2014 constituted a CSR committee with the following Directors as members:

Mrs. Shyamala Gopinath, Chairperson

Mr. Piyush Mankad, Member

Mr. Madhukar Dev, Member

7. Directors:

Pursuant to the provisions of section 149 read with Schedule IV of the Companies Act, 2013, Mrs. Shyamala Gopinath, Dr. R. Natarajan, Mr. P. Mankad and Mr. P McGoldrick have given declaration that they meet the criteria for independence as provided therein. Accordingly, the above named directors are proposed to be appointed as independent directors for a term of five (5) years from the date of the ensuing Annual General Meeting or attainment of retirement age for independent Directors prescribed under the Revised Guidelines (2012) for Composition of Board of Directors, Committees of the Board and Retirement Age of Directors as may be revised from time to time, whichever is earlier.

8. Directors Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operations Management, conform that- (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them 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 at the end of the financial year and of the Profit of the Company for that year;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956, 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.

9. Personnel:

Your Company''s workforce composition is aligned to the delivery of design and creative services. The Embedded Product Design, Industrial Design, and Systems Integration divisions are mainly comprised of graduates and post- graduates in engineering and design. Visual Computing Labs employ creative professionals with proficiency in the software tools that are used to deliver animation and VFX services.

Your Company recognizes the critical importance of its human capital. Capacity addition, through the induction of fresh engineers and lateral hires are driven by the annual business planning exercise. Capacity addition is continuously monitored and managed, depending on the business demand and near-term projections. Your Company undertakes significant initiatives to increase efficiency through improved operations, training and retooling, leadership development, and other measures.

10. Disclosure of Particulars:

The information required under Section 217 (2A) of the Companies Act, 1956 and the Rules made there under, is provided in Annexure-B forming part of the Report. In terms of Section 219 (1) (b) (iv) of the Act, the Report and Accounts are being sent to the Shareholders, excluding the aforesaid Annexure. Any Shareholders interested in obtaining a copy of the same may write to the Company Secretary.

11. Subsidiary Company, Statement under Section 212 of the Companies Act, 1956 and Consolidated Financial Statements:

The Company''s wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. recorded a turnover of Rs. 2.69 crores and Profits before Tax of Rs. 1.01 crores during the year 2013-14, as against the previous year''s turnover of Rs. 17.21 crores and Profit before Tax of Rs. 1.93 crores. The Board of Directors of your Company has given their consent for not attaching to its Balance Sheet, the documents relating to its subsidiary specified in Section 212 (1) of the Companies Act, 1956 in terms of the General Circular no. 2/2011 of the MCA.

In terms of the said circular, a statement in one page containing specified financial details of the subsidiary company is to be included in the consolidated annual financial statements of the parent Company. The annual accounts of the subsidiary and the related detailed information will be made available to the holding and subsidiary company''s investors seeking such information at any point of time. The annual accounts of the subsidiary will also be kept available for inspection by any investor at the head office of the parent and subsidiary Company respectively.

As required pursuant to the Accounting Standards of the Institute of Chartered Accountants of India (ICAI) and the Listing Agreement with the Stock Exchanges, the stand-alone annual accounts of your Company, along with the consolidated financial statements of your Company and the subsidiary Company made up to 31st March 2014, are also presented.

12. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors'' Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

13. Auditors

Deloitte Haskins & Sells (DHS), Chartered Accountants, who are the Statutory auditors of the Company, hold office till the Conclusion of the Forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed there under, it is proposed to appoint DHS as Statutory auditors of the Company from the Conclusion of the Forthcoming Annual General Meeting till the Conclusion of the 28th Annual General Meeting to be held in the year 2017, subject to ratification of appointment at every AGM.

14. Acknowledgements:

The Directors wish to thank the Company''s employees, customers, partners, suppliers, and above all, its shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors

S. RAMADORAI

Chairman

Mumbai, April 22, 2014


Mar 31, 2013

1. The Directors present the Twenty-Fourth Annual Report, along with the Audited Statements of Accounts of your Company, for the year ended March 31, 2013.

2. Financial Highlights:

During the financial year 2012-13, the operations of your Company resulted in the following:

(Rs. Crores)

Unconsolidated Consolidated 2012-13 2011-12 2012-13 2011-12

Sales and Service 604.69 514.46 621.67 538.71

Other income 6.23 6.12 4.84 4.20

Total Income 610.92 520.58 626.51 542.91

Profit before financial expenses, depreciation and exceptional items 75.30 73.20 76.91 78.21

Less : Financial expenses 3.91 2.33 3.91 2.33

Depreciation 23.73 20.52 23.73 20.52

Exceptional Items 15.90 - 15.90 -

Profit for the year 31.76 50.35 33.37 55.36

Less : Provision for Income tax 10.77 16.40 10.99 16.65

Share of loss from associate Company - - 1.07 4.12

Profit after tax 20.99 33.95 21.31 34.59

Add: Profit brought forward 111.08 107.47 113.65 109.40

Balance available for appropriation which has been appropriated 132.07 141.42 134.96 143.99 as under:

Proposed dividend 15.57 21.80 15.57 21.80

Dividend tax thereon net of reversal thereof. 2.65 3.54 2.65 3.54

Transfer to General Reserve 2.50 5.00 2.50 5.00

Balance of profit carried to Balance Sheet 111.35 111.08 114.24 113.65

Tbtal appropriations 132.07 141.42 134.96 143.99

3. Dividend:

Your Directors recommend for your approval, a dividend of 50% (Rs. 5.00 per share) [previous year 70% (Rs.7.00 per share)] for the year ended 31st March 2013, involving an outgo of Rs. 15.57 crores compared to Rs. 21.80 crores in the previous year. Additionally, the dividend distribution tax will involve an outlay of Rs. 2.65 crores compared to Rs. 3.54 crores in the previous year,. The total payout ratio is 87% for this year as compared to 75% in the previous year.

4. Review of Operations:

The total consolidated income during the year under review was Rs. 626.51 crores as against Rs. 542.91 crores in the previous year, registering an overall increase of 15.4%.

The Profit after Tax (PAT) was Rs. 21.31 crores, as against Rs. 34.59 crores in the previous year. The decrease in profit is mainly due to retiring of the corporate guarantee given to bank for securing the loan for its JV entity, A2E2 and share of loss in the said JV entity.

During the previous years, VCL undertook two significant initiatives to help scale its business. It expanded its studio in Los Angeles in anticipation of a large volume of work from Hollywood and entered into a Joint Venture to develop and produce its own IP. While both initiatives showed initial promise, the outcomes were not up to expectations and impacted the bottom-line of the company significantly. The normalised PBT before the impact of these two is higher in FY13 than in FY12. Your company has taken suitable actions after due consideration on both initiatives to ensure the bottom line is not further impacted.

More details are set out in the attached Management Discussion and Analysis Statement.

A business-wise analysis of your Company''s two main segments viz. Software Development & Services, and Systems Integration & Support follows hereunder:

Software Development & Services:

The businesses constituting this segment are Embedded Product Design, Industrial Design, and Visual Computing Labs. This segment reported a revenue of Rs. 552.95 crores in FY13, registering an increase of 21.7% over the previous year. The segment''s profit was Rs. 62.39 crores.

Embedded Product Design:

The Embedded Product Design division provides technology consulting, new product design and development, and testing services for the broadcast consumer electronics, healthcare, telecom, and transportation industries. It also creates and licenses intellectual property and software components, helping customers create product differentiation, and reduce development costs and time-to-market.

Industrial Design:

The Industrial Design division helps customers develop winning brands and products by using design as a strategic tool for business success. It provides an end-to-end design and innovation service for new products from consumer research and ideation, to interaction design, prototyping, and manufacturing support. It addresses the FMCG, Automotive, Healthcare, Consumer Electronics, and Retail sectors.

It has designed award-winning packaging in the food, beverage, personal, and home care segments, for leading brands in India and overseas.

It also executed several projects for interior and exterior styling of vehicles and the design of cutting-edge products for consumer electronics and healthcare.

In the interaction design area, its design for an interactive e-sales book for Mahindra and Mahindra won the award for the best User Interface Design at the CII Design Excellence Awards 2012.

In the FMCG packaging area, its packaging design for Ocean Herbal, a new Ayurvedic personal care brand, was conferred with the India Design Mark (I Mark). The ''I Mark'' is a prestigious design standard given by the Indian Design Council.

This division has been successfully certified for ISO 13485:2003, a management systems standard relating to the design and development of medical devices.

Visual Computing Labs:

Visual Computing Labs (VCL) offers Animation, Visual Effects (VFX) and 3D stereoscopic content for feature films, episodic television and advertising. It also offers custom content development for visualization and product marketing.

This year VCL won several national and international awards including the "Best VFX Shot of the year" and "Best Animated Feature Film (Theatrical)" awards at the prestigious FICCI Frames BAF Awards 2013.

It won the "Best Special Effects" award for ''Ek Tha Tiger'' at the Star Guild Awards 2013 (also known as Apsara Awards). It also won the "Best Animated Feature Film (Theatrical)" award for ''Arjun - The Warrior Prince'' at the Infocom-Assocham EME Awards 2013.

Systems Integration & Support:

During the year under review, the segment turnover and profit were Rs. 68.72 crores and Rs. 1.70 crores respectively.

This business segment integrates, installs and commissions complete systems and solutions for areas such as Computer Aided Design, Analysis and Manufacturing, Virtual Reality, High Performance Computing and Storage for enterprise customers. It provides best-of-breed solutions through partnerships and distribution agreements with leading international software and hardware vendors. It also provides infrastructure management, support and maintenance services.

This business will continue to focus on a solutions-centric approach that drives higher composition of software and services in the business mix to improve margins.

5. Finance:

Interest cost for FY13 was Rs. 3.91 crores, as against Rs. 2.33 crores in the previous year. Borrowings as at the end of FY13 was Rs. 58.51 crores, compared to Rs. 34.16 crores in the previous year.

6. Directors:

Mr. P.G. Mankad and Mr. P. McGoldrick retire by rotation and being eligible, offer themselves for re-appointment.

7. Directors Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, confirm that -

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

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them 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 at the end of the financial year and of the profit of the Company for that year;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956, 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.

8. Personnel:

Your Company recognizes the critical importance of its human capital. Capacity addition through the induction of fresh engineers and lateral hires are driven by the annual business planning exercise. Capacity addition is continuously monitored and changed, depending on the business demand. Your Company takes significant initiatives to increase efficiency through training, leadership development, and other measures.

9. Disclosure of Particulars:

Information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under, is provided in Annexure-B forming part of the Report. In terms of Section 219(1) (b) (iv) of the Act, the Report and Accounts are being sent to the Shareholders, excluding the aforesaid Annexure. Any Shareholders interested in obtaining a copy of the same may write to the Company Secretary.

10. Subsidiary Company, Statement under Section 212 of the Companies Act, 1956 and Consolidated Financial Statements:

The Company''s wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. recorded a turnover of Rs.17.21 crores and Profits before Tax of Rs. 1.93 crores during the year 2012-13, as against the previous year''s turnover of Rs. 26.54 crores and Profit before Tax of Rs. 2.82 crores. The Board of Directors of your Company has given their consent for not attaching to its Balance Sheet, the documents relating to its subsidiary specified in Section 212 (1) of the Companies Act, 1956 in terms of the General Circular no. 2/2011 of the MCA.

In terms of the said circular, a statement in one page containing specified financial details of the subsidiary company is to be included in the consolidated annual financial statements of the parent Company. The annual accounts of the subsidiary and the related detailed information will be made available to the holding and subsidiary companies investors seeking such information at any point of time. The annual accounts of the subsidiary will also be kept available for inspection by any investor at the head office of the parent and subsidiary Company respectively.

As required pursuant to the Accounting Standards of the Institute of Chartered Accountants of India (ICAI) and the Listing Agreement with the Stock Exchanges, the stand-alone annual accounts of your Company, along with the consolidated financial statements of your Company and the subsidiary Company made up to 31st March 2013, are also presented.

11. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors'' Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

12. Acknowledgements:

The Directors wish to thank the Company''s employees, customers, partners, suppliers, and above all, its shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors

S. RAMADORAI

Chairman

Bangalore, April 19, 2013


Mar 31, 2012

1. The Directors present the Twenty-Third Annual Report, together with the Audited Statements of Accounts of your Company for the year ended March 31, 2012.

2. Financial Highlights:

During the financial year 2011-12, the operations of your Company resulted in the following:

(Rs Crores)

Unconsolidated Consolidated

2011-121 2010-11 2011-121 2010-11

Sales and Service 514.46 411.01 538.71 415.91

Other income 6.12 3.86 4.20 3.86

Total Income 520.58 414.87 542.91 419.77

Profit before financial expenses and depreciation 73.20 50.20 78.21 51.05

Less : Financial expenses 2.33 1.88 2.33 1.88

Depreciation 20.52 17.20 20.52 17.20

Profit for the year 50.35 31.12 55.36 31.97

Less : Provision for Income tax 16.40 (0.61) 16.65 (0.55)

Share of loss from associate Company - - 4.12 -

Profit after tax 33.95 31.73 34.59 32.52

Add: Profit brought forward 107.47 105.99 109.40 107.13

Balance available for appropriation which has been 141.42 137.72 143.98 139.65

appropriated as under:

Proposed dividend. 21.80 21.80 21.80 21.80

Dividend tax thereon net of reversal thereof. 3.54 3.45 3.54 3.45

Transfer to General Reserve 5.00 5.00 5.00 5.00

Balance of profit carried to Balance Sheet 111.08 107.47 113.64 109.40

Total appropriations 141.42 137.72 143.98 139.65

3. Dividend:

Your Directors recommend for your approval a dividend of 70% (Rs 7.00 per share) [previous year 70% (Rs 7.00 per share)] for the year ended 31st March 2012, involving an outgo of Rs 21.80 crores (previous year Rs 21.80 crores). Additionally, dividend distribution tax will involve an outlay of Rs 3.54 crores (previous year Rs 3.45 crores), involving a payout ratio of 73%.

4. Review of Operations:

The total income (consolidated) during the year under review was Rs 542.91 crores, as against Rs 419.77 crores in the previous year, registering an overall increase of 30%. NASSCOM, the premier trade body for Indian IT-ITES industry, had projected a growth of 16% from exports for IT and ITES firms in FY 2012 and your Company grew more than the industry average, supported strongly by volume growth, and partly by rupee depreciation. The Profit after tax was Rs 34.59 crores, as against Rs 32.52 crores in the previous year.

NASSCOM has forecasted that exports from India's information technology sector will grow more slowly for the financial year ending March 31, 2013 and has forecasted a guidance of 11-14% for the likely growth in FY 2013. Your Company is well prepared to continue the growth momentum, despite the volatile environment, leveraging its niche portfolio and global presence.

More details are set out in the attached Management Discussion and Analysis Statement.

A business-wise analysis of your Company's two main segments viz. Software Development & Services, and Systems Integration & Support follows hereunder:

Software Development & Services:

The businesses constituting this segment are Embedded Product Design, Industrial Design, and Visual Computing Labs. Business in this segment registered an increase of 27% to Rs 454.25 crores during FY12 from Rs 358.20 crores in FY11. The segment's profit increased from Rs 36.81 crores to Rs 55.69 crores, mainly on account of increased business volume.

Embedded Product Design:

The Embedded Product Design division provides technology consulting, new product development, system integration, and testing services for the broadcast, industrial and consumer electronics, transportation, wireless communications, and convergence industries. It also creates and licenses intellectual property and software components, helping customers create product differentiation, and reduce development costs and time-to-market.

Apart from the recessionary trends in Europe, the outlook for Japan is still weak, and has potential implications for business from the semiconductor, consumer electronics, and automotive industries. Your company is taking adequate steps to overcome these risks, by focusing on key customers in these geographies, to ensure revenue protection and diversifying into new geographies.

Your Company is incubating a medical electronics practice by leveraging its existing medical device customer base from the industrial design division and embedded systems expertise of the Embedded Product Design division.

Medical device engineering and R&D services is expected to grow steadily over the next few years. Your Company plans to target and grow services for this industry, in order to address the growing demand for medical devices from emerging markets and convergence of medical products with communications and information technology.

Industrial Design:

The Industrial Design division helps customers develop winning brands and products by using design as a strategic tool for business success. Its expertise extends across consumer insight, branding, product design, packaging design, transportation design, visual design, design engineering, and manufacturing support.

This division has worked with prestigious FMCG brands in packaging design. It has developed award-winning designs in the food, beverage, personal and home care segments, for leading brands in India and Overseas.

Apart from executing several projects for interior and exterior styling of vehicles, it has also developed cutting edge products for the consumer electronics and healthcare industry.

Visual Computing Labs:

Visual Computing Labs offers Animation, Visual Effects (VFX), and 3D stereoscopic content for feature films, episodic television and advertising. It also offers custom content development for visualization and product marketing, and is a leading provider of engineering and animation services for mobile, online and console games.

During the year, your Company continued its efforts to provide strong sales thrust from the overseas VFX studio, that was set up at Santa Monica near Hollywood, and to improve collaboration with Indian operations.

Your Company entered into a Joint Venture Agreement with M/s A Squared Entertainment, LLC, USA (A2E) on September 30, 2011 to create, develop, and distribute original brands, including animated entertainment, digital gaming, and originally designed consumer products. The new Company, M/s A Squared Elxsi Entertainment (A2E2), LLC, has been incorporated at Delaware, USA.

During the year, A2E2 completed its first IP "Martha & Friends", an animated series featuring a 10-year old Martha Stewart. Your Company contributed significantly to the development of this IP. Other forthcoming projects of the joint venture include "Secret Millionaire's Club" an animated series featuring billionaire Warren Buffett.

During the year, the Joint Venture has incurred significant efforts, because of projects under development and expects to monetize those brands / IPs developed in the next fiscal year.

Both partners of the JV - Tata Elxsi and A2E, will be assigned equity capital in the new company. Allocation of units to the two partners is pending completion of all due formalities associated with the allocation of units. Therefore, your Company for the purpose of consolidation for this fiscal year is taking only its share of loss in A2E2.

Systems Integration & Support:

During the year, the segment turnover and profit were Rs 84.45 crores and Rs 8.40 crores respectively, compared to Rs57.71 crores and Rs 6.77 crores respectively during 2010-11.

This business has improved its turnover significantly by 46%, while focusing on a solutions centric approach that includes more of software and services to better protect margins.

5. Finance:

Interest cost was Rs 2.33 crores as against Rs 1.88 crores in the previous year. Borrowings as at the year end was Rs 34.16 crores, compared to Rs 25.43 crores in the previous year.

6. Directors:

Mr. S. Ramadorai and Dr. R. Natarajan retire by rotation and being eligible, offer themselves for reappointment.

Mrs. Shyamala Gopinath, who has been appointed as an Additional Director with effect from 18th August 2011, holds office up to the conclusion of the ensuing Annual General Meeting. The Company has received a notice from a member u/s 257 of the Companies Act, 1956 proposing Mrs. S. Gopinath to the office of Directorship whose terms of office will be determined by retirement by rotation.

In accordance with the Guidelines on Composition of Board adopted by your Company's Board of Directors, Mr. H.H. Malgham stepped down from your Company's Board effective 23rd July 2011 on attaining the maximum age permissible for Directors under the guidelines. Mr. Malgham was the Chairman of the Audit and Remuneration Committees. He was also the member of the Executive and Investors Grievance Committees. The Directors place on record their appreciation for the valuable contribution made by him during his tenure in the Board and different Committees of the Board.

7. Directors Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, confirm that -

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

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them 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 at the end of the financial year and of the profit of the Company for that year;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956, 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.

8. Personnel:

Your company recognizes the critical importance of its human capital. Capacity addition through the induction of fresh engineers and lateral hires are driven by the annual business planning exercise. Capacity addition is continuously monitored and changed depending on business demand. Your company takes significant initiatives to increase efficiency through training, leadership development, and other measures.

9. Disclosure of Particulars:

Information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under, is provided in Annexure-B forming part of the Report. In terms of Section 219(1) (b) (iv) of the Act, the Report and Accounts are being sent to the Shareholders, excluding the aforesaid Annexure. Any Shareholders interested in obtaining a copy of the same may write to the Company Secretary.

10. Subsidiary Company, Statement under Section 212 of the Companies Act, 1956 and Consolidated Financial Statements:

The Company's wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. recorded a turnover of Rs 26.54 crores and Profits before Tax of Rs 2.82 crores during the year 2011-12, as against the previous year's turnover of Rs 4.90 crores and Profit before tax of Rs 0.85 crores. The Board of Directors of your Company has given their consent for not attaching to its Balance Sheet, the documents relating to its subsidiary specified in Section 212 (1) of the Companies Act, 1956 in terms of the General Circular no. 2/2011 of the MCA.

In terms of the said circular, a statement in one page containing specified financial details of the subsidiary Company, is to be included in the consolidated annual financial statements of the parent Company. The annual accounts of the subsidiary and the related detailed information will be made available to the holding and subsidiary Companies investors seeking such information at any point of time. The annual accounts of the subsidiary will also be kept available for inspection by any investor at the head office of the parent and subsidiary Company respectively.

As required pursuant to the Accounting Standards of the Institute of Chartered Accountants of India and the Listing Agreement with the Stock Exchanges, the stand-alone annual accounts of your Company, along with the consolidated financial statements of your Company and the subsidiary Company made up to 31st March 2012, are also presented.

11. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors' Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

12. Voluntary Delisting of Company's Equity Shares

During the year under review your Company applied for voluntary delisting of its equity shares from Bangalore Stock Exchange and Delhi Stock Exchange in terms of the SEBI (Delisting of Securities) Regulation, 2009. The Bangalore Stock Exchange, vide its letter no. 03/2011/476 dated 15th November, 2011, delisted the Company's Equity shares from their stock exchange with effect from 15th November, 2011. The delisting of Company's equity Shares from Delhi Stock Exchange is yet to happen. The Company's equity shares continue to be listed with Bombay Stock Exchange (BSE) & National Stock Exchange (NSE) and are being actively traded in these exchanges.

13. Acknowledgements:

The Directors wish to thank the Company's employees, customers, partners, suppliers, and above all, its shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors

S. RAMADORAI

Chairman

Mumbai, May 07, 2012


Mar 31, 2011

1. The Directors present the Twenty-second Annual Report together with the Audited Statements of Accounts of your Company for the year ended March 31,2011.

2. Financial Highlights:

During the financial year 2010-11, the operations of your Company resulted in the following:

(Rs. Crores) Unconsolidated Consolidated 2010-11 2009-10 2010-11 2009-10

Sales and Service 411.01 376.37 415.91 388.17

Other income 3.86 0.95 3.86 0.95

Total Income 414.87 377.32 419.77 389.12

Profit before financial expenses and depreciation 50.20 67.95 51.05 68.94

Less : Financial expenses 1.88 1.74 1.88 1.74

Depreciation 17.20 16.58 17.20 16.58

Net profit for the year 31.12 49.63 31.97 50.62

Less: Provision for Income tax (0.61) 1.72 (0.55) 1.80

Profit after tax 31.73 47.91 32.52 48.82

Add: Profit brought forward 105.99 88.58 107.13 88.81

Balance available for appropriation which has been 137.72 136.49 139.65 137.63 appropriated as under:

Proposed dividend. 21.80 21.80 21.80 21.80

Dividend tax thereon net of reversal thereof. 3.45 3.70 3.45 3.70

Transfer to general reserve 5.00 5.00 5.00 5.00

Balance of profit carried to Balance Sheet 107.47 105.99 109.40 107.13 Total appropriations 137.72 136.49 139.65 137.63

3. Dividend:

Your Directors recommend for your approval a dividend of 70% (Rs.7.00 per share) [previous year 70% (Rs.7.00 per share)] for the year ended 31st March 2011, involving an outgo of Rs. 21.80 Cr. (previous year Rs.21.80 Cr.). Additionally, dividend distribution tax will involve an outlay of Rs.3.45 Cr. (previous year Rs.3.70 Cr.), involving a payout ratio of 79.6%.

4. Review of Operations:

On consolidated basis, the turnover during the year under review was Rs.415.91 Cr. as against Rs.388.17 Cr. in the previous year, registering an overall increase of 7.1%. The Profit after Tax was Rs.32.52 Cr. as against Rs.48.82 Cr. in the previous year.

The market registered slow but steady recovery in the key industry segments that your company operates in. Your company registered the increase in turnover by successfully implementing and executing on strategies for market focus, improved treasury and financial management, and improved efficiency and productivity.

More details are set out in the attached Management Discussion and Analysis Statement.

A business-wise analysis of your Companys two main segments viz. Software Development & Services and Systems Integration & Support follows hereunder:

Software Development & Services:

The businesses constituting this segment are Embedded Product Design, Industrial Design and Visual Computing Labs. Business in this segment registered an increase of 6.3% to Rs.358.19 Cr. during FY11 from Rs.336.94 Cr. in FY10. The segment profit decreased from Rs.57.67 Cr. to Rs.36.81 Cr., mainly on account of increased personnel expenses.

Embedded Product Design:

The Embedded Product Design division provides technology consulting, new product development, system integration and testing services for the broadcast, industrial and consumer electronics, transportation, wireless communications and convergence industries. It also creates and licenses intellectual property and software components, helping customers create product differentiation and reduce development costs and time-to-market.

Your company has identified certain growth markets for the future and is working towards building market traction and competencies to garner scale and market share in these selected industry segments.

Industrial Design:

The Industrial Design division helps customers develop winning brands and products by using design as a strategic tool for business success. Its expertise extends across consumer insight, branding, industrial design, visual design & merchandising, design engineering and manufacturing support.

This division has worked with prestigious FMCG brands in packaging design. It has developed award-winning designs in the food, beverage, personal and home care segments for leading brands in India and Overseas.

It has also executed several projects for interior and exterior styling of cars and transportation products, and is also targeting the growing Asian market in this segment.

Visual Computing Labs:

Visual Computing Labs offers Animation, Visual Effects (VFX) and 3D stereoscopic content for feature films, episodic television and advertising.

It also offers custom content development for visualization and product marketing, and is a leading developer of mobile, online and console games.

During the year, the Overseas VFX studio set up at Santa Monica near Hollywood commenced projects for several Hollywood productions. It has also built capability in its US and Mumbai studios, to deliver 3D Stereoscopic content related work.

Systems Integration & Support:

During the year, the segment turnover and results were Rs.57.71 Cr. and Rs.6.77 Cr. respectively, compared to Rs.51.23 Cr. and Rs.4.06 Cr. respectively during 2009-10.

This business has improved its turnover and profits, while focusing on a solutions centric approach which includes more of software and services. It also focused on growing the professional services business to enable better margins.

5. Finance:

Interest cost was Rs.1.88 Cr. against Rs.1.74 Cr. in the previous year. Borrowings, which were Rs.33.97 Cr. at the beginning of the year, reduced to Rs.25.43 Cr. at the end of the year.

6. Directors:

Mr. P.G. Mankad and Mr. P. McGoldrick retire by rotation and being eligible, offer themselves for reappointment.

Mr. Ramadorai, Chairman, has been appointed as the Advisor to the Prime Minister in the Prime Ministers National Skill Development Council in the rankof Cabinet Minister with effectfrom February 07,2011. The Directors place on record their heartiest congratulation and wishes Mr. Ramadorai all the best for this prestigious appointment.

7. Directors Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, confirm that -

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

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them 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 at the end of the financial year and of the profit of the Company for that year;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, 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.

8. Personnel:

Your Company recognizes the critical importance of its human capital and significant initiatives are planned for 2011-12 to increase capacity through the induction of fresh engineers and lateral hires from the industry, as also increased efficiency through technical training and other productivity enhancing inputs.

9. Disclosure of Particulars:

Information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under, is provided in Annexure-B forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholders interested in obtaining a copy of the same may write to the Company Secretary.

10. Subsidiary Company, Statement under Section 212 of the Companies Act, 1956 and Consolidated Financial Statements:

The Companys wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. recorded a turnover of Rs.4.90 Cr. and Profits before Tax of Rs.0.85 Cr during the year 2010-11 as against the previous years turnover of Rs.11.80 Cr. and Profit before Tax of Rs.0.99 Cr, which relates mainly to the Systems Integration segment business. Your Company has been granted exemption for this financial year by the Ministry of Corporate Affairs from attaching to its Balance Sheet the documents relating to its subsidiary specified in Section 212 (1) of the Companies Act, 1956.

In terms of the said exemption, a statement in one page containing specified financial details of the Subsidiary Company is to be included in the consolidated annual financial statements of the parent Company. The annual accounts of the subsidiary and the related detailed information will be made available to the holding and Subsidiary Companies investors seeking such information at any point of time. The annual accounts of the subsidiary will also be kept available for inspection by any investor at the head office of the parent and Subsidiary Company respectively.

As required pursuant to the Accounting Standards of the Institute of Chartered Accountants of India and the Listing Agreement with the Stock Exchanges, the stand-alone annual accounts of your Company along with the consolidated financial statements of your Company and the Subsidiary Company made upto 31st March, 2011, are also presented.

11. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report, the Management Discussion & Analysis Statement and the Auditors Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

12. Acknowledgements:

The Directors wish to thank the Companys esteemed customers, partners, suppliers, and above all, its shareholders and investors for their continued support and co-operation.



On behalf of the Board of Directors

S. RAMADORAI Chairman

Mumbai, 27th April 2011


Mar 31, 2010

1.The Directors present the Twenty-first Annual Report together with the audited Statements of Accounts of your Company for the year ended March 31, 2010.

2 Financial Highlights

During the financial year 2009-10, the operations of your Company resulted in the following :

(Rs. Crores) 2009-10 2008-09 Sales and Service 376.37 418.52 Other income 0.95 0.14 Total Income 377.32 418.66 Profit before financial expenses and depreciation 67.95 81.41 Less : Financial expenses 1.74 3.77 Depreciation 16.58 15.95 Net profit for the year 49.63 61.69 Less : Provision for Income tax 1.72 3.59 Profit after tax 47.91 58.10 Add: Profit brought forward 88.58 61.97 Balance available for appropriation which has been appropriated as under: 136.49 120.07 Dividend 21.80 21.80 Dividend Tax thereon 3.70 3.70 Transfer to General Reserve 5.00 6.00 Balance of Profit carried to Balance Sheet 105.99 88.57 Total Appropriations 136.49 120.07

3. Dividend

Your Directors recommend for your approval a dividend of 70% (Rs. 7.00 per share) [previous year 70% (Rs. 7.00 per share)] for the year ended 31st March 2010, involving an outgo of Rs. 21.80 crores (previous year Rs. 21.80 crores). Additionally, dividend distribution tax at 17 % (including surcharge) will involve an outlay of Rs 3.70 crores (previous year Rs. 3.70 crores). Notwithstanding the drop in the Profits after Tax by17.54%, your Directors have kept the dividend at 70% involving a payout ratio of 53.22% which signals confidence in the future growth prospects of your Company.

4. Review of Operations

Your Company continued to face difficult conditions for the most part of 2009-10. While there was a gradual revival of demand for your Company’s services in select areas in terms of enquiries from its existing and new customers, the sales cycle did not significantly shorten and hence many of these opportunities could not get converted into business. Also, some of the traditional and existing large customers of your Company, due to difficult economic conditions being faced by them, continued with their reduced level of offtake of services from your Company. The Rupee also strengthened during the year - against the dollar by 12%, the Pound by 7%, the Euro by 11% and the Yen by 7% - resulting in lower export realizations. These factors contributed to the turnover dropping by10% from Rs. 418.51 crs to Rs. 376.37 crs with consequent impact on the Profits before Tax dropping by19.55% from Rs. 61.69 crs to Rs. 49.63 crs and Profits after Tax dropping by 17.54 % from Rs. 58.10 crs to Rs. 47.91 crs. Your Company expects that across-the-board growth in all its offerings will happen from the latter part of 2010-11 and is confident of getting back to its growth mode during this year itself.

IP related sales saw good traction during the year, especially in the broadband wireless area. Your Company has developed IP related to Wimax and is already working on development of IP and reference designs for LTE, which is an upcoming standard for 4G wireless.

Good traction was also seen in the technology domains catering to the broadcasting and transportation market verticals.

More details are set out in the attached Management Discussion and Analysis Statement.

A business-wise analysis of your Company’s two main segments viz. Software Development & Services and Systems Integration & Support follows hereunder.

Software Development & Services:

The businesses constituting this segment are Product Design Services (Design & Development of Hardware and Software), Innovation Design Engineering (Mechanical Design with a focus on Industrial Design) and Visual Computing Labs Division (Animation and Special Effects). For the reasons mentioned above, the business in this segment dropped to Rs 336.94 crs during 2009-10 from Rs. 378.43 cr. in the previous year with corresponding decrease in the segment results to Rs 57.67 cr. from Rs.70.55 cr..

Product Design Services:

Your Company’s Product Design Services (PDS) Division provides offerings in multiple domains such as Broadcast, Wireless, Transportation, Convergence, DSP, Graphics and Imaging and Semicon and services markets such as automotive, aerospace, consumer products, networking, semiconductors, multimedia, telecom and instrumentation with cost effective and timely product engineering services. Your Company is also moving towards solutions based offerings rather than point service engagements with a view to increasing its value proposition thereby. Your Company sees growth opportunities in the telecommunication and broadcasting domains where there have been good breakthroughs achieved during 2009-10, apart from accelerating its growth in the other key domain of transport electronics. Your Company has identified new business in defence and public safety, avionics and utilities and smartgrid applications which should drive its future growth.

Innovation Design Engineering Services:

This Division supports global corporations in the area of new brand/product introduction from concept to market. Its expertise lies in the areas of consumer insights, product/service innovation, industrial design, functional prototyping and engineering. It also engages in brand development and retail design. It services diverse industries ranging from FMCG, automotive, electronics and appliances to healthcare.

During the year, the Division entered into an alliance with a leading hospital to jointly develop innovative healthcare devices with an emphasis on user and functional efficiencies. It also further strengthened its range of services in the areas of branding, signages and virtual marketing. It was involved in the creation of the marketing content for the launch of a new vehicle for one of India’s leading automotive companies and also won a significant order for signages and graphic design from a metro transport operator. This is a testimony of the Division’s capabilities to address emerging areas of design where design is adding exponential value to the end product. Another area of growth for the Division is the defence and aerospace sector, considering the potential of design services for these industries. The expertise in these areas are scalable and the Division is hopeful of similar future opportunities.

Visual Computing Labs:

This Division delivers 3D computer graphics, animation and special effects in the pre-production, production and post-production of content for the film, television, gaming and advertising industry.

During the year, an overseas VFX studio was set up at Santa Monica near Hollywood, which is the heart of the global film industry, and staffed with local industry veterans to address the VFX requirements of the Hollywood industry. The studio represents a strategic move by the VCL Division to establish its capabilities and credibility in the local markets of Hollywood and overcome the constraint of having a remote studio located in India which was perceived as an obstacle to getting more business from the Hollywood industry. Hence, while the studio in Santa Monica would concentrate on the high end VFX work locally, the India studio would cater to the domestic markets and also address any lower end manpower intensive work obtained by the Santa Monica studio, with potential of sharing certain common infrastructure and resources. It is expected that the Santa Monica studio will accelerate the revenue growth from the Hollywood market and recover the higher operating costs that this studio incurs, during 2010-11 itself.

In the domestic market, the VCL Division continued to dominate in the area of VFX offerings for films. On the 3D animation side, the second animated theatrical project (after Roadside Romeo) which VCL commenced work on in 2008-09 is nearing completion. The

3D animation industry has remained challenging in 2009-10, with no new project announcements.

During the year, this Division also won several prestigious awards for its technical expertise, the most notable of which were two National awards from the President of India for the work done on the films “Roadside Romeo” and “Mumbai meri Jaan” . Some of the other international awards include Cairo International Film Festival, Golden Panda Award and London International Creative Competition.

Systems Integration & Support

This Segment is involved in value-added reselling involving systems integration and support for a wide range of technical computing hardware and software solutions involving high-end computing platforms, mechanical design automation tools, enterprise storage solutions, digital media and life sciences solutions through its tie-ups with global leaders in these respective areas. During the year, the segment turnover and results were Rs.39.43 crs. and Rs.3.08 crs. respectively, compared to Rs.40.09 crs. and Rs.2.34 crs. respectively during 2008-09.

Due to the low margins on hardware products, the Segment is focusing on a solutions centric approach which includes more of software and services and reducing its dependence on pure hardware business. The segment has geared itself to tap business opportunities in the high growth areas of security and surveillance, videoconferencing solutions, storage and server virtualization software and services etc..

5. Finance

Interest costs reduced to Rs.1.74 crs. (previous year Rs.3.77 cr.) mainly through reduced borrowing costs. The borrowings, which was Rs.13.07 crs at the beginning of the year, increased to Rs.33.97 crs. at the end of the year.

6. Directors

Consequent to the stepping down of Mr. Syamal Gupta as Chairman at the last Annual General Meeting pursuant to the Tata Group Retirement Policy, Mr. S. Ramadorai, who was Vice Chairman, took over as Chairman of your Company on 7th September 2009. Your Company will greatly benefit from Mr. Ramadorai’s Chairmanship and expertise and eminence in the IT industry.

Mr. C.P. Mistry, who was a Director of your Company from inception, stepped down from the Board on 26th October 2009 due to his other business commitments. Mr. Mistry has contributed significantly to the deliberations of the Board and the various Committees with which he was associated and your Board places on record its deep appreciation of the valuable services rendered by Mr. Mistry during his association with your Company.

Mr. S. Ramadorai and Mr. H.H.Malgham retire by rotation and being eligible, offer themselves for reappointment.

7. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, confirm that -

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

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956, 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.

8. Personnel

The difficult business conditions faced by your Company during 2009-10 constrained its abilities to reward and invest in its human resources as in earlier years. While wage revisions were frozen during the year, no business related lay-offs were enforced.

With the gradual revival of the IT industry, attrition levels, which was less than 10% during 2008-09 gradually increased and peaked during the second half of 2009-10. With improved business visibility for 2010-11, wage revisions were re-introduced and salaries

revised effective 2010-11. A series of other measures were also initiated to attract, retain and motivate employees which have been effective to a great extent in arresting attrition.

Your Company recognizes the critical importance of its human capital and significant initiatives are planned during 2010-11 to provide technical training, soft skills and other productivity enhancing inputs.

9. Disclosure of Particulars

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder, is provided in Annexure B forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

10. Subsidiary Company, Statement under Section 212 of the Companies Act, 1956 and Consolidated Financial Statements

The Company’s wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. recorded a turnover of Rs.11.80 crs. and Profits before Tax of Rs.0.99 crs. during the year 2009-10 as against the previous year’s turnover of Rs.2.00 crs and Profit before Tax of Rs.0.24 crs, which relates mainly to the Systems Integration segment business. Your Company has been granted exemption for this financial year by the Ministry of Corporate Affairs from attaching to its Balance Sheet the documents relating to its subsidiary specified in Section 212 (1) of the Companies Act, 1956.

In terms of the said exemption, a statement in one page containing specified financial details of the subsidiary company is to be included in the consolidated annual financial statements of the parent company. The annual accounts of the subsidiary and the related detailed information will be made available to the holding and subsidiary companies investors seeking such information at any point of time. The annual accounts of the subsidiary will also be kept available for inspection by any investor at the head office of the parent and subsidiary company respectively.

As required pursuant to the Accounting Standards of the Institute of Chartered Accountants of India and the Listing Agreement with the Stock Exchanges, the stand-alone annual accounts of your Company alongwith the consolidated financial statements of your Company and the subsidiary company made upto 31st March 2010, are also presented.

11. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report, the Management Discussion & Analysis Statement and the Auditors’ Certificate regarding Compliance of Conditions of Corporate Governance are part of this Annual Report.

12. Acknowledgements

The Directors wish to thank the Company’s esteemed customers, partners, suppliers, employees and above all, its shareholders and investors for their continued support and co-operation.

On behalf of the Board of Directors S. RAMADORAI Chairman Mumbai, 30th April 2010

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