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Directors Report of Tata Elxsi Ltd.

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



 
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