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Directors Report of Tata Investment Corporation Ltd.

Mar 31, 2017

TO

THE MEMBERS,

The Directors present their Eightieth Annual Report with the Audited Financial Statements for the year ended 31st March, 2017.

1. FINANCIAL RESULTS :

Standalone

Consolidated

Previous Year

Previous Year

(Rs. in crores)

(Rs. in crores)

(Rs. in crores)

(Rs. in crores)

Dividend, Interest & Other Income.............................................

123.56

137.02

121.96

130.01

Profit on Sale of long term Investments (net).........................

147.81

115.05

147.81

117.69

Total Revenue ......................................................................................

271.37

252.07

269.77

247.70

Profit before tax..................................................................................

240.08

234.22

237.17

228.91

Less: Provision for tax........................................................................

37.70

31.61

38.35

31.66

Profit after tax......................................................................................

202.38

202.61

198.82

197.25

Share of Profits of Associates.........................................................

-

-

1.65

(2.87)

Minority Interest.................................................................................

-

-

(0.07)

(0.02)

Profit for the year................................................................................

202.38

202.61

200.40

194.36

Balance brought forward from the previous year..................

335.21

285.85

410.20

369.17

The Directors have made the following appropriations -Dividend on Ordinary Shares (Refer para 3)..............................

-

93.66

-

93.66

Tax on Dividend (Refer para 3).......................................................

-

19.07

-

19.07

Statutory Reserve..............................................................................

40.48

40.52

41.05

40.67

40.48

153.25

41.05

153.40

Surplus as per Statement of Profit and Loss............................

497.11

335.21

569.50

410.20

Earnings Per Share

Basic and Diluted (Rs.)..........................................................................

36.73

36.77

36.37

35.28

2. OPERATIONS :

The Standalone Operating Income of the Company is derived from a mix of dividend and interest income, supplemented by profit on sale of investments. The profit from sale of long term investments for the year ended 31st March, 2017 is Rs. 147.81 crores as compared to Rs. 115.05 crores for the previous year. The standalone profit before tax for the year under review is Rs. 240.08 crores as against Rs. 234.22 crores in the previous year, whereas the profit after tax for the year under review stands at Rs. 202.38 as against Rs. 202.61 crores as on 31st March, 2016. The Consolidated profit for the year amounted to Rs. 200.40 crores as compared to Rs. 194.36 crores in the previous year.

Shareholders may note that the dividend earned by the company during the financial year 2015-16 includes interim dividends received in the last quarter from its investee companies, which have not further proposed any final dividend at the time of declaring their annual results in the financial year 2016-17. This has impacted the dividend income earned for the current year which stands at Rs. 72.35 crores as compared Rs. 86.44 crores in the previous year.

The basic and diluted earnings per share (EPS) computed in accordance with the ''Accounting Standard 20'' is Rs. 36.73 per share as at 31st March, 2017 against Rs. 36.77 per share as at 31st March, 2016.

The total number of companies held in the equity / bond portfolio of the Company stands at 111 as on 31st March, 2017, out of which 87 are Quoted and 24 are Unquoted companies.

3. DIVIDEND :

The Directors are pleased to recommend a dividend of Rs. 18 per share (180%) on the paid up capital of Rs. 55.10 crores [previous year - Interim Dividend Rs. 17 per share (170%)].

In terms of revised Accounting Standard (AS) 4 ''Contingencies and Events occurring after Balance Sheet date'' as notified by the Ministry of Corporate Affairs through amendment to Companies (Accounting Standard) Amendment Rules, 2016, the Company has not appropriated proposed dividend (including tax) from the Surplus as per Statement of Profit and Loss for the year ended 31st March, 2017. The recommended dividend will be accounted for when approved by the shareholders.

4. VALUE CREATED :

Shareholders will recall that for the first time in the Annual Report of 31st March, 2015 the Company had shared the "Value Created" over a 15 year period. The table below analyses the performance of the Company''s portfolio rolling over the period to the 15 year prior to the closing of the current financial year 31st March, 2017. "Value Created" is a measure which evaluates the wealth created net of the capital invested by the shareholders. "Value Created" is the Realisable Value of Investments as on 31st March to which is added Net Current Assets and Fixed assets while any contribution from shareholders is reduced (i.e. equity and share premium).

The following table shows the Value Created over 15 year period and comparative returns to the Benchmark.

Year End 31st March

Realisable Value of Investments (A) (Rs. crs)

Net Current Assets (B) (Rs. crs)

Shareholder Funds (Equity Share Premium) (C) (Rs. crs)

Value Created (A) (B)-(C) (Rs. crs)

BSE 200

2002

499.82

37.80

68.94

468.68

394

2017

8,418.64

24.52

806.81

7,636.35

3,992

Nos of times (X)

16.29

10.13

CAGR

20.46%

16.69%

[ Note: The realizable value of investments as on 31st March, 2002 includes value of unquoted investments at cost. ]

Shareholders will be pleased to note that the "Value Created" has recorded a Compounded Annual Growth rate (CAGR) of 20.46% vis-a-vis the BSE 200 CAGR of 16.69 % for the 15 year period 31st March, 2002 to 31st March, 2017. It is heartening that this performance has been achieved while the management has endeavoured to reduce the risk to the portfolio with a prudent allocation to unlisted equity and fixed income securities. The Company has consistently declared dividend which over the last 15 years has aggregated Rs. 1,044 crores. Thus, if the value of dividend distributed were to be added to Value Created, the multiplier and returns of the portfolio would stand enhanced to the extent the value was distributed to the shareholders.

5. MANAGEMENT DISCUSSION & ANALYSIS :

A summarized position of the Company''s portfolio of investments is given below:-

As on 31.03.2017 (Rs. in crores)

As on 31.03.2016 (Rs. in crores)

QUOTED INVESTMENTS (Non-Current)

Net Book value...................................................................................................................................

1993.56

1824.32

Market value........................................................................................................................................

7181.38

5527.13

UNQUOTED INVESTMENTS (Non-Current)

Net Book value...................................................................................................................................

426.53

373.03

Estimated value (please see para below)..................................................................................

1237.26

1130.45

TOTAL BOOK VALUE

Net Book value of all investments..............................................................................................

2420.09

2197.35

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments ...................................................................................................................

8418.64

6657.58

BANK DEPOSITS AND INTERCORPORATE DEPOSITS.....................................................

10.00

20.00

TOTAL NUMBER OF COMPANIES ............................................................................................

111

110

Net Asset Value (NAV) - Per Share

Before tax (Rs.).......................................................................................................................................

1530

1215

After tax (Rs.)..........................................................................................................................................

1300

1045

The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2017, and the remaining relatively small balance of unquoted investments taken at respective book values.

The Directors confirm that all the investments classified as non-current investments / trade investments as per the Schedule III of the Companies Act, 2013 ("Act") have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade.

The Company continues to remain invested in leaders in sectors, which we believe have potential to remain value accretive over the long term. The Company continues to invest for the long term while availing opportunities to realize gains endeavouring to maintain its policy of consistent dividend distribution.

The Company invests in Tata and Non-Tata companies, both listed and unlisted, though investments in Tata companies constitute a larger portion and may be considered of a longer term and strategic in nature.

The Company endeavours to evaluate opportunities considering the macro economic conditions both globally and domestically.

Global Events, Markets and Risks

The year 2016 was undoubtedly a year of momentous referendums. In perhaps the worlds'' most mature democracies, namely UK and USA, the electorate surprised the world with their vote for Brexit and for President Trump respectively. Both referendums have given mandates which may change the contours of global trade relations in the developed world in the years to come. Mr. Trump in the first few days of his Presidency, vide an executive order, revoked US''s participation in the Trans-Pacific Partnership (TPP) deal, which had taken more than seven years to negotiate, and was considered the largest regional trade deal in history and a cornerstone of the Obama administration. Mr. Trump promises a tougher line with China. In all, the odds are that President Trump''s foreign policy decisions will dominate the news in 2017 and possibly redefine America''s relations with the world.

North Korea continues to forge ahead with acts of aggression. In January 2016, it conducted its fourth nuclear test since 2006, and followed that up with a series of ballistic missile tests. Then on September 9, 2016 it conducted its fifth nuclear test, producing an explosive yield of 10 kilotons, the highest recorded so far. North Korea can already strike Japan and South Korea. It perhaps now commands the highest rating in any statement of geopolitical risk.

While the news media analyzed these events with trepidation and analysts flagged the risks and uncertainties, the S&P 500 appreciated 9.5% for the calendar year followed by a further 5.5% since the quarter ended 31st March, 2017. The bull market in the US is now eight years in build up after the crash during the financial crisis of 2009. The erstwhile peak of the S&P 500 in 2007 of 1526 was quietly breached on Jan 1, 2013 and has since then, besides a short correction during a few months in 2015, had a relentless upward march, clocking a new peak at 2399 by 8th May, 2017.

The US seems to be the driver of global equity markets. Undoubtedly, the world''s largest basket of wealth is managed in the US and therefore allocations are driven by the views of Fund Managers in the US. A vibrant US market motivates fund managers to allocate larger funds to other markets in search of new opportunities and as a means of diversification. Equity investors look for growth and global market capitalization has grown with substantial growth in GDP.

The following illustration shows how the gradient of Global GDP growth has become steeper since the beginning of the 21st century and has remained so for the last few years. This is remarkable given that universally all economies faced the shock of the global financial crisis in the first decade of the century itself, and thereafter had to revive in the aftermath of economic and financial uncertainty. Strange as it may be the world GDP has continued to grow admirably, in the last decade even after the financial crisis, while economists and central bankers have remained perturbed with what they consider low rates of growth.

Going forward, perhaps the biggest risk to equity markets are the extended valuations in the US markets. The S&P 500 EPS over the last decade has remained in a narrow band of 85 -110 whereas the value of the S&P has appreciated significantly, especially in the last five years. The S&P EPS has fallen in the last three years as is seen in the following illustration. Further, since 2010, US companies have borrowed funds to do share buybacks which, according to some research reports, aggregated $3.25 trillion for the S&P 500 companies and net of issuances, has reduced the number of shares issued by about 9.3%. Thus, in essence, if the number of shares had remained the same, the EPS would be lower by about 11%, reflecting a higher de-growth in this period of rampant exuberance.

In contrast, in India the appreciation in the BSE 200 over the last decade has largely been supported by consistent growth in earnings, albeit the growth has been lower in the last few years. Macroeconomic parameters in India have also seen a sharp improvement in the last three years with current account deficit, fiscal deficits and inflation falling sharply.

The government embarked upon the most courageous reform measure of Demonetization in Nov, 2016. The people of India, especially the poor and those in the rural areas showed incredible patience and forbearance. In the six months, post December 2016, the system has come back to normal leaving a bonus in the hands of banks in the form of additional CASA. Lower withdrawals of funds as compared to the funds deposited, aggregating a few hundred thousand cores, has left substantial liquidity with banks. Demonetization was the government''s Trishul against corruption, which may or may not succeed, but it definitely has changed the people''s mindset to the use of alternate means of transacting.

India today has perhaps the largest "digital network access'''' in the world. 910 million Aadhar holders can beam money to each other using various Apps. In December 30th 2016, India launched BHIM (Bharat Interface for Money) which is a digital payments platform using UPI (Unified Payments Interface). Now payments can be made from UPI accounts to non-UPI accounts and people can use QR codes for instant payments. Habits may take a few years to change but the system using QR code is simple and ingenious. Payments can now also be made using mobile phones, just using fingerprints and an Aadhaar number.

The Indian consumer over time will find using these platforms far easier than cash. Imagine a domestic employee in Mumbai whose family lives in a far away village can now send his salary to his wife using his mobile, with a touch of a button. She can use these funds to buy vegetables, pay children school fees, etc. In some countries like Africa, mobile wallets exceed the number of bank accounts and number of mobile transactions exceed the number of inter-bank transactions. Every year the growth in volume and value of such transactions may perhaps increase the multiplier effect of money.

Electronic banking systems will allow the poor to store and protect money digitally. Mr. Bill Gates in his 2015 annual letter said that "by 2030, 2 billion people who don''t have a bank account today will be storing money and making payment with their phones." A billion Indians may be included in this count.

GST is now a reality, it will be implemented from July 1, 2017. GST may cause disruption in the first few months. Manufacturers and traders most likely will face a grueling period of reorientation in their working capital requirements and inventory management. It seems enterprises and individuals have reconciled to the fact that for some time capital requirements will be substantially higher given that GST credits may be delayed within the system. Going forward the system will reduce distribution and warehousing costs for large manufacturers. It is not clear how traders and retailers will benefit. Tax collection from the system should be higher as a percentage of GDP.

Global allocations of funds both for FIIs/FDI is selective and flow into markets where there is an interesting story to invest in. In the last three years, India has been an interesting story. Foreign investors have recognized that the present government''s vision and endeavours are giving shape to a base which promises India to become a destination for consistent and attractive returns on capital invested. Domestic allocations of personal savings towards equities have also increased sharply in the last two years.

(Rs. in crores)

Investment in Equity

2014-15

2015-16

2016-17

Net FII Inflows

110,243

-4,882

58,326

Net MF Inflows

70,367

74,024

71,029

Total Fund Based Flows

180,610

69,142

129,355

FDI Inflows

189,107

262,321

291,696

Total Equity Flows

369,717

331,463

421,051

To summarize the Indian economy and markets are standing on stronger and exciting fundamentals. Equities have already begun to discount the prospects of higher growth in earnings with the BSE 200 appreciating 23% during the fiscal year ended March 2017. Having made these observations, your Company continues to incrementally invest in companies which enjoy the benefits from India''s growing market, be it Auto, FMCG, Defense, Banking and Housing Finance. We will continue to look for opportunities both in the listed and unlisted space.

6. FIXED DEPOSITS :

The Company has not accepted any public deposits under the provisions of the Act.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :

The provisions of Section 186 of the Act pertaining to investment and lending activities is not applicable to the Company since the Company is an NBFC whose principal business is acquisition of securities. During the year, the Company has not provided any guarantee.

8. CONSOLIDATED FINANCIAL STATEMENTS :

The Consolidated Financial Statements of the Company prepared in accordance with ''Accounting Standard 21'' issued by the Institute of Chartered Accountants of India, form part of the Annual Report.

The annual accounts of the subsidiary company and related detailed information are available on the website of the Company and are kept at the Registered Office of the Company and its subsidiary company and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of Simto Investment Company Ltd. (Subsidiary), and the following Associate Companies namely Tata Asset Management Ltd., Tata Trustee Company Ltd. and Amalgamated Plantations Private Ltd.

The Company has adopted a Policy for determining material Subsidiaries in terms of Regulation 16 (1) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The Policy, as approved by the Board, is uploaded on the Company''s website.

Subsidiary Company

The Company has a subsidiary Simto Investment Company Ltd. ("Simto") which is registered as a Non-Banking Financial Company with the Reserve Bank of India. In terms of Regulation 16(1)(c) of the Listing Regulations, Simto is not a material unlisted subsidiary. Simto is engaged in investment activities which allocates capital in the market to participate in activities other than making investments for the long term which has been the primary activity of the Company for many decades.

Simto has an Issued Capital of Rs. 1.53 crores with a net worth of Rs. 24.80 crores as on 31st March, 2017. The market value of investments held by Simto is valued at Rs. 55.07crores as on 31st March, 2017.

Associate Companies

1. Tata Asset Management Ltd.

The Company holds 32.09% of the equity share capital of Tata Asset Management Ltd. whose principal activity is to act as an investment manager to Tata Mutual fund and the company is registered with Securities Exchange Board of India ("SEBI") under the SEBI (Mutual Fund) Regulations 1996. The consolidated turnover of the company during the year was Rs. 197.81 crores and profit after tax for the year was Rs. 39.92 crores. The company has a net worth of Rs. 213.02 crores as on 31st March, 2017.

2. Tata Trustee Company Ltd.

The Company holds 50% of the equity share capital of Tata Trustee Company Ltd. which is acting as the Trustees to Tata Mutual Fund. During the year, the turnover of the company was Rs. 9.98 crores and profit after tax for the year was Rs. 5.94 crores. The company has a networth of Rs. 15.38 crores as on 31st March, 2017.

3. Amalgamated Plantations Private Ltd.

The Company holds 24.61% of the equity share capital of Amalgamated Plantations Private Ltd. ("APPL") which is engaged in the business of cultivation and manufacturing of tea and other allied agricultural products and packaging services. The turnover of APPL during the year was Rs. 659.79 crores and it registered a loss of Rs. 57.41crores during the financial year 2016-17.

A statement containing the salient features of the financial statements of the subsidiary company and associate companies is annexed to the Financial Statements in Form AOC-1 "Annexure A".

9. BOARD AND COMMITTEE MEETINGS :

During the year six Board Meetings and four Audit Committee Meetings were held. The details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The Board has constituted an Audit Committee under the Chairmanship of Mr. H. N. Sinor, the other members of the Committee being Mr. A. B. K. Dubash, Mr. P P. Shah and Mr. F. N. Subedar. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

10. 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 including audit of internal financial controls over financial reporting by the statutory 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(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, 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 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 the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

11. RISK MANAGEMENT :

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 17(9) of the Listing Regulations. It establishes various levels of risks with its varying levels of probability, the likely impact on the business and its mitigation measures.

The Internal Auditor evaluates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Asset Liability and Risk Management Committee oversees the Risk Management and reports to the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status from time to time.

12. INTERNAL CONTROL SYSTEMS :

The Company maintains appropriate systems of internal controls, including monitoring procedures, to ensure that all assets and investments are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

The Internal Auditors review the efficiency and effectiveness of these systems and procedures. Added objectives include evaluating the reliability of financial and operational information and ensuring compliances with applicable laws and regulations. The Internal Auditors submit their Report periodically which is placed before and reviewed by the Audit Committee.

13. INDIAN ACCOUNTING STANDARDS (Ind AS) :

Shareholders may note that as per notification from Ministry of Corporate Affairs dated 16.02.2015, listed NBFC Companies having a net worth of Rs. 500 Crore or more are required to comply with Ind AS in the preparation of their financial statements for accounting periods beginning on or after April 1st, 2018 with the comparatives for the periods ending March 31st, 2018.

Under Indian GAAP, the use of fair value is limited to current investments which are required to be recognized at the lower of cost and fair value. Long term investments are always recognized at cost less permanent diminution in value.

Under Ind AS, an entity will be required to classify financial assets (which includes investments) and subsequently measure at either amortized cost or fair value on the basis of both the entity''s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

All equity investments within the scope of Ind AS 109 are to be measured on the balance sheet at fair value with the default recognition of gains and losses in profit or loss unless an irrevocable election is made at initial recognition to measure it at Fair Value through Other Comprehensive Income (FVTOCI) wherein only dividend income is recognized in profit or loss and consequently the gains/losses arising from sale of equity investments would not be reflected in the Statement of Profit and Loss which could lead to a significant reduction in the first year of adoption of Ind AS in the Statement of Profit and Loss on Quarterly/Yearly basis.

14. VIGIL MECHANISM / WHISTLE BLOWER POLICY :

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

15. RELATED PARTY TRANSACTIONS :

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

There were no materially significant Related Party Transactions entered by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions, if any.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: http://www.tatainvestment.com/images/RelatedParty_Policy.pdf.

There are no transactions to be reported in Form AOC-2.

The details of the transactions with Related Parties are provided in the accompanying financial statements.

16. CORPORATE SOCIAL RESPONSIBILITY (CSR) :

In terms of Section 135 and Schedule VII of the Act, the Board of Directors has constituted a CSR Committee under the Chairmanship of Mr. F N. Subedar, Mr. A. B. K Dubash and Mr. A. N. Dalal are the other members of the Committee.

During the financial year, Mr. A. Chandra pursuant to his resignation as Director of the Company, has ceased to be a Member of CSR Committee and Mr. A. B. K. Dubash has been appointed as a member of the Committee.

The CSR Committee of the Board has framed a CSR Policy and uploaded it on the website of the Company http://www. tatainvestment.com/images/CSR_Policy.pdf.

The Annual Report on CSR activities is annexed herewith as "Annexure B". -

17. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE :

The Company has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the 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. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment ("POSH") Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2016-17.

18. DIVIDEND DISTRIBUTION POLICY :

Securities and Exchange Board of India (''SEBI''), by its notification dated 8th July, 2016, has amended the Listing Regulations by inserting a new Regulation 43A, mandating the top 500 listed entities, based on market capitalization calculated as on 31st March of every financial year, to formulate a Dividend Distribution Policy and disclose the same in their Annual Report and on their website.

Accordingly, the Board of the Company has adopted a Dividend Distribution Policy, which is annexed herewith as "Annexure C". The Policy is also available on the website of the Company.

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS :

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL :

Pursuant to the provisions of the Act and the Company''s Articles of Association, Mr. N. N. Tata, Director, retires by rotation and being eligible, offers himself for re-appointment.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Act and the Listing Regulations.

Mr. A. Chandra resigned as a Director from the Board of Directors with effect from 22nd September, 2016 and the Board of Directors place on record its sincere appreciation of his valuable support and guidance to the Board during his tenure.

There were no changes in the key managerial personnel of the Company during the year.

21. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS :

Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and individual Directors, including the Chairman of the Company.

For evaluating the Board as a whole, views were sought from the Directors on various aspects of the Board''s functioning such as degree of fulfillment of key responsibilities, Board Structure and composition, establishment, delineation of responsibilities to various committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the management.

Similarly, views from the Directors were also sought on performance of individual Directors covering various aspects such as attendance and contribution at the Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and promoting effective relationships and open communication, communicating effectively with all stakeholders and motivating and providing guidance to the Executive Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition, effectiveness of meetings, Committee dynamics and quality of relationship of the Committee with the Board and the Management.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of individual Directors.

The Chairman of the Board provided feedback to the Directors, as appropriate. Significant highlights, learning’s with respect to the evaluation, were discussed at the Board Meeting.

22. REMUNERATION POLICY :

The Board on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

23. AUDITORS : STATUTORY AUDITORS :

As per the provisions of Section 139 of the Companies Act, 2013, the term of office of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors of the Company will conclude from the close of the forthcoming Annual General Meeting of the Company.

The Board of Directors places on record its appreciation for the services rendered by M/s. Deloitte Haskins & Sells, Chartered Accountants as the Statutory Auditors of the Company.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/W-100166) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 for a period of five years commencing from the conclusion of this Annual General Meeting of the Company till the conclusion of the Eighty-fifth Annual General Meeting to be held in the year 2022, subject to ratification of their appointment at every Annual General Meeting held after this Annual General Meeting, if so required under the Act.

Members'' attention is drawn to a Resolution proposing the appointment of M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants as Statutory Auditors of the Company which is included at Item No. 5 of the Notice convening the Annual General Meeting.

SECRETARIAL AUDITORS :

Pursuant to provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure D"

The Auditor''s Report and the Secretarial Audit Report for the financial year ended 31st March, 2017 do not contain any qualification, reservation, adverse remark or disclaimer.

24. BUSINESS RESPONSIBILITY REPORT :

Regulation 34(2) of the Listing Regulations which was amended on 22nd December, 2015 to come into force from 1st April, 2016, inter alia, provides that the annual report of the top 500 listed entities based on market capitalization shall include a Business Responsibility Report (BRR).

A separate section on BRR as required under Regulation 34(2)(f) of the Listing Regulations is annexed herewith as "Annexure E".

25. EXTRACT OF ANNUAL RETURN :

The details forming part of the extract of the Annual Return in the form MGT-9 is annexed herewith as "Annexure F".

26. CONSERVATION OF ENERGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :

Being an investment company and not involved in any industrial or manufacturing activities, the Company''s activities involve very low energy consumption and has no particulars to report regarding conservation of energy and technology absorption. However, efforts are made to further reduce energy consumption.

During the year, the Company''s expenditure in foreign exchange is Rs. 3.93 lacs as mentioned in Note 8 to the Annual Report and the Company did not have any foreign exchange earnings during the year.

27. PARTICULARS OF EMPLOYEES AND REMUNERATION :

The information required under Section 197 (12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as "Annexure G" forming part of the Report.

The information required under Section 197(12) of the Act read with Rules 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. The said Annexure is open for inspection at the Registered Office of the Company. Any Shareholder interested in obtaining the same may write to the Company Secretary. None of the employees listed in the said Annexure is related to any Director of the Company.

A report on Corporate Governance, in accordance with Schedule V of SEBI Listing Regulations is set out separately for the information of the shareholders.

On behalf of the Board of Directors,

NOEL N. TATA

Chairman

Mumbai, 24th May, 2017


Mar 31, 2016

The Directors present their Seventy-Ninth Annual Report with the Audited Financial Statements for the year ended 31st March, 2016.

1. FINANCIAL RESULTS :

Standalone Consolidated

Previous Previous Year Year (Rs. in crores) (Rs. in crores) (Rs. in crores) (Rs. in crores)

Dividend, Interest & Other Income 137.02 130.15 130.01 127.84

Profit on Sale of long term Investments (net) 115.05 100.97 117.69 101.39

Total Revenue 252.07 231.12 247.70 229.23

Profit before tax 234.22 216.02 228.91 212.69

Less: Provision for tax 31.61 29.51 31.66 29.96

Profit after tax 202.61 186.51 197.25 182.73

Share of profits of Associates - - (2.87) 3.19

Minority Interest - - (0.02) (0.06)

Profit for the year 202.61 186.51 194.36 185.86

Balance brought forward from the previous year 285.85 249.38 369.17 334.02

The Directors have made the following appropriations :

Interim Dividend on Ordinary Shares 93.66 - 93.66 -

Dividend on Ordinary Shares - 93.66 - 93.66

Tax on Dividend 19.07 19.07 19.07 19.07

Statutory Reserve 40.52 37.31 40.67 37.71

153.25 150.04 153.40 150.44

Surplus as per Statement of profit and Loss 335.21 285.85 410.20 369.17

Earnings Per Share

Basic and Diluted (Rs.) 36.77 33.85 35.28 33.73

2. OPERATIONS :

The Operating Income of the Company is derived from a mix of dividend and interest income, supplemented by profit on sale of investments. The profit from sale of long term investments for the year ended 31st March, 2016 is Rs. 115.05 crores as compared to Rs. 100.97 crores for the previous year. The standalone profit before tax for the year under review is Rs. 234.22 crores as against Rs. 216.02 crores in the previous year, whereas the profit after tax for the year under review stands at Rs. 202.61 crores as against Rs. 186.51 crores as on 31st March 2015. The Consolidated profit after tax for the year amounted to Rs. 197.25 crores as compared to Rs. 182.73 crores in the previous year.

Shareholders may note that the dividend earned by the company during the financial year 2015-16 includes interim dividends received in the last quarter from its investee companies, which have not further proposed any final dividend at the time of declaring their annual results.

The basic and diluted earnings per share (EPS) computed in accordance with the Accounting Standard 20 was Rs. 36.77 per share as at 31st March, 2016 against Rs. 33.85 per share as at 31st March, 2015.

The total number of companies held in the equity / bond portfolio of the Company stands at 110 as on 31st March, 2016, out of which 87 are Quoted and 23 are Unquoted companies.

3. DIVIDEND :

An interim dividend of Rs. 17 per share i.e. 170% (previous year Rs. 17 per share (170%)) was declared on 11th March 2016 to those shareholders whose names stood on Register of Members on the Record Date i.e. 19th March 2016. The Directors have decided not to recommend any final dividend for the year 2015-16.

4. VALUE CREATED :

Shareholders will recall that for the first time in the Annual Report Of 31st March, 2015 the Company had shared the "Value Created" over a 15 year period. The table below analyses the performance of the Company''s portfolio rolling over the period to the 15 year prior to the closing of the current financial year 31st March, 2016. "Value Created" is a measure which evaluates the wealth created net of the capital invested by the shareholders. "Value Created" is the Realisable Value of Investments as on 31st March to which is added Net Current Assets and Fixed assets while any contribution from shareholders is reduced (i.e. equity and share premium).

The following table shows the Value Created over 15 year period and comparative returns to the Benchmark.

Year End Realisable Value Net Current Shareholder Funds 31st March of Investments Assets (Equity Share Premium)

(A) (B) (C) (Rs. crs) (Rs. crs) (Rs. crs)

2001 464.01 1.56 58.00

2016 6,657.58 38.24 800.00

Nos of times (X)

CAGR

Year End 31st March Value Created BSE 200 (A) (B)-(C) (Rs. crs)

2001 407.57 367

2016 5,895.82 3,259

14.46 8.88

19.50% 15.67%

[ Note : The Company for the first time published the realisable value of its unquoted investments in 2008. It may, however be noted that in computing the CAGR over the 15 year period, the realisable value of investments as on 31st March, 2001 includes value of unquoted investments at cost. ]

Shareholders will be pleased to note that the "Value Created" has recorded a compounded annual growth rate (CAGR) of 19.50% vis-à-vis the BSE 200 CAGR of 15.67% for the 15 year period 31st March, 2001 to 31st March, 2016. It is heartening that this performance has been achieved while the management has endeavoured to reduce risk of the portfolio with a prudent allocation to unlisted equity and fixed income securities. The Company has consistently declared dividend which over the last 15 years aggregating Rs. 942.23 crores. Thus, if the value of dividend distributed were to be added to Value Created, the multiplier and returns of the portfolio would stand enhanced to the extent the value was distributed to the shareholders.

5. MANAGEMENT DISCUSSION & ANALYSIS :

A summarised position of the Company''s portfolio of investments is given below :-

As on As on 31.03.2016 31.03.2015 (Rs. in crores) (Rs. in crores)

QUOTED INVESTMENTS (Non-Current)

Net Book value 1824.32 1666.84

Market value 5527.13 6013.88

UNQUOTED INVESTMENTS (Non-Current) - (including Mutual Funds)

Net Book value 373.03 565.01

Estimated value (please see para below 1130.45 1058.64

TOTAL BOOK VALUE

Net Book value of all investments 2197.35 2231.85

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable) 6657.58 7072.52

BANK DEPOSITS AND INTERCORPORATE DEPOSITS 20.00 10.00

TOTAL NUMBER OF COMPANIES (excluding Mutual Funds) 110 124

Net Asset Value (NAV)

Before tax (Rs.) 1215 1270

After tax (Rs.) 1045 1085

The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2015, and the remaining relatively small balance of unquoted investments taken at respective book values.

The Directors confirm that all the investments classified as non-current investments / trade investments as per Schedule III of the Companies Act, 2013 ("Act") have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade.

The Company continues to remain invested in leaders in sectors, which we believe have potential to remain value accretive over the long term. The Company continues to invest for the long term while availing opportunities to realize gains endeavouring to maintain its policy of consistent dividend distribution.

The Company''s portfolio remains concentrated in areas which could benefit from economic recovery viz., Banks and Financial Services (19%), Industrials and Infrastructure (24%) and consumer facing companies (25%). The Company invests in Tata and Non Tata companies, both listed and unlisted, though investments in Tata companies constitute a larger portion and may be considered of a longer term strategic in nature.

The Company endeavours to evaluate opportunities considering the macro economic conditions both globally & domestically.

Global and Indian Equity Markets

The year 2015 had been marked by modest GDP growth of 3.1%, decline in growth of world trade, slump in commodity prices and increased financial market volatility. The first quater of 2016 started on a weak note marked by a sharp fall in asset markets. However, the situation has improved slightly since April, 2016. Energy and commodity prices still continue to be low but have now become relatively more stable. The IMF had forecasted the world GDP in 2016 to grow at 3.2%, marginally better than in 2015.

In India the unabated problem of Non-Performing Assets and the pressures of falling prices of industrial commodities like steel have caused considerable stress in the banking system. Further, these stresses have pushed the prospects of revival of private sector capex by at least another 12-24 months.

After two consecutive years of below normal monsoon, a good monsoon would be crucial for India''s agriculture production growth and rural consumption story and the markets will only find itself in a position of strength with evidence of an average to better than average rainfall. India''s growth substantially depends upon export growth which depends on global growth. India''s exports of manufactured goods and services now constitute about 18 percent of GDP, up from about 11 percent a decade ago. Current projections by the IMF indicate that trading partner growth will improve only marginally this year. India''s exports declined by about 16% (y-o-y) in FY 2015-16 to $261 bn due to global demand slowdown and fall in crude oil prices whereas imports in the same period aggregated $380 bn, declining 15.2% (y-o-y), trade deficit was lower at $118 bn in FY 2015-16 compared to $138 bn in FY 2014-15. Lower trade deficit kept the current account deficit at manageable level of 1.4% (of GDP). External headwinds apart, India''s growth was also affected by tepid domestic demand leading to lower capacity utilisation in 2015.

In the backdrop of these uncertainties we would like to share with our shareholders the positives which support the India investment case which have motivated the portfolio of the Company to increase its allocations to economy facing sectors. The government has introduced certain programs which if successfully implemented may become game changers for India''s future. It would be amiss if we failed to enumerate these programs while considering India''s investment case.

Macro- Economic Resilience

The Economic Survey 2015-16 re-affirms that India stands out as a haven of stability and an outpost of opportunity. It observes that India continues to consolidate the gains achieved in restoring macro-economic stability.

In the budget for 2016-17, the finance minister while making significant increases in allocations to the rural job guarantee scheme, irrigation and rural roads to boost rural demand; national highway and railways sectors to boost infrastructure investment and even after providing for the 7th Pay Commissions recommendations, has contained the projected fiscal deficit at 3.5%, using what economists consider reasonable assumptions of growth in revenue receipts.

In the IMF WEO January 2016 update of the Rational Investor Ratings Index (RIRI) which combines two elements, growth and macro-economic stability, India continues to record improvement and has consistently remained above its peers. The RIRI higher levels indicate better performance.

Higher FDI Inflows - Growing Forex Reserve Balance

Foreign exchange reserves have risen to US$351.5 billion in early February 2016 substantially aided by net FDI inflows which have grown from US$ 21.9 billion in April-December 2014-15 to US$ 27.7 billion in the same period of 2015-16. While the current account deficit has declined and is at comfortable levels, the total external debt has been growing at alarming rates. Non-Government debt, the main cause of the rise in external debt, aggregated US$ 389.5 billion as on 31st December, 2015 having ballooned 100% over the last six years. The Reserves to External Debt Ratio has been improving and has reached a comfortable 73%.

Increase %

Components 31.03.2010 31.12.2015 31.03.10 to (US$ million) (US$ million) 31.12.15

Government Debt 67,067 90,676 35.20

Non Government Debt 1,93,868 3,89,504 100.91

Total External Debt 2,60,935 4,80,180 84.02

Source: Ministry of Finance, External Debt Unit

International Comparison of Developing Debtor Countries

Sl. Country External Foreign Total No. Debt to Gross Exchange External National Reserves to Debt Income Total Debt (US$ million) (%) (%)

1 China 9.3 402.2 959.51

2 Thailand 38.2 111.4 135.79

3 India 22.7 65.5* 463.23

4 Brazil 24.1 64.8 556.87

5 Malaysia 66.8 54.3 210.82

6 Indonesia 34.1 37.1 293.39

7 South Africa 42.3 30.7 144.01

8 Turkey 51.6 26.2 408.20

Source: World Bank, International Debt Statistics, 2016. * As 31.12.15 the forex reserves to external debt is 73%

Government Programs which have achieved momentum in execution

I) JAM Trinity

Jan Dhan, Aadhaar and Mobile - popularly known as the JAM trinity - a platform for real-time Direct Benefit Transfers. A billion mobile connections, nearly a billion citizens have been allocated an Aadhaar card, growing smartphone penetration and internet access having already crossed 300 million, a total of 196 million bank accounts opened upto December 2015 together facilitate income transfers, making subsidy distribution both predictable and targeted. The PAHAL scheme of transferring LPG subsidies, witnessed the world''s largest direct benefit transfer program, with about 151 million beneficiaries receiving a total of Rs. 29,000 crores in their bank accounts and is estimated to have reduced leakages by 24 %.

In Andhra Pradesh, salaries under MGNREGA were paid directly to workers, with biometric Smartcards to reduce the scope of siphoning of funds via registering ghost workers. The program was a tremendous success, reducing payment delays by 19%, increasing MGNREGA wages by 24% and reducing leakages by 35%. The return on investing in Smartcards infrastructure was thus seven times the cost of implementation. 90 per cent of beneficiaries preferred the Biometric system.

II) UDAY-Ujwal discom Assurance Yojana

The Distribution Utilities of the country are reeling under heavy debt burden. As on 30th September, 2015, the outstanding debt of the DISCOMs stood at Rs. 4.3 lakh crore. In order to bring relief to these Utilities from the burden of debt, and to improve their overall performance, Government of India launched the Scheme UDAY on 20th November, 2015. UDAY is an aim to ensure a permanent solution to the debt-ridden distribution utilities to achieve financial stability and to improve their operational efficiencies, for sustained growth.

Encouragingly, Bihar was the sixth State to have accepted UDAY, bringing about a positive change in the Power Sector scenario of the States. Rajasthan, Uttar Pradesh, Chhattisgarh and Jharkhand have signed the MoU under UDAY for operational and financial turnaround of their DISCOMs. With the signing of MoU with Bihar, approximately 33% of the DISCOM debt, i.e. around Rs. 1.40 lakh crore would be restructured.

In summary it may be concluded that the period ahead may not be as exciting as the secular bull market of 2003 to 2008 but it may be quite safe to predict that going forward the Sensex may reward investors with a return higher than the CAGR of the last three years which was a little more than 10%, if the rain Gods smile on us.

6. FIXED DEPOSITS :

The Company has not accepted any public deposits under the provisions of the Act.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :

The provisions of section 186 of the Act pertaining to investment and lending activities is not applicable to the Company since the company is an NBFC whose principal business is acquisitions of securities. During the year, the Company has not provided any guarantee.

8. CONSOLIDATED FINANCIAL STATEMENTS :

The Consolidated Financial Statements of the Company prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report.

The annual accounts of the subsidiary company and related detailed information are available on the website of the Company and are kept at the Registered Office of the Company and its subsidiary company and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of Simto Investment Company Ltd. (Subsidiary), and the following Associate Companies namely Amalgamated Plantations Private Ltd, Tata Asset Management Ltd. and Tata Trustee Company Ltd.

The Company has adopted a Policy for determining material Subsidiaries in terms of Regulation 16 (1) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The Policy, as approved by the Board, is uploaded on the Company''s website.

Subsidiary Company

The Company has a subsidiary Simto Investment Company Ltd. ("Simto") which is registered as a Non-Banking Financial Company with the Reserve Bank of India. In terms of Regulation 16 (1) (c) of the Listing Regulations, Simto is not a material unlisted subsidiary. Simto is engaged in investment activities which allocates capital in the markets to participate in activities other than making investments for the long term which has been the primary activity of the Company for many decades.

Simto has an Issued Capital of Rs. 1.53 crores with a net worth of Rs. 21.95 crores as on 31st March, 2016. The market value of investments held by Simto is valued at Rs. 37.45 crores as on 31st March, 2016.

Associate Companies

1. Amalgamated Plantations Private Ltd.

The Company holds 24.61% of the equity share capital of Amalgamated Plantations Private Ltd ("APPL") which is engaged in the business of cultivation and manufacturing of tea and other allied agricultural products and packaging services. The turnover of APPL during the year was Rs. 569.86 crores and registered a loss of Rs. 23.42 crores during the financial year 2015-16.

2. Tata Asset Management Ltd.

The Company holds 32.09% of the equity share capital of Tata Asset Management Ltd. whose principal activity is to act as an investment manager to Tata Mutual fund and the company is registered with Securities and Exchange Board of India ("SEBI") under the SEBI (Mutual Fund) Regulations 1996. The consolidated turnover of the company during the year was Rs. 148.47 crores and profit after tax for the year was Rs. 6.33 crores. The company has a net worth of Rs. 173.28 crores as on 31st March, 2016.

3. Tata Trustee Company Ltd.

The Company holds 50% of the equity share capital of Tata Trustee Company Ltd which is acting as the Trustees to Tata Mutual Fund. During the year, the turnover of the company was Rs. 7.95 crores and profit after tax for the year was Rs. 4.35 crores. The company has a networth of Rs. 9.44 crores as on 31st March, 2016.

A statement containing the salient features of the financial statements of the subsidiary company and associate companies is annexed to the Financial Statements in Form AOC-1 "Annexure A".

9. BOARD AND COMMITTEE MEETINGS :

During the year six Board Meetings and four Audit Committee Meetings were held. The details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The Board has constituted an Audit Committee under the Chairmanship of Mr. H. N. Sinor, with the other members of the Committee being Mr. A.B.K. Dubash, Mr. P P. Shah and Mr. F. N. Subedar. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

10. 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 including audit of internal financial controls over financial reporting by the statutory 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 2015-16.

Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, 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 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 the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

11. RISK MANAGEMENT :

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 17 (9) of the Listing Regulations. It establishes various levels of risks with its varying levels of probability, the likely impact on the business and its mitigation measures.

The Internal Auditor evaluates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Asset Liability and Risk Management Committee oversees the Risk Management and reports to the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status from time to time.

12. INTERNAL CONTROL SYSTEMS :

The Company maintains appropriate systems of internal controls, including monitoring procedures, to ensure that all assets and investments are safeguarded against loss from unauthorised use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorised, recorded and reported correctly.

The Internal Auditors review the efficiency and effectiveness of these systems and procedures. Added objectives include evaluating the reliability of financial and operational information and ensuring compliances with applicable laws and regulations. The Internal Auditors submit their Report periodically which is placed before and reviewed by the Audit Committee.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY :

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

14. RELATED PARTY TRANSACTIONS :

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were 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 with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quaterly basis, specifying the nature, value and terms and conditions of the transactions, if any.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: http://www.tatainvestment.com/images/RelatedParty_Policy.pdf. There are no transactions to be reported in form AOC-2.

The details of the transactions with Related Parties are provided in the accompanying financial statements.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR) :

In terms of section 135 and Schedule VII of the Act, the Board of Directors has constituted a CSR Committee under the Chairmanship of Mr. F N. Subedar. Mr. A. Chandra and Mr. A. N. Dalal are the other members of the Committee. The CSR Committee of the Board has framed a CSR Policy and uploaded it on the website of the Company http://www. tatainvestment.com/images/CSR_Policy.pdf The Company''s CSR initiatives are primarily routed through Tavescor Charitable Trust which was set up by the Company in 1997. The main objects of the Trust are Relief to the poor- including relief from distress caused by natural calamities; Advancement of education and learning i.e. promoting education, enhancing vocational skills etc. among children and differently abled persons; Grant of medical aid including promotion of preventive health care; Aid to any charitable institution; Promoting measures for protection and preservation of animals and birds; Advancement of public utilities – including maintaining the quality of soil, air and water.

The Annual Report on CSR activities is annexed herewith as "Annexure B ".

16. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE :

The Company has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the work place and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment ("POSH") Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2015-2016.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS :

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

18. DIRECTORS :

Pursuant to the provisions of the Act and the Company''s Articles of Association, Mr. K. A. Chaukar, Director, retires by rotation and, being eligible, offers himself for re-appointment.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Act and the Listing Regulations.

There has been no change in Directors/Key Managerial Personnel during the financial year.

19. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS :

Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and individual Directors, including the Chairman of the Company.

For evaluating the Board as a whole, views were sought from the Directors on various aspects of the Board''s functioning such as degree of fulfillment of key responsibilities, Board Structure and composition, establishment, delineation of responsibilities to various committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the management.

Similarly, views from the Directors were also sought on performance of individual Directors covering various aspects such as attendance and contribution at the Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and promoting effective relationships and open communication, communicating effectively with all stakeholders and motivating and providing guidance to the Executive Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition, effectiveness of meetings, Committee dynamics and quality of relationship of the Committee with the Board and the Management.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination & Remuneration Committee also reviewed the performance of the Board, its Committees and of individual Directors.

The Chairman of the Board provided feedback to the Directors, as appropriate. Significant highlights, learning with respect to the evaluation, were discussed at the Board Meeting.

20. REMUNERATION POLICY :

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

21. AUDITORS :

STATUTORY AUDITORS :

M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the statutory auditors of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

SECRETARIAL AUDITORS :

Pursuant to provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure C"

The Auditors''Report and the Secretarial Audit Report for the financial year ended 31st March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer.

22. EXTRACT OF ANNUAL RETURN :

The details forming part of the extract of the Annual Return in the form MGT-9 is annexed herewith as "Annexure D ".

23. CONSERVATION OF ENERGY, ABSORPTION,FOREIGN EXCHANGE EARNINGS AND OUTGO :

Being an investment company and not involved in any industrial or manufacturing activities, the Company''s activities involve very low energy conservation and has no particulars to report regarding conservation of energy and technology absorption. However, efforts are made to further reduce energy conservation.

During the year, the Company''s expenditure in foreign exchange is Rs. 0.41 lacs as mentioned in Note 8 to the Annual Report and the Company did not have any foreign exchange earnings during the year.

24. PARTICULARS OF EMPLOYEES AND REMUNERATION :

The information required under Section 197 (12) of the Act read with Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as "Annexure E ".

The information required under Section 197 (12) of the Act read with Rules 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

A report on Corporate Governance, in accordance with Schedule V of the Listing Regulations is set out separately for the information of the shareholders.

On behalf of the Board of Directors,

NOEL N. TATA

Chairman

Mumbai, 23rd May, 2016


Mar 31, 2015

THE MEMBERS,

The Directors present their Seventy-Eighth Annual Report with the Audited Financial Statement for the year ended 31st March, 2015.

1. FINANCIAL RESULTS :

Standalone Consolidated Previous Year Previous Year (Rs.in crores) ( in crores) (Rs.in crores) ( in crores)

Dividend, Interest & Other Income 130.15 128.91 127.84 125.84

Profit on Sale of long term Investments (net) 100.97 94.13 101.39 94.49

Total Revenue 231.12 223.04 229.23 220.33

Profit before tax 216.02 207.68 212.69 204.36

Less: Provision for tax 29.51 29.00 29.96 29.20

Profit after tax 186.51 178.68 182.73 175.16

Share of Profits of Associates - - 3.19 19.77

Minority Interest - - (0.06) (0.05)

Loss on deemed disposal of Associate - - - (8.59)

Profit for the year 186.51 178.68 185.86 186.29

Balance brought forward from the previous year. 249.38 233.89 334.02 311.21

The Directors have made the following appropriations :

Dividend on Ordinary Shares 93.66 93.66 93.66 93.66

Tax on Dividend. 19.07 15.92 19.07 15.92

Statutory Reserve 37.31 35.74 37.71 36.03

General Reserve. - 17.87 - 17.87

150.04 163.19 150.44 163.48

Surplus as per Statement of Profit and Loss. 285.85 249.38 369.17 334.02

Earnings Per Share Basic and Diluted (Rs.) 33.85 32.43 33.73 33.81

2. OPERATIONS :

The Operating Income of the Company is derived from a mix of dividend and interest income, supplemented by profit on sale of investments. The profit from sale of long term investments for the year ended 31st March, 2015 is Rs.100.97 crores as compared to Rs.94.13 crores for the previous year. The standalone profit before tax for the year under review is Rs.216.02 crores as against Rs.207.68 crores in the previous year, whereas the profit after tax for the year under review stands at Rs.186.51 crores as against Rs.178.68 crores as on 31st March, 2014. The Consolidated profit after tax for the year amounted to Rs.185.86 crores as compared to Rs.186.29 crores in the previous year.

The basic and diluted earnings per share (EPS) computed in accordance with the Accounting Standard 20 was Rs.33.85 per share as at 31st March, 2015 as against Rs.32.43 per share as on 31st March, 2014.

The total number of companies held in the equity / bond portfolio of the Company stands at 124 as on 31st March, 2015, out of which 98 are Quoted and 26 Unquoted companies.

3. DIVIDEND :

The Directors are pleased to recommend a dividend of Rs.17 per share (170%) on the paid up capital of Rs.55.10 crores [previous year : Rs.17 per share (170%)].

4. INVESTMENT PORTFOLIO :

A summarised position of the Company''s portfolio of investments is given below :-

As on As on 31.03.2015 31.03.2014 (Rs. in crores) (Rs. in crores)

QUOTED INVESTMENTS (Non-Current and Current)

Net Book value. 1666.84 1662.61

Market value. 6013.88 4414.62

UNQUOTED INVESTMENTS (Non-Current and Current) - (including Mutual Funds)

Net Book value. 565.01 479.00

Estimated value (please see para below). 1058.64 876.22

TOTAL BOOK VALUE

Net Book value of all investments. 2231.85 2141.61

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable). 7072.52 5290.84

BANK DEPOSITS AND INTERCORPORATE DEPOSITS. 10.00 10.00

TOTAL NUMBER OF COMPANIES (excluding Mutual Funds). 124 121

Net Asset Value (NAV)

Before tax (Rs.). 1270 945

After tax (Rs.). 1085 825

The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2014 and the remaining relatively small balance of unquoted investments taken at respective book values.

The Directors confirm that all the investments classified as non-current investments / trade investments as per the Schedule III of the Companies Act, 2013 have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade. Investments in the category of ''Current Investments'' intended to be held for less than one year, which for accounting and other purposes, are so classified at the time of making the investment, are indicated separately in the Balance Sheet.

5. FIXED DEPOSITS :

The Company has not accepted any public deposits during the financial year 2014-2015.

6. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :

The provisions of Section 186 of the Act pertaining to investment and lending activities is not applicable to the Company since the Company is an NBFC whose principal business is acquisition of securities. During the year the Company has not provided any guarantee.

7. CONSOLIDATED FINANCIAL STATEMENTS :

The Consolidated Financial Statements of the Company prepared in accordance with Accounting Standard 21 issued by The Institute of Chartered Accountants of India, form part of the Annual Report.

The annual accounts of the subsidiary company and related detailed information are kept at the Registered Office of the Company and its subsidiary company and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of Simto Investment Company (Subsidiary) and the following Associates namely Amalgamated Plantations Private Ltd., Tata Asset Management Ltd. and Tata Trustee Company Ltd.

The Company has adopted a Policy for determining material Subsidiaries in terms of Clause 49 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the Company''s website.

Subsidiary Company

The Company has a subsidiary Simto Investment Company Ltd. (Simto) which is registered as a Non-Banking Financial Company with the Reserve Bank of India. In terms of Clause 49 of the Listing Agreement, Simto is not a material unlisted subsidiary. Simto is engaged in investment activities which allocates capital in the markets to participate in activities other than making investments for long term which has been the primary activity of the Company for many decades.

Simto has an Issued Capital of Rs.1.53 crores with a net worth of Rs.21.23 crores as on 31st March, 2015. The market value of investments held by Simto is valued at Rs.37.69 crores as on 31st March, 2015. A statement containing the salient features of the financial statements of the subsidiary company is annexed to the Financial Statements in Form AOC-1 [Annexure A].

Associate Companies

1. Amalgamated Plantations Private Ltd.

The Company holds 24.61% of the equity share capital of Amalgamated Plantations Private Ltd. (APPL) which is engaged in the business of cultivation and manufacturing of tea and other allied agricultural products and packaging services. The Turnover of the company during the year was Rs.565.79 crores and registered a loss of Rs.13.76 crores during the financial year.

2. Tata Asset Management Ltd.

The Company holds 32.09% of the equity share capital of Tata Asset Management Ltd. The company''s principal activity is to act as an investment manager to Tata Mutual Fund and the company is registered with Securities & Exchange Board of India under (Mutual Fund) Regulations 1996. The Consolidated Turnover of the company during the year was Rs.164.91 crores and Profit after tax was Rs.20.83 crores. The Company has a net worth of Rs.168.12 crores as on 31st March, 2015.

3. Tata Trustee Company Ltd.

The Company holds 50% of the equity share capital of Tata Trustee Company Ltd which is acting as the Trustees to Tata Mutual Fund. During the year, the Turnover of the company was Rs.5.25 crores and Profit after tax was Rs.2.94 crores. The Company has a networth of Rs.14.35 crores as on 31st March, 2015.

10. 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(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, 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 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 the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

11. RISK MANAGEMENT :

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of risks with its varying levels of probability, the likely impact on the business and its mitigation measures.

The Internal Audit facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Asset Liability and Risk Management Committee oversees the Risk Management and reports to the Audit Committee as well as to the Board of Directors about risk assessment and management procedures and its status from time to time.

12. INTERNAL CONTROL SYSTEMS :

The Company maintains appropriate systems of internal controls, including monitoring procedures, to ensure that all assets and investments are safeguarded against loss from unauthorised use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorised, recorded and reported correctly.

The Internal Auditor reviews the efficiency and effectiveness of these systems and procedures. Added objectives include evaluating the reliability of financial and operational information and ensuring compliances with applicable laws and regulations. The Internal Auditor submits his Report periodically which is placed before and reviewed by the Audit Committee.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY :

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

14. RELATED PARTY TRANSACTIONS :

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. There were no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: http://www.tatainvestment.com/images/RelatedParty_Policy.pdf. There are no transactions to be reported in Form AOC-2.

The details of the transactions with Related Parties are provided in the accompanying financial statements.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR) :

In terms of Section 135 and ScheduleVII of the Companies Act, 2013, the Board of Directors has constituted a CSR Committee under the Chairmanship of Mr. F.N. Subedar (Chairman), Mr. A.N. Dalal and Mr. A.Chandra are the other members of the Committee. The CSR Committee of the Board has framed a CSR Policy and uploaded it on the website of the Company http://www.tatainvestment.com/images/CSR_Policy.pdf. The Company''s CSR initiatives are primarily routed through Tavescor Charitable Trust which was set up by the Company in 1997. The main objects of the Trust are Relief to the poor-including relief from distress caused by natural calamities; Advancement of education and learning i.e. promoting education, enhancing vocational skills etc. among children and differently abled persons; Grant of medical aid including promotion of preventive health care; Aid to any charitable institution; Promoting measures for protection and preservation of animals and birds; Advancement of public utilities - including maintaining the quality of soil, air and water.

The Annual Report on CSR activities is annexed herewith in Annexure B.

16. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE :

The Company has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the work place and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2014-2015.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS :

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

18. DIRECTORS :

Pursuant to the provisions of the Companies Act, 2013 and the Company''s Articles of Association, Mr. F. N. Subedar, Director, retires by rotation and, being eligible, offers himself for re-appointment.

The Company has appointed Ms. V. Bhandarkar as an Additional Director as also an Independent Director, not being liable to retire by rotation, for a term of 3 consecutive years from 24th March, 2015, subject to the approval of the Members.

Pursuant to Section 161 and other applicable provisions of the Act, read with Articles of Association of the Company, as an Additional Director, Ms. Bhandarkar holds office till the ensuing Annual General Meeting and, being eligible, offers herself for reappointment as a Director. In terms of Section 149, read with Schedule IV of the Act, appointment of Ms. Bhandarkar as an Independent Director is being placed before the Members of the Company for approval.

The Board of Directors has re-appointed Mr. A N. Dalal as Executive Director of the Company for a period of five years w.e.f 1st January, 2015 subject to approval by the shareholders at the forthcoming Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Act, 2013 and Clause 49 of the Listing Agreement.

No Director/Key Managerial Personnel have retired or resigned during the year.

19. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS :

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and individual Directors, including the Chairman of the Company.

For evaluating the Board as a whole, views were sought from the Directors on various aspects of the Board''s functioning such as degree of fulfillment of key responsibilities, Board structure and composition, establishment, delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders.

Similarly, views from the Directors were also sought on performance of individual Directors covering various aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and promoting effective relationships and open communication, communicating effectively with all stakeholders and motivating and providing guidance to the Executive Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition, effectiveness of meetings, Committee dynamics and quality of relationship of the Committee with the Board and the Management.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole.

The Chairman of the Board provided feedback to the Directors, as appropriate. Significant highlights, learning with respect to the evaluation, were discussed at the Board Meeting.

20. REMUNERATION POLICY :

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

21. AUDITORS :

STATUTORY AUDITORS :

M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the statutory auditors of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

SECRETARIAL AUDITORS :

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure C.

The Auditors'' Report and the Secretarial Audit Report for the financial year ended 31st March, 2015 do not contain any qualification, reservation, adverse remark or disclaimer.

22. EXTRACT OF ANNUAL RETURN :

The details forming part of the extract of the Annual Return in the Form MGT-9 is annexed herewith as Annexure D.

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

Being an investment company and not involved in any industrial or manufacturing activities, the Company''s activities involve very low energy consumption and has no particulars to report regarding conservation of energy and technology absorption. However, efforts are made to further reduce energy consumption.

During the year, the Company''s expenditure in foreign exchange is ''0.26 lac as mentioned in Note 8 to the Annual Report and the Company did not have any foreign exchange earnings during the year.

24. PARTICULARS OF EMPLOYEES AND REMUNERATION :

The information required under Section 197 (12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure E.

The statement containing information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. The said statement is open for inspection at the Registered Office of the Company. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, is set out separately for the information of the shareholders.

On behalf of the Board of Directors, NOEL N. TATA Mumbai, 25th May, 2015. Chairman


Mar 31, 2013

TO THE MEMBERS,

The Directors present their Seventy-Sixth Annual Report with the Audited Statement of Accounts for the year ended 31st March, 2013.

1. FINANCIAL RESULTS:

Standalone Consolidated

Previous Year Rupees Rupees Rupees (in crores) (in crores) (in crores)

Dividend, Interest & Other Income 141.15 128.80 135.69

Profit on Sale of long term Investments (net) 65.02 73.09 65.27

Total Revenue 206.17 201.89 200.96

Profit before tax 191.52 185.67 185.86

Less: Provision for tax 24.38 24.09 24.57

Profit after tax 167.14 161.58 161.29

Share of Profits of Associates - - 12.58

Minority Interest - - (0.02)

Profit for the year 167.14 161.58 173.85

Balance brought forward from the previous year 220.03 242.81 290.82

The Directors have made the following appropriations -

Dividend on Ordinary Shares 88.15 115.70 88.15

Tax on Dividend 14.98 18.77 14.98

Statutory Reserve 33.43 32.94 33.76

General Reserve 16.71 16.95 16.71

153.27 184.36 153.60

Surplus as per Statement of Profit and Loss 233.90 220.03 311.07

Earnings per share

Basic (Rs.) 30.34 29.71 31.56

Diluted (Rs.) 30.34 29.62 31.56

2. OPERATIONS :

The income of the Company constitutes a mix of dividend and interest income, supplemented by profit on sale of investments. The income from dividend and interest grew 9.59% from Rs. 128.80 crores in the previous year to Rs. 141.15 crores for the year ended March, 2013. The profit from ordinary activities before tax, excluding profit on sale of investments, has increased to Rs.126.50 crores for the year ended 31st March, 2013 (Rs. 112.58 crores - year ended 31st March, 2012). After considering the profit from sale of long term investments and the impact of tax thereof, the profit before tax for the year under review is Rs. 191.52 crores as against Rs.185.67 crores in the previous year, whereas the profit after tax for the year under review stands at Rs. 167.14 crores as against Rs. 161.58 crores as on 31st March 2012.

The basic and diluted earnings per share (EPS) were Rs. 30.34 per share as at 31st March, 2013 as against Rs. 29.71 and Rs. 29.62 per share as at 31st March, 2012, respectively. The consolidated earnings per share as on 31st March, 2013 was Rs. 31.56 per share.

The total number of companies held in the equity portfolio of the Company stands reduced from 171 as on 31st March, 2012 to 158 as on 31st March, 2013, of which 130 were listed companies and 28 unlisted companies. One unlisted company viz. Credit Analysis & Research Ltd. (CARE) was listed during the year.

In keeping with the spirit of contributing to Corporate Social Responsibility activities, the Company has made donations aggregating Rs. 1.01 crores during the year.

3. DIVIDEND :

The Directors are pleased to recommend a dividend of Rs. 16 per share (160%) on the paid up capital of Rs. 55.10 crores {previous year : Rs. 21 per share (210%) [including Rs. 5 per share (50%) as Platinum Jubilee Dividend]}

4. INVESTMENT PORTFOLIO :

A summarised position of the Company''s portfolio of investments is given below :-

As on As on 31.03.2013 31.03.2012 (Rs. in crores) (Rs. in crores)

QUOTED INVESTMENTS (Non-Current and Current) -

Net Book value 1483.56 1441.08

Market value 3791.59 3720.75

UNQUOTED INVESTMENTS

(Non-Current and Current) - (including Mutual Funds)

Net Book value 458.05 366.53

Estimated value (please see para below) 985.74 751.02

TOTAL BOOK VALUE

Net Book value of all investments 1941.61 1807.61

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable) 4777.33 4471.77

BANK DEPOSITS AND INTERCORPORATE DEPOSITS 122.95 229.26

TOTAL NUMBER OF COMPANIES (excluding mutual funds) 158 171

Net Asset Value (NAV)

Before tax (Rs.) 875 830

After tax (Rs.) 770 735

The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2012, and the remaining relatively small balance of unquoted investments taken at respective book values.

The Directors confirm that all the investments classified as non-current investments / trade investments as per the revised Schedule VI of the Companies Act, 1956 have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade. Investments in the category of ''Current Investments'' intended to be held for less than one year, which for accounting and other purposes, are so classified at the time of making the investment, are indicated separately in the Balance Sheet.

The Company continues to invest in Tata and non-Tata companies, both in the listed and unlisted categories, though investments in Tata companies generally constitute a larger proportion and are of a longer term and strategic nature.

5. SUBSIDIARY COMPANY :

In August 2012, our Company acquired 95.57% of Simto Investment Company Ltd. (Simto). The Directors are pleased to inform that the acquisition has been smoothly completed at a valuation determined by an independent valuer. Simto was incorporated in the year 1983 and is a registered Non-Banking Financial Company with the Reserve Bank of India, engaged in investment activities.

Simto has an Issued Capital of Rs. 1.53 crores with a net worth of Rs. 17.75 crores as on 31st March, 2013. The market value of investments held by Simto is valued at Rs. 30.25 crores as on 31st March, 2013.

The Board of Simto going forward, proposes to allocate capital in the markets to participate in activities other than making investments for the long term which has been the primary activity of Tata Investment Corporation for many decades.

6. CONSOLIDATED FINANCIAL STATEMENTS :

The Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards are attached herewith.

The Ministry of Corporate Affairs, the Government of India has vide Circular No. 2/2011 dated 8th February, 2011 granted general exemption subject to fulfilment of certain conditions from attaching the Balance Sheet of the subsidiaries to the Balance Sheet of the Company without making an application for exemption. Accordingly, the Balance Sheet, the Statement of Profit and Loss Account and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The financial information of the subsidiary company is disclosed in the Annual Report on page 62. The Annual Accounts of the subsidiary company and related detailed information will be made available to any member of the Company / its subsidiary company at the Registered Office of the Company. The Annual Accounts of the subsidiary company will also be available for inspection, as above, at the Registered Office of the Company.

7. MANAGEMENT DISCUSSION & ANALYSIS :

The year 2012-13 may perhaps be the year in which the downturn in the Indian economy was arrested and a semblance of resurgence brought back. Considerable credit goes to the Finance Minister for saving the nation from a possible downgrade by the global rating agencies, which had become a real threat by middle of the previous year.

The improved sentiment and confidence translated to substantial fund flows being diverted to the Indian equity markets in the second half of 2012. FII flows to the Indian market aggregated a staggering US$ 30.8 billion for the full financial year ended March, 2013. The Sensex and the BSE 200 index recorded an appreciation of 8.2 percent and 6 percent respectively for the fiscal year. This compares better to the trend in the previous year with the Sensex recording a negative return of 10.5 percent.

The Government and the Reserve Bank of India remain concerned, and rightly so, about India''s current account deficit (CAD) which was a staggering 5.1 percent of GDP for the F.Y. 2012-13. The merchandise trade deficit increased by 6.3 percent to US$195 billion in 2013 and is estimated to increase further to US$ 213 billion in the year 2013-14. The Economic Advisory Council has estimated CAD after considering remittances, service exports and invisible earnings to be higher at US$ 100 billion in 2013-14 compared to an estimated US$ 94 billion in 2012-13.

India has benefited from its substantial export of services, mainly in the field of information technology, which perhaps has now matured and is facing an era of lower growth. In India 5.7 lakh engineers graduate every year and aspire for fruitful employment. India urgently needs to invest in competitive export oriented industry to keep its youth employed, arrest currency weakness, lower imported inflation and finally lower cost of capital. The government recognizing the aforesaid has recently cleared a draft of a policy, to increase the share of manufacturing in the country''s GDP from 16 percent to 25 percent in the year 2025 - unfortunately measures to support industry with adequate infrastructure or simpler and more efficient tax implementation have yet to be undertaken.

Land issues and delays in environmental and other numerous clearances continue to discourage capital investment resulting in an environment of lower growth. The IIP growth numbers indicate considerable resistance to capital commitment by the manufacturing or industrial sector which arises from structural causes and perhaps may not reverse in the short term even if supported by a more favourable capital cost environment.

Increase in corporate debt and deterioration in the debt / equity ratios of India''s corporate sector will continue to weigh upon the prospects of incremental capital outlays and are sources of great concern. The increase in the value of restructured loans is both a reflection of the slowdown in the economy as well as aggressive but unprofitable capital outlays on the part of the private corporate sector.

The burden on the government of the petroleum subsidy is estimated to be Rs. 96,880 crore in the year 2012-13. Phased decontrol of diesel price and capping of subsidised LPG cylinders, a landmark reform measure of this government, has given the comfort to the government to budget a 33% reduction to Rs. 65,000 crore for 2013-14 -which may be further reduced if lower oil prices become a long term paradigm.

The fall in overall inflation up to March 2013 supported by the fall in global oil prices advocates further liberalization in liquidity and lower interest rates, a path already undertaken by the Central Bank.

Shareholders will recall that our Company had, as early as during the year 2011-12, allocated a sizeable amount for investment in fixed income securities with a view that both inflation and interest rates will come down in the coming years. The value of these securities have appreciated, while earning a handsome yield, and further appreciation is possible given the fall in inflation and expected easing of rates from the Central Bank.

The last two years have been a trying period for equity markets with the country clouded by news of scams, currency depreciation, high inflation and a steep fall in growth. A lower rate of inflation and interest rates pronounce a better macro environment going forward. Analysts estimate that the earnings growth of Sensex companies may rebound to double digits for the year ending March 2014. Reflecting this sentiment the Sensex has shown a robust trend with the Sensex reaching 20,000 in early May 2013.

Our Company in keeping with its policy to augment the potential for appreciation, continues to invest for the long term while availing opportunities to realize gains in periods of exuberance in the markets. While it is difficult to predict the trend for the remaining part of the current financial year, the Company with its diversified portfolio of investments will endeavour to effectively steer its portfolio in context of the aforesaid mixed bag of economic fundamentals.

8. DIRECTORS'' RESPONSIBILITY STATEMENT :

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that, to the best of their knowledge -

(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 the period;

(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 Act, 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. INTERNAL CONTROL SYSTEMS :

The Company''s auditors have confirmed that the Company has proper and adequate internal control systems commensurate with its size and nature of operations to provide reasonable assurance that all assets are safeguarded, transactions are authorised, recorded and reported properly and that all applicable statutes and corporate policies are duly complied with.

The Company has appointed an independent firm of Chartered Accountants, as Internal Auditors, which continuously reviews the adequacy and efficacy of the internal controls. The Internal Auditors submit an Internal Audit Report periodically which is placed before and reviewed by the Audit Committee.

10. DIRECTORS :

Pursuant to the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Mr. F. N. Subedar, Mr. K.A. Chaukar and Mr. Amit Chandra retire by rotation and are eligible for re-appointment. The Board commends their re-appointment as Directors of the Company.

Mr. M.J. Kotwal, who reached the stipulated retirement age adopted by the Board, retired as the Executive Director and Secretary of the Company with effect from 28th May, 2012. The Board has placed on record its appreciation of the long and meritorious service rendered by Mr. Kotwal both as an Executive and as a Director of the Company.

11. AUDITORS :

M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the statutory auditors of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

12. GENERAL:

Being an investment company, the provisions regarding conservation of energy and technology absorption are not applicable to the Company.

During the year, the Company''s expenditure and earnings in foreign exchange were Rs. 0.01 crores and Rs. 0.03 crores respectively, as mentioned in Notes 8 & 9 to the Accounts.

A statement giving particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid statement. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, is set out separately for the information of the shareholders.

On behalf of the Board of Directors,

NOEL N. TATA

Mumbai, 21st May, 2013 Chairman


Mar 31, 2012

The Directors present their Seventy-Fifth Annual Report with the Audited Statement of Accounts for the year ended 31st March, 2012.

2. FINANCIAL RESULTS : Previous Year Rupees Rupees (in crores) (in crores)

Dividend, Interest & Other Income 129.88 100.20

Profit on Sale of Investments 72.47 147.90

Total Revenue 202.35 248.10

Profit before tax 5.68 234.47

Less: Provision for tax 24.09 35.88

Profit after tax 161.59 198.59

Balance brought forward from the previous year 242.81 194.22

The Directors have made the following appropriations -

Dividend on Ordinary Shares:

a. Final 88.15 -

b. Platinum Jubilee 27.55 -

c. Interim - 77.18

Tax on Dividend 18.77 12.82

Statutory Reserve 32.94 40.00

General Reserve 16.95 20.00

184.36 150.00

Surplus as per Statement of Profit and Loss 20.04 242.81

The profit from ordinary activities before tax, excluding profit on sale of investments, has increased to Rs.113.21 crores for the year ended 31st March, 2012 (Rs.86.57 crores - year ended 31st March, 2011). During the financial year, the Company has benefited from the increased yields on fixed income securities and the timely re-allocation of funds in fixed income investments.

The profits of the Company are derived from a mix of dividend and interest income, supplemented by profit on sale of investments. The profit from sale of investments for the year ended 31st March, 2012 is Rs.72.47 crores as compared to Rs.147.90 crores for the previous year. As mentioned earlier, the Board of Directors, after due deliberations, had resolved to reduce the dependence on sums generated from realisation from sale of investments, providing an opportunity to further increase the period of holding and thereby benefit from a possible higher valuation.

The profit before tax for the year under review is Rs.185.68 crores against Rs.234.47 crores in the previous year. The profit after tax for the year under review stands at Rs.161.59 crores as against Rs.198.59 crores as on 31st March, 2011.

The total number of companies held in the equity portfolio of the Company stands reduced from 205 as on 31st March, 2011 to 171 as on 31st March, 2012. Besides reducing the number of scrips in which the Company is invested, the Company wrote off the historical holdings in 26 companies in Sri Lanka & Pakistan, which the Company had been carrying for over fifty years but which had either closed operations or could not be traced or realised and the cost of which had been written down to a veil nominal amount.

During the year, the Ordinary share capital of the Company increased from Rs.48.24 crores as on 31.3.2011 to Rs.55.10 crores, upon exercise of warrants on 9th May, 2011, resulting in an issue of 68,58,222 Ordinary shares. The warrant holders subscribed at Rs.400 per share (i.e. at a premium of Rs.390 per share) resulting in a net increase in the Securities Premium Account by Rs.267.20 crores.

Considering the increased share capital as above, the basic and diluted earnings per share (EPS) computed in accordance with the Accounting Standard 20 were Rs.29.71 and Rs.29.62 per share as at 31st March, 2012 against Rs.41.17 and Rs.39.65 per share as at 31st March, 2011, respectively .

In keeping with the spirit of contributing to CSR activities, the Company has decided to increase the donations for the year to Rs.3.05 crores as compared to Rs.1.20 crores in the previous year.

3. DIVIDEND :

The Directors are pleased to recommend a dividend of Rs.21 per share (210%) [including Rs.5 per share (50%) as Platinum Jubilee Dividend] on the paid up capital of Rs.55.10 crores (previous year : interim dividend of Rs.16 per share on the then paid up capital of Rs.48.24 crores).

4. INVESTMENT PORTFOLIO :

A summarised position of the Company's portfolio of investments is given below :-

As on 31.03.2012 31.03.2011 (Rs. in crores) (Rs. in Crores)

QUOTED INVESTMENTS (Non-Current and Current) -

Net Book value 1441.08 931.06

Market value 3720.75 3304.29

UNQUOTED INVESTMENTS

(Non-Current and Current) - (including Mutual Funds)

Net Book value 366.53 359.82

Estimated value (please see para below) 751.02 754.24

TOTAL BOOK VALUE

Net Book value of all investments 1807.61 1290.88

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable) 4471.77 4058.53

BANK DEPOSITS AND INTERCORPORATE DEPOSITS 229.26 341.92

TOTAL NUMBER OF COMPANIES (excluding mutual funds) 171 205

Net Asset Value (NAV)

Before tax (Rs.) 830 910

After tax (Rs.) 735 795

The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2011, and the relatively small balance of unquoted investments taken at respective book values.

The Directors confirm that all the investments classified as non-current investments/trade investments as per the revised Schedule VI of the Companies Act, 1956 have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade. Investments in the category of 'Current Investments' intended to be held for less than one year, which for accounting and other purposes are so classified at the time of making the investment, are indicated separately in the Balance Sheet.

The Company continues to invest in Tata and non-Tata companies, both in the listed and unlisted categories, though investments in Tata companies generally constitute a larger proportion and are of a longer term and strategic nature.

The financial statements have been prepared in accordance with the revised Schedule VI to the Companies Act, 1956 and the results have been published in the new format, consequently, previous year's figures have been regrouped, wherever necessary.

5. MANAGEMENT DISCUSSION & ANALYSIS:

The Indian Shareholder has been a witness to the challenging socio-political environment in the year 2011-12. The downtrend in the equity markets over the year reflected the considerable uncertainty, with the Sensex recording a negative return of 10.5% and closing the year at 17,404 as on 30.3.2012, whilst touching a low of 15,175 on 20.12.20 11.

Both the Finance Ministry and the Reserve Bank of India (RBI) had estimated GDP growth to be upwards of 8% for the F.Y. 2011-12. RBI policy of reducing liquidity in the system was supported by the hypothesis that growth in itself is a push to inflation. The RBI Governor at a CII Convention stated that "short term sacrifice to growth is an inevitable cost to pay for price stability in a supply constrained economy'" At the end of the financial year, inflation still remains high but growth has fallen to 6.5%.

Crude oil prices have risen by almost 20% during the calendar year 2011 posing additional risk to the widening India's current account deficit. The trade deficit is estimated to increase from USD 119 billion for the year ended March 2011 to USD 185 billion for the year ended March 2012. This has added stress to our forex reserves and the exchange rate of the rupee vis-a-vis other currencies. The country's dependency on capital inflows is best indicated by the need to balance the monthly current account deficit of approximately USD 5.8 billion with commensurate capital inflows. A depreciating rupee is a cause for concern to asset managers and may make India an unattractive destination for global inflows over the medium term. FIIs inflows are, in any case, fluid and can be easily reallocated elsewhere by global fund managers. The case for reallocation to other destinations stands enhanced with the legal uncertainties which have arisen from the proposed retrospective changes in tax laws in the current year's Budget.

At the end of the previous fiscal year, fixed deposit rates of banks had risen to 10%. Most investors felt that this was a short term phenomena and the stress on bank funds would ease during the year. The rates advertised by State Bank of India in March 2012 for one year and upto ten years fixed deposits do not indicate a reversal possibility to lower rates in the near future.

At this juncture, it would only be correct to point out that revenue and earnings growth has now become extremely sector and company specific. Investors would have to carefully sieve through the maze of equity options whilst investing, since large number of companies are recording substantial de-growth and experiencing considerable financial stress. Credit quality of the Indian Corporates has worsened, with the annual default rate of companies, as recorded by CRISIL, having risen to 3.4% - the highest in the last 10 years. Burgeoning interest and input rates and slowing growth pose cash flow problems to certain segments of the corporate sector. The Debt Restructuring Cell is now looking over Rs.75,000 crores of corporate debt proposals to be restructured in Fiscal 2012 - more than 3 times the Rs.25,000 crores, value in fiscal 2011.

The light at the end of the tunnel for equity markets remains with the hope that the central bank's actions in 2011 will lower inflation and will allow the RBI to reduce rates in 2012. There is an urgent need for government policy execution, higher capital allocation to road building & construction and for investment in distribution infrastructure for food grains to fulfill the promise of India's growth story, both to its people and to foreign investors.

6. DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that, to the best of their knowledge -

(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 the period;

(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 Act, 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.

7. INTERNAL CONTROL SYSTEMS :

The Company's auditors have confirmed that the Company has proper and adequate internal control systems commensurate with its size and nature of operations to provide reasonable assurance that all assets are safeguarded, transactions are authorised, recorded and reported properly and that all applicable statutes and corporate policies are duly complied with.

The Company has appointed an independent firm of Chartered Accountants, as Internal Auditors, which continuously reviews the adequacy and efficacy of the internal controls. The Internal Auditors submit an Internal Audit Report periodically which is placed before and reviewed by the Audit Committee.

8. DIRECTORS :

Mr. M.J. Kotwal, who will reach the stipulated retirement age adopted by the Board, will retire as the Executive Director and consequently also as a Director of the Company with effect from 28th May, 2012, after putting in a service of almost 45 years with the Tata group of which 29 years have been with our Company. The Directors have placed on record the long and meritorious service rendered by Mr. Kotwal both as an Executive and as a Director of the Company.

Pursuant to the provisions of the Companies Act, 1956, and the Company's Articles of Association, Mr. Noel N. Tata, Mr. P.P. Shah and Mr. Z. Dubash retire by rotation and are eligible for re-appointment. The Board commends their re-appointment as Directors of the Company.

9. AUDITORS :

M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the statutory auditors of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

10. GENERAL :

Being an investment company, the provisions regarding conservation of energy and technology absorption are not applicable to the Company.

During the year, the Company's earnings and expenditure in foreign exchange were Rs.12.79 crores and Rs.0.01 crore respectively, as mentioned in Notes 8 & 9 to the Accounts.

A statement giving particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid statement. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, is set out separately for the information of the shareholders.

On behalf of the Board of Directors,

NOEL N. TATA

Mumbai, 18th May, 2012. Chairman


Mar 31, 2011

The Directors present their Seventy-fourth Annual Report with the Audited Statement of Accounts for the year ended 31st March, 2011.

2. FINANCIAL RESULTS : Previous Year Rupees Rupees (in crores) (in crores)

Total Income 247.28 232.62

Profit before tax 234.47 222.81

Less: Provision for tax 35.88 28.89

Profit after tax 198.59 193.92

Balance brought forward from the previous year 194.22 131.86

Amount available for appropriation 392.81 325.78

The Directors have made the following appropriations

Interim Dividend on Ordinary Shares 77.18 62.02

Tax on Dividend 12.82 10.54

Reserve Fund 40.00 39.00

General Reserve 20.00 20.00

150.00 131.56

leaving a balance to be carried forward of 242.81 194.22

3. OPERATIONS :

The total income of the Company during the year was Rs.247.28 crores against Rs.232.62 crores in the previous financial year. The increase in total income was mainly due to increase in dividends received on investments, interest income and other miscellaneous income. The total expenditure during the year increased mainly due to increase in staff costs and other miscellaneous expenses during the year.

The profit before tax for the year under review was higher at Rs.234.47 crores against Rs.222.81 crores in the previous year. The profit after tax for the year under review was marginally higher at Rs.198.59 crores compared to Rs.193.92 crores in the previous year. There was a higher provision for taxation of about Rs.35.88 crores as compared to Rs.28.89 crores in the previous year, commensurate with the increase in the rate of Minimum Alternate Tax from 17% to 20% approximately, applicable primarily to profit on sale of long term investments.

The basic and diluted earnings per share (EPS) computed in accordance with the Accounting Standard 20 issued by the Institute of Chartered Accountants of India was Rs.41.17 per share and Rs.39.65 per share respectively as against Rs.49.64 and Rs.39.35 per share respectively, for the previous year.

4. DIVIDEND :

An interim dividend of Rs.16.00 per share (previous year: Rs.15.00 per share) was paid towards the end of the financial year in February, 2011 on the Companys paid-up Ordinary Share Capital of Rs.48.24 crores to those shareholders whose names stood on the Register of Members on the record date i.e. 8th February, 2011. Accordingly, the Directors have decided not to recommend any final dividend for the year 2010-2011.

5. INVESTMENT PORTFOLIO :

A summarised position of the Companys portfolio of investments is given below :-

As on 31.03.2011 31.03.2010 Rupees Rupees (in crores) (in crores)

QUOTED INVESTMENTS (Long Term and Current) -

Net Book value 931.06 761.63

Market value 3304.29 2823.46

UNQUOTED INVESTMENTS

(including Mutual Funds and application money)-

Net Book value 359.82 543.89

Estimated value (please see para below) 754.24 814.61

TOTAL BOOK VALUE

Net Book value of all investments 1290.88 1305.52

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable) 4058.53 3638.07

BANK DEPOSITS AND INTERCORPORATE DEPOSITS 330.50 217.00

TOTAL NUMBER OF COMPANIES (excluding mutual funds) 205 197

The Net Asset Value (NAV) of the Companys equity share, as computed by the management, was Rs.910 before tax (Rs.795 after tax) per share as on 31st March, 2011. The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2010, and the relatively small balance of unquoted investments taken at respective book values.

A provision for diminution in value of investments of Rs.1.32 crores, no longer required, has been written back to the Securities Premium Account. Members attention is invited to Note 2 to the Notes to Accounts.

The Directors confirm that all the investments held by the Company, except those held as ‘Current Investments, are long term investments and would normally be held for more than one year from the date of acquisition, unless otherwise decided in specific cases. Investment in the category of ‘Current Investments which, for accounting and other purposes, is so classified at the time of making the investment and is indicated separately in the list of investments shown in the relevant schedule in the Balance Sheet.

The Company continues to invest in Tata and non-Tata companies, both in the listed and unlisted categories, though investments in Tata companies generally constitute a larger proportion and are of a longer term and strategic nature .

10. DIRECTORS :

Mr. N.A. Soonawala and Mr. K.N. Suntook retired from the Board of Directors on 24th June, 2010, upon their reaching the stipulated retirement age adopted by the Board.

Consequent upon the resignation of Mr. N.A. Soonawala as the Chairman of the Company, the Board unanimously appointed Mr. Noel N. Tata and Mr. F. N. Subedar as Chairman and Vice Chairman of the Company respectively with effect from 24th June, 2010.

Pursuant to the provisions of the Companies Act, 1956, and the Companys Articles of Association, Mr. F.N. Subedar, Mr. A.B.K. Dubash and Mr. H.N. Sinor retire by rotation but are eligible for re- appointment.

The Board commends their re-appointment as Directors of the Company.

11. AUDITORS :

Deloitte Haskins & Sells, Chartered Accountants, who are the statutory auditors of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

12. GENERAL :

Being an investment company, the provisions regarding conservation of energy and technology absorption are not applicable to the Company.

There were no foreign exchange earnings and outgo other than those mentioned in Notes 4 to 6 to the Accounts.

A statement giving particulars of employees as required under Section 217(2A) the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid statement. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges is set out separately for the information of the shareholders.

On behalf of the Board of Directors,

NOEL N. TATA Chairman.

Mumbai, 10th May, 2011.


Mar 31, 2010

The Directors present their Seventy-third Annual Report with the Audited Statement of Accounts for the year ended 31st March, 2010.

2. FINANCIAL RESULTS:

Previous Year Rupees Rupees (in crores) (in crores)

Total Income.................... 232.62 213.44

Profit before tax.............. 222.81 203.47

Less: Provision for tax.......... 28.89 17.18

Profit after tax................. 193.92 186.29

Balance brought forward from the previous year................. 131.86 83.31

Amount available for appropriation.... 325.78 269.60

The Directors have made the following appropriations -

Interim dividend on Ordinary Shares.... 62.02 -

Final dividend on Ordinary Shares........ - 51.69

Tax on Dividend....................... 10.54 8.78

Reserve Fund.......................... 39.00 37.26

General Reserve....................... 20.00 40.00

131.56 137.73

leaving a balance to be carried forward of............................ 194.22 131.87

3. OPERATIONS:

The total income of the Company during the year was Rs. 232.62 crores against Rs.213.44 crores in the previous financial year. The increase in total income was mainly due to an increase in profit on sale of investments and write back of Rs. 2.73 crores being the provision for diminution in value of investments no longer required. The total expenditure during the year was more or less the same at Rs.9.82 crores against Rs.9.97 crores in the previous year.

The profit before tax for the year under review was higher by about 10% at Rs. 222.81 crores from Rs.203.47 crores in the previous year though the profit after tax for the year under review was only 4% higher at Rs. 193.92 crores compared to Rs.186.29 crores in the previous year due to a higher provision for taxation of about Rs.29 crores (under the new tax rules) as compared to Rs.17 crores in the previous year.

The basic and diluted earnings per share (EPS) computed in accordance with the Accounting Standard 20 issued by the Institute of Chartered Accountants of India was Rs. 49.64 per share and Rs. 40.20 per share respectively as against Rs.54.05 and Rs.46.04 per share (basic and diluted respectively) for the previous year, taking into account the increase in the Ordinary share capital.

3. DIVIDEND:

An interim dividend of Rs.15.00 per share i.e. 150% (previous years full dividend was also 150%) was paid on 16th February, 2010 on the Companys then Ordinary Share capital of Rs.41.35 crores (compared to the previous years capital of Rs.34.46 crores) to those shareholders whose names stood on the Register of Members on the record date i.e. 2nd February, 2010.The Directors have decided not to recommend any final dividend for the year 2009-2010.

4. INVESTMENT PORTFOLIO :

A summarised position of the Companys portfolio of investments is given below :-

As on 31.03.2010 31.03.2009 (Rs. in crores)

QUOTED INVESTMENTS (Long Term and Current) -

Book value (net of provision for diminution).......................... 761.63 638.06

Market value............................. 2823.46 1296.55

UNQUOTED INVESTMENTS

(including Mutual Funds and application money) -

Book value (net of provision for diminution)........................ 543.89 581.16

Estimated value (please see para below)................. 814.61 869.72

TOTAL PORTFOLIO

Total book value of all investments

(net of provision for diminution)........ 1305.52 1219.22

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable)........... 3638.07 2166.27

TOTAL NUMBER OF COMPANIES

(excluding mutual funds)................. 197 178

The Net Asset Value (NAV) of the Companys equity share, as computed by the management, was Rs. 715 per share as on 31 st March, 2010 after taking into account the higher equity capital and the increase in tax rates. On a like-to-like basis as the previous year, the NAV would have been Rs.1,040 on 31 st March, 2010 compared to Rs.515 on 31 st March, 2009. The NAV is computed on the basis of the market value of quoted investments, NAVs of unquoted mutual funds, most of the other equity investments in unlisted companies taken on the basis of the last available independent valuations based on the balance sheets available as at 31st March, 2009, and the relatively small balance of unquoted investments taken at respective book values, with applicable tax deducted on the total notional appreciation.

A provision for diminution in value of investments of Rs.13.92 crores, no longer required, has been written back to the Securities Premium Account. Members attention is invited to Note 2 to the Notes to Accounts.

The Directors confirm that all the investments held by the Company, except those held as Current Investments, are long term investments and would normally be held for more than one year from the date ofacquisition,unless otherwise decided in specific cases. Investment in the category ofCurrent Investments which,for accounting and other purposes,is so classified at the time of making the investment and is indicated separately in the list of investments shown in the relevant schedule in the Balance Sheet. The Company continues to invest in Tata and non-Tata companies, both in the listed and unlisted categories, though investments in Tata companies generally constitute a larger proportion and are of a longer term and strategic nature.

5. MANAGEMENT DISCUSSION & ANALYSIS :

The Indian economy has performed with remarkable stability in the last two years when most countries (with a few exceptions) witnessed a period of economic instability and financial crisis on a scale never witnessed before. Even through this turmoil, the Indian economy showed a GDP growth of 6.7% in the financial year 2008-09 and a further growth of 7.2% in 2009-10 when most countries were striving to get back on their feet with massive financial support from their Governments for their banking and financial sectors. The credit for our remarkable performance in these difficult years must go to the conservative - and yet pragmatic - policies followed by our economic and monetary authorities by taking appropriate measures to regulate and stimulate fiscal policies as required from time to time.

The industrial and service sectors in India continued to grow during 2009-10 and together with appropriate measures to provide fiscal stimulus, enabled the corporate sector across the board to show improved performance during 2009-10 over the previous financial year. This, in turn, has attracted large foreign capital inflows into the Indian economy, both in the form of foreign institutional investments (Flls) and, even more important, in foreign direct investment (FDI). While the FDI inflows contribute greatly to the long term growth of various sectors, we have been cautioning for some years now that large Fll inflows mainly through the Stock Exchanges, are not an unmixed blessing due to the turmoil that large outflows of Fll funds can cause whenever they occur. For example, the large net Fll inflows in equity investments in the five years up to 2008 which reached a total level of $ 65 billion contributed in no small measure to the^BSE Sensex reaching a peak level of 21200 in January 2008 but plunged to a low level of 7700 in October 2008 partly due to the ripple effect of the global financial crisis and partly due to the net Fll outflows of about $ 10/12 billion during 2008-2009 which was just a small fraction of the total Fll investment up to that period.

With the continuing growth of the Indian economy, both FDI and Fll inflows during 2009-10 reached a peak level of $ 35 billion of FDI funds and $ 25 billion of Fll funds during these twelve months alone. The latter has again been a major contributorto the upsurge in the stock market during 2009-10 with the BSE Sensex increasing by 80% (from 9700 in March 2009 to 17500 in March 2010) and the BSE-200 Index increasing by 93% (from 1140 in March 2009 to 2200 in March 2010). The current index levels reflect an average price/ earnings (P/E) ratio of about 20 times FY09-10 earnings and 17-18 times FY10-11 estimated earnings which is at the higher end of the spectrum of earnings valuations. For an investment company like ours, this situation is therefore to be viewed with a degree of caution for the near-term future because, despite the general level of optimism, one cannot ignore certain fundamental negative factors such as the large fiscal and current account deficits, the increasing level of Central and State Government borrowings and subsidies, the continuing high level of inflation and the re-emergence of high commodity prices.

During 2009-10, our Company continued to take advantage of the relatively high stock market prices by booking larger profits from sale of investments though there was a slight decline in dividend income. This together with a steady income earned on deployment of funds in good interest - yielding investments, enabled the Company to increase its total income from Rs. 213 crores in 2008-09 to Rs. 233 crores in 2009-10 and an increase in profit after tax from Rs. 186 crores in 2008 to Rs. 194 crores in 2009-10 even after making a higher tax provision arising from the new taxation structure applicable to a company like ours. The Directors hope that the shareholders would consider the results to be satisfactory.

Since the start of the current financial year (2010-11), the BSE Sensex has shown a declining trend from the level of 17500 as at 31 st March,2010 partly due to similar trends in foreign markets. Though most authorities expect the GDP growth rate to improve to 8%-9%, it is difficult to predict the trend of the stock market during the rest of the year, partly due to the unpredictability of capital inflows or outflows. While the corporate sector should continue to benefit from the higher growth rate, the ability to absorb the higher input costs across the board would depend on the ability of different industries to offset such higher costs through increased prices and cost-saving measures. The availability of adequate liquidity of funds at reasonable rates of interest will also be important factors for the corporate sector considering the Governments own large requirement of funds and also the requirements of the large infrastructure projects which the country badly needs. In addition, any adverse developments abroad would also have an effect on our Stock Exchanges as we are not totally insulated from such events.

6. CONVERSION OF ZERO COUPON CONVERTIBLE BONDS :

As members are aware, the Company had allotted 68,88,343 Zero Coupon Convertible Bonds (ZCCB) of Rs.650/- each (with Warrants) in October, 2008. In accordance with the terms of the Issue, each ZCCB was automatically converted, in two tranches, into two Ordinary shares at Rs.300/- per share on 1 st August, 2009 and at Rs.350/- per share on 31st March, 2010. As a result of the two conversions, the paid-up capital of the Company increased from Rs.34.46 crores to Rs.41.35 crores on 1st August, 2009 and then to Rs.48.24 crores on 31st March, 2010. The detachable warrant would entitle the holder to purchase one equity share from the Company against payment in cash at a price of Rs.400 per share during the month of April, 2011.

7. DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management confirm that, to the best of their knowledge -

(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 & loss of the Company for the period;

(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 Act, 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. INTERNAL CONTROL SYSTEMS:

The Companys auditors have confirmed that the Company has proper and adequate internal control systems commensurate with its size and nature of operations to provide reasonable assurance that all assets are safeguarded, transactions are authorised, recorded and reported properly and that all applicable statutes and corporate policies are duly complied with.

The Company has appointed an independent firm of Chartered Accountants, as Internal Auditors, which continuously reviews the adequacy and efficacy of the internal controls. The Internal Auditors submit an Internal Audit Report periodically which is placed before and reviewed by the Audit Committee.

9. DIRECTORS:

Mr. N.A. Soonawala and Mr. K.N. Suntook are due for retirement by rotation at the ensuing Annual General Meeting. Since they would be reaching the stipulated retirement age under the Companys Policy, both these gentlemen have indicated their intention not to offer themselves for re-appointment.

Mr. N.A. Soonawala joined the Board on 19th March, 1981 and has been closely associated in the overseeing the affairs of the Company. He was appointed Vice Chairman of the Board on 20th June, 2000 and took over as the Chairman of the Board of Directors of the Company on 1 st August, 2003. During this period,in keeping with the phenomenal growth in the economy and the stock markets, the Company also grew substantially with the book value of investments increasing from Rs.8 crores to Rs.1304 crores and the realisable value of the portfolio growing from Rs.17 crores to Rs.3636 crores.

The Board of Directors would like to place on record their appreciation of the tremendous contribution made by Mr. Soonawala to the Company during his association of almost 30 years with the Company.

Mr. K.N. Suntook joined the Companys Board on 5th March, 1997 and was also the chairman of the Audit Committee and the Remuneration Committee of the Board as well as a member of the Investment Committee since the last many years. During his tenure of 13 years as a Director, Mr. Suntook made significant contributions to the affairs of the Company. His guidance and advice on the Companys investment activities have been invaluable as has been his role in the Committees which he chaired.

The Directors place on record their appreciation of Mr. Suntooks long association and very useful contribution to the Company.

Pursuant to the provisions of the Companies Act, 1956, and the Companys Articles of Association, Mr. Noel N.Tata and Mr. KAChaukar retire by rotation but are eligible for re-appointment.

Mr. Zubin Dubash and Mr. Amit Chandra were appointed Additional Directors of the Company on 17th March, 2010 and 29th March, 2010 respectively and would hold office upto the conclusion of the ensuing Annual General Meeting. It is proposed to appoint Mr. Dubash and Mr. Chandra as Directors of the Company. Brief particulars of these gentlemen, are given in the Explanatory Statement to the Notice of this Meeting. Members attention is invited to Items 4 & 5 of the Notice and the related Explanatory Statement.

The Board commends the appointment/re-appointment of these Directors as Directors of the Company.

Mr. Amit Dalai who has been a non-executive Director of the Company since June, 2008 has been appointed as an Executive Director ofthe Company with effect from 1st January,2010. A Resolution for his appointment as an Executive Director ofthe Company as also the terms and conditions of his appointment "are placed for consideration for shareholders in the Notice ofthe meeting. Members attention is invited to Item 8 ofthe Notice and the related Explanatory Statement. The Board believes that Mr.Dalals knowledge and experience in an executive capacity would benefit the Company and therefore the Board commends the Resolution for acceptance.

10. AUDITORS:

Shareholders are requested to appoint Auditors for the current year and to fix their remuneration.

11. GENERAL:

Being an investment company, the provisions regarding conservation of energy and technology absorption are not applicable to the Company.

There were no foreign exchange earnings and outgo other than those mentioned in Notes 4 to 6 to the Accounts.

In accordance with Section 217(2A) ofthe Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, a statement giving particulars of employees as required under Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975, form part of this Report. However, pursuant to the provisions of Section 219(1 )(b)(iv) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid statement. Any Member interested in obtaining a copy ofthe said statement may write to the Company Secretary at the Registered Office of the Company.

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges is set out separately for the information of the shareholders.

On behalf of the Board of Directors, N.A. SOONAWALA

Mumbai, 17th May, 2010. Chairman.

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