1. The Directors are pleased to present the Twenty sixth Annual Report
on the business and operations of the Company along with the Audited
Statements of Accounts for the financial year ended March 31, 2015.
2. Result of Operations - Extract
2014-151 2013-14 2014-151 2013-14
Sales and Service 849.40 772.10 849.40 774.79
Other income 4.14 15.68 3.35 12.54
Total Income 853.54 787.78 852.75 787.33
Profit before financial
expenses, depreciation and
exceptional items 181.52 151.80 180.66 149.00
Less: Financial expenses - 1.83 - 1.83
Depreciation 25.54 34.99 25.54 34.99
Profit for the year 155.98 114.99 155.12 112.19
Less: Provision for Income
tax 53.08 39.88 53.10 39.93
Profit after tax ~ 102.90 75.11 102.02 72.26
Add: Profit brought forward 146.34 111.36 146.37 114.24
Balance available for
appropriation which has been
appropriated as 249.24 186.47 248.39 186.50
Depreciation on transition
to Schedule-II of the
Companies Act, 2013 on 13.30 - 13.30 -
tangible fixed assets with
Nil remaining useful life
Proposed dividend 34.25 28.02 34.25 28.02
Dividend tax thereon net of
reversal thereof 6.82 4.11 6.82 4.11
Transfer to General Reserve 10.00 8.00 10.00 8.00
Balance of profit carried
to Balance Sheet 184.87 146.34 184.02 146.37
Total appropriations 249.24 186.47 248.39 186.50
Your Directors recommend for your approval, a dividend of 110% (Rs. 11/-
per share) for the year ended 31st March, 2015, compared to 90% (Rs.9 per
share) in the previous year.
This will involve an outgo of Rs. 41.07 crores compared to Rs. 32.13 crores
in the previous year, including dividend distribution tax.
Your Directors have approved a transfer of Rs. 10 crores to the General
Reserves for the year ended 31st March, 2015, as against an amount of Rs.
8 crores in the previous year.
5. Review of Operations
The total income during the year under review increased by 8% from
787.78 crores in the previous year to Rs. 853.54 crores.
The Profit Before Tax (PBT) increased by 36% from 114.99 crores in the
previous year to Rs. 155.98 crores.
The Profit After Tax (PAT) increased by 37% from 75.11 crores in the
previous year to Rs. 102.90 crores.
During the year under review, our concerted effort in growing revenues
from the embedded product design and industrial design services,
increasing the composition of software sales and support services in
the Systems Integration business, and balanced control of operational
costs, resulted in improved top line and bottom line performance.
7. Directors and Key Managerial Personnel
In terms of Section 161 of the Companies Act, 2013 Mr. N.G. Subramaniam
and Dr. G. Katragadda, Non - Executive and Not-Independent Directors,
who have been appointed as Additional Directors retire at the ensuing
Annual General Meeting. We have received a Notice under Section 160 (1)
of the Companies Act, 2013 from a member proposing the candidatures of
Mr. N.G. Subramaniam and Dr. G. Katragadda to the office of
Directorship, whose terms of office shall be determined for retirement
Mr. S. Ramadorai, the then Chairman, retired from the Board with effect
from October 06, 2014, on attaining the age of 70 years as per our
policy. The Board placed on record their appreciation for the exemplary
leadership and guidance rendered by Mr. Ramadorai during his tenure on
Mrs. Sudha Madhavan, CFO, resigned from her position w.e.f. September
19, 2014 to seek other career opportunities.
The Board on the recommendation of the Audit Committee, appointed Mr.K.
Ramaseshan as our CFO w.e.f. January 21, 2015.
During the year under review, Seven (7) Board meetings were held and
well attended by the Directors. We have circulated the Calendar of
meetings for the year 2015-16 to the Directors.
The Independent Directors have submitted their declaration that they
fulfill the requirements as stipulated in Section 149 (6) of the
Companies Act, 2013. Pursuant to Clause VII (1) of Schedule IV of the
Companies Act, 2013. The Independent Directors had a separate meeting
on 25th March,2015.
8. Directors'' Responsibility Statement
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by
the internal, statutory and secretarial auditors and the reviews
performed by Management and the relevant Board Committees, including
the Audit Committee, the Board is of the opinion that the Company''s
internal financial controls were adequate and effective during the
financial year 2014-15.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the
Board of Directors, to the best of their knowledge and ability, confirm
(a) in the preparation of the annual accounts the applicable accounting
standards had been followed along with proper explanations relating to
(b) the directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of our state of affairs
at the end of the financial year and of our profit and loss for that
(c) the Directors had taken proper and sufficient care, for the
maintenance of adequate accounting records, in accordance with the
provisions of Companies Act 2013, for safeguarding our assets and for
preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern
(e) the directors had laid down internal financial controls to be
followed by us and that such internal Controls are adequate and were
(f) the Directors have devised proper systems to ensure compliance with
provisions of all applicable laws and that such systems were adequate
and operating effectively.
10. Particulars on Remuneration
The information required under Section 197(12) of the Companies Act
2013 Read with Rule 5(2) and 5(3) of the Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014 forms part of the
Directors'' Report and have not been attached. However, in terms of
first proviso to Section 136(1) the particulars as referred above are
available for inspection at our Registered office during business hours
on working days, up to the date of the ensuing Annual General Meeting.
Any shareholder interested in obtaining a copy of the same may write to
the Company Secretary.
Particulars pursuant to Section 197(12) of the Companies Act 2013 Read
with Rule 5(1) of the Companies (Appointment & Remuneration of
Managerial Personnel) Rules, 2014 are provided in Annexure-A.
Our Board has adopted a Remuneration Policy as also the Charter for the
Nomination & Remuneration Committee (NRC). The Policy covers the Policy
on remuneration to our Managing Director, Key Managerial Personnel and
other officers. The Charter lays down the Rights, Roles and
Responsibilities of the NRC. A Policy on Board diversity has also been
adopted by the Board. A comprehensive Governance Guidelines for Board
effectiveness has also been adopted by the Board on the recommendation
of NRC. The Guidelines lay down the following:
- Composition and Role of the Board (Role of the Chairman, Directors,
size of the Board, Managing Director, Executive Director, Non-Executive
Directors, Independent Directors, their term, tenure and Directorship).
- Board appointment, Industrial Development.
- Directors remuneration (Guided by Remuneration policy).
- Subsidiary oversight.
- Code of Conduct (Managing Director, Executive Director,
Non-Executive Directors, Independent Directors).
- Board effectiveness review.
- Mandate of the Board Committee.
11. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars pursuant to section 134 (m) of the Companies Act, 2013
is attached with this report as Annexure-B.
12. Risk Management Policy
We have adopted a Risk Management Policy to identify and categorize
various risks, implement measures to minimize impact of these risks
where it is deemed necessary and possible, and a process to monitor
them on a regular basis. More details are given under Section-6 of
Corporate Governance Report.
13. Corporate Social Responsibility
We have constituted a CSR committee for the purposes of recomending and
monitoring the CSR initiatives of the Company.
The Board on the recommendation of CSR Committee adopted a CSR Policy.
The same is available on Company''s website at
(http://www.tataelxsi.com/company/corporate-sustainability). The CSR
objectives are designed to serve societal, local and national goals in
the locations that we operate in, create a significant and sustained
impact on local communities and provide opportunities for our employees
to contribute to these efforts through volunteering.
The Annual Report on the CSR initiatives undertaken by the Company as
per the Companies (Corporate Social Responsibilities Policy) Rules,
2014 is annexed as Annexure-C. The details of the CSR Committee and its
composition is given in section-7 of the Corporate Governance Report.
14. Subsidiary Company, Statement under Section 129 of the Companies
Act, 2013 and Consolidated Financial Statements
Our wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd. did not
accrue any revenue during the year under review. There has been an
expenditure of Rs. 0.06 crores during the year under review. Our Board of
Directors have given their consent to the closure of Subsidiary and the
same is under process. The details of subsidiary as required under the
provisions of the Companies Act, 2013 are given in page No. 93 Members
interested in obtaining a copy of the Audited annual accounts of the
subsidiary company may write to the Company Secretary.
15. Corporate Governance
Pursuant to Clause 49 of the Listing Agreement, the Corporate
Governance Report, the Management Discussion & Analysis Statement, and
the Auditors'' Certificate regarding Compliance of Conditions of
Corporate Governance are part of this Annual Report.
16. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, Ms. Jayashree Parthasarthy, a Company Secretary
in Practice, was appointed to undertake the Secretarial Audit. The
Report of the Secretarial Audit for the year ended 31st March, 2015 is
attached to the Directors'' Report at page No. 27.
17. Prevention of Sexual Harassment
We have zero tolerance for sexual harassment at workplace and have
adopted a Policy on prevention, prohibition and redressal of sexual
harassment at workplace in line with the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the Rules thereunder for prevention and
Redressal of complaints of sexual harassment at workplace.
During the year FY15, we received one (1) complaint related to sexual
harassment; the same has been disposed of and appropriate action taken.
There are no pending complaints for FY15.
18. Vigil Mechanism
Our company has established a Vigil Mechanism for its employees and
Directors, enabling them to report any concerns of unethical behaviour,
suspected fraud or violation of the Company''s ''Code of Conduct''.
To this effect the Board has adopted a ''Whistle Blower Policy'' (WBP),
which is overseen by the Audit Committee. The policy provides
safeguards against victimization of the Whistle Blower. Employees and
other stakeholders have direct access to the Chairperson of the Audit
Committee for lodging concerns if any, for review.
The said policy has been posted on our intranet where all the employees
have access. Our Company conducts ''Policies Awarness Campaign''
regularly for its employees at its various centres, and the WBP also
features in the campaign amongst others.
There are no loans, guarantees and investments made by us u/s 186 of
the Companies Act, 2013 during the year under review.
The extract of Annual Return in MGT-9 is attached and forms part of the
We have neither accepted nor renewed any deposit during the year under
The Unclaimed Dividend in respect to the financial year 2007-08 is due
for remittance to Investors'' Education & Protection Fund (IEPF) on 27th
August, 2015 in terms of Section 125 of the Companies Act, 2013.
There are no material changes and commitments affecting our financial
position between the end of the financial year to which this financial
statement relate and the date of this report.
Delloitte Haskins & Sells (DHS), Chartered Accountants, the Statutory
Auditors, who have been appointed for a period of 3 years and whose
reappointment is to be ratified at the ensuing Annual General Meeitng,
have confirmed that their certificate dated April 21, 2014 issued
pursuant to the provisions of Section 139(1) of the Companies Act, 2013
holds good for the period of re-appointment.
Your Directors wish to thank employees, customers, partners, suppliers,
and above all, our shareholders and investors for their continued
support and co-operation.
On behalf of the Board of Directors
Bengaluru, 28th April, 2015