1. The Directors present the Twenty-second Annual Report together
 with the Audited Statements of Accounts of your Company for the year
 ended March 31,2011.
 
 2.  Financial Highlights:
 
 During the financial year 2010-11, the operations of your Company
 resulted in the following:
 
                                                           (Rs. Crores)
                                    Unconsolidated         Consolidated
                                2010-11    2009-10    2010-11   2009-10
 
 Sales and Service               411.01     376.37     415.91    388.17
 
 Other income                      3.86       0.95       3.86      0.95
 
 Total Income                    414.87     377.32     419.77    389.12
 
 Profit before financial 
 expenses and depreciation        50.20      67.95      51.05     68.94
 
 Less : Financial expenses         1.88       1.74       1.88      1.74
 
 Depreciation                     17.20      16.58      17.20     16.58
 
 Net profit for the year          31.12      49.63      31.97     50.62
 
 Less: Provision for Income tax  (0.61)       1.72     (0.55)      1.80
 
 Profit after tax                 31.73      47.91      32.52     48.82
 
 Add: Profit brought forward     105.99      88.58     107.13     88.81
 
 Balance available for 
 appropriation which has been    137.72     136.49     139.65    137.63
 appropriated as under:
 
 Proposed dividend.               21.80      21.80      21.80     21.80
 
 Dividend tax thereon net of 
 reversal thereof.                 3.45       3.70       3.45      3.70
 
 Transfer to general reserve       5.00       5.00       5.00      5.00
 
 Balance of profit carried to 
 Balance Sheet                   107.47     105.99     109.40    107.13
  
 Total appropriations            137.72     136.49     139.65    137.63
 
 
 3.  Dividend:
 
 Your Directors recommend for your approval a dividend of 70% (Rs.7.00
 per share) [previous year 70% (Rs.7.00 per share)] for the year ended
 31st March 2011, involving an outgo of Rs. 21.80 Cr. (previous year
 Rs.21.80 Cr.). Additionally, dividend distribution tax will involve an
 outlay of Rs.3.45 Cr. (previous year Rs.3.70 Cr.), involving a payout
 ratio of 79.6%.
 
 4.  Review of Operations:
 
 On consolidated basis, the turnover during the year under review was
 Rs.415.91 Cr. as against Rs.388.17 Cr. in the previous year,
 registering an overall increase of 7.1%. The Profit after Tax was
 Rs.32.52 Cr. as against Rs.48.82 Cr. in the previous year.
 
 The market registered slow but steady recovery in the key industry
 segments that your company operates in. Your company registered the
 increase in turnover by successfully implementing and executing on
 strategies for market focus, improved treasury and financial
 management, and improved efficiency and productivity.
 
 More details are set out in the attached Management Discussion and
 Analysis Statement.
 
 A business-wise analysis of your Companys two main segments viz.
 Software Development & Services and Systems Integration & Support
 follows hereunder:
 
 Software Development & Services:
 
 The businesses constituting this segment are Embedded Product Design,
 Industrial Design and Visual Computing Labs. Business in this segment
 registered an increase of 6.3% to Rs.358.19 Cr. during FY11 from
 Rs.336.94 Cr. in FY10. The segment profit decreased from Rs.57.67 Cr.
 to Rs.36.81 Cr., mainly on account of increased personnel expenses.
 
 Embedded Product Design:
 
 The Embedded Product Design division provides technology consulting,
 new product development, system integration and testing services for
 the broadcast, industrial and consumer electronics, transportation,
 wireless communications and convergence industries. It also creates and
 licenses intellectual property and software components, helping
 customers create product differentiation and reduce development costs
 and time-to-market.
 
 Your company has identified certain growth markets for the future and
 is working towards building market traction and competencies to garner
 scale and market share in these selected industry segments.
 
 Industrial Design:
 
 The Industrial Design division helps customers develop winning brands
 and products by using design as a strategic tool for business success.
 Its expertise extends across consumer insight, branding, industrial
 design, visual design & merchandising, design engineering and
 manufacturing support.
 
 This division has worked with prestigious FMCG brands in packaging
 design. It has developed award-winning designs in the food, beverage,
 personal and home care segments for leading brands in India and
 Overseas.
 
 It has also executed several projects for interior and exterior styling
 of cars and transportation products, and is also targeting the growing
 Asian market in this segment.
 
 Visual Computing Labs:
 
 Visual Computing Labs offers Animation, Visual Effects (VFX) and 3D
 stereoscopic content for feature films, episodic television and
 advertising.
 
 It also offers custom content development for visualization and product
 marketing, and is a leading developer of mobile, online and console
 games.
 
 During the year, the Overseas VFX studio set up at Santa Monica near
 Hollywood commenced projects for several Hollywood productions. It has
 also built capability in its US and Mumbai studios, to deliver 3D
 Stereoscopic content related work.
 
 Systems Integration & Support:
 
 During the year, the segment turnover and results were Rs.57.71 Cr. and
 Rs.6.77 Cr. respectively, compared to Rs.51.23 Cr. and Rs.4.06 Cr.
 respectively during 2009-10.
 
 This business has improved its turnover and profits, while focusing on
 a solutions centric approach which includes more of software and
 services. It also focused on growing the professional services business
 to enable better margins.
 
 5.  Finance:
 
 Interest cost was Rs.1.88 Cr. against Rs.1.74 Cr. in the previous year.
 Borrowings, which were Rs.33.97 Cr. at the beginning of the year,
 reduced to Rs.25.43 Cr. at the end of the year.
 
 6.  Directors:
 
 Mr. P.G. Mankad and Mr. P. McGoldrick retire by rotation and being
 eligible, offer themselves for reappointment.
 
 Mr. Ramadorai, Chairman, has been appointed as the Advisor to the Prime
 Minister in the Prime Ministers National Skill Development Council in
 the rankof Cabinet Minister with effectfrom February 07,2011. The
 Directors place on record their heartiest congratulation and wishes Mr.
 Ramadorai all the best for this prestigious appointment.
 
 7.  Directors Responsibility Statement:
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, your
 Directors, based on the representations received from the Operating
 Management, confirm that -
 
 (i) In the preparation of the annual accounts, the applicable
 accounting standards have been followed and that there are no material
 departures;
 
 (ii) they have, in the selection of the accounting policies, consulted
 the Statutory Auditors and have applied them consistently and made
 judgments and estimates that are reasonable and prudent so as to give a
 true and fair view of the state of affairs of the Company at the end of
 the financial year and of the profit of the Company for that year;
 
 (iii) they have taken proper and sufficient care, to the best of their
 knowledge and ability, for the maintenance of adequate accounting
 records in accordance with the provisions of the Companies Act, 1956,
 for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 8.  Personnel:
 
 Your Company recognizes the critical importance of its human capital
 and significant initiatives are planned for 2011-12 to increase
 capacity through the induction of fresh engineers and lateral hires
 from the industry, as also increased efficiency through technical
 training and other productivity enhancing inputs.
 
 9.  Disclosure of Particulars:
 
 Information required under Section 217(2A) of the Companies Act, 1956
 and the Rules made there under, is provided in Annexure-B forming part
 of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report
 and Accounts are being sent to the Shareholders excluding the aforesaid
 Annexure. Any Shareholders interested in obtaining a copy of the same
 may write to the Company Secretary.
 
 10.  Subsidiary Company, Statement under Section 212 of the Companies
 Act, 1956 and Consolidated Financial Statements:
 
 The Companys wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd.
 recorded a turnover of Rs.4.90 Cr. and Profits before Tax of Rs.0.85 Cr
 during the year 2010-11 as against the previous years turnover of
 Rs.11.80 Cr. and Profit before Tax of Rs.0.99 Cr, which relates mainly
 to the Systems Integration segment business. Your Company has been
 granted exemption for this financial year by the Ministry of Corporate
 Affairs from attaching to its Balance Sheet the documents relating to
 its subsidiary specified in Section 212 (1) of the Companies Act, 1956.
 
 In terms of the said exemption, a statement in one page containing
 specified financial details of the Subsidiary Company is to be included
 in the consolidated annual financial statements of the parent Company.
 The annual accounts of the subsidiary and the related detailed
 information will be made available to the holding and Subsidiary
 Companies investors seeking such information at any point of time. The
 annual accounts of the subsidiary will also be kept available for
 inspection by any investor at the head office of the parent and
 Subsidiary Company respectively.
 
 As required pursuant to the Accounting Standards of the Institute of
 Chartered Accountants of India and the Listing Agreement with the Stock
 Exchanges, the stand-alone annual accounts of your Company along with
 the consolidated financial statements of your Company and the
 Subsidiary Company made upto 31st March, 2011, are also presented.
 
 11.  Corporate Governance:
 
 Pursuant to Clause 49 of the Listing Agreement, the Corporate
 Governance Report, the Management Discussion & Analysis Statement and
 the Auditors Certificate regarding Compliance of Conditions of
 Corporate Governance are part of this Annual Report.
 
 12.  Acknowledgements:
 
 The Directors wish to thank the Companys esteemed customers, partners,
 suppliers, and above all, its shareholders and investors for their
 continued support and co-operation.
 
 
 
                                  On behalf of the Board of Directors
 
 
                                                         S. RAMADORAI
                                                             Chairman
 
 
 Mumbai, 27th April 2011