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Tata Elxsi Directors Report, Tata Elxsi Reports by Directors
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Tata Elxsi
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Download Annual Report PDF Format 2014 | 2013 | 2011 | 2010
Directors Report Year End : Mar '14    « Mar 13
TO THE MEMBERS
 
 1.  The Directors present the Twenty-Fifth Annual Report, along with
 the Audited Statements of Accounts of your Company, for the year ended
 March 31, 2014.
 
 2.  Financial Highlights:
 
 During the financial year 2013-14, the operations of your Company
 resulted in the following:
 
                                                     (Rs. Crores)
 
                                    Unconsolidated       Consolidated
 
                                   2013-14   2012-13   2013-14   2012-13
 
 Sales and Service                  772.10    604.68    774.79    621.67
 
 Other income                        15.68      6.23     12.54      4.84
 
 Total Income                       787.78    610.91    787.33    626.51
 
 Profit before financial expenses, 
 depreciation and exceptional 
 items                              151.81     75.29    149.01     76.90
 
 Less: Financial expenses             1.83      3.91      1.83      3.91
 
 Depreciation                        34.99     23.72     34.99     23.72
 
 Exceptional Items                       –     15.90         –     15.90
 
 Profit for the year                 114.99      31.76   112.19     33.37
 
 Less: Provision for Income tax      39.88      10.77    39.93     10.99
 
 Share of loss from associate 
 Company                                 –          –        –      1.07
 
 Profit after tax                     75.11      20.99    72.26     21.31
 
 Add: Profit brought forward         111.36     111.09   114.24    113.65
 
 Balance available for 
 appropriation which has been 
 appropriated as under:             186.47     132.08   186.50    134.96
 
 Proposed dividend                   28.02      15.57    28.02     15.57
 
 Dividend tax thereon net of 
 reversal thereof                     4.11       2.65     4.11      2.65
 
 Transfer to General Reserve          8.00       2.50     8.00      2.50
 
 Balance of Profit carried to 
 Balance Sheet                      146.34     111.36   146.37    114.24
 
 Total appropriations               186.47     132.08   186.50    134.96
 
 3.  Dividend:
 
 Your Directors recommend for your approval, a dividend of 90% (Rs. 9 per
 share) [previous year 50% (Rs.5.00 per share)] for the year ended 31st
 March 2014, involving an outgo of Rs. 28.02 crores compared to Rs. 15.57
 crores in the previous year. Additionally, the dividend distribution
 tax will involve an outlay of Rs. 4.11 crores compared to Rs. 2.65 crores
 in the previous year. The total payout ratio is 43% for this year as
 compared to 87% in the previous year.
 
 4.  Review of Operations:
 
 The total consolidated income during the year under review was Rs. 787.33
 crores as against Rs. 626.51 crores in the previous year, registering an
 increase of 26%.
 
 The Profit Before Tax (PBT) was Rs. 112.19 crores, as against Rs. 33.37
 crores in the previous year. The Profit Before Tax increased by 236%
 over the previous year. The Profit After Tax (PAT) was Rs. 72.26 crores,
 as against Rs. 21.31 crores in the previous year, registering an increase
 of 239%.
 
 During the year under review, your Company''s concerted effort in
 growing its revenues from the embedded and industrial design services,
 focussing on solutions and services in the systems integration
 business, and containing costs of its animation and visual effects
 business, resulted in improved top line and bottom line performance.
 
 More details are set out in the attached Management Discussion and
 Analysis Statement.
 
 A business-wise analysis of your Company''s two main segments viz.
 Software Development & Services and Systems Integration & Support
 follow hereunder:
 
 Software Development & Services:
 
 The services constituting this segment are Embedded Product Design,
 Industrial Design and Visual Computing Labs.  This segment reported
 revenue of Rs. 682.70 crores in FY14 against Rs. 552.95 crores in the
 previous year, registering an increase of 23% over the previous year.
 The segment''s Profit was Rs. 137.90 crores.
 
 Embedded Product Design
 
 The Embedded Product Design helps customers develop electronic products
 by providing design of hardware, implementation of technologies such as
 audio, video, imaging and connectivity onto the hardware, and
 developing software applications and user interface that enable users
 to use the product and its functionality with ease and convenience. It
 addresses the automotive, aerospace, broadcast, consumer electronics,
 communications, healthcare, and semiconductor industries.
 
 Embedded Product Design division worked with a leading Japanese
 automotive OEM to design and develop a complete Electronic Control Unit
 (ECU) for a hybrid electric vehicle, including software and hardware.
 The hybrid vehicle was successfully released in the market in June
 2013.
 
 The division supported India''s Mars Orbiter mission – Mangalyaan, by
 designing the Data Control Hardware which was installed in the Mars
 Orbiter and launched into space on November 05, 2013.
 
 The division announced the licensing of its in-house developed Ultra
 High Definition (UHD) video decoder software to a US based company,
 which will enable very high-quality video on embedded devices.
 
 Your Company participated in leading industry events such as the
 International Broadcast Conference (IBC) – Amsterdam, Consumer
 Electronics Show (CES) - Las Vegas and Mobile World Congress (MWC) –
 Barcelona, to showcase its capability and innovations to the global
 market. It also presented technical papers on topics such as
 next-generation vehicle security at the VDI conference in Germany.
 
 Industrial Design
 
 The Industrial Design division helps customers deliver a superior
 product or service through design. In the case of products, this
 includes the form, color, branding and textures, as well as the way the
 product interfaces with the user. The division also help customers
 improve their service delivery by studying, analyzing, and providing
 design interventions that improve end-user experience at every touch
 point.
 
 It worked with GVK to design the experiential services for various
 consumer touch points at Mumbai International Airport''s new integrated
 Terminal 2, and helped redefine the passenger experience, while
 enhancing efficiencies and productivity for the airport staff at T2. As
 part of this project, the division designed entertainment zones,
 customer service zones, general and lifestyle seating areas from the
 security to the boarding gates. Other elements included designing
 pay/help phones, charging stations, housing of ATM vending machine,
 internet workstations/ kiosks amongst others.
 
 The division worked with St. James'' Court, A Taj Hotel and Taj 51
 Buckingham Gate, Suites and Residences to redefine the visual identity
 of the hotel. This involved developing the brand identity for both the
 hotels. Over 100 collaterals were designed including stationery,
 promotional collaterals, amenities, and service and communication
 collaterals amongst others.
 
 Your Company was declared winner of the first Automotive Grade Linux
 (AGL) User Experience Contest in the Best User Experience category.
 The AGL contest was centered on the theme ''Designing the Future of
 Automotive Infotainment User Experience''. Your Company''s concept Human
 Machine Interface (HMI) won the award for its intuitive and effortless
 navigation.
 
 Visual Computing Labs (VCL)
 
 Visual Computing Labs provides high-end animation and Visual Effects
 (VFX) services. It caters to the entertainment industry by providing
 these services for feature films, episodic television serials and
 high-end gaming. It also caters to the marketing and advertising
 industry by providing these services for TV ad commercials and
 corporate videos for visualization and new product launches.
 
 The division won the coveted Film fare 2014 award and the Star Guild
 Award 2014 for Best Visual Effects for a feature film, for its work in
 Dhoom 3.
 
 The division was also recognized for its stellar work in delivering
 Visual Effects for Bhaag Milkha Bhaag.
 
 Systems Integration & Support:
 
 During the year under review, the segment turnover and Profit were Rs.
 92.08 crores and Rs. 8.43 crores respectively.
 
 This business segment, designs and implements solutions, using
 contemporary hardware and application software for in-house R&D and
 design centers of organizations. It provides solutions for Computer
 Aided Design and Manufacturing (CAD/CAM), Virtual Reality and High
 Performance Computing. It also supports enterprises in effectively
 managing their IT infrastructure, including storage, computing and
 networking.
 
 This business delivered improved results through its focus on a
 solution-centric approach that drives higher composition of software
 and support services in the business mix to improve revenues and
 margins.
 
 5.  Finance:
 
 The interest cost for FY14 was Rs.1.83 crores, as against Rs. 3.91 crores
 in the previous year. Borrowings as at the end of FY14 were NIL,
 compared to Rs. 58.51 crores in the previous year.
 
 6.  Corporate Social Responsibility (CSR):
 
 The Board, pursuant to the provisions of section 135 of the Companies
 Act, 2013, has at its meeting held on 2nd April, 2014 constituted a CSR
 committee with the following Directors as members:
 
 Mrs. Shyamala Gopinath, Chairperson 
 
 Mr. Piyush Mankad, Member
 
 Mr. Madhukar Dev, Member
 
 7.  Directors:
 
 Pursuant to the provisions of section 149 read with Schedule IV of the
 Companies Act, 2013, Mrs. Shyamala Gopinath, Dr. R. Natarajan, Mr. P.
 Mankad and Mr. P McGoldrick have given declaration that they meet the
 criteria for independence as provided therein. Accordingly, the
 above named directors are proposed to be appointed as independent
 directors for a term of five (5) years from the date of the ensuing
 Annual General Meeting or attainment of retirement age for independent
 Directors prescribed under the Revised Guidelines (2012) for
 Composition of Board of Directors, Committees of the Board and
 Retirement Age of Directors as may be revised from time to time,
 whichever is earlier.
 
 8.  Directors Responsibility Statement:
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
 Directors, based on the representations received from the Operations
 Management, conform that- (i) in the preparation of the annual accounts,
 the applicable accounting standards have been followed and that there
 are no material departures;
 
 (ii) they have, in the selection of the accounting policies, consulted
 the Statutory Auditors and have applied them consistently and made
 judgments and estimates that are reasonable and prudent so as to give a
 true and fair view of the state of affairs of the Company at the end of
 the financial year and of the Profit of the Company for that year;
 
 (iii) they have taken proper and sufficient care, to the best of their
 knowledge and ability, for the maintenance of adequate accounting
 records, in accordance with the provisions of the Companies Act, 1956,
 for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 9.  Personnel:
 
 Your Company''s workforce composition is aligned to the delivery of
 design and creative services. The Embedded Product Design, Industrial
 Design, and Systems Integration divisions are mainly comprised of
 graduates and post- graduates in engineering and design. Visual
 Computing Labs employ creative professionals with proficiency in the
 software tools that are used to deliver animation and VFX services.
 
 Your Company recognizes the critical importance of its human capital.
 Capacity addition, through the induction of fresh engineers and lateral
 hires are driven by the annual business planning exercise. Capacity
 addition is continuously monitored and managed, depending on the
 business demand and near-term projections.  Your Company undertakes
 significant initiatives to increase efficiency through improved
 operations, training and retooling, leadership development, and other
 measures.
 
 10.  Disclosure of Particulars:
 
 The information required under Section 217 (2A) of the Companies Act,
 1956 and the Rules made there under, is provided in Annexure-B forming
 part of the Report. In terms of Section 219 (1) (b) (iv) of the Act,
 the Report and Accounts are being sent to the Shareholders, excluding
 the aforesaid Annexure. Any Shareholders interested in obtaining a copy
 of the same may write to the Company Secretary.
 
 11.  Subsidiary Company, Statement under Section 212 of the Companies
 Act, 1956 and Consolidated Financial Statements:
 
 The Company''s wholly owned subsidiary, Tata Elxsi (Singapore) Pte. Ltd.
 recorded a turnover of Rs. 2.69 crores and Profits before Tax of Rs. 1.01
 crores during the year 2013-14, as against the previous year''s turnover
 of Rs. 17.21 crores and Profit before Tax of Rs. 1.93 crores. The Board of
 Directors of your Company has given their consent for not attaching to
 its Balance Sheet, the documents relating to its subsidiary specified in
 Section 212 (1) of the Companies Act, 1956 in terms of the General
 Circular no. 2/2011 of the MCA.
 
 In terms of the said circular, a statement in one page containing
 specified financial details of the subsidiary company is to be included
 in the consolidated annual financial statements of the parent Company.
 The annual accounts of the subsidiary and the related detailed
 information will be made available to the holding and subsidiary
 company''s investors seeking such information at any point of time. The
 annual accounts of the subsidiary will also be kept available for
 inspection by any investor at the head office of the parent and
 subsidiary Company respectively.
 
 As required pursuant to the Accounting Standards of the Institute of
 Chartered Accountants of India (ICAI) and the Listing Agreement with
 the Stock Exchanges, the stand-alone annual accounts of your Company,
 along with the consolidated financial statements of your Company and the
 subsidiary Company made up to 31st March 2014, are also presented.
 
 12.  Corporate Governance:
 
 Pursuant to Clause 49 of the Listing Agreement, the Corporate
 Governance Report, the Management Discussion & Analysis Statement, and
 the Auditors'' Certificate regarding Compliance of Conditions of
 Corporate Governance are part of this Annual Report.
 
 13.  Auditors
 
 Deloitte Haskins & Sells (DHS), Chartered Accountants, who are the
 Statutory auditors of the Company, hold office till the Conclusion of
 the Forthcoming AGM and are eligible for re-appointment. Pursuant to
 the provisions of Section 139 of the Companies Act, 2013 and the rules
 framed there under, it is proposed to appoint DHS as Statutory auditors
 of the Company from the Conclusion of the Forthcoming Annual General
 Meeting till the Conclusion of the 28th Annual General Meeting to be
 held in the year 2017, subject to ratification of appointment at every
 AGM.
 
 14.  Acknowledgements:
 
 The Directors wish to thank the Company''s employees, customers,
 partners, suppliers, and above all, its shareholders and investors for
 their continued support and co-operation.
 
                                 On behalf of the Board of Directors
 
                                 S. RAMADORAI
 
                                 Chairman
 
 Mumbai, April 22, 2014
Source : Dion Global Solutions Limited
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