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Tata Elxsi Ltd.

BSE: 500408 Sector: IT
NSE: TATAELXSI ISIN Code: INE670A01012
BSE 00:00 | 24 Apr 2020 Tata Elxsi Ltd
NSE 05:30 | 01 Jan 1970 Tata Elxsi Ltd

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OPEN 728.15
PREVIOUS CLOSE 723.65
VOLUME 37859
52-Week high 1098.75
52-Week low 501.00
P/E 18.25
Mkt Cap.(Rs cr) 4,674
Buy Price 750.45
Buy Qty 60.00
Sell Price 756.45
Sell Qty 5.00
OPEN 728.15
CLOSE 723.65
VOLUME 37859
52-Week high 1098.75
52-Week low 501.00
P/E 18.25
Mkt Cap.(Rs cr) 4,674
Buy Price 750.45
Buy Qty 60.00
Sell Price 756.45
Sell Qty 5.00

Tata Elxsi Ltd. (TATAELXSI) - Director Report


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Company director report

1. Your Directors are pleased to present the Thirtieth AnnualReport on the business and operations of the Company along with the Audited Statements ofAccounts for the financial year ended March 31 2019.

2. Result of Operations - Extract

र In Crores

2018-19 2017-18
Revenue from operations 1597 1386
Other income( Net) 43 43
Total Income 1640 1429
Profit before financial expenses depreciation 458 389
Less: Financial expenses - -
Depreciation/ Amortization 25 25
Profit before tax 433 364
Tax expenses 143 124
Profit after tax for the year 290 240
Other Comprehensive income -3 1
Total comprehensive income 287 241
Add: Profit brought forward 610 439
Less: Dividend and Dividend Tax* 83 60
Transfer to General Reserve 10 10
Balance Profit carried to Balance Sheet 804 610

*Pertains to previous years

3. Dividend

Your Directors recommend for your approval a dividend of 135 % (`13.50 per share) for the year ended March 31 2019 on 62276440 equity shares of ` 10/-each fully paid-up compared to 110% (` 11/- per share) on 62276440 equity shares of `10/- each fully paid-up in the previous year.

This will involve an outgo of ` 101.37 crores compared to ` 82.60crores in the previous year including dividend distribution tax.

The Company's Dividend Distribution Policy (DDP) is available inthe Investors section of the company website: http://www.tataelxsi.com/investors/TataElxsi-dividend-distribution-policy.pdf

4. Reserves

Your Directors have approved a transfer of र 10 crores to theGeneral Reserves for the year ended March 31 2019 as against an amount of र 10crores transferred in the previous year.

5. Review of Operations

The total income during the year under review increased by 15% fromर 1429 crores in the previous year to र 1640 crores.

The Profit Before Tax (PBT) increased by 19% from र 364 crores inthe previous year to ` 433 crores. The Profit After Tax (PAT) increased by 21% from र240 crores in the previous year to र 290 crores.

During the year under review your Company continued its momentum ofgrowth despite geo-political uncertainties considerable headwinds in the businessenvironment and currency volatility in some currencies.

6. MANAGEMENT DISCUSSION AND ANALYSIS

Industry Outlook

According to NASSCOM India's IT-BPM industry (excl. e-commerce)is expected to grow by 6.1% in FY19 to $ 177 billion. Technologies such as roboticscloud IoT and AR/ VR are driving a large part of this growth.

According to NASSCOM India continues to be the core for developing‘Intelligent Solutions' with enormous opportunities for digital engineering& connected solutions innovation and R&D hubs SaaS & deep tech solutions ITdigital solutions partners intelligent operations partners and disruptive products &solutions.

Business Analysis

Our operations are classified into two business segments i.e.Software Development & Services and Systems Integration & Support.

Software Development and Services

This business segment grew by 16% from र 1329 crores in theprevious year to र 1543 crores in FY19. The segment profit increased by 16% fromर 396 crores during the last year to ` 456 crores during FY19.

In order to enhance the customer experience there is a need to createthe ‘market of one' which involves all the components right from strategycustomer insights to design implementation and post-delivery delight to be carefullypackaged. Tata Elxsi brings together this unique capability of integrated design andtechnology teams across verticals which helps it stand out for its customers and helpingdeliver innovation for new products and services.

Leveraging Digital

Your Company has been investing in key digital technologies over thepast few years through Centers of Excellence in areas such as AI and Analytics IoT andAutomation which have helped enhance the service portfolio not only for existingcustomers but also to win new customers across the world.

To illustrate NOS a Portugal based entertainment & communicationprovider has collaborated with your Company to launch a Digital Centre of Excellence(CoE). This center will focus on digital transformation initiatives that are geared todeliver next-generation services enhance subscriber experience and improve operationalefficiency across their entire portfolio.

The software development and services segment consist of two businessdivisions that provide technology and design services respectively to customers acrossindustries.

Embedded Product Design

The Embedded Product Design (EPD) division provides technologyconsulting new product design development and testing services for the automotivebroadcast consumer electronics healthcare telecom and transportation industries. Thekey sectors addressed by EPD include:

Transportation

Tata Elxsi works with leading OEMs and suppliers in the automotive andtransportation industries for R&D design and product engineering services fromarchitecture to launch and beyond. Your Company works with leading car manufacturers andsuppliers in developing electronics and software for powertrain infotainmentconnectivity active safety and comfort and convenience.

By 2020 over 250 million vehicles are estimated to be connected to theinternet and equipped with a myriad of sensors connectivity platforms and geo-analyticalcapabilities.

Your Company brings together deep expertise in digital technologiesincluding Artificial Intelligence Extended Reality and IoT to help OEMs & suppliersto realize the future of autonomous connected & electric vehicles.

As vehicles become more integrated complex and autonomous the amountof software and hardware required will significantly increase. Your Company has beenworking on driverless car solutions for the past few years now and has also invested indeveloping in-house software and components to help customers accelerate their productdevelopment.

For instance Tata Elxsi has collaborated with Mobis Technical Centre(HMTCI) a wholly owned subsidiary of Hyundai Mobis for the development of a SyntheticScene Generator Tool. This tool can replicate every real-world scenario an automobilecould encounter which could run into millions of possibilities accelerating the ongoingresearch and development support HMTCI is providing to their OEMs in Autonomous Driving.

Electric vehicles are slowly gaining momentum and even as the industryembraces electric we will see a shift from conventional to hybrid to fully electricpowertrains. Tata Elxsi has been working in various aspects of the electric vehicle spaceespecially in powertrain development from program management to software development andvalidation of new platforms. Your Company participated in leading trade shows and eventsacross geographies such as the CES 2019 (Consumer Electronics Show) in Las Vegas Hybrid& Electric Vehicle Confex in Pune and Autonomous & Smart Vehicle Summit inShanghai where it showcased its capabilities and new product offerings for autonomousvehicles connected cars and next-gen infotainment.

Broadcast and Communications

Tata Elxsi addresses the complete product development lifecycle fromR&D new product development and testing to maintenance engineering for BroadcastConsumer Electronics and Communications.

With the penetration of high-speed internet smart devices and contentflooding in the market the borders between entertainment media and telecommunicationshave dissolved. New services such as smart connected homes & OTT are creating newrevenue opportunities for operators & broadcasters.

Tata Elxsi works with leading broadcasters & operators to createsolutions for smarter living engaged entertainment and a digital future driven by IoTanalytics and artificial intelligence thereby enabling new revenue streams and enhancedcustomer experience.

Tata Elxsi has partnered with Airtel to deliver an engaging digitalplatform for customers with an innovative hybrid DTH set-top-box – ‘InternetTV' which brings together the best of online content and linear TV on one platformbridging the gap between online and offline world for TV users.

We continue to participate in leading international industry eventssuch as IBC (International Broadcasting Convention) in Amsterdam Appliances &Electronics World Expo in Shanghai and Broadcast Asia in Singapore to reiterate ourestablished presence and brand in these markets. Industrial Design and Visualization

Tata Elxsi helps customers create innovative products services andexperiences to build brands and help businesses grow. By intersecting design andtechnology we help clients globally to bring new ideas and products to market. YourCompany's services span across consumer research and strategy branding and graphicsproduct design service design user experience design transportation design3D-prototyping visualization and manufacturing support. Tata Elxsi brings togetheremerging technologies including digital innovative design and content to create newproducts and experiences for customers that drive business success.

Together with our clients we simplify and enhance service value byanalyzing problems identifying opportunities improving processes and creating unifiedsolutions meaningful interactions spaces and products.

Your Company has been awarded India's Best Design Studio 2018 byPool magazine. We have also won four Best Design Project Awards in the Product DesignBranding & Graphics and User Experience Design categories. This is a testimony to ourworld-class design thinking strategy and end-to-end service capabilities.

Systems Integration and Support

During the year under review our Systems Integration & Supportsegment reported a turnover of ` 54 crores and profit of ` 9 crores.

Your Company implements and integrates complete systems and solutionsfor specialized applications such as High-Performance Computing Computer Aided Designand Virtual Reality. We also provide Professional Services for the maintenance and supportof such installations in India and key overseas markets.

We continue to expand our solution portfolio to address emergingdigital technology needs with our customers including Virtual Reality (VR) 3D Printingand Robotics.

In the VR space your Company has been named as an exclusivedistributor for VR driver training in India by VR Motion. This will promote easier andmore sophisticated fleet driver training and higher road safety using Virtual Reality.

Threats concerns and risks

With global trade risk rising this year as the U.S. plans tariffs on arange of products the pressure to protect the competitiveness of export industries is setto build. India will likely prefer to keep its currencies competitive relative to Asiancounterparts. As almost 85% of company's revenue comes from outside India and themajority of the delivery team is based in India a weakening of Rupee against leadingforeign currencies or strengthening of these currencies will only help the company'stop-line and bottom-line. Tata Elxsi's revenue is uniformly distributed across Euroand US dollar currencies which provides us a natural hedge against possible currency riskfrom any single region. Your Company has also institutionalised a hedging policy toaddress any possible risks associated with global currencies.

The UK is going through some protectionism measures like the minimumwage bill for a work permit but again the impact to Tata Elxsi is small. The new US H1Bpolicy is likely to have minimal impact on our operations as most of our projects aredelivered via offshore locations in India.

Internal Control Systems and their adequacy

The Company's internal control systems commensurate with thenature of its business and the size and complexity of its operations. Your Company hasappointed an external audit firm Deloitte Haskin & Sells LLP to provide anindependent objective and reasonable assurance on the adequacy and effectiveness of theCompany's internal controls. The audit firm periodically evaluates and tests theefficacy and adequacy of internal controls. The internal control systems also aim tostrengthen the overall assurance practices processes and controls. Significant auditobservations and follow up actions thereon are reported to the Audit Committee.

Based on the internal audit reports process owners undertakecorrective actions in their respective areas and thereby strengthen the controls. TheAudit Committee approves the annual internal audit plan reviews the adequacy andeffectiveness of the internal control system significant audit observations and monitorsthe implementation of audit recommendations.

Financial Analysis

Particulars 2018-19 2017-18 Change over previous year % Percentage of Income
Crs 2018-19 2017-18
Sales and services 1597 1386 15 97 97
Other income 43 43 - 3 3
Total Revenues 1640 1429 15 100 100
Cost of sales 99 77 28 6 5
Personnel expenses 843 749 13 51 52
Financial expenses - - - - -
Depreciation/ Amortization 25 25 - 2 2
Other expenses 240 214 12 15 15
Total Expenditure 1207 1065 13 74 75
Profit before tax and exceptional items 433 364 19 26 25
Tax expenses 143 124 16 9 9
Profit after tax for the year 290 240 21 18 17

Analysis of Overheads

2018-19 2017-18 Variance %
Particulars Crs Crs
Operating lease rent 19.61 17.04 15.08
Communication expenses 8.13 8.80 (7.56)
Inland travel and conveyance 8.53 7.91 7.84
Overseas travel 66.24 66.38 (0.21)
Consultant fees for software development 61.71 50.88 21.29

Significant Ratio Analysis

Particulars Unit 31.03.19 31.03.18
1 Earnings before interest depreciation and tax/Sales % 28.71 28.08
2 Profit before tax/ Sales % 27.14 26.25
3 Profit after tax/ Sales % 18.16 17.32
4 Current Ratio* No. of times 5.39 4.23
5 Earnings per share ` 46.56 38.54

*Increase in Current Ratio is due to cash generation during the yearresulting in higher cash and bank balances.

Human Resources

Your Company recognizes the critical importance of its human capital.As a technology-led design Company we continue to focus on attracting and retaining toptalent.

Your Company undertakes significant initiatives to increaseeffectiveness and efficiency through Leadership training Performance management Talentdevelopment Employee engagement and Succession planning. Across the organization thereare leadership programs for all job levels technical training programs are hosted toup-skill and re-skill employees on latest technologies there are curated learningpaths for all employees and employee engagement is at the centre of everything we do.There are programs like Future leaders to identify young aspiring talent early in theircareer and nurture that talent.

Your Company believes in Diversity & Inclusion and is committed tothe principle of Equal Employment Opportunity for all employees. About 33% of our totalworkforce comprises of female employees underscoring the emphasis that Tata Elxsi placeson providing equal opportunities for its workforce. Our total headcount was 6060 as ofMarch 31 2019.

Quality initiatives

We have instituted quality processes in the execution of our softwaredevelopment projects and implemented robust information security management processes toassure our global customer base of the required level of confidentiality andprotection of data and information. To this effect we have been assessed and certifiedfor ISO 9001:2015 and ISO 27001:2013. Additionally we have been certified fordesign and development of medical devices with ISO 13485:2012 certification andAutomotive SPICE Level 5 certification for transportation business.

Directors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act 2013Mr. N.G. Subramaniam retires by rotation and being eligible offers himself forre-appointment.

The Board had on the recommendation of the Nomination and RemunerationCommittee (NRC) at its meeting held on July 25 2018 appointed Mr. Ankur Verma as anAdditional Director of the Company with effect from August 01 2018. In terms of section161 of the Companies Act 2013 Mr. Verma holds office up to the date of the ensuingAnnual General meeting and being eligible offers himself for re-appointment. The NRC atits meeting held on April 24 2019 has recommended the appointment of Mr. Verma to theoffice of the Directorship of the Company whose term of office shall be determined byretirement by rotation subject to the approval of the shareholders.

Dr. Gopichand Katragadda Non-Executive Non Independent-Directorresigned from the office of the directorship of the Company with effect from July 132018. The Board placed on record their appreciation for the valuable contribution andguidance rendered by Dr. Katragadda during his tenure on the Board.

The term of Mrs. Shyamala Gopinath and Mr. Patrick McGoldrickIndependent Directors is due to expire on July 17 2019. The Nomination and RemunerationCommittee (NRC) at its meeting held on April 24 2019 has recommended the re-appointmentof Mrs. Shyamala Gopinath Independent Director for a further term commencing from July18 2019 upto June 19 2024 subject to the approval of the shareholders. Mr.Patrick McGoldrick Independent Director did not wish to be re-appointed due to hisdomestic commitments.

The Board as a part of succession plan for the CEO & ManagingDirector Mr. Madhukar Dev who retires on October 01 2019 and on the recommendation ofthe Nomination and Remuneration Committee (NRC) decided to appoint Mr. Manoj RaghavanExecutive Vice President (EPD) as the CEO & Managing Director of the Company on andfrom October 02 2019 subject to the approval of the shareholders. During the year underreview five (5) Board meetings were held and have been well attended by the Directors.The calendar of meetings for the year 2019-20 has been circulated to all the directorsdetailing the schedule of Board and Committee meetings during 2019-20.

The Independent Directors have submitted their declaration that theyfulfill 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 IndependentDirectors had a separate meeting on April 25 2018.

Pursuant to the provisions of section 203 of the Companies Act 2013the Key Managerial Personnel (KMP) of the Company are Mr. Madhukar Dev MD & CEO; Mr.Muralidharan H.V Chief Financial Officer (CFO) and Mr. G Vaidyanathan GeneralCounsel & Company Secretary.

7. Directors' Responsibility Statement

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors and the reviews performed by Management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatthe Company's internal financial controls were adequate and effective during thefinancial year 2018-19.

Accordingly pursuant to Section 134(5) of the Companies Act 2013 theBoard of Directors to the best of their knowledge and ability confirm that: a. In thepreparation of the annual accounts the applicable accounting standards had been followedalong with proper explanations relating to material departures; b. The Directors hadselected such accounting policies and applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of our stateof affairs at the end of the financial year and of our profit and loss for that period. c.The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets and for preventing and detecting fraud and other irregularities;d. The Directors have prepared the annual accounts on a going concern basis. e. TheDirectors had laid down internal financial controls to be followed by us and that suchinternal controls are adequate and were operating effectively. f. The Directors havedevised proper systems to ensure compliance with provisions of all applicable laws andthat such systems were adequate and operating effectively.

8. Particulars on Remuneration

The statement showing the names of the top ten employees in terms ofremuneration drawn and the information required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014 forms part of the Directors' Report and have notbeen attached. However in terms of first proviso to Section 136(1) the particulars asreferred above are available for inspection at our Registered office during business hourson working days up to the date of the ensuing Annual General Meeting. Any shareholderinterested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 are provided as under:

(i) The ratio of the remuneration of each Director to the medianremuneration of the employees of the Company for the financial year:

Non-Executive Director Ratio to median remuneration
Mr. N G Subramaniam* -
Mr. Patrick McGoldrick 11.87
Mrs. S. Gopinath 14.96
Dr. G Katragadda* (up to July 13 2018) -
Prof. M.S. Ananth 8.00
Mr. Sudhakar Rao 9.68
Mr. Ankur Verma* -
(on and from August 01 2018)
Executive Director
Mr. Madhukar Dev MD & CEO 93.32

For Non-Executive Director only Commission is considered.

*Being in full time employment of other Tata Company is not eligiblefor commission. (ii) Percentage increase in the remuneration of the Directors and KMPs forthe financial year:

Directors Managing Director & CEO Chief Financial Officer and Company Secretary % increase in the remuneration of Directors/KMP in the Financial year
Mr. N G Subramaniam** -
Mr. Patrick McGoldrick 23.89
Mrs. S. Gopinath 18.34
Dr. G Katragadda** (up to July 13 2018) -
Prof. M.S. Ananth 22.77
Mr. Sudhakar Rao -
Mr. Ankur Verma** (on and from August 01 2018) -
Mr. Madhukar Dev MD & CEO 15.60
Mr. Muralidharan H.V CFO* -
Mr. G Vaidyanathan Company Secretary 13.64

*Since information is part of the year either current or past thesame is not comparable. **Being in full time employment of other Tata Company is noteligible for commission. (iii) The percentage increase in the median remuneration ofemployees in the financial year: 5% (iv) The number of permanent employees on the rolls ofcompany: 6060 (including consultants)

(v) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration: The average increase in salaries of employees other thanmanagerial personnel in 2018-19 was 12%. Percentage increase in the managerialremuneration for the year was 16%.

(vi) The Company hereby affirms that the remuneration is as per theremuneration policy of the company.

The Board has adopted a Remuneration Policy as also the Charter for theNomination & Remuneration Committee (NRC). The Policy covers the Policy onremuneration to our Managing Director Key Managerial Personnel and other officers. TheCharter lays down the Rights Roles and Responsibilities of the NRC. A Policy on Boarddiversity has also been adopted by the Board. A comprehensive Governance Guidelines forBoard effectiveness has also been adopted by the Board on the recommendation of NRC. TheGuidelines lay down the following

The Remuneration Policy and the Charter for NRC are available athttp://tataelxsi.com/investors/nrccharter.pdf

9. Conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo

The particulars pursuant to section 134 (m) of the Companies Act 2013is attached with this report as Annexure-A.

10. Business Responsibility Report (BRR)

In terms of the Regulation 34(2) (f) of SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 ('Listing Regulations') the BusinessResponsibility Report is attached as Annexure-C.

11. Risk Management Policy

The Board has adopted a Risk Management Policy to identify andcategorize various risks implement measures to minimize impact of these risks where it isdeemed necessary and possible and a process to monitor them on a regular basis includingto review and monitor the cyber security measure. More details are given under Section-6of Corporate Governance Report.

12. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee has been constitutedfor the purposes of recommending 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://tataelxsi.com/company/social-responsibility.html). The CSR objectives are designedto serve societal local and national goals in the locations that we operate in create asignificant and sustained impact on local communities and provide opportunities for ouremployees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company asper the Companies (Corporate Social Responsibilities Policy) Rules 2014 is annexed asAnnexure-D. The detail of the CSR Committee and its composition is given in section-7 ofthe Corporate Governance Report.

13. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Corporate Governance Report theManagement Discussion & Analysis Statement and the Auditors' Certificateregarding Compliance to Corporate Governance requirements are part of this Annual Report.

14. Related Party Transactions

All Related Party Transactions that were entered during the financialyear were on an arm's length basis and in the ordinary course of business and is incompliance with the applicable provisions of the Act and the Listing Regulations. Therewere no materially significant Related Party Transactions made by the Company during theyear that required shareholders' approval under Regulation 23 of the ListingRegulations. None of the transactions entered with related parties falls under the scopeof Section 188(1) of the Act. Details of transactions with related parties as requiredunder Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules2014 are provided in Annexure - B in Form AOC-2 and forms part of this Report.

15. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Ms.Jayashree Parthasarthy of M/s Jayashree Parthasarathy & Co a CompanySecretary-in-Practice was appointed to undertake the Secretarial Audit. The Report of theSecretarial Auditor for the year ended March 31 2019 is attached to the Directors'Report at page No. 43.

16. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and haveadopted a Policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder for preventionand redressal of complaints under the above Act.

One (1) complaint was received by the local ICC during the year underreview the same has been redressed to the satisfaction of the complainant.

17. Vigil Mechanism

Your Company has established a "Vigil Mechanism" for itsemployees and Directors enabling them to report any concerns of unethical behaviorsuspected fraud or violation of the Company's ‘Code of Conduct'.

To this effect the Board has adopted a ‘Whistle BlowerPolicy' (WBP) which is overseen by the Audit Committee. The policy providessafeguards against victimization of the Whistle Blower. Employees and other stakeholdershave direct access to the Chairperson of the Audit Committee for lodging concerns if anyfor review.

The said policy has been posted on our intranet where all the employeeshave access. The Company conducts ‘Policies Awareness Campaign' regularly forits employees at its various centers and the WBP features in these campaigns.

18. Others

There are no loans guarantees and investments made by us u/s 186 ofthe Companies Act 2013 during the year under review. Your Company has neither acceptednor renewed any deposit during the year under review.

The extract of Annual Return in MGT-9 is attached and forms part of theDirectors' Report.

The Unclaimed Dividend in respect to the financial year 2011-12 is duefor remittance to Investors' Education & Protection Fund (IEPF) on August 292019 in terms of Section 125 of the Companies Act 2013.

There are no material changes and commitments affecting theCompany's financial position between the end of the financial year to which thisfinancial statement relates and the date of this report.

Pursuant to the provisions of Section 124(6) of the Companies Act 2013and Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 the Company has during the year transferred 26784 equity sharespertaining to those shareholders who have not claimed their dividend for 7 consecutiveyears since 2011 to the IEPF account on October 30 2018. So far the Company hastransferred 281010 equity shares to the IEPF account.

19 . Auditors

M/s BSR & Co. LLP Chartered Accountants the statutory auditors ofthe company have been appointed at the 28th Annual General meeting heldon July 27 2017 for a period of 5 years from the conclusion of 28th AnnualGeneral Meeting up to the conclusion of the 33rd Annual General meeting to beheld in the year 2022.

20. Acknowledgements

Your Directors wish to thank employees customers partners suppliersand above all our shareholders and investors for their continued support andco-operation.

For and on behalf of the Board

N. G. Subramaniam

Chairman

Bengaluru April 24 2019

Particulars pursuant to Section 134(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014

1. Conservation of Energy

Prevention of the wasteful use of natural resources particularlyconcerning the emission of greenhouse gases consumption of water and energy and themanagement of waste and hazardous materials have been the key enablers in our journey ofenvironmental sustainability. Few of our initiatives towards reducing negativeenvironmental impact include deploying mass transport for our employees through anarrangement with Bengaluru Metropolitan Transport Corporation (BMTC) for buses.

We have invested in technology to monitor and control the powerconsumption of ACs and other related equipment use of energy efficient light bulbs usingtechnology for switching off computer monitors motion sensors for lighting controls etc.to conserve energy.

Our emissions and waste generated are well within limits prescribed bythe State Pollution Control Board.

As a Tata group company ensuring an appropriate and conducive Officeenvironment and employee safety is paramount to us. We have instituted a comprehensivesafety policy and procedures to govern the same. We regularly train employees and monitorvarious safety measures to ensure a safe working environment.

2. Technology absorption adaption and innovation

Your Company undertakes various learning and development initiatives tobuild critical organizational capabilities to its employees. These aim to cross-skillresources across BUs on a need basis training on new methodologies and developingleadership capabilities at various levels. These programs also facilitate training andpreparing design and engineering teams for upcoming projects in terms of deliverycapability and capacity. The outcomes of these programs also help showcase technology anddevelopment capability to potential customers without violating the confidentiality ofwork being executed for existing customers in the same area. Further certain programs arefocused on creating reusable software components and frameworks which have the potentialto generate future revenue streams through commercialization and licensing. R&DActivities and Expenditure

During the year we invested 1.37% of revenue towards in-house R&Dprojects. We intend to continue investing in technology IP development especially thoserelated to automotive broadcast and communications.

Expenditure incurred in the R&D centers and innovation centersduring the financial year 2018-19 are given below: i. Capital : Nil ii. Recurring : र22.54 crores iii. Total : र 22.54 crores iv. Total R & D expenditure as a totalpercentage of turnover: 1.37%

3. Foreign Exchange earnings and outgo

Export revenue constituted 87% of the total revenue in financial year2018-19

(` In Crores)

Foreign exchange earnings 1407.96
CIF Value of imports 40.12
Expenditure in foreign currency 475.88

For and on behalf of the Board

N. G. Subramaniam

Chairman

Bengaluru April 24 2019


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