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Tata Elxsi Ltd.

BSE: 500408 Sector: IT
NSE: TATAELXSI ISIN Code: INE670A01012
BSE 00:00 | 12 Aug 10241.45 745.05
(7.85%)
OPEN

9539.80

HIGH

10398.40

LOW

9503.50

NSE 05:30 | 01 Jan Tata Elxsi Ltd
OPEN 9539.80
PREVIOUS CLOSE 9496.40
VOLUME 78951
52-Week high 10398.40
52-Week low 4200.40
P/E 102.70
Mkt Cap.(Rs cr) 63,784
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9539.80
CLOSE 9496.40
VOLUME 78951
52-Week high 10398.40
52-Week low 4200.40
P/E 102.70
Mkt Cap.(Rs cr) 63,784
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tata Elxsi Ltd. (TATAELXSI) - Director Report

Company director report

1. Y our Directors are pleased to present the Thirty Third Annual Report on thebusiness and operations of the Company along with the Audited Statements of Accounts forthe financial year ended March 31 2022.

2. Result of Operations - Extract

Rs. In crores

FY 2021-22 FY 2020-21
Revenue from operations 2471 1826
Other income( Net) 44 40
Total Income 2515 1866
Profit before financial expenses depreciation 810 562
Less: Financial expenses 9 6
Depreciation/ Amortisation 55 44
Profit before tax 745 512
Tax expenses 196 144
Profit after tax for the year 549 368
Other Comprehensive income (2) (3)
Net Profit for the year 547 365
Add: Profit brought forward 1194 942
Less: Dividend 299 103
Transfer to General Reserve 10 10
Balance Profit carried to Balance Sheet 1432 1194

3. Dividend

Your Directors recommend for your approval a final dividend of 425% (Rs. 42.50 pershare) subject to tax for the year ended March 31 2022 on 62276440 equity shares ofRs. 10/- each fully paid-up compared to 480% (Rs. 48/- per share) on 62276440 equityshares of Rs. 10/- each fully paid-up in the previous year.

This will involve an outgo of Rs. 264.69 crores compared to Rs. 298.93 crores in theprevious year. The Company’s Dividend Distribution Policy (DDP) is available in theInvestors section of the company website: www.tataelxsi.com/ DividendDistributionPolicy

4. Reserves

Your Directors have approved a transfer of Rs. 10 crores to the General Reserves forthe year ended March 31 2022 as against an amount of Rs. 10 crores transferred in theprevious year.

5. Review of Operations

The total income during the year under review increased by 34.8% from Rs. 1866 croresin the previous year to Rs. 2515 crores. The Profit Before Tax (PBT) was Rs. 745 croresagainst Rs. 512 crores in the previous year. The Profit After Tax (PAT) was Rs. 547 croresagainst Rs. 365 crores in the previous year.

6. Management Discussion and Analysis is included as Annexure B to theDirectors’ Report Directors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act 2013 Mr. Ankur Vermaretires by rotation and being eligible offers himself for re-appointment.

The Board on the recommendation of the Nomination Remuneration Committee has appointedMr. Gaurav Bajaj as the Chief Financial Officer and KMP of the Company with effect fromAugust 01 2021 in place of Mr. H.V. Muralidharan who superannuated on July 31 2021.

The Board at the Meeting held on January 18 2022 on the recommendation of theNomination Remuneration Committee appointed Ms. Cauveri Sriram as the Company Secretary& Compliance

Officer and KMP of the Company with effect from March 01 2022 in place of Mr. G.Vaidyanathan who superannuated from the services of the Company on February 28 2022.During the year under review five (5) Board meetings were held and have been wellattended by the Directors. The calendar of meetings for the year 2021-22 had beencirculated to all the Directors detailing the schedule of Board and Committee meetingsduring 2021-22.

Pursuant to the provisions of Section 149 of the Act the Independent Directors’have submitted declarations that each of them meets the criteria of independence asprovided in Section 149(6) of the Act along with Rules framed thereunder and Regulation16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). During the year21-22 there has been no change in the circumstances affecting their status asIndependent Directors’ of the Company. Pursuant to Clause VII (1) of Schedule IV ofthe Companies Act 2013 the Independent Directors had a separate meeting on April 212021.

During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/ Committee of the Company. Pursuant to the provisions of Section 203of the Act the Key Managerial Personnel of the Company as on March 31 2022 are Mr. ManojRaghavan M.D and CEO Mr. Gaurav Bajaj Chief Financial Officer and Ms. Cauveri SriramCompany Secretary & Compliance Officer.

7. Directors’ Responsibility Statement

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that theCompany’s internal financial controls were adequate and effective during thefinancial year 2021-22.

Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:

a. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanations relating to material departures.

b. The Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of our state of affairs at the end of the financial year and of our profit andloss for that period.

c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the 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. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f. The Directors have devised proper systems to ensure compliance with provisions ofall applicable laws and that such systems were adequate and operating effectively.

8. Particulars on Remuneration

The statement containing particulars of the top 10 employees and the employees drawingremuneration in excess of limits prescribed under Section 197 (12) of the Act read withRule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in the Annexure forming part of this report. In terms of provisoto Section 136(1) of the Act the Report and Accounts are being sent to the shareholdersexcluding the aforesaid Annexure. The said Statement is also open for inspection at theRegistered Office of the Company up to the date of the ensuing Annual General Meeting.Any member 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 areprovided as under:

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

Non-Executive Director Ratio to median remuneration
Mr. N G Subramaniam* -
Mrs. S. Gopinath 21.33
Mr. Sudhakar Rao 20.78
Prof. Anurag Kumar^ 16.78
Mr. Ankur Verma* -
Executive Directors
Mr. Manoj Raghavan MD & CEO 44.44

* In line with the internal guidelines of the Company no payment is made towardscommission to the Non-Executive Directors of the Company who are in full-time employmentwith any other Tata company and hence not stated.

^ Since the remuneration is only for part of the year the ratio of their remunerationto median remuneration and percentage increase in remuneration is not comparable and hencenot stated

(ii) Percentage increase in the remuneration of the Directors and KMPs for thefinancial 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* -
Mrs. S. Gopinath 20%
Mr. Sudhakar Rao 39%
Prof. Anurag Kumar^
Mr. Ankur Verma*
Mr. Manoj Raghavan MD & CEO 47%
Mr. Gaurav Bajaj CFO^
Ms. Cauveri Sriram Company Secretary^

**In line with the internal guidelines of the Company no payment is made towardscommission to the Non-Executive Directors of the Company who are in full-time employmentwith any other Tata company and hence not stated.

^ Since the remuneration is only for part of the year the ratio of their remunerationto median remuneration and percentage increase in remuneration is not comparable andhence not stated

(ii) Percentage increase in the remuneration of the Directors and KMPs for thefinancial year.

(iii) The percentage increase in the median remuneration of employees in the financialyear: 10%

(iv) The number of permanent employees on the rolls of the company: 9376 (includingconsultants)

(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: The averageincrease in salaries of employees other than the managerial personnel in 2021-22 was 12%.

Percentage increase/(decrease) in the managerial remuneration for the year was 32.50%

(vi) The Company hereby afirms that the remuneration is as per the remuneration policyof the company which was adopted by the Board and is also laid out in the Charter for theNomination & Remuneration Committee (NRC). The Policy covers the Policy onremuneration to the Managing Director Key Managerial Personnel and other officers. TheCharter lays down the rights roles and responsibilities of the NRC.

A Policy on Board diversity and Governance Guidelines have also been adopted by theBoard on the recommendation of NRC. The Guidelines lay down the following: Compositionand Role of the Board (Role of the Chairman Directors size of the Board ManagingDirector Executive Director Non-Executive Directors Independent Directors their termtenure and directorship) Board appointment Directors’ Remuneration(Guided by the Remuneration Policy) Subsidiary Oversight

Code of Conduct (Managing Director Executive Director Non-Executive DirectorsIndependent Directors) Board effectiveness review Mandate of the BoardCommittee The Remuneration Policy and the Charter for NRC are available at www.tataelxsi.com/NRC-Charter

9. Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo

The particulars pursuant to section 134 (m) of the Companies Act 2013 and read withRule 8(3) of the Companies (Accounts) Rules 2014 is attached with this report asAnnexure-A.

10. Business Responsibility Report (BRR)

In terms of Regulation 34(2) (f) of SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 (‘Listing Regulations’) the BusinessResponsibility Report forms part of the Annual Report.

11. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorise variousrisks implement measures to minimise impact of these risks where it is deemed necessaryand possible and a process to monitor them on a regular basis including to review andmonitor the cyber security measure. More details are provided in the Management Discussionand Analysis and Corporate Governance Report.

12. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee has been constituted for the purposesof recommending and monitoring the CSR initiatives of the Company.

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same isavailable on Company’s website at www.tataelxsi. com/corporatesocial-responsibility.

The CSR objectives are designed to serve societal local and national goals in thelocations we operate create a significant and sustained impact on local communities andprovide opportunities for our employees to contribute to these efforts throughvolunteering.

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-B. Thedetail of the CSR Committee and its composition is given in section-7 of the CorporateGovernance 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 ManagementDiscussion & Analysis and the Auditors’ Certificate regarding Compliance toCorporate Governance requirements are part of this Annual Report.

14. Related Party Transactions

All Related Party Transactions that were entered during the financial year were on anarm’s length basis and in the ordinary course of business and is in compliance withthe applicable provisions of the Act and the Listing Regulations.

In terms of Section 188 of the Act and other applicable provisions if any read withRule 15 of the Companies (Meetings of Board and its Powers) Rules 2014 as amended tilldate and Regulation 23(4) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Company had sought the approval of shareholders at the 32nd AGMfor transactions with Jaquar Land Rover Limited a related party within the meaning ofSection 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations for providingAutomotive Design & Engineering support up to a maximum aggregate value of Rs. 250crores per year for each of the financial years 2021-22 and 2022-23.

Further the limits as approved in the 32nd AGM were revised vide postal ballot datedDecember 17 2021 from Rs. 250 crores per annum for each of the financial years 2021-22and 2022-23 to up to a maximum aggregate value of Rs.325 crores per annum for thefinancial year 2021-22 and Rs. 450 crores per annum for the financial year 2022-23for related party transactions with Jaquar Land Rover Limited.

15. Secretarial Audit and Annual Certification

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Ms. JayashreeParthasarathy of M/s Jayashree Parthasarathy

& Co a Company Secretary-in-Practice was appointed to undertake the SecretarialAudit. The Report of the Secretarial Auditor along with the certificate ofnon-disqualification of Directors for the year ended March 31 2022 is annexed to theDirectors’ Report as Annexure - C.

16. Extract of annual return

In terms of the Companies Act 2013 as amended the Annual Return is available onwww.tataelxsi. com/AnnualReturn.

17. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy onprevention prohibition and redressal of sexual harassment at workplace in line with theprovisions of the Sexual Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules made thereunder for prevention and redressal ofcomplaints under the above Act. 3 (three) complaints were received by the local InternalComplaints Committee during the year under review the same has been redressed to thesatisfaction of the complainant.

18. Vigil Mechanism

Your Company has established a "VigilMechanism" for its employees andDirectors enabling them to report any concerns of unethical behaviour suspected fraud orviolation of the Company’s ‘Code of Conduct’.

To this effect the Board has adopted a ‘Whistle Blower Policy’ (WBP) whichis overseen by the Audit Committee. The policy interalia provides safeguards againstvictimisation of the Whistle Blower. Employees and other stakeholders have direct accessto the Chairperson of the Audit Committee for lodging concerns if any for review. Thesaid policy has been posted on our intranet where all the employees have access. TheCompany conducts ‘Policies Awareness Campaign’ regularly for its employees atits various centers and the WBP features in these campaigns.

19. Others

There are no loans guarantees and investments made by the Company u/s 186 of theCompanies Act 2013 during the year under review. Your Company has neither accepted norrenewed any deposit during the year under review. There are no material changes andcommitments affecting the Company’s financial position between the end of thefinancial year to which this financial statement relates and the date of this report. TheUnclaimed Dividend in respect to the financial year 2014-15 is due for remittance toInvestors’ Education & Protection Fund (IEPF) on August 30 2022 in terms ofSection 125 of the Companies Act 2013.

Pursuant to the provisions of Section 124(6) of the Companies Act 2013 and InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 the Company has during the year transferred 18420 equity shares pertaining to thoseshareholders who have not claimed their dividend for 7 consecutive years since 2014 tothe IEPF account on October 22 2021.

20. Auditors

Members of the Company at the AGM held on July 27 2017 approved the appointment ofM/s BSR & Co. LLP Chartered Accountants (ICAI Firm Registration No. 101248W/W -100022) as the statutory auditors of the Company for a period of 5 years commencing fromthe conclusion of the 28th AGM until the conclusion of the 33rd AGM of the Company to beheld in 2022.

The Board approved the re-appointment of M/s BSR & Co. LLP Chartered Accountantsbased on the recommendations of the Audit Committee and the same is subject to theapproval of the Members of the Company.

The necessary resolutions for re-appointments of M/s BSR & Co. LLP form part of thenotice convening the 33rd AGM of the Company.

21. Acknowledgements

Your Directors wish to thank employees customers partners suppliers and above allour shareholders and investors for their continued support and co-operation.

For and on behalf of the Board

N. G. Subramaniam

Chairman

Bengaluru April 20 2022

.