TO THE MEMBERS OF TATA ELXSI LIMITED
1. Your Directors are pleased to present the Thirty
Fifth Integrated Annual Report on the business and operations of the Company along with
the audited financial statements for the financial year ended March 31, 2024.
2. FINANCIAL SUMMARY
The highlights of financial performance of the Company, for
the year ended March 31, 2024, are summarised hereunder:
( crore)
|
FY2023-24 |
FY 2022-23 |
| Revenue from operations |
3,552.14 |
3,144.72 |
| Other income (Net) |
121.95 |
73.81 |
| Total Income |
3,674.09 |
3,218.53 |
| Profit before financial expenses, depreciation and tax |
1,168.37 |
1,035.09 |
| Less: Financial expenses |
20.26 |
16.20 |
| Depreciation/ Amortisation |
99.44 |
81.39 |
| Profit before tax |
1,048.67 |
937.50 |
| Tax expenses |
256.44 |
182.31 |
| Profit after tax for the year |
792.23 |
755.19 |
| Other Comprehensive income |
(9.97) |
(5.65) |
| Net Profit for the year |
782.26 |
749.54 |
| Add: Profit brought forward |
1,907.53 |
1,432.67 |
| Less: Dividend |
377.40 |
264.68 |
| Transfer to General Reserve |
10.00 |
10.00 |
| Balance Profit carried to Balance Sheet |
2,277.06 |
1,907.53 |
3. REVIEW OF OPERATIONS AND PERFORMANCE
The total income during the year under review increased by
14.20% from 3,218.53 crores in the previous year to 3,674.09 crores. The Profit Before
Tax (PBT) was 1,048.67 crores as against 937.50 crores in the previous year. The Profit
After Tax (PAT) was 792.23 crores against 755.19 crores in the previous year.
4. DIVIDEND
The Board of Directors are pleased to recommend a final
dividend of 700% (70 per share), subject to tax, for the financial year ended March 31,
2024, on 6,22,76,440 equity shares of
10/- each fully paid-up, in comparison to 606%
(60.60 per share) on 6,22,76,440 equity shares of 10/-
each fully paid-up in the previous year. The said dividend on equity shares is subject to
the approval of the Members at the ensuing Annual General Meeting ("AGM")
scheduled to be held on July 10, 2024. If approved, this will involve an outflow of
435.94 crores, compared to 377.40 crores, in the previous year.
According to the Finance Act, 2020, dividend income will be
taxable in the hands of the Members w.e.f. April 01, 2020, and the Company is required to
deduct tax at source from the dividend paid to the Members at prescribed rates as per the
Income Tax Act, 1961.
The Company's Dividend Distribution Policy, as adopted in
line with Regulation 43A of the Listing Regulations is available on the website of the
Company at the link: www.tataelxsi.com/ investors/policies-and-disclosures.
5. TRANSFER TO RESERVES
Your Directors have approved a transfer of 10
crores to the General Reserves for the year ended March 31, 2024, as against an amount of
10 crores transferred in the previous year.
6. SHARE CAPITAL
As on March 31, 2024, the authorised share capital of the
Company consisted of 7,00,00,000 equity shares of 10 each, and the paid-up equity share
capital as on March 31, 2024, consisted of 6,22,76,440 equity shares of 10 each. During
FY 2023-24, the Company has not issued any shares, securities / instruments convertible
into equity shares, sweat equity shares and shares with differential voting rights.
7. TATA ELXSI LIMITED PERFORMANCE STOCK OPTION PLAN
2023
Pursuant to the approval of the Members vide special
resolution passed through Postal Ballot on March 04, 2023, the Company had adopted and
implemented the "Tata Elxsi Limited Performance Stock Option Plan 2023"
(hereinafter referred to as "PSOP 2023" or "the Plan"), for grant of
3,11,000 fully paid-equity shares of 10/- (Rupee Ten Only), representing 0.50% of the
issued share capital of the Company to the eligible employees of the Company. The Plan is
intended to reward, motivate and retain the Eligible Employees of the Company as defined
in the PSOP 2023, (hereinafter collectively referred to as ‘Eligible Employees') for
their performance and participation in the growth and profitability of the Company. The
said initiative to link the employee's performance in the Company along with other
initiatives would contribute to improve the performance of the Company. The Plan has been
formulated in accordance with the provisions of the Companies Act, 2013 (‘the Act')
and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
(‘SBEB&SE Regulations') and during the year under review, there was no change in
PSOP 2023.
The eligible employees shall be granted Performance Stock
Options (PSOP), as determinedbytheNominationandRemuneration Committee of the Board, which
will vest as per the approved vesting schedule and are be exercisable into fully paid-up
equity shares of 10/- (Rupee Ten Only) each of the Company, on the terms and conditions
as provided under the Plan, in accordance with the provisions of the applicable laws and
regulations for the time being in force.
During the year under review, the Nomination and
Remuneration Committee approved a grant of 49,343 stock options to eligible employees of
the Company as per the terms and conditions of the Plan. No employee was granted stock
options equal to or exceeding 1% of the issued share capital of the Company. The Vesting
period for the stock options granted under the PSOP 2023 shall not be less than one year
and all the stock options would vest, based on the and conditions as detailed out in the
Plan. The statutory disclosures as mandated under the Act and SBEB&SE Regulations and
a certificate from the Secretarial Auditors, confirming implementation of the Plan in
accordance with SBEB&SE Regulations and shareholder's resolution have been hosted on
the website of the Company at https://www.tataelxsi.com/
investors/policies-and-disclosures and will be available for electronic inspection by the
Members during the AGM of the Company. Members desirous of inspecting the certificate, may
follow the procedure listed down in the Notes to the Notice of the Annual General Meeting.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 31, 2024, the Board of the Company comprised of
six Directors, with three Non-Executive Independent Directors, two Non-Executive
Non-Independent Directors and one Executive Director. The details of the Board composition
including the profile of the Directors are available in the Corporate Governance Report
section of the Annual Report.
The Board of the Company at its meeting held on April 03,
2024, based on the recommendation of Nomination and Remuneration committee, subject to the
approval of the Members of the Company, considered and approved the appointment of Ms.
Ashu Suyash (DIN: 00494515) and Mr. Soumitra Bhattacharya (DIN: 02783243) as Additional
Directors (Non-Executive Independent Directors) for a period of 5 (five) years
respectively, with effect from April 04, 2024 until April 03, 2029.
In accordance with Regulation 17(1C) of the Listing
Regulations, your Company has sought the approval of the shareholders through the Postal
Ballot vide Postal Ballot Notice dated April 23, 2024.
The profiles of Ms. Suyash and Mr. Bhattacharya are
available on the website of the Company at https://www.tataelxsi.com/board-of-directors.
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Ankur Verma,
Director retires by rotation and being eligible, offers himself for re-appointment.
During the year under review, five (5) Board meetings were
held on May 18, 2023, July 17, 2023, October 17, 2023, January 23, 2024 and March 22,
2024. Further details of the Board Meeting and Committee Meetings including the attendance
of the Directors are provided in the Corporate Governance Section of the Annual Report.
The calendar of meetings for FY 2023-24 had been circulated to all the Directors in
advance detailing the schedule of Board and Committee meetings during FY 2023-24.
Pursuant to the provisions of Section 149 of the Act, the
Independent Directors have submitted declarations that each of them meet the criteria of
independence as provided in Section 149(6) of the Act along with Rules framed thereunder
and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The
Directors have further confirmed that they are not debarred from holding the office of the
director under any SEBI order or any other such authority. During FY 2023-24, there here
has been no change in the circumstances affecting their status as Independent Directors of
the Company. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013, a
separate meeting of the Independent Directors was held on May 09, 2023.
During the year under review, the Non-Executive Directors
of the Company had no pecuniary relationship or transactions with the Company, other than
sitting fees, commission and reimbursement of expenses incurred by them for the purpose of
attending meetings of the Board/ Committee of the Company.
Pursuant to the provisions of Section 203 of the Act, the
Key Managerial Personnel of the Company as on March 31, 2024 are Mr. Manoj
Raghavan, Managing Director and CEO; Mr. Gaurav Bajaj, Chief Financial Officer and Ms.
Cauveri Sriram, Company Secretary & Compliance Officer.
9. 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 2023-24.
Accordingly, pursuant to Section 134(5) of the Companies
Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm
that: a. In the preparation of the annual accounts, the applicable accounting standards
had been followed along with proper explanations relating to material departures 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 for that
period c. The Directors had taken proper and sufficient care, for the maintenance of
adequate accounting records, in accordance with the provisions of the Companies Act 2013,
for safeguarding 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 the Company
and that such internal financial controls are adequate and were operating effectively 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 statement containing particulars of the top 10
employees and the employees drawing remuneration in excess of limits prescribed under
Section 197 (12) of the Act read with Rule 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 proviso to Section 136(1) of the Act, the Report and Accounts
are being sent to the Members excluding the aforesaid
Annexure. The said Statement is also open for inspection
through electronic mode 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.
The 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 is attached with this report as Annexure A.
11. PERFORMANCE EVALUATION
The Company has laid down a process for performance
evaluation of the Board and its Committees as well as a framework for evaluation of the
performance of each of the Directors. The evaluation criteria include inter alia,
structure of the Board, qualifications, experience and competency of Directors, diversity
in Board, effectiveness of the Board process, information and functioning, Board culture
and dynamics, quality of relationship between the Board and management, meetings of the
Board, including regularity and frequency, discussion and dissent, corporate culture and
values, governance and compliance, evaluation of risk amongst others. The criteria is
based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board
of India on January 05, 2017. The evaluation process is conducted and monitored by the
Chairperson, Nomination & Remuneration Committee (‘NRC') in consultation with the
members of the Committee. Upon the receipt of feedback from Directors, the Chairperson,
NRC conducts a one to one meeting with the Members. Thereafter, the Chairperson, NRC
briefs the Chairman of the Board on the outcome, which in subsequently discussed at the
Board meeting.
For the financial year 2023-24, the performance evaluation
has been conducted as per the process adopted by the Company, which is detailed out above.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Listing Regulations, a
separate section on Management Discussion and Analysis Report is annexed to this
Directors' Report.
13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO
The particulars pursuant to Section 134(m) of the Companies
Act, 2013 and read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is
attached with this report as Annexure B.
14. INTEGRATED REPORT
The Integrated Report of the Company is prepared in
accordance with the International Integrated Reporting (IR) framework published by the
Value Reporting Foundation (VRF) which reflects the integrated thinking of the Company and
its approach to its value creation. This report aims to provide a holistic view of the
Company's strategy, governance and performance, and how they work together to create value
over the short, medium and long term for our stakeholders. The narrative section of the
Integrated Report is guided by the Integrated Reporting (IR) framework outlined by the
International Integrated Reporting Council (IIRC).
15. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
(BRSR)
In terms of Regulation 34(2) (f) of SEBI (Listing
Obligations and Disclosures Requirements) Regulations, 2015 (‘Listing Regulations')
the Business Responsibility and Sustainability Report, in the prescribed format, forms an
Integral Part of the Annual Report. An assurance report on the sustainability disclosures
in the Business Responsibility and Sustainability Reporting for the financial year 2023-24
is a part of BRSR. This assurance report has been issue vide SEBI circular number
SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12 July 2023.
16. CORPORATE GOVERNANCE
In terms of Regulation 34(3) of the SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015, the Corporate Governance
Report, Management Discussion & Analysis Report, and the Auditors' Certificate
regarding Compliance to Corporate Governance requirements forms part of this Annual
Report.
17. CORPORATE SOCIAL RESPONSIBILITY
In line with Section 135 of the Companies Act, 2013 read
with applicable rules made thereunder, Corporate Social Responsibility (CSR) Committee has
been constituted for the purposes of recommending and monitoring the CSR initiatives of
the Company.
The Board, based on the recommendation of the CSR
Committee, has formulated and adopted a CSR Policy, in line with Section 135 of the
Companies Act, 2013 read with the applicable rules made thereunder, which is available on
the website of the Company at www.tataelxsi.com/ investors/policies-and-disclosures.
The CSR objectives are designed to serve societal, local
and national goals in the locations we operate, 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 (as
amended) including the reasons for not utilising the complete amount for CSR as approved
by the CSR Committee, is annexed as Annexure C. The details relating to the
composition of the CSR Committee is provided in the Corporate Governance Report, forming
part of the Annual Report.
18. RISK MANAGEMENT POLICY
The Board has adopted a Risk Management Policy to identify
and categorise various risks, implement measures to minimise impact of these risks where
it is deemed necessary and possible, and a process to monitor them on a regular basis
including to review and monitor the cyber security measure. Further details on the Risk
Management Framework is provided in the Corporate Governance Report, forming part of the
Annual Report.
19. DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and
as such, no amount on account of principal or interest on deposits from public was
outstanding as on the date of the Balance Sheet.
20. LOANS, INVESTMENTS AND GUARANTEES
There are no loans, guarantees and investments made by the
Company under Section 186 of the Companies Act, 2013 during the year under review.
21. AUDIT COMMITTEE
The Company has constituted an Audit Committee in
compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing
Regulations. The Composition of the Audit Committee in terms of Section 177(8) along with
its terms of reference incorporating its functions are disclosed and is available in the
Corporate Governance Report forming part of the Annual Report.
During FY 2023-24, there are no such instances where the
Board has not accepted the recommendations of the Audit Committee.
22. RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered during the
year under review were on an arm's length basis and in the ordinary course of business and
are in compliance with the applicable provisions of the Act and the Listing Regulations.
Pursuant to Section 188 of the Companies Act, 2013 read
with rules made thereunder read with Regulation 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, all material related party transactions
require prior approval of the shareholders of the Company vide ordinary resolution.
At the 34th Annual General Meeting of the
Company held on July 04, 2023, the Members of the Company had, inter alia, approved
Material RPTs of the Company with Jaguar Land Rover Limited ("JLR") for an
aggregate amount not exceeding 600 crores for the financial year 2023-24. Subsequent to
increased engagement with JLR and considering that value of transactions with JLR are
likely to exceed the limit approved at the 34th AGM, the Members of the Company
had, vide Postal Ballot Notice dated February 13, 2024 through remote e-voting, approved
the revision of the limit of the RPT with JLR to a maximum aggregated value of 675
crores for the financial year 2023-24. In compliance with Section (188) of the Companies
Act, 2013 read with applicable rules made thereunder and Regulation 23(4) of the Listing
Regulations, the Members of the Company had, vide Postal Ballot Notice dated February 13,
2024 through remote e-voting, accorded approval to enter into material related party
transactions with JLR for an aggregate value not exceeding of 1,000 crores during
financial year 2024-25.
The Company has formulated and adopted a policy on dealing
with related party transactions, in line with Regulation 23 of the Listing Regulations,
which is available on the website of the Company at https://www.tataelxsi.com/
investors/policies-and-disclosures.
As a part of the mandate under the Listing Regulations and
the terms of reference, the Audit Committee undertakes quarterly review of related party
transactions entered into by the Company with its related parties. Pursuant to Regulation
23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section
177 of the Companies Act, 2013, the Audit Committee has granted omnibus approval in
respect of transactions which are repetitive in nature, which may or may not be foreseen,
not exceeding the limits specified thereunder. The transactions under the purview of
omnibus approval are reviewed on quarterly basis by the Audit Committee.
Pursuant to clause (h) of sub-section (3) of Section 134 of
the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of contracts /
arrangements entered with related parties in prescribed Form AOC-2, is enclosed with this
Report as Annexure D.
23. AUDITORS
23.1. STATUTORY AUDITORS AND THEIR REPORT
The Members of the Company at the 33rd AGM held
on June 23, 2022, approved the appointment of M/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 from the conclusion of the 33rd
AGM, until the conclusion of the 38th AGM of the Company to be held in 2027.
The report issued by Statutory Auditors for financial year
2023-24 does not contain any qualifications or adverse remarks. The Statutory Auditors
have not reported any no frauds under Section 143(12) of the Companies Act, 2013.
23.2. SECRETARIAL AUDIT AND REPORT
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 Parthasarathy of M/s. Jayashree Parthasarathy
& Co., Company Secretary in practice, was appointed to undertake the Secretarial Audit
for financial year 2023-24.
The Report of the Secretarial Auditor along with the
certificate of non-disqualification of Directors for the year ended March 31, 2024 is
annexed to the Directors' Report as Annexure E. The report issued by Secretarial
Auditor for financial year 2023-24 does not contain any
qualifications or adverse remarks.
24. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Act and Rule 12 of the
Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2023-24 is
available on Company's website at https://www.tataelxsi.com/investors/ policies-
and-disclosures.
25. VIGIL MECHANISM
Your 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 inter alia
provides safeguards against victimisation 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. is available on Company's website at
https://www.tataelxsi.com/investors/policies- and-disclosures.
The said policy has been posted on our intranet where all
the employees have access. The Company conducts ‘Policies Awareness Campaign'
regularly for its employees at its various centres and the WBP features in these
campaigns.
26. COST RECORDS
Considering the services rendered by the Company, the
Central Government has not prescribed maintenance of cost records under sub-section (1) of
section 148 of the Companies Act, 2013.
27. 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 the Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for
prevention and redressal of complaints under the above Act. The Company has constituted an
Internal Complaints Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. Four (4) complaints were received by
the local Internal Complaints Committee during the year under review, and three complaints
have been redressed as on March 31, 2024. The investigation pertaining to the pending
complaint has been completed and grievance has been redressed as on the date of the Annual
Report, in accordance with the Policy adopted by the Company and provisions of the Sexual
Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.
28. OTHERS
There are no material changes and commitments affecting
the Company's financial position between the end of the financial year to which this
financial statement relates and the date of this report.
There are no significant and material orders passed by
the regulators or courts or tribunals impacting the going concern status and Company's
operations in future.
The details regarding remittance of Unclaimed Dividend
to Investors' Education & Protection Fund (IEPF) for financial year 2016-17 and
thereafter in terms of Section 125 of the Companies Act, 2013 are disclosed and is
available in the Corporate Governance Report forming part of the Annual Report.
29. SECRETARIAL STANDARDS
Your Company has devised proper systems to ensure
compliance with the provisions of all applicable Secretarial Standards issued by the
Institute of Company Secretaries of India and that such systems are adequate and operating
effectively.
30. ACKNOWLEDGEMENTS
Your Directors wish to thank employees, customers,
partners, suppliers, and above all, our shareholders and investors for their continued
support and co-operati\on.
| For and on behalf of the Board |
| N. G. Subramaniam |
| Chairman |
| Bengaluru, April 23, 2024 |
|