Tata Elxsi Ltd
Chairman Speech
Dear Stakeholders,
As I write this letter, I’m filled with pride for Tata Elxsi. Despite the current
backdrop of geopolitical unrest and the pandemic, we progressed considerably in 2021-22.
We swiftly adopted newer working methods and offered our team more flexibility,
emphasising on their health and well-being. The pandemic helped us realise how robust our
technology is, as we completed our turnaround, met our targets, and rose above the
challenges to start the year on a strong footing.
The 2021-22 proved to be a busy year for Tata Elxsi as we witnessed overall growth
across industries and key geographies and continued to execute strongly on both the top
line and bottom line. Our differentiated offerings and design-led approach have helped us
achieve the strongest growth in the Company’s history. We grew our revenues, profit,
margins, cash generation and returns on capital during 2021-22 with operating revenue of
Rs. 2,471 crores.
OPERATIONS
Our Healthcare business continued to grow strongly, while both Transportation and Media
and Communications reported another year of sustained growth. We also witnessed a
sustained recovery in the automotive market as we won strategic deals with both OEMs and
suppliers in EV and autonomous technologies, highlighting our technology and engineering
leadership. Our strategic deals in digital health, OTT, and video platform deployment
reflect our ability to support customers’ product and technology transformation
agendas in our key verticals.
I am pleased to share that your Company has won the OTT TV Technology of the Year Award
at the VideoTech Innovation Awards 2021 for QoEtient – the proactive QoE Improvement
platform. This is the first international award bagged by QoEtient.
Your Company also won the NASSCOM Engineering & Innovation Excellence Awards 2021
for Engineering Service Providers across all product categories. This testifies our
ability to bring design and technology together, highlighting our leadership in each
vertical we operate in.
OUR STRATEGY
We are focused on application areas that are expected to experience solid growth,
driven by broad and long-term trends in digital technology. These trends require enablers
– autonomous systems, robotics, securely connected machines and personal devices,
digitalisation and electrification of automobiles and infrastructure, advanced
communications equipment and networks and connected healthcare platforms. Tata Elxsi is
one of the leading players in these technology areas, helping its customers in development
of new products and services.
PRODUC PARTNERSHIPS & ALLIANCES TS,
In order to establish ourselves as a niche player in advanced technologies with the
ability to scale and build efficiencies, we have expanded our portfolio of patents and IP
solutions across industry segments. Our investments in IPs such as TEPlay, FalconEye, iCX,
QoEtient, and Autonomai testify to our strong focus on delivering digital engineering-led
transformation for our clientele. We have also been actively building partnerships and
alliances with leading companies globally to bring the best value proposition to our
customers. Our joint go-to-market initiatives have helped us quickly bring market-aligned
solutions to our customers.
SUSTAINABILITY
We take great pride in our commitment to being a good corporate citizen and creating a
positive impact for the communities we serve and the world. In line with this, your
Company has committed itself to ambitious goals of halving its carbon footprint by 2025
and achieving 100% carbon neutrality by 2030. In line with our mission, we strive to
create and innovate sustainability-led products and services that will help us deliver
purpose-led transformative solutions to our customers.
EMPLOYEE ENGAGEMENT AND WELLBEING
During the pandemic, we have expanded our employee engagement in Health & Safety to
include several new measures to counter stress and fatigue. These measures include access
to external counselling, updating insurance policies, and flexible work options. We have
also tied up with leading providers to ensure the health & well-being of our
employees.
I take this opportunity to extend my gratitude to our management team, staff, and
business associates for their commitment and contribution towards Tata Elxsi.
LOOKING AHEAD
It is a privilege to pursue our passion for creating a better world by integrating our
capabilities. We will remain focused on long-term growth which is the ultimate measure to
generate value. To achieve this, we will invest in strengthening our competitive
advantages, be disciplined in capital allocation and stay diligent in our pursuit of
efficiencies. We firmly believe that when our employees, customers, communities, and
shareholders win, we win with them.
I take this opportunity to also record my appreciation for my fellow directors for
guiding the Company in these challenging times.
I am pleased to inform you that your Board of Directors has recommended a final
dividend of 425% i.e. Rs. 42.50 per share, subject to tax, for your consideration.
Last but not the least, on behalf of the entire Board of Directors and the management
team, I would like to thank you for your continued trust, guidance and support.
Yours Sincerely,
N G Subramaniam
Tata Elxsi Ltd
Directors Reports
1. Y our Directors are pleased to present the Thirty Third Annual Report on the
business and operations of the Company along with the Audited Statements of Accounts for
the financial year ended March 31, 2022.
2. Result of Operations - Extract
Rs. In crores
|
FY 2021-22 |
FY 2020-21 |
| Revenue from operations |
2,471 |
1,826 |
| Other income( Net) |
44 |
40 |
| Total Income |
2,515 |
1,866 |
| 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 |
1,194 |
942 |
| Less: Dividend |
299 |
103 |
| Transfer to General Reserve |
10 |
10 |
| Balance Profit carried to Balance Sheet |
1,432 |
1,194 |
3. Dividend
Your Directors recommend for your approval, a final dividend of 425% (Rs. 42.50 per
share), subject to tax for the year ended March 31, 2022, on 6,22,76,440 equity shares of
Rs. 10/- each fully paid-up, compared to 480% (Rs. 48/- per share) on 6,22,76,440 equity
shares 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 the
previous year. The Company’s Dividend Distribution Policy (DDP) is available in the
Investors 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 for
the year ended March 31, 2022, as against an amount of Rs. 10 crores transferred in the
previous year.
5. Review of Operations
The total income during the year under review increased by 34.8% from Rs. 1,866 crores
in the previous year to Rs. 2,515 crores. The Profit Before Tax (PBT) was Rs. 745 crores
against Rs. 512 crores in the previous year. The Profit After Tax (PAT) was Rs. 547 crores
against Rs. 365 crores in the previous year.
6. Management Discussion and Analysis is included as Annexure B to the
Directors’ Report Directors and Key Managerial Personnel
Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. Ankur Verma
retires by rotation and being eligible, offers himself for re-appointment.
The Board on the recommendation of the Nomination Remuneration Committee has appointed
Mr. Gaurav Bajaj as the Chief Financial Officer and KMP of the Company, with effect from
August 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 the
Nomination 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 well
attended by the Directors. The calendar of meetings for the year 2021-22 had been
circulated to all the Directors detailing the schedule of Board and Committee meetings
during 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 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"). During the year
21-22, there 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 the Independent Directors had a separate meeting on April 21,
2021.
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, 2022 are Mr. Manoj
Raghavan, M.D and CEO Mr. Gaurav Bajaj, Chief Financial Officer and Ms. Cauveri Sriram,
Company Secretary & Compliance Officer.
7. 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 2021-22.
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 and
loss 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.
8. 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 shareholders
excluding the aforesaid Annexure. The said Statement is also open for inspection at the
Registered 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 are
provided as under:
(i) The ratio of the remuneration of each Director to the median remuneration of the
employees 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 towards
commission to the Non-Executive Directors of the Company, who are in full-time employment
with any other Tata company and hence not stated.
^ Since the remuneration is only for part of the year, the ratio of their remuneration
to median remuneration and percentage increase in remuneration is not comparable and hence
not stated
(ii) Percentage increase in the remuneration of the Directors and KMPs for the
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* |
- |
| 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 towards
commission to the Non-Executive Directors of the Company, who are in full-time employment
with any other Tata company and hence not stated.
^ Since the remuneration is only for part of the year, the ratio of their remuneration
to median remuneration and percentage increase in remuneration is not comparable and
hence, not stated
(ii) Percentage increase in the remuneration of the Directors and KMPs for the
financial year.
(iii) The percentage increase in the median remuneration of employees in the financial
year: 10%
(iv) The number of permanent employees on the rolls of the company: 9,376 (including
consultants)
(v) Average percentile increase already made in the salaries of employees other than
the managerial personnel in the last financial year and its comparison with the percentile
increase in the managerial remuneration and justification thereof and point out if there
are any exceptional circumstances for increase in the managerial remuneration: The average
increase 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 policy
of the company, which was adopted by the Board and is also laid out in the Charter for the
Nomination & Remuneration Committee (NRC). The Policy covers the Policy on
remuneration to the Managing Director, Key Managerial Personnel and other officers. The
Charter lays down the rights, roles and responsibilities of the NRC.
A Policy on Board diversity and Governance Guidelines have also been adopted by the
Board, on the recommendation of NRC. The Guidelines lay down the following: Composition
and Role of the Board (Role of the Chairman, Directors, size of the Board, Managing
Director, Executive Director, Non-Executive Directors, Independent Directors, their term,
tenure and directorship) Board appointment Directors’ Remuneration
(Guided by the Remuneration Policy) Subsidiary Oversight
Code of Conduct (Managing Director, Executive Director, Non-Executive Directors,
Independent Directors) Board effectiveness review Mandate of the Board
Committee 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 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-A.
10. Business Responsibility Report (BRR)
In terms of Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosures
Requirements) Regulations, 2015 (‘Listing Regulations’) the Business
Responsibility Report forms part of the Annual Report.
11. 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. More details are provided in the Management Discussion
and Analysis and Corporate Governance Report.
12. Corporate Social Responsibility
Corporate Social Responsibility (CSR) Committee has been constituted for 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 www.tataelxsi. com/corporatesocial-responsibility.
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 is annexed as Annexure-B. The
detail of the CSR Committee and its composition is given in section-7 of the 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, Management
Discussion & Analysis, and the Auditors’ Certificate regarding Compliance to
Corporate 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 an
arm’s length basis and in the ordinary course of business and is in compliance with
the applicable provisions of the Act and the Listing Regulations.
In terms of Section 188 of the Act and other applicable provisions, if any, read with
Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended till
date and Regulation 23(4) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), the Company had sought the approval of shareholders at the 32nd AGM
for transactions with Jaquar Land Rover Limited, a related party within the meaning of
Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, for providing
Automotive Design & Engineering support, up to a maximum aggregate value of Rs. 250
crores 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 dated
December 17, 2021 from Rs. 250 crores per annum for each of the financial years 2021-22
and 2022-23, to up to a maximum aggregate value of Rs.325 crores per annum for the
financial year 2021-22 and Rs. 450 crores per annum for the financial year 2022-23
for 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. Jayashree
Parthasarathy of M/s Jayashree Parthasarathy
& Co, a Company Secretary-in-Practice, was appointed to undertake the Secretarial
Audit. The Report of the Secretarial Auditor along with the certificate of
non-disqualification of Directors for the year ended March 31, 2022 is annexed to the
Directors’ Report as Annexure - C.
16. Extract of annual return
In terms of the Companies Act, 2013 as amended, the Annual Return is available on
www.tataelxsi. com/AnnualReturn.
17. 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. 3 (three) complaints were received by the local Internal
Complaints Committee during the year under review, the same has been redressed to the
satisfaction of the complainant.
18. Vigil Mechanism
Your Company has established a "VigilMechanism" 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 interalia 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. 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 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 the
Companies Act, 2013 during the year under review. Your Company has neither accepted nor
renewed any deposit during the year under review. 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. The
Unclaimed Dividend in respect to the financial year 2014-15 is due for remittance to
Investors’ Education & Protection Fund (IEPF) on August 30, 2022 in terms of
Section 125 of the Companies Act, 2013.
Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016, the Company has during the year transferred 18,420 equity shares pertaining to those
shareholders who have not claimed their dividend for 7 consecutive years since 2014, to
the IEPF account on October 22, 2021.
20. Auditors
Members of the Company at the AGM held on July 27, 2017, 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 28th AGM, until the conclusion of the 33rd AGM of the Company to be
held in 2022.
The Board approved the re-appointment of M/s BSR & Co. LLP, Chartered Accountants
based on the recommendations of the Audit Committee and the same is subject to the
approval of the Members of the Company.
The necessary resolutions for re-appointments of M/s BSR & Co. LLP form part of the
notice convening the 33rd AGM of the Company.
21. Acknowledgements
Your Directors wish to thank employees, customers, partners, suppliers, and above all,
our 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