1. Your Directors are pleased to present the Thirty Fourth Annual Report on the
business and operations of the Company along with the Audited standalone financial
statements for the financial year ended March 31, 2023.
2. FINANCIAL SUMMARY
The highlights of financial performance on standalone basis, for the year ended March
31, 2023, are summarised hereunder:
3. DIVIDEND
The Board of Directors are pleased to recommend a final dividend of 606% ('60.60 per
share), subject to tax, for the financial year ended March 31, 2023, on 6,22,76,440 equity
shares of Rs.10/- each fully paid-up, in comparison to 425% ('42.50 per share) on
6,22,76,440 equity shares of Rs.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 Tuesday, July 04, 2023. If
approved, this will involve an outflow of '377.4 crores, compared to '264.69 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.
4. TRANSFER TO RESERVES
Your Directors have approved a transfer of Rs.10 crores to the General Reserves for the
year ended March 31, 2023, as against an amount of Rs.10 crores transferred in the
previous year.
5. REVIEW OF OPERATIONS AND PERFORMANCE
The total income during the year under review increased by 27.96% from '2,515.33 crores
in the previous year to '3,218.53 crores. The Profit Before Tax (PBT) was '937.50 crores
as against '745.48 crores in the previous year. The Profit After Tax (PAT) was '755.19
crores against '549.67 crores in the previous year.
6. SHARE CAPITAL
As on March 31, 2023, the authorised share capital of the Company consisted of
7,00,00,000 equity shares of Rs.10 each, and the paid-up equity share capital as on March
31, 2023, consisted of 6,22,76,440 equity shares of Rs.10 each. During FY 2022-23, the
Company has not issued any shares, securities / instruments convertible into equity
shares, sweat equity shares and shares with differential voting rights.
During FY 2022-23, the Company had sought approval of the Members through Postal Ballot
Notice dated January 25, 2023 for the adoption and implementation of the Tata Elxsi
Limited Performance Stock Option Plan 2023 (hereinafter referred to as "PSOP
2023" or "the Plan") for grant of 3,11,000 Performance Stock Options to the
eligible employees of the Company. The Members, vide special resolution passed through
Postal Ballot on March 04, 2023, approved the adoption and implementation of PSOP 2023.
PSOP 2023 seeks to drive long-term performance, retain key talent, and to provide an
opportunity for the employees to participate in the growth 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"). The Nomination and Remuneration
Committee ("NRC") administers the Plan and functions as the Compensation
Committee for the purposes of SBEB&SE Regulations.
In compliance with the requirements of the SBEB&SE Regulations, a certificate from
Secretarial Auditors, confirming the implementation of the Plan in compliance with the
SBEB&SE Regulations and shareholder’s resolution, 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. During the year under review, there have been no
grants made by the Company to any of the eligible employees of the Company. The eligible
employees shall be granted Performance Stock Options (PSOP), as determined by the
Nomination and Remuneration Committee of the Board, which will vest as per the approved
vesting schedule and are be exercisable into fully paid-up equity shares of Rs.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, no grants were made to eligible employees of the
Company.
The statutory disclosures as mandated under the Act and SBEB&SE Regulation and a
certificate from Secretarial Auditors, confirming implementation of the Scheme in
accordance with SBEB&SE Regulations and shareholder’s resolution have been hosted
on the website of the Company at https://tataelxsi.com/investors/
policies-and-disclosures.
7. 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.
Directors and Key Managerial Personnel
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. N Ganapathy
Subramaniam, Director retires by rotation and being eligible, offers himself for
re-appointment. During the year, and under the approval granted by the Members at the 33rd
Annual General Meeting of the Company, Mr. Manoj Raghavan was re-appointed as the Chief
Executive Officer and Managing Director of the Company for a further period of five years
with effect from October 02, 2022, up to October 01, 2027.
During the year under review, five (5) Board meetings were held. The details of the
Board Meeting / Committee Meetings and the attendance of the Directors are provided in the
Corporate Governance Section of the Annual Report. The calendar of meetings for FY 2022-23
had been circulated to all the directors detailing the schedule of Board and Committee
meetings during FY 2022-23.
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 2022-23, 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 seperate
meeting of the Independent Directors was held on April 18, 2022.
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, 2023 are Mr. Manoj Raghavan, Managing Director and CEO; Mr.
Gaurav Bajaj, Chief Financial Officer and Ms. Cauveri Sriram, Company Secretary &
Compliance Officer.
8. 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 2022-23.
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.
9. 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.
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:
*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/(decrease) in the median remuneration of employees in the
financial year: (11.12%)
During the year, the Company onboarded significant number of freshers which resulted in
decrease of overall median remuneration.
(iv) The number of permanent employees on the rolls of the Company: 11,254
(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 FY
2022-23 was 9.1%. The percentage increase/(decrease) in the managerial remuneration for
the year was 20%
(vi) The Company hereby affirms 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 matters related to
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/investors/policies-
and-disclosures.
10. 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.
11. 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.
12. 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.
13. 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) is annexed as Annexure
B. The details relating to the composition of the CSR Committee is provided in the
Corporate Governance Report, forming part of the Annual Report.
14. 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.
15. 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.
16. 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. 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 Members at
the 32nd AGM for transactions with Jaguar 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 '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 approval
granted by the Members through postal ballot on February 26, 2022, from '250 crores per
annum for each of the financial years 2021-22 and 2022-23, to up to a maximum aggregate
value of '325 crores per annum for the financial year 2021-22 and '450 crores per annum
for the financial year 2022-23 for related party transactions with Jaguar Land Rover
Limited.
The Company proposes to enter into material related party transactions with Jaguar Land
Rover Limited during FY 2023-24, for which the approval of Members is sought at this
Annual General Meeting, 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 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 C.
17. 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, 2023 is annexed to the Directors’ Report as Annexure D.
18. 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 2022-23 is available on
Company’s website at https://www.tataelxsi.com/investors/policies- and-disclosures.
19. 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. Three (3) 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.
20. 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. 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.
21. OTHERS
There are no loans, guarantees and investments made by the Company under Section 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 2015-16 is due for remittance
to Investors’ Education & Protection Fund (IEPF) on August 30, 2023 in terms of
Section 125 of the Companies Act, 2013.
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) is disclosed and is available in the Corporate
Governance Report forming part of the Annual Report. During FY 2022-23, there are no such
instances where the Board has not accepted the recommendations of the Audit Committee.
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.
There are no frauds reported by the Auditors under Section 143(12) of the Companies
Act, 2013. 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.
22. AUDITORS
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.
23. 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 5,
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 FY 2022-23, the performance evaluation has been conducted as per the process
adopted by the Company, which is detailed out above.
24. 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.
25. 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,
May 18, 2023.
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