18th Annual Report 2011-12
Better products benefit people - that is our business
VISION
We are determined to be the world’s number one
partner to the manufacturing industry.
MISSION
Better products benefit people - that is our business.
PURPOSE
We help ambitious manufacturers
create better products.
VALUES
• Better & Better
• Customer Delight
• One Team
• Honest & Straightforward
• Commitment to Community
Letter to Shareholders
II
Letter from the COO
IV
Management Team
VII
Redefining our brand, showcasing our capabilities
IX
Helping racing legends be their best
XIII
The Concept of Passionate Fun Loving Engineers or PFLE’s
XVI
Corporate Sustainability
XIX
Board of Directors
XXIII
Notice
1
Directors’ Report
4
Management Discussion & Analysis (MD&A)
13
Corporate Governance Report
44
Auditors’ Report
57
Balance Sheet
60
Profit and Loss Account
61
Cash Flow Statement
62
Notes forming part of financial statements
63
Consolidated Accounts
Auditors’ Report
89
Balance Sheet
90
Profit & Loss Account
91
Cash Flow Statement
92
Notes forming part of financial statements
93
Statements on Subsidiary Companies
121
Frequently Asked Questions
123
Attendance Slip / Proxy
This report and financial statements contained herein have been prepared in compliance with the requirements of the Companies Act, 1956 and
Indian Generally Accepted Accounting Principles (GAAP). The preparation of financial statements requires management to make estimates and
assumptions which affect the reported amounts of income and expenses of the period, assets and liabilities, as of the date of the financial
statements. The estimates and judgements relating to the financial statements have been made on a prudent and reasonable basis, so that the
financial statements reflect in a true and fair manner, the form and substance of transactions.
Historical Performance
Return on Equity
Return on Capital Employed
40.00%
34.12%
Return on Equity %
35.00%
30.00%
33.38%
26.41%
25.00%
18.63%
20.00%
15.00%
10.00%
8.46%
Return on Capital Employed %
35.00%
26.45%
25.00%
20.96%
20.00%
16.74%
15.00%
10.94%
10.00%
5.00%
5.00%
0.00%
29.51%
30.00%
2007-08
2008-09
2009-10
2010-11
0.00%
2011-12
2007-08
Revenue
2010-11
2011-12
1,667
1,600
1,268
1,241
1,100
300
Offshore Revenue (` Crore)
1,400
Revenue (` Crore)
2009-10
Offshore Revenue
1,800
1,200
2008-09
1,098
1,000
800
600
400
257
250
200
155
150
103
91
100
39
50
200
2007-08
2007-08
2008-09
2009-10
2010-11
2008-09
2009-10
2010-11
2011-12
2011-12
** Revenue generated by Offshore Delivery Centers
EBITDA
Profit after Tax
350
305
250
300
208
Profit after Tax (` Crore)
EBITDA (` Crore)
250
206
200
153
150
100
120
77
200
150
139
91
100
50
66
30
50
2007-08
2008-09
2009-10
2010-11
2011-12
2007-08
Earnings Per Share
EPS (`)
37.15
24.33
30
17.59
20
8.23
10
I
2007-08
2008-09
2009-10
2010-11
2011-12
Cash & Cash Equivalents (` Crore)
49.15
40
2009-10
2010-11
2011-12
Cash & Cash Equivalents
60
50
2008-09
700
609
600
500
400
284
300
193
200
100
00
123
77
2007-08
2008-09
2009-10
2010-11
2011-12
Letter to Shareholders
Dear Fellow Investors,
You may be pleased to know that your Company, once
again, posted record earnings per share, profit after tax
and free cash flow. Our year-on-year growth in revenue,
EBITDA and profit after tax on a standalone basis are
32%, 39% and 35%, respectively, and on a consolidated
basis are 31%, 48% and 50%, respectively.
Our consolidated profit after tax improved to a record
Rs. 208 crores at a margin of 12.5%, up from 11% last year.
We generated record cash flows from operations of
Rs. 246 crores during the year, bringing our cash and cash
equivalents balances to Rs. 609 crores. We improved our
Return on Human Capital by 14%. We continue to
operate and govern ourselves, to the degree we can, like
any listed public company.
To take this further, the board instituted quarterly
interim dividends. For the year under review, the board
proposes increasing the overall dividend pay-out to a
record 160%, i.e. a dividend of Rs. 16 per share (Rs. 9
interim + Rs. 7 final), an improvement of 33% over last
year’s pay-out.
“ The year was one of
innovation and growth,
delivering record revenue,
profit, earnings per share
and cash while innovating
transformational products.”
How did we achieve these results? How are we
innovating to meet the needs of future markets? How are
we contributing to the communities we serve? And what
are our key challenges for 2012-13?
We expanded delivery capacity to increase offshore
revenue by 66%. For the first time, we are now operating
from a Special Economic Zone (SEZ) called Blue Ridge,
near our campus in Hinjawadi. We have 569 engineers
and IT professionals based there, providing services to
key OEMs outside India. We also expanded capabilities in
our existing facilities in Bangalore and Bangkok.
We have now instituted a cross functional Employee
Experience Leadership Team (EeLT) to enhance every
employee’s experience and growth within the Company.
EeLT comprises leaders from delivery, sales, human
resources and finance. It drives improved business
performance and employee engagement through a set
of formal initiatives measured by improvement in return
on human capital (ROHC).
We are pleased to announce that our COO, Warren Harris,
has completed the Harvard Advanced Management
Program (AMP). Almost 1,466 of our professionals
completed e-learning courses from Harvard. The senior
leadership team also underwent formal assessment by
an external agency to help us with career planning and
creation of development programs. All this is part of our
effort to strengthen the senior leadership team’s
capabilities in an ever-challenging global business
environment.
Eighteenth Annual Report 2011-12
II
We enhanced our SAP IT system to allow us to implement
scalable robust HR processes. Employees and managers
across the globe now interact with the system through a
self-service portal. We will continue to enhance these
systems as we move forward.
Better Innovation
Expanding our Better Innovation offering i.e. the
application of frugal engineering and lean design to
create breakthrough products, we challenged ourselves
to design and engineer a fuel-efficient, environmentallyfriendly, street-legal, electric car that can comfortably
and safely accommodate a family of four. The result,
called eMO for Electric MObility, debuted at the Detroit
North American International Automotive Show. I often
struggle to find good examples of your Company’s work,
as most are client confidential and cannot be disclosed.
So this time, I am especially happy to present eMO. As you
learn more from this report, www.betterinnovation.com
and from outside reports, you can get an appreciation of
the work your Company does and its growth in capability
that go far beyond the technical services for which we
are known.
In the year under review, we enhanced our position in
automotive, industrial machinery and aerospace sectors
growing key accounts and adding new logos. Our
customers continued to benefit through the application
of frugal engineering and lean design to create
breakthrough products. Our enterprise solutions team
helped customers realize value through optimized ERP,
supply chain and customer relationship management
systems.
Your Company continued to file patents in Engineering &
Design and Product Lifecycle Management. You may
enjoy reading more about some of these achievements
in the Management Discussion and Analysis section of
this Annual Report.
Corporate Sustainability
Your Company continued to create jobs - up 10% in NA,
22% in UK and 19% in Asia Pacific. As part of our DNA we
are committed to improve the quality of life in the
communities we operate. From our earliest days, we
create jobs and hire in the communities we operate. To
help improve the number of qualified engineering
graduates, our program called “Ready Engineer™”, is
expanding to the UK and then to the US. This program is
staffed by subject matter experts from Tata
Technologies. Students in the Ready Engineer™
program receive training on-line via iGET IT ®,
www.myigetit.com, and in the classroom from Tata
Technologies volunteers.
Despite their work pressures, our employees across the
world engage in a lot of volunteer work, social causes
and programs - from planting trees to donating blood,
supporting shelters for the homeless, Jeans Friday,
III
Running for Hope and First Book, to name a few.
Challenges for 2012-13
Externally, there are uncertainties regarding the US
presidential elections and the economic situation in
Europe. This may bring increased emotion and possible
limitations to offshoring. Volatility in the EU may limit the
ability of our customers to commit to projects.
Internally, we have ambitious growth targets. We are reengineering our sales force to be able to improve the
identification of customers and projects where we can
deliver long-term value. There is a global shortage of
engineering talent. We need to continue to develop
senior leaders through our Talent Pool program.We need
to automate more of our internal processes so we can
scale up efficiently. These changes to accommodate our
growth are challenging. We have faced challenges
before. I have no doubt that we will succeed.
In Summary
Your Company has delivered solid growth, record
earnings per share and generated record cash. Our
program called Better Innovation creates even more
exciting products. We continue to move up the value
chain, utilize more of your Company’s own intellectual
property in our solutions and develop skills faster.
Five years ago, on 31 March 2007, the first full year of
operations following the acquisition of INCAT, we ended
with consolidated earnings per share (EPS) of Rs. 4.6 per
share. Today our EPS has grown, even after taking
additional capital, to Rs. 49.29 per share, a growth of 11
times in 5 years. Thus your Company delivered a five year
compounded annual earnings growth of 61% on per
share basis. In the same period, the Sensex 30 companies
grew their per share earnings by 12% on a compounded
basis.
I hope you will join me in thanking the 5,443 dedicated
men and women who make up the Tata Technologies
family. They are the ones responsible for our
achievements and I am sure you will join me in
appreciating their efforts.
I thank you for your continuing trust and support and I
look forward to seeing you at the AGM, interacting with
you and hearing any valuable suggestions you may have
to help your Company become better and more
profitable.
Patrick McGoldrick
CEO & Managing Director
15th May 2012
Letter from the COO
Dear Shareholders,
Five years ago, we set about transforming our business to
create a more high-growth, proactive, and innovative
Tata Technologies. Those efforts delivered significant
progress and we built an integrated global company
with fully aligned sales, marketing, and delivery
functions. Additionally, we built a comprehensive global
delivery capability that offers clients, skills and resources
wherever they operate, with access to capacity in
geographies with scale and competitive price points. We
also balanced our portfolio of services around three lines
of business: Engineering, Product Lifecycle Management
and Enterprise IT Services.
As I write to you today, we have undertaken a bold,
ambitious challenge – to, within the next five years,
achieve $1 billion in revenue and position Tata
Technologies as the number-one engineering services
organization in the world. We are moving forward with
this plan under the banner, “One To Win.” Because of our
previous work in aligning and balancing the
organization worldwide, a palpable sense of
commitment, as well as a spirit of achievement
permeates the organization as we move together
toward these lofty – but eminently achievable – goals.
points to a record 18.3%. Over the past five years,
our operating margins have improved by 1268 basis
points.
•
PAT that has increased 11fold in that same period
•
A strengthened balance sheet reflecting a cash &
cash equivalents balance of $120Mn, up from
$64Mn for the previous year
While we are very proud of our results in fiscal 2012, we
will continue to sharpen the execution of our growth
strategy, which will be particularly important given the
uncertain global economic outlook.
Of course, our top priority remains our clients-and
helping them achieve high performance. The caliber of
our clients, who include many of the best automotive,
aerospace and industrial machinery companies globally,
together with the depth and longevity of our
relationships with them, are key differentiators for Tata
Technologies and speak of our ability to deliver real
business value year after year. We are proud that our top
five clients in fiscal 2012 have been clients for at least ten
years.
Today, Tata Technologies is delivering outstanding
financial and operational performance with steady
improvements to operating margins and free cash flow.
We increased profitability by fine-tuning operations,
skillfully managing expenses, and improving our cost
structure.
Fiscal 2012 was a year of strong growth and continued
momentum in our business. We focused on the
execution of an aggressive growth agenda, and our
results demonstrate that we performed extremely well.
We achieved strong topline and bottom-line growth,
meeting or exceeding-in some cases significantly-all
elements of our original fiscal 2012 annual financial
budget. Specifically, we posted:
•
Our highest-ever annual revenues, of $348 million,
an increase of 25percent in US dollar terms
•
Improvement in operating margins by 206 basis
Eighteenth Annual Report 2011-12
IV
In fiscal 2012, we continued to attract new clients and
expand relationships with existing clients. For example,
we are helping
•
a North American automotive OEM to migrate its
digital design data from a legacy product lifecycle
management (PLM) system to its next generation
platform;
•
Tara Aerospace Systems – a JV between Tata
Advanced Systems, Sikorsky Aircraft and Nova
Integrated Systems (a Tata enterprise), to
manufacture the S-92® helicopter cabin for Sikorsky
in India;
•
Carnegie Mellon University to develop and teach a
graduate level course on product design using our
proprietary knowledge management platform
iGET IT®;
•
a North American industrial machinery company
apply frugal engineering principles to its product
portfolio for the emerging markets and
•
establish an Offshore Simulation Center (OSC) for a
Scandinavian construction equipment
manufacturer at a new facility in Bangalore.
Our focus is on helping clients address critical business
trends, such as globalization, product development
productivity and capacity, innovation and operational
excellence, while serving the full spectrum of their
needs.
Our success in fiscal 2012 was due in large part to the
focused execution of our growth strategy-which is about
driving sustainable and profitable growth through
Industry differentiation, technology leadership and
building scale.
We continued to invest to serve all industries; but we
prioritized our investments where we saw specific
opportunities to separate ourselves from our
competitors. For instance, in FY 2012, your company
established itself as a world leader in the full vehicle
development space, with the worldwide unveiling of
eMO, our groundbreaking EV study, at the North
American International Auto Show in Detroit, in January
of this year. This was a landmark moment for your
company and a coming of age of Indian engineering,
establishing Tata Technologies as the only India-based
engineering services organization capable of delivering
a full vehicle program such as this.
Additionally, our Vehicle Programs & Development
Group has won, or has underway, multiple full-vehicle
programs – and is providing innovative, cost-effective
and environmentally sound automotive solutions to
global automotive OEMs ranging from premium brands
to entrepreneurial organizations aiming at niche
markets. Our entry into the industrial machinery sector
was quickly validated when we won additional projects
V
from a North American equipment manufacturer,
including a tear-down and benchmarking project in
China jointly delivered onsite by our team members
from Singapore, India and North America.
In fiscal 2012, we continued to expand our capabilities
and offerings across a broad range of Product Lifecycle
Management (PLM) and enterprise IT platforms. We fully
certified 4 and partially certified 18 engineers in Dassault
Systèmes’ next generation CATIA® and ENOVIA® V6
platforms. We have also launched a dedicated 120 seat
Customer Relationship Management (CRM) Delivery
Center in Thane, India, as part of an aggressive ramp-up
that we are planning in this area.
In fiscal 2012, we expanded our workforce, growing our
headcount by 18 percent, to 5443 people. To
accommodate these additions we have invested heavily
in delivery and service infrastructure by opening an allnew 550+ seat Delivery Center in Pune and launching a
75-seat Delivery Center in Bangalore.
And we invested significantly in the training and
professional development of our people to ensure that
all of our employees have the necessary skills to serve
our clients at the highest level. For instance we launched
an online soft skills learning program – iSMART – in
partnership with Harvard, to make career-enhancing
training available to our employees in a convenient
format. This fiscal year we will also graduate the second
batch from our Talent Pool program to further enhance
the leadership bandwidth in our company. Already, 25
future leaders have graduated from this program, and
most of them have been assigned to new positions of
responsibility that are intended to prepare them for
executive leadership assignments in the years to come.
In fiscal 2012, we also strengthened our commitment to
running Tata Technologies as a high-performance
business. We expanded the use of our Global Delivery
approach to optimize delivery across our broad range of
services, and we further streamlined internal operations
as part of our ongoing focus on business excellence. This
was recognized during our annual Tata Business
Excellence Model ( TBEM) assessment, with Tata
Technologies progressing to the ‘Good Performance’
band – a major milestone for our company and a
testament to the investment that we have made in the
internal balance sheet of our company.
We also remain highly committed to the communities in
which we live and work through our corporate
sustainability efforts. Most notable is our on-site water
and waste recycling facility at our Center for Advanced
Engineering and Design in Hinjawadi, our Ready
Engineer™ program that promotes technical education
for engineering students in India, our alliance with First
Book in North America to promote literacy at the
elementary school level and – equally important – our
commitment to engineering environmentally
responsible products, highlighted by the worldwide
debut of the Tata Technologies eMO Electric Vehicle
study, which you will read about later in this Annual
Report.
My thanks to all our shareholders, who have
demonstrated their ongoing support for our
organization in fiscal year 2012. I also want to thank the
men and women of Tata Technologies around the world
for their hard work, discipline and dedication to our
clients this past year, without which our success would
not have been possible. Through the focused execution
of our strategy, we achieved great things in fiscal 2012
and we believe we are well positioned for continued
success in fiscal 2013.
Warren Harris
President & Chief Operating Officer
15th May 2012
SEZ, Blue Ridge
Eighteenth Annual Report 2011-12
VI
Management Team
Samir Yajnik
President, Global Services
& COO APAC
TN Umamaheshwaran
Chief Technology Officer
John Howaniec
President, PLM Solutions
Ron Bienkowski
Executive Vice President
VII
Richard Welford
Executive Vice President
Samrat Gupta
Chief Financial Officer
Chief People Officer
V. Balaji
Chief Information Officer
Patrick McGoldrick
CEO & Managing Director
Kevin Fisher
President, Vehicle Programs
& Development
Gopinath Jayaraj
President, Global Delivery
Archit Gupta
Head, Office of Strategic
Management
Anubhav Kapoor
General Counsel &
Company Secretary
Nick Sale
COO Europe
Warren Harris
President & Chief Operating Officer
Eighteenth Annual Report 2011-12
VIII
Redefining our brand,
showcasing our capabilities
More than 770,000 auto enthusiasts, including
thousands of auto industry professionals and the world's
automotive press, attended the 2012 North American
International Auto Show in Detroit this January – and
most got a chance to check out an all-new electric
vehicle study from a new player on the scene.
Tata Technologies unveiled its eMO, and showgoers
could hardly miss it. Positioned in the lobby of Detroit's
Cobo Center at the Michelin Challenge Design “City
2046” display highlighting the future of personal
transportation, the eMO – which stands for electric
MObility – drew considerable attention. A futuristic
design and breakthrough features were eye openers.
Comfor table, practical, fuel-efficient and
environmentally friendly, eMO is the right size for urban
transport - easy to park, yet seating four adults
comfortably, with a back seat able to be converted into
substantial cargo space.
It's innovative. While working on the study, Tata
Technologies developed fresh intellectual property and
has 15 patents in process.
And it's designed to be affordable; its estimated
manufacturer's suggested retail price is $20,000 (US),
and that's without any federal or state government
incentives.
But for industry analysts, the big news was the
IX
eMO breaks new ground
for Tata Technologies
emergence of Tata Technologies as an unexpected
entrant in the full-vehicle development arena.
REDEFINING OUR COMPANY
In India, this is officially the Decade of Innovation, as
declared by the country's president. In 2010, at a summit
meeting of the country's leading engineering
companies, a bold prediction was made: Within 10 years,
an Indian engineering firm would develop the capability
to deliver a complete vehicle.
Enter Tata Technologies. Since 1981, Tata Technologies
professionals have been contributing engineering,
design and IT services to the world’s leading automotive
and aerospace manufacturers and their suppliers.
Headquartered in Singapore, with regional offices in the
United States (Novi, Michigan), India (Pune) and the
United Kingdom (Coventry), Tata Technologies has a
work force of more than 5,443 employees serving clients
worldwide.
In its three decades of providing pragmatic solutions for
a growing number of successful automakers and
aerospace companies, Tata Technologies had developed
a growing reputation for competence and innovation,
and for an unmatched mastery of frugal engineering. In
2010, the company was ready to take its next step - the
formation of a Vehicle Programs & Development (VPD)
group.
VPD was created as a strategic realignment of Tata
Technologies' engineering leadership and its team of
professionals worldwide. It was a change designed to
adapt to a changing world. As the automotive industry
was emerging from a global recession, the demand for
new, highly differentiated products was increasing,
placing an unprecedented burden on the automakers'
limited product and manufacturing engineering
resources. The automakers now were seeking
experienced, proven engineering partners to meet
these demands. They also needed partners with an eye
toward innovation - a fresh view - to achieve success.
The experience and global reach of Tata Technologies
placed the company in a unique position to rise to the
challenge. Creating the new Vehicle Programs &
Development team was a first step. The next step:
showcasing the capabilities of the newly organized
team.
THE BIRTH OF THE eMO
In the summer of 2010, in anticipation of launching the
Vehicle Programs & Development group, Tata
Technologies decided to create a complete vehicle as
an internal engineering study. As a company with a
history of dedicating its resources to specific client
needs, this was a shift in gears.
The group considered numerous concepts. The
objectives were to highlight the company's focus on
sustainability, as well as its global experience,
knowledge, capacity, innovation and frugal
engineering capabilities across its portfolio of services,
which cover the entire product development cycle,
including:
•
Product and Market Definition
•
Concepts and Styling
•
Vehicle Architecture
•
Knowledge-Based Modeling
•
Engineering and Design
•
Digital Validation
•
Prototype and Testing
•
Manufacturing Solutions
The team started by reviewing relevant media on
electric vehicles. "We found very mixed results, ranging
from huge optimism to abject pessimism and
everything in between," says Kevin Fisher, President of
the Vehicle Programs & Development group. There was
much to study, including a plethora of concepts and
reams of data, as well as local and governmental
incentives and infrastructure.
"We studied and considered what type of electric
vehicle is required for different uses, each having a
specific purpose and goal," says Fisher. "We dissected
demographics, identifying who would be interested in
each segment, determining what innovation and
technologies we could bring to this market, with an
overall objective of producing a concept that would be
a cost effective electric vehicle."
FINDING THE RIGHT BALANCE
This analysis led to a combined product and process
design to balance the following areas:
•
vehicle cost of ownership and use
•
innovation and technology
•
consumer features and space.
The research also led to a focus on a city or "New Urban"
electric vehicle with an emphasis on the design
following the functionality and use of the vehicle.
Keeping a low cost of ownership was a priority.
"We believe that most vehicles on the market are
actually oversized and over specified for the
consumer’s daily use," says Fisher. "Our objective was to
find the right size for this type of electric vehicle with
the appropriate range and speed, without reducing
safety and daily usability."
To sum it up, Fisher said the eMO reflects Tata
Technologies' unique multidimensional approach, its
DNA of innovation, as well as its intimate
understanding of the demands of both developed and
developing markets. The vehicle also benefits from the
company's global delivery model and its proprietary
Knowledge-Based Engineering platforms to develop
products faster and more cost-effectively.
“We believe this engineering study shows a very
pragmatic, innovative and cost-feasible solution for
daily-use electric vehicles in a new urban
environment," says Fisher. "And we believe the market
exists for a vehicle demonstrating this intelligent
combination of performance, safety, function, price and
environmental responsibility."
But there's more to come. "This study is the first in a
series of thought-provoking concepts to showcase our
capabilities across the current and future automotive
landscape," he added.
The eMO reflec ts Tata Technologies' unique
multidimensional approach, its DNA of innovation, as well
as its intimate understanding of the demands of both
developed and developing markets.
- Kevin Fisher
(President of the Vehicle Programs and Development group)
Eighteenth Annual Report 2011-12
X
BACK TO THE FUTURE
MY STORY
Flash back to the prediction that an Indian-based
engineering firm would develop a complete vehicle
before 2020. Tata Technologies achieved the feat eight
years early.
by Casey Mehta, Senior Consultant -- Business Partnership,
Novi, Michigan, USA
"The eMO project symbolizes a coming of age of Indian
automotive engineering," said Warren Harris, Tata
Technologies President and Chief Operating Officer. "It's
a tangible example of the capability of Tata Technologies
to deliver a full vehicle."
Will the eMO be mass produced? That's a question yet to
be answered. "We developed it strictly as an engineering
study with no particular automaker in mind," says Fisher.
Meanwhile, the company's Vehicle Programs &
Development group continues to apply its innovative
approach and frugal engineering capabilities in service
of a wide range of clients with more than 300 engineers
operating from four automotive centers of excellence
worldwide - Detroit, Coventry, Pune and Stuttgart. Says
Fisher: "We have the talent, ideas, and ability to anticipate
client and market needs. We're ready to help our current
and future clients rise to meet their next global
challenges."
eMO STORIES
Reflections on the eMO project by key team members
who brought the vehicle to life.
MY STORY
by Kevin Fisher, President,Vehicle Programs & Development,
Novi, Michigan, USA
"The eMO project was very satisfying to me. Having 35
years of automotive experience, I got an opportunity to
apply my cumulative knowledge, skills and experience
honed over the years.
"My primary role was supplier relations and
procurement, but my involvement went far beyond that.
I handled all commercial negotiations worth more than
$1 million (US), including the supplier contract to build
the final drivable eMO. I was able to help us come in
$100,000 under budget.
"I also helped develop the business case for eMO, taking
into account potential customer profiles, product
volume and mix scenarios, options and features, nontraditional approaches to marketing and distribution,
project investment, variable piece prices and the
targeted retail price. I created various models of
operating costs over a five-year period to demonstrate
the savings offered by eMO over a traditional car.
"The most challenging part of the project was
convincing suppliers to get involved.Tata Technologies is
not an OEM, so why would a supplier work with us if there
is no production business expected at project
completion? It took good deal of skill to convince a few
key suppliers to participate.
"I think the eMO speaks for itself. I would like to think that
this could be a catalyst to bring about a difference on
how the market perceives Tata Technologies – and how
we perceive ourselves.
"I think the best part of the project was our
unconventional approach to problem solving. To solve
the big problems of tomorrow, we had to develop a
strong sense of imagination for the future of mobility. So,
in a way, we all had to become futurists in our scenario
planning and execution.
"Since our first brainstorming session, we kept our focus
– to create a sustainable mobility concept for city use,
offering high value to consumers at a disruptive price
point through innovative technology.
"Being a part of the eMO team meant working closely
together with a wide variety of people from different
backgrounds around the world to find solutions for
every problem encountered along the way.
"Throughout the development process, we established
many new best practices and, importantly, the team
reaffirmed a belief that we can take on many complex
challenges.
"It was truly a team effort - and a fulfilling one. Seeing a
concept on paper develop into a real car was especially
rewarding."
"I am very proud of our achievements, and it's a very
gratifying feeling to see the pride in eMO in our
employees around the world.
"As we were in the final stages of producing the
prototype, my mother and father had come to see our
family for a vacation. On several occasions, they came to
see the construction of the vehicle, upon which they
gave me their feedback, which was positive and helpful.
There are not many times that you can involve your
family in your programs.
MY STORY
by Nigel Giddons, Chief Engineer - Vehicle Architecture,
Novi, Michigan USA
“It's very rare to conceptualize a vehicle from a blank
sheet of paper. So often, vehicles are based around an
amount of existing architecture or systems. This one
started from nothing.
"The project was intense, and I'm fortunate to have the
support of my wife and children who have endured my
obsession with executing this program to the highest
level.
"Secondly, as a service organization, we are often
engaged to bring to fruition the products that are
ultimately based upon the ideas, opinions and decisions
of our clients. This one was all ours. The team had a
tremendous feeling of ownership in our little car. There
was no one to blame if we didn't succeed.
"And a large thanks to everyone on the Tata Technologies
eMO team.You never know where this could lead.”
"My personal pride was in balancing the huge amount of
creative ideas and opinions coming from within our
XI
team of what eMO should be. It was a fantastic
collective. I was honored to lead such an enthusiastic
group of highly skilled technicians.
"The challenge of the project was that it was only us. So
often in an endeavor this large and complex we have
the chance to seek the advice and assistance of others
to find the answers. Here there was no such option. We
had to challenge ourselves more than ever before.
"If you're like me, and you grow up with a fascination
and interest in history’s great innovative car designers
such as Pinninfarina, Colin Chapman, Ferdinand
Porsche, Alex Issigonis and Enzo Ferrari, and then you
have the opportunity to try it yourself - that's a
childhood dream come true. We conceptualized,
designed, engineered and built a whole car. Not too
many people get a chance to do something so grand.
"I'll never forget the first time I saw eMO in the flesh,
resplendent as a tangible manifestation of all our
efforts. It was our baby. It was love and pride at first
sight."
MY STORY
by Peter Davis, Chief Designer -- Vehicle Design, Novi,
Michigan USA
“It felt great to be part of a small collaborative
endeavor working on the eMO, creating hundreds of
ideas, knowing that only a few had the chance of going
forward, but understanding that the tight interaction
of other team members would pull the best ideas
forward. My team’s extensive experience in aesthetic
surface development helped move the styling forward
quickly without the use of expensive full-size clay
development models. Years of experience in interior
design and material usage enabled us to prioritize our
problem-solving and direct our innovation toward the
core objectives.
"I enjoy addressing challenges and creating solutions
that are an appropriate balance of engineering and
design, and I like proposing nontraditional ideas that
evolve into solutions that are useful yet distinctive. The
parts of the project that were the most gratifying were
the 'Aha!' features - the center controls on the
instrument panel, the panoramic glass with the sun
visor, the windshield wipers, the rear window and tail
light solutions.
"I remember when we finished the seating buck to
evaluate spaciousness, outward visibility and
ingress/egress, together we realized that the side
openings were so large and accommodating that the
rear seat could serve double-duty as a cargo area,
eliminating the need for a rear hatch and a dedicated
trunk.That was a breakthrough moment for the project,
when problem and solution achieved an absolutely
convincing logic.
“We displayed eMO at a university student center lobby
during an electric vehicle conference. As students and
faculty walked by, many took the time to comment or
ask questions. I enjoyed seeing their expressions
change, as the concept was explained and absorbed.
Many said, 'I would buy that.' That was the ultimate
satisfaction."
Read more at www.betterinnovation.com
Eighteenth Annual Report 2011-12
XII
Helping racing legends
be their best
The builder of some of the most iconic sports cars in
racing history was getting ready to create a limited run of
million-dollar supercars. It found a partner with
credentials just as lofty -- a partner that has made its
mark on Formula One racing with numerous
championships at motorsports' highest level.
As significant details of the project are yet to be
announced, the major players in this story will remain
anonymous – at least for now. But we are able to tell the
story about Tata Technologies' role in this marriage of
racing superpowers.
Putting two racing legends together sounds like a
formula for success – but only if processes and systems
are in place to ensure that both parties are operating at
their best – or to borrow a racing term, on all cylinders.
To add value to this all-star collaboration, Tata
Technologies was asked to assemble a small team of
Vehicle Program Business Process Consultants to
conduct an assessment.
On 2 November, 2011, the team, with Nigel Giddons as
Project Manager, arrived at the scene of the partnership
to initiate discussions with program leadership to
identify immediate priorities.
A week later, the project scope was established: To
redefine the processes and PLM (Product Lifecycle
Management) technologies that would support the
program's data management requirements.
"A fundamental business imperative for product
development is have access to a single and
unambiguous version of the truth, be it good or bad,"
said Giddons. "This means that the basic elements of
product description – computer-aided design (CAD),
engineering, bill of material (BOM), cost, investment,
weight and timing – on a part-by-part basis need to be in
continuous alignment so that issues can be found,
believed and acted upon."
The project took on the title“CAD/BOM Alignment."
Before Tata Technologies' project assessment, the
partners were using an Excel spreadsheet to capture the
BOM, with no connection to CAD. This limited the ability
of program leaders to report upon status of program
attributes. Change control was also an issue without any
form of rigid approval or traceability. Under these
circumstances, too much time was being expended
debating the validity of data sets and the validity of
results. A clear objective of the project was to put in place
a far more capable solution.
The project title expanded to reflect a common
objective: "CAD/BOM Alignment; Retirement of Excel
BOM."
XIII
Tata Technologies supports development
of new super car
The project was under considerable time pressures - a
two-month first prototype build phase was slated to
begin in late April 2012. Implementing any solution
during this phase would be a concern, but so would
entering such a phase with a low level of data
confidence. The need for speed was an emphasized
client requirement, presenting an enormous challenge.
The Tata Technologies team was up for this challenge.
Giddons, technical leads Anoop Sharma, Douglas
Schilling and Chris Stock assembled in mid-November to
begin detailing the definitions and specifics of the
business requirements and remained the prime client
interface team until completion.They were supported by
an extended team of solution architects and IT
specialists in North America and around the world,
developing, testing and validating the solution.
The full deployment was staged with a successful
foundational deployment in early January. This step
helped ensure delivery confidence and enabled early
exposure of the full solution to the program. As final
solution development and validation continued, Tata
Technologies simultaneously trained 70 individuals at
project headquarters and at remote supplier locations,
preparing a team with supporting implementation
material and at-elbow support. Several thousand
existing part files had to be checked, repaired and
transferred from legacy systems to new systems to
support the implementation plan.
On 26 March, 2012 – just 146 days after the start of the
engagement – the project went live, using a new,
pragmatic, tangible business solution best described as
a“Micro PLM (Product Lifecycle Management).”
Engineers now interface with a solution structuring CAD
and BOM as one. Each part is now an item with selectable
attribute data, including number, name and system ID
standardization, cost, weight, model, prototype variant,
build timing, make/buy analysis and supplier
information.The solution includes embedded workflows
that control approval and release processes. The highly
efficient, user-friendly solution allows configurable data
searching and report capabilities according to engineers
and program management needs.
"The key is that the data these racing experts are working
with is now complete, accessible, unambiguous,
controlled - and believed," said Giddons.
That's a key to success of not just million-dollar
supercars, but any major cross-functional product
development effort.
MY STORY
- by Chris Stock,
PLM Services Manager, Coventry, England
MY STORY
- by Nigel Giddons,
Chief Engineer - Vehicle Architecture, Novi, Michigan USA
“I’ve been part of the supercar project since the start. We
were working with a new client, so our challenge was to
demonstrate our capability and value early on to build
the level of trust needed to make the project a success.
"My role was to provide guidance to help us capture what
the client required from a engineer’s point of view.
"Because time was critical, the start of the project was
especially challenging. We had to work extremely hard to
quickly define the scope of the project based upon what
the customer required.
"Fortunately, this early challenge helped develop a close
working relationship among the team members - and
that close working relationship made a difference. It was
rewarding to hear from our client that they were pleased
with the solution we provided.
"We knew we were connecting well with our new client
when we were provided a tour of our customer's personal
collection of Formula One cars. We felt that we earned our
client’s trust based on results.
"I was proud to be part of this project. It was truly a global
effort, and it clearly showed how well Tata Technologies
works as a global team."
“I’ve been a Formula One fan for as long as I can
remember. Tata Technologies certainly has my thanks for
trusting me with the reins of a project that made me meet
one of my childhood heroes.
"I was especially honored to work with such an
enthusiastic group of highly skilled technicians at one of
the world’s leading motorsport organizations. My
personal contribution was in leading the customer
relationships, constructing the team and ensuring that
deliverables, timing and commercial matters were
understood by our team and customers alike.
"During our first introductions to the working-level teams
at both partners' facilities, it was clear that we were not
known and thus not particularly welcome. The timing of
the project was extremely challenging. Our own internal
assessments even suggested it could not be done. But by
sheer force of will and phenomenal efforts by the team,
we met all requirements.
"It was personally fulfilling to win over the customer and
establish lasting relationships in short order by rapidly
demonstrating our experience, capability, clear
communication skills and enthusiasm.
“Climbing a mountain higher than one felt possible is a
fantastic feeling."
MY STORY
- by Doug Schilling,
Business Process Consultant, Novi, Michigan USA
MY STORY
- by Anoop Sharma,
Project Manager, Pune, India
“From my perspective, I feel most proud of the global
teamwork that made the project a success in such a short
period of time.
"Since this was the first time our customers clients had
engaged in a partnership of this type, there was very little
in terms of defined process available at the onset of the
project. But through discussions, interviews and analysis,
we were able to determine the project's goals and
business objectives, and then to define the processes
accordingly.
"We saw the challenge: The project team had been
struggling for some time trying to keep the bill of
materials on its Excel spreadsheet in sync with the CAD
bill of materials.
"I felt that my background in design, engineering and
Teamcenter processes helped provide a basis for a
thorough analysis of the project objectives and needs. I
also enjoyed training the team in the new processes.
"We were happy that we could provide the functionality
in Teamcenter to enable the team to retire the Excel bill of
materials.
"As the project progressed, I couldn’t help but think how
well the client relationship had developed. I could see the
enthusiasm that was building around the final solution.
"It was great to work with such a dedicated team that
included our leadership, project managers, developers
and the customer -- and to see the client satisfaction that
resulted from the team's efforts.
“I felt privileged to be asked to participate in such a highprofile activity."
“I've dedicated 11 years of my career to improving
product development efficiency using Product Lifecycle
Management (PLM). It was satisfying to apply that
experience to help make the supercar partnership a
success.
"On the project, I was able to tap into my experience in
technical layout and solution definition, resource
planning, solution development and deployment.
"We were happy to deliver quality results and to do so in
40 percent less time than expected. We were able to
provide a packaged solution, and the fact that our client
has requested source code of the solution shows that our
client truly values it.
"One of the client requirements was to keep cost data
secure. It was a critical part of this project. That took some
time, but we were able to deliver. Effective brainstorming
within the team led to the perfect solution.
“It was a challenging project, but I think we were able to
clearly demonstrate Tata Technologies' PLM capabilities
to a very important client - and that's important to our
future."
Eighteenth Annual Report 2011-12
XIV
The Concept of Passionate
Fun Loving Engineers
or PFLE’s
Good Morning Gentlemen. I completed a successful test in
the new Boxster this weekend at Rockingham Raceway
with TF Motorsport supporting. The baseline suspension
setup was pretty good but predominantly under steer so we
have a list of 'tweaks' to make to reduce this for the 1st race.
The engine felt slightly down on power, prime suspect is a
collapsed cat or leak in the induction system, not a major
concern at this stage. And some oil surge issues which seem
to be unique to the banked corners on the Rockingham
oval, something to keep an eye on during the season.
An email like the one from Steve Brown would be
perfectly normal had he been a professional race car
driver. Steve’s profession is not car racing. Steve works at
Tata Technologies in the UK as a Module Leader – Safety
Components in an engineering team working on a
clients’ vehicle program. In addition to his career at Tata
Technologies, Steve has pursued a success in UK
motorsport, securing the Porsche 924 Championship in
2 0 1 1 ; a n d co nte n d i n g t h e Po r s c h e B oxs te r
championship in 2012, partially sponsored by Tata
Technologies.
Please see the link below for some in car footage.
http://www.youtube.com/watch?v=wi9fFWxxM30
Steve is an example of what Tata Technologies calls its
PFLEs or Passionate Fun Loving Engineers.
Best Regards,
Steve
XV
Tata Technologies is a natural
habitat for those who believe in
the power of engineering to make
the world a better place and have
found the means to do so.
Very few companies have been able to truly merge
passion with profession for its’ employees. When it
happens, a group of people come to work and do what
they believe in rather than any other way. Tata
Technologies was born out of the need for a company in
the Tata group exclusively focused on the design and
engineering of exciting products.
In the words of Group Chairman Ratan
Tata; “This company would not mean all
things to all people“. “This is a young
company in a very exciting line of
business, that not only has its’ place in
India but across the world. We decided
that this company would not be all
things to all people, but would focus
itself in the niche area of providing
solutions to manufacturing companies. I
would like to see Tata Technologies
being acclaimed as one of the more
innovative and successful design
companies in the world”.
Clearly, the rationale for the formation of the company
meant that it would attract employees who deeply
believe in the power of engineering, including the
creative use of virtual tools for product development.
And that is how a company that is called Tata
Technologies becomes a place where a passionate group
of engineers start finding meaning in the things that they
do. Finding meaning also brings with it a freedom to
experiment and brings to the forefront things that one
likes doing – both as an extension of the professional in
them and otherwise. That is the essence of a Passionate
Fun Loving Engineer or a PFLE as we call it at Tata
Technologies.
Tata Technologies’ business, albeit passion, is better
and better product development that can benefit
people and make the world a better place. Whereas in
professional terms the company’s lines of business are
Engineering & Design, Product Lifecycle Management
(PLM) and Manufacturing Enterprise IT, the true
meaning of these lines of business comes from the
ingrained engineering passion and aptitude that lies
within the heart of each Tata Technologies engineer.
surpasses all its’ peers. The results speak for
themselves. Beginning in the late 1990s, the company
has been trusted with high-end automotive
engagements in offshore mode. More recently, the
landmark Tata Nano project was manned jointly by
Tata Technologies and Tata Motors engineers for subsystem, component and innovation that went into the
new product. The Tata Technologies eMO (for electric
MObility), a driveable engineering study created by
engineers from the Tata Technologies Vehicle
Programs& Development (VPD) group opened to rave
reviews at the 2012 North American International
Auto Show in Detroit.
In the aerospace world, a small group of highly skilled
and dedicated aerospace engineers from Tata
Technologies’ JV with Hindustan Aeronautics Limited
(Tata HAL Technologies) became the first company in
the Indian private sector to undertake a Joint Concept
Development Program (JCDP) for an overseas
business jet manufacturer.
Engineers from Tata Technologies braved -40 degree C
temperatures in a remote corner of China – all of them
visiting there for the first time - to deliver on-time and
on-budget for a completely new line of service for a
client in the Industrial Machinery Industry.
WHAT DOES THIS PASSION MEAN FOR BUSINESS?
It is the product that makes the company. At the core
of any successful product development initiative
anywhere and at anytime in the modern world, there is
a set of people who want to make a difference. What
drives them is their passion, what sustains their
momentum is the organisational environment that
can allow that passion to thrive. What ultimately
achieves success is flawless execution that can only
result from a deep technical understanding and
experience. As a company that aspires to be the
world’s no. 1 partner to the manufacturing industry
and focusing on the Automotive, Aerospace and
Industrial Machinery industries, Tata Technologies
clearly stands at the meeting point of three powerful
streams which are engineering passion, terrific
opportunity in the industries it services and an
understanding of the application of technology that
A veteran of more than 25 years in the company,
T N Umamaheshwaran, CTO, Tata Motors &
S u b s i d i a r i e s, h a s t h e
following printout in his
office:
“Passion is something
for which one would
go the extra mile, put
in the extra hours
and take on extra
responsibility.”
Eighteenth Annual Report 2011-12
XVI
K a ru n Ja co b w h o
j o i n e d l a s t y e a r ’s
Graduate Engineering
Trainee batch has the
following to say about
why he joined Tata
Technologies:
“Tata Technologies was
the dream company for
us. When we had our
campus placement
season there were IT
companies giving high pay packets and wanting to hire
mechanical engineers like me. However, a few other
friends and I did not want to get away from our core
domain and write software code for a bank or an
insurance company. We wanted to apply our skills to
product development engineering and found Tata
Technologies to be the right place for our aspirations.”
THE ROAD AHEAD
In a company where lunch hours often turn into a dash to
the parking lot to drive a colleague’s new car and do a
quick rundown of trims, fixtures and interiors, where
people discuss aerospace composites over coffee, where
seniors never ever say no to youngsters wanting to know
more about technology domains; going forward seems
easy and the answer seems to lie in letting passion take
its’ own course. While engineering passion is the key
element here, harnessing that passion to achieve
sustainable growth is the real key. Building a company
where Passionate Fun Loving Engineers continue to help
create better products on a much larger canvas in an
increasingly competitive, and smaller world – that is what
Tata Technologies wants to enable as a company for its’
PFLEs.
HOW DOES THIS PASSION THRIVE ?
A niche, specialist company like Tata Technologies
can maintain its’ steady climb upward only when the
individual passion of its’ engineers gets the right
support from the rest of the organisation. The HR
team provides that support in the form of new talent
acquisition, mentoring and training, and overall
employee engagement initiatives.
The core of Tata Technologies’ HR strategy lies in the
Return on Human Capital framework which
connects employee engagement with business
outcomes. Employee engagement serves the dual
purpose of delivering value to customer and greater
employee productivity; which in turn leads to higher
margins that subsidize further enhancing employee
engagement.
Tata Technologies has been able to scale and
democratize its HR functions by making its
XVII
processes more fair and transparent through the
cross-functional Employee Experience Leadership
Team (EeLT), leveraging IT systems and through a
conscious move away from a traditional “power
center”to an“influencing center”.
In his book, Human Resource Champions, David
Ulrich speaks of a new vision for HR, “not by what it
does, but by what it delivers results that enrich the
organization’s value to customers, investors, and
employees.”
At Tata Technologies, EeLT is a unique example of HR
represented in the management team by business
heads. The HR department and this cross functional
team of leaders comprising delivery, sales, human
resources and finance team members work together
to establish best in class industry practices which
promote a high performance culture.
In the last couple of years, the primary areas of HR
reskilling for enhanced business alignment have
happened in the following areas at Tata
Technologies:
1.
2.
3.
4.
5.
6.
Drive the HR agenda through a clearly
measurable and quantifiable Return on
Human Capital framework which links
business performance with HR actions.
Promote High Performance Culture (HPC) by
shaping and executing a range of policies and
systems. Some of the initiatives include fair and
transparent per formance appraisal
process, develop competency framework and
talent pools, contain costs of recruitment by
promoting non-traditional channels like radio
campaigns etc.
Work with EeLT to Build Winning Teams (WT) by
constructing scientific and predictable
workforce planning tools which are connected
to hardcore business metrices.
Offer signature employee experience (SEE) to
eve r y m e m b e r o f t h e wo r k fo rce by
implementing scalable HR systems.
Leverage the EeLT process and work with a
collaborative approach with business that
enriches learning at individual level for
employees in HR and increases HR’s orientation
to business success.
Last but not the least, with help from Finance
offering an ‘on the job’ financial and
commercial understanding to each employee
in HR, has improved the legitimacy of HR
members to Tata Technologies’ business
requirements.
T
TA
TA
Corporate Sustainability
ECHNOLOG
IES
Commitment To The Communities Where We Operate
The mission of the Tata Technologies Corporate Sustainability Program (CSP) is to make a positive impact on the
communities in which the Company does business through its support of select programs, outreach efforts and initiatives
that improve and enhance the quality of life.
Our goal is to make things better for the planet, better for people, better for business; better now, and better for the future.
In a free enterprise, the
community is not just another
stakeholder in business, but is
in fact the very purpose of its
existence.
- Jamsetji Tata
(Founder, Tata group)
Corporate Sustainability is integrated into Tata
Technologies core business values, to ensure the
greatest impact and reach. Every day at Tata
Technologies, our employees strive for making things
better for the planet and better for the people. Globally,
many associates of Tata Technologies volunteer in
support of various programs organized to make a
positive impact on society.
Tata Technologies professionals have undertaken various
activities such as talent development, blood donation
camps, awareness programs on water, health, climate
change and also innovative projects to promote a positive
environment for future generations.
Environmental Stewardship
through tree plantation
Professionals from Tata Technologies on 27 June, 2011
came together to plant more than 1,000 trees at the
Parandewadi campus in India.
It was the group’s first event under ‘Tata Environment
Month’ to build a low-carbon culture across all Tata
companies.
Eighteenth Annual Report 2011-12
XVIII
Committed to the needy
Tata Technologies Corporate Sustainability team helped The Tata
Medical Centre(TMC), which is a cancer hospital based in Rajarhat,
Kolkata (India) with 167 beds in August 2011. Half of these beds
are clearly earmarked for free or subsidized treatment of those
patients who are economically disadvantaged, and cannot afford
cancer treatment.
Tata Technologies volunteers from all across India locations
collected Rs. 23000/- for the medical center. No matter how small,
it was immense help to the needy. Together, we made a little
difference.
Participation in Half-Marathon to raise
donations to the Macmillan
Cancer Support Organization, UK
On Sunday 2 October, UK employees laced up their running shoes
and ran in the Coventry Half-Marathon and Fun Run. Employees
from operations and delivery all ran in the Fun Run mile-long race
to help raise more than £2500 in donations to the Macmillan
Cancer Support organization.
“Running for Hope” in US
On October 2011, as part of the 34th Detroit Free Press Marathon,
Tata Technologies employees and their families participated in
events ranging from a 5K to the full 26.2 mile marathon, raising
pledge money per miles run. This was the second year of the
Running for Hope project and Tata Technologies have raised more
than $5,000 to support the underprivileged individuals served by
Grace Centers of Hope, which is oldest and largest homeless
shelter in Oakland County, Mich.
Blood Donations
No. of Blood Units Increasing Per Year Graph
Tata Technologies continued its support for the
noble cause by participating in the blood donation
drives organized during 2011-12. Blood donations
increased by 66 percent and a total of 630 units of
blood were donated, compared to 378 the previous
year. This was a result of series of blood donations
drives organized in November 2011.
XIX
630
600
500
378
400
254
300
200
100
0
84
90
103
FY 06 -07
FY 07 -08
FY 08 -09
FY 09 - 10
FY 10 - 11
FY 11 - 12
The Flood of 2011: A Salute to the Thailand Team for Overcoming Major Challenges:
Tata Technologies employees in Thailand will remember 2011 for a long time.
With the country ravaged by the worst flooding in half a century, the
employees persevered – not only to get the job done, but to help others as
well.
The disaster has been described as “the worst flooding yet in terms of the
amount of water and people affected,” resulting in 815 deaths, affecting 13.6
million people’s homes and livelihood and 1 million people becoming
jobless because of this disaster.
Tata Technologies professional not only persevered; they also turned their
focus to helping others. They donated blood, money and time to help
advance the recovery efforts of their country. One blood drive in November
2011 helped the Thai Red Cross Society address critical blood shortages in
many provinces.
Ready Engineer Program
Talent development is one of the focus areas under the Tata Technologies Sustainability program and has identified
technical education as part of the core agenda. The company aims to meet the engineering industry’s demand for
employable engineers and bridge the industry institute gap by direct intervention. Ready Engineer – the Tata Technologies
program to train engineers – works by identifying meritorious 3rd year Engineering students in respective engineering
colleges in India to go through special 40 hours of classroom industry based and tool based training by their expert
engineers supported by online training with its proprietary software iGET IT®.
During FY 2011-12, a total 180 students from 5 institutes benefitted from this program.
School Adoption on Teacher’s Day 2011:
Teachers are the world’s future-builders. No achievers
have succeeded without the guidance of a teacher. In
India, Sept. 5 is a Teachers’ Day, which seeks to
acknowledge the contribution of educators.
The donation was generated from online cricket quiz
competition, a Corporate Sustainability initiative. The
quiz was organized with an objective of donating the
proceeds for a noble cause.
A donation of Rs. 75,000 was presented to the School
Principal of Gurukulam, Pimpri, India on Teachers’ Day.
Eighteenth Annual Report 2011-12
XX
Board of Directors
From left to right
C Ramakrishnan
Director
XXI
R Gopalakrishnan
Director
S Ramadorai
Chairman
Patrick McGoldrick
CEO & Managing Director
P P Kadle
Director
Auditors
Deloitte Haskins & Sells
Registered Office
25 Rajiv Gandhi Infotech Park,
Hinjawadi, Pune 411 057 India
Registrars & Transfer Agents
TSR Darashaw Limited
6-10, Haji Moosa Patrawala Industrial Estate, 20 Dr. E. Moses Road,
Mahalaxmi, Mumbai 400011.Tel : 91 22 6656 8484 Fax : 91 22 6656 8494
E-mail: csg-unit@tsrdarashaw.com. Website: www.tsrdarashaw.com
Eighteenth Annual Report 2011-12
XXII
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
Notice
NOTICE IS HEREBY GIVEN THAT THE EIGHTEENTH ANNUAL GENERAL MEETING OF THE MEMBERS OF TATA
TECHNOLOGIES LIMITED will be held on Friday, June 22, 2012 at 3:30 p.m. at the Registered Office of the Company
situated at Plot No. 25, Rajiv Gandhi Infotech Park, Hinjawadi, Pune - 411 057 to transact the following business:Ordinary Business
1.
To receive, consider and adopt the Audited Profit and Loss Account for the year ended March 31, 2012 and the
Balance Sheet as at that date together with Report of the Directors and Auditors thereon.
2.
To declare dividend on Equity Shares.
3.
To appoint a Director in place of Mr. C Ramakrishnan who retires by rotation and is eligible for reappointment.
4.
To appoint a Director in place of Mr. R Gopalakrishnan who retires by rotation and is eligible for reappointment.
5.
To appoint Auditors of the Company to hold office from the conclusion of this Meeting until the conclusion of
the next Annual General Meeting of the Company and to authorize the Board of Directors to fix their
remuneration. M/s Deloitte Haskins & Sells, Chartered Accountants (Registration No. 117366W), the retiring
Auditors are eligible for reappointment.
Special Business
6.
Alteration of Articles of Association of the Company
To consider and, if thought fit, to pass with or without modification, the following resolution as a Special
Resolution:
“RESOLVED THAT, pursuant to Section 31 of the Companies Act, 1956, and other applicable provisions, if any, the
Articles of Association of the Company be and is hereby altered in the following manner, with effect from
April 30, 2011:
a.
By substituting for the existing Article 126 (6), the following Article:
"Board Committees: In the event a remuneration committee or an audit committee is formed by the
Board, the Parties hereby agree that the right of the Investors to appoint one nominee to such committee
shall be similar to the rights the Investors have to appoint their nominee to the Board as stated in Clauses
126(2), 126(3) and 126(4) above.
Subject to the provisions of the Act, all meetings of the audit committee and remuneration committee
shall require a quorum of one third of the total strength of such committee or 2 (two) Directors, whichever
is higher. Provided however that, if the Investor Director is absent for any audit committee or
remuneration committee meeting, the quorum for the subsequent audit committee or remuneration
committee, as the case may be, shall, unless otherwise agreed by any one of the investors, include the
Investor Director. Further, subject to the approval of the Board, Mr. P. P. Kadle or such other Director as may
be mutually agreed with the Investors shall be appointed as Chairman of the audit committee.”
b.
By substituting for the existing Article 126 (8), the following Article:
“Chairman: Mr. S. Ramadorai shall be the initial Chairman of the Board.The Chairman of the Board shall not
have a casting vote. The Chairman shall preside at all meetings of the Board and at all Shareholders’
meetings. In the absence of the Chairman for any reason whatsoever at a meeting of the Board or any
Shareholders’ meeting, the Directors present shall choose one of the Directors appointed by the Sponsor
to be the Chairman of the meeting.”
“RESOLVED FURTHER THAT, all decisions/actions of the Audit Committee and Remuneration Committee, during
the period starting from April 30, 2011 until conclusion of this Meeting, be and are hereby ratified and affirmed
and the Board, be and is hereby authorized to do all acts, deeds, matters and things and to take all steps and give
such directions as may be necessary and to settle all questions or difficulties that may arise in such manner as
the Board may in its absolute discretion deem fit, for the purpose of giving effect to this Resolution.”
1
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes:
1.
The related Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Item
No.6 set out in the Notice is annexed hereto.
2.
A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD
OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.
3.
The Proxy as per the format given in the Annual Report should be duly filled, stamped, signed and received by
the Company at its Registered Office not less than 48 hours before the time for holding the meeting.
4.
Members/proxies should bring duly-filled Attendance Slips sent herewith to attend the meeting.
5.
The Register of Directors' Shareholding maintained under Section 307 of the Companies Act, 1956, will be
available for inspection by the members at the AGM.
6.
The Register of Contracts, maintained under Section 301 of the Companies Act, 1956, will be available for
inspection by the members at the Registered Office of the Company.
7.
The Register of Members and the Transfer Books of the Company will be closed from June 07, 2012 to
June14, 2012, both days inclusive.
8.
The dividend on Equity Shares as recommended by the Directors for the year ended March 31, 2012 if declared
will be payable on or after June 22, 2012 in accordance with the Resolution to be passed by the Members of the
Company.
9.
As per the provisions of the Companies Act, 1956, facility for making nominations is available for Members in
respect of shares held by them. Nomination Forms can be obtained from the Company’s Registrar and Transfer
Agents.
10.
Members may please note the contact details of the Company’s Registrar and Transfer Agents, M/s TSR
Darashaw Limited, as follows:
TSR Darashaw Limited
6-10 Haji MoosaPatrawala Industrial Estate,
20, Dr. E. Moses Road,
Mahalaxmi, Mumbai- 400011
Tel: +91 22 66568484 Fax: +91 22 66568494
Email:csg-unit@tsrdarashaw.com
Website: www.tsrdarashaw.com
11.
Members are requested to notify the change in their Address, Bank Details, Email etc. if any, to the Company’s
Registrar and Transfer Agents. Shareholders should quote their folio numbers in all their correspondence with
the Company and the Registrar and Transfer Agents.
12.
Members’ attention is particularly drawn to the ‘Unclaimed and Unpaid Dividend’ section under ‘General
Shareholder Information’ in the Corporate Governance Report.
13.
The Company has dematerialized its Equity Shares to CDSL & NSDL and Company’s ISIN number is
INE142M01017. Members, who hold shares in physical form, are requested to dematerialize their shares. A
detailed FAQ on Dematerialization is provided elsewhere in the Annual Report.
14.
Ministry of Corporate Affairs by vide Circular No. 17/95/2011 CL-V, has taken a green initiative in the Corporate
Governance and clarified that service of document (Notices, Annual Reports etc.) to member through electronic
mode is in compliance with the relevant provision of Companies Act, 1956. The Company is concerned about
the environment and utilizes natural resources in a sustainable way. Members are requested to register their
email address, through written application, with Company’s Registrar and Transfer Agents to enable the
Company to send notices, annual reports and other communication via email.
Date: May 8, 2012
Place: Mumbai
Registered Office:
25, Rajiv Gandhi Infotech Park,
Hinjawadi, Pune – 411 057
2
By Order of the Board of Directors
Anubhav Kapoor
General Counsel and Company Secretary
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956
The following Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956, (‘the Act’) sets out all
material facts relating to the business mentioned at Item No. 6 in the accompanying Notice:
Item No. 6:
The members in their Extra Ordinary General Meeting held on April 30, 2011 passed a special resolution for amending
the Articles of Association of the Company to incorporate the relevant provisions of the Shareholders’ Agreement,
executed amongst the Company,Tata Motors Ltd and the Investors.
The Audit Committee and Remuneration & Compensation Committee of the Company comprised with 3
Non-Executive Directors each and; to comply with the existing quorum provision of Articles of Association, all
members’ participation is required for all meetings of the Committee, which may not be possible for all the Committee
meetings. Now, the parties to the Shareholders’ Agreement have entered into an Amendment Agreement to rectify
Article 126(6), which provides for the quorum of 2 Directors or one third, whichever is higher.
The Company also proposes to alter Article 126(8) of the Articles, which restricts the Company from appointing a
different Non-Executive Director as Chairman of Committee, by excluding Committee Chairmanship from the scope of
the Article 126(8), and to adopt the corporate governance practice of appointing of different Non-Executive Director
as a Chairman of the Committee so that responsibilities of Chairmanship of Board and Committee will be distributed
between the two Non-Executive Directors.
The Company proposes to alter its Articles of Association by substituting for the existing Article 126 (6) & (8) the Article
mentioned under Item No. 6 (a) & (b). Further, to ratify all the decisions taken by Audit Committee and Remuneration &
Compensation Committee during the period starting from April 30, 2011 until the conclusion of this Meeting, the
Company proposes to alter its Articles of Association retrospectively, effective from the date of EGM i.e. April 30, 2011.
A Copy of the Articles of Association together with the proposed alterations is available for inspection by the Members.
None of the Directors of the Company is interested or concerned in the proposed Resolution. The Board accordingly
recommends proposed Resolution for approval of the Members.
By Order of the Board of Directors
Date: May 8, 2012
Place: Mumbai
Anubhav Kapoor
General Counsel and Company Secretary
Registered Office:
25, Rajiv Gandhi Infotech Park,
Hinjawadi, Pune – 411 057
3
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Directors’ Report
TO THE MEMBERS OF TATA TECHNOLOGIES LIMITED
The Directors are pleased to present their Eighteenth Annual Report on the Business and Operations of your Company
and the Audited Statement of Accounts for the year ended March 31, 2012.
1.
FINANCIAL RESULTS
The summary of financial results of the Company for the year ended March 31, 2012 is as follows:
(Amount in ` Crore)
Particulars
Income from Operations
Other Income
2011-12
2010 -11
644.00
493.16
24.26
11.58
Total Income
668.26
504.74
Operating Expenditure
469.08
361.18
Profit before Depreciation, Interest and Taxes
199.18
143.56
1.54
1.69
Interest
Depreciation
Profit / (Loss) before Tax
Provision for Taxes
Profit / (Loss) after Tax
21.16
14.76
176.48
127.11
45.77
30.06
130.71
97.05
Balance brought forward from previous year
128.62
93.66
Amount available for Appropriations
259.33
190.71
APPROPRIATIONS
Interim Dividend
38.03
26.09
Proposed final Dividend
29.60
18.64
Tax on Interim / Proposed Dividend
10.97
7.35
General Reserve
14.00
10.00
166.73
128.62
Balance carried to Balance Sheet
2.
REVIEW OF BUSINESS OPERATIONS
The Company recorded an overall revenue growth of approximately 32.40% with an increase of approximately
30.59% in revenue from sale of products and services, from Rs. 493.16 crore in 2010-11 to Rs. 644 crore in
2011-12. Due to efficient cost management, increased focus on operating efficiencies and offshoring, the
operating profit registered an increase of approximately 38.74% over last year, while profit before taxes (PBT),
grew at a rate of approximately 38.84% on a year-on year basis. Profit after taxes (PAT) grew by approximately
34.68% during the same period.
During this period, services revenue increased by 33.14% and product sales increased by 15.31% over last year
to reach figures of Rs. 562.52 crore and Rs. 81.48 crore respectively.The services revenue comprises:
4
1.
Engineering Automation Group [EAG]:
EAG addresses the engineering and design needs of manufacturers through services for all stages of the
product development and manufacturing process.
2.
Enterprise Solutions Group [ESG]:
ESG addresses the Information Technology needs of manufacturers including business solutions,
strategic consulting, ERP implementation, systems integration, IT networking and infrastructure
solutions and program management.
3.
Product Lifecycle Management [PLM]:
PLM addresses the product development technology solution requirements of manufacturers including
end-to-end implementation of PLM technology, best practices and PLM consulting. PLM also includes the
Company’s proprietary applications iGETIT® and iCHECKIT®.
3.
DIVIDEND
The Board declared an interim dividend of Rs. 3/- per share in the first three quarters of the financial year 2012
totaling to Rs. 9/- per share. Considering the financial performance, the Board recommends a final dividend of
Rs. 7/- per share.
In addition to the interim dividend of Rs. 9/- per share for the financial year 2011-12, with the proposed final
dividend, the total dividend for the financial year 2011-12 comes to Rs. 16/- per share. The total dividend for the
financial year 2010-11 was Rs. 12/- per share.
4.
BUSINESS OUTLOOK
Your Company is highly focused on delivery of value to its customers, marketing and sales and as such, it is
seeing improved order bookings. The Company expects improved growth in revenue, EBITDA and profit after
tax in the coming years. Please refer the section on Management Discussion and Analysis for more information.
5.
CHANGES IN SHARE CAPITAL
During the year, the following changes have occurred in the authorized and the paid-up equity share capital of
the Company:
a)
The authorized share capital of the Company remained unchanged at Rs. 60.70 crore divided into
6,00,00,000 equity shares of Rs. 10/- each and 7,00,000 0.01% cumulative non-participative compulsorily
convertible preference shares of Rs. 10/- each.
b)
The Company has allotted 37,46,505 and 18,73,253 fully paid Equity Shares to Alpha TC Holdings Pte. Ltd
and Tata Trustee Company Ltd - Trustee to Tata Capital Growth Fund - I respectively, on a preferential
allotment basis, on May 16, 2011. Further, 35,125 equity shares were allotted on exercise of the employee
stock options during the year.
Hence, the paid-up capital of the Company increased from Rs. 37.32 crore to Rs. 42.97 crore. The Company is
committed to employee participation in the future of the Company and has promoted and implemented
various stock based incentive and ownership schemes from time to time. The details for the last year are
provided in Annexure I to this report.
6.
HUMAN RESOURCE DEVELOPMENT
The Company employs 4307 professionals, including permanent and contractual, as on March 31, 2012. The
total employee strength of the Company and its subsidiaries, as on March 31, 2012 was 5443, with professionals
serving clients in 25 countries in five continents. The Company’s philosophy is to employ citizens of those
countries in which it operates. This helps in the better engagement of the customers, the Company serves.
Please refer the section on Human Capital in Management & Discussion Analysis report for more information.
7.
CORPORATE SUSTAINABILITY
The shareholders are advised to refer the separate section on the Corporate Sustainability in this report.
8.
QUALITY INITIATIVES
The Company continued its business excellence journey throughout FY 12. In the year 2011, Company
participated in a group initiative called Tata Business Excellence Model (TBEM) external assessment as a single
organization representing all its geographies.The Company has made significant improvements in the maturity
of its processes as is evidenced by the shift in its TBEM score band from ‘Early Improvements (351-450)’ in 2010 to
‘Good Performance (451-500)’.
The Company intends to move further up on the score band in FY 13 external assessment. A detailed action plan
is made based on the outcomes of the assessment. A senior executive has been appointed in the office of the
CEO and Managing Director to steer the business excellence journey.
The Quality Management System (QMS) is a consolidation of best practices from across different locations of
the Company. It also helps in streamlining the internal processes and inter departmental interactions. These
practices are designed to provide a consistently high level of service to Company’s customers.
The QMS is aligned to the requirements of the quality standards ISO 9001:2008 and AS 9100 C. All delivery
locations of the Company – Pune, Bangalore and Thailand (this year) have been certified to these standards
following the successful completion of recertification audits conducted by Dekra (Netherlands and USA).
5
Eighteenth Annual Report 2011-12
Tata Technologies Limited
All projects handled from the quality certified locations are handled through the organizational project
management process called Global Engagement Model (GEM). This is web enabled system through an IT tool
and is called GEM-iT.
GEM-iT has been further enhanced in line with the current business structure. Dashboards have been
configured to facilitate project tracking and monitoring along the lines of current verticals. Key quality metrics
are tracked through this system and provides management a view of different verticals and projects within.
The main delivery location in Hinjawadi, Pune will be undergoing the assessment in FY 13 for recertification of
the Information Security Management System (ISMS) to the security standard ISO 27001 certification. This is an
essential quality standard which demonstrates the organization’s ability to secure customer and business
related information.
9.
INFORMATION TECHNOLOGY (IT) INITIATIVES
The Company has invested in strategic IT Initiatives designed with its business goals. This provides efficiencies
and scalability to all stakeholders and further integrates operations across its three territories.
IT Infrastructure & Operations:
Tata Technologies upgraded its IT infrastructure over the past year to enable the growing business
requirements across (a) Increased Customer Connectivity requirements with key customers (b) Infrastructure
requirements for New / Expanded Sales / Delivery Facilities and (c) New & existing Business Applications
deployed globally.
The Company upgraded its core Infrastructure by deploying New Blade servers, additional storage and tape
backup libraries were deployed in the Company’s data centers. Server virtualization strategy was continued, to
provide higher performance & uptime while reducing the space, power and cooling requirements. The
Microsoft Exchange 2010 platform was leveraged to improve collaboration and mobile capabilities to
employees. Network Appliances (NetApp) across key facilities supported the Company’s growing data
management requirements.
Software Asset Management (SAM) of Engineering & Business Software assets continued to be a key focus area
throughout the year. The SAM initiative and associated governance resulted in better utilization of the
Company’s software assets.
The new 550 seat state of the art facility at Blue Ridge was fully operationalized to support key customers while
taking advantage of SEZ export benefits. Offices at Bangalore, Delhi, and Coventry (UK) were expanded. The
Company upgraded its Voice Communications framework powered by Avaya Voice-Over-IP technology to
improve communication across key facilities. The new VOIP PBX has been deployed at key facilities and is
planned for expansion across other facilities in the coming year.
Engineering Systems & Customer Collaboration:
The Company consolidated engineering servers, licenses and data in each of the key delivery centers to better
manage customer information, improve efficiency, and reduce risk of data loss. As part of the Customer
Collaboration activities, data transfer circuits between, the Company and several of its key customers were
upgraded to support the growing development activities across our delivery centers. Technology
improvements - such as local data caching, and WAN acceleration – aimed at increasing our effective
collaboration capabilities was also piloted as part of the offshore delivery center growth.
IT Service Delivery (Enterprise Applications):
The Company matured global process deployments across its major process areas / associated business
systems (Opportunity2Order, Deal2Delivery, Hire2Retire, Billing & Finance & Decision Making / Analytics).
Enterprise Deployments as planned through a comprehensive Systems Value Engineering Study (SAP) were a
key component of the IT Strategy and Execution for FY12.
Hire2Retire: Project Gateway, the Company initiative to streamline, standardize and automate core Hire2Retire
processes globally started delivering business benefits across all locations. Key processes such as Employee Self
Services, Travel Requisition / Expense-Claims Processing & e-Recruitment were launched globally with other
services (eg. e-Procurement, e-Separation) planned for launch in the coming quarter.
Opportunity2Order: The Company increased global usage of single (Microsoft) CRM system across its Global
Services / PLM Solutions Go To Market divisions. The Company upgraded its CRM to the latest Microsoft CRM
2011 platform, which enables automation in areas such as Customer Complaint Management, Products
Contracts Maintenance & Renewals. Sales teams were provided easy visibility to their Open Orders / Invoices via
the CRM system by integrating the associated SAP information.
Deal2Delivery: The Company rolled out a single Deal2Delivery process framework, with associated
6
methodologies incorporated both in the CRM & GEM (Project Execution) systems. The Company expanded its
deployment of the GEM Project Execution systems across its LOBs and key delivery centers. Significant
functionality / user productivity enhancements were completed partnering with the Tata Technologies Process
Group. The Company launched a Knowledge Management initiative, under the GEM framework across its key
Delivery Centers. All delivery processes and systems were integrated working with the Global Delivery
Operations & Process group. Processes such as Skills tracking, managed by ‘mySkills’, were further matured and
leveraged as part of operations.
Decision Making & Analytics: The Company expanded its framework for a comprehensive decision making
and analytics system powered by Business Warehouse (BW) and Analytics viewing technologies (SAP /
Qlikview). Key analytics across Human Resource Department, Project Profitability and Revenue Analytics were
enhanced and new SAP BW analytics were rolled out as part of Project Gateway with access to key managers via
the Employee Portal.
Information Security Management System (ISMS) Operations:
Information Security and the protection of customers / corporate / employee information assets continued to
be a key focus. Through the deployment of ISMS (Information Security Management System) and its associated
governance, the Company successfully recertified its ISO27001 status in its key Delivery Centers. Information
security governance was further improved with regular reviews of info security policies and procedures,
security incident and end user awareness all through tracking of key security metrics.
The Company continues to adopt ITIL as its Service Delivery Framework for all internal operations.The Company
also continues to adopt an IT Steering Committee governance framework to prioritize requirements across all
parts of its business while ensuring return of its IT investments.
10.
SUBSIDIARY COMPANIES AND JOINT VENTURE
The Company had eight subsidiary companies as on March 31, 2012.
Tata Technologies Ltd
(India)
100%
Tata Technologies Pte Ltd.
(Singapore)
100%
INCAT International
Plc (UK)
99.24%
Tata Technologies Inc
(US)
100%
100%
Tata Technologies
(Canada)Inc,
Canada
100%
Tata Technologies
Europe Ltd
(UK)
INCAT GmbH
(Germany)
100%
Tata Technologies (Thailand) Ltd.
(Thailand)
100%
Tata Technologies
de Mexico, S.A. de C.V.
(Mexico)
North America
Europe
Asia Pacific
Consolidated Results: In accordance with the Statement of Accounting Standard on Consolidated Financial
Statements (AS 21) issued by the Institute of Chartered Accountants of India (ICAI), subsidiaries of the Company
and 50% share in Joint venture Company have been considered in the Consolidated Financial Statements of the
Company, attached in a separate section of this report. As may be seen from the consolidated statements, the
consolidated revenue was Rs. 1666.95 crore, an increase of 31.46% against Rs. 1268.05 crore in the previous year.
The profit before tax was Rs. 271.83 crore as against Rs. 179.91 crore in the previous year, recording a growth of
51.09%.The profit after tax stood at Rs. 208.37 crore as against Rs. 139.02 crore recording a growth of 49.88%.
The Services/Products business mix was a 73/27 split respectively (Rs. 1196.78 crore for services and Rs. 445.83
crore for products) compared to FY 2011 when the Company recorded Rs. 881.86 crore for services and Rs.
373.97 crore for product or a 70/30 mix. The Americas produced Rs. 558.86 crore with Asia Pacific recording Rs.
742.43 crore and Europe generating Rs. 561.63 crore. The three territories combined produced Rs. 1666.95 crore
top line revenue after reducing inter-company billing, in FY 2012 compared to Rs. 1268.05 crore for FY 2011.
7
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Joint Venture: Tata HAL Technologies Ltd is a 50:50 joint venture between Tata Technologies Limited and
Hindustan Aeronautics Limited (HAL), with its corporate office situated at Bangalore, Karnataka. Tata HAL
Technologies Ltd is in the business of providing engineering and design solutions and services in the domain of
aerostructures for the aerospace industry. The Company reported revenues of Rs. 5.10 crore for the FY 2011- 12
as against the revenues of Rs. 3.34 crore in FY 2010- 11 an increase of 52.69% over last year. The loss for the year
was Rs. 1.63 crore as against Rs. 0.57 crore in FY 2010- 11. Considering the tax losses of the Company, no provision
for tax has been made in the books of account.
The Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted an approval for exemption
from attaching the accounts of subsidiary companies to the accounts of the holding company, subject to
fulfillment of certain conditions. Accordingly the said documents are not being attached with the Balance
Sheet of the Company. A gist of the financial performance of the Company’s subsidiaries is attached as part of
the report.
They are also kept at the Company’s Head Office/Registered Office as well as that of the respective subsidiary.
These documents/details will be made available for inspection upon request by any member of the Company
or to any member/Investor of its subsidiary.
11.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956 and the Articles of Association,
Mr C Ramakrishnan and Mr R Gopalakrishnan are liable to retire by rotation and eligible to offer themselves for
reappointment.
12.
STATUTORY AUDITORS
M/s Deloitte Haskins & Sells (DHS), Chartered Accountants (Registration No. 117366W), the Company’s
Statutory Auditors, hold office until the conclusion of the ensuing Annual General Meeting. It is proposed to
reappoint them to examine and audit the accounts of the Company for the financial year 2012-13. M/s Deloitte
Haskins & Sells, have pursuant to Section 224(1B) of the Companies Act, 1956, furnished the relevant letter
confirming their eligibility and willingness for reappointment as the Statutory Auditors, should they be so
appointed.
The members are requested to appoint Auditors for the current year and authorize the Board of Directors to fix
their remuneration.
13.
INTERNAL AUDITORS
The Company has appointed M/s Ernst & Young as Internal Auditors of the Company, during the last year, to
conduct the Internal Audit of the Company and its subsidiaries.
14.
PUBLIC DEPOSITS
Your Company has not accepted any deposits from the public in terms of Section 58A and/or Section 58AA of
the Companies Act, 1956 during the year under review. And hence, no amount is outstanding under the head
Public Deposits as on March 31, 2012.
15.
PARTICULARS OF EMPLOYEES
A statement containing the names and other particulars of employees of the Company as required under
Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is
given as Annexure II to this Report.
16.
MANAGEMENT DISCUSSION AND ANALYSIS
The shareholders are advised to refer the separate section on the Management Discussion and Analysis in this
report.
17.
CORPORATE GOVERNANCE REPORT
The shareholders are advised to refer the separate section on Corporate Governance in this Report.
18.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
Conservation of Energy: The operations carried out by the Company in all of its locations are such that they are
not deemed as energy intensive. However, the Company constantly makes efforts to avoid excessive
8
consumption of energy. Measures were taken to increase awareness about need to conserve power and water.
At the Hinjawadi delivery center, solar water heaters are installed in the Guest House and the Wellness Centre.
The schedule of switching on/off lights and AHU’s was monitored continuously keeping in mind factors of
climate, availability of power and working hours. LED lights are being considered as a replacement for CFL
wherever possible in all new facilities. The Company remains committed to deploying more efficient energy
saving measures. New technologies/options are regularly monitored and efforts will continue to conserve
energy.
Technology Absorption: The Company’s commitment to become the world leader to the manufacturing
industry is reiterated.To scale Tata Technologies, to rapidly respond, to manage risk, to position the Company for
long-term sustainability, to diversify the Company’s business into new industry verticals, geographies and new
lines of service, the Company’s Engineering teams have been working with automotive, aerospace, industrial
and consumer goods companies across the globe for two decades to create better products which benefit
people.
The Company has identified innovation as key to its survival and success. It holds an annual innovation contest
to stimulate and support innovation. Efforts continue to make innovation a key component in all the domain
areas.
Complete Automobile Vehicle Engineering: The Company has capability to engineer and deliver complete
vehicles, from concept to production to continuous engineering while the vehicle is in service.
The services provided by the Company are entirely focused on helping other companies build better products,
define better processes, and reduce costs along the way. As an example of technological capabilities, the
Company has developed technological capabilities in knowledge based engineering and CAE analysis along
with following areas and is already providing services to major clients in these areas:
•
Digital Manufacturing: The Company provides end to end solutions in the digital manufacturing
domain – from planning to layout to simulation to implementation which enables engineers to
make intelligent decisions in the virtual environment without committing to the costs of physical
equipment.
•
PLM: The Company integrates complete product lifecycle solutions with engineering and design
processes, industry-leading technology, and resources to create better products. The Company
covers all the bases with 4D Process Consulting, a time-tested method of building a better PLM
solution. This approach guarantees careful analysis of unique business needs, to find the right
solution for the client’s processes and technology.
Constant efforts are underway to improve the engineering and design skills of the Company’s professional staff.
Opportunities are created to achieve technological strengths and achieve technological excellence in the areas
where the Company operates. The Company continues to upgrade its technological capabilities on a regular
basis.The absorption of newer and better technology, upgradation of the technological strengths and constant
innovation are given high importance.
Foreign Exchange Earnings and Outgo: Information pertaining to the foreign exchange earnings and outgo
during the year under review, in terms of the Notification 1029 of 31-12-1988 issued by the Department of
Company Affairs is as follows:
(Amount in ` Crore)
Particulars
Earnings in foreign currency
Expenditure in foreign currency
19.
2011- 12
2010 - 11
179.86
110.91
60.31
40.56
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act 1956, the Directors, based on the representations received
from the Operating Management, confirm that:
i.
in the preparation of the annual accounts, the applicable accounting standards have been followed
and that there are no material departures;
ii.
they have, in selection of the accounting policies, consulted the Statutory Auditors and have applied
them consistently and made judgments and estimates that are reasonable and prudent so as to
9
Eighteenth Annual Report 2011-12
Tata Technologies Limited
give a true and fair view of the state of affairs of the Company at the end of the financial year and of
the profit of the Company for that period;
20.
iii.
they have taken proper and sufficient care, to the best of their knowledge and ability, for the
maintenance of adequate accounting records in accordance with the provisions of theCompanies
Act, 1956, for safeguarding the assets of the Company and for preventing and detectingfrauds and
other irregularities;
iv.
they have prepared the annual accounts on a going concern basis.
ACKNOWLEDGMENTS
Your Directors would like to express their heartfelt gratitude to all the customers, business partners, bankers and
auditors for their continued support and association. The Directors also wish to thank the Government and all
the statutory authorities for their support and co-operation.
The Directors would also like to place on record their appreciation of the dedicated, individual and collective
contribution of all the employees in the overall growth and progress of the Company during the last year.
The Directors, finally, would like to specially thank and place on record their gratitude to all the members of the
Company for their faith in the management and continued affiliation with the Company.
On behalf of the Board of Directors
Date: May 8, 2012
Place: Mumbai
10
S RAMADORAI
Chairman
12
Chandra R
Gupta Samrat
Joshi Ashok G
Julka Wishwas
Petkar M Rajendra
Umamaheswaran T N
Name
49
52
39
56
37
45
50
Age
(Years)
President, Global Services & COO, APAC
Vice President - Global Enterprise Solutions
Chief Financial Officer
Senior General Manager - VPG CAE & TS
Vice President - PLM Solutions - APAC
Senior GM (Engines) ERC
Chief Technology Officer
Designation/Nature of duties
12,291,629
6,038,016
8,519,834
7,193,099
7,760,655
6,145,193
8,617,338
Gross
Remunaration
`
8,299,295
4,183,321
5,902,921
4,929,343
5,476,565
4,324,889
5,954,042
Net
Remunaration
`
M.S., B.Tech
BE (Mech) PGDBM
B'Com, MBA, CFA
BE
DEE, B Tech, MBA
BE, M Tech
M.Tech
Qualifications
27
31
15
34
13
23
27
Total
experience
(Years)
01-Apr-07
01-Apr-97
18-Apr-07
01-Apr-97
09-Feb-05
01-Oct-99
01-Apr-97
Date of
Commencement
of employment
TTPL, Singapore-Vice President - EAG-5 yrs
Tata Motors Limited- Senior Manager - 1 yr
HCL-General Manger - Finance-6 mths
Tata Motors Limited-Manager-8 yrs
Comsat Max Limited - Business Manager - 6mths
Tata Motors Limited- Manager - 2yrs
Tata Motors Limited-Divisional Manager-4 yrs
Last Employment/Designation-Period
Date: May 8, 2012
Place: Mumbai
S RAMADORAI
Chairman
On behalf of the Board of Directors
The Gross remuneration shown above is subject to tax and comprises of salary, allowances, monetary value of perquisites as per income-tax rules, and company's contribution to provident fund and
superannuation fund.
In addition to the above remuneration, employees are entitled to gratuity, medical benefits, etc., in accordance with the company's rules.
The net remuneration is arrived at by deducting from the gross remuneration, income-tax, company's contribution to provident fund, superannuation fund, and the monetary value of non-cash perquisites,
wherever applicable.
All the employees have adequate experience to discharge the responsibilities assigned to them.
The nature of employment in all cases is contractual.
None of the employees mentioned above is a relative of any Director of the Company.
7 Yajnik Samir
1
2
3
4
5
6
Sl
no
Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975
and forming part of the Directors’ Report for the year ended March 31, 2012
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Annexure ll – Directors’ Report
Management Discussion & Analysis
A.
Company Overview
Tata Technologies is a leading manufacturing consulting organization, tracing its roots back to 1981, offering
Engineering Services Outsourcing (ESO) and Enterprise IT Services which optimize clients’ product
development process and the entire manufacturing ecosystem. Tata Technologies complements its’ Services
portfolio through the provision (reselling) of the enabling software technologies, including software developed
by Tata Technologies, that underpin successful Product Development and Manufacturing Business (Enterprise)
systems.
Tata Technologies is a company of engineers, led by engineers, with 5,443 associates, representing 17
nationalities. Tata technologies serves clients in 25 countries, with a delivery model specifically designed for
engineering and manufacturing IT engagements that offers a unique blend of deep, local expertise integrated
with our six global delivery centers, Detroit (USA), Coventry (UK), Pune (India), Bangalore (India), Stuttgart
(Germany), and Bangkok (Thailand).The international headquarters is located in Singapore.
B.
Offerings
Manufacturers are increasingly challenged to provide safer, environmentally friendly, innovative, content-rich
products that are tailored to local markets at the same or lower cost.Tata Technologies helps its customers meet
these business requirements through four service groups:
VPD – Vehicle Programs & Development (VPD)
The VPD provides complete outsourced program management, concept development, detail design, validation
and manufacturing planning services. Projects of this scale and complexity are achieved through a combination
of automotive experts in the US and Europe, coupled with India’s most experienced automotive engineers.
Programs include electric vehicles, or EV variants that help achieve sustainability targets, while providing
mobility at an affordable price point. The eMO electric vehicle, designed by Tata Technologies, showcased at the
2012 International Auto Show in Detroit, was a first for any India-based engineering services firm.
E&D – Outsourced Engineering & Design
The services of this group include concept development, VA/VE, CAE, detailed engineering, embedded software
development, product verification, and manufacturing process design, tool design and validation, applied to
major product subsystems and components. Offerings include the provision of providing services from
offshore engineering centers in India and Thailand.
PLM – Product Lifecycle Management Solutions
The PLM optimizes product development processes, implementing collaborative PLM tools, a major
contributor to ER&D investment efficiency, especially for global engineering teams with extensive supply
chains. Tata Technologies is the world’s largest independent reseller of PLM technology. It and its customers are
among the world’s top users of PLM technology.The company’s engineers use these products to deliver services
to our clients worldwide. It packages the insights and best practices we have developed through our
engineering heritage into service offering templates to improve the efficiency of engineering teams at Tata
Technologies and it’s clients.
ESG – Enterprise Solutions Group
The ESG provides consulting and IT solutions that help manufacturing customers in optimizing critical
enterprise processes through the application and data analytics of Enterprise Resource Planning, (ERP),
Manufacturing Execution Systems, (MES), and Customer Relationship Management, (CRM), including the use of
social media and improving manufacturing planning and performance. It also has extensive experience in
rapidly integrating the processes, systems and data of companies acquired by manufacturers.
C.
Manufacturing Industry Outlook
The global manufacturing industry continued to improve and investments in product development continued
to grow. Every manufacturer is attempting to attract and retain customers through the rapid introduction of
innovative and differentiated product; to differentiate their products from competition, to meet regulatory
requirements and adapt to, or design product for high growth markets – at attractive price points and great
margins. Every manufacturing Engineering Research & Development, ER&D, group is constrained by budget
and talent shortages, searching for investment efficiency and lowering fixed costs. Our product development
process experience, mastery of the virtual world, long-standing partnerships with leading PLM suppliers and
our own, first-hand experience in leveraging PLM technologies, enables us to knit our own and the client’s
global teams into an efficient “Product Development machine” improving cycle time, throughput and ‘FTC’, first
time through design capability, lowering both the frequency and magnitude of design changes and costly
physical properties.
13
Eighteenth Annual Report 2011-12
Tata Technologies Limited
According to a recent Booz & Co. analysis, in Tata Technologies’ core industries, Automotive, Aerospace &
Defense and Industrial Machinery, the Engineering Research and Development, ER&D, spend continued to
grow. Auto and Aero grew 8.5% CAGR (1998 to 2010) and is forecast to grow at 9.1% CAGR between 2012 and
2020.The Industrial Machinery ER&D spend for the2012-2020 period CAGR is 0.8% and at USD $19Billion in 2010
which is still substantial. Across industries, India and China headquartered firms continue to rapidly increase
ER&D spend, 2005-2010 at 41% CAGR, and are expected to outpace ROW. Engineering Services sourced to low
cost countries is forecast to grow at 16.4% CAGR between 2012 & 2017.NASSCOM reports that “the Indian ITBPO sector achieved a significant landmark in FY2012 crossing aggregate revenues of USD $100 Billion and
India’s market share in the global sourcing arena (grew to) about 58% in 2011. India ER&D exports reached USD
$10.2 Billion with YoY growth of 14%”. * Tata Technologies is positioned to capitalize on the increase in spend
with core competency in the convergence of manufacturing domain skills with leading edge technology
coupled with deep experience in both mature and emerging markets.
*“NASSCOM,The IT-BPO Sector in India, Strategic Review 2012”,Pages 3 and 15
D.
Automotive Industry
The automotive industry continues to emerge from the recession with strong growth led by emerging markets,
factors such as increased urbanization, shift to smaller cars, increased consumer focus on value, the shift from
mature markets, global overcapacity, talent shortages, especially in engineering and an environmentally
friendly product life cycle. According to Deloitte Touche Tohmatsu’s senior automotive leaders,“A massive shift
in the competitive landscape will see China and India emerge as major players in the industry. These markets
will join Western Europe, Japan, Korea, and the United States as the centers of design and manufacturing for
original equipment manufacturers (OEMs) and their suppliers. An era of “conscious consumption” will emerge.
Customers around the world will be more cost conscious, especially in the developing world where millions of
people will make their first ever car purchase. Environmental considerations will also weigh heavily on the
industry towards 2020. The fierce race to develop and produce electric vehicles, spurred by both customer
demand and government incentives, will mean that up to a third of all cars purchased in developed countries in
2020 will not be propelled by an internal combustion engine.”**
**“A new era: Accelerating toward 2020 — An Automotive Industry Transformed”,Page 3
Our company sees a large proportion of ER&D spend with emphasis on four main areas …
1.
Electronics and embedded systems, used to differentiate product, offer value-added services and meet
regulatory challenges, especially in …
• Improving fuel economy
• Telematics / Communications – the“connected car”
• Safety & Security Features
• Infotainment
2.
Alternative Propulsion systems, such as plug-in hybrids, full electric, and fuel cell powered vehicles will
continue to command high levels of investment, subsidized by government in many parts of the world.
3.
Reducing weight, lightweight structures – in part, through the use of lightweight materials – Highstrength steel, aluminum, magnesium and carbon-fiber reinforced polymer, CFRP.
4.
Future products and manufacturing processes will be more eco-friendly, leveraging eco-friendly
materials and requiring less energy, system-wide, raw material through recycling.
Addressing these automotive market trends, Tata Technologies eMO electric mobility study, profiled in another
part of this report, represents a big leap forward for Tata Technologies in innovation in the sector. The eMO,
which was unveiled in January 2012 at the International Automotive Show in Detroit is the world’s first
complete vehicle study developed by an India-based engineering services company. This program showcases
innovation in automotive packaging and design, manufacturing processes, as well as EV engineering
benchmarks; and was invented to go to market at the disruptive price point of $20,000.
E.
Aerospace& Defense, A&D
The civil aerospace market is rapidly expanding in developing markets and replacements due to the demand
for fuel efficient fleet in developed markets. In fact PwC says, referring mainly to production capacity, “Our
analysis indicates that a significant proportion of suppliers are at risk of not being able to deliver the ramp-up
that is required.” *** This rapid expansion is putting a strain on supply chains in ER&D as well. Innovation is
imperative to drive down costs and meet new customer and regulatory requirements such as stronger, lighter
and smart materials and sensors which monitor the equipment health and reducing maintenance costs. Tata
Technologies experienced teams in aero-structures design, manufacturing process planning and tool design
specifically to address this need. PwC also reports that M&A activity is at record levels in 2011 and consolidation
is likely to continue. The need to integrate disparate PLM and ERP/SAP systems from the consolidated
companies soon follow, which is a core capability of Tata Technologies. Tata Technologies has been
implementing PLM, SAP and MES solutions in A&D,for more than 15 years. Our ability to implement customized
PLM and SAP solutions enables entire organizations and their external networks to respond in unison, more
efficiently, to changing business conditions.
*** PwC Mission control 2011 annual and fourth-quarter review page 3
14
F.
Industrial Machinery
The market for Industrial machinery continues to grow, especially in construction, mining and farm equipment
sectors. As the demand increases, especially in emerging markets, so do the investment levels. Caterpillar and
John Deere are expanding their footprint in China with the recent acquisitions and new factory expansion.
Demand in India is strong. In the US, there is an increase in federal funding for highway infrastructure, a key
driver for growth. There is focus on effective supply chain planning following volatility in raw material input
prices and increasing global footprint. Tata Technologies continues to expand in the Industrial Machinery
industry especially in using frugal engineering principals to design and products and recommend local
sourcing opportunities to meet local requirements.
G.
PLM Market
The Comprehensive PLM Market experienced strong global growth in CY2011 annually increasing by 15.4% to
USD $29.9 Billion according to CIM data. **** CIMdata also estimate that “cPLM will grow 10.6% per year from
2012 to 2016, driven by growth in simulation and analysis, systems engineering, non-traditional industries such
as financial and services, expanded push for sustainable and green design, continued growth in the mid-market
and growth in Asia-Pacific and other emerging areas” where Tata Technologies is well positioned. Tata
Technologies has long term partnerships with the leading software providers such as Dassault, Autodesk and
Siemens that dominate the market. Cost pressures on manufactures as well as high demand for new products,
especially from emerging markets, will continue to push manufacturers to improve product development
efficiency across the entire ER&D network by intelligently implementing advanced PLM solutions. Continued
consolidation in the industries we serve, drive the demand for rationalization and integration of product
development processes, methods and tools. Tata Technologies engineering process approach blended with
deep knowledge of the capabilities and limitations of software tools addresses this demand is illustrated in the
article in this report titled“ Helping racing legends be their best”.
****2011 Market Analysis Results, PLM Market & Industry Forum, Shanghai China.
Comprehensive PLM - Investments
Market history and forecast - software + services - 2007 - 2016
$ 60
Other Tools
EDA
$50
US $ ( Billions)
AEC
Focused Apps
$40
Digital Manufacturing
$30
Stimulation & Analysis
NC Non Bundled
$20
MCAD - Design Focused
MCAD Multi - Discipline
$10
SI/ Feseller/ VAR
Comprehensive cPDm
$0
2007
H.
2008
2009
2010
2011
2012
2013
2014
2015
2016
Est
Est
Est
Est
Est
Human Capital
Tata Technologies strives to offer a Signature Employee Experience to enable a High Performance Culture and
Build Winning Teams. This ensures a consistently motivated workforce with customer focused competencies
and a strong employee brand. We are committed to the belief that this strategy is a critical determinant of
shareholder value.
15
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Return on Human Capital (ROHC)
The ROHC model paves the way to measure HR actions on business performance through a matrix of twenty HR
initiatives and programs. Fig below illustrates the ROHC model and its linkage to business outcomes. Each of the
twenty initiatives and programs were analyzed to understand the current status, target and the associated
action plan to achieve the same.
SE1: RETURN OF HUMAN CAPITAL
“Best Employer”
What
Employee
Experiences
Create High Performance
Culture
Workforce Planning
Scalable HR Systems
Competency Development
Employee Branding
Employee Benefit Policies
Compensation Management
Recruitment
Campus 2 Corporate Training
Competent Sales Force
Referral Program
Employee Induction
Incentive Program
Strategic Hiring
Retention Management
Control Cost Of Recruitment
Talent Pool
SLA of Recruitment
Third Party Hiring
Graduate Engineers
Program (FUNDA)
Fair Appraisals
What HR
Actions on
What
Business
Experiences
Offer Signature Employee
Experience
Build Winning Teams
Workforce efficiency
(EBITDA/Cost of employee)
Workforce cost control (Cost
of employee / Revenue)
Building premium workforce
(Billing rate / employee)
MARGIN GENERATION
(EBITDA/EMPLOYEE)
Growing workforce
(Revenue growth
per Employee)
INCOME GENERATION
(REVENUE/COST OF EMPLOYEE)
Return On Human Capital
(EBITDA/EMPLOYEE)
ROHC is ingrained in the DNA of the HR team and all actions are now linked and reported against the ROHC
initiatives. The HR PMO is a key stakeholder helping to track, monitor and ensure implementation of the ROHC
initiatives and programs.
FY12 Q2
FY12 Q1
1. Appraisals
completed and
on time salary
Increments
2. Unique Jobs /
Technical and
Managerial
Competencies
3. Tata Technologies
Leadership Practices
4. SEZ – Infrastructure
5. FUNDA –GET
training program
ROHC Improvements
1. Launch of ROHC
2. Uphoria & Employee
Events
3. KPI setting completed
4. TGELS for Senior
Leadership team with
TMTC
5. HR PMO established
6. Employee Referral, Spot
Award & Relocation
Policy
7. SAP Hire 2 Retire
launched
FY12 Q3
FY12 Q4
1. Gallup Engagement
Survey
2. iSMART – Harvard
Manage Mentor
Program with TMTC
3. HR Centralization
4. Interest Subsidy on
Housing Loan Policy
5. Succession planning
for ABC with PDI
Ninth House
6. ESS/MSS, e-Travel
launched
1. EVOLVE for Middle
Managers
2. ROHC & HR Budget
rollout for FY 13
3. UK Deputation Policy,
International Travel
Policy & Car Lease
Policy
4. Talent Pool & FTSS
2012
5. Gallup Action
Planning completed
6. Performance
Management Policy
7. e-Recruitment
launched
ROHC Results
FY07
FY08
FY09
FY10
FY 11
Q1
Q2
Q3
Q4
FY 12
Avg. Global headcount
3,241
3,855
3,967
4,036
4,256
4,764
5,045
5,173
5,244
5,244
-
614
112
69
345
508
281
128
71
988
Attrition (Global)
17.5% 16.3%
16.0%
18.0%
18.0%
18.3%
19.0%
18.4%
16.0%
16.0%
EBITDA/Employee
11,912 19,144
25,801
31,982
45,231
50,962
56,555
72,031
75,980
63,882
Net Addition
EBITDA/Employee
Cost
10%
14%
21%
31%
37%
41%
40%
46%
45%
43%
Employee Cost
as a % of Revenue
55%
48%
46%
45%
44%
44%
44%
42%
42%
43%
Employee per Hr
34.00
36.90
34.90
30.45
34.05
31.29
33.19
37.53
40.74
34.53
Volume Growth
(Avg. Manpower)
Gallup Score
3.35
19%
3.35
3%
3.46
-1%
3.46
5%
3.46
12%
3.46
6%
3.46
3%
3.57
1%
3.57
23%
3.57
Billing Rate per
16
Talent Acquisition
Technology is a crucial component of an integrated HR management initiative. An IT enabled workflow
between demand generation for resources and final deployment for revenue generation forms the backbone
of our talent acquisition process. The facility enables all stakeholders in the resource acquisition cycle, to
seamlessly align & track fulfilment of business requirement.
Structured recruitment brand building initiatives continued for positioning the company as an employer of
choice for fresh recruits from Campus as well as lateral hires. Across the country,66 premium institutions were
covered for campus hiring. This represents an increase of 12% institutions over the previous year. The program
also focussed on lateral hiring and ran the highly creative PFLE (Passionate Fun Loving Engineers) campaign to
build sustainable differentiation for Tata Technologies as an employer brand. As a part of our continuous drive
for cost optimisation, we set up India offshore support for talent management for our North American
operations.
Talent Diversity
The company has improved its workforce diversity through equal-opportunity recruitment programs globally.
As on March 31, 2011, women constituted 13% of the total work-force. The segmentation of employees across
geographies was 78% in APAC, 12% in NA and 10% in EU.
Learning & Development
The organisational strategy and business plans define the thrust areas of learning and competency
development in Tata Technologies. In addition to the competency development areas identified by the strategy
and business plan, LOB specific and individual requirements are captured and translated by the L&D group into
the annual L&D plan.These plans are used to prepare the monthly schedules which are augmented by the just in
time project requirements from the business. FUNDA for Campus recruits is a benchmarked program with
industry and provides two months of structured inputs to new joinees in Technical and Cognitive areas. A wide
variety of e-learning programs were proliferated to all levels of employees. Our training achieved coverage of
3246 employees with an average of 5.2 days of training per person for the year.
Employee Capability Building: Tata Technologies believes that the company’s success in building internal
capability and motivation depends on individual talent being nurtured and people acquiring the right skills,
necessary to drive business objectives.
A number of programs have been launched in our endeavour to enhance Leadership Effectiveness. By
leveraging technology and a unique concept of modular progressive education, we devised the EVOLVE
program to impart Leadership training. The program is structured into 33 modules. The rest of the programs are
conducted using web technology and participants attend the class in a virtual classroom which ensures
collaborative learning and exchange of ideas.
iSMART, a program featuring a combination of
options for growth of soft skills, leadership
development, technical skill enhancement,
coaching and mentoring programs. iSMART aims at
developing necessar y characteristics and
behaviour at an individual level and bridge
company-wide identified competency gaps to
achieve our goals. The iSMART program started on 23rd. Dec’11 with the launch of online Harvard Business
Publishing courses. Globally, 2204employees registered for the courses and by 31st. March ’12, 1466 employees
completed the course.
I.
Risk Management
Risk Philosophy
In current scenario of global volatile and multi facet market a Company’s sustainability and growth are based on
risk management capabilities. A risk event that affects business is a significant occurrence in the life of any
Company, affecting directly on its ability to fulfill its business objectives.
The objective of risk management is to develop a culture and capabilities of identifying, assessing & mitigating
the risk at all levels/functions across the organization, by instituting framework, processes/policies suitable to
the Company and creating risk awareness which ultimately insures the Company’s sustainability in the business
and provide benefits to the Company’s stakeholders and customers. The followings are the broad objectives of
risk management:
1.
Reduce unacceptable performance inconsistency
Evaluate the likelihood and impact of major events and develop responses to either prevent those events
from occurring or manage their impact on the Company if they do occur.
17
Eighteenth Annual Report 2011-12
Tata Technologies Limited
2.
Build confidence of stakeholders
Increase transparency of risks and risk management capabilities, and improve the maturity in identifying
and managing critical risks.
3.
Strengthen corporate governance
Strengthen Board oversight, explain risk management roles and responsibilities, set risk management
authorities and boundaries, and effectively communicates risk responses in support of key business
objectives.
4.
Successfully respond to a changing environment
Assist management with evaluating the assumptions underlying the existing business model, the
effectiveness of the strategies around executing that model, and with identifying alternative future
scenarios, evaluate the likelihood and severity of those scenarios.
5.
Align strategy and corporate culture
Help management to create risk awareness and an open, positive culture with respect to risk. Centralize
policy setting and creates focus, discipline, and control. Increase accountability for managing risks across
the enterprise and facilitate timely identification of changes in an entity’s risk profile.
CE
N
Event Identification
Risk Assessment
Risk Response
Control Activities
Information & Communication
Monitoring
ERM Framework - COSO
2. Objective Setting
Risk
Management
Actions
Risk
Governance
le
op
Pe
Objective Setting
S U B S I D I A RY
BUSINESS UNIT
DIVISION
ENTITY - LEVEL
Internal Environment
6. Control Activities
7. Information
Communication
8. Monitoring
Proce
sse
s
M
PL
RT
PO
RE
CO
TI
RA
PE
O
IA
IN
N
O
IC
G
TE
RA
ST
G
S
Enterprise Risk Management (ERM) Framework
definition &
application of
organizational
structure, roles &
Optimization of Risk
responsibilities,
within the Risk
policies,
appetite
Risk
appetite &
Culture
limits
1. Intemal Environment
Risk & Value
Assessment
Identification, quantification
and reporting of risk
and value
3. Event Identification
4. Risk Assessment
5. Risk Response
ERM Focus Areas - Linkage to Framework
Definition
ERM is a process, effected by an entity's Board of Directors, management and other personnel, applied in
strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and
manage risks to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity
objectives.
The Company has established a formal Enterprise Risk Management (ERM). The Company has adopted the
recommendations on the Enterprise Risk Management framework provided by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). As a services focused Company, it is necessary for the
Company to manage risk at the individual transaction level and to consider aggregate risk at the customer,
industry and geographic, where appropriate.
ERM Organization and Process
The Executive Management Team of the Company is responsible for implementing the Risk Management
Framework under the direction of the Audit Committee of the Company, and the Audit Committee provides
periodical updates to the Board of Directors of the Company.The Board monitors the overall performance of the
Risk Management function.
18
ERM Organization and Process
Identification
Agreement
Mitigation
Communication
• Understand Current
initiatives
• Review risks with
functional heads
• Work out mitigation
plans
• Establish monitoring
mechanism
• Conduct Awareness
Workshop
• Finalize Major risks
• Presentation to the
Board
• Capture Risk
perceptions
• Assign likelihood/
impact scores
Risk Management Activities
A disciplined approach to risk is important in an organization such as ours in order to ensure that we are
executing according to our strategic objectives and this process is designed to identify potential events that, if
they occur, will affect our Company. The management has identified the following top 10 risks, classified into
external risk factors and internal risk factors, to help achieve business objectives in a robust manner.
External Risk Factors
Internal Risk Factors
1. Competitive Environment
1. Revenue Concentration
2. Inability to do business with Tata Motors’
2. Project Execution and Management
competitors
3. Human Resources Management
3. Exchange Rate Fluctuations
4. Customer Acquisition
4. Immigration Regulations
5. Suppliers’ bargaining power in Product
Solutions division
6. Leadership Bandwidth & Critical positions
External Risk Factors
1.
Competition Risk
The Company faces direct competition from the large and medium players in India, as well as from
international players in the IT and engineering services sectors. Competition from players in the U.S. and
Europe is also a cause of concern for the non-captive business. This could reduce the business prospects
of the Company in future.The potential competition would be:
•
In-house IT and engineering departments of large corporations setting up captive operations in
India and the APAC region.
•
Competition from established IT service providers moving into engineering
•
Competition from well-established western engineering service providers, as we increasingly work
in this space.
19
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Risk Management Activities
The Company has ensured its direct presence across geographies through the Company’s subsidiaries,
JVs, and branch offices. This should help the Company tap major markets across the globe. Through the
matured offshore development systems and the conscious efforts to move towards value-added
services, the Company is looking for deeper penetration of existing customers. We are also investing in
developing niche areas of services such as Full Vehicle Development Program (VPD) etc. The Company is
also striving for long term multi-year contracts and improving Global Engagement Model (GEM).These
niche practices position the Company as a focused player and help manage competition risk.
To beat the competition on its head, the Company has established the Vehicle Programs & Development
(VPD) Group, which employs a multidimensional engineering approach to vehicle development by
providing various solutions including styling, Knowledge Based Engineering (KBE), CAE, CAD, DMU, and
Complete Vehicle Integration.
2.
Inability to do business with Tata Motors Competitors
Tata Motors Limited (TML), the parent Company, is perceived to be a competitor by many global
automotive companies. The Company is facing this risk while positioning itself as established player in
the domestic and international market.
Risk Management Activities
Company has taken steps to build a valued relationship with its prospective customers and positioning
itself as independent entity from the parent company. Recently, the Company also diluted its parent
Company’s ownership through preferential allotment to two Private Equity Funds.
From the beginning, as part of its strategy, the Company keeps its business with TML separate from its
business with other automakers. Company also continues to focus on growth with non-TML competitors
and with complementary industries as part of mitigation strategy.
Company has an established Information Security Management System (ISMS) to meet the stringent
requirements of the security standard ISO 27001:2005and to ensure confidentiality of each customer’s
data and Intellectual Property (IP). Controls include restricted physical access to specific customer work
areas and logical data separation ensured through appropriate controls in the intranet, firewall, etc.
The ISMS is built on the strong foundation of the company’s Quality Management System (QMS) which
conforms to the quality standards ISO 9001:2008 and AS 9100 C (aerospace quality standard). These
quality standards call for measures to protect customer assets. A strong regime of internal and external
quality audits mandated by these quality standards ensure that these important requirements are not
compromised. The company renews (or upgrades) these quality certificates every three years (or when
the standard undergoes revision), thus providing customers confidence in our systems.
3.
Exchange Rate Fluctuation Risk
Company is exposed to the impact of changes in foreign currency exchange rates, because considerable
revenue comes from outside of India and it may have negative impact of currency fluctuations on
operating results.
Risk Management Activities
The Company has natural hedge due to its diversified locations across geographies, the Company incurs
the expenses in local currency, which is to be met through receipts in same currency. The Company also
has taken appropriate foreign exchange cover and spreading our revenues across the various
geographies.The Company follows a prudent forex policy.
4.
Immigration Risk
Risks arising out of country specific legislative changes including restrictions on issuing work visas by
foreign governments, as well as to variations in standards of application and enforcement due to political
forces and economic conditions.
Risk Management Activities
The Company is taking conscious efforts to maintain the diversified operations in countries across the
world as appropriate. The Company is also acquiring and maintaining preferred status with consulates.
20
The Company has a hire local policy. The Company further mitigates immigration risk by focusing on
maintaining the correct onshore-offshore content in engagements with appropriate mix of local staff for
onshore.
The Company has taken a major initiative to train its support staff based on various locations to comply
with all the immigration laws applicable respective location and has robust system in place to comply
with all the applicable provisions.
Internal Risk Factors
1.
Revenue Concentration
Since revenues from the U.S. constitute a significant part of the Company’s total non-captive revenue, the
state of the U.S. economy remains a major concern. The Company has an exposure to various inherent
risks in any single business segment due to high revenue concentration and there is always a risk of loss of
customer or delay/reduction in the number of new purchase orders due to many factors such as:
•
Geographic concentration - risks arising out of economic condition, global trade policies, local laws,
political environment, and work culture of specific countries.
•
Industry concentration – risks arising out of cyclical behavior of any one industry, or sudden
changes in industry characteristics.
•
Service concentration – risks to the predictability and sustainability of business due to the inherent
nature of each service.
•
Client concentration – risks due to over-dependence on specific clients and likely changes in their
business.
•
Resource concentration – risks due to the concentration of resources in few client accounts.
Risk Management Activities
The Company has spread its operations across the globe, thereby reducing its dependence on any single
market. The Company is increasing its efforts in geographically diversifying its clients and revenue. The
Company also is monitoring geographical concentration of revenue on a periodic basis to maintain
balance, and performing the following activities on periodical basis:
2.
•
Focus on geographical diversification and relationship building in specific markets.
•
Closely monitoring revenue concentration across different verticals. Developing industry-specific
solution capability with domain-specific skills and experts. Focusing on growing key verticals.
•
Adopting a commission model when possible. Leveraging product sales to generate services.
•
Training of sales team members.
•
Develop complete suite of service offerings to become end-to-end solution providers.
•
Balancing the service mix to ensure appropriate investment in developing services that gives more
competitive advantage including acquisition of companies/technologies/captives.
•
Monitoring client revenue as a percent of total revenue to strike a balance between predictable
revenue growth, lowering marketing costs against clients’ negotiation capability.
•
Identifying areas where proactive value addition can be effected to improve clients’
competitiveness.
•
Actively seeking new clients to reduce client concentration; and looking at related industries.
•
Monitoring onsite and offshore mix.
•
Securing multi-year contracts.
Project Execution & Management Risk
The Company is delivering high-quality engineering and software solutions to its clients but it involves
21
Eighteenth Annual Report 2011-12
Tata Technologies Limited
uncertainties, which have impact on the budgeted time and cost, and it ultimately affects the profitability
of the Company.
Risk Management Activities
The Company has rolled out Global Engagement Model (GEM), which is a consolidation of best practices
from the delivery centers around the world. The Company implemented “Delivery” module in over 80
ongoing projects. GEM helps present a consistent,“common face” of the Company to the customer. GEM is
a key project management methodology that addresses how the Company engages with its customers
for all Engineering Services Outsourcing (ESO) programs.The objectives of this methodology are to:
3.
•
Reduce the amount of effort required to respond to client
•
Improve the program execution and thus deliver on time
•
Respond quicker to client requirements
•
Set a foundation for change within the Company
•
Standardize practices across global teams
HR related Risks
The professionals working in the Company are the key assets. The nature of business demands that the
Company has adequate professionals with required skill sets at any point of time to meet the customer
demands. Considering the high level of turnover of professionals in the industry in which Company
operates, the Company could face difficulties in attracting and retaining the necessary work force at any
given point of time, which may result in loss of business opportunities.
Risk Management Activities
The Company is improving employee engagement through various HR initiatives such as ‘ConeXion’
(engagement survey conducted globally by Gallup once in two years),‘One-to-One Dialogue’ an initiative
to connect with employees after every 121 days by HR Business Partners.
Further, Leadership stays in touch with employees through skill level meetings and Employee Briefing
sessions (held simultaneously across all geographies and locations). These sessions are coupled wit
‘Open House’, a quarterly briefing session used by the Tata Technologies leadership team to disseminate
latest information and updates about the Company followed by an open forum for employees.
The Company is also establishing campus-connect initiatives and partnership with leading institute
inside and outside the Country where appropriate. The Company is focused towards identifying
competencies required to deliver value and groom professionals along multiple dimensions: technology,
domain, leadership and management.
The Company is focusing on maturing its HR processes as per Tata Business Excellence Model ( TBEM) and
People Capability Maturity Model (PCMM) at all locations and to reinforce role based organization
structure to facilitate empowerment, rapid decision making and assignment of responsibilities.
The Company has an effective Talent Acquisition function to ensure that the proper selection and
recruitment process is in place to attract qualified professionals. The Company also has a Learning Center
function, which periodically provides training to its employees to support the growing and varied
business requirements. The Human Resources (HR) function ensures that the appropriate talent in the
industry is attracted and retained. Efforts are also taken to increase the level of employee satisfaction. As a
part of retention strategy, the Company has implemented the various Employees Stock Options Schemes
and Employees Stock Purchase Schemes for its employees.
4.
Customer Acquisition Risk
In today’s competitive business environment, the Company may not be able to predict acquisition of
customers and its growth.
Risk Management Activities
The Company has deployed Strategic Go-to-Market plan and is taking constant efforts to improve
customer acquisition processes and discipline. The Company has also nominated the Executive sponsors
for its key accounts. Further, the Customer Relationship Management (CRM) system matured across all
22
territories/countries with process and technology improvements across areas such as Quoting, Pre-Sales,
Sales-Delivery Integration, and Visibility to Customer Billing & Payables. The management is closely
monitoring the health of sales pipeline, conversions ratios etc. periodically.
5.
Suppliers’ bargaining power in Product Solutions division
In Product Solutions business division, the Company has limited bargaining power with various suppliers
of the software products we distribute around the globe.
Risk Management Activities
The Company’s risk is not greater than any other channel partner in its competitive landscape. Each of
these partners is unique, but shares common attribute in the complexity of their evolving distribution
strategies. The nature of their business model generates frequent changes to account coverage, market
support, and availability of margins to partners. The Company has a constant focus on mitigating these
factors through executive relationships, good partner management practices, and maintaining strong
performance in the Company’s field operations.
6.
Leadership Bandwidth & Critical positions
There is a risk that the second line of Executive Management (Leadership Team) may not be available at all
the times. Permanent / long-duration unavailability of such key executives may result in the adverse
impact on the smooth operations of the Company if the relevant succession plan is not in place.
Risk Management Activities:
Succession Plan is in place for the entire Leadership Team (short term in case of an emergency and long
term from job rotations and growth perspective). Growth of next line of leaders is ensured through
Learning Organization.This is also ensured by getting them to play higher roles in their existing capacity.
J.
Operational Performance
The financial performance of Tata Technologies Ltd ‘the Company’ as per Indian GAAP is discussed hereunder in
two parts:
1.
Tata Technologies Ltd (Unconsolidated) which excludes the performance of subsidiaries of the Company
and its share in Joint Venture Company.
2.
Tata Technologies Ltd (Consolidated) which includes performance of subsidiaries of the Company and its
share in Joint Venture Company (Group Companies).The Consolidated Financial Statements bring out
comprehensively the performance of the Tata Technologies group and are more relevant for
understanding the overall performance of the Tata Technologies group. The financial statements are
prepared in compliance with the Companies Act, 1956 and generally accepted accounting principles in
India.
3.
The consolidated performance of the Company is reflected in the trend graphics for the last five years.
Dupont Analysis
2010
2011
2012
13%
14%
15%
50%
66%
Offshore Growth
17%
20.96%
INR 138cr
26.45%
INR 187cr
29.51%
INR 279cr
ROCE =
PBIT
Capital
PBIT
15%
13%
12%
SG&A as % of sales
Revenue
29%
30%
29%
Gross Margin
=
14.71
14.59
14.91
Fixed Asset T/O
INR 658cr
INR 708cr
Revenue
INR 946cr
Capital
1.67
1.79
74days
68days
64days
Days Sales O/S
-12%
15%
31%
Revenue growth
1.76
23
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Return on Equity
Return on Capital Employed
40.00%
34.12%
Return on Equity %
35.00%
30.00%
33.38%
26.41%
25.00%
18.63%
20.00%
15.00%
10.00%
8.46%
Return on Capital Employed %
35.00%
26.45%
25.00%
20.96%
20.00%
15.00%
10.94%
10.00%
2007-08
2008-09
2009-10
2010-11
0.00%
2011-12
Earnings Per Share
2007-08
24.33
30
17.59
20
8.23
2011-12
270.00
250
196.00
223.00
176.89
200
145.00
150
100
50
10
2007-08
2008-09
2009-10
2010-11
2006-07
2011-12
2007-08
90
80
700
2008-09
2009-10
2010-11
Debtor Days
Cash & Cash Equivalents
83
77
74
68
64
2010-11
2011-12
70
609
600
60
Debtor Days
Cash & Cash Equivalents (` Crore)
2010-11
300
ESOP Share Price (`)
37.15
40
500
400
284
300
50
40
30
20
193
200
00
2009-10
350
49.15
50
100
2008-09
ESOP Share Price Performance
60
EPS (`)
16.74%
5.00%
5.00%
0.00%
29.51%
30.00%
123
10
77
2007-08
2007-08
2008-09
2009-10
2010-11
2011-12
2008-09
2009-10
** Debtor Days are computed after considering Provision for Doubtful Debt
Debt Equity Ratio
Fixed Asset Turnover
25.00
2.00
20.56
18.56
14.71
15.00
14.59
14.91
Ratio
Fixed Asset Turnover
20.00
10.00
0.96
1.00
0.86
0.65
0.60
0.44
5.00
2007-08
24
2008-09
2009-10
2010-11
2011-12
2007-08
2008-09
2009-10
2010-11
2011-12
Revenue
Offshore Revenue
1,800
1,667
Revenue (` Crore)
1,400
1,268
1,241
1,200
1,100
Offshore Revenue (` Crore)
1,600
1,098
1,000
800
600
400
200
2007-08
2008-09
2009-10
2010-11
300
257
250
200
155
150
39
50
2007-08
2011-12
103
91
100
2008-09
2009-10
2010-11
2011-12
** Revenue generated by Offshore Delivery Centers
Revenue by Country (` Crore)
EBITDA
350
305
300
2 50
507
250
EBITDA (` Crore)
557
India
US
EU
Thailand
Singapore
206
200
153
150
120
100
77
50
551
2007-08
2008-09
2009-10
2010-11
2011-12
Effective Tax Rate
Profit after Tax
250
150
50%
139
42%
40%
91
100
Percent
Profit after Tax (` Crore)
208
200
66
50
30
30%
29%
28%
2008-09
2009-10
23%
23%
2010-11
2011-12
20%
10%
0%
2007-08
2008-09
2009-10
2010-11
2011-12
2007-08
25
Eighteenth Annual Report 2011-12
Tata Technologies Limited
4.
The discussion should be read in conjunction with the financial statements and notes for the year ended
March 31, 2012.
The total income of the Company (Unconsolidated) aggregated Rs. 668.26 crore in fiscal 2012 as
compared to Rs. 504.74 crore in fiscal 2011, registering a growth of 32.40%. In fiscal 2012, the Company’s
(Unconsolidated) profit after taxes aggregated Rs. 130.71 crore as compared to Rs. 97.05 crore in fiscal
2011, registering a growth of 34.68%.
In fiscal 2012, the total income of the Company (Consolidated) aggregated Rs. 1666.95 crore as compared
to Rs. 1268.05 crore in fiscal 2011, registering a growth of 31.46%. The consolidated profit after taxes
aggregated Rs. 208.37 crore in fiscal 2012 as compared to Rs. 139.02 crore in fiscal 2011, registering a
growth of 49.88%. During the year the Company has paid interim dividend of Rs. 9/- per equity share and a
final dividend of Rs.7/-per equity share has been recommended. Full details of the dividend paid are
available in the Director’s Report.
RESULTS OF OPERATIONS Tata Technologies Ltd. (UNCONSOLIDATED)
The Management’s Discussion and Analysis given below relates to the financial statements of the
Company(Unconsolidated). The discussion should be read in conjunction with the financial statements and
related notes for the year ended March 31, 2012.
The following table gives an overview of the financial results of the Company (Unconsolidated):
INCOME
Income from Operations
2011- 12
2010- 11
Particulars
` in crores
% of Income
` in crores
% of Income
% of
Variance
INCOME
Income from Services
Sale of Products
Other Income
Total Income
562.52
81.48
24.26
668.26
84.18%
12.19%
3.63%
100.00%
422.50
70.66
11.58
504.74
83.71%
14.00%
2.29%
100.00%
33.14%
15.31%
109.50%
32.40%
EXPENDITURE
Cost of Traded Products
Consultancy fees, Softwares and others
Employee Benefit Expenses
Other Expenses
Total Expenditure
64.70
54.47
298.75
51.16
469.08
9.68%
8.15%
44.71%
7.66%
70.19%
56.41
47.06
222.02
35.69
361.18
11.18%
9.32%
43.99%
7.07%
71.56%
14.70%
15.75%
34.56%
43.35%
29.87%
Profit before Finance Charges, Depreciation & Taxes
Finance Cost
Depreciation and amortization expenses
199.18
1.54
21.16
29.81%
0.23%
3.17%
143.56
1.69
14.76
28.44%
0.33%
2.92%
38.74%
-8.88%
43.36%
Profit before Taxes
176.48
26.41%
127.11
25.19%
38.84%
45.77
6.85%
30.06
5.96%
52.26%
130.71
19.56%
97.05
19.23%
34.68%
Provision for taxes (including deferred tax)
Net Profit from Operations after taxes
The Company’s revenue consists mainly of income from services and sale of products. The Company provides
services either on time and material basis or fixed price basis. The Company’s revenue from services on time and
materials contracts is recognized when services are rendered and related costs are incurred. In case of fixed price
contracts, revenue is recognized over the life of the contract based on milestones achieved as specified in the
contracts or by proportionate completion method on the basis of the work completed. Foreseeable losses on
such contracts are recognized when probable. Revenue from rendering Annual Maintenance Services is
recognized proportionately over the period of contract. Revenue from third party software products and
hardware sale is recognized upon delivery.
26
The Company’s (Unconsolidated) revenues increased to Rs. 644 crore in fiscal 2012, from Rs. 493.16 crore in fiscal
2011, a growth of 30.59%. Revenues from services increased to Rs. 562.52 crore in fiscal 2012 from Rs. 422.50
crore in fiscal 2011, a growth of 33.14%. Revenues from sale of products increased to Rs. 81.48 crore in fiscal 2012
from Rs. 70.66 crore in fiscal 2011, an increase in revenue of 15.31%.
Other Income
Other Income in fiscal 2012 increased to Rs. 24.26 crore from Rs. 11.58 crore in fiscal 2011, a growth of 109.50%.
Other Income comprises interest received on inter corporate deposits and deposits with banks, dividends
received on investments in units of mutual funds and foreign currency gains(net). Details of major portion of
other income are as under:
a)
b)
c)
Interest Income on inter corporate deposits, deposits with the banks and interest income from long term
deposits with financial institutions in fiscal 2012 was Rs. 6.66 crore as compared to interest income of
Rs. 9.38 crore in fiscal 2011.
Dividend income from investments in units of mutual funds in fiscal 2012 was Rs. 16.47 crore as
compared to Rs. 1.15 crore in fiscal 2011, a growth of 1332.17%.
Foreign currency gain (net) in fiscal 2012 was Rs. 0.90 crore as compared to foreign currency gain (net) of
Rs. 0.83 crore in fiscal 2011.
EXPENDITURE
Cost of Traded Products
Cost of Traded Products represents cost of products traded during the year under reference. Total cost of traded
products in fiscal 2012 was Rs. 64.70 crore, an increase of 14.70% over the costs of Rs. 56.41 crore in fiscal 2011.
This increase is attributable to overall increase in income from the sale of products. As mentioned earlier,
revenues from sale of products increased to Rs. 81.48 crore in fiscal 2012 from Rs. 70.66 crore in fiscal 2011, an
increase of 15.31%.
Consultancy Fees, Softwares and Others
Consultancy fees represents outsourcing charges paid to the third parties towards various jobs
outsourced/services received.The cost of softwares represents the purchase cost of softwares for internal use for
enhancing the quality of services and also meeting the needs of the customers.Total consultancy fees, softwares
and others in fiscal 2012 was Rs. 54.47 crore, an increase of 15.75% over the total consultancy fees, softwares and
other cost of Rs. 47.06 crore in fiscal 2011. Total consultancy fees, softwares and others as a percentage of total
income was 8.15% in fiscal 2012 (9.32% in fiscal 2011). This decrease is attributable to effective deployment of
contractual professionals and software licenses.
Employee Benefit Expenses
Employee Benefit Expenses consist of compensation of employees. It includes salaries which have fixed and
variable components, contribution to provident fund, superannuation fund and gratuity fund. It also includes
expenses incurred on staff welfare. Total employee benefit expenses in fiscal 2012 was Rs. 298.75 crore, an
increase of 34.56% over the total employee costs of Rs. 222.02 crore in fiscal 2011. Total employee costs as a
percentage of total income was 44.71% in fiscal 2012 (43.99% in fiscal 2011). This increase is attributable to
increase in cost per employee. The number of employees as at March 31, 2012 was 3,837 as against 3,172 during
the previous year.
Other Expenses
Other Expenses (other than cost of traded products, consultancy fees, softwares and others and employee
benefit expenses, already discussed above) incurred to conduct the Company’s operations have gone up from
Rs. 35.69 crore in fiscal 2011 to Rs. 51.16 crore in fiscal 2012. In terms of total income, it has gone up from 7.07% in
fiscal 2011 to 7.66% in fiscal 2012.The increase is primarily due to increase of traveling and conveyance and AMC
charges. Traveling and conveyance and AMC charges increased from Rs. 14.82 crore in fiscal 2011 to Rs. 23.83
crore in fiscal 2012.
Profit before Finance Charges, Depreciation and amortization and Taxes
The profit before finance charges, depreciation and amortization and taxes in fiscal 2012 was Rs. 199.18 crore, an
increase of 38.74% from Rs. 143.56 crore in fiscal 2011. The profit as a percentage of income has gone up from
28.44% in fiscal 2011 to 29.81% in fiscal 2012.
Finance Cost
Finance cost decreased marginally from Rs. 1.69 crore in fiscal 2011 to Rs. 1.54 crore in fiscal 2012. This was due to
reduction of interest and other charges paid on PCFC loans (foreign currency loan) taken from banks.
Depreciation and Amortization
Depreciation and Amortization charges increased from Rs. 14.76 crore in fiscal 2011 to Rs. 21.16 crore in fiscal
2012 an increase of 43.36%. In terms of total income the depreciation and amortization charge was 3.17% of
total income in fiscal 2012 (2.92% in fiscal 2011). The said amount has gone up due to commencement of SEZ
27
Eighteenth Annual Report 2011-12
Tata Technologies Limited
operations and purchase of fixed assets for other than SEZ operations during the year under consideration.
Profit before Taxes
The Profit before Taxes in fiscal 2012 was Rs. 176.48 crore, an increase of 38.84% from Rs. 127.11 crore in fiscal
2011. In terms of total income, the Profit before Taxes has gone up from 25.18% fiscal 2011 to 26.41%% in fiscal
2012.
Provision for Taxation
Income tax expense comprises the current tax and the net change in the deferred tax assets and liabilities in the
applicable fiscal period. The Company benefits in India from certain tax incentives under section 10AA of the
Income Tax Act, 1961, for the IT services exported from designated ‘Special Economic Zone Unit”.The tax expense
increased from Rs. 30.06 crore in fiscal 2011 to Rs. 45.77 crore in fiscal 2012. This represented 6.85% of the total
income in fiscal 2012 (5.95% of the total income in fiscal 2011). The effective tax rate (total tax expenses
including deferred tax/profit before tax*100) in fiscal 2012 increased to 25.93% from 23.65% in fiscal 2011. The
said increase was primarily due to expiry of tax holiday of STPI Units of the Company.
Net Profit from operations after taxes
The Company’s net profit from operations after taxes registered a growth of 34.68% from Rs. 97.05 crore in fiscal
2011 to Rs. 130.71 crore in fiscal 2012.
FINANCIAL POSITION - Tata Technologies Ltd. (UNCONSOLIDATED)
Share Capital
(Amount in ` Crore)
Particulars
Authorized :
60,000,000 ordinary shares of Rs. 10/- each
(P.Y. 60,000,000 ordinary shares of Rs. 10/- each)
700,000 0.01% Cumulative Non-participative
Compulsorily convertible Preference Shares of Rs. 10/- each.
(P.Y. 700,000 0.01% Cumulative Non-participative Compulsorily
convertible Preference Shares of Rs. 10/- each)
Total
Issued, Subscribed and Paid-up :
42,970,138 equity shares of Rs. 10/- each
(P.Y. 37,315,255 equity shares of Rs. 10/- each)
Total
As at Mar 31, 2012
As at Mar 31, 2011
60.00
60.00
0.70
0.70
60.70
60.70
42.97
37.32
42.97
37.32
During the year, the Company did not increase authorized capital of ordinary shares and Cumulative Non
Participative Compulsory Convertible Preference Shares. The authorized equity share capital as on March 31,
2012 was Rs. 60 crore, divided into 6 crore equity shares of Rs. 10 each (Rs. 60 crore as at March 31, 2011, divided
into 6 crore equity shares of Rs. 10 each). The issued, subscribed and paid-up share capital as on March 31, 2012
was Rs. 42.97 crore. During the year, the Company issued equity shares to employees(under ESOP Scheme 2001)
and Private Equity investors. Consequently, the issued, subscribed and paid up capital of the Company increased
by Rs. 5.65 crore in fiscal 2012. Details of options granted, outstanding and vested as at March2012 are provided
in this Annual Report.
Reserves and Surplus
A summary of reserves and surplus is as under:
(Amount in ` Crore)
28
Particulars
As at Mar 31, 2012
As at Mar 31, 2011
Securities Premium Account
Securities Premium identified for Consolidation adjustments
General Reserves
Surplus i.e. balance in statement of Profit and Loss Account
Total
350.02
23.16
48.65
166.73
588.56
216.37
23.91
34.65
128.62
403.55
Securities Premium Account
(Amount in ` Crore)
As at Mar 31, 2012
As at Mar 31, 2011
As at the beginning of the year
216.37
208.97
Additions during the year
136.38
0.50
(2.73)
6.90
350.02
216.37
Particulars
Adjustments during the year
Total
Securities Premium Account as on March 31, 2011 stood at Rs. 216.37 crore. As on March 31, 2012 the balance in
this account stood at Rs. 350.02 crore. The additions (net ) to the share premium account of Rs. 133.65 crore
during the year is primarily on account of premium received on issue of equity shares to private equity investors
and on exercise of options under ESOP Scheme.
During the prior year, based on the approval of Shareholders of the Company at the Extra-Ordinary General
Meeting held on March 5, 2010 and on the basis of Order of the High Court of Judicature at Mumbai vide its
order dated April 16, 2010, the Company utilized balances in the securities premium account of Rs. 46.66 crore
towards one time charges/cost (including change in accounting policy for provision for doubtful debts)
incurred by the Company and its subsidiary companies.The amounts relating to the Company amounting to Rs.
17.31 crore had been adjusted to the Securities Premium Account. An amount of Rs. 29.34 crore equivalent to
the total amount of adjustments relating to the subsidiaries had been identified and segregated from the
balance in the Securities Premium Account for adjustment on consolidation. Of this total adjustment made, Rs.
1.58 crore and Rs. 16.58 crore related to provision for doubtful debts of the Company and its subsidiary
companies respectively on account of change in accounting with regard to provision for doubtful debts.
During the year ended March 31, 2012, the Company and its subsidiary companies have received amounts
aggregating to Rs. 0.01 crore (Rs. 1.47 crore for the year ended March 31, 2011) and Rs. 0.75 crore (Rs. 5.43 crore
for the year ended March 31, 2011) respectively against the balances for which the provision were made on
account of change in accounting policy. Consequently, such excess provisions for doubtful debts on account of
the said collections have been written back to the securities premium account and shown under additions
during the year.
Shareholders’ funds
The total shareholder funds increased to Rs. 631.53 crore as at March 31, 2012 from Rs. 440.87 crore as of the
previous year end.The basic earnings per share increased to Rs. 30.91 as at March 31, 2012 compared to Rs. 26.04
as of the previous year end.
Non-Current Liabilities
A summary of Non-Current Liabilities is as under:
(Amount in ` Crore)
Particulars
As at Mar 31, 2012
As at Mar 31, 2011
0.84
Long-term Borrowings
0.62
Deferred Tax Liabilities (Net)
3.75
-
Trade Payables
0.35
-
Long-term Provisions
7.08
6.17
Income tax liabilities (Net)
0.24
0.93
12.04
7.94
Total
All liabilities other than the current liabilities are classified as non-current liabilities. Long term borrowings
include vehicle loans from banks/others and long term maturity of finance lease obligations. Long term
borrowings decreased to Rs. 0.62 crore as at March 31, 2012 as compared to Rs. 0.84 crore as at March 31,
2011.The decrease was primarily due to repayment of vehicle loans taken from banks/others. Vehicle loans
were Rs. 0.41 crore as at March 31, 2012 (Rs. 0.56 crore at March31, 2011).
29
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Deferred Tax Liabilities (Net)
Note 6 brings out details of component wise deferred tax balances where the net value result into liability. As
can be seen from Note 6, deferred tax liability (net) was created against depreciation. The deferred tax liability
(net) was Rs. 3.75 crore as at March 31, 2012. (Rs. Nil as at March 31, 2011).
Trade Payables
Trade payables are dues in respect of goods purchased or services received (including from employees,
professionals and others under contract) in the normal course of business. Trade Payable shown under
noncurrent liabilities represents amount payable towards retention bonus to certain employees. Trade
payables were Rs. 0.35 crore as at March 31, 2012 (Rs. Nil as at March 31, 2011).
Long Term Provisions
Long term provisions represents provisions made towards certain non-funded employee benefits such as
Bhavishya Kalyan Yojana, medicare, leave encashment etc. Provision for employee benefits has been made
based on an independent actuarial valuation as on the balance sheet date. Long term provisions were Rs. 7.08
crore as at March 31, 2012 (Rs. 6.17 crore as at March 31, 2011).
Income Tax Liabilities
Income tax liabilities (net) represent estimated income tax liabilities. The provision for tax liabilities (net of
advance tax) was Rs. 0.24 crore as at March 31, 2012 (Rs. 0.93 crore as at March 31, 2011).
Current Liabilities
A summary of current liabilities is as under:
(Amount in ` Crore)
Particulars
As at Mar 31, 2012
As at Mar 31, 2011
Short-term Borrowings from Banks (Unsecured)
55.96
48.45
Trade Payables
91.91
79.02
Other Current Liabilities
Short-term Provisions
Total
8.46
6.92
35.72
22.76
192.05
157.15
A liability is classified as Current when any of the following is satisfied
a)
It is expected to be settled in the Company’s normal operating cycle
b)
It is held primarily for the purpose of being traded
c)
It is due to be settled within twelve months after the reporting date or
d)
The Company does not have an un conditional right to defer settlement of the liability for at least twelve
months after the reporting date
As reported elsewhere in this discussion, all other liabilities are classified as non-current liabilities.
Short Term Borrowings from banks
Short term borrowings represent unsecured pre shipment and post shipments loans taken from a bank. The
Company has not provided any security towards the said loans. Short term borrowings were Rs. 55.96 crore as at
March 31, 2012 (Rs. 48.45 crore at March 31, 2011).
Trade Payable
Trade payables are dues in respect of goods purchased or services received (including from employees,
professionals and others under contract) in the normal course of business.Trade Payables were Rs. 91.91 crore as
at March 31, 2012 (Rs. 79.02 crore as at March 31, 2011). Trade payable has gone up due to amount payable to
employees on account of performance pay and interest subsidy.
Other Current Liabilities
Other current liabilities as at March 31, 2012 aggregated Rs. 8.46 crore (Rs. 6.92 crore as at March 31, 2011). Major
portion of other current liabilities represents dues payable to statutory authorities and advance received from
the customers. Rs. 7.30 crore was outstanding as at March 31, 2012 on account of statutory dues and advance
received from customers (Rs. 6.03 crore as at March 31, 2011).
Short Term Provisions
Short term provisions represents provisions made towards employee benefits (current portion), provision for
proposed dividend and dividend tax on proposed dividend. Current portion of provision for employee benefits
30
has been made based on an independent actuarial valuation as on the balance sheet date. Short term
provisions as at March 31, 2012 aggregated Rs. 35.72 crore (Rs. 22.76 crore as at March 31,2011 ).
Fixed Assets
Details of fixed assets are as under:
(Amount in ` Crore)
As at Mar 31, 2012
Particulars
As at Mar 31, 2011
Tangible Assets
61.01
46.30
Intangible Assets
33.26
24.28
Capital Work-in-progress
1.54
1.32
Intangible Assets in progress
3.49
-
99.30
71.90
Total
A statement of movement in tangible fixed asset is as follows:
(Amount in ` Crore)
Particulars
Leasehold Land
Buildings
Plant & Machinery- owned
Plant & Machinery -leased
Office Equipments
Computers
Furniture & Fixtures
Vehicles
Leasehold improvements
Total
Less: Accumulated Depreciation
Net Block
As at
Mar 31, 2012
4.09
22.79
16.37
0.43
2.80
50.27
7.48
2.80
4.55
111.58
50.57
61.01
As at
Mar 31, 2011
4.09
22.75
14.81
0.35
1.99
39.02
6.34
2.41
91.76
45.46
46.30
% of Change
0.00%
0.18%
10.53%
22.86%
40.70%
28.83%
17.98%
16.18%
21.60%
11.24%
31.77%
During the year, the Company added Rs. 23.51 crore to the gross block of tangible assets comprising Rs. 0.04
crore buildings, Rs. 1.57 crore plant & machinery and equipments-owned, Rs. 0.08 crore plant & machinery and
equipments-leased,Rs. 0.82 crore office equipments Rs. 14.35 crore computers, Rs. 1.16 crore furniture and
fixtures, Rs. 0.94 crore vehicles Rs. 4.55 crore, leasehold improvements. During the previous year, the Company
added Rs. 10.65 crore to gross block assets of the Company.The major portions of additions during the year were
on account of commencement of an Unit in Special Economic Zone (Blue Ridge Unit).
During the year, the Company deducted Rs. 3.69 crore from the gross block of assets comprising Rs. 0.01 crore of
plant & machinery and equipments-owned,Rs. 0.01 crore office equipments, Rs. 3.10 computers, Rs. 0.02
furniture and fixtures, Rs. 0.55 vehicles. During the previous year, the Company retired/ transferred various assets
with gross block of Rs. 4.21 crore.The Company has a capital commitment of Rs. 4.58 crore as at March 31, 2012 as
compared to Rs. 6.42 crore as at March 31, 2011 towards tangible assets.
Intangible assets represents software licenses (other than internally generated). During the year, the Company
added Rs. 21.45 crore to the gross block of intangible assets (software licenses) During the previous year, the
Company added Rs. 6.21 crore to gross block assets of the Company. The major portions of additions during
fiscal 2012 were on account of commencement of an Unit in Special Economic Zone (Blue Ridge Unit). The
Company has a capital commitment of Rs. 3.31 crore as at March 31, 2012 as compared to Rs. 10.42 crore as at
March 31, 2011 towards intangible assets.
Capital work in progress comprises of the cost of tangible fixed assets that are not ready for their intended use at
the reporting date. The major portion of capital work in progress represents assets procured for office at Thane,
Mumbai. The business operations from Thane office will commence in fiscal 2013 and therefore the Company
31
Eighteenth Annual Report 2011-12
Tata Technologies Limited
will capitalise the said cost in fiscal 2013. Capital work in progress as at March 31, 2012 aggregated Rs. 1.54 crore
(Rs. 1.32 crore as at March 31, 2011).
Intangible assets in progress represent costs incurred towards purchase of SAP licenses and cost incurred
towards implementation of the same. No such cost was incurred in the previous year. Intangible assets in
progress as at March 31, 2012 aggregated Rs. 3.49 crore (Rs. Nil as at March 31, 2011).
Other Non-Current Assets
A summary of other non-current assets is as under:
(Amount in ` Crore)
As at Mar 31, 2012
As at Mar 31, 2011
Non-current Investments
266.23
223.23
Deferred tax Assets (Net)
-
2.18
Particulars
Long-term loans and advances
4.45
1.01
16.05
23.79
286.73
250.21
Income tax assets (Net)
Total
Non-Current Investments
A summary of the Company’s non-current investments is given below:
(Amount in ` Crore)
Particulars
(A)
As at Mar 31, 2012
As at Mar 31, 2011
Trade Investments
Investments in Equity instruments (Unquoted at cost)
i) Subsidiaries
(a) Tata Technologies Inc.
(b) Tata Technologies Pte Ltd
15.57
15.57
203.34
203.34
4.32
3.07
-
1.25
5.00
-
ii) Joint Venture Company
Tata HAL Technologies Ltd
Share Application Money paid to Tata HAL Technologies Ltd
(B)
Other than trade Investments (Quoted)
i)
Investments in Bonds
ii)
Investments in Units of Mutual Funds
Total (A+B)
38.00
-
266.23
223.23
The trade investment is an investment made by the company in shares of another company to promote the
trade or business of the company. Other investments represent other than trade investments. Investments are
either classified as current or non-current based on the holding period of investments as on the Balance Sheet
date. Investments which are expected to be realised within a period of 12 months from the Balance Sheet date
are classified as current investments. Other investments (which are to be realised after 12 months) are classified
as non-current. As can be seen from the above table, during the year, the Company did not make any further
investment in its subsidiary companies and Joint Venture Company. During the year, the Company invested in
bonds and units of mutual funds. These are typically investments in long -term funds to gainfully use the excess
cash balance with the Company. Investments in bonds and in mutual funds aggregated Rs. 43crore as on March
31, 2012 (Rs. Nil crore as on March 31, 2011).
32
Long Term Loans and Advances:
A summary of the Company’s long term loans and advances is given below:
(Amount in ` Crore)
Particulars
As at Mar 31, 2012
As at Mar 31, 2011
1.49
0.37
0.22
Financial assets
Security Deposits
Loans to employees
0.17
Loans to Others
2.22
-
Sub Total
3.88
0.59
Non Financial assets
Capital Advances
0.19
0.03
Deposits with Government and others
0.38
0.39
Sub Total
0.57
0.42
Grand Total
4.45
1.01
As can be seen from the above table, long term loans and advances have gone up from 1.01 crore in fiscal 2011
to Rs. 4.45 crore in fiscal 2012 due to increase of security deposits and loans to others. Security deposits have
gone up from Rs. 0.37 crore in fiscal 2011 to Rs. 1.49 crore in fiscal 2012 due to new deposits given towards offices
at Pune (SEZ), Thane (new office) and Bangalore (new office). Loans to others represents loan given to ESOP
Trust. No such loan was given in the previous year.
Income Tax Assets (net)
Income Tax Assets (net) were Rs. 16.05 crore as at March 31, 2012 (Rs. 23.79 crore as at March 31, 2011). Income
tax assets (net) have come down as compared to the previous year due to receipt of income tax refund from the
income tax department during the year under reference .
Current assets:
A summary of the Company’s current assets given below:
(Amount in ` Crore)
Particulars
Current Investments
Trade Receivables
Cash and Bank Balances
As at Mar 31, 2012
As at Mar 31, 2011
147.07
96.09
91.31
62.22
114.96
110.88
Other Current Assets
47.08
7.52
Short-term loans and advances
49.17
7.14
449.59
283.85
Total
Current Investments
During the year, the Company invested in units of mutual funds. These are typically investments in short -term
funds to gainfully use the excess cash balance with the Company. Current Investments as at March 31, 2012
aggregated to Rs. 147.07 crore ( Rs. 96.09 crore as at March 31, 2011).
Trade Receivables
Trade receivables are dues in respect of goods sold or services rendered in the normal course of business. A
trade receivable is treated as current, if it is likely to be realized within twelve months from the date of Balance
Sheet or operating cycle of the business. Trade Receivables as on March 31, 2012 aggregated Rs. 91.31 crore (net
of provision for doubtful debts)(Rs. 62.22 crore as on March 31, 2011). Amount debited to Profit and Loss
Account on account of provision for bad and doubtful debts in fiscal 2012 was Rs. 0.10 crore (Rs. 1.51 crore in
fiscal 2011). The Company provides provision for doubtful debts as a percentage of the outstanding debts
based on ageing. The amounts considered as bad debts and provision for doubtful (debited to profit and loss
account) as a percentage of total income was 0.01% in fiscal 2012 (0.29% in fiscal 2011).
33
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Cash and Bank Balances
Cash and bank balances include cash and cash equivalents and other bank balances. The Company’s Cash and
Bank balances as on March 31, 2012 were Rs. 114.96 crore (Rs. 110.88 crore as on March 31, 2011). The cash and
cash equivalents aggregated Rs. 113.93 crore as on March 31, 2012 (Rs. 110.02 crore as on March 31, 2011). Other
bank balances as at March 31, 2012 aggregated to Rs. 1.03 crore (Rs. 0.86 crore as at March 31, 2011).
Other Current assets
A summary of other current assets of the Company is given below:
(Amount in ` Crore)
Particulars
As at Mar 31, 2012
As at Mar 31, 2011
Financials assets
Interest Accrued on deposits and investments
Bills of Exchange
Unbilled Revenue
Sub Total
1.71
0.58
36.59
-
-
1.53
38.30
2.11
5.07
2.44
Non Financials assets
Advances to suppliers and contractors
VAT, other taxes recoverable, statutory deposits
1.31
2.14
Prepaid expenses
1.74
0.83
Unamortized Premium on forward contract
0.66
-
Sub Total
8.78
5.41
47.08
7.52
Grand Total
As can be seen from the above information, other current assets as on March 31, 2012 were Rs. 47.08 crore (Rs.
7.52 crore as on March 31, 2011).The said amount has gone up as compared to the previous year primarily due to
increase in balance in bills of exchange. Bills of exchange as at March 31, 2012 were Rs. 36.59 crore (Rs. Nil as at
March 31, 2011).
Short term loans and advances
A summary of short term loans and advances of the Company is given below.
(Amount in ` Crore)
Particulars
As at Mar 31, 2012
As at Mar 31, 2011
Unsecured (Considered Good)
Financials
Deposit with Financial Companies
10.00
-
Inter Corporate Deposits
30.00
-
Loans and advances to related parties
7.45
5.86
Security Deposits
0.05
0.01
1.68
1.30
Less : Allowances for doubtful loans and advances
Loans and Advances employees
(0.04)
(0.04)
Sub Total
49.14
7.13
Deposits with Government and others
0.03
0.01
Sub Total
0.03
0.01
49.17
7.14
Non Financials
Grand Total
As can be seen from the above information, short term loans and advances as on March 31, 2012 were Rs. 49.17
crore (Rs. 7.14 crore as on March 31, 2011). Short term loans and advances have gone up primarily due to deposits
placed with financial companies and inter corporates. Deposits with financial companies as at March 31, 2012 was
Rs. 10 crore (Rs. Nil as at March 31, 2011) and Inter corporate deposits as at March 31, 2012 were Rs. 30 crore (Rs. Nil
as at March 31, 2011).
34
Cash Flow - Tata Technologies Ltd. (Unconsolidated)
Cash Flow from Operating Activities
(Amount in `Crore)
Particulars
Net Profit after Taxation
Depreciation and amortization
Provision for Income Tax
Provision for Deferred Tax
Dividend Income on Investment in mutual funds
Interest Income
Finance Costs
Unrealised exchange Loss / (Gain)
Others
Operating profit before Working Capital Changes
Effect of working capital changes
Income Taxes paid (net)
Net cash flow generated from operating activities
2011-12
2010-11
130.71
21.16
39.83
5.94
(16.47)
(6.66)
1.54
1.06
(0.33)
176.78
(56.82)
(32.87)
87.09
97.05
14.76
38.00
(3.82)
(1.15)
(9.38)
1.69
1.14
(1.69)
136.60
(0.60)
(28.89)
107.11
Change
33.66
6.40
1.83
9.76
(15.32)
2.72
(0.15)
(0.08)
1.36
40.18
(56.22)
(3.98)
(20.02)
As can be seen from the above table, in fiscal 2012, the Company generated net cash of Rs. 87.09 crore
(Rs. 107.11 crore in fiscal 2011) from operating activities. Apart from profit after taxes of Rs. 130.71 crore
(Rs. 97.05 crore in fiscal 2011), the net cash generated includes adjustments for non-cash items like depreciation
of Rs. 21.16 crore (Rs. 14.76 crore in fiscal 2011).
Cash Flow from Investing Activities
(Amount in ` Crore)
Particulars
Dividend Received
Inter Corporate Deposits Placed
Inter Corporate Deposits Refunded
Purchase of Mutual Fund
Sale of Mutual funds
Payment for Purchase of Tangible and Intangible Fixed Assets
Other Investing activities
Net cash flow (used in)/generated from investing activities
2011-12
16.47
(489.40)
459.40
(1,953.28)
1,864.30
(48.05)
(11.73)
(162.29)
2010-11
1.15
(271.00)
326.00
(367.83)
315.85
(7.70)
14.02
10.49
Change
15.32
(218.40)
133.40
(1,585.45)
1,548.45
(40.35)
(25.75)
(172.78)
As can be seen from the above information, in fiscal 2012, the Company used in Rs. 162.29 crore on investment
activities (Rs. 10.49 crore generated in fiscal 2011).
Cash Flow from Financing Activities
(Amount in ` Crore)
Particulars
Proceeds from issue of shares including Premium
Interest Paid
Dividends Paid (including Dividend Tax)
Proceeds from Short Term borrowings
Repayment of Short Term borrowings
Proceeds from Long Term borrowing
Repayment of Long Term borrowings
Net cash flow (used in)/generated from financing activities
2011-12
2010-11
Change
141.27
(1.53)
(65.72)
102.34
(97.64)
0.37
(0.47)
78.62
0.57
(1.68)
(60.54)
84.58
(73.97)
1.31
(0.48)
(50.21)
140.70
0.15
(5.18)
17.76
(23.67)
(0.94)
0.01
128.83
35
Eighteenth Annual Report 2011-12
Tata Technologies Limited
As can be seen from the above information, in fiscal 2012, the Company generated Rs. 78.62 crore on financing
activities (Rs. 50.21 crore used in fiscal 2011).
Cash Position
Cash and cash equivalents as on March 31, 2012 amounted to Rs. 381.62 crore (Rs. 206.97 crore as at March 31,
2011). Cash and cash equivalents include investments in mutual funds, inter corporate deposits and bonds, bills
of exchange and deposits with financial Companies.
Tata Technologies Ltd. (CONSOLIDATED)
The Management Discussion and Analysis below relates to the consolidated financial statements of the
Company (includes the results of its subsidiaries and the Company’s share in Joint Venture Company). The
Discussion should be read in conjunction with the financial statements and related Notes to the Consolidated
Accounts of the Company for the year ended March 31, 2012.
2011- 12
2010- 11
Particulars
% of Income
INCOME
Income from Services
Sale of Products
Revenue from Operations
Other Income
Total Income
1,196.78
445.83
1,642.61
24.34
1,666.95
71.79%
26.75%
98.54%
1.46%
100.00%
881.86
373.97
1,255.83
12.22
1,268.05
69.54%
29.49%
99.04%
0.96%
100.00%
35.71%
19.22%
30.80%
99.18%
31.46%
EXPENDITURE
Cost of Traded Products
Consultancy fees, Softwares and others
Employee Benefit Expenses
Other Expenses
Total Expenditure
315.52
223.75
699.66
122.77
1,361.70
18.93%
13.42%
41.97%
7.36%
81.69%
266.27
151.02
546.87
97.74
1,061.90
21.00%
11.91%
43.13%
7.71%
83.75%
18.50%
48.16%
27.94%
25.61%
28.23%
305.25
7.23
26.19
271.83
63.46
208.37
18.31%
0.43%
1.57%
16.31%
3.81%
12.50%
206.15
7.37
18.87
179.91
40.89
139.02
16.25%
0.58%
1.49%
14.18%
3.22%
10.96%
48.07%
-1.90%
38.79%
51.09%
55.20%
49.88%
Profit before Finance Charges, Depreciation and Taxes
Finance Cost
Depreciation and amortization
Profit before Taxes
Provision for taxes (including deferred tax)
Net Profit from Operations after taxes
` in crore
% of
Variance
` in crore
% of Income
INCOME
Income from Operations
The Company’s revenue increased in fiscal 2012 to Rs. 1,642.61 crore from Rs. 1,255.83 crore in fiscal 2011,
registering a growth of 30.80%. Services revenue was 71.79% of total income (69.54% in fiscal 2011) and
increased by 35.71% from Rs. 881.86 crore in fiscal 2011 to Rs. 1,196.78 crore in fiscal 2012. Consolidated
revenues from sale of products increased by 19.22% from Rs. 373.97 crore in fiscal 2011 to Rs. 445.83 crore in
fiscal 2012.
Revenue by Segments:
The classification of revenues of the Company by geography is given below:
(Amount in ` Crore)
Geography
India
USA
UK
Rest of Europe
Rest of the World
Total
36
2011-12
% of
Revenue
489.21
549.24
457.22
127.96
18.98
1,642.61
29.78%
33.44%
27.84%
7.79%
1.15%
100.00%
2010-11
387.83
460.1
279
112.7
16.2
1,255.83
% of
Revenue
30.88%
36.64%
22.22%
8.97%
1.29%
100.00%
Other Income
Consolidated ‘Other Income’ in fiscal 2012 increased to Rs. 24.34 crore from Rs. 12.22 crore in fiscal 2011. In terms
of total income, ‘Other Income’ has gone up from 0.96% in fiscal 2011 to 1.46% in fiscal 2012.Other income has
gone up due to increase of dividend income from Rs. 1.15 crore in fiscal 2011 to 16.47 crore in fiscal 2012.
EXPENDITURE
Employee Benefit Expenses
The consolidated total employee benefit expenses for fiscal 2012 was Rs. 699.66 crore, an increase of 27.94%
over Rs. 546.87 crore in fiscal 2011. Employee costs as a percentage of total income was 41.97% in fiscal 2012
(43.13% in fiscal 2011). This decrease is attributable to effective utilization of man power and reduction of cost
per employee.The number of employees as at March 31, 2012 was 4,826 (4,076 as at March 31, 2011).
Other expenses
Other Expenses increased from Rs. 97.74 crore in fiscal 2011 to Rs. 122.77 crore in fiscal 2012. The increase is
primarily due to increase of Rent from Rs. 9.69 crore in fiscal 2011 to Rs. 12.85 crore in fiscal 2012, Travel and
conveyance cost from Rs. 35.47 crore in fiscal 2011 to Rs. 42.01 crore in fiscal 2012, AMC charges from Rs. 3.32
crore in fiscal 2011 to Rs. 8.59 crore in fiscal 2012 and communication expenses from Rs. 9.90 crore in fiscal 2011
to Rs. 12.13 crore in fiscal 2012.In terms of total income, operating expenses reduced from 7.71% in fiscal 2011 to
7.36% in fiscal 2012 due to various cost effective measures taken by the Company.
Profit before Finance cost, Depreciation and amortization and Taxes
The profit before finance cost , depreciation and amortization, taxes (PBDIT) in fiscal 2012 was Rs. 305.25 crore,
an increase of 48.07% from Rs. 206.15 crore in fiscal 2011. The profit as a percentage of total income was 18.31%
in fiscal 2012 (16.25% in fiscal 2011). The increase in the PBDIT as a percentage of total income in fiscal 2012 is
attributable to increase in offshore revenues and reduction in operating cost, particularly employee costs and
other expenses.
Finance Cost
Finance cost reduced from Rs. 7.37 crore in fiscal 2011 to Rs. 7.23 crore in fiscal 2012. This was due to effective
management of working capital. In terms of percentage of total income, finance cost has come down from
0.58% in fiscal 2011 to 0.43% in fiscal 2012.
Depreciation and amortization
Depreciation and amortization charge increased from Rs. 18.87 crore in fiscal 2011 to Rs. 26.19 crore in fiscal
2012, an increase of 38.79%.The increase is attributable to commencement of business operations in SEZ Unit. In
terms of total income the depreciation and amortization charge was 1.57% in fiscal 2012 and 1.49% in fiscal
2011.
Profit before Taxes
The Profit before Taxes in fiscal 2012 was Rs. 271.83 crore, an increase of 51.09% from Rs. 179.91 crore in fiscal
2011. In terms of total income the profit went up from 14.18% in fiscal 2011 to 16.31% in fiscal 2012. The increase
in profit before tax can be attributed to margin expansion of PBDIT of 213 basis points.
Provision for Taxation
Income tax expense comprises tax on income from operations in India and foreign tax jurisdictions. Income tax
payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expenses
relating to overseas operations are determined in accordance with tax laws applicable in countries where such
operations are carried out. The Company’s consolidated tax expense in fiscal 2012 increased to Rs. 63.46 crore
from Rs. 40.89 crore in fiscal 2011. This represented 3.81% of the total income in fiscal 2012 (3.22 % in fiscal2011).
The effective tax rate (total tax expenses including deferred tax/profit before tax*100) in fiscal 2012 increased to
23.35% from 22.73% in fiscal 2011. As mentioned elsewhere in this discussion, the effective tax rate has gone up
due to expiry of tax holiday of STPI Units of the Company.
Net Profit after taxes from operations
The Company’s net profit after taxes from operations (Consolidated) registered a growth of 49.88% from Rs.
139.02 crore in fiscal 2011 to Rs. 208.37 crore in fiscal 2012. Net profit margin on the total income went up from
10.96% in fiscal 2011 to12.50 % in fiscal 2012, an increase in net profit margin of 1.54%.
37
Eighteenth Annual Report 2011-12
Tata Technologies Limited
FINANCIAL POSITION - Tata Technologies Ltd. (CONSOLIDATED)
Share Capital
(Amount in ` Crore)
Particulars
Authorized :
60,000,000 ordinary shares of Rs. 10/- each
(P.Y. 60,000,000 ordinary shares of Rs. 10/- each)
700,000 0.01% Cumulative Non-participative
Compulsorily convertible Preference Shares of Rs. 10/- each.
(P.Y. 700,000 0.01% Cumulative Non-participative Compulsorily
convertible Preference Shares of Rs. 10/- each)
Total
Issued, Subscribed and Paid-up :
42,970,138 equity shares of Rs. 10/- each
(P.Y. 37,315,255 equity shares of Rs. 10/- each)
Total
As at Mar 31, 2012
As at Mar 31, 2011
60.00
60.00
0.70
0.70
60.70
42.97
60.70
37.32
42.97
37.32
As discussed elsewhere in this report, during the year, the Company did not increase authorized capital of
ordinary shares and Cumulative Non Participative Compulsory Convertible Preference Shares. The authorized
equity share capital as on March 31, 2012 was Rs. 60 crore, divided into 6 crore equity shares of Rs. 10 each (Rs. 60
crore as at March 31, 2011, divided into 6 crore equity shares of Rs. 10 each). The issued, subscribed and paid-up
share capital as on March 31, 2012 was Rs. 42.97 crore (Rs. 37.32 crore as at March 31, 2011). During the year, the
Company issued equity shares to employees (under ESOP Scheme)and private equity investors. Consequently,
the issued, subscribed and paid up capital of the Company increased by Rs. 5.65 crore in fiscal 2012. Details of
options granted, outstanding and vested as at March 2012 are provided in this Annual Report.
Reserves and Surplus
A summary of reserves and surplus is given below:
(Amount in ` Crore)
Particulars
Securities Premium Account
Capital Reserve
Translation Reserves
General Reserves
Surplus i.e. balance in Profit and loss account
Total
As at
Mar 31, 2012
As at
Mar 31, 2011
350.02
0.63
26.28
48.83
312.10
737.86
216.37
0.65
(17.73)
34.83
196.33
430.45
Securities Premium Account as on March 31, 2012 stood at Rs. 350.02 crore. As on March 31, 2011 the balance in
this account stood at Rs. 216.37 crore. The net additions to the securities premium account of Rs. 133.65 crore
during the year is on account of premium received on issue of equity shares on exercise of options under ESOP
Scheme, issuance of shares to private equity investors and amounts collected from the customers in respect of
provisions made for doubtful debts in the previous year on account of change in accounting policy. Amount
provided on account of change in accounting policy in the previous year was debited to securities premium
account based on the approval of Shareholders of the Company at the Extra-Ordinary General Meeting held on
March 5, 2010 and on the basis of Order of the High Court of Judicature at Mumbai vide its order dated April 16,
2010. During the year ended March 31, 2012, the Company and its subsidiary companies received amounts
aggregating to Rs. 0.76 crore against the balances for which the provision were made on account of change in
accounting policy in the previous year. Consequently, such excess provisions for doubtful debts on account of
the said collections have been written back to the securities premium account.
Capital Reserve Account as on March 31, 2012 stood at Rs. 0.63 crore. As on March 31, 2011 the balance in this
account stood at Rs. 0.65 crore, the said change represents exchange fluctuations. Details of the same have been
provided in Note 4 of the Financial Statements.
Out of the profits in fiscal 2012, an amount of Rs. 14 crore (Rs. 10 crore in fiscal 2011) was transferred to General
Reserves resulting in a closing balance of Rs. 48.83 crore as on March 31, 2012 (Rs. 34.83 crore as on March 31,
2011).
38
The balance in the Profit and Loss Account as on March 31, 2012 stood at Rs. 312.10 crore (Rs. 196.33 crore as on
March 31, 2011), after providing interim and final dividend of Rs. 67.63 crore and dividend tax of Rs. 10.97 crore
thereon. The total amount of profits appropriated to dividends including dividend tax was Rs 78.60 crore as
compared to Rs. 52.08 crore in the previous year.
For the purpose of consolidation, the financial statements of foreign subsidiaries have been translated into its
immediate parent companies currency and the same has been on the following basis:
All income and expenses items are converted at the average rate of exchange applicable for the year. All assets
and liabilities are translated at the closing rate as on the balance sheet date. The resulting exchange differences
on account of translation at the year end are transferred to translation reserve. As a result, Translation Reserve
Account as on March 31, 2012 stood at Rs. 26.28 crore. As on March 31, 2011 the balance in this account stood at
Rs 17.73 crore.
Non-Current Liabilities
A summary of Non-Current Liabilities is given below:
(Amount in ` Crore)
Particulars
Long-term Borrowings
Deferred Tax Liabilities (Net)
Trade Payables
Long-term Provisions
Income tax liabilities (Net)
Total
As at
Mar 31, 2012
0.62
3.75
0.35
7.76
0.24
12.72
As at
Mar 31, 2011
226.30
6.17
4.83
237.30
As mentioned elsewhere in this discussion, all liabilities other than current liabilities have been classified as
non-current liabilities. Long term borrowings as at March 31, 2012 were Rs. 0.62 crore (Rs. 226.3 crore as at March
31, 2011). The acquisition loan amounting to USD 50Mn (Rs. 222.92 crore) was classified as non-currentliability
based on due date for repayments in the previous year. During the year the said loan was classified as current
liability and therefore primarily on account of the same, long term borrowings have come down as compared to
the previous year.
Deferred Tax Liabilities (Net)
As stated in Note 6 of the financial statements, deferred tax assets and liabilities are offset, tax jurisdiction wise.
Note 6 brings out details of component wise deferred tax balances where the net value result into liability or
asset, jurisdiction wise. The deferred tax liability (net) was Rs. 3.75 crore as at March 31, 2012. (Rs. Nil as at March
31, 2011).
Trade Payables
Trade payables are dues in respect of goods purchased or services received (including from employees,
professionals and others under contract) in the normal course of business. Trade Payable shown under
noncurrent liabilities represents amount payable towards retention bonus to certain employees. Trade
payables were Rs. 0.35 crore as at March 31, 2012 (Rs. Nil as at March 31, 2011).
Long Term Provisions
Long term provisions primarily represent provisions made towards certain employee benefits-(non- funded)
such as Bhavishya Kalyan Yojana, medicare, leave encashment etc. Long term provisions as at March 31, 2012
were Rs. 7.76 crore (Rs. 6.17 crore as at March 31, 2011).
Income Tax Liabilities (net)
Income Tax liabilities represent estimated income tax liabilities. The income tax liabilities (net of advance tax) as
at March 31, 2012 were Rs. 0.24 crore (Rs .4.83 as at March 31, 2011).
39
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Current liabilities
A summary of Current Liabilities is given below:
(Amount in ` Crore)
Particulars
Short-term Borrowings from Banks
Trade Payables
Other Current Liabilities
Short-term Provisions
Income Tax Liabilities (Net)
Total
As at
Mar 31, 2012
81.40
241.10
336.49
37.92
13.61
710.52
As at
Mar 31, 2011
73.41
177.94
59.38
25.86
336.59
Short Term Borrowings from banks
Short term borrowings from banks represents secured and un secured loans taken from banks by way of pre and
post shipment loans and cash credit borrowings. Short term borrowings from banks were Rs. 81.40 crore as at
March, 2012 (Rs. 73.41 crore at March, 2011).
Trade Payables
Trade payables are dues in respect of goods purchased or services received (including from employees,
professionals and others under contract) in the normal course of business.Trade Payable at the end of fiscal 2012
aggregated Rs. 241.10 crore (Rs. 177.94 crore at the end of fiscal 2011).
Other Current Liabilities
Major portion of other current liabilities represents current maturities of long term debts, dues payable to
statutory authorities and advance received from the customers. Other current liabilities at the end of fiscal 2012
aggregated Rs. 336.49 crore (Rs. 59.38 crore at the end of fiscal 2011).The said amount has gone up primarily due
to current maturities of long term debts. Current maturities of long term debts as at March 31, 2012 was Rs.
257.78 crore (Rs. 2.98 crore in fiscal 2011), Rs. 77.52 crore was outstanding as at March 31, 2012 on account of
statutory dues and advance received from customers (Rs. 55.28 crore as at March 31, 2011).
Short Term Provisions
Short term provisions represents provisions made towards employee benefits (current portion), provision for
final dividend and dividend tax on final dividend. Short term provisions as at March 31 ,2012 was Rs. 37.92 crore
(Rs. 25.86 crore as at March 31, 2011).
Income Tax Liability (Net)
Income Tax liabilities (net) as on March 31, 2012 was Rs. 13.61 crore (Rs. Nil as on March 31, 2011). Income tax
liabilities have been made based on the applicable tax laws.
Fixed Assets
Addition to the Gross Block of tangible assets excluding capital work-in progress and exchange fluctuations in
fiscal 2012amounted to Rs. 29.34 crore (Rs. 16.79 crore in fiscal 2011). Details of additions in fiscal 2012 were as
under:
(a)
(b)
(c)
(d)
(e)
(f )
(g)
Buildings Rs. 0.04 crore (Rs. 0.57 crore in fiscal 2011),
Plant and machinery-owned Rs. 3.86 crore (Rs. 2.30 crore in fiscal 2011),
Plant and machinery leased Rs. 0.08 crore (Rs. 0.35 crore in fiscal 2011 ),
Computers Rs. 16.50 crore (Rs. 8.49 crore in fiscal 2011),
Furniture and fittings Rs. 2.37 crore (Rs. 3.63 crore in fiscal 2011),
Vehicles Rs. 1.94 crore (Rs. 1.44 crore in fiscal 2011) and
lease hold improvements Rs. 4.55 crore (Rs. Nil crore in fiscal 2011). The amount in capital work-inprogress was Rs. 1.54 crore as on March 31, 2012 (Rs. 1.35 crore as on March 31, 2011). The Company has
capital commitment towards tangible assets of Rs. 4.58 crore as at March 31, 2012 as compared to
Rs. 6.42 crore as at March 31, 2011.
Intangible assets primarily represent cost of software licenses (other than internally generated).During the year,
the Company added Rs. 24.64 crore to the gross block of intangible assets (software licenses) During the
previous year, the Company added Rs. 6.79 crore to gross block assets of the Company. The major portions of
additions during the fiscal 2012 were on account of commencement of an Unit in Special Economic Zone (Blue
Ridge Unit). The Company has a capital commitment of Rs. 3.31 crore as at March 31, 2012 as compared to Rs.
10.42 crore as at March 31, 2011 towards intangible assets.
40
Goodwill on Consolidation
Goodwill on consolidation as at March 31, 2012 was Rs. 397.90 crore (344.57 crore as at March 31, 2011). This
amount is appearing in the books of Tata Technologies Pte Ltd on account of Incat acquisition. For the purpose
of consolidation, the said amount has been translated. Consequently, on account of translation impact there is a
movement in this account in fiscal 2012 as compared to fiscal 2011. Goodwill is tested for impairment. The
management does not foresee any risk of impairment on the carrying value of goodwill as at March 31, 2012.
Details of the movement have been provided in Note 20 forming part of consolidated financial statements.
Non-Current Investments
During the year, the Company invested in bonds and units of mutual funds. These are typically investments in
long -term funds/bonds to gainfully use the excess cash balance with the Company. Investments in bonds in
mutual funds aggregated Rs. 43 crore as on March 31, 2012 (Rs. Nil as on March 31, 2011).
Deferred Tax Asset (Net)
Deferred tax asset (net) as at March 31, 2012 was Rs. 5.57 crore (Rs. 8.59 crore as at March 31, 2011). The primary
reasons for decrease in deferred tax asset are attributable to the difference in provision for depreciation and
provision for expenses under section 43B of the Income Tax Act. Details of deferred tax asset have been given in
Note 6 of the financial statements of the Company.
Long Term Loans and Advances
Long Term Loans and Advances as at March 31, 2012 was Rs. 17.29 crore (Rs. 19.41 crore as at March 31, 2011).The
said amount has come down due to reduction of loan to others from Rs. 16.88 crore as at March 31, 2011to Rs.
14.14 crore as at March 31, 2012.
Income Tax Assets (net)
Income tax assets (net) were Rs. 20.74 crore as at March 31,2012(Rs.30.06 crore as at March 31,2011). The said
amount has come down as compared to the previous year due to receipt of income tax refund during the year
from the income tax department.
Current assets
A summary of current assets is given below:
(Amount in ` Crore)
Particulars
Current Investments
Inventories
Trade Receivables
Cash and Bank Balances
Other Current Assets
Short-term loans and advances
Total
As at
Mar 31, 2012
147.07
0.05
290.02
342.83
78.21
49.60
907.78
As at
Mar 31, 2011
96.07
0.77
231.30
173.33
42.78
7.90
552.15
Current Investments
As reported elsewhere in this report, during the year, the Company invested in units of mutual funds. These are
typically investments in short-term funds to gainfully use the excess cash balance with the Company. Current
Investments as at March 31, 2012 was Rs. 147.07 crore (Rs. 96.07 crore as at March 31, 2011).
Inventories
The Company had inventories of Rs. 0.05 crore as at March 31, 2012 (Rs. 0.77 crore as at March 31, 2011). The
inventory constitutes hardware and software products.
Trade Receivables
Trade receivables as at March 31, 2012 aggregated Rs. 290.02 crore (net of provision for doubtful debts) (Rs.
231.30 crore as at March 31, 2011). As a percentage of total income, sundry debtors were at 17.40 %as at March
31, 2012 as compared to 18.24% as at March 31, 2011. The Company provides provision for doubtful debts as a
percentage of the outstanding debts based on ageing. The cumulative provision towards bad and doubtful
debts as on March 31, 2012 stood at Rs. 16.71 crore (Rs. 13.54 crore as at March 31, 2011).
Cash and Bank Balances
Cash and bank balances include cash and cash equivalents and other bank balances. The Company’s Cash and
Bank balances as at March 31,2012 were Rs. 342.83 crore as on March 31, 2012 (Rs. 173.33 crore as on March 31,
2011). The cash and cash equivalents aggregated Rs. 291.93 crore as on March 31, 2012 (Rs. 157.39 crore as on
March 31, 2011). Other bank balances at the end of fiscal 2012 aggregated Rs. 50.90 crore (Rs. 15.94 crore at the
end of fiscal 2011)
41
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Other Current assets
Other current assets as on March 31, 2012 were Rs. 78.21 crore (Rs. 42.78 crore as at March 31, 2011). Significant
items of other current assets as at March 31, 2012 were, Bills of Exchange Rs. 36.59 crore (Rs. Nil as at March
31,2011), advances to suppliers, contractors and others Rs. 9.05 crore (Rs. 5.27 crore as at March 31, 2011) and
Prepaid expenses Rs.18.59 crore (Rs. 17.09 crore as at March 31, 2011). As can be seen from the above
information other current assets have gone up due to balance in bills of exchange account.
Short term Loans and advances
Short term loans and advances as on March 31, 2012 were Rs. 49.60 crore (Rs. 7.90 crore as at March 31, 2011).
Significant items of short term loans and advances as at March 31, 2012 were, deposit with financial companies
Rs. 10 crore (Rs. Nil as at March 31,2011), inter corporate deposits Rs. 30 crore (Rs. Nil as at March 31,2011),
security deposits Rs. 1.82 crore (Rs. 1.40 crore as at March 31,2011) and Loans and advances to employees Rs.
5.53 crore (Rs. 4.52 crore as at March 31, 2011). As can be seen from the above short term loans and advances
have gone up due to increase in deposits with financial institutions and inter corporate deposits. Deposits have
been placed with the said agencies due to availability of surplus funds.
Cah Flow - Tata Technologies Ltd. (Consolidated)
Cash Flow from Operating Activities (Consolidated)
(Amount in ` Crore)
Particulars
Net Profit after Taxation and Extraordinary Items
Depreciation and amortization
Provision for Income Tax
Provision for Deferred Tax
Dividend Income on Investment in mutual funds
Finance cost
Interest Income
Others
Operating profit before Working Capital Changes
Effect of working capital changes
Income Taxes paid (net)
Net Cash Flow generated from operating activities
2011-12
2010 - 2011
208.37
26.19
55.79
7.67
(16.47)
7.23
(7.07)
1.14
282.85
1.19
(38.36)
245.68
139.02
18.87
38.23
2.67
(1.15)
7.38
(9.32)
1.08
196.78
(5.70)
(37.85)
153.23
As at
Change
Mar 31, 2011
69.35
7.32
17.56
5.00
(15.32)
(0.15)
2.25
0.06
86.07
6.89
(0.51)
92.45
As can be seen from the above table, in fiscal 2012, the Company generated net cash of Rs. 245.68 crore (Rs.
153.23 crore in fiscal 2011) from operating activities.
Cash Flow from Investing Activities (Consolidated)
(Amount in ` Crore)
Particulars
Proceeds from sale of Tangible and Intangible Fixed Assets
Dividend Received
Interest Received
Payment for Purchase of Tangible and Intangible Fixed Assets
Inter Corporate Deposits Placed
Inter Corporate Deposits Refunded
Interest received from Inter corporate Deposit
Purchase of Mutual Fund
Sale of Mutual funds
Other Investing activities
Net cash flow (used in)/generated from investing activities
2011-12
2.36
16.47
3.65
(50.41)
(489.40)
459.40
2.31
(1,953.29)
1,864.30
(15.15)
(159.76)
2010 - 2011
Change
0.20
1.15
3.27
(21.22)
(271.00)
326.00
5.53
(367.83)
315.85
(14.31)
(22.36)
2.16
15.32
0.38
(29.19)
(218.40)
133.40
(3.22)
(1,585.46)
1,548.45
(0.84)
(137.40)
In fiscal 2012 the Company used in Rs. 159.76 crore on investment activities (Rs. 22.36 crore in fiscal 2011). The
significant items of cash used in investment activities in fiscal 2012 were (a) purchase of fixed assets Rs. 50.41
crore (Rs. 21.22 crore in fiscal 2011), (b) investment in units of Mutual Funds (net of sale) Rs. 88.99 crore (Rs. 51.98
crore in fiscal 2011) and (c) investment in intercorporate deposits (net of withdrawals) Rs. 30 crore ( Rs. 25 crore
withdrawn from intercorporate deposits as at March 31, 2011).
42
Cash Flow from financing activities (Consolidated )
(Amount in ` Crore)
Particulars
Proceeds from issue of shares including Premium
Interest Paid
Dividends Paid (including Dividend Tax)
Proceeds from Short Term borrowings
Repayment of Short Term borrowings
Proceeds from Long Term borrowing
Repayment of Long Term borrowings
Net cash flow (used in)/generated from financing activities
2011-12
2010 - 2011
Change
141.27
(7.31)
(65.72)
99.79
(98.13)
0.37
(3.46)
66.81
0.57
(7.38)
(60.54)
7.92
1.75
(3.33)
(61.01)
140.70
0.07
(5.18)
91.87
(98.13)
(1.38)
(0.13)
127.82
In fiscal 2012, the significant item of cash generated from financing activities were proceeds from issue of
shares amounting to Rs. 141.27 crore (Rs. 0.57 crore in fiscal 2011) and proceeds from short term borrowings
amounting to Rs. 99.79 crore (Rs. 7.92 crore in fiscal 2011). As can be seen from the above, the significant of item
of cash used in financing activities was on account payment of dividends including dividend tax amounting to
Rs. 65.72 crore (Rs. 60.54 crore in fiscal 2011).
Cash Position
Cash and cash equivalents as on March 31, 2012 amounted to Rs. 609.49 crore (Rs. 283.75 crore as at March 31,
2011). Cash and cash equivalents include investments in mutual funds, inter corporate deposits and bonds, bills
of exchange, deposits with financial Companies and loans to associates.
43
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Corporate Governance Report
1.
PHILOSOPHY
“Corporate governance has become the new corporate jargon like share-holder value. Corporate governance is
really a state of mind. It is embodied in the feelings and traditions of the Tata group. JRD Tata’s name has been
mentioned several times today and the group owes a great deal of this tradition to him. He often referred to the
manager’s role as one of trusteeship.”
“Corporate governance is today, one of the attributes of a good corporate citizen. It is part of the management
framework, but it does not replace the tradition ingrained into your bones.”
RATAN TATA
Ceremony of National Award for
Excellence in Corporate Governance, 2001
The philosophy and ultimate goal at Tata Technologies is to serve corporate purposes for enhancing the long
term value of the organization for its stakeholders, by providing a framework within which stakeholders can
pursue the objectives of the organisation most effectively. This philosophy is further strengthened by Tata
Groups’ legacy through implementation of the Tata Business Excellence Model (TBEM). TBEM is a ‘customisedto-Tata’ adaptation of the globally renowned Malcolm Baldrige organizational assessment model mandated to
help Tata Group companies achieve business objectives through specific processes which delivers strategic
direction and drives business improvement. TBEM assessments now lay renewed emphasis in areas of climate
change, safety, Corporate Governance and innovation. Assessments now capture Corporate Governance
practices among Tata Group Companies as part of the main application.
Corporate Governance signifies acceptance by management of the inalienable rights of shareholders as the
true owners of the organization and of their own role as trustees on behalf of the shareholders.
Corporate Governance is a set of principles, policies, processes and practices affecting the way a corporation is
run and which help it fulfill responsibilities to all its stakeholders – shareholders, employees, customers,
suppliers, government and society at large. It is about how an organization is managed. The Leadership of Tata
Technologies continuously aims for ‘Change for the Better’ with strong emphasis on customer satisfaction,
sustainable growth and increase in the stakeholder value. This orientation towards fair and ethical governance
stems from the culture and mindset imbibed in it as part of the Tatas and upheld through a passion for
excellence championed by senior leaders. Tata Technologies is committed to adding value and achieving
continual improvements through leadership by example.
For Tata Technologies, Corporate Governance implies observance of certain basic principles of ethical growth
and is more than mere compliance with global standards of governance and disclosure. Tata Technologies’
leadership team is committed to managing the Company in accordance with the organization’s Vision, Mission
and Values.
•
Vision: “We are determined to be the world’s number one partner to the manufacturing industry.”
•
Mission: “Better products benefit people – that is our business.”
Though the Company is not listed and the statutory guidelines on Corporate Governance are not applicable,
the Company has voluntarily opted for adoption of various Corporate Governance measures. There have been
continuous efforts made to improve and increase the Corporate Governance measures in the recent years,
which include among others improved Board reporting, building a strong ethics culture with increased focus
on implementation of the Tata Code of Conduct, commitment to corporate sustainability, legal compliances
systems, more focused internal audit, etc.
2.
BOARD OF DIRECTORS
As a guard of the Company's Corporate Governance practices, the Board of Directors of the Company protects
the long-term interests of stakeholders of the Company. The Board is the representative of the shareholder to
achieve the overall purpose of the organisation.
The Board is primarily responsible to provide and evaluate the strategic direction of the Company, management
policies and their effectiveness. The Board's responsibilities further include overseeing the functioning of the
Company's top management, monitoring legal compliance and management of the risks related to the
Company's operations.
44
At present the Board consists of five Directors. The Company has an optimum mix of Executive and
Non-Executive Directors with eighty percent of the Directors being Non-Executive.The Non-Executive Directors
represent various fields with expertise in their respective areas and their positive contribution helps Company
to define effective strategies for future growth.The Managing Director along with Executive Management Team
in turn implements and monitors the operational strategies, plans, systems and processes to enable the
Company to achieve the goals set by the Board.
The calendar of the Board Meetings for the whole year is finalized in advance at the start of the year in
consultation with all the Board members. The relevant background materials and information on the agenda
items are distributed to the Board members in advance of meetings. All the Committees of the Board report to
the Board.The minutes of their meetings are placed before the Board regularly.The Committees also bring to the
Board all those matters considered by them to be of special significance. The Board meets the members of the
senior management of the Company from time to time. A summary of the Board Decisions made in the last two
years is being placed before every quarterly Board Meeting as a good governance practice.
The Board met six times during the financial year 2011-12, on April 30, 2011, July 27, 2011, October 18, 2011,
January 23, 2012, February 15, 2012 and March 27, 2012. The time gap between any two meetings was less than
four months. The quorum of the meetings is either two members or one third of the members of the Board,
whichever is higher.The attendance of the Directors at the Board Meetings held during the year is as follows:
Designation
Name
No. of Board Meetings
Held
Participated
S Ramadorai
Non-Executive Chairman
6
6*
R Gopalakrishnan
Non-Executive Director
6
5
P P Kadle
Non-Executive Director
6
5*
C Ramakrishnan
Non-Executive Director
6
5
P R McGoldrick
Managing Director
6
6*
* Include participation through Audio/Video conferencing
Mr C Ramakrishnan and Mr R Gopalakrishnan are liable to retire at the ensuing Annual General Meeting and
offer themselves for reappointment. Attention of the Members is invited to the relevant item in the Notice of the
Annual General Meeting seeking their approval on their reappointment.
None of the Non-Executive Directors have any material pecuniary relationship or transactions with the
Company.
None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more than 5
Committees across all companies in which one is a Director. Chairmanship/Membership of Board Committees
for this includes only Audit and Shareholders’ Grievance Committees. Necessary disclosures regarding
Committee positions in other public companies as at March 31, 2012 have been made by the Directors.
INFORMATION REGARDING DIRECTORS:
Mr S Ramadorai, 67, has served as Chairman of the Company since 2001. He is currently serving as the
Vice Chairman-Non Executive of Tata Consultancy Services Ltd (TCS). He had joined TCS as a trainee engineer
and went on to become CEO in 1996. In October 2009, he stepped down as the CEO, leaving a $ 6 billion global IT
services company to his successor and was made the Vice Chairman of the company.
In February 2011, Mr Ramadorai was appointed by the Indian Government as Advisor to the Prime Minister in
the National Skill Development Council, in the rank of a Cabinet Minister. The Council which is headed by the
Prime Minister seeks to develop a strategy for Skill Development at the National level with a view to address the
skill deficit.
Mr Ramadorai is also on the Boards of a number of companies and educational institutions - Tata Industries Ltd,
Hindustan Unilever Ltd, Bombay Stock Exchange, MIT Sloan School of Management (EMSAB), etc.
45
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Mr Ramadorai was awarded the Padma Bhushan in January 2006 in recognition of his commitment and
dedication to the IT industry. In April 2009, he was awarded the CBE (Commander of the Order of the British
Empire) by Her Majesty Queen Elizabeth II for his contribution to the Indo-British economic relations.
His academic credentials include a Bachelor’s degree in Physics from Delhi University (India), a Bachelor of
Engineering degree in Electronics and Telecommunications from the Indian Institute of Science, Bangalore
(India) and a Master’s degree in Computer Science from the University of California–UCLA (USA). In 1993, he
attended the Sloan School of Management’s highly acclaimed Senior Executive Development Program.
Other Directorships:
Public Companies: Tata Consultancy Services Ltd, Tata Industries Ltd, CMC Ltd, Hindustan Unilever Ltd, Piramal
Healthcare Ltd,Tata Elxsi Ltd,Tata Teleservices (Maharashtra) Ltd, Computational Research Laboratories Ltd,Tata
Communications Ltd, Tata Advanced Systems Ltd, Asian Paints Ltd, Bombay Stock Exchange Ltd, Tata Lockheed
Martin Aerostructures Ltd and Tata Aerospace Systems Ltd.
Foreign Companies: Tata Communications International Pte Ltd, Singapore, Tata America International
Corporation, US,Tata Elxsi (Singapore) Pte Ltd, Computational Research Laboratories, Inc.
Other Bodies Corporate: Member of the Research, Innovation and Enterprise Council, Singapore, Advisor to
Prime Minister’s National Skill Development Council, Breach Candy Hospital Trust, Teach to Lead and Tata
Institute of Social Sciences.
Memberships and Chairmanships of Audit Committee in other Public Companies: Tata Elxsi Ltd, Hindustan
Unilever Ltd, Tata Teleservices (Maharashtra) Ltd, Tata Advanced Systems Ltd (Chairman), Computational
Research Laboratories Ltd (Chairman) and Bombay Stock Exchange Ltd.
Memberships and Chairmanships of Investor Grievance Committee in other Public Companies: Bombay
Stock Exchange Ltd (Chairman) and Tata Consultancy Services Ltd.
Mr Ramadorai held 1,32,000 equity shares of the Company as on March 31, 2012, constituting 0.31% of the
paid-up capital of the Company. No new stock options were granted to him and no stock options were exercised
by him during the year ended March 31, 2012.
Mr P R McGoldrick, 62, has over 41 years of experience in information technology and is responsible for Tata
Technologies as its Managing Director. He holds a Master’s degree in Computer Science from Stanford
University, USA and completed the Harvard Business School Advanced Management Program (AMP 109).
Before joining the Tata Group in 1981, he had spent 11 years at Lawrence Livermore National Laboratory in the
United States where he had technical responsibility for several complex information systems projects. He also
provided consulting to computer companies throughout the United States on project management, advanced
products, multiprocessor computer systems, man-machine interfaces and improved software productivity.
Other Directorships:
Public Companies: Tata Elxsi Ltd.
Foreign Companies: Tata Technologies Pte Ltd, Singapore, Titan Watches & Jewellery International (Asia
Pacific) Pte Ltd, Singapore, INCAT International Plc, UK, Tata Technologies Inc, US, Tata Technologies(Thailand)
Ltd, Thailand, RNT Associates International Pte Ltd, Singapore, Tata Technologies Europe Ltd, UK and Tata
Technologies de Mexico, S.A. de C.V., Mexico.
Mr McGoldrick held 5,60,000 equity shares of the Company directly, constituting 1.30% of the paid-up capital of
the Company and 40,000 equity shares constituting 0.10% via Barclays Wealth Corporate Services (Guernsey)
Ltd as on March 31, 2012. No new stock options were granted to him and no stock options were exercised by him
during the year ended March 31, 2012.
Mr R Gopalakrishnan, 66, is a Non-Executive Director of Tata Sons Ltd. He is a member of the Group Corporate
Centre of Tata Group, besides being on the Boards of various Tata companies. Prior to joining the Tata Group in
August 1998, he was the Vice-Chairman of Hindustan Unilever Ltd. He is a past president of the All India
Management Association.
Mr Gopalakrishnan holds a Bachelor’s degree in Science and a B.Tech (Electronics) degree from the Indian
Institute of Technology (IIT), Kharagpur.
46
Other Directorships:
Public Companies: Tata Sons Ltd, Tata Chemicals Ltd, Tata Power Company Ltd, Rallis India Ltd, Tata Autocomp
Systems Ltd, Akzo Nobel India Ltd, Castrol India Ltd, Dhaanya Seeds Ltd, Advinus Therapeutics Ltd and Metahelix
Life Sciences Ltd.
Private Companies: ABP Pvt Ltd.
Foreign Companies: Trust Energy Resources Pte Ltd and IMACID S.A.
Memberships and Chairmanships of Audit Committee in other Public Companies: Tata Chemicals Ltd,
Akzo Nobel India Ltd and Castrol India Ltd.
Mr Gopalakrishnan held 64,200 equity shares of the Company as on March 31, 2012, constituting 0.15% of the
paid-up capital of the Company. No stock options were exercised by him and no new stock options were
granted to him during the year ended March 31, 2012.
Mr Praveen P Kadle, 55, is the Managing Director & CEO of Tata Capital Limited a subsidiary of Tata Sons Limited.
Tata Capital along with its subsidiary companies, is the Tata Group’s foray into the financial services space
covering products and services ranging from Retail and commercial lending, Distribution and Broking, Wealth
Management, Investment Banking, Housing Finance, Forex,Travels & Cards as also Private Equity.
Mr Kadle is an honors graduate in Commerce & Accountancy from the Bombay University and has qualified as a
Chartered Accountant, Cost & Works Accountant and Company Secretary.
Mr Kadle is a Board member on various Tata and non-Tata companies. He contributes to many industry and
economic bodies both domestic and international. These include, a position on the Advisory Board of Japan’s
Institute for Indian Economic Studies (IIES) and as a member of the Advisory Board of Centre for Strategic
Leadership - NUS Business School, Singapore. Additionally, he is also actively involved with various Public
Charitable institutions notably as the Board Member and Honorary Treasurer of Child Rights and You (CRY).
Mr Kadle has received a number of awards in recognition of his outstanding contribution to Tata Motors Limited
which are: CNBC-TV18, the country’s best performing CFO in the auto & auto ancillaries sector for 2006;‘the best
CFO of the year 2005’ in India by business today; the ‘CFO of the year 2004’ by IMA (formerly known as economist
intelligence unit).
Other Directorships:
Public Companies: Tata Capital Ltd, Tata Capital Financial Services Ltd, Tata Securities Ltd, e-Nxt Financials Ltd,
TC Travel & Services Ltd, Tata Capital Housing Finance Ltd, Tata AutoComp Systems Ltd, Tata Toyo Radiators Ltd,
TT Holdings & Services Ltd, Tata Cleantech Capital Ltd and The Andhra Pradesh Paper Mills Ltd (a subsidiary of
International Paper Inc., USA)
Private Companies: International Asset Reconstruction Company Pvt Ltd.
Foreign Companies: Tata Technologies Pte Ltd, Singapore, Tata Technologies Europe Limited, UK, INCAT
International Plc, UK, Tata Technologies Inc, USA, Tata Capital Pte Limited, Singapore, Tata Capital Advisors Pte
Ltd, Singapore,Tata Capital Markets Pte Ltd, Singapore and Tata Capital Plc, UK.
Memberships and Chairmanships of Audit Committee in other Public Companies: Tata Capital Housing
Finance Ltd,TC Travel & Services Ltd,TT Holdings & Services Ltd,Tata AutoComp Systems Ltd, e-Nxt Financials Ltd
and The Andhra Pradesh Paper Mills Ltd.
Memberships and Chairmanships of Investor Grievance Committee in other Public Companies: Tata
Capital Ltd.
Mr Kadle held 1, 39,200 equity shares of the Company as on March 31, 2012, constituting 0.32% of the paid-up
capital of the Company. No stock options were exercised by him and no new stock options were granted to him
during the year ended March 31, 2012.
Mr. C. Ramakrishnan, 56, was appointed as the Chief Financial Officer of Tata Motors Limited in
September 2007, having joined the company in 1980 as the Junior Accounts Officer. He handled corporate
treasury and accounting functions with management accounting/MIS. Following a two-year company-wide IT
project responsibility covering R&D, Manufacturing, Sourcing and Sales and Services, he had worked in the Tata
Group Chairman’s Office for more than 7 years before being appointed as the Chief Financial Officer of Tata
Motors Limited. As the Chief Financial Officer of Tata Motors Limited, he is responsible for Finance, Accounts,
47
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Taxation, Business Planning, Investor Relations,Treasury, CRM & DMS and IT. Mr. Ramakrishnan holds a Bachelor’s
degree in Commerce and is a Chartered Accountant and a Cost Accountant. Mr. Ramakrishnan was awarded
Indian Industries Best CFO Award by CNBC TV18, Business Achiever Award by CA Institute and Best CFO Award
by Business Today. He also ranked as Best CFO (India) in regional polls with investors in Asia Pacific by Asset
Magazine and Institutional Investor Magazine.
Other Directorships:
Public Companies: Tata Cummins Ltd, Sheba Properties Ltd,Tata Services Ltd,Tata Motors Finance Ltd, Fiat India
Automobiles Ltd, Automobile Corporation of Goa Ltd and Tata Marcopolo Motors Ltd.
Foreign Companies: Tata Hispano Motors Carrocera S.A., Spain, Tata Hispano Motors Carrosserries Maghreb
S.A., Morocco, TML Holdings Pte Ltd, Singapore, Tata Motors (Thailand) Ltd, Thailand, Tata Daewoo Commercial
Vehicle Company Ltd, South Korea and Tata Motors (SA) Proprietary Ltd, South Africa.
Memberships and Chairmanships of Audit Committee in other Public Companies: Tata Cummins Ltd,
Sheba Properties Ltd, Fiat India Automobiles Ltd (Chairman), Tata Motors Finance Ltd, Tata Marcopolo Motors
Ltd (Chairman) and Automobile Corporation of Goa Ltd.
Mr. Ramakrishnan held 44,200 equity shares of the Company as on March 31, 2012, constituting 0.10% of the
paid-up capital of the Company. No stock options were exercised by him and no new stock options were
granted to him during the year ended March 31, 2012.
3.
AUDIT COMMITTEE
The Audit Committee comprises three Non-Executive Directors, all of whom are financially literate. The Audit
Committee met eight times during the year 2011-12, on April 30, 2011, June 14, 2011, July 27, 2011,
August 29, 2011, October 18, 2011, November 16, 2011, January 23, 2012 and March 15, 2012.
Members of the Audit Committee and the number of meetings attended by each Director for the financial year
2011-12 are as follows:
Name
Designation
No. of Meetings
Held
Participated
S Ramadorai
Non-Executive Chairman
8
8*
P P Kadle
Non-Executive Director
8
7*
C Ramakrishnan
Non-Executive Director
8
6
* Include participation through Audio/Video conferencing
The Internal Auditors, M/s Ernst & Young attended five meetings, the representatives of the Statutory Auditors of
the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, attended all meetings and the Chief
Financial Officer attended all the meetings. The Chief Internal Auditor of Tata Motors Ltd attended six meetings
personally or through representative. The Company Secretary acts as the Secretary to the Committee Meetings.
The quorum of the meetings is either two members or one third of the members of the Committee, whichever is
higher (Please refer Explanatory Statement pursuant to section 173 (2) of the Companies Act, 1956, annexed to
Notice of Annual General Meeting, provided elsewhere in this Annual Report).
An Audit Committee Charter has formally been adopted for the Audit Committee outlining its responsibilities in
detail.The role of the Audit Committee includes in brief the following:
•
To review reports of the Internal Auditor and recommend to the Board.
48
•
To decide on the scope of the Internal Auditors work including the examination of major items of
expenditure.
•
To meet Statutory and Internal Auditors periodically and discuss their findings, suggestions and other
related matters.
•
To review the weaknesses in internal controls, if any, reported by the Internal and Statutory Auditors and
report to the Board the recommendations relating thereto.
•
To act as a link between the Statutory and Internal Auditors and the Board of Directors.
•
To recommend a change in the Auditors if in the opinion of the Committee the Auditors have failed to
discharge their duties adequately.
•
To establish and review accounting policies.
•
To ensure resources are conserved and tendencies for extravagance are avoided.
•
To review financial statements before submission to the Board.
NON-EXECUTIVE DIRECTORS’ REMUNERATION:
To acknowledge the contribution of the Non-Executive Directors towards the growth of the organization, the
Company paid sitting fees of Rs 15,000/- per meeting to all Non-Executive Directors for attending the meetings
of the Board, Audit Committee and Compensation & Remuneration Committee. The details of the sitting fees
paid to the Directors is as under:
Name
S Ramadorai
Amount in Rs.
2,85,000
R Gopalakrishnan
75,000
P P Kadle
2,55,000
C Ramakrishnan
2,25,000
Total
8,40,000
Only sitting fees have been paid to the Non-Executive Directors during the year. No commission has been paid
to any Non-Executive Director of the Company.
4.
COMPENSATION AND REMUNERATION COMMITTEE
The Compensation and Remuneration Committee met five times during the year 2011-12, on April 30, 2011,
June 14, 2011, July 27, 2011, October 18, 2011 and January 23, 2012.
Members of the Compensation Committee and number of meetings attended by each Director for the financial
year 2011-12 are as follows:
Name
Designation
No. of Meetings
Held
Participated
S Ramadorai
Non-Executive Chairman
5
5*
P P Kadle
Non-Executive Director
5
5*
C Ramakrishnan
Non-Executive Director
5
4
* Include participation through Audio/Video conferencing
49
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Powers of the Compensation and Remuneration Committee:
(I)
Deciding upon the remuneration of the Managing Director of the Company;
(ii)
Supervising and administrating the Employee Stock Option Plan and ensuring that suitable policies and
systems are in place to comply with the guidelines issued by the Securities and Exchange Board of India or
any other appropriate authority in connection with the said Scheme.
The quorum of the meetings is either two members or one third of the members of the Committee, whichever is
higher (Please refer Explanatory Statement pursuant to section 173 (2) of the Companies Act, 1956, annexed to
Notice of Annual General Meeting, provided elsewhere in this Annual Report).
Re-appointment of Managing Director:
The shareholders in their meeting held on July 20, 2010 had accorded their consent for the reappointment of
Mr Patrick McGoldrick as Managing Director of the Company, subject to the approval of the Central
Government. Subsequently, the Central Government vide letter dated February 28, 2011 has approved the
reappointment of Mr McGoldrick as the Managing Director of the Company for the period September 01, 2010
to September 08, 2014.
Terms of appointment and payment of remuneration to the Managing Director, Mr Patrick McGoldrick in Tata
Technologies Limited is as under:
5.
Period of Appointment
September 01, 2010 to September 08, 2014
Salary
Up to a maximum of Rs. 4,00,000/- per month.
Incentive Remuneration
Up to 200% of salary, to be paid at the discretion of the Board.
Perquisites and Allowances
Provision of hotel accommodation and chauffeur driven car during his
stay in India. All expenses in connection with the Company’s official
business are paid by the Company.
Minimum Remuneration
Salary, incentive remuneration as specified above.
Notice period on either side
Agreement can be terminated by either party by giving three months’
notice or the Company paying three months’ salary in lieu of notice.
OTHER KEY BOARD AND MANAGEMENT COMMITTEES
Apart from the Audit Committee and the Compensation & Remuneration Committee, the Company has the
following committees:
50
a.
Committee of Directors: Mr P P Kadle, Mr C Ramakrishnan and Mr P R McGoldrick, Directors are the
members of the Committee. The Committee was constituted by the Board in its meeting on
March 09, 2001 for carrying out certain functions pertaining to the day-to-day operations of the
Company. The powers of the Committee include evaluation / negotiation of facility agreements for
availing working capital facilities within the specified limits, opening and closing of bank accounts,
authorization for creating charges on the current assets of the Company, authorization for providing
comfort letters or corporate guarantees to banks or financial institutions for funding of
Company’s subsidiaries, transfer of amounts to and from the Company’s Provident Fund, appointment of
additional/substitute attorneys, entering into agreement(s) with business partner(s) etc.
b.
Stock Allotment Committee: The Board had constituted the Stock Allotment Committee to carry out
certain functions in connection with the offer of Company’s shares to employees of Company’s
subsidiaries on private placement basis. Mr P P Kadle, Director, Mr P R McGoldrick, Managing Director and
Mr Warren Harris, President and COO, are the three members of the Committee.The role of the Committee
primarily is to finalize/approve letter of offer for private placement of shares to employees of Company’s
subsidiaries, to determine the employees who will be eligible to participate, allotment of shares, to obtain
annual valuation of shares, etc. The Committee is also responsible to provide supervision, approval,
direction, recommendation with respect to the Employee Stock Purchase Program (ESPP) as
implemented by the Tata Technologies Limited Employees Stock Option Trust and to approve the
implementation/transaction documents related to the ESPP and also to remove any difficulty or question
that may arise in the implementation of the ESPP scheme.
c.
6.
Executive Committee: To provide more effective decision making, the Boards of Tata Technologies Ltd
and Tata Technologies Pte Ltd have formed a management committee consisting of Mr P P Kadle,
Director, Mr P R McGoldrick, Managing Director and Mr Warren Harris, President and COO.
MANAGEMENT OF BUSINESS ETHICS
Tata Technologies has adopted the Tata Code of Conduct (TCOC). The Code of Conduct upholds the highest
standards of corporate and personal conduct and is the guiding force on the ethical conduct behind every Tata
Company, no matter what business they are in. It establishes the code of ethics that governs all Tata ventures,
new and old. The Code of Conduct is communicated to the organization’s partners/suppliers through
interaction with them. Company established procedures to deploy TCOC across the organization which
promotes and ensures ethical behavior in all stakeholder interactions. The TCOC is disseminated through
presentations, circulation of “Code” through various processes such as at the time of employee induction
(joining), highlighting the same in posters at strategic locations “Employee Handbook” and a dedicated section
as “Management of Business Ethics” on the intranet portal of the Company. To obtain a uniform measurable
deployment of the TCOC across all employees and contractors of Tata Technologies, wherever they might exist
globally, the Company created a specifically tailored training program on TCOC using ‘iGETIT®’. This training
program had been added to each employee’s ‘Learning Path’. The tool not only effectively tracks the number of
employees who had undergone the training program but also monitors time taken on the program and each
individual’s score.
The Company has a committee on Prevention of Sexual Harassment (POSH) and a Whistle Blower policy in place.
The Whistle Blower Policy was adopted in February 2007 in extension of the Tata Code of Conduct (TCOC). Any
actual or potential violation of the Code of Conduct, howsoever insignificant or as such, would be a matter of
serious concern for the Company. Whistle Blower policy has been established to provide a mechanism for
employees of the Company to approach the Ethics Counselor/Chairman of the Audit Committee of the
Company to report any concerns.The Policy has been communicated to all the employees of the Company.
Possibility of breach of ethical behavior can be reported by various means to the Ethics Counsel such as by post,
mail or phone calls. A dedicated email account ethics@tatatechnologies.com is available both at the intranet
and internet sites for the stakeholders to report any ethical breach. These are then managed by a well laid
process. The required actions are implemented through the support functions such as HR, Finance and Legal.
Results are reported to the Chief Ethics Counselor on a quarterly basis and are reviewed by the Audit
Committee. Apart from encouraging people to report ethical violations, the Company is also trying to establish
a culture to report examples of good ethical behavior of employees to bring in ethical positivity at the work
place.
The organization structure for the Management of Business Ethics (MBE) in the Company comprises:
a.
b.
c.
d.
Ethics Committee
Chief Ethics Counselor
Ethics Counselor and
Chairperson–Prevention of Sexual Harassment (POSH)
The Company received five complaints during the year. One of them was under POSH and all the complaints
received were closed. The Ethics Committee has conducted various activities during the year including Ethics
Day & Pledge, MBE Awareness Workshops, Customer feedback on Ethical behavior of Company’s employees etc.
During the year, the Company has adopted and implemented the Gift and Bribery Policy, in line with the Tata
Code of Conduct and applicable laws, if any.
7.
RISK MANAGEMENT
The Company is committed to having a reliable risk management system. The Management is accountable for
integration of the risk management practices into day to day activities of Company. Different types of business
risks are identified by the top management team and along with risk scores and mitigation measures are
reported to the Audit Committee.The Audit Committee periodically reviews the policies on risk assessment and
risk management, guidelines to govern the process and the major financial risk exposures and the steps
undertaken to control them. Readers are requested to refer the Management Discussion and Analysis Report
for more details.
51
Eighteenth Annual Report 2011-12
Tata Technologies Limited
8.
SUBSIDIARY COMPANIES
The Company as on March 31, 2012 had 8 subsidiaries. The details are mentioned elsewhere in the Annual
Report. The minutes and resolutions of all the subsidiaries are periodically placed before the Board of Directors
of the Company. The attention of the Board is drawn to all significant transactions and arrangements entered
into by the subsidiary companies. The following Board meetings/Shareholders Meeting of subsidiary
companies were held during the year:
Name of the
Subsidiary
Company
Tata Technologies Tata Technologies Tata Technologies
INCAT
Pte Ltd,
International Plc.,
(Thailand) Ltd,
Europe Ltd,
Singapore
UK
Thailand
UK
INCAT
GmbH,
Germany
Tata
Technologies
Inc.,
USA
Tata Technologies
Tata Technologies
de Mexico SA
(Canada) Inc.,
de CV,
Canada
Mexico
Dates of Board
Meetings held
during the year
06-May-2011
20-Jul-2011
N/A
N/A
N/A
20-Apr-2011
29-Jun-2011
27-Jul-2011
27-Jun-2011
N/A
Dates of
Shareholder
Meetings/
Resolutions
13-Jul-2011
30-Jul-2011
N/A
27-Sep-2011
17-Jan-2012
29-Jun-2011
22-Aug-2011
30-Sep-2011
The updates of major decisions of the subsidiary companies are regularly presented before the Audit
Committee and the Board. Following are the key points of subsidiaries which are regularly taken up in the Board
meetings:
9.
•
Nomination of Directors on Board of each subsidiary
•
Minutes of all the meeting of subsidiaries held between two Board meetings
•
Major dealings of subsidiaries' investment, fixed assets, loans etc.
•
Compliance by subsidiaries with applicable laws of the country; and
•
Business plan of each subsidiary and its periodic update to the Company's Board.
GENERAL BODY MEETINGS
The details of the General Meetings held in the last three years are as follows:
Financial year
52
AGM/EGM
Venue
Time
Date
2010-11
17th AGM
25 , Rajiv Gandhi Infotech Park,
Hinjawadi, Pune -411057
3:30 p.m.
July 27, 2011
2010-11
EGM
25 , Rajiv Gandhi Infotech Park,
Hinjawadi, Pune -411057
4.00 p.m.
April 30, 2011
2009-10
16th AGM
25 , Rajiv Gandhi Infotech Park,
Hinjawadi, Pune -411057
3:30 p.m.
July 20, 2010
2009-10
EGM
Board Room, 1st Floor, Tata
Capital Ltd, One Forbes, Dr V B
Gandhi Marg, Mumbai- 400 023
4.00 p.m.
March 05, 2010
2008-09
15th AGM
25 , Rajiv Gandhi Infotech Park,
Hinjawadi, Pune -411057
3:30 p.m.
July 20, 2009
The details of Special Resolutions passed in the General Meetings in the last three years are as follows:
AGM/EGM
Special Resolutions
Date
EGM
April 30, 2011
i.
Issue of equity shares to Alpha TC Holdings Pte Ltd and Tata
Trustee Company Ltd., acting in its capacity as Trustee to
Tata Capital Growth Fund- I
ii. Amendment to the Articles of Association of the Company
EGM
March 05, 2010
I. Reduction of Securities Premium Account
ii. Private placement of shares
No Special resolutions were passed in the 15th, 16th and the 17th Annual General Meetings of the Company.
The resolutions were passed by show of hands and none of the resolutions were passed by way of poll.
Attendance of the Directors at the last AGM held on July 27, 2011:
Name of the Director
10.
Attendance at the last AGM
S Ramadorai
Yes
R Gopalakrishnan
Yes
P P Kadle
Yes
C Ramakrishnan
Yes
P R McGoldrick
Yes
DISCLOSURES
10.1 Disclosures on materially significant related party transactions i.e. transactions of the Company of
material nature, with its promoters, the Directors or Management or their relatives, etc. that may have
potential conflict with the interests of the Company at large:
The particulars of transactions between the Company and the ‘Related Parties’ are mentioned at
Note 19(viii) Related Party Disclosures for the year ended March 31, 2012 of Notes to Accounts mentioned
elsewhere in the Annual Report. None of these transactions are likely to have any conflict with the
Company’s interest.
10.2 Details of the non-compliance by the Company, penalties or strictures imposed on the Company by any
statutory authority on any matter related to the capital markets during the past three years – NIL.
10.3 The Certification by the Managing Director (CEO) and Chief Financial Officer (CFO), to the Board, on the
true and fair view of the Financial Statements for the year ended March 31, 2012 is annexed hereto.
11.
GENERAL SHAREHOLDER INFORMATION
11.1 Registrar and Share Transfer Agents: Investors are requested to take note of the contact details of the
Registrars and Share Transfer Agents of the Company, M/s TSR Darashaw Ltd:
TSR Darashaw Ltd
6-10 Haji Moosa Patrawala Industrial Estate,
20, Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011
Tel: +91 22 66568484
Fax: +91 22 66568494
Email: csg-unit@tsrdarashaw.com
Website: www.tsrdarashaw.com
53
Eighteenth Annual Report 2011-12
Tata Technologies Limited
11.2 Share Transfer System: The share transfers received for transferring physical share certificates are
processed by the Registrar and Transfer Agents of the Company. The Board ratifies such transfers on a
periodical basis.
11.3 Dematerialisation of Shares: The Company has dematerialized its Equity Shares with CDSL and NSDL and
the Company’s ISIN is INE142M01017. The share transfers of dematerialized shares can be made through
your Depository Participant.
11.4 Investor Complaints: A total of 685 investor complaints/queries were received during the year 2011-12.
6 complaints were outstanding on March 31, 2012 and were attended to and resolved in first week of
April, 2012.
11.5 Unclaimed and Unpaid Dividends: In case of non-receipt/non encashment of the dividend payments,
members are requested to write to the Company’s Registrars and Transfer Agents on plain paper. As per
the provisions of Section 205A read with Section 205C of the Companies Act, 1956, the Company is
required to transfer the unpaid and unclaimed dividends, matured deposits, redeemed debentures and
interest accrued thereon remaining unclaimed and unpaid for a period of 7 years from the date they
became due for payment, to the Investor Education and Protection Fund (IEPF) set up by the Central
Government. Hence, the Company needs to transfer the unpaid/unclaimed dividends to the IEPF after the
period of seven years, as per the provisions of the Act and the rules made there under.
Given below are the indicative dates for transfer of unclaimed and unpaid dividends to IEPF by the
Company:
Dividend
Financial year
Rs.
Rate in %
Dividend
Payment Date
(DD/MM/YYYY)
Proposed Date* of
Transfer to IEPF
(DD/MM/YYYY)
2004-05
3.00
30.00
27/06/2005
30/07/2012
2005-06
3.00
30.00
27/06/2006
31/07/2013
2006-07
2.00
20.00
28/06/2007
01/08/2014
2007-08
2.00
20.00 (Interim)
15/04/2008
20/05/2015
2007-08
2.00
20.00 (Final)
22/07/2008
03/09/2015
2008-09
3.00
30.00 (Interim)
30/03/2009
29/04/2016
2008-09
2.00
20.00 (Final)
21/07/2009
05/09/2016
2009-10
7.00
70.00
21/07/2010
05/09/2017
2010-11
7.00
70.00 (Interim)
01/02/2011
25/02/2018
2010-11
5.00
50.00 (Final)
28/07/2011
01/09/2018
2011-12
3.00
30.00 (Interim)
23/08/2011
27/09/2018
2011-12
3.00
30.00 (Interim)
04/11/2011
09/12/2018
2011-12
3.00
30.00 (Interim)
28/01/2012
04/03/2019
*The proposed date is an indicative date and the actual date of transfer to IEPF may vary.
The unclaimed dividend amounts for the financial years 2000-01, 2001-02, 2002-03 and 2003-04 have
been transferred to the Investor Education and Protection Fund as per the relevant provisions of the Law.
No claim of the shareholders shall lie against the Company or the IEPF in respect of the amounts
transferred to the IEPF. Investors of the Company who have not yet encashed their unclaimed/ unpaid
amounts are requested to do so at the earliest.
54
11.6 Shareholding Pattern as on March 31, 2012
No. of
Shareholders
Category
No. of Shares
% of the
Paid-up Capital
Tata Motors Limited
1
3,03,00,600
70.52
Other Tata Entities
5
74,69,748
17.38
Directors
5
9,39,600
2.19
Employees/Associates/Others
1874
42,60,190
9.91
Total
1885
4,29,70,138
100
11.7 Distribution of Shareholding as on March 31, 2012
Shareholders
Share
Range of Shares
Number
%
Number
%
1 - 100
220
11.67
16,537
0.04
101 - 500
784
41.59
2,17,650
0.51
501 - 1000
493
26.16
3,74,174
0.87
1001 - 5000
296
15.70
7,07,621
1.65
5001 - 10000
47
2.49
3,28,615
0.76
Above 10000
45
2.39
4,13,25,541
96.17
Total
1885
100
4,29,70,138
100
11.8 Frequently asked Questions: Members are requested to refer the detailed FAQ on
general shareholder queries and Dematerialisation given elsewhere in this Report.
ADDRESS FOR CORRESPONDENCE:
The correspondence to be addressed to the Corporate Registered Office at:
Tata Technologies Ltd
Plot No 25, Rajiv Gandhi Infotech Park
Hinjawadi, Pune – 411 057, India.
Tel: +91 20 6652 9090
Fax: + 91 20 6652 9035
Email: corporate@tatatechnologies.com
Website: www.tatatechnologies.com
COMPANY SECRETARY
Anubhav Kapoor
General Counsel and Company Secretary
Tata Technologies Ltd.
Plot No 25, Rajiv Gandhi Infotech Park
Hinjawadi, Pune - 411 057, India
Tel: + 91 20 6652 9090
Fax: + 91 20 6652 9035
Email: anubhav.kapoor@tatatechnologies.com
55
Eighteenth Annual Report 2011-12
Tata Technologies Limited
ANNUAL DECLARATION BY THE CEO ON ADHERENCE TO THE TATA CODE OF CONDUCT
I confirm that Tata Technologies Limited has adopted the Tata Code of Conduct and the same is available on the
Company's website www.tatatechnologies.com.
I also confirm that, all the Directors and the Senior Management Personnel of Tata Technologies Limited have affirmed
compliance to the Tata Code of Conduct, as applicable to them for the Financial Year ended March 31, 2012.
Sd/Patrick McGoldrick
CEO & Managing Director
Date: May 15, 2012
Place: Pune
CEO AND CFO CERTIFICATE
We, Patrick McGoldrick, Chief Executive Officer (CEO) and Samrat Gupta, Chief Financial Officer (CFO) hereby certify
that the financial statements of the Company and its subsidiaries/Joint ventures for the year ended on
March 31, 2012 do not contain any false or misleading statement or figures and do not omit any material fact which
may make the statements or figures contained therein misleading to the best of our knowledge and belief.
Sd/Patrick McGoldrick
CEO & Managing Director
Date: May 8, 2012
Place: Mumbai
56
Sd/Samrat Gupta
Chief Financial Officer
Auditors’ Report
TO THE BOARD OF DIRECTORS OF TATA TECHNOLOGIES LIMITED
1.
We have audited the attached Balance Sheet of TATA TECHNOLOGIES LIMITED (“the Company”) as at March 31,
2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that
date, both annexed thereto. These financial statements are the responsibility of the Company’s Management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting
principles used and the significant estimates made by the Management, as well as evaluating the overall financial
statement presentation.We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of
Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:
(a)
we have obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(b)
in our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books;
(c)
the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report
are in agreement with the books of account;
(d)
in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with
by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e)
in our opinion and to the best of our information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956 in the manner so required and give a
true and fair view in conformity with the accounting principles generally accepted in India:
(i)
in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;
(ii)
in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that
date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that
date.
5.
On the basis of the written representations received from the Directors as on March 31, 2012 taken on record by the
Board of Directors, none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in
terms of Section 274(1)(g) of the Companies Act, 1956.
Hemant M. Joshi
Partner
(Membership No. 38019)
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No. 117366W)
Date: May 8, 2012
Place: Pune
57
Eighteenth Annual Report 2011-12
Tata Technologies Limited
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
(i)
Having regard to the nature of the Company’s business / activities clauses (vi), (viii), (x), (xii), (xiii), (xiv), (xix), (xx) of
CARO are not applicable.
(ii)
In respect of its fixed assets:
(iii)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and
situation of the fixed assets.
(b)
The fixed assets were physically verified during the year by the Management in accordance with a regular
programme of verification which, in our opinion, provides for physical verification of all the fixed assets at
reasonable intervals. According to the information and explanation given to us, no material discrepancies
were noticed on such verification.
(c)
The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of th
fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status
of the Company.
In respect of its inventory:
(a)
As explained to us, the inventories were physically verified during the year by the Management at
reasonable intervals.
(b)
In our opinion and according to the information and explanation given to us, the procedures of physical
verification of inventories followed by the Management were reasonable and adequate in relation to the
size of the Company and the nature of its business.
(c)
In our opinion and according to the information and explanations given to us, the Company has
maintained proper records of its inventories and no material discrepancies were noticed on physical
verification.
(iv)
The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other
parties listed in the Registers maintained under Section 301 of the Companies Act, 1956.
(v)
In our opinion and according to the information and explanations given to us, and having regard to the
explanations that some of the items purchased are of a special nature and suitable alternative sources are not
readily available for obtaining comparable quotations, there is an adequate internal control systems
commensurate with the size of the Company and the nature of its business with regard to purchase of inventory,
fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any
major weakness in such internal control systems.
(vi)
To the best of our knowledge and belief and according to the information and explanations given to us there are
no contracts or arrangements with companies, firms or other parties covered in the register maintained under
section 301 of the Companies Act, 1956.
(vii)
In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature
of its business.
(viii) According to the information and explanations given to us, in respect of statutory dues:
58
(a)
The Company has generally been regular in depositing undisputed dues, including Provident Fund,
Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Cess and other material statutory dues applicable to it with the appropriate
authorities.
(b)
There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Cess and
other material statutory dues in arrears as at March 31, 2012 for a period of more than six months from
the date they became payable.
(c)
Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty and Cess which have not
been deposited as on March 31, 2012 on account of disputes are given below:
Statute
Income Tax Act'1961
Central Sales Tax, 1956
Finance Act, 1994
(Service Tax Provisions)
Nature of
Dues
Income Tax
Sales Tax
Service Tax
Forum where
Dispute
is pending
Period to
which the
amount
relates
Amount
involved
(` in crore)
Commissioner of
Income Tax (Appeals)
2007- 08
0.04
Commissioner of
Income Tax (Appeals)
2008-09
0.04
Deputy Commissioner of
Sales Tax (Appeals)
1997-98
0.03
Deputy Commissioner of
Sales Tax (Appeals)
1998-99
0.45
Deputy Commissioner of
Sales Tax (Appeals)
2003-04
0.003
Joint Commissioner of
Sales Tax (Appeals)
2004-05
21.28
Commissioner (Appeals)
2003-06
0.75
Commissioner (Appeals)
2004-06
0.31
Commissioner (Appeals)
2008-09
2.33
(ix)
In our opinion and according to the information and explanations given to us, the Company has not defaulted in
the repayment of dues to banks and financial institutions.
(x)
In our opinion and according to the information and explanations given to us, the terms and conditions of the
guarantees given by the Company for loans taken by others from banks and financial institutions are not prima
facie prejudicial to the interests of the Company.
(xi)
In our opinion and according to the information and explanations given to us, the term loans have been applied
for the purposes for which they were obtained.
(xii)
In our opinion and according to the information and explanations given to us and on an overall examination of
the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for longterm investment.
(xiii) According to the information and explanations given to us, during the period covered by our audit report, the
Company has not made preferential allotment of equity shares to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xiv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the
Company and no fraud on the Company has been noticed or reported during the year.
Hemant M. Joshi
Partner
(Membership No. 38019)
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No. 117366W)
Date: May 8, 2012
Place: Pune
59
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Balance Sheet as at March 31, 2012
(Amount in ` Crore)
Particulars
Note No
March 31, 2012
March 31, 2011
3
4
42.97
588.56
631.53
37.32
403.55
440.87
5
6
0.62
3.75
0.35
7.08
0.24
12.04
0.84
6.17
0.93
7.94
55.96
91.91
8.46
35.72
192.05
48.45
79.02
6.92
22.76
157.15
835.62
605.96
61.01
33.26
1.54
3.49
99.30
266.23
4.45
16.05
46.30
24.28
1.32
71.90
223.23
2.18
1.01
23.79
386.03
322.11
147.07
91.31
114.96
47.08
49.17
449.59
96.09
62.22
110.88
7.52
7.14
283.85
835.62
605.96
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital
(b) Reserves and Surplus
(2) Non-current Liabilities
(a) Long-term Borrowings
(b) Deferred Tax Liabilities (Net)
(c) Trade Payables
(d) Long-term Provisions
(e) Income tax liabilities (Net)
7
(3) Current Liabilities
(a) Short-term Borrowings from Banks (Unsecured)
(b) Trade Payables
(Refer Note 19 (vi))
(c) Other Current Liabilities
(d) Short-term Provisions
8
9
II. ASSETS
(1) Non-current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-progress
(iv) Intangible Assets in progress
10
11
(b) Non-current Investments
(c) Deferred tax Assets (Net)
(d) Long-term loans and advances
(e) Income tax assets (Net)
12
6
13
(2) Current Assets
(a) Current Investments
(b) Trade Receivables
(c) Cash and Bank Balances
(d) Other Current Assets
(e) Short-term loans and advances
14
15
16
17
18
Significant Accounting Policies
Accompanying Notes to the Financial Statements
2
19
For and on behalf of the Board
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
S Ramadorai
Chairman
P R McGoldrick
Managing Director
R Gopalakrishnan
Director
Samrat Gupta
Chief Financial Officer
Hemant M. Joshi
Partner
P P Kadle
Director
Anubhav Kapoor
Company Secretary
Date: May 8, 2012
Place: Pune
C Ramakrishnan
Director
Date: May 8, 2012
Place: Mumbai
60
Statement of Profit and Loss for the year ended March 31, 2012
(Amount in ` Crore)
Particulars
Note No
March 31, 2012
March 31, 2011
493.16
I.
Revenue from Operations
A
644.00
II.
Other Income
B
24.26
11.58
668.26
504.74
III. Total Revenue (I + II)
IV. Expenses :
64.70
56.41
(b) Consultancy fees, Softwares and others
(a) Cost of Traded Products
C
54.47
47.06
(c) Employee Benefit Expense
D
298.75
222.02
(d) Finance Cost
(e) Depreciation and amortisation Expense
E
1.54
1.69
10 & 11
21.16
14.76
(f ) Other Expenses
V.
51.16
35.69
Total Expenses
F
491.78
377.63
Profit Before Exceptional Items and Tax (III - IV)
176.48
127.11
176.48
127.11
VI. Profit Before Tax
VII. Tax Expense :
(a) Current Tax
39.83
38.00
(b) Earlier Year
-
(4.12)
(c) Deferred Tax
VIII. Profit after Tax (VI- VII)
5.94
(3.82)
45.77
30.06
130.71
97.05
IX. Earnings Per Equity Share : [Refer Note 19(i)]
(a) Basic
30.91
26.04
(b) Diluted
30.83
25.93
Significant Accounting Policies
2
Accompanying Notes to the Financial Statements
19
For and on behalf of the Board
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
S Ramadorai
Chairman
P R McGoldrick
Managing Director
R Gopalakrishnan
Director
Samrat Gupta
Chief Financial Officer
Hemant M. Joshi
Partner
P P Kadle
Director
Anubhav Kapoor
Company Secretary
Date: May 8, 2012
Place: Pune
C Ramakrishnan
Director
Date: May 8, 2012
Place: Mumbai
61
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Cash Flow Statement
Year ended
March 31, 2012
Cash Flow Statement for the
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit after Taxation
Depreciation and amortization
Disallowance of TDS Abroad
Provision for Wealth Taxes
Provision for Income Tax
Provision for Deferred Tax
Dividend Income on Investment in mutual funds
(Profit)/Loss on sale of Investment
(Profit)/Loss on Sale of Tangible and Intangible Fixed Assets
Interest Income
Finance Costs
Unrealised exchange Loss / (Gain)
Effect of exchange differences on translation of foreign currency cash & cash equivalent
Allowances for doubtful debts
Operating profit before Working Capital Changes
Adjustments for (Increase) / Decrease in Operating Assets and Liabilities
Trade Receivables
Other Current Assets
Short term loans and advances
Long Term Loans and advances
Trade Payables
Other Current Liabilities
Short Term Provision
Long Term Provision
CASH GENERATED FROM OPERATIONS
Income Taxes paid (net)
NET CASH FLOW GENERATED FROM OPERATING ACTIVITIES
CASH FLOW FROM INVESTING ACTIVITIES
(Payment) /Refund of Loan to/from Subsidiary
Dividend Received
Income from sale of Investment
Interest Received Bank Deposit and others
Investment in Joint Venture
Inter Corporate Deposits Placed
Inter Corporate Deposits Refunded
Loans to others
Deposits with Financial Companies
Investment in Long Term Bonds
Inter Corporate Deposits Taken
Inter Corporate Deposits Repaid
Interest received from Intercorporate Deposit
Purchase of Mutual Fund
Sale of Mutual funds
Fixed Deposit with banks (net) having maturity over three months
Proceeds from sale of Tangible and Intangible Fixed Assets
Payment for Purchase of Tangible and Intangible Fixed Assets
NET CASH FLOW (USED IN)/GENERATED FROM INVESTING ACTIVITIES
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of shares including Premium
Interest Paid
Dividends Paid (including Dividend Tax)
Proceeds from Short Term borrowings
Repayment of Short Term borrowings
Proceeds from Long Term borrowing
Repayment of Long Term borrowings
NET CASH FLOW (USED IN)/GENERATED FROM FINANCING ACTIVITIES
(Amount in ` Crore)
Year ended
March 31, 2011
130.71
21.16
0.08
0.01
39.83
5.94
(16.47)
0.01
(0.01)
(6.66)
1.54
1.06
(0.51)
0.09
176.78
97.05
14.76
0.01
0.01
38.00
(3.82)
(1.15)
(0.02)
(9.38)
1.69
1.14
(1.73)
0.04
136.60
(27.32)
(41.16)
(2.03)
(1.22)
12.51
1.27
0.22
0.91
119.96
(32.87)
(5.67)
0.92
2.77
0.10
28.78
(27.78)
0.28
136.00
(28.89)
87.09
107.11
16.47
(0.01)
3.23
(489.40)
459.40
(2.22)
(10.00)
(5.00)
3.00
(3.00)
2.31
(1,953.28)
1,864.30
(0.15)
0.11
(48.05)
(162.29)
6.52
1.15
3.33
(1.59)
(271.00)
326.00
5.53
(367.83)
315.85
0.04
0.19
(7.70)
10.49
141.27
(1.53)
(65.72)
102.34
(97.64)
0.37
(0.47)
78.62
0.57
(1.68)
(60.54)
84.58
(73.97)
1.31
(0.48)
(50.21)
3.42
67.39
114.96
0.39
110.88
0.24
(0.51)
3.42
110.88
0.24
41.80
0.28
(1.73)
67.39
0.03
0.88
31.02
82.00
0.02
23.44
56.56
30.00
0.64
0.39
114.96
0.49
0.37
110.88
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS
Cash & Bank Balances at the close of the year as per (Refer Note 16) #
Less: Bank Deposits with original maturity over three months for the year
Cash & Bank Balances at the beginning of the year as per (Refer Note 16)
Less: Bank Deposits with original maturity over three months for the previous year
Effect of exchange rate changes on cash and cash equivalents
# Cash & Bank Balances Comprises :
a) Cash and Cash Equivalents
Cash on hand
Cheques, drafts on hand
Current Account with banks
Bank Deposits less than 3 months maturity
b) Other Bank Balances
Earmarked balance with banks
Pledged/lien with Banks
For and on behalf of the Board
S Ramadorai
Chairman
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
R Gopalakrishnan
Director
P P Kadle
Director
Hemant M. Joshi
Partner
Date: May 8, 2012
Place: Pune
62
C Ramakrishnan
Director
Date: May 8, 2012
Place: Mumbai
P R McGoldrick
Managing Director
Samrat Gupta
Chief Financial Officer
Anubhav Kapoor
Company Secretary
Notes forming part of financial statements
Note 1
Company Overview
TATA Technologies Limited ("TTL or the Company") was incorporated on August 22, 1994 as a Private Limited company
in the name of Core Software Systems Private Limited. The name of the Company was subsequently changed to Tata
Technologies (India) Limited. On February 8, 2001, the Company changed its name from Tata Technologies (India)
Limited to Tata Technologies Limited. The Company's range of services includes IT Consultancy, SAP implementation
and maintenance, providing networking solutions, CAD/CAM engineering & design consultancy. The Company is
headquartered in Pune, India. The Company has five branches located at Mumbai, Lucknow, Jamshedpur, Bangalore
and Chennai that enables it to provide high quality, cost-effective services to clients in India.
Note 2
Significant Accounting Policies
a.
Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention, in accordance with Indian
Generally Accepted Accounting Principles (GAAP). GAAP comprises the mandatory accounting
standards notified under the Companies (Accounting Standards Rules, 2006). Accounting policies have
been consistently applied except where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
b.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the management of the
Company (Management) to make estimates and assumptions that affect the reported amounts of
revenue and expenses during the period / year and balances of assets and liabilities and disclosures
relating to contingent liabilities as at the date of financial statements. Provisions are made for all known
losses and liabilities, future unforeseeable factors that may affect the profit on fixed price service
contracts and also towards likely expenses for providing post-sales client support on such contracts.
c.
Revenue Recognition
Revenue from services on time and materials contracts is recognized when services are rendered and
related costs are incurred i.e. based on certification of time sheets and billed to clients as per the terms of
specific contracts. In case of fixed price contracts, revenue is recognized over the life of the contract based
on milestones achieved as specified in the contracts or by proportionate completion method on the basis
of the work completed. Foreseeable losses on such contracts are recognized when probable.
Revenue from rendering Annual Maintenance Services (SAP-ERP) is recognized proportionately over the
period of contract. Revenue from third party software products and hardware sale is recognized upon
delivery. Income from interest and rent is recognized on time proportion basis. Dividend from
investments is recognized when the right to receive the payment is established and when no significant
uncertainty as to measurability or collectability exists. Commission Income on sale of PLM products is
recognized upon delivery of products by the vendor to the end user.
d.
Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation. Costs include all expenses incurred to
bring the assets to its present location and condition. Direct costs are capitalized till the assets are ready
for use and include financing costs relating to any borrowing attributable to the acquisition of qualifying
fixed assets. Software not exceeding Rs. 25,000 is charged off to the profit and loss account.
e.
Depreciation
Depreciation on Fixed Assets is provided on Straight Line Method (SLM) at the rates specified in the
schedule XIV to the Companies Act, 1956, except as follows:
Type of Asset
Leasehold Land
Leasehold Improvements
Buildings
Plant and Machinery
Computer Equipments
Vehicles
Software Licenses
Depreciation Percentage
Lease Period
Lease Period
4% to 6.67%
4.75% to 20%
25% to 50%
9.5% to 33.33%
License Period
25% to 50%
63
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Depreciation on additions to Fixed Assets is provided from the month of acquisition of the Asset.
Depreciation on Assets sold / scraped during the period is provided for prior to the month of sale / scrap
as the case may be.
The Company charges 100% depreciation on assets individually costing less than Rs. 5000 in the year of
purchase.
f.
Leases
Assets leased by the Company in its capacity as lessee, where the Company has substantially all the risks
and rewards of ownership are classified as finance lease. Such lease are capitalised at the inception of the
lease at lower of the fair value or the present value of the minimum lease payments and a liability is
created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest
cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest
with the lessor, are recognized as operating lease. Lease payments under operating leases are recognized
in the Profit & Loss account on a straight line basis.
g.
Foreign Currency transactions
Income and expenses in foreign currencies are recorded at the exchange rates prevailing on the date of
the transaction.
Monetary current assets and current liabilities are reinstated at period-end exchange rates and the
profit / loss so determined and also the realized exchange gains / losses are recognized in the Profit & Loss
Account.
Premium or discount on forward contracts is amortised over the life of such contract and is recognized as
income or expense in the profit and Loss Account.
h.
Investments
Investments are classified into current investments & long term investments.
Current investments are carried at lower of cost and market value. Any reduction in carrying amount and
reversals of such reductions are charged or credited to the Profit & Loss account.
Long term investments are stated at cost less provision for diminution in the value of such investments.
Diminution in value is provided for where the management is of the opinion that the diminution is other
than temporary in nature.
I.
Impairment of Assets
At each balance sheet date, the Company reviews using internal resources the carrying amounts of its
fixed assets to determine whether there is any indication that the assets suffered an impairment loss. If
any such condition exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in
use. In assessing value in use, the estimated future cash flows expected from continuing use of the asset
and from its disposal are discounted to their present value using a pre tax rate that reflects the current
market assessments of time value of money and the risks specific to the asset.
Reversal of impairment loss is recognized immediately as income in the profit & loss account.
j.
Inventories
Inventories are valued at lower of cost or net realizable value. Cost is ascertained on a moving weighted
average basis.
k.
Employee Benefits
i.
Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump sum payment to vested employees at retirement,
death while in employment or on termination of employment of an amount equivalent to 15 to 30
days salary payable for each completed year of service.Vesting occurs upon completion of five years
of service. The Company makes annual contributions to gratuity fund established as trust. The
Company accounts for the liability for gratuity benefits payable in future based on an independent
actuarial valuation as on the Balance Sheet date.
ii.
64
Superannuation
The Company has two superannuation plans, a defined benefit plan and a defined contribution
plan. An eligible employee on April 1, 1996 could elect to be member of either plan. Employees who
are the members of the defined benefit superannuation plan are entitled to benefits depending on
the years of service and salary drawn. The monthly pension benefits after retirement range from
0.75% to 2% of the annual basic salary for each year of service. The Company account for
superannuation benefits payable in future under the plan based on an independent actuarial
valuation as on the Balance Sheet date.
With effect from April 1, 2003, this plan was amended and benefits earned by covered employees
have been protected as at March 31, 2003. Employees covered by this plan are prospectively entitled
to benefits computed on a basis that ensures that the annual cost of providing the pension benefits
would not exceed 15% of salary.
The Company maintains separate irrevocable trusts for employees covered and entitled to benefits.
The Company contributes up to 15% of the eligible employees’ salary to the trust every year. Such
contributions are recognized as an expense when incurred. The Company has no further obligation
beyond this contribution.
l.
iii.
Bhavishya Kalyan Yojana (BKY)
Bhavishya Kalyan Yojana is an unfunded defined benefit plan. The benefits of the plan accrue to an
eligible employee at the time of death or permanent disablement, while in service, either as a result
of an injury or as certified by the appropriate authority. The monthly payment to dependents of the
deceased /disabled employee under the plan equals 50% of the salary drawn at the time of death or
accident or a specified amount, whichever is higher. The Company accounts for the liability for BKY
benefits payable in future based on an independent actuarial valuation as on the Balance Sheet
date.
iv.
Post-retirement Medicare Scheme
Under this Scheme employees get medical benefits subject to certain limits of amount, periods
after retirement and types of benefits, depending on their grade and location at the time of
retirement. The Company account for the liability for post-retirement medical scheme based on an
independent actuarial valuation as on the Balance Sheet date.
v.
Provident Fund
The eligible employees of the Company are entitled to receive benefits under the provident fund, a
defined contribution plan, in which both employees and the company make monthly contributions
at a specified percentage of the covered employees’ salary (currently 12% of employees’ salary). The
provident fund contributions, as specified under the law, are paid to the provident fund set up as
irrevocable trust by the Company and pension amount is paid to Regional Provident Fund
Commissioner and the Central Provident Fund under the State Pension Scheme. The contributions
paid during the year are charged to Profit and Loss account.
vi.
Compensated absences
The Company provides for the encashment of leave or leave with pay subject to certain rules. The
employees are entitled to accumulate leave subject to certain limits, for future encashment. The
liability is provided based on number of days of unutilized leave at each balance sheet date on the
basis of an independent actuarial valuation as on the Balance Sheet date.
Taxation
Current income tax expense comprises taxes on income from operations in India and foreign tax
jurisdictions. Current Income tax payable in India is determined in accordance with the provisions of
Income Tax Act, 1961 and current income tax expense relating to overseas operations is determined
in accordance with tax laws applicable in countries where such operations are domiciled.
Deferred tax expense or benefit is recognized on timing differences being the difference between
taxable income and accounting income that originate in one period and are capable of reversal in one or
more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and the tax
laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized
only to the extent that there is virtual certainty that taxable income will be available to realize these
assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty
that future taxable income will be available to realize such assets.
m.
Employee Stock Options
In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme
Guidelines, 1999 issued by Securities and Exchange Board of India (SEBI), the Company introduced
Employee Stock Option Plan 2001 (TTESOP 2001) in 2000-01. As per the Plan, the options were granted at
fair value as determined by an independent valuer as on the date of the grant and hence no
compensation cost has been recognized.
n.
Cash flow statement
Cash flows are reported using indirect method, whereby net profits after tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, investing and financing activities of the
Company are segregated.
65
Eighteenth Annual Report 2011-12
Tata Technologies Limited
o.
Earnings per share
The earnings considered in ascertaining the Company's earnings per share comprise the net profit after
tax and include the post-tax effect of any extra-ordinary items. The number of shares used in computing
basic earnings per share, is the weighted average number of shares outstanding during the period. The
number of shares used in computing diluted earnings per share comprises the shares considered for
deriving basic earnings per share and also number of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
p.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of that asset. Borrowing costs are capitalized as part of
the cost of a qualifying asset when it is probable that they will result in future economic benefits to the
enterprise and the costs can be measured reliably. Other borrowing costs are recognized as an expense in
the period in which they are incurred.
q.
Provisions, contingent liabilities and contingent assets
A provision is recognized when the Company has a present obligation as a result of past event and its
probable that an outflow of resources will be required to settle the obligation, in respect of which reliable
estimate can be made. The provisions (excluding retirement benefits) are not discounted to its present
value and are determined based on best estimate required to settle the obligation at the balance sheet
date. These are reviewed at each balance sheet date and adjusted to reflect current best estimates.
Contingent liabilities are not recognized in the financial statements. A contingent asset is neither
recognized nor disclosed in the financial statements.
r.
Financial Assets / Financial Liabilities :
Financial Assets:
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i) to receive cash or another financial asset from another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that
are potentially favourable to the entity; or
(d) a contract that will or may be settled in the entity's own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the
entity's own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash
or another financial asset for a fixed number of the entity's own equity instruments. For this
purpose the entity's own equity instruments do not include instruments that are themselves
contracts for the future receipt or delivery of the entity's own equity instruments.
asset for a fixed number of the entity's own equity instruments. For this purpose the entity's
own equity instruments do not include instruments that are themselves contracts for the
future receipt or delivery of the entity's own equity instruments.
Financial Liabilities :
(a) a contractual obligation:
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that
are potentially unfavourable to the entity; or
(b) a contract that will or may be settled in the entity's own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the
entity's own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash
or another financial asset for a fixed number of the entity's own equity instruments. For this
purpose the entity's own equity instruments do not include instruments that are themselves
contracts for the future receipt or delivery of the entity's own equity instruments.
66
Notes forming part of financial statements
NOTE -3
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
60.00
60.00
0.70
0.70
60.70
60.70
42.97
37.32
42.97
37.32
SHARE CAPITAL
Authorised :
60,000,000 equity shares of Rs. 10/- each
(P.Y. 60,000,000 equity shares of Rs. 10/- each)
700,000 0.01% Cumulative Non-participative Compulsorily
convertible Preference Shares of Rs. 10/- each
(P.Y. 700,000 0.01% Cumulative Non-participative Compulsorily
convertible Preference Shares of Rs. 10/- each)
Issued, subscribed and fully paid :
42,970,138 equity shares of Rs. 10/- each
(P.Y. 37,315,255 ordinary shares of Rs. 10/- each)
Note 3(i) Reconciliation of number of shares outstanding :
As at Mar 31, 2012
Particulars
As at Mar 31, 2011
No. of Shares
Amount in
` crore
No. of Shares
Amount in
` crore
37,315,255
35,125
5,619,758
42,970,138
37.32
0.04
5.61
42.97
37,244,591
70,664
37,315,255
37.24
0.08
37.32
Equity shares
Number of shares as at April 1, 2011
Add: Shares issued under ESOP scheme
Add: Issued under preferencial allotment
Number of shares as at March 31, 2012
Note 3(ii) Shares in the Company held by each shareholder holding more than 5 percent shares
As at Mar 31, 2012
Particulars
As at Mar 31, 2011
No. of Shares
%
Holding
No. of Shares
%
Holding
30,300,600
3,746,505
34,047,105
70.52
8.72
79.24
30,300,600
30,300,600
81.20
81.20
Equity Shares
(a)
(b)
Tata Motors Limited
Alpha TC Holdings Pte Ltd.
67
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of financial statements
Note 3(iii) Of the above 30,300,600 shares (P.Y. 30,300,600 shares) equity shares are held by holding
company (Tata Motors Limited)
Note 3(iv) 114,671 shares (as at Mar 31, 2012) of Rs.10 each were outstanding towards employee stock
options granted/available for grant
Note 3(v)
Number of options granted, Exercised and forfeited
2011-12
Options granted, beginning of the year
Granted during the year
Exercised during the year
Cash less options exercised during the year
Forfeited during the year
Option granted, end of year
2010-11
108,539
(35,125)
(4,463)
68,951
180,803
(70,664)
(1,600)
108,539
Note 4
RESERVES AND SURPLUS
(Amount in ` Crore)
Particulars
(a)
Securities Premium Account
i) Securities Premium Account [Note 4 (i)& (iv)]
ii) Securities Premium identified separately
for consolidation
[Note 4 (i)& (iv)]
(b)
General Reserve
(c)
Surplus i.e. balance in statement of
Profit and Loss
[Note 4 (iii)]
As at
Mar 31,
2011
Additions
Deductions
As at
Mar 31,
2012
216.37
136.38
2.73
350.02
23.91
-
0.75
23.16
34.65
14.00
-
48.65
128.62
130.71
92.60
166.73
403.55
281.09
96.08
588.56
Note 4(i) Changes in Securities Premium Account
(Amount in ` Crore)
2011-12
2010-11
Particulars
Additions
(a)
(b)
(c)
68
Additions during current year
Expenses for issuance of new shares
Capital Reduction adjustments during
the year
(Refer Note 4 (iv))
Deductions
Additions
Deductions
135.62
-
2.73
0.50
-
-
0.76
136.38
2.73
6.90
7.40
-
Notes forming part of financial statements
Note 4(ii) Changes in Securities Premium identified seperately for consolidation
(Amount in ` Crore)
2011-12
2010-11
Particulars
Additions
Capital Reduction adjustments during
the year (Refer Note 4 (iv))
Deductions
Additions
Deductions
0.75
0.75
-
5.43
5.43
-
Note 4(iii) Changes in Statement of Profit and Loss :
(Amount in ` Crore)
2011-12
2010-11
Particulars
(a)
(b)
(c)
(d)
(e)
(f )
Profit for the year
Final Dividend
Interim Dividend
Tax on Final Dividend
Tax on Interim Dividend
General Reserve
Additions
Deductions
Additions
Deductions
130.71
130.71
29.60
38.03
4.80
6.17
14.00
92.60
97.05
97.05
18.64
26.09
3.02
4.33
10.00
62.08
Note 4(iv)
During the prior year, based on the approval of Shareholders of the Company at the Extra-Ordinary General Meeting
held on March 5, 2010 and on the basis of Order of the High Court of Judicature at Mumbai vide its order dated April 16,
2010, the Company had utilized balance in the securities premium account to the tune of Rs. 46.66 Crore towards one
time charges/cost (including change in accounting policy for provision for doubtful debts) incurred by the Company
and its subsidiary companies. The amounts relating to the Company amounting to Rs.17.31 crores had been adjusted
to the Securities Premium Account. An amount of Rs.29.34 crores equivalent to the total amount of adjustments
relating to the subsidiaries had been identified and segregated from the balance in the Securities Premium Account
for adjustment on consolidation. Of this total adjustment made, Rs.1.58 crores and Rs.16.58 crores related to provision
for doubtful debts of the Company and its subsidiary companies respectively on account of change in accounting with
regard to provision for doubtful debts. During the year ended March 31, 2012, the Company and its subsidiary
companies have received amounts aggregating to Rs. 0.01 Crore (Rs. 1.47 Crore for the year ended March 31, 2011) and
Rs. 0.75 Crore (Rs. 5.43 Crore for the year ended March 31, 2011) respectively against the balances for which the
provision were made on account of change in accounting policy. Consequently, such excess provisions for doubtful
debts on account of the said collections have been written back to the securities premium account.
69
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of financial statements
Note 5
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
LONG TERM BORROWINGS
(A)
Secured
a) Banks
(i)
Vehicle Loans [Secured by hypothecation of vehicles] ##
b) Others
(i)
Vehicle Loans [Secured by hypothecation of vehicles] ##
(ii) Long term maturity of finance lease obligations
# (Refer Note 5 (I)) (Secured against fixed assets obtained
under finance arrangements)
Notes: #
##
0.32
0.42
0.09
0.21
0.14
0.28
0.62
0.84
Terms of repayment - Equated Quarterly Instalment
Terms of repayment - Equated Monthly Instalment
Note 5(i) Long term maturity of finance lease obligations
(Amount in ` Crore)
Particulars
Total of Minimum lease payments
Not later than one year
Later than one year and not later than five years
Less: Interest
Present Value of Minimum lease payments
Not later than one year
Later than one year and not later than five years
The company has entered into finance lease arrangements for servers
70
As at
Mar 31, 2012
As at
Mar 31, 2011
0.10
0.23
0.33
0.10
0.33
0.43
0.05
0.28
0.09
0.34
0.07
0.21
0.28
0.06
0.28
0.34
Notes forming part of financial statements
Note 6
(Amount in `Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
8.34
8.34
7.86
7.86
2.95
0.41
1.23
4.59
(3.75)
8.04
0.38
1.62
10.04
2.18
DEFERRED TAX ASSET / (LIABILITIES) (NET)
Deferred tax liabilities:
Depreciation
Sub Total
Deferred tax assets:
Provision for expenses u/s. 43B
Provision for doubtful debts
Others
Sub Total
Deferred Tax Asset /(Liability) Net
Note 7
(Amount in `Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
7.08
7.08
6.17
6.17
LONG - TERM PROVISIONS
(a) Provision for employee benefits (Refer Note 7 (i) & 7 (ii))
71
72
Actual Contribution and Benefit Payments
for year ended 31 March 2012
ii
Discount Rate
Expected Return on plan assets
Salary escalation
Medical cost inflation
Actuarial Assumptions
Plan assets at beginning of year
Actual return on plan assets
Actual Company contributions
Benefits paid
Plan assets at the end of year
Change in Fair Value of Assets during the year
ended March 31, 2012
DBO as at 31 March
Service cost for the year
Interest cost for the year
viii Effect of one percentage point change in
assumed Medical inflation rate
Debt securities
Balances with banks
vii The major categories of plan assets as
percentage of total plan assets
vi
v
Change in Defined Benefit Obligations (DBO)
during the year ended March 31, 2012
iv
Present Value of DBO at beginning of year
Current Service cost
Interest cost
Actuarial (gains)/ losses
Benefits paid
Present Value of DBO at the end of year
Net asset/(liability) recognised in balance sheet
as at March 31, 2012
Present Value of Defined Benefit Obligation
Fair value of plan assets
Net asset/(liability) recognised in balance sheet
iii
Actual benefit payments
Actual Contributions
Components of employer expense
Current Service cost
Interest cost
Expected return on plan assets
Actuarial Losses/(Gains)
Total expense / (income) recognised
in the Statement of Profit & Loss Account
i
8.50%
8.00%
2%-5%
N/A
12.24
1.68
(2.52)
11.40
12.12
1.34
0.92
2.51
(2.52)
14.37
14.37
11.40
(2.97)
74.00% 100.00%
26.00%
0.00%
8.50%
8.00%
5%
N/A
11.39
0.47
9.91
(1.39)
20.38
14.37
2.25
1.16
2.05
(1.39)
18.44
18.44
20.38
1.94
2.52
-
3.09
5.00
1.39
9.91
1.34
0.92
(0.88)
1.71
2011
2.25
1.16
(1.25)
2.84
2012
12.12
12.24
0.12
1.13
-
1.09
1.16
0.89
(0.94)
(0.02)
2010
99.73%
0.27%
8.50%
8.00%
2%-5%
N/A
12.27
1.10
(1.13)
12.24
11.06
1.16
0.89
0.14
(1.13)
12.12
Gratuity
100%
0%
8.50%
8.00%
3%-5%
N/A
12.61
0.79
(1.13)
12.27
11.08
1.14
0.89
(0.92)
(1.13)
11.06
11.06
12.27
1.21
1.13
-
0.32
1.14
0.89
(0.96)
(0.75)
2009
100.00%
0.00%
6.75%
8.00%
N/A
N/A
5.06
(0.25)
0.24
5.05
5.17
0.24
0.35
(0.15)
5.61
5.61
5.05
(0.56)
0.24
0.69
0.24
0.35
(0.41)
0.51
2012
6.75%
8.00%
N/A
N/A
4.77
0.43
0.28
(0.02)
5.47
4.87
0.26
0.33
(0.12)
(0.02)
5.32
5.32
5.47
0.15
0.02
0.28
0.04
0.26
0.33
(0.39)
(0.16)
2010
100.00% 99.16%
0.00% 0.84%
6.75%
8.00%
N/A
N/A
5.47
0.21
0.20
(0.82)
5.06
5.31
0.20
0.33
0.15
(0.82)
5.17
5.17
5.06
(0.11)
0.82
0.20
0.47
0.20
0.33
(0.41)
0.35
2011
Superannuation
100%
0%
6.75%
8.00%
N/A
N/A
4.50
0.22
0.31
(0.26)
4.77
4.36
0.27
0.33
0.17
(0.26)
4.87
4.87
4.77
(0.10)
0.26
0.31
0.54
0.27
0.33
(0.36)
0.30
2009
N/A
N/A
8.50%
N/A
5%
N/A
N/A
N/A
1.42
(1.42)
-
4.14
0.88
0.29
1.03
(1.42)
4.92
4.92
(4.92)
1.42
1.42
2.22
0.88
0.29
1.05
2012
Note 7 (i) : Defined benefits plans / long term compensated absences – as per actuarial valuations as on March 31, 2012
N/A
N/A
8.50%
N/A
2%-5%
N/A
N/A
N/A
1.87
(1.87)
-
4.21
0.60
0.28
0.94
(1.89)
4.14
4.14
(4.14)
1.89
1.87
1.82
0.60
0.28
0.94
2011
N/A
N/A
8.50%
N/A
2%-5%
N/A
N/A
N/A
1.55
(1.55)
-
4.93
0.64
0.35
(0.17)
(1.54)
4.21
4.21
(4.21)
1.54
1.55
0.82
0.64
0.35
(0.17)
2010
N/A
N/A
1.57
(1.57)
-
4.71
0.21
0.33
1.25
(1.57)
4.93
4.93
(4.93)
1.57
N/A
1.79
0.21
0.33
1.25
2009
N/A
N/A
8.50%
N/A
3%-5%
N/A
Compensated absences
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.09
(0.09)
-
2.04
0.19
0.17
(0.31)
(0.08)
2.01
2.01
(2.01)
0.08
0.09
0.05
0.19
0.17
(0.31)
2011
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.04
(0.04)
-
1.42
0.17
0.12
0.37
(0.04)
2.04
2.04
(2.04)
0.04
0.04
0.66
0.17
0.12
0.37
2010
2012
2.02
0.08
0.16
2011
0.30
0.21
0.18
2010
2.17
0.17
0.13
One percentage point increase
in Medical inflation rate
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.11
(0.11)
-
2.01
0.08
0.17
(0.17)
(0.12)
1.97
1.97
(1.97)
0.12
0.11
0.08
0.08
0.17
(0.17)
2012
2009
1.50
0.30
0.20
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.03
(0.03)
-
1.96
0.28
0.17
(0.95)
(0.04)
1.42
1.42
(1.42)
0.04
0.03
(0.50)
0.28
0.17
(0.95)
2009
Post-retirement Medicare scheme
N/A
N/A
8.5%
N/A
2%-5%
N/A
N/A
N/A
0.07
(0.07)
-
0.74
0.09
0.06
0.28
(0.06)
1.11
1.11
(1.11)
0.06
0.07
0.43
0.09
0.06
0.28
2011
N/A
N/A
8.5%
N/A
2%-5%
N/A
N/A
N/A
0.05
(0.05)
-
0.72
0.10
0.06
(0.08)
(0.06)
0.74
0.74
(0.74)
0.06
0.05
0.08
0.10
0.06
(0.08)
2010
N/A
N/A
8.5%
N/A
3%-5%
N/A
N/A
N/A
0.05
(0.05)
-
1.51
0.09
0.13
(0.96)
(0.06)
0.73
0.73
(0.73)
0.06
0.05
(0.74)
0.09
0.13
(0.96)
2009
2012
1.93
0.07
0.16
2011
0.28
0.18
0.16
2010
1.93
0.16
0.11
2009
1.35
0.27
0.15
One percentage point
decrease in Medical inflation rate
N/A
N/A
8.5%
N/A
5%
N/A
N/A
N/A
0.07
(0.07)
-
1.11
0.16
0.09
0.21
(0.07)
1.50
1.50
(1.50)
0.07
0.07
0.46
0.16
0.09
0.21
2012
(Amount in `Crore)
BKY
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of financial statements
Note 7 (ii) :
Defined contribution plans :
The Company’s contribution to defined contribution plan aggregated Rs. 13.15 crores (2010-11 Rs. 10.73 crores)
for the year ended March 31, 2012 has been recognised in the statement of Profit and Loss Account.
Notes :
(a) The expected rate of return on plan assets is based on market expectation, at the beginning of the year,
for returns over the entire life of the related obligation.
(b) The assumption of future salary increases, considered in actuarial valuation, takes into account of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.
(c) Also refer note 2 (k) for brief description of employee benefit schemes.
Note 8
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
0.03
0.43
0.07
0.63
1.16
0.02
0.32
0.06
0.49
0.89
5.57
1.73
7.30
8.46
5.62
0.41
6.03
6.92
OTHER CURRENT LIABILITIES
(A)
(B)
Financials
(a) Interest accrued but not due on borrowings
(b) Current maturities of long term debt
(c) Current maturities of finance lease obligations (Refer note 5(i))
(d) Unpaid dividends
Non Financials
(a) Statutory dues
(b) Advance and Progress payments
Note 9
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
1.32
29.60
4.80
35.72
1.10
18.64
3.02
22.76
SHORT-TERM PROVISIONS
(a) Provision for Employee benefits (Refer Note 7 (i) & 7(ii))
(b) Provision for Final Dividend
(c) Provision for Tax on Dividend
73
74
Plant & Machinery and Equipments - Leased
Office Equipments
Computers
Furniture and fixtures
Vehicles (Refer Note 11 (i))
Leasehold Improvements
(d)
(e)
(f)
(g)
(h)
(I)
-
2.41
6.34
39.02
1.99
0.35
14.81
10.65
23.51
4.55
0.94
1.16
14.35
0.82
0.08
1.57
0.04
-
Additions
4.21
3.69
-
0.55
0.02
3.10
0.01
-
0.01
-
-
Deductions
91.76
111.58
4.55
2.80
7.48
50.27
2.80
0.43
16.37
22.79
4.09
Cost as at
Mar 31, 2012
43.99
45.47
-
0.82
2.34
31.43
0.63
0.12
4.02
5.66
0.45
Accumulated
depreciation /
amortisation
up to
Apr 1, 2011
5.52
8.69
0.34
0.68
0.54
5.11
0.14
0.02
0.87
0.95
0.04
Depreciation /
Amortisation
for the year
ended
Mar 31, 2012
4.04
3.59
-
0.46
0.02
3.10
0.01
-
-
-
-
Deductions
45.47
50.57
0.34
1.04
2.86
33.44
0.76
0.14
4.89
6.61
0.49
Accumulated
depreciation /
amortisation
up to
Mar 31, 2012
46.30
61.01
4.21
1.76
4.62
16.83
2.04
0.29
11.48
16.18
3.60
Net Book
Value
as at
Mar 31, 2012
46.30
-
1.59
4.00
7.59
1.37
0.23
10.79
17.09
3.64
Net Book
Value
as at
Mar 31, 2011
(Amount in ` Crore)
Note 10 (ii) Capital Commitment : The estimated amount of contracts remaining to be executed on capital account, and not provided for is Rs. 4.58 crores as at
March 31, 2012 (Year ended March 31, 2011 : Rs. 6.42 Crore).
Note 10 (i) Vehicles includes gross Rs.1.64 Crore (W.D.V. Rs. 1.00 Crore)acquired on loan, hypothecated with Tata Finance Ltd, Tata Motors Finance Limited, ICICI Bank
Ltd, and TATA Capital Ltd (as at March 31, 2011 Rs.1.51 Crore) (W.D.V Rs. 1.04 Crore))
85.33
Plant & Machinery and Equipments - Owned
(c)
22.75
Previous Year
Buildings
(b)
4.09
91.76
Leasehold Land
(a)
Cost as at
Apr 1, 2011
Total
TANGIBLE ASSETS
FIXED ASSETS
[A]
Note 10
Notes forming part of financial statements
Eighteenth Annual Report 2011-12
Tata Technologies Limited
75
44.29
38.08
Software Licenses
Total
Previous Year
(a)
6.21
21.45
21.45
Additions
-
-
-
Deductions
44.29
65.74
65.74
Cost as at
Mar 31, 2012
10.77
20.01
20.01
Accumulated
depreciation /
amortisation
up to
Apr 1, 2011
9.24
12.47
12.47
Depreciation /
Amortisation
for the year
ended
Mar 31, 2012
-
-
-
Deductions
20.01
32.48
32.48
Accumulated
depreciation /
amortisation
up to
Mar 31, 2012
24.28
33.26
33.26
Net Book
Value
as at
Mar 31, 2012
24.28
24.28
Net Book
Value
as at
Mar 31, 2011
(Amount in ` Crore)
Note 11 (i) Capital Commitment : The estimated amount of contracts remaining to be executed on capital account, and not provided for is Rs. 3.31 Crore as at
March 31, 2012 (Year ended March 31, 2011 : Rs. 10.42 Crore).
44.29
INTANGIBLE ASSETS
(Other than internally generated)
FIXED ASSETS
Cost as at
Apr 1, 2011
[B]
Note 11
Notes forming part of financial statements
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of financial statements
Note 12
(Amount in ` Crore)
Particulars
NON - CURRENT INVESTMENTS
Trade Investments
Investments in Equity instruments (Unquoted at cost)
i) Subsidiaries
(a) Tata Technologies Inc (150,000 (P.Y. 150,000) shares.
of non-voting Class 'A’ common stock with no Par value)
(b) Tata Technologies Pte Ltd, Singapore, a 100% subsidiary company
(86,463,759 (P.Y. 86,463,759) ordinary shares with no par value)
ii) Joint Ventures
Tata HAL Technologies Ltd (formerly known as INCAT HAL Aerostructures Ltd)
4,320,000 (P.Y. 3,070,000) equity shares of Rs. 10 each
fully paid (50% JV with HAL)
- Share Application money paid
Other Investments (Quoted) *
i) Investment in Bonds
- 11% NCD of Tata Motors Finance Limited
ii) Investments in Mutual Fund
- Axis Fixed Term Plan - Series 21 (394 days)-Growth
- BSL Fixed Term Plan - Sr. ES - Growth
- Reliance Fixed Horizon Fund - XXI - Sr 18-Growth
- Birla Sun Life Fixed Term Plan Series DU - Growth
- HDFC FMP 400 Days-Feb 2012-1 - Series XXI
- Tata FMP Series 39 Scheme-Growth
- ICICI FMP Series 62 - 396 Days Plan F Cum
- ICICI FMP Sr. 63 - 384 Days Plan A Cum- BSL Fixed Term Plan - Series EV-Growth
- Kotak FMP Series 80-Growth
- JP Morgan India - FMP - Series 6- Growth
* (Note: Market value of quoted investments Rs. 43.35 Crore ( P.Y. Rs. Nil)
As at
Mar 31, 2012
As at
Mar 31, 2011
15.57
15.57
203.34
203.34
4.32
-
3.07
1.25
5.00
-
2.50
2.00
5.00
2.00
2.50
2.50
2.50
5.00
5.00
5.00
4.00
-
266.23
223.23
Note 13
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
1.49
0.17
2.22
3.88
0.37
0.22
0.59
0.19
0.38
0.57
0.03
0.39
0.42
4.45
1.01
LONG - TERM LOANS AND ADVANCES
Unsecured (Considered Good)
(A) Financial
(a) Security Deposits
(b) Loans to employees
(c) Loans to Others
(B)
76
Non Financial
(a) Capital Advances
(b) Deposits with Government and others
Notes forming part of financial statements
Note 14
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
CURRENT INVESTMENTS - OTHERS
a)
b)
Investments in Mutual Fund (Unquoted)
Current Investments (At Cost or Fair value whichever is lower)
HDFC F R I F - STF - WP - Daily Dividend
Reliance Money Manager Fund - Institutional Option - DDR
Jpmorgan India Treasury Fund- Super Inst. Daily Div Plan- Reinvest
TATA Fixed Income Portfolio Fund Scheme B3 Reg Quarterly
ICICI Prudential Interval Fund Half Yearly Interval Plan - I Institutional Dividend
Kotak FMP 6M Series 10 - Dividend
BSL Interval Income Fund-INSTL-Quarterly-Series 1-Dividend-Payout
BSL Qtly Interval - Series 4 - Dividend - Payout
Kotak Quarterly Interval Plan Series 4 - Dividend
IDFC Money Manager Fund - TP - Super Inst Plan C - DDR
TATA Floaters Fund - DDR
Birla Sun Life Savings Fund - Insti. - DDR
UTI-floating rate fund-short term plan-Institutional daily dividend plan
- Reinvestment
UTI Treasury Advantage Fund - IP DDR
TATA FMP Series 28 Scheme A Dividend
SBI SHDF Ultra Short Term - IP - DDR
Birla Short Term FMP Series 7 Dividend
IDBI Ultra Short Term Fund - DDR
BSL Short Term FMP Series 8 - Div - Payout
Religare FMP Series V - Plan F (91 days)- Dividend
TATA Fixed Income Portfolio Fund Scheme B2 Regular Monthly Dividend
IDFC Savings Advantage Fund - Plan A - DDR
UTI Fixed Income Interval Fund-Monthly Interval Plan-II-Institutional
Dividend Plan-Payout
JP Morgan India Fixed Maturity Plan 95D Series 1 - Dividend Plan - Payout
IDFC Fixed Maturity Monthly Series - 30 Dividend
SBI Debt Fund Series - 90 Days - 42 - Dividend
IDBI Liquid Fund - DDR
DWS Money Plus Fund - Institutional DDR
Religare Credit Opportunities Fund institutional Growth
Principal Cash Management Fund - Growth
Baroda Pioneer Treasury Advantage Fund IP Growth
Investments in Mutual Fund (Quoted)*
DWS Fixed Term Series 87 - Div. Payout
JM Fixed Maturity Fund Series XX Plan A
TATA Fixed Maurity Plan Series 36 Scheme B
UTI Fixed Term Income Fund - Series X - VII - Growth
BSL Fixed Term Plan - Series EI- Growth
JP Morgan India Fixed Maturity Plan - Sr 8 -Growth
DSP FMP Series 23 - 12M-Growth
-
2.97
9.90
2.07
4.13
2.06
1.00
0.50
1.98
0.90
9.09
10.90
2.02
-
1.03
6.06
3.00
9.95
1.00
2.53
1.00
2.00
3.02
4.03
35.57
50.00
20.00
105.57
2.00
1.70
5.00
1.00
4.00
1.25
96.09
5.50
2.00
2.00
5.00
5.00
20.00
2.00
41.50
-
147.07
96.09
*Note: Market value of quoted investments Rs. 41.93 Crore( P.Y. Nil)
77
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of financial statements
Note 15
(Amount in ` Crore)
Particulars
TRADE RECEIVABLES
(Unsecured, considered good unless otherwise stated)
(a)
Trade receivables due for a period exceeding six months
Considered good
Considered doubtful
Less : Allowances for doubtful debts
(b)
Other Trade Receivables
Considered good
Considered doubtful
Less : Allowances for doubtful debts
As at
Mar 31, 2012
As at
Mar 31, 2011
0.92
2.62
3.54
2.62
0.92
0.11
2.25
2.36
2.25
0.11
90.39
90.39
90.39
62.11
0.28
62.39
0.28
62.11
91.31
62.22
Note 16
(Amount in ` Crore)
Particulars
CASH AND BANK BALANCES
(A) Cash and Cash Equivalents
(a) Cash on hand
(b) Cheques, drafts on hand
(c) Current Account with banks (Refer Note (i))
(d) Bank Deposits less than 3 months maturity
(B)
Other Bank Balances
(a) Earmarked balance with banks
(b) Pledged/lien with Banks
Note:
(i)
In foreign currencies
As at
Mar 31, 2012
As at
Mar 31, 2011
0.03
0.88
31.02
82.00
0.02
23.44
56.56
30.00
0.64
0.39
114.96
0.49
0.37
110.88
29.78
40.62
Note 17
(Amount in ` Crore)
Particulars
OTHER CURRENT ASSETS
(A) Financials
(a) Interest Accrued on deposits and investments
(b) Bills of Exchange
(c) Unbilled Revenue
(B)
78
Non Financials
(a) Advances to suppliers and contractors
(b) VAT, other taxes recoverable, statutory deposits
(c) Prepaid expenses
(d) Unamortized Premium on forward contract
As at
Mar 31, 2012
As at
Mar 31, 2011
1.71
36.59
38.30
0.58
1.53
2.11
5.07
1.31
1.74
0.66
8.78
2.44
2.14
0.83
5.41
47.08
7.52
Notes forming part of financial statements
Note 18
(Amount in ` Crore)
Particulars
SHORT TERM LOANS AND ADVANCES
Unsecured (Considered Good)
(A) Financials
(a) Deposit with Financial Companies
(b) Inter Corporate Deposits (Refer Note 19 (viii) (b))
(c) Loans and advances to related parties (Refer Note 19 (viii) (b))
(d) Security Deposits
(e) Loans and Advances employees
Less : Allowances for doubtful loans and advances
(B)
Non Financials
Deposits with Government and others
As at
Mar 31, 2012
As at
Mar 31, 2011
10.00
30.00
7.45
0.05
1.68
0.04
49.14
5.86
0.01
1.30
0.04
7.13
0.03
0.01
49.17
7.14
Note 19
Note 19 (i) Earning per Share
Particulars
Earnings Per Share
(a)
Profit after tax
(b)
The weighted average number of Ordinary
Shares for Basic EPS
(c)
The nominal value per Ordinary Share
(d)
Earnings Per Share (Basic)
(e)
Profit after tax for Basic & Diluted EPS
(f )
The weighted average number of Ordinary
Shares for Basic EPS
(g)
Add: Adjustment for Employee Stock Options
(h)
The weighted average number of Ordinary
Shares for Diluted EPS
(i)
Earnings Per Shares (Diluted)
2011-12
` crores
130.71
97.05
Nos.
`
`
` crores
42,279,184
10.00
30.91
130.71
37,273,672
10.00
26.04
97.05
Nos.
Nos.
42,279,184
114,671
37,273,672
149,796
Nos.
`
42,393,855
30.83
37,423,468
25.93
Note 19 (ii) Contingent Liabilities
Particulars
(a)
(b)
(c)
(d)
Income Tax demands disputed in appeals
Sales Tax demands disputed in appeals
Service Tax demands disputed in appeals
Corporate Guarantees issued to Bank in respect of loan taken
by subsidiary companies
2010 - 2011
(Amount in ` Crore)
As at
Mar 31, 2012
1.98
21.81
3.39
257.35
As at
Mar 31, 2011
2.19
0.53
3.14
228.14
79
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Additional information to the Financial Statements
Note 19 (iii) Remittances in Foreign Currency for Dividend
The particulars of dividends remitted in foreign currencies to non-resident shareholders are as under:
Particulars
2011 - 12
2010 - 11
Number of non-resident shareholders
FY 2009-10 - Final dividend
FY 2010-11 - Interim dividend
FY 2010-11 - Final dividend
FY 2011-12 - Interim dividend
No.
No.
No.
No.
5
11
6
5
-
Number of shares held by them
FY 2009-10 - Final dividend
FY 2010-11 - Interim dividend
FY 2010-11 - Final dividend
FY 2011-12 - Interim dividend
No.
No.
No.
No.
3,434,897
21,544,206
4,246,889
3,434,897
-
` Crore
` Crore
` Crore
` Crore
1.72
6.05
2.97
2.40
-
Gross amount of dividend
FY 2009-10 - Final dividend
FY 2010-11 - Interim dividend
FY 2010-11 - Final dividend
FY 2011-12 - Interim dividend
Note 19 (iv)
Derivative transaction
The Company uses forward exchange contracts to hedge its exposure in foreign currency. The
information on derivative instruments is as follows:
1 . Derivative instruments outstanding as at March 31, 2012:
Particulars
As At
March 31, 2012
Forward
Exchange
contracts
March 31, 2011
80
Bought/Sold
Sold
Sold
Sold
Sold
Bought
Bought
Bought
-
EUR/USD
GBP/USD
USD/INR
USD/INR
USD/GBP
USD/EUR
USD/INR
-
Amount in
Foreign currency
Amount in
` Crore
EUR 0.02
GBP 0.20
USD 0.50
USD 0.09
USD 0.33
USD 0.03
USD 0.50
-
1.65
16.67
25.44
4.75
16.61
1.65
25.44
-
Additional information to the Financial Statements
2. Foreign exchange currency exposures not covered by derivative instruments as at Mar 31, 2012:
(Amount in Crore)
Particulars
As At Mar 31, 2012
Currency
Amount in Foreign Currency
As At Mar 31, 2011
Equivalent amount in INR
Amount in Foreign Currency
Equivalent amount in INR
Sundry Debtors
EUR
CAD
GBP
THB
USD
ZAR
0.02
0.05
0.01
0.02
0.01
1.46
0.09
4.15
0.02
0.86
0.08
0.04
0.14
0.50
-
2.35
9.69
22.40
-
Loans & Advances
EUR
GBP
THB
USD
ZAR
0.01
0.05
0.42
0.01
-
0.34
4.29
0.69
0.69
0.01
0.18
0.01
-
0.03
0.24
0.26
0.67
-
Sundry Creditors
EUR
GBP
SGD
THB
USD
1.18
-
0.28
0.05
1.94
-
0.01
0.06
0.13
0.20
0.86
0.03
0.09
5.72
Unsecured Loan
USD
0.60
30.53
1.09
48.45
Loan to subsidiary
USD
-
-
0.06
2.63
Current account
with Bank
USD
EUR
GBP
0.23
0.02
0.20
11.47
1.65
16.67
0.91
-
40.62
-
Note 19 (v)
Information as required as per Revised Schedule VI to the Companies Act.
(Amount in ` Crore)
Particulars
2011 - 12
Earnings in foreign currency
Services
Commission
Interest
2010 - 11
Sub Total
179.45
0.41
179.86
110.14
0.48
0.29
110.91
Sub Total
13.06
1.14
14.20
3.83
0.73
4.56
Sub Total
4.41
37.10
0.70
3.73
0.17
46.11
3.90
27.93
0.93
3.06
0.18
36.00
CIF Value of imports
Capital Goods
Revenue Items
Expenditure in foreign currency:
Travel / Training Expenses
Software services
Purchases for Trading Business
Interest
Commission
Other Expenses
81
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Additional information to the Financial Statements
Note 19 (vi) Dues to micro, small and medium scale enterprises
Based on the information available with the Company, none of the vendors fall under the
definition of micro, small and medium scale enterprises. This information is not verifiable by
the auditors.
Note 19 (vii) Segment Reporting
Primary Segment
Segment reporting is made on the basis of geographical location of the customer.
(Amount in ` Crore)
Particulars
Revenues
Identifiable operating expenses
Allocated expenses
Segmental operating income
Unallocable expenses
Other Income
Net profit before taxes
Taxes
Net profit after taxes
USA
India
UK
76.16
59.50
61.30
48.67
3.87
2.01
10.99
8.81
464.47
383.66
299.82
242.34
10.51
7.82
154.13
133.50
80.49
32.95
43.51
22.29
4.10
1.12
32.88
9.55
Rest of
Europe
15.04
12.22
12.77
10.50
0.77
0.41
1.50
1.30
Rest of
the World
7.84
4.84
5.87
4.54
0.37
0.16
1.61
0.14
Total
644.00
493.16
423.27
328.33
19.62
11.53
201.12
153.31
47.99
36.96
23.35
10.76
176.47
127.10
45.77
30.06
130.71
97.05
Fixed assets used in the Company’s business or liabilities contracted have not been identified to any of
the reported segments, as fixed assets and services are used interchangeably by reported segments.
Secondary segment
The complete operations of the Company have been treated as a single segment “Information
Technology Services”.
Previous year figures have been shown in italic.
82
Additional information to the Financial Statements
Note 19 (viii)
Related Party Disclosures for the year ended March 31, 2012.
a) Related party and their relationship
1
Parent Company
Tata Motors Limited
2
Subsidiary
Tata Technologies Pte.Limited, Singapore
3
Indirect Subsidiaries
1
2
3
4
5
6
7
Tata Technologies (Thailand) Limited
INCAT International Plc.
Tata Technologies Europe Limited
INCAT GmbH
Tata Technologies Inc
Tata Technologies de Mexico, S.A. de C.V.
Tata Technologies (Canada) Inc.
4
Fellow subsidiaries
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
TAL Manufacturing Solutions Ltd.
TML Driveline Ltd.
Sheba Properties Ltd.
Concorde Motors (India) Ltd.
Tata Daewoo Commercial Vehicle Co.Ltd.
Tata Motors Insurance Broking & Advisory Services Ltd.
Tata Motors European Technical Centre Plc.
Tata Motors Finance Limited
Tata Marcopolo Motors Ltd.
Tata Motors (Thailand) Ltd.
TML Holdings Pte Ltd., Singapore
TML Distribution Company Limited
Tata Hispano Motors Carrocera S.A.
PT Tata Motors Indonesia (incorporated on December 29, 2011)
Tata Motors (SA) (Proprietory) Limited
Miljobil Grenland AS
Jaguar Land Rover PLC (name changed from JaguarLandRover
Limited with effect from April 6, 2011)
Jaguar Cars Ltd
Jaguar Cars Overseas Holdings Ltd
Jaguar Land Rover Austria GmbH
Jaguar Belux NV
Jaguar Land Rover Japan Ltd.
Jaguar cars South Africa (pty) Ltd
Jaguar Italia SPA (merged into Land Rover Italia w.e.f. December 31,
2011)
Jaguar Cars Exports Ltd
The Daimler Motor Company Ltd
The Jaguar Collection Ltd
Daimler Transport Vehicles Ltd
S.S. Cars Ltd
The Lanchester Motors Company Ltd
Jaguar Hispania Sociedad
Jaguar Land Rover Deutschland (name changed from Jaguar
Deutschland GmbH w.e.f November 28, 2011)
Land Rover
Land Rover Group Ltd
Jaguar Land Rover North America LLC
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
83
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Note 19 (viii)
Continued...
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
84
5
Joint Venture
6
Associates of Parent Company
7
Key Management Personnel
Land Rover Belux S.A./N.V
Land Rover Ireland Ltd
Jaguar Land Rover Nederland BV
Jaguar Land Rover Portugal - Veiculos e Pecas LDA
Jaguar Land Rover Australia Pty Ltd.
Land Rover Exports Ltd
Jaguar Land Rover Italia SpA (name changed from Land Rover
Italia SpA w.e.f December 31, 2011)
Land Rover Espana SL
Land Rover Deutschland GmbH (merged into Jaguar
Deutschland e.e.f. November 28, 2011)
Jaguar Land Rover Korea Company Ltd
Jaguar Land Rover Automotive Trading (Shanghai) Company Ltd.
Jaguar Land Rover Canada ULC
Jaguar Land Rover France, SAS
Jaguar Land Rover (South Africa) (Pty) Ltd.
Jaguar Land Rover Brazil LLC
Limited Liability Company "Jaguar Land Rover" (Russia)
Land Rover Parts Limited
Land Rover Parts US LLC (dissolved w.e.f September 30, 2011)
Jaguar Land Rover (South Africa) Holdings Ltd. (incorporated on
September 9, 2011)
Tata Hispano Motors Carrosseries Maghreb
Tata Daewoo Commercial Vehicle Sales and Ditsribution Co. Ltd.
Tata Precision Industries Pte. Ltd.
Tata Engineering Services Pte Ltd.
Trilix S.r.l.
TATA HAL Technologies Limited
1
2
3
4
5
6
7
8
9
Tata Cummins Ltd
Tata Precision Industries (India) Ltd.
Fiat India Automobiles Ltd.
Spark44 (JV) Ltd. (w.e.f. June 27, 2011)
Jaguar Cars Finance Ltd.
Automobile Corporation of Goa Ltd
Nita Co Ltd
Telco Construction Equipment Co.Ltd.
Tata AutoComp Systems Ltd
Mr. P. R. McGoldrick
Additional information to the Financial Statements
b)
Transactions with related parties
A statement of transactions with related parties is attached here with.
(Amount in ` Crore)
Particulars
Parent
Company
Purchase of goods
Fellow
Subsidiaries
subsidiaries
Joint
Venture
Key
Associates
of Parent Management
Personnel
company
-
-
0.76
-
-
-
-
35.44
(32.25)
(-)
0.49
(0.09)
1.11
(0.58)
1.36
(0.05)
-
Services received
1.64
(-0.007)
(1.69)
37.03
(33.47)
0.60
(2.70)
(0.17)
-
Services rendered
336.30
(262.25)
11.27
(17.09)
175.26
(91.74)
0.35
(0.02)
2.46
(6.01)
-
Finance placed (including loans, equity
& ICD)
461.40
(271.00)
25.01
-
-
-
-
-
Finance received back (including loans,
equity & ICD)
459.40
(326.00)
-
-
-
-
-
(1.92)
(-5.53)
12.93
-
0.00
(-0.29)
-
-
-
Sale of goods(inclusive of sales tax)
Interest/Dividend paid/(received)(net)
Remuneration
Amount receivable
0.30
(0.30)
17.38
(21.76)
2.86
(1.12)
55.88
(25.63)
4.54
(0.31)
0.30
(0.72)
-
0.18
(0.45)
(-0.001)
5.24
(5.47)
(0.71)
0.00
(-)
0.20
(0.20)
Amount receivable (in respect of loans,
Equity, ICD, Bonds)
2.00
(-)
25.69
(-)
(2.63)
-
-
-
Amount payable (in respect of loans, Equity, ICD, Bonds)
(0.03)
-
(0.01)
-
-
(0.03)
-
Amount payable
Previous year’s figures have been shown in bracket.
Disclosure of material transactions:
Services received:
Tata Technologies Inc Rs. 24.47 crores (March 31, 2011 Rs. 21.92 crores)
Tata Technologies Europe Ltd. Rs. 4.58 crores (March 31, 2011 Rs. 6.11 crores)
Tata Technologies (Thailand) Ltd. Rs. 4.10 crores (March 31, 2011 Rs. 2.21 crores)
Services rendered:
Tata Motors Ltd. Rs. 371.74 crores (March 31, 2011 Rs. 294.50 crores)
Tata Technologies Inc Rs. 74.58 crores (March 31, 2011 Rs. 50.11 crores)
Tata Technologies Europe Ltd Rs. 94.48 crores (March 31, 2011 Rs. 35.98 crores)
85
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Additional information to the Financial Statements
Note 19 (ix) The Company has a joint venture with Hindustan Aeronautics Ltd.,TATA HAL Technologies Ltd (THTL) for
providing engineering and design solutions and services in the domain of aerostructures for aerospace
industry. The Company has an investment of Rs. 4.32 crores as at March 31, 2012, representing 50%
shareholding in THTL. The proportionate share of assets and liabilities as on March 31, 2012 and income
and expenditure for the year 2011-12 of THTL are given below.
(Amount in ` Crore)
Particulars
As on
31 March
2012
(Audited)
As on
31 March
2011
(Audited)
RESERVES AND SURPLUS
Profit & Loss
(2.95)
(2.95)
(2.15)
(2.15)
NON-CURRENT LIABILITIES
0.06
0.06
CURRENT LIABILITIES
0.28
0.37
(2.61)
(1.72)
0.57
0.50
1.07
0.70
0.35
1.05
0.34
0.27
0.03
0.00
0.64
0.48
1.01
0.05
0.01
1.55
1.71
2.60
NON-CURRENT ASSETS
Net Block (including CWIP)
Long Term Loans and Advances
CURRENT ASSETS
Trade Receivables
Cash and Cash Equivalents
Short Term loans and advances
Other Current Assets
Particulars
2011-12
(Audited)
2010-11
(Audited)
INCOME
Service Income
Other income
EXPENDITURE
Cost of Traded Items & Services
Salary & other general expenses
Depreciation
Note 19 (x)
86
2.48
0.07
2.55
1.54
0.14
1.68
0.44
2.66
0.24
3.34
1.83
0.17
2.00
The Revised Schedule VI has become effective from April 1, 2011 for the preparation of Financial
Statements. This has significantly impacted the disclosure and presentation made in the Financial
Statements. Previous Year's figures have been regrouped/reclassified wherever necessary to
correspond with the current year's classifications / disclosures.
Notes forming part of financial statements
NOTE - A
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
80.73
562.52
0.75
644.00
70.18
422.50
0.48
493.16
REVENUE FROM OPERATIONS
(a)
(b)
(c)
Sale of Products
Sale of Services
Commission Income
NOTE - B
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
6.32
0.34
16.47
0.90
0.23
24.26
9.38
1.15
0.83
0.22
11.58
OTHER INCOME
(a)
(b)
(c)
(d)
(e)
Interest income-Others
Interest income-Long Term Investments
Dividend income - Other Current Investments
Foreign Currency Gain
Other non-operating Income
NOTE - C
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
CONSULTANCY FEES, SOFTWARES AND OTHERS
(a)
(b)
(c)
Outsourcing Charges
Software-internal use
Professional Fees
36.95
1.84
15.68
54.47
NOTE - D
35.33
1.07
10.66
47.06
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
272.02
9.53
4.06
5.00
8.14
298.75
202.73
7.57
3.43
3.10
5.19
222.02
EMPLOYEE BENEFIT EXPENSE
(a)
(b)
(c)
(d)
(e)
Salaries and Wages
Contribution to Provident Fund
Contribution to Superannuation Scheme
Contribution to Gratuity Fund
Staff welfare Expenses
NOTE - E
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
1.43
0.11
1.54
1.65
0.04
1.69
FINANCE COSTS
Interest Expense
- Interest on Short Term Borrowings
- Interest on Long Term Borrowings
87
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of financial statements
NOTE - F
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
0.39
0.27
2.33
3.22
0.17
0.01
0.34
0.23
0.82
3.82
15.46
2.34
0.30
0.36
1.74
1.60
4.21
8.37
4.03
0.01
0.10
1.04
51.16
0.17
0.07
1.47
1.72
0.09
0.01
0.27
0.01
0.83
3.07
11.87
1.54
0.31
0.29
1.31
1.24
3.15
2.95
2.92
1.51
0.89
35.69
OTHER EXPENSES
(a)
(b)
(c)
(d)
(e)
(f )
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)
Repairs & Maintenance
- Buildings
- Plant & Machinery
- Others
Rent*
Rates and Taxes
Provision for Wealth Tax
Insurance
Advertisement and Publicity
Business Promotion Expenses
Office Expenses
Travelling & Conveyance
Power & Fuel
Water Charges
Auditors’ Remuneration**
Staff Training and Seminar Expenses
Staff Recruitment Expenses
Commision to Others
AMC charges
Communication Expenses
Loss on Sale of Investments
Allowances for doubtful debts
Miscellaneous Expenses
* Obiligations under operating lease
Obligations towards non-cancellable lease
Lease Obligations
Dues not later than one year
Due later than one year but not later than five years
Later than five years
Lease payments recognised in the statement of profit and loss for the year
(Amount in ` Crore)
Year ended
Mar 31, 2012
2.64
3.24
5.88
3.22
Year ended
Mar 31, 2011
1.01
2.05
3.06
1.72
The Company has entered into operating lease arrangements for office premises.
This includes lease obligations on account of a lease arrangements for premises in Thane entered during the year
which has no impact on Profit and Loss Account for the current year.
** Auditors' Remuneration (Excluding Service tax)
Particulars
i)
ii)
iii)
iv)
88
For services as auditors, including quarterly audits
For Tax Audit
For Other services
Reimbursement of out-of-pocket expenses
(Amount in ` Crore)
Year ended
Mar 31, 2012
0.30
0.04
0.01
0.01
0.36
Year ended
Mar 31, 2011
0.25
0.03
0.01
0.29
Auditors’ Report
TO THE BOARD OF DIRECTORS OF TATA TECHNOLOGIES LIMITED
1.
We have audited the attached Consolidated Balance Sheet of Tata Technologies Limited (“the Company”), its
subsidiaries and jointly controlled entity (the Company its subsidiaries and jointly controlled entities constitute
“the Group”) as at March 31, 2012, the Statement of Consolidated Profit and Loss and the Consolidated Cash Flow
Statement of the Group for the year ended on that date, both annexed thereto. The Consolidated Financial
Statements include investments in jointly controlled entity accounted in accordance with Accounting Standard 27
(Financial Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules,
2006. These financial statements are the responsibility of the Company’s Management and have been prepared
on the basis of the separate financial statements and other financial information regarding components. Our
responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.
2.
We conducted our audit in accordance with the auditing standard generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the Management, as well as evaluating the overall financial
statements presentation.We believe that our audit provides a reasonable basis for our opinion.
3.
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of
Rs. 139.86 Crore as at March 31, 2012, total revenues of Rs. 572.54 Crore and net cash inflows amounting to Rs.
114.46 Crore for the year ended on that date.These financial statements have been audited by other auditor whose
reports have been furnished to us and our opinion, in so far it relates to amounts included in respect of these
subsidiaries is based solely on the reports of other auditors.
4.
We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the
requirements of Accounting Standard 21(Consolidated Financial Statements) and Accounting Standard 27
(Financial Reporting of Interest in Joint Ventures) as notified under the Companies (Accounting Standard) Rules,
2006.
5.
Based on our audit and on consideration of the separate audit reports on individual financial statements of the
Company and the aforesaid subsidiaries, and to the best of our information and according to the explanations
given to us, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the
accounting principles generally accepted in India;
i)
in case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2012;
ii)
in the case of the Statement of Consolidated Profit and Loss , of the profit of the Group for the year
ended on that date; and
iii)
in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year
ended on that date.
Hemant M. Joshi
Partner
(Membership No. 38019)
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No. 117366W)
Date: May 8, 2012
Place: Pune
89
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Consolidated Balance Sheet as at March 31, 2012
(Amount in ` Crore)
Particulars
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital
(b) Reserves and Surplus
(2) Non-current Liabilities
(a) Long-term Borrowings
(b) Deferred Tax Liabilities (Net)
(c) Trade Payables
(d) Long-term Provisions
(e) Income tax liabilities (Net)
(3) Current Liabilities
(a) Short-term Borrowings from Banks
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-term Provisions
(e) Income tax liabilities (Net)
II. ASSETS
(1) Non-current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-progress
(iv) Intangible Assets in Progress
Note No
March 31, 2012 March 31, 2011
3
4
42.97
737.86
780.83
37.32
430.45
467.77
5
6
0.62
3.75
0.35
7.76
0.24
12.72
226.30
6.17
4.83
237.30
81.40
241.10
336.49
37.92
13.61
710.52
73.41
177.94
59.38
25.86
336.59
1,504.07
1,041.66
70.15
36.61
1.54
3.49
111.79
53.22
25.54
1.35
6.77
86.88
397.90
344.57
43.00
5.57
17.29
20.74
8.59
19.41
30.06
596.29
489.51
147.07
0.05
290.02
342.83
78.21
49.60
907.78
96.07
0.77
231.30
173.33
42.78
7.90
552.15
1,504.07
1,041.66
7
8
9
10
11
12
(b) Goodwill on Consolidation (Refer Note 20 (iii))
(c) Non-current Investments
(d) Deferred tax Assets (Net)
(e) Long-term loans and advances
(f ) Income tax assets (Net)
(2) Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Bank Balances
(e) Other Current Assets
(f ) Short-term loans and advances
Significant Accounting Policies
Accompanying Notes to the Financial Statements
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
Hemant M. Joshi
Partner
Date: May 8, 2012
Place: Pune
13
6
14
15
16
17
18
19
2
20
For and on behalf of the Board
S Ramadorai
Chairman
P R McGoldrick
Managing Director
R Gopalakrishnan
Director
Samrat Gupta
Chief Financial Officer
P P Kadle
Director
Anubhav Kapoor
Company Secretary
C Ramakrishnan
Director
Date: May 8, 2012
Place: Mumbai
90
Statement of Consolidated Profit and Loss for the year ended March 31, 2012
(Amount in ` Crore)
Particulars
I.
II.
III.
IV.
V.
Revenue from Operations
Other Income
Total Revenue (I + II)
Expenses :
(a) Cost of Traded Products
(b) Consultancy fees, Softwares and others
(c) Employee Benefit Expense
(d) Finance Cost
(e) Depreciation and amortisation Expense
(f ) Other Expenses
Total Expenses
Note No
Year ended
Year ended
March 31, 2012 March 31, 2011
A
B
1,642.61
24.34
1,666.95
1,255.83
12.22
1,268.05
C
D
E
F
11 & 12
G
315.52
223.75
699.66
7.23
26.19
122.77
1,395.12
266.27
151.02
546.87
7.37
18.87
97.75
1,088.15
271.83
179.90
-
(0.01)
271.83
179.91
55.79
7.67
63.46
42.34
(4.12)
2.67
40.89
208.37
139.02
49.28
49.15
37.30
37.15
Profit Before Exceptional items and Tax (III - IV)
VI. Exceptional Items
(Gain)/loss on liquidation of subsidiaries (Net)
VII. Profit Before Tax (V - VI)
VIII. Tax Expense :
(a) Current Tax
(b) Earlier Year
(c) Deferred Tax
IX. Profit after Tax (VII - VIII)
X.
Earnings Per Equity Share : (Refer Note 20(i))
(i) Basic
(ii) Diluted
Significant Accounting Policies
Accompanying Notes to the Financial Statements
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
Hemant M. Joshi
Partner
Date: May 8, 2012
Place: Pune
2
20
For and on behalf of the Board
S Ramadorai
Chairman
P R McGoldrick
Managing Director
R Gopalakrishnan
Director
Samrat Gupta
Chief Financial Officer
P P Kadle
Director
Anubhav Kapoor
Company Secretary
C Ramakrishnan
Director
Date: May 8, 2012
Place: Mumbai
91
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Consolidated Cash Flow Statement
Year ended
March 31, 2012
Consolidated Cash Flow Statement for the
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit after Taxation and Extraordinary Items
Depreciation and amortization
Disallowance of TDS Abroad
Provision for Wealth Taxes
Provision for Income Tax
Provision for Deferred Tax
Dividend Income on Investment in mutual funds
(Profit)/Loss on sale of Investment
(Profit) / Loss on Sale Tangible and Intangible Fixed Assets
Finance cost
Interest Income
Unrealised exchange Loss / (Gain)
Effect of exchange differences on translation of foreign currency cash & cash equivalent
Allowances for doubtful debts
Operating profit before Working Capital Changes
Adjustments for :
Inventories
Trade Receivables
Other Current Assets
Short Term Loans and advances
Long term loans and advances
Trade Payables
Other Current Liabilities
Short Term Provision
Long Term Provision
CASH GENERATED FROM OPERATIONS
208.37
26.19
0.08
0.01
55.79
7.67
(16.47)
0.01
(2.13)
7.23
(7.07)
1.06
(0.15)
2.26
282.85
139.02
18.87
0.01
0.01
38.23
2.67
(1.15)
0.03
7.38
(9.32)
(1.93)
(2.53)
5.49
196.78
0.83
(27.79)
(33.79)
(1.70)
4.92
49.16
8.71
(0.68)
1.53
284.04
4.52
(8.70)
(40.14)
55.55
(15.67)
(5.73)
2.05
2.08
0.34
191.08
(38.36)
(37.85)
245.68
153.23
2.36
16.47
3.65
(50.41)
(5.00)
(489.40)
459.40
3.00
(3.00)
2.31
(10.00)
(1,953.29)
1,864.30
(0.15)
(159.76)
0.20
1.15
3.27
(21.22)
(271.00)
326.00
5.53
(14.35)
(367.83)
315.85
0.04
(22.36)
141.27
(7.31)
(65.72)
99.79
(98.13)
0.37
(3.46)
66.81
0.57
(7.38)
(60.54)
7.92
1.75
(3.33)
(61.01)
152.73
342.83
0.39
173.33
0.24
(0.15)
8.73
7.74
152.73
69.86
173.33
0.24
93.97
0.28
(2.53)
2.51
4.50
69.86
0.04
2.95
173.74
115.20
0.03
32.68
94.68
30.00
0.64
49.87
0.39
342.83
0.49
15.08
0.37
173.33
Income Taxes paid (net)
NET CASH FLOW (USED IN)/GENERATED FROM OPERATING ACTIVITIES
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of Tangible and Intangible Fixed Assets
Dividend Received
Interest Received
Payment for Purchase of Tangible and Intangible Fixed Assets
Investment in Long Term Bonds
Inter Corporate Deposits Placed
Inter Corporate Deposits Refunded
Inter Corporate Deposits Taken
Inter Corporate Deposits Repaid
Interest received from Intercorporate Deposit
Deposits With Financial Companies
Loans & Advances to Associates and others
Purchase of Mutual Fund
Sale of Mutual funds
Fixed Deposit with banks (net) having maturity over three months and under lien
Proceeds received on liquidation of subsidiaries
NET CASH FLOW (USED IN)/GENERATED FROM INVESTING ACTIVITIES
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of shares including Premium
Interest Pai
Dividends Paid (including Dividend Tax)
Proceeds from Short Term borrowngs
Repayment of Short Term borrowings
Proceeds from Long Term borrowing
Repayment of Long Term borrowings
NET CASH FLOW (USED IN)/GENERATED FROM FINANCING ACTIVITIES
(Amount in ` Crore)
Year ended
March 31, 2011
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS
Cash & Bank Balances at the close of the year as per (Refer Note 17) #
Less: Bank Deposits with original maturity over three months for the year
Cash & Bank Balances at the beginning of the year as per (Refer Note 17)
Less: Bank Deposits with original maturity over three months for the previous year
Effect of exchange rate changes on cash and cash equivalents
Add: Translation adjustment on Cash & Bank balances of foreign subsidiaries
Add: Translation adjustment on reserves of foreign subsidiaries
# Cash & Bank Balances Comprises :
a) Cash and Cash Equivalents
Cash on hand
Cheques, drafts on hand
Current Account with banks
Bank Deposits less than 3 months maturity
b) Other Bank Balances
Earmarked balance with banks
Bank Deposits with more than three months but less than 12 months maturity
Pledged/lien with Banks
For and on behalf of the Board
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
S Ramadorai
Chairman
P R McGoldrick
Managing Director
R Gopalakrishnan
Director
Samrat Gupta
Chief Financial Officer
Hemant M. Joshi
Partner
P P Kadle
Director
Anubhav Kapoor
Company Secretary
Date: May 8, 2012
Place: Pune
C Ramakrishnan
Director
Date: May 8, 2012
Place: Mumbai
92
Notes forming part of financial statements
Note 1
Company Overview
TATA Technologies Limited ("TTL or the Company") was incorporated on August 22, 1994 as a Private Limited
Company in the name of Core Software Systems Private Limited. The name of the Company was subsequently
changed to Tata Technologies (India) Limited. On February 8, 2001, the Company changed its name from Tata
Technologies (India) Limited to Tata Technologies Limited. The Company’s range of services includes IT
Consultancy, SAP implementation and maintenance, providing networking solutions, CAD/CAM engineering &
design consultancy. The Company is headquartered in Pune, India. The Company has five branches located at
Mumbai, Lucknow, Jamshedpur, Bangalore, and Chennai that enables it to provide high quality, cost-effective
services to clients.
During October 2005, the Company incorporated a wholly owned subsidiary in Thailand to cater the need of
automotive companies in Thailand and South East Asian countries. Also during October 2005 the Company
acquired, through its subsidiary, 100% equity of INCAT International Plc, UK which had various subsidiaries in US,
Europe, Japan and Singapore.
A reorganization of various entities under INCAT was undertaken, to have a single representative legal entity in
each country in which the Company operates, to improve operational efficiency. The Company now has a global
presence, through its subsidiaries, in US, UK, Germany, Mexico, Canada, Singapore, South Korea, Netherlands and
Thailand.
In December, 2005, the Company acquired 100% stake in Tata Technologies Pte Ltd. a Singapore based Company.
In October 2006, the Company sold its 100% equity stake in Tata Technologies (Thailand) Ltd. to its wholly owned
subsidiary viz.Tata Technologies Pte Ltd., Singapore at a value determined by an independent valuer.
The Company provides Engineering and Design services (E&D) and Product Lifecycle Management (PLM)
products and services, primarily to manufacturers and their suppliers in the international automotive, aerospace
and engineering markets. The offshore capabilities of the Company in the field of engineering automation
services combined with the high-end onshore strengths of subsidiaries are expected to offer a strong and
seamless onshore/offshore delivery capability to the international customers in the automotive, aerospace and
engineering industries.
Note 2
Significant Accounting Policies
a) Basis of consolidation
The consolidated financial statements relate to the Company, its subsidiary companies and joint venture.
The Company its subsidiaries and joint venture constitute the Group.
b) Basis of accounting
The financial statements are prepared under the historical cost convention, in accordance with Indian
Generally Accepted Accounting Principles (GAAP). GAAP comprises the mandatory accounting
standards notified under the Companies (Accounting Standards Rules, 2006). Accounting policies have
been consistently applied except where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The financial statements of the subsidiary companies and joint venture used in the consolidation are
drawn up to the same reporting date as of the Company.
c) Principles of consolidation
The consolidated financial statements have been prepared on the following basisa)
The consolidated financial statements are prepared in accordance with the principles and
procedures required for the preparation and presentation of consolidated financial statements as
laid down under the Accounting Standard on Consolidated Financial Statements issued under
Companies (Accounting Standards Rules, 2006)
b)
The financial statements of the Company and its subsidiary companies have been combined on a
line by line basis by adding together like items of assets, liabilities, income and expenses. The
intra-group balances and intra-group transactions and unrealized profits or losses have been fully
93
Eighteenth Annual Report 2011-12
Tata Technologies Limited
eliminated. The consolidated financial statements are prepared by applying uniform accounting
policies in use at the Group.
c)
The excess of cost to the Company of its investments in the subsidiary companies over its share of
equity of the subsidiary companies, at the dates on which the investments in the subsidiary
companies are made, is recognized as ‘Goodwill’ being an asset in the consolidated financial
statements. Alternatively, where the share of equity in the subsidiary companies as on the date of
investment is in excess of cost of investment of the Company, it is recognized as ‘Capital Reserve’
and shown under the head ‘Reserves and Surplus’; in the consolidated financial statements.
d)
Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity
attributable to the minority shareholders at the dates on which investments are made by the
Company in the subsidiary companies and further movements in their share in the equity,
subsequent to the dates of investments as stated above.
e)
For the purpose of consolidation, the financial statements of foreign subsidiaries have been
translated into its immediate parent companies currency and the same has been on the following
basis:
- All income and expenses items are converted at the average rate of exchange applicable for the
year. All assets and liabilities are translated at the closing rate as on the balance sheet date. The
resulting exchange differences on account of translation at the year end are transferred to
translation reserve.
f)
The financial statements of the joint venture company has been combined by using proportionate
consolidation method and accordingly, venturer’s share of each of the assets, liabilities, income and
expenses of jointly controlled entity is reported as separate line item in the consolidated financial
statements.
d) Subsidiary and joint venture Companies considered in the consolidated financial statements:
The following subsidiary companies are considered in the consolidated financial statements
% of holding either directly
or through subsidiary as at
Sr. no
Name of the Subsidiary Company
Direct Subsidiary
TATA Technologies Pte. Ltd.
Indirect Subsidiaries
Tata Technologies (Thailand) Limited
INCAT International Plc.
Tata Technologies Europe Limited
INCAT GmbH
Tata Technologies Inc **
Tata Technologies (Canada) Inc **
Tata Technologies de Mexico, S.A. de C.V **
1
1
2
3
4
5
6
7
Country of Incorporation
Singapore
Thailand
UK
UK
Germany
USA
Canada
Mexico
Mar 31,
2012
Mar 31,
2011
100
100
100
100
100
100
99.24
99.24
99.24
100
100
100
100
99.24
99.24
99.24
** For these subsidiaries though the holding is 99.24 %, the indirect voting power is 100%.
e) The following joint venture company is considered in the consolidated financial
statements:
% of holding either directly
or through subsidiary as at
Sr. no
1
94
Name of the Joint Venture Company
TATA HAL Technologies Limited
Country of Incorporation
India
Mar 31,
2012
50
Mar 31,
2011
50
f) Conversion into Indian Rupees
For the purpose of consolidation, the financial statements of foreign subsidiaries have been translated
into its immediate parent companies currency and the same has been on the following basis:
All income and expenses items are converted at the average rate of exchange applicable for the period. All
assets and liabilities are translated at the closing rate as on the balance sheet date. The resulting exchange
differences on account of translation at the period end are transferred to translation reserve.
g) Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the management of the
Company (Management) to make estimates and assumptions that affect the reported amounts of revenue
and expenses during the year and balances of assets and liabilities and disclosures relating to contingent
liabilities as at the date of financial statements. Provisions are made for all known losses and liabilities, future
unforeseeable factors that may affect the profit on fixed price service contracts and also towards likely
expenses for providing post-sales client support on such contracts.
h) Revenue recognition
Revenue from services on time and materials contracts is recognized when services are rendered and
related costs are incurred i.e. based on certification of time sheets and billed to clients as per the terms of
specific contracts.In case of fixed price contracts, revenue is recognized over the life of the contract based on
milestones achieved as specified in the contracts or by proportionate completion method on the basis of the
work completed. Foreseeable losses on such contracts are recognized when probable.
Revenue from rendering Annual Maintenance Services (SAP-ERP) is recognized proportionately over the
period in which services are rendered.
Revenue from third party software products and hardware sale is recognized upon delivery.
Income from interest and rent is recognized on time proportion basis.
Dividend from investments is recognized when the right to receive the payment is established and when no
significant uncertainty as to measurability or collectability exists.
Commission Income on sale of PLM products is recognized upon delivery of products by the vendor to the
end user.
i)
Fixed assets
Fixed assets are stated at cost, less accumulated depreciation. Costs include all expenses incurred to bring
the assets to its present location and condition. Direct costs are capitalized till the assets are ready for use
and include financing costs relating to any borrowing attributable to the acquisition of qualifying fixed
assets.
Software not exceeding Rs. 25,000 is charged off to the Profit and Loss Account.
j)
Depreciation
Depreciation is provided on Straight Line Method (SLM) over the estimated useful lives of the assets.
Estimated useful lives of assets are as follows:
Type of Asset
Depreciation Percentage
Leasehold Land
Leasehold Improvements
Buildings
Plant and Machinery
Computer Equipments
Vehicles
Lease Period
Lease Period
4% to 6.67%
4.75% to 20%
25% to 50%
9.5% to 33.33%
License Period
25% to 50%
Software Licenses
95
Eighteenth Annual Report 2011-12
Tata Technologies Limited
k) Leases
Assets leased by the Company in its capacity as lessee, where the Company has substantially all the risks and
rewards of ownership are classified as finance lease. Such lease are capitalised at the inception of the lease at
lower of the fair value or the present value of the minimum lease payments and a liability is created for an
equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to
obtain a constant periodic rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the
lessor, are recognized as operating lease. Lease payments under operating leases are recognized in the Profit &
Loss account on a straight line basis.
l)
Foreign Currency transactions and translations of foreign operations
Income and expenses in foreign currencies are recorded at the exchange rates prevailing on the date of
the transaction. Monetary current assets and current liabilities that are denominated in foreign currency
translated at the exchange rates prevalent as at the Balance Sheet date and the profit / loss so determined
and also the realized exchange gains / losses are recognized in the Profit and Loss Account.
All foreign operations have been identified as non-integral to the operations of the Company. The
translations of functional currency into reporting currency is performed for balance sheet accounts using
the exchange rates in effect at the balance sheet date and for the revenue and expense accounts using
appropriate average exchange rates for the respective periods. The gains or losses resulting from such
translations are accumulated in a foreign currency translation reserve.
Premium or discount on forward contracts is amortised over the life of such contract and is recognized as
income or expense in the Profit and Loss Account
m) Investments
Investments are classified into current investments and long term investments.
Current investments are carried at lower of cost and market value. Any reduction in carrying amount and
reversals of such reductions are charged or credited to the Profit and account.
Long term investments are stated at cost less provision for diminution in the value of such investments
Diminution in value is provided for where the management is of the opinion that the diminution is other
than temporary in nature.
n) Impairment of Assets
At each balance sheet date, the Company reviews using internal resources the carrying amounts of its
fixed assets to determine whether there is any indication that the assets suffered an impairment loss. If
any such condition exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in use.
In assessing value in use, the estimated future cash flows expected from continuing use of the asset and
from its disposal are discounted to their present value using a pre tax rate that reflects the current market
assessments of time value of money and the risks specific to the asset.
Reversal of impairment loss is recognized immediately as income in the Profit and Loss Account.
o) Inventories
Inventories are valued at lower of cost or net realizable value. Cost is ascertained on a moving weighted
average basis.
p) Employee Benefits
(i)
96
Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump sum payment to vested employees at retirement,
death while in employment or on termination of employment of an amount equivalent to 15 to 30
days salary payable for each completed year of service.Vesting occurs upon completion of five years
of service. The Company makes annual contributions to gratuity fund established as trust. The
Company accounts for the liability for gratuity benefits payable in future based on an independent
actuarial valuation as on the Balance Sheet date.
(ii)
Superannuation
The Company has two superannuation plans, a defined benefit plan and a defined contribution
plan. An eligible employee on April 1, 1996 could elect to be member of either plan.
Employees who are the members of the defined benefit superannuation plan are entitled to
benefits depending on the years of service and salary drawn. The monthly pension benefits after
retirement range from 0.75% to 2% of the annual basic salary for each year of service. The Company
and the said subsidiaries account for superannuation benefits payable in future under the plan
based on an independent actuarial valuation as on the Balance Sheet date.
With effect from April 1, 2003, this plan was amended and benefits earned by covered employees
have been protected as at March 31, 2003. Employees covered by this plan are prospectively entitled
to benefits computed on a basis that ensures that the annual cost of providing the pension benefits
would not exceed 15% of salary.
The Company maintains separate irrevocable trusts for employees covered and entitled to benefits.
The Company contributes up to 15% of the eligible employees’ salary to the trust every year. Such
contributions are recognized as an expense when incurred. The Company has no further obligation
beyond this contribution.
(iii) Bhavishya Kalyan Yojana (BKY)
Bhavishya Kalyan Yojana is an unfunded defined benefit plan. The benefits of the plan accrue to an
eligible employee at the time of death or permanent disablement, while in service, either as a result
of an injury or as certified by the appropriate authority. The monthly payment to dependents of the
deceased /disabled employee under the plan equals 50% of the salary drawn at the time of death or
accident or a specified amount, whichever is higher. The Company accounts for the liability for BKY
benefits payable in future based on an independent actuarial valuation as on the Balance Sheet
date.
(iv) Post-retirement Medicare Schem
Under this Scheme employees get medical benefits subject to certain limits of amount, periods
after retirement and types of benefits, depending on their grade and location at the time of
retirement.The Company accounts for the liability for post-retirement medical scheme based on an
independent actuarial valuation as on the Balance Sheet date.
(v)
Provident Fund
The eligible employees of the Company are entitled to receive benefits under the provident fund, a
defined contribution plan, in which both employees and the Company make monthly
contributions at a specified percentage of the covered employees’ salary (currently 12% of
employees’ salary). The provident fund contributions, as specified under the law, are paid to the
provident fund set up as irrevocable trust by the Company and pension amount is paid to Regional
Provident Fund Commissioner and the Central Provident Fund under the State Pension Scheme.The
contributions paid during the year are charged to Profit and Loss account.
(vi) Compensated absences
The Company provides for the encashment of leave or leave with pay subject to certain rules. The
employees are entitled to accumulate leave subject to certain limits, for future encashment. The
liability is provided based on number of days of unutilized leave at each balance sheet date on the
basis of an independent actuarial valuation as on the Balance Sheet date.
q) Taxation
Current income tax expense comprises taxes on income from operations in India and foreign tax
jurisdictions. Income tax payable in India is determined in accordance with the provisions of Income
Tax Act, 1961. Tax expense relating to overseas operations is determined in accordance with tax laws
applicable in countries where such operations are domiciled
Deferred tax expense or benefit is recognized on timing differences being the difference between
taxable income and accounting income that originate in one period and are capable of reversal in
one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates
and the tax laws that have been enacted or substantively enacted by the balance sheet date
Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are
recognized to the extent that there is virtual certainty that taxable income will be available to realize
these assets. All other deferred tax assets are recognized to the extent that there is reasonable
certainty that future taxable income will be available to realize these assets.
97
Eighteenth Annual Report 2011-12
Tata Technologies Limited
r)
Employee Stock Options
In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme
Guidelines, 1999 issued by Securities and Exchange Board of India (SEBI), the Company introduced
Employee Stock Option Plan 2001(TTESOP 2001) in 2000-01. As per the Plan, the options were
granted at fair value as determined by an independent valuer as on the date of the grant and hence
no compensation cost has been recognized.
s)
Earnings per share
The earnings considered in ascertaining the Company's earnings per share comprise the net profit
after tax and include the post-tax effect of any extra-ordinary items. The number of shares used in
computing basic earnings per share, is the weighted average number of shares outstanding during
the year. The number of shares used in computing diluted earnings per share comprises the shares
considered for deriving basic earnings per share and also number of equity shares that could have
been issued on the conversion of all dilutive potential equity shares.
t)
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of that asset. Borrowing costs are capitalized as
part of the cost of a qualifying asset when it is probable that they will result in future economic
benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are
recognized as an expense in the year in which they are incurred
u) Provisions, contingent liabilities and contingent assets
A provision is recognized when the Company has present obligation as a result of past event and its
probable that an outflow of resources will be required to settle the obligation, in respect of which
reliable estimate can be made. The provisions (excluding retirement benefits) are not discounted to
its present value and are determined based on best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect current
best estimates. Contingent liabilities are not recognized in the financial statements. A contingent
asset is neither recognized nor disclosed in the financial statements.
v) Financial Assets / Financial Liabilities :
Financial Assets :
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i)
to receive cash or another financial asset from another entity; or
(ii)
to exchange financial assets or financial liabilities with another entity under conditions that
are potentially favourable to the entity; or
(d)
a contract that will or may be settled in the entity's own equity instruments and is:
(i)
a non-derivative for which the entity is or may be obliged to receive a variable number of the
entity's own equity instruments; or
(ii)
a derivative that will or may be settled other than by the exchange of a fixed amount of cash
or another financial asset for a fixed number of the asset for a fixed number of the entity’s
own equity instruments. For this purpose the entity's own equity instruments do not
include instruments that are themselves contracts for the future receipt or delivery of the
entity's own equity instruments.
Financial Liabilities :
98
(a)
a contractual obligation:
(i)
to deliver cash or another financial asset to another entity; or
(ii)
to exchange financial assets or financial liabilities with another entity under conditions that
are potentially unfavourable to the entity; or
(b)
a contract that will or may be settled in the entity's own equity instruments and is:
(i)
a non-derivative for which the entity is or may be obliged to deliver a variable number of the
entity's own equity instruments; or
(ii)
a derivative that will or may be settled other than by the exchange of a fixed amount of cash
or another financial asset for a fixed number of the entity's own equity instruments. For this
purpose the entity's own equity instruments do not include instruments that are themselves
contracts for the future receipt or delivery of the entity's own equity instruments..
Notes forming part of Consolidated financial statements
NOTE -3
(Amount in ` Crore)
As at
Mar 31, 2012
Particulars
As at
Mar 31, 2011
SHARE CAPITAL
Authorised :
60,000,000 equity shares of Rs. 10/- each
(P.Y. 60,000,000 equity shares of Rs. 10/- each)
700,000 0.01% Cumulative Non-participative Compulsorily
convertible Preference Shares of Rs. 10/- each
(P.Y. 700,000 0.01% Cumulative Non-participative Compulsorily
convertible Preference Shares of Rs. 10/- each)
60.00
60.00
0.70
0.70
60.70
60.70
42.97
37.32
42.97
37.32
Issued, subscribed and fully paid :
42,970,138 euity shares of Rs. 10/- each
(P.Y. 37,315,255 equity shares of Rs. 10/- each)
(Refer Note 3 (iii))
Note 3(i)
Reconciliation of number of shares outstanding :
As at Mar 31, 2012
Particulars
As at Mar 31, 2011
No. of Shares
Amount in
` crore
No. of Shares
Amount in
` crore
37,315,255
35,125
5,619,758
42,970,138
37.32
0.04
5.61
42.97
37,244,591
70,664
37,315,255
37.24
0.08
37.32
Equity shares
Number of shares as at April 1, 2011
Add: Shares issued under ESOP scheme
Add: Issued under preferencial allotment
Number of shares as at March 31, 2012
Note 3(ii)
Shares in the Company held by each shareholder holding more than 5 percent shares
As at Mar 31, 2012
Particulars
As at Mar 31, 2011
No. of Shares
Amount in
` crore
No. of Shares
Amount in
` crore
30,300,600
3,746,505
34,047,105
70.52
8.72
79.24
30,300,600
30,300,600
81.20
81.20
Equity Shares
(a)
(b)
Tata Motors Limited
Alpha TC Holdings Pte Ltd.
Note 3(iii) Of the above 30,300,600 shares (P.Y. 30,300,600 shares) equity shares are held by holding
company (Tata Motors Limited)
Note 3(iv) 114,671 shares (as at March 31, 2012) of Rs.10 each were outstanding towards employee stock
options granted/available for grant.
99
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
Note - 4
(Amount in ` Crore)
RESERVES AND SURPLUS
As at
Mar 31, 2011
Particulars
(a) Securities Premium Account
[Note 4 (I)& (v)]
(b) Capital Reserve
[Note 4 (ii)]
Deductions
Additions
Translation
As at
Adjustment Mar 31, 2012
216.37
136.38
2.73
-
0.65
-
-
0.02
(17.73)
44.01
-
-
350.02
0.63
26.28
[Note 4 (iii)
34.83
14.00
-
-
48.83
(e) Surplus i.e. balance in statement
of Profit and Loss
[Note 4 (iv)
196.33
208.37
92.60
-
312.10
430.45
402.76
95.33
0.02
737.86
(c) Translation Reserves
(d) General Reserve
Note 4(i)
(Amount in ` Crore)
Changes in Securities Premium Account
2011-12
2010-11
Particulars
(a) Additions/deductions during the year
(b) Expenses for issuance of new shares
(c) Capital Reduction adjustments during
the year
(Refer Note 4 (v))
Note 4(ii)
Additions
Deductions
135.62
-
2.73
0.50
-
-
0.76
136.38
2.73
6.90
7.40
-
Additions
Change in Capital Reserve
Deductions
(Amount in ` Crore)
2011-12
2010-11
Particulars
Translation adjustment
Additions
Deductions
Additions
-
0.02
-
0.01
-
0.02
-
0.01
Note 4(iii) Changes in General Reserve :
Deductions
(Amount in ` Crore)
2011-12
2010-11
Particulars
Transferred from Profit and Loss Account
100
Additions
Deductions
14.00
-
10.00
-
14.00
-
10.00
-
Additions
Deductions
Notes forming part of Consolidated financial statements
Note 4(iv) Changes in Statement of Profit and Loss :
(Amount in ` Crore)
2010-11
2011-12
Particulars
(a)
(b)
(c)
(d)
(e)
(f )
Profit for the year
Final Dividend
Interim Dividend
Tax on Final Dividend
Tax on Interim Dividend
Transferred to General Reserve
Additions
Deductions
Additions
208.37
208.37
29.60
38.03
4.80
6.17
14.00
92.60
139.02
139.02
Deductions
18.64
26.09
3.02
4.33
10.00
62.08
Note 4(v)
During the prior year, based on the approval of Shareholders of the Company at the Extra-Ordinary General
Meeting held on March 5, 2010 and on the basis of Order of the High Court of Judicature at Mumbai vide its order
dated April 16, 2010, the Company had utilized balance in the securities premium account to the tune of Rs. 46.66
Crore towards one time charges/cost (including change in accounting policy for provision for doubtful debts)
incurred by the Company and its subsidiary companies. The amounts relating to the Company amounting to
Rs.17.31 crores had been adjusted to the Securities Premium Account. An amount of Rs.29.34 crores equivalent
to the total amount of adjustments relating to the subsidiaries had been identified and segregated from the
balance in the Securities Premium Account for adjustment on consolidation. Of this total adjustment made,
Rs.1.58 crores and Rs.16.58 crores related to provision for doubtful debts of the Company and its subsidiary
companies respectively on account of change in accounting with regard to provision for doubtful debts. During
the year ended March 31, 2012, the Company and its subsidiary companies have received amounts aggregating
to Rs. 0.01 Crore (Rs. 1.47 Crore for the year ended March 31, 2011) and Rs. 0.75 Crore (Rs. 5.43 Crore for the year
ended March 31, 2011) respectively against the balances for which the provision were made on account of
change in accounting policy. Consequently, such excess provisions for doubtful debts on account of the said
collections have been written back to the securities premium account.
101
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
Note 5
(Amount in ` Crore)
As at
Mar 31, 2012
Particulars
As at
Mar 31, 2011
LONG TERM BORROWINGS
(A)
Secured
a) Banks
(i)
Vehicle Loans [Secured by hypothecation of vehicles] ##
b) Others
(i)
Vehicle Loans [Secured by hypothecation of vehicles] ##
(ii) Long term maturity of finance lease obligations (Refer Note 5 (i))
#(Secured against fixed assets obtained under finance
arrangements)
(A)
Notes: #
Terms of repayment - Equated Quarterly Instalment
##
Terms of repayment - Equated Monthly Instalment
(B)
0.32
0.42
0.09
0.21
0.14
0.28
0.62
0.84
-
111.46
111.46
2.54
Unsecured
(i) Term Loans
- From Banks
ANZ Bank *
ING Bank **
ANZ Bank ***
(B)
Notes:
*
**
***
Note 5(i)
-
225.46
0.62
226.30
The loan of USD 25,000,000/- was taken in Feb2010. The same is repayable at the end of its tenure i.e.
Feb 2013.The loan carries interest rate at Libor+1.45% per year based on a 360 day year and calculated on the
actual number of days elapsed.
The loan of USD 25,000,000/- was taken in Feb2010. The same is repayable at the end of its tenure i.e. Feb
2013.The loan carries interest rate at Libor+1.45% per year based on a 360 day year and calculated on the
actual number of days elapsed.
The loan of GBP 1,000,000/- was taken in Mar2010. The same is repayable on quarterly basis.The loan carries
interest rate at Libor+1.25%
Long term maturity of finance lease obligations
(Amount in ` Crore)
Particulars
Total of Minimum lease payments
Not later than one year
Later than one year and not later than five years
Less: Interest
Present Value of Minimum lease payments
Not later than one year
Later than one year and not later than five years
The company has entered into finance lease arrangements for servers.
102
As at
Mar 31, 2012
As at
Mar 31, 2011
0.10
0.23
0.33
0.10
0.33
0.43
0.05
0.28
0.09
0.34
0.07
0.21
0.28
0.06
0.28
0.34
Notes forming part of Consolidated financial statements
Note 6
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
DEFERRED TAX ASSET / (LIABILITIES) (NET)
Deferred tax liabilities:
Depreciation
Others
Deferred tax assets:
Depreciation in excess of capital allowances
Provision for expenses u/s. 43B
Others
Deferred Tax Asset (Net)
8.34
0.10
8.44
7.86
0.10
7.96
1.72
2.95
5.59
10.26
1.82
1.50
8.04
7.01
16.55
8.59
(3.75)
5.57
1.82
8.59
8.59
The Components of deferred tax assets (DTA) / deferred tax liabilities (DTL)
referred above have been aggregated based on the nature of items across
various tax jurisdictions. For the purpose of Balance Sheet disclosure such
aggregation has not been made. The break up of the same is as follows:
Deferred tax liabilities :
Deferred tax assets:
Deferred Tax Asset (Net)
Note 7
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
7.76
7.76
6.17
6.17
LONG - TERM PROVISIONS
Provision for employee benefits (Refer Note 7 (i) & 7 (ii))
103
104
Actual Contribution and Benefit Payments
for year ended 31 March 2012
ii
Discount Rate
Expected Return on plan assets
Salary escalation
Medical cost inflation
Actuarial Assumptions
Plan assets at beginning of year
Actual return on plan assets
Actual Company contributions
Benefits paid
Plan assets at the end of year
Change in Fair Value of Assets during the year
ended March 31, 2012
DBO as at 31 March
Service cost for the year
Interest cost for the year
viii Effect of one percentage point change in
assumed Medical inflation rate
Debt securities
Balances with banks
vii The major categories of plan assets as
percentage of total plan assets
vi
v
Change in Defined Benefit Obligations (DBO)
during the year ended March 31, 2012
iv
Present Value of DBO at beginning of year
Current Service cost
Interest cost
Actuarial (gains)/ losses
Benefits paid
Present Value of DBO at the end of year
Net asset/(liability) recognised in balance sheet
as at March 31, 2012
Present Value of Defined Benefit Obligation
Fair value of plan assets
Net asset/(liability) recognised in balance sheet
iii
Actual benefit payments
Actual Contributions
Components of employer expense
Current Service cost
Interest cost
Expected return on plan assets
Actuarial Losses/(Gains)
Total expense / (income) recognised
in the Statement of Profit & Loss Account
i
8.50%
8.00%
2%-5%
N/A
12.24
1.68
(2.52)
11.40
12.12
1.34
0.92
2.51
(2.52)
14.37
14.37
11.40
(2.97)
74.00% 100.00%
26.00%
0.00%
8.50%
8.00%
5%
N/A
11.39
0.47
9.91
(1.39)
20.38
14.37
2.25
1.16
2.05
(1.39)
18.44
18.44
20.38
1.94
2.52
-
3.09
5.00
1.39
9.91
1.34
0.92
(0.88)
1.71
12.12
12.24
0.12
1.13
-
1.09
1.16
0.89
(0.94)
(0.02)
2010
99.73%
0.27%
8.50%
8.00%
2%-5%
N/A
12.27
1.10
(1.13)
12.24
11.06
1.16
0.89
0.14
(1.13)
12.12
Gratuity
2011
2.25
1.16
(1.25)
2.84
2012
100%
0%
8.50%
8.00%
3%-5%
N/A
12.61
0.79
(1.13)
12.27
11.08
1.14
0.89
(0.92)
(1.13)
11.06
11.06
12.27
1.21
1.13
-
0.32
1.14
0.89
(0.96)
(0.75)
2009
100.00%
0.00%
6.75%
8.00%
N/A
N/A
5.06
(0.25)
0.24
5.05
5.17
0.24
0.35
(0.15)
5.61
5.61
5.05
(0.56)
0.24
0.69
0.24
0.35
(0.41)
0.51
2012
6.75%
8.00%
N/A
N/A
4.77
0.43
0.28
(0.02)
5.47
4.87
0.26
0.33
(0.12)
(0.02)
5.32
5.32
5.47
0.15
0.02
0.28
0.04
0.26
0.33
(0.39)
(0.16)
2010
100.00% 99.16%
0.00% 0.84%
6.75%
8.00%
N/A
N/A
5.47
0.21
0.20
(0.82)
5.06
5.31
0.20
0.33
0.15
(0.82)
5.17
5.17
5.06
(0.11)
0.82
0.20
0.47
0.20
0.33
(0.41)
0.35
2011
Superannuation
100%
0%
6.75%
8.00%
N/A
N/A
4.50
0.22
0.31
(0.26)
4.77
4.36
0.27
0.33
0.17
(0.26)
4.87
4.87
4.77
(0.10)
0.26
0.31
0.54
0.27
0.33
(0.36)
0.30
2009
N/A
N/A
8.50%
N/A
5%
N/A
N/A
N/A
1.42
(1.42)
-
4.14
0.88
0.29
1.03
(1.42)
4.92
4.92
(4.92)
1.42
1.42
2.22
0.88
0.29
1.05
2012
Note 7 (i) : Defined benefits plans / long term compensated absences – as per actuarial valuations as on March 31, 2012
N/A
N/A
8.50%
N/A
2%-5%
N/A
N/A
N/A
1.87
(1.87)
-
4.21
0.60
0.28
0.94
(1.89)
4.14
4.14
(4.14)
1.89
1.87
1.82
0.60
0.28
0.94
2011
N/A
N/A
8.50%
N/A
2%-5%
N/A
N/A
N/A
1.55
(1.55)
-
4.93
0.64
0.35
(0.17)
(1.54)
4.21
4.21
(4.21)
1.54
1.55
0.82
0.64
0.35
(0.17)
2010
N/A
N/A
1.57
(1.57)
-
4.71
0.21
0.33
1.25
(1.57)
4.93
4.93
(4.93)
1.57
N/A
1.79
0.21
0.33
1.25
2009
N/A
N/A
8.50%
N/A
3%-5%
N/A
Compensated absences
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.09
(0.09)
-
2.04
0.19
0.17
(0.31)
(0.08)
2.01
2.01
(2.01)
0.08
0.09
0.05
0.19
0.17
(0.31)
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.04
(0.04)
-
1.42
0.17
0.12
0.37
(0.04)
2.04
2.04
(2.04)
0.04
0.04
0.66
0.17
0.12
0.37
2010
2012
2.02
0.08
0.16
2011
0.30
0.21
0.18
2010
2.17
0.17
0.13
One percentage point increase
in Medical inflation rate
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.11
(0.11)
-
2.01
0.08
0.17
(0.17)
(0.12)
1.97
1.97
(1.97)
0.12
0.11
0.08
0.08
0.17
(0.17)
2011
2009
1.50
0.30
0.20
N/A
N/A
8.50%
N/A
N/A
4.00%
N/A
N/A
0.03
(0.03)
-
1.96
0.28
0.17
(0.95)
(0.04)
1.42
1.42
(1.42)
0.04
0.03
(0.50)
0.28
0.17
(0.95)
2009
Post-retirement Medicare scheme
2012
N/A
N/A
8.5%
N/A
2%-5%
N/A
N/A
N/A
0.07
(0.07)
-
0.74
0.09
0.06
0.28
(0.06)
1.11
1.11
(1.11)
0.06
0.07
0.43
0.09
0.06
0.28
2011
N/A
N/A
0.05
(0.05)
-
0.72
0.10
0.06
(0.08)
(0.06)
0.74
0.74
(0.74)
0.06
0.05
0.08
0.10
0.06
(0.08)
2010
N/A
N/A
8.5%
N/A
2%-5%
N/A
BKY
N/A
N/A
8.5%
N/A
3%-5%
N/A
N/A
N/A
0.05
(0.05)
-
1.51
0.09
0.13
(0.96)
(0.06)
0.73
0.73
(0.73)
0.06
0.05
(0.74)
0.09
0.13
(0.96)
2009
2012
1.93
0.07
0.16
2011
0.28
0.18
0.16
2010
1.93
0.16
0.11
2009
1.35
0.27
0.15
One percentage point
decrease in Medical inflation rate
N/A
N/A
8.5%
N/A
5%
N/A
N/A
N/A
0.07
(0.07)
-
1.11
0.16
0.09
0.21
(0.07)
1.50
1.50
(1.50)
0.07
0.07
0.46
0.16
0.09
0.21
2012
(Amount in `Crore)
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
Note 7 (ii)
Defined contribution plans :
The Company’s contribution to defined contribution plan aggregated Rs. 13.15 crores (2010-11 Rs. 10.73 crores) for the
year ended March 31, 2012 has been recognised in the statement of Profit and Loss Account.
Notes :
(a) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for
returns over the entire life of the related obligation.
(b) The assumption of future salary increases, considered in actuarial valuation, takes into account of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.
(c) Also refer note 2 (p) for brief description of employee benefit schemes.
Note 8
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
25.44
24.52
25.44
24.52
55.96
48.89
55.96
48.89
81.40
73.41
SHORT TERM BORROWINGS FROM BANKS
(A) Secured
Loans repayable on demand
[Secured by hypothecation of book debts/accounts receivable and
movable fixed assets (excluding certain vehicle)]
(The loan of USD 5,000,000/- taken from Chase commercial Bank, The
same is repayable on call basis.The loan carries interest rate at Libor+1.75%)
(B) Unsecured
Loans repayable on demand
105
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
NOTE - 9
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
OTHER CURRENT LIABILITIES
(A)
(B)
Financials
(a) Interest accrued but not due on borrowings
(b) Current maturities of long term debt
(c) Current maturities of finance lease obligations (Refer Note 5(i))
(d) Unpaid dividends
Non Financials
(a) Income received in advance
(b) Statutory dues
(c) Advance and Progress payments
0.49
257.78
0.07
0.63
258.97
0.57
2.98
0.06
0.49
4.10
49.91
23.81
3.80
77.52
35.44
16.09
3.75
55.28
336.49
59.38
NOTE - 10
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
3.52
29.60
4.80
37.92
4.20
18.64
3.02
25.86
SHORT-TERM PROVISIONS
(a)
(b)
(c)
106
Provision for Employee benefits (Refer Note 7 (i) & 7 (ii))
Provision for Final Dividend
Provision for Tax on Dividend
107
Plant & Machinery and Equipments - Leased
Computers
Furniture and fixtures
Vehicles (Refer Note 11 (i))
Leasehold Improvements
(d)
(e)
(f)
(g)
(h)
-
3.25
17.51
56.17
0.67
29.38
Note 11 (ii)
Notes:
Note 11 (i)
16.54
29.34
4.55
1.94
2.37
16.50
0.08
3.86
0.04
-
Additions
9.20
8.74
-
1.07
0.32
5.07
-
2.28
-
-
Deductions
1.08
5.84
-
0.12
1.56
2.12
0.02
2.02
-
-
Translation
Adjustments
133.82
160.26
4.55
4.24
21.12
69.72
0.77
32.98
22.79
4.09
Cost as at
Mar 31,
2012
79.70
80.62
-
1.42
9.96
46.52
0.19
16.42
5.66
0.45
Accumulated
depreciation
amortisation
up to
Apr 1, 2011
9.06
12.65
0.34
0.82
2.06
6.57
0.10
1.77
0.95
0.04
Depreciation/
Amortisation
for the year
ended
Mar 31, 2012
8.98
8.58
-
0.97
0.34
5.00
-
2.27
-
-
Deductions
0.84
5.42
-
0.09
1.18
2.02
0.02
2.11
-
-
Translation
Adjustments
80.62
90.11
0.34
1.36
12.86
50.11
0.31
18.03
6.61
0.49
Accumulated
Depreciation
amortisation
up to Mar 31,
2012
53.22
70.15
4.21
2.88
8.26
19.61
0.46
14.95
16.18
3.60
Net Book
Value as at
Mar 31,
2012
Capital Commitment :
The estimated amount of contracts remaining to be executed on capital account, and not provided for is Rs. 4.58 crores as at March 31, 2012
(Year ended March 31, 2011 : Rs. 6.42 Crore).
53.22
-
1.83
7.56
9.65
0.48
12.96
17.09
3.65
Net Book
Value as at
Mar 31,
2011
(Amount in ` Crore)
Vehicles includes gross Rs.1.64 Crore (W.D.V. Rs. 1.00 Crore)acquired on loan, hypothecated with Tata Finance Ltd, Tata Motors Finance Limited,
ICICI Bank Ltd, and TATA Capital Ltd (as at March 31, 2011 Rs.1.51 Crore) (W.D.V Rs. 1.04 Crore))
125.40
Plant & Machinery and Equipments - Owned
(c)
22.75
Previous Year
Buildings
(b)
4.09
133.82
Leasehold Land
(a)
Cost as at
Apr 1, 2011
Total
TANGIBLE ASSETS
[A]
FIXED ASSETS
Note 11
Notes forming part of Consolidated financial statements
108
62.26
54.89
Software Licenses
Total
Previous Year
(b)
7.05
24.64
24.52
0.12
Additions
0.05
0.07
0.07
-
Deductions
0.37
2.42
2.41
0.01
Translation
Adjustments
62.26
89.25
89.04
0.21
Cost as at
Mar 31,
2012
26.58
36.73
36.71
0.02
Accumulated
depreciation
amortisation
up to
Apr 1, 2011
9.83
13.54
13.53
0.01
Depreciation/
Amortisation
for the year
ended
Mar 31, 2012
0.03
-
-
-
Deductions
0.35
2.37
2.37
-
Translation
Adjustments
36.73
52.64
52.61
0.03
Accumulated
Depreciation/
amortisation
up to
Mar 31, 2012
25.54
36.61
36.43
0.18
Net Book
Value as at
Mar 31,
2012
-
25.54
25.48
0.06
Net Book
Value as at
Mar 31,
2011
(Amount in ` Crore)
Note 12 (i) Capital Commitment :
The estimated amount of contracts remaining to be executed on capital account, and not provided for is Rs. 3.31 Crore as at March 31, 2012 (Year ended
March 31, 2011 : Rs. 10.42 Crore).
62.18
Copyrights
(a)
0.08
INTANGIBLE ASSETS
(Other than internally generated)
Cost as at
April 1, 2011
[B]
FIXED ASSETS
Note 12
Notes forming part of Consolidated financial statements
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
Note 13
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
NON-CURRENT INVESTMENTS (NON TRADE)
Other Investments (Quoted) *
i) Investment in Bonds
- 11% NCD of Tata Motors Finance Limited
ii) Investments in Mutual Fund
- Axis Fixed Term Plan - Series 21 (394 days)-Growth
- BSL Fixed Term Plan - Sr. ES - growth
- Reliance Fixed Horizon Fund - XXI - Sr 18-Growth
- Birla Sun Life Fixed Term Plan Series DU - Growth
- HDFC FMP 400 Days-Feb 2012-1 - Series XXI
- Tata FMP Series 39 Scheme-Growth
- ICICI FMP Series 62 - 396 Days Plan F Cum
- ICICI FMP Sr. 63 - 384 Days Plan A Cum- BSL Fixed Term Plan - Series EV-Growth
- Kotak FMP Series 80-Growth
- JP Morgan India - FMP - Series 6- Growth
* (Note: Market value of quoted investments Rs. 43.35 Crore( P.Y. Rs. Nil))
5.00
-
2.50
2.00
5.00
2.00
2.50
2.50
2.50
5.00
5.00
5.00
4.00
-
43.00
-
Note 14
(Amount in ` Crore)
Particulars
As at
Mar 31, 2012
As at
Mar 31, 2011
1.75
0.37
14.14
16.26
0.39
0.50
16.88
17.77
0.19
0.84
1.03
0.03
0.70
0.91
1.64
17.29
19.41
LONG - TERM LOANS AND ADVANCES
Unsecured (Considered Good)
(A) Financial
(a) Security Deposits
(b) Loans to employees #
(c) Loans to others
(B)
As at
Mar 31, 2011
Non Financial
(a) Capital Advances
(b) Prepaid Expenses
(c) Deposits with Government and others
# Note : Includes amount given to Managing Director Rs. 0.20 Crore (P.Y. Rs. 0.28 Crore)
109
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
Note 15
(Amount in ` Crore)
Particulars
CURRENT INVESTMENTS - OTHERS
a)
Investments in Mutual Fund (Unquoted)
Current Investments (At Cost or Fair value whichever is lower)
HDFC F R I F - STF - WP - Daily Dividend
Reliance Money Manager Fund - Institutional Option - DDR
Jpmorgan India Treasury Fund- Super Inst. Daily Div Plan- Reinvest
TATA Fixed Income Portfolio Fund Scheme B3 Reg Quarterly
ICICI Prudential Interval Fund Half Yearly Interval Plan - I Institutional
Dividend
Kotak FMP 6M Series 10 - Dividend
BSL Interval Income Fund-INSTL-Quarterly-Series 1-Dividend-Payout
BSL Qtly Interval - Series 4 - Dividend - Payout
Kotak Quarterly Interval Plan Series 4 - Dividend
IDFC Money Manager Fund - TP - Super Inst Plan C - DDR
TATA Floaters Fund - DDR
Birla Sun Life Savings Fund - Insti. - DDR
UTI-floating rate fund-short term plan-Institutional daily dividend plan Reinvestment
UTI Treasury Advantage Fund - IP DDR
TATA FMP Series 28 Scheme A Dividend
SBI SHDF Ultra Short Term - IP - DDR
Birla Short Term FMP Series 7 Dividend
IDBI Ultra Short Term Fund - DDR
BSL Short Term FMP Series 8 - Div - Payout
Religare FMP Series V - Plan F (91 days)- Dividend
TATA Fixed Income Portfolio Fund Scheme B2 Regular Monthly Dividend
IDFC Savings Advantage Fund - Plan A - DDR
UTI Fixed Income Interval Fund-Monthly Interval Plan-II-Institutional
Dividend Plan-Payout
JP Morgan India Fixed Maturity Plan 95D Series 1 - Dividend Plan - Payout
IDFC Fixed Maturity Monthly Series - 30 Dividend
SBI Debt Fund Series - 90 Days - 42 - Dividend
IDBI Liquid Fund - DDR
DWS Money Plus Fund - Institutional DDR
Religare Credit Opportunities Fund DDR
Principal Cash Management Fund - DDR
Baroda Pioneer Treasury Advantage Fund IP Growth
b)
Investments in Mutual Fund (Quoted) *
DWS Fixed Term Series 87 - Div. Payout
JM Fixed Maturity Fund Series XX Plan A
TATA Fixed Maurity Plan Series 36 Scheme B
UTI Fixed Term Income Fund - Series X - VII - Growth
BSL Fixed Term Plan - Series EI- Growth
JP Fixed Maturity Plan - Sr 8 -Growth
DSP FMP Series 23 - 12M-Growth
As at
Mar 31, 2012
As at
Mar 31, 2011
-
2.97
9.90
2.07
4.13
-
2.06
1.00
0.50
1.98
0.90
9.09
10.90
2.02
-
1.03
6.06
3.00
9.95
1.00
2.52
1.00
2.00
3.02
4.02
35.57
50.00
20.00
105.57
2.00
1.70
5.00
1.00
4.00
1.25
96.07
5.50
2.00
2.00
5.00
5.00
20.00
2.00
41.50
-
147.07
96.07
* (Note: Market value of quoted investments Rs. 41.93 Crore( P.Y. Nil))
110
Notes forming part of Consolidated financial statements
Note 16
(Amount in ` Crore)
Particulars
TRADE RECEIVABLES
(Unsecured, considered good unless otherwise stated)
(a) Trade receivables due for a period exceeding six months
Considered good
Considered doubtful
Less : Allowances for doubtful debts
(b) Other Trade Receivables
Considered good
Considered doubtful
Less : Allowances for doubtful debts
As at
Mar 31, 2012
As at
Mar 31, 2011
3.80
15.47
0.91
12.90
19.27
15.47
3.80
13.81
12.90
0.91
286.22
1.24
287.46
1.24
286.22
230.39
0.64
231.03
0.64
230.39
290.02
231.30
Note 17
(Amount in ` Crore)
Particulars
CASH AND BANK BALANCES
(A) Cash and Cash Equivalents
(a) Cash on hand
(b) Cheques, drafts on hand
(c) Current Account with banks (Refer Note (i))
(d) Bank Deposits less than 3 months maturity
(B) Other Bank Balances
(a) Earmarked balance with banks
(b) Bank Deposits with more than three months but less than
12 months maturity
(c) Pledged/lien with Banks
Note:
(i) In foreign currencies
As at
Mar 31, 2012
As at
Mar 31, 2011
0.04
2.95
173.74
115.20
0.03
32.68
94.68
30.00
0.64
0.49
49.87
0.39
15.08
0.37
342.83
173.33
37.56
47.20
Note 18
(Amount in ` Crore)
Particulars
OTHER CURRENT ASSETS
(A) Financials
(a) Interest Accrued on deposits and investments
(b) Bills of Exchange
(c) Loans to Others
(d) Unbilled Revenue
As at
Mar 31, 2012
1.71
36.59
9.66
47.96
As at
Mar 31, 2011
0.59
14.35
5.03
19.97
111
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
OTHER CURRENT ASSETS Note 18 continued...
(Amount in ` Crore)
Particulars
(B) Non Financials
(a) Advances to suppliers and contractors
(b) VAT, other taxes recoverable, statutory deposits
(c) Prepaid expenses
(d) Unamortized Premium on forward contract
As at
Mar 31, 2012
As at
Mar 31, 2011
9.05
1.95
18.59
0.66
30.25
5.27
0.45
17.09
22.81
78.21
42.78
Note 19
(Amount in ` Crore)
Particulars
SHORT TERM LOANS AND ADVANCES
Unsecured (Considered Good)
(A) Financials
(a) Deposit with Financial Companies
(b) Inter Corporate Deposits (Refer Note 20(v))
(c) Loans and advances to related parties (Refer Note 20 (v))
(d) Security Deposits
(e) Loans and Advances employees
(Includes amount given to Managing Director Rs. 0.13 crores
(P.Y. Rs. 0.12 crores))
Less : Allowances for doubtful loans and advances
(B) Non Financials
Deposits with Government and others
As at
Mar 31, 2012
As at
Mar 31, 2011
10.00
30.00
2.26
1.82
5.53
2.01
1.40
4.52
0.04
49.57
0.04
7.89
0.03
0.01
49.60
7.90
2011-12
2010-2011
Note 20
Note 20 (i)Earnings Per Share
(a) Profit after tax
(b) The weighted average number of Ordinary
Shares for Basic EPS
(c) The nominal value per Ordinary Share
(d) Earnings Per Share (Basic)
(e) Profit after tax for Basic & Diluted EPS
(f ) The weighted average number of Ordinary
Shares for Basic EPS
(g) Add: Adjustment for Employee Stock Options
(Refer Note 3 (iv))
(h) The weighted average number of Ordinary
Shares for Diluted EPS
(i) Earnings Per Shares (Diluted)
112
` Crore
208.37
139.02
Nos.
`
`
`Crore
42,279,184
10.00
49.28
208.37
37,273,672
10.00
37.30
139.02
Nos.
42,279,184
37,273,672
Nos.
114,671
149,796
Nos.
`
42,393,855
49.15
37,423,468
37.15
Notes forming part of Consolidated financial statements
Note 20 (ii)Contingent Liabilities
(Amount in ` Crore)
As at
March 31, 2012
Particulars
(a)
(b)
(c)
(d)
Income Tax demands disputed in appeals
Sales Tax demands disputed in appeals
Service Tax demands disputed in appeals
Corporate Guarantees issued to Bank in respect of loan
taken by subsidiary companies
As at
March 31, 2011
1.98
21.81
3.39
2.19
0.53
3.14
257.35
228.14
Note 20 (iii)Movement in Goodwill
(Amount in ` Crore)
Particulars
As at
March 31, 2012
As at
March 31, 2011
344.57
53.33
397.90
328.88
(0.02)
15.71
344.57
As at the beginning of the year
Deductions / Adjustments during the period
Translation difference
As at the end of the year
Note 20 (iv) Segment Reporting
Primary Segment
Segment reporting is made on the basis of geographical location of the customer.
(Amount in ` Crore)
Particulars
Revenues
Identifiable operating expenses
Allocated expenses
Segmental operating income
Unallocable expenses
Other Income
Net profit before taxes
Taxes
Net profit after taxes
USA
India
UK
Rest of
Europe
Rest of the
World
549.24
460.10
488.29
414.13
4.68
2.01
56.27
43.96
489.21
387.83
307.47
238.44
14.39
7.82
167.35
141.57
457.22
279.00
311.67
222.71
41.75
1.12
103.80
55.17
127.96
112.70
100.34
118.07
23.55
0.41
4.07
(5.78)
18.98
16.21
12.44
15.49
1.57
0.16
4.97
0.55
Total
1,642.61
1,255.84
1,220.21
1,008.84
85.94
11.52
336.46
235.47
88.74
67.78
24.11
12.22
271.83
179.91
63.46
40.89
208.37
139.02
Fixed assets used in the Company’s business or liabilities contracted have not been identified to any of
the reported segments, as fixed assets and services are used interchangeably by reported segments.
Secondary segment
The complete operations of the Company have been treated as a single segment “Information
Technology Services”.
Previous year figures have been shown in italic.
113
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Additional information to the Consolidated Financial Statements
Note 20 (v) Related Party Disclosures for the year ended March 31, 2012
a) Related party and their relationship
1
Parent Company
2
Fellow subsidiaries
Tata Motors Limited
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
114
TAL Manufacturing Solutions Ltd.
TML Driveline Ltd.
Sheba Properties Ltd.
Concorde Motors (India) Ltd.
Tata Daewoo Commercial Vehicle Co.Ltd.
Tata Motors Insurance Broking & Advisory Services Ltd.
Tata Motors European Technical Centre Plc.
Tata Motors Finance Limited
Tata Marcopolo Motors Ltd.
Tata Motors (Thailand) Ltd.
TML Holdings Pte Ltd., Singapore
TML Distribution Company Limited
Tata Hispano Motors Carrocera S.A.
PT Tata Motors Indonesia (incorporated on December
29, 2011)
Tata Motors (SA) (Proprietory) Limited
Miljobil Grenland AS
Jaguar Land Rover PLC (name changed from
JaguarLandRover Limited with effect from April 6,
2011)
Jaguar Cars Ltd
Jaguar Cars Overseas Holdings Ltd
Jaguar Land Rover Austria GmbH
Jaguar Belux NV
Jaguar Land Rover Japan Ltd.
Jaguar cars South Africa (pty) Ltd
Jaguar Italia SPA (merged into Land Rover Italia w.e.f.
December 31, 2011)
Jaguar Cars Exports Ltd
The Daimler Motor Company Ltd
The Jaguar Collection Ltd
Daimler Transport Vehicles Ltd
S.S. Cars Ltd
The Lanchester Motors Company Ltd
Jaguar Hispania Sociedad
Jaguar Land Rover Deutschland (name changed from
Jaguar Deutschland GmbH w.e.f November 28, 2011)
Land Rover
Land Rover Group Ltd
Jaguar Land Rover North America LLC
Land Rover Belux S.A./N.V
Land Rover Ireland Ltd
Jaguar Land Rover Nederland BV
Jaguar Land Rover Portugal - Veiculos e Pecas LDA
Jaguar Land Rover Australia Pty Ltd.
Additional information to the Consolidated Financial Statements
Note 20 (v) Continued
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
3
Joint Venture
4
Associates of Parent Company
5
Key Management Personnel
6
Key Management Personnel in
subsidiary companies & Joint Venture
Land Rover Exports Ltd
Jaguar Land Rover Italia SpA (name changed from
Land Rover Italia SpA w.e.f December 31, 2011)
Land Rover Espana SL
Land Rover Deutschland GmbH (merged into
Jaguar Deutschland w.e.f. November 28, 2011)
Jaguar Land Rover Korea Company Ltd
Jaguar Land Rover Automotive Trading (Shanghai)
Company Ltd.
Jaguar Land Rover Canada ULC
Jaguar Land Rover France, SAS
Jaguar Land Rover (South Africa) (Pty) Ltd.
Jaguar Land Rover Brazil LLC
Limited Liability Company "Jaguar Land Rover"
(Russia)
Land Rover Parts Limited
Land Rover Parts US LLC (dissolved w.e.f September
30, 2011)
Jaguar Land Rover (South Africa) Holdings Ltd.
(incorporated on September 9, 2011)
Tata Hispano Motors Carrosseries Maghreb
Tata Daewoo Commercial Vehicle Sales and
Ditsribution Co. Ltd.
Tata Precision Industries Pte. Ltd.
Tata Engineering Services Pte Ltd.
Trilix S.r.l.
TATA HAL Technologies Limited
1
2
3
4
5
6
7
8
9
Tata Cummins Ltd
Tata Precision Industries (India) Ltd.
Fiat India Automobiles Ltd.
Spark44 (JV) Ltd. (w.e.f. February 15, 2011)
Jaguar Cars Finance Ltd.
Automobile Corporation of Goa Ltd
Nita Co Ltd
Telco Construction Equipment Co.Ltd.
Tata AutoComp Systems Ltd
Mr. P. R. McGoldrick
1
2
3
4
5
Mr. Warren K Harris
Mr. Fernando Oviedo
Mr. Nick Sale
Mr. Ramesh Indhewat
Mr. Lokesh Shrivastava
115
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Additional information to the Consolidated Financial Statements
Note 20 (v) Related Party Disclosures for the year ended March 31, 2012
b) Transactions with related parties
A statement of transactions with related parties is attached here with.
Particulars
Parent
Company
Fellow
subsidiaries
Joint
Venture
Key
Management
Personnel
Sale of goods(inclusive of sales tax)
63.15
(32.26)
-
0.55
(0.29)
-
Services received
1.64
(-0.00)
2.60
(-)
0.30
(1.35)
-
Services rendered
338.05
(268.54)
414.62
(235.80)
0.18
(0.01)
-
Finance placed (including loans, equity & ICD)
461.40
(271.00)
25.01
(-)
-
-
Finance received back (including loans,equity & ICD)
459.40
(326.00)
-
-
-
-1.92
(-5.53)
(0.78)
-
-
-
-
-
-
8.41
(6.73)
18.46
(21.87)
113.23
(61.23)
2.27
(0.15)
-
0.18
(0.45)
1.39
(-0.00)
(0.35)
0.20
(0.20)
2.00
(-)
25.69
-
(4.32)
-
(-)
(0.03)
(0.00)
-
-
Interest/Dividend paid/(received)(net)
Remuneration
Amount receivable
Amount payable
Amount receivable (in respect of loans, Equity & ICD)
Amount payable (in respect of loans, Equity & ICD)
Previous year's figures are shown in the brackets
Disclosure of material transactions:
Services received:
Tata Motors Ltd. Rs. 1.64 crores (March 31, 2011 Rs. 0.0007 crores)
Tata Motors European Technical Centre Rs. 2.60 crores (March 31, 2011 Rs. Nil)
Tata HAL Technologies Ltd. Rs. 0.30 crores (March 31, 2011 Rs. 1.35 crores)
Services rendered:
Tata Motors Limited: Rs. 386.30 crores (March 31, 2011 Rs. 268.54 crores)
JLR Rs. 365.95 crores (March 31, 2011 Rs.201.46 crores)
Interest Received:
Tata Motors Limited: Rs. 1.92 crores (March 31, 2011 Rs. 1.04 crores)
Tata Motors Finance Limited Rs. 0.78 crores (March 31, 2011 Rs. 0.25 crores)
116
(Amount in ` Crore)
Additional information to the Consolidated Financial Statements
Note 20 (vi) The Company has a joint venture with Hindustan Aeronautics Ltd., TATA HAL Technologies Ltd (THTL) for
providing engineering and design solutions and services in the domain of aerostructures for aerospace
industry. The Company has an investment of Rs. 4.32 crores as at March 31, 2012, representing 50%
shareholding in THTL. The proportionate share of assets and liabilities as on March 31, 2012 and income
and expenditure for the year 2011-12 of THTL are given below.
(Amount in ` Crore)
As on
31 March
2012
(Audited)
As on
31 March
2011
(Audited)
(2.95)
(2.95)
(2.15)
(2.15)
NON-CURRENT LIABILITIES
0.06
0.06
CURRENT LIABILITIES
0.28
0.37
(2.61)
(1.72)
0.57
0.50
1.07
0.70
0.35
1.05
0.34
0.27
0.03
0.00
0.64
0.48
1.01
0.05
0.01
1.55
1.71
2.60
Particulars
RESERVES AND SURPLUS
Profit & Loss
NON-CURRENT ASSETS
Net Block (including CWIP)
Long Term Loans and Advances
CURRENT ASSETS
Trade Receivables
Cash and Cash Equivalents
Short Term loans and advances
Other Current Assets
Particulars
2011-12
(Audited)
2010-11
(Audited)
INCOME
Service Income
Other income
EXPENDITURE
Cost of Traded Items & Services
Salary & other general expenses
Depreciation
2.48
0.07
2.55
1.54
0.14
1.68
0.44
2.66
0.24
3.34
1.83
0.17
2.00
Note 20 (vii) The Revised Schedule VI has become effective from April 1, 2011 for the preparation of Financial
Statements. This has significantly impacted the disclosure and presentation made in the Financial
Statements. Previous Year's figures have been regrouped/reclassified wherever necessary to correspond
with the current year's classifications / disclosures.
117
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
NOTE - A
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
REVENUE FROM OPERATIONS
(a)
(b)
(c)
Sale of Products
Sale of Services
Commission Income
436.38
1,196.78
9.45
367.46
881.86
6.51
1642.61
1255.83
(Amount in ` Crore)
NOTE - B
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
OTHER INCOME
(a)
(b)
(c)
(d)
(e)
Interest income-Others
Interest income-Long Term Investments
Dividend income - Other Current Investments
Foreign Currency Gain
Other non-operating income
6.73
0.34
16.47
0.24
0.56
9.32
1.15
1.75
24.34
12.22
(Amount in ` Crore)
NOTE - C
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
COST OF TRADED PRODUCTS
(a)
(b)
Purchase of Products
Change in Stock in Trade
314.80
0.72
261.70
4.57
315.52
266.27
NOTE - D
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
CONSULTANCY FEES, SOFTWARES AND OTHERS
(a)
(b)
(c)
(d)
118
Outsourcing Charges
Software-internal use
Professional Fees
Training Costs
196.58
4.39
22.36
0.42
128.57
2.86
17.70
1.89
223.75
151.02
Notes forming part of Consolidated financial statements
NOTE - E
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
EMPLOYEE BENEFIT EXPENSE
(a)
(b)
(c)
(d)
(e)
Salaries and Wages
Contribution to Provident Fund
Contribution to Superannuation Scheme
Contribution to Gratuity Fund
Staff welfare Expenses
670.33
9.58
4.26
5.01
10.49
525.31
7.61
3.43
3.12
7.40
699.67
546.87
NOTE - F
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
1.53
5.70
2.37
5.00
7.23
7.37
FINANCE COSTS
Interest Expense
- Interest on Short Term Borrowings
- Interest on Long Term Borrowings
NOTE - G
(Amount in ` Crore)
Particulars
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
3.22
0.76
2.45
12.85
1.51
0.01
2.79
2.33
0.45
0.83
8.56
42.01
3.14
1.12
1.55
4.40
4.16
0.42
8.59
12.13
0.85
2.26
0.01
6.37
2.00
0.22
1.75
9.69
1.01
0.01
2.01
1.50
0.02
0.88
6.50
35.47
3.59
0.32
1.22
1.89
2.47
0.38
2.29
3.32
9.90
0.38
5.49
5.44
122.77
97.75
OTHER EXPENSES
(a)
(b)
(c)
(d)
(e)
(f )
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)
(u)
(v)
(w)
Repairs & Maintenance
-Buildings
- Plant & Machinery
- Others
Rent*
Rates and Taxes
Provision for Wealth Tax
Insurance
Overseas Marketing Expenses
Advertisement and Publicity
Business Promotion Expenses
Office Expenses
Travelling & Conveyance
Power & Fuel
Water Charges
Auditors Remuneration**
Staff Training and Seminar Expenses
Staff Recruitment Expenses
Commision to Others
Foreign Currency Loss
AMC charges
Communication Expenses
Bad Debts written off
Allowances for doubtful debts
Loss on Sale of Investments
Miscellaneous Expenses
119
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Notes forming part of Consolidated financial statements
*Obiligations under operating lease
Obligations towards non-cancellable lease
Lease Obligations
Dues not later than one year
Due later than one year but not later than five years
Later than five years
Lease payments recognised in the statement of profit
and loss for the year
(Amount in ` Crore)
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
12.31
22.96
9.59
17.24
35.27
12.85
26.83
1.22
9.69
The Company has entered into operating lease arrangements for office premises.This includes lease
obligations on account of a lease arrangements for premises in Thane entered during the year which has no
impact on Profit and Loss Account for the current year.
**Auditors' Remuneration (Excluding Service tax)
Particulars
For Holding Company
(i)
For services as auditors, including quarterly audits
(ii)
For Tax Audit
(iii) For other services
(iv) Reimbursement of out-of-pocket expenses
For Subsidiaries & Joint venture
(i)
For services as auditors, including quarterly reviews
(ii)
For Tax Audit
(iii) For Other services
(iv) Reimbursement of out-of-pocket expenses
120
(Amount in ` Crore)
Year ended
Mar 31, 2012
Year ended
Mar 31, 2011
0.30
0.04
0.01
0.01
0.36
0.25
0.03
0.01
0.29
1.12
0.06
0.01
1.19
0.87
0.05
0.01
0.93
121
Tata Technologies Pte Limited
Tata Technologies (Thailand)
Limited
INCAT International Plc
Tata Technologies Europe
Limited
Tata Technologies Inc
Tata Technologies (Canada) Inc.
Tata Technologies de Mexico,
S.A. de C.V.
INCAT GmbH
1
2
3
4
5
6
7
8
*
*
*
*
*
*
*
*
March 31, 2012
March 31, 2012
March 31, 2012
March 31, 2012
March 31, 2012
March 31, 2012
March 31, 2012
March 31, 2012
Financial year of
the subsidiary
ended on
1,640 ordinary shares
of EURO 1 each
Fixed Capital of 50,000
share of no par value.
Variable Capital of
1713465 share of no
par value
1 share of no par value
1,50,000 common
stock - class A and
8,85,500 common
stock-class B, with no
par value
10,000 Ordinary shares
of GBP 1 each fully paid
24,275,000 Ordinary
shares of Penny 1 each
fully paid
705,341 ordinary shares
at 50 Baht each
86,463,759 Ordinary
shares no par value
Number and face value
100.00
99.24
99.24
99.24
100.00
100.00
100.00
100.00
Shares of the subsidiary held by the
Company directly or through subsidiary
company on March 31, 2012
* By virtue of Section (4) (1) ( C) of the Companies Act, 1956, These are subsidiaries of the Company.
Name of the subsidiary
Sr.
No.
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Samrat Gupta
Chief Financial Officer
Anubhav Kapoor
Company Secretary
R Gopalakrishnan
Director
P P Kadle
Director
Date: May 8, 2012
Place: Mumbai
C Ramakrishnan
Director
P R McGoldrick
Managing Director
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
S Ramadorai
Chairman
For and on behalf of the Board
0.54
0.06
7.86
10.34
38.35
(0.35)
2.46
24.70
` Crore
` Crore
` Crore
Nil
dealt with in the
accounts of the
Company for the
year ended 31st
March, 2012
not dealt with in
the accounts of the
Company for the
year ended 31st
March, 2012
(4.64)
0.67
(4.22)
54.02
31.09
2.41
(2.77)
33.76
` Crore
not dealt with in
accounts of the
Company for the
year ended 31st
March, 2012
Net aggregate amount of profits / (losses)
for previous financial years of the subsidiary,
since it became a subsidiary so far as they
concern members of the Company
dealt with in the
accounts of the
Company for the
year ended 31st
March, 2012
Net aggregate amount of profits / (losses)
of the subsidiary for the financial year of
the subsidiary so far as they concern
members of the Company
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies
122
Tata Technologies (Canada) Inc.
Tata Technologies de Mexico, S.A. de C.V.
Tata Technologies Europe Limited
INCAT GmbH
Tata Technologies (Thailand) Limited
TATA Technologies Pte Ltd.
3
4
5
6
7
8
Singapore
Thailand
Germany
UK
Mexico
Canada
USA
U.K.
Country
SGD
BAHT
EURO
GBP
USD
USD
USD
GBP
Reporting
Currency
40.52
1.65
67.92
81.52
50.87
50.87
50.87
81.52
Exchange
Rate
355.94
5.82
1.11
0.08
0.79
0.01
227.36
1.98
Capital
352.36
(1.40)
14.28
80.20
2.87
3.09
(417.20)
37.96
Reserves
721.16
6.05
15.75
286.15
8.53
14.76
185.09
54.68
Total
Assets
12.86
1.63
0.35
206.04
4.86
11.67
375.93
14.74
-
-
-
-
-
-
-
-
64.03
10.68
0.58
597.69
12.67
14.50
563.32
-
24.97
2.46
0.54
50.04
0.10
7.16
16.89
(0.35)
0.28
-
-
11.86
0.03
(0.70)
7.03
-
24.70
2.46
0.54
38.18
0.06
7.86
9.86
(0.35)
Investments
Other than
Provision Profit
Profit
Total
Investment Turnover Before
for
After
Liabilities
in
Taxation Taxation Taxation
Subsidiaries
-
-
-
-
-
-
-
-
Proposed
Dividend
The Ministry of Corporate Affairs vide its circular dated February 08, 2011 has granted an approval for exemption from attaching the accounts of subsidiary companies to the accounts of the
holding company, subject to fulfillment of certain conditions. Accordingly the said documents are not being attached with the Balance Sheet of the Company.
Tata Technologies Inc
2
Notes:
INCAT International Plc
Name of Subsidiary Company
1.
S.
No.
(Amount in ` Crore)
Statement pursuant to exemption received under section 212(8) of the Companies Act, 1956 relating to subsidiary companies
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Frequently Asked Questions by Investors:
1.
Procedure for notifying the change in address
The investor must send a request letter to TSR Darashaw Ltd (TSRDL), mentioning the new address and
the pin code along with all the folio numbers, duly signed by the first shareholder, as per the specimen
signature registered with TSRDL. TSRDL will then advise about the documents to be submitted for
registering the address change.
A computerized acknowledgement will be sent to the investor’s new address confirming the updation of
the change in the records.
In case of dematerialized holdings, the Investor must write to his Depository Participant immediately and
ensure that he or she receives a confirmation of them having noted the Investors’ new address.
2.
Procedure for notifying change of name
Investors notifying the change of name should follow the following procedure:
A.
Individuals
Please submit the following to TSRDL:
B.
1.
Consequent to marriage/divorce/attaining majority, please send an attested copy of the marriage
certificate/divorce decree/birth certificate or school leaving certificate as the case may be, duly
attested by a Notary Public/Bank Manager under his official seal stating full name, address &
registration no. (in case of Notary Public) and full name, designation & name and address of bank (in
case of Bank Manager).
2.
Prescribed form, available at the office of TSRDL (can also be downloaded from TSRDL website), duly
completed and signed by the holder(s). The signature of the investor whose name is to be changed
should be attested by his/her Bank Manager under his official seal stating his full name, designation
and name and address of Bank. The other holders, if any, should sign as per the specimen
signature(s) registered with TSRDL.
3.
Self attested copy of the PAN card of the holder(s).
4.
Share Certificates in original for necessary endorsements thereon.
Corporate
For securities held in physical form, please write to TSRDL enclosing an original or certified copy of the
Certificate of Incorporation on Change of Name along with the Share Certificates in original for the
necessary endorsements thereon.
3.
What should one do in case he does not receive the dividend?
The investor should write to TSRDL on plain paper, mentioning his/her Folio number (all Folio Numbers in
case more than one folio), duly signed by the investor (by all shareholders in case of joint shareholding),
as per the specimen signatures recorded with TSRDL. TSRDL will then verify the status of the
dividend. In case the Dividend Warrant has been returned to TSRDL or the dividend warrant has not
been duly sent, the warrant will be sent to the investors address as recorded with TSRDL provided the
amount has not been transferred to the Investor Education and Protection Fund. In case there is a
change in address to be registered, please refer to instructions under the “Procedure for change of
address”.
4.
Procedure for renewing a time barred dividend warrant/cheque/dividend
The investor should send the outdated instrument to TSRDL to enable issue of a fresh instrument. The
fresh instrument will be mailed to the address as recorded with TSRDL, if the amount reflects an
outstanding status in the records of TSRDL, provided the amount has not been transferred to the Investor
Education and Protection Fund. In case there is a change in address to be registered, please refer to
instruction under“Procedure for change of address”.
123
Eighteenth Annual Report 2011-12
Tata Technologies Limited
5.
Procedure for transfer of Shares
Transferee(s) need to send the Share Certificate(s) along with the share transfer deed in the prescribed
Form 7B, duly filled in, executed and affixed with share transfer stamps, to TSRDL. For Shares, stamp duty @ 0.25%
of the consideration of the transfer should be affixed on the transfer deed at the specified place on
the back of the form. In case the number of stamps to be affixed exceeds the space provided in the
form, extra sheets may be attached to the form on which the stamps can be affixed. Share transfer stamps are
available at the offices of the Government Treasury. The transfer deed can also be franked instead of
affixing the share transfer stamps. The prescribed Form 7B can be obtained from any Stock Exchange at Re 1/per form. For securities held in electronic form, the Investor must contact his/her Depository
Participant.
6.
Procedure for transmission of Shares
For transmission of securities in case of legal heir/executor in respect of the sole shareholder who is
deceased, please submit the following to TSRDL:
1.
An attested copy of the death certificate of the deceased holder along with attested copy of
Succession Certificate or Probate of Will or Letter of Administration obtained in
respect of the sole holding. Attestation on the above documents should be done by a Notary Public
under his official seal stating full name, address & registration no.
2.
Relevant certificates for the securities to be transmitted.
3.
Prescribed transmission form available with TSRDL duly completed and signed by the legal heir(s)/
executor(s) whose signature(s) should be verified by his/their Bank Manager under his official seal
stating his full name, designation with
name & address of bank.
4.
Self certified copy of the PAN Card of the legal heir(s)/executor(s). In case the Investor does not have
any such form of Legal Representation, he/she are requested to write to TSRDL for further advice.
For securities held in electronic form, the Investor must contact his/her Depository Participant.
7.
Procedure for obtaining duplicate Share Certificate(s) in case of loss/misplacement of original Share
Certificate(s)
The shareholder must immediately inform TSRDL by sending a letter regarding loss of certificates, giving details
of folio number and distinctive numbers, duly signed by the first holder as per the specimen signature
registered with TSRDL. It is advisable to lodge a complaint with the local Police Station.The Investor must send to
TSRDL, an acknowledged copy of the Complaint/FIR for advice on the further course of action.
The investor should state:
8.
●
Name of the Company in which he/she holds securities.
●
The full name and address, as recorded with TSRDL.
●
The distinctive number(s) of the certificate(s) that is/are missing.
Procedure for notifying change in bank account details
The investor must send a request letter to TSR Darashaw Limited, mentioning the New Account number which is
to be notified, duly signed by the shareholder (by all shareholders in case of joint shareholding), as per the
specimen signatures recorded with TSRDL. The shareholder must also attach a copy of the passbook with the
changed bank account details, duly attested by the Bank Manager.
9.
Procedure for splitting or consolidation of Share Certificates
The shareholder must send a request letter to TSR Darashaw Limited along with the Share Certificates
(*provided they are under the same folio in case of consolidation), duly signed by the shareholder (by all
shareholders in case of joint shareholding), as per the specimen signature recorded with TSRDL. The Share
Certificates, after splitting or consolidation, will be sent by TSRDL to the shareholders at their registered address.
*In case of consolidation of Share Certificates having different Folios, please follow the procedure for
consolidation of folios to facilitate consolidation of Share Certificate.
124
10.
Procedure for amalgamation/consolidation of Folios
In case the shareholder has more than one folio registered with same address and identical names which are in
same order, the shareholder must send a request letter to TSR Darashaw Limited along with the certificates
pertaining to the folio having the smaller holdings duly signed by the shareholder (by all shareholders in case of
joint shareholding), as per the specimen signature recorded with TSRDL. Do not send the certificates pertaining
to the larger holdings, in which account the multiple folios are being amalgamated. The prescribed form for
amalgamation can be obtained from TSRDL or downloaded from their website. For securities held in electronic
form, the Investor must contact his/her Depository Participant.
11.
Procedure for “Nomination” for shares
Shareholders who hold the shares singly in physical form and wish to make or change the nomination in respect
of the shares held by them as permitted under section 109A of the Act, may submit an application to TSR
Darashaw Limited (TSRDL) in the prescribed Form 2B.The said form can be obtained from TSRDL or downloaded
from their website.
For securities held in elec tronic form, the Investor must contac t his/her Depositor y
Participant.
12.
Procedure for transposition/change in order of name for holdings
The request for change in the order of names of registered holders should be made in the prescribed
Transposition form available at the offices of TSRDL (can also be downloaded from TSRDL website).The form is to
be signed by all the joint holders as per the specimen signature recorded with TSRDL, and submitted along with
the certificates and self certified copies of the PAN Cards of all the holders.
Note: Investors can transpose full or part of the holdings.
For securities held in electronic form, the Investor must contact his/her Depository Participant.
13.
Receipt of Annual Report through email
Shareholders can receive Annual Reports through email. Shareholders are requested to update their email ids
with TSRDL or their respective Depository Participants. Shareholders are also requested to dematerialize their
shares and update their email ids with their Depository Participants.
14.
In case of non-receipt of Annual Report
The shareholder can contact the Secretarial Department of the Company to enquire on the status of dispatch of
the Annual Reports. The investor can also find the latest Annual Report of the Company on the website of the
Company under the“investors”section.
15.
Sale of shares by employees to the Tata Technologies Employee Stock Option Trust
Any employee who wants to sell his/her shares can sell to the shares to the Tata Technologies Limited Employee
Stock Option Trust by writing to the Trust at ttesoptrust@tatatechnologies.com stating the reason for the sale of
the shares. The Trust will then purchase the shares from the employee subject to the approval of the Stock
Allotment Committee. After approval of the Committee, the Trust will then inform the employee about the
further documents to be submitted and steps to be taken for the sale of shares.
Frequently Asked Questions on Dematerialization:
1.
What is Demat and what are its benefits?
Dematerialization (‘Demat’ in short form) signifies conversion of a share certificate from its present physical
form to electronic form for the same number of holding.
It offers scope for paperless trading through state-of-the-art technology, whereby share transactions and
transfers are processed electronically without involving any share certificate or transfer deed after the share
certificates have been converted from physical form to electronic form.
Demat attempts to avoid the time consuming and complex process of getting shares transferred in the name of
buyers as well its inherent problems of bad deliveries, delay in processing/fraudulent interception in postal
transit, etc.
125
Eighteenth Annual Report 2011-12
Tata Technologies Limited
Dematerialization of shares is optional and an investor can still hold shares in physical form. The
Depositories Act, 1996 has been enacted to regulate the matters related and incidental to the operation
of Depositories and demat operations. Two Depositories are in operation - National Securities Depository
Limited(NSDL) andCentral Depository Services Limited (CDSL).
Following are the benefits of demat:
2.
1.
Elimination of bad deliveries
2.
Elimination of all risk associated with physical certificates
3.
No stamp duty on transfers
4.
Immediate transfer/trading of securities
5.
Faster settlement cycle
6.
Faster disbursement of non cash corporate benefits like rights, bonus etc.
7.
SMS alter facility
8.
Periodic status reports and information available on internet
9.
Ease related to change of address of investor
10.
Elimination of problems related to transmission of demat shares
11.
Ease in portfolio monitoring
12.
Ease in pledging the shares
How does the Depository System operate?
The operations in the Depository System involve the participation of a Depository, Depository Participants,
Company/Registrars and Investors. The Company is also called the Issuer. A Depository (NSDL and CDSL) is an
organization like a Central Bank, i.e. Reserve Bank where the securities on an investor are held in electronic form,
through Depository participants. A Depository Participant is the agent of the Depository and is the medium
through which the shares are held in the electronic form. They are also the representatives of the Investor,
providing the link between the investor and the company through the Depository. To draw analogy, the
Depository system functions very much like the banking system. A bank holds funds in accounts whereas; a
Depository holds securities in accounts for its clients. A bank transfers funds between accounts whereas; a
Depository transfers securities between accounts. In both systems, the transfer of funds or securities happens
without the actual handling of funds or securities. Both the banks and the Depository are accountable for
safe keeping of funds and securities respectively.
3.
How to demat ones shares?
First, the Investor will have to open an account with a Depository Participant (DP) and get a unique Client ID
number. Thereafter, he/she will have to fill up a Dematerialization Request Form (DRF) provided by the DP and
surrender the physical shares, which is to be dematerialized to the DP.
The DP upon receipt of the shares and the DRF will send an electronic request to the company’s Registrar and
Share Transfer Agent through the Depository for confirmation of demat. Each request will bear a unique
transaction number.
The DP will simultaneously surrender the DRF and the shares to the Company’s Registrar and Share Transfer
Agent with a covering letter requesting the Registrar and Share Transfer Agent of the Company to confirm
demat. The Company’s Registrar and Share Transfer Agent after necessary verification of the documents
received from the DP will confirm demat to the Depository.
This confirmation will be passed on from the Depository to the DP, which holds the Investors’ account.
After receiving this confirmation from the Depository, the DP will credit the account with the shares so
ematerialized. The DP will hold the shares in the dematerialized form thereafter on the Investors’ behalf and
the Investor will become the beneficial owner of these dematerialized shares.
126
4.
Can the dematerialized shares be converted back into physical form?
If the Investor is holding shares in electronic form, he/she will still have the option to convert their holding to
physical form by submitting a Rematerialization Request Form (RRF) through their DP in the same manner as
Dematerialization. Upon receipt of such request from the DP, the Company will issue share certificates for the
number of shares so rematerialized.
5.
What are the charges to be paid to demat one’s physical shares? Will the Company pay for it or does the
Investor have to pay for it?
The charges differ from DP to DP and therefore the Investor will have to contact his/her DP for the same. The
charges for demat have to be borne by the Investor.
6.
Can the share purchased in physical form be directly given to the DP for dematerialization?
Prior to dematerialization of the shares, they have to be registered in favor of the Investor. Hence, the Investor has
to necessarily lodge the share certificates with a duly executed transfer deed with the Company’s Registrar and
Share Transfer Agent.
7.
How will the Investor get dividends on dematerialized shares? Will the shareholder get the Annual
Report after dematerialization of the shares and would the Investor be able to attend the AGM?
The Depository Participants will give the list of demat account holders and the number of shares held by them in
electronic form on the Record date to the Company (Beneficiary Persons, known as Benpos in short). On the
basis of Benpos, the Company will issue dividend warrants in favor of the demat account holders.
The rights of the shareholders holding shares in demat form are at par with the holders in physical form. Hence
the Investor will be eligible to get the Annual Report and will have the right to attend the AGM as a shareholder.
8.
What are the chances of any fraud/disputes in using a demat account? Whom should the Investor
approach in such cases?
Common risk factors applicable to trading in physical shares like mismatch in signatures, loss in postal transit
etc., are absent since the dematerialized shares are traded scrip less.
However, in the unlikely event of any other dispute, the concerned Depository Custodian viz. NSDL/CSDL or SEBI
would have to be approached for resolving such issues.
9.
Can the Investor pledge his/her shares in demat form for the purpose of availing any funding/loan
arrangement with the bankers?
Yes.The Investor will have to contact his/her DP for this.
127
Notes
Notes
Notes
Tata Technologies Limited
Registered Office : 25 Rajiv Gandhi Infotech Park
Hinjawadi
Pune 411 057
Attendance Slip
Name:
Address:
Folio No:
I hereby record my presence at the EIGHTEENTH ANNUAL GENERAL MEETING of the Company at 25, Rajiv Gandhi Infotech Park,
Hinjawadi, Pune 411 057, at 3:30 p.m. on Friday, June 22 , 2012.
SIGNATURE
NOTES:
1.
Member/Proxyholder wishing to attend the meeting must bring the Attendance
Slip to the meeting and hand over the same duly signed, at the entrance.
2.
Member/Proxyholder desiring to attend the meeting should bring his/her copy of the
Annual Report for reference at the meeting.
Tata Technologies Limited
Registered Office :: 25 Rajiv Gandhi Infotech Park
Hinjawadi
Pune 411 057
Proxy
I/We
of
in the district of,
being
a member/members of the above named Company, hereby appoint
of
in the district of,
or failing him
of
in the district of
as my/our Proxy to attend and vote for me/us and on my/our behalf at the Eighteenth
Annual General Meeting of the Company, to be held on Friday, June 22, 2012 or at any adjournment thereof.
Signed this
day of
2012.
Reference Folio:
Signature
No of Shares:
This form is to be used
*in favour
Affix
1 Rupee
Revenue
Stamp
of the resolution. Unless otherwise instructed, the proxy will act as he/she thinks fit.
*against
*Strike out whichever is not desired.
NOTE:
The proxy must be returned so as to reach the Registered Office of the Company not less than FORTY-EIGHT HOURS before the
time for holding the aforesaid meeting.
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
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25 Rajiv Gandhi Infotech Park
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Email: corporate@tatatechnologies.com
www.tatatechnologies.com
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Tata Technologies Limited