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DIRECTOR'S REPORT

Tata Elxsi Ltd.

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Market Cap. (₹) 5343.94 Cr. P/BV 5.67 Book Value (₹) 151.38
52 Week High/Low (₹) 1491/822 FV/ML 10/1 P/E(X) 18.43
Bookclosure 17/07/2019 EPS (₹) 46.56 Div Yield (%) 0.93
Year End :2018-03 

DIRECTORS' REPORT TO THE MEMBERS

1. The Directors are pleased to present the Twenty Ninth Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the financial year ended March 31, 2018.

2. Result of Operations - Extract

Rs, In Crores

2017-18

2016-17

Revenue from Operations

1386

1237

Other income

43

(5)

Total Income

1429

1232

Profit before financial expenses, depreciation and exceptional items

389

291

Less: Financial expenses

-

-

Depreciation/Amortization

25

27

Profit before tax

364

264

Less: Provision for Income tax

124

89

Profit after tax

240

175

Other comprehensive income

1

-3

Total comprehensive income

241

172

Add: Profit brought forward

439

329

Less: Dividend and Dividend Tax*

60

52

Transfer to General Reserve

10

10

Balance Profit carried to Balance Sheet

610

439

*Pertains to previous years

3. Dividend

Your Directors recommend for your approval, a dividend of 110% (Rs, 11/- per share) for the year ended 31st March, 2018 on 6,22,76,440 equity shares of Rs, 10/- each fully paid-up, compared to 160% (Rs, 16/- per share) on 3,11,38,220 equity shares of Rs, 10/- each fully paid-up in the previous year.

This will involve an outgo of Rs, 82.60 crores compared to Rs, 59.96 crores in the previous year, including dividend distribution tax.

The Company's Dividend Distribution Policy (DDP) is available in the Investors section of the company website: http://www.tataelxsi.com/investors/TataElxsi-dividend-distribution-policy.pdf

4. Capitalization of Reserves

Your Directors at their meeting held on July 27, 2017 had recommended the capitalization of reserves of the Company for issuance of Bonus Shares to the shareholders in the ratio of 1 (one) bonus equity share of '10/- each fully paid-up for every 1(one) existing equity share of Rs,10/- each fully paid-up (in the ratio of 1:1) held by the shareholders as on the "Record date". The said capitalization was approved by the members vide postal ballot.

The Allotment Committee at its meeting held on September 20, 2017 approved the allotment of 3,11,38,220 equity shares of Rs,10/- each fully paid-up as Bonus equity shares to those shareholders/beneficiaries whose name appeared on Register of Members/Depositories as on the record date i.e., September 19, 2017 and has been duly listed with BSE and NSE.

The trading of the said Bonus Equity Shares was granted by Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on and from September 27, 2017 respectively.

5. Reserves

Your Directors have approved a transfer of Rs, 10 crores to the General Reserves for the year ended 31st March, 2018, as against an amount of Rs, 10 crores in the previous year.

6. Review of Operations

The total income during the year under review increased by 16 % from Rs, 1232 crores in the previous year to Rs, 1429 crores.

The Profit Before Tax (PBT) increased by 38 % from Rs, 264 crores in the previous year to Rs, 364 crores. The Profit After Tax (PAT) increased by 38 % from Rs, 175 crores in the previous year to Rs, 240 crores.

During the year under review, your Company continued its momentum of growth despite geo-political uncertainties, considerable headwinds in the business environment and currency volatility in some currencies.

7. MANAGEMENT DISCUSSION AND ANALYSIS Industry Outlook

According to NASSCOM, India's IT-BPM industry (excl. eCommerce) is expected to grow 8% in FY18 to $ 167 billion from $ 154 billion in FY17.

Engineering Research & Development continues to be the fastest growing segment at over 12%, driven by global OEMs increasingly embedding software & services into their products.

India continues to be the core for digital innovation with a rich ecosystem of start-ups, tech providers and services providers engaging in global delivery and investing in IP, solutions and Centers of Excellence (CoEs).

Business Analysis

Our operations are classified into two business segments, i.e. Software Development & Services and Systems Integration & Support.

Software Development and Services

This business segment grew by 14% from Rs, 1171 crores in the previous year to Rs, 1329 crores in FY18. The segment profit increased by 37% from Rs, 290 crores in the previous year to Rs, 396 crores during FY18.

Tata Elxsi has consistently maintained leadership positions globally in the Automotive and Broadcast industries.

Tata Elxsi's integrated Design and Technology teams help enterprises re-imagine their products and services - from strategy, consumer research and insights, to service and experience design, technology implementation, integration, launch and beyond.

Your Company's design capabilities differentiates it from the competitors and its leadership in design and other verticals has helped it retain the customer's trust and exceed the sector benchmark over the years.

Leveraging Digital

Your Company has been investing in key digital technologies over the past few years, through Centers of Excellence in areas such as AI and Analytics, IoT and Automation, which have helped enhance the service portfolio, not only for existing customers, but also to win new customers across the world.

As an example, Panasonic Appliances has selected your company as their strategic global R&D partner. Your company has established an Offshore Development Center (ODC) to enable Panasonic to bring in advanced technologies such as robotics and AI to create smart and futuristic products for global markets.

During this financial year, we launched a Centre of Excellence (CoE) for Virtual and Augmented Reality, in partnership with Unity Technologies - the company behind the world's leading platform used to create real-time interactive 2D, 3D, VR and AR experiences. The CoE will serve as a global innovation platform, enabling it to support its customers in developing new applications across industries for marketing, promotions, operations and workforce training.

Your Company is also investing in developing products and solutions that leverage digital technologies for key industry verticals - such as AUTONOMAI, Tata Elxsi's software platform for driverless cars; and FalconEye, an integrated test automation and Quality of Experience monitoring platform for the online video and broadcast industry.

The software development and services segment consists of two business divisions that provide technology and design services respectively to customers across industries.

Embedded Embedded Product Design

The Embedded Product Design (EPD) division provides technology consulting, new product design, development, and testing services for the automotive, broadcast, consumer electronics, healthcare, telecom and transportation industries.

We have been awarded the 'Best Electronics Design Company' award at the 3rd edition of Electronics Maker Best of Industry Awards 2017. The award honors leading performers in the industry, best Individual Contributors, Organizations that drive the industry forward, and provide them with a platform to highlight their achievements & product successes.

The key sectors addressed by EPD include:

Transportation

Tata Elxsi works with leading OEMs, system suppliers, and software and silicon providers in the automotive and transportation industries for R&D, design and product engineering services from architecture to launch and beyond.

We bring together expertise in mechanical, software and electronics development, domain experience across Infotainment, Active Safety, Telematics, Electric and Hybrid power trains, Body & Chassis systems, along with technologies such as artificial intelligence, analytics, cloud and IoT.

We are among the few companies in the world to be accredited with Automotive SPICE Level 5 certification, which is a testimony to the quality of our technology and software development.

We are proud to have been awarded the Jaguar Land Rover Supplier Excellence Award for 2017. This award recognizes our excellent on-time delivery, continuous quality, technical innovation and consistently meeting production and design challenges. This is a testimony to the customer focus and delivery excellence that Tata Elxsi brings to its clients across the world.

Over the next decade there will be a major shift to Autonomous vehicles in key markets. We have invested in internal innovation and capability building in these area, along with strategic investments in creating IPs and solutions, and are well positioned to addressing this emerging area.

We have licensed our advanced autonomous vehicle middleware platform "AUTONOMAI" to one of the world's top five automotive OEMs for their driverless car R&D.

As the number of connected cars grow, security becomes even more critical to ensure a safe driving experience while still providing the connectivity that consumers desire. Tata Elxsi has partnered with leading technology providers such as Irdeto and BlackBerry Technology Solutions to help companies design and develop secure, mission-critical solutions for the automotive industry.

Tata Elxsi is member and active contributor in leading consortiums related to the automotive industry and technology standards bodies such as AUTOSAR.

We participated in leading trade shows and events across geographies, such as the CES 2018 (Consumer Electronics Show) in Las Vegas, China International Connected & Autonomous Vehicles 2017 in Shanghai and VDI ELIV in Germany, where we showcased our capabilities and new product offerings for autonomous vehicles, connected cars and next-gen infotainment.

Broadcast and Communications

Tata Elxsi addresses the complete product development lifecycle from R&D, new product development and testing to maintenance engineering for Broadcast, Consumer Electronics and Communications.

The Broadcast and Communications industries are rapidly converging with Broadcasters & Telecom operators both vying for share of consumer wallet for voice, data, and content services.

Your Company is at the forefront of enabling digital transformation for leading media companies and operators across the world, helping them develop innovative services and applications that create subscriber stickiness and drive revenue growth.

Tata Elxsi has been chosen by Airtel as a technology partner for system integration for their Internet TV. Tata Elxsi has developed and integrated key software components to ensure that the Android TV application suite provides a seamless user experience whether the viewer accesses online or offline content.

Across the world, consumers are increasingly preferring direct consumption of content over-the-top (OTT) via devices such as Smart TVs, Mobiles and Tablets. Tata Elxsi's OTT services helps customers launch multi-platform OTT services, supported by tools for content analytics, content discovery, Ad integration and 24x7 monitoring support.

Tata Elxsi has partnered with ZEE5, the newly launched digital entertainment destination by Zee Entertainment for multi-platform front-end application development of its new digital entertainment platform. This includes multilingual front-end user experience and next generation voice-based user interfaces across devices.

Globally, telecom operators are moving towards virtualization and creating Software Defined Networks (SDN) to reduce capital & operating expenditures.

Tata Elxsi has a comprehensive portfolio of SDN and virtualization services that enable global customers to deliver business service agility in their next generation networking technology solutions, and is engaged with leading operators in these areas.

We continue to participate in leading international industry events such as IBC 2017 (International Broadcasting Convention), to reiterate our established presence and brand in these industries.

Industrial Design and Visualization

Tata Elxsi helps customers develop enduring brands and products by using design as a strategic tool for business success. Our expertise extends across consumer insight, branding, industrial design, visual design & merchandising, design engineering and manufacturing support.

Our design services span digital and physical aspects, to provide users with products, solutions and services that humanize the complexity of the underlined technologies and make them intuitive and easy to use, driving customer delight, loyalty and business growth.

Together with our clients we simplify and enhance service value by analyzing problems, identifying opportunities, improving processes and creating unified solutions, meaningful interactions, spaces and products.

As an example, your Company has been selected by the Airports Authority of India (AAI) to improve passenger experience for all AAI managed airports. As a strategic design partner, we will help AAI to provide a seamless passenger travel experience and will be primarily responsible to set the way finding and information design guidelines for all AAI airports coming up in the future. We have already commenced work to redefine the passenger experience for 10 airports - Goa, Kolkata, Varanasi, Lucknow, Chennai, Bhubaneshwar, Pune, Trivandrum, Coimbatore, and Guwahati.

Your Company has been awarded India's Best Digital Design Studio 2017 by Pool magazine for our exceptional work delivered in digital design for Kochi Metro.

It was also awarded with the 'Interaction Design Award' and 'Overall Category Winner in Visual Communication' at the CII Design Excellence Awards 2017. These awards acknowledge and celebrate outstanding design and innovation, and reflect the high quality of our work and our strong commitment to consumer-focused innovation.

Systems Integration and Support

During the year under review, our Systems Integration & Support segment reported a turnover of Rs, 57crores and profit of Rs, 8 crores.

We implement and integrate complete systems and solutions for specialized applications such as High-Performance Computing, Computer Aided Design, and Virtual Reality. We also provide Professional Services for maintenance and support of such installations in India and key overseas markets.

We have also expanded our solution portfolio, with technologies like 3D printing to cater to emerging industry needs.

We continue to focus on increasing the share of software sales, value-added systems integration and support services in this segment, for improved margins.

Threats, concerns and risks

While 87% of your Company's revenue comes from outside India, we foresee minimized impact on our cost structures as the majority of the delivery team is based in India.

Tata Elxsi's revenue is well distributed between Euro, GBP and US dollar currencies, which protects us from currency related risks arising from any single currency. We also have a hedging policy in place to manage foreign exchange risk.

Despite the uncertain political climate in Eurozone, the confidence in the economy remains high. Economic confidence across the 19 countries that use the euro currency is at its highest in more than 17 years, according to a survey published by the European Commission.

The Eurozone grew faster than the US region in 2017 and is expected to grow further in 2018. For Tata Elxsi, Europe remains another important customer region, and positive economic sentiments will have positive impact towards our demand generation, despite UK leaving the European Union (EU).

The company has consciously built an offshore oriented delivery model to derisk potential visa and foreign policy related uncertainties in key overseas geographies.

Internal Control Systems and their adequacy

We believe that internal control and risk management are necessary prerequisites of the principle of governance. Our Management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business which provides assurance on the efficiency of operations and security of assets. We have an effective internal control which ensures that all our assets are safeguarded and protected against any losses.

We have appointed Deloitte Haskins & Sells LLP to oversee and carry out quarterly internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the CFO and MD and their audit plans are approved by the Audit Committee. Over the years, the internal audit has been oriented towards the review of internal controls in its operations such as revenue, legal & statutory compliance, accounting and finance, procurement, employee engagement, IT processes and information security etc.

Based on the internal audit reports, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Internal Audit Reports along with corrective actions are discussed with the management and are reviewed by the Audit Committee. Suggestions for improvement are considered and the Audit Committee follows up on corrective action.

Financial Analysis

Particulars

2017-18

2016-17

Change over previous year %

Percentage of Income

2017-18

2016-17

' Crs

Sales and services

1386

1237

12.05

96.99

100.41

Other income

43

(5)

960.00

3.01

-0.41

Total Revenues

1429

1232

15.99

100.00

100.00

Cost of sales

77

76

1.32

5.39

6.17

Personnel expenses

749

666

12.46

52.41

54.06

Financial expenses

-

-

-

-

-

Depreciation/ Amortization

25

27

-7.41

1.75

2.19

Other expenses

214

199

7.54

14.98

16.15

Total Expenditure

1065

968

10.02

74.53

78.57

Profit before tax and exceptional items

364

264

37.88

25.47

21.43

Tax expenses

124

89

39.33

8.68

7.22

Profit after tax for the year

240

175

37.14

16.79

14.21

Analysis of Overheads

2017-18

2016-17

Variance %

Particulars

Rs, Crs

Rs, Crs

Operating lease rent

17.04

16.15

5.51

Communication expenses

10.95

10.80

1.39

Travel and conveyance

74.29

64.85

14.55

Consultant fees

50.88

53.06

(4.11)

Significant Ratio Analysis

Particulars

Unit

31.03.18

31.03.17

Earnings before interest, depreciation and tax / Sales

%

28.08

23.53

Profit before taxes / Sales

%

26.25

21.36

Profit after taxes / Sales

%

17.32

14.13

Current Ratio

No. of times

4.23

4.30

Earnings per share

'

38.54

28.07

Human Resources

Your Company recognizes the critical importance of its human capital. As a technology-led design company, we continue to focus on attracting and retaining top talent.

Your Company undertakes significant initiatives to increase effectiveness and efficiency through Leadership training, Performance management, Talent development, Employee engagement and Succession planning.

Your Company believes in Diversity & Inclusion and is committed to the principle of Equal Employment Opportunity for all employees.

We have been awarded the STPI IT Export Award 2016-17 for 'High growth in Women Empowerment - IT' in the category of over 1000 employees. About 25% of our total workforce comprises of female employees, underscoring the emphasis that Tata Elxsi places on providing equal opportunities for its workforce.

Our total headcount, excluding associates, was 5287 as of March 31, 2018.

Quality initiatives

We have instituted strong quality processes in the execution of our software development projects, and I implemented robust information security management processes to assure our global customer base of the required level of confidentiality and protection of data and information. To this effect, we have been assessed and certified organization wide for ISO 9001:2015 and ISO 27001:2013 and our systems are SEI CMMi L5 compliant. Additionally, we have been audited and certified for industry-specific standards in the design and development of medical devices with ISO 13485:2012 certification, and for our transportation business, we have Automotive SPICE® Level 5 certification.

8. Directors and Key Managerial Personnel

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. N.G. Subramaniam retires by rotation and being eligible, offers himself for re-appointment.

During the year under review, Six (6) Board meetings were held and have been well attended by the Directors. The calendar of meetings for the year 2018-19 has been circulated to all the directors detailing the schedule of Board and Committee meetings during 2018-19.

The Independent Directors have submitted their declaration that they fulfill the requirements as stipulated in Section 149 (6) of the Companies Act, 2013. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013 the Independent Directors had a separate meeting on 26th April, 2017.

During the year under review, Mr. K Ramaseshan, the then Chief Financial Officer, tendered his resignation from the services of the Company with effect from June 01, 2017.The Board, on the recommendation of the Audit Committee, had at its meeting held on July 27, 2017 appointed Mr. Muralidharan H.V as the Chief Financial Officer (CFO) of the Company with effect from July 27, 2017.

Pursuant to the provisions of section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Mr. Madhukar Dev, MD & CEO; Mr. Muralidharan H.V, Chief Financial Officer (CFO) and Mr. G Vaidyanathan, Company Secretary.

9. Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2017-18.

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

(a) In the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of our state of affairs at the end of the financial year and of our profit and loss for that period.

(c) The Directors had taken proper and sufficient care, for the maintenance of adequate accounting records, in accordance with the provisions of Companies Act 2013, for safeguarding the assets and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the annual accounts on a going concern basis.

(e) The directors had laid down internal financial controls to be followed by us and that such internal Controls are adequate and were operating effectively.

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

10. Particulars on Remuneration

The statement showing the names of the top ten employees in terms of remuneration drawn and the information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors' Report and have not been attached. However, in terms of first proviso to Section 136(1) the particulars as referred above are available for inspection at our Registered office during business hours on working days, up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Particulars pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as under:

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

Non-Executive Director

Ratio to median remuneration

Mr. N G Subramaniam*

-

Mr. Patrick McGoldrick

10.04

Mrs. S. Gopinath

13.26

Dr. G Katragadda*

-

Prof. M.S. Ananth

6.83

Mr. Sudhakar Rao

10.44

Executive Director

Mr. Madhukar Dev, MD & CEO

84.66

For Non-Executive Directors (NEDs) only Commission is considered. *No Commission was provided for the year 2017-18

(ii) Percentage increase in the remuneration of the Directors and KMPs for the financial year:

Directors, Managing Director & CEO, Chief Financial Officer and Company Secretary

% increase in the remuneration of Directors/KMP in the Financial year

Mr. N G Subramaniam1

-

Mr. Patrick McGoldrick

96.77

Mrs. S. Gopinath

54.61

Dr. G Katragadda**

-

Prof. M.S. Ananth

139.00

Mr. Sudhakar Rao2

-

Mr. Madhukar Dev, MD & CEO

18.32

Mr. K. Ramaseshan, CFO*

-

Mr. Muralidharan H.V, CFO*

-

Mr. G Vaidyanathan, Company Secretary

27.66

*since the information is part of the year, either current or past, the same is not comparable **since no commission was provided for 2017-18.

(iii) The percentage increase in the median remuneration of employees in the financial year: 9%

(iv) The number of permanent employees on the rolls of company: 5287

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than managerial personnel in 2017-18 was 11%. Percentage increase in the managerial remuneration for the year was 19%.

(vi) The Company hereby affirms that the remuneration is as per the remuneration policy of the company.

The Board has adopted a Remuneration Policy as also the Charter for the Nomination & Remuneration Committee (NRC). The Policy covers the Policy on remuneration to our Managing Director, Key Managerial Personnel and other officers. The Charter lays down the Rights, Roles and Responsibilities of the NRC. A Policy on Board diversity has also been adopted by the Board. A comprehensive Governance Guidelines for Board effectiveness has also been adopted by the Board on the recommendation of NRC. The Guidelines lay down the following:

13. Risk Management Policy

The Board has adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis. More details are given under Section-6 of Corporate Governance Report.

14. Corporate Social Responsibility

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

The Board on the recommendation of CSR Committee adopted a CSR Policy. The same is available on Company's website at (http://tataelxsi.com/company/social-responsibility.html). The CSR objectives are designed to serve societal, local and national goals in the locations that we operate in, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibilities Policy) Rules, 2014 is annexed as Annexure-C. The detail of the CSR Committee and its composition is given in section-7 of the Corporate Governance Report.

15. Corporate Governance

In terms of Regulation 34(3) and 53(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Corporate Governance Report, the Management Discussion & Analysis Statement, and the Auditors' Certificate regarding Compliance to Corporate Governance requirements are part of this Annual Report.

16. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Jayashree Parthasarthy, a Company Secretary-in-Practice, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Audit for the year ended 31st March, 2018 is attached to the Directors' Report at page No. 36.

17. Prevention of Sexual Harassment

We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints under the above Act.

No complaints have been raised during the year 2017-18.

18. Vigil Mechanism

Our company has established a "Vigil Mechanism" for its employees and Directors, enabling them to report any concerns of unethical behavior, suspected fraud or violation of the Company's 'Code of Conduct'.

To this effect, the Board has adopted a 'Whistle Blower Policy' (WBP), which is overseen by the Audit Committee. The policy provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review.

The said policy has been posted on our intranet where all the employees have access. Our Company conducts 'Policies Awareness Campaign' regularly for its employees at its various centers, and the WBP features in these campaigns.

19. Others

There are no loans, guarantees and investments made by us u/s 186 of the Companies Act, 2013 during the year under review.

The extract of Annual Return in MGT-9 is attached and forms part of the Directors' Report. We have neither accepted nor renewed any deposit during the year under review.

The Unclaimed Dividend in respect to the financial year 2010-11 is due for remittance to Investors' Education & Protection Fund (IEPF) on August 27, 2018 in terms of Section 125 of the Companies Act, 2013.

There are no material changes and commitments affecting the Company's financial position between the end of the financial year to which this financial statement relates and the date of this report.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred 254,226 equity shares pertaining to those shareholders who have not claimed their dividend for 7 consecutive years since 2009 and 2010, to the IEPF account on 30th November, 2017.

20. Auditors

M/s BSR & Co. LLP, Chartered Accountants, the statutory auditors of the company have been appointed at the 28th Annual General meeting held on April 27, 2017 for a period of 5 years from the conclusion of 28th Annual General Meeting up to the conclusion of the 33rd Annual General meeting to be held in the year 2022, whose re-appointment is to be ratified at the ensuring Annual General Meeting. Accordingly, ratification of the reappointment is included in the Notice to this Annual General Meeting.

21. Acknowledgements

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

On behalf of the Board of Directors

N.G. Subramaniam

Chairman

Bengaluru, April 26, 2018

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