AFFLUENCE

Directors’ Report
TO THE MEMBERS OF TATA TECHNOLOGIES LIMITED
The Directors are pleased to present their Nineteenth Annual Report on the Business and Operations of your Company and the Audited Statement of Accounts for the year ended March 31, 2013.
1. FINANCIAL RESULTS
The summary of financial results of the Company for the year ended March 31, 2013 is as follows:
(Amount in Rs. Crore)

2. REVIEW OF BUSINESS OPERATIONS
The Company recorded an overall revenue growth of approximately 22.41% with an increase of approximately 20.30% in revenue from sale of products and services, from Rs. 644 crore in 2011-12 to Rs. 774.70 crore in 2012-13. Due to efficient cost management, increased focus on operating efficiencies and offshoring, the operating profit registered an increase of approximately 45.94% over the last year, while profit before taxes (PBT), grew at a rate of approximately 48.48% on a year-on-year basis. Profit after taxes (PAT) grew by approximately 53.94% during the same period.
During the period, services revenue increased by 19.38% and product sale increased by 26.61% over last year to reach figures of Rs. 671.54 crore and Rs. 103.16 crore respectively. The services revenue comprises:
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 each of the first three quarters of the financial year 2012-13 totaling to Rs. 9/- per share. Considering the financial performance, the Board recommends a final dividend of Rs. 16/- per share. If the shareholders approve the proposed final dividend at the ensuing Annual General Meeting, the total dividend for the financial year 2012-13 will be Rs. 25/- per share. The total dividend for the financial year 2011-12 was Rs. 16/- 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) 53,400 equity shares were allotted on exercise of the employees stock options during the year. Hence, the paid up capital of the Company increased from Rs. 42.97 crore to Rs. 43.02 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 pertaining to the stock based incentive schemes are provided in Annexure I to this report.

6. HUMAN RESOURCE DEVELOPMENT
The Company employed 6291 permanent and contractual professionals, as on March 31, 2013 an increase of 16% as compared to total strength of 5443 as on March 31, 2012. The Company’s employees serve clients across the globe in Automotive, Aerospace, Construction and Heavy Engineering domains spread over in 25 countries. The Company’s strategy is to deploy a judicious mix of specialists from the key bases in India, North America and UK and local talent from the countries the Company is operating in. This ensures seamless engagement with the Company’s customers, through clear understanding of local cultures for the provision of specialized solutions.
Please refer the section on Human Capital in Management & Discussion Analysis report for details on the Company’s approach and initiatives on human resources.

7. CORPORATE SUSTAINABILITY
The Company is committed to make positive contributions to society, the economy and the environment through its products, employment practices, community involvement, and responsible resource use. Globally, many associates of Tata Technologies volunteer in support of various programs organized to make a positive impact on society.
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 2012-13. In the year 2013, 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 change in its TBEM score band from 'Early Improvements (351-450)' in 2010 to 'Good Performance (451-550)' in 2011 to Good Performance (451-550 scoring 500) in 2012.
The Company intends to move further up on the score band in FY 14 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 Company has established a Quality Management System (QMS) which has matured over the years. The QMS meets stringent requirements laid out by globally recognized Quality Standards such as ISO 9001:2008 and AS 9100 C. All the major delivery centers are certified to relevant quality standards. While the delivery centers in Hinjawadi (Pune), Bangalore and Thailand were already certified, Blue Ridge was included in the last year.
Quality certificates have been awarded on successful completion of certification audits by Dekra (The Netherlands and USA). Through this, customers are assured of high levels of quality, consistency and on time delivery.
Global Engagement Model (GEM) is the methodology established for project management in your Company. It has been IT enabled through a project management tool. The result is GEM-iT Key quality metrics are tracked through this system and provides management a view of different Lines of Business (LoBs) and projects within.
A new module has been configured in GEM-iT to automatically trigger and execute the Customer Satisfaction Evaluation (CSE) process. This has resulted in significant time savings to your Company and improved user experience to all stake holders, including customers.
The main delivery location in Hinjawadi, Pune successfully cleared the recertification audit of the Information Security Management System (ISMS) to the security standard ISO 27001. This is an important quality standard which demonstrates the organization's ability to secure customer and business related information.
A team of over a hundred trained and certified internal quality auditors ensure a high level of compliance to the organization’s processes. They also contribute towards process improvement resulting from findings of internal audits.

9. INFORMATION TECHNOLOGY (IT) INITIATIVES
The Company has invested in strategic IT Initiatives aligned with its business goals. This provides efficiencies and scalability to all internal and external stakeholders, further integrating the Company’s operations across its major territories. The improvements across each of the major areas are listed below:
IT Infrastructure & Operations:
The Company continued to upgrade its IT infrastructure and significantly improved its operational efficiency to enable and support growing business operations. This included:
a) Upgradation of the Key enterprise application servers and storage infrastructure
b) Connectivity upgradation with key customers
c) New facilities across the globe
The Company moved over 70% enterprise applications on to virtualized platform for better performance while significantly reducing the carbon foot print. The Company is also in the process of deploying a highly virtualized solution on a super computing platform covering the mail services to users in captive accounts in India. Rollout of Voice Communications (IP) Telephone systems across territories continued with associated reductions in operating costs. The Company deployed Wide Area Network (WAN) acceleration solution across all its major delivery centers in order to accelerate the enterprise application performances across the territories.
The Company has built/expanded state-of-the-art facilities across Pune, Thane, Thailand and Detroit, USA to service customers from these centers, with associated state of the art infrastructure.
IT Asset Management (ITAM) continued to be a key focus area throughout the year. Software and hardware assets were tracked and reviewed to ensure compliance with Company's ITAM policies and acceptable usage criteria.

Engineering Systems & Customer Collaboration:
The Company consolidated engineering servers, licenses and data in each of the key delivery centers to manage customer information better, License Utilization and reduce risk of data loss. Company deployed its proprietary tools Digital Product Development Systems Performance Management Tool (DPDSPMT) for Proactive License Monitoring, integrated analytics for project based utilization and for internal and external compliances. This helped ensure effective procurement based on utilization trends and new requirements. The Company also deployed its proprietary solution (iVault) for enterprise document management, used extensively by multiple teams including the board paper workflow.

As part of the Customer Collaboration activities Design Collaboration and Data Exchange capabilities with key customers was effectively designed with associated Product Data Management (PDM) systems, Connectivity and Hardware/Software solutions to enable real time communication and collaboration from the Company’s delivery centers with each of the customers. Several key customer environments were also upgraded, leveraging technologies such as caching to support the growing development activities across the Company’s delivery centers.
Enterprise Applications:
The Company matured the global process and associated applications deployments across its major process areas (Hire 2 Retire, Deal 2 Delivery, Opportunity 2 Order, Billing & Finance, Dashboarding & Analytics). Enterprise upgrades and deployments, planned as part of its IT Strategy, and developed through a comprehensive Systems Value Engineering Study, which were key components for the IT Strategy and Execution for FY13.
For Employees: Over 35+ employee centric applications were automated including Recruitment, Travel, Visa Request, Employee Movement, Deputation, Tax Declaration, Claims Reimbursement, Training, Supportal and Separation. The automation, enabled through an Employee & Manager Self Service Portal were rolled out across all territories. The roll out included re-engineering and standardization of associated business processes. Real Time Gross Settlement (RTGS) Automation was also introduced for settlement of payments. Salary Transfers, Employee Claim Settlements and Third Party Vendor Payments were streamlined using the above automation.
For Sales: Sales Automation was a key focus area in FY13 with the continued improvement of the Customer Relationship Management (CRM) systems globally. The CRM system was the central repository of all Opportunities and Campaigns. Improvements to the CRM platform included areas such as Dashboards for Sales & Management, automation of Renewals and Contract Process, automated feedback (aka Voice of the Customer) and Margin Protection Process.
For Delivery: Delivery systems (Project Management, Skills Management, and Knowledge Management) were refined as part of continuous enhancements based on deployment and feedback. A new electronic Procurement Request and Approval process (e-Procurement) was deployed across all three territories to ensure a consistent approach to Procurement. Services Customer Satisfaction Evaluation (CSE) Process was automated and deployed using the proprietary Global Engagement Model (GEM) framework to ensure a consistent and global approach to Customer Feedback.
Analytics: The Company expanded its framework for a comprehensive decision making and analytics system powered by Business Warehouse and Analytics viewing technologies. Sales Analytics, Balance Score Card (BSC) Strategic Initiatives were some of the focus areas.
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 Information Security Management System (ISMS) and its associated governance, the Company successfully recertified its ISO27001 status in its key Delivery Centers.
The Company continued to adopt IT Infrastructure Library (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, 2013:
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 seperate section of this report. As may be seen from the consolidated statements, the consolidated revenue was Rs. 2,045.42 crore, an increase of 22.70% against Rs. 1,666.95 crore in the previous year. The profit before tax was Rs. 392.43 crore as against Rs. 271.83 crore in the previous year, recording a growth of 44.37%. The profit after tax stood at Rs. 300.73 crore as against Rs. 208.37 crore recording a growth of 44.32%.
The Services/Products business mix was a 76/24 split respectively (Rs. 1,511.64 crore for services and Rs. 483.36 crore for products) compared to FY 2012 when the Company recorded Rs. 1,196.78 crore for services and Rs. 445.83 crore for product or a 73/27 mix. The Americas produced Rs. 608.95 crore with Asia Pacific recording Rs. 867.00 crore and Europe generating Rs. 820.45 crore. The three territories combined produced Rs. 2,045.42 crore top line after reducing inter-company billing, in FY 2013 compared to Rs. 1,666.95 crore for FY 2012.
Joint Venture: Tata HAL Technologies Limited 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 Limited is in the business of providing engineering and design solutions and services in the domain of aerostructures for the aerospace industry. The Company reported revenue of Rs. 5.64 crore for the FY 2012-2013 as against the revenue of Rs. 5.10 crore in FY 2011-12 and increase of 10.55% over the last year. The profit for the year was Rs. 0.23 crore as against loss of Rs. 1.63 crore in FY 2011-12. Considering the tax losses of the Company, no provision for tax has been made in the books of account.
Material Developments after the Balancesheet Date:
Acquisition of Cambric: Tata Technologies Inc. (indirect subsidiary of Tata Technologies Limited) signed definitive agreements on April 25, 2013 for the acquisition of US-based engineering services company Cambric Corporation for $32.5 million. Cambric Corporation is a US-based company with a significant footprint in Eastern Europe. The company has three development centers in Romania and its customers include some of the world’s marquee heavy machinery, agricultural, off-highway and automotive companies. Post-acquisition Cambric Corporation will become wholly owned subsidiary of Tata Technologies Inc and will be consolidated with Tata Technologies Limited.
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 S Ramadorai and Mr P P Kadle 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 2013-14. 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, to conduct the Internal Audit of the Company and its subsidiaries.

14. COMPLIANCE AUDITORS
To strengthen the compliance process of the Company, the Company has implemented system based compliance tool known as “iComply” in India and Europe. The Company has appointed M/s Ernst & Young as Compliance Auditors of the Company, to conduct the Compliance Audit at all locations where the iComply tool has been implemented.

15. 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, 2013.

16. 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.

17. MANAGEMENT DISCUSSION AND ANALYSIS
The shareholders are advised to refer the separate section on the Management Discussion and Analysis in this Report.

18. CORPORATE GOVERNANCE REPORT
The shareholders are advised to refer the separate section on Corporate Governance in this Report.

19. 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 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. 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 Rs. Crore)

20. 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 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;
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 the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
iv. they have prepared the annual accounts on a going concern basis.

21. 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

S RAMADORAI
Chairman
Date: May 15, 2013
Place: Mumbai

Annexure I – Directors’ Report

EMPLOYEE STOCK OWNERSHIPS SCHEMES

a) Tata Technologies Limited Employees Stock Option Plan (TTESOP - 2001)

Tata Technologies Limited Employees Stock Option Plan 2001 (TTESOP Plan 2001) was launched by the Company in the year 2001. The status of the options granted and exercised as well as options forfeited during the financial year ended March 31, 2013 as under:

ESOPS as on March 31, 2013

b) Stock based incentive schemes by Tata Technologies Limited Employees Stock Option Trust (TTESOP Trust) and Barclays Wealth Trustees (Guernsey) Limited

To manage and implement various stock based incentive programs for employees of the Company, the Company has formed Tata Technologies Limited Employees Stock Option Trust (TTESOP Trust) and Barclays Wealth Trustees (Guernsey) Limited for employees of the Company and its subsidiaries. Since shares of the Company are not listed on Stock Exchange, Tata Technologies Limited Employees Stock Option Trust (TTESOP Trust) and Barclays Wealth Trustees (Guernsey) Limited purchase the shares from employees and ex-employees of the Company. The shares so purchased by the Trusts are reissued to the employees through various stock based incentive schemes from time to time.

Tata Technologies Limited Employees Stock Option Trust (TTESOP Trust) has implemented the following stock based incentive programs:

Tata Technologies Employee Stock Purchase Program 2008

Tata Technologies Employee Stock Purchase Program 2009

Share Repurchase Program

Tata Technologies Employees Stock Purchase Program- Series III (ESPP- Series III)

Employees Stock Purchase Program- Series IV (ESPP – Series IV)

Employees Stock Purchase Program- Series V (ESPP – Series V)

The Schemes implemented by Barclays Wealth Trustees (Guernsey) Limited are:

Employee Stock Ownership Program for INCAT Employees 2006

Employee Stock Ownership Program for INCAT Key Employees 2007

Employee Stock Ownership Program for INCAT General Employees 2007

Employee Stock Ownership Program 2009

Employee Stock Ownership Program 2010

Employee Stock Ownership Program 2012

Status of shares held by both Trusts as on March 31, 2013:

*Includes 22,500 shares in transfer under "ESPP Series V"

*Includes 60,000 shares in transfer under "ESO 2012"

Annexure II – Directors’ Report

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 andforming part of the Directors’ Report for the year ended March 31,2013

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.

* Indicates that the employee was in service only for a part of the year.

** Indicates that the employee was temporarily deputed to a subsidiary during the year.

On behalf of the Board of Directors

S RAMADORAI
Chairman

Date: May 15, 2013
Place: Mumbai

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 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.

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 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;
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 the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
iv. they have prepared the annual accounts on a going concern basis.