Tata Technologies

BETTER INNOVATION

16th Annual Report 2009-10

Tata Technologies, founded in 1989 and a part of the Tata

group, is a global leader in Engineering Services Outsourcing

(ESO) and Product Development IT services solutions for

Product Lifecycle Management (PLM) and Enterprise Resource

Management (ERM) to the world’s leading automotive and

aerospace manufacturers and their suppliers.

Tata Technologies has its international headquarters in

Singapore, with regional headquarters in the United States

(Novi, Michigan), India (Pune) and the UK (Luton). The

Company has a combined global work force of more than

4,000 professionals serving clients worldwide from facilities in

North America, Europe and the Asia-Pacific region.

On the cover: Abstract artist rendition of DNA emphasizing

innovation, technology and globalization.

© 2010 Tata Technologies Limited

Page

Letter to Shareholder .......................................................................................................................................................................... II

Letter from the COO ............................................................................................................................................................................. IV

Leadership Team ................................................................................................................................................................................. VII

Better Innovation ................................................................................................................................................................................. IX

Corporate Social Responsibilty ...................................................................................................................................................... XIX

Board of Directors ......................................................................................................................................................................... XXIII

Notice ........................................................................................................................................................................................................... 1

Directors’ Report ..................................................................................................................................................................................... 6

Management Discussion and Analysis (MD&A) Report ................................................................................................. 17

Corporate Governance Report ..................................................................................................................................................... 46

Auditors’ Report .................................................................................................................................................................................... 57

Balance Sheet ........................................................................................................................................................................................ 60

Profit & Loss Account ........................................................................................................................................................................ 61

Cash Flow Statement ........................................................................................................................................................................ 62

Schedules to Accounts, Significant Accounting Policies & Notes on Accounts .............................................. 63

Consolidated Accounts

— Auditors’ Report .................................................................................................................................................................. 85

— Balance Sheet ....................................................................................................................................................................... 86

— Profit & Loss Account ....................................................................................................................................................... 87

— Consolidated Cash Flow Statement ........................................................................................................................ 88

— Schedules to Accounts, Significant Accounting Policies & Notes on Accounts ............................. 89

Statements on Subsidiary Companies ................................................................................................................................. 110

Attendance Slip/Proxy ...................................................................................................................................................................... 113

Notes ....................................................................................................................................................................................................... 114

This report and financial statements contained herein have been prepared in compliance with the requirements of the IndianCompanies Act, 1956 and Indian Generally Accepted Accounting Principals (GAAP). The preparation of financial statements requiresmanagement to make estimates and assumptions which affect the reported amounts of income and expenses of the period, assetsand liabilities, as of the date of the financial statements. The estimates and judgements relating to the financial statements havebeen made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner, the form andsubstance of transactions.

CONTENTS Sixteenth Annual Report 2009-10

I | Sixteenth Annual Report 2009-10

HISTORICAL PERFORMANCE

| II

LETTER TO SHAREHOLDER

Dear Fellow Investor,

“Your company has emerged from the global economic crisis ��

The year 2009-10 presented your Company with an economy in free fall. No one knew when it would reach bottom, what level that would be and to what level it would recover. Several of our customers were in bankruptcy. The industry was in turmoil.

Despite the severe constraints and challenges we faced, I am pleased to report to you that your Company has emerged much stronger and efficient, posting year-on-year growth in revenue, EBITDA and profit after tax of 3%, 24% and 32% respectively and on a consolidated basis of -12%, 28% and 38%. How did we do this? Why are we stronger today? And what are we planning for year 2010-11?

When I wrote to you last year, we had just completed the rebranding of your Company to Tata Technologies. In the year before, your Company had transformed from a territory-centric organization to one globally aligned to meet our clients’ needs. As the global recession reduced revenues across the industry, it challenged your Company to adapt and respond. We focused on a dramatic reduction of costs and improvement of efficiency. Over the years we have been improving operational efficiency towards industry benchmark levels. The economic crisis mandated we get there immediately. Some actions were onetime cost reductions to reflect the market reality; others implemented process improvements that will remain part of our DNA. As a result, profit after tax improved to Rs. 91 crores, up from Rs. 66 crores the year before. This is despite consolidated revenues declining 12% to Rs. 1098 crores from Rs. 1241 crores the year before, due to the challenging economic environment.

We Emerge Stronger

The global economy has started to recover. While it is impossible to predict the future, the signs are encouraging that this recovery will continue. We are ready if there are future shocks to the banking system. We are much more efficient and we have generated cash and cash equivalents of Rs. 193 crores consolidated and Rs. 141 crores stand alone. We have replaced the $50mn term loan in the United States with two new term loans at much more favorable rates for three years. Further, we have taken your approval for infusion of share capital of up to $30mn from one or more private equity investors to fuel future growth and to prepare us for the discipline of public listing should we decide to do so in the future.

Deeper Customer Relationships are Helping Us Grow

Despite the economic challenges we kept a keen focus on our customers. In September 2009, at our annual strategy meeting, we developed new engagement disciplines to help our key accounts derive additional value through deeper relationships with your Company. This is working as partially evidenced by our offshore revenue growth of 13%.

Patrick McGoldrickCEO and Managing Director

Patrick McGold

III | Sixteenth Annual Report 2009-10

Better Innovation

Whether developing products or providing services for customers, it is the comprehensive understanding of every aspect of manufacturing deeply embedded in our DNA that sets your Company apart, helping our customers save time, reduce costs and enhance quality. And the driving force is the anything-is-possible attitude of my colleagues around the world; an attitude that strives to be better and better, creating a deep-rooted culture of “Better Innovation”.

In January 2010, to help our customers understand what is possible even in a falling economy, your Company showcased a Tata Nano (the $2500 car) at the Detroit Science Center during the week of the North American International Automotive Show in Detroit, Michigan. The reception was overwhelmingly positive. The concept of creating safe, all-weather transportation for people who could never dream of owning a new car; challenging a group of young people to create that car at a price that previously was hailed as impossible; and then succeeding, resonated with everyone. After experiencing the car, our customers, journalists and the members of the public consistently said that they never expected to discover that the Nano was a real, stylish and comfortable car. You may enjoy learning more about the event and subsequent events held around the country at www.betterinnovation.com. Through this activity your Company is increasingly being recognized for our offerings in frugal engineering and lean design.

You will recall that in 2006, I wrote to you about the huge challenges our customers face in meeting increased environmental standards. These challenges have intensified every year and in 2010, the issues of climate change and the world’s dependence on fossil fuels especially oil, are now a top-of-mind concern for many of our customers and governments. By anticipating and planning for these issues early, we are already actively engaged in several alternate energy vehicle programs. Digitization of the product development process remains critical for our customers to create breakthrough products. In the coming year, your Company will invest in a world-class virtual reality lab to enable our customers and employees to interact with life-sized digital prototypes in 3D. This will further enhance the value of our offerings.

In Summary

To sum up, your Company has emerged from the global economic crisis financially much stronger and operationally more efficient. We have delivered record earnings per share and generated record cash. We have also put in place building blocks to grow by helping our customers create exciting products through what we call “Better Innovation”.

Several challenges confront us, but none that we have not encountered before. There is growing competition for talent as competitors and OEMs seeing the value of engineering & design services delivered from India, set up captive units in India. A side effect is rising salary costs. To meet these and other challenges we will continue to move up the value chain, utilize more of your Company’s own intellectual property in our solutions, develop skills faster and build alternate delivery centres.

Your Company’s success even in challenging circumstances has been thanks to the passion, commitment and relentless pursuit of excellence by the 4,000 men and women who make up the Tata Technologies family. It is they who have made this possible and I am sure you 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 the valuable suggestions you may have to help your Company become better and better.

Patrick McGoldrick

Chief Executive Officer and Managing Director

| IV

Dear Fellow Investor,

The year 2009-10 was an exceptional year for Tata Technologies. Despite ongoing economic headwinds, we achieved another year of record post-tax earnings and earnings per share. Our performance is the result of a multi-faceted strategy to better serve our clients on a global basis, improve operational efficiencies and to capitalize on existing investments. This strategy is empowering Tata Technologies to deliver better results for today and providing the foundation for sustainable growth for tomorrow.

Better Serving of Global Clients

Our clients’ requirements have not changed very much from last year. Saving money, protecting capital and reducing cost continue to be paramount objectives of the clients with whom we are partnered. I am pleased to share that we are helping them to achieve these goals and, at the same time, we are increasing our value proposition by delivering ground breaking product and process innovation. One of the ways we are exceeding our clients’ expectations is through our offshore engagement model. This strategy continues to serve the company well and has expanded for all our lines of service. Our ability to deliver results in any time zone is why our global client profile continues to grow.

more than 14,000 hours of code development.

packaged for a new vehicle program.

including Mercedes Benz and Volkswagen.

design. Through access to the EKA supercomputer housed on our campus in Pune, India, Tata Technologies will be providing high-end computational fluid dynamics analysis.

Management Services [AMS] and PLM products and services.

and integration for Genovation Cars. This vehicle will feature the use of all eco-friendly materials and represents a showcase of Tata Technologies; capabilities and expertise in sustainability engineering.

Administration Management.

Operational Efficiency Improvements

This past year, we implemented an initiative called “OE-11,” which was designed to improve Tata Technologies’ operational efficiencies by FY 2011, without compromising our ability to deliver on our clients’ requirements. Many of these changes were difficult, as the organization endured a number of key personnel changes. But, these changes were necessary in order to enable Tata Technologies to be more competitive and to operate more nimbly. The cost containment, rationalization of the organization and deployment of internal shared-services strategies has proved to be very effective, yielding nearly $11.5 million of annual savings.

Warren HarrisPresident and COO

LETTER FROM THE COO

V | Sixteenth Annual Report 2009-10

To assure our shareholders of the long-term sustainability of these actions we have implemented corporate governance including:

defined, to assure swift action in accordance with the Company’s strategic objectives.

improvement.

is attuned to the expectation that high performance mandates better individual efficiency.

defined to assure proper benchmarks for improvement.

Capitalizing on Investments

Tata Technologies has made several investments to win more business and, quite frankly, to work smarter as an organization. Our investment strategy featuring five distinct components is clearly working, as our client diversity continues to grow and new market opportunities continue to increase.

Investments in Process Infrastructure

Internal systems for employee recruitment, time booking and leave management, and individual performance assessment were streamlined in 2009-10 to increase the readiness and availability for all delivery personnel. This leads to quicker engagement for key client assignments. In addition, this past year, we finalized development of our Global Engagement Model [GEM] project management strategy that enables a smooth project handoff, ongoing metrics monitoring, critical quality assurance analytics, and just-in-time resource management – all providing consistency on a global basis.

Investments in Existing Technology Enablers

The Company continued to make investments in IT tools designed to improve our ability to be both proactive and responsive to ever-changing business conditions. The ability of our extended management teams to make on-the-spot business decisions regarding use of specific delivery personnel, project profitability and revenue stream analysis was greatly aided through the ongoing investment in some of our existing technology enablers including SAP. These tools provide best-in-class dashboards customized to our business processes and for our specific lines of service. At any given time, 24x7, we can know all of the necessary analytics to accurately account for project progress and effectiveness. At the same time, we can detect potential in-process project challenges and make the appropriate decisions for next-step resolution. While investments in existing technologies aren’t always viewed with excitement, we have come to learn that it’s the little things – the details and the processes of our business – that we must focus on improving, in order to meet the time sensitive requirements of our valued clients and to deliver the results to our shareholders.

Investments in Global Connectivity and Institutionalizing Global Governance

Synchronizing an organization on a global basis when your workforce is made up of employees in 14 countries, representing 27 different nationalities, requires a tremendous infrastructure to assure global connectivity and to maintain global operational governance continuity. The Company made a number of investments this past year to improve its global Wide Area Network [WAN] to make sure that its 4,000+ employees have the latest communications regarding our business. Many of the delivery personnel work onsite at client locations around the world, while other personnel work out of our own delivery centers throughout Europe, Asia Pacific, and North America. Putting all of our employees on the same page – enabling them to work together in concert regardless of national borders or time zones – is what we expect our technology

| VI

to do, and we will accept nothing less.

Our clients expect our conformance to industry standards, and that is why I am proud of our certifications including ISO-9001 (2000) for Engineering Services, AS-9100 B for Aerospace, Ford CP3 Data Service Provider and CMMi Level 5 for Engineering Automation Projects and SAP and Software Projects. These critical certifications demonstrate our commitment to protecting our own, and our clients’, information assets as well as our performance confidence. In 2010, we certified our India Delivery Centers against the ISO 27001 Global Information Security Standards. We have also taken active steps to comply with the various regional rules & regulations required to manage our business globally.

Investment in Company Proprietary Solutions

We continue to expand our investment in our proprietary technology applications iGETIT® and iCHECKIT®, to provide even better functionality and value to 120,000 engineers working at many of the most admired companies in the world including Apple Computer, Alstom, United Technologies, General Electric, and Ford. iGETIT has been improving individual and corporate knowledge management and delivery through its new interactive reporting capabilities, that provide instantaneous analytics on individual and/or group knowledge acquisition. Significant improvements were realized this past year for iCHECKIT for CATIA® and for Autodesk® Inventor, including the linking of iCHECKIT with iGETIT and with software-specific PDM frameworks.

Investment in Business Excellence

We have made a significant investment in the systematic use of quality management principles in our journey of business excellence. The Office of Strategic Management (OSM) was formed to coordinate our business excellence activities across all functions and business units. In 2009-10 the OSM have formulated and deployed Balanced Scorecards across all of the centralized operating divisions to ensure alignment between the Company’s strategy and the KPI’s for all of our global teams. These KPI’s have been tracked and reinforced by a robust review and action planning process. Our investment in Business Excellence has been acknowledged by Tata Quality Management Services (TQMS) with the Tata Business Excellence Model (TBEM) highest delta award.

Summary

I believe Tata Technologies is at the center of an exciting market where the winners will be those companies who have every part of their organizations working together to drive value for their clients. This emerging market, and the companies who can lead and deliver, will reap billions of dollars of opportunity.

We have made incredible progress this past year on our overall operational efficiencies through our strategies as outlined. We have aggressively worked to win over new clients and have succeeded. Our ability to deliver multiple, and diverse, solutions to the overall product development process including IT, PLM and Engineering Outsourced Services are thriving; and our opportunity to take on mega-engagements is expanding. Our global delivery model has achieved new levels of scalability and increased project profitability. Our transformation into a global company is an ongoing journey, where improvement can always be found; but there is no doubt of our drive to be a dominant player in the product development marketplace.

I must express my thanks to the extended Tata Technologies team of professionals worldwide, whose dedication and relentless support of our value proposition have made what we achieved possible; and who provide the greatest measure of my optimism for the year ahead.

Warren Harris

President and Chief Operating Officer

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LEADERSHIP TEAM

VII | Sixteenth Annual Report 2009-2010

Warren HarrisPresident & COO

Gopinath JayarajCorporate Quality Head

Nick SaleCOO of Europe

Ron BienkowskiExecutive

Vice President

Kevin FisherHead of DeliveryOperations

V. BalajiChief Information

Officer

| VIII| | | ||| VIII| VIII

Samir YajnikPresident

Global Services

Anubhav KapoorGeneral Counsel &Company Secretary

Patrick McGoldrickCEO & Managing

DirectorSamrat Gupta

Chief Financial Officer

T.N. Umamaheshwaran Chief Technology Officer

Milind KaulgudHead of HumanResources

IX | Sixteenth Annual Report 2009-10

BETTER INNOVATION - IT’S IN OUR DNA

DNA is a difference maker. It’s the life force that sets you apart.

In the biomolecular world, scientists acknowledge that DNA

(deoxyribonucleic acid) contains the genetic instructions for

the development and functioning of all living organisms. The

main role of DNA molecules is to store the information needed

to construct life-giving cells.

�� our DNA is different because �� !��

In simple terms, DNA is a set of blueprints for life itself.

In a similar way, most businesses have DNA – information that

is stored and retrieved as necessary to guide the company

during its life. This blueprint is vast and contains accumulated

technology knowledge, theoretical research, approaches

to sustainability, best practices, tested business processes,

historical analysis, individual and collective experiences

and guiding principles. Each company has different stored

information, which makes each organization unique.

At Tata Technologies, we believe our DNA is different because

of one significant and inherent component: innovation.

We are on a mission to make sure that our innovation is

inspiring to our clients and to their customers and creates

powerful impressions. We work to ensure that our innovation

reflects deep insight into our clients’ business requirements.

And we are dedicated to innovation that applies breakthrough

imagination to traditional problems. We believe innovation

that is inspiring, insightful and imaginative is BETTER

INNOVATION.

BETTER INNOVATION has been the nucleus of Tata Technologies’

strategy for more than 20 years. How do we do it? In many ways.

We are developing new products with experimental materials

that will be game-changers in product sustainability and

environmental responsibility. We collaborate with companies

to transform product development processes to compete

with best-in-class companies. We engage our clients to rethink

and then implement new processes to achieve previously

unthinkable product management lifecycle efficiencies. We

deliver highly cost-effective engineering services that help

our customers enter new markets. Our business innovation

enables our clients to move with agility and flexibility without

compromising transparency.

In January of 2010, we took our BETTER INNOVATION story

on the road highlighting our contributions to the design and

manufacturing success of the exciting Tata Nano. The tour

helped bring the unique Tata Technologies DNA into sharp

focus and was warmly received by the media and our clients.

Over the following pages, you will find several examples of

how we are delivering BETTER INNOVATION to our clients.

That’s our DNA. And that’s our mission.

“ … innovation that is inspiring, insightful and imaginative is "#��#$�%&&'(��%'&��

�� )��| President & Global COO

| X| X

XI | Sixteenth Annual Report 2009-10

CLIENT INNOVATION PROFILE: AIRBUS

FAST FACTS:

Company: AirbusIndustry: AerospaceLocation: EuropeEmployees: 52,000Revenues [Euro] € 28 billion

Innovation Perspective:

Innovation sometimes requires unconventional execution. Innovation is not constrained by national borders, and neither is world-class engineering talent. Now more than ever, innovation is unbounded. Fast computers, bright engineers and a virtual digital design environment enable innovation, solving complex problems at the speed of light.

The Opportunity:

Airbus’ paramount responsibility is to ensure the safety of millions of passengers who board its airplanes every day. Every potential compromise to this objective requires various engineered solutions and analysis to mitigate the risk.

Every commercial aircraft has a complex fuel system design configuration consisting of fuel tanks, fuel lines, pumps, filters, vapor return lines, fuel system vents and evaporate emission control systems that provide fuel supply and fuel metering.

Passenger safety requires a reliable fuel system. Key factors are the predictability of the oxygen level in the tank combined with the fuel flow structure.Fortunately, computational fluid dynamics analysis technology and expertscan provide the BETTER INNOVATION that is so valuable in such a critical situation.

“Tata Technologies has become a reliable supplier and has provided a quick solution to Airbus CFD Fuel Systems requirements through the establishment of high level ��

| Ruchir Dayal��) ��+-.�/�-� ��0�� .��

The Challenge:

Tata Technologies mobilized an offshore delivery team with world-class technology and CFD knowledge to ensure fuel system design optimization. Due to the range and size of the calculations required, supercomputing technology with multi CPU high performance capabilities was essential. As a developing EADS Strategic Supplier (E2S), Tata Technologies is a preferred engineering services supplier for fuel systems design.

“Our ability to provide offshoring solutions to complex engineering problems on a global basis with high standard processes and state-of-the-art computing technology is what aircraft manufacturers require,” says Ian Todd, Tata Technologies Client Services Executive for Airbus.

The Innovation:

Through the use of the EKA supercomputer located on the Tata Technologies campus in Pune, India, and with support of a 10 man Indian CFD team, new fuel system designs that predicted the mix of species within the fuel tank for safe flight conditions were provided to Airbus.

The innovative engineered solution required performing millions of calculations with 64-bit computing on data sets approaching 2 terabytes in size and run times exceeding 35 days. Tata Technologies used a rich set of analysis tools including ANSYS ICEM, FLUENT and FieldView combined with CATIA V5.

“Tata Technologies have become a reliable supplier and has provided a quick solution to Airbus CFD Fuel Systems requirements through the establishment of high level processes,” says Ruchir Dayal, Airbus Head of CFD & Fuel Systems Domain.

| XII

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XIII | Sixteenth Annual Report 2009-10

CLIENT INNOVATION PROFILE: FORD MOTOR COMPANY

FAST FACTS:

Company: Ford Motor CompanyIndustry: AutomotiveLocation: United StatesEmployees: 176,000Revenues [USD] $118 billion


It has been said that learning and innovation go hand in hand, and sometimes the arrogance of success is to think that what you did yesterday will be sufficient for tomorrow. The business landscape is scattered with casualties of those who thought that way. But to those who know that knowledge is renewable and that learning is essential for all of life, innovation is inevitable.

The Opportunity:

When a company of 176,000 employees with manufacturing operations in 80 countries worldwide makes a decision to centralize its engineering best practices and manufacturing processes on a global basis, the implications are serious and far reaching for the company itself and its supply chain. This was the case for Ford Motor Company in 2008 while it was in the process of reorganizing its business in the midst of the global economic downturn.

The Challenge:

Ford owned many different systems that created, managed and delivered its knowledge [i.e., engineering/manufacturing methods, best practices] and processes on a global scale. What was lacking was centralization that enables common access, awareness based on individual and departmental roles, validation of knowledge that should be disseminated, capture and collection of new knowledge, and finally, delivery of knowledge to a vast global organization. Underpinning those requirements was the need for a cost-effective solution that met all of these requirements.

“iGETIT has helped our company capture, centralize and cost effectively deliver the 1��

| Pete Lamoureux, Digital Innovation Manager, Ford

The Innovation:

Beginning in 2008, Tata Technologies deployed at Ford its own commercially [with a user base of over 120,000 users] developed knowledge-management solution called iGETIT®. Ford implemented this innovative software-as-a-service application behind its IT systems firewall using iGETIT’s standard development toolkit to customize the program to enable role-based access to Ford employees and suppliers anywhere, any time. Early on, Ford understood the value of knowledge management that delivers the right information to the right people to enable better product development innovation, says John Lopez, Client Relationship Executive for Ford Motor Company.

With its common look and feel, the system helps more than 7,000 Ford personnel and employees from nearly 100 Tier One suppliers design and build cars though Ford specific methods. Through a single web logon, important information relative to new standards, processes, best practices are available to design and manufacturing engineers with different roles. Tata Technologies’ innovation is helping Ford engineers gain access to knowledge that will in turn make them more innovative.

“iGETIT has helped our company capture, centralize and cost-effectively deliver the knowledge necessary to design and build cars globally,” says Pete Lamoureux, Digital Innovation Manager, Ford. “iGETIT enables common methods and processes to be shared and better understood which in turn helps support our global programs and platform development and manufacturing.”

| XIV

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XV | Sixteenth Annual Report 2009-10

CLIENT INNOVATION PROFILE: JAGUAR LAND ROVER


Innovation is often times a solution to a problem that no one is looking to solve. Instinctively, one may think there has to be a better way of doing something, but that doesn’t always serve as the motivation to figuring out what that better way is. And that’s when an entrepreneurial approach to problem solving balanced with a systematic mode of execution becomes the basis for an intelligent and innovative commercial model.

The Opportunity:

Tata Technologies is strategically partnered with Jaguar Land Rover [JLR] to provide a complete array of IT- related services that have everyday implications for how JLR transacts its business. Non-core business activities are routinely outsourced to best-in-class providers in order to manage cost, increase flexibility and to better serve JLR clients.

One of the many ways that Tata Technologies is helping JLR transform its business is through the ongoing deployment of application management services across many types of software tools, including PLM and ERP. These business opportunities are not always easily discernable at first glance and sometimes are not self-evident. Transformative business innovation opportunities require thorough investigation and a highly consultative approach to crafting the right solution. Best solutions are usually driven by entrepreneurial creativity balanced with an eye toward organizational process scalability.

“The highest degree of transparency and �� 2 �� experience and the cornerstone of our ��

| Jeremy Vincent+�� %��'�� 34$�

The Challenge:

Jaguar Land Rover operates a comprehensive sales network for distribution of all of its new vehicles to 63 countries. Every event related to the selection, procurement, distribution and client sale must be tracked and risk-managed to drive optimal results. Each national sales network component has fluctuating business conditions that affect the financial bottom-line of each respective sales company network. The challenge was to design an IT services support solution that enabled overall scalability and flexibility to the national sales companies.

The Innovation:

Developing a commercial model for JLR that enabled a high-degree of transparency resulted in the package and implementation of SAP support services to the network of national sales companies. “Our willingness to innovate a modular, consumption-based solution for use around SAP application managed services was very different from the previous deployments,” says Richard Welford, Vice President of Automotive Europe and responsible for Global Services business development at JLR. “Now more than ever, large organizations need to operate with the speed and agility of small entrepreneurial companies, and we are collaborating with JLR to meet that challenge.”

“What you see is what you get with Tata Technologies. The highest degree of transparency and the ultimate in flexibility has been our experience and the cornerstone of our strategic partnership for several years,” says Jeremy Vincent, Chief Information Officer of JLR.

FAST FACTS:Company: Jaguar Land RoverIndustry: AutomotiveLocation: EuropeEmployees: 16,000Revenues [USD] $7.5 billion

| XVI

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XVII | Sixteenth Annual Report 2009-10

CLIENT INNOVATION PROFILE: TATA MOTORS

FAST FACTS:

Company: Tata MotorsIndustry: AutomobilesLocation: IndiaEmployees: 24,000Revenues [USD] $14 billion


Revolutionary innovation is almost always the result of inspiration underpinned by resolve and commitment. History is replete with extraordinary examples of revolutionary innovations including Henry Ford’s Model T, the Wright brothers’ airplane, Thomas Edison’s incandescent light bulb and Alexander Graham Bell’s telephone. Each innovation has served as a catalyst to improve the quality of life for the common person and has subsequently changed human history.

The Opportunity:

Sometimes opportunity arises out of doing what is right for the common good. This mindset is what served as the catalyst for the Tata Nano in 2003, when Mr. Ratan N. Tata, Group Chairman of Tata Sons, saw a family of four on a motor scooter in inclement weather. This incident served as the impetus and the inspiration to develop transportation for families in India who could not otherwise afford the lowest-cost vehicles there.

Initially, a small team of four young engineers was assembled and they were challenged to investigate what seemed like the impossible task; develop safe and affordable transportation for $2000. If achieved, this opportunity would change the lives of potentially millions of families forever. Three of the four initial members were from the Tata Technologies team.

The Challenge:

When the inspiration for the Tata Nano was conceived, every conventional approach to vehicle design was in question, in order to conform to the vision of achieving safe, affordable transportation. Every aspect of the vehicle program was subject to new thinking and required a new level of commitment by each of the program partners. Tata Technologies was to play a prominent role in engineering and design, product data management support and integration and overall systems development as a key partner to Tata Motors. “Mr. Tata’s promise to produce a $2000 car for India is one of the greatest challenges ever taken on by any company in the automotive industry, and we are very pleased to have been a key partner to Tata Motors in making the dream become a reality for potentially millions of families,” says Patrick McGoldrick, CEO – Tata Technologies.

The Innovation:

Tata Technologies proudly provided nearly 100 engineers to the Nano project, resulting in 18 patents filed on behalf of Tata Motors. The majority of the computational fluid dynamics (CDF) analysis for vehicle aerodynamics, under-hood and powertrain cooling were conducted by Tata Technologies. Additional CFD analysis for vehicle handling, crash and durability, and HVAC were managed to ensure passenger comfort and safety.

The Company was responsible for delivering a frugal engineering approach to the development of several major systems including new engine design, chassis design, fuel systems, brake systems, suspension, steering and wheels/tires. Digital Manufacturing technology and best practices were implemented to optimize plant configuration and productivity. As the chief digital design integrator, Tata Technologies played a key role in the supply chain collaboration with many of the 100 suppliers to the Nano project.

“The promise to produce a $2000 car for India is one of the greatest challenges ever ��1 �� 1 �� 8��1��

| Patrick McGoldrick+#'��

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XIX | Sixteenth Annual Report 2009-10

Missionaries of Charity

On Christmas and New Year’s Day, Tata Technologies volunteers raised funds that were used to purchase groceries, toiletries, clothes, and medicines. These life essential supplies were then distributed between three homes of Missionaries of Charity in the Pune area. In addition, employee volunteer committed these days to selfless interaction with the homeless individuals who often seek refuge at these homes.

Two of the Missionaries of Charity homes house approximately 220 individuals. These homes provide care shelter for physically and mentally challenged people who have been abandoned. The central principle of compassion of these homes is that every human being should be provided with respect and dignity regardless of their circumstances of life. The third home provides much needed care for 186 HIV infected children & mentally challenged women.

Cyber Safety

Tata Technologies volunteer employees were actively involved in “Cyber Safe Pune 2009” a three-day awareness campaign on cyber safety and security issues for clients, industry, academia, and other stakeholders. The campaign addressed issues of information security, cyber crime, cyber security, best practices and preventive measures. The National Association of Software and Services Companies - Data Security Council of India (NASSCOM - DSCI) organized the campaign under the Cyber Security project sponsored by the Department of Information Technology, Ministry of Communications & Information Technology, Government of India. The program is part of a larger “Trusted Sourcing” initiative to strengthen India’s regulatory framework and reinforce India’s appeal as an outsourcing destination.

School Kit Donation Drive

The initiative occurred on the anniversary of India’s Independence Day. Tata Technologies volunteers provided School Kits containing pencils; paper, pens, shoes and other needed supplies to 55 students from the nearby Zilla Parishad School in Hinjawadi Village. In addition to the kits, employee volunteers provided lectures on various topics to the students. Tata Technologies volunteers also financially sponsored all of the books that students use in their studies for the academic year 2009 -2010. This initiative is now an annual commitment.

CORPORATE SOCIAL RESPONSIBILITY

The mission of the Tata Technologies Corporate Social Responsibility [CSR] program is to make a positive difference in 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, and better for the communities in which we serve. Better CSR now and better CSR in the future.

The following represent a partial listing of the many community initiatives Tata Technologies is supporting.

| XX

Swine Flu Education & Prevention

Employee volunteers from Tata Technologies has organized lectures on the importance of maintaining personal hygiene and provided this education to every home in the local Hinjawadi village. In addition volunteers have financially donated First Aid Kit along with respiratory masks as one way to combat Swine Flu prevention.

Blood Donation Drives

Each year, the Company organises two drives aimed at blood donations. In this past year 187 employees donated their blood, which achieved a new company goal through overwhelming response from our gardeners, security personnel, housekeeping staff, and contractors. Emergency blood transfusions are made available to the Hinjawadi neighboring villagers at no cost because of Tata Technologies employee blood donations.

Community Network Services Inc.

The Tata Technologies North America CSR Program closed calendar 2009 with two strong holiday season efforts. Employees again supported the Adopt-A-Family program administered by CNS of Oakland County. Tata Technologies employees collected funds and shopped for gifts for underprivileged families, all of which were presented, along with additional cash donations, to a CNS representative at the annual Holiday Luncheon in December, at the North American headquarters office in Novi, Michigan. CNS is a private, non-profit agency that provides comprehensive health and social services to nearly 3,000 individuals in Oakland County, Michigan, home of the Tata Technologies North American Headquarters facility.

Operation Christmas Drop

This initiative was a holiday season effort that had the Denver and Detroit offices teaming up to collect Christmas decorations and gifts to ship to the soldiers of the 3rd Battalion, 157th Field Artillery, a unit of the Colorado National Guard, deployed in Ramadi, Iraq and spending the holiday season away from their families and their homes.

XXI | Sixteenth Annual Report 2009-10

The Macomb Homeless Coalition

MHC is an umbrella association of providers of shelter and supportive services in Macomb County, Michigan, a community neighboring the Tata Technologies North American Headquarters facility. Tata Technologies donated a van-load of clothing – shirts, jackets and caps – bearing the Company’s old branding, following the re-branding initiative in April 2009. The Company also supports Homeless Connection Day annually (for which it won the previously mentioned recognition) and participates in ongoing support of the MHC Warming Center throughout each winter, collecting personal care items, clothes and bedding shared with shelter attendees.

Environmental Stewardship

The North America CSR Program initiated an office-recycling program at its facilities in North America to be better stewards of the environment. The program includes bins for the collection of waste paper and plastic bottles. Tata Technologies believes that companies have a responsibility to be stewards of the local environment, and with this move, Tata Technologies hopes to enhance its role as a corporate citizen by encouraging all professionals to participate at the office, and at client sites where such programs exist.

First Book

The Tata group encourages North America group companies to support First Book, a non-profit organization dedicated to giving children from low-income families the opportunity to own their first new books. First Book provides an ongoing supply of new books to children in community-based mentoring, tutoring, and family literacy programs. Founded in 1992, First Book was developed to leverage local volunteers who reach children through existing literacy programs such as Head Start centers, libraries, soup kitchens, churches, housing projects, and after school initiatives. Tata Technologies will launch the first Michigan-base First Book initiative in September 2010.

Colorado Coats

This past winter, Tata Technologies professionals initiated a campaign to be part of a local-to-Colorado, U.S. non-profit coat drive. In conjunction with Dependable Cleaners and KMGH-TV, Tata Technologies professionals donated dozens of coats for people in need throughout Colorado. It is believed to be the largest coat drive in the U.S. Since its inception in 1982, over 1.5 million coats have been distributed. Last year, more than 80,000 coats were donated to people and non-profit organizations in need.

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CSR Awards

On December 8, 2009, NA CSR Committee work was honored by the Macomb County Services Agency (MCCSA) at its annual Community Recognition Luncheon. “On behalf of the MCCSA, we would like to recognize and offer our thanks for the contribution that Tata Technologies has made to assist the homeless through MCCSA’s Continuum of Care and the Macomb Homeless Coalition,” read the award. CSR Committee members attended to accept the recognition on behalf of all the employees who have donated their time and funds, and on behalf of the Company for its support of these initiatives.

Tata Technologies also was recognized in December 2009, with a Platinum Award for the contributions of time and equipment to support the annual Community Network Services (CNS) “Community Connection Day,” at which employees volunteered their time to assist underprivileged individuals and families find affordable health care and housing, food and clothing, and resources to assist with employment. In addition, Tata Technologies donated the use of 10 Training Department laptop computers to identify resources online at the event, held in May 2009.

XXIII | Sixteenth Annual Report 2009-10

Board of Directors

\

Company Secretary

S RamadoraiChairman

R Gopalakrishnan

P R McGoldrick CEO & Managing Director

C Ramakrishnan

Anubhav Kapoor

P P Kadle

Company Auditors

Deloitte Haskins & SellsRegistered Office

25, Rajiv Gandhi Infotech Park,Hinjawadi, Pune - 411 057India

Registrars & Transfer Agents

TSR Darashaw Limited6-10, Haji Moosa Patrawala Industrial Estate,20, Dr. E. Moses Road,Mahalaxmi, Mumbai 400011Tel : 91 22 6656 8484Fax : 91 22 6656 8494E-mail: [email protected]: www.tsrdarashaw.com

BOARD OF DIRECTORS

1

NOTICE

NOTICE IS HEREBY GIVEN THAT THE SIXTEENTH ANNUAL GENERAL MEETING OF THE MEMBERS OF TATATECHNOLOGIES LIMITED will be held on Tuesday, July 20, 2010 at 3:30 p.m. at the Registered Office of theCompany 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, 2010 andthe 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 R Gopalakrishnan who retires by rotation and is eligible for reappointment.

4 To appoint Auditors of the Company to hold office from the conclusion of this Meeting until the conclusionof the next Annual General Meeting of the Company and to authorize the Board of Directors to fix theirremuneration. M/s Deloitte Haskins & Sells, Chartered Accountants, the retiring auditors are eligible forreappointment.

Special Business

5. Reappointment of Mr Patrick McGoldrick as Managing Director

To consider and, if thought fit, to pass with or without modification, the following resolution as an OrdinaryResolution:

“RESOLVED that pursuant to the provisions of Sections 198, 269, 309, 311, 316 and other applicable provisions,if any, of the Companies Act, 1956 (“the Act”), read with Schedule XIII of the Act, the Company herebyapproves the reappointment of Mr Patrick R McGoldrick, as Managing Director of the Company, for theperiod from September 1, 2010 to September 08, 2014 on the terms and conditions, as set out in theExplanatory Statement annexed to this Notice.”

“RESOLVED FURTHER that notwithstanding anything to the contrary contained herein, where in any financialyear during the currency of the tenure of Mr McGoldrick, the Company has no profits or its profits areinadequate, the Company will, subject to the approval of Government of India under applicable laws, if any,continue to pay remuneration by way of salary, incentive remuneration as set out in the ExplanatoryStatement.”

“RESOLVED FURTHER that the Board of Directors of the Company or a Committee thereof, be and is herebyauthorized to alter and vary the terms and conditions of the said reappointment in such manner as may beagreed and to do all such acts, deeds, matters and things as may be necessary, proper and expedient to giveeffect to this Resolution.”

Notes:

1. The relative Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of ItemNo. 5 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 VOTEINSTEAD 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 receivedby the Company at its registered office not less than 48 hours before the time for holding the meeting.

4. The Register of Members and the Transfer Books of the Company will be closed from July 06, 2010 toJuly 09, 2010, both days inclusive.

5. The dividend on Equity Shares as recommended by the Directors for the year ended March 31, 2010 ifdeclared will be payable on or after July 20, 2010 in accordance with the Resolution to be passed by theMembers of the Company.

6. As per the provisions of the Companies Act, 1956, facility for making nominations is available for Membersin respect of shares held by them. Nomination Forms can be obtained from the Company’s Registrar andTransfer Agents.

Sixteenth Annual Report 2009-10

Tata Technologies Limited

2

7. Members may please note the contact details of the Company’s Registrar and Transfer Agents, M/s TSRDarashaw Limited, as follows:

TSR Darashaw Limited6-10 Haji Moosa Patrawala Industrial Estate,20, Dr. E. Moses Road,Mahalaxmi, Mumbai- 400011Tel: +91 22 66568484 Fax: +91 22 66568494 Email: [email protected]: www.tsrdarashaw.com

8. Members are requested to notify the change in their Address, Bank Details, etc. if any, to the Company’sRegistrar and Transfer Agents. Shareholders should quote their folio numbers in all their correspondencewith the Company and the Registrar and Transfer Agents.

9. Members’ attention is particularly drawn to the ‘Unclaimed and Unpaid Dividend’ section under ‘GeneralShareholder Information’ in the Corporate Governance Report.

By Order of the Board of Directors

Anubhav KapoorGeneral Counsel and Company Secretary

Pune, June 21, 2010

Registered Office:25, Rajiv Gandhi Infotech Park,Hinjawadi,Pune – 411 057

3

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’) setsout all material facts relating to the business mentioned at Item No. 5 of the accompanying Notice:

Item No. 5:

1. Members at the Annual General Meeting of the Company held on June 25, 2005 had reappointed,Mr P R McGoldrick as the Managing Director of the Company for a period of 5 years effective September1, 2005. His present term of appointment expires on August 31, 2010. The Company had also obtainedapproval from the Central Government vide letter no.12/19/2006-CL. VII dated November 14, 2006 forthe above reappointment.

2. On the recommendation of the Remuneration & Compensation Committee and subject to the approvalof the Members, the Board of Directors of your Company (‘the Board’) at its meeting held on May 12,2010, has unanimously approved the reappointment of Mr McGoldrick, as the Managing Director ofthe Company for the period from September 1, 2010 to September 08, 2014 on the same terms andconditions. The Members may please note that Mr McGoldrick turns 65 years on September 08, 2014.The terms of reappointment of Mr McGoldrick inter alia, include the following:

i. Remuneration:

a. Salary: up to a maximum of Rs 4,00,000/- (Rupees four lacs) per month with authority tothe Board, which expression shall include a Committee thereof, to fix the salary withinthe above maximum amount from time to time. The annual increment will be merit basedand take into account the Company’s performance.

b. Incentive Remuneration: up to 200% of salary to be paid at the discretion of the Boardannually based on certain key performance criteria.

c. Further, Mr McGoldrick shall be provided with hotel accommodation and chauffeur drivencar during his stay in India and all expenses in connection with the Company’s officialbusiness shall be borne by the Company. Expenses incurred on air travel in connectionwith the Company’s work will be borne by the Company.

d. Provision of car and other facilities mentioned above for use of the Company’s businesswill not be considered as perquisites.

e. Apart from the above, the Company would not pay any commission to Mr P R McGoldrickand make any contributions to the Provident Fund, Superannuation Fund or AnnuityFund in respect of the said appointment. No gratuity is payable to the Managing Director.

ii. Minimum Remuneration: Notwithstanding anything to the contrary herein contained and subjectto any approvals, if required, where in any financial year during the currency of the tenure ofMr McGoldrick, the profits are inadequate, the Company will pay remuneration by way of salary,incentive remuneration, as specified above.

iii. Mr McGoldrick, Managing Director shall carry out such duties as may be entrusted to him,subject to superintendence, control and direction of the Board of Directors and shall beresponsible for the overall management of the Company.

iv. Other terms of reappointment include the following:-

a) The Agreement may be terminated by either party giving the other party three months’notice or the Company paying three months’ remuneration in lieu of the notice.

b) If at any time, Mr McGoldrick ceases to be a Director of the Company for any causewhatsoever, he shall cease to be the Managing Director of the Company. If at any time,Mr McGoldrick ceases to be in the employment of the Company for any cause whatsoever,he shall cease to be a Director of the Company without claim for compensation for lossof office.

c) Mr McGoldrick is appointed by virtue of his employment in the Company and hisappointment is subject to the provisions of the Act including Section 283 of the Act.

d) Mr McGoldrick shall not be entitled to supplement his earnings under the Agreementwith any buying or selling commission. He shall not also become interested or otherwiseconcerned directly or indirectly, through his relatives or controlled affiliates, in any sellingagency of the Company.



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3. In compliance with the provisions of Sections 269, 309, 316 and other applicable provisions of the Act, theterms of remuneration specified above are now being placed before the Members for their approval.

4. The above may be treated as an abstract of the draft Agreement between the Company and Mr McGoldrick,pursuant to Section 302 of the Act.

5. The draft Agreement between the Company and Mr McGoldrick is available for inspection by the Membersof the Company at its Registered Office between 10:00 a.m. to 12:00 noon on any working day of theCompany.

6. None of the Directors, except Mr McGoldrick, is concerned or interested in Item No. 5 of the Notice.

7. The Directors recommend the resolution at Item No. 5 of the accompanying Notice for approval of theMembers of the Company.

By Order of the Board of Directors

Anubhav KapoorGeneral Counsel and Company Secretary

Pune, June 21, 2010

Registered Office:25, Rajiv Gandhi Infotech Park,Hinjawadi,Pune – 411 057

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DETAILS ABOUT MR R GOPALAKRISHNAN, THE RETIRING DIRECTOROFFERING HIMSELF FOR RE-APPOINTMENT

Date of Birth & Age December 25, 1945; 64 years

Date of Appointment March 08, 2001

Qualifications Bachelor’s degree in Science and a B.Tech (Electronics)degree from the Indian Institute of Technology (IIT),Kharagpur.

Directorship held in Tata Sons Ltd

Other Public Companies Tata Motors Ltd

(excluding foreign companies) Tata Chemicals Ltd

Tata Power Co Ltd

Rallis India Ltd

Tata Autocomp Systems Ltd

ICI India Ltd and

Castrol India Ltd

Memberships and Chairmanships of Membership of Audit Committees

Audit/Investor Grievance Committees Tata Chemicals Ltd

in other Public Companies ICI India other Public Companies Ltd and

Castrol India Ltd

Membership of Investor Grievance Committees

Tata Motors Ltd

Shareholding 55,000 equity shares of Rs 10 each in the Company (0.15%of the Paid-up capital) as on March 31, 2010.



6

DIRECTORS’ REPORT

TO THE MEMBERS OF

TATA TECHNOLOGIES LIMITED

The Directors are pleased to present their Sixteenth Annual Report on the Business and Operations of yourCompany and the Audited Statement of Accounts for the year ended March 31, 2010.

1. FINANCIAL RESULTS

The summary of financial results of the Company for the year ended March 31, 2010 is as follows:

Rs. in crore

2009-10 2008-09

Income from Sale of Products & Services 382.39 371.20

Other Income 9.41 7.69

Total Income 391.80 378.89

Operating Expenditure 273.42 283.45

Profit before Depreciation, Interest and Taxes 118.38 95.44

Interest 1.71 3.67

Depreciation 9.38 8.15

Profit / (Loss) before Tax 107.29 83.62

Provision for Taxes 30.93 25.59

Profit / (Loss) after Tax 76.36 58.03

Balance brought forward from previous year 55.65 25.34

Amount available for Appropriations 132.01 83.37

APPROPRIATIONS

Interim Dividend - 11.14

Proposed Final Dividend 26.03 7.42

Tax on Interim / Proposed Final Dividend 4.32 3.16

General Reserve 8.00 6.00

Balance carried to Balance Sheet 93.66 55.65

2. REVIEW OF BUSINESS OPERATIONS

The global economic downturn during the year under review presented management with significantchallenges. Even so the Company recorded an overall revenue growth of 3.41% with an increase of 3.01%in revenue from sale of products and services, from Rs 371.20 crore in 2008-09 to Rs 382.39 crore in 2009-10.Due to stringent cost control, focus on operating efficiencies and offshoring, the operating profit registeredan increase of 24.04% over last year, while profit before taxes (PBT), grew at a rate of 28.31% on a year-on-year basis. Profit after taxes (PAT) grew by 31.59% during the same period.

During this period, services revenue increased by 11.13% and product sales decreased by 36.98% over lastyear to reach figures of Rs 342.93 crore and Rs 39.46 crore respectively. The services revenue comprisesEngineering Automation Group [EAG], Enterprise Solutions Group [ESG] and Product Lifecycle Management[PLM]. EAG addresses the engineering and design needs of manufacturers through services for all stagesof the product development and manufacturing process. ESG addresses the Information Technologyneeds of manufacturers including business solutions, strategic consulting, ERP implementation, systemsintegration, IT networking and infrastructure solutions and program management. PLM addresses theproduct development technology solution requirements of manufacturers including end-to-endimplementation of PLM technology, best practices and PLM consulting. PLM also includes the Company’sproprietary applications iGETIT® and iCHECKIT.

Revenue from delivery centers grew by 13.45% from Rs 91 crore in 2008-09 to Rs 103.24 crore in theyear 2009-10.

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3. DIVIDEND

The Board recommends a dividend of Rs 7/- per share, for the financial year 2009-10 on a pro-rata basis. Thetotal dividend including interim and final dividend for the financial year 2008-09 was Rs 5/- per share.

4. BUSINESS OUTLOOK

The economy has started to recover and the Company is putting increased emphasis on marketing, salesand delivery of value to its customers. As such it is seeing improved order bookings. Should the recoverycontinue, the Company expects improved growth in revenue, EBITDA and profit after tax. Should theeconomic recovery falter, the Company would still expect continued year-on-year growth in profit aftertax given the Company’s cash reserves and improvements in operating efficiencies. Please refer the sectionon 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 sharecapital of the Company:

a) The authorized share capital of the Company was increased from Rs 50 crore divided into 5,00,00,000shares of Rs 10/- each to Rs 60.70 crore divided into 6,00,00,000 equity shares of Rs 10/- eachand 7,00,000 0.01% cumulative non-participative compulsorily convertible preference shares ofRs 10/- each.

b) 86,487 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 37.16 crore to Rs 37.24 crore.

The Company is committed to employee participation in the future of the Company and has promotedand implemented various stock based incentive and ownership schemes from time to time. The details forthe last year are provided in Annexure I to this report.

6. REDUCTION OF SECURITIES PREMIUM ACCOUNT

The Company has been taking many initiatives to restructure its operations with a view to keepingabreast of global trends for its products and technologies thereby improving its financial performance. Aspart of its operational efficiency exercises, Company appointed consultants to review the global businessoperations, the integration process of European operations and the existing human resources policies. Inthe course, the Company also felt it prudent to undertake a financial restructuring exercise to enhanceshareholder value through improvement in future profitability and consequent increase in Earnings perShare and Return on Capital Employed. The restructuring will also help the Company to represent betteroperational efficiency improvements in the future years and the true shareholder value.

Considering the same, in terms of provisions of Section 78 read with Sections 100 to 103 and otherapplicable provisions, if any, of the Companies Act, 1956, Article 69 of the Articles of Association of theCompany and subject to the confirmation of the Hon’ble High Court of Judicature at Bombay, theShareholders of the Company at the Extra-Ordinary General Meeting held on March 5, 2010 approvedutilisation of a sum up to Rs 59.42 crore presently standing to the credit of the Securities Premium Accountof the Company, to adjust the voluntary retirement expenses/severance payments, consultancy expenses(relating to business restructuring)/provision for receivables incurred by the Company and/or its subsidiaries.

The High Court approved the scheme. As per the High Court order dated April 16, 2010, the amount ofRs 17.32 crore relating to the Company and amount of Rs 29.34 crore relating to subsidiary companies havebeen adjusted to the Securities Premium Account. As a result, an amount of Rs 46.66 crore has beenadjusted against the securities premium account in the consolidated financial statements of the Companyfor the year ended March 31, 2010.

7. HUMAN RESOURCE DEVELOPMENT

The Company had 2901 professionals, including permanent and contractual, as on March 31, 2010. TheCompany and its subsidiaries overall had 4036 professionals located in 14 countries on three continentsrepresenting 27 different nations. The Company’s philosophy is to staff and manage country organizationwith the citizens of those countries. This allows keeping decision making closer to the customers the



8

Company serves. The Company continued with its focus on attracting and retaining the best talent in theindustry. During the period, the Company added 885 employees overall, increasing its total strengthbeyond 4000 employees across all geographies. The attrition rate for FY2010 dropped by 10.5% from 19%to 8.5% on a global basis and from 14.3% to 8.08% in India. The core components to the Company’s HRstrategy include: attracting & retaining the best talent, becoming Employer of Choice and building robustHR capability model for growth and sustenance of the business.

The key factors of workforce engagement and satisfaction are determined through various HR initiativessuch as ‘ConeXion’ (an annual engagement survey conducted globally by Gallup), ‘One-to-One Dialogue’an initiative to connect with employees after every 121 days by HR Business Partners, and EmployeeBriefing sessions (held simultaneously across all geographies and locations) coupled with ‘Open House’, aquarterly briefing session used by the Tata Technologies leadership team to disseminate latest informationand updates about the Company followed by an open forum for employees.

Tata Technologies fosters a high performance culture through various workforce practices that distinguishesand recognizes good performers through the newly introduced web enabled global applicationPerformance Assessment & Competency Enhancement and provides structured feedback and developmentthrough Performance Improvement Plan for those requiring improvements. The Talent ManagementProcess focuses on identifying, developing and retaining the high potential employee in the Companythrough structured learning, deployment to niche global assignment and faster growth while the LEADprogram enables identification and development of leaders in junior management. The Reward &Recognition program rolled out globally has been a critical success factor in our employee motivationalinitiatives.

‘iGETIT’, a web based interactive self paced learning tool has been introduced to augment workforcelearning initiative for the global employee base. The tool is used for Induction of new joinees which hashelped not only in standardizing across geographies, but also improved productivity. The other modulesavailable on iGETIT are Tata Business Excellence Model, Tata Code of Conduct, Quality and process andother programs on upgrading specific functional, domain, and technical expertise as identified by thedelivery organization.

8. CORPORATE SUSTAINABILITY

Corporate Sustainability has been a cornerstone of the Tata philosophy from the beginning. Last year, theTata Technologies Corporate Sustainability Program (CSP) made a positive impact on the communities theCompany serves through Company’s support of select programs, outreach efforts and initiatives thatimprove and enhance the quality of life. The Company’s goal had been, and remains, to make things betterfor people, better for business, better now, and better for the future. Tata Technologies employees in allgeographies contributed for numerous initiatives in the areas of health & safety, community development,environment and education. Some of the initiatives which were taken up are as under:

Asia Pacific

� Blood donation and eye donation camps.

� Awareness campaign for empowerment of women, distribution of School Kits, employees teachingkids at schools in villages.

� “Safety Ryodan” initiative for road safety and traffic situation.

� Participation in awareness campaign on cyber safety and information security.

� Talent Search Program – Painting, Dance and Music competitions.

� Tree plantation programs.

� Donations for physically and mentally challenged people and contingency fund collection for naturalcalamities.

� The Singapore entity supported the Singapore Space Challenge 2010 by providing training and supporton CATIA to all participants. The event was organized by Singapore Space and Technology Association(SSTA) for intensifying arospace education in Singapore.

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North America

� Community Network Services (CNS) in Michigan: Supported the annual “Adopt-a-Family” program.Arranged gifts for underprivileged families.

� Christmas decorations and gifts for shipping to the US soldiers in Iraq.

� Employees volunteered to support the Macomb Homeless Coalition programs in Michigan.

� US CSR Team was recognized with a ‘Platinum Award’ for the contributions of time and equipment tosupport the annual Community Network Services (CNS), ‘Community Connection Day’.

Europe

� The UK CSR Committee organized an “Easter Eggstravaganza”, Easter celebration for children confinedto hospital.

� Sponsored a walk for children in need in United Kingdom.

The Company in the last year also took steps to formalize its CSP framework and align all the initiativesunder it. A Corporate Sustainability Committee has been formed to advise on CSP initiatives of theCompany in future. The objectives of the Company’s CSP framework are:

i) Drive the CSP initiative from the top i.e. at the Board and leadership level.

ii) Create awareness among its employees.

iii) Develop a framework which is strategically designed to encompass all five capitals- financial, natural,social, human and physical in Company’s initiatives.

iv) To train and motivate people in the organization to contribute fruitfully to the CSP initiatives. And,

v) To make periodic disclosures and reporting on the CSP initiatives.

9. QUALITY INITIATIVES

The Company continued its business excellence journey through the year. For the second time since theacquisition of INCAT, the Company participated as a single entity representing all geographies, in the TataBusiness Excellence Model ( TBEM) external assessment. The organization was assessed at the “EarlyImprovement” score band on the Business Excellence journey, moving up from “Early Results” score bandof 2008 external assessment, with 77 points delta. This makes Tata Technologies eligible for “Highest Delta”Award instituted by Tata Quality Management Services. This is awarded to all organizations which achieve75 plus points improvement in one year.

In the spirit of continuous improvement, the Company intends to move further up on the score band inthe 2010 external assessment. A detailed action plan has been made based on the outcomes of theassessment and is being monitored by the ‘Office of Strategic Management’ from the Managing Directorand COO’s office. In the 2010 external assessment, the Company will also be assessed on its corporategovernance practices.

Quality initiatives which had begun earlier bore fruit during the year. The main delivery center in Hinjawadi,Pune successfully completed implementing the Information Security Management System and achievedISO 27001 certification. This is a major milestone that demonstrates the organization’s ability to securecustomer and business-related information.

The Quality Management System (QMS) of the organization successfully cleared surveillance auditsmandated by the certifications to quality standards such as ISO 9001 and AS 9100.

A significant process initiative has been the enhancement of the Global Engagement Model (GEM). The“Bid Response” module is established and rolled out across all locations. The “Delivery” module is beingrolled out in a phased manner. GEM is a key component of the QMS. It streamlines operations, helpsestablish a robust onsite – offshore interface, provides metrics for monitoring projects and facilitatesimplementation of critical processes such as estimation and establishment of requirements, among others.

The Quality Portal has been revamped. This is the online repository of the quality manual, procedure,guidelines and templates which is accessible to all employees.



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The best practices established under the QMS in locations that are certified are being extended to otherregions starting with Thailand and Singapore operations. This would strengthen the interface betweenonsite and offshore and present a consistent face of the organization to its customers.

The quality initiatives, improvement activities and process performance are directed and monitored by theTata Technologies Process Group (TTPG). This is chaired by the Chief Executive and consists of Heads of allfunctions. The resources allocated to quality are reviewed and aligned to the organization’s business planand growth.

10. INFORMATION TECHNOLOGY (IT) INITIATIVES

The Company continued to drive its multi-year IT Systems Integration Roadmap aimed at providingefficiencies and scalability to its shareholders, customers & employees, while further integrating operationsacross its three key territories. To that effect, a dual-pronged strategy was followed aimed at (a) maximizingreturns on existing investments by streamlining business processes across all territories and (b) investingin new technology investments when it is underpinned by its long term business strategy.

Towards the first objective, the Company matured its usage of its SAP ERP systems across all key operations.Enterprise performance monitoring was driven through the use of integrated Business Analytics to ensurea unified view of the Company’s global performance – driving alignment across key functions andterritories. Business systems were also enhanced to reflect the creation and operations of the two distinctgo-to-market strategies – Global Services and PLM Solutions. The Global Delivery Organization wase-enabled to monitor efficiencies through service profitability based metrics. Associated systems such asTime Booking/Leave Management were also deployed as required.

The Company invested in expanding its Global Engagement Management (GEM) processes through thedeployment of associated systems across its key delivery center operations. The GEM-iT systems andprocesses enable the Tata Technologies Delivery Practices: aimed at delivering sustainable services to itscustomers. The Company also completed automating its recruiting operations across all territories as akey component of its ability to rapidly and efficiently identify and recruit the right talent across the globe.

The Company continued its progress towards integrating its underlying IT infrastructure and associatedgovernance across its three territories by networking each of its global operations. The Company isadopting ITIL (Information Technology Infrastructure Library) as a Service Delivery Framework for allinternal operations. Significant investments were made towards several private/public collaboration/network connectivity solutions with key customers as the Company ramped their delivery operationsfrom each of the Company’s global delivery centers. Lastly, the Company has invested in several enterprise& desktop communication/collaboration tools aimed at bringing together employees.

Information Security and the protection of customers/corporate/employee information assets continuedto be a key focus through its ISO27001 certification. The Company routinely conducted internal andcustomer led audits to ensure continuous compliance to its intellectual property securityrequirements. Lastly, the Company has invested in several enterprise and desktop communication/collaboration tools aimed at bringing together employees. The continuous utilization, deployment andgovernance of its various business and IT systems is governed through a quarterly governance processcomprised of both internal and external audits.

11. SUBSIDIARY COMPANIES

The Company had nine subsidiary companies as on March 31, 2010. The Company continued to review andreorganize all its subsidiaries.

The following changes occurred with respect to the Company’s corporate structure/subsidiaries duringthe previous year:

a. Asia–Pacific: Considering the operation level and financial position of INCAT KK, Japan, it was decidedto close the company. The Company was liquidated w.e.f. July 31, 2009.

b. Europe: All operations in Europe are being consolidated under Tata Technologies Europe Ltd, UKand will be conducted through branches in Germany, France, and Netherlands. INCAT Holdings BV,Netherlands was liquidated w.e.f. April 11, 2009. Lemmerpoort BV (formerly, INCAT EngineeringSolutions BV), Netherlands was liquidated w.e.f. December 04, 2009. The subsidiary companies in

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With the liquidation of INCAT Holdings BV, Lemmerpoort BV and INCAT KK, the number of subsidiaries ofthe Company has been reduced from 12 to 9 during the year.

Joint Venture: Tata HAL Technologies Ltd is a 50:50 joint venture between the Company and HindustanAeronautics Limited (HAL), with its corporate office situated in Bengaluru, Karnataka. Tata HAL TechnologiesLtd is in the business of providing engineering and design solutions and services in the domain ofaerostructures for the aerospace industry. The Company reported revenues of Rs 0.57 crore for the FY 2009-10 as against the revenues of Rs 0.23 crore in FY 2009 an increase of 147.83% over last year. The loss for theyear was Rs 1.58 crore as against Rs. 2.10 crore in FY 2009. Considering the tax losses of the Company, noprovision for tax has been made in the books of account.

Consolidated Results: In accordance with the Statement of Accounting Standard on Consolidated FinancialStatements (AS 21) issued by the Institute of Chartered Accountants of India (ICAI), subsidiaries of theCompany and 50% share in Joint venture Company have been considered in the Consolidated FinancialStatements of the Company, attached in a separate section of this report. As may be seen from theconsolidated statements, the consolidated revenue was Rs 1096.69 crore, a decrease of 11.64% againstRs 1241.19 crore in the previous year. The profit before tax was Rs 125.97 crore as against Rs 92.89 crore inthe previous year, recording a growth of 35.61%. The profit after tax was Rs 91 crore as against Rs 65.87crore recording a growth of 38.15%.

The Services/Products business mix was a 74/26 split respectively (Rs 787 crore for services and Rs 284 crorefor products) compared to FY 2009 when the Company recorded Rs 875 crore for services andRs 327 crore for product or a 73/27 mix. The Americas produced Rs 394.52 crore with Asia Pacific recordingRs 419.22 crore and Europe generating Rs 364.59 crore. The three territories combined produced Rs 1097crore top line revenue after reducing inter-company billing, in FY 2010 compared to Rs 1241 crore forFY 2009.

On an application made by the Company under Section 212(8) of the Companies Act 1956, the Central

Germany and France will be dissolved in due course. During the year, branches of Tata TechnologiesEurope Ltd were registered in Netherlands, Germany and France.



12

Government exempted the Company from attaching copy of the Balance Sheet, Profit and Loss Account,Directors’ Report and Auditors’ Report of the Company’s subsidiaries and other documents required to beattached under Section 212(1) of the Act to the Balance Sheet of the Company subject to certain conditions.Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist ofthe financial performance of the Company’s subsidiaries is attached elsewhere as part of the report. Theyare 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 theCompany or to any member/investor of its subsidiary.

12. DIRECTORS

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association,Mr R Gopalakrishnan is liable to retire by rotation and being eligible offers himself for reappointment.

13. AUDITORS

M/s Deloitte Haskins & Sells (DHS), Chartered Accountants, the Company’s Statutory Auditors, hold officeuntil the conclusion of the ensuing Annual General Meeting. It is proposed to reappoint them to examineand audit the accounts of the Company for the financial year 2010-11. M/s Deloitte Haskins & Sells, havepursuant to Section 224(1B) of the Companies Act, 1956, furnished the relevant letter confirming theireligibility and willingness for reappointment as the Statutory Auditors, should they be so appointed. Themembers are requested to appoint Auditors for the current year and fix their remuneration.

14. PUBLIC DEPOSITS

Your Company has not accepted any deposits from the public in terms of Section 58A and/or Section 58AAof the Companies Act, 1956 during the year under review. And hence, no amount is outstanding under thehead Public Deposits as on March 31, 2010.

15. PARTICULARS OF EMPLOYEES

A statement containing the names and other particulars of employees of the Company as required underSection 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975is given as Annexure II to this Report.

16. MANAGEMENT DISCUSSION AND ANALYSIS

The readers are advised to refer the separate section on the Management Discussion and Analysis in thisReport.

17. CORPORATE GOVERNANCE REPORT

The readers are advised to refer the separate section on Corporate Governance in this Report.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

Conservation of Energy: The operations carried out by the Company in all its locations are such that they arenot deemed as energy intensive. However, the Company constantly makes efforts to avoid excessiveconsumption of energy. Measures were initiated to raise consciousness of the need to conserve power andwater. At the Hinjawadi delivery center, solar water heaters were installed in the Guest House and theWellness Centre. The schedule of switching on/off lights and AHU’s was monitored continuously keepingin mind factors of climate, availibility of power and working hours. LED lights are being considered as areplacement for CFL wherever possible in all new facilities. The Company remains committed to deployingmore efficient energy saving measures. New technologies/options are regularly monitored and effortswill continue to conserve energy.

Technology Absorption: The Company’s commitment to become the world leader to the manufacturingindustry is reiterated. The Company’s Engineering teams have been working with Tier 1 automotive,aerospace and industrial and consumer goods companies across the globe for two decades to createbetter products which benefit people.

The services provided by the Company are entirely focused on helping other companies build betterproducts, define better processes, and reduce costs along the way. As an example of technologicalcapabilities, the Company has developed technological capabilities in knowledge based engineering andCAE 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 manufacturingdomain – From planning to layout to simulation to implementation which enables engineers tomake intelligent decisions in the virtual environment without committing to the costs of physicalequipment.

13

� PLM: The Company integrates complete product lifecycle solutions with engineering and designprocesses, industry-leading technology, and resources to create better products. The Company coversall 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 forthe client’s processes and technology.

Efforts continue to make innovation a key component in all the domain areas. Constant efforts areunderway to improve the engineering and design skills of the Company’s professional staff. Opportunitiesare created to achieve technological strengths and achieve technological excellence in the areas wherethe Company operates. The Company continues to upgrade its technological capabilities on a regularbasis. The absorption of newer and better technology, upgradation of the technological strengths andconstant innovation are given high importance.

Foreign Exchange Earnings and Outgo: Information pertaining to the foreign exchange earnings andoutgo during the year under review, in terms of the Notification 1029 of 31-12-1988 issued by the Departmentof Company Affairs is as follows:

Rs in crore

2009-10 2008-09

Earnings in foreign currency 79.00 72.62

Expenditure in foreign currency 31.97 52.47

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act 1956, the Directors, based on the representationsreceived from the Operating Management, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followedand that there are no material departures;

ii. they have, in selection of the accounting policies, consulted the Statutory Auditors and have appliedthem consistently and made judgments and estimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;

iii. they have taken proper and sufficient care, to the best of their knowledge and ability, for themaintenance of adequate accounting records in accordance with the provisions of the CompaniesAct, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities;

iv. they have prepared the annual accounts on a going concern basis.

20. ACKNOWLEDGEMENTS

Your Directors would like to express their heartfelt gratitude to all the customers, business partners, bankersand auditors for their continued support and association. The Directors also wish to thank the governmentand 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 andcollective contribution of all the employees in the overall growth and progress of the Company duringthe last year.

The Directors, finally, would like to specially thank and place on record their gratitude to all the members ofthe Company for their faith in the management and continued affiliation with the Company.

On behalf of the Board of Directors

S RAMADORAIChairman

Mumbai, June 21, 2010



14

Annexure I

EMPLOYEE STOCK OWNERSHIPS SCHEMES

a) Tata Technologies Employees Stock Option Plan (TTESOP – 2001)

The status of the options granted, vested, exercised and forfeited during the financial year ended March31, 2010 are as under:

ESOPs as on March 31, 2010

Number of Options Granted, Vested, Exercised and Forfeited

1 Options granted as on April 1, 2009 268377

2 Further options granted during the financial year 2009-10 NIL

3 Options vested during the year 59663

4 Options exercised during the year (one option represents one share) 81798

5 Cashless options exercised during the year NIL

6 Options lapsed/forfeited during the year 5776

7 Options granted as on March 31, 2010 180803

8 Options available for Grant 37407

The price for grants is computed every year based on the average of A) book value and the Net AssetValue (NAV) of the Company as per the last audited accounts and B) Price determined on the basis of thePE ratios of the software companies engaged in similar line of business. The details on the Earning PerShare and the ESOP share price performance can be found Management Discussion and Analysis Report.

b) Employee Stock Purchase Program- Series III (ESPP- Series III)

The Company had formed the “Tata Technologies Limited Employees Stock Option Trust” to manage andimplement various stock based incentive programs for the employees of the Company. The Trustimplemented an employee stock purchase program in the last financial year, ‘Employees Stock PurchaseProgram- Series III.’ The offer was open to all the employees of the Company including the seniormanagement personnel. 65 employees purchased for cash, a total of 52,251 shares of the Company atRs 196/- per share.

c) Share Repurchase Program by Tata Technologies Limited Employees Stock Option Trust

Since the Company’s shares are currently not listed on any Stock Exchange and there is no ready marketon which to buy and sell the Company’s shares, the Trust in the interest of employees, implements ShareRepurchase Program with an objective to provide liquidity and exit option for the employees and ex-employees of Tata Technologies Limited. The shares so purchased by the Trust will be reissued to theemployees of the Company under various stock based schemes which may be implemented from time totime. 25 employees/ex-employees submitted requests for sale of 22,350 shares to the Trust till March 31,2010 at Rs 196/- per share. The Trust may continue to purchase shares subject to the availability of fundsand solely at its discretion in consultation with the Stock Allotment Committee of the Company.

15

1 Agarwal A K 54 Program Manager - 2,777,064 2,033,474 M Tech 31 1-Apr-1997 Tata Motors Ltd-Body Systems Manager-3 yrs

2 Agashe Suhas 55 Global Resource 4,404,783 2,949,198 BE (Elec), MMS 31 1-Oct-2001 Savant Software Inc-Chintaman Manager Executive Director-1 yr

3 Agrawal P K 58 Program Manager - 3,049,739 2,137,321 PGDIE 33 1-Apr-1997 Tata Motors Ltd-Enterprise Solutions Manager-3 yrs

4 Apte S D 46 Project Manager - 2,699,805 1,895,482 M Tech 23 1-Apr-1997 Tata Motors Ltd-Body Systems Manager-2 yrs

5 Apte Vivek 41 Project Manager- PDV 2,606,067 1,834,562 BE, ME 17 22-Aug-2005 TVS Motors-DGM-1 yrTryambak

6 Athale C P 58 Project Manager - PE 2,883,681 2,045,828 BE(Mech), DBM ; 34 1-Apr-1997 Tata Motors Ltd-MDBA, MIE Manager-3 yrs

7 Bhapkar Umesh 41 Program Manager - 2,613,412 1,876,569 BE(E & TC) 19 17-Jun-2002 Digital Global Soft Ltd-Suresh Systems Integration Project Manager-2 yrs

8 Bhatlawande V R 52 Program Manager - 2,508,202 1,792,998 BE (Prod); 25 1-Jul-1998 SKF Bearing India LtdEnterprise Solutions AICWA -Cost Controller-3 yrs

9 Chafekar Abhay S 53 Head Cab Design - 4,089,372 2,829,158 BE 31 1-Apr-1997 Tata Motors Ltd-PCBU, ERC Manager-3 yrs

10 Chandra R 50 Global Head of 5,076,966 3,532,687 BE, M Tech 29 1-Apr-1997 Tata Motors Ltd-SrEnterprise SolutionsGroup Manager-1 yr

11 Chandrasekhar V 52 Program Manager - 3,320,413 2,405,805 BE, PGDBM (MBA) 29 1-Apr-1997 Tata Motors Ltd-Systems Integration Manager-3 yrs& Support

12 Chandru K 52 Head Engines- 2,849,664 1,995,363 BE, M.E (Mech) 28 1-Jan-2001 Tata Motors Ltd-Passenger cars , ERC Manager-2 yrs

13 Chigullapalli 39 Program Manager 2,738,870 1,940,217 B Tech; ME 16 18-Feb-1994 Tata Motors Ltd-Anil K Asst Manager -

Development-2 yrs14 D’Cruz Brian B 54 Program Manager 3,090,816 2,155,969 BE (Mech) 32 1-Apr-1997 Tata Motors Ltd-

Manager-3 yrs15 Deo Yogesh 37 Project Manager - KBE 2,558,027 1,848,641 M Tech 14 1-Apr-1998 Tata Motors Ltd-

Vinayak Manager-1 yrs16 Deshpande A H 44 Project Manager - PDM 2,621,126 1,859,407 BE; DCM; 20 1-Apr-1997 Sulzer India Ltd-Senior

DBM, MMS Engineer-4 yrs17 Deshpande M R 46 Program Manager - 2,779,997 1,997,135 BE-(Mech); MMS 25 20-Apr-1999 Voltas Ltd-

Enterprise Solutions Production Planning &Control Mgr-3 yrs

18 Deshpande V S 45 General Manager - 2,653,485 1,877,323 B Com, ACA 17 10-May-1998 Skansen Engg &Accounts & Taxation Consultancy Co. Ltd -

Chief Accountant - 5 Yrs19 Dole Sharad S 55 Practice Manager - 3,909,367 2,683,330 BE 32 15-Oct-2007 IBM-Delivery -

Enterprise Solutions Project Executive-1 yr20 Fernandes 60 Project Manager - PE 1,374,904 903,968 SSC ; NCTVT; 41 1-Apr-1997 Tata Motors Ltd,

Micheal R* DME Design Engineer, 3 Yrs21 Gajengi 60 Team Leader - PE 571,073 493,078 DME 38 1-Apr-1997 Victor Mopeds, Engr

Laxmirajam L* Trainee - 3 Yrs22 Ghatol G L 58 Project Manager - 2,798,030 2,011,680 BE( Mech) 34 1-Apr-1997 Tata Motors Ltd-

Body Systems Manager-8 yrs23 Ghosh K K 53 Head - Corporate 3,622,464 2,479,931 M Tech(IR & OR) 30 1-Apr-1997 Tata Motors Ltd-Sr

Initiative Manager-3 yrs24 Ghosh S 50 Global Head of 4,014,748 2,834,164 B Tech 29 1-Apr-1997 Tata Motors Ltd-

Engineering & Design Manager-3 yrs25 Gopakumar P K 56 Head - Compensation 2,737,464 1,940,516 BA, M.A, MPM 34 5-Jul-2007 Perot Systems-Senior

& Benefits Manager-1 yr26 Guha Subir K 57 Program Manager - 3,584,903 2,488,342 M Sc, PGDIPL 34 1-Jul-1998 Tata Motors Ltd-Sr

Tata Engineering Manager-4 yrs27 Gupta Samrat 37 Chief Financial 6,665,446 4,701,291 BCom, MBA, CFA 13 18-Apr-2007 HCL-General Manger -

Officer Finance-6 mths28 Jain Manoj K 54 Program Manager 4,497,620 3,085,673 M Tech DBA 29 1-Apr-1997 Tata Motors Ltd-

Sr Manager-2 yrs29 Janorkar R K 51 Competency 3,485,521 2,462,643 DET, BE 26 1-Apr-1997 Tata Motors Ltd-

Centre Manager - PDM (Elec& Tele) Dy Manager-2 yrs30 Joshi Ashok G 54 Practice Head - 4,893,992 3,355,805 BE (Mech) 32 1-Apr-1997 Tata Motors Ltd-

Product Design and V Manager-8 yrsalidation

31 Julka Wishwas 35 Associate Vice 3,626,787 2,610,030 DEE, B Tech, MBA 11 9-Feb-2005 Comsat Max Ltd-President - PLM Solutions Business Manager-6 mths

32 Kapoor Anubhav 38 General Counsel & 3,924,166 2,770,267 CS , LLB , MBA 16 5-Apr-2006 Polaris Software Lab Ltd-Company Secretary Vice President Legal

& Co Secretary-3 yrs33 Karyakarte 44 Project Manager - 2,821,675 2,017,511 BE (Mech); 23 1-Apr-1997 Tata Motors Ltd-

Sandeep K ERC Styling MMS; M-Des Manager-3 yrs34 Kaulgud Milind M 46 Head - Human 5,283,066 3,648,305 BCom , MBA 22 24-Sep-2007 T-Systems-Chief Human

Resources Resource Officer-3 yrs35 Khedkar G M 50 Associate Vice 3,252,122 2,331,035 BE; DIE 28 1-Apr-1997 Tata Motors Ltd-

President - E&D Manager-3 yrs36 Krishna Mohan J 54 Program Manager - 3,414,887 2,356,859 M Tech, 28 1-Apr-1997 Tata Motors Ltd-

Enterprise Solutions PGCST, NCST Sr Manager-3 yrs37 Krishnan Seshadri 45 Program Manager - 3,643,853 2,567,696 CA 22 30-Jun-2004 B M Associates-Chief

Enterprise Solutions Operating Officer-1 yr38 Kulkarni Arun K 54 Program Manager - 3,297,222 2,286,663 M Tech 29 1-Apr-1997 Tata Motors Ltd-

Enterprise Solutions DGM-1 yr39 Kulkarni R N 49 Project Manager - PE 2,424,849 1,766,315 DME 31 1-Apr-1997 Tata Motors Ltd,

Design Engineer, 3 Yrs40 Kulkarni U G 58 Project Manager - 2,510,930 1,795,081 BE (Mech),DBM 34 1-Apr-1997 Tata Motors Ltd,

PLM Systems Engg Auto Asst Manager - 3 Yrs41 Kulkarni V G 44 Project Manager - 2,523,394 1,799,776 MCM 22 1-Apr-1997 Tata Motors Ltd-

Enterprise Solutions Asst Manager-1 yr42 Kumar R 55 Associate Vice 3,154,369 2,208,998 M Tech 31 1-Apr-1997 Tata Motors Ltd-

President - E&D Manager-3 yrs43 Manoj K N 39 Head - Organization 3,079,359 2,166,190 BE/PGDBM 17 6-Aug-2007 Perot Systems-Director

Development -1 yr

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, 2010

Sr Name Age Designation/ Gross Net Qualification Total Date of Last(Years) Nature of Duties Remuneration Remuneration Experience Commencement Employment-

Rs. Rs. (Years) of Employment Designation-Period

Annexure II



16

Sr Name Age Designation/ Gross Net Qualification Total Date of Last(Years) Nature of Duties Remuneration Remuneration Experience Commencement Employment-

Rs. Rs. (Years) of Employment Designation-Period

44 Mazumdar Saibal 45 Program Manager 2,761,776 1,984,420 M Tech 19 1-Apr-1997 Tata Motors Ltd-Asst Manager-4 yrs

45 Misra Neerja 51 Program Manager - 2,447,890 1,773,228 B Tech 28 1-Apr-1997 Tata Motors Ltd-Enterprise Solutions Manager-2 yrs

46 Moorthy Shreekanth*41 Global Head - Product 3,724,233 2,593,575 BE, MS 16 17-Mar-2009 Siemens ProductLifecycle Management Lifecycle Management

Inc - Director - 1 Yr47 Murthy B V V S* 60 Project Manager 725,189 549,299 BCom 38 1-Apr-1997 Tata Motors Ltd,

Asst. Manager - 5 Yrs48 Nigam S K 53 Program Manager - 3,682,194 2,549,395 BTech 31 1-Apr-1997 Tata Motors Ltd-

Enterprise Solutions Prog. Manager-3 yrs49 Parikh Yatin D* 47 Project Manager - 365,841 332,521 BCom, C A, LL.B 15 3-Jan-2005 Shalina Labs, Manager

Enterprise Solutions 2 Yrs50 Patil Atul B 46 Associate VP - 2,919,339 2,098,657 BE; M E; MS 21 27-May-2003 Onward Tech. Ltd-

Strategic Marketing (Auto), MBA(Mkt) Manager -1 yr51 Patwardhan 50 Head - Current 3,202,369 2,211,063 MS; BE 26 2-Jul-2007 Tata Johnson-General

Ashutosh G Engineering Manger-4 yrs52 Peshave Milind 49 Program Manager 3,085,186 2,157,828 DME, BE (Mech), 24 1-Jan-2001 Tata Motors

Dnyaneshwar ME (Mech) Ltd-Manager-2 yrs53 Petkar 43 Head Engines 3,514,790 2,492,813 BE, M Tech 21 1-Oct-1999 Tata Motors Ltd-

Rajendra M -Commercial Manager-2 yrsVehicles-ERC

54 Pillai Santosh G 48 Vice President - 6,081,342 4,178,612 PGDM, BE 26 3-Sep-2007 Atos Origin India PvtEnterprise Solutions Ltd- Sr. GeneralGroup Manager-5 yrs

55 Rajasekaran T 58 Vice President - 7,546,418 5,134,441 BTech (Mech), 36 1-Apr-1997 Tata Motors Ltd-Engineering DBM Divisional Manager-Automation 5 yrs

56 Rajhans R G 49 Program Manager 3,091,120 2,165,909 BE; M Des 24 1-Apr-1997 Tata Motors Ltd-Asst Manager-4 yrs

57 Ranjan Shree 55 Program Manager - 2,873,444 1,995,164 M Tech, IE, PHD 30 1-Apr-1997 Tata Motors Ltd-Enterprise Solutions Manager-3 yrs

58 Raste S N* 60 Project Manager - 1,351,064 787,028 DM E-; Mech. 42 1-Apr-1997 Tata Motors Ltd,Body Systems D’ Man Design Engineer - 4 Yrs

59 Roy Avijit 49 Program Manager 3,881,868 2,669,688 M Tech 25 1-Apr-1997 Tata Motors Ltd-SrManager-1 yr

60 Sahamate 43 Project Manager - PE 2,683,052 1,919,895 BE 19 9-May-2005 Plexion Technologies-Sunil Sadanand Project Manager-1 yr

61 Salunkhe D P 41 Project Manager - PDV 2,413,364 1,702,736 BE(Mech); DBM 20 1-Apr-1997 Tata Motors Ltd-Deputy Manager-3 yrs

62 Saranu 38 General Manager - 3,166,793 2,244,500 BCom, CA 15 18-Jun-2007 KPMG -Venkateswarlu Accounts & Taxation Senior Manager - 1 yr

63 Saraph Shailesh P 39 Project Manager - KBE 2,592,994 1,840,437 BE; MMS 18 1-Apr-1997 Tata Motors Ltd-Senior Engineer-1 yr

64 Singh Ghanshyam Practice Head - 4,769,419 3,258,063 B Tech 32 2-Jul-2001 E.Vyapar-Sharan 55 e Business CEO-1 yr

65 Sinha Anil Kumar 46 Associate 2,483,885 1,807,895 BE 26 16-Oct-2000 Vybra Automat, PlantVice President - E&D Manager - 4 Months

66 Shandilya Rahul 39 Associate 2,589,574 1,900,127 BE 17 1-Apr-1997 Tata Motors Ltd,Vice President - ESG Senior Officer (HR) -

2 Yrs67 Shete M S 45 General Manager - 3,133,226 2,227,399 M Com, CA 23 1-Apr-1997 Tata Motors Ltd-

Commercial Manager-2 yrs68 Shome Biswadip 43 Associate 3,361,769 2,398,944 B Tech, MS, PhD 14 25-Oct-2004 General Electric-

Vice President - E&D Technical Leader-3 yrs69 Shukla Vineet Babu 48 Program Manager - 3,594,136 2,549,521 BE; M Tech 22 1-Apr-1997 Tata Motors Ltd-

Enterprise Solutions Prog. Manager-5 yrs70 Tarnekar A M 46 Product Manager-KBE 3,637,425 2,579,477 M Tech 21 1-Apr-1997 Tata Motors Ltd-

Dy. Manager-8 yrs71 Uchil Uday D 43 Finance Controller 2,865,187 1,959,204 BCom 20 1-Aug-1997 IBM Ltd, Executive

- 2 Yrs72 Umamaheshwaran 48 Chief Technology 5,452,192 3,771,915 M Tech 25 1-Apr-1997 Tata Motors Ltd-

T N Officer Divisional Manager-4 yrs

73 Veeramani K 51 Project Manager - 2,422,116 1,725,870 BE 31 10-Mar-1989 Tata Motors Ltd-Emission Systems Asst Manager-11 yrs

74 Veerkar Prasad V* 39 Project Manager - 467,869 437,054 BCS ; MBA 16 16-Jun-1997 Kale Consultants -Enterprise Solutions System Analyst - 2 Yrs

75 Wadekar Sushaiv 40 Associate Vice 2,980,782 2,083,895 MS 19 19-Mar-2007 Bentler Automotive-Sharad President - E&D Account Manager-5 yrs

SalesBentler76 Waikar A M 59 Program Manager - 4,541,624 3,109,376 MS (Indl. Engg.) 32 1-Apr-1997 Tata Motors Ltd-

Tata Engineering USA Divisional Manager-2 yrs

77 Yajnik Samir 47 President, Global 12,898,976 8,707,918 B Tech, MS 25 1-Apr-2007 TTPL, Singapore-ViceServices & COO, APAC President - EAG-5 yrs

Notes:1) 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.2) In addition to the above remuneration, employees are entitled to gratuity, medical benefits, etc., in accordance with the Company’s rules.3) 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.4) All the employees have adequate experience to discharge the responsibilities assigned to them.5) The nature of employment in all cases is contractual.6) None of the employees mentioned above is a relative of any director of the Company.7) Asterisk against a name indicates that the employee was in service only for a part of the year.

For and on behalf of the Board

S RamadoraiMumbai, June 21, 2010 Chairman

| 17| 17

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MD&A)

Overview

The economic crisis of 2009 left an impact on the global IT industry, resulting in unprecedented demand destruction for most companies. The global recession undoubtedly has been difficult, but overall, the companies who have survived the crisis are on a path of recovery due to various economic stimulus plans and internal company measures to preserve cash, implement austerity initiatives, and increase competitiveness.

Tata Technologies Limited also was affected by the global downturn, but was able to quickly take fiscal measures to reduce the impact on its financials. The Company launched and implemented an operational efficiency program to increase its business efficiency and to reduce cost. Although FY10 revenues were down, taking action to implement efficiency improvements and cost controls helped the Company to grow consolidated PAT by 31%.

A. Company Overview

Tata Technologies continues to be one of the leading providers of engineering and Product Lifecycle Management (PLM) services worldwide. The Company’s strong domain engineering pedigree, global presence in key automotive and aerospace markets, and diversified business portfolio of services and products is fueling the Company’s prospects for growth. The following chart provides an overview of the Company.

- India, United States, United Kingdom, Canada, Germany, France, Mexico, Singapore, South Korea, Thailand and Brazil

- 4000+ Employees

- Tata Technologies’ key value proposition is to be the leading technology provider to manufacturers globally through outsourcing of product development, enterprise solutions

and process deployment, and product lifecycle management software solutions.- The Company’s 3600+ professionals represent the largest technical workforce dedicated to

the offshoring of engineering services for the global automotive industry.- Tata Technologies is the largest India-based Engineering Services Outsourcing provider.

Business Deliverables

- Engineering & Design Services- Product & Information Lifecycle Management- Enterprise Solutions & Process Automation Tools- Value Added Reseller of Products

Industries Served

- Automotive- Aerospace- Manufacturing

Top 15 Clients

Footprint

Business

Overview

18 | Sixteenth Annual Report 2009-1018 | Sixteenth Annual Report 2009-10

B. Industry Structure and Developments

Engineering Services Outsourcing [ESO]

Despite economic headwinds, the rate of new product development and new design innovation has not slowed. Actually, great companies typically accelerate product development during difficult economic times, to emerge stronger and more competitive. Manufacturers of consumer products realize that the majority of their revenue in 18-24 months is a result of product innovation today. There once was a time when this only had an impact on consumer electronic product companies. But today, this has become a reality for many other industries including automotive, aerospace, medical, etc. Reducing time-to-market is one of the primary reasons companies are seeking to maximize their approach to product development through value-added service functions such as engineering services.

Traditionally, many companies retained engineering as a core function and retained tight controls around product development within the company. But as globalization of IT services became a viable option in the 1990s, some companies also looked to source low value-added engineering activities such as drawing re-creation and 2D-3D modeling to external providers. Today, with the availability of high-speed internet connectivity, computing technology commodities, and globally accessible deep engineering talent pools, the globalization of engineering services has just started.

Product-based companies have more options than ever for new product development. Entirely new automobile vehicle programs are being engineered and manufactured on a global basis to meet the needs of new and emerging markets. Aerospace OEMs are collaborating with suppliers on virtually every continent to engineer and assemble complex aircraft to meet the future demands of commercial air transportation. Today’s new product development requires technology-driven processes and global digital collaboration in order to optimize design iteration in minutes instead of days. For savvy product development companies, engineering services are no longer optional in order to remain competitive and to gain access to new markets. A 2005 survey by Booz Allen Hamilton and Duke University’s Center for International Business Education and Research (CIBER) found that 36% of companies surveyed sent some of their engineering offshore, 31% offshored some research and development, and 16 percent shipped out a portion of their product design.

ESO Industry Sectors and Demand/Spend

According to many industry analysts, demand for engineering services will grow substantially across most industry sectors and geographies through 2020.

Another study by Booz Allen Hamilton, this one for India’s National Association of Software and Service Companies (NASSCOM), titled “Globalization of Engineering Services,” reports that “Global spending on engineering services is large and rising - constituting about 2% of global GDP, and companies are increasingly moving these high-value services to emerging markets as the next step in globalization.

The global engineering and R&D Spend is expected to touch USD 1.1b by FY2020. The biggest contributors will be Hi-Tech (35%), Automotive (17%) and Aerospace (8%) industries. These industries are followed by; Construction/Industrial (4%), Utilities (2%), Other (34%) which includes Pharmaceuticals, Chemicals, Biotechnology, Medical Devices etc.”

Hi-Tech29%

Utilities3%

Other37%

Const/Indus.4%

Aero8%

Auto39%

Hi-Tech35%

Utilities2%

Other34%

Const/Indus.4% Aero

8%

Auto17%

CY2006 CY2020E

| 19| 19

ESO Growth Drivers

There are many industry analyst reports that identify the key drivers for the growth of the ESO market. To be certain, these drivers are changing as global economic and geo-political events fluctuate. The three current drivers are Cost Containment, Time-to-Market, and Resource/Availability Scalability.

Cost Containment: The initial attraction of low cost still remains a key motivation for companies looking to outsource engineering services despite increasing costs from emerging countries where many ESO providers reside. However, companies are finding significant pools of scientific and highly skilled professionals with deep domain experience. Access to cost effective skills has long-term implications for overall product development. With access to more expertise at lower costs, companies have greater flexibility in determining their product development strategies.

Time-to-Market: Market advantage is often summed up in one word – speed. Getting a great product to market before the competition often, is the key to market growth. The 2007 release of the Apple iPhone representing the next generation of smart phone technology has sold more than 50 million units in just three years. According to Apple Computer’s latest quarterly earnings report, the iPhone now represents nearly 50% of the company’s total revenues. Meanwhile, other smart phone manufacturers are seeing their market share erode.

Follow-the-sun strategies are complex, and they require more effort than just working harder; but truly working smarter, in order to achieve the desired time-to-market objectives. The challenge of designing new products that comply with standards of quality, reliability and sustainability requires access to highly-skilled engineering resources, state-of-the-art technology and seamless integration between organizations and suppliers globally.

Resource Availability/Scalability Demand: In today’s product development environment, it is not enough just to have skilled engineers; they must be available when they are needed. Furthermore, product development is no longer done in a serial mode but rather that an increasing number of all phases of product development are done in parallel. This new environment mandates the availability of skilled resources and the ability to scale-up the size of teams in order for companies to achieve time-to-market objectives. The combination of availability and scalability represents the flexibility that ESO providers must provide. In many developed economies this critical gap of flexibility has not been met requiring companies to develop human capital strategies for sourcing talent that include availability and scalability on demand.

ESO Implications for India: India is well-positioned as the destination of choice for companies looking to continue to globalize their product development strategies. India has a large pool of engineering expertise with its talent pool expected to grow as hundreds-of-thousands of new engineering graduates become available each year. In addition, India’s computing, communications and transportation infrastructure is improving exponentially to accommodate global demands. India’s cost structure – while increasing – is very competitive to other emerging countries. India’s education system, which promotes the English language as the language of choice for professionals, is attractive to many western companies. Finally, the growing consumer base in India creates new opportunies for global companies seeking new customers. These key advantages are expected to spur ESO growth in India to more than 600% over the next decade.


Engineering Offshoring is a growth market

ROW3%

ROW5%

Europe20% Europe

30%

Japan13%

Japan15%

North America50%

India ER&D Offshore Revenues

by Geography

(2008)

India ER&D Offshore Revenues Projection

by Geography

(2020)

Total: $6 - $7 billion Total: $30 - $40 billion

Source Booz Allen

According to the NASSCOM 2009 Strategic Review, India’s ESO 2009 revenue [strictly associated with product design and engineering] was USD 2.65 billion When consolidation revenues associated with telecommunications services, in-house company [captive] engineering services, and software development/IT under ESO, the total 2009 ESO revenues were USD 9 billion, according to a different 2009 study conducted by Booz Hamilton. These same studies indicated that the Indian ESO industry employs approximately 150,000 individuals. In addition, the reports indicated that the ESO market has higher growth rates in IT than other segments in the same time period.

ESO Differentiation

There are two clear categories of differentiation of ESO providers in India. The first category represents large IT/Business Process Outsourcing [BPO] services firms. They tend to have excellent market reach into large multi-national organizations and thus have greater ability for scalability of resources. These companies also manage good cash flow and cash preservation. However, they lack domain skills in areas requiring extensive experience in engineering and scientific endeavors. Therein lies the reason why telecommunications outsourcing usually dominates the overall Indian ESO market.

The second category, as defined by the analysts, is called “pure-play” – where services providers specialize in service offerings and possess significant domain experience and understanding (i.e. aerospace design, automotive design, biomedical engineering, etc.). These ESO companies typically lack market reach and the scale of their counterparts who provide IT/BPO services. Decision makers of R&D firms or product development companies distinctively prefer the specialization of pure-play ESO service providers to other ESO generalist providers. Tata Technologies is clearly a pure-play ESO provider to Automotive, Aerospace companies.

PLM Market

The PLM market [PLM services + PLM software products] remained virtually flat in 2009, in contrast to nearly 10% growth in 2008. Companies elected to take a more cautious approach to PLM software spending with a wait-and-see view. In addition, they curtailed spending plans for PLM services including training, consulting, and software customization/configuration.

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Notwithstanding the overall flat growth, 2009 saw companies moving to implement key PLM objectives including further rationalization of software technology, increased use of digital collaboration tools, and centralization of best practices data to enable innovation. According to CIMdata, a globally recognized PLM industry consulting organization, growth for 2010 is expected to be modest, at single digits. For 2011 and beyond, the PLM industry is expected to grow at a CAGR of 10-15%, with PLM services projected to grow faster than software.

Increasingly, BPO consulting firms that operate across any given company’s value chain are commanding a 60% share of the 11 billion PLM services market. This is an important development, as process consultants are involved in process evaluation and implementation as well as overall business transformation strategies. Due to the nature of their consulting efforts, they must look throughout the whole value chain to determine business strategies and are favorably positioned to grow downstream services. Because of this obvious opportunity, and because PLM services represents 60% [and growing] of the total spend for PLM, nearly all of the PLM vendors are now building their own service organizations. Other smaller PLM consultants and software resellers command less than 20% of the PLM services market but they too are growing their organizations to be more capable and more competitive.

2008 2010 2013

11.4

9.79.2

Tool Vendors Other Players Process Consultants

1.90

1.80

5.50

2.00

1.90

5.80

2.40

2.30

6.70

C. Overall Recent Industry Trends

Volume growth is returning, as visible from the Q4 FY 2010 results and management commentary.

Large, “Strategic Sourcing” deals are occurring with more frequency with several 100 FTE+ deals. Winners of such deals are usually incumbents who are providing small projects and services, but know the internals and expectations of the client well – the ability to sign new small deals/open accounts continues to be critical.

Tier 1 IT services firms are increasing focus on ESO vertical capabilities to improve their service offering portfolios.

Evolution of offerings, segments with increased traction in industry sectors including; Oil and Gas, Power Plant Design, Transportation Engineering, Medical Engineering.

Global MNCs have increased their development of strategy planning for ESO outsourcing.

Attrition and salary cost in the ESO space is expected to show an increasing trend.

Investor interest for the ESO players is on the rise from private equity participation and institutions investing in ESO companies in secondary market.


D - Internal Control Systems and their Adequacy

Overview

Tata Technologies’ systems of internal control are designed and operated to support the identification, evaluation and management of risks affecting the Company and the business environment in which it operates. Internal audits help strengthen the control mechanisms. Management is ultimately responsible to the Board for the Company’s system of internal controls and risk management.

The Company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance. Each business unit is responsible and accountable for implementing procedures and controls to manage risks within its business. Company management has established within its management and reporting systems a number of risk management controls. These include:

a) Formal operating and strategic planning processes for all businesses within the Company;

b) Annual budgeting and periodic reporting systems for all businesses which enable the monitoring of progress against financial and operational performance targets and metrics and evaluation of trends;

c) Guidelines and limits for approval of capital expenditures and investments;

d) Policies and procedures for the management of financial risk and treasury operations;

e) Certain risks cannot be mitigated to an acceptable level by internal controls. Such risks are transferred to third parties in the international insurance markets to the extent considered appropriate.

f ) An internal audit function operates under a charter which defines the purpose, authority and responsibility of the Internal Audit Department. The Internal Audit Department’s mission is to provide an independent, objective assessment of risk and evaluation of the effectiveness of internal operating and financial controls within the Company’s various operating businesses.

Risk Response

The areas of emphasis for the conduct of the assessment include:

a) appropriateness, efficiency, and effectiveness of the internal control environment and the susceptibility of that environment, on a sample basis, to frauds, failures in internal controls or breaches in authority;

b) reliability and integrity of financial and other operating controls;

c) extent of compliance with Company policies and procedures;

d) accuracy and integrity of and security over data and information;

e) accountability for the Company’s assets to safeguard against loss;

f ) adequacy of reviews made by the operating companies to ensure an effective internal controls environment is fostered;

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g) economy and efficiency with which resources are employed.

The Company uses a state-of-the-art ERP system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with global best practices. The audit is based on an Internal Audit Plan, which is reviewed each year in consultation with the statutory auditors (Deloitte Haskins & Sells) and the Audit Committee. In line with international practice, the planning and conduct of internal audit is oriented towards the review of controls in the management of risks and opportunities in the Company’s activities. The Internal Audit process is designed to review the adequacy of internal control checks in the system and covers all significant areas of the Company’s operations such as project delivery, accounting and finance, legal compliance, procurement, employee engagement, travel, customer satisfaction, working capital, etc. in the Company, including significant subsidiaries in US, UK and Germany. Safeguarding of assets and their protection against unauthorised use are also a part of these exercises.

The results of each audit and agreed-upon management action plan are reported on a timely basis to the management, responsible for implementing changes. The Internal Audit Department report to the Company’s Audit Committee and meets with them at least four times a year to review the annual Audit Plan and the results of its activities. The Audit Committee also meets the Company’s statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems in the Company and keeps the Board of Directors informed of its major observations from time to time.

Risks and Risk Mitigation

The Company is committed to the identification, monitoring and management of risks associated with its business activities. The Company has put in place an Enterprise wide Risk Management (ERM) process. The Company’s approach for enterprise risk management is based on the internationally accepted COSO framework.

By 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, to manage risks to be within its risk appetite and to provide reasonable assurance regarding the achievement of entity objectives.

In pursuing ERM, management strives to achieve the following:

a) Establish and implement a standard approach to the management of risk and to the acceptable levels of risk throughout the business.

b) Establish and implement a structured and consistent process for;

i) Identifying, Assessing and Managing risks (threats and opportunities) in the achievement of our business objectives.

ii) Comply with applicable laws, regulations and governance standards in all areas in which the Company operate.

iii) Encourage a culture of personal responsibility to proactively identify and address risk issues and events.

iv) Apply our Risk Management processes to regularly monitor our major areas of exposure.

v) Embrace risk opportunities to gain competitive advantage.

vi) Provide appropriate risk management information and training programs.

vii) Develop and monitor risk management performance measures.

Risk Monitoring

and Reviewing

RiskTreatment

Risk Assessment

Communication

Establish the Context


The Company’s risk management policies and procedures cover regulatory, legal, property, treasury, financial reporting and internal controls. A clear organizational structure exists detailing lines of authority and control responsibilities. The Management is accountable for integration of the risk management practices into day to day activities of the 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 Board. The Board 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.

The Company believes that it has robust and “fit for purpose” risk management processes in place. Some of the major risks and concerns identified for the risk mitigation plans as reviewed by the Company include:

1. Supplier Contract Compliance

2. Customer Acquisition

3. Exchange Rate Fluctuations

4. Revenue Concentration

5. Competitive Environment

6. Customer Bankruptcies

7. Integration and Collaboration

8. Human Resource Management

9. Contractual Compliance

10. Technology Obsolescence

11. Immigration Regulations

12. Inability to Access Funds

E - Financial Performance Discussion with Respect to Operational Performance

OVERVIEW

The financial performance of Tata Technologies Ltd (TTL) as per Indian GAAP is discussed hereunder in two parts:

1. Tata Technologies Ltd (Unconsolidated), which excludes the performance of subsidiaries of TTL and its share in Joint Venture Company.

2. Tata Technologies Ltd (Consolidated), which includes performance of subsidiaries of TTL and its share in Joint Venture Company (Group Companies). The Consolidated Financial Statements bring out comprehensively the performance of the TTL group of companies and are more relevant for understanding the overall performance of the TTL 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.

ROCE = EBITDA

Capital=

EBITDA

Revenue

Revenue

Capital

SG&A as % of sales

Gross Margin

Offshore Growth

Fixed Asset T/O

Days Sales O/S

Revenue growth

10.9% INR 77.1cr

INR 573cr

1.92

25%

18%

35%

18.56

77 days

15%

16.7% INR 119.9cr

INR 628cr

10%

1.98

27%

17%

131%

20.56

83 days

13%

20092008 2010

14%

INR 152.7cr

INR 658cr

1.67

14%

15%

29%

14.71

74 days

-12%

20.96%

7%

| 25| 25

< 6 months

> 6 months


2005-06 2006-07 2007-08 2008-09 2009-10

11 17

30

66

91

| 27| 27

2005-06 2006-07 2007-08 2008-09 2009-10

4. The discussion should be read in conjunction with the financial statements and notes for the year ended March 31,2010.

The total income of TTL (Unconsolidated) aggregated Rs. 391.80 crore in fiscal 2010 as compared to Rs. 378.89 crore in fiscal 2009, registering a growth of 3.41%. In fiscal 2010, the Company’s (Unconsolidated) profit after taxes aggregated Rs.76.36 crore as compared to Rs. 58.03 crore in fiscal 2009, registering a growth of 31.59%.

In fiscal 2010, the total income of TTL (Consolidated) aggregated Rs. 1096.69 crore as compared to Rs. 1241.19 crore in fiscal 2009. The consolidated profit after taxes aggregated Rs. 91 crore in fiscal 2010 as compared to Rs. 65.87 crore in fiscal 2009, registering a growth of 38.15%.

A final dividend of Rs. 7/- per equity share has been recommended.

RESULTS OF OPERATIONS - TTL (UNCONSOLIDATED)

The Management Discussion and Analysis given below relates to the financial statements of TTL (Unconsolidated). The discussion should be read in conjunction with the financial statements and related notes for the year ended March 31, 2010.

The following table gives an overview of the financial results of TTL (Unconsolidated):


INCOME

2009-10

2008-09 % of

Variance

Rs. crore % of

Income

Rs. Crore % of Income

Income From Services 342.93 87.53% 308.58 81.44% 11.13%

Sale of Products 39.46 10.07% 62.62 16.53% -36.98%

Other Income 9.41 2.40% 7.69 2.03% 22.37%

Total Income 391.80 100.00% 378.89 100.00% 3.41%

EXPENDITURE

Cost of Traded Items & Services 30.86 7.88% 50.63 13.36% -39.05%

Consultancy Fees, Software and Others 27.08 6.91% 23.12 6.10% 17.13%

Payroll and Related Expenses 184.29 47.04% 175.96 46.44% 4.73%

Operations and Other Expenses 31.19 7.96% 33.74 8.91% -7.56%

Total Expenditure 273.42 69.79% 283.45 74.81% -3.54%

Profit Before Finance Charges, Depreciation and Taxes 118.38 30.21% 95.44 25.19% 24.04%

Finance Charges 1.71 0.44% 3.67 0.97% -53.40%

Depreciation and Amortization 9.38 2.39% 8.15 2.15% 15.09%

Profit Before Taxes 107.29 27.38% 83.62 22.07% 28.31%

Provision for Taxes (including deferred tax) 30.93 7.89% 25.59 6.75% 20.87%

Net Profit from Operations After Taxes 76.36 19.49% 58.03 15.32% 31.59%

INCOME

Income from Operations

The Company’s revenues consist 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.

The Company’s (unconsolidated) revenues increased to Rs. 382.39 crore in fiscal 2010, from Rs. 371.20 crore in fiscal 2009, a growth of 3.01%. Revenues from services increased to Rs. 342.93 crore in fiscal 2010 from Rs. 308.58 crore in fiscal 2009, a growth of 11.13%. Revenues from sale of products decreased to Rs. 39.46 crore in fiscal 2010 from Rs. 62.62 crore in fiscal 2009, a reduction in revenue of 36.98%.

Other Income

Other Income in fiscal 2010 increased to Rs. 9.41 crore from Rs. 7.69 crore in fiscal 2009. Other Income comprises interest received on inter corporate deposits and deposits with banks, dividends received on investments in units of mutual funds and commission income. Primary reasons for the increase in other income are:

(a) Interest Income on inter corporate deposits and deposits with the banks in fiscal 2010 was Rs. 7.04 crore as compared to interest income of Rs. 4.81crore in fiscal 2009

(b) Dividend of Rs. 0.33 crore from investments in units of mutual funds in fiscal 2010 as compared to Rs. 0.11 crore in fiscal 2009.

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EXPENDITURE

Cost of Traded Items and Services

Cost of Traded items and services represents cost of products traded during the period under reference. Total cost of traded items and services in fiscal 2010 was Rs. 30.86 crore, a decrease of 39.05% over the costs of Rs. 50.63 crore in fiscal 2009. This decrease is attributable to overall decrease in income from the sale of products. As previously mentioned, revenues from sale of products reduced to Rs. 39.46 crore in fiscal 2010 from Rs. 62.62 crore in fiscal 2009, a reduction of 36.98%.

Consultancy Fees, Software and Others

Consultancy Fees represents outsourcing charges paid to the third parties towards various jobs outsourced. The cost of software represents the purchase cost of software for internal use for enhancing the quality of services and also meeting the needs of the customers. Total consultancy fees, software and others in fiscal 2010 was Rs. 27.08 crore, an increase of 17.13% over the total consultancy fees, software and others cost of Rs. 23.12 crore in fiscal 2009. Total consultancy fees, software and others as a percentage of total income was 6.91% in fiscal 2010 (6.10% in fiscal 2009). This increase is attributable to deployment of more contractual professionals during fiscal 2010 as compared to fiscal 2009.

Payroll and Related Expenses

Payroll and Related 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 Payroll and Related Expenses in fiscal 2010 was Rs. 184.29 crore, an increase of 4.73% over the total employee cost of Rs. 175.96 crore in fiscal 2009. Total employee cost as a percentage of total income was 47.04% in fiscal 2010 (46.44% in fiscal 2009). This increase is attributable to increase in cost per employee. The number of employees as at March 31, 2010 was 2,816 as against 2,796 during the previous year.

Other Items of Operations and Other Expenses

Operating and Other Expenses (other than cost of traded items and services, consultancy fees, software and others and payroll and related expenses as previously discussed) have decreased from Rs. 33.74 crore in fiscal 2009 to Rs. 31.19 crore in fiscal 2010. In terms of total income, it has gone down from 8.91% in fiscal 2009 to 7.96% in fiscal 2010. The decrease is primarily due to lower of administration and marketing expenses. Administration and marketing expenses amounting to Rs. 23.45 crore was incurred in fiscal 2010 as against of Rs. 28.20 crore during the previous year. The administrative and marketing cost primarily has come down due to reduction of travel and conveyance cost from Rs. 11.59 crore in fiscal 2009 to Rs. 7.94 crore in fiscal 2010.

Profit before Finance Charges, Depreciation and amortization and Taxes

The profit before finance charges, depreciation and amortization and taxes in fiscal 2010 was Rs. 118.38 crore, an increase of 24.04% from Rs. 95.44 crore in fiscal 2009. The profit as a percentage of income went up from 25.19% in fiscal 2009 to 30.21% in fiscal 2010.

Finance Charges

Finance charges decreased from Rs. 3.67 crore in fiscal 2009 to Rs. 1.71 crore in fiscal 2010. This was due to reduction of interest and other charges paid on PCFC loan (foreign currency loan) taken from banks.

Depreciation and Amortization

Depreciation and Amortization charges increased from Rs 8.15 crore in fiscal 2009 to Rs. 9.38 crore in fiscal 2010, an increase of 15.09%. In terms of total income, the depreciation and amortization charge was 2.39% of total income in fiscal 2010 (2.15% in fiscal 2009).

Profit before Taxes

The Profit before Taxes in fiscal 2010 was Rs.107.29 crore, an increase of 28.31% from Rs. 83.62 crore in fiscal 2009. In terms of total income, the Profit before Taxes went up from 22.07% in fiscal 2009 to 27.38% in fiscal 2010.


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 10A of the Income Tax Act, 1961, for the IT services exported from designated ‘Software Technology Parks’. The tax expense increased from Rs. 25.59 crore in fiscal 2009 to Rs. 30.93 crore in fiscal 2010. This represented 7.89% of the total income in fiscal 2010 (6.75% of the total income in fiscal 2009). The effective tax rate (total tax expenses including deferred tax/profit before tax*100) in fiscal 2010 reduced to 28.83% from 30.60% in fiscal 2009.

Net Profit from operations after taxes

The Company’s net profit from operations after taxes registered a growth of 31.59% from Rs. 58.03 crore in fiscal 2009 to Rs.76.36 crore in fiscal 2010.

FINANCIAL POSITION - TTL (UNCONSOLIDATED)

Share Capital

Amount in Rs. Crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Authorized:60,000,000 equity shares (Previous year 50,000,000 equity shares of Rs.10 each) and700,000 0.01% cumulative non-participative compulsorily convertible preference shares of Rs. 10/- each (P.Y. Nil)

60.00

0.70

50.00

-

Total 60.70 50.00

Issued, Subscribed and Paid-up:37,244,591 equity shares of Rs. 10/- each (P.Y. 37,158,104 equity shares of Rs. 10/-each)

37.24 37.16

Total 37.24 37.16

During the year, the Company increased its authorized capital. The authorized equity share capital as on March 31, 2010 was Rs. 60 crore, divided into 6 crore equity shares of Rs. 10/- each (Rs. 50 crore as at March 31, 2009, divided into 5 crore equity shares of Rs. 10/- each). The issued, subscribed and paid-up share capital as on March 31, 2010 Rs. 37.24 crore. During the year, the Company has issued equity shares to employees/directors under ESOP Scheme 2001. Consequently, the issued, subscribed and paid up capital of the Company increased by Rs. 0.08 crore in fiscal 2010. Details of options granted, vested, exercised, etc as at March 31, 2010 are provided in the Directors’ Report. As on March 31, 2010, the authorized capital also included cumulative non participative compulsory convertible preference shares of Rs. 0.70 crore, divided into 7 lac shares of Rs. 10/- each. Based on the approval given by the Shareholders of the Company the Extra-Ordinary General Meeting held on March 5, 2010, the Company has increased its authorized capital with an intention to issue share capital to the private equity investors.

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Reserves and Surplus

A summary of reserves and surplus is as under:

Amount in Rs. Crore

Particulars As at

March 31, 2010

As at March 31, 2009

Securities Premium 208.97 255.38

Securities Premium identified for consolidation adjustment 29.34 -

General Reserves 24.65 16.65

Profit & Loss Account 93.66 55.65

Total 356.62 327.68

Securities Premium Account

Amount in Rs. Crore

Particulars As at

March 31, 2010

As ofMarch 31, 2009

As at the beginning of the year 255.38 255.11

Additions during the year 0.25 0.27

Adjustments during the year (17.32) -

Securities Premium identified for Consolidation adjustment (29.34) -

Total 208.97 255.38

Securities Premium Account as on March 31, 2009 stood at Rs. 255.38 crore. As on March 31, 2010 the balance in this account stood at Rs. 208.97 crore. The additions to the share premium account of Rs. 0.25 crore during the year is on account of premium received on issue of equity shares, on exercise of options under ESOP Scheme 2001.

During the year, the Company and its subsidiary companies have incurred onetime expenses such as cost towards consultancy, cost of reorganization/restructuring, severance payments, employee separation cost, one time consultancy charges and provision for receivables due to change in accounting policy amounting to Rs. 46.66 crore. Of which, the Company has incurred onetime costs amounting to Rs. 17.32 crore on account of employee separation cost and additional provision for doubtful debts arising from change in accounting policy for providing for doubtful debts and the balance amount of Rs. 29.34 crore has been incurred by the subsidiary companies towards severance payments, consultancy cost for implementation of business restructuring and additional provision for doubtful debts arising from change in accounting policy for providing for doubtful debts.

Based on the approvals of Shareholders of the Company in 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, the Company has utilized an amount of Rs. 46.66 crore out of the securities premium account against the one time cost incurred by the Company and its subsidiary companies. Balance in the Securities Premium Account has been utilized in accordance with the provisions of Section 78 read with Section 100 to 103 of the Companies Act, 1956. The Company has completed all required formalities as required under the provisions of the Companies Act, 1956. A detailed note indicating the nature of utilization has been given in the notes to accounts.

Based on the Shareholders approval of the Company in the Extra-Ordinary General Meeting held on March 5, 2010 and on the basis of the order of the High Court of Judicature at Mumbai vide its order dated April 16, 2010, the Company identified and segregated an amount of Rs. 29.34 crore from the balance in the Securities Premium Account for adjustment on consolidation in respect of one time expenditure incurred by the subsidiary companies. The said amount has been shown separately under Reserves and Surplus under the head Securities Premium identified for Consolidation adjustment. No such adjustments were carried out in the previous year.


Shareholders funds

The total shareholder funds increased to Rs. 393.86 crore as at March 31, 2010 from Rs. 364.86 crore as of the previous year end. The basic earnings per share increased to Rs. 20.54 as at March 31, 2010 compared to Rs. 15.63 as of the previous year end.

Secured Loans

Secured Loans as at the end of fiscal 2010 aggregated Rs. 0.40 crore (Rs. 42.50 crore at the end of fiscal 2009). This is due to decrease in secured PCFC loan (foreign currency loan) amount taken from a bank. The said PCFC loan was secured by hypothecation of current assets of the Company (excluding loans and advances given to subsidiary companies and other Group companies). However, during the year, the Company has repaid the secured foreign currency loan and hence no balance was outstanding as at March31, 2010 (Rs. 41.74 crore as at March 31, 2009).

Unsecured Loans

Unsecured Loans at the end of fiscal 2010 aggregated Rs. 40.53 crore (Rs. Nil at the end of fiscal 2009). The said amount represents a new unsecured PCFC loan (foreign currency loan) taken from a bank. The Company has not provided any security towards the said loan. No such loan was outstanding as at March 31, 2009.

Deferred Tax Liability (net)

The Company has a deferred tax liability (net of deferred tax asset) of Rs. 1.64 crore as on March 31, 2010 (Rs. 1.04 crore as on March 31, 2009). Deferred tax liability represents timing differences in the financial and tax books arising from depreciation on assets. Details of the same have been provided in the notes to accounts.

Fixed Assets

A statement of movement in fixed asset is as follows:

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

% change

Leasehold Land 4.09 4.09 0.00%

Buildings 22.18 22.09 0.41%

Plant & Machinery 50.64 50.86 -0.43%

Furniture & Fixtures 5.98 5.81 2.92%

Vehicles 2.44 2.44 0.00%

Software Licenses 38.08 13.19 188.70%

Total 123.41 98.48 25.31%

Less:

Accumulated Depreciation 54.76 48.64 12.58%

Net Block 68.65 49.84 37.74%

Add:

Capital Work in Progress 0.62 0.70 -11.43%

Net Fixed Assets 69.27 50.54 37.06%

During the year, the Company has added Rs. 28.38 crore to our gross block comprising Rs. 0.10 crore buildings, Rs. 2.55 crore plant and machinery, Rs. 0.16 crore furniture and fixtures, Rs. 0.68 crore vehicles and Rs. 24.89 crore software licenses. During the previous year, the Company added Rs. 9.61 crore to gross block assets of the Company.

During the year, the Company deducted Rs. 3.45 crore from the gross block of assets comprising Rs. 2.77 crore plant and machinery, Rs. 0.68 crore vehicles. During the previous year, the Company retired/transferred various assets with gross block of Rs. 1.65 crore. The Company has a capital commitment of Rs. 3.78 crore as at March 31, 2010 as compared to Rs. 2.65 crore as at March 31, 2009.

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Investments

A summary of the Company’s investments is given below:

Amount in Rs. crore

Particulars As at

March 31, 2010

As at March31, 2009

(a) Long-term investments

i) Investment in Subsidiary companies 218.91 218.91

ii) Investment in Joint Venture Company 2.73 1.75

(b) Current Investments ( In Units of Mutual funds) 44.10 27.00

Total 265.74 247.66

As can be seen from the above table, during the year the Company has not made any further investment in its subsidiary companies. However, it has invested Rs. 0.98 crore in a joint venture Company (Tata HAL Technologies Ltd). During the year, the Company has invested in units of mutual funds. These are typically investments in short-term funds to gainfully use the excess cash balance with the Company. Investments in mutual funds aggregated Rs. 44.10 crore as at March 31, 2010 (Rs. 27 crore as at March 31, 2009).

Current Assets, Loans and Advances

Unbilled Revenues

Unbilled revenues comprise revenue recognized in relation to efforts incurred on Fixed-Price-Fixed-Time contracts and Time and Material contracts not billed as of the year end. Unbilled revenues stood at Rs. Nil crore as on March 31, 2010 (Rs.1.92 crore as at March 31, 2009).

Sundry Debtors

Sundry Debtors as on March 31, 2010 aggregated Rs. 58.65 crore (net of provision for doubtful debts) (Rs. 61.48 crore as on March 31, 2009). Amount debited to Profit and Loss Account on account of bad debts and provision for bad and doubtful debts in fiscal 2010 was Rs. 0.98 crore (Rs. 1.24 crore in fiscal 2009). During the year, the Company has revised its policy of providing for doubtful debts from a specific identification method. Currently provision for doubtful debts is created as a percentage of the outstanding debts based on ageing. The impact of this change was an additional provision of Rs. 1.58 crore has been debited to the securities premium account. The amounts considered as bad debts and provision for doubtful (debited to profit and loss account) as a percentage of total income was 0.25% in fiscal 2010, (0.33% in fiscal 2009).

Cash and Bank Balances

The Company had Cash and Bank balance of Rs. 41.80 crore as on March 31, 2010 (Rs. 6.03 crore as on March 31, 2009). The balances with scheduled banks aggregated Rs. 41.48 crore as on March 31, 2010 (Rs. 4.28 crore as on March 31, 2009).


Loans and Advances

A summary of loans and advances of the Company is given below:

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Loans & Advances to Employees 1.50 0.80

Less: Provision for Doubtful Loans & Advances to Employees (0.04) (0.04)

Bills of Exchange - 4.53

Advances to Suppliers, Contractors & Others 10.34 11.47

Loan to Subsidiary Company 9.13 17.95

ICD with Tata Motors Ltd (Holding Company) 55.00 42.00

Deposits With Government, Public Bodies and Others 0.72 1.39

Prepaid Expenses 1.39 1.05

Advance Payments against Taxes (net) 32.64 28.25

Total 110.68 107.16

As can be seen from the above information, Loans and Advances as on March 31, 2010 were Rs. 110.68 crore (Rs. 107.16 crore as on March 31, 2009). Significant items of Loans and Advances were as under:

Inter corporate deposits with Tata Motors Ltd was Rs. 55 crore (Rs. 42 crore as on March 31, 2009) and Advance payments against taxes (net) was Rs. 32.64 crore (Rs. 28.25 crore as on March 31, 2009).

Current Liabilities

A summary of current liabilities of the Company is given below:

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Sundry Creditors 69.03 44.11

Advance & Progress Payment 0.70 0.58

Unpaid Dividend 0.25 1.32

Other Liabilities 1.83 2.06

Total 71.81 48.07

Current Liabilities went up to Rs. 71.81 crore as on March 31, 2010 as compared to Rs. 48.07 crore as on March 31, 2009. This increase is primarily due to increase in Sundry Creditors from Rs. 44.11 crore as on March 31, 2009 to Rs. 69.03 crore as on March 31, 2010.

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Provisions

A summary of the provisions of the Company is given below:

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Provision for Taxation 0.62 0.68

Proposed Dividend 26.03 7.43

Provision for Tax on Dividend 4.32 1.26

Provision for Staff Welfare Schemes 6.99 7.07

Total 37.96 16.44

As can be seen from the above table, the increase in provisions is mainly attributable to proposed dividend amounting to Rs. 26.03 crore as at March 31, 2010 as against Rs. 7.43 crore as at March 31, 2009. Proposed divided represents the final dividend recommended to the shareholders. Upon approval of the shareholders in the Annual General Meeting, the same will be paid to the shareholders.

Cash Flow - TTL (Unconsolidated)

Cash Flow from Operating Activities

Amount in Rs. crore

Particulars 2009-10 2008-09 Increase/ (Decrease)

Net Profit after Taxation and Extraordinary Items 76.36 58.03 18.33

Depreciation 9.38 8.15 1.23

Provision for Income Tax 30.34 23.17 7.17

Provision for Deferred Tax 0.59 1.03 (0.44)

Provision for Fringe Benefit Tax - 1.05 (1.05)

Others 0.12 (4.01) 4.13

Operating Profit Before Working Capital Changes 116.79 87.42 29.37

Effect of Working Capital Changes 10.44 (25.33) 35.77

Advance Tax/Tax Deducted at Source (34.83) (35.96) 1.13

Net Cash Provided by Operating Activities 92.40 26.13 66.27

As can be seen from the above table, in fiscal 2010, the Company generated net cash of Rs. 92.40 crore (Rs. 26.13 crore in fiscal 2009) from operating activities. Apart from profit after taxes of Rs. 76.36 crore (Rs. 58.03 crore in fiscal 2009), the net cash generated includes adjustments for non-cash items like depreciation of Rs. 9.38 crore (Rs. 8.15 crore in fiscal 2009).


Cash Flow from Investing Activities

Amount in Rs. crore


Payment of Loan to Subsidiary 6.57 (0.95) 7.52

Investment in Joint Venture (0.99) (1.75) 0.76

Investment in Mutual Fund (made)/sold (net) (17.09) (27.00) 9.91

Proceeds From Sale of Fixed Assets 0.20 0.26 (0.06)

Payment for Purchase of Fixed Assets (27.94) (10.08) (17.86)

Net Cash Used for Investment Activities (39.25) (39.52) 0.27

In fiscal 2010, the Company used Rs. 39.25 crore on investment activities (Rs. 39.52 crore in fiscal 2009). The significant item in fiscal 2010 was purchase of fixed assets amounting to Rs. 27.94 crore (Rs. 10.08 crore in fiscal 2009).

Cash Flow from Financing Activities

Amount in Rs. crore


Proceeds from issue of shares under ESOP scheme including premium

0.31 0.35 (0.04)

Interest Paid (1.71) (3.67) 1.96

Dividends Paid (including Dividend Tax) (9.76) (28.64) 18.88

Interest Received 7.01 4.81 2.20

Inter Corporate Deposits (Net) (13.00) (3.95) (9.05)

Proceeds from Short Term Borrowing 0.12 39.27 (39.15)

Proceeds from Long Term Borrowing 0.20 0.26 (0.06)

Repayment of Long Term Borrowings (0.56) (0.59) 0.03

Net Cash Generated From Financing Activities (17.39) 7.84 (25.23)

As can be seen from the above, in fiscal 2010 the significant item of cash used in financing activities was placement of inter corporate deposit of Rs. 13 crore as against Rs. 3.95 crore in fiscal 2009.

Cash Position

Cash and cash equivalents as on March 31, 2010 amounted to Rs. 140.90 crore (Rs. 75.03 crore as on March 31, 2009). Cash and cash equivalents includes investments in mutual funds and inter corporate deposits.

TTL (CONSOLIDATED)

The Management Discussion and Analysis below relates to the consolidated financial statements of TTL (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 TTL for the year ended March 31, 2010.

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PARTICULARS 2009-10

Rs. crore

% of Income

2008-09Rs. crore

% of Income

% of

Variance

INCOME

Income from Services 786.81 71.74% 875.04 70.50% -10.08%

Sale of Products 283.57 25.86% 327.40 26.38% -13.39%

Sub Total 1,070.38 97.60% 1,202.44 96.88% -10.98%

Other Income 26.31 2.40% 38.75 3.12% -32.10%

Total Income 1,096.69 100.00% 1,241.19 100.00% -11.64%

EXPENDITURE

Cost of Traded Items & Services 188.06 17.15% 235.66 18.99% -20.20%

Consultancy Fees, Software and Others 178.82 16.31% 210.07 16.92% -14.87%

Payroll and Related Expenses 486.52 44.36% 568.35 45.79% -14.40%

Other Operating Expenses 90.59 8.26% 107.22 8.64% -15.51%

Total Expenditure 943.99 86.08% 1,121.30 90.34% -15.81%

Profit Before Finance Charges, Depreciation and Taxes

152.70 13.92% 119.89 9.66% 27.37%

Finance Charges 12.05 1.10% 12.21 0.98% -1.31%

Depreciation and Amortization 14.68 1.34% 14.79 1.19% -0.74%

Profit before Taxes 125.97 11.49% 92.89 7.48% 35.61%

Provision for Taxes (including deferred tax) 34.97 3.19% 27.02 2.18% 29.42%

Profit after taxes 91.00 8.30% 65.87 5.31% 38.15%

INCOME

Income from Operations

The Company’s revenues decreased in fiscal 2010 to Rs. 1070.38 crore from Rs. 1202.44 crore in fiscal 2009. Service revenues were 71.74% of total income (70.50% in fiscal 2009) and reduced by 10.08% from Rs. 875.04 crore in fiscal 2009 to Rs. 786.81 crore in fiscal 2010. Consolidated revenues from sale of products reduced by 13.39% from Rs. 327.40 crore in fiscal 2009 to Rs. 283.57 crore in fiscal 2010.

Revenue by Segments

The classification of revenues of the Company by geography is given below:

Amount in Rs. crore

Geography 2009-10 % of revenue 2008-09 % of revenue

India 303.78 28.38% 308.97 25.70%

USA 374.91 35.03% 542.43 45.11%

UK 258.16 24.12% 181.08 15.06%

Germany 46.28 4.32% 67.17 5.59%

France 44.71 4.18% 39.25 3.26%

Netherlands 13.00 1.21% 14.33 1.19%

Thailand 2.97 0.28% 8.67 0.72%

Other Countries 26.57 2.48% 40.54 3.37%

Total 1,070.38 100.00% 1,202.44 100.00%


Other Income

Amount in Rs. crore

Particulars 2009-10 2008-09

Interest Income 6.18 5.05

Commission Income 16.42 25.93

Profit on Sale of Investments - 0.01

Dividend Income 0.33 0.11

Miscellaneous Income 3.38 6.81

Excess provision written back - 0.84

Total 26.31 38.75

Consolidated ‘Other Income’ in fiscal 2010 reduced to Rs. 26.31 crore from Rs. 38.75 crore in fiscal 2009. In terms of total income, ‘Other Income’ has gone down from 3.12% in fiscal 2009 to 2.40% in fiscal 2010. As can be seen from the above, the reduction of other income has come down due to reduction of commission income (sale of products) from Rs. 25.93 crore in fiscal 2009 to 16.42 crore in fiscal 2010. Miscellaneous income of fiscal 2010 was net of liquidation loss of Rs. 1.28 crore (due to liquidation of one of the subsidiary company located in Japan). No such adjustment was carried out in fiscal 2009.

EXPENDITURE

Payroll and Related Expenses

The consolidated total employee costs for fiscal 2010 was Rs. 486.52 crore, a reduction of 14.40% over Rs. 568.35 crore in fiscal 2009. Employee costs as a percentage of total income was 44.36% in fiscal 2010 (45.79% in fiscal 2009). This decrease is attributable to effective utilization of manpower reduction of cost per employee and implementation of severance scheme. The number of employees as at March 31, 2010 was 3,934 (3,986 as at March 31, 2009).

Operating and Other Expenses have reduced from Rs. 107.22 crore in fiscal 2009 to Rs. 90.59 crore in fiscal 2010. In terms of total income, this has reduced from 8.64% in fiscal 2009 to 8.26% in fiscal 2010. The decrease is primarily due to lower of administration and marketing expenses. Administration and marketing expenses amounting to Rs. 75.26 crore was incurred in fiscal 2010 as against of Rs. 95.87 crore during the previous year. The administrative and marketing cost primarily has come down due to reduction of travel and conveyance cost from Rs. 39.17 crore in fiscal 2009 to Rs. 29.83 crore in fiscal 2010.

Profit before Finance Charges, Depreciation and amortization and Taxes

The profit before finance charge, depreciation and amortization and taxes (PBIDT) in fiscal 2010 was Rs. 152.70 crore, an increase of 27.37% from Rs. 119.89 crore in fiscal 2009. The profit as a percentage of total income was 13.92% in fiscal 2010 (9.66% in fiscal 2009). The increases in the PBIDT as a percentage of total income in fiscal 2010 are attributable to increase in offshore revenues and reduction in operating cost, particularly employee costs and other operating costs.

Finance Charges

Finance charges reduced from Rs. 12.21 crore in fiscal 2009 to Rs. 12.05 crore in fiscal 2010. This was due to effective management of working capital. In terms of percentage of total income, finance charges have gone up from 0.98% in fiscal 2009 to 1.10% in fiscal 2010.

Depreciation and amortization

Depreciation and amortization charge has reduced from Rs. 14.79 crore in fiscal 2009 to Rs. 14.68 crore in fiscal 2010, a decrease of 0.74%. In terms of total income the depreciation and amortization charge was 1.19% in fiscal 2009 and 1.34% in fiscal 2010.

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Profit before Taxes

The Profit before Taxes in fiscal 2010 was Rs. 125.97 crore, an increase of 35.61% from Rs. 92.89 crore in fiscal 2009. In terms of total income the profit went up from 7.48% in fiscal 2009 to 11.49% in fiscal 2010. The increase in profit before tax can be attributed to margin expansion of PBIDT of 401 basis points.


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 benefits in India from certain tax incentives as explained earlier. The Company’s consolidated tax expense in fiscal 2010 increased to Rs. 34.97 crore from Rs. 27.02 crore in fiscal 2009. This represented 3.19% of the total income in fiscal 2010 (2.18 % in fiscal 2009). The effective tax rate (total tax expenses including deferred tax/profit before tax*100) in fiscal 2010 reduced to 27.76% from 29.09% in fiscal 2009.

Net Profit after taxes from operations

The Company’s net profit (Consolidated) registered a growth of 38.15% from Rs. 65.87 crore in fiscal 2009 to Rs. 91 crore in fiscal 2010. Net profit margin on the total income went up from 5.31% in fiscal 2009 to 8.30% in fiscal 2010. The increase in net profit margin for fiscal 2010 of 2.99%.

FINANCIAL POSITION - TTL LIMITED (CONSOLIDATED)

Share Capital

Amount in Rs. Crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Authorized:60,000,000 equity shares (Previous year 50,000,000 equity shares of Rs. 10/-) and700,000 0.01% cumulative non-participative compulsorily convertible preference shares of Rs. 10/- each (P.Y. Nil)

60.00

0.70

50.00

-

Total 60.70 50.00

Issued, Subscribed and Paid-up:37,244,591 equity shares of Rs. 10/-each (P.Y. 37,158,104 equity shares of Rs. 10/-each) 37.24 37.16

Total 37.24 37.16

As discussed elsewhere in this report, during the year, the Company increased its authorized capital. The authorized equity share capital as on March 31, 2010 was Rs. 60 crore, divided into 6 crore equity shares of Rs. 10/- each (Rs. 50 crore as at March 31, 2009, divided into 5 crore equity shares of Rs. 10/- each). The issued, subscribed and paid-up share capital as on March 31, 2010 Rs. 37.24 crore. During the year, the Company has issued equity shares to employees/directors under ESOP Scheme 2001. Consequently, the issued, subscribed and paid up capital of the Company increased by Rs. 0.08 crore in fiscal 2010. Details of options granted, vested, excersied, etc as at March 31, 2010 are provided in the Directors’ Report. As on March 31, 2010, the authorized capital also included cumulative non participative compulsory convertible preference shares of Rs. 0.70 crore, divided into 7 lac shares of Rs. 10/- each. Based on the approval given by the Shareholders of the Company in the Extra-Ordinary General Meeting held on March 5, 2010, the Company has increased its authorized capital with an intention to issue share capital to the private equity investors.


Reserves and Surplus

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Capital Reserve 0.65 0.99

Securities Premium 208.97 255.38

General Reserves 24.83 16.83

Profit & Loss Account 119.39 66.75

Translation Reserve (43.88) (35.24)

Total 309.96 304.71

Capital Reserve Account as on March 31, 2009 stood at Rs. 0.99 crore. As on March 31, 2010 the balance in this account stood at Rs. 0.65 crore, the decrease in this account represents translation adjustment.

Securities Premium Account as on March 31, 2009 stood at Rs. 255.38 crore. As on March 31, 2010 the balance in this account stood at Rs. 208.97 crore. The additions to the share premium account of Rs. 0.25 crore during the year is on account of premium received on issue of equity shares, on exercise of options under ESOP Scheme 2001.

During the year, the Company and its subsidiary companies has incurred one time expenses such as cost towards consultancy, cost of reorganization/restructuring, severance payments, employee separation cost and provision for receivables due to change in accounting policy amounting to Rs. 46.66 crore. Of which, the Company has incurred onetime costs amounting to Rs. 17.32 crore on account of employee separation cost, one time consultancy charges and additional provision for doubtful debts arising from change in accounting policy for providing for doubtful debts and the balance amount of Rs. 29.34 crore has been incurred by the subsidiary companies towards severance payments, consultancy cost for implementation of business restructuring and additional provision for doubtful debts arising from change in accounting for providing for doubtful debts.

Based on the approvals of Shareholders of the Company in 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, the Company has utilized an amount of Rs. 46.66 crore out of the securities premium account against the onetime cost incurred by the Company and its subsidiary companies. Balance in Securities Premium Account has been utilized in accordance with the provisions of Section 78 read with Section 100 to 103 of the Companies Act, 1956. The Company has completed all required formalities as required under the provisions of the Companies Act, 1956. A detailed note indicating the nature of utilization has been given in the notes to accounts.

Out of the profits in fiscal 2010, an amount of Rs. 8 crore (Rs. 6 crore in fiscal 2009) has been transferred to General Reserves resulting in a closing balance of Rs. 24.83 crore as on March 31, 2010 (Rs. 16.83 crore as on March 31, 2009).

The balance in the Profit and Loss Account as on March 31, 2010 stood at Rs. 119.39 crore (Rs. 66.75 crore as on March 31, 2009), after providing final dividend of Rs. 26.03 crore and dividend tax of Rs. 4.32 crore thereon. The total amount of profits appropriated to dividends including dividend tax was Rs. 30.35 crore as compared to Rs. 21.73 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, 2009 stood at Rs. (35.24) crore. As on March 31, 2010, the balance in this account stood at Rs. (43.88) crore.

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Loans

Secured Loans

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Cash Credit Account From banks 24.78 26.09

Foreign Currency Loan From Banks - 41.74

Vehicle Loan 0.40 0.76

Total 25.18 68.59

Secured Loans at the end of fiscal 2010 were Rs. 25.18 crore (Rs. 68.59 crore as on March 31, 2009). Cash credit facility from banks is secured by hypothecation of books debts/accounts receivables and movable fixed assets (excluding certain vehicles). Vehicle loans are secured by hypothecation of vehicles financed. During the year, the Company has repaid secured PCFC foreign currency loan of Rs. 41.74 crore taken from a bank.

Unsecured Loans

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Foreign Currency Loan From Banks 273.17 260.96

Total 273.17 260.96

Unsecured Loans at the end of fiscal 2010 were Rs. 273.17 crore, against Rs. 260.96 crore at the end of the fiscal 2009. During the year, Tata Technologies Inc (subsidiary company) has taken a loan amounting to USD 50mn from ANZ Singapore and ING Singapore. Loans taken from ANZ Singapore and ING Singapore were used to repay the USD 50mn loan taken from SBI Singapore. The Company has provided corporate guarantee towards the loans taken from ANZ Singapore and ING Singapore. The Company also has taken PCFC loan (foreign currency loan) amounting to USD 9 mn during the fiscal 2010. Increase in loan amount (net) represents translation impact and new loans taken during fiscal 2010. The dollar rate has come down from Rs. 52.17 as at March 31, 2009 to 45.03 as at March 31, 2010.

Deferred Tax Liability (Net)

The Company has deferred tax liability (net) of Rs. 1.64 crore (Rs. 1.04 crore as on March 31, 2009). Deferred tax liability represents timing differences in the financial and tax books arising from depreciation on assets.

Fixed Assets

Addition to the Gross Block excluding capital work-in progress and exchange fluctuations in fiscal 2010 amounted to Rs. 30.32 crore (Rs. 14.71 crore in fiscal 2009). The significant items of additions in fiscal 2010 were:

(a) Buildings Rs. 0.10 crore (Rs. 0.48 crore in fiscal 2009), (b) Plant and machinery Rs. 3.27 crore (Rs. 7.60 crore in fiscal 2009) (c) Furniture and fixtures Rs. 1.17 crore (Rs. 2.18 crore in fiscal 2009), (d) Vehicles Rs. 0.68 crore (Rs. 0.44 crore in fiscal 2009) and (e) Software licenses Rs. 25.10 crore (Rs. 4.01 crore in fiscal 2009). The amount in capital work-in-progress was Rs. 0.62 crore as on March 31, 2010 (Rs. 0.88 crore as on March 31, 2009). The Company has a capital commitment of Rs. 3.78 crore as at March 31, 2010 as compared to Rs. 2.69 crore as at March 31, 2009.

Goodwill on Consolidation

Goodwill on consolidation as at March 31, 2010 was Rs. 328.88 crore (As at March 31, 2009 was Rs. 363.03 crore). 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, due to the translation impact there is a movement in this account in fiscal


2010 as compared fiscal 2009. Details of the movement have been provided in the notes to accounts of consolidated financial statements.

Investments

The Company has invested in various mutual funds. These are typically investments in short-term funds to gainfully use the investible cash balance with the Company. Investments in mutual funds aggregated Rs. 44.10 crore as on March 31, 2010 (Rs. 27.00 crore as at March 31, 2009).

Deferred Tax Asset (Net)

The Company has deferred tax asset (net) of Rs. 8.91 crore (Rs. 9.06 crore as at March 31, 2009). The primary reasons for increase in deferred tax asset is attributable to the difference in provision for depreciation and provision for expenses under Section 43B of the Income Tax Act and other timing differences between book profit and tax profit.

Inventories

The Company had inventories of Rs. 5.34 crore as at March 31, 2010 (Rs. 1.87 crore as at March 31, 2009). The inventory constitutes hardware and software products.

Current Assets, Loans and Advances Unbilled Revenues

Unbilled revenues stood at Rs. 10.02 crore as at March 31, 2010 (Rs. 16.93 crore as at March 31, 2009) representing 0.91% of the annual income for fiscal 2010 (1.36% as at March 31, 2009).

Sundry Debtors

Sundry Debtors as at March 31, 2010 aggregated Rs. 223.04 crore (net of provision for doubtful debts) (Rs. 282.99 crore as at March 31, 2009). As a percentage of total income, sundry debtors were at 20.34% as at March 31, 2010 as compared to 22.80% as at March 31, 2009. During the year, the Company has revised its policy of providing for doubtful debts from a specific identification method. Currently, provision for doubtful debts is created as a percentage of the outstanding debts based on ageing. The impact of this change was an additional provision of Rs. 18.16 crore, which in accordance with the approval of the High Court has been debited to the Securities Premium Account. The cumulative provision towards bad and doubtful debts as on March 31, 2010 stood at Rs. 20.87 crore (Rs. 4.44 crore as at March 31, 2009).

Cash and Bank Balances

The Company had Cash & Bank balance of Rs. 93.97 crore as at March 31, 2010 (Rs. 54.02 crore as at March 31, 2009). Of this balance Rs. 38.63 crore was held in non-scheduled banks located outside India as at March 31, 2010 (Rs. 28.81 crore as at March 31, 2009).

Loans and Advances

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Loans & Advances to Employees 7.10 8.89

Less : Provision for Doubtful Loans & Advances to Employee (0.04) (0.04)


Advances to Suppliers, Contractors & Others 15.92 9.54

ICD with Tata Motors Ltd (Holding Company) 55.00 42.00

Deposits With Government, Public Bodies & Others 2.00 2.02


Advance Payments against Taxes (net) 32.61 28.22

Total 129.71 109.85

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Loans and Advances as on March 31, 2010 were Rs. 129.71 crore (Rs. 109.85 crore as at March 31, 2009). Significant items of loans and advances were advances to suppliers, contractors and others Rs. 15.92 crore (Rs. 9.54 crore as at March 31, 2009), Inter corporate deposits with TML Rs. 55 crore (Rs.42 crore as at March 31, 2009), Prepaid expenses Rs. 17.12 crore and (Rs. 14.69 crore as at March 31, 2009) and advance tax Rs. 32.61 crore (net of provision for taxes) (Rs. 28.22 crore as at March 31, 2009). Advance tax includes Tax Deducted at Source (TDS) by the customers in respect of services rendered by TTL (particularly in India).

Current Liabilities

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Sundry Creditors 168.40 148.18


Unpaid Dividend 0.25 1.32

Unearned Income 30.57 38.28


Total 220.91 216.35

Current liabilities went up to Rs. 220.91 crore as at March 31, 2010 as compared to Rs. 216.35 crore as at March 31, 2009. This increase is primarily due to increase in sundry creditors from Rs. 148.18 crore as at March 31, 2009 to Rs. 168.40 crore as at March 31, 2010.

Provisions

Amount in Rs. crore

Particulars As at

March 31, 2010

As atMarch 31, 2009

Provision for Taxation (net) 2.79 1.65

Proposed Dividends 26.03 7.43



Provision for Warranty - 0.04

Total 40.54 19.38

The increase in provisions is mainly attributable to proposed dividend of Rs. 26.03 crore as at 31st March 2010 (Rs. 7.43 crore as at March 31, 2009) and provision for tax on proposed dividend Rs. 4.32 crore as at 31st March 2010 (Rs.1.26 crore as at March 31, 2009). Proposed divided represents the final dividend recommended to the shareholders. Upon approval of the shareholders in the Annual General Meeting, the same will be paid to the shareholders.


CASH FLOW - TTL (CONSOLIDATED)

Cash Flow from Operations (Consolidated)

Amount in Rs. crore


Net Profit after Taxation and Extraordinary Items 91.00 65.87 25.13

Depreciation 14.68 14.79 (0.11)

Provision for Income Tax 35.48 29.37 6.11

Provision for Deferred Tax (0.51) (3.40) 2.89

Provision for Fringe Benefit Tax - 1.05 (1.05)

Interest Paid 12.06 12.21 (0.15)

Others (12.89) (2.44) (10.45)

Operating Profit Before Working Capital Changes 139.82 117.45 22.37

Effect of Working Capital Changes 13.95 (21.16) 35.11

Advance Tax/Tax Deducted at Source (38.54) (41.16) 2.62

Net Cash Generated From Operating Activities 115.23 55.13 60.10

As can be seen from the above table, in fiscal 2010, the Company generated net cash of Rs. 115.23 crore (Rs. 55.13 crore in fiscal 2009) from operating activities.

Cash Flow from Investing Activities (Consolidated)

Amount in Rs. crore


Proceeds from Sale of Fixed Assets 0.20 0.27 (0.07)

Payment for Purchase of Fixed Assets (29.69) (15.37) (14.32)

Investment in Mutual Fund (made)/sold (net) (17.09) (27.00) 9.91

Net Cash Used for Investing Activities (46.58) (42.10) (4.48)

In fiscal 2010 the Company used Rs. 46.58 crore on investment activities (Rs. 42.10 crore in fiscal 2009). The significant items of cash used in investment activities in fiscal 2010 were (a) purchase of fixed assets Rs. 29.69 crore (Rs. 15.37crore in fiscal 2009) and (b) investment in units of mutual funds Rs.17.09 crore (Rs. 27 crore in fiscal 2009).

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Cash Flow from financing activities (Consolidated)

Amount in Rs. crore


Proceeds From Issue of Shares Including Premium 0.31 0.35 (0.04)

Interest Paid (12.05) (12.21) 0.16

Dividends Paid (including Dividend Tax) (9.76) 28.64 18.88

Inter Corporate Deposits (Net) (13.00) (3.95) (9.05)

Proceeds from Short Term borrowings (262.17 ) - (262.17)

Proceeds from Cash Credit arrangement 2.25 8.91 (6.66)

Proceeds from Long Term borrowing 248.98 42.00 206.98

Repayment of Long Term borrowings (0.56) (1.57) 1.01

Net Cash Generated/)(used) from Financing Activities (46.00) 4.89 (50.89)

In fiscal 2010, the significant items of cash used in financing activities were placement of inter-corporate deposits amounting to Rs. 13 crore (Rs. 3.95 crore in fiscal 2009) and repayment of short borrowing Rs. 262.17 crore (Rs. Nil in fiscal 2009). In fiscal 2010, the significant item of cash generated from financing activities was long term borrowing of Rs. 248.98 (Rs. 42 crore in fiscal 2009).

Cash Position

Cash and cash equivalents as on March 31, 2010 amounted to Rs. 193.06 crore (Rs. 123.02 crore as at March 31, 2009). Cash and cash equivalents includes investments in mutual funds and inter corporate deposits.



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1. PHILOSOPHY

Being a Tata Company, Tata Technologies’ philosophy of Corporate Governance is founded upon a richlegacy of fair, ethical and transparent Governance practices. The Corporate Governance philosophy hasbeen further strengthened by the implementation of the Tata Business Excellence Model and a properstructure for management of business ethics.

Corporate Governance is a set of principles, policies, processes and practices affecting the way a corporationis 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 ofTata Technologies continuously aims for ‘Change for the Better’ with strong emphasis on customersatisfaction, sustainable growth and increase in the stakeholder value. This orientation towards fair andethical governance stems from the culture and mindset imbibed in it as part of the Tatas and upheldthrough a passion for excellence championed by senior leaders. Tata Technologies is committed to addingvalue and achieving continual improvements through leadership by example.

For Tata Technologies, Corporate Governance implies observance of certain basic principles of ethicalgrowth and is more than mere compliance with global standards of governance and disclosure. TataTechnologies’ leadership team is committed to managing the Company in accordance with theorganization’s Vision, Mission and Values Statement and Quality Policy.

� 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.

� Composition Statement: Our engineering and technology professionals operate where our customersneed us to be, leveraging our global resources to maximize product value.

� Culture Statement: We are honest and straight forward.

� Personality statement: We are highly focused, hard working and innovative professionals.

Though the Company is not listed and the statutory guidelines on Corporate Governance are not applicable,Company has voluntarily opted for adoption of various Corporate Governance measures. There havebeen continuous efforts made to improve and increase the Corporate Governance measures in the recentyears, viz., improved Board reporting, building a strong Management of Business Ethics structure withincreased focus on implementation of the Tata Code of Conduct, Commitment to the Tata ExcellencyBusiness Model, better alignment between the leadership team, legal compliances systems, integration ofvarious activities across different territories, more focused internal audit, etc.

2. THE BOARD OF DIRECTORS

At the heart of the Company’s Corporate Governance practices, is the Board of Directors of the Company,which oversees how the management serves and protects the long term interest of stakeholders of theCompany. The Board is the ultimate decision making body of the Company, except for the matters reservedfor the shareholders.

The Board oversees that the Company's business is conducted wisely and in compliance with applicablelaws and regulations and proper governance. The Board along with its Committees viz. Audit Committee,Committee of Directors and Compensation and Remuneration Committee lays down strategic paths,develops systems, processes and review mechanisms to steer the Company on the right track of growthand mitigate risks. Among other things, key matters like periodic financial results, acquisitions, joint ventures,capital/operating budgets, findings/comments of statutory and other auditors, internal controls, issue ofcapital and other resource mobilization efforts are brought to the Board. Broadly, all items pertinent to theoversight and monitoring function of the Board will be brought to the Board regularly. The Board alsodeliberates on the Company’s positioning in the domestic and global markets and adopts and approvesthe strategy for medium and long term growth.

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

Corporate Governance Report

47

represent various fields with expertise in their respective areas and their positive contribution helpsCompany to define effective strategies for future growth. The Managing Director along with ExecutiveManagement Team in turn implements and monitors the operational strategies, plans, systems and processesto 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 inconsultation with all the Board members. The relevant background materials and information on theagenda items are distributed to the Board members in advance of meetings. All the Committees of theBoard report to the Board. The minutes of their meetings are placed before the Board regularly. TheCommittees also bring to the Board all those matters considered by them to be of special significance. TheBoard meets the members of the senior management of the Company from time to time. A summary of theBoard Decisions made in the last two years is being placed before every quarterly Board Meeting as agood governance practice.

The Board met seven times during the financial year 2009-10, on May 12, 2009, July 20, 2009, November 11,2009, November 24, 2009, December 18, 2009, January 25, 2010 and March 17, 2010. The time gap betweenany two meetings was less than four months. The quorum of the meetings is either two members or onethird of the members of the Board, whichever is higher. The attendance of the Directors at the BoardMeetings held during the year is as follows:

Name Designation No of Board Meetings

Held Attended

S Ramadorai Non-Executive Chairman 7 7

R Gopalakrishnan Non-Executive Director 7 7

P P Kadle Non-Executive Director 7 7

C Ramakrishnan Non-Executive Director 7 4

P R McGoldrick Managing Director 7 7*

* Mr McGoldrick participated in one meeting via video conference in which as per the laws of India, he was not entitledto vote.

Mr R Gopalakrishnan is liable to retire at the ensuing Annual General Meeting and offers himself forreappointment. Attention of the Members is invited to the relevant item in the Notice of the AnnualGeneral Meeting seeking their approval on his reappointment.

None of the Non-Executive Directors have any material pecuniary relationship or transactions with theCompany.

None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more than5 Committees across all companies in which one is a Director. Chairmanship/Membership of BoardCommittees for this includes only Audit and Shareholders’ Grievance Committees. Necessary disclosuresregarding Committee positions in other public companies as at March 31, 2010 have been made by theDirectors.

No sitting fees were paid to the Directors for attending the Board Meetings.

INFORMATION REGARDING DIRECTORS:

Mr S Ramadorai, 65, has served as Chairman of the Company since 2001. He is currently serving as the ViceChairman-Non Executive of Tata Consultancy Services Ltd (TCS). He had joined TCS as a trainee engineerand went on to become CEO in 1996. In October 2009, he stepped down as CEO, leaving a $ 6 billion globalIT services company to his successor and was made the Vice Chairman of the Company.

Mr Ramadorai is on the Boards of a number of companies and educational institutions - Tata IndustriesLtd, Hindustan Unilever Ltd, Bombay Stock Exchange, MIT Sloan School of Management (EMSAB), etc.

Mr Ramadorai was awarded the Padma Bhushan in January 2006 in recognition of his commitment anddedication to the IT industry. In April 2009, he was awarded the CBE (Commander of the Order of the BritishEmpire) by Her Majesty Queen Elizabeth II for his contribution to the Indo-British economic relations.

His academic credentials include a Bachelors degree in Physics from Delhi University (India), a Bachelor of



48

Engineering degree in Electronics and Telecommunications from the Indian Institute of Science, Bangalore(India) and a Masters degree in Computer Science from the University of California–UCLA (USA). In 1993,Ramadorai attended the Sloan School of Management’s highly acclaimed Senior Executive DevelopmentProgram.

Other Directorships:

Public Companies: Tata Industries Ltd, Tata Consultancy Services Ltd, Tata Elxsi Ltd, CMC Ltd, HindustanUnilever Ltd, Piramal Healthcare Ltd, Tata Teleservices (Maharashtra) Ltd, Tata Communications Ltd,Computational Research Laboratories Ltd, Tata Advanced Systems Ltd, Asian Paints Ltd and Bombay StockExchange Ltd.

Private Companies: IKP Investment Management Company Pvt Ltd.

Foreign Companies: Tata Communications International Pte Ltd, Singapore, Tata America InternationalCorporation, US.

Other Bodies Corporate: Member of the Research, Innovation and Enterprise Council, Singapore andACCION Technical Advisors- India.

Mr Ramadorai held 1,12,000 equity shares of the Company as on March 31, 2010, constituting 0.30% of thepaid-up capital of the Company. No stock options were granted to him during the year. 59,000 optionswere exercised by him during the year ended March 31, 2010. Of the 1,00,000 stock options granted to himin 2001 under the Employee Stock Option Scheme–2001, all the options have been exercised by him tillMarch 31, 2010.

Mr P R McGoldrick, 60, has over 40 years of experience in information technology and is responsible forTata Technologies as its Managing Director. He holds a Masters degree in Computer Science from StanfordUniversity, 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 Laboratoryin the United States where he had technical responsibility for several complex information systemsprojects. He also provided consulting to computer companies throughout the United States on projectmanagement, advanced products, multiprocessor computer systems, man-machine interfaces and improvedsoftware productivity.


Public Companies: Tata Elxsi Ltd.

Foreign Companies: Tata Technologies Pte Ltd, Singapore, Tata Technologies Inc, US, Tata TechnologiesEurope Ltd, UK, Tata Technologies (Thailand) Ltd, Thailand, INCAT International Plc, UK, Titan Watches &Jewellery International (Asia Pacific) Pte Ltd, Singapore and RNT Associates International Pte Ltd, Singapore.

Mr McGoldrick held 5,60,000 equity shares of the Company as on March 31, 2010, constituting 1.50% of thepaid-up capital of the Company. No new stock options were granted to him and no stock options wereexercised by him during the year ended March 31, 2010. Of the 1,00,000 stock options offered to him in 2001under the Employee Stock Option Scheme–2001, all the options have been exercised by him till March 31,2010.

Mr R Gopalakrishnan, 64, is an Executive Director of Tata Sons Ltd. He is a member of the Group CorporateCentre of Tata Group, besides being on the Boards of various Tata companies. Prior to joining the TataGroup in August 1998, he was the Vice-Chairman of Hindustan Unilever Ltd. He is a past president of theAll India Management Association.

Mr Gopalakrishnan holds a Bachelor’s degree in Science and a B.Tech (Electronics) degree from the IndianInstitute of Technology (IIT), Kharagpur.


Public Companies: Tata Sons Ltd, Tata Motors Ltd, Tata Chemicals Ltd, Tata Power Company Ltd, Rallis IndiaLtd, Tata Autocomp Systems Ltd, ICI India Ltd and Castrol India Ltd.

Private Companies: ABP Pvt Ltd and Advinus Therapeutics Pvt Ltd.

Foreign Companies: IMACID S.A.

Mr Gopalakrishnan held 55,000 equity shares of the Company as on March 31, 2010, constituting 0.15% of

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the paid-up capital of the Company. No stock options were exercised by him and no new stock optionswere granted to him during the year ended March 31, 2010. Of the 25,000 stock options offered to him in2001 under the Employee Stock Option Scheme–2001, all the options were exercised by him till March 31,2010.

Mr P P Kadle, 53, is the Managing Director & CEO of Tata Capital Ltd, a subsidiary of Tata Sons Ltd. TataCapital is the Tata Group’s foray into the financial services space covering products and services rangingfrom Retail and Commercial lending, Distribution and Broking, Wealth Management, Investment Bankingand Private Equity.

Mr Kadle is an honors graduate in commerce & accountancy from the Bombay University and hasqualified as a Chartered Accountant, Cost & Works Accountant and Company Secretary.

Mr Kadle is a Board member on various Tata and non-Tata companies and is also on the Advisory Board ofJapan’s Institute for Indian Economic Studies (IIES) at Waseda University for furthering the Indo-Japanesebusiness relations. Additionally, he is also actively involved with various public charitable institutionsnotably 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 MotorsLtd 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 knownas economist intelligence unit).


Public Companies: Tata Capital Ltd, Tata Motors Insurance Broking and Advisory Services Ltd, Tata SecuritiesLtd, Tata Motors Finance Ltd, Tata Capital Markets Ltd, e-Nxt Financials Ltd, TC Travel & Services Ltd, T SecCommodities Broking Ltd, Tata Autocomp Systems Ltd, Tata Capital Housing Finance Ltd and Tata ToyoRadiators Ltd.

Private Companies: International Asset Reconstruction Company Pvt Ltd.

Foreign Companies: INCAT International Plc, UK, Tata Technologies Inc, USA, Tata Technologies Pte Ltd,Singapore, Tata Capital Pte Ltd, Singapore, Tata Capital Markets Pte Ltd, Singapore, Tata Capital Advisors PteLtd, Singapore, Tata Technologies Europe Ltd, UK and Tata Capital Plc, UK.

Mr Kadle held 1,30,000 equity shares of the Company as on March 31, 2010, constituting 0.35% of thepaid-up capital of the Company. No stock options were exercised by him and no new stock options weregranted to him during the year ended March 31, 2010. Of the 25,000 stock options offered to him in2001 under the Employee Stock Option Scheme–2001, all the options have been exercised by him tillMarch 31, 2010.

Mr C Ramakrishnan, 54, was appointed as the Chief Financial Officer of Tata Motors Ltd in September 2007,having joined the company in 1980 as the Junior Accounts Officer. He handled corporate treasury andaccounting functions with management accounting/MIS. Following a two-year company-wide IT projectresponsibility covering R&D, Manufacturing, Sourcing and Sales and Services, he had worked in the TataGroup Chairman’s Office for more than 7 years before being appointed as the Chief Financial Officer ofTata Motors Ltd. As the Chief Financial Officer of Tata Motors Ltd, he is responsible for Finance, Accounts,Taxation, Business Planning, Investor Relations, Treasury, CRM & DMS and IT. Mr Ramakrishnan holds aBachelor’s degree in Commerce and is a Chartered Accountant and a Cost Accountant.


Public Companies: HV Transmissions Ltd, Tata Cummins Ltd, Sheba Properties Ltd, Tata Services Ltd, TataMotors Finance Ltd, Tata Precision Industries (India) Ltd, TML Distribution Company Ltd and Fiat IndiaAutomobiles Ltd.

Foreign Companies: Tata Hispano Motors Carrocera S.A., Spain, Nita Company Ltd, Bangladesh, TML HoldingsPte Ltd, Singapore, Tata Motors (Thailand) Ltd, Thailand, Tata Daewoo Commercial Vehicle Company Ltd,South Korea and Tata Motors (SA) (Proprietary) Ltd, South Africa and Carrosserries Hispano Maghreb S.A.,Morocco.



50

Mr Ramakrishnan held 35,000 equity shares of the Company as on March 31, 2010, constituting 0.09% ofthe paid-up capital of the Company. No stock options were exercised by him and no new stock optionswere granted to him during the year ended March 31, 2010. Of the 25,000 stock options offered to him in2001 under the Employee Stock Option Scheme–2001, all the options have been exercised by him tillMarch 31, 2010.

3. AUDIT COMMITTEE

The Audit Committee comprises three Non-Executive Directors, all of whom are financially literate. TheAudit Committee met seven times during the year 2009-10, on April 21, 2009, May 12, 2009, July 20, 2009,August 12, 2009, November 11, 2009, January 25, 2010 and February 10, 2010. Members of the Audit Committeeand the number of meetings attended by each director for the financial year 2009-10 are as follows:


Held Attended




The Chief Internal Auditor attended six meetings, the representatives of the statutory auditors of theCompany, M/s Deloitte Haskins & Sells, Chartered Accountants, attended four meetings and the ChiefFinancial Officer attended all the meetings. The Company Secretary acts as the Secretary to the CommitteeMeetings. The quorum of the meetings is either two members or one third of the members of theCommittee, whichever is higher.

An Audit Committee Charter has formally been adopted for the Audit Committee outlining its responsibilitiesin detail. The role of the Audit Committee includes in brief the following:

� To review reports of the internal auditor and recommend to the Board.

� To decide on the scope of the internal auditors work including the examination of major items ofexpenditure.

� To meet statutory and internal auditors periodically and discuss their findings, suggestions and otherrelated matters.

� To review the weaknesses in internal controls, if any, reported by the internal and statutory auditorsand 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 todischarge 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.

No sitting fees were paid to the members for attending the Audit Committee meetings.

4. COMPENSATION AND REMUNERATION COMMITTEE

The Compensation and Remuneration Committee met four times during the year 2009-2010, on May 12,2009, July 20, 2009, November 11, 2009, and January 25, 2010.

Members of the Compensation Committee and number of meetings attended by each director for thefinancial year 2009-10 are as follows:

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Held Attended




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 policiesand systems are in place to comply with the guidelines issued by the Securities and Exchange Boardof India or any other appropriate authority in connection with the said Scheme.

No sitting fees were paid to the members for attending the Compensation Committee meetings. Thequorum of the meetings is either two members or one third of the members of the Committee, whicheveris higher.

Terms of appointment and payment of remuneration to the Managing Director, Mr Patrick McGoldrick

Period of Appointment Five years commencing from September 1, 2005 till August 31, 2010.

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 duringhis stay in India. All expenses in connection with the Company’s officialbusiness 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 monthsnotice or the Company paying three months salary in lieu of notice.

Employee stock option granted to employees during the year and the remuneration paid to the ManagingDirector are contained in separate sections of the Annual Report. Readers are advised to refer to the same.

Re-appointment of Managing Director:

The present term of appointment of Mr P R McGoldrick expires on August 31, 2010. The Board in its meetingheld on May 12, 2010, on recommendation of the Compensation Committee and subject to the consent ofshareholders and Central Government, has approved the re-appointment of Mr McGoldrick as a ManagingDirector for the period from September 01, 2010 to September 08, 2014 (Mr McGoldrick turns 65 on thisdate) on the same terms and conditions.

5. OTHER KEY BOARD AND MANAGEMENT COMMITTEES

Apart from the Audit Committee and the Compensation and Remuneration Committee, the Company hasthe following committees of the Board:

a. Committee of Directors: Mr P P Kadle, Mr C Ramakrishnan and Mr P R McGoldrick, Directors are themembers of the Committee. The Committee was constituted by the Board in its meeting onMarch 09, 2001 for carrying out certain functions pertaining to the day-to-day operations of theCompany. The powers of the Committee broadly include, evaluation and negotiation of facilityagreements for availing working capital facilities within the specified limits and providing necessaryauthorizations for the same, authorization for signing and executing relevant documents for availingthe facility, opening and closing of bank accounts, authorization for creating charges on the currentassets of the Company, authorization for providing comfort letters or corporate guarantees tobanks or financial institutions for funding of Company’s subsidiaries, transfer of amounts to andfrom the Company’s Provident Fund, appointment of additional/substitute attorneys, entering intoagreement(s) with business partner(s), etc.

b. Stock Allotment Committee: The Board had constituted the Stock Allotment Committee to carry outcertain functions in connection with the offer of Company’s shares to employees of Company’ssubsidiaries on private placement basis. Mr Praveen Kadle, Director, Mr Patrick McGoldrick, Managing



52

Director and Mr Warren Harris, President and COO, are the three members of the Committee. The roleof the Committee primarily is to finalize/approve letter of offer for private placement of shares toemployees 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 toprovide supervision, approval, direction, recommendation with respect to the Employee StockPurchase Programme (ESPP) as implemented by the Tata Technologies Limited Employees StockOption Trust and to approve the implementation/transaction documents related to the ESPP andalso to remove any difficulty or question that may arise in the implementation of the ESPP scheme.

c. Executive Committee: To provide more effective decision making, the Boards of Tata TechnologiesLtd and Tata Technologies Pte Ltd have formed a management committee consisting of Mr PraveenKadle, Director, Mr Patrick McGoldrick, Managing Director and Mr Warren Harris, President and COO.

6. MANAGEMENT OF BUSINESS ETHICS

Tata Technologies has adopted the Tata Code of Conduct (TCOC). The Code of Conduct upholds thehighest standards of corporate and personal conduct and is the guiding force on the ethical conductbehind every Tata Company, no matter what business they are in. It establishes the code of ethics thatgoverns all Tata ventures, new and old. The Code of Conduct is communicated to the organization’spartners/suppliers through interaction with them. Company established procedures to deploy TCoC acrossthe organization which promotes and ensures ethical behavior in all stakeholder interactions. The TCoC isdisseminated through presentations, circulation of “Code” through various processes such as at the timeof employee induction (joining), highlighting the same in posters at strategic locations “EmployeeHandbook” and a dedicated section as “Management of Business Ethics” on the intranet portal of theCompany. To obtain a uniform measurable deployment of the TCOC across all employees and contractorsof Tata Technologies, where ever they might exist globally, the Company created a specifically tailoredtraining 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 thetraining 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 inplace. 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, wouldbe a matter of serious concern for the Company. Whistle Blower policy has been established to provide amechanism for employees of the Company to approach the Ethics Counselor/Chairman of the AuditCommittee of the Company to report any concerns. The Policy has been communicated to all the employeesof the Company.

Possibility of breach of ethical behavior can be reported by various means to the Ethics Counsel such asby post, mail or phone calls. A dedicated email account [email protected] is available both atthe intranet and internet sites for the stakeholders to report any ethical breach. These are then managedby a well laid process. The required actions are implemented through the support functions such as HR,Finance and Legal. Results are reported to Chief Ethics Counselor on a quarterly basis and are reviewed bythe Audit Committee. Apart from encouraging people to report ethical violations, Company is also tryingto establish a culture to report examples of good ethical behavior of employees to bring in ethicalpositivity at the work place.

The organization structure for the Management of Business Ethics (MBE) in the Company comprise:

a. Ethics Committee

b. Chief Ethics Counselor

c. Ethics Counselor and

d. Chairperson–Prevention of Sexual Harassment (POSH)

The Company conducted the MBE Assurance survey in 2009 where close to 1300 employees had participated.

7. RISK MANAGEMENT

The Company is committed to having a reliable risk management system. The Management is accountablefor integration of the risk management practices into day to day activities of Company. Different types ofbusiness risks are identified by the top management team and along with risk scores and mitigationmeasures are reported to the Audit Committee. The Audit Committee periodically reviews the policies onrisk assessment and risk management, guidelines to govern the process and the major financial riskexposures and the steps undertaken to control them. Readers are requested to refer the ManagementDiscussion and Analysis Report for more details.

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8. SUBSIDIARY COMPANIES

The Company as on March 31, 2010 had 9 subsidiaries. The details are mentioned elsewhere in the AnnualReport. The minutes of all the subsidiaries are periodically placed before the Board of Directors of theCompany. The attention of the Board is drawn to all significant transactions and arrangements enteredinto by the subsidiary companies. During the year, all the operating subsidiaries adopted the Tata Code ofConduct under Tata Brand Equity and Business Promotion Program of Tata Sons Ltd.

9. GENERAL BODY MEETINGS

The details of the General Meetings held in the last three years are as follows:

Financial year AGM/EGM Venue Time Date

2009-10 EGM Board Room, 1st Floor, 4 p.m. March 05, 2010Tata Capital Ltd,One Forbes, Dr V B Gandhi Marg,Mumbai- 400 023

2008-09 15th AGM 25, Rajiv Gandhi Infotech Park, 3:30 p.m. July 20, 2009Hinjawadi, Pune -411057

2007-08 14th AGM 25, Rajiv Gandhi Infotech Park, 11 a.m. July 21, 2008Hinjawadi, Pune -411057

2007-08 EGM Bombay House Auditorium, 2 p.m. February 28, 2008Bombay House, 24,Homi Mody Street,Mumbai – 400001

2006-07 13th AGM 25, Rajiv Gandhi Infotech Park, 11 a.m. June 27, 2007Hinjawadi, Pune -411057

The details of Special Resolutions passed in the General Meetings in the last three years are as follows:

AGM/EGM Date Special Resolutions

EGM Mar 05, 2010 i. Reduction of Securities Premium Account

ii. Private placement of shares

EGM Feb 28, 2008 i. Issue of equity shares on preferential allotment/privateplacement and

ii. Employee Stock Purchase Scheme

13th AGM Jun 27, 2007 i. Approval for the issue of equity shares on preferentialallotment/private placement

No Special resolutions were passed in the 14th and the 15th Annual General Meetings of the Company.

The resolutions were passed by show of hands and none of the resolutions was passed by way of poll.

Attendance of the Directors at the last AGM held on July 20, 2009:

Name of the Director Attendance at the last AGM

S Ramadorai Yes

R Gopalakrishnan Yes

P P Kadle Yes

C Ramakrishnan No

P R McGoldrick Yes



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10. DISCLOSURES

10.1 Disclosures on materially significant related party transactions i.e. transactions of the Company ofmaterial nature, with its promoters, the Directors or Management or their relatives, etc. that may havepotential conflict with the interests of the Company at large:

The particulars of transactions between the Company and the ‘Related Parties’ are mentioned atpoint no. 13(3)(t)(b) of Notes to Accounts of the Annual Report. None of these transactions are likelyto 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 byany 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, onthe true and fair view of the Financial Statements for the year ended March 31, 2010 is annexedhereto.

11. GENERAL SHAREHOLDER INFORMATION

11.1 Registrar and Share Transfer Agents: Investors are requested to take note of the contact details ofthe Registrars and Share Transfer Agents of the Company, M/s TSR Darashaw Ltd:

TSR Darashaw Ltd6-10 Haji Moosa Patrawala Industrial Estate,20, Dr. E. Moses Road,Mahalaxmi, Mumbai- 400011Tel: +91 22 66568484Fax: +91 22 66568494Email: [email protected]: www.tsrdarashaw.com

11.2 Share Transfer System: The share transfers received are processed by the Registrar and TransferAgents of the Company. The Board ratifies the transfers on a periodical basis.

11.3 Investor Complaints: A total of 394 investor complaints/queries were received during the year 2009-10. One query which was received in the last week of March 2010 was pending as on March 31, 2010.It was attended to on April 01, 2010 and closed.

11.4 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, theCompany is required to transfer the unpaid and unclaimed dividends, matured deposits, redeemeddebentures and interest accrued thereon remaining unclaimed and unpaid for a period of 7 yearsfrom 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/unclaimeddividends to the IEPF after the period of seven years, as per the provisions of the Act and the rulesmade there under.

Given below are the indicative dates for transfer of unclaimed and unpaid dividends to IEPF by theCompany:

Financial Dividend Rate Dividend Payment Proposed Date of

Year Rs. % Date Transfer to IEPF

2002-03 3.00 30.00 11/07/2003 15/08/20102003-04 3.00 30.00 29/06/2004 04/08/20112004-05 3.00 30.00 27/06/2005 30/07/20122005-06 3.00 30.00 27/06/2006 31/07/20132006-07 2.00 20.00 28/06/2007 01/08/20142007-08 2.00 20.00 (Interim) 15/04/2008 20/05/20152007-08 2.00 20.00 (Final) 22/07/2008 03/09/20152008-09 3.00 30.00 (Interim) 30/03/2009 30/04/20162008-09 2.00 20.00 (Final) 21/07/2009 05/09/2016

*the indicative and the actual dates may vary.

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The unclaimed dividend amounts for the financial years 2000-01 and 2001-02, have been transferredto 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 amountstransferred to the IEPF. Investors of the Company who have not yet encashed their unclaimed/unpaid amounts are requested to do so at the earliest.

11.5 Shareholding Pattern as on March 31, 2010

Category No of Shareholders No of Shares % of the Paid-upCapital

Tata Motors Ltd 1 30300600 81.36

Other Tata Entities 3 1849990 4.97

Directors 5 892000 2.39

Employees/Associates/Others 1819 4202001 11.28

Total 1828 37244591 100

11.6 Distribution of Shareholding as on March 31, 2010

Range of Shares Shareholders Shares

Number % Number %

1 - 100 174 9.51 13699 0.04

101 - 500 757 41.41 209911 0.56

501 - 1000 516 28.23 391174 1.05

1001 - 5000 299 16.36 711096 1.91

5001 - 10000 38 2.08 250947 0.67

Above 10000 44 2.41 35667764 95.77

Total 1828 100.00 37244591 100.00

ADDRESS FOR CORRESPONDENCE:

The correspondence to be addressed to the Corporate Registered Office at:

Tata Technologies LtdPlot No 25, Rajiv Gandhi Infotech ParkHinjawadi, Pune – 411 057India.Tel: +91 20 6652 9090Fax: + 91 20 6652 9035Email: [email protected]: www.tatatechnologies.com

COMPANY SECRETARY

Anubhav KapoorGeneral Counsel and Company SecretaryTata Technologies Ltd.Plot No 25, Rajiv Gandhi InfoTech ParkHinjawadi, Pune - 411 057IndiaTel: + 91 20 6652 9090Fax: + 91 20 6652 9035Email: [email protected]



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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 theCompany’s website www.tatatechnologies.com.

I also confirm that, all the Directors and the Senior Management Personnel of Tata Technologies Limited haveaffirmed compliance to the Tata Code of Conduct, as applicable to them for the Financial Year ended March 31,2010.

Sd/-Patrick McGoldrickManaging Director, Tata Technologies Limited

Date: May 11, 2010Place: Mumbai

CEO AND CFO CERTIFICATE

We, Patrick McGoldrick, Chief Executive Officer (CEO) and Samrat Gupta, Chief Financial Officer (CFO) herebycertify that the financial statements of the Company and its subsidiaries/Joint ventures for the year ended on31st March, 2010 do not contain any false or misleading statement or figures and do not omit any materialfact which may make the statements or figures contained therein misleading to the best of our knowledgeand belief.

Sd/- Sd/-Patrick McGoldrick Samrat GuptaManaging Director, Tata Technologies Limited Chief Financial Officer


57

AUDITORS’ REPORT

TO THE MEMBERS OFTATA TECHNOLOGIES LIMITED

1. We have audited the attached Balance Sheet of TATA TECHNOLOGIES LIMITED (“the Company”) as at 31stMarch, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year endedon that date, both annexed thereto. These financial statements are the responsibility of the Company’sManagement. 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. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatements. An audit includes examining, on a test basis, evidencesupporting the amounts and the disclosures in the financial statements. An audit also includes assessingthe accounting principles used and the significant estimates made by the Management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides a reasonable basis for ouropinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government interms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the mattersspecified 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 beliefwere 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 asit appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this reportare in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt withby this report are in compliance with the Accounting Standards referred to in Section 211(3C) of theCompanies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, thesaid accounts give the information required by the Companies Act, 1956 in the manner so required andgive 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 31st March, 2010;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on thatdate and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on thatdate.

5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken onrecord by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from beingappointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

For DELOITTE HASKINS & SELLSChartered Accountants

Registration No.117366W

Hemant JoshiPartner

Membership No. 38019

Place : Pune,Date : 12th May 2010

Sixteenth annual report 2009-10


58

(i) Having regard to the nature of the Company’s business/activities clauses (vi), (viii), (x), (xii), (xiii), (xiv), (xviii),(xix), (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative detailsand situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with aregular programme of verification which, in our opinion, provides for physical verification of all thefixed assets at reasonable intervals. According to the information and explanation given to us, nomaterial discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part ofthe fixed assets of the Company and such disposal has, in our opinion, not affected the goingconcern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management atreasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures ofphysical verification of inventories followed by the Management were reasonable and adequate inrelation 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 hasmaintained proper records of its inventories and no material discrepancies were noticed on physicalverification.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms orother parties listed in the Register 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 theexplanations that some of the Company’s transactions of purchase involve goods and services of aspecialized nature for which comparative prices are not available, there are adequate internal controlsystems commensurate with the size of the Company and the nature of its business for the purchase ofinventory, fixed assets and for the sale of goods and services. During the course of our audit, we have notobserved 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 usthere are no contracts or arrangements with companies, firms or other parties covered in the registermaintained under section 301 of the Companies Act, 1956.

(vii) In our opinion, the internal audit functions carried out during the year by the internal audit departmentof the holding Company appointed by the management have been commensurate with the size of theCompany and the nature of its business.

(viii) According to the information and explanations given to us in respect of statutory dues:

(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, WealthTax, Service Tax, Custom Duty, Cess and other material statutory dues applicable to it with theappropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Cessand other material statutory dues in arrears as at 31st March, 2010 for a period of more than sixmonths from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty and Cess which havenot been deposited as on 31st March, 2010 on account of disputes are given below:

ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3. of our report of even date)

59

Statute Nature of Dues Forum where Period to which Amount involvedDispute is the amount relates (Rs. in lakhs)pending

The Income Tax Income Tax Commissioner 2003-04 47.17Act, 1961 of Income Tax

(Appeals)Income Tax Commissioner 2004-05 34.56

of Income Tax(Appeals)

Income Tax Commissioner 2008-09 11.47 of Income Tax(Appeals)

Central Sales Tax, Sales Tax Deputy 1997-98 2.651956 Commissioner

of Sales Tax(Appeals)

Sales Tax Deputy 1998-99 44.82Commissionerof Sales Tax(Appeals)

Sales Tax Deputy 2003-04 0.25Commissionerof Sales Tax(Appeals)

Finance Act, 1994 Service Tax Commissioner 2009-10 100.91(Service Tax (Appeals)Provisions)

(ix) In our opinion and according to the information and explanations given to us, the Company has notdefaulted in the repayment of dues to banks, financial institutions and debenture holders.

(x) In our opinion and according to the information and explanations given to us, the terms and conditionsof the guarantees given by the Company for loans taken by others from banks and financial institutionsare 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 beenapplied 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 overallexamination of the Balance Sheet, we report that funds raised on short-term basis have not been usedduring the year for long-term investment.

(xiii) To the best of our knowledge and according to the information and explanations given to us, no fraudby the Company and no fraud on the Company has been noticed or reported during the year.



Hemant JoshiPartner

Membership No. 38019

Place : Pune,Date : 12th May 2010



60

in Rs lakhs.

Schedule Mar 31, 2010 Mar 31, 2009

SOURCES OF FUNDS

SHAREHOLDERS’ FUNDS

Share Capital 1 3,724.46 3,715.81

Advance towards Share Capital - 2.04

Reserves and Surplus 2 35,661.78 32,767.66

39,386.24 36,485.51

LOAN FUNDS

Secured Loans 3 39.85 4,249.80

Unsecured Loans 4 4,052.71 -

4,092.56 4,249.80

DEFERRED TAX LIABILITY (NET) 163.86 104.37

(Note 3.a Schedule ‘13’ )

TOTAL FUNDS EMPLOYED 43,642.66 40,839.68

APPLICATION OF FUNDS

FIXED ASSETS

Gross Block 5 12,341.11 9,847.87

Less: Depreciation and amortisation 5,476.26 4,863.40

Net Block 6,864.85 4,984.47

Capital Work in Progress 62.16 70.23

6,927.01 5,054.70

INVESTMENTS 6 26,573.96 24,766.21

CURRENT ASSETS, LOANS AND ADVANCES

Sundry Debtors 7 5,865.16 6,148.33

Cash and Bank Balances 8 4,179.85 602.60

Other Current Assets 9 6.12 2.92

Loans and Advances 10 11,067.59 10,716.10

21,118.72 17,469.95

Less: CURRENT LIABILITIES AND PROVISIONS

Liabilities 11 7,180.98 4,807.11

Provisions 12 3,796.05 1,644.07

10,977.03 6,451.18

NET CURRENT ASSETS 10,141.69 11,018.77

TOTAL FUNDS APPLIED 43,642.66 40,839.68

Significant Accounting Policies and Notes to Accounts 13

Balance Sheet as at March 31, 2010

The Schedules referred to above and the notes thereon form an integral part of the Balance Sheet.

This is the Balance Sheet referred to in our report.

Samrat Gupta


Anubhav KapoorCompany Secretary

As per our report of even date attached

For Deloitte Haskins & Sells

Chartered Accountants

Hemant JoshiPartner

Date: May 12, 2010Place: Pune


S Ramadorai Chairman

P R McGoldrick Managing Director

R Gopalakrishnan Director

P P Kadle Director

C Ramakrishnan Director


61

in Rs lakhs.

Year ended Year endedSchedule Mar 31, 2010 Mar 31, 2009

INCOME

Income from Services A 34,293.03 30,858.38

Sale of Products B 3,945.55 6,262.33

Other Income C 941.76 767.81

39,180.34 37,888.52

EXPENDITURE

Cost of Traded Items & Services D 3,085.66 5,063.04

AMC Charges E 337.88 184.36

Consultancy fees, Softwares and others F 2,708.07 2,312.26

Payroll and Related Expenses G 18,428.79 17,595.68

Communication Expenses H 338.46 244.39

Administration & Marketing Expenses I 2,345.17 2,820.03

Finance Charges J 170.82 367.29

Depreciation and amortisation 5 937.34 814.98

Bad Debts written off 88.68 -

Provision / (Write back) for Bad and Doubtful debts 9.12 124.50

28,449.97 29,526.53

PROFIT / (LOSS) BEFORE TAX 10,730.35 8,361.99


- Current Tax 3,034.36 2,317.42

- Tax for earlier year - 33.74

- Deferred Tax charge / (credit) 59.49 102.52

- Fringe Benefit Tax - 105.00

PROFIT / (LOSS) AFTER TAX 7,636.50 5,803.31

Balance Brought forward from Previous Year 5,564.59 2,533.87

PROFIT AVAILABLE FOR APPROPRIATIONS 13,201.09 8,337.18

APPROPRIATIONS

Dividend

- Interim Dividend - 1,114.19

- Final Dividend 2,603.12 742.79

Tax on dividend 432.34 315.59

Transfer to General Reserve 800.00 600.00

Balance carried to Balance Sheet 9,365.63 5,564.61

13,201.09 8,337.18

E.P.S (Equity Shares, par Value Rs. 10 each) [note 3.b of Schedule ‘13’]

- Basic (in Rs.) 20.54 15.63

- Diluted (in Rs.) 20.41 15.50


Profit and Loss Account for the year ended March 31, 2010

The Schedules referred to above and the notes thereon form an integral part of the Profit and Loss Account.

This is the Profit and Loss Account referred to in our report.

Samrat Gupta






Hemant JoshiPartner






P P Kadle Director





62

in Rs lakhs.Year ended Year ended

Mar 31, 2010 Mar 31, 2009CASH FLOW FROM OPERATING ACTIVITIES

Net Profit after Taxation and Extraordinary Items 7,636.50 5,803.31Depreciation 937.34 814.98Disallowance of TDS Abroad 1.96 -Provision for Wealth Taxes 0.98 0.56Provision for Income Tax 3,034.36 2,317.42Provision for Deferred Tax 59.49 102.52Provision for Fringe Benefit Tax - 105.00Loss on Sale of Fixed Assets 0.75 2.14Interest Received (703.91) (480.87)Interest Paid 170.83 367.30Effect of exchange differences on translation of foreigh currency cash & cash equivalent 617.93 (414.88)Provision for Doubtful Debts (77.26) 124.50Operating profit before Working Capital Changes 11,678.97 8,741.98Adjustments for :Debtors (379.48) (2,261.05)Loans & Advances to Employees (69.87) 93.77Bills of Exchange 452.69 (452.69)Advance to Supplier, Contractors & Others 113.02 (146.34)Deposits with Govt. Bodies & Others 43.60 (11.05)Prepaid Expenses (979.82) (56.47)Sundry Creditors 1,860.27 525.63Advance & Progress Payments 11.98 (113.86)Provision for Staff Welfare Expenses (7.95) (110.48)Advance Tax / Tax Deducted at Source (3,482.56) (3,596.41)NET CASH FLOW (USED IN)/GENERATED FROM OPERATING ACTIVITIES 9,240.85 2,613.03

CASH FLOW FROM INVESTING ACTIVITIESPayment of Loan to Subsidiary 657.26 (95.23)Investment in Joint Venture (98.50) (175.00)Investment in Mututal Fund (made)/sold (net) (1,709.26) (2,700.44)Proceeds from sale of Fixed Assets 19.55 26.04Payment for Purchase of Fixed Assets (2,793.51) (1,008.20)NET CASH FLOW (USED IN)/GENERATED FROM INVESTING ACTIVITIES (3,924.46) (3,952.83)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from issue of shares under ESOP Scheme including Premium 31.12 34.53Interest Paid (170.83) (367.30)Dividends Paid (including Dividend Tax) (975.86) (2,863.62)Interest Received 700.71 480.95Inter Corporate Deposits (Net) (1,300.00) (395.00)Proceeds from Short Term borrowings 11.72 3,926.50Proceeds from Long Term borrowings 20.26 26.18Repayment of Long Term borrowings (56.26) (59.31)NET CASH FLOW (USED IN)/GENERATED FROM FINANCING ACTIVITIES (1,739.14) 782.93

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS 3,577.25 (556.87)Cash & Cash equivalents at the beginning of the year 602.60 1,159.47Cash & Cash equivalents at the end of the period / year 4,179.85 602.60

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS 3,577.25 (556.87)

Cash Flow Statement

Samrat Gupta






Hemant JoshiPartner






P P Kadle Director



63

in Rs lakhs.

SCHEDULE - A

Year ended Year endedMar 31, 2010 Mar 31, 2009

INCOME FROM SERVICES

Income from Services 34,293.03 30,858.38

34,293.03 30,858.38

SCHEDULE - B


SALE OF PRODUCTS

Traded Products 3,945.55 6,262.33

3,945.55 6,262.33

SCHEDULE - C


OTHER INCOME

Interest Income * 703.91 480.87

Commission Income 49.47 128.94




Excess Provision written back - 83.72

941.76 767.81

* Tax deducted at source on interest is Rs. 85.77 Lakhs (Rs. 85.93 Lakhs in 2008-09)

SCHEDULE - D


COST OF TRADED GOODS & SERVICES

Purchase of Products for Sale

Purchase of Products 3,085.66 5,063.04

3,085.66 5,063.04

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT



64

in Rs lakhs.

SCHEDULE - E


AMC CHARGES

AMC Charges on SAP End User Licenses 22.05 19.16

AMC Charges (Others) 315.83 165.20

337.88 184.36

SCHEDULE - F


CONSULTANCY FEES, SOFTWARES & OTHERS

Outsourcing Charges 1,887.66 1,621.49

Software-internal use 121.37 99.15

Consultancy Fees 624.40 482.20

Professional Fees 74.64 99.55

Subscription Costs - 9.87

2,708.07 2,312.26

SCHEDULE - G


PAYROLL & RELATED EXPENSES

Salaries and Allowances 16,982.44 16,303.43

Superannuation 282.20 330.83

Provident Fund 584.22 579.69

Staff welfare Expenses 470.75 349.35

Gratuity 109.18 32.38

18,428.79 17,595.68

SCHEDULE - H


COMMUNICATION EXPENSES

Telephone Expenses / Fax Charges 205.05 176.02

ISDN Charges 133.41 68.37

338.46 244.39


65

in Rs lakhs.

SCHEDULE - I


ADMINISTRATION & MARKETING EXPENSES

Expenses for Administration / Marketing

Repairs & Maintenance

- Buildings 38.30 21.46

- Plant & Machinery 3.55 29.10

- Others 124.36 108.16

Rent 173.16 152.18

Rates and Taxes 29.01 3.55

Provision for Wealth Tax 0.98 0.56

Insurance 23.68 27.11

Advertisement and Publicity 0.29 0.95

Business Promotion Expenses 43.08 36.98

Office Expenses 238.23 239.96

Travelling & Conveyance 794.19 1,158.97

Power & Fuel 131.97 109.26

Water Charges 18.66 19.46

Auditors Remuneration 29.38 26.58

Staff Training and Seminar Expenses 53.89 75.13

Staff Recruitment Expenses 35.87 89.29

Commision to Others 258.70 256.18

Foreign Currency (Gain)/Loss - (Net) 252.92 352.20

Other Expenses 94.95 112.95

2,345.17 2,820.03

SCHEDULE - J


FINANCE CHARGES

Interest on Cash Credit - 0.24

Interest on Packing Credit Loan 158.66 356.48

Interest on Vehicles Loans 8.03 10.52

Interest Expense - Others 4.13 0.05

170.82 367.29




66

in Rs lakhs.

SCHEDULE - 1 As at As atMar 31, 2010 Mar 31, 2009

SHARE CAPITAL

Authorised :-

60,000,000 ordinary shares of Rs. 10/- each 6,000.00 5,000.00(P.Y. 50,000,000 equity shares of Rs. 10/- each)

700,000 0.01% Cumulative Non-participative Compulsorily 70.00 -convertible Preference Shares of Rs. 10/- each(P.Y. Nil)

6,070.00 5,000.00

Issued, Subscribed and Paid-up : 3,724.46 3,715.81

37,244,591 equity shares of Rs. 10/- each(P.Y. 37,158,104 equity shares of Rs. 10/- each)

3,724.46 3,715.81

Note:

30,300,600 equity shares are held by Tata Motors Limited, the holding company (P.Y.30,300,600 equity shares). Of the aboveshares, 2,000,000 (P.Y. 2,000,000) shares were allotted to Tata Motors Ltd. as fully paid pursuant to a contract, without paymentsbeing received in cash.


RESERVES AND SURPLUS

Securities Premium

As at the beginning of the year 25,537.93 25,511.42


Adjustments during the year * (1,731.44) -

Securities Premium identified for Consolidation adjustment * (2,934.33) -

20,896.67 25,537.92

Securities Premium identified for Consolidation adjustment * 2,934.33 -

* Refer Note no 3.q of Schedule ‘13’

As at the end of the period 23,831.00 25,537.92

General Reserves

As at the beginning of the period 1,665.15 1,065.15

Additions during the period 800.00 600.00


Profit & Loss Account 9,365.63 5,564.59

35,661.78 32,767.66


SECURED LOANS

Foreign Currency Loan from Bank - 4,173.95

[Secured by hypothecation of Current Assets of the Company(excluding loans and advances given to subsidiaries and othergroup companies)]

Vehicle Loans 39.85 75.85

[Secured by hypothecation of vehicles financed]39.85 4,249.80

SCHEDULES FORMING PART OF THE BALANCE SHEET

67


SCHEDULE - 5

FIXED ASSETS in Rs lakhs.

Original Cost Depreciation and amortisation Net Book Value

As at Additions Deductions As at As at For the Deductions As at As at As atMar 31, Mar 31, Mar 31, period ended Mar 31, Mar 31, Mar 31,

2009 2 0 1 0 2009 Mar 31, 2010 2 0 1 0 2 0 1 0 2009

Leasehold Land 409.35 - - 4 0 9 . 3 5 36.19 4.31 - 4 0 . 5 0 3 6 8 . 8 5 373.16

Buildings 2,208.66 9.46 - 2 , 2 1 8 . 1 2 379.56 92.39 - 4 7 1 . 9 5 1 , 7 4 6 . 1 7 1,829.10

Plant & Machinery @ 5,085.93 254.90 276.98 5 , 0 6 3 . 8 5 3,479.98 334.15 268.17 3 , 5 4 5 . 9 6 1 , 5 1 7 . 8 9 1,605.95

Furniture & Fixtures @ 581.37 16.28 - 5 9 7 . 6 5 148.76 39.63 - 1 8 8 . 3 9 4 0 9 . 2 6 432.61

Vehicles ** 243.91 68.21 67.80 2 4 4 . 3 2 150.00 58.36 56.31 1 5 2 . 0 5 9 2 . 2 7 93.91

Software Licenses @ 1,318.64 2,489.18 - 3 , 8 0 7 . 8 2 668.91 408.50 - 1 , 0 7 7 . 4 1 2 , 7 3 0 . 4 1 649.73

To t a l 9,847.86 2,838.03 344.78 1 2 , 3 4 1 . 1 1 4,863.40 937.34 324.48 5 , 4 7 6 . 2 6 6 , 8 6 4 . 8 5 4,984.46

Previous year 9,052.21 961.03 165.37 9 , 8 4 7 . 8 7 4,185.61 814.98 137.19 4 , 8 6 3 . 4 0 4 , 9 8 4 . 4 7 4,866.60

Capital Work in Progress * 6 2 . 1 6 70.23

Notes:

* Capital Work in Progress includes capital advance payments of Rs.14.22 Lakhs (as at 31st March 2009 Rs.14.25 Lakhs)

** Vehicles includes Rs.158.41 Lakhs acquired on loan, hypothecated with Tata Finance Ltd & ICICI Bank Ltd.(as at 31st March 2009 Rs.156.88 Lakhs)

@ Movable Fixed Assets other than vehicles amounting to Rs. 9,469.30 Lakhs are hypothecated against Cash Credit facilities(Rs. 6,985.94 Lakhs as at 31st March 2009)

in Rs lakhs.

SCHEDULE - 4

As at As atMar 31, 2010 Mar 31, 2009

UNSECURED LOANS

Foreign Currency Loan from Bank 4,052.71 -

4,052.71 -



68


in Rs lakhs.

SCHEDULE - 6

As at As atMar 31, 2010 Mar 31, 2009

INVESTMENTS

(a) TRADE (UNQUOTED) - at cost

i) Investment in Subsidiary companies

Tata Technologies Inc. (formerly known as INCAT Systems, Inc.) @ 1,556.64 1,556.64(150,000 (P.Y. 150,000) shares of non-voting Class ‘A’ common stockwith no Par value)

Tata Technologies Pte Ltd, Singapore, a 100% subsidiary company 20,334.12 20,334.1286,463,759 (P.Y. 86,463,759) ordinary shares with no par value

ii) Investment in Joint Venture Company

Tata HAL Technologies Ltd (formerly known as INCAT HALAerostructures Ltd)

2,735,000 (P.Y. 1,000,000) equity shares of Rs. 10 each fully paid(50% JV with HAL) 273.50 100.00

Share Application money paid - 75.00

Long Term Investments 22,164.26 22,065.76

22,164.26 22,065.76

@ Consequent to the merger of Tata Technologies, USA with its whollyowned subsidiary Tata Technologies Inc, (formerly known asINCAT Systems Inc) on 1st April 2006, the Company’s holdingof 150,000 shares in Tata Technologies, USA has beenconverted to 150,000 shares in the resultant Company.

(b) Current Investments (At Cost or Fair value whichever is lower)

Investments in Mutual Funds (Unquoted)

HDFC Floating rate Income Fund - series 2035 - Units 991,974.923 100.00 -value Rs 10.0809 each (NAV as on 31.03.2010 Rs. 10.0809 per unit (P.Y.Nil))

HDFC 3006 Cash Management Fund - Units 7,993,922.228 value 850.27 -Rs. 10.6364 each (NAV as on 31.03.2010 Rs. 10.6364 per unit (P.Y.Nil))

Birla Sunlife Cashplus Savings Fund - series B503DD - Units 18,007,805.578 1,804.29 -value Rs. 10.0195 each (NAV as on 31.03.2010 Rs. 10.0195 unit (P.Y.Nil))

Birla Sunlife Short Term Fund - series B85DD - Units 2,000,724.502 value 200.18 -Rs. 10.0055 each (NAV as on 31.03.2010 Rs. 10.0055 per unit (P.Y.Nil))

Birla series B47 - Nil (P.Y.Units 4,999,251 value Rs. 10.0030 each. - 500.08(NAV as on 31.03.2009 Rs. 10.0030 per unit )

TATA - Liquid Super High Investment Fund- Scheme TLSD01- 450.68 500.09Units 40436.807 value Rs.1114.52 each. (NAV as on 31.03.2010Rs. 1114.52 per unit (P.Y.Units 44870.191 value Rs. 1114.52 each.(NAV as on 31.03.2009 Rs. 1114.52 per unit )

Kotak Liquid (Institutional Premium) - Unit 5,979,328.9810 value 731.16 500.07Rs. 12.2281 each (NAV as on 31.03.2010 Rs. 12.2281 per unit)

(P.Y. Units 4,089,539.89 value Rs. 12.2281 each. (NAV as on 31.03.2009Rs. 12.2281 per unit )

Reliance Liquidity Fund-Daily dividend Reinvestment option - Nil - 500.08(PY Units 4,999,229.268 value Rs. 10.0031 each. (NAV as on 31.03.2009Rs. 10.0031 per unit )

LIC Liquid Find - dividend Plan - Unit 2,487,441.877 value Rs. 10.9801 each 273.12 700.13(NAV as on 31.03.2010 Rs. 10.9801 per unit)


(Refer Note no. 3.m of Schedule ‘13’ )

4,409.70 2,700.45

26,573.96 24,766.21

69


in Rs lakhs.

SCHEDULE - 7

As at As atMar 31, 2010 Mar 31, 2009

SUNDRY DEBTORS

(a) Over six months old (unsecured)

Considered good 65.81 342.30

Considered doubtful 249.42 168.37

(b) Others (unsecured, considered good) * 5,799.35 5,806.03

6,114.58 6,316.70

Less : Provision for doubtful debts (Refer Note no. 3.o of Schedule ‘13’) 249.42 168.37

5,865.16 6,148.33

* Debtors include unbilled revenue of Rs. Nil [Rs.191.70 Lakhs as at Mar 31, 2009]

SCHEDULE - 8

As at As atMar 31, 2010 Mar 31, 2009

CASH & BANK BALANCES

Cash on hand 2.66 2.81

Cheques on Hand 29.56 171.36

Balances with Scheduled Banks:

in Current Accounts 1,957.15 350.54

in Deposit Accounts * 2,190.48 77.89

4,179.85 602.60

Note:

* Pledged/lien with the Bankers for obtaining Bank Guarantees/LCs/LUTs - Rs. 2,188.16 Lakhs[Rs. 20.03 Lakhs as at Mar31, 2009]

SCHEDULE - 9

As at As atMar 31, 2010 Mar 31, 2009

OTHER CURRENT ASSETS

Income accrued

Interest Accrued on Deposits 6.12 2.92

6.12 2.92

SCHEDULE - 10

As at As atMar 31, 2010 Mar 31, 2009

LOANS & ADVANCES

(Unsecured - considered good)

Loans & Advances to Employees * 150.34 80.46

Less: Provision for Doubtful Loans & Advances to Employees (4.13) (4.13)


Advances to Suppliers, Contractors & Others 1,033.81 1,146.83

Loans to Subsidiaries:

Tata Technologies Inc. 912.58 1,794.67

Inter-corporate deposits:

Tata Motors Ltd. (Holding Company) 5,500.00 4,200.00

Deposits With Government, Public Bodies and Others 71.84 115.44


Advance Payments against Taxes (Net of provisions) 3,264.21 2,825.44

11,067.59 10,716.10

* Note: Includes considered doubtful’ - Rs. 4.13 Lakhs[Rs.4.13 Lakhs as at Mar 31, 2009]



70


in Rs lakhs.

SCHEDULE - 11

As at As atMar 31, 2010 Mar 31, 2009

CURRENT LIABILITIES

Sundry Creditors - Dues to other than Micro, Medium and Small enterprises 6,903.17 4,411.46


Liability towards Investors Education and Protection Fund under Section 205C

of the Companies Act, 1956, not due : Unpaid Dividend 25.11 131.94


7,180.98 4,807.11

SCHEDULE - 12

As at As atMar 31, 2010 Mar 31, 2009

PROVISIONS

Provision for Taxation (Net of Advance Taxes) * 61.50 67.99

Proposed Dividend 2,603.12 742.79



3,796.05 1,644.07

* Includes provision for wealth tax - Rs. 0.81 Lakhs [Rs. 0.56 Lakhs as at Mar 31, 2009]

71

13. SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS

1. Company overview

TATA Technologies Limited (“TTL or the Company”) was incorporated on August 22, 1994 as a PrivateLimited company in the name of Core Software Systems Private Limited. The name of the Company wassubsequently changed to Tata Technologies (India) Limited. On February 8, 2001, the Company changedits name from Tata Technologies (India) Limited to Tata Technologies Limited. The Company’s range ofservices includes IT Consultancy, SAP implementation and maintenance, providing networking solutions,CAD/CAM engineering & design consultancy. The Company is headquartered in Pune, India. The Companyhas seven branches located at Mumbai, Lucknow, Jamshedpur, Bangalore, Puducherry, Chennai andSouth Korea that enables it to provide high quality, cost-effective services to clients in India and abroad.

2. Significant Accounting Policies

a. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, in accordance withIndian Generally Accepted Accounting Principles (GAAP). GAAP comprises the mandatory accountingstandards prescribed under Section 211(3C) of the Companies Act, 1956. Accounting policies havebeen consistently applied except where a newly issued accounting standard is initially adopted ora revision to an existing accounting standard requires a change in the accounting policy hithertoin use.

b. Use of Estimates

The preparation of the financial statements in conformity with GAAP requires the management ofthe Company (Management) to make estimates and assumptions that affect the reported amountsof revenue and expenses during the year and balances of assets and liabilities and disclosuresrelating to contingent liabilities as at the date of financial statements.

Provisions are made for all known losses and liabilities, future unforeseeable factors that mayaffect the profit on fixed price service contracts and also towards likely expenses for providingpost-sales client support on such contracts.

c. Revenue Recognition

Revenue from services on time and materials contracts is recognized when services are renderedand related costs are incurred i.e. based on certification of time sheets and billed to clients as perthe terms of specific contracts. In case of fixed price contracts, revenue is recognized over the life ofthe contract based on milestones achieved as specified in the contracts or by proportionatecompletion method on the basis of the work completed. Foreseeable losses on such contracts arerecognized when probable.

Revenue from rendering Annual Maintenance Services (SAP-ERP) is recognized proportionatelyover 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.

d. Fixed assets

Fixed assets are stated at cost, less accumulated depreciation. Costs include all expenses incurred tobring the assets to its present location and condition. Direct costs are capitalized till the assets areready for use and include financing costs relating to any borrowing attributable to the acquisitionof the fixed assets.

Software not exceeding Rs. 25,000 is charged off to the profit and loss account.

e. Depreciation

Depreciation on Fixed Assets except on Computers & Peripherals (included in Plant & Machinery) isprovided on Straight Line Method (SLM) at the rates specified in the schedule XIV to the CompaniesAct, 1956. In case of Computers & Peripherals, the benefit period is considered to be of four years.Accordingly, depreciation is provided on SLM at the rate of 25% per annum. Depreciation on

Schedules forming part of the Balance Sheet and Profit and Loss Account

for the year ended March 31, 2010



72

additions to Fixed Assets is provided on pro-rata basis from the month of acquisition of the Asset.Depreciation on Assets sold/scraped during the year 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.

The value of leasehold land is amortized over the lease period of 95 years.

The value of vehicles acquired on loan is depreciated over a period of 3 & 5 years depending on theterm of the Loan agreement.

The value of Softwares (Intangibles) is being amortised over its useful life i.e. between 2 to 4 years.

f. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantiallyvest with the lessor, are recognized as operating lease. Lease payments under operating leases arerecognized 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 thedate of the transaction.

Monetary current assets and current liabilities are reinstated at year-end exchange rates and theprofit /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 recognizedas 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 carryingamount 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 suchinvestments. Diminution in value is provided for where the management is of the opinion that thediminution is of permanent nature.

i. Impairment of Assets

At each balance sheet date, the Company reviews using internal resources the carrying amounts ofits fixed assets to determine whether there is any indication that the assets suffered an impairmentloss. If any such condition exists, the recoverable amount of the asset is estimated in order todetermine the extent of impairment loss. Recoverable amount is the higher of an asset’s net sellingprice and value in use. In assessing value in use, the estimated future cash flows expected fromcontinuing use of the asset and from its disposal are discounted to their present value using a pretax rate that reflects the current market assessments of time value of money and the risks specificto 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 movingweighted average basis.

k. Employee Benefits

i. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan coveringeligible employees. The plan provides for a lump sum payment to vested employees atretirement, death while in employment or on termination of employment of an amountequivalent to 15 to 30 days salary payable for each completed year of service. Vesting occursupon completion of five years of service. The Company makes annual contributions to gratuityfund established as trust. The Company accounts for the liability for gratuity benefits payablein future based on an independent actuarial valuation.

73

ii. Superannuation

The Company has two superannuation plans, a defined benefit plan and a defined contributionplan. An eligible employee on April 1, 1996 could elect to be member of either plan. Employeeswho are the members of the defined benefit superannuation plan are entitled to benefitsdepending on the years of service and salary drawn. The monthly pension benefits afterretirement range from 0.75% to 2% of the annual basic salary for each year of service. TheCompany account for superannuation benefits payable in future under the plan based on anindependent actuarial valuation.

With effect from April 1, 2003, this plan was amended and benefits earned by covered employeeshave been protected as at March 31, 2003. Employees covered by this plan are prospectivelyentitled to benefits computed on a basis that ensures that the annual cost of providing thepension benefits would not exceed 15% of salary.

The Company maintains separate irrevocable trusts for employees covered and entitled tobenefits. The Company contributes up to 15% of the eligible employees’ salary to the trustevery year. Such contributions are recognized as an expense when incurred. The Company hasno further obligation beyond this contribution.

iii. Bhavishya Kalyan Yojana (BKY)

Bhavishya Kalyan Yojana is an unfunded defined benefit plan. The benefits of the plan accrueto an eligible employee at the time of death or permanent disablement, while in service, eitheras a result of an injury or as certified by the appropriate authority. The monthly payment todependents of the deceased /disabled employee under the plan equals 50% of the salarydrawn at the time of death or accident or a specified amount, whichever is higher. The Companyaccounts for the liability for BKY benefits payable in future based on an independent actuarialvaluation.

iv. Post-retirement Medicare Scheme

Under this Scheme employees get medical benefits subject to certain limits of amount, periodsafter retirement and types of benefits, depending on their grade and location at the time ofretirement. The Company account for the liability for post-retirement medical scheme basedon an independent actuarial valuation.

v. Provident Fund

The eligible employees of the Company are entitled to receive benefits under the providentfund, a defined contribution plan, in which both employees and the company make monthlycontributions at a specified percentage of the covered employee’s salary (currently 12% ofemployee’s salary). The provident fund contributions, as specified under the law, are paid tothe provident fund set up as irrevocable trust by the Company and pension amount is paid toRegional Provident Fund Commissioner and the Central Provident Fund under the StatePension Scheme.

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 sheetdate on the basis of an independent actuarial valuation.

l. Taxation

Current income tax expense comprises taxes on income from operations in India and foreign taxjurisdictions. Current Income tax payable in India is determined in accordance with the provisionsof the Income Tax Act, 1961 and current income tax expense relating to overseas operations isdetermined 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 betweentaxable income and accounting income that originate in one period and are capable of reversal inone or more subsequent periods. Deferred tax assets and liabilities are measured using the taxrates 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 recognizedonly to the extent that there is virtual certainty that taxable income will be available to realize these



74

assets. All other deferred tax assets are recognized only to the extent that there is reasonablecertainty that future taxable income will be available to realize these assets.

m. Employee Stock Options

In accordance with the Employee Stock Option Scheme and Employee Stock Purchase SchemeGuidelines, 1999 issued by Securities and Exchange Board of India (SEBI), the Company introducedEmployee Stock Option Plan 2001 (TTESOP 2001) in 2000-01. As per the Plan, the options weregranted at fair value as determined by an independent valuer as on the date of the grant and henceno compensation cost has been recognized.

n. Cash flow statement

Cash flows are reported using indirect method, whereby net profits after tax is adjusted for theeffects of transactions of a non-cash nature and any deferrals or accruals of past or future cashreceipts or payments. The cash flows from regular revenue generating, investing and financingactivities of the Company are segregated.

o. Earnings per share

The earnings considered in ascertaining the Company’s earnings per share comprise the net profitafter tax and include the post-tax effect of any extra-ordinary items. The number of shares used incomputing basic earnings per share, is the weighted average number of shares outstanding duringthe year. The number of shares used in computing diluted earnings per share comprises the sharesconsidered for deriving basic earnings per share and also number of equity shares that could havebeen 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 aqualifying asset are capitalized as part of the cost of that asset. Borrowing costs are capitalized aspart of the cost of a qualifying asset when it is probable that they will result in future economicbenefits to the enterprise and the costs can be measured reliably. Other borrowing costs arerecognized 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 present obligation as a result of past event andits probable that an outflow of resources will be required to settle the obligation, in respect ofwhich reliable estimate can be made. The provisions (excluding retirement benefits) are notdiscounted to its present value and are determined based on best estimate required to settle theobligation at the balance sheet date. These are reviewed at each balance sheet date and adjustedto 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.

3. Notes to Balance Sheet and Profit and Loss Account

a. Deferred Tax

Major components of deferred tax arising on account of timing differences are:

As at As atMarch 31, 2010 March 31, 2009

Rs. Lakhs Rs. Lakhs

Deferred tax liabilities:


Sub-total 631.29 363.55

Deferred tax assets:

Provision for expenses u/s. 43B 221.75 232.77

Provision for doubtful debts 32.38 26.41

Others 213.30 -

Sub-total 467.43 259.18

Deferred Tax Asset /(Liability) Net (163.86) (104.37)

75

b. Computation of Earnings per share

2009-2010 2008-2009Earnings Per Share(a) Profit after tax Rs. Lakhs 7,636.50 5,803.31(b) The weighted average number of Ordinary

Shares for Basic EPS Nos. 37,187,364 37,139,680(‘c) The nominal value per Ordinary Share Rupees 10.00 10.00(d) Earnings Per Share (Basic) Rupees 20.54 15.63(e) Profit after tax for Basic & Diluted EPS Rs. Lakhs 7,636.50 5,803.31(f ) The weighted average number of Ordinary

Shares for Basic EPS Nos. 37,187,364 37,139,680(g) Add: Adjustment for Employee Stock Options Nos. 220,460 306,947(h) The weighted average number of Ordinary

Shares for Diluted EPS Nos. 37,407,824 37,446,627(i) Earnings Per Shares (Diluted) Rupees 20.41 15.50

c. Employee Benefits

Defined benefit plans/long term compensated absences as per actuarial valuations as on March 31, 2010

Rs. in lakhs

G r a t u i t y S u p e r a n n u a t i o n C o m p e n s a t e d P o s t - B K Ya b s e n c e s r e t i r e m e n t

M e d i c a r es c h e m e

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

i Components of employer expense

Current Service cost 115.89 114.45 25.87 27.09 64.33 20.54 16.56 27.93 9.67 9.26

Interest cost 89.21 89.37 32.76 32.77 35.29 33.33 11.94 16.52 5.91 12.64

Expected return on plan assets (93.66) (96.39) (39.23) (36.20) - - - - - -

Actuarial Losses/(Gains) (2.27) (75.06) (15.52) 30.44 (16.82) 125.11 37.19 (94.83) (8.33) (96.25)

Total expense/(income) recognised inthe Statement of Profit & Loss Account 1 0 9 . 1 7 3 2 . 3 7 3 . 8 8 5 4 . 1 0 8 2 . 8 0 1 7 8 . 9 8 6 5 . 6 9 ( 5 0 . 3 8 ) 7 . 2 5 ( 7 4 . 3 5 )

ii Actual Contribution and Benefit Paymentsfor year ended 31 March 2010

Actual benefit payments 113.36 113.19 2.45 25.73 154.78 156.96 3.72 3.15 5.19 4.63

Actual Contributions - - 28.32 30.82 154.78 N/A 3.72 N/A 5.19 N/A

iii Net asset/(liability) recognised in balancesheet as at March 31, 2010

Present Value of Defined Benefit Obligation 1,212.00 1,106.22 531.15 486.54 420.63 492.61 204.32 142.35 74.15 72.09

Fair value of plan assets 1,223.98 1,227.37 546.53 477.48 - - - - - -

Net asset/(liability) recognised inbalance sheet 1 1 . 9 8 1 2 1 . 1 5 1 5 . 3 8 ( 9 . 0 6 ) ( 4 2 0 . 6 3 ) ( 4 9 2 . 6 1 ) ( 2 0 4 . 3 2 ) ( 1 4 2 . 3 5 ) ( 7 4 . 1 5 ) ( 7 2 . 0 9 )

i v Change in Defined Benefit Obligations

(DBO) during the year ended March 31, 2010

Present Value of DBO at beginning of year 1,106.22 1,108.00 486.54 435.70 492.61 470.59 142.35 195.88 72.09 151.06


Interest cost 89.21 89.37 32.76 32.77 35.29 33.33 11.94 16.52 5.91 12.64

Actuarial (gains)/ losses 14.04 (92.42) (11.57) 16.71 (16.82) 125.11 37.19 (94.83) (8.33) (96.25)

Benefits paid (113.36) (113.19) (2.45) (25.73) (154.78) (156.96) (3.72) (3.15) (5.19) (4.63)

Present Value of DBO at the end of year 1,212.00 1,106.22 5 3 1 . 1 5 4 8 6 . 5 4 4 2 0 . 6 3 4 9 2 . 6 1 2 0 4 . 3 2 1 4 2 . 3 5 7 4 . 1 5 7 2 . 0 9

v Change in Fair Value of Assets during theyear ended March 31, 2010

Plan assets at beginning of year 1,227.37 1,261.53 477.48 449.92 N/A N/A N/A N/A N/A N/A

Actual return on plan assets 109.97 79.03 43.18 22.47 N/A N/A N/A N/A N/A N/A

Actual Company contributions - - 28.32 30.82 154.78 156.96 3.72 3.15 5.19 4.63

Benefits paid (113.36) (113.19) (2.45) (25.73) (154.78) (156.96) (3.72) (3.15) (5.19) (4.63)

Plan assets at the end of year 1,223.98 1,227.37 5 4 6 . 5 3 4 7 7 . 4 8 - - - - - -



76

G r a t u i t y S u p e r a n n u a t i o n C o m p e n s a t e d P o s t - B K Ya b s e n c e s r e t i r e m e n t

M e d i c a r es c h e m e

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

v i Actuarial Assumptions

Discount Rate 8.50% 8.50% 6.75% 6.75% 8.50% 8.50% 8.50% 8.50% 8.5% 8.5%

Expected Return on plan assets 8.00% 8.00% 8.00% 8.00% N/A N/A N/A N/A N/A N/A

Salary escalation 2%-5% 3%-5% N/A N/A 2%-5% 3%-5% N/A N/A 2%-5% 3%-5%

Medical cost inflation N/A N/A N/A N/A N/A N/A 4.00% 4.00% N/A N/A

vii The major categories of plan assets aspercentage of total plan assets

Debt securities 99.73% 100% 99.16% 100% N/A N/A N/A N/A N/A N/A

Balances with banks 0.27% 0% 0.84% 0% N/A N/A N/A N/A N/A N/A

v i i i Effect of one percentage point change One percentage point One percentage pointin assumed Medical inflation rate increase in Medical decrease in Medical

inflation rate inflation rate

2010 2009 2010 2009

DBO as at 31 March 216.65 150.45 193.01 134.89

Service cost for the year 17.43 30.36 15.75 26.94

Interest cost for the year 12.63 20.24 11.31 15.48

d. Captial Commitments

The estimated amount of contracts remaining to be executed on capital account, and not provided for isRs. 378.36 lakhs as at March 31, 2010 (Year ended March 31, 2009 : Rs. 265.07 Lakhs).

e. Contingent LiablitiesAs at As at

March 31, 2010 March 31, 2009Rs. Lakhs Rs. Lakhs

a) Bills discounted 5,156.18 6,533.16b) Income Tax demands disputed in appeals 196.97 196.97c) Sales Tax demands disputed in appeals 53.01 53.01d) Service Tax demands disputed in appeals 100.91 -e) Corporate Guarantees issued to Bank in respect

of loan taken by subsidiary companies 23,250.14 -

f. Stock Opton Plan

Details of the Employee Stock Option Plan 2001 (TTESOP 2001) are mentioned below:

Number of options granted, Exercised and forfeited As at As atMarch 31, 2010 ‘March 31, 2009

Options granted, beginning of the year 268,377 358,803Granted during the year - -Exercised during the year (81,798) (75,126)Cashless options exercised during the year - (2,250)Forfeited during the year (5,776) (13,050)Option granted, end of year 180,803 268,377

g. Quantitative details(Values in Rs. Lakhs)

2009-2010 2008-2009OPENING PURCHASES OPENING PURCHASES

STOCK STOCK

Networking Items Value - 0.96 - -Qty - 1 - -

Software & Licenses Value - 3,084.70 - 5,025.54Qty - 1,284 - 827

Welding Fixtures Value - - - 37.50Qty - - - 1

TOTAL Value - 3,085.66 - 5,063.04Qty - 1,285 - 828

77

2009-2010 2008-2009SALES CLOSING SALES CLOSING

STOCK STOCKNetworking Items Value 1.45 - - -

Qty 1 - - -Software & Licenses Value 3,944.10 - 6,223.73 -

Qty 1,284 - 827 -Welding Fixtures Value - - 38.60 -

Qty - - 1 - TOTAL Value 3,945.55 - 6,262.33 -

Qty 1,285 - 828 -

h. Information as required under clause4(D), Part II, Schedule VI to the Companies Act, 1956.

2009-2010 2008-2009Rs. Lakhs Rs. Lakhs

(a) Earnings in foreign currencyServices 7,763.75 7,034.68Commission 47.13 128.93Interest 89.61 7,900.49 98.64

(b) CIF Value of imports 598.15 2,911.27

(‘c) Expenditure in foreign currency: 2,598.49Travel/Training Expenses 185.25 377.83Software Development services 1,974.73 1,528.26Interest 88.29 114.89Commission 252.29 256.18Other Expenses 97.94 58.87

i. Auditors Remuneration*

2009-2010 2008-2009Rs. Lakhs Rs. Lakhs

i) For services as auditors, including quarterly audits 25.00 20.00ii) For Tax Audit 3.00 3.00iii) For Other services 1.27 1.00iv) Reimbursement of out-of-pocket expenses 0.11 2.58

29.38 26.58

* Excluding service tax

j Managerial Remuneration

2009-2010 2008-2009Rs. Lakhs Rs. Lakhs

Managerial Remuneration for Director(excluding provision for encashable leave) 30.24 30.24The above is inclusive of(a) Estimated expenditure on perquisites - - -(b) Commission - -(c) Incentive Remuneration 20.16 20.16

Commission to Wholetime Director(a) Profit after Tax as per Profit & Loss Account 7,636.50 5,803.31(b) Add: Managerial Remuneration 30.24 30.24

Provision for Taxation - Current year 3,034.36 2,317.42- Earlier year - 33.74- Deferred 59.49 102.52- Fringe Benefit Tax - 105.00Depreciation as per Books 937.34 4,061.43 814.98

11,697.93 9,207.21(c) Less: Depreciation as per Section 350

of the Companies Act, 1956 937.34 814.98(d) Net Profit as per Section 309(5) 10,760.59 8,392.24(e) Commission to Wholetime Director - -



78

k. Obligations towards non-cancelable lease

2009-10 2008-09Obligations towards non-cancelable lease Rs. Lakhs Rs. Lakhs

Lease Obligations

Dues not later than one year 19.09 28.39

Dues later than one year but not later than five years 26.38 8.32

45.47 36.71

Later than five years - -

Lease payments recognised in the statement ofprofit and loss for the year 45.12 52.03

l. Derivative transactions

The Company uses forward exchange contracts to hedge its exposure in foreign currency. The informationon derivative instruments is as follows:

1. Derivative instruments outstanding as at March 31, 2010:Amount in Lakhs

Particulars As At Bought/sold Amount Amount

Forward Exchange March 31, 2010 Sold (GBP$/INR) GBP 13.56 INR 920.19contracts March 31, 2009 Sold (US$/INR) USD 25.83 INR 1,347.40

2. Foreign exchange currency exposures not covered by derivative instruments as at March 31, 2010.In Lakhs

As At March 31, 2010 As At March 31, 2009

Particulars Currency Amount in Equivalent Amount in EquivalentForeign amount Foreign amount in

Currency in INR Currency INR

Sundry Debtors EUR 4.63 280.37 4.47 307.90

CAD 0.01 0.53 0.00 0.00

GBP 7.73 524.51 7.71 571.55

JPY 0.00 0.00 0.00 0.00

SGD 0.04 1.29 0.04 1.37

THB 16.35 22.85 101.09 149.72

USD 51.10 2,301.09 34.25 1,786.96

Sundry Creditors EU R 0.03 1.90 0.60 41.45

GBP 0.44 30.06 0.30 22.37

KRW 0.00 0.00 30.93 1.16

SGD 0.15 4.77 0.12 4.10

THB 0.81 1.14 13.52 20.03

USD 56.04 2,523.67 10.25 534.65

Secured Loan USD 90.00 4,052.71 80.00 4,173.94

Loan to subsidiary USD 20.27 912.58 34.40 1,794.67

Deposits with Bank USD 0.00 0.00 0.97 50.35

KRW 0.00 0.00 200.00 7.51

Current account with Bank USD 39.48 1,777.71 0.51 26.60

KRW 0.00 0.00 2.48 0.09

79

m. Movement in Current Investments during the period

S r . N a m e o f t h e F u n d s / S c h e m e B a l a n c e a s o n S u b s c r i p t i o n d u r i n g R e d e m p t i o n s d u r i n g B a l a n c e a s o nN o . A p r 1 , 2 0 0 9 A p r 0 9 - M a r 1 0 A p r 0 8 - M a r 1 0 M a r 3 1 , 2 0 1 0

U n i t s Rate R s . i n l a k h s U n i t s Rate R s . i n l a k h s U n i t s Rate R s . i n l a k h s U n i t s Rate R s . i n l a k h s

1 B i r l a S u n L i f e C a s h M a n a g e r 4 , 9 9 9 , 2 5 1 1 0 . 0 0 5 0 0 . 0 8 4 , 0 0 0 , 5 5 2 1 0 . 0 0 4 0 0 . 1 8 8 , 9 9 9 , 8 0 3 1 0 . 0 0 9 0 0 . 2 5 - - -

2 T A T A - L i q u i d S u p e r H i g h I n v e s t m e n t F u n d 4 4 , 8 7 0 1 , 1 1 4 . 5 2 5 0 0 . 0 9 9 8 , 7 6 5 1 , 1 1 4 . 5 2 1 , 1 0 0 . 7 6 1 0 3 , 1 9 9 1 , 1 1 4 . 5 2 1 , 1 5 0 . 1 7 4 0 , 4 3 7 1 , 1 1 5 4 5 0 . 6 8

3 K o t a k L i q u i d ( I n s t i t u t i o n a l P r e m i u m ) 4 , 0 8 9 , 5 4 0 1 2 . 2 3 5 0 0 . 0 7 2 0 , 3 3 3 , 6 8 1 1 2 . 2 3 2 , 4 8 6 . 4 2 1 8 , 4 4 3 , 8 9 1 1 2 . 2 3 2 , 2 5 5 . 3 4 5 , 9 7 9 , 3 2 9 1 2 . 2 3 7 3 1 . 1 6

4 R e l i a n c e L i q u i d F u n d - D a i l y D i v i d e n d R e i n v e s t m e n t P l a n 4 , 9 9 9 , 2 2 9 1 0 . 0 0 5 0 0 . 0 8 1 8 , 4 9 8 , 1 6 9 1 0 . 0 0 1 , 8 5 0 . 3 9 2 3 , 4 9 7 , 3 9 8 1 0 . 0 0 2 , 3 5 0 . 4 7 - - -

5 L I C M F L i q u i d F i n d - D i v i d e n d P l a n 6 , 3 7 6 , 3 4 6 1 0 . 9 8 7 0 0 . 1 3 3 4 , 9 1 9 , 5 2 0 1 0 . 9 8 3 , 8 3 4 . 2 0 3 8 , 8 0 8 , 4 2 4 1 0 . 9 8 4 , 2 6 1 . 2 0 2 , 4 8 7 , 4 4 2 1 0 . 9 8 2 7 3 . 1 2

6 K o t a k F l o a t e r L o n g t e r m 1 , 9 8 4 , 8 2 1 1 0 . 0 8 2 0 0 . 0 7 1 , 9 8 4 , 8 2 1 1 0 . 0 8 2 0 0 . 0 7 - - -

7 H D F C L i q u i d F u n d ( P r e m i u m P l a n ) 6 , 9 3 4 , 4 7 0 1 2 . 2 6 8 5 0 . 1 5 6 , 9 3 4 , 4 7 0 1 2 . 2 6 8 5 0 . 1 5 - - -

8 B i r l a S u n L i f e C a s h P l u s - I n s t l . P l a n - D a i l y D i v i d e n d - R e i n v e s t m e n t 4 7 , 9 5 8 , 6 5 2 1 0 . 0 2 4 , 8 0 5 . 2 2 2 9 , 9 5 0 , 8 4 6 1 0 . 0 2 3 , 0 0 0 . 9 3 1 8 , 0 0 7 , 8 0 6 1 0 . 0 2 1 , 8 0 4 . 2 9

9 L I C M F S a v i n g s P l u s F u n d 2 8 , 9 9 7 , 4 1 7 1 0 . 0 0 2 , 8 9 9 . 7 4 2 8 , 9 9 7 , 4 1 7 1 0 . 0 0 2 , 8 9 9 . 7 4 - - -

10 B i r l a S u n L i f e S a v i n g s F u n d - I n s t l . - D a i l y D i v i d e n d - R e i n v e s t m e n t 1 9 , 0 3 2 , 2 3 6 1 0 . 0 1 1 , 9 0 4 . 5 2 1 9 , 0 3 2 , 2 3 6 1 0 . 0 1 1 , 9 0 4 . 5 2 - - -

11 R e l i a n c e L i q u i d F u n d - T r e a s u r y P l a n 1 0 , 6 3 5 , 6 0 7 1 5 . 2 9 1 , 6 2 5 . 8 9 1 0 , 6 3 5 , 6 0 7 1 5 . 2 9 1 , 6 2 5 . 8 9 - - -

12 R e l i a n c e M o n e y M a n a g e r F u n d - D a i l y D i v i d e n d P l a n 1 7 2 , 4 0 9 1 , 0 0 1 . 1 4 1 , 7 2 6 . 0 5 1 7 2 , 4 0 9 1 , 0 0 1 1 , 7 2 6 . 0 5 - - -

13 K o t a k F l e x i D e b t S c h e m e I n s t i t u t i o n a l - D a i l y D i v i d e n d 1 3 , 2 4 7 , 0 3 2 1 0 . 0 5 1 , 3 3 1 . 0 0 1 3 , 2 4 7 , 0 3 2 1 0 . 0 5 1 , 3 3 1 . 0 0 - - -

14 H D F C C a s h M a n a g e m e n t F u n d - S a v i n g s P l a n - D a i l y D i v i d e n d R e i n v e s t m e n t 3 1 , 7 8 1 , 9 4 9 1 0 . 6 4 3 , 3 8 0 . 4 6 2 3 , 7 8 8 , 0 2 6 1 0 . 6 4 2 , 5 3 0 . 1 9 7 , 9 9 3 , 9 2 2 1 0 . 6 4 8 5 0 . 2 7

15 H D F C F l o a t i n g R a t e I n c o m e F u n d - S h o r t T e r m P l a n 2 2 , 4 1 1 , 0 6 8 1 0 . 0 8 2 , 2 5 9 . 2 4 2 1 , 4 1 9 , 0 9 3 1 0 . 0 8 2 , 1 5 9 . 2 4 9 9 1 , 9 7 5 1 0 . 0 8 1 0 0 . 0 0

16 T A T A F l o a t e r F u n d - D a i l y D i v i d e n d 1 , 5 0 0 , 0 2 1 1 0 . 0 4 1 5 0 . 5 4 1 , 5 0 0 , 0 2 1 1 0 . 0 4 1 5 0 . 5 4 - - -

17 B i r l a S u n L i f e S h o r t T e r m F u n d - I n s t i t u t i o n a l D a i l y D i v i d e n d 2 , 0 0 0 , 7 2 5 1 0 . 0 1 2 0 0 . 1 8 2 , 0 0 0 , 7 2 5 1 0 . 0 1 2 0 0 . 1 8

Total 20,509,236 2,700.44 2 6 4 , 5 0 7 , 0 9 4 3 1 , 0 0 4 . 9 8 2 4 7 , 5 1 4 , 6 9 6 2 9 , 2 9 5 . 7 3 3 7 ,501,635 4,409.70

n. Considering the financial position and business strategies, management has liquidated INCAT KK, Japaneffective July 31, 2009. Accordingly, consequential adjustments have been made in the books of accounts.

o. During the year, the Company has revised its policy of providing for doubtful debts from a specificidentification method. Currently provision for doubtful debts is created as a percentage of the outstandingdebts based on ageing. The impact of this change was an additional provision of Rs.158.31 lakhs, which inaccordance with the approval of the High Court as explained in Note 3.q of this Schedule, has been debitedto the securities premium account.

p. During the year, the Company implemented Employee Separation Scheme and the amount payable underthe Scheme amounting to Rs. 627.55 lakhs has been debited the Securities Premium Account as per the Courtapproval.

q. The Shareholders of the Company at the Extra-Ordinary General Meeting held on March 5, 2010 approvedand the High Court of Judicature at Mumbai vide its order dated April 16, 2010 have confirmed the utilisationof Securities Premium Account in accordance with the provisions of Section 78 read with Section 100 to 103of the Companies Act, 1956, towards adjustment of the following:

Rs. Lakhs

Company Subsidiaries Total

Employee Severance Cost 627.55 1,089.64 1,717.19

Consultancy Cost for implementation of a 945.58 187.06 1,132.64Business Restructuring programme

Additional provision for Doubtful Debts arising from a 158.31 1,657.63 1,815.94revision in the policy for providing for doubtful debts

Total 1,731.44 2,934.33 4,665.77

The amounts relating to the Company have been adjusted to the Securities Premium Account. An amountequivalent to the total amount of adjustment relating to the subsidiaries has been identified and segregatedfrom the balance in the Securities Premium Account for adjustment on consolidation.



80

r. Segment Reporting

Primary Segment

Segment reporting is made on the basis of the geographical location of the customer

USA India Rest of Totalthe World Rs. Lakhs

Revenues 3,666.88 30,513.20 4,107.97 38,288.054,204.80 30,218.17 2,826.67 37,249.64

Identifiable operating expenses 3,305.50 18,017.06 2,715.25 24,037.813,717.49 19,261.65 2,303.76 25,282.90

Allocated expenses 113.18 692.07 126.80 932.056.48 517.57 4.35 528.40

Segmental operating Income 248.20 11,804.07 1,265.92 13,318.19480.83 10,438.95 518.56 11,438.34

Unallocable expenses 3,480.123,715.22

Other Income 892.29638.87

Net profit before taxes 10,730.368,361.99

Taxes 3,093.862,558.68

Net profit after taxes 7,636.505,803.31

Fixed assets used in the Company’s business or liabilities contracted have not been identified to any of thereported segments, as fixed assets and services are used interchangeably between reported segments.

Secondary Segment

The complete operations of the Company have been treated as a single segment “Information technologyservices”.

Previous year figures have been shown in italics.

s. Dues to micro, small and medium scale enterprises

Based on the information available with the Company, none of the vendors fall under the definition ofmicro, small and medium scale enterprises. This information is not verifiable by the auditors.

t. Related Party Disclosures for the year ended March 31, 2010

a) Related party and their relationship

1 Parent Company Tata Motors Ltd

2 Subsidiary Tata Technologies Pte Ltd, Singapore

3 Indirect Subsidiaries 1 Tata Technologies (Thailand) Ltd2 INCAT International Plc3 Tata Technologies Europe Ltd4 INCAT SAS5 INCAT GmbH6 INCAT Holdings BV (Liquidated w.e.f.

April 11, 2009)7 INCAT KK (Liquidated w.e.f. July 31, 2009)8 Tata Technologies Inc (Name changed from

INCAT Systems Inc. w.e.f. April 1, 2009)9 Tata Technologies de Mexico, S.A. de C.V. (Name

changed from Integrated Systems de Mexico,S.A. de C.V. w.e.f. April 1, 2009)

10 Tata Technologies (Canada) Inc (Name changedfrom INCAT Solutions of Canada Inc w.e.f. April1, 2009)

11 Lemmerpoort BV

81

4 Fellow subsidiaries 1 TAL Manufacturing Solutions Ltd2 HV Axles Ltd3 HV Transmission Ltd4 Sheba Properties Ltd5 Concorde Motors (India) Ltd6 Telco Construction Equipment Co. Ltd7 Tata Daewoo Commercial Vehicle Co. Ltd8 Tata Motors Insurance Broking & Advisory

Services Ltd9 Tata Motors European Technical Centre Plc10 Tata Motors Finance Ltd11 Tata Marcopolo Motors Ltd12 Tata Motors (Thailand) Ltd13 TML Holdings Pte Ltd, Singapore14 TML Distribution Company Ltd15 Hispano Carrocera S.A. (w.e.f. October 16, 2009)16 Tata Motors (SA) (Proprietory) Ltd17 Miljobil Grenland AS18 Miljobil Innovasjan AS (Merged with Miljobil

Grenland AS w.e.f. October 12, 2009)19 Serviplem S.A20 Comoplesa Lebrero S.A21 Baryval Assistencia Tecnica S.L22 Inner Mongolia North Baryval Engineering

Special Vehicle Corporation Ltd23 JaguarLandRover Ltd24 Jaguar Cars Ltd25 Jaguar Cars Overseas Holdings Ltd26 Jaguar Land Rover Austria GmbH27 Jaguar Belux NV28 Jaguar Land Rover Japan Ltd29 Jaguar cars South Africa (pty) Ltd30 Jaguar Italia SPA31 Jaguar Cars Exports Ltd32 The Daimler Motor Company Ltd33 The Jaguar Collection Ltd34 Daimler Transport Vehicles Ltd35 SS Cars Ltd

36 The Lanchester Motors Company Ltd37 Jaguar Hispania Sociedad38 Jaguar Deutschland GmbH39 Land Rover UK40 Land Rover Group Ltd41 Jaguar Land Rover North America LLC42 Land Rover Belux S.A./N.V43 Land Rover Ireland Ltd44 Jaguar Land Rover Nederland BV (Name

changed from Land Rover Nederland BV w.e.f.June 10, 2009)

45 Jaguar Land Rover Portugal - Veiculos e PecasLDA

46 Jaguar Land Rover Australia Pty Ltd47 Land Rover Exports Ltd48 Land Rover Italia SpA49 Land Rover Espana SL50 Land Rover Deutschland GmbH51 Jaguar & Land Rover Asia Pacific Company Ltd

(Liquidated w.e.f. October 12, 2009)52 Jaguar Land Rover Mexico SA de CV53 Jaguar Land Rover Korea Company Ltd



82

54 Jaguar Land Rover Automotive Trading(Shanghai) Company Ltd

55 Jaguar Land Rover Canada ULC56 Jaguar Land Rover France, SAS57 Jaguar Land Rover (South Africa) (Pty) Ltd58 Jaguar Land Rover Brazil LLC (incorporated on

01.04.2009)59 Limited Liability Company "Jaguar Land Rover"

(Russia) (incorporated on 01.04.2009)60 Land Rover Parts Ltd (incorporated on

02.04.2009)61 Land Rover Parts US LLC (incorporated on

19.06.2009)62 Carrosseries Hispano Maghreb, Morocco

5 Joint Venture Tata HAL Technologies Ltd

6 Associates of Parent Company 1 Tata Cummins Ltd2 Tata Precision Industries Pte Ltd3 Fiat India Automobiles Ltd4 Automobile Corporation of Goa Ltd5 Nita Co Ltd6 Tata AutoComp Systems Ltd7 Telcon Ecoroad Resurfaces Pvt Ltd

7 Key Management Personnel Mr. P. R. McGoldrick

b) Transactions with related parties (Rs. In Lakhs)

P a r t i c u l a r s P a r e n t F e l l o w S u b s i d i a r i e s J o i n t A s s o c i a t e s K e yC o m p a n y s u b s i d i a r i e s Ve n t u r e o f P a r e n t M a n a g e m e n t

c o m p a n y P e r s o n n e l

P u r c h a s e o f g o o d s - - - - - -- - - - ( 0 . 7 5 ) -

Sale of goods( inclus ive of 1 ,194.28 9 4 . 4 0 8 . 5 4 1 7 . 9 8 5 2 . 2 0 -s a l e s t a x ) ( 2 , 7 8 4 . 0 1 ) ( 1 7 0 . 6 7 ) - ( 2 6 . 3 6 ) ( 1 7 1 . 8 0 ) -

Services received - - 5 1 1 . 8 7 7 . 7 2 1 . 4 5 3 0 . 2 4- - ( 1 , 8 2 0 . 7 1 ) ( 1 0 . 3 6 ) - ( 3 0 . 2 4 )

S e r v i c e s r e n d e r e d 2 1 , 0 0 5 . 4 0 1 ,816 .87 6 ,870 .04 - 143.07 -( 1 8 , 7 6 6 . 3 2 ) ( 1 , 7 4 5 . 9 7 ) ( 5 , 7 9 0 . 9 3 ) - ( 2 8 0 . 3 5 ) -

F i n a n c e g i v e n ( i n c l u d i n g 2 2 , 9 0 0 . 0 0 - - - - -loans, equity & ICD) ( 2 5 , 7 5 0 . 0 0 ) - - ( 1 4 5 . 0 0 ) - -

F i n a n c e t a k e n ( i n c l u d i n g 2 1 , 6 0 0 . 0 0 - - - - -loans ,equity & ICD) ( 2 5 , 3 5 5 . 0 0 ) - - - - -

I n t e r e s t / D i v i d e n d p a i d / 2 4 . 6 2 - - 9 0 . 3 3 - - -( r e c e i v e d ) ( n e t ) ( 1 , 1 7 6 . 1 8 ) ( 0 . 0 1 ) ( - 9 5 . 8 1 ) - - ( 3 9 . 2 0 )

A m o u n t r e c e i v a b l e 1 , 0 0 9 . 1 8 2 4 6 . 0 0 3 , 7 4 0 . 6 3 1 8 . 1 3 7 0 . 2 1 -( 9 4 8 . 2 5 ) ( 6 3 2 . 0 4 ) ( 3 , 7 2 1 . 4 8 ) ( 8 7 . 9 3 ) ( 1 2 0 . 2 8 ) -

A m o u n t p a y a b l e 1 5 . 9 4 - 3 9 1 . 4 8 4 . 1 0 - 2 0 . 1 6( 3 7 . 9 8 ) - ( 2 2 5 . 2 9 ) ( 9 . 2 1 ) - ( 2 0 . 1 6 )

Amount receivable (in respect 5 , 5 0 0 . 0 0 - 9 1 2 . 5 8 2 7 3 . 5 0 - -of loans, Equity & ICD) ( 4 , 2 0 0 . 0 0 ) - ( 1 , 7 9 4 . 6 7 ) ( 1 4 5 . 0 0 ) - -

Amount payable (in respect - 0 . 0 1 - - - -of loans, Equity & ICD) - ( 0 . 0 1 ) ( 1 . 7 7 ) - - -

* Previous year’s figures are shown in the brackets

u. The previous year’s figure have been recast/restated wherever necessary, to confirm to the currentyear’s classification

83

Balance Sheet Abstract and Company’s General Business Profile :

I) Registration Details :

Registration No. U72200PN1994PLC013313

Balance Sheet Date 31.03.2010

II) Capital Raised during the Year (Amount in Rs. Thousands)

Public Issue Nil

Rights Issue Nil

Bonus Issue Nil

Private Placement (Employee Stock Option Plan) 865

III) Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabiliites 5,461,969

Total Assets 5,461,969

Sources of Funds :

Paid-up Capital 372,446

Advance towards Share Capital -

Reserves & Surplus 3,566,178

Secured Loans 3,985

Application of Funds :

Net Fixed Assets 692,701

Investments 2,657,396

Net Current Assets 1,014,169

Misc. Expenditure -

Deferred Tax Asset/(Liability) (16,386)

IV) Performance of Company (Amount in Rs. Thousands)

Turnover 3,918,034

Total Expenditure (2,844,999)

Profit/(Loss) Before Tax 1,073,035

Profit/(Loss) After Tax 763,650

Earning Per Share - Basic (Rs.) 20.54

Dividend Rate 70%

V) Generic Names of Three Principal Products/Services of Company (as per monetary terms)

Item Code No. (ITC Code) Nil

Product Description Information Technology Consultancy

Item Code No. (ITC Code) Nil

Product Description Trading in Computer Hardware/Software

Additional Information as required under Part IVof Schedule VI to the Companies Act, 1956

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

85

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF TATA TECHNOLOGIES LIMITED

1. We have audited the attached Consolidated Balance Sheet of Tata Technologies Limited (“theCompany”), its subsidiaries and jointly controlled entity (the Company its subsidiaries and jointlycontrolled entities constitute “the Group”) as at March 31, 2010 and the Consolidated Profit and LossAccount and the Consolidated Cash Flow Statement of the Group for the year ended on that date,both annexed thereto. The Consolidated Financial Statements includes investments in jointly controlledentities accounted in accordance with Accounting Standard 27 (Financial Reporting of Interests in JointVentures) as notified under the Companies (Accounting Standards) Rules, 2006. These financialstatements are the responsibility of the Company’s management and have been prepared on the basisof the separate financial statements and other financial information regarding components. Ourresponsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standard generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatements. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by the Management, as wellas evaluating the overall financial statements presentation. We believe that our audit provides areasonable basis for our opinion.

3. We did not audit the financial statements of certain subsidiaries, whose financial statements reflecttotal assets of Rs. 74,749 lakhs as at March 31, 2010, total revenues of Rs. 39,450 lakhs and net cashinflows amounting to Rs.2,833 lakhs for the year ended on that date as considered in the ConsolidatedFinancial Statements. These financial statements have been audited by other auditors whose reportshave been furnished to us and our opinion, in so far it relates to amounts included in respect of thesesubsidiaries, is based solely on the reports of other auditors.

4. We report that the Consolidated Financial Statements have been prepared by the Company inaccordance with the requirements of Accounting Standard 21(Consolidated Financial Statements) andAccounting Standard 27 (Financial Reporting of Interest in Joint Ventures) as notified under theCompanies (Accounting Standard) Rules 2006.

5. Based on our audit and on consideration of the separate audit reports on individual financial statementsof the Company, its aforesaid subsidiaries and to the best of our information and according to theexplanations given to us, in our opinion, the Consolidated Financial Statements give a true and fairview 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 31,2010;

ii) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the yearended on that date; and

iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the yearended on that date.



Hemant JoshiPlace: PUNE PartnerDate: 12th May 2010 Membership No: 38019



86

in Rs lakhs.


SOURCES OF FUNDS

SHAREHOLDERS’ FUNDSShare Capital 1 3,724.46 3,715.81

Advance towards Share Capital - 2.04

Reserves and Surplus 2 30,996.36 30,471.21

34,720.82 34,189.06

LOAN FUNDS

Secured Loans 3 2,517.67 6,859.38

Unsecured Loans 4 27,316.71 26,095.90

29,834.38 32,955.28

DEFERRED TAX LIABILITY 163.86 104.37

[Note 13.6.c Schedule ‘13’]

TOTAL FUNDS EMPLOYED 64,719.06 67,248.71

APPLICATION OF FUNDSGOODWILL [Note 13.6.f Schedule ‘13’] 32,887.66 36,303.14

FIXED ASSETS

Gross Block 5 18,029.32 16,279.46

Less: Depreciation and amortisation 10,627.21 10,332.10

Net Block 7,402.11 5,947.36

Capital Work in Progress & Advance Payments 62.17 88.91

7,464.28 6,036.27

INVESTMENTS 6 4,409.70 2,700.44

DEFERRED TAX ASSET [Note 13.6.c Schedule ‘13’] 890.92 906.32

CURRENT ASSETS, LOANS AND ADVANCES

Inventories 534.11 187.24

Sundry Debtors 7 22,303.60 28,299.16

Cash and Bank Balances 8 9,396.82 5,401.82

Other Current Assets 9 6.23 2.97

Loans and Advances 10 12,971.14 10,984.95

45,211.90 44,876.14

Less: CURRENT LIABILITIES AND PROVISIONS

Liabilities 11 22,091.28 21,635.25

Provisions 12 4,054.12 1,938.35

26,145.40 23,573.60

NET CURRENT ASSETS 19,066.50 21,302.54

TOTAL FUNDS APPLIED 64,719.06 67,248.71


Consolidated Balance Sheet as at March 31, 2010

The Schedules referred to above and the notes thereon form an integral part of the Balance Sheet.

This is the Balance Sheet referred to in our report.

Samrat Gupta






Hemant JoshiPartner






P P Kadle Director



87

in Rs lakhs.

Year ended Year ended


INCOME

Income from Services A 78,681.38 87,503.80

Sale of Products B 28,357.26 32,739.87

Other Income C 2,758.25 3,875.26

109,796.89 124,118.93

EXPENDITURE

Cost of Traded Items & Services D 18,806.46 23,565.90

AMC Charges E 330.21 194.14

Consultancy fees, Softwares and others F 17,881.59 21,006.81

Payroll and Related Expenses G 48,652.29 56,835.18

Communication Expenses H 1,001.32 742.47

Administration & Marketing Expenses I 7,525.72 9,587.59

Finance Charges J 1,205.23 1,221.38

Depreciation and amortisation 5 1,467.62 1,479.05

Bad Debts written off 164.30 19.05

Provision for Bad and Doubtful debts 37.79 178.30

97,072.53 114,829.87

PROFIT FOR THE PERIOD BEFORE EXCEPTIONAL ITEMS AND TAX 12,724.36 9,289.06

(Gain)/loss on liquidation of subsidiaries (Net) 127.63 -

PROFIT / (LOSS) BEFORE TAX 12,596.73 9,289.06


- Current Tax 3,547.37 2,914.67

- Earlier year - 22.20

- Deferred Tax charge/(credit) (50.60) (339.61)

- Fringe Benefit Tax - 105.25

PROFIT / (LOSS) AFTER TAX 9,099.96 6,586.55

Balance Brought forward from Previous Year 6,675.09 2,861.13

PROFIT AVAILABLE FOR APPROPRIATIONS 15,775.05 9,447.68

APPROPRIATIONSDividend

- Interim Dividend - 1,114.19

- Final Dividend 2,603.12 742.79

Tax on dividend 432.34 315.59

Transfer to General Reserve 800.00 600.00

Balance carried to Balance Sheet 11,939.59 6,675.11

15,775.05 9,447.68

E.P.S (Equity Shares, par Value Rs. 10 each) [note 13.6.e, Schedule ‘13’]

- Basic (in Rs.) 24.47 17.73

- Diluted (in Rs.) 24.33 17.59


Consolidated Profit and Loss Account for the year ended March 31, 2010

The Schedules referred to above and the notes thereon form an integral part of the Profit & Loss Account.

This is the Profit & Loss Account referred to in our report.

Samrat Gupta






Hemant JoshiPartner






P P Kadle Director





88

in Rs lakhs.


CASH FLOW FROM OPERATING ACTIVITIESNet Profit after Taxation and Extraordinary Items 9,099.96 6,586.55

Depreciation 1,467.62 1,479.05

Provision for Wealth Taxes 0.98 3.04

Provision for Income Tax 3,547.37 2,936.87

Provision for Deferred Tax (50.60) (339.61)

Provision for Fringe Benefit Tax - 105.25

(Profit) / Loss on Sale of Fixed Assets 1.34 7.97

Interest Paid 1,205.22 1,221.38

Exchange differences 526.06 (255.29)

Provision for Doubtful Debts (1,815.93) -

Operating profit before Working Capital Changes 13,982.02 11,745.21

Adjustments for :Income Accrued (8.41) 1.32

Inventories (371.05) 88.88

Debtors 2,100.58 (757.82)

Loans & Advances to Employees 32.75 (63.42)

Bills of Exchange 452.69 (452.69)

Advance to Supplier, Contractors & Others (666.83) (192.32)

Deposits with Govt. Bodies & Others (5.11) (5.70)

Prepaid Expenses (1,345.14) (268.13)

Sundry Creditors 1,690.18 (1,205.09)

Advance & Progress Payments 6.23 (22.04)

Provision for Staff Welfare Expenses (139.33) (115.60)

Provision for Waranty (3.03) (2.07)

Unearned Income (348.20) 878.46

Advance Tax / Tax Deducted at Source (3,854.26) (4,115.72)

NET CASH FLOW (USED IN)/GENERATED FROM OPERATING ACTIVITIES 11,523.09 5,513.27

CASH FLOW FROM INVESTING ACTIVITIESProceeds from sale of Fixed Assets 19.51 26.86

Payment for Purchase of Fixed Assets (2,968.89) (1,536.74)

Investment in Mututal Fund (made)/sold (net) (1,709.26) (2,700.44)

NET CASH FLOW (USED IN)/GENERATED FROM INVESTING ACTIVITIES (4,658.64) (4,210.32)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from issue of shares including Premium 31.12 34.53

Interest Paid (1,205.22) (1,221.38)

Dividends Paid (including Dividend Tax) (975.86) (2,863.62)

Inter Corporate Deposits (Net) (1,300.00) (395.00)

Proceeds from Short Term borrowings (26,217.13) -

Proceeds from Cash Credit arrangement 225.26 890.53

Proceeds from Long Term borrowings 24,898.49 4,200.13

Repayment of Long Term borrowings (56.26) (156.11)

NET CASH FLOW (USED IN)/GENERATED FROM FINANCING ACTIVITIES (4,599.60) 489.08

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS 2,264.85 1,792.03

Cash & Cash equivalents at the beginning of the period/year 5,401.83 3,933.74

Add: Translation adjustment on Cash & Bank balances of foreign subsidiaries (545.90) 379.91

Add: Translation adjustment on reserves of foreign subsidiaries 2,276.04 (703.85)

Cash & Cash equivalents at the end of the period 9,396.82 5,401.83

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS 2,264.85 1,792.03

Consolidated Cash Flow Statement

Samrat Gupta






Hemant JoshiPartner






P P Kadle Director



89

in Rs lakhs.

SCHEDULE - A


INCOME FROM SERVICES

Income from Services 78,681.38 87,503.80

78,681.38 87,503.80

SCHEDULE - B


SALE OF PRODUCTS

Traded Products 27,371.23 31,449.26

Own Products 986.03 1,290.61

28,357.26 32,739.87

SCHEDULE - C


OTHER INCOME

Interest Income * 617.53 504.81

Commission Income 1,641.81 2,592.98




Excess provision written back - 83.72

2,758.25 3,875.26

*Tax deducted at source on interest is Rs.85.77 Lakhs (Rs.85.93 Lakhs in 2008-09)

SCHEDULE - D


COST OF TRADED GOODS & SERVICES

Purchase of Products/Services for Sale

Purchase of Products/Services 19,153.33 23,536.16

19,153.33 23,536.16

Change in Stock in Trade

Opening Stock 187.24 216.98

Less : Closing Stock 534.11 187.24

(346.87) 29.74

18,806.46 23,565.90

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT



90

in Rs lakhs.

SCHEDULE - E


AMC CHARGES

AMC Charges on SAP End User Licenses 22.03 19.15

AMC Charges (Others) 308.18 174.99

330.21 194.14

SCHEDULE - F


CONSULTANCY FEES, SOFTWARES & OTHERS

Outsourcing Charges 16,168.97 19,540.11

Software-internal use 384.39 176.94

Consultancy Fees 700.63 482.40

Professional Fees 434.29 571.70

Training Costs 193.31 225.79

Subscription Costs - 9.87

17,881.59 21,006.81

SCHEDULE - G


PAYROLL & RELATED EXPENSES

Salaries and Allowances 47,020.98 55,249.57

Superannuation 282.20 330.83

Provident Fund 586.79 579.69

Staff welfare Expenses 652.51 642.72

Gratuity 109.81 32.37

48,652.29 56,835.18

SCHEDULE - H


COMMUNICATION EXPENSES

Telephone Expenses / Fax Charges 727.98 599.98

ISDN Charges 273.34 142.49

1,001.32 742.47


91

in Rs lakhs.

SCHEDULE - I


ADMINISTRATION & MARKETING EXPENSES

Expenses for Administration / Marketing

Repairs & Maintenance

- Buildings 186.50 22.82

- Plant & Machinery 21.72 127.54

- Others 143.04 241.88

Rent 1,257.60 1,332.64

Rates and Taxes 91.56 62.51

Provision for Wealth Tax 0.98 0.56

Insurance 217.68 181.53

Overseas Marketing Expenses 260.12 342.45

Advertisement and Publicity 1.16 134.27

Business Promotion Expenses 43.27 44.25

Office Expenses 510.57 729.97

Travelling & Conveyance 2,983.09 3,917.20

Power & Fuel 313.55 264.86

Water Charges 19.86 21.20

Auditors Remuneration 154.27 173.25

Staff Training and Seminar Expenses 81.74 187.14

Staff Recruitment Expenses 138.49 254.45

Commision to Others 18.48 2.99

Foreign Currency (Gain)/Loss - (Net) 452.66 186.21

Other Expenses 629.38 1,359.87

7,525.72 9,587.59

SCHEDULE - J


FINANCE CHARGES

Interest on Cash Credit 902.52 170.81

Interest on Packing Credit Loan 158.66 356.48

Interest on Term Loan 131.79 680.78

Interest on Vehicles under Finance Lease/Loans 8.04 10.51

Interest Expense - Others 4.21 2.80

1,205.22 1,221.38




92

in Rs lakhs.


SHARE CAPITAL

Authorised :

60,000,000 ordinary shares of Rs. 10/- each 6,000.00 5,000.00(P.Y. 50,000,000 equity shares of Rs. 10/- each)

700,000 0.01% Cumulative Non-participative Compulsorilyconvertible Preference Share of Rs. 10/- each 70.00 -

(P.Y. Nil) 6,070.00 5,000.00

Issued, Subscribed and Paid-up :

37,244,591 equity shares of Rs. 10/- each (P.Y. 37,158,104 equity 3,724.46 3,715.81shares of Rs. 10/- each)

3,724.46 3,715.81

Note:

Of the above shares, 2,000,000 shares were allotted to Tata Motors Ltd. as fully paid pursuant to a contract, withoutpayments being received in cash.

30,300,600 equity shares are held by Tata Motors Limited, the holding company (P.Y. 30,300,600 equity shares)


RESERVES AND SURPLUS

Capital Reserve [note 13.6.f Schedule ‘13’] 65.49 98.93

Securities Premium



Adjustments during the year * (4,665.76) -

* Refer Note no 13.6.j of Schedule ‘13’


General Reserves

As at the beginning of the period 1,683.08 1,083.08

Additions during the period 800.00 600.00


Profit & Loss Account 11,939.59 6,675.09

Translation Reserve (4,388.48) (3,523.81)

30,996.36 30,471.21

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

93

in Rs lakhs.

SCHEDULE - 3

As at As atMar 31, 2010 Mar 31, 2009

SECURED LOANS

From Bank on Cash Credit Account 2,477.82 2,609.59

[Secured by hypothecation of book debts/accounts receivableand movable fixed assets(excluding certain vehicles)]

Foreign Currency Loan from Banks - 4,173.94

[Secured by hypothecation of book debts]

Vehicle Loan 39.85 75.85

[Secured by hypothecation of vehicles financed]

2,517.67 6,859.38

SCHEDULE - 4

As at As atMar 31, 2010 Mar 31, 2009

UNSECURED LOANS

Foreign Currency Loan from Banks 27,316.71 26,095.90

27,316.71 26,095.90


in Rs lakhs.

SCHEDULE - 5

FIXED ASSETS

GROSS BLOCK DEPRECIATION BLOCK NET BLOCK

As at Additions Deductions Exchange As at As at For the Deductions Exchange As at As at As atMar 31, Difference Mar 31, Mar 31, year Difference Mar 31, Mar 31, Mar 31,

2009 2010 2009 Mar 31, 2010 2010 2010 2009

FIXED ASSETS

Leasehold Land 409.35 - - - 409.35 36.19 4.31 - - 40.50 368.85 373.16

Buildings 2,208.66 9.46 - - 2,218.12 379.56 92.39 - - 471.95 1,746.17 1,829.10

Plant & Machinery@ 8,424.66 327.20 357.35 (397.53) 7,996.98 6,213.43 671.79 348.07 (379.65) 6,157.50 1,839.48 2,211.23

Furniture & Fixtures@ 1,780.94 117.22 111.34 (133.60) 1,653.22 1,103.54 162.98 111.27 (57.33) 1,097.92 555.30 677.40

Vehicles ** 305.94 68.21 67.80 (5.20) 301.15 199.93 62.63 56.31 (4.61) 201.64 99.51 106.01

Software Licenses @ 3,141.84 2,509.98 - (208.60) 5,443.22 2,398.76 473.14 - (215.22) 2,656.68 2,786.54 743.08

Copyrights 8.08 - - (0.80) 7.28 0.68 0.38 - (0.04) 1.02 6.26 7.40

Total 16,279.47 3,032.07 536.49 (745.73) 18,029.32 10,332.09 1,467.62 515.65 (656.85) 10,627.21 7,402.11 5,947.38

Previous year 14,378.53 1,470.91 441.40 871.42 16,279.46 8,494.95 1,479.04 406.55 764.66 10,332.10 5,947.36 5,883.58

Capital Work in Progress * 62.17 88.91

Notes:

* Capital Work in Progress includes capital advance payments of Rs.14.22 Lakhs (as at 31st March 2009 Rs.14.25 Lakhs)

** Vehicles includes Rs.158.41 Lakhs acquired on loan, hypothecated with Tata Finance Ltd & ICICI Bank Ltd. (as at 31stMarch 2009 Rs.156.88 Lakhs)

@ Movable Fixed Assets other than vehicles are hypothecated against Cash Credit facilities outstanding with CorporationBank.



94


in Rs lakhs.

SCHEDULE - 6

As at As atMar 31, 2010 Mar 31, 2009

INVESTMENTS

TRADE (UNQUOTED) - at cost

(a) Long-term investments

i) Investment in Subsidiary Companies

Lemmerport BV(formerly known as INCAT Engineering Solutions BV) 10.91 12.41

a 100% subsidiary company of INCAT Holdings BV

10.91 12.41

Less: Provision for diminution in value of investment (10.91) (12.41)

- -

(b) Current Investments (At Cost or Fair value whichever is lower)

Investments in Mutual Funds (Unquoted)

HDFC Floating rate Income Fund - series 2035 - Units 991,974.923 value 100.00 -Rs 10.0809 each(NAV as on 31.03.2010 Rs. 10.0809 per unit (P.Y.Nil))

HDFC 3006 Cash Management Fund - Units 7,993,922.228 value 850.27 -Rs. 10.6364 each(NAV as on 31.03.2010 Rs. 10.6364 per unit (P.Y.Nil))

Birla Sunlife Cashplus Savings Fund - series B503DD - Units 18,007,805.578 1,804.29 -value Rs. 10.0195 each(NAV as on 31.03.2010 Rs. 10.0195 unit (P.Y.Nil))

Birla Sunlife Short Term Fund - series B85DD - Units 2,000,724.502 value 200.18 -Rs. 10.0055 each(NAV as on 31.03.2010 Rs. 10.0055 per unit (P.Y.Nil))

Birla series B47 - Nil (P.Y.Units 4,999,251 value Rs. 10.0030 each. - 500.08(NAV as on 31.03.2009 Rs. 10.0030 per unit )

TATA - Liquid Super High Investment Fund- Scheme TLSD01- 450.68 500.09Units 40436.807 value Rs.1114.52 each.(NAV as on 31.03.2010 Rs. 1114.52 per unit (P.Y.Units 44870.191value Rs. 1114.52 each. (NAV as on 31.03.2009 Rs. 1114.52 per unit )

Kotak Liquid (Institutional Premium) - Unit 5,979,328.9810 value 731.16 500.07Rs. 12.2281 each (NAV as on 31.03.2010 Rs. 12.2281 per unit)(P.Y. Units 4,089,539.89 value Rs. 12.2281 each. (NAV as on 31.03.2009Rs. 12.2281 per unit )

Reliance Liquidity Fund-Daily dividend Reinvestment option - Nil - 500.08


LIC Liquid Find - dividend Plan - Unit 2,487,441.877 value Rs. 10.9801 each 273.12 700.13(NAV as on 31.03.2010 Rs. 10.9801 per unit)

(P.Y. Units 6,376,346.007 value Rs. 10.9801 each. (NAV as on 31.03.2009Rs. 10.9801 per unit )(Refer Note no. 3.g of Schedule ‘13’ )

4,409.70 2,700.45

4,409.70 2,700.45

95


in Rs lakhs.

SCHEDULE - 7

As at As atMar 31, 2010 Mar 31, 2009

SUNDRY DEBTORS

(a) Over six months old (unsecured)

Considered good 431.89 2,938.30

Considered doubtful 2,086.93 443.76

(b) Others (unsecured)

(c) Others (unsecured)Considered good* 21,871.71 25,360.86

24,390.53 28,742.92

Less : Provision for doubtful debts 2,086.93 443.76

22,303.60 28,299.16

* Debtors include unbilled revenue of Rs. 1,001.85 Lakhs [Rs.1,693.04 Lakhs as at Mar31, 2009]

SCHEDULE - 8

As at As atMar 31, 2010 Mar 31, 2009

CASH & BANK BALANCES

Cash on hand 3.53 17.90Cheques on Hand 297.08 1,101.46Balances with Scheduled Banks:

in Current Accounts 2,441.12 1,256.57in Deposit Accounts* 2,792.14 144.68

Balances with Non-Scheduled Banksin Current Accounts 3,798.46 2,726.91in Deposit Accounts 64.49 154.30

9,396.82 5,401.82Note:

* Pledged/lien with the Bankers for obtaining Bank Guarantees/LCs/LUTs - Rs.2,188.16 Lakhs[Rs.20.03 Lakhs as at Mar31, 2009]

SCHEDULE - 9

As at As atMar 31, 2010 Mar 31, 2009

OTHER CURRENT ASSETSIncome accruedInterest Accrued on Deposits 6.23 2.97

6.23 2.97

SCHEDULE - 10

As at As atMar 31, 2010 Mar 31, 2009

LOANS & ADVANCES(Unsecured - considered good)

Loans & Advances to Employees * 710.20 889.06Less: Provision for Doubtful Loans & Advances to Employees (4.13) (4.13)Bills of Exchange - 452.69Advances to Suppliers, Contractors & Others 1,591.26 954.09Inter-corporate deposits:Tata Motors Ltd. (Holding Company) 5,500.00 4,200.00Deposits With Government, Public Bodies and Others 200.45 202.83Prepaid Expenses 1,712.03 1,468.74Advance Payments against Taxes 3,261.33 2,821.67

12,971.14 10,984.95

Note:

* Includes considered doubtful’ - Rs. 4.13 Lakhs[Rs.4.13 Lakhs as at Mar 31, 2009]



96


in Rs lakhs.

SCHEDULE - 11

As at As atMar 31, 2010 Mar 31, 2009

CURRENT LIABILITIES

Sundry Creditors - Dues to other than Micro, Medium and Small Enterprises 16,839.71 14,817.67

Advance & Progress Payment 1,176.48 1,341.43

Liability towards Investors Education and Protection Fund under Section 205C

of the Companies Act, 1956, not due : Unpaid Dividend 25.11 131.94

Unearned Income 3,057.36 3,828.45

Other Liabilities 992.62 1,515.76

22,091.28 21,635.25

SCHEDULE - 12

As at As atMar 31, 2010 Mar 31, 2009

PROVISIONS

Provision for Taxation (net) * 278.63 165.43

Provision for Fringe Benefit tax - 0.29

Proposed Dividends 2,603.12 742.79



Provision for Warranty - 3.45

4,054.12 1,938.35

Note:

* Includes provision for wealth tax - Rs. 0.81 Lakhs [Rs.0.56 Lakhs as at Mar 31, 2009]

97

13. BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES

Company Overview

TATA Technologies Limited (“TTL or the Company “) was incorporated on August 22, 1994 as a PrivateLimited Company in the name of Core Software Systems Private Limited. The name of the Companywas subsequently changed to Tata Technologies (India) Limited. On February 8, 2001, the Companychanged its name from Tata Technologies (India) Limited to Tata Technologies Limited. The Company’srange of services includes IT Consultancy, SAP implementation and maintenance, providing networkingsolutions, CAD/CAM engineering & design consultancy. The Company is headquartered in Pune, India.The Company has seven branches located at Mumbai, Lucknow, Jamshedpur, Bangalore, Puducherry,Chennai and South Korea that enables it to provide high quality, cost-effective services to clients inIndia and abroad.

During October 2005, the Company incorporated a wholly owned subsidiary in Thailand to cater theneed of automotive companies in Thailand and South East Asian countries. Also during October 2005the Company acquired, through its subsidiary, 100% equity of INCAT International Plc, UK which hadvarious subsidiaries in US, Europe, Japan and Singapore. A reorganization of various entities under INCATwas undertaken, to have a single representative legal entity in each country in which the Companyoperates, to improve operational efficiency. The Company now has a global presence, through itssubsidiaries, in US, UK, Germany, France, Japan, Mexico, Canada, Singapore and Thailand.

In December, 2005, the Company acquired 100% stake in Tata Technologies Pte Ltd. a Singapore basedCompany.

In October 2006, the Company sold its 100% equity stake in Tata Technologies ( Thailand) Ltd. to itswholly owned subsidiary viz. Tata Technologies Pte Ltd., Singapore at a value determined by anindependent 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 engineeringautomation services combined with the high-end onshore strengths of subsidiaries are expected tooffer a strong and seamless onshore/offshore delivery capability to the international customers in theautomotive, aerospace and engineering industries.

13.1. Basis of consolidation

The consolidated financial statements relate to the Company, its subsidiary companies and jointventure. The Company its subsidiaries and joint venture constitute the Group.

13.2. Basis of accounting

The financial statements are prepared under the historical cost convention, in accordance withIndian Generally Accepted Accounting Principles (GAAP). GAAP comprises the mandatory accountingstandards prescribed under Section 211(3C) of the Companies Act, 1956. Accounting policies havebeen consistently applied except where a newly issued accounting standard is initially adoptedor a revision to an existing accounting standard requires a change in the accounting policy hithertoin use. The financial statements of the subsidiary companies and joint venture used in theconsolidation are drawn up to the same reporting date as of the Company.

13.3. Principles of consolidation

The consolidated financial statements have been prepared on the following basis-

13.3. a The consolidated financial statements are prepared in accordance with the principlesand procedures required for the preparation and presentation of consolidatedfinancial statements as laid down under the accountings standard on ConsolidatedFinancial Statements issued by the ICAI.

13.3. b The financial statements of the Company and its subsidiary companies have beencombined 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 andunrealized profits or losses have been fully eliminated. The consolidated financialstatements are prepared by applying uniform accounting policies in use at the Group.

Schedules forming part of the Consolidated Balance Sheet and Profit and Loss

Account for the year ended March 31, 2010



98

13.3. c The excess of cost to the Company of its investments in the subsidiary companiesover its share of equity of the subsidiary companies, at the dates on which theinvestments in the subsidiary companies are made, is recognized as ‘Goodwill’ beingan asset in the consolidated financial statements. Alternatively, where the share ofequity in the subsidiary companies as on the date of investment is in excess of costof investment of the Company, it is recognized as ‘Capital Reserve’ and shown underthe head ‘Reserves and Surplus’; in the consolidated financial statements.

13.3. d Minority interest in the net assets of consolidated subsidiaries consists of the amountof equity attributable to the minority shareholders at the dates on which investmentsare made by the Company in the subsidiary companies and further movements intheir share in the equity, subsequent to the dates of investments as stated above.

13.3. e For the purpose of consolidation, the financial statements of foreign subsidiaries havebeen translated into its immediate parent companies currency and the same has beenon the following basis:

All income and expenses items are converted at the average rate of exchangeapplicable for the year. All assets and liabilities are translated at the closing rate as onthe balance sheet date. The resulting exchange differences on account of translationat the year end are transferred to translation reserve.

13.3. f The financial statements of the joint venture company has been combined by usingproportionate consolidation method and accordingly, venturer’s share of each of theassets, liabilities, income and expenses of jointly controlled entity is reported asseparate line item in the consolidated financial statements.

13.4. Subsidiaries and joint venture Companies considered in the consolidated financial statements:

13.4. a. The following subsidiary companies are considered in the consolidated financialstatements

% of holding either directly or through subsidiary as at

Name of the Subsidiary Company Country of March 31, March 31,Incorporation 2010 2009

Direct Subsidiary

1 TATA Technologies Pte. Ltd. Singapore 100 100

Indirect Subsidiaries

2 Tata Technologies (Thailand) Limited Thailand 100 100

3 INCAT International Plc. UK 100 100

4 Tata Technologies Europe Limited UK 100 100

5 INCAT GmbH Germany 100 100

6 INCAT SAS France 100 100

7 INCAT K.K. (1) Japan - 100

8 INCAT Holdings B.V. (2) Netherlands - 100

9 Tata Technologies Inc (formerly USA 99.24 99.24known as INCAT Systems Inc.) (3)(6)

10 Tata Technologies (Canada) Inc Canada 99.24 99.24(formerly known as INCAT Solutionsof Canada Inc.) (4)(6)

11 Tata Technologies de Mexico, S.A. Mexico 99.24 99.24de C.V (formerly known as IntegratedSystems Technologies de Mexico SAde CV) (5)(6)

(1) INCAT KK, Japan liquidated on July 31, 2009.

(2) INCAT Holdings B.V. liquidated on April 11, 2009

(3) The name changed from INCAT Systems Inc to Tata Technologies Inc w.e.f April 01, 2009.

(4) Name changed to Tata Technologies (Canada) Inc w.e.f. April 01, 2009

(5) The name changed to Tata Technologies de Mexico, S.A. de C.V. w.e.f April 01, 2009

(6) For these subsidiaries though the holding is 99.24 %, the indirect voting power is 100%.

99

13.4. b. The following joint venture company is considered in the consolidated financialstatements:

% of holding as at

Name of the Joint Venture Company Country of March 31, March 31,Incorporation 2010 2009

TATA HAL Technologies Limited India 50 50

13.5. Significant accounting policies

13.5. a Use of Estimates

The preparation of the financial statements in conformity with GAAP requires themanagement of the Company (Management) to make estimates and assumptions thataffect the reported amounts of revenue and expenses during the year and balancesof assets and liabilities and disclosures relating to contingent liabilities as at the dateof financial statements.

Provisions are made for all known losses and liabilities, future unforeseeable factorsthat may affect the profit on fixed price service contracts and also towards likelyexpenses for providing post-sales client support on such contracts.

13.5. b Revenue recognition

Revenue from services on time and materials contracts is recognized when servicesare rendered and related costs are incurred i.e. based on certification of time sheetsand billed to clients as per the terms of specific contracts.In case of fixed price contracts,revenue is recognized over the life of the contact based on milestones achieved asspecified in the contracts or by proportionate completion method on the basis of thework completed. Foreseeable losses on such contracts are recognized when probable.

Revenue from rendering Annual Maintenance Services (SAP-ERP) is recognizedproportionately over the period in which services are rendered.

Revenue from third party software products and hardware sale is recognized upondelivery.

Income from interest and rent is recognized on time proportion basis.

13.5. c Fixed assets

Fixed assets are stated at cost, less accumulated depreciation. Costs include allexpenses incurred to bring the assets to its present location and condition. Directcosts are capitalized till the assets are ready for use and include financing costs relatingto any borrowing attributable to the acquisition of the fixed assets.

Software not exceeding Rs. 25,000 is charged off to the Profit and Loss Account.

13.5. d Depreciation

Depreciation is provided on Straight Line Method (SLM) over the estimated usefullives of the assets. Estimated useful lives of assets are as follows:

Type of Asset Estimated useful life (years)

Leasehold Land 95

Buildings 15 to 27.5

Plant and Machinery 1 to 21

Computer Equipments 1 to 4

Furniture and Fixtures 5 to 16

Vehicles 3 to 10

Software Licenses 1 to 5

13.5. e Leases

Lease arrangements where the risks and rewards incident to ownership of an assetsubstantially vest with the lessor, are recognized as operating lease. Lease underoperating leases is recognized in the Profit and Loss account on a straight line basis.



100

13.5. f Foreign Currency transactions and translations of foreign operations

Income and expenses in foreign currencies are recorded at the exchange ratesprevailing on the date of the transaction.

Monetary current assets and current liabilities that are denominated in foreigncurrency translated at the exchange rates prevalent as at the Balance Sheet date andthe profit / loss so determined and also the realized exchange gains / losses arerecognized in the Profit and Loss Account.

All foreign operations have been identified as non-integral to the operations of theCompany. The translations of functional currency into reporting currency is performedfor balance sheets accounts using the exchange rates in effect at the balance sheetdate and for the revenue and expense accounts using appropriate average exchangerates for the respective periods. The gains or losses resulting from such translationsare accumulated in a foreign currency translation reserve.

Premium or discount on forward contracts is amortised over the life of such contractand is recognized as income or expense in the profit and Loss Account

13.5. g Investments

Investments are classified into current investments and long term investments.

Current investments are carried at lower of cost and market value. Any reduction inLoss carrying amount and reversals of such reductions are charged or credited to theProfit and Loss Account.

Long term investments are stated at cost less provision for diminution in the valueof such investments. Diminution in value is provided for where the management isof the opinion that the diminution is of permanent nature.

13.5. h Impairment of Assets

At each balance sheet date, the Company reviews using internal resources the carryingamounts of its fixed assets to determine whether there is any indication that theassets suffered an impairment loss. If any such condition exists, the recoverable amountof 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. Inassessing value in use, the estimated future cash flows expected from continuing useof the asset and from its disposal are discounted to their present value using a pretax rate that reflects the current market assessments of time value of money and therisks specific to the asset.

Reversal of impairment loss is recognized immediately as income in the Profit andLoss Account.

13.5. i Inventories

Inventories are valued at lower of cost or net realizable value. Cost is ascertained on amoving weighted average basis.

13.5. j Employee Benefits

(i) Gratuity

The Company has an obligation towards gratuity, a defined benefit retirementplan covering eligible employees. The plan provides for a lump sum paymentto vested employees at retirement, death while in employment or on terminationof employment of an amount equivalent to 15 to 30 days salary payable foreach comp1eted year of service. Vesting occurs upon completion of five yearsof service. The Company makes annual contributions to gratuity fundestablished as trust. The Company accounts for the liability for gratuity benefitspayable in future based on an independent actuarial valuation.

(ii) Superannuation

The Company has two superannuation plans, a defined benefit plan and adefined contribution plan. An eligible employee on April 1, 1996 could elect tobe member of either plan.

Employees who are the members of the defined benefit superannuation planare entitled to benefits depending on the years of service and salary drawn.

101

The monthly pension benefits after retirement range from 0.75% to 2% of theannual basic salary for each year of service. The Company and the saidsubsidiaries account for superannuation benefits payable in future under theplan based on an independent actuarial valuation.

With effect from April 1, 2003, this plan was amended and benefits earned bycovered employees have been protected as at March 31, 2003. Employees coveredby this plan are prospectively entitled to benefits computed on a basis thatensures that the annual cost of providing the pension benefits would notexceed 15% of salary.

The Company maintains separate irrevocable trusts for employees covered andentitled to benefits. The Company contributes up to 15% of the eligibleemployees’ salary to the trust every year. Such contributions are recognized asan expense when incurred. The Company has no further obligation beyond thiscontribution.

(iii) Bhavishya Kalyan Yojana (BKY)

Bhavishya Kalyan Yojana is an unfunded defined benefit plan. The benefits ofthe plan accrue to an eligible employee at the time of death or permanentdisablement, while in service, either as a result of an injury or as certified by theappropriate authority. The monthly payment to dependents of the deceased /disabled employee under the plan equals 50% of the salary drawn at the timeof death or accident or a specified amount, whichever is higher. The Companyaccounts for the liability for BKY benefits payable in future based on anindependent actuarial valuation.

(iv) Post-retirement Medicare Scheme

Under this Scheme employees get medical benefits subject to certain limits ofamount, periods after retirement and types of benefits, depending on their gradeand location at the time of retirement. The Company account for the liabilityfor post-retirement medical scheme based on an independent actuarialvaluation.

(v) Provident Fund

The eligible employees of the Company are entitled to receive benefits underthe provident fund, a defined contribution plan, in which both employees andthe Company make monthly contributions at a specified percentage of thecovered employees’ salary (currently 12% of employees’ salary). The providentfund contributions, as specified under the law, are paid to the provident fundset up as irrevocable trust by the Company and pension amount is paid toRegional Provident Fund Commissioner and the Central Provident Fund underthe State Pension Scheme.

(vi) Compensated absences

The Company provides for the encashment of leave or leave with pay subjectto certain rules. The employees are entitled to accumulate leave subject to certainlimits, for future encashment. The liability is provided based on number of daysof unutilized leave at each balance sheet date on the basis of an independentactuarial valuation.

13.5. k Taxation

Current income tax expense comprises taxes on income from operations in India andforeign tax jurisdictions. Income tax payable in India is determined in accordance withthe provisions of Income Tax Act, 1961. Tax expense relating to overseas operations isdetermined in accordance with tax laws applicable in countries where such operationsare domiciled.

Deferred tax expense or benefit is recognized on timing differences being thedifference between taxable income and accounting income that originate in one periodand are capable of reversal in one or more subsequent periods. Deferred tax assetsand liabilities are measured using the tax rates and the tax laws that have beenenacted or substantively enacted by the Balance Sheet date.



102

Deferred tax assets in respect of unabsorbed depreciation and carry forward of lossesare recognized to the extent that there is virtual certainty that taxable income will beavailable to realize these assets. All other deferred tax assets are recognized to theextent that there is reasonable certainty that future taxable income will be availableto realize these assets.

13.5. l Employee Stock Options

In accordance with the Employee Stock Option Scheme and Employee Stock PurchaseScheme Guidelines, 1999 issued by Securities and Exchange Board of India (SEBI), theCompany introduced Employee Stock Option Plan 2001(TTESOP 2001) in 2000-01. Asper the Plan, the options were granted at fair value as determined by an independentvaluer as on the date of the grant and hence no compensation cost has beenrecognized.

13.5. m Earnings per share

The earnings considered in ascertaining the Company’s earnings per share comprisethe 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 weightedaverage number of shares outstanding during the year. The number of shares usedin computing diluted earnings per share comprises the shares considered for derivingbasic earnings per share and also number of equity shares that could have been issuedon the conversion of all dilutive potential equity shares.

13.5. n Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction orproduction 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 isprobable that they will result in future economic benefits to the enterprise and thecosts can be measured reliably. Other borrowing costs are recognized as an expensein the year in which they are incurred.

13.5. o Provisions, contingent liabilities and contingent assets

A provision is recognized when the Company has present obligation as a result ofpast event and its probable that an outflow of resources will be required to settle theobligation, in respect of which reliable estimate can be made. The provisions (excludingretirement benefits) are not discounted to its present value and are determined basedon best estimate required to settle the obligation at the balance sheet date. These arereviewed at each balance sheet date and adjusted to reflect current best estimates.Contingent liabilities are not recognized in the financial statements. A contingent assetis neither recognized nor disclosed in the financial statements.

13.6. Notes to Accounts

13.6. a Contingent liabilities


Rs. Lakhs Rs. Lakhs

a) Bills discounted 5,156.18 6,533.16

b) Income Tax demands disputed in appeals 196.97 196.97

c) Sales Tax demands disputed in appeals 53.01 53.01

d) Service Tax demands disputed in appeals 100.91 -

13.6. b Capital Commitments

The estimated amount of contracts remaining to be executed on capital account andnot provided for is Rs. 378.36 Lakhs ( net of advances) as at March 31, 2010 (March 31,2009 : Rs. 268.95 Lakhs).

103

13.6. c Major components of deferred tax arising on account of timing differences are:


Rs. Lakhs Rs. Lakhs

Deferred tax liabilities:


Others 62.08 73.39

Sub-total 693.37 436.94

Deferred tax assets:

Depreciation in excess of capital allowances 242.65 286.31

Provision for expenses u/s. 43B 221.75 232.76

Others 956.03 719.82

Sub-total 1,420.43 1,238.89

Deferred Tax Asset /(Liability) Net 727.06 801.95

The Components of deferred tax assets (DTA) / deferred tax liabilities (DTL) referredabove have been aggregated based on the nature of items across various taxjurisdictions. For the purpose of Balance Sheet disclosure such aggregation has notbeen made.

13.6. d Disclosure in respect of Lease assets

1. Disclosure in respect of operating leases:


Rs. Lakhs Rs. Lakhs

Obligations towards non-cancelable lease

Not later than one year 797.51 1,011.84

Later than one year and not later 1,462.30 1,412.20than five years

2,259.81 2,424.04

Lease payments recognised 1,244.80 1,225.10in the statement of profit andloss for the year

13.6. e Computation of Earnings per share

2009-2010 2008-2009

Earnings Per Share

(a) Profit after tax Rs. Lakhs 9,099.96 6,586.55

(b) The weighted average number Nos. 37,187,364 37,139,680of Ordinary Shares for Basic EPS

(‘c) The nominal value per Ordinary Rupees 10.00 10.00Share

(d) Earnings Per Share (Basic) Rupees 24.47 17.73

(e) Profit after tax for Basic & Rs. Lakhs 9,099.96 6,586.55Diluted EPS

(f) The weighted average number Nos. 37,187,364 37,139,680of Ordinary Shares for Basic EPS

(g) Add: Adjustment for Nos. 220,460 306,947Employee Stock Options

(h) The weighted average number Nos. 37,407,824 37,446,627of Ordinary Sharesfor Diluted EPS

(i) Earnings Per Shares (Diluted) Rupees 24.33 17.59



104

13.6. f Movement in Goodwill and Capital Reserve

As at As atGoodwill March 31, 2010 March 31, 2009

Rs. Lakhs Rs. Lakhs


Deductions / Adjustments *(109.09) -during the period

Translation difference (3,306.39) (1,731.05)

As at the end of the year / period 32,887.66 36,303.14

* Deduction of Rs.109.09 lakhs is on account of liquidation of INCAT K.K. Japan

As at As atCapital Reserve March 31, 2010 March 31, 2009

Rs. Lakhs Rs. Lakhs

As at the beginning of the year 98.93 58.11

Translation difference (33.44) 40.82

As at the end of the year / period 65.49 98.93

13.6. g Employee Benefits

Defined benefits plans / long term compensated absences – as per actuarial valuationsas on March 31, 2010

Rs. in lakhs

Gratuity Superannuation Compensated Post-retirement BKYabsences Medicare scheme

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

i C o m p o n e n t s o fe m p l o y e r e x p e n s e


Interest cost 89.21 89.37 32.76 32.77 35.29 33.33 11.94 16.52 5.91 12.64

Expected return on plan assets (93.66) (96.39) (39.23) (36.20) - - - - - -

Actuarial Losses/(Gains) (2.27) (75.06) (15.52) 30.44 (16.82) 125.11 37.19 (94.83) (8.33) (96.25)

To t a l e x p e n s e / ( i n c o m e ) 109.17 32.37 3.88 54.10 82.80 178.98 65.69 ( 5 0 . 3 8 ) 7.25 ( 7 4 . 3 5 )r e c o g n i s e d i n t h eS t a t e m e n t o fP r o f i t & L o s s A c c o u n t

i i A c t u a l C o n t r i b u t i o n a n dB e n e f i t P a y m e n t s f o r y e a rended 31 March 2010

Actual benefit payments 113.36 113.19 2.45 25.73 154.78 156.96 3.72 3.15 5.19 4.63

Actual Contributions - - 28.32 30.82 154.78 N/A 3.72 N/A 5.19 N/A

iii N e t a s s e t / ( l i a b i l i t y )r e c o g n i s e d i n b a l a n c esheet as at March 31, 2010

Present Value of Defined Benefit 1,212.00 1,106.22 531.15 486.54 420.63 492.61 204.32 142.35 74.15 72.09Obligation

Fair value of plan assets 1,223.98 1,227.37 546.53 477.48 - - - - - -

N e t a s s e t / ( l i a b i l i t y ) 11.98 121.15 15.38 ( 9 . 0 6 ) (420.63) (492.61) (204.32) (142.35) ( 7 4 . 1 5 ) ( 7 2 . 0 9 )r e c o g n i s e d i n b a l a n c esheet

105

i v C h a n g e i n D e f i n e d B e n e f i tO b l i g a t i o n s ( D B O ) d u r i n gt h e y e a r e n d e dMarch 31, 2010

Present Value of DBO at beginning of year 1,106.22 1,108.00 486.54 435.70 492.61 470.59 142.35 195.88 72.09 151.06


Interest cost 89.21 89.37 32.76 32.77 35.29 33.33 11.94 16.52 5.91 12.64

Actuarial (gains)/ losses 14.04 (92.42) (11.57) 16.71 (16.82) 125.11 37.19 (94.83) (8.33) (96.25)

Benefits paid (113.36) (113.19) (2.45) (25.73) (154.78) (156.96) (3.72) (3.15) (5.19) (4.63)

P r e s e n t V a l u e o f D B O a t 1,212.00 1,106.22 531.15 486.54 420.63 492.61 204.32 142.35 74.15 72.09t h e e n d o f y e a r

v C h a n g e i n F a i r V a l u e o fA s s e t s d u r i n g t h e y e a re n d e d M a r c h 3 1 , 2 0 1 0

Plan assets at beginning of year 1,227.37 1,261.53 477.48 449.92 N/A N/A N/A N/A N/A N/A

Actual return on plan assets 109.97 79.03 43.18 22.47 N/A N/A N/A N/A N/A N/A

Actual Company contributions - - 28.32 30.82 154.78 156.96 3.72 3.15 5.19 4.63

Benefits paid (113.36) (113.19) (2.45) (25.73) (154.78) (156.96) (3.72) (3.15) (5.19) (4.63)

Plan assets at the end of year 1,223.98 1,227.37 546.53 477.48 - - - - - -

v i A c t u a r i a l A s s u m p t i o n s

Discount Rate 8.50% 8.50% 6.75% 6.75% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%

Expected Return on plan assets 8.00% 8.00% 8.00% 8.00% N/A N/A N/A N/A N/A N/A

Salary escalation 2%-5% 3%-5% N/A N/A 2%-5% 3%-5% N/A N/A 2%-5% 3%-5%

Medical cost inflation N/A N/A N/A N/A N/A N/A 4.00% 4.00% N/A N/A

vii T h e m a j o r c a t e g o r i e s o f p l a na s s e t s a s p e r c e n t a g e o ftotal plan assets

Debt securities 99.73% 100% 99.16% 100% N/A N/A N/A N/A N/A N/A

Balances with banks 0.27% 0% 0.84% 0% N/A N/A N/A N/A N/A N/A

viii E f f e c t o f o n e p e r c e n t a g e O n e p e r c e n t a g e p o i n t i n c r e a s e O n e p e r c e n t a g e p o i n t d e c r e a s ep o i n t c h a n g e i n a s s u m e d i n M e d i c a l i n f l a t i o n r a t e i n M e d i c a l i n f l a t i o n r a t eM e d i c a l i n f l a t i o n r a t e

2010 2009 2010 2009

DBO as at 31 March 216.65 150.45 193.01 134.89

Service cost for the year 17.43 30.36 15.75 26.94

Interest cost for the year 12.63 20.24 11.31 15.48

The above table does not include Rs. 40.94 lakhs liability accounted towardsCompensated absences of subsidiary and joint venture, which is computed on actualbasis.

13.6. h Considering the financial position and business strategies, management has liquidatedINCAT KK, Japan effective July 31, 2009. Accordingly, consequential adjustments havebeen made in the books of accounts.

13.6. i During the year, the Company has revised its policy of providing for doubtful debtsfrom a specific identification method. Currently provision for doubtful debts is createdas a percentage of the outstanding debts based on ageing. The impact of this changewas an additional provision of Rs.1,815.94 lakhs, which in accordance with the approvalof the High Court as explained in Note 13.6.j of this Schedule has been debited theSecurities Premium Account as per the Court approval.

Rs. in lakhs

Gratuity Superannuation Compensated Post-retirement BKYabsences Medicare scheme

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009



106

13.6. j The Shareholders of the Company at the Extra-Ordinary General Meeting held onMarch 5, 2010 approved and the High Court of Judicature at Mumbai vide its orderdated April 16, 2010 have confirmed the utilisation of Securities Premium Account inaccordance with the provisions of Section 78 read with Section 100 to 103 of theCompanies Act, 1956, towards adjustment of the following:

Rs. Lakhs

Employee Severance Cost 1,717.19

Consultancy Cost for implementation of a Business 1,132.64Restructuring programme

Additional provision for Doubtful Debts arising from a 1,815.94revision in the policy for providing for doubtful debts

Total 4,665.77

13.6. k Segment Reporting

Primary Segment

Segment reporting is made on the basis of the geographical location of the customer

Rs. Lakhs

USA India Rest of the TotalWorld

Revenues 38,805.61 30,542.56 39,332.77 108,680.9453,958.59 30,839.10 38,644.23 123,441.92

Identifiable 38,533.94 17,814.77 35,874.45 92,223.16operating expenses 50,686.76 19,700.99 35,648.51 106,036.26

Allocated expenses 113.18 692.07 126.80 932.0544.36 538.03 83.30 665.69

Segmental operating 158.49 12,035.72 3,331.52 15,525.73Income 3,227.46 10,600.08 2,912.44 16,739.98

Unallocable expenses 4,044.968,127.92

Other Income 1,115.96677.00

Net profit before taxes 12,596.739,289.06

Taxes 3,496.772,702.51

Net profit after taxes 9,099.966,586.55

Fixed assets used in the Company’s business or liabilities contracted have not beenidentified to any of the reported segments, as fixed assets and services are usedinterchangeably between reported segments.

Secondary Segment

The complete operations of the Company have been treated as a single segment“Information technology services”.

Previous year figures are shown in italic.

13.6. l Auditors Remuneration*

2009-10 2008-09Rs. Lakhs Rs. Lakhs

i) For services as auditors, including quarterly audits 144.17 146.09

ii) For Tax Audit 3.00 3.00

iii) For Other services 6.99 11.84

iv) Reimbursement of out-of-pocket expenses 0.11 12.32

154.27 173.25

* Excluding service tax

107

13.6. m Related Party Disclosures for the year ended March 31, 2010

a) Related party and their relationship

1 Parent Company Tata Motors Ltd2 Fellow subsidiaries 1 TAL Manufacturing Solutions Ltd

2 HV Axles Ltd3 HV Transmission Ltd4 Sheba Properties Ltd5 Concorde Motors (India) Ltd6 Telco Construction Equipment Co. Ltd7 Tata Daewoo Commercial Vehicle Co. Ltd8 Tata Motors Insurance Broking & Advisory

Services Ltd9 Tata Motors European Technical Centre Plc

10 Tata Motors Finance Ltd11 Tata Marcopolo Motors Ltd12 Tata Motors (Thailand) Ltd13 TML Holdings Pte Ltd, Singapore14 TML Distribution Company Ltd15 Hispano Carrocera S.A.

(w.e.f. October 16, 2009)16 Tata Motors (SA) (Proprietory) Ltd17 Miljobil Grenland AS18 Miljobil Innovasjan AS (Merged with

Miljobil Grenland AS w.e.f. October 12, 2009)19 Serviplem S.A20 Comoplesa Lebrero S.A21 Baryval Assistencia Tecnica S.L22 Inner Mongolia North Baryval Engineering

Special Vehicle Corporation Ltd23 JaguarLandRover Ltd24 Jaguar Cars Ltd25 Jaguar Cars Overseas Holdings Ltd26 Jaguar Land Rover Austria GmbH27 Jaguar Belux NV28 Jaguar Land Rover Japan Ltd29 Jaguar cars South Africa (pty) Ltd30 Jaguar Italia SPA31 Jaguar Cars Exports Ltd32 The Daimler Motor Company Ltd33 The Jaguar Collection Ltd34 Daimler Transport Vehicles Ltd35 SS Cars Ltd36 The Lanchester Motors Company Ltd37 Jaguar Hispania Sociedad38 Jaguar Deutschland GmbH39 Land Rover UK40 Land Rover Group Ltd41 Jaguar Land Rover North America LLC42 Land Rover Belux S.A./N.V43 Land Rover Ireland Ltd44 Jaguar Land Rover Nederland BV (Name

changed from Land Rover Nederland BVw.e.f. June 10, 2009)

45 Jaguar Land Rover Portugal - VeiculosePecas LDA



108

46 Jaguar Land Rover Australia Pty Ltd47 Land Rover Exports Ltd48 Land Rover Italia SpA49 Land Rover Espana SL50 Land Rover Deutschland GmbH51 Jaguar & Land Rover Asia Pacific Company

Ltd. (Liquidated w.e.f. October 12, 2009)52 Jaguar Land Rover Mexico SA de CV53 Jaguar Land Rover Korea Company Ltd54 Jaguar Land Rover Automotive Trading

(Shanghai) Company Ltd55 Jaguar Land Rover Canada ULC56 Jaguar Land Rover France, SAS57 Jaguar Land Rover (South Africa) (Pty) Ltd58 Jaguar Land Rover Brazil LLC (incorporated

on 01.04.2009)59 Limited Liability Company “Jaguar Land

Rover” (Russia) (incorporated on 01.04.2009)60 Land Rover Parts Ltd (incorporated on

02.04.2009)61 Land Rover Parts US LLC (incorporated on

19.06.2009)62 Carrosseries Hispano Maghreb, Morocco

3 Joint Venture Tata HAL Technologies Ltd

4 Associates of 1 Tata Cummins LtdParent Company 2 Tata Precision Industries Pte. Ltd

3 Fiat India Automobiles Ltd4 Automobile Corporation of Goa Ltd5 Nita Co Ltd6 Tata AutoComp Systems Ltd7 Telcon Ecoroad Resurfaces Pvt. Ltd

5 Key Management Personnel Mr. P. R. McGoldrick

6 Key Management Personnel 1 Mr. Warren K Harrisin subsidiary companies & 2 Mr. Samir YajnikJoint Venture 3 Mr. Henry Hutchinson

4 Mr. Fernando Oviedo5 Mr. David Myers6 Mr. Lawrence James7 Mr. Marcus Schleer8 Mr. Ramesh Indhewat9 Mr. Yoshihiko Takebe

10 Mr. T Rajasekaran11 Mr. Lokesh Shrivastava

109

b) Transactions with related parties (Rs. In Lakhs)A statement of transactions with the related parties is attached herewith.

Particulars Parent Fellow Joint KeyCompany subsidiaries Venture Management

Personnel

Sale of goods(inclusive of sales tax) 1,194.28 2,740.47 17.98 -(2,784.01) (11,157.83) (26.36) -

Services received - - 7.72 1,106.89- - (10.36) (1,354.91)

Services rendered 21,059.29 19,064.42 - -(19,473.94) (2,419.34) - -

Finance given (including loans, equity & ICD) 22,900.00 - - -(25,750.00) - (145.00) -

Finance taken (including loans,equity & ICD) 21,600.00 - - -(25,355.00) - - -

Interest/Dividend paid/(received)(net) 24.62 - - -(1,176.18) (0.01) - (39.20)

Amount receivable 1,013.99 3,563.73 18.13 -(8,507.93) (3,790.75) (87.93) -

Amount payable 15.30 - 4.10 20.16(37.98) - (9.21) (34.43)

Amount receivable (in respect of loans, 5,500.00 - 273.50 -Equity & ICD) (4,200.00) - (145.00) -

Amount payable (in respect of loans, 0.64 0.01 - -Equity & ICD) - (0.01) - -

* Previous year’s figures are shown in the brackets

13.6. n Conversion into Indian Rupees

For the purpose of consolidation, the financial statements of foreign subsidiaries have beentranslated into its immediate parent companies currency and the same has been on thefollowing basis:

All income and expenses items are converted at the average rate of exchange applicablefor the period. All assets and liabilities are translated at the closing rate as on the balancesheet date. The resulting exchange differences on account of translation at the period endare transferred to translation reserve.

13.6. o The previous year/period figures have been re-classified/regrouped and recast to conformto current period’s classification.



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THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

CK

I hereby record my presence at the SIXTEENTH ANNUAL GENERAL MEETING of the Company at 25, Rajiv Gandhi Infotech Park, Hinjawadi,

Pune 411 057, at 3:30 p.m. on Tuesday, July 20, 2010.

2010.

Sixteenth

Tuesday, July 20, 2010

1 Rupee

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.

NOTES

NOTES

�

�

�

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�

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R&D Centre/Centre of Excellence (CoE)

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GLOBAL PRESENCE

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25 Rajiv Gandhi Infotech Park | Hinjawadi Pune 411057 IndiaTel +91 20 66529090 | Fax +91 20 66529035

Email: [email protected]

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