16th Annual Report 2009-10BETTER INNOVATION
Tata Technologies, founded in 1989 and a part of the Tatagroup, is a global leader in Engineering Services Outsourcing(ESO...
CONTENTS                                                                                                                  ...
HISTORICAL PERFORMANCEI   | Sixteenth Annual Report 2009-10
LETTER TO SHAREHOLDERDear Fellow Investor,“Your company has emerged from the global economic crisisPXFK VWURQJHU DQG HI¿FL...
Better InnovationWhether developing products or providing services for customers, it is the comprehensive understanding of...
LETTER FROM THE COODear Fellow Investor,The year 2009-10 was an exceptional year for Tata Technologies. Despite ongoing ec...
To assure our shareholders of the long-term sustainability of these actions we have implemented corporate governanceinclud...
to do, and we will accept nothing less.    Our clients expect our conformance to industry standards, and that is why I am ...
LEADERSHIP TEAM               Nick Sale                                                          Warren Harris            ...
Patrick McGoldrick                                                         Samir Yajnik   CEO  Managing                   ...
BETTER INNOVATION - IT’S IN OUR DNADNA is a difference maker. It’s the life force that sets you apart.   imagination to tr...
|   X
CLIENT INNOVATION PROFILE: AIRBUS                                                                     “Tata Technologies h...
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CLIENT INNOVATION PROFILE: FORD MOTOR COMPANY                                                                    “iGETIT h...
³,QQRYDWLRQ LQ *OREDO .QRZOHGJH 7UDQVIRUPDWLRQ´                              |   XIV
CLIENT INNOVATION PROFILE: JAGUAR LAND ROVER                                                                      “The hig...
³,QQRYDWLRQ LQ %XVLQHVV 7UDQVIRUPDWLRQ´                          |   XVI
CLIENT INNOVATION PROFILE: TATA MOTORS                                                                     The Challenge:F...
³,QQRYDWLRQ LQ )UXJDO (QJLQHHULQJ´                                |   XVIII
CORPORATE SOCIAL RESPONSIBILITYThe mission of the Tata Technologies Corporate Social Responsibility [CSR] program is to ma...
Swine Flu Education  PreventionEmployee volunteers from Tata Technologies has organized lectures on the importanceof maint...
The Macomb Homeless Coalition                                          MHC is an umbrella association of providers of shel...
CSR AwardsOn December 8, 2009, NA CSR Committee work was honored by the Macomb County Services Agency (MCCSA) at its annua...
BOARD OF DIRECTORS                                                    Board of Directors                                  ...
NOTICENOTICE IS HEREBY GIVEN THAT THE SIXTEENTH ANNUAL GENERAL MEETING OF THE MEMBERS OF TATATECHNOLOGIES LIMITED will be ...
Sixteenth Annual Report 2009-10    Tata Technologies Limited    7.   Members may please note the contact details of the Co...
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956The following Explanatory Statement pursuant to...
Sixteenth Annual Report 2009-10    Tata Technologies Limited    3.   In compliance with the provisions of Sections 269, 30...
DETAILS ABOUT MR R GOPALAKRISHNAN, THE RETIRING DIRECTOR                  OFFERING HIMSELF FOR RE-APPOINTMENTDate of Birth...
Sixteenth Annual Report 2009-10    Tata Technologies Limited                                              DIRECTORS’ REPOR...
3.   DIVIDEND     The Board recommends a dividend of Rs 7/- per share, for the financial year 2009-10 on a pro-rata basis....
Sixteenth Annual Report 2009-10    Tata Technologies Limited         Company serves. The Company continued with its focus ...
North America     G   Community Network Services (CNS) in Michigan: Supported the annual “Adopt-a-Family” program.        ...
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Tata Technologies

  1. 1. 16th Annual Report 2009-10BETTER INNOVATION
  2. 2. Tata Technologies, founded in 1989 and a part of the Tatagroup, is a global leader in Engineering Services Outsourcing(ESO) and Product Development IT services solutions forProduct Lifecycle Management (PLM) and Enterprise ResourceManagement (ERM) to the world’s leading automotive andaerospace manufacturers and their suppliers.Tata Technologies has its international headquarters inSingapore, with regional headquarters in the United States(Novi, Michigan), India (Pune) and the UK (Luton). TheCompany has a combined global work force of more than4,000 professionals serving clients worldwide from facilities inNorth America, Europe and the Asia-Pacific region.On the cover: Abstract artist rendition of DNA emphasizinginnovation, technology and globalization.© 2010 Tata Technologies Limited
  3. 3. CONTENTS Sixteenth Annual Report 2009-10 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 ....................................................................................................................................................................................................... 114This 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.
  4. 4. HISTORICAL PERFORMANCEI | Sixteenth Annual Report 2009-10
  5. 5. LETTER TO SHAREHOLDERDear Fellow Investor,“Your company has emerged from the global economic crisisPXFK VWURQJHU DQG HI¿FLHQW :H DUH QRZ SRLVHG WR JURZ EKHOSLQJ RXU FXVWRPHUV FUHDWH H[FLWLQJ SURGXFWV LQ WKLV QHZHFRQRPLF HQYLURQPHQW´The year 2009-10 presented your Company with an economy in free fall. No one knewwhen it would reach bottom, what level that would be and to what level it wouldrecover. 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 youthat your Company has emerged much stronger and efficient, posting year-on-yeargrowth in revenue, EBITDA and profit after tax of 3%, 24% and 32% respectively and on Patrick McGold McGoldricka consolidated basis of -12%, 28% and 38%. How did we do this? Why are we stronger CEO and Managing Directortoday? And what are we planning for year 2010-11?When I wrote to you last year, we had just completed the rebranding of your Companyto Tata Technologies. In the year before, your Company had transformed from a territory-centric organization to one globallyaligned to meet our clients’ needs. As the global recession reduced revenues across the industry, it challenged your Company toadapt and respond. We focused on a dramatic reduction of costs and improvement of efficiency. Over the years we have beenimproving 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 willremain 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 despiteconsolidated revenues declining 12% to Rs. 1098 crores from Rs. 1241 crores the year before, due to the challenging economicenvironment.We Emerge StrongerThe global economy has started to recover. While it is impossible to predict the future, the signs are encouraging that thisrecovery will continue. We are ready if there are future shocks to the banking system. We are much more efficient and we havegenerated cash and cash equivalents of Rs. 193 crores consolidated and Rs. 141 crores stand alone. We have replaced the $50mnterm loan in the United States with two new term loans at much more favorable rates for three years. Further, we have takenyour approval for infusion of share capital of up to $30mn from one or more private equity investors to fuel future growth andto prepare us for the discipline of public listing should we decide to do so in the future.Deeper Customer Relationships are Helping Us GrowDespite 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 withyour Company. This is working as partially evidenced by our offshore revenue growth of 13%. | II
  6. 6. Better InnovationWhether developing products or providing services for customers, it is the comprehensive understanding of every aspect ofmanufacturing deeply embedded in our DNA that sets your Company apart, helping our customers save time, reduce costs andenhance quality. And the driving force is the anything-is-possible attitude of my colleagues around the world; an attitude thatstrives 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 aTata Nano (the $2500 car) at the Detroit Science Center during the week of the North American International Automotive Showin Detroit, Michigan. The reception was overwhelmingly positive. The concept of creating safe, all-weather transportation forpeople who could never dream of owning a new car; challenging a group of young people to create that car at a price thatpreviously 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 countryat www.betterinnovation.com. Through this activity your Company is increasingly being recognized for our offerings in frugalengineering and lean design.You will recall that in 2006, I wrote to you about the huge challenges our customers face in meeting increased environmentalstandards. These challenges have intensified every year and in 2010, the issues of climate change and the world’s dependenceon fossil fuels especially oil, are now a top-of-mind concern for many of our customers and governments. By anticipating andplanning for these issues early, we are already actively engaged in several alternate energy vehicle programs. Digitization ofthe product development process remains critical for our customers to create breakthrough products. In the coming year, yourCompany will invest in a world-class virtual reality lab to enable our customers and employees to interact with life-sized digitalprototypes in 3D. This will further enhance the value of our offerings.In SummaryTo sum up, your Company has emerged from the global economic crisis financially much stronger and operationally moreefficient. We have delivered record earnings per share and generated record cash. We have also put in place building blocks togrow 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 ascompetitors and OEMs seeing the value of engineering design services delivered from India, set up captive units in India. Aside effect is rising salary costs. To meet these and other challenges we will continue to move up the value chain, utilize more ofyour 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 pursuitof excellence by the 4,000 men and women who make up the Tata Technologies family. It is they who have made this possibleand 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 hearingthe valuable suggestions you may have to help your Company become better and better.Patrick McGoldrickChief Executive Officer and Managing DirectorIII | Sixteenth Annual Report 2009-10
  7. 7. LETTER FROM THE COODear Fellow Investor,The year 2009-10 was an exceptional year for Tata Technologies. Despite ongoing economicheadwinds, 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 aglobal basis, improve operational efficiencies and to capitalize on existing investments.This strategy is empowering Tata Technologies to deliver better results for today andproviding the foundation for sustainable growth for tomorrow.Better Serving of Global ClientsOur clients’ requirements have not changed very much from last year. Saving money,protecting capital and reducing cost continue to be paramount objectives of the clientswith whom we are partnered. I am pleased to share that we are helping them to achievethese goals and, at the same time, we are increasing our value proposition by deliveringground breaking product and process innovation. One of the ways we are exceedingour clients’ expectations is through our offshore engagement model. This strategy Warren Harriscontinues to serve the company well and has expanded for all our lines of service. Our President and COOability to deliver results in any time zone is why our global client profile continues togrow. 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 ImprovementsThis past year, we implemented an initiative called “OE-11,” which was designed to improve Tata Technologies’ operationalefficiencies by FY 2011, without compromising our ability to deliver on our clients’ requirements. Many of these changes weredifficult, as the organization endured a number of key personnel changes. But, these changes were necessary in order toenable Tata Technologies to be more competitive and to operate more nimbly. The cost containment, rationalization of theorganization and deployment of internal shared-services strategies has proved to be very effective, yielding nearly $11.5 millionof annual savings. | IV
  8. 8. To assure our shareholders of the long-term sustainability of these actions we have implemented corporate governanceincluding: 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 InvestmentsTata 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 newmarket 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 technologyV | Sixteenth Annual Report 2009-10
  9. 9. 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.SummaryI believe Tata Technologies is at the center of an exciting market where the winners will be those companies who have everypart of their organizations working together to drive value for their clients. This emerging market, and the companies who canlead 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. Wehave aggressively worked to win over new clients and have succeeded. Our ability to deliver multiple, and diverse, solutionsto the overall product development process including IT, PLM and Engineering Outsourced Services are thriving; and ouropportunity to take on mega-engagements is expanding. Our global delivery model has achieved new levels of scalabilityand increased project profitability. Our transformation into a global company is an ongoing journey, where improvement canalways 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 relentlesssupport of our value proposition have made what we achieved possible; and who provide the greatest measure of my optimismfor the year ahead.Warren HarrisPresident and Chief Operating Officer | VI
  10. 10. LEADERSHIP TEAM Nick Sale Warren Harris COO of Europe Kevin Fisher Head of Delivery President COO Operations V. Balaji Ron Bienkowski Chief Information Executive Officer Vice President Gopinath Jayaraj Corporate Quality HeadVIVIIVII | Sixteenth Annual Rep 2009-10 Si Sixteenth Annua Report 2009-2010 Annual eport 2009-10 al 09-1
  11. 11. Patrick McGoldrick Samir Yajnik CEO Managing President Director Global Services Samrat Gupta Chief Financial Officer Anubhav Kapoor T.N. Umamaheshwaran General Counsel Chief Technology Officer Company Secretary Milind Kaulgud Head of Human Resources | VIII
  12. 12. BETTER INNOVATION - IT’S IN OUR DNADNA is a difference maker. It’s the life force that sets you apart. imagination to traditional problems. We believe innovation that is inspiring, insightful and imaginative is BETTERIn the biomolecular world, scientists acknowledge that DNA INNOVATION.(deoxyribonucleic acid) contains the genetic instructions forthe development and functioning of all living organisms. The BETTER INNOVATION has been the nucleus of Tata Technologies’main role of DNA molecules is to store the information needed strategy for more than 20 years. How do we do it? In many ways.to construct life-giving cells. We are developing new products with experimental materials that will be game-changers in product sustainability and environmental responsibility. We collaborate with companies$W 7DWD 7HFKQRORJLHV ZH EHOLHYH to transform product development processes to compete with best-in-class companies. We engage our clients to rethinkour DNA is different because and then implement new processes to achieve previouslyRI RQH VLJQL¿FDQW DQG LQKHUHQW unthinkable product management lifecycle efficiencies. WeFRPSRQHQW LQQRYDWLRQ 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 withoutIn simple terms, DNA is a set of blueprints for life itself. compromising transparency.In a similar way, most businesses have DNA – information that In January of 2010, we took our BETTER INNOVATION storyis stored and retrieved as necessary to guide the company on the road highlighting our contributions to the design andduring its life. This blueprint is vast and contains accumulated manufacturing success of the exciting Tata Nano. The tourtechnology knowledge, theoretical research, approaches helped bring the unique Tata Technologies DNA into sharpto sustainability, best practices, tested business processes, focus and was warmly received by the media and our clients.historical analysis, individual and collective experiences Over the following pages, you will find several examples ofand guiding principles. Each company has different stored how we are delivering BETTER INNOVATION to our clients.information, which makes each organization unique. That’s our DNA. And that’s our mission.At Tata Technologies, we believe our DNA is different becauseof one significant and inherent component: innovation.We are on a mission to make sure that our innovation isinspiring to our clients and to their customers and createspowerful impressions. We work to ensure that our innovationreflects deep insight into our clients’ business requirements.And we are dedicated to innovation that applies breakthrough “ … innovation that is inspiring, insightful and imaginative is %(77(5 ,1129$7,21´ :DUUHQ +DUULV | President Global COOIX | Sixteenth Annual Report 2009-10
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  14. 14. CLIENT INNOVATION PROFILE: AIRBUS “Tata Technologies has become a reliableFAST FACTS: supplier and has provided a quick solutionCompany: AirbusIndustry: Aerospace to Airbus CFD Fuel Systems requirementsLocation: Europe through the establishment of high levelEmployees: 52,000 SURFHVVHV´Revenues [Euro] € 28 billion | Ruchir Dayal $LUEXV +HDG RI ) )XHO 6VWHPV RPDLQ The Challenge: Innovation Perspective: Tata Technologies mobilized an offshore delivery team with Innovation sometimes requires unconventional execution. world-class technology and CFD knowledge to ensure fuel Innovation is not constrained by national borders, and neither system design optimization. Due to the range and size of is world-class engineering talent. Now more than ever, the calculations required, supercomputing technology with innovation is unbounded. Fast computers, bright engineers multi CPU high performance capabilities was essential. As a and a virtual digital design environment enable innovation, developing EADS Strategic Supplier (E2S), Tata Technologies solving complex problems at the speed of light. is a preferred engineering services supplier for fuel systems design. The Opportunity: “Our ability to provide offshoring solutions to complex Airbus’ paramount responsibility is to ensure the safety of engineering problems on a global basis with high standard millions of passengers who board its airplanes every day. processes and state-of-the-art computing technology is Every potential compromise to this objective requires various what aircraft manufacturers require,” says Ian Todd, Tata engineered solutions and analysis to mitigate the risk. Technologies Client Services Executive for Airbus. Every commercial aircraft has a complex fuel system design configuration consisting of fuel tanks, fuel lines, pumps, The Innovation: filters, vapor return lines, fuel system vents and evaporate Through the use of the EKA supercomputer located on the emission control systems that provide fuel supply and fuel Tata Technologies campus in Pune, India, and with support metering. of a 10 man Indian CFD team, new fuel system designs that predicted the mix of species within the fuel tank for safe flight Passenger safety requires a reliable fuel system. Key factors conditions were provided to Airbus. are the predictability of the oxygen level in the tank combined with the fuel flow structure.Fortunately, computational fluid The innovative engineered solution required performing dynamics analysis technology and expertscan provide the millions of calculations with 64-bit computing on data sets BETTER INNOVATION that is so valuable in such a critical approaching 2 terabytes in size and run times exceeding situation. 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. XI | Sixteenth Annual Report 2009-10
  15. 15. ³,QQRYDWLRQ LQ 6DIHW DQG 5HOLDELOLW´ | XII
  16. 16. CLIENT INNOVATION PROFILE: FORD MOTOR COMPANY “iGETIT has helped our company capture, centralize and cost effectively deliver theFAST FACTS: NQRZOHGJH QHFHVVDU WR GHVLJQ DQG EXLOGCompany: Ford Motor CompanyIndustry: Automotive FDUV JOREDOO´Location: United States | Pete Lamoureux,Employees: 176,000 Digital Innovation Manager, FordRevenues [USD] $118 billion The Innovation: Beginning in 2008, Tata Technologies deployed at Ford its Innovation Perspective: own commercially [with a user base of over 120,000 users] It has been said that learning and innovation go hand in developed knowledge-management solution called iGETIT®. hand, and sometimes the arrogance of success is to think that Ford implemented this innovative software-as-a-service what you did yesterday will be sufficient for tomorrow. The application behind its IT systems firewall using iGETIT’s business landscape is scattered with casualties of those who standard development toolkit to customize the program to thought that way. But to those who know that knowledge enable role-based access to Ford employees and suppliers is renewable and that learning is essential for all of life, anywhere, any time. Early on, Ford understood the value of innovation is inevitable. knowledge management that delivers the right information to the right people to enable better product development The Opportunity: innovation, says John Lopez, Client Relationship Executive for Ford Motor Company. When a company of 176,000 employees with manufacturing operations in 80 countries worldwide makes a decision to With its common look and feel, the system helps more than centralize its engineering best practices and manufacturing 7,000 Ford personnel and employees from nearly 100 Tier One processes on a global basis, the implications are serious and suppliers design and build cars though Ford specific methods. far reaching for the company itself and its supply chain. This Through a single web logon, important information relative was the case for Ford Motor Company in 2008 while it was in to new standards, processes, best practices are available to the process of reorganizing its business in the midst of the design and manufacturing engineers with different roles. global economic downturn. Tata Technologies’ innovation is helping Ford engineers gain access to knowledge that will in turn make them more The Challenge: innovative. Ford owned many different systems that created, managed “iGETIT has helped our company capture, centralize and cost- and delivered its knowledge [i.e., engineering/manufacturing effectively deliver the knowledge necessary to design and methods, best practices] and processes on a global scale. build cars globally,” says Pete Lamoureux, Digital Innovation What was lacking was centralization that enables common Manager, Ford. “iGETIT enables common methods and access, awareness based on individual and departmental processes to be shared and better understood which in roles, validation of knowledge that should be disseminated, turn helps support our global programs and platform capture and collection of new knowledge, and finally, delivery development and manufacturing.” of knowledge to a vast global organization. Underpinning those requirements was the need for a cost-effective solution that met all of these requirements. XIII | Sixteenth Annual Report 2009-10
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  18. 18. CLIENT INNOVATION PROFILE: JAGUAR LAND ROVER “The highest degree of transparency andFAST FACTS: WKH XOWLPDWH LQ ÀH[LELOLW KDV EHHQ RXUCompany: Jaguar Land Rover experience and the cornerstone of ourIndustry: AutomotiveLocation: Europe VWUDWHJLF SDUWQHUVKLS IRU VHYHUDO HDUV´Employees: 16,000Revenues [USD] $7.5 billion | Jeremy Vincent KLHI ,QIRUPDWLRQ 2I¿FHU RI -/5 Innovation Perspective: The Challenge: Innovation is often times a solution to a problem that no one is Jaguar Land Rover operates a comprehensive sales network looking to solve. Instinctively, one may think there has to be a for distribution of all of its new vehicles to 63 countries. Every better way of doing something, but that doesn’t always serve event related to the selection, procurement, distribution as the motivation to figuring out what that better way is. And and client sale must be tracked and risk-managed to drive that’s when an entrepreneurial approach to problem solving optimal results. Each national sales network component balanced with a systematic mode of execution becomes the has fluctuating business conditions that affect the financial basis for an intelligent and innovative commercial model. bottom-line of each respective sales company network. The challenge was to design an IT services support solution that The Opportunity: enabled overall scalability and flexibility to the national sales companies. 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 The Innovation: its business. Non-core business activities are routinely Developing a commercial model for JLR that enabled a outsourced to best-in-class providers in order to manage high-degree of transparency resulted in the package and cost, increase flexibility and to better serve JLR clients. implementation of SAP support services to the network of One of the many ways that Tata Technologies is helping JLR national sales companies. “Our willingness to innovate a transform its business is through the ongoing deployment modular, consumption-based solution for use around SAP of application management services across many types application managed services was very different from the of software tools, including PLM and ERP. These business previous deployments,” says Richard Welford, Vice President opportunities are not always easily discernable at first glance of Automotive Europe and responsible for Global Services and sometimes are not self-evident. Transformative business business development at JLR. “Now more than ever, large innovation opportunities require thorough investigation and organizations need to operate with the speed and agility of a highly consultative approach to crafting the right solution. small entrepreneurial companies, and we are collaborating Best solutions are usually driven by entrepreneurial creativity with JLR to meet that challenge.” balanced with an eye toward organizational process “What you see is what you get with Tata Technologies. The scalability. 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. XV | Sixteenth Annual Report 2009-10
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  20. 20. CLIENT INNOVATION PROFILE: TATA MOTORS The Challenge:FAST FACTS: When the inspiration for the Tata Nano was conceived,Company: Tata Motors every conventional approach to vehicle design was inIndustry: AutomobilesLocation: India question, in order to conform to the vision of achievingEmployees: 24,000 safe, affordable transportation. Every aspect of the vehicleRevenues [USD] $14 billion 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 Innovation Perspective: one of the greatest challenges ever taken on by any company in the automotive industry, and we are very pleased to have Revolutionary innovation is almost always the result of been a key partner to Tata Motors in making the dream inspiration underpinned by resolve and commitment. History become a reality for potentially millions of families,” says is replete with extraordinary examples of revolutionary Patrick McGoldrick, CEO – Tata Technologies. innovations including Henry Ford’s Model T, the Wright brothers’ airplane, Thomas Edison’s incandescent light bulb The Innovation: and Alexander Graham Bell’s telephone. Each innovation has served as a catalyst to improve the quality of life for the Tata Technologies proudly provided nearly 100 engineers to common person and has subsequently changed human the Nano project, resulting in 18 patents filed on behalf of Tata history. Motors. The majority of the computational fluid dynamics (CDF) analysis for vehicle aerodynamics, under-hood and The Opportunity: powertrain cooling were conducted by Tata Technologies. Additional CFD analysis for vehicle handling, crash and Sometimes opportunity arises out of doing what is right durability, and HVAC were managed to ensure passenger for the common good. This mindset is what served as the comfort and safety. 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 The Company was responsible for delivering a frugal scooter in inclement weather. This incident served as the engineering approach to the development of several major impetus and the inspiration to develop transportation for systems including new engine design, chassis design, fuel families in India who could not otherwise afford the lowest- systems, brake systems, suspension, steering and wheels/ cost vehicles there. tires. Digital Manufacturing technology and best practices were implemented to optimize plant configuration Initially, a small team of four young engineers was assembled and productivity. As the chief digital design integrator, and they were challenged to investigate what seemed like the Tata Technologies played a key role in the supply chain impossible task; develop safe and affordable transportation collaboration with many of the 100 suppliers to the Nano for $2000. If achieved, this opportunity would change the project. lives of potentially millions of families forever. Three of the four initial members were from the Tata Technologies team. “The promise to produce a $2000 car for India is one of the greatest challenges ever WDNHQ RQ E DQ DXWRPRWLYH FRPSDQ DQG ZH DUH YHU SOHDVHG WR KDYH EHHQ D NH SDUWQHU WR 7DWD 0RWRUV LQ PDNLQJ WKLV GUHDP EHFRPH UHDOLW IRU SRWHQWLDOO PLOOLRQV RI IDPLOLHV´ | Patrick McGoldrick (2 7DWD 7HFKQRORJLHV XVII | Sixteenth Annual Report 2009-10
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  22. 22. CORPORATE SOCIAL RESPONSIBILITYThe mission of the Tata Technologies Corporate Social Responsibility [CSR] program is to make a positive difference in thecommunities in which the Company does business through its support of select programs, outreach efforts and initiatives thatimprove and enhance the quality of life. Our goal is to make things better for the planet, better for people, and better for thecommunities 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. 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.XIX | Sixteenth Annual Report 2009-10
  23. 23. Swine Flu Education PreventionEmployee volunteers from Tata Technologies has organized lectures on the importanceof maintaining personal hygiene and provided this education to every home in thelocal Hinjawadi village. In addition volunteers have financially donated First Aid Kitalong with respiratory masks as one way to combat Swine Flu prevention.Blood Donation DrivesEach year, the Company organises two drives aimed at blood donations. In this pastyear 187 employees donated their blood, which achieved a new company goal throughoverwhelming response from our gardeners, security personnel, housekeeping staff,and contractors. Emergency blood transfusions are made available to the Hinjawadineighboring villagers at no cost because of Tata Technologies employee blooddonations.Community Network Services Inc.The Tata Technologies North America CSR Program closed calendar 2009 with twostrong holiday season efforts. Employees again supported the Adopt-A-Familyprogram administered by CNS of Oakland County. Tata Technologies employeescollected funds and shopped for gifts for underprivileged families, all of which werepresented, along with additional cash donations, to a CNS representative at the annualHoliday Luncheon in December, at the North American headquarters office in Novi,Michigan. CNS is a private, non-profit agency that provides comprehensive health andsocial services to nearly 3,000 individuals in Oakland County, Michigan, home of theTata Technologies North American Headquarters facility.Operation Christmas DropThis initiative was a holiday season effort that had the Denver and Detroit officesteaming up to collect Christmas decorations and gifts to ship to the soldiers of the3rd Battalion, 157th Field Artillery, a unit of the Colorado National Guard, deployedin Ramadi, Iraq and spending the holiday season away from their families and theirhomes. | XX
  24. 24. 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.XXI | Sixteenth Annual Report 2009-10
  25. 25. CSR AwardsOn December 8, 2009, NA CSR Committee work was honored by the Macomb County Services Agency (MCCSA) at its annualCommunity Recognition Luncheon. “On behalf of the MCCSA, we would like to recognize and offer our thanks for the contributionthat Tata Technologies has made to assist the homeless through MCCSA’s Continuum of Care and the Macomb HomelessCoalition,” read the award. CSR Committee members attended to accept the recognition on behalf of all the employees whohave 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 equipmentto support the annual Community Network Services (CNS) “Community Connection Day,” at which employees volunteered theirtime to assist underprivileged individuals and families find affordable health care and housing, food and clothing, and resourcesto assist with employment. In addition, Tata Technologies donated the use of 10 Training Department laptop computers toidentify resources online at the event, held in May 2009. | XXII
  26. 26. BOARD OF DIRECTORS Board of Directors S Ramadorai R Gopalakrishnan P P Kadle Chairman C Ramakrishnan P R McGoldrick CEO Managing Director Company Secretary Anubhav Kapoor Company Auditors Registered Office Registrars Transfer Agents Deloitte Haskins Sells 25, Rajiv Gandhi Infotech Park, TSR Darashaw Limited Hinjawadi, 6-10, Haji Moosa Patrawala Pune - 411 057 Industrial Estate, India 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400011 Tel : 91 22 6656 8484 Fax : 91 22 6656 8494 E-mail: csg-unit@tsrdarashaw.com Website: www.tsrdarashaw.comXXIII | Sixteenth Annual Report 2009-10
  27. 27. NOTICENOTICE 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 Business1 To receive, consider and adopt the Audited Profit and Loss Account for the year ended March 31, 2010 and the Balance Sheet as at that date together with Report of the Directors and Auditors thereon.2 To declare dividend on Equity Shares.3 To appoint a Director in place of Mr 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 conclusion of the next Annual General Meeting of the Company and to authorize the Board of Directors to fix their remuneration. M/s Deloitte Haskins Sells, Chartered Accountants, the retiring auditors are eligible for reappointment.Special Business5. 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 Ordinary Resolution: “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 hereby approves the reappointment of Mr Patrick R McGoldrick, as Managing Director of the Company, for the period from September 1, 2010 to September 08, 2014 on the terms and conditions, as set out in the Explanatory Statement annexed to this Notice.” “RESOLVED FURTHER that notwithstanding anything to the contrary contained herein, where in any financial year during the currency of the tenure of Mr McGoldrick, the Company has no profits or its profits are inadequate, 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 Explanatory Statement.” “RESOLVED FURTHER that the Board of Directors of the Company or a Committee thereof, be and is hereby authorized to alter and vary the terms and conditions of the said reappointment in such manner as may be agreed and to do all such acts, deeds, matters and things as may be necessary, proper and expedient to give effect to this Resolution.”Notes:1. The relative Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Item No. 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 VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.3. The Proxy as per the format given in the Annual Report should be duly filled, stamped, signed and received by the Company at its registered office not less than 48 hours before the time for holding the meeting.4. The Register of Members and the Transfer Books of the Company will be closed from July 06, 2010 to July 09, 2010, both days inclusive.5. The dividend on Equity Shares as recommended by the Directors for the year ended March 31, 2010 if declared will be payable on or after July 20, 2010 in accordance with the Resolution to be passed by the Members of the Company.6. As per the provisions of the Companies Act, 1956, facility for making nominations is available for Members in respect of shares held by them. Nomination Forms can be obtained from the Company’s Registrar and Transfer Agents. 1
  28. 28. Sixteenth Annual Report 2009-10 Tata Technologies Limited 7. Members may please note the contact details of the Company’s Registrar and Transfer Agents, M/s TSR Darashaw Limited, as follows: TSR Darashaw Limited 6-10 Haji Moosa Patrawala Industrial Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011 Tel: +91 22 66568484 Fax: +91 22 66568494 Email: csg-unit@tsrdarashaw.com Website: www.tsrdarashaw.com 8. Members are requested to notify the change in their Address, Bank Details, etc. if any, to the Company’s Registrar and Transfer Agents. Shareholders should quote their folio numbers in all their correspondence with the Company and the Registrar and Transfer Agents. 9. Members’ attention is particularly drawn to the ‘Unclaimed and Unpaid Dividend’ section under ‘General Shareholder Information’ in the Corporate Governance Report. By Order of the Board of Directors Anubhav Kapoor General Counsel and Company Secretary Pune, June 21, 2010 Registered Office: 25, Rajiv Gandhi Infotech Park, Hinjawadi, Pune – 411 0572
  29. 29. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956The 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 September 1, 2005. His present term of appointment expires on August 31, 2010. The Company had also obtained approval from the Central Government vide letter no.12/19/2006-CL. VII dated November 14, 2006 for the above reappointment.2. On the recommendation of the Remuneration Compensation Committee and subject to the approval of 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 of the Company for the period from September 1, 2010 to September 08, 2014 on the same terms and conditions. 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 to the Board, which expression shall include a Committee thereof, to fix the salary within the above maximum amount from time to time. The annual increment will be merit based and take into account the Company’s performance. b. Incentive Remuneration: up to 200% of salary to be paid at the discretion of the Board annually based on certain key performance criteria. c. Further, Mr McGoldrick shall be provided with hotel accommodation and chauffeur driven car during his stay in India and all expenses in connection with the Company’s official business shall be borne by the Company. Expenses incurred on air travel in connection with 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 business will not be considered as perquisites. e. Apart from the above, the Company would not pay any commission to Mr P R McGoldrick and make any contributions to the Provident Fund, Superannuation Fund or Annuity Fund 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 subject to any approvals, if required, where in any financial year during the currency of the tenure of Mr 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 be responsible 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 cause whatsoever, 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 loss of office. c) Mr McGoldrick is appointed by virtue of his employment in the Company and his appointment 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 Agreement with any buying or selling commission. He shall not also become interested or otherwise concerned directly or indirectly, through his relatives or controlled affiliates, in any selling agency of the Company. 3
  30. 30. Sixteenth Annual Report 2009-10 Tata Technologies Limited 3. In compliance with the provisions of Sections 269, 309, 316 and other applicable provisions of the Act, the terms 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 Members of the Company at its Registered Office between 10:00 a.m. to 12:00 noon on any working day of the Company. 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 the Members of the Company. By Order of the Board of Directors Anubhav Kapoor General Counsel and Company Secretary Pune, June 21, 2010 Registered Office: 25, Rajiv Gandhi Infotech Park, Hinjawadi, Pune – 411 0574
  31. 31. DETAILS ABOUT MR R GOPALAKRISHNAN, THE RETIRING DIRECTOR OFFERING HIMSELF FOR RE-APPOINTMENTDate of Birth Age December 25, 1945; 64 yearsDate of Appointment March 08, 2001Qualifications Bachelor’s degree in Science and a B.Tech (Electronics) degree from the Indian Institute of Technology (IIT), Kharagpur.Directorship held in Tata Sons LtdOther 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 LtdMemberships and Chairmanships of Membership of Audit CommitteesAudit/Investor Grievance Committees Tata Chemicals Ltdin other Public Companies ICI India other Public Companies Ltd and Castrol India Ltd Membership of Investor Grievance Committees Tata Motors LtdShareholding 55,000 equity shares of Rs 10 each in the Company (0.15% of the Paid-up capital) as on March 31, 2010. 5
  32. 32. Sixteenth Annual Report 2009-10 Tata Technologies Limited 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 your Company 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 significant challenges. 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 registered an 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 last year to reach figures of Rs 342.93 crore and Rs 39.46 crore respectively. The services revenue comprises Engineering 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 stages of the product development and manufacturing process. ESG addresses the Information Technology needs of manufacturers including business solutions, strategic consulting, ERP implementation, systems integration, IT networking and infrastructure solutions and program management. PLM addresses the product development technology solution requirements of manufacturers including end-to-end implementation of PLM technology, best practices and PLM consulting. PLM also includes the Company’s proprietary applications iGETIT® and iCHECKIT. Revenue from delivery centers grew by 13.45% from Rs 91 crore in 2008-09 to Rs 103.24 crore in the year 2009-10.6
  33. 33. 3. DIVIDEND The Board recommends a dividend of Rs 7/- per share, for the financial year 2009-10 on a pro-rata basis. The total 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, sales and delivery of value to its customers. As such it is seeing improved order bookings. Should the recovery continue, the Company expects improved growth in revenue, EBITDA and profit after tax. Should the economic recovery falter, the Company would still expect continued year-on-year growth in profit after tax given the Company’s cash reserves and improvements in operating efficiencies. Please refer the section on Management Discussion and Analysis for more information.5. CHANGES IN SHARE CAPITAL During the year, the following changes have occurred in the authorized and the paid-up equity share capital of the Company: a) The authorized share capital of the Company was increased from Rs 50 crore divided into 5,00,00,000 shares of Rs 10/- each to Rs 60.70 crore divided into 6,00,00,000 equity shares of Rs 10/- each and 7,00,000 0.01% cumulative non-participative compulsorily convertible preference shares of Rs 10/- each. b) 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 promoted and implemented various stock based incentive and ownership schemes from time to time. The details for the last year are provided in Annexure I to this report.6. REDUCTION OF SECURITIES PREMIUM ACCOUNT The Company has been taking many initiatives to restructure its operations with a view to keeping abreast of global trends for its products and technologies thereby improving its financial performance. As part of its operational efficiency exercises, Company appointed consultants to review the global business operations, the integration process of European operations and the existing human resources policies. In the course, the Company also felt it prudent to undertake a financial restructuring exercise to enhance shareholder value through improvement in future profitability and consequent increase in Earnings per Share and Return on Capital Employed. The restructuring will also help the Company to represent better operational 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 other applicable provisions, if any, of the Companies Act, 1956, Article 69 of the Articles of Association of the Company and subject to the confirmation of the Hon’ble High Court of Judicature at Bombay, the Shareholders of the Company at the Extra-Ordinary General Meeting held on March 5, 2010 approved utilisation of a sum up to Rs 59.42 crore presently standing to the credit of the Securities Premium Account of 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 of Rs 17.32 crore relating to the Company and amount of Rs 29.34 crore relating to subsidiary companies have been adjusted to the Securities Premium Account. As a result, an amount of Rs 46.66 crore has been adjusted against the securities premium account in the consolidated financial statements of the Company for the year ended March 31, 2010.7. HUMAN RESOURCE DEVELOPMENT The Company had 2901 professionals, including permanent and contractual, as on March 31, 2010. The Company and its subsidiaries overall had 4036 professionals located in 14 countries on three continents representing 27 different nations. The Company’s philosophy is to staff and manage country organization with the citizens of those countries. This allows keeping decision making closer to the customers the 7
  34. 34. Sixteenth Annual Report 2009-10 Tata Technologies Limited Company serves. The Company continued with its focus on attracting and retaining the best talent in the industry. During the period, the Company added 885 employees overall, increasing its total strength beyond 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 HR strategy include: attracting retaining the best talent, becoming Employer of Choice and building robust HR capability model for growth and sustenance of the business. The key factors of workforce engagement and satisfaction are determined through various HR initiatives such 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 Employee Briefing sessions (held simultaneously across all geographies and locations) coupled with ‘Open House’, a quarterly briefing session used by the Tata Technologies leadership team to disseminate latest information and updates about the Company followed by an open forum for employees. Tata Technologies fosters a high performance culture through various workforce practices that distinguishes and recognizes good performers through the newly introduced web enabled global application Performance Assessment Competency Enhancement and provides structured feedback and development through Performance Improvement Plan for those requiring improvements. The Talent Management Process focuses on identifying, developing and retaining the high potential employee in the Company through structured learning, deployment to niche global assignment and faster growth while the LEAD program 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 motivational initiatives. ‘iGETIT’, a web based interactive self paced learning tool has been introduced to augment workforce learning initiative for the global employee base. The tool is used for Induction of new joinees which has helped not only in standardizing across geographies, but also improved productivity. The other modules available on iGETIT are Tata Business Excellence Model, Tata Code of Conduct, Quality and process and other programs on upgrading specific functional, domain, and technical expertise as identified by the delivery organization. 8. CORPORATE SUSTAINABILITY Corporate Sustainability has been a cornerstone of the Tata philosophy from the beginning. Last year, the Tata Technologies Corporate Sustainability Program (CSP) made a positive impact on the communities the Company serves through Company’s support of select programs, outreach efforts and initiatives that improve and enhance the quality of life. The Company’s goal had been, and remains, to make things better for people, better for business, better now, and better for the future. Tata Technologies employees in all geographies 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 G Blood donation and eye donation camps. G Awareness campaign for empowerment of women, distribution of School Kits, employees teaching kids at schools in villages. G “Safety Ryodan” initiative for road safety and traffic situation. G Participation in awareness campaign on cyber safety and information security. G Talent Search Program – Painting, Dance and Music competitions. G Tree plantation programs. G Donations for physically and mentally challenged people and contingency fund collection for natural calamities. G The Singapore entity supported the Singapore Space Challenge 2010 by providing training and support on CATIA to all participants. The event was organized by Singapore Space and Technology Association (SSTA) for intensifying arospace education in Singapore.8
  35. 35. North America G Community Network Services (CNS) in Michigan: Supported the annual “Adopt-a-Family” program. Arranged gifts for underprivileged families. G Christmas decorations and gifts for shipping to the US soldiers in Iraq. G Employees volunteered to support the Macomb Homeless Coalition programs in Michigan. G US CSR Team was recognized with a ‘Platinum Award’ for the contributions of time and equipment to support the annual Community Network Services (CNS), ‘Community Connection Day’. Europe G The UK CSR Committee organized an “Easter Eggstravaganza” Easter celebration for children confined , to hospital. G 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 initiatives under it. A Corporate Sustainability Committee has been formed to advise on CSP initiatives of the Company 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 the acquisition of INCAT, the Company participated as a single entity representing all geographies, in the Tata Business Excellence Model ( TBEM) external assessment. The organization was assessed at the “Early Improvement” score band on the Business Excellence journey, moving up from “Early Results” score band of 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 achieve 75 plus points improvement in one year. In the spirit of continuous improvement, the Company intends to move further up on the score band in the 2010 external assessment. A detailed action plan has been made based on the outcomes of the assessment and is being monitored by the ‘Office of Strategic Management’ from the Managing Director and COO’s office. In the 2010 external assessment, the Company will also be assessed on its corporate governance 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 achieved ISO 27001 certification. This is a major milestone that demonstrates the organization’s ability to secure customer and business-related information. The Quality Management System (QMS) of the organization successfully cleared surveillance audits mandated 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 being rolled out in a phased manner. GEM is a key component of the QMS. It streamlines operations, helps establish a robust onsite – offshore interface, provides metrics for monitoring projects and facilitates implementation 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. 9

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