Tata Elxsi Ltd

TO THE MEMBERS OF TATA ELXSI LIMITED

1. Your Directors are pleased to present the Thirty Sixth Integrated Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31, 2025.

2. FINANCIAL SUMMARY

The highlights of financial performance of the Company, for the financial year ended March 31, 2025, are summarised hereunder:

' in crores

3. REVIEW OF OPERATIONS AND PERFORMANCE

The total income during the year under review increased by 6.40% which stood at Rs 3,908.36 as against Rs 3,674.10 crores in the previous financial year. The Profit Before Tax (PBT) was Rs 1,028.40 crores as against Rs 1,048.68 crores in the previous year. The Profit After Tax (PAT) was Rs 784.94 crores as against Rs 792.24 crores in the previous financial year.

4. DIVIDEND

The Board of Directors are pleased to recommend a dividend of Rs 75 per share (750%) subject to tax, for the financial year ended March 31, 2025, on 6,22,84,124 equity shares of Rs 10 each fully

paid-up, in comparison to Rs 70 per share (700%) on 6,22,76,440 equity shares of Rs 10 each fully paid-up in the previous financial year.

The said dividend on equity shares is subject to the approval of the Members at the ensuing Annual General Meeting ("AGM") scheduled to be held on June 25, 2025. If approved, this will involve an outflow of Rs 467.13 crores, compared to Rs 435.94 crores, in the previous year. According to the Finance Act, 2020, dividend income will be taxable in the hands of the Members w.e.f. April 01, 2020, and the Company is required to deduct tax at source from the dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

The Company's Dividend Distribution Policy, as adopted in line with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations" or "SEBI Listing Regulations") is available on the website of the Company at the link: https://www.tataelxsi. com/investors/policies-and-disclosures.

5. TRANSFER TO RESERVES

Your Directors have approved a transfer of Rs 10 crores to the General Reserves for the financial year ended March 31, 2025, as against an amount of Rs 10 crores transferred in the previous financial year.

6. SHARE CAPITAL

As on March 31, 2025, the authorised share capital of the Company consisted of 7,00,00,000 equity shares of Rs 10 each. During the year under review, there was an increase in paid up equity share capital of the Company. The Company had issued and allotted 7,684 equity shares with a face value of Rs 10 each, consequent to exercise of the Performance Stock Option by the eligible employees of the Company. The paid-up equity share capital stands at Rs 62,28,41,240 comprising of 6,22,84,124 equity shares of Rs 10 each fully paid up as on March 31, 2025.

7. TATA ELXSI LIMITED PERFORMANCE STOCK OPTION PLAN 2023

Pursuant to the approval of the Members vide special resolution passed through Postal Ballot on March 04, 2023, the Company had adopted and implemented the "Tata Elxsi Limited Performance Stock Option Plan 2023" (hereinafter referred to as "PSOP 2023" or "the Plan"), for grant of 3,11,000 fully paid equity shares of Rs 10 (Rupees Ten Only), representing 0.50% of the issued share capital of the Company to the eligible employees of the Company.

The Plan is intended to reward, motivate and retain the Eligible Employees of the Company as defined in the PSOP 2023, (hereinafter

collectively referred to as 'eligible employees') for their performance and participation in the growth and profitability of the Company. The said initiative to link the employee's performance in the Company along with other initiatives would contribute to improve the performance of the Company. The Plan has been formulated in accordance with the provisions of the Companies Act, 2013 ('the Act') and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB&SE Regulations") and during the year under review, there was no change in terms of PSOP 2023.

The eligible employees shall be granted Performance Stock Options (PSOP), as determined by the Nomination and Remuneration Committee of the Board, which will vest as per the approved vesting schedule and are be exercisable into fully paid-up equity shares of Rs 10 (Rupees Ten Only) each of the Company, on the terms and conditions as provided under the Plan, in accordance with the provisions of the applicable laws and regulations for the time being in force.

During the year under review, the Nomination and Remuneration Committee approved a grant of 43,169 stock options to eligible employees of the Company as per the terms and conditions of the Plan. No employee was granted stock options equal to or exceeding 1% of the issued share capital of the Company. The vesting period for the stock options granted under the PSOP 2023 shall not be less than one year and all the stock options would vest, based on the and conditions as detailed out in the Plan.

The statutory disclosures as mandated under the Act and SBEB&SE Regulations and a certificate from the Secretarial Auditor, confirming implementation of the Plan in accordance with SBEB&SE Regulations and shareholder's resolution have been hosted on the website of the Company at https://www.tataelxsi.com/ investors/policies-and-disclosures and will be available for electronic inspection by the Members during the AGM of the Company. Members desirous of inspecting the certificate, may follow the procedure listed down in the Notes to the Notice of the Annual General Meeting.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2025, the Board of the Company comprised of six (6) Directors, with three (3) Non-Executive Independent Directors, two (2) Non-Executive Non-Independent Directors and one (1) Executive Director. The details of the Board composition including the profile of the Directors are available in the Corporate Governance Report section of the Annual Report. During the year under review, on account of completion of their term as Independent Director(s) of the Company, Mrs. Shyamala Gopinath (DIN: 02362921) and Mr. Sudhakar Rao (DIN: 00267211) ceased to be Independent Director(s) of the Company effective June 20, 2024 and September 02, 2024, respectively. The Board of the Company placed on record their appreciation for the valuable contribution and guidance rendered by Mrs. Shyamala Gopinath and Mr. Sudhakar Rao during their tenure as Members of the Board.

During the year under review, Mr. Soumitra Bhattacharya (DIN: 02783243) and Ms. Ashu Suyash (DIN: 00494515), were appointed as Independent Director(s) of the Company for a term of 5 (five) consecutive years with effect from April 04, 2024 up to April 03, 2029. Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of Directors, considered and approved the re-appointment of Prof. Anurag Kumar (DIN: 03403112), as Non-Executive Independent Director for second term commencing from November 15, 2025 up to July 12, 2030, subject to the approval of the Members of the Company

at the ensuing AGM. Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. N. Ganapathy Subramaniam, Non-Executive Director (DIN:07006215), retires by rotation and being eligible, offers himself for re-appointment. During the year under review, six (6) Board meetings were held on April 03, 2024,

April 23, 2024, July 10, 2024, October 10, 2024, January 09, 2025 and January 31, 2025, respectively. Further details of the Board Meeting and Committee Meetings including the attendance of the Directors are provided in the Corporate Governance Report forming part of this Annual Report. The calendar of meetings for FY 2024-25 had been circulated to all the directors in advance detailing the schedule of Board and Committee meetings during the FY 2024-25.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. The Directors have further confirmed that they are not debarred from holding the office of the director under any SEBI Order or any other such authority. During the FY 2024-25, there has been no change in the circumstances affecting their status as Independent Directors of the Company. Pursuant to Clause VII (1) of Schedule IV of the Act, a separate meeting of the Independent Directors was held on April 22, 2024.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2025 are Mr. Manoj Raghavan, Managing Director & CEO; Mr. Gaurav Bajaj, Chief Financial Officer and Ms. Cauveri Sriram, Company Secretary & Compliance Officer.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2024-25.

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

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

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

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

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

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

10. PARTICULARS ON REMUNERATION

The statement containing particulars of the top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197(12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.

The particulars pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure A.

11. PERFORMANCE EVALUATION

The Company has laid down a process for performance evaluation of the Board and its Committees as well as a framework for evaluation of the performance of each of its Directors. The evaluation criteria include, inter alia, structure of the Board, qualifications, experience and competency of Directors, diversity in Board, effectiveness of the Board process, information and functioning, Board culture and dynamics, quality of relationship between the Board and management, meetings of the Board, including regularity and frequency, discussion and dissent, corporate culture and values, governance and compliance, evaluation of risk amongst others.

The criteria is based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. The evaluation process is conducted and monitored by the Chairperson, Nomination & Remuneration Committee ('NRC') in consultation with the members of the Committee. Upon the receipt of feedback from Directors, the Chairperson, NRC conducts a one-to-one meeting with the Members. Thereafter, the Chairperson, NRC briefs the Chairman of the Board on the outcome, which in subsequently discussed at the Board Meeting. For the FY 2024-25, the performance evaluation has been conducted as per the process adopted by the Company, which is detailed out above.

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 and Schedule V of the Listing Regulations, a separate section on Management Discussion and Analysis Report is annexed to the Directors' Report.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars pursuant to Section 134(m) of the Act and read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure B.

14. INTEGRATED REPORT

The Integrated Report of the Company is prepared in accordance with the International Integrated Reporting (IR) framework published by the Value Reporting Foundation (VRF) which reflects the Company's approach to its value creation. This report aims to provide a holistic view of the Company's strategy, governance and performance, and how they work together to create value over the short, medium and long term for our stakeholders. The narrative section of the Integrated Report is guided by the

Integrated Reporting (IR) framework outlined by the International Integrated Reporting Council (IIRC).

15. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

In terms of Regulation 34(2) (f) of Listing Regulations the Business Responsibility and Sustainability Report, in the prescribed format, forms an Integral Part of the Annual Report. An assurance report on the sustainability disclosures in the Business Responsibility and Sustainability Reporting for the financial year 2024-25 is a part of BRSR. This assurance report has been issued vide SEBI circular number SEBI/HO/CFD/CFDSEC-2/P/CIR/2023/122 dated July 12, 2023.

16. CORPORATE GOVERNANCE

In terms of Regulation 34(3) of the Listing Regulations, the Corporate Governance Report, Management Discussion & Analysis Report, and the Auditors' Certificate regarding Compliance to Corporate Governance requirements forms part of this Annual Report.

17. CORPORATE SOCIAL RESPONSIBILITY

In line with Section 135 of the Act read with applicable rules made thereunder, Corporate Social Responsibility (CSR) Committee has been constituted for the purposes of recommending and monitoring the CSR initiatives of the Company.

The Board, based on the recommendation of the CSR Committee, has formulated and adopted a CSR Policy, in line with Section 135 of the Act read with the applicable rules made thereunder, which is available on the website of the Company at www.tataelxsi.com/investors/policies-and- disclosures.

The CSR objectives are designed to serve societal, local and national goals in the locations we operate, create a significant and sustained impact on local communities and provide opportunities for our employees to contribute to these efforts through volunteering.

The Annual Report on the CSR initiatives undertaken by the Company as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) including the reasons for not utilising the complete amount for CSR as approved by the CSR Committee, is annexed to this Report as Annexure C. The details relating to the composition of the CSR Committee is provided in the Corporate Governance Report, forming part of this Annual Report.

18. RISK MANAGEMENT POLICY

The Board has adopted a Risk Management Policy to identify and categorise various risks, implement measures to minimise impact of these risks where it is deemed necessary and possible, and a process to monitor them on a regular basis including to review and monitor the cyber security measure. Further details on the Risk Management Framework is provided in the Corporate Governance Report, forming part of the Annual Report.

19. DEPOSITS FROM PUBLIC

During the year under review, the Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

20. LOANS, INVESTMENTS AND GUARANTEES

During the year under review, there were no loans, guarantees and investments made by the Company under Section 186 of the Act.

21. AUDIT COMMITTEE

The Company has constituted an Audit Committee in compliance with Section 177 of the Act and Regulation 18 of the Listing Regulations.

The Composition of the Audit Committee in terms of Section 177(8) along with its terms of reference incorporating its functions are provided in the Corporate Governance Report forming part of the Annual Report.

During the year under review, there were no such instances where the Board has not accepted the recommendations of the Audit Committee.

22. RELATED PARTY TRANSACTIONS

During the year under review, all the Related Party Transactions were entered at arm's length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations.

Pursuant to Section 188 of the Act read with rules made thereunder and Regulation 23 of the Listing Regulations, all Material Related Party Transactions ("material RPTs") require prior approval of the shareholders of the Company vide ordinary resolution.

Accordingly, the Members of the Company had, inter alia, approved Material RPTs of the Company with Jaguar Land Rover Limited, UK ("JLR") for an aggregate amount not exceeding Rs 1,000 crores for the FY 2024-25. Further, during the FY 2025-26, the Company proposes to enter into material RPTs with Jaguar Land Rover Limited, UK, for an amount not exceeding Rs 1,200 crores, subject to approval of the shareholders of the Company at the ensuing AGM.

The Company has formulated and adopted a policy on dealing with related party transactions, in line with Regulation 23 of the Listing Regulations, which is available on the website of the Company at https://www.tataelxsi.com/ investors/policies-and-disclosures.

As a part of the mandate under the Listing Regulations and the terms of reference, the Audit Committee undertakes quarterly review of related party transactions entered into by the Company with its related parties. Pursuant to Regulation 23 of Listing Regulations and Section 177 of the Act, the Audit Committee has granted omnibus approval in respect of transactions which are repetitive in nature, which may or may not be foreseen, not exceeding the limits specified thereunder. The transactions under the purview of omnibus approval are reviewed on quarterly basis by the Audit Committee. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the disclosures on Related Party Transactions in prescribed format with the Stock Exchanges.

Pursuant to Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of contracts/arrangements entered with related parties in prescribed Form AOC-2, is annexed to this Report as Annexure D.

23.1.STATUTORY AUDITORS AND THEIR REPORT

The Members of the Company at the 33^rd AGM held on June 23, 2022, approved the appointment of M/s. BSR & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W - 100022) as the Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of the 33^rd AGM, until the conclusion of the 38^th AGM of the Company to be held in 2027.

The report issued by Statutory Auditors for financial year 2024-25 does not contain any qualifications or adverse remarks. The Statutory Auditors have not reported any frauds under Section 143(12) of the Act.

23.2.SECRETARIAL AUDIT AND REPORT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Jayashree Parthasarathy

of M/s. Jayashree Parthasarathy & Co., Company Secretary in Practice, was appointed to undertake the Secretarial Audit for the FY 2024-25.

The Report of the Secretarial Auditor along with the certificate of non-disqualification of Directors for the year ended March 31, 2025, is annexed to this Report as Annexure E. The Report issued by Secretarial Auditor for the FY 2024-25 does not contain any qualifications or adverse remarks.

24. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2024-25 is available on Company's website at https://www.tataelxsi.com/investors/ policies- and-disclosures.

25. VIGIL MECHANISM

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

To this effect, the Board has adopted a 'Whistle Blower Policy' (WBP), which is overseen by the Audit Committee. The Policy inter alia provides safeguards against victimisation of the Whistle Blower, Employees and other Stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review. The same is available on Company's website at https://www.tataelxsi.com/investors/ policies- and-disclosures.

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

26. COST RECORDS

Considering the services rendered by the Company, the Central Government has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 and hence, there was no Cost Auditor appointed by the Company during the year under review.

27. PREVENTION OF SEXUAL HARASSMENT

Your Company has zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and the Rules made thereunder for prevention and redressal of complaints under the above Act. The Company has constituted an Internal Complaints Committee under the POSH Act. The following no. of complaints were received under the POSH Act and the rules framed thereunder during the year:

a. number of complaints filed during the financial year - 2

b. number of complaints disposed of during the financial year - 3*

c. number of complaints pending as on end of the financial year - 0

*Pertained to a complaint filed in FY 2023-24, on which investigation which has been completed and grievance redressed during the FY 2024-25.

28. OTHERS

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

> There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

> There are no instances where your Company required the valuation for one time settlement or while taking the loan from any Banks or Financial Institutions.

> The Company does not have any subsidiary, associate or joint venture as on the date of this Report.

> The details regarding remittance of Unclaimed Dividend to Investors' Education & Protection Fund (IEPF) for financial year 2017-18 and thereafter in terms of Section 125 of the Act and are provided in the Corporate Governance Report forming part of the Annual Report.

29. SECRETARIAL STANDARDS

Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

30. ACKNOWLEDGEMENTS

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