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Tata Capital Limited

AnnualReport


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About Us

Tata Capital Limited is a subsidiary of Tata Sons

Limited. The Company is registered with theReserve Bank of India as a Systemically

Important Non Deposit Accepting Core

Investment Company.

A trusted and customer centric one-stop

financial services provider, Tata Capital Limited,

and its subsidiaries cater to the diverse needs

of retail, corporate and institutional customers

by offering a wide range of fund and fee based

financial services.


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Our Vision

Our Mission

The most admired financial solutions partner.

Our philosophy is rooted in the Tata Groups core

values: Integrity, Understanding, Unity, Excellence

and Responsibility.

To exemplify these core values in the financial

sector and become the leading financial solutions

partner in India, with a global footprint.

To become a pioneering and forward-lookingorganization that is collaborative, nimble,

innovative and responsive to the changing

financial needs of our clients.

To be a reliable and a result-oriented custodian of

our clients finances.

To create an amicable atmosphere of

collaboration, understanding and unity.

To ensure happy, motivated and engaged

employees.

To be trusted, admired and respected amongst all

our stakeholders: clients, employees, regulators,

shareholders and the community at large.

To achieve our vision by only doing whats right.


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We choose to put our customers interest

above ours and fulfill their needs first.

We choose to use our expertise to get the best

results for our customers.

We choose to innovate and come up with new

ways to fulfill our customers needs.

We choose to make promises we can keep

and keep the ones we have made.

We choose to believe that we enrich our

customers and not just make them rich.

We choose to be humble and courteous with

everyone who walks through our doors.

We choose to respect our customers and

colleagues and in turn gain their respect.

We choose to earn our stakeholders trust and

not just expect it.

We choose to let not just our expertise but our

conscience lead us.

We believe our choices make us who we are.

So we choose to do only what is right.

And nothing less.

Our Promise

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We, at Tata Capital, believe that corporate

sustainability is a cornerstone for businessoperations. A socially responsible and

committed organization, Tata Capital has

always made sincere efforts to protect the

interests of all stakeholders and contribute to

society.

With a view to making a meaningful and

positive contribution, we have identified four

key areas. These are:

Livelihood & Employability | Health |Education | Environment

Corporate Sustainability

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*Brought to you by Tata Capital Housing Finance Limited, a wholly-owned subsidiary of Tata Capital Limited.

Tata Capital Housing Finance Limited, offers

customers Home Loans* with attractive

interest rates, quick disbursement and minimal

paper-work. So, when they have found the home

of their dreams, they can avail the right home

loan with us.

Live free in your own home.

Tata Capital Home Loans.

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*Brought to you by Tata Capital Financial Services Limited, a wholly-owned subsidiary of Tata Capital Limited.

Happiness comes on wheels.

Tata Capital Auto Loans.

We provide Auto Loans* for the purchase of

new and used cars. With unique schemes

based on low EMIs, low margin money,

attractive rates of interest and quick

disbursal, our customers can be assured of

a pleasant journey right from the start to

the final installment.

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Two wheels give you freedom.

Tata Capital Two Wheeler Loans.

We understand that owning a vehicle is about

gaining independence. Our Two Wheeler Loan*

offers our customers a chance to own their

own vehicle with minimal paper-work, faster

processing and attractive interest rates.

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All your desires,

now within your reach.

Tata Capital Personal Loans.

Be it a business or personal need, we give you

financial assistance to help you fulfill your

dreams. With transparent terms, simple

paper-work and faster processing, we make

getting a Personal Loan* easy.

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We understand that the dream of every

entrepreneur is to expand and grow his

business. Tata Capital Business Loans* help

our customers meet their business needs

with customised financial solutions.

Solutions to expand

your business.

Tata Capital Business Loans.

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Bringing comfort within reach.

Tata Capital Consumer Durable Loans.

Our customers are the center of our world

and we offer a wide range of products to

make sure that their world is comfortable.

We offer our customers Consumer

Durable Loans* with flexible and attractive

EMI options, minimal paper-work and quick

disbursement.

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Our Loans Against Securities* offering doubles

the benefits our customers enjoy from equity

or mutual fund investments. It allows our

customers to get a loan against the securities

they hold, as well as earn returns from them.

Get double benefits on

your investments.

Tata Capital Loans Against Securities.

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*Brought to you by Tata Capital Financial Services Limited and Tata Capital Housing Finance Limited, wholly-owned subsidiaries of Tata Capital Limited.

Let your home

give you bigger rewards.

Tata Capital Loans Against Property.

Our customers can get greater rewards on their

property with our Loans Against Property*

offering. With attractive interest rates,

transparency in dealings, quick disbursement

and minimal paper-work, we take our

customers a step closer towards maximizing

returns on their property.

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We provide equity broking services* to our

institutional and retail customers. With a

strong research and execution team and

uncompromising ethical standards, Tata

Securities strives to work in the interest of its

customers and has successfully built a

franchise of strong relations.

Trusted solutions

in every market condition.

Tata Securities Equity Broking.

*Brought to you by Tata Securities Limited, Regd Office: One Forbes, Dr V B Gandhi Marg, Fort, Mumbai 400 001. Tel No. 67459000, a wholly-ownedsubsidiary of Tata Capital Limited, Member BSE. SEBI Registration No. BSE Cash-INB010664150. BSE Derivative-INF011207954. DP CDSL. SEBIRegistration No. IN-DP-CDSL-450-2008. Member NSE, SEBI Registration No. INB/F/E231288730. DP NSDL SEBI Registration No. IN-DP-NSDL-298-2008.ARN 0021.Merchant Banker. SEBI Registration No.INM000011302.

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We believe that everyone has dreams and

aspirations that are individual to them. From

owning a beautiful home, to world travel, to

childrens education, to a comfortable retired

life, dreams take many forms. But whatever our

customers dreams are, we take them a step

closer by providing investment solutions,

customized to suit their needs.

Listening to the right advice

makes all the difference.

Tata Capital Investment Services*.


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When you are in safe hands,

there are no second thoughts.

Tata Capital Wealth Management.

Whether it is selecting the right investment

opportunity, growing a financial portfolio or

building a retirement nest, our team guides our

customers at every step. Backed with strong

research capabilities and a deep understanding

of our customers, our centralized advisory

team helps recommend a customized financial

strategy that is right for them.

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*Brought to you by Tata Capital Financial Services Limited, a wholly-owned subsidiary of Tata Capital Limited.Our rural finance offering at present only includes Tractor Finance. Roll out of other products is expected shortly.

Tata Capital is committed to financial

inclusion and providing access to financial

services to customers in remote rural

locations. We aim to provide appropriate

financial products and services at an

affordable cost and in a fair and transparent

manner with the support of progressive

banking technology. We believe our Rural

Finance* offering, will reach out and contribute

to the improvement and financial well-being ofrural customers.

Bring home prosperity.

Tata Capital Rural Finance.

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Our Infrastructure Finance* business caters

to the specialized needs of the infrastructure

sector. With an array of attractive finance

options to suit the varying needs of its

customers, both large and small, and backed

by a reputation of reliability and trust, it brings

a promise of quality and world class service.

Construction Equipment Finance |Infrastructure Project Finance |

Equipment Rentals

The right solutions to build

your business.

Tata Capital Infrastructure Finance.

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Tata Capitals Investment Banking services*

help Institutions and Corporates manage and

grow their business with high quality financial

advisory services and capital market solutions.

Our team of dedicated and experienced

professionals, understands the specialized

needs of its customers and offers them

cost-effective solutions from a bouquet

of services.

The right assistance to

grow your company.

Tata Capital Investment Banking.

*Brought to you by Tata Securities Limited (TSL), a wholly-owned subsidiary of Tata Capital Limited.

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Creating value, the right way.

Tata Capital Private Equity.

Our Private Equity business identifies,

funds, nurtures and exits companies, with

significant growth potential. Our team looks

to create value in these companies, beyond

its role as a financial investor, by supporting

them in areas like strategy, business

development, manufacturing, marketing,

technology, treasury and facilitating overall

improvement and growth of the

companies operations.

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*Tata Card is a White Label Card issued, operated and serviced by SBI Cards and Payment Services Pvt. Ltd. and marketed and distributed byTata Capital Financial Services Limited.

The Tata Credit Card* combines the benefits

of a globally accepted credit card with a

rewarding membership to the Empower

program. The Empower Program is a unique

ever-growing alliance of leading brands which

allows our customers to earn and redeem

points across brands they use regularly. It also

brings them priority offers and exclusive

benefits from our partner brands, like Croma,the Taj Group of Hotels and Tanishq.

A card that

truly rewards YOU.

Tata Credit Card.

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*Brought to you by TC Travel and Services Limited, a wholly-owned subsidiary of Tata Capital Limited.

Lifetime of memories.

Travel Related Services.

Our Travel Related Services* help cater to a

range of travel needs. From planning

customized holiday packages for individual

customers to offering end to end services for

MICE (Meetings, Incentives, Conferences and

Events) arrangements for corporate customers

both in India and abroad.

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DIRECTORS REPORT

TO THE MEMBERS OF

TATA CAPITAL LIMITED

The Directors have pleasure in presenting their Annual Report and the Audited Statement of Accounts for the yearended March 31, 2012.

1. BACKGROUND

Tata Capital Limited (Company or Tata Capital) is a subsidiary of Tata Sons Limited (TSL). TataCapital had made an application to the Reserve Bank of India (RBI) to register itself as a Core InvestmentCompany (CIC) in terms of RBIs Notifications dated August 12, 2010 and January 5, 2011 approval for

which was received on May 14, 2012.

For the purpose of converting itself into a CIC, Tata Capital has transferred its non-CIC business to TataCapital Financial Services Limited (TCFSL), at book value, with effect from April 1, 2011, pursuant to aScheme of Arrangement (Scheme) under Sections 391 - 394 of the Companies Act, 1956 (the Act),between Tata Capital and TCFSL. The Scheme has been sanctioned by the Honble High Court ofBombay and has become effective on March 27, 2012. TCFSL is a wholly owned subsidiary of TataCapital and is registered with the RBI as a Non Banking Financial Company (NBFC).

Currently, Tata Capital carries on the businesses which are permitted by the RBI for being carried on by a CIC.Prior to the Scheme becoming effective, Tata Capital was engaged in the businesses permitted forNBFCs and offered a wide range of fund and fee-based financial services to its customers. Thesebusinesses are now carried on through its wholly owned subsidiary TCFSL. A detailed discussion on

Tata Capitals business and that of its subsidiaries is set out in para 6 of this report.

2. INDUSTRY AND ECONOMIC SCENARIO

Globally, the US economy continues to show signs of modest recovery and the large scale infusion ofliquidity by central banks in the Euro zone has temporarily reduced liquidity related stress in the globalfinancial markets. Domestically, the state of the economy is a matter of concern. Though inflation hasmoderated, it continues to be sticky, despite a slowdown in growth.

Indian GDP growth slowed down to a nine year low of 6.5% for the Financial Year (FY) endedMarch 31, 2012. The Central Governments fiscal deficit, which had narrowed to 2.5% of GDP inFY 2007-08 from 6% in FY 2001-02, reverted to 5.9% in FY 2011-12. The FY 2012 - 13 budget projectsa fiscal deficit of 5.1% of GDP, but the achievement of the same is dependent on sale of equity stakes in

public sector undertakings, controlling the subsidy grants, reducing the trade deficit and improving thetax collections. Easing the monetary policy may not be the solution for the RBI, as lower interest rateswould fuel consumption demand, worsening the demand-supply imbalance, thereby increasing inflationand the current account deficit. The government would therefore, need to work towards reducing thefiscal deficit and to pursue structural reforms and eliminate supply-side bottlenecks.

Liquidity conditions were tight throughout FY 2011-12 on account of lower domestic capital formationand more than 20% depreciation in the Rupee, forcing RBI intervention in foreign exchange markets. Theliquidity shortfall breached the RBI threshold of +/- 1% of Net Demand and Time Liabilities in November2011. The RBI, in addition to injecting liquidity through the Liquidity Adjustment Facility window, injectedsome primary liquidity into the banking system by reducing the CRR by 125 basis points. The tightliquidity conditions in the banking sector provided a window of opportunity for NBFCs to grow. It isestimated that the NBFC sector will record a 39% credit growth in FY 2011 - 12.

The Indian economy does not lack potential and can easily go back to growth rates of 8.5% +, if thereform agenda is pursued in a structured manner. However, it appears that governance and policy issuesare likely to occupy a large part of the public debate in the coming year.

The year ahead will be challenging for the Company on the interest rate front but growth potential for thebusiness is expected to remain robust.


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Annual Report 2011 - 12

3. FINANCIAL RESULTS

3.1 Consolidated Results:

The performance of the Company as reflected by its Audited Consolidated Accounts for the Financial Year

ended March 31, 2012, is summarized below:

(Rs. in crore)

Financial Year 2011-12 2010-11

Gross Income 2,693.09 1,725.26

Less:

Expenses

Finance Costs 1,566.11 1,010.32

Employee Benefits Expenses 233.54 181.54

Other Operating Expenses 439.32 420.80

Depreciation 38.42 26.64

Amortization of expenses 20.38 20.64

Profit Before Tax 395.32 65.32

Less: Tax Expense 109.56 31.72

Profit for the period 285.76 33.60

Share of Associates and Minority Interest 38.84 32.92

Balance carried to reserves 324.61 66.52

The Companys consolidated Profit for the FY 2011-12 was Rs. 286 crore as against Rs. 34 crore inFY 2010-11. This sharp increase of over eight times in Profit was due to a significant improvement in theperformance of many of the subsidiaries of the Company such as TCFSL, Tata Capital Housing FinanceLimited (TCHFL), Tata Capital Pte. Ltd., Singapore (TCPL) and e-Nxt Financials Limited (an associatecompany) and the substantial profit realized on the sale of certain long term investments of the Company.

Tata Capitals consolidated loan book has grown to Rs. 19,371 crore as on March 31, 2012 fromRs. 13,836 crore, as on March 31, 2011. The consolidated Return on Assets for FY 2011-12 was 1.75 %(Previous Year: 0.80%) while its Return on Equity was 12.16% (Previous year: 3.8%). Despite the sharpincrease in its book, the quality of the book is robust with Gross Non-Performing Assets (NPAs) at1.18% and Net NPAs at 0.88% during the year.

3.2 Unconsolidated Results:

During FY 2011-12, the Companys audited Unconsolidated Results reflected Gross Income ofRs. 212 crore and Profit After Tax of Rs. 96 crore. The Companys Net Worth (Unconsolidated) onMarch 31, 2012 was Rs. 2,693 crore as against Rs. 2,642 crore as on March 31, 2011. It may be notedthat the unconsolidated results of the Company for FY 2011-12 are not comparable with those of theprevious year on account of the transfer of business from Tata Capital to TCFSL effective April 1, 2011,

pursuant to the Scheme.

An amount of Rs. 19 crore (Previous Year: Rs. 14 crore) is proposed to be transferred by the Company toSpecial Reserve Fund pursuant to Section 45IC of the Reserve Bank of India Act, 1934 and an amount ofRs. 85 crore (Previous Year: Rs. 8 crore) is being carried forward in the Statement of Profit and Loss in theUnconsolidated Accounts.


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4. SHARE CAPITAL

The paid up Equity Share Capital of the Company was Rs. 2,551 crore on March 31, 2012 which was held

by Tata Sons Limited (90.22%), Tata Investment Corporation Limited (2.55%) and the TCL Employee

Welfare Trust (through its Trustees) (1.98%). The balance 5.25% was held by other Tata companies,

trusts, other corporates and individuals.

During the year, the Company has not made any fresh issue of capital.

Under the Tata Capital Limited Employee Stock Purchase / Option Scheme (ESOP Scheme), the

Company had, on March 26, 2010, allotted 6,34,00,000 Equity Shares of Rs.10/- each to the TCL Employee

Welfare Trust (through its Trustees), which was set up to administer and implement the ESOP Scheme.

As on March 31, 2012, the number of Equity Shares transferred to the eligible employees under the

ESOP Scheme amounted to 1,28,65,475 (net).

5. DIVIDEND

With a view to conserving the resources of the Company and building up reserves and considering the

business plans of the Company, the Company does not recommend payment of dividend for the FY ended

March 31, 2012.

6. MANAGEMENT ANALYSIS AND DISCUSSIONS OF THE COMPANY AND ITS SUBSIDIARIES

6.1 Brief review of the Company since commencement of operations

Tata Capital began operations in September 2007, as a systemically important non-deposit accepting

non-banking financial company. From an initial focus on corporate and retail lending business andequity broking, the Company has, in a short span of four years, through the services offered by its

subsidiaries and associates, today become a full services financial company catering to the multiple

needs of retail, corporate and institutional customers.

The suite of offerings of Tata Capital and its subsidiaries for the retail customer, broadly referred to

as the Consumer Finance and Advisory Business, ranges from consumer loans such as Auto

Loans, Home Loans, Personal Loans, Loans Against Property and Loans Against Securities, to

investment services such as Investment Advisory, Equity Broking and Wealth Management.

The corporate offerings of Tata Capitals subsidiaries, aim to help small, mid and large companies

achieve their financial goals by providing a range of customized and structured loans and financial

advisory services. These include Commercial Finance, Infrastructure Finance and InvestmentBanking. Tata Capital is also a sponsor and investment manager of various Private Equity funds

which identify, finance and nurture companies with growth potential. By playing a developing role,

beyond the role of a financial investor, the Funds aim to create value in the investee companies by

supporting them in areas like strategy, business development, marketing, manufacturing, technology

and overall growth of their operations. Additionally, Tata Capitals subsidiaries also provides Forex

and Travel-related services to its retail and corporate customers, and offers White Label Credit

Cards, in association with SBI-GE, and White Label Travel Cards, in association with Axis Bank,

under the brand of Tata Cards.

Pursuant to the Scheme becoming effective from April 1, 2011 and upon receipt of the Certificate of

Registration as a Core Investment Company from the RBI on May 14, 2012, the activities of Tata

Capital now are those permitted by the RBI for CICs and principally include making/holdinginvestments in and lending to subsidiaries/associate companies/other group companies and investing

in and managing the Private Equity Funds set up by Tata Capital.

Tata Capital has now, principally become a holding company, whose value is substantially derived

from the value of its underlying entities, whose performance is discussed below.


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transferred to TCFSL with effect from April 1, 2011. Pursuant to this transfer, all the

fund based and fee based activities (except private equity and investment advisoryservices) hitherto carried on by Tata Capital are now carried on by TCFSL. TCFSL hastwo main areas of business viz. Corporate Finance and Consumer Finance.

TCFSLs Gross Income for FY 2011-12 was Rs. 2,217 crore and its Profit after Taxwas Rs. 169 crore. Since TCFSL was incorporated only in November 2010 and theabove business transfer was made with effect from April 1, 2011, the financial resultsof TCFSL for FY 2011-12 are not comparable with those for FY 2010-11. The quality ofTCFSLs book in FY 2011-12 has been robust with Gross and Net NPAs at 1.29%and 0.95% respectively.

TCFSL has, during the year, offered innovative and customized loan products to select

customers and has also successfully carried out debt syndication for its corporateclients.

Corporate Finance:

The Corporate Finance Division has two broad business segments viz. CommercialFinance and Infrastructure Finance.

The Commercial Finance Division, specializes in product offerings ranging from vanillaterm loans, working capital term loans, equipment financing, leasing, lease rentaldiscounting to structured products. This Division continues to be the highest assetdriver for TCFSL, with its consistent returns and book growth. Despite the hardeningof interest rates during the year, this Division ended FY 2011-12, with a book of

Rs. 7,768 crore, an increase of 25% over the book of Rs. 6,205 crore at the end ofFY 2010-11. This Division has disbursed Rs. 27,168 crore in FY 2011-12 and hasearned a fee income of Rs. 75 crore.

The Infrastructure Finance Division has three main lines of business viz. ConstructionEquipment Finance, Infrastructure Project Finance and Equipment Rentals. DuringFY 2011-12, the Construction Equipment Finance Division continued to be amongstthe top five players in the industry. While Project Finance business was a majorcontributor of the revenue growth and profit of the Division, the equipment rental businesshas now stabilised. During the year, the Division disbursed fresh loans ofRs. 4,542 crore, representing growth of 22% over the previous year and closed thefinancial year with a book of Rs. 5,830 crore, exceeding the previous years book of

Rs. 4,273 crore, by 36%.

Consumer Finance:

TCFSL offers through its Consumer Finance Division, a wide range of consumer loans,such as Auto Loans (Car and Two Wheeler), Personal Loans, Business Loans, Loansagainst Property, Loans against Securities, Consumer Durable Loans and TractorFinance.

Disbursements in FY 2011-12 aggregated Rs. 3,151 crore as compared toRs. 2,872 crore in FY 2010-11. The focus of this Division during the year, was toimprove the business mix and yields, which is reflected in the increase in the yield ofnew disbursement from 12% in FY 2010-11 to 14.25% in FY 2011-12. Auto Loans still

constitute the major share of disbursement at Rs.1,617 crore (51%). The TractorFinance business was scaled up during the year, with new business volume ofRs. 143 crore in FY 2011-12 as compared to Rs. 46 crore in FY 2010-11. This Divisionalso started offering Consumer Durable Loans and Loans against Securities, in alimited manner during the year. The Asset Book of the Division was Rs. 4,814 crore asat March 31, 2012, which was 33% higher than Rs. 3,621 crore as at March 31, 2011.


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The total book of the Consumer Finance Division of Rs. 4,814 crore, comprises Auto

Loan of Rs. 2,798 crore (58%), Personal & Business loan of Rs. 785 crore (16%),Loans against Property of Rs. 1,019 crore (21%) and other retail advances ofRs. 212 crore (5%).

In the area of Wealth Management and Investment Distribution, TCFSL offersdistribution of various investment products such as Mutual Funds, Fixed Deposits,Debentures & Bonds and Private Equity/Venture Capital Funds.

The quality of the Consumer Finance portfolio continues to be one of the best in theindustry, with Gross NPA and Net NPA of 0.42% and 0.30% respectively, inFY 2011-12 as compared to Gross NPA of 0.88% and Net NPA of 0.76% respectively,in the previous year.

Others:

TCFSL is also engaged in the distribution of the Tata Card, a White Label Card inassociation with the State Bank of India and a White Label Travel Card in associationwith Axis Bank.

Tata Securities Limited (Tata Securities)

Tata Securities, a wholly owned subsidiary of the Company, is engaged in the businessof stock broking, depository participant services, portfolio management services anddistribution of mutual fund units and third party products. It is a member of the NationalStock Exchange of India Limited (NSE) in the cash, derivatives, currency derivativesand wholesale debt market segments and of the Bombay Stock Exchange Limited

(BSE) in the cash and derivative segments. Tata Securities is also a DepositoryParticipant of the National Securities Depository Limited (NSDL) and the CentralDepository Services (India) Limited (CDSL).

During the year under review, Tata Capital Markets Limited (TCML), a wholly ownedsubsidiary of Tata Capital, engaged in merchant banking activities, was amalgamatedwith Tata Securities, with effect from May 16, 2011 in view of the commonality ofbusiness interests and the synergetic linkages between TCML and Tata Securitiesand also to derive the advantages of vertical integration of operations of both thecompanies. The Scheme of Amalgamation was sanctioned by the Honble High Courtof Judicature at Bombay on November 18, 2011 and became effective onJanuary 6, 2012. The said amalgamation has also been approved by SEBI, the Stock

Exchanges and Depositories. The amalgamation will enable appropriate consolidationof the activities of TCML with Tata Securities, with pooling and more efficient utilizationof resources, greater economies of scale, reduction in overheads and expenses andimprovement in various operating parameters. SEBI has issued a Merchant Bankinglicense to Tata Securities by substituting its name for the name of TCML in theCertificate of Registration as Merchant Banker on February 28, 2012.

During the year under review, Tata Securities has reported Gross Income ofRs. 22.6 crore (Previous Year: Rs. 21.1 crore) and a Net Loss of Rs. 15.6 crore(Previous Year: Net Loss of Rs. 7.7 crore). The loss in FY 2011-12 was mainly due tothe shrinking of brokerage income owing to the institutional equity broking businessnot expanding in terms of sourcing of new clients as was estimated, the ramp up of

the franchisee business for retail equity broking not materializing to the desired leveland provision being made for non-payment of dues by a client.

Tata Capital Housing Finance Limited (TCHFL)

TCHFL is a wholly owned subsidiary of Tata Capital, registered with the NationalHousing Bank (NHB) to carry on housing finance activities. TCHFL offers a range of


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Housing Loans and Loans against Property to various segments of society viz. salaried

individuals, self employed individuals, self employed professionals, non-individualentities, etc.

During the year under review, TCHFL recorded strong growth in its loan book andprofits. In FY 2011-12, TCHFL disbursed Mortgage Loans amounting toRs. 1,653 crore (Previous year: Rs. 662 crore). This includes Housing Loans ofRs. 1,304 crore and represents an increase of 169% over the previous year. TCHFLsloan portfolio stood at Rs. 2,137 crore on March 31, 2012. (As at March 31, 2011:Rs. 696 crore), representing an increase of 207%. During FY 2011-12, TCHFL recordedGross Income of Rs. 171 crore (Previous year: Rs. 41 crore) and Profit after Tax ofRs. 7.6 crore, (Previous year: Rs. 1.6 crore). With stable asset quality, the GrossNPA and Net NPA were only 0.27% and 0.23% respectively as at March 31, 2012.

TC Travel and Services Limited (TCTSL)

TCTSL, a wholly owned subsidiary of Tata Capital, is primarily engaged in the businessof ticketing and travel related services. During the year ended March 31, 2012, TCTSLsuccessfully managed the stiff competition and dynamic pricing in the industry. At thesame time, it geared itself to manage the increasing scale of operations.

During the year under review, TCTSL went online with air ticket bookings on centrallylocated servers. This was one more step towards Business Selling Directly toCustomers (B2C) model.

During FY 2011-12, TCTSL operated from 8 branches and achieved a ticketing turnover

of Rs.172 crore, which was 10% higher over the previous year. It recorded GrossIncome of Rs. 10 crore (Previous Year: Rs. 10 crore) and Loss After Tax ofRs. 0.7 crore (Previous Year: Profit of Rs. 1.7 crore).

T T Holdings & Services Limited (TTHSL)

TTHSL, a wholly owned subsidiary of Tata Capital, holds a Full Fledged Money Changerlicense from the RBI and has a network of 28 branches across the country.Theprincipal business of TTHSL is to provide money changing services to corporates formeeting the foreign exchange requirements of their employees travelling abroad. TTHSLis also engaged in selling Travellers Cheques of American Express Bank and TravelCard of Axis Bank and Citibank to its customers. During the year, TTHSL has increasedits branch presence by opening 7 new branches. During FY 2011-12, TTHSL was

amongst the top five sellers of American Express Travellers Cheques in India.

During the year under review, TTHSL has recorded Income of Rs. 15.8 crore (PreviousYear: Rs. 10.95 crore) and Profit After Tax of Rs. 0.1 crore (Previous Year:Rs. 0.7 crore).

T Sec Commodities Broking Limited (TSCBL)

TSCBL, a wholly owned subsidiary of Tata Capital, was formed with the objective ofcarrying on the business of commodities broking. It is yet to commence its businessactivity.

Tata Infrastructure Capital Limited (TICL)

TICL, a wholly owned subsidiary of Tata Capital, was incorporated on July 9, 2010in pursuance of a Notification issued by the RBI introducing a new category of NBFCsas Infrastructure Finance Companies which would be entitled to raise long term fundsin a more cost effective manner from domestic and international sources. TICL is yetto be registered with the RBI and has not commenced any business activity.


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Tata Cleantech Capital Limited (TCCL)

TCCL, a wholly owned subsidiary of Tata Capital was incorporated onSeptember 27, 2011. Tata Capital has entered into a joint venture agreement withInternational Finance Corporation (IFC), Washington, on November 19, 2011, wherebyIFC will invest in TCCL. TCCL will be engaged in the business of financing renewableenergy, energy efficient and waste management projects as well as in providing advisoryservices. TCCL has made an application to the RBI for being registered as an NBFCand approval of the same is awaited. TCCL has not commenced any business activity.

Tata Capital Pte. Ltd. (TCPL), Singapore and its subsidiaries viz. Tata CapitalAdvisors Pte. Ltd. (TCAPL), Singapore, Tata Capital Markets Pte. Ltd.

(TCMPL), Singapore and Tata Capital Plc. (TCPLC), U.K.

TCPL, a wholly-owned subsidiary of Tata Capital, has been established in Singaporeas the International Headquarters of Tata Capital and is responsible for Tata Capitalsinternational presence and activities. As an adjunct to the India business, TCPL,either on its own or through its subsidiaries, is engaged in activities such as fundmanagement, corporate finance advisory and distribution and investments in debtpapers. In addition, TCPL continues to scout for business opportunities in themanagement of and investment in Business Trusts, Investment Trusts and Real EstateInvestment Trusts. TCPL also works closely with the government agencies of Singaporeto actively support development of economic activities along the Singapore - Indiacorridor. During the year under review, TCPL signed an MoU with the SingaporeEconomic Development Board (EDB) to selectively connect EDB to Tata Capitalscustomers in India, who may be interested in setting up their international operations

in / out of Singapore.

TCAPL, a wholly owned subsidiary of TCPL incorporated in Singapore in 2008, holdsa Capital Markets Services (CMS) license, under the Securities and Futures Act ofSingapore, to conduct the regulated activities of fund management. TCAPL acts asfund manager to all the offshore Private Equity Funds set up by TCPL.

Tata Capital Markets Pte. Limited (TCMPL), another wholly owned subsidiary ofTCPL, was incorporated in Singapore in 2008. TCMPL commenced business duringthe year under review as an entity exempted from the requirement of holding a CMSlicense, under the Securities and Futures Act of Singapore, for undertaking businessin advising on corporate finance activities. TCMPL, subject to necessary regulatoryclearances and approvals, plans to grow into a full-fledged investment banking house,catering to both listed and private companies in their fund raising activities and othercorporate actions.

TCPLC, also a wholly owned subsidiary of TCPL, incorporated in the UK, is authorizedby the Financial Services Authority, UK, (the financial services regulatory authority inUK), to carry on regulated activities such as giving investment advice to customers,assisting in placing debt and equity instruments with investors and negotiating termsfor merger & acquisition transactions. The other activities of TCPLC cover marketingservices provided to TCAPL.

During the year under review, TCPL recorded consolidated Gross Income ofUS$ 17.6 million (Rs. 85 crore). Profit Before Tax of US$ 5.8 million (Rs. 28 crore) and

Profit After Tax of US$ 63.7 million (Rs. 31 crore) (US $ translated to Rs. at exchangerate prevailing on March 31, 2012)

Other Subsidiaries

In addition to the above subsidiaries, the following entities are also treated assubsidiaries of the Company, as per applicable Accounting Standards:


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- Tata Capital Growth Fund I

- Tata Capital General Partners Limited Liability Partnership (LLP)

- Tata Capital Healthcare General Partners LLP and

- Tata Opportunities General Partners LLP

b) Associate Companies:

e-Nxt Financials Limited (e-Nxt)

e-Nxt, a subsidiary of Tata Sons Limited, is engaged in developing and providing

Business Process Outsourcing solutions, focused primarily at the Banking and

Financial Services Industry (BFSI) and catering largely to the domestic market. Aspart of its growth strategy, e-Nxt is moving fast towards creating relevant service

offerings for other industry segments, particularly automobile, manufacturing and

telecom, both for domestic and international markets.

Over the last three years, there has been a significant turn-around in the performance

of e-Nxt. In FY 2011-12, e-Nxt recorded turnover of Rs. 150 crore and Profit after Tax

of Rs. 16 crore, as against turnover of Rs. 116 crore and Profit after Tax of Rs. 9 crore

in FY 2010-11. e-Nxt has equity share capital of Rs. 3 crore, 50% of which, is held by

Tata Sons Limited and 40% by Tata Capital. In addition, Tata Capital has invested

Rs. 15 crore in cumulative, redeemable, non-convertible preference shares of e-Nxt.

e-Nxt still has accumulated losses of Rs. 5 crore which it expects to wipe off in the

near future on account of improved operational performance.

Tata Autocomp Systems Limited (TACO)

TACO, a Tata Group company, provides products and services in the automotive industry

to Indian and global customers. Tata Capital acquired a 24% equity stake in TACO in

June 2008, which involved an investment of Rs. 185 crore. TACO has performed very

well over the last few years and has recorded Total Income of Rs. 3,483 crore, in

FY 2011-12 and Profit after Tax of Rs. 140 crore. TACOs paid-up equity share capital

and net worth as on March 31, 2012 were Rs. 255 crore and Rs. 374 crore, respectively.

India Collections Management Private Limited (ICML)

ICML is a Joint-Venture Company, inter aliawith International Finance Corporation,Washington (IFC) and Tata Capital has invested a sum of Rs. 3 crore as on March

31, 2012, in the equity capital of ICML for a 40.5% equity stake therein. ICML will

provide services for the resolution of distressed assets in the Indian Financial Sector

with possible future growth in the servicing of asset backed performing loans. There is

considerable opportunity in India for an integrated asset servicing company due to the

lack of organized servicing entities.

The Company is expected to commence commercial operations during FY 2012-13.

c) Others:

As at March 31, 2012, Tata Capital had, as per its consolidated accounts, total investmentsof Rs. 2,542 crore (Previous Year: Rs. 2,843 crore). Of this, Rs. 350 crore (Previous Year:

Rs. 284 crore) were investments in associate companies, Rs. 353 crore (Previous Year:

Rs. 464 crore) in other companies and Rs.1,839 crore (Previous Year: Rs. 2,095 crore) in

preference shares of companies and in debt instruments such as debentures, pass through

certificates, commercial paper, government securities, etc.


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d) Provision for investments:

As on March 31, 2012, an aggregate provision, on a consolidated basis, of Rs. 72 crore

(Previous Year Rs. 55 crore) has been made for diminution, other than temporary, in the

value of the investments.

6.4 Private Equity

The Company has set up four Private Equity Funds in India viz. Tata Capital Growth Fund I, Tata

Capital Healthcare Fund I, Tata Capital Innovations Fund and Tata Capital Special Situations Fund

- Trust. These Funds have been registered with SEBI as Venture Capital Funds. The Company has

sponsored these Funds, acts as their Investment Manager and has also invested in the Funds by

subscribing to units of these Funds. In addition to the above, the Companys subsidiary in Singapore

has set up Tata Capital Growth Fund Limited Partnership (LP), Tata Capital HBM Healthcare FundI LP and Tata Opportunities Fund LP.

Tata Capital Growth Fund I (TCGF)

TCGF targets private equity growth capital investments in companies that have a significant

portion of their operations in India. TCGF aims to provide growth capital funding of around

Rs. 50 crore to mid-market companies with an average hold period of three to five years.

TCGFs investment focus themes are Urbanization, Manufacturing, Strategic Services and

Growth Opportunities.

TCGF declared its final close in June 2011 with commitments of Rs. 339 crore of which

Rs. 117 crore is invested as at March, 2012, in portfolio companies.

Tata Capital Healthcare Fund I (TCHF)

TCHF focuses on private equity growth capital investment in companies in the pharmaceutical,

contract research/manufacturing, healthcare services, medical devices, diagnostic and other

healthcare sectors. TCHF seeks investments in healthcare companies with high growth

potential and a favourable risk-reward balance. TCHF declared its final close in

April 2012, with commitments of Rs. 320 crore, of which Rs. 13 crore is invested as at

March, 2012 in a portfolio company.

Tata Capital Innovations Fund (TCIF)

TCIF focuses predominantly on technology led innovations which represent breakthrough,fundamental or incremental changes in technology or process. TCIF is a sector agnostic

fund and invests across all stages of an enterprise provided the proof of concept is established.

TCIF has commitments of Rs. 287 crore, of which Rs. 43 crore is invested in portfolio

companies.

Tata Capital Special Situations Fund Trust (TCSSF)

TCSSF focuses on investing in turnaround opportunities and fund has commitments of

Rs. 280 crore, of which Rs. 68 crore is invested as at March, 2012 in a portfolio company.

Overseas Funds

The Overseas Funds viz. Tata Capital Growth Fund LP (TCGFLP), Tata Capital HBM HealthcareFund I LP and Tata Opportunities Fund LP (TOF) are based in Singapore and are set up by

TCPL. These funds accept commitments only from overseas investors.

TCGFLP declared its final close in March 2012 with commitments of US$ 167 million, of

which US$ 21.4 milllion is invested in a portfolio company.


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TOF has received and accepted commitments of US$ 535 million, of which US$ 34.6 million

is invested in a portfolio company. The Asian Venture Capital Journal declared TOF as themost successful fundraise of 2011.

7. ALLIANCES

Tata Capitals alliances and partnerships are based on and are an extension of the Companys coreobjects and values. These include alliances with:

Mizuho Securities Company Limited, to foster business co-operation in private equity, investmentbanking (including cross border mergers and acquisitions), securities business (including brokingand distribution), structured finance and other business areas such as wealth management.

Mizuho Corporate Bank Limited, to foster business co-operation, enhance cross-market value

creation capabilities and strengthen competitive advantages in addition to aiding each other ingaining a deeper understanding of the Indian and Japanese markets.

Mitsubishi UFJ Securities Company Limited, to establish a basis for co-operation in a widerange of strategic business areas that include cross-border investment banking, global offering ofIndian equities and working towards development of the local bond market.

AIMIA (formerly known as Groupe Aeroplan Inc.), the Canadian Loyalty Management giant, tolaunch a multi-party coalition loyalty program in India modeled on the lines of Nectar, which isGroup Aeroplans highly acclaimed coalition loyalty program in the UK and Italy.

Century Tokyo Leasing Corporationto study the possibility of establishing a joint venture companyfor carrying on leasing business in India.

International Finance Corporation, Washington, (a member of the World Bank Group), to forayinto the area of Climate Change with the formation of Tata Cleantech Capital Limited.

8. CONSOLIDATED FINANCIAL STATEMENTS

In addition to the Unconsolidated Financial Statements of the Company for the FY ended March 31, 2012,the Company has also prepared the Consolidated Financial Statements of the Company and all itssubsidiaries, in accordance with the Accounting Standards notified under Companies (AccountingStandards) Rules, 2006. Both these sets of Financial Statements are included in the Annual Report of theCompany.

Pursuant to the consent of the Board of Directors of the Company and the General Circular No. 1/2011dated February 8, 2011 issued by the Ministry of Corporate Affairs, the Company is exempted fromattaching to its accounts for the FY ended March 31, 2012, the individual Annual Reports of its subsidiarycompanies. A statement containing brief financial details of each of the Companys subsidiaries for theyear ended March 31, 2012 is included in the Annual Report at Page No. 150. The annual accounts of thesubsidiaries and the related detailed information will be made available to any Member of the Companyand its subsidiaries seeking such information at any point of time and will be available for inspection toany Member of the Company and its subsidiaries at the Registered Office of the Company and will also beposted on the Companys website www.tatacapital.com. The annual accounts of the said subsidiaries willalso be available for inspection at the Registered Offices of the respective subsidiary companies and onrequest, will be made available/sent free of cost to the Members.

9. FINANCE

During FY 2011-12, the Company met its funding requirements through short term instruments such asCommercial Paper and Inter Corporate Deposits. The aggregate debt outstanding as at March 31, 2012was Rs. 836 crore all of which was payable within one year.

The Debt Equity ratio of the Company as at March 31, 2012 was 0.34.

The Company has been regular in repayment of its borrowings and payment of interest thereon.


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10. CREDIT RATING

During the year under review, the Company had Short Term instruments rated and re-affirmed at ICRA A1+by ICRA Limited.

11. RISK MANAGEMENT

Tata Capital manages risk at the Company and at its subsidiaries through a detailed Risk ManagementPolicy framework. The Risk Management Policy lays down guidelines in identifying, assessing andmanaging risks that the businesses are exposed to. Risk is monitored by the Board/Risk ManagementCommittee of the Board through suitable reporting mechanisms for the Company and its subsidiaries.

12. INTERNAL CONTROL SYSTEMS

The Companys internal control system is designed to ensure operational efficiency, protection andconservation of resources, accuracy and promptness in financial reporting and compliance with laws andregulations. The internal control system is supported by an internal audit process for reviewing the adequacyand efficacy of the Companys internal controls including its systems and processes and compliance withregulations and procedures. Internal Audit Reports are discussed with the management and are reviewedby the Audit Committee of the Board which also reviews the adequacy and effectiveness of the internalcontrols in the Company. The Companys internal control system is commensurate with the size, natureand operations of the Company.

13. IT SUPPORT

The Company and its subsidiaries are now embarking on the growth phase from the stabilization phase oftheir IT road maps. A foray has been made into the mobility solutions space, by providing the securities

trading customers with a mobile trading platform. The customer portal is also being enhanced to providebetter customer experience. Transaction enablement across all customer segments is being planned forimplementation, while several systems for improving operational efficiency have been deployed this year.The core lending system and CRM system has been upgraded, thereby offering the users additionalfeatures and the ability to offer value added services to customers and prospects. The disaster recoveryset up at Chennai has been upgraded and covers key mission critical applications.

14. HUMAN RESOURCES

The Company and its subsidiaries recognizes people as its most valuable asset and has built an open,transparent and meritocratic culture to nurture this asset.

During the course of the year, the Company and its subsidiaries undertook HR initiatives to strengthen the

HR process framework and the internal organizational structure. The Job Band Study, an organisationalrestructuring exercise carried out in partnership with Tata Group HR, is helping the organisation defineroles and grade hierarchies. This will enable sharper career planning for the Companys talent pool.

The launch of P-CMM (People Capability Maturity Model) with a view to achieving P-CMM Level 5 certificationin the year 2015, will help achieve greater organizational efficiency in HR processes and, subsequently,lower attrition levels. The Company and its subsidiaries are gearing up for P-CMM Level 3 Assessment &Certification in FY 2012-13.

The Company and its subsidiaries have sustained the Emerging Leaders Program. In addition, high potentialemployees have been sent for leadership training to various programs.

The Company and its subsidiaries accord high priority to the health and safety of all employees working

in their facilities. An Occupational Health and Safety (OH&S) policy is in place and implementation of theOHSAS18001:2007 standard for the operations in India has commenced. Health and Safety awareness isinculcated through regular Safety Awareness Programmes, Fire Safety Training and Mock Drills.

During the course of the year, the Company and its subsidiaries have focused on Learning & Development(L&D), specifically with regard to key roles and the talent pool. The L&D initiatives are based on identified


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behavioral competencies. Developmental measures include executive development programs, job rotation

and various training programs. An initial tie-up has been made with Stern School of Business, New York,USA (Stern) for setting up a joint learning programme. Stern will be conducting its second programme forthe Senior Leadership Team later this year.

The employee strength of the Company as on March 31, 2012 was 39 while that of all its subsidiaries was2106.

15. TATA BUSINESS EXCELLENCE MODEL (TBEM)

The Company aspires to receive the JRDQV Award by 2015, which is one of the key objectives articulatedunder RACE 2015. As a step towards this goal, the Company has, in February 2012, completed a dipstickassessment which was conducted by Tata Quality Management Services (TQMS) which indicated aband representing Early Improvements. The Company is now gearing up to achieve higher levels of

excellence in the next financial year thereby coming closer to achieving the objectives under RACE 2015.

16. CORPORATE SUSTAINABILITY (CS)

The Tata Group has always epitomized philanthropy, ethical practices and a quest for national betterment.The Tata Capital CS policy, outlines four thrust areas of development viz. Livelihood & Employability,Health, Education and Environment. The rural development initiative at Village Talawade (District Pune,Maharashtra) is a flagship project that covers the above four focus areas towards which the Company hasspent Rs.0.22 crore during FY 2011-12. Tata Capital also has many long term associations with NGOswith the aim of making a measureable positive difference through its initiatives.

Tata Capital believes in social equity and adheres to the principle of equal opportunity, irrespective ofcaste. The Affirmative Action programme at Tata Capital seeks to promote access to quality education

and technical skills and competencies for members of the SC/ST communities, thus creating economicindependence and sustainable livelihoods. During FY 2011-12, the Company has spent an amount ofRs.0.20 crore towards this initiative.

17. COMPLIANCE

Tata Capital has, on May 14, 2012, received from the RBI a Certificate of Registration (datedMay 10, 2012), registering the Company as a systemically important non-deposit accepting CIC. Asexplained in Para 1 of this Report, pursuant to the Scheme, the non-CIC business of the Company wastransferred to TCFSL on March 27, 2012, with effect from April 1, 2011. In view of the above, fromMarch 27, 2012, the Company has complied and continues to comply with the applicable regulations andguidelines of the RBI for a CIC, and it does not carry on any financial activities other than those specifically

permitted by RBI to CICs. During the period upto March 27, 2012, the Company has complied with all theregulations and guidelines of the RBI applicable to an NBFC.

18. DEPOSITS

The Company has not accepted any public deposits during the year under review.

19. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of theCompany, Mr. F N Subedar and Mr. F K Kavarana, Directors, are liable to retire by rotation at the ensuingAnnual General Meeting and are eligible for re-appointment.

20. DIRECTORS RESPONSIBILITY STATEMENT

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

i) in the preparation of the annual accounts for the FY ended March 31, 2012, the applicable accountingstandards have been followed and there are no material departures;


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ii) they have, in selection of the accounting policies, consulted the Statutory Auditors and have applied

them consistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31, 2012, and of the profitof the Company for the year ended on that date;

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

and

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

21. CORPORATE GOVERNANCE

A summary of the corporate governance measures adopted by the Company is given below:

i) The Company recognizes its role as a corporate citizen and endeavors to adopt the best practicesand the highest standards of corporate governance through transparency in business ethics,accountability to its customers, government and others. The Companys activities are carried out inaccordance with good corporate practices and the Company is constantly striving to better them byadopting the best practices.

The Company believes that good corporate governance practices enable the management to directand control the affairs of the Company in an efficient manner and to achieve the Companys goal ofmaximizing value for all its stakeholders. The Company will continue to focus its resources, strengths

and strategies to achieve its vision of becoming a leading financial services company in India, witha global footprint, while upholding the core values of transparency, integrity, honesty and accountability,which are fundamental to Tata companies.

As a part of the Tata Group, the Company has a strong legacy of fair, transparent and ethicalgovernance practices. The Companys corporate governance philosophy has been furtherstrengthened with the adoption by the Company of the Tata Business Excellence Model, the TataCode of Conduct, a Code of Conduct for Prevention of Insider Trading, a Code of Corporate DisclosurePractices, a Whistle Blower Policy, a Fair Practices Code, an Affirmative Action Policy and aPolicy against Sexual Harassment in the Workplace.

ii) The Board of Directors along with its Committees provides leadership and guidance to the Companysmanagement and directs, supervises and controls the activities of the Company.

iii) The size of the Board is commensurate with the size and business of the Company. At present, theBoard comprises six Directors viz. Mr. F K Kavarana, Mr. Ishaat Hussain, Mr. H N Sinor,Mr. Janki Ballabh, Mr. F N Subedar and Mr. Praveen P Kadle. Mr. Kadle is the Managing Director(MD) of the Company and the other five Directors are Non-Executive Directors (NED). One-thirdof the total strength of the Board comprises Independent Directors viz. Mr. H N Sinor andMr. Janki Ballabh. Board Meetings of the Company are chaired by Mr. F K Kavarana, NED.

iv) Mr. Kadle was appointed as the MD of the Company for a period of 5 years with effect fromSeptember 18, 2007. Owing to the transfer of the non-CIC business of the Company to TCFSLw.e.f. April 1, 2011, the Company does not have any profits as computed u/s 349 and 350 of theCompanies Act, 1956 (the Act). Consequently, Mr. Kadles remuneration for the FY 2011-12 willbe as prescribed under Para C of Section II of Part B of Schedule XIII to the Act (read with the

provisos thereto) and will be subject to the approval of the Members.

As at March 31, 2012, Mr. Kadle holds 11,00,000 Equity Shares of the Company acquired underthe Companys Employee Stock Purchase / Option Scheme (ESOP Scheme) of the Company. Inaddition, he holds 2,40,000 unvested options for equity shares of the Company under the ESOPScheme.


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At the Remuneration Committee Meeting held on May 9, 2012 and as approved by the Board at its

meeting held on the same day, it is proposed to pay Incentive Remuneration of Rs. 2 crore toMr. Kadle for FY 2011-12. With this, the total remuneration of Mr. Kadle for FY 2011-12 would beRs. 3.42 crore.

At the Board Meeting of TCFSL held on March 15, 2012, Mr. Kadle was also appointed as theManaging Director & CEO of TCFSL w.e.f. March 27, 2012 until September 17, 2012.

v) Since the Company does not have any profit u/s 349 and 350 of the Act for FY 2011-12, nocommission would be paid to the NEDs of the Company. Details of equity shares offeredto the NEDs during FY 2011-12 and the shares acquired by them as on March 31, 2012 are givenbelow:

Name Number of share Number of shares

options offered held as on March 31, 2012

Mr. F. K. Kavarana 2,20,000 2,20,000

Mr. Ishaat Hussain 2,20,000 NIL

Mr. Janki Ballabh 2,20,000 NIL

Mr. H. N. Sinor 2,20,000 NIL

Mr. F. N. Subedar 2,20,000 2,20,000

vi) During FY 2011-12, eleven Board Meetings were held. Board Meeting(s) were held at least once inevery three months.

vii) The Board has constituted Committees with specific terms of reference to focus on specific issuesand ensure expedient resolution of diverse matters. These are the Audit Committee, InvestmentCredit Committee, Finance and Asset Liability Supervisory Committee, Risk ManagementCommittee, Remuneration Committee, ESOP Committee, Shareholders/Investors GrievanceCommittee, Nominations Committee and Executive Committee of the Board. Several meetings ofthe committees were held during the year

Tata Capital has an Audit Committee comprising Mr. Janki Ballabh, Independent Director, asChairman, Mr. Hoshang Sinor, Independent Director and Mr. F. N. Subedar, Non-Independent,Non-Executive Director. During the year, ten meetings of the Audit Committee were held.

Sitting fees for attending Board Meetings and Meetings of Committees of the Board are paid withinthe maximum prescribed limits.

Minutes of meetings of all Committees of the Board are placed before the Board for discussion/noting.

The Company Secretary of the Company is the Secretary of all the aforementioned Committees,except that the Head of the HR function is the Secretary of the Remuneration Committee and theESOP Committee.

viii) The Company has signed the Tata Brand Equity and Business Promotion (BEBP) Agreementwith Tata Sons Limited subscribing to the TATA BEBP Scheme. The Company abides by the TataCode of Conduct and the norms for using the Tata Brand identity.

ix) The Company has adopted the Tata Code of Conduct for its employees including the ManagingDirector. In addition, the Company has adopted a Code of Conduct for its NEDs. The Codes havebeen posted on the Companys web-site.

x) The Company has adopted a Whistle-Blower Policy which provides a formal mechanism for allemployees of the Company to make protected disclosures to the Management about unethical


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behavior, actual or suspected fraud or violation of the Companys Code of Conduct. The disclosures

reported are addressed in the manner and within the time frames prescribed in the Policy. Noemployee of the Company has been denied access to the Audit Committee.

xi) The Company Secretary is the Compliance Officer of the Company.

xii) The Companys website is www.tatacapital.com

22. ACCOUNTS AND ACCOUNTING STANDARDS

The Company adheres to the Accounting Standards issued by the Institute of Chartered Accountants of

India in the preparation of its financial statements and also to the guidelines prescribed by the RBI.

23. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

& OUTGO

In view of the nature of the activities carried out by the Company, Rules 2A and 2B of the Companies

(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of

energy and technology absorption, are not applicable to the Company.

During the year under review, the Company had earnings in foreign exchange of Rs. 25.4 crore (Previous

Year: Rs. 13.6 crore) and an outgo of Rs. 0.8 crore in foreign exchange (Previous Year: Rs. 1.4 crore).

24. PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956, read with

the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors Report for the

year ended March 31, 2012, is provided in an Annexure forming part of this Report. The Report and

Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in

obtaining a copy of the same may write to the Company Secretary requesting for the same.

25. TATA CAPITAL LIMITED EMPLOYEE STOCK PURCHASE / OPTION SCHEME

With a view to developing and implementing a long term incentive program to effectively attract, motivate

and retain the best talent from the industry in a competitive environment, the Members of the Company

at their Meeting held on March 2, 2010, approved a Tata Capital Limited Employee Stock Purchase /

Option Scheme (ESOP Scheme), which was earlier approved by the Board of Directors on

February 1, 2010.

Based on the recommendations of the ESOP Committee, 1,83,39,388 equity shares of Tata Capital(Shares) were offered to the Eligible Employees and NEDs of the Company as on March 31, 2012

(including 29,83,301 Shares offered during the year 2011-12). Out of these 1,28,65,475 Shares were

acquired by Eligible Employees and NEDs as on March 31, 2012. 14,85,311 Shares were transferred

back to the TCL Employee Welfare Trust in accordance with the ESOP Scheme, consequent upon the

separation of employees from the Company. During the year 38,87,497 Options for Shares were also

granted under the ESOP Scheme to Eligible Employees. Out of these, Options for 80,000 Shares were

vested and exercised upto March 31, 2012 while the balance Option are yet to vest in the Eligible

Employees.

26. AUDITORS

Messrs. Deloitte Haskins & Sells (DHS), who are the Statutory Auditors of the Company, hold officeuntil the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The

Company has received a letter from DHS to the effect that their appointment, if made, would be within the

prescribed limits under Section 224(1B) of the Companies Act, 1956 and that, they are not disqualified

for such appointment within the meaning of Section 226 of the Companies Act, 1956. It is proposed to

re-appoint DHS to examine and audit the accounts of the Company for FY 2012-13.


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27. GREEN INITIATIVE

The Ministry of Corporate Affairs (MCA) has vide Circular Nos.17/2011 and 18/2011 datedApril 21 and April 29, 2011, respectively, taken a Green Initiative in Corporate Governance by allowingpaperless compliances through electronic mode. As a responsible corporate citizen, the Companyproposes to effect electronic delivery of the Annual Report of the Company in lieu of the paper form toMembers. A physical copy of the Annual Report will be sent free of cost to those Members who do notprovide their email addresses for receiving the same electronically or specifically request for physicalcopy.

28. ACKNOWLEDGEMENTS

The Directors would like to place on record their gratitude for the valuable guidance and support receivedfrom the Reserve Bank of India, Securities and Exchange Board of India and other government and

regulatory agencies and to convey their appreciation to Tata Sons Limited (the holding company), theMembers, customers, bankers, lenders, vendors and all other business associates for the continuoussupport given by them to the Company and its subsidiaries. The Directors also place on record theirappreciation of all the employees of the Company and its subsidiaries for their commitment, commendableefforts, team work and professionalism.

29. THE TATA CAPITAL BRAND

The Companys endeavour is to build Tata Capital as a brand that stands for Doing whats right for ourcustomers and all stakeholders. Led by financial expertise and a deep understanding of the needs of thecustomers, the Company and its subsidiaries aim to provide the customers with the right financialsolutions.

In a short span of time, Tata Capital has achieved high levels of awareness and consideration.Well-articulated customer insights, consistent brand tonality and judicious media spends have been thehallmarks of all Tata Capital campaigns.

In FY 2011-12, Tata Capital launched its first product campaign - Tata Capital Home Loans. The nationaltelevision campaign was supported by a mix of outdoor, print and online media. The campaign wassuccessful and helped generate awareness for Tata Capital and specifically its Home Loans offering. Thecampaign also received an unprecedented and enthusiastic response from customers and otherstakeholders and helped enhance the Companys brand equity.

As the Company moves ahead, it plans to continue its efforts, to help build Tata Capital as the MostAdmired Financial Solutions Partner.

For and on behalf of the Board of Directors

F K Kavarana Praveen P Kadle

Director Managing Director

Mumbai, June 1, 2012


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ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date)

Having regard to the nature of the Companys business/activities, clause 4(xiii) of CARO is not applicable.

1. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and

situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a

regular programme of verification which, in our opinion, provides for physical verification of all the fixed

assets at reasonable intervals. According to the information and explanation given to us, no material

discrepancies were noticed on such verification.(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the

fixed assets of the Company and such disposal has, in our opinion, not affected the going concern

status of the Company.

2. The Company is primarily engaged in investing activities and therefore does not hold any physical inventories.

Therefore the provisions of paragraph 4(ii) of the Order are not applicable to the Company.

3. The Company has not granted/taken any loans, secured or unsecured, to/from companies, firms or other

parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the

provisions of sub- clause (a) to (g) of paragraph 4(iii) of the Order, are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal

control procedures commensurate with the size of the Company and the nature of its business for the

purchase of fixed assets and sale of goods and services. The activities of the Company do not involve

purchases of inventory. During the course of our audit, we have not observed any major weakness in internal

controls.

5. To the best of our knowledge and belief and according to the information and explanations given to us, we

are of the opinion that there are no contracts or arrangements, the particulars of which need to be entered

into register maintained in Section 301 of the Companies Act, 1956.

6. According to the information and explanations given to us, the Company has not accepted deposits from

the public during the period covered by our report. According to the information and explanations given to

us, no order has been passed by the Company Law Board or the National Company Law Tribunal or theReserve Bank of India or any court or any other Tribunal in this regard in the case of the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and

the nature of its business.

8. The Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the

Companies Act, 1956, for any of the services rendered by the Company. Accordingly, the provisions of

paragraph 4(viii) of the Order are not applicable to the Company.

9. (a) According to the information and explanations provided to us, the Company is regular in depositing with

appropriate authorities undisputed statutory dues including provident fund, service tax, income tax,

cess and other material statutory dues applicable to it and there are no dues payable in respect of

Employees State Insurance, Investor Education and Protection Fund, Excise duty, Custom Duty andSales Tax.

(b) There were no undisputed amounts payable in respect of Income-Tax, Wealth Tax were outstanding, as

at March 31, 2012 for a period of more than six months from the date they became payable. The due

date is calculated from the date of registration received under various statutes.


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(c) Details of dues of income tax and sales tax which have not been deposited as on March 31, 2012 on

account of any dispute are given below-

Statute Nature Forum where dispute Period to which the Amount

of Dues is pending amount relates involved (Rs. in lakhs)

Sales Tax Laws Sales Tax Tribunal Commercial Taxes 2009-10 2

Income Tax Act Income Tax CIT (Appeals) 2008-09 145

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the

year covered by our audit and in the immediately preceding financial year. Therefore, the provisions of paragraph

4 (x) of the Order are not applicable to the Company.

11. In our opinion and according to the information and explanations given to us, the Company has not defaultedin the repayment of dues to banks and financial institutions.

12. According to the information and explanations given to us, the Company has not granted loans and advances

on the basis of security by way of pledge of shares and other securities. Therefore, the provisions of clause

4(xii) of CARO are not applicable to the Company.

13. According to the information and explanations given to us, the Company is not dealing in shares, securities

and debentures. Therefore, the provisions of paragraph 4 (xiv) of the Order are not applicable to the Company.

14. According to the information and explanations given to us, the Company has not given any guarantee for

loans taken by others from banks and financial institutions.

15. In our opinion and according to the information and explanations given to us, the term loans have been

applied for the purposes for which they were obtained, other than temporary deployment pending application.

16. In our opinion and according to the information and explanations given to us, and on overall examination of

Balance Sheet, we report that the funds amounting to Rs. 85,075 lakhs raised on short term basis have

been used during the year for long-term investments.

17. According to the information and explanations given to us, during the year, the Company has not made any

preferential allotment of shares to parties and companies covered in the register maintained under Section

301 of the Companies Act, 1956. For this purpose allotment of shares made under the Employees Share

Purchase Scheme (ESPS), administered through the ESPS trust has not been considered.

18. According to the information and explanations given to us, during the year, the Company has not issued

any secured debentures. Therefore, the provisions of clause 4(xix) of CARO are not applicable to theCompany.

19. During the year, the Company has not raised any money by way of a public issue. Accordingly, the provisions

of paragraph 4(xx) are not applicable to the Company.

20. To the best of our knowledge and belief and according to the information and explanations given to us, no

fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

Registration No: 117366W

Sanjiv V. Pilgaonkar

Partner Membership No. 39826

Mumbai, May 9, 2012


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BALANCE SHEET AS AT MARCH 31, 2012

(Rs. in Lakhs)

Note As at As atNo. March 31, 2012 March 31, 2011

I. EQUITY AND LIABILITIES1. SHAREHOLDERS FUNDS

(a) Share Capital 2 254,238 249,515(b) Reserves and Surplus 3 15,066 14,672

2. SHARE APPLICATION MONEY PENDINGALLOTMENT - -

3. NON-CURRENT LIABILITIES

(a) Long-term borrowings 4 - 495,722(b) Other Long term liabilities 5 - 16,510(c) Long-term provisions 6 20 1,653

4. CURRENT LIABILITIES(a) Short-term borrowings 7 83,635 446,905(b) Trade payables 8 7,123 18,331(c) Other Current liabilities 9 826 453,913(d) Short-term provisions 10 55 2,451

TOTAL 360,963 1,699,672

II. ASSETS1. NON-CURRENT ASSETS

(a) Fixed Assets 11

(i) Tangible assets 123 17,193(ii) Intangible assets - 7,869(iii) Capital work-in-progress - 446(iv) Intangible assets under development - 259

(b) Non-current Investments 12 347,842 212,902(c) Deferred tax assets (net) 13 13 1,830(d) Loans and advances - Financing Activity 14 - 569,544(e) Loans and advances - Others 15 6,418 11,377(f) Other non-current assets 16 5 9,290

2. CURRENT ASSETS(a) Investments 12 - 105,280(b) Trade receivables 17 1,607 2,523(c) Cash and Bank balances 18 3,513 2,128

(d) Loans and advances - Financing Activity 14 - 746,715(e) Loans and advances - Others 19 1,407 8,247(f) Other current assets 20 35 4,069

TOTAL 360,963 1,699,672See accompanying notes forming part of thefinancial statements

As per our report attached For and on behalf of the Board of Directors

For Deloitte Haskins & SellsChartered Accountants

F. K. Kavarana(Director)

Hoshang N. Sinor(Director)

Ishaat Hussain(Director)

Janki Ballabh(Director)

F. N. Subedar(Director)

Praveen P. Kadle(Managing Director & CEO)

Sanjiv V. PilgaonkarPartner

MumbaiMay 9, 2012

Sarita Kamath(Company Secretary)


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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED

MARCH 31, 2012 (Rs. in Lakhs)

Note No. For the Year Ended For the Year Ended

March 31, 2012 March 31, 2011

I Revenue from Operations 21 812 19,224

II Profit on sale of long term Investments 14,106 527

III Income from Financing activity 22 - 134,585

IV Other Income 23 6,287 8,132

V Total Revenue (I + II + III+IV) 21,205 162,468

VI Expenses :

Finance costs 24 4,872 98,377

Employee benefits expense 25 3,121 14,428

Other operating expenses 26 1,589 34,643

Depreciation and amortisation 11 33 2,552

Amortisation of expenses 20(a) 64 2,139

Total expenses 9,679 152,139

VII Profit before exceptional and extraordinary 11,526 10,329items and tax (V - VI)

VIII Exceptional items - -

IX Profit before extraordinary items 11,526 10,329and tax (VII - VIII)

X Extraordinary Items - -

XI Profit before tax (IX - X) 11,526 10,329XII Tax expense:

(1) Current tax 2,970 4,308

(2) Deferred tax (13) (1,116)

(3) MAT credit entitlement (1,073) -

Total Tax expense 1,884 3,192

XIII Profit for the year from Continuing 9,642 7,137Operations (XI - XII)

XIV Profit from discontinuing operations - -

XV Tax expense of discontinuing operations - -

XVI Profit/(loss) from discontinuing operations - -

(after tax) (XIV - XV)XVII Profit/(loss) for the year (XIII + XVI) 9,642 7,137

XVIII Earnings per equity share:

(1) Basic (in Rupees) 0.39 0.36

(2) Diluted (in Rupees) 0.38 0.33

See accompanying notes forming part of thefinancial statements


For Deloitte Haskins & SellsChartered Accountants

F. K. Kavarana(Director)


Ishaat Hussain(Director)


F. N. Subedar(Director)



MumbaiMay 9, 2012



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CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2012

(Rs. in Lakhs)

For the Year Ended For the Year Ended

March 31, 2012 March 31, 2011

1 CASH FLOW FROM OPERATING ACTIVITIESProfit before taxes 11,526 10,329Adjustments for :Amortisation of share/debenture issue expenses 64 2,139Depreciation and amortisation 33 2,552(Profit)/Loss on sale of fixed assets - 29Interest Expenses 373 82,916Discounting charges on Commercial Paper 4,499 15,254Discounting charges on Debentures - 207Interest Income - (122,812)Income from Investments (14,151) (19,728)Dividend Income (767) -Unrealised exchange gain (244) (43)

Provision for leave encashment 55 94Provision for diminution in value of Investments - 917Provision against Standard Assets - 3,690Provision for doubtful loans (Net) - 8,892Operating Profit before working capital changes 1,388 (15,564)Adjustments for :(Increase)/Decrease in Trade receivable 759 (1,498)(Increase)/Decrease in Loans and advances - Financing Activity - (307,664)(Increase)/Decrease in Investments (Credit Substitutes) - (124,224)(Increase)/Decrease in Loans and advances - Others (103) 345Increase/(Decrease) in Other Liabilities and Provisions 6,605 (2,324)Cash from / (used in) operations 8,649 (450,929)

Interest Paid (210) (73,920)Interest Received - 128,683Dividend Received 767 1,335Taxes paid 1,374 (4,210)

Net cash used in Operating Activities 10,580 (399,041)

2 CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed assets (including Capital Advances) (126) (11,361)Proceeds from sale of Fixed Assets - 183Investment in Subsidiaries, Associates and Joint Ventures (272,961) (22,996)Purchase consideration received as per Scheme of Arrangement 199,000 -Purchase of long-term investments - (5,426)Purchase of Current Investments - (31,416)Purchase of Mutual Funds - (10,707,070)Proceeeds from sale of Mutual Funds - 10,709,631Proceeds from current investments - 29,953Proceeds from sale of long term investments 30,435 17,884Income from Investments 45 -Net cash from / (used in) Investing Activities (43,607) (20,618)

3 CASH FLOW FROM FINANCING ACTIVITIESProceeds from call on equity shares - 40,000Loan given to TCL Employees Welfare Trust - -Collection of Loan given to TCL Employees Welfare Trust (56) 1,452Collection of loan given to Employees for ESOP 107 (1,253)Dividend on Preference Shares - (32)Dividend Distribution Tax - (5)Share Issue Expenses (1) (32)

Debenture Issue/Loan Processing Expenses (8) (133)Net proceeds from short-term borrowings 36,454 215,210Proceeds from long-term borrowings - 339,189Repayment of long-term borrowings - (174,986)Net cash from Financing Activities 36,496 419,410

Net increase in cash and cash equivalents 3,469 (249)

CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF YEAR 2,127 2,376

Less: Cash transferred to Tata Capital Financial Services Limited (2,083) -

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 3,513 2,127

Reconciliation of cash and cash equivalents as above with cash and bank balancesCash and Cash equivalents at the end of the year 3,513 2,127

ADD : RESTRICTED CASH - 1

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 3,513 2,128

See accompanying notes forming part of the financial statements


For Deloitte Haskins & Sells

Chartered Accountants

F. K. Kavarana

(Director)


Ishaat Hussain

(Director)


F. N. Subedar

(Director)



MumbaiMay 9, 2012



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