EXECUTIVE SUMMARY

A project entitled “Comparative Financial Analysis of Tata Consultancy Services and

Infosys” was carried out with the objective of finding out which company is financially
sound. The study helps us to know which company performs better and help us to decide on
which company we want to invest in if there’s an investment dilemma faced. Various
analytical tools is been used to analyze and to make inference. Findings are based on the
analysis; the major finding was that the company has a good liquidity position and profit
percentage.

Financial ratios quantify many aspects of a business and are an integral part of the financial
statement analysis. Financial ratios are categorized according to the financial aspect of the
business which the ratio measures. Liquidity ratios measure the availability of cash to pay
debt. Activity ratios measure how quickly a firm converts non-cash assets to cash
assets. Debt ratios measure the firm's ability to repay long-term debt. Profitability
ratios measure the firm's use of its assets and control of its expenses to generate an
acceptable rate of return.

Ratios generally are not useful unless they are benchmarked against something else, like past
performance or another company. Thus, the ratios of firms in different industries, which face
different risks, capital requirements, and competition are usually hard to compare.
Financial ratios are very powerful tools to perform some quick analysis of financial
statements. There are four main categories of ratios: liquidity ratios, profitability ratios,
activity ratios and leverage ratios. These are typically analysed over time and across
competitors in an industry.

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 OBJECTIVES OF THE STUDY

The study on comparative analysis of Tata Consultancy Services and Infosys is carried
out with the objective of finding which company is better financially stable and backed
by strong assets. The study is carried out to find out which company has a better financial
performance. The further objectives of the study are –

 To familiarize with the organizations

 To find out which company is backed better financially
 To find out which company has lower debts
 To find out which company faces losses
 To find out which company gives out a higher Return on Equity

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 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done systematically.
It is important for research to know not only the research method but also know
methodology. The procedures by which researchers go about their work of describing,
explaining and predicting phenomenon is called methodology. Methods comprise the
procedures used for generating, collecting and evaluating data. All this means that it is
necessary for the researcher to design his methodology for his problem as the same may
differ from problem to problem. Data collection is an important step in any project and
success of any project will largely depend upon how much accurate you will be able to
collect and how much time, money and effort will be required to collect that necessary data,
this is also important step. Data collection plays an important role in research work. Without
proper data available for analysis you cannot do the research work accurately.

TYPES OF DATA COLLECTION

There are two types of data collection methods available, primary data collection and
secondary data collection.

Primary Data:
The primary data is that data which is collected fresh or first hand, and for first time which is
original in nature. Primary data can be collected through personal interview, questionnaire
etc. to support the secondary data.

Secondary Data Collection Method:

The secondary data are those which have already collected and stored. Secondary data easily
get those secondary data from records, journals, annual reports of the company etc. It will
save the time, money and efforts to collect the data. Secondary data also made available
through trade magazines, balance sheets, books etc.

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This project is based on primary data collected through personal interview of managers of
finance department and other concerned employees of finance department. But primary data
collection had limitations such as matter confidential information thus project is based on
secondary information collected through five years annual report of the company, supported
by various books and internet sides. The data collection was aimed at study of working
capital management of the company. Project is based on

• Annual report of Tata Consultancy Services 2010-2011

• Annual report of Tata Consultancy Services 2011-2012

• Annual report of Tata Consultancy Services 2012-2013

• Annual report of Tata Consultancy Services 2013-2014

• Annual report of Tata Consultancy Services 2014-2015

• Annual report of Infosys 2010-2011

• Annual report of Infosys 2011-2012

• Annual report of Infosys 2012-2013

• Annual report of Infosys 2013-2014

• Annual report of Infosys 2014-2015

The comparative financial analysis for the past 5 years is done using the data taken from
these financial reports. Similarly the analysis of Return on Equity and calculations of ratios is
done. Apart from this, the websites of TCS and Infosys is referred to know the products,
product facilities, network etc.

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 LIMITATIONS OF THE STUDY

Following limitations were encountered while preparing this project:

 Limited data: - This project has completed with annual reports; it just
constitutes one part of Data collection i.e. Secondary. There were limitations for
primary data Collection because of confidentiality.
 Limited period: - This project is based on five year annual reports.
Conclusions and Recommendations are based on such limited data. The trend of last
five year may or may not reflect the real working capital position of the company.
 Limited area: - Also it was difficult to collect the data regarding the
competitors and their financial information. Industry figures were also difficult to get.

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 LITERATURE REVIEW
Though there are innumerable literatures available on the subject, the most appropriate
studies have been reviewed

 Dr. Promod Kumar published a book in 1991“Analysis of financial statement

of Indian Industries” The study covered the 17 private sector, 5 state owned public
sector and 1 central public sector companies. He studied analysis of activities,
assessment of profitability, return on capital investment, analysis of financial
structure, analysis of fixed assets and working capital. In his research he revealed
various problems of industries and suggested remedies for the problems. He also
suggested for the improvement of profitability and techniques of cost control.

 Ahindra Chakrabati published an articles “Performance of public sector

enterprises a Case study on fertilizers” in “The Indian journal of public enterprise” in
the year 1988-89. He made analysis of consumption and production of fertilizer by
public sector; he also made analysis of profit and loss statement.  He gave suggestion
to improve the overall performance of public enterprise.

 In the year of 2002, Dr. Sugan C. Jain has written a book on “Performance
appraisal automobile industry” In his study he has analyses the performance of the
automobile industry and presented comparative study of some national and
international units. The operational efficiency and profitability had been analyzed
using the composite index approach. He made several suggestions from the
strengthening the financial soundness improving profitability, working capital the
performance of fixed assets.

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  Recently in the year 1998 a study was made by  S.J.parmar on “Financial
Efficiency-Modern methods, tools & Techniques” for the period from 1998-89 to
1994-95.He had made an attempt to analyze financial strength, liquidity, profitability,
cost and sales trend and social welfare trend by using various ratios analysis, common
size analysis and value added analysis. He made several suggestions for the
improvement of profitability of industry. In his analysis, he indicates various reasons
for higher cost, low profitability, and inefficient use of internal resources.

 Dr Sanjay Bhayani published a book in 2003, “Practical financial statement

analysis” The study covered 16 public limited cement companies in private sector. He
made study of analysis of profitability, working capital, capital structure and activity
of Indian cement industry. In his research he revealed various problems of cement
industries and suggested remedies for the problems. He also suggested for the
improvement of profitability and techniques of cost control.

 Ram Kumar,Kakani Biswatosh saha and V.N.Reddy has written research

paper on Determinants of Financial Performance of Indian Corporate Sector in the
Post-Liberalization Era: An Exploratory Study. This paper attempts to provide an
empirical validation of the widely held existing theories on the determinants of firm
performance in the Indian context. The study uses financial statement and capital
market data of 566 large Indian firms over a time frame of eight years divided into
two sub-periods (viz., 1992-96, and 1996-2000) to study Indian firms'
financial performance across various dimensions viz., shareholder value, accounting
profitability and its components, growth and risk of the sample firms. It reveals that
even on the same data, the determinants of market-
based performance measures and accounting-based performance measures differ due
to influence of 'Capital Market Conditions'. We found that size, marketing
expenditure, and international diversification had a positive relation with a firm's
market valuation. Apart from these firm attributes that reflect either operating

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 parameters of firms or 'strategic choice' of firm managers, we also found that a firm's
ownership composition, particularly the level of equity ownership by Domestic
Financial Institutions and Dispersed Public Shareholders, and the leverage of the firm
were important factors affecting its financial performance. The different implications
of the findings for various stakeholders of a firm are also discussed.

 Dutta S.K has written an article on “Indian tea industry an appraisal” which
was published in Management accountant in the year of March 1992. He analyzed the
profitability, liquidity and financial efficiency by using various ratios.

 Saswata Chatterjee (2010) focused on the importance of the fixed and current assets
in the successful running of any organization. It poses direct impacts on the profitability
liquidity. There have been a phenomenon observed in the business that most of the
companies increase the margin for the profits and losses because this act shrinks the size of
working capital relative to sales. But if the companies want to increase or improve its
liquidity, then it has to increase its working capital. In the response of this policy the
organization has to lower down its sales and hence the profitability will be affected due to
this action. For this purpose 30 United Kingdom based companies were selected which were
listed in the London Stock exchange. The data were taken of three years 2006-2008. It
analyzed the impact of the working capital on the profitability. The dimensions of working
capital management included in this research which is quick ratios, current ratios C.C.C,
average days of payment, Inventory turnover, and A.C.P (average collection period. on the
net operating profitability of the UK companies).

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 CHAPTER 1:
Comparative Financial Analysis (Introduction)

Comparative Financial Analysis

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Modernization has made it possible to invest in a company situated thousand miles away
from the investor. It is possible for a person to own a small part of a business situated on the
other side of the world. This has been possible because of a capital market. Where the
investors invest their money and wait for the company to perform and earn value for them.
Most potential investors do not have sufficient knowledge about the capital market.
Questions like “How to buy stocks? How to analyze the company? Which company or
industry to invest in? How to look at the performance of the companies?” have acted as a
barrier for then from owning stocks. Personally I have had the same problem. I wanted to
invest that amount into something profitable but I was afraid to put my money into any kind
of an investment as I did not have enough knowledge in investments. The fact that I wanted
to invest in stocks but I did not have adequate knowledge about investment motivated me to
explore the topic.
Financial ratios quantify many aspects of a business and are an integral part of the financial
statement analysis. Financial ratios are categorized according to the financial aspect of the
business which the ratio measures. Liquidity ratios measure the availability of cash to pay
debt. Activity ratios measure how quickly a firm converts non-cash assets to cash
assets. Debt ratios measure the firm's ability to repay long-term debt. Profitability
ratios measure the firm's use of its assets and control of its expenses to generate an
acceptable rate of return. Market ratios measure investor response to owning a company's
stock and also the cost of issuing stock. These are concerned with the return on investment
for shareholders, and with the relationship between return and the value of an investment in
company’s shares.
Financial ratios allow for comparisons

 between companies

 between industries

 between different time periods for one company

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 between a single company and its industry average

Ratios generally are not useful unless they are benchmarked against something else, like past
performance or another company. Thus, the ratios of firms in different industries, which face
different risks, capital requirements, and competition are usually hard to compare.
Financial ratios are very powerful tools to perform some quick analysis of financial
statements. There are four main categories of ratios: liquidity ratios, profitability ratios,
activity ratios and leverage ratios. These are typically analyzed over time and across
competitors in an industry.

 Liquidity ratios are used to determine how quickly a company can turn its assets into
cash if it experiences financial difficulties or bankruptcy. It essentially is a measure of a
company's ability to remain in business. A few common liquidity ratios are the current ratio
and the liquidity index. The current ratio is current assets/current liabilities and measures
how much liquidity is available to pay for liabilities. The liquidity index shows how quickly
a company can turn assets into cash and is calculated by: (Trade receivables x Days to
liquidate) + (Inventory x Days to liquidate)/Trade Receivables + Inventory.

 Profitability ratios are ratios that demonstrate how profitable a company is. A few
popular profitability ratios are the breakeven point and gross profit ratio. The breakeven
point calculates how much cash a company must generate to break even with their start up
costs. The gross profit ratio is equal to (revenue - the cost of goods sold)/revenue. This ratio
shows a quick snapshot of expected revenue.

 Activity ratios are meant to show how well management is managing the company's
resources. Two common activity ratios are accounts payable turnover and accounts
receivable turnover. These ratios demonstrate how long it takes for a company to pay off its
accounts payable and how long it takes for a company to receive payments, respectively.

 Leverage ratios depict how much a company relies upon its debt to fund operations.
A very common leverage ratio used for financial statement analysis is the debt-to-equity

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ratio. This ratio shows the extent to which management is willing to use debt in order to fund
operations. This ratio is calculated as: (Long-term debt + Short-term debt + Leases)/ Equity.

Liquidity Ratios
The current ratio is a financial ratio that measures whether or not a firm has enough
resources to pay its debts over the next 12 months. It compares a firm's current assets to its
current liabilities. It is expressed as follows:

The current ratio is an indication of a firm's market liquidity and ability to meet creditor's

demands. Acceptable current ratios vary from industry to industry and are generally between
1.5 and 2 for healthy businesses. If a company's current ratio is in this range, then it generally
indicates good short-term financial strength. If current liabilities exceed current assets (the
current ratio is below 1), then the company may have problems meeting its short-term
obligations. If the current ratio is too high, then the company may not be efficiently using its
current assets or its short-term financing facilities.
The Acid-test or quick ratio or liquidity ratio measures the ability of a company to use
its near cash or quick assets to extinguish or retire its current liabilities immediately. Quick
assets include those current assets that presumably can be quickly converted to cash at close
to their book values. A company with a quick ratio of less than 1 cannot currently fully pay
back its current liabilities.

Profitability Ratios

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Net profit measures the profitability of ventures after accounting for all costs.
Return on sales (ROS) is net profit as a percentage of sales revenue. ROS is an indicator of
profitability and is often used to compare the profitability of companies and industries of
differing sizes. Significantly, ROS does not account for the capital (investment) used to
generate the profit. In a survey of nearly 200 senior marketing managers, 69 percent
responded that they found the "return on sales" metric very useful.
Profit Margin, net margin, net profit margin or net profit ratio is a measure
of profitability. It is calculated by finding the net profit as a percentage of the revenue.

where net profit is revenue minus cost

Return on equity (ROE) measures the rate of return for ownership interest (shareholders'
equity) of common stock owners. It measures the efficiency of a firm at generating profits
from each unit of shareholder equity, also known as net assets or assets minus liabilities.
ROE shows how well a company uses investments to generate earnings growth. ROEs 15-
20% are generally considered good.

Return on capital (ROC), or return on invested capital (ROIC), is a ratio used in finance,

valuation, and accounting. The ratio is estimated by dividing the after-tax operating income
(NOPAT) by the book value of both debt and equity capital less cash/equivalents. ROIC is a
useful measure for comparing the relative profitability and value-creating potential of
companies after taking into account the amount of initial capital invested.

Return on capital employed is an accounting ratio used in finance, valuation, and

accounting. It is a useful measure for comparing the relative profitability of companies after
taking into account the amount of capital used.

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In the denominator we have net assets or capital employed instead of total assets (which is
the case of Return on Assets). Capital Employed has many definitions. In general it is the
capital investment necessary for a business to function. It is commonly represented as total
assets less current liabilities (or fixed assets plus working capital requirement).
ROCE uses the reported (period end) capital numbers; if one instead uses the average of the
opening and closing capital for the period, one obtains Return on Average Capital
Employed (ROACE).
The efficiency ratio, a ratio that typically applies to banks, in simple terms is defined as
expenses as a percentage of revenue (expenses / revenue), with a few variations. A lower
percentage is better since that means expenses are low and earnings are high. It relates
to operating leverage, which measures the ratio between fixed costs and variable costs.

Debt Ratios
Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are
provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term
liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as
'goodwill').

or alternatively:

The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion

of shareholders' equity and debt used to finance a company's assets. Closely related to
leveraging, the ratio is also known as Risk, Gearing or Leverage. The two components are
often taken from the firm's balance sheet or statement of financial position (so-called book

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value), but the ratio may also be calculated using market values for both, if the company's
debt and equity are publicly traded, or using a combination of book value for debt and
market value for equity financially.

Times interest earned (TIE) or interest coverage ratio is a measure of a company's ability to

honor its debt payments. It may be calculated as either EBIT divided by the total
interest payable.

Interest Charges = traditionally "charges" refers to interest expense found on the income
statement.
Times Interest Earned or Interest Coverage is a great tool when measuring a company's
ability to meet its debt obligations. When the interest coverage ratio is smaller than 1, the
company is not generating enough cash from its operations EBIT to meet its interest
obligations. The Company would then have to either use cash on hand to make up the
difference or borrow funds. Typically, it is a warning sign when interest coverage falls below
2.5x.
Market ratios
Market ratios measure investor response to owning a company's stock and also the cost of
issuing stock. These are concerned with the return on investment for shareholders, and with
the relationship between return and the value of an investment in company’s shares.
Earnings per share (EPS) is the monetary value of earnings per outstanding
share of common stock for a company.

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in
dividends:

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The part of the earnings not paid to investors is left for investment to provide for
future earnings growth.
The Price/Earnings Ratio or P/E ratio or PER is a ratio used to value a company.

The dividend yield or dividend-price ratio of a share is the dividend per share, divided by

the price per share.  It is also a company's total annual dividend payments divided by
its market capitalization, assuming the number of shares is constant. It is often expressed as a
percentage.
Dividend yield is used to calculate the earnings on investment (shares) considering only the
returns in the form of total dividends declared by the company during the year

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 CHAPTER II
Company Profiles

Tata Consultancy Services – A Detailed Profile

Tata Consultancy Services (TCS) is a global leader in IT services, digital and business
solutions that partners with its clients to simplify, strengthen and transform their businesses.

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TCS ensures the highest levels of certainty and satisfaction through a deep-set commitment
to our clients, comprehensive industry expertise and a global network of innovation and
delivery centers.
TCS is one of the largest Indian companies by market capitalization ($80 billion).TCS has
been recognized by Brand Finance as one of the Big 4 Global IT Services Brands. Our
continued industry-leading growth is a testament to the certainty our clients experience every
day. In 2015, TCS is ranked 64th overall in the Forbes World's Most Innovative Companies
ranking, making it both the highest-ranked IT services company and the first Indian
company. It is the world's 10th largest IT services provider, measured by the revenues.
Foundation and History
Tata Consultancy Services Limited was founded in 1968 by a division of Tata Sons
Limited. Its early contracts included punched card services to sister company TISCO
(now Tata Steel), working on an Inter-Branch Reconciliation System for the Central Bank of
India, and providing bureau services to Unit Trust of India.
In 1979, TCS delivered an electronic depository and trading system called SECOM for
the Swiss company SIS SegaInterSettle (deutsch); it also developed System X for the
Canadian Depository System and automated the Johannesburg Stock Exchange. It associated
with a Swiss partner, TKS Teknosoft, which it later acquired.
In 1981, TCS established India's first dedicated software research and development centre,
the Tata Research Development and Design Centre (TRDDC) in Pune. In 1985, it established
India's first client-dedicated offshore development centre, set up for clients Tandem. TCS
later (1993) partnered with Canada-based software factory Integrity Software Corp, which
TCS later acquired.
In anticipation of the Y2K bug and the launch of a unified European currency Euro, Tata
Consultancy Services created the factory model for Y2K conversion and developed software
tools which automated the conversion process and enabled third-party developer and client
implementation.
On 25 August 2004, TCS became a publicly listed company.
In 2005, TCS became the first India-based IT services company to enter
the bioinformatics market. In 2006, it designed an ERP system for the Indian Railway

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Catering and Tourism Corporation. By 2008, its e-business activities were generating over
US$500 million in annual revenues.
TCS entered the small and medium enterprises market for the first time in 2011, with cloud-
based offerings. On the last trading day of 2011, it overtook RIL to achieve the highest
market capitalisation of any India-based company. In the 2011/12 fiscal year, TCS achieved
annual revenues of over US$10 billion for the first time.
In May 2013, TCS was awarded a six-year contract worth over 1100 crores to provide
services to the Indian Department of Posts. In 2013, the firm moved from the 13th position to
10th position in the League of top 10 global IT services companies and in July 2014, it
became the first Indian company with over Rs 5 lakh market capitalization.
In Jan 2015, TCS ends RIL's 23-year run as most profitable firm
TCS BPS
TCS BPS (Business Process Services) is the third-largest India-based
IT outsourcing company (after capgemini). The BPS division had revenues of US$1.44
billion in the FY 2012-13 which was 12.5% of the total revenue of TCS. TCS BPS has more
than 45,000 employees which serve over 225 million customers across 11 countries. The rate
of attrition in BPS division during the financial year 2012-13 was 19.5%.
In 2006, TCS won a $35 million contract from Eli Lilly and Company for providing data
management, biostatistics and medical writing services. In 2007, it won a major multi-year
deal from Swiss pharmaceutical major Hoffmann-La Roche to provide data
management, biostatistics, clinical programming and drug safety support to Hoffmann-La
Roche's global pharmaceutical development efforts.
The firm has also opened a business process outsourcing facility in the Philippines.

Innovation Labs
In 2007, TCS launched its co-innovation network, a network of innovation labs, start up
alliances, university research departments, and venture capitalists. In addition, TCS has 19
innovation labs based in three countries.TCS' partners include Collabnet, Cassatt, academic

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institutions such as IITs, Stanford, MIT, Carnegie Mellon and venture capitalists
like Sequoia and Kleiner Perkins.
Employees
TCS is one of the largest private sector employers in India, and the second-largest employer
among listed Indian companies (after Coal India Limited). TCS had a total of over 335,620
employees as of October 2015, of which 31% were women. The number of non-Indian
nationals was 21,282 as at March 31, 2013 (7.7%). The employee costs for the FY 2012-13
were US$4.38 billion, which was approx. 38% of the total revenue of the company for that
period. In the fiscal year 2012-13, TCS recruited a total of 69,728 new staff, of whom 59,276
were based in India and 10,452 were based in the rest of the world. In the same period, the
rate of attrition was 10.6%. The average age of a TCS employee is 28 years. The employee
utilization rate, excluding trainees, for the FY 2012-13 was 82%. TCS was the fifth-largest
United States visa recipient in 2008 (after Infosys, CTS, Wipro and Mahindra Satyam). In
2012, the Tata group companies, including TCS, were the second largest recipient of H-1B
visas. As of June 2014, TCS has over 300,000 employees. It is world's third largest IT
employer behind IBM and HP.
Subramaniam Ramadorai, former CEO of TCS, has written an autobiographical book about
his experiences in the company called The TCS Story...and Beyond.

Corporate Social Responsibility

At TCS, sustainability is seen as a state of being in balance between Corporate Economic
Responsibility (CER) and Corporate Social Responsibility (CSR).

 Approach

 Initiatives

 Key Facts and Figures

The guiding principle of TCS’ Corporate Social Responsibility programs is “Impact through
Empowerment,” where empowerment is a process of strengthening the future today, so that

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risks are minimized, value created and certainty is experienced. We strive to ensure that the
communities engaged through our CSR initiatives also experience certainty in their lives.
The core areas for TCS’ CSR programs are education, health and environment. The choice of
education as a theme flows from TCS being in the knowledge domain. Similarly, attention to
the cause of health acknowledges that health is a vital precondition for promoting social
good. Concern for the environment is in line with our belief that this global cause demands
our attention to ensure a sustainable and productive planet. These themes are established
centrally for adoption or adaptation across all geographies.
TCS' Approach
TCS has chosen the following channels to drive its CSR initiatives:

 Developing innovative solutions to address large-scale societal problems by utilizing

our IT core competence.

 Volunteering for projects that address the felt need of communities in which TCS
operates, while aligning with the core themes of TCS’ CSR.

 Participating in community development program championed by our clients.

 Partnering with select non-government and civil society organizations and other
government bodies.

 Supporting large-scale causes such as disaster relief or any other cause as determined
by the Corporate CSR Council.

TCS' Initiatives
Some of the initiatives include the following:

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Region Sustainable Community Initiatives
India Adult Literacy Programs 
University Alliances
TCS’ BPO Employability Program
Academic Interface Program
marshy
Web Health Center
Mansuki
TCS Maitree village development initiative
TCS Maitree’s Advanced Computer Training Center 
Med Mantra 
Insight 
Empower
CSR Technical Team’s support to social organizations
North America First Book Club
goIT
UK and Europe IT Futures
Environmental sustainability and the ICT industry
Asia Pacific Insight- Australia
SINDA Computer Training
Go for IT!
Library Program in China
Operation Smile
Latin America Environment Leaders
Middle East and Landmark computer training
Africa Scholarships at CIDA City Campus
City Ambassadors Football Club
Support to Reach for Dreams

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Key Facts And Figures
In the year 2011-12 year TCS associates volunteered 58,362 hours on CSR initiatives and
through these initiatives reached out to 57,90,604 beneficiaries.

Who We Are: Tata Consultancy Services is an IT services, consulting and business

solutions organization that delivers real results to global businesses, ensuring a level of
certainty that no other firm can match.
What We Offer: TCS offers a consulting-led integrated portfolio of IT and IT-enabled
services delivered through its unique Global Network Delivery Model™ (GNDM™),
recognized as the benchmark of excellence in software development.
Lineage: TCS is part of the Tata group, one of India’s largest industrial conglomerates and
most respected brands.
History: TCS was established in 1968 as a division of Tata Sons Limited. TCS Ltd. got
incorporated as a separate entity on January 19, 1995.

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Mission:

 To help customers achieve their business objectives by providing innovative, best-in-

class consulting, IT solutions and services

 To make it a joy for all stakeholders to work with us

Values:

 Leading change

 Integrity

 Respect for the individual

 Excellence

 Learning and sharing

Workforce: TCS has over 324,000 of the world’s best-trained IT consultants in 46 countries.
Full Services Portfolio:

 Application Development and Maintenance

 Business Intelligence

 Enterprise Solutions

 Assurance Services

 Engineering and Industrial Services

 IT Infrastructure Services

 Business Process Services

 Consulting

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 Asset-leveraged Solutions

 Supply Chain Management

 Enterprise Security and Risk Management

Our newer services include the following:

 Mobility

 Connected Marketing

 Social Computing

 Big Data

 Cloud

Industries Serviced:

 Banking, Financial Services

 Insurance

 Retail and Consumer Packaged Goods

 Telecom

 Media and Information Services

 High Tech

 Manufacturing

 Life Sciences

 Healthcare

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 Energy and Utilities

 Construction

 Metals and Mining

 Travel, Transportation and Hospitality

Financial Information: Revenue of $15.5 billion; up 15% Y-o-Y in reported terms and 17%
in constant currency; and net income at $3.5B; up 12.8% Y-o-Y (fiscal year ending March
31, 2015).
Stock Symbols

 NSE (National Stock Exchange of India): TCS

 BSE (Bombay Stock Exchange of India): 532540

Quality Framework:  TCS operates, enterprise-wide at Maturity Level 5 of the CMMI for
Development and CMMI for Services models. TCS is the world's first organization to
achieve an enterprise wide Level 5 on CMMI for Services.
TCS Integrated Quality Management System (iQMS) is a vibrant, integrated, process-
driven, people-oriented and customer-focused quality management system. It is an integrated
approach towards implementing quality practices of world-class benchmarking models,
including  ISO 9001, CMMI® for Development, CMMI® for Services, ISO 27001, ISO
22301, ISO 20000, TL 9000, AS 9100, ISO 13485, ISO 14001 and OHSAS 18001.
Board of Directors: TCS has 9 non-executive and 2 executive board members. Of the 11
Directors, 6 are Independent Directors.
Leadership Team:

 N Chandrasekaran, Chief Executive Officer and Managing Director

 Rajesh Gopinathan, Chief Financial Officer and Vice President

 Ajoyendra Mukherjee, EVP and Head, Global Human Resources

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 Aarthi Subramanian, Global Head of Delivery Excellence Group, Executive Director

The TCS Advantage: Features like TCS’ GNDM™, Customer-centric Engagement Model,

Full Services Portfolio, and Innovation Labs and Co-innovation Network (COIN™) set us
apart.
Alliances: TCS has a strong network of strategic and solution partners with a joint objective
of helping its customers become high-performance businesses by maximizing the value of
their technology investments.
Subsidiaries: TCS has 60 subsidiaries.

INFOSYS – A DETAILED PROFILE

Infosys Limited is an Indian multinational corporation that provides business consulting,

information technology, software engineering and outsourcing services. It is headquartered
in Bangalore, Karnataka.

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Infosys is the second-largest India-based IT services company by 2014 revenues, and the
fifth largest employer of H-1B visa professionals in the United States in FY 2013. On 15
February 2015, its market capitalization was $42.51 billion, making it India's sixth largest
publicly traded company.
History
Infosys was co-founded in 1981 by CEO Narayan Murthy, Nandan Nilekani, N. S.
Raghavan, S. Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora after they resigned
from Patni Computer Systems The Company was incorporated as "Infosys Consultants Pvt
Ltd." with a capital of  US$1,250 (about $3,254 in 2016) in Model Colony, Pune as the
registered office. It signed its first client, Data Basics Corporation, in New York. In 1983, the
company's corporate headquarters was relocated from Pune to Bangalore.
Change in name: The Company changed its name to "Infosys Technologies Private
Limited" in April 1992 and to "Infosys Technologies Limited" when it became a public
limited company in June 1992. It was later renamed to "Infosys Limited" in June 2011.
An initial public offer (IPO) in February 1993 with an offer price of equivalent to US$5.10 in
2016 per share against book value of Rs. 20 equivalent to US$ 1.10 in 2016 per share. The
Infosys IPO was under subscribed but it was "bailed out" by US investment bank Morgan
Stanley which picked up 13% of equity at the offer price. Its shares were listed in stock
exchanges in June 1993 with trading opening at Rs. 145 (equivalent to ₹530 or US$7.80 in
2016) per share.
In October 1994, it made a private placement of 5,50,000 shares at Rs. 450 (equivalent to
US$22 in 2016) each against book value of Rs. 10 (equivalent to  50¢ US in 2016) per share
to Foreign Institutional Investors (FIIs), Financial Institutions (FIs) and Corporate.
In March 1999, it issued 2,070,000 ADSs (equivalent to 1,035,000 equity shares of par value
of Rs. 10 (equivalent to 35¢ US in 2016) each) at US$34 ($48.3 in 2016) per ADS under the
American Depositary Shares Program and the same were listed on the NASDAQ National
Market in US. The total issue amount was US$70.38 million.
The share price surged to Rs. 8,100 (equivalent to US$290 in 2016) by 1999 making it the
costliest share on the market at the time. At that time, Infosys was among the 20 biggest
companies by market capitalization on the NASDAQ.

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During July 2003, June 2005 and November 2006, it made secondary ADS issues
of US$294 ($378.19 in 2016) million, US$1.07 ($1.3 in 2016) billion and US$1.605 ($1.88
in 2016) billion respectively.
In December 2002, Infosys transferred the listing of its American Depositary Shares (ADS)
from the NASDAQ to the NYSE.
In July 2014, Infosys spun off a subsidiary, Edge verve Systems Ltd., focusing on enterprise
software products for business operations, customer service, procurement and commerce
network domains.
In August 2015, Finacle joins Edgeverve product portfolio.
The credit rating of the company is A- (given by Standard & Poor's on 13-Dec-2013). In
February 2015, Infosys announced it would acquire the US automation technology
company Panaya for around $200 million.

Operations
The Headquarters of Infosys is located in Bengaluru
On 15 January 2016, Infosys had 1,045 clients across 50 countries.
Infosys has a global footprint with offices and development centers across the world.
In 2012, Infosys announced a new office in Milwaukee, Wisconsin to service Harley-
Davidson, being the 18th international office in the United States. Infosys hired 1,200 United
States employees in 2011, and expanded the workforce by an additional 2,000 employees in
2012.

Products and services

It provides software development, maintenance and independent validation services to
companies in banking, finance, insurance, manufacturing and other domains.
One of its known products is Finacle which is a universal banking solution with various
modules for retail and corporate banking

Infosys Foundation

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In 1996, Infosys established the Infosys Foundation, to support the underprivileged sections
of society. At the outset, the Infosys Foundation implemented many programs in Karnataka.
It subsequently covered Tamil Nadu, Andhra Pradesh, Maharashtra, Odisha, and Punjab in a
phased manner. A team at the Foundation identifies all the programs in the areas of
Healthcare, Education, Culture, Destitute Care and Rural Development.

Academic Entente
Infosys' Global Academic Relations team forges Academic Entente (AcE) with academic and
partner institutions. It explores co-creation opportunities between Infosys and academia
through case studies, student trips and speaking engagements. They also collaborate on
technology, emerging economies, globalization, and research. Some initiatives include
research collaborations, publications, conferences and speaking sessions, campus visits and
campus hiring.

Infosys Labs
Infosys Labs is organized as a global network of research labs and innovation hubs.
Infosys Labs collaborates with leading national and international universities such as
the University Of Southern California Viterbi School Of Engineering, University of
Cambridge, Queens University of Belfast, University of Illinois at Urbana-
Champaign, Indian Institute of Technology Bombay, IITB-Monash Research Academy,
Indraprastha Institute of Information Technology, Delhi, Indian Institute of Science,
Bangalore, Purdue University, Indian Institute of Information Technology, Bangalore.

Infosys Prize
The Infosys Prize is an annual award given to scientists, researchers, engineers and social
scientists connected to India. It is given by the Infosys Science Foundation, a non-profit trust
which was set up in February 2009 by Infosys and some members of its Board. The prize is
given under six categories. Each category includes a gold medallion, a citation certificate,
and prize money of Rs. 65 Lakh.

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Employees
The Development Center in Mysore campus
Infosys has a total of 193,383 employees as of 15 January 2016, of which 35% were women.
Its workforce consists of employees representing 122 nationalities working from 32 countries
(37 countries as per the base location). Out of its total workforce, 93.8% are software
professionals, 17% are working in its BPO arm and remaining 6% work for support and
sales. The attrition rate of Infosys Ltd., excluding its subsidiaries, for 12 months ending 30
September 2015, was 14.2%. And following the annual hike for employees during 2015-16,
the attrition rate is likely to increase.
During FY 2014-15, Infosys received 1,519,678 applications from prospective employees
and had a gross addition of 53,386 employees.

Training centre in Mysore

As the world's largest corporate university, the Infosys global education centre in the 337
acre campus has 400 instructors and 200 classrooms, with international benchmarks at its
core. Established in 2002, it had trained around 125,000 engineering graduates by June
2015.It can train 14,000 employees at a given point of time on various technologies.
The Infosys Leadership Institute (ILI), based in Mysore, has 96 rooms and trains about 400
Infoscians annually.

Awards and recognitions

 Infosys was ranked 15th largest IT services provider in the world by HfS Research in
its 2013 ranking.

 Infosys was ranked 19th on the world's most innovative companies list by Forbes.

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 Infosys was in the list of top twenty green companies in Newsweek’s Green Rankings
for 2012.

 The company has been voted India's most admired company in The Wall Street
Journal Asia 200.

Fact File
Infosys is a global leader in consulting, technology and outsourcing solutions. As a proven
partner focused on building tomorrow’s enterprise, Infosys enables clients in more than 50
countries to outperform the competition and stay ahead of the innovation curve.
Our experience gives our clients a distinct advantage. In addition to helping them manage
their business, we can power their transformation to a smarter organization as well. This
allows them to focus on their core business priorities.
Our expertise spans industries. From helping build lighter and stronger passenger jets and
creating more fuel efficient smart cars, to enabling banks to provide financial inclusion to the
most remote corners of the globe and empower technology executives with solutions to
maximize global agility – Infosys delivers powerful innovations. And in doing so, we change
the way the world works and lives.
Infosys provides enterprises with strategic insights on what lies ahead. We help enterprises
transform and thrive in a changing world through strategic consulting and the co-creation of
breakthrough solutions, including those in mobility, sustainability, big data and cloud
computing.
At Infosys, it’s more than just innovation that has won us the confidence of our stakeholders.
We believe our responsibilities also extend beyond the boundaries of business. The Infosys
Foundation provides assistance to some of the most depressed sectors of the communities in
which we work. The Infosys Science Foundation awards the Infosys Prize to some of the
most important research of our times in the sciences and the humanities.
An entrepreneurial adventure that began with seven engineers and US$250, Infosys is now a
publicly traded company driven by 193,000+ relentless innovators and revenues of more than
$9.21 bn (LTM Q3 FY16).

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Corporate governance philosophy
Corporate governance is about maximizing shareholder value legally, ethically and on a
sustainable basis. At Infosys, the goal of corporate governance is to ensure fairness for every
stakeholder – its customers, investors, vendor-partners, the community, and the governments
of the countries in which they operate. They believe that sound corporate governance is
critical in enhancing and retaining investor trust. It is a reflection of their culture, their
policies, their relationship with stakeholders and their commitment to values. Accordingly,
they always seek to ensure that their performance is driven by integrity.
Infosys corporate governance philosophy is based on the following principles:

 Satisfying the spirit of the law and not just the letter of the law

 Going beyond the law in upholding corporate governance standards

 Maintaining transparency and a high degree of disclosure levels

 Making a clear distinction between personal convenience and corporate resources

 Communicating externally in a truthful manner about how the company is run

internally

 Complying with the laws in all the countries in which the company operates

 Having a simple and transparent corporate structure driven solely by business needs

 Embracing a trusteeship model in which the management is the trustee of the

shareholders' capital and not the owner

 Driving the business on the basis of the belief, 'when in doubt, disclose'

Board composition

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At the core of the Infosys corporate governance practice is the Infosys Board, which oversees
how the management serves and protects the long-term interests of all our stakeholders. The
majority of the boards, seven out of 10, are independent members. As active and well
informed members of the board, they are fully committed to ensuring the highest standards
of corporate governance. In addition, the independent directors make up the audit,
compensation, investor grievance, nominations, and risk management committees, bringing
their valuable perspective to the board.
As a part of their commitment to follow global best practices, they comply with the
Euroshareholders Corporate Governance Guidelines 2000, and the recommendations of the
Conference Board Commission on Public Trusts and Private Enterprises in the US. Infosys
also adheres to the UN Global Compact Program.

Environmental stewardship
When it comes to environmental conservation, Infosys has always been at the forefront. As
they focus on their material aspects – energy, water, emissions, and waste, they also pioneer
new technologies while investing in measures to renew their existing infrastructure to
improve performance and enhance resource efficiency. Infosys continues to demonstrate that
such investments are not just environmentally sound but also financially viable, and are
replicable innovations as well.

Corporate Social Responsibility

At Infosys, the distribution of wealth is as important as its legal and ethical creation. A
strong sense of social responsibility is therefore an integral part of our value system.

Infosys Foundation
Infosys is committed to contributing to the society and established the Infosys Foundation in
1996 as a not-for-profit trust to support their social initiatives. The Foundation supports
programs and organizations devoted to the cause of the destitute, the rural poor, the mentally

34 | P a g e
challenged, and the economically disadvantaged sections of the society. The Foundation also
helps preserve certain cultural forms and dying arts of India.

Community service
Through the Computers@Classrooms initiative launched in January 1999, they have donated
2,567 computers to various institutions across India. Additionally, Infosys has applied to the
relevant authorities for permission to donate computers to educational institutions on an
ongoing basis in the future. Microsoft Corporation continues to participate in this initiative
by donating relevant software.

Social commitment in education

Infosys' Education & Research group has the pride of anchoring the Infosys Extension
Program (IEP), which consists of the Infosys Fellowship Program, Rural Reach program,
Catch Them Young and Train the Trainer.

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 CHAPTER III
DATA ANALYSIS AND INTERPRETATION

CURRENT RATIO

Year MAR’15 MAR’14 MAR’13 MAR’12 MAR’11

Infosys 3.41 3.7 4.75 4.91 5.34

TCS 2.81 3.18 2.9 2.48 2.45

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 INTERPRETATION
The current ratio of both Infosys and TCS is very high. Usually a current ratio of 2:1 is
maintained, but here it is seen that both the companies are maintaining high level of current
assets compared to liabilities which shows that the company is capable of meeting its debts
easily and will have no problems.
The current ratio in Infosys is decreasing whereas it is increasing in TCS for all years except
for the 2014-2015 year
QUICK RATIO

YEAR MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

Infosys 3.38 3.65 4.69 4.88 5.28

TCS 2.8 3.16 2.88 2.47 2.44

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 INTERPRETATION
The quick ratio of both Infosys and TCS is very high. Usually a current ratio of 2:1 is
maintained, but here it is seen that both the companies are maintaining high level of current
assets compared to liabilities which shows that the company is capable of meeting its debts
easily and will have no problems. Quick ratio is almost equal to the current ratio which
shows low level of inventory in both the companies.
The quick ratio in Infosys is decreasing whereas it is increasing in TCS for all years except
for the 2014-2015 year.

FIXED ASSETS TURNOVER RATIO

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 1.05 1.13 1.12 1.15 1.09

TCS 1.64 1.68 1.68 1.74 1.68

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 INTERPRETATION
Both Infosys and TCS have high fixed assets turnover ratio which shows that they are
capable of generating high sales with fixed assets. This shows that the TCS is better at
generated far more sales than Infosys if their fixed assets employed are taken into
consideration.
The Fixed Assets Turnover Ratio has remained almost constant over the period of 5 years for
both the companies.
LONG TERM DEBT/EQUITY

YEAR MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS - - - - -

TCS - - 0.01 0.01 0.01

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 INTERPRETATION
Both, Infosys and TCS are debt free companies. They use only the funds raised through share
issues as shown in the chart. TCS has used the debt for 3 years which is equal to only 1% of
their equity. This shows a strong financial position for both these companies and a high level
of revenue generation since they do not have to finance their activities by acquiring debt.

TOTAL DEBT/EQUITY

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS - - - - -

TCS 0.01 - 0.01 0.01 0.01

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 INTERPRETATION
Both, Infosys and TCS are debt free companies. They use only the funds raised through share
issues as shown in the chart. TCS has used the debt for 3 years which is equal to only 1% of
their equity. This shows a strong financial position for both these companies and a high level
of revenue generation since they do not have to finance their activities by acquiring debt.
TCS has acquired a small insignificant debt in 2014-2015 but Infosys has remained debt free

OPERATING MARGIN

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 29.51 28.25 29.96 32.19 33.14

TCS 28.57 33.29 29.54 29.3 29.93

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 INTERPRETATION
The Operating Margin of both TCS and Infosys is very high. The margin of Infosys has
come down in previous years, from 33.14% in Mar’11 to 29.51% in Mar’15. The margin has
reduced continually but has been higher than TCS in all years except 2013-2014.
TCS has maintained a margin of nearly 29% for most years except for in the 2013-2014
where it has increased to 33.29% but come down again in 2014-2015.

GROSS PROFIT MARGIN

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 27.58 25.76 27.36 29.65 30.23

TCS 26.68 31.62 27.88 27.52 28.09

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 INTERPRETATION
The gross profits of both Infosys and TCS are almost same for the preceeding years except
for in 2013-2014 where TCS had a significant higher profit margin than the Infosys.
The profit margin of TCS has not changed much except for the year 2013-2014 where the
profit was high compared to other years.
The profit margin of Infosys has been on the decline since the year 2010-2011 with the
lowest being in 2013-2014 where TCS raked in its highest profit.

NET PROFIT MARGIN

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 25.71 21.72 23.38 25.6 24.28

TCS 26.17 27.25 25.24 28.24 25.85

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 INTERPRETATION
The Net profit of TCS has been higher than Infosys for the previous 5 years. Even though the
gross profit numbers showed Infosys with a greater margin, we see here that TCS overtakes
Infosys in terms of the overall profitability.
There is not much difference in the profit margins of these 2 companies except for the year
2013-2014.

RETURN ON EQUITY

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 25.3 24.21 25.28 28.46 26.29

TCS 42.4 41.87 39.32 44.24 38.8

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 INTERPRETATION
The Return on Equity is very high in TCS than compared with Infosys. The return on Equity
has dropped below 40% only during 2 years-2010-2011, 2012-2013. The Return on Equity is
very high with highest being during the year 2011-2012.
The Return on Equity for Infosys has remained stable near the 25% mark except for its
highest recorded return in 2011-2012 which equaled to 28.46%.

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 42.01 35.49 26.45 31.86 53.46

TCS 80.35 33.97 33.72 44.66 36.24

DIVIDEND PAYOUT RATIO

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 INTERPRETATION
The payout ratios of both the companies are good. They have given out atleast 25% of their
profits as dividends which increases their share values.
The highest dividend paid out by Infosys is 53.46% in the year 2010-2011 while the highest
paid by TCS has been recently-of a whopping 80.35%.

RETENTION RATIO

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 56.51 64.51 73.3 66.21 46.54

TCS 17.38 66.03 66.28 55.34 63.76

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 INTERPRETATION
The companies have retained a good number of profits over the years with them to help in
their business expansion activities or new assets acquisition. The lowest retention was made
by TCS recently where they decided to make their shareholders happy by giving out a high
dividend than normal.

EARNING PER SHARE

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 105.91 178.4 158.75 147.5 112.22

TCS 105.43 99.69 69.33 59.48 41.37

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 INTERPRETATION
Earnings Per share in TCS are much lower than Infosys for the years 2010-2014. The
Earnings are almost equal in 2014-2015 at 105.5. This indicates that additional shares have
been issued by Infosys or the earnings have come down.
The earnings have been increasing for both the companies except for 2014-2015 where
Infosys saw a significant drop in the earnings from 178.4 in 2013-2014 to 150.5 in 2014-
2015.
DIVIDEND PER SHARE

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 59.5 63 42 47 60

TCS 79 32 22 25 14

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 INTERPRETATION
The Dividend Per Share in Infosys is significantly higher than that of TCS in preceding 4
years except for the current year where TCS gave out 80% of its earnings.
The DPS of TCS is highest in the current year whereas it is lowest in the year 2010-2011 at
just 14.
The DPS of Infosys is highest in year 2010-2011 while it is the lowest in the year 2012-2013
at 42.

DEBTORS TURNOVER RATIO

MAR'15 MAR'14 MAR'13 MAR'12 MAR'11

INFOSYS 5.93 6.47 6.25 6.5 6.81

TCS 4.67 5.04 4.77 5.59 7.19

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INTERPRETATION
The debtors turnover ratio is higher for Infosys than TCS which indicates that it collects the
debts faster than TCS. It is seen here that the turnover ratio has decreased overtime which
indicates a more liberal credit policy being followed by the companies.

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 CHAPTER IV
FINDINGS, LEARNINGS AND CONCLUSIONS

FINDINGS
 Infosys maintains no inventories while TCS has a very low level of inventories

 The profit margins of the firms are very high.

 The credit policy of both the firms has become liberal over the period of 5 years.

 The current and quick ratios of Infosys are significantly higher than TCS
indicating that more current assets are used by the Infosys for its operations

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 The fixed assets employed by TCS are higher than Infosys. The fixed assets turnover
ratio of TCS is significantly higher than Infosys signifying that the TCS is able to generate
more sales with fixed assets employed

 Both the companies are debt free. TCS has raised short term debts recently butt they
account for not even 1% of the equity

 The operating margin and the gross profit margin of Infosys is higher than TCS but
the Net profit margin of TCS is higher.

 The Return on Equity of TCS is higher than that of the Infosys. There is more than
20% difference on their return.

 TCS has given out a large dividend this of more than 80%

 The majority of earnings of both the companies are from their exports

LEARNINGS

 The debtor turnover ratio of both the companies has been declining. This issue should
be addressed and steps should be taken to curb this at a certain level.

 The quick ratio of these companies is too high. The companies should try to invest
these additional balances to either their work or to boost their interest generation. Infosys has
a major amount of assets lying around which can be converted into useful assets or used for
diversification of the business.

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 The companies can raise debt to increase the value of their stock

 The reasons for decline in the Earning Per Share should be identified and necessary
steps for correction should be taken

 The local market should be looked at by these companies since majority of their
software are sold abroad. With the new startups coming into picture these companies should
try to capture the local market as well

CONCLUSIONS

 The study shows that the TCS and Infosys are both backed by solid financials, with
no debt problems and good current assets to current liabilities proportion

 The companies have given out dividends for the previous 5 years without fail which
shows their good credentials

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 The companies have not experienced any losses in any year for which data was taken

 TCS gives a higher Return on Equity than that of the Infosys

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 ANNEXURE

BALANCE SHEET OF TCS

(Rs crore)
Mar ' 15 Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11
Sources of funds

Owner's fund
Equity share capital 195.87 195.87 195.72 195.72 195.72

Share application money - - - - -

Preference share capital - - 100 100 100

Reserves & surplus 45,220.57 43,856.01 32,266.53 24,560.91 19,283.77

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 Loan funds

Secured loans 64.13 88.64 161.6 93.47 32.33

Unsecured loans 186.14 1.05 1.52 2.76 4

Total 45,666.71 44,141.57 32,725.37 24,952.86 19,615.82

Uses of funds
Fixed assets
Gross block 14,095.04 11,220.11 9,152.32 7,261.85 6,016.93
Less : revaluation reserve - - - - -

Less : accumulated depreciation 6,098.75 5,290.92 4,048.04 3,198.23 2,594.75

Net block 7,996.29 5,929.19 5,104.28 4,063.62 3,422.18

Capital work-in-progress 2,706.94 3,047.53 1,763.85 1,399.82 1,072.86

Investments 3,398.70 5,832.42 6,324.38 5,688.39 5,795.49

Net current assets

Current assets, loans & advances 48,963.37 42,795.05 29,819.63 23,106.98 15,752.28

Less : current liabilities & provisions 17,398.59 13,462.62 10,286.77 9,305.95 6,426.99

Total net current assets 31,564.78 29,332.43 19,532.86 13,801.03 9,325.29

Miscellaneous expenses not written - - - - -

Total 45,666.71 44,141.57 32,725.37 24,952.86 19,615.82

BALANCE SHEET OF INFOSYS

Mar ' 15 Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11
Sources of funds
Owner's fund

Equity share capital 574 286 287 287 287

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 47,494.00 41,806.00 35,772.00 29,470.00 24,214.00

Loan funds

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 Secured loans - - - - -

Unsecured loans - - - - -

Total 48,068.00 42,092.00 36,059.00 29,757.00 24,501.00

Uses of funds
Fixed assets

Gross block 12,827.00 10,374.00 4,453.00 4,061.00 4,056.00

Less : revaluation reserve - - - - -

Less : accumulated depreciation 5,480.00 4,642.00 - - -

Net block 7,347.00 5,732.00 4,453.00 4,061.00 4,056.00

Capital work-in-progress 769 954 1,135.00 588 249

Investments 6,857.00 6,717.00 4,344.00 1,409.00 1,325.00

Net current assets

Current assets, loans &

advances 46,840.00 39,309.00 33,096.00 29,757.00 23,224.00

Less : current liabilities &

provisions 13,745.00 10,620.00 6,969.00 6,058.00 4,353.00

Total net current assets 33,095.00 28,689.00 26,127.00 23,699.00 18,871.00

Miscellaneous expenses not

written - - - - -

Total 48,068.00 42,092.00 36,059.00 29,757.00 24,501.00

P/L A/C OF TCS

YEAR Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

INCOME

Sales Turnover 73,582.15 64,676.08 48,426.96 38,858.79 29,275.68

Excise Duty 4.09 3.15 0.82 0.25 0.27

Net Sales 73,578.06 64,672.93 48,426.14 38,858.54 29,275.41

Other Income 4,995.11 3,114.71 2,230.39 2,685.18 494.73

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 Stock Adjustments -0.15 0.07 0 -0.26 -0.87

Total Income 78,573.02 67,787.71 50,656.53 41,543.46 29,769.27

Expenditure

Raw Materials 64.68 39.79 25.04 11.81 17.75

Power & Fuel Cost 0 0 0 0 0

Employee Cost 27,368.32 21,466.56 17,081.72 14,100.41 10,221.85

Other Manufacturing
Expenses 19,796.40 16,950.73 13,360.51 10,575.83 8,104.03

Selling and Admin Expenses 0 0 0 0 0

Miscellaneous Expenses 5,320.31 4,682.20 3,652.60 2,784.51 2,167.38

Preoperative Exp Capitalised 0 0 0 0 0

Total Expenses 52,549.71 43,139.28 34,119.87 27,472.56 20,511.01

Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

Operating Profit 21,028.20 21,533.72 14,306.27 11,385.72 8,763.53

PBDIT 26,023.31 24,648.43 16,536.66 14,070.90 9,258.26
Interest 79.57 23.41 30.62 16.4 20.01
PBDT 25,943.74 24,625.02 16,506.04 14,054.50 9,238.25

Depreciation 1,393.77 1,080.55 802.86 688.17 537.82

Other Written Off 0 0 0 0 0

Profit Before Tax 24,549.97 23,544.47 15,703.18 13,366.33 8,700.43

Extra-ordinary items 0 0 0 0 0

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 PBT (Post Extra-ord Items) 24,549.97 23,544.47 15,703.18 13,366.33 8,700.43
Tax 5,293.01 5,069.55 2,916.84 2,390.35 1,130.44

Reported Net Profit 19,256.96 18,474.92 12,786.34 10,975.98 7,569.99

Total Value Addition 52,485.03 43,099.49 34,094.83 27,460.75 20,493.26

Preference Dividend 0 28.76 19 22 11

Equity Dividend 15,473.87 6,267.33 4,305.88 4,893.04 2,740.10

Corporate Dividend Tax 2,591.54 788.96 712.18 797.34 450.82

Per share data (annualised)

Shares in issue (lakhs) 19,587.28 19,587.28 19,572.21 19,572.21 19,572.21

Earning Per Share (Rs) 98.31 94.17 65.23 55.97 38.62

Equity Dividend (%) 7,900.00 3,200.00 2,200.00 2,500.00 1,400.00

Book Value (Rs) 231.87 224.9 165.86 126.49 99.53

P/L A/C OF INFOSYS

Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
INCOMES

Sales Turnover 47,300.00 44,341.00 36,765.00 31,254.00 25,385.00

Excise Duty 0 0 0 0 0

Net Sales 47,300.00 44,341.00 36,765.00 31,254.00 25,385.00

Other Income 3,749.00 2,576.00 2,298.00 2,313.00 1,147.00

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 Stock Adjustments 0 0 0 0 0

Total Income 51,049.00 46,917.00 39,063.00 33,567.00 26,532.00

Expenditure

Raw materials 39 21 22 0 0

Power & Fuel Cost 185 181 180 0 0

Employee Cost 25,115.00 24,350.00 19,932.00 15,481.00 12,464.00

Other Manufacturing
Expenses 4,284.00 3,990.00 2,969.00 3,947.00 3,196.00

Selling and Admin Expenses 0 0 0 0 0

Miscellaneous Expenses 3,715.00 3,272.00 2,647.00 1,765.00 1,311.00

Preoperative Exp
Capitalised 0 0 0 0 0

Total Expenses 33,338.00 31,814.00 25,750.00 21,193.00 16,971.00

Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

OPERATING PROFIT 13,962.00 12,527.00 11,015.00 10,061.00 8,414.00

PBDIT 17,711.00 15,103.00 13,313.00 12,374.00 9,561.00

Interest 0 0 0 0 0

PBDT 17,711.00 15,103.00 13,313.00 12,374.00 9,561.00

Depreciation 913 1,101.00 956 794 740

Other Written Off 0 0 0 0 0

Profit Before Tax 16,798.00 14,002.00 12,357.00 11,580.00 8,821.00

Extra-ordinary items 0 0 0 0 0

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 PBT (Post Extra-ord Items) 16,798.00 14,002.00 12,357.00 11,580.00 8,821.00

Tax 4,634.00 3,808.00 3,241.00 3,110.00 2,378.00

Reported Net Profit 12,164.00 10,194.00 9,116.00 8,470.00 6,443.00

Total Value Addition 33,299.00 31,793.00 25,728.00 21,193.00 16,971.00

Preference Dividend 0 0 0 0 0

Equity Dividend 5,111.00 3,618.00 2,412.00 2,699.00 3,445.00

Corporate Dividend Tax 1,034.00 615 403 438 568

Per share data

(annualised)

Shares in issue (lakhs) 11,484.72 5,714.03 5,742.36 5,742.30 5,741.52

Earning Per Share (Rs) 105.91 178.4 158.75 147.5 112.22

Equity Dividend (%) 1,190.00 1,260.00 840 940 1,200.00

Book Value (Rs) 418.54 736.64 627.95 518.21 426.73

Indian Businesses Burst Into the Cloud with Tata

Consultancy Services – A Case Study

The IT Infrastructure Services division of Tata Consultancy Services (TCS) intended to give
Indian businesses access to infrastructure, applications and other resources from the cloud.
By using VMware virtualization to power its India Cloud Platform, TCS can reduce
customer costs by 30 percent, bring new customers on board in 20 days, and deliver
minimum infrastructure availability of 99.9 percent and application availability of 99.5
percent.

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TCS’ offerings include application development and maintenance, business intelligence and
business process services. TCS employs more than 285,000 professionals in 44 countries and
in FY13 generated annual revenue of US$11.6 billion. In 2005, TCS created TCS IT
Infrastructure Services (TCS-IT IS) to help businesses develop infrastructure that improved
revenues, facilitated cost management and delivered better customer service. TCS-IT IS is
growing at 30 percent annually and generates more than US$1 billion in revenue each year.

The Challenge
In 2009, TCS-IT IS noticed that businesses around the world were adopting on-demand
access to third-party infrastructure. rather than investing in on-premise servers, storage and
networking equipment. TCS-IT IS found many of these businesses wanted to extend this
model to access applications such as enterprise resource planning as part of an integrated
solution stack—comprising hardware, networking, software and services—from a third-party
provider. TCS-IT IS started addressing this need by delivering infrastructure and applications
as a service from its datacenters to small businesses in industries such as healthcare,
education, retail and manufacturing. However, in 2010, TCS-IT IS decided to develop a
cloud service that would extend its multi-tenant datacenter offerings to larger businesses. The
proposed India Cloud Platform (ICP) would allow businesses of all sizes to access
infrastructure and applications from the cloud. TCS-IT IS wanted the ICP to scale easily,
enable new customers to be added quickly and keep sensitive information secure. The ICP
would also complement TCS-IT IS’ consulting services, which businesses could use to
ensure their data in the cloud complied with internal policies and governance regimes, as
well as external regulations. “We wanted to build a shared services platform that enabled the
logical separation of customers’ applications and data,” said Mahesh Menon, Head – TCS-IT
IS India Cloud Platform. “We needed a partner that could meet these requirements, while
helping us manage the cloud platform as efficiently and costeffectively as possible.”

The Solution
After reviewing its options, TCS-IT IS decided to implement VMware datacenter
virtualization for the first stage of the ICP project. This involved extending the services
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available through TCS-IT IS’ multi-tenant datacenter environment. “We went with VMware
because of the abundance of skill and knowledge about the vendor’s virtualization
technologies in the marketplace, and the fact no other product was as mature,” said Menon.
In 2011, TCS-IT IS began ramping up from a multi-tenant datacenter to a full cloud service
and conducted a more comprehensive evaluation of the virtualization market. This included
completing proofs of concept with two technology providers headquartered in the United
States. “With one of the providers, we couldn’t mix and match data storage types,” said
Menon. “We needed this because our existing storage area network did not have the capacity
on its own to manage our workloads. “We also found that the products supplied by the other
vendors were far behind in providing centralized management over a single console.” At this
time, VMware was finalizing a new release of VMware vSphere® and briefed TCS-IT IS on
features that made it easier to provision physical and virtual machines, enforce security and
compliance, manage networks and control traffic flows. “We opted to stay with VMware
because of its technical superiority and our comfort with the technology,” said Menon. TCS-
IT IS needed some deep expertise to help deploy the cloud and engaged VMware
Professional Services Organization (PSO). “When it came to this stage of the project, we
wanted to ensure that our choice of platforms and technologies was right, and that we could
support a range of usage scenarios,” said Menon. “We selected VMware PSO to undertake
the deployment so we could draw on the team’s experience and expertise,” he added. “This
proved to be a good decision as we could work with them to complete the implementation
within budget in only three weeks.” VMware PSO used well-established techniques and
practices to train 10 TCS-IT IS consultants in running the platform. “The PSO team’s
knowledge transfer was excellent and our consultants are now skilled in helping customers
achieve value from the TCS-IT IS India Cloud Platform,” said Menon. Thanks to VMware
PSO, TCS-IT IS is now running more than 2,000 virtual machines on 80 servers at a ratio of
25:1 to deliver the cloud platform. This high density has helped TCS-IT IS extract
considerable value from its hardware investments. Business Results & Benefits VMware
vSphere—combined with technologies from Cisco, HP and NetApp—has enabled TCS-IT IS
to provide cloud-based infrastructure services that meet the needs of businesses of all sizes.
“The ICP is a modular, scalable and configurable cloud platform that gives Indian businesses

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the benefits of increased efficiencies, faster go-tomarket, market-leading technologies;
predictable spend, IT talent on call and better business results,” said Menon. ICP customers
pay monthly or quarterly to access infrastructure on demand rather than investing several
hundred thousand dollars in on-premise datacenter equipment. This gives them greater
certainty over costs and enables more accurate budgeting. The ability to “burst” cloud
resources to meet demand peaks and scale to support long-term growth is also extremely
valuable. “Our customers no longer have to worry about issues like calculating their likely
infrastructure needs over five years,” said Menon.

TCS-IT IS believes businesses can use the ICP to lower their IT costs by up to 30 percent,
while gaining access to an end-to-end infrastructure management service. The ICP also
allows businesses to access applications such as enterprise resource planning systems and
email as a service from the cloud. They can either migrate their own systems into the cloud,
or take advantage of TCS-IT IS’ own cloud-based business process outsourcing services,
which encompass human resources, finance, accounting, procurement and analytics. The ICP
currently supports more than 10,000 Microsoft Exchange Server 2010 mailboxes on behalf
of customers. TCS-IT IS has standardized the process for migrating SAP, Exchange and
several other widely-used systems into the ICP, ensuring customers can access them quickly
and without major disruption. For some businesses, moving to the cloud can take less than a
month. “A couple of customers transitioned to and went live on our platform within about 20
days,” said Menon. The ICP ensures the logical separation of individual customers’ data and
applications, and delivers high availability levels. While service level agreements (SLAs)
vary by customer, SLAs for infrastructure availability start at 99.9 percent and SLAs for
application availability at 99.5 percent. With the ICP now well established, Menon is
extremely pleased with TCS-IT IS’ decision to choose VMware as the platform’s underlying
technology. “Implementing VMware has enabled us to deploy a service that makes the
difficult to-attain benefits of cloud computing easily accessible for businesses across India,”
he said.

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Companies can circulate financial statements during short
notice for general meetings – An Article

NEW DELHI: Corporates convening general meetings at a shorter notice, less than the 21
days mandated under the company’s law, can circulate financial statements during that
period, according to the government.

Under the Companies Act, 2013, general meeting can be called only by giving at least 21
days’ notice. In case of a general meeting being held within a shorter notice, it has to be
approved by a minimum 95 per cent of the members.

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The Corporate Affairs Ministry has clarified that in case a general meeting is convened at a
shorter notice, financial statements too can be circulated during that time.
"A company holding a general meeting after giving a shorter notice...may also circulate
financial statements (to be laid/considered in the same general meeting) at such shorter
notice," the ministry said in a recent circular.
Besides, companies can place unaudited financial statements of their subsidiaries subject to
certain conditions.

This would be applicable to foreign subsidiary which is not required to get its financial
statements audited as per legal requirements prevalent in the country of its incorporation and
those that do not get such financial statements audited.
However, the ministry has said that such financial statements need to be translated into
English, if the original accounts are not in that language.
"Further, the format of accounts of foreign subsidiaries should be, as far as possible, in
accordance with requirements under Companies Act, 2013. In case, this is not possible, a
statement indicating the reasons for deviation may be placed/ filed along with such
accounts," the circular said.
The circular has been issued after stakeholders' sought clarity on both matters.
Leading consultancy KPMG in India said these clarifications indicate that the ministry is
committed to addressing the practical challenges faced by corporates while implementing the
requirements under the Companies Act, 2013.
These clarifications are a step in the right direction and echo the ministry's efforts "to nurture
a supportive regulatory environment," it added.

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New accounting norms to impact financial statement
reporting: ICAI – An Article

NEW DELHI: The apex body for chartered accountants ICAI today said the
new accounting regime will change the way firms report their financial statements as the new
norms require them to make more disclosures.
The new regime would bring in accounting based on 'fair value' model in various cases as
well as separate standards for financial instruments.
The system has made departure from the International Financial Reporting Standards with
respect to classification of Foreign Currency Convertible Bonds (FCCBs) and regarding
recognition of bargain purchase gain arising on a business combination.
The companies would also have options not to comply with IFRS-converged Indian
Accounting standards related to classification of a loan liability in case any loan condition is

67 | P a g e
not met, recognition of investment property using fair value model, and recognition of lease
rentals, among others.

The government has notified the rules for Indian Accounting Standards (Ind AS) which will
be mandatory for companies from April 1, 2016.
Ind AS norms, which are converged with global standards IFRS, can be followed by
corporates on a voluntary basis from April 1 this year.
The Institute of Chartered Accountants of India (ICAI) newly elected president Manoj
Fadnis today said that "there will be some impact (on the financial statements) as higher
levels of disclosures will be required and for the first time there will be more 'fair value'
accounting".
Additionally, Fadnis also said that the new accounting norms "have a well-defined standard
in place for financial instruments which would be made applicable".
"So there will be some changes in which financial statements are reported," he told reporters
here.

Talking about the carve outs in IFRS-converged Ind As, Fadnis said that while those
pertaining to FCCBs and bargain purchasing are mandatory the other carve outs are optional.
"We have two mandatory carve outs which are principle based standards and it is in the
national interest why we are holding on to them... we will continue the dialogue
with International Accounting Standards Board(IASB) and see that over a period of time the
carve outs are minimised," he said.

"While we would encourage the companies to follow these standards in all other areas for
certain other reasons if the Indian corporates do not want to follow the international
treatment we have given them an option," Fadnis noted.
He said that if the firms exercise these options they would be need to make proper
disclosures to keep investors adequately informed.

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 BIBLIOGRAPHY

Books Reffered:

 Accountancy. R.K. Mittal,A.K.Jain.

 Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma

 Essentials of Corporate Finance 2nd edition, Irwin /McGraw-Hill.Ross, S.A., R.W.

Westerfield and B.D. Jordan.

 Basic Financial Management, 8th edition, Prentice -Hall, Inc. Scott, D.F., J.D Martin,
J.W. Petty and A.Keown.

WEBSITES

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  Www.Moneycontrol.Com

 WWW.Money.Rediff.Com

 Www.Wikipedia.Org

 Www.Google.Com

 Www.Scribd.Com

 Www.Managementparadise.Com

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