ANALYSIS OF TATA CONSULTANCY SERVICES

I. INTRODUCTION

1.1. INTRODUCTION:

Established in 1968, Tata Consultancy Services a member of the Tata Group has grown to its

current position as the largest IT services firm in Asia based on its record of outstanding service,

collaborative partnerships, innovation, and corporate responsibility.

It was founded by Jamsetji Tata in 1848 and it is one of India’s most respected institutions today.

Their mission reflects the Tata Group's longstanding commitment to providing excellence. To

help customers achieve their business objectives by providing innovative, best–in–class

consulting, IT solutions and services, and to actively engage all stakeholders in a productive,

collaborative, and mutually beneficial relationship.

TCS' ability to deliver high–quality services and solutions is unmatched. They are the world’s

first organization to achieve an enterprise–wide Maturity Level 5 on both CMMI and P–CMM,

using the most rigorous assessment methodology – SCAMPISM. Additionally, TCS’ Integrated

Quality Management System (iQMS) integrates process, people and technology maturity through

various established frameworks and practices including IEEE, ISO 9001:2000, CMMI, SW–

CMM, P–CMM and 6–Sigma.

It is largest IT employer in India. It provides services to wide range of segment like banking &

financial services, energy, resources & utilities, government, telecom, media & information

services, etc.

TCS acquired Citigroup Global Services (CGSL); India based BPO for $505 million. The

acquisition broadened TCS’s portfolio of end–to–end IT and BPO services in the global Banking

and Financial Services (BFS) sector. TCS’s enhanced scale and expertise will be providing

service improvements to Citi and Citi’s customers. CGSL has more than 12,000 employees

located in India and expected to generate revenues of approximately $278 million in 2008.

Tata Consultancy Services  delivers real results to global businesses, ensuring a level of certainty

no other firm can match TCS offers a consulting–led, integrated portfolio of IT and IT–enabled

services delivered through its unique Global Network Delivery Model, recognized as the

benchmark of excellence in software development. TCS has over 143,000 of the world's best

trained IT consultants in 42 countries. 

Tata Consultancy Services announced the launch of TCS BaNCS Core Banking Release 12.0 at

the annual flagship event for banking and capital markets, SIBOS 2011, in Toronto.

In 2014 TCS announced to set up largest Corporate Learning Center in Thiruvananthapuram

with a capacity to train 50,000 IT professionals every year

1.2. PRODUCTS AND SERVICES OFFERED BY THE COMPANY

Technology Products ‘

Exegenix Intelligent Document Conversion Solutions

SupportCentral – Business Social Productivity Platform

TCS Digital Certification Services / Public Key Infrastructure (PKI) Suite

TCS Tax Mantra Integrated Tax Solution

TCS Data Cleansing Framework

TCS Business Rules Engine

TCS Experience Based KM (Knowledge Management)

TCS Call Management Solution

TCS Certificate Validation Server

TCS File Authentication Solution

TCS eLearning Effectiveness Measurement Solution

TCS Code Generator Framework

TCS Saakshi (Time Stamping Solution)

TCS Form Authentication Solution

TCS eVOLv Multimedia Authoring Solution

TCS Direct Metal Deposition CAM

TCS Stand Alone Post Processor

TCS WebFACTORe (Web–enabled Plant Maintenance Management Tool)

TCS Enterprise Integration and Control Environment

TCS SmartBox (Next Generation Industrial Controller Development Framework) 

TCS Sevak – Self Service Terminals

TCS Rapid Sigma (Six Sigma Solution for Continuous Improvement)

TCS Teamcenter for Medical Devices

Other Products –

TCS Clin–e2e

TCS Hospital Management Solution

TCS Silicone Ambulatory ECG Device and Solution

TCS Enterprise Integration and Control Environment Solution/ Energy and Utilities

TCS Bio–informatics Solution

VERICUT – Machine Simulation Software

Services:

IT Services–

Custom Application Development

Application Management

Migration & Re–engineering

System Integration

Testing

Performance Engineering

Infrastructure Services–

Infrastructure Readiness Assessment

IT Service Desk

Data Center Management

End User Computing Services

Database Services

Application Management Services

Command Center Services

Managed Security Services

Enterprise Solutions

Supply Chain Management

Master Data Management

Customer Relationship Management

RFID

Call Management

Oracle

SAP

Consulting

Business Consulting

IT Consulting

Business Solutions

Business Process Outsourcing

Customer Interaction Management (CIM)

Finance and Accounting

Human Resources Outsourcing

Knowledge Process Outsourcing

Supply Chain Management

Reconciliations

Benefits Administration

Payroll

Industry–specific Offerings

Business Intelligence & Performance Management–

Business Intelligence

Business Process Management

Enterprise Data Management

Integration Services

Knowledge Management / Enterprise Content Management

Engineering & Industrial Services–

New Product Development Solutions

Product Lifecycle Management

Plant Solutions & Services

Geospatial Technology Solutions

Industry–specific Offerings

Small and Medium Business

Subsidiaries:

TCS' directly–held subsidiaries include:

AP Online Limited (India)

C–Edge Technologies Limited (India)

CMC Limited (India)

Diligenta Limited (UK)

Tata Consultancy Services Canada Inc. (Canada)

Tata America International Corporation (USA)

Tata Consultancy Services Asia Pacific Pte Limited (Singapore)

Tata Consultancy Services Belgium S.A. (Belgium)

Tata Consultancy Services Deutschland GmbH (Germany)

Tata Consultancy Services France S.A. (France)

Tata Consultancy Services Netherlands B.V. (Netherlands)

Tata Consultancy Services Sverige AB (Sweden)

Tata Consultancy Services Switzerland Ltd (Switzerland)

Tata Infotech (Singapore) Pte. Limited * (Singapore)

Tata Infotech Deutschland GmbH * (Germany)

TCS FNS Pty. Limited (Australia)

TCS Iberoamerica S.A. (Uruguay)

WTI Advanced Technology Limited (India)

TCS' indirectly held subsidiaries include:

CMC Americas Inc. (USA)

Swedish Indian IT Resources AB (Sweden)

Tata Information Technology (Shanghai) (China)

Tata Consultancy Services Solution Center S.A. (Uruguay)

TCS Argentina S.A. (Argentina)

TCS Brazil S/C Limitada (Brazil)

Tata Consultancy Services de Mexico S.A. De. C.V. (Mexico)

TCS Inversiones Chile Limitada (Chile)

Tata Consultancy Services de Espana S.A. (Spain)

Tata Consultancy Services Do Brasil S.A. (Brazil)

Tata Consultancy Services Chile S.A. (Chile)

TCS Italia SRL (Italy)

Tata Consultancy Services Japan Limited (Japan)

Tata Consultancy Services Malaysia SDN. BHD. (Malaysia)

Tata Consultancy Services Luxembourg S.A Capellen (G.D. de Luxembourg)

Tata Consultancy Services Portugal Unipesoal Limitada (Portugal)

Tata Consultancy Services Chile Limitada (Chile)

Comicrom S.A. (Chile)

Sisteco S.A. (Chile)

Syscrom S.A. (Chile)

Pentacrom S.A. (Chile)

Pentacrom Servicios S.A. (Chile)

Custodia De Documentos Intres Limitada (Chile)

Financial Network Services (Holdings) Pty Limited (Australia)

Financial Network Services Pty Limited (Australia)

Financial Network Services (Facilities Management) Pty Limited (Australia)

Financial Network Services (Europe) plc (UK)

Financial Network Services Malaysia Sdn Bhd (Malaysia)

TCS Financial Network Services (Indonesia)

Chong Wan Investments Limited (Hong Kong)

Financial Network Services (Africa) Pty Ltd. (South Africa)

Financial Network Services Chile Limitada (Chile)

Financial Network Services (H.K.) Limited (Hong Kong)

Achievements/ recognition:

In 2014– TCS was Honored by Lumity as the 2014 Community Corps Corporate Champion

TCS Wins Prestigious Association of Management Consulting Firms Award

TCS recognized as world’s fastest growing global IT Services brand

TCS UK wins Gold Award for ‘Innovation in Learning’

TCS is the only IT services organization to be a part of ISO 15926 real time interoperability

network grid (iRING) Version 1.0.0

TCS achieves Gold status in Business in the Community's (BitC) Corporate Responsibility

Index (CRI) 2007–08.

Largest IT services firm in Asia.

They are the world’s first organization to achieve an enterprise–wide Maturity Level 5 on both

CMMI® and P–CMM®, using the most rigorous assessment methodology – SCAMPISM.

TCS’ Integrated Quality Management System (iQMS’) integrates process, people and

technology maturity through various established frameworks and practices including IEEE,

ISO 9001:2000, CMMI, SW–CMM, P–CMM and 6–Sigma.

TCS tops the DataQuest DQTop20 list of IT Services providers in India for 2008

TCS ranked among Top 25 in Business Week's 2007 Information Technology 100

TCS awarded top position in 2007 'Global Services' 100 ‘Top 10 Best Performing IT Services

providers’ category

TCS was awarded the Business Process Outsourcing Service Provider 2011 at the Frost &

Sullivan Asia Pacific ICT Awards ceremony hosted in Singapore.

II. TCS FINANCIAL HIGHLIGHTS AND FACTSHEET

III. FINANCIAL RATIOS

------------------- in Rs. Cr. -------------------

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

Investment Valuation Ratios

Face Value 1.00 1.00 1.00 1.00 1.00

Dividend Per Share -- -- -- -- --

Operating Profit Per Share (Rs) 124.99 128.41 92.17 73.75 57.11

Net Operating Profit Per Share (Rs) 483.21 417.67 321.83 249.81 190.70

Free Reserves Per Share (Rs) -- -- -- -- --

Bonus in Equity Capital 79.59 79.59 79.65 79.65 79.65

Profitability Ratios

Operating Profit Margin(%) 25.86 30.74 28.63 29.52 29.94

Profit Before Interest And Tax

Margin(%)23.17 28.52 26.43 27.40 27.53

Gross Profit Margin(%) 23.96 29.09 26.92 27.64 27.97

Cash Profit Margin(%) 21.83 24.78 23.61 23.19 26.16

Adjusted Cash Margin(%) 21.83 24.78 23.61 23.19 26.16

Net Profit Margin(%) 20.97 23.42 22.09 21.29 24.29

Adjusted Net Profit Margin(%) 20.28 22.96 21.68 21.11 23.90

Return On Capital Employed(%) 50.87 51.44 46.67 46.96 44.95

Return On Net Worth(%) 39.20 38.89 36.05 35.25 37.11

Adjusted Return on Net Worth(%) 38.64 39.23 36.46 35.62 37.61

Return on Assets Excluding

Revaluations258.51 251.16 196.94 150.62 124.69

Return on Assets Including

Revaluations258.51 251.16 196.94 150.62 124.69

Return on Long Term Funds(%) 51.06 51.58 46.77 46.96 45.01

Liquidity And Solvency Ratios

Current Ratio 2.64 2.97 3.00 2.69 2.90

Quick Ratio 2.64 2.98 3.01 2.66 2.88

Debt Equity Ratio 0.01 0.01 0.01 0.01 0.01

Long Term Debt Equity Ratio -- -- 0.01 0.01 0.01

Debt Coverage Ratios

Interest Cover 248.71 660.45 374.06 627.33 417.19

Total Debt to Owners Fund 0.01 0.01 0.01 0.01 0.01

Financial Charges Coverage Ratio 265.97 695.47 396.33 668.62 444.95

Financial Charges Coverage Ratio

Post Tax208.80 533.53 310.29 510.74 371.22

Management Efficiency Ratios

Inventory Turnover Ratio 5,890.01 5,378.86 2,978.26 2,751.48 1,635.61

Debtors Turnover Ratio 4.90 5.06 4.52 4.19 4.85

Investments Turnover Ratio 5,890.01 5,378.86 2,978.26 2,751.48 1,635.61

Fixed Assets Turnover Ratio 5.69 6.22 5.73 5.53 5.18

Total Assets Turnover Ratio 1.90 1.72 1.76 1.85 1.74

Asset Turnover Ratio 1.85 1.82 1.80 1.77 1.70

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- -- --

Number of Days In Working

Capital119.76 123.19 112.64 116.40 113.88

Profit & Loss Account Ratios

Material Cost Composition -- -- -- -- --

Imported Composition of Raw

Materials Consumed-- -- -- -- --

Selling Distribution Cost

Composition-- -- -- -- --

Expenses as Composition of Total

Sales-- -- -- -- --

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 91.22 36.91 36.21 54.85 35.32

Dividend Payout Ratio Cash Profit 83.64 34.48 33.60 50.39 32.67

Earning Retention Ratio 7.47 63.41 64.20 45.73 65.15

Cash Earning Retention Ratio 15.26 65.81 66.75 50.09 67.74

AdjustedCash Flow Times 0.01 0.01 0.01 0.01 0.01

IV.

V. AUDIT REPORT OF TCS FOR YEAR ENDED 31ST MARCH, 2015

INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF

TATA CONSULTANCY SERVICES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Tata Consultancy Services

Limited ('the Company'), which comprise the Balance Sheet as at March 31, 2015 and the

Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a

summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the

Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that

give a true and fair view of the financial position, financial performance and cash flows of the

Company in accordance with the accounting principles generally accepted in India, including the

Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies

(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting

records in accordance with the provisions of the Act for safeguarding the assets of the Company

and for preventing and detecting frauds and other irregularities; selection and application of

appropriate accounting policies; making judgments and estimates that are reasonable and

prudent; and design, implementation and maintenance of adequate internal financial controls,

that were operating effectively for ensuring the accuracy and completeness of the accounting

records, relevant to the preparation and presentation of these financial statements that give a true

and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and

matters which are required to be included in the audit report under the provisions of the Act and

the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section

143(10) of the Act. Those Standards require that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance about whether the financial statements are

free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the

disclosures in the financial statements. The procedures selected depend on the auditor's

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers

internal financial control relevant to the Company's preparation of the financial statements that

give a true and fair view in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on whether the Company has in

place an adequate internal financial controls system over financial reporting and the operating

effectiveness of such controls. An audit also includes evaluating the appropriateness of the

accounting policies used and the reasonableness of the accounting estimates made by the

Company's Board of Directors, as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,

the aforesaid financial statements give the information required by the Act in the manner so

required and give a true and fair view in conformity with the accounting principles generally

accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and

its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

a) As required by the Companies (Auditor's Report) Order, 2015 ('the Order') issued by the

Central Government in terms of Section 143(11) of the Act, we give in the Annexure a

statement on the matters specified in paragraphs 3 and 4 of the Order.

b) As required by Section 143(3) of the Act, we report that:

i) We have sought and obtained all the information and explanations which to the best

of our knowledge and belief were necessary for the purposes of our audit.

ii) In our opinion, proper books of account as required by law have been kept by the

Company so far as it appears from our examination of those books.

iii) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement

dealt with by this Report are in agreement with the books of account.

iv) In our opinion, the aforesaid financial statements comply with the Accounting

Standards specified under Section 133 of the Act, read with Rule 7 of the Companies

(Accounts) Rules, 2014.

v) On the basis of the written representations received from the Directors as on March

31, 2015, taken on record by the Board of Directors, none of the Directors is

disqualified as on March 31, 2015 from being appointed as a Director in terms of

Section 164 (2) of the Act.

vi) With respect to the other matters to be included in the Auditors' Report in accordance

with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and

to the best of our information and according to the explanations given to us:

(1) The Company has disclosed the impact of pending litigations on its financial

position in its financial statements as of March 31, 2015;

(2) The Company has made provision in its financial statements, as required under

the applicable law or accounting standards, for material foreseeable losses on long

term contracts;

(3) There has been no delay in transferring amounts, required to be transferred, to the

Investor Education and Protection Fund by the Company.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm Registration No. 117366W/W–100018)

P. R. RAMESH

Partner

(Membership No. 70928)

Mumbai, April 16, 2015

VI. CONCLUSION

TCS is a very strong company in India and among its competitors in the World too. It also had

the highest market capitalization on the Bombay Stock Exchange making it India’s most

valuable company. The ratios and the key highlights about its financials reflect its strong position

in the market.

It is noted that the Audit Report made by Tata Consultancy Services very well complies with the

requirements laid down by the Companies Act, 2013 as well as the Standards on Auditing laid

down by the Institute of Chartered Accountants of India. Also, the reporting responsibilities

under the newly modified Companies (Auditor’s Report) Order, 2015 (CARO, 2015) has been

very well complied by Tata Consultancy Services.

Considering its size of operations and reputation in the industry, and also the IT Industry boost

that India is experiencing currently, Tata Consultancy Services leaves no margin for error when

audit is considered. There are no discrepancies noticed by Deloitte Haskins and Sells LLP, who

are the auditors of TCS and hence they have issued a clean audit report without any major

observations.

Considering all above facts and figures, TCS has maintained a very strong position in India and

globally as well.

VII. BIBLIOGRAPHY

http://www.tcs.com/investors/financial_info/Pages/default.aspx

http://resource.cdn.icai.org/35921aasb-illus25437a.pdf

http://www.tcs.com/about/Pages/default.aspx

http://resource.cdn.icai.org/37520aasb27034-cfs-co.pdf

http://taxguru.in/company-law/download-caro-2015-audit-report-word-format.html

https://en.wikipedia.org/wiki/Tata_Consultancy_Services

http://www.business-standard.com/company/tcs-5400/annual-report/auditors-report

TCS Annual Report 2014-2015

http://www.tcs.com/investors/Documents/Presentations/TCS_Factsheet_Q4_15.PDF