A

PROJECT REPORT

ON

ANALYSIS OF IT INDUSTRY

BY

HITESH GUPTA (08)

NEHA MALI (18)

SHAILESH GAWANDE (70)

VRUSHALI BORSE (46)

NIKHIL KASHMIRE (19)

KIRAN WAGHMARE (59)

SONALI BADOLE (71)

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN PARTIAL FULFILMENT OF THE REQUIRMENT FOR ELECTIVE

INDUSTRY ANALYSIS AND DESK RESEARCH

IN

MASTER OF BUSINESS ADMINISTRATION (MBA)

UNDER THE GUIDANCE OF

DR. DIVYA LAKHANI

THROUGH

DR.VIKHE PATIL FOUNDATION’S

PRAVARA CENTRE FOR MANAGEMENT AND RESEARCH

DEVELOPMENT PUNE- 411016

MARCH 2017

I

ACKNOWLEDGEMENT

It was great pleasure to do this project of Industrial Analysis & Desk Research Project

on “ANALYSIS OF IT INDUSTRY” as this project leads me to learn many things. I would love to say few words.

We are extremely grateful and remain indebted to our guide Dr. Divya Lakhani for

being a source of inspiration and or his constant support and guide in the design

implementation and evaluation of the project. We are thankful to them for their constant

constructive criticism and invaluable suggestions which benefited us a lot while developing

the project.

She has been a constant source of inspiration and motivation for hard work. She is

very co-operative and thoughtful this project work. Through this column, it would be our

almost pleasure to express our warm thanks to her for their encouragement, co-operative and

consent without which we might be able to accomplish this project.

We also express our gratitude to all staff members, friends who were directly &

indirectly instrument in enabling us to stay committed for the project.

We are also thankful to our Director Dr. Manoj Narwade who supports and give

motivation for the project.

II

DECLARATION

We hereby declare that the project titled “ANALYSIS OF IT INDUSTRY” is an original

piece of research work carried out by us under the guidance of Dr. Divya Lakhani. The

information has been collected from genuine and authentic sources. The work has been

submitted in partial fulfilment of the requirement of the elective ‘Industry Analysis and

Desk Research of Master of Business Administration to Savitribai Phule Pune

University.

Sr. No Name of Student Signature

1 Hitesh Gupta

2 Neha Mali

3 Shailesh Gawande

4 Vrushali Borase

5 Nikhil Kashmire

6 Kiran Waghmare

7 Sonali Badole

Date: 24th

March 2017

Place: Pune

III

INDEX

Chapter No. Description Page No.

Title Page

Acknowledgement I

Declaration II

Index III

List of Table IV

List of Figures V

Chapter 1 INTRODUCTION

1.1 Industry Analysis 2

1.2 Policies 8

Chapter 2 PROMOTERS AND MANAGEMENT ETHOS

2.1 Corporate DNA 13

2.2 Management Team & their Contribution to the Organization 14

2.3 Corporate Governance 20

2.4 Corporate Social Responsibility (CSR) Initiatives 25

Chapter 3 EXTERNAL ENVIRONMENT

3.1 Governing Body - Controlling Ministry/Regulator 34

3.2 Measures taken by Governing Body to streamline business

practices

36

3.3 Issues affecting IT industry. 37

Chapter 4 FINANCIALS

4.1 Short Term Ratios 39

4.2 Long Term Ratios 40

4.3 Profitability Ratios 41

4.4 Over all rank of Companies. 44

Chapter 5 RECENT DEVELOPMENTS

5.1 Expansion of IT sector in Global Market. 47

5.2 Technological Advancements 48

5.3 Awards & recognitions 50

Appendix Bibliography 53

IV

LIST OF TABLES

Table No. Description Page No.

1.1. SWOT Analysis 7

2.1 WIPRO - List of Board Members 15

2.2 INFOSYS- List of Board Members 17

2.3 TCS - List of Board Members 19

2.4 WIPRO- Objectives of Committee 20

2.5 INFOSYS - Objectives of Committee 22

2.6 TCS -Objectives of Committee 24

4.1.1. Liquid Ratio 39

4.2.1. Fixed Asset Turnover Year Ratio 40

4.2.2. Proprietary Year Ratio 41

4.2.3. Debt-Equity Year Ratio 41

4.3.1 Gross Profit Year Ratio 42

4.3.2 Net Profit Year Ratio 42

4.3.3. Earnings Per Share Year Ratio 43

V

LIST OF FIGURES

Figure No. Description Page No.

1.1 Segment- wise Market Share 6

4.1.1. Liquid Ratio/Current Ratio 39

4.2.1. Fixed Asset Turnover Ratio 40

4.2.2. Proprietary Ratio 41

4.3.1. Gross Profit Ratio 42

4.3.2. Net Profit Ratio 43

4.3.3. Earnings Per Share (EPS) 43

5.1. Growth in Total Subscribers 47

1

Chapter- 1 INTRODUCTION.

2

Chapter:-1

1. Introduction

1.1 Industry Analysis.

India is the world's largest sourcing destination for the information technology (IT) industry,

accounting for approximately 67 per cent of the US$ 124-130 billion market. The industry

employs about 10 million workforces. More importantly, the industry has led the economic

transformation of the country and altered the perception of India in the global economy. India's

cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the

US, continues to be the mainstay of its Unique Selling Proposition (USP) in the global sourcing

market. However, India is also gaining prominence in terms of intellectual capital with several

global IT firms setting up their innovation centre in India. Information technology in India is an

industry consisting of two major components- IT Services and business process

outsourcing (BPO).

The major cities that account for about nearly 90% of that sector’s exports are Bengaluru

(Bangalore), Pune, Mumbai, Noida, Chennai, Kolkata, Trivandrum, Hyderabad, Jammu &

Kashmir. Bengaluru is considered to be Silicon Valley of India because it is the leading IT

exporter. Exports dominate the industry and constitute about 77% of the total industry revenue.

However, the domestic market is also significant with a robust revenue growth. The industry’s

share of total Indian exports (merchandise plus services) increased from less than 4% in FY1998

to about 25% in FY2012. According to Gartner, the “Top Five Indian IT Services Providers” are

Tata Consultancy services, Infosys, Cognizant, Wipro and HCL Technologies.

The IT industry has also created significant demand in the Indian education sector, especially

for engineering and computer science. The Indian IT and ITeS industry is divided into four

major segments – IT services, Business Process Management (BPM), software products and

engineering services, and hardware.

3

Source

India is the world's largest sourcing destination for the information Technology. We select

these three industry from www.nasscom.in whose work is to controlling & governing the IT

industries.

Top three industries are :-

1. WIPRO Limited (Western India Palm Refined Oils Limited)

2.INFOSYS

3. TCS {Tata Consultancy Services}

1.1.1 Emerging First Generation Entrepreneurs and their impact:-

1. WIPRO Limited

(Western India Palm Refined Oils Limited)

Azim Hashim Premji (born 24 July 1945) is an Indian business tycoon, investor,

and philanthropist. who is the chairman of Wipro Limited. He is informally known as the Czar

of the Indian IT Industry.

Azim Premji later diversified the company to bakery fats, ethnic ingredient based toiletries,

hair care soaps, baby toiletries, lighting products, and hydraulic cylinders. In the 1980s, the

young entrepreneur, recognizing the importance of the emerging IT field, took advantage of the

vacuum left behind by the expulsion of IBM from India, changed the company name

to Wipro and entered the high-technology sector by manufacturing minicomputers under

technological collaboration with an American company Sentinel Computer

Corporation. Thereafter Premji made a focused shift from soaps to software.

4

2. INFOSYS

Nagavara Ramarao Narayana Murthy (born 20 August 1946), commonly referred to

as Narayana Murthy, is an Indian IT industrialist and the co-founder of Infosys, a multinational

corporation providing business consulting, technology, engineering, and outsourcing

services. Murthy started his career at IIM Ahmedabad as chief systems programmer. There he

worked on India's first time-sharing computer system and designed and implemented a BASIC

interpreter for Electronics Corporation of India Limited. He started a company named

Softronics. Murthy and six software professionals founded Infosys in 1981 with an initial

capital injection of Rs 10,000, which was provided by his wife Sudha Murthy. At Infosys he

articulated, designed and implemented the Global Delivery Model for IT services outsourcing

from India. He was chairman of the board from 2002 to 2006, after which he became chairman

of the board and Chief Mentor. In August 2011, he retired from the company, taking the title

chairman Emeritus

3. TCS {Tata Consultancy Services}

Jehangir Ratanji Dadabhoy "J. R. D." Tata (29 July 1904 – 29 November 1993) was a French-

born Indian aviator, entrepreneur, chairman of Tata Group and the shareholder of Tata

Sons. He is best known for being the founder of several industries under the Tata Group,

include He was also a founding member of the first Governing Body of NCAER, the National

Council of Applied Economic Research in New Delhi, India's first independent economic

policy institute established in 1956. In 1968, he founded Tata Consultancy Services as Tata

Computer Centre. In 1979, Tata Steel instituted a new practice: a worker being deemed to be

"at work" from the moment he leaves home for work till he returns home from work. This

made the company financially liable to the worker for any mishap on the way to and from

work. In 1987, he founded Titan Industries. Jamshedpur was also selected as a UN Global

Compact City because of the quality of life, conditions of sanitation, roads and welfare that

were offered by Tata Steel.ing Tata Consultancy Services, Tata Motors, Titan Industries, Tata

Tea, Voltas and Air India. In 1945, he founded Tata Motors. In 1948, JRD Tata launched Air

India International as India's first international airline. In 1953, the Indian Government

appointed JRD Tata as Chairman of Air India and a director on the Board of Indian Airlines – a

position he retained for 25 years. For his crowning achievements in aviation, he was bestowed

with the title of Honorary Air Commodore of India.

5

1.1.2 Business Type

The IT industry business can be classified into 3 major type hardware industry, software

industry and finally service industry.

Hardware Industry

Hardware industry is majorly dominated by various hardware vendors such as IBM, HP, and

Oracle (Sun). Software industry is dominated by the likes of Microsoft, Google, and Oracle.

Service Industry is a conglomerate between hardware and software industry, it not only caters to

the hardware demand of the customer, but also to the various software customization demands of

the customer.

Traditionally IBM has been the blue giant, has the biggest range of products in the hardware

server space, quite lately it was also major in the desktop space which it had earlier sold to

Lenovo. HP and Oracle are the other key giants that are on headlock with IBM with respect to

enterprise server space.

Software Industry

Microsoft along with Oracle are the software giant with presence not only in terms of enterprise

software but as well end user (desktop) software. It’s estimated that Microsoft has about 80%

presence in enterprise software.

Service Industry

In IT services, IBM is the giant that dwarfs all other players. It is followed by Fujitsu, Accenture,

HP and NTT. The major Indian IT organizations such as TCS, Infosys, Wipro and Cognizant

appear in this industry. However there is a small exception that HCL has a bit of presence in

hardware industry, although not individually.

1.1.3 Types of Market in IT Industry.

India’s IT industry can be divided into six main components, viz. Software Products, IT

services, Engineering and R&D services, ITES/BPO (IT-enabled services/Business Process

Outsourcing), Hardware, and e-commerce. Export revenues continue to drive growth with IT

Services. Increasing competition, pressure on billing rates of traditional services and increasing

commoditization of lower-end services are among the key reasons forcing the Indian software

industry to make a fast move up in the software value chain. The new digital technologies like

6

social media, mobility, analytics, and cloud computing (SMAC) will permanently change the

way Indian IT firms do business.

Figure 1.1 Segment- wise Market Share

1.1.4 Market Prospects in IT Industry.

Market Size

The Indian IT sector is expected to grow at a rate of 12%-14% for FY2016-17 in constant

currency terms. The sector is also expected triple its current annual revenue to reach US$ 350

billion by FY 2025#.

India ranks third among global start-up ecosystems with more than 4,200 start-ups##.

India’s internet economy is expected to touch Rs 10 trillion (US$ 146.72 billion) by 2018,

accounting for 5 % of the country’s GDP###. India’s internet user base reached over 400 million

by May 2016, the third largest in the world, while the number of social media users grew to 143

million by April 2015 and smart phones grew to 160 million.

Public cloud services revenue in India is expected to reach US$ 1.26 billion in 2016, growing by

30.4 % year-on-year . The public cloud market alone in the country was estimated to treble to

US$ 1.9 billion by 2018 from US$ 638 million in 2014. Increased penetration of internet

(including in rural areas) and rapid emergence of e-commerce are the main drivers for continued

growth of data centre co-location and hosting market in India. The Indian Healthcare Information

Technology (IT) market is valued at US$ 1 billion currently and is expected to grow 1.5 times by

2020^^. India's business to business (B2B) e-commerce market is expected to reach US$ 700

7

billion by 2020 whereas the business to consumer (B2C) e-commerce market is expected to

reach US$ 102 billion by 2020.

1.1.5 SWOT Analysis of IT Industry.

Table No. 1.1 SWOT Analysis

Strengths Weaknesses Opportunities Threats

Highly skilled,

English-speaking

workforce.

Rise in the level of

attrition rates

among IT and

ITES workers.

To work closely

with association

like nasscom

Workers in British

Telecom have

protested against

outsourcing of

work to Indian

BPO companies.

Round-the-clock

advantage for

Western

companies due to

the huge time

difference.

The cost of telecom

and network

infrastructure is

much higher in

India than in the

US.

Indian ITES

companies should

work closely with

Western

governments and

assuage their

concerns and

issues.

Other ITES

destinations such

as China,

Philippines and

South Africa could

have an edge on

the cost factor.

Cheaper workforce

than their Western

counterparts.

According to

Nasscom, The

wage difference is

as high as 70-80 %

when compared to

their Western

counterparts.

Manpower

shortage

India can be

branded as a

quality ITES

destination rather

than a low-cost

destination.

The anti-

outsourcing

legislation in the

US state of New

Jersey. Three more

states in the United

States are planning

legislation against

outsourcing

Connecticut,

Missouri and

Wisconsin.

Lower attrition Marketing $69 billion ITES Slowdown of

8

rates than in the

West

problem business by 2010 demand.

Dedicated

workforce aiming

at making a long-

term career in the

field.

Cultural difference Market potential

Abundant

manpower

Legal lacuna

Lower response

time with efficient

and effective

service

Local

infrastructure

Operational

excellence

Political opposition

from developed

countries

Conducive

business

environment

1.2 Policies.

1.2.1 Branding of the product:

1. Wipro

The first major focus on Wipro as a brand came about in the late 1990s. The focus was on

Building brand awareness and building a quality and leadership positioning. Since the

Beginning, the challenge had always been to build a brand that would compete with

Accenture or IBM but with a fraction of their marketing budget.

Shining Strategic Design (SSD), a France based consulting firm was brought on board for a

Complete brand makeover. Research commissioned by SSD revealed, “Wipro has diligent,

Hardworking and sincere employees. But end-users felt Wipro had unfocussed multifaceted

Businesses. Wipro was seen as very cold and process-oriented, yet Wipro delivered on its

Commitment.”

9

SSD identified four values that provided the most important benefits to end-users: human

Values, integrity, innovative solutions, and value for money.

To strategically innovate, it is more important than ever to driving growth. This commitment to

innovation will impact how companies approach environmentally friendly, or green, business

practices, as well as how they manage their expansion into global emerging markets.

Innovation as a way to differentiate businesses. Fully two thirds of the Wipro executives believe

that innovation is more critical than ever because of the economic downturn of 2008-09.

To ensure that speed-to-market is necessary for successful innovation.

To ensure that cost remains low as it is the biggest hurdle to fostering innovation. It topped the

list of innovation barriers cited by C-level executives, followed by issues related to the

regulatory environment, and finding and retaining top talent.

2. Infosys

About the branding policies of Infosys, basically they focused on social media strategy

development; creating a rigorous media strategy is necessary to ensure customer consistent

experiences, reliable content creation, data governance and regulatory compliances.

To ensure that the company not merely provides software services and solutions, but also does a

lot of transformational projects. Along with the IT services it will also work with the business

side of clients.

It aims to transform into a business solutions provider.

To focus on several new solutions, like cloud computing, Enterprise Mobility and Sustainability,

based on current market needs.

It has consolidated its verticals into four: Financial Services & Insurance; Manufacturing;

Energy, Utilities, Communications and Services; and Retail, Logistics and Life Science.

It also has another vertical, Infosys Public Service subsidiary, which will essentially scout for US

government public service work.

It has grouped its offerings into three groups: Business Transformation (consulting work,

systems integration, enterprise solutions etc.); Business Operations (application development,

maintenance, infrastructure management etc.); Business Innovation (products, platforms and

solutions). These will be there focus areas going forth.

10

3. TCS

There are various strategies of branding used by the TCS in the today’s business environment

and basically this are:

1. Cost based pricing strategy 2. Geographical strategy 3. Value based pricing strategy 4. If necessary then penetration strategy also.

To create value by leveraging our co-innovation network in a manner that has an impact on the

customer’s ecosystem.

To be among the top 3 companies worldwide, to build culture of accountability, delivering

certainty to customers.

Assimilate values – integrity, leading change, excellence, respect for the individual, and fostering

an environment of learning and sharing.

Customer-centric Engagement Model: Their deep-set commitment to customers defines how

they do business, and their years of experience working across industries underpin the vast array

of services they offer. They build their teams around customer’s domain and technology

requirements, offering specialized services and solutions that meet the distinct needs of

customer’s business.

Global Network Delivery Model (GNDM™): Their unique global engagement model allows

them to choose the sourcing strategy best suited to customer’s business needs. They take a

follow-the-sun approach, meaning that no matter where customer’s business is located, they help

you keep it running 24/7, while providing a seamless experience across all operations.

Full Services Portfolio: Their full services portfolio combines traditional IT and Remote

Infrastructure services with knowledge-based services such as Consulting and Business Process

Outsourcing. This enables them to provide integrated solutions that help customer recognize

value quickly by reducing costs and improving business agility.

Innovation Labs and Co-innovation Network (COIN™): They help customer achieve and

maintain a competitive advantage through their TCS Innovation Labs and Co-innovation

Network. They offer research-based solutions in advanced technologies that help support

customer’s business objectives.

11

1.2.2 Pricing Policies:-

Since the IT industry is highly volatile, pricing strategies are closely held secret and aren’t

disclosed by the IT companies. It’s a common norm in IT industry to charge different customer

both based on geography or financial strength differently and hence pricing is not publically

disclosed.

The pricing that is disclosed, if available on the website, is very rarely followed and final pricing

varies after sales negotiations have been finalized.

12

Chapter-2 PROMOTERS AND

MANAGEMENT ETHOS.

13

Chapter:-2

2.1 Corporate DNA.

Corporate culture refers to the beliefs and behaviors that determine how a company's employees

and management interact and handle outside business transactions. Often, corporate culture is

implied, not expressly defined, and develops organically over time from the cumulative traits of

the people the company hires. A company's culture will be reflected in its dress code, business

hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client

satisfaction and every other aspect of operations.

1. WIPRO

* Culture:-

The Spirit of Wipro is rooted in current reality and yet, it is representative of what Wipro aspires

to be. It is an indivisible synthesis of what we are and what we want to be - manifesting itself in

the intensity to win, the sincerity to act with sensitivity and the desire to uphold integrity at all

times.

Our culture is the foundation of our success and it is completely people oriented, touching lives

and making a difference to employees, stakeholders, customers and partners alike. We believe

that excellence is not a destination but a journey of continuous improvement and we keenly

promote an open culture, encouraging feedback, and actively transforming it into action.

A finely articulated code of Business Conduct helps us achieve the highest levels of transparency

and propriety, thus strengthening the foundations of our business.

2. Infosys.

* Culture:-

To surpass client expectations consistently. To be objective and transaction-oriented, and

thereby earn trust and respect. While it is often believed that innovation occurs in spontaneous

and unplanned aha! Moments , the truth is innovation is a force of habit. We need to train

ourselves to think constantly, approaching old problems in new ways, and recognizing gaps that

may not always be apparent. At Infosys, innovation is everybody's job.

14

Our grassroots approach to innovation means it encourages everyone to stay focused on it all the

time, rather than in between things. In fact, it is this unique approach to innovation that has made

problem finding and solving second nature to us and has helped us set ourselves apart in the

industry.

To be ethical and sincere in all our transactions.

To strive relentlessly; constantly improve ourselves, our teams, and our services and products to

become the best.

3. TCS

* Culture:-

Just as an organization needs the right talent to drive its business objectives, people need the

right environment to grow and achieve their career goals. The moment the employee steps into

TCS, he/she would be greeted with that unmistakable feeling of being at the right place. Along

with that, working with TCS affords with a sense of certainty of a successful career that would

be driven by boundless growth opportunities and exposure to cutting-edge technologies and

learning possibilities. The work environment at TCS is built around the belief of growth beyond

boundaries. Some of the critical elements that define the work culture are global exposure, cross-

domain experience, and work-life balance. Each of these elements goes much deeper than what it

ostensibly conveys.Our corporate culture is open and inclusive; irrespective of your experience,

you will immediately be welcomed into the team, and would always have a significant role to

play.

2.2 Promoters and Management teams

The term is also used to describe the set of architectural and spatial characteristics considered by

the inhabitants of a city to be constituents of that city's identity. This may include "materials and

colours, a typical arrangement of scale and architectural forms, building lot size, roof lines, scale

of public and semi-public spaces" which should be respected by new buildings and urban spaces

in the city.[21] In an article in Fast Company, Kelli Richards claims that the organizational culture

at Apple Inc. in the 1990s has become part of the DNA of Silicon Valley.

15

1. Wipro

2.2.1 Promoters.

Mr Azim Hasham Premji Partner Representing Hasham Trader

Azim H Premji

Yasmeen H Premji

RishadAzimPremji

Mr Azim Hasham Premji Partner Representing Zash Traders

Mr Azim Hasham Premji Partner Representing Prazim Traders

Hasham Investment and Trading Co. Pvt Ltd

Tariq Azim Premji

Azim Premj Philanthropic Initiatives Private Limited.

2.2.2 Board of Directors

Table No.: 2.1 List of Board Members

Board Members Designation

Azim H. Premji Chairman

T K Kurien

Executive Vice-Chairman

Abidali Z. Neemuchwala CEO & Member of the Board

Rishad Premji Chief Strategy Officer Member of the Board

Dr. Ashok S. Ganguly Independent Director

IreenaVittal Independent Director

M.K.Sharma Independent Director

Narayanan Vaghul Independent Director

16

There are 11 Directors out of which 7 are independent Directors.

2.2.3. CEO/CMD of WIPRO

Our Chairman Azim H. Premji, Sr. executives of Wipro who are global leader and visionary ,

form the Wipro Board of Directors which provides direction and guidance to the organization

Azim H. Premji

{Chief Executive Officer}

Infosys:-

2.2.1 Promoters

N. R. Narayana Murthy

SudhaMurty

AkshataMurty

Rohan Murty

Nandan M. Nilekani

RohiniNilekani

JahnaviNilekani

NiharNilekani

Patrick Dupuis Independent Director

Dr. Patrick J. Ennis

Independent Director

William Arthur Owens Independent Director

17

S. Gopalakrishnan

SudhaGopalakrishnan

MeghanaGopalakrishnan

K. Dinesh

Asha Dinesh

Divya Dinesh

Deeksha Dinesh

S. D. Shibulal

KumariShibul.

2.2.2 Board of Directors

Table No.: 2.2 List Of Board Members

There are 9 directors out of which 7 are independent directors.

Board of Directors. Designation

Dr.VishalSikka CEO/CMD of INFOSYS.

R. Seshasayee Chairman of the Board and

Independent Director

KiranMazumdar-Shaw Independent Director

U. B. Pravin Rao Chief Operating Officer &Whole-time Director

RoopaKudva Independent Director

Ravi Venkatesan Independent Director

Dr. Punita Kumar-Sinha Independent Director

Prof. Jeffrey S. Lehman Independent Director

Prof. John W. Etchemendy Independent Director

18

2.2.2 CEO/CMD of INFOSYS.

Dr. Vishal Sikka{Chief Executive Officer}

Dr. Vishal Sikka is Chief Executive Officer of Infosys.

Dr. Sikka joined Infosys in 2014 to help transform the company during a time of significant

change in the services industry, change that was brought on by the cost imperatives of clients on

the one hand, and significant and rapid advancements in technology on the other hand. Since

joining Infosys, Dr. Sikka has implemented a strategy of helping clients renew their existing

landscapes to fundamentally drive down costs using automation and artificial intelligence, and at

the same time bring breakthrough innovation that transforms user and consumer experiences,

opens new business opportunities and new business models, and leverages data in entirely new

ways.

3. TCS Management Team

2.2.1 Promoters

Tata Sons Limited

Af-Taab Investment Company Limited

Tata Investment Corporation Ltd

Tata Industries Limited

TATA STEEL LIMITEDTHE

TATA POWER COMPANY LIMITED

19

2.2.2 Board of Directors.

Table No.: 2.3 List of Board Members

Board of Directors. Designation

IshaatHussain Chairman

N Chandrasekaran CEO and MD

Aarthi Subramanian Executed Director

Aman Mehta Independent, Non-Executive

VenkatramanThyagarajan, Independent, Non-Executive

Prof. Clayton M Christensen Independent, Non-Executive

Dr. Ron Sommer Independent, Non-Executive

Dr. Vijay Kelkar Independent, Non-Executive

O. P. Bhatt Independent, Non-Executive

There are 9 directors out of which 6 Independent Directors.

2.2.3 CEO/CMD OF TCS

Natarajan Chandrasekaran is an Indian business executive who is the CEO and managing

director of Tata Consultancy Services. Chandrasekaran took over as the CEO on October 6, 2009

prior to which he was COO and Executive Director of TCS

.

Natarajan Chandrasekaran

{Chief Executive Officer/ Chief Executive Director}

20

2.3 Corporate Governance

2.3.1. Meaning:-

Corporate governance is the system of rules, practices and processes by which a company is

directed and controlled. Corporate governance essentially involves balancing the interests of a

company's many stakeholders, such as shareholders, management, customers, suppliers,

financiers, government and the community.

Corporate governance broadly refers to the mechanisms, processes and relations by

which corporations are controlled and directed. Governance structures and principles identify the

distribution of rights and responsibilities among different participants in the corporation (such as

the board of directors, managers, shareholders, creditors, auditors, regulators, and

other stakeholders) and includes the rules and procedures for making decisions in corporate

affairs. Corporate governance includes the processes through which corporations' objectives are

set and pursued in the context of the social, regulatory and market environment. Governance

mechanisms include monitoring the actions, policies, practices, and decisions of corporations,

their agents, and affected stakeholders.

1. Wipro

Wipro was observed to be in compliance with all the mandatory conditions of Corporate

Governance. It has constituted sub-committees to focus on specificareas and make informed

decisions within the authoritydelegated to each of the Committees. Each Committee ofthe Board

is guided by its Charter, which defines the scope,powers and composition of the Committee. All

decisions andrecommendations of the Committees are placed before theBoard either for

information or approval.Wipro has four sub-committees of the Corporate Governance Board.

Table No.: 2.4 Objectives of Committee

Name Of Committee Scope in Company

1. Audit/Risk and Compliance Committee It recommending the appointment of our

independent auditors to the shareholders.

It observes compliance with legal and statutory

requirements.

It ensures integrity of the Company’s financial

statements, discussing with the independent

21

auditors the scope of the annual audits, and fees

to be paid to the independent auditors.

It reviews performance of the Company’s

Internal Audit function, Independent Auditors

and accounting practices and related party

transactions, functioning of Whistle Blower

mechanism.

It also reviews implementation of the applicable

provisions of the Sarbanes Oxley Act 20020.

2. Board Governance, Nomination and

Compensation Committee

It is responsible for developing and

recommending to the Board corporate

governance guidelines applicable to the

Company. It is responsible for developing and

recommending to the Board corporate

governance guidelines applicable to the

Company.

It evaluates the Board on a continuing basis,

including an assessment of the effectiveness of

the full Board, operations of the Board

Committees and contributions of individual

directors.

It establishes policies and procedures to assess

the requirements for induction of new members

on the Board. It implements policies and

processes relating to corporate governance

principles.

It is responsible for approving and evaluating the

compensation plans, policies and programs for

whole-time directors and senior management,

and acting as Administrator of the Company’s

Employee Stock Option Plans and Employee

Stock Purchase Plans drawn up from time to

time.

It reviews the Company’s policies that relate to

matters of corporate social responsibility,

including public issues of significance to the

Company and its shareholders.

22

It is also responsible for formulating the

Disclosure Policy, its review and approval of

disclosures and determining and approving

salaries, benefits and stock option grants to senior

management employees and directors of our

Company.

3. Administrative/Shareholders & Investors

Grievance Committee

The Administrative/Shareholders & Investors

Grievance Committee is responsible for resolving

investor’s complaints pertaining to share

transfers, non-receipt of annual reports, Dividend

payments, issue of duplicate share certificates,

transmission of shares and other shareholder

related queries, complaints etc.

In addition to above, this Committee is also

empowered to oversee administrative matters like

opening / closure of Company’s Bank accounts,

grant and revocation of general, specific and

banking powers of attorney, consider and

approve allotment of equity shares pursuant to

exercise of stock options, setting up branch

offices and other administrative matters as

delegated by Board from time to time.

2. Infosys.

Table No.: 2.5 Objectives of Committee

Name Of Committee Scope in Company

1. Audit committee The primary objective of the committee is to

monitor and Providian effective supervision of

the Management's financial reporting process,

to ensure accurate and timely disclosures, with

the highest levels of transparency, integrity and

quality of financial reporting

The committee oversees the work carried out in

23

the financial reporting process by the

Management, the internal auditors and the

independent auditor, and notes the processes

and safeguards employed by each of them.

The committee has the ultimate authority and

responsibility to select, evaluate and, where

appropriate, replace the independent auditor in

accordance with the law.

All possible measures must be taken by the

committee to ensure the objectivity and

independence of the independent auditor.

2. Compensation committee The purpose of the compensation committee of

the Board shall be to discharge the Board’s

responsibilities relating to compensation of the

Company’s executive directors and senior

management.

The committee has the overall responsibility of

approving and evaluating the compensation

plans, policies and programs for executive

directors and senior management

3. Investor grievance committee The committee has the mandate to review and

redress shareholder grievances.

4. Nominations committee The purpose of the nominations committee of

the Board of Infosys Limited is to oversee the

Company’s nomination process for the top level

Management and specifically to identify, screen

and review individuals qualified to serve as

Executive Directors, non-Executive Directors

and Independent Directors consistent with

criteria approved by the Board and to

recommend, for approval by the Board,

nominees for election at the annual meeting of

shareholders.

5. Risk management committee The purpose of the risk management committee

(‘the committee’) of the Board of Infosys

Limited shall be to assist the Board in fulfilling

its corporate governance in overseeing the

24

responsibilities with regard to the identification,

evaluation and mitigation of operational,

strategic and external environment risks.

The committee has overall responsibility for

monitoring and approving the risk policies and

associated practices of the Company.

The risk management committee is also

responsible for reviewing and approving risk

disclosure statements in any public documents

or disclosures.

.

3. TCS

TCS has a strong legacy of fair, transparent and ethical governance practices. TCS has adopted a

Code of Conduct for its employees including the Managing Director and the Executive Directors.

In addition, the Company has adopted a Code of Conduct for its Non-Executive Directors. Both

these codes are available on the Company’s website.

Following is the code of conduct followed by TCS to achieve corporate governance:

Various committees that ensure that corporate governance is followed are as follows:

Table No.: 2.6 Objectives of Committee

Name Of Committee Scope in Company

1. Audit Committee It is responsible for overview of the company’s

financial reporting process and disclosure of its

financial information to ensure that the financial

statements reflect a true and fair position and

that sufficient and credible information is

disclosed.

Its responsible for recommending the

appointment and removal of external auditors,

fixation of audit fee and also approval for

payment for any other services.

2. Risk Management Committee It is responsible for approval of annual

remuneration plan of the company.

It is responsible for the remuneration and

commission/incentive payable to the managing

25

director for each financial year.

3. Shareholders/Investors Grievance Committee

It is responsible to look into the redressed of

complaints of investors such as transfer or

credit of shares, non-receipt of

dividend/notices/annual reports, etc.

4. Remuneration Committee

5. Ethics and Compliance Committee

6. Bank Account Committee

7. Nominations Committee

8. Executive Committee

9. STPI/SEZ Committee

2.4 Corporate Social Responsibility {CSR}

2.4.1. Meaning of CSR.

Companies need to answer to two aspects of their operations.

1. The quality of their management - both in terms of people

and processes (the inner circle).

2. The nature of, and quantity of their impact on society in the

various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most

look to the outer circle - what the company has actually done, good or bad, in terms of its

products and services, in terms of its impact on the environment and on local communities,

or in how it treats and develops its workforce. Out of the various stakeholders, it is

financial analysts who are predominantly focused - as well as past financial performance -

on quality of management as an indicator of likely future performance.

Corporate Social Responsibility is the continuing commitment by business to behave

ethically and contribute to economic development while improving the quality of life of the

workforce and their families as well as of the local community and society at large.

Traditionally in the United States, CSR has been defined much more in terms of a

philanthropic model. Companies make profits, unhindered except by fulfilling their duty to

Figure No.2.1 Social Responsibility

26

pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as

tainting the act for the company to receive any benefit from the giving.

Personally, I believe this model is more sustainable because:

1. Social responsibility becomes an integral part of the wealth creation process - which if

managed properly should enhance the competitiveness of business and maximize the

value of wealth creation to society.

2. When times get hard, there is the incentive to practice CSR more and better - if it is a

philanthropic exercise which is peripheral to the main business, it wil l always be the

first thing to go when push comes to shove.

2.4.1.1. CSR of WIPRO.

At Wipro, our deliberate engagement with important social issues goes back a long time. In 2001

we added our first organized community initiatives (Wipro Cares) followed by a program on

school education in 2002 (Wipro Applying Thought in Schools). We started working

methodically on Ecology & Environment in 2008. In 2014, under the overarching umbrella of

Education, we added a significant new initiative on ‘Children with Disability’. This program, at a

conceptual level, is an extension of our long running and successful program for 'Persons with

Disability' within Wipro. This compelling imperative of boundary-less thinking is a fundamental

driving principle of all our programs.

A. Education

Our work in education is based on the guiding principles that (a) It must contribute to systemic

or institutional improvement in education and / or (b) It should address the needs of underserved

and underprivileged sections and (c) In all cases, the work must be deep and meaningful. Our

programs span school and college education across India as

well as in the U.S. and address the themes of

‘Organizational Capability Building’, ‘Good Quality

Educational Material’ ,‘Advocacy’ and ‘Sustainability in

Education.Wipro Applying Thought in Schools (WATIS) is

a social initiative working on building capacity in school

education reform in India. Over the past 14 years, WATIS

Figure 2.2

27

has worked closely with 35 organizations working in improvement of school education.

B. Primary Health Care and Communities

Along with education, access to primary health care is a key determinant of an individual’s

future trajectory in life, including the ability to engage in productive livelihoods and responsible

citizenship, In India, nearly 600 million people do not have access to basic health care which is

affordable and of good quality. At Wipro, our approach in this regard is to focus on the health

needs of our proximate communities around the major centers of our operations. We run these

programs through Wipro Cares, our public trust.

Wipro Cares works with partners who oversee the delivery of good quality primary health care

services to underserved communities covering more than 75000 people in 53 villages across

Maharashtra, Karnataka, Andhra Pradesh & Uttarakhand. We follow an integrated approach that

along with the delivery of regular health services, lays emphasis on building the capacity of the

communities in developing a higher degree of self-reliance to handle their own primary health

care needs.

C. Ecology & Environment

Ecological sustainability is one of the defining challenges

facing humanity in the 21st century. How we manage the

issues of climate change, water scarcity, biodiversity loss

and pollution will determine the trajectory of our

development.

Wipro’s engagement with these issues goes back several years and is based on the dual approach

of

(a) continually improving the energy, water, waste and biodiversity footprint of our business

operations and

(b) engaging on community-level actions and advocacy on these issues. We present below some

interesting illustrations of our work

Figure 2.3

28

(C). We initiated the “Participative Community Water Program” in the Sarjapur area in

Bangalore which is completely dependent on groundwater. The initiative seeks to involve

proximate communities in a unique citizen-led governance model of groundwater. The year saw

the successful completion of the first phase of developing a detailed groundwater aquifer map for

a 33 sq km area around our Sarjapur campus.

D. The power of Engaged Employees

Employees are integral to many of our social programs. The Wipro Cares trust is built on a

model of employee contribution that is matched by Wipro. Nearly one in three employees or

more than 48,000 Wiproites are contributors to Wipro Cares making this possibly the largest

such initiative in India and one of the largest in the world. During 2014-15, nearly 1600

employees also engaged with more than 3600 hours of volunteer work, Employees have also

keen participants in other significant initiatives including those on campus biodiversity and

improving public transportation services.

In conclusion, we recognize that this is a journey where one learns all the time. While on the

matter of ethics and values, we will hold ourselves up to the highest standards, on matters of

governance and management of our CSR programs, we recognize that there could be many

opportunities for improvement. We will continually self-reflect, act, and review all the time.

Total Expenses on CSR.

Wipro

Out of the 132.7 Corers spent on CSR activities, ‘Program of Higher Education in

Engineering and Technology linked to skills development for the IT Industry’ received over

58% of total expenditure

Partnered with around 68 implementing agencies like IIM Bangalore and BITS Pilani and

1also includes a private sector company, Bhoruka Power Corporation Limited.

29

2.4.1.2. CSR of INFOSYS.

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

We are committed to contributing to the society and established the Infosys Foundation in 1996

as a not-for-profit trust to support our social initiatives. The Foundation supports programs and

organizations devoted to the cause of the destitute, the rural poor, the mentally 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 our Computers@Classrooms initiative launched in January 1999, we donated 2,567

computers to various institutions across India. Additionally, we have 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. We would like to place on record our appreciation for their continued support.

Social commitment in education

Infosys' Education & Research group has the pride of anchoring the Infosys Extension Program

(IEP), which consis

Ts of the Infosys Fellowship Program, Rural Reach program, Catch Them Young and Train the

Trainer.

Business imperatives and strategy

As a global leader in consulting, technology, and outsourcing solutions, Infosys works with

clients in over 50 countries. Our experience gives our clients distinct advantages, helping them

manage their businesses and power their transformation into smarter, more sustainable

organizations. Our strategic objective is to build a sustainable organization that remains relevant

to the agenda of our clients, while generating profitable growth for our investors.

Stakeholder engagement

We are committed to the wellbeing of our stakeholders. Based on discussions and deliberations

with our Board and Management, we have arrived at a list of stakeholders who are important to

us, and the list includes clients, employees, investors, suppliers / partners, governments /

regulatory bodies, and local communities. The stakeholder consultation process is used to

30

support the highest governance body’s identification and management of economic,

environmental, and social impacts, as well as risks and opportunities.

Social Responsibility

Contributing to the world around us by reaching out to communities in the regions where we

operate has always been integral to our corporate social responsibility. From uplifting the poorest

sections of society through the Infosys Foundation, promoting science and math education in the

U.S. through the Infosys Foundation USA, encouraging science and research through the Infosys

Science Foundation, increasing the employability of engineering students through Campus

Connect, and simply empowering our employees to become responsible citizens through

volunteering, we will continue to strive towards inclusive growth and community development.

Environmental stewardship

To realize our vision of building sustainable ecosystems, we identified energy, emissions, water,

and waste as material aspects to focus on as a part of our environmental sustainability efforts.

We were the first IT company in the world to make a commitment in the UN to become carbon

neutral by fiscal 2018, reduce per capita electricity consumption by 50 percent (against the

baseline year 2008), and use 100 percent renewable power by 2018. This year, we made

investments in carbon offset projects, which have environmental and social impacts. We became

the first Indian company to join RE100 — a global platform for major companies committed to

100 percent renewable power. Our campus at Hyderabad has a solar plant that can help us meet

100 percent of our electricity needs and we continue to innovate on improving energy

performance in buildings by focusing on highly efficient building designs, smart building

automation, and deep green retrofits

Total Expenses on CSR.

Infosys

Infosys spent a total of 239.54 Crores out of the mandated 243 Crores in 2014-15.

According to the Annual Report, the balance amount was spent in April 2015.

The names of beneficiary organization have been mentioned.

15% of contribution is to Akshaya Patra Foundation towards eradicating malnutrition and

hunger.

31

Next top 5 grantees also include Chennai Mathematical institute, Ramakrishna Mission,

IISC Bengaluru, Infosys Science Foundation and Spark IT Training Program run by the

Infosys Foundation.

Other allocations include donations to IIT Bombay under healthcare and medical facilities

and to Banerghatta National park towards destitute care and rehabilitation

2.4.1.3. CSR of TCS.

Nurturing People and Planet Tata Consultancy Services Limited is an IT services, business

solutions, and outsourcing organization that delivers real results to global businesses, ensuring a

level of certainty no other firm can match. Within its CSR activities, TCS increasingly employs

the use of technology as a key enabler to assist and resolve business challenges faced by social

organizations and to tackle development issues faced by diverse communities globally. The CSR

committee of the Board was constituted on April 16, 2014. The Committee is responsible for

recommending to the board a CSR policy as well as the expenditure, monitoring the CSR policy

from time to time, overseeing the activities impacting the quality of life of various stakeholders

and overseeing the Company's corporate and societal obligations.

The core themes for TCS' CSR programmes are: n

Education & Skill Development n

Health

Environment Programs

under Education include IT enabled modules and advisory systems for learning and creating an

interest and enabling an interest in IT.

Sanitation Project

On a national scale, TCS pledged INR 100 crore to the 'Swachh Bharat, Swachh Vidyalaya

Abhiyan' to build dedicated sanitation facilities for girl students in adopted government schools.

The programme is being rolled-out in a phase-wise manner, with 860 schools targeted in Phase1.

Visual Sub-titles:

To help the hearing impaired understand videos which do not have sub titles, TCS Innovation

Labs – Mumbai is building a photo-recognition algorithm that can generate 'lip movement; or

'visual' subtitles.

32

Remote Speech Therapy (RST) platform:

This low cost mobile application and web based platform allows speech therapists to help

patients practice and improve articulation.

Mother and child welfare apps:

TCS Innovation Labs – Mumbai, along with King Edward Memorial (KEM) hospital and

Mumbai Breastfeeding Promotion Committee (MBPC), developed a mobile based application to

educate lactating mothers. This was launched at KEM hospital in 2015. The lab and KEM

hospital have also developed an app that allows expectant mothers and health workers evaluate

the health status of the mother and child.

Social collaboration tool for crowd safety:

A multilingual chat platform, GG talk, was developed and deployed in the Kumbh Mela to help

streamline field communication across departments. Secure, realtime communication and the

knowledge repository GG Talk offered improved crowd management during the event.

Energy and water:

The Remote Energy Monitoring Solution that is creating real energy savings for TCS has inputs

in energy analytics from TCS Innovation Labs - Chennai, and is based on the innovative the TCS

IoT platform. Research on campus water management continues to be an area of interest.

Total Expenses on CSR.

Tata Consultancy Services (TCS)

More than 220 Crores were spent in 2014-15 against a mandated 285 Crore.

70% of the expenditure was made through TCS foundation. The foundation does not have

a separate website and the details of implementing agencies of the foundation are also not

given.

33

Chapter-3 EXTERNAL

ENVIRONMENT.

34

Chapter:-3

3.1 Governing Body of IT industry.

NASSCOM

The National Association of Software and Services Companies (NASSCOM) is a trade

association of Indian Information Technology (IT) and Business Process Outsourcing (BPO)

industry. Established in 1988, NASSCOM is a non-profit organization.

NASSCOM is a global trade body with over 2000 members, of which over 250 are companies

from the China, EU, Japan, US and UK. NASSCOM's member companies are in the business of

software development, software services, software products, IT-enabled/BPO services and e-

commerce.

NASSCOM facilitates business and trade in software and services and encourages the

advancement of research in software technology. It is registered under the Indian Societies Act,

1860.

NASSCOM is headquartered in New Delhi, India, with regional offices in the cities of

Bengaluru, Chennai, Hyderabad, Kochi, Kolkata, Mumbai, Pune and Thiruvananthapuram

3.1.1. EVENTS

NASSCOM organises the India Leadership Forum. It gives a platform to the developing

companies to network and present their product. Some of the notable events:

NASSCOM Product Conclave

Developer Roadshow

Engineering Summits

Nasscom Emerge 50

This is a six-month engagement, which will help the organisation to develop a better assessment

of their strengths and weaknesses.

35

1. Insights on industry trends

Access to NASSCOM research and intelligence that tracks industry trends, growth

opportunities and best practices.

Access to industry presentations, blogs, discussions and articles.

An opportunity to engage with the NASSCOM research team and share case studies or

transformational stories.

2. Opportunities to enhance visibility

Visibility through features and interviews on the NASSCOM website, as well as the

monthly newsletter, NASSCOM Newsline.

Speak, sponsor or participant opportunities at NASSCOM events.

Chance to contribute to blogs and newsletters as thought leaders.

Brand building through NASSCOM awards and recognitions.

3. Opportunity to network, build and share best practices

Chance to use the member database on NASSCOM's website to post a trade lead, or

participate in one.

Chance to share or learn best practices through city-level networking sessions on human

capital development, data security, contract management, quality, diversity and more.

4. Global trade development

Members can participate in opportunities for global networking and build business at

NASSCOM's global events, and through delegations and road shows.

Network with companies in other countries through their delegations to India.

Receive information regularly about policy updates in countries.

Understand issues related to visas, immigration through NASSCOM's mobility best

practices sessions.

Learn about trends and opportunities in markets through country reports.

36

3.1.2. PROMINENT PEOPLE

C P Gurnani – Chairman of NASSCOM for 2016–2017

B V R Mohan Reddy – Chairman of NASSCOM for 2015–2016

R Chandrasekhar – President of NASSCOM from 2013 – Present.

3.2 Measures taken by Government Body to streamline IT Business.

Some of the major initiatives taken by the government to promote IT and IT’S sector in India are

as follows:

Mr Ravi Shakar Prasad, Minister of Communication and Information Technology,

announced plan to increase the number of common service centres or e-Seva centres to

250,000 from 150,000 currently to enable village level entrepreneurs to interact with

national experts for guidance, besides serving as a e-services distribution point.

The Government of Telangana has signed an agreement with network solutions giant

Cisco Systems Incorporation, to cooperate on a host of technology initiatives, including

Smart Cities, Internet of Things, cyber security, education digitization of monuments.

The Railway Ministry plans to give a digital push to the India Railways by introducing

bar-coded tickets, Global Positioning System (GPS) based information systems inside

coaches, integration of all facilities dealing with ticketing issues, Wi-Fi facilities at the

stations, super-fast long-route train service for unreserved passengers among other

developments, which will help to increase the passenger traffic.

The Pune Smart City Development Corporation (PSCDCL) has signed a memorandum of

understanding (MOU) with the European Business and Technology Centre (EBTC),

which will allow it to gain access to real-time knowledge of technologies, solutions and

best practices from Europe.

37

The Department of Electronics and Information Technology (DeitY) plans to start a

digital literacy programme, aimed at training over six crore Indians in the next three years

to empower them for digital inclusion.

India and the US have agreed to jointly explore opportunities for collaboration on

implementing India's ambitious Rs 1.13 trillion (US$ 16.58 billion) ‘Digital India

Initiative’. The two sides also agreed to hold the US-India Information and

Communication Technology (ICT) Working Group in India later this year.

3.3 Issues affecting the Industry.

10 Challenges facing IT

1: Customer service:- Improve customer service by listening to and meeting the client's needs.

Make customer service job number one.

2: Human resources:- Develop creative ways to minimize stress, satisfy employee needs, and

match corporate needs to employee goals.

3: Productivity:- Make the best use of new technologies like cloud and mobile computing but

search out additional ways to increase productivity.

4: Complexity:- Manage and tame the complexity beast.

5: Obsolescence:- Increase the productive life of systems, software, and equipment.

6: Budgets:- Accomplish more with budgets similar to last year.

7: Marketing/public relations:- If you don't have the expertise, hire marketing and PR experts

who can get it right.

8: Multinational operations:- Instill a culture of teamwork among international team members

with diverse backgrounds and varying ethnicities.

9: The mobile generation:- Make use of mobile technology without tearing down the virtual wall

between work and family and leisure time.

10: Data storage and retrieval:- Determine what data, if any, is susceptible to bit rot and transfer

to new media before it becomes a problem.

38

Chapter-4

FINANCIALS.

39

Chapter:-4

Financials.

The ratios to be calculated for the top three companies in the industry should be for two years.

They are categorized into 3 parts:

Short Term Ratios

Long Term Ratios

Profitability Ratios

4.1 Short Term Ratio.

4.1.1. Liquid Ratio/Current Ratio:

The liquidity ratio, is a computation that is used to measure a company's ability to pay its

short-term debts.

The current ratio is a liquidity ratio that measures a company's ability to pay short-term and

long-term obligations. To gauge this ability, the current ratio considers the current total assets

of a company (both liquid and illiquid) relative to that company's current total liabilities.

Table No. 4.1.1. Liquid Ratio

Infosys TCS Wipro

2014 3.7 3.18 1.98

2015 3.41 2.78 2.16

2016 3.36 2.24 3.13

0

0.5

1

1.5

2

2.5

3

3.5

4

2014 2015 2016

Infosys

TCS

Wipro

Graph No.: 4.1.1. Liquid Ratio

40

4.2. Long Term Ratio

4.2.1. Fixed Asset Turnover Ratio

Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value of fixed

assets (on the balance sheet). It indicates how well the business is using its fixed assets to

generate sales.

Table No.: 4.2.1. Fixed Asset Turnover Year Ratio

Infosys TCS Wipro

2014 0.89/3.24 5.79 4.46

2015 0.89/3.24 5.23 4.59

2016 0.89/3.24 4.95 4.54

4.2.2. Proprietary Ratio

The proprietary ratio (also known as the equity ratio) is the proportion of shareholders' equity

to total assets, and as such provides a rough estimate of the amount of capitalization currently

used to support a business.

Proprietary ratio = equity / total assets

0

1

2

3

4

5

6

7

2014 2015 2016

Infosys

TCS

Wipro

Graph No.: 4.2.1. Fixed Asset Turnover Ratio

41

Table No.: 4.2.2. Proprietary Year Ratio

Graph 4.2.2. Proprietary Ratio

4.2.3. Debt-Equity Ratio

Table No.: 4.2.3. Debt-Equity Year Ratio

Infosys TCS Wipro

2014 n/a n/a 0.15

2015 n/a 0.01 0.17

2016 n/a n/a 0.16

4.3. Profitability Ratios.

4.3.3. Gross Profit Ratio

The gross profit ratio shows the proportion of profits generated by the sale of products or

services, before selling and administrative expenses. It is used to examine the ability of a

business to create sellable products in a cost-effective manner. The ratio is of some importance,

especially when tracked on a trend line, to see if a business can continue to provide products to

the marketplace for which customers are willing to pay a reasonable price.

0

0.005

0.01

0.015

0.02

0.025

0.03

2014 2015 2016

Infosys

TCS

Wipro

Infosys TCS Wipro

2014 0.005426 0.025499 0.005426

2015 0.009286 0.020296 0.009286

2016 0.015776 0.02326 0.015563

42

Table No.: 4.3.1. Gross Profit Year Ratio

Infosys TCS Wipro

2014 0.36 0.32 0.22

2015 0.38 0.27 0.2

2016 0.37 0.3 0.185

Graph 4.3.1. Gross Profit Ratio

4.3.4. Net Profit Ratio

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the

remaining profit after all costs of production, administration, and financing have been deducted

from sales, and income taxes recognized.

Table No.: 4.3.2. Net Profit Year Ratio

Infosys TCS Wipro

2014 0.23 0.29 0.19

2015 0.26 0.26 0.2

2016 0.29 0.27 0.18

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

2014 2015 2016

Infosys

TCS

Wipro

43

Graph 4.3.2. Net Profit Ratio

4.3.5. Earnings Per Share (EPS)

Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share

of common stock. Earnings per share serves as an indicator of a company's profitability.

Table No.: 4.3.3. Earnings Per Share Year Ratio

Infosys TCS Wipro

2014 44 94.17 31.66

2015 68.75 95.62 35.13

2016 105.96 116.13 36.12

Graph 4.3.3. Earnings Per Share (EPS)

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

2014 2015 2016

Infosys

TCS

Wipro

0

20

40

60

80

100

120

140

2014 2015 2016

Infosys

TCS

Wipro

44

4.4 Over all rank

Overall Rank 2014

Infosys 1.714285714

TCS 1.285714286

Wipro 2.571428571

TCS was the best performer across performance indicators for 2014

Overall Rank 2015

Infosys 1.571428571

TCS 1.428571429

Wipro 2.571428571

TCS was the best performer across performance indicators for 2015

Overal Rank 2016 Infosys 1.833333333

TCS 1.428571429

Wipro 2.571428571

TCS was the best performer across performance indicators for 2016

Conclusion:-

Various ratios has been considered for the company as performance indicators. If the value is

high, it means performance is good then this is called as positive performance indicator. In our

case all the ratios are positive performance indicators so for a particular year say 2014 for each

ratio we have ranked 3 companies as rank 1, 2 & 3. If the company is best performer in that ratio

it gets rank 1 next two companies will get rank two and three as per the score. After doing this

for all the ratios we took average of the rank for the whole year and as per the final ranked the

company performance as best performer second best performer and the lowest performer. Same

45

thing we did for past 3 years and taking the average of rank of last 3 years we decided who

which company was the best performer for past 3 years and that was TCS.

46

Chapter-5 RECENT

DEVELOPMENTS.

47

Chapter:-5

5.1 Expansion of IT sector in global market.

Telecom subscriber base expands substantially

India is currently the second-largest telecommunication market and has the third highest number

of internet users in the world

India’s telephone subscriber base expanded at a CAGR of 19.96 per cent, reaching 1058.86

million during FY07–16

In March 2016, total telephone subscription stood at 1,058.86 million, while teledensity was at

83.36 percent

Graph 5.1 Growth in Total Subscribers

India is currently the world’s second-largest telecommunications market and has registered

strong growth in the past decade and half. The Indian mobile economy is growing rapidly and

will contribute substantially to India’s Gross Domestic Product (GDP), according to report

prepared by GSM Association (GSMA) in collaboration with the Boston Consulting Group

(BCG).

The Indian telecom sector is expected to generate four million direct and indirect jobs over the

next five years according to estimates by Randstad India. The employment opportunities are

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expected to be created due to combination of government’s efforts to increase penetration in

rural areas and the rapid increase in smartphone sales and rising internet usage.

International Data Corporation (IDC) predicts India to overtake US as the second-largest

smartphone market globally by 2017 and to maintain high growth rate over the next few years as

people switch to smartphones and gradually upgrade to 4G.

Reliance Communications Ltd, India’s fourth largest mobile services provider, has agreed to

acquire Sistema Shyam TeleServices Ltd (SSTL), the local unit of Russian company Sistema

JSFC, in a deal valued at Rs 4,500 crore (US$ 671.01 million), which includes payments to the

government for spectrum allotted to Sistema.

Singapore Telecommunications Limited (Singtel), the major shareholder in Bharti Airtel,

announced that it has signed an agreement with its majority owner Temasek Holdings Private

Limited to purchase a 7.39 per cent stake in Bharti Telecom Limited, the parent company of

Bharti Airtel Limited, in a deal worth US$ 659.51 million.

5.2 Technological Advancement

The rate of technological advancement is increasing with time, society is looking to create and

develop easier ways to live and lengthen their lives. The internet is a massive source of

information that millions of people use and depend on every day.

Our personal life is highly dependent on the technology that people have developed. Technology

has advanced with years and it has changed the way we purchase products , the way we live , the

way we communicate , the way we travel , the way we learn and so many changes have been

brought about by these continuous technological advancements. As people’s demands and life

style change, the demand for advancing the type of technology we use is high. Almost every

thing we use has been innovated to better standards, a good example is the ”Mobile Phone ”, the

type of mobile phones we had in 1995 are no longer on demand in this century, the demands of

mobile phone users have changed greatly, and this has resulted in the advancement of mobile

phone technologies.

Users of mobile phones demand simplicity and more functionality, which has forced mobile

phone manufactures to develop computer minded smart phones, which are so easy to use, but

also they come with more functionality compared to the type of mobile phones we used to have

in the past.

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Technological advancements have helped businesses and organizations save time and cost of

production, which has been an advantage to all business, they manage these advancements to

gain competitive advantage. A good a example is the 3G / 4G broadband, small businesses have

taken advantage of this super fast internet to reach target markets with less costs of operation.

The effects of technological advancement are both positive and negative. Positively, technology

advancement has simplified the way we do things, it saves time, it increases on production, it

simplifies communication, it has improved health care and it has also improved our educational

environment. Negatively , technology advancement has made humans so lazy , technology users

are so dependent on new advance tech tools , this laziness has resulted into less innovation , it

has increased on health risks because technology users exercise less , it has affected the

environment because of the increase pollution which has affected the Ozone layers which has

resulted into global warming.

Below I have listed a few technological advancements which have changed our lives

Technology Advancement in Medicine and Health care: Technology has helped in saving

many innocent lives. Human medicine and health sciences have improved. This extensive

research has resulted into the development of new drugs, and treatments which have helped in

curing most challenging human diseases and this has helped in saving so many lives and it has

also prolonged the human lifespan.

Technological advancements in communication: Communication is a major factor in both

human lives and business. Communication technology has changed with years and it has even

become better, I can tell what the future holds in this field of communication.

Technological Advancements in Agriculture: Agricultural technological advancement has

played a big role in changing the face of agriculture. This has resulted into increased

production and abundant food supply.

Technological Advancements In Education: Technology advancement has greatly changed

the education sector. We now days learn through mobile gadgets and tablets. Technology has

simplified the way teachers reach their students and it has also helped students learn from

anywhere as well as enable them access academic information at any time from anywhere.

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Information is power, so both students and teachers can use advanced technologies for

education to make research on subjects of interest.

5.3 Awards and recognitions

1. WIPRO.

May 2016, it was ranked 755th on the Forbes Global 2000 list.

Wipro was ranked 2nd in the Newsweek 2012 Global 500 Green companies.

Wipro received the 'NASSCOM Corporate Award for Excellence in Diversity and Inclusion,

2012', in the category 'Most Effective Implementation of Practices & Technology for Persons

with Disabilities'.

In 2012, it was awarded the highest rating of Stakeholder Value and Corporate Rating 1

(SVG 1) by ICRA Limited.

It received National award for excellence in Corporate Governance from the Institute of

Company Secretaries of India during the year 2004.

In 2014, Wipro was ranked 52nd among India's most trusted brands according to the Brand

Trust Report, a study conducted by Trust Research Advisory.

In March 2015, Wipro has been recognized as the world’s most ethical company by US-

based Ethisphere Institute for the fourth consecutive year.

Wipro won Gold Award for ‘Integrated Security Assurance Service (iSAS)’ under the

‘Vulnerability Assessment, Remediation and Management’ category of the 11th Annual

2015 Info Security PG’s Global Excellence Awards.

Wipro won 7 awards, including Best Managed IT Services and Best System Integrator in the

CIO Choice Awards 2015, India

2. INFOSYS

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

Infosys was ranked #9 in Wired (magazine) 40 (2005).

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Infosys was ranked No.1 among the best managed companies in Asia Pacific in the

annual Euromoney Best Managed Companies in Asia survey, 2013.

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

3. TCS

TCS BaNCS is a globally recognized industry leader, with its solutions consistently

recognized in top positions by industry experts.

Forrester Research cites TCS BaNCS as a Leader in Customer-Centric Global Banking

Platforms report )

TCS BaNCS is accredited with SWIFT Ready 2016 Certification for Corporate

Actions, Payments and Securities Processing.

TCS placed as a leader in IDC Market scope – Worldwide Core Banking Solutions 2014

Vendor Assessment – Global Providers for European Banks

TCS placed as a leader in IDC Market scope – Worldwide Core Banking Solutions 2014

Vendor Assessment – Global Providers for Asia/ Pacific Banks.

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Appendix

Bibliography

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Bibliography

1. http://www.nasscom.in/about-nasscom.

2. www.wipro.com/documents/investors/pdf-files/Wipro-Annual-Report-2016.pdf.

3. www.wipro.com › Investors › Financial Information.

4. www.moneycontrol.com › MARKETS › Computers – Software.

5. www.tcs.com/investors/.../Annual%20Reports/TCS_Annual_Report_2015-2016.pdf.

6. https://www.infosys.com/investors/reports.../annual-report/annual/.../infosys-AR-16.pdf.

7. www.tcs.com/investors/corp_governance/Pages/default.aspx.

8. www.wipro.com/microsite/annualreport/2014-15/corporate-governance-intro.html.

9. https://www.infosys.com/investors/corporate-governance/.

10. https://www.infosys.com/investors/.../corporate-social-responsibility-policy.pdf.

11. www.tcs.com › Home › About TCS › Corporate Sustainability.

12. www.wipro.com/documents/.../policy-on-corporate-social-responsibility-2015.pdf.

13. www.ibef.org › Industry.

14. http://www.naukrihub.com/india/information-technology/swot-analysis.html.

15. https://www.equitymaster.com/research-it/sector.../Software-Sector-Analysis-

Report.as....

16. https://www.statista.com › ... › Technology & Telecommunications › IT Services.

17. www.authorstream.com/.../animeshsinhabvu-773446-financial-ratios-comparision-of-....

18. https://www.infosys.com/about/awards/Pages/all-awards.aspx.

19. www.thehindubusinessline.com/info.../tcs-infosys-wipro...awards/article8422753.ece.

20. www.academia.edu/.../Technological_Advancements_and_Its_Impact_on_Humanity

21. www.money.rediff.com.

22. www.profit.ndtv.com.

Conclusion:-

On the basis of ratio analysis of 3 companies as per previous years we can estimate following table:

Gross Profit Ratio Net Profit Ratio Earnings Per Share (EPS)

Ranking Wipro Infosys TCS Wipro Infosys TCS Wipro Infosys TCS

2014 0.22 0.36 0.32 0.19 0.23 0.29 31.16 44 94.17

Rank 3 1 2 3 2 1 3 2 1

2015 0.2 0.38 0.27 0.2 0.26 0.26 35.13 68.75 95.62

Rank 3 1 2 2 1 1 3 2 1

2016 0.185 0.37 0.3 0.18 0.29 0.27 36.12 105.96 116.13

Rank 3 1 2 3 1 2 3 2 1

Liquid Ratio Fixed Asset Turnover Ratio Proprietary Ratio Debt-Equity Ratio

Ranking Wipro Infosys TCS Wipro Infosys TCS Wipro Infosys TCS Wipro Infosys TCS

2014 1.98 3.7 3.18 4.46 1.13 5.79 0.005426 0.005426 0.0255 0.15 NA NA

Rank 3 1 2 2 3 1 2 2 1 2 1 1

2015 2.16 3.41 2.78 5.49 1.05 5.23 0.009286 0.009286 0.0203 0.17 NA 0.01

Rank 3 1 2 2 3 1 2 2 1 3 1 2

2016 3.13 3.36 2.24 4.54 1.03 4.95 0.015563 0.015776 0.02326 0.16 NA NA

Rank 3 1 2 2 3 1 2 2 1 2 1 1