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Annual Report 2008-09the net profit for the year was Rs.5256.42 crore (19.19% of total income) as compared to Rs.5026.02 crore(21.53% of total income) in 2007-08.TCS is amongst the leading global IT companies and continues to retain its leadership position in the Indian ITIndustry. With Consolidated Revenues at Rs.27812.88 crore for the year ended March 31, 2009, TCS has, overthe last five years as a listed company, recorded a CAGR of 23.33%. TCS operates extensively in the globalmarket and the global economic slowdown in general, and the particular difficulties that the key globalmarkets and the customers of TCS have faced during this year on account of the economic conditions, hasrequired TCS to help customers meet their cost reduction goals, while enhancing the value. The currencymovement has been more volatile, with TCS gaining due to depreciation of the Rupee against major currencieslike US Dollar and Euro, while losing due to appreciation of Rupee against Pound Sterling. Given these difficultmarket and volatile currency environment, TCS did well in achieving business growth. At the same time,TCS continued to improve its operational profitability by conserving costs and creating efficiencies. Improvingcash collection was taken as a key focus area and TCS has improved on the key measure in Accounts Receivable.The number of days outstanding of its Debtors came down by 13 days to 78 days at the end of the year.TCS continues to focus on acquiring new customers while increasing its level of operations with existingcustomers, post high growth in new markets which are not as adversely affected by the economic slowdownand take efficiency and cost improvement measures.TCS has had growth in all industry segments. The Banking and Financial Services sector, which is the largestsegment for TCS, has faced unprecedented volatility and uncertainty in the global financial markets. Some ofthe major customers of TCS have had to restructure themselves. In this environment, TCS has registered growthin this sector. The Manufacturing and Retail verticals have grown as large transformation deals have rampedup, while the Travel, Energy and Media verticals have gained traction in new markets. Engineering servicescontinue to experience demand across all markets.Full services play continued to get traction with key service lines including Application Development andMaintenance, Infrastructure and Assurance services contributing to growth. TCS' Engineering and IndustrialServices along with IT services is enabling TCS to provide comprehensive offering to clients in Manufacturing andHi-Tech verticals, while the Global Consulting Practice is engaged by customers for IT optimization and overallIT strategy and governance related engagements. The broad range of services enables the Company to provide"end-to-end" services to its clients, in line with its position as a Global IT and Consulting Services Company.Combined with its industry focus and its geographical spread, the Company is able to provide comprehensiveand high value adding services to its clientele.In India, the Central and various State Governments are increasing their spending on e-governance initiatives.Many mission mode projects have been introduced and TCS has won a number of deals in this area.The USA continued to be the largest market for TCS and contributed 51.38% to the Company's consolidatedrevenues. Ramp-ups from recent large outsourcing contracts continue to drive growth in the UK andcontinental Europe which have contributed 29.53% of the consolidated revenues. Balanced growth across newgrowth markets like Latin America, Asia Pacific, Middle East and Africa has contributed 11.24% of theconsolidated revenues of the Company. India will continue to be a strategic market for the Company and hasshown growth in absolute terms. Adoption of IT would increase in the coming years across all segments in India.The Company has 140 offices globally. The Company has in addition, Global Delivery Centres in a number ofcountries. This helps the Company to meet the needs of its global clients. TCS has pioneered theGlobal Network Delivery Model TM , which the customers see as a key differentiator.6. International Credit RatingThe Company continues to have from Moody's Investors Services, an investment-grade issuer rating of A3 aswell as an indicative foreign currency debt rating of Baa1, with the ratings outlook as stable. The rating is notfor any specific debt issuance by TCS.22
The Company has also been rated by Dun & Bradstreet at 5A1 (Condition-Strong). The rating is assigned on thebasis of tangible networth and composite appraisal of the Company.Standard and Poor's Ratings Services has assigned to the Company its 'BBB' corporate credit rating with outlookas Stable.7. Strategic Acquisitions and AlliancesThe Company has been making acquisitions during the past few years, with the objective of moving towards itsgoal of being among the top IT companies in the world.During the year 2008-09, the Company has acquired Citigroup Inc.'s (Citi) 96.26% interest in TCS e-Serve Limited(formerly known as Citigroup Global Services Limited), the India-based captive BPO, for a total consideration ofUSD 504.54 million. In addition to the sale, Citi has signed an agreement for TCS to provide process outsourcingservices to Citi and its affiliates for an aggregate amount of USD 2.5 billion over a period of 9.5 years. Theacquisition broadens TCS' portfolio of end-to-end IT and BPO services in the global Banking and FinancialServices (BFS) sector. The agreement builds upon the existing relationship between Citi and TCS whereby TCSprovides application development, infrastructure support, help desk and other process outsourcing services toCiti. This acquisition has not only helped in acquiring new capabilities in the banking domain, but has alsounderscored the importance of TCS' long-term, sustainable relationships with its large customers, including Citi.The acquisition complements TCS' domain expertise and has brought in new capabilities to TCS that will helpdrive growth going forward.8. Human Resource DevelopmentTCS is the largest IT employer in India with more than 126,000 employees and with over 143,000 employeesincluding those in its subsidiaries. This diverse and global employee base from 67 nationalities is central tosustaining TCS' competitive edge.The Company's recruitment practice ensures that suitable candidates with merit are recruited and providedwith the right opportunities to grow within the organization. During the year, the Company added a net of19,216 persons through recruitment. Over 10,500 non-Indian nationals are employed in TCS. The percentage ofwomen working for the Company has increased to 30% from 28% last year. The attrition rate for this fiscal is11.4%, which is amongst the lowest in the industry.TCS continues to be recognized for its excellent Human Resource (HR) practices. TCS has once again receivedthe top ranking in HR in Data Quest-IDC's Best Employer Award and has been ranked No. 2 as a DreamCompany. Further, TCS has been certified as 'Investor in People' and received the 'Champion of Learning'certificate from the American Society for Training & Development (ASTD) in the UK, and ranked among the'Top 15 Great Places to Work' in Uruguay. These recognitions re-affirm the robustness of TCS' processes notonly in India, but world-wide, and its commitment to be a Global Employer.TCS won the Recruiting and Staffing Best in Class Awards (RASBIC) 2008-09 for 'Best Use of Technology inRecruiting' and 'Most Innovative Program/Initiative in Recruiting' and also received the Finalist Award for the'Best Employee Referral Programme' at ERE Expo 2009 by showcasing the 'Bring Your Buddy Programme'.The HR function has been restructured to align with the new business structure. This re-organization hascreated multiple opportunities for leadership growth and has empowered the next generation of leaders.A host of new leadership development programmes have been developed to equip the potential leaders tomeet with business challenges. The training programs at the entry level as well as the continuous learningprograms covering technology, domain and project management practices have been enhanced to ensure thatthe Company has the right competency in its workforce that can deliver to customers' business needs and keepthe Company's commitment of 'Experience certainty'. The total number of person days spent on variouslearning programs amount to over 16 lakh and over 22,000 certifications have been completed by theemployees on varied technology and products.23
Page 1 and 2: Annual Report 2008 - 09agilityina D
Page 3 and 4: ContentsBoard of Directors 2Our Lea
Page 5 and 6: Laura M ChaIndependentDirectorDr. R
Page 7 and 8: N ChandrasekaranChief Operating Off
Page 9 and 10: Your Company remained focused on he
Page 11 and 12: "TCS is a valued customer, supplier
Page 13 and 14: “Nielsen is moving quickly to tra
Page 19 and 20: Board of DirectorsR N Tata (Chairma
Page 21 and 22: Management TeamFunctionNameIndustry
Page 23: 3. DividendBased on the Company's p
Page 27 and 28: 11. Corporate SustainabilityIn keep
Page 29 and 30: 13. Corporate Governance Report and
Page 31 and 32: Annexure to the Directors’ Report
Page 33 and 34: Expenditure on R&D(Rs. in crore)Yea
Page 35 and 36: Sr. Name Age Designation Gross Net
Page 49 and 50: DECLARATION REGARDING COMPLIANCE BY
Page 51 and 52: Chart 3: IT Services spends by indu
Page 53 and 54: B. FOCUS AREAS OF THE COMPANY1. Vis
Page 55 and 56: 2.6 Organisation: From April 2008,
Page 57 and 58: Company also offers PerformanceMana
Page 59 and 60: 4. R&D and Innovation Labs: TCS est
Page 61 and 62: Chart 24: Diversity: Global work fo
Page 63 and 64: The Company’s ability to bid for
Page 65 and 66: Corporate Governance practices and
Page 67 and 68: TCS LIMITED (UNCONSOLIDATED)RESULTS
Page 69 and 70: eduction in cost of software licens
Page 71 and 72: FINANCIAL POSITION - TCS LIMITED(UN
Page 73 and 74: Deferred tax assets (net)Details of
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Cash flow from investing activities
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RevenuesRevenues from operationsThe
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The primary reasons for the decreas
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obligations under finance lease was
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Rs.137.03 crore as at March 31, 200
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COMPANY'S CONSOLIDATED PERFORMANCE
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INTERNAL CONTROL SYSTEMS AND THEIR
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Name of Category Number of Board Wh
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(v)The composition of the Audit Com
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(ix)Group Health Insurance as separ
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Capital and revenue budgets and cap
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(vi)Market Price Data:High, Low (ba
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(xi) Shareholding as on March 31, 2
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COMPLIANCE CERTIFICATETO THE MEMBER
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ANNEXURE TO THE AUDITORS' REPORT(Re
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trading in shares, securities, debe
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INCOMEProfit and Loss Account for t
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Schedules forming part of the Balan
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Schedules forming part of the Profi
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SCHEDULE ‘Q’ - NOTES TO ACCOUNT
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services are rendered. Revenue from
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3) The Company has given undertakin
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The estimate of future salary incre
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Particulars Geographic Segment (Rs.
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ii) TCS Financial Solutions Austral
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(Rs. in crores)Particulars Holding
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(Rs. in crores)2009 2008Remuneratio
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19) Micro and Small Enterprises(Rs.
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Number of Number of Gross AmountNon
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No. of Shares* Tata Consultancy Ser
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AUDITORS’ REPORT ON CONSOLIDATED
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Consolidated Profit and Loss Accoun
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Schedules forming part of the Conso
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SCHEDULE ‘D’UNSECURED LOANSSche
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e) DepreciationDepreciation other t
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Dividends are recorded when the rig
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Name of the Company Country of Perc
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3) Acquisitions / Divestmenta) On M
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Funded retirement benefits Indian F
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7) Unbilled revenue as at March 31,
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Particulars Geographic Segment (Rs.
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B) Transactions with related partie
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2009 2008(Rs. in crores)(Rs. in cro
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Net loss on derivative instruments
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Rs. in croresSr. Name of the Subsid
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Awards and RecognitionsWall Street
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