in a Dynamic Environment - Domain-b

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Annual Report 2008-09Management Discussion and AnalysisA. INDUSTRY OVERVIEWWorld-wide technology and related services spend isestimated to have crossed USD 1.6 trillion in 2008, agrowth rate of 4.6% over 2007. Due to the slowdown,considerable reductions were experienced in IT servicespends across geographies. According to technologyanalyst firm Gartner, the Americas experienced a 6.6%growth in 2008 in comparison to 7.1% growth in 2007.Europe experienced a growth rate of 11.5% in 2008 incomparison to 14.3% in 2007 and UK experienced 12%growth in 2008 in comparison to 15% growth in 2007,with most of the growth being experienced in the firsttwo quarters of 2008.The economic downturn contributed to reductions inspending in the last quarter of 2008 and the first quarterof 2009. Companies reduced IT spending either by delayingthe decisions or by putting some discretionary spendingon new IT projects on hold. This in turn, led to both pricingand volume pressures for IT service providers.Some of the drivers of IT spending were focused aroundthe following: Increase in operational efficiency throughimprovements in business processes, infrastructureconsolidation, re-engineering, virtualization,workload management, cut down on cycle time,increase speed to market Increased regulation leading to more enterpriseregulation, security and reporting New focus areas including green IT and mobility/ubiquity initiatives.Industry performance and projectionsGlobally technology spending continues to grow evenduring tough economic times and this is expected tofurther increase once the global economy starts itsrecovery process. Information Technology (IT) has becomean integral part of business operations across industriesand is seen by organizations as a primary driver ofproductivity improvement and business transformationthat lead to sustained competitive advantages in themarket place. The IT services segment grew by 9.0% in2008 to USD 820 billion and is expected to grow at aCompounded Annual Growth Rate (CAGR) of 7.1% till2012, according to a Gartner Dataquest estimate. TheBusiness Process Outsourcing sector grew by 11.9%worldwide last year as per NASSCOM strategic review2009.Size and scope of global opportunityGartner forecast for information technology spendsChart 1: World-wide IT spendsAmount in USD MillionWorldwide IT services market size forecast (2008-2012) for servicesServices/Year CY 2008 CY 2012 CAGR(2008-2012)Global ConsultingPractice 72,448 85,903 6.7%Development andIntegration 254,500 302,983 6.9%Enterprise solutions,Business Intelligenceand KnowledgeManagement 55,847 74,486 10.6%IT InfrastructureServices 221,254 268,361 7.4%Business ProcessOutsourcing 120,078 157,495 9.1%Others 95,661 101,936 3.0%Total 819,788 991,164 7.1%Source: Gartner Feb’09Chart 2: IT Services spends by GeographyAmount in USD MillionWorldwide IT services market size forecast (2008-2012) for geographiesGeography/Year CY 2008 CY 2012 CAGR(2008-2012)Americas 329,763 410,534 7.1%Asia Pacific 150,097 170,020 6.2%Europe 187,265 215,885 7.1%Ibero America 50,385 70,721 12.9%India 5,453 9,413 18.4%Middle East Africa 12,439 16,813 12.8%UK & Ireland 84,386 97,778 4.0%Total 819,788 991,164 7.1%Source: Gartner Feb’0948
Chart 3: IT Services spends by industry verticalsAmount in USD MillionWorldwide IT services market size forecast (2008-2012) for industry verticalsIndustry/Year CY 2008 CY 2012 CAGR(2008-2012)Banking and FinancialServices 137,676 165,580 6.6%Insurance 53,765 62,963 6.6%Manufacturing 98,533 113,048 5.5%Energy 3,951 4,609 5.7%Utilities 33,714 44,225 9.9%Government 154,144 194,422 8.2%Healthcare 26,375 33,580 9.4%Hi-Tech 57,823 68,318 6.6%Life Sciences andPharmaceutical 11,303 13,306 7.0%Telecom, Media andEntertainment 108,199 128,952 7.0%Retail 58,998 71,632 7.1%Travel andTransportation 29,587 35,729 7.0%Hospitality 8,999 10,751 6.5%Others 36,721 44,049 7.3%Total 819,788 991,164 7.1%Source: Gartner Feb’09NASSCOM STRATEGIC REVIEW 2009 MARKET SIZINGAND FORECASTIT Industry estimates of spendingChart 4: IT services spends by categoryChart 5: Share of key markets in global IT servicesspending in 2008IT services market CY 2008 Growth (%)% shareNorth America 39.0United States 36.04.2Latin America 3.0 10.0Western Europe 37.6 5.0Central Europe 4.7 14.7Asia Pacific 15.7Japan 8.06.8Total 100Source: NASSCOM Strategic Review 2009Chart 6: Share of key markets in global BPO spendingin 2008BPO market CY 2008 Growth (%)% shareAmericas 63.2 10.8Europe, Middle Eastand Africa 19.2 11.8Asia Pacific 17.6 15.3Total 100.0 11.9Source: NASSCOM Strategic Review 2009As per the Nasscom Strategic Review 2009, globaltechnology spends is expected to increase from USD 1,561billion in 2008 to USD 1,962 billion in 2012 at a CAGR of5.2%.Chart 7: Global sourcing trends in 2008Source: NASSCOM Strategic Review 2009The spending on IT Services of USD 557 billion in CY 2008included USD 211 billion on IT outsourcing. The IToutsourcing business grew by 7.2% over CY 2007.Source: NASSCOM Strategic Review 2009As per NASSCOM Strategic Review 2009 the analysis ofthe IT Services global sourcing market by the level ofpenetration in the various components of IT servicesreveals that there is significant headroom for growth.49
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 and 24: 3. DividendBased on the Company's p
Page 25 and 26: The Company has also been rated by
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: DECLARATION REGARDING COMPLIANCE BY
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
Page 75 and 76: Cash flow from investing activities
Page 77 and 78: RevenuesRevenues from operationsThe
Page 79 and 80: The primary reasons for the decreas
Page 81 and 82: obligations under finance lease was
Page 83 and 84: Rs.137.03 crore as at March 31, 200
Page 85 and 86: COMPANY'S CONSOLIDATED PERFORMANCE
Page 87 and 88: INTERNAL CONTROL SYSTEMS AND THEIR
Page 89 and 90: Name of Category Number of Board Wh
Page 91 and 92: (v)The composition of the Audit Com
Page 93 and 94: (ix)Group Health Insurance as separ
Page 95 and 96: Capital and revenue budgets and cap
Page 97 and 98: (vi)Market Price Data:High, Low (ba
Page 99 and 100: (xi) Shareholding as on March 31, 2
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COMPLIANCE CERTIFICATETO THE MEMBER
Page 103 and 104:
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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in a Dynamic Environment - Domain-b

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