TCS Corporate Sustainability Report 2010-11 - Tata Consultancy ...

The Company believes that it has sufficient cash from operations to meet its working capital
requirements. In addition it has short term working capital facilities with various commercial banks.
The available lines of credit with banks were $ 307 Mn as at March 31, 2011.
Independent Credit Ratings
Although we have historically never used debt to fund growth, that option is always available given
our strong credit-worthiness. An independent assessment of the Company’s financial strength and
sustainability is the credit rating assigned to TCS by various global rating agencies.
Credit Rating Agency Rating Comments
Moody’s Investor Services
Standard and Poor’s
Ratings Services
A3 Investment Grade Issuer
Baa1 indicative foreign currency
debt rating with stable outlook
The rating is not for an
specific debt issuance by
the Company.
BBB corporate credit rating Outlook: Positive
Dun & Bradstreet 5A1 (Condition-Strong) The rating is assigned
on the basis of tangible
net worth and composite
appraisal of the Company.
Shareholder Value delivered, year after year
After going public, TCS has consistently paid out dividends to its shareholders every year, maintaining
a payout ratio of around 30%. In FY 2011, the Company paid a total dividend of $0.29 (Rs 14) i.e. a
payout ratio of 36.63% of the unconsolidated profits under US GAAP.
TCS’ market capitalization as of March 31, 2011 was $51.9 Bn, a 53% increase over the market-cap at
the end of FY 2010.
Supplyside Sustainability
The largest factor that goes into our business is human capital and therefore sustainability of
revenue growth in the IT Services industry is directly dependent on the organization’s ability to
attract the right talent in the right quantity and thereafter, upskilling, motivating and retaining them
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in the organization .
Ours is a highly educated, highly aware workforce whose technical skills are much valued globally and
consequently, many of the labor-management imbalances found in traditional industry (or the
corrective measures sought through collective bargaining) are largely absent here. Employment is at
will with one month’s notice period from either side for termination, but employees have significantly
higher bargaining power in this industry, so workers’ interests are largely protected by the free market
and less than 0.01% of the workforce is unionized.
Recognizing the criticality of human capital to the business and its sustainability, TCS has
mature processes devoted to attracting, retaining and developing this human capital, assessed at
PCMM Level 5.
12 The supplyside part of our business is largely around human capital. In addition, we procure various pieces of equipment and software that make up the
Company’s IT infrastructure, largely sourced from the local offices of leading global technology providers. Office supplies and consumables are all locally
sourced by individual operating units in the different regions where we operate.
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