Tata Consultancy Services

Dear Shareholders,
 
 I am pleased to report that your Company continues to demonstrate the
 robustness of its business model with a strong annual performance for
 the year 2008-09. During this period, your Companys consolidated
 revenues grew by 23 per cent to Rs.27,813 crore, thereby helping Tata
 Consultancy Services cross the $ six billion revenue milestone.
 
 Your Companys consolidated operating profits grew by 26 per cent to
 Rs.7,170 crore and its operating margins improved by 109 basis points
 to 23.73 per cent. The net profit was Rs.5,256 crore, a growth of 5 per
 cent over 2007-08, due to external factors like extreme currency
 volatility.
 
 The Companys Board of Directors has recommended a final dividend of
 Rs.5 per share subject to shareholders approval. This brings the total
 dividend payout in the financial year to Rs.14 per share. The Board of
 Directors have also recommended an issue of bonus shares in the ratio
 of 1:1 - the second bonus issue since your Company went public in 2004.
 This demonstrates the confidence in the ability to perform and the
 soundness of the business model of your Company.
 
 At the end of the year 2008-09, TCS global footprint extended to over
 42 countries through its 140 offices globally. Your Company remained
 focused on helping customers experience certainty while simultaneously
 adding new customers and growing the business in new market segments
 and emerging verticals. Your Company closed 28 large deals and added
 163 new customers globally in the past one year. There was an increase
 in the number of customers across all revenue bands of  million,
 million, $ 10 million, million and $ 50 million.
 
 TCS biggest market North America crossed the  billion revenue
 milestone and grew by 26 per cent in 2008-09 despite the recession in
 the region, while Europe grew by 38.5 per cent during the year. The
 growing presence in multiple markets is important for your Company to
 ensure diversification of its revenue base and sustain its growth
 momentum.
 
 The immense talent, professionalism, dedication and support of over
 143,000 TCSers continues to be your Companys greatest asset. This
 includes 10,000 international associates from 67 nationalities. Your
 Company inducted 48,000 professionals including more than 22,000 campus
 graduates over the past year. More than 1.6 million learning days have
 been invested in developing new competencies during 2008-09 and around
 23,000 TCSers gained additional technology certifications.  The
 policies to recruit and retain women professionals continue to bear
 fruit and the number of women in your Company has risen from 28% to 30%
 of the total employee count last year.
 
 TCS continued to drive new growth opportunities as demonstrated by the
 strategic, $ 505 million acquisition of Citigroups captive BPO in
 India.  This acquisition, which has since been renamed TCS e-Serve
 Limited, has enabled your Company to add a vital new aspect to its
 banking and financial services business. The acquisition came with
 12,500 talented professionals and a contract from Citigroup worth .5
 billion over nine years. This move will help expand your Companys
 leadership in the Banking Financial Services domain and has already
 made TCS BPO among the top two BPO players in India in terms of the
 size of operations.
 
 Your Company has also increased its focus on a sustained efficiency
 program across the enterprise. This includes working towards improving
 cash collection, controlling expenditure and optimising wherever
 possible. These measures are showing visible success.
 
 TCS growth has occurred within a challenging economic climate. Your
 Company has demonstrated leadership, remained disciplined in execution
 and faced a volatile market with a positive can do attitude.  The
 recession which began as a client-specific US instance expanded to an
 industry-generic malady and affected global businesses. While there has
 been some impact on the short-term growth rates of the Indian IT
 industry in this financial year,TCS value proposition to global
 business remains strong.
 
 Looking towards the future, your Company will remain focused on
 agility, innovation and operational excellence. TCS has always adapted
 quickly to changing circumstances by its responsive and creative
 thinking. For customers, TCS presents an enviable value proposition
 enabled by four decades of experience, domain knowledge, technology
 excellence and offerings of full services play. TCS is well poised to
 gain advantage from newer areas such as Healthcare, Energy, Utilities
 and Telecommunication including the impact of new technologies such as
 Broadband, 3G,WIMAX,LTEand others.
 
 TCS continues to invest for the future. Sustainability, Green IT and
 Cloud Computing are areas of opportunity and your Company is leveraging
 these. The Cloud Computing based IT services model for small and medium
 enterprises, currently being piloted in India, is an example of a
 business model innovation that will set a new precedence in the IT
 industry. Such initiatives can be replicated, once they are mature,
 into multiple global markets. TCS platform-based BPO initiatives in
 areas like Human Resources and Finance and Accounting will also
 contribute to future growth.
 
 Your Company has been continuously making investments to open up new
 markets and services. The investments your Company has made in new
 growth markets like Asia-Pacific, Latin America and now in Middle East
 and Africa are attaining scale, size and a meaningful presence. In
 2008-09, the new growth markets grew at a rate of 16%.
 
 Your Companys vast pool of human capital is helping chart the
 Companys future progress not only in terms of its business but also by
 its impact on the community. Over 50,000 hours of volunteering effort
 was expended by TCSers, in the past year. One area where considerable
 progress was made, has been in the area of corporate sustainability.
 The increased environmental consciousness across the organisation has
 resulted in reduction in air travel, 8% drop in electricity
 consumption, lower paperand printer cartridge utilisation.  This
 coupled with green buildings and green technologies has helped
 reduce carbon footprint this year.
 
 TCS continues to be an engine of growth because of its proven ability
 to reinvent the organisation and the business. Your Company is
 positioned to work in collaborative mode, learning constantly,
 critically evaluating all that it does and demonstrate the leadership
 it is known for. Thanks to the employees and their extended families,
 the many shareholders and the community at large, the future holds new
 promise for TCS as a top technology company globally.
 
 With regards,
 
                                                          S.Ramadorai,
                        Chief Executive Officer and Managing Director