To the Members,
The Directors submit the Annual Report of the Company along with the
audited financial statements for the financial year ended March 31,
1. Financial Results
2011-2012 2010-2011 2011-2012 2010-2011
(i) Revenue from
operations 38,858.54 29,275.41 48,893.83 37,324.51
expenditure 27,472.82 20,511.88 34,458.52 26,146.15
and amortisation 688.17 537.82 917.94 735.26
(iv) Operating profit 10,697.55 8,225.71 13,517.37 10,443.10
(v) Interest expense 16.40 20.01 22.23 26.48
(vi) Other income (net) 2,685.18 494.73 428.17 604.00
(vii) Profit before
tax 13,366.33 8,700.43 13,923.31 11,020.62
for tax 2,390.35 1,130.44 3,399.86 1,830.83
interest and share
of loss of associate - - 109.96 121.75
(x) Profit for
the year 10,975.98 7,569.99 10,413.49 9,068.04
from previous year 14,069.20 10,458.13 18,635.05 13,604.84
appropriation 25,045.18 18,028.12 29,048.54 22,672.88
equity shares 1,761.49 1,174.32 1,761.49 1,174.32
(b) Proposed final
dividend on equity
dividend) 3,131.55 1,565.78 3,131.55 1,565.78
(c) Total dividend
on equity shares
(a + b) 4,893.04 2,740.10 4,893.04 2,740.10
shares 22.00 11.00 22.00 11.00
(e) Tax on dividend 797.34 450.82 806.86 459.15
(f) General reserve 1,097.60 757.00 1,166.10 827.58
(g) Balance carried
to balance sheet 18,235.20 14,069.20 22,160.54 18,635.05
(1 crore = 10 million)
Based on the Companys performance, the Directors are pleased to
recommend for approval of the members a final dividend of Rs 8 per share
and a special dividend of Rs 8 per share for the financial year 2011-12
taking the total dividend to Rs 25 per share (previous year Rs 14 per
share) on the capital of 1,95,72,20,996 equity shares of Rs1 each. The
final dividend and the special dividend on the equity shares, if
approved by the members would involve a cash outflow of Rs 3,639.57
crores including dividend tax. For equity shares, the proposed final
dividend (including special dividend), interim dividends already paid
and dividend tax for the financial year 2011-12 would aggregate Rs
5,686.82 crores, resulting in a payout of 51.93% of unconsolidated
profit of the Company (54.75% of consolidated profit).
The redeemable preference shares allotted on March 28, 2008 are
entitled to a fixed cumulative dividend of 1% per annum and a variable
non-cumulative dividend of 1% of the difference between the rate of
dividend declared during the year on the equity shares of the Company
and the average rate of dividend declared on the equity shares of the
Company for the three years preceding the year of issue of the said
redeemable preference shares. Accordingly, the Directors have
recommended, for approval of the members, a dividend of twenty-two
paise (Rs 0.22) per share on 100,00,00,000 redeemable preference shares
of Rs 1 each for the financial year 2011-12.
3. Transfer to Reserves
The Company proposes to transfer Rs 1,097.60 crores to the general
reserve out of the amount available for appropriations and an amount of
Rs 18,235.20 crores is proposed to be retained in the statement of
profit and loss.
4. Companys Performance
During the financial year 2011-12, the volatility in the macroeconomic
environment continued to cast its shadow and most of the markets where
TCS operates in, were impacted. Even in this environment, the Company
recorded industry leading financial performance. The major contributing
factors for such all round performance across geographies and industry
verticals were the Companys customer-centric approach and its ability
to innovate customer specific solutions, focus on pricing, disciplined
execution of complex projects and the rigor in following strong
In the financial year 2011-12, the Company continued its strong growth
momentum across major markets. Revenue growth in the year remained
high in North America (29.62%), UK (29.16%), Europe (41.62%), Asia
Pacific (50.67%) and Middle East & Africa (43.38%). Other geographies
also witnessed double digit growth rates.
In the financial year 2011-12, most of the industry verticals
registered healthy growth rates. Revenue growth in BFSI (27.44%),
Retail & Consumer Packaged Goods (45.05%) and Manufacturing (38.11%)
were significant contributors. Revenue growth in other industry
verticals was also significantly high at 37.27% - the major
contributors were Life Sciences and Healthcare (33.10%), Hi-Tech
(57.32%), Travel, Transport & Hospitality (42.85%).
The Company became the first Indian IT Company to cross the US
billion milestone in terms of annual revenue.
On consolidated basis, revenue for the year 2011-12 at Rs 48,893.83
crores was higher by 31.00% (Rs 37,324.51 crores in 2010-11), operating
profit at Rs 13,517.37 crores was higher by 29.44% (Rs 10,443.10 crores
in 2010-11) and the net profit for the year at Rs 10,413.49 crores was
higher by 14.84% (Rs 9,068.04 crores in 2010-11).
On unconsolidated basis, revenue for the year 2011-12 at Rs 38,858.54
crores was higher by 32.73 % (Rs 29,275.41 crores in 2010-11), operating
profit at Rs 10,697.55 crores was higher by 30.05% (Rs 8,225.71 crores in
2010-11) and the net profit for the year at Rs 10,975.98 crores was
higher by 44.99% (Rs 7,569.99 crores in 2010-11).
The Company has been making good progress in the strategic initiatives
to drive its non-linear growth. Software products (Asset Leveraged
Solutions) have added significant new customers during the year.
Platform based BPO or process cloud have been offered in the areas of
life insurance and pensions, analytics, finance and accounts, HR
outsourcing and procurement. iON, the Companys cloud based platform
for small and medium businesses launched in early 2011 has gained
momentum in 2012.
5. International Credit Rating
The Company continues to have an A3 investment-grade issuer rating as
well as an indicative foreign currency debt rating of Baa1, with a
stable outlook from Moodys Investors Services. The rating is not for
any specific debt issuance of the Company.
Standard and Poors ratings services has assigned BBB positive
corporate credit rating with outlook as Negative to the Company.
The Company has also been rated by Dun & Bradstreet at 5A1
(Condition-Strong). The rating is assigned on the basis of tangible net
worth and composite appraisal of the Company.
6. Strategic Alliance
With the objective of moving towards its goal of being amongst the top
IT companies in the world, the Company has made acquisitions/alliances
over the past few years either directly or through its subsidiaries.
On January 24, 2012, Tata Consultancy Services Japan Limited, a wholly
owned subsidiary, entered into an agreement with Mitsubishi
Corporation, pursuant to which a new subsidiary company, Nippon TCS
Solution Center Limited (NTSC) has been setup. NTSC will offer a full
service suite of IT, BPO and infrastructure services to Japanese
7. Human Resource Development
Employees today are looking for development opportunities, future
career options, empowerment and work-life balance in an organisation.
To retain leadership position, the Company continuously innovates and
customises its human resource (HR) strategy to meet changing employee
The global diverse talent base of 2,38,583 competent people, consisting
of 110 nationalities, 31.6% women, 69% belonging to Gen Y is the key
asset to retain the competitive edge and leadership position in the
market. The Companys HR processes cope up with the scale and
complexity to manage this diverse talent base spread across 55
countries. The Company continues to invest in its people to upgrade
their technical, domain and leadership capability. A total of 9,972
person years of effort were invested in the year 2011-12 on various
learning and development programmes including the Initial Learning
Programme (ILP) offered to trainees joining the Company.
During the year 2011-12, the consolidated gross addition of 70,400
employees and net addition of 39,969 employees was highest ever in the
history of the Company. This included 1,898 people in-sourced from
The academic interface programme (AIP) was strengthened and expanded to
reach 673 institutes in India and 184 institutes abroad. The Company
visited 389 campuses in India and released 43,604 offers. The Company
also conducted campus placements outside India especially in USA,
Canada, China, Uruguay and Hungary.
The rigorous focus on talent engagement, deployment on right projects,
role & career progression and benchmarked compensation & benefits
helped the Company to attract and retain the best talent. The Company
has launched Employee Assistance Programme, which would provide
employees 24X7 confidential counselling services, to enable them to
cope more effectively with stressful situations. The Company improved
its talent retention globally which is reflected in the attrition
dropping from 14.4% in the year 2010-11 to 12.2% in the year 2011-12.
The Company sustained high utilisation rates throughout the year (82.2%
excluding trainees and 74.4% including trainees). Such high level of
utilisation could be achieved due to the robustness of the Companys
sourcing to staffing process and talent management practices that
ensured the availability of people with the right competencies at right
places to meet the business demand.
8. Quality Initiatives
Sustained commitment to high levels of quality, best-in-class service
management and robust information security practices helped TCS to
attain a number of milestones during the year.
TCS continues to maintain the enterprise-wide highest maturity Level 5
for CMMI®-DEV (Development) and CMMI®-SVC (Services) models. In the
year 2011-12, TCS had set a new benchmark as the first publicly stated
recipient to achieve a Multiple Simultaneous Appraisal against two
constellations of the CMMI® model; and is also the first organisation
in the world to be appraised at Level 5 of the CMMI®-SVC model, which
underscores the maturity of the firms fast growing business process
outsourcing (BPO) and infrastructure services business.
TCS is enterprise-wide certified against ISO 9001:2008 (Quality
Management), ISO 27001:2005 (Security Management) and ISO 20000:2005
(Service Management). TCS also continues to maintain domain specific
quality certifications AS 9100 (for Aerospace Industry), ISO 13485 (for
Medical Devices) and TL 9000 (for Telecom Industry).
TCS is enterprise-wide certified against ISO 14001:2004 (Environmental
Management) and OHSAS 18001:2007 (Occupational Health and Safety
Management). These certifications demonstrate TCS strong commitment to
the environment and the occupational health and safety of its
associates and business partners; and helps convey this to all its
stakeholders, including customers.
In the area of Knowledge Management, TCS received the prestigious Most
Admired Knowledge Enterprise (MAKE) award for the 7th time in India and
Asia. TCS also received the global Independent Operating Unit (IOU)
MaKE award for the 2nd time.
TCS launched Campus Commune, a social collaboration platform, to
engage with potential and selected recruits from academic institutions.
The network of students, faculty groups and TCS groups facilitate
knowledge and experience sharing between academia and the Company. At
the recently held World HRD Congress, Campus Commune was recognised as
an innovative initiative in the talent recruitment and management area.
The cornerstone of these certifications is the in-house developed
Integrated Quality Management System (iQMS) - a vibrant,
process-driven, people-oriented and customer-focused quality management
system. iQMS is continuously evolving to cater to the requirements of
TCS varied business offerings; and is the backbone supporting the
Global Network Delivery Model (GNDMTM).
9. Corporate Sustainability
The Companys initiatives in the community aim to create impact through
empowerment so that the people in the community can make a better
living and lead a better quality of life. The Company has chosen four
areas to focus its energies on namely Education and Skill Development,
Health, Environment and Affirmative Action.
Programmes undertaken under these four broad areas are aimed at
economically backward and other marginalized groups (like women,
children and aged) as well as those who are physically or socially
The Companys community initiatives are delivered using four different
(i) Leveraging the Companys core competencies in technology
(ii) Creating conditions for employee participation through
(iii) Building synergistic partnerships with clients and other partners
(iv) Financial sponsorships
In the Education and Skill Building area, the primary programmes are:
(i) Computer-based Functional Literacy (CBFL) programme helps teach
illiterate adults how to read and write. The literacy software was
enhanced to support writing and numeracy in four additional local
languages (Bengali, Oriya, Marathi, and Tamil). A total of nine
languages are now covered under CBFL. TCS collaborated with
Directorate of Adult Education under Saakshar Bharat Scheme to run
camps in eight languages in India. More than 11,100 adults were made
literate using the CBFL software.
(ii) InSight, addressing school children to develop their communication
skills and giving them an exposure to IT Industry.
(iii) GoIT, addressing school children in Cincinnati, USA around the
Companys campus and giving them exposure to the IT Industry and an
opportunity to work on latest technology in the Companys research
(iv) mKrishi - Enhance farmers knowledge about their crops and provide
solutions to their problems over mobile phones.
(v) Advanced Computer Training - The Company organises training for
visually impaired candidates to improve their employability in IT/ITES
industry. Two batches were completed during the year 2011-12.
(vi) Skill Development - A special programme to develop skills of NGOs
to help them manage their operations and finances better along with
Yale University and one of the Companys large customers in the
(vii) TCS Research Scholar Scheme supporting students who wish to
pursue PhD in India.
(viii) Academic Collaboration by conducting faculty development
programmes, workshops for students and establishing joint research labs
in the Institutes.
In the area of Health, the primary programmes are:
(i) Developing applications and Portals. During the year 2011-12,
systems were developed and maintained, where necessary, for Lady Tata
Memorial Trust in UK, Impact India, Smile Train, Childline, Mumbai
Mobile Creches, Cancer Institute (Chennai) and Tata Medical Centre.
(ii) Creating awareness - HIV and AIDS awareness programmes were
conducted by TCSers who have formed Club RED to drive this initiative.
In addition, TCSers in USA participated in a number of Walks, sometimes
for causes supported by the Companys customers to increase awareness
of diabetes and cancer.
(iii) Blood donation camps - These camps are organised regularly across
the delivery centers in India and a similar drive was organised in
Singapore in association with Red Cross.
(iv) Today is a Good Day - A programme to increase awareness of cancer
(v) WebHealth Center - Providing free medical consulting and advice
over the web.
To promote wellness and raise money for local charities, TCS supports a
number of sporting events, like Mumbai marathon, TCS World 10K race,
TCS Amsterdam marathon as well as the New York City, Boston and Chicago
In the area of Environment, the primary programmes are:
(i) Enhancing awareness - Organising different events to enhance
(ii) Reduction of carbon footprint and waste within the organisation by
following Reduce, Reuse and Recycle themes.
In the area of Affirmative Actions, the primary programme is as
Enhancing Employability and Create Employment - The Company initiated a
programme to train economically deprived and socially disadvantaged
candidates for BPO jobs and absorb some of them based on the Companys
requirements and their performance during training. The Company trained
7,828 economically weaker candidates during the year 2011-12, out of
which 3,071 were socially disadvantaged candidates. Post completion of
training, 1,018 offers were given, out of which 313 were socially
disadvantaged candidates. During the year 2011-12, a total of 717
candidates offered (in the year 2011-12 and last quarter of the year
2010-11) joined TCS, out of which 326 are socially disadvantaged
During the year, the Company received various awards and recognitions,
some of which are given below:
- Outstanding Company of the Year 2012 - CNBC TV18
- Ranked #1 Employer in India – Data Quest
- Best Company to Work For - Business Today
- Ranked #1 in Data Quest Top 20 IT companies
- ICAI Award for Excellence in Financial Reporting
- IT Company of the Year - NDTV Business Leadership Awards
- Indian IT Company of the Year- Bloomberg-UTV CXO Awards 2011 Global
- 5th in Bloomberg Business weeks Tech 100
- 7th in Newsweeks Global Green Rankings
- Indias Best Managed Company - Finance Asia
- Forbes Asias Fab 50 companies
- Gold SABRE, USA for Executive Leadership Communications
- Best Architecture Trophy 2011 for TCS campus at Siruseri, Chennai
at International Property Awards
11. Corporate Governance Report and Management Discussion and Analysis
Statement Corporate Governance Report and Management Discussion and
Analysis statement are attached to this Report.
12. Directors Responsibility Statement
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 (Act), and based on the representations received from the
operating management, the Directors hereby confirm that:
(i) in the preparation of the Annual Accounts for the year 2011-12, the
applicable Accounting Standards have been followed and there are no
(ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for the financial year;
(iii) they have taken proper and sufficient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act. They confirm that
there are adequate systems and controls for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(iv) they have prepared the Annual Accounts on a going concern basis.
13. Subsidiary Companies and Consolidated Financial Statements
The Company had 54 subsidiaries at the beginning of the year. Four
subsidiaries were set up during the year viz.:
(i) Tata Consultancy Services Qatar S.S.C.
(ii) Nippon TCS Solution Center Limited
(iii) Tata Consultancy Services Osterreich GmbH
(iv) Tata Consultancy Services Danmark ApS
The total number of subsidiaries as on March 31, 2012 is 58.
There has been no material change in the nature of the business of the
subsidiaries. A statement containing brief financial details of the
subsidiaries is included in the Annual Report.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statement of the Company and all
its subsidiaries is attached. The consolidated financial statements
have been prepared in accordance with the relevant accounting standards
as prescribed under Section 211(3C) of the Act. These financial
statements disclose the assets, liabilities, income, expenses and other
details of the Company, its subsidiaries and associate companies.
Pursuant to the provision of Section 212(8) of the Act, the Ministry of
Corporate Affairs vide its circular dated February 8, 2011 has granted
general exemption from attaching the balance sheet, statement of profit
and loss and other documents of the subsidiary companies with the
balance sheet of the Company. A statement containing brief financial
details of the Companys subsidiaries for the financial year ended
March 31, 2012 is included in the Annual Report. The annual accounts of
these subsidiaries and the related detailed information will be made
available to any member of the Company/its subsidiaries seeking such
information at any point of time and are also available for inspection
by any member of the Company/its subsidiaries at the registered office
of the Company. The annual accounts of the said subsidiaries will also
be available for inspection, as above, at the head offices/registered
offices of the respective subsidiary companies. The Company shall
furnish a copy of the details of annual accounts of subsidiaries to any
member on demand.
14. Fixed Deposits
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of the balance sheet.
Mr. O. P. Bhatt and Mr. Cyrus Mistry have been appointed as Additional
Directors on April 2, 2012. Mr. O. P. Bhatt is an Independent
Director. As per the provisions of Section 260 of the Act, both the
Directors hold office only up to the date of the forthcoming Annual
General Meeting (AGM) of the Company and are eligible for appointment
as Directors. The Company has received notices under Section 257 of the
Act, in respect of the above persons, proposing their appointment as a
Director of the Company. Resolutions seeking approval of the members
for the appointment of Mr. O. P. Bhatt and Mr. Cyrus Mistry as
Directors of the Company have been incorporated in the Notice of the
forthcoming AGM along with brief details about them.
Prof. Clayton M. Christensen, Dr. Ron Sommer and Mr. S. Ramadorai,
Directors, retire by rotation and being eligible have offered
themselves for re-appointment.
Mrs. Laura M. Cha, a Director of the Company since November 2, 2006,
who retires by rotation at the forthcoming AGM, has conveyed her
decision not to offer herself for re-appointment. She is also the
Chairperson of the Shareholders/Investors Grievance Committee. The
Directors place on record their appreciation of the valuable
contribution made by her.
M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the
statutory auditors of the Company, hold office, in accordance with the
provisions of the Act up to the conclusion of the forthcoming AGM and
are eligible for re-appointment.
17. Particulars of employees
The information required under Section 217(2A) of the Act and the Rules
made thereunder, is provided in annexure forming part of the report. In
terms of Section 219(1)(b)(iv) of the Act, the report and accounts are
being sent to the shareholders excluding the aforesaid annexure. Any
shareholder interested in obtaining copy of the same may write to the
18. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The particulars as prescribed under Section 217(1)(e) of the Act, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, are set out in an annexure to this report.
The Directors thank the Companys employees, customers, vendors,
investors and academic institutions for their support to the Company.
The Directors also thank the Government of various countries,
Government of India, State Governments in India and concerned
Government Departments/Agencies for their co-operation.
The Directors appreciate and value the contributions made by every
member of the TCS family globally.
On behalf of the Board of Directors,
Mumbai R. N. Tata
May 26, 2012 Chairman