Tata Consultancy Services

The Directors submit the Annual Report of the Company together with the
 audited statement of accounts for the year ended March 31, 2008.
 
 1.  Financial Results
 
 Financial Year
 
                                              2007-2008     2006-2007
                                           (Rs. in crore) (Rs. in crore)
 
 (i) Income from Sales and Services           18533.72       14939.97
 (ii) Other Income                              445.95         216.55
 (iii) Total Income                           18979.67       15156.52
 (iv) Operating Expenditure                   13513.61       10639.00
 (v) Profit before Interest, Depreciation 
 and Tax                                       5466.06        4517.52
 (vi) Interest                                    3.42           3.43
 (vii) Depreciation                             458.78         343.41
 (viii) Profit before Taxes                    5003.86        4170.68
 (ix) Provision for Taxes                       495.10         413.39
 (x) Net Profit for the Year                   4508.76        3757.29
 (xi) Balance Brought Forward from 
 Previous Year                                 4919.99        2833.30
 (xii) Amount Available for Appropriation      9428.75        6590.59
 Appropriations
 (a) Interim Dividends on Equity Shares         880.74         733.95
 (b) Proposed Final Dividend on Equity Shares   489.31         391.44
 (c) Proposed Dividend on Redeemable Preference 
     Shares                                       0.08
 (d) Tax on Dividends                           232.85         169.48
 (e) General Reserve                            450.88         375.73
 (f) Balance carried to Balance Sheet          7374.89        4919.99
 
                                              (1 crore = 10 million)
 
 2.  Issue of Redeemable Preference Shares and change in Authorised and
 Paid-up Share Capita!
 
 Pursuant to the resolution passed by the Members under a Postal Ballot,
 the results of which were announced on March 21, 2008, the Authorised
 Share Capital of the Company has increased from Rs. 120,00,00,000/- to
 Rs. 220,00,00,000/- by the creation of 100,00,00,000 Redeemable
 Preference Shares of Re.1/- each. Further, all the Redeemable
 Preference Shares aggregating Rs. 100,00,00,000/- have been allotted to
 the Promoters, Tata Sons Limited on March 28, 2008. This resulted in
 the paid-up share capital of the Company increasing from
 Rs.97,86,10,498/- to Rs. 197,86,10,498/- consisting of 97,86,10,498
 Equity Shares of Re.1/- each and 100,00,00,000 Redeemable Preference
 Shares of Re.1/- each.
 
 3.  Dividend
 
 Based on the Companys performance, the Directors are pleased to
 recommend, for approval of the Members a Final Dividend of Rs.5/- per
 share on 97,86,10,498 Equity Shares of Re.1/- each of the Company for
 the financial year 2007-08. The Final Dividend on the Equity Shares, if
 declared as above, would involve an outflow of Rs.489.31 crore towards
 dividend and Rs.83.18 crore towards dividend tax, resulting in a total
 outflow of Rs.572.49 crore. The total outflow on dividend on Equity
 Shares of the Company for the year 2007-08 would translate to 35.55% of
 the profits of the Company. A table on the dividends paid by the
 Company on Equity Shares during the year and during the previous year
 is given below:
 
                                                      (Rs. in Crore)
                                               2007-06
                                       No. of    Dividend    Dividend
                                       shares    per share   Amount
                                                   (Rs.)
 
 First Interim                   97,86,10,498      3.00      293.58
 Dividend
 Second Interim                         -do-       3.00      293.58
 Dividend
 Third Interim                          -do-       3.00      293.88
 Dividend
 sub-total                                                   880.74
 Final Dividend                  97,86,10,498      5.00      489.31         
 Total                                            14.00     1370.05
 
 Dividend     Total        No. of
 Tax          Outflow      shares
 
 49.89        343.47    48,93,05,249
 49.89        343.47    97,86,10,498
 49.89        343.47        -do-
 149.67      1030.41
 83.18        572.49    97,86,10,498
 232.11      1102.90
 
   2006-07
 Dividend      Total
 per share   Outflow
 (Rs.)        (Incl,
             Dividend
               Tax)
 
 3.00          167.38
 3.00          334.76
 3.00          334.76
               836.90
 4.00          457.97
              1294.87
 
 The Redeemable Preference Shares which have been allotted on March 28,
 2008 are entitled to pro-rata dividend for the year 2007-08, from the
 date of their allotment. The Redeemable Preference Shares 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 Re.0.07 per
 share on 100,00,00,000 Redeemable Preference Shares of Re.1/- each on a
 pro-rata basis for the Financial Year 2007-08.
 
 4.  Transfer to Reserves
 
 The Company proposes to transfer Rs.450.88 crore to the General Reserve
 out of the amount available for appropriations and an amount of Rs.
 7374,89 crore is proposed to be retained In the Profit and Loss
 Account.
 
 5.  Operating Results and Business
 
 The Company continued to see strong and profitable growth In the
 financial year 2007-08 across all markets driven by good performance In
 existing and new areas of business.
 
 For the year ended March 31, 2008, the Company earned a total income of
 Rs.18979.67 crore, an Increase of 25.22 % over previous years Rs.
 15156.52 crore. As per the Consolidated Accounts the total income was
 Rs.23349.45 crore, an increase of 23.45% over the previous years
 Rs.18914.26 crore.
 
 The net profit of the Company for the year increased to Rs.4508.76
 crore (23.76% of the total income) as compared to Rs.3757.29 crore
 (24.79% of total income) in the previous year. As per the Consolidated
 Accounts the net profit for the year was Rs.5026.02 crore (21.53% of
 total income) as compared to Rs.4212.63 crore (22.27% of total income)
 in 2006-07.
 
 The Company is among the leading global IT companies, and continues to
 retain its leadership position in the Indian IT Industry. It has
 continued to win new engagements and grow existing relationships in the
 traditional area of Application Development and Maintenance and is
 strengthening its presence in areas such as Consulting, Infrastructure
 Management Services, Asset Based Solutions, Engineering & Industrial
 Services, IT Enabled Services, Assurance and Business Intelligence
 Services. 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
 comprehensive and high value added services to its clientele.
 
 The Company has been growing at a substantial pace. With Revenues at
 Rs.18533.72 crore for the year ended March 31, 2008, TCS has, over the
 last four years as a listed company, recorded a CAGR of 23.8% .
 Considering the need to deepen relationships with customers in each
 Industry segment, to acquire new customers in markets where TCS is
 already a significant force and to expand in emerging markets, the
 Company has during the year, chalked out a new strategy and has
 realigned its operating structure. The revised organisational operating
 structure paves the way for more accountability and performance and
 there is a P&L responsibility cast on Heads of Operations. These
 measures will help the Company to retain its leading position amidst
 growing intense competition globally.
 
 The Companys Indian and global operations have shown growth. In India,
 the Company is also partnering with the Central and various State
 Governments in many e-governance initiatives, some of which have won
 accolades. The Company/its subsidiaries have won many high-value and
 strategic contracts in India and across the globe.
 
 The Companys continued investments in innovation and technology have
 enabled it to undertake a number of large, end-to-end, mission critical
 projects in diverse business areas and technology domains.
 
 The Company has 155 offices globally. In addition, the Company also has
 Delivery Centres in a number of countries. Major Delivery Centres
 outside India are in Hungary, Brazil, Chile, Uruguay and China. During
 the year, the Company has opened a Centre in Cincinnati, USA, and a
 large centre in India at Hyderabad and laid the foundation for a large
 centre in Pune. The Company services the needs of its global clients by
 linking the clients to one or more of these Delivery Centres. Through
 the establishment of Delivery Centres in different parts of the globe
 with the same high quality processes and by enabling customers to make
 use of a group of these Centres depending on their needs, the Company
 enables each of its customers to Experience certainty, which has been
 the theme of its branding exercise during the year. TCS has pioneered
 the Global Network Delivery Model™, which the customers see as a key
 differentiator.
 
 USA continued to be the largest market and contributed 50.77% to the
 Companys consolidated revenues while other established markets like
 the UK and Europe contributed 28.99% of the consolidated revenues. The
 Companys decision to invest in emerging markets like Latin America and
 Asia Pacific is yielding results with these markets contributing 4.40%
 and 5.20% respectively to the consolidated revenues of the Company.
 India remains a strategic market for the Company and continues to
 demonstrate growth in absolute terms.
 
 Diligenta Limited, the Companys subsidiary in the UK, which was set up
 in 2005-06 to focus on services in the life insurance and pensions BPO
 market in the UK, has expanded its services and has signed another
 contract of significant importance. Tata Consultancy Services (China)
 Co. Ltd, the strategic joint venture supported and promoted by National
 Development and Reforms Commission (NDRC) has also been acquiring new
 customers.  These customers are either multinationals with significant
 operations in China or large Chinese enterprises.  During the short
 period that TCS has been in operation in China, it has created a good
 track record of executing projects and developing a highly productive
 local work force. The synergy between the various subsidiaries of the
 Company and the competitive advantage in terms of niche products and
 services of the subsidiaries which have been acquired in the past
 couple of years are yielding results in making the TCS Group of
 Companies providers of end-to-end comprehensive solutions.
 
 Among the industry verticals, the banking, financial services and the
 insurance sector contributed 44.14% of consolidated revenues on the
 back of large product-based engagements in core banking and strong
 demand for the Companys capital markets and insurance products and
 solutions. The manufacturing sector, which contributed 9.82% of the
 Companys consolidated revenues, is being driven by demand for
 enterprise solutions like ERP and engineering services. Other
 significant verticals include life sciences & healthcare, retail,
 telecom and utilities. A significant number of existing customers are
 now engaging the Company for more than one service offering.
 
 6.  International Credit Rating
 
 The Company continues to have from Moodys Investors Services, an
 investment-grade issuer rating of A3 as well as an indicative foreign
 currency debt rating of Baal, with the ratings outlook as stable. The
 rating is not for any specific debt issuance by TCS.
 
 The Company has also been rated by Dun & Bradstreet at 5A1
 (Condition-Strong). The rating is assigned on the basis of tangible
 networth and a composite appraisal of the Company.
 
 Standard and Poors Ratings Services has assigned to the Company its
 BBB corporate credit rating with outlook as Positive.
 
 7.  Branding Initiative
 
 The Company launched a major brand building initiative during 2007-08
 in order to articulate and propagate its new brand positioning. The
 advertising campaign was launched across prestigious Indian and
 international magazines and newspapers, as well as online channels, in
 order to increase the profile of the Company in the global marketplace.
 
 The brand rollout was also carried out internally within the Company,
 to align the large and diversified workforce of the Company with the
 brand promise of Experience certainty.
 
 8.  Strategic Acquisitions and Alliances
 
 With the objective of moving towards its goal of being among the top IT
 companies in the world, the Company has made acquisitions/alliances
 during the past few years either directly or through its subsidiaries.
 Companies with track record of successful implementation of large and
 complex key technology projects, companies with niche products,
 services, domain knowledge and expertise have been acquired. Strategic
 alliances have also been entered into in India and abroad. The Company
 has effectively synergised the capabilities and expertise of the
 various subsidiaries, acquired entities and strategic alliances and is
 benefiting from the same. With these strategic acquisitions and
 alliances, the Company has been able to expand its product and services
 portfolio and is leveraging these combined strengths to consolidate its
 position in existing markets, to enter new geographies and new client
 verticals. TCS BaNCS Core Banking which has been positioned in the
 Leaders quadrant of Gartners Magic Quadrant for International Retail
 Core Banking, 2008 illustrates this point.
 
 The Company has, with these measures, succeeded in leveraging the
 complementary strengths of its partners in technology, software
 development, management, talent acquisition and training. These coupled
 with the world-class processes and practices of TCS as well as TCS
 experience in handling large and industrial scale technology projects,
 are expected to further strengthen TCS leading position in the
 international arena.
 
 9.  Human Resource Development
 
 TCS continues to be recognised for its good human resources practices.
 This year the Company won the Data Quest Best IT Employer of the Year
 award for the fourth consecutive time. TCS also received the RASBIC -
 Recruitment and Staffing Best in Class award for the second consecutive
 year. In this high-growth industry, TCS continues to be the employer of
 choice, marked by the lowest attrition rate of 12.6%.
 
 The Company has a diverse employee base and is truly global with over
 108,000 employees from 62 nationalities. This heterogeneous base is
 central to sustaining the Companys competitive edge. At the end of the
 year, non-Indian nationals working for the Company were 9.1% out of the
 total employee base. The percentage of women working for the Company
 increased to 28% from 26% last year. During the year, the Company added
 a net of 22,116 persons through recruitment. The Companys recruitment
 practice ensures that suitable candidates with merit are recruited and
 provided with the right opportunities. The Company received over 11.50
 lakh applications for employment during the year.
 
 The HR function in TCS has been re-aligned and closely integrated with
 business units in order to support operational agility, to be scalable
 for the Companys future growth, as well as to achieve higher employee
 satisfaction. Going forward, the new structure will support greater
 focus for strategic initiatives and also provide more leadership growth
 in the Company.
 
 In an organisation like TCS where Employees come from various
 nationalities and ethnicities, understanding other cultures is
 extremely important, as this translates into better understanding of
 the global clients. TCS pioneered the concept of a Global Village
 which is an event essentially providing employees with an opportunity
 to discover and learn about other cultures. The essence of Global
 Village is a display of cultures and traditions, country presentations,
 national costumes, dances, food, in short, everything defining a
 country.
 
 TCS encourages its employees to seek personal growth and a higher
 meaning to life, by providing platforms for creativity, expression and
 social initiatives like Music Club, Yoga Groups, Environment Awareness
 Sessions, Theatre Workshops, etc. The workplace harmony and bonding
 that such initiatives build have long-term beneficial effects for both
 the Company as well as its internal stakeholders.
 
 10.  Interface with Academia
 
 The pioneering effort of TCS in bridging the gap between the Academia
 and the Industry continues in full swing. This year, TCS conducted a
 course on Information System Auditing and Control for the MBA program
 of NT- Chennai.
 
 In October 2007, TCS organised the 9th Annual TCS Academic Interaction
 Meet where 65 academic leaders, including academicians from Uruguay,
 Brazil, China, Singapore and USA had invigorating interactions on
 various issues facing the industry and the academic world.
 
 11.  Quality Initiatives
 
 Reinforcing its commitment to high levels of quality, best-in-class
 service management and robust information security practices, the
 Company attained a number of milestones during the year.
 
 TCS was re-assessed, enterprise-wide, at maturity level 5 of the CMMl®
 v1.2 model. TCS was also recommended enterprise-wide for continuation
 of the ISO 9001:2000, ISO 27001:2005 and ISO 20000:2005 certification.
 The audit was a Surveillance Audit for ISO 9001:2000, ISO 27001:2005;
 ISO 20000-1:2005 and expansion audit for ISO 20000-1:2005 for BPO. TCS
 also continues to maintain the domain specific certifications AS9100,
 TL9000 and ISO 13485.
 
 An enterprise-wide appraisal endorses the premise of the integrated
 Quality Management System (iQMS) to give a consistent delivery
 experience to TCS customers across the globe. It re-iterates the
 customers expectations to experience a high degree of certainty in
 service delivery, as TCS stays focused on improving quality and
 processes constantly in an environment of rapid growth.
 
 Nineteen centres of TCS were also certified for ISO 14001.
 
 ISO 14001: 2004 provides a framework for TCS environmental
 initiatives, objectives and targets and helps in continually improving
 its environmental performance. TCS commitment to environment stems
 from the Tata Groups abiding concern for the environment and society.
 TCS being an IT organisation, its nature of operation has a low impact
 on the environment. TCS aims to provide a healthy work environment to
 employees and conduct an environment-friendly business.
 
 TL 9000 is the telecom industrys quality standard that expands the
 requirements of ISO 9001:20000. This certification provides an
 opportunity to compare the Companys performance with similar
 organisations, learn and share best practices in the telecom domain,
 besides strengthening relationships with customers on a competitive
 scale.
 
 AS 9100: Rev B is a Quality Management System designed specifically for
 the Aerospace industry and is based around ISO 9001:2000 standard and
 has been developed by the Society of Automotive Engineers (SAE).  AS
 9100: Rev B is being implemented across the international Aerospace
 industry, by the International Aerospace Quality Group (IAQG). IAQG has
 been established for the purpose of achieving significant improvements
 in quality and safety and reductions in cost, throughout the value
 stream within the Aerospace industry. It includes representation from
 Aerospace companies in the Americas, Asia Pacific and Europe.
 
 ISO 13485:2003 specifies requirements for a quality management system
 where an organisation needs to demonstrate its ability to provide
 medical devices and related services that consistently meet customer
 requirements and regulatory requirements applicable to medical devices
 and related services.
 
 The above certifications are testimony to TCS unstinting commitment to
 achieve the highest standards of quality and the expertise that the
 company brings to global clients. The cornerstone of these
 certifications is the in-house developed integrated Quality Management
 System (iQMS) - a vibrant, process-driven, people-oriented and
 customer-focussed quality management system which is continuously
 evolving to cater to the requirements of the Companys varied business
 offerings and today, is the backbone supporting the Global Network
 Delivery Model™.
 
 Business Excellence for the year 2007-08
 
 The year 2007-08 was driven by excellence which was evidenced in TCS
 winning the prestigious Business Excellence Sustaining award from the
 Tata Group on the JRD QV Awards Nite on July 29, 2007.
 
 Based on the feedback received from the TBEM Assessment for the year
 2007 several improvement initiatives were undertaken:
 
 1.  Lifeline: TCS continued with renewed vigour the customer
 satisfaction determination process using its Lifeline process and
 received a very good response of 70% on the web-enabled survey from the
 CXO level respondents of its clients.
 
 2.  Using External Agency: After carefully evaluating proposals from 11
 world-renowned global organisations, TCS has, selected an independent
 external agency to carry out the Customer Satisfaction Survey among its
 Key Customers on a global basis. This is expected to begin towards the
 end of April 08 and the results are expected by end of June 08.
 
 3.  Customer Experience Management: An integrated Customer Complaints
 and Appreciation Management process is being implemented through the
 Companys IPMS system. This is expected to be ready by the second
 quarter of FY 09.
 
 4.  Succession Planning: With a clear focus on sustaining business
 growth the need for leadership development was given renewed focus. In
 the new operating model of the Company all critical positions have been
 identified and leaders and deputy leaders have been named.
 
 5.  Corporate Sustenance: The CS policy has been formulated with clear
 themes and processes, and templates have been defined for global
 deployment. TCS released a report on its CS operations using GRI
 guidelines.
 
 6.  Enterprise Risk Management: To make ERM processes available
 globally, a section for ERM was created on KNOWMAX, the Companys
 global knowledge management system.
 
 7.  Knowledge Management: This year, TCS made the TATA Knowledge Chain
 a collaboration portal available to all its 1,00,000 associates on the
 knowledge management system.
 
 12.  Corporate Sustainability
 
 The focus of Corporate Sustainability (CS) in TCS is on health and
 education together with diversity, ethical global sourcing and concern
 for the environment. The differentiator for CS in TCS is the
 volunteering by TCSers through Maitree, while TCS endeavours to use
 its IT core competence to address societal problems.
 
 Maitree, an association of employees and their families across the
 globe, is a key vehicle of CS within the Company. Maitree also
 addresses TCS Internal stakeholders and engages TCSers and their
 families In a variety of meaningful activities including music, dance,
 trekking and sport. In addition to these activities, Maitree creates
 vehicles for community service and volunteering such as reaching out to
 the differently abled, AIDS education, and similar Initiatives. The
 Initiative at Waze Gram Panchayat near Panvel Is now four years old and
 Includes a childrens education programme with a science lab, a
 computer lab powered by renewable energy, womens literacy and
 healthcare and life skills programme, womens employment generation
 through sewing programme and a water harvesting programme.
 
 New Initiatives Include an Advanced Computer Training Centre for the
 visually Impaired that was sat up in early 2008 along with MN Banajee
 Industrial Home for the blind to provide training for the visually
 Impaired In soft skills, BPO specific skills and Infrastructure
 Services Training (Helpdesk).
 
 In addition to volunteering, some noteworthy on-going CS projects of
 TCS In India are:
 
 - Project mKrlshl, to help farmers access localised information and
 advice on agricultural Issues through graphic and voice formats In
 local languages on mobile phones Including capsules of TCS Adult
 Literacy programme.
 
 - Insigh T, a 72 hour IT and soft skills camp for students of Class 11
 (students out of high school studying their pre-university course).
 
 - Rural IT Quiz in collaboration with the Government of Karnataka which
 saw a record participation of 1.2 million students in 2007.
 
 - TCS IT Wiz, Indias largest IT Quiz for urban school students with
 more than 12,000 students participating across 11 cities.
 
 - The Computer-based Functional Literacy Programme which has served
 over 1,00,000 learners all over India with its offerings in eight
 Indian languages. The offering in the ninth language (Kannada) is
 expected  to be completed by end 2008.
 
 - Software for Childline, an organisation that helps children In
 distress. The software helps linking and monitoring of various
 Childline centres in India. The Improvised version of the software
 CHILDLINE V.2 Integrates new and more powerful functionalities and
 helps the system which receives more than 2 million calls a year.
 
 - The TCS-EW Teachers Award for teachers from across the country who
 have exhibited Innovative techniques, Inspired students and aroused
 their curiosity.
 
 TCS has been expanding its Corporate Sustainability Initiatives within
 the United States and has participated In projects along with
 charitable organisations like the United Way and The American Heart
 Association, and supports educational causes like First Book. During
 the past year, over 500 TCSers participated in the Walk of Hope In
 support of breast cancer awareness campaign over seven US cities.
 
 TCS has also very effectively participated in corporate sustenance
 programmes of its customers, finding common cause with the customers
 employees beyond work in areas of common social concerns. Recent
 instances include, amongst others, the cleaning up of the De Witt
 Clinton Park in New York, a blood donation drive with Morgan Stanley;
 support of the Leukemia and Lymphoma Society of Delaware Chapter with
 AIG.
 
 TCS involvement in corporate sustainability activities across the
 globe includes the initiative with the UN World Food Programs Walk of
 Life across Europe, the Downs Syndrome Association in Singapore and
 Australia and the Endeavor initiative in Uruguay for grooming of
 local entrepreneurs.
 
 TCS Environment policy and Green procurement policy demonstrate the
 Companys commitment towards mitigation of its direct and indirect
 environmental impacts. TCS is aggressively working towards zero waste
 disposal, and is executing technologies like vermiculture, bio-digestor
 plants to convert food and garden waste to manure/cooking gas. Nineteen
 delivery centres are ISO 14001:2004 certified by TUV NORD and three
 have cleared the adequacy audit. TCS is compliant with applicable and
 voluntarily adopted environment laws. Being an IT organisation TCS is
 conscious of its e-waste and ensures environment friendly disposal.
 
 TCS calculates its carbon footprint and takes steps to mitigate the
 same. The Company also has a Green Office 10-point plan. To reduce
 greenhouse emissions due to travel by employees to client locations for
 meetings, TCS promotes the use of video conferencing. TCS is constantly
 conducting major environment sensitisation drives amongst its
 employees. TCS is committed towards resource conservation and taking
 various initiatives to achieve reduction. Rain water harvesting, sewage
 treatment plants, etc., are being implemented efficiently.  All new TCS
 facilities are being designed and executed to be environment friendly.
 
 TCS is a member of the Per Cent Club of Business in the Community
 (BitC) by virtue of its social spends.
 
 TCS has also published its Corporate Sustainability Report 2007 based
 on GRI 3 Guidelines of the Global Reporting Initiative.
 
 13.  Awards/Recognition
 
 During the year, the Company received various awards and recognitions,
 significant amongst which are the following:
 
 - National Award for Excellence in Corporate Governance - 2007 from the
 Institute of Company Secretaries of India
 
 - Dataquest Best IT Employer for 2007
 
 - Most Admired Knowledge Enterprise (MAKE) Award 2007
 
 - Most Valued Partner - awarded by Ciscos Worldwide Sales Processes
 and Systems IT
 
 - BEST Award from The American Society for Training and Development,
 for the third time
 
 - Dataquest Best e-Governance Vendor Award
 
 - Silver Band in UKs BITC Corporate Responsibility Index
 
 - Three Business Partner Excellence Awards at IBM Partner World 2007
 
 - SAP Pinnacle Award in the Industry Solution Go-To-Market category
 
 - Excellence in Education Award from Life Office Management Association
 
 - Corporate Citizen of the Year - 2007 from the Rotary Club, Chennai
 
 - Securities Strategist Award
 
 - 2007 Eaton Premier Supplier Award in the Indirect Supplier for
 Information Technology Services category
 
 14.  Corporate Governance Report and Management Discussion and Analysis
 Statement
 
 A report on Corporate Governance is attached to this Report as also a
 Management Discussion and Analysis statement.
 
 15.  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 2007-08, the
 applicable Accounting Standards have been followed and there are no
 material departures;
 
 (ii) they have selected such accounting policies in consultation with
 the statutory auditors and applied them consistently and made
 judgements 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 Companies Act, 1956.
 They confirm that there are adequate systems and controls for
 safeguarding the assets of the Company and for preventing and detecting
 fraud and other irregularities;
 
 (iv) they have prepared the Annual Accounts on a going concern basis.
 
 16.  Subsidiary Companies and Consolidated Financial Statements
 
 The Company had 56 subsidiaries at the beginning of the year.  The
 following four subsidiaries were set up during the year:
 
 - Tata Consultancy Services Morocco SARL AU
 
 - Tata Consultancy Services (Africa) (PTY) Ltd
 
 - TCS Financial Management LLC (set up by Tata America International
 Corporation)
 
 - Tata Consultancy Services (South Africa) (PTY) Ltd (set up by Tata
 Consultancy Services (Africa) (PTY) Ltd) The following subsidiary was
 de-registered during the year:
 
 - IT Consulting Company (formerly known as Tata Consultancy Services
 France SAS)
 
 During the year, the Company acquired GT Participacoes S.A. which was
 merged with Tata Consultancy Services Do Brasil Desenvolvimento De
 Servicos Ltda.
 
 The following subsidiaries were merged during the year with other
 subsidiaries of the Company:
 
 - Swedish Indian IT Resources AB was merged with Tata Consultancy
 Services Sverige AB
 
 - Tata Consultancy Services Do Brasil Desenvolvimento De Servicos Ltda
 (formerly known as TCS Brasil S/C Ltda) was merged with Tata
 Consultancy Services Do Brasil S.A. which is now known as Tata
 Consultancy Services Do Brasil Ltda.
 
 - TKS Services S.A. was merged with Tata Consultancy Services
 Switzerland Ltd. (formerly known as TKS - Teknosoft S.A.)
 
 - Quartz Software Technology S.A. was merged with Tata Consultancy
 Services Switzerland Ltd.
 
 - Tata Consultancy Services Financial Solutions Ltd (formerly known as
 TKS - Banking Solutions S.A.) was merged with Tata Consultancy Services
 Switzerland Ltd.
 
 The following companies have ceased to be subsidiaries due to
 disinvestment:
 
 - Pentacrom S.A.
 
 - Pentacrom Servicios S.A.
 
 Consequently, the Company has 52 subsidiaries as on March 31, 2008.
 The names of the following subsidiaries were changed during the year:
 
 - Tata Consultancy Services Do Brasil S.A. was changed to Tata
 Consultancy Services Do Brasll Ltda,
 
 - Financial Network Services (Holdings) Pty, Limited was changed to TCS
 Financial Solutions Australia Holdings Pty Limited
 
 - Financial Network Services Pty, Limited was changed to TCS Financial
 Solutions Australia Pty Limited
 
 - TKS - Teknosoft 5,A. was changed to Tata Consultancy Services
 Switzerland Ltd.
 
 - TK5 Teknosoft (France) SAS was changed to Tata Consultancy Services
 France SAS.
 
 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 with the Stock Exchanges, a
 Consolidated Financial Statement of the Company and all its
 subsidiaries is attached. The Consolidated Financial Statement has been
 prepared In accordance with Accounting Standards 21, 23 and 27 Issued
 by The Institute of Chartered Accountants of India and show the
 financial resources, assets, liabilities, income, profits and other
 details of the Company, Its associate companies, its joint ventures and
 Its subsidiaries after elimination of minority Interest, as a single
 entry.
 
 The Company has been granted exemption for the year ended March 31,
 2008 by the Ministry of Corporate Affairs from attaching to its Balance
 Sheet, the individual Annual Reports of its subsidiary companies. As
 per the terms of the Exemption Letter, a statement containing brief
 financial details of the Companys subsidiaries for the year ended
 March 31, 2008 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 Corporate Office
 of the Company. The annual accounts of the said subsidiaries will also
 be available for inspection, as above, at the head offices of the
 respective subsidiary companies.
 
 The Company has not accepted any public deposits and, as such, no
 amount on account of principal or interest on public deposits was
 outstanding on the date of the Balance Sheet,
 
 During the year, Mr. N. Chandrasekaran and Mr. S. Mahallngam were
 appointed as Additional Directors and Whole-time Directors (Executive
 Directors) of the Company with effect from September 6, 2007 and Mr.
 Phiroz Vandrevala was appointed as Additional Director and Whole-time
 Director (Executive Director) of the Company with effect from September
 7, 2007. Mr. N. Chandrasekaran was also appointed as the Chief
 Operating Officer while Mr. S. Mahalingam continues to act as the Chief
 Financial Officer of the Company. The appointments are for a period of
 five years and are subject to the approval of the shareholders. As per
 the provisions of Section 260 of the Companies Act, 1956, these
 Directors hold office only up to the date of the forthcoming Annual
 General Meeting of the Company. The Company has received notices under
 Section 257 of the Act along with the requisite deposit, 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. N, Chandrasekaran, Mr. S. Mahalingam and Mr. Phiroz
 Vandrevala as Directors and for their appointment as Executive
 Directors of the Company have been incorporated in the Notice of the
 forthcoming Annual General Meeting along with brief details about them.
 
 Mr. S. Padmanabhan who was appointed as Additional Director and
 Whole-time Director (Executive Director) of the Company with effect
 from September 6, 2007 has moved over as Executive Director of another
 Tata Company and hence has ceased to be an Executive Director and a
 Director of the Company with effect from February 6, 2008.
 
 Mr. R.N. Tata and Mr. V. Thyagarajan, Directors, retire by rotation and
 being eligible have offered themselves for re-appointment.
 
 19.  Auditors
 
 M/s. S.B. Billimoria & Co., Chartered Accountants, who are the
 Statutory Auditors of the Company hold office, in accordance with the
 provisions of the Companies Act, 1956, upto the conclusion of the
 forthcoming Annual General Meeting. M/s. S.B. Billimoria & Co. have
 communicated that they are not seeking re-appointment at the ensuing
 Annual General Meeting. The Company has received a special notice from
 a Member of the Company, in terms of the provisions of the Companies
 Act, signifying the intention to propose the appointment of M/s.
 Deloitte Haskins & Sells, Chartered Accountants (DHS), as the Statutory
 Auditors of the Company from the conclusion of the ensuing Annual
 General Meeting until the conclusion of the next Annual General
 Meeting.  DHS have also expressed their willingness to act as Auditors
 of the Company, if appointed, and have confirmed their eligibility. In
 this regard, attention of the Members is invited to Item No. 6 of the
 Notice convening the forthcoming Annual General Meeting.
 
 20.  Particulars of Employees
 
 Information as required under Section 217(2A) of the Act, read with the
 Companies (Particulars of Employees) Rules, 1975, as amended, is given
 in an Annexure forming part of this report.
 
 21.  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.
 
 22.  Acknowledgements
 
 The Directors thank the Companys customers, vendors, investors,
 business associates, bankers and academic institutions for their
 support to the Company.
 
 The Directors also thank the Government of India and the Governments of
 various countries, the concerned State Governments and other Government
 Departments and Governmental Agencies for their co-operation.
 
 The Directors appreciate and value the contributions made by every
 member of the TCS family across the world.
 
                                   On behalf of the Board of Directors,
 
 Mumbai                                          R. N. Tata
 April 21, 2008                                   Chairman