Bottom of Form
Consolidated Balance Sheet of Tata Consultancy Services |
Mar '14 | Mar '13 | Mar '12 | Mar '11 | Mar '10 | ||||||
12 mths | 12 mths | 12 mths | 12 mths | 12 mths | ||||||
Sources Of Funds | ||||||||||
Total Share Capital | 195.87 | 295.72 | 295.72 | 295.72 | 295.72 | |||||
Equity Share Capital | 195.87 | 195.72 | 195.72 | 195.72 | 195.72 | |||||
Share Application Money | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Preference Share Capital | 0.00 | 100.00 | 100.00 | 100.00 | 100.00 | |||||
Init. Contribution Settler | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Preference Share Application Money | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Employee Stock Opiton | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Reserves | 48,998.89 | 38,350.01 | 29,283.51 | 24,209.09 | 18,171.00 | |||||
Revaluation Reserves | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Networth | 49,194.76 | 38,645.73 | 29,579.23 | 24,504.81 | 18,466.72 | |||||
Secured Loans | 159.79 | 209.48 | 112.61 | 34.16 | 31.21 | |||||
Unsecured Loans | 94.56 | 1.52 | 3.65 | 35.11 | 72.04 | |||||
Total Debt | 254.35 | 211.00 | 116.26 | 69.27 | 103.25 | |||||
Minority Interest | 707.99 | 695.31 | 558.77 | 458.17 | 361.71 | |||||
Policy Holders Funds | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Group Share in Joint Venture | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Total Liabilities | 50,157.10 | 39,552.04 | 30,254.26 | 25,032.25 | 18,931.68 | |||||
Mar '14 | Mar '13 | Mar '12 | Mar '11 | Mar '10 | ||||||
12 mths | 12 mths | 12 mths | 12 mths | 12 mths | ||||||
Application Of Funds | ||||||||||
Gross Block | 15,671.92 | 14,832.64 | 12,685.28 | 10,742.51 | 9,635.50 | |||||
Less: Accum. Depreciation | 6,127.59 | 5,004.63 | 4,023.22 | 3,263.42 | 2,897.47 | |||||
Net Block | 9,544.33 | 9,828.01 | 8,662.06 | 7,479.09 | 6,738.03 | |||||
Capital Work in Progress | 3,168.48 | 1,895.36 | 1,446.37 | 1,193.89 | 1,017.37 | |||||
Investments | 3,433.74 | 1,897.34 | 1,350.33 | 1,762.67 | 3,682.08 | |||||
Inventories | 15.21 | 21.15 | 17.77 | 22.82 | 17.79 | |||||
Sundry Debtors | 18,230.40 | 14,076.56 | 13,768.11 | 9,543.82 | 5,855.41 | |||||
Cash and Bank Balance | 14,441.84 | 6,769.16 | 6,003.47 | 4,700.85 | 648.67 | |||||
Total Current Assets | 32,687.45 | 20,866.87 | 19,789.35 | 14,267.49 | 6,521.87 | |||||
Loans and Advances | 18,303.78 | 17,779.64 | 10,146.38 | 7,977.90 | 5,364.95 | |||||
Fixed Deposits | 0.00 | 0.00 | 0.00 | 0.00 | 4,069.92 | |||||
Total CA, Loans & Advances | 50,991.23 | 38,646.51 | 29,935.73 | 22,245.39 | 15,956.74 | |||||
Deffered Credit | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Current Liabilities | 10,209.13 | 8,132.80 | 6,128.53 | 4,790.63 | 4,162.47 | |||||
Provisions | 6,771.55 | 4,582.38 | 5,011.70 | 2,858.16 | 4,300.07 | |||||
Total CL & Provisions | 16,980.68 | 12,715.18 | 11,140.23 | 7,648.79 | 8,462.54 | |||||
Net Current Assets | 34,010.55 | 25,931.33 | 18,795.50 | 14,596.60 | 7,494.20 | |||||
Minority Interest | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Group Share in Joint Venture | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Miscellaneous Expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Total Assets | 50,157.10 | 39,552.04 | 30,254.26 | 25,032.25 | 18,931.68 | |||||
Contingent Liabilities | 2,862.86 | 3,406.17 | 4,437.51 | 2,994.67 | 3,803.64 | |||||
Book Value (Rs) | 251.16 | 196.94 | 150.62 | 124.69 | 93.84 | |||||
Key Financial Ratios of Tata Consultancy Services |
Mar '14 | Mar '13 | Mar '12 | Mar '11 | Mar '10 | ||||||
Investment Valuation Ratios | ||||||||||
Face Value | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | |||||
Dividend Per Share | 32.00 | 22.00 | 25.00 | 14.00 | 20.00 | |||||
Operating Profit Per Share (Rs) | 109.94 | 73.09 | 58.17 | 44.78 | 34.06 | |||||
Net Operating Profit Per Share (Rs) | 330.18 | 247.42 | 198.54 | 149.58 | 117.74 | |||||
Free Reserves Per Share (Rs) | -- | -- | -- | -- | 75.24 | |||||
Bonus in Equity Capital | 79.59 | 79.65 | 79.65 | 79.65 | 79.65 | |||||
Profitability Ratios | ||||||||||
Operating Profit Margin(%) | 33.29 | 29.54 | 29.30 | 29.96 | 28.93 | |||||
Profit Before Interest And Tax Margin(%) | 30.17 | 26.65 | 25.49 | 27.67 | 26.62 | |||||
Gross Profit Margin(%) | 31.62 | 27.88 | 27.52 | 28.12 | 26.89 | |||||
Cash Profit Margin(%) | 28.84 | 26.82 | 29.10 | 27.21 | 26.44 | |||||
Adjusted Cash Margin(%) | 28.84 | 26.82 | 28.07 | 27.23 | 26.44 | |||||
Net Profit Margin(%) | 27.25 | 25.24 | 26.42 | 25.42 | 24.13 | |||||
Adjusted Net Profit Margin(%) | 27.25 | 25.24 | 26.15 | 25.44 | 24.13 | |||||
Return On Capital Employed(%) | 53.39 | 48.07 | 55.31 | 44.38 | 42.46 | |||||
Return On Net Worth(%) | 41.87 | 39.32 | 44.24 | 38.80 | 37.30 | |||||
Adjusted Return on Net Worth(%) | 41.87 | 39.32 | 44.24 | 38.80 | 37.75 | |||||
Return on Assets Excluding Revaluations | 224.90 | 165.86 | 126.49 | 99.53 | 76.72 | |||||
Return on Assets Including Revaluations | 224.90 | 165.86 | 126.49 | 99.53 | 76.72 | |||||
Return on Long Term Funds(%) | 53.39 | 48.19 | 53.63 | 44.45 | 42.46 | |||||
Liquidity And Solvency Ratios | ||||||||||
Current Ratio | 3.18 | 2.85 | 2.48 | 2.45 | 1.49 | |||||
Quick Ratio | 3.16 | 2.88 | 2.47 | 2.44 | 1.48 | |||||
Debt Equity Ratio | -- | 0.01 | 0.01 | 0.01 | 0.01 | |||||
Long Term Debt Equity Ratio | -- | 0.01 | 0.01 | 0.01 | 0.01 | |||||
Debt Coverage Ratios | ||||||||||
Interest Cover | 1,006.74 | 513.84 | 841.63 | 435.25 | 674.43 | |||||
Total Debt to Owners Fund | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 | |||||
Financial Charges Coverage Ratio | 1,052.90 | 540.06 | 857.98 | 462.68 | 723.63 | |||||
Financial Charges Coverage Ratio Post Tax | 836.35 | 444.80 | 712.23 | 406.19 | 639.14 | |||||
Management Efficiency Ratios | ||||||||||
Inventory Turnover Ratio | 7,546.43 | 7,638.19 | 9,386.18 | 5,451.71 | 3,398.94 | |||||
Debtors Turnover Ratio | 5.04 | 4.77 | 5.59 | 7.19 | 6.54 | |||||
Investments Turnover Ratio | 7,546.43 | 7,638.19 | 9,386.12 | 5,451.66 | 3,398.94 | |||||
Fixed Assets Turnover Ratio | 5.79 | 5.32 | 5.39 | 4.91 | 4.74 | |||||
Total Assets Turnover Ratio | 1.47 | 1.48 | 1.56 | 1.50 | 1.52 | |||||
Asset Turnover Ratio | 1.68 | 1.68 | 1.74 | 1.68 | 1.61 | |||||
Average Raw Material Holding | -- | -- | -- | -- | 72.97 | |||||
Average Finished Goods Held | -- | -- | -- | -- | 0.04 | |||||
Number of Days In Working Capital | 137.53 | 110.67 | 86.25 | 72.38 | 55.58 | |||||
Profit & Loss Account Ratios | ||||||||||
Material Cost Composition | -- | 0.05 | 0.03 | 0.06 | 0.10 | |||||
Imported Composition of Raw Materials Consumed | 78.95 | 74.42 | 78.43 | 80.35 | 78.67 | |||||
Selling Distribution Cost Composition | -- | -- | -- | -- | 0.03 | |||||
Expenses as Composition of Total Sales | 96.27 | 94.87 | 98.04 | 91.08 | 92.38 | |||||
Cash Flow Indicator Ratios | ||||||||||
Dividend Payout Ratio Net Profit | 33.97 | 33.72 | 44.66 | 36.24 | 69.88 | |||||
Dividend Payout Ratio Cash Profit | 32.09 | 31.73 | 42.02 | 33.84 | 64.47 | |||||
Earning Retention Ratio | 66.03 | 66.28 | 55.34 | 63.76 | 30.96 | |||||
Cash Earning Retention Ratio | 67.91 | 68.27 | 57.98 | 66.16 | 36.24 | |||||
AdjustedCash Flow Times | 0.00 | 0.01 | 0.01 | 0.00 | 0.01 | |||||
Mar '14 | Mar '13 | Mar '12 | Mar '11 | Mar '10 | ||||||
Earnings Per Share | 94.17 | 65.23 | 55.97 | 38.62 | 28.62 | |||||
Book Value | 224.90 | 165.86 | 126.49 | 99.53 | 76.72 | |||||
Accounting Policy | '14 |
1) CORPORATE INFORMATION Tata Consultancy Services Limited (referred to as TCS Limited or the Company) provide consulting-led integrated portfolio of information technology (IT) and IT-enabled services delivered through a network of multiple locations around the globe. The Companys full services portfolio consists of IT and Assurance Services, Business Intelligence and Performance Management, Business Process Services, Cloud Services, Connected Marketing Solutions, Consulting, Eco-sustainability Services, Engineering and Industrial Services, Enterprise Security and Risk Management, Enterprise Solutions, iON-Small and Medium Businesses, IT Infrastructure Services, Mobility Products and Services and Platform Solutions. As of March 31, 2014, Tata Sons Limited owned 73.69% of the Companys equity share capital and has the ability to control its operating and financial policies. The Companys registered office is in Mumbai and it has 64 subsidiaries across the globe. 2) SIGNIFICANT ACCOUNTING POLICIES a) Basis of preparation These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain financial instruments which are measured at fair value. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) (which continues to be applicable in terms of General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013) and other relevant provisions of the Companies Act,1956. Comparative figures do not include the figures of erstwhile TCS e-Serve Limited and the discontinued operations of e-Serve International Limited which is amalgamated with the Company effective April 1, 2013. Consequently, the comparative figures are not comparable with the figures for the year ended March 31, 2014. b) Use of estimates The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred, the useful lives of depreciable fixed assets and provisions for impairment. Future results could differ due to changes in these estimates and the difference between the actual results and the estimates are recognised in the period in which the results are known/materialise. c) Fixed Assets Fixed assets are stated at cost, less accumulated depreciation / amortisation. Costs include all expenses incurred to bring the asset to its present location and condition. Fixed assets exclude computers and other assets individually costing Rs. 50,000 or less which are not capitalised except when they are part of a larger capital investment programme. d) Depreciation / Amortisation Depreciation / amortisation on fixed assets, other than freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis: e) Leases Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis. f) Impairment At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognised as income in the statement of profit and loss. g) Investments Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising investments in mutual funds are stated at the lower of cost and fair value. h) Employee benefits (i) Post-employment benefit plans Contributions to defined contribution retirement benefit schemes are recognised as an expense when employees have rendered services entitling them to such benefits. For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, or amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme. i) Revenue recognition Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable. Revenues from the sale of equipment are recognised upon delivery, which is when title passes to the customer. Revenues from sale of software licences are recognised upon delivery. Revenues from maintenance contracts are recognised pro-rata over the period of the contract. In respect of Business Process Outsourcing (BPO) services, revenue on time and material and unit priced contracts is recognised as the related services are rendered, whereas revenue from fixed price contracts is recognised as per the proportionate completion method with contract cost determining the degree of completion. Revenues are reported net of discounts. Dividends are recorded when the right to receive payment is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable. j) Taxation Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled. Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify. Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to and intends to settle the asset and liability on a net basis. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws. k) Foreign currency transactions Income and expenses in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprises net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve. Premium or discount on foreign exchange forward, options and futures contracts are amortised and recognised in the statement of profit and loss over the period of the contract. Foreign exchange forward, options and future contracts outstanding at the balance sheet date, other than designated cash flow hedges, are stated at fair values and any gains or losses are recognised in the statement of profit and loss. l) Derivative instruments and hedge accounting The Company uses foreign exchange forward, options and future contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges. The use of hedging instruments is governed by the Companys policies approved by the Board of Directors, which provide written principles on the use of such financial derivatives consistent with the Companys risk management strategy. Hedging instruments are initially measured at fair value, and are remeasured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised directly in shareholders funds and the ineffective portion is recognised immediately in the statement of profit and loss. The Company separates the intrinsic value and time value of an option and designates as hedging instruments, only the fair value change in the intrinsic value of the option. The change in fair values of the time value of option, which was previously recognised immediately in profit or loss, is now accumulated in hedging reserve, a component of shareholders funds and is classified to profit or loss when the forecast transaction occurs. This change in accounting for time value of an option has resulted in a reduction in profit before tax of Rs. 4.76 crores for the year ended March 31, 2014. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the statement of profit and loss as they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Cumulative gain or loss on the hedging instrument recognised in shareholders funds is retained there and is classified to Statement of profit and loss when the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in shareholders funds is transferred to the statement of profit and loss for the period. m) Inventories Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at lower of cost and net realisable value. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads. n) Provisions, Contingent Liabilities and Contingent Assets A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements. o) Cash and cash equivalents The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. The Authorised Share Capital was increased to 420,05,00,000 equity shares of Rs. 1 each and 105,02,50,000 redeemable preference shares of Rs. 1 each pursuant to the amalgamation of two wholly-owned subsidiaries, Retail FullServe Limited and Computational Research Laboratories Limited vide Order dated March 22, 2013 and TCS e-Serve limited vide Order dated September 6, 2013 of the Honble High Court of Judicature at Bombay. * 100,00,00,000 Redeemable Preference Shares of Rs. 1 each , held by Tata Sons Limited were redeemed on March 28, 2014. Consequently, an amount of Rs. 100 crores has been transferred from the surplus in the statement of profit and loss to Capital redemption reserve on that date. The fixed cumulative dividend of 1 % per annum and the variable non cumulative dividend on the shares so redeemed will be paid consequent to the shareholders approval in a general meeting. (b) Rights, preferences and restrictions attached to shares Equity shares The Company has one class of equity shares having a par value of Rs. 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. Preference shares Preference shares carried 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 three years preceding the year of issue of the redeemable preference shares. (e) Equity shares allotted as fully paid up (during 5 years preceding March 31, 2014) include equity shares issued: (i) Pursuant to contract without payment being received in cash 15,06,983 equity shares issued to the shareholders of TCS e-Serve Limited in terms of the composite scheme of arrangement (Scheme) sanctioned by the High Court of Judicature at Bombay vide their Order dated September 6, 2013. (ii) Bonus shares The Company allotted 97,86,10,498 equity shares as fully paid up bonus shares by utilisation of Securities premium reserve on June 18, 2009 pursuant to a shareholders resolution passed by postal ballot on June 12, 2009. | |