Board of directors:

R N Tata (Chairman) S Ramadorai (Vice Chairman) N Chandrasekaran (CEO & Managing Director) Aman Mehta V Thyagarajan Prof. Clayton M Christensen Dr. Ron Sommer Laura M Cha S Mahalingam (CFO & Executive Director) Phiroz Vandrevala Dr. Vijay Kelkar Ishaat Hussain O. P. Bhatt Cyrus Mistry Company Secretary Suprakash Mukhopadhyay Statutory Auditors Deloitte Haskins & Sells IFRS Auditors Deloitte Haskins & Sells

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INTRODUCTION:
Tata Consultancy Services Ltd is an information technology (IT) company. The company offers a range of IT services, outsourcing and business solutions. They also offer IT infrastructure services, business process outsourcing services, engineering and industrial services, global consulting and asset leveraged solutions. Their segments include banking, financial services and insurance; manufacturing; retail and distribution, and telecom. The company is a part of Tata Group, one of India's most respected business conglomerates and most respected brands. They are headquartered in Mumbai. They are having 142 offices in 42 countries as well as 105 delivery centers in 20 countries. The company shares are listed on the National Stock Exchange and Bombay Stock Exchange of India. Tata Consultancy Services Ltd was incorporated in the year 1968. Tata Sons Ltd established the company as division to service their electronic data processing (EDP) requirements and provide management consulting services. In the year 1971, they started their first international assignment. The company pioneered the global delivery model for IT services with their first offshore client in 1974. In the year 1981, the company set up India's first IT R&D division, the Tata Research Design and Development Centre at Pune. In the year 1985, they set up their first client-dedicated offshore development center for Compaq (then Tandem). In the year 1989, they delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland. In the year 1997, the company opened their new corporate training facility at Trivandrum. In the year 1998, they started virtualization of business. In the year 1999, they got SEI-CMM Level 5 certification for their Qwest, HP, SEEPZ & Sholinganallur centres. Also, in the year 20000, they got SEI-CMM Level 5 certification for their Calcutta, Bangalore, Lucknow, Hyderabad, GEDC, Ambattur and Ahmedabad centres. In
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the year 2001, the company completed the acquisition of public sector unit, CMC Ltd. In the year 2002, they expanded their geography into new growth markets like China/ Uruguay. The company saw outsourcing opportunity in E-Commerce and related solutions and set up its EBusiness division with ten people. By 2004, E-Business was contributing half a billion USD to the company. During the year 2004-05, the company acquired WTI Advanced Technology Ltd and TCS Business Transformation Solutions Ltd (Previously, Phoenix Global Solutions (India) Ltd), subsequently these two companies became the subsidiaries of the company. In August 9, 2004, the company became a publicly listed company. During the year 2005-06, the company acquired three companies Comicrom S A, Chile, Financial Network Services (Holdings) Pty Ltd, Australia (FNS) and Swedish Indian IT Resources AB (SITAR). The company made strategic alliances with Diligenta Ltd for Life Insurance business. Also, they entered into a Joint Venture Agreement with the State Bank of India. The new company was formulated and named C-Edge Technologies Ltd (C-Edge) for providing advanced technology solutions and world-class domain consulting for the banking and financial services sector. During the year, the company ventured into a new area for an Indian IT Services Company. In April 2005, Tata Infotech Ltd with their three wholly owned subsidiaries, namely Airline Financial Support Services (India) Ltd, Aviation Software Development Consultancy India Ltd and TCS Business Transformation Solutions Ltd were amalgamated with the company. During the year 2006-07, the company in partnership with the Government of Madhya Pradesh formed a company, namely MP Online Ltd, for offering a wide range of computer enabled services in the State of Madhya Pradesh. The company through their wholly owned subsidiaries Tata Consultancy Services Asia Pacific Pte Ltd and Tata Consultancy Services Malaysia Sdn Bhd, subscribed to 100% share capital of PT Tata Consultancy Services, Indonesia, a company formed for providing consulting and IT related

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services in Indonesia Tata Consultancy Services Netherlands B V, a wholly owned subsidiary acquired 75% equity interest in Switzerland based TKS - Teknosoft S A, for a consideration of Rs. 368.06 crore. TCS FNS Pty Ltd, another subsidiary acquired 100% equity interest in an Australian based company, TCS Management Pty Ltd, for a total consideration of Rs. 15.75 crore. Also, TCS FNS Pty Ltd subscribed to 100% share capital of Financial Network Services Beijing Co Ltd to provide consulting and IT related services in China. The company, through their wholly owned subsidiaries Tata Consultancy Services BPO Chile S A and TCS Inversiones Chile Limitada, subscribed to 100 % share capital Tata solution Center S A, to provide BPO services in Ecuador. During the year 2007-08, the company opened a centre in Cincinnati, USA, and a large centre in India at Hyderabad and laid the foundation for a large centre in Pune. They launched a major brand building initiative in order to articulate and propagate its new brand positioning. Also, they signed a new multi-year contract with Chrysler LLC for providing a comprehensive portfolio of IT services. TKS Services S.A., Quartz Software Technology S.A. and Tata Consultancy Services Financial Solutions Limited merged with Tata Consultancy Services Switzerland Limited with effect from April 1, 2007. In May 25, 2007, the company through their wholly owned subsidiary, Tata Consultancy Services Do Brasil Desenvolvimento De Servicos Ltda, acquired 100% equity interest in a Brazil based Company, GT Participacoes S.A. Also, Tata Consultancy Services Do Brazil Desenvolvimento De Servicos Ltda and GT Participacoes S.A. have merged with Tata Consultancy Services Do Brazil Ltda with effect from July 1, 2007. In June 21, 2007, the company subscribed to 100% share capital of Tata Consultancy Services Morocco SARL AU, a company formed for providing a range of computer enabled services in Morocco. In July 13, 2007, the company through their wholly owned subsidiary, Tata America International Corporation, acquired 100% voting power in TCS

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Financial Management LLC. In October 23, 2007, the company subscribed to 60% of the share capital of Tata Consultancy Services (Africa) (Pty) Limited, a Company formed for providing IT services and investing in companies in South Africa. In January 24, 2008, the company sold their shareholding interest in their associate Conscripti (Pty) Ltd, for Rs. 3.83 crore. In March 2008, the company opened their North America Delivery Center called TCS Seven Hills Park.

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HISTORY:
1968 -2000

Tata Consultancy Services was founded in 1968. One of its first contracts was to provide punched card services to sister company TISCO (now Tata Steel). In the following years it worked on an Inter-Branch Reconciliation System (IBRS) for the Central Bank of India and provided bureau services to Unit Trust of India.

In 1975, TCS conducted its first campus interviews, held at IISc, Bangalore. The recruits comprised 12 Indian Institutes of Technology graduates and three IISc graduates, who became the first TCS employees to enter a formal graduate programme.

In 1979, TCS delivered an electronic depository and trading system called SECOM for the Swiss company SIS SegaInterSettle. TCS followed this up with System X for the Canadian Depository System and automating the Johannesburg Stock Exchange (JSE) TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired.

In 1981, TCS established India's first software research and development center, the Tata Research Development and Design Center (TRDDC) in Pune. In 1985 TCS established India's first client-dedicated offshore development center, set up for client Compaq (then Tandem).

In the early 1990s the Indian IT outsourcing industry grew rapidly due to the Y2K bug and the launch of a unified European currency, Euro. TCS created the factory model for Y2K conversion and developed software tools which automated the conversion process and enabled third-party

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developers and clients to make use of it. By 2004, E-Business was contributing half a billion dollars (US) to TCS.

2000 to present

On August 25, 2004 TCS became a publicly listed company,

In 2005 TCS became the first India-based IT services company to enter the bioinformatics market.

In 2006 TCS designed an ERP system for the Indian Railway Catering and Tourism Corporation.

In 2008 TCS undertook an internal restructuring exercise which aimed to increase the company's agility.

TCS entered the small and medium enterprises market for the first time in 2011, with cloudbased offerings.

In the 2011/12 fiscal year TCS achieved annual revenues of over U$10 billion for the first time. TCS signed a Rs 94-crore deal with the Karnataka government for six-year period to automate its treasury and finance department operations. Deutsche Bank has selected TCS as a strategic partner for their Production Management Transformation Initiative, within their Capital Markets Business Unit. TCS has got contract from Credit Union Australia. TCS has received a multiyear, multi-million dollar contract to provide application support, maintenance and development services to the gases company Air Liquide. On the Last Trading Day of Year 2011, TCS overtook RIL to be anointed as the country's most valued firm. On February 6, 2012, TCS signed

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a multi-year, multi-million euro contract with European car rental company Europcar for the deployment of IT services in France.

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OBJECTIVES OF THE STUDY:

To compare financial statement of 09-10 & 10-11. To study the common size balance sheet as on 31/03/10 To study common size balance sheet as on 31/03/11 Ratios and its Analysis

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Comparative Balance Sheet

Particulars 09-10 (Rs. In Crores) 10-11 (Rs. In Crores) Absolute Increase or Decrease Percentage Increase or Decrease %

SOURCES OF FUNDS 1.Shareholders Funds a)Share Capital Eq. share capital Pref. share capital b)Reserves & Surplus Securities Premium General Reserve P&L a/c Foreign Currency Translation Reserve Hedging Reserve Account Net Worth 2.Loan Funds a)Secured loans b)Unsecured loans 3.Deferred Tax Liabilities(Net) Total Funds Employed APPLICATION OF FUNDS 1.Net Fixed Assets a)Tangible Fixed Assets Freehold Land Leasehold Land Freehold Building Factory Building Leasehold Building Leasehold Improvements Plant & Machinery Computer Equipment Motor Cars Office Equipment Electrical Installation Furnitures & Fixtures b)Intangible Assets Intellectual Property Rights Rights Under Licensing Agreement c)Capital Work-in-Progress

195.72 100.00 1918.47 2426.14 10458.13 94.98 (76.82) 15116.62 29.25 6.49 40.10 15192.46

195.72 100.00 1918.47 3183.14 14069.20 101.61 11.35 19579.49 35.87 5.25 69.32 19689.93

NIL NIL NIL 757.00 3611.07 6.63 88.17 4462.87 6.62 (1.24) 29.22 4497.47

NIL NIL NIL 31.20 34.53 6.98 114.77 29.52 22.63 (19.11) 72.87 29.60

315.95 55.06 1139.88 0.44 3.93 191.39 0.17 464.31 8.05 339.12 235.41 6.81 NIL NIL 940.72 3701.24

315.95 81.48 1328.35 0.68 2.98 234.41 0.03 682.19 7.89 395.50 277.39 36.93 1.57 56.83 1345.37 4767.55

NIL 26.42 188.47 0.24 (0.95) 43.02 (0.14) 217.88 (0.16) 56.38 41.98 30.12 1.57 56.83 404.65 1066.31

NIL 47.98 16.53 54.55 (24.17) 22.48 (82.35) 46.93 (1.99) 16.63 17.83 442.29 NIL NIL 43.01 28.81
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2.Investments 3.Deferred Tax Assets (Net) 4.Working Capital a)Current Assets,Loans & Advances Interest Accrued On Investments Inventories Unbilled Revenues Sundry Debtors Cash/Bank Balance Loans & Advances b)Current Liabilities & Provisions Current Liabilities Provisions Working Capital Total Assets

7893.39 53.13

5795.49 52.03

(2097.90) (1.10)

(26.58) (2.07)

16.64 6.78 646.96 3332.30 3396.16 3385.11 10783.95

64.70 5.37 836.37 4806.67 5604.52 4110.41 15428.04

48.06 (1.41) 189.41 1474.37 2208.36 725.30 4644.09

288.82 (20.80) 29.28 44.24 65.03 21.43 43.06

(3312.64) (3926.61) (7239.35) 3544.70 15192.46

(3863.07) (2490.11) (6353.18) 9074.86 19689.93

550.43 (1436.50) (886.17) 5530.16 4497.47

16.62 (36.58) (12.24) 156.01 29.60

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Common Size Balance Sheet as on 31/03/10

Particulars SOURCES OF FUNDS 1.Shareholders Funds a)Share Capital Eq. share capital Pref. share capital b)Reserves & Surplus Securities Premium General Reserve P&L a/c Foreign Currency Translation Reserve Hedging Reserve Account Rs. (In crores) Rs. (in crores) % %

195.72 100.00 295.72 1918.47 2426.14 10458.13 94.98 (76.82) 14820.90 15116.62

1.29 0.69 1.95 12.63 15.97 68.84 0.63 (0.51) 97.55 99.50 0.19 0.04 35.74 40.10 15192.46 0.26 0.24 0.26 100.00

2.Loan Funds a)Secured loans b)Unsecured loans 3.Deferred Tax Liabilities(Net) Total Funds Employed APPLICATION OF FUNDS 1.Net Fixed Assets a)Tangible Fixed Assets Freehold Land Leasehold Land Freehold Building Factory Building Leasehold Building Leasehold Improvements Plant & Machinery Computer Equipment Motor Cars Office Equipment Electrical Installation Furnitures & Fixtures b)Intangible Assets Intellectual Property Rights Rights Under Licensing

29.25 6.49 40.10

315.95 55.06 1139.88 0.44 3.93 191.39 0.17 464.31 8.05 339.12 235.41 6.81 NIL

2.08 0.36 7.50 0.002 0.03 1.26 0.001 3.06 0.05 2.03 1.55 0.04 NIL

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Agreement c)Capital Work-in-Progress 2.Investments 3.Deferred Tax Assets (Net) 4.Working Capital a)Current Assets,Loans & Advances Interest Accrued On Investments Inventories Unbilled Revenues Sundry Debtors Cash/Bank Balance Loans & Advances b)Current Liabilities & Provisions Current Liabilities Provisions Working Capital Total Assets

NIL 940.72 3701.24 7893.24 53.13

NIL 6.19 24.36 51.96 0.35

16.64 6.78 646.96 3332.30 3396.16 3385.11 10783.95

0.11 0.04 4.26 21.93 22.35 22.28 70.98

3312.64 3926.61 (7239.35) 3544.70 15192.46

21.80 25.85 (47.65) 23.33 100.00

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Common Size Balance Sheet as on 31/03/11

Particulars SOURCES OF FUNDS 1.Shareholders Funds a)Share Capital Eq. share capital Pref. share capital b)Reserves & Surplus Securities Premium General Reserve P&L a/c Foreign Currency Translation Reserve Hedging Reserve Account Rs. (In crores) Rs. (in crores) % %

195.72 100.00 295.72 1918.47 3183.14 14069.20 101.61 11.35 19283.77 19579.49

0.99 0.51 1.50 9.74 16.17 71.45 0.52 0.06 97.94 99.44 0.18 0.03 41.12 69.32 19689.93 0.21 0.35 100.00

2.Loan Funds a)Secured loans b)Unsecured loans 3.Deferred Tax Liabilities(Net) Total Funds Employed APPLICATION OF FUNDS 1.Net Fixed Assets a)Tangible Fixed Assets Freehold Land Leasehold Land Freehold Building Factory Building Leasehold Building Leasehold Improvements Plant & Machinery Computer Equipment Motor Cars Office Equipment Electrical Installation Furnitures & Fixtures b)Intangible Assets Intellectual Property Rights Rights Under Licensing

35.87 5.25

315.95 81.48 1328.35 0.68 2.98 234.41 0.03 682.19 7.89 395.50 277.39 36.93 1.57

1.60 0.41 6.75 0.003 0.02 1.19 0.001 3.46 0.04 2.00 1.41 0.19 0.008

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Agreement c)Capital Work-in-Progress 2.Investments 3.Deferred Tax Assets (Net) 4.Working Capital a)Current Assets,Loans & Advances Interest Accrued On Investments Inventories Unbilled Revenues Sundry Debtors Cash/Bank Balance Loans & Advances b)Current Liabilities & Provisions Current Liabilities Provisions Working Capital Total Assets

56.83 1345.37 4767.55 5795.49 52.03

0.29 6.83 24.21 29.43 0.26

64.70 5.37 836.37 4806.67 5604.52 4110.41 15428.04

0.33 0.03 4.25 24.41 28.46 20.88 78.35

3863.07 2490.11 (6353.18) 9074.86 19689.93

19.62 12.47 (32.27) 46.10 100.00

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RATIOS AND ANALYSIS

CURRENT RATIO
An indication of a company's ability to meet short-termdebt obligations; the higher the ratio, the more liquid the company is. Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities, then that company is generally considered to have good short-term financial strength. If current liablities exceed current assets, then the company may have problems meeting its short-term obligations

Current Ratio = Current Assets Current Liabilities

(ideal ratio = 2:1)

09-10

Current ratio = 10783.95 7239.25 = 1.49:1

10-11

Current ratio = 15428.04 6353.18 = 2.43:1

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ANALYSIS

The current ratio has improved from 1.49:1 to 2.43:1 in the accounting year 10-11. This is Because the provisions in the current liabilities has declined. Hence current assets have exceeded current liabilities to such a great difference. Infact, the current ratio has become an ideal ratio in the year 10-11.

QUICK RATIO
An indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company.

The quick ratio is more conservative than the current ratio, a more well-known liquidity measure, because it excludes inventory from current assets. Inventory is excluded because some companies have difficulty turning their inventory into cash. In the event that shortterm obligations need to be paid off immediately, there are situations in which the current ratio would overestimate a company's short-term financial strength

Quick ratio = Quick assets Quick liabilities

(Ideal ratio = 1:1) Quick assets = current assets inventories-prepaid expenses Quick liabilities = current liabilities-bank overdraft

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09-10 Quick ratio = 10783.95-6.78 7239.25 = 10777.17 7239.25 = 1.49:1

10-11 Quick ratio = 15428.04-5.37 6353.18 = 15422.67 6353.18 = 2.43:1

ANALYSIS

The quick ratio has increased in the year 10-11. The quick ratio in 10-11 is not the ideal ratio at all since it is exceeding the limit of 1:1.

STOCK TO WORKING CAPITAL RATIO

Defined as the difference between current assets and current liabilities. There are some variations in how working capital is calculated. Variations include the treatment of shortterm debt. In addition, current assets may or may not include cash and cash equivalents, depending on the company. It is the amount of stock in comparison with the working capital amount.

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Stock to working capital ratio = stock Working capital

09-10 Stock to working capital ratio=6.78 3544.70 =0.0019:1

10-11 Stock to working capital ratio=5.37 9074.86 =0.0006:1

ANALYSIS

In the year 10-11 stock has declined whereas the net working capital has improved a lot because the interest accrued on investments, loans & advances & cash & bank balances have increased simultaneously

DEBTORS TO WORKING CAPITAL RATIO

Defined as the difference between current assets and current liabilities. There are some variations in how working capital is calculated. Variations include the treatment of shortterm debt. In addition, current assets may or may not include cash and cash equivalents,

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depending on the company. It is the amount of debtors in comparison with the working capital amount.

Debtors to working capital ratio=Debtors Working capital

09-10

Debtors to working capital ratio=3332.30 3544.70 =0.94:1

10-11 Debtors to working capital ratio=4806.67 9074.86 =0.53:1

ANALYSIS

Debtors to working capital ratio was better in the accounting year 09-10.

DEBT-EQUITY RATIO
A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.A high debt/equity ratio generally means that a company has been

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aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. If a lot of debt is used to finance increased operations (high debt to equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing.

The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2, while personal computer companies have a debt/equity of under 0.5.

Dept-equity ratio=debt Equity

(ceiling limit=2:1) Debt= secured loans + unsecured loans Equity= preference share capital + equity share capital + reserves & surplus Miscellaneous expenditure.

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09-10 Debt-equity ratio=29.25+6.49 100+195.72+14820.90 =35.74 15116.62 =0.002:1 10-11 Debt-equity ratio=35.87+5.25 100+195.72+19283.77 =41.12 19575.49 =0.002:1

ANALYSIS

The debt-equity ratio in 09-10 is 0.0024:1 and in 10-11 it is 0.0021:1. This shows that the debt-equity ratio has declined which is not a favourable aspect. The company must make it sure that the debt-equity ratio does not exceed the ceiling limit of 2:1 but at the same time it should also bt alleast 1:1.

PROPRIETORY RATIO
Proprietary ratio refers to a ratio which helps the creditors of the company in seeing that their capital or loans which the creditors have given to the company are safe. Proprietary ratio can be calculated as follows Proprietors funds/Total Assets

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In the above formula proprietary funds includes equity and preference share capital of the company and reserves and surplus of the company, while total assets of company includes both fixed assets and current assets of the company but it excludes fictitious assets which company may have. Proprietary ratio highlights the financial position of the company and therefore Proprietary ratio can be interpreted as good if it is high because a higher proprietary ratio would imply that company has enough capital to repay its creditors whenever any such demand is made by the creditors. A lower proprietary ratio would imply that company is not in a position to pay all of its creditors and therefore a low proprietary ratio is a cause of concern for the creditors of the company.

Proprietory ratio=proprietors funds Total assets

(also known as NET WORTH RATIO) Proprietors funds=same as equity Total assets=fixed assets + investments + current assets

09-10

Proprietory ratio=15116.62 3701.24+7893.39+10783.95 =15116.62 22378.58 =0.68:1

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10-11

Proprietory ratio=19579.49 4767.55+5795.49+15428.04 =19579.49 25991.08 =0.75:1

ANALYSIS

The net worth ratio / proprietory ratio has improved from 0.68 to 0.75 because the proprietors funds has increased from 15116.62 to 19579.49

RETURN ON CAPITAL EMPLOYED

A ratio that indicates the efficiency and profitability of a company's capital investments ROCE should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders' earnings.

A variation of this ratio is return on average capital employed (ROACE), which takes the average of opening and closing capital employed for the time period.

A measure of the returns that a company is realizing from its capital. Calculated as profit before interest and tax divided by the difference between total assets and current liabilities. The resulting ratio represents the efficiency with which capital is being utilized to generate

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revenue. Return on capital employed (ROCE) is a measure of the returns that a business is achieving from the capital employed, usually expressed in percentage terms. Capital employed equals a company's Equity plus Non-current liabilities (or Total Assets Current Liabilities), in other words all the long-term funds used by the company. ROCE indicates the efficiency and profitability of a company's capital investments.

ROCE should always be higher than the rate at which the company borrows otherwise any increase in borrowing will reduce shareholders' earnings, and vice versa; a good ROCE is one that is greater than the rate at which the company borrows. A more accurate variation of this ratio is return on average capital employed (ROACE), which takes the average of opening and closing capital employed for the time period.

One limitation of ROCE is the fact that it does not account for the depreciation and amortization of the capital employed. Because capital employed is in the denominator, a company with depreciated assets may find its ROCE increases without an actual increase in profit.

Return on capital employed=EBIT Capital employed

*100

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09-10

Return on capital employed=6979.92 *100 15192.46 =41.99%

10-11 Return on capital employed=8720.44 *100 19689.93 =44.29%

ANALYSIS

The return on capital employed has increased to 44.29%. this is mainly because of increase in capital employed. Since the amount which is to be invested in the business is increased EBIT has also increased

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RETURN ON PROPRIETORS FUNDS

It is the ratio of net profit to share holder's investment. It is the relationship between net profit (after interest and tax) and share holder's/proprietor's fund.

This ratio establishes the profitability from the share holders' point of view. The ratio is generally calculated in percentage. The two basic components of this ratio are net profits and shareholder's funds. Shareholder's funds include equity share capital, (preference share capital) and all reserves and surplus belonging to shareholders. Net profit means net income after payment of interest and income tax because those will be the only profits available for share holders This ratio is one of the most important ratios used for measuring the overall efficiency of a firm. As the primary objective of business is to maximize its earnings, this ratio indicates the extent to which this primary objective of businesses being achieved. This ratio is of great importance to the present and prospective shareholders as well as the management of the company. As the ratio reveals how well the resources of the firm are being used, higher the ratio, better are the results. The inter firm comparison of this ratio determines whether the investments in the firm are attractive or not as the investors would like to invest only where the return is higher.

Return on proprietors funds=NPAT *100 Proprietors funds

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09-10

Return on proprietors funds=5618.51 *100 15116.62 =37.17%

10-11

Return on proprietors funds=7569.99 *100 19579.49 =38.66%

Analysis

Return on proprietors funds has also increased from 37.17% to 38.66%. This is a favourable aspect for the company.

RETURN ON EQUITY SHAREHOLDERS FUNDS

Return on equity shareholders funds measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are generally considered good. Return on equity shareholders funds is equal to a fiscal year's net income (after preferred stock dividends but before common stock dividends) divided by total equity (excluding

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preferred shares), expressed as a percentage. As with many financial ratios, ROE is best used to compare companies in the same industry.

High ROE yields no immediate benefit. Since stock prices are most strongly determined by earnings per share (EPS), you will be paying twice as much (in Price/Book terms) for a 20% ROE company as for a 10% ROE company.

The benefit comes from the earnings reinvested in the company at a high ROE rate, which in turn gives the company a high growth rate. The benefit can also come as a dividend on common shares or as a combination of dividends and reinvestment in the company. ROE is presumably irrelevant if the earnings are not reinvested.

The sustainable growth model shows us that when firms pay dividends, earnings growth lowers. If the dividend payout is 20%, the growth expected will be only 80% of the ROE rate.

The growth rate will be lower if the earnings are used to buy back shares. If the shares are bought at a multiple of book value (say 3 times book), the incremental earnings returns will be only 'that fraction' of ROE (ROE/3).

New investments may not be as profitable as the existing business. Ask "what is the company doing with its earnings?"

Remember that ROE is calculated from the company's perspective, on the company as a whole. Since much financial manipulation is accomplished with new share issues and buyback, always recalculate on a 'per share' basis, i.e., earnings per share/book value per

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share.

Return on equity shareholders=NPAT-Pref.dividend *100 Funds Equity shareholders funds

09-10

Return on equity shareholders funds=5618.51-18.70 15016.62 =5599.81 15016.62 =37.29%

*100

*100

10-11

Return on equity shareholders funds=7569.99-12.10 19479.49 =7557.89 19479.49 =38.80%

*100

*100

ANALYSIS

Return on equity shareholders funds has shown just a slight improvement.

This improvement is mainly because of increased profit & loss a/c in reserves.

The equity share capital is constant in both the years.

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EARNINGS PER SHARE

Earnings per share is generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-toearnings valuation ratioAn important aspect of EPS that's often ignored is the capital that is required to generate the earnings (net income) in the calculation. Two companies could generate the same EPS number, but one could do so with less equity (investment) - that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company. Investors also need to be aware of earnings manipulation that will affect the quality of the earnings number. It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures.

The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. The figure can be calculated simply by dividing net income earned in a given reporting period (usually quarterly or annually) by the total number of shares outstanding during the same term. Because the number of shares outstanding can fluctuate, a weighted average is typically used. EPS is a carefully scrutinized metric that is often used as a barometer to gauge a company's profitability per unit of shareholder ownership. As such, earnings per share is a key driver of share prices. It is also used as the denominator in the frequently cited P/E ratio

EPS can be calculated via two different methods: basic and fully diluted. Fully diluted

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EPS -- which factors in the potentially dilutive effects of warrants, stock options, and securities convertible into common stock -- is generally viewed as a more accurate measure and is more commonly cited.

Earnings per share=NPAT-Pref.dividend No. of equity shares

09-10

EPS=5618.51-18.70 195.72 =5599.81 195.72 =28.61

10-11

EPS=7569.99-12.10 195.72 =7557.89 195.72 =38.61

ANALYSIS

The EPS has improved drastically from 28.61 to 38.61. it has been increased mainly because of increase in profits in the accounting year 10-11.

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CONCLUSION:
Since fundamental analysis is more suitable for long term investment, the investor should not consider the short term fluctuations for long term investments. Technical analysis explains the time of investments rather than the script of investment for the short run. So the investor should invest with target price for exist. Since there are list of factors that affect so rather than sticking the analysis firmly, the investor should act according to the fluctuation of the market.

Organizational Development interventions have been instrumental in terms of enhancing value to the customer & employee at Tata Consultancy Services. PROPEL as an organization wide intervention, encouraged sharing of ownership and empowerment to change, as also the sharing of success stories and best practices across the organization. Valuing of employees was institutionalized through establishing processes that enable and enhance individual performance, and lead to empowered project teams. Issue based mentoring was facilitated, with camps and confluences as enabling frameworks. While confluences invested in personal transformation for the employee, camps invested in improving the workspace. Through Scenario building, a collective transformation of dreams and concerns into response capabilities was envisaged. Continuous scanning of environment for opportunities and threats was proactively looked at, to collectively map the business domain of TCS. Goal alignment through cascading of Balanced Score Card concept could be achieved

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organization wide. There was continuous investment in learning, and an active sharing of knowledge with the aim to convert learning into action. Further, the focus shifted to adding knowledge through delighting every customer. The earlier tendency of self-sacrificing hard work was replaced by a shift of focus to teamwork and valuing of the employee. The OD interventions at TCShelped push self imposed boundaries and limitations through challenging organizational boundaries and limitations constantly. In a nutshell, the OD interventions at TCS have helped build a culture of fostering systems thinking & creating forums for dialogue, while encouraging leadership at all levels. For the organization at large, OD helped to reiterate the merits of valuing enquiry, expressing differences, and constantly generating new knowledge.

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BIBLIOGRAPHY:
www.investopedia.com en.wikipedia.org www.accounting4management.com www.scribd.com www.investorwords.com

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