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Analysis of Financial Statements of Tata Consultancy Services in 2020
2
Index
S.No Topic Page No.
1. Introduction 3
2. Profit and Loss Statement of the Company 4
3. Balance Sheet of the Company 6
4. Comparative Statement of Profit and Loss of the Company 9
5. Comparative Balance Sheet of the Company 12
6. Comparative Statement of Cash Flows of the Company 15
7. Analysis of Assets and Liabilities of the Company 18
8. Earnings per Share of the Company 19
9. Analysis of Share Holding Pattern of the Company 21
10. Analysis of Reserves and Surplus along with Dividend of the
Company
22
11. Financial Performance of the Company 23
12. Company’s Overall Performance 24
3
1. Introduction
Tata Consultancy Services Limited is an Indian multinational information technology
services and consulting company headquartered in Mumbai, Maharashtra, India. It is a
subsidiary of the Tata Group and operates in 149 locations across 46 countries. TCS is the
second largest Indian company by market capitalisation. Its headquarter is in Mumbai and
Mr. Rajesh Gopinathan is the present CEO. The current stock price of TCS as of 6th
September 2020 is Rs 2297.65.
Tata Consultancy Services (TCS) is a software and services provider in India. It is part of the
Tata Group, which oversees operations for over 100 companies in seven business sectors:
communications and information technology, engineering, materials, services, energy,
consumer products and chemicals.
We have tried to analyse the financial statements of TCS with the help of their Annual Report
2020.
We have shown the Balance Sheet, Profit and Loss Statement and Cash flow. The
comparative study has been shown on all the three above mentioned financial statements.
4
2. Tata Consultancy Services
Profit and Loss Statement for the year ended 31st
March, 2020
(₹ crore)
Particulars Note Year ended
March 31, 2020
Year ended
March 31, 2019
Revenue 12 156,949 146,463
Other income 13 4,592 4,311
TOTAL REVENUE 161,541 150,774
Expenses
Employee Benefit Expenses 14 85,952 78,246
Cost of equipment and software licenses 15(a) 1,905 2,270
Depreciation and amortisation expense 3,529 2,056
Other expenses 15(b) 26,983 26,441
Finance costs 16 924 198
TOTAL EXPENSES 119,293 109,211
PROFIT BEFORE TAX 42,248 41,563
Tax expense
Current tax 17 10,378 9,502
Deferred tax 17 (577) 499
TOTAL TAX EXPENSE 9,801 10,001
PROFIT FOR THE YEAR 32,447 31,562
OTHER COMPREHENSIVE INCOME (OCI)
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of defined employee
benefit plans
(429) (51)
Net change in fair values of
investments in equity shares carried at
fair value through OCI
(20) (1)
Income tax on items that will not be
reclassified subsequently to profit or loss
90 11
Items that will be reclassified subsequently
to profit or loss
5
(₹ crore)
Particulars Note Year ended
March 31, 2020
Year ended
March 31, 2019
Net change in fair values of
investments other than equity shares
carried at fair value through OCI
958 425
Net change in intrinsic value of
derivatives designated as cash flow
hedges
(94) 153
Net change in time value of
derivatives designated as cash flow
hedges
(52) 44
Exchange differences on translation of
financial statements of foreign
operations
326 (86)
Income tax on items that will be
reclassified subsequently to profit or loss
(315) (171)
TOTAL OTHER COMPREHENSIVE INCOME
/ (LOSSES
464 324
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
32,911 31,886
Profit for the year attributable to:
Shareholders of the Company 32,340 31,472
Non-controlling interests 107 90
32,447 31,562
Total comprehensive income for the year
attributable to:
Shareholders of the Company 32,764 31,787
Non-controlling interests 147 99
32,911 31,886
Earnings per equity share:- Basic and diluted (₹) 18 86.19 83.05
Weighted average number of equity shares 375,23,84,706 378,97,49,350
6
3. Tata Consultancy Services
Balance Sheet as at 31st
March, 2020
(₹ crore)
Particulars Note As at
March 31, 2020
As at
March 31, 2019
EQUITY AND LIABILITIES
Equity
Share capital 8(l) 375 375
Other equity 11 83,751 89,071
Equity attributable to:
Shareholders of the company 84,126 89,446
Non-controlling interests 623 453
Total equity 84,749 89,899
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities 6,906 44
Other financial liabilities 8(g) 291 287
Unearned and deferred revenue 697 844
Employee benefit obligations 14 417 330
Deferred tax liabilities (net) 17 779 1,042
Other liabilities 10(g) - 413
Total non-current liabilities 9,090 2,960
Current liabilities
Financial liabilities
Lease liabilities 1,268 -
Trade payables 6,740 6,292
Other financial liabilities 8(g) 6,100 4,903
Unearned and deferred revenue 2,915 2,392
Provisions 10(f) 293 239
Employee benefit obligations 14 2,749 2,356
Income tax liabilities (net) 3,712 2,667
Other liabilities 10(g) 3,283 3,235
7
(₹ crore)
Particulars Note As at
March 31, 2020
As at
March 31, 2019
Total current liabilities 27,060 22,084
TOTAL EQUITY AND LIABILITIES 120,899 114,943
ASSETS
Non-current assets
Property, plant and equipment 10(a) 10,941 10,411
Capital work-in-progress 906 963
Right-of-use assets 9 7,994 -
Goodwill 10(b) 1,710 1,700
Other intangible assets 10(c) 283 179
Financial assets
Investments 8(a) 216 239
Trade receivables 8(b) 74 95
Unbilled receivables 324 391
Loans receivables 8(e) 29 60
Other financial assets 8(f) 1,184 738
Income tax assets (net) 2,462 4,017
Deferred tax assets (net) 17 2,828 2,656
Other assets 10(d) 1,711 1,363
Total non-current assets 30,662 22,812
Current assets
Inventories 10(e) 5 10
Financial assets
Investments 8(a) 26,140 29,091
Trade receivables 8(b) 30,532 27,346
Unbilled receivables 5,732 5,157
Cash and cash equivalents 8(c) 8,646 7,224
Other balances with banks 8(d) 1,020 5,624
Loans receivables 8(e) 8,475 8,029
Other financial assets 8(f) 1,473 1,769
Income tax assets (net) 8 1,853
8
(₹ crore)
Particulars Note As at
March 31, 2020
As at
March 31, 2019
Other assets 10(d) 8,206 6,028
Total current assets 90,237 92,131
TOTAL ASSETS 120,899 114,943
9
4. Tata Consultancy Services
Comparative Statement of Profit and Loss for years ended 31st
March 2020 and 2019
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Revenue 156,949 146,463 10,486 7.159
Other income 4,592 4,311 281 6.518
TOTAL REVENUE 161,541 150,774 10,767 7.141
Expenses
Employee Benefit Expenses 85,952 78,246 7,706 9.848
Cost of equipment and software
licenses
1,905 2,270 (365) (16.079)
Depreciation and amortisation expense 3,529 2,056 1,473 71.644
Other expenses 26,983 26,441 542 2.0498
Finance costs 924 198 726 366.667
TOTAL EXPENSES 119,293 109,211 10,082 9.232
PROFIT BEFORE TAX 42,248 41,563 685 1.648
Tax expense
Current tax 10,378 9,502 876 9.219
Deferred tax (577) 499 (1,076)
TOTAL TAX EXPENSE 9,801 10,001 (200) (1.999)
PROFIT FOR THE YEAR 32,447 31,562 885 2.804
OTHER COMPREHENSIVE INCOME
(OCI)
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of defined
employee benefit plans
(429) (51) (378) 741.176
Net change in fair values of
investments in equity shares
carried at fair value through OCI
(20) (1) (19) 1900
10
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Income tax on items that will not be
reclassified subsequently to profit or
loss
90 11 79 718.182
Items that will be reclassified
subsequently to profit or loss
Net change in fair values of
investments other than equity
shares carried at fair value
through OCI
958 425 533 125.214
Net change in intrinsic value of
derivatives designated as cash
flow hedges
(94) 153 (247) (161.438)
Net change in time value of
derivatives designated as cash
flow hedges
(52) 44 (96) (218.182)
Exchange differences on
translation of financial
statements of foreign operations
326 (86) 412 (479.070)
Income tax on items that will be
reclassified subsequently to profit or
loss
(315) (171) (144) 84.211
TOTAL OTHER COMPREHENSIVE
INCOME / (LOSSES
464 324 140 43.210
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
32,911 31,886 1,025 3.215
Profit for the year attributable to:
Shareholders of the Company 32,340 31,472 868 2.758
Non-controlling interests 107 90 17 18.889
32,447 31,562 885 2.804
11
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Total comprehensive income for the year
attributable to:
Shareholders of the Company 32,764 31,787 997 3.074
Non-controlling interests 147 99 48 48.485
32,911 31,886 1,025 3.215
Earnings per equity share:- Basic and diluted
(₹)
86.19 83.05 3.14 3.781
Weighted average number of equity shares 375,23,84,
706
378,97,4
9,350
(3,73,64,
644)
(0.986)
12
5. Tata Consultancy Services
Comparative Balance Sheet as at ended 31st
March 2020 and 2019
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
EQUITY AND LIABILITIES
Equity
Share capital 375 375 0 0.000
Other equity 83,751 89,071 (5,320) (5.973)
Equity attributable to:
Shareholders of the company 84,126 89,446 (5,320) (5.948)
Non-controlling interests 623 453 170 37.528
Total equity 84,749 89,899 (5,150) (5.729)
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities 6,906 44 6,862 15595.455
Other financial liabilities 291 287 4 1.394
Unearned and deferred revenue 697 844 (147) (17.417)
Employee benefit obligations 417 330 87 26.364
Deferred tax liabilities (net) 779 1,042 (263) (25.240)
Other liabilities - 413 (413) (100.000)
Total non-current liabilities 9,090 2,960 6,130 207.095
Current liabilities
Financial liabilities
Lease liabilities 1,268 - 1,268
Trade payables 6,740 6,292 448 7.120
Other financial liabilities 6,100 4,903 1,197 24.414
Unearned and deferred revenue 2,915 2,392 523 21.865
Provisions 293 239 54 22.594
Employee benefit obligations 2,749 2,356 393 16.681
Income tax liabilities (net) 3,712 2,667 1,045 39.183
13
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Other liabilities 3,283 3,235 48 1.484
Total current liabilities 27,060 22,084 4,976 22.532
TOTAL EQUITY AND LIABILITIES 120,899 114,943 5,956 5.182
ASSETS
Non-current assets
Property, plant and equipment 10,941 10,411 530 5.091
Capital work-in-progress 906 963 (57) (5.919)
Right-of-use assets 7,994 - 7,994
Goodwill 1,710 1,700 10 0.588
Other intangible assets 283 179 104 58.101
Financial assets
Investments 216 239 (23) (9.623)
Trade receivables 74 95 (21) (22.105)
Unbilled receivables 324 391 (67) (17.136)
Loans receivables 29 60 (31) (51.667)
Other financial assets 1,184 738 446 60.434
Income tax assets (net) 2,462 4,017 (1,555) (38.710)
Deferred tax assets (net) 2,828 2,656 172 6.476
Other assets 1,711 1,363 348 25.532
Total non-current assets 30,662 22,812 7,850 34.412
Current assets
Inventories 5 10 (5) (50.000)
Financial assets
Investments 26,140 29,091 (2,951) (10.144)
Trade receivables 30,532 27,346 3,186 11.651
Unbilled receivables 5,732 5,157 575 11.150
Cash and cash equivalents 8,646 7,224 1,422 19.684
Other balances with banks 1,020 5,624 (4,604) (81.863)
Loans receivables 8,475 8,029 446 5.555
14
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Other financial assets 1,473 1,769 (296) (16.733)
Income tax assets (net) 8 1,853 (1,845) (99.568)
Other assets 8,206 6,028 2,178 36.131
Total current assets 90,237 92,131 (1,894) (2.056)
TOTAL ASSETS 120,899 114,943 5,956 5.182
15
6. Tata Consultancy Services
Comparative Statement of Cash Flows for the year ended 31st
March 2020 and 2019
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit for the year 32,447 31,562 885 2.804
Adjustments to reconcile profit and loss to
net cash provided by operating activities
Depreciation and amortisation expense 3,529 2,056 1473 71.644
Bad debts and advances written off, allowance
for doubtful trade receivables and advances
(net)
144 187
(43) (22.995)
Tax expense 9,801 10,001 (200) (2.000)
Net gain on lease modification (14) - (14)
Unrealised foreign exchange (gain) / loss (117) 7 (124) (1771.429)
Net gain on disposal of property, plant and
equipment
(46) (84)
38 (45.238)
Net gain on investments (214) (427) 213 (49.883)
Interest income (3,562) (2,762) (800) 28.965
Dividend income (10) (18) 8 (44.444)
Finance costs 924 198 726 366.667
Operating profit before working capital
changes
42,882 40,720
2162 5.309
Net change in:
Inventories 5 16 (11) (68.750)
Trade receivables (3,295) (2,883) (412) 14.291
Unbilled receivables (508) 1,286 (1794) (139.502)
Loans receivables and other financial assets (2) (499) 497 (99.599)
Other assets (3,492) (3,687) 195 (5.289)
Trade payables 446 1,496 (1050) (70.187)
Unearned and deferred revenue 375 679 (304) (44.772)
16
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Other financial liabilities 1,208 791 417 52.718
Other liabilities and provisions 596 632 (36) (5.696)
Cash generated from operations 38,215 38,551 (336) (0.872)
Taxes paid (net of refunds) (5,846) (9,958) 4112 (41.293)
Net cash generated from operating activities 32,369 28,593 3776 13.206
CASH FLOWS FROM
INVESTING ACTIVITIES
Bank deposits placed (7,663) (6,029) (1634) 27.102
Inter-corporate deposits placed (14,905) (13,724) (1181) 8.605
Purchase of investments* (80,002) (96,751) 16749 (17.311)
Payment for purchase of property, plant and
equipment
(2,538) (2,053)
(485) 23.624
Payment including advances for acquiring
right-of-use assets
(519) -
(519)
Payment for purchase of intangible assets (192) (178) (14) 7.865
Purchase of subsidiary, net of cash of NIL and
₹16 crore respectively
- (50)
50 (100.000)
Proceeds from bank deposits 11,965 2,715 9250 340.700
Proceeds from inter-corporate deposits 14,432 10,797 3635 33.667
Proceeds from disposal / redemption of
investments*
84,089 104,133
(20044) (19.248)
Proceeds from disposal of property, plant and
equipment
161 99
62 62.626
Interest received 3,729 2,619 1110 42.383
Dividend received 8 18 (10) (55.556)
Net cash generated from investing activities 8,565 1,596 6969 436.654
CASH FLOWS FROM
FINANCING ACTIVITIES
Buy-back of equity shares - (16,000) 16000 (100.000)
17
Particulars 2020
(₹ crore)
2019
(₹ crore)
Absolute
Change
(₹ crore)
Percentage
Change
(%)
Expenses for buy-back of equity shares - (45) 45 (100.000)
Short-term borrowings (net) - (181) 181 (100.000)
Dividend paid (including tax on dividend) (37,634) (11,424) (26210) 229.429
Dividend paid to non-controlling interests
(including tax on dividend)
(68) (48)
(20) 41.667
Purchase of non-controlling interests (227) - (227)
Repayment of lease liabilities (1,062) (13) (1049) 8069.231
Interest paid (924) (186) (738) 396.774
Net cash used in financing activities (39,915) (27,897) (12018) 43.080
Net change in cash and cash equivalents 1,019 2,292 (1273) (55.541)
Cash and cash equivalents at the beginning of
the year
7,224 4,883
2341 47.942
Exchange difference on translation of foreign
currency cash and cash equivalents
403 49
354 722.449
Cash and cash equivalents at the end of the
year (Refer note 8(c))
8,646 7,224
1422 19.684
18
7. Analysis of Assets and Liabilities of the Company
• The equity shares remained constant for both the years at 375 crores. The total equity for 2020
stood at ₹84,749 crores whereas it was ₹89,899 crores in 2019 indicating that the total funds
raised by equity and share capital had fallen which isn’t a good sign because it shows that the
company is losing money in the normal course of business. Also since it isn’t paying dividends
a decreased equity isn’t a positive sign.
• Employee benefit obligations went higher for 2020 at ₹417 crores than in 2019 when it was
₹330 crores.
• For 2020 there were other financial liabilities of ₹6100 crores, in 2019 it was ₹4903 crores. In
the previous year, ‘Others’ included a liability accrued towards exercise of put / call option for
acquisition by TCS of an additional 15% stake in its joint venture with Mitsubishi.
• There were no other liabilities (non -current) in 2020 whereas it was ₹413 crores in 2019.
• The value of property, plant and equipment had risen by ₹511 crores from 2019 to 2020
meaning that the value has gone up which is a positive sign.
• Goodwill remained constant for both the years.
• Other intangible assets have increased by ₹104 crores in 2020 because the cost of rights under
licensing and software had increased and accumulated amortisation of previous years kept
adding up.
• Investments, trade receivables and loan receivables (non- current) had fallen in 2020 which
isn’t a good sign but the overall value of non-current assets had increased considerably by
₹7850 crores which shows that TCS has become less liquid in terms of its assets This shows
poor performance in this area.
• Investments (current) includes ₹95 crore and ₹121 crore as at March 31, 2020 and 2019,
respectively, pertaining to trusts and TCS Foundation held for specified purposes.
• Total current assets have decreased by ₹1894 crores in 2020 meaning that the company is using
more of its cash. Significantly it also shows that the cash outflow has increased for the year
2020.
• Income tax asset or Deferred Tax asset has fallen by 99% from 2019 to 2020. This means that
in 2020 there was not much amount paid in advance as tax which could be realised by the
company later.
• Total assets of 2020 stand at ₹120,899 crores which is higher by ₹5956 crores as compared to
2019. But this increase, although positive, isn't an indicator that the company is performing
19
well. Though its assets have increased it is due to the non-current assets which shows that the
company is less liquid. However it also means that there are more assets for the company in
the long run which is a good thing for big companies like TCS. Overall one can say that the
company has not performed so well in terms of assets and liabilities. Its total assets have
increased and total liabilities have also increased for FY 2020.
• Total assets in 2020 - ₹120899 crores - There's a 5% increase in total assets from 2019
• Total current assets have decreased by 2%
• Total non-current assets have increased by 34%
• Total liabilities in 2020 - ₹36110 crores - There's a 44% increase when compared with the total
liabilities of 2019 which was ₹24,044 crores.
• Total current liabilities have increased by 22%
• Total non-current liabilities have increased by a massive 207%
• The current ratio that is current assets to current liabilities is roughly 3.6:1 which is considered
a safe and good mark. Thus even if the liabilities have increased the company is in a position
to cover up all its liabilities if the need be so.
8. Earnings per Share
• The Company’s objective for capital management is to maximise shareholder value, safeguard
business continuity and support the growth of the Company.
• The Company determines the capital requirement based on annual operating plans and long-
term and other strategic investment plans. The funding requirements are met through equity
and operating cash flows generated.
• For 2 consecutive years i.e. FY 2019 and FY 2020 the company had 460,05,00,000 equity
shares of ₹1 each amounting to a total of ₹405 crores.
• There were 105,02,50,000 preference shares of ₹1 each thus amounting to a total of ₹105
crores.
• Finally, TCS had Issued, Subscribed and Fully paid up 375,23,84,706 equity shares of ₹1 each
subjecting to a total of ₹375 crores approximately.
• The Company has one class of equity shares having a par value of ₹1 each. Each shareholder
is eligible for one vote per share held and carries a right to dividend.
• According to the CEO of TCS The Board has recommended a final dividend of Rs 6 for the
year, bringing the total dividend for the year to Rs 73 per share. This translates into Rs 31,895
crore returned to shareholders in FY 2020, which is 108.9% of the free cash flow.
20
• For FY 2020, based on the Company’s performance the Directors have declared interim
dividends of ₹27 per equity share and a special dividend of ₹ 40 per equity share.
• The Directors have also recommended a final dividend of ₹6 per equity share, taking the total
dividend to ₹73 per equity share.
• For FY 2019, the Company paid a total dividend of ₹30 per equity share. Further, the Company
bought back 76,190,476 equity shares at a price of ₹2,100 per equity share for an aggregate
consideration of ₹16,000 crore and also allotted 1,914,287,591 equity shares as fully paid-up
bonus shares in the ratio of 1:1.
• Basic earnings per share is computed by dividing profit or loss attributable to equity
shareholders of the Company by the weighted average number of equity shares outstanding
during the period. The Company did not have any potentially dilutive securities in any of the
years presented.
• Profit for the year attributed to shareholders in 2020 was 32,340 crores whereas it was ₹31,472
crores in 2019. Weighted average number of equity shares were ₹375 crores in 2020 making
the Earning per Share value as ₹86.19. For 2019 weighted average number was ₹378 crores.
Thus, the EPS for 2019 was ₹83.05. As there is a positive shift in EPS it indicates that the
company is performing well in the shareholder’s interests.
21
9. Analysis of Share Holding Pattern of the Company
• There are 893,446 accounts in total which hold equity shares in TCS and the total equity
holding amount for FY 2020 is ₹375 crores which is the same as the previous year.
• Out of the total holders, Promoters (Tata Sons) account for 72% of holding followed by
Mutual Funds and UTI category (LIC) at 2.6%.
• Banks, financial institutions, State and Central Government hold 42 lakh shares which is a
0.1% of the total shares.
• Shareholding is consolidated based on the Permanent Account Number (PAN) of the
shareholder.
• The highest shareholder in TCS company is Tata Sons Private Limited which owns 72% of the
equity shares by holding 27 crore shares followed by LIC India at 4.2% ownership.
• The Company’s shares are compulsorily traded in dematerialized form on NSE and BSE.
Equity shares of the Company representing 99.97 percent of the Company’s equity share
capital are dematerialized as on March 31, 2020.
• The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments in
the past and hence, as on March 31, 2020, the Company does not have any outstanding
GDRs/ADRs/Warrants or any convertible instruments.
• For the year 2019-20 the latest date of declaration for claiming unpaid dividend was March
10, 2020 which can be reclaimed till April 9, 2020.
22
10. Analysis of Reserves and Surplus along with Dividend of the Company
• One form of distribution of profits earned by the Company and is usually declared as an
amount per equity share held by the Shareholders. TCS has a policy of declaring quarterly
interim dividends and the final dividend is approved by the shareholders in the Annual
General Meeting. In addition, every second or third year, the accumulated surplus cash has
been returned to shareholders through a special dividend.
• For FY 2020, based on the Company’s performance, the Directors have declared interim
dividends of ₹27 per equity share and a special dividend of ₹40 per equity share amounting to
over ₹15,000 crore paid out to shareholders over and above the regular dividends. The
Directors have also recommended a final dividend of ₹6 per equity share, taking the total
dividend to ₹73 per equity share. This translates into ₹31,895 crore returned to shareholders
in FY 2020, which is 108.9% of the free cash flow.
• The final dividend on equity shares, if approved by the Members, would involve a cash
outflow of ₹2,251 crore. The total dividend on equity shares including dividend tax for FY
2020 would aggregate ₹31,895 crore, resulting in a dividend pay-out of 95.9 percent of the
unconsolidated profits of the Company.
• For FY 2019, the Company paid a total dividend of ₹30 per equity share. Further, the
Company bought back 76,190,476 equity shares at a price of ₹2,100 per equity share for an
aggregate consideration of ₹16,000 crore and also allotted 1,914,287,591 equity shares as
fully paid-up bonus shares in the ratio of 1:1. The total cash outflow for FY 2019 including
dividend, dividend tax and buy-back consideration amounted to ₹29,148 crore.
• Pursuant to Finance Act 2020, dividend income will be taxable in the hands of shareholders
w.e.f. April 1, 2020 and the Company is required to deduct tax at source from dividend paid
to shareholders at the prescribed rates.
23
11. Financial Performance of the Company
Paid up Capital (INR): 375 crore
Total Turnover (INR): 156,949 crore
Total profit after taxes (INR): 32,340 crore
• The Company was recognized as a ‘Benchmark Leader’, a first of its kind achievement in the
Tata Group as part of the Tata Business Excellence Model assessment. Three Industry
Solutions Unit achieved the ‘Industry Leader’ status while one of the units crossed over to the
‘Benchmark Leader’ band.
• On a consolidated basis, the revenue for FY 2020 was ₹156,949 crore, higher by 7.2 percent
over the previous year’s revenue of ₹146,463 crore. The profit after tax (PAT) attributable to
shareholders and non-controlling interests for FY 2020 and FY 2019 was ₹32,447 crore and
₹31,562 crore respectively. The PAT attributable to shareholders for FY 2020 was ₹32,340
crore registering a growth of 2.8 percent over the PAT of ₹31,472 crore for FY 2019.
• On an unconsolidated basis, the revenue for FY 2020 was ₹131,306 crore, higher by 6.6
percent over the previous year’s revenue of ₹123,170 crore in FY 2019. The PAT attributable
to shareholders for FY 2020 was ₹33,260 crore registering a growth of 10.6 percent over the
PAT of ₹30,065 crore for FY 2019.
• Best in class profitability, reduced cost of capital due to a more predictable and resilient
business, and high cash conversion on account of superior execution have resulted in a high
return on equity. All this and a shareholder-friendly capital allocation policy have boosted the
company’s relationship capital with shareholders.
• Growth and transformation spends gained priority over cost optimization spends in FY
2020.There was more focus on innovation and ecosystem play to deliver more fulfilling
customer journeys.
• Future readiness remained a key theme. Legacy estate modernization and cloud enablement
for greater agility and reduced cost of ownership continued to be significant drivers.
• Other key areas of spend included adoption of open banking, payments, insights-driven
customer experience, automation, and robo-advisory systems.
• On the compliance front, new standards like IFRS 17, FRTB, Definition of Default and
LIBOR transition drove spending.
24
• Establishment of a Covid-19 Emergency Response Apex committee at Enterprise level to
drive a holistic action plan and coordinate global efforts
• Deployment of TCS’ Secure Borderless Workspaces infrastructure enabling associates to
work from home and ensure business continuity. Digital communication channels and
collaboration platforms set up for them to stay connected with colleagues and customers.
12. Company’s Overall Performance

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Analysis of Financial Statements of Tata Consultancy Services in 2020

  • 1. Analysis of Financial Statements of Tata Consultancy Services in 2020
  • 2. 2 Index S.No Topic Page No. 1. Introduction 3 2. Profit and Loss Statement of the Company 4 3. Balance Sheet of the Company 6 4. Comparative Statement of Profit and Loss of the Company 9 5. Comparative Balance Sheet of the Company 12 6. Comparative Statement of Cash Flows of the Company 15 7. Analysis of Assets and Liabilities of the Company 18 8. Earnings per Share of the Company 19 9. Analysis of Share Holding Pattern of the Company 21 10. Analysis of Reserves and Surplus along with Dividend of the Company 22 11. Financial Performance of the Company 23 12. Company’s Overall Performance 24
  • 3. 3 1. Introduction Tata Consultancy Services Limited is an Indian multinational information technology services and consulting company headquartered in Mumbai, Maharashtra, India. It is a subsidiary of the Tata Group and operates in 149 locations across 46 countries. TCS is the second largest Indian company by market capitalisation. Its headquarter is in Mumbai and Mr. Rajesh Gopinathan is the present CEO. The current stock price of TCS as of 6th September 2020 is Rs 2297.65. Tata Consultancy Services (TCS) is a software and services provider in India. It is part of the Tata Group, which oversees operations for over 100 companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. We have tried to analyse the financial statements of TCS with the help of their Annual Report 2020. We have shown the Balance Sheet, Profit and Loss Statement and Cash flow. The comparative study has been shown on all the three above mentioned financial statements.
  • 4. 4 2. Tata Consultancy Services Profit and Loss Statement for the year ended 31st March, 2020 (₹ crore) Particulars Note Year ended March 31, 2020 Year ended March 31, 2019 Revenue 12 156,949 146,463 Other income 13 4,592 4,311 TOTAL REVENUE 161,541 150,774 Expenses Employee Benefit Expenses 14 85,952 78,246 Cost of equipment and software licenses 15(a) 1,905 2,270 Depreciation and amortisation expense 3,529 2,056 Other expenses 15(b) 26,983 26,441 Finance costs 16 924 198 TOTAL EXPENSES 119,293 109,211 PROFIT BEFORE TAX 42,248 41,563 Tax expense Current tax 17 10,378 9,502 Deferred tax 17 (577) 499 TOTAL TAX EXPENSE 9,801 10,001 PROFIT FOR THE YEAR 32,447 31,562 OTHER COMPREHENSIVE INCOME (OCI) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined employee benefit plans (429) (51) Net change in fair values of investments in equity shares carried at fair value through OCI (20) (1) Income tax on items that will not be reclassified subsequently to profit or loss 90 11 Items that will be reclassified subsequently to profit or loss
  • 5. 5 (₹ crore) Particulars Note Year ended March 31, 2020 Year ended March 31, 2019 Net change in fair values of investments other than equity shares carried at fair value through OCI 958 425 Net change in intrinsic value of derivatives designated as cash flow hedges (94) 153 Net change in time value of derivatives designated as cash flow hedges (52) 44 Exchange differences on translation of financial statements of foreign operations 326 (86) Income tax on items that will be reclassified subsequently to profit or loss (315) (171) TOTAL OTHER COMPREHENSIVE INCOME / (LOSSES 464 324 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 32,911 31,886 Profit for the year attributable to: Shareholders of the Company 32,340 31,472 Non-controlling interests 107 90 32,447 31,562 Total comprehensive income for the year attributable to: Shareholders of the Company 32,764 31,787 Non-controlling interests 147 99 32,911 31,886 Earnings per equity share:- Basic and diluted (₹) 18 86.19 83.05 Weighted average number of equity shares 375,23,84,706 378,97,49,350
  • 6. 6 3. Tata Consultancy Services Balance Sheet as at 31st March, 2020 (₹ crore) Particulars Note As at March 31, 2020 As at March 31, 2019 EQUITY AND LIABILITIES Equity Share capital 8(l) 375 375 Other equity 11 83,751 89,071 Equity attributable to: Shareholders of the company 84,126 89,446 Non-controlling interests 623 453 Total equity 84,749 89,899 Liabilities Non-current liabilities Financial liabilities Lease liabilities 6,906 44 Other financial liabilities 8(g) 291 287 Unearned and deferred revenue 697 844 Employee benefit obligations 14 417 330 Deferred tax liabilities (net) 17 779 1,042 Other liabilities 10(g) - 413 Total non-current liabilities 9,090 2,960 Current liabilities Financial liabilities Lease liabilities 1,268 - Trade payables 6,740 6,292 Other financial liabilities 8(g) 6,100 4,903 Unearned and deferred revenue 2,915 2,392 Provisions 10(f) 293 239 Employee benefit obligations 14 2,749 2,356 Income tax liabilities (net) 3,712 2,667 Other liabilities 10(g) 3,283 3,235
  • 7. 7 (₹ crore) Particulars Note As at March 31, 2020 As at March 31, 2019 Total current liabilities 27,060 22,084 TOTAL EQUITY AND LIABILITIES 120,899 114,943 ASSETS Non-current assets Property, plant and equipment 10(a) 10,941 10,411 Capital work-in-progress 906 963 Right-of-use assets 9 7,994 - Goodwill 10(b) 1,710 1,700 Other intangible assets 10(c) 283 179 Financial assets Investments 8(a) 216 239 Trade receivables 8(b) 74 95 Unbilled receivables 324 391 Loans receivables 8(e) 29 60 Other financial assets 8(f) 1,184 738 Income tax assets (net) 2,462 4,017 Deferred tax assets (net) 17 2,828 2,656 Other assets 10(d) 1,711 1,363 Total non-current assets 30,662 22,812 Current assets Inventories 10(e) 5 10 Financial assets Investments 8(a) 26,140 29,091 Trade receivables 8(b) 30,532 27,346 Unbilled receivables 5,732 5,157 Cash and cash equivalents 8(c) 8,646 7,224 Other balances with banks 8(d) 1,020 5,624 Loans receivables 8(e) 8,475 8,029 Other financial assets 8(f) 1,473 1,769 Income tax assets (net) 8 1,853
  • 8. 8 (₹ crore) Particulars Note As at March 31, 2020 As at March 31, 2019 Other assets 10(d) 8,206 6,028 Total current assets 90,237 92,131 TOTAL ASSETS 120,899 114,943
  • 9. 9 4. Tata Consultancy Services Comparative Statement of Profit and Loss for years ended 31st March 2020 and 2019 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Revenue 156,949 146,463 10,486 7.159 Other income 4,592 4,311 281 6.518 TOTAL REVENUE 161,541 150,774 10,767 7.141 Expenses Employee Benefit Expenses 85,952 78,246 7,706 9.848 Cost of equipment and software licenses 1,905 2,270 (365) (16.079) Depreciation and amortisation expense 3,529 2,056 1,473 71.644 Other expenses 26,983 26,441 542 2.0498 Finance costs 924 198 726 366.667 TOTAL EXPENSES 119,293 109,211 10,082 9.232 PROFIT BEFORE TAX 42,248 41,563 685 1.648 Tax expense Current tax 10,378 9,502 876 9.219 Deferred tax (577) 499 (1,076) TOTAL TAX EXPENSE 9,801 10,001 (200) (1.999) PROFIT FOR THE YEAR 32,447 31,562 885 2.804 OTHER COMPREHENSIVE INCOME (OCI) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined employee benefit plans (429) (51) (378) 741.176 Net change in fair values of investments in equity shares carried at fair value through OCI (20) (1) (19) 1900
  • 10. 10 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Income tax on items that will not be reclassified subsequently to profit or loss 90 11 79 718.182 Items that will be reclassified subsequently to profit or loss Net change in fair values of investments other than equity shares carried at fair value through OCI 958 425 533 125.214 Net change in intrinsic value of derivatives designated as cash flow hedges (94) 153 (247) (161.438) Net change in time value of derivatives designated as cash flow hedges (52) 44 (96) (218.182) Exchange differences on translation of financial statements of foreign operations 326 (86) 412 (479.070) Income tax on items that will be reclassified subsequently to profit or loss (315) (171) (144) 84.211 TOTAL OTHER COMPREHENSIVE INCOME / (LOSSES 464 324 140 43.210 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 32,911 31,886 1,025 3.215 Profit for the year attributable to: Shareholders of the Company 32,340 31,472 868 2.758 Non-controlling interests 107 90 17 18.889 32,447 31,562 885 2.804
  • 11. 11 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Total comprehensive income for the year attributable to: Shareholders of the Company 32,764 31,787 997 3.074 Non-controlling interests 147 99 48 48.485 32,911 31,886 1,025 3.215 Earnings per equity share:- Basic and diluted (₹) 86.19 83.05 3.14 3.781 Weighted average number of equity shares 375,23,84, 706 378,97,4 9,350 (3,73,64, 644) (0.986)
  • 12. 12 5. Tata Consultancy Services Comparative Balance Sheet as at ended 31st March 2020 and 2019 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) EQUITY AND LIABILITIES Equity Share capital 375 375 0 0.000 Other equity 83,751 89,071 (5,320) (5.973) Equity attributable to: Shareholders of the company 84,126 89,446 (5,320) (5.948) Non-controlling interests 623 453 170 37.528 Total equity 84,749 89,899 (5,150) (5.729) Liabilities Non-current liabilities Financial liabilities Lease liabilities 6,906 44 6,862 15595.455 Other financial liabilities 291 287 4 1.394 Unearned and deferred revenue 697 844 (147) (17.417) Employee benefit obligations 417 330 87 26.364 Deferred tax liabilities (net) 779 1,042 (263) (25.240) Other liabilities - 413 (413) (100.000) Total non-current liabilities 9,090 2,960 6,130 207.095 Current liabilities Financial liabilities Lease liabilities 1,268 - 1,268 Trade payables 6,740 6,292 448 7.120 Other financial liabilities 6,100 4,903 1,197 24.414 Unearned and deferred revenue 2,915 2,392 523 21.865 Provisions 293 239 54 22.594 Employee benefit obligations 2,749 2,356 393 16.681 Income tax liabilities (net) 3,712 2,667 1,045 39.183
  • 13. 13 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Other liabilities 3,283 3,235 48 1.484 Total current liabilities 27,060 22,084 4,976 22.532 TOTAL EQUITY AND LIABILITIES 120,899 114,943 5,956 5.182 ASSETS Non-current assets Property, plant and equipment 10,941 10,411 530 5.091 Capital work-in-progress 906 963 (57) (5.919) Right-of-use assets 7,994 - 7,994 Goodwill 1,710 1,700 10 0.588 Other intangible assets 283 179 104 58.101 Financial assets Investments 216 239 (23) (9.623) Trade receivables 74 95 (21) (22.105) Unbilled receivables 324 391 (67) (17.136) Loans receivables 29 60 (31) (51.667) Other financial assets 1,184 738 446 60.434 Income tax assets (net) 2,462 4,017 (1,555) (38.710) Deferred tax assets (net) 2,828 2,656 172 6.476 Other assets 1,711 1,363 348 25.532 Total non-current assets 30,662 22,812 7,850 34.412 Current assets Inventories 5 10 (5) (50.000) Financial assets Investments 26,140 29,091 (2,951) (10.144) Trade receivables 30,532 27,346 3,186 11.651 Unbilled receivables 5,732 5,157 575 11.150 Cash and cash equivalents 8,646 7,224 1,422 19.684 Other balances with banks 1,020 5,624 (4,604) (81.863) Loans receivables 8,475 8,029 446 5.555
  • 14. 14 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Other financial assets 1,473 1,769 (296) (16.733) Income tax assets (net) 8 1,853 (1,845) (99.568) Other assets 8,206 6,028 2,178 36.131 Total current assets 90,237 92,131 (1,894) (2.056) TOTAL ASSETS 120,899 114,943 5,956 5.182
  • 15. 15 6. Tata Consultancy Services Comparative Statement of Cash Flows for the year ended 31st March 2020 and 2019 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) CASH FLOWS FROM OPERATING ACTIVITIES Profit for the year 32,447 31,562 885 2.804 Adjustments to reconcile profit and loss to net cash provided by operating activities Depreciation and amortisation expense 3,529 2,056 1473 71.644 Bad debts and advances written off, allowance for doubtful trade receivables and advances (net) 144 187 (43) (22.995) Tax expense 9,801 10,001 (200) (2.000) Net gain on lease modification (14) - (14) Unrealised foreign exchange (gain) / loss (117) 7 (124) (1771.429) Net gain on disposal of property, plant and equipment (46) (84) 38 (45.238) Net gain on investments (214) (427) 213 (49.883) Interest income (3,562) (2,762) (800) 28.965 Dividend income (10) (18) 8 (44.444) Finance costs 924 198 726 366.667 Operating profit before working capital changes 42,882 40,720 2162 5.309 Net change in: Inventories 5 16 (11) (68.750) Trade receivables (3,295) (2,883) (412) 14.291 Unbilled receivables (508) 1,286 (1794) (139.502) Loans receivables and other financial assets (2) (499) 497 (99.599) Other assets (3,492) (3,687) 195 (5.289) Trade payables 446 1,496 (1050) (70.187) Unearned and deferred revenue 375 679 (304) (44.772)
  • 16. 16 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Other financial liabilities 1,208 791 417 52.718 Other liabilities and provisions 596 632 (36) (5.696) Cash generated from operations 38,215 38,551 (336) (0.872) Taxes paid (net of refunds) (5,846) (9,958) 4112 (41.293) Net cash generated from operating activities 32,369 28,593 3776 13.206 CASH FLOWS FROM INVESTING ACTIVITIES Bank deposits placed (7,663) (6,029) (1634) 27.102 Inter-corporate deposits placed (14,905) (13,724) (1181) 8.605 Purchase of investments* (80,002) (96,751) 16749 (17.311) Payment for purchase of property, plant and equipment (2,538) (2,053) (485) 23.624 Payment including advances for acquiring right-of-use assets (519) - (519) Payment for purchase of intangible assets (192) (178) (14) 7.865 Purchase of subsidiary, net of cash of NIL and ₹16 crore respectively - (50) 50 (100.000) Proceeds from bank deposits 11,965 2,715 9250 340.700 Proceeds from inter-corporate deposits 14,432 10,797 3635 33.667 Proceeds from disposal / redemption of investments* 84,089 104,133 (20044) (19.248) Proceeds from disposal of property, plant and equipment 161 99 62 62.626 Interest received 3,729 2,619 1110 42.383 Dividend received 8 18 (10) (55.556) Net cash generated from investing activities 8,565 1,596 6969 436.654 CASH FLOWS FROM FINANCING ACTIVITIES Buy-back of equity shares - (16,000) 16000 (100.000)
  • 17. 17 Particulars 2020 (₹ crore) 2019 (₹ crore) Absolute Change (₹ crore) Percentage Change (%) Expenses for buy-back of equity shares - (45) 45 (100.000) Short-term borrowings (net) - (181) 181 (100.000) Dividend paid (including tax on dividend) (37,634) (11,424) (26210) 229.429 Dividend paid to non-controlling interests (including tax on dividend) (68) (48) (20) 41.667 Purchase of non-controlling interests (227) - (227) Repayment of lease liabilities (1,062) (13) (1049) 8069.231 Interest paid (924) (186) (738) 396.774 Net cash used in financing activities (39,915) (27,897) (12018) 43.080 Net change in cash and cash equivalents 1,019 2,292 (1273) (55.541) Cash and cash equivalents at the beginning of the year 7,224 4,883 2341 47.942 Exchange difference on translation of foreign currency cash and cash equivalents 403 49 354 722.449 Cash and cash equivalents at the end of the year (Refer note 8(c)) 8,646 7,224 1422 19.684
  • 18. 18 7. Analysis of Assets and Liabilities of the Company • The equity shares remained constant for both the years at 375 crores. The total equity for 2020 stood at ₹84,749 crores whereas it was ₹89,899 crores in 2019 indicating that the total funds raised by equity and share capital had fallen which isn’t a good sign because it shows that the company is losing money in the normal course of business. Also since it isn’t paying dividends a decreased equity isn’t a positive sign. • Employee benefit obligations went higher for 2020 at ₹417 crores than in 2019 when it was ₹330 crores. • For 2020 there were other financial liabilities of ₹6100 crores, in 2019 it was ₹4903 crores. In the previous year, ‘Others’ included a liability accrued towards exercise of put / call option for acquisition by TCS of an additional 15% stake in its joint venture with Mitsubishi. • There were no other liabilities (non -current) in 2020 whereas it was ₹413 crores in 2019. • The value of property, plant and equipment had risen by ₹511 crores from 2019 to 2020 meaning that the value has gone up which is a positive sign. • Goodwill remained constant for both the years. • Other intangible assets have increased by ₹104 crores in 2020 because the cost of rights under licensing and software had increased and accumulated amortisation of previous years kept adding up. • Investments, trade receivables and loan receivables (non- current) had fallen in 2020 which isn’t a good sign but the overall value of non-current assets had increased considerably by ₹7850 crores which shows that TCS has become less liquid in terms of its assets This shows poor performance in this area. • Investments (current) includes ₹95 crore and ₹121 crore as at March 31, 2020 and 2019, respectively, pertaining to trusts and TCS Foundation held for specified purposes. • Total current assets have decreased by ₹1894 crores in 2020 meaning that the company is using more of its cash. Significantly it also shows that the cash outflow has increased for the year 2020. • Income tax asset or Deferred Tax asset has fallen by 99% from 2019 to 2020. This means that in 2020 there was not much amount paid in advance as tax which could be realised by the company later. • Total assets of 2020 stand at ₹120,899 crores which is higher by ₹5956 crores as compared to 2019. But this increase, although positive, isn't an indicator that the company is performing
  • 19. 19 well. Though its assets have increased it is due to the non-current assets which shows that the company is less liquid. However it also means that there are more assets for the company in the long run which is a good thing for big companies like TCS. Overall one can say that the company has not performed so well in terms of assets and liabilities. Its total assets have increased and total liabilities have also increased for FY 2020. • Total assets in 2020 - ₹120899 crores - There's a 5% increase in total assets from 2019 • Total current assets have decreased by 2% • Total non-current assets have increased by 34% • Total liabilities in 2020 - ₹36110 crores - There's a 44% increase when compared with the total liabilities of 2019 which was ₹24,044 crores. • Total current liabilities have increased by 22% • Total non-current liabilities have increased by a massive 207% • The current ratio that is current assets to current liabilities is roughly 3.6:1 which is considered a safe and good mark. Thus even if the liabilities have increased the company is in a position to cover up all its liabilities if the need be so. 8. Earnings per Share • The Company’s objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. • The Company determines the capital requirement based on annual operating plans and long- term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. • For 2 consecutive years i.e. FY 2019 and FY 2020 the company had 460,05,00,000 equity shares of ₹1 each amounting to a total of ₹405 crores. • There were 105,02,50,000 preference shares of ₹1 each thus amounting to a total of ₹105 crores. • Finally, TCS had Issued, Subscribed and Fully paid up 375,23,84,706 equity shares of ₹1 each subjecting to a total of ₹375 crores approximately. • The Company has one class of equity shares having a par value of ₹1 each. Each shareholder is eligible for one vote per share held and carries a right to dividend. • According to the CEO of TCS The Board has recommended a final dividend of Rs 6 for the year, bringing the total dividend for the year to Rs 73 per share. This translates into Rs 31,895 crore returned to shareholders in FY 2020, which is 108.9% of the free cash flow.
  • 20. 20 • For FY 2020, based on the Company’s performance the Directors have declared interim dividends of ₹27 per equity share and a special dividend of ₹ 40 per equity share. • The Directors have also recommended a final dividend of ₹6 per equity share, taking the total dividend to ₹73 per equity share. • For FY 2019, the Company paid a total dividend of ₹30 per equity share. Further, the Company bought back 76,190,476 equity shares at a price of ₹2,100 per equity share for an aggregate consideration of ₹16,000 crore and also allotted 1,914,287,591 equity shares as fully paid-up bonus shares in the ratio of 1:1. • Basic earnings per share is computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The Company did not have any potentially dilutive securities in any of the years presented. • Profit for the year attributed to shareholders in 2020 was 32,340 crores whereas it was ₹31,472 crores in 2019. Weighted average number of equity shares were ₹375 crores in 2020 making the Earning per Share value as ₹86.19. For 2019 weighted average number was ₹378 crores. Thus, the EPS for 2019 was ₹83.05. As there is a positive shift in EPS it indicates that the company is performing well in the shareholder’s interests.
  • 21. 21 9. Analysis of Share Holding Pattern of the Company • There are 893,446 accounts in total which hold equity shares in TCS and the total equity holding amount for FY 2020 is ₹375 crores which is the same as the previous year. • Out of the total holders, Promoters (Tata Sons) account for 72% of holding followed by Mutual Funds and UTI category (LIC) at 2.6%. • Banks, financial institutions, State and Central Government hold 42 lakh shares which is a 0.1% of the total shares. • Shareholding is consolidated based on the Permanent Account Number (PAN) of the shareholder. • The highest shareholder in TCS company is Tata Sons Private Limited which owns 72% of the equity shares by holding 27 crore shares followed by LIC India at 4.2% ownership. • The Company’s shares are compulsorily traded in dematerialized form on NSE and BSE. Equity shares of the Company representing 99.97 percent of the Company’s equity share capital are dematerialized as on March 31, 2020. • The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments in the past and hence, as on March 31, 2020, the Company does not have any outstanding GDRs/ADRs/Warrants or any convertible instruments. • For the year 2019-20 the latest date of declaration for claiming unpaid dividend was March 10, 2020 which can be reclaimed till April 9, 2020.
  • 22. 22 10. Analysis of Reserves and Surplus along with Dividend of the Company • One form of distribution of profits earned by the Company and is usually declared as an amount per equity share held by the Shareholders. TCS has a policy of declaring quarterly interim dividends and the final dividend is approved by the shareholders in the Annual General Meeting. In addition, every second or third year, the accumulated surplus cash has been returned to shareholders through a special dividend. • For FY 2020, based on the Company’s performance, the Directors have declared interim dividends of ₹27 per equity share and a special dividend of ₹40 per equity share amounting to over ₹15,000 crore paid out to shareholders over and above the regular dividends. The Directors have also recommended a final dividend of ₹6 per equity share, taking the total dividend to ₹73 per equity share. This translates into ₹31,895 crore returned to shareholders in FY 2020, which is 108.9% of the free cash flow. • The final dividend on equity shares, if approved by the Members, would involve a cash outflow of ₹2,251 crore. The total dividend on equity shares including dividend tax for FY 2020 would aggregate ₹31,895 crore, resulting in a dividend pay-out of 95.9 percent of the unconsolidated profits of the Company. • For FY 2019, the Company paid a total dividend of ₹30 per equity share. Further, the Company bought back 76,190,476 equity shares at a price of ₹2,100 per equity share for an aggregate consideration of ₹16,000 crore and also allotted 1,914,287,591 equity shares as fully paid-up bonus shares in the ratio of 1:1. The total cash outflow for FY 2019 including dividend, dividend tax and buy-back consideration amounted to ₹29,148 crore. • Pursuant to Finance Act 2020, dividend income will be taxable in the hands of shareholders w.e.f. April 1, 2020 and the Company is required to deduct tax at source from dividend paid to shareholders at the prescribed rates.
  • 23. 23 11. Financial Performance of the Company Paid up Capital (INR): 375 crore Total Turnover (INR): 156,949 crore Total profit after taxes (INR): 32,340 crore • The Company was recognized as a ‘Benchmark Leader’, a first of its kind achievement in the Tata Group as part of the Tata Business Excellence Model assessment. Three Industry Solutions Unit achieved the ‘Industry Leader’ status while one of the units crossed over to the ‘Benchmark Leader’ band. • On a consolidated basis, the revenue for FY 2020 was ₹156,949 crore, higher by 7.2 percent over the previous year’s revenue of ₹146,463 crore. The profit after tax (PAT) attributable to shareholders and non-controlling interests for FY 2020 and FY 2019 was ₹32,447 crore and ₹31,562 crore respectively. The PAT attributable to shareholders for FY 2020 was ₹32,340 crore registering a growth of 2.8 percent over the PAT of ₹31,472 crore for FY 2019. • On an unconsolidated basis, the revenue for FY 2020 was ₹131,306 crore, higher by 6.6 percent over the previous year’s revenue of ₹123,170 crore in FY 2019. The PAT attributable to shareholders for FY 2020 was ₹33,260 crore registering a growth of 10.6 percent over the PAT of ₹30,065 crore for FY 2019. • Best in class profitability, reduced cost of capital due to a more predictable and resilient business, and high cash conversion on account of superior execution have resulted in a high return on equity. All this and a shareholder-friendly capital allocation policy have boosted the company’s relationship capital with shareholders. • Growth and transformation spends gained priority over cost optimization spends in FY 2020.There was more focus on innovation and ecosystem play to deliver more fulfilling customer journeys. • Future readiness remained a key theme. Legacy estate modernization and cloud enablement for greater agility and reduced cost of ownership continued to be significant drivers. • Other key areas of spend included adoption of open banking, payments, insights-driven customer experience, automation, and robo-advisory systems. • On the compliance front, new standards like IFRS 17, FRTB, Definition of Default and LIBOR transition drove spending.
  • 24. 24 • Establishment of a Covid-19 Emergency Response Apex committee at Enterprise level to drive a holistic action plan and coordinate global efforts • Deployment of TCS’ Secure Borderless Workspaces infrastructure enabling associates to work from home and ensure business continuity. Digital communication channels and collaboration platforms set up for them to stay connected with colleagues and customers. 12. Company’s Overall Performance