FA
FA
FA
And Infosys
For The Year 2013-2014
INTRODUCTION
Comparative financial statements are accounting reports that show more than
just the current-year activity or balances. The three major financial statements
are the balance sheet, the income (or profit and loss) statement and the cash
flow statement. Comparative statements are required in order to comply with
generally accepted accounting principles. They give readers a more complete
view of the direction of the company over time.
Financial statements are a collection of reports about an organization's financial
results and condition. They are useful for the following reasons:
To derive financial ratios from the statements that can indicate the
condition of the business.
Statement of cash flows. Shows changes in the entity's cash flow during
the reporting period.
1968 to 2000
Tata Consultancy Services Limited (TCS) was founded in 1968 as a division of
Tata Sons Limited by JRD Tata. Its early contracts included providing punched
card services to sister company TISCO (now Tata Steel)working on an InterBranch Reconciliation System for the Central Bank of India, and providing
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
trainee programmer.
In 1979, TCS delivered an electronic depository and trading system called
SECOM for the Swiss company SIS Sega Inter Settle. TCS followed this up
with System X for the Canadian Depository System and automating the
Johannesburg Stock Exchange. TCS associated with a Swiss partner, TKS
Techno soft, which it later acquired.
In 1981, TCS established India's first dedicated software research and
development centre, the Tata Research Development and Design Centre
(TRDDC) in Pune. In 1985 TCS established India's first client-dedicated
offshore development centre, set up for client 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 developer and client
implementation.
2000 to present
2
INTRODUCTION OF INFOSYS
Infosys Ltd is a global technology services firm that defines designs and
delivers information technology (IT)-enabled business solutions to their clients.
The company provides end-to-end business solutions that leverage technology
for their clients, including technical consulting, design, development, product
engineering, maintenance, systems integration, package-enabled consulting, and
implementation and infrastructure management services. The company also
provides software products to the banking industry. They have developed
finacle, a universal banking solution to large and medium size banks across
India and overseas. Infosys BPO is a majority owned subsidiary. Through
Infosys BPO, the company provides business process management services,
such as offsite customer relationship management, finance and accounting, and
administration and sales order processing. The company is having marketing
and technical alliance with FileNet, IBM, Intel, Microsoft, Oracle and System
Application Products. Infosys Ltd is a public limited and India's second largest
software exporter company was incorporated in the year 1981 as Infosys
Consultants Pvt Ltd by Mr.N.R.Narayana Murthy at Karnataka. The company
was started by seven people with the investment of USD 250. The company
became a public limited company in the year 1992. The company was the first
Indian company to be listed on the NASDAQ at the year 1999. Infosys also
forms a part of the NASDAQ-100 index. Continuously in the year 2001, 2002
and 2003, the company wins the National award for excellence in corporate
governance conferred by the Government of India. In October 2, 2004, they set
up a wholly owned subsidiary in People's Republic of China named Infosys
Technologies (China) Co Ltd. In the year 2005, the company established Infosys
Consulting Inc, a wholly owned subsidiary in Texas, US to add high-end
consulting capabilities to their Global Delivery Model. The company was
selected as 'Best Outsourcing Partner' by the readers of Waters, a publication
covering the needs of chief information officers in the capital market firms. In
the year 2007, the company increased the stake value in Progeon to 98.9% after
4
Shareholders fund + long term liabilities + short term liabilities = Fixed assets
+ current assets
TCS
INFOSYS
295.72
32266.53
287
35772
32562.25
36059
83.10
168.49
251.87
269.52
772.98
56
120
176
80.02
3528.04
2172.71
3896.14
9676.91
178
2827
3788
6793
43012.14
43028
5059.48
44.80
1763.85
4425
28
1135
Long-term borrowings
Deferred tax liabilities(net)
Other long-term liabilities
Long term provisions
CURRENT LIABILITIES
a)
b)
c)
d)
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
TOTAL
2.ASSETS
NON-CURENT ASSETS
a) Fixed assets
i. Tangible assets
ii. Intangible assets
iii. capital work in progress
b)
c)
d)
e)
Non-current investments
Deferred tax assets
Long-term loans and advances
Other non-current assets
6868.13
5588
5975.73
148.23
4630.21
1881.20
2764
378
1529
31
19503.50
10290
348.65
6.34
2303.35
11202.32
4054.16
4911.48
682.34
23508.64
1580
6365
20401
4392
32738
43012.14
43028
CURRENT ASSETS
a)
b)
c)
d)
e)
f)
g)
Current investments
Inventories
Unbilled revenues
Trade receivables
Cash and cash balances
Short-term loans and advances
Other current assets
TOTAL
from this financial report by subtracting total expenses from total revenue. The
profit and loss statement and the balance sheet are the two major financial
reports that every public company publishes. The difference between this
statement and the balance sheet deals with the periods of time that each one
represents. The profit and loss statement shows transactions over a given period
of time (usually quarterly or annually), whereas the balance sheet gives a
snapshot holdings on a specific date. Also called income statement or earnings
report
Profit and loss account is that part of final account is made for calculating
the net profit or net loss. In the debit side of this account, we show all indirect
loss and expenses and in the credit side of this account, we show all indirect
incomes. After matching debit and credit side of profit and loss account, we can
find net profit or loss of business. If organisation is company, we transfer this
balance to profit and loss appropriation account; otherwise, we transfer this
balance to capital account.
Explanation of Profit and Loss Account
A) Debit Side of Profit and loss account
1. Gross loss transferred from trading account.
2. All indirect expenses like sale expenses, office expenses and legal expenses
3. If credit side is more than debit side, we show net profit in debit side
B) Credit Side of Profit and Loss account
1. Gross profit transferred from trading account
2. Indirect Incomes like rent, commission, and discount received
3. If debit side is more than credit side, we show net loss in credit side
Profit & Loss Account For Tata Consultancy Services And Infosys For
The Year 2013-2014
AMT IN CRORES
PARTICULARS
TCS
INFOSYS
11
I.
II.
III.
V.
a)
b)
c)
VII.
40352
2365
42717
17081.72
-
22565
85
TOTAL EXPENSES
30.62
802.86
17038.15
1459
1509
777
361
506
1099
1557
34953.35
29918
15703.18
12799
3197.42
44.00
(324.58)
2916.84
3518
(148)
3370
Expenses:
a) Employee benefit expenses
b) Deferred consideration pertaining to
acquisition
c) Cost of technical sub contractors
d) Travel expenses
e) Cost of software packages and others
f) Communication expenses
g) Professional charges
h) Finance costs
i) Depreciation and a amortizations expense
j) Operation and other expenses
IV.
VI.
48426.14
2230.39
50656.53
TAX EXPENSE:
Current tax
Deferred tax
MAT entitlement
12789.34
9429
65.22
165.01
195722099
6
571400091
12
13
TCS
INFOSYS
Increase/decreas Increase/decreas
e
e
Amt
Amt
7705.62
7705.62
31.37
31.00
6662.00
6662.00
Long-term borrowings
Deferred tax liabilities(net)
Other long-term liabilities
Long term provisions
CURRENT LIABILITIES
a
b
c
d
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
TOTAL
2.ASSETS
(13.13)
50.39
54.28
114.74
206.28
80.02
680.13
574.15
(492.87)
841.43
8753.33
(13.64)
42.67
27.47
74.13
36.40
23.88
35.92
(11.23)
9.52
25.55
56
59
115
166
882
149
1197
7974
21.46
21.26
47.97
93.50
721.74
28.83
3.90
17.34
20.79
NON-CURENT ASSETS
a Fixed assets
i. Tangible assets
ii. Intangible assets
iii. capital work in progress
b Non-current investments
1047.32
(6.66)
364.03
1404.69
26.10
12.94
432
1152
9.87
97.63
93.22
34.73
14
26.00
25.71
550
2134
CURRENT ASSETS
a
b
c
d
e
Current investments
Inventories
Unbilled revenues
Trade receivables
Cash and cash balances
TOTAL
828.67
8.49
297.4
16.10
(755.68) 6.08
1783.57 6.86
(28.66)
10.07
373
204
165
9325
76.98
9.90
106.67
35.72
16
2892
15
PARTICULARS
INFOSYS
Increase/decrease
I.
II.
III.
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Revenue from
operations
Other income(net)
TOTAL REVENUE
Expenses:
Employee benefit
expenses
Deferred
consideration
pertaining to
acquisition
Cost of technical sub
contractors
Travel expenses
Cost of software
packages and others
Communication
expenses
Professional charges
Finance costs
Depreciation and a
amortizations
expense
Operation and other
expenses
TOTAL EXPENSES
Amt
10321.91
(454.79)
9867.12
27.09
(16.94)
24.19
3509.04
25.85
14.22
86.71
114.69
16.67
3892.32
29.61
7530.27
27.50
Increase/decrease
Amt
6618
461
7079
19.62
24.21
19.86
4225
23.04
85
682
87.77
387
123
34.49
18.81
87
23
-
31.75
4.76
-
171
18.43
196
14.40
5979
24.98
16
IV.
V.
a)
b)
c)
VI.
VII.
PROFIT BEFORE
TAX
TAX EXPENSE:
Current tax
Deferred tax
MAT entitlement
2336.85
332.04
82.93
111.52
526.49
1810.36
17.48
1100
9.40
11.59
(213.02)
(25.57)
22.03
205
(202)
3
6.19
(374.07)
(367.88)
16.49
1097
13.17
16.57
19.18
13.15
EARNINGS PER
EQUITY SHARE:
9.27
Chapter:5
MEANING OF CASH FLOW:
Definition:
17
A financial statement that reflects the inflow of revenue vs. the outflow of
expenses resulting from operating, investing and financing activities during
a specific time period
Cash flow statements and projections express a business's results or plans
in terms of cash in and out of the business, without adjusting for accrued
revenues and expenses. The cash flow statement doesn't show whether the
business will be profitable, but it does show the cash position of the business at
any given point in time by measuring revenue against outlays.
The cash flow statement should be prepared on a monthly basis during
the first year, on a quarterly basis for the second year, and annually for the third
year. The following 17 items are listed in the order they need to appear on your
cash flow statement:
1.
Cash refers to cash on hand in the business.
2.
Cash sales are income from sales paid for by cash.
3.
Receivables are income from the collection of money owed to the
business resulting from sales.
4.
Other income is income from investments, interest on loans that have
been extended, and the liquidation of any assets.
5.
Total income is the sum of total cash, cash sales, receivables and other
income.
6.
Material/merchandise is the raw material used in the manufacture of a
product (for manufacturing operations only), the cash outlay for merchandise
inventory (for merchandisers such as wholesalers and retailers), or the supplies
used in the performance of a service.
7.
Direct labor is the labor required to manufacture a product (for
manufacturing operations only) or to perform a service.
8.
Overhead is all fixed and variable expenses required for the operations
of the business.
9.
Marketing/sales is all salaries, commissions and other direct costs
associated with the marketing and sales departments.
10.
R&D is labor expenses required to support the research and development
operations of the business.
11.
G&A is labor expenses required to support the general and administrative
functions of the business.
12.
Taxes are all taxes, except payroll, paid to the appropriate government
institutions.
18
13.
19
20
21
1. SHARE CAPITAL
The Authorized, Issued, Subscribed and Fully paid-up share capital
comprises of equity shares and redeemable preference shares having a par value
of ` 1 each as follows:
(b)
Rights,
Preference shares
Preference shares would be redeemable at par at the end of six years from the
date of allotment i.e. March 28, 2008, but may be redeemed at any time after 3
years from the date of allotment at the option of shareholder. These shares
would carry a fixed cumulative dividend of 1% per annum and a variable noncumulative 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.
Details of shares held by shareholders holding more than 5% of the
aggregate shares in the Company
24
The Board of Directors at its meeting held on April 17, 2013 has recommended
a final dividend of ` 13 per equity share
Obligations under finance lease are secured against fixed assets obtained under
finance lease arrangements.
DEFERRED TAX BALANCES
Major components of the deferred tax balances consist of the following
25
receivables
Provision for employee benefits includes provision for gratuity and other
retirement benefits.
SHORT - TERM BORROWINGS
Short term borrowings consist of the following:
26
B
ank Overdrafts are secured against book debts .
OTHER CURRENT LIABILITIES
Other current liabilities consist of the following
27
29
CURRENT INVESTMENTS
Current investments consist of the following:
INVENTORIES
Inventories consist of the following:
32
Inventories are carried at the lower of cost and net realizable value.
UNBILLED REVENUES
Unbilled revenue as at March 31, 2013 amounting to ` 2303.35 crores (March
31, 2012: ` 1567.47 crores) primarily comprises of the revenue recognised in
relation to efforts incurred on turnkey contracts priced on a fixed time, fixed
price basis of ` 1509.25 crores (March 31, 2012: ` 1208.10 crores).
TRADE RECEIVABLES
Trade receivables (Unsecured) consist of the following
Balances with banks in current accounts do not include fourteen bank accounts
having a balance of ` 1.35 crores (March 31, 2012: ` 0.31 crore) operated by the
Company on behalf of a third party.
SHORT - TERM LOANS AND ADVANCES
Short term loans and advances (Unsecured) consist of the following:
34
35
FINANCE COSTS
Finance costs consist of the following:
INFOSYS:
1. SHARE CAPITAL:
36
DuringtheyearendedMarch31,2012,theamountofpersharedividendrecognizedasdistrib
utionstoequityshareholderswas`47.ThedividendfortheyearendedMarch31,2012includ
es`22pershareoffinaldividend,`15pershareofinterimdividendand`10pershareofspecial
dividend-10yearsofInfosys BPO operations.
The Board of Directors, in their meeting on October 12, 2012, declared an interim
dividend of `15 per equity share. Further the Board of Directors, in their meeting on
April 12, 2013, proposed a final dividend of `27 per equity share. The proposal is
subject to the approval of shareholders at the Annual General Meeting to be held on
June 15, 2013. The total dividend appropriation for the year ended March 31, 2013
amounted to `2,815 crore including corporate dividend tax of `403 crore
37
DEFERRED TAXES
38
39
INVESTMENTS
40
41
TRADE RECEIVEBALES
42
OTHER INCOME:
EXPENSES
43
TAX EXPENSES
44
CONCLUSION
TCS also one of the successful private sector company in India. It is the
company that has pioneered many services first time in India. TCS was the first
45
to offer a product called one view by which customers are able to view their
accounts in six branches on one page on their website.
Infosys earlier known as Imperial Company has proved its existence through
introducing various innovative schemes and that also are considered as
competitive in present market. At the same time we can conclude that they need
to focus on their human resources in order to achieve the maximum market
share.
46