An Analysis of IT Companies Before During and After Recession

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CONTENT

CHAPTER 1INTRODUCTION

CHAPTER 2REVIEW LITERATURE

CHAPTER.33.1PRIMARY OBJECTIVE3.2SECONDARY OBJECTIVE

CHAPTER 4METHODLOGY

CHAPTER 5

WORK DONE

CHAPER 6FINACIAL STATEMENTS

CHAPTER 7LIMITATIONS

CHAPTER 8FINDING AND SUGGESIONS

CHAPTER 9

REFERENCE

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1 INTRODUCTION

At regular period Information Technology companies must preparedocuments called financial statements. Financial statements show the

financial performance of a company. They are used for both internal-, andexternal purposes. When they are used internally, the management andsometimes the employees use it for their own information. Managers use it toplan ahead and set goals for upcoming periods. When they use the financialstatements that were published, the management can compare them withtheir internally used financial statements. They can also use their own andother enterprises financial statements for comparison with macroeconomical data and forecasts, as well as to the market and industry in whichthey operate in.

The four main types are balance sheets, profit and loss accounts, cash flowstatements, and income statements.

Balance sheets

Balance sheets provide the observant with a clear picture of the financialcondition of the company as a whole. It lists in detail the tangible and theintangible goods that the company owns or owes. These good can be brokenfurther down into three main categories; the assets, the liabilities and theshareholders equity

Assets : assets include anything that the company actually owns and hasdisposal over. Examples of the assets of a company are its cash, lands,buildings, and real estates, equipment, machinery, furniture, patents andtrademarks, and money owed by certain individuals or/and other businessesto the particular company. Assets that are owed to the company are referredto as accounts-, or notes receivables.

- Current Assets include anything that companies can quickly monetise.Such current assets include cash, government securities, marketablesecurities, accounts receivable, notes receivable (other than from officers oremployees), inventories, prepaid expenses, and any other item that could beconverted into cash within one year in the normal course of business.

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- Fixed Assets are long-term investments of the company, such as land,plant, equipment, machinery, leasehold improvements, furniture, fixtures,and any other items with an expected useful business life usually measuredin a number of years or decades (as opposed to assets that wear out or areused up in less than one year. Fixed assets are usually accounted asexpensed upon their purchase. They are normally not for resale and arerecorded in the Balance Sheet at their net cost less (less is accounting termfor minus) accumulated depreciation.

Other Assets include any intangible assets, such as patents, copyrights,other intelectual property, royalties, exclusive contracts, and notesreceivable from officers and employees.

Liabilities

Liabilities are money or goods acquired from individuals, and/or othercorporate entities. Some examples of liabilities would be loans, sale of property, or services to the company on credit. Creditors (those that loan tothe company) do not receive ownership in the business, only a (usuallywritten) promise that their loans will be paid back according to the termagreed upon.

Current Liabilities are accounts-, and notes-, taxes payable to financialinstitutions, accrued expenses (eg.: wages, salaries), current payment (duewithin one year) of long-term debts, and other obligations to creditors duewithin one year.

Long-Term Liabilities are mortgages, intermediate and long-term loans,equipment loans, and other payment obligation due to a creditor of thecompany. Long-term liabilities are due to be played in more than one year.

Shareholders equity (or net worth , or capital )

The shareholders equity is money or other forms of assets invested into thebusiness by the owner, or owners, to acquire assets and to start thebusiness. Any net profits that are not paid out in form of dividends to theowner, or owners, are also added to the shareholders equity. Losses duringthe operation of the business are subtracted from the shareholders equity.

Assets are calculated the following way:

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Assets=Liabilities + Net worth

Balance sheets show how the assets, liabilities, and the net worth of abusiness are distributed. They usually are prepared at set periods of time, forexample at the end of each quarter. It is always prepared at the end of fiscal

years.

The periodic preparation of the balance sheets, the owner and/or themanager of the company can see historic-, and current trends andalsothegeneral performance of the corporation. It allows decision makers to makeadjustments when needed, like the proportion of liabilities to assets.

All balance sheets contain the same categories of assets, liabilities and networth figures. Assets are arranged in decreasing order of their liquidity .Liabilities are listed in order of how soon they must be repaid, followed by

retained earnings (net worth of owners equity).

The categories and formats of Balance Sheets are established by a systemknown as Generally Accepted Accounting Principles (GAAP). The system isapplied to all companies, large or small, so anyone reading the BalanceSheets can readily understand what it is saying.

Profit and Loss Account

Profit and loss accounts summarize the incomes and expenses of a companyin a given period of time. It also includes accruals too, which are incomes thatwill be realized only after the particular Profit and Loss Account statementwas prepared.

Cash flow statements

These statements show how money is predicted to move around (hence thephrase cash flow ) at a given period of time. It is useful for planning futureexpenses. It shows whether or not there will be enough money to carry outthe planned activities and whether or not the cash coming in are enough tocover the expenses. The cash flow statement is useful in the determination of the companys liquidity in a given period of time.

Income statements

Income statements measure the companys sales and expenses over aspecific period of time. They are prepared each month and fiscal year end.

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Income statements show the results of operating during those accountingperiods. They are also prepared using the Generally Accepted AccountingPrinciples (GAAP) and contain specific revenue and expense categoriesregardless of the nature of the company.

2 REVIEW OF LITERATURE

Various literatures are reviewed to guide the study. These are

subsumed under headings such as theoretical literature, empirical

literature, summary of literatures review and value added.

2.1 Theoretical literature This section consists of the concept of InformationTechnology, types,

applications and importance of information technology.

2.1.1 The concept of InformationTechnology (IT) in the emerging electronics

complex industrial sector, InformationTechnology forms part of a

constellation of industries which consist of various sub groups such as

semi conductors, computer components, telecommunications,

consumer electronic and office devices. It is the product of advances inkey areas of computing, telecommunications and microelectronics.

(Martin; 1988). Zijp (1994) described it as telecommunications and

computer-based technology. According to Hanna (1994).

InformationTechnology covers all activities and technologies which

involves the handling of information by electronic means. This

includes information acquisition, storage, retrieval, processing,

transmission and control. According to her, it includes the supply side

(which deals with computer hardware and software,telecommunications equipment and micro electronics) and the demand

side (which includes applications of information technology of all

sectors including financial. manufacturing, education, transaction

system. management information systems, electronic publishing and

information services). hence InformationTechnology refers to the

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acquisition, processing, storage, dissemination and use of vocal,

pITorial , textual and numerical information by a microelectronics

based combination of computing and telecommunications.

2.1.2 Types and applications of InformationTechnology

There are multifarious types of information technology with extensive

applications in various sectors. Some of the commonest types are as

follows:

i) Compact disc read only memory (CD ROM): This requires a micro

computer with a CD ROM drive, discs and electricity. It is basically

used as a reference tool.

ii) Computer Networks: This refers to computers at different location

linkedtomodern and to telecommunications networks. It is basically

used to link locations with typed messages and link users to sources of

data.

iii) Desktop Publishing: This makes use of microcomputers,

Laserprinter,software and electricity for the production of high quality

texts and graphics.

iv) Expert systems; This consists of the use of micro computer with expert

system software and electricity. It is used for training and provision of

expert advice to less experienced users.

v) Geographic information system (GIS): this types of information

technology uses micro computer, ink jet printers or equivalent, GIS

software, digitizing tablet and electricity. Its applications are for data

organization and comparisons on geographic areas and for land use

planning and environmental impact assessment.

vi) Interactive video disc (IVD): This is used mainly for pITorial and verbal

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communication. Its involves a combination of a micro computer with

internal video board linked to video disc player and speaker.

vii) Packet radio: It utilizes a micro computer, radio with modern antenna

and access to satellite link for link groups with poor communication toothers

viii) Radio and interactive radio: This requires the use of radio, radio

broadcasting station, broadcast materials for mass communication

and training purposes.

ix) Video technology: This makes use Video camera and tapes, editing

equipment, projectors and television to enables small groups

produce powerful visual materials

x) Satellite communication: This consists of a satellite dish for low

orbiting satellite (LEOS) and for geostationary orbiting satellite

(GEOS). It uses a satellite channel, user terminal and electricity for

access to television broadcasts, distance education, remote sensing

transmission of video pITures, life events, texts, graphics, etc.

2.1.3 The importance of InformationTechnology. We are currently in the

information age. According to the United Nations Center for S&T, the

distinction between information have and the basis for the

dichotomies between developed and developing, rich and poor; it is

within this context that the concept of development might be

understood in information terms. A synthesis of the works or Wellenius

(1995) and Hanna (1996) shows that IT accounts for a great

percentage of GNP. In the United States of America, more than 46% of

GNP and 53% of labor income are related to knowledge, information

and communication. In many other countries such as countries within

the organization for economic co-operation and development (OECD),

the information sector accounts for between one third to half of Gross

Domestic Product (GDP) and employment Wellenius (1994) noted that

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by the year 2000 this sector is expected to grow the 60% of the

European community GDP.

The information sector is taking up such a large percentage of GDP

because the abundance of cheap labor and raw material is no longeradequate for global competition. According to Hanna (1994)

information, flexibility, product quality and fast response are the key

new factors required and IT plays a critical role in these areas. Anotholt

(1993) has declared that information is just as important as a

production factor like lank, labor and capital. Adeola (1995) has

commended on the implications of the new General Agreement on

Trade and Tariffs (GATT) - the product of Uruguay round of multilateral

trade negotiations. According to her:

Effective communication links and computerized system are a sine qua

non for high quality service delivery. With instantaneous access to

information, indentified shortage in markets are quickly disseminated

throughout a global network, thereby ensuring efficiency,

competitiveness, strengthening of domestic services quality.

This agrees with Hanna (1994) who stipulated the importance of

information technology as follows:

1) It enhances access to global knowledge, markets and capital.

2) It is critical tool for competition in an information intensive

economy.

3) It transforms the way people do things

4) It increase the amount of information available to economic

agents

5) It increase information intensity of processes, occupations,

institutions, products and economics

6) It reduces transaction and coordination costs within and across

institutions.

Apex technology (1996) in his work stipulated that the use of

InformationTechnology is advantages because it develops a continuity

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of thoughts especially for motion It also stimulates self activity for

pupils through the provision of realities of experience, makes learning

more permanent and kindles student's interest in subjects. It also

supplies meaningless word responses by pupils. noted that information

is the life blood of any form of education. according to him, anyproblems cause by an exponential growth in information are offset by

the benefits of InformationTechnology to educational development.

Such benefits refer to marked increase in the amount of information

learning and enhancing of understanding. The essential significance of

Information technology lies in the role as a change agent, creator of

possibilities: and an enabling and liberating presence in our midst

which changes the relationship between learning and leisure.(Martin:

1988). According to craig (1984): "although it will be some time before

the full potential of IT is realized, the advantages are apparent and

include exposure to new ideas, experiences, development of logical

thinking and reasoning abilities, support for training in new skills such

as programming remedial activity and stimulation of real life

situations."

In summary, InformationTechnology is profoundly transforming

competitive strategies, product development, manufacturing processes

and procurement practices. It is upon this premise that Martin (1988)

stated emphatically that, "no important field of endeavor remains

immune to the influence of information technology and no corner of

life its left undisturbed at its short coming." The transformations

achieved by InformationTechnology according to Hanna (1994) induces

managerial and organizational innovations, new businesses practices

such as sourcing, de-layering, time based competition, just in time

procurement and flexible manufacturing. According to Gbade (1990)

and Antonello (1990) information communication technolo1gy is an

enabling technology, which blends traditional industrial structures,

based on small firms with trends towards quality enhancement. This is

because the success and efficiency of firms surely depends on timely

access to information.

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2.2 Empirical Literature

Various empirical studies on information technology and its impact on

sectors in various countries have been conducted over the years.

Strassman (1990) studied the statistical correlation between ITspending and profitability or stock value. He discovered that the

correlation between these two factors was insignificant which implies

that IT spending is unproductive. Morrison and Bernt (1991) compared

the marginal benefits of investment in InformationTechnology with the

marginal costs for the manufacturing industry. They discovered that

for each additional dollar spent in information technology equipment,

the marginal increase in measured output was only eighty cents.

3.1 PRIMARY OBJECTIVE:

To study the performance, achievements and problems of IT sector

3.2 SECONDARY OBJECTIVES

1. Analysis of the each item of financial statements with previous yeardata using ratios and interpreting the same.

2. Identify the performance of the company year by year and item byitem

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4 METHODOLOGY

For analyzing the financial statements the following ratios used to find outthe financial position of the companies

1. Per share Ratios

2. Profitability Ratios

3. Leverage Ratios

4. Liquidity Ratios

5. Payout Ratios

6. Coverage Ratios

7. Component Ratios

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5. WORK DONE

Collection of 5 years Audited financial statements of 10 leadingIT companies. The list of the same is given under

1. Wipro Ltd

2. Aptech Ltd

3. Financial Technologies India Ltd

4. HCL Technologies Ltd

5. Infosys Technologies Ltd

6. IQ Infotech Ltd Research Centre

7. Moser Baer India Ltd Research Centre

8. Polaris Software Lab Ltd

9. Satyam Computer Service Ltd

10. TATA consultancy Service Ltd

Analyze the above financial statements with the help of Ratios andinterpreting the same.

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6 FINANCIAL STATEMENTS

APTECH LTD Balance sheet Rs in Cr

Dec 09 Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05

Sources of funds

Owner's fundEquity share capital 46.50 43.75 37.89 37.64 33.51Share application money 0.14 3.61 8.14 2.02 0.01Preference share capital - - - - -Reserves & surplus 117.25 81.98 38.22 44.25 61.59Loan fundsSecured loans 18.94 17.21 20.13 25.53 22.01Unsecured loans - - - - -Total 182.84 146.55 104.38 109.44 117.12Uses of fundsFixed assetsGross block 75.27 116.21 103.75 101.00 101.61Less : revaluation reserve - - - - -Less : accumulated depreciation 36.76 79.07 66.98 55.01 27.64

Net block 38.50 37.13 36.78 45.99 73.97Capital work-in-progress 0.28 4.15 0.11 - -

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Dec 09 Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05Investments 26.32 34.51 11.27 2.86 5.97Net current assetsCurrent assets, loans & advances 181.13 137.32 139.13 144.99 153.04Less : current liabilities & provisions 63.39 66.55 82.91 84.40 115.86Total net current assets 117.74 70.76 56.22 60.59 37.18Miscellaneous expenses not written - - - - -Total 182.84 146.55 104.38 109.44 117.12Notes:Book value of unquoted investments 26.32 34.51 11.27 2.86 5.97Market value of quoted investments - - - - -Contingent liabilities 18.75 17.61 16.66 17.67 13.50

Number of equity sharesoutstanding (Lacs) 465.02 437.51 378.87 376.36 335.09

Profit loss account-Rs in Cr


IncomeOperating income 112.99 99.26 81.21 100.28 99.71ExpensesMaterial consumed - - - - -Manufacturing expenses 34.78 34.25 33.20 42.42 29.57Personnel expenses 23.79 19.68 18.42 11.85 15.26Selling expenses 25.97 11.20 7.24 3.18 3.10Adminstrative expenses 26.20 18.95 17.10 52.45 59.58Expenses capitalised - - - - -Cost of sales 110.74 84.08 75.97 109.91 107.51Operating profit 2.25 15.18 5.24 -9.62 -7.80Other recurring income 1.39 0.69 3.23 12.75 5.76Adjusted PBDIT 3.65 15.87 8.47 3.12 -2.04Financial expenses 1.28 2.34 2.51 6.01 3.18Depreciation 13.07 12.19 12.58 19.51 17.17Other write offs - - - - -Adjusted PBT -10.71 1.34 -6.62 -22.40 -22.39Tax charges -21.34 0.66 0.58 0.42 -1.28Adjusted PAT 10.63 0.68 -7.19 -22.82 -21.11

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Liquidity ratiosCurrent ratio 2.86 2.06 1.68 1.72 1.32Current ratio (inc. st loans) 1.80 1.51 1.42 1.57 1.05Quick ratio 2.48 2.03 1.66 1.70 1.22Inventory turnover ratio 61.39 51.40 50.58 82.66 78.42Payout ratiosDividend payout ratio (net profit) - - - - -Dividend payout ratio (cash profit) - - - - -Earning retention ratio 100.00 100.00 - - -Cash earnings retention ratio 100.00 100.00 100.00 - -Coverage ratiosAdjusted cash flow time total debt 0.79 1.34 3.74 - -Financial charges coverage ratio 2.84 6.79 3.38 0.51 -0.64

Fin. charges cov.ratio (post tax) 14.89 7.27 3.33 -1.12 -12.87Component ratiosMaterial cost component (% earnings) - - - - -Selling cost Component 22.98 11.28 8.92 3.17 3.11Exports as percent of total sales 17.79 14.96 18.35 40.47 20.33Import comp. in raw mat. consumed - - - - -Long term assets / total Assets 0.14 0.25 0.15 0.16 0.28Bonus component in equity capital (%) - - - - -

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Financial Technologies (India) Ltd

Balance sheet-Rs in Cr

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Sources of fundsOwner's fund

Equity share capital 9.18 9.18 8.82 8.80 8.80Share application money - - - - -Preference share capital - - - - -Reserves & surplus 1,705.26 1,460.20 189.84 142.22 129.85Loan fundsSecured loans - - - - -Unsecured loans 461.10 399.45 434.42 - -Total 2,175.54 1,868.83 633.08 151.02 138.65Uses of fundsFixed assetsGross block 67.80 45.80 23.20 12.86 9.91Less : revaluation reserve - - - - -Less : accumulated depreciation 14.63 7.75 5.86 4.50 3.51

Net block 53.17 38.05 17.34 8.36 6.40Capital work-in-progress 230.94 169.21 51.72 0.82 -Investments 1,444.47 1,374.33 414.38 160.25 123.23Net current assetsCurrent assets, loans & advances 649.42 417.37 225.30 53.12 23.22Less : current liabilities & provisions 202.46 130.12 75.67 71.53 14.20

Total net current assets 446.96 287.24 149.63 -18.40 9.02Miscellaneous expenses not written - - - - -Total 2,175.54 1,868.83 633.08 151.02 138.65Notes:Book value of unquoted investments 1,442.62 1,374.33 412.64 160.25 123.23Market value of quoted investments 1.85 - - - -Contingent liabilities 166.12 50.35 79.71 7.87 0.12

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Number of equity sharesoutstanding(Lacs) 458.84 458.84 440.95 440.09 440.09



IncomeOperating income 334.32 137.56 98.83 90.68 31.95Expenses

Material consumed 8.68 4.54 2.35 - -Manufacturing expenses 3.43 1.03 0.59 0.44 0.34Personnel expenses 94.82 48.38 31.76 17.65 7.73Selling expenses 2.46 2.15 1.96 1.49 1.77Adminstrative expenses 60.17 30.33 18.64 12.16 8.22Expenses capitalised - - - - -Cost of sales 169.56 86.44 55.30 31.74 18.06Operating profit 164.76 51.12 43.53 58.94 13.89Other recurring income 88.74 60.90 66.47 4.58 0.93Adjusted PBDIT 253.50 112.02 110.00 63.52 14.82Financial expenses 0.14 10.93 0.28 - -Depreciation 7.24 2.35 1.54 1.13 0.98Other write offs - - - - -Adjusted PBT 246.12 98.74 108.19 62.38 13.84Tax charges 101.99 280.29 17.88 14.90 3.48Adjusted PAT 144.13 -181.55 90.31 47.48 10.36

Non recurring items 218.70 1,142.81 10.30 -1.04 -0.48Other non cash adjustments 5.76 - - -3.98 -0.57Reported net profit 368.60 961.25 100.61 42.47 9.31Earnigs before appropriation 1,200.14 1,035.59 125.38 59.88 20.17Equity dividend 45.88 91.50 35.26 26.41 1.76Preference dividend - - - - -Dividend tax 7.80 15.55 5.68 3.70 0.25Retained earnings 1,146.46 928.54 84.44 29.77 18.16

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Ratios

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Per share ratiosAdjusted EPS (Rs) 31.41 -39.57 20.48 10.79 2.35Adjusted cash EPS (Rs) 32.99 -39.06 20.83 11.05 2.58Reported EPS (Rs) 80.33 209.50 22.45 10.59 2.25Reported cash EPS (Rs) 81.91 210.01 22.79 10.85 2.48Dividend per share 10.00 20.00 8.00 6.00 0.40Operating profit per share (Rs) 35.91 11.14 9.87 13.39 3.16Book value (excl rev res) per share(Rs) 15.54 48.17 45.05 34.32 31.51

Book value (incl rev res) per share(Rs.) 15.54 48.17 45.05 34.32 31.51

Net operating income per share (Rs) 72.86 29.98 22.41 20.60 7.26Free reserves per share (Rs) 371.30 317.92 42.73 31.98 29.17Profitability ratiosOperating margin (%) 49.28 37.16 44.04 64.99 43.47Gross profit margin (%) 47.11 35.45 42.48 63.74 40.40

Net profit margin (%) 87.12 484.36 59.87 48.91 30.14Adjusted cash margin (%) 35.78 -90.29 55.56 51.03 34.48

Adjusted return on net worth (%) 8.40 -12.35 45.46 31.44 7.46Reported return on net worth (%) 21.49 65.41 49.81 30.85 7.14Return on long term funds (%) 11.31 5.86 17.13 41.30 9.97Leverage ratiosLong term debt / Equity 0.26 0.27 2.19 - -Total debt/equity 0.26 0.27 2.19 - -Owners fund as % of total source 78.80 78.62 31.38 100.00 100.00Fixed assets turnover ratio 8.62 5.10 4.46 7.54 3.49Liquidity ratiosCurrent ratio 3.21 3.21 2.98 0.74 1.64Current ratio (inc. st loans) 3.21 3.21 2.98 0.74 1.64Quick ratio 3.18 3.17 2.95 0.71 1.61Inventory turnover ratio - 3,667.00 - - -Payout ratiosDividend payout ratio (net profit) 14.56 11.13 41.36 64.61 20.24Dividend payout ratio (cash profit) 14.28 11.10 40.73 63.08 18.42

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Jun ' 10 Jun ' 09 Jun ' 08 Jun ' 07 Jun ' 06Equity share capital 134.05 133.27 132.74 64.69 63.84Share application money 0.47 1.71 - 1.33 1.64Preference share capital - - - - -Reserves & surplus 3,353.72 3,079.85 3,292.28 2,511.18 2,796.14Loan fundsSecured loans 123.81 25.24 40.77 13.17 96.42Unsecured loans 389.92 0.09 0.12 0.21 0.27Total 4,001.97 3,240.16 3,465.91 2,590.58 2,958.31Uses of fundsFixed assetsGross block 1,957.86 1,599.61 1,332.67 1,014.08 632.06Less : revaluation reserve - - - - -Less : accumulated depreciation 1,100.88 874.32 662.58 488.40 272.11

Net block 856.98 725.29 670.09 525.68 359.95Capital work-in-progress 417.56 419.03 212.86 163.63 71.78Investments 562.75 1,797.34 1,988.86 1,907.76 2,654.66Net current assetsCurrent assets, loans & advances 4,760.07 2,850.89 2,027.86 1,128.61 556.96Less : current liabilities & provisions 2,595.39 2,552.39 1,433.76 1,135.10 685.04Total net current assets 2,164.68 298.50 594.10 -6.49 -128.08Miscellaneous expenses not written - - - - -Total 4,001.97 3,240.16 3,465.91 2,590.58 2,958.31Notes:Book value of unquoted investments 562.75 1,797.34 1,988.86 1,323.33 2,622.08Market value of quoted investments - - - 10.11 33.26Contingent liabilities 3,317.46 469.36 418.65 331.01 511.56

Number of equity sharesoutstanding(Lacs) 6702.57 6663.40 6636.83 3234.42 3192.15


Jun ' 10 Jun ' 09 Jun ' 08 Jun ' 07 Jun ' 06

IncomeOperating income 4,675.09 4,615.39 3,768.62 3,032.92 1,447.01

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Jun ' 10 Jun ' 09 Jun ' 08 Jun ' 07 Jun ' 06

ExpensesMaterial consumed - - - - -Manufacturing expenses 592.67 746.92 577.24 476.97 304.93Personnel expenses 1,874.10 1,621.35 1,322.59 1,123.51 488.54Selling expenses 14.83 29.68 17.82 11.09 20.88Adminstrative expenses 803.82 990.48 913.89 611.59 276.13Expenses capitalised - - - - -Cost of sales 3,285.42 3,388.43 2,831.54 2,223.16 1,090.48Operating profit 1,389.67 1,226.96 937.08 809.76 356.53Other recurring income 158.67 62.85 16.07 6.55 25.53Adjusted PBDIT 1,548.34 1,289.81 953.15 816.31 382.06Financial expenses 35.35 24.93 20.60 17.81 11.58Depreciation 251.89 217.87 178.21 138.80 67.56

Other write offs - - - - -Adjusted PBT 1,261.10 1,047.01 754.34 659.70 302.92Tax charges 196.61 94.60 75.87 15.45 12.15Adjusted PAT 1,064.49 952.41 678.47 644.25 290.77

Non recurring items -67.18 -171.76 423.35 -5.87 36.01Other non cash adjustments - - - - 2.49Reported net profit 997.31 780.65 1,101.82 638.38 329.27Earnigs before appropriation 2,570.04 2,351.09 2,287.81 1,838.31 1,439.05Equity dividend 469.61 598.58 525.59 516.10 501.75Preference dividend - - - - -Dividend tax 79.73 101.72 81.60 72.38 68.17Retained earnings 2,020.70 1,650.79 1,680.62 1,249.83 869.13

Ratios

Jun ' 10 Jun ' 09 Jun ' 08 Jun ' 07 Jun ' 06Per share ratiosAdjusted EPS (Rs) 15.88 14.29 10.22 19.92 9.11Adjusted cash EPS (Rs) 19.64 17.56 12.91 24.21 11.23Reported EPS (Rs) 14.88 11.72 16.60 19.74 10.31Reported cash EPS (Rs) 18.64 14.99 19.29 24.03 12.43Dividend per share 7.00 9.00 8.00 16.00 16.00

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Jun ' 10 Jun ' 09 Jun ' 08 Jun ' 07 Jun ' 06Operating profit per share (Rs) 20.73 18.41 14.12 25.04 11.17Book value (excl rev res) per share (Rs) - 48.22 51.61 79.64 89.59Book value (incl rev res) per share (Rs.) - 48.22 51.61 79.64 89.59


Net profit margin (%) 20.63 16.68 29.11 21.00 22.36Adjusted cash margin (%) 27.23 25.01 22.63 25.76 24.33Adjusted return on net worth (%) 30.52 29.64 19.80 25.01 10.16Reported return on net worth (%) 28.59 24.29 32.16 24.78 11.51Return on long term funds (%) 35.89 33.10 22.35 26.16 10.63

Leverage ratiosLong term debt / Equity 0.03 0.01 0.01 0.01 0.03Total debt/equity 0.14 0.01 0.01 0.01 0.03Owners fund as % of total source 87.16 99.21 98.82 99.48 96.72Fixed assets turnover ratio 2.73 3.27 3.13 3.31 2.53Liquidity ratiosCurrent ratio 1.83 1.12 1.41 0.99 0.81Current ratio (inc. st loans) 1.59 1.12 1.41 0.99 0.81Quick ratio 1.71 1.06 1.39 0.97 0.80Inventory turnover ratio 53.73 - - - -Payout ratiosDividend payout ratio (net profit) 55.08 89.70 55.10 92.18 173.08Dividend payout ratio (cash profit) 43.97 70.13 47.43 75.71 143.61Earning retention ratio 48.40 26.48 10.51 8.66 -96.00Cash earnings retention ratio 58.27 40.16 29.13 24.85 -59.04Coverage ratiosAdjusted cash flow time total debt 0.39 0.02 0.04 0.01 0.26Financial charges coverage ratio 43.80 51.74 46.27 45.83 32.99Fin. charges cov.ratio (post tax) 36.34 41.05 63.14 44.64 35.27

Component ratiosMaterial cost component (% earnings) - - - - -Selling cost Component 0.31 0.64 0.47 0.36 1.44Exports as percent of total sales 97.80 98.49 98.87 98.72 98.69Import comp. in raw mat. consumed - - - - -Long term assets / total Assets 0.25 0.49 0.57 0.68 0.84Bonus component in equity capital (%) 60.93 61.29 61.54 25.66 26.00

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Infosys Technologies Ltd

Balance sheet-Rs in CrMar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Sources of fundsOwner's fundEquity share capital 286.00 286.00 286.00 138.00 135.29Share application money - - - - -Preference share capital - - - - -Reserves & surplus 17,523.00 13,204.00 10,876.00 6,759.00 5,106.44Loan fundsSecured loans - - - - -Unsecured loans - - - - -Total 17,809.00 13,490.00 11,162.00 6,897.00 5,241.73Uses of fundsFixed assetsGross block 5,986.00 4,508.00 3,889.00 2,837.00 2,182.72

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Other write offs - - - - -Adjusted PBT 7,086.00 5,095.00 4,089.00 2,801.00 2,175.57Tax charges 895.00 630.00 352.00 303.00 325.30Adjusted PAT 6,191.00 4,465.00 3,737.00 2,498.00 1,850.27

Non recurring items -372.00 5.00 46.00 -77.00 54.11Other non cash adjustments -1.00 - -5.00 - -4.59Reported net profit 5,818.00 4,470.00 3,778.00 2,421.00 1,899.79Earnigs before appropriation 12,460.00 9,314.00 5,973.00 3,849.00 1,970.30Equity dividend 1,345.00 1,902.00 649.00 1,238.00 309.80Preference dividend - - - - -Dividend tax 228.00 323.00 102.00 174.00 42.17Retained earnings 10,887.00 7,089.00 5,222.00 2,437.00 1,618.33

Ratios


Per share ratiosAdjusted EPS (Rs) 108.08 78.06 65.42 90.65 68.38

Adjusted cash EPS (Rs) 120.19 87.61 73.63 105.50 78.30Reported EPS (Rs) 101.58 78.15 66.23 87.86 70.38Reported cash EPS (Rs) 113.70 87.69 74.44 102.70 80.30Dividend per share 23.50 33.25 11.50 45.00 11.50Operating profit per share (Rs) 120.59 86.78 73.98 108.51 85.97Book value (excl rev res) per share (Rs) 27.51 25.96 29.13 26.56 28.91Book value (incl rev res) per share (Rs.) 27.51 25.96 29.13 26.56 28.91


Net profit margin (%) 27.52 27.37 28.05 26.17 27.28Adjusted cash margin (%) 32.57 30.69 31.19 31.43 30.35Adjusted return on net worth (%) 34.76 33.09 33.47 36.21 35.29Reported return on net worth (%) 32.67 33.13 33.89 35.10 36.33Return on long term funds (%) 39.80 37.77 36.64 40.62 41.52

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Leverage ratiosLong term debt / Equity - - - - -Total debt/equity - - - - -Owners fund as % of total source 100.00 100.00 100.00 100.00 100.00Fixed assets turnover ratio 3.39 3.47 3.38 3.18 3.20Liquidity ratiosCurrent ratio 4.71 3.30 4.96 2.75 2.80Current ratio (inc. st loans) 4.71 3.30 4.96 2.75 2.80Quick ratio 4.67 3.28 4.91 2.73 2.77Inventory turnover ratio - - - - -Payout ratiosDividend payout ratio (net profit) 27.03 49.77 19.85 58.32 18.48Dividend payout ratio (cash profit) 24.15 44.35 17.66 49.89 16.20

Earning retention ratio 74.60 50.17 79.91 43.48 80.98Cash earnings retention ratio 77.16 55.60 82.15 51.43 83.39Coverage ratiosAdjusted cash flow time total debt - - - - -Financial charges coverage ratio 3,891.00 5,642.00 4,559.00 3,211.00 2,243.01Fin. charges cov.ratio (post tax) 3,257.50 5,017.00 4,253.00 2,831.00 1,994.21Component ratiosMaterial cost component (% earnings) 0.09 0.11 0.16 0.17 0.19Selling cost Component 0.40 0.56 0.47 0.60 1.20

Exports as percent of total sales 97.88 92.59 92.44 95.86 88.99Import comp. in raw mat. consumed - - - - -Long term assets / total Assets 0.25 0.28 0.30 0.33 0.42Bonus component in equity capital (%) 93.58 93.58 93.58 93.65 95.53

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IQ Infotech Ltd



Sources of fundsOwner's fundEquity share capital 10.51 10.51 10.51 10.51 10.49Share application money - - - - -Preference share capital - - - - -Reserves & surplus 2.11 2.95 3.75 4.11 4.27Loan fundsSecured loans 2.29 1.56 1.89 2.01 1.28Unsecured loans 0.07 0.11 0.20 0.21 -Total 14.99 15.13 16.35 16.84 16.04Uses of fundsFixed assetsGross block 11.19 16.82 16.83 16.22 4.74Less : revaluation reserve - - - - -Less : accumulated depreciation 6.34 5.25 4.14 3.42 2.76

Net block 4.85 11.57 12.70 12.80 1.99Capital work-in-progress 5.61 - - - 11.11Investments 0.51 0.51 0.51 0.51 0.51Net current assets

Current assets, loans & advances 5.73 4.99 4.98 5.10 4.22Less : current liabilities & provisions 1.71 1.96 1.85 1.60 1.80Total net current assets 4.02 3.03 3.13 3.50 2.41Miscellaneous expenses not written 0.01 0.01 0.02 0.02 0.03Total 14.99 15.13 16.35 16.84 16.04Notes:Book value of unquoted investments 0.45 0.45 0.45 0.45 0.45

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Market value of quoted investments - - - - -Contingent liabilities 0.07 0.07 0.06 0.24 0.12




IncomeOperating income 1.87 1.91 2.29 1.91 1.61ExpensesMaterial consumed 0.51 1.21 0.95 0.91 0.54

Manufacturing expenses 0.05 0.21 0.06 0.04 0.01Personnel expenses 0.61 0.44 0.44 0.41 0.25Selling expenses 0.08 0.03 - - 0.09Adminstrative expenses 0.21 0.57 0.42 0.33 0.19Expenses capitalised - - - - -Cost of sales 1.46 2.46 1.86 1.69 1.08Operating profit 0.41 -0.55 0.43 0.23 0.52Other recurring income - 1.30 0.25 0.44 0.43Adjusted PBDIT 0.41 0.76 0.68 0.67 0.96Financial expenses 0.37 0.36 0.41 0.25 0.28Depreciation 1.08 1.12 0.72 0.66 0.66Other write offs 0.01 0.01 0.01 0.01 0.06Adjusted PBT -1.04 -0.73 -0.45 -0.26 -0.04Tax charges -0.21 0.06 -0.09 0.01 -Adjusted PAT -0.83 -0.79 -0.36 -0.27 -0.04

Non recurring items - - - - -Other non cash adjustments - -0.01 - - 0.09Reported net profit -0.83 -0.80 -0.36 -0.27 0.05Earnigs before appropriation -4.23 -3.39 -2.90 -2.63 -2.36Equity dividend - - - - -Preference dividend - - - - -Dividend tax - - - - -Retained earnings -4.23 -3.39 -2.90 -2.63 -2.36

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Ratios


Per share ratiosAdjusted EPS (Rs) -0.79 -0.75 -0.34 -0.25 -0.04Adjusted cash EPS (Rs) 0.24 0.32 0.34 0.37 0.62Reported EPS (Rs) -0.79 -0.76 -0.10 -0.25 0.04Reported cash EPS (Rs) 0.24 0.31 0.58 0.37 0.71Dividend per share - - - - -Operating profit per share (Rs) 0.39 -0.52 0.40 0.21 0.49Book value (excl rev res) per share (Rs) 12.06 12.85 13.60 13.71 13.84Book value (incl rev res) per share (Rs.) 12.06 12.85 13.60 13.71 13.84

Net operating income per share (Rs) 1.79 1.83 2.19 1.80 1.51Free reserves per share (Rs) -4.04 -3.25 -2.50 -2.41 3.92Profitability ratiosOperating margin (%) 21.95 -28.51 18.71 11.75 32.49Gross profit margin (%) -36.04 -86.91 -12.57 -22.87 -8.28

Net profit margin (%) -44.57 -24.78 -4.40 -11.47 2.43Adjusted cash margin (%) 13.68 10.46 14.19 16.91 32.76Adjusted return on net worth (%) -6.60 -5.85 -2.54 -1.85 -0.29Reported return on net worth (%) -6.60 -5.92 -0.78 -1.85 0.33Return on long term funds (%) -4.52 -2.42 -0.27 -0.01 1.51Leverage ratiosLong term debt / Equity 0.18 0.12 0.14 0.15 0.08Total debt/equity 0.18 0.12 0.14 0.15 0.08Owners fund as % of total source 84.24 88.98 87.18 86.84 92.02Fixed assets turnover ratio 0.16 0.11 0.13 0.11 0.33Liquidity ratiosCurrent ratio 3.35 2.55 2.69 3.19 2.34Current ratio (inc. st loans) 3.35 2.55 2.69 3.19 2.34Quick ratio 2.39 1.90 1.98 2.46 1.96

Inventory turnover ratio 1.24 1.72 1.96 1.79 2.35Payout ratiosDividend payout ratio (net profit) - - - - -Dividend payout ratio (cash profit) - - - - -Earning retention ratio - - - - 100.00Cash earnings retention ratio 100.00 100.00 100.00 100.00 100.00Coverage ratios

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Equity share capital 168.31 168.23 111.60 111.51 111.51Share application money - - - - 18.14Preference share capital - - - - -Reserves & surplus 1,515.07 1,801.32 1,985.22 1,893.34 1,883.24Loan fundsSecured loans 1,487.53 1,612.50 1,725.02 1,646.54 1,603.79Unsecured loans 854.88 1,004.83 - 8.92 16.83Total 4,025.78 4,586.88 3,821.83 3,660.32 3,633.52Uses of fundsFixed assetsGross block 4,757.05 4,508.36 3,899.32 3,493.67 3,191.96Less : revaluation reserve - - - - -Less : accumulated depreciation 2,317.42 1,842.77 1,417.66 1,061.74 744.79

Net block 2,439.64 2,665.59 2,481.66 2,431.94 2,447.17Capital work-in-progress 167.15 172.09 286.78 127.94 41.84Investments 277.01 370.89 241.81 87.95 207.52Net current assetsCurrent assets, loans & advances 1,808.80 1,827.13 1,248.06 1,276.76 1,336.98Less : current liabilities & provisions 666.81 448.83 436.49 264.27 399.98Total net current assets 1,141.99 1,378.30 811.57 1,012.49 937.00Miscellaneous expenses not written - - - - -Total 4,025.78 4,586.88 3,821.83 3,660.32 3,633.52Notes:Book value of unquoted investments 277.01 370.89 241.81 87.95 207.52Market value of quoted investments - - - - -Contingent liabilities 743.92 642.60 425.67 179.44 160.62




IncomeOperating income 2,181.06 1,897.95 1,981.18 1,663.66 1,280.30Expenses

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Free reserves per share (Rs) 88.94 106.00 176.26 168.16 168.88Profitability ratiosOperating margin (%) 14.19 21.94 26.53 21.21 25.55Gross profit margin (%) -8.60 -0.79 8.47 2.17 3.52

Net profit margin (%) -6.75 -4.02 5.46 0.27 4.58Adjusted cash margin (%) 7.41 15.07 20.89 18.29 24.85Adjusted return on net worth (%) -19.69 -6.92 2.95 -0.13 2.37Reported return on net worth (%) -8.96 -4.00 5.23 0.23 3.04Return on long term funds (%) -4.30 1.15 5.77 2.76 2.79Leverage ratiosLong term debt / Equity 0.84 0.96 0.62 0.61 0.62Total debt/equity 1.39 1.33 0.82 0.82 0.81Owners fund as % of total source 41.81 42.93 54.86 54.77 55.17

Fixed assets turnover ratio 0.48 0.43 0.51 0.47 0.40Liquidity ratiosCurrent ratio 2.71 4.07 2.86 4.83 3.34Current ratio (inc. st loans) 0.84 1.25 0.97 1.14 1.18Quick ratio 1.77 2.69 1.62 3.14 2.18Inventory turnover ratio 4.36 3.84 4.62 4.51 4.63Payout ratiosDividend payout ratio (net profit) - - 17.83 272.50 20.93Dividend payout ratio (cash profit) 3.41 5.58 4.18 3.95 3.70Earning retention ratio - - 68.42 569.42 73.18Cash earnings retention ratio 92.87 93.33 95.34 95.96 96.15Coverage ratiosAdjusted cash flow time total debt 14.14 8.86 4.11 5.27 4.92Financial charges coverage ratio 1.77 2.66 4.45 4.34 5.06Fin. charges cov.ratio (post tax) 2.69 2.97 4.76 4.44 5.66Component ratiosMaterial cost component (% earnings) 56.66 56.43 54.25 62.57 60.12Selling cost Component 1.84 2.55 3.02 2.90 3.04Exports as percent of total sales 60.80 70.82 80.30 84.72 78.41

Import comp. in raw mat. consumed 75.34 70.10 64.37 81.56 71.94Long term assets / total Assets 0.59 0.62 0.70 0.67 0.66Bonus component in equity capital (%) 33.33 33.33 43.37 43.40 43.40

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Polaris Software Lab Ltd



Sources of fundsOwner's fundEquity share capital 49.34 49.34 49.29 49.12 49.01Share application money - - - - -Preference share capital - - - - -Reserves & surplus 644.68 551.97 520.56 482.15 480.35Loan fundsSecured loans 0.36 0.83 1.29 - -Unsecured loans - - - - -Total 694.37 602.13 571.14 531.26 529.36

Uses of fundsFixed assetsGross block 162.66 178.52 377.07 364.86 311.16Less : revaluation reserve - - - - -Less : accumulated depreciation - - 205.47 166.95 124.09

Net block 162.66 178.52 171.60 197.90 187.08Capital work-in-progress 1.14 4.93 28.43 22.17 18.37

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Investments 321.68 169.29 107.88 79.04 110.69Net current assetsCurrent assets, loans & advances 421.32 392.36 399.32 337.15 306.46Less : current liabilities & provisions 212.43 142.97 136.09 105.00 93.24Total net current assets 208.89 249.38 263.23 232.15 213.22Miscellaneous expenses not written - - - - -Total 694.37 602.13 571.14 531.26 529.36Notes:Book value of unquoted investments 87.03 - 83.68 58.85 54.33Market value of quoted investments 234.66 - 24.25 20.20 56.36Contingent liabilities 19.80 23.76 22.74 19.54 18.92




IncomeOperating income 1,171.34 938.02 904.30 683.94 668.97ExpensesMaterial consumed - - - - -Manufacturing expenses 49.99 58.90 645.26 493.49 434.39Personnel expenses 831.45 713.39 62.54 68.30 77.81Selling expenses - - 5.74 4.31 6.99Adminstrative expenses 84.34 80.57 57.60 54.29 66.89Expenses capitalised - - - - -Cost of sales 965.79 852.87 771.13 620.40 586.08Operating profit 205.56 85.15 133.17 63.54 82.88Other recurring income 30.57 19.62 3.67 3.05 10.48Adjusted PBDIT 236.13 104.78 136.84 66.59 93.36

Financial expenses 0.55 0.60 0.57 0.55 0.82Depreciation 42.70 39.07 43.30 46.44 38.40Other write offs - - - - -Adjusted PBT 192.88 65.10 92.97 19.60 54.14Tax charges 15.03 11.44 14.26 7.10 6.28Adjusted PAT 177.85 53.66 78.71 12.50 47.86

Non recurring items -66.66 -1.03 0.88 0.79 5.57

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Other non cash adjustments - - - - -Reported net profit 111.19 52.63 79.59 13.30 53.43Earnigs before appropriation 333.57 244.97 225.58 161.32 172.98Equity dividend 27.14 14.80 22.18 12.28 17.15Preference dividend - - - - -Dividend tax 4.61 2.51 3.11 1.72 2.45Retained earnings 301.83 227.65 200.29 147.32 153.37

Ratios


Per share ratiosAdjusted EPS (Rs) 18.02 5.44 7.98 1.27 4.88Adjusted cash EPS (Rs) 22.35 9.40 12.38 6.00 8.80Reported EPS (Rs) 11.27 5.33 8.07 1.35 5.45Reported cash EPS (Rs) 15.60 9.29 12.47 6.08 9.37

Dividend per share 2.75 1.50 2.25 1.25 1.75Operating profit per share (Rs) 20.83 8.63 13.51 6.47 8.46Book value (excl rev res) per share (Rs) 7.76 60.94 57.80 54.08 54.01Book value (incl rev res) per share (Rs.) 7.77 60.94 57.80 54.08 54.01


Net profit margin (%) 9.25 5.49 8.76 1.93 7.86Adjusted cash margin (%) 18.34 9.68 13.43 8.57 12.69Adjusted return on net worth (%) 25.62 8.92 13.81 2.35 9.04Reported return on net worth (%) 16.02 8.75 13.96 2.50 10.09Return on long term funds (%) 27.85 10.91 16.37 3.79 10.38Leverage ratiosLong term debt / Equity - - - - -

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Total debt/equity - - - - -Owners fund as % of total source 99.94 99.86 99.77 100.00 100.00Fixed assets turnover ratio 7.20 5.25 2.84 2.23 2.65Liquidity ratiosCurrent ratio 1.98 2.74 2.93 3.21 3.29Current ratio (inc. st loans) 1.98 2.74 2.93 3.21 3.29Quick ratio 1.98 2.74 2.93 3.19 3.29Inventory turnover ratio - - - - -Payout ratiosDividend payout ratio (net profit) 28.55 32.89 31.76 105.30 36.69Dividend payout ratio (cash profit) 20.63 18.88 20.57 23.43 21.34Earning retention ratio 82.15 67.73 67.88 -11.97 59.04Cash earnings retention ratio 85.61 81.33 79.28 76.25 77.28

Coverage ratiosAdjusted cash flow time total debt - 0.01 0.01 - -Financial charges coverage ratio 427.07 173.70 241.42 121.25 114.51Fin. charges cov.ratio (post tax) 279.33 153.03 217.81 109.77 113.63Component ratiosMaterial cost component (% earnings) - - - - -Selling cost Component - - 0.63 0.63 1.04Exports as percent of total sales - - 90.45 88.17 86.97Import comp. in raw mat. consumed - - - - -Long term assets / total Assets 0.53 0.47 0.38 0.41 0.45Bonus component in equity capital (%) 17.29 17.29 17.30 17.37 17.40

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Satyam Computer Services Ltd

Balance sheet Rs in CrMar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Sources of fundsOwner's fundEquity share capital 134.10 133.44 64.89 63.85 63.25Share application money 1.83 7.85 1.78 0.45 0.19Preference share capital - - - - -Reserves & surplus 7,221.71 5,648.07 4,268.75 3,153.17 2,517.52Loan fundsSecured loans 23.67 13.79 12.57 9.87 7.30Unsecured loans - - - - -Total 7,381.31 5,803.15 4,347.99 3,227.34 2,588.25Uses of fundsFixed assetsGross block 1,486.53 1,280.40 1,153.16 937.70 847.16Less : revaluation reserve - - - - -Less : accumulated depreciation 1,062.04 930.45 803.74 685.41 597.76

Net block 424.49 349.95 349.42 252.29 249.40

Capital work-in-progress 458.63 290.05 76.84 64.68 22.17Investments 493.80 201.15 155.74 78.48 74.75Net current assetsCurrent assets, loans & advances 7,451.13 6,003.75 4,473.26 3,283.53 2,595.51Less : current liabilities & provisions 1,446.74 1,041.75 707.27 451.64 353.59Total net current assets 6,004.39 4,962.00 3,765.99 2,831.89 2,241.92Miscellaneous expenses not written - - - - -Total 7,381.31 5,803.15 4,347.99 3,227.34 2,588.25Notes:Book value of unquoted investments 493.80 201.15 155.74 78.48 74.75Market value of quoted investments - - - - 1.00Contingent liabilities 623.28 267.20 134.45 38.22 8.68


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IncomeOperating income 8,137.28 6,228.47 4,634.31 3,464.23 2,541.55ExpensesMaterial consumed - - - - -Manufacturing expenses 83.79 69.35 58.21 60.17 40.96Personnel expenses 4,964.84 3,692.92 2,702.24 1,999.10 1,338.84Selling expenses 87.51 62.87 67.07 58.33 51.76Adminstrative expenses 1,170.83 873.42 612.45 456.35 416.19Expenses capitalised - - - - -

Cost of sales 6,306.97 4,698.56 3,439.97 2,573.96 1,847.75Operating profit 1,830.31 1,529.91 1,194.34 890.27 693.80Other recurring income 277.87 168.07 117.26 101.82 93.88Adjusted PBDIT 2,108.18 1,697.98 1,311.60 992.09 787.68Financial expenses 5.94 7.61 2.72 0.76 0.75Depreciation 137.94 129.89 122.81 103.94 111.62Other write offs - - - - -Adjusted PBT 1,964.30 1,560.48 1,186.07 887.39 675.31Tax charges 226.12 150.00 206.14 116.74 106.15Adjusted PAT 1,738.18 1,410.48 979.93 770.65 569.16

Non recurring items -22.44 12.75 259.82 -20.86 -15.27Other non cash adjustments - - - 0.47 1.90Reported net profit 1,715.74 1,423.23 1,239.75 750.26 555.79Earnigs before appropriation 5,564.06 4,260.04 3,222.39 2,238.23 1,690.93Equity dividend 234.89 231.85 229.56 159.63 126.72Preference dividend - - - - -Dividend tax 39.86 37.55 32.02 20.86 16.24Retained earnings 5,289.31 3,990.64 2,960.81 2,057.74 1,547.97

Ratios

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Per share ratiosAdjusted EPS (Rs) 25.92 21.14 30.20 24.14 18.00Adjusted cash EPS (Rs) 27.98 23.09 33.99 27.39 21.53Reported EPS (Rs) 25.59 21.33 38.21 23.50 17.57Reported cash EPS (Rs) 27.65 23.28 42.00 26.76 21.10Dividend per share 3.50 3.50 7.00 5.00 4.00Operating profit per share (Rs) 27.30 22.93 36.81 27.88 21.94Book value (excl rev res) per share (Rs) 109.71 86.65 133.57 100.76 81.60Book value (incl rev res) per share (Rs.) 109.71 86.65 133.57 100.76 81.60

Net operating income per share (Rs) 121.37 93.35 142.84 108.51 80.36Free reserves per share (Rs) 106.19 84.41 131.55 98.74 79.58Profitability ratiosOperating margin (%) 22.49 24.56 25.77 25.69 27.29

Gross profit margin (%) 20.79 22.47 23.12 22.69 22.90 Net profit margin (%) 20.38 22.24 26.09 21.03 21.08Adjusted cash margin (%) 22.29 24.08 23.20 24.52 25.83Adjusted return on net worth (%) 23.63 24.39 22.61 23.95 22.05Reported return on net worth (%) 23.32 24.61 28.60 23.32 21.53Return on long term funds (%) 26.69 27.05 27.35 27.52 26.12Leverage ratiosLong term debt / Equity - - - - -Total debt/equity - - - - -Owners fund as % of total source 99.67 99.76 99.71 99.69 99.71Fixed assets turnover ratio 5.47 4.86 4.02 3.69 3.03Liquidity ratiosCurrent ratio 5.15 5.76 6.32 7.27 7.34Current ratio (inc. st loans) 5.15 5.76 6.32 7.27 7.34Quick ratio 5.09 5.70 6.32 7.25 7.33Inventory turnover ratio - - - - -Payout ratiosDividend payout ratio (net profit) 16.01 18.92 21.09 24.05 25.72Dividend payout ratio (cash profit) 14.82 17.34 19.19 21.12 21.41

Earning retention ratio 84.20 80.91 73.31 76.58 74.89Cash earnings retention ratio 85.36 82.52 76.28 79.37 79.01Coverage ratiosAdjusted cash flow time total debt 0.01 0.01 0.01 0.01 0.01Financial charges coverage ratio 354.91 223.12 482.21 1,310.04 1,051.92Fin. charges cov.ratio (post tax) 313.07 205.09 501.94 1,128.96 892.30Component ratios

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Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Material cost component (% earnings) - - - - -Selling cost Component 1.07 1.00 1.44 1.68 2.03Exports as percent of total sales 80.31 75.91 83.19 87.53 90.24Import comp. in raw mat. consumed - - - - -Long term assets / total Assets 0.15 0.12 0.11 0.10 0.11Bonus component in equity capital (%) 69.84 70.18 43.33 44.03 44.45

TATA Consultancy Services Ltd

Balance sheet Rs in Cr


Sources of funds

Owner's fundEquity share capital 97.86 97.86 97.86 48.93 48.01Share application money - - - - -Preference share capital 100.00 100.00 - - -Reserves & surplus 13,248.39 10,806.95 7,961.13 5,560.40 3,273.04Loan fundsSecured loans 32.63 9.27 41.76 26.52 111.01

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Cost of sales 16,381.09 13,508.11 10,638.49 7,893.09 5,642.65Operating profit 6,020.83 5,025.61 4,301.48 3,337.41 2,408.45Other recurring income 232.62 165.01 86.38 64.55 39.47Adjusted PBDIT 6,253.45 5,190.62 4,387.86 3,401.96 2,447.92Financial expenses 7.44 3.42 3.43 4.49 10.40Depreciation 417.46 458.78 343.41 257.38 133.22Other write offs - - - - -Adjusted PBT 5,828.55 4,728.42 4,041.02 3,140.09 2,304.30Tax charges 443.48 457.58 410.80 319.45 280.76Adjusted PAT 5,385.07 4,270.84 3,630.22 2,820.64 2,023.54

Non recurring items -688.86 275.44 129.66 -65.74 -192.12Other non cash adjustments - -37.52 -2.59 -38.03 -Reported net profit 4,696.21 4,508.76 3,757.29 2,716.87 1,831.42

Earnigs before appropriation 12,071.10 9,428.75 6,590.59 3,858.50 1,832.06Equity dividend 1,370.05 1,370.05 1,125.39 660.56 552.13Preference dividend 7.00 0.08 - - -Dividend tax 234.02 232.85 169.48 92.64 74.46Retained earnings 10,460.03 7,825.77 5,295.72 3,105.30 1,205.47

Ratios

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Per share ratiosAdjusted EPS (Rs) 54.96 43.64 37.10 57.65 42.15Adjusted cash EPS (Rs) 59.22 48.33 40.60 62.91 44.92Reported EPS (Rs) 47.92 46.07 38.39 55.52 38.15Reported cash EPS (Rs) 52.18 50.76 41.90 60.79 40.92Dividend per share 14.00 14.00 11.50 13.50 11.50Operating profit per share (Rs) 61.52 51.35 43.95 68.21 50.16Book value (excl rev res) per share (Rs) 136.38 111.43 82.35 114.64 69.17Book value (incl rev res) per share (Rs.) 136.38 111.43 82.35 114.64 69.17


Net profit margin (%) 20.74 24.11 25.00 24.05 22.63

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Adjusted cash margin (%) 25.63 25.29 26.44 27.25 26.65Adjusted return on net worth (%) 40.29 39.16 45.04 50.28 60.93Reported return on net worth (%) 35.13 41.34 46.62 48.43 55.14Return on long term funds (%) 43.27 42.96 50.12 55.97 69.49Leverage ratiosLong term debt / Equity 0.01 0.01 - - -Total debt/equity 0.01 0.01 0.01 0.01 0.03Owners fund as % of total source 98.95 98.92 99.37 99.37 96.49Fixed assets turnover ratio 5.15 5.74 6.49 6.68 7.73Liquidity ratiosCurrent ratio 1.83 1.99 1.99 2.25 1.77Current ratio (inc. st loans) 1.83 1.98 1.93 2.19 1.51Quick ratio 1.83 1.97 1.98 2.22 1.77

Inventory turnover ratio 1,321.77 1,137.21 1,412.30 536.84 -Payout ratiosDividend payout ratio (net profit) 34.20 35.55 34.46 27.72 34.21Dividend payout ratio (cash profit) 31.41 32.26 31.57 25.32 31.89Earning retention ratio 70.18 62.47 64.34 73.30 69.04Cash earnings retention ratio 72.33 66.11 67.42 75.53 70.95Coverage ratiosAdjusted cash flow time total debt 0.01 - 0.01 0.01 0.05Financial charges coverage ratio 840.52 1,517.73 1,279.26 757.67 235.38Fin. charges cov.ratio (post tax) 688.32 1,453.50 1,196.54 663.42 189.91Component ratiosMaterial cost component (% earnings) 0.23 0.24 0.14 1.43 -Selling cost Component 0.09 0.14 0.20 0.10 0.10Exports as percent of total sales 93.01 90.51 92.38 90.17 92.97Import comp. in raw mat. consumed 79.74 80.43 70.79 80.37 -Long term assets / total Assets 0.50 0.49 0.50 0.45 0.51Bonus component in equity capital (%) 59.30 59.30 59.30 18.61 18.97

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Wipro Ltd

Balance sheet Rs in Cr

Profit loss account- Rs in Cr


Sources of fundsOwner's fundEquity share capital 293.00 292.30 291.80 285.15 140.71Share application money 1.50 58.00 3.50 7.49 1.21Preference share capital - - - - -Reserves & surplus 12,220.50 11,260.40 9,025.10 6,135.30 4,751.73Loan fundsSecured loans - 4.00 23.20 45.06 21.59Unsecured loans 5,013.90 3,818.40 214.80 5.10 40.50Total 17,528.90 15,433.10 9,558.40 6,478.10 4,955.74Uses of fundsFixed assetsGross block 3,179.60 2,282.20 1,645.90 2,364.53 1,763.49Less : revaluation reserve - - - - -Less : accumulated depreciation - - - 1,246.27 855.53

Net block 3,179.60 2,282.20 1,645.90 1,118.25 907.96

Capital work-in-progress 1,311.80 1,335.00 989.50 612.36 250.24Investments 6,884.50 4,500.10 4,348.70 3,459.20 2,859.51Net current assetsCurrent assets, loans & advances 13,576.10 12,058.10 6,338.40 4,076.68 2,672.86Less : current liabilities & provisions 7,423.10 4,742.30 3,764.10 2,788.39 1,734.83Total net current assets 6,153.00 7,315.80 2,574.30 1,288.29 938.03Miscellaneous expenses not written - - - - -Total 17,528.90 15,433.10 9,558.40 6,478.10 4,955.74Notes:Book value of unquoted investments 6,884.50 - 1,234.10 514.23 782.71Market value of quoted investments - - - 2,956.87 2,088.71Contingent liabilities 596.10 749.90 661.60 509.18 676.65


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IncomeOperating income 21,507.30 17,492.60 13,683.90 10,227.12 7,233.16Expenses

Material consumed 3,376.70 2,952.30 1,889.00 1,367.67 1,185.48Manufacturing expenses - 299.80 120.50 1,020.70 558.07Personnel expenses 9,242.20 7,409.10 5,768.20 4,279.03 2,878.53Selling expenses - 532.10 - 171.05 107.15Adminstrative expenses 4,129.60 2,583.70 2,651.70 904.78 685.80Expenses capitalised - - - - -37.12Cost of sales 16,748.50 13,777.00 10,429.40 7,743.22 5,377.92Operating profit 4,758.80 3,715.60 3,254.50 2,483.90 1,855.25Other recurring income -480.40 326.90 288.70 113.59 75.44Adjusted PBDIT 4,278.40 4,042.50 3,543.20 2,597.49 1,930.68

Financial expenses 196.80 116.80 7.20 3.13 5.57Depreciation 533.70 456.00 359.80 292.26 185.97Other write offs - - - - -Adjusted PBT 3,547.90 3,469.70 3,176.20 2,302.10 1,739.15Tax charges 574.10 406.40 334.10 286.10 255.15Adjusted PAT 2,973.80 3,063.30 2,842.10 2,016.00 1,484.00

Non recurring items - - - 38.33 17.88Other non cash adjustments - - - -33.85 -7.06Reported net profit 2,973.80 3,063.30 2,842.10 2,020.48 1,494.82Earnigs before appropriation 2,973.80 3,063.30 2,842.10 2,020.48 1,494.82Equity dividend 586.00 876.50 873.70 712.88 351.79Preference dividend - - - - -Dividend tax 99.60 148.90 126.80 99.98 49.34Retained earnings 2,288.20 2,037.90 1,841.60 1,207.62 1,093.70

RatiosMar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Per share ratiosAdjusted EPS (Rs) 20.30 20.96 19.48 14.14 21.09Adjusted cash EPS (Rs) 23.94 24.08 21.95 16.19 23.74Reported EPS (Rs) 20.30 20.96 19.48 14.17 21.25

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Reported cash EPS (Rs) 23.94 24.08 21.95 16.22 23.89Dividend per share 4.00 6.00 6.00 5.00 5.00Operating profit per share (Rs) 32.48 25.42 22.31 17.42 26.37Book value (excl rev res) per share (Rs) 85.42 79.05 63.86 45.03 69.54Book value (incl rev res) per share (Rs.) 85.42 79.05 63.86 45.03 69.54

Net operating income per share (Rs) 146.81 119.69 93.79 71.73 102.81Free reserves per share (Rs) - - - 42.65 66.69Profitability ratiosOperating margin (%) 22.12 21.24 23.78 24.28 25.64Gross profit margin (%) 19.64 18.63 21.15 21.42 23.07

Net profit margin (%) 14.14 17.19 20.34 19.53 20.45Adjusted cash margin (%) 16.68 19.74 22.91 22.32 22.84Adjusted return on net worth (%) 23.76 26.51 30.50 31.39 30.33

Reported return on net worth (%) 23.76 26.51 30.50 31.46 30.55Return on long term funds (%) 21.36 23.32 33.31 35.87 35.61Leverage ratiosLong term debt / Equity 0.40 0.33 0.02 - -Total debt/equity 0.40 0.33 0.02 0.01 0.01Owners fund as % of total source 71.39 75.13 97.50 99.22 98.74Fixed assets turnover ratio 6.86 7.81 8.31 4.35 4.14Liquidity ratiosCurrent ratio 1.83 2.54 1.68 1.46 1.54Current ratio (inc. st loans) 1.83 2.54 1.68 1.42 1.47Quick ratio 1.76 2.44 1.61 1.40 1.45Inventory turnover ratio 47.02 39.41 57.23 78.23 58.05Payout ratiosDividend payout ratio (net profit) 23.05 33.47 35.20 40.23 26.83Dividend payout ratio (cash profit) 19.54 29.13 31.24 35.14 23.86Earning retention ratio 76.95 66.53 64.80 59.68 72.98Cash earnings retention ratio 80.46 70.87 68.76 64.79 75.99Coverage ratiosAdjusted cash flow time total debt 1.43 1.09 0.07 0.02 0.03

Financial charges coverage ratio 21.74 34.61 492.11 829.08 346.75Fin. charges cov.ratio (post tax) 18.82 31.13 445.71 739.19 302.87Component ratiosMaterial cost component (% earnings) 15.63 17.94 14.43 13.60 16.51Selling cost Component - 3.04 - 1.67 1.48Exports as percent of total sales - - - 69.25 74.29Import comp. in raw mat. consumed - - - 62.12 51.39

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Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Long term assets / total Assets 0.45 0.40 0.52 0.55 0.59Bonus component in equity capital (%) 95.45 95.68 95.84 98.08 98.43

7 LIMITATIONS

Some of the limitations of the financial statements are as follows:

As the historical costs and money measurement concepts govern thepreparation of the balance sheet and income statements, hence thesefinancial statements are essentially statements reflecting historical facts . Itignore inflationary trend and does not reflect the true current worth of theenterprise,

Certain important qualitative elements are omitted from the financialstatements because they are incapable of being measured in monetaryterms like the quality and reputation of the management team, employeeand other,

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There are still items in the assets side of the balance sheet which has no realvalue and are merely deferred charges to future incomes like preliminary /pre-incorporation expenses and other.

There are still the following issues or challenges in preparing the financialstatements which may amount to overstatement of the accounting profitof an entity:

When to and how much to recognize revenue in the Income statement,

The constant challenge of when to expense or to capitalize the expenses . It isimportant to determine definitely what is revenue expenditure and capitalexpenditure otherwise the accounting profit will be overstated orunderstated - for example, capitalization of borrowing costs,etc

Method of depreciations and the rates to depreciate into the income statement areselected by management to suit their business needs. Are the rates

intentionally been made lower or the depreciation rates are higher toaccelerate the depreciation of the fixed assets,

Adequacy of provisions and method of providing for doubtful debts. Are the tradedebtors recoverable and to what extent the accounting method for provisionfor doubtful debts shows the realistic picture,

Basis of valuation of assets- when can costs change to reflect current values?Using replacement or current costs?

Consolidation challenges -what to eliminates to reflects the overall group performance.Some items might be omitted to show a higher accounting profits

8. FINDINGS AND SUGGESTIONS:

8.1 Aptech Ltd:

Adjusted EPS of Aptech Ltd slowly increased and reached at

2.29. Compare with Gross profit Margin % Net profit Margin %

(4.15) is good position at Dec 2009. Total Debt Equity Ratio

comes down from 0.23 to 0.11.Current Ratio comes up from

1.32 to 2.86. Over all company position is good.

8.2 Financial Technologies (India) Ltd:

There is a fluctuation in Adjusted EPS for Financial Technologies

(India) Ltd during 2006 to 2010. Gross Profit and Net profit

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Margin % are increased well. Total Debt Equity Ratio reached

0.26 at 2010. Current ratio comes up from 1.64 to 3.21. Over all

company financial position is better.

8.3 HCL Technologies Ltd:Adjusted EPS of HCL Technologies Ltd stood Rs. 15.88 at 2010.

There is a fluctuation in Gross Profit and Net Profit Margin %. But

they showed 24.33 % and 20.63 % respectively at 2010. Total

Debt Equity Ratio comes up from 0.03 to 0.14. Current Ratio

showed good position compare with 2006. Over all company

position is excellent.

8.4 Infosys Technologies Ltd:

Adjusted EPS of Infosys Technologies Ltd showed Rs. 108.08

compare with Rs. 68.38 at 2006. Gross Profit and Net Profit

Margin % are 30.66 & 27.52. There is steady increase in year by

year. Current Ratio is 4.71 compare with 2.80 at 2006. Over all

company performance reached outstanding position in recent

years.

8.5 IQ Infotech Ltd:

Adjusted EPS of IQ Infotech Ltd showed Negative. Gross Profit

and Net Profit Margin % also showed Negative. Total Debt Equity

Ratio is 0.18 at 2010. Current Ratio comes up 3.35 from 2.34.

Over all company is position is not good.

8.6 Moser Baer India Ltd:

Adjusted EPS of Moser Baer India Ltd showed Negative. Gross

Profit and Net Profit Margin % also showed Negative. Total Debt

Equity Ratio is 1.39 at 2010. Current Ratio comes down to 2.71

from 3.34. Over all company position is not good.

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8.7 Polaris Software Lab Ltd:

Adjusted EPS of Polaris Software Lab Ltd comes up to 18.02 from

4.88. Gross Profit and Net Profit Margin % showed 13.90 & 9.25

respectively at 2010. Current ratio comes down to 1.98 at 2010.Over all company position is not bad.

8.8 Satyam Computer Services Ltd:

Adjusted EPS of Satyam computer Services Ltd showed Rs 25.92

at 2009.Gross Profit and Net Profit Margin % decreased at 2009.

Current ratio comes down at 5.15 from 7.34. Over all company

position went to bad position.

8.9 TATA Consultancy Services Ltd:

Adjusted EPS of TCS showed Rs 54.96 at 2010. Gross Profit and

Net Profit Margin % looked 25.01 & 20.74 at 2010. There is no

change in Total Debt Equity Ratio for the past Four years.

Current ratio comes up to 1.83 from 1.77. Over all company

position is good.

8.10 Wipro Ltd:

Adjusted EPS of Wipro Ltd is Rs. 20.30 at 2010. Gross profit and

Net profit Margin % decreased. Total Debt Equity ratio showed

0.40 at 2010. Current ratio comes up to 1.83 from 1.54. Over all

company position is good.

Overall IT companies Financial Position:

After analyzing the financial reports of10 IT companies showed

the performance of their financial condition for the past 5 five

years. It is clearly demonstrated the effectiveness of recession.

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But they are retrieved slowly from the recession. Compare with

other service sectors Information Technology stood at good

position now.

9 REFERENCES

A. Management Accounting and Financial Control Dr S.N.Maheshwari

Published by Sultan Chan New Delhi

B. Statistical Method SP Gupta Published by Sultan Chan NewDelhi

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An Analysis of IT Companies Before During and After Recession

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