1 CMC - 1-11 · CMC Limited Thirty sixth annual report 2011 - 2012 Annual General Meeting will be held on Wednesday, June 27, 2012 at CMC's Auditorium at its Registered Office, CMC

1

ContentsCorporate Information 2

Notice 3

Directors' Report 6

Management Discussion and Analysis 15

Corporate Governance Report 30

Certificate on Corporate Governance 46

Secretarial Audit Report 47

Consolidated Financial Statements

Auditors' Report 49

Consolidated Balance Sheet 50

Consolidated Statement of Profit and Loss 51

Consolidated Cash Flow Statement 52

Notes on Consolidated Financial Statements 54

Standalone Financial Statements

Auditors’ Report 78

Standalone Balance Sheet 82

Standalone Statement of Profit and Loss 83

Standalone Cash Flow Statement 84

Notes on Standalone Financial Statements 86

CMC Limited Thirty sixth annual report 2011 - 2012

Annual General Meeting will be held on Wednesday, June 27, 2012 at CMC's Auditorium at its Registered Office, CMCCentre, Old Mumbai Highway, Gachibowli, Hyderabad-500 032, Andhra Pradesh at 3 p.m. As a measure of economy, copiesof the Annual Report will not be distributed at the Annual General Meeting. Members are requested to kindly bring theircopies to the meeting.

Visit us at www.cmcltd.com

1 CMC - 1-11.p65 2012/06/01, 08:18 AM1

CMC Limited

Thirty sixth annual report 2011 - 2012

2

Board of DirectorsMr S Ramadorai (Chairman)Mr R Ramanan (Managing Director & CEO)Dr KRS MurthyMr Surendra SinghMs Kalpana MorpariaMr S MahalingamMr Sudhakar Rao

Board Committees

Audit CommitteeDr KRS MurthyMr Surendra SinghMr Sudhakar Rao

Shareholders/Investors Grievance CommitteeMr Surendra SinghMr R RamananDr KRS Murthy

Governance CommitteeDr KRS MurthyMr S RamadoraiMr Surendra SinghMs Kalpana MorpariaMr S Mahalingam

Executive CommitteeMr S RamadoraiMr R RamananDr KRS MurthyMr Surendra SinghMs Kalpana MorpariaMr S Mahalingam

Ethics & Compliance CommitteeMr Surendra SinghMr R RamananMr Vivek Agarwal

Management TeamMr R Ramanan (Managing Director & CEO)Mr J K Gupta (CFO)Mr Vivek Agarwal (Company Secretary)Mr Avadhesh Dixit (Head - HR)

Statutory AuditorsM/s Deloitte Haskins & SellsChartered Accountants

Secretarial AuditorsM/s Chandrasekaran AssociatesCompany Secretaries

Internal AuditorsM/s Ernst & Young Pvt. Ltd.

Principal BankersCanara BankState Bank of Bikaner & JaipurICICI Bank

Registrars & Share Transfer AgentsM/s Karvy Computershare Private LimitedPlot No. 17 to 24, Vittalrao NagarMadhapur, Hyderabad - 500 081

Stock Exchanges where Company'sSecurities are listedBombay Stock Exchange Limited (BSE)National Stock Exchange of India Limited (NSE)The Calcutta Stock Exchange Limited (CSE)

Registered OfficeCMC CentreOld Mumbai HighwayGachibowli, Hyderabad-500032Tel. : 91 40 6657 8000 (10 lines)Fax : 91 40 2300 0509

Corporate OfficePTI Building, 5th Floor4, Sansad MargNew Delhi-110 001Tel. : 91 11 2373 6151-8 (8 lines)Fax : 91 11 2373 6159

CORPORATE INFORMATION

1 CMC - 1-11.p65 2012/06/01, 08:18 AM2

3

NOTICE

Notice is hereby given that the 36th Annual General Meeting of the Members of CMC Limited will be held on Wednesday, 27 June, 2012 at3.00 p.m. at CMC's Auditorium, CMC Centre, Old Mumbai Highway, Gachibowli, Hyderabad-500 032, Andhra Pradesh, to transact the followingbusiness:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Profit and Loss Account for the year ended on 31 March, 2012 and the Balance Sheet as atthat date and the Reports of the Board of Directors and the Auditors thereon.

2. To declare a dividend for the financial year 2011-12 on equity shares.

3. To appoint a Director in place of Mr. S Mahalingam, who retires by rotation and, being eligible, offers himself for re-appointment.

4. To consider and if thought fit to pass with or without modification the following Resolution as an Ordinary Resolution:

"RESOLVED THAT Dr. KRS Murthy, a Director liable to retire by rotation, who does not seek re-election, be not re-appointed a Directorof the Company.”

"RESOLVED FURTHER THAT the vacancy, so created on the Board of Directors of the Company, be not filled.”

5. To appoint Statutory Auditors and to fix their remuneration.

SPECIAL BUSINESS:

6. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"RESOLVED THAT Mr. Sudhakar Rao be and is hereby appointed as Director of the Company liable to retire by rotation."

7. To consider and, if thought fit, to pass the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to the provisions of Section 309 and other applicable provisions, if any, of the Companies Act, 1956 (theAct) a sum not exceeding one per cent per annum of the net profits of the Company calculated in accordance with the provisions ofSections 198, 349 and 350 of the Act, be paid to and distributed amongst the Directors of the Company or some or any of them (otherthan the Managing Director and the Whole-time Directors, if any) in such amounts or proportions and in such manner and in allrespects as may be directed by the Board of Directors and such payments shall be made in respect of the profits of the Company foreach year of the period of five years commencing 1 April, 2012."

Notes:

1. A Member entitled to attend and vote is entitled to appoint a Proxy to attend and vote at the meeting instead of himself/herself and the Proxy need not be a Member of the Company. Proxies, in order to be effective, must be received at the Company'sRegistered Office not less than 48 hours before the meeting. Proxies submitted on behalf of limited companies, societies, etc., must besupported by appropriate resolutions/authority, as applicable.

2. The relevant details as required by Clause 49 of the Listing Agreements entered into with the Stock Exchanges, of persons seekingre-appointment/appointment as Directors under Item Nos. 3 and 6 of the Notice, are annexed hereto.

3. The relative explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 setting out the material facts in respect ofItem nos. 6 and 7 is annexed hereto.

4. Members who hold shares in dematerialised form are requested to bring their DP ID and Client ID numbers for easy identification ofattendance at the meeting.

5. The Register of Members and the Share Transfer Books of the Company will remain closed from Thursday, 21 June, 2012 to Wednesday,27 June, 2012 (both days inclusive).

6. The dividend as recommended by the Board of Directors, if declared at the Annual General Meeting, will be paid on or after 4 July, 2012but before 26 July, 2012.

1 CMC - 1-11.p65 2012/06/01, 08:18 AM3

CMC Limited


4

7. Members holding shares in electronic form are hereby informed that the bank particulars registered against their respective depositoryaccounts will be used by the Company for the payment of dividend. The Company or its Registrars cannot act on any request receiveddirectly from the Members holding shares in electronic form for any change in address, change of bank particulars or bank mandates.Such changes are to be advised only to the Depository Participant of the Members.

8. Members holding shares in physical form are requested to advise any change of address, bank details etc. immediately to the Company'sRegistrar and Share Transfer Agents, M/s Karvy Computershare Private Limited (RTA).

9. Pursuant to provisions of Section 205A(5) of the Companies Act, 1956, dividends which remain unpaid/unclaimed for a period of 7years from the date of transfer of the same to the Company's unpaid dividend account will be transferred to the Investor Educationand Protection Fund (IEP Fund) established by the Central Government. The following are the details of the dividends paid by theCompany and respective due dates for claim by the Shareholders:

Financial Year Date of Declaration of divided Last date for claim

2004-05 17-06-2005 16-06-2012

2005-06 27-06-2006 26-06-2013

2006-07 25-06-2007 24-06-2014

2007-08 24-06-2008 23-06-2015

2008-09 26-06-2009 25-06-2016

2009-10 29-06-2010 28-06-2017

2010-11 27-06-2011 26-06-2018

Further, the Company shall not be in a position to entertain the claims of Shareholders for the unclaimed dividends which have beentransferred to the credit of IEP Fund.

In view of the above, the Shareholders are advised to send all the un-encashed dividend warrants pertaining to the above years to ourRTA for revalidation or issuance of Demand Draft in lieu thereof and encash them before 'the due dates for transfer to the IEP Fund'.

10. Members desiring any information as regards the Annual Report are requested to write to the Company's Corporate Office at NewDelhi at least ten days before the date of the Annual General Meeting so that information can be made available at the meeting.

11. Members are requested to register their e-mail addresses through their Depository Participant where they are holding their DematAccounts for sending the future communications by e-mail. Members holding the shares in physical form may register their e-mailaddresses through the RTA, giving reference of their Folio Number.

By Order of the Board of Directors

New Delhi VIVEK AGARWAL30 April, 2012 Company Secretary

Registered Office:CMC CentreOld Mumbai Highway, GachibowliHyderabad-500 032 (A.P.)

1 CMC - 1-11.p65 2012/06/01, 08:18 AM4

5

Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956Item No. 6Appointment of Mr Sudhakar Rao as a DirectorMr Sudhakar Rao was appointed as an Additional Director pursuant to Articles 82 and 85 of the Articles of Association of the Company by the Board of

Directors at its meeting held on 11 July, 2011.

As per provisions of said Articles and Section 260 of the Companies Act, 1956, Mr Sudhakar Rao holds office up to the date of this Annual General Meeting.

The Company has received a notice along with the deposit of ` 500 from a Member signifying intention to propose the appointment of Mr Sudhakar Rao as

Director of the Company liable to retirement by rotation.

The Board of Directors is of the opinion that it would be in the interest of the Company to avail of Mr Sudhakar Rao's experience and his continuance will be

of benefit to the Company.

The resolution is accordingly recommended for the approval of the Members.

None of the Directors except Mr Sudhakar Rao is concerned or interested in the Resolution.

Item No. 7

Commission to Non-Executive DirectorsAs per the approval granted at the 32nd Annual General Meeting of the Company held on 24 June, 2008, Non-Executive Directors have been paid Commission

maximum upto 1% of the net profit of the Company computed in accordance with the provisions of the Section 309(4) of the Companies Act, 1956. The said

approval has expired on 31 March, 2012.

Taking into account the responsibilities of the Directors, it is proposed that the said commission be continued to be paid to the Non-Executive Directors

other than Managing Director or Whole Time Director, if any, for each of the five financial years of the Company commencing 01 April, 2012 as per the

recommendations of the Governance Committee and approval of the Board.

All the Directors of the Company except the Managing Director & CEO, are concerned or interested in the Resolution at Item no. 7 of the Notice to the extent

of the remuneration that may be received by them.

By Order of the Board of Directors

New Delhi VIVEK AGARWAL30 April, 2012 Company Secretary

DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE ANNUAL GENERAL MEETING(Pursuant to Clause 49 of the Listing Agreement)

Particulars

Date of Birth

Date of Appointment

Qualifications

Expertise in specificfunctional areas

Chairmanships/Directorships of otherCompanies (excludingforeign companies and

Section 25 companies)

Chairmanships /Memberships ofcommittees of other Publiccompanies (includes onlyAudit Committee andShareholders / InvestorsGrievance Committee

Number of Shares held inthe Company

Mr S Mahalingam

10.02.1948

14.01.2010

Chartered Accountant

Finance Management

Tata Consultancy Services Limited

AP Online Limited*

WTI Advanced Technology Limited

Tata Realty and Infrastructure Limited

Audit CommitteeTata Realty and Infrastructure Limited*

NIL

Mr Sudhakar Rao

03.09.1949

11.07.2011

Masters in Economics, I.A.S. Officer (Retd.)

Business and Finance Management

Indian Oil Corporation Limited

BSE Limited

BSE Institute Limited

L&T Infrastructure Development Projects Limited

Binani Industries Limited

Audit CommitteeIndian Oil Corporation Limited

BSE Limited

BSE Institute Limited

L&T Infrastructure Development Projects Ltd.

NIL

* Chairman

1 CMC - 1-11.p65 2012/06/01, 08:18 AM5

CMC Limited


6

1. FINANCIAL RESULTS

(` in Crore)

Particulars Standalone Consolidated

2011-12 2010-11 2011-12 2010-11

Income from Sales and Services 952.96 794.21 1466.96 1080.53

Other operating revenues 2.38 3.87 2.38 3.87

Other Income 44.39 11.79 17.46 11.80

Total Income 999.73 809.87 1486.80 1096.20

Operating Expenses 788.79 625.74 1245.01 873.69

Profit before Depreciation, Interest and Tax 210.94 184.13 241.79 222.51

Depreciation and amortisation 20.88 10.09 21.37 10.46

Interest 0.01 0.01 0.02 0.22

Profit before Tax 190.05 174.03 220.40 211.83

Provision for Taxation (incl. deferred Income Tax) 46.72 18.30 68.59 32.42

Profit After Tax 143.33 155.73 151.81 179.41

Add: Profit brought forward from previous year 525.07 420.12 582.07 453.44

Amount available for appropriations 668.40 575.85 733.88 632.85

Appropriations

Proposed Dividend 37.88 30.30 37.88 30.30

Tax on Proposed Dividend 6.14 4.91 6.14 4.91

Transfer to General Reserve 14.33 15.57 14.33 15.57

Balance carried to Balance Sheet 610.05 525.07 675.53 582.07

668.40 575.85 733.88 632.85

2. DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of ` 12.50 per share on

3,03,00,000 Equity Shares of ` 10 each of the Company for the financial year 2011-12.

3. TRANSFER TO RESERVES

The Company proposes to transfer ` 14.33 crore to the General Reserve out of amount available for

appropriation, and an amount of ` 610.05 crore is proposed to be retained in the Profit and Loss Account.

DIRECTORS’ REPORT

TO THE MEMBERS OF CMC LIMITED

Your Directors have pleasure in presenting the 36th Annual Report and the Audited Statement of Accounts

for the year ended 31 March, 2012.

1 CMC - 1-11.p65 2012/06/01, 07:31 PM6

7

4. OPERATING RESULTS & BUSINESS OPERATIONS

Your Company built-up on the momentum of growth achieved in the previous year and delivered a robust

growth of 36% in consolidated income from sales and services to ` 1466.96 crore in the year ending 31

March, 2012 compared to ` 1080.53 crore achieved in the previous year. The growth was broad based with

both domestic and international geographies contributing to growth. The domestic business grew by 21%

to ` 582.82 crore, while International business grew 48% to ` 884.14 crore. The wholly owned subsidiary of

your Company, CMC Americas, Inc. drove growth of international business with 48% increase in revenue in

dollar terms. The income from sales and services on standalone basis grew by 20% to ` 952.96 crore during

2011-12 compared to ` 794.21 crore in the previous year.

All the business segments of your Company contributed to growth. SI SBU delivered highest growth of 45%

followed by 27% by ITeS SBU, 24% by CS SBU and 9% by E&T SBU on a consolidated basis.

The Operating Profit (Earnings Before Interest, Tax and Depreciation) increased by 6.5% on a consolidated

basis to ` 224.33 crore compared to ` 210.71 crore in the previous year.

On a Standalone basis, the Company has recorded income from sales and services of ` 952.96 crore as

compared to ` 794.21 crore in the previous year registering a growth of 20% on yearly basis. The growth in

operating revenue has been contributed, 30% by ITeS SBU followed by 13% by SI SBU, 24% by CS SBU, 9% by

E&T SBU and 70% increase in rentals from SEZ Hyderabad over the previous financial year.

Your Company continued to focus in the areas aligned with the overall vision of being a leading Systems

Engineering and Integration Company. Key activities that received thrust during 2011-12 were delivery of

services around CMC's software assets, turnkey project implementatioin, ERP implementations and

development of portals to bring state government services to the doorstep of the citizen. Your Company

also focused product development capability including indigenously developed solutions involving complex

embedded hardware designs, software and firmware development.

5. SPECIAL ECONOMIC ZONE (SEZ)

Your Company had taken up setting up of an IT and ITeS Sector Specific Special Economic Zone (SEZ), named

Synergy Park, at its Campus at Gachibowli, Hyderabad. The project is being develped in 3 phases at total

estimated cost of ` 445 crore, and will have total capacity of around 12500 seats when completed. Phase I of

the project, consisting of Offshore Development Centre (ODC) 1, 2 & 3 was completed in 2008-09. In Phase II

of the project, ODC 5 with seating capacity of 3200 has become operational in April, 2011 and ODC 6 with

seating capacity of 2800 became operational in January, 2012. The work on Phase III of the project consisting

of Multi Level Car Parking and ODC 4 with seating capacity of around 3500 is in full swing. Your Company

has spent ` 227.63 crore on this project till 31 March, 2012. The Company has also set up another SEZ Unit in

Kolkata to cater the demand of international client and provide them business continuity solution.

6. CREDIT RATING

Your Directors have pleasure to inform that ICRA Limited has reaffirmed LAA+ rating of your Company for

long term exposure (both fund based as well as non fund based) for a total amount of ` 250 crore. ICRA has

also reaffirmed A1+ rating for short term debt instruments of the Company up to ` 100 crore. ICRA had

carried out a credit rating assessment of the Company both for short term and long term exposures in

1 CMC - 1-11.p65 2012/06/01, 08:18 AM7

CMC Limited


8

compliance with BASEL II norms implemented by Reserve Bank of India for all banking facilities. This enables

the Company to access banking services at low costs. This also reflects the improvement in margins, working

capital management and cash flows of the Company.

7. SUBSIDIARY COMPANIES

Your Company has two wholly owned subsidiary companies viz. CMC Americas, Inc. and CMC eBiz, Inc. in

USA. A statement containing brief financial details of the Subsidiary Companies for the year ended

31 March, 2012 is included in the notes on the consolidated financial statement. As required under the

Listing Agreements with the Stock Exchanges, the Company has prepared the Consolidated Financial

Statements of the Company and its Subsidiaries as per Accounting Standard (AS)-21 and form part of the

Annual Report and Accounts.

The Annual Accounts of the Subsidiary Companies and related detailed information will be made available

to the Shareholders of the Company seeking such information. The Annual Account of the Subsidiary

Companies are also kept for inspection by any investor at the Registered Office of your Company.

8. FIXED DEPOSIT

During the year, the Company has not accepted any fixed deposits under Section 58A of the Companies Act,

1956.

9. LISTING

The equity shares of the Company are listed with Bombay Stock Exchange, National Stock Exchange and

Calcutta Stock Exchange. There are no arrears on account of payment of listing fees to the Stock Exchanges.

10. DIRECTORS

Mr Sudhakar Rao was appointed as Additional Director on 11 July, 2011 and can hold office up to the date of

the ensuing Annual General Meeting. The Company has received a Notice under Section 257 of the Companies

Act, 1956 along with the requisite deposit, in respect of Mr Rao, proposing his appointment as a Director of

the Company.

Mr S Mahalingam, Director, retires by rotation and being eligible, has offered himself for re-appointment.

Dr KRS Murthy, Director, retires by rotation and holds office till the ensuing Annual General Meeting as he

has not offered himself for re-appointment. The Board record its appreciation of the contribution made by

Dr KRS Murthy as a Director.

11. BUSINESS EXCELLENCE AND QUALITY INITIATIVES

Your Company continues to strive towards maintaining sustainable growth through the philosophy of

business excellence using the Tata Business Excellence Model (TBEM). In the annual TBEM assessment that

your Company was subject to, the Company made remarkable progress moving into the league of "Serious

Adopters". Various process improvement initiatives to address the assessment findings are underway.

Executive Management continues to retain ownership of key areas such as leadership, strategic planning,

1 CMC - 1-11.p65 2012/06/01, 08:18 AM8

9

management of business ethics and corporate sustainability Management is driving a customer-focused

culture and customer-driven innovation is taking prominence in founding the product and service portfolios

that will drive future growth. The Education and Training division was certified under ISO 9001:2008.

Leadership development was identified as a key area of focus. Your Company was successfully assessed at

People Capability Maturity Model (CMM) Level 3. Recognizing that information security is key to Company

business, ISO 27001:2005 certification was acquired. Western Region and Eastern Region of your Company

together were successfully assessed for SEI CMMI Level 5 covering software solution and services.

12. CORPORATE SUSTAINABILITY INITIATIVE

12.1 Environment:

Your Company continues to focus on carbon footprint reduction with a carbon abatement program targeted

towards achieving appropriate energy star rating for its delivery centres. The Pune office of your Company is

now being considered for obtaining a Green ceritification from United States Green Building Council (USGBC).

All offices of your Company have adopted energy efficient devices and environment friendly practices,

including standard processes for waste management and recycling.

The western region of your Company CMC WR undertook a drive to ban usage of plastic in the organization.

Tree Plantation drive was conducted across CMC locations and awareness programmes were conducted by

Green Peace for a greener life at home, and at work, on water, waste transport, green buildings and other

good environmental practices.

12.2 Society:

Imparting of skill development training: Your Company continued its effort to impart skill development

training at Rajgurunagar, a small town in Pune which has been adpoted by your Company as part of the

initiative to support rural skill creation. An exhibition was organized for exhibiting re-cycled and handmade

articles like bags, jewellery, rugs, greeting cards etc. in Rajgurunagar benefitting women in the vicinity. Motor

training was provided and driving license was facilitated for the underprivileged persons thereby creating

employment opportunities. Your Company has partnered with Bombay Mothers & Children Welfare Society

(BMCWS) to help and educate the youth and ensure sustainable livelihood. Hardware and Networking

training were imparted to students recommended by BMCWS.

Affirmative Action: Inducting girl student belonging to SC/ST who would be given opportunity to work in

CMC projects. CMC employees volunteered services and time at Vatsalya Foundation, Mumbai - a pioneer

agency working with street children since 1982 through its multilevel approach on children in vulnerable

situations. It reaches out to the street children, child to child contact.

Give India Initiative: Your Company has partnered with Give India to enable a medium so that everyone

can make a difference individually. Give India is a non-profit organization dedicated to raising funds for

credible and effective NGOs in India. Through this voluntary programme, a monthly contribution as per

convenience is deducted directly from salary to a cause of choice.

1 CMC - 1-11.p65 2012/06/01, 08:18 AM9

CMC Limited


10

The Joy of Giving Week (JGW): JGW is a “festival of philanthropy” that aims to become a part of the Indian

ethos, with a week being celebrated every year covering Gandhi Jayanti by engaging people through “acts

of giving” - money, time resources and skills - spanning the corporate. Joy of giving week was celebrated

across CMC locations from 2nd October to 8th October 2011.

12.3 Culture:

"Sahapedia" - an online resource on Indian Art and Culture: As a step forward towards its continuous

endeavor of extending community services and enabling wider dissemination and preservation of Indian

art and cultural heritage, your Company has promoted a Society namely Sahapedia jointly with the Indian

Institute of Information Technology, Hyderabad and Stirring Action on Heritage and the Arts, Delhi (SAHA).

The Society has been registered with the prime objectives of creating a definitive, encyclopedic online

resource on Indian knowledge systems, heritage and the arts and to provide free access to India’s rich and

diverse culture systems through a participatory mode of content creation. Your Directors are of the firm

belief that this initiative will provide a unique window to the world on the richness of Indian culture and

heritage and also help in preserving many of the facets which are fast disappearing from the society at

large.

13. CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management

Discussion and Analysis, Corporate Governance as well as the Secretarial Auditors’ Certificate regarding

compliance of conditions of Corporate Governance form a part of the Annual Report. Your Company is also

following the Secretarial Standard norms issued by the Institute of Company Secretaries of India (ICSI).

Your Company has been conferred with Certificate of Recognition as one of the top Companies for adopting

excellent practices in Corporate Governance by The Institute of Company Secretaries of India (ICSI) at its

11th National Award for Excellence in Corporate Governance function held in December 2011. This award

has been conferred to CMC for the second consecutive year.

14. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under the Companies (Disclosure of particulars in the Report of Board of Directors)

Rules, 1988 in respect of energy conservation, technology absorption and foreign exchange earnings and

outgo is given in Annexure to this Report.

15. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors based on the

information and representations received from the operating management confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been

followed with no material departures;

1 CMC - 1-11.p65 2012/06/01, 08:18 AM10

11

ii) The Directors had selected such accounting policies and applied them consistently and made

judgments and estimates that are reasonable and prudent, so as to give a true and fair view of

the state of affairs of the Company as on 31 March, 2012 and of the profit of the Company for that

period;

iii) The Directors had taken proper and sufficient care to the best of their knowledge and ability for

the maintenance of adequate accounting records in accordance with the provisions of the

Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting

fraud and other irregularities; and

iv) The Directors had prepared the Annual Accounts on a 'going concern' basis.

16. AUDITORS

M/s Deloitte Haskins & Sells, the Statutory Auditors of the Company, hold office until the ensuing Annual

General Meeting. The said Auditors have furnished the Certificate of their eligibility for re-appointment under

the Companies Act, 1956.

17. PARTICULARS OF STAFF

The information required under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars

of Employees) Rules, 1975, is provided in an Annexure forming part of this Report. In terms of Section

219(1)(b)(iv) of the Act, the Reports and Accounts are being sent to the Shareholders excluding the aforesaid

Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

18. ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for their support and contribution

during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers

and bankers for the continued support given by them to the Company and their confidence reposed in the

management.

On behalf of the Board of Directors

Mumbai S RAMADORAI30 April, 2012 Chairman

1 CMC - 1-11.p65 2012/06/01, 08:18 AM11

CMC Limited


12

Annexure to the Directors’ Report

Particulars of Conservation of energy, Technology absorption and Foreign exchange earnings and outgo in terms of Section 217(1)(e)of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 forming partof the Directors' Report for the year ended 31March, 2012

A. CONSERVATION OF ENERGY

a. The operations of the Company being IT related require normal consumption of electricity. However, the Company is taking everynecessary step to reduce the consumption of energy.

b. Your Company is not an industry as listed in Schedule to Rule 2 of the Companies (Disclosure of Particulars in the Report of Boardof Directors) Rule, 1988.

B. TECHNOLOGY ABSORPTION

Efforts made in technology absorption – as per Form B given below:

FORM B

1. Research and Development (R&D)

a. Specific areas in which Research and Development (R&D) is being carried out by the Company

The Company continues to invest in innovating and developing state of the art technologies that are core to providing key solutionsin different industry verticals of interest. This includes critical investments in:

- Insurance technology & solutions- Biometrics technology- Mining technologies- Big data and data mining technologies- Enterprise social- Technology for more efficient digitization- Technology and solutions for shipping & ports- Improving assets in the e-governance space- Mobile computing- Cloud business model technologies- Medical technologies- Personal robotics

Last year, investment was made across the Company in

• Envisioning and delivering analytics along with established product line enabling smarter decision making for our customers• Assessing the impact of cloud enabled business models and mobility on established technologies.• Rejuvenation of technology platforms supporting the product lines

b. Benefits derived as a result of R&D

I. Mining sector - we have seen increased stickiness and increased share of wallet from existing clientele based on enhancementsdone to mining product as well as introduction of Integrated analytics suite.

II. Insurance sector - we continue to enjoy leadership in Domestic General Insurance sector and dominate the competition. Wehave generated increased demand from existing customers and won new based on DSL based code generator configuratorproduct.

III. Ports and Cargo has seen increased new sales in markets within and outside India and is now seen to be closing the gap withmarket leaders. The last year and continued technology and functional enhancements done to product lines have made itextremely competitive.

IV. Our GPS based telematics solution has been deployed for public transit arrival time bus prediction in a World Bank fundedproject apart from seeing its first international deployment in Africa. As of now, more than 40,000 assets are tracked usingNirdeshak based solutions around the world.

V. Your Company has already bagged Big data and advanced analytics projects from US and India as well as creating severalsmartphone applications for its own products and for its customers based on its R&D strength demonstrated.

VI. FACTS our flagship Biometric AFIS product is seeing increased uptake in State Police in India based on customer benchmarks.

VII. Niche projects which combine systems integration, embedded systems, mechanical design, application software and controlsystems have been delivered successfully to international clientele.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM12

13

c. Future Plan of Action

• Launch of CMC SaaS Platform enabling monetization of your Company and partner assets in a software as a service model

• Investment to create services and assets in Big Data and Data Mining/Predictive analytics specifically in Healthcare, Mining,Insurance, Ports and Cargo Operations

• Our Center of Excellence on Cloud will deliver service and asset based solution for Private, Hybrid and Public Cloud and Batchworkloads.

• Smartphone and Mobile applications enablement for critical product lines

• Independent analytics suites for most successful domains that your Company works in - Mining, Insurance, Ports and Cargoand Transportation.

d. Expenditure on R&D

(` / crore)

Particulars 2011-12 2010-11

A. Capital 0.61 0.15

B. Recurring 9.26 8.76

C. Total 9.87 8.91

D. Total R&D Expenditure as a percentage of Turnover 1.04 1.12

2. Technology Absorption, Adaptation and Innovation

a. Efforts made towards technology absorption, adaptation and innovation

I. Your Company proactively uses new and emerging technologies for conceptualizing solutions to meet its business needs.The expertise gained in early usage results in developing/enhancing our offerings and provides us an advantage indifferentiating our Company from others.

II. Apart from its own investment in various technologies, your Company constantly interacts with technology leaders andreputed academic institutes such as IITs to understand and absorb new developments in technologies and offerings.

III. Your Company conducts periodic internal meetings including the CEO, Chief Architects and product teams to discuss actionplans for product and technology upgrades and shortlist teams for Research & Development initiatives.

IV. Your Company ensures the readiness of its employees through ongoing Training and Skill Development to handle projectsdemanding new technology and skill set requirements.

V. Your Company also periodically scans the market for innovative offerings and products across the world. After due diligence,these are either integrated with your Company's offerings or used to enhance its solutions portfolio.

VI. Your Company encourages its employees to participate in Tata Group level innovation program - Innovista. It also has equivalentinternal programs, which recognize and reward improvements and innovation.

b. Benefits derived as a result of the above efforts

I. Increased business opportunities where the upgraded CMC products and solutions are in demand.

II. Your Company continues to be a valued solution provider for complex projects in the market.

III. Ability to attract best talent to work with us on these products and technologies has created customer interest in engagingus on their transformation projects

IV. Increased ability to respond to unique requirements of the customers and system engineers.

V. Investing in specific emerging technology spaces such as Cloud, SaaS, Mobility, Analytics and Big Data allows your Companyrelevance and superior positioning for tomorrow's needs

c. Information regarding Importing Technology

The Company has not imported any technology.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM13

CMC Limited


14

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

1. Activities Relating to Exports, Initiatives to increase exports, Development of new export markets for products and services& export plan

As a part of its core strategy, the Company is focusing on exports of its services by leveraging wide marketing reach of its HoldingCompany, Tata Consultancy Services Limited. The Company has established itself as a major supplier of Embedded System Servicesand software solutions in key industry verticals and e-Governance space.

2. Total Foreign Exchange Earnings & Outgo

The foreign exchange earnings and outgo of the Company during the year were as follows:

(` / crore)

Particulars Year ended Year ended31 March, 2012 31 March, 2011

Revenue:

Earnings 311.25 234.69

Outgo 62.23 49.31

Net foreign exchange earnings (NFE) 249.02 185.38

NFE / earnings (%) 80.00 78.99

KKK

On behalf of the Board of Directors

Mumbai S RAMADORAI30 April, 2012 Chairman

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM14

15

MANAGEMENT DISCUSSION AND ANALYSIS

A. Industry Structure and development

The year 2011-12 is characterised as landmark year of India IT industry, as the aggregate revenue of the industry isestimated to have crossed US$ 100 billion. Despite continuing challenging environment in the global markets, the exportshave estimated to have increased by 16%, while domestic revenue is estimated to have increased by about 9%. Whilethe global macroeconomic scenario remains uncertain, the industry is expected to follow growth trajectory in FY 2012-13, driven by the need of the customers to be more competitive in their efforts to recover from global slowdown, andthe IT Industry’s readiness to provide innovative solutions and new business models. Investment in IT is increasinglybeing seen by the customers as important element of growth strategies and also a fundamental enabler of cost reductionand cost optimisation. A NASSCOM study has predicted export revenue growth of 11-14% and domestic revenue growthof 13-16% in FY 2012-13. The study also predicts the growth to be driven by new business models, organisation efficiencies,services around disruptive technologies such as cloud, mobility, analytics, social media, flexible product portfolio andvirtualised solutions. The prevailing global megatrends present new opportunities and risk for the industry, which willshape the technology industry landscape. CMC is gearing itself to derive benefits of the emerging trends andopportunities.

B. Opportunities and Threats

Opportunities

The changes in economy as well as IT technology present several opportunities as well as challenges to CMC. The key onesrelevant in 2012-13 are as follows:

(1) In India, higher growth is expected to come from 2nd and 3rd tier cities and SMB sector. CMC’s countrywide presenceand partner network can be leveraged to capitalize on this growth. CMC’s e-Pragati initiative started in 2010 specificallytargets this opportunity.

(2) Cloud computing and virtualisation is proving to be disruptive change in IT business. The technology provides flexibility,convenience as well as reliability along with cost optimisation. CMC is adapting this technology for its own use as well asa part of its offerings.

(3) Convergence of mobility and web is opening several opportunities for new applications for mobile access to the systemparticularly in the area of business intelligence and reporting. Existing applications also need enhancements to incorporatethese technologies. CMC with core competency in mobile technology as well as embedded systems will tap theseopportunities.

(4) Indian IT industry continues to be one of the biggest recruiter in India and is estimated to have added 230,000 employeesduring FY 2011-12. Most of the IT companies are expecting to continue with the hiring plan in FY 2012-13 as well,including fresh campus recruitment and recruitment of non-engineering graduates for roles which were till now onlyfor engineering graduates. This opens a large opportunity for custom designed induction training for IT companies. Therecruitment will include increased job opportunities are also increasing the demand for job-oriented IT training courses.CMC’s Education and Training SBU already has a significant presence in these segments and will use these opportunitiesto fuel its growth.

Threats

(1) Growth in IT industry is leading to higher job opportunities and increased demand for mid-level roles which are neededto groom the fresh recruits entering the industry. This is leading to higher level of attrition across IT industry

(2) The speed of technology obsolescence has increased as natural reaction to fast changing technologies. The productivelife of IT resources and competencies is shrinking, thereby increasing the level of investment needed to meet the marketrequirements.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM15

CMC Limited


16

C. FOCUS AREAS OF THE COMPANY

1. Vision, Mission, Values and Strategies

We started the year 2011-12 with our inspiring vision: To be A Global Top 20 Systems Engineering and IntegrationCompany by 2020. The vision is based on leveraging our USP - CMC’s breadth and depth to undertake and successfullycomplete large scale systems integration projects. Overall, CMC’s capabilities address the needs of the market; we havethe experience, track record, talent, support of our parent TCS and our customers. Going forward, flexibility, agility, globalmind set, process and customer centricity and a high-performance work culture will be vital.

As an innovative world class systems engineering and integration Company, we aim to provide sustainable, advancedtechnology solutions and services in projects of national importance, and to our global customers, maximising value toour stakeholders and the communities we serve. Our strategy for 2011-12 was orchestrated around finding more driversfor rapid growth; key strategic thrust areas being improve cost efficiencies, enter the emerging economies of Africa andSAARC nations, enter new emerging domestic markets like agriculture and healthcare, improve client penetration, andinnovation and R&D towards strengthening our core assets, innovating new products and services; and towards verticalmarket solutions.

The intrinsic values of CMC will support us in achieving our vision. We shall be a vibrant organisation where openness,trust, teamwork, simplicity, responsibility and innovation are valued and promoted. We will practice good corporategovernance and will propagate ethical behavior in all work practices and in dealing with our partners/suppliers/vendors/franchisees and customers.

2. Business Segments of the Company:

The Company generates its revenue from five segments:

• Customer Services (CS) • Systems Integration (SI)• IT enabled Services (ITeS) • Education and Training (E&T)• Special economic zone (SEZ)

2.1 Customer Services (CS):

The CS SBU focuses on creating solutions and providing services for the IT infrastructure requirements coveringinfrastructure architecture, design and consulting services; turnkey system integration of large network and data centreinfrastructures. The scope of services includes supply of associated equipment and software; On-Site and Remote SupportServices for multi-locations for the IT infrastructures of domestic and international clients. Traditionally equipment supplybusiness had formed a large portion of the CS SBU business. Over the years the margins in equipment supply businessdeclined considerably leading to overall decline in the margins for the Company. As a strategy to improve margins, theCompany started defocusing from equipment business resulting in decline in CS SBU revenue prior to financial year2011 in last five years. However the phase of this transformation is over and the SBU is back to growth in 2010-11:

`

Revenues (Consolidated)

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM16

17

The CS SBU earned revenue of ` 335.99 crore during the year on a consolidated basis compared to ̀ 271.32 crore duringthe previous year, registering an increase of 24% on yearly basis. The share of CS SBU in total revenue from operationsdecreased from 25% in FY 11 to 23% in FY 12.

2.2 Systems Integration (SI):

The SI SBU undertakes the activities of solution deployment that includes embedded systems, software development,software maintenance and support, turnkey project implementation and systems consultancy and has been one of thekey drivers of its transformation towards more value added business with a view to improve overall margin. SI SBUcontinued to invest and grow its solution asset base during the year so that it can offer innovative solutions around thecore IPs’ of these assets. This includes enhancements of Biometrics based assets for identity management, mining assetsfor mining solutions, transportation assets, insurance and financial solution assets and e-governance assets.

The SI SBU earned revenue of ` 839.00 crore during the year compared with ` 577.92 crore earned in the previous year,registering an increase of 45% over the previous financial year. The share of SI SBU in total revenue from operations increasedfrom 53% in FY 11 to 57% in FY 12.

2.3 IT enabled Services (ITeS):The ITeS SBU provides a variety of IT enabled services which include Business Process Outsourcing and KnowledgeProcess Outsourcing for front end and back office. This SBU has created specific business domain expertise such as on-demand software services; office records digitisation and document management; recruitment and examination resultsmanagement; legacy data migration management. Also, ITeS SBU continues to work for Election Commission as a state-level agency. ITeS SBU has taken initiatives to leverage its experience in handling large national projects for more rewardinginternational geographies and has over the years been one of the main drivers to increase international revenue of theCompany.


`


`

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM17

CMC Limited


18

The ITeS SBU earned revenue of ̀ 215.40 crore during the year compared to ̀ 169.65 crore in the previous year, registeringan increase of 27%. The share of ITeS SBU in total revenue from operations decreased from 16% in FY 11 to 15% in FY 12.

2.4 Education & Training (E&T):

The E&T SBU of the Company offers education and training solutions for corporate organisations, government institutionsand individuals. Its offerings include a wide range of courses that vary from information technology, soft skills training,integrated career development programmes, skill development to vocational training programmes. The Company offersintegrated learning solutions for several corporations, and also conducts induction and refresher programmes. In additionto the training programs for employees, it also delivers various skill enhancement programs for experienced peoplefrom the industry. Over the years E&T SBU faced cluttered and commoditised market, with a need to differentiate, whichcould result in growth of SBU. The E&T SBU has re-engineered its offerings in corporate and job enabling training segmentto differentiate from the competitors.

The E&T SBU earned revenue of ` 58.18 crore during 2011-12 compared to ` 53.24 crore in the previous year, registeringan increase of 10% on yearly basis. The share of E&T SBU in total revenue from operations decreased from 5% in FY 11 to4% in FY 12.

2.5 Special economic zone (SEZ):

The Company is in the process of developing an SEZ spread over 46.33 acres at its campus at Gachibowli, Hyderabad. TheCompany has started reporting SEZ as a separate segment from FY 2011-12 in line with Accounting Standard (AS) -17Segment Reporting, as its assets reached the level of more than 10% of the total assets of the Company. The income fromthis segment represents income from renting out SEZ facilities to TCS. The performance of the SEZ segment during theprevious five years is as under:


`

Education & Training


Special Economics Zone(SEZ)`

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM18

19

D. Financial Performance (Consolidated):

The Management Discussion and Analysis below relates to consolidated audited financial statement of CMC Limitedand its subsidiaries.

Particulars Year ended Year ended Variation31 March, 2012 31 March, 2011

` Crore % ` Crore % %

Income:Income from sales and services 1,466.96 99.84 1,080.53 99.64 35.76Other operating revenue 2.38 0.16 3.87 0.36 (38.50)Total revenue from operation 1,469.34 100.00 1,084.40 100.00 35.50

Expenditure*:

Material 170.72 11.64 121.39 11.23 40.64

Manpower 440.22 30.01 345.13 31.94 27.55

Sub-contracting costs 446.11 30.41 262.35 24.28 70.04

Others 187.96 12.81 144.82 13.40 29.79

Total expenditure 1,245.01 84.87 873.69 80.86 42.50

Operating profit 224.33 15.29 210.71 19.50 6.46

Other Income 17.46 1.19 11.80 1.09 47.97

Profit before interest, tax and depreciation 241.79 16.48 222.51 20.59 8.66

Depreciation 21.37 1.46 10.46 0.97 104.30

Interest 0.02 0.00 0.22 0.02 (90.91)

Profit before tax 220.40 15.02 211.83 19.60 4.05

Provision for Taxes 68.59 4.68 32.42 3.00 111.57

Profit after taxes 151.81 10.35 179.41 16.60 (15.38)

* % shows expenses as a percentage of income from sales and serviceNumbers or % in bracket represents negative numbers or %.

1. Income1.1 Income from sales and services

The Company earned a total income from sales and services of ` 1,466.96 crore as compared to ` 1,080.53 crore duringthe previous year. Income from sales and services during the year grew by 35.76% over the previous financial year. TheCompany mainly derived its revenue growth from software services in international geographies and facility managementservices in the domestic markets. Consequently the share of international business in total operating revenue improvedto 60.27% as compared to 55.32% during the previous year.

Income Category Year ended Year ended Variation31 March, 2012 31 March, 2011 Y-o-Y

` Crore % ` Crore % %Equipment 154.13 10.51 102.74 9.51 50.01

Services 1,312.83 89.49 977.79 90.49 34.27

Total Income from sales and services 1,466.96 100.00 1,080.53 100.00 35.76

Domestic 582.82 39.73 482.82 44.68 20.71

International 884.14 60.27 597.71 55.32 47.92

Total Income from sales and services 1,466.96 100.00 1,080.53 100.00 35.76

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM19

CMC Limited


20

2. Expenses

2.1 Materials

The cost of material includes costs that are incurred on procurement of equipments for resale and consumption ofspares on maintenance and warranty service projects.

Particulars Year ended Year ended VariationUnit 31 March, 2012 31 March, 2011 %

Equipment Resale

- Sale of purchased equipment ` crore 154.12 102.74 50.01

- Cost of equipment purchased for resale ` crore 145.07 96.05 51.04

- Cost of equipment as a % of equipment revenue % 94.13 93.49

Maintenance Services:

- Revenue from maintenance services ` crore 56.17 54.59 2.89

- Cost of spares consumptions ` crore 25.66 25.34 1.26

- Spares consumption as a % of maintenance revenue % 45.68 46.42

The cost of equipment and cost of spares consumption increased in line with the revenue from equipment sale andmaintenance services.

2.2 Employee benefits expenses

The Company has registered significant growth in revenue from services in international geographies. The Employeecosts for the year increased to ` 440.22 crore compared to ` 345.13 crore during the previous .


Employee benefit Expenses ` crore 440.22 345.13 27.55

Revenue from Services ` crore 1,312.84 977.79 34.27

Manpower Costs as % of Revenue from Services % 33.53 35.30

The increase in employee cost is due to increase in compensation in line with industry standards and engagement ofadditional technical manpower for international projects contributing to revenue growth.

1.2 Other Operating revenues

The details of other operating revenues are as under:

Income Category Year ended Year ended Variation31 March, 2012 31 March, 2011

` Crore ` Crore %Liabilities / provisions no longer required written back 1.20 2.40 -50

Bad debts recovered 1.18 1.47 -20

Total 2.38 3.87 -39

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM20

21

2.3 Sub- Contracting and Outsourced cost


Sub contract and outsourced services ` crore 446.11 262.25 70.11

Revenue from Services ` crore 1,312.84 977.79 34.27

Sub-contracted Costs as % of Revenue from Services % 33.98 26.82

The sub contracting and outsourcing cost includes cost of staff hired through vendors. The Company has been usingservices of various vendors in order to achieve cost competitiveness and also achieve necessary variability in costs. Thesubcontracting costs as a percentage of services revenue has increased from 26.83% to 33.98% primarily due to significantincrease in IT enabled services, Facilities management services and onsite software services in the international marketswhich are main user of sub-contracted services.

2.4 Other Expenses

The other expenses have gone up in line with increased business. The details are as tabled below:


` crore ` crore %

Rent and hire charges 20.65 19.08 8.23

Electricity charges 15.58 10.36 50.39

Repair and maintenance 10.40 9.72 7.00

Travel and conveyance 29.34 22.04 33.12

Communication and postage 10.58 9.27 14.13

Printing and stationery 4.05 2.24 80.80

Insurance 9.68 7.85 23.31

Legal and professional fees 15.21 10.14 50.00

Payment to franchisees and other E&T expenses 22.86 17.92 27.57

Living expenses on overseas projects 10.63 8.48 25.35

Bad Debts / Provision for doubtful debts 7.89 8.98 -12.14

Loss on Forex fluctuations 4.51 0.56 705.36

Others 26.58 18.18 46.20

Total 187.96 144.82 29.80

As a % of income from sales and services 12.81% 13.40%

Other operating expenses have gone down as a percentage of income from sales and services from 13.40% to 12.81%as a result of various cost optimisation measures. The reasons of variation in some key expenses are as follows:

• Electricity charges increased by 50.39% due to new facilities occupied during the year.

• Travel and conveyance expenses increased mainly due to project related travel during the year and is reimbursableby the customer.

• Legal and professional fee and others increased due to general business related professional charges.

• Living allowances increased mainly due to increase in visa related fees by authorities during the year.

2 CMC - PG 12-48.p65 2012/06/01, 07:33 PM21

CMC Limited


22

3. Other Income

The other income has gone up by 47.97% to ` 17.46 crore compared to ` 11.80 crore during the previous financial year.The increase in other income is on account of the followings:


` crore ` crore %

Dividend / profits from mutual funds 15.87 7.20 120.42

Miscellaneous 1.59 4.60 -65.35

Total 17.46 11.80 47.97

• The dividend income increased mainly due to income recognised on fixed maturity plan mutual funds maturedduring the current financial year.

• The Company had received interest on income tax refunds to the tune of ` 2.07 crore during previous financial year2011. There has been no such receipt during the year and consequently the miscellaneous income decreased to` 1.59 crore during the year from ` 4.60 crore in the previous financial year.

4. Depreciation

Depreciation increased to ̀ 21.37 crore compared to ̀ 10.46 crore in the previous year. The depreciation increased mainlydue to infrastructure capitalised in SEZ facility at Hyderabad during the year.

(` / Crore)


Assets capitalised during the year 183.59 14.47

Depreciation for the year 21.37 10.46

The increased capitalisation during the year is primarily on account of SEZ at Hyderabad. Depreciation charge as a % ofoperating revenue increased to 1.46% compared to 0.97% during the previous year.

5. Interest

Interest on borrowings came down to ` 0.02 crore as compared to ` 0.22 crore during the previous year. The interestpertains to interest on retention money received for execution of projects and other deposits. The Company has remaineddebt free throughout the financial year 2011-12.

6. Provision for tax

The tax expenses of the Company increased to ` 68.59 crore compared to ` 32.42 crore during the previous financialyear. The effective tax rate increased to 31.12% compared to 15.30% during the previous financial year. The increase intax expenses is primarily due to discontinuation of concessional tax treatment for STPs w.e.f 1 April, 2011.

During the year the Company commissioned its SEZ units at Hyderabad and Kolkata which will enable the Company toenjoy tax exemptions for future years.

E. Financial Position (Consolidated)

Capital Structure

1. Share Capital

The Company allotted 151,500,00 equity shares as fully paid up bonus shares on 10 June, 2011 by utilising generalreserves. As a result, the paid up capital of the Company as on March 31, 2012 increased to ` 30.30 crore consisting of30,300,000 equity shares of ` 10 each.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM22

23

2. Reserve and Surplus

The general reserve as at 31 March, 2012 decreased to ` 56.07 crore compared to ` 56.88 crore as at 31 March, 2011 dueto the following.

• The general reserve decreased by ` 15.15 crore on account of issue of bonus shares during the year.

• The Company has transferred ` 14.33 crore being 10% of standalone profits after tax for the year to general reserveas stipulated by Companies Act, 1956.

Foreign currency translation reserve increased to ` 10.30 crore as at 31 March, 2012 compared to ` 0.08 crore as at 31March, 2011 due to the translation gain of ` 10.38 crore arising during the year on the net investment in the non-integralforeign subsidiary company.

Net worth of the Company as at 31 March, 2012 increased to ` 772.19 crore compared to ` 654.02 crore at the beginningof the year resulting in an increase of 18.07% during the year mainly on account of retained profits after tax earnedduring the year.

3. Other long term liabilities

Other long term liability includes warranty related income received in advance against which services will be renderedafter a period of 12 months. The liability as at 31 March, 2012 was ` 12.15 crore as compared to ` 7.21 crore as at31 March, 2011.

4. Long term provisions

The long term provisions increased to ` 27.46 crore as at 31 March, 2012 compared to ` 25.12 crore as at 31 March, 2011mainly on account of increase in employee compensation related provisions.

5. Trade Payables

The trade payables as at 31 March, 2012 was ` 261.98 crore compared to ` 173.27 crore as at 31 March, 2011. Tradepayables during the year mainly increased due to increase in project related procurements during the year.

6. Other current liabilities

Other current liabilities as at 31 March, 2012 was ` 49.66 crore compared to ` 76.94 crore as at 31 March, 2011. The othercurrent liabilities mainly decreased due to:

(` / Crore)

Particulars Amount

Decrease in income received in advance (19.70)

Decrease in statutory due (3.42)

Decrease in advance for supplies and others (5.53)

Decrease in payable for purchase of fixed assests (0.67)

Increase in security deposits 2.04

Net decrease in other current liabilities (27.28)

7. Short term provisions

The short term provisions as at 31 March, 2012 was ` 125.82 crore as compared to ` 100.80 crore as at 31 March, 2011.The short term provision increased mainly due to increase in employee benefits by ` 8.00 crore, tax related provisions by` 8.21 crore and increase in provision for dividend and dividend taxes by ` 8.80 crore.

8. Tangible assets

The gross block of tangible assets as at 31st March, 2012 was ` 387.66 crore (including capital WIP) compared to ` 280.46 crore as at the beginning of the year, resulting in an increase of 38.22% during the year, mainly due to SEZrelated capital expenditure of ` 79.08 crore.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM23

CMC Limited


24

9. Deferred tax assets (net)

The deferred tax assets increased to ` 10.97 crore as at 31 March, 2012 as compared to ` 8.82 crore as at 31 March, 2011.The deferred tax assets mainly increased due to:

(` / Crore)

Particulars Amount

Increase in deferred tax assets on employee related benefits 7.06

Increase in deferred tax assets on other items 0.20

Decrease in deferred tax assets related to provision for doubtful debts (1.36)

Increase in deferred tax liabilities on fresh capitalization during the year. (3.75)

Net increase in deferred tax assets 2.15

10. Long term loans and advances

Long term loans and advances as at 31 March, 2012 was ` 140.63 crore compared to ` 96.44 crore as at 31 March, 2011.The main reasons for increase are as follows:

(` / Crore)

Particulars Amount

Increase in capital advances during the year 9.46

Increase in security deposits for new premises 6.33

Increase in advance taxes 27.62

Increase in other advances 0.78

Net increase in long term loans and advances 44.19

11. Current Investments

Current Investments decreased to ` 151.58 crore as at 31 March, 2012 from ` 226.17 crore as at 31 March, 2011. Theinvestments mainly decreased due to utilization of funds for SEZ related capital expenditure. The Company invests itssurplus funds generated from operations in low risk debt funds that optimized the return and protected invested principle.

12. Inventory

Inventory mainly consists of equipment purchased for resale to customers. The inventory as at 31 March, 2012 remainedflat at ` 13.41 crore compared to ` 13.47 crore as at 31 March, 2011.

13. Trade Receivables

The Trade receivables as at 31 March, 2012 was ` 382.12 crore as compared to ` 252.13 crore as at 31 March, 2011. The DaysSales Outstanding (DSO) increased to 95 days as compared to 85 days during the previous financial year. The followingtable provides age wise analysis of the Trade receivables (Net of provisions for doubtful debts) as on 31 March, 2012:

(` / Crore)

Ageing As at As at31 March, 2012 31 March, 2011

Not due 29.08 23.83

Due < 30 days 185.15 125.21

Due 30 - 60 days 69.61 37.94

Due 60 - 90 days 13.17 13.67

Due 90 days - 120 days 24.84 10.37

Due 120 days - 180 days 15.24 8.17

Due > 180 days 45.00 32.94

Total 382.12 252.13

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM24

25

14. Short term loans and advances:

The short term loans and advances stood at ` 49.63 crore as at 31 March, 2012 compared to ` 55.34 crore as at 31 March,2011. These short term loans and advances decreased mainly due to:

(` / Crore)

Particulars Amount

Utilisation of MAT credit (10.40)

Amortisation of prepaid expenses during the year (3.17)

Increase in indirect tax credits available for set off 0.47

Increase in short term advances for supplies and security deposits 6.37

Increase in loans and advances to employees 1.02

Net increase in short term loans and advances (5.71)

15. Other current assets

Other current assets include unbilled revenue (accrued debtors) which represents the revenues recognised for servicesrendered / goods supplied but not invoiced till the Balance sheet date as per the customer contracts. Unbilled revenueas at 31 March, 2012 was ` 150.24 crore compared to ` 124.48 crore as at 31 March, 2011. The level of unbilled revenuehas declined from 42 days to 37 days of revenue as at 31 March, 2012.

Future Outlook

The Company believes that the current trends in IT spend both domestically and in the international market presentsunprecedented opportunity for growth. Liberalization and opening up of more infrastructure sectors like roads, airports andsea ports, national e-Governance initiatives and implementation of Mission mode projects, recent policy initiatives to makeIndian companies more competitive including new policy on Special Economic Zone, the focus of Indian corporates tobenchmark themselves with leading global players in terms of quality of processes and competitiveness, is going to drive anincrease in IT spend. The Company is well poised to exploit the emerging opportunities both in India and global market insynergy with TCS.

F. Risks and concerns

A comprehensive and integrated risk management framework forms the basis of all the de-risking efforts of the Company.Formal reporting and control mechanisms ensure timely information availability and facilitate proactive risk management.These mechanisms are designed to cascade down to the level of the line managers so that risks at the transactional levelare identified and steps are taken towards mitigation in a decentralised fashion.

The Board of Directors is responsible for monitoring risk levels on various parameters and the Managing Director ensuresimplementation of mitigation measures. The Audit Committee provides the overall direction on the risk managementpolicies.

(i) Business risks

Excessive dependence on any single business segment increases risks. The Company continuously makes efforts tobroadbase and diversify its revenue stream to prevent undesirable concentration in any one vertical technologyclient or geographic area.

Excessive exposure to a few large clients has the potential to impact profitability and to increase credit risk. However,large clients and high repeat business lead to higher revenue growth and lower marketing cost. Therefore, theCompany makes efforts to strike a balance. CMC actively seeks new business opportunities and clients to reduceclient concentration levels.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM25

CMC Limited


26

Hardware supply and integration is significant part of our revenue for which the Company depends on OEMs. Anydefault and delays on the part of OEMs exposes the Company to the risk of not meeting its commitments to theCustomer. The Company has been making efforts to negotiate better terms with OEMs. In addition, the Companyhas reduced its share of such business and is focusing on increasing value added services business.

A high geographical concentration of business could lead to volatility because of political and economic factors intarget markets. However, individual markets have distinct characteristics - growth, IT spends, willingness to outsource,costs of penetration, and price points. Cultural issues such as language, work culture and ethics, and acceptance ofglobal talent also come into play. Due to these business considerations, the Company has decided not to imposeany rigid limits on geographical concentration. Exposure to the inherent risks in a specific geography consists oflegal and contractual risks as well as tax related changes. The Company has a process of evaluating country risks bytaking legal opinion from the legal counsel operating/familiar with the geography.

Proactively looking for business opportunities in new geographies and thereby increasing their contribution tototal revenues helps manage this risk.

Vertical domains relate to the industries in which clients operate. CMC has chosen to focus on several selectedvertical segments with a view to leverage accumulated domain expertise to deliver enhanced value to its clients.

Being a Company exposed to rapid shifts in technology, an undue focus on any particular technology could adverselyaffect the risk profile of the company. Given the rapid pace of technological change, CMC has chosen not to imposerigid concentration limits. Often, industry characteristics and market dynamics determine the choice of technology.

(ii) Financial risks

The Company is exposed to longer recovery cycles and incidents of defaults by customers due to its involvement inlarge turnkey projects implementation and Government entities in its customer profile resulting in need to financehigher level of working capital. The Company has been focusing on improved execution and negotiation of betterterms with customers and vendors and also tightening the collection follow-up process. These measures have helpedCompany in significant reduction in collection cycle and working capital, resulting in cash surplus. The Company isconfident to have adequate funding to finance its working capital requirements as well as future growth needs.

The volatility in foreign currency rates may impact the profitability of the Company to the extent of its exposure tothe International business and specific currencies. However the Company has been able to use the internal hedgeprovided to it due to imports for domestic market and has demonstrated resilience to impact of increased level ofvolatility over last 2 years. The Company also takes forward covers selectively to protect against movement in foreigncurrency rates.

(iii) Legal risks

Litigation regarding intellectual property rights, patents and copyrights is significantly high in the software industry.In addition, there are other general corporate legal risks. The management has clearly charted out a review anddocumentation process for all contracts.

(iv) Internal process risks

The key resource for CMC is its employees. With increased competition from Indian and international IT servicescompanies, there is an increased pressure on salary increases and consequent pressure on margins. As demand ofspecified skilled IT personnel outpace supplies, the Company faces higher risk of attrition. The company has beenfocusing on creating a favorable work environment that encourages innovation and meritocracy to improveemployee retention and to reduce attrition rate. The Company has also implemented differential pay structure toattract and retain high performers and employees possessing key skills and domain knowledge.

Risk management processes at the operational level are a key requirement for reducing uncertainty in deliveringhigh-quality software solutions to clients within budgeted time and cost. Adoption of quality assurance frameworkshas ensured that risks are identified and measures are taken to mitigate these at the project plan stage itself.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM26

27

The Company evaluates technological obsolescence and the associated risks on a continuing basis and makesinvestments accordingly.

G. Internal control systems and their adequacy

The Company has an adequate system of internal controls implemented by the management towards achieving efficiencyin operations, optimum utilisation of resources and effective monitoring thereof and compliance with applicable laws.The system is continuously reinforced with analysis of data to strengthen it to meet the changing requirements.

The system comprises well defined organisation structure, pre-identified authority levels and documented policyguidelines and manuals for delegation of authority.

A qualified and independent Audit Committee of the Board of Directors reviews the internal audit reports and theadequacy of internal controls.

H. Human Resources

CMC continues to focus and invest in human resource development to provide an open work culture and rewardingcareer opportunities to all its employees. CMC has continually adopted structures that help attract best external talentand promote internal key talent to higher roles and responsibilities.

A number of employee engagement initiatives like 'CMC Connect' were undertaken during the year to enhance staffconnect with organisation's goals and objectives. Rewards and recognition programme has been further strengthenedto include rewards that promote organisational values and culture of excellence across the organisation.

Your Company has undertaken companywide competency management and analysis programme based on PCMMframework. This will help the Company achieve better focus on staff career development, learning and growth.

The Company continues with the previous year focus of improving per person productivity through improved utilisationby managing a good balance between regular and outsourced person power and moving focus from low realisationprojects to higher realisation International projects.

A Learning and development opportunity to each staff member is one of the key Human Resource Development strategiesof your Company. Apart from comprehensive technical certification program, the Company has initiated various computerbased and faculty driven learning opportunities across the Company.

The Company has initiated 'Affirmative Action' to realise the benefits of employee diversity in the organisation. Specialinitiatives have been launched to promote gender diversity in the Company. CMC women workforce now stands at 21%of total workforce.

Key HR processes have been benchmarked and automated to improve productivity and ensuring better control onoperations.

The staff strength of the Company as on 31 March 2012 was 10775 (including employees on contract) as compared to7396 as on 31 March, 2011.

I. Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company's objectives, expectations or predictionsmay be forward looking within the meaning of applicable securities, laws and regulations. Actual results may differmaterially from those expressed in the statement. Important factors that could influence the Company's operationsinclude change in Government regulations, tax laws, economic and political developments within and outside the countryand such other factors.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM27

CMC Limited


28

PERFORMANCE SUMMARY – CONSOLIDATED(` / Crore)

Particulars FY 12 FY 11 FY 10 FY 09 FY 08

Income from sales and services 1,466.96 1,080.53 870.73 939.83 1,064.74

Other operating revenues 2.38 3.87 5.44 2.51 9.08

Revenue from operations 1,469.34 1,084.40 876.17 942.34 1,073.82

Income from sales and services:

International Revenue 884.14 597.71 435.32 379.76 376.45

Domestic Revenue 582.82 482.82 435.41 560.07 688.29

Income from sales and services bygeographic segment:

India 664.62 555.40 496.26 649.09 833.58

USA 733.54 468.23 329.23 241.41 191.31

UK 30.43 24.54 18.16 15.95 15.14

Others 38.37 32.36 27.08 33.38 24.71

Cost

Employee cost 440.22 345.13 276.16 262.78 237.12

Other operating cost 804.79 528.56 432.85 550.37 708.56

Total Cost(excluding interest and depreciation) 1,245.01 873.69 709.01 813.15 945.68

Profitability

EBIDTA (before other income) 224.33 210.71 167.16 129.20 128.14

Profit before tax 220.40 211.83 167.45 143.82 123.36

Profit after tax 151.81 179.41 143.23 116.15 92.34

Capital Accounts

Share capital 30.30 15.15 15.15 15.15 15.15

Reserves and surplus 741.79 638.87 495.53 392.14 297.57

Gross block 354.27 172.91 171.42 162.25 147.54

Current investments 151.58 226.17 195.32 119.88 95.63

Earnings per share in `

EPS – as reported* 50.10 59.21 47.27 38.33 30.48

* EPS for all previous years has been adjusted for impact of bonus issue.

Note: Previous year figures have been regrouped/reclassified where necessary.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM28

29

RATIO ANALYSIS – CONSOLIDATED

Unit FY 12 FY 11 FY 10 FY 09 FY 08

Ratios - Financial Performance

International Revenue / Income from sales and services % 60.27 55.32 49.99 40.41 35.36

Domestic Revenue/ Income from sales and services % 39.73 44.68 50.01 59.59 64.64

Equipment Revenue/ Income from sales and services % 10.51 9.51 11.83 24.71 36.55

Services Revenue/ Income from sales and services % 89.49 90.49 88.17 75.29 63.45

Employee Cost / Income from sales and services % 30.01 31.94 31.72 27.96 22.27

Other Operating Cost/ Income from sales and services % 54.86 48.92 49.71 58.56 66.55

Total Cost/ Income from sales and services % 84.87 80.86 81.43 86.52 88.82

EBIDTA(before other income)/ Income from sales and services % 15.29 19.50 19.20 13.75 12.03

Prot before tax/ Income from sales and services % 15.02 19.60 19.23 15.30 11.59

Tax/ Income from sales and services % 4.68 3.00 2.78 2.94 2.91

Effective Tax Rate-Tax/PBT % 31.12 15.30 14.47 19.24 25.15

Prot after tax/ Income from sales and services % 10.35 16.60 16.45 12.36 8.67

Ratios-growth

International sales and services % 47.92 37.30 14.63 0.88 (1.10)

Total Income from sales and services % 35.76 24.10 (7.35) (11.73) (1.40)

EBIDTA(before other Income) % 6.46 27.89 27.65 6.41 20.29

Prot after tax % (15.38) 25.26 23.31 25.79 33.20

Ratios-Balance Sheet

Debt-Equity Ratio Nos. 0 0 0.03 0.12 0.09

Days Sales Outstanding Days-Debtors Days 95 85 86 100 78

Days Sales Outstanding Days-Accrued Debtors Days 37 42 44 35 37

Invested Funds/total sales and services % 10.33 20.93 22.43 12.76 8.98

Ratios-per share

Earnings Per Share* ` 50.10 59.21 47.27 38.33 30.48

Price Earnings Ratio, end of year (P/E) Nos. 20 18 14 4 13

Dividend Per Share ` 12.50** 20.00 20.00 15.00 11.00

Dividend Payout(including CDT)/PAT % 29.00 19.63 24.75 25.18 22.10

Market Capitalization as at 31 March Cr 3,014.24 3,150.52 2,030.10 4,84.72 1,227.76

* EPS for all previous years has been adjusted for impact of bonus issue.** On enhanced share capital after bonus issue in the ratio of 1:1.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM29

CMC Limited


30

CORPORATE GOVERNANCE REPORT

1. Company’s practice on Corporate Governance

CMC is committed to the adoption of and adherence to the best Corporate Governance practices at all times and continuouslybenchmarks itself against each such practice in the industry. CMC believes that sound Corporate Governance is critical for enhancingand retaining investor trust and the Company always seeks to ensure that its performance goals are met with integrity.

CMC believes in optimum utilization of the resources and ethical behavior of the enterprise to enhance the stakeholders' value withstrong emphasis on transparency, accountability, integrity, equity, fairness and commitment to values. The Corporate Governancepractices have not only assisted our Company to achieve its goals in most prudent and sustainable manner but also have helped inmaximizing the wealth of shareholders.

The Company has a mission to provide sustainable advanced solutions and services to our global customers, long term partnershipwith its investors, maximizing value to the stakeholders and communities we serve. The Company works with the mission of becominga vibrant organization, where openness, trust, teamwork, simplicity, responsibility and innovation are valued and promoted. TheCompany continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveragingresources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growthand development of human resources.

The Company not only adheres to the prescribed governance practices as per Clause 49 of the Listing Agreement but is constantlystriving to adopt emerging best practices worldwide. It is our endeavor to achieve higher standards and provide oversight and guidanceto management in strategy implementation and risk management and fulfilment of stated goals and objectives. The core values viz.ethical practices, concern for people at work, delight of customers are imbibed in the employees. It relentlessly strives to promotehighest levels of safety in its operations, maintain better health of its employees and provide a clean and green environment forsustainable development.

The Company in its pursuit of excellence in Corporate Governance has adopted the Tata Code of Conduct, Tata Business ExcellenceModel, Tata Code of Conduct for Prevention of Insider Trading & Code of Corporate Disclosure Practices, Whistle Blower Policy andexclusive Code of Conduct for Non-Executive Directors. For its constant endeavor towards excellence, during the year 2011-12, yourCompany has been certified second time in a row as one of the top seven companies in the country by the Institute of CompanySecretaries of India (ICSI) for adopting good Corporate Governance Practices.

1.1 Key Board activities during the year

The Board provides and critically evaluates strategic direction of the Company, management policies and their effectiveness. Theirmain function is to ensure that long-term interests of the stakeholders are being served. The agenda for Board reviews / includestrategic review from each of the Board Committees, a detailed analysis and review of annual strategic and operation plans andcapital allocation and budgets. In addition, the Board reviews financial reports from SBU Heads. Frequent and detailed interactionsets the agenda and provides the strategic roadmap for future growth of the Company. Voluntary Corporate Governance Guidelinesof the Ministry of Corporate Affairs, Government of India broadly outline a framework for corporate sector on important parameterslike appointment of directors, guiding principles to remunerate directors, responsibilities of the Board, risk management, the enhancedrole of Audit Committee, rotation of audit partners and conduct of Secretarial Audit on quarterly basis are receiving attention of theBoard of Directors of your Company.

1.2 Corporate Social Responsibility (CSR)

Corporate Social Responsibility forms an integral part of the Company's business activities. Societal well being and benefit enjoys astrategic and operational level focus as a key measurement index in the Balance Score Card (BSC) at all levels. CSR activities have beenformalized this year with identification of regional coordinators and finalization of CSR calendar for the year. Moreover, the Companyhas set up a core committee for CSR to spearhead our efforts to integrate Corporate Sustainability concerns into the Company'svalues, culture, operations and business decisions, at all levels of the organisation. As reported earlier, the Company has also constituteda voluntary body called ̀ Maitree' which functions towards well being of the society and has organized blood donation camps, cataractoperations for the underprivileged, extended treatment care and financial assistance to poor children etc. on regular basis.

The Company provides safe and healthy working environment to its employees and a Policy in this regard has been implementedduring the year.

With the increased concern for issues such as information security and climate change, CMC pro-actively identify the issues andaddress them. The Company has launched a focused C-Green program under Head - Corporate Sustainability, along with regionalchampions to focus and promote climate change consciousness. Senior Management ensures effective deployment of the plans

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM30

31

through training & certifications on C-Green, C-Green Audits and annual mapping of carbon footprint. The Company has developedexpertise in Green IT approaches in its endeavor to help its customers and other stakeholders to minimize power consumption andcarbon footprint. In its own operations, CMC has already initiated actions to minimize power consumption, waste reduction, waterconservation and environmental friendly disposal of e-waste. CMC's IT solutions for Green offerings are Document ManagementSystem, Vehicle Tracking System, Freight Management Solutions and Green ERP etc. The Company is also carrying out the eco awarenesscampaign across organization. Use of facilities such as teleconferencing, Webex, Video Conferencing is being encouraged to minimizetravel. To specifically address emerging climate change needs, CMC is taking a leadership role in Green IT propagation.

1.3 Role of the Company Secretary in Overall Governance Process

The Company Secretary plays a key role in ensuring that the Board procedures are followed and regularly reviewed. The CompanySecretary ensures that all relevant information, details and documents are made available to the directors and senior managementfor effective decision making at the meetings. The Company Secretary is primarily responsible to ensure compliance with applicablestatutory requirements and is the interface between the management and regulatory authorities. All the Directors of the Companyhave access to the advice and services of the Company Secretary.

1.4 Selection and Appointment of New Directors on the Board

Considering the requirements of the skill-sets on the Board and the broad guidelines issued by the Tata Group Counsel to all TataGroup Companies, eminent persons having an independent standing in their respective field/profession and who can effectivelycontribute to the Company's business and policy decisions are considered by the Governance Committee for appointment of newDirectors on the Board. The number of directorships and memberships in various committees of other companies by such persons isalso considered.

1.5 Term of Board Membership

As per the provisions of the Companies Act, 1956, one third of Board Members (other than Executive Director) retire every year.Managing Director and CEO is appointed by the shareholders for a period of three years, at a time, but is eligible for re-appointment.The Board on the recommendations of the Governance Committee considers the appointment/ re-appointment of Executive andNon-Executive Directors. The Company has adopted the Tata Group guidelines on appointment of Directors and tenure of nine yearsis considered as a threshold for granting further extension to Non-Executive Directors.

1.6 Training of Directors

The Non-Executive Board members of CMC are eminent personalities having wide experience in the field of business, education,industry, commerce and administration. Their presence on the Board has been advantageous and fruitful in taking business decisions.

The new Directors are appointed as per the Guidelines of Tata Group, with management expertise and wide range of experience. TheDirectors appointed by the Board are given induction and orientation with respect to the Company's vision, strategic direction, corevalues, including ethics, corporate governance practices, financial matters and business operations by having one-to-one meetings.The new Board members are also requested to access the necessary documents / brochures, Annual reports and internal policiesavailable at our website www.cmcltd.com to enable them to familiarize with the Company's procedures and practices.

Periodic presentations are made by Senior Management at the Board/Committee meetings on business and performance updates ofthe Company, global business environment, business risks and its mitigation strategy, impact of regulatory changes on strategy etc.Updates on relevant statutory changes encompassing important laws are regularly intimated to the Directors.

1.7 Mechanism for evaluating Non-Executive Board Members

The Governance Committee evaluates the performance of Non-Executive Directors and recommends Commission payable to thembased on their commitment towards attending the meetings of the Board/Committees, contribution and attention to the affairs ofthe Company and their overall performance.

1.8 Recording of Minutes of proceedings at Board and Committee Meetings

The Company Secretary records the minutes of the proceedings of each Board and Committee Meeting. Draft Minutes are circulatedto all the members of the Board / Committee for their comments.

1.9 Follow-up mechanism

The guidelines for the Board/Committee meetings provide for an effective post-meeting follow-up, review and reporting process forthe action taken on decisions/directions of the Board and Committees. As per the Board's decision, the Company Secretary intimatesthe Action Points arising from deliberation during the meeting to the SBU Head who updates MD & CEO's office/Company Secretariaton the areas of their responsibilities for closing the Action Taken Report points (ATR). Company Secretary prepares the update on

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM31

CMC Limited


32

Action items and submits the report to the Board/Committee and also brief them. Company Secretary submits follow up ActionTaken Report once in a quarter to Board/Committee.

1.10 Compliance

The Company Secretary while preparing the Agenda, Notes on Agenda, Minutes etc. of the meeting(s), is responsible for and is requiredto ensure adherence to the applicable laws and regulations including the Companies Act, 1956 read with the Rules and Regulationsissued thereunder, Listing Agreement with the stock exchanges and the Secretarial Standards recommended by the Institute ofCompany Secretaries of India.

1.11 Succession Planning

The Governance Committee works with the Board to plan for orderly succession of leadership within the Board and the Company tomaintain contingency plans for succession in case of any exigencies.

1.12 Shareholders Satisfaction Survey

During the year under review, the Company has carried out Shareholders Satisfaction Survey through electronic/physical mode onvarious matters relating to investor services and was rated `GOOD'. The feedback received from the Shareholders was placed beforethe Shareholders/Investors Grievance Committee.

We are constantly in the process of enhancing our service levels to further improve the satisfaction levels based on the feedbackreceived from our Shareholders. We would welcome any suggestions from your end to improve our services.

1.13 Prevention of Insider Trading

Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 1992 and the guidelines received from the Tata Group Counsel, aSecurities Dealing Code `Tata Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices' forprevention of insider trading is in place. The objective of the Code is to prevent purchase and / or sale of shares of the Company by aninsider on the basis of unpublished price sensitive information. Under this Code, Designated persons (Directors, Advisors, Officers andother concerned employees / persons) are prevented from dealing in the Company’s shares during the closure of Trading Window. Todeal in securities beyond specified limit, permission of Compliance Officer is also required. All the Designated Employees are alsorequired to disclose related information periodically as defined in the Code. Directors and designated employees who buy and sellshares of the Company are prohibited from entering into an opposite transaction i.e. sell or buy any shares of the Company during thenext six months following the prior transactions. Directors and designated employees are also prohibited from taking positions in thederivatives segment of the Company shares. The aforesaid Code is available at the website of the Company www.cmcltd.com.

1.14 Whistle Blower Policy

Your Company has established a mechanism called 'Whistle Blower Policy' for employees to report to the management instances ofunethical behavior, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy and provides safeguardsagainst victimization of employees who avail the mechanism. The policy permits all the employees to report their concerns directly tothe Ethics Counselor/Chairman of the Audit Committee of the Company. The policy with the name and address of the Chairman of theAudit Committee has been communicated to the employees by uploading the same on the website of the Company. The employeescan directly contact the Chairman of the Audit Committee on the email address as mentioned in the `Whistle Blower Policy' uploadedat the website of the Company.

1.15 Internal Control Systems

CMC has both external and internal audit systems in place. Auditors have access to the records and information of the Company. TheBoard and the management periodically review the findings and recommendations of the auditors and take necessary correctiveactions whenever required. The Board recognizes the work of the auditors as an independent check on the information with respectto the operations and performance of the Company.

The Company maintains a system of internal controls designed to provide reasonable assurance regarding:• Effectiveness and efficiency of operations;• Adequacy of safeguards for assets;• Reliability of financial controls; and• Compliance with applicable laws and regulations.

The integrity and reliability of the internal control systems are achieved through clear policies and procedures, process automation,careful selection, training and development of the employees and an organization structure that segregates responsibilities.

The Company uses a state-of-the-art ERP System to record data for accounting and management information purposes and connectsto different locations across the organization for efficient exchange of information. The Company has also appointed M/s Ernst and

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM32

33

Young Private Limited as Internal Auditors to oversee and carry out internal audit of the Company's activities. The audit is based on theinternal audit plan, which is reviewed every year in consultation with Statutory Auditors (M/s Deloitte Haskins & Sells) and the AuditCommittee. The internal audit process is designed to review the adequacy of internal control checks in the system and covers allsignificant areas of Company's operations viz., software delivery, accounting and finance, procurement, employee engagement, travel,insurance, IT processes in the Company. Safeguarding of assets and their protection against unauthorized use are also a part of theseexercises.

The Company has an Audit Committee, the details of which have been provided in Para 3.1 of the Report. The Audit Committeereviews the reports submitted by the Internal Auditors and follows up to ensure the implementation of corrective actions. TheCommittee also meets the Statutory Auditors to ascertain, inter-alia, their views on the adequacy of control systems in the Companyand keeps the Board of Directors informed of its major observations from time to time.

1.16 Best Governance Practices :

CMC believes in adopting the best governance practices prevalent in the industry. Some of the best practices followed in the Companyare as under:

• All securities related filings with stock exchanges and SEBI are reviewed every quarter by the Shareholders/Investors GrievanceCommittee of Directors of the Company.

• The Company has policies and procedures in place for corporate communication and disclosures.• Company is having an independent Board Committee for nomination of Board members.• The Company undergoes internal audit conducted by independent auditors.• The Company also undergoes Secretarial Audit on quarterly basis conducted by an independent Company Secretary in whole-

time practice.• All the employees take online Ethics pledge as a commitment to adhere to the principles of Tata Code of Conduct.• Last year Audit Partner was rotated as per Rotation Policy of Auditors, the audited accounts were signed by the new Audit

Partner w.e.f FY 2010-11.

2. Board of Directors

The Company has a high profiled Board with varied management expertise. The Board's role, functions, responsibility and accountabilityare known to them due to their vast experience. Directors are provided with well structured and comprehensive agenda papers inadvance. All material information is incorporated in the Agenda for facilitating meaningful and focused discussion in the meeting. Toenable the Board to discharge its responsibilities effectively, presentations are given on key issues. Moreover, the Board and its committeemeetings schedule is circulated to the Board Members in the beginning of the financial year.

During the year, information as mentioned in Annexure-IA to Clause 49 of the Listing Agreement has been placed before the Board forits consideration. In addition to matters statutorily requiring Board’s approval, all major decisions involving policy formulation, strategyand business plans, new investments, compliance with statutory/regulatory requirements and major accounting provisions areconsidered by the Board.

Minutes of the Board Meetings/Committee Meetings are circulated to the Directors and confirmed at the subsequent meetings.

(A) Composition of Board

The present Board consists of one Executive Director and six Non-Executive Directors. The Company is having an appropriate size ofthe Board for real strategic discussion and avails benefit of diverse experience and viewpoints. In order to promote gender diversity,CMC is having a woman director on the Board.

All directors are individuals of integrity and courage, with relevant skills and experience to bring judgment to bear on the business ofthe Company. Diversity in Board brings value and adds to the bottom line.

The Company has a Non-Executive Chairman. The Company is having four Independent Directors which is 57% of the total strengthof Directors, meeting the requirement relating to the composition of the Board.

(B) Non-Executive Directors’ compensation and disclosures

The Non-Executive Directors are paid sitting fee as well as commission within the limits prescribed under the Companies Act, 1956. Nostock options were granted to Non-Executive Directors during the year under review. The Non-Executive Directors did not have anymaterial pecuniary relationship or transactions with the Company during the year 2011-12.

(C) Other provisions as to Board and Committees

During the year 2011-12, 05 meetings of the Board of Directors were held on April 18, July 11, October 11 in 2011 and on January 13,February 22 in 2012. The maximum time gap between any two consecutive meetings did not exceed four months.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM33

CMC Limited


34

None of the Directors on the Board are Members of more than ten Committees or Chairman of more than five Committees across allthe companies in which they are Directors. Necessary disclosures regarding Committee positions in other public companies as on 31March, 2012 have been made by the Directors.

Details of attendance of Directors at Board Meetings and at the last Annual General Meeting held on 27 June, 2011, with particulars oftheir Directorships and Chairman/ Membership of Board Committees of other companies showing the position as on 31 March, 2012are given below:

Name Category Attendance at No. of No. of CommitteesOutside and Positions held

Directorships in Companies

Board Last Member ChairmanMeetings AGM

Mr S Ramadorai Non-Independent 5 Yes 14 5 4(Chairman) Non-Executive

Mr R Ramanan Non-Independent 5 Yes 1 1 -(MD & CEO) Executive

Dr KRS Murthy Independent 5 Yes 3 2 2Non-Executive

Mr Surendra Singh Independent 5 Yes 5 4 3Non-Executive

Ms Kalpana Morparia Independent 5 Yes 2 1 1Non-Executive

Mr S Mahalingam Non-Independent 5 Yes 4 - 1Non-Executive

Mr Sudhakar Rao Independent 4 N.A. 5 5 -(w.e.f. 11 July, 2011) Non-Executive

Other directorships do not include alternate directorships, directorships of private limited companies, Section 25 companies and ofcompanies incorporated outside India. Chairmanships/Memberships of Board Committees include only Audit and Shareholders/Investors Grievance Committees of public limited companies.

Particulars of the Non-Executive Directors retiring by rotation and eligible for re-appointment have been given in the attachment tothe Notice and their profile is also appearing elsewhere in the Report.

The Company has received declarations on six criterions of independence as prescribed in Clause 49.1.A (iii) of the Listing Agreementsfrom Independent Directors.

No Director of the Company is related to any other Director of the Company.

(D) Code of Conduct

(i) The Board of Directors has laid down Code of Conduct for all Board Members and Senior Management of the Company. Thecopies of Code of Conduct as applicable to the Directors as well as Senior Management of the Company are uploaded on thewebsite of the Company - www.cmcltd.com.

(ii) The Members of the Board of Directors and Senior Management personnel have affirmed the compliance with the Code applicableto them during the year ended 31 March, 2012. The Annual Report of the Company contains a Certificate by the ManagingDirector & CEO in terms of Clause 49 of the listing agreement.

3. Board Committees

3.1 Audit Committee

(A) Qualified and Independent Audit Committee

The Company complies with the provisions of Section 292A of the Companies Act, 1956 as well as requirements under the listingagreement pertaining to the Audit Committee. Its functioning is as under:

(i) The Audit Committee presently consists of the three Non-Executive Directors, all of them are Independent Directors.

(ii) All members of the Committee are financially literate and having the requisite financial management expertise.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM34

35

(iii) The Chairman of the Audit Committee is an Independent Director.

(iv) The Chairman of the Audit Committee was present at the last Annual General Meeting held on 27 June, 2011.

(B) Terms of reference

The terms of reference of the Audit Committee include inter-alia:

i) Review of the quarterly/annual financial results with the management and the statutory auditors.

ii) Review with the management, statutory auditors and the internal auditors about the nature and scope of audit and of theadequacy of internal control systems.

iii) Consideration of the reports of the internal auditors and the discussion about their findings with the management and suggestingcorrective actions, wherever necessary.

iv) Authority to investigate into any matter covered by Section 292A of the Companies Act, 1956.

v) Reviewing the Company's risk and its mitigation plan.

vi) Review of the financial reporting process and disclosure of financial information.

vii) Recommending the appointment of Statutory and Internal Auditors, fixation of audit fee and approval for payment for any otherservices.

viii) Reviewing major accounting policies and practices and adoption of applicable Accounting Standards.

ix) Reviewing the findings of any internal investigations by the Internal Auditors and reporting the matters to the Board.

x) Reviewing the compliance with Listing Agreement and various other legal requirements concerning financial statements andrelated party transactions.

xi) Disclosure of Contingent liabilities.

xii) Review the independence of Auditors.

xiii) Ensure that adequate safeguards have been taken for legal compliance both for the Company and its other foreign Subsidiaries.

(xiv) Reviewing compliance with respect to the Company's Whistle Blower Policy.

(C) Composition, names of Members and Chairperson, its meetings and attendance:

The Chairman of the Audit Committee is Dr KRS Murthy. During the year, 8 Audit Committee meetings were held on April 18, June 27,July 11, September 07, October 11, December 14 in 2011 and on January 13, February 22 in 2012.

The composition of the Audit Committee and number of meetings attended by the Members are given below:

Name of member Category Number of meetings Eligible to Meetings attendedattend during 2011-12

Dr KRS Murthy Independent 8 8Non-Executive

Mr Surendra Singh Independent 8 8Non-Executive

Ms Kalpana Morparia Independent 5 5till October 11, 2011 Non-Executive

Mr Sudhakar Rao Independent 3 3w.e.f. October 11, 2011 Non-Executive

The Committee meetings are attended by invitation by the Managing Director & CEO, CFO, the representatives of Statutory Auditorsand representatives of the Internal Auditors. The Company Secretary acts as the Secretary of the Audit Committee.

The internal and statutory auditors of the Company discuss their audit findings and update the Audit Committee and submit theirviews directly to the Committee. Separate meetings are held with the internal auditors to focus on competence issues and to conductdetailed reviews of the processes and internal controls in the Company.

3.2 Governance Committee

(A) Constitution

The Governance Committee comprises of Dr KRS Murthy as the Chairman of the Committee and Mr S Ramadorai, Mr Surendra Singh,Ms Kalpana Morparia and Mr S Mahalingam as the Members of the Committee.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM35

CMC Limited


36

(B) Terms of reference

Terms of reference of the Governance Committee include:

1. To consider all payments to Directors and Senior Executives one level below the Board.

2. Making recommendations regarding the composition of the Board.

3. To identify the Independent Directors and to refresh the composition of Board from time to time.

(C) Meetings and attendance during the year

During the year, 2 Governance Committee meetings were held on April 18 and July 11 in 2011.

The composition of the Governance Committee and number of meetings attended by the Members are given below:

Name of member Category Number of meetings Number ofheld during 2011-12 Meetings attended


Mr S Ramadorai Non-Independent 2 2Non-Executive


Ms Kalpana Morparia Independent 2 2Non-Executive

Mr S Mahalingam Non-Independent 2 2Non-Executive

(D) Remuneration policy

The Remuneration policy of your Company is a comprehensive policy which is competitive, in consonance with the industry practicesand rewards good performance of the employees of the Company. The policy ensures equity, fairness and consistency in rewardingthe employees on the basis of performance against set objectives. The Company has in place Performance Focused ManagementSystem which aims at focusing and aligning the performance of the individual employees to the organizational objectives. The systeminvolves a comprehensive process which includes different stages like goal setting exercise, performance review ratings and rewards.It ensures that all employees know what is expected of them in their job and are able to measure their performance. It provides aframework which assists employees to develop their capabilities.

The Company's remuneration policy is driven by the success and performance of the individual employee and the Company. Throughits compensation program, the Company endeavors to attract, retain, develop and motivate a high performance workforce. TheCompany follows a compensation mix of fixed and variable pay. Individual performance pay is determined by business performanceand the performance of the individuals measured through the annual appraisal process.

The Company pays remuneration by way of salary, benefits, perquisites, Superannuation benefits and allowances to its ManagingDirector & CEO. Annual increments consist of fixed and variable pay is recommended by the Governance Committee within the salaryscale approved by the Members and is effective April 1 of every year. Variable pay is payable on the performance of the Company andthe individual performance. The Governance Committee recommends to the Board, the commission payable to the Non-ExecutiveDirectors out of the profits for the financial year and within the ceilings prescribed under the Companies Act, 1956 based on theperformance of the Company as well as that of each Non-Executive Director.

(E) Remuneration to Managing Director & CEO

(a) The remuneration of the Managing Director & CEO is recommended by the Governance Committee to the Board of Directorsbased on criteria such as industry Benchmarks, the Company's performance vis-à-vis the industry, performance track record ofthe Managing Director & CEO.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM36

37

(b) Mr R Ramanan is the Managing Director & Chief Executive Officer of the Company. The salary, benefits and perquisites paid to MrR Ramanan, Managing Director & CEO during the year 2011-12 were Rs 128.29 Lacs.

Details of Remuneration to MD & CEO Amount ( ` / Lacs)

Salary 103.43Allowances and Perquisites 16.38Contribution to Retiral funds 8.48Stock options NilNumber of Shares held NilService Contracts 13.12.2009 to 30.4.2013Notice period 6 Months

(F) Remuneration to Non-Executive Directors

(a) The Non-Executive Directors are entitled to sitting fee for attending the Board/Committee Meetings. A sitting fee of ` 20,000 forattending each meeting of the Board, Audit and Governance Committee and ` 10,000 for attending each of the Shareholders/Investors Grievance, Executive and Ethics & Compliance Committee Meetings was paid to the Non-Executive Directors duringthe year under review.

The Non-Executive Directors are also considered for payment of commission up to 1% of the net profit of the Company. TheBoard considered the performance of the Non-Executive Directors based on their attendance and contribution at the Board andCommittee meetings. The Company also reimburses the out-of-pocket expenses incurred by the Directors for attending themeetings.

Payment of sitting fee and Commission to the Non-Executive Directors for the year ended 31 March, 2012 are as under:

Name of Director Sitting Fee Commission( ` / Lacs) ( ` / Lacs)

Mr S. Ramadorai 1.70 17

Dr KRS Murthy 3.80 13

Mr Surendra Singh 3.90 13

Ms Kalpana Morparia 2.70 11

Mr S Mahalingam 1.70 –

Mr Sudhakar Rao 1.40 6

Notes:

(i) The Non-Executive Directors have disclosed that they do not hold any shares in the Company.(ii) There has been no pecuniary relationship or transactions of the Non-Executive Directors vis-à-vis the Company during the

year under review.

3.3 Shareholders/Investors Grievance Committee

(A) Composition, names of Members and Chairperson, its meetings and attendance

The Board has constituted a Shareholders/Investors Grievance Committee with Mr Surendra Singh as Chairman of the Committeewith Mr R Ramanan and Dr KRS Murthy as members of the Committee. The Committee is set up to oversee the performance of theRegistrars and Share Transfer Agents with respect to redressal of Shareholders grievances etc. The said Committee would alsorecommend measures for overall improvement of the quality of Investor services.

The process of share transfer as well as review of redressal of investors/shareholders grievances is undertaken on fortnightly basis bythe Registrar and Share Transfer Agents and the Compliance Officer. However, the matters related to issue of fresh Share Certificatesare dealt with by the Shareholders/Investors Grievance Committee.

The Board has delegated the powers to the Registrar and Transfer Agents (RTA) to attend to Share Transfer formalities once in afortnight in accordance with Clause 49(IV)(G) and the RTA has convened 22 concall meetings with the Compliance Officer during theyear under review for the purpose.

During the year, 05 meetings of the Shareholders/Investors Grievance Committee were held on April 18, June 10, July 11 and October11 in 2011 and on January 13 in 2012.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM37

CMC Limited


38

The composition of the Shareholders/Investors Grievance Committee and number of meetings attended by the Members are givenbelow:




Mr R Ramanan Non-Independent 5 4Executive

(B) Name and Designation of the Compliance Officer

Mr Vivek Agarwal, Company Secretary, is the Compliance Officer and can be contacted at:

CMC Limited Tel: 91 11 2373 6151PTI Building, 5th Floor Fax: 91 11 2373 61594, Sansad Marg E-mail: [email protected] Delhi-110 001

In addition to the above e-mail of the Compliance Officer, the Investors/Shareholders can also lodge their complaints, if any, [email protected]. A link has also been provided to the Shareholders to register their grievances to Company's websitewww.cmcltd.com.

The Company Secretary has been designated as Compliance Officer of the Committee in line with the requirement of Listing Agreementwith the Sock Exchanges.

(C) Number of complaints received and redressed during the year 2011-12

Opening Balance Received during Resolved during Closing Balancethe year 2011-12 the year

0 23 23 0

As required under Clause 47(c) of the Listing Agreement, a Certificate on half-yearly basis confirming due compliance of share transferformalities by the Company from Practising Company Secretary has been submitted to the Stock Exchanges within stipulated time.

(D) Suspense Account for the unclaimed shares

Pursuant to Clause 5A of the Listing Agreement, the requisite information as per aforesaid Clause is given below:

No. of Opening Shares credited Requests Shares No. of ClosingShareholders Balance during the year received during transferred Shareholders Balanceas on 01.04.2011 of Shares in due to bonus the year 2011-12 during as on of Shares

Suspense issue the year 31.03.2012 in Suspense Account Account

21 167 167 0 0 21 334*

* The voting rights on these shares shall remain frozen till the rightful owner of such shares claim the shares

3.4 Executive Committee

(A) Composition of Executive Committee and terms of reference, its meetings and attendance

The Executive Committee of the Company comprises of Mr S Ramadorai as Chairman and Mr R Ramanan, Dr KRS Murthy, Mr SurendraSingh, Ms Kalpana Morparia and Mr S Mahalingam as members of the Committee.

The terms of reference of the Executive Committee inter-alia, includes the following:

- Long term financial projections and cash flows.

- Capital and Revenue Budgets and Capital Expenditure Programs.

- Acquisitions, divestment and business restructuring proposals.

- Senior management succession planning.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM38

39

During the year, 3 Executive Committee meetings were held on August 18, and December 14 in 2011 and February 22 in 2012.

The composition of the Executive Committee and number of meetings attended by the members are given below:


Mr S Ramadorai Non-Independent 3 3Non-Executive




Ms Kalpana Morparia Independent 3 3Non-Executive

Mr S Mahalingam Non-Independent 3 3Non-Executive

3.5 Ethics & Compliance Committee

(A) In terms of the Company's Code of Conduct for Prevention of Insider Trading and the Code of Corporate Disclosure Practices (InsiderTrading Code) to be followed by Directors, Officers and other employees, the Company has constituted a Committee called Ethics andCompliance Committee. The Committee considers matters relating to the Insider Trading Code and also considers matters relating tothe Company's Code of Conduct.

(B) Terms and reference of the Ethics & Compliance Committee

The terms of reference of the Ethics & Compliance Committee are as under:

(i) Set forth the policies relating to and oversee the implementation of the Code of Conduct for Prevention of Insider Trading andCode of Corporate Disclosure Practices.

(ii) Take on record the status reports prepared by the compliance officer dealing in securities by the specified persons on monthlybasis.

(iii) To decide penal action in respect of violation of the SEBI Regulations/code by any specified person.

(iv) To review the implementation of MBE (Management of Business Ethics) plan in the Company

(C) Composition of the Ethics & Compliance Committee, its meetings and attendance

The Company has Ethics & Compliance Committee with Mr Surendra Singh as the Chairman of the Committee and Mr R Ramanan andMr Vivek Agarwal as the members of the Committee. Mr J K Gupta is the Compliance Officer.

During the year, 1 meeting of the Ethics & Compliance Committee was held on 14 December, 2011.

The composition of the Ethics & Compliance Committee and number of meetings attended by the Members are given below:




Mr Vivek Agarwal Company Secretary 1 1

4. Subsidiary Company

(i) The Company does not have any Indian Subsidiary Company.

(ii) The financial statements of the unlisted foreign Subsidiary Companies are being placed before the Board.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM39

CMC Limited


40

5. Disclosures

(A) Basis of related party transactions

(i) The statements containing the transactions with related parties were submitted periodically to the Audit Committee.

(ii) There are no related party transactions that may have potential conflict with the interest of the Company at large.

(iii) There were no material individual transactions with related parties during the year, which were not in the normal course ofbusiness as well as not on an arm's length basis.

(iv) There is no non-compliance by the Company and no penalties, strictures imposed on the Company by Stock Exchange or SEBI orany statutory authority, on any matter related to capital market, during the last three years.

(B) Disclosure of Accounting Treatment

During the year, there has been no change in Accounting Standard.

(C) Board Disclosures - Risk Management

The Company has laid down procedures to inform the Board of Directors about the Risk Management and its minimization procedures.The Audit Committee and Board of Directors review these procedures periodically.

(D) Proceeds from public issues, right issues, preferential issues etc.

The Company did not have any of the above issues during the year under review.

(E) Whistle Blower Policy

The Company is having Whistle Blower Policy and no personnel has been denied access to the Audit Committee.

(F) Secretarial Audit Report

The Company has obtained Secretarial Audit Report on quarterly/Annual basis from the Company Secretary in practice for compliancewith the applicable provisions of the Companies Act, 1956, Listing Agreement, SEBI Regulations on Takeover, Insider Trading andDepositories & Participants. A text of the Annual Secretarial Audit Report is annexed elsewhere.

(G) Management Discussion and Analysis Report

The Management Discussion and Analysis Report have been included separately in the Annual Report to the Shareholders.

(H) Shareholders

(i) The quarterly results and presentations made by the Company to analysts are put on the Company's website www.cmcltd.comunder the Disclosure Requirements Section.

(ii) The Company has also sent Annual Report through email to those Shareholders who have registered their email ids withDepositary Participant.

(iii) Mr Sudhakar Rao has been appointed during the year under review as an Independent Director and holds office till the ensuingAnnual General Meeting and is eligible for appointment as Director of the Company. Mr S Mahalingam and Dr KRS Murthy areretiring by rotation at the ensuing Annual General Meeting. Mr S Mahalingam being eligible, offers himself for re-appointmentas Non-Executive Director. Dr KRS Murthy has expressed his desire not to seek re-appointment as Director of the Company.

The profiles of Mr S Mahalingam and Mr Sudhakar Rao are furnished below:

(A) MR S MAHALINGAM

Ms S Mahalingam, Chartered Accountant by qualification, started his professional career with Tata Consultancy Services in 1970as an IT Consultant. Thereafter, he played a major role in marketing TCS services across the globe, developing processes andcreating large software development centers for the Company. He is now CFO and Executive Director of TCS.

As an early starter in the Indian IT industry, Mr Mahalingam has played a key role in helping TCS become a $10 billion globalCompany with over 2,25,000 employees.

Mr Mahalingam's experience, during the formative years of the IT industry in the 1970s and 1980s, has given him a significantstanding within the IT industry. He is a former Chairman of the Southern Region of Confederation of Indian Industry (CII), India'sapex industry body as well as a Fellow of the Computer Society of India. He was also the President of the Institute of ManagementConsultants of India. He is on the Board of several other companies .

(B) MR SUDHAKAR RAO

Sudhakar Rao, 63, is a retired IAS Officer of 1973 batch. Rao holds a Masters Degree in Economics from the Delhi School ofEconomics and a Masters Degree in Public Administration from the Kennedy School of Government, Harvard University. He heldseveral key positions in the State Government of Karnataka as Chairman & Managing Director of the Karnataka Urban Infrastructure

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM40

41

Development and Finance Corporation (KUIDFC), Principal Secretary- Finance; Principal Secretary- Home; Principal Secretary tothe Chief Minister of Karnataka; Chief Secretary of Karnataka etc. He also served the Union Government as Director in PrimeMinister's Office, Jt. Secretary in the Ministry of Power; Minister (Economic) in the Embassy of India in Washington etc. He alsoserved as a Member of the Public Enterprises Selection Board for a year.

Mr Rao is on the Boards of various prominent companies viz. Indian Oil Corporation Limited, Bombay Stock Exchange Ltd, L&TInfrastructure Development Projects Ltd, Binani Group etc. He is also Group Advisor to the Manipal Education and MedicalGroup.

Mr Rao was conferred the Kannada Rajyotsava Award by the Government of Karnataka in 2010.

6. CEO and CFO Certification

The Managing Director & CEO and CFO of the Company give quarterly/annual certification on financial reporting and internal controlsto the Board in terms of Clause 49(V) of the Listing Agreement.

7. Compliance on Corporate Governance

The quarterly compliance report has been submitted to the Stock Exchanges where the Company's equity shares are listed in therequisite format duly signed by the Compliance Officer. Pursuant to Clause 49 of the Listing Agreement, the Auditor's Certificate incompliance on conditions of Corporate Governance is published elsewhere in the Annual Report.

8. General Body Meetings

(A) Location and time of General Meetings held in the last 3 years

Year Date Venue of Meeting Time Whether any Special Resolutionpassed in previous AGM

2009 26.06.2009 Bhaskara Auditorium, B M Birla 3.30 p.m. NoScience Centre, Adarsh Nagar,Hyderabad – 500 063, A.P.

2010 29.06.2010 - do - 3.00 p.m. No

2011 27.06.2011 CMC’s Auditorium, CMC Centre, 3.00 p.m. NoOld Mumbai Highway, Gachibowli,Hyderabad - 500 032

(B) Passing of Resolution by Postal Ballot

A special resolution and an ordinary resolution for amendment in Articles of Association of the Company for capitalization of profitsand Issue of Bonus Shares as contained in a Postal Notice to the Shareholders dated 26 April, 2011 were passed during the yearthrough Postal Ballot process. Dr S Chandrasekaran, Senior Partner, Chandrasekaran Associates, Company Secretary in whole timepractice, was appointed as the Srutinizer for the Postal Ballot process. The results of the postal ballot were declared on 31 May, 2011.Details of the voting pattern were as under:

Resolution Description of Resolution Number ofValild VOTING PATTERNVotes Cast

FOR AGAINST

Special Resolution Amendment in Articles of 10482830 10482803 27Association of the Company forinsertion of Article oncapitalization of profit

Ordinary Resolution Issue of Bonus Shares 10482734 10482721 13

Accordingly, the said Resolutions were approved by the shareholders, with requisite and overwhelming majority.

2 CMC - PG 12-48.p65 2012/06/01, 09:57 AM41

CMC Limited


42

9. Means of Communication

The Company's website is a comprehensive reference on CMC Ltd.'s management, vision, mission, policies, corporate governance,corporate sustainability, investor relations, sales network, updates and news. The section on Investors serves to inform the shareholders,by giving complete financial details, shareholding patterns, Dividend Policy, information relating to stock exchanges, registrars, sharetransfer agents and frequently asked questions. The website covers all major press reports, releases, awards, campaigns.

The Company regularly interacts with the shareholders through the multiple channels of communication such as publication ofresults, Annual Report, press releases, Analysts Call after the Board Meeting and the Company's website. The Company also informsthe Stock Exchanges in a prompt manner, all price sensitive information and all such other matters which in its opinion, are materialand relevant for the shareholders.

Quarterly report sent to each household of shareholders. The results of the Company are published in the the newspapers.

Quarterly results and in which newspaper normally published in. Results are published in The Hindu. Business Line (all editions)and in Prajashakti (Telugu – Hyderabad edition).

Any website where displayed. Yes, the results are displayed on the Company’s websitewww.cmcltd.com under Investor Center-DisclosureRequirements Section.

Whether it also displays official news releases. Yes

Whether the website displays the presentation made to Yesthe institutional investors and to the analysts.

10. General Shareholder Information

Annual General Meeting:

(i) Date, time and Venue : Wednesday, 27 June, 2012 at 3.00 P.M.CMC’s Auditorium, CMC Ltd.CMC Centre, Old Mumbai Highway Gachibowli, Hyderabad – 500 032

(ii) Financial Year : 1st April to 31st March

(iii) Date of Book Closure : Thursday, 21 June, 2012 to Wednesday 27 June, 2012 (both days inclusive)

(iv) Dividend : ` 12.50 per equity share of face value of ` 10 each.

(v) Dividend Payment Date : Dividend will be paid on or after 4 July, 2012 but before 26 July, 2012.

(vi) Tentative Calendar for financial year ending 31 March, 2013:

Quarterly Financial Results Date of Board Meeting

First Quarterly Results 11 July, 2012

Second Quarterly Results 15 October, 2012

Third Quarterly Results 11 January, 2013

Fourth Quarterly Results 18 April, 2013

(vii) Listing

The Stock Exchanges on which the Company’s shares are listed:• BSE Limited• National Stock Exchange of India Limited• The Calcutta Stock Exchange Limited

(viii) Stock Code

BSE Limited : 517326

National Stock Exchange of India Limited : CMC

The Calcutta Stock Exchange Limited : 10000071

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM42

43

(ix) Market price information

a. The reported high and low closing prices during the year ended 31 March, 2012 on the National Stock Exchange and theBombay Stock Exchange, where your Company's shares are frequently traded vis-à-vis the Share Index, are given below:

Month NSE BSE BSE SENSEX

High (`) Low (`) High (`) Low (`) High Low

Apr-11 2349.00 1981.95 2337.00 1990.10 19811.14 18976.19May-11 2790.00 1908.20 2780.00 2015.00 19253.87 17786.13Jun-11 * 2604.90 1004.15 2608.90 1048.10 18873.39 17314.38Jul-11 1224.70 1111.00 1226.00 1115.00 19131.70 18131.86Aug-11 1146.00 908.00 1167.85 901.00 18440.07 15765.53Sept-11 960.00 791.00 974.00 790.00 17211.80 15801.01Oct-11 912.80 721.30 850.00 728.00 17908.13 15745.43Nov-11 1036.80 791.50 910.00 800.00 17702.26 15478.69Dec-11 907.00 741.00 902.00 745.75 17003.71 15135.86Jan-12 1000.00 799.05 1001.00 800.00 17258.97 15358.02Feb-12 1100.00 923.85 1099.00 902.00 18523.78 17061.55Mar-12 1095.55 949.50 1099.45 951.65 18040.69 16920.61

* Company has issued bonus shares in the ratio 1:1 on10 June, 2011.

b. Performance in comparison to BSE Sensex

The performance of the Company’s scrip on the BSE as compared to the Sensex is as under:

1 April, 2011 31 March, 2012 % CHANGE

Company Share Price ` 2084.45 ` 994.80 -4.55*Sensex 19420.39 17404.20 -10.38

* Adjusted for 1:1 bonus shares issued on 10 June, 2011.

(x) Registrars and Share Transfer Agents

The Members are requested to correspond to the Company's Registrars & Share Transfer Agents - M/s Karvy ComputersharePrivate Limited quoting their Folio Number, Client ID and DP ID at the following address:

M/s Karvy Computershare Private LimitedUnit : CMC LimitedPlot No. 17-24, Vittal Rao NagarMadhapur, Hyderabad – 500 081Tel: 91 40 2342 0818Fax: 91 40 2342 0814Email: [email protected]

(xi) Shareholding as on 31 March, 2012

(a) Distribution of shareholding as on 31 March, 2012

No. of shares No. of % of Total no. % of holdingshareholders shareholders of shares

1-500 27693 97.68 923309 3.05501-1000 393 1.39 306742 1.011001-2000 103 0.36 153369 0.52001-3000 36 0.13 88359 0.293001-4000 21 0.07 78137 0.264001-5000 8 0.03 38875 0.135001-10000 27 0.09 186500 0.6210001 & above 71 0.25 28524709 94.14Total 28352 100.00 30300000 100.00Physical Mode 61 0.22 17064 0.06Electronic Mode 28291 99.78 30282936 99.94

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM43

CMC Limited


44

(b) Shareholding pattern as on 31 March, 2012

Category No. of shares % of issuedheld share capital

Promoter-Tata Consultancy Services Limited 15489922 51.12Mutual Funds and UTI 3896000 12.86Financial Institutions / Insurance Companies 2617659 8.64FIIs 5836732 19.27NRIs/Foreign Nationals 116084 0.38Corporate Bodies 416416 1.37Indian Public & Others 1927187 6.36

Total 30300000 100.00

(c) Capital of the Company

The authorized and paid-up capital of your Company is ̀ 35 crores and ̀ 30.30 crores respectively. The Company has changedits share capital due to bonus issue during the year under review.

(d) Top ten Shareholders as on 31 March, 2012

Category Name No. of shares % of issuedheld share capital

Promoter Tata Consultancy Services Limited 15489922 51.12

FII Aberdeen Global Indian Equity Fund Mauritius Limited 1920000 6.34

Mutual Fund HDFC Trustee Company Limited - HDFC Equity Fund 1912832 6.31

IFI Life Insurance Corporation of India 1198165 3.95

FII Aberdeen Global - Asian Smaller Companies Fund 1073001 3.54

FII Mathews India Fund 940418 3.10

IFI General Insurance Corporation of India 813882 2.69

FII Government Pension Fund Global 525768 1.74

IFI The New India Assurance Company Limited 508262 1.68

Mutual Fund HDFC Trustee Company Limited - HDFC Top 200 Fund 471168 1.56

(e) Reminder to Investors :

Reminders for unpaid dividend are sent to those Shareholders whose dividend is lying unclaimed in CMC Dividend Accountsas per Bank records every year.

(xii) Dematerialisation of shares and liquidity

99.94% of the equity shares have been dematerialised by about 99.78% of the total shareholders as on 31 March, 2012. TheCompany's shares can be traded only in dematerialised form as per SEBI notification. The Company has entered into Agreementwith NSDL and CDSL whereby shareholders have the option to dematerialise their shares with either of the depositories. Equityshares are actively traded in BSE and NSE.

(xiii) Outstandings GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity

The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments.

2 CMC - PG 12-48.p65 2012/06/01, 07:35 PM44

45

(xiv) Plant locations

The Company is not a manufacturing unit and thus not having any Plant. However, the offices of the Company are located inalmost all main cities in India.

(xv) Address for correspondence

The Company SecretaryCMC Limited, 4, Sansad MargNew Delhi-110 001Tel. : 91 11 2373 6151-58Fax : 91 11 2373 6159Email : [email protected]

(xvi) Electronic Clearing Service (ECS)

The Company is availing of the ECS facility to distribute dividend in main cities to those Members who have opted for it.

11. Reconciliation of Share Capital

As stipulated by SEBI, a qualified Practising Company Secretary carries out Reconciliation of Share Capital to reconcile the total admitted,issued and listed capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL)and Stock Exchanges.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM45

CMC Limited


46

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIORMANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

This is to certify that the Company has laid down Code of Conduct for all Board Members and Senior Management of theCompany and the copies of the same are uploaded on the website of the Company - www.cmcltd.com.

Further certified that the Members of the Board of Directors and Senior Management personnel have affirmed having compliedwith the Code applicable to them during the year ended 31 March, 2012.

Mumbai R Ramanan18 April, 2012 Managing Director & CEO

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

TO THE MEMBERS OFCMC LIMITED

1. We have examined the compliance of conditions of Corporate Governance by CMC Limited ("the Company"), for theyear ended on 31 March, 2012, as stipulated in clause 49 of the Listing Agreement of the said Company with the stockexchanges.

2. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination hasbeen limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring thecompliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on thefinancial statements of the Company.

3. In our opinion and to the best of our information and according to the explanations given to us, and the representationsmade by the Directors and the management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the Clause 49 of the above mentioned Listing Agreement.

4. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For Deloitte Haskins & SellsChartered Accountants

(Firm Registration No. 015125N)

Alka ChadhaNew Delhi Partner30 April, 2012 (Membership No. 93474)

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM46

47

SECRETARIAL AUDIT REPORTCompany No. : 01-1970

Nominal Capital : ` 35,00,00,000/-

To,

The Shareholders of CMC Limited

We have examined the registers, records and documents of CMC Limited (the Company) for the financial year ended 31st

March 2012 in the light of the provisions contained in-

• The Companies Act, 1956 and the Rules made thereunder.

• The Depositories Act, 1996 and the Rules made thereunder and the bye-laws of the Depositories who have been

given the requisite Certificates of Registration under the Securities and Exchange Board of India Act, 1992

• The Securities Contracts (Regulation) Act, 1956 and the rules made thereunder.

• The Securities and Exchange Board of India Act, 1992 and the Rules, Guidelines and Regulations made thereunder

including:

• The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

• The Securities and Exchange Board of India (Prohibition of Insider Trading Regulations), 1999; and

• The listing agreement with the National Stock Exchange, Bombay Stock Exchange and Calcutta Stock Exchange.

A. Based on our examination and verification of the records made available to us and according to the clarifications

and explanations given to us by the Company, we report that the Company has, in our opinion, complied with the

applicable provisions of the Companies Act, 1956 and the rules made thereunder and of the various Acts and the

Rules, Regulations and Guidelines made thereunder, listing agreement as mentioned above and of the

Memorandum and Articles of Association of the Company, with regard to:

1. Maintenance of various statutory and non-statutory registers and documents and making necessary changes

therein as and when the occasion demands.

2. Filing with the Registrar of Companies the Forms, returns and resolutions.

3. Service of the requisite documents by the Company on its members, Registrar and Stock Exchanges.

4. Composition of the Board, appointment, retirement and resignation of directors.

5. Remuneration of executive and non-executive directors.

6. Service of notice and agenda of Board Meetings and Meetings of the committee of directors.

7. Meeting of the Board and its committees.

8. Holding Annual General Meeting and production of the various registers thereat.

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM47

CMC Limited


48

9. Recording the minutes of proceedings of board meetings, committee meetings and General Meetings.

10. Appointment and remuneration of Auditors.

11. The Company has declared dividend and paid to the eligible shareholders in compliance with the provisions of

section 205 of the Act during the year.

12. The Company has transferred the unclaimed/unpaid dividend to Investor Education and Protection Fund in

compliance with the provisions of section 205C of the Act during the year.

13. Registration of transfer of shares held in physical mode.

14. Dematerialisation and Rematerialisation of shares.

15. Execution of contracts, affixation of common seal, registered office and the name of the Company.

16. Requirement of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)

regulations 2011.

17. Requirement of the Securities and Exchange Board of India (Prohibition of Insider Trading regulations) 1999

18. Requirements set out in the listing agreement with the aforementioned stock exchanges.

B. We further report that during the year-

(i) the directors of the Company have complied with the various requirements relating to making of disclosures,

declarations in regard to their other directorships, memberships of committees of the board of companies of

which they are directors, their shareholding and interest or concern in the contracts entered into by the Company

in the pursuing its normal business, and

(ii) There was no prosecution initiated against or show cause notice received by the Company and no fine or penalties

were imposed on the Company under the aforementioned Acts, Rules, Regulations and guidelines made thereunder

or on its directors and officers.

For Chandrasekaran AssociatesCompany Secretaries

New Delhi Dr. S. Chandrasekaran12 April, 2012 Senior Partner

FCS : 1644CP : 715

2 CMC - PG 12-48.p65 2012/06/01, 08:18 AM48

49

AUDITORS’ REPORT

TO THE BOARD OF DIRECTORS OFCMC LIMITED

1. We have audited the attached Consolidated Balance Sheet of CMC Limited ("the Company") and its subsidiaries (theCompany and its subsidiaries constitute "the Group") as at 31 March, 2012, the Consolidated Statement of Profit and Lossand the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. Thesefinancial statements are the responsibility of the Company's Management and have been prepared on the basis of theseparate financial statements and other financial information regarding components. Our responsibility is to express anopinion on these Consolidated Financial Statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosuresin the financial statements. An audit also includes assessing the accounting principles used and the significant estimatesmade by the Management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with therequirements of Accounting Standard 21 (Consolidated Financial Statements) as notified under the Companies(Accounting Standards) Rules, 2006.

4. Based on our audit and on consideration of the separate audit report on the individual financial statements of theCompany, and the aforesaid subsidiaries and to the best of our information and according to the explanations given tous, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accountingprinciples generally accepted in India:

a. in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31 March, 2012;b. in the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that

date, and;c. in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.



Alka ChadhaPartner

MUMBAI, 18 April, 2012 (Membership No. 93474)

3 CMC - Conso-49-53.p65 2012/06/01, 08:18 AM49

CMC Limited

50


CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2012

Particulars Note As at As atNo. 31 March, 2012 31 March, 2011

` / lacs ` / lacs

A. EQUITY AND LIABILITIES

1. Shareholders’ Funds(a) Share capital 4 3,030.00 1,515.00(b) Reserves and surplus 5 74,188.95 63,886.95

77,218.95 65,401.952. Non-current liabilities

(a) Other long-term liabilities 6 1,214.86 720.68(b) Long-term provisions 7 2,745.73 2,511.76

3,960.59 3,232.443. Current liabilities

(a) Trade payables 8 26,197.91 17,326.67(b) Other current liabilities 9 4,966.23 7,694.12(c) Short-term provisions 10 12,582.30 10,080.95

43,746.44 35,101.74

TOTAL 124,925.98 103,736.13

B. ASSETS

1. Non-current assets(a) Fixed assets

(i) Tangible assets 11 25,813.55 9,607.32(ii) Capital work-in-progress 3,338.57 10,754.95(iii) Goodwill on consolidation 34.12 34.12

29,186.24 20,396.39

(b) Deferred tax assets (net) 12 1,096.92 882.18(c) Long-term loans and advances 13 14,062.64 9,644.48

15,159.56 10,526.662. Current assets

(a) Current investments 14 15,157.80 22,617.05(b) Inventories 15 1,340.68 1,346.90(c) Trade receivables 16 38,211.89 25,212.63(d) Cash and cash equivalents 17 5,882.45 5,653.06(e) Short-term loans and advances 18 4,963.03 5,534.68(f ) Other current assets 19 15,024.33 12,448.76

80,580.18 72,813.08

TOTAL 124,925.98 103,736.13

In terms of our report attached

For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants

Alka Chadha S. Mahalingam R. Ramanan Singh SPartner Director Managing Director & CEO

J. K. Gupta Vivek AgarwalChief Financial Officer Company Secretary

Mumbai Mumbai18 April, 2012 18 April, 2012

See accompanying notes forming part of theconsolidated financial statements 1 to 30

3 CMC - Conso-49-53.p65 2012/06/01, 08:18 AM50

51

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2012

Particulars Note For the year ended For the year endedNo. 31 March, 2012 31 March, 2011

` / lacs ` / lacs

1. Income(a) Revenue from operations 20 146,934.24 108,440.44(b) Other income 21 1,745.98 1,179.93

2. Total revenue 148,680.22 109,620.37

3. Expenses(a) Purchases of stock-in-trade 22 14,539.52 9,927.97(b) Changes in inventories of work-in-progress and stock-in-trade 23 (33.48) (323.36)(c) Employee benefits expense 24 44,022.05 34,512.60(d) Finance costs 25 1.54 22.03(e) Depreciation and amortisation 11 2,136.96 1,045.96(f ) Other expenses 26 65,973.74 43,252.40

4. Total expense 126,640.33 88,437.60

5. Profit before tax (2-4) 22,039.89 21,182.77

6. Tax expense(a) Current tax expense for current year 6,954.02 5,027.25(b) (Less): MAT credit - (1,546.34)(c) Current tax expense relating to prior years 99.85 -(d) Net current tax expense 7,053.87 3,480.91(e) Deferred tax (195.22) (239.00)

6,858.65 3,241.91

7. Profit for the year (5-6) 15,181.24 17,940.86

8. Earnings per share (of ` 10 each)(a) Basic 50.10 59.21(b) Diluted 50.10 59.21






See accompanying notes forming part of theconsolidated financial statements 1 to 30

3 CMC - Conso-49-53.p65 2012/06/01, 08:18 AM51

CMC Limited

52


CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012


` / lacs ` / lacsA. Cash flow from operating activities

Profit before tax 22,039.89 21,182.77Adjustments for:

Depreciation and amortisation 2,136.96 1,045.96Profit on sale of assets (6.44) (27.07)Finance costs 1.54 22.03Interest income (14.88) (10.23)Dividend income (453.13) (680.74)Net gain on sale of investments (1,133.56) (39.43)Liabilities / provisions no longer required written back (120.08) (239.82)Bad trade and other receivables, loans and advances written off 788.66 23.15Provision for doubtful trade and other receivables, loans and advances - 875.84Fixed assets written off 5.07 29.82Exchange difference on translation of foreign currency (13.88) (5.18)cash and cash equivalentNet unrealised exchange (gain) / loss (107.58) (53.52)

1,082.68 940.81Operating profit before working capital changes 23,122.57 22,123.58Changes in working capital:Adjustments for (increase) / decrease in operating assets:

Inventories 6.22 (494.14)Trade receivables (13,680.34) (5,514.76)Short-term loans and advances 571.65 (835.33)Long-term loans and advances (2,610.85) 677.16Other current assets (2,575.57) (1,939.68)Other non-current assets (18,288.89) (8,106.75)

Adjustments for increase / (decrease) in operating liabilities:

Trade payables 8,991.34 4,512.65Non current liabilities 494.17 497.20Other current liabilities (2,664.06) (4,777.85)Short-term provisions 1,620.94 4,736.44Long-term provisions 233.97 121.58

8,676.36 5,090.02Cash generated from operations 13,510.04 19,106.85Net income tax paid (7,934.84) (3,122.73)

Net cash flow from operating activities (A) 5,575.20 15,984.12

B. Cash flow from investing activitiesCapital expenditure on fixed assets, including capital advances (11,955.69) (9,923.58)Proceeds from sale of fixed assets 17.07 92.94Foreign exchange translation reserve 1,037.72 (84.94)Current investments not considered as cash and cash equivalents

Purchased (65,927.55) (101,671.11)Proceeds from sale 74,520.36 98,625.26

Interest received 14.88 10.23Dividend received from mutual funds - others 453.13 680.74

Net cash flow used in investing activities (B) (1,840.08) (12,270.46)

3 CMC - Conso-49-53.p65 2012/06/01, 08:18 AM52

53

C. Cash flow from financing activitiesFinance cost (1.94) (21.59)Proceeds / (payments) of long term borrowings - (1,333.61)Dividend paid (3,026.13) (3,026.64)Tax on dividend (491.54) (480.10)

Net cash flow used in financing activities (C) (3,519.61) (4,861.94)

Net increase / (decrease) in Cash and cash equivalents (A+B+C) 215.51 (1,148.28)Cash and cash equivalents at the beginning of the year 5,653.06 6,796.16Effect of exchange differences on restatement of 13.88 5.18foreign currency Cash and cash equivalents

Cash and cash equivalents at the end of the year 5,882.45 5,653.06

Reconciliation of Cash and cash equivalents with theBalance Sheet:

Cash and cash equivalents as per Balance Sheet 17 5,882.45 5,653.06

Cash and cash equivalents at the end of the year * 5,882.45 5,653.06* Comprises:(a) Cash on hand 48.54 25.19(b) Cheques, drafts on hand 77.88 226.78(c) Balances with banks

(i) In current accounts 4,922.74 3,377.58(ii) In EEFC accounts 270.31 176.59(iii) In deposit accounts 22.24 51.96

- Unpaid dividend accounts 27.84 26.42- Escrow account 509.40 1,768.54- Balances held as margin money against guarantees 3.50 -

5,882.45 5,653.06

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012


` / lacs ` / lacs






3 CMC - Conso-49-53.p65 2012/06/01, 08:18 AM53

CMC Limited

54


NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

1. These financial statement comprise a consolidation of the Balance sheet, the Statement of profit and loss and the Cash flow statementof CMC Limited, a Company incorporated in India, and of the consolidated financial statements of its wholly owned subsidiary CMCAmericas, Inc. incorporated in the United States of America (Collectively referred to as the 'Group').

2 Background

CMC Limited (‘the Parent’ / ‘the Company’) is engaged in the design, development and implementation of software technologies andapplications, providing professional services in India and overseas, and procurement, installation, commissioning, warranty andmaintenance of imported/indigenous computer and networking systems, and in education and training.

The Parent was a Government of India (GoI) enterprise up to 15 October, 2001. Under the disinvestment process, GoI sold 7,726,500shares representing 51 percent of the share capital to Tata Sons Limited, on 16 October, 2001. The GoI further sold its entire remainingshares representing 26.25 percent of the share capital, in March 2004 by an open offer to the public.

On 29 March, 2004, as per specific approval granted by SEBI, Tata Sons Limited transferred its entire shareholding in the Parent to TataConsultancy Services Limited (a subsidiary of Tata Sons Limited). As a result, the Parent has become a subsidiary of Tata ConsultancyServices Limited.

CMC Americas, Inc. (‘the Subsidiary’) renders Information Technology and IT enabled Services in throughout the United States ofAmerica.

3. Significant accounting policies

a. Basis of accounting

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (IndianGAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended)and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under thehistorical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent withthose followed in the previous year.

b. Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates andassumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported incomeand expenses during the year. The Management believes that the estimates used in preparation of the financial statements areprudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and theestimates are recognised in the periods in which the results are known / materialise.

c. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Parent and its subsidiaries made up to 31 Marcheach year. Particulars of subsidiaries are:

Name of the Company Country of Percentage of Percentage ofIncorporation voting power voting power

as at 31 March, 2012 as at 31 March, 2011

Subsidiaries (held directly)CMC Americas, Inc. USA 100% 100%

Subsidiaries (held indirectly)CMC eBiz, Inc. (100% subsidiary of CMC Americas, Inc.w.e.f 27 January, 2011 i.e. date of incorporation) USA 100% 100%

All significant inter-Company transactions and balances are eliminated on consolidation. Goodwill arising on consolidationrepresents the excess of the cost of acquisition over the book value of assets and liabilities at the date of acquisition.

d. Principles of consolidation

The financial statements of the subsidiary used in the consolidation are drawn up to the same reporting date as of the Company.

The consolidated financial statements have been prepared on the following basis:

i. The financial statements of the Company and its subsidiary company have been combined on a line-by-line basis by addingtogether like items of assets, liabilities, income and expenses. Inter-Company balances and transactions and unrealised profitsor losses have been fully eliminated.

ii. The excess of cost to the Company of its investments in subsidiary company over its share of the equity of the subsidiarycompany at the date on which the investment in the subsidiary company are made, is recognised as 'Goodwill' being an asset

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM54

55

in the consolidated financial statements. Alternatively, where the share of equity in the subsidiary companies as on the dateof investment is in excess of cost of investment of the Company, it is recognised as 'Capital Reserve' and shown under thehead 'Reserves and Surplus', in the consolidated financial statements.

e. Inventories

Inventories include stock-in-trade, finished goods, stores and spares and work-in-progress.

i. Inventories are valued at the lower of cost (on First in first out basis in respect of stock-in-trade mainly comprising equipmentfor resale/on weighted average basis in respect of finished goods mainly comprising Education and Training material) andthe net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes allcharges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.

ii. Inventories of stores and spares are valued at cost, net of provision for diminution in the value. Cost is determined on weightedaverage cost basis.

iii. Work-in-progress comprises cost of infrastructural facilities in the process of installation at customers' sites. These are valuedat cost paid/payable to sub-contractors.

f. Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, highly liquid investmentsthat are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

g. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for theeffects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flowsfrom operating, investing and financing activities of the Company are segregated based on the available information.

h. Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act,1956 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under:

• Leasehold assets are amortised over the period of lease.

• Computers, plant and equipment - (other items) are depreciated over six years.

Assets costing less than ` 5,000 individually have been fully depreciated in the year of purchase.

Intangible assets are amortised over the estimated useful life.

i. Revenue recognition

Sale of products

Revenue relating to equipment supplied is recognised, net of returns and trade discounts, on transfer of significant risks andrewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude sales tax andvalue added tax.

Income from services

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs areincurred. Revenues from time bound fixed price contracts, are recognised over the life of the contract using the proportionate ofcompletion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognisedwhen probable.

Revenues from maintenance contracts are recognised pro-rata over the period of the contract.

Revenue from "Education and Training" is recognised on accrual basis over the course term.

j. Other income

Interest income is accounted on accrual basis. Dividend income is accounted when the right to receive it is established.

k. Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includesinterest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended useand other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-termforeign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assetsand depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalised only ifsuch expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard ofperformance.

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM55

CMC Limited

56


Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and aredisclosed separately in the Balance Sheet.

Capital work-in-progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprisingdirect cost, related incidental expenses and attributable interest.

l. Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible assetcomprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from thetaxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any tradediscounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expensewhen incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess ofits originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, inwhich case such expenditure is added to the cost of the asset.

m. Foreign exchange transactions and translations

Initial recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of thetransaction or at rates that closely approximate the rate at the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items of the Company outstanding at the Balance Sheet date are restated at the year-end rates.

Treatment of exchange differences

Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of theCompany are recognised as income or expense in the Statement of profit and loss.

Accounting of forward contracts

Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortisedover the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.

Translation

In respect of the subsidiaries, income and expenses are translated into the reporting currency at the average rate. All assets andliabilities are translated at the closing rate. The resulting exchange differences are transferred to foreign currency translationreserve.

n. Grants

i. Grants received for capital expenditure incurred are included in "Capital Reserve". Fixed assets received free of cost areconsidered as a grant and are capitalised at notional value with a corresponding credit to the Capital Reserve account.

An amount equivalent to the depreciation charge on such assets is appropriated from capital reserve and recognised asrevenue in the statement of profit and loss.

ii. Grants received for execution of projects is recognised as revenue to the extent utilised.

iii. Unutilised grants are shown under other liabilities.

o. Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in the carrying value of eachinvestment. Current investments comprising investments in mutual funds are stated at the lower of cost and fair value, determinedon a portfolio basis. Cost of investments include acquisition charges such as brokerage, fees and duties.

p. Employee benefits

Employee benefits include provident fund, gratuity fund, compensated absences, and post-employment medical benefits.

Post-employment benefit plans

Payment to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits isdetermined using the projected unit credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarialgains and losses are recognised in the Statement of profit and loss in the period in which they occur. Past service cost is recognisedimmediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the averageperiod until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the presentvalue of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM56

57

assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds andreductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employeesare recognised during the year when the employees render the service. These benefits include performance incentive overseassocial security contributions and compensated absences which are expected to occur within twelve months after the end of theperiod in which the employee renders the related service. The cost of such compensated absences is accounted as under:

i. in case of accumulated compensated absences, when employees render the services that increase their entitlement of futurecompensated absences; and

ii. in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employeerenders the related service are recognised as a liability at the present value of the defined benefit obligation as at the BalanceSheet date less the fair value of the plan assets, if any out of which the obligations are expected to be settled.

q. Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currencyborrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of fundsto the extent not directly related to the acquisition of qualifying assets are charged to the Statement of profit and loss over thetenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencementof activities relating to construction /development of the qualifying asset upto the date of capitalisation of such asset is added tothe cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of profit and loss duringextended periods when active development activity on the qualifying assets is interrupted.

r. Leases

Where the Group as a lessor leases assets under finance leases, such amounts are recognised as receivables at an amount equal tothe net investment in the lease and the finance income is recognised based on a constant rate of return on the outstanding netinvestment.

Assets leased by the Group in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Group areclassified as finance leases. Such leases are capitalised at the inception of the lease at the lower of the fair value and the presentvalue of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocatedbetween the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for eachyear.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognisedas operating leases. Lease rentals under operating leases are recognised in the Statement of profit and loss on a straight-line basis.

s. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, ifany) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed bydividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interestand other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number ofequity shares considered for deriving basic earnings per share and the weighted average number of equity shares which couldhave been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive onlyif their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutiveequity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Thedilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e.average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each periodpresented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splitsand bonus shares, as appropriate.

t. Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions ofthe Income Tax Act, 1961. Tax expense relating to overseas operations is determined in accordance with tax laws applicable incountries where such operations are domiciled.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustmentto future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal incometax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associatedwith it will flow to the Company.

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM57

CMC Limited

58


Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting incomethat originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using thetax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for alltiming differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only ifthere is virtual certainty that there will be sufficient future taxable income will be available to realise such assets. Deferred taxassets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient futuretaxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such itemsrelate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off.Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

u. Research and development expenses

Research and development costs of revenue nature are charged to the Statement of profit and loss, when incurred. Expenditure ofcapital nature is capitalised and depreciated in accordance with the rates set out note 3(h).

v. Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication ofimpairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount ofthese assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value inuse. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or mayhave decreased, such reversal of impairment loss is recognised in the Statement of profit and loss, except in case of revaluedassets.

w. Provisions and contingencies

A provision is recognised when the Group has a present obligation as a result of past events and it is probable that an outflow ofresources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excludingretirement benefits) are not discounted to their present value and are determined based on the best estimate required to settlethe obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current bestestimates. Contingent liabilities are disclosed in the note 27.1.

x. Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted andwhen there is no uncertainty in availing / utilising the credits.

y. Segment Information

i. Business segments

Based on similarity of activities, risks and reward structure, organisation structure and internal reporting systems, the Grouphas structured its operations into the following segments:

Customer Services (CS): Hardware supplies and maintenance, facilities management and provision of infrastructure facilities.

Systems Integration (SI): Systems study and consultancy, software design, development and implementation, softwaremaintenance and supply of computer hardware and system sofware in turnkey projects involving software in accordancewith customers' requirements.

IT Enabled Services (ITeS): Primary value added services, data network, data center services and web design.

Education and Training (E&T): IT education and training service through its own centers and through franchisees and forcorporate.

Special Economic Zone Development (SEZ): Lease of developed SEZ infrastructure in Hyderabad.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Group. Segment revenue,segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationshipto the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments onreasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

ii. Geographic segments

The Group also provides services overseas, primarily in the United States of America, United Kingdom and others.

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM58

59

Particulars As at 31 March, 2012 As at 31 March, 2011 Number of shares Amount Number of shares Amount

` / lacs ` / lacs(a) Authorised

Equity share capital 35,000,000 3,500.00 35,000,000 3,500.00

Equity shares of ` 10 (Previous year ` 10) each with voting rights

(b) Issued

Equity shares of ` 10 (Previous year ` 10) each with voting rights 30,300,000 3,030.00 15,150,000 1,515.00

(c) Subscribed and fully paid up


Refer Notes (i) to (v) below

Notes:

(i) The Company has one class of equity shares having a par value of `10 each. Each shareholder is eligible for one vote per share held.

(ii) Details of shares held by each shareholder holding more than 5% shares:

Class of shares / Name of shareholder As at 31 March, 2012 As at 31 March, 2011

Number of % holding Number of % holdingshares held shares held

Equity shares with voting rights

Tata Consultancy Services Limited 15,489,922 51.12 7,744,961 51.12Aberdeen Global Indian Equity Fund Mauritius Limited 1,920,000 6.34 - -Aberdeen Assets Managers Limited A/c Aberdeen International - - 960,000 6.34India Opportunity Fund (Mauritius) LimitedHDFC Trustees Company Limited - HDFC Equity Fund 1,912,832 6.31 956,416 6.31

Total 19,322,754 63.77 9,661,377 63.77

(iii) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Particulars Opening Balance Bonus share Closing Balanceissued


Year ended 31 March, 2012- Number of shares 15,150,000 15,150,000 30,300,000- Amount (` / lacs) 1,515.00 1,515.00 3,030.00

Year ended 31 March, 2011- Number of shares 15,150,000 - 15,150,000- Amount (` / lacs) 1,515.00 - 1,515.00

(iv) Details of shares held by Tata Consultancy Services Limited, the holding Company

Particulars Aggregate number of sharesAs at As at

31 March, 2012 31 March, 2011

Fully paid up equity shares with voting rights 15,489,922 7,744,961

(v) Aggregate number and class of shares allotted as bonus shares for the period of 5 years immediately preceding the Balance Sheet date


31 March, 2012 31 March, 2011


Fully paid up by way of bonus shares 15,150,000 -

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSNote 4 Share capital

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM59

CMC Limited

60


Note 5 Reserves and surplus

Particulars As at As at31 March, 2012 31 March, 2011

` / lacs ` / lacs(a) General reserve

Opening balance 5,688.91 4,131.60Add: Transferred from surplus in Statement of profit and loss 1,433.32 1,557.31Less: Utilised during the year for issuing bonus shares (1,515.00) -Closing balance 5,607.23 5,688.91

(b) Surplus in Statement of profit and loss

Opening balance 58,205.88 45,343.87

Add: Profit for the year 15,181.24 17,940.86

Less: Dividends proposed to be distributed to equity shareholders (3,787.50) (3,030.00)

` 12.50 per share (previous year ` 20 per share) (See note below)

Tax on dividend (614.45) (491.54)

Transferred to general reserve (1,433.32) (1,557.31)

Closing balance 67,551.85 58,205.88

(c) Foreign currency translation reserve

(i) Opening balance (7.84) 77.10

(ii) Additions during the year 1,037.71 (84.94)

(iii) Closing balance 1,029.87 (7.84)

Total 74,188.95 63,886.95

Note:Dividend of ` 12.50 per equity share is on the enhanced capital base of ` 3,030.00 lacs consequent to allotment of bonus share in theratio of 1:1 on 10 June, 2011.

Note 6 Other long term Liabilities


` / lacs ` / lacs

Income received in advance 1,214.86 720.68

Total 1,214.86 720.68

Note 7 Long-term provisions


` / lacs ` / lacsProvision for employee benefits:(a) Provision for gratuity (net) (Refer note 28.1) 2,332.79 2,129.15(b) Provision for post-employment medical benefits (Refer note 28.1) 412.94 382.61

Total 2,745.73 2,511.76

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM60

61

Note 9 Other current liabilities


` / lacs ` / lacs

(a) Current maturities of finance lease obligation 1.22 13.99

(b) Income received in advance 2,141.88 4,111.59

(c) Unpaid dividends 27.84 26.42

(d) Other payables

(i) Statutory dues 887.70 1,230.34

(Contributions to PF and ESIC, VAT, Service Tax, withholding taxes etc.)

(ii) Payables on purchase of fixed assets 345.65 412.95

(iii) Interest accrued on trade payables 0.81 0.80

(iv) Interest accrued on others 0.26 0.67

(v) Security deposits received 631.50 427.08

(vi) Advances from customers 929.37 1,470.28

Total 4,966.23 7,694.12

Note 10 Short-term provisions


` / lacs ` / lacs(a) Provision for employee benefits

(i) Provision for compensated absences 2,736.20 2,106.17

(ii) Others 412.44 242.54

3,148.64 2,348.71

(b) Provision - Others

(i) Provision for tax 5,031.71 4,210.70

(net of advance tax ` 7,896.08 lacs (Previous year ` 8,701.53 lacs)

(ii) Provision for proposed equity dividend 3,787.50 3,030.00

(iii) Provision for tax on proposed dividends 614.45 491.54

9,433.66 7,732.24

Total 12,582.30 10,080.95

Note 8 Trade payables


` / lacs ` / lacsTrade payables

Other than acceptances 26,197.91 17,326.67

Total 26,197.91 17,326.67

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM61

CMC Limited

62


Note 12 Deferred tax assets (net)


` / lacs ` / lacs

A For the parent company(a) Tax effect of items constituting deferred tax liability

(i) On difference between book balance and tax balance of fixed assets (1,451.97) (1,075.86)

(1,451.97) (1,075.86)

(b) Tax effect of items constituting deferred tax asset(i) Provision for doubtful receivables 430.61 567.13(ii) Provision for employee benefits 1,670.30 1,038.23(iii) Others 261.02 231.40

2,361.93 1,836.76

Total (A) 909.96 760.90

B For the subsidiary company(a) Tax effect of items constituting deferred tax liability

On difference between book balance and tax balance of fixed assets (18.12) (9.81)

(18.12) (9.81)

(b) Tax effect of items constituting deferred tax asset

Provision for employee benefits 205.08 131.09

205.08 131.09

Total (B) 186.96 121.28

Total (A+B) 1,096.92 882.18

Note 11 Fixed assets

Gross block Accumulated depreciation Net blockTangible assets As at Additions Disposals As at As at Depreciation Eliminated on As at As at 31 As at 31

1 April, 2011 31March, 2012 1 April, 2011 and amortisation disposal of 31March, 2012 March, 2012 March, 2011 for the year assets

` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs

(a) LandFreehold 6.05 - - 6.05 - - - - 6.05 6.05Leasehold 596.15 187.50 - 783.65 126.69 7.62 - 134.31 649.34 469.46

(b) BuildingsOwn use 3,320.61 378.51 - 3,699.12 991.65 155.01 - 1,146.66 2,552.46 2,328.96Given under operating lease 4,034.87 11,360.02 - 15,394.89 170.23 171.62 - 341.85 15,053.04 3,864.64

(c) Plant and EquipmentOwn use 7,570.56 2,218.87 170.23 9,619.20 5,351.45 1,052.17 162.40 6,241.22 3,377.98 2,219.11Given under operating lease - 3,192.97 - 3,192.97 - 526.83 - 526.83 2,666.14 -Taken under finance lease 26.25 - - 26.25 8.14 9.25 - 17.39 8.86 18.11

(d) Furniture and FixturesOwn use 1,215.68 205.15 41.35 1,379.48 756.56 153.50 39.36 870.70 508.78 459.12Given under operating lease - 607.92 - 607.92 - 31.86 - 31.86 576.06 -

(e) Vehicles - Own use 59.44 39.02 7.70 90.76 37.14 5.44 2.91 39.67 51.09 22.30

(f) Office equipment

Own use 461.34 60.85 3.80 518.39 241.77 23.48 2.71 262.54 255.85 219.57Given under operating lease - 108.08 - 108.08 - 0.18 - 0.18 107.90 -

Total 17,290.95 18,358.89 223.08 35,426.76 7,683.63 2,136.96 207.38 9,613.21 25,813.55 9,607.32Previous year 17,141.51 1,447.47 1,298.03 17,290.95 7,840.01 1,045.96 1,202.34 7,683.63 9,607.32

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM62

63

(a) Capital advances - Unsecured, considered good 1,605.02 659.14(b) Security deposits - Unsecured, considered good 1,344.90 712.02(c) Loans and advances to employees

(i) Secured, considered good (See note below) 26.97 35.78(ii) Unsecured, considered good 12.36 8.23

(d) Prepaid expenses - Unsecured, considered good 61.64 62.84(e) Advance income tax (net of provisions ` 13,185.59 lacs 10,906.37 8,144.27

(Previous year ` 8,364.69 lacs) - Unsecured, considered good(f ) Other loans and advances - Unsecured, considered good 105.38 22.20

Total 14,062.64 9,644.48

Note: Long-term loans and advances include amounts due from:Managing Director & CEO 8.77 10.45

Note 13 Long-term loans and advances


` / lacs ` / lacs

Note 14 Current investments

Particulars As at 31 March, 2012 As at 31 March, 2011

No. of Units ` / lacs No. of Units ` / lacs

(a) Fixed Maturity Plan

Birla Sun Life Fixed Term Plan - Series CI - Growth - - 10,000,000 1,000.00

Birla Sun Life Fixed Term Plan - Series DT - Growth 10,000,000 1,000.00 - -

Birla Sun Life Fixed Term Plan Series CK (368D) - - 8,000,000 800.00

HDFC Fixed Maturity Plans 370 D February 2012(2) Series XXI -Growth 9,000,000 900.00 - -

ICICI Prudential Fixed Maturity Plan Yearly Series 52 - Plan C - - 6,000,000 600.00

ICICI Prudential Fixed Maturity Plan A - Series 53 -Growth - - 8,000,000 800.00

ICICI Prudential Fixed Maturity Plan Series 55 -1 year Plan A-Growth - - 5,000,000 500.00

ICICI Prudential Flexible Interval Fund -Annual Interwal Plan I - Growth - - 9,993,005 1,000.00

ICICI Prudential FMP Series 54-1 Y Plan C-Cumulative 22,000,000 2,200.00 - -

ICICI Prudential FMP Series 56-1 Year Plan D-Growth - - 10,000,000 1,000.00

ICICI Prudential FMP Series 62-1 Y Plan B-Cumulative 9,000,000 900.00 - -

IDFC Fixed Maturity Plan - Yearly Series 32 -Growth - - 5,000,000 500.00

IDFC Fixed Maturity Plan Monthly Series - 29 - - 9,001,718 900.17

IDFC Fixed Maturity Plan yearly Series - 37-Growth - - 14,000,000 1,400.00

IDFC Fixed Maturity Plan Yearly Series 33-Growth - - 7,000,000 700.00

Kotak FMP 13M Series 6 - Growth - - 5,000,000 500.00


Kotak FMP 370 Days Series 6-Growth - - 5,000,000 500.00



Kotak FMP Series 33 -Growth - - 5,000,000 500.00

Kotak FMP Series 44-Growth 7,000,000 700.00 - -

Kotak FMP Series 74 -Growth 8,000,000 800.00 - -

Kotak FMP Series 84 - Growth 10,000,000 1,000.00 - -

Kotak Quarterly Interval Plan - Series 9 -Dividend - - 5,997,661 600.00

SBI Debt Fund Series - 370 Days -6 - Growth - - 3,000,000 300.00

TATA Fixed Maturity Plan Series - 26 Scheme C-Growth - - 12,000,000 1,200.00

TATA Fixed Maturity Plan Series - 30 Scheme C -Growth 8,000,000 800.00 - -

TATA Fixed Maturity Plan Series 28 - Scheme A Dividend Payout - - 10,000,000 1,000.00

8,300.00 15,500.17

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM63

CMC Limited

64


Note 15 Inventories(At lower of cost and net realisable value)


` / lacs ` / lacs(a) Work-in-progress 5.26 5.26(b) Finished goods

(i) Education and training material 66.17 54.34(ii) Others 12.79 10.71

78.96 65.05

(c) Stock-in-trade 989.74 974.14Goods-in-transit 29.44 11.56

1,019.18 985.70

(d) Stores and spares 237.28 290.89

Total 1,340.68 1,346.90

Note 14 Current investments (Contd.)



(b) Liquid / Liquid Plus

Birla Sunlife Ultra Short Term Fund- Institutional Daily Dividend 3,039,293 3,040.97 - -

ICICI Prudential Ultra Short Term Plan Super Premium - Daily Dividend - - 30,894,501 3,102.42

IDFC Money Manager Fund Investment Plan-Inst Plan B-Daily Dividend 16,910,236 1,711.06 - -

IDFC Saving Advantage Fund - Plan A - Monthly Dividend - - 140,838 1,408.60

Kotak Floater Short Term Daily Dividend 20,815,866 2,105.77 - -

TATA Floater Fund - Daily Dividend - - 25,966,118 2,605.86

6,857.80 7,116.88

Total (A+B) 15,157.80 22,617.05

Note:

Book value of current unquoted investments 15,157.80 22,617.05

(a) Trade receivables outstanding for a period exceedingsix months from the date they were due for payment

(i) Unsecured, considered good 4,500.29 3,294.12(ii) Doubtful 1,327.21 3,696.76

5,827.50 6,990.88

Less: Provision for doubtful trade receivables (1,327.21) (3,696.76)

4,500.29 3,294.12(b) Other trade receivables

Unsecured, considered good 33,711.60 21,918.51

Total 38,211.89 25,212.63

Note 16 Trade receivables


` / lacs ` / lacs

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM64

65

Note 17 Cash and cash equivalents


` / lacs ` / lacs

(a) Cash on hand 48.54 25.19(b) Cheques, drafts on hand 77.88 226.78(c) Balances with banks

(i) In current accounts 4,922.74 3,377.58(ii) In EEFC accounts 270.31 176.59(iii) In deposit accounts 22.24 51.96(iv) In earmarked accounts

- Unpaid dividend accounts 27.84 26.42- Escrow account 509.40 1,768.54- Balances held as margin money against guarantees 3.50 -

Total 5,882.45 5,653.06

Balances that meet the definition of Cash and cash equivalents 5,882.45 5,653.06as per Accounting Standard (AS)-3 Cash Flow Statement

(a) Security deposits(i) Secured, considered good 19.06 0.51(ii) Unsecured, considered good 1,026.57 1,004.40(iii) Doubtful 74.95 74.95

1,120.58 1,079.86Less: Provision for doubtful security deposits (74.95) (74.95)

1,045.63 1,004.91(b) Loans and advances to employees

(i) Secured, considered good (See note below) 45.82 32.99(ii) Unsecured, considered good 223.91 135.65(iii) Doubtful 113.46 113.46

383.19 282.10Less: Provision for doubtful loans and advances to employees (113.46) (113.46)

269.73 168.64

(c) Prepaid expenses - Unsecured, considered good 324.99 641.93

(d) Advance to suppliers(i) Unsecured, considered good 1,197.18 334.05(ii) Doubtful 181.14 181.14

1,378.32 515.19Less: Provision for doubtful advances to suppliers (181.14) (181.14)

1,197.18 334.05

(e) MAT credit entitlement - Unsecured considered good 1,013.57 2,054.61

(f) Balances with government authorities - Unsecured considered good(i) VAT credit receivable 438.66 429.77(ii) Service tax credit receivable 257.59 245.18(iii) Withholding tax recoverable 26.81 -

723.06 674.95

Note 18 Short-term loans and advances


` / lacs ` / lacs

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM65

CMC Limited

66


(g) Others(i) Unsecured, considered good 388.87 655.59(ii) Doubtful 103.01 103.01

491.88 758.60Less: Provision for other doubtful loans and advances (103.01) (103.01)

388.87 655.59

Total 4,963.03 5,534.68

Note: Short-term loans and advances include amounts due from: Managing Director & CEO 1.68 1.68

Note 18 Short-term loans and advances (Contd.)


` / lacs ` / lacs

Note 19 Other current assets


` / lacs ` / lacs

Unbilled revenue 15,024.33 12,448.76

Total 15,024.33 12,448.76

(a) Sale of products - purchased equipment 15,412.59 10,274.16(b) Sale of services (Refer note (i) below) 129,207.40 96,551.15(c) Rentals from special economic zone 2,076.21 1,227.84(d) Other operating revenues (Refer note (ii) below) 238.04 387.29

Total 146,934.24 108,440.44

Notes:

(i) Sale of services comprises :

(a) Software services 85,125.42 63,255.61(b) Maintenance services 5,616.59 5,459.10(c) Facility management services 15,039.07 11,162.03(d) Education and training 5,684.41 5,238.48(e) Other services 17,741.91 11,435.93

Total 129,207.40 96,551.15

(ii) Other operating revenues:

(a) Liabilities / provisions no longer required written back 120.08 239.82(b) Bad debts recovered 117.96 147.47

Total 238.04 387.29

Note 20 Revenue from operations

Particulars For the year ended For the year ended31 March, 2012 31 March, 2011

` / lacs ` / lacs

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM66

67

(a) Interest income

(i) Interest from banks on deposits 5.87 0.26(ii) Interest on loans and advances 8.25 3.02(iii) Other interest 0.76 6.95

14.88 10.23(b) Dividend income from current investments 453.13 680.74(c) Net gain on sale of current investment in mutual funds 1,133.56 39.43(d) Profit on sale of fixed assets (net of loss) 6.44 27.07(e) Miscellaneous income 137.97 422.46

Total 1,745.98 1,179.93

Note 21 Other income


` / lacs ` / lacs

Note 22 Purchase of stock- in- trade


` / lacs ` / lacs

(a) Purchase of equipment for resale 14,539.52 9,927.97

Total 14,539.52 9,927.97

Note 23 Changes in inventories of work-in-progress and stock-in-trade


` / lacs ` / lacs(a) Inventories at the end of the year

Work-in-progress 5.26 5.26Stock-in-trade 1,019.18 985.70

1,024.44 990.96(b) Inventories at the beginning of the year

Work-in-progress 5.26 5.26Stock-in-trade 985.70 662.34

990.96 667.60Net (increase)/decrease (33.48) (323.36)

Note 24 Employee benefits expense(See note 28.1)


` / lacs ` / lacs

(a) Salaries and wages 40,304.13 31,156.48(b) Contributions to provident and other funds 1,770.50 1,775.51(c) Staff welfare expenses 1,947.42 1,580.61

Total 44,022.05 34,512.60

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM67

CMC Limited

68


Note 25 Finance cost


` / lacs ` / lacs

Interest Expenses - others 1.54 22.03

Total 1.54 22.03

(a) Consumption of stores and spare parts 2,566.04 2,534.40

(b) Purchased software 385.63 309.96

(c) Subcontracting and outsourcing cost 44,610.53 26,234.77

(d) Electricity charges 1,558.48 1,036.42

(e) Rent including lease rentals (See note 28.4) 2,064.92 1,907.57

(f ) Repairs and maintenance - Buildings 670.07 590.59

(g) Repairs and maintenance - Plant and equipment 330.66 319.36

(h) Repairs and maintenance - Others 39.47 62.43

(i) Insurance 967.89 785.11

(j) Rates and taxes 282.24 177.73

(k) Communication and postage 1,057.70 927.00

(l) Travelling and conveyance 2,934.26 2,204.40

(m) Printing and stationery 405.24 223.70

(n) Freight and forwarding 284.83 185.42

(o) Business promotion, advertisement and publicity 202.86 150.15

(p) Legal and professional 1,521.18 1,013.56

(q) Education and training

(i) Payment to franchisees 1,846.51 1,399.28

(ii) Other expenses 439.73 392.82

(r) Living expenses - overseas contracts 1,062.77 848.45

(s) Directors sitting fees 15.20 15.10

(t) Commission to non-executive directors 60.00 50.00

(u) Payments to auditors (Refer note 27.3) 146.69 128.64

(v) Bad trade and other receivables, loans and advances written off 788.66 23.15

(w) Net loss on foreign currency transactions and translation 450.98 56.32

(x) Fixed assets written off 5.07 29.82

(y) Provision for doubtful trade and other receivables, loans and advances (net) - 875.84

(z) Miscellaneous expenses 1,276.13 770.41

Total 65,973.74 43,252.40

Note 26 Other expenses


` / lacs ` / lacs

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM68

69

27. Additional information to the financial statements

27.1 Contingent liabilities and commitments


` / lacs ` / lacsa. Claims against the Company not acknowledged as debts*

• Under litigation 3,586.21 1,188.37• Demand from Income tax authorities (Refer note 'i' below) 1,807.06 -• Demand from employee state insurance authorities 2.80 2.80• Disputed demands raised by sales tax authorities 836.65 912.44• Demands raised by service tax authorities (Refer note 'ii' below) 6,362.48 5,107.46• Disputed demand towards land use conversion fee 2,025.00 2,025.00• Sales tax on leased assets - 37.26• Others 640.21 93.53

b. Unexpired letters of credit 8.83 156.53

c. Estimated amount of contracts remaining to be executed on capital account 8,127.14 5,680.18(net of advances) and not provided for

* No provision is considered necessary since the Company expects favorable decisions. The advance paid against the above is` 996.23 lacs (Previous year ` 306.84 lacs).

Notes:

i. Includes ` 354.23 lacs (Previous year ` Nil lacs) pertaining to demand of income tax raised by the Additional Commissioner ofIncome tax.

ii. Includes ` 1,541.40 lacs (Previous year ` 3,736.81 lacs) pertaining to demand of service tax raised by the Commissioner ofService tax.

The Company proposes to file an appeal before the appropriate authorities in respect of the above.

27.2 Unexpired foreign exchange forward contracts

The following are outstanding foreign exchange forward contracts as at 31 March, 2012.

Foreign currency No. of contracts Notional amount Rupee equivalentof forward contracts (` / lacs) in foreign currency

USD 5 15,000,000.00 7,641.00(-) (-) (-)

As of the balance sheet date, the Company has net foreign currency exposure that is not hedged by a derivative instrument orotherwise amounting to ` 314.37 lacs (Previous year ` 5,479.57 lacs).

Amounts in brackets represent previous year’s figures.

27.3 Auditors’ remuneration*

Other expenses include auditors’ remuneration as follows


` / lacs ` / lacs

Audit fee (including limited reviews) 68.62 55.95Tax audit 8.00 8.00Reimbursement of out-of-pocket expenses 9.52 8.23

86.14 72.18* Exclusive of service tax

The remuneration disclosed above excludes fees of ` 57.15 lacs (Previous year ` 46.46 lacs) including ` 17.25 lacs (Previous year` 10.00 lacs) for representation before various authorities for professional services rendered by firm of accountants in which thepartners of the firm of statutory auditors are partners.

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM69

CMC Limited

70


28. Disclosures under Accounting Standards

28.1 Retirement benefit plans

a. Defined contribution plan

The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirementbenefit plan for qualifying employees. The Company's contribution to the Employees Provident Fund and superannuation isdeposited in a trust formed by the Company under the Employees Provident Fund and Miscellaneous Provisions Act, 1952which is recognised by the Income tax authorities.

The Company recognised ̀ 1,306.71 lacs (Previous year ̀ 1,050.02 lacs) for provident fund contributions and ̀ 8.98 lacs (Previousyear ` 9.62 lacs) for superannuation fund in the Statement of profit and loss. The contribution payable to the plan by theCompany is at the rate specified in rules to the scheme.

b. Defined benefit plan

i. Gratuity plan

The Company makes annual contribution to the Employee's Group Gratuity-cum-Life Assurance scheme of the LifeInsurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of anamount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 monthssubject to a maximum of ` 10 lacs. Vesting occurs upon completion of 5 years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the projectedunit credit Method with actuarial valuations being carried out at each balance sheet date.

ii. Medical plan

The Medical plan liability arises on retirement of an employee. The aforesaid liability for employees retired upto 31 March,2010 is calculated on the basis of fixed annual amount per employee (based on the basic salary) for qualifying employees.For employees retiring after 31 March, 2010, the Company has affected a Health Insurance plan for coverage of postretirement medical expenses. The liability on this account has also been actuarially valued.

The most recent actuarial valuation of the present value of the defined obligation was carried out on 31 March, 2012. Thepresent value of the defined obligation and the related current service cost and past service cost, was measured usingprojected unit credit method.

c. The following tables set out the funded status of the gratuity plan and medical plan and amounts recognised in the Company'sfinancial statements as at 31 March, 2012.

(All amounts in ` / lacs)

Year ended Year ended31 March, 2012 31 March, 2011

Particulars Gratuity Medical Gratuity MedicalBenefit Plan Benefit Plan(Unfunded) (Unfunded)

i. Components of employer expense

Current service cost 249.18 8.64 230.87 4.23Interest cost 211.46 30.61 154.34 34.99Expected return on plan assets (46.27) - (10.72) -Curtailment cost / (credit) - - - (81.52)Past service cost - - 413.49 -Actuarial losses / (gains) (3.47) 29.47 (106.29) (0.79)

Total expense recognised in Statement of profit and loss 410.90 68.72 681.69 (43.09)

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM70

71

(All amounts in `/lacs)



ii. Actual contribution and benefit payments for year

Actual benefit payments 190.65 38.39 285.14 40.81Actual contributions 207.26 - 476.21 -

iii. Net asset/ (liability) recognised in the Balance Sheet

Present value of defined benefit obligation 2,898.52 412.94 2,643.27 382.61Fair value of plan assets 565.73 - 514.12 -Funded status [Surplus/ (Deficit)] (2,332.79) (412.94) (2,129.15) (382.61)Net asset / (liability) recognised in the Balance Sheet (2,332.79) (412.94) (2,129.15) (382.61)

iv. Change in defined benefit obligations (DBO)during the year

Present value of DBO at the beginning of the year 2,643.27 382.61 2,057.66 466.51Current service cost 249.18 8.64 230.87 4.23Interest cost 211.46 30.61 154.34 34.99Curtailment cost / (credit) - - - (81.52)Actuarial (gain) / losses (14.74) 29.47 72.05 (0.79)Past service cost - - 413.49 -Benefits paid (190.65) (38.39) (285.14) (40.81)Present value of DBO at the end of the year 2,898.52 412.94 2,643.27 382.61

v. Change in fair value of assets during the year

Plan assets at the beginning of the year 514.12 - 133.99 -Expected return on plan assets 46.27 - 10.72 -Actual Company contributions 207.26 - 476.21 -Actuarial gain / (loss) (11.27) - 178.34 -Benefits paid (190.65) - (285.14) -Plan assets at the end of the year 565.73 - 514.12 -

Actual return on plan assets 35.00 - 189.06 -

vi. Actuarial assumptions

Discount rate 8.25% 8.25% 8.00% 8.00%Expected return on plan assets 9.00% - 8.00% -Salary escalation 4.00% - 4.00% -Attrition 20.00% 20.00% 20.00% 20.00%Mortality tables Standard Standard Standard Standard

Table LIC Table LIC Table LIC Table LIC(1994-96) (1994-96) (1994-96) (1994-96)

vii. Estimate of amount of contribution in the 707.74 - 480.00 -immediate next year

viii. Experience adjustments 2012 2011 2010 2009

(a) Gratuity

On plan liability (14.74) 72.05 181.05 130.99On plan asset (11.27) 178.34 10.31 21.25

(b) Post Retirement Medical Benefits

On plan liability 29.47 (0.79) 26.10 56.06

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM71

CMC Limited

72



Particulars 2012 2011 2010 2009 2008

GratuityPresent value of DBO 2,898.52 2,643.27 2,057.66 1,895.93 1,658.36Fair value of plan assets 565.73 514.12 133.99 128.83 141.84Funded status - (Deficit) (2,332.79) (2,129.15) (1,923.67) (1,767.10) (1,516.52)Experience gain / (loss) adjustments (129.20) 72.05 181.05 130.99on plan liabilitiesExperience gain / (loss) adjustments on plan assets (11.27) 178.34 10.31 21.25

Post retirement medical benefitsPresent value of DBO 412.94 382.61 466.51 445.54 512.54Fair value of plan asset* - - - - -Funded status - (Deficit) (412.94) (382.61) (466.51) (445.54) (512.54)Experience gain / (loss) 29.47 (0.79) 26.10 56.06adjustments on plan liabilitiesExperience gain / (loss) adjustments - - - - -on plan assets*

Experience adjustments have been disclosed only for the previous three years from the period for which information is available.

* Plan is unfunded

Notes:

i. The planned assets of the Company are managed by the Life Insurance Corporation of India in terms of an insurancepolicy taken to fund obligations of the Company with respect to its gratuity plan. Information on categories of plan assetsis not available with the Company.

ii. The discount rate is based on the prevailing market yields of Government of India securities as at Balance Sheet date forthe estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and otherrelevant factors.

28.2 Segment Information

a. Financial information about the primary business segments is given below:(All amount in `/ lacs)

Particulars CS SI ITeS E &T SEZ Total

i. Revenue 33,599.38 83,900.19 21,540.84 5,817.62 2,076.21 146,934.24(27,131.80) (57,791.78) (16,964.66) (5,324.36) (1,227.84) (108,440.44)

ii. Segment result 2,382.57 18,931.66 6,446.28 766.33 1,279.34 29,806.18(2,235.23) (17,635.69) (5,927.08) (1,098.33) (1,156.46) (28,052.79)

iii. Unallocable expenses 9,512.27(8,049.95)

iv. Operating income 20,293.91(20,002.84)

v. Other income 1,745.98(1,179.93)

vi. Profit before tax 22,039.89(21,182.77)

vii. Tax expense 6,858.65(3,241.91)

viii. Net profit for the year 15,181.24(17,940.86)

ix. Segment assets 18,258.42 29,317.32 9,550.13 2,984.83 23,939.76 84,050.46(19,769.62) (19,645.24) (5,157.92) (2,058.78) (15,019.25) (61,650.81)

x. Unallocable assets 40,875.52(42,085.32)

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM72

73

(All amount in `/ lacs)


xi Total assets 124,925.98(103,736.13)

xii Segment liabilities 10,598.83 11,396.64 5,956.36 2,194.08 3,308.29 33,454.20(12,652.78) (8,357.26) (2,707.42) (1,855.46) (2,984.93) (28,557.85)

xiii Unallocable liabilities 14,252.83(9,776.33)

xiv. Total liabilities 47,707.03(38,334.18)

xv. Other information

Capital expenditure (allocable) 34.74 413.68 118.11 209.78 7,907.83 8,684.13(29.33) (283.67) (161.09) (196.06) (8,540.08) (9,210.23)

Capital expenditure 2,258.36 (unallocable) (829.79)

Depreciation and amortisation 66.38 259.60 132.11 129.70 730.27 1,318.06 expense (allocable) (106.90) (222.11) (111.79) (79.78) (65.80) (586.38)

Depreciation and amortisation 818.90expense (unallocable) (459.58)

Other significant non-cash 383.99 256.92 61.79 72.12 - 774.82expense (allocable) (291.61) (397.54) (33.16) (186.92) (-) (909.23)

Notes:i. Unallocated assets include investments, advance tax and tax deducted at source.

ii. Unallocated liabilities include, deferred tax/current tax liabilities, proposed dividend and tax on proposed dividend.

iii Amounts in brackets represent previous year's figures.

b. Geographical segment (All amounts in `/ lacs)

Particulars India United United Others TotalStates of KingdomAmerica

Segment Revenue 66,699.94 73,354.08 3.043.36 3,836.86 146,934.24- Revenue from operations (55,927.30) (46,823.03) (2,454.31) (3,235.80) (108,440.44)

1,738.85 5.64 0.10 1.39 1,745.98-Other income (1,151.46) (7.40) (0.60) (20.47) (1,179.93)

Total Assets 98,743.94 21,154.10 955.47 4.072.47 124,925.98(87,762.31) (12,412.92) (771.99) (2,788.91) (103,736.13)

Total Liabilities 37,307.09 10,114.96 245.36 39.62 47,707.03

(33,457.57) (4,393.64) (234.08) (248.89) (38,334.18)

Note: Amounts in brackets represent previous year's figures.

28.3 Related Party Disclosures

a. List of related partiesi. Ultimate Holding Company

• Tata Sons Limited

ii. Holding Company• Tata Consultancy Services Limited

iii. Fellow Subsidiaries• Tata AIG General Insurance Company Limited• Tata Teleservices (Maharashtra) Limited• Tata Consultancy Services, Netherlands BV

4 CMC- Conso 54-77.p65 2012/06/01, 07:37 PM73

CMC Limited

74


• Tata Consultancy Services Sverige AB• Tata Teleservices Limited• Tata Business Support Services Limited (formerly E2E Serwiz Solutions Limited)• Diligenta Limited• Infiniti Retail Limited• Tata Consultancy Services, Asia Pacific Pte Limited• E-NXT Financials Limited• TC Travel and Services Limited• Tata Autocomp Systems Limited• Tata America International Corporation• Tata Housing Development Company Limited

iv. Key Management Personnel• Mr. R. Ramanan

b. Transactions / balances outstanding with Related Parties.(All amounts in `/ lacs)

Transactions / Outstanding balances Ultimate Holding Fellow Key Total Holding Company Subsidiary Management

Company Personnel

Purchase of goods/services 30.74 896.60 1,355.62 - 2,282.96(note a)

(24.50) (842.27) (780.88) (-) (1,647.65)Purchase of fixed assets - - 123.45 - 123.45

(note b)(-) (-) (-) (-) (-)

Sale of products 1.71 4,908.30 222.46 - 5,132.47(note c)

(-) (5,342.66) (17.20) (-) (5,359.86)Service income - 70,921.00 474.47 - 71,395.47

(note d)(-) (36,030.40) (417.70) (-) (36,448.10)

Managerial remuneration - - - 122.32 122.32(-) (-) (-) (111.36) (111.36)

Interest expense - - - - -(note e)

(-) (-) (20.14) (-) (20.14)Repayment of unsecured loan - - - - -

(note f )(-) (-) (1,357.67) (-) (1,357.67)

Brand equity contribution 137.19 - - - 137.19(115.26) (-) (-) (-) (115.26)

Dividened paid - 1,548.99 - - 1,548.99(-) (1,548.99) (-) (-) (1,548.99)

Other transactions 1.47 753.40 9.09 - 763.96(-) (405.68) (-) (-) (405.68)

Balance outstanding at the year end

Trade receivables - 16,194.07 268.89 - 16,462.96(note g)

(-) (10,943.55) (116.60) (-) (11,060.15)

Unbilled revenues - 6,844.96 107.19 - 6,952.15(note h)

(-) (3,881.68) (24.00) (-) (3,905.68)

Income received in advance - 391.05 - - 391.05(note i)

(-) (511.04) (2.58) (-) (513.62)

Trade payables / Advances received 137.64 2,465.02 352.46 - 2,955.12(note j)

(115.29) (2,199.49) (140.38) (-) (2,455.16)

Loans / advances - - - 10.45 10.45(-) (-) (-) (12.13) (12.13)

Note: Amounts in brackets represent previous year's figures.

28.3 Related Party Disclosures (Contd.)

4 CMC- Conso 54-77.p65 2012/06/01, 07:37 PM74

75

Notes:

Disclosures in respect of transactions in excess of 10% of the total related party transactions of the same type.

Notes Particulars Year ended / Year ended /Ref. As at As at

31 March, 2012 31 March, 2011

` / lacs ` / lacsa. Purchase of goods / services

Tata Teleservices Limited 132.61 87.51Tata Teleservices (Maharashtra) Limited 97.08 77.86Tata America International Corporation 1,124.79 612.66

b. Purchase of fixed assets

Tata Teleservices (Maharashtra) Limited 120.97 -

c. Sale of products

Tata Housing Development Company Limited 85.33 17.11Tata Business Support Services Limited (Formerly E2E Serwiz Solutions Limited) 137.13 -

d. Service income

Tata Consultancy Services, Netherlands BV - 16.42Tata Consultancy Services, Asia Pacific Pte Limited 164.06 140.12Tata Housing Development Company Limited 69.73 -Diligenta Limited - 115.61Tata Business Support Services Limited (Formerly E2E Serwiz Solutions Limited) 237.60 110.03

e. Interest expense

Tata America International Corporation - 20.14

f. Repayment of unsecured loan

Tata America International Corporation - 1,357.67

g. Trade receivables

Tata Consultancy Services, Netherlands BV - 19.00Tata Consultancy Services, Asia Pacific Pte Limited 47.85 47.48Tata Business Support Services Limited (Formerly E2E Serwiz Solutions Limited) 171.38 40.50

h. Unbilled revenue

Tata Teleservices Limited - 3.83Tata Consultancy Services, Asia Pacific Pte Limited 45.96 20.17Tata Housing Development Company Limited 60.92 -

i. Income received in advance

Tata Consultancy Services, Netherlands BV - 2.58

j. Trade payables / Advances received

Tata Teleservices (Maharashtra) Limited 11.45 10.75Tata America International Corporation 340.06 128.56

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM75

CMC Limited

76


28.4 Lease Commitments

i. Obligations towards operating leases (As lessee)

Rent expenses of ` 739.33 lacs (Previous year ` 556.60 lacs) in respect of obligation under non-cancellable operating leaseshave been recognised in the Statement of profit and loss. Further a sum of ` 1,325.59 (Previous year ` 1,350.97 lacs) has beencharged to the Statement of profit and loss in respect of cancellable operating leases.

The total of future minimum lease payments under non cancellable operating leases for the following periods:


` / lacs ` / lacs

a. Not later than one year 849.62 428.77b. Later than one year but not later than five years 1295.93 1,032.14c. Later than five years 153.34 52.03

ii. Obligations towards finance leases (As lessee)

a. Not later than one year 1.29 13.99b. Later than one year but not later than five years - -c. Later than five years - -

iii. Finance lease (As lessor)

The Parent has purchased and given on lease computer equipment, peripherals and system software. The details are as follows:

a. Total gross investment 233.97 442.57• Not later than one year 138.41 208.60• Later than one year but not later than five years 95.56 233.97• Later than five years - -

b. Present value of minimum lease payments receivable 216.18 386.53• Not later than one year 124.33 170.34• Later than one year but not later than five years 91.85 216.19• Later than five years - -

c. Unearned finance income 17.79 56.04

28.5 Earnings per share

Particulars Units Year ended Year ended31 March, 2012 31 March, 2011

Net profit attributable to shareholders ` / lacs 15,181.24 17,940.86Weighted average number of equity shares in issue Nos. / lacs 303.00 303.00Basic earnings per share ` 50.10 59.21Face value per share ` 10.00 10.00

The Company does not have any outstanding dilutive potential equity shares.

28.6 Taxes

The provision for taxes is as follows:


`/ lacs `/ lacsa. Current taxes

i. Domestic taxes* 4,820.91 2,042.03ii. Foreign taxes 2,232.96 1,438.88

b. Deferred taxesi. Domestic taxes (149.06) (211.91)ii. Foreign taxes (46.16) (27.09)

*includes taxes in foreign jurisdiction ` 46.81 lacs (Previous year ` 304.20 lacs)

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM76

77

28.7 Research and development expenses

Expenditure includes "Research and Development" expenditure aggregating to ` 986.15 lacs (Previous year ` 890.65 lacs). Amountsaggregating to ` 60.90 lacs (Previous year ` 15.36 lacs) have been capitalised.

For and on behalf of the Board of Directors

S. Mahalingam R. Ramanan Dr K R S MurthyDirector Managing Director & CEO

J. K. Gupta Vivek Agarwal S Singh S ShroffChief Financial Officer Company Secretary

Place : MumbaiDate : 18 April, 2012

29. Statement pursuant to exemption under section 212 (8) of the Companies Act, 1956 relating to subsidiary companies:

Particulars CMC Americas Inc, USA CMC eBiz Inc, USAAs at As at

31 March, 2012 31 March, 2012US $ / lacs ` / lacs US $ / lacs ` / lacs

(a) Capital 16.00 815.05 - -(b Reserves 135.87 6,921.06 12.26 624.74(c) Total assets 410.26 20,898.72 25.17 1,282.06(d) Total liabilities 258.39 13,162.62 12.90 657.32(e) Investments - - - -

Year Ended Year Ended31 March, 2012 31 March, 2012

US $ / lacs ` / lacs US $ / lacs ` / lacs

(f ) Turnover 1,455.97 74,167.22 64.49 3,285.11(g) Profit before tax 100.72 5,130.52 18.79 957.40(h) Provision for tax 38.17 1,944.33 7.42 378.12(i) Profit after tax 62.55 3,186.19 11.37 579.28(j) Proposed dividend - - - -

Note: US $ have been converted to INR at the exchange rate prevailing on 31.03.2012 (1 US $ = ` 50.94)

30. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification /disclosure.

4 CMC- Conso 54-77.p65 2012/06/01, 08:18 AM77

CMC Limited


78

AUDITORS’ REPORT

TO THE MEMBERS OFCMC LIMITED

1. We have audited the attached Balance Sheet of CMC Limited ('the Company'), as at 31 March, 2012, the Statement ofProfit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto.These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinionon these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosuresin the financial statements. An audit also includes assessing the accounting principles used and the significant estimatesmade by the Management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (the 'Order') issued by the Central Government of India interms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessaryfor the purposes of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears fromour examination of those books;

c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are inagreement with the books of account;

d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by thisreport comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e) in our opinion and to the best of our information and according to the explanations given to us, the said accountsgive the information required by the Companies Act, 1956 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2012;

ii. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of written representations received from the Directors as on 31 March, 2012 taken on record by the Board ofDirectors, we report that none of the Directors is disqualified as on 31 March, 2012 from being appointed as a director interms of Section 274(1)(g) of the Companies Act, 1956.



Alka ChadhaPartner


5 CMC - PG 78-81.p65 2012/06/01, 08:18 AM78

79

ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)

i. Having regard to the nature of the Company's business/activities/result, clause 4(xiii) of the Order is not applicable.

ii. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixedassets.

b. The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verificationwhich, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us, no material discrepancies were noticed on such verification.

c. The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Companyand such disposal has, in our opinion, not affected the going concern status of the Company.

iii. In respect of its inventory:

a. As explained to us, inventory in the Company's possession has been verified by the Management during the year at reasonableintervals. For materials lying with third parties or at customers' sites aggregating to ` 935.69 lacs in the absence of confirmationsfrom such parties, we have relied on certification from the respective Project Managers.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventoriesfollowed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of itsinventories and no material discrepancies were noticed on physical verification.

iv. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in theRegister maintained under Section 301 of the Companies Act, 1956.

v. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensuratewith the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale ofgoods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

vi. Based on the examination of the books of account and related records and according to the information and explanations provided tous, there are no contracts or arrangements with companies, firms or other parties which need to be listed in the register maintainedunder Section 301 of the Companies Act, 1956.

vii. According to the information and explanations given to us, the Company has not accepted any deposits from the public, within themeaning of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance ofDeposits) Rules, 1975.

viii. In our opinion, the Company has an adequate internal audit system commensurate with the size of the Company and nature of itsbusiness.

ix. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost recordsunder Section 209 (1) (d) of the Companies Act, 1956 for the Company.

x. According to the information and explanations given to us in respect of statutory dues:

a. the Company has been generally regular in depositing undisputed dues, including Service Tax, Income Tax, Provident Fund, InvestorEducation and Protection Fund, Employees' State Insurance, Sales Tax, Wealth Tax, Customs Duty, Cess and other material statutorydues applicable to it with the appropriate authorities.

The operations of the Company during the year did not give rise to any Excise Duty.

b. there are no undisputed amounts payable in respect of Service Tax, Income Tax, Provident Fund, Investor Education and ProtectionFund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Cess and other material statutory dues inarrears as at 31 March, 2012 for a period of more than six months from the date they became payable.

The operations of the Company during the year did not give rise to any Excise Duty.

5 CMC - PG 78-81.p65 2012/06/02, 08:56 AM79

CMC Limited


80

Statute Nature of dues Forum where Period to Amountdispute is pending which the involved

amount relates `/lacsWest Bengal Value i Tax demand on disallowance of credit for Tax Deducted at Source (TDS), West Bengal Commercial Taxes 1999-00 to 2000-01 2.34Added Tax Act, 2003 concessional sales tax forms and set off of amount of tax paid to sub-contractors Appellate and Revision Board

ii Tax demand on disallowance of credit for Tax Deducted at Source (TDS), Assistant Commissioner of Commercial Taxes 1997-98 11.88concessional sales tax forms and set off of amount of tax paid to sub-contractors

iii Tax demand imposed on enhancement of turnover West Bengal Commercial Taxes Appellate 2003-04 9.95and Revision Board

iv Exparte assessment made by Deputy Commissioner West Bengal Commercial Taxes Appellate 2004-05 30.20and Revision Board

v Enhancement of gross turnover, imposition of VAT on franchisee collections Additional commissioner, Commercial Taxes, 2006-07 14.99West Bengal

69.36

Bihar Value Added Tax demand and penalty imposed on enhancement of turnover during Commercial Taxes Tribunal 1990-91 to 1992-93 39.19Tax Act, 2005 assessment and delay in filing of return

39.19

Madhya Pradesh Tax demand on disallowance of credit for TDS and tax deposited through challans Assistant Commissioner, Commercial Tax 2005-06 0.42Commercial Tax Act, 1994

Madhya Pradesh Tax demand on enhancement of turnover during assessment Commercial tax Officer 2002-03 & 2005-06 6.19Land Revenue Code, 1959 to 2007-08

6.61

Uttar Pradesh i Tax demand on interstate sales deemed intra state sales Deputy Commissioner, Commercial Tax 1994-95 1.94Trade Tax Act, 1948 ii Tax demand on disallowance of non-taxable turnover Deputy Commissioner, Appeal 1996-97 0.38

iii Tax demand on disallowance of credit for TDS and tax deposited through challans Deputy Commissioner, Commercial Tax 2002-03 2.87iv Tax demand on disallowance of exempted turnover Deputy Commissioner, Appeals 2004-05 11.95v Tax demand due to deficiencies in documents accompanying the goods Joint Commissioner Appeals 2006-07 1.70

Uttar Pradesh Value Tax demand due to deficiencies in documents accompanying the goods Commercial Tax Tribunal 2009-10 5.30Added Tax Act, 2008

Central Sales Tax Tax demand on non-submission sales tax forms Deputy Commissioner, Appeals 2006-07 2.86Act, 1956

27.00

Tamil Nadu Value i Tax demand on 'sales in transit' transactions Appellate Assistant Commissioner 1993-94 9.22Added Tax Act, 2006 ii Tax demand on spares replaced under warranty Appellate Assistant Commissioner 1995-96 to 1998-99 1.63

iii Tax demand on defective Form - C and Form - D Commercial Tax Officer 1994-95 & 1998-99 0.49iv Tax demand raised by the Assessing Officer towards tax on notional gross profit Commercial Tax Officer 1994-95 & 1998-99 3.13v Tax demand on re-opening completed assessment Appellate Assistant/ 2003-04, 2004-05 17.33

Deputy Commissioner & 2006-07vi Tax demand on gross amount including sales tax Appellate Assistant Commissioner 1996-97 & 1997-98 13.55vii Tax demand on goods assessed at higher rate of tax Assistant/Deputy Commissioner 1996-97 & 1999-2000 4.07viii Tax demand on exceeded turnover Assistant Commissioner, Commercial Tax 2005-06 14.53

63.95

Andhra Pradesh Value i Tax demand on sales assessed as works contract Appellate Tribunal 2001-02 56.74Added Tax Act, 2005 ii Tax demand on sales assessed as works contract Commercial Tax Officer 2002-03 to 2003-04 136.25

iii Tax demand on sales assessed as works contract Appellate Deputy Commissioner 2004-05 191.11

384.10

Uttaranchal Value i Tax demand on disallowance of exempted turnover Commercial Tax Officer 2005-06 0.71Added Tax Act, 2005 ii Tax demand on denial of input tax credit Appellate Assistant Commissioner 2006-07 3.59

4.30

Delhi Value Added Tax demand due to error in computation Commercial Tax Officer 2006-07 0.32Tax Act, 2004

0.32

Delhi Sales Tax on Work i Tax demand on disallowance of input tax credit Commercial Tax Officer 1999-00 0.52Contract Act, 1999 ii Tax demand on recomputation of gross turnover on the basis of Commercial tax Officer 2002-03 36.55

TDS certificates submitted37.07

Finance Act, 1994 i Demand of service tax on election photo identification cards High Court 2002-03 17.45ii Demand of service tax on IDBRT facility management project Custom, Excise and Service Tax Appellate Tribunal 2003-04 13.44iii Demand of service tax on CMC share of course fee Supreme Court 2003-04 4.50iv Demand of service tax on election photo identification cards Joint Commissioner, Service Tax 2002-03 to 2008-09 98.32v Demand of service tax on course fee shared with franchisees Additional Commissioner of Service Tax 2003-04 25.77vi Demand of service tax on installation and commissioning of equipment Commissioner of Service Tax/ 2004-05 to 2009-10 3,137.42

Joint Commissioner of Service Taxvii Excess utilisation of CENVAT credit Commissioner, Service Tax 2005-06 to 2009-10 797.29viii Demand of service tax on election photo identification cards Assistant Commissioner of Service Tax 2010-11 2.57ix Demand of service tax on installation and commissioning of equipment Additional Commissioner of Service Tax 2010-11 23.07x Demand of service tax for irregular availment of input service tax credit Deputy Commissioner of Custom, 2010-11 1.71

Excise and Service Taxxi Demand of service tax on course fee shared with franchisees Refer Note 1 2002-03 to 2005-06 2.14xii Demand of service tax on facility management services Refer Note 1 2003-04 to 2006-07 655.52

c. Details of dues of Income Tax, Sales Tax, Works Contract Tax and Service Tax which have not been deposited as on 31 March, 2012on account of disputes are given below:

5 CMC - PG 78-81.p65 2012/06/01, 07:42 PM80

81

xi. The Company does not have any accumulated losses nor has incurred any cash losses during the current and the immediatelypreceding financial year.

xii. According to the information and explanations given to us and the records of the Company examined by us, the Company has nottaken any loans from financial institutions or banks or issued any debentures. Accordingly, the provisions of clause 4(xi) of the Orderare not applicable to the Company.

xiii. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of securityby the way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are notapplicable to the Company.

xiv. In our opinion and according to the information and explanations given to us the Company is not dealing in shares, securities anddebentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others frombanks or financial institutions.

xvi. According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.Accordingly, the provisions of clause 4(xvi) of the Order are not applicable to the Company.

xvii. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, wereport that funds raised on short term basis have not been used during the year for long- term investment

xviii. According to the information and explanations given to us, the Company has not made any preferential allotment of shares toparties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the period coveredby our report. Accordingly, the provisions of clause (xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by way of public issues during the year.

xxi. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and nomaterial fraud on the Company has been noticed or reported during the year.



Alka ChadhaPartner


Statute Nature of dues Forum where Period to Amountdispute is pending which the involved

amount relates `/lacs

xiii Demand of service tax on facility management and WAN services Refer Note 1 2004-05 to 2009-10 744.89xiv Demand on account of denial of cenvat credit against service tax paid Commissioner of Service Tax 2006-07 to 2008-09 0.41

to travel agents on account of booking of tickets of employeesxv Demand of service tax on facility management and WAN services Additional Commissioner of 2010-11 25.47

Central Excise and Service Taxxvi Demand of service tax on preparation of electoral rolls Additional Commissioner of 2004-2005 to 2006-2007 36.25

Service Tax (Appeals)xvii Demand of service tax and penalty thereon related to installation Additional Commissioner of 2004-2005 to 2009-010 599.52

and commissioning services Service Tax (Appeals)xviii Incorrect utilization of service tax input credit Additional Commissioner, 2004-05 to 2009-2010 9.56

Service Tax (Appeals)xix Disputed service tax for non-payment of service tax under Refer note 1 2010-11 19.73

supply of eligible goodsxx Disputed service tax related to installation and commissioning services Refer note 1 2010-11 119.12xxi Disputed service tax on input credit not captured in the service tax returns Deputy Commissioner of Customs 2010-11 14.55

Central Excise & Service Tax6,348.70

Income Tax Act,1961 i Tax deducted at lower rate Refer Note 2 2006-07 & 2010-11 87.60ii Taxability of unearned income and various disallowance of deductions Commissioner of Income Tax, (Appeals) 2008-09 456.63iii Tax deducted at lower rate Refer Note 2 266.63

810.86

Grand Total 7,791.46Notes:

1. Demand raised by the Commissioner of Service Tax.2. Demand raised by the Additional Commissioner of Income Tax.

The Company proposes to file an appeal before the appropriate authorities in respect of the above (See note 27.1 of note forming part of the financial statement).We are informed that there are no dues in respect of Wealth Tax, Customs Duty and Cess which have not been deposited on account of any dispute. The Company's operations did not give rise to ExciseDuty.

5 CMC - PG 78-81.p65 2012/06/01, 08:18 AM81

CMC Limited

82


BALANCE SHEET AS AT 31 MARCH, 2012

Particulars Note As at As atNo. 31 March, 2012 31 March, 2011

` / lacs ` / lacs

A. EQUITY AND LIABILITIES

1. Shareholders’ Funds(a) Share capital 3 3,030.00 1,515.00(b) Reserves and surplus 4 66,611.98 58,195.77

69,641.98 59,710.772. Non-current liabilities

(a) Other long-term liabilities 5 1,214.86 720.68(b) Long-term provisions 6 2,745.73 2,511.76

3,960.59 3,232.443. Current liabilities

(a) Trade payables 7 17,505.20 14,368.35(b) Other current liabilities 8 4,675.11 7,360.60(c) Short-term provisions 9 12,036.29 9,628.83

34,216.60 31,357.78

TOTAL 107,819.17 94,300.99B. ASSETS

1. Non-current assets(a) Fixed assets

(i) Tangible assets 10 25,735.58 9,526.80(ii) Capital work-in-progress 3,338.57 10,754.95

29,074.15 20,281.75

(b) Non-current investments 11 818.01 818.01(c) Deferred tax assets (net) 12 909.96 760.90(d) Long-term loans and advances 13 14,008.64 10,204.66

15,736.61 11,783.572. Current assets

(a) Current investments 14 15,157.80 22,617.05(b) Inventories 15 1,340.68 1,346.90(c) Trade receivables 16 26,596.46 17,471.37(d) Cash and cash equivalents 17 2,217.38 3,387.68(e) Short-term loans and advances 18 4,775.23 5,230.01(f ) Other current assets 19 12,920.86 12,182.66

63,008.41 62,235.67

TOTAL 107,819.17 94,300.99

See accompanying notes forming part of the financial statements 1 to 28






6 CMC - 82-109.p65 2012/06/01, 08:18 AM82

83

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2012


` / lacs ` / lacs

1. Income

(a) Revenue from operations 20 95,533.69 79,808.21

(b) Other income 21 4,439.41 1,179.18

2. Total revenue 99,973.10 80,987.39

3. Expenses

(a) Purchases of stock-in-trade 22 14,481.16 9,905.79(b) Changes in inventories of work-in-progress and stock-in-trade 23 (33.48) (323.36)(c) Employee benefits expense 24 34,258.37 27,674.00(d) Finance costs 25 0.94 0.95(e) Depreciation and amortisation 10 2,088.30 1,008.95(f ) Other expenses 26 30,172.81 25,317.82

4. Total expense 80,968.10 63,584.15

5. Profit before tax (2-4) 19,005.00 17,403.24

6. Tax expense

(a) Current tax expense for current year 4,721.05 3,588.37(b) (Less): MAT credit - (1,546.34)(c) Current tax expense relating to prior years 99.85 -(d) Net current tax expense 4,820.90 2,042.03(e) Deferred tax (149.06) (211.91)

4,671.84 1,830.12

7. Profit for the year (5-6) 14,333.16 15,573.12

8. Earnings per share (of ` 10 each) 28.5

(a) Basic 47.30 51.40(b) Diluted 47.30 51.40

See accompanying notes forming part of the financial statements 1 to 28






6 CMC - 82-109.p65 2012/06/01, 10:03 AM83

CMC Limited

84


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012Particulars Note For the year ended For the year ended

No. 31 March, 2012 31 March, 2011

` / lacs ` / lacsA. Cash flow from operating activities

Profit before tax 19,005.00 17,403.24Adjustments for:

Depreciation and amortisation 2,088.30 1,008.95Profit on sale of assets (6.44) (27.07)Finance costs 0.94 0.95Interest income (14.76) (9.48)Dividend income (3,147.03) (680.74)Liabilities / provisions no longer required written back (120.08) (239.82)Provision for doubtful trade and other receivables, loans and advances - 875.84Bad trade and other receivables, loans and advances written off 788.07 23.15Fixed assets written off 5.07 29.82Net gain on sale of - mutual funds (1,133.56) (39.43)Exchange difference on translation of foreign currency cash and cash equivalent (13.88) (5.18)Net unrealised exchange (gain) / loss (107.58) (53.52)

(1,660.95) 883.47

Operating profit before working capital changes 17,344.05 18,286.71Changes in working capital:Adjustments for (increase) / decrease in operating assets:

Inventories 6.22 (494.14)Trade receivables (9,805.59) (1,700.45)Short-term loans and advances 454.78 (530.66)Long-term loans and advances (2,098.59) 332.89Other current assets (738.21) (1,501.71)

(12,181.39) (3,894.07)Adjustments for increase / (decrease) in operating liabilities:

Trade payables 3,256.93 3,761.73Non current liabilities 494.18 497.20Other current liabilities (2,621.86) (477.61)Short-term provisions 1,527.06 731.67Long-term provisions 233.97 (121.58)

2,890.28 4,391.41

Cash generated from operations 8,052.94 18,784.05Net income tax paid (5,546.06) (1,803.53)

Net cash flow from operating activities (A) 2,506.88 16,980.52

B. Cash flow from investing activitiesCapital expenditure on fixed assets, including capital advances (11,909.58) (9,822.30)Proceeds from sale of fixed assets (17.07) 30.18Current investments in mutual funds not considered as cash and cash equivalents- Purchased (65,927.55) (101,671.11)- Proceeds from sale 74,520.36 98,625.26Interest received - others 14.76 9.48Dividend received- Subsidiary 2,693.90 -- Others 453.13 680.74

Net cash flow used in investing activities (B) (172.05) (12,147.75)

6 CMC - 82-109.p65 2012/06/01, 08:18 AM84

85

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012


` / lacs ` / lacs

NoteNo.

C. Cash flow from financing activitiesFinance cost (1.34) (0.51)Dividend paid (3,026.13) (3,026.64)Tax on dividend (491.54) (476.74)

Net cash flow used in financing activities (C) (3,519.01) (3,503.89)

Net decrease in Cash and cash equivalents (A+B+C) (1,184.18) 1,328.88

Cash and cash equivalents at the beginning of the year 17 3,387.68 2,053.62Effect of exchange differences on restatement of 13.88 5.18foreign currency Cash and cash equivalents

Cash and cash equivalents at the end of the year 2,217.38 3,387.68

Reconciliation of Cash and cash equivalentswith the Balance Sheet:

Cash and cash equivalents as per Balance Sheet 2,217.38 3,387.68

Cash and cash equivalents at the end of the year * 17 2,217.38 3,387.68* Comprises:(a) Cash on hand 48.54 25.19(b) Cheques, drafts on hand 77.88 226.78(c) Balances with banks


- Unpaid dividend accounts 27.84 26.42- Balances held as margin money against guarantees 3.50 -

2,217.38 3,387.68






6 CMC - 82-109.p65 2012/06/01, 08:18 AM85

CMC Limited

86


NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1. Background

CMC Limited ("the Company") is engaged in the design, development and implementation of software technologies and applications,providing professional services in India and overseas, and procurement, installation, commissioning, warranty and maintenance ofimported/indigenous computer and networking systems, and in education and training.

The Company was a Government of India (GoI) enterprise up to 15 October, 2001. Under the disinvestment process, GoI sold 7,726,500shares representing 51 percent of the share capital to Tata Sons Limited, on 16 October, 2001. The GoI further sold its entire remainingshares representing 26.25 percent of the share capital, in March 2004 by an open offer to the public.

On 29 March, 2004, as per specific approval granted by SEBI, Tata Sons Limited transferred its entire shareholding in the Company toTata Consultancy Services Limited (a subsidiary of Tata Sons Limited). As a result, the Company has become a subsidiary of TataConsultancy Services Limited.

2. Significant accounting policies

a. Basis of accounting

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principlesin India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules,2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared onaccrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statementsare consistent with those followed in the previous year.

b. Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates andassumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported incomeand expenses during the year. The Management believes that the estimates used in preparation of the financial statements areprudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and theestimates are recognised in the periods in which the results are known / materialise.

c. Inventories

Inventories include stock in trade, finished goods, stores and spares and work-in progress.

i. Inventories are valued at the lower of cost (on First in first out basis in respect of stock-in-trade mainly comprising equipmentfor resale / on weighted average basis in respect of finished goods mainly comprising Education and Training material) andthe net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes allcharges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.

ii. Inventories of stores and spares are valued at cost, net of provision for diminution in the value. Cost is determined on weightedaverage cost basis.

iii. Work-in-progress comprises cost of infrastructural facilities in the process of installation at customers' sites. These are valuedat cost paid / payable to sub-contractors.

d. Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances highly liquid investmentsthat are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for theeffects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flowsfrom operating, investing and financing activities of the Company are segregated based on the available information.

f. Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act,1956 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under:

• Leasehold assets are amortised over the period of lease.

6 CMC - 82-109.p65 2012/06/01, 08:18 AM86

87

• Computers, plant and machinery - (other items) are depreciated over six years.

Assets costing less than ` 5,000 individually have been fully depreciated in the year of purchase.

Intangible assets are amortised over the estimated useful life.

g. Revenue recognition

Sale of goods

Revenue relating to equipment supplied is recognised, net of returns and trade discounts, on transfer of significant risks andrewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude sales tax andvalue added tax.

Income from services

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs areincurred. Revenues from time bound fixed price contracts, are recognised over the life of the contract using the proportionate ofcompletion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognisedwhen probable.

Revenues from maintenance contracts are recognised on pro-rata basis over the period of the contract.

Revenue from "Education and Training" is recognised on accrual basis over the course term.

h. Other income

Interest income is accounted on accrual basis. Dividend income is accounted when the right to receive it is established.

i. Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includesinterest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended useand other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-termforeign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assetsand depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalised only ifsuch expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard ofperformance.

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and aredisclosed separately in the Balance Sheet.

Capital work-in-progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprisingdirect cost, related incidental expenses and attributable interest.

j. Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible assetcomprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from thetaxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any tradediscounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expensewhen incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess ofits originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, inwhich case such expenditure is added to the cost of the asset.

k. Foreign exchange transactions and translations

Initial recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of thetransaction or at rates that closely approximate the rate at the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items of the Company outstanding at the Balance Sheet date are restated at the year-end rates.

6 CMC - 82-109.p65 2012/06/01, 08:18 AM87

CMC Limited

88


Treatment of exchange differences

Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of theCompany are recognised as income or expense in the Statement of profit and loss.

Accounting of forward contracts

Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortisedover the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.

l. Grants

i. Grants received for capital expenditure incurred are included in "Capital Reserve". Fixed assets received free of cost areconsidered as a grant and are capitalised at notional value with a corresponding credit to the Capital Reserve account.

An amount equivalent to the depreciation charge on such assets is appropriated from capital reserve and recognised asrevenue in the Statement of profit and loss.

ii. Grants received for execution of projects is recognised as revenue to the extent utilised.

iii. Unutilised grants are shown under other liabilities.

m. Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in the carrying value of eachinvestment. Current investments comprising investments in mutual funds are stated at the lower of cost and fair value, determinedon a portfolio basis. Cost of investments include acquisition charges such as brokerage, fees and duties.

n. Employee benefits

Employee benefits include provident fund, gratuity fund, compensated absences and post-employment medical benefits.

Post-employment benefit plans

Payment to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits isdetermined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarialgains and losses are recognised in the Statement of profit and loss in the period in which they occur. Past service cost is recognisedimmediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the averageperiod until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the presentvalue of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of schemeassets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds andreductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employeesare recognised during the year when the employees render the service. These benefits include performance incentive andcompensated absences which are expected to occur within twelve months after the end of the period in which the employeerenders the related service. The cost of such compensated absences is accounted as under:

i. in case of accumulated compensated absences, when employees render the services that increase their entitlement of futurecompensated absences; and

ii. in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employeerenders the related service are recognised as a liability at the present value of the defined benefit obligation as at the BalanceSheet date less the fair value of the plan assets, if any out of which the obligations are expected to be settled.

o. Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currencyborrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of fundsto the extent not directly related to the acquisition of qualifying assets are charged to the Statement of profit and loss over the

6 CMC - 82-109.p65 2012/06/01, 08:18 AM88

89

tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencementof activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added tothe cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of profit and loss duringextended periods when active development activity on the qualifying assets is interrupted.

p. Leases

Where the Company as a lessor leases assets under finance leases, such amounts are recognised as receivables at an amount equalto the net investment in the lease and the finance income is recognised based on a constant rate of return on the outstanding netinvestment.

Assets leased by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in theCompany are classified as finance leases. Such leases are capitalised at the inception of the lease at the lower of the fair value andthe present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid isallocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liabilityfor each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognisedas operating leases. Lease rentals under operating leases are recognised in the Statement of profit and loss on a straight-line basis.

q. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, ifany) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed bydividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interestand other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number ofequity shares considered for deriving basic earnings per share and the weighted average number of equity shares which couldhave been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive onlyif their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutiveequity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Thedilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e.average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each periodpresented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splitsand bonus shares, as appropriate.

r. Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions ofthe Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustmentto future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal incometax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associatedwith it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting incomethat originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using thetax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for alltiming differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only ifthere is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets arerecognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxableincome will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate totaxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferredtax assets are reviewed at each Balance Sheet date for their realisability.

s. Research and development expenses

Research and development costs of revenue nature are charged to the Statement of profit and loss, when incurred. Expenditure ofcapital nature is capitalised and depreciated in accordance with the rates set out note 2(f ).

6 CMC - 82-109.p65 2012/06/01, 08:18 AM89

CMC Limited

90


t. Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication ofimpairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount ofthese assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value inuse. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or mayhave decreased, such reversal of impairment loss is recognised in the Statement of profit and loss, except in case of revaluedassets.

u. Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflowof resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excludingretirement benefits) are not discounted to their present value and are determined based on the best estimate required to settlethe obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current bestestimates. Contingent liabilities are disclosed in the note 27.1.

v. Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted andwhen there is no uncertainty in availing / utilising the credits.

w. Segment Information

i. Business segments

Based on similarity of activities, risks and reward structure, organisation structure and internal reporting systems, the Companyhas structured its operations into the following segments:

Customer Services (CS): Hardware supplies and maintenance, facilities management and provision of infrastructure facilities.

Systems Integration (SI): Systems study and consultancy, software design, development and implementation, softwaremaintenance and supply of computer hardware and system software in turnkey projects involving software in accordancewith customers' requirements.

IT Enabled Services (ITeS): Primary value added services, data network, data center services and web design.

Education and Training (E&T): IT education and training service through its own centers, through franchisees and forcorporate.

Special Economic Zone Development (SEZ): Lease of developed SEZ infrastructure in Hyderabad.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segmentrevenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of theirrelationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments onreasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

ii. Geographic segments

The Company also provides services overseas, primarily in the United States of America, United Kingdom and others.

6 CMC - 82-109.p65 2012/06/01, 08:18 AM90

91

Note 3 Share capital

Particulars As at 31 March, 2012 As at 31 March, 2011 Number of shares Amount Number of shares Amount

` / lacs ` / lacs

(a) Authorised

Equity share capital 35,000,000 3,500.00 35,000,000 3,500.00

Equity shares of ` 10 (Previous year ` 10) each with voting rights

(b) Issued


(c) Subscribed and fully paid up


Refer Notes (i) to (v) below

Notes:

(i) The Company has one class of equity shares having a par value of ` 10 each. Each shareholder is eligible for one vote per share held.(ii) Details of shares held by each shareholder holding more than 5% shares:

Class of shares / Name of shareholder As at 31 March, 2012 As at 31 March, 2011Number of % holding Number of % holding

shares held shares held


Tata Consultancy Services Limited 15,489,922 51.12 7,744,961 51.12Aberdeen Global Indian Equity Fund - Mauritius Limited 1,920,000 6.34 - -Aberdeen Assets Managers Limited - A/c Aberdeen - - 960,000 6.34International India Opportunity Fund (Mauritius) LimitedHDFC Trustees Company Limited - HDFC Equity Fund 1,912,832 6.31 956,416 6.31

Total 19,322,754 63.77 9,661,377 63.77

(iii) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Particulars Opening Balance Bonus Closing Balance


Year ended 31 March, 2012- Number of shares 15,150,000 15,150,000 30,300,000- Amount (` / lacs) 1,515.00 1,515.00 3,030.00

Year ended 31 March, 2011- Number of shares 15,150,000 - 15,150,000- Amount (` / lacs) 1,515.00 - 1,515.00

(iv) Details of shares held by Tata Consultancy Services Limited, the holding Company


31 March, 2012 31 March, 2011

Fully paid up equity shares with voting rights 15,489,922 7,744,961

(v) Aggregate number and class of shares allotted as bonus shares for the period of 5 years immediately preceding the Balance Sheet date:


31 March, 2012 31 March, 2011


Fully paid up by way of bonus shares 15,150,000 -

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

6 CMC - 82-109.p65 2012/06/01, 08:18 AM91

CMC Limited

92


Note 4 Reserves and surplus


` / lacs ` / lacs(a) General reserve

Opening balance 5,688.91 4,131.60Add: Transferred from surplus in Statement of profit and loss 1,433.32 1,557.31Less: Utilised during the year for issuing bonus shares (1,515.00) -Closing balance 5,607.23 5,688.91

(b) Surplus in Statement of profit and loss

Opening balance 52,506.86 42,012.59

Add: Profit for the year 14,333.16 15,573.12Less: Dividends proposed to be distributed to equity shareholders (3,787.50) (3,030.00)

` 12.50 per share (previous year ` 20 per share) (See note below)

Tax on dividend (614.45) (491.54)Transferred to general reserve (1,433.32) (1,557.31)Closing balance 61,004.75 52,506.86

Total 66,611.98 58,195.77

Note:

Dividend of ` 12.50 per equity share is on the enhanced capital base of ` 3,030.00 lacs consequent to allotment of bonus share in the ratioof 1:1 on 10 June, 2011.

Income received in advance 1,214.86 720.68

Total 1,214.86 720.68

Note 5 Other long term Liabilities


` / lacs ` / lacs

Note 7 Trade payables


` / lacs `/lacsTrade payables:

Other than Acceptances (Refer note 27.2) 17,505.20 14,368.35

Total 17,505.20 14,368.35

Note 6 Long-term provisions


` / lacs ` / lacs

Provision for employee benefits:

(i) Provision for gratuity (net) (Refer Note 28.1) 2,332.79 2,129.15(ii) Provision for post-employment medical benefits (Refer Note 28.1) 412.94 382.61

Total 2,745.73 2,511.76

6 CMC - 82-109.p65 2012/06/01, 08:18 AM92

93

(a) Income received in advance 1,851.98 3,792.06(b) Unpaid dividends 27.84 26.42(c) Other payables

(i) Statutory dues 887.70 1,230.34(ii) Payables on purchase of fixed assets 345.65 412.95(iii) Interest accrued on trade payables 0.81 0.80(iv) Interest accrued on others 0.26 0.67(v) Security deposits received 631.50 427.08(vi) Advances from customers 929.37 1,470.28

Total 4,675.11 7,360.60

Note 8 Other current liabilities


` / lacs ` / lacs

Note 10 Fixed assets

Gross block Accumulated Depreciation Net blockTangible Assets As at Additions Disposals As at As at Depreciation Eliminated on As at As at 31 As at 31

1 April, 2011 31 March, 2012 1 April, 2011and amortisation disposal of 31 March, 2012 March, 2012 March, 2011 for the year assets

` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs ` / lacs

(a) LandFreehold 6.05 - - 6.05 - - - - 6.05 6.05Leasehold 596.15 187.50 - 783.65 126.69 7.62 - 134.31 649.34 469.46

(b) BuildingsOwn use 3,320.61 378.51 - 3,699.12 991.65 155.01 - 1,146.66 2,552.46 2,328.96Given under operating lease 4,034.87 11,360.02 - 15,394.89 170.23 171.62 - 341.85 15,053.04 3,864.64

(c) Plant and EquipmentOwn use 7,450.00 2,172.76 170.23 9,452.53 5,293.30 1,012.76 162.40 6,143.66 3,308.87 2,156.70Given under operating lease - 3,192.97 - 3,192.97 - 526.83 - 526.83 2,666.14 -

(d) Furniture and FittingsOwn use 1,215.68 205.15 41.35 1,379.48 756.56 153.50 39.36 870.70 508.78 459.12Given under operating lease - 607.92 - 607.92 - 31.86 - 31.86 576.06 -

(e) Vehicles - Own use 59.44 39.02 7.70 90.76 37.14 5.44 2.91 39.67 51.09 22.30

(f) Office equipmentOwn use 416.15 60.85 3.80 473.20 196.58 23.48 2.71 217.35 255.85 219.57Given under operating lease - 108.08 - 108.08 - 0.18 - 0.18 107.90 -

Total 17,098.95 18,312.78 223.08 35,188.65 7,572.15 2,088.30 207.38 9,453.07 25,735.58 9,526.80

Previous Year 16,926.27 1,268.23 1,095.55 17,098.95 7,625.82 1,008.95 1,062.62 7,572.15 9,526.80

Note 9 Short-term provisions


` / lacs ` / lacs(a) Provision for employee benefits

(i) Provision for compensated absences 2,190.19 1,738.32(ii) Others 412.44 242.55

2,602.63 1,980.87(b) Provision - Others

(i) Provision for tax(net of advance tax ` 7,896.08 lacs (Previous year ` 8,701.53 lacs) 5,031.71 4,126.42

(ii) Provision for proposed equity dividend 3,787.50 3,030.00(iii) Provision for tax on proposed dividends 614.45 491.54

9,433.66 7,647.96

Total 12,036.29 9,628.83

6 CMC - 82-109.p65 2012/06/01, 08:18 AM93

CMC Limited

94


Note 11 Non-current investments


Unquoted Total Unquoted Total Nos. ` / lacs Nos. ` / lacs

Investment (At cost)

Trade investment in equity instruments

Investment in non-assessable fully paid up equity 160,001,000 818.01 160,001,000 818.01

shares of USD 0.01 each in wholly owned subsidiary -

CMC Americas Inc., USA

Total 160,001,000 818.01 160,001,000 818.01

(a) Capital advances - Unsecured, considered good 1,605.02 659.14

(b) Security deposits - Unsecured, considered good 1,334.71 712.02

(c) Loans and advances to employees

(i) Secured, considered good (See note below) 26.97 35.78

(ii) Unsecured, considered good 12.36 8.23

(d) Prepaid expenses - Unsecured, considered good 61.64 85.03

(e) Advance income tax (net of provisions ` 13,185.59 lacs 10,862.56 8,144.27

(Previous year ` 8,364.69 lacs ) - Unsecured, considered good

(f ) Other loans and advances - Unsecured, considered good 105.38 560.19

Total 14,008.64 10,204.66

Note:

Long-term loans and advances include amounts due from:

Managing Director & CEO 8.77 10.45

Note 12 Deferred tax assets (net)


` / lacs ` / lacs

(a) Tax effect of items constituting deferred tax liability

(i) On difference between book balance and tax balance of fixed assets (1,451.97) (1,075.86)

(1,451.97) (1,075.86)

(b) Tax effect of items constituting deferred tax asset

(i) Provision for doubtful receivables 430.61 567.13(ii) Provision for employee benefits 1,670.30 1,038.23(iii) Others 261.02 231.40

2,361.93 1,836.76

Total 909.96 760.90

Note 13 Long-term loans and advances


`/lacs `/lacs

6 CMC - 82-109.p65 2012/06/01, 08:18 AM94

95

Note 14 Current investments



(a) Fixed maturity plan (FMP)

Birla Sun Life Fixed Term Plan - Series CI - Growth - - 10,000,000 1,000.00

Birla Sun Life Fixed Term Plan - Series DT - Growth 10,000,000 1,000.00 - -

Birla Sun Life Fixed Term Plan Series CK (368D) - - 8,000,000 800.00

HDFC Fixed Maturity Plans 370 D February 2012(2) Series XXI - Growth 9,000,000 900.00 - -

ICICI Prudential Fixed Maturity Plan Yearly Series 52 - Plan C - - 6,000,000 600.00

ICICI Prudential Fixed Maturity Plan A - Series 53 - Growth - - 8,000,000 800.00

ICICI Prudential Fixed Maturity Plan Series 55 -1 year Plan A - Growth - - 5,000,000 500.00

ICICI Prudential Flexible Interval Fund -Annual Interwal Plan I - Growth - - 9,993,005 1,000.00

ICICI Prudential FMP Series 54-1 Y Plan C- Cumulative 22,000,000 2,200.00 - -

ICICI Prudential FMP Series 56-1 Year Plan D - Growth - - 10,000,000 1,000.00

ICICI Prudential FMP Series 62-1 Y Plan B - Cumulative 9,000,000 900.00 - -

IDFC Fixed Maturity Plan - Yearly Series 32 - Growth - - 5,000,000 500.00

IDFC Fixed Maturity Plan Monthly Series - 29 - - 9,001,718 900.17

IDFC Fixed Maturity Plan yearly Series - 37- Growth - - 14,000,000 1,400.00

IDFC Fixed Maturity Plan Yearly Series 33 - Growth - - 7,000,000 700.00



Kotak FMP 370 Days Series 6 - Growth - - 5,000,000 500.00



Kotak FMP Series 33 - Growth - - 5,000,000 500.00

Kotak FMP Series 44 - Growth 7,000,000 700.00 - -

Kotak FMP Series 74 - Growth 8,000,000 800.00 - -

Kotak FMP Series 84 - Growth 10,000,000 1,000.00 - -

Kotak Quarterly Interval Plan - Series 9 - Dividend - - 5,997,661 600.00

SBI Debt Fund Series - 370 Days - 6 - Growth - - 3,000,000 300.00

TATA Fixed Maturity Plan Series - 26 Scheme C- Growth - - 12,000,000 1,200.00

TATA Fixed Maturity Plan Series - 30 Scheme C - Growth 8,000,000 800.00 - -

TATA Fixed Maturity Plan Series 28 - Scheme A Dividend Payout - - 10,000,000 1,000.00

8,300.00 15,500.17

(b) Liquid / Liquid plus

Birla Sunlife Ultra Short Term Fund - Institutional Daily Dividend 3,039,293 3,040.97 - -

ICICI Prudential Ultra Short Term Plan Super Premium - Daily Dividend - - 30,894,501 3,102.42

IDFC Money Manager Fund Investment Plan - Inst Plan B - Daily Dividend 16,910,236 1,711.06 - -

IDFC Saving Advantage Fund - Plan A - Monthly Dividend - - 140,838 1,408.60

Kotak Floater Short Term Daily Dividend 20,815,866 2,105.77 - -

TATA Floater Fund - Daily Dividend - - 25,966,118 2,605.86

6,857.80 7,116.88

Total (A+B) 15,157.80 22,617.05

Note:

Book value of current unquoted investments 15,157.80 22,617.05

6 CMC - 82-109.p65 2012/06/01, 08:18 AM95

CMC Limited

96


Note 16 Trade receivables


` / lacs ` / lacs

(a) Trade receivables outstanding for a period exceedingsix months from the date they were due for payment:

(i) Unsecured, considered good 4,500.29 3,294.12(ii) Doubtful 1,327.21 3,696.76

5,827.50 6,990.88

Less: Provision for doubtful trade receivables (1,327.21) (3,696.76)

4,500.29 3,294.12(b) Other trade receivables

Unsecured, considered good 22,096.17 14,177.25

Total 26,596.46 17,471.37

Note 15 Inventories(At lower of cost and net realisable value)


` / lacs ` / lacs

(a) Work-in-progress 5.26 5.26(b) Finished goods

(i) Education and training material 66.17 54.34(ii) Others 12.79 10.71

78.96 65.05(c) Stock-in-trade 989.74 974.14

Goods-in-transit 29.44 11.561,019.18 985.70

(d) Stores and spares 237.28 290.89

Total 1,340.68 1,346.90

(a) Cash on hand 48.54 25.19(b) Cheques, drafts on hand 77.88 226.78(c) Balances with banks


- Unpaid dividend accounts 27.84 26.42- Balances held as margin money against guarantees 3.50 -

Total 2,217.38 3,387.68

Balances that meet the definition of Cash and cash equivalents 2,217.38 3,387.68as per Accounting Standard (AS)-3 Cash Flow Statement

Note 17 Cash and cash equivalents


` / lacs ` / lacs

6 CMC - 82-109.p65 2012/06/01, 08:18 AM96

97

(a) Security deposits

(i) Secured, considered good 1.29 0.51(ii) Unsecured, considered good 1,026.57 990.72(iii) Doubtful 74.95 74.95

1,102.81 1,066.18Less: Provision for doubtful security deposits (74.95) (74.95)

1,027.86 991.23(b) Loans and advances to employees

(i) Secured, considered good (See note below) 34.92 32.99(ii) Unsecured, considered good 208.70 121.75(iii) Doubtful 113.46 113.46

357.08 268.20Less: Provision for doubtful loans and advances to employees (113.46) (113.46)

243.62 154.74

(c) Prepaid expenses - Unsecured, considered good 207.88 520.59

(d) Advance to suppliers

(i) Unsecured, considered good 1,197.18 334.05(ii) Doubtful 181.14 181.14

1,378.32 515.19Less: Provision for doubtful advances to suppliers (181.14) (181.14)

1,197.18 334.05(e) MAT credit entitlement - Unsecured, considered good 1,013.57 2,054.61

(f) Balances with government authorities - Unsecured considered good(i) VAT credit receivable 438.66 429.77(ii) Service tax credit receivable 257.59 245.18

696.25 674.95(g) Others

(i) Unsecured, considered good 388.87 499.84(ii) Doubtful 103.01 103.01

491.88 602.85Less: Provision for other doubtful loans and advances (103.01) (103.01)

388.87 499.84

Total 4,775.23 5,230.01

Note: Short-term loans and advances include amounts due from: Managing Director & CEO 1.68 1.68

Note 18 Short-term loans and advances


` / lacs ` / lacs

Note 19 Other current assets


` / lacs ` / lacs

Unbilled revenue 12,920.86 12,182.66

12,920.86 12,182.66

6 CMC - 82-109.p65 2012/06/01, 08:18 AM97

CMC Limited

98


(a) Interest income

(i) Interest from banks on deposits 5.75 0.26(ii) Interest on loans and advances 8.25 3.02(iii) Other interest 0.76 6.20

14.76 9.48(b) Dividend income

(i) from current investments - mutual funds 453.13 680.74(ii) from long-term investments - subsidiary 2,693.90 -

(c) Net gain on sale of current investment in mutual funds 1,133.56 39.43

(d) Profit on sale of fixed assets (net of loss) 6.44 27.07

(e) Miscellaneous income 137.62 422.46

Total 4,439.41 1,179.18

(a) Purchase of equipment for resale 14,481.16 9,905.79

Total 14,481.16 9,905.79

Note 21 Other income


` / lacs ` / lacs

Note 20 Revenue from operations


` / lacs ` / lacs

(a) Sale of products - Purchased equipment 15,340.96 10,251.74(b) Sale of services (Refer Note (i) below) 77,878.48 67,941.34(c) Rentals from special economic zone 2,076.21 1,227.84(d) Other operating revenues (Refer Note (ii) below) 238.04 387.29

Total 95,533.69 79,808.21

Notes:

(i) Sale of services comprises :

(a) Software services 39,318.51 34,645.80(b) Maintenance services 5,616.59 5,459.10(c) Facility management services 15,039.07 11,162.03(d) Education and training 5,684.41 5,238.48(e) Other services 12,219.90 11,435.93

Total 77,878.48 67,941.34

(ii) Other operating revenues:

(a) Liabilities / provisions no longer required written back 120.08 239.82(b) Bad debts recovered 117.96 147.47

Total 238.04 387.29

Note 22 Purchase of stock- in- trade


` / lacs ` / lacs

6 CMC - 82-109.p65 2012/06/01, 08:18 AM98

99

(a) Inventories at the end of the yearWork-in-progress 5.26 5.26Stock-in-trade 1,019.18 985.70

1,024.44 990.96(b) Inventories at the beginning of the year

Work-in-progress 5.26 5.26Stock-in-trade 985.70 662.34

990.96 667.60

Total (33.48) (323.36)

Note 23 Changes in inventories of work-in-progress and stock-in-trade


` / lacs ` / lacs

(a) Salaries and wages 30,588.38 24,353.87(b) Contributions to provident and other funds 1,726.59 1,741.33(c) Staff welfare expenses 1,943.40 1,578.80

Total 34,258.37 27,674.00

Note 24 Employee benefits expense(See note 28.1)


` / lacs ` / lacs

Note 25 Finance cost


` / lacs ` / lacs

Interest Expenses - Others 0.94 0.95

Total 0.94 0.95

Note 26 Other expenses


` / lacs ` / lacs

(a) Consumption of stores and spare parts 2,566.04 2,534.40

(b) Purchased software 380.68 307.57

(c) Subcontracting and outsourcing cost 10,901.90 9,778.19

(d) Electricity charges 1,550.01 1,036.42

(e) Rent including lease rentals (See note 28.4) 1,836.42 1,746.12

(f ) Repairs and maintenance - Buildings 670.07 590.59

(g) Repairs and maintenance - Plant and equipment 330.66 319.36

(h) Repairs and maintenance - Others 35.05 57.30

(i) Insurance 58.38 40.62

(j) Rates and taxes 281.98 177.23

(k) Communication and postage 901.44 785.90

6 CMC - 82-109.p65 2012/06/01, 08:18 AM99

CMC Limited

100


Note 26 Other expenses (Contd.)


` / lacs ` / lacs

27. Additional information to the financial statements

27.1 Contingent liabilities and commitments


(` / lacs) (` / lacs)(a) Claims against the Company not acknowledged as debts*

• Under litigation 3,586.21 1,188.37

• Demand from income tax authorities (Refer note 'i' below) 1,807.06 -

• Demand from employee state insurance authorities 2.80 2.80

• Disputed demands raised by sales tax authorities 836.65 912.44

• Demands raised by service tax authorities (Refer note 'ii' below) 6,362.48 5,107.46

• Disputed demand towards land use conversion fee 2,025.00 2,025.00

• Sales tax on leased assets - 37.26

• Others 640.21 93.53

(b) Unexpired Letters of Credit 8.83 156.53

(c) Estimated amount of contracts remaining to be executed on capital account 8,127.14 5,680.18

(net of advances) and not provided for

* No provision is considered necessary since the Company expects favorable decisions. The advance paid against the above is` 996.23 lacs. (Previous year Rs. 306.84 lacs).

Notes:

i. Includes ` 354.23 lacs (Previous year ` Nil lacs) pertaining to demand of income tax raised by the Additional Commissioner of Income tax.

ii. Includes ` 1,541.40 lacs (Previous year ` 3,736.81 lacs) pertaining to demand of service tax raised by the Commissioner of Service Tax.

The Company proposes to file an appeal before the appropriate authorities in respect of the above.

(l) Travelling and conveyance 2,680.36 1,980.32

(m) Printing and stationery 375.73 194.13

(n) Freight and forwarding 257.91 168.65

(o) Business promotion, advertisement and publicity 157.74 148.21

(p) Legal and professional 1,162.78 909.35

(q) Education and training

(i) Payment to franchisees 1,846.51 1,399.28

(ii) Other expenses 439.73 392.82

(r) Living expenses - overseas contracts 1,062.77 848.45

(s) Directors sitting fees 15.20 15.10

(t) Commission to non-executive directors 60.00 50.00

(u) Payments to auditors (See note 27.8) 119.38 99.20

(v) Bad trade and other receivables, loans and advances written off 788.07 23.15

(w) Net loss on foreign currency transactions and translation 450.98 56.32

(x) Fixed assets written off 5.07 29.82

(y) Provision for doubtful trade and other receivables, loans and advances (net) - 875.84

(z) Miscellaneous expenses 1,237.95 753.48

Total 30,172.81 25,317.82

6 CMC - 82-109.p65 2012/06/01, 07:47 PM100

101

27.2 Disclosure under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)


` / lacs ` / lacs(a) Amounts payable to suppliers under MSMED (suppliers) as on 31 March, 2012

- Principal 9.64 27.74- Interest due thereon 0.81 0.80

(b) Payments made to suppliers beyond the appointed day during the year

- Principal 0.74 -- Interest due thereon - -

(c) Amount of interest due and payable for delay in payment (which have been 0.01 -paid but beyond the appointed day during the year) but without adding theinterest under MSMED

(d) Amount of interest accrued and remaining unpaid as on 31 March, 2012 0.81 0.80

(e) Amount of interest remaining due and payable to suppliers disallowable as 0.01 0.80deductible expenditure under Income Tax Act, 1961

Note:

The information has been given in respect of such vendors to the extent they could be identified as micro and small enterprises asper MSMED on the basis of information available with the Company. This has been relied upon by the auditors.

27.3 Unexpired foreign exchange forward contracts

The following are outstanding Foreign Exchange Forward contracts as at 31 March, 2012.

Foreign Currency No. of Contracts Notional amount Rupee Equivalentof Forward Contracts (` / lacs) in foreign currency

USD 5 15,000,000.00 7,641.00(-) (-) (-)

As of the balance sheet date, the Company has net foreign currency exposure that is not hedged by a derivative instrument orotherwise amounting to ` 314.37 lacs (Previous year ` 5,479.57 lacs).

Amounts in brackets represent previous year’s figures.


` / lacs ` / lacs27.4 Value of imports (calculated on CIF basis)

(a) Equipment / system software 2,423.03 2,348.85(b) Stores and spares 6.26 6.84(c) Capital equipment 876.48 345.07

27.5 Expenditure in foreign currency (on accrual basis)

(a) Living expenses - overseas contracts 1,018.10 780.60(b) Travelling and conveyance 68.24 47.24(c) Overseas branch expenses and others 949.54 609.53(d) Legal and professional 338.07 488.40(e) Taxes in foreign jurisdiction 543.48 304.20

27.6 Earnings in foreign currency (on accrual basis)

(a) Export (Services) 28,431.42 23,468.84(b) Dividend received from subsidiary 2,693.90 -

6 CMC - 82-109.p65 2012/06/01, 08:18 AM101

CMC Limited

102


27.7 Information in regard to Purchases, Sales, Opening and Closing Stock

Computer equipment and peripherals


Nos. (` / lacs) Nos. (` / lacs)

Opening stock 474 974.14 421 662.34Purchases 15,078 14,481.16 8,826 9,905.79Sales 15,279 15,340.96 8,773 10,251.74Closing stock* 273 989.74 474 974.14

* does not include goods in transit ` 29.44 lacs (Previous year ` 11.56 lacs).

The quantitative details relate to quantities of main sub-systems whereas amounts include revenues relating to components aswell, for which amounts cannot be segregated.

27.8 Auditors’ remuneration*

Payment to Auditors includes Auditors’ remuneration as follows:


(` / lacs) (` / lacs)

Audit fee (including limited reviews) 45.00 40.00Tax audit 8.00 8.00Certification work 3.40 -Reimbursement of out-of-pocket expenses 5.83 4.74

Total 62.23 52.74

* Exclusive of service tax

The remuneration disclosed above excludes fees of ` 57.15 lacs (Previous year ` 46.46 lacs) including ` 17.25 lacs (Previous year` 10.00 lacs) for representation before various authorities for professional services rendered by firm of accountants in which thepartners of the firm of statutory auditors are partners.

28 Disclosures under Accounting Standards

28.1 Retirement benefit plans

(a) Defined contribution plan

The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirementbenefit plan for qualifying employees. The Company’s contribution to the Employees Provident Fund and superannuation isdeposited in a trust formed by the Company under the Employees Provident Fund and Miscellaneous Provisions Act, 1952which is recognised by the Income Tax authorities.

The Company recognised ` 1,306.71 lacs (Previous year ` 1,050.02 lacs) for provident fund contributions and ` 8.98 lacs(Previous year ` 9.62 lacs) for superannuation fund in the Statement of profit and loss. The contribution payable to the plan bythe Company is at the rate specified in rules to the scheme.

(b) Defined Benefit plan

i. Gratuity plan

The Company makes annual contribution to the Employee’s Group Gratuity-cum-Life Assurance scheme of the Life InsuranceCorporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum paymentto vested employees at retirement, death while in employment or on termination of employment of an amount equivalentto 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a maximumof ` 10 lacs. Vesting occurs upon completion of 5 years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the ProjectedUnit Credit Method with actuarial valuations being carried out at each balance sheet date.

6 CMC - 82-109.p65 2012/06/01, 08:18 AM102

103

ii. Medical Plan

The Medical plan liability arises on retirement of an employee. The aforesaid liability for employees retired upto 31 March,2010 is calculated on the basis of fixed annual amount per employee (based on the basic salary) for qualifying employees.For employees retiring after 31 March, 2010, the Company has affected a Health Insurance plan for coverage of PostRetirement Medical expenses. The liability on this account has also been actuarially valued.

The most recent actuarial valuation of the present value of the defined obligation was carried out on 31 March, 2012. Thepresent value of the defined obligation and the related current service cost and past service cost, was measured usingProjected Unit Credit Method.

(c) The following tables set out the funded status of the gratuity plan and medical plan and amounts recognised in the Company’sfinancial statements as at 31 March, 2012.




i. Components of employer expense

Current service cost 249.18 8.64 230.87 4.23Interest cost 211.46 30.61 154.34 34.99Expected return on plan assets (46.27) - (10.72) -Curtailment cost / (credit) - - - (81.52)Past service cost - - 413.49 -Actuarial losses / (gains) (3.47) 29.47 (106.29) (0.79)

Total expense recognised in Statement of 410.90 68.72 681.69 (43.09)profit and loss

ii. Actual contribution and benefit paymentsfor year

Actual benefit payments 190.65 38.39 285.14 40.81Actual contributions 207.25 - 476.21 -

iii. Net asset / (liability) recognised in theBalance Sheet

Present value of defined benefit obligation 2,898.52 412.94 2,643.27 382.61Fair value of plan assets 565.73 - 514.12 -Funded status [Surplus / (Deficit)] (2,332.79) (412.94) (2,129.15) (382.61)Net asset / (liability) recognised in the (2,332.79) (412.94) (2,129.15) (382.61)Balance Sheet

iv. Change in defined benefit obligations(DBO) during the year

Present value of DBO at the beginning of the year 2,643.27 382.61 2,057.66 466.51Current service cost 249.18 8.64 230.87 4.23Interest cost 211.46 30.61 154.34 34.99Curtailment cost / (credit) - - - (81.52)Actuarial (gain) / losses (14.74) 29.47 72.05 (0.79)Past service cost - - 413.49 -Benefits paid (190.65) (38.39) (285.14) (40.81)Present value of DBO at the end of the year 2,898.52 412.94 2,643.27 382.61

v. Change in fair value of assets during the year:

Plan assets at the beginning of the year 514.12 - 133.99 -Expected return on plan assets 46.27 - 10.72 -Actual Company contributions 207.26 - 476.21 -Actuarial gain / (loss) (11.27) - 178.34 -Benefits paid (190.65) - (285.14) -Plan assets at the end of the year 565.73 - 514.12 -Actual return on plan assets 35.00 - 189.06 -

6 CMC - 82-109.p65 2012/06/01, 07:49 PM103

CMC Limited

104





vi. Actuarial assumptions:

Discount rate 8.25% 8.25% 8.00% 8.00%Expected return on plan assets 9.00% - 8.00% -Salary escalation 4.00% - 4.00% -Attrition 20.00% 20.00% 20.00% 20.00%Mortality tables Standard Standard Standard Standard

Table LIC Table LIC Table LIC Table LIC(1994-96) (1994-96) (1994-96) (1994-96)

vii. Estimate of amount of contribution in the 707.74 - 480.00 -immediate next year

viii. Experience adjustments 2012 2011 2010 2009

(a) Gratuity

On Plan liability (14.74) 72.05 181.05 130.99On Plan asset (11.27) 178.34 10.31 21.25

(b) Post Retirement Medical Benefits

On Plan liability 29.47 (0.79) 26.10 56.06


Particulars 2012 2011 2010 2009 2008

Gratuity

Present value of DBO 2,898.52 2,643.27 2,057.66 1,895.93 1,658.36Fair value of plan assets 565.73 514.12 133.99 128.83 141.84Funded status - (Deficit) (2,332.79) (2,129.15) (1,923.67) (1,767.10) (1,516.52)Experience gain / (loss) adjustments on plan liabilities (129.20) 72.05 181.05 130.99Experience gain / (loss) adjustments on plan assets (11.27) 178.34 10.31 21.25

Post Retirement Medical Benefits

Present value of DBO 412.94 382.61 466.51 445.54 512.54Fair value of plan asset* - - - - -Funded status - (Deficit) (412.94) (382.61) (466.51) (445.54) (512.54)Experience gain / (loss) adjustments on plan liabilities 29.47 (0.79) 26.10 56.06Experience gain / (loss) adjustments on plan assets - - - - -

Experience adjustments have been disclosed only for the previous three years from the period for which information isavailable.

* Plan is unfunded

Notes:

(a) The planned assets of the Company are managed by the Life Insurance Corporation of India in terms of an insurancepolicy taken to fund obligations of the Company with respect to its gratuity plan. Information on categories of plan assetsis not available with the Company.

(b) The discount rate is based on the prevailing market yields of Government of India securities as at Balance Sheet date forthe estimated term of the obligations.

(c) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and

6 CMC - 82-109.p65 2012/06/01, 08:18 AM104

105

other relevant factors.

28.2 Segment Information

(a) Financial information about the primary business segments is given below:(All amount in ` / lacs)


i. Revenue 30,518.98 39,314.89 17,805.99 5,817.62 2,076.21 95,533.69(24,568.07) (34,993.94) (13,694.00) (5,324.36) (1,227.84) (79,808.21)

ii. Segment result 1,455.87 14,176.72 5,084.85 766.33 1,279.35 22,763.12(1,312.51) (14,563.51) (4,979.08) (1,098.33) (1,156.46) (23,109.89)

iii. Unallocable expenses 8,197.53(6,885.83)

iv. Operating income 14,565.59(16,224.06)

v. Other income 4,439.41(1,179.18)

vi. Profit before tax 19,005.00(17,403.24)

vii. Tax expense 4,671.84(1,830.12)

viii. Net profit for the year 14,333.16(15,573.12)

ix. Segment assets 17,461.88 18,219.19 7,085.88 2,984.83 23,939.76 69,691.54(17,762.56) (13,277.30) (3,926.75) (2,058.78) (15,019.25) (52,044.64)

x. Unallocable assets 38,127.63(42,256.35)

xi Total assets 107,819.17(94,300.99)

xii Segment liabilities 10,202.29 6,680.60 3,299.86 2,194.08 3,308.29 25,685.12(12,140.02) (5,358.60) (2,415.52) (1,855.46) (2,984.93) (24,754.53)

xiii Unallocable liabilities 12,492.08(9,835.69)

xiv Total liabilities 38,177.19(34,590.22)

xv. Other information

Capital expenditure (allocable) 34.74 413.68 71.99 209.78 7,907.83 8,638.02(29.33) (283.67) (45.85) (196.06) (8,540.08) (9,094.99)

Capital expenditure (unallocable) 2,258.36(829.79)

Depreciation expense 66.38 259.60 85.13 129.70 730.27 1,271.08(allocable) (106.90) (222.11) (74.80) (79.78) (65.80) (549.39)

Depreciation expense 817.22(unallocable) (459.56)

Other significant non-cash 383.99 256.92 61.79 72.12 - 774.82expense (allocable) (291.61) (397.54) (33.16) (186.92) (-) (909.23)

Notes:

i. Unallocated assets include investments, advance tax and tax deducted at source.

ii. Unallocated liabilities include, deferred tax / current tax liabilities, proposed dividend and tax on proposed dividend.

iii Amounts in brackets represent previous year’s figures.

6 CMC - 82-109.p65 2012/06/01, 08:18 AM105

CMC Limited

106


(b) Geographical Segment (All amounts in ` / lacs

India United United Others TotalStates of KingdomAmerica

SEGMENT REVENUE

- Revenue from operations 66,699.94 21,953.53 3,043.36 3,836.86 95,533.69(55,927.30) (18,190.80) (2,454.31) (3,235.80) (79,808.21)

- Other income 4,432.75 5.17 0.10 1.39 4,439.41(1,151.46) (6.65) (0.60) (20.47) 1,179.18

TOTAL ASSETS 98,743.93 4,047.30 955.47 4,072.47 107,819.17(88,166.74) (2,573.35) (771.99) (2,788.91) (94,300.99)

TOTAL LIABILITIES 37,307.08 585.13 245.36 39.62 38,177.19(33,861.99) (245.26) (234.08) (248.89) (34,590.22)

Note: Amounts in brackets represent previous year’s figures.

28.3 Related Party Disclosures

(a) List of related parties

i. Ultimate Holding Company

• Tata Sons Limited

ii. Holding Company

• Tata Consultancy Services Limited

iii. Fellow Subsidiaries

• Tata AIG General Insurance Company Limited• Tata Teleservices (Maharashtra) Limited• Tata Consultancy Services, Netherlands BV• Tata Consultancy Services Sverige AB• Tata Teleservices Limited• Tata Business Support Services Limited (formerly E2E Serwiz Solutions Limited)• Diligenta Limited• Infiniti Retail Limited• Tata Consultancy Services, Asia Pacific Pte Limited• E-NXT Financials Limited• TC Travel and Services Limited• Tata Autocomp Systems Limited• Tata Housing Development Company Limited

iv. Subsidiary

• CMC Americas, Inc.

v. Step-down Subsidiary

• CMC eBiz, Inc. (wholly owned subsidiary of CMC Americas, Inc.)

vi. Key Management Personnel

• Mr. R. Ramanan

6 CMC - 82-109.p65 2012/06/01, 08:18 AM106

107

(b) Transactions / balances outstanding with Related Parties.(All amounts in ` / lacs)

Transactions / Outstanding Ultimate Holding Subsidiary Fellow Key TotalBalances Holding Company Company Subsidiary Management

Company Personnel

Purchase of goods / services 30.73 896.59 32.26 230.84 - 1,190.42(note a)

(24.50) (842.27) (4.14) (168.22) (-) (1,039.13)

Purchase of fixed assets - - - 123.45 - 123.45(note b)

(-) (-) (-) (-) (-) (-)

Sale of products 1.71 4,908.30 - 222.46 - 5,132.47(note c)

(-) (5,342.66) (-) (17.20) (-) (5,359.86)

Service income - 18,145.35 21,884.75 474.47 - 40,504.57(note d)

(-) (14,767.28) (18,149.54) (417.70) (-) (33,334.52)

Managerial remuneration - - - - 128.29 128.29(-) (-) (-) (-) (111.36) (111.36)

Brand equity contribution 137.19 - - - - 137.19(115.26) (-) (-) (-) (-) (115.26)

Dividend Income - - 2,693.90 - - 2,693.90(-) (-) (-) (-) (-) (-)

Dividend Paid - 1,548.99 - - - 1,548.99(-) (1,548.99) (-) (-) (-) (1,548.99)

Other Transactions 1.47 753.40 - - - 754.87(-) (394.05) (-) (-) (-) (394.05)

Balance Outstanding at the year end

Trade receivables - 6,079.83 2,696.17 268.89 - 9,044.89(note e)

(-) (5,765.46) (645.61) (116.60) (-) (6,527.67)

Unbilled revenues - 4,824.38 503.08 107.19 - 5,434.65(note f )

(-) (2,612.09) (1,217.54) (24.00) (-) (3,853.63)

Income received in advance - 391.05 - - - 391.05(-) (511.04) (-) (2.58) (-) (513.62)

(note g)

Trade payables / Advances received 137.64 1,874.11 35.56 12.40 - 2,059.71from customers (note h)

(115.29) (1,702.31) (-) (11.82) (-) (1,829.42)

Loans / advances - - - - 10.45 10.45(-) (-) (-) (-) (12.13) (12.13)

Investment in share capital - - 818.01 - - 818.01(-) (-) (818.01) (-) (-) (818.01)

Note: Amounts in brackets represent previous year’s figures.

6 CMC - 82-109.p65 2012/06/01, 07:53 PM107

CMC Limited

108


Notes:

Disclosures in respect of transactions in excess of 10% of the total related party transactions of the same type.

Notes Particulars Year ended / Year ended /Ref. As at As at

31 March, 2012 31 March, 2011

(` in lacs) (` in lacs)(a) Purchase of goods / services

Tata Teleservices Limited 132.61 87.51Tata Teleservices (Maharashtra) Limited 97.08 77.86

(b) Purchase of fixed assets

Tata Teleservices (Maharashtra) Limited 120.97 -

(c) Sale of product

Tata Housing Development Company Limited 85.33 17.11Tata Business Support Services Limited (Formerly E2E Serwiz Solutions Limited) 137.12 -

(d) Service income

Tata Consultancy Services, Netherlands BV - 16.42Tata Consultancy Services, Asia Pacific Pte Limited 164.06 140.12Tata Housing Development Company Limited 69.73 -Diligenta Limited - 115.61Tata Business Support Services Limited (Formerly E2E Serwiz Solutions Limited) 237.60 110.03

(e) Trade recivables

Tata Consultancy Services, Netherlands BV - 19.00Tata Consultancy Services, Asia Pacific Pte Limited 47.85 47.48Tata Business Support Services Limited (Formerly E2E Serwiz Solutions Limited) 171.38 40.50

(f) Unbilled revenue

Tata Teleservices Limited - 3.83Tata Consultancy Services, Asia Pacific Pte Limited 45.96 20.17Tata Housing Development Company Limited 60.92 -

(g) Income received in advance

Tata Consultancy Services, Netherlands BV - 2.58

(h) Trade payable / advances received

Tata Teleservices (Maharashtra) Limited 11.45 10.75

28.4 Lease Commitments

(i) Obligations towards operating leases (As lessee)

Rent expenses of ` 511.75 lacs (Previous year ` 399.92 lacs) in respect of obligation under non-cancellable operating leaseshave been recognised in the Statement of profit and loss. Further a sum of ` 1,324.67 (Previous year ` 1,346.20 lacs) has beencharged to the Statement of profit and loss in respect of cancellable operating leases.The total of future minimum lease payments under non-cancellable operating leases for the following periods:


(` / lacs) (` / lacs)

(a) Not later than one year 532.06 318.76(b) Later than one year but not later than five years 738.97 1,032.05(c) Later than five years 153.34 52.03

6 CMC - 82-109.p65 2012/06/01, 08:18 AM108

109

28.4 Lease Commitments (Contd.)

(ii) Finance Lease (As lessor)

The Company has purchased and given on lease computer equipment, peripherals and system software. The details are asfollows:


(` / lacs) (` / lacs)

(a) Total gross investment 233.97 442.57• Not later than one year 138.41 208.60• Later than one year but not later than five years 95.56 233.97• Later than five years - -

(b) Present value of minimum lease payments receivable 216.19 386.53• Not later than one year 124.33 170.34• Later than one year but not later than five years 91.85 216.19• Later than five years - -

(c) Unearned finance income 17.78 56.04

28.5 Earnings per share

Particulars Units Year ended Year ended31 March, 2012 31 March, 2011

Net profit attributable to shareholders ` / lacs 14,333.16 15,573.12Weighted average number of equity shares in issue Nos. / lacs 303.00 303.00Basic earning per share ` 47.30 51.40Face value per share ` 10.00 10.00

The Company does not have any outstanding dilutive potential equity shares.

28.6 Research and development expenses

Expenditure includes “Research and Development” expenditure aggregating to ` 986.15 lacs (Previous year ` 890.65 lacs). Amountsaggregating to ` 60.90 lacs (Previous year ` 15.36 lacs) have been capitalised.

28.7 As per the Transfer Pricing Rules of the Income tax Act, 1961 every Company is required to get a transfer pricing study conducted todetermine whether the international transactions with associated enterprises were undertaken at an arm’s length basis for eachfinancial year end. Transfer pricing study for the transactions during the year ended 31 March, 2012 is currently in progress andhence adjustments if any which may arise there from will be effective in the financial statements for the year ended 31 March, 2013.However in the opinion of the Company’s management, adjustments, if any, are not expected to be material.

28.8 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantlyimpacted the disclosure and presentation made in the financial statements. Previous year’s figures have been regrouped / reclassifiedwherever necessary to correspond with the current year’s classification / disclosure.

For and on behalf of the Board of Directors

S. Mahalingam R. Ramanan Dr K R SMurthy Director Managing Director & CEO

Mumbai J. K. Gupta Vivek Agarwal18 April, 2012 Chief Financial Officer Company Secretary

6 CMC - 82-109.p65 2012/06/01, 08:18 AM109

Notes

6 CMC - 82-109.p65 2012/06/01, 08:18 AM110

I/We..........................................................................................................................................................................................................................................................................

of................................................................................................................................................................................................................................................................................(Write full address)

......................................................................................................................................................being a Member(s) of CMC LIMITED, hereby appoint

................................................................................................................ of ........................................................................................................................(Write full address)

...................................................................................................................................................................................................................................................................................

or failing him/her...............................................................................of...............................................................................................................................................................

.................................................................................... as my/our proxy to attend and vote for me/us and on my/our behalf at the 36th Annual GeneralMeeting to be held on Wednesday, 27 June, 2012 at 3 p.m. and at any adjournment thereof.

AS WITNESS under my/our hands this day of , 2012

Folio No. .......................................................... DPID No. .................................................................. Client ID No. .............................................................

Signature ......................................................... .............................

NOTES :1. The Proxy need NOT be a Member.2. The Proxy Form must be deposited at the Registered Office not less than 48 hours before the scheduled time for holding the meeting.

DP ID

Client ID

CMC Limited

Registered Office: CMC Centre, Old Mumbai Highway, Gachibowli, Hyderabad - 500 032 (A.P.)

PROXY FORM

�

CMC Limited

Registered Office: CMC Centre, Old Mumbai Highway, Gachibowli, Hyderabad - 500 032 (A.P.)

ATTENDANCE SLIP

Folio No.

Name

I certify that I am a registered Shareholder/Proxy for registered Shareholder of the Company.

I hereby record my presence at the 36th Annual General Meeting of the Company at CMC’s Auditorium, CMC Centre, Old Mumbai Highway,Gachibowli, Hyderabad – 500 032, A.P., on Wednesday, 27 June, 2012 at 3 p.m.

SignatureNote:Please sign this attendance slip and hand it over at the attendance counter at the ENTRANCE OF THE MEETING HALL.

Affix RevenueStamp

�

Proxy+Form.p65 2012/06/01, 08:18 AM111

Documents

1 CMC - 1-11 · CMC Limited Thirty sixth annual report 2011 - 2012 Annual General Meeting will be held on Wednesday, June 27, 2012 at CMC's Auditorium at its Registered Office, CMC