Methodology: What the rankings are based on

The top 1000 listed companies are ranked on the basis of their consolidated net sales in 2004-2005. Listed manufacturing and service companies are included in the ranking, but financial service firms and banks have been excluded from the study. The listed subsidiaries of parent companies are omitted from the ranking to avoid double counting. Our consolidated sales, therefore, include 100 per cent of the sales of all subsidiaries of the parent company, including listed ones.
Last year, we introduced consolidated ranking to show the real worth of companies along with their subsidiaries. Consolidated financial statements are presented by a parent (also known as holding enterprise) to provide financial information about the economic activities of the group. Consolidated accounts are now mandatory under accounting standard (AS) 21 issued by the Institute of Chartered Accountants of India.
These statements are intended to present financial information about a parent and its subsidiary(ies) as a single economic entity to show the economic resources controlled by the group, the obligations of the group and the results the group achieves with its resources. The consolidated balance sheet, profit and loss account and cash flow statement give a true and fair view of the company and its subsidiary.
The financial statements of the parent company and its subsidary companies have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after eliminating the intra-group balance, intra-group transactions and unrealised profits in accordance with AS-21 on consolidated financial statements.
However, the industry-wise performance rankings of BS 1000 companies are based on standalone companies. This has been done to avoid misleading results, as consolidated accounts also include the accounts of subsidiaries which may have a different line of business than the parent company.
The companies included are those that closed their year between April 1, 2004, and March 31, 2005, and between April 30, 2005, and September 30, 2005. We left out those whose balance sheets for 2004-2005 were not available.
The BS 1000 companies are ranked on the basis of their consolidated net sales, operating profit, net profit, assets and net worth for 2004-2005. The companies are also evaluated on a composite scale, provided in the main tables.
This year, we have provided additional information on the dividend per share paid by the BS 1000 companies during the last three years. Dividend per share data have been adjusted, in case the companies have changed their paid up value per share on account of a stock split.
The super rankings have been arrived at by weighting the rate of growth of the six variables mentioned above and the growth in market capitalisation.
The market capitalisation ranking has been of standalone companies. The super ranking excludes non-traded companies, companies with negative earnings and those with a negative net worth.
Annual reports for the BS 1000 giants were sourced from the respective companies and also from old paper mart. Annual reports were also sourced from SANSCO SERVICES: www.business.vsnl.com/annualreportslibrary/sansco.html. •
Glossary
Net sales: Gross sales, net of excise duty and sales tax.
Consolidated net sales: Net sales of the standalone company and its subsidiaries.
Total income: Gross sales plus other income.
Operating profit: Profit before interest, depreciation and taxation.
Cash profit: Profit after tax plus depreciation.
Net profit: Profit after tax, excluding prior period adjustment and extraordinary items.
Consolidated net profit: Profit after tax of
holding company and its subsidiaries, inclusive of minority interest.
Dividend per share: Dividends paid on the paid up value of the share.
Assets: Capital employed plus liabilities and provision, excluding accumulated losses and advance tax provisions.
Net worth: Equity and preference capital plus reserves and surplus excluding accumulated losses.
Exports: Total foreign exchange earnings (FOB plus other export income).
Imports: CIF value and other foreign expenditure.
Market capitalisation: The market price as on December 16, 2005 multiplied by the number of shares outstanding.

Business Standard • January 2006