A fundamental dichotomy in accounting practices is between human and non-human capital. As a standard practice, non-human capital is considered as assets and reported in the financial statements, whereas human capital is mostly ignored by accountants. The definition of wealth as a source of income inevitably leads to the recognition of human capital as one of the several forms of wealth such as money, securities and physical capital.
We have used the Lev & Schwartz model to compute the value of human resources. The evaluation is based on the present value of future earnings of employees and on the following assumptions :
(a) Employee compensation includes all direct and indirect benefits earned both in India and overseas
(b) The incremental earnings based on group / age have been considered
(c) The future earnings have been discounted at the cost of capital of 11.21% (previous year 10.60%).
in 
crore, unless stated otherwise
2011 |
2010 |
|
Employees (no.) |
||
Software professionals |
1,23,811 |
1,06,864 |
Support |
7,009 |
6,932 |
Total |
1,30,820 |
1,13,796 |
Value of human resources |
||
Software professionals |
1,22,539 |
1,06,173 |
Support |
12,566 |
7,114 |
Total |
1,35,105 |
1,13,287 |
Total income(1) |
27,501 |
22,742 |
Total employee cost(1) |
14,856 |
12,093 |
Value-added |
25,031 |
20,935 |
Net profit(1) |
6,823 |
6,219 |
Ratios |
||
Value of human resources per employee |
1.03 |
1.00 |
Total income / human resources value (ratio) |
0.20 |
0.20 |
Employee cost / human resources value (%) |
11.0 |
10.7 |
Value-added / human resources value (ratio) |
0.19 |
0.18 |
Return on human resources value (%) |
5.1 |
5.5 |
(1) As per IFRS (audited) financial statements