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(f) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: - i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as of March 31, 2015; - ii) The Company has made provision in its financial statements, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts; - iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH Partner (Membership No. 70928) Mumbai, April 16, 2015 # Unconsolidated Financial Statements 175 # Annual Report 2014-15 # ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) # 1. In respect of the fixed assets of the Company: - (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. - (b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification. # 2. In respect of the inventories of the Company: - (a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. - (b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were 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 its inventories and no material discrepancies were noticed on physical verification. # 3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Act. # 4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system. # 5. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits during the year and does not have any unclaimed deposits. Therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company. # 6. The provisions of clause 3 (vi) of the Order are not applicable to the Company as the Company is not covered by the Companies (Cost Records and Audit) Rules, 2014. # 7. According to the information and explanations given to us, in respect of statutory dues: - (a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax and Value Added Tax, Wealth Tax, Service Tax, duty of Customs, duty of Excise, Cess and other material statutory dues applicable to it with the appropriate authorities. - (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income Tax, Sales Tax and Value Added Tax, Wealth Tax, Service Tax, duty of Customs, duty of Excise, Cess and other material statutory dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable. |
- (c) Details of dues of Income Tax, Sales Tax and Value Added Tax and Service Tax which have not been deposited as at March 31, 2015 on account of dispute are given below: |Particulars|Period to which the amount relates|Forum where the dispute is pending|Amount (` crores)| |---|---|---|---| |Income Tax|2005-06, 2008-09|Income Tax Appellate Tribunal|157.16| | |2007-08, 2008-09, 2009-10, 2012-13|Commissioner of Income Tax (Appeals)|505.15| |Sales Tax and Value Added Tax|2001-02, 2003-04, 2004-05, 2005-06|High court|22.82| | |2007-08, 2009-10, 2012-13| | | | |2002-03, 2003-04, 2004-05, 2005-06|Tribunal|7.06| | |2006-07, 2007-08| | | | |2008-09, 2009-10, 2010-11|Deputy Commissioner|7.56| | |2005-06, 2009-10, 2010-11, 2011-12, 2013-14|Joint Commissioner|4.42| | |2001-02, 2005-06, 2011-12|Assistant Commissioner|0.49| | |2007-08, 2008-09, 2009-10|Additional Commissioner|0.02| |Service Tax|2004-05, 2005-06, 2006-07, 2007-08|Appellate Tribunal|12.12| | |2008-09, 2009-10|Commissioner of Service Tax (Appeals)|0.15| There were no dues of Wealth Tax, duty of Customs, duty of Excise and Cess which have not been deposited as at March 31, 2015 on account of dispute. # Unconsolidated Financial Statements (d) The Company has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and Rules made thereunder within time. # 8. The Company does not have accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. # 9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a bank during the year and did not have any amount outstanding to financial institutions or debenture holders. # 10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantee given by the Company for loan taken by a subsidiary from a bank is not prima facie prejudicial to the interest of the Company. # 11. According to the information and explanations given to us, the Company did not avail any term loan during the year. # 12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH Partner (Membership No. 70928) Mumbai, April 16, 2015 # Unconsolidated Financial Statements 177 # Annual Report 2014-15 # Balance Sheet as at March 31, 2015 | | |Note|As at March 31, 2015|As at March 31, 2014| |---|---|---|---| |I. EQUITY AND LIABILITIES|I. EQUITY AND LIABILITIES| | | | |Shareholders' funds|Shareholders' funds| | | | |(a)|Share capital|3|195.87|195.87| |(b)|Reserves and surplus|4|45220.57|43856.01| | | | |45416.44|44051.88| |Non-current liabilities|Non-current liabilities| | | | |(a)|Long-term borrowings|5|64.71|89.69| |(b)|Deferred tax liabilities (net)|6(a)|271.46|226.87| |(c)|Other long-term liabilities|7|722.15|690.44| |(d)|Long-term provisions|8|126.91|279.61| | | | |1185.23|1286.61| |Current liabilities|Current liabilities| | | | |(a)|Short-term borrowings|9|185.56|-| |(b)|Trade payables| |6767.25|3977.55| |(c)|Other current liabilities|10|2491.47|2460.32| |(d)|Short-term provisions|11|7019.35|5827.83| | | | |16463.63|12265.70| |TOTAL|TOTAL| |63065.30|57604.19| |II. ASSETS|II. ASSETS| | | | |Non-current assets|Non-current assets| | | | |(a)|Fixed assets| | | | |(i)|Tangible assets|12|7964.88|5887.09| |(ii)|Intangible assets| |31.41|42.10| |(iii)|Capital work-in-progress| |2706.94|3047.53| | | | |10703.23|8976.72| |(b)|Non-current investments|13|2651.23|5098.55| |(c)|Deferred tax assets (net)|6(b)|303.47|273.58| |(d)|Long-term loans and advances|14|8452.55|6875.54| |(e)|Other non-current assets|15|524.68|1544.99| | | | |22635.16|22769.38| |Current assets|Current assets| | | | |(a)|Current investments|16|747.47|733.87| |(b)|Inventories|17|12.34|8.57| |(c)|Unbilled revenue|18|2439.36|2626.08| |(d)|Trade receivables|19|17036.76|14471.89| |(e)|Cash and bank balances|20|16502.50|12566.26| |(f)|Short-term loans and advances|21|3352.18|3688.12| |(g)|Other current assets|22|339.53|740.02| | | | |40430.14|34834.81| |TOTAL|TOTAL| |63065.30|57604.19| |III. NOTES FORMING PART OF THE FINANCIAL STATEMENTS|III. NOTES FORMING PART OF THE FINANCIAL STATEMENTS|1-52| | | As per our report attached For and on behalf of the Board For Deloitte Haskins & Sells LLP Cyrus Mistry Chairman N. Chandrasekaran CEO and Managing Director Prof. Clayton M. Christensen Director Aman Mehta Director Ishaat Hussain Director V. Thyagarajan Director P. R. Ramesh Partner Dr. Ron Sommer Director Dr. Vijay Kelkar Director Phiroz Vandrevala Director O. P. Bhatt Director Aarthi Subramanian Executive Director Rajesh Gopinathan Chief Financial Officer Suprakash Mukhopadhyay Company Secretary Mumbai, April 16, 2015 Mumbai, April 16, 2015 178 Unconsolidated Financial Statements # Statement of Profit and Loss for the year ended March 31, 2015 |(` crores)|Note|2015|2014| |---|---|---|---| |I. Revenue from operations|23|73578.06|64672.93| |(Net of excise duty of ` 4.09 crores (Previous year: ` 3.15 crores))|(Net of excise duty of ` 4.09 crores (Previous year: ` 3.15 crores))|(Net of excise duty of ` 4.09 crores (Previous year: ` 3.15 crores))|(Net of excise duty of ` 4.09 crores (Previous year: ` 3.15 crores))| |II. Other income (net)|24|4466.73|3114.71| |III. TOTAL REVENUE| |78044.79|67787.64| |IV. |
Expenses:| | | | |(a) Employee benefit expense|25|27368.32|21466.56| |(b) Operation and other expenses|26|25181.54|21672.65| |(c) Finance costs|27|79.57|23.41| |(d) Depreciation and amortisation expense|12|1393.77|1080.55| |TOTAL EXPENSES| |54023.20|44243.17| |V. PROFIT BEFORE EXCEPTIONAL ITEM AND TAX (III-IV)| |24021.59|23544.47| |VI. Exceptional item|48|528.38|-| |VII. PROFIT BEFORE TAX| |24549.97|23544.47| |VIII. Tax expense:| | | | |(a) Current tax|28|5269.48|5130.03| |(b) Deferred tax| |14.70|(22.18)| |(c) MAT credit entitlement|28|8.83|(38.30)| | | |5293.01|5069.55| |IX. PROFIT FOR THE YEAR| |19256.96|18474.92| |X. Earnings per equity share: - Basic and diluted (`)|35|98.31|94.15| |Weighted average number of equity shares (face value of ` 1 each)| |195,87,27,979|195,87,27,979| |XI. NOTES FORMING PART OF THE FINANCIAL STATEMENTS| |1-52| | As per our report attached For and on behalf of the Board For Deloitte Haskins & Sells LLP Cyrus Mistry N. Chandrasekaran Prof. Clayton M. Christensen Chartered Accountants Chairman CEO and Managing Director Director Aman Mehta Ishaat Hussain V. Thyagarajan Director Director Director P. R. Ramesh Dr. Ron Sommer Dr. Vijay Kelkar Phiroz Vandrevala Partner Director Director Director File: AR_TCS_2014_2015.md O. P. Bhatt Aarthi Subramanian Rajesh Gopinathan Director Executive Director Chief Financial Officer Suprakash Mukhopadhyay Company Secretary Mumbai, April 16, 2015 Mumbai, April 16, 2015 Unconsolidated Financial Statements 179 # Annual Report 2014-15 # Cash Flow Statement for the year ended March 31, 2015 | |Note|2015|2014| |---|---|---|---| |I CASH FLOWS FROM OPERATING ACTIVITIES| | | | |Profit before tax| |24549.97|23544.47| |Adjustments for:| | | | |Depreciation and amortisation expense| |865.39|1080.55| |Bad Debts written off (net)| |5.69|2.37| |Provision for doubtful receivables (net)| |124.56|68.26| |Provision for doubtful advances (net)| |(13.10)|8.78| |Advances written-off / (recovered) (net)| |19.50|(0.12)| |Provision for diminution in value of long-term investments| |2.50|-| |Interest expense| |79.57|23.41| |Profit on sale of fixed assets (net)| |(2.94)|(2.01)| |Unrealised exchange loss / (gain)| |91.64|(173.12)| |Exchange difference on translation of foreign currency cash and cash equivalents| |27.26|(43.66)| |Dividend income (including exchange gain)| |(1335.54)|(1570.70)| |Interest income| |(1554.93)|(1280.07)| |Profit on redemption of mutual funds and sale of other current investments (net)| |(225.99)|(162.77)| |Operating profit before working capital changes| |22633.58|21495.39| |Inventories| |(3.77)|(2.23)| |Unbilled revenue| |187.39|(320.84)| |Trade receivables| |(2694.09)|(2976.90)| |Loans and advances and other assets| |(596.97)|(66.41)| |Trade payables, other liabilities and provisions| |3114.32|908.34| |Cash generated from operations| |22640.46|19037.35| |Taxes paid| |(6320.57)|(6095.42)| |Net cash provided by operating activities| |16319.89|12941.93| |II CASH FLOWS FROM INVESTING ACTIVITIES| | | | |Purchase of fixed assets| |(2568.72)|(2702.41)| |Proceeds from sale of fixed assets| |4.23|7.97| |Purchase of trade investments| |(60.83)|(25.00)| |Purchase of mutual funds and other investments| |(62938.73)|(75191.82)| |Proceeds from sale / redemption of trade investments| |253.36|54.66| |Proceeds from redemption of mutual funds and sale of other investments| |65389.79|73705.98| |Loans repaid by subsidiaries| |37.32|8.30| |Inter-corporate deposits placed| |(1777.00)|(2588.00)| |Inter-corporate deposits matured| |1880.00|3454.77| |Earmarked deposits placed with banks| |(49.00)|-| |Earmarked deposits with banks matured| |25.27|-| |Fixed deposit placed with banks having original maturity over three months| |(15000.75)|(11744.00)| |Fixed deposit with banks matured having original maturity over three months| |12126.90|4960.33| |Dividend received from subsidiaries (including exchange gain)| |1354.31|1551.10| |Dividend received from other investments| |0.48|0.35| |Interest received| |1934.38|1318.45| |Net cash used in investing activities| |611.01|(7189.32)| |III CASH FLOWS FROM FINANCING ACTIVITIES| | | | |Redemption of preference shares| |-|(100.00)| |Repayment of long-term borrowings| |(0.47)|(1.24)| |Short-term borrowings (net)| |185.56|(80.02)| |Dividend paid (including dividend tax)| |(17020.46)|(5480.07)| |Interest paid| |(78.83)|(22.99)| |Net cash used in financing activities| |(16914.20)|(5684.32)| |Net increase in cash and cash equivalents| |16.70|68.29| |Cash and cash equivalents at the beginning of the year| |438.37|323.85| |Add: Transferred consequent to amalgamation of companies| |1.97|2.57| |Exchange difference on translation of foreign currency cash and cash equivalents| |(27.26)|43.66| |Cash and cash equivalents at the end of the year|20|429.78|438.37| |Earmarked balances with banks| |69.97|14.99| |Short-term bank deposits| |16002.75|12112.90| |Cash and bank balances at the end of the year|20|16502.50|12566.26| |IV NOTES FORMING PART OF THE FINANCIAL STATEMENTS|1-52| | | |Cash flows have been adjusted for the balances transferred from the amalgamated companies.|Cash flows have been adjusted for the balances transferred from the amalgamated companies.|Cash flows have been adjusted for the balances transferred from the amalgamated companies.|Cash flows have been adjusted for the balances transferred from the amalgamated companies.| # As per our report attached # For and on behalf of the Board For Deloitte Haskins & Sells LLP Cyrus Mistry N. Chandrasekaran Prof. Clayton M. Christensen Chartered Accountants Aman Mehta Director Ishaat Hussain Director P. R. Ramesh Dr. Ron Sommer Dr. Vijay Kelkar Phiroz Vandrevala Partner O. P. |
Bhatt Aarthi Subramanian Rajesh Gopinathan Director Executive Director Suprakash Mukhopadhyay Company Secretary Mumbai, April 16, 2015 Mumbai, April 16, 2015 # 180 Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 1) CORPORATE INFORMATION Tata Consultancy Services Limited (referred to as "TCS Limited" or "the Company") provides consulting-led integrated portfolio of information technology (IT) and IT-enabled services delivered through a network of multiple locations around the globe. The Company's full services portfolio consists of IT and Assurance Services, Business Intelligence and Performance Management, Business Process Services, Cloud Services, Connected Marketing Solutions, Consulting, Eco-sustainability Services, Engineering and Industrial Services, Enterprise Security and Risk Management, Enterprise Solutions, iON-Small and Medium Businesses, IT Infrastructure Services, Mobility Products and Services and Platform Solutions. As at March 31, 2015, Tata Sons Limited owned 73.69% of the Company's equity share capital and has the ability to control its operating and financial policies. The Company's registered office is in Mumbai and it has 60 subsidiaries across the globe. # 2) SIGNIFICANT ACCOUNTING POLICIES # a) Basis of preparation These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India ('Indian GAAP') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on accrual basis, except for certain financial instruments which are measured at fair value. Comparative figures do not include the figures of erstwhile WTI Advanced Technology Limited which is amalgamated with the Company effective April 1, 2014. Consequently, the comparative figures are not comparable with the figures for the year ended March 31, 2015. # b) Use of estimates The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred, the useful lives of depreciable fixed assets and provision for impairment. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognised in the period in which the results are known / materialise. # c) Fixed assets Fixed assets are stated at cost, less accumulated depreciation / amortisation. Costs include all expenses incurred to bring the asset to its present location and condition. Fixed assets exclude computers and other assets individually costing ` 50,000 or less which are not capitalised except when they are part of a larger capital investment programme. # d) Depreciation / amortisation In respect of fixed assets (other than freehold land and capital work-in-progress) acquired during the year, depreciation / amortisation is charged on a straight line basis so as to write-off the cost of the assets over the useful lives and for the assets acquired prior to April 1, 2014, the carrying amount as on April 1, 2014 is depreciated over the remaining useful life based on an evaluation. |Type of asset|Period| |---|---| |Leasehold land and buildings|Lease period| |Freehold buildings|20 years| |Factory buildings|20 years| |Leasehold improvements|Lease period| |Plant and machinery|10 years| |Computer equipment|4 years| |Vehicles|4 years| |Office equipment|5 years| |Electrical installations|10 years| |Furniture and fixtures|5 years| |Intellectual property / distribution rights|5 years| |Rights under licensing agreement|License period| Fixed assets purchased for specific projects are depreciated over the period of the project or the useful life stated above, whichever is shorter. Unconsolidated Financial Statements 181 # Annual Report 2014-15 # Notes forming part of the Financial Statements # e) Leases Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. |
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis. # f) Impairment At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognised as income in the statement of profit and loss. # g) Investments Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising investments in mutual funds are stated at the lower of cost and fair value. # h) Employee benefits # (i) Post-employment benefit plans Contributions to defined contribution retirement benefit schemes are recognised as expense when employees have rendered services entitling them to such benefits. For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, or amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme. # (ii) Other employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service. These benefits include compensated absences such as paid annual leave, overseas social security contributions and performance incentives. Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as an actuarially determined liability at the present value of the defined benefit obligation at the balance sheet date. # i) Revenue recognition Revenue from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred. Revenue from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable. Revenue from the sale of equipment are recognised upon delivery, which is when title passes to the customer. Revenue from sale of software licences are recognised upon delivery. Revenue from maintenance contracts are recognised pro-rata over the period of the contract. In respect of Business Process Services, revenue on time and material and unit priced contracts is recognised as the related services are rendered, whereas revenue from fixed price contracts is recognised using the proportionate completion method with contract cost determining the degree of completion. Revenue is reported net of discounts. Dividend is recorded when the right to receive payment is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable. # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # j) Taxation Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled. |
Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify. Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to and intends to settle the asset and liability on a net basis. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws. # k) Foreign currency transactions Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprise's net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve. Premium or discount on foreign exchange forward, options and futures contracts are amortised and recognised in the statement of profit and loss over the period of the contract. Foreign exchange forward, options and future contracts outstanding at the balance sheet date, other than designated cash flow hedges, are stated at fair values and any gains or losses are recognised in the statement of profit and loss. # l) Derivative instruments and hedge accounting The Company uses foreign exchange forward, options and future contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges. The use of hedging instruments is governed by the Company's policy approved by the Board of Directors, which provide written principles on the use of such financial derivatives consistent with the Company's risk management strategy. Hedging instruments are initially measured at fair value, and are remeasured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised directly in shareholders' funds and the ineffective portion is recognised immediately in the statement of profit and loss. The Company separates the intrinsic value and time value of an option and designates as hedging instruments only the fair value change in the intrinsic value of the option. The change in fair values of the time value of option, is accumulated in hedging reserve, a component of shareholders' funds and is transferred to the statement of profit and loss when the forecast transaction occurs. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the statement of profit and loss as they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Cumulative gain or loss on the hedging instrument recognised in shareholders' funds is retained there and is transferred to the statement of profit and loss when the forecasted transaction occurs. |
If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in shareholders' funds is transferred to the statement of profit and loss. Unconsolidated Financial Statements 183 # Annual Report 2014-15 # Notes forming part of the Financial Statements # m) Inventories Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at lower of cost and net realisable value. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads. # n) Provisions, Contingent liabilities and Contingent assets A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements. # o) Cash and cash equivalents The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. # 3) SHARE CAPITAL The Authorised, Issued, Subscribed and Fully paid-up share capital comprises of equity shares and redeemable preference shares having a par value of ` 1 each as follows: | |(` crores)|As at March 31, 2015|As at March 31, 2014| |---|---|---|---| |Authorised| | | | |(i) 420,05,00,000 equity shares of ` 1 each| |420.05|420.05| |(ii) 105,02,50,000 redeemable preference shares of ` 1 each| |105.03|105.03| | |Total|525.08|525.08| |Issued, Subscribed and Fully paid up| | | | |195,87,27,979 equity shares of ` 1 each| |195.87|195.87| | |Total|195.87|195.87| The Authorised Share Capital was increased to 420,05,00,000 equity shares of ` 1 each and 105,02,50,000 redeemable preference shares of ` 1 each pursuant to the amalgamation of two wholly-owned subsidiaries, Retail FullServe Limited and Computational Research Laboratories Limited vide Order dated March 22, 2013 and TCS e-Serve Limited vide Order dated September 6, 2013 of the Hon'ble High Court of Judicature at Bombay. # (a) Reconciliation of number of shares | | |As at March 31, 2015| |As at March 31, 2014| | |---|---|---|---|---|---| | |Number of shares|Amount (` crores)|Number of shares|Amount (` crores)| | |Equity shares|Opening balance|195,87,27,979|195.87|195,72,20,996|195.72| | |Issued during the year|-|-|15,06,983|0.15| | |Closing balance|195,87,27,979|195.87|195,87,27,979|195.87| |Preference shares|Opening balance|-|-|100,00,00,000|100.00| | |Redeemed during the year|-|-|(100,00,00,000)|(100.00)| | |Closing balance|-|-|-|-| # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # (b) Rights, preferences and restrictions attached to shares # Equity shares The Company has one class of equity shares having a par value of ` 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. # Preference shares Preference shares carried a fixed cumulative dividend of 1% per annum and a variable non-cumulative dividend of 1% of the difference between the rate of dividend declared during the year on the equity shares of the Company and the average rate of dividend declared on the equity shares of the Company for three years preceding the year of issue of the redeemable preference shares. |
# (c) Shares held by Holding company, its Subsidiaries and Associates | |As at March 31, 2015|As at March 31, 2014| | |---|---|---|---| |Equity shares| | | | |Holding company|144,34,51,698 equity shares (March 31, 2014 : 144,34,51,698 equity shares) are held by Tata Sons Limited|144.35|144.35| |Subsidiaries and Associates of Holding company|10,29,700 equity shares (March 31, 2014 : 10,29,700 equity shares) are held by Tata Industries Limited|0.10|0.10| | |5,90,452 equity shares (March 31, 2014 : 5,90,452 equity shares) are held by Tata Investment Corporation Limited|0.06|0.06| | |200 equity shares (March 31, 2014 : 200 equity shares) are held by Tata Capital Limited *|-|-| | |83,232 equity shares (March 31, 2014 : 83,232 equity shares) are held by Tata International Limited|0.01|0.01| | |24,400 equity shares (March 31, 2014 : 24,400 equity shares) are held by Tata Steel Limited *|-|-| | |452 equity shares (March 31, 2014 : 452 equity shares) are held by The Tata Power Company Limited *|-|-| |Total| |144.52|144.52| * Equity shares having value less than ` 50,000 # (d) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company | |As at March 31, 2015|As at March 31, 2014| | |---|---|---|---| |Equity shares|Tata Sons Limited, the Holding company|144,34,51,698|144,34,51,698| | | |73.69%|73.69%| # (e) Equity shares allotted as fully paid up (during 5 years preceding March 31, 2015) including equity shares issued pursuant to contract without payment being received in cash 15,06,983 equity shares of ` 1 each have been issued to the shareholders of TCS e-Serve Limited in terms of the composite scheme of arrangement ("the Scheme") sanctioned by the High Court of Judicature at Bombay vide their order dated September 6, 2013. Unconsolidated Financial Statements 185 # Annual Report 2014-15 # Notes forming part of the Financial Statements # 4) RESERVES AND SURPLUS Reserves and surplus consist of the following: |(` crores)|As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Capital redemption reserve| | | |(i) Opening balance|100.00|-| |(ii) Transferred on amalgamation (Refer Note 29)|0.40|-| |(iii) Addition during the year (net)|-|100.00| | |100.40|100.00| |(b) Capital reserve| | | |(i) Opening balance|-|-| |(ii) Transferred on amalgamation (Refer Note 29)|0.34|-| | |0.34|-| |(c) Securities premium reserve| | | |(i) Opening balance|1918.87|1918.47| |(ii) Transferred on amalgamation|-|0.40| | |1918.87|1918.87| |(d) Foreign currency translation reserve| | | |(i) Opening balance|225.85|174.61| |(ii) (Deduction) / addition during the year (net)|(7.39)|51.24| | |218.46|225.85| |(e) Hedging reserve account (Refer Note 39)| | | |(i) Opening balance|29.64|55.49| |(ii) Transferred on amalgamation|-|(8.33)| |(iii) Addition / (deduction) during the year (net)|121.11|(17.52)| | |150.75|29.64| |(f) General reserve| | | |(i) Opening balance|5161.20|5515.11| |(ii) Adjustment on amalgamation (Refer Note 29)|(34.20)|(2201.40)| |(iii) Transferred from surplus in statement of profit and loss|1925.69|1847.49| | |7052.69|5161.20| |(g) Surplus in statement of profit and loss| | | |(i) Opening balance|36420.45|24602.85| |(ii) Add: Transferred on amalgamation (Refer Note 29)|71.78|2375.22| |(ii) Add : Profit for the year|19256.96|18474.92| | |55749.19|45452.99| |Less : Appropriations| | | |(a) Interim dividends on equity shares|10772.92|2349.87| |(b) Proposed final dividend on equity shares|4700.95|3917.46| |(c) Dividend on redeemable preference shares|-|28.76| |(d) Tax on dividend|2591.54|788.96| |(e) Write back of tax on dividend of prior year|(20.97)|-| |(f) Capital redemption reserve|-|100.00| |(g) General reserve|1925.69|1847.49| | |35779.06|36420.45| | |45220.57|43856.01| The Board of Directors at their meeting held on April 16, 2015 recommended a final dividend of ` 24 per equity share. 186 Unconsolidated Financial Statements File: AR_TCS_2014_2015.md # Notes forming part of the Financial Statements # 5) LONG-TERM BORROWINGS Long-term borrowings consist of the following: (` crores) | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Secured loans|64.13|88.64| |Long-term maturities of obligations under finance lease (Refer Note 34)| | | |(b) Unsecured loans|0.58|1.05| |Borrowings from entity other than banks| | | | |64.71|89.69| Obligations under finance lease are secured against fixed assets obtained under finance lease arrangements. |
# 6) DEFERRED TAX BALANCES Deferred tax balances consist of the following: (` crores) | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Deferred tax liabilities (net)| | | |(i) Foreign branch profit tax|256.03|217.88| |(ii) Depreciation and amortisation|15.43|8.99| | |271.46|226.87| |(b) Deferred tax assets (net)| | | |(i) Depreciation and amortisation|(146.58)|(57.57)| |(ii) Employee benefits|180.90|152.74| |(iii) Operating lease liabilities|65.69|55.47| |(iv) Provision for doubtful receivables, loans and advances|129.04|93.68| |(v) Others|74.42|29.26| | |303.47|273.58| # 7) OTHER LONG-TERM LIABILITIES Other long-term liabilities consist of the following: (` crores) | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Capital creditors|67.53|92.27| |(b) Operating lease liabilities|310.90|254.18| |(c) Others|343.72|343.99| | |722.15|690.44| Others include advance taxes paid of ` 333.28 crores (March 31, 2014: ` 333.28 crores) by the seller of TCS e-Serve Limited which, on refund by tax authorities, is payable to the seller. # 8) LONG-TERM PROVISIONS Long-term provisions consist of the following: (` crores) | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Provision for employee benefits :| | | |(i) Gratuity|-|137.70| |(ii) Other post retirement benefits|32.43|31.23| |(b) Provision for foreseeable loss on a long-term contract|94.48|110.68| | |126.91|279.61| Unconsolidated Financial Statements # Annual Report 2014-15 # Notes forming part of the Financial Statements # 9) SHORT-TERM BORROWINGS Short-term borrowings consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |Unsecured Loans|185.56|-| |Overdraft from bank|185.56|-| # 10) OTHER CURRENT LIABILITIES Other current liabilities consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Current maturities of long-term debt|0.47|0.47| |(b) Current maturities of obligations under finance lease (Refer Note 34)|22.11|25.32| |(c) Interest accrued but not due on borrowings|0.02|0.03| |(d) Income received in advance|854.67|753.74| |(e) Unclaimed dividends|19.41|13.49| |(f) Advance received from customers|26.18|21.96| |(g) Operating lease liabilities|44.86|26.26| |(h) Fair value of foreign exchange forward and currency option contracts secured against trade receivables|19.75|22.95| |(i) Statutory liabilities|568.83|585.98| |(j) Capital creditors|299.05|418.74| |(k) Liabilities for cost related to customer contracts|615.99|566.37| |(l) Other payables|20.13|25.01| | |Total: 2491.47|Total: 2491.47| Obligations under finance lease are secured against fixed assets obtained under finance lease arrangements. # 11) SHORT-TERM PROVISIONS Short-term provisions consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Provision for employee benefits|951.52|761.99| |(b) Proposed final dividend on equity shares|4700.95|3917.46| |(c) Proposed dividend on redeemable preference shares|-|28.76| |(d) Tax on dividend|939.91|670.66| |(e) Current income taxes (net)|323.93|411.35| |(f) Provision for foreseeable loss on a long-term contract|103.04|37.61| | |Total: 7019.35|Total: 7019.35| Provision for employee benefits include provision for compensated absences and other short-term employee benefits. # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 12) FIXED ASSETS Fixed assets consist of the following: # (i) Tangible assets |Description|Freehold land|Leasehold land|Freehold buildings|Leasehold buildings|Leasehold improvements|Plant and machinery|Computer equipment|Vehicles|Office equipment|Electrical fixtures|Furniture and fittings|Total| | |---|---|---|---|---|---|---|---|---|---|---|---|---|---| |Gross Block as at April 1, 2014|326.21|209.48|3137.73|2.77|9.81|976.73|10.29|3464.15|25.01|1318.34|942.76|754.73|11178.01| | |325.57|193.97|2622.72|2.77|9.81|769.50|10.67|2818.87|22.12|1032.00|759.37|540.15|9107.52| |Additions|0.30|1.01|1242.32|-|-|207.97|116.40|709.86|4.72|207.95|241.02|200.90|2932.45| | |0.64|15.51|515.01|-|-|165.80|-|544.12|2.85|220.03|151.36|179.45|1794.77| |Assets acquired on amalgamation|-|-|-|-|-|-|1.78|0.08|1.74|0.09|0.22|3.91| | | |-|-|-|-|-|63.92|-|222.07|2.26|79.86|46.09|40.31|454.51| |Deletions / Adjustments|-|-|(0.34)|-|-|(0.59)|(0.01)|(41.89)|(3.33)|(1.70)|(0.87)|(2.01)|(50.74)| | |-|-|-|(22.49)|(0.38)|(120.91)|(2.22)|(13.55)|(14.06)|(5.18)|(178.79)| | | |Gross Block as at March 31, 2015|326.51|210.49|4379.71|2.77|9.81|1184.11|126.68|4133.90|26.48|1526.33|1183.00|953.84|14063.63| | |326.21|209.48|3137.73|2.77|9.81|976.73|10.29|3464.15|25.01|1318.34|942.76|754.73|11178.01| |Accumulated depreciation as at April 1, 2014|-|(15.45)|(577.96)|(1.43)|(8.53)|(512.98)|(10.27)|(2483.94)|(15.79)|(589.27)|(409.69)|(665.61)|(5290.92)| | |-|(12.58)|(451.33)|(1.23)|(8.34)|(405.62)|(10.60)|(1966.49)|(13.13)|(426.63)|(304.61)|(447.48)|(4048.04)| |Depreciation for the year|-|(2.97)|138.11|(0.08)|(0.21)|(119.56)|(5.99)|(555.67)|(5.58)|(259.60)|1.75|(44.38)|(854.18)| | |-|(2.87)|(126.64)|(0.20)|(0.21)|(93.75)|(0.05)|(449.53)|(2.81)|(113.26)|(88.10)|(187.88)|(1065.30)| |Adjustments on amalgamation|-|-|-|-|-|-|(1.53)|(0.08)|(1.21)|(0.06)|(0.22)|(3.10)| | | |-|-|-|-|-|(35.41)|-|(184.75)|(1.65)|(67.94)|(35.94)|(35.41)|(361.10)| |Deletions / Adjustments|-|-|0.08|-|-|0.59|0.01|41.29|3.26|1.63|0.68|1.91|49.45| | |-|0.01|-|0.02|21.80|0.38|116.83|1.80|18.56|18.96|5.16|183.52| | |Accumulated depreciation as at March 31, 2015|-|(18.42)|(439.77)|(1.51)|(8.74)|(631.95)|(16.25)|(2999.85)|(18.19)|(848.45)|(407.32)|(708.30)|(6098.75)| | |-|(15.45)|(577.96)|(1.43)|(8.53)|(512.98)|(10.27)|(2483.94)|(15.79)|(589.27)|(409.69)|(665.61)|(5290.92)| |Net book value as at March 31, 2015|326.51|192.07|3939.94|1.26|1.07|552.16|110.43|1134.05|8.29|677.88|775.68|245.54|7964.88| | |326.21|194.03|2559.77|1.34|1.28|463.75|0.02|980.21|9.22|729.07|533.07|89.12|5887.09| # Annual Report 2014-15 # Notes forming part of the Financial Statements # 12) FIXED ASSETS (contd.) # (ii) Intangible assets |Description|Intellectual property / distribution rights|Rights under licensing agreement|Total| |---|---|---|---| |Gross Block as at April 1, 2014|13.21|124.51|137.72| | |12.63|63.21|75.84| |Additions|-|0.06|0.06| | |0.58|3.02|3.60| |Assets acquired on amalgamation|-|3.84|3.84| | |-|57.94|57.94| |Deletions / Adjustments|-|-|-| | |-|0.34|0.34| |Gross Block as at March 31, 2015|13.21|128.41|141.62| | |13.21|124.51|137.72| |Accumulated amortisation as at April 1, 2014|(12.43)|(83.19)|(95.62)| | |(11.82)|(19.22)|(31.04)| |Amortisation for the year|(0.68)|(10.53)|(11.21)| | |(0.61)|(14.64)|(15.25)| |Adjustments on amalgamation|-|(3.38)|(3.38)| | |-|(49.19)|(49.19)| |Deletions / Adjustments|-|-|-| | |-|(0.14)|(0.14)| |Accumulated amortisation as at March 31, 2015|(13.11)|(97.10)|(110.21)| | |(12.43)|(83.19)|(95.62)| |Net book value as at March 31, 2015|0.10|31.31|31.41| | |0.78|41.32|42.10| # (iii) Capital work-in-progress |Description|Total| |---|---| |Capital work-in-progress|2706.94| | |3047.53| Previous years' figures are in italics. - (a) Freehold buildings include ` 2.67 crores (March 31, 2014: ` 2.67 crores) being value of investment in shares of Co-operative Housing Societies and Limited Companies. - (b) Net book value of computer equipment of ` 18.49 crores (March 31, 2014: ` 30.54 crores) and leasehold improvements of ` 56.65 crores (March 31, 2014: ` 67.13 crores) are under finance lease. |
- (c) Legal formalities relating to conveyance of freehold buildings having net book value ` 5.18 crores (March 31, 2014: ` 9.81 crores) are pending completion. 190 Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 13) NON-CURRENT INVESTMENTS Non-current investments consist of the following: |In Numbers|Currency|Face Value Per share|Description|As at March 31, 2015|As at March 31, 2014| |---|---|---|---|---|---| |1,54,89,922|INR|10|CMC Limited|379.89|379.89| |2,12,27,83,424|Peso|1|TCS Iberoamerica SA|461.31|461.31| |15,75,300|INR|10|APOnline Limited|-|-| |1,300|EUR|-|Tata Consultancy Services Belgium S.A.|1.06|1.06| |66,000|EUR|1000|Tata Consultancy Services Netherlands BV|402.87|402.87| |1,000|SEK|100|Tata Consultancy Services Sverige AB|18.89|18.89| |1|EUR|-|Tata Consultancy Services Deutschland GmbH|1.72|1.72| |20,000|USD|10|Tata America International Corporation|452.92|452.92| |75,82,820|SGD|1|Tata Consultancy Services Asia Pacific Pte Ltd.|18.69|18.69| |-|INR|-|WTI Advanced Technology Limited|-|38.52| |3,72,58,815|AUD|1|TCS FNS Pty Limited|211.72|211.72| |10,00,001|GBP|1|Diligenta Limited|429.05|429.05| |1,000|USD|-|Tata Consultancy Services Canada Inc. *|-|-| |100|CAD|70653.61|Tata Consultancy Services Canada Inc.|31.25|31.25| |51,00,000|INR|10|C-Edge Technologies Limited|5.10|5.10| |8,90,000|INR|10|MP Online Limited|0.89|0.89| |-|Dirhams|-|Tata Consultancy Services Morocco SARL AU|-|8.17| |1,40,00,000|RAND|1|Tata Consultancy Services (Africa) (PTY) Ltd.|65.75|4.92| |18,89,000|INR|10|MahaOnline Limited|1.89|1.89| |-|QAR|-|Tata Consultancy Services Qatar S.S.C.|2.44|2.44| |-|USD|-|Computational Research Laboratories Inc.|-|-| |10,00,000|INR|100|TCS e-Serve International Limited|10.00|10.00| |10,00,000|INR|10|TCS Foundation|-|-| |1,10,00,000|GBP|1|Diligenta Limited|101.75|359.45| |-|INR|-|Shares cancelled on amalagamation| | | |-|INR|-|Shares cancelled on voluntary liquidation| | | Unconsolidated Financial Statements # Annual Report 2014-15 # Notes forming part of the Financial Statements # 13) NON-CURRENT INVESTMENTS (contd.) (` crores) |In Numbers|Currency|Face Value Per share|Description|As at March 31, 2015|As at March 31, 2014| |---|---|---|---|---|---| |4,86,617|INR|10|Ruralshores Business Services Private Limited|25.00|25.00| | | | |(B) OTHERS| | | | | | |(i) Mutual and other funds (unquoted)|7.04|6.36| |1,000|INR|100000|India Innovation Fund (` 70,384 paid up per share)|7.04|6.36| | | | |(ii) Government securities (unquoted)|-|25.00| |-|INR|-|8.26% Government of India Bond (2027)|-|25.00| | | | |(iii) Bonds and Debentures (unquoted)| | | |-|INR|-|The Industrial Development Bank of India| | | |-|INR|-|8.00% IDBI Bonds (2018)|-|0.10| |-|INR|-|9.225% non-convertible debentures (2015)|-|98.08| |-|INR|-|8.49% non-convertible debentures (2016)|-|19.05| |-|INR|-|9.15% non-convertible debentures (2016)|-|48.63| |-|INR|-|LIC Housing Finance Limited| | | |-|INR|-|8.76% non-convertible debentures (2015)|-|29.36| |-|INR|-|9.02% non-convertible debentures (2015)|-|97.32| |-|INR|-|9.21% non-convertible debentures (2015)|-|29.35| |-|INR|-|9.38% non-convertible debentures (2015)|-|24.36| |-|INR|-|9.39% non-convertible debentures (2015)|-|49.25| |-|INR|-|9.60% non-convertible debentures (2015)|-|73.83| |-|INR|-|9.62% non-convertible debentures (2015)|-|14.76| |-|INR|-|9.62% non-convertible debentures (2015)|-|9.92| |-|INR|-|9.90% non-convertible debentures (2015)|-|24.70| |-|INR|-|9.75% non-convertible debentures (2015)|-|4.93| |-|INR|-|9.75% non-convertible debentures (2016)|-|19.85| |-|INR|-|Panatone Finvest Limited| | | |-|INR|-|9.50% non-convertible debentures (2016)|-|200.00| |-|INR|-|Power Finance Corporation Limited| | | |-|INR|-|9.46% Bonds (2015)|-|24.45| |-|INR|-|State Bank of India| | | |-|INR|-|9.05% Bonds (2020)|-|33.40| |-|INR|-|Tata Capital Housing Finance Limited| | | |-|INR|-|10.05% non-convertible debentures (2017)|-|25.00| |-|INR|-|Tata Chemicals Limited| | | |-|INR|-|10.00% non-convertible debentures (2019)|-|25.00| |-|INR|-|Tata Housing Development Company Limited| | | |-|INR|-|10.20% non-convertible debentures (2017)|-|66.98| |-|INR|-|Tata Motors Limited| | | |-|INR|-|9.05% non-convertible debentures (2015)|-|96.84| |-|INR|-|9.15% non-convertible debentures (2015)|-|43.67| |-|INR|-|9.22% non-convertible debentures (2015)|-|24.10| |-|INR|-|9.69% non-convertible debentures (2019)|-|75.00| |-|INR|-|10.00% non-convertible debentures (2019)|-|125.00| # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 13) NON-CURRENT INVESTMENTS (contd.) |In Numbers|Currency|Face Value Per share|Description|As at March 31, 2015|As at March 31, 2014| |---|---|---|---|---|---| |-|INR|-|8.80% non-convertible debentures (2015)|-|53.48| |-|INR|-|9.98% non-convertible debentures (2015)|-|144.78| |-|INR|-|9.30% non-convertible debentures (2015)|-|4.89| |-|INR|-|9.67% non-convertible debentures (2015)|-|58.95| |-|INR|-|9.78% non-convertible debentures (2015)|-|172.80| |-|INR|-|9.75% non-convertible debentures (2016)|-|7.00| |-|INR|-|9.68% non-convertible debentures (2017)|-|127.12| |-|INR|-|9.85% non-convertible debentures (2017)|-|19.76| |-|INR|-|9.87% non-convertible debentures (2017)|-|86.61| |-|INR|-|9.87% non-convertible debentures (2017)|-|114.44| |-|INR|-|8.85% non-convertible debentures (2018)|-|47.35| |-|INR|-|8.97% non-convertible debentures (2020)|-|50.00| |-|INR|-|9.10% non-convertible debentures (2020)|-|15.00| |69|EUR|297|0 % Bonds (2014)|0.12|0.12| |Total|Total|Total|Total|2653.85|5106.84| |Provision for diminution in value of investments|Provision for diminution in value of investments|Provision for diminution in value of investments|Provision for diminution in value of investments|(2.62)|(8.29)| |Book value of quoted investments|Book value of quoted investments|Book value of quoted investments|Book value of quoted investments|379.89|379.89| |Book value of unquoted investments (net of provision)|Book value of unquoted investments (net of provision)|Book value of unquoted investments (net of provision)|Book value of unquoted investments (net of provision)|2271.34|4718.66| |Market value of quoted investments|Market value of quoted investments|Market value of quoted investments|Market value of quoted investments|2974.41|2151.32| * Non-current investments having a value of less than ` 50,000. The Company has given an undertaking to the investors of KOOH Sports Private Limited not to transfer its shareholding prior to the expiry of thirty-six months from the completion date of the investment agreement except with the prior written consent of the other parties to the agreement. The restriction is valid as on March 31, 2015. The Company has given letter of comfort to various banks for credit and / or foreign exchange hedging facilities availed by its subsidiaries (a) Tata America International Corporation, (b) Tata Consultancy Services Switzerland Limited, (c) Tata Consultancy Services Sverige AB, (d) Tata Consultancy Services Belgium S.A., (e) Tata Consultancy Services Deutschland GmbH, (f) Tata Consultancy Services De Mexico S.A. De CV, (g) Tata Consultancy Services Netherlands BV (h) Tata Consultancy Services Asia Pacific Pte Ltd, (i) Tata Consultancy Services Qatar S.S.C. |
(j) TCS Italia SRL, (k) Tata Consultancy Services France S.A.S., (l) Tata Consultancy Services Malaysia Sdn Bhd, and (m) Tata Consultancy Services Luxembourg S.A. As per the terms of letter of comfort, the Company undertakes not to divest its ownership interest directly or indirectly in the subsidiaries and provide such managerial, technical and financial assistance to ensure continued successful operations of the subsidiaries. On July 1, 2014, the Company through its wholly owned subsidiary Tata Consultancy Services Asia Pacific Pte Ltd., acquired a controlling interest (51%) in IT Frontier Corporation (referred to as ITF) from Mitsubishi Corporation in Japan in exchange for a total purchase consideration of ` 357.93 crores (USD 59.60 million) consisting of a transfer of 49% ownership interest in Tata Consultancy Services Japan Ltd. to Mitsubishi Corporation and a cash consideration of ` 288.88 crores (USD 48.10 million). On August 7, 2014, Tata Consultancy Services Morocco SARL AU, a wholly owned subsidiary, has been voluntarily liquidated. On February 18, 2015, Computational Research Laboratories Inc., a wholly owned subsidiary, has been voluntarily liquidated. On September 16, 2014, the Company acquired additional 40% ownership interest in Tata Consultancy Services (Africa) (Pty) Ltd, for a purchase consideration of ` 60.83 crores (USD 10 million) from Tata Africa Holdings (SA) Proprietary Limited and thereby making it a wholly owned subsidiary of the Company. On March 23, 2015, TCS Management Pty Ltd., a wholly owned subsidiary of TCS FNS Pty Limited, has been voluntarily liquidated. On March 25, 2015 the Company subscribed to 100% Share Capital of TCS Foundation, a not for profit initiative registered under Section 8 of the Companies Act, 2013 with a paid-up capital of ` 1 crore. TCS Foundation aims at promoting projects and / or programmes relating to Corporate Social Responsibility activities of the Company and its subsidiaries. |
Unconsolidated Financial Statements 193 # Annual Report 2014-15 # Notes forming part of the Financial Statements # 14) LONG-TERM LOANS AND ADVANCES Long-term loans and advances (unsecured) consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Considered good| | | |(i) Capital advances|201.90|351.99| |(ii) Security deposits|538.00|548.23| |(iii) Loans and advances to employees|8.88|7.04| |(iv) Loans and advances to related parties|21.98|138.41| |(v) Advance tax (including refunds receivable (net))|3884.22|2913.02| |(vi) MAT Credit entitlement|1801.78|1810.61| |(vii) Indirect tax recoverable|48.89|54.76| |(viii) Inter-corporate deposits|1572.00|858.00| |(ix) Prepaid expenses|354.18|189.68| |(x) Other amounts recoverable in cash or kind or for value to be received|20.72|3.80| |(b) Considered doubtful| | | |(i) Security deposits|0.15|0.15| |(ii) Loans and advances to related parties|-|19.37| |Less : Provision for doubtful loans and advances|(0.15)|(19.52)| | |8452.55|6875.54| Loans and advances to related parties, considered good, comprise: |Tata Sons Limited|2.74|2.74| |---|---|---| |TCS FNS Pty Limited|6.18|10.02| |CMC Limited|12.67|0.26| |Tata Realty and Infrastructure Limited|0.39|45.39| |Tata Capital Financial Services Limited|-|80.00| Loans and advances to related parties, considered doubtful, comprise: Tata Consultancy Services Morocco SARL AU - 19.37 # 15) OTHER NON-CURRENT ASSETS Other non-current assets consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Interest receivable|24.33|34.52| |(b) Long-term bank deposits|500.00|1477.00| |(c) Earmarked balances with banks|0.35|25.00| |(d) Discount on bonds and debentures receivable on maturity|-|8.47| | |524.68|1544.99| 194 Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 16) CURRENT INVESTMENTS Current investments consist of the following: |In Numbers|Currency|Face Value Per share|Description|As at March 31, 2015|As at March 31, 2014| |---|---|---|---|---|---| |60,00,000|INR|10|HDFC Debt Fund for Cancer Cure - 50% Dividend Donation Option|6.00|6.00| |42,98,238|INR|100|Birla Sun Life Cash Plus - Growth-Direct Plan|96.47|-| |2,60,751|INR|1000|L&T Liquid Fund Direct Plan - Growth|50.00|-| |11,42,663|INR|1000|Tata Liquid Fund Direct Plan - Growth|295.00|-| |13,61,292|INR|10|Tata Money Market Fund Direct Plan|300.00|-| # (ii) Bonds and Debentures (unquoted) Housing Development Finance Corporation Limited - INR - 9.20% non-convertible debentures (2015) - 34.83 Housing Urban Development Corporation Limited - INR - 10.00% Bonds (2014) - 1.50 Infrastructure Development Finance Company Limited |-|INR|-|9.20% non-convertible debentures (2015)|-|49.20| |---|---|---|---|---|---| |-|INR|-|9.36% non-convertible debentures (2015)|-|73.42| LIC Housing Finance Limited - INR - 9.80% non-convertible debentures (2015) - 19.84 National Housing Bank - INR - 9.37% Bonds (2015) - 39.15 Power Finance Corporation Limited |-|INR|-|8.60% non-convertible debentures (2014)|-|34.26| |---|---|---|---|---|---| |-|INR|-|8.85% non-convertible debentures (2014)|-|68.15| |-|INR|-|9.63% Bonds (2014)|-|98.19| |-|INR|-|9.55% Bonds (2015)|-|49.03| Rural Electrification Corporation - INR - 8.84% Bonds (2014) - 19.45 Tata Motors Limited - INR - 9.85% non-convertible debentures (2015) - 39.43 Tata Sons Limited |-|INR|-|10.25% non-convertible debentures (2014)|-|25.00| |---|---|---|---|---|---| |-|INR|-|9.78% non-convertible debentures (2015)|-|164.13| Pre-acquisition interest - - - - - 12.29 Total - - - - 747.47 733.87 Unconsolidated Financial Statements 195 # Annual Report 2014-15 # Notes forming part of the Financial Statements # 17) INVENTORIES Inventories consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Raw materials, sub-assemblies and components|10.07|7.23| |(b) Finished goods and Work-in-progress|0.46|0.61| |(c) Goods-in-transit (raw materials)|1.81|0.73| |Total|12.34|8.57| Inventories are carried at the lower of cost and net realisable value. # 18) UNBILLED REVENUE Unbilled revenue as at March 31, 2015 amounting to 2439.36 crores (March 31, 2014: 2626.08 crores) primarily includes revenue recognised in relation to efforts incurred on turnkey contracts priced on a fixed time, fixed price basis. |
# 19) TRADE RECEIVABLES Trade receivables (Unsecured) consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Over six months from the date they were due for payment| | | |(i) Considered good|1825.69|1658.48| |(ii) Considered doubtful|322.17|224.68| |(b) Others| | | |(i) Considered good|15211.07|12813.41| |(ii) Considered doubtful|22.93|-| |Total|17381.86|14696.57| |Less: Provision for doubtful receivables|(345.10)|(224.68)| |Net Total|17036.76|14471.89| # 20) CASH AND BANK BALANCES Cash and bank balances consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Cash and cash equivalents| | | |(i) Balances with banks| | | |In current accounts|303.90|264.69| |In deposit accounts with original maturity less than three months|77.64|141.85| |(ii) Cheques on hand|46.49|14.81| |(iii) Cash on hand|0.50|1.00| |(iv) Remittances in transit|1.25|16.02| |Total Cash and Cash Equivalents|429.78|438.37| |(b) Other bank balances| | | |(i) Earmarked balances with banks|69.97|14.99| |(ii) Short-term bank deposits|16002.75|12112.90| |Total Other Bank Balances|16502.50|12566.26| # Notes forming part of the Financial Statements # 21) SHORT-TERM LOANS AND ADVANCES Short-term loans and advances (Unsecured) consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Considered good| | | |(i) Loans and advances to employees|272.59|260.20| |(ii) Loans and advances to related parties|12.32|348.71| |(iii) Security deposits|104.17|63.07| |(iv) Indirect tax recoverable|157.82|183.88| |(v) Inter-corporate deposits|1063.00|1500.00| |(vi) Prepaid expenses|1143.00|888.62| |(vii) Advance to suppliers|59.76|56.40| |(viii) Fair value of foreign exchange forward and currency option contracts|365.38|346.34| |(ix) Other amounts recoverable in cash or kind or for value to be received|174.14|40.90| |(b) Considered doubtful| | | |(i) Loans and advances to employees|49.13|42.28| |(ii) Security deposits|2.60|3.11| |(iii) Indirect tax recoverable|1.74|-| |(iv) Advance to suppliers|2.89|3.89| |(v) Other amounts recoverable in cash or kind or for value to be received|2.00|2.96| |Less : Provision for doubtful loans and advances|(58.36)|(52.24)| |Total|3352.18|3688.12| Loans and advances to related parties, considered good, comprise: |TCS FNS Pty Limited|5.10|39.46| |---|---|---| |Tata Consultancy Services Asia Pacific Pte Ltd.|-|1.02| |CMC Limited|0.73|0.68| |CMC America Inc.|-|0.01| |Tata Consultancy Services (Africa) (Pty) Limited|0.55|-| |TCS e-Serve International Limited|0.40|-| |C-Edge Technologies Limited|5.49|7.48| |Tata America International Corporation|0.03|-| |APOnline Limited|0.01|-| |Tata Realty and Infrastructure Limited|-|50.00| |Tata AIG General Insurance Company Limited|0.01|0.02| |Tata Housing Development Company Limited|-|50.00| |Tata Capital Financial Services Limited|-|200.00| |Infiniti Retail Limited|-|0.04| # 22) OTHER CURRENT ASSETS Other current assets consist of the following: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |(a) Interest receivable|339.53|715.61| |(b) Dividend receivable|-|19.25| |(c) Discount on bonds and debentures receivable on maturity|-|5.16| |Total|339.53|740.02| # Annual Report 2014-15 # Notes forming part of the Financial Statements # 23) REVENUE FROM OPERATIONS Revenue from operations consist of revenue from: | |(` crores)|2015|2014| |---|---|---|---| |(a) Information technology and consultancy services| |72160.74|63332.83| |(b) Sale of equipment and software licenses| |1417.32|1340.10| | |Total|73578.06|64672.93| # 24) OTHER INCOME (NET) Other income (net) consist of the following: | |(` crores)|2015|2014| |---|---|---|---| |(a) Interest income| |1554.93|1280.07| |(b) Dividend income| |1335.13|1610.95| |(c) Profit on redemption of mutual funds and sale of other investments (net)| |225.99|162.77| |(d) Rent| |2.85|4.70| |(e) Profit on sale of fixed assets (net)| |2.94|2.01| |(f) Exchange gain (net)| |1278.63|5.00| |(g) Miscellaneous income| |66.26|49.21| | |Total|4466.73|3114.71| Interest income comprise: - Interest on bank deposits: 1165.11 (676.84) - Interest on inter-corporate deposits: 264.14 (330.50) - Interest on long-term bonds and debentures: 120.32 (254.05) - Interest on loan given to subsidiary: 1.12 (2.48) - Others: 4.24 (16.20) Dividend income comprise: - Dividends from subsidiaries (non-current trade investments): 1334.65 (1610.60) - Dividends from mutual funds (current investments): 0.48 (0.35) Profit on redemption of mutual funds and sale of other investments (net) comprise: - From non-current investments (net): 24.78 (0.36) - From current investments (net): 201.21 (162.41) Exchange gain (net) include: - Gain / (Loss) on foreign exchange forward and currency option contracts which have been designated as Cash Flow Hedges. |
(Refer Note 39) # 25) EMPLOYEE BENEFIT EXPENSE Employee benefit expense consist of the following: | |(` crores)|2015|2014| |---|---|---|---| |(a) Salaries and incentives (Refer Note 50)| |24441.85|19039.28| |(b) Contributions: (Refer Note 30)| | | | |(i) Provident fund| |571.65|514.91| |(ii) Superannuation scheme| |163.47|136.29| |(iii) Gratuity fund| |301.42|130.02| |(iv) Social security and other plans for overseas employees| |501.25|382.66| |(c) Staff welfare expenses| |1388.68|1263.40| | |Total|27368.32|21466.56| # 198 Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 26) OPERATION AND OTHER EXPENSES Operation and other expenses consist of the following: | |2015|2014| |---|---|---| |(a) Overseas business expenses|11817.63|10149.37| |(b) Services rendered by business associates and others|5046.61|4398.42| |(c) Software, hardware and material costs|2932.16|2442.64| |(d) Communication expenses|641.50|529.48| |(e) Travelling and conveyance expenses|812.94|671.40| |(f) Rent|1072.70|1044.05| |(g) Legal and professional fees|333.54|277.84| |(h) Repairs and maintenance|491.18|404.36| |(i) Electricity expenses|493.36|463.25| |(j) Bad debts written off (net)|5.69|2.37| |(k) Provision for doubtful receivables (net)|124.56|68.26| |(l) Advances written off / (recovered) (net)|19.50|(0.12)| |(m) Provision for doubtful advances (net)|(13.10)|8.78| |(n) Recruitment and training expenses|235.10|205.06| |(o) Diminution in value of long-term investments|2.50|-| |(p) Printing and stationery|39.75|40.91| |(q) Insurance|22.33|22.32| |(r) Rates and taxes|95.59|79.05| |(s) Entertainment|44.97|40.04| |(t) Other expenses (Refer Note 36)|963.03|825.17| |Total|25181.54|21672.65| (i) Overseas business expenses comprise: | |2015|2014| |---|---|---| |Travel expenses|930.73|833.09| |Employee allowances|10886.90|9316.28| (ii) Repairs and maintenance comprise: | |2015|2014| |---|---|---| |Buildings|227.72|207.17| |Office and computer equipment|263.46|197.19| (iii) Software, hardware and material costs include: | |2015|2014| |---|---|---| |Material costs| | | |(a) Raw materials, sub-assemblies and components consumed|64.62|39.77| |(b) Opening stock:|0.61|0.54| |(c) Less: Closing stock:|0.46|0.61| | |0.15|(0.07)| | |64.77|39.70| (iv) Other expenses include: | |2015|2014| |---|---|---| |(a) Stores and spare parts consumed|0.06|0.02| |(b) Donation to Electoral Trust|1.49|-| # 27) FINANCE COSTS Finance costs consist of the following: | |2015|2014| |---|---|---| |Interest expense|79.57|23.41| |Total|79.57|23.41| # Annual Report 2014-15 # Notes forming part of the Financial Statements # 28) Current tax includes additional provision (net) of ` 61.33 crores (March 31, 2014 : additional provision (net) ` 467.62 crores) in domestic and certain overseas jurisdictions relating to earlier years. The impact of MAT entitlement of earlier period is ` 8.83 crores (March 31, 2014 : ` 451.92 crores). # 29) AMALGAMATION OF COMPANIES # WTI Advanced Technology Limited # a) Nature of business WTI Advanced Technology Limited is engaged in the business of Information Technology (IT) and Information Technology Engineering Services (ITES). The Company holds 100.00% of the voting power of WTI Advanced Technology Limited. # b) WTI Advanced Technology Limited has been amalgamated with the Company with effect from April 1, 2014 ("the appointed date") in terms of the scheme of amalgamation (Scheme) sanctioned by the High Court of Judicature at Bombay vide their Order dated March 27, 2015. Pursuant thereto all assets, unbilled revenue, debts, outstandings, credits, liabilities, benefits under income tax, service tax, excise, value added tax, sales tax (including deferment of sales tax), benefits for and under Software Technology Parks of India (STPI), duties and obligations of WTI Advanced Technology Limited, have been transferred to and vested in the Company retrospectively with effect from April 1, 2014. Since WTI Advanced Technology Limited, amalgamated as aforesaid, was wholly owned by the Company, no shares were exchanged to effect the amalgamation. # c) The amalgamation has been accounted for under the 'pooling of interests' method as prescribed by Accounting Standard 14 specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Accordingly, the assets, liabilities and reserves of WTI Advanced Technology Limited as at April 1, 2014 have been taken over at their book values and in the same form. The difference between the amounts recorded as investments of the Company and the amount of Share Capital of WTI Advanced Technology Limited has been adjusted in the General Reserve. |
Accordingly, the amalgamation has resulted in transfer of assets, liabilities and reserves in accordance with the terms of the Scheme at the following summarised values: |Particulars|Amalgamation of WTI Advanced Technology Limited| |---|---| |Appointed date of amalgamation|April 1, 2014| |Assets| | |Fixed Assets (Net)|1.27| |Trade receivables|18.26| |Cash and bank balances|41.59| |Investments|7.75| |Loans and advances and other assets|9.83| |Less: Liabilities| | |Trade payables, other liabilities and provisions|1.86| |Total net assets acquired|76.84| |Less:| | |Adjustment for cancellation of Company's investment in WTI Advanced Technology Limited|38.52| |Less: Transfer of Capital subsidy reserve of WTI Advanced Technology Limited|0.34| |Less: Transfer of Capital redemption reserve of WTI Advanced Technology Limited|0.40| |Less: Transfer of balances of Surplus in Statement of Profit and Loss account of WTI Advanced Technology Limited|71.78| |Balance transferred to general reserve as at appointed date|(34.20)| # Unconsolidated Financial Statements # 30) EMPLOYEE RETIREMENT BENEFITS # (a) Defined contribution plans The Company makes Provident fund, Superannuation fund and foreign defined contribution fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. In respect of Provident fund contributions to trust set up for this purpose, the Company is generally liable for annual contribution and any deficiency in interest cost compared to interest computed based on the rate of interest declared by the Central Government under the Employees' Provident Fund Scheme, 1952. In addition to such contributions, the Company also recognises potential deficiency in interest, if any, computed as per actuarial valuation of interest as an expense in the year it is determined. As of March 31, 2015, the fair value of the assets of the fund and the accumulated members' corpus is ` 7939.41 crores and ` 7419.41 crores respectively. In accordance with an actuarial valuation, there is no deficiency in the interest cost as the present value of the expected future earnings on the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of 8.75%. The actuarial assumptions include discount rate of 8.00% and an average expected future period of 7.35 years. The Company recognised ` 571.65 crores (March 31, 2014: ` 514.91 crores) for provident fund contributions and File: AR_TCS_2014_2015.md ` 163.47 crores (March 31, 2014: ` 136.29 crores) for superannuation contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The Company has contributed ` 267.63 crores (March 31, 2014: ` 177.75 crores) towards foreign defined contribution plans. # (b) Defined benefit plans The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme, a funded defined benefit plan for eligible employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for service less than 15 years, three-fourth month's salary for service of 15 years to 19 years and one month salary for service of 20 years and more, payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. |
| |As at March 31, 2015|As at March 31, 2014| |---|---|---| |i) Change in benefit obligations:| | | |Projected benefit obligation, beginning of the year|987.22|830.16| |Service cost|163.69|151.72| |Interest cost|95.87|68.46| |Liabilities transferred on amalgamation|0.47|21.58| |Actuarial loss / (gain)|131.41|(21.14)| |Benefits paid|(114.54)|(67.48)| |Past service cost|0.20|3.92| |Projected benefit obligation, end of the year|1264.32|987.22| | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |ii) Change in plan assets:| | | |Fair value of plan assets, beginning of the year|849.52|593.50| |Expected return on plan assets|83.79|51.04| |Employers' contributions|616.53|227.88| |Assets transferred on amalgamation|0.65|22.68| |Benefits paid|(114.54)|(67.48)| |Actuarial gain|5.96|21.90| |Fair value of plan assets, end of the year|1441.91|849.52| |Excess / (deficit) of plan assets over obligations|177.59|(137.70)| |Accrued asset / (liability)|177.59|(137.70)| # Annual Report 2014-15 # Notes forming part of the Financial Statements # 30) EMPLOYEE RETIREMENT BENEFITS (contd.) | |2015|2014| |---|---|---| |iii) Net gratuity cost:| | | |Service cost|163.69|151.72| |Interest on defined benefit obligation|95.87|68.46| |Expected return on plan assets|(83.79)|(51.04)| |Net Actuarial losses / (gains) recognised in the year|125.45|(43.04)| |Past service cost|0.20|3.92| |Net gratuity cost|301.42|130.02| |Actual return on plan assets|89.75|72.94| # iv) Category of assets: | |As at March 31, 2015|As at March 31, 2014| |---|---|---| |Corporate Bonds|174.55|-| |Insurer managed funds|737.67|849.49| |Government Securities|265.55|-| |Bank balance|217.33|-| |Others|46.81|0.04| |Total|1441.91|849.53| # v) Assumptions used in accounting for gratuity plan: | |%|%| |---|---|---| |Discount rate|8.00|9.00| |Salary escalation rate|6.00|6.00| |Expected rate of return on plan assets|8.00|9.00| The estimate of future salary increase considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risk of asset management, historical results of the return on plan assets and the Company's policy for plan asset management. | |2015|2014|2013|2012|2011| |---|---|---|---|---|---| |Experience adjustment| | | | | | |On plan liabilities loss / (gain)|32.06|(56.09)|(18.10)|43.75|35.00| |On plan assets gain|5.96|21.90|4.00|6.63|5.67| |Present value of benefit obligation|1264.32|987.22|830.16|679.25|552.80| |Fair value of plan assets|1441.91|849.52|593.50|542.04|494.42| |Excess / (deficit) of plan assets over obligations|177.59|(137.70)|(236.66)|(137.21)|(58.38)| The expected contribution is based on the same assumptions used to measure the Company's gratuity obligations as at March 31, 2015. The Company is expected to contribute ` 8.49 crores for the year ended March 31, 2016. # Unconsolidated Financial Statements # 31) SEGMENT REPORTING The Company has identified business segments (industry practice) as its primary segment and geographic segments as its secondary segment. Business segments comprise banking, finance and insurance services, manufacturing, retail and consumer packaged goods, telecom, media and entertainment and others such as energy, resources and utilities, Hi-tech, life science and healthcare, s-Governance, travel, transportation and hospitality, products, etc. Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to specific segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Fixed assets that are used interchangeably among segments are not allocated to primary and secondary segments. Geographical revenue is allocated based on the location of the customer. Geographic segments of the Company are Americas (including Canada and South American countries), Europe, India and Others. |
|Particulars|Business Segments|Business Segments|Business Segments|Business Segments|Business Segments| | | | | | |---|---|---|---|---|---|---| | |Banking, Financial Services and Insurance|Manufacturing|Retail and Consumer Packaged Goods|Telecom, Media and Entertainment|Others|Total| |Year ended March 31, 2015|28871.39|6514.53|10876.56|9217.83|18097.75|73578.06| | |26574.48|5675.56|9705.09|8070.53|14647.27|64672.93| |Segment result|8801.09|1821.43|2863.46|2490.17|5054.55|21030.70| | |9708.21|1798.36|3258.34|2440.33|4328.48|21533.72| |Unallocable expenses (net)| | | | |1475.84| | | | | | | |1103.96| | |Operating income| | | | |19554.86| | | | | | | |20429.76| | |Other income (net)| | | | |4466.73| | | | | | | |3114.71| | |Profit before Exceptional item and tax| | | | |24021.59| | | | | | | |23544.47| | |Exceptional item| | | | |528.38| | | | |-| | | | | |Profit before tax| | | | |24549.97| | | | | | | |23544.47| | |Tax expense| | | | |5293.01| | | | | | | |5069.55| | |Profit for the year| | | | |19256.96| | | | | | | |18474.92| | # Annual Report 2014-15 # Notes forming part of the Financial Statements # 31) SEGMENT REPORTING (contd.) |Particulars|Business Segments|Banking, Financial Services and Insurance|Manufacturing|Retail and Consumer Packaged Goods|Telecom, Media and Entertainment|Others|Total| |---|---|---|---|---|---|---|---| |As at March 31, 2015|Segment assets|6164.34|1809.16|2620.90|2947.68|6509.17|20051.25| | | |5534.01|1518.29|2366.27|2729.88|5653.86|17802.31| | |Unallocable assets| | | | |43014.05| | | | | | | | |39801.88| | | |Total assets| | | | |63065.30| | | | | | | | |57604.19| | | |Segment liabilities|1774.71|290.22|472.25|490.29|1049.27|4076.74| | | |774.45|135.37|114.71|145.11|505.71|1675.35| | |Unallocable liabilities| | | | |13572.12| | | | | | | | |11876.96| | | |Total liabilities| | | | |17648.86| | | | | | | | |13552.31| | |Year ended March 31, 2015|Other Information| | | | | | | | |Capital Expenditure (unallocable)| | | | |2599.67| | | | | | | | |3594.50| | | |Depreciation and amortisation (unallocable)| | | | |865.39| | | | | | | | |1080.55| | | |Other significant non cash expense (allocable)|19.34|6.46|47.08|1.08|62.69|136.65| | | |9.67|2.90|1.96|27.12|37.64|79.29| | |Other significant non cash expense (net) (unallocable)| | | | |2.50| | | | | |-| | | | | # The following geographic segments individually contribute 10 percent or more of the Company's revenue and segment assets: |Geographic segments|Revenue for the year ended March 31, 2015|Segment assets as at March 31, 2015| |---|---|---| |Americas|41969.70|9331.78| | |37315.21|7210.97| |Europe|19965.38|5931.83| | |17159.39|5856.30| |India|4875.99|4202.63| | |4420.91|4062.84| Previous years' figures are in italics. # Unconsolidated Financial Statements # 32) RELATED PARTY DISCLOSURES # A) Related parties and their relationship # I) Holding Company Tata Sons Limited # II)(A) Subsidiaries (Direct holding) 1. CMC Limited 2. Tata Consultancy Services Sverige AB 3. Tata Consultancy Services Asia Pacific Pte Ltd. 4. TCS Iberoamerica SA 5. Tata Consultancy Services Netherlands BV # II)(B) Subsidiaries (Indirect holding) 1. CMC Americas Inc. 2. CMC eBiz Inc. 3. Tata Consultancy Services Japan Ltd. (merged with IT Frontier Corporation (a subsidiary of Mitsubishi Corporation) w.e.f 01.07.2014) 4. Tata Consultancy Services Malaysia Sdn Bhd 5. Tata Consultancy Services (China) Co., Ltd. 6. PT Tata Consultancy Services Indonesia 7. Tata Consultancy Services (Thailand) Limited 8. Tata Consultancy Services (Philippines) Inc. 9. Nippon TCS Solution Center Limited (merged with Tata Consultancy Services Japan Ltd. w.e.f 01.07.2014) 10. Tata Information Technology (Shanghai) Co. Limited (Amalgamated with Tata Consultancy services (China) Co., Ltd. w.e.f. 05.11.2013) 11. Tata Consultancy Services Japan, Ltd. (new entity formed w.e.f 1.07.2014 pursuant to the merger of Tata Consultancy Services Japan Ltd. and IT Frontier Corporation) 12. TCS Solution Center S.A. 13. Tata Consultancy Services Argentina S.A. 14. Tata Consultancy Services De Mexico S.A., De C.V. 15. TCS Inversiones Chile Limitada 16. Tata Consultancy Services Do Brasil Ltda 17. Tata Consultancy Services Chile S.A. 18. TATASOLUTION CENTER S.A. 19. TCS Uruguay S.A. 20. MGDC S.C. 21. Tata Consultancy Services Luxembourg S.A. 22. Tata Consultancy Services Switzerland Ltd. 23. Tata Consultancy Services France S.A.S. 24. TCS Italia SRL 25. Tata Consultancy Services Osterreich GmbH 26. Tata Consultancy Services Danmark ApS 27. Tata Consultancy Services De Espana S.A. 28. Tata Consultancy Services Portugal Unipessoal Limitada 29. Alti S.A. 30. Planaxis Technologies Inc. 31. Alti HR S.A.S. 32. Alti Infrastructures Systemes & Reseaux S.A.S. 33. Alti NV 34. Tescom (France) Software Systems Testing S.A.R.L. 35. Alti Switzerland S.A. 36. Teamlink Unconsolidated Financial Statements 205 # Annual Report 2014-15 # Notes forming part of the Financial Statements # 32) RELATED PARTY DISCLOSURES (contd.) # A) Related parties and their relationship (contd.) # II)(A) Subsidiaries (Direct holding) 1. TCS FNS Pty Limited 2. APOnline Limited 3. Tata America International Corporation 4. |
Tata Consultancy Services Belgium S.A. 5. Tata Consultancy Services Deutschland GmbH 6. Tata Consultancy Services Canada Inc. 7. Diligenta Limited 8. WTI Advanced Technology Limited - (Amalgamated with Tata Consultancy Services Limited pursuant to the order dated 27.03.2015 of the Hon'ble High Court of Judicature at Bombay. Effective Date: 01.04.2015. Appointed Date: 01.04.2014) 9. C-Edge Technologies Limited 10. MP Online Limited 11. Tata Consultancy Services Morocco SARL AU - (liquidated w.e.f. 30.05.2014 vide court order dated 07.08.2014) 12. Tata Consultancy Services (Africa)(PTY) Ltd. 13. TCS e-Serve International Limited 14. MahaOnline Limited 15. Tata Consultancy Services Qatar S.S.C. 16. Computational Research Laboratories Inc. - (liquidated w.e.f. 18.02.2015) 17. TCS Foundation - (entity incorporated on 13.03.2015 under Section 8 of the Companies Act, 2013) # III) Fellow Subsidiaries with whom the Company has transactions - Infiniti Retail Limited - Panatone Finvest Limited - Tata AIG General Insurance Company Limited - Tata AIA Life Insurance Company Limited - Tata Investment Corporation Limited - Tata Limited - Tata Asset Management Limited - Tata Business Support Services Limited - Tata Capital Limited # II)(B) Subsidiaries (Indirect holding) 1. TCS Financial Solutions Australia Holdings Pty Limited 2. TCS Financial Solutions Australia Pty Limited 3. PT Financial Network Services 4. TCS Management Pty Ltd. - (Liquidated w.e.f. 23.03.2015) 5. TCS Financial Solutions Beijing Co., Ltd. 6. MS CJV Investments Corporation 7. Diligenta 2 Limited 8. Tata Consultancy Services (South Africa) (PTY) Ltd. 9. TCS e-Serve America, Inc. # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 32) RELATED PARTY DISCLOSURES (contd.) # A) Related parties and their relationship (contd.) - Tata Housing Development Company Limited - Tata Consulting Engineers Limited - Tata Sky Limited - Tata Realty and Infrastructure Limited - e-Nxt Financials Limited - Tata Industries Limited - Tata International Limited - Tata Autocomp Systems Limited - Drive India Enterprise Solutions Limited - Tata Advanced Systems Limited - Tata Lockheed Martin Aerostructures Limited (formerly Tata Aerostructures Limited) - Tata Capital Housing Finance Limited - TC Travel and Services Limited - Tata Securities Limited - Tata Capital Forex Limited - Tata Capital Financial Services Limited - Tata Interactive Systems GmbH - TATA Africa Holdings (Kenya) Limited - Tata Zambia Limited - Tata Sikorsky Aerospace Limited (formerly Tara Aerospace Systems Limited) - Tata Cleantech Capital Limited - Tata Interactive Systems AG - Tata Industrial Services Limited - Tata Uganda Limited - Tata SIA Airlines Limited - Tata Africa Holdings (SA) (Proprietary) Limited - TRIL Infopark Limited (ceased to be an associate and is a subsidiary w.e.f. 23.03.2015) - Tata Africa Services (Nigeria) Limited # IV) Key Management Personnel - Mr. N. Chandrasekaran, Chief Executive Officer and Managing Director - Mr. Rajesh Gopinathan, Chief Financial Officer - Ms. Aarthi Subramanian, Executive Director (w.e.f. |
12.03.2015) Unconsolidated Financial Statements 207 # Annual Report 2014-15 # Notes forming part of the Financial Statements # 32) RELATED PARTY DISCLOSURES (contd.) # B) Transactions with related parties for the year ended March 31, 2015 | |Holding Company|Subsidiaries|Fellow Subsidiaries|Management Key Personnel and their relatives|Total| |---|---|---|---|---|---| |Brand equity contribution|75.00|-|-|-|75.00| | |76.22|-|-|-|76.22| |Purchase of fixed assets|-|1.20|66.19|-|67.39| | |-|6.93|40.32|-|47.25| |Loans and advances given|-|14.40|-|-|14.40| | |-|13.59|0.06|-|13.65| |Loans and advances repaid|-|40.33|0.05|-|40.38| | |-|17.40|-|-|17.40| |Inter-corporate deposits placed|-|-|-|-|-| | |-|330.00|-|-|330.00| |Inter-corporate deposits matured|-|-|380.00|-|380.00| | |-|-|-|-|-| |Purchase of investments|-|-|6917.57|-|6917.57| | |-|-|25.00|-|25.00| |Redemption of investments|29.43|253.36|6284.56|-|6567.35| | |348.33|2.80|-|-|351.13| |Revenue (including reimbursements)|2.37|45575.72|231.68|-|45809.77| | |1.39|40015.45|186.48|-|40203.32| |Interest income|49.61|1.31|29.40|-|80.32| | |126.09|6.62|54.80|-|187.51| |Dividend income|-|1334.65|-|-|1334.65| | |-|1610.60|-|-|1610.60| |Rent income|-|2.50|-|-|2.50| | |-|4.70|-|-|4.70| |Other income|-|35.91|-|-|35.91| | |-|42.10|-|-|42.10| |Purchase of goods, services and facilities|0.64|3045.17|266.62|-|3312.43| |(including reimbursement)|0.91|2315.50|261.65|-|2578.06| |Rent expense|0.98|89.02|1.69|-|91.69| | |0.81|62.67|1.68|-|65.16| |Provision / (Write back of provision) for|0.02|(19.72)|0.40|-|(19.30)| |doubtful receivables, advances|0.02|0.43|0.37|-|0.82| |Bad debts written off|-|0.34|-|-|0.34| | |-|-|-|-|-| |Advances written off|-|19.37|-|-|19.37| | |-|-|-|-|-| |Dividend paid on equity shares|10825.89|-|12.78|0.66|10839.33| | |3608.63|-|4.26|0.22|3613.11| |Dividend paid on redeemable preference|28.68|-|-|-|28.68| |shares|19.00|-|-|-|19.00| |Guarantees given|-|0.25|-|-|0.25| | |-|493.51|-|-|493.51| |Remuneration|-|-|-|23.50|23.50| | |-|-|-|20.05|20.05| |Repayment of preference share capital|-|-|-|-|-| | |100.00|-|-|-|100.00| # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 32) RELATED PARTY DISCLOSURES (contd.) # C) Balances with related parties as at March 31, 2015 | |Holding Company|Subsidiaries|Fellow Subsidiaries|Key Management Personnel and their relatives|Total| |---|---|---|---|---|---| |Trade receivables, Unbilled revenue, Loans and advances, Other assets (net)|3.77|10016.37|109.89|-|10130.03| |Trade payables, Income received in advance, Advances from customers, Other liabilities|68.67|1509.14|35.60|-|1613.41| |Guarantees|-|3310.95|-|-|3310.95| |Investment in debentures / mutual funds / bonds|-|-|595.00|-|595.00| | |1091.32|-|291.98|-|1383.30| Previous years' figures are in italics # D) Disclosure of material transactions with related parties | |2015|2014| |---|---|---| |Purchase of fixed assets| | | |CMC Limited|1.20|6.81| |Tata Consulting Engineers Limited|18.66|16.71| |Tata Realty and Infrastructure Limited|46.68|23.35| |Loans and advances given during the year| | | |TCS Financial Solutions Australia Pty Limited|0.94|4.16| |C-Edge Technologies Limited|-|7.48| |CMC Limited|12.46|0.93| |Loans and advances repaid during the year| | | |CMC Limited|-|4.07| |TCS Financial Solutions Australia Pty Limited|37.31|11.54| |Inter-corporate deposits placed| | | |Tata Housing Development Company Limited|-|50.00| |Tata Capital Financial Services Limited|-|280.00| |Inter-corporate deposits matured| | | |Tata Realty and Infrastructure Limited|50.00|-| |Tata Housing Development Company Limited|50.00|-| |Tata Capital Financial Services Limited|280.00|-| |Purchase of investments| | | |Tata Capital Housing Finance Limited|-|25.00| |Tata Asset Management Limited|6856.74|-| |Redemption / sale of investments| | | |Tata Sons Limited|29.43|348.33| |Tata Asset Management Limited|6284.56|-| |Revenue (including reimbursements)| | | |Tata America International Corporation|36962.35|32678.88| |Interest income| | | |Tata Sons Limited|49.61|126.09| |Panatone Finvest Limited|8.85|19.00| |Tata Capital Financial Services Limited|13.75|16.24| |Dividend income| | | |Tata America International Corporation|766.17|1275.02| |Tata Consultancy Services Canada Inc.|193.37|303.30| |TCS e-Serve International Limited|202.00|-| # Annual Report 2014-15 # Notes forming part of the Financial Statements # 32) RELATED PARTY DISCLOSURES (contd.) # D) Disclosure of material transactions with related parties (contd.) | |2015|2014| |---|---|---| |Rent income| | | |C-Edge Technologies Limited|-|1.62| |TCS e-Serve International Limited|2.19|2.66| |Other income| | | |Diligenta Limited|25.07|30.90| |TCS e-Serve International Limited|6.34|6.28| |Purchase of goods, services and facilities (including reimbursement)| | | |CMC Americas Inc.|1110.19|941.22| |Tata America International Corporation|578.86|392.98| |Rent expense| | | |CMC Limited|69.44|45.72| |Diligenta Limited|17.23|16.95| |Provision / (Write back of provision) for doubtful receivables, advances| | | |Tata Consultancy Services Morocco SARL AU (liquidated w.e.f. May 30, 2014 vide court order dated Aug 7, 2014)|(19.37)|-| |Tata Consultancy Services (Thailand) Limited|(0.33)|0.33| |Tata Sky Limited|0.32|(0.49)| |Tata Realty and Infrastructure Limited|-|0.44| |Drive India Enterprise Solutions Limited|(0.28)|0.28| |Bad debts written off| | | |Tata Consultancy Services (Thailand) Limited|0.33|-| |Advances written off| | | |Tata Consultancy Services Morocco SARL AU (liquidated w.e.f. May 30, 2014 vide court order dated Aug 7, 2014)|19.37|-| |Dividend paid on equity shares| | | |Tata Sons Limited|10825.89|3608.63| |Guarantees given during the year| | | |Tata America International Corporation|-|70.28| |Tata Consultancy Services Netherlands BV|-|245.78| |TCS Financial Solutions Beijing Co., Ltd. (formerly Financial Network Services (Beijing) Co., Ltd.)|-|149.04| |Tata Consultancy Services Asia Pacific Pte Ltd.|0.25|0.72| |Remuneration to Key Management Personnel| | | |Mr. |
N.Chandrasekaran|21.28|18.68| # E) Disclosure of material balances with related parties | |As at March 31, 2015|As at March 31, 2014| | |---|---|---|---| |Trade receivables, unbilled revenue, loans and advances and other assets (net)|Tata America International Corporation|7266.20|5625.53| |Trade payables, income received in advance, advances from customers, other liabilities|Tata America International Corporation|629.20|474.78| | |CMC Americas Inc.|274.79|156.63| |Guarantees outstanding|Diligenta Limited|2694.55|3167.02| |Investment in debentures/mutual funds/bonds|Tata Sons Limited|-|1091.32| | |Panatone Finvest Limited|-|200.00| | |Tata Asset Management Limited|595.00|-| # Notes forming part of the Financial Statements # 33) OBLIGATIONS TOWARDS OPERATING LEASES |Particulars|As at March 31, 2015|As at March 31, 2014| |---|---|---| |Non-cancellable operating lease obligation| | | |Not later than one year|511.72|528.77| |Later than one year but not later than five years|1590.64|1325.51| |Later than five years|1474.45|1214.37| |Total|3576.81|3068.65| Rent expense of ` 550.93 crores ( Previous year: ` 507.83 crores ) in respect of obligation under non-cancellable operating leases and ` 521.77 crores ( Previous year: ` 536.22 crores) in respect of cancellable operating leases have been charged to the statement of profit and loss. # 34) OBLIGATIONS TOWARDS FINANCE LEASES |Particulars|As at March 31, 2015|As at March 31, 2014| |---|---|---| |Assets acquired under finance lease| | | |(i) Minimum lease payments:| | | |Not later than one year|33.08|38.24| |Later than one year but not later than five years|59.27|83.39| |Later than five years|44.35|55.80| |Total|136.70|177.43| |(ii) Present value of minimum lease payments:| | | |Not later than one year|22.11|25.32| |Later than one year but not later than five years|30.92|49.67| |Later than five years|33.21|38.97| |Total|86.24|113.96| |Add : Future finance charges|50.46|63.47| |Total|136.70|177.43| # 35) EARNINGS PER EQUITY SHARE |Particulars|2015|2014| |---|---|---| |Profit for the year|19256.96|18474.92| |Less : Dividend on preference shares (including dividend tax)|-|33.65| |Amount available for equity shareholders|19256.96|18441.27| |Weighted average number of equity shares|195,87,27,979|195,87,27,979| |Earning per share basic and diluted (`)|98.31|94.15| |Face value per equity share (`)|1.00|1.00| Unconsolidated Financial Statements # Annual Report 2014-15 # Notes forming part of the Financial Statements # 36) AUDITOR'S REMUNERATION |Particulars|2015|2014| |---|---|---| |Services as statutory auditors (including quarterly audits)|3.75|3.75| |Audit of financial statements as per IFRS|2.50|2.50| |Tax audit|0.53|0.53| |Services for tax matters|0.70|-| |SSAE 16 and other certifications|1.47|1.45| |Reimbursement of out-of-pocket expenses|0.16|0.13| |Service tax|1.13|1.03| Service tax credit has been / will be availed. In addition to the above, fees amounting to ` 1.97 crores (Previous year: ` 2.24 crores) for attest and other professional services rendered have been paid to firms of Chartered Accountants in which some of the partners are also partners in the firm of statutory auditors. # 37) CONTINGENT LIABILITIES |Particulars|As at March 31, 2015|As at March 31, 2014| |---|---|---| |Claims against the Company not acknowledged as debt|40.72|29.57| |Income tax demands (See (a) below)|3901.82|3890.20| |Indirect tax demands (See (b) below)|61.01|63.27| |Guarantees given by the Company on behalf of subsidiaries (See (c) and (d) below)|3310.95|4082.31| a) In respect of income tax demands of ` 318.20 crores (March 31, 2014: ` 318.20 crores), not included above, the Company is entitled to an indemnification from the seller of TCS e-Serve Limited. b) In respect of indirect tax demands of ` 8.53 crores (March 31, 2014: ` 8.53 crores), not included above, the Company is entitled to an indemnification from the seller of TCS e-Serve Limited. c) The Company has provided guarantees aggregating ` 2694.55 crores (GBP 291.30 million) (March 31, 2014: ` 3167.02 crores) (GBP 317.20 million) to third parties on behalf of its subsidiary Diligenta Limited. The Company does not expect any outflow of resources in respect of the above. d) The Company has provided guarantees aggregating ` 87.42 crores (USD 13.97 million) (March 31, 2014: ` 83.91 crores) (USD 13.97 million) to third parties on behalf of its subsidiary Tata America International Corporation. The Company does not expect any outflow of resources in respect of the above. # 38) CAPITAL AND OTHER COMMITMENTS a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) ` 1844.08 crores (March 31, 2014: ` 2811.44 crores). b) The Company has a purchase commitment towards India Innovation Fund for the uncalled amount of balance ` 29618.47 per unit of 1000 units aggregating to ` 2.96 crores (March 31, 2014: ` 3.64 crores). # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 39) DERIVATIVE FINANCIAL INSTRUMENTS The Company, in accordance with its risk management policies and procedures, enters into foreign exchange forward, options and future contracts to manage its exposure in foreign exchange rates. The counter party is generally a bank. These contracts are for a period between one day and eight years. |
The Company has outstanding foreign exchange option contracts, which have been designated as Cash Flow Hedges, as at: | |March 31, 2015|March 31, 2015|March 31, 2015|March 31, 2014|March 31, 2014|March 31, 2014| | | | | |---|---|---|---|---|---|---| |No. of Contracts|Notional amount of contracts|Fair Value (` crores)|No. of Contracts|Notional amount of contracts|Fair Value (` crores)| | |Foreign Currency| |(million)| |(million)| | | |U.S. Dollar|-|-|-|4|410.00|21.36| |Sterling Pound|18|297.00|67.05|6|177.00|18.23| |Euro|9|171.00|87.78|3|120.00|19.87| |Australian dollar|6|97.00|31.15|3|75.00|2.71| The movement in Hedging Reserve for derivatives designated as Cash Flow Hedges is as follows: |Particulars| | |Year ended March 31, 2015| |Year ended March 31, 2014| | | |---|---|---|---|---|---|---|---| | | | |Intrinsic value|Time value|Intrinsic Value| |Time Value| |Balance at the beginning of the year| | |24.88|4.76|55.49| |-| |Transferred on amalgamation| | |-|-|(8.33)|-| | |Changes in the fair value of effective portion of Cash Flow Hedges| | |905.89|(440.18)|(619.65)| |(140.11)| |(Gains) / losses transferred to the statement of profit and loss on occurrence of forecasted hedge transactions| | |(779.35)|434.75|597.37| |144.87| |Balance at the end of the year| | |151.42|(0.67)|24.88| |4.76| Net gain on derivative instruments of ` 150.75 crores recognised in Hedging Reserve as at March 31, 2015, is expected to be transferred to the statement of profit and loss by March 31, 2016. In addition to the above Cash Flow Hedges, the Company has outstanding foreign exchange forward, options and future contracts with notional amount aggregating ` 19949.03 crores (March 31, 2014: ` 15774.90 crores) whose fair value showed a gain of ` 159.65 crores as at March 31, 2015 (March 31, 2014: gain of ` 261.23 crores). Exchange gain of ` 1363.87 crores (March 31, 2014: Exchange loss of ` 66.60 crores) on foreign exchange forward, options and future contracts for the year ended March 31, 2015 have been recognised in the statement of profit and loss. As at March 31, 2015, the Company has net foreign currency exposures that are not hedged by derivative instruments or otherwise amounting to ` 2884.79 crores (March 31, 2014: ` 681.53 crores). # 40) MICRO AND SMALL ENTERPRISES |Particulars|As at March 31, 2015| |As at March 31, 2014| | |---|---|---|---|---| | |Principal|Interest|Principal|Interest| |Amount due to vendor|7.74|0.02|9.79|0.04| |Principal amount paid (includes unpaid) beyond the appointed date|247.61|-|138.71|-| |Interest due and payable for the year|-|0.75|-|0.44| |Interest accrued and remaining unpaid (includes interest disallowable of ` 2.16 crores ( Previous year: ` 1.41 crores))|-|2.16|-|1.41| Dues to Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management. # Annual Report 2014-15 # Notes forming part of the Financial Statements # 41) INCOME IN FOREIGN CURRENCY |Particulars|2015|2014| |---|---|---| |(a) Consultancy services|70211.12|60373.81| |(b) FOB value of exports of equipment and licenses|469.58|261.15| |(c) Interest income|5.41|6.76| |(d) Dividend income|1090.29|1582.38| |(e) Other income (net)|41.92|36.74| # 42) EXPENDITURE IN FOREIGN CURRENCY |Particulars|2015|2014| |---|---|---| |(a) Royalty|1.85|2.57| |(b) Legal and professional fees|189.27|181.32| |(c) Interest|9.27|1.47| |(d) Overseas employee costs|5193.50|3713.91| |(e) Overseas business expenses|11636.80|9670.58| |(f) Services rendered by business associates and others|4682.61|3940.66| |(g) Software, hardware and material cost|1002.32|753.32| |(h) Communication expenses|317.87|239.96| |(i) Travelling and conveyance expenses|258.43|192.01| |(j) Other operating expenses|678.26|882.55| |(k) Foreign taxes|775.38|697.05| # 43) VALUE OF IMPORTS CALCULATED ON CIF BASIS |Particulars|2015|2014| |---|---|---| |Raw materials, sub-assemblies and components|47.37|32.96| |Capital goods|523.21|589.60| |Stores and spare parts|0.03|-| # 44) VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS, SUB-ASSEMBLIES AND COMPONENTS, STORES AND SPARE PARTS CONSUMED |Particulars|( ` crores)|%|( ` crores)|%| | |---|---|---|---|---|---| |Raw materials, sub-assemblies and components|Imported:|46.08|71.31|31.40|78.96| |Indigenous:|18.54|28.69|8.37|21.04| | | |64.62|100.00|39.77|100.00| | |Stores and spare parts|Imported:|0.03|50.00|-|-| |Indigenous:|0.03|50.00|0.02|100.00| | | |0.06|100.00|0.02|100.00| | Consumption figures shown above are after adjusting excess and shortages ascertained on physical count, unserviceable items, etc. # Unconsolidated Financial Statements # Notes forming part of the Financial Statements # 45) REMITTANCE IN FOREIGN CURRENCIES FOR DIVIDENDS File: AR_TCS_2014_2015.md The Company has remitted ` Nil (March 31, 2014: ` Nil ) in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittance, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders. |
The particulars of dividends declared and paid to non-resident shareholders for the year ended March 31, 2014 and interim dividends for the year ended March 31, 2015, are as under: |Final dividend for 2012-13 declared in June 2013|10062|31,07,28,113|-|403.95| |---|---|---|---|---| |Interim dividend declared in July 2013|9970|31,38,30,865|-|125.53| |Interim dividend declared in October 2013|10009|31,98,81,202|-|127.95| |Interim dividend declared in January 2014|10276|32,24,19,506|-|128.97| |Final dividend for 2013-14 declared in June 2014|10690|32,47,83,907|649.57|-| |Interim dividend declared in July 2014|10605|32,79,02,995|1475.56|-| |Interim dividend declared in October 2014|11497|32,96,36,378|164.82|-| |Interim dividend declared in January 2015|11970|33,23,64,092|166.18|-| # 46) DISCLOSURE UNDER CLAUSE 32 OF THE LISTING AGREEMENT Amount of loans and advances in nature of loans outstanding from subsidiaries as at March 31, 2015: |Subsidiary Company|Outstanding as at March 31, 2015|Maximum amount outstanding during the year| |---|---|---| |TCS FNS Pty Limited *|6.18|45.53| | |45.32|53.52| |Tata Consultancy Services Morocco SARL AU|-|5.51| | |5.47|7.72| * TCS FNS Pty Limited has made the following investments in its subsidiaries: | |No. of Shares| |---|---| |TCS Financial Solutions Australia Holdings Pty Limited|65,58,424| Previous years' figures are in italics. # 47) Research and development expenditure Research and development expenditure aggregating ` 192.62 crores (Previous year: ` 176.31 crores), including capital expenditure was incurred during the year. # 48) Depreciation Policy Revision The Company has revised its policy of providing depreciation on fixed assets effective April 1, 2014. Depreciation is now provided on a straight line basis for all assets as against the policy of providing on written down value basis on some assets and straight line basis on others. Further the remaining useful life has also been revised wherever appropriate based on an evaluation. The carrying amount as on April 1, 2014 is depreciated over the revised remaining useful life. As a result of these changes, the depreciation charge for the year ended March 31, 2015 is higher by ` 131.16 crores and the effect relating to the period prior to April 1, 2014 is a net credit of ` 528.38 crores (excluding deferred tax of ` 129.62 crores) which has been shown as an 'Exceptional Item' in the statement of profit and loss. # 49) Scheme of Amalgamation At their respective meetings held on October 16, 2014, the Boards of the Company and of its subsidiary, CMC Limited have approved a Scheme of Amalgamation of CMC Limited with the Company. The appointed date for the proposed Scheme is April 1, 2015. The Scheme is subject to sanction of the Hon'ble High Courts and all other statutory approvals as may be required under law. # 50) One-time Bonus During the year, an amount of ` 2326.42 crores has been recognised in the Statement of Profit and Loss in respect of one-time bonus to eligible employees. # 51) Corporate Social Responsibility Expenditure During the year, the Company has incurred an amount of ` 218.42 crores towards Corporate Social Responsibility expenditure. # 52) Previous Years' Figures Previous years' figures have been recast / restated. Unconsolidated Financial Statements # Statement pursuant to first proviso to sub-section (3) of section 129 of the Companies Act 2013, read with rule 5 of Companies (Accounts) Rules, 2014 # in the prescribed Form AOC-1 relating to subsidiary companies # Annual Report 2014-15 |Sr. No.|Name of the Subsidiary Company|Reporting Currency|Exchange Rate|Share Capital|Reserves & Surplus|Total Assets|Total Liabilities|Turnover before Taxation|Profit after Provision for Taxation|Profit %|Proposed Dividend|% of Shareholding|Country| | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |1|APOnline Limited|INR|1.000000|1.77|33.59|126.19|90.83|36.00|118.01|38.02|13.10|89%|India| | | |2|MP Online Limited|INR|1.000000|1.00|43.88|72.62|27.74|-|55.02|25.09|8.62|16.47|4.20|89%|India| |3|C-Edge Technologies Limited|INR|1.000000|10.00|91.60|172.04|70.44|1.12|219.22|43.56|15.01|28.55|-|51%|India| |4|MahaOnline Limited|INR|1.000000|2.55|36.42|179.06|140.09|-|280.58|14.08|4.73|9.35|-|74%|India| |5|CMC Limited|INR|1.000000|30.30|1160.76|1592.92|401.86|226.86|1288.46|204.80|7.03|197.77|83.33|51.12%|India| |6|CMC Americas Inc.|USD|62.577500|10.01|143.11|431.70|278.58|-|1525.64|130.79|48.82|81.97|-|100%|U.S.A.| |7|CMC eBiz Inc.|USD|62.577500|0.01|18.82|21.93|3.10|-|4.74|(1.34)|(0.46)|(0.88)|-|100%|U.S.A.| |8|TCS e-Serve International Limited|INR|1.000000|10.00|161.27|208.71|37.44|153.00|88.18|61.21|20.88|40.33|227.00|100%|India| |9|TCS e-Serve America, Inc.|USD|62.577500|1.73|23.96|32.62|6.93|-|42.95|5.15|1.88|3.27|-|100%|U.S.A.| |10|Diligenta Limited|GBP|92.502121|111.00|705.40|1414.97|598.57|409.02|2175.51|234.21|51.22|182.99|-|100%|U.K.| |11|Diligenta 2 Limited|GBP|92.502121|0.01|72.58|107.05|34.46|-|223.45|(8.56)|(1.83)|(6.73)|-|100%|U.K.| |12|Tata Consultancy Services Canada Inc.|CAD|49.115062|34.70|212.99|749.33|501.64|-|2656.14|295.07|76.28|218.79|171.90|100%|Canada| |13|Tata America International Corporation|USD|62.577500|1.25|1462.31|9808.85|8345.29|118.79|43277.65|1163.33|416.25|747.08|782.22|100%|U.S.A.| |14|MS CJV Investments Corporation|USD|62.577500|8.79|-|8.79|-|8.79|-|-|-|-|-|100%|U.S.A.| |15|Tata Consultancy Services Asia Pacific Pte Ltd.|USD|62.577500|27.53|560.96|915.29|326.80|423.20|1895.61|87.37|13.92|73.45|-|100%|Singapore| |16|Tata Consultancy Services (China) Co., Ltd.|CNY|10.092657|203.81|(73.46)|185.15|54.80|-|383.75|(18.11)|-|(18.11)|-|90%|China| |17|Tata Consultancy Services Japan, Ltd.|JPY|0.521067|225.49|432.41|1374.21|716.31|-|2402.49|171.04|75.64|95.40|-|51%|Japan| |18|Tata Consultancy Services Malaysia Sdn Bhd|MYR|16.892293|3.38|73.41|116.66|39.87|0.01|189.06|29.62|7.91|21.71|-|100%|Malaysia| |19|PT Tata Consultancy Services Indonesia|IDR|0.004787|0.48|32.77|46.75|13.50|-|61.64|23.09|6.11|16.98|-|100%|Indonesia| |20|Tata Consultancy Services (Philippines) Inc.|PHP|1.400007|1.20|87.27|203.53|115.06|-|376.04|53.51|1.49|52.02|-|100%|Philippines| |21|Tata Consultancy Services (Thailand) Limited|THB|1.923627|1.54|8.45|16.83|6.84|-|28.74|4.63|1.11|3.52|-|100%|Thailand| |22|Tata Consultancy Services Belgium S.A.|EUR|67.133156|1.27|113.63|392.57|277.67|0.01|717.83|90.00|29.98|60.02|67.13|100%|Belgium| |23|Tata Consultancy Services Deutschland GmbH|EUR|67.133156|1.01|114.41|486.29|370.87|-|1524.60|65.18|20.87|44.31|-|100%|Germany| |24|Tata Consultancy Services Sverige AB|SEK|7.233473|0.07|126.86|593.59|466.66|-|1132.90|90.57|20.01|70.56|52.08|100%|Sweden| |25|Tata Consultancy Services Netherlands BV|EUR|67.133156|443.08|829.73|1465.21|192.40|962.63|1450.72|259.55|64.93|194.62|-|100%|Netherlands| |26|TCS Italia SRL|EUR|67.133156|14.77|(6.30)|78.85|70.38|-|163.29|5.42|3.56|1.86|-|100%|Italy| # Statement pursuant to first proviso to sub-section (3) of section 129 of the Companies Act 2013, read with rule 5 of Companies (Accounts) Rules, 2014 # in the prescribed Form AOC-1 relating to subsidiary companies |Sr. No.|Name of the Subsidiary Company|Reporting Currency|Exchange Rate|Share Capital|Reserves & Surplus|Total Assets|Total Liabilities|Turnover before Taxation|Profit after Taxation|Profit %|Proposed Dividend|% of Shareholding|Country| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |27|Tata Consultancy Services Luxembourg S.A.|EUR|67.133156|37.59|(23.44)|87.01|72.86|-|126.96|1.61|(0.41)|2.02|-|100%|Capellen (G.D. |
de Luxembourg)| | |28|Tata Consultancy Services Switzerland Ltd.|CHF|64.234757|9.64|74.06|447.00|363.30|48.18|1149.78|9.10|(7.24)|16.34|-|100%|Switzerland| | |29|Tata Consultancy Services France S.A.S.|EUR|67.133156|2.01|(36.86)|237.97|272.82|-|451.81|(9.34)|2.11|(11.45)|-|100%|France| | |30|Tata Consultancy Services Osterreich GmbH|EUR|67.133156|0.23|2.40|9.22|6.59|-|20.65|1.03|0.26|0.77|-|100%|Austria| | |31|Tata Consultancy Services Danmark ApS|DKK|8.988954|0.90|36.46|46.25|8.89|-|40.68|1.50|0.38|1.12|1.80|100%|Denmark| | |32|Tata Consultancy Services De Espana S.A.|EUR|67.133156|0.40|(93.22)|114.93|207.75|0.04|211.13|(14.50)|-|(14.50)|-|100%|Spain| | |33| |Tata Consultancy Services Portugal Unipessoal Limitada|EUR|67.133156|0.04|(7.43)|14.03|21.42|-|19.50|(4.26)|-|(4.26)|-|100%|Portugal| |34|Alti S.A.|EUR|67.133156|2.46|10.35|571.00|558.19|98.01|700.80|(134.63)|5.68|(140.31)|-|100%|France| | |35|Alti HR S.A.S.|EUR|67.133156|0.25|10.91|22.76|11.60|-|7.16|(0.55)|(0.02)|(0.53)|-|100%|France| | |36| |Tescom (France) Software Systems Testing S.A.R.L.|EUR|67.133156|0.67|(6.21)|17.76|23.30|-|16.64|(2.11)|-|(2.11)|-|100%|France| |37|Alti Switzerland S.A.|CHF|64.234757|0.55|8.55|20.26|11.16|-|50.08|1.30|0.42|0.88|-|100%|Switzerland| | |38|Alti Infrastructures Systemes & Reseaux S.A.|EUR|67.133156|0.34|0.84|21.58|20.40|-|11.72|(2.13)|(0.04)|(2.09)|-|100%|France| | |39|Alti NV|EUR|67.133156|5.50|13.98|37.46|17.98|0.20|81.35|(1.35)|(0.03)|(1.32)|-|100%|Belgium| | |40|Teamlink|EUR|67.133156|0.42|(0.52)|(0.18)|(0.08)|-|2.98|(0.30)|-|(0.30)|-|100%|Belgium| | |41|Planaxis Technologies Inc.|EUR|67.133156|-|48.08|106.18|58.10|-|86.28|18.54|3.10|15.44|-|100%|Canada| | |42|Tata Consultancy Services (Africa) (PTY) Ltd.|ZAR|5.119693|7.17|0.01|7.21|0.03|6.91|-|4.48|0.01|4.47|4.66|100%|South Africa| | |43| |Tata Consultancy Services (South Africa) (PTY) Ltd.|ZAR|5.119693|9.22|55.37|155.95|91.36|-|438.45|15.64|3.10|12.54|5.99|75%|South Africa| |44|TCS FNS Pty Limited|AUD|47.552642|177.18|(23.90)|163.45|10.17|159.53|-|(20.48)|-|(20.48)|-|100%|Australia| | |45|TCS Financial Solutions Beijing Co., Ltd.|CNY|10.092657|1.95|(20.48)|56.62|75.15|-|65.82|7.01|-|7.01|-|100%|China| | |46| |TCS Financial Solutions Australia Holdings Pty Limited|AUD|47.552642|66.24|(19.22)|47.02|-|1.79|-|-|-|-|-|100%|Australia| |47|TCS Financial Solutions Australia Pty Limited|AUD|47.552642|0.01|29.49|119.58|90.08|1.53|58.84|34.91|5.34|29.57|-|100%|Australia| | |48|PT Financial Network Services|USD|62.577500|0.38|(1.25)|0.28|1.15|-|-|(0.82)|-|(0.82)|-|100%|Indonesia| | |49|TCS Iberoamerica SA|UYU|2.432556|615.88|386.25|1119.05|116.92|1119.01|-|1.61|-|1.61|-|100%|Uruguay| | |50|TCS Solution Center S.A.|UYU|2.432556|37.70|(49.34)|208.81|220.45|-|311.30|(71.70)|4.13|(75.83)|-|100%|Uruguay| | |51|Tata Consultancy Services Argentina S.A.|ARS|7.099462|29.91|(13.69)|56.28|40.06|-|74.70|(9.47)|-|(9.47)|-|99.99%|Argentina| | # Statement pursuant to first proviso to sub-section (3) of section 129 of the Companies Act 2013, read with rule 5 of Companies (Accounts) Rules, 2014 # in the prescribed Form AOC-1 relating to subsidiary companies # Annual Report 2014-15 # (` crores) |Sr.No|Name of the Subsidiary Company|Reporting Currency|Exchange Rate|Share Capital|Reserves & Surplus|Total Assets|Total Liabilities|Turnover before Taxation|Profit after Taxation|Profit %|Proposed Dividend|% of Shareholding|Country| | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |52|Tata Consultancy Services Do Brasil Ltda|BRL|19.377439|262.84|(262.76)|241.31|241.23|-|318.17|(56.00)|-|(56.00)|-|100%|Brazil| |53|Tata Consultancy Services De Mexico S.A., De C.V.|MXN|4.083254|1.07|375.91|745.77|368.79|-|1124.54|86.71|14.51|72.20|-|100%|Mexico| |54|Tata Consultancy Services Chile S.A.|CLP|0.099778|169.59|342.58|612.20|100.03|55.91|405.17|35.82|(1.61)|37.43|-|100%|Chile| |55|TCS Inversiones Chile Limitada|CLP|0.099778|152.56|164.25|320.67|3.86|320.55|-|0.81|0.03|0.78|-|99.99%|Chile| |56|TATASOLUTION CENTER S.A.|USD|62.577500|18.78|173.73|394.20|201.69|-|677.91|132.63|29.25|103.38|43.80|100%|Ecuador| |57|TCS Uruguay S.A.|UYU|2.432556|0.13|63.27|97.40|34.00|0.02|198.41|34.94|1.34|33.60|5.95|100%|Uruguay| |58|MGDC S.C.|MXN|4.083254|0.02|67.17|206.49|139.30|-|709.14|32.77|19.18|13.59|-|100%|Mexico| |59|Tata Consultancy Services Qatar S.S.C.|QAR|17.186427|3.44|33.31|67.59|30.84|-|139.68|17.27|1.74|15.53|-|100%|Qatar| |60|TCS Foundation|INR|1.000000|1.00|145.44|146.44|-|-|145.44|145.44|-|145.44|-|100%|India| # Notes: 1. Indian rupee equivalents of the figures given in foreign currencies in the accounts of the subsidiary companies, are based on the exchange rates as on March 31, 2015. 2. The reporting period for all the subsidiaries is March 31, 2015. 3. On July 1, 2014, Nippon TCS Solution Center Limited got merged with Tata Consultancy Services Japan Ltd. 4. WTI Advanced Technology Limited, a wholly owned subsidiary, was amalgamated with the Company vide Court Order dated March 27, 2015. 5. On August 7, 2014, Tata Consultancy Services Morocco SARL AU, a wholly owned subsidiary, has been voluntarily liquidated. 6. On February 18, 2015, Computational Research Laboratories Inc., a wholly owned subsidiary, has been voluntarily liquidated. 7. On March 23, 2015, TCS Management Pty Ltd., a wholly owned subsidiary of TCS FNS Pty Limited, has been voluntarily liquidated. # For and on behalf of the Board Cyrus Mistry N. Chandrasekaran Prof. Clayton M. Christensen Chairman CEO and Managing Director Director Aman Mehta Ishaat Hussain V. Thyagarajan Director Director Director Dr. Ron Sommer Dr. Vijay Kelkar Phiroz Vandrevala Director Director Director O. P. Bhatt Aarthi Subramanian Rajesh Gopinathan Director Executive Director Chief Financial Officer Suprakash Mukhopadhyay Company Secretary Mumbai, April 16, 2015 CIN: L22210MH1995PLC084781 Registered Office: 9th Floor, Nirmal Building, Nariman Point, Mumbai 400 021 Phone: 91 22 6778 9595 Fax: 91 22 6778 9660 E-mail: [email protected] Website: www.tcs.com # ATTENDANCE SLIP (To be presented at the entrance) # 20TH ANNUAL GENERAL MEETING ON TUESDAY, JUNE 30, 2015 AT 3.30 P.M. at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400 020 Folio No. _________________________________ DP ID No. _________________________________Client ID No. _________________________________ Name of the Member_________________________________________________________________Signature ___________________________________ Name of the Proxyholder______________________________________________________________Signature___________________________________ 1. Only Member/Proxyholder can attend the Meeting. 2. Member/Proxyholder should bring his/her copy of the Annual Report for reference at the Meeting. CIN: L22210MH1995PLC084781 Registered Office: 9th Floor, Nirmal Building, Nariman Point, Mumbai 400 021 Phone: 91 22 6778 9595 Fax: 91 22 6778 9660 E-mail: [email protected] Website: www.tcs.com # PROXY FORM [Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014] Name of the Member(s) : ....................................................................................................................................................................................... Registered address : ....................................................................................................................................................................................... E-mail Id : ....................................................................................................................................................................................... Folio No. / Client ID No. : ..............................................................................................DP ID No. ....................................................................... I / We, being the member(s) of ………..............…. Shares of Tata Consultancy Services Limited, hereby appoint 1. Name: ………………………...................................................................................... E-mail Id: ...................................................................... Address: ................................................................................................................... .................................................................................................................................. Signature: ……………................................................... 2. or failing him 3. Name: ………………………...................................................................................... E-mail Id: ...................................................................... Address: ................................................................................................................... .................................................................................................................................. Signature: ……………................................................... 4. or failing him 5. Name: ………………………...................................................................................... E-mail Id: ...................................................................... Address: ................................................................................................................... .................................................................................................................................. Signature: ……………................................................... as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the twentieth Annual General Meeting of the Company to be held on Tuesday, June 30, 2015 at 3.30 p.m. at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400 020 and at any adjournment thereof in respect of such resolutions as are indicated below: 1. |
To receive, consider and adopt (a) the Audited Financial Statements of the Company for the financial year ended March 31, 2015, together with the Reports of the Board of Directors and the Auditors thereon; and (b) the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2015, together with the Report of the Auditors thereon. 2. Confirmation of payment of Interim Dividends (including a special dividend) and declaration of Final Dividend on Equity Shares for the financial year 2014-15. 3. Re-appointment of Mr. Cyrus Mistry as a Director of the Company. 4. Appointment of Auditors. 5. Re-appointment of Mr. N. Chandrasekaran as Chief Executive Officer and Managing Director of the Company. 6. Appointment of Ms. Aarthi Subramanian as a Director of the Company. 7. Appointment of Ms. Aarthi Subramanian as an Executive Director of the Company. 8. Appointment of Branch Auditors. Signed this ……… day of ………………. 2015 Signature of shareholder.................................................................... Signature of Proxyholder(s)............................................................................ # NOTES: 1. This Form in order to be effective should be duly completed and deposited at the Registered Office of the Company at 9th Floor, Nirmal Building, Nariman Point, Mumbai 400 021, not less than 48 hours before the commencement of the Meeting. 2. Those Members who have multiple folios with different jointholders may use copies of this Attendance slip/Proxy. # AWARDS # BUSINESS LEADERSHIP - Forbes: World's 100 Most Innovative Companies - Finance: Fastest growing IT Brand industry brand over the last five years - Achieves Superbrands status in the UK - The Economic Times: Company of the Year - Gold Stevie: Best Human Resources Department 2014 - Top Employers Institute: Certified as Top Employer North America 2015 - Whitelane Research Europe Survey: Ranked #1 on performance & customer satisfaction - Business Standard: Best Company of 40 years - Top Employers Institute: Ranked # 1 Employer in Europe - Top Employers Institute: Ranked # 1 Employer in UK - Golden Peacock National Training Award 2014 - Six awards at Asia's Best Employer Brand Awards 2014, Singapore - Diversity and Inclusion (DANDI) awards: Top Workforce honour - TCS BaNCS won Global Custodian award for Best Custody second time in a row - NASSCOM 2014 Awards: Excellence in Gender Inclusivity & Best IT Services and Product Company - NASSCOM Silver Jubilee Awards: Leading IT Company for 25 years - National Award for e-Governance (Gold Award): Passport Seva for Outstanding Performance in Citizen-centric Service Delivery - World HRD Congress RASBIC awards: Best Overall Recruiting & Staffing Organization & Best Use of Technology for Recruiting # SUSTAINABILITY PARTNER - Gold Stevie: Corporate Social Responsibility Program - Informatica: Innovation Award for Test Data Management - JSW-Times of India: Earth Care Award - SAP: Run SAP Partner of the Year & Customers' Choice Award (SAP Pinnacle) - Lumity Community Corps Corporate Champion: Enhancing quality of STEM Education - Renault-Nissan: Best Service Support 2014 Award - NXP Semiconductors: Best Supplier for Indirect Services - TESTA 2014: Leading Vendor Award for Quality Assurance(QA) and Testing services - Dow Jones Sustainability World Index: Ranked Global Leader - Asian Sustainability Ranking: Ranked #1 of Top 100 Companies - The CDP Climate Performance Leadership Index: A-List world leader in corporate action on climate change - JD Edwards: Partner Excellence award - CA Technologies: Country Partner of the Year - Partner of the Year - Security solutions - Public Sector Partner of the Year # LEADERSHIP - N Chandrasekaran: - CNN-IBN: Indian of the Year (Business) - Finance Asia's Best Companies Poll: India's Best CEO - Institutional Investor's 2014 All-Asia Executive Team Rankings: Best CEO - Business Today: Best CEO - CNBC TV 18: Voted one of India's Top 15 business icons Produced and designed by Corporate Marketing and Corporate Communications, Tata Consultancy Services NO_CONTENT_HERE File: AR_TCS_2015_2016.md # TATA # TCS SE 71/2016-17 July 1, 2016 Exchange Plaza, Bandra Kurla Complex; National Stock Exchange of India Limited BSE Limited P. J. Towers, Dalal Street; Mumbai Kind Attn: Manager, Listing Department Kind Attn; General Manager Department of Corporate Services Scrip Code No. |
532540 (BSE) Dear Sirs, # Subi Anqual Report 2015-16 Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are submitting herewith the Annual Report of the Company for the financial year 2015-16 approved and adopted by the members at the 21st Annual General Meeting of the Company held on Friday, June 17, 2016 at 3.30 p.m: as per the provisions of the Companies Act, 2013, at the Sabhagar; 19, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400 020. The above is also uploaded on the Company's website; Thanking you; Yours faithfully For Tata Consultancy Services Limited Suprakash Mukhopadhyay Vice President and Company Secretary Encl: As above cc; 1. National Securities Depository Limited Trade World; 8th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 2. Central Depository Services (India) Limited P.J. Towers, Dalal Street; Mumbai 400 001 3. TSR DARASHAW Limited # TATA CONSULTANCY SERVICES Tata Consultancy Services Limited Maker Towers Block I 11th Floor Cuffe Parade Colaba Mumbai 400 005 India Tel: +91 22 6778 9191 Fax: +91 22 6639 1836 Email: [email protected] Website: www.tcs.com Registered Office: 9th Floor Nirmal Building Nariman Point Mumbai 400 021 Corporate Identification No (CIN): L22210MH1995PLC084781 Experience certainty: # TCS Sahyadri Park, Pune # SHAPING THE FUTURE The digital technologies of mobility, big data, analytics, cloud computing, artificial intelligence, and robotics are creating a dematerialized and hyperconnected world. To succeed, companies will have to be agile and create products that are experience rich. TCS is working with the world's largest companies to help them reimagine their business models, products and services, and workplaces in all industries. With more than one-third of our workforce trained in over 400 digital platforms and technologies, we are guiding companies of today on the path to tomorrow. Cover image: TCS Siruseri, Chennai The Annual General Meeting will be held on Friday, June 17, 2016, at Birla Matushri Sabhagar, Sir V.T. Marg, New Marine Lines, Mumbai 400020, at 3.30 p.m. As a measure of economy, copies of the Annual Report will not be distributed at the Annual General Meeting. Members are requested to bring their copies to the meeting. |
# Notice # Directors' Report # Management Discussion and Analysis # Corporate Governance Report # Business Responsibility Report # Content |Board of Directors|02|Consolidated Financial Statements| | | |---|---|---|---|---| |Management Team|04|Auditors' Report|146| | |Performance by Numbers|06|Consolidated Balance Sheet|150| | |Letter from CEO|08|Consolidated Statement of Profit and Loss|151| | |Shaping the Future - Retail, BFSI, Life Sciences, India, Innovation| |12|Consolidated Cash Flow Statement|152| |Building a Digital learning Platform|22|Notes forming part of the Consolidated Financial Statements|154| | |Digital Talent Pipeline|23|Unconsolidated Financial Statements| | | |From Employee Experience to ENGAGEMENT|24|Auditors' Report|188| | |Transforming India's Oldest Public Healthcare Institutions|25|Balance Sheet|194| | |Impacting the Community - Swachh Bharat|26|Statement of Profit and Loss|195| | |Taking STEM to grassroots|27|Cash Flow Statement|196| | |Building a Healthy Active Community|28|Notes forming part of the Financial Statements|197| | |Awards|29|Statement under Section 129 of the Companies Act, 2013 relating to subsidiary companies|232| | |Route Map to the AGM Venue|32|Attendance Slip / Proxy Form|235| | | | |Updation Form|237| | # Board of Directors |(Standing - Left to Right)| |(Seated - Left to Right)| | | | |---|---|---|---|---|---| |A Mehta|V Thyagarajan|P A Vandrevala|V Kelkar|N Chandrasekaran|C P Mistry| |Director|Director|Director|Director|Chief Executive Officer|Chairman & Managing Director| # 02ITCS Annual Report2015-16 # TCS Annual Report 2015-16 |(Standing - Left to Right)| |(Seated - Left to Right)| | | |---|---|---|---|---| |O P Bhatt|R Sommer|I Hussain|Aarthi Subramanian|C M Christensen| |Director|Director|Director|Executive Director|Director| # Management Team # Corporate |N Chandrasekaran|Aarthi Subramanian|Rajesh Gopinathan|Ajoyendra Mukherjee| | |---|---|---|---|---| |Chief Executive Officer|Global Head of Delivery Excellence, Governance & Compliance|Chief Financial Officer|Global Head, Human Resources| | |Suprakash Mukhopadhyay|John Lenzen|Pradipta Bagchi|K Ananth Krishnan|Vishwanathan Iyer| |Company Secretary|Marketing|Communication|Research & Development|Legal| # Geography Heads |Surya Kant|Henry Manzano|Ravi Viswanathan|Girish Ramachandran|AS Lakshminarayanan| |---|---|---|---|---| |North America, UK & Europe|Latin America|India, Middle-East & Africa|Asia Pacific|Japan| # Strategic Growth Unit Heads |NG Subramaniam|Venguswamy Ramaswamy| |---|---| |Financial Solutions|iON| 04 TCS Annual Report 2015-16 # Industry Service Unit Heads |K Krithivasan|Susheel Vasudevan|Ramanamurthy Magapu|Suresh Muthuswami| |---|---|---|---| |Banking & Financial Services|Banking & Financial Services|Banking & Financial Services|Insurance & Healthcare| |Pratik Pal|Debashis Ghosh|Milind Lakkad|Kamal Bhadada| |Retail, Travel & Consumer Products|Life Sciences, Manufacturing & Energy|Manufacturing|Communication, Media & Information Services| # Service Unit Heads |Krishnan Ramanujam|Regu Ayyaswamy|Dinanath Kholkar|P R Krishnan| |---|---|---|---| |Enterprise Solutions & Global Consulting Practice|Engineering & Industrial Services|Business Process Services|IT Infrastructure Services| |Siva Ganesan|Satya Ramaswamy| | | |Assurance Services|Digital Enterprise Services & Solutions| | | TCS Annual Report 2015-16 05I # Performance by Numbers |Net Income| |24,292 CR| | |---|---|---|---| |EBIT/Operating Income|26.4%*| | | |Net Cash from Operations| |21,581 CR| | |Revenue Growth|1,08,646 CR|UP 14.8%| | | | |CAPEX|2,024 CR| |Global Corporate Social Responsibility| | | | |Invested Funds|32,534 CR| | | |Dividends (Includes proposed dividend)| |10,220 CR| | |Revenue per Employee|30,70,464|29,60,946| | |Profit per Employee|6,86,514|6,85,482| | |FY 2015|FY 2016| | | Excludes employee rewards Percentage of revenues 06 I TCS Annual Report 2015-16 # People by Numbers |Total Employees|Women Employees|New Joinees|Nationalities| |---|---|---|---| |3,50,000+|1,15,000+|90,000+|125+| TCS Annual Report 2015-16 I 07 # Letter from the CEO "deep understanding of the customer landscape, Our rich customer base, domain expertise and technology investments and IP combined with our global scale puts us in pole position to make a significant impact in the Digital world." # Dear Shareholders, Your Company delivered a strong performance during 2015-16 and crossed the trillion rupee revenue milestone, with reported revenues of `1,08,646 crore at an annual growth of 14.8 per cent. Operating margins were an industry benchmark at 26.4 per cent for the year, well within our target range of 26-28 per cent. TCS remained the most profitable company in the Indian IT services industry posting net margins of 22.4 per cent and annual net profit of `24,292 crore. This performance has enabled your Company to retain its position as the most valuable company in India with a market capitalisation of `4,95,770 crore (US$ 74.84 billion) as on March 31, 2016. We have continued our practice to consistently reward our shareholders. In FY16, our total dividend pay-out was `43.50 per share including `27 per share proposed as final dividend. The earnings per share for the company increased to `123.28. # Strong Core Performance Your Company's customer-centric business model and its philosophy in building new capabilities has led to increased participation in our customers' IT spend. The core business portfolio has performed very well with all key segments posting steady growth led by Banking & Financial Services, Retail, Manufacturing and Life Sciences - all these industries grew above the company average growth rate on a constant currency basis. |
# Market Growth In terms of markets, growth was well distributed with North America growing 10.8 per cent, Europe by 12.9 per cent and United Kingdom by 8.3 per cent in constant currency terms. India crossed $ 1 billion milestone in annual revenues while overall revenues from new Growth Markets exceeded $ 3.3 billion on in FY16. # Challenges There were some headwinds in the business environment for your Company. Adverse cross currency movements severely impacted the reported US$ revenue of 16.55 billion by 4.8 per cent. This resulted in lower US$ revenue growth of 7.1 per cent year-on-year compared to 11.9 per cent growth in constant currency terms. Diligenta, our life and pensions subsidiary in the UK continued to experience some slowdown while the broader insurance vertical also remained weak. Our investment in Japan is yet to pick up momentum. # Employee Growth Your Company's talent development initiatives continued to support business growth. At the end of FY16, TCS had a diverse base of 3,53,843 employees in 55 countries from 129 nationalities including 33.8 per cent women professionals. We continued to enjoy the highest retention in the industry at 14.7 per cent. cent LTM (last 12 months) for IT professionals. Our employee engagement programs like Fit4Life, Purpose4Life and SafetyFirst are helping create awareness about health and fitness as well as enabling our employees to engage with the community to make a positive impact. It is the commitment and dedication of these TCSers across the world that has helped your Company perform on a sustained basis. On behalf of all the shareholders, I would like to thank every TCSer for their drive and passion that has helped this organisation maintain its growth and momentum. Today, customers see your Company as a partner of choice for their transformation initiatives. This is evident from the strength of the customer revenue metrics which have shown exceptional improvement in FY16. We added eight new customers in the $100+ million band taking the total to 37 customers, while 37 new customers were added in the $10+ million band totalling 298 customers. Our customer satisfaction scores also reached an all-time high, reflecting this trend. Smart Enterprises are quick to recognise that in a Digital world, experience supercedes features. This was not the case even five years ago, when we would buy a product based on its features alone without even opening the box! But now it's the experience of the product or service that determines our buying behaviour. The reason we focus on experience today is because new features are only one software release away. Whatever the product, be it a smart watch or even a car, every software release brings new and enriched features. For a Smart Enterprise to respond in real-time or ahead of time requires dematerialisation of an enterprise where physical assets now have a Digital interface. Once dematerialised, all enterprise's assets - technology, infrastructure, operations, logistics, customer data and content - become software driven and therefore now available for seamless correlation and deriving proactive insights. For example, as goods from cars to cans become more 'intelligent', a dematerialised smart enterprise can execute, respond, plan and predict in real-time using insights gleaned from big data. # Digital Technology Trends Demand for our services is being driven by the acceleration in the adoption of Digital. Digital is creating new opportunities for enterprises to drive Efficiency and Simplification across the business. Most brick and mortar businesses were built in a pre-digital era. Therefore, to thrive in the Digital economy, enterprises are on a quest to deliver unique customer experiences, gain real-time access to insights, improve workforce productivity and create a hyper-connected eco-system. The impact of "Digital Technologies" has further intensified in the past twelve months. We are living in a digital age, characterised by an accelerating trend of hyper-connectivity between humans and also between humans and smart devices. As you go through this annual report, we have attempted to showcase some of the key technology and business trends that are shaping the future of TCS and that of our customers. The digital world we inhabit today has very different characteristics from what we have seen in the past. It is forcing all of us - individuals, enterprises and governments - to learn new ways to engage with our stakeholders. In addition, widespread adoption of Digital technologies by business is leading to the evolution of the Smart Enterprise - companies that can respond in real time and provide unique personalised experiences for its customers. |
To succeed, Smart Enterprises have to be Agile by default. Agility is the ability of an enterprise to move with speed and respond to changes in its environment swiftly (for example, when launching new products). Your Company is proactively increasing its use of Agile/ DevOps (Development + Operations) methodologies to radically decrease the time to market of new solutions, while bringing about greater collaboration between IT and business. Further, to make sense of voluminous and unstructured data that is increasing exponentially, Smart Enterprises are using Artificial Intelligence technologies for developing machine learning and deep learning capabilities. Software robots are playing a bigger role in our lives - from algorithmic trading and advisory services in financial markets to mapbots which give us daily driving directions. Additionally, cloud-based models are enabling 'anywhere-anytime-any device' access to data which is creating a significant shift in business models and enterprise IT architectures. # TCS Leadership in the Digital Economy Your Company has been at the forefront of this Digital revolution by making strategic investments across multiple dimensions ahead of time to ensure that we are well equipped to capture this big opportunity. Today, we are Digital partners for 52% of our TCS Annual Report 2015-16 I 09 # Forbes # The WORLDS MOST INNOVATIVE COMPANIES customers across multiple segments such as Mobility and Pervasive Computing, Cloud, Big Data, Artificial Intelligence & Robotics - all of which have grown at a compounded quarterly growth rate of 8-12 per cent during FY16. We have built the right technology talent combined with deep domain expertise and an understanding of the customer's business. Today's digital enterprises also face an increased exposure to cyber security threats from phishing attacks, Advanced Persistent Threat (APT) and hyper-connected universe, data confidentiality and data sensitivity. TCS has taken proactive steps to combat these threats and ensure uninterrupted service delivery to customers. We also continue to reinforce our stringent security policies and procedures. # Driving Research & Innovation The Digital economy and disruptions in technologies are changing the skills requirements in our industry. Recognising the need to build the right Digital talent, your Company has made significant investments to upgrade skills of its employees as well as increase its focus on hiring specialised talent. TCS has created a world-class Digital Learning Platform - an integrated ecosystem that combines virtual, physical and experiential learning with high quality content that is available anywhere, anyplace, anytime and on any device. I am delighted to share that we have trained over 1,20,000 TCSers in multiple digital technologies during FY16. Your Company remains focused on Intellectual Property creation. At the end of FY16, the company has applied for 2,842 patents cumulatively, including 565 applied during the past 12 months, of which the company has been granted 341 patents. Digital transformations entail new ways of collaboration among teams that consist of players with multiple niche skills - from design to psychology - in order to deliver a 'customer-first' experience. Towards this, we have invested in a new Design Studio in Silicon Valley, staffed with top notch professionals with diverse skill sets. It is a collaborative space where customers can co-create with TCS in a typical start-up 'garage' environment. A new executive briefing centre was also launched for next-generation engagement with customers using immersive technologies in Mumbai. Your Company's significant investments in Digital has resulted in a growing portfolio of Digital products and platforms. TCS' strategic bets in TCS Bancs for Financial Services and iON for the Education sector have performed well. We also continue to invest in digital platform solutions for key industries, horizontal functions (Account Payable, HR) as well as technology assets. The new cloud platforms together delivered $172 million in revenues in FY16, a growth of 37 per cent year on year. In June last year, we launched ignio, our flagship automation product for enterprise IT that helps customers analyse, plan and predict their IT needs. With its cognitive capabilities, ignio is technologically an advanced enterprise automation product in the market. Within nine months of its launch it had signed up 16 customers. TCS has also filed 24 patents for ignio till date. Additionally, we continue to build our strategic academic partnerships. In FY16 your Company made a US$35 million gift to Pittsburgh-based Carnegie Mellon University, which was the all-time largest corporate gift to the university and the largest gift from outside the U.S. This donation will fund a new 40,000 square feet facility, the TCS Building, which will support education, cutting-edge research and house state-of-the-art facilities. |
In India, your Company also announced plans to set up the FC Kohli Center on Intelligent Systems at IIIT Hyderabad which will coordinate research in related domains across different centres of the university. In March, in collaboration with Nashik city and MIT Media Labs, your Company began a unique social innovation program. The TCS Digital Impact Square is an open Social Innovation Platform to address real life challenges by engaging with students and. # Beyond Business: Key Social Initiatives Your Company made a significant impact in the community with new programs and initiatives. TCS stepped forward to extend its support towards the 'Swachh Bharat, Swachh Vidyalaya' initiative, announced by India's Prime Minister Shri Narendra Modi on August 15, 2014. As the largest corporate contributor to the program, your Company has built dedicated toilets for girl students in 1,472 schools in Andhra Pradesh, Telangana, Bihar and Tamil Nadu, changing lives of over 80,000 students in the process by giving them the opportunity to live a healthy childhood and gain an education. Another landmark initiative was the social transformation of All India Institute of Medical Sciences - India's pre-eminent public healthcare institution - where using process re-engineering and technology, a TCS team worked tirelessly for six months to re-engineer and deploy new processes to reduce waiting times by 66 per cent to less than two hours benefitting over three million patients annually. The TCS STEM (Science, Technology, Engineering, Math) program expanded its reach, inspiring young minds. It is designed to empower students to master digital technologies through innovative technology learning platforms. TCS contributed to US2020 program to launch a new online platform which aims to connect more STEM professionals to grassroots volunteering opportunities, acknowledged by the US White House in a press statement. # Looking ahead As global businesses aspire to become Smart Enterprises by accelerating adoption of digital, your Company is very well positioned in this regard. Our rich customer base, domain expertise and deep understanding of the customer landscape, technology investments and IP combined with our global scale puts us in pole position to make a significant impact in the Digital world. I would like to thank shareholders for all their support and encouragement during the year. With Warm Regards Yours Sincerely N Chandrasekaran Chief Executive Officer and Managing Director April 18, 2016 # Shaping the Future of Retail Retailers are in a world of immense complexity. The next wave of Omni-channel Retailing is focused on Retailer's ability to deliver superior customer experience and instantly deliver on Customer promise every single time. Imagine, a large retailer with 200 million customers, fulfilling 1,50,000+ orders per day- of which 40% are omnichannel (anytime, anywhere orders). It requires the retailer to effectively manage and supply its 2 million Stock Keeping units (SKUs) across 5,000 inventory nodes to fulfil customer orders in <30 minutes. Tough? Thanks to 'Digital', Retailers are adapting quickly. Offering a great price to consumers isn't enough. Smart retailers are using TCS services to build matured capabilities to derive 3,600 Customer Insights (understand their transactions and interactions) and Improved Visibility into the Omni-channel Supply Chain. They are leveraging this powerful knowledge of the customer to drive customer-centric assortment and shopping-trip relevant pricing. Retailers are fighting the war of the last mile. Customers can order online, pick in store, ship from store, collect in-store partial deliveries and so much more. Successful delivery of customer promise requires a high level of inventory visibility in real time with the ability to orchestrate the customer order through the various inventory carrying points. # Partner to7/10 # Top US Retailers # Partner to8/10 # Top UK Retailers # Partner to10 out of15 # BUY # ANYTIME/ # INSTANT # CHECKOUT # BUTTON # ANYWHERE # PRICE MATCH # DISRUPTION # Top Digital IQ Retailers With TCS, retailers are re-defining and re-architecting their supply chain to realize the multi-channel inventory management and delivering flexible fulfilment options to the customer. There is 30% less wait time at stores and 40% higher sales through digital channels. What if you always found what you were looking for in your store, at the price that you wanted with the flexibility of the online orders - that's what makes a great customer experience. It requires a strong ability for the retailer to have the right assortment, at the right store and at the right price. TCS' industry leading platforms OptumeraTM and OmnistoreTM help in optimizing store space and assortment with competitive pricing, while also enabling truly omnichannel shopping journeys. |
TCS Annual Report 2015-16 I13 # Shaping the Future of BFSI The slow growth in advanced economies, changing nature of emerging markets, Central bank trials with monetary policies and increasing vigilance by Regulators continue to challenge growth in Financial Service firms. Further, technology continues to lower the barriers for entry and has given rise to Fintech companies that are offering payment solutions, peer-to-peer services and even advisory services. The Banks are investing significantly in technology (aka Digital is Default) to managing this volatility, to address experience gaps, to pursue newer sources of revenue and to improve operational efficiency and agility. Millennial HNIs have the wealth but not the time. TCS has created a Robo Advisory solution that offers automated, sophisticated, personalized and adaptive investment advice. Based on the risk preferences and the performance of the recommended portfolio, the Robo Advisor would adapt the advice. This solution has helped banks in attracting new customers to their fold. Insurance companies have tried to install telematics devices in their consumers' vehicles but haven't found favour. TCS has reimagined the scenario by leveraging the ubiquitous smartphone. We developed a comprehensive solution - using the distributed power of smartphone - that captures telematics data on speed, braking, lane changes to understand driving behaviour and the quality of driving. This helped the insurer in having a high quality engagement with customers and in reducing premiums by 14% for better drivers. 14 ITCS Annual Report 2015-16 # Banks and Regulatory Environment Banks continue to face a dynamic regulatory environment. They need a single source of truth to make compliance efficient. TCS developed the World's largest cloud cluster (500+ Nodes) to help one of its customers to simplify its Information flows for an accelerated data quality compliance and a significant improvement in data governance. The Bank is, now, successfully using this for reaping the benefits through a single view of customer and improved Fraud Detection. # Adapting to New Experiences Banks have the customers but need to continuously adapt to newer experiences being provided by other industries (including Social). TCS helped DNB, the largest financial services group in Norway, launch Vipps, a peer-to-peer mobile payments application. Vipps makes money transfers as easy as sending an SMS. While shaping the peer-to-peer money movement market, Vipps has become the #1 downloaded App in Norway. Approximately 25% of Norway's population uses 'Vipps', and 85% of Norwegians know about it. TCS Annual Report 2015-16 I15 # Shaping the Future of Life Sciences Engineers are the new doctors! With Digital technologies, it is possible to accelerate drug discovery, develop personalised medicine and craft personalised medical implants. This is improving patient outcomes in significant ways and improving their quality of life. Using TCS IP, Advanced Drug Development (ADD) platform, pharmaceutical companies are boosting R&D productivity. One of our customers was able to realize multi million dollar savings by carrying out 35+ Studies in just 2 years, supporting 4,300+ study sites & 21,000+ patients. Customer plans to onboard many more studies by this year-end. Knee implants can improve quality of life but they can be very painful with long recovery times for patients. TCS' expertise in Digital technologies creates personalised cutting blocks for knee implants that result in 19% less operative time, 31% less blood loss, and more than 26% reduction in patient recovery time. More than 70,000 patients have benefited from these personalized surgeries. 16 ITCS Annual Report 2015-16 Even today we do not understand the genetics of most inherited, rare genetic causes of various immune and metabolic disorders. Disorders such as Ataxia, SCID, Nijmegen Breakage Syndrome, PKU and novel autoimmune disorders have been diagnosed using the platform helping clinicians treat patients more effectively. File: AR_TCS_2015_2016.md Diagnosis of rare and potentially fatal disorders at birth remains a pressing need. Using genome sequencing the TCS GeMS (Genomics and Metagenomics) platform has been used to successfully diagnose the disorders. TCS Annual Report 2015-16 I17 # Shaping the Future of India Consumers are increasingly choosing Digital channels including mobile to buy and consume the products and services they need. This also applies to the way citizens today want to access public services. India has the potential to leapfrog most societies in its use of technology to drive development and growth by using social and technology-based platforms in order to leverage the new digital infrastructure that is rapidly being built and deployed across the country. India today boasts of over a billion mobile connections and its netizens are among the largest user bases on global social platforms. |
The Indian government is driving the 'Digital India' agenda through multiple policies and initiatives - leveraging the Aadhar card to promote cashless transfers to beneficiaries; incentivising the creation of new Smart Cities, or facilitating mobile payments by licensing new 'payments-only' banks. There are multiple initiatives taking place across different strata of the economy and TCS is proud to play a role in many of these facets. # Financial Inclusion Consider policies that have enabled 450 million new 'nofrills' bank accounts to be opened by banks including 216 million through the Prime Minister's Jana Dhan Yojana scheme alone. TCS has been playing a significant part in enabling this vision. TCS platforms and software support 113 million accounts in 102 banks through cost-effective technology delivery models such as Bank-in-Box-on-Cloud, mobility in service delivery, financial gateway to ensure integration, interoperability, transaction and integrity and the remote control of field operations. TCS' impact does not end there. Over 140 rural banks under NABARD use the TCS cloud platform to reach and service over 54 million customers. In addition, India's largest bank, State Bank of India, which runs on TCS BaNCS, now has over 500 million accounts of 1.1 billion accounts in the country. # Digital Assessment India is among the largest markets for examinations and assessments in the world. TCS has been playing a significant part in disrupting the higher education sector to bring in transparency, speed and high quality of assessments and examination. Till date, TCS' iON platform has assessed over 53 million candidates using its network of 4,330+ test centres across 460+ cities resulting in an overall reduction in effort by 70% for controller of Exams and most importantly, a massive reduction in overall cycle time from 8 months to 10 days. Similarly, for board examinations, the iON platform has resulted in 40% reduction in evaluation process time for the three million answer books evaluated as on date with total elimination of transporting physical answer books with 99.99% reduction in re-evaluation requests. TCS has changed the way consumers use mobile payment systems with its mWallet offering implemented with major telecom providers in India. mWallet provides customers with a new form of currency powered from their mobile phones. With millions of customers and a network of over 1,00,000 agents, spread across urban and rural India, mWallet platforms have successfully exploited mobile penetration to provide basic banking services on the mobile. Distribution of wages, government benefits, enabling e-commerce and many more new transactions on mWallet are truly making mobile the new bank account. 18 ITCS Annual Report 2015-16 # Impact in Numbers # Telecom # Banking Solutions |450m|Customers| |---|---| |850m|Bank Accounts| # Social Services 38.1m Beneficiaries # Infrastructure ~40m Users # Citizen Services 2.75m Users Every Month # Disaster Management 400m People Across Coastal Belt # Healthcare 5.5m People Screened # Passports 30m Passports Issued # Income Tax 41.2m Registered Tax Payers TCS Annual Report 2015-16 I19 # Shaping the Future through Innovation # Industry Platforms # Optumera™ The Digital Merchandising Suite helps the world's top retailers optimize store space and choose the correct product mix. It is driving 3-5% sales improvement for our customers. # iON™ Assessment, Learning & Evaluation platform is helping students learn better and exam bodies examine and evaluate candidates efficiently and seamlessly. This product has assessed more than 50 million candidates till date with an 88% reduction in turnaround time. # Advanced Drug Development (ADD) The platform is transforming the clinical trial process for Life Sciences firms. ADD has helped conduct over 100 clinical trials for 7 customers, including for three out of top 10 global pharma companies. # HOBS is a comprehensive business platform for the Telecom industry standards and is enabling growth for 16 of our telecom customers. # World's first Neural Automation System Helping companies reimagine Enterprise IT. ignio™ is a cognitive system that applies AI technologies to convert IT operations services into intelligent software. ignio™ thinks and acts like an expert. It can understand a company's context and then provide appropriate recommendations. Enterprises that use ignio™ improve the speed of decisions and make their business proactive and resilient. ignio™ is the foundation for an AI powered business. |
# Focus areas for Research & Innovation - BFS: Blockchain, Frictionless Access, Robo Advisory - Retail: In-store experience, Digital store operations, Multi-node supply chain - Manufacturing: Connected Cars, Predictive Maintenance - Life Sciences: Genomics, Medical Devices, Digital Clinical Trials # Service Platforms # CloudPlus TCS' solutions suite for cloud infrastructure is driving 60% agility in IT provisioning # CHROMA™ TCS' HR platform to enable next generation employee experience, is gaining strategic traction in the market with five customers using the platform # TAP™ TCS' future ready Accounts Payable Platform has processed over 3 million invoices # Foundational Research Metagenomics, Materials Engineering, Design, Analytics # Governance Compliance, Enterprise Security, Data Privacy # Industry 4.0 Automation, Cognitive computing, IoT Platform # Sustainability Mobile Agro Advisory, Intelligent Cities, Smart Grids TCS Annual Report 2015-16 I21 # Building a Digital Learning Platform The TCS Digital Learning Platform (DLP) is driving the reimagination of talent development at TCS. Through DLP, our entire workforce can access rich and fresh content any time, anywhere, on any device and can learn at their own pace. Today, 90% of learning is delivered through digital channels. Infusion of domain-specific content, curated journeys, case studies and engaging methods such as gamification, role play and hackathons has made it easy for employees to update their skills and learn new ways of working such as Agile & DevOps. TCS iQlass infrastructure is delivering global, real-time immersive learning experience for expert-facilitated sessions. Our approach to align Digital learning to transformative programmes of our customers is gaining strong mindshare amongst our customers as well. # Readiness Factors Tycal tacors Iat may affecl tne business tr Cax Larratrineny Moe and Or # Digital Learning By Numbers # INFRASTRUCTURE - 15 iQlasses across 9 cities - VLabs on TCS Cloud with 25,000 concurrent user capacity with most Digital technologies already enabled # EXPERTISE IN 400+ DIGITAL TOOLS - Big Data & Next gen data platforms & processing engines, covering Hadoop and ecosystem of tools, MongoDB, Spark - Data science, covering popular tools like R, Python - Mobility engineering, covering IoS, Android, Hybrid mobile apps and more - Modern Web frameworks covering Angular.js, node.js, ext.js, Grails, UX technologies - Cloud technologies covering AWS, Azure and platforms such as Bluemix, & Pivotal Cloud Foundry - Digital commerce solutions covering ATG, Hybris, Sterling OMS, Solr search and more - Composite Digital technologies including Internet of Things # Statistics - 83 Digital competencies offered - 1,39,482 employees trained; 3,49,093 competencies - 1,25,000+ Nano Videos - 6,89,518 Learning Days for digital in FY16 # Testimonials "..a very good course that will help both senior leaders who are technologists and non-technologists" "Fantastic efforts from all the faculty, and associates involved in this Channel Architecture training!" "I like what I saw…the content is rich…and this is exactly what we need" "Learning in such a healthy way…It has been a lot of fun" 22 ITCS Annual Report 2015-16 # Digital Talent Pipeline: Spot. Hire. Engage TCS uses social media and gamification tools to hire and engage the best talent from around the world. Campus Commune, the student engagement platform, is used to nurture potential talent from engineering and management institutions. More than 8,00,000 students from 1,000+ Institutions participate actively on it. We use contests such as TESTimony, EngiNx, Game On and CodeVita, the largest one which drew 1,97,000 registrations across 18 countries, to spot and hire top talent. About 10% of the specialised campus recruitment for niche skills happens through such contests. After joining TCS, employees use the internal social networking platform Knome to collaborate and share knowledge. Knome helps break down organisational silos, encourages exchange of ideas amongst different teams and facilitates social learning. |
# Digital Hiring & Engaging By Numbers # Digital recruitment - 1,000+ trees saved with our 100% paperless recruitment process # Gamification - 3,10,000+ registrations received across all contests in FY16 - 30 % new visits week on week on Campus Commune - 17,200+ blogs on Campus Commune - 6,500+ Opinion Polls on Campus Commune # Social - 3,50,000+ employees on internal social channels - 3,22,000+ blogs # Collaboration - 2,500+ communities - 4,000+ ideas - 650+ wikis - 2,800+ surveys # Testimonials "…with Campus Commune we can learn and develop our software skills before entering into the corporate world." - Student "Campus Commune is a place to share many things and gain knowledge from your peers." - Student "CodeVita is a great initiative which brings together numerous talented coders from different countries on one platform." - Participant, CodeVita 2016 "I would like to recommend Code Vita to other students since it's a once in a lifetime experience and very enriching…" - Runners Up, CodeVita 2016 # From Employee Experience to ENGAGEMENT TCS Purpose4life is all about volunteering for societal improvement. Education, Health and Environment are the main focus areas under which initiatives are carried out. # 4 Under this programme, the interested associates take a pledge and commit to volunteer a minimum of 10 hours a year. Initiatives can be created by individuals or they can choose active initiatives in their locations and join the same. TCS Purpose4life programme was launched in 2014-15 and there was a contribution of over 2,21,000 hours of volunteering. This year, 2015-16, we have crossed 6,00,000 hours of volunteering in March 2016. Associates find this a very satisfying way of giving back to the society and the best way of continuing the legacy of the Tatas. There are many dedicated volunteers who volunteer along with their family so that the spirit of social responsibility gets passed on to the coming generations as well. | |Total hours|2,21,307|Total hours|6,12,908| |---|---|---|---|---| | |Education|1,18,749|Education|2,19,263| | |Health|41,039|Health|2,16,270| | |Environment|61,519|Environment|1,77,375| | |Corporate hours|90,949|Corporate hours|1,46,997| | |Self initiative hours|1,30,358|Self initiative hours|4,65,911| | |Number of initiatives|2,302|Number of initiatives|2,868| | |Family hours|16,375|Family hours|29,508| # 2015 - 2016 Fit4life is TCS' wellness programme with three objectives - improving employee health, increasing camaraderie among associates and contributing to the society. Associates in teams set yearly fitness targets in kilometers or hours. They choose fitness activities and log the efforts into TCS Fit4life. To assist the associates to log their efforts conveniently, a web portal and a mobile app is available. At the end of the year, TCS donates an amount, corresponding to total efforts, to charity. |% contribution to hours and kms from different geos|Activity Type|Total Kms since 2012| |---|---|---| |Geography|% Hours|% KM| |APAC|1.58|1.37| |EUROPE|0.58|1.52| |INDIA|94.10|93.28| |LATAM|1.03|0.90| |MEA|0.11|0.12| |NORTH AMERICA|2.08|1.86| |UK|0.52|0.94| | | |running| | | | | |---|---|---|---|---|---|---| | | |CYCLING|2012-13|1.6 Million Kms| | | | | | |2013-14|4.18 Million Kms + 536 K Hrs| | | | | | |2014-15|5.24 Million Kms + 452 K Hrs| | | | | | |2015-16|15.1 Million Kms + 1.67 M Hrs| | | 24 I TCS Annual Report 2015-16 # Transforming India's Premier Public Healthcare Institutions Over 60 years ago, the All India Institute of Medical Sciences was founded in New Delhi, with a vision of providing world class healthcare services. However, the influx of patients far exceeded its capacity, leading to acute mismanagement and increasing pressure on the country's largest hospital, resulting in poor healthcare quality. In December 2015, AIIMS, in partnership with Tata Consultancy Services, launched the transformation of its OPD care delivery with the immediate goal of creating patient-friendly systems and providing easy access to the finest healthcare delivery systems in India. 'It was not just a CSR activity which TCS has done, they have done with their heart and put their soul in it'. Shri JP Nadda, Hon'ble Minister for Health and Family Welfare This joint commitment successfully revolutionised the healthcare system in India, setting a benchmark in human effort and competency resulting in the Innovative OPD Process. With the transformation of the AIIMS OPD, TCS envisions a proprietary and robust model that is replicable and scalable enabling quick roll out across public sector hospitals in India and elsewhere. A social initiative by TCS in partnership with the Government of India, the AIIMS OPD transformation uses technology, innovative process technique, yet again, to improve the life of the common man to drive change and to transform India. |
# Programme Benefits # TCS + AIIMS: Transforming Patient Care |Increase in prior Online appointments|73%| |---|---| |Processing time cut to|50 seconds| |18 (new) Single Window Exit Counters|Increased| |Extra seating - 2,550|(Total - 4,050)| |Improved Signage|120 Patient Care Coordinators| |Waiting Time reduced from|6 to 2 hours| (Scan the QR code to watch the video) TCS Annual Report 2015-16 I 25 # Impacting the Community - Swachh Bharat At Tata Consultancy Services, we change lives. As the largest corporate contributor to the Prime Minister's "Swachh Bharat, Swachh Vidyalaya" movement, TCS is providing girls an opportunity to shine by giving them a healthy childhood. A childhood that is free of unhygienic sanitary conditions so that these young, bright students can focus on their academics rather than worry about falling ill. As 47% of schools in India don't have a separate girl's toilet this leads to a less than conducive learning environment. TCS analysed the problem and found a holistic solution taking into account infrastructure, maintenance and education. The solution was not only implementable, but also sustainable while at the same time raising awareness about hygiene. Covering four states in India, TCS has changed the lives of over 80,000 students in over 1,400 schools and has given many girls the opportunity to strive for a better life. "We congratulate Tata Consultancy Services for its commitment towards a cleaner and healthier India. TCS' comprehensive approach to sanitation, offering end-to-end solutions and results oriented action is an important step towards sustainable WASH outcomes." USAID, India |other corporates| | | | | |57.45%| |---|---|---|---|---|---|---| |TCS|1,991 Schools (1,400+ schools)|42.55%| | | | | tcs has changed the lives of over 80,000 students in over 1,400 schools Covering 4 states in india in India don't have a separate girl's toilet (Scan the QR code to watch the video) 26 I TCS Annual Report 2015-16 # Taking STEM to grassroots Our STEM - Science, Technology, Engineering, Math - programme focuses on inspiring young minds to take up a career in technology. It is designed to empower students to master digital technologies through innovative technology learning platforms. With a global footprint covering North America, UK, Europe, Asia Pacific and India, this programme has impacted over 60,000 students with 7,000 TCS volunteers contributing over 45,000 volunteer hours. |Global footprint|North America, UK, Europe, Asia Pacific, India| |---|---| |Impacted|60,000+| |7,000+ TCS volunteers|Contributing 45,000+ volunteer hours| # goIT students, Stockholm, Sweden # Pre-final year students of the Jawaharlal Institute of Technology, Madhya Pradesh, India # Go4IT students, Melbourne, Australia # Students presenting at the goIT finale, at Boys and Girls Club, Jersey City, USA # Students participating in the Mission UK programme, UK (Scan the QR code to watch the video) TCS Annual Report 2015-16 I 27 # Building a Healthy Active Community # CONSULTANCY SERVICES STATS 3,00,000+ downloads of the apps $ 34mn+ raised for charity For over a decade now, TCS has been actively involved in promoting a healthy, active lifestyle. Globally, we have been leveraging our Fit4Life initiative as well as external partnerships with leading international distance running properties to promote wellness and community development among our employees, their families and our customers. Over the past 10 years TCSers have raised over $34 million benefiting causes from heart disease, diabetes to education for the differently abled. Our efforts in making each of these events completely technology driven is gaining momentum with our digital services team providing real time analysis and updates during each race. The official apps for each event have been created by TCS and we have had a record number of downloads this year - over 3,00,000. |
# Races in other cities that we sponsor: MUMBAI LONDON SINGAPORE CHICAGO BOSTON MANILA # Official Technology Partner TCS Amsterdam Marathon # Title Sponsor of the TCS World 10K Bengaluru # Title Sponsor of the TCS New York City Marathon 28 I TCS Annual Report 2015-16 # Awards # From April 2015 - March 2016 # Business Leadership - World's most powerful brand in IT Services - Brand Finance - Ranked Number 1 in Dataquest's Top 20 list of Indian IT companies - SAP® Pinnacle award - Red Hat's 'System Integrator Partner of the Year' for North America - Hitachi Data System's Global System Integrator Partner of the Year - 'Fastest Growing SI Partner of the Year' - Expericon 2015 - Business Transformation Award - Pegasystems Partner Excellence Awards - Winner, IBM Mobile App Throwdown Contest 2015 for Business Partners - Oracle Excellence Award for Specialized Partner of the Year - AsiaPac, North America # Recognitions - Ranked 57 among Top 100 US Brands by Brand Finance - Winner 'Make In India Awards for Excellence' - Recognised for the 'Best In House IP Team of the year - IT & Technology' at Global IPR Conclave - Wins multiple awards as part of the Global HR Excellence Awards and Recruiting and Staffing Best in Class (RASBIC) awards - World HRD Congress. - Ranked Number 1 - IDC Financial Insights FinTech Rankings Top 100 - Winner 'Best Practice in Developing Future Leaders' Award at the Best Leadership Development Practices of Asia Awards - Recognized as 'Superbrand' by Superbrands® (UK) list for business-to-business brands - TCS UK & Ireland wins 'Company of the Year' and 'Social Responsibility project of the Year' - Employee Engagement Awards - Golden Peacock National Training Award - TCS' Passport Seva Project was awarded Triple ISO Certification # Sustainability - Dow Jones Sustainability Index 2015 # N Chandrasekaran: - Ranked 'Best CEO', Technology/ IT Services & Software sector - Institutional Investor's 2015 All-Asia Executive Team rankings - Qimpro Platinum Standard Award 2015 (Business) - Business Today's Best CEO (IT & ITES) - Appointed part-time non-official director on the central board of the RBI # Board of Directors - Cyrus Mistry (Chairman) - N Chandrasekaran (CEO & Managing Director) - Aman Mehta - V Thyagarajan - Prof. Clayton M Christensen - Dr. Ron Sommer - Dr. Vijay Kelkar - Ishaat Hussain - O. P. Bhatt - Phiroz Vandrevala - Aarthi Subramanian (Executive Director) # Company Secretary Suprakash Mukhopadhyay # Statutory Auditors Deloitte Haskins & Sells LLP # IFRS Auditors Deloitte Haskins & Sells LLP # Registered Office 9th Floor, Nirmal Building Nariman Point, Mumbai 400 021 Tel : 91 22 6778 9595 Fax : 91 22 6778 9660 Website : www.tcs.com CIN : L22210MH1995PLC084781 # Corporate Office TCS House Raveline Street, Fort Mumbai 400 001 Tel : 91 22 6778 9999 Fax : 91 22 6778 9000 E-mail: [email protected] # Registrars & Transfer Agents TSR DARASHAW Limited 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr. E. |
Moses Road, Mahalaxmi Mumbai 400 011 Tel : 91 22 6656 8484 Fax : 91 22 6656 8494 E-mail: [email protected] Website: www.tsrdarashaw.com # 30 ITCS Annual Report 2015-16 # Management Team |Function|Name| |---|---| |Corporate| | |Chief Executive Officer & Managing Director|N Chandrasekaran| |Global Head, Delivery Excellence, Governance & Compliance|Aarthi Subramanian| |Chief Financial Officer|Rajesh Gopinathan| |Global Head, Human Resources|Ajoyendra Mukherjee| |Company Secretary & Treasury|Suprakash Mukhopadhyay| |Marketing|John Lenzen| |Communication|Pradipta Bagchi| |Research & Development|K Ananth Krishnan| |Legal|Vishwanathan Iyer| |Geography Heads| | |North America, UK & Europe|Surya Kant| |Latin America|Henry Manzano| |India, Middle-East & Africa|Ravi Viswanathan| |Asia Pacific|Girish Ramachandran| |Japan|AS Lakshminarayanan| |Strategic Growth Unit Heads| | |Financial Solutions|NG Subramaniam| |iON|Venguswamy Ramaswamy| |Industry Service Unit Heads| | |Banking & Financial Services|K Krithivasan| |Banking & Financial Services|Susheel Vasudevan| |Banking & Financial Services|Ramanamurthy Magapu| |Insurance & Healthcare|Suresh Muthuswami| |Retail, Travel & Consumer Products|Pratik Pal| |Life Sciences, Manufacturing & Energy|Debashis Ghosh| |Manufacturing|Milind Lakkad| |Communication, Media & Information Services|Kamal Bhadada| |Service Unit Heads| | |Enterprise Solutions & Global Consulting Practice|Krishnan Ramanujam| |Engineering & Industrial Services|Regu Ayyaswamy| |Business Process Services|Dinanath Kholkar| |IT Infrastructure Services|P R Krishnan| |Assurance Services|Siva Ganesan| |Digital Enterprise Services & Solutions|Satya Ramaswamy| TCS Annual Report 2015-16 I31 ² ² ² ² † ² ² ² ² ² ² ² ² ² ² ² Marinc Linca OCS] Railway Station Mumboi Chhatf Matint Dryc OBirla Matoshri Hall Ndina 19 min Intc Continenial chion Slreci CRd Churchgnie Gnrand Font Jalaind Churchgate0 Cucle Garden Coun0 GHOD Aichanoe ² ² ² ² ² ² † ² ² ² ² † † ² ² ² ² ² † † ² ² ² ² ² ² ² # Notice Notice is hereby given that the twenty-first Annual General Meeting of Tata Consultancy Services Limited will be held on Friday, June 17, 2016 at 3.30 p.m. at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400 020, to transact the following business: 1. To receive, consider and adopt: the Audited Financial Statements of the Company for the financial year ended March 31, 2016, together with the Reports of the Board of Directors and the Auditors thereon; and 2. the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2016, together with the Report of the Auditors thereon. To confirm the payment of Interim Dividends on Equity Shares and to declare a Final Dividend on Equity Shares for the financial year 2015-16. To appoint a Director in place of Mr. Ishaat Hussain (DIN 00027891), who retires by rotation and, being eligible, offers himself for re-appointment and his term would be up to September 2, 2017. Ratification of Appointment of Auditors To consider and, if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution: "RESOLVED that pursuant to the provisions of Section 139 and all other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the Company hereby ratifies the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), as Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the twenty-second AGM of the Company to be held in the year 2017 to examine and audit the accounts of the Company at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors." Appointment of Branch Auditors To consider and, if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution: "RESOLVED that pursuant to the provisions of Section 143(8) and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the Board be and is hereby authorized to appoint Branch Auditors of any branch office of the Company, whether existing or which may be opened / acquired hereafter, outside India, in consultation with the Company's Auditors, any person(s) qualified to act as Branch Auditors and to fix their remuneration." # Notes: File: AR_TCS_2015_2016.md 1. The relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 ("Act") setting out material facts concerning the business under Item Nos. 4 and 5 of the Notice, is annexed hereto. The relevant details as required under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), of the person seeking re-appointment as Director under Item No. 3 of the Notice, are also annexed. 2. |
A Member entitled to attend and vote at the Annual General Meeting (AGM) is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a Member of the Company. The instrument appointing the proxy, in order to be effective, must be deposited at the Company's Registered Office, duly completed and signed, not less than FORTY-EIGHT HOURS before the commencement of the AGM. Proxies submitted on behalf of limited companies, societies etc., must be supported by appropriate resolutions / authority, as applicable. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than 10% of the total share capital of the Company. In case a proxy is proposed to be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. 3. The Register of Members and Share Transfer Books of the Company will be closed on Wednesday, June 8, 2016 and Thursday, June 9, 2016. 4. Members, Proxies and Authorised Representatives are requested to bring to the meeting, the Attendance Slip enclosed herewith, duly completed and signed, mentioning therein details of their DP ID and Client ID / Folio No. # Annual Report 2015-16 5. If the Final Dividend, as recommended by the Board of Directors, is approved at the AGM, payment of such dividend will be made on Friday, June 24, 2016 as under: 1. To all Beneficial Owners in respect of shares held in dematerialized form as per the data as may be made available by the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) as of the close of business hours on Tuesday, June 7, 2016; 2. To all Members in respect of shares held in physical form after giving effect to valid transfers in respect of transfer requests lodged with the Company as of the close of business hours on Tuesday, June 7, 2016. 6. Members holding shares in dematerialized form are requested to intimate all changes pertaining to their bank details such as bank account number, name of the bank and branch details, MICR code and IFSC code, mandates, nominations, power of attorney, change of address, change of name, e-mail address, contact numbers, etc., to their depository participant (DP). Changes intimated to the DP will then be automatically reflected in the Company's records which will help the Company and the Company's Registrars and Transfer Agents, TSR DARASHAW Limited (TSRDL) to provide efficient and better services. Members holding shares in physical form are requested to intimate such changes to TSRDL. The Securities and Exchange Board of India ("SEBI") has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their depository participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to TSRDL. 7. Members holding shares in physical form are requested to consider converting their holdings to dematerialized form to eliminate all risks associated with physical shares and for ease of portfolio management. Members can contact the Company or TSRDL for assistance in this regard. 8. Members holding shares in physical form, in identical order of names, in more than one folio are requested to send to the Company or TSRDL, the details of such folios together with the share certificates for consolidating their holdings in one folio. A consolidated share certificate will be issued to such Members after making requisite changes. 9. In case of joint holders attending the AGM, the Member whose name appears as the first holder in the order of names as per the Register of Members of the Company will be entitled to vote. 10. Members seeking any information with regard to the accounts, are requested to write to the Company at an early date, so as to enable the Management to keep the information ready at the AGM. 11. As per the provisions of Section 72 of the Act, the facility for making nomination is available for the Members in respect of the shares held by them. Members who have not yet registered their nomination are requested to register the same by submitting Form No. SH-13. The said form can be downloaded from the Company's website www.tcs.com (under 'Investors' section). |
Members holding shares in physical form may submit the same to TSRDL. Members holding shares in electronic form may submit the same to their respective depository participant. 12. Transfer of Unclaimed / Unpaid amounts to the Investor Education and Protection Fund (IEPF): Pursuant to Sections 205A and 205C and other applicable provisions, if any, of the Companies Act, 1956, all unclaimed / unpaid dividend, application money, debenture interest and interest on deposits as well as the principal amount of debentures and deposits, as applicable, remaining unclaimed / unpaid for a period of seven years from the date they became due for payment, in relation to the Company, erstwhile TCS e-Serve Limited and erstwhile CMC Limited, which have been amalgamated with the Company, have been transferred to the IEPF established by the Central Government. No claim shall be entertained against the IEPF or the Company for the amounts so transferred. Members who have not yet encashed their dividend warrant(s) pertaining to the final dividend for the financial year 2008-09 onwards for the Company, erstwhile TCS e-Serve Limited and erstwhile CMC Limited, are requested to lodge their claims with TSRDL. It may be noted that the unclaimed Final Dividend for the financial year 2008-09 declared by the Company on June 30, 2009 can be claimed by the Members by June 29, 2016 and unclaimed Final Dividend for the financial year 2008-09 declared by erstwhile CMC Limited on June 26, 2009 can be claimed by the Members by June 25, 2016. Members' attention is particularly drawn to the "Corporate Governance" section of the Annual Report in respect of unclaimed dividend. The Ministry of Corporate Affairs ('MCA') on May 10, 2012 notified the Investor Education and Protection Fund (Uploading of information regarding Unpaid and Unclaimed amounts lying with Companies) Rules, 2012 (IEPF Rules), which is applicable to the Company. The objective of the IEPF Rules is to help the shareholders ascertain status of the unclaimed amounts and overcome the problems due to misplacement of intimation thereof by post etc. In terms of the said IEPF Rules, the Company has uploaded the information in respect of the Unclaimed Dividends, 34 Notice as on the date of last AGM i.e. June 30, 2015, on the website of the IEPF viz. www.iepf.gov.in and under 'Investors' section on the website of the Company viz. www.tcs.com. # 13. To prevent fraudulent transactions, Members are advised to exercise due diligence and notify the Company of any change in address or demise of any Member as soon as possible. Members are also advised not to leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned DP and holdings should be verified. # 14. The Notice of the AGM along with the Annual Report 2015-16 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company / Depositories, unless any Member has requested for a physical copy of the same. For Members who have not registered their e-mail addresses, physical copies are being sent by the permitted mode. Members may note that this Notice and the Annual Report 2015-16 will also be available on the Company's website viz. www.tcs.com. # 15. To support the 'Green Initiative', Members who have not registered their e-mail addresses are requested to register the same with DPs / TSRDL. Members are requested to provide their e-mail address through SMS along with DP ID/Client ID to +91 9223990629 and ensure that the same is also updated with their respective DP for their demat account(s). The registered e-mail address will be used for sending future communications. # 16. The route map showing directions to reach the venue of the twenty-first AGM is annexed. # 17. In compliance with the provisions of Section 108 of the Act and the Rules framed thereunder, as amended from time to time, and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by NSDL, on all the resolutions set forth in this Notice. The instructions for e-voting are given herein below. Resolution(s) passed by Members through e-voting is/are deemed to have been passed as if they have been passed at the AGM. # 18. The board of directors has appointed Mr. P. N. Parikh of M/s. Parikh & Associates, Practicing Company Secretaries (Membership No. FCS 327) and failing him Mr. Mitesh Dhabliwala, Practicing Company Secretary (Membership No. |
FCS 8331) as the Scrutinizer to scrutinize the voting at the meeting and remote e-voting process in a fair and transparent manner. # 19. The facility for voting, either through electronic voting system or polling paper shall also be made available at the AGM and the Members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right to vote at the AGM. # 20. The Members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. # 21. The instructions for e-voting are as under: 1. In case a Member receives an e-mail from NSDL (for Members whose e-mail addresses are registered with the Company / Depositories): # Annual Report 2015-16 # Instructions for Institutional Shareholders xi. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution and / or Authority letter, etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to [email protected], with a copy marked to [email protected]. xii. In case of any queries, you may refer the Frequently Asked Questions (FAQs) and e-voting user manual for shareholders available at the Downloads section of www.evoting.nsdl.com or call on toll free no: 1800-222-990. # In case a Member receives physical copy of the Notice of the AGM (for Members whose e-mail addresses are not registered with the Company / Depositories): 1. Initial password is provided in the enclosed attendance slip: EVEN (E-voting Event Number) + USER ID and PASSWORD 2. Please follow all steps from Sl. No. 20. A (ii) to (xii) above, to cast vote. # Other Instructions 1. The e-voting period commences on Tuesday, June 14, 2016 (9.00 a.m. IST) and ends on Thursday, June 16, 2016 (5.00 p.m. IST). During this period, Members holding shares either in physical form or in dematerialized form, as on Friday, June 10, 2016 i.e. cut-off date, may cast their vote electronically. The e-voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the Member, he / she shall not be allowed to change it subsequently or cast vote again. 2. The voting rights of Members shall be in proportion to their shares in the paid up equity share capital of the Company as on the cut-off date. A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting, as well as voting at the Meeting through electronic voting system or poll paper. 3. Any person, who acquires shares of the Company and becomes a Member of the Company after dispatch of the Notice and holding shares as of the cut-off date, may obtain the login ID and password by sending a request at [email protected]. However, if he/she is already registered with NSDL for remote e-voting then he/she can use his/her existing User ID and password for casting vote. If you forget your password, you can reset your password by using "Forgot User Details / Password" option available on www.evoting.nsdl.com. 4. The Scrutinizer shall, immediately after the conclusion of voting at the AGM, count the votes cast at the Meeting, thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the Company and make, not later than three days of conclusion of the Meeting, a consolidated Scrutinizer's Report of the total votes cast in favour or against, if any, to the Chairman or a person authorised by him in writing who shall countersign the same. 5. The result declared along with the Scrutinizer's Report shall be placed on the Company's website www.tcs.com and on the website of NSDL www.evoting.nsdl.com immediately. The Company shall simultaneously forward the results to National Stock Exchange of India Limited and BSE Limited, where the shares of the Company are listed. |
By Order of the Board of Directors SUPRAKASH MUKHOPADHYAY Vice President and Company Secretary Mumbai, April 18, 2016 # Registered Office: 9th Floor, Nirmal Building Nariman Point Mumbai 400 021 CIN : L22210MH1995PLC084781 Tel: 91 22 6778 9595 Fax: 91 22 6778 9660 E-mail: [email protected] Website: www.tcs.com # Notice # Explanatory Statement # (Pursuant to Section 102 of the Companies Act, 2013) As required by Section 102 of the Companies Act, 2013 ("Act"), the following explanatory statement sets out all material facts relating to the business mentioned under Item Nos. 4 and 5 of the accompanying Notice: # Item No. 4 This explanatory statement is provided though strictly not required as per Section 102 of the Act. Deloitte Haskins & Sells LLP, (ICAI Firm Registration No. 117366W/W-100018), Chartered Accountants, Mumbai were appointed as the statutory auditors of the Company for a period of three years at the Annual General Meeting (AGM) of the Company held on June 27, 2014, to hold office from the conclusion of the nineteenth AGM till conclusion of the twenty-second AGM to be held in the year 2017. As per provisions of Section 139(1) of the Act, their appointment for the above tenure is subject to ratification by members at every AGM. Accordingly, ratification of the members is being sought for appointment of statutory auditors as per the proposal contained in the Resolution set out at item no. 4 of the Notice. The Board commends the Resolution at item No. 4 for approval by the Members. None of the Directors or Key Managerial Personnel (KMP) or relatives of Directors and KMPs is concerned or interested in the Resolution at Item No. 4 of the accompanying Notice. # Item No. 5: The Company has branches outside India and may also open / acquire new branches outside India in future. It may be necessary to appoint branch auditors for carrying out the audit of the accounts of such branches. The Members are requested to authorize the Board of Directors of the Company to appoint branch auditors in consultation with the Company's Auditors and fix their remuneration. The Board commends the Resolution at Item No. 5 for approval by the Members. None of the Directors or Key Managerial Personnel (KMP) or relatives of Directors and KMPs is concerned or interested in the Resolution at Item No. 5 of the accompanying Notice. By Order of the Board of Directors SUPRAKASH MUKHOPADHYAY Vice President and Company Secretary Mumbai, April 18, 2016 # Registered Office: 9th Floor, Nirmal Building Nariman Point Mumbai 400 021 CIN : L22210MH1995PLC084781 Tel: 91 22 6778 9595 Fax: 91 22 6778 9660 E-mail: [email protected] Website: www.tcs.com Notice 37 # Annual Report 2015-16 # Details of Director Seeking Re-appointment at the Annual General Meeting |Particulars|Mr. Ishaat Hussain| |---|---| |Date of Birth|September 2, 1947| |Date of Appointment|January 5, 2010| |Qualifications|- Bachelor's degree in Economics from Delhi University - Chartered Accountant from England and Wales - Completed the Advanced Management Program conducted by Harvard University - Wide experience in Finance | |Directorships held in other public companies (excluding foreign companies and Section 8 companies)|- Tata Sons Limited - Tata Steel Limited - Voltas Limited - Tata Teleservices Limited - Tata Sky Limited - Tata AIG General Insurance Company Limited - Tata AIA Life Insurance Company Limited - Tata Capital Limited - The Bombay Dyeing & Manufacturing Company Limited | |Memberships / Chairmanships of committees of other public companies (includes only Audit Committee and Stakeholders' Relationship Committee)|- Audit Committee - Tata Steel Limited - Tata Teleservices Limited* - Tata Sky Limited - Tata AIA Life Insurance Company Limited - The Bombay Dyeing & Manufacturing Company Limited* - Stakeholders' Relationship Committee - Tata Steel Limited* | |Number of shares held in the Company|1,740| *Chairman of the Committee For other details such as number of meetings of the board attended during the year, remuneration drawn and relationship with other directors and key managerial personnel in respect of Mr. Ishaat Hussain, please refer to the Corporate Governance Report. # Notice # Directors' Report 39 # Annual Report 2015-16 # Directors' Report To the members, The directors submit annual report of Tata Consultancy Services Limited (the "Company" or "TCS") along with the audited financial statements for the financial year (FY) ended March 31, 2016. Consolidated performance of the Company and its subsidiaries has been referred to wherever required. # 1. |
Financial results | |Unconsolidated| |Consolidated| | |---|---|---|---|---| | |2015-16|2014-15|2015-16|2014-15| |Revenue from operations|85,863.85|73,578.06|108,646.21|94,648.41| |Operating expenditure|58,914.64|52,549.86|78,056.42|70,166.70| |Earnings before interest, tax, depreciation and amortisation (EBITDA)|26,949.21|21,028.20|30,589.79|24,481.71| |Other income (net)|3,740.20|4,466.73|3,053.87|3,229.91| |Finance costs|13.58|79.57|19.83|104.19| |Depreciation and amortisation expense|1,559.19|1,393.77|1,947.96|1,798.69| |Profit before exceptional item and tax|29,116.64|24,021.59|31,675.87|25,808.74| |Exceptional item|-|528.38|-|489.75| |Profit before tax (PBT)|29,116.64|24,549.97|31,675.87|26,298.49| |Tax expense|6,233.94|5,293.01|7,300.93|6,238.79| |Profit for the year before minority interest|22,882.70|19,256.96|24,374.94|20,059.70| |Minority interest|-|-|83.12|207.52| |Profit for the year (PAT)|22,882.70|19,256.96|24,291.82|19,852.18| |Adjustment for amalgamation of acquired subsidiaries|1,075.31|71.78|-|-| |Balance brought forward from previous year|35,779.06|36,420.45|39,012.65|39,504.51| |Amount available for appropriation|59,737.07|55,749.19|63,304.47|59,356.69| |Appropriations| | | | | |Interim dividends on equity shares (excluding tax)|3,251.22|10,772.92|3,251.22|10,772.92| |Proposed dividend on equity shares (excluding tax)|5,320.16|4,700.95|5,320.16|4,700.95| |Tax on dividends (interim and proposed)|1,648.16|2,591.54|1,653.34|2,635.69| |Write back of tax on dividends of prior year|(18.72)|(20.97)|(18.72)|(20.97)| |Capital redemption reserve|-|-|110.48|255.57| |General reserve|2,288.27|1,925.69|2,303.77|1,953.64| |Statutory reserve|-|-|65.52|46.24| |Balance carried to balance sheet|47,247.98|35,779.06|50,618.70|39,012.65| (` 1 crore = ` 10 million) # 2. Issue of equity shares In pursuance of the scheme of amalgamation ("the Scheme") sanctioned by the Hon'ble High Court of Judicature at Bombay vide its Order dated August 14, 2015 and the Hon'ble High Court of Judicature at Hyderabad vide its Order dated July 20, 2015, 1,16,99,962 equity shares of the Company were issued to the shareholders (other than the Company) of the erstwhile CMC Limited ("CMC") on October 5, 2015, in the ratio of seventy nine (79) equity shares of ` 1 each of the Company, for every one hundred (100) equity shares of ` 10 each of CMC. As a result of this, the issued, subscribed and paid up capital of the Company has increased from ` 195.87 crores in FY 2014-15 to ` 197.04 crores in FY 2015-16. # 3. Dividend Based on the Company's performance, the directors are pleased to recommend for approval of the members a final dividend of ` 27 per share for the FY 2015-16 taking the total dividend to ` 43.50 per share (previous year ` 39 per share and special dividend of ` 40 per share). The final dividend on equity shares, if approved by the members would involve a cash outflow of ` 6,403.22 crores including dividend tax. The total dividend on equity shares including dividend tax for the FY 2015-16 would aggregate ` 10,219.54 crores, resulting in a payout of 44.66% of the unconsolidated profits of the Company. # 4. Transfer to reserves The Company proposes to transfer ` 2,288.27 crores to the general reserve out of the amount available for appropriation and an amount of ` 47,247.98 crores is proposed to be retained in the profit and loss account. # 5. Company's performance On consolidated basis, revenue from operations for FY 2015-16 at ` 1,08,646.21 crores was higher by 14.79% over last year (` 94,648.41 crores in FY 2014-15). Earnings before interest, tax, depreciation and amortisation ("EBITDA") was ` 30,589.79 crores registering a growth of 24.95% over EBITDA of ` 24,481.71 crores in FY 2014-15. Profit after tax ("PAT") for the year was ` 24,291.82 crores recording a growth of 22.36% over the PAT of ` 19,852.18 crores of FY 2014-15. On unconsolidated basis, revenue from operations for FY 2015-16 at ` 85,863.85 crores, was higher by 16.70% over last year (` 73,578.06 crores in FY 2014-15). EBITDA at ` 26,949.21 crores registered a growth of 28.16% over the EBITDA of ` 21,028.20 crores in FY 2014-15. PAT for the year was ` 22,882.70 crores registering a growth of 18.83% over the PAT of ` 19,256.96 crores in FY 2014-15. # 6. Human resource development As every industry globally is being re-shaped by digital technologies, individuals are transforming themselves to stay relevant and succeed in a digital world. The focus of the Company has been to leverage digital re-imagination to drive growth and efficiency of business models, products and services, business processes as well as the workplace. This helps deliver a superior experience to every key stakeholder, viz. customers, employees, investors and the community. Successful delivery of digital initiatives is contingent on gaining new capabilities in multiple digital technologies that are evolving at a rapid pace. The Company invested in developing new digital learning delivery platforms and content creation. These quick adoptions of expanded learning architecture enabled the Company to successfully train more than 120,000 employees on digital technologies in FY 2015-16. This new disruptive vision in learning and development has driven career growth of a large cross-section of the distributed as well as diverse workforce and helped them realise their potential. The Company hired and integrated 90,182 employees across the globe in FY 2015-16. This is the highest gross addition done by the Company during any year. |
Employees of erstwhile CMC Limited were welcomed into the global TCS family and assisted to integrate. A smooth transition and integration into TCS has been possible due to the Company's well-established people processes, emphasis on personal connect and concerted effort by cross functional integration teams. The Company has 353,843 employees representing 129 nationalities working across 55 countries. On gender diversity, the Company is one of the largest employers of women in India, constituting 33.8% of the global workforce with a growing number in senior positions. The Company's social collaborative platform - 'Knome' continues to transform the way TCSers interact socially as well as professionally. As a progressive organisation, workforce policies and benefits have been periodically reviewed for continued relevance to employees' needs and to keep abreast of market practices. One of the flagship programmes of TCS, 'Purpose4Life', saw an overwhelming participation from TCSers globally, contributing over 600,000 hours of volunteering effort to make a positive impact in their communities. The Company's Health and Safety Policy commits to providing a healthy and safe work environment to employees. The 'Fit4life' initiative, with an active participation of employees across the world, creates a culture of healthy lifestyles by building a fraternity of health and fitness-conscious employees. Safety of employees remains an important focus for the organisation. 'Safety First' initiative was launched last year and safety champions in various locations have run several programmes in order to advocate the importance of safety consciousness and awareness. # Annual Report 2015-16 File: AR_TCS_2015_2016.md Employee inputs from 'PULSE', the Company's annual global employee satisfaction and engagement survey, were analysed to gain necessary insight into the needs of the diverse workforce. This has helped the Company design required interventions to enhance the level of employee engagement. The Company continues its focus on employee retention. The Company's performance-driven culture with a strong focus on employees' career aspirations, rewards & recognition and total-welfare helped maintain a low attrition rate of 15.5% in FY 2015-16. Various engagement initiatives under 'Maitree', employee welfare initiatives, healthcare & wellbeing benefits, stress management programmes, all add up to providing the employees with a complete career solution which creates a highly engaged place to work. The Company has been certified as the Global Top Employer by Top Employers Institute. It got rated as the No. 1 Top Employer in UK & Europe and recognised as a Top Employer in 24 countries during FY 2015-16. This award is in recognition of the Company's talent strategy, workforce planning, on-boarding, learning & development, performance management, leadership development, career & succession management, compensation & benefits as well as Company culture. # 7. Quality initiatives The Company has sustained its commitment to the highest levels of quality, best-in-class service management, robust information security practices and mature business continuity processes that have collectively helped achieve significant milestones during the year. The Company continues to maintain enterprise-wide highest maturity Level 5 for CMMI-DEV® (Development) version 1.3 and CMMI-SVC® (Services) version 1.3. The Company continues to adhere to ISO certification enterprise-wide for ISO 20000:2011 (Service Management), ISO 27001:2013 (Security Management) and ISO 22301:2012 (Business Continuity Management) standards. The Company has also been recommended for certification against the latest ISO 9001:2015 (Quality Management) standard and is one of the early adopters of this new ISO standard which was released in September 2015. The Company is enterprise-wide certified for ISO 14001:2004 (Environmental Management) and BS OHSAS 18001:2007 (Occupational Health and Safety Management) which demonstrates TCS' strong commitment to the environment and the occupational health and safety of its employees and business partners. The Company also continues to maintain industry specific quality certifications viz., AS 9100 (Aerospace Industry), ISO 13485 (Medical Devices) and TL 9000 (Telecom Industry). The foundation of these certifications is TCS' integrated Quality Management System (iQMSTM), a process-driven and customer-centric system providing a 'One Global Service Standard'. iQMSTM is the backbone that supports TCS' global network delivery model (GNDMTM). iQMS TM continues to be enhanced for emerging service lines and delivery methodologies. The Company further invests in frameworks to enable best practice sharing and continuous risk management. The Company has a strong mechanism for listening to the Voice of Customer through satisfaction surveys at Project level and Executive level. The feedback is analysed across multiple dimensions to drive improvement in Customer experience. The Company has significant focus on continuous improvements in Customer engagements as well as internal operations leveraging best-in-class methodologies. These initiatives have helped our teams proactively drive improvements and provide business value to our Customers. |
The Company continues to invest in Knowledge Management and collaboration practices and platforms to enable learning and sharing. At the annual 'Knowledge Management' India summit, hosted by the Confederation of Indian Industries (CII) in February 2016, the Company was recognized as an Indian 'Most Admired Knowledge Enterprise' (MAKE) Winner. The Company received the prestigious MAKE award for the 11th time in India as well as Asia. In the Global Independent Operating Unit (IOU) MAKE award category, the Company received the award for the 6th time in a row and was ranked first for the year 2015. # 8. Subsidiary companies The Company has 61 subsidiaries as on March 31, 2016. There are no associate companies or joint venture companies within the meaning of section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. Pursuant to provisions of section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company. Further, pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company. # 42 Directors' Report During the year, the following subsidiaries were incorporated: 1. Tata Consultancy Services Saudi Arabia was incorporated on July 30, 2015 in partnership with GE, with equity holding in the ratio of 76:24 between Tata Consultancy Services Netherlands BV and GE. It is the first all-women business process and IT services centre in Riyadh, Kingdom of Saudi Arabia, and has achieved the milestone of employing 1,000 highly skilled women, 85% of whom are local nationals, providing long term career opportunities to women in the region. This center provides services to several clients operating in multiple countries in the Middle East region. 2. Tata Consultancy Services Chile S.A. and TCS Inversiones Chile Limitada subscribed to 100% share capital of Technology Outsourcing S.A.C, an information technology service provider in Peru on October 30, 2015. During the year, CMC was amalgamated with the Company pursuant to the Orders of the Hon'ble High Court of Judicature at Bombay and the Hon'ble High Court of Judicature at Hyderabad. Consequently, the entire business, assets, liabilities, duties and obligations of CMC were transferred to and vested in the Company with effect from the appointed date, i.e. April 1, 2015. # 9. Directors' responsibility statement Pursuant to section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: 1. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; 2. they have 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 at the end of the financial year and of the profit of the Company for that period; 3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. they have prepared the annual accounts on a going concern basis; 5. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; 6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2015-16. # 10. Directors and key managerial personnel Pursuant to the provisions of section 149 of the Act, Mr. Aman Mehta, Mr. V. Thyagarajan, Prof. Clayton M. Christensen, Dr. Ron Sommer, Dr. Vijay Kelkar and Mr. O. P. |
Bhatt were appointed as independent directors at the annual general meeting of the Company held on June 27, 2014. They have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. Mr. Ishaat Hussain retires by rotation and being eligible has offered himself for re-appointment. If re-appointed, his term would be up to September 2, 2017, in accordance with the retirement age policy for directors of the Company. During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company. Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are - Mr. N. Chandrasekaran, Chief Executive Officer and Managing Director, Mr. Rajesh Gopinathan, Chief Financial Officer and Mr. Suprakash Mukhopadhyay, Company Secretary. There has been no change in the key managerial personnel during the year. # Annual Report 2015-16 # 11. Number of meetings of the board Eight meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. # 12. Board evaluation The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations"). The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role. In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated. # 13. Policy on directors' appointment and remuneration and other details The Company's policy on directors' appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report. # 14. Internal financial control systems and their adequacy The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report. # 15. Audit committee The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. # 16. Auditors Pursuant to the provisions of section 139 of the Act and the rules framed thereafter, Deloitte Haskins & Sells LLP, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the nineteenth annual general meeting (AGM) of the Company held on June 27, 2014 till the conclusion of the twenty second AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. # 17. Auditors' report and secretarial auditors' report The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report. # 18. |
Risk management The board of directors of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report. # 44 Directors' Report # 19. Particulars of loans, guarantees and investments The particulars of loans, guarantees and investments have been disclosed in the financial statements. # 20. Transactions with related parties None of the transactions with related parties falls under the scope of section 188(1) of the Act. Information on transactions with related parties pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure I in Form AOC-2 and the same forms part of this report. # 21. Corporate social responsibility The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure II of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the corporate governance report, which forms part of this report. The policy is available on the website of the Company (URL: www.tcs.com/investors). # 22. Extract of annual return As provided under section 92(3) of the Act, the extract of annual return is given in Annexure III in the prescribed Form MGT-9, which forms part of this report. # 23. Particulars of employees The information required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below: |Name of the directors|Ratio to median remuneration| |---|---| |Non-executive directors| | |Mr. Cyrus Mistry|-| |Mr. Aman Mehta|41.22| |Mr. V. Thyagarajan|28.67| |Prof. Clayton M. Christensen|22.40| |Dr. Ron Sommer|30.47| |Dr. Vijay Kelkar|24.19| |Mr. Ishaat Hussain|31.36| |Mr. O. P. Bhatt|25.09| |Mr. Phiroz Vandrevala|11.65| |Executive directors| | |Mr. N. Chandrasekaran|459.84| |Ms. Aarthi Subramanian|49.31| # Annual Report 2015-16 # b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year: |Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary|% increase in remuneration in the financial year| |---|---| |Mr. Cyrus Mistry|-| |Mr. Aman Mehta|(-) 8.00| |Mr. V. Thyagarajan|(-) 13.51| |Prof. Clayton M. Christensen|(-) 19.35| |Dr. Ron Sommer|(-) 10.53| |Dr. Vijay Kelkar|(-) 3.57| |Mr. Ishaat Hussain|-| |Mr. O. P. Bhatt|3.70| |Mr. Phiroz Vandrevala|30.00| |Mr. N. Chandrasekaran, Chief Executive Officer and Managing Director|20.56| |Ms. Aarthi Subramanian, Executive Director*|-| |Mr. Rajesh Gopinathan, Chief Financial Officer|38.67| |Mr. Suprakash Mukhopadhyay, Company Secretary|24.08| * Ms. Aarthi Subramanian was appointed on March 12, 2015, therefore, increase in her remuneration not provided. # c. The percentage increase in the median remuneration of employees in the financial year: 9.20% # d. The number of permanent employees on the rolls of Company: 353,843 # e. The explanation on the relationship between average increase in remuneration and Company performance: On an average, employees received an annual increase of 8% in India. Employees outside India received wage increase varying from 2% to 4%. The increase in remuneration is in line with the market trends in the respective countries. In order to ensure that remuneration reflects Company performance, the performance pay is also linked to organisation performance, apart from an individual's performance. # f. Comparison of the remuneration of the key managerial personnel against the performance of the Company: |Aggregate remuneration of key managerial personnel (KMP) in FY 16 (` crores)|33.02| |---|---| |Revenue (` crores)|85,863.85| |Remuneration of KMPs (as a % of revenue)|0.04| |Profit before Tax (PBT) (` crores)|29,116.64| |Remuneration of KMP (as a % of PBT)|0.11| # g. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year: |Particulars|March 31, 2016|March 31, 2015|% Change| |---|---|---|---| |Market Capitalisation ( ` crores)|495,769.52|498,897.81|(-) 0.63| |Price Earnings Ratio|21.67|25.13|(-) 13.77| # 46 Directors' Report # h. |
Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer: |Particulars|March 31, 2016|August 19, 2004|August 19, 2004|% Change*| |---|---|---|---|---| |Market Price (NSE)|2,520.30|850.00|212.50|1086.02| |Market Price (BSE)|2,516.05|850.00|212.50|1084.02| *Adjusted for 1:1 bonus issue in 2006 and 2009 # i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The average annual increase was around 8%. However, during the course of the year, the total increase is approximately 12%, after accounting for promotions and increase in hiring salaries for trainees. Increase in the managerial remuneration for the year was 33.09%. # j. Comparison of each remuneration of the key managerial personnel against the performance of the Company: | |Mr. N. Chandrasekaran, Chief Executive Officer and Managing Director|Ms. Aarthi Subramanian, Executive Director|Mr. Rajesh Gopinathan, Chief Financial Officer|Mr. Suprakash Mukhopadhyay, Company Secretary| |---|---|---|---|---| |Remuneration in FY16 (` crores)|25.66|2.75|2.98|1.63| |Revenue (` crores)|85,863.85|85,863.85|85,863.85|85,863.85| |Remuneration as % of revenue|0.030|0.003|0.003|0.002| |Profit before Tax (PBT) (` crores)|29,116.64|29,116.64|29,116.64|29,116.64| |Remuneration (as % of PBT)|0.088|0.009|0.010|0.006| Note: Please refer to the note given under Section III.B.vii.b on page no. 112 of the Corporate Governance Report. # k. The key parameters for any variable component of remuneration availed by the directors: The members have, at the AGM of the Company on June 27, 2014, approved payment of commission to the non-executive directors within the ceiling of 1% of the net profits of the Company as computed under the applicable provisions of the Act. The said commission is decided each year by the board of directors and distributed amongst the non-executive directors based on their attendance and contribution at the board and certain committee meetings, as well as the time spent on operational matters other than at meetings. # l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None. # m. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms remuneration is as per the remuneration policy of the Company. # n. The statement containing particulars of employees as required under section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary. Directors' Report 47 # Annual Report 2015-16 # 24. Disclosure requirements As per SEBI Listing Regulations, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached, which form part of this report. As per Regulation 34 of the SEBI Listing Regulations, a business responsibility report is attached and forms part of this annual report. # 25. Deposits from public The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. # 26. Conservation of energy, technology absorption, foreign exchange earnings and outgo # Conservation of energy: Energy conservation continues to be an area of focus for TCS. Initiatives to integrate energy efficiency into overall operations are undertaken through design considerations and operational practices. |
The key initiatives towards conservation of energy were: - adding LEED certified green buildings to real estate portfolio with a strong focus on energy efficiency at design stage itself; - improved monitoring of energy consumption through smart metering and integration with building management systems; - setting internal targets for energy performance improvement and institution of rigorous operational controls toward achieving these targets; - creating awareness amongst associates on energy conservation through campaigns and events; - focussing on enhancing the component of renewable power in our power sourcing strategy (through on-site solar power generation and third party purchase as feasible); - extending green data center initiative to 28 data centers which contributes to energy efficiency (power utilisation efficiency) of these data centers; - increased focus on procurement of energy efficient equipment in line with our green procurement policy. In FY 2015-16, TCS has continued to invest in expanding its energy management programme by extensive metering and leveraging its IT capabilities to develop a leading edge, scalable, cloud based 'Internet of Things' (IoT) platform on which 107 sites of its India operations (excluding CMC sites) are integrated for visibility of energy consumption and monitoring. Of these, 95 sites have been under active energy monitoring and management. This has resulted in an absolute energy savings of about 12.5 million kwh during the year for these 95 sites, and an adjusted savings of 29 million kwh after adjusting for growth in employees and any baseline revisions. TCS has extended its enterprise wide certification under IS0 14001:2004 (Environmental Management System) covering its 115 offices globally. TCS was included in the prestigious Dow Jones Sustainability Index 2015 (world as well as emerging markets) for the third year in a row and was also included in the 'India Climate Disclosure Leadership Index' (CDLI), 2015. Data on reduction in energy consumption and consequent reduction in carbon footprint have been provided in the business responsibility report. # Technology absorption, adaption and innovation: The Company continues to use the latest technologies for improving the productivity and quality of its services and products. The Company's operations do not require significant import of technology. # Research and Development (R&D): Specific areas in which R&D was carried out by the Company Research and Innovation at TCS are focused on two primary themes - digital technologies that are helping 're-imagine' the relationship between consumers and businesses across industries, and the continuing industrialisation of software and computing. The Internet of Things (IoT), a composite of several digital technologies, is enabling new services to consumers. A number of research and innovation projects contributed to IoT offerings. The TCS IoT platform that is based on # Research and Innovation Research into cyber-physical systems in the innovation labs is now the backbone for offerings made by business units in areas such as retail, healthcare, energy, manufacturing, transportation and infrastructure. The factory employee health and safety wearable platform launched this year runs on the TCS IoT platform and features a real time two-way SOS alert and response mechanism while monitoring critical health and environmental parameters such as heart rate, body skin temperature, fall detection, immobility and carbon monoxide levels of workers. Related projects such as 'ageing in place' with Singapore Management University and the work with MIT Media Labs continue to make progress. Drone based applications, especially infrastructure management and damage assessment, were another area of importance in systems research. The Company's research in the applications area focused on deep learning platforms bringing the power of analytics to several industries. Research in e-mail mining, voice analytics, natural language processing, robotics and services automation is ongoing. The Company continues to work on areas such as genomics and metagenomics towards personalising medicine. Under software research work progressed on formal methods in verification and validation, model driven organisations and service design. Solutions that have moved from research to business such as the neural automation platform Ignio and the social platform 'Knome', are creating impact. The accessibility platform is promoting universal design principles in applications, thereby enabling applications to become more inclusive and reach larger segments of society. File: AR_TCS_2015_2016.md The TCS Co-Innovation Network (TCS COINTM) programme is expanding its footprint, both in academia as well as emerging technologies and incubators. TCS has established relationships with new partners in Australia (the University of Technology, Sydney, the University of Western Sydney and University of New South Wales). The Company is engaging with The Royal College of Art (London) and the National Institute of Design Ahmedabad for Design related initiatives. |
Apart from working through new and existing Academic Alliances, TCS Co-Innovation Network connected to several incubators and innovation hubs around the world. The full list is available at TCS Academic Alliances. The TCS Research Scholar Programme has funded 208 PhD scholars in five years (2010 -2015). The programme has been extended for another five years, by which the Company aims to support another 200 scholars through their doctoral work. The Company's research and innovation departments continue to be in close touch with customers through a series of Innovation Days. The Company triggered high quality discussions on new technologies with three editions of TCS Innovation Forum in North America (New York City, Chicago and Silicon Valley) and one in London, and with Co-Innovation Events in Sydney, Australia and Helsinki, Finland. TCS researchers published around 500 papers in academic conferences and journals. TCS has filed for 2,842 patents and has been granted 341 patents. TCS was recognised as the 'Top IP Driven Organisation of the Year' in the category of 'Large Enterprises' at 'CII Industrial Intellectual Property Award 2015'. For the 8th year in a row, TCS was on Forbes' Magazine's list of 'The World's Most Innovative Companies'. TCS innovators won many of the Tata Group awards such as for 'Challenges Worth Solving' and 'Tata Innovista'. 'e-Stetho', a product designed by TCS innovation labs - Kolkata, has won the '2016 Wearable Technology Product of the Year' award. Many researchers won individual awards in competitions. The Company will continue working on the major themes of digital re-imagination and industrialisation and explore areas related to software, data and decision sciences, cyber-physical systems and the intersection of multiple sciences and industry domains with computing technologies. # Expenditure on R&D TCS innovation labs are located in India and other parts of the world. These R&D centers, certified by Department of Scientific & Industrial Research (DSIR) function from Pune, Chennai, Bengaluru, Delhi- NCR, Hyderabad, Kolkata and Mumbai. # Annual Report 2015-16 # Expenditure incurred in the R&D centers and innovation centers of TCS during FY 2015-16 and FY 2014-15 are given below: |Expenditure on R&D and innovation|Unconsolidated| |Consolidated| | |---|---|---|---|---| | |2015-16|2014-15|2015-16|2014-15| |a. Capital|2.65|1.06|2.65|1.76| |b. Recurring|229.57|191.56|234.29|223.31| |c. Total R&D expenditure (a+b)|232.22|192.62|236.94|225.07| |d. Innovation center expenditure|780.36|620.62|884.42|684.18| |e. Total R&D and innovation expenditure (c+d)|1,012.58|813.24|1,121.36|909.25| |f. R&D and innovation expenditure as a percentage of total turnover|1.18%|1.11%|1.03%|0.96%| # Foreign exchange earnings and outgo Export revenue constituted 92.80% of the total unconsolidated revenue in FY 2015-16 (93.37% in FY 2014-15). |Foreign exchange earnings and outgo|2015-16|2014-15| |---|---|---| |a. Foreign exchange earnings|81,884.73|71,818.32| |b. CIF Value of imports|502.10|570.61| |c. Expenditure in foreign currency|29,554.53|24,745.56| # 27. Acknowledgement The directors thank the Company's employees, customers, vendors, investors and academic institutions for their continuous support. The directors also thank the governments of various countries, Government of India, governments of various states in India and concerned government departments / agencies for their co-operation. The directors appreciate and value the contributions made by every member of the TCS family. On behalf of the board of directors Cyrus Mistry Mumbai, April 18, 2016 Chairman # 50 Directors' Report # Annexure I # Form No. AOC-2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014) # Form for disclosure of particulars of contracts / arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto: # 1. Details of contracts or arrangements or transactions not at arm's length basis: Tata Consultancy Services Limited (the Company) has not entered into any contract/arrangement/transaction with its related parties which is not in ordinary course of business or at arm's length during FY 2015-16. The Company has laid down policies and processes/procedures so as to ensure compliance to the subject section in the Companies Act, 2013 ("Act") and the corresponding Rules. In addition, the process goes through internal and external checking, followed by quarterly reporting to the Audit Committee. |
- (a) Name(s) of the related party and nature of relationship: Not Applicable - (b) Nature of contracts/arrangements/transactions: Not Applicable - (c) Duration of the contracts / arrangements/transactions: Not Applicable - (d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable - (e) Justification for entering into such contracts or arrangements or transactions: Not Applicable - (f) Date(s) of approval by the Board: Not Applicable - (g) Amount paid as advances, if any: Not Applicable - (h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188: Not Applicable # 2. Details of material contracts or arrangement or transactions at arm's length basis: - a. Name(s) of the related party and nature of relationship: Not Applicable - b. Nature of contracts / arrangements / transactions: Not Applicable - c. Duration of the contracts / arrangements / transactions: Not Applicable - d. Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable - e. Date(s) of approval by the Board, if any: Not Applicable - f. Amount paid as advances, if any: None Note: The above disclosures on material transactions are based on the principle that transactions with wholly owned subsidiaries are exempt for purpose of section 188(1) of the Act. On behalf of the board of directors Cyrus Mistry Mumbai, April 18, 2016 Chairman Directors' Report 51 # Annual Report 2015-16 # Annexure II # ANNUAL REPORT ON CSR ACTIVITIES 1. A brief outline of the company's CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes: TCS' CSR policy is aimed at demonstrating care for the community through its focus on education & skill development, health & wellness and environmental sustainability including biodiversity, energy & water conservation. Also embedded in this objective is support to the marginalised cross section of the society by providing opportunities to improve their quality of life. The projects undertaken will be within the broad framework of Schedule VII of the Companies Act, 2013. In India, the CSR projects carried out in FY 2015-16 such as training of J&K youth to promote employability, providing functional literacy to adults, technology support to cancer research institutes and hospitals, training of women to encourage entrepreneurship, education of underprivileged children, construction of sanitation facilities in rural schools, support to disaster relief efforts, maintenance of Chinnappanahalli lake, etc. have benefitted the target communities across the country. Details of the CSR policy and projects or programmes undertaken by the Company are available on the website of the Company. In other countries of operation, the Company's CSR projects are designed and implemented to address the needs of the local community. Projects such as goIT, IT Futures and work experience programme have been created to specifically address the science, technology, engineering and mathematics (STEM) education skill gap. The Company's global CSR expenditure and details of global programmes are elaborated in the Business Responsibility Report. 2. The composition of the CSR committee: The Company has a CSR committee of directors comprising of Mr. Cyrus Mistry, Chairman of the Committee, Mr. O. P. Bhatt and Mr. N. Chandrasekaran. 3. Average net profit of the company for last three financial years for the purpose of computation of CSR: ₹ 17,994 crores. 4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): ₹ 360 crores. 5. Details of CSR spent during the financial year: - Total amount to be spent for the financial year: ₹ 360 crores. - Amount unspent: ₹ 66 crores. Some of the large programmes in the areas of healthcare, education and promoting employability are multi-year projects. - Manner in which the amount spent during the financial year: Attached 6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. Please refer to item no. 5(b) above. 7. A responsibility statement of the CSR committee that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and policy of the Company. We hereby declare that implementation and monitoring of the CSR policy are in compliance with CSR objectives and policy of the Company. N. |
Chandrasekaran Chief Executive Officer and Managing Director Cyrus Mistry Chairman, Corporate Social Responsibility Committee Mumbai, April 18, 2016 # Directors' Report # 5(c) Manner in which amount spent during the financial year is detailed below: |Sr. No.|CSR Project or Activity|Sector in which the project is covered|Projects or programs identified|Amount Outlay (budget) (` in crores)|Amount spent on the projects or programmes (` in crores)|Cumulative Expenditure (` in crores)|Amount spent: Direct or through implementing agency| |---|---|---|---|---|---|---|---| |1|Training and educating children, women, elderly, differently abled, scholarships, special education and increasing employability|Promoting education, including special education|Pan India|123.18|71.16|71.72|Through implementing agency| |2|Disaster relief, tech support for hospitals including cancer institutes, financing hygienic sanitation|Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation|Pan India|131.93|71.30|78.96|Through implementing agency| |3|Childline software support to track missing children|Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups|Pan India|1.09|1.09|1.09|Direct| |4|Desilting, repair and maintenance of Chinnappanahalli Lake|Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga|Bangalore|0.18|0.06|0.06|Direct| |5|Contribution to Prime Minister's National Relief Fund|Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women|Pan India|4.44|4.44|4.44|Through implementing agency| |6|Contribution to Trusts engaged in CSR|Flood relief [Disaster relief covered under items of Schedule VII of the Companies Act, 2013]|Chennai|13.80|13.80|13.80|Through implementing agency| |7|Contribution to TCS Foundation|Various sectors covered by Schedule VII of the Companies Act, 2013|Pan India|120.00|118.07|118.07|Through implementing agency| |8|Support for the restoration and renovation of the heritage structure|Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts|Mumbai|4.70|0.30|3.66|Direct| Sub-total: 399.33 280.22 291.81 Overheads: 14.01 Total CSR Spend: 294.23 Directors' Report 53 # Annual Report 2015-16 # Annexure III # Form No. MGT-9 # EXTRACT OF ANNUAL RETURN as on the financial year ended on March 31, 2016 [Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] # I. REGISTRATION AND OTHER DETAILS: - i. CIN: L22210MH1995PLC084781 - ii. Registration Date: January 19, 1995 - iii. Name of the Company: Tata Consultancy Services Limited - iv. Category / Sub-Category of the Company: Company Limited by shares / Indian Non-Government Company - v. Address of the Registered office and contact details: - 9th Floor, Nirmal Building, - Nariman Point, - Mumbai 400 021. - Tel: 91 22 6778 9595 - Fax: 91 22 6778 9660 - Email: [email protected] - Website: www.tcs.com - vi. Whether listed company: Yes - vii. Name, Address and Contact details of Registrar and Transfer Agent, if any: - TSR DARASHAW Limited - 6-10, Haji Moosa Patrawala Industrial Estate - 20, Dr. E. Moses Road - Mahalaxmi - Mumbai 400 011 - Tel: 91 22 6656 8484 - Fax: 91 22 6656 8494 - Email: [email protected] - Website: www.tsrdarashaw.com # II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company shall be stated: |Sl. No.|Name and Description of main products / services|NIC Code of the Product / service|% to total turnover of the company| |---|---|---|---| |1.|Computer Programming, Consultancy and Related Activities|620|100| # 54 Directors' Report # III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - |Sr. |
No.|Name and Address of the Company|CIN / GLN|Holding / Subsidiary / Associate|% of shares held|Applicable Section| |---|---|---|---|---|---| |1.|Tata Sons Limited Bombay House, 24, Homi Modi Street, Mumbai 400 001|U99999MH1917PLC000478|Holding|73.26|2(46)| |2.|APTOnline Limited (formerly known as APOnline Limited) Kohinoor, e-Park Plot No.1, Jubilee Gardens, Hyderabad -500081, Telangana, India|U75142TG2002PLC039671|Subsidiary|89|2(87)| |3.|C-Edge Technologies Limited Palm Centre, Banyan Park, Suren Road, Andheri East, Mumbai 400 093, Maharashtra, India|U72900MH2006PLC159038|- do -|51|2(87)| |4.|MP Online Limited Nirupam, Shopping Mall, 2nd Floor, Ahmedpur, Hoshangabad Road, Bhopal - 462026, Madhya Pradesh, India|U72400MP2006PLC018777|- do -|89|2(87)| |5.|TCS e-Serve International Limited 9th Floor, Nirmal Building, Nariman Point, Mumbai 400021, Maharashtra, India|U72300MH2007PLC240002|- do -|100|2(87)| |6.|MahaOnline Limited Directorate of Information Technology, Mantralaya Annex, 7th Floor, Mumbai - 400032, Maharashtra, India|U72900MH2010PLC206026|- do -|74|2(87)| |7.|TCS Foundation Nirmal, 9th floor, Nariman Point, Mumbai 400 021 Maharashtra, India|U74999MH2015NPL262710|- do -|100|2(87)| |8.|Tata Consultancy Services (Africa) (PTY) Ltd. 39 Ferguson Road, Illovo, Johannesburg 2196, South Africa|Not applicable|- do -|100|2(87)| |9.|Tata Consultancy Services (South Africa) (PTY) Ltd. 39 Ferguson Road, Illovo, Johannesburg 2196, South Africa|- do -|- do -|75|2(87)| |10.|Tata Consultancy Services Qatar S. S. C. 935 Al Fardan Office Tower, Al Fardan 61, P.O. Box No. 31316, Doha, State of Qatar|- do -|- do -|100|2(87)| |11.|Tata Consultancy Services Saudi Arabia th Akaria, Centre II, 7th Floor, Office No 712, Kingdom of Saudi Arabia|- do -|- do -|76|2(87)| |12.|Tata Consultancy Services Asia Pacific Pte Ltd. 60, Anson Road, # 18-01, Mapletree Anson, Singapore 079914|- do -|- do -|100|2(87)| |13.|Tata Consultancy Services Malaysia Sdn Bhd Level 8, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia|- do -|- do -|100|2(87)| |14.|Tata Consultancy Services (China) Co., Ltd. 1st floor, Tower D 3rd Block Zhongguancun Software Park Building No. 9, No. 8 Dongbeiwang West Road, Haidian District, Beijing, Peoples Republic of China|- do -|- do -|90|2(87)| |15.|PT Tata Consultancy Services Indonesia Gedung Menara Prima Lt.6 Unit F, Jl. Dr. Ide Anak Agung Gde Agung Blok 6.2, Kawasan Mega Kuningan Kel. Kuningan Timur, Kec. Setiabudi Jakarta Selatan 12950|- do -|- do -|100|2(87)| Directors' Report 55 # Annual Report 2015-16 |Sr. No.|Name and Address of the Company|CIN / GLN|Holding/% of shares|Applicable Section| |---|---|---|---|---| |16|Tata Consultancy Services (Thailand) Limited 32/46, Sino-Thai Tower, 18th Floor, Sukhumvit 21 Road (Asoke) Road, Klongtoey-Nua Sub-District, Wattana District, Bangkok|- do -|100|2(87)| |17|Tata Consultancy Services (Philippines) Inc. 10th Floor Accralaw Tower, 30th St., cor 2nd Ave. E-Square IT Zone, Crescent Park West, Bonifacio Global City, Taguig City Philippines 1634|- do -|100|2(87)| |18|Tata Consultancy Services Japan, Ltd. 4th Floor, 38 Masonic Mt Building, 4-1-4 Shibakoen, Minato Ku, Tokyo 105-8551, Japan|- do -|51|2(87)| |19|Tata Consultancy Services Canada Inc. 400 University Avenue, 25th Floor, Toronto, Ontario M5G 1S5, Canada|- do -|100|2(87)| |20|Tata Consultancy Services De Espana S.A. C/ Santa Leonor 65, Edificio F 2planta 28037, Madrid, Spain|- do -|100|2(87)| |21|Tata Consultancy Services Deutschland GmbH Messeturm, D-60308 Frankfurt a.M., Germany|- do -|100|2(87)| |22|Tata Consultancy Services Netherlands BV Symphony Towers, 20th Floor, Gustav Mahlerplein 85-91, 1082 MS Amsterdam The Netherlands|- do -|100|2(87)| |23|Tata Consultancy Services Sverige AB Mäster Samuelsgatan, 42 SE 111 57, Sweden|- do -|100|2(87)| |24|Tata Consultancy Services Belgium S.A. Lenneke Marelaan 6, 1932 Sint-Stevens-Woluwe, Belgium|- do -|100|2(87)| |25|TCS Italia SRL Via Dei Piatti, 4, C/o. Business Centre Thurma, 20123 Milano, Italy|- do -|100|2(87)| |26|Diligenta Limited Lynch Wood, Peterborough, Cambridgeshire, PE2 6FY, United Kingdom|- do -|100|2(87)| |27|Tata Consultancy Services Portugal Unipessoal Limitada Av. José Gomes Ferreira, 15.7 U, 1495-139 Algés Portugal|- do -|100|2(87)| |28|Tata Consultancy Services Luxembourg S.A. Rue Pafebruch 89D, L - 8308 Capellen, Luxembourg|- do -|100|2(87)| |29|Tata Consultancy Services Switzerland Ltd Thurgauerstrasse 36/38, 8050 Zurich, Switzerland|- do -|100|2(87)| |30|Tata Consultancy Services France SAS Tour Franklin - La Defense, 8 100-101 Quartier Boieldieu, 92042 Paris La Defense Cedex, Paris 92053, France|- do -|100|2(87)| |31|Diligenta 2 Limited Lynch Wood, Peterborough, Cambridgeshire, PE2 6FY, United Kingdom|- do -|100|2(87)| # Directors' Report # Directors' Report |Sr. No.|Name and Address of the Company|CIN / GLN|Holding/% of shares|Applicable Section| |---|---|---|---|---| |32|Tata Consultancy Services Osterreich GmbH Schottengasse 1, 1010 Wien, Austria|- do -|100|2(87)| |33|Tata Consultancy Services Danmark ApS C/o CityCallCenter ApS, Hammerensgade 1, 2, 1267 Kobenhavn K, Denmark|- do -|100|2(87)| |34|Alti S.A. 88 de Villers, 92300 Levallois Perret, Paris, France|- do -|100|2(87)| |35|Planaxis Technologies Inc. 505, Boulevard de la Maisonneuve, Ouest H3A 3C2 Montréal (Quebec), Canada|- do -|100|2(87)| |36|ALTI HR S.A.S. 88, rue de Villiers, 92300 Levallois Perret, Paris, France|- do -|100|2(87)| |37|ALTI INFRASTRUCTURES SYSTEMES & RESEAUX S.A.S. |
88, rue de Villiers, 92300 Levallois Perret, Paris, France|- do -|100|2(87)| |38|ALTI NV Lenneke Marelaan 6 - 1932 Zaventem, (Belgium)|- do -|100|2(87)| |39|Tescom (France) Software Systems Testing S.A.R.L. 88, rue de Villiers, 92300 Levallois Perret, Paris, France|- do -|100|2(87)| |40|ALTI Switzerland S.A. Avenue Louis-Casaî - Genève, (Suisse)|- do -|100|2(87)| |41|TEAMLINK Struikheidestraat 2, 8020 Hertsberge - Belgique (Belgium)|- do -|100|2(87)| |42|TCS FNS Pty Limited Level 6, 76 Berry Street, North Sydney, NSW 2060 Australia|- do -|100|2(87)| |43|TCS Financial Solutions Australia Holdings Pty Limited Level 6, 76 Berry Street, North Sydney, NSW 2060 Australia|- do -|100|2(87)| |44|TCS Financial Solutions Australia Pty Limited Level 6, 76 Berry Street, North Sydney, NSW 2060 Australia|- do -|100|2(87)| |45|PT Financial Network Services Menara Prima # 16 - F, Jl. DR. Ide Anak Agung Gde Agung Blok 6.2, Kawasan Mega Kuningan, Jakarta Selatan, 12950 - Indonesia|- do -|100|2(87)| |46|TCS Financial Solutions Beijing Co., Ltd. (04) Floor 3, 10 Futong East Street, Chaoyang District, Beijing, Postcode : 100102, Peoples Republic of China|- do -|100|2(87)| |47|TCS Iberoamerica SA Colonia 1329; piso 3, Montevideo, Uruguay.|- do -|100|2(87)| |48|TCS Solution Center S.A. Ruta 8 km 17500, Zonamerica, Ed 60, Ecuador|- do -|100|2(87)| |49|Tata Consultancy Services Argentina S.A. Uspallata 3046; Ciudad Autónoma de Buenos Aires, Argentina (CP: C1437JCJ)|- do -|99.99|2(87)| # Directors' Report |Sr. No.|Name and Address of the Company|CIN / GLN|Holding/% of shares|Applicable Section| |---|---|---|---|---| |50|Tata Consultancy Services De Mexico S.A., De C.V. Av. Insurgentes Sur 664, 2nd Floor, Colonia Del Valle, México, D.F., México (Postal Code: 03100)|- do -|100|2(87)| |51|TCS Inversiones Chile Limitada Curico 18, Santiago, Chile|- do -|99.99|2(87)| |52|Tata Consultancy Services Do Brasil Ltda Av. Aruanã, 70. Tamboré - Barueri; São Paulo, Brazil (Postal Code: 06460-010)|- do -|100|2(87)| |53|Tata Consultancy Services Chile S.A. Curicó 18, piso 3, Oficina 502, Santiago, Chile|- do -|100|2(87)| |54|TATASOLUTION CENTER S.A Francisco Salazar E10-61 and Camilo Destruge Building INLUXOR 7th Floor; Quito, Ecuador|- do -|100|2(87)| |55|TCS Uruguay S.A. Colonia 1329; Piso 3, Montevideo, Uruguay (Postal Code: 11100)|- do -|100|2(87)| |56|Technology Outsourcing S.A.C Av. Nicolas Ayllon Nº 2491 (3er. Piso) El Agustino, Peru|- do -|100|2(87)| |57|MGDC S.C. Avenue Tizoc No. 97, Colonia Ciudad del Sol; Zapopan Jalisco, México, (Postal Code: 45050)|- do -|100|2(87)| |58|Tata America International Corporation 101, Park Avenue, 26th Floor, New York 10178, U.S.A.|- do -|100|2(87)| |59|CMC Americas Inc. 4354 South Sherwood Forest Building, Suit No 175, Baton Rouge, Louisiana 70816, U.S.A.|- do -|100|2(87)| |60|TCS e-Serve America, Inc. Corporation Trust Center, 1209, Orange Street, Wilmington, New Castle County, Delaware - 19801 U.S.A.|- do -|100|2(87)| |61|MS CJV Investments Corporation C/o CSC Services of Nevada, Inc., (Commercial Registered Agent), 502 East John Street, Carson City, NV 89706, U.S.A.|- do -|100|2(87)| |62|CMC eBiz Inc Suit No. 400, Stonebridge Plaza II, 9600 North MoPac Expressway, AUSTIN, Texas-78759, U.S.A.|- do -|100|2(87)| # IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) # i. Category-wise Shareholding |Category of Shareholders|No. of Shares held at the beginning of the year i.e 01.04.2015|No. of Shares held at the end of the year i.e 31.03.2016|% of Total Shares|Change during the year| | | | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---| |A. Promoters| |Demat| |Physical|Total|% of Total|Demat|Physical|Total|% of Total| | | |a. Individuals / Hindu Undivided Family| | | |0|0|0|0|0|0|0|0|0| |b. Central Government / State Governments(s)| | | |0|0|0|0|0|0|0|0|0| |c. Bodies Corporate| |1,445,813,486| |0|1,445,813,486|73.814|1,445,125,286|0|1,445,125,286|73.341|(0.474)| | |d. Financial Institutions / Banks| | | |0|0|0|0|0|0|0|0|0| |e. Others - Trust| |1,607,624|0|1,607,624| |0.082|1,607,624|0|1,607,624|0.082|0.000| | |Sub-Total (A) (1)| |1,447,421,110|0|1,447,421,110| |73.896|1,446,732,910|0|1,446,732,910|73.423|(0.474)| | |2. Foreign| | | | | | | | | | | | | |a. Individuals (Non-Resident Individuals / Foreign Individuals)| | | |0|0|0|0|0|0|0|0|0| |b. Bodies Corporate| | | |0|0|0|0|0|0|0|0|0| |c. Institutions| | | |0|0|0|0|0|0|0|0|0| |d. Qualified Foreign Investor| | | |0|0|0|0|0|0|0|0|0| |e. Others - Trust| | | |0|0|0|0|0|0|0|0|0| |Sub-Total (A) (2)| | |0|0|0|0|0|0|0|0|0| | |Total Shareholding of Promoter and Promoter Group (A)| |1,447,421,110|0|1,447,421,110| |73.896|1,446,732,910|0|1,446,732,910|73.423|(0.474)| | |B. Public Shareholding| | | | | | | | | | | | | |1. Institutions| | | | | | | | | | | | | |a. Mutual Funds / UTI| |17,187,315| |1,773|17,189,088|0.878|21,568,174|1,773|21,569,947|1.095|0.217| | |b. Financial Institutions / Banks| |481,037| |2,703|483,740|0.025|1,006,863|2,703|1,009,566|0.051|0.027| | |c. Central Government / State Governments(s)|495,610| |0|495,610| |0.025|700,233|0|700,233|0.036|0.010| | |d. Venture Capital Funds| | | |0|0|0|0|0|0|0|0|0| |e. Insurance Companies| |73,858,592| |0|73,858,592|3.771|78,604,759|0|78,604,759|3.989|0.218| | |f. Foreign Institutional Investors| |292,590,035|0|292,590,035| |14.938|200,246,839|0|200,246,839|10.163|(4.775)| | # Annual Report 2015-16 |Category of Shareholders|No. of Shares held at the beginning of the year i.e 01.04.2015|No. of Shares held at the end of the year i.e 31.03.2016|% of Total Shares during the year| |---|---|---|---| |g. Foreign Venture Capital Investors|0|0|0| |h. |
Qualified Foreign Investor|0|0|0| |i. Foreign Portfolio Investors (Corporate)|39,280,903|131,330,700|4.660| |j. Any Other (specify)|0|0|0| |Sub-Total (B) (1)|423,893,492|433,457,568|0.357| |2. Non-Institutions| | | | |a. Bodies Corporate|6,631,652|6,752,570|0.004| |b. Individuals -| | | | |i. Individual shareholders holding nominal share capital upto ` 1 lakh|63,515,258|64,948,729|0.050| |ii. Individual shareholders holding nominal share capital in excess of ` 1 lakh|14,053,858|14,112,114|(0.001)| |c. Qualified Foreign Investor|0|0|0| |d. Any Other|0|0|0| |i. Trusts|1,168,608|1,804,991|0.032| |ii. Foreign Companies|28|28|0.000| |iii. Clearing Members / Clearing House|817,539|1,458,692|0.032| |Sub-total (B) (2)|86,186,943|89,077,124|0.117| |Total Public Shareholding (B) = (B)(1)+(B)(2)|510,080,435|522,534,692|0.474| |TOTAL (A)+(B)|1,957,501,545|1,969,267,602|0.000| |C. Shares held by Custodians and against which Depository Receipts have been issued|0|0|0| |GRAND TOTAL (A)+(B)+(C)|1,957,501,545|1,969,267,602|0.000| # Directors' Report # ii. Shareholding of Promoters (including Promotor Group) |Sr. No.|Shareholder's Name|Shareholding at the beginning of the year 01.04.2015|Shareholding at the end of the year 31.03.2016|% change in shareholding during the year| |---|---|---|---|---| |1.|Tata Sons Limited|No. of Shares: 1,443,451,698 % of total Shares of the company: 73.69 % of Shares Pledged/encumbered to total shares: 1.33|No. of Shares: 1,443,451,698 % of total Shares of the company: 73.26 % of Shares Pledged/encumbered to total shares: 2.31|(0.44)| |2.|Jamsetji Tata Trust|No. of Shares: 1,160,280 % of total Shares of the company: 0.06 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 1,160,280 % of total Shares of the company: 0.06 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |3.|Tata Industries Limited|No. of Shares: 1,029,700 % of total Shares of the company: 0.05 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 363,700 % of total Shares of the company: 0.02 % of Shares Pledged/encumbered to total shares: 0.00|(0.03)| |4.|AF-Taab Investment Company Limited|No. of Shares: 633,352 % of total Shares of the company: 0.03 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 611,352 % of total Shares of the company: 0.03 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |5.|Tata Investment Corporation Limited|No. of Shares: 590,452 % of total Shares of the company: 0.03 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 590,452 % of total Shares of the company: 0.03 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |6.|Navajbai Ratan Tata Trust|No. of Shares: 447,344 % of total Shares of the company: 0.02 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 447,344 % of total Shares of the company: 0.02 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |7.|Tata International Limited|No. of Shares: 83,232 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 83,232 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|0.00| File: AR_TCS_2015_2016.md |8.|Tata Steel Limited|No. of Shares: 24,400 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 24,400 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |9.|Tata Power Company Limited|No. of Shares: 452 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 452 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |10.|Tata Capital Limited|No. of Shares: 200 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|No. of Shares: 0 % of total Shares of the company: 0.00 % of Shares Pledged/encumbered to total shares: 0.00|0.00| |Total| |No. of Shares: 1,447,421,110 % of total Shares of the company: 73.90 % of Shares Pledged/encumbered to total shares: 1.33|No. of Shares: 1,446,732,910 % of total Shares of the company: 73.42 % of Shares Pledged/encumbered to total shares: 2.31|(0.47)| # iii. Change in Promoters' (including Promotor Group) Shareholding (please specify, if there is no change) |SL No.|Name of the Shareholder|Shareholding at the beginning of the year as on 01.04.2015|Date|Reason|Increase/ Decrease in Shareholding|Cumulative Shareholding during the Year| |---|---|---|---|---|---|---| |1.|AF-Taab Investment Company Limited|No. of Shares: 633,352 % of Total Shares of the Company: 0.03|28.03.2016|Sale of shares|(22,000)|No. of Shares: 611,352 % of Total Shares of the Company: 0.03| |2.|Tata Industries Limited|No. of Shares: 1,029,700 % of Total Shares of the Company: 0.05|15.05.2015|Sale of shares|(666,000)|No. of Shares: 363,700 % of Total Shares of the Company: 0.02| |3.|Tata Capital Limited|No. of Shares: 200 % of Total Shares of the Company: 0.00|05.02.2016|Sale of shares|(200)|No. of Shares: 0 % of Total Shares of the Company: 0.00| # Annual Report 2015-16 # iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): |Sr. |
No.|Top 10 Shareholders*|Shareholding at the beginning of the year|Cumulative Shareholding at the end of the year| |---|---|---|---| |1.|Life Insurance Corporation of India|No. of shares: 48,141,245 % of total shares of the company: 2.46|No. of shares: 58,521,537 % of total shares of the company: 2.97| |2.|Abu Dhabi Investment Authority|No. of shares: 16,325,578 % of total shares of the company: 0.83|No. of shares: 14,165,505 % of total shares of the company: 0.72| |3.|Government of Singapore|No. of shares: 9,095,739 % of total shares of the company: 0.46|No. of shares: 11,299,187 % of total shares of the company: 0.57| |4.|Oppenheimer Developing Markets Fund|No. of shares: 10,977,181 % of total shares of the company: 0.56|No. of shares: 8,309,112 % of total shares of the company: 0.42| |5.|National Westminster Bank Plc As Depository of First State Asia Pacific Leaders Fund a sub Fund of First State Investments ICVC|No. of shares: 7,706,168 % of total shares of the company: 0.39|No. of shares: 8,285,641 % of total shares of the company: 0.42| |6.|Europacific Growth Fund|No. of shares: 0 % of total shares of the company: 0.00|No. of shares: 7,966,000 % of total shares of the company: 0.40| |7.|Lazard Asset Management LLC A/C Lazard Emerging Markets Portfolio|No. of shares: 7,793,168 % of total shares of the company: 0.40|No. of shares: 7,682,828 % of total shares of the company: 0.39| |8.|Copthall Mauritius Investment Limited|No. of shares: 7,264,148 % of total shares of the company: 0.37|No. of shares: 7,361,719 % of total shares of the company: 0.37| |9.|Vanguard Emerging Markets Stock Index Fund, A series of Vanguard International Equity Index Fund|No. of shares: 8,550,350 % of total shares of the company: 0.44|No. of shares: 7,211,765 % of total shares of the company: 0.37| |10.|Aberdeen Global Indian Equity (Mauritius) Limited|No. of shares: 8,465,000 % of total shares of the company: 0.43|No. of shares: 7,122,473 % of total shares of the company: 0.36| *The shares of the Company are traded on a daily basis and hence the datewise increase / decrease in shareholding is not indicated. Shareholding is consolidated based on permanent account number (PAN) of the shareholder. # v. Shareholding of Directors and Key Managerial Personnel: |Sr. No.|Name|Date|Reason|Shareholding at the beginning of the year|Cumulative Shareholding during the year| |---|---|---|---|---|---| |1.|Mr. Cyrus Pallonji Mistry|1-Apr-2015| |No. of shares: 4,163,526 % of total shares of the company: 0.21|No. of shares: 4,163,526 % of total shares of the company: 0.21| | | |31-Mar-2016| | |No. of shares: 4,163,526 % of total shares of the company: 0.21| |2.|Mr. N. Chandrasekaran|1-Apr-2015| |No. of shares: 88,528 % of total shares of the company: 0.00|No. of shares: 88,528 % of total shares of the company: 0.00| | | |31-Mar-2016| | |No. of shares: 88,528 % of total shares of the company: 0.00| |3.|Mr. Ishaat Hussain|1-Apr-2015| |No. of shares: 1,740 % of total shares of the company: 0.00|No. of shares: 1,740 % of total shares of the company: 0.00| | | |31-Mar-2016| | |No. of shares: 1,740 % of total shares of the company: 0.00| |4.|Ms. Aarthi Subramanian|1-Apr-2015| |No. of shares: 2,800 % of total shares of the company: 0.00|No. of shares: 2,800 % of total shares of the company: 0.00| | | |31-Mar-2016| | |No. of shares: 2,800 % of total shares of the company: 0.00| |1.|Mr. Rajesh Gopinathan|1-Apr-2015| |No. of shares: 130 % of total shares of the company: 0.00|No. of shares: 130 % of total shares of the company: 0.00| | | |15-Jan-2016|Purchase of shares| |No. of shares: 1,000 % of total shares of the company: 0.00| | | |31-Mar-2016| |No. of shares: 130 % of total shares of the company: 0.00|No. of shares: 1,130 % of total shares of the company: 0.00| # 62 Directors' Report # V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment | |Secured Loans|Unsecured Loans|Deposits|Total Indebtedness| |---|---|---|---|---| |excluding deposits|Note 1|Note 2|Note 3| | |Indebtedness at the beginning of the financial year| | | | | |i) Principal Amount|86.24|186.61|10.50|283.35| |ii) Interest due but not paid|0.00|0.00|0.00|0.00| |iii) Interest accrued but not due|0.00|0.02|0.00|0.02| |Total (i+ii+iii)|86.24|186.63|10.50|283.37| |Change in Indebtedness during the financial year| | | | | |*** t on|90.57|0.00|2.00|92.57| |*** Re u t on|0.00|(184.88)|0.00|(184.88)| |Net Change|90.57|(184.88)|2.00|(92.31)| |Indebtedness at the end of the financial year| | | | | |i) Principal Amount|176.81|1.74|12.50|191.05| |ii) Interest due but not paid|0.00|0.00|0.00|0.00| |iii) Interest accrued but not due|0.00|0.01|0.00|0.01| |Total (i+ii+iii)|176.81|1.75|12.50|191.06| Notes: 1. These liabilities represent obligations under finance lease including current portion of obligations of ` 65.01 crores and bank overdraft of ` 111.80 crores as of March 31, 2016. 2. |
These represent the bank overdraft of ` 1.16 crores and other borrowings as of March 31, 2016. 3. These are deposits received on account of sub-lease of premises and from vendors for contracts to be executed. # VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL # A. Remuneration to Managing Director, Whole-time Directors and / or Manager: |Sr. No.|Particulars of Remuneration|Name of MD/WTD/Manager|Total Amount| | |---|---|---|---|---| | | |Mr. N. Chandrasekaran CEO & MD|Ms. Aarthi Subramanian, ED| | |1.|Gross salary| | | | | |(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961|228.60|58.14|286.74| | |(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961|264.10|0.16|264.26| | |(c) Profits in lieu of salary under Section 17(3) of the Income tax Act, 1961|-|-|-| |2.|Stock Option|-|-|-| |3.|Sweat Equity|-|-|-| |4.|Commission|1,900.00|100.00|2,000.00| | |- as % of profit|0.066|0.003|0.069| |5.|Others, Allowances|173.23|116.86|290.09| |Total (A)| |2,565.93|275.16|2,841.09| |Ceiling as per the Act (@ 10% of profits calculated under Section 198 of the Companies Act, 2013)| | | |288,216.50| Directors' Report 63 # Annual Report 2015-16 # B. Remuneration to other directors: (` Lakh) |Sr. No.|Particulars of Remuneration|Fee for attending board / committee meetings|Commission|Others, please specify|Total Amount| |---|---|---|---|---|---| |1.|Independent Directors| | | | | | |Mr. Aman Mehta|5.40|230.00|-|235.40| | |Mr. V. Thyagarajan|6.60|160.00|-|166.60| | |Prof. Clayton M. Christensen|2.40|125.00|-|127.40| | |Dr. Ron Sommer|4.80|170.00|-|174.80| | |Dr. Vijay Kelkar|4.80|135.00|-|139.80| | |Mr. O. P. Bhatt|7.80|140.00|-|147.80| |Total (1)| |31.80|960.00| |991.80| |2.|Other Non-Executive Directors| | | | | | |Mr. Cyrus Mistry|4.20|-|-|4.20| | |Mr. Ishaat Hussain|5.40|175.00|-|180.40| | |Mr. Phiroz Vandrevala|2.40|65.00|-|67.40| |Total (2)| |12.00|240.00| |252.00| |Total (B)=(1+2)| |43.80|1,200.00| |1243.80| |Total Managerial Remuneration| | |1,200.00| | | |Ceiling as per the Act (@ 1% of profits| | | |28,821.65| | |calculated under Section 198 of the Companies Act, 2013)| | | | | | # C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD (` Lakh) |Sr. No.|Particulars of Remuneration|Key Managerial Personnel| |Total| |---|---|---|---|---| |1.|Gross salary|Mr. Rajesh Gopinathan, CFO|Mr. Suprakash Mukhopadhyay, Company Secretary| | | |a. Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961|50.90|32.75|83.65| | |b. Value of perquisites u/s 17(2) of the Income-tax Act, 1961|0.40|25.54|25.94| | |c. Profits in lieu of salary under Section 17(3) of the Income-tax Act, 1961|-|-|-| |2.|Stock Option|-|-|-| |3.|Sweat Equity|-|-|-| |4.|Commission|-|-|-| |5.|Others, Allowances|246.73|104.48|351.21| |Total| |298.02|162.78|460.80| Note: Please refer to the note given under Section III.B.vii.b on page no. 112 of the Corporate Governance Report. # VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: There were no penalties, punishment or compounding of offences during the year ended March 31, 2016. # 64 Directors' Report # FORM No. MR-3 # SECRETARIAL AUDIT REPORT # FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2016 [Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Tata Consultancy Services Limited We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Tata Consultancy Services Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the company, the information provided by the company, its officers, agents and authorised representatives during the conduct of secretarial audit, the explanations and clarifications given to us and the representations made by the Management, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2016 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records made available to us and maintained by the Company for the financial year ended on 31st March, 2016 according to the applicable provisions of: 1. The Companies Act, 2013 ('the Act') and the rules made there under; 2. The Securities Contract (Regulation) Act, 1956 ('SCRA') and the rules made there under; 3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; 4. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; 5. |
The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act') 1. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; 2. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; 3. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and amendments from time to time; 4. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the Company during the audit period) 5. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the Company during the audit period) 6. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client (Not applicable to the Company during the audit period); 7. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period) 8. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not applicable to the Company during the audit period) 6. Other laws specifically applicable to the Company namely- 1. Information Technology Act, 2000 and the rules made thereunder; 2. Special Economic Zones Act, 2005 and the rules made thereunder; 3. Software Technology Parks of India rules and regulations; 4. The Indian Copyright Act, 1957; 5. The Patents Act, 1970; 6. The Trade Marks Act, 1999. Directors' Report 65 # Annual Report 2015-16 We have also examined compliance with the applicable clauses of the following: 1. Secretarial Standards issued by The Institute of Company Secretaries of India, with respect to board and general meetings. 2. The Listing Agreements entered into by the Company with National Stock Exchange of India Limited and BSE Limited read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015. During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above. However, the Company has spent an amount of ` 294 crores against the amount of ` 360 crores to be spent during the year towards Corporate Social Responsibility. We further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice was given to all Directors to schedule the Board Meetings. Agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Decisions at the Board Meetings were taken unanimously. We further report that there are adequate systems and processes in the Company that commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period the Company had following event which had bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, standards, guidelines etc. CMC Limited (CMC) was amalgamated with the Company pursuant to the orders of the Hon'ble High Court of Judicature at Bombay and Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh sanctioning amalgamation of CMC with the Company. For Parikh & Associates Company Secretaries P. N. Parikh Partner Mumbai, April 18, 2016 FCS No: 327 CP No: 1228 This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. To, 'Annexure A' The members, Tata Consultancy Services Limited Our report of even date is to be read along with this letter. 1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. |
We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe that the process and practices we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. 4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events, etc. 5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For Parikh & Associates Company Secretaries P. N. Parikh Partner Mumbai, April 18, 2016 FCS No: 327 CP No: 1228 # Directors' Report # Management Discussion and Analysis 67 # Annual Report 2015-16 # Management Discussion and Analysis # 1. A Macro view In 2015, global economic activity remained subdued, with world output slowing down further to 3.1%1. Emerging markets and developing economies grew 4%, a year-on-year deceleration for the fifth consecutive year. Steep falls in oil prices, continued weakness in commodity prices, a slowdown in China and deep recessions in some large emerging market economies more than offset strong growth in India and some of the ASEAN economies. Developed economies which are key markets for information technology (IT) services grew a modest 1.9% in aggregate - US (2.4%), UK (2.2%), Euro Area (1.6%) and Japan (0.5%), hampered by weak demand, unfavorable demographics and low productivity growth. This was the weak macroeconomic backdrop against which large global corporations sought to become efficient even as they used technology to fend off business model challenges, establish competitive differentiation, show revenue & earnings growth and stay compliant in a shifting regulatory landscape. # 2. Overview of the industry The global market for outsourced IT - business process management (BPM) services grew a mere 0.4% over the prior year to $1.2 trillion. Within this, IT services registered a small decline of 0.2% year-on-year while package implementation grew 0.2% over the prior year and BPM grew 3% over the prior year. Sharp cross-currency movements during the year diminished the non-dollar denominated components of the global market when reported in USD. In terms of the drivers of growth, the relentless quest for efficiency continued in fiscal 2016, with management teams taking a more strategic approach to structural cost take out. Digital technology adoption progressed apace, with early projects delivering better than anticipated outcomes and resulting in larger and more ambitious digital re-imagination programmes taking wing. Some industries saw additional spending triggered by regulatory compliance activities. # 3. Our business TCS is an information technology services, consulting and business solutions company, servicing large global corporations across a range of industry verticals including banking, financial services & insurance, retail & consumer packaged goods (CPG), telecom, media & entertainment, manufacturing, hi-tech, life sciences & healthcare, energy, resources & utilities, travel, transportation & hospitality and government sectors. The Company's expertise in traditional and new age technologies extends across its full services portfolio of consulting and enterprise solutions, application development & maintenance, assurance services, engineering & industrial services, IT infrastructure services, business process services and asset leveraged solutions. These services are delivered through its unique global network delivery model (GNDM™), recognised as the benchmark of excellence in software development. With over 353,000 employees and a global delivery footprint that covers over 145 solution centers, TCS is amongst the world's top 10 IT service-providers. TCS' focus on execution excellence, its scale, domain expertise and its array of intellectual property have been recognised by customers, giving the Company tremendous traction in the various markets it operates in. The Company's compounded annual growth rate (CAGR) since fiscal 2007 is 21.6%, with industry-leading operating margins. # 4. Strategy The Company's strategy for longer term growth has been to (a) continually expand its addressable market by investing in newer geographies, newer industry verticals and newer service lines and (b) strengthen and deepen existing client relationships through a customer-centric approach, superior execution that gives clients an experience of certainty, a full services capability and a scalable global network delivery model (GNDMTM). |
The first element of strategy has resulted in a de-risked business portfolio that is broadly diversified across all three dimensions: geography, industry verticals and service lines, lending the business substantial resiliency from local or sectoral business cycle volatility. Details have been provided in discussion on revenue. The second element of strategy has resulted in very large, deep and enduring relationships with some of the world's largest corporations. Success in this area is measured by looking at the number of customers in each revenue bucket and how they progress up the revenue buckets with time. In fiscal 2016, the Company added 8 more clients in the $100 million+ revenue band, bringing the total to 37 and in the $10 million+ revenue band, the Company added 37 clients this year, bringing the total to 298. 1 http://www.imf.org/external/pubs/ft/survey/so/2016/NEW041216A.htm | |Fiscal 2011|Fiscal 2012|Fiscal 2013|Fiscal 2014|Fiscal 2015|Fiscal 2016| |---|---|---|---|---|---|---| |US$ 100m+ clients|8|14|17|24|29|37| |US$ 50m+ clients|27|43|52|53|68|73| |US$ 20m+ clients|81|99|121|136|162|173| |US$ 10m+ clients|143|170|211|231|261|298| |US$ 5m+ clients|208|245|290|354|389|429| |US$ 1m+ clients|458|522|638|714|791|829| # 5. Digital technologies TCS has been one of the earliest technology players to explicitly call out the deep impact that the digital forces would have on enterprises, consumers, governments and on societies. As enterprises dematerialised their assets and got hyper-connected, operations became more software-driven and generated masses of real time data which could be mined for actionable insights. Our Digital Reimagination™ framework provided a holistic roadmap for our customers to bring to bear the power of these new technologies while reinventing their business models, products and services, channels, customer segments, business processes and workplaces. In fiscal 2016, digital adoption continued apace and the Company's participation in customers' digital spending grew substantially. With the scale and scope of digital programmes increasing beyond the pure front-end space and pervading the rest of the underlying application stack, our scale and digital capability position us very strongly to become the preferred digital partner for more and more clients. Over half of our customers, spanning across every single industry vertical, have engaged TCS to partner them in their digital journey. Revenues from digital engagements constituted 13.8% of the Company's revenues in fiscal 2016, while in absolute terms, the digital revenues grew by 52.2% in constant currency over fiscal 2015. This substantial traction has been made possible by sustained, proactive investments made by TCS over the last several years across multiple areas so that when customers were ready to ramp up their investments in this exciting new space, the Company was more than ready to fulfill their requirements. Some of the investments are detailed in the following sections. # 5.1 Talent development in digital space The Company's early lead in digital came on account of proactively scaling up the digital talent pool within the organisation. In addition to expanding the Company's hiring programme to cover a broader spectrum of diverse skills, TCS is also investing heavily in a scalable programme to re-skill the workforce and endow employees with skills - soft skills, design skills, multi-technology skills and domain skills - that are critical to stay relevant in the digital era. At the center of this new approach is TCS' digital learning platform - an integrated ecosystem that combines virtual, physical and experiential learning infrastructure with high quality content and available any place, any time and on any device. The platform offers courses on a multitude of different digital tools, platforms and skill-sets, and allows individuals to pick what they want to learn, learn it the way they want to, and to the extent or depth that they require for a particular role. From a 'push' model of training, the Company has moved to an employee-centric 'pull' model, which is more in line with the demands of the digital era and also the millennial mindset. Employee feedback has been very positive and the outcomes have far exceeded expectations. In fiscal 2016, the Company has been able to impart over 349,000 competencies to over 120,000 employees. # 5.2 Next-generation delivery model One of TCS' operational innovations of the last decade, which served as a very powerful differentiator was the GNDM™, characterised by a global, interconnected workforce, integrated processes and a robust, multi-tiered collaboration and communication infrastructure. File: AR_TCS_2015_2016.md The GNDM™ fostered collaboration among globally distributed teams and the leveraging of common assets to seamlessly deliver consistently high service levels to customers, regardless of which part of the globe they chose to engage with TCS. |
Today, the Company's global delivery footprint covers over 145 solution centers across 19 countries, and it is now almost routine for our large customers to be serviced by globally distributed teams located out of a dozen or more delivery locations. In the digital era, where customers are looking to TCS to help leverage new technologies to transform their businesses and gain competitive advantage, speed is of the essence, and agility is key. Consequently, new projects use 'Agile' or 'DevOps' by default. The Company has invested in building collaborative workspaces at its delivery centers to facilitate a very different style of working that Agile / DevOps entails and fine-tuned its delivery processes and controls. There is now a large and growing body of case studies of large, globally distributed programmes successfully using our GNDM™ to leverage Agile / DevOps. Management Discussion and Analysis # Annual Report 2015-16 # 5.3 Innovation The Company's success in emerging as the preferred transformational partner to some of the largest corporations has been on account of the highly innovative industry-specific solutions that we have proactively developed and showcased to our clients and prospects at our various innovation centers across the world, as well as at 'innovation days' organised with key customers and 'innovation forum' organised in key markets such as USA, UK and Australia. These solutions were built through a close collaboration between domain experts within each of the industry solution units, technology experts and researchers from our R&D group. In addition to industry-focused efforts, there are several cross-unit innovation programmes working on building solutions to address real-time compliance for the enterprise, real-time agile enterprise, global data marketplaces and applications of blockchain technologies. Software research focused on formal methods in verification & validation, design thinking, service design tools and creation of enterprise models for agile business operations. Several projects within the applications research area found successful pilot implementations among TCS customers including email analytics for problem resolution, service desk automation and image / video based auto part inspection. Other areas of focus for the R&D team during the year were integrated computational materials engineering, high performance computing, application programme interface (API) centric development, flexible supply chains and robotics. TCS' researchers also worked on cyber-physical systems focused on health sensing, drone based services, augmented & virtual reality, data privacy and security. To foster the innovation culture across the organisation, TCS ran ideathons, hackathons as well as innovation award competitions. Our Innovista award competition attracted 551 entries from across the organisation of which 37 teams qualified for the finals, with winning innovations in the categories of 'promising innovations', 'leading edge innovations' and 'dare to try innovations'. In fiscal 2016, TCS researchers presented about 500 papers at premier conferences and journals. 2,842 patents were filed and 341 patents were granted during the year. The Company continually looks for innovation outside the organisation as well, scouring the start-up universe for promising candidates whose products could be positioned as a integral part of a larger solution that address customers' business problems. Your Company has built a global start-up partnership ecosystem called COINTM (Co-Innovation Network) which actively engages with technology start-ups, academia and venture capitalists to identify innovative ideas on an ongoing basis from over 1,400 companies on our radar. TCS' COIN connected customers to innovation incubators such as 'Slush' in Europe, 'Start-up Bootcamps' in Asia, and 'Communitech' in Canada. Its innovation events in Sydney, London and Silicon Valley also provided a platform for start-ups to interact with the TCS ecosystem. The Company also got into research collaboration with reputed university research bodies as well as emerging tech companies in areas such as genomics, integrated computation materials engineering, supply chain, model driven enterprises, on ideas that might disrupt the market. TCS has forged strategic alliances with academic institutions such as MIT Media Labs and the Carnegie Mellon University. # 5.4 Innovation workspaces To better facilitate joint ideation and co-innovation with our customers, TCS has invested in building unique co-innovation workspaces designed to encourage creativity, participation and collaboration. Two such facilities were inaugurated in fiscal 2016: - (a) The digital re-imagination studio in Santa Clara, equipped with workspaces and workshops and staffed with topnotch talent from across the world. The creative-led, multi-disciplinary teams at the studio work closely with our customers' teams, applying the principles of design thinking to ideate, develop and even prototype creative digital solutions to our customers' business problems. |
- (b) The executive briefing center at our Banyan Park campus in Mumbai which provides visiting customers and prospects with an immersive experience of many of the transformational digital solutions we have already built across different industry verticals and also collaborate with our teams on developing innovative solutions to their specific business problems. # 5.5 Intellectual property TCS has had a history of investing in intellectual property, exemplified by the industry leading TCS BaNCS - a holistic suite of solutions for banks, capital market firms, insurance companies and diversified financial institutions. The Company has carried forward that tradition into the digital era and established a reputation for thought leadership and innovation among customers by investing in building out one of the largest portfolios of digital platforms and products, spanning the technology space, horizontal functions and industry-specific functions. Every one of these products and platforms has multiple customers and is gaining market traction. In June 2015, we launched ignio™, a neural automation system for IT operations in enterprises, creating a brand new category that we call 'services-as-a-software'. With its cognitive capabilities, ignio™ is technologically far ahead of other automation products in the market and within 9 months of launch, the product had been bought by 16 customers. The Company has filed 24 patents around ignio™ till date, and have some more in the pipeline. 70 Management Discussion and Analysis # Technology Products # Horizontal Products & Platforms dreamUP aclivearchive Ign1o TCS MasterCraft TCS @oudelusmore chrOMA Integrated Urban customct Tap Eexchange Intelligence & Insights TCS Accounts Payable moie # Vertical Products & Platforms TCS B NCS iON TCS ptumera OmniStore TCS mofe # 6. Human resources This achievement is the result of multi-pronged approach of right analytics, establishing TCS brand in the campuses, maintaining connect with prospective employees and a scalable green recruitment process. The success of integrating the new-entrants can be largely attributed to the innovative iBegin and iBelong platforms. The human resource (HR) function of the Company is focused around providing its 353,843 employees from 129 nationalities spread across 55 countries a meaningful and compelling environment. An environment which gives today's diverse, multi-generational and mobile engineering workforce the confidence to realise their potential and provide world class solutions to the customers. This positive and inspiring environment fosters innovation, stimulates performance culture and motivates employees to develop themselves personally and professionally. # Employee base 400,000353,843300,464319,656300,000276,196250,000238,583200,000198,614143,761160,429150,000111,407100,00050,0000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 In fiscal 2016, faculty and students of over 900 institutes in India and abroad benefitted through wide range of academic interface programme (AIP) activities including technology awareness, contests and development of industry oriented curricula. The 17th edition of Sangam, the annual meeting with the heads of the institutes, was organized at Kochi and was very well attended by participants from India and abroad. In addition, TCS is working with Government of India and state governments in establishing five IIITs, under PPP model. Through TCS research scholarship programme, the Company has been supporting 228 research scholars from 33 institutes across India. # 6.2 Talent acquisition TCS' talent acquisition strategy is to hire right competencies required by the business at the right time. In fiscal 2016, the Company has hired 90,182 people, 74,009 in India and 16,173 outside India, into its workforce. This is the highest gross addition. Our unique student engagement portal "Campus Commune" continues its evolution and has more than 891,429 engineering students across 1,135 institutes as registered users. CodeVita, a global programming competition, is also part of this initiative. Management Discussion and Analysis 71 # Annual Report 2015-16 Competition was organised through Campus Commune and this was the 4th year for this competition. 197,639 students from 3,708 institutes across the globe registered for the competition and winners were from India and Czech Republic. # 6.3 Talent development, engagement and retention Developing employee competency and improving overall organisational capabilities is the key talent development focus of TCS. We continued investing in developing necessary platform and content to provide anytime anywhere learning opportunity to our employees worldwide. Learning programmes are also aided by constant coaching and mentoring to help learners with their career development. Talent development in the Company has three distinct tracks - - Continuous development of technical, domain and process skills of the employees on continuous basis, and, - A combination of learning platform (iON), digital interactive class rooms (iQlass), virtual labs and competency tracking platform (iEvolve) facilitates learning opportunities for employees worldwide. |
Scale, speed, spread and quality is ensured through these state of the art infrastructure and programme content. Aspire, our digital ILP breaks the geographic boundaries and facilitates the new joiners to be productive much faster. The need to strengthen and improve leadership pipeline is an important priority to keep up with the fast paced growth of the Company. Structured and systematic approaches to identify, assess, and develop leaders, starts at early stages of the career. LDP has custom made programmes for each level and career paths. Programmes are continuously reviewed and redesigned taking into consideration the dynamic nature of business and the global diverse workforce. Special programmes are launched to develop women employees for leadership roles, and they are yielding desired results. To give a quick start, a number of short videos (Nano programmes) have been developed to help our employees to gain knowledge on latest technological developments in the Digital space. As a special initiative, we embarked on a programme to train 100,000 employees on Digital technologies so as to be ready to meet the business demand. Today's new age workforce expects an employee-centric work environment where they can learn to grow and develop. 'CareerHub' is a platform enabling capture and fulfillment of career aspirations of employees and providing them a mentoring platform. Employees can choose their own mentor based on a match with their aspirational skill sets. 'Inspire', a specialised programme is used to groom and provide fast track career progression to high potentials. Structured coaching programme is used at senior leadership level to make them realise their full potential. Leadership review and assessment profile of all leaders ensures the maintenance of a healthy succession pipeline. The Company's in-house recognition portal 'GEMS' continues to recognise both team and individual performance, as well as reward employee behavior in line with the organisational values. TCS embarks on a sustainability journey by ensuring safety and healthy well-being of associates and protecting the environment. Initiatives like 'Safety First' emphasise on employee safety and security. TCSFit4life initiative creates a culture of fitness in the organisation by helping to build a fraternity of health and fitness conscious employees. 'Purpose4life' initiative enhances employee contribution to community projects in the areas of Education, Health and Environment. Robust employee engagement platforms including Maitree help in improving employee bonding within the organisation and promoting work-life balance, thereby, increasing employee retention. PULSE - TCS' annual employee engagement and satisfaction Survey, has showed an increase in employee satisfaction and employee engagement index this year. This is a measure that the employees have a sense of ownership for their Company and their support to "One TCS" belief. This feeling of camaraderie was seen during the recent Chennai floods where employees across the Company joined hands in the relief works. Apart from providing physical support, employees contributed over ` 4 crores towards relief operations. In fiscal 2016, the Company's attrition rate including BPS was 15.5%. | |Attrition rate| | | |---|---|---|---| |18.0%| | | | |16.0%| | | | |14.4%|14.9%|15.5%| | |14.0%|12.6%|11.8%|12.2%| |12.0%|11.4%|10.6%|11.3%| |10.0%| | | | |8.0%| | | | |6.0%| | | | |4.0%| | | | |2.0%| | | | |0.0%| | | | 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 # 6.4 Talent diversity Talent diversity and creating & sustaining an inclusive environment is important to the Company. The talent diversity framework provides structured initiatives focused at enhancing workplace diversity and inclusion at TCS. The CoE (Center of Excellence) on accessibility, works on 72 Management Discussion and Analysis # IT solutions for differently-abled individuals, aiding their integration into the workforce. An e-learning module, managing diverse teams (MDT), has been created specifically for managers to enable them to work in a diversity rich work environment. The organisation's progressive policies such as extended leave, special focus on security of women employees, customised programmes for re-orientation after long leave, focused mentoring, special leadership development programmes address the needs and aspirations of over 115,000 women employees employed with TCS. TCS continues to lead and share its diversity and inclusion practices through collaboration with various external forums such as partnering with the US government in launching million women mentors (MWM) programme. We pledged our commitment to UN Women's 'He-for-She' global campaign to engage men as champions of diversity. The all-women center for business processes and IT services set up in Riyadh, is a great example of providing long-term career opportunities to women. # 7. |
Risk management and compliance A robust enterprise compliance management (ECM) framework and process has been deployed across the Company. The process is enabled by a digital platform that provides an enterprise-wide view of compliance across global locations. The Company ensures compliance of all applicable laws globally, including those relating to employment & immigration, taxation, forex and export controls, health, safety & environment (HSE), company laws, establishment, SEZ regulations, data privacy, anti-bribery & anti-corruption regulations and IT Security. A committee at corporate level oversees and monitors the deployment of the compliance function. Changes in the applicable regulations are tracked on a global basis. |Key Risks|Impact on the Company|Mitigation| |---|---|---| |Global economic scenario|Technology investments by corporates have shown strong correlations with GDP growth. The Company derives a material portion of its revenues from customers' discretionary spending which is linked to their business outlook. Depressed economic outlook in key markets can impact this spending and thereby constrain the Company's growth potential.|- Diversified across geographies and industry verticals - Focus on both discretionary as well as non-discretionary portions of client spend - Counter-cyclical support. | |Business model changes|The new disruptive digital technologies are ushering in transformational business model changes in client organisations. In this fast evolving "Digital World of Experience", there is increased competition, with a greater number of small niche players, in addition to pure play consulting companies.|- The Company is well placed to address this market opportunity. The Company continues to make necessary investments in talent development, alliance partnerships and assets creation. - Created across big data analytics & insights, digital marketing & channels, cloud & internet of things (IoT) and security cutting across a number of rapidly evolving digital technologies. | # Annual Report 2015-16 # Key Risks |Risk|Impact on the Company|Mitigation| |---|---|---| |Currency volatility|Volatility in currency exchange movements resulting in transaction and translation exposure. In FY16, the rupee has depreciated against most major currencies. The currency movements were driven by lower growth prospects, lower employment, near zero sticky inflation among the developed nations and falling commodity prices.|* Practices in place * Committee on regular basis.| |Global mobility|In view of different socio-economic and geo-political developments, increased challenges are being faced in terms of global mobility of skilled professionals. U.S has increased visa fees for H1B and L1 categories, in addition to other restrictive legislations being considered. U.K has accepted proposals for amendment to visa rules for Tier 2 category. Similar protectionist steps are being considered by some other countries.|* Engagement with stakeholders. Membership in important trade bodies and active engagement with institutions * Engineering and mathematics education (STEM), student technology awareness programme (goIT) and other community initiatives globally.| |Data privacy and protection|Stringent data protection & privacy laws are being enacted by many countries. They mandate protection of personally identifiable information (PII) and sensitive personal data and information (SPDI) and have strict restrictions for any cross border transmission of such personal data. Also such data has to be protected from access by any unauthorized individuals. Any violation or cyber security breach can result in liabilities and penalties.|* Focus on employee related agreements with respect to PII and SPDI * Engagement security management process * Data masking technologies to protect PII and SPDI.| |Cyber security|In a hyper connected digital world and with the increasing penetration of the IoT, enterprises are facing an increased exposure to vulnerabilities and threats. Businesses across the spectrum have been affected by cyber-attacks, with impacts ranging from reputational, to legal and financial losses. Enterprise defenses against cyber-attacks have also been impeded by the fast evolving nature of the threat, with new ways of perpetration emerging constantly.|* Detection solutions as well as continued reinforcement of stringent security policies and procedures * Controls, encryption of network traffic, sophisticated traffic monitoring and management tools and special fences against possible sources of threat.| |Global regulatory compliance|Increasing complexity of global regulatory compliance landscape has become one of the key concerns. This includes industry specific regulations such as Gramm-Leach-Bliley Act (GLBA), Health Insurance Portability and Accountability Act (HIPPA) etc., that need compliance as part of customer engagements.|Comprehensive global enterprise wide compliance management framework has been deployed across the Company. Global regulatory compliance certification is fully digitised and covers compliance across global locations. Changes in the applicable regulations are monitored and tracked on a global basis.| # Management Discussion and Analysis # PERFORMANCE HIGHLIGHTS TCS has been a consistent value creator for all its stakeholders with industry leading performance in metrics such as revenue, profitability, market capitalisation, resource pool etc. |
Among global IT services companies, TCS is ranked second in market capitalisation and net income, third in headcount and fifth in revenues. (Source: Company reports, Gartner, Reuters). Also, TCS has maintained its track record of sharing the wealth created with its stakeholders. # Revenue trend | |Revenue| |---|---| |FY07|18,685| |FY08|22,620| |FY09|30,029| |FY10|37,325| |FY11|48,894| |FY12|62,989| |FY13|81,809| |FY14|94,648| |FY15|108,646| |FY16| | # Growth in industry verticals | |BFSI|Retail & CPG|Telecom, media & entertainment|Manufacturing|Others| |---|---|---|---|---|---| |FY07| | | | | | |FY08| | | | | | |FY09| | | | | | |FY10| | | | | | |FY11| | | | | | |FY12| | | | | | |FY13| | | | | | |FY14| | | | | | |FY15| | | | | | |FY16| | | | | | # Growth in geographic revenue | |North America|UK|Europe|India|Rest of the world| |---|---|---|---|---|---| |FY07| | | | | | |FY08| | | | | | |FY09| | | | | | |FY10| | | | | | |FY11| | | | | | |FY12| | | | | | |FY13| | | | | | |FY14| | | | | | |FY15| | | | | | |FY16| | | | | | # Growth in service lines | |IT solutions & services|Infrastructure services|Business process services|Industrial services|Engineering & Asset leveraged solutions| |---|---|---|---|---|---| |FY07| | | | | | |FY08| | | | | | |FY09| | | | | | |FY10| | | | | | |FY11| | | | | | |FY12| | | | | | |FY13| | | | | | |FY14| | | | | | |FY15| | | | | | |FY16| | | | | | # Earnings trends |PBT|Profit before taxes|PBT margin| |---|---|---| |FY07|5,846|26.3%| |FY08|6,150|25.8%| |FY09|8,290|22.1%| |FY10|11,021|30.6%| |FY11|13,923|29.2%| |FY12|18,090|31.1%| |FY13|25,402|28.5%| |FY14|28,926*|29.5%| |FY15|31,676|35.0%| |FY16| | | # Earnings per share | | | | | | | | | | | | |EPS| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| | | |FY07|71.0| | | | | | | | | | | | | | | |FY08|97.7| | | | | | | | | | | | | | | | |FY09|111.9*| | | | | | | | | | | | | | | | |FY10|123.3| | | | | | | | | | | | | | | |FY11| | | | | | | | | | | | | | | | | |FY12| | | | | | | | | | | | | | | | | |FY13| | | | | | | | | | | | | | | | | |FY14| | | | | | | | | | | | | | | | | |FY15| | | | | | | | | | | | | | | | |FY16| | | | | | | | *excluding one-time employee reward # Management Discussion and Analysis 75 # Annual Report 2015-16 # Cash flow from operating activities |Operating cash flow|Market capitalisation| |---|---| |21,581*|22,000| |19,369|600,000| |18,000|500,000| |16,000| | |14,000|11,615| |14,751|400,000| |12,000| | |10,000|7,406| |8,000| | |6,000|3,472| |6,977|200,000| |4,000|6,614| |3,895|5,409| |2,000| | |-| | FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Operating cash flows *excluding payment of one time employee reward- # Cash utilisation since fiscal 2007 Of the available funds generated during fiscal 2007 to 2016, 55.87% has been appropriated towards dividend (including dividend tax and final dividend for fiscal 2016 to be paid post approval by shareholders). # Dividend Dividend (including final dividend and dividend distribution tax) and the payout ratio computed on consolidated profits have remained consistently high. The amount of dividend appropriated (excluding special dividend) has increased 16 times in the last ten years. In fiscal 2016, the payout ratio was 42%. # Cash usage |Dividends paid|Capex|Acquisitions, etc.|Invested funds| |---|---|---|---| |22.4%|20000|50.0%| | |18000| |37.2%|40.7%*42.0%| |16000| |36.9%|40.0%| |14000|30.7%|31.9%|35.2%| |12000|36.2%|9166|35.0%| |10000|30.5%|10206| | |8000|8922|25.0%| | |6000|7058|20.0%| | |4000|1820|15.0%| | |2000|2282|3189|5030| |0|1295|1603|1603| FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Dividends Special dividends Dividend payout ratio (excl spl div) *excluding one-time employee reward # Management Discussion and Analysis # FINANCIAL PERFORMANCE - (CONSOLIDATED) The financial statements of Tata Consultancy Services Limited and its subsidiaries (collectively referred to as "TCS" or the Company) are prepared in compliance with the Companies Act, 2013 and generally accepted accounting principles in India (Indian GAAP). |
The discussions herein below relate to consolidated statement of profit and loss for the year ended March 31, 2016, consolidated balance sheet as at March 31, 2016 and the consolidated cash flow statement for the year ended March 31, 2016. The consolidated results are more relevant for understanding the performance of TCS. In accordance with the Companies (Indian Accounting Standards), Rules, 2015 of the Companies Act, 2013, TCS will follow the Indian Accounting Standards (Ind AS) for preparation of its financial statements from April 1, 2016. Significant accounting policies used for the preparation of the financial statements are disclosed in the notes to the consolidated financial statements 2 (a) to (q). # CONSOLIDATED FINANCIAL RESULTS - SUMMARY The revenue of the Company crossed one trillion rupees and aggregated ` 108,646.21 crores in fiscal 2016 (` 94,648.41 crores in fiscal 2015), registering a growth of 14.79%. For a like to like comparison, the financial performance and other operating parameters relevant to fiscal 2016 have been analysed with reference to the performance in fiscal 2015, without considering the impact of one-time employee reward (referred to as 'ex rewards') in fiscal 2015. # Other significant financial parameters of the Company are given below: - Earnings before interest, tax, depreciation and amortisation (EBITDA) The EBITDA aggregated ` 30,589.79 crores in fiscal 2016 (` 27,109.62 crores in fiscal 2015, ex rewards) - a growth of 12.84%. - Profit before tax (PBT) PBT aggregated ` 31,675.87 crores in fiscal 2016 (` 28,926.40 crores in fiscal 2015, ex rewards) - a growth of 9.51%. - Profit after tax (PAT) PAT aggregated ` 24,291.82 crores in fiscal 2016 (` 21,911.85 crores in fiscal 2015, ex rewards) - a growth of 10.86%. - Earnings per share (EPS) File: AR_TCS_2015_2016.md EPS aggregated ` 123.28 in fiscal 2016 (` 111.87 in fiscal 2015, ex rewards) - a growth of 10.20%. # Annual Report 2015-16 # DISCUSSIONS ON CONSOLIDATED FINANCIAL RESULTS The following table gives an overview of the financial results of the Company: | |Fiscal 2016|% growth|Fiscal 2015 - ex rewards|Fiscal 2015 - as reported| |---|---|---|---|---| |Revenue from operations|108,646.21|100.00|14.79|14.79| | |94,648.41|100.00|94,648.41|100.00| |Expenses| | | | | |Employee benefit expenses|41,769.08|38.44|15.79|7.93| | |36,073.24|38.12|38,701.15|40.89| |Overseas business expenses|13,678.65|12.59|11.91|11.91| | |12,223.20|12.91|12,223.20|12.91| |Services rendered by business associates and others|7,947.99|7.32|27.78|27.78| | |6,220.25|6.57|6,220.25|6.57| |Employee and BA related expenses|63,395.72|58.35|16.29|10.94| | |54,516.69|57.60|57,144.60|60.37| |Overseas business expenses (other than employee allowances paid overseas)|1,161.34|1.06|1.81|1.81| | |1,140.71|1.21|1,140.71|1.21| |Operation and other expenses|13,499.36|12.43|13.62|13.62| | |11,881.39|12.55|11,881.39|12.55| |Total expenses|78,056.42|71.84|15.57|11.24| | |67,538.79|71.36|70,166.70|74.13| |Earnings before interest, tax, depreciation and amortisation (EBITDA)|30,589.79|28.16|12.84|24.95| | |27,109.62|28.64|24,481.71|25.87| |Other income (net)|3,053.87|2.81|(5.45)|(5.45)| | |3,229.91|3.41|3,229.91|3.41| |Finance costs|19.83|0.02|(80.97)|(80.97)| | |104.19|0.11|104.19|0.11| |Depreciation and amortisation expense|1,947.96|1.79|8.30|8.30| | |1,798.69|1.90|1,798.69|1.90| |Profit before exceptional item and tax|31,675.87|29.16|11.39|22.73| | |28,436.65|30.04|25,808.74|27.27| |Exceptional item|-|-|-|-| | |489.75|0.52|489.75|0.52| |Profit before tax (PBT)|31,675.87|29.16|9.51|20.45| | |28,926.40|30.56|26,298.49|27.79| |Tax expense|7,300.93|6.72|7.37|17.02| | |6,800.03|7.18|6,238.79|6.60| |Profit for the year before minority interest|24,374.94|22.44|10.16|21.51| | |22,126.37|23.38|20,059.70|21.19| |Minority interest|83.12|0.08|(61.25)|(59.95)| | |214.52|0.23|207.52|0.22| |Profit for the year (PAT)|24,291.82|22.36|10.86|22.36| | |21,911.85|23.15|19,852.18|20.97| # Revenue # Analysis of revenue growth The total revenue growth in fiscal 2016 (14.79%) was lower than that of fiscal 2015 (15.69%), primarily due to a lower business growth in fiscal 2016 (11.86%) as compared to that of fiscal 2015 (17.01%). Out of the total revenue earned in fiscal 2016, 94.17% was earned in foreign currencies. Fiscal 2016 witnessed substantial movement in exchange rates particularly affecting AUD, CAD, USD and EUR. The currency wise fluctuations during fiscal 2016 compared to those in fiscal 2015 are given below: # Revenue by industry | | | | | |Fiscal 2016|Fiscal 2015|% change in average rates| |---|---|---|---|---|---|---|---| | |High|Low|Average|Average| | | | |USD|68.79|62.10|65.45|61.26|6.85| | | |GBP|105.28|90.89|98.62|98.34|0.28| | | |EUR|77.49|65.75|72.29|76.86|(5.94)| | | |CAD|53.62|46.38|49.96|53.68|(6.94)| | | |AUD|52.01|45.86|48.17|53.15|(9.36)| | | Net impact of such movement in exchange rates on revenue of the Company has been a positive variance of 2.93% vis-a-vis Rupee in fiscal 2016 (negative variance of 1.32% in fiscal 2015). # Revenue by geography |Fiscal 2016|` crores|% of revenue|% growth|Fiscal 2015|` crores|% of revenue| |---|---|---|---|---|---|---| |North America|57,891.63|53.28|17.94|49,085.94|51.86| | |UK|17,171.43|15.80|8.79|15,783.29|16.68| | |Europe|11,920.64|10.97|8.90|10,946.34|11.57| | |Asia Pacific|10,325.42|9.50|16.87|8,834.63|9.33| | |India|6,728.81|6.19|10.17|6,107.55|6.45| | |Middle East & Africa|2,489.03|2.31|29.43|1,923.14|2.03| | |Latin America|2,119.25|1.95|7.71|1,967.52|2.08| | |Total|108,646.21|100.00|14.79|94,648.41|100.00| | Among emerging markets, Middle East & Africa and Asia Pacific recorded significant growth due to TCS' sustained investment in market development and increasing customer acceptance of global delivery model. Among major markets, North America grew significantly better than the Company average. India, Europe, UK and Latin America registered good growth but below the Company average. |
# Annual Report 2015-16 # Revenue by services | |Fiscal 2016| |Fiscal 2015| |---|---|---|---| |Technology services:|` crores|% of revenue|` crores| |Application development and maintenance (ADM)|43,303.52|39.86|38,056.53| |Enterprise solutions (ES) & consulting|18,990.09|17.48|17,885.45| |Assurance services|9,388.09|8.64|8,050.80| |Infrastructure services (IS)|16,250.74|14.96|13,095.00| |Business process services (BPS)|12,585.77|11.58|11,051.65| |Engineering and industrial services (EIS)|4,907.13|4.52|4,273.97| |Asset leveraged solutions|3,220.87|2.96|2,235.01| |Total|108,646.21|100.00|94,648.41| # Revenue by significant services Asset leveraged solutions registered the highest growth (44.11%) well above the Company average. IS, assurance services and EIS recorded higher growth than the Company average, while growth in BPS, ADM and ES & consulting were lower. ADM continues to be the major contributor although its relative weight to the total revenue has come down over the past years (39.86% in fiscal 2016, 52.20% in fiscal 2007) in line with our strategy of focusing on new services. Consequently, contribution from other services to total revenue has increased. # Management Discussion and Analysis # Employee costs and BA related expenses Employee costs include salaries which have fixed and variable components, contribution to retirement funds and pension schemes. It also includes expenses incurred on staff welfare. Overseas business expenses primarily comprise living allowances paid to employees on overseas assignments. For purpose of the management discussion and analysis (MD&A), employee related costs included in 'overseas business expenses' and costs related to business associates (BA) have been grouped under 'Employee and BA related expenses'. |Expenditure:|Fiscal 2016|% of revenue|Fiscal 2015 - ex rewards|% of revenue|Fiscal 2015 - as reported|% of revenue| |---|---|---|---|---|---|---| |Employee benefit expense|41,769.08|38.44|36,073.24|38.12|38,701.15|40.89| |Overseas business expenses (employee allowances paid overseas)|13,678.65|12.59|12,223.20|12.91|12,223.20|12.91| |Services rendered by business associates (BA) and others|7,947.99|7.32|6,220.25|6.57|6,220.25|6.57| |Total|63,395.72|58.35|54,516.69|57.60|57,144.60|60.37| Employee benefit and BA costs aggregated ` 63,395.72 crores in fiscal 2016, representing 58.35% of revenue. Such costs have increased by 16.29%. In relation to revenue, this group of expenses remained steady showing a marginal increase of 0.75% in fiscal 2016 as compared to fiscal 2015. Overseas business expenses (other than employee allowances paid overseas) include travel expenses incurred in overseas locations. These expenses as percentage of revenue have decreased from 1.21% (` 1,140.71 crores) in fiscal 2015 to 1.06% (` 1,161.34 crores) in fiscal 2016. # Operation and other expenses | |Fiscal 2016|% of revenue|Fiscal 2015|% of revenue| |---|---|---|---|---| |Software, hardware and material costs|4,613.82|4.25|3,835.83|4.05| |Communication|1,107.31|1.02|1,056.06|1.12| |Travelling and conveyance|1,502.43|1.38|1,261.25|1.33| |Rent|1,693.85|1.56|1,569.46|1.66| |Legal and professional fees|639.83|0.59|596.30|0.63| |Repairs and maintenance|730.26|0.67|705.00|0.74| |Electricity|572.74|0.53|573.87|0.61| |Recruitment and training|364.20|0.34|360.94|0.38| |Others|2,274.92|2.09|1,922.68|2.03| |Total|13,499.36|12.43|11,881.39|12.55| Operation and other expenses as a percentage of revenue has remained steady (12.55% of revenue in fiscal 2015, 12.43% of revenue in fiscal 2016). # Earnings before interest, tax, depreciation and amortisation (EBITDA) In fiscal 2016, EBITDA was ` 30,589.79 crores (` 27,109.62 crores in fiscal 2015 ex rewards). There is a decrease of 0.48% in EBITDA as a percentage of revenue, primarily attributable to increase in employee and BA related expenses. # Other income (net) Other income decreased from ` 3,229.91 crores in fiscal 2015 to ` 3,053.87 crores in fiscal 2016 primarily due to decrease in exchange gain (net) from ` 1,308.47 crores in fiscal 2015 to ` 743.26 crores in fiscal 2016, partially offset by (1) increase in profit on redemption of mutual funds, sale of government securities & other investments (net), from ` 233.10 crores in fiscal 2015 to ` 471.89 crores in fiscal 2016 and (2) increase in interest income on bank deposits, inter-corporate deposits and bonds & debentures from ` 1,596.61 crores in fiscal 2015 to ` 1,715.53 crores in fiscal 2016 arising out of effective treasury management. TCS enters into foreign exchange forward, option and futures contracts to manage its exposure to exchange rate fluctuations, in accordance with its risk management policies. TCS follows accounting principles in line with international financial reporting standard 9 (IFRS 9) to account for the aforesaid hedging instruments. Changes in the fair value of instruments designated as hedges of future cash flows are recognised directly in shareholders' funds if they are effective in hedging the risk. The ineffective portion is recognised immediately in the statement of profit and loss. The change in the time value as well as the intrinsic value of option is accumulated in hedging reserve and is classified to statement of profit and loss when the forecasted transaction occurs. Foreign exchange forward, option and futures contracts outstanding at the reporting dates, other than designated cash flow hedges, are stated at their respective fair values. # Annual Report 2015-16 and the resultant gains or losses are accounted as 'other income (net)' in the profit and loss account for the period. |
Note 2 (m) to the consolidated financial statements describes the accounting policy relating to the derivative instruments and hedge accounting. Note 40 to the consolidated financial statements provide details of the derivative financial instruments entered by the Company during fiscal 2016 with comparatives for fiscal 2015. # Depreciation and amortisation Depreciation and amortisation increased from ` 1,798.69 crores in fiscal 2015 to ` 1,947.96 crores in fiscal 2016. The increase was spread across all asset groups, mainly attributable to freehold buildings, electrical installations, furniture and fixtures, computers, leasehold improvement and plant & machinery. In relation to revenue, this group of expenses decreased from 1.90% in fiscal 2015 to 1.79% in fiscal 2016. # Exceptional item In fiscal 2016 there has been no item which can be termed as "exceptional". In fiscal 2015, there was a one-time credit item of ` 489.75 crores shown under the head 'Exceptional item', representing the net impact of change in accounting policy for depreciation necessitated due to implementation of the Companies Act, 2013. # Profit before tax (PBT) In fiscal 2016, PBT was ` 31,675.87 crores (` 28,926.40 crores in fiscal 2015 ex rewards). As a percentage of revenue, PBT decreased from 30.56% in fiscal 2015 to 29.16% in fiscal 2016. The decrease of 1.40% in fiscal 2016 is mainly due to (1) decrease in EBITDA of 0.48%, (2) other income by 0.60% and (3) the absence of the exceptional item which had contributed 0.52% to revenue in fiscal 2015. # Tax expense Tax expense increased to ` 7,300.93 crores in fiscal 2016 from ` 6,238.79 crores as reported in fiscal 2015. The resultant effective tax rate has decreased from 23.72% in fiscal 2015 to 23.05% in fiscal 2016. # Minority interest Minority interest registered a decrease from ` 214.52 crores in fiscal 2015 to ` 83.12 crores in fiscal 2016, primarily due to the amalgamation of a subsidiary, CMC Limited, with the Company. As a result of the amalgamation, the Company issued 1,16,99,962 equity shares to the shareholders of CMC Limited thereby extinguishing the minority interest held in CMC Limited. # Profit after tax (PAT) The net profit in fiscal 2016 was ` 24,291.82 crores (22.36% of revenue) as compared to ` 21,911.85 crores in fiscal 2015 ex rewards (23.15% of revenue). The decrease of 0.79% in terms of revenue is primarily attributable to decrease in PBT. # Segment performance The Company considers industry as its primary segment and geography as its secondary segment. Revenue and expenses directly attributable to segments are reported under each reportable primary segment. The following table presents summary of revenue by industry segments. |Segment revenue|Fiscal 2016|Fiscal 2015|% of aggregate revenue|% growth| |---|---|---|---|---| |Banking, financial services and insurance|44,162.64|38,565.66|40.65|14.51| |Retail and CPG|15,274.01|12,829.01|14.06|19.06| |Telecom, media and entertainment|11,854.32|10,933.55|10.91|8.42| |Manufacturing|10,908.81|9,242.45|10.04|18.03| |Others|26,446.43|23,077.74|24.34|14.60| |Total|108,646.21|94,648.41|100.00|14.79| # Revenue by industry in fiscal 2016 In fiscal 2016, BFSI continued to contribute the largest share to revenue (40.65%) at a growth rate of 14.51%, almost same as the Company average. Verticals which contributed impressive growth rates are retail & CPG (19.06%) and manufacturing (18.03%). The verticals grouped in 'Others' also registered good growth of 14.60% - significant contributors were, life sciences & healthcare (27.12%) and travel, transportation & hospitality (18.13%). # Industry segment wise performance In the following discussions on results of significant segments in fiscal 2016, the impact of one-time employee reward on the results in fiscal 2015 have been excluded for like to like comparison. # Banking, financial services and insurance (BFSI) The BFSI industry segment is witnessing an increased spend on strategic initiatives like automation, digitisation and simplification. Digitisation is now the default strategy for banks. Increasingly vigilant regulators have ensured that governance, risk management and compliance (GRC) continue to demand an increased attention by banks. The digital revolution is redrawing the boundaries of financial services and lowering entry barriers encouraging challengers to emerge. Openings are being created for focused, fast-moving competitors. As a response, banks are renewing their focus on innovation in product creation, bundling, distribution & servicing. The key themes of innovation revolve around data, customer experience, artificial intelligence, APIs, blockchain, etc. Financial institutions are designing competition models and ecosystem tenets to tackle the dynamic environment to maintain their distinct identity and stay relevant for the future. The Company has invested in a broad array of offerings in the areas of analytics, biometrics, blockchain, etc. It is collaborating with 'fintech' firms working in niche areas and looking at joint go-to-market opportunities. In fiscal 2016, the insurance industry continued to experience a soft market. |
Insurers have been trying to improve profits through underwriting, expense reduction and tighter scrutiny of capital investments because of poor investment yields and rate declines across most insurance lines of business. Increased competition and disruption from new players in the industry continue to impact rate and customer retention. Stricter regulatory requirements in North America, UK and Europe add pressure to the industry as a whole. These trends and market conditions are forcing insurers to change their existing business models and operate more efficiently. The industry is under pressure to transform. The Company has invested in business transformation through digital innovation, application & infrastructure modernisation and risk management. It continues to develop digital technology-based solutions that are targeted towards delivering benefits across the insurance value chain. It has continued to grow its digital influence, and has expanded its footprint through new clients in Europe and North America. In fiscal 2016, BFSI constituted 40.65% of Company's revenue (40.74% in fiscal 2015), growing at 14.51% (9.83% in fiscal 2015). # Telecom, media and entertainment As a group, telecom, media & entertainment witnessed revenue growth of 8.42 % in fiscal 2016 (13.73% in fiscal 2015). Communications industry firms which have stayed with their traditional lines of business have seen erosion in their subscriber base and drop in margins due to entry of new media and new technology firms such as Skype, WhatsApp, and Google that piggyback unrestricted on telecom infrastructure. Telecom operators are trying to avoid becoming just simple data channels in the digital era where the value is increasingly shifting to digital content from infrastructure provisioning. Novelty around non-traditional business models like mobile payments, IoT applications brought new opportunities for the telecom industry. Media industry firms have seen an acceleration in the shift of their business from traditional to digital during the year. Shrinking newspaper and magazine subscriptions, stagnant publishing and information services resulted in missed growth targets by entertainment and broadcast firms. Entry of born digital firms such as Facebook and Google took the business away from traditional firms. The industry firms are therefore under pressure to reduce their cost base, including IT costs, and accelerate their transformation to digital. Overall the media industry grew slower than what was forecast earlier with the shift to digital taking away traditional revenues at a pace faster than substitution by digital growth for many firms. Mergers and acquisitions have gathered pace as a way of consolidation and capturing value from other growing parts of the value chain. What started with Comcast and NBCU accelerated with other consolidation such as Verizon - AOL, IBM - The Weather Channel, AT&T - Quickplay, Amazon Web Services - Elemental Technologies, Ericcsson - Envivo, Comscore - Rentrack and NewsCorp - Digital First Media. The communications and media firms interplay is likely to continue through 2016 and beyond. Fundamental enablers for the overall growth of communications and media industries all point in the right direction. Proliferation of mobile devices, exponential growth in both content creation and consumption, high growth rate in particular of video consumption, proliferation of IoT to multiple sectors of all industries and a continued growth in broadband connectivity will continue to drive the industry momentum. We are likely to see growth in over the top video, innovations such as blockchain, software defined networks and network function virtualization becoming more mainstream in 2016. Enterprise IT functions will continue to strive for efficiency whereas digital products and services will aim for time to market drivers. Cloud will gain momentum with the inhibitions around security giving way rapidly as firms realize that their enterprise data centers are no more secure than the cloud. The Company's rich industry experience and domain expertise enables it to deliver a suite of offerings which addresses the industry's demand on digital products, service quality management, expansion of core capabilities into adjacencies, process automation, data monetisation, network management and implementation of next generation technologies. The Company's key digital platforms such as Hosted OSS/BSS (HOBS), 'Customer # Annual Report 2015-16 # Intelligence and Insights 'Intelligence and Insights' (CI&I) gained increased customer adoption in the fiscal 2016. The Company has invested in building "Fit for Purpose" platforms and solutions which have enabled multiple service providers and enterprises across the globe to simplify their business, diversify and grow in emerging areas. # Retail and CPG The retail segment was one of the fastest growing industry verticals in the global market for outsourced IT services. |
Retailer's IT spend is largely driven by their need to deliver a unified, personalised and frictionless experience. To enable this, there is focus on creating real time, agile and simplified enterprises powered by the digital forces. Micro-services based architecture, big data analytics, cloud, IoT, virtual reality, artificial intelligence and machine learning cognitive computing, are some of the key levers that will be employed by retailers to deliver the interconnected customer journey. The focus on security and data privacy continues to be paramount. To support the above initiatives of retail clients, the Company is investing significantly in building differentiated products, solutions and offerings. It has developed first-of-its kind, micro services enabled unified store commerce platform 'OmnistoreTM', digital merchandising suite 'OptumeraTM' and 'OmnistockTM' for omni-channel supply chain. TCS' Digital Operations StudioTM is designed to help retailers deliver break-free customer experience. The retail innovation lab continues to research and develop solution to enable digital physical experience and optimised store operations. CPG companies are working on transforming themselves in the omni-channel world where consumers are adjusting their buying habits and shifting from retail stores to e-commerce making advertisers to follow them online. CPG companies are looking to invest in the technologies such as e-commerce, omni-channel supply chain, targeted digital marketing, next generation CPG retailer collaboration, sales transformation led by cloud technologies, optimised trade promotions and IoT technologies to improve customer experience; and advanced analytics for deep consumer insights. TCS' CPG is making significant investments in the area of digital, sales, marketing, supply chain and analytics to help CPG companies realise their transformation journey. Some of the key CPG offerings in the above areas are: a) digital marketing and digital commerce, b) cloud based sales and marketing transformation, c) omni-channel supply chain solutions, d) next generation planning solution based on SAP IBP and e) data ingestion platform based on advanced analytics. TCS' CPG has been voted 'Best in Class' CGT readers' choice award 2016, amongst top providers in the categories of consulting and outsourcing. The segment revenue has recorded a growth of 19.06% in fiscal 2016 (13.44% in fiscal 2015). # Manufacturing The manufacturing industry overall continues to demonstrate stable business performance with continued emphasis on customer centricity, digitalisation of products, portfolio balancing with services and asset productivity. In line with this, TCS' manufacturing continues to invest in building industry specific core capabilities with focus on innovation & transformation, business advisory and re-imagination of digital enabled business models. To capture the growth opportunities driven by the impact of emerging technologies across the manufacturing industries, TCS is focusing on building innovative solutions and accelerators that help customers address their most significant areas of competitiveness. The Company continues to align traditional lines of services such as enterprise resource planning (ERP), customer relationship management (CRM), product lifecycle management (PLM) and military engineer service (MES) with modern digital capabilities to deliver differentiated services as new product innovation, service life cycle management, analytics as a service, digital customer experience journey, etc. Automation and digitalisation of IT services is also contributing significantly to agile and business response services across service lines. Manufacturing industry revenue recorded a growth of 18.03% in fiscal 2016 (32.24% in fiscal 2015). # Others Segments combined in 'Others' includes: - e* en e **n * e* t * e - ne 5* e ou e **n *ut t e - o * e 5*t *n o t*t on**n * o t* t - te Despite a sharp slowdown in the energy sub-segment towards the end of the fiscal year, resulting from the depressed oil prices, all the segments grouped in 'Others' showed good revenue growth over fiscal 2015, reflecting the Company's growing traction in these industries on the back of strong domain expertise and domain-specific digital solutions. In fiscal 2016, the aggregate growth of 'Others' segment showed a healthy growth of 14.60%. The share of these segments in aggregate revenue remained steady at 24.34% in fiscal 2016 (24.39% in fiscal 2015). 'Life sciences & healthcare' registered high growth in revenue at 27.12% followed by 'travel, transportation and hospitality' 18.13%, 'energy, resources and utilities' 13.61% and 'hi-tech' 12.99%. |
Management Discussion and Analysis # FINANCIAL POSITION -- CONSOLIDATED # Share capital | |As at March 31, 2016|As at March 31, 2015| |---|---|---| |Authorised|460.05 crores equity shares of ` 1 each|460.05 crores equity shares of ` 1 each| | |105.03 crores redeemable preference shares of ` 1 each|105.03 crores redeemable preference shares of ` 1 each| |Total|565.08|525.08| |Issued, subscribed and fully paid-up|195.87 crores equity shares of ` 1 each|195.87 crores equity shares of ` 1 each| | |1.17 crores equity shares issued during the period|1.17 crores equity shares issued during the period| |Total|197.04|195.87| In fiscal 2016, the authorised equity share capital was increased to 460.05 crores equity shares of ` 1 each, pursuant to the amalgamation of its subsidiaries - WTI Advanced Technology Limited and CMC Limited. 1.17 crores equity shares were issued to the shareholders of CMC Limited in terms of the scheme of arrangement sanctioned by the High Courts of Judicature at Bombay and Hyderabad (vide note 29 to the financial statements and the section on acquisition / amalgamation in MD&A for details). # Short-term and long-term borrowings | |As at March 31, 2016|As at March 31, 2015| |---|---|---| |Short-term borrowings|Secured loans: overdraft from banks|111.80| | |Unsecured loans: overdraft from banks|1.16| | |Secured loans: long-term maturities of finance lease obligations|-| | |Unsecured borrowings from entities other than banks|-| |Total|112.96|185.56| The Company's long-term obligations under finance lease (refer note 5 to the consolidated financial statements) was ` 82.24 crores as at March 31, 2016 (` 113.69 crores as at March 31, 2015). These are secured against fixed assets obtained under finance lease arrangements. # Reserves and surplus For the purpose of consolidation of subsidiaries with the financial statement of the holding company, income and expenses are translated at average rates and the assets and liabilities are stated at closing rate. Use of such different rates for translation gives rise to exchange difference which is accumulated in foreign currency translation reserve. Foreign currency translation reserve increased from ` 1,051.17 crores as at March 31, 2015 to ` 1,418.25 crores as at March 31, 2016, due to movement in exchange rates of currencies in fiscal 2016. The closing balance of hedging reserve account, arising out of cash flow hedges as at March 31, 2016 was a net gain of ` 56.77 crores (` 150.75 crores net gain as at March 31, 2015). Note 40 to the consolidated financial statements gives details of movements in the hedging reserve account. In fiscal 2016, the capital redemption reserve increased to ` 523.57 crores from ` 413.09 crores in fiscal 2015 on account of transfer of ` 110.48 crores pursuant to redemption of preference shares by a subsidiary. Balance in statement of profit and loss as at March 31, 2016 was ` 50,618.70 crores (` 39,012.65 crores as at March 31, 2015) after appropriation towards equity dividend (interim and proposed final dividend), tax on dividends, transfer to general reserves, statutory reserve and capital redemption reserve. Reserves and surplus at the end of fiscal 2016 stood at ` 65,163.52 crores, an increase of 29.19% over ` 50,438.89 crores at the end of fiscal 2015. ` 2,303.77 crores was transferred to the general reserve from the profit and loss account for fiscal 2016. | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---| |Long-term borrowings|-|-|Total borrowings|111.80| | |-|-| |1.16| | |82.24|113.69| |82.24| | |0.29|0.58| |0.29| | |82.53|114.27| |195.49| at March 31, 2015). The decrease in short term borrowings (` 112.96 crores as # Annual Report 2015-16 at March 31, 2016; 185.56 crores as at March 31, 2015) was mainly attributable to the reduction of 184.40 crores in unsecured bank overdraft, offset by increase in secured bank overdraft of 111.80 crores required for management of working capital. The secured loans are secured against book debts. # Trade payables (current liabilities) File: AR_TCS_2015_2016.md Trade payables (current liabilities), representing payables for purchase of goods and services decreased from 8,830.93 crores as at March 31, 2015 to 7,539.93 crores as at March 31, 2016. As percentage of revenue, trade payables have decreased from 9.33% in fiscal 2015 to 6.94% in fiscal 2016. The decrease is primarily attributable to the one-time employee reward of 2,627.91 crores which was provided in fiscal 2015 and liquidated in fiscal 2016. |
# Other current and long-term liabilities | |As at March 31, 2016|As at March 31, 2015| |---|---|---| |Other current liabilities| | | |Income received in advance|1,358.86|1,062.31| |Advance received from customers|164.23|130.76| |Other payables|3,683.89|2,317.90| |Other liabilities|150.47|135.62| |Total|5,357.45|3,646.59| Other current liabilities increased from 3,646.59 crores as at March 31, 2015 to 5,357.45 crores as at March 31, 2016. The increase was primarily due to: - Other payables increased from 2,317.90 crores as at March 31, 2015 to 3,683.89 crores as at March 31, 2016. Other payables include (1) statutory liabilities 1,378.59 crores as at March 31, 2016 (1,143.66 crores as at March 31, 2015), (2) Fair values of foreign exchange forward, option and future contracts secured against trade receivables 152.43 crores as at March 31, 2016 (19.75 crores as at March 31, 2015) and (3) Liabilities for cost related to customer contracts 881.55 as at March 31, 2016 (727.79 crores as at March 31, 2015). - Income received in advance increased from 1,062.31 crores as at March 31, 2015 to 1,358.86 crores as at March 31, 2016. Income received in advance represents advance billings to customers not recognised as revenue. # Deferred tax liability (net) and deferred tax assets (net) As stated in the accounting policies, deferred tax assets and liabilities are offset, tax jurisdiction-wise. Note 6 to the consolidated financial statements brings out details of component-wise deferred tax balances where the net values result into liabilities or assets, jurisdiction-wise. Deferred tax liability or asset is recognised on timing difference being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Such timing differences resulting in deferred tax liability or asset usually arise on branch profit tax, depreciation and employee benefit expenses. The net deferred tax liability was 441.17 crores as at March 31, 2016 (342.96 crores as at March 31, 2015). As at March 31, 2016, the net deferred tax asset had a balance of 822.94 crores (593.94 crores as at March 31, 2015). The Company assesses the likelihood of deferred tax assets getting recovered from future taxable income. | |As at March 31, 2016|As at March 31, 2015| | | |---|---|---|---|---| |Other long-term liabilities|-|-| | | |Total other liabilities|1,358.86|1,062.31| | | | |164.23|130.76| | | | |3,683.89|2,317.90| | | |745.10|825.02|895.57|960.64| | | |745.10|825.02|6,102.55|4,471.61| Other long-term liabilities decreased to 745.10 crores as at March 31, 2016 (825.02 crores as at March 31, 2015). The decrease was primarily attributable to: - Other long-term liabilities decreased to 303.83 crores as at March 31, 2016 (412.98 crores as at March 31, 2015). - Other long-term liabilities decreased to 61.78 crores as at March 31, 2016 (67.53 crores as at March 31, 2015). - Other long-term liabilities decreased to 379.49 crores as at March 31, 2016 (344.51 crores as at March 31, 2015). # Management Discussion and Analysis # Short-term and long-term provisions |(` crores)|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---|---|---| |Short-term provisions|1,635.30|1,356.15|236.80|203.39|1,872.10|1,559.54| |Proposed final dividend on equity shares|5,320.16|4,700.95|-|-|5,320.16|4,700.95| |Tax on dividend|1,088.13|947.68|-|-|1,088.13|947.68| |Current income taxes (net)|806.75|547.34|-|-|806.75|547.34| |Provision for foreseeable loss on a long-term contract|114.83|103.04|40.48|94.48|155.31|197.52| |Total|8,965.17|7,655.16|277.28|297.87|9,242.45|7,953.03| The increase in short-term provisions was mainly attributable to: - Proposed final dividend on equity shares: ` 5,320.16 crores as at March 31, 2016 (` 4,700.95 crores as at March 31, 2015) - Provision for employee benefits: ` 1,635.30 crores as at March 31, 2016 (` 1,356.15 crores as at March 31, 2015) - Tax on dividend: ` 1,088.13 crores as at March 31, 2016 (` 947.68 crores as at March 31, 2015) - Current income taxes (net): ` 806.75 crores as at March 31, 2016 (` 547.34 crores as at March 31, 2015). # Fixed assets Additions to the gross block in fiscal 2016 amounted to ` 3,103.89 crores (` 3,662.91 crores in fiscal 2015). The Company has been investing in infrastructure development across various locations in India to meet its growing business needs. In fiscal 2016, TCS has invested in state-of-the-art facilities at Mumbai, Hyderabad, Kolkata, Thiruvananthapuram, Nagpur, Bangalore & Delhi for significant capacities. # Goodwill on consolidation Goodwill on consolidation represents the excess of purchase consideration over net asset value of acquired subsidiaries on the date of such acquisition. Such goodwill is tested for impairment annually or more frequently, if there are indications for impairment. |
Goodwill on consolidation as at March 31, 2016 stood at ` 1,900.55 crores (` 2,093.22 crores as at March 31, 2015). Pursuant to the amalgamation of CMC Limited, the general reserve has been adjusted by the goodwill relating to this subsidiary, thereby reducing the goodwill on consolidation. Management Discussion and Analysis # Annual Report 2015-16 # Overview of funds invested | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---|---|---| |Current|21,554.29|1,492.60|57.67|7.16|21,611.96|1,499.76| |Deposits with banks|2,933.75|16,734.34|415.00|500.08|3,348.75|17,234.42| |Inter-corporate deposits|1,698.00|1,083.00|2,464.00|1,572.00|4,162.00|2,655.00| |Cash and bank balances|3,411.05|1,509.03|-|-|3,411.05|1,509.03| |Total|29,597.09|20,818.97|2,936.67|2,079.24|32,533.76|22,898.21| Funds invested exclude earmarked balances with bank, trade investments and liabilities for purchase of government securities. Investible funds went up by ` 9,635.55 crores (` 22,898.21 crores as at March 31, 2015 to ` 32,533.76 crores as at March 31, 2016), mainly driven by: - ` 20,112.20 crores primarily due to investment in government securities amounting to ` 19,367.09 crores during fiscal 2016 - ` 1,902.02 crores - ` 1,507.00 crores - ` 13,885.67 crores. # Acquisition / amalgamation Details of acquisition / amalgamation are given in note 29 to the consolidated financial statements. On April 1, 2015 ("the appointed date"), CMC Limited, a subsidiary, amalgamated with the Company in accordance with the terms of the Scheme of amalgamation sanctioned by the High Court of Judicature at Bombay vide its Order dated August 14, 2015 and the High Court of Judicature at Hyderabad vide its Order dated July 20, 2015. On July 2, 2015, the Company through its wholly owned subsidiary, Tata Consultancy Services Netherlands BV subscribed to 76% share capital of Tata Consultancy Services Saudi Arabia. On October 30, 2015, the Company through its wholly owned subsidiaries TCS Inversiones Chile Limitada and Tata Consultancy Services Chile S.A. subscribed to 100% share capital of Technology Outsourcing S.A.C, an information technology services provider in Peru. # Trade receivables (AR) and unbilled revenue (UBR) As a percentage of revenue, AR increased to 22.15% as at March 31, 2016 from 21.59% as at March 31, 2015. UBR as percentage of revenue declined to 3.67% in fiscal 2016 from 4.04% in fiscal 2015. The Company monitors AR and UBR net of unearned revenues (UER) separately and collectively. The close monitoring has ensured that the AR and UBR net of UER as a percentage of revenue has remained steady (24.58% in fiscal 2016, 24.51% in fiscal 2015). # Management Discussion and Analysis # Short-term and long-term loans and advances |(` crores)|As at March 31, 2016|As at March 31, 2016|As at March 31, 2015|As at March 31, 2015|Total loans and advances|Total loans and advances| | | | |---|---|---|---|---|---|---| |Short-term loans and advances|Long-term loans and advances|Short-term loans and advances|Long-term loans and advances| | | | |Loans and advances to employees|1,077.72|7.49|387.10|9.05|1,085.21|396.15| |Advance tax [including refund receivable (net)]|31.68|4,464.21|74.93|4,092.34|4,495.89|4,167.27| |MAT credit entitlement|5.00|1,981.52|5.25|1,899.76|1,986.52|1,905.01| |Inter-corporate deposits|1,698.00|2,464.00|1,083.00|1,572.00|4,162.00|2,655.00| |Prepaid expenses|1,376.03|447.78|1,512.13|534.25|1,823.81|2,046.38| |Capital advances|-|187.13|-|206.71|187.13|206.71| |Others|1,393.92|843.35|1,084.04|840.81|2,237.27|1,924.85| |Total|5,582.35|10,395.48|4,146.45|9,154.92|15,977.83|13,301.37| Loans and advances as at March 31, 2016 increased by ` 2,676.46 crores arising out of increase in short-term loans and advances by ` 1,435.90 crores and long-term loans and advances by ` 1,240.56 crores. The increase in short-term loans and advances was primarily attributable to: - ` 690.62 crores mainly to assist those impacted by Chennai floods - ` 615.00 crores - ` 309.88 crores primarily on account of increase in fair value of foreign exchange forward, option and future contracts (` 171.86 crores) and increase in advance to suppliers (` 130.44 crores) The increase in long-term loans and advances was primarily attributable to: - ` 892.00 crores - ` 371.87 crores against demands from tax authorities, which have been contested by the Company - ` 81.76 crores - ` 86.47 crores # Other current and non-current assets |(` crores)|As at March 31, 2016|As at March 31, 2016|As at March 31, 2015|As at March 31, 2015|Total other assets|Total other assets| | | | |---|---|---|---|---|---|---| | |Other current assets| |Other non-current assets|Other current assets|Other non-current assets| | |Interest receivable|202.76|72.74|331.93|24.37|275.50|356.30| |Long term bank deposits|-|501.38|-|500.49|501.38|500.49| |Others|60.65|0.29|4.89|0.44|60.94|5.33| |Total|263.41|574.41|336.82|525.30|837.82|862.12| Other current and non-current assets as at March 31, 2016 reduced by ` 24.30 crores primarily on account of: - ` 80.80 crores - ` 55.76 crores Management Discussion and Analysis # Annual Report 2015-16 # CASH FLOW -- CONSOLIDATED The Company's cash flows from operating, investing and financing activities, is summarised below. The one-time employee reward, provided on accrual basis in the financial statements for fiscal 2015 was paid in fiscal 2016. |
In the following discussions, the impact of the one-time employee reward on cash flow from operating activities has been excluded for like to like comparison. # Summary of cash flow statement: | |Fiscal 2016 - excluding payment of one-time employee reward|Fiscal 2015 as reported|Fiscal 2016 as reported| |---|---|---|---| |Net cash provided by / (used in) Operating activities|21,581.44|19,368.78|19,115.44| |Investing activities|(5,208.67)|(1,701.32)|(5,208.67)| |Financing activities|(9,616.12)|(17,167.61)|(9,616.12)| |Exchange difference on translation of foreign currency cash and cash equivalents|139.52|(105.82)|139.52| |Net (decrease) / increase in cash and cash equivalents after translation|6,896.17|394.03|4,430.17| # Cash flows from operating activities | |Fiscal 2016 - excluding payment of one-time employee reward|Fiscal 2015 - excluding provision of one-time employee reward|Fiscal 2016 as reported|Fiscal 2015 as reported| |---|---|---|---|---| |Profit before tax|31,675.87|28,926.40|31,675.87|26,298.49| |Adjustments: depreciation and amortisation|1,947.96|1,308.94|1,947.96|1,308.94| |Other non-cash adjustments|67.78|233.44|67.78|233.44| |Non operating income (net)|(2,183.71)|(1,737.55)|(2,183.71)|(1,737.55)| |Effect of working capital changes|(2,223.58)|(1,880.69)|(4,823.58)|747.22| |Cash generated from operations|29,284.32|26,850.54|26,684.32|26,850.54| |Taxes paid|(7,702.88)|(7,481.76)|(7,568.88)|(7,481.76)| |Net cash provided by operating activities|21,581.44|19,368.78|19,115.44|19,368.78| Cash generated from operations, was ` 29,284.32 crores in fiscal 2016 (` 26,850.54 crores in fiscal 2015), registering an increase of 9.06% over the previous fiscal. In fiscal 2016, an additional amount of ` 2,223.58 crores was used in working capital to meet the expanding business requirements. The net cash inflow from operating activities was ` 21,581.44 crores (` 19,368.78 crores in fiscal 2015). # Management Discussion and Analysis # Cash flows from investing activities | |Fiscal 2016|Fiscal 2015| |---|---|---| |Fixed asset (net)|(2,024.36)|(2,942.50)| |Other investments (net)|(19,625.79)|2,064.79| |Deposits with banks (net)|16,142.07|(2,644.38)| |Inter - corporate deposits (ICD) (net)|(1,507.00)|155.00| |Interest received|1,795.15|1,994.40| |Other items (net)|11.26|(328.63)| |Net cash used in investing activities|(5,208.67)|(1,701.32)| During fiscal 2016, cash used in investing activities was primarily attributable to: - net sale of ` 19,625.79 crores (net sale ` 2,064.79 crores in fiscal 2015), mainly of government securities - net investment of ` 2,024.36 crores (` 2,942.50 crores in fiscal 2015) - net ICD matured ` 1,507.00 crores (net ICD matured ` 155.00 crores in fiscal 2015) # Cash flows from financing activities | |Fiscal 2016|Fiscal 2015| |---|---|---| |Dividends paid including dividend tax|(9,524.41)|(17,105.57)| |Other payments|(91.71)|(62.04)| |Net cash used in financing activities|(9,616.12)|(17,167.61)| In fiscal 2016, dividend paid includes the final dividend payout and tax thereon for fiscal 2015 approved by the shareholders at the last annual general meeting (` 24 per share). In addition, the dividend paid includes the interim dividend of fiscal 2016 (` 16.5 per share). A special dividend of ` 40 per share resulted in higher cash outflow in fiscal 2015. Other payments in fiscal 2016 include net payments related to borrowings. |
Management Discussion and Analysis # Annual Report 2015-16 # TCS'S PERFORMANCE TREND (INDIAN GAAP CONSOLIDATED) # PERFORMANCE SUMMARY | |Fiscal 2016|Fiscal 2015*|Fiscal 2015|Fiscal 2014|Fiscal 2013|Fiscal 2012|Fiscal 2011|Fiscal 2010|Fiscal 2009|Fiscal 2008|Fiscal 2007| |---|---|---|---|---|---|---|---|---|---|---|---| |Total revenue|108,646.21|94,648.41|94,648.41|81,809.36|62,989.48|48,893.83|37,324.51|30,028.92|27,812.88|22,619.52|18,685.21| |Revenue by geographic segments| | | | | | | | | | | | |North America|57,891.63|49,085.94|49,085.94|43,385.87|33,854.40|26,064.25|20,107.48|15,855.37|14,290.93|11,388.49|9,796.25| |UK|17,171.43|15,783.29|15,783.29|14,251.38|10,760.53|7,453.28|5,770.80|4,860.18|5,282.46|4,497.51|3,791.03| |Europe|11,920.64|10,946.34|10,946.34|9,181.32|6,052.88|4,928.25|3,479.87|3,149.39|2,929.76|2,105.51|1,529.45| |India|6,728.81|6,107.55|6,107.55|5,487.80|4,890.26|4,202.29|3,435.06|2,597.90|2,182.12|2,045.62|1,681.99| |Rest of the world|14,933.70|12,725.29|12,725.29|9,502.99|7,431.41|6,245.76|4,531.30|3,566.08|3,127.61|2,582.39|1,886.49| |Cost| | | | | | | | | | | | |Employee and BA related cost|63,395.72|54,516.69|57,144.60|45,424.67|35,685.60|27,097.96|20,549.34|16,327.72|15,597.77|12,261.54|9,847.00| |Other costs|14,660.70|13,022.10|13,022.10|11,231.90|9,263.97|7,360.56|5,596.81|5,006.65|5,045.31|4,646.60|3,699.36| |Total cost (excluding interest & depreciation)|78,056.42|67,538.79|70,166.70|56,656.57|44,949.57|34,458.52|26,146.15|21,334.37|20,643.08|16,908.14|13,546.36| |Profitability| | | | | | | | | | | | |EBIDTA (before other income)|30,589.79|27,109.62|24,481.71|25,152.79|18,039.91|14,435.31|11,178.36|8,694.55|7,169.80|5,711.38|5,138.85| |Profit before tax|31,675.87|28,436.65|25,808.74|25,401.86|18,089.73|13,923.31|11,020.62|8,289.63|6,150.07|5,845.95|4,918.28| |Profit after tax|24,291.82|21,911.85|19,852.18|19,163.87|13,917.31|10,413.49|9,068.04|7,000.64|5,256.42|5,026.02|4,212.63| |Financial position| | | | | | | | | | | | |Equity share capital|197.04|195.87|195.87|195.87|195.72|195.72|195.72|195.72|97.86|97.86|97.86| |Reserves and surplus|65,163.52|58,139.66|50,438.89|48,998.89|38,350.01|29,283.51|24,209.09|18,171.00|15,502.15|12,102.26|8,752.24| |Gross block|20,244.65|17,316.05|17,316.05|13,897.41|11,622.99|9,447.83|7,792.24|6,419.51|5,843.86|4,291.80|3,197.71| |Total investments|22,585.60|1,661.78|1,661.78|3,433.74|1,897.34|1,350.33|1,762.67|3,682.08|1,614.41|2,606.16|1,256.87| |Net current assets|41,091.88|36,188.94|28,494.76|27,227.38|19,733.75|12,672.65|9,790.38|7,395.02|7,544.12|5,553.32|4,331.11| |Earnings per share in `| | | | | | | | | | | | |EPS - as reported|123.28|111.87|101.35|97.67|70.99|53.07|46.27|35.67|53.63|51.36|43.05| |EPS - adjusted for bonus issue|123.28|111.87|101.35|97.67|70.99|53.07|46.27|35.67|26.81|25.68|21.53| |Headcount (number)| | | | | | | | | | | | |Headcount (including subsidiaries) as on March 31st|353,843|319,656|319,656|300,464|276,196|238,583|198,614|160,429|143,761|111,407|89,419| *excluding impact of one-time employee reward # Management Discussion and Analysis # RATIO ANALYSIS |Ratios - financial performance|Units|Fiscal 2016|Fiscal 2015*|Fiscal 2015|Fiscal 2014|Fiscal 2013|Fiscal 2012|Fiscal 2011|Fiscal 2010|Fiscal 2009|Fiscal 2008|Fiscal 2007| |---|---|---|---|---|---|---|---|---|---|---|---|---| |Employee cost/total revenue|%|51.04|51.03|53.80|49.49|50.68|50.48|50.38|50.17|52.07|50.45|48.17| |Other operating cost/total revenue|%|20.81|20.33|20.33|19.77|20.68|19.99|19.67|20.88|22.15|24.30|24.32| |Total cost/total revenue|%|71.84|71.36|74.13|69.25|71.36|70.48|70.05|71.05|74.22|74.75|72.50| |EBIDTA (before other income)/total revenue|%|28.16|28.64|25.87|30.75|28.64|29.52|29.95|28.95|25.78|25.25|27.50| |Profit before tax/total revenue|%|29.16|30.04|27.27|31.05|28.72|28.48|29.53|27.61|22.11|25.84|26.32| |Tax/total revenue|%|6.72|7.18|6.60|7.42|6.37|6.95|4.91|3.99|3.02|3.48|3.55| |Effective tax rate - tax/PBT|%|23.05|23.51|23.72|23.90|22.19|24.42|16.61|14.44|13.64|13.45|13.50| |Profit after tax/total revenue|%|22.36|23.15|20.97|23.43|22.09|21.30|24.30|23.31|18.90|22.22|22.55| # Ratios - growth |Total revenue|%|14.79|15.69|15.69|29.88|28.83|31.00|24.30|7.97|22.96|21.06|40.87| |---|---|---|---|---|---|---|---|---|---|---|---|---| |EBIDTA (before other income)|%|24.95|7.78|(2.67)|39.43|24.97|29.14|28.57|21.27|25.54|11.14|39.48| |Profit after tax|%|22.36|14.34|3.59|37.70|33.65|14.84|29.53|33.18|4.58|19.31|42.00| # Ratios - Balance Sheet |Debt-equity ratio|Times|0.00|0.01|0.01|0.01|0.01|0.00|0.00|0.01|0.04|0.04|0.06| |---|---|---|---|---|---|---|---|---|---|---|---|---| |Current ratio|Times|2.87|3.91|2.40|2.74|2.69|2.22|2.35|1.88|2.26|2.24|2.24| |Days sales outstanding (DSO) in terms|Days|81|79|79|81|82|86|80|71|79|87|84| |Invested funds / total assets|%|48.26|38.02|43.51|43.01|36.38|34.81|36.81|45.68|26.29|28.97|27.03| |Capital expenditure / total revenue|%|1.86|3.11|3.11|3.80|4.18|4.06|4.85|3.43|3.95|5.58|6.64| |Operating cash flows / total revenue|%|19.86#|20.46|20.46|18.03|18.44|14.27|17.72|24.66|19.45|17.22|18.58| |Free cash flow/operating cash flow ratio|%|90.62#|84.81|84.81|78.90|77.33|71.52|72.66|86.07|79.70|67.60|64.25| |Depreciation / average gross block|%|10.37|11.53|11.53|10.57|10.25|10.65|10.35|10.78|11.13|15.05|17.10| # Ratios - per share |EPS - adjusted for bonus|`|123.28|111.87|101.35|97.67|70.99|53.07|46.27|35.67|26.81|25.68|21.53| |---|---|---|---|---|---|---|---|---|---|---|---|---| |Price earning ratio, end of year|Times|20.41|22.77|25.13|21.79|22.14|22.01|25.56|21.89|10.07|15.79|28.97| |Dividend per share|`|43.50|79.00|79.00|32.00|22.00|25.00|14.00|20.00|14.00|14.00|13.00| |Dividend per share - adjusted for bonus|`|43.50|79.00|79.00|32.00|22.00|25.00|14.00|20.00|7.00|7.00|5.75| |Market capitalisation/total revenue|Times|4.56|5.27|5.27|5.10|4.88|4.67|6.20|5.09|1.90|3.51|6.53| *excluding impact of one-time employee reward # excluding impact of payment of one-time employee reward Management Discussion and Analysis 93 # Annual Report 2015-16 # FINANCIAL PERFORMANCE UNCONSOLIDATED The management discussion and analysis given below relate to the audited financial statements of Tata Consultancy Services Limited (hereinafter referred to as TCS Limited or TCSL). The discussion should be read in conjunction with the financial statements and related notes to the financial statements for the year ended March 31, 2016. # Summary Revenue of TCS Limited aggregated ₹ 85,863.85 crores in fiscal 2016 as compared to ₹ 73,578.06 crores in fiscal 2015, registering a growth of 16.70%. For a like to like comparison, the financial performance and other operating parameters relevant to fiscal 2016 have been analysed with reference to the performance in fiscal 2015, without considering the impact of one-time employee reward (referred to as 'ex rewards') in fiscal 2015. # Other significant financial parameters are: - EBITDA aggregated ₹ 26,949.21 crores in fiscal 2016 (₹ 23,354.62 crores in fiscal 2015, ex rewards) - a growth of 15.39%. - PBT aggregated ₹ 29,116.64 crores in fiscal 2016 (₹ 26,876.39 crores in fiscal 2015, ex rewards) - a growth of 8.34%. - PAT aggregated ₹ 22,882.70 crores in fiscal 2016 (₹ 21,091.43 crores in fiscal 2015, ex rewards) - a growth of 8.49%. - EPS aggregated ₹ 116.13 in fiscal 2016 (₹ 107.68 in fiscal 2015, ex rewards) - a growth of 7.85%. # DIVIDEND Decision on dividend is based on TCS Limited (unconsolidated) financials which excludes the performance of subsidiaries of TCS Limited. The board of directors decides on interim dividend based on the performance of TCSL during the course of the year. For fiscal 2016, TCSL declared three interim dividends of ₹ 5.5 per equity share and a final dividend of ₹ 27 per equity share has been recommended by the board of directors at its meeting held on April 18, 2016. Post approval of final dividend of ₹ 27 per equity share by the shareholders, the total dividend for fiscal 2016 would aggregate ₹ 43.5 per equity share (for fiscal 2015 ₹ 79 per equity share, including a special dividend of ₹ 40). |
# Management Discussion and Analysis # DISCUSSIONS ON FINANCIAL PERFORMANCE - UNCONSOLIDATED The following table gives an overview of the financial results of TCS Limited: | |Fiscal 2016|% growth|Fiscal 2015 - ex rewards|Fiscal 2015 - as reported| |---|---|---|---|---| |Revenue from operations|85,863.85|100.00|16.70|16.70| | |73,578.06|100.00| |73,578.06| |Expenses:| | | | | |Employee benefit expenses|30,068.19|35.02|20.07|9.86| | |25,041.90|34.03| |27,368.32| |Overseas business expenses (employee allowances paid overseas)|12,459.08|14.51|14.44|14.44| | |10,886.90|14.80| |10,886.90| |Services rendered by business associates (BA) and others|6,320.53|7.36|25.24|25.24| | |5,046.61|6.86| |5,046.61| |Total employee and BA related expenses|48,847.80|56.89|19.21|12.81| | |40,975.41|55.69| |43,301.83| |Overseas business expenses (other than employee allowance paid overseas)|947.07|1.10|1.76|1.76| | |930.73|1.27| |930.73| |Operation and other expenses|9,119.77|10.62|9.65|9.65| | |8,317.30|11.30| |8,317.30| |Total expenses|58,914.64|68.61|17.31|12.11| | |50,223.44|68.26| |52,549.86| |Earnings before interest, tax, depreciation and amortisation (EBITDA)|26,949.21|31.39|15.39|28.16| | |23,354.62|31.74| |21,028.20| |Other income (net) excluding dividend income|3,035.66|3.54|(3.06)|(3.06)| | |3,131.60|4.26| |3,131.60| |Dividend income|704.54|0.82|(47.23)|(47.23)| | |1,335.13|1.81| |1,335.13| |Finance costs|13.58|0.02|(82.93)|(82.93)| | |79.57|0.11| |79.57| |Depreciation and amortisation expense|1,559.19|1.82|11.87|11.87| | |1,393.77|1.89| |1,393.77| |Profit before exceptional item and tax|29,116.64|33.91|10.51|21.21| | |26,348.01|35.81| |24,021.59| |Exceptional item|-|-|-|-| | |528.38|0.72| |528.38| |Profit before tax (PBT)|29,116.64|33.91|8.34|18.60| | |26,876.39|36.53| |24,549.97| |Tax expense|6,233.94|7.26|7.76|17.78| | |5,784.96|7.86| |5,293.01| |Profit for the year (PAT)|22,882.70|26.65|8.49|18.83| | |21,091.43|28.67| |19,256.96| Revenue from operations increased from ` 73,578.06 crores in fiscal 2015 to ` 85,863.85 crores in fiscal 2016, registering a growth of 16.70% (13.77% in fiscal 2015). The business growth in fiscal 2016 was at 13.04% (14.44% in fiscal 2015). The increase in revenue growth in fiscal 2016 is mainly on account of exchange rate fluctuations (3.65% in fiscal 2016; negative 0.67% in fiscal 2015). Management Discussion and Analysis # Annual Report 2015-16 # Expenses # Employee and BA related expenses | |Fiscal 2016| |Fiscal 2015 - ex rewards| |Fiscal 2015 - as reported| |---|---|---|---|---|---| |Employee benefit expenses|30,068.19|35.02%|25,041.90|34.03%|27,368.32| |Overseas business expenses|12,459.08|14.51%|10,886.90|14.80%|10,886.90| |(employee allowances paid overseas)| | | | | | |Services rendered by BA and others|6,320.53|7.36%|5,046.61|6.86%|5,046.61| |Total|48,847.80|56.89%|40,975.41|55.69%|43,301.83| Total employee and BA related expenses have increased by 19.21% from ` 40,975.41 crores in fiscal 2015 to ` 48,847.80 crores in fiscal 2016. These costs as a percentage of revenue were 56.89% in fiscal 2016 (55.69% in fiscal 2015). Overseas business expenses (other than employee allowances paid overseas) went up marginally from ` 930.73 crores (1.27% of revenue) in fiscal 2015 to ` 947.07 crores (1.10% of revenue) in fiscal 2016. # Operation and other expenses | |Fiscal 2016| |Fiscal 2015| | | | |---|---|---|---|---|---|---| |Software, hardware and material costs| | |3,107.14|3.62%|2,932.16|3.99%| |Communication| | |688.97|0.80%|641.50|0.87%| |Travelling and conveyance| | |1,094.73|1.27%|812.94|1.10%| |Rent| | |1,058.65|1.23%|1,072.70|1.46%| |Legal and professional fees| | |328.42|0.38%|333.54|0.45%| |Repairs and maintenance| | |633.03|0.74%|491.18|0.66%| |Electricity| | |510.83|0.59%|493.36|0.67%| |Recruitment and training| | |270.80|0.32%|235.10|0.33%| |Others| | |1,427.20|1.67%|1,304.82|1.77%| |Total| | |9,119.77|10.62%|8,317.30|11.30%| Operation and other expenses as percentage of revenue decreased marginally from 11.30% in fiscal 2015 to 10.62% in fiscal 2016. 96 Management Discussion and Analysis # Earnings before interest, tax, depreciation and amortisation (EBITDA) In fiscal 2016 EBITDA was ` 26,949.21 (31.39% of revenue) as compared to ` 23,354.62 (31.74% of revenue) in fiscal 2015. There is a marginal decrease in the EBITDA of 0.35% as a percentage of revenue during fiscal 2016. # Other income (net) | |Fiscal 2016| |Fiscal 2015| | |---|---|---|---|---| | |` crores|% of revenue|` crores|% of revenue| |Dividend income|704.54|0.82|1,335.13|1.81| |Interest income|1,679.48|1.96|1,554.93|2.11| |Exchange gain (net)|798.26|0.93|1,278.63|1.74| |Profit on redemption of mutual funds and sale of other investments (net)|459.25|0.53|225.99|0.31| |Others (net)|98.67|0.12|72.05|0.10| |Total|3,740.20|4.36|4,466.73|6.07| The decrease in other income of 1.71% as a percentage of revenue, is primarily attributable to # Depreciation and amortisation Depreciation and amortisation increased from ` 1,393.77 crores in fiscal 2015 (1.89% of revenue) to ` 1,559.19 crores in fiscal 2016 (1.82% of revenue). The increase was spread across all asset groups, mainly attributable to freehold buildings, electrical installation, computers and leasehold improvements. # Exceptional item In fiscal 2016 there has been no item which can be termed as "exceptional". In fiscal 2015, there was a one-time credit item of ` 528.38 crores shown under the head 'Exceptional item'. This was the net impact of change in accounting policy for depreciation necessitated due to implementation of the Companies Act, 2013. # Tax expense Tax expense increased to ` 6,233.94 crores in fiscal 2016 from ` 5,784.96 crores in fiscal 2015. As a percentage of revenue, it has decreased from 7.86% in fiscal 2015 to 7.26% in fiscal 2016. The effective tax rate has decreased marginally from 21.52% in fiscal 2015 to 21.41% in fiscal 2016. # Profit before tax (PBT) In fiscal 2016, PBT was ` 29,116.64 crores (` 26,876.39 crores, ex reward in fiscal 2015). |
As a percentage of revenue, PBT decreased from 36.53% in fiscal 2015 to 36.53% in fiscal 2016. # Profit for the year (PAT) The net profit in fiscal 2016 was ` 22,882.70 crores (26.65% of revenue) as compared to ` 21,091.43 crores in fiscal 2015, ex reward (28.67% of revenue). Management Discussion and Analysis # Annual Report 2015-16 # FINANCIAL POSITION - UNCONSOLIDATED # Share capital | |As at March 31, 2016|As at March 31, 2015| |---|---|---| |Authorised|460.05 crores equity shares of ` 1 each|460.05 crores equity shares of ` 1 each| | |105.03 crores redeemable preference shares of ` 1 each|105.03 crores redeemable preference shares of ` 1 each| |Total|565.08|525.08| |Issued, subscribed and fully paid-up|195.87 crores equity shares of ` 1 each|195.87 crores equity shares of ` 1 each| | |1.17 crores equity shares issued during the period|1.17 crores equity shares issued during the period| |Total|197.04|195.87| In fiscal 2016, the authorised equity share capital was increased to 460.05 crores equity shares of ` 1 each, pursuant to the amalgamation of its subsidiaries - WTI Advanced Technology Limited and CMC Limited. 1.17 crores equity shares were issued to the shareholders of CMC Limited in terms of the scheme of arrangement sanctioned by the High Courts of Judicature at Bombay and Hyderabad (refer note 28 to the financial statements for details). # Reserves and surplus General reserve as at March 31, 2015 was ` 7,052.69 crores. On transfer of ` 2,288.27 crores from the profit and loss account and on reduction of ` 222.70 crores on account of merger of CMC Limited into TCSL, the general reserve as at March 31, 2016 increased to ` 9,118.26 crores. Foreign currency translation reserve was ` 227.20 crores as at March 31, 2016 (` 218.46 crores as at March 31, 2015). The closing balance in hedging reserve account, arising out of cash flow hedges as at March 31, 2016 showed an accumulated gain of ` 56.77 crores ( ` 150.75 crores as at March 31, 2015). Note 38 to the unconsolidated financial statements gives details of movements in the hedging reserve account. Balance in the statement of profit and loss as at March 31, 2016 was ` 47,247.98 crores (` 35,779.06 crores as at March 31, 2015) after appropriation towards dividend on equity shares, tax on dividend, write back of tax on dividend of prior year and transfer to general reserve. Reserves and surplus as at March 31, 2016 were ` 58,669.82 crores (` 45,220.57 crores, as at March 31, 2015), an increase of 29.74%. # Short-term and long-term borrowings The decrease in short term borrowings (` 112.96 crores as at March 31, 2016; ` 185.56 crores as at March 31, 2015) was mainly attributable to the reduction of ` 184.40 crores in unsecured bank overdraft, offset by increase in secured bank overdraft of ` 111.80 crores required for management of working capital. The secured loans are secured against book debts. Long-term borrowings as at March 31, 2016 aggregated ` 50.06 crores (` 64.71 crores as at March 31, 2015) primarily due to finance lease obligations of ` 49.77 crores (` 64.13 crores as at March 31, 2015) which are secured against fixed assets. For details refer note 33 to the unconsolidated financial statements 'obligations towards finance leases'. # Deferred tax liability (net) and deferred tax assets (net) As stated in the accounting policies, deferred tax assets and liabilities are offset, tax jurisdiction-wise. Note 6 to the unconsolidated financial statements brings out details of component-wise deferred tax balances where the net values result into liabilities or assets, jurisdiction-wise. File: AR_TCS_2015_2016.md Deferred tax liability or asset is recognised on timing difference being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Such timing differences resulting in deferred tax liability or asset usually arise from items like branch profit tax, depreciation and employee benefit expenses. The net deferred tax liability was ` 365.52 crores as at March 31, 2016 (` 271.46 crores as at March 31, 2015). As at March 31, 2016, the net deferred tax asset had a balance of ` 465.83 crores (` 303.47 crores as at March 31, 2015). TCSL assesses the likelihood of deferred tax assets getting recovered from future taxable income. |
# Management Discussion and Analysis # Other current liabilities and long-term liabilities | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---|---|---| |Other current liabilities|Other long-term liabilities|Total other liabilities| | | | | |Income received in advance|1,067.72|854.67|-|-|1,067.72|854.67| |Advance received from customers|39.21|26.18|-|-|39.21|26.18| |Other payables and liabilities|2,896.91|1,610.62|591.15|722.15|3,488.06|2,332.77| |Total|4,003.84|2,491.47|591.15|722.15|4,594.99|3,213.62| Other current and long-term liabilities increased to ` 4,594.99 crores as at March 31, 2016 (` 3,213.62 crores as at March 31, 2015). The increase was mainly on account of: - Government securities amounting to ` 804.86 crores - Currency option contracts secured against trade receivables ` 132.68 crores - Contracts ` 119.96 crores. # Short-term and long-term provisions Provisions aggregated ` 8,308.25 crores as at March 31, 2016 (` 7,146.26 crores as at March 31, 2015). The composition of provisions is given in the table below: | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---|---|---| |Short-term provisions|Long-term provisions|Total provisions| | | | | |Provision for employee benefits|1,164.05|951.52|48.18|32.43|1,212.23|983.95| |Proposed final dividend on equity shares|5,320.16|4,700.95|-|-|5,320.16|4,700.95| |Tax on dividend|1,083.06|939.91|-|-|1,083.06|939.91| |Current income taxes|537.49|323.93|-|-|537.49|323.93| |Provision for foreseeable loss on a long-term contract|114.83|103.04|40.48|94.48|155.31|197.52| |Total|8,219.59|7,019.35|88.66|126.91|8,308.25|7,146.26| The increase of ` 1,161.99 crores in provisions was mainly attributable to: - ` 619.21 crores - ` 228.28 crores - ` 213.56 crores - ` 143.15 crores - Provision for foreseeable loss on a long-term contract ` 42.21 crores. Management Discussion and Analysis # Annual Report 2015-16 # Fixed assets Significant additions to gross block in fiscal 2016 were: - Gross block: ` 1,660.07 crores (` 1,243.63 crores in fiscal 2015) - Outsourced equipment: ` 637.50 crores (` 711.64 crores in fiscal 2015) - Intangible assets: ` 508.38 crores (` 442.23 crores in fiscal 2015) TCSL entered into contractual commitments with vendors who are executing various infrastructure projects. The estimated amounts of such contracts remaining to be executed on capital account and not provided for (net of advances), were ` 1,446.17 crores as at March 31, 2016 (` 1,844.08 crores as at March 31, 2015). # Current investments and non-current investments | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---|---|---| |Current investments|-|-|2,123.73|2,495.44|2,123.73|2,495.44| |Non-current investments|-|-|-|101.75|-|101.75| |Investments in mutual funds, government securities and others|21,847.39|747.47|104.55|54.04|21,951.94|801.51| |Total|21,847.39|747.47|2,228.28|2,651.23|24,075.67|3,398.70| Increase in total investments in fiscal 2016 was mainly on account of investment in government securities in current year amounting to ` 20,171.95 crores. # Trade receivables (AR) and unbilled revenue (UBR) The Company monitors AR and UBR net of unearned revenues (UER) separately and collectively. The close monitoring has ensured that the AR and UBR net of UER as a percentage of revenue has declined from 26.43% in fiscal 2015 to 25.31% in fiscal 2016. As a percentage of revenue, AR were at 22.20% as at March 31, 2016 compared to 23.15% as at March 31, 2015. UBR as percentage of revenue declined to 3.16% in fiscal 2016 from 3.32% in fiscal 2015. # Short-term and long-term loans and advances | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| |---|---|---|---|---|---|---| |Short-term loans and advances|-|-|186.46|201.90|186.46|201.90| |Security deposits|117.63|104.17|603.13|538.00|720.76|642.17| |Advance tax (including refunds receivable (net))|-|-|4,229.86|3,884.22|4,229.86|3,884.22| |MAT credit entitlement|-|-|1,960.31|1,801.78|1,960.31|1,801.78| |Other loans and advances|4,558.15|3,248.01|2,771.16|2,026.65|7,329.31|5,274.66| |Total|4,675.78|3,352.18|9,750.92|8,452.55|14,426.70|11,804.73| # Management Discussion and Analysis # Loans and advances as at March 31, 2016 Loans and advances as at March 31, 2016 increased by ` 2,621.97 crores. The increase was primarily attributable to: - ` 1,362.00 crores placed with non-related corporate which have high credit ratings - ` 158.53 crores driven by payments made against demands from tax authorities, some of which have been contested by TCSL - ` 151.62 crores - ` 677.48 crores mainly to assist those affected by Chennai floods - ` 193.54 crores # Other current and non-current assets | |As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015|As at March 31, 2016|As at March 31, 2015| | | |---|---|---|---|---|---|---|---|---| |Other current assets|186.96|339.53|Other non-current assets|72.52|24.33|Total|259.48|363.86| |Long - term bank deposits|-|-|415.00|500.00|415.00|500.00| | | |Others|-|-|85.00|0.35|85.00|0.35| | | |Total|186.96|339.53|572.52|524.68|759.48|864.21| | | Other current and non-current assets as at March 31, 2016 were lower by ` 104.73 crores primarily on account of reduction in interest receivable. |
# Cash & bank balances | |As at March 31, 2016|As at March 31, 2015| |---|---|---| |Short - term bank deposits|-|16,002.75| |Cash and cash equivalents and earmarked balances with banks|4,806.37|499.75| |Total|4,806.37|16,502.50| Management Discussion and Analysis # Annual Report 2015-16 # CASH FLOW - UNCONSOLIDATED TCSL's growth has been financed largely by cash generated from operations. It has sufficient cash generated from operations for meeting its working capital requirements as well as the requirements for capital expenditure. The one-time employee reward, provided on accrual basis in the financial statements for fiscal 2015 was paid in fiscal 2016. In the following discussions, the impact of the one-time employee reward on cash flow from operating activities has been excluded for like to like comparison. # Banking and financing arrangements As at March 31, 2016, TCSL had available line of credit with multiple banks aggregating ` 6,059.00 crores, interchangeable between fund-based and non-fund based limits (` 5,759.00 crores as at March 31, 2015). As at March 31, 2016 TCSL had utilised ` 1,756.38 crores of these limits (` 1,475.31 crores utilised as at March 31, 2015). # Summary of cash flow statement is given below | |Fiscal 2016 - excluding payment of one-time employee reward|Fiscal 2015 as reported|Fiscal 2016 as reported| |---|---|---|---| |Net cash provided by / (used in) :| | | | |Operating activities|20,270.73|16,319.89|17,996.31| |Investing activities|(4,549.32)|611.01|(4,549.32)| |Financing activities|(9,565.03)|(16,914.20)|(9,565.03)| |Adjustment on account of merger|31.61|1.97|31.61| |Exchange difference on translation of foreign currency|40.12|(27.26)|40.12| |Net increase / (decrease) in cash and cash equivalents after adjustments|6,228.11|(8.59)|3,953.69| # Cash flows from operating activities | |Fiscal 2016 - excluding payment of one-time employee reward|Fiscal 2015 - excluding provision of one-time employee reward|Fiscal 2016 as reported|Fiscal 2015 as reported| |---|---|---|---|---| |Operating profit before working capital changes|27,786.15|24,960.00|27,786.15|22,633.58| |Effect of working capital changes|(998.73)|(2,319.54)|(3,325.15)|6.88| |Taxes paid|(6,516.69)|(6,320.57)|(6,464.69)|(6,320.57)| |Net cash provided by operating activities|20,270.73|16,319.89|17,996.31|16,319.89| In fiscal 2016, TCSL generated net cash of ` 19,830.78 crores (` 16,319.89 crores in fiscal 2015) from operating activities. This is attributable to: * capital changes to ` 27,786.15 crores in fiscal 2016 (` 24,960.00 crores in fiscal 2015) # Cash flows from investing activities | |Fiscal 2016|Fiscal 2015| |---|---|---| |Fixed assets (net)|(1,777.15)|(2,564.49)| |Trade investments (net)|113.72|192.53| |Mutual funds, government securities & other investments (net)|(19,179.71)|2,451.06| |Certificate of deposit placed|(490.26)|-| |Inter-corporate deposits (ICD) (net)|(1,362.00)|103.00| |Deposit with banks (net)|15,651.69|(2,897.58)| |Dividends received from subsidiaries (including exchange gain)|696.05|1,354.31| |Interest received|1,782.83|1,934.38| |Others|15.51|37.80| |Net cash (used in) / provided by investing activities|(4,549.32)|611.01| In fiscal 2016, cash used in investing activities was ` 4,549.32 crores (cash provided of ` 611.01 crores in fiscal 2015). During fiscal 2016, cash used in investing activities was primarily attributable to: - net sale of mutual funds, government securities & other investments ` 19,179.71 crores in fiscal 2016 (net sale ` 2,451.06 crores in fiscal 2015), mainly of government securities. - net purchase of fixed assets ` 1,777.15 crores in fiscal 2016 ( ` 2,564.49 crores in fiscal 2015). - net maturity of inter-corporate deposits ` 1,362.00 crores in fiscal 2016 (ICD (net) matured ` 103.00 crores in fiscal 2015). - net placement of certificate of deposit ` 490.26 crores. Cash provided by investing activities was primarily attributable to: - net deposit with banks ` 15,651.69 crores in fiscal 2016 (investment of ` 2,897.58 crores in fiscal 2015). - interest received from inter-corporate deposits and bonds & debentures ` 1,782.83 crores in fiscal 2016 (` 1,934.38 crores in fiscal 2015). - dividends received from subsidiaries ` 696.05 crores in fiscal 2016 (` 1,354.31 crores in fiscal 2015). # Cash flows from financing activities | |Fiscal 2016|Fiscal 2015| |---|---|---| |Repayment of long term borrowings|(0.47)|(0.47)| |Short term borrowings (net)|(72.60)|185.56| |Dividend paid including dividend tax|(9,479.19)|(17,020.46)| |Interest paid|(12.77)|(78.83)| |Net cash used in financing activities|(9,565.03)|(16,914.20)| The significant items of cash used in financing activities in fiscal 2016 were payment of dividend ` 9,479.19 crores including dividend tax (` 17,020.46 crores in fiscal 2015) and repayment of short term borrowings (net) ` 72.60 crores in fiscal 2016 (proceed of ` 185.56 crores in fiscal 2015). # INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY TCS has aligned its current systems of internal financial control with the requirement of Companies Act 2013, on lines of globally accepted risk based framework as issued by the committee of sponsoring organisations (COSO) of the treadway commission. The Internal Control - Integrated Framework (the 2013 framework) is intended to increase transparency and accountability in an organisation's process of designing and implementing a system of internal control. The framework requires a company to identify and analyse risks and manage appropriate responses. |
The Company has successfully laid down the framework and ensured its effectiveness. TCS's internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. TCS has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. Processes for formulating and reviewing annual and long term business plans have been laid down. TCS uses a state-of-the-art enterprise resource planning (ERP) system to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with global best practices. # Annual Report 2015-16 Our management assessed the effectiveness of the Company's internal control over financial reporting (as defined in Clause 17 of SEBI Regulations 2015) as of March 31, 2016. The assessment involved self review, peer review and external audit. Deloitte Haskins & Sells LLP, the statutory auditors of TCS has audited the financial statements included in this annual report and has issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act 2013). TCS has appointed Ernst & Young LLP to oversee and carry out internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditors (Deloitte Haskins & Sells LLP) and the audit committee. In line with international practice, the conduct of internal audit is oriented towards the review of internal controls and risks in its operations such as software delivery, accounting and finance, procurement, employee engagement, travel, insurance, IT processes, including most of the subsidiaries and foreign branches. TCS also undergoes periodic audit by specialised third party consultants and professional for business specific compliances such as quality management, service management, information security, etc. The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets TCS' statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), our audit committee has concluded that, as of March 31, 2016, our internal financial controls were adequate and operating effectively. # CAUTIONARY STATEMENT Certain statements made in the management discussion and analysis report relating to the Company's objectives, projections, outlook, expectations, estimates and others may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results may differ from such expectations whether expressed or implied. Several factors could make significant difference to the Company's operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, natural calamities over which the Company does not have any direct control. # Management Discussion and Analysis # Corporate Governance Report 105 # Annual Report 2015-16 # Corporate Governance Report for the year 2015-16 # I. Company's Philosophy on Corporate Governance Effective corporate governance practices constitute the strong foundation on which successful commercial enterprises are built to last. The Company's philosophy on corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate behaviour and fairness to all stakeholders comprising regulators, employees, customers, vendors, investors and the society at large. Strong leadership and effective corporate governance practices have been the Company's hallmark inherited from the Tata culture and ethos. The Company has a strong legacy of fair, transparent and ethical governance practices. The Company has adopted a Code of Conduct for its employees including the Managing Director and the Executive Directors, which was revised during the year to align with changing cultural and regulatory norms across the multiple jurisdictions in which the Company conducts its business. In addition, the Company has adopted a Code of Conduct for its non-executive directors which includes Code of Conduct for Independent Directors which suitably incorporates the duties of independent directors as laid down in the Companies Act, 2013 ("Act"). These codes are available on the Company's website. |
The Company's corporate governance philosophy has been further strengthened through the Tata Business Excellence Model, the TCS Code of Conduct for Prevention of Insider Trading and the Code of Corporate Disclosure Practices ("Insider Trading Code"). The Company has in place an Information Security Policy that ensures proper utilisation of IT resources. Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") the Company has executed fresh Listing Agreements with the Stock Exchanges. The Company is in compliance with the requirements stipulated under Clause 49 of the Listing Agreements and regulation 17 to 27 read with Schedule V and clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI Listing Regulations, as applicable, with regard to corporate governance. # II. Board of Directors i. As on March 31, 2016, the Company has eleven Directors. Of the eleven Directors, nine (i.e. 81.82%) are Non-Executive Directors and six (i.e. 54.55%) are Independent Directors. The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations read with Section 149 of the Act. ii. None of the Directors on the Board hold directorships in more than ten public companies. Further none of them is a member of more than ten committees or chairman of more than five committees across all the public companies in which he is a Director. Necessary disclosures regarding Committee positions in other public companies as on March 31, 2016 have been made by the Directors. None of the Directors are related to each other. iii. Independent Directors are non-executive directors as defined under Regulation 16(1)(b) of the SEBI Listing Regulations read with Section 149(6) of the Act. The maximum tenure of independent directors is in compliance with the Act. All the Independent Directors have confirmed that they meet the criteria as mentioned under Regulation 16(1)(b) of the SEBI Listing Regulations read with Section 149(6) of the Act. iv. The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanships / Memberships held by them in other public companies as on March 31, 2016 are given herein below. Other directorships do not include directorships of private limited companies, foreign companies and companies under Section 8 of the Act. Chairmanships / Memberships of Board Committees shall only include Audit Committee and Stakeholders' Relationship Committee. # Corporate Governance Report |Name of the Director|Category|Number of board meetings during the year 2015-16|Whether attended last AGM held on June 30, 2015|Number of Directorships in other Public Companies|Number of positions held in other Public Companies| | | | |---|---|---|---|---|---|---|---|---| |Mr. Cyrus Mistry (Chairman)|Non-Independent, Non-Executive|8|8|Yes|9|-|-|-| |Mr. N. Chandrasekaran (Chief Executive Officer and Managing Director)|Non-Independent, Executive|8|8|Yes|-|-|-|-| |Mr. Aman Mehta|Independent, Non-Executive|8|8|Yes|-|5|2|3| |Mr. V. Thyagarajan|Independent, Non-Executive|8|8|Yes|-|-|-|-| |Prof. Clayton M. Christensen|Independent, Non-Executive|8|7|No|-|-|-|-| |Dr. Ron Sommer|Independent, Non-Executive|8|8|Yes|-|-|-|-| |Dr. Vijay Kelkar|Independent, Non-Executive|8|8|Yes|-|6|2|3| |Mr. Ishaat Hussain|Non-Independent, Non-Executive|8|7|Yes|4|5|3|3| |Mr. O. P. Bhatt|Independent, Non-Executive|8|8|Yes|-|2|1|2| |Mr. Phiroz Vandrevala|Non-Independent, Non-Executive|8|8|Yes|-|2|1|-| |Ms. Aarthi Subramanian|Non-Independent, Executive|8|8|Yes|-|-|-|-| Video / tele-conferencing facilities are also used to facilitate Directors travelling / residing abroad or at other locations to participate in the meetings. Eight Board Meetings were held during the year and the gap between two meetings did not exceed one hundred and twenty days. The dates on which the said meetings were held: April 16, 2015; June 30, 2015; July 9, 2015; September 3, 2015; October 13, 2015; January 11, 2016; January 12, 2016 and March 10, 2016. The necessary quorum was present for all the meetings. During the year 2015-16, information as mentioned in Schedule II Part A of the SEBI Listing Regulations, has been placed before the Board for its consideration. The terms and conditions of appointment of the Independent Directors are disclosed on the website of the Company. During the year, two meetings of the Independent Directors were held on October 13, 2015 and March 11, 2016. The Independent Directors, inter-alia, reviewed the performance of non-independent directors, Chairman of the Company and the Board as a whole. The Board periodically reviews the compliance reports of all laws applicable to the Company, prepared by the Company. The details of the familiarisation programme of the Independent Directors are available on the website of the Company (http://www.tcs.com/investors). # Annual Report 2015-16 # xi. Details of equity shares of the Company held by the Directors as on March 31, 2016 are given below: |Name|Category|Number of equity shares| |---|---|---| |Mr. Cyrus Mistry|Non-Independent, Non-Executive|41,63,526| |Mr. N. Chandrasekaran|Non-Independent, Executive|88,528| |Mr. Ishaat Hussain|Non-Independent, Non-Executive|1,740| |Ms. |
Aarthi Subramanian|Non-Independent, Executive|2,800| The Company has not issued any convertible instruments. # III. Committees of the Board # A. Audit committee # i. The audit committee of the Company is constituted in line with the provisions of Regulation 18 of SEBI Listing Regulations, read with Section 177 of the Act. # ii. The terms of reference of the audit committee are broadly as under: - Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible; - Recommendation for appointment, remuneration and terms of appointment of auditors of the Company; - Approval of payment to statutory auditors for any other services rendered by the statutory auditors; - Reviewing, with the management, the annual financial statements and auditors' report thereon before submission to the board for approval, with particular reference to: - - Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Act. - Changes, if any, in accounting policies and practices and reasons for the same. - Major accounting entries involving estimates based on the exercise of judgment by management. - Significant adjustments made in the financial statements arising out of audit findings. - Compliance with listing and other legal requirements relating to financial statements. - Disclosure of any related party transactions. - Qualifications in the draft audit report. Reviewing, with the management, the quarterly financial statements before submission to the board for approval; - Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; - Review and monitor the auditors' independence and performance, and effectiveness of audit process; - Approval or any subsequent modification of transactions of the Company with related parties; - Scrutiny of inter-corporate loans and investments; - Examination of the financial statement and the auditors' report thereon; # Valuation of undertakings or assets of the company, wherever it is necessary; Evaluation of internal financial controls and risk management systems; Establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed; The audit committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the Company; The audit committee shall review the information required as per SEBI Listing Regulations. # iii. The audit committee invites such of the executives, as it considers appropriate (particularly the head of the finance function), representatives of the statutory auditors and representatives of the internal auditors to be present at its meetings. The Company Secretary acts as the Secretary to the Audit Committee. # iv. In terms of the Insider Trading Code adopted by the Company in FY 2015-16, the Committee considers the following matters: - To approve policies in relation to the implementation of the Insider Trading Code and to supervise implementation of the Insider Trading Code. - To note and take on record the status reports detailing the dealings by Designated Persons in Securities of the Company, as submitted by the Compliance Officer on a quarterly basis. - To provide directions on any penal action to be initiated, in case of any violation of the Regulations by any person. # v. Mr. Suprakash Mukhopadhyay, Vice President and Company Secretary was appointed as the Compliance Officer by the Board to ensure compliance and effective implementation of the Insider Trading Code. # vi. Quarterly Reports are sent to the members of the Committee on matters relating to the Insider Trading Code. # vii. The previous Annual General Meeting ("AGM") of the Company was held on June 30, 2015 and was attended by Mr. Aman Mehta, Chairman of the audit committee. # viii. The composition of the Audit Committee and the details of meetings attended by its members are given below: |Name|Category|Number of meetings during the financial year 2015 -16|Held|Attended| |---|---|---|---|---| |Mr. |
Aman Mehta (Chairman)|Independent, Non-Executive|5|5| | |Mr. V. Thyagarajan|Independent, Non-Executive|5|5| | |Dr. Ron Sommer|Independent, Non-Executive|5|5| | |Dr. Vijay Kelkar|Independent, Non-Executive|5|5| | |Mr. Ishaat Hussain|Non-Independent, Non-Executive|5|4| | |Mr. O. P. Bhatt|Independent, Non-Executive|5|5| | # ix. Five audit committee meetings were held during the year and the gap between two meetings did not exceed one hundred and twenty days. The dates on which the said meetings were held are as follows: April 16, 2015; July 9, 2015; September 3, 2015; October 13, 2015 and January 12, 2016. The necessary quorum was present for all the meetings. Corporate Governance Report 109 # Annual Report 2015-16 # B. Nomination and remuneration committee # i. The nomination and remuneration committee of the Company is constituted in line with the provisions of Regulation 19 of SEBI Listing Regulations, read with Section 178 of the Act. # ii. The broad terms of reference of the nomination and remuneration committee are as under: File: AR_TCS_2015_2016.md - Recommend to the Board the setup and composition of the Board and its committees, including the "formulation of the criteria for determining qualifications, positive attributes and independence of a director." The committee will consider periodically reviewing the composition of the Board with the objective of achieving an optimum balance of size, skills, independence, knowledge, age, gender and experience. - Recommend to the Board the appointment or reappointment of directors. - Devise a policy on Board diversity. - Recommend to the Board appointment of Key Managerial Personnel ("KMP" as defined by the Act) and executive team members of the Company (as defined by this Committee). - Carry out evaluation of every director's performance and support the Board and Independent Directors in evaluation of the performance of the Board, its committees and individual directors. This shall include "Formulation of criteria for evaluation of Independent Directors and the Board". Additionally the Committee may also oversee the performance review process of the KMP and executive team of the Company. - Recommend to the Board the Remuneration Policy for directors, executive team or Key Managerial Personnel as well as the rest of the employees. - On an annual basis, recommend to the Board the remuneration payable to the directors and oversee the remuneration to executive team or Key Managerial Personnel of the Company. - Oversee familiarisation programmes for directors. - Oversee the Human Resource philosophy, Human Resource and People strategy and Human Resource practices including those for leadership development, rewards and recognition, talent management and succession planning (specifically for the Board, Key Managerial Personnel and executive team). - Provide guidelines for remuneration of directors on material subsidiaries. - Recommend to the Board on voting pattern for appointment and remuneration of directors on the Boards of its material subsidiary companies. - Performing such other duties and responsibilities as may be consistent with the provisions of the committee charter. # iii. The composition of the Nomination and Remuneration Committee and the details of meetings attended by its members are given below: |Name|Category|Number of meetings during the financial year 2015 -16| |---|---|---| |Mr. Aman Mehta (Chairman)|Independent, Non-Executive|3| |Mr. V. Thyagarajan|Independent, Non-Executive|3| |Mr. Cyrus Mistry|Non-Independent, Non-Executive|3| |Mr. Ishaat Hussain|Non-Independent, Non-Executive|3| Three nomination and remuneration committee meetings were held. The dates on which the said meetings were held are as follows: April 16, 2015; January 11, 2016 and March 11, 2016 # iv. The Company does not have any Employee Stock Option Scheme. # v. Performance Evaluation Criteria for Independent Directors: The performance evaluation criteria for independent directors is determined by the Nomination and Remuneration committee. An indicative list of factors that may be evaluated include participation and contribution by a director, commitment, effective deployment of knowledge and expertise, effective management of relationship with stakeholders, integrity and maintenance of confidentiality and independence of behaviour and judgement. # vi. Remuneration Policy: Remuneration policy in the Company is designed to create a high performance culture. It enables the Company to attract, retain and motivate employees to achieve results. Our Business Model promotes customer centricity and requires employee mobility to address project needs. The remuneration policy supports such mobility through pay models that are compliant to local regulations. In each country where the Company operates, the remuneration structure is tailored to the regulations, practices and benchmarks prevalent in the IT industry. The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and commission (variable component) to its Managing Director and the Executive Directors. |
Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the members and are effective April 1, each year. The Nomination and Remuneration Committee decides on the commission payable to the Managing Director and the Executive Directors out of the profits for the financial year and within the ceilings prescribed under the Act based on the performance of the Company as well as that of the Managing Director and each Executive Director. During the year 2015-16 the Company paid sitting fees of ` 30,000 per meeting to its Non-Executive Directors for attending meetings of the Board and meetings of committees of the Board. The Members have at the AGM of the Company on June 27, 2014 approved of payment of commission to the Non-Executive Directors within the ceiling of 1% of the net profits of the Company as computed under the applicable provisions of the Act. The said commission is decided each year by the Board of Directors and distributed amongst the Non-Executive Directors based on their attendance and contribution at the Board and certain Committee meetings, as well as the time spent on operational matters other than at meetings. The Company also reimburses the out-of-pocket expenses incurred by the Directors for attending the meetings. # vii. Details of the Remuneration for the year ended March 31, 2016: |Name|Commission|Sitting Fees| |---|---|---| |Mr. Cyrus Mistry|-|4.20| |Mr. Aman Mehta|230.00|5.40| |Mr. V. Thyagarajan|160.00|6.60| |Prof. Clayton M. Christensen|125.00|2.40| |Dr. Ron Sommer|170.00|4.80| |Dr. Vijay Kelkar|135.00|4.80| |Mr. Ishaat Hussain|175.00|5.40| |Mr. O. P. Bhatt|140.00|7.80| |Mr. Phiroz Vandrevala|65.00|2.40| Corporate Governance Report 111 # Annual Report 2015-16 # b. Managing Director and Executive Director |Name of Director and period of appointment|Salary (` Lakh)|Benefits Perquisites and Allowances (` Lakh)|Commission (` Lakh)|ESPS| |---|---|---|---|---| |Mr. N. Chandrasekaran Chief Executive Officer and Managing Director (w.e.f. October 6, 2014 for a period of 5 years)|228.60|437.33|1,900.00|nil| |Ms. Aarthi Subramanian Executive Director (w.e.f. March 12, 2015 for a period of 3 years)|58.14|117.02|100.00|nil| The above figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation / premium paid are not available and the one-time bonus paid to eligible employees, as the same is of a non-recurring nature. Services of the Managing Director and Executive Director may be terminated by either party, giving the other party six months' notice or the Company paying six months' salary in lieu thereof. There is no separate provision for payment of severance fees. # C. Stakeholders' relationship committee 1. The stakeholders' relationship committee is constituted in line with the provisions of Regulation 20 of SEBI Listing Regulations read with section 178 of the Act. 2. The broad terms of reference of the stakeholders' relationship committee are as under: - Consider and resolve the grievances of security holders of the Company including redressal of investor complaints such as transfer or credit of securities, non-receipt of dividend / notice / annual reports, etc. and all other securities-holders related matters. - Consider and approve issue of share certificates (including issue of renewed or duplicate share certificates), transfer and transmission of securities, etc. 3. Two meetings of the stakeholders' relationship committee were held during the year on September 3, 2015 and March 11, 2016. 4. The composition of the stakeholders' relationship committee and the details of meetings attended by its members are given below: |Name|Category|Number of meetings during the financial year 2015 -16| |---|---|---| |Mr. V. Thyagarajan (Chairman)|Independent, Non-Executive|Held: 2 Attended: 2| |Mr. O. P. Bhatt|Independent, Non-Executive|Held: 2 Attended: 2| |Mr. N. Chandrasekaran|Non-Independent, Executive|Held: 2 Attended: 2| The Company has always valued its customer relationships. This philosophy has been extended to investor relationship and an Investor Relations Department (IRD) was set up in June 2004, prior to the Company's Initial Public Offer of shares. The IRD focuses on servicing the needs of various stakeholders viz. investors, analysts, brokers and the general public. # 112 Corporate Governance Report # vi. Name, designation and address of Compliance Officer: Mr. Suprakash Mukhopadhyay Vice President and Company Secretary Tata Consultancy Services Limited 11th Floor, Maker Towers "E" Block Cuffe Parade, Colaba Mumbai 400 005 Telephone: 91 22 6778 9191 Fax: 91 22 6630 3672 # vii. |
Details of investor complaints received and redressed during the year 2015-16 are as follows: |Opening Balance|Received during the year|Resolved during the year|Closing Balance| |---|---|---|---| |3|124|126|1*| * As required by Securities and Exchange Board of India ("SEBI"), reminder letter was sent to the complainant on April 1, 2016 requesting the complainant to complete the formalities to enable the Company to transfer the shares. # D. Other Committees # i. Ethics and compliance committee: The Company has an ethics and compliance committee of Directors to consider matters relating to the Company with respect to the Company's Code of Conduct ("CoC") and such matters as may be referred by the Board from time to time. During the year, the Company adopted Insider Trading Code, pursuant to which the matters relating to the Insider Trading Code are being considered by the audit committee. The Company has also formulated an Anti Bribery and Anti Corruption Policy and Gifts Policy which is also monitored by the ethics and compliance committee. Monthly reports are sent to the members of the ethics and compliance committee on matters relating to the CoC. Two meetings of the ethics and compliance committee were held during the year on September 3, 2015 and March 11, 2016. |Name|Category|Number of meetings during the financial year 2015 -16|Held|Attended| |---|---|---|---|---| |Mr. V. Thyagarajan (Chairman)|Independent, Non-Executive|2|2| | |Mr. N. Chandrasekaran|Non-Independent, Executive|2|2| | |Mr. O. P. Bhatt|Independent, Non-Executive|2|2| | # ii. Bank account committee: The Company has a bank account committee of directors comprising of Mr. Aman Mehta (Independent, Non-Executive) and Mr. N. Chandrasekaran (Non-Independent, Executive). The bank account committee is responsible for approval of the opening and closing of bank accounts of the Company and to authorise persons to operate the bank accounts of the Company. # Annual Report 2015-16 # iii. Executive committee: The Company has an executive committee of directors comprising of Mr. Cyrus Mistry (Non-Independent, Non-Executive) as the Chairman, Prof. Clayton M. Christensen (Independent, Non-Executive), Dr. Ron Sommer (Independent, Non-Executive) and Mr. N. Chandrasekaran (Non-Independent, Executive). The executive committee's role covers a detailed review of the following matters before these are presented to the Board: - Business and strategy review; - Long-term financial projections and cash flows; - Capital and revenue budgets and capital expenditure programmes; - Acquisitions, divestments and business restructuring proposals; - Senior management succession planning; - Any other item as may be decided by the board. The above matters were discussed in various board meetings held during the year with the presence of the executive committee members with intent to avail expertise of all the board members. # iv. Software Technology Parks of India (STPI) / Special Economic Zone (SEZ) committee: The Company has a STPI / SEZ committee of directors comprising of Mr. V. Thyagarajan (Independent, Non-Executive) and Mr. N. Chandrasekaran (Non-Independent, Executive). The STPI / SEZ Committee is responsible for approval, from time to time, of registration / renewal of registration / de-registration of various offices of the Company under the STPI / SEZ schemes and such other schemes as may be deemed fit by them and to also approve of other STPI / SEZ / other scheme(s) related matters. # v. Risk management committee: The risk management committee of the Company is constituted in line with the provisions of Regulation 21 of SEBI Listing Regulations. The board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Four meetings of the risk management committee were held during the year on April 29, 2015, July 8, 2015, October 12, 2015 and February 8, 2016. The composition of the risk management committee and details of the meetings attended by its members are given below: |Name|Category|Number of meetings during the financial year 2015 -16| |---|---|---| |Mr. Ishaat Hussain|Non-Independent, Non-Executive|4| |Mr. N. Chandrasekaran|Non-Independent, Executive|4| |Mr. O. P. Bhatt|Independent, Non-Executive|4| |Ms. Aarthi Subramanian*|Non-Independent, Executive|4| |Mr. Rajesh Gopinathan|Chief Financial Officer|4| *Appointed as member of committee w.e.f April 16, 2015 # vi. Health, safety and sustainability committee: The Health, safety and sustainability committee of directors is responsible for framing and implementation of broad guidelines / policies with regard to the health, safety and sustainability activities of the Company, review the policies, processes and systems periodically and recommend measures for improvements from time to time. |
# One meeting of the health, safety and sustainability committee was held during the year on September 3, 2015 The composition of the health, safety and sustainability committee and details of the meeting attended by its members are given below: |Name|Category|Number of meetings during the financial year 2015 -16|Held|Attended| |---|---|---|---|---| |Dr. Vijay Kelkar (Chairman)|Independent, Non-Executive|1|1| | |Dr. Ron Sommer|Independent, Non-Executive|1|1| | |Mr. N. Chandrasekaran|Non-Independent, Executive|1|1| | # vii. Corporate social responsibility ("CSR") committee CSR Committee of the Company is constituted in line with the provisions of Section 135 of the Act. The broad terms of reference CSR committee is as follows: - Formulate and recommend to the board, a CSR policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Act; - Recommend the amount of expenditure to be incurred on the activities referred to above; - Monitor the CSR Policy of the Company from time to time; Three meetings of the CSR committee were held during the year on April 7, 2015, January 11, 2016 and March 11, 2016. The composition of the CSR Committee and details of the meeting attended by its members are given below: |Name|Category|Number of meetings during the financial year 2015 -16|Held|Attended| |---|---|---|---|---| |Mr. Cyrus Mistry (Chairman)|Non-Independent, Non-Executive|3|3| | |Mr. O. P. Bhatt|Independent, Non-Executive|3|3| | |Mr. N. Chandrasekaran|Non-Independent, Executive|3|3| | # IV. General Body Meetings # i. General Meeting # a. Annual General Meeting ("AGM"): |Financial Year|Date|Time|Venue| |---|---|---|---| |2012-13|June 28, 2013| |Birla Matushri Sabhagar,| |2013-14|June 27, 2014|3.30 p.m.|19, Sir Vithaldas Thackersey Marg, New Marine Lines,| |2014-15|June 30, 2015| |Mumbai - 400 020| # b. A court convened meeting of the equity shareholders of the Company was held on April 28, 2015 at 10:00 a.m. at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, New Marine lines, Mumbai - 400020 in terms of Order dated March 13, 2015 of the Hon'ble High Court of Judicature at Bombay, for obtaining the requisite approval of the shareholders of the Company for the Scheme. # Annual Report 2015-16 of Amalgamation under Section 391-394 of the Companies Act,1956 between CMC Limited and Tata Consultancy Services Limited and their respective shareholders. # c. Special Resolution: No special resolution was passed by the Company in any of its previous three AGMs. # ii. Details of special resolution passed through postal ballot, the persons who conducted the postal ballot exercise and details of the voting pattern. During the year under review, no special resolution has been passed through the exercise of postal ballot. # iii. Details of special resolution proposed to be conducted through postal ballot: No special resolution is proposed to be conducted through postal ballot at the AGM to be held on June 17, 2016. # V. Other disclosures # i. Related party transactions All material transactions entered into with related parties as defined under the Act and Regulation 23 of SEBI Listing Regulations during the financial year were in the ordinary course of business. These have been approved by the audit committee. The board has approved a policy for related party transactions which has been uploaded on the Company's website at the following link- TCS Related Party Transactions Policy # ii. Details of non-compliance by the Company, penalties, strictures imposed on the Company by the stock exchanges or the SEBI or any statutory authority, on any matter related to capital markets, during the last three years 2013-14, 2014-15 and 2015-16 respectively: Nil # iii. The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism as defined under Regulation 22 of SEBI Listing Regulations for directors and employees to report concerns about unethical behaviour. No person has been denied access to the Chairman of the audit committee. The said policy has been also put up on the website of the Company at the following link- TCS Whistle Blower Policy # iv. The Company has also adopted Policy on Determination of Materiality for Disclosures (TCS Policy on Determination of Materiality for Disclosure), Policy on Archival of Documents (TCS Policy on Archival of Documents) and Policy for Preservation of Documents. # v. The Company has duly fulfilled the following discretionary requirements as prescribed in Schedule II Part E of the SEBI Listing Regulations: - A message from the Chief Executive Officer and Managing Director on the half-yearly financial performance of the Company including a summary of the significant events in the six month period ended September 30, 2015 was sent to every member in October 2015. |
- The auditors' report on statutory financial statements of the Company are unqualified. - Mr. Cyrus Mistry is the Chairman of the Company and Mr. N. Chandrasekaran is the Chief Executive Officer and Managing Director of the Company. The Company has complied with the requirement of having separate persons to the post of Chairman and Managing Director / Chief Executive Officer. - Ernst & Young LLP, the internal auditors of the Company, make presentations to the audit committee on their reports. # vi. Reconciliation of share capital audit: A qualified practicing Company Secretary carried out a share capital audit to reconcile the total admitted equity share capital with the National Securities Depository Limited ("NSDL") and the Central Depository Services (India) Limited ("CDSL") and the total issued and listed equity share capital. The audit report confirms that the total issued / paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialised shares held with NSDL and CDSL. # 116 Corporate Governance Report # vii. Code of Conduct The members of the board and senior management personnel have affirmed the compliance with Code applicable to them during the year ended March 31, 2016. The annual report of the Company contains a certificate by the CEO and Managing Director in terms of SEBI Listing Regulations on the compliance declarations received from Independent Directors, Non-executive Directors and Senior Management. # VI. Subsidiary companies The audit committee reviews the consolidated financial statements of the Company and the investments made by its unlisted subsidiary companies. The minutes of the board meetings along with a report on significant developments of the unlisted subsidiary companies are periodically placed before the Board of Directors of the Company. The Company does not have any material non-listed Indian subsidiary companies. The Company has a policy for determining 'material subsidiaries' which is disclosed on its website at the following link- TCS Material Subsidiary Policy # VII. Means of communication The quarterly, half-yearly and annual results of the Company are published in leading newspapers in India which include The Indian Express, Financial Express, LokSatta, Business Standard, The Hindu Business Line, Hindustan Times, and Sandesh. The results are also displayed on the Company's website "www.tcs.com". Press Releases made by the Company from time to time are also displayed on the Company's website. Presentations made to the institutional investors and analysts after the declaration of the quarterly, half-yearly and annual results are also displayed on the Company's website. A list of Frequently Asked Questions (FAQs) giving details about the Company and its shares is uploaded on the Company's website under 'Investor FAQs' section. A Management Discussion and Analysis Report is a part of the Company's Annual Report. # VIII. General shareholder information # i. Annual General Meeting for FY 2015-2016 Date: June 17, 2016 Time: 3.30 p.m. Venue: Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400 020 As required under Regulation 36(3) of the SEBI Listing Regulations, particulars of Director seeking re-appointment at the forthcoming AGM are given herein and in the Annexure to the Notice of the AGM to be held on June 17, 2016. # ii. Financial Calendar: Year ending: March 31 AGM in: June Dividend Payment: The final dividend, if declared, shall be paid / credited on or after June 24, 2016 # iii. Date of Book Closure / Record Date As mentioned in the Notice of the AGM to be held on June 17, 2016. # iv. Listing on Stock Exchanges National Stock Exchange of India Limited ("NSE") Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 BSE Limited ("BSE") 25th floor, P. J. Towers, Dalal Street, Mumbai 400 001 Corporate Governance Report 117 # Annual Report 2015-16 # v. Stock Codes/Symbol: NSE: TCS BSE: 532540 Listing Fees as applicable have been paid. # vi. Corporate Identity Number (CIN) of the Company: L22210MH1995PLC084781 # vii. Dividend Policy: Dividends, other than interim dividend(s), are to be declared at the annual general meetings of shareholders based on the recommendation of the Board of Directors. |
Generally, the factors that may be considered by the Board of Directors before making any recommendations for dividend include, without limitation, the Company's future expansion plans and capital requirements, profits earned during the fiscal year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and general market conditions. The Board of Directors may also from time to time pay interim dividend(s) to shareholders. # viii. Market Price Data: High, Low (based on daily closing prices) and number of equity shares traded during each month in the year 2015-16 on NSE and BSE: |Month|NSE|NSE|NSE|BSE|BSE|BSE| |---|---|---| | |High (`)|Low (`)|Total number of equity shares traded|High (`)|Low (`)|Total number of equity shares traded| |Apr-2015|2,713.90|2,401.00|2,89,11,488|2,712.00|2,402.00|24,52,454| |May-2015|2,648.60|2,453.70|2,44,05,295|2,646.95|2,456.60|27,34,559| |Jun-2015|2,647.10|2,476.80|2,18,20,731|2,644.85|2,477.00|11,16,353| |Jul-2015|2,646.90|2,455.00|2,37,28,747|2,646.65|2,455.00|14,63,153| |Aug-2015|2,752.85|2,486.00|2,62,61,929|2,750.95|2,485.80|10,95,999| |Sep-2015|2,643.70|2,490.00|2,21,55,319|2,641.80|2,493.90|9,88,569| |Oct-2015|2,770.00|2,455.85|2,98,77,307|2,769.00|2,458.00|19,45,200| |Nov-2015|2,547.80|2,332.50|1,63,54,418|2,551.00|2,333.00|12,40,003| |Dec-2015|2,466.40|2,315.25|2,05,65,193|2,464.50|2,316.65|15,40,410| |Jan-2016|2,439.00|2,243.00|2,36,87,321|2,436.35|2,243.75|16,09,051| |Feb-2016|2,440.00|2,115.00|1,72,12,095|2,439.95|2,119.00|23,18,321| |Mar-2016|2,550.00|2,162.00|2,14,98,837|2,534.00|2,163.50|10,87,795| # Corporate Governance Report # ix. Performance of the share price of the Company in comparison to the BSE Sensex: | | |TCS Share price and BSE Sensex movement| | | | | | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---| | |120|110|100|90|80| | | | | | | | | |Apr-15|May-15|Jun-15|Jul-15|Aug-15|Sep-15|Oct-15|Nov-15|Dec-15|Jan-16|Feb-16|Mar-16| | | |TCS Share Price|BSE Sensex| | | | | | | | | | | | |Base 100 = April 1, 2015| | | | | | | | | | | # x. Registrars and Transfer Agents: Name and Address: TSR DARASHAW Limited ("TSRDL") 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr. E. Moses Road, Mahalaxmi Mumbai 400 011 Telephone: 91 22 6656 8484 Fax: 91 22 6656 8494 E-mail: [email protected] Website: www.tsrdarashaw.com # xi. Places for acceptance of documents: Documents will be accepted at TSR DARASHAW Limited 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr. E. Moses Road, Mahalaxmi Mumbai 400 011 Time: 10.00 a.m. to 3.30 p.m. (Monday to Friday except bank holidays) Corporate Governance Report 119 # Annual Report 2015-16 For the convenience of the shareholders based in the following cities, transfer documents and letters will also be accepted at the following branches/agencies of TSRDL: # a. Branches of TSRDL: |TSR DARASHAW Limited|TSR DARASHAW Limited| |---|---| |503, Barton Centre, 5th Floor|'E' Road, Northern Town| |84, Mahatma Gandhi Road|Bistupur| |Bangalore 560 001|Jamshedpur 831 001| |Telephone: 91 80 2532 0321|Telephone: 91 657 2426616| |Fax: 91 80 2558 0019|Fax: 91 657 2426937| |E-mail: [email protected]|E-mail: [email protected]| |TSR DARASHAW Limited|TSR DARASHAW Limited| |Tata Centre, 1st Floor|2/42, Ansari Road, 1st Floor| |43, J. L. Nehru Road|Daryaganj, Sant Vihar| |Kolkata 700 071|New Delhi 110 002| |Telephone: 91 33 2288 3087|Telephone: 91 11 2327 1805| |Fax: 91 33 2288 3062|Fax: 91 11 2327 1802| |E-mail: [email protected]|E-mail: [email protected]| # b. Agent of TSRDL: Shah Consultancy Services Limited 3, Sumatinath Complex, 2nd Dhal Pritam Nagar, Ellisbridge Ahmedabad 380 006 Telefax: 91 79 2657 6038 E-mail: [email protected] # xii. Share Transfer System: File: AR_TCS_2015_2016.md 99.94% of the equity shares of the Company are in electronic form. Transfer of these shares are done through the depositories with no involvement of the Company. As regards transfer of shares held in physical form the transfer documents can be lodged with TSRDL at any of the above mentioned addresses. Transfer of shares in physical form is normally processed within ten to twelve days from the date of receipt, if the documents are complete in all respects. The Directors and certain Company officials (including Chief Financial Officer and Company Secretary), under the authority of the board, severally approve transfers, which are noted at subsequent board meetings. # Corporate Governance Report # xiii. Shareholding as on March 31, 2016 : # a. Distribution of equity shareholding as on March 31, 2016 : |Number of shares|Holding to capital|Percentage|Number of Accounts|Percentage to total accounts| |---|---|---|---|---| |1 - 100|1,96,27,837|1.00|5,44,880|83.80| |101 - 500|1,85,85,473|0.94|86,087|13.24| |501 - 1000|75,11,026|0.38|10,574|1.62| |1001 - 5000|1,30,65,695|0.66|6,560|1.01| |5001 - 10000|44,57,082|0.23|634|0.10| |10001 - 20000|52,25,757|0.27|361|0.06| |20001 - 30000|38,48,881|0.19|156|0.02| |30001 - 40000|39,32,420|0.20|112|0.02| |40001 - 50000|36,89,386|0.19|82|0.01| |50001 - 100000|1,68,34,051|0.85|235|0.04| |100001 - above|187,36,50,333|95.09|545|0.08| |GRAND TOTAL|197,04,27,941|100|6,50,226|100| # b. |
Categories of equity shareholders as on March 31, 2016 : |Category|Number of equity shares held|Percentage of holding| |---|---|---| |Promoters|144,34,51,698|73.26| |Other Entities of the Promoters Group|32,81,212|0.16| |Insurance Companies|7,86,04,759|3.99| |Indian Public and others|7,75,55,288|3.94| |Mutual Fund and UTI|2,15,69,947|1.09| |Corporate Bodies|1,02,23,439|0.52| |Banks, Financial Institutions, State and Central Government|17,09,799|0.09| |Foreign Institutional Investors|20,02,46,839|10.16| |Foreign Portfolio Investor - CORP|13,13,30,700|6.67| |NRI's / OCBs / Foreign Nationals|24,54,260|0.12| |GRAND TOTAL|197,04,27,941|100.00| Corporate Governance Report 121 # Annual Report 2015-16 # Categories of equity shareholders |Promoters|6.67%| |---|---| |Other Enes of the Promoters Group|10.16%| |Insurance Companies|0.09%| |Indian Public and others|0.52%| |Mutual Fund and UTI|1.09%| |Corporate Bodies|3.94%| |Banks, Financial Institutions, State and Central Government|3.99%| |Foreign Institutional Investors| | |Foreign Portfolio Investor - CORP| | |NRI's / OCBs / Foreign Nationals| | |Total|73.26%| # Top ten equity shareholders of the Company as on March 31, 2016: |Sr. No.|Name of the shareholder|Number of equity shares held|Percentage of holding| |---|---|---|---| |1|Tata Sons Limited|144,34,51,698|73.26| |2|Life Insurance Corporation of India|5,85,21,537|2.97| |3|Abu Dhabi Investment Authority|1,41,65,505|0.72| |4|Government of Singapore|1,12,99,187|0.57| |5|Oppenheimer Developing Markets Fund|83,09,112|0.42| |6|National Westminster Bank Plc As Depositary of First State Asia Pacific Leaders Fund a sub Fund of First State Investments ICVC|82,85,641|0.42| |7|Europacific Growth Fund|79,66,000|0.40| |8|Lazard Asset Management LLC A/C Lazard Emerging Markets Portfolio|76,82,828|0.39| |9|Copthall Mauritius Investment Limited|73,61,719|0.37| |10|Vanguard Emerging Markets Stock Index Fund, a series of Vanguard International Equity Index Fund|72,11,765|0.37| # Dematerialisation of shares and liquidity: The Company's shares are compulsorily traded in dematerialised form on NSE and BSE. Equity shares of the Company representing 99.94% of the Company's equity share capital are dematerialised as on March 31, 2016. Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Company's shares is INE467B01029. # Corporate Governance Report # xv. Outstanding 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 in the past and hence as on March 31, 2016, the Company does not have any outstanding GDRs / ADRs / Warrants or any convertible instruments. # xvi. Commodity price risk or foreign exchange risk and hedging activities Please refer to Management Discussion and Analysis Report for the same. # xvii. Equity shares in the suspense account: In accordance with the requirement of Regulation 34 (3) and Schedule V Part F of SEBI Listing Regulations, the Company reports the following details in respect of equity shares lying in the suspense account which were issued in dematerialised form pursuant to the public issue of the Company: |Particulars|Number of shareholders|Number of equity shares| |---|---|---| |Aggregate number of shareholders and the outstanding shares in the suspense account lying as on April 1, 2015|175|6,986| |Shareholders who approached the Company for transfer of shares from suspense account during the year|1|60| |Shareholders to whom shares were transferred from the suspense account during the year|(1)|(60)| |Shareholders of CMC Limited to whom shares were allotted pursuant to the scheme of amalgamation|26|820| |Aggregate number of shareholders and the outstanding shares in the suspense account lying as on March 31, 2016|200|7,746| The voting rights on the shares outstanding in the suspense account as on March 31, 2016 shall remain frozen till the rightful owner of such shares claims the shares. # xviii. Transfer of unclaimed / unpaid amounts to the Investor Education and Protection Fund ("IEPF"): Pursuant to Sections 205A and 205C of the Companies Act, 1956 and other applicable provisions, if any, of the Act, all unclaimed / unpaid dividend, application money, debenture interest and interest on deposits as well as the principal amount of debentures and deposits, as applicable, remaining unclaimed / unpaid for a period of seven years from the date they became due for payment, in relation to the Company, erstwhile TCS e-Serve Limited ("e-Serve") and CMC Limited ("CMC") which have merged with the Company, have been transferred to the IEPF established by the Central Government. No claim shall lie against the IEPF or the Company for the amounts so transferred prior to March 31, 2016, nor shall any payment be made in respect of such claims. Members who have not yet encashed their dividend warrant(s) pertaining to the final dividend for the financial year 2008-09 and onwards are requested to make their claims without any delay to TSRDL. |
Corporate Governance Report 123 # Annual Report 2015-16 # a) For shareholders of erstwhile e-Serve which has merged with the Company: The following table gives information relating to outstanding dividend accounts and the dates by which they can be claimed by the shareholders: |Financial Year|Date of declaration|Last date for claiming unpaid dividend| |---|---|---| |2009-10|August 24, 2010|August 23, 2017| |2010-11|August 12, 2011|August 11, 2018| |2011-12|July 10, 2012|July 9, 2019| |2012-13|May 30, 2013|May 29, 2020| # b) For shareholders of CMC which has merged with the Company: The following table gives information relating to outstanding dividend accounts and the dates by which they can be claimed by the shareholders: |Financial year|Date of Declaration|Last date for claiming unpaid dividend| |---|---|---| |2008-09|June 26, 2009|June 25, 2016| |2009-10|June 29, 2010|June 28, 2017| |2010-11|June 27, 2011|June 26, 2018| |2011-12|June 27, 2012|June 26, 2019| |2012-13|June 26, 2013|June 25, 2020| |2013-14|June 23, 2014|June 22, 2021| |2014-15|June 11, 2015|June 10, 2022| |2015-16|July 16, 2015|July 15, 2023| # c) For shareholders of Tata Consultancy Service Limited (TCS): A separate communication has been sent in January 2016 to the shareholders of TCS who have not encashed their dividend warrants and which are not yet transferred to IEPF, providing them details of the unencashed warrants and requesting them to comply with the procedure for seeking payment of the same. The following table gives information relating to outstanding dividend accounts and the dates by which they can be claimed by the shareholders in the financial year 2016-17: |Financial year|Date of Declaration|Last date for claiming unpaid dividend| |---|---|---| |2008-09|June 30, 2009|June 29, 2016| | |July 17, 2009|July 16, 2016| |2009-10|October 16, 2009|October 15, 2016| | |January 15, 2010|January 14, 2017| # Plant locations: In view of the nature of the Company's business viz. Information Technology (IT) Services and IT Enabled Services, the Company operates from various offices in India and abroad. The Company has a manufacturing facility at 17-B, Tivim Industrial Estate, Karaswada, Mapusa-Bardez, Goa. # Address for correspondence: Tata Consultancy Services Limited 9th Floor, Nirmal Building Nariman Point Mumbai 400 021 Telephone: 91 22 6778 9356 / 91 22 6778 9595 Fax: 91 22 6630 3672 Designated e-mail address for Investor Services: [email protected] Website: www.tcs.com # Corporate Governance Report 125 # Annual Report 2015-16 # DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY'S CODE OF CONDUCT This is to confirm that the Company has adopted a Code of Conduct for its employees including the Managing Director and Executive Directors. In addition, the Company has adopted a Code of Conduct for its Non-Executive Directors and Independent Directors. These Codes are available on the Company's website. I confirm that the Company has in respect of the year ended March 31, 2016, received from the Senior Management Team of the Company and the Members of the Board a declaration of compliance with the Code of Conduct as applicable to them. For the purpose of this declaration, Senior Management Team means the Chief Financial Officer, Global Head - HR, Global Business Unit Heads, Global Head - Legal and the Company Secretary as on March 31, 2016. N. Chandrasekaran Chief Executive Officer and Managing Director Mumbai, April 18, 2016 # INDEPENDENT AUDITORS' COMPLIANCE CERTIFICATE TO THE MEMBERS OF TATA CONSULTANCY SERVICES LIMITED 1. We have examined the compliance of conditions of Corporate Governance by TATA CONSULTANCY SERVICES LIMITED ("the Company"), for the year ended on March 31, 2016, as stipulated in: 2. - Clause 49 (excluding clause 49 (VII) (E) of the Listing Agreements of the Company with stock exchanges) for the period April 1, 2015 to November 30, 2015. - Clause 49 (VII) (E) of the Listing Agreements of the Company with stock exchanges for the period April 1, 2015 to September 1, 2015. - Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) for the period September 2, 2015 to March 31, 2016 and - Regulations 17 to 27 (excluding regulation 23 (4)) and clauses (b) to (i) of regulation 46 (2) and paragraphs C, D and E of Schedule V of the SEBI Listing Regulations for the period December 1, 2015 to March 31, 2016. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 3. |
We have examined the relevant records of the Company in accordance with the Generally Accepted Auditing Standards in India, to the extent relevant, and as per the Guidance Note on Certification of Corporate Governance issued by the Institute of Chartered Accountants of India. 4. In our opinion and to the best of our information and according to our examination of the relevant records and the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreements and regulation 17 to 27 and clauses (b) to (i) of regulation 46(2) and paragraphs C, D and E of Schedule V of the SEBI Listing Regulations for the respective periods of applicability as specified under paragraph 1 above, during the year ended March 31, 2016. 5. We state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH Partner (Membership No. 70928) Mumbai, April 18, 2016 # Corporate Governance Report # Business Responsibility Report 127 # Annual Report 2015-16 # Business Responsibility Report (As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) # Introduction Tata Consultancy Services Limited (TCS) has adopted the 'triple bottom-line' approach, recognising People, Planet and Profit as the primary pillars of corporate sustainability. At TCS, corporate sustainability is demonstrated through (a) fair, transparent and ethical governance, (b) engagement with marginalised and vulnerable communities, (c) adherence to and respect for all human rights, (d) offering specialised services and solutions to meet distinct needs of its clients, (e) reduction of impact of its operations on the environment and (f) promotion of employee well-being and safety. TCS operates in a large number of geographies across the globe. All these units of operation are encouraged to identify target beneficiaries in line with their local needs. The objective is to drive sustainability through various initiatives across the units of operation, supply chain, community and customers. While volunteering by employees is encouraged, the Company also utilises its own expertise in IT to address needs of the community and the environment. # Section A: General Information about the Company 1. Corporate identity number (CIN) of the Company: L22210MH1995PLC084781 2. Name of the Company: Tata Consultancy Services Limited 3. Registered address: 9th Floor, Nirmal Building, Nariman Point, Mumbai - 400 021 4. Website: www.tcs.com 5. E-mail id: [email protected] 6. Financial year reported: April 1, 2015 to March 31, 2016 7. Sector(s) that the Company is engaged in (industrial activity code-wise): |ITC CODE|PRODUCT DESCRIPTION| |---|---| |85249009|Computer Software| 8. List three key products/services that the Company manufactures/provides (as in balance sheet): 1. Application development and maintenance 2. Enterprise solutions including business intelligence 3. Business process outsourcing 9. Total number of locations where business activity is undertaken by the Company: There are 111 global locations - Number of International Locations (Provide details of major 5): |Region|Number of Locations| |---|---| |North America|16| |LATAM|3| |UK & Ireland|18| |Europe|29| |APAC|23| |MEA|8| - Number of National Locations: 14 National locations 10. Markets served by the Company: North America, South America, United Kingdom & Ireland, Europe, Asia Pacific, Middle East & Africa and India. # Section B: Financial Details of the Company |Tata Consultancy Services Limited|FY16 Stand alone|FY16 Consolidated| |---|---|---| |Paid up capital|197.04|197.04| |Total Turnover|89,604.05|111,700.08| |(a) Revenue from operations (net of excise duty)|85,863.85|108,646.21| |(b) Other income (net)|3,740.20|3,053.87| |Profit for the year (after taxes and minority interest)|22,882.70|24,291.82| |Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%):|1.64% of average profit for previous three years in respect of standalone TCS (computation as prescribed by the Companies Act, 2013).|1.64% of average profit for previous three years in respect of standalone TCS (computation as prescribed by the Companies Act, 2013).| # 5. List of activities in which expenditure in entity/entities? [Less than 30%, 30-60%, More than 60%]: Not applicable |Sr. No|Particulars|Amount spent in ` crores| |---|---|---| |1|Education & Skill Building|78.08| |2|Health & Wellness|79.44| |3|Restoration of Heritage Site|0.33| |4|Environmental Sustainability|0.07| |5|Disaster Relief|18.24| |6|Contribution to TCS Foundation|118.07| |Total|Total|294.23| The Company's spending on Corporate Social Responsibility (including overseas expenses) is ` 381.42 crores. # Section D: BR Information 1. |
Details of Director/Directors responsible for BR a) Details of the Director/Director responsible for implementation of the BR policy/policies: The Corporate Social Responsibility (CSR) Committee of the Board of Directors is responsible for implementation of BR policies. The members of the CSR Committee are as follows: - i. DIN Number: 00010178 Name: Mr. Cyrus Mistry Designation: Chairman - ii. DIN Number: 00548091 Name: Mr. O.P. Bhatt Designation: Independent Non-Executive Director - iii. DIN Number: 00121863 Name: Mr. N. Chandrasekaran Designation: Chief Executive Officer and Managing Director b) Details of the BR head: |Sr. No|Particulars|Details| |---|---|---| |1|DIN Number|NA (if applicable)| |2|Name|Mr. Ajoyendra Mukherjee| |3|Designation|Executive Vice President & Global Head HR| |4|Telephone number|022 - 67789999| |5|e-mail id|[email protected]| i. Does the Company have any Subsidiary Company/ Companies? Yes ii. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s): Yes, 22 of Company's overseas subsidiaries participate in BR activities. The Company's Indian subsidiaries have their respective CSR programmes. iii. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? The Company does not mandate its suppliers/distributors to participate in the Company's BR initiatives. However, they are encouraged to adopt such practices and follow the concept of being a responsible business. # 2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N): The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) released by the Ministry of Corporate Affairs has adopted nine areas of Business Responsibility. These briefly are as follows: - P1 Business should conduct and govern themselves with ethics, Transparency and Accountability - P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle - P3 Businesses should promote the wellbeing of all employees - P4 Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised - P5 Businesses should respect and promote human rights - P6 Business should respect, protect, and make efforts to restore the environment - P7 Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner - P8 Businesses should support inclusive growth and equitable development - P9 Businesses should engage with and provide value to their customers and consumers in a responsible manner Business Responsibility Report 129 # Annual Report 2015-16 |S. No|Questions|P1|P2|P3|P4|P5|P6|P7|P8|P9| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---| |1|Do you have a policy / policies for....|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |2|Has the policy being formulated in consultation with the relevant stakeholders?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |3|Does the policy conform to any national / international standards?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |4|Has the policy been approved by the Board? Is yes, has it been signed by MD/owner/CEO/appropriate Board Director?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |5|Does the company have a specified committee of the Board/ Director/ Official to oversee the implementation of the policy?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | | | | | | | |6|Indicate the link for the policy to be viewed online?|http://www.tcs.com/|Same as P1|http://www.tcs.com/about/corp_responsibility/Pages/environmental.aspx|Same as P1|P1|as P1| |7|Has the policy been formally communicated to all relevant internal and external stakeholders?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |8|Does the company have in-house structure to implement the policy/policies?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |9|Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders' grievances related to the policy/policies?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | |10|Has the company carried out independent audit/evaluation of the working of this policy by an internal or external agency?|Y|Y|Y|Y|Y|Y|Y|Y|Y| | | | # Business Responsibility Report # Governance related to BR Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year: Quarterly Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? Yes, the Company publishes its sustainability report on GRI 3.1 framework annually. It is also available on the Company's website www.tcs.com/cs # Section E: Principle-wise performance # Principle 1 Business should conduct and govern themselves with Ethics, Transparency and Accountability 1. Does the policy relating to ethics, bribery and corruption cover only the company? No 1. Does it extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others? All companies in TCS group are covered by the policy 2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? |
197 complaints were received during the year 2015-16, from various stakeholders. 89.8% of these were satisfactorily resolved. Internal review is under progress for the pending items. # Additional Information The Tata Code of Conduct (TCoC) is the guiding document on principles of responsible business conduct for all employees. Created in 1998, the TCoC has been influenced by the UN Declaration of Human Rights and the ILO principles. Within TCS, it is available on the intranet and on the Company's webpage. Guided by the managers and a global network of local ethics counsellors, all employees adhere to the principles laid down in the TCoC. The Corporate Sustainability Assessment which is conducted annually includes review of awareness and adherence to the TCoC. An updated version of the Tata Code of Conduct was released during the year. # Principle 2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle. TCS has evolved its strategy around integrated customer-centric services delivered from multiple global locations with consistent quality through its Global Network Delivery Model (GNDM™). The Company follows rigorous quality management processes to ensure highest quality of service delivery. TCS is the world's first organisation to achieve an enterprise-wide Maturity Level 5 on CMMI® and P-CMM® based on SCAMPISM. TCS has evolved an 'Integrated Quality Management System' (iQMS) which caters to all types of services it delivers and is aligned with the strategic objectives of the Company. iQMS is an integrated approach for implementing practices of world-class quality models such as ISO 9000 (Quality), ISO 20000 (Service Management), CMMI, ISO 27001 (Security), ISO 14001 (Environment) and OHSAS 18001 (Health & Safety). The assured world class high quality of services ensures that the IT system built by TCS would be safe and sustainable throughout the lifetime of the system anywhere in the world. 1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities. There are many examples, some of which are well known to the public at large. Three of these are mentioned below: 1. SADAREM (Software for Assessment of Disabled for Access Rehabilitation and Empowerment) 2. State Government Certificate Delivery Gateway (MeeSeva) 3. Remote Energy Management Solution # SADAREM SADAREM (Software for Assessment of Disabled for Access Rehabilitation and Empowerment): Objective of the Software for Assessment of Disabled for Access Rehabilitation and Empowerment (SADAREM) initiative is to create a Dynamic Web enable system for comprehensive access, rehabilitation and empowerment, through automation, capacity building, assessment of Persons With Disabilities (PWDs) and maintaining Decision Support System (DSS). Government of Andhra Pradesh has taken this initiative of identifying & creating the centralised database for person with disabilities by using scientific approach & disability guidelines. SADAREM ICT solution is designed to cover the following features: 1. Scientific assessment of degree of the disability is done on the basis of methods and formulas prescribed in the Gazette 2001 issued by the Ministry of Social Justice and Empowerment, Govt. of India. 2. Generation of a computer based disability certificate with unique ID along with identity card. 3. Assessment of needs and maintaining the centralised data base. Software will also generate all the details including the support services that the disabled persons. # Annual Report 2015-16 are entitled, based on the need assessment and a record of the services provided from time to time. iv. The database thus generated will be hosted in the public domain to enable service providers to reach out to the disabled persons. # b) State Government Certificate Delivery Gateway (MeeSeva) "MeeSeva" is a Telugu word which means, 'At your service'. This is an e-governance initiative that incorporates the vision of National eGov Plan "Public Services Closer to Home" and facilitates single entry portal for entire range of G2C services. MeeSeva is a project providing faster, easier and transparent access to various G2C services through more than 6000 kiosks by utilising Information & Communication Technologies. It's an Integrated One Stop Solution for 90 Million Citizens to approach Government for all their pressing needs. The Project brings in a digital PKI enabled integrated architecture to deliver G2C Services in a purely electronic mode (replacing issuing of ink signed paper based manual certificates). MeeSeva is operational across all the districts of Telangana and Andhra Pradesh with the centralised architecture, any service can be accessed from anywhere. |
The services offered include the delivery of Land Records (Pahani/Adangal, ROR 1B, FMB), Income, Birth, Death, Residence, Caste certificates, Registration Department Services like Encumbrance Certificates, Certified Copy of Registration Documents, DISCOM Services like new electricity connection, load change, category change services etc. # c) Remote Energy Management Solution File: AR_TCS_2015_2016.md TCS has continued its investment in 2015-16 in the Remote Energy Management Solution. The technology has been further enhanced leveraging T CUP (TCS Connected Universe Platform), the Company's cutting edge and patent-rich cloud based IoT platform, and SDAF (Sensory Data Analytics Framework) providing a scalable platform for data management, analytics, rich query capabilities and visualisation. The scalability of this IoT platform can be used to integrate other resource management aspects such as water, transportation etc, while continuously enhancing the energy management capabilities. TCS has also set up a centralised Resource Operations Centre at Kochi comprising of experienced and trained team comprising of subject matter experts, energy analysts and cloud based IT systems experts, to enable real time monitoring of energy consumption and advanced energy analytics. In addition, further investments have been made in metering infrastructure, and the number of sites in India that are now actively monitored and managed have gone beyond 100. # 2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional): # A. Reduction during sourcing/production/distribution achieved since the previous year throughout the value chain? - a. SADAREM - Not applicable; addressed area is social concern. - b. State Government Certificate Delivery Gateway (MeeSeva) - Not applicable; addressed area is social concern. - c. Remote Energy Management Solution - Not applicable # B. Reduction during usage by consumers (energy, water) has been achieved since the previous year? - a. SADAREM - Not applicable; addressed area is social concern. - b. State Government Certificate Delivery Gateway (MeeSeva) - Not applicable; addressed area is social concern. - c. Remote Energy Management Solution TCS has been able to proactively manage the annual energy bill of its India operations and has achieved a reduction in energy consumption of 26.91 million units, after normalising for any significant changes in business operations at the site level. # 3. Does the company have procedures in place for sustainable sourcing (including transportation)? Yes # i. If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so. Sustainable sourcing describes a sourcing exercise which goes beyond economic considerations and takes into account environmental, social and ethical factors as well. It is a widely practiced tool within TCS and the endeavour is to maximise its reach with every passing year. TCS has a stated environment policy and an occupation health and safety policy. The vendors have to ensure compliance to these policies. It covers various issues like health of their workers deployed, safety measures (helmet, rope, safety-belt etc.) adopted, discharge from equipment, hygiene norms, PUC requirement for vehicles hired, age of vehicles used etc. The adherence 132 Business Responsibility Report # 4. Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? Yes # i. If yes, what steps have been taken to improve their capacity and capability of local and small vendors? While the criteria for selection of goods and services is quality, reliability and price, TCS gives preference to small organisations, particularly promoted by entrepreneurs from socially backward communities. Two vendors from the marginalised community commissioned and empanelled with TCS under the CSR supplier diversity and affirmative action initiatives continue to work with TCS. Under the BriDgeIT programme, TCS has trained digital entrepreneurs who have established themselves as key resources in the villages within which they operate. The Company has worked to open new avenues and provide opportunities to the entrepreneurs to utilise their skills in an effective manner including providing them the opportunity to be part of Jagriti Yatra, the government initiative of 'building India through enterprise'. To enhance livelihood options in Panvel, India, TCS associates have trained 45 women in making eco-friendly jute bags through the 'Women Empowerment Programme'. Through TCS-Maitree, a 1,500 sq ft convention center was built as a workstation and storage area for raw material & finished goods. Training on screen printing, block painting has also been provided and TCS procured 9 full shutter sewing machines, one embroidery machine, and a snap button machine for these women. |
Through TCS' support this initiative has successfully completed an order of making 13,600 cotton bags for TCS World 10K & Mumbai Marathon in the last 3 years. # 5. Does the company have a mechanism to recycle products and waste? Yes # i. If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so. The nature of the Company's business is such that there are no significant emissions or process wastes. The waste generation is fairly limited and restricted primarily to e-waste, lube oil waste, waste from lead-acid batteries and municipal solid waste. The Company's waste management practices seek to reduce the environmental impact by reduction in generation, segregation at source, maximisation of recycling and reuse to achieve the target of <5% waste to landfill. |Waste Lube Oil, UPS batteries, e-waste|disposed through government authorised recyclers|(100% recycling)| |---|---|---| |Waste office paper|sent for recycling|(100% recycling)| |Printer and toner cartridges|sent back to the manufacturer under product take-back arrangement|(100% recycling)| |Bio-degradable garden waste and food waste|vermi-composting and bio-digestion respectively|(30% recycling)| # Additional Information # Environment Performance - FY 2015-16 |Sr No|Environmental Performance|% change (over FY 2014-15)|% change (over FY 2007-08)| |---|---|---|---| |1|Electricity Consumption (kWh/FTE/month)|5% decrease|44.6% Decrease| |2|Fresh water consumption (ltrs/FTE/month)|2% Increase|14.1% Decrease| |3|Carbon footprint due to Scope 1 + Scope 2 (tCO2e/FTE/annum)|6% Decrease|43.3% Decrease| |4|Paper consumption (Reams/1000FTE/month)|6% Decrease|79.6% Decrease| # Principle 3 # Businesses should promote the wellbeing of all employees 1. Please indicate the total number of employees: Total number of employees including subsidiaries as on March 31, 2016 was 3,53,843 2. Please indicate the total number of employees hired on temporary/contractual/casual basis: 15,037 employees were hired on a contractual basis 3. Please indicate the number of permanent women employees: Total number of permanent women employees as on March 31, 2016 was 1,19,664 Business Responsibility Report 133 # Annual Report 2015-16 # 4. Please indicate the number of permanent employees with disabilities: 565 on the basis of self-declaration # 5. Do you have an employee association that is recognised by management? : Yes # 6. What percentage of your permanent employees is members of this recognised employee association? : 0.05% # 7. Please indicate the number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. Child labour, forced labour, involuntary labour is prohibited in the workplace as stated in the Company's Code of Conduct. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (India) and the Rules thereunder. During FY 2015-16, the Company has received 34 complaints on sexual harassment, out of which 33 complaints have been resolved with appropriate action taken and 1 complaint remains pending as on March 31, 2016. Internal review is under progress for the pending complaint. No complaints have been received on child labour, forced labour and involuntary labour in FY 2015-16. # Additional Information The Company has a number of policies and programmes focussed on employee wellbeing. These include holiday homes, pharmacy benefits, vacation for employees who are retiring, periodic health screening, safety for women associates and health insurance coverage including parents/in-laws. The policy change management framework takes into consideration, feedback from all relevant stakeholders. The policies and programmes are implemented through various internal teams, with HR taking the ownership. There are several platforms within TCS which seek to empower employees. 'Employee Concerns' is an online tool where a grievance may be raised by an employee which is then addressed by stakeholders within predefined Service Level Agreements (SLAs). Initiatives such as 'iConnect' and 'mPower' provide the opportunity to resolve issues of key importance and facilitate individual mentoring and coaching with senior managers. TCS also offers an Employee Assistance Programme (EAP) for India based associates, which includes professional counselling services in important life matters such as personal, relationship, work and parenting concerns that an employee voluntarily seeks. Associates can communicate with the counsellors through a toll-free number, online correspondence as well as face to face meetings. There is also a 24x7 emergency number for immediate concerns. # 8. What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year? |Permanent Employees|Permanent Women Employees|Casual/Temporary/Contractual Employees|Employees with Disabilities| |---|---|---|---| |82%|86%|80%|Included above| # 1. |
Safety All the categories of employees mentioned above have been covered through our training modules. Training on health and safety is imparted to associates as a part of the induction training combined with an annual refresher web based HSE training. An effective mode of training has been informal floor-walks and town-hall meetings. Additionally, regular fire drills, several awareness campaigns including road safety, fire safety, ergonomics, behaviour based safety, etc. are conducted to reach out to the associates. Innovative modes of training including video based learning modules and interactive web based training have been very effective and in FY16, over 6,74,629 person-hours of training on health, safety and environment has been imparted through the various training programmes. TCS provides its employees huge opportunities for learning. Substantial investments in infrastructure and tools have been made to keep its workforce motivated and ready for the evolving technology. Adherence to the Company's HR policies is audited by the internal auditor of the Company. The HR compliance team continues to monitor the changes in legislation pertaining to employment, labour and immigration laws across the globe to ensure compliance, which is checked through regular audits. The HR compliance team pro-actively prepares alerts to identify key areas where TCS needs to introduce new policies or modify the existing policies to remain compliant. A number of non-work related employee engagement initiatives such as fun events, sports, cultural activities and volunteering for social causes are organised across the globe under our employee engagement platform known as 'TCS-Maitree'. The culture of volunteering helps employee bonding within the organisation and reduces stress at work. Employees are also encouraged to involve their families in these activities. # Principle 4 Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised 1. Has the company mapped its internal and external stakeholders? Yes 2. Out of the above, has the company identified the disadvantaged, vulnerable & marginalised stakeholders? Yes 3. Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalised stakeholders? Yes # Principle 5 Businesses should respect and promote human rights 1. Does the policy of the company on human rights cover only the company or extend to the Group / Joint Ventures / Suppliers / Contractors / NGOs / Others? 2. The policy is applicable to TCS, its subsidiaries and vendors. The Company's commitment to follow the basic principles of human rights is reflected in the checks and balances within the HR processes. The commitment to human rights is embedded in the 'Tata Code of Conduct', adopted by the Company. All employees, including security personnel, are sensitised to human rights as part of their orientation programme. With respect to vendors, TCS follows a rigorous screening process before entering into a business relationship. All the contracts that the Company enters into with vendors require the vendor to comply with the relevant laws safeguarding labour rights and human rights in their respective jurisdiction. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? # Principle 6 Business should respect, protect, and make efforts to restore the environment 1. Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/others. 2. TCS' Environmental Policy is applicable to all the business units/groups and extends to business partners including suppliers, vendors and contractors. Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? Y/N. If yes, please give hyperlink for webpage etc 3. Yes. The 'TATA Group Climate Change Policy' and TCS' 'Environment Policy' guide the organisation to continually mitigate the impact on climate change and global warming as a result of our operations. The Company has specific targets to reduce the carbon footprint and monitors it on an ongoing basis. Detailed plan to achieve these targets focus on creating green infrastructure which are designed for better energy efficiency, drive green IT (IT enabled energy efficiency in data centers and distributed IT networks), efficient operations and green power purchase. The details of the targets, performance and the various initiatives are available at: - Corporate Sustainability page on TCS website: http://www.tcs.com/about/corp_responsibility/Pages/default.aspx - Corporate Sustainability Report on TCS website: http://www.tcs.com/about/corp_responsibility/cs-report/Pages/default.aspx Does the company identify and assess potential environmental risks? # Annual Report 2015-16 Impact assessment is conducted at organisation level as well as site level to identify all environmental impacts from our operations. # 4. |
Does the company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed? Not Applicable # 5. Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc. Yes. TCS is committed to drive energy efficiency. This is achieved through creating green building infrastructure, operating offices efficiently and driving green IT. Some key initiatives include - creating green office campuses designed at par with LEED standards and driving data centre energy efficiency through server virtualisation and optimisation of cooling load. The details of these initiatives and more information are available on: - a) Corporate Sustainability page on TCS website: http://www.tcs.com/about/corp_responsibility/Pages/default.aspx - b) Corporate Sustainability Report on TCS website: http://www.tcs.com/about/corp_responsibility/cs-report/Pages/default.aspx # 6. Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported? Yes. All emissions/waste generated at various offices of TCS are within permissible limits. These are continuously monitored, reviewed internally and reported to the CPCB/SPCB as per the requirement. # 7. Number of show cause / legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. None # Additional Information 'Environmental Policy' of the Company has been drafted in line with the ISO 14001:2004 environment management system. The overall responsibility of environment management lies with the Company's CEO & MD and the progress is reviewed by health, safety sustainability committee of the Board of Directors on a half yearly basis. External stakeholders can access this policy through the Company's website. For internal stakeholders, the policy has been posted on the intranet and at office receptions. Training on this policy is periodically conducted for all associates. TCS has enterprise wide certification for integrated health safety & environment management system as per ISO 14001:2004 and OHSAS 18001:2007. # Principle 7 Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner # 1. Is your company a member of any trade and chamber or association? Yes # 2. If Yes, Name only those major ones that your business deals with: - a. National Association of Software and Services Companies (NASSCOM) - b. Confederation of Indian Industries (CII) - c. All India Management Association (AIMA) - d. Federation of India Chambers of Commerce and Industry (FICCI) - e. Federation of Indian Exporters Organisation (FIEO) - f. Computer Society of India (CSI) # 3. Have you advocated / lobbied through above associations for the advancement or improvement of public good? Yes i. If yes specify the broad areas (drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others) TCS has participated in industry body consultations in the following areas: - a. Governance and Administration - b. Sustainable Business Principles - c. Inclusive Development Policies (with a focus on skill building and literacy) - d. Economic Reforms - e. Tax and other legislations # Additional Information TCS uses the Tata Code of Conduct as a guide for its actions in influencing public and regulatory policy. # Principle 8 Businesses should support inclusive growth and equitable development # 1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof: Yes, summary of initiative/projects undertaken is given below. Programmes are categorised as per themes of interest i.e. - a. Education & Skill Building - b. Health & Wellness - c. Restoration of Heritage sites - d. Disaster Relief - e. Environmental Sustainability - f. Global Initiatives - g. Associate Volunteering 136 Business Responsibility Report # Details of Projects Undertaken # a. Education & Skill Building # i. Adult Literacy Programme (ALP), a Computer Based Functional Literacy Programme TCS designed the Adult Literacy Programme (ALP) by using its expertise in IT to conceptualise and develop the modules to achieve functional literacy. Today, the software is available in 9 Indian languages and 3 foreign languages namely, Northern Sotho (South Africa) and Moore (West Africa) and Arabic. TCS is also collaborating with various colleges and institutes to promote literacy through students. Since inception, the programme has reached 2,61,518 beneficiaries which include prison inmates in New Delhi and Lucknow. The ALP is available on www.tcsion.com/ALP # ii. |
UDAAN, initiative for increasing employability of Kashmiri Youth TCS was the first organisation in India to sign an MOU with the National Skill Development Corporation (NSDC) to promote employability among youth from Jammu & Kashmir. Through a 14 week training programme designed by TCS, UDAAN seeks to improve skills relevant to the industry as well as increase employment opportunities available to them. Since inception, the programme has trained 697 youths and 559 got offers of employment. 370 of these youths have joined TCS. # iii. EMPOWER Through Empower, TCS aims at building capacity and capabilities of its support staff at various TCS offices. Modules for training include acquiring basic computer skills, communication through English, and other relevant soft skills. In FY16, over 1200 beneficiaries received training under the programme. # iv. Academic Interface Programme (AIP) The Company commitment towards the development of faculty for academic institutes, improvement of employability of students and development of curriculum as per industry requirements has been consistent. # v. Advanced Computer Training Center (ACTC) In an effort to promote employability among individuals with visual impairment, the Company has created a programme that offers IT-enabled vocational courses that are in sync with the industry requirements, personality development and training in corporate etiquette. This unique programme aims at bridging the gap between computer skills of persons who are visually impaired and those required by IT/ITES. Till date, TCS has trained 176 individuals of which 127 candidates have found employment. # vi. TCS IT Wiz TCS IT Wiz, the biggest inter school IT Quiz programme in India, started in 1999 as a part of the educational Initiative to build awareness and hone IT skills for young students. The programme is the first and the largest powerful Knowledge Platform of this scale, on Information Technology for students of class 8-12. This year, the programme reached more than 17,000 students, from over 1000 schools in 15 cities. Business Responsibility Report 137 # Annual Report 2015-16 # vii. Rural IT Quiz The Quiz aims at enhancing IT awareness among students from rural areas, promoting inclusive growth and building their confidence. The Rural IT Quiz currently reaches rural students in Madhya Pradesh, Gujarat, Maharashtra, Chattisgarh and Rajasthan. The Rural IT Quiz programme was conducted in the States of Gujarat, Maharashtra, Karnataka, Chattisgarh, Madhya Pradesh and Rajasthan. More than 14 lakh students participated in the programme in FY 2015-16. Students participating in large numbers at the Rural IT Quiz in Gujarat # viii. TCS Maitree Village Development Programme TCS is working to deploy a sustainable model to improve education, healthcare and environment and promote economic empowerment in rural areas across India. To enhance their livelihood options in Panvel, India, TCS associates have trained 50 women in making eco-friendly jute bags through the 'Women Empowerment Programme'. In this village more than 520 children are benefitted through the provision of a two storey school building equipped with a Science lab, a library and a solar operated Computer lab. Infrastructure for clean drinking water is also built as supplementary support. Volunteers visit the school every weekend to teach the kids conversational English, Science and Maths. The Panvel Rural Development initiative is one of the flagship volunteering initiatives of TCS Maitree. More than 1114 people both children and adults have benefitted from these initiatives in Panvel (Maharashtra), Padmapur (Odisha) and Challera (UP). # ix. BPS Employability Programme Since 2010, TCS has dedicated itself towards addressing this critical concern of lack of exposure to contemporary skills within the country. TCS launched a simple yet powerful employability training programme for marginalised youth across India. This Employability Training Programme comprises 80 to 100 hours of powerful interactive content designed to develop skills that increase their chances of finding employment. The training provides an effective platform for the development of communication skills, corporate etiquette, interview skills, resume building and basic computer knowledge. Above all, the programme enables the trainees to become self-confident. Recruitment process for entry level jobs is conducted by TCS BPS post the training. Since its inception in 2010, the programme has trained more than 50,000 youth in India across 17 states. # x. Avasara Learning Academy TCS is supporting the construction of the GAINS (Girls Advancing in STEM) Academy which began in Pune in October 2014. Avasara aims at providing twenty-first century skill-building for girls (skills such as exposure to coding and critical writing). The girls are taught by faculty who were formerly at Woodstock School and the American school of Chennai. |
Students at the Avasara Learning Academy # xi. BriDgeIT BriDgeIT is unique project to demonstrate the use of IT as a key enabler in school education, adult literacy and creation of entrepreneurs. # Digital literacy through the BridgeIT Programme at Jhansi, India # IT Employability Programme The goal of IT Employability is to enhance the employability skills of undergraduate and engineering students from rural areas and marginalised sections of society, thereby promoting sustainable and inclusive growth. The programme comprises of three modules which cover business communication, data interpretation and logical reasoning, quantitative aptitude, as well as programming languages such as C and C++. The training involves 200 hours of learning, which starts during the fifth semester and continues, in a phased manner, till the seventh semester of the undergraduate or engineering course. Post training, all students gain the opportunity to attend TCS' placement drive. All the IT Employability programme deployments follow TCS' talent development procedures, which include immediate feedback, delayed feedback, and final impact. A key highlight of the programme is that the learning is entirely volunteer driven, and led by TCS associates. Volunteers are highly committed to the programme and venture into remote locations over several weekends to teach students. In FY 16, over 500 students benefitted from this programme. # F. C. Kohli Research Center, IIIT Hyderabad The new center aims to coordinate and energise education and research and help in imparting high-quality training to bachelors, masters, and doctoral students. The research to be undertaken is expected to have the potential for significant social impact through innovative products, and start-ups. # Other Programmes File: AR_TCS_2015_2016.md At the Manuski Hostel in Pune, TCS has sponsored the education of 40 children from socially and economically disadvantaged communities. Water filters, computers and a broadband connection have also been provided within the girls' hostel. A library has been set up for the boys' hostel. In NOIDA, TCS has associated with Vidya & Child to promote learning in Math, English and other soft skills among children in these locations. TCS also provides financial support for meritorious students in Class X, XI & XII. In FY 2015-16, 18 students received sponsorships. TCS has been supporting students through FAEA for the past 5 years. This year, TCS contributed ₹ 3,50,000 towards 5 scholarships through Foundation for Academic Excellence and Access (FAEA) to help SC/ST students studying in professional courses in leading colleges in the country. TCS has also sponsored the functioning of 41 Gadadhar Abhyudaya Prakalpa (GAP) units promoting holistic development of poor children across the country. # Children participating in wellness programme Business Responsibility Report 139 # Annual Report 2015-16 # b. Health & Wellness # i. Cancer Research Institute An integrated Hospital Management System and IT infrastructure which includes a comprehensive and fully integrated, web-based solution has been provided free of cost to the Cancer Institute at Chennai. In FY 16, as a result of laboratory equipment integration, the benefit of HMS could reach a larger number of patients, yielding as much as 5,40,000 investigation results. # ii. Tata Medical Center (TMC) TCS also designed and implemented a comprehensive Hospital Management System for TMC, Kolkata. TCS has been supporting the Hospital Management System and IT-Infrastructure since 2011 and has added value through constant on-demand enhancements and upgrades. In FY 16, compatibility for clinical and EMR functions has been ensured and the endoscopy process has been enhanced by third party software integration and re-organisation of the order and payment process. Computer-on-Wheels has been configured and introduced in wards to ensure immediate information and update. The new GE-PACS system integration with the HMS was carried out without impacting day-to-day operations in the Radiology Lab. The donor fund management process has been linked with social assessment for disbursal of funds to the low income patients. Employee leave and appraisal process has been implemented for in-house staff. The IVR system and OS in digital networks has been upgraded. Physical setup of key equipment has been changed for better air-circulation and maintenance. In FY 2015-16, more than 1,30,000 patient visit and treatment details were successfully logged. # iii. Projects undertaken by the CSR Tech Team TCS' Tech CSR Team uses information technology (IT) as key enabler to assist such organisations and is instrumental in analysing and highlighting areas of improvement and suggesting processes and systems to increase efficiency for social organisations. |
Tech CSR team offers multiple technical competencies and provides simple, user friendly and holistic systems which assist in mapping core functions of the social programme and translate them into tools for efficiency, visibility and accountability. In FY 2015-16, the Tech CSR Team has supported and successfully launched projects for Mumbai Mobile Creches, Operation Smile, Center for Social Action and Impact India. # iv. AIIMS Transformation To make a key impact on AIIMS, TCS realised that transforming the current OPD process by enriching the patient experience by reducing the time between the entry and exit process is the way forward. TCS decided on the following approach post comprehensive analysis. Phase I (Short Term) would involve OPD Transformation and Performance and improvement of existing IT systems and Phase -II (Long Term) would involve ERP Implementation and EMR Stream. Post TCS' intervention, the patient reception center now has a seating capacity of 750 with 52 operational counters. There are 10 operational Web Kiosks with an increased capacity in the waiting area. 85 patient care coordinators have been assigned and 34 departments have successfully streamlined their processes to treat a patient population of 1000/day. # v. Swachh Bharat Abhiyaan by TCS It is imperative to not only provide high quality education to all sections of the society, but also ensure that learning happens in a clean and healthy environment. The 'Swachh Bharat, Swachh Vidyalaya Abhiyan', launched by the Government of India, aims to improve hygiene across schools through improved water and sanitation facilities. TCS supports this vision and has continued to provide dedicated sanitation. 140 Business Responsibility Report # Providing access to sanitation facilities through support for the Swachh Bharat Abhiyan Facilities for girl students in government schools, through 'Swachh Bharat Abhiyaan' programme. The programme is committed to providing the girl child the surety of safety, dignity, and equality. A special task force was formed in October 2014 to implement this programme within a short timeframe. Implementation commenced in March, 2015 and was completed in the selected schools by July 31, 2015. The Ministry of HRD and state authorities have noted that the TCS model is an exemplary approach towards sanitation which can be adopted by other corporates and PSUs. TCS' intervention reached 80,757 girls in 1472 schools across 1169 villages in 4 states. # c. Restoration of Heritage Sites # i. Restoration of the Rajabai Clock Tower, Mumbai University The Rajabai Clock Tower is located in Fort campus of the University of Mumbai and is a heritage site. The architectural restoration of the tower involved structural services (stoning, restoring woodwork, water-proofing, electrical work and fire alarms) interior works along with ensuring the longevity of the building for future generations. One of the enormous challenges of this project was to implement sensitive restoration and repair work of the clock tower, with the clock functioning and working at a height of 87m (approximately 29 floors). This was carried on successfully via specialist workers and restorers. The end result is a phenomenal building reinstated to its magnificence. TCS sponsored the restoration of the iconic Rajabai Clock Tower in Mumbai. # d. Disaster Relief # i. Supporting relief work for the Chennai Floods TCS served as the lead company in the TATA group's emergency response to the floods in Tamil Nadu. In addition to setting up a community kitchen, distribution of food, emergency response kits, initiating health and wellness interventions were carried out. Health & Wellness Camps were conducted at several villages. 2,850+ people who were affected by the floods were treated at these camps. Over 40 villages were surveyed and 30 villages were shortlisted for distributing kits through partner NGO's. TCS donated ` 10 crore to Tamil Nadu government's flood relief work and also donated ` 13.8 crore to Tata Group's efforts. Business Responsibility Report 141 # Annual Report 2015-16 # e. Environmental Sustainability # i. Turtle Conservation Programme TCS in association with the Sahyadri Nisarga Mitra Chiplun has been implementing Marine Turtle Conservation Programme on participatory basis from 2010-11. The aim of the programme is to protect the breeding sites, prevent illegal hunting and killing of turtles and protect these species from other predators at breeding sites. In FY 2015-16, the programme was implemented in 5 locations along the Maharashtra coastline. Till date, 150 nests as well as breeding population of endangered (female) Olive Ridley turtles were protected and 16202 eggs were successfully located to hatchery. A total 8290 hatchlings were successfully released into their natural habitat during breeding period from 2010-11 to 2015-16. |
The programme has helped achieve the highest survival rate of 51.17% of hatching thereby contributing to an increase in the marine turtle population worldwide. # ii. Chinnappanahalli Lake Conservation TCS started the association with Chinnapanahalli Lake, Bengaluru through financial support for the maintenance of the lake, apart from engaging volunteers in increasing community involvement in environmental conservation. TCS teams from several project accounts visited the lake and participated in various maintenance activities for the garden surrounding the lake. Volunteers helped rebuild the senior citizen's park, pruned hedge plants across the garden, built a nursery, manured the plants and have helped with the construction of an underground water drainage system. Over 800 TCS associates participated in these activities. Post restoration, Chinnapanahalli Lake is now an abode of bird species like the Painted Stork, Spot Billed Duck, Egrets, Bee Eater and the Cormorant. # iii. Other Environment Initiatives The biodiversity mapping of TCS sites has been carried out and various conservation & enhancement programmes are being implemented to protect & enhance biodiversity. Currently, there are 305 types of flora being nurtured with TCS' various campuses. # f. Global Initiatives The Company's focus on skill development has been enhanced with larger reach and a significant impact in FY 2015-16. In North America, through the Company's interventions more than 20,000 have been impacted. goIT is TCS' signature community engagement programme in North America, through which our employees teach computer programming and mentor youth to increase STEM education and career awareness, reached 997 students of which 426 were girls. This year, TCS actively participated in the Hour of Code, a coding competition conducted during the computer science education week that saw participation from more than 1300 students of which 400 were women. Tata Consultancy Services was a proud co-founding sponsor - alongside Chevron - of the inaugural US2020 STEM Mentoring Awards on July 23 at the White House, recognising worthy winners for their exceptional work in science, technology, engineering, and math (STEM) mentoring. The awards ceremony was part of the first ever STEM Mentoring Symposium, bringing together leaders from the Obama administration, public, private, and social sectors to share best practices, discuss common challenges and reaffirm mentoring as a powerful tool for education reform and nation building. In UK, the Company reached more than 34,000 people through its interventions. IT Futures, our flagship programme, encourages students to develop an interest in IT and strengthens the ability of educators to deliver effective training and relevant skills. This year, TCS participated in the Big Bang Fair, a STEM fair organised to enhance children's interest in IT. In the event, TCS volunteers created fun technical challenges for the student participants. TCS Tech Challenge is another novel programme where university teams produce detailed, real world solutions in support of partner charities. IT for Good is this summer challenging 14-18 year olds to come up with an IT system to help people overcome a real problem, whether in the developing world or closer to home, for the chance to win a week's MISSION YOU training placement with TCS in London, Edinburgh, Peterborough or Liverpool. With its Apps for Good partnership, TCS has teamed up with the organisation to challenge young people aged 11-14 to develop problem solving skills and become tech entrepreneurs who create apps to solve problems. Stepney Green Maths and Computing College is TCS' flagship school in the company's wide-ranging IT Futures programme, which aims to inspire young people with the creative potential of technology, at various stages in their education. 142 Business Responsibility Report # TCS' IT Futures programme engages students across UK In Asia Pacific, Australia and New Zealand, programs impacted over 14000 people. In Australia, six not-for-profit organisations were selected to receive expert IT and technology support free of charge, as part of a new community programme. HeartKids Australia, Cystic Fibrosis New South Wales, Hunter Medical Research Institute, The Royal Hospital for Women Foundation, The Australian Indigenous Leadership Centre and The Penguin Foundation will be the first beneficiaries of the TCS Australia and New Zealand Pro Bono Community Programme. Go4IT Work Experience Programme which encourages an interest in IT among women, saw participation from 120 women from 47 different schools in Sydney and Melbourne. TCS associates supported Operation Smile in China by maintaining accurate medical records for all the patients and provided support in the pre-op and post-op activities. 157 patients benefitted from this programme. TCS associated also developed SenCi, a Senior Citizen Mobile Application which provides reminders for medicines and doctor's appointments. |
# IT training centre at South Africa In Middle East and Africa, our programmes have impacted over 2000 people. TCS South Africa has initiated several programmes to bring about IT awareness in schools and in underdeveloped rural areas of South Africa. In South Africa, TCS has trained more than 500 under-privileged children in IT in a year. Through its graduate training programme, the company has trained and recruited 33 youth in South Africa. In LATAM, the programmes reached over 3000 people. ENABLE a programme focusing on Social & Economic empowerment of differently abled impacted 375 people. The Company also signed a partnership with the TCS Brazil collaborates with Centro Paula Souza, the largest technical education institution in Latin America which has 282 education units and 285,000 students. Every month, TCS' associates will conduct technical lectures for 150 students at these institutes. The programme is expected to train more than 1,000 students. # Associate Volunteering The Company cultivates and propagates volunteer-driven, meaningful activities for TCS associates & their families in the domain of associate engagement and community services. TCS Purpose4Life is aimed at providing a platform for scaling up efforts of socially conscious associates in the areas of health, education, and environment. Through Purpose4Life, every associate is encouraged to pledge their social contribution in terms of volunteering hours. Associates can form teams and immediate family members can be included as well. TCS Purpose4Life has contributed 612,908 hours garnering TCS' large employee base to support a variety of community development programmes. # Questions 1. Are the programmes / projects undertaken through in-house team? 2. Yes, through in-house team and implementing agencies. Have you done any impact assessment of your initiative? 3. Currently, the Company monitors the reach and outcome of its CSR initiatives through monthly reports and assessments conducted by CSR regional and geographical leads. What is your company's direct contribution to community development projects- Amount in INR and the details of the projects undertaken? Business Responsibility Report 143 # Annual Report 2015-16 # 5. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? If yes, please explain in 50 words, or so. Yes. Initiatives conducted under CSR are tracked to determine the outcomes achieved and the benefits to the community. Internal tracking mechanisms, monthly reports and follow-up field visits, telephonic and email communications are regularly carried out. The Company has engaged highly trained employees to drive and monitor the CSR activities. # Principle 9 # Businesses should engage with and provide value to their customers and consumers in a responsible manner # 1. What percentage of customer complaints/consumer cases are pending as on the end of financial year. 11.7% of the complaints received were open as on end of the financial year. These are in the process of being resolved. # 2. Does the company display product information on the product label, over and above what is mandated as per local laws? TCS is a software solution provider hence this question is not applicable to us. i. Remarks (additional information) - None # 3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words or so. As on date, there are no anti-competitive, abuse of dominant position or unfair trade practices cases pending against the Company. # 4. Did your company carry out any consumer survey/ consumer satisfaction trends? Customer satisfaction surveys are carried out on a half yearly basis. The survey is done at an account-level and measures TCS' performance on various parameters across multiple dimensions. # 144 Business Responsibility Report # Consolidated Financial Statements 145 # Annual Report 2015-16 # INDEPENDENT AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS # TO THE MEMBERS OF TATA CONSULTANCY SERVICES LIMITED # Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Tata Consultancy Services Limited ('the Company') and its subsidiary companies (the Company and its subsidiary companies together referred as 'the Group'), which comprise the Consolidated Balance Sheet as at March 31, 2016, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information ('the consolidated financial statements'). |
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