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# Financial assets and liabilities measured at fair value | |Level 1|Level 2|Level 3|Total| |---|---|---|---|---| |As at March 31, 2021| | | | | |Financial assets| | | | | |Mutual fund units|4,849|-|55|4,904| |Equity shares|-|-|38|38| |Government bonds and securities|23,856|-|-|23,856| |Corporate bonds|460|-|-|460| |Commercial papers|136|-|-|136| |Fair value of foreign exchange derivative assets|-|495|-|495| | | | | | | |As at March 31, 2022| | | | | |Financial assets| | | | | |Mutual fund units|1,874|-|-|1,874| |Equity shares|-|-|36|36| |Government bonds and securities|25,859|-|-|25,859| |Certificate of deposits|99|-|-|99| # Notes forming part of Consolidated Financial Statements # Reconciliation of Level 3 fair value measurement of financial assets is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|93|42| |Additions during the year|-|52| |Fair value of investments|-|4| |Impairment in value of investments|(4)|(2)| |Other adjustments during the year|(55)|-| |Translation exchange difference|2|(3)| |Balance at the end of the year|36|93| # (k) Derivative financial instruments and hedging activity The Group's revenue is denominated in various foreign currencies. Given the nature of the business, a large portion of the costs are denominated in Indian Rupee. This exposes the Group to currency fluctuations. The Board of Directors has constituted a Risk Management Committee (RMC) to frame, implement and monitor the risk management plan of the Group which inter-alia covers risks arising out of exposure to foreign currency fluctuations. Under the guidance and framework provided by the RMC, the Group uses various derivative instruments such as foreign exchange forward, currency options and futures contracts in which the counter party is generally a bank. # The following are outstanding currency options contracts, which have been designated as cash flow hedges: |Foreign currency|No. of contracts|Notional amount of contracts (In million)|Fair value (` crore)|No. of contracts|Notional amount of contracts (In million)|Fair value (` crore)| |---|---|---|---|---|---|---| |US Dollar|63|1,635|44|63|1,615|51| |Great Britain Pound|41|338|55|64|330|14| |Euro|53|382|25|60|346|78| |Australian Dollar|30|202|(21)|38|206|16| |Canadian Dollar|25|137|(1)|23|114|2| # The movement in cash flow hedging reserve for derivatives designated as cash flow hedges is as follows: | |Year ended March 31, 2022| |Year ended March 31, 2021| | | | |---|---|---|---|---|---|---| | | |Intrinsic value|Time value|Intrinsic value|Time value| | |Balance at the beginning of the year| |56|(27)|45|(68)| | |(Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions| |(636)|525|(341)|530| | |Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions| |139|(122)|73|(125)| | |Change in the fair value of effective portion of cash flow hedges| |599|(559)|355|(477)| | |Deferred tax on change in the fair value of effective portion of cash flow hedges| |(131)|130|(76)|113| | |Balance at the end of the year| |27|(53)|56|(27)| | # Notes forming part of Consolidated Financial Statements The Group has entered into derivative instruments not in hedging relationship by way of foreign exchange forward, currency options and futures contracts. As at March 31, 2022 and 2021, the notional amount of outstanding contracts aggregated to `46,392 crore and `37,615 crore, respectively, and the respective fair value of these contracts have a net gain of `158 crore and `242 crore. Exchange gain of `645 crore and `490 crore on foreign exchange forward, currency options and futures contracts that do not qualify for hedge accounting have been recognised in the consolidated statement of profit and loss for the years ended March 31, 2022 and 2021, respectively. Net foreign exchange gain include gain of `111 crore and loss of `189 crore transferred from cash flow hedging reserve for the years ended March 31, 2022 and 2021, respectively. Net loss on derivative instruments of `26 crore recognised in cash flow hedging reserve as at March 31, 2022, is expected to be transferred to the statement of profit and loss by March 31, 2023. The maximum period over which the exposure to cash flow variability has been hedged is through calendar year 2022. # Following table summarises approximate gain / (loss) on Group's other comprehensive income on account of appreciation / depreciation of the underlying foreign currencies: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |10% Appreciation of the underlying foreign currencies|(387)|(306)| |10% Depreciation of the underlying foreign currencies|2,034|1,906| # Integrated Annual Report 2021-22 # (l) Financial risk management The Group is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity and interest rate risks, which may adversely impact the fair value of its financial instruments. The Group has a risk management policy which covers risks associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. |
The focus of the risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Group. # Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Group's exposure to market risk is primarily on account of foreign currency exchange rate risk. # * Foreign currency exchange rate risk The fluctuation in foreign currency exchange rates may have potential impact on the consolidated statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Group operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The Group, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. Further, any movement in the functional currencies of the various operations of the Group against # Notes forming part of Consolidated Financial Statements Major foreign currencies may impact the Group's revenue in international business. The Group evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies. The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the respective functional currencies of Tata Consultancy Services Limited and its subsidiaries. The following analysis has been worked out based on the net exposures for each of the subsidiaries and Tata Consultancy Services Limited as of the date of balance sheet which could affect the statement of profit and loss and other comprehensive income and equity. Further the exposure as indicated below is mitigated by some of the derivative contracts entered into by the Group as disclosed in note 8(k). # Unhedged Foreign Currency Exposure as at March 31, 2022 | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|2,900|165|84|1,234| |Net financial liabilities|(8,589)|(437)|(1,290)|(421)| 10% appreciation / depreciation of the respective functional currency of Tata Consultancy Services Limited and its subsidiaries with respect to various foreign currencies would result in increase / decrease in the Group's profit before taxes by approximately `635 crore for the year ended March 31, 2022. # Unhedged Foreign Currency Exposure as at March 31, 2021 | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|3,194|155|101|1,129| |Net financial liabilities|(41)|(573)|(354)|(411)| 10% appreciation / depreciation of the respective functional currency of Tata Consultancy Services Limited and its subsidiaries with respect to various foreign currencies would result in increase / decrease in the Group's profit before taxes by approximately `320 crore for the year ended March 31, 2021. File: AR_TCS_2021_2022.md # Interest Rate Risk The Group's investments are primarily in fixed rate interest bearing investments. Hence, the Group is not significantly exposed to interest rate risk. # Credit Risk Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. Inter-corporate deposits of `6,377 crore are with a financial institution having a high credit-rating assigned by credit-rating agencies. # Notes forming part of Consolidated Financial Statements include an amount of `6,727 crore held with four Indian banks having high credit rating which are individually in excess of 10% or more of the Group's total bank deposits as at March 31, 2022. None of the other financial instruments of the Group result in material concentration of credit risk. # Exposure to credit risk The carrying amount of financial assets and contract assets represents the maximum credit exposure. |
The maximum exposure to credit risk was `1,05,498 crore and `94,201 crore as at March 31, 2022 and 2021, respectively, being the total of the carrying amount of balances with banks, bank deposits, investments, trade receivables, loan, contract assets and other financial assets. The Group's exposure to customers is diversified and no single customer contributes to more than 10% of outstanding trade receivables and contract assets as at March 31, 2022 and 2021. # Geographic concentration of credit risk Geographic concentration of trade receivables (gross and net of allowances) and contract assets is as follows: | |As at March 31, 2022| |As at March 31, 2021| | |---|---|---|---|---| |Geography|Gross%|Net%|Gross%|Net%| |United States of America|43.79|44.69|41.08|41.83| |India|15.51|13.83|20.31|18.79| |United Kingdom|16.47|16.86|16.37|16.75| Geographical concentration of trade receivables and contract assets is allocated based on the location of the customers. The allowance for lifetime expected credit loss on trade receivables for the years ended March 31, 2022 and 2021, was `123 crore and `190 crore respectively. The reconciliation of allowance for doubtful trade receivables is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|1,289|1,137| |Change during the year|123|190| |Bad debts written off|(83)|(34)| |Translation exchange difference|4|(4)| |Balance at the end of the year|1,333|1,289| # Liquidity risk Liquidity risk refers to the risk that the Group cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Group consistently generated sufficient cash flows from operations to meet its financial obligations including lease liabilities as and when they fall due. The tables below provide details regarding the contractual maturities of significant financial liabilities as at: | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| | |---|---|---|---|---|---|---| |Non-derivative financial liabilities|Trade payables|8,045|-|-|-|8,045| | |Lease liabilities|1,850|1,618|3,201|3,150|9,819| | |Other financial liabilities|7,582|343|231|5|8,161| | | |17,477|1,961|3,432|3,155|26,025| |Derivative financial liabilities|128|-|-|-|128| | | | |17,605|1,961|3,432|3,155|26,153| # Notes forming part of Consolidated Financial Statements |(` crore)|Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|7,860|-|-|-|7,860| |Trade payables|1,742|1,601|3,325|3,509|10,177| |Other financial liabilities|6,058|50|230|-|6,338| |Total|Total|Total|Total|Total|24,375| |Derivative financial liabilities|92|-|-|-|92| |Total|Total|Total|Total|Total|24,467| The Company's objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. The Company is not subject to any externally imposed capital requirements. The Board of Directors at its meeting held on January 12, 2022, approved a proposal to buy-back upto 4,00,00,000 equity shares of the Company for an aggregate amount not exceeding `18,000 crore, being 1.08% of the total paid up equity share capital at `4,500 per equity share. The shareholders approved the same on February 12, 2022, by way of a special resolution through postal ballot. A Letter of Offer was made to all eligible shareholders. The Company bought back 4,00,00,000 equity shares out of the shares that were tendered by eligible shareholders and extinguished the equity shares on March 29, 2022. Capital redemption reserve was created to the extent of share capital extinguished (`4 crore). The excess cost of buy-back of `18,049 crore (including `49 crore towards transaction cost of buy-back) over par value of shares and corresponding tax on buy-back of `4,192 crore were offset from retained earnings. # I. Reconciliation of number of shares | | | | |As at March 31, 2022| |As at March 31, 2021| | |---|---|---|---|---|---|---|---| |Number of shares| | | | |Amount|Number of shares|Amount| |Equity shares| | | |369,90,51,373|370|375,23,84,706|375| | | | |Opening balance|369,90,51,373|370|375,23,84,706|375| |Shares extinguished on buy-back| | | |(4,00,00,000)|(4)|(5,33,33,333)|(5)| | | | |Closing balance|365,90,51,373|366|369,90,51,373|370| # Notes forming part of Consolidated Financial Statements # II. Rights, preferences and restrictions attached to 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 and carry a right to dividend. 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. # III. |
Shares held by Holding company, its Subsidiaries and Associates | |As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Equity shares| | | | |Holding company|264,43,17,117 equity shares (March 31, 2021: 266,91,25,829 equity shares) are held by Tata Sons Private Limited|264|267| |Subsidiaries and Associates of Holding company|7,220 equity shares (March 31, 2021: 7,220 equity shares) are held by Tata Industries Limited*|-|-| | |10,14,172 equity shares (March 31, 2021: 10,23,685 equity shares) are held by Tata Investment Corporation Limited*|-|-| | |46,798 equity shares (March 31, 2021: 46,798 equity shares) are held by Tata Steel Limited*|-|-| | |766 equity shares (March 31, 2021: 766 equity shares) are held by The Tata Power Company Limited*|-|-| | | |264|267| *Equity shares having value less than `0.50 crore. # IV. Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company | |As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Equity shares|Tata Sons Private Limited, the holding company|264,43,17,117|266,91,25,829| | |% of shareholding|72.27%|72.16%| # V. Equity shares movement during 5 years preceding March 31, 2022 * Equity shares issued as bonus The Company allotted 191,42,87,591 equity shares as fully paid up bonus shares by capitalisation of profits transferred from retained earnings amounting to `86 crore and capital redemption reserve amounting to `106 crore in the quarter ended June 30, 2018, pursuant to an ordinary resolution passed after taking the consent of shareholders through postal ballot. * Equity shares extinguished on buy-back The Company bought back 4,00,00,000 equity shares for an aggregate amount of `18,000 crore being 1.08% of the total paid up equity share capital at `4,500 per equity share. The equity shares bought back were extinguished on March 29, 2022. The Company bought back 5,33,33,333 equity shares for an aggregate amount of `16,000 crore being 1.42% of the total paid up equity share capital at `3,000 per equity share. The equity shares bought back were extinguished on January 6, 2021. Consolidated Financial Statements | 273 # Notes forming part of Consolidated Financial Statements The Company bought back 7,61,90,476 equity shares for an aggregate amount of `16,000 crore being 1.99% of the total paid up equity share capital at `2,100 per equity share. The equity shares bought back were extinguished on September 26, 2018. The Company bought back 5,61,40,350 equity shares for an aggregate amount of `16,000 crore being 2.85% of the total paid up equity share capital at `2,850 per equity share. The equity shares bought back were extinguished on June 7, 2017. # VI. Disclosure of Shareholding of Promoters Disclosure of shareholding of promoters as at March 31, 2022 is as follows: |Promoter name| |Shares held by promoters| |%| | | |---|---|---|---|---|---|---| | |As at| |As at| |Change| | | |March 31, 2022|No. of shares|% of total shares|No. of shares|% of total shares|year| |Tata Sons Private Limited|264,43,17,117|72.27%|266,91,25,829|72.16%|0.11%| | |Total|264,43,17,117|72.27%|266,91,25,829|72.16%|0.11%| | Disclosure of shareholding of promoters as at March 31, 2021 is as follows: |Promoter name| |Shares held by promoters| | |%| | |---|---|---|---|---|---|---| | |As at| |As at| |Change| | | |March 31, 2021|No. of shares|% of total shares|No. of shares|% of total shares|year| |Tata Sons Private Limited|266,91,25,829|72.16%|270,24,50,947|72.02%|0.14%| | |Total|266,91,25,829|72.16%|270,24,50,947|72.02%|0.14%| | # Integrated Annual Report 2021-22 # 9) Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Group as a lessee The Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Group recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use asset is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. |
The right-of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. The Group measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. # Notes forming part of Consolidated Financial Statements Payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses incremental borrowing rate. For leases with reasonably similar characteristics, the Group, on a lease-by-lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Group is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Group recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Group recognises any remaining amount of the re-measurement in statement of profit and loss. The Group has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term. # Group as a lessor At the inception of the lease the Group classifies each of its leases as either an operating lease or a finance lease. The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor's net investment in the lease. When the Group is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease. If an arrangement contains lease and non-lease components, the Group applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract. # The details of the right-of-use assets held by the Group is as follows: | |Additions for the year ended March 31, 2022|Net carrying amount as at March 31, 2022| |---|---|---| |Leasehold land|100|774| |Buildings|1,357|6,586| |Leasehold improvement|-|23| |Computer equipment|4|81| |Software licences|145|133| |Vehicles|16|32| |Office equipment|2|7| |Total|1,624|7,636| # Notes forming part of Consolidated Financial Statements | |Additions for the year ended|Net carrying amount as at| |---|---|---| |March 31, 2021|(` crore)|(` crore)| |Leasehold land|-|682| |Buildings|1,226|6,758| |Leasehold improvement|6|26| |Computer equipment|102|101| |Software licences|26|25| |Vehicles|30|32| |Office equipment|1|9| |Total|1,391|7,633| The Group incurred `277 crore and `352 crore for the years ended March 31, 2022 and 2021, respectively, towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is `2,228 crore and `2,312 crore for the years ended March 31, 2022 and 2021, respectively, including cash outflow for short term and low value leases. The Group has lease term extension options that are not reflected in the measurement of lease liabilities. |
The present value of future cash outflows for such extension periods is `773 crore and `708 crore as at March 31, 2022 and 2021, respectively. Lease contracts entered by the Group majorly pertains for buildings taken on lease to conduct its business in the ordinary course. The Group does not have any lease restrictions and commitment towards variable rent as per the contract. # Depreciation on right-of-use assets is as follows: | |Year ended|Year ended| |---|---|---| |March 31, 2022|(` crore)|March 31, 2021| |Leasehold land|9|8| |Buildings|1,465|1,453| |Leasehold improvement|6|8| |Computer equipment|23|12| |Software licences|38|1| |Vehicles|16|14| |Office equipment|3|4| |Total|1,560|1,500| # 10) Non-financial assets and non-financial liabilities # (a) Property, plant and equipment Property, plant and equipment are stated at cost comprising of purchase price and any initial directly attributable cost of bringing the asset to its working condition for its intended use, less accumulated depreciation (other than freehold land) and impairment loss, if any. Depreciation is provided for property, plant and equipment on a straight-line basis so as to expense the cost less residual value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis. Interest on lease liabilities is `519 crore and `523 crore for the years ended March 31, 2022 and 2021, respectively. # Notes forming part of Consolidated Financial Statements # The estimated useful lives are as mentioned below: |Type of asset|Useful lives| |---|---| |Buildings|20 years| |Leasehold improvements|Lease term| |Plant and equipment|10 years| |Computer equipment|4 years| |Vehicles|4 years| |Office equipment|2-5 years| |Electrical installations|4-10 years| |Furniture and fixtures|5 years| Property, plant and equipment with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use. Integrated Annual Report 2021-22 Consolidated Financial Statements | 277 # Notes forming part of Consolidated Financial Statements # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and equipment|Computer equipment|Vehicles|Office installations|Electrical equipment|Furniture and fixtures|Total| |---|---|---|---|---|---|---|---|---|---|---| |Cost as at April 1, 2021|351|7,777|2,502|737|10,734|40|2,574|2,058|1,885|28,658| |Additions|-|51|108|35|1,868|(1)|187|41|55|2,345| |Disposals|(1)|(2)|(53)|(1)|(515)| |(75)|(44)|(42)|(733)| |Translation exchange difference| |3|12|(1)|12,087|39|2,686|7|8|30| |Cost as at March 31, 2022|352|7,829|2,569|770| | |2,062|1,906| |30,300| |Accumulated depreciation as at April 1, 2021|-|(2,947)|(1,575)|(302)|(7,531)|(33)|(2,199)|(1,393)|(1,568)|(17,548)| |Depreciation|-|(396)|(205)|(76)|(1,547)|(3)|(191)|(149)|(122)|(2,689)| |Disposals|-|2|52|-|510|1|75|43|42|725| |Translation exchange difference| |(2)|(8)|1|5|(35)|(2,315)|(4)|(6)|(14)| |Accumulated depreciation as at March 31, 2022| |(3,343)|(1,736)|(377)|(8,563)| | |(1,503)|(1,654)|(19,526)| |Net carrying amount as at March 31, 2022|352|4,486|833|393|3,524|4|371|559|252|10,774| |Capital work-in-progress*| | | | | | | | | |1,205| |Total| | | | | | | | | |11,979| *`2,345 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2022. # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and equipment|Computer equipment|Vehicles|Office installations|Electrical equipment|Furniture and fixtures|Total| |---|---|---|---|---|---|---|---|---|---|---| |Cost as at April 1, 2020|347|7,719|2,427|681|8,794|42|2,509|2,039|1,886|26,444| |Additions|5|71|142|53|2,047|3|137|46|61|2,565| |Disposals|(1)|(11)|(72)|(1)|(180)|(5)|(80)|(29)|(63)|(441)| |Translation exchange difference| |(2)|5|4|73| |8|2|1|90| |Cost as at March 31, 2021|351|7,777|2,502|737|10,734|40|2,574|2,058|1,885|28,658| |Accumulated depreciation as at April 1, 2020|-|(2,563)|(1,441)|(228)|(6,414)|(34)|(2,068)|(1,266)|(1,489)|(15,503)| |Depreciation|-|(393)|(199)|(72)|(1,246)|(4)|(204)|(152)|(137)|(2,407)| |Disposals|-|8|68|1|168|5|79|26|62|417| |Translation exchange difference| |1|(3)|(3)|(39)| |(6)|(1)|(4)|(55)| |Accumulated depreciation as at March 31, 2021| |(2,947)|(1,575)|(302)|(7,531)|(33)|(2,199)|(1,393)|(1,568)|(17,548)| |Net carrying amount as at March 31, 2021|351|4,830|927|435|3,203|7|375|665|317|11,110| |Capital work-in-progress*| | | | | | | | | |926| |Total| | | | | | | | | |12,036| *`2,565 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2021. |
Integrated Annual Report 2021-22 Consolidated Financial Statements | 278 # Notes forming part of Consolidated Financial Statements # Capital work-in-progress * Capital work-in-progress ageing Ageing for capital work-in-progress as at March 31, 2022 is as follows: |Capital work-in-progress| | |Amount in Capital work-in-progress for a period of|Total| |---|---|---|---|---| |Less than 1 year|691| | |1,205| |1 - 2 years| |102| | | |2 - 3 years| | |39| | |More than 3 years| | | |373| Ageing for capital work-in-progress as at March 31, 2021 is as follows: |Capital work-in-progress| | |Amount in capital work-in-progress for a period of|Total| |---|---|---|---|---| |Less than 1 year|486| | |926| |1 - 2 years| |62| | | |2 - 3 years| | |41| | |More than 3 years| | | |337| * Project execution plans are modulated basis capacity requirement assessment on an annual basis and all the projects are executed as per rolling annual plan. # (b) Goodwill Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount. CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is indication for impairment. The financial projections basis which the future cash flows have been estimated consider the increase in economic uncertainties due to COVID-19, reassessment of the discount rates, revisiting the growth rates factored while arriving at terminal value and subjecting these variables to sensitivity analysis. If the recoverable amount of a CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Goodwill consists of the following: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Balance at the beginning of the year|1,798|1,710| |Translation exchange difference|(11)|88| |Balance at the end of the year|1,787|1,798| Goodwill of `646 crore and `660 crore as at March 31, 2022 and 2021, respectively, has been allocated to the TCS business in France. The estimated value-in-use of this CGU is based on the future cash flows using a 1.50% annual growth rate for periods subsequent to the forecast period of 5 years and discount rate of 9.30%. An analysis of the sensitivity of the computation to a change in key parameters (operating margin, discount rates and long term average growth rate), based on reasonable assumptions, did not identify any probable scenario in which the recoverable amount of the CGU would decrease below its carrying amount. # Notes forming part of Consolidated Financial Statements The remaining amount of goodwill of ₹1,141 crore and ₹1,138 crore as at March 31, 2022 and 2021, respectively, (relating to different CGUs individually immaterial) has been evaluated based on the cash flow forecasts of the related CGUs and the recoverable amounts of these CGUs exceeded their carrying amounts. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss. # (c) Other intangible assets Intangible assets purchased including acquired in business combination, are measured at cost as at the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any. Intangible assets consist of rights under licensing agreement and software licences and customer-related intangibles. |Type of asset|Useful lives| |---|---| |Rights under licensing agreement and software licences|Lower of licence period and 2-5 years| |Customer-related intangibles|3 years| Intangible assets are amortised on a straight-line basis over the period of its economic useful life. Intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. |
# Intangible assets | |Rights under licensing agreement and software licences|Customer-related intangibles|Total| |---|---|---|---| |Cost as at April 1, 2021|740|122|862| |Additions|1,002|-|1,002| |Disposals / Derecognised|(42)|-|(42)| |Translation exchange difference|(3)|(1)|(4)| |Cost as at March 31, 2022|1,697|121|1,818| |Accumulated amortisation as at April 1, 2021|(265)|(117)|(382)| |Amortisation|(349)|(6)|(355)| |Disposals / Derecognised|16|-|16| |Translation exchange difference|2|2|4| |Accumulated amortisation as at March 31, 2022|(596)|(121)|(717)| |Net carrying amount as at March 31, 2022|1,101|-|1,101| Integrated Annual Report 2021-22 Consolidated Financial Statements | 280 # Notes forming part of Consolidated Financial Statements |Other assets|Rights under licensing agreement and software licences|Customer-related intangibles|Total| |---|---|---|---| |Cost as at April 1, 2020|448|120|568| |Additions|356|-|356| |Disposals / Derecognised|(64)|-|(64)| |Translation exchange difference|-|2|2| |Cost as at March 31, 2021|740|122|862| |Accumulated amortisation as at April 1, 2020|(180)|(105)|(285)| |Disposals / Derecognised|(149)|(9)|(158)| |Amortisation|64|-|64| |Translation exchange difference|-|(3)|(3)| |Accumulated amortisation as at March 31, 2021|(265)|(117)|(382)| File: AR_TCS_2021_2022.md |Net carrying amount as at March 31, 2021|475|5|480| The estimated amortisation for the years subsequent to March 31, 2022 is as follows: |Year ending March 31|Amortisation expense| |---|---| |2023|463| |2024|403| |2025|214| |2026|22| Total: 1,101 # Other assets - Non-current |As at March 31, 2022|As at March 31, 2021| | | | | | | |---|---|---|---|---|---|---|---| | | | | | |Capital advances|78|66| | | | | | |Advances to related parties|23|33| | | | | | |Contract assets|171|250| | | | | | |Prepaid expenses|1,291|621| | | | | | |Contract fulfillment costs|150|228| | | | | |Others| |310|415| |Total| | | | | |2,023|1,613| Advances to related parties, considered good, comprise: |Entity|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Voltas Limited|-*|2| |Tata Realty and Infrastructure Ltd|-*|-*| |Tata Projects Limited|23|30| |Titan Engineering and Automation Limited|-*|-*| *Represents value less than `0.50 crore. # Notes forming part of Consolidated Financial Statements # Other assets - Current Non-current - Others includes advance of `271 crore and `369 crore towards acquiring right-of-use of leasehold land as at March 31, 2022 and 2021, respectively. |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Considered good| | | |Advance to suppliers|202|157| |Advance to related parties|8|10| |Contract assets|4,248|3,830| |Prepaid expenses|2,994|4,651| |Prepaid rent|18|28| |Contract fulfillment costs|1,074|796| |Indirect taxes recoverable|1,310|1,491| |Others|297|273| Considered doubtful |Advance to suppliers|2|3| |---|---|---| |Other advances|4|1| |Less: Allowance on doubtful assets|(6)|(4)| Total: 10,151 11,236 # Advance to related parties, considered good comprise: |The Titan Company Limited|-|2| |---|---|---| |Tata AIG General Insurance Company Limited|1|1| |Tata Sons Private Limited|7|7| # Inventories Inventories consists of a) Raw materials, sub-assemblies and components, b) Work-in-progress, c) Stores and spare parts and d) Finished goods. Inventories are carried at lower of cost and net realisable value. The cost of raw materials, sub-assemblies and components is determined on a weighted average basis. Cost of finished goods produced or purchased by the Group includes direct material and labour cost and a proportion of manufacturing overheads. # Inventories consist of the following: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Raw materials, sub-assemblies and components|17|8| |Finished goods and work-in-progress|3|-*| | |20|8| *Represents value less than `0.50 crore. Integrated Annual Report 2021-22 Consolidated Financial Statements | 282 # Notes forming part of Consolidated Financial Statements # (f) Other liabilities Other liabilities consist of the following: |Other liabilities - Current| | | | | |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---|---|---|---| |Advance received from customers|468|312| | | | | | | |Indirect taxes payable and other statutory liabilities|3,632|3,726| | | | | | | |Tax liability on buy-back of equity shares*|4,192|-| | | | | | | |Others|100|30| | | | | | | |Total|8,392|4,068| | | | | | | *Refer note 8(m). |
# (11) Other equity Other equity consist of the following: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Capital reserve|75|75| |Capital redemption reserve| | | |Opening balance|436|431| |Transfer from retained earnings|4|5| |Total|440|436| |General reserve| | | |Opening balance|27|27| |Transfer to retained earnings|(27)|-| |Total|-|27| |Special Economic Zone re-investment reserve| | | |Opening balance|2,538|1,594| |Transfer from retained earnings|9,407|5,058| |Transfer to retained earnings|(4,658)|(4,114)| |Total|7,287|2,538| |Retained earnings| | | |Opening balance|79,586|78,810| |Profit for the year|38,327|32,430| # Notes forming part of Consolidated Financial Statements | |(` crore)|(` crore)| |---|---|---| | |As at March 31, 2022|As at March 31, 2021| |Remeasurement of defined employee benefit plans|280|(71)| |Expenses for buy-back of equity shares1|(49)|(31)| |Tax on buy-back of equity shares1|(4,192)|(3,726)| |Buy-back of equity shares1|(17,996)|(15,995)| |Transfer from Special Economic Zone re-investment reserve|4,658|4,114| |Transfer from general reserve|27|-| | |1,00,641|95,531| |Less: Appropriations| | | |Dividend on equity shares|13,317|10,850| |Transfer to capital redemption reserve1|4|5| |Transfer to Special Economic Zone re-investment reserve|9,407|5,058| |Transfer to / (from) statutory reserve|(245)|32| | |78,158|79,586| |Statutory reserve| | | |Opening balance|407|375| |Transfer (to) / from retained earnings|(245)|32| | |162|407| # Revenue recognition The Group earns revenue primarily from providing IT services, consulting and business solutions. The Group offers a consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Integrated Annual Report 2021-22 Consolidated Financial Statements | 284 # Notes forming part of Consolidated Financial Statements Group expects to receive in exchange for those products or services. - Revenue from time and material and job contracts is recognised on output basis measured by units delivered, efforts expended, number of transactions processed, etc. - Revenue related to fixed price maintenance and support services contracts where the Group is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance. - In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method ('POC method') of accounting with contract costs incurred determining the degree of completion of the performance obligation. The contract costs used in computing the revenues include cost of fulfilling warranty obligations. - Revenue from the sale of distinct internally developed software and manufactured systems and third party software is recognised upfront at the point in time when the system / software is delivered to the customer. In cases where implementation and / or customisation services rendered significantly modifies or customises the software, these services and software are accounted for as a single performance obligation and revenue is recognised over time on a POC method. - Revenue from the sale of distinct third party hardware is recognised at the point in time when control is transferred to the customer. - The solutions offered by the Group may include supply of third-party equipment or software. In such cases, revenue for supply of such third party products are recorded at gross or net basis depending on whether the Group is acting as the principal or as an agent of the customer. The Group recognises revenue in the gross amount of consideration when it is acting as a principal and at net amount of consideration when it is acting as an agent. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. The Group's contracts with customers could include promises to transfer multiple products and services to a customer. The Group assesses the products / services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables. Judgement is also required to determine the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer. |
The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Group allocates the elements of variable considerations to all the performance obligations of the contract. Consolidated Financial Statements | 285 # Notes forming part of Consolidated Financial Statements unless there is observable evidence that they pertain to one or more distinct performance obligations. The Group exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Group considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc. Contract fulfilment costs are generally expensed as incurred except for certain software licence costs which meet the criteria for capitalisation. Such costs are amortised over the contractual period or useful life of licence, whichever is less. The assessment of this criteria requires the application of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered. Contract assets are recognised when there are excess of revenues earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms. In accordance with Ind AS 37, the Group recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received. Contracts are subject to modification to account for changes in contract specification and requirements. The Group reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for. The Group disaggregates revenue from contracts with customers by nature of services, industry verticals and geography. # Revenue disaggregation by nature of services is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Consultancy services|1,90,289|1,62,508| |Sale of equipment and software licences|1,465|1,669| |Total|1,91,754|1,64,177| Unearned and deferred revenue ("contract liability") is recognised when there are billings in excess of revenues. The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period. Revenue disaggregation by industry vertical and geography has been included in segment information (Refer note 19). While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Group has applied the practical expedient in Ind AS 115. Integrated Annual Report 2021-22 Consolidated Financial Statements | 286 # Notes forming part of Consolidated Financial Statements Accordingly, the Group has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts. Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws etc). The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is `1,13,868 crore out of which 56.54% is expected to be recognised as revenue in the next year and the balance thereafter. No consideration from contracts with customers is excluded from the amount mentioned above. |
# Changes in contract assets are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|4,080|4,489| |Invoices raised that were included in the contract assets balance at the beginning of the year|(3,150)|(3,496)| |Increase due to revenue recognised during the year, excluding amounts billed during the year|3,457|2,985| |Translation exchange difference|32|102| |Balance at the end of the year|4,419|4,080| # Changes in unearned and deferred revenue are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|4,847|3,612| |Revenue recognised that was included in the unearned and deferred revenue balance at the beginning of the year|(3,251)|(3,010)| |Increase due to invoicing during the year, excluding amounts recognised as revenue during the year|3,094|4,182| |Translation exchange difference|55|63| |Balance at the end of the year|4,745|4,847| # Reconciliation of revenue recognised with the contracted price is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Contracted price|1,94,777|1,66,917| |Reductions towards variable consideration components|(3,023)|(2,740)| |Revenue recognised|1,91,754|1,64,177| The reduction towards variable consideration comprises of volume discounts, service level credits, etc. Integrated Annual Report 2021-22 Consolidated Financial Statements | 287 # Notes forming part of Consolidated Financial Statements # 13) Other income Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method. Other income consist of the following: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Interest income|2,663|2,504| |Dividend income|4|8| |Net gain on disposal / fair valuation of investments carried at fair value through profit or loss|198|204| |Net gain on disposal of property, plant and equipment|23|13| |Net gain on lease modification|7|100| |Net loss on sub-lease|(9)|-| |Net foreign exchange gain|1,045|248| |Rent income|-|1| |Other income|87|56| |Total|4,018|3,134| Interest income comprise: |Interest on bank balances and bank deposits|295|137| |---|---|---| |Interest on financial assets carried at amortised cost|546|587| |Interest on financial assets carried at fair value through OCI|1,818|1,762| |Other interest (including interest on tax refunds)|4|18| Dividend income comprise: Dividend from mutual fund units and other investments 4 8 # 14) Employee benefits # Defined benefit plans For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Past service cost, both vested and unvested, is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits. The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations 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. The Group provides benefits such as gratuity, pension and provident fund (Company managed fund) to its employees which are treated as defined benefit plans. # Defined contribution plans Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits. The Group provides benefits such as superannuation, provident fund (other than Company managed fund) and foreign defined contribution plans to its employees which are treated as defined contribution plans. # Notes forming part of Consolidated Financial Statements # Short-term employee benefits Employee benefit obligations consist of the following: # Employee benefit obligations - Non-current |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Gratuity liability|13|12| |Foreign defined benefit plans|490|492| |Other employee benefit obligations|174|245| | |677|749| # Employee benefit obligations - Current |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Compensated absences|3,760|3,448| |Other employee benefit obligations|50|50| | |3,810|3,498| # Employee benefit expenses consist of the following: |(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Salaries, incentives and allowances|96,263|83,045| |Contributions to provident and other funds|8,450|6,401| |Staff welfare expenses|2,841|2,368| | |1,07,554|91,814| Integrated Annual Report 2021-22 Consolidated Financial Statements | 289 # Notes forming part of Consolidated Financial Statements Employee benefit plans consist of the following: # Gratuity and pension In accordance with Indian law, Tata Consultancy Services Limited and its subsidiaries in India operate a scheme of gratuity which is a defined benefit plan. |
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days' salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The Company manages the plan through a trust. Trustees administer contributions made to the trust. Certain overseas subsidiaries of the Company also provide for retirement benefit pension plans in accordance with the local laws. |
# The following table sets out the details of the defined benefit retirement plans and the amounts recognised in the financial statements: |(` crore)| | |Year ended March 31, 2022| | | | | |Year ended March 31, 2021| | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Domestic plans|Foreign plans|Foreign plans| |Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| | | |Funded|Unfunded|Funded|Unfunded| |Funded|Unfunded|Funded|Unfunded| | | |Change in benefit obligations|Benefit obligations, beginning of the year|4,315|12|2,292|237|6,856|3,638|8|755|161|4,562| | |Translation exchange difference|-|-|(17)|4|(13)|-|-|(21)|6|(15)| | |Plan assumed on insourcing of employees|-|-|-|-|-|-| |1,348|20|1,368| | |Plan participants' contribution|-|-|15|-|15|-| |12|-|12| | |Service cost|539|-|51|47|637|460|2|27|36|525| | |Interest cost|296|-|19|3|318|244|1|12|3|260| | |Remeasurement of the net defined benefit liability|(188)|1|(34)|(9)|(230)|135|2|139|18|294| | |Past service cost / (credit)|-|-|3|-|3|-|-|-|-| | | |Benefits paid|(489)|(1)|(35)|(13)|(538)|(162)|(1)|20|(7)|(150)| | |Shift of plan from unfunded to funded position|9|(9)|-|-|-|-|-|-|-| | | |Benefit obligations, end of the year|4,482|3|2,294|269|7,048|4,315|12|2,292|237|6,856| # Notes forming part of Consolidated Financial Statements |(` crore)| | |Year ended March 31, 2022| | | | |Year ended March 31, 2021| | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Domestic plans|Foreign plans|Foreign plans| |Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| | | |Change in plan assets|Funded|Unfunded|Funded|Unfunded| |Funded|Unfunded|Funded|Unfunded| | | | |Fair value of plan assets, beginning of the year|4,706|-|2,073|-|6,779|3,643|-| |629|-| |4,272| |Translation exchange difference|-|-|(21)|-|(21)|-|-| |(17)|-|(17)| | |Plan assumed on insourcing of employees|-|-|-|-|-|-|-| |1,302|-|1,302| | |Interest income|335|-|16|-|351|269|-|9|-| | |278| |Employers' contributions|980|-|48|-|1,028|837|-| |25|-| |862| |Plan participants' contribution|-|-|15|-|15|-|-| |12|-|12| | |Benefits paid|(489)|-|(35)|-|(524)|(162)|-| |20|-| |(142)| |Remeasurement - return on plan assets excluding amount included in interest income|(5)|-|36|-|31|119|-| |93|-| |212| |Fair value of plan assets, end of the year|5,527|-|2,132|-|7,659|4,706|-| |2,073|-| |6,779| # Notes forming part of Consolidated Financial Statements |(` crore)| | |As at March 31, 2022| | | |As at March 31, 2021| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| | | |Funded status|Deficit of plan assets over obligations|(10)|(3)|(221)|(269)|(503)|-|(12)|(255)|(237)|(504)| | |Surplus of plan assets over obligations|1,055|-|59|-|1,114|391|-|36|-|427| | |Total|1,045|(3)|(162)|(269)|611|391|(12)|(219)|(237)|(77)| |(` crore)| | | |As at March 31, 2022| | | |As at March 31, 2021| | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Domestic plans|Foreign plans|Foreign plans| | |Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| |Category of assets|Corporate bonds|1,697|-|369|-|2,066|1,408|-|805|-|2,213| | |Equity instruments|66|-|543|-|609|29|-|-|-|29| | |Government bonds and securities|2,625|-|195|-|2,820|2,257|-|-|-|2,257| | |Insurer managed funds|983|-|503|-|1,486|910|-|431|-|1,341| | |Bank balances|10|-|24|-|34|2|-|3|-|5| | |Others|146|-|498|-|644|100|-|834|-|934| | |Total|5,527|-|2,132|-|7,659|4,706|-|2,073|-|6,779| # Notes forming part of Consolidated Financial Statements # Net periodic gratuity / pension cost, included in employee cost consists of the following components: | | | |Year ended March 31, 2022| | | | | | |Year ended March 31, 2021| | | | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| | | | | | |Domestic plans|Domestic plans| | |Foreign plans|Foreign plans| | |Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| | |Funded|Unfunded|Funded|Unfunded| |Funded|Unfunded|Funded|Unfunded| | | | | | | | | | |Service cost|539| |-|51| |47|637|460| |2|27|36|525| | | | | | |Net interest on net defined benefit (asset) / liability|(39)| |-|3|3| |(33)|(25)| |1|3|3|(18)| | | | | | |Past service cost / (credit)|-|-| |3|-|3|-|-|-|-|-| | | | | | | | |Net periodic gratuity / pension cost|500| |-|57|50| |607|435|3| |30|39|507| | | | | | |Actual return on plan assets|330| |-|52|-| |382|388|-| |102|-|490| | | | | | # Remeasurement of the net defined benefit (asset) / liability: | | |Year ended March 31, 2022| | | | | | | | | |---|---|---|---|---|---|---|---|---|---|---| | | | | |Domestic plans|Domestic plans| |Foreign plans|Foreign plans| |Total| | |Funded|Unfunded|Funded|Unfunded| | | | | | | |Actuarial (gains) and losses arising from changes in demographic assumptions| | | |(20)| |-|(13)| |(2)|(35)| |Actuarial (gains) and losses arising from changes in financial assumptions| | | |(166)| |-|(55)| |(25)|(246)| |Actuarial (gains) and losses arising from changes in experience adjustments| | | |(2)| |1|34| |18|51| |Remeasurement of the net defined benefit liability| | | |(188)|1| |(34)| |(9)|(230)| |Remeasurement - return on plan assets excluding amount included in interest income| | | |5|-| |(36)|-| |(31)| | | | | |(183)|1| |(70)| |(9)|(261)| # Notes forming part of Consolidated Financial Statements |(` crore)| | | |Year ended March 31, 2021|Total| | | |---|---|---|---|---|---|---|---| | |Domestic plans| | |Foreign plans|Funded|Unfunded| | |Actuarial (gains) and losses arising from changes in demographic assumptions|24| | |1| |(2)|23| |Actuarial (gains) and losses arising from changes in financial assumptions|(32)| | |118| |19|105| |Actuarial (gains) and losses arising from changes in experience adjustments|143| | |20|1| |166| |Remeasurement of the net defined benefit liability|135| | |139| |18|294| |Remeasurement - return on plan assets excluding amount included in interest income|(119)| | |(93)|-| |(212)| | |16| | |46| |18|82| # The assumptions used in accounting for the defined benefit plan are set out below: | |Year ended March 31, 2022|Year ended March 31, 2022|Year ended March 31, 2021|Year ended March 31, |
2021| |---|---|---| | |Domestic plans|Foreign plans|Domestic plans|Foreign plans| |Discount rate|4.50%-7.25%|0.77%-8.30%|4.25%-7.00%|0.40%-7.55%| |Rate of increase in compensation levels of covered employees|4.00%-6.00%|1.50%-7.00%|4.00%-6.00%|1.25%-7.00%| |Rate of return on plan assets|4.50%-7.25%|0.77%-8.30%|4.25%-7.00%|0.40%-7.55%| |Weighted average duration of defined benefit obligations|2-16 years|3-31 years|3-18 years|3-65 years| Future mortality assumptions are taken based on the published statistics by the Insurance Regulatory and Development Authority of India. The expected benefits are based on the same assumptions as are used to measure Group's defined benefit plan obligations as at March 31, 2022. The Group is expected to contribute `57 crore to defined benefit plan obligations funds for the year ending March 31, 2023 comprising domestic component of `6 crore and foreign component of `51 crore. Integrated Annual Report 2021-22 Consolidated Financial Statements | 294 # Notes forming part of Consolidated Financial Statements The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. If the discount rate increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Increase of 0.50%|(372)|(378)| |Decrease of 0.50%|422|421| If the expected salary growth increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Increase of 0.50%|200|276| |Decrease of 0.50%|(188)|(260)| The defined benefit obligations shall mature after year ended March 31, 2022 as follows: |Year ending March 31|Defined benefit obligations (` crore)| |---|---| |2023|533| |2024|449| |2025|478| |2026|463| |2027|478| |2028-2032|2,477| Provident fund In accordance with Indian law, all eligible employees of Tata Consultancy Services Limited in India are entitled to receive benefits under the provident fund plan in which both the employee and employer (at a determined rate) contribute monthly to a trust set up by the Company to manage the investments and distribute the amounts entitled to employees. This plan is a defined benefit plan as the Company is obligated to provide its members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Company's # Notes forming part of Consolidated Financial Statements Contribution is transferred to Government administered pension fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in profit and loss under employee benefit expenses. In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund. File: AR_TCS_2021_2022.md All eligible employees of Indian subsidiaries of the Company are entitled to receive benefits under the provident fund plan in which both the employee and employer (at a determined rate) contribute monthly to the Government administered provident fund plan. A part of the company's contribution is transferred to Government administered pension fund. This plan is a defined contribution plan as the obligation of the employer is limited to the monthly contributions made to the fund. The contributions made to the fund are recognised as an expense in profit and loss under employee benefit expenses. # The details of fund and plan assets are given below: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Fair value of plan assets|22,814|20,003| |Present value of defined benefit obligations|(22,814)|(20,003)| |Net excess / (shortfall)|-|-| The plan assets have been primarily invested in Government securities and corporate bonds. # The principal assumptions used in determining the present value obligations of interest guarantee under the deterministic approach are as follows: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Discount rate|7.00%|6.50%| |Average remaining tenure of investment portfolio|8 years|8 years| |Guaranteed rate of return|8.10%|8.50%| The Group expensed `1,383 crore and `1,085 crore for the years ended March 31, 2022 and 2021, respectively, towards provident fund. # Superannuation All eligible employees on Indian payroll are entitled to benefits under Superannuation, a defined contribution plan. The Group makes monthly contributions until retirement or resignation of the employee. The Group recognises such contributions as an expense when incurred. |
The Group has no further obligation beyond its monthly contribution. The Group expensed `383 crore and `366 crore for the years ended March 31, 2022 and 2021, respectively, towards Employees' Superannuation Fund. # Foreign defined contribution plan The Group expensed `1,796 crore and `1,458 crore for the years ended March 31, 2022 and 2021, respectively, towards foreign defined contribution plans. # Notes forming part of Consolidated Financial Statements # 15) Cost recognition # (b) Other expenses Costs and expenses are recognised when incurred and have been classified according to their nature. The costs of the Group are broadly categorised in employee benefit expenses, cost of equipment and software licences, depreciation and amortisation expense and other expenses. Other expenses mainly include fees to external consultants, facility expenses, travel expenses, communication expenses, bad debts and advances written off, allowance for doubtful trade receivables and advances (net) and other expenses. Other expenses are aggregation of costs which are individually not material such as commission and brokerage, recruitment and training, entertainment, etc. # (a) Cost of equipment and software licences Cost of equipment and software licences consist of the following: | | | | |(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---|---|---|---|---| |Raw materials, sub-assemblies and components consumed|29|14| | | | | |Equipment and software licences purchased|1,137|1,447| | | | | |Finished goods and work-in-progress|1,166|1,461| | | | | |Opening stock|-*|1| | | | | |Less: Closing stock|3|-*| | | | | | |(3)|1| | | | | | |1,163|1,462| | | | | *Represents value less than `0.50 crore. # 16) Finance costs Finance costs consist of the following: | | | | |(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---|---|---|---|---| | | |Interest on lease liabilities|519|523| | | | | |Interest on tax matters|218|96| | | | | |Other interest costs|47|18| | | | | | |784|637| | | # 17) Income taxes Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred taxes are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. # Current income taxes The current income tax expense includes income taxes payable by the Company and its subsidiaries in India and overseas. The current tax payable by the Company and its subsidiaries in India is Indian income tax payable on worldwide income after taking credit for tax relief available for export operations in Special Economic Zones (SEZs). Current income tax payable by overseas branches of the Company is computed in accordance with the tax laws applicable in the jurisdiction in which the respective branch operates. The taxes paid are generally available for set off against the Indian income tax liability of the Company's worldwide income. The current income tax expense for overseas subsidiaries has been computed based on the tax laws applicable to each subsidiary in the respective jurisdiction in which it operates. 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 and where the relevant tax paying unit intends to settle the asset and liability on a net basis. # Deferred income taxes Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. |
Deferred income tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences associated with investments in subsidiaries where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled. For operations carried out in SEZs, deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. Consolidated Financial Statements | 298 # Notes forming part of Consolidated Financial Statements Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, to the extent it would be available for set off against future current income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. # The income tax expense consists of the following: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Current tax| | | |Current tax expense for current year|14,333|11,737| |Current tax benefit pertaining to prior years|(679)|(102)| | |13,654|11,635| |Deferred tax| | | |Deferred tax benefit for current year|(333)|(359)| |Deferred tax benefit pertaining to prior years|(83)|(78)| | |(416)|(437)| | |13,238|11,198| # Integrated Annual Report 2021-22 The reconciliation of estimated income tax expense at Indian statutory income tax rate to income tax expense reported in consolidated statement of profit and loss is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Profit before tax|51,687|43,760| |Indian statutory income tax rate|34.94%|34.94%| |Expected income tax expense|18,062|15,292| |Tax effect of adjustments to reconcile expected income tax expense to reported income tax expense| | | |Tax holidays|(4,792)|(4,708)| |Income exempt from tax|(396)|(325)| |Undistributed earnings in branches and subsidiaries|(47)|(13)| |Tax on income at different rates|980|471| |Tax pertaining to prior years|(762)|(180)| |Others (net)|193|661| |Total income tax expense|13,238|11,198| Tata Consultancy Services Limited benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under the SEZ scheme, the unit which begins providing services on or after April 1, 2005 will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profits or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions. From April 1, 2011, profits from units set up under SEZ scheme are subject to Minimum Alternate Tax (MAT). |
# Notes forming part of Consolidated Financial Statements # Significant components of net deferred tax assets and liabilities for the year ended March 31, 2022 are as follows: |Gross deferred tax assets and liabilities are as follows:|(` crore)|As at March 31, 2022|Assets|Liabilities|Net| |---|---|---|---|---|---| |Opening balance| |3,164|416|254|(737)| |Recognised in profit and loss| |21| | | | |Recognised in other comprehensive income| |254| | | | |Adjustments / utilisation| |(737)| | | | |Exchange difference| |21| | | | |Closing balance| |3,118| | | | # Deferred tax assets / (liabilities) in relation to |Particulars|Assets|Liabilities|Net| |---|---|---|---| |Property, plant and equipment and intangible assets|539|105|434| |Provision for employee benefits|1,062|20|1,042| |Cash flow hedges|7|-|7| |Receivables, financial assets at amortised cost|471|-|471| |MAT credit entitlement|975|-|975| |Branch profit tax|-|77|(77)| |Undistributed earnings of subsidiaries|-|355|(355)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(320)|-|(320)| |Lease liabilities|240|(1)|241| |Others|734|34|700| # Notes forming part of Consolidated Financial Statements # Significant components of net deferred tax assets and liabilities for the year ended March 31, 2021 are as follows: | |Opening balance|Recognised in profit and loss|Recognised / reclassified from other comprehensive income|Adjustments / Utilisation|Exchange difference|Closing balance| |---|---|---|---|---|---|---| |Deferred tax assets / (liabilities) in relation to Property, plant and equipment and intangible assets|145|124|-|40|-|309| |Provision for employee benefits|654|168|8|77|(10)|897| |Cash flow hedges|7|-|(15)|-|-|(8)| |Receivables, financial assets at amortised cost|388|35|-|-|1|424| |MAT credit entitlement|1,074|39|-|597|-|1,710| |Branch profit tax|(284)|(26)|-|-|-|(310)| |Undistributed earnings of subsidiaries|(286)|88|-|-|-|(198)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(484)|1|(17)|-|-|(500)| |Lease liabilities|345|(84)|-|-|-|261| |Others|490|92|-|-|(3)|579| |Total|2,049|437|(24)|714|(12)|3,164| # Gross deferred tax assets and liabilities are as follows: |As at March 31, 2021|Assets|Liabilities|Net| |---|---|---|---| |Deferred tax assets / (liabilities) in relation to Property, plant and equipment and intangible assets|458|149|309| |Provision for employee benefits|908|11|897| |Cash flow hedges|(8)|-|(8)| |Receivables, financial assets at amortised cost|424|-|424| |MAT credit entitlement|1,710|-|1,710| |Branch profit tax|-|310|(310)| |Undistributed earnings of subsidiaries|-|198|(198)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(500)|-|(500)| |Lease liabilities|260|(1)|261| |Others|679|100|579| |Total|3,931|767|3,164| # Under the Income-tax Act, 1961 Unabsorbed business losses expire 8 years after the year in which they originate. In respect of certain foreign subsidiaries, business losses can be carried forward indefinitely unless there is a substantial change in the ownership. Unrecognised deferred tax assets relate primarily to business losses and tax credit entitlements which do not qualify for recognition as per the applicable. # Notes forming part of Consolidated Financial Statements These unexpired business losses will expire based on the year of origination as follows: |March 31,|Unabsorbed business losses| |---|---| |2023|2| |2024|7| |2025|4| |2026|2| |2027|-| |Thereafter|116| The Company and its subsidiaries have ongoing disputes with income tax authorities in India and in some of the other jurisdictions where they operate. The disputes relate to tax treatment of certain expenses claimed as deduction, computation or eligibility of tax incentives and allowances and characterisation of fees for services received. The Company and its subsidiaries have recognised contingent liability in respect of tax demands received from direct tax authorities in India and other jurisdictions of `1,652 crore and `955 crore as at March 31, 2022 and 2021, respectively. These demand orders are being contested by the Company and its subsidiaries based on the management evaluation and advise of tax consultants. In respect of tax contingencies of `318 crore and `318 crore as at March 31, 2022 and 2021, respectively, not included above, the Company is entitled to an indemnification from the seller of TCS e-Serve Limited. The Group periodically receives notices and inquiries from income tax authorities related to the Group's operations in the jurisdictions it operates in. The Group has evaluated these notices and inquiries and has concluded that any consequent income tax claims or demands by the income tax authorities will not succeed on ultimate resolution. The number of years that are subject to tax assessments varies depending on tax jurisdiction. The major tax jurisdictions of Tata Consultancy Services Limited include India, United States of America and United Kingdom. In India, tax filings from fiscal 2018 are generally subject to examination by the tax authorities. In United States of America, the federal statute of limitation applies to fiscals 2017 and earlier and applicable state statutes of limitation vary by state. In United Kingdom, the statute of limitation generally applies to fiscal 2018 and earlier. # Notes forming part of Consolidated Financial Statements # 18) Earnings per share Basic earnings per share is computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. |
The Company did not have any potentially dilutive securities in any of the years presented. | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Profit for the year attributable to shareholders of the Company (` crore)|38,327|32,430| |Weighted average number of equity shares|369,88,32,195|374,01,10,733| |Basic and diluted earnings per share (`)|103.62|86.71| |Face value per equity share (`)|1|1| # 19) Segment information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Group's chief operating decision maker is the Chief Executive Officer and Managing Director. The Group has identified business segments ('industry vertical') as reportable segments. The business segments comprise: 1) Banking, Financial Services and Insurance, 2) Manufacturing, 3) Retail and Consumer Business, 4) Communication, Media and Technology, 5) Life Sciences and Healthcare and 6) Others such as Energy, Resources and Utilities, e-Governance and Products. Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment or manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. The assets and liabilities of the Group are used interchangeably amongst segments. Allocation of such assets and liabilities is not practicable and any forced allocation would not result in any meaningful segregation. Hence assets and liabilities have not been identified to any of the reportable segments. Summarised segment information for the years ended March 31, 2022 and 2021, is as follows: | |Banking, Financial Services and Insurance|Manufacturing|Retail and Consumer Business|Communication, Media and Technology|Life Sciences and Healthcare|Others|Total| |---|---|---|---|---|---|---|---| |Revenue from operations|75,126|18,610|30,715|31,874|20,462|14,967|1,91,754| |Segment result|20,174|5,602|8,534|9,518|6,139|3,090|53,057| |Total unallocable expenses| | | | | | |5,388| |Operating income| | | | | | |47,669| |Other income| | | | | | |4,018| |Profit before tax| | | | | | |51,687| |Tax expense| | | | | | |13,238| |Profit for the year| | | | | | |38,449| |Depreciation and amortisation expense (unallocable)| | | | | | |4,604| |Significant non-cash items (allocable)|14|(3)|10|2|(1)|113|135| # Notes forming part of Consolidated Financial Statements # Year ended March 31, 2021 | |Banking, Financial Services and Insurance|Manufacturing|Retail and Consumer Business|Communication, Media and Technology|Life Sciences|Others|Total| |---|---|---|---|---|---|---|---| |Revenue from operations|65,634|15,950|25,589|27,077|16,968|12,959|1,64,177| |Segment result|18,681|4,483|7,151|8,010|5,253|2,968|46,546| |Total unallocable expenses*| | | | | | |5,920| |Operating income| | | | | | |40,626| |Other income| | | | | | |3,134| |Profit before tax| | | | | | |43,760| |Tax expense| | | | | | |11,198| |Profit for the year| | | | | | |32,562| |Depreciation and amortisation expense (unallocable)| | | | | | |4,065| |Significant non-cash items (allocable)|15|1|78|9|1|97|201| *Includes the provision towards legal claim of `1,218 crore. Refer note 20. # Geographical non-current assets (property, plant and equipment, right-of-use assets, goodwill, other intangible assets, income tax assets and other non-current assets) are allocated based on the location of the assets. # Information regarding geographical non-current assets is as follows: | | |Geography|As at March 31, 2022|As at March 31, 2021| | |---|---|---|---|---|---| | | |Americas| | | | | | | |North America|1,637|1,630| | | | |Latin America|852|840| | | |Europe| | | | | | | |United Kingdom|1,470|1,546| | | | |Continental Europe|2,164|2,472| | | |Asia Pacific| |743|882| | | |India| |19,494|17,901| | | | |Middle East and Africa|152|134| |Total| | | |26,512|25,405| # Notes forming part of Consolidated Financial Statements # Information about major customers No single customer represents 10% or more of the Group's total revenue for the years ended March 31, 2022 and 2021. # 20) Commitments and contingencies # Capital commitments The Group has contractually committed (net of advances) `1,439 crore and `1,071 crore as at March 31, 2022 and 2021, respectively, for purchase of property, plant and equipment. # Contingencies - Direct tax matters Refer note 17. - Indirect tax matters The Company and its subsidiaries have ongoing disputes with tax authorities mainly relating to treatment of characterisation and classification of certain items. The Company and its subsidiaries have demands amounting to `568 crore and `556 crore as at March 31, 2022 and 2021, respectively, from various indirect tax authorities which are being contested by the Company and its subsidiaries based on the management evaluation and advice of tax consultants. |
- Other claims Claims aggregating `291 crore and `194 crore as at March 31, 2022 and 2021, respectively, against the Group have not been acknowledged as debts. # Integrated Annual Report 2021-22 In addition to above, in October 2014, Epic Systems Corporation (referred to as Epic) filed a legal claim against the Company in the Court of Western District Madison, Wisconsin alleging unauthorised access to and download of their confidential information and use thereof in the development of the Company's product MedMantra. In April 2016, the Company received an unfavourable jury verdict awarding damages of `7,115 crore (US $940 million) to Epic which was thereafter reduced by the Trial Court to `3,179 crore (US $420 million). Pursuant to reaffirmation of the District Court order in March 2019, the Company filed an appeal in the Appeals Court to fully set aside the Order. Epic also filed a cross appeal challenging the reduction by the District Court judge of `757 crore (US $100 million) award and `1,514 crore (US $200 million) in punitive damages. On August 20, 2020, the Appeals Court vacated the award of `2,119 crore (US $280 million) in punitive damages considering the award to be constitutionally excessive and remanded the case back to District Court with instructions to reassess and reduce the punitive damages award to at most `1,060 crore (US $140 million), affirmed the District Court's decision vacating the jury's award of `757 crore (US $100 million) in compensatory damages for alleged use of "other confidential information" by the Company, and affirmed the District Court's decision upholding the jury's award of `1,060 crore (US $140 million) in compensatory damages for use of the comparative analysis by the Company. The proceedings for assessing punitive damages have been remanded back to the District Court. Both the Company and Epic have filed their briefs at the District Court in relation to punitive damages. The matter is under consideration by the District Court. On April 8, 2021, Epic approached the Supreme Court seeking review of the order of the Appeals Court vacating the award of `2,119 crore (US $280 million) towards punitive damages and remanding back to District Court with an instruction to reassess the punitive. # Notes forming part of Consolidated Financial Statements Damages, to no more than ₹1,060 crore (US $140 million). On March 21, 2022, the Supreme Court denied Epic's petition seeking review of the order. The Company will continue to pursue all legal options available in the matter. Considering all the facts and various legal precedents, on a conservative and prudent basis, the Company provided ₹1,218 crore (US $165 million) towards this legal claim in its statement of profit and loss for the three month period ended September 30, 2020. This was presented as an "exceptional item" in the consolidated statement of profit and loss. Pursuant to US Court procedures, a Letter of Credit has been made available to Epic for ₹3,331 crore (US $440 million) as financial security in order to stay execution of the judgement pending post-appeal proceedings and conclusion. # Letter of comfort The Company has given a letter of comfort to banks for credit facilities availed by its subsidiaries. As per the terms of the letter of comfort, the Company undertakes not to divest its ownership interest directly or indirectly in the subsidiary and provide such managerial, technical and financial assistance to ensure continued successful operations of the subsidiary. The amounts assessed as contingent liability do not include interest that could be claimed by counterparties. Integrated Annual Report 2021-22 Consolidated Financial Statements | 306 # Notes forming part of Consolidated Financial Statements # 21) Statement of net assets, profit and loss and other comprehensive income attributable to owners and non-controlling interests |Name of the entity|Country of incorporation|% of voting power as at March 31, 2022|% of voting power as at March 31, 2021|Net assets, i.e. |
total assets minus total liabilities As % of consolidated net assets (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of consolidated other comprehensive income (` crore)|Share in total comprehensive income As % of total comprehensive income (` crore)| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Tata Consultancy Services Limited|India|-|-|80.18|77,173|87.61|38,187|252.53|(250)|87.24|37,937| |APTOnline Limited|India|89.00|89.00|0.11|110|0.04|18|1.01|(1)|0.04|17| |MP Online Limited|India|89.00|89.00|0.13|121|0.04|18|1.01|(1)|0.04|17| |C-Edge Technologies Limited|India|51.00|51.00|0.33|313|0.17|73|-|-|0.17|73| |MahaOnline Limited|India|74.00|74.00|0.08|80|-|1|-|-|-|1| |TCS e-Serve International Limited|India|100.00|100.00|0.16|156|0.20|88|-|-|0.20|88| |TCS Foundation|India|100.00|100.00|1.52|1,467|0.87|379|-|-|0.87|379| |Diligenta Limited|U.K.|100.00|100.00|1.46|1,402|0.02|8|(15.15)|15|0.05|23| |Tata Consultancy Services Canada Inc.|Canada|100.00|100.00|0.87|834|1.11|484|-|-|1.11|484| |Tata America International Corporation|U.S.A.|100.00|100.00|1.27|1,219|1.65|721|4.04|(4)|1.65|717| |Tata Consultancy Services Asia Pacific Pte Ltd.|Singapore|100.00|100.00|0.93|897|0.43|187|-|-|0.43|187| Integrated Annual Report 2021-22 Consolidated Financial Statements | 307 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2022|% of voting power as at March 31, 2021|Net assets, i.e. total assets minus total liabilities As % of consolidated net assets (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of consolidated other comprehensive income (` crore)|Share in total comprehensive income As % of total comprehensive income (` crore)| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Tata Consultancy Services Belgium|Belgium|100.00|100.00|0.44|426|0.22|98|-|-|0.23|98| |Tata Consultancy Services Deutschland GmbH|Germany|100.00|100.00|0.66|631|0.77|334|(9.09)|9|0.79|343| |Tata Consultancy Services Netherlands BV|Netherlands|100.00|100.00|2.74|2,636|1.23|536|-|-|1.23|536| |Tata Consultancy Services Sverige AB|Sweden|100.00|100.00|0.92|887|0.36|157|-|-|0.36|157| |TCS FNS Pty Limited|Australia|100.00|100.00|0.15|147|0.09|41|-|-|0.09|41| |TCS Iberoamerica SA|Uruguay|100.00|100.00|1.74|1,678|1.65|718|-|-|1.65|718| |Tata Consultancy Services (Africa) (PTY) Ltd.|South Africa|100.00|100.00|0.06|56|0.08|35|-|-|0.08|35| |Tata Consultancy Services Qatar L.L.C.|Qatar|100.00|100.00|0.03|33|-|1|-|-|-|1| |Tata Consultancy Services UK Limited|U.K.|100.00|100.00|0.03|27|-|-|-|-|-|-| |Tata Consultancy Services Ireland Limited|Ireland|100.00|100.00|0.25|245|0.05|21|-|-|0.05|21| |Subsidiaries (held indirectly) Foreign TCS e-Serve America, Inc.|U.S.A.|-|100.00|-|-|-|-|-|-|-|-| Integrated Annual Report 2021-22 Consolidated Financial Statements | 308 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2022|% of voting power as at March 31, 2021|Net assets, i.e. total assets minus total liabilities As % of consolidated net assets (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of consolidated other comprehensive income (` crore)|Share in total comprehensive income As % of total comprehensive income (` crore)| |---|---|---|---|---|---|---|---| |Tata Consultancy Services (China) Co., Ltd.|China|93.20|93.20|0.27|260|0.03|14| |Tata Consultancy Services Japan, Ltd.|Japan|66.00|66.00|1.53|1,476|0.60|263| |Tata Consultancy Services Malaysia Sdn Bhd|Malaysia|100.00|100.00|0.08|74|-|1| File: AR_TCS_2021_2022.md |PT Tata Consultancy Services Indonesia|Indonesia|100.00|100.00|0.03|32|0.03|13| |Tata Consultancy Services (Philippines) Inc.|Philippines|100.00|100.00|0.12|113|0.12|54| |Tata Consultancy Services (Thailand) Limited|Thailand|100.00|100.00|0.01|8|-|2| |Tata Consultancy Services Italia s.r.l.|Italy|100.00|100.00|0.08|74|0.04|17| |Tata Consultancy Services Luxembourg (G.D. de S.A.)|Capellen|100.00|100.00|0.11|109|0.12|53| |Tata Consultancy Services Switzerland Ltd.|Switzerland|100.00|100.00|0.73|705|0.47|206| |Tata Consultancy Services Osterreich GmbH|Austria|100.00|100.00|-|3|-|(2)| |Tata Consultancy Services Danmark ApS|Denmark|100.00|100.00|0.01|6|-|-| Integrated Annual Report 2021-22 Consolidated Financial Statements | 309 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2022|% of voting power as at March 31, 2021|Net assets, i.e. total assets minus total liabilities As % of consolidated net assets (` crore)|Share in Profit or loss Amount As % of consolidated profit or loss (` crore)|Share in other comprehensive income Amount As % of consolidated other comprehensive income (` crore)|Share in total comprehensive income Amount As % of total comprehensive income (` crore)| |---|---|---|---|---|---|---|---| |Tata Consultancy Services De Espana S.A.|Spain|100.00|100.00|0.07|70|0.04|19| |Tata Consultancy Services (Portugal) Unipessoal, Limitada|Portugal|100.00|100.00|0.01|13|0.02|9| |Tata Consultancy Services France|France|100.00|100.00|(0.40)|(385)|0.08|35| |Tata Consultancy Services Saudi Arabia|Saudi Arabia|100.00|76.00|0.12|112|(0.01)|(5)| |TCS Business Services GmbH|Germany|100.00|100.00|0.02|20|0.03|15| |TCS Technology Solutions AG|Germany|100.00|100.00|0.24|230|0.49|213| |Saudi Desert Rose Holding B.V.|Netherlands|100.00|-|-|2|0.08|34| |Tata Consultancy Services (South Africa) (PTY) Ltd.|South Africa|100.00|100.00|0.10|92|0.09|40| |TCS Financial Solutions Beijing Co., Ltd.|China|100.00|100.00|0.04|41|-|1| |TCS Financial Solutions Australia Pty Limited|Australia|100.00|100.00|0.10|87|0.11|46| |Tata Consultancy Services Bulgaria EOOD|Bulgaria|100.00|-|0.01|9|0.02|9| |TCS Solution Center S.A.|Uruguay|100.00|100.00|0.37|357|0.28|120| # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2022|% of voting power as at March 31, 2021|Net assets, i.e. total assets minus total liabilities As % of consolidated net assets (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of consolidated other comprehensive income (` crore)|Share in total comprehensive income As % of total comprehensive income (` crore)| |---|---|---|---|---|---|---|---| |TCS Uruguay S.A.|Uruguay|100.00|100.00|0.12|117|0.24|104| |Tata Consultancy Services Argentina S.A.|Argentina|100.00|100.00|-|2|-|1| |Tata Consultancy Services Do Brasil Ltda|Brazil|100.00|100.00|0.34|324|0.15|65| |Tata Consultancy Services De Mexico S.A., De C.V.|Mexico|100.00|100.00|0.63|606|-|-| |MGDC S.C.|Mexico|100.00|100.00|0.04|43|(0.18)|(79)| |TCS Inversiones Chile Limitada|Chile|100.00|100.00|0.33|315|0.19|81| |Tata Consultancy Services Chile S.A.|Chile|100.00|100.00|0.40|384|0.20|86| |Tata Consultancy Services Guatemala, S.A.|Guatemala|100.00|-|0.01|12|0.01|4| |TATASOLUTION CENTER S.A.|Ecuador|100.00|100.00|0.11|104|0.11|48| |Trusts|India|-|-|0.31|291|0.05|14| |TOTAL|TOTAL|TOTAL|TOTAL|100.00|96,244|100.00|43,586| a) Adjustments arising out of consolidation (6,398) (5,137) 4 (5,133) b) Non-controlling interests Indian subsidiaries APTOnline Limited (12) (2) - (2) Integrated Annual Report 2021-22 Consolidated Financial Statements | 311 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2022|% of voting power as at March 31, 2021|Net assets, i.e. |
total assets minus total liabilities As % of consolidated net assets (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of consolidated other comprehensive income (` crore)|Share in total comprehensive income As % of total comprehensive income (` crore)| |---|---|---|---|---|---|---|---| |MP Online Limited| |(13)|(2)|-|(2)| |(2)| |C-Edge Technologies Limited| |(153)|(36)|-|(36)| |(36)| |MahaOnline Limited| |(21)|-|-|-| |-| |Tata Consultancy Services (China) Co., Ltd.| |(18)|(1)|(2)|(3)| |(3)| |Tata Consultancy Services Japan, Ltd.| |(490)|(81)|34|(47)| |(47)| |TOTAL| |(707)|(122)|32|(90)| |(90)| # TOTAL 89,139 38,327 (63) 38,264 # Notes: 1. Tata Consultancy Services Qatar S.S.C. renamed as Tata Consultancy Services Qatar L.L.C.. 2. W12 Studios Limited renamed as Tata Consultancy Services UK Limited. 3. Equity stake increased to 100% in Tata Consultancy Services Saudi Arabia on acquisition of Saudi Desert Rose Holding B.V. w.e.f. May 26, 2021. 4. Tata Consultancy Services Ireland Limited incorporated a wholly owned subsidiary, Tata Consultancy Services Bulgaria EOOD in Bulgaria on August 31, 2021. 5. TCS Iberoamerica SA incorporated a subsidiary, Tata Consultancy Services Guatemala, S.A. in Guatemala on September 1, 2021. 6. Postbank Systems AG renamed as TCS Technology Solutions AG. 7. TCS e-Serve America, Inc. liquidated w.e.f. December 29, 2021. # Integrated Annual Report 2021-22 # Consolidated Financial Statements | 312 # Notes forming part of Consolidated Financial Statements # 22) Related party transactions The Company's principal related parties consist of its holding company Tata Sons Private Limited and its subsidiaries, its own subsidiaries, affiliates and key managerial personnel. The Group's material related party transactions and outstanding balances are with related parties with whom the Group routinely enter into transactions in the ordinary course of business. Refer note 21 for list of subsidiaries of the Company. Transactions and balances with its own subsidiaries are eliminated on consolidation. |
Transactions with related parties are as follows: | |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---| |Revenue from operations|40|789|2,785|-|3,614| |Purchases of goods and services (including reimbursements)|-|571|159|-|730| |Brand equity contribution|204|-|-|-|204| |Facility expenses|1|20|45|-|66| |Lease rental|-|73|24|-|97| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|-|(3)|1|-|(2)| |Contribution and advance to post employment benefit plans|-|-|-|2,322|2,322| |Purchase of property, plant and equipment|-|15|147|-|162| |Advances given|-|3|6|-|9| |Advances recovered|-|4|17|-|21| |Dividend paid|9,609|5|2|-|9,616| |Buy-back of shares|11,164|4|6|-|11,174| # Notes forming part of Consolidated Financial Statements |(` crore)| | | |Year ended March 31, 2021| | | | | | |---|---|---|---|---|---|---|---|---|---| |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties| | |Total| | | | |Revenue from operations| |35|609|2,205|-|2,849| | | | |Purchases of goods and services (including reimbursements)| |1|475|361|-|837| | | | |Brand equity contribution| |180|-|-|-|180| | | | |Facility expenses| |-|20|42|-|62| | | | |Lease rental| |1|36|45|-|82| | | | |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)| | | | |-|2|-|-|2| |Contribution and advance to post employment benefit plans| |-|-|-|5,913|5,913| | | | |Purchase of property, plant and equipment| |-|3|88|-|91| | | | |Advances given| |-|1| |6|-|7| | | |Advances recovered| |-|1|10|-|11| | | | |Advances taken| |-|1| |5|-|6| | | |Dividend paid| |7,817|4| |3|-|7,824| | | |Buy-back of shares| |9,998|4|-|-|10,002| | | | # Notes forming part of Consolidated Financial Statements # Balances receivable from related parties are as follows: |(` crore)| | | |As at March 31, 2022| | | | | |---|---|---|---|---|---|---|---|---| |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited|Other related parties| | | | |Total| |Trade receivables and contract assets| |11|245| |925| |-|1,181| |Loans, other financial assets and other assets| |10|53| |31| |-|94| |Total| |21|298| |956| |-|1,275| # Balances receivable from related parties are as follows: |(` crore)| | | |As at March 31, 2021| | | | | |---|---|---|---|---|---|---|---|---| |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited|Other related parties| | | | |Total| |Trade receivables and contract assets| |8|260| |714| |-|982| |Loans, other financial assets and other assets| |9|27| |62| |-|98| |Total| |17|287| |776| |-|1,080| # Balances payable to related parties are as follows: |(` crore)| | | |As at March 31, 2022| | | | | |---|---|---|---|---|---|---|---|---| |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited|Other related parties| | | | |Total| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities| |189|499| |146| |-|834| |Commitments and guarantees| |-|37| |201|-| |238| Integrated Annual Report 2021-22 Consolidated Financial Statements | 315 # Notes forming part of Consolidated Financial Statements | |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited|Other related parties|Total| |---|---|---|---|---|---| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities|175|299|394|-|868| |Commitments and guarantees|-|10|270|-|280| # Material related party transactions are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Revenue from operations| | | |Jaguar Land Rover Limited|1,500|1,093| |Tata Steel IJmuiden BV|558|452| # Transactions with key management personnel are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Short-term benefits|53|43| |Dividend paid during the year|1|1| | |54|44| # Material related party balances are as follows: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Trade receivables and contract assets| | | |Jaguar Land Rover Limited|379|290| The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. 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. # Notes forming part of Consolidated Financial Statements 23) The sitting fees and commission paid to non-executive directors is `12 crore and `10 crore as at March 31, 2022 and 2021, respectively. 24) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. |
The Company and its Indian subsidiaries will assess the impact and its evaluation once the subject rules are notified. The Company and its Indian subsidiaries will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. # 25) Dividends Dividends paid during the year ended March 31, 2022 include an amount of `15.00 per equity share towards final dividend for the year ended March 31, 2021 and an amount of `21.00 per equity share towards interim dividends for the year ended March 31, 2022. Dividends paid during the year ended March 31, 2021 include an amount of `6.00 per equity share towards final dividend for the year ended March 31, 2020 and an amount of `23.00 per equity share towards interim dividends for the year ended March 31, 2021. Dividends declared by the Company are based on profits available for distribution. On April 11, 2022, the Board of Directors of the Company have proposed a final dividend of `22.00 per share in respect of the year ended March 31, 2022 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately `8,050 crore. As per our report of even date attached For and on behalf of the Board For B S R & Co. LLP Rajesh Gopinathan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Amit Somani Partner CFO Membership No: 060154 Pradeep Manohar Gaitonde Company Secretary Mumbai, April 11, 2022 Mumbai, April 11, 2022 Integrated Annual Report 2021-22 Consolidated Financial Statements | 317 # Independent Auditor's Report # Standalone Financial Statements # To the Members of Tata Consultancy Services Limited # Report on the Audit of the Standalone Financial Statements # Opinion We have audited the standalone financial statements of Tata Consultancy Services Limited (hereinafter referred to as "the Company"), which comprise the Standalone Balance Sheet as at 31 March 2022, and the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements"). In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date. # Integrated Annual Report 2021-22 # Basis for Opinion We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements. # Key Audit Matters Key audit matters ('KAM') are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. |
Standalone Financial Statements | 318 # Description of Key Audit Matter |Key audit matter|How our audit addressed the key audit matter| |---|---| |Revenue recognition- Fixed price contracts|The Company inter alia engages in Fixed-price contracts, wherein, revenue is recognized using the percentage of completion computed as per the input method based on the Company's estimate of contract costs (Refer Note 4(a) and Note 10 to the standalone financial statements). We identified revenue recognition of fixed price contracts where the percentage of completion is used as a Key Audit Matter since - - there is an inherent risk and presumed fraud risk around the accuracy and existence of revenues recognised considering the customised and complex nature of these contracts and significant inputs of IT systems; - application of revenue recognition accounting standard (Ind AS 115, Revenue from Contracts with customers) is complex and involves a number of key judgments and estimates mainly in identifying performance obligations, related transaction price and estimating the future cost-to-completion of these contracts, which is used to determine the percentage of completion of the relevant performance obligation; | | |Our audit procedures included the following: - Obtained an understanding of the systems, processes and controls implemented by the Company for recording and computing revenue and the associated contract assets, unearned and deferred revenue balances. - Including involvement of our Information technology ('IT') specialists, as required: - - Assessed the IT environment in which the business systems operate and tested system controls over computation of revenue recognised; - Tested the IT controls over appropriateness of cost and revenue reports generated by the system; - Tested the controls pertaining to allocation of resources and budgeting systems which prevent the unauthorized recording/changes to costs incurred; - Tested on a random sampling basis the controls relating to the estimation of contract costs required to complete the respective projects. On selected specific and statistical samples of contracts, we tested that the revenue recognized is in accordance with the revenue recognition accounting standard including- | Integrated Annual Report 2021-22 Standalone Financial Statements | 319 # Other Information # Management's and Board of Directors' Responsibilities for the Standalone Financial Statements The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report, but does not include the financial statements and our auditors' report thereon. The Company's annual report is expected to be made available to us after the date of this auditor's report. Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon. In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Company's financial reporting process. # Auditor's Responsibilities for the Audit of the Standalone Financial Statements In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. # Integrated Annual Report 2021-22 # Standalone Financial Statements As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. |
We also: - Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors. - Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. - Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. # Report on Other Legal and Regulatory Requirements # Statement of Cash Flows dealt with by opinion and to the best of our information and according to the explanations given to us: 1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. 2. # (A) As required by Section 143(3) of the Act, we report that: 1. a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. 2. b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. 3. c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account. 4. d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act. 5. e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act. 6. f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". 3. # (B) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion: 1. |
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 19 to the standalone financial statements. 2. b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. 3. c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. 4. d) (i) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether in writing or otherwise, that the (C) With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act: the Company shall: - directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company - provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. (iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii) contain any material mis-statement. e) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act. In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us. For B S R & Co. LLP Chartered Accountants Firm's Registration No: 101248W/W-100022 Amit Somani Partner Mumbai Membership No: 060154 11 April 2022 UDIN: 22060154AGVEXH5342 # Integrated Annual Report 2021-22 # Standalone Financial Statements | 323 # Annexure A to the Independent Auditor's report on the standalone financial statements of Tata Consultancy Services Limited for the year ended 31 March 2022 (Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) # (i) (a) (A) File: AR_TCS_2021_2022.md The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, plant and equipment. # (B) The Company has maintained proper records showing full particulars of Intangible assets. # (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular programme of physical verification of its Property, plant and equipment by which all Property, plant and equipment are verified in a phased manner over a period of three years. In accordance with this programme, certain Property, plant and equipment were verified during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. # (ii) (a) The inventory has been physically verified by the management during the year. No material discrepancies were noticed on such verification. In our opinion, the frequency of such verification is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were 10% or more in the aggregate for each class of inventory. # (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. In our opinion, the quarterly returns or statements filed by the Company with such banks are in agreement with the books of account of the Company. |
# (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, plant and equipment (including Right-of-use assets) or Intangible assets or both during the year. # (d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder. # (iii) The Company has not made any investments, provided guarantee or security or granted any advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties during the year. has granted loans to one company during the year, details of the loan is stated in sub-clause (a) below. The Company has not granted any loans, secured or unsecured, to firms, limited liability partnerships or any other parties during the year. # (a) A. Based on the audit procedures carried on by us and as per the information and explanations given to us, the Company has not granted any loans to subsidiaries. # B. Based on the audit procedures carried on by us and as per the information and explanations given to us, the Company has granted loans to a party other than subsidiaries as below: |Particulars|Amount (` in crores)| |---|---| |Aggregate amount during the year - Others|13,655| |Balance outstanding as at balance sheet date - Others|5,386| According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the terms and conditions of the loans given are, prima facie, not prejudicial to the interest of the Company. # (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in the case of loans given, the repayment of principal and payment of interest has been stipulated and the repayments or receipts have been regular. # (d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no overdue amount for more than ninety days in respect of loans given. # (e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no loan given falling due during the year, which has been renewed or extended or fresh loans given to settle the overdues of existing loans given to the same party. # (f) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013 for the products manufactured by it (and/or services provided by it). Accordingly, clause 3(vi) of the Order is not applicable. # (vii) (a) The Company does not have liability in respect of Sales tax, Service tax, Duty of excise and Value added tax during the year. since effective 1 July 2017, these statutory dues has been subsumed into GST. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Goods and Services Tax ('GST'), Provident fund, Employees' State Insurance, Income-tax, Duty of Customs, Cess and other material statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of GST, Provident fund, Employees' State Insurance, Income-tax, Duty of Customs, Cess and other material statutory dues were in arrears as at 31 March 2022 for a period of more than six months from the date they became payable. |
(b) According to the information and explanations given to us, there are no dues of GST, Provident fund, Employees' State Insurance, Income-tax, Sales tax, Service tax, Duty of Customs, Value added tax, Cess or other statutory dues which have not been deposited by the Company on account of disputes, except for the following: |Name of the Statute|Nature of the Dues|Amount (` in crores)|Period|Forum where dispute is pending| |---|---|---|---|---| |The Central Sales Tax Act, 1956 and Value Added Tax Act|Sales tax and VAT|233|Financial Year - 1994-1995, 2004-2005, 2007-2008, 2008-2009, 2009-2010, 2010-2011, 2011-2012, 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-17, 2017-18|High Court| | | | |Financial Year - 1990-1991, 2002-2003, 2003-2004, 2004-2005, 2005-2006, 2006-2007, 2011-2012, 2012-2013|Tribunal| | | | |Financial Year - 1995-1996, 1997-1998, 2004-2005, 2005-2006, 2011-2012, 2016-17, 2017-18|Assistant Commissioner| | | | |Financial Year - 2008-2009, 2010-2011, 2011-2012, 2012-2013, 2013-2014, 2015-2016, 2016-2017|Deputy Commissioner| | | | |Financial Year - 1997-1998, 2005-2006, 2012-13, 2013-2014, 2014-2015, 2015-2016, 2016-2017|Joint Commissioner| |The Finance Act, 1994|Service tax|2|Financial Year - 2002-2003, 2003-2004, 2004-2005, 2008-09, 2009-2010, 2010-2011, 2011-2012, 2012-13, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Commissioner Appeals| |The Income-tax Act, 1961|Income-tax|4,181|Assessment Year - 2007-08, 2011-12, 2017-18, 2018-19|Commissioner of Income-tax (Appeals)| | | |545|Assessment Year - 2006-07, 2015-16|Income-tax Appellate Tribunal| | | |39|Assessment Year - 2008-09, 2009-10, 2010-11, 2016-17|Assessing Officer / National Faceless Assessment Centre| ** These amounts are net of amount paid/ adjusted under protest ` 769 crores Integrated Annual Report 2021-22 Standalone Financial Statements | 326 # Integrated Annual Report 2021-22 # Standalone Financial Statements (viii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, we report that no funds have been raised on short-term basis by the Company. Accordingly, clause 3(ix)(d) of the Order is not applicable. (e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries as defined under the Companies Act, 2013. Accordingly, clause 3(ix)(e) of the Order is not applicable. (ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company did not have any loans or borrowings from any lender during the year. Accordingly, clause 3(ix)(a) of the Order is not applicable. (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a wilful defaulter by any bank or financial institution or government authority. Accordingly, clause 3(ix)(b) of the Order is not applicable. (c) According to the information and explanations given to us by the management, the Company has not obtained any term loans. Accordingly, clause 3(ix)(c) of the Order is not applicable. (d) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries as defined under the Companies Act, 2013. Accordingly, clause 3(ix)(f) of the Order is not applicable. (f) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Companies Act, 2013 has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government. (x) (a) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). Accordingly, clause 3(x)(a) of the Order is not applicable. (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable. (xiii) In our opinion and according to the information and explanations given to us, the transactions with related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, and the details of the related party transactions have been disclosed in the standalone financial statements as required by the applicable Indian Accounting Standards. (xiv) (a) Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business. |
(b) We have considered the internal audit reports of the Company issued till date for the period under audit. (xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company. (xvi) (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi)(a) of the Order is not applicable. (b) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi)(b) of the Order is not applicable. (c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, clause 3(xvi)(c) of the Order is not applicable. (d) According to the information and explanations provided to us during the course of audit, the Group does not have any CIC. Accordingly, the requirements of clause 3(xvi)(d) are not applicable. (xvii) The Company has not incurred cash losses in the current and in the immediately preceding financial year. (xviii) There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable. (xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. (xx) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Companies Act, 2013 pursuant to any project. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable. For B S R & Co. LLP Chartered Accountants Firm's Registration No: 101248W/W-100022 Amit Somani Partner Mumbai Membership No: 060154 11 April 2022 UDIN: 22060154AGVEXH5342 Integrated Annual Report 2021-22 Standalone Financial Statements | 328 # Annexure B to the Independent Auditor's Report on the standalone financial statements of Tata Consultancy Services Limited for the year ended 31 March 2022 # Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (Referred to in paragraph 2(A)(f) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) # Management's and Board of Directors' Responsibilities for Internal Financial Controls The Company's Management and the Board of Directors are responsible for establishing and maintaining internal financial controls with reference to standalone financial statements based on the criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. # Opinion We have audited the internal financial controls with reference to standalone financial statements of Tata Consultancy Services Limited ("the Company") as of 31 March 2022 in conjunction with our audit of the standalone financial statements of the Company as at and for the year ended on that date. |
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at 31 March 2022, based on the internal financial controls with reference to standalone financial statements. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control. Integrated Annual Report 2021-22 Standalone Financial Statements | 329 based on the assessed risk. The procedures selected procedures that (1) pertain to the maintenance of collusion or improper management override of depend on the auditor's judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference to standalone financial statements. A company's internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the standalone financial statements. # Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. For B S R & Co. |
LLP Chartered Accountants Firm's Registration No: 101248W/W-100022 Amit Somani Partner Mumbai Membership No: 060154 11 April 2022 UDIN: 22060154AGVEXH5342 Integrated Annual Report 2021-22 Standalone Financial Statements | 330 # Standalone Balance Sheet | |Note|As at March 31, 2022|As at March 31, 2021| | | | | | |---|---|---|---|---|---|---|---|---| |ASSETS| | | | | | | | | |Non-current assets| | | | | | | | | |Property, plant and equipment|8(a)|9,669|9,821| | | | | | |Capital work-in-progress|8(a)|1,146|861| | | | | | |Right-of-use assets|7|5,837|5,876| | | | | | |Intangible assets|8(b)|1,018|362| | | | | | | | | | |Financial assets| | | | | | | | | |Investments|6(a)|29,262|28,324| | |Trade receivables| | | |Billed|6(b)|29,852|25,222| | | | | | |Unbilled| |6(b)|6,250|5,399| | | | | |Cash and cash equivalents|6(c)|8,197|1,112| | | | | | |Other balances with banks|6(d)|5,495|2,030| | | | | | |Loans|6(e)|5,653|10,486| | | | | | |Other financial assets|6(f)|1,432|1,363| | |Income tax assets (net)| |1,643|1,501| | | | | | |Deferred tax assets (net)|15|2,779|3,160| | | | | | |Other assets|8(c)|1,797|1,273| | | | | | |Total non-current assets| |27,071|26,221| | | | | | | | | | | | | | | | | | | | |Total current assets| |94,192|83,160| | | | | | |TOTAL ASSETS| |1,21,263|1,09,381| | | | | | |EQUITY AND LIABILITIES| | | | | | | | |Equity| | | | | | | | | | |Share capital|6(n)|366|370| | | | | | |Other equity|9|76,807|74,424| | | | | | |Total equity| |77,173|74,794| | Integrated Annual Report 2021-22 Standalone Financial Statements | 331 # Standalone Balance Sheet |Note|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Liabilities|Liabilities|Liabilities| |Non-current liabilities|Non-current liabilities|Non-current liabilities| |Financial liabilities| | | |Lease liabilities|4,879|5,077| |Other financial liabilities|518|228| |Employee benefit obligations|103|108| |Deferred tax liabilities (net)|129|365| |Unearned and deferred revenue|560|284| |Total non-current liabilities|6,189|6,062| |Current liabilities|Current liabilities|Current liabilities| |Financial liabilities| | | |Lease liabilities|976|835| |Trade payables| | | |Dues of small enterprises and micro enterprises|-|-| |Dues of creditors other than small enterprises and micro enterprises|10,082|7,962| |Other financial liabilities|5,826|4,473| |Unearned and deferred revenue|3,013|2,877| |Other liabilities|7,033|2,720| |Provisions|1,377|1,350| |Employee benefit obligations|2,844|2,598| |Income tax liabilities (net)|6,750|5,710| |Total current liabilities|37,901|28,525| |TOTAL EQUITY AND LIABILITIES|1,21,263|1,09,381| NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS As per our report of even date attached For and on behalf of the Board For B S R & Co. LLP Rajesh Gopinathan N Ganapathy Subramaniam Chartered Accountants CEO and Managing Director COO and Executive Director Firm's registration no: 101248W/W-100022 Amit Somani Samir Seksaria Pradeep Manohar Gaitonde Partner CFO Company Secretary Membership No: 060154 Mumbai, April 11, 2022 Mumbai, April 11, 2022 Integrated Annual Report 2021-22 Standalone Financial Statements | 332 # Standalone Statement of Profit and Loss |Note|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Revenue from operations|1,60,341|1,35,963| |Other income|7,486|5,400| |TOTAL INCOME|1,67,827|1,41,363| # Expenses |Note|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Employee benefit expenses|81,097|69,046| |Cost of equipment and software licences|1,010|1,230| |Finance costs|486|537| |Depreciation and amortisation expense|3,522|3,053| |Other expenses|31,989|25,377| |TOTAL EXPENSES|1,18,104|99,243| # Profit Before Exceptional Item and Tax |Year ended March 31, 2022|Year ended March 31, 2021| |---|---| |49,723|42,120| # Exceptional item |Note|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Provision towards legal claim|-|1,218| # Profit Before Tax |Year ended March 31, 2022|Year ended March 31, 2021| |---|---| |49,723|40,902| # Tax Expense |Note|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Current tax|11,931|10,300| |Deferred tax|(395)|(358)| |TOTAL TAX EXPENSE|11,536|9,942| # Profit for the Year |Year ended March 31, 2022|Year ended March 31, 2021| |---|---| |38,187|30,960| # Other Comprehensive Income (OCI) |Items|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Remeasurement of defined employee benefit plans|180|(16)| |Income tax on items that will not be reclassified|(39)|3| # Total Comprehensive Income for the Year |Year ended March 31, 2022|Year ended March 31, 2021| |---|---| |37,937|31,033| # Earnings per Equity Share | |Note|Basic and diluted (`)| | | | | | |---|---|---|---|---|---|---|---| | | | | | |16|103.24|82.78| # Weighted Average Number of Equity Shares |Year ended March 31, 2022|Year ended March 31, 2021| |---|---| |369,88,32,195|374,01,10,733| # Notes Forming Part of Standalone Financial Statements As per our report of even date attached For and on behalf of the Board For B S R & Co. LLP Rajesh Gopinathan N Ganapathy Subramaniam Chartered Accountants CEO and Managing Director Firm's registration no: 101248W/W-100022 Amit Somani Samir Seksaria Pradeep Manohar Gaitonde CFO Company Secretary Mumbai, April 11, 2022 Mumbai, April 11, 2022 # Standalone Statement of Changes in Equity # A. |
EQUITY SHARE CAPITAL | |Balance as at April 1, 2021|Changes in equity share capital due to prior period errors|Restated balance as at April 1, 2021|Changes in equity share capital during the year*|Balance as at March 31, 2022| |---|---|---|---|---|---| |(` crore)|370|-|370|(4)|366| | |Balance as at April 1, 2020|Changes in equity share capital due to prior period errors|Restated balance as at April 1, 2020|Changes in equity share capital during the year*|Balance as at March 31, 2021| |---|---|---|---|---|---| |(` crore)|375|-|375|(5)|370| *Refer note 6(n). # B. OTHER EQUITY | | |Reserves and surplus| | | |Items of other comprehensive income| |Total Equity| |---|---|---|---|---|---|---|---|---| | |Capital|Capital redemption reserve|Special Economic Zone re-investment reserve|Retained earnings|Investment revaluation reserve|Cash flow hedging reserve|Intrinsic value|Time value| |Balance as at April 1, 2021|-|13|2,538|70,928|916|56|(27)|74,424| |Profit for the year|-|-|-|38,187|-|-|-|38,187| |Other comprehensive income / (losses)|-|-|-|141|(336)|(29)|(26)|(250)| |Total comprehensive income|-|-|-|38,328|(336)|(29)|(26)|37,937| |Dividend|-|-|-|(13,317)|-|-|-|(13,317)| |Expenses for buy-back of equity shares1|-|-|-|(49)|-|-|-|(49)| |Tax on buy-back of equity shares1|-|-|-|(4,192)|-|-|-|(4,192)| |Buy-back of equity shares1|-|4|-|(18,000)|-|-|-|(17,996)| |Transfer to Special Economic Zone re-investment reserve|-|-|9,407|(9,407)|-|-|-|-| |Transfer from Special Economic Zone re-investment reserve|-|-|(4,658)|4,658|-|-|-|-| |Balance as at March 31, 2022|-|17|7,287|68,949|580|27|(53)|76,807| Integrated Annual Report 2021-22 Standalone Financial Statements | 334 # Standalone Statement of Changes in Equity |(` crore)|Reserves and surplus|Reserves and surplus|Reserves and surplus|Reserves and surplus|Items of other comprehensive income|Items of other comprehensive income|Items of other comprehensive income|Total Equity| | | | | | |---|---|---|---|---|---|---|---|---| |Capital reserve*|Capital redemption reserve|Special Economic Zone re-investment reserve|Retained earnings|Investment revaluation reserve|Cash flow hedging reserve|Intrinsic value|Time value| | |Balance as at April 1, 2020|-|8|1,594|71,532|882|45|(68)|73,993| |Profit for the year|-|-|-|30,960|-|-|-|30,960| |Other comprehensive income / (losses)|-|-|-|(13)|34|11|41|73| |Total comprehensive income|-|-|-|30,947|34|11|41|31,033| |Dividend|-|-|-|(10,850)|-|-|-|(10,850)| |Expenses for buy-back of equity shares1|-|-|-|(31)|-|-|-|(31)| |Tax on buy-back of equity shares1|-|-|-|(3,726)|-|-|-|(3,726)| |Buy-back of equity shares1|-|5|-|(16,000)|-|-|-|(15,995)| |Transfer to Special Economic Zone re-investment reserve|-|-|5,058|(5,058)|-|-|-|-| |Transfer from Special Economic Zone re-investment reserve|-|-|(4,114)|4,114|-|-|-|-| |Balance as at March 31, 2021|-|13|2,538|70,928|916|56|(27)|74,424| *Represents values less than `0.50 crore. 1Refer Note 6(n). Gain of `141 crore and loss of `13 crore on remeasurement of defined employee benefit plans (net of tax) is recognised as a part of retained earnings for the years ended March 31, 2022 and 2021, respectively. Integrated Annual Report 2021-22 Standalone Financial Statements | 335 # Standalone Statement of Changes in Equity File: AR_TCS_2021_2022.md # Nature and purpose of reserves # (a) Capital reserve The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company's own equity instruments to capital reserve. # (b) Capital redemption reserve As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of section 69 of the Companies Act, 2013. # (c) Special Economic Zone re-investment reserve The Special Economic Zone (SEZ) re-investment reserve is created out of the profit of eligible SEZ units in terms of the provisions of section 10AA(1)(ii) of the Income-tax Act, 1961. The reserve will be utilised by the Company for acquiring new assets for the purpose of its business as per the terms of section 10AA(2) of Income-tax Act, 1961. # (d) Retained earnings This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date. # (e) Investment revaluation reserve This reserve represents the cumulative gains and losses arising on the revaluation of equity and debt instruments on the balance sheet date measured at fair value through other comprehensive income. The reserves accumulated will be reclassified to retained earnings and profit and loss respectively, when such instruments are disposed. # (f) Cash flow hedging reserve The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. Such gains or losses will be reclassified to statement of profit and loss in the period in which the underlying hedged transaction occurs. # NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS As per our report of even date attached For and on behalf of the Board For B S R & Co. |
LLP Rajesh Gopinathan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Amit Somani Partner Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Membership No: 060154 Mumbai, April 11, 2022 Mumbai, April 11, 2022 Integrated Annual Report 2021-22 Standalone Financial Statements | 336 # Standalone Statement of Cash Flows | |Year ended March 31, 2022|Year ended March 31, 2021| |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---|---|---|---| |CASH FLOWS FROM OPERATING ACTIVITIES| | | | | | |Profit for the year|38,187|30,960|Other assets|747|(2,432)| |Adjustments for:| | |Trade payables|2,120|(771)| |Depreciation and amortisation expense|3,522|3,053|Unearned and deferred revenue|412|246| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|107|185|Other financial liabilities|968|(171)| |Provision towards legal claim (Refer note 19)|-|1,218|Other liabilities and provisions|388|1,127| |Tax expense|11,536|9,942|Cash generated from operations|46,463|41,627| |Net cash generated from operating activities|36,127|33,822|CASH FLOWS FROM INVESTING ACTIVITIES| | | |Taxes paid (net of refunds)|(10,336)|(7,805)|Bank deposits placed|(14,653)|(5,678)| | | | |Inter-corporate deposits placed|(13,655)|(20,139)| | | | |Purchase of investments|(70,826)|(51,822)| | | |Payment for purchase of property, plant and equipment| |(2,147)|(2,071)| | | |Payment including advances for acquiring right-of-use assets| |(13)|(101)| | | | |Payment for purchase of intangible assets|(457)|(242)| | | |Payment towards subscription of shares in wholly owned subsidiary| |-|(224)| | | | |Proceeds from bank deposits|11,201|4,617| | | | |Proceeds from inter-corporate deposits|18,560|16,892| | | | |Proceeds from disposal / redemption of investments|69,451|49,333| | | | |Proceeds from sub-lease receivable|4|-| | | |Proceeds from disposal of property, plant and equipment| |29|31| # Standalone Statement of Cash Flows | |(` crore)|(` crore)| |---|---|---| |Year ended|March 31, 2022|March 31, 2021| |Proceeds from liquidation of wholly owned subsidiary|-|12| |Interest received|2,594|2,605| |Dividend received from subsidiaries|3,554|2,211| |Net cash generated from / (used in) investing activities|3,642|(4,576)| |CASH FLOWS FROM FINANCING ACTIVITIES|CASH FLOWS FROM FINANCING ACTIVITIES|CASH FLOWS FROM FINANCING ACTIVITIES| |Repayment of lease liabilities|(935)|(879)| |Interest paid|(478)|(537)| |Dividend paid|(13,317)|(10,850)| |Transfer of funds to buy-back escrow account|(180)|(160)| |Transfer of funds from buy-back escrow account|162|160| |Expenses for buy-back of equity shares (Refer note 6(n))|(49)|(31)| |Tax on buy-back of equity shares (Refer note 6(n))|-|(3,726)| |Buy-back of equity shares (Refer note 6(n))|(18,000)|(16,000)| |Net cash used in financing activities|(32,797)|(32,023)| |Net change in cash and cash equivalents|6,972|(2,777)| |Cash and cash equivalents at the beginning of the year|1,112|3,852| |Exchange difference on translation of foreign currency cash and cash equivalents|113|37| |Cash and cash equivalents at the end of the year|8,197|1,112| *Represents values less than `0.50 crore. # NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS Refer note 13(c) for amount spent during the years ended March 31, 2022 and 2021 on construction / acquisition of any asset and other purposes relating to CSR activities. As per our report of even date attached For and on behalf of the Board For B S R & Co. LLP Rajesh Gopinathan N Ganapathy Subramaniam Chartered Accountants CEO and Managing Director Firm's registration no: 101248W/W-100022 Amit Somani Samir Seksaria Pradeep Manohar Gaitonde Partner CFO Company Secretary Membership No: 060154 Mumbai, April 11, 2022 Mumbai, April 11, 2022 Integrated Annual Report 2021-22 Standalone Financial Statements | 338 # Notes forming part of Standalone Financial Statements # 1) Corporate information Tata Consultancy Services Limited (referred to as "TCS Limited" or "the Company") provides IT services, consulting and business solutions and has been partnering with many of the world's largest businesses in their transformation journeys. The Company offers a consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions. This is delivered through its unique Location-Independent Agile delivery model recognised as a benchmark of excellence in software development. The Company is a public limited company incorporated and domiciled in India. The address of its corporate office is TCS House, Raveline Street, Fort, Mumbai - 400001. As at March 31, 2022, Tata Sons Private Limited, the holding company owned 72.27% of the Company's equity share capital. The Board of Directors approved the standalone financial statements for the year ended March 31, 2022 and authorised for issue on April 11, 2022. # 2) Statement of compliance These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules as amended from time to time. # 3) Basis of preparation These standalone financial statements have been prepared on historical cost basis except for certain financial instruments and defined benefit plans which are measured at fair value or amortised cost at the end of each reporting period. |
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash equivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12 months. The statement of cash flows have been prepared under indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value to be cash equivalents. These standalone financial statements have been prepared in Indian Rupee (`) which is the functional currency of the Company. Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are retranslated at the exchange rate prevailing on the balance sheet dates and exchange gains and losses arising on settlement and restatement are recognised in the statement of profit and loss. Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated. The significant accounting policies used in preparation of the standalone financial statements have been discussed in the respective notes. # Notes forming part of Standalone Financial Statements # 4) Use of estimates and judgements The preparation of standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires management of the Company to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures of contingent liabilities as at the date of standalone financial statements and the reported amounts of income and expenses for the periods presented. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected. The Company uses the following critical accounting estimates in preparation of its standalone financial statements: # (a) Revenue recognition Revenue for fixed-price contracts is recognised using percentage-of-completion method. The Company uses judgement to estimate the future cost-to-completion of the contracts which is used to determine degree of completion of the performance obligation. # (b) Useful lives of property, plant and equipment The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods. # (c) Impairment of investments in subsidiaries The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss. # (d) Fair value measurement of financial instruments When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. # (e) Provision for income tax and deferred tax assets The Company uses estimates and judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and disallowances which is exercised while determining the provision for income tax. A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. |
Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period. # (f) Provisions and contingent liabilities The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates. # Notes forming part of Standalone Financial Statements The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are recognised when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the standalone financial statements. # (g) Employee benefits The accounting of employee benefit plans in the nature of defined benefit requires the Company to use assumptions. These assumptions have been explained under employee benefits note. # (h) Leases The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgement. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics. # (i) Impact of COVID-19 (pandemic) The Company has taken into account all the possible impacts of COVID-19 in preparation of these standalone financial statements, including but not limited to its assessment of, liquidity and going concern assumption, recoverable values of its financial and non-financial assets, impact on revenue recognition owing to changes in cost budgets of fixed price contracts, impact on leases and impact on effectiveness of its hedges. The Company has carried out this assessment based on available internal and external sources of information upto the date of approval of these standalone financial statements and believes that the impact of COVID-19 is not material to these standalone financial statements and expects to recover the carrying amount of its assets. The impact of COVID-19 on the standalone financial statements may differ from that estimated as at the date of approval of these standalone financial statements owing to the nature and duration of COVID-19. # 5) Recent pronouncements Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1, 2022, as below: # Notes forming part of Standalone Financial Statements # Ind AS 103 - Reference to Conceptual Framework The amendments specify that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Company does not expect the amendment to have any significant impact in its financial statements. |
# Ind AS 16 - Proceeds before intended use The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, an entity will recognise such sales proceeds and related cost in profit or loss. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its financial statements. # Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract The amendments specify that the 'cost of fulfilling' a contract comprises the 'costs that relate directly to the contract'. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification and the Company does not expect the amendment to have any significant impact in its financial statements. The amendment clarifies which fees an entity includes when it applies the '10 percent' test of Ind AS 109 in assessing whether to derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements. # Ind AS 116 - Annual Improvements to Ind AS (2021) The amendments remove the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives were described in that illustration. The Company does not expect the amendment to have any significant impact in its financial statements. # 6) Financial assets, financial liabilities and equity instruments Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. Integrated Annual Report 2021-22 Standalone Financial Statements | 342 # Notes forming part of Standalone Financial Statements # Cash and cash equivalents The Company considers all highly liquid investments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage. # Financial assets at amortised cost Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. # Financial assets at fair value through other comprehensive income Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets. The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in other comprehensive income. # Financial assets at fair value through profit or loss Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss. # Investment in subsidiaries Investment in subsidiaries are measured at cost less impairment loss, if any. # Financial liabilities Financial liabilities are measured at amortised cost using the effective interest method. |
# Equity instruments An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received net of direct issue cost. # Derivative accounting # Instruments in hedging relationship The Company designates certain foreign exchange forward, currency options and futures contracts as hedge instruments in respect of foreign exchange risks. These hedges are accounted for as cash flow hedges. The Company uses hedging instruments that are governed by the policies of the Company which are approved by the Board of Directors. The policies provide written principles on the use of such financial derivatives consistent with the risk management strategy of the Company. Standalone Financial Statements | 343 # Notes forming part of Standalone Financial Statements The hedge instruments are designated and documented as hedges at the inception of the contract. The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The effectiveness of hedge instruments to reduce the risk associated with the exposure being hedged is assessed and measured at inception and on an ongoing basis. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately reclassified in net foreign exchange gains in the statement of profit and loss. The effective portion of change in the fair value of the designated hedging instrument is recognised in the other comprehensive income and accumulated under the heading cash flow hedging reserve. The Company separates the intrinsic value and time value of an option and designates as hedging instruments only the change in intrinsic value of the option. The change in fair value of the intrinsic value and time value of an option is recognised in the other comprehensive income and accounted as a separate component of equity. Such amounts are reclassified into the statement of profit and loss when the related hedged items affect profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity till that time remains and is recognised in the statement of profit and loss when the forecasted transaction ultimately affects profit and loss. Any gain or loss is recognised immediately in the statement of profit and loss when the hedge becomes ineffective. # Instruments not in hedging relationship The Company enters into contracts that are effective as hedges from an economic perspective, but they do not qualify for hedge accounting. The change in the fair value of such instrument is recognised in the statement of profit and loss. # Impairment of financial assets (other than at fair value) The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal to the 12-months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. |
Integrated Annual Report 2021-22 Standalone Financial Statements | 344 # Notes forming part of Standalone Financial Statements # (a) Investments Investments consist of the following: # Investments - Non-current |(` crore)|As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Investment in subsidiaries| | | | |Fully paid equity shares (unquoted)| |2,405|2,405| |Investments designated at fair value through OCI| | | | File: AR_TCS_2021_2022.md |Fully paid equity shares (unquoted)|Taj Air Limited|19|19| |Less: Impairment in value of investments| |(19)|(19)| | | |2,405|2,405| # Investments - Current |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Investments carried at fair value through profit or loss| | | |Mutual fund units (quoted)|884|4,068| |Investments carried at fair value through OCI| | | |Government bonds and securities (quoted)|25,667|23,670| |Corporate bonds (quoted)|1,242|450| |Investments carried at amortised cost| | | |Certificate of deposits (quoted)|99|-| |Commercial papers (quoted)|381|136| |Treasury bills (quoted)|989|-| | |29,262|28,324| Government bonds and securities includes bonds pledged with bank for credit facility and with manager to the buy-back amounting to `3,560 crore and `1,650 crore as at March 31, 2022 and 2021, respectively. # Aggregate value of quoted and unquoted investments is as follows: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Aggregate value of quoted investments|29,262|28,324| |Aggregate value of unquoted investments (net of impairment)|2,405|2,405| |Aggregate market value of quoted investments|29,263|28,324| |Aggregate value of impairment of investments|19|19| # Market value of quoted investments carried at amortised cost is as follows: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Certificate of deposits|99|-| |Commercial papers|381|136| |Treasury bills|990|-| # Carrying value of investment in equity instruments is as follows: |In Numbers|Currency|Face value per share|Investment in subsidiaries|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---| |212,27,83,424|UYU|1|TCS Iberoamerica SA|461|461| |15,75,300|INR|10|APTOnline Limited|-|-| |1,300|EUR|-|Tata Consultancy Services Belgium|1|1| # Notes forming part of Standalone Financial Statements |In Numbers|Currency|Face value per share|Investment in subsidiaries|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---| |66,000|EUR|1,000|Tata Consultancy Services Netherlands BV|403|403| |1,000|SEK|100|Tata Consultancy Services Sverige AB|19|19| |1|EUR|-|Tata Consultancy Services Deutschland GmbH|2|2| |20,000|USD|10|Tata America International Corporation|453|453| |75,82,820|SGD|1|Tata Consultancy Services Asia Pacific Pte Ltd.|19|19| |3,72,58,815|AUD|1|TCS FNS Pty Limited|212|212| |10,00,001|GBP|1|Diligenta Limited|429|429| |1,000|USD|-|Tata Consultancy Services Canada Inc.|-*|-*| |100|CAD|70,653.61|Tata Consultancy Services Canada Inc.|31|31| |51,00,000|INR|10|C-Edge Technologies Limited|5|5| |8,90,000|INR|10|MP Online Limited|1|1| |1,40,00,000|ZAR|1|Tata Consultancy Services (Africa) (PTY) Ltd.|66|66| # Integrated Annual Report 2021-22 |In Numbers|Currency|Face value per share|Investment in subsidiaries|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---| |18,89,005|INR|10|MahaOnline Limited|2|2| |-|QAR|-|Tata Consultancy Services Qatar L.L.C.|2|2| |10,00,000|INR|100|TCS e-Serve International Limited|10|10| |1,00,500|GBP|0.00001|Tata Consultancy Services UK Limited|66|66| |2,50,00,000|EUR|1|Tata Consultancy Services Ireland Limited|224|224| |10,00,000|INR|10|TCS Foundation|-|-| # Equity instruments designated at fair value through OCI |In Numbers|Currency|Face value per share|Equity instruments designated at fair value|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---| |1,90,00,000|INR|10|Taj Air Limited|19|19| |Less : Impairment in value of investments| | | |(19)|(19)| | | | | |-|-| *Represents value less than `0.50 crore. # Notes: 1. Tata Consultancy Services Qatar S.S.C. renamed as Tata Consultancy Services Qatar L.L.C. 2. W12 Studios Limited renamed as Tata Consultancy Services UK Limited. |
# Notes forming part of Standalone Financial Statements # The movement in fair value of investments carried / designated at fair value through OCI is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|916|882| |Net gain / (loss) arising on revaluation of investments other than equities carried at fair value through other comprehensive income|(516)|51| |Deferred tax relating to net gain / (loss) arising on revaluation of investments other than equities carried at fair value through other comprehensive income|180|(17)| |Balance at the end of the year|580|916| # (b) Trade receivables - Billed Trade receivables - Billed (unsecured) consist of the following: # Trade receivables - Billed - Non-current | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Trade receivables - Billed|932|787| |Less: Allowance for doubtful trade receivables - Billed|(842)|(732)| |Considered good|90|55| # Ageing for trade receivables - non-current outstanding as at March 31, 2022 is as follows: |Particulars|Not due|Outstanding for following periods from due date of payment| |Total| | | | | |---|---|---|---|---|---|---|---|---| | | |Less than 6 months|6 months - 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |Trade receivables - Billed|Undisputed trade receivables - considered good|-|-|12|93|227|584|916| |Undisputed trade receivables - which have significant increase in credit risk|-|-|-|-|-|-|-| | |Undisputed trade receivables - credit impaired|-|-|-|-|-|-|-| | |Disputed trade receivables - considered good|-|-|-|-|-|16|16| | |Disputed trade receivables - which have significant increase in credit risk|-|-|-|-|-|-|-| | |Disputed trade receivables - credit impaired|-|-|-|-|-|-|-| | | |-|-|12|93|227|600|932| | |Less: Allowance for doubtful trade receivables - Billed| | | | | |(842)| | | | | | | | | |90| | | Trade receivables - Unbilled 53 143 Integrated Annual Report 2021-22 Standalone Financial Statements | 347 # Notes forming part of Standalone Financial Statements # Ageing for trade receivables - non-current outstanding as at March 31, 2021 |Particulars|Not due|Outstanding for following periods from due date of payment| |Total| | | | |---|---|---|---|---|---|---|---| | | |Less than 6 months|6 months - 1 year|1 - 2 years|2 - 3 years|More than 3 years| | |Trade receivables - Billed|-|-|17|154|86|514|771| |Undisputed trade receivables - considered good|-|-|17|154|86|514|771| |Undisputed trade receivables - which have significant increase in credit risk|-|-|-|-|-|-|-| |Undisputed trade receivables - credit impaired|-|-|-|-|-|-|-| |Disputed trade receivables - considered good|-|-|-|-|-|16|16| |Disputed trade receivables - which have significant increase in credit risk|-|-|-|-|-|-|-| |Disputed trade receivables - credit impaired|-|-|-|-|-|-|-| | |-|-|17|154|86|530|787| Less: Allowance for doubtful trade receivables - Billed (732) 55 Trade receivables - Unbilled 260 315 # Trade receivables - Billed - Current | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Trade receivables - Billed|30,010|25,361| |Less: Allowance for doubtful trade receivables - Billed|(173)|(183)| |Considered good|29,837|25,178| |Trade receivables - Billed|137|211| |Less: Allowance for doubtful trade receivables - Billed|(122)|(167)| |Credit impaired|15|44| | |29,852|25,222| Above balances of trade receivables - billed include balances with related parties (Refer note 20). |
# Notes forming part of Standalone Financial Statements # Ageing for trade receivables - current outstanding as at March 31, 2022 |Particulars|Not due|Outstanding for following periods from due date of payment| |Total| | | | | | |---|---|---|---|---|---|---|---|---|---| | | |Less than 6 months|6 months - 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | | |Trade receivables - Billed|23,985|4,069|903|594|224|211|29,986| | | |Undisputed trade receivables - considered good| | |-|-|-|-|-|-|-| |Undisputed trade receivables - which have significant increase in credit risk|-|-|-|57|6|67|130| | | |Undisputed trade receivables - credit impaired|-|-|-|-|-|24|24| | | |Disputed trade receivables - considered good| | |-|-|-|-|-|-|-| |Disputed trade receivables - which have significant increase in credit risk|-|-|-|-|-|7|7| | | |Total|23,985|4,069|903|651|230|309|30,147| | | |Less: Allowance for doubtful trade receivables - Billed| | | |(295)| | | | | | | | | | |29,852| | | | | | |Trade receivables - Unbilled| | | |6,250| | | | | | | | | | |36,102| | | | | | # Ageing for trade receivables - current outstanding as at March 31, 2021 |Particulars|Not due|Outstanding for following periods from due date of payment|Total| | | | | | |---|---|---|---|---|---|---|---|---| | | |Less than 6 months|6 months - 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |Trade receivables - Billed|18,966|4,714|437|792|279|148|25,336| | |Undisputed trade receivables - considered good| |-|-|-|-|-|-|-| |Undisputed trade receivables - which have significant increase in credit risk|-|4|81|12|74|33|204| | |Disputed trade receivables - considered good|-|5|-|-|15|5|25| | |Disputed trade receivables - which have significant increase in credit risk| |-|-|-|-|-|-|-| |Disputed trade receivables - credit impaired|-|-|-|-|-|7|7| | |Total|18,966|4,723|518|804|368|193|25,572| | |Less: Allowance for doubtful trade receivables - Billed| |(350)| | | | | | | | | |25,222| | | | | | | |Trade receivables - Unbilled| |5,399| | | | | | | | | |30,621| | | | | | | Integrated Annual Report 2021-22 Standalone Financial Statements | 349 # Notes forming part of Standalone Financial Statements # (c) Cash and cash equivalents Cash and cash equivalents consist of the following: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Balances with banks| | | |In current accounts|809|1,032| |In deposit accounts|7,388|77| |Cheques on hand|-*|-*| |Cash on hand|-*|-*| |Remittances in transit|-*|3| |Total|8,197|1,112| *Represents value less than `0.50 crore. # (d) Other balances with banks Other balances with banks consist of the following: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Earmarked balances with banks|195|182| |Short-term bank deposits|5,300|1,848| |Total|5,495|2,030| Earmarked balances with banks primarily relate to margin money for purchase of investments, margin money for derivative contracts, unclaimed dividends and balance in escrow account for buy-back of equity shares. # (e) Loans Loans (unsecured) consist of the following: # Loans - Non-current |(` crore)|As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Considered good|Loans and advances to employees|8|2| |Total|8|2| | # Loans - Current |(` crore)|As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Considered good|Inter-corporate deposits|5,386|10,291| |Loans and advances to employees|267|195| | |Credit impaired|Loans and advances to employees|22|15| |Less: Allowance on loans and advances to employees|(22)|(15)| | |Total|5,653|10,486| | Inter-corporate deposits placed with financial institutions yield fixed interest rate. |
# Notes forming part of Standalone Financial Statements # (f) Other financial assets Other financial assets consist of the following: # Other financial assets - Non-current | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Security deposits|613|632| |Others|13|13| |Total|626|645| # Other financial assets - Current | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Security deposits|161|143| |Fair value of foreign exchange derivative assets|388|495| |Interest receivable|597|566| |Others|286|159| |Total|1,432|1,363| # (g) Dues of small enterprises and micro enterprises The disclosure pursuant to the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED Act) for dues to micro enterprises and small enterprises as at March 31, 2022 and March 31, 2021 is as under: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Dues remaining unpaid to any supplier|Principal|-| | |Interest on the above|-| |Amount of interest paid in terms of section 16 of the MSMED Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year|33|39| |Amount of interest due and payable for the period of delay in making payment (which has been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act, 2006|-|-| |Amount of interest accrued and remaining unpaid|-|-| |Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23 of MSMED Act, 2006*|-|-| *Represents value less than `0.50 crore. Integrated Annual Report 2021-22 Standalone Financial Statements | 351 # Notes forming part of Standalone Financial Statements # (h) Trade payables Ageing for trade payables outstanding as at March 31, 2022 is as follows: |Particulars|Not due|Outstanding for following periods from due date of payment| | | |Total| | | | | | |---|---|---|---|---|---|---|---|---|---|---|---| | | |Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | | | | | |Trade payables|MSME*|2,673|2,541|46|27|80|5,367| | | | | |Others|Disputed dues - MSME*|-|-|-|-|-|-| | | | | |Disputed dues - Others|-|2,541|46|27|32|32|5,399| | | | | |Accrued expenses| | | | | | |4,683| | | | | Total: 10,082 # Other financial liabilities Other financial liabilities consist of the following: | | | | | | | |Other financial liabilities - Non-current| | | | |---|---|---|---|---|---|---|---|---|---|---| | | | | | | |(` crore)| | | | | |As at March 31, 2022|As at March 31, 2021| | | | | | | | | | | | | | | | | |Capital creditors| |289|-| | | | | | | |Others| | |229|228| |Total| | | | | | | | |518|228| # Other financial liabilities - Current | | | | | | |(` crore)| | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---| |As at March 31, 2022|As at March 31, 2021| | | | | | | | | | | | | | | | | | |Accrued payroll| | | |3,914| |3,029| | | | | | | |Unclaimed dividends| | | |46| |50| | | | | | | | |Fair value of foreign exchange derivative liabilities| | |128| |92| | | | | | | |Capital creditors| | | |723| |347| | | | | | | | |Liabilities towards customer contracts| | |972| |860| | | | | | | |Others| | | |43| |95| |Total| | | | | | | | | |5,826| |4,473| *MSME as per the Micro, Small and Medium Enterprises Development Act, 2006. Integrated Annual Report 2021-22 Standalone Financial Statements | 352 # Notes forming part of Standalone Financial Statements # (j) Financial instruments by category The carrying value of financial instruments by categories as at March 31, 2022 is as follows: | |Fair value through profit or loss|Fair value through other comprehensive income|Derivative instruments in hedging relationship|Derivative instruments not in hedging relationship|Amortised cost|Total carrying value| |---|---|---|---|---|---|---| |Financial assets|-|-|-|-|8,197|8,197| |Bank deposits|-|-|-|-|5,300|5,300| |Earmarked balances with banks|-|-|-|-|195|195| |Investments (other than in subsidiary)|884|26,909|-|-|1,469|29,262| |Trade receivables|Billed|-|-|-|29,942|29,942| |Unbilled|-|-|-|-|6,303|6,303| |Loans|-|-|-|-|5,661|5,661| |Other financial assets|-|-|124|264|1,670|2,058| | |884|26,909|124|264|58,737|86,918| Financial liabilities | |Fair value through profit or loss|Fair value through other comprehensive income|Derivative instruments in hedging relationship|Derivative instruments not in hedging relationship|Amortised cost|Total carrying value| |---|---|---|---|---|---|---| |Trade payables|-|-|-|-|10,082|10,082| |Lease liabilities|-|-|-|-|5,855|5,855| |Other financial liabilities|-|-|22|106|6,216|6,344| | |-|-|22|106|22,153|22,281| Loans include inter-corporate deposits of `5,386 crore, with original maturity period within 10 months. |
# Integrated Annual Report 2021-22 The carrying value of financial instruments by categories as at March 31, 2021 is as follows: | |Fair value through profit or loss|Fair value through other comprehensive income|Derivative instruments in hedging relationship|Derivative instruments not in hedging relationship|Amortised cost|Total carrying value| |---|---|---|---|---|---|---| |Financial assets|-|-|-|-|1,112|1,112| |Bank deposits|-|-|-|-|1,848|1,848| |Earmarked balances with banks|-|-|-|-|182|182| |Investments (other than in subsidiary)|4,068|24,120|-|-|136|28,324| |Trade receivables|Billed|-|-|-|25,277|25,277| |Unbilled|-|-|-|-|5,659|5,659| |Loans|-|-|-|-|10,488|10,488| |Other financial assets|-|-|163|332|1,513|2,008| | |4,068|24,120|163|332|46,215|74,898| Financial liabilities | |Fair value through profit or loss|Fair value through other comprehensive income|Derivative instruments in hedging relationship|Derivative instruments not in hedging relationship|Amortised cost|Total carrying value| |---|---|---|---|---|---|---| |Trade payables|-|-|-|-|7,962|7,962| |Lease liabilities|-|-|-|-|5,912|5,912| |Other financial liabilities|-|-|2|90|4,609|4,701| | |-|-|2|90|18,483|18,575| Loans include inter-corporate deposits of `10,291 crore, with original maturity period within 9 months. Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at March 31, 2022 and 2021, approximate the fair value due to their nature. Carrying amounts of bank deposits, earmarked balances with banks, other financial assets and other financial liabilities which are subsequently measured at amortised cost also approximate the fair value due to their nature in each of the periods presented. Fair value measurement of lease liabilities is not required. Fair value of investments carried at amortised cost is `1,470 crore and `136 crore as at March 31, 2022 and 2021, respectively. # Notes forming part of Standalone Financial Statements # (k) Fair value hierarchy The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels: - Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. - Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). - Level 3 - Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range. # Financial assets and liabilities measured at fair value |As at March 31, 2022|Level 1|Level 2|Level 3|Total| |---|---|---|---|---| |Certificate of deposits|99|-|-|99| |Commercial papers|381|-|-|381| |Treasury bills|990|-|-|990| |Fair value of foreign exchange derivative assets|-|388|-|388| |Financial liabilities|-|128|-|128| |Fair value of foreign exchange derivative liabilities|-|128|-|128| | | | | | | # Financial assets and liabilities measured at fair value |As at March 31, 2021|Level 1|Level 2|Level 3|Total| | |---|---|---|---|---|---| |Financial assets|Mutual fund units|4,068|-|-|4,068| |Equity shares|-|-|-|-| | |Government bonds and securities|23,670|-|-|23,670| | |Corporate bonds|450|-|-|450| | |Commercial papers|136|-|-|136| | |Fair value of foreign exchange derivative assets|-|495|-|495| | | | | | | | | # Notes forming part of Standalone Financial Statements # (l) Derivative financial instruments and hedging activity The Company's revenue is denominated in various foreign currencies. Given the nature of the business, a large portion of the costs are denominated in Indian Rupee. This exposes the Company to currency fluctuations. The Board of Directors has constituted a Risk Management Committee (RMC) to frame, implement and monitor the risk management plan of the Company which inter-alia covers risks arising out of exposure to foreign currency fluctuations. Under the guidance and framework provided by the RMC, the Company uses various derivative instruments such as foreign exchange forward, currency options and futures contracts in which the counter party is generally a bank. The following are outstanding currency options contracts, which have been designated as cash flow hedges: |Foreign currency|As at March 31, 2022|As at March 31, 2021| |---|---|---| |US Dollar|No. of contracts: 63 Notional amount of contracts (In million): 1,635 Fair value (` crore): 44|No. of contracts: 63 Notional amount of contracts (In million): 1,615 Fair value (` crore): 51| |Great Britain Pound|No. of contracts: 41 Notional amount of contracts (In million): 338 Fair value (` crore): 55|No. of contracts: 64 Notional amount of contracts (In million): 330 Fair value (` crore): 14| |Euro|No. of contracts: 53 Notional amount of contracts (In million): 382 Fair value (` crore): 25|No. of contracts: 60 Notional amount of contracts (In million): 346 Fair value (` crore): 78| |Australian Dollar|No. |
of contracts: 30 Notional amount of contracts (In million): 202 Fair value (` crore): (21)|No. of contracts: 38 Notional amount of contracts (In million): 206 Fair value (` crore): 16| |Canadian Dollar|No. of contracts: 25 Notional amount of contracts (In million): 137 Fair value (` crore): (1)|No. of contracts: 23 Notional amount of contracts (In million): 114 Fair value (` crore): 2| The movement in cash flow hedging reserve for derivatives designated as cash flow hedges is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Intrinsic value|Balance at the beginning of the year: 56 (Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: (636) Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: 139 Change in the fair value of effective portion of cash flow hedges: 599 Deferred tax on change in the fair value of effective portion of cash flow hedges: (131) Balance at the end of the year: 27|Balance at the beginning of the year: 45 (Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: (341) Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: 73 Change in the fair value of effective portion of cash flow hedges: 355 Deferred tax on change in the fair value of effective portion of cash flow hedges: (76) Balance at the end of the year: 56| |Time value|Balance at the beginning of the year: (27) (Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: 525 Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: (122) Change in the fair value of effective portion of cash flow hedges: (559) Deferred tax on change in the fair value of effective portion of cash flow hedges: 130 Balance at the end of the year: (53)|Balance at the beginning of the year: (68) (Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: 530 Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions: (125) Change in the fair value of effective portion of cash flow hedges: (477) Deferred tax on change in the fair value of effective portion of cash flow hedges: 113 Balance at the end of the year: (27)| The Company has entered into derivative instruments not in hedging relationship by way of foreign exchange forward, currency options and futures contracts. As at March 31, 2022 and 2021, the notional amount of outstanding contracts aggregated to `46,392 crore and `37,615 crore, respectively, and the respective fair value of these contracts have a net gain of `158 crore and `242 crore. Exchange gain of `645 crore and `490 crore on foreign exchange forward, currency options and futures contracts that do not qualify for hedge accounting have been recognised in the standalone statement of profit and loss for the years ended March 31, 2022 and 2021, respectively. # Notes forming part of Standalone Financial Statements Net foreign exchange gain include gain of `111 crore and loss of `189 crore transferred from cash flow hedging reserve for the years ended March 31, 2022 and 2021, respectively. Net loss on derivative instruments of `26 crore recognised in cash flow hedging reserve as at March 31, 2022, is expected to be transferred to the statement of profit and loss by March 31, 2023. The maximum period over which the exposure to cash flow variability has been hedged is through calendar year 2022. Following table summarises approximate gain / (loss) on the Company's other comprehensive income on account of appreciation / depreciation of the underlying foreign currencies: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |10% Appreciation of the underlying foreign currencies|(387)|(306)| |10% Depreciation of the underlying foreign currencies|2,034|1,906| # (m) Financial risk management The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity and interest rate risks, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company. |
# Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company's exposure to market risk is primarily on account of foreign currency exchange rate risk. # * Foreign currency exchange rate risk The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. Further, any movement in the functional currency of the various operations of the Company against major foreign currencies may impact the Company's revenue in international business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies. The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign. # Notes forming part of Standalone Financial Statements exchange rates shift of all the currencies by 10% against the functional currency of the Company. The following analysis has been worked out based on the net exposures of the Company as of the date of balance sheet which could affect the statements of profit and loss and other comprehensive income and equity. Further the exposure as indicated below is mitigated by some of the derivative contracts entered into by the Company as disclosed in note 6(l). File: AR_TCS_2021_2022.md # Unhedged Foreign Currency Exposure as at March 31, 2022 | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|515|89|147|1,709| |Net financial liabilities|(8,981)|(513)|(1,403)|(1,049)| 10% appreciation / depreciation of the functional currency of the Company with respect to various foreign currencies would result in increase / decrease in the Company's profit before taxes by approximately `949 crore for the year ended March 31, 2022. # Unhedged Foreign Currency Exposure as at March 31, 2021 | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|3,981|(9)|264|1,390| |Net financial liabilities|(3,053)|(564)|(608)|(774)| 10% appreciation / depreciation of the functional currency of the Company with respect to various foreign currencies would result in increase / decrease in the Company's profit before taxes by approximately `63 crore for the year ended March 31, 2021. # Interest Rate Risk The Company's investments are primarily in fixed rate interest bearing investments. Hence, the Company is not significantly exposed to interest rate risk. # Credit Risk Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. Inter-corporate deposits of `5,386 crore are with a financial institution having a high credit-rating assigned by credit-rating agencies. Bank deposits include an amount of `4,800 crore held with three Indian banks having high credit rating which is individually in excess of 10% or more of the Company's total bank deposits as at March 31, 2022. None of the other financial instruments of the Company result in material concentration of credit risk. # Exposure to Credit Risk The carrying amount of financial assets and contract assets represents the maximum credit exposure. The maximum exposure to credit risk was `90,388 crore and `77,949 crore as at March 31, 2022 and 2021, respectively, being the total of the carrying amount of balances with banks, bank deposits, investments excluding equity and preference investments, trade receivables, loans, contract assets and other financial assets. |
# Notes forming part of Standalone Financial Statements The Company's exposure to customers is diversified and no single customer contributes to more than 10% of outstanding trade receivable and contract assets as at March 31, 2022 and March 31, 2021. # * Geographic concentration of credit risk Geographic concentration of trade receivables (gross and net of allowances) and contract assets is as follows: | |As at March 31, 2022|As at March 31, 2022|As at March 31, 2021|As at March 31, 2021| |---|---|---| |Country|Gross%|Net%|Gross%|Net%| |United States of America|52.43|53.78|48.67|49.97| |India|12.73|10.68|15.32|13.27| |United Kingdom|16.47|16.84|17.05|17.42| Geographic concentration of trade receivables (gross and net of allowances) and contract assets is allocated based on the location of the customers. The allowance for lifetime expected credit loss on trade receivables for the years ended March 31, 2022 and 2021 was `96 crore and `176 crore, respectively. The reconciliation of allowance for doubtful trade receivables is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|1,082|938| |Change during the year|96|176| |Bad debts written off|(39)|(30)| |Translation Exchange difference|(2)|(2)| |Balance at the end of the year|1,137|1,082| # Liquidity risk Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generated sufficient cash flows from operations to meet its financial obligations including lease liabilities as and when they fall due. The tables below provide details regarding the contractual maturities of significant financial liabilities as at: | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities| | | | | | |Trade payables|10,082|-|-|-|10,082| |Borrowings|-|-|-|-|-| |Lease liabilities|1,345|1,186|2,460|2,732|7,723| |Other financial liabilities|5,721|294|228|5|6,248| | |17,148|1,480|2,688|2,737|24,053| |Derivative financial liabilities|128|-|-|-|128| | |17,276|1,480|2,688|2,737|24,181| March 31, 2021 | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities| | | | | | |Trade payables|7,962|-|-|-|7,962| |Lease liabilities|1,239|1,157|2,590|3,098|8,084| |Other financial liabilities|4,381|-|228|-|4,609| | |13,582|1,157|2,818|3,098|20,655| |Derivative financial liabilities|92|-|-|-|92| | |13,674|1,157|2,818|3,098|20,747| # Notes forming part of Standalone Financial Statements # (n) Equity instruments The authorised, issued, subscribed and fully paid up share capital consist of the following: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Authorised| | | |460,05,00,000 equity shares of `1 each|460|460| |(March 31, 2021: 460,05,00,000 equity shares of `1 each)| | | |105,02,50,000 preference shares of `1 each|105|105| |(March 31, 2021: 105,02,50,000 preference shares of `1 each)| | | | |565|565| |Issued, Subscribed and Fully paid up| | | |365,90,51,373 equity shares of `1 each|366|370| |(March 31, 2021: 369,90,51,373 equity shares of `1 each)| | | | |366|370| The Company's objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. The Company is not subject to any externally imposed capital requirements. The Board of Directors at its meeting held on January 12, 2022, approved a proposal to buy-back upto 4,00,00,000 equity shares of the Company for an aggregate amount not exceeding `18,000 crore, being 1.08% of the total paid up equity share capital at `4,500 per equity share. The shareholders approved the same on February 12, 2022, by way of a special resolution through postal ballot. A Letter of Offer was made to all eligible shareholders. The Company bought back 4,00,00,000 equity shares out of the shares that were tendered by eligible shareholders and extinguished the equity shares on March 29, 2022. Capital redemption reserve was created to the extent of share capital extinguished (`4 crore). The excess cost of buy-back of `18,049 crore (including `49 crore towards transaction cost of buy-back) over par value of shares and corresponding tax on buy-back of `4,192 crore were offset from retained earnings. # I. Reconciliation of number of shares | |As at March 31, 2022| |As at March 31, 2021| | |---|---|---|---|---| |Number of shares|Amount (` crore)|Number of shares|Amount (` crore)| | |Equity shares| | | | | |Opening balance|369,90,51,373|370|375,23,84,706|375| |Shares extinguished on buy-back|(4,00,00,000)|(4)|(5,33,33,333)|(5)| |Closing balance|365,90,51,373|366|369,90,51,373|370| # II. Rights, preferences and restrictions attached to 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 and carry a right to dividend. |
The dividend proposed by the Board of Directors is subject to the # Notes forming part of Standalone Financial Statements 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. # III. Shares held by Holding company, its Subsidiaries and Associates | |As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Equity shares| | | | |Holding company|264,43,17,117 equity shares (March 31, 2021: 266,91,25,829 equity shares) are held by Tata Sons Private Limited|264|267| |Subsidiaries and Associates of Holding company|7,220 equity shares (March 31, 2021: 7,220 equity shares) are held by Tata Industries Limited*|-|-| | |10,14,172 equity shares (March 31, 2021: 10,23,685 equity shares) are held by Tata Investment Corporation Limited*|-|-| | |46,798 equity shares (March 31, 2021: 46,798 equity shares) are held by Tata Steel Limited*|-|-| | |766 equity shares (March 31, 2021: 766 equity shares) are held by The Tata Power Company Limited*|-|-| | | |264|267| *Equity shares having value less than `0.50 crore. # IV. Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company | |As at March 31, 2022|As at March 31, 2021| | |---|---|---|---| |Equity shares|Tata Sons Private Limited, the holding company|264,43,17,117|266,91,25,829| |% of shareholding| |72.27%|72.16%| # V. Equity shares movement during the 5 years preceding March 31, 2022 * Equity shares issued as bonus The Company allotted 191,42,87,591 equity shares as fully paid up bonus shares by capitalisation of profits transferred from retained earnings amounting to `86 crore and capital redemption reserve amounting to `106 crore in three month period ended June 30, 2018, pursuant to an ordinary resolution passed after taking the consent of shareholders through postal ballot. * Equity shares extinguished on buy-back The Company bought back 4,00,00,000 equity shares for an aggregate amount of `18,000 crore being 1.08% of the total paid up equity share capital at `4,500 per equity share. The equity shares bought back were extinguished on March 29, 2022. The Company bought back 5,33,33,333 equity shares for an aggregate amount of `16,000 crore being 1.42% of the total paid up equity share capital at `3,000 per equity share. The equity shares bought back were extinguished on January 6, 2021. # Notes forming part of Standalone Financial Statements The Company bought back 7,61,90,476 equity shares for an aggregate amount of `16,000 crore being 1.99% of the total paid up equity share capital at `2,100 per equity share. The equity shares bought back were extinguished on September 26, 2018. The Company bought back 5,61,40,350 equity shares for an aggregate amount of `16,000 crore being 2.85% of the total paid up equity share capital at `2,850 per equity share. The equity shares bought back were extinguished on June 7, 2017. # VI. Disclosure of Shareholding of Promoters Disclosure of shareholding of promoters as at March 31, 2022 is as follows: |Promoter name|Shares held by promoters|%| | | | |---|---|---|---|---|---| | |As at March 31, 2022| |As at March 31, 2021| |Change during the year| | |No. of shares|% of total shares|No. of shares|% of total shares| | |Tata Sons Private Limited|264,43,17,117|72.27%|266,91,25,829|72.16%|0.11%| |Total|264,43,17,117|72.27%|266,91,25,829|72.16%|0.11%| Disclosure of shareholding of promoters as at March 31, 2021 is as follows: |Promoter name|Shares held by promoters| |%| | | |---|---|---|---|---|---| | |As at March 31, 2021| |As at March 31, 2020| |Change during the year| | |No. of shares|% of total shares|No. of shares|% of total shares| | |Tata Sons Private Limited|266,91,25,829|72.16%|270,24,50,947|72.02%|0.14%| |Total|266,91,25,829|72.16%|270,24,50,947|72.02%|0.14%| # 7) Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Company as a lessee The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. |
The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use asset is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. # Notes forming part of Standalone Financial Statements Payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease-by-lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss. The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term. # Company as a lessor At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor's net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease. If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract. # The details of the right-of-use assets held by the Company is as follows: | |Additions for the year ended March 31, 2022|Net carrying amount as at March 31, 2022| |---|---|---| |Leasehold land|100|774| |Buildings|779|4,860| |Leasehold improvement|-|4| |Computer equipment|3|66| |Software licences|145|133| |Vehicles*|-|-| |Total|Total|5,837| *Represents value less than `0.50 crore. |
# Notes forming part of Standalone Financial Statements |Additions for the year ended|Net carrying amount as at| | | |---|---|---|---| | |March 31, 2021|March 31, 2021| | |Leasehold land| |-|682| |Buildings| |840|5,083| |Leasehold improvement| |6|6| |Computer equipment| |81|79| |Software licences| |26|25| |Vehicles| |1|1| |Total| |954|5,876| # Depreciation on right-of-use assets is as follows: | |Year ended|Year ended| | |---|---|---|---| | |March 31, 2022| |March 31, 2021| |Leasehold land| |9|8| |Buildings| |991|995| |Leasehold improvement| |3|3| |Computer equipment| |15|3| |Software licences| |38|1| |Vehicles| |1|1| |Total| |1,057|1,011| # Integrated Annual Report 2021-22 Interest on lease liabilities is `451 crore and `450 crore for the years ended March 31, 2022 and 2021, respectively. The Company incurred `162 crore and `189 crore for the years ended March 31, 2022 and 2021, respectively, towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is `1,561 crore and `1,619 crore for the years ended March 31, 2022 and 2021, respectively, including cash outflow for short term and low value leases. The Company has lease term extension options that are not reflected in the measurement of lease liabilities. The present value of future cash outflows for such extension periods is `722 crore and `660 crore as at March 31, 2022 and 2021, respectively. Lease contracts entered by the Company majorly pertains for buildings taken on lease to conduct its business in the ordinary course. The Company does not have any lease restrictions and commitment towards variable rent as per the contract. # 8) Non-financial assets and non-financial liabilities # (a) Property, plant and equipment Property, plant and equipment are stated at cost comprising of purchase price and any initial directly attributable cost of bringing the asset to its working condition for its intended use, less accumulated depreciation (other than freehold land) and impairment loss, if any. Depreciation is provided for property, plant and equipment on a straight-line basis so as to expense the cost less residual value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual # Notes forming part of Standalone Financial Statements Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use. # The estimated useful lives are as mentioned below: |Type of asset|Useful lives| |---|---| |Buildings|20 years| |Leasehold improvements|Lease term| |Plant and equipment|10 years| |Computer equipment|4 years| |Vehicles|4 years| |Office equipment|2-5 years| |Electrical installations|4-10 years| |Furniture and fixtures|5 years| Property, plant and equipment with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss. Integrated Annual Report 2021-22 Standalone Financial Statements | 364 # Notes forming part of Standalone Financial Statements # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and equipment|Computer equipment|Vehicles|Office installations|Electrical fixtures|Furniture|Total| |---|---|---|---|---|---|---|---|---|---|---| |Cost as at April 1, 2021|323|7,688|1,817|718|8,781|36|2,302|1,883|1,509|25,057| |Additions|-|51|86|35|1,606|-|160|33|41|2,012| |Disposals|-|(2)|(18)|(1)|(462)|(1)|(67)|(44)|(38)|(633)| |Cost as at March 31, 2022|323|7,737|1,885|752|9,925|35|2,395|1,872|1,512|26,436| |Accumulated depreciation as at April 1, 2021|-|(2,897)|(1,108)|(293)|(6,349)|(31)|(2,001)|(1,270)|(1,287)|(15,236)| |Depreciation|-|(391)|(131)|(73)|(1,172)|(3)|(151)|(140)|(99)|(2,160)| |Disposals|-|2|18|-|460|1|67|43|38|629| |Accumulated depreciation as at March 31, 2022|-|(3,286)|(1,221)|(366)|(7,061)|(33)|(2,085)|(1,367)|(1,348)|(16,767)| |Net carrying amount as at March 31, 2022|323|4,451|664|386|2,864|2|310|505|164|9,669| |Capital work-in-progress*|1,146|1,146|1,146|1,146|1,146|1,146|1,146|1,146|1,146|1,146| |Total|10,815|10,815|10,815|10,815|10,815|10,815|10,815|10,815|10,815|10,815| *`2,012 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2022. # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and equipment|Computer equipment|Vehicles|Office installations|Electrical fixtures|Furniture|Total| |---|---|---|---|---|---|---|---|---|---|---| |Cost as at April 1, 2020|323|7,628|1,824|667|7,273|39|2,263|1,882|1,510|23,409| |Additions|-|71|53|51|1,610|2|77|28|29|1,921| |Disposals|-|(11)|(60)|-|(102)|(5)|(38)|(27)|(30)|(273)| |Cost as at March 31, 2021|323|7,688|1,817|718|8,781|36|2,302|1,883|1,509|25,057| |Accumulated depreciation as at April 1, 2020|-|(2,518)|(1,042)|(224)|(5,536)|(32)|(1,868)|(1,152)|(1,202)|(13,574)| |Depreciation|-|(387)|(126)|(69)|(909)|(4)|(170)|(143)|(115)|(1,923)| |Disposals|-|8|60|-|96|5|37|25|30|261| |Accumulated depreciation as at March 31, 2021|-|(2,897)|(1,108)|(293)|(6,349)|(31)|(2,001)|(1,270)|(1,287)|(15,236)| |Net carrying amount as at March 31, 2021|323|4,791|709|425|2,432|5|301|613|222|9,821| |Capital work-in-progress*|861|861|861|861|861|861|861|861|861|861| |Total|10,682|10,682|10,682|10,682|10,682|10,682|10,682|10,682|10,682|10,682| *`1,921 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2021. |
Integrated Annual Report 2021-22 Standalone Financial Statements | 365 # Notes forming part of Standalone Financial Statements # Capital work-in-progress # * Capital work-in-progress ageing Ageing for capital work-in-progress as at March 31, 2022 is as follows: |Capital work-in-progress| |Amount in capital work-in-progress for a period of| | |Total| |---|---|---|---|---|---| |Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |Projects in progress|639|97|37|373|1,146| Ageing for capital work-in-progress as at March 31, 2021 is as follows: |Capital work-in-progress| |Amount in capital work-in-progress for a period of| | |Total| |---|---|---|---|---|---| |Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |Projects in progress|423|60|41|337|861| # * Project execution plans are modulated basis capacity requirement assessment on an annual basis and all the projects are executed as per rolling annual plan. # (b) Intangible assets Intangible assets purchased are measured at cost as at the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any. Intangible assets consist of rights under licensing agreement and software licences which are amortised over licence period which equates the economic useful life ranging between 2-5 years on a straight-line basis over the period of its economic useful life. Intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss. Intangible assets consist of the following: |Rights under licensing agreement and software licences|(` crore)| |---|---| |Cost as at April 1, 2021|580| |Additions|961| |Disposals / Derecognised|(11)| |Cost as at March 31, 2022|1,530| |Accumulated amortisation as at April 1, 2021|(218)| |Amortisation|(305)| |Disposals / Derecognised|11| |Accumulated amortisation as at March 31, 2021|(512)| |Net carrying amount as at March 31, 2022|1,018| # Notes forming part of Standalone Financial Statements |(` crore)|(c) Other assets| |---|---| |Rights under licensing agreement and software licences| | |Cost as at April 1, 2020|401| |Additions|242| |Disposals / Derecognised|(63)| |Cost as at March 31, 2021|580| |Accumulated amortisation as at April 1, 2020|(162)| |Amortisation|(119)| |Disposals / Derecognised|63| |Accumulated amortisation as at March 31, 2021|(218)| |Net carrying amount as at March 31, 2021|362| The estimated amortisation for years subsequent to March 31, 2022 is as follows: |(` crore)|Year ending March 31, Amortisation expense| |---|---| |2023|421| |2024|375| |2025|203| |2026|19| | |1,018| # Other assets consist of the following: |Other assets - Non-current| | | |---|---|---| |As at March 31, 2022|As at March 31, 2021| | |Considered good| | | |Capital advances|75|65| |Advances to related parties|23|33| |Contract assets|136|120| |Prepaid expenses|1,197|527| |Contract fulfillment costs|81|137| |Others|285|391| | |1,797|1,273| Advances to related parties, considered good, comprise: |Entity|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Voltas Limited|-*|2| |Tata Realty and Infrastructure Ltd|-*|-*| |Tata Projects Limited|23|30| |Titan Engineering and Automation Limited|-*|-*| *Represents value less than `0.50 crore. # Notes forming part of Standalone Financial Statements # Other assets - Current Contract fulfillment costs of `564 crore and `358 crore for the years ended March 31, 2022 and 2021, respectively, have been amortised in the standalone statement of profit and loss. Refer note 10 for the changes in contract asset. | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Considered good| | | |Advance to suppliers|117|83| |Advance to related parties|8|10| |Contract assets|3,334|2,931| |Prepaid expenses|2,735|4,260| |Prepaid rent|7|6| |Contract fulfillment costs|616|534| |Indirect taxes recoverable|1,001|1,172| |Others|214|221| # Considered doubtful |Advance to suppliers|2|3| |---|---|---| |Other advances|2|2| |Less: Allowance on doubtful assets|(4)|(5)| Total: 8,032 (March 31, 2022) and 9,217 (March 31, 2021) # Advance to related parties, considered good comprise: |The Titan Company Limited|-|2| |---|---|---| |Tata AIG General Insurance Company Limited|1|1| |Tata Sons Private Limited|7|7| File: AR_TCS_2021_2022.md Non-current - Others includes advance of `271 crore and `369 crore towards acquiring right-of-use of leasehold land as at March 31, 2022 and 2021, respectively. |
# Notes forming part of Standalone Financial Statements # (e) Other liabilities Other liabilities consist of the following: |Other liabilities - Current| | | | | | |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---|---|---|---|---| |Advance received from customers|473|156| | | | | | | | |Indirect taxes payable and other statutory liabilities|2,271|2,537| | | | | | | | |Tax liability on buy-back of equity shares*|4,192|-| | | | | | | | |Others|97|27| | | | | | | | |Total|7,033|2,720| | | | | | | | *Refer note 6(n). # 9) Other equity Other equity consist of the following: | | | | | |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---|---|---| | | | |Capital reserve*|-|-| | | |Capital redemption reserve| | |Opening balance|13|8| | | | | | |Transfer from retained earnings|4|5| | | |Total| | | |17| | | | |Special Economic Zone re-investment reserve| | |Opening balance|2,538|1,594| | | | | | |Transfer from retained earnings|9,407|5,058| | | | | | |Transfer to retained earnings|(4,658)|(4,114)| | | |Total| | | |7,287| | | | # (f) Provisions Provisions consist of the following: |Provisions - Current| | | | |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---|---|---|---|---|---| |Provision towards legal claim (Refer note 19)|1,249|1,211| | | | | | |Provision for foreseeable loss|125|127| | | | | | |Other provisions|3|12| | | | | | |Total|1,377|1,350| | | | | | # Retained earnings |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Opening balance|70,928|71,532| |Profit for the year|38,187|30,960| |Remeasurement of defined employee benefit plans|141|(13)| |Expenses for buy-back of equity shares1|(49)|(31)| |Tax on buy-back of equity shares1|(4,192)|(3,726)| |Buy-back of equity shares1|(17,996)|(15,995)| |Transfer from Special Economic Zone re-investment reserve|4,658|4,114| |Total|91,677|86,841| # Notes forming part of Standalone Financial Statements | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Less: Appropriations| | | |Dividend on equity shares|13,317|10,850| |Transfer to capital redemption reserve1|4|5| |Transfer to Special Economic Zone re-investment reserve|9,407|5,058| |Investment revaluation reserve| | | |Opening balance|916|882| |Change during the year (net)|(336)|34| | |580|916| |Cash flow hedging reserve (Refer note 6(l))| | | |Opening balance|29|(23)| |Change during the year (net)|(55)|52| | |(26)|29| | |76,807|74,424| *Represents value less than `0.50 crore. 1Refer Note 6(n). # 10) Revenue recognition The Company earns revenue primarily from providing IT services, consulting and business solutions. The Company offers a consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services. - Revenue from time and material and job contracts is recognised on output basis measured by units delivered, efforts expended, number of transactions processed, etc. - Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight-lined over the period of performance. - In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method ('POC method') of accounting with contract costs incurred determining the degree of completion of the performance obligation. The contract costs used in computing the revenues include cost of fulfilling warranty obligations. - Revenue from the sale of distinct internally developed software and manufactured systems and third party software is recognised upfront at the point in time when the system / software is delivered to the customer. In cases where implementation and / or customisation services rendered significantly modifies or customises the software, these services and software are accounted for as a single performance obligation and revenue is recognised over time on a POC method. - Revenue from the sale of distinct third party hardware is recognised at the point in time when control is transferred to the customer. - The solutions offered by the Company may include supply of third-party equipment or software. In such cases, revenue for supply of such third party products are recorded at gross or net basis depending on whether # Notes forming part of Standalone Financial Statements The Company is acting as the principal or as an agent of the customer. The Company recognises revenue in the gross amount of consideration when it is acting as a principal and at net amount of consideration when it is acting as an agent. |
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. The Company's contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products/services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables. Judgement is also required to determine the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations. The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc. Revenue from subsidiaries is recognised based on transaction price which is at arm's length. Contract fulfilment costs are generally expensed as incurred except for certain software licence costs which meet the criteria for capitalisation. Such costs are amortised over the contractual period or useful life of licence, whichever is less. The assessment of this criteria requires the application of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered. Contract assets are recognised when there are excess of revenues earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms. Unearned and deferred revenue ("contract liability") is recognised when there are billings in excess of revenues. Standalone Financial Statements | 371 # Notes forming part of Standalone Financial Statements The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period. In accordance with Ind AS 37, the Company recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received. Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for. The Company disaggregates revenue from contracts with customers by nature of services, industry verticals and geography. |
# Revenue disaggregation by industry vertical is as follows: | | | |(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---|---|---|---| | |Banking, Financial Services and Insurance|58,614|51,189| | | | |Manufacturing|14,576|11,747| | | | |Retail and Consumer Business|26,966|22,219| | | | |Communication, Media and Technology|28,778|24,243| | | | |Life Sciences and Healthcare|18,341|14,920| | | | |Others|13,066|11,645| | | |Total|1,60,341|1,60,341|1,35,963| | | | # Revenue disaggregation by geography is as follows: | | | |(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---|---|---|---| | |Americas| | | | | |North America| |90,630|76,510| | | | |Latin America|314|288| | | | |Europe| | | | | | |United Kingdom|27,595|22,913| | | | |Continental Europe|17,595|15,364| | | | |Asia Pacific| | | | | | |India|9,547|8,102| | | | |Middle East and Africa|3,482|2,947| | | |Total|1,60,341|1,60,341|1,35,963| | | | Geographical revenue is allocated based on the location of the customers. # Notes forming part of Standalone Financial Statements # Information about major customers No single customer represents 10% or more of the Company's total revenue during the years ended March 31, 2022 and 2021. While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially) satisfied performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts. Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws etc). The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is ₹93,546 crore out of which 56.71% is expected to be recognised as revenue in the next year and the balance thereafter. No consideration from contracts with customers is excluded from the amount mentioned above. # Changes in contract assets are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|3,051|3,486| |Invoices raised that were included in the contract assets balance at the beginning of the year|(2,464)|(2,795)| |Increase due to revenue recognised during the year, excluding amounts billed during the year|2,828|2,332| |Translation exchange difference|55|28| |Balance at the end of the year|3,470|3,051| # Changes in unearned and deferred revenue are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Balance at the beginning of the year|3,161|2,915| |Revenue recognised that was included in the contract liability balance at the beginning of the year|(2,311)|(2,388)| |Increase due to invoicing during the year, excluding amounts recognised as revenue during the year|2,735|2,602| |Translation exchange difference|(12)|32| |Balance at the end of the year|3,573|3,161| Integrated Annual Report 2021-22 Standalone Financial Statements | 373 # Notes forming part of Standalone Financial Statements # Reconciliation of revenue recognised with the contracted price is as follows: | | | | | |(` crore)|(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---|---|---|---|---|---|---| |Contracted price|1,62,898|1,38,292| | | | | | | |Reductions towards variable consideration components|(2,557)|(2,329)| | | | | | | |Revenue recognised|1,60,341|1,35,963| | | | | | | The reduction towards variable consideration comprises of volume discounts, service level credits, etc. # Other income Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method. Other income consist of the following: |(` crore)|Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Interest income|2,555|2,383| |Dividend income|3,548|2,213| |Net gain on disposal / fair valuation of investments carried at fair value through profit or loss|186|193| |Net gain on disposal of property, plant and equipment|25|19| |Net gain on lease modification|2|89| # Employee benefits For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. |
Past service cost, both vested and unvested, is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits. # Notes forming part of Standalone Financial Statements The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations 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. The Company provides benefits such as gratuity, pension and provident fund (Company managed fund) to its employees which are treated as defined benefit plans. # Defined contribution plans Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits. The Company provides benefits such as superannuation and foreign defined contribution plans to its employees which are treated as defined contribution plans. # Short-term employee benefits All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia are recognised in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. # Compensated absences Compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as undiscounted liability at the balance sheet date. 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. # Employee benefit expenses consist of the following: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Salaries, incentives and allowances|73,115|63,006| |Contributions to provident and other funds|5,734|4,321| |Staff welfare expenses|2,248|1,719| |Total|81,097|69,046| # Employee benefit obligations consist of the following: # Employee benefit obligations - Non-current | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Foreign defined benefit plans|25|19| |Other employee benefit obligations|78|89| |Total|103|108| # Notes forming part of Standalone Financial Statements # Employee benefit obligations - Current Employee benefit plans consist of the following: |(` crore)|As at March 31, 2022|As at March 31, 2021| |---|---|---| |Compensated absences|2,802|2,558| |Other employee benefit obligations|42|40| |Total|2,844|2,598| Gratuity and pension In accordance with Indian law, the Company operates a scheme of gratuity which is a defined benefit plan. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days' salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The Company manages the plan through a trust. Trustees administer contributions made to the trust. Certain overseas branches of the Company also provide for retirement benefit plans in accordance with the local laws. |
Integrated Annual Report 2021-22 Standalone Financial Statements | 376 # Notes forming part of Standalone Financial Statements The following table sets out the details of the defined benefit retirement plans and the amounts recognised in the financial statements: |Change in benefit obligations| | |As at March 31, 2022| | | | |As at March 31, 2021| | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans Funded|Foreign plans Unfunded| | | |Total|Domestic plans|Foreign plans Funded|Foreign plans Unfunded|Total| | |Benefit obligations, beginning of the year|4,313|1| | |19|4,333|3,636|2| |16|3,654| |Translation exchange difference| |-|-| |1|1|-|-|-|-| | |Changes due to inter-company transfers| |(3)|-|-|(3)|-|-|-|-| | | |Service cost|536| |-|5| |541|460|-|4| |464| |Interest cost|296| |-|-|296| |244|-|-|244| | |Remeasurement of the net defined benefit liability|(190)| |-| |5|(185)|135|-|-|135| | |Benefits paid|(488)| |-| |(5)|(493)|(162)|(1)|(1)| |(164)| |Benefit obligations, end of the year|4,464| |1| |25|4,490|4,313|1| |19|4,333| |Change in plan assets| | |As at March 31, 2022| | | | |As at March 31, 2021| | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans Funded|Foreign plans Unfunded| | | |Total|Domestic plans|Foreign plans Funded|Foreign plans Unfunded|Total| | |Fair value of plan assets, beginning of the year|4,704| |1| |-|4,705|3,641|2|-| |3,643| |Changes due to inter-company transfers|(3)|-|-|(3)|-|-|-|-| | | | |Interest income|334| |-|-|334| |269|-|-|269| | |Employers' contributions|975| |-|-|975| |837|-|-|837| | |Benefits paid|(488)| |-|-|(488)| |(162)|(1)|-| |(163)| |Remeasurement - return on plan assets excluding amount included in interest income|(5)|-|-|(5)| | |119|-|-|119| | |Fair value of plan assets, end of the year|5,517|1| | |-|5,518|4,704|1|-| |4,705| Integrated Annual Report 2021-22 Standalone Financial Statements | 377 # Notes forming part of Standalone Financial Statements |(` crore)| |As at March 31, 2022| | | |As at March 31, 2021| | | |---|---|---|---|---|---|---|---|---| |Domestic plans Funded|Foreign plans Funded|Foreign plans Unfunded| |Total|Domestic plans Funded|Foreign plans Funded|Foreign plans Unfunded|Total| |Funded status|-|-|(25)|(25)|-|-|(19)|(19)| |Surplus of plan assets over obligations|1,053|-|-|1,053|391|-|-|391| | |1,053|-|(25)|1,028|391|-|(19)|372| |(` crore)| |As at March 31, 2022| | | |As at March 31, 2021| | | | |---|---|---|---|---|---|---|---|---|---| |Domestic plans Funded|Foreign plans Funded|Foreign plans Unfunded| |Total|Domestic plans Funded|Foreign plans Funded|Foreign plans Unfunded|Total| | |Category of assets|Corporate bonds|1,696|-|-|1,696|1,408|-|-|1,408| | |Equity instruments|66|-|-|66|29|-|-|29| | |Government bonds and securities|2,624|-|-|2,624|2,257|-|-|2,257| | |Insurer managed funds|981|1|-|982|909|1|-|910| | |Bank balances|5|-|-|5|2|-|-|2| | |Others|145|-|-|145|99|-|-|99| | |Total|5,517|1|-|5,518|4,704|1|-|4,705| Integrated Annual Report 2021-22 Standalone Financial Statements | 378 # Notes forming part of Standalone Financial Statements Net periodic gratuity cost, included in employee cost consists of the following components: |(` crore)| | |As at March 31, 2022| | | | | | |As at March 31, 2021| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans Funded|Foreign plans Unfunded| | | |Total|Domestic plans|Foreign plans Funded|Foreign plans Unfunded|Total| | | | |Service cost|536| |-|5| |541| |460|-|4| | |464| |Net interest on net defined benefit asset|(38)| |-|-|(38)| | |(25)|-|-|(25)| | | |Net periodic gratuity / pension cost|498| |-| |5|503| |435|-|4| | |439| |Actual return on plan assets|329| |-|-|329| | |388|-|-|388| | | Remeasurement of the net defined benefit (asset) / liability: |(` crore)| | |As at March 31, 2022| | |As at March 31, 2021| | | | |---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans Funded|Foreign plans Unfunded| |Total|Domestic plans|Foreign plans Funded|Foreign plans Unfunded|Total| | |Actuarial (gains) and losses arising from changes in demographic assumptions|(20)|-|2|(18)|Actuarial losses arising from changes in demographic assumptions|24|-|-|24| |Actuarial gains arising from changes in financial assumptions|(165)|-|(1)|(166)|Actuarial gains arising from changes in financial assumptions|(32)|-|-|(32)| |Actuarial (gains) and losses arising from changes in experience adjustments|(5)|-|4|(1)|Actuarial losses arising from changes in experience adjustments|143|-|-|143| |Remeasurement of the net defined benefit liability|(190)|-|5|(185)|Remeasurement of the net defined benefit liability|135|-|-|135| |Remeasurement - return on plan assets excluding amount included in interest income|5|-|-|5|Remeasurement - return on plan assets excluding amount included in interest income|(119)|-|-|(119)| (185) - (180) 16 - - 16 Integrated Annual Report 2021-22 Standalone Financial Statements | 379 # Notes forming part of Standalone Financial Statements The assumptions used in accounting for the defined benefit plan are set out below: | |As at March 31, 2022|As at March 31, 2022|As at March 31, 2021|As at March 31, 2021| |---|---|---| | |Domestic plans|Foreign plans|Domestic plans|Foreign plans| |Discount rate|7.00%|1.50%-2.70%|6.50%|0.50%-2.00%| |Rate of increase in compensation levels of covered employees|6.00%|2.24%-3.80%|6.00%|1.83%-3.45%| |Rate of return on plan assets|7.00%|1.50%-2.70%|6.50%|0.50%-2.00%| |Weighted average duration of defined benefit obligations|8 years|3-6.4 years|10 years|3-6.9 years| Future mortality assumptions are taken based on the published statistics by the Insurance Regulatory and Development Authority of India. The expected benefits are based on the same assumptions as are used to measure the Company's defined benefit plan obligations as at March 31, 2022. The Company does not expect to contribute to defined benefit plan obligations funds for year ending March 31, 2023 in view of adequate surplus plan assets as at March 31, 2022. |
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. # If the discount rate increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: | |As at|As at| |---|---| | |March 31, 2022|March 31, 2021| |Increase of 0.50%|(159)|(190)| |Decrease of 0.50%|170|206| # If the expected salary growth increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: | |As at|As at| |---|---| | |March 31, 2022|March 31, 2021| |Increase of 0.50%|171|206| |Decrease of 0.50%|(161)|(192)| # Notes forming part of Standalone Financial Statements The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. Each year an Asset-Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study. The defined benefit obligations shall mature after the year ended March 31, 2022 as follows: |Year ending March 31,|Defined benefit obligations (` crore)| |---|---| |2023|455| |2024|377| |2025|396| |2026|386| |2027|392| |2028-2032|1,909| In accordance with Indian law, all eligible employees of the Company in India are entitled to receive benefits under the provident fund plan in which both the employee and employer (at a determined rate) contribute monthly to a trust set up by the Company to manage the investments and distribute the amounts entitled to employees. This plan is a defined benefit plan as the Company is obligated to provide its members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Company's contribution is transferred to Government administered pension fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in statement of profit and loss under employee benefit expenses. In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund. The details of fund and plan assets are given below: | |As at March 31, 2022 (` crore)|As at March 31, 2021 (` crore)| |---|---|---| |Fair value of plan assets|22,814|20,003| |Present value of defined benefit obligations|(22,814)|(20,003)| |Net excess / (shortfall)|-|-| # Notes forming part of Standalone Financial Statements The plan assets have been primarily invested in government securities and corporate bonds. File: AR_TCS_2021_2022.md The principal assumptions used in determining the present value obligations of interest guarantee under the deterministic approach are as follows: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Discount rate|7.00%|6.50%| |Average remaining tenure of investment portfolio|8 years|8 years| |Guaranteed rate of return|8.10%|8.50%| The Company expensed `1,372 crore and `1,078 crore for the years ended March 31, 2022 and 2021, respectively, towards provident fund. # Superannuation All eligible employees on Indian payroll are entitled to benefits under Superannuation, a defined contribution plan. The Company makes monthly contributions until retirement or resignation of the employee. The Company recognises such contributions as an expense when incurred. The Company has no further obligation beyond its monthly contribution. The Company expensed `271 crore and `254 crore for the years ended March 31, 2022 and 2021, respectively, towards Employees' Superannuation Fund. # Foreign defined contribution plan The Company expensed `885 crore and `658 crore for the years ended March 31, 2022 and 2021, respectively, towards foreign defined contribution plans. # 13) Cost recognition Costs and expenses are recognised when incurred and have been classified according to their nature. |
The costs of the Company are broadly categorised in employee benefit expenses, cost of equipment and software licences, depreciation and amortisation expense and other expenses. Other expenses mainly include fees to external consultants, facility expenses, travel expenses, communication expenses, bad debts and advances written off, allowance for doubtful trade receivables and advances (net) and other expenses. Other expenses are aggregation of costs which are individually not material such as commission and brokerage, recruitment and training, entertainment, etc. # (a) Cost of equipment and software licences Cost of equipment and software licences consist of the following: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Raw materials, sub-assemblies and components consumed|29|14| |Equipment and software licences purchased|984|1,215| | |1,013|1,229| |Finished goods and work-in-progress| | | |Opening stock|-*|1| |Less: Closing stock|3|-*| | |(3)|1| | |1,010|1,230| *Represents value less than `0.50 crore. # Notes forming part of Standalone Financial Statements # (b) Other expenses |Other expenses consist of the following:|Year ended|Year ended| |---|---|---| |(` crore)|March 31, 2022|March 31, 2021| |Total of previous years shortfall|-|-| |Reason for shortfall|NA|NA| |Fees to external consultants|19,338|14,527| |Facility expenses|1,707|1,708| |Travel expenses|1,361|919| |Communication expenses|1,303|1,254| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|107|185| |Other expenses|8,173|6,784| | |31,989|25,377| Other expenses include `3,733 crore and `2,944 crore for the years ended March 31, 2022 and 2021, respectively, towards sales, marketing and advertisement expenses. # (c) Corporate Social Responsibility (CSR) expenditure |(` crore)|Year ended|Year ended| |---|---|---| | |March 31, 2022|March 31, 2021| |1 Amount required to be spent by the company during the year|716|663| |2 Amount of expenditure incurred on:| | | |(i). Construction/acquisition of any asset|-|-| |(ii) On purposes other than (i) above|727|674| |3 Shortfall at the end of the year|-|-| # Finance costs |(` crore)|Year ended|Year ended| |---|---|---| | |March 31, 2022|March 31, 2021| |Interest on lease liabilities|451|450| |Interest on tax matters|7|85| |Other interest costs|28|2| | |486|537| # 15) Income taxes Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred taxes are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. # Current income taxes The current income tax expense includes income taxes payable by the Company having its branches in India and overseas where it operates. The current tax payable by the Company in India is Indian income tax payable on worldwide income after taking credit for tax relief available for export operations in Special Economic Zones (SEZs). Current income tax payable by overseas branches of the Company is computed in accordance with the tax laws applicable in the jurisdiction in which the respective branch operates. The taxes paid are generally available for set off against the Indian income tax liability of the Company's worldwide income. 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 and where the relevant tax paying unit intends to settle the asset and liability on a net basis. # Deferred income taxes Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled. |
For operations carried out in SEZs, deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. Integrated Annual Report 2021-22 Standalone Financial Statements | 384 # Notes forming part of Standalone Financial Statements Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, to the extent it would be available for set off against future current income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. The income tax expense consists of the following: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Current tax| | | |Current tax expense for current year|12,912|10,404| |Current tax benefit pertaining to prior years|(981)|(104)| | |11,931|10,300| |Deferred tax| | | |Deferred tax benefit for current year|(395)|(294)| |Deferred tax benefit pertaining to prior years|-|(64)| | |(395)|(358)| | |11,536|9,942| The reconciliation of estimated income tax expense at statutory income tax rate to income tax expense reported in statement of profit and loss is as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Profit before taxes|49,723|40,902| |Indian statutory income tax rate|34.94%|34.94%| |Expected income tax expense|17,375|14,293| |Tax effect of adjustments to reconcile expected income tax expense to reported income tax expense| | | |Tax holidays|(4,604)|(4,708)| |Income exempt from tax|(1,240)|(773)| |Undistributed earnings in branches|(232)|26| |Tax on income at different rates|1,107|1,103| |Tax pertaining to prior years|(981)|(168)| |Others (net)|111|169| |Total income tax expense|11,536|9,942| The Company benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under the SEZ scheme, the unit which begins providing services on or after April 1, 2005 will be eligible for deductions of 100% of profits or gains derived from # Notes forming part of Standalone Financial Statements Gross deferred tax assets and liabilities are as follows: |(` crore)|As at March 31, 2022|Assets|Liabilities|Net| |---|---|---|---|---| |Deferred tax assets / (liabilities) in relation to|Property, plant and equipment and Intangible assets|426|52|374| |Provision for employee benefit obligations| |733|-|733| |Cash flow hedges| |8|-|8| |Receivables, financial assets at amortised cost| |372|-|372| |MAT credit entitlement| |974|-|974| |Branch profit tax| |-|77|(77)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income| |(320)|-|(320)| |Lease liabilities| |181|-|181| |Others| |405|-|405| | | |2,779|129|2,650| Significant components of net deferred tax assets and liabilities for the year ended March 31, 2022 are as follows: |Opening balance|Recognised in profit and loss|Recognised / reclassified from other comprehensive income|Adjustments|Closing balance| |---|---|---|---|---| |290|84|-|-|374| |639|94|-|-|733| |(8)|-|16|-|8| |336|36|-|-|372| |1,710|-|-|(736)|974| |(310)|233|-|-|(77)| |(500)|-|180|-|(320)| |210|(29)|-|-|181| |428|(23)|-|-|405| |2,795|395|196|(736)|2,650| # Notes forming part of Standalone Financial Statements # Significant components of net deferred tax assets and liabilities for the year ended March 31, 2021 are as follows: | |Opening balance|Recognised in profit and loss|Recognised in / reclassified from other comprehensive income|Adjustments / utilisation|Closing balance| |---|---|---|---|---|---| |Deferred tax assets / (liabilities) in relation to| | | | | | |Property, plant and equipment and intangible assets|162|128|-|-|290| |Provision for employee benefit obligations|468|171|-|-|639| |Cash flow hedges|7|-|(15)|-|(8)| |Receivables, financial assets at amortised cost|327|9|-|-|336| |MAT credit entitlement|1,049|64|-|597|1,710| |Branch profit tax|(284)|(26)|-|-|(310)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(483)|-|(17)|-|(500)| |Lease liabilities|308|(98)|-|-|210| |Others|318|110|-|-|428| |Total|1,872|358|(32)|597|2,795| # Gross deferred tax assets and liabilities are as follows: |As at March 31, 2021|Assets|Liabilities|Net| |---|---|---|---| |Deferred tax assets / (liabilities) in relation to| | | | |Property, plant and equipment and Intangible assets|345|55|290| |Provision for employee benefit obligations|639|-|639| |Cash flow hedges|(8)|-|(8)| |Receivables, financial assets at amortised cost|336|-|336| |MAT credit entitlement|1,710|-|1,710| |Branch profit tax|-|310|(310)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(500)|-|(500)| |Lease liabilities|210|-|210| |Others|428|-|428| |Total|3,160|365|2,795| Under the Income-tax Act, 1961, the Company is liable to pay Minimum Alternate Tax in the tax holiday period. MAT paid can be carried forward for a period of 15 years and can be set off against the future tax liabilities. |
MAT is recognised as a deferred tax asset only when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. Integrated Annual Report 2021-22 Standalone Financial Statements | 387 # Notes forming part of Standalone Financial Statements # Direct tax contingencies The Company has ongoing disputes with income tax authorities in India and in some of the other jurisdictions where it operates. The disputes relate to tax treatment of certain expenses claimed as deduction, computation or eligibility of tax incentives and allowances and characterisation of fees for services received. The Company has recognised contingent liability in respect of tax demands received from direct tax authorities in India and other jurisdictions of ₹1,616 crore and ₹891 crore as at March 31, 2022 and 2021, respectively. These demand orders are being contested by the Company based on the management evaluation and advise of tax consultants. In respect of tax contingencies of ₹318 crore and ₹318 crore as at March 31, 2022 and 2021, respectively, not included above, the Company is entitled to an indemnification from the seller of TCS e-Serve Limited. The Company periodically receives notices and inquiries from income tax authorities related to the Company's operations in the jurisdictions it operates in. The Company has evaluated these notices and inquiries and has concluded that any consequent income tax claims or demands by the income tax authorities will not succeed on ultimate resolution. The number of years that are subject to tax assessments varies depending on tax jurisdiction. The major tax jurisdictions of Tata Consultancy Services Limited include India, United States of America and United Kingdom. In India, tax filings from fiscal 2018 are generally subject to examination by the tax authorities. In United States of America, the federal statute of limitation applies to fiscals 2018 and earlier and applicable state statutes of limitation vary by state. In United Kingdom, the statute of limitation generally applies to fiscal 2018 and earlier. # 16) Earnings per share Basic earnings per share is computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive securities in any of the years presented. |Year ended|March 31, 2022|March 31, 2021| |---|---|---| |Profit for the year (₹ crore)|38,187|30,960| |Weighted average number of equity shares|369,88,32,195|374,01,10,733| |Basic and diluted earnings per share (₹)|103.24|82.78| |Face value per equity share (₹)|1|1| # 17) Auditor's remuneration Auditor's remuneration consists of the following: |Year ended|March 31, 2022|March 31, 2021| |---|---|---| |Auditor|9|9| |For taxation matters|1|1| |For company law matters|-|-| |For other services|4|4| |For reimbursement of expenses|1|1| # 18) Segment information The Company publishes the standalone financial statements of the Company along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements. # 19) Commitments and contingencies # Capital commitments The Company has contractually committed (net of advances) `1,315 crore and `1,009 crore as at March 31, 2022 and 2021, respectively, for purchase of property, plant and equipment. # Contingencies - Direct tax matters Refer note 15. - Indirect tax matters The Company has ongoing disputes with tax authorities mainly relating to treatment of characterisation and classification of certain items. The Company has demands amounting to `500 crore and `495 crore as at March 31, 2022 and 2021, respectively, from various indirect tax authorities which are being contested by the Company based on the management evaluation and advice of tax consultants. - Other claims Claims aggregating `235 crore and `105 crore as at March 31, 2022 and 2021, respectively, against the Company have not been acknowledged as debts. In addition to above, in October 2014, Epic Systems Corporation (referred to as Epic) filed a legal claim against the Company in the Court of Western District Madison, Wisconsin alleging unauthorised access to and download of their confidential information and use thereof in the development of the Company's product MedMantra. In April 2016, the Company received an unfavourable jury verdict awarding damages of `7,115 crore (US $940 million) to Epic which was thereafter reduced by the Trial Court to `3,179 crore (US $420 million). Pursuant to reaffirmation of the District Court order in March 2019, the Company filed an appeal in the Appeals Court to fully set aside the Order. |
Epic also filed a cross appeal challenging the reduction by the District Court judge of `757 crore (US $100 million) award and `1,514 crore (US $200 million) in punitive damages. On August 20, 2020, the Appeals Court vacated the award of `2,119 crore (US $280 million) in punitive damages considering the award to be constitutionally excessive and remanded the case back to District Court with instructions to reassess and reduce the punitive damages award to at most `1,060 crore (US $140 million), affirmed the District Court's decision vacating the jury's award of `757 crore (US $100 million) in compensatory damages for alleged use of "other confidential information" by the Company, and affirmed the District Court's decision upholding the jury's award of `1,060 crore (US $140 million) in compensatory damages for use of the comparative analysis by the Company. The proceedings for assessing punitive damages have been remanded back to the District Court. Both the Company and Epic have filed their briefs at the District Court in relation to punitive damages. The matter is under consideration by the District Court. On April 8, 2021, Epic approached the Supreme Court seeking review of the order of the Appeals Court vacating the award of `2,119 crore (US $280 million) towards punitive damages and remanding back to District Court with an instruction to reassess the punitive damages, to no more than `1,060 crore (US $140 million). On March 21, 2022, Supreme Court denied Epic's petition seeking review of the order. The Company will continue to pursue all legal options available in the matter. Considering all the facts and various legal precedence, on a conservative and prudent basis, the Company provided `1,218 crore (US $165 million) towards this legal claim in its statement of profit. # Notes forming part of Standalone Financial Statements and loss for three month period ended September 30, 2020. This was presented as an "exceptional item" in the standalone statement of profit and loss. Pursuant to US Court procedures, a Letter of Credit has been made available to Epic for ₹3,331 crore (US $440 million) as financial security in order to stay execution of the judgement pending post-appeal proceedings and conclusion. # Guarantees and letter of comfort The Company has given letter of comfort to banks for credit facilities availed by its subsidiaries. As per the terms of letter of comfort, the Company undertakes not to divest its ownership interest directly or indirectly in the subsidiary and provide such managerial, technical and financial assistance to ensure continued successful operations of the subsidiary. The Company has provided guarantees to third parties on behalf of its subsidiaries. The Company does not expect any outflow of resources in respect of the above. The amounts assessed as contingent liability do not include interest that could be claimed by counter parties. Integrated Annual Report 2021-22 Standalone Financial Statements | 390 # Notes forming part of Standalone Financial Statements # 20) Related party transactions The Company's principal related parties consist of its holding company, Tata Sons Private Limited and its subsidiaries, its own subsidiaries, affiliates and key managerial personnel. The Company's material related party transactions and outstanding balances are with related parties with whom the Company routinely enter into transactions in the ordinary course of business. Refer note 21 of consolidated financial statement for list of subsidiaries of the Company. |
# Transactions with related parties are as follows: | |Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---|---| |Revenue from operations|40|21,358|770|2,233|-|24,401| |Dividend income|-|3,548|-|-|-|3,548| |Rent income|-|26|-|-|-|26| |Other income|-|44|-|-|-|44| |Purchases of goods and services (including reimbursements)|-|11,045|534|159|-|11,738| |Brand equity contribution|100|-|-|-|-|100| |Facility expenses|1|101|19|45|-|166| |Lease rental|-|-|73|24|-|97| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|-|-|(3)|1|-|(2)| |Contribution and advance to post employment benefit plans|-|-|-|-|2,322|2,322| |Purchase of property, plant and equipment|-|-|15|147|-|162| |Advances given|-|2|3|6|-|11| |Advances recovered|-|1|3|17|-|21| |Advances taken|-|158|-|1|-|159| |Dividend paid|9,609|-|5|2|-|9,616| |Guarantees given|-|29|-|-|-|29| |Buy-back of shares|11,164|-|4|6|-|11,174| |Cost recovery|-|2,799|-|-|-|2,799| |Sale of property, plant and equipment|-|1|-|-|-|1| # Notes forming part of Standalone Financial Statements |(` crore)|Year ended March 31, 2021|Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Revenue from operations|35|18,245|591|1,752| |-|20,623| | | | | |Dividend income|-|2,215|-|-|-|2,215| | | | | | |Rent income|-|12|-|-|-|12| | | | | | |Other income|-|40|-|-|-|40| | | | | | |Purchases of goods and services (including reimbursements)|1|8,798|444|355| |-|9,598| | | | | |Brand equity contribution|100|-|-|-|-|100| | | | | | |Facility expenses|-|87|17| |42|-|146| | | | | |Lease rental|1|-|36| |45|-|82| | | | | |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)| | | | | |-|-|3|-|-|3| |Contribution and advance to post employment benefit plans|-|-|-|-|5,913|5,913| | | | | | |Purchase of property, plant and equipment|-|-|3| |88|-|91| | | | | |Advances given|-|-|1| |6|-|7| | | | | |Advances recovered|-|-|1| |10|-|11| | | | | |Advances taken|-|3|1| |4|-|8| | | | | |Dividend paid|7,817|-|4| |3|-|7,824| | | | | |Guarantees given|-|1|-|-|-|1| | | | | | |Buy-back of shares|9,998|-|4|-|-| |10,002| | | | | |Sale / Redemption of investments|-|12|-|-|-|12| | | | | | |Purchase of investments|-|224|-|-|-|224| | | | | | |Cost recovery|-|2,840|-|-|-|2,840| | | | | | # Notes forming part of Standalone Financial Statements # Balances receivable from related parties are as follows: | |Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited|Other related parties|Total| |---|---|---|---|---|---|---| |As at March 31, 2022|11|6,704|242|673|-|7,630| | |10|157|52|30|-|249| | |21|6,861|294|703|-|7,879| | |Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited|Other related parties|Total| |---|---|---|---|---|---|---| |As at March 31, 2021|8|4,392|255|519|-|5,174| | |9|65|21|62|-|157| | |17|4,457|276|581|-|5,331| Integrated Annual Report 2021-22 Standalone Financial Statements | 393 # Notes forming part of Standalone Financial Statements # Balances payable to related parties are as follows: |(` crore)|As at March 31, 2022|Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures|Other related parties|Total| |---|---|---|---|---|---|---|---| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities|92|5,067|499|111|-|5,769| | |Commitments and guarantees|-|4,610|37|201|-|4,848| | # Balances payable to related parties are as follows: |(` crore)|As at March 31, 2021|Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures|Other related parties|Total| |---|---|---|---|---|---|---|---| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities|91|3,604|296| |393|-|4,384| |Commitments and guarantees| |-|4,669|10|270|-|4,949| Integrated Annual Report 2021-22 Standalone Financial Statements | 394 # Notes forming part of Standalone Financial Statements # Material related party transactions are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Revenue from operations| | | |Tata Consultancy Services Sverige AB|2,172|1,939| |Tata Consultancy Services Canada Inc.|2,804|2,034| |Tata Consultancy Services Deutschland GmbH|3,038|2,504| |Tata Consultancy Services Netherlands BV|3,006|2,848| |Jaguar Land Rover Limited|1,500|1,093| |Tata Consultancy Services Switzerland Ltd.|2,285|1,786| |Purchases of goods and services (including reimbursements)| | | |Tata America International Corporation|3,156|2,803| |Tata Consultancy Services De Mexico S.A.,De C.V.|2,130|1,637| |TCS Foundation|679|350| |Dividend income| | | |Tata America International Corporation|707|1,002| |Tata Consultancy Services Canada Inc.|649|193| |Tata Consultancy Services Netherlands BV|646|405| |TCS Iberoamerica SA|682|374| # Material related party balances are as follows: | |As at March 31, 2022|As at March 31, 2021| |---|---|---| |Trade receivables and contract assets| | | |Tata America International Corporation|1,291|456| |Tata Consultancy Services Sverige AB|88|219| |Tata Consultancy Services France|1,063|1,028| |Tata Consultancy Services Netherlands BV|594|244| |Tata Consultancy Services Asia Pacific Pte Ltd.|345|271| |Diligenta Limited|745|594| |Jaguar Land Rover Limited|379|290| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities| | | |Tata America International Corporation|2,044|1,519| |Tata Consultancy Services De Mexico S.A.,De C.V.|433|168| # Transactions with key management personnel are as follows: | |Year ended March 31, 2022|Year ended March 31, 2021| |---|---|---| |Short-term benefits|53|43| |Dividend paid during the year|1|1| | |54|44| # Notes forming part of |
Standalone Financial Statements The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. 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. 21) The sitting fees and commission paid to non-executive directors is `12 crore and `10 crore as at March 31, 2022 and 2021, respectively. 22) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. 23) Additional Regulatory Information |Ratio|Numerator|Denominator|Current year|Previous year| |---|---|---|---|---| |Current ratio (in times)|Total current assets|Total current liabilities|2.5|2.9| |Debt-Equity ratio (in times)|Debt consists of borrowings and lease liabilities.|Total equity|0.1|0.1| |Debt service coverage ratio (in times)|Earning for Debt Service = Net Profit after taxes|Debt service = Interest and lease payments + Non-cash operating expenses + Interest + Principal repayments + Other non-cash adjustments|23.2|20.4| |Return on equity ratio (in %)|Profit for the year less Preference dividend (if any)|Average total equity|50.3%|41.5%| |Trade receivables turnover ratio (in times)|Revenue from operations|Average trade receivables|4.8|4.2| |Trade payables turnover ratio (in times)|Cost of equipment and software licences + Other expenses|Average trade payables|3.7|3.2| |Net capital turnover ratio (in times)|Revenue from operations|Average working capital (i.e. Total current assets less Total current liabilities)|2.9|2.5| # Financial Ratios File: AR_TCS_2021_2022.md |Ratio|Numerator|Denominator|Current year|Previous year| |---|---|---|---|---| |Net profit ratio (in %)|Profit for the year|Revenue from operations|23.8%|22.8%| |Return on capital employed (in %)|Profit before tax and finance costs|Capital employed = Net worth + Lease liabilities + Deferred tax liabilities|60.4%|51.1%| |Return on investment (in %)|Income generated from invested funds|Average invested funds in treasury investments|6.1%|6.5%| # Dividends Dividends paid during the year ended March 31, 2022 include an amount of `15.00 per equity share towards final dividend for the year ended March 31, 2021 and an amount of `21.00 per equity share towards interim dividends for the year ended March 31, 2022. Dividends paid during the year ended March 31, 2021 include an amount of `6.00 per equity share towards final dividend for the year ended March 31, 2020 and an amount of `23.00 per equity share towards interim dividends (including special dividend) for the year ended March 31, 2021. Dividends declared by the Company are based on the profit available for distribution. On April 11, 2022, the Board of Directors of the Company have proposed a final dividend of `22.00 per share in respect of the year ended March 31, 2022 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately `8,050 crore. # Signatories As per our report of even date attached For and on behalf of the Board For B S R & Co. LLP Rajesh Gopinathan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Amit Somani Partner Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Membership No: 060154 Mumbai, April 11, 2022 Mumbai, April 11, 2022 # 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|Date of becoming subsidiary|Start date of accounting period of subsidiary|End date of accounting period of subsidiary|Reporting Currency|Exchange Rate|Share Capital|Reserves and Surplus|Total Assets|Total Liabilities|Investments|Turnover|Profit before Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |1|APTOnline Limited|August 9, 2004|April 1, 2021|March 31, 2022|INR|1.000000|2|108|190|80|32|135|21|3|18|-|89%|India| |2|MP Online Limited|September 8, 2006|April 1, 2021|March 31, 2022|INR|1.000000|1|120|158|37|121|77|24|6|18|-|89%|India| |3|C-Edge Technologies Limited|January 19, 2006|April 1, 2021|March 31, 2022|INR|1.000000|10|303|394|81|-|322|98|25|73|-|51%|India| |4|MahaOnline Limited|September 23, 2010|April 1, 2021|March 31, 2022|INR|1.000000|3|77|134|54|34|3|2|1|1|-|74%|India| |5|TCS e-Serve International Limited|December 31, 2008|April 1, 2021|March 31, 2022|INR|1.000000|10|146|1,052|896|90|1,889|115|27|88|-|100%|India| |6|Diligenta Limited|August 23, 2005|January 1, 2021|December 31, 2021|GBP|99.374057|10|1,392|2,696|1,294|293|3,730|8|-|8|-|100%|U.K.| |7|Tata Consultancy Services Canada Inc.|October 1, 2009|April 1, 2021|March 31, 2022|CAD|60.450647|43|791|2,412|1,578|-|8,022|664|172|492|-|100%|Canada| |8|Tata America International Corporation|August 9, 2004|April 1, 2021|March 31, 2022|USD|75.696300|2|1,217|4,061|2,842|305|3,845|983|253|730|-|100%|U.S.A.| |9|Tata Consultancy Services Asia Pacific Pte Ltd.|August 9, 2004|April 1, 2021|March 31, 2022|USD|75.696300|33|864|1,560|663|819|2,458|206|17|189|-|100%|Singapore| |10|Tata Consultancy Services (China) Co., Ltd.|November 16, 2006|January 1, 2021|December 31, 2021|CNY|11.933644|241|19|396|136|-|884|25|10|15|-|93.2%|China| |11|Tata Consultancy Services Japan, Ltd.|July 1, 2014|April 1, 2021|March 31, 2022|JPY|0.620894|269|1,207|2,676|1,200|-|4,663|358|111|247|-|66%|Japan| |12|Tata Consultancy Services Malaysia Sdn Bhd|August 9, 2004|April 1, 2021|March 31, 2022|MYR|17.995935|4|70|196|122|-|430|4|3|1|-|100%|Malaysia| |13|PT Tata Consultancy Services Indonesia|October 5, 2006|April 1, 2021|March 31, 2022|IDR|0.005268|1|31|84|52|-|100|21|8|13|-|100%|Indonesia| |14|Tata Consultancy Services (Philippines) Inc.|September 19, 2008|April 1, 2021|March 31, 2022|PHP|1.462589|(40)|153|443|330|-|775|61|8|53|-|100%|Philippines| |15|Tata Consultancy Services (Thailand) Limited|May 12, 2008|April 1, 2021|March 31, 2022|THB|2.270265|2|6|52|44|-|110|3|1|2|-|100%|Thailand| |16|Tata Consultancy Services Belgium|August 9, 2004|April 1, 2021|March 31, 2022|EUR|84.302958|2|424|809|383|-|2,241|129|34|95|-|100%|Belgium| |17|Tata Consultancy Services Deutschland GmbH|August 9, 2004|April 1, 2021|March 31, 2022|EUR|84.302958|1|630|1,795|1,164|-|6,018|470|145|325|-|100%|Germany| # 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|Date of becoming subsidiary|Start date of accounting period of subsidiary|End date of accounting period of subsidiary|Reporting Currency|Exchange Rate|Share Capital|Reserves and Surplus|Total Assets|Total Liabilities|Investments|Turnover|Profit before Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |18|Tata Consultancy Services Sverige AB|August 9, 2004|April 1, 2021|March 31, 2022|SEK|8.160446|-|887|1,290|403|-|3,786|196|43|153|-|100%|Sweden| |19|Tata Consultancy Services Netherlands BV|August 9, 2004|April 1, 2021|March 31, 2022|EUR|84.302958|556|2,080|4,081|1,445|1,645|5,794|599|79|520|-|100%|Netherlands| |20|Tata Consultancy Services Italia s.r.l.|August 9, 2004|April 1, 2021|March 31, 2022|EUR|84.302958|19|55|175|101|-|386|30|14|16|-|100%|Italy| |21|Tata Consultancy Services Luxembourg S.A.|October 28, 2005|April 1, 2021|March 31, 2022|EUR|84.302958|47|62|214|105|-|716|74|22|52|-|100%|Capellen (G.D. de Luxembourg)| |22|Tata Consultancy Services Switzerland Ltd.|October 31, 2006|April 1, 2021|March 31, 2022|CHF|81.771956|12|693|1,469|764|-|3,716|250|42|208|-|100%|Switzerland| |23|Tata Consultancy Services Osterreich GmbH|March 9, 2012|April 1, 2021|March 31, 2022|EUR|84.302958|-|3|43|40|-|67|(2)|(1)|(1)|-|100%|Austria| |24|Tata Consultancy Services Danmark ApS|March 16, 2012|April 1, 2021|March 31, 2022|DKK|11.333308|1|5|6|-|-|11|-|-|-|-|100%|Denmark| |25|Tata Consultancy Services De Espana S.A.|August 9, 2004|April 1, 2021|March 31, 2022|EUR|84.302958|1|69|176|106|-|385|21|3|18|-|100%|Spain| |26|Tata Consultancy Services (Portugal) Unipessoal, Limitada|July 4, 2005|April 1, 2021|March 31, 2022|EUR|84.302958|-|13|40|27|-|54|10|1|9|-|100%|Portugal| |27|Tata Consultancy Services France|June 28, 2013|April 1, 2021|March 31, 2022|EUR|84.302958|4|(389)|1,387|1,772|-|2,441|37|4|33|-|100%|France| |28|Tata Consultancy Services Saudi Arabia|July 2, 2015|January 1, 2021|December 31, 2021|SAR|20.178147|8|104|202|90|-|345|(1)|4|(5)|-|100%|Saudi Arabia| |29|Tata Consultancy Services (Africa) (PTY) Ltd.|October 23, 2007|January 1, 2021|December 31, 2021|ZAR|5.231149|7|49|56|-|56|-|38|-|38|-|100%|South Africa| |30|Tata Consultancy Services (South Africa) (PTY) Ltd.|October 31, 2007|January 1, 2021|December 31, 2021|ZAR|5.231149|9|83|519|427|-|1,038|58|17|41|-|100%|South Africa| |31|TCS FNS Pty Limited|October 17, 2005|April 1, 2021|March 31, 2022|AUD|56.598124|211|(64)|147|-|2|-|42|-|42|-|100%|Australia| |32|TCS Financial Solutions Beijing Co., Ltd.|December 29, 2006|January 1, 2021|December 31, 2021|CNY|11.933644|44|(3)|56|15|-|62|3|2|1|-|100%|China| |33|TCS Financial Solutions Australia Pty Limited|October 19, 2005|April 1, 2021|March 31, 2022|AUD|56.598124|-|87|131|44|41|68|54|7|47|-|100%|Australia| # Integrated Annual Report 2021-22 # Standalone Financial Statements | 399 # 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|Date of becoming subsidiary|Start date of accounting period of subsidiary|End date of accounting period of subsidiary|Reporting Currency|Exchange Rate|Share Capital|Reserves and Surplus|Total Assets|Total Liabilities|Investments|Turnover|Profit before Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |34|TCS Iberoamerica SA|August 9, 2004|April 1, 2021|March 31, 2022|USD|75.696300|745|933|1,679|1|1,645|-|763|32|731|-|100%|Uruguay| |35|TCS Solution Center S.A.|August 9, 2004|January 1, 2021|December 31, 2021|UYU|1.845126|66|291|498|141|-|904|160|33|127|-|100%|Uruguay| |36|Tata Consultancy Services Argentina S.A.|August 9, 2004|January 1, 2021|December 31, 2021|ARS|0.682634|3|(1)|43|41|-|44|1|-|1|-|100%|Argentina| |37|Tata Consultancy Services Do Brasil Ltda|August 9, 2004|January 1, 2021|December 31, 2021|BRL|15.864257|279|45|587|263|-|1,082|116|42|74|-|100%|Brazil| |38|Tata Consultancy Services De Mexico S.A., De C.V.|August 9, 2004|January 1, 2021|December 31, 2021|MXN|3.808006|1|605|1,768|1,162|-|3,178|321|322|(1)|-|100%|Mexico| |39|Tata Consultancy Services Chile S.A.|August 9, 2004|January 1, 2021|December 31, 2021|CLP|0.095933|163|221|528|144|53|682|100|11|89|-|100%|Chile| |40|TCS Inversiones Chile Limitada|August 9, 2004|January 1, 2021|December 31, 2021|CLP|0.095933|147|168|324|9|308|35|87|1|86|-|100%|Chile| |41|TATASOLUTION CENTER S.A.|December 28, 2006|January 1, 2021|December 31, 2021|USD|75.696300|23|81|216|112|-|469|74|25|49|-|100%|Ecuador| |42|TCS Uruguay S.A.|January 1, 2010|January 1, 2021|December 31, 2021|UYU|1.845126|-|117|223|106|65|510|120|8|112|-|100%|Uruguay| |43|MGDC S.C.|January 1, 2010|January 1, 2021|December 31, 2021|MXN|3.808006|65|(22)|131|88|-|46|(51)|32|(83)|-|100%|Mexico| |44|Tata Consultancy Services Qatar L.L.C.|December 20, 2011|January 1, 2021|December 31, 2021|QAR|20.787692|4|29|45|12|-|52|1|-|1|-|100%|Qatar| |45|Tata Consultancy Services UK Limited|October 31, 2018|January 1, 2021|December 31, 2021|GBP|99.374057|-|27|28|1|-|-|-|-|-| |100%|U.K.| |46|TCS Business Services GmbH|March 9, 2020|April 1, 2021|March 31, 2022|EUR|84.302958|-|20|135|115|56|148|21|7|14|-|100%|Germany| |47|Tata Consultancy Services Ireland Limited|December 2, 2020|January 1, 2021|December 31, 2021|EUR|84.302958|211|34|408|163|-|817|25|5|20|-|100%|Ireland| |48|TCS Technology Solutions AG|January 1, 2021|January 1, 2021|December 31, 2021|EUR|84.302958|27|203|1,279|1,049|-|1,717|221|9|212|-|100%|Germany| |49|Saudi Desert Rose Holding B.V.|May 26, 2021|January 1, 2021|December 31, 2021|EUR|84.302958|-|2|2|-|-|-|34|2|32|-|100%|Netherlands| |50|Tata Consultancy Services Bulgaria EOOD|August 31, 2021|January 1, 2021|December 31, 2021|BGN|43.139169|-|9|25|16|-|19|10|1|9|-|100%|Bulgaria| Integrated Annual Report 2021-22 Standalone Financial Statements | 400 # 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|Date of becoming subsidiary|Start date of accounting period of subsidiary|End date of accounting period of subsidiary|Reporting Currency|Exchange Rate|Share Capital|Reserves and Surplus|Total Assets|Total Liabilities|Investments|Turnover|Profit before Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |51|Tata Consultancy Services Guatemala, S.A.|September 1, 2021|January 1, 2021|December 31, 2021|GTQ|9.849876|8|4|25|13|-|22|5|1|4|-|100%|Guatemala| |52|TCS Foundation|March 25, 2015|April 1, 2021|March 31, 2022|INR|1.000000|1|1,466|1,476|9|85|-|379|-|379|-|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, 2022. 2. Tata Consultancy Services Qatar S.S.C. renamed as Tata Consultancy Services Qatar L.L.C. 3. W12 Studios Limited renamed as Tata Consultancy Services UK Limited. 4. Equity stake increased to 100% in Tata Consultancy Services Saudi Arabia on acquisition of Saudi Desert Rose Holding B.V. w.e.f. May 26, 2021. 5. Tata Consultancy Services Ireland Limited incorporated a wholly owned subsidiary, Tata Consultancy Services Bulgaria EOOD in Bulgaria on August 31, 2021. 6. TCS Iberoamerica SA incorporated a subsidiary, Tata Consultancy Services Guatemala, S.A. in Guatemala on September 1, 2021. 7. Postbank Systems AG renamed as TCS Technology Solutions AG. # For and on behalf of the Board Rajesh Gopinathan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 11, 2022 Integrated Annual Report 2021-22 Standalone Financial Statements | 401 # Glossary |5G|Fifth generation wireless technology for digital cellular networks. 5G is expected to be much faster and enable much higher volumes of data sharing than earlier generations of cellular networks. Its massive capacity and ultra-low latency are expected to usher in an era of hyper-connectivity, enabling newer use cases such as autonomous cars, and accelerating the adoption of IoT.| |---|---| |ADM|See Application Development and Maintenance| |Agile|A collaborative approach for IT and business teams to develop software incrementally and faster. TCS has pioneered the Location Independent Agile™ model that allows for deployment at scale, and helps globally distributed organization execute large transformational programs quickly, while ensuring stability and quality.| |AgilityDebt™|AgilityDebt™ is an index developed by TCS, which uniquely indicates the burden carried by an organization that restricts its Agility. The index is arrived at based on a holistic Agile maturity assessment framework that measures the gap against required Agile talent, roles, team composition, delivery practices, Agile culture, Agile technology and DevOps enablers. TCS uses AgilityDebt™ to assess where the customer's teams are in the Agile journey, find the bottlenecks, and accelerate their Agile transformations.| |Agile Workspaces|These are key enablers of TCS' Location Independent Agile model, and represent the next generation work environment that facilitate greater collaboration among teams. |
It is characterized by partition-less open offices, informal seating, interactive surfaces for information capture, and modern collaboration devices for increased productivity.| |AI|See Artificial Intelligence| |Algo Retail™|TCS' proprietary approach and suite of intellectual property that enables retailers to seamlessly integrate and orchestrate data flows across the retail value chain, harnessing the power of analytics, AI and machine learning in the areas of personalization, pricing optimization, marketing, online search and commerce to unlock exponential business value.| |Amortization|An accounting concept similar to depreciation, but used to measure the consumption of intangible assets.| |Analytics|In the enterprise context, this is the discovery, interpretation, and communication of meaningful patterns in business data to predict and improve business performance.| |Annuity Contracts|A long-term contract which can guarantee regular payments.| |APAC|Acronym for Asia Pacific| |API|See Application Programming Interface| # Integrated Annual Report 2021-22 # Glossary |APIfication|The process of exposing a discrete business function or data within an enterprise's systems through APIs.| |---|---| |Big Data|A high volume, high velocity, and/or high variety information asset that require new forms of processing to enable enhanced decision making, insight discovery, and process optimization.| |Application Development and Maintenance|Design, development, and deployment of custom software; ongoing support, upkeep, and enhancement of such software over its lifetime.| |Blockchain|A distributed database that maintains a continuously growing list of records, called blocks, secured from tampering and revision.| |Application Programming Interface|A set of easily accessible protocols for communication among various software components.| |AR|See Augmented Reality| |Artificial Intelligence|Technology that emulates human performance by learning, coming to its own conclusions, understanding complex content, engaging in natural dialogs with people, augmenting human effort or replacing people on execution of non-routine tasks. Also known as Cognitive Computing.| |ASEAN|Acronym for Association of Southeast Asian Nations| |Assets Under Custody|A measure of the total assets for which a financial institution, typically a custodian bank, provides custodian services.| |AUC|See Assets Under Custody| |Attrition|Measures what portion of the workforce left the organization (voluntarily and involuntarily) over the last 12 months (LTM). Attrition (LTM) = Total number of departures in the LTM / closing headcount| |Augmented Reality|Technology that superimposes a computer-generated image on a user's view of the real world to enrich the interaction.| |Automation|The execution of work by machines in accordance with rules that have either been explicitly coded by a human or 'learned' by the machine through pattern recognition of data. Popular types include Robotic Process Automation and Cognitive Automation.| |Basis Point|One hundredth of a percentage point, that is, 0.01 percent.| |BFSI|Acronym for Banking, Financial Services and Insurance| |Capital Expenditure (CapEx)|Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, an industrial plant, technology, or equipment.| # Integrated Annual Report 2021-22 # Glossary |Carbon Neutral|This describes the state of an entity whose greenhouse gas emissions to the atmosphere are balanced by activities which absorb an equivalent amount from the atmosphere; often accomplished by the use of carbon offsets.| |---|---| |Carbon Offset|Market-based instrument used to compensate for the emission of greenhouse gases into the atmosphere because of the organization's activity by reducing them somewhere else. Certified Emission Reductions (CERs) and Verified Emission Reductions (VERs) are some of the popular carbon offsets.| |Cash and Cash Equivalents|Cash comprises cash on hand and demand / time / fixed deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.| |Cash Flow|Inflows and outflows of cash and cash equivalents.| |Cash Flow from Operating Activities|Primarily derived from the principal revenue producing activities. Therefore, they generally result from the transactions and other events that enter into the determination of profit or loss.| |CBO|See Cognitive Business Operations| |CC|See Constant Currency| |Chatbots|Computer programs designed to simulate conversation with human users, especially over the internet. |
They are typically used in dialog systems for various practical purposes like customer service or information acquisition.| |Cloud|See Cloud Computing| |Cloud Computing|The delivery of easily provisionable computing resources - servers, storage, databases, networking, software, analytics and more - over the internet, consumed on a pay-as-you-go basis.| |CMT|Acronym for Communication, Media and Technology| |Compounded Annual Growth Rate (CAGR)|The annual growth rate between any two points in time, assuming that it has been compounding during that period.| |Connected Clinical Trials (CCT)|Part of the TCS ADD suite, CCT is an innovative software-as-a-service platform that enables life sciences companies to significantly transform patient engagement in clinical trials and improve adherence to protocols, as well as the efficiency and accountability of clinical trials.| |Constant Currency|The basis for restating the current period's revenue growth after eliminating the impact of movements in exchange rates during the period.| |Contextual Knowledge|This is tacit knowledge pertaining to, and specific to, the granular nuances of a customer's business and IT landscape, acquired on the job over a period of time. TCS teams use their contextual knowledge to design technology solutions that are uniquely tailored for that customer, and therefore, a potential source of competitive differentiation.| # Glossary |CO2e|Acronym for "Carbon dioxide equivalent". It is a standard unit for accounting greenhouse gas (GHG) emissions from carbon dioxide or another greenhouse gases, such as SOX, NOX, methane, etc.| |---|---| |Digital Twin|A digital replica of a physical entity. For instance, a digital twin of a factory is a virtual model of the factory built using its data, process, people information. Impact of any change in a process in the real factory can be studied by simulating the change in the digital twin.| |CPG|Acronym for Consumer Packaged Goods| |Core Banking System|A back-end system that processes daily banking transactions and posts updates to accounts and other financial records; typically includes deposit, loan and credit processing capabilities, with interfaces to general ledger systems and reporting tools.| |Core Transformation|Modernization initiatives that target the one or more elements of the organization's operations stack consisting of business processes, software systems and underlying infrastructure, usually to enable greater agility, scalability, resilience and a superior customer experience. These are typically large in scale and scope, and entail the integrated delivery of multiple capabilities.| |Discretionary Spend|Also known as Change the Business (CTB) spend, it is that portion of the IT budget which is used to fund projects that are not, strictly speaking, essential for day to day operations, but are more transformational in nature. In uncertain economic times, when businesses are forced to cut spends in response to decline in income, discretionary spend is often the first to be scrutinized. However, what is considered discretionary is subjective and may differ considerably amongst businesses even within the same sector.| |Distributed Ledger Technology|See Blockchain| |Cyber Security|Technologies, processes and practices designed to protect networks, computers, programs and data from attack, damage or unauthorized access.| |Dividend|One form of distribution of profits earned by the Company and is usually declared as an amount per equity share held by the Shareholders. TCS has a policy of declaring quarterly interim dividends and the final dividend is approved by the shareholders in the Annual General Meeting.| |Days' Sales Outstanding (DSO)|A popular way of depicting the Trade Receivables - billed relative to the company's Revenue. DSO = Trade Receivables - billed * 365 / LTM Revenue| |Depreciation|A method of allocating the cost of a tangible long-term asset over its useful life. It is a non-cash accounting entry found in the statement of profit and loss.| |DLT|See Distributed Ledger Technology| |EACs|Energy Attribute Certificates (EACs) are market-based instruments that can be used by the bearer to claim renewable energy consumption. Each EAC is equivalent to 1 MWh of electricity.| |DevOps|Represents a new way of working to rapidly deploy new releases of a software in production using high levels of automation and tooling. TCS recommends adoption of DevOps, along with Agile for speed to market.| |Digital|Represents new age technologies such as Social Media, Mobility, Analytics, Big Data, Cloud, Artificial Intelligence and Internet of Things. Increasingly, with these technologies becoming mainstream, this word is becoming redundant.| |Earnings Per Share|The amount of that period's Net Income attributable to a single share after deducting any preference dividend and related taxes. |
EPS = [Net profit attributable to Shareholders of the Company - Preference dividend, if any] / Weighted average number of equity shares outstanding during the period| # Integrated Annual Report 2021-22 # Glossary |Edge Computing|Computing and storage that is located on servers on the edge of the network, in close proximity to the users, but not through an on-premise data center; usually reserved for low latency use cases.| |---|---| |Effective Tax Rate|The proportion of the Profit Before Tax that is provided towards income taxes.| | |ETR = Tax expense / Profit Before Tax| |EIA|Acronym for Environmental Impact Assessment. The study needs to be conducted as per Ministry of Environment and Forest (MoEF) requirements for new construction/ expansion projects.| |Engineering and Industrial Services|Consists of next generation product engineering, manufacturing operations transformation, services transformation, embedded software and Internet of Things.| | |Use of such pre-built code reduces time to market and results in more stable, reliable solutions.| |Enterprise Agile|The adoption of Agile methods across all the business functions of the enterprise, designed to empower employees, foster collaboration and drive a culture of continuous innovation at scale.| |EPS|See Earnings Per Share| |ETR|See Effective Tax rate| |FTE|Acronym for Full Time Equivalent| |Fair Value|The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.| |Furlough|A temporary cessation of work without pay for the employees, usually implemented by organizations facing under difficult economic conditions, and in lieu of laying off employees.| |Fintech|Businesses that use technology to make financial services more efficient. Some fintech developments have improved traditional services, for example mobile banking apps, while others have revolutionized services such as pay per mile car insurance, or created new products, such as Bitcoin.| |Gamification|The process of adding games or game-like elements to any activity in order to enrich experiences and encourage user participation.| |GDPR|Acronym for General Data Protection Regulation, a European Union regulation for data protection and privacy.| |GHGs|Acronym for Greenhouse Gases; refers to gases that trap heat in the atmosphere leading to global warming and climate change.| |Fixed Price Contracts|A form of services contracts where the vendor takes a turnkey responsibility for delivering a solution for a certain price and within a mutually agreed timeframe.| | |The customer is billed on completion of key project milestones and related deliverables. This arrangement gives the vendor considerable flexibility in the staffing and execution of the project. On the other hand, it also means bearing the project risk.| |Growth and Transformation|Initiatives launched to improve the enterprise's revenues, leveraging technology to adopt new business models, drive new revenue streams, enhance customer experience or target new customer segments.| | |This is in contrast to traditional outsourcing engagements where the focus is on improving efficiency and saving costs.| # Glossary |G&T|See Growth and Transformation| |---|---| |HVAC|Acronym for Heating Ventilation and Air Conditioning System| |Hybrid Cloud|An enterprise IT infrastructure model that combines private clouds, public clouds and on premise data centers, to meet the compute and storage needs of the business.| |Innovation Days|Focused workshops with a TCS customer where researchers and business leaders from both organizations participate to explore emerging technologies for specific customer problems.| |Innovation Forum|TCS' thought leadership event that is held in North America, UK, Latin America and Japan. It brings together researchers from academia, innovators from the start-up ecosystem, technology watchers, futurists and customers to brainstorm around emerging technologies.| |Inorganic Growth|Growth in revenue due to mergers, acquisitions or takeovers, rather than due to an increase in the company's own business activity.| |ISO|Acronym for International Organization for Standardization| |ISV|Acronym for Independent Software Vendor; a key market segment serviced by TCS' Hi-Tech business vertical. Leading software product vendors across the world engage TCS to help them build new features and functionality, maintain older versions of their products, or to modernize their existing products with new cloud-native architecture.| |Internet of Things|Also known as IoT. Refers to a network of interconnected machines or devices embedded with sensors, software, network connectivity, and necessary electronics to generate and share run-time data that can be studied and used to monitor or control remotely, predict failure, and optimize the design of those machines / devices.| |Invested Funds|Funds that are highly liquid in nature and can be readily converted into cash. |
Invested funds = Cash and Cash Equivalents + Investments + Deposits with banks + Inter-corporate deposits| |Interactive|Allows for a two-way flow of information through an interface between the user and the technology; the user usually communicates a request for data or action to the technology with the technology returning the requested data or result of the action back to the user.| |Involuntary Attrition|A reduction in the workforce due to the employer's decision to terminate employment, instead of the employees' decision to leave.| |IP|See Intellectual Property| |kL|Acronym for the unit kilo-liters used to measure volume. It is a unit used to measure and report water usage.| |KMP|See Key Managerial Personnel| |Key Managerial Personnel|At TCS, this refers to the Chief Executive Officer, Managing Director, Chief Operating Officer, Chief Financial Officer, and the Company Secretary. Please refer to the Company's policy on KMP: http://www.tcs.com/ir-corporate-governance| |kWh|Acronym for kilowatt hours used as a unit of measurement of electricity| |LatAm|Acronym for Latin America| |Location Independent Agile|A method to orchestrate globally distributed stakeholders and talent into Agile teams for improved speed to market in large transformational programs. It comprises processes, structure, and the technology that allows enterprises to overcome location constraints and embrace Agile methods on a global scale.| |Machine First™ Delivery Model|A model that integrates analytics, AI and automation deep within the enterprise to redefine how humans and machines work together and to effectively deliver superior outcomes.| # Integrated Annual Report 2021-22 # Glossary |Machine Learning|A type of artificial intelligence that provides computers with the ability to learn behaviors without being explicitly programmed.| |---|---| |MVP|See Minimum Viable Product| |MWh|Acronym for megawatt hours used as a unit of measurement of electricity. 1 MWh=1000kWh| |Net Zero|Net zero refers to a state in which the greenhouse gases emitted into the atmosphere due the company's activity are minimized through a series of initiatives and the residual emission is compensated by removal of equivalent amount of GHG emissions elsewhere through carbon offsets.| |Managed Services|This is the practice of outsourcing to one service provider, also known as the Managed Services Provider (MSP), the end-to-end responsibility for providing, or orchestrating the provision through third party providers of, services around a range of processes and functions, in order to improve efficiency, service quality, agility and scalability.| |Managed Services Provider|Service providers with the sole, end-to-end responsibility of providing Managed Services.| |Market Capitalization|The total market value of a company's total outstanding equity shares at a point in time. Market Cap = Last Trading Price * Total number of outstanding shares| |MEA|Acronym for Middle East and Africa| File: AR_TCS_2021_2022.md |Metaverse|Virtual-reality space in which users can interact with a computer-generated environment and other users. Metaverse is a merging of virtual, augmented, and physical reality, and blurs the line between online and offline interactions.| |MFDM™|Acronym for Machine First Delivery Model| |Minimum Viable Product|The most basic version of a new product, with the bare minimum functionality, which can be released to the users at the earliest, to be augmented with incremental features and functionality over subsequent iterative cycles. MVPs can be used by teams to learn about user behavior and validate the product value with minimum investment.| |MJ|Acronym for Mega Joule used as a unit of measurement of energy (electricity as well as fuel use)| |Mobility|Information, convenience, and social media all combined together, and made available across a variety of screen sizes and hand-held devices.| |MSP|See Managed Services Provider| |Non-Controlling Interest|The share of the net worth attributable to non-controlling shareholders of the subsidiaries.| |Non-discretionary Spend|Also known as Run the Business (RTB) spend, is that portion of the IT budget that covers the basic IT activities required to keep a business running. Even in tough economic times, non-discretionary spend remains relatively unaffected.| |Options Contract|A hedging instrument that offers the buyer the right to buy or sell the underlying asset (such as stocks or currency) on a future date, at a specified price, for small upfront fee called options premium. Eg: TCS purchases an options contract to sell USD 1mn @ ` 77/$ after 3 months, paying an option premium of `1 million. With this, TCS will have the right to sell USD 1mn at an exchange rate of `77, even if the prevailing market rate at the end of three months is, say `75. |
On the other hand, if the market rate is higher, say `79, then TCS can choose to let the options contract lapse and instead sell at the market rate.| |Order Book|See Total Contract Value| |Organic Growth|The revenue growth a company can achieve by increasing its existing business activity. This does not include growth attributable to takeovers, acquisitions or mergers.| |PaaS|See Platform as a Service| |PAS 2060|Internationally recognized standard by the British Standards Institution to verify and substantiate an organization' claim of carbon neutrality.| # Integrated Annual Report 2021-22 # Glossary |Personalization|Segmentation and responding to individual transactions, customized for a single customer in a single instance.| |---|---| |R&I|Acronym for Research & Innovation| |Realization|The revenue received by the company per utilized effort. Pricing varies by service and by market. Consequently, there can be changes in realization compared to a prior period, due to changes in the underlying business or geographic mix during the period. This does not necessarily mean that like-to-like pricing has changed. Also, realization doesn't take into account the costs and therefore, higher realization is not necessarily more profitable.| |Platforms|A group of technologies that are used as a base upon which other applications, processes or technologies are developed. Useful for optimizing costs and efforts, and eliminating iterative tasks to drive strategic business initiatives.| |Platform as a Service (PaaS)|A category of cloud computing that provides a platform and environment to allow developers to build applications and services over the internet. PaaS services are hosted in the cloud and accessed by users simply via their web browser.| |Power Usage Effectiveness|It is the ratio of total amount of electricity used by a data center facility to the electricity used by the computing equipment in the data center.| |Pricing|The price charged to the customer for a billable effort, turnkey project or a certain process outcome, depending on the nature of the contract. Some use this term interchangeably (and somewhat inaccurately) with the average revenue realized by the company per utilized effort on an aggregate basis. See Realization.| |Private Cloud|Refers to a model of cloud computing where IT infrastructure, in terms of compute and storage resources, are provisioned for the dedicated use of a single organization.| |Product|In the technology context, refers to a packaged software program that is made available to multiple customers either on a license basis, or on a subscription basis, to enable the execution of certain common tasks or processes or business functions in a standardized way. This is the opposite of bespoke or custom software which is built to specifications to meet a customer's unique needs.| |Public Cloud|A computing service model used for the provisioning of storage and computational services to the general public over the internet. Public cloud facilitates access to IT resources on a 'pay as you go' billing model.| |PUE|See Power Usage Effectiveness.| |Related Party Transactions|Any transaction between a company and its related party involving transfer of services, resources or any obligation, regardless of whether a price is charged. Please refer to the Company's policy on Related Party Transactions: http://www.tcs.com/ir-corporate-governance.| |Revenue|The income earned by the Company from operations by providing IT and consulting services, software licenses, and hardware equipment to customers.| |RFP|Acronym for Request for Proposal, meaning a document that solicits proposal, often made through a bidding process, by an entity interested in procurement of IT services, to potential service providers to submit business proposals. An RFP is floated early in the procurement cycle and requested information may include basic corporate information and history, financial information, technical capability and estimated completion period, and customer references.| |Robotic Process Automation|The use of software tools to automate high-volume, repeatable tasks that previously required humans to perform. RPA is best suited for relatively simple and stable processes. Dynamic changes in the environment require ongoing upkeep of the robots, diluting the economic benefit of the automation. Increasingly, customers are preferring cognitive automation over RPA.| # Glossary # SBWS™ See Secure Borderless Workspaces # Scope 1, Scope 2, Scope 3 emissions Green house gas emission accounting categories as per the Greenhouse Gas Protocol. # Secure Borderless Workspaces™ TCS' innovative operating model rolled out in response to the COVID-19 disruption. It is a fully location agnostic extension of the Location Independent Agile model, enabling employees to work remotely, while retaining the same high rigor in project management, governance and security. The fully distributed nature of this model is better suited to ensure business continuity. |
It leverages TCS' prior investments and incorporates the learnings and best practices around network management, standard service delivery environment, digitized governance processes, heavy use of collaborative and cloud based technologies and an internal SOC benchmarked to the best in the industry. # STEM Acronym for education in the fields of Science, Technology, Engineering and Math. # Sustainathons Platform/environment for multiple entities to come together in a specified timeframe to seek solutions to sustainability challenges. Expectations in a sustainathon includes clear framing of real world issues (problem statements) to drive realistic, technology based solutions. Immediate outcomes may include detailed solution ideas, wireframes, code pieces or apps. # T&M See Time and Materials Contract # TCS Pace™ A brand promise that represents the way TCS channels its domain knowledge and organizational units - business and technology services, industry solutions units, and the research and innovation organization - into internal and external co-innovation programs. # TCS Pace Port™ Physical spaces where TCS Pace can be experienced. These spaces are close to academic and start-up hubs, and enclose innovation showcases, Agile workspaces and think spaces. They encourage brainstorming, design thinking and collaborative innovation with internal and external partners. # Shareholder Payout Ratio The proportion of earnings paid to shareholders as a percentage of the Company's earnings, i.e. Net Income attributable to Shareholders of the Company. Payout can be in the form of dividend (including dividend distribution tax) and share buyback. # TCV See Total Contract Value # Time and Materials Contract A form of services contract where the customer is billed for the effort (in hours, days, weeks, etc.) logged by the project team members. Project risk is borne by the customer. This contrasts with Fixed Price Contracts. # Total Contract Value An aggregation of the value of all the contracts signed during a period and a useful indicator of demand, and near term business visibility. # Sole Sourced Contract Non-competitive agreements that allow a single vendor to fulfill the needs of the contractual requirements. These types of contracts can be won when the competitor set narrows down significantly and comes down to a single vendor discussion, given the nature of the client's solution requirements. # Turnkey Contracts See Fixed Price Contracts Integrated Annual Report 2021-22 # Integrated Annual Report 2021-22 # Glossary |tCO2e|Acronym for tonnes of carbon dioxide equivalent which is used as the unit for reporting greenhouse gas emissions.| |---|---| |Unearned and Deferred Revenue|For invoices raised in line with agreed milestones for services yet to be delivered. In other words, it is the amount that has been invoiced although the underlying effort is yet to be expended.| |XR|Extended reality, an umbrella term that covers augmented reality, virtual reality and mixed reality.| |VR|See Virtual Reality| |Virtual Reality|Artificial, computer-generated simulation or recreation of a real-life environment or situation. It engages users by offering simulated reality experiences firsthand, primarily by stimulating their vision and hearing.| |Virtualization|The abstraction of IT resources - like a server, client, storage or network - that masks the physical nature and boundaries of those resources from the users of those resources.| |Y-o-Y|Year-on-Year| Disclaimer: This glossary is intended to help understand commonly used terms and phrases in this report. The explanations are not intended to be technical definitions. If explanations provided here are found to be different from what is described in the Company's periodic financial statements (not limited to Notes to Accounts), then the definition provided in the certified financial statements will prevail. # Identification of Material Topics # GRI Annexures TCS conducts annual materiality assessments to update the list of material topics. The key elements of that assessment include: # Key Elements of Annual Materiality Assessments: Stakeholder interactions result in the identification of a broad funnel of issues important to each of the constituencies. The Company's Sustainability Council uses discussions with internal and external stakeholders, as well as its own judgment, to prioritize and arrive at a list of material topics with significant economic, environmental, or social impacts on TCS' business, reputation, and operations. The company looks at the role of TCS in wider sustainability issues, the impact the company has through its customer engagements and its operations, and the role that the company experts play in professional associations, industry forums and other thought leadership activities to address important issues raised by stakeholders. |
1 GRI 3-1 # Integrated Annual Report 2021-22 # Key Material Topics # Key Concerns # Boundary of impact and TCS approach # to them are listed below: |Material Topics|Why this is material|Key Concerns|TCS Approach (Page Reference Number)|Boundary of impact|GRI Indicators| |---|---|---|---|---|---| |Corporate Governance|Strong corporate governance that considers - stakeholder concerns, engenders trust, oversees business strategies, and ensures fiscal accountability, ethical corporate behavior, and fairness to all stakeholders is core to achieving the organization's longer-term mission.|* Governance Structure and composition * Independence of the Board and Minority Interest * Avoidance of conflict of interest * Board oversight * Disclosure and Transparency|* Pg 137 * Pg 138 * Pg 139 * Pg 140 * Disclosures - Pg 154 to 156 * Internal financial control systems and their adequacy - Pg 132|Internal|2-9, 2-10, 2-11, 2-12, 2-14, 2-15, 2-19| | | | | | |* Value, ethics and compliance * Enterprise Risk Management * Succession Planning * Remuneration Policy| | | | | | |* Pg 139 * Pg 120 * Pg 141 * Pg 149| 2 GRI 3-2 3 GRI 3-3 # Integrated Annual Report 2021-22 Identifictiinnion cteeican ioiicnn|nn413 # Material Topics |Why this is material|Key Concerns|TCS Approach (Page Reference Number)|Boundary of impact|GRI Indicators| |---|---|---|---|---| |A financially strong, viable business that is able to adapt to changing technology landscapes to remain relevant to customers and profitably grow its revenues year-on-year is essential to meet longer term expectations of stakeholders.|- Economic performance - Demand sustainability - Investments in capability development |- Financial Capital - Pg 20 - Strategy for sustainable growth - Pg 9, 108 - New Organization Structure - Pg 109 - Business outlook - Pg 120 - Enabling investments - Pg 108 - Intellectual Capital - Pg 24 to 26 |Internal|2-22, 201-1| |The company's ability to attract, develop, motivate, and retain talent is critical to business success.|- Talent acquisition - Talent development - Diversity, Equity and Inclusion - Talent retention - Employee Health and well being - Competitive Compensation - Occupational Health and safety |- Pg 22 - Pg 113 - Pg 115 - Pg 112 - Pg 114 - Pg 205 |Internal|401-1, 401-2, 401-3, 403-1, 403-2, 403-3, 403-6, 403-9, 403-10, 404-1, 405-1, 405-2, 406-1| # Integrated Annual Report 2021-22 # Integrated Annual Report 2021-22 |Material Topics|Why this is material|Key Concerns|TCS Approach (Page Reference Number)|Boundary of impact|GRI Indicators| |---|---|---|---|---|---| |Social Responsibility|The business must be rooted in community and be aligned with the community's larger interests. Any adversarial relationship can hurt the company's ability to create longer term value.|- Local communities - Education and skill development - Job creation - Taxes payable in different regions - Environmental stewardship |- Pg 174, 222, 228, 229 - Pg 175 to 179 - Pg 140 - Pg 298, 299 - Pg 398 to 401 - Natural Capital - Pg 31, 200 |External|204-1, 207-1, 308-1, 308-2, 413-1| |Environmental Footprint|Business sustainability is linked to the planet's sustainability. |
Moreover, good environmental practices result in greater operational efficiency, adding to financial sustainability.|- Energy consumption and GHG Emissions - Water management - Waste management |- Pg 31, 216, 218, 219, 225 - Water conservation - Pg 217, 218, 224 - Waste reduction and reuse - Pg 200, 221 |Internal|302-1, 302-3, 303-1, 303-2, 303-3, 303-4, 303-5, 305-1, 305-2, 305-3, 305-4, 305-5, 306-2, 306-3, 306-4, 306-5| # GRI Content Index |GRI Standard|Disclosure|Section *|Page No.| |---|---|---|---| |GRI 2: General Disclosures|2-1 Organizational details|* BRSR|186| | |2-2 Entities included in the organization's sustainability reporting|* BRSR|187, 190| | |2-3 Reporting period, frequency and contact point|* BRSR|186| | |2-4 Restatements of information|* BRSR|187| | |2-5 External assurance|* BRSR|187, 197| | |2-6 Activities, value chain and other business relationships|* BRSR|187, 188| | |2-7 Employees|* CG|188| | |2-9 Governance structure and composition|* CG|137| | |2-10 Nomination and selection of the highest governance body|* CG|138| | |2-11 Chair of the highest governance body|* CG|139| | |2-12 Role of the highest governance body in overseeing the management of impacts|* CG|139, 140| | |2-13 Delegation of responsibility for managing impacts|* BRSR|197, 215| | |2-14 Role of the highest governance body in sustainability reporting|* CG|140| | |2-15 Conflicts of interest|* CG|139| | |2-17 Collective knowledge of the highest governance body|* BRSR|198| | |2-19 Remuneration policies|* CG|149| | |2-21 Annual total compensation ratio|* BRSR|214| | |2-22 Statement on sustainable development strategy|* Letter from the CEO|9| | |2-23 Policy commitments|* BRSR|195, 199, 216, 230| | |2-24 Embedding policy commitments|* BRSR|195, 212, 216| | |2-25 Processes to remediate negative impacts|* BRSR|192, 203, 207, 215, 216, 229| | |2-27 Compliance with laws and regulations|* BRSR|198, 223| | |2-28 Membership associations|* BRSR|228| | |2-29 Approach to stakeholder engagement|* BRSR|208, 209| | |2-30 Collective bargaining agreements|* BRSR|203| Requirement 7: Publish a GRI content index * MDA: Management Discussion and Analysis, CG: Corporate Governance Report, BRSR: Business Responsibility and Sustainability Report Integrated Annual Report 2021-22 # GRI Standard Disclosure Section * Page No. |
|GRI 3: Material Topics 2021|3-1 Process to determine material topics|* GRI Annexures:|412| | | | | |---|---|---|---|---|---|---|---| | |GRI 303: Water and Effluents|303-1 Interactions with water as a shared resource|* BRSR| | | |218| | | |303-2 Management of water discharge-related impacts|* BRSR| | | |218| | | | | | |303-3 Water withdrawal|* BRSR|217, 224| | | | | | |303-4 Water discharge|* BRSR|224| | | | | | |303-5 Water consumption|* BRSR|217| |GRI 304: Biodiversity 2016|304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas|* BRSR| | | | |222| | | |304-2 Significant impacts of activities, products and services on biodiversity|* BRSR| | | |226| | | |304-3 Habitats protected or restored|* BRSR| | | |226| |GRI 305: Emissions 2016|305-1 Direct (Scope 1) GHG emissions|* BRSR| | | | |218| | | |305-2 Energy indirect (Scope 2) GHG emissions|* BRSR| | | |218| | | |305-3 Other indirect (Scope 3) GHG emissions|* BRSR| | | |225| | | | | | |305-4 GHG emissions intensity|* BRSR|218, 225| | | |305-5 Reduction of GHG emissions|* BRSR| | | |219| |GRI 306: Waste 2020|306-2 Management of significant waste-related impacts|* BRSR| | | | |200, 221| | | | | | |306-3 Waste generated|* BRSR|220| |GRI 201: Economic Performance 2016|201-1 Direct economic value generated and distributed|* Financial Capital|20| | | | | | |201-2 Financial implications and other risks and opportunities due to climate change|* MDA|130| | | | | | |201-3 Defined benefit plan obligations and other retirement plans|* BRSR|202| | | | | |GRI 204: Procurement Practices 2016|204-1 Proportion of spending on local suppliers|* BRSR|229| | | | | |GRI 205: Anti-corruption 2016|205-3 Confirmed incidents of corruption and actions taken|* BRSR|199| | | | | |GRI 207: Tax 2019|207-1 Approach to tax|* CG|140| | | | | |GRI 302: Energy 2016|302-1 Energy consumption within the organization|* BRSR|216, 223| | | | | | |302-3 Energy intensity|* BRSR|216| | | | | # GRI Standard | |Disclosure|Section *|Page No.| | | | | |---|---|---|---|---|---|---|---| |306-4 Waste diverted from disposal| |BRSR|220| | | | | | |306-5 Waste directed to disposal|BRSR|220| | | | | | | | | |GRI 404:|404-1 Average hours of training per year per employee|Human Capital|23| | | | | | | |BRSR|203| |404-3 Percentage of employees receiving regular performance and career development reviews| |BRSR| | | | |204| |GRI 308:|308-1 New suppliers that were screened using environmental criteria|BRSR|200, 227| | | | | | | | | |2016| | | | |308-2 Negative environmental impacts in the supply chain and actions taken| |BRSR|227| | | | | |GRI 401:|401-1 New employee hires and employee turnover|Human Capital|22| | | | | | | |BRSR| | | | |189| |401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees| |BRSR| |201| | | | | |401-3 Parental leave|BRSR|203| | | | | |GRI 402:|402-1 Minimum notice periods regarding operational changes|MDA|115| | | | | |GRI 403:|403-1 Occupational health and safety management system|BRSR|205| | | | | |403-2 Hazard identification, risk assessment, and incident investigation| |BRSR|205, 206| | | | | |403-3 Occupational health services| | | | | |BRSR|203| | |403-6 Promotion of worker health|BRSR|205| | | | | | |403-9 Work-related injuries|BRSR|206| | | | | | |403-10 Work-related ill health|BRSR|206, 208| | | | | # Integrated Annual Report 2021-22 GRInCintentnIndexnn|nn418 # TCS Safe Harbor Clause Certain statements in this release concerning our future prospects are forward-looking statements. Forward-looking statements by their nature involve a number of risks and uncertainties that could cause actual results to differ materially from market expectations. |
These risks and uncertainties include, but are not limited to, our ability to manage growth, intense competition among global IT services companies, various factors which may affect our profitability, such as wage increases or an appreciating Rupee, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on cross-border movement of skilled personnel, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which TCS has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, pandemics, natural disasters and general economic conditions affecting our industry. TCS may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. These forward-looking statements represent only the Company's current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements. # IT Services # Business Solutions # Consulting # Tata Consultancy Services Limited 9th Floor, Nirmal Building, Nariman Point, Mumbai 400 021 www.tcs.com Building on belief File: AR_TCS_2022_2023.md # TATA # TCS/SE/46/2023-24 June 7, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G, Bandra Kurla P. J. Towers, Complex, Bandra (East) Dalal Street, Mumbai - 400051 Mumbai - 400001 Symbol - TCS Scrip Code No. 532540 Dear Sirs, # Sub: Annual General Meeting Notice, Integrated Annual Report 2022-23 The twenty-eighth Annual General Meeting ("AGM") of the Company will be held on Thursday, June 29, 2023 at 3.30 p.m. IST through Video Conferencing/Other Audio Visual Means. Pursuant to Regulation 34(1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are submitting herewith the Integrated Annual Report containing the Notice of AGM for the financial year 2022-23 which is being sent only through electronic mode to the Members, who have registered their e-mail addresses with the Company/ Depositories. The Integrated Annual Report containing the Notice is also uploaded on the Company's website www.tcs.com. This is for your information and records. Thanking you, Yours faithfully, For Tata Consultancy Services Limited Pradeep Manohar Gaitonde Company Secretary # cc: 1. National Securities Depository Limited 2. Central Depository Services (India) Limited 3. TSR Consultants Private Limited UAIA CONSULTANCY SERVICES Tata Consultancy Services Limited 9th Floor Nirmal Building Nariman Point Mumbai 400 021 Tel 91 22 6778 9595 Fax 91 22 6630 3672 e-mail [email protected] website www.tcs.com Registered Office 9th Floor Nirmal Building Nariman Point Mumbai 400 021 Corporate Identity No. (CIN): L22210MH1995PLC084781 # CCS TATACONSULTANCY SERVICES # TATA # Innovate, Adapt, Thrive # Integrated Annual Report # 2022-23 # FY 2022 # About TCS Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world's largest businesses in their transformation journeys for over 55 years. Its consulting-led, cognitive powered, portfolio of # Content # About TCS 02 # Consolidated Financial Statements Board of Directors................................................................ 04 Independent Auditor's Report…………...............................… 183 Management Team.............................................................. 05 Consolidated Balance Sheet………………................................ 190 Letter from the Chairman.................................................... 06 Consolidated Statement of Profit and Loss…...................... 191 Letter to Shareholders......................................................... 08 Consolidated Statement of Changes in Equity..................... 192 Letter from the CEO............................................................. 11 Consolidated Statement of Cash Flows…….......................... 194 The Year Gone by................................................................. 12 Notes forming part of the Consolidated Financial Statements…………………………………………………....... 196 # Integrated Reporting Framework TCS Integrated Business Model…………………........................ 15 Financial Capital…………………………………………....................... 16 Human Capital……………………………………………....................... 18 Intellectual Capital……………………………………......................... 20 Social Capital……………………………………………......................... 22 Natural Capital……………………………………………...................... 24 # Thematic Section Helping Versuni become a Digital-First, Innovation-Led Standalone Entity…………………………............ 26 Enabling Eversource Energy's Transition to a Green Energy Future………………………………………………......... 27 Innovate, Adapt, Thrive: A Fireside Chat............................. 28 Revolutionizing Small Value Payments in South Africa....... 30 Supporting Takenaka Corporation Realize its Vision of a Sustainable Society....................................................... 31 Q&A with CFO and CHRO.................................................... 32 Innovating to Improve Crop Yields and Farmer Incomes................................................................... 34 # Sustainability Disclosures Identification of Material Topics …………………...................... 330 Climate change risk and opportunities assessment and management…………………………………………………............ 333 GRI Content Index………………………………………....................... 339 # Statutory Section Notice………………………………………......................................... 35 Directors' Report................................................................. 72 Management Discussion and Analysis................................ 86 Awards and Accolades......................................................... 109 Corporate Governance Report............................................ 113 Corporate Social Responsibility........................................... 136 Business Responsibility and Sustainability Report……......... |
145 # Board of Directors |Non-Independent, Non Executive|Independent, Non Executive| |---|---| |N Chandrasekaran|Aarthi Subramanian| |C C M N|O P Bhatt| | |Dr Pradeep Kumar| | |Hanne Sorensen| | | | |Non-Independent, Executive| | |K Krithivasan|N G Subramaniam| |CEO & MD|COO & ED| |M M M NE|M M NE| | |Keki Mistry| | |Don Callahan| | | | I Independent, Non-Executive Director NE Non-Independent, Executive Director Average Age (years) 63 56 72 N Non-Independent, Non-Executive Director # Board Committees |Committee|C Chairman|M Member| |---|---|---| |Audit Committee| | | |Nomination and Remuneration Committee| | | |Stakeholders' Relationship Committee| | | |Corporate Social Responsibility Committee| | | |Executive Committee| | | |Risk Management Committee*| | | *Samir Seksaria (Chief Financial Officer) is also a member of the Committee # Average Tenure on the Board (years) | |Independent|Non-Independent| |---|---|---| | |07|0| | |16| | # Board Independence (%) |Independent|Non-Independent| |---|---| |56%|44%| # Average Tenure of Independent Directors on the Board (years) | |04|11| |---|---|---| | | | | Board of Directors | 4 # Management Team |Corporate|Business Heads| |---|---| |K Krithivasan|Susheel Vasudevan| |Chief Executive Officer|Relationship Incubation Group| |and Managing Director|Krishnan Ramanujam| |N G Subramaniam|Enterprise Growth Group| |Chief Operating Officer|Debashis Ghosh| |and Executive Director|Business Transformation Group| |Samir Seksaria|Suresh Muthuswami| |Chief Financial Officer|Chairman - TCS North America| |Milind Lakkad|Amit Bajaj| |Chief Human Resources Officer|North America| |Rajashree R|Amit Kapur| |Chief Marketing Officer|UK & Ireland| |K Ananth Krishnan|Sapthagiri Chapalapalli| |Chief Technology Officer|Europe| |Madhav Anchan| | |General Counsel Legal| | |Pradeep Manohar Gaitonde|Company Secretary| Management Team | 5 # Letter from the Chairman The global environment is going through considerable changes. At the same time, the world is navigating several important transitions: the Energy transition, the Supply Chain transition and the AI transition. Undoubtedly, these transitions will require significant investments in technology and innovation, and offer a huge growth opportunity for the IT industry. Dear Shareholder, I am pleased to share that your company has done well in a volatile global environment in the year gone by. In FY 2023, your company delivered revenue of ₹225,458 crore, a growth of 17.6%. This growth has come at an industry-leading operating margin of 24.1%. TCS continues to play a crucial role with clients to enable their business transformation, helping them accelerate new technology adoption and bring agility into execution. We work with large enterprises on transformation initiatives to build a digital foundation for the future, enable strategic leverage of data and artificial intelligence (AI) and reimagine customer and employee experiences. Your company delivered healthy client metrics enabled by new customer additions and deep client relationships. In FY 2023, growth has come from broad-based performance across markets and industry verticals. The order book continues to be strong, indicating demand for your company's services. From a talent perspective, the employee strength grew to over 614,000 associates with 35.7% women associates. The global environment is going through considerable changes. Geopolitical factors such as the conflict between Russia and Ukraine, rising inflation and volatile commodity prices have caused slowing down of global growth and created stress in the overall economic environment. At the same time, the world is navigating several transitions. Undoubtedly, these transitions will require significant investments in technology and innovation, and offer a huge growth opportunity for the IT industry. The global energy transition is accelerating. Businesses are making clear commitments towards a sustainable future. There are many innovations across products, services, manufacturing, and delivery. New business models are also emerging. This requires investments in technology and innovation including electric mobility, renewable power, hydrogen and sustainable fuel. In addition, sustainability compliance and reporting requirements are fast evolving as new standards and regulations are coming into play. Across the facets of this transition, investments in IT and digital technology will be an important enabler for businesses. The supply chain transition resulting from the geo-political situation is altering the global supply chains. Companies are rebalancing their supply chains for resilience and efficiency. New global supply chain ecosystems are being created with India playing an important role. This is being led by significant capital investments in technology to set-up 'digital-first' manufacturing and supply chain operations as well as to build ecosystem integration with partners. A central focus. The impact of AI and Machine learning is going to be profound. There is a transition already underway from predictive AI to generative AI. Majority of the businesses are still adopting predictive AI and are on the journey of capturing large volume of data, harnessing the power of cloud and IoT. |
There are varying levels of adoption in companies across sectors. Leveraging generative AI would further require technology innovation and investments. There is another important area that companies need to focus on - building talent for the future. The energy, supply chain and AI transitions are going to require companies to reskill/upskill existing talent base, hire and integrate new talent and invest in research. Our technology strengths make us well-placed to respond to the global demand and scale up our talent base. As the future of work is evolving, enterprises globally are also assessing their approach to talent. Today, companies can tap into talent anywhere and leaders need to learn how to harness the global talent pool effectively. Technology and tools are facilitating collaboration and enabling virtual and hybrid models of work. Harnessing this talent will need an approach that leverages technologies like AI and cloud to enable effective employee engagement and collaboration. Your company is significantly investing in building AI capabilities which include products and platforms that are AI-powered. Over the last few years, your company has leveraged partnerships to design and orchestrate a completely indigenous software-defined 4G/5G network stack. 5G technologies along with IoT, edge and AI will enable new digital transformation opportunities across industries, both industrial and consumer. We will also invest in research areas important for the future, in collaboration with our global academic partners and start-up ecosystem. I would like to thank Rajesh Gopinathan for his contribution during his tenure as CEO & MD and I wish him the very best for the future. I also take this opportunity to wish K Krithivasan the very best in his new role as CEO & MD of your company. On behalf of the Board of Directors of Tata Consultancy Services, I want to thank you for your continued trust, confidence, and support. Warm regards, N Chandrasekaran Chairman In the past decade, there has been a rapid evolution of digital technologies, bringing about a transformation across every industry. Now, the advancements in AI have made AI transition Letter from the Chairman | 7 Our full services capability enables us to help our clients thrive, in good times and bad. During the up-cycle, we help clients accelerate and expand their technology-led innovation to differentiate themselves and drive growth. On the down cycle, we help them adapt, using technology to drive the efficiency, agility and resilience needed to cope with a faltering economy, and prepare for better times ahead. # Letter to Shareholders Dear Stakeholder, Demand for our services showed remarkable resilience even as other parts of the technology universe deflated, and macroeconomic uncertainties worsened in our major markets throughout FY 2023. Our revenue for the year was ₹225,458 crore, a growth of 17.6% over the prior year (13.7% in constant currency). This growth came with an industry leading operating margin of 24.1%. Our Net Margin was at 18.7%. The Earnings Per Share was at ₹115.19, a growth of 11.2% over the prior year. From an industry vertical perspective, growth in FY 2023 was led by Retail and Consumer Business, which grew 22.1%, Life Sciences and Healthcare which grew 20.2% and Communications, Media and Technology which grew 18.1%. Banking, Financial Services and Insurance grew 14.6% while Manufacturing grew 14.1%. Others, which make up 8.2% of revenues, grew 22.5%. By geographic markets, North America grew 24.2%, UK grew 11.4% and Continental Europe grew 9.2%. Among emerging markets, Latin America grew 24.8%, India grew 14.9%, Middle East & Africa grew 12.5% while Asia Pacific grew 7.1%. The Board has recommended a final dividend of ₹24 per share, bringing the total dividend for the year to ₹115 per share. For the full year, the company's shareholder payout was ₹42,079 crore, 108.2% of the free cash flow during the year. # Innovate, Adapt, Thrive Our performance this year reflects how much of an enterprise staple IT services have become. Our full services capability enables us to help our clients thrive, in good times and bad. During the up-cycle, we help clients accelerate and expand their technology-led innovation to differentiate themselves and drive growth. On the down cycle, we help them adapt, using technology to drive the efficiency, agility and resilience needed to cope with a faltering economy, and prepare for better times ahead. Cloud transformation remained a high priority area for enterprises in FY 2023, with greater focus on execution. They engaged us to take up the modernization and migration of their bigger, more complex workloads. |
The breadth and depth of our cloud expertise, our scale, deep domain knowledge, strong partnership credentials with the hyperscalers and our portfolio of intellectual property on the cloud, give us a distinct competitive edge in this phase of the cloud adoption cycle. We also helped clients cope with the challenge of managing cloud expenses. In some cases, it required rearchitecting their application stack to be more cloud native, capable of dynamically ramping up resource consumption during periods of high demand, and automatic ramping down at other times. Elsewhere, we offered our FinOps advisory and cloud managed services to rein in cloud costs. The adoption of cloud technologies continues to drive innovation within enterprises. The availability of compute, data 1 GRI 2-22 # Letter to Shareholders and networks at scale provides access to powerful technologies like advanced analytics and machine learning, applied to diverse areas like computer vision, text and speech processing, in domains like dynamic supply chain optimization, new molecule discovery in life sciences and usage-based pricing of insurance coverage. Newer developments like generative AI, large language models, and quantum computing triggered more experimentation and innovation by our clients. Our investments in research and innovation across different industries, and our Pace innovation architecture have positioned us well to partner with them in these initiatives. Our Agile Innovation Cloud offering, where we create dedicated, location-independent innovation teams to help clients accelerate and scale up their innovation, gained further traction in FY 2023. 7 new clients signed up during the year, bringing the total to 30 clients. Some of the emerging innovation themes that we helped customers with include ecosystem and multi-industry models underpinned by technologies like data marketplaces, API and blockchain, in industries like transportation and public sector; AI-powered autonomous robotics in the logistics industry, and new applications for digital twins in the BFSI, Telecom and Retail industries. Within our growth and transformation (G&T) portfolio, business model innovation continued to be a key theme. For example, for a large Fortune 500 electric gas utility, we built the service delivery platform central to their new business model of providing warranty repair, refurbishment and replacement services of various home appliances to households. Ingram Micro, one of the largest technology distributors in the US, engaged us as a partner to power their pivot into e-commerce and achieve their mission to transform from a traditional distributor to a platform company that does distribution. Tapestry Inc, a leading New York-based house of iconic accessories and lifestyle brands such as Coach, Kate Spade, & Stuart Weitzman, partnered with TCS to drive their omnichannel modernization and transform the customer journey experience. Other G&T themes, such as M&A and sustainability continued to bring in high-profile deal wins and new strategic engagements for us in FY 2023. Elsewhere in this report, you can read about the work we did for Philips Domestic Appliances in its journey to be a standalone company, and how we helped Eversource Energy pursue its carbon neutrality aspirations. Digital transformation, which began in the front office, towards enhancing customer experience, made further inroads within the enterprise during the year, unlocking tremendous value in the middle and back office. As critical technologies such as machine vision and conversational systems get better with the use of AI, our Machine First™ approach is helping clients use them innovatively in the back office, embedding them into reimagined processes to drive greater velocity, agility, throughput and resilience - which, among other things, also enhances customer experience. Applied at scale, across a broad set of business or IT operations, this can result in an entirely new operating model that significantly boosts our clients' competitiveness. As macroeconomic uncertainty increased in the second half of the year, we saw clients adapting by reprioritizing their spends and showing greater interest in such operating model transformations. TCS Cognix™, our AI-driven human machine collaboration suite, has been a game changer, enabling faster transformations that deliver concrete business benefits within months. Its 600 pre-built configurable and reusable digital solutions enable plug and play transformation of a range of business and technology functions, horizontal and vertical. Nearly 300 of our clients have used it to transform their business and IT operations. In traditional outsourcing deals, we saw more multi-services integrated deals. By consolidating multiple elements of the operation stack - processes, applications, and the underlying technology and infrastructure - with a single strategic partner, clients not only achieve greater accountability, but also reduce complexity and derisk their larger business transformations. |
The same rationale is driving more vendor consolidation initiatives that favor a few strategic partners with end-to-end service offerings, the right innovation capabilities and scale. All these trends play to our strengths. Our scale, structure, and ability to bring together different capabilities into a seamless service delivery team, helped us win several large deals throughout the year. # Investing in People The supplyside challenges of the last two years peaked in the first half of FY 2023, with employee churn reaching unprecedented levels. We broke out of the vicious cycle of hiring and counter-hiring within the industry by investing in onboarding an unprecedent number of fresh engineers - over 110,000 in FY 2022 and over 44,000 in FY 2023 - and training them on the technologies most in demand. # In FY 2023 we focused on utilizing the spare capacity built up in the prior year, and recalibrated our hiring especially as attrition started falling in the second half of the year. Our LTM attrition in IT services for the year was 20.1%. Net addition in FY 2023 was 22,600, and the closing headcount was 614,795. Our workforce continued to be very diverse, with over 150 nationalities represented and with women making up 35.7% of the employee base. Our investments in organic talent development continue to deliver exceptional outcomes. In FY 2023, TCSers logged 48.3 million learning hours, and acquired nearly 6 million competencies. Popular technologies witnessed unprecedented levels of interest from our employees. During the year, 53,000 TCSers acquired certification on hyperscaler cloud skills, bringing the total number to over 110,000, making TCS one of the Top 2 partners to the largest cloud providers. # Caring for Communities We continued to work with communities across the world, pursuing our long-standing commitment to programs in the areas of skills development, bridging of digital divides and STEM education. In FY 2023, we estimate that our community initiatives touched the lives of over 4.5 million beneficiaries - women, youth and members of marginalized communities. Our large programs in India around literacy, digital entrepreneurship and youth skilling continued to gain scale. Likewise, our STEM initiatives outside India. goIT is shaping the next generation of digital innovators in 42 countries, while Ignite my Future in School program has doubled its original goal, serving over 2 million students and educators in five geographies worldwide since inception in 2017. # So long, farewell This year marks a key milestone in my journey with TCS, and an important transition point for the company, as I step down from my role as CEO and MD on 31st May 2023. It has been an absolute privilege and an unparalleled learning experience to lead our company in the last six years, a period of tremendous growth and transformation for us. On a more personal note, I am grateful to Chandra, our Chairman, for his mentorship and backing over the years, to our Board members for their guidance, and to all our customers for the confidence they reposed in us. I take this opportunity to thank all my colleagues whose support and trust made my journey as CEO successful, satisfying and unforgettable. I also thank all my fellow TCSers whose energy, dedication and aspirations continue to power the organization's success. I have had the pleasure of interacting with some of you in person over the last decade. Your feedback and insights helped me learn and shaped my worldview. Thank you for all your support and encouragement. With enterprises relying on technology ever more to drive their competitive differentiation, technology intensity is rising and on a secular basis, the share of IT services within overall tech spending is also going up. I am confident that TCS' best years are ahead, and I look forward to watching the company's continued success from outside. Best Regards, Rajesh Gopinathan Chief Executive Officer and Managing Director (For FY 2022-23) Our employee volunteer program called HOPE (Hours of Purpose by Employees) resulted in over 2.8 million hours of volunteering effort towards promoting issues most relevant in their local communities, such as mental health, climate action, circularity, education, skilling, mentoring, and conservation. On the environmental front, we continue to make good progress in our net zero journey. We have brought down our absolute carbon footprint across Scope 1 and Scope 2 emissions by 71% over base year 2016, meeting our target two years ahead of time. This was despite increased electricity consumption in FY 2023 from employees' return to office. |
In addition to enterprise-wide initiatives for energy efficiency, we have also significantly increased our use of renewable energy. Renewable energy sources today make up 55% of the total (7.25% in 2016). # Letter from the CEO Dear Shareholder, I am truly humbled by this opportunity to lead this remarkable organization that I have been part of for 34 years. The culture, values and ethos of TCS and the Tata group have been an inspiration always. Your company has a very strong leadership team and a workforce that is highly motivated. It is my privilege to lead this talented team. As part of the transition, I interacted with a number of our customers, leadership teams and employees. This has further enriched my understanding of the depth of our customer relationships, customers' priorities and the opportunities ahead of us. I see a huge potential to create positive impact for our clients, our employees and for the broader community of stakeholders that we serve. As part of their continuing digital transformation journey, we see sustained focus on cloud adoption, data architecture, customer experience and business model transformation. Through these initiatives, our customers intend to avoid technology obsolescence, become an intelligent enterprise, introduce new products and services, orchestrate ecosystems and provide immersive, hyper-personalized experiences. In addition, all our customers have also committed to ambitious net-zero carbon emission targets. On top of these current focus areas, technologies like 5G, IoT, generative AI, virtual reality / metaverse, digital twin and others are also gaining attention and are likely to attract investments in the short to medium term. As technology adoption will remain a key driver of business growth and transformation for our clients, we have been relentlessly focussed on our clients' needs and have been investing in building newer capabilities to help them accelerate technology adoption. Your company continues to focus on enhancing the talent base of its associates, building partnerships with key technology providers, expanding the innovation ecosystem and building its own products and platforms. These business and technology trends drove a strong deal flow throughout FY 2023, peaking in the fourth quarter. We closed the year with an order book of $34.1 Bn. This along with the strong pipeline replenishment gives us a good visibility for the medium term. I would like to take this opportunity to thank you for your continued support in this exciting journey ahead. Best Regards, K Krithivasan Chief Executive Officer and Managing Director # The Year Gone by Named to FORTUNE® magazine's list of the World's Most Admired Companies, regarded as a barometer of corporate reputation. Evaluation criteria include innovation, social responsibility, quality of management, global competitiveness, talent management, and quality of products/services. # Q4 After a stellar 22-year career at TCS and a successful stint as Managing Director and CEO from 2017 to 2023, Rajesh Gopinathan decided to step down from his role, and resign from TCS effective September 15, 2023, to pursue other interests. The Board nominated K Krithivasan to step into the role with effect from June 1, 2023. File: AR_TCS_2022_2023.md Ranked the number one IT service provider for customer satisfaction in Europe in an independent survey of over 1,800 CXOs by Whitelane Research. This is the tenth consecutive year that TCS has received the top ranking in this survey. Of the top 23 IT service providers ranked on customer satisfaction, TCS topped the list, scoring 83%, versus the group's average of 75%. Announced an expansion of its long-standing partnership with Phoenix Group, UK's largest long-term savings and retirements provider, to digitally transform the latter's ReAssure business using the TCS BaNCS™ based digital platform, and to administer the insurer's 3 million policies. Consolidating on TCS' platform will help Phoenix Group drive synergies and enhance customer experience. # MOST ADMIRED WORLD'S COMPANIES 2023 Named to the Forbes list of America's Best Large Employers, based on a large, independent survey of US employees. TCS was also recognized as a Global Top Employer for the eighth year in a row, and as Top Employer in North America, Europe, Asia Pacific, and Latin America. Announced a special dividend of ₹67 per share, along with three interim dividends of ₹8 each. This, along with the final dividend of ₹24, amounted to a total dividend of ₹115 per share. The total shareholder payout for the year was ₹42,079 crore. Rated Baa1 by Moody's credit rating agency, reflecting moderate credit risk for entities in the investment grade category. |
The company's good corporate governance practices, extremely strong balance sheet, large liquidity and net cash position were cited as key credit strengths supporting this rating. Selected as a strategic partner by Bombardier, a global leader in aviation, to drive its organization-wide IT and digital transformation to enhance its agility. TCS will modernize the aviation leader's legacy systems across multiple verticals, deploy and integrate new systems around the S/4 HANA ERP platform and transform the operating model using AI and ML. TCS-sponsored marathons, such as the TCS New York City Marathon, TCS Amsterdam Marathon, TCS Toronto Waterfront Marathon and TCS Lidingöloppet returned to the streets, much to the delight of runners and spectators alike. The company also took on the title sponsorship of the TCS London Marathon. TCS New York City Marathon TCS Amsterdam Marathon TCS Toronto Waterfront Marathon TCS Lidingöloppet The Year Gone by | 12 # The Year Gone by Consumer and agent experience. Launched the TCS Quantum Computing Lab on AWS to help enterprises explore, develop, and test business solutions and accelerate the adoption of quantum computing, considered one of the most promising technologies of the decade. TCS will leverage the virtual research and development environment to design industry-leading solutions, build domain-centric performance benchmarks, and work with clients to co-create new use cases of quantum computing to tackle business challenges that defy the capabilities of conventional technologies. # Awards and Recognitions Tata Group Chairperson and TCS Chairman, N Chandrasekaran, was bestowed with the Eisenhower Global Leadership Award for his contribution to commerce, by the non-profit, Business Council for International Understanding. Hans Vestberg, the Chairman and CEO of Verizon, presented N Chandrasekaran with the award and described him as "one of the most purpose-driven and influential leaders of our time". # Partnerships and Collaborations Selected by Sainsbury's, a leading supermarket retailer in UK, as its transformation partner to modernize its infrastructure landscape using TCS Enterprise Cloud™. Additionally, TCS will provide end-to-end managed services for application support, information security, modern workplace services, and network connectivity. The new flexible and scalable digital core will help Sainsbury's provide better value to customers through innovation and lower cost to serve; drive growth with data-led, machine-first core operations; and meet its net zero goals. Selected by AGL, Australia's largest energy provider, as the partner for the Retail Next Program, which lays the foundation for their strategic business transformation into a multi-service retailer. The program aims to create a new unified platform for CRM, product catalogue and process automation. TCS brings together cross-industry expertise like service bundling and retail customer analytics, in addition to deep knowledge of utilities which will help AGL enhance its speed to market, and transform. Chosen by Rail Delivery Group, UK's leading rail industry membership body, for the creation of a Rail Data Marketplace. TCS will leverage the data syndication, monetization and marketplace features of its DeXAM platform on a leading hyperscaler platform to combine fragmented sources of rail data forming one digital service. This will optimize the sharing of data and real-time information to passengers and operational bodies, improve transparency and enable a UK-wide railway innovation ecosystem. Enhanced its award-winning Quartz™ solution to enable central and commercial banks to support the entire lifecycle of Central Bank Digital Currency (CBDC) issuance, book-keeping and transactions. With the enhanced solution, central banks will be able to manage the issuance and distribution of CBDCs while commercial banks can transact with other banks and payment services providers using CBDCs as well as offer their customers the ability to hold CBDC balances. Partnered with BT Group, UK's leading provider of fixed and mobile telecommunications, for its Digital Unit to boost its modernization plans. TCS will manage and ramp down over 70% of Digital's legacy technology estate and boost its capacity to accelerate the build of its new strategic technology architecture, supporting the Group's growth. Won the 2022 Microsoft Supplier of the Year award in the large supplier category. TCS was recognized for consistently delivering new capabilities with automation solutions that help improve accuracy for Microsoft, while also increasing its speed to market. TCS was cited for its expertise across industries that enables Microsoft to better serve customers, showcasing what it means to focus on strategy, impact, agility, and modernization. # Research Partnership Announced a major applied engineering and research partnership with The National Robotarium, the UK's largest and most advanced AI and robotics research center. |
The partnership will work on innovation, to support early-stage AI and robotics product development, entrepreneurship, job creation and building digital skills in the workforce. Delegates from The National Robotarium and TCS announce a major research partnership. # Partnered with C&S Wholesale Was the only Indian brand in the Top 50 Grocers, Inc., to build a new cloud-based operations platform to reduce the company's carbon footprint and enhance the customer experience. Using AI and machine learning, C&S's new operations platform will monitor traffic patterns and identify optimal distribution routes, thereby reducing food waste and achieving greater fuel efficiency. TCS was also named among the Top 10 fastest growing brands with its brand value growing 61% YoY (as measured by Kantar). Later in the year, the company was ranked the second most valuable IT services brand (brand value up 2% to US$17.2 billion) by Brand Finance. # Q2 Launched the TCS Mobility Cloud Suite, a rich toolbox of cloud-enabled software to help automotive manufacturers and suppliers innovate, adapt, and thrive. It includes ready-to-deploy automotive-specific digital frameworks, custom solutions, accelerators, and use cases that enable automakers and their solution providers to embrace digital technologies and new business models across the entire mobility value chain. Boots, a leading UK health and beauty retailer, announced the launch of the new INNOVATE workspace, powered by TCS Pace™, at its headquarters in Nottingham, UK. INNOVATE aims to nurture a start-up culture within the organization and is designed to be an agile incubator, combining creative space with top talent and emerging technology, to drive innovation. Launched its ESG Integration Solution on AWS to help financial institutions more easily and accurately measure the impact of environmental, social, and governance (ESG) factors in their investment analysis. With a cloud-native ESG data ingestion platform and proprietary ESG scoring model, the solution is integrated with AWS Data Exchange, and enables greater transparency and flexibility in measuring investment portfolios against ESG criteria and benchmarks. Ranked #2 in CRN's 2022 Solution Provider 500 list that ranks the top system integrators, IT services providers and IT consultants by revenue in North America. In the UK, TCS retained its #1 position by revenue across the entire technology ecosystem including hyperscalers, software vendors and IT/ITe service providers in the 2022 TechMarketView UK Software and IT Services Supplier Rankings report. Launched TCS Pace Port™ Pittsburgh, its fourth global research and co-innovation hub after Tokyo, New York and Amsterdam. The latest facility, in the Carnegie Mellon University campus, specializes in innovation in the manufacturing and utilities sectors. Later in the year, TCS launched its fifth Pace Port in Toronto. # Former CFO, V Ramakrishnan Former CFO, V Ramakrishnan ("Ramki") passed away in July 2022. He served as the CFO of TCS from February 2017 until his retirement in April 2021. He was ranked Best CFO in the All-Asia Executive Team survey by Institutional Investors magazine. He was an accomplished professional known for his tremendous dedication and commitment, with an association of over four decades with TCS and the Tata Group. # Selected by The Kansas Department of Labor Selected by The Kansas Department of Labor to deploy a modern, secure, cloud-based platform for the state's unemployment insurance program, replacing its 70s-era mainframe system. Once deployed, the new system is expected to drastically improve the delivery of services to Kansas residents. The TCS-built platform is currently used by the state labor departments in Connecticut, Maine, Mississippi, Missouri, and Wyoming, and is under implementation at a couple of other states. Named by FinanceAsia in its list of Asia's Best Companies 2022, as the Best Managed Company in India, as well as Most Effective in Creating and Implementing D&I Policies over the past 12 months. The list is based on their annual poll of investors and analysts in the region. |
# V RAMAKRISHNAN (1957-2022) FORMER CFO, TCS # The Year Gone by 14 # TCS Integrated Business Model # Value Creation using the Five Capitals # Stakeholder Payout, Reserves |Social Capital|Intellectual Capital| |---|---| |Investors, Customers, Employees, Communities|Domain knowledge| | |Contextual knowledge| | |Intellectual Property| FINANCIAL CAPITALSources of funds from business operations, financing or investing activities |Natural Capital|Human Capital| |---|---| |Renewable and Non-renewable Resources|Skills, competencies, capabilities, knowledge and motivation of employees| # OPERATIONS - Talent Development - Talent Engagement - Services & Solutions - Quality Management - Management, Delivery, Products & Platforms - Research & Innovation - Talent Acquisition - Sales, Project Partners - Technology and Co-Innovation Network (COIN) # Customer Goodwill/Brand Value/CSR/Taxes # Contextual Knowledge # VALUE CUSTOMER ENGAGEMENT TCS Integrated Business Model | 15 # Financial Capital TCS' longevity is testimony to the strength of our business model and our ability to reinvent ourselves in an ever-evolving technology landscape to stay relevant to our customers while remaining focused on creating value for all our stakeholders. # Outcomes Best in class profitability and strong balance sheet provide greater ability to invest in newer capabilities and to weather economic downturns, macro uncertainties. Consistently high shareholder returns enhances social capital. |value generated1|Economic| |---|---| |₹225,458 cr|+ 17.6%| |₹127,522 cr| | |₹42,079 cr|+18.6%| |Employee cost|+10.7%| |Shareholder payout including unpaid final dividend|₹43,699 cr| |+22.2%| | |₹2,500 cr|Other cost of operations| |+11.5%| | |₹866 cr| | |R&D and innovation including innovation center development|₹14,604 cr| |+10.3%|Tax expense| 1 GRI 201-1 Financial Capital | 16 # Revenue Trend # CAGR 12.9% | |FY 2019|FY 2020|FY 2021|FY 2022|FY 2023| |---|---|---|---|---|---| |Revenue (₹ crore)|156,949|164,177|191,754|225,458|Operating Profit| |Operating Margin|86.19%|89.27%|103.62%|115.19%| | # Earnings per share # CAGR 11.4% | |FY 2019|FY 2020|FY 2021|FY 2022|FY 2023| |---|---|---|---|---|---| |(Amount in ₹)|13,148|14,055|14,147|16,000|17,563| # OCF and Cash Conversion # Operating Cash Flow (OCF) | |FY 2019|FY 2020|FY 2021|FY 2022|FY 2023| |---|---|---|---|---|---| |(₹ crore)|39,949|38,802|42,481|16,000|19,726| # Cash Usage# |Shareholder Payouts|17,563| |---|---| |Invested Funds|0.2%| |Acquisitions etc|7.6%| |Capex| | |Shareholder Distribution|91.2%| # Shareholder Payouts |Dividend|Special Dividend|Buyback including tax| |---|---|---| | | | | # Shareholder Payout ratio (Including special dividend and buyback, including tax) # # includes proposed final dividend # *Excluding provision towards legal claim # Financial Capital # 17 # Human Capital # Best in Class Talent Management |Workforce|614,795|Globally distributed, highly localized| |---|---|---| |Net Addition|22,600|Recalibrated to falling attrition; highest ever gross addition of lateral hires| |Talent Retention|20.1%|Best in class, despite unprecedented employee churn across the industry; expected to revert to normal range in FY 2024.| # Talent Diversity and Inclusion 43.6% Rising up the ranks |Nationalities|150| |---|---| |% Women improved at mid- and senior levels over last 5 years|41.8%| |88% Millennials| | |~220,000+ Women|35.7% of workforce| |60%+ Increase in senior women executives over last 5 years|29.5%| |794 Women patent holders|30.7%| # TCS Employees by Region, Age and Gender | |Junior|Middle|Senior| |---|---|---|---| |India|12.0% >50 yrs|40-50 7.2%|30-40 yrs 11.7%| |North America|0.9% >50 yrs|21.3% 40-50|20.5% 30-40 yrs| |United Kingdom|16.3% >50 yrs|5.5% 40-50|15.8% 30-40 yrs| |Europe|19.9% >50 yrs|17.2% 40-50|13.3% 30-40 yrs| |Emerging Markets|5.7% >50 yrs|12.2% 40-50|13.2% 30-40 yrs| |APAC|6.5% >50 yrs|6.8% 40-50|20.6% 30-40 yrs| 1 GRI 401-1, GRI 405-1 # Talent Development TCS takes a purpose-centric approach to learning and development that leverages horizontal collaboration and the abundance of internal expertise. Catering to millennial tastes, training is just-in-time, just-for-me and just-enough. |Competencies acquired|Employees deep skilled| |---|---| |6 million|194,000| # Average Learning Hours per employee2 |Level|Average Learning Hours| |---|---| |Senior|41| |Middle|43| |Junior|112| # Gender Distribution |Male|Female| |---|---| | | | # TCS Elevate 407K employees pursued learning linked to career growth. # High Talent Employees 22,000 Employees identified as high talent, with higher pay. # Digital Technologies Training 500,000 employees trained in digital technologies; 7.5 competencies per employee on average. # Contextual Masters 64,000 CMs, +28% YoY, 26% Women. # Cloud Certification 53K certified on hyperscaler cloud technologies in FY 2023; 110K in all. # Mid-level Training 90% participation; 60% certified on market relevant technologies. 2 GRI 404-1 Human Capital | 19 # Intellectual Capital The company channelizes its research and innovation efforts and outcomes towards building better futures through two external facing brands: - TCS Research produces foundational inventions that impact industry and society. - TCS PaceTM brings the best of TCS' intellectual content, innovation assets, capabilities, and practices to clients. |
# Highlights |40+|260+ Research and Innovation Publications|80+ Academic Partners| |---|---|---| |2,878/7,305 patents granted/ filed (cumulative)|5 Pace Ports|New York | Toronto | Tokyo | Amsterdam | Pittsburgh| |2,700+ start-up partners| | | # Focus Areas of TCS' R&I: - Purposeful AI - Computing Futures - Digital Sciences - Sustainability # Physical Sciences - Meta Materials for Communications - New Materials Formulation - Li-ion Batteries - Catalysis - Effluent Treatment # Behavioural and Business Sciences - Emotional Wellbeing for Enterprise - Consumer Behavior in Retail - Gamified Engagement and Learning - Understanding Personae in Connected Homes # Life Sciences - Generative Design in: - Drug (including vaccines and proteins) design and synthesis - Molecules, Formulations and Manufacturing Processes # Computing / Data Sciences - High Performance Computing and AI - Multicloud deployments - Cyber Cloud- Data Residency, Compliance, Security- Resilience on Cloud - Low Energy Hardware, Low Energy High Performance Computing - Edge Hardware for Compute and Communication - Quantum Communications - Robo Logistics - Learning Aided Adaptive Software - Digital Transformation for Applications - AI in Software Development Lifecycle and Data Analytics - AI for Cybersecurity - Privacy preserving Service Operations, Privacy preserving Biometrics, Trustworthy AI - Remote Sensing Spacetech for Sustainability and Infrastructure - Energy Internet and Carbon Market - Sustainability in Manufacturing, Carbon Capture, NetZero Transition and Renewables Intellectual Capital | 20 # Products and Platforms - 10 new wins and 15 go-lives in FY 2023 - Highlights: - Services more than 35% of the world's banking population - 8 out of top 10 custodian and asset management firms run on TCS BaNCS - More than 100 million transactions run on TCS BaNCS Cloud daily - Records 10 million new trades per day (peak) across 100+ countries - Offers ready market connectivity to 45+ local markets for settlements - Services over 30 million life, annuity and pension policies and 135 million property and casualty policies across the globe - World leading cognitive automation software for IT and business operations - 18,832 ignio trained professionals, 8,664 ignio certified professionals till date - 186+ deals closed, 27 new customers went live in FY 2023 - 450+ new wins in FY 2023 - 62 million candidates assessed - 70+ new learning programs launched - 16 patents filed in FY 2023; 23 granted - Over 1,900 corporates now use TCS NQT for fresher hiring - Comprehensive suite for digital transformation of drug development and clinical trials - 700+ clinical trials supported by TCS ADD Platforms till date. - 2 new wins and 4 go-lives in FY 2023 - Plug and play SaaS based business platform to digitally transform business, network and revenue management domains of subscription-based businesses - 5 new wins and 6 go-lives in FY 2023 - AI and ML powered merchandise optimization platform that enables retailers to optimize their space, mix and price in an integrated manner - 2 new wins and 4 go-lives in FY 2023 - AI powered enterprise digital twin covering customer, product and process to help business leaders simulate and optimize enterprise decisions, predict and proactively manage outcomes - Helps businesses achieve: - Upto 10-15% increase in revenue - Reduced revenue leakage - Upto 2X faster time to market - Upto 15% reduction in cycle time - Enhanced customer experience - Minimized waste - 10 new wins and 7 go-lives in FY 2023 - AI powered unified commerce platform to orchestrate unified omnichannel customer journeys and help businesses roll out new services and apps quickly without worrying about channel constraints. It can serve diverse lines of business - general merchandise, discount, specialty, fashion, restaurant, post office, telecom, and travel and hospitality industries - 8 go-lives in FY 2023 - MasterCraft - Digital platform to optimally automate and manage IT processes. |
FY 2023 highlights: - Processed 325 billion records for data privacy and 15 billion records for data quality - Automated generation of 60+ million lines of Java and JavaScript code, with over 50% productivity gains - Analyzed 600 million lines of legacy code, delivering a productivity improvement of 20-30% - 111 new wins in FY 2023 - SaaS-based, scalable Agile DevOps platform to accelerate software development and delivery and integrate DevOps tools - 23 new wins and 6 go-lives in FY 2023 - Intelligent smart contract development toolkits, Integration solutions and 'Designed for DLT' business solutions that provides foundational technology, tools and business components for creating distributed ledger solutions across varied industries - 5 new wins and 6 go-lives in FY 2023 Intellectual Capital | 21 # Social Capital # Investors TCS' business model and strategy have resulted in deep and enduring customer relationships, a vibrant and engaged workforce, a steady expansion of its addressable market, a strong reputation as a responsible corporate citizen and a proven track record in delivering longer term stakeholder value. All of this has significantly enhanced the company's brand value, which is a quantifiable measure of its social capital with stakeholders. # Customers Customer-centricity is at the core of TCS' business strategy. It seeks to deliver superior outcomes, and build strong, enduring capabilities, and launching new services and solutions with which to add value in newer parts of the client's business, TCS continually expands and deepens its client relationships. # Large Client Metrics | |Rev per US$ 1 Million+ Client ($ Mn)| |---|---| |FY 2019|269| |FY 2023|291| |FY 2019|215| |FY 2023|133| |FY 2023|99| |FY 2023|60| # Analyst Relations TCS has a robust engagement program with research firms and industry analysts. Briefing industry analysts and participating in competitive assessments ensures visibility with prospective clients who use such reports to evaluate vendors. # Outcomes Expanding participation across broad range of stakeholders across the enterprise including business heads, CMOs, CROs, COOs, CFOs and even CEOs. Continual expansion of customer relationships in terms of services consumed. # Branding The strength of its customer relationships, reputation as a good employer, and the goodwill it enjoys with investors, local communities, academia and other stakeholders have helped build up the TCS brand. The brand has been strengthened by its tagline 'Building on Belief', marketing campaigns and sponsored events. TCS is among the Top 2 brands in IT services by brand value according to Brand Finance. # TCS Brand Valuation |FY|2019|2020|2021|2022|2023| |---|---|---|---|---|---| |Brand Valuation ($ billion)| | | | | | # Community |Education|Literacy|Entrepreneurship|Youth employment|Health & Wellness|Business with purpose| |---|---|---|---|---|---| |Ignite My Future|Literacy as a Service|BridgeIT|31K Marginalized Youth trained|Tata Medical Center, Kolkata and Cancer Institute, Chennai|Engaged over 433 customers, creating 186 purpose partnerships| |Global Impact|Global Impact|347 active entrepreneurs in FY 2023|Over 117,600 new patient consultations| | | |Over 293K students|Over 1.1 Mn learners|Over 41K students| | | | Our CSR programs on Education, Employment and Entrepreneurship ensured the inclusion of marginalized talent through social transformation. |Enhancement in income|Higher earnings for women|Students who completed|LaaS Program participants| |---|---|---|---| |2.3x|2.5x|88%|81%| BridgeIT participants compared to other self-employed in rural India demonstrated understanding of how technology can be used to improve their community. ₹866 crore CSR Spend 4.5 million beneficiaries 150K+ volunteers 2.8 million hours 7 major partnerships for program implementation at scale 1 GRI 413-1 Social Capital | 23 # Natural Capital TCS combines its strong sense of purpose with digital expertise and innovation to drive not only its own sustainability journey, but also that of its customers. The company's environmental stewardship rests on four pillars: carbon footprint mitigation, water conservation and recycling, waste reduction and recycling, and preserving biodiversity. # Energy Management and GHG Emissions Reduction1 |Target|70% reduction of Scope 1 + 2 emissions by 2025 (vs base year 2016) and Net Zero by 2030| |---|---| |Initiatives|- 85% of emissions across Scope 1 and Scope 2 due to purchased electricity for office blocks. - Prioritized energy optimization and greater use of renewable energy. - Use of Clever Energy to optimize energy consumption. |
| |FY| |2016|2023|2016|2023|2016|2023|2016|2023| |---|---|---|---|---|---|---|---|---|---| |Total Energy Consumed (in GWh)|592|418|Renewable Energy Consumed (in GWh)|55.2|Total Scope 1 + 2 emissions in '000 tCO2e|366|Value chain emissions in '000 tCO2e|1.66|1.65| # Achievements Renewable electricity as % of total electricity consumed: 37.2% (112 GWh in FY2022) Energy efficiency initiatives at TCS data centers in Mumbai and Chennai: 10.2 MWp Rooftop solar capacity across campuses % Total office space (for India) as per IGBC standards: 64.4% in 2016, 64.6% in 2023 1 TCFD Metrics and Targets A, B and C # Water Conservation Target: 3% YoY reduction in freshwater consumption across owned campuses Initiatives include conservation, sewage treatment and reuse, rainwater harvesting (RWH) and employee awareness. All new campuses have been designed for 50% higher water efficiency, 100% treatment and recycling of sewage, and rainwater harvesting. # Waste Reduction & Reuse Target: Reduction in waste generation, maximizing recycling/ reuse to divert waste sent to landfill |100%|Recycling of regulated wastes, e-waste, printer cartridges, paper, packaging and plastics| |---|---| |88.4%|Food wastes recycled in biodigesters and organic waste converters on campuses| # Biodiversity Conservation and enhancement initiatives within TCS campuses. TCS believes in preserving and enriching the biodiversity within its campuses. Various initiatives have helped support: - 593 species of flora - 187 species of fauna - 39,000 well grown trees. # Water Consumption Liters of fresh water: 2.29 Bn consumed in FY 2023 Water from RWH; 90% from third party sources; 7.6% from ground water Water recycled: 88% (TCS owned campuses) Increased water consumption YoY at 36% owned campuses due to 5 times increase in headcount Natural Capital | 25 # Helping Versuni become a Digital-First, Innovation-Led Standalone Entity Growth and transformation are often constrained by the challenge of integrating with the legacy operations stack, and the complexity that entails. So when health-tech giant Royal Philips sold Philips Domestic Appliances in 2021 to Hillhouse, a private equity firm, the standalone company, rebranded as Versuni, saw the separation as a once-in-a-lifetime opportunity to wipe the slate clean and transform into a digitally lean, agile, and innovation-led organization. Versuni partnered with TCS in its transformation journey from strategy through execution, with a vision to embed insights and agility into core processes, enabling shorter time to value and quicker responses to market changes through a new cloud-first application landscape. The program entailed decoupling the company from the parent's systems, while simultaneously transforming it across all business domains, within an ambitious 2-year timeframe. File: AR_TCS_2022_2023.md The business transformation, enabled by SAP as the digital core, establishes best practices-based processes from the consumer products industry and simplified ways of working to drive speed, agility and insights-led decision-making. TCS enabled Versuni's strategies for driving revenue growth opportunities and innovative product launches. The new processes support Versuni's journey to develop products made with more sustainable materials, that are easier to repair, refurbish, recycle, and help to reduce waste. Enhancements were made to deliver superior business outcomes across every function. Integrating supply chain planning with factory scheduling will enable higher warehouse productivity and more timely shipments. AI-powered insights in finance will help improve cash flow, free up cash and drive efficiencies in back-office functions. The new people processes will provide a better employee experience and enable a more responsive HR function. Partnering with TCS helped Versuni deploy a new digital foundation and operate as an independent entity. The new fit-for-purpose stack enables Versuni to more effectively respond to the fast-changing demands of the consumer products market, and pursue its vision of turning houses into homes, and building lifetime engagement with consumers. I am really happy to have partnered with TCS in this journey. TCS has been an invaluable partner in our process and digital transformation journey with SAP as the main enabling technology suite. The hard work and dedication demonstrated by each member of the TCS team has not gone unnoticed. The leadership advisory services and commitment combined with the team's domain and technology expertise is helping us get to our goals as an insights-led digital company. Corine Adams CIO, Versuni TCS' exceptional leadership, expertise, and flexibility combined with their passion and thorough understanding of our mission to become insights-led, makes them an outstanding partner. The TCS leadership team has been with us every step of the way. This transformation will help us continue to innovate and to stay true to our mission to turn houses into homes. Henk S. |
de Jong CEO, Versuni Customer Stories | 26 # Enabling Eversource Energy's Transition to a Green Energy Future Energy utilities are leading the world's energy transition, investing in renewable energy sources as part of their journey to carbon neutrality. Leaders in the sector are using technology innovatively to draw environmentally conscious consumers looking for greener choices, and grow their new clean energy businesses. Eversource Energy is a Fortune 500 energy company that operates New England's largest energy delivery system, with 4.4 million customers across Connecticut (CT), Massachusetts (MA) and New Hampshire. It is focused on making its operations carbon neutral by 2030, and bringing more clean and affordable energy to New England. # Making green energy affordable Making green energy affordable is central to our business strategy. Its technology enablement was a fairly complex program with multiple sub-programs running concurrently. TCS did an outstanding job in collaborating well with multiple stakeholders and managing risks very well. The TCS team's contextual knowledge of the Eversource business and technology landscape resulted in a high quality solution that helped meet the regulatory mandate as well as Eversource's clean energy and energy affordability goals. David Coco Director, IT Business Solutions Eversource Energy # Partnership with TCS Eversource partnered with TCS to build a solution that would help them on-board distributed solar power capacity within its grid by purchasing power from residential, industrial and commercial customers who install solar panels and storage on their properties, and enabling them to avail of incentives offered by their respective states, as part of state-level Net Zero programs. The TCS-built solution includes onboarding of new solar customers, a customer application that helps keep track of the units generated, and a pricing engine that uses a declining block pricing mechanism to incentivize early enrolment as a producer. It also includes a billing system that processes recovery charges, solar credits and incentive payments, and enables flexible payment options as well as hardship relief options to improve affordability and increase adoption of energy efficiency programs. To facilitate quick roll outs across states, TCS architected a reusable framework that would simplify adoption of each state's incentive program into Eversource's core platform, enabling the utility to pursue a very aggressive implementation schedule for each state. Using this solution, Eversource has been able to leverage state incentives to make green energy affordable and rapidly benefit nearly 430,000 customers in CT and MA so far, while driving growth of its clean energy business. At the same time, it is projected to produce over 9,700 MWh of solar power, accelerating not only its own journey to carbon neutrality but also that of the states it services. Customer Stories | 27 # Innovate, Adapt, Thrive: # A Fireside Chat K Ananth Krishnan CTO Harrick Vin CTO Designate # How does TCS help clients innovate, adapt and thrive? KAK: With all the geo-political tension and economic uncertainty in today's world, companies need to respond quickly to events on the ground and cope with surprises, while staying focused on fulfilling customer needs and wants, with innovative products and services. TCS helps them on both these fronts. We help build a future-ready, digital core that enables quick, insights-driven decision making. We transform IT and business operating models using technology, making them more efficient, agile and responsive, freeing up resources to support innovation. Partnering with us enables our clients to try out a larger number of innovative ideas quickly, and launch new products, services and business models to drive growth and transformation. Innovate, Adapt, Thrive refers to how our scale, full services capability and innovation offerings enable our clients to respond to short-term challenges while accelerating their pursuit of longer-term aspirations. # Innovation is about having a lightbulb moment. How do you scale that? HV: People often relate innovations to serendipitous discoveries. We help clients structure and scale the innovation process using the TCS Agile Innovation Cloud (AIC). This framework brings together the best of TCS' talent, research and innovation inputs, global capabilities and ecosystem partnerships to scale up and speed up 'Ideas to Outcomes'. For an insurance major, we worked with the client's teams and collated actionable innovation ideas through a series of brainstorming workshops using the Clay Map. Leveraging our AIC, we rapidly built POCs every quarter, some of which got turned into MVPs and rolled out across the enterprise. In just eight months, dozens of innovation ideas were identified, and 24 progressed to become MVPs. |
One reason for this high yield is that our teams leverage their contextual knowledge, learned over years spent immersed in the client's IT and business landscape, to come up with ideas deeply rooted in that organization's reality and therefore more likely to succeed. # Generative AI is the talk of the season. What is the business opportunity around it? KAK: We see interest in exploring use cases right across the enterprise. The most obvious areas are conversational systems, content creation and digital marketing, and activities which require processing of large amounts of unstructured data, text, images and higher-level abstraction. Legal and procurement teams can use it to trawl through contracts to identify specific clauses, or prepare a summary of variations of a particular clause. HR could use it for handling employee queries. Sales and customer service want smart assistants that can explain product features and answer questions. In IT, generative AI can create basic code snippets or quality check developed code for adherence to standards. These are just the initial ideas based on the standalone capabilities of generative AI. Over time, you will see newer use cases that are more combinatorial, driving greater spending by enterprises and expanding the opportunity significantly. # If generative AI takes over coding, won't the IT services industry become redundant? KAK: Software that writes software has been around for a long time. In fact, this is the 50th anniversary of TCS' very first offshore development project, delivered using an in-house code generator. In the 80s, our TRDDC was famous for its tools foundry, which could generate custom code translators on demand, converting source code from any programming language to any other language. TCS MasterCraft™ is today used by hundreds of our clients for developing, transforming and maintaining model-based applications. In fact, our award-winning product suite, TCS BaNCS™, is written and maintained using MasterCraft. Even though there is effort involved in defining the model up-front, clients see significant productivity benefits. The new low code, no code platforms have done away even with those overheads. Their graphical drag and drop user interface empowers people with no coding knowledge to build sophisticated applications very quickly. And yet, none of this has led to any demand compression. It has only led to more growth. We believe generative AI will be no different. Like prior breakthrough technologies, it will sharply bring down the effort per function point, driving up programmer productivity immensely. This will result in greater consumption, with volume growth more than making up for the effort deflation. # What is the evidence for this thesis? HV: The evidence is empirical. Every new generation of technology has led to reduction in programming effort per function point. But while that has steadily fallen, aggregate spending on IT services has only risen year after year, over decades. Take for example, the switch from assembly language to C. Its compilers came with large, extensible libraries of reusable pre-defined procedures. A developer could invoke a procedure with one line of code in C and embed its entire logic in the code base, without actually coding all of it from scratch. Three lines of C accomplished what took 30 lines in assembly language. The 10x effort deflation didn't result in mass layoffs of programmers. Instead, there was an explosion in software development because the same IT team could now build ten times as many function points. Similarly, enterprises adopted offshore outsourcing, it led to a big cost deflation, but nobody's IT budgets deflated. Instead, those savings went into building new systems and volumes rose to fill budgets and spending on IT services has only expanded. Likewise with low-code, no-code platforms. Why is that so? Farm mechanization caused effort deflation and rendered the agricultural workforce redundant in the West. KAK: With most goods and services, when the price falls, any increase in volume is limited by how much of that good or service the market can consume in a defined period. When farm mechanization reduced the cost of tilling, the increased demand for men in tractors was not large enough to compensate for the effort deflation because there was only so much land available to till. Demand for IT services behaves differently. In every enterprise, there is significant unmet demand. Every CIO has limited capacity for new system development, resulting in a requirement backlog that never gets fulfilled. Technologies like generative AI or low code-no code can help a CIO expand capacity and accomplish much more with the same budget. |
But even then, the backlog never goes away because there is no limit on business users' ingenuity or competitive drive. Demand just rises to fill the incremental capacity created by new technologies. HV: The emergence of new technologies triggers more ideas, experimentation and more demand for our services. To that extent, business application of generative AI, along with other technologies, will itself drive the incremental demand that fills up the capacity it frees up through higher productivity. Indian IT companies are seen as fast followers on new technologies. Will that change with generative AI? KAK: We have been leaders for a while, but perceptions can be too rooted in historic stereotypes to recognize the change. Back in 2008, when the term SaaS was still new, we had built a subscription-based, single instance, multi-tenant core banking platform using TCS BaNCS for small banks in India. A similar model is powering start-up banks in Israel today. The insurance platform launched in 2009, with shared services bundled in, went on to make us the market leader in life and pensions administration in the UK. Historically, gaining leadership in IT services on any new technology required just training sufficient numbers of people in that technology, ahead of market demand. In the last decade, we not only did that at scale on the entire class of digital technologies, but also invested in higher order capabilities so we could advise our clients on how best to harness the combinatorial power of new technologies in their specific business context. We scaled up our Research and Innovation, exploring use cases across different industries, creating solutions and showcasing them at our innovation centers. We expanded COIN, created new innovation frameworks and set up Pace Ports, our co-innovation hubs, across the world. Today, we not only have a large number of patents, but also the largest portfolio of products and platforms in our peer set, helping win large transformational engagements that uniquely distinguish us. We are helping clients explore and develop end-to-end scenarios in combining technologies like quantum computing, generative AI, 5G and the emerging 6G, and new concepts in cyber security. Here in India, we have stitched together a fully indigenous network stack for 4G and 5G, a unique achievement that differentiates us from our global peers. Elsewhere, we are pursuing 5G-enabled opportunities in operational technologies such as autonomous machines and remote operations. We are looking at emerging cross-industry ecosystem business models in sustainability and energy transition, which will be the big drivers of growth in the coming years. HV: On the cloud, the biggest technology trend in recent years, we were one of the earliest to set up dedicated business units for each of the three leading hyperscaler clouds. Our early investments in building deep expertise and a large portfolio of innovative cloud-native solutions helped us capture tremendous growth and gain share. We are today one of the largest partners - in some cases, the largest partner - to each of those providers, in terms of number of employees with certifications, volumes of workloads migrated to the cloud and in number of solutions and intellectual property on their platforms. We are the launch partner for their latest offerings, whether it is AWS' Mainframe Modernization, Finspace, and IoT Fleetwise offerings, or Azure's Sustainability, Supply Chain Platform, and Financial Services and Retail Industry Cloud, and now for Google Cloud's Generative AI solutions. If all this isn't leadership, what is? # Revolutionizing Small Value Payments in South Africa BankservAfrica, Africa's leading automated clearing house, has been facilitating payments in South Africa and the region, for over five decades through its seamless interbank clearing and settlement services. It has a track record of pioneering innovations like the SASWITCH, a national network of interoperable ATMs, in the mid-80s. When the South African Reserve Bank unveiled its Vision 2025 strategy to reform the South African national payment system framework, BankservAfrica took the lead along with its ecosystem partners, and engaged TCS to build a new platform for rapid payments that would usher in the era of modern, cost-effective, instant digital payments on the continent. TCS designed a high availability, containerized, cloud optimized solution with TCS BaNCS for Market Infrastructure at its core, using high performance microservices for clearing and payment. Hosted on a public cloud, the solution is very resilient and can auto-scale. On the front-end, users can make a payment, or a request for payment, through a payment service called PayShap, formally launched in March 2023. |
Very conveniently, users don't need to enter the recipient's bank account or branch code details to make payments. Instead, they can use a unique identifier such as the recipient's mobile number, or a bank-generated identification number, which serves as a proxy for the full banking details. This proxy and resolution is enabled through a tamper-proof blockchain-based solution powered by TCS' Quartz Smart Solution. By democratizing access to a frictionless system for low value payments, TCS' innovative solution for BankservAfrica has the potential to reduce the use of cash for small transactions and accelerate formalization of the unorganized sector. It will drive new fee-based revenues for banks, and also offer customer insights with which they can offer credit to more consumers. This will not only improve financial inclusion, but also add to South Africa's GDP growth - a fitting outcome for two very purpose-driven organizations that came together to build this platform of national importance. BankservAfrica views cost-effective digital payments as a pathway to improving credit access and financial inclusion in South Africa. After an extensive evaluation, we selected TCS for their deep understanding of the payments ecosystem, global experience, technological expertise, intellectual property and shared values. The outcome has been very gratifying. By changing consumer behaviors, PayShap has the potential to reshape sectors and transform the South African economy. Roshan Moonsamy Interim CEO and CFO BankservAfrica Customer Stories | 30 # Supporting Takenaka Corporation Realize its Vision of a Sustainable Society Founded by a master builder (toryo) more than 400 years ago, Takenaka Corporation has specialized in building construction with an integrated design-build approach that includes initial planning and aftercare services like maintenance. It has redefined urban landscapes in Japan and around the world, with famous landmarks like Tokyo Tower and Changi International Airport. At the core of its longstanding business success is its passion for innovation rooted in its toryo spirit, quality management, and its commitment to realizing a sustainable society. We selected TCS for supporting our digital transformation not only because of its accumulated global knowledge and technological capabilities, but also because throughout the long histories of both companies, there is a common bond in our corporate cultures of valuing stakeholders, including society and customers as well as employees. Building 4.0 will turn the dreams of our stakeholders into reality, and we would like to develop it as a foundation to connect with a sustainable society of the future. Keizo Iwashita General Manager of Digital Division & Executive Officer Takenaka Corporation # Takenaka's Vision for 2030 Aims to realize a fourth industrial revolution in the building industry by embracing digital transformation across the construction value chain. It is addressing key problems facing the industry in Japan, such as labor shortage, by using digital technologies to increase employee productivity and improve the work-life balance of employees. Its innovation initiatives include AI-based design and construction planning, next-generation work sites with construction robots and remotely operated cranes, and environmentally conscious smart buildings with intelligent controls using IoT. The foundation for this innovation is the Building 4.0TM digital platform, which is being developed and operated in partnership with TCS. Building 4.0TM will integrate data from sales, design, estimation, engineering, construction management, facilities management services, human resources and accounting. This will enable superior decision-making across a wide range of operations through advanced analysis using machine learning and AI. In building design, for example, structural engineers can use AI-based cross-section estimations to more efficiently implement optimal structural designs. In construction, it can enable better construction planning using accurate forecasts of materials and personnel required to achieve target schedules, improve visibility of project progress, and enhance labor productivity. TCS is supporting Takenaka in promoting innovation, building construction digital twins, simulating human behavior, utilizing knowledge of the construction field, and exploring "what-if" scenarios. The knowledge gained from these efforts will help Takenaka develop comprehensive and sustainable solutions through better designs, understand project risks, and improve KPIs for quality, cost, schedule, safety, and the environment. Through Building 4.0TM, Takenaka will continue to create new value for society and customers while improving business efficiency. It will also contribute to the realization of a sustainable society enabling new architecture and urban creation services that is in harmony with the environment and local communities. Customer Stories | 31 # Q&A with Samir Seksaria CFO Milind Lakkad CHRO You stood out in the industry with virtually zero attrition at senior levels. Now you had CEO-level attrition for the first time in your history. |
What does this say about your retention of senior talent? ML: One swallow does not a summer make. This unprecedented event at TCS is just a reminder that CEOs are human too, and might want to pursue their dreams and aspirations just like anybody else. As for our track record in retaining senior leadership talent, it remains industry-leading. I am proud to say that almost the entire team of 25 business heads we had created in 2008 is still in TCS. We have over 125,000 TCSers today with an average tenure of over 10 years in TCS. This cohort represents the true strength of TCS. They are the custodians of our culture, values and institutional memory, and have been central to our ability to weather the unprecedented attrition and influx of fresh talent without letting it affect the high quality of project outcomes that our clients have come to expect from TCS. We not only retained our leadership talent better, but also expanded the leadership pool six-fold in the last five years by incubating a next generation of leaders running sub-ISUs, with P&L responsibilities. The breadth and depth of our leadership bench today makes our succession planning an industry benchmark, with multiple equally-qualified successors for any leadership position, starting from the CEO down, as you recently witnessed. Is normalizing attrition a margin tailwind for FY 2024? What is your margin outlook for the year? SS: Normalizing attrition is definitely a relief, but I wouldn't call it a tailwind. We incurred a 1.4% margin headwind in FY 2023 from backfilling and retention expenses. If we onboarded a lateral hire at a 20% premium during the year, that increase in employee cost is a recurring one. But yes, hopefully we won't have any new headwind due to attrition in FY 2024. Also, with the supply-side challenges easing, incremental cost of hiring laterals should be lower, and it also gives us an opportunity to bring down subcontractor expense. That is one important margin lever for FY 2024. Utilization improvement, flatter employee pyramid and hopefully, currency support, are the other levers. On the other hand, we will have our usual wage increase in Q1 and we should see further increases in travel expenses during the year. You won many large outsourcing deals in FY 2023, and your highest ever number of large deals in Q4. Won't this hurt margins in FY 2024? SS: It is not true that large outsourcing deals are necessarily margin dilutive. A few high profile mega-deals in the industry whose low quality revenues impacted margins have resulted in that perception. In the last five years, TCS has won several mega deals with TCV over $500 million, and every year we win dozens of large deals, with TCV over $50 million. And yet, during this period, our EBIT margin has remained in a tight band between 24 and 26 percent. Profitability of large deals depends on how you construct them. A client might push for a certain amount of absolute cost reduction at the time of contract renewal. The service provider can either drop prices and sacrifice margins to deliver those # Q&A savings, or propose a completely different operating model that uses lesser effort, protects or even expands margins, and achieves the client's objectives. TCS has differentiated itself in this space with the latter approach. Its win-win propositions reimagine the customer's operating model, leveraging AI and machine learning to reduce human intervention while improving process velocity and operational resilience. Customers have really taken to this idea. In FY 2023, we signed 29 large operating model transformation deals, covering business as well as IT operations, compared to 18 in the prior year. # Attrition among women is higher than for men. Why? How are you addressing this? ML: Historically, women's attrition at TCS has been similar or lower than men's attrition, so this is unusual. There might be other reasons but intuitively, I would think working from home during the pandemic reset the domestic arrangements for some women, keeping them from returning to office even after everything normalized. File: AR_TCS_2022_2023.md The higher attrition among women in FY 2023 is a setback to our efforts to promote gender diversity but we are doubling down on it. Focused leadership development programs like iExcel are driving tremendous change. Of all the leadership positions fulfilled with internal candidates in FY 2023, women made up 23% of the selected candidates, even though they account for only 14% of the applicant pool. |
This speaks well of the quality of the women candidates in our leadership pool as well as the supportive attitudes of our business leaders in promoting diversity. Likewise, in our external hiring, women make up 38.1% of our net hires this year, versus 35.7% in our workforce. # Why is Return to Office so important to TCS? Why not let employees continue to work from home? ML: Work from home is definitely more convenient for everybody, but there were drawbacks. Tenured employees who are well networked within the organization can work effectively and even collaborate virtually using the social capital built up over the years. That isn't the case with more junior employees. Workplace essentials like collaboration, mentorship and team-building suffered a lot in these two years. Then there is the matter of organizational culture. Over half our workforce today was hired after March 2020. New employees get acculturated through physical interactions with senior colleagues and leaders, by observing and following their behaviors and ways of thinking. Without those interactions, employee engagement as well as acculturation got badly impacted. All these factors led us to gradually bring back people to our offices during the year. # With laterals brought in at higher salaries, how do you manage the wage gaps between individuals of similar profile doing similar work? ML: Yes, this is another unusual, industry-wide problem. The pay disparities will eventually go away for two reasons. One, we are running a program called Elevate that empowers employees to take control of their careers and pursue their aspirations by achieving certain learning goals. Meeting those goals can result in significant pay increases, perhaps even a doubling of salary. Second, there will be a natural time-correction through performance-linked wage increases, promotions and voluntary attrition. # Will sticky onsite inflation be a structural headwind for your margins? SS: In the short term, higher onsite wage inflation is a headwind because our legacy contracts have much lower cost of living adjustments written in. But in the medium and longer term, this will get adjusted. Wage inflation affects everybody in the market including the clients themselves. Newer contracts reflect the changed cost structure for onsite effort. Also, contractual terms now peg annual cost of living increases to prevailing inflation rates. That should help mitigate inflation risks in longer term contracts. # Without the inflation differential, the Rupee may show greater strength than in the past. How will your margins sustain then? SS: Inflation differential is not the only driver of currency depreciation. Rupee is also affected by India's trade deficit, interest rate differentials and capital movements. But for argument's sake, let us assume that we may not have the benefit of currency depreciation in the future. Now remember, the currency depreciation basically helps us offset wage inflation in India which historically, we never passed on to clients. In the changed circumstances, this too will get baked into new contracts the same way onsite wage inflation has been. So in the longer term, we should be able to sustain our current margins. # Finally, a question on generative AI. Will the productivity gains delink revenue growth from headcount addition in the future? Can we expect a higher margin as a consequence? ML: In my view, the productivity benefits will get baked into clients' expectations around project velocity and throughput. For a given project team size, clients will expect much higher output at a much faster pace, compared to today. On aggregate, as the unit price of a function point falls, we expect volumes to increase. With ever-increasing dependence on technology for competitive differentiation, we expect enterprise spending to keep growing, for which we will have to keep hiring new talent. So the linearity between revenue and headcount is not going away any time soon. SS: Margins are a measure of relative competitiveness. Based just on the productivity improvements in code generation using generative AI, it is difficult to see how a technology which is freely available to everyone - service providers as well as clients' IT teams - can change relative competitiveness and by extension, margins. Margin improvement is possible from selling higher-priced growth and transformation solutions which use generative AI. Likewise, new software products or platforms which use generative AI to deliver superior business outcomes. # Innovating to Improve Crop Yields and Farmer Incomes With climate change, agriculture is increasingly vulnerable to extreme weather events, inconsistent rainfall, as well as increased pest and disease outbreaks. This affects crop yields, farmer incomes and food security. |
To help address these challenges, TCS built a digital platform to empower the Indian farmer and improve the resilience of the nation's farming sector. The TCS Digital Platform for Next Generation Agriculture (DNA) is a state-of-the-art, cloud-based decision intelligence and crop monitoring system that provides customized, site-specific predictive advisory services to farmers and other players in the food value chain. TCS DNA uses an innovative Sky-Earth convergence, intelligently fusing remote-sensing data from earth observation satellites and drones with data from proximal sensors and handheld devices on the field. This gives scale and reduces cost significantly without sacrificing accuracy. Proprietary AI/ML algorithms are utilized to analyze the data and provide reliable information and predictive intelligence on weather, soil condition, crop health, and pest forecasts. Farmers can use these insights to make quicker and more informed decisions, optimize production costs and improve their yield. Rallis India Ltd, a leading agri-input company, partnered with TCS for the first field deployment of the new platform, to improve the productivity of its hybrid seed production farms, as well as for internal business planning. Branded Drishti ("Vision"), the platform is used to monitor approximately 130 million hectares of agricultural land across India, for various aspects such as crop productivity, soil moisture, early alerts for pest outbreak, as well as seasonal weather anomalies and extreme weather events. The platform has helped Rallis increase the field scouting efficiency of its hybrid seed production team, and improved yield by 1 to 2%. TCS DNA is also helping Amalgamation Plantations, the second largest producer of tea in India, improve the quality and sustainability of tea leaves procured from small tea growers. It is being used to remotely monitor various aspects of small plantations using satellite imagery, predict pest and disease and improve quality. This is expected to help small tea growers improve their income by 15% and reduce rejections by 20%. Our partnership with TCS is helping us alleviate the issues of farmers and agriculture. The Drishti platform identifies problem areas and offers actionable insights to farmers in India, leading to effective crop management by reducing the risks and minimizing the loss in yield. Sanjiv Lal MD & CEO Rallis India Customer Stories | 34 # Notice Notice is hereby given that the twenty-eighth Annual General Meeting of Tata Consultancy Services Limited will be held on Thursday, June 29, 2023, at 3:30 p.m. (IST) through Video Conferencing ("VC")/Other Audio Visual Means ("OAVM") to transact the following business: # Ordinary Business 1. To receive, consider and adopt 1. the Audited Standalone Financial Statements of the Company for the financial year ended March 31, 2023, 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, 2023, together with the Report of the Auditors thereon. 2. To confirm the payment of Interim Dividends (including a special dividend) on Equity Shares and to declare a Final Dividend on Equity Shares for the financial year 2022-23. 3. To appoint a director in place of Aarthi Subramanian (DIN 07121802), who retires by rotation and, being eligible, offers herself for re-appointment. |
# Special Business Appointment of K Krithivasan as Director of the Company To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: "RESOLVED that K Krithivasan (DIN 10106739), who was appointed by the Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, as an Additional Director of the Company with effect from June 1, 2023 and who holds office up to the date of this Annual General Meeting of the Company in terms of Section 161(1) and any other applicable provisions, if any, of the Companies Act, 2013 ("Act") (including any modification and re-enactment thereof), and Article 73 of the Article of Association of the Company, and who is eligible for appointment and has consented to act as a Director of the Company and in respect of whom the Company has received a notice in writing from a Member under Section 160(1) of the Act proposing his candidature for the office of Director of the Company, be and is hereby appointed as a Director of the Company, not liable to retire by rotation." Appointment of K Krithivasan as Chief Executive Officer and Managing Director of the Company To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: "RESOLVED that pursuant to the provisions of Sections 196, 197, 203 and other applicable provisions, if any, of the Companies Act, 2013 ("Act") (including any modification and re-enactment thereof) read with Schedule V of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, the consent of the Company be and is hereby accorded for appointment and terms of remuneration of K Krithivasan (DIN 10106739), as the Chief Executive Officer and Managing Director of the Company for a period of five years with effect from June 1, 2023, as recommended by Nomination and Remuneration Committee and approved by the Board of Directors, upon the terms and conditions set out in the Explanatory Statement annexed to the Notice convening this Annual General Meeting, (including the remuneration to be paid in the event of loss or inadequacy of profits in any financial year during the tenure of his appointment), with authority to the Board of Directors to alter and vary the terms and conditions of the said appointment in such manner as may be agreed to between the Board of Directors and K Krithivasan." "RESOLVED FURTHER that the Board of Directors of the Company (which term shall be deemed to herein after include any Committee of the Board constituted to exercise its powers, including the powers conferred by this Resolution), be and is hereby authorised to take all such steps as may be necessary, proper and expedient to give effect to this Resolution." Integrated Annual Report 2022-23 Notice | 35 # 6. To approve existing as well as new material related party transactions with 1. Tata Sons Private Limited and/or its subsidiaries, (other than Tejas Networks Limited and/or its subsidiaries) 2. Joint Ventures, Associate Companies of Tata Sons Private Limited and their subsidiaries and Joint Ventures & Associate Companies of subsidiaries of Tata Sons Private Limited (excluding Tata Motors Limited, Jaguar Land Rover Limited and/or their subsidiaries) 3. Tejas Networks Limited and/or its subsidiaries 4. Tata Motors Limited, Jaguar Land Rover Limited and/or their subsidiaries 5. |
Subsidiaries of the Company (other than wholly owned subsidiaries) To consider and if thought fit, to pass the following resolution as an Ordinary Resolution: "RESOLVED that pursuant to the provisions of Regulation 23(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), as amended from time to time, the applicable provisions of the Companies Act, 2013 ("Act") read with Rules made thereunder, other applicable laws/statutory provisions, if any, (including any statutory modification(s) or amendment(s) or re-enactment(s) thereof, for the time being in force), the Company's Policy on Related Party Transactions, and subject to such approval(s), consent(s), permission(s) as may be necessary from time to time and basis the approval and recommendation of the Audit Committee and the Board of Directors of the Company, the approval of the Members of the Company be and is hereby accorded to the Company to enter/continue to enter into Material Related Party Transaction(s)/Contract(s)/Arrangement(s)/Agreement(s) (whether by way of an individual transaction or transaction taken together or series of transactions or otherwise) with entities falling within the definition of 'Related Party' under Section 2(76) of the Act and Regulation 2(1)(zb) of the SEBI Listing Regulations, for each of the financial years ("FY") in the course of (a) availing and rendering of IT services/ITeS/consulting service(s); (b) reimbursement of expenses including towards availing/providing for sharing/usage of each other's resources viz. employees, office space, infrastructure including IT assets, taxes and related owned/ third-party services; (c) purchase/sale/exchange/transfer/lease of business asset(s) and/or equipment to meet its business objectives/requirements; (d) transfer of any resources, services or obligations to meet its business objectives/requirements ("Related Party Transactions") on such material terms and conditions as detailed in the explanatory statement to this Resolution and as may be mutually agreed between related parties and the Company, such that the maximum value of the Related Party Transactions with such parties, in aggregate, does not exceed value as specified under each category, in the explanatory statement, provided that the said Transaction(s)/Contract(s)/Arrangement(s)/Agreement(s) shall be carried out at in the ordinary course of business and in respect of transactions with related parties under Section 2(76) of the Act, are at arm's length basis." "RESOLVED FURTHER that the Board of Directors of the Company (hereinafter referred to as 'Board' which term shall be deemed to include the Audit Committee of the Company and any duly constituted/ to be constituted Committee of Directors thereof to exercise its powers including powers conferred under this resolution) be and is hereby authorised to do all such acts, deeds, matters and things as it may deem fit at its absolute discretion and to take all such steps as may be required in this connection including finalizing and executing necessary documents, contract(s), scheme(s), agreement(s) and such other documents as may be required, seeking all necessary approvals to give effect to this resolution, for and on behalf of the Company and settling all such issues, questions, difficulties or doubts whatsoever that may arise and to take all such decisions from powers herein conferred to, without being required to seek further consent or approval of the Members and that the Members shall be deemed to have given their approval thereto expressly by the authority of this resolution." "RESOLVED FURTHER that all actions taken by the Board in connection with any matter referred to or contemplated in this resolution, be and are hereby approved, ratified and confirmed in all respects." # Notes 1. The Ministry of Corporate Affairs ("MCA") has vide its General Circular Nos. 14/2020 dated April 8, 2020 and 17/2020 dated April 13, 2020, in relation to "Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and the rules made thereunder on account of the threat posed by COVID-19", General Circular Nos. 20/2020 dated May 5, 2020, and subsequent circulars issued in this regard, the latest being 10/2022 dated December 28, 2022 in relation to "Clarification on holding of annual general meeting (AGM) through Video Conferencing (VC) or Other Audio Visual Means (OAVM)", (collectively referred to as "MCA Circulars") permitted the holding of the Annual General Meeting ("AGM") through VC/OAVM, without the physical presence of the Members at a common venue. In compliance with the MCA Circulars, the AGM of the Company is being held through VC /OAVM. The registered office of the Company shall be deemed to be the venue for the AGM. 2. |
The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 ("Act") setting out material facts concerning the business under Item Nos. 4 to 6 of the Notice, is annexed hereto. Further, the relevant details with respect to Item Nos. 3 and 4 pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India, in respect of Directors seeking appointment/re-appointment at this AGM are also annexed. # 3. In accordance with the aforesaid MCA Circulars and Circular Nos. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020, SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated January 15, 2021, SEBI/HO/CFD/CMD2/CIR/P/2022/62 dated May 13, 2022 and SEBI/HO/CFD/PoD-2/P/CIR/2023/4 dated January 5, 2023 issued by Securities Exchange Board of India (collectively referred to as "SEBI Circulars"), the Notice of the AGM along with the Integrated Annual Report for FY 2022-23 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company/Depositories. If your e-mail address is not registered with the Company/Depositories, you may register on or before 5:00 p.m. (IST) on Thursday, June 22, 2023 to receive this Notice of the AGM and the Integrated Annual Report for FY 2022-23 by completing the process for registration of e-mail address as under: 1. Click on the URL: https://on.tcs.com/EmailRegn. 2. Select the Name of the Company from dropdown: Tata Consultancy Services Limited. 3. Enter DP and Client ID (if shares held in electronic form)/Folio number (if shares held in physical form) and Permanent Account Number ("PAN"). In the event PAN details are not registered for physical folio, Member to enter one of the Share Certificate numbers. 4. Enter Mobile number and e-mail ID. 5. System generated One Time Password ("OTP") to be sent on mobile number and e-mail ID. 6. Enter OTP received on mobile number and e-mail ID. 7. Click on Submit button. 8. On completing the above process your request will be accepted and request ID will be generated. Email registered is for limited purpose of sending notice pertaining to the current event. Members may note that the Notice and Integrated Annual Report 2022-23 will also be available on the Company's website www.tcs.com, websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively, and on the website of NSDL https://www.evoting.nsdl.com. # 4. Pursuant to the provisions of the Act, a Member entitled to attend and vote at the AGM is entitled to appoint a proxy to attend and vote on his/her behalf and the proxy need not be a Member of the Company. Since this AGM is being held pursuant to the MCA Circulars through VC/OAVM, physical attendance of Members has been dispensed with. Accordingly, the facility for appointment of proxies by the Members will not be available for the AGM and hence the Proxy Form, Attendance Slip and route map of AGM are not annexed to this Notice. # 5. Institutional shareholders/corporate shareholders (i.e. other than individuals, HUFs, NRIs, etc.) are required to send a scanned copy (PDF/JPG Format) of their respective Board or governing body Resolution/Authorization etc., authorizing their representative to attend the AGM through VC/OAVM on their behalf and to vote through remote e-voting. The said Resolution/Authorization shall be sent to the Scrutinizer by e-mail on its registered e-mail address to [email protected] with a copy marked to [email protected]. Institutional shareholders (i.e. other than individuals, HUFs, NRIs etc.) can also upload their Board Resolution/Power of Attorney/Authority Letter, etc. by clicking on "Upload Board Resolution/Authority Letter" displayed under "e-Voting" tab in their login. # 6. The Company has fixed Thursday, June 15, 2023 as the 'Record Date' for determining entitlement of Members to final dividend for the financial year ended March 31, 2023, if approved at the AGM. # 7. If the final dividend, as recommended by the Board of Directors, is approved at the AGM, payment of such dividend subject to deduction of tax at source will be made on Monday, July 3, 2023, 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), collectively "Depositories", as of end of day on Thursday, June 15, 2023. 2. |
To all Members in respect of shares held in physical form after giving effect to valid transmission or transposition requests lodged with the Company as of the close of business hours on Thursday, June 15, 2023. # 8. Members are requested to intimate changes, if any, pertaining to their name, postal address, email address, telephone/mobile numbers, Permanent Account Number (PAN), mandates, nominations, power of attorney, bank details such as, name of the bank and branch details, bank account number, MICR code, IFSC code, etc. 1. For shares held in electronic form: to their Depository Participants (DPs) 2. For shares held in physical form: to the Company/Registrar and Transfer Agents (RTA) in prescribed Form Integrated Annual Report 2022-23 Notice | 37 ISR-1 and other forms pursuant to SEBI Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 dated March 16, 2023. In the absence of any of the required documents in a folio, on or after October 1, 2023, the folio shall be frozen by the RTA. Intimation letters along with Business Reply Envelopes for furnishing the required details are being sent by the Company. Members may also refer to Frequently Asked Questions ("FAQs") on Company's website https://on.tcs.com/IR-FAQ. # 9. Members may please note that SEBI vide its Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated January 25, 2022 has mandated the Listed Companies to issue securities in dematerialized form only while processing service requests viz. Issue of duplicate securities certificate; claim from unclaimed suspense account; renewal/exchange of securities certificate; endorsement; sub-division/splitting of securities certificate; consolidation of securities certificates/folios; transmission and transposition. Accordingly, Members are requested to make service requests by submitting a duly filled and signed Form ISR - 4, the format of which is available on the Company's website at https://on.tcs.com/IR-FAQ and on the website of the Company's RTA, TSR Consultants Private Limited ("TCPL") at https://www.tcplindia.co.in/. It may be noted that any service request can be processed only after the folio is KYC Compliant. # 10. In terms of Regulation 40(1) of SEBI Listing Regulations, as amended from time to time, transfer, transmission and transposition of securities shall be effected only in dematerialized form. In view of the same and to eliminate all risks associated with physical shares and avail various benefits of dematerialization, Members are advised to dematerialize the shares held by them in physical form. Members can contact the Company or TCPL, for assistance in this regard. # 11. Members holding shares in physical form, in identical order of names, in more than one folio are requested to send to the Company or TCPL, the details of such folios together with the share certificates along with the requisite KYC Documents for consolidating their holdings in one folio. Requests for consolidation of share certificates shall be processed in dematerialized form. # 12. 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. If a Member desires to opt out or cancel the earlier nomination and record a fresh nomination, he/she may submit the same in Form ISR-3 or SH-14 as the case may be. The said forms can be downloaded from the Company's website https://on.tcs.com/IR-FAQ. Members are requested to submit the said details to their DP in case the shares are held by them in dematerialized form and to TCPL in case the shares are held in physical form. # 13. In case of joint holders, the Member whose name appears as the first holder in the order of names as per the Register of Members of the Company as on the cut-off date will be entitled to vote during the AGM. # 14. File: AR_TCS_2022_2023.md Members seeking any information with regard to the financial statements or any matter to be placed at the AGM, are requested to write to the Company on or before June 28, 2023 through e-mail on [email protected]. The same will be replied by the Company suitably. # 15. Members are requested to note that, dividends if not encashed for a period of 7 years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund ("IEPF"). Further, all the shares in respect of which dividend has remained unclaimed for 7 consecutive years or more from the date of transfer to unpaid dividend account shall also be transferred to IEPF. |
In view of this, Members are requested to claim their dividends from the Company, within the stipulated timeline. The Members, whose unclaimed dividends and/or shares have been transferred to IEPF, may contact the Company or TCPL and submit the required documents for issue of Entitlement Letter. The Members can attach the Entitlement Letter and other required documents and file the IEPF-5 form for claiming the dividend and/or shares available on www.iepf.gov.in. For details, please refer to Corporate Governance Report which is a part of this report and FAQ of investor page on Company's website https://on.tcs.com/IR-FAQ. # 16. Members attending the meeting through VC/OAVM shall be counted for the purpose of determining the quorum under Section 103 of the Act. # 17. Pursuant to the Finance Act, 2020, dividend income will be taxable in the hands of shareholders w.e.f. April 1, 2020 and the Company is required to deduct tax at source from dividend paid to shareholders at the prescribed rates. For the prescribed rates for various categories, please refer to the Finance Act, 2020 and the amendments thereof. The shareholders are requested to update their valid PAN with the DPs (if shares held in dematerialized form) and the Company/TCPL (if shares are held in physical form). A Resident individual shareholder with PAN and whose income does not exceed maximum amount not chargeable to tax or who is not liable to pay income tax, as the case may be, can submit a yearly declaration in Form No. 15G/15H, to avail the benefit of non-deduction of tax at source by e-mail to [email protected] or upload the documents on https://on.tcs.com/FormsRegn by 11:59 p.m. (IST) on Wednesday, June 7, 2023. Shareholders are requested to note that in case their PAN is not registered or having invalid PAN or Specified Person as defined under Section 206AB of the Income-tax Act, the tax will be deducted at a higher rate prescribed under Section 206AA or 206AB of the Income-tax Act, as applicable. Non-resident shareholders [including Foreign Institutional Investors (FIIs)/Foreign Portfolio Investors (FPIs)] can avail beneficial rates under tax treaty between India and their. country of tax residence, subject to providing necessary documents i.e. No Permanent Establishment and Beneficial Ownership Declaration, Tax Residency Certificate, Form 10F, any other document which may be required to avail the tax treaty benefits. For this purpose, the shareholder may submit the above documents (PDF/JPG Format) by e-mail to [email protected] or upload the documents on https://on.tcs.com/FormsRegn. The aforesaid declarations and documents need to be submitted by the shareholders by 11:59 p.m. (IST) on Wednesday, June 7, 2023. For further details please refer to FAQs on Taxation of Dividend Distribution at https://on.tcs.com/IR-FAQ. # 18. Instructions for e-voting and joining the AGM are as follows: # A. VOTING THROUGH ELECTRONIC MEANS i. In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, Regulation 44 of the SEBI Listing Regulations and in terms of SEBI Circular no. SEBI/HO/CFD/CMD/CIR/P/2020/242 dated December 9, 2020 in relation to "e-voting Facility Provided by Listed Entities", 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. ii. The remote e-voting period commences on Monday, June 26, 2023 (9:00 a.m. IST) and ends on Wednesday, June 28, 2023 (5:00 p.m. IST). During this period, Members holding shares either in physical form or in dematerialized form, as on Thursday, June 22, 2023 i.e. cut-off date, may cast their vote electronically. The e-voting module shall be disabled by NSDL for voting thereafter. Members have the option to cast their vote on any of the resolutions using the remote e-voting facility, either during the period commencing from June 26, 2023 to June 28, 2023 or e-voting during the AGM. Members who have voted on some of the resolutions during the said voting period are also eligible to vote on the remaining resolutions during the AGM. iii. The Members who have cast their vote by remote e-voting prior to the AGM may also attend/participate in the AGM through VC/OAVM but shall not be entitled to cast their vote on such resolution again. iv. The Board of Directors has appointed P N Parikh (Membership No. FCS 327) and failing him, Jigyasa Ved (Membership No. |
FCS 6488) of Parikh & Associates, Company Secretaries as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner. v. 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. vi. Any person holding shares in physical form and non-individual shareholders, who acquires shares of the Company and becomes a Member of the Company after sending of the Notice and holding shares as of the cut-off date, may obtain the User 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 the vote. In case of individual shareholders holding securities in dematerialized mode and who acquires shares of the Company and becomes a Member of the Company after sending of the Notice and holding shares as of the cut-off date may follow steps mentioned below under "Login method for remote e-voting and joining virtual meeting for individual shareholders holding securities in dematerialized mode." vii. The details of the process and manner for remote e-voting are explained herein below: The way to vote electronically on NSDL e-voting system consists of "Two Steps" which are mentioned below: Step 1: Access to NSDL e-voting system Step 2: Cast your vote electronically on NSDL e-voting system. # Details on Step 1 are mentioned below # I) Login method for remote e-voting and joining the virtual meeting for individual shareholders holding securities in dematerialized mode Pursuant to SEBI Circular no. SEBI/HO/CFD/CMD/CIR/P/2020/242 dated December 9, 2020 on "e-voting facility provided by Listed Companies", e-voting process has been enabled to all the individual demat account holders, by way of single login credential, through their demat accounts/websites of Depositories/DPs to increase the efficiency of the voting process. Individual demat account holders would be able to cast their vote without having to register again with the e-voting service provider ("ESP") thereby not only facilitating seamless authentication but also ease and convenience of participating in e-voting process. Shareholders are advised to update their mobile number and e-mail ID with their DPs to access e-voting facility. Integrated Annual Report 2022-23 Notice | 39 # Login method for individual shareholders holding securities in dematerialized mode is given below: |Type of shareholders|Login Method| |---|---| |Individual Shareholders holding securities in dematerialized mode with NSDL.|# A. NSDL IDeAS facility<br/>If you are already registered, follow the below steps: 1. Visit the e-Services website of NSDL. Open web browser by typing the following URL: https://eservices.nsdl.com/ either on a Personal Computer or on a mobile. 2. Once the home page of e-Services is launched, click on the "Beneficial Owner" icon under "Login" which is available under "IDeAS" section. 3. A new screen will open. You will need to enter your User ID and Password. After successful authentication, you will be able to see e-voting services. 4. Click on "Access to e-voting" appearing on the left-hand side under e-voting services and you will be able to see e-voting page. 5. Click on options available against Company name or e-Voting service provider - NSDL and you will be re-directed to NSDL e-voting website for casting your vote during the remote e-voting period or joining virtual meeting and e-voting during the meeting. If you are not registered, follow the below steps: 1. Option to register is available at https://eservices.nsdl.com. 2. Select "Register Online for IDeAS" Portal or click at https://on.tcs.com/NSDLRegn. 3. Please follow steps given in points 1-5. # B. e-voting website of NSDL<br/>1. Open web browser and type the following URL: https://www.evoting.nsdl.com/ either on a personal computer or on a mobile phone. 2. Once the home page of e-voting system is launched, click on the icon "Login" which is available under 'Shareholder/Member' section. 3. A new screen will open. You will need to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/OTP and a Verification Code as shown on the screen. 4. After successful authentication, you will be redirected to NSDL website wherein you can see e-voting page. Click on options available against Company name or e-voting service provider- NSDL and you will be redirected to e-voting website of NSDL for casting your vote during the remote e-voting period or joining virtual meeting and e-voting during the meeting. # C. |
Shareholders/Members can also download NSDL Mobile App "NSDL Speede" facility by scanning the QR code mentioned below for seamless voting experience.<br/>App: Googla Ploy| Integrated Annual Report 2022-23 Notice | 40 # Type of shareholders # Individual Shareholders holding securities in dematerialized mode with CDSL # Login Method 1. Existing users who have opted for Easi/Easiest, they can login through their User ID and Password. Option will be made available to reach e-voting page without any further authentication. The URL for users to login to Easi/Easiest are https://on.tcs.com/CDSLRegn or www.cdslindia.com and click on login and select MyEasi. 2. After successful login of Easi/Easiest the user will be also able to see the e-voting menu. The menu will have links of e-voting service provider i.e. NSDL. Click on NSDL to cast your vote during the remote e-voting period or joining virtual meeting and e-voting during the meeting. 3. If the user is not registered for Easi/Easiest, option to register is available at https://on.tcs.com/CDSLEasiRegn # Individual Shareholders (holding securities in demat mode) login through their DPs Alternatively, the user can directly access e-voting page by providing demat account number and PAN from a link in www.cdslindia.com home page. The system will authenticate the user by sending OTP on registered Mobile and e-mail as recorded in the demat Account. After successful authentication, user will be provided links for the respective ESP i.e. NSDL where the e-voting is in progress. You can also login using the login credentials of your demat account through your DP registered with NSDL/CDSL for e-voting facility. Once logged-in, you will be able to see the e-voting option. Once you click on e-voting option, you will be redirected to NSDL/CDSL Depository site after successful authentication, wherein you can see e-voting feature. Click on options available against Company name or e-voting service provider- NSDL and you will be redirected to e-voting website of NSDL for casting your vote during the remote e-voting period or joining virtual meeting and e-voting during the meeting. Important note: Members who are unable to retrieve User ID/Password are advised to use Forgot User ID and Forgot Password option available at respective websites. # Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. NSDL and CDSL. |Login type|Helpdesk details| |---|---| |Securities held with NSDL|Please contact NSDL helpdesk by sending a request at [email protected] or call at +91 22 48867000 and +91 22 24997000| |Securities held with CDSL|Please contact CDSL helpdesk by sending a request at [email protected] or contact at toll free no. 1800225533| # II) Login method for e-voting and joining virtual meeting for shareholders other than Individual shareholders holding securities in demat mode and shareholders holding securities in physical mode. # How to Log-in to NSDL e-Voting website? 1. Visit the e-voting website of NSDL. Open web browser by clicking the URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. 2. Once the home page of e-voting system is launched, click on the icon "Login" which is available under 'Shareholder/ Member' section. 3. A new screen will open. You will have to enter your User ID, Password/OTP and a verification code as shown on the screen. 4. Alternatively, if you are registered for NSDL eservices i.e. IDeAS, you can log-in at https://eservices.nsdl.com/ with your existing IDeAS login. Once you log-in to NSDL eservices after using your login credentials, click on e-voting and you can proceed to Step 2 i.e. Cast your vote electronically. Integrated Annual Report 2022-23 Notice | 41 # Your User ID details are given below: Manner of holding shares i.e. Demat (NSDL or CDSL) or Physical - a) For Members who hold shares in demat account with NSDL. - b) For Members who hold shares in demat account with CDSL. - c) For Members holding shares in Physical Form. |
Your User ID is: - 8 Character DP ID followed by 8 Digit Client ID For example if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12****** - 16 Digit Beneficiary ID For example if your Beneficiary ID is 12************** then your user ID is 12************** - EVEN Number followed by Folio Number registered with the Company For example if EVEN is 123456 and folio number is 001*** then user ID is 123456001*** # Password details for shareholders other than Individual shareholders are given below: - a) If you are already registered for e-voting, then you can use your existing password to login and cast your vote. - b) If you are using NSDL e-voting system for the first time, you will need to retrieve the 'initial password' which was communicated to you by NSDL. Once you retrieve your 'initial password', you need to enter the 'initial password' and the system will force you to change your password. - c) How to retrieve your 'initial password'? - (i) If your e-mail ID is registered in your demat account or with the Company, your 'initial password' is communicated to you on your e-mail ID. Trace the e-mail sent to you from NSDL in your mailbox from [email protected]. Open the e-mail and open the attachment i.e. a .pdf file. Open the .pdf file. - (ii) "Physical User Reset Password?" (If you are holding shares in physical mode) option available on www.evoting.nsdl.com. - (iii) If you are still unable to get the password by aforesaid two options, you can send a request at [email protected] mentioning your demat account number/folio number, PAN, name and registered address. - (iv) Members can also use the OTP based login for casting the votes on the e-voting system of NSDL. 1. After entering your password, tick on Agree to "Terms and Conditions" by selecting on the check box. 2. Now, you will have to click on "Login" button. 3. After you click on the "Login" button, home page of e-voting will open. # Details on Step 2 are given below: How to cast your vote electronically on NSDL e-voting system? The password to open the .pdf file is your 8 digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your 'User ID' and your 'initial password'. In case you have not registered your e-mail address with the Company/Depository, please follow instructions mentioned below in this notice. # If you are unable to retrieve or have not received the "Initial password" or have forgotten your password: - a) Click on "Forgot User Details/Password?"(If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com. 1. After successful login at Step 1, you will be able to see all the companies' "EVEN" in which you are holding shares and whose voting cycle and general meeting is in active status. 2. Select "EVEN" of Company, which is 123989 for which you wish to cast your vote during the remote e-voting period and casting your vote during the General Meeting. For joining virtual meeting, you need to click on "VC/OAVM" link placed under "Join Meeting". 3. Now you are ready for e-voting as the voting page opens. 4. Cast your vote by selecting appropriate options i.e. assent or dissent, verify or modify the number of shares for which you wish to cast your vote and click on "Submit" and also "Confirm" when prompted. Integrated Annual Report 2022-23 Notice | 42 # 5. Upon confirmation, the message "Vote cast successfully" will be displayed and you will receive a confirmation by way of a SMS on your registered mobile number. # 6. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page. # 7. Once you confirm your vote on the resolution, you will not be allowed to modify your vote. # General Guidelines for shareholders # 1. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the "Forgot User Details/Password?" or "Physical User Reset Password?" option available on https://www.evoting.nsdl.com to reset the password. # 2. |
In case of any queries related to e-voting, you may refer the Frequently Asked Questions ("FAQs") for Shareholders and e-voting user manual for Shareholders available at the download section of https://www.evoting.nsdl.com or call on +91 22 48867000 and +91 22 24997000 or send the request to Pallavi Mhatre, Senior Manager, NSDL at [email protected]. # 3. Members may send a request to [email protected] for procuring user id and password for e-voting by providing demat account number / Folio number, client master or copy of Consolidated Account statement, PAN (self-attested scanned copy of PAN card), AADHAAR (self-attested scanned copy of Aadhaar Card). If you are an Individual shareholder holding securities in demat mode, you are requested to refer to the login method explained above. # 4. The instructions for members for e-voting on the day of the AGM are mentioned in point number 18(A). # B. INSTRUCTIONS FOR MEMBERS FOR ATTENDING THE AGM THROUGH VC/OAVM ARE AS UNDER # 1. Members will be able to attend the AGM through VC/OAVM or view the live webcast of AGM provided by NSDL at https://www.evoting.nsdl.com following the steps mentioned above for login to NSDL e-voting system. After successful login, you can see VC/OAVM link placed under Join meeting menu against company name. You are requested to click on VC/OAVM link placed under "Join Meeting" menu. Members who do not have the User ID and Password for e-voting or have forgotten the User ID and Password may retrieve the same by following the remote e-voting instructions mentioned in the Notice. # 2. Facility of joining the AGM through VC/OAVM shall open 30 minutes before the time scheduled for the AGM. # 3. Members who need assistance before or during the meeting, can contact NSDL on [email protected] +91 22 48867000 and +91 22 24997000 or contact Amit Vishal, Assistant Vice President - NSDL at [email protected] or Sanjeev Yadav, Assistant Manager- NSDL at [email protected]. # 4. Members who would like to express their views or ask questions during the AGM may register themselves as a speaker by sending their request from their registered e-mail address mentioning their name, DP ID and Client ID/Folio number, PAN, mobile number at [email protected] from June 23, 2023 (9:00 a.m. IST) to June 25, 2023 (5:00 p.m. IST). Those Members who have registered themselves as a speaker will only be allowed to express their views/ask questions during the AGM. The Company reserves the right to restrict the number of speakers depending on the availability of time for the AGM. # Other Instructions # 1. The Scrutinizer shall, immediately after the conclusion of voting at the AGM, unblock the votes cast through remote e-voting (votes cast during the AGM and votes cast through remote e-voting) and will submit 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. The results will be announced within the time stipulated under the applicable laws. # 2. 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 https://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 Pradeep Manohar Gaitonde Company Secretary Membership No. ACS 7016 Mumbai, April 12, 2023 # Registered Office: 9th Floor, Nirmal Building, Nariman Point, Mumbai 400 021 CIN: L22210MH1995PLC084781 Tel: +91 22 6778 9595 Email: [email protected] Website: www.tcs.com # Explanatory Statement 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 to 6 of the accompanying Notice: # Item Nos. 4 and 5 The Board of Directors, at its meeting held on April 12, 2023, based on the recommendation of the Nomination and Remuneration Committee, appointed K Krithivasan as an Additional Director of the Company with effect from June 1, 2023. The Board, at the same meeting, also appointed K Krithivasan as Chief Executive Officer and Managing Director ("CEO and MD") of the Company, for a period of five years with effect from June 1, 2023, subject to approval of the Members. |
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