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# * 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 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). # The following table sets forth information relating to unhedged foreign currency exposure as at March 31, 2023: | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|3,869|262|90|2,136| |Net financial liabilities|(11,021)|(657)|(1,536)|(270)| 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 `713 crore for the year ended March 31, 2023. # The following table sets forth information relating to 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)| # Notes forming part of Consolidated Financial Statements 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. # 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 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 `1,016 crore are with a financial institution having a high credit-rating assigned by credit-rating agencies. Bank deposits include an amount of `4,273 crore held with three 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, 2023. 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 `1,09,258 crore and `1,05,498 crore as at March 31, 2023 and 2022, 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, 2023 and 2022. |
# 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, 2023|As at March 31, 2023|As at March 31, 2022|As at March 31, 2022| |---|---|---| |Geographic Area|Gross%|Net%|Gross%|Net%| |United States of America|43.65|44.31|43.79|44.69| |India|15.45|14.06|15.51|13.83| |United Kingdom|16.05|16.37|16.47|16.86| Geographical 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, 2023 and 2022, was `126 crore and `123 crore respectively. The reconciliation of allowance for doubtful trade receivables is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|1,333|1,289| |Change during the year|126|123| |Bad debts written off|(253)|(83)| |Translation exchange difference|7|4| |Balance at the end of the year|1,213|1,333| # Notes forming part of Consolidated Financial Statements # 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. # Contractual maturities of significant financial liabilities as at: # March 31, 2023 | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|10,515|-|-|-|10,515| |Lease liabilities|1,969|1,771|3,185|2,836|9,761| |Other financial liabilities|8,948|51|302|9|9,310| | |21,432|1,822|3,487|2,845|29,586| |Derivative financial liabilities|141|-|-|-|141| | |21,573|1,822|3,487|2,845|29,727| # March 31, 2022 | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|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| # (m) Equity instruments The authorised, issued, subscribed and fully paid up share capital consist of the following: # As at March 31, 2023 # As at March 31, 2022 | |March 31, 2023|March 31, 2022| |---|---|---| |Authorised|460,05,00,000 equity shares of `1 each|460| | |(March 31, 2022: 460,05,00,000 equity shares of `1 each)|460| | |105,02,50,000 preference shares of `1 each|105| | |(March 31, 2022: 105,02,50,000 preference shares of `1 each)|105| | |565|565| |Issued, Subscribed and Fully paid up|365,90,51,373 equity shares of `1 each|366| | |(March 31, 2022: 365,90,51,373 equity shares of `1 each)|366| 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. # Notes forming part of Consolidated Financial Statements 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 in the previous year. The equity shares bought back were extinguished on March 29, 2022. # I. Reconciliation of number of shares | | |As at March 31, 2023| |As at March 31, 2022| | | |---|---|---|---|---|---|---| |Equity shares|Number of shares|Amount (` crore)|Number of shares|Amount (` crore)| | | |Opening balance|365,90,51,373| |366|369,90,51,373| |370| |Shares extinguished on buy-back|-|-| |(4,00,00,000)| |(4)| |Closing balance|365,90,51,373| |366|365,90,51,373|366| | # 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, 2023| |As at March 31, 2022| | |---|---|---|---|---|---| |Equity shares|Holding company|264,43,17,117 equity shares (March 31, 2022: 264,43,17,117 equity shares) are held by Tata Sons Private Limited|264| | | |Subsidiaries and Associates of Holding company|7,220 equity shares (March 31, 2022: 7,220 equity shares) are held by Tata Industries Limited*|-| | | | | |10,14,172 equity shares (March 31, 2022: 10,14,172 equity shares) are held by Tata Investment Corporation Limited*|-| | | | | |46,798 equity shares (March 31, 2022: 46,798 equity shares) are held by Tata Steel Limited*|-| | | | | |766 equity shares (March 31, 2022: 766 equity shares) are held by The Tata Power Company Limited*|-| | | | | | |264| | | | *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, 2023| |As at March 31, 2022| |---|---|---|---| |Equity shares|Tata Sons Private Limited, the holding company|264,43,17,117|264,43,17,117| | |% of shareholding|72.27%|72.27%| # Notes forming part of Consolidated Financial Statements # V. Equity shares movement during 5 years preceding March 31, 2023 - 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. 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. # VI. Disclosure of Shareholding of Promoters Disclosure of shareholding of promoters as at March 31, 2023 is as follows: |Promoter name|Shares held by promoters|% Change during the year| |---|---|---| |Tata Sons Private Limited|<br/>No. of shares|% of total shares| |2,64,43,17,117|72.27%| - Total |No. of shares|% of total shares| |---|---| |2,64,43,17,117|72.27%| - Disclosure of shareholding of promoters as at March 31, 2022 is as follows: |Promoter name|Shares held by promoters|% Change during the year| |---|---|---| |Tata Sons Private Limited|<br/>No. of shares|% of total shares| |2,64,43,17,117|72.27%| 0.11% Total |No. of shares|% of total shares| |---|---| |2,66,91,25,829|72.16%| 0.11% # 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 # Notes forming part of Consolidated Financial Statements 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. The lease 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, 2023|Net carrying amount as at March 31, 2023| |---|---|---| |Leasehold land|179|940| |Buildings|1,236|6,330| |Leasehold improvements|14|30| |Computer equipment|73|125| |Software licences|-|96| |Vehicles|17|34| |Office equipment|1|5| |Total|1,520|7,560| # Notes forming part of Consolidated Financial Statements |Particulars|Additions for the year ended March 31, 2022 (` crore)|Net carrying amount as at March 31, 2022 (` crore)| |---|---|---| |Leasehold land|100|774| |Buildings|1,357|6,586| |Leasehold improvements|-|23| |Computer equipment|4|81| |Software licences|145|133| |Vehicles|16|32| |Office equipment|2|7| |Total|1,624|7,636| # Depreciation on right-of-use assets is as follows: |Particulars|Year ended March 31, 2023 (` crore)|Year ended March 31, 2022 (` crore)| |---|---|---| |Leasehold land|10|9| |Buildings|1,530|1,465| |Leasehold improvements|6|6| |Computer equipment|32|23| |Software licences|37|38| |Vehicles|16|16| |Office equipment|3|3| |Total|1,634|1,560| Interest on lease liabilities is `492 crore and `519 crore for the years ended March 31, 2023 and 2022, respectively. The Group incurred `318 crore and `277 crore for the years ended March 31, 2023 and 2022, respectively, towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is `2,538 crore and `2,228 crore for the years ended March 31, 2023 and 2022, 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 `786 crore and `773 crore as at March 31, 2023 and 2022, respectively. Lease contracts entered by the Group majorly pertain 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. # 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. # Notes forming part of Consolidated Financial Statements |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| Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use. 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. # Notes forming part of Consolidated Financial Statements # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and machinery|Computer equipment|Vehicles|Office installations|Electrical fixtures|Furniture|Total| |---|---|---|---|---|---|---|---|---|---|---| |Cost as at April 1, 2022|352|7,829|2,569|770|12,087|39|2,686|2,062|1,906|30,300| |Additions|-|234|72|56|1,628|8|180|67|69|2,314| |Disposals|-|(5)|(15)|-|(342)|(4)|(69)|(9)|(14)|(458)| |Translation exchange difference|2|8|47|2|62|-|18|18|31|188| |Cost as at March 31, 2023|354|8,066|2,673|828|13,435|43|2,815|2,138|1,992|32,344| |Accumulated depreciation as at April 1, 2022|-|(3,343)|(1,736)|(377)|(8,563)|(35)|(2,315)|(1,503)|(1,654)|(19,526)| |Depreciation|-|(398)|(186)|(80)|(1,755)|(4)|(219)|(140)|(110)|(2,892)| |Disposals|-|4|15|-|340|3|62|9|14|447| |Translation exchange difference|-|(7)|(38)|(1)|(47)|-|(15)|(12)|(23)|(143)| |Accumulated depreciation as at March 31, 2023|-|(3,744)|(1,945)|(458)|(10,025)|(36)|(2,487)|(1,646)|(1,773)|(22,114)| |Net carrying amount as at March 31, 2023|354|4,322|728|370|3,410|7|328|492|219|10,230| |Capital work-in-progress*|1,234|1,234|1,234|1,234|1,234|1,234|1,234|1,234|1,234|1,234| |Total|11,464|11,464|11,464|11,464|11,464|11,464|11,464|11,464|11,464|11,464| *`2,314 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2023. # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and machinery|Computer equipment|Vehicles|Office installations|Electrical fixtures|Furniture|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|-|187|41|55|2,345| | |Disposals|-|(2)|(53)|(1)|(515)|(1)|(75)|(44)|(42)|(733)| | | |Translation exchange difference|1|3|12|(1)|-|-|7|8|30| | |Cost as at March 31, 2022| |352|7,829|2,569|770|12,087|39|2,686|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|-|-|(4)|(6)|(14)| |Accumulated depreciation as at March 31, 2022| |-|(3,343)|(1,736)|(377)|(8,563)|(35)|(2,315)|(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. # 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, 2023 is as follows: |Capital work-in-progress|Amount in Capital work-in-progress for a period of|Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years|Total| |---|---|---|---|---|---|---| |Projects in progress| |658|212|42|322|1,234| 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|Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years|Total| |---|---|---|---|---|---|---| |Projects in progress| |691|102|39|373|1,205| * 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 economic uncertainties, 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, 2023|As at March 31, 2022| |---|---|---| |Balance at the beginning of the year|1,787|1,798| |Translation exchange difference|71|(11)| |Balance at the end of the year|1,858|1,787| Goodwill of `685 crore and `646 crore as at March 31, 2023 and 2022, 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. File: AR_TCS_2022_2023.md The remaining amount of goodwill of `1,173 crore and `1,141 crore as at March 31, 2023 and 2022, 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. # Notes forming part of Consolidated Financial Statements # (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. # Following table summarises the nature of intangibles and their estimated useful lives: |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. 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|Customer-related intangibles|Total| |---|---|---|---| |Cost as at April 1, 2022|1,697|121|1,818| |Additions|262|-|262| |Disposals / Derecognised|(73)|-|(73)| |Translation exchange difference|6|5|11| |Cost as at March 31, 2023|1,892|126|2,018| |Accumulated amortisation as at April 1, 2022|(596)|(121)|(717)| |Amortisation|(496)|-|(496)| |Disposals / Derecognised|73|-|73| |Translation exchange difference|(6)|(5)|(11)| |Accumulated amortisation as at March 31, 2023|(1,025)|(126)|(1,151)| |Net carrying amount as at March 31, 2023|867|-|867| # Intangible assets consist of the following: | |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| # Notes forming part of Consolidated Financial Statements # The estimated amortisation for the years subsequent to March 31, 2023 is as follows: |Year ending March 31,|Amortisation expense (` crore)| |---|---| |2024|466| |2025|274| |2026|82| |2027|44| |2028|1| |Total|867| # (d) Other assets # Other assets consist of the following: # Other assets - Non-current | |As at March 31, 2023 (` crore)|As at March 31, 2022 (` crore)| |---|---|---| |Considered good| | | |Capital advances|68|78| |Advances to related parties|63|23| |Contract assets|215|171| |Prepaid expenses|2,138|1,291| |Contract fulfillment costs|114|150| |Others|208|310| |Total|2,806|2,023| # Advances to related parties, considered good, comprise: |Entity|As at March 31, 2023 (` crore)|As at March 31, 2022 (` crore)| |---|---|---| |Voltas Limited|-*|-*| |Tata Realty and Infrastructure Ltd|-*|-*| |Tata Projects Limited|54|23| |Titan Engineering and Automation Limited|-|-*| |Saankhya Labs Private Limited|8|-| |Universal MEP Projects & Engineering Services Limited|1|-| *Represents value less than `0.50 crore. # Other assets - Current | |As at March 31, 2023 (` crore)|As at March 31, 2022 (` crore)| |---|---|---| |Considered good| | | |Advance to suppliers|91|202| |Advance to related parties|9|8| |Contract assets|5,616|4,248| |Prepaid expenses|1,494|2,994| |Prepaid rent|20|18| |Contract fulfillment costs|1,035|1,074| |Indirect taxes recoverable|1,049|1,310| |Others|393|297| # Notes forming part of Consolidated Financial Statements | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Considered doubtful| | | |Advance to suppliers|2|2| |Other advances|4|4| |Less: Allowance on doubtful assets|(6)|(6)| | |9,707|10,151| |Advance to related parties, considered good comprise:| | | |Tata Sons Private Limited|7|7| |Tata AIG General Insurance Company Limited|1|1| |Titan Company Limited|1|-| *Represents value less than `0.50 crore. Non-current - Others includes advance of `177 crore and `271 crore towards acquiring right-of-use of leasehold land as at March 31, 2023 and 2022, respectively. Contract fulfillment costs of `967 crore and `809 crore for the years ended March 31, 2023 and 2022, respectively, have been amortised in the consolidated statement of profit and loss. Refer note 12 for changes in contract assets. # (e) 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: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Raw materials, sub-assemblies and components|23|17| |Finished goods and work-in-progress|5|3| | |28|20| *Represents value less than `0.50 crore. |
# (f) Other liabilities Other liabilities consist of the following: # Other liabilities - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Advance received from customers|543|468| |Indirect taxes payable and other statutory liabilities|4,119|3,632| |Tax liability on buy-back of equity shares|-|4,192| |Others|230|100| | |4,892|8,392| # Notes forming part of Consolidated Financial Statements # (g) Provisions Provisions consist of the following: # Provisions - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Provision towards legal claim (Refer note 19)|206|1,249| |Provision for foreseeable loss|101|131| |Other provisions|38|31| |Total|345|1,411| # 11) Other equity Other equity consist of the following: # Other equity - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Capital reserve|75|75| |Capital redemption reserve| | | |Opening balance|440|436| |Transfer from retained earnings|-|4| |Total|440|440| |General reserve| | | |Opening balance|-|27| |Transfer to retained earnings|-|(27)| |Total|-|-| |Special Economic Zone re-investment reserve| | | |Opening balance|7,287|2,538| |Transfer from retained earnings|8,380|9,407| |Transfer to retained earnings|(3,858)|(4,658)| |Total|11,809|7,287| |Retained earnings| | | |Opening balance|78,158|79,586| |Profit for the year|42,147|38,327| |Remeasurement of defined employee benefit plans|275|280| |Expenses for buy-back of equity shares|-|(49)| |Tax on buy-back of equity shares|-|(4,192)| |Buy-back of equity shares|-|(17,996)| |Transfer from Special Economic Zone re-investment reserve|3,858|4,658| |Transfer from general reserve|-|27| |Purchase of non-controlling interests|(8)|-| |Total|1,24,430|1,00,641| |Less: Appropriations| | | |Dividend on equity shares|41,347|13,317| |Transfer to capital redemption reserve|-|4| |Transfer to Special Economic Zone re-investment reserve|8,380|9,407| |Transfer from statutory reserve|(19)|(245)| |Total|74,722|78,158| # Notes forming part of Consolidated Financial Statements | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Statutory reserve| | | |Opening balance|162|407| |Transfer to retained earnings|(19)|(245)| | |143|162| |Investment revaluation reserve| | | |Opening balance|488|828| |Change during the year (net)|(447)|(340)| | |41|488| |Cash flow hedging reserve (Refer note 8(k))| | | |Opening balance|(26)|29| |Change during the year (net)|6|(55)| | |(20)|(26)| |Foreign currency translation reserve| | | |Opening balance|2,189|2,137| |Change during the year (net)|659|52| | |2,848|2,189| | |90,058|88,773| # 12) 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 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. |
# Notes forming part of Consolidated Financial Statements 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 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. 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. 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, 2023|Year ended March 31, 2022| |---|---|---| |Consultancy services|2,23,332|1,90,289| |Sale of equipment and software licences|2,126|1,465| |Total|2,25,458|1,91,754| 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. 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. # Notes forming part of Consolidated Financial Statements 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 1,38,231 crore out of which 53.17% 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, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|4,419|4,080| |Invoices raised that were included in the contract assets balance at the beginning of the year|(3,305)|(3,150)| |Increase due to revenue recognised during the year, excluding amounts billed during the year|4,519|3,457| |Translation exchange difference|198|32| |Balance at the end of the year|5,831|4,419| # Changes in unearned and deferred revenue are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|4,745|4,847| |Revenue recognised that was included in the unearned and deferred revenue balance at the beginning of the year|(3,071)|(3,251)| |Increase due to invoicing during the year, excluding amounts recognised as revenue during the year|3,088|3,094| |Translation exchange difference|84|55| |Balance at the end of the year|4,846|4,745| # Reconciliation of revenue recognised with the contracted price is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Contracted price|2,28,932|1,94,777| |Reductions towards variable consideration components|(3,474)|(3,023)| |Revenue recognised|2,25,458|1,91,754| The reduction towards variable consideration comprises of volume discounts, service level credits, etc. # 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, 2023|Year ended March 31, 2022| |---|---|---| |Interest income|3,248|2,663| |Dividend income|15|4| |Net gain on disposal / fair valuation of investments carried at fair value through profit or loss|220|198| |Net gain on sale of investments other than equity shares carried at fair value through OCI|4|-| |Net gain on disposal of property, plant and equipment|26|23| |Net gain / (loss) on lease modification|(2)|7| |Net loss on sub-lease|-|(9)| |Net foreign exchange gain / (loss)|(159)|1,045| |Other income|97|87| |Total|3,449|4,018| Interest income comprise: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Interest on bank balances and bank deposits|291|295| |Interest on financial assets carried at amortised cost|657|546| |Interest on financial assets carried at fair value through OCI|2,131|1,818| |Other interest (including interest on tax refunds)|169|4| Dividend income comprise: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Dividend from mutual fund units and other investments|15|4| # 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 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 using the Projected Unit Credit Method. # Employee benefit expenses consist of the following: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Salaries, incentives and allowances|1,14,359|96,263| |Contributions to provident and other funds|9,644|8,450| |Staff welfare expenses|3,519|2,841| |Total|1,27,522|1,07,554| # Employee benefit obligations consist of the following: # Employee benefit obligations - Non-current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Gratuity liability|11|13| |Foreign defined benefit plans|383|490| |Other employee benefit obligations|142|174| |Total|536|677| # Employee benefit obligations - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Compensated absences|4,027|3,760| |Other employee benefit obligations|38|50| |Total|4,065|3,810| # 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: |Change in benefit obligations| |Year ended March 31, 2023| | | | |Year ended March 31, 2022| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |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| | | | |Benefit obligations, beginning of the year|4,482|3|2,294|269|7,048|4,315|12|2,292|237|6,856| | |Translation exchange difference|-|-|94|29|123|-|-|(17)|4|(13)| | |Plan participants' contribution|-|-|18|-|18|-|-|15|-|15| | |Service cost|515|-|37|50|602|539|-|51|47|637| | |Interest cost|332|-|30|11|373|296|-|19|3|318| | |Remeasurement of the net defined benefit liability|(158)|-|(627)|(39)|(824)|(188)|1|(34)|(9)|(230)| | |Past service cost / (credit)|-|-|(7)|-|(7)|-|-|3|-|3| | |Benefits paid|(504)|-|(6)|(26)|(536)|(489)|(1)|(35)|(13)|(538)| | |Shift of plan from unfunded to funded position| |-|-|-|-|-|9|(9)|-|-|-| |Benefit obligations, end of the year|4,667|3|1,833|294|6,797|4,482|3|2,294|269|7,048| | # Change in plan assets |Change in plan assets|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2022|Year ended March 31, 2022|Year ended March 31, 2022|Year ended March 31, 2022| | | | | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |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| | | |Fair value of plan assets, beginning of the year|5,527| |-|2,132|-|7,659|4,706|-|2,073|-|6,779| |Translation exchange difference| |-|-|111|-|111|-|-|(21)|-|(21)| |Interest income|425| |-|26|-|451|335|-|16|-|351| |Employers' contributions|1,060| |-|19|-|1,079|980|-|48|-|1,028| # Notes forming part of Consolidated Financial Statements |(` crore)| | |Year ended March 31, 2023| | | | | |Year ended March 31, 2022| | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Domestic plans|Foreign plans|Foreign plans| | |Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| |Plan participants' contribution| |-|-|18|-|18|-|-|15|-|15| |Benefits paid|(504)| |-|(6)|-|(510)|(489)|-|(35)|-|(524)| |Remeasurement- return on plan assets excluding amount included in interest income|(103)|-|(371)|-| |(474)|(5)|-|36|-|31| |Fair value of plan assets, end of the year|6,405| |-|1,929|-|8,334|5,527|-|2,132|-|7,659| |(` crore)| | |As at March 31, 2023| | | | | |As at March 31, 2022| | | |---|---|---|---|---|---|---|---|---|---|---|---| |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|(8)|(3)|(89)|(294)|(394)|(10)|(3)|(221)|(269)|(503)| |Surplus of plan assets over obligations|1,746|-|185|-| |1,931|1,055|-|59|-|1,114| | | |1,738|(3)|96|(294)|1,537|1,045|(3)|(162)|(269)|611| |(` crore)| | |As at March 31, 2023| | | |As at March 31, 2022| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total|Domestic plans|Domestic plans|Foreign plans|Foreign plans|Total| | | |Category of assets|Corporate bonds|1,832|-|287|-|2,119|1,697|-|369|-|2,066| | |Equity instruments|121|-|352|-|473|66|-|543|-|609| | |Government bonds and securities|2,917|-|-|-|2,917|2,625|-|195|-|2,820| | |Insurer managed funds|1,390|-|543|-|1,933|983|-|503|-|1,486| | |Bank balances|16|-|94|-|110|10|-|24|-|34| | |Others|129|-|653|-|782|146|-|498|-|644| | | |6,405|-|1,929|-|8,334|5,527|-|2,132|-|7,659| # Notes forming part of Consolidated Financial Statements Net periodic gratuity / pension cost, included in employee cost consists of the following components: |(` crore)| | |Year ended March 31, 2023| | | | |Year ended March 31, 2022| | | |---|---|---|---|---|---|---|---|---|---|---| | |Domestic|Domestic|Foreign|Foreign|Total|Domestic|Domestic|Foreign|Foreign|Total| |plans|Funded|Unfunded|Funded|Unfunded| |Funded|Unfunded|Funded|Unfunded| | |Service cost|515|-|37|50|602|539|-|51|47|637| |Net interest on net defined benefit (asset) / liability|(93)|-|4|11|(78)|(39)|-|3|3|(33)| |Past service cost / (credit)|-|-|(7)|-|(7)|-|-|3|-|3| |Net periodic gratuity / pension cost|422|-|34|61|517|500|-|57|50|607| |Actual return on plan assets|322|-|(345)|-|(23)|330|-|52|-|382| # Remeasurement of the net defined benefit (asset) / liability: |(` crore)|Year ended March 31, 2023| | | | | |---|---|---|---|---|---| |Domestic|Domestic|Foreign|Foreign|Total| | |plans|Funded|Unfunded|Funded|Unfunded| | |Actuarial (gains) and losses arising from changes in demographic assumptions|30|-|-|5|35| |Actuarial (gains) and losses arising from changes in financial assumptions|(164)|-|(625)|(47)|(836)| |Actuarial (gains) and losses arising from changes in experience adjustments|(24)|-|(2)|3|(23)| |Remeasurement of the net defined benefit liability|(158)|-|(627)|(39)|(824)| |Remeasurement- return on plan assets excluding amount included in interest income|103|-|371|-|474| |Asset ceiling recognised in OCI|-|-|-|-|-| | |(55)|-|(256)|(39)|(350)| # Notes forming part of Consolidated Financial Statements |(` crore)| | | |Year ended March 31, 2022|Total| | |---|---|---|---|---|---|---| | | |Domestic plans|Foreign plans|Domestic plans|Foreign plans| | |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)| | |34|18|51| |Remeasurement of the net defined benefit liability|(188)| | |(34)|(9)|(230)| |Remeasurement- return on plan assets excluding amount included in interest income| |5| |(36)|-|(31)| | |(183)| | |(70)|(9)|(261)| File: AR_TCS_2022_2023.md # The assumptions used in accounting for the defined benefit plan are set out below: | |Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2022|Year ended March 31, 2022| |---|---|---| | |Domestic plans|Foreign plans|Domestic plans|Foreign plans| |Discount rate|7.25%- 7.50%|2.16%- 9.40%|4.50%-7.25%|0.77%-8.30%| |Rate of increase in compensation levels of covered employees|4.00%- 8.00%|1.50%- 7.00%|4.00%-6.00%|1.50%-7.00%| |Rate of return on plan assets|7.25%- 7.50%|2.16%- 9.40%|4.50%-7.25%|0.77%-8.30%| |Weighted average duration of defined benefit obligations|2-13 Years|3-28 Years|2-16 years|3-31 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, 2023. |
The Group is expected to contribute `55 crore to defined benefit plan obligations funds for the year ending March 31, 2024 comprising domestic component of `8 crore and foreign component of `47 crore. # 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: |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Increase of 0.50%|(265)|(372)| |Decrease of 0.50%|290|422| # If the expected salary growth increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Increase of 0.50%|155|200| |Decrease of 0.50%|(147)|(188)| # Notes forming part of Consolidated 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 year ended March 31, 2023 as follows: |Year ending March 31|Defined benefit obligations (` crore)| |---|---| |2024|755| |2025|644| |2026|617| |2027|618| |2028|609| |2029-2033|2,722| # 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 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. 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, 2023 (` crore)|As at March 31, 2022 (` crore)| |---|---|---| |Fair value of plan assets|25,511|22,814| |Present value of defined benefit obligations|(25,511)|(22,814)| |Net excess / (shortfall)|-|-| The plan assets have been primarily invested in Government securities and corporate bonds. |
# Notes forming part of Consolidated Financial Statements The principal assumptions used in determining the present value obligations of interest guarantee under the deterministic approach are as follows: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Discount rate|7.50%|7.00%| |Average remaining tenure of investment portfolio|7 years|8 years| |Guaranteed rate of return|8.15%|8.10%| The Group expensed `1,628 crore and `1,383 crore for the years ended March 31, 2023 and 2022, 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 `394 crore and `383 crore for the years ended March 31, 2023 and 2022, respectively, towards Employees' Superannuation Fund. # Foreign defined contribution plans The Group expensed `2,109 crore and `1,796 crore for the years ended March 31, 2023 and 2022, respectively, towards foreign defined contribution plans. # 15) Cost recognition 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: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Raw materials, sub-assemblies and components consumed|37|29| |Equipment and software licences purchased|1,846|1,137| | |1,883|1,166| |Finished goods and work-in-progress| | | |Opening stock|3|-*| |Less: Closing stock|5|3| | |(2)|(3)| | |1,881|1,163| *Represents value less than `0.50 crore. # Notes forming part of Consolidated Financial Statements # (b) Other expenses Other expenses consist of the following: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Fees to external consultants|21,337|17,409| |Facility expenses|2,655|2,139| |Travel expenses|2,675|1,589| |Communication expenses|2,246|2,050| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|140|135| |Other expenses|7,743|6,658| |Total|36,796|29,980| # 16) Finance costs Finance costs consist of the following: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Interest on lease liabilities|492|519| |Interest on tax matters|46|218| |Other interest costs|241|47| |Total|779|784| # 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 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. # Notes forming part of Consolidated Financial Statements 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. 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, 2023|Year ended March 31, 2022| |---|---|---| |Current tax| | | |Current tax expense for current year|15,389|14,333| |Current tax benefit pertaining to prior years|(632)|(679)| | |14,757|13,654| |Deferred tax| | | |Deferred tax benefit for current year|(130)|(333)| |Deferred tax benefit pertaining to prior years|(23)|(83)| | |(153)|(416)| | |14,604|13,238| # 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, 2023|Year ended March 31, 2022| |---|---|---| |Profit before tax|56,907|51,687| |Indian statutory income tax rate|34.94%|34.94%| |Expected income tax expense|19,887|18,062| |Tax effect of adjustments to reconcile expected income tax expense to reported income tax expense| | | |Tax holidays|(5,112)|(4,792)| |Income exempt from tax|(236)|(396)| |Undistributed earnings in branches and subsidiaries|276|(47)| |Tax on income at different rates|508|980| |Tax pertaining to prior years|(655)|(762)| |Others (net)|(64)|193| |Total income tax expense|14,604|13,238| # Notes forming part of Consolidated Financial Statements 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). |
# Significant components of net deferred tax assets and liabilities for the year ended March 31, 2023 are as follows: | |Opening balance|Recognised in profit and loss|Recognised in / 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|434|250|-|-|2|686| |Provision for employee benefits|1,042|73|(62)|-|3|1,056| |Cash flow hedges|7|-|(1)|-|-|6| |Receivables, financial assets at amortised cost|471|(46)|-|-|13|438| |MAT credit entitlement|975|-|-|(975)|-|-| |Branch profit tax|(77)|(58)|-|-|-|(135)| |Undistributed earnings of subsidiaries|(355)|(179)|-|-|-|(534)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(320)|(1)|234|-|3|(84)| |Lease liabilities|241|5|-|-|4|250| |Others|700|109|-|-|23|832| |Total|3,118|153|171|(975)|48|2,515| # Gross deferred tax assets and liabilities are as follows: |As at March 31, 2023|Assets|Liabilities|Net| |---|---|---|---| |Deferred tax assets / (liabilities) in relation to Property, plant and equipment and intangible assets|788|102|686| |Provision for employee benefits|1,065|9|1,056| |Cash flow hedges|6|-|6| |Receivables, financial assets at amortised cost|438|-|438| |Branch profit tax|-|135|(135)| |Undistributed earnings of subsidiaries|-|534|(534)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(83)|1|(84)| |Lease liabilities|250|-|250| |Others|843|11|832| |Total|3,307|792|2,515| # 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: | |Opening balance|Recognised in profit and loss|Recognised in / reclassified from other comprehensive income|Ajustments / utilisation|Exchange difference|Closing balance| |---|---|---|---|---|---|---| |Deferred tax assets / (liabilities) in relation to Property, plant and equipment and intangible assets|309|131|-|-|(6)|434| |Provision for employee benefits|897|94|58|(2)|(5)|1,042| |Cash flow hedges|(8)|-|16|-|(1)|7| |Receivables, financial assets at amortised cost|424|42|-|-|5|471| |MAT credit entitlement|1,710|-|-|(735)|-|975| |Branch profit tax|(310)|233|-|-|-|(77)| |Undistributed earnings of subsidiaries|(198)|(157)|-|-|-|(355)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(500)|-|180|-|-|(320)| |Lease liabilities|261|(22)|-|-|2|241| |Others|579|95|-|-|26|700| |Total|3,164|416|254|(737)|21|3,118| # Gross deferred tax assets and liabilities are as follows: | |Assets|Liabilities|Net| |---|---|---|---| |Deferred tax assets / (liabilities) in relation to 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| |Total|3,708|590|3,118| 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. # Notes forming part of Consolidated Financial Statements Unrecognised deferred tax assets relate primarily to business losses and tax credit entitlements which do not qualify for recognition as per the applicable accounting standards. These unexpired business losses will expire based on the year of origination as follows: |March 31,|Unabsorbed business losses (` crore)| |---|---| |2028|35| Under the Income-tax Act, 1961, Tata Consultancy Services Limited 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. Deferred tax liability on temporary differences of `7,180 crore as at March 31, 2023, associated with investments in subsidiaries, has not been recognised, as it is the intention of Tata Consultancy Services Limited to reinvest the earnings of these subsidiaries for the foreseeable future. # Direct tax contingencies 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 `1,542 crore and `1,652 crore as at March 31, 2023 and 2022, 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, 2023 and 2022, 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. # 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, 2023|Year ended March 31, 2022| |---|---|---| |Profit for the year attributable to shareholders of the Company (` crore)|42,147|38,327| |Weighted average number of equity shares|365,90,51,373|369,88,32,195| |Basic and diluted earnings per share (`)|115.19|103.62| |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. # Notes forming part of Consolidated Financial Statements 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 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 since 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, 2023 and 2022, is as follows: # Year ended March 31, 2023 | |Banking, Financial Services and Insurance|Manufacturing|Retail and Consumer Business|Communication, Media and Technology|Life Sciences and Healthcare|Others|Total| |---|---|---|---|---|---|---|---| |Revenue from operations|86,127|21,236|37,506|37,653|24,605|18,331|2,25,458| |Segment result|22,345|5,842|9,636|10,667|6,894|3,875|59,259| |Total unallocable expenses| | | | | | |5,801| |Operating income| | | | | | |53,458| |Other income| | | | | | |3,449| |Profit before tax| | | | | | |56,907| |Tax expense| | | | | | |14,604| |Profit for the year| | | | | | |42,303| |Depreciation and amortisation expense (unallocable)| | | | | | |5,021| |Significant non-cash items (allocable)|32|6|6|5|25|65|139| # Year ended March 31, 2022 | |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 # Information regarding geographical revenue is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Americas| | | |North America|1,20,336|96,865| |Latin America|4,000|3,207| |Europe| | | |United Kingdom|33,861|30,399| |Continental Europe|33,575|30,743| |Asia Pacific|18,132|16,927| |India|11,271|9,805| |Middle East and Africa|4,283|3,808| |Total|2,25,458|1,91,754| Geographical revenue is allocated based on the location of the customers. |
# Information regarding geographical non-current assets is as follows: |Geography|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Americas| | | |North America|1,899|1,637| |Latin America|1,056|852| |Europe| | | |United Kingdom|1,487|1,470| |Continental Europe|2,422|2,164| |Asia Pacific|848|743| |India|19,254|19,494| |Middle East and Africa|178|152| |Total|27,144|26,512| 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 about major customers No single customer represents 10% or more of the Group's total revenue for the years ended March 31, 2023 and 2022, respectively. # 20) Commitments and contingencies # Capital commitments The Group has contractually committed (net of advances) `1,543 crore and `1,439 crore as at March 31, 2023 and 2022, respectively, for purchase of property, plant and equipment. # Contingencies - Direct tax matters Refer note 17. # Notes forming part of Consolidated Financial Statements # * 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 `568 crore as at March 31, 2023 and 2022, 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 `277 crore and `291 crore as at March 31, 2023 and 2022, respectively, against the Group 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 `7,730 crore (US $940 million) to Epic which was thereafter reduced by the Trial Court to `3,454 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 `822 crore (US $100 million) award and `1,645 crore (US $200 million) in punitive damages. File: AR_TCS_2022_2023.md On August 20, 2020, the Appeals Court (a) vacated the award of `2,303 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 `1,151 crore (US $140 million), (b) affirmed the District Court's decision vacating the jury's award of `822 crore (US $100 million) in compensatory damages for alleged use of "other confidential information" by the Company, and, (c) affirmed the District Court's decision upholding the jury's award of `1,151 crore (US $140 million) in compensatory damages for use of the comparative analysis by the Company. 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 and loss for three month period ended September 30, 2020. This was presented as an "exceptional item" in the consolidated statement of profit and loss. On April 8, 2021, Epic approached the Supreme Court seeking review of the Order of the Appeals Court which was denied by the Supreme Court on March 21, 2022. On April 21, 2022, Epic invoked payment of `1,151 crore (US $140 million) out of `3,618 crore (US $440 million) Letter of Credit provided as security, towards compensatory damages awarded by the District Court and confirmed by the Appeals Court, already provided for in the earlier years. On July 1, 2022, the District Court passed an Order affirming the punitive damages at `1,151 crore (US $140 million). The Company has filed an appeal on November 16, 2022, in the Appeals Court to reduce the punitive damages awarded by the District Court, which is pending. Pursuant to encashment of the Letter of Credit towards compensatory damages, the value of Letter of Credit made available to Epic stands reduced to `1,250 crore (US $152 million). # * 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 amounts assessed as contingent liability do not include interest that could be claimed by counter parties. # 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, 2023|% of voting power as at March 31, 2022|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss As % of consolidated profit or loss Amount (` crore)|Share in other comprehensive income As % of total comprehensive income Amount (` crore)|Share in total comprehensive income Amount (` crore)| |---|---|---|---|---|---|---|---| |Tata Consultancy Services Limited|India|-|-|76.39|74,538|87.24|39,106| | | | | |243.21|(394)|86.67|38,712| |Subsidiaries (held directly)| | | | | | | | |APTOnline Limited|India|89.00|89.00|0.12|116|0.04|16| |MP Online Limited|India|89.00|89.00|0.13|127|0.06|26| |C-Edge Technologies Limited|India|51.00|51.00|0.37|361|0.19|86| |MahaOnline Limited|India|74.00|74.00|0.09|86|0.02|7| |TCS e-Serve International Limited|India|100.00|100.00|0.26|249|0.21|92| |TCS Foundation|India|100.00|100.00|1.34|1,306|(0.36)|(161)| |Diligenta Limited|U.K.|100.00|100.00|1.56|1,525|0.28|124| |Tata Consultancy Services Canada Inc.|Canada|100.00|100.00|1.40|1,367|1.86|835| |Tata America International Corporation|U.S.A.|100.00|100.00|1.68|1,642|2.15|962| |Tata Consultancy Services Asia Pacific Pte Ltd.|Singapore|100.00|100.00|1.04|1,011|0.62|278| |Tata Consultancy Services Belgium|Belgium|100.00|100.00|0.48|465|0.22|97| |Tata Consultancy Services Deutschland GmbH|Germany|100.00|100.00|0.82|804|0.60|269| |Tata Consultancy Services Netherlands BV|Netherlands|100.00|100.00|3.16|3,080|1.05|469| |Tata Consultancy Services Sverige AB|Sweden|100.00|100.00|0.93|906|0.44|198| |TCS FNS Pty Limited|Australia|100.00|100.00|0.15|143|0.10|43| |TCS Iberoamerica SA|Uruguay|100.00|100.00|1.85|1,806|0.39|174| |Tata Consultancy Services (Africa) (PTY) Ltd.|South Africa|100.00|100.00|0.05|49|0.06|27| |Tata Consultancy Services Qatar L.L.C.|Qatar|100.00|100.00|0.04|35|-|(2)| |Tata Consultancy Services UK Limited|U.K.|100.00|100.00|0.03|29|-|1| # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2023|% of voting power as at March 31, 2022|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss As % of total comprehensive income Amount (` crore)|Share in other comprehensive income As % of total comprehensive income Amount (` crore)|Share in total comprehensive income Amount (` crore)| |---|---|---|---|---|---|---|---| |Tata Consultancy Services Ireland Limited|Ireland|100.00|100.00|0.34|329|0.14|64| |Tata Consultancy Services (China) Co., Ltd.|China|100.00|93.20|0.32|309|0.10|47| |Tata Consultancy Services Japan, Ltd.|Japan|66.00|66.00|1.72|1,677|0.72|323| |Tata Consultancy Services Malaysia Sdn Bhd|Malaysia|100.00|100.00|0.07|69|0.04|17| |PT Tata Consultancy Services Indonesia|Indonesia|100.00|100.00|0.03|31|0.03|14| |Tata Consultancy Services (Philippines) Inc.|Philippines|100.00|100.00|0.13|127|0.18|80| |Tata Consultancy Services (Thailand) Limited|Thailand|100.00|100.00|0.01|6|-|1| |Tata Consultancy Services Italia s.r.l.|Italy|100.00|100.00|0.08|78|-|-| |Tata Consultancy Services Luxembourg S.A. (G.D. de Luxembourg)|Luxembourg|100.00|100.00|0.12|118|0.12|53| |Tata Consultancy Services Switzerland Ltd.|Switzerland|100.00|100.00|0.86|844|0.46|207| |Tata Consultancy Services Osterreich GmbH|Austria|100.00|100.00|-|4|-|-| |Tata Consultancy Services Danmark ApS|Denmark|-|100.00|-|-5|-|-5| |Tata Consultancy Services De España S.A.|Spain|100.00|100.00|0.12|121|0.10|43| |Tata Consultancy Services (Portugal) Unipessoal, Limitada|Portugal|100.00|100.00|0.04|35|0.04|19| |Tata Consultancy Services France|France|100.00|100.00|(0.38)|(367)|0.05|24| |Tata Consultancy Services Saudi Arabia|Saudi Arabia|100.00|100.00|0.14|134|0.02|11| |TCS Business Services GmbH|Germany|100.00|100.00|0.08|76|0.01|4| |TCS Technology Solutions AG|Germany|100.00|100.00|0.73|716|0.66|295| # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2023|% of voting power as at March 31, 2022|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss As % of consolidated net assets|Share in Profit or loss Amount (` crore)|Share in other comprehensive income As % of total comprehensive income|Share in other comprehensive income Amount (` crore)|Share in total comprehensive income As % of total comprehensive income|Share in total comprehensive income Amount (` crore)| | |---|---|---|---|---|---|---|---|---|---|---|---| |Saudi Desert Rose Holding B.V.|Netherlands|100.00|100.00|-|-|-|-|-|-|-| | |Tata Consultancy Services (South Africa) (PTY) Ltd.|South Africa|100.00|100.00|0.10|93|0.08|38|-|-|0.09|38| |TCS Financial Solutions Beijing Co., Ltd.|China|100.00|100.00|0.04|37|(0.01)|(4)|-|-|(0.01)|(4)| |TCS Financial Solutions Australia Pty Limited|Australia|100.00|100.00|0.11|74|0.08|34|-|-|0.08|34| |Tata Consultancy Services Bulgaria EOOD|Bulgaria|100.00|100.00|0.03|26|0.04|16|-|-|0.04|16| |TCS Solution Center S.A.|Uruguay|100.00|100.00|0.34|329|0.25|117|-|-|0.26|117| |TCS Uruguay S.A.|Uruguay|100.00|100.00|0.25|240|0.23|101|-|-|0.23|101| |Tata Consultancy Services Argentina S.A.|Argentina|100.00|100.00|0.01|5|0.01|4|-|-|0.01|4| |Tata Consultancy Services Do Brasil Ltda|Brazil|100.00|100.00|0.42|406|0.17|85|-|-|0.19|85| |Tata Consultancy Services De Mexico S.A., De C.V.|Mexico|100.00|100.00|1.18|1,150|0.83|370|(6.79)|11|0.84|381| |MGDC S.C.|Mexico|100.00|100.00|0.06|59|0.01|6|(0.62)|1|0.02|7| |TCS Inversiones Chile Limitada|Chile|100.00|100.00|0.33|344|0.15|74|-|-|0.16|74| |Tata Consultancy Services Chile S.A.|Chile|100.00|100.00|0.42|428|0.19|83|-|-|0.18|83| |Tata Consultancy Services Guatemala, S.A.|Guatemala|100.00|100.00|0.01|20|0.02|7|-|-|0.02|7| |TATASOLUTION CENTER S.A.|Ecuador|100.00|100.00|0.11|120|0.11|49|0.62|(1)|0.10|48| |Trusts|India|-|-|0.29|295|0.01|3|-|-|0.01|3| |TOTAL| |100.00| |97,580|100.00|44,827|100.00|(162)|100.00|44,665| | a) Adjustments arising out of consolidation (6,374) (2,524) 654 (1,870) b) Non-controlling interests Indian subsidiaries APTOnline Limited (13) (2) - (2) MP Online Limited (14) (3) - (3) # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2023|% of voting power as at March 31, 2022|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss (` crore)|Share in other comprehensive income (` crore)|Share in total comprehensive income (` crore)| |---|---|---|---|---|---|---|---| |C-Edge Technologies Limited| |(177)|(42)| |(42)| | | |MahaOnline Limited| |(22)|(2)| |(2)| | | |Tata Consultancy Services (China) Co., Ltd.| |(557)|(107)| |1| |(106)| |Tata Consultancy Services Japan, Ltd.| | | | | | | | |TOTAL| |(782)|(156)| |1| |(155)| |TOTAL| | | |90,424|42,147|493|42,640| # Notes: 1. On May 18, 2022, Tata Consultancy Services Asia Pacific Pte Ltd. acquired additional 6.8% ownership interest in Tata Consultancy Services (China) Co., Ltd. |
for a purchase consideration of `25 crore thereby making it a wholly owned subsidiary. 2. Tata Consultancy Services Danmark ApS liquidated w.e.f. July 27, 2022. # 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| |---|---|---|---|---|---| |Year ended March 31, 2023|38|1,174|3,050|-|4,262| |Revenue from operations|1|610|225|-|836| |Purchases of goods and services (including reimbursements)|227|-|-|-|227| |Brand equity contribution|1|25|59|-|85| |Facility expenses|-|56|47|-|103| |Lease rental|-|(1)|-|-|(1)| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|-|-|-|2,955|2,955| |Contribution and advance to post employment benefit plans|-|13|137|-|150| |Purchase of property, plant and equipment|-|1|45|-|46| |Advances given|-|1|15|-|16| |Advances recovered|-|25|4|-|29| |Advances taken|29,881|16|6|-|29,903| | |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| |---|---|---|---|---|---| |Year ended March 31, 2022|40|789|2,785|-|3,614| |Revenue from operations|-|571|159|-|730| |Purchases of goods and services (including reimbursements)|204|-|-|-|204| |Brand equity contribution|1|20|45|-|66| |Facility expenses|-|73|24|-|97| |Lease rental|-|(3)|1|-|(2)| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|-|-|-|2,322|2,322| |Contribution and advance to post employment benefit plans|-|15|147|-|162| |Purchase of property, plant and equipment|-|3|6|-|9| |Advances given|-|4|17|-|21| |Advances recovered|9,609|5|2|-|9,616| |Dividend paid|11,164|4|6|-|11,174| # Notes forming part of Consolidated Financial Statements # Balances receivable from 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| |---|---|---|---|---|---| |As at March 31, 2023|2|434|1,004|-|1,440| | |10|95|85|-|190| | |12|529|1,089|-|1,630| | |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| |---|---|---|---|---|---| |As at March 31, 2022|11|245|925|-|1,181| | |10|53|31|-|94| | |21|298|956|-|1,275| # Balances payable to 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| |---|---|---|---|---|---| |As at March 31, 2023|213|377|322|278|1,190| | |-|12|50|-|62| | |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| |---|---|---|---|---|---| |As at March 31, 2022|189|499|146|-|834| | |-|37|201|-|238| # Notes forming part of Consolidated Financial Statements # Material related party transactions are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Revenue from operations|1,707|1,500| |Jaguar Land Rover Limited|1,707|1,500| |Tata Steel IJmuiden BV|533|558| |Tata Digital Private Limited|502|269| # Material related party balances are as follows: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Trade receivables and contract assets|482|379| |Jaguar Land Rover Limited|482|379| # Transactions with key management personnel are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Short-term benefits|58|53| |Dividend paid during the year|2|1| |Total|60|54| 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. # 23) No funds have been advanced/loaned/invested (from borrowed funds or from share premium or from any other sources / kind of funds) by the Group to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Group (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. No funds have been received by the Group from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Group shall (i) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. |
# 24) The sitting fees and commission paid to non-executive directors is `13 crore and `12 crore as at March 31, 2023 and 2022, respectively. # 25) 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. 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. # 26) On May 18, 2022, Tata Consultancy Services Asia Pacific Pte Ltd. acquired additional 6.8% ownership interest in Tata Consultancy Services (China) Co., Ltd. for a purchase consideration of `25 crore thereby making it a wholly owned subsidiary. # Notes forming part of Consolidated Financial Statements # 27) On March 16, 2023, Tata Consultancy Services (China) Co., Ltd., acquired control of 100 % equity interest in TCS Financial Solutions Beijing Co., Ltd., from TCS Financial Solutions Australia Pty Limited. The entities are engaged in the business of developing and selling computer software and providing information technology services. The transaction has been accounted as combination of entities under common control. There is no impact in the consolidated financial statements of the Group as the entities are under the same parent. # 28) Tata Consultancy Services Danmark ApS liquidated w.e.f. July 27, 2022. # 29) Dividends Dividends paid during the year ended March 31, 2023 include an amount of `22.00 per equity share towards final dividend for the year ended March 31, 2022 and an amount of `91.00 per equity share towards interim dividends for the year ended March 31, 2023. 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 declared by the Company are based on profits available for distribution. On April 12, 2023, the Board of Directors of the Company have proposed a final dividend of `24.00 per share in respect of the year ended March 31, 2023 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately `8,782 crore. As per our report of even date attached For B S R & Co. LLP Chartered Accountants Firm's registration no: 101248W/W-100022 Amit Somani Partner Membership No: 060154 Mumbai, April 12, 2023 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 12, 2023 ,nte˥˳ated ƪnnXal 5e˱o˳t 2022-23 Consolidated Financial Statements 2022-23 | 250 # Standalone Financial Statements # Independent Auditor's Report 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 (the "Company") which comprise the standalone balance sheet as at 31 March 2023, 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 significant accounting policies and other explanatory information. 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 ("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 2023, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date. # 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 we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements. # Key Audit Matter(s) Key audit matters 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. |Revenue recognition- Fixed price contracts where revenue is recognized using percentage of completion method|Refer Note 4(a) and 10 to the standalone financial statements| |---|---| |The key audit matter|How the matter was addressed in our audit| |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. 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;|Our audit procedures included the following: 1. 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. 2. Involvement of our Information technology ('IT') specialists, as required: i. Assessed the IT environment in which the business systems operate and tested system controls over computation of revenue recognised; ii. Tested the IT controls over appropriateness of cost and revenue reports generated by the system;| # The key audit matter 2. 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; 3. These contracts may involve onerous obligations which requires critical assessment of foreseeable losses to be made by the Company; and 4. At year-end, significant amount of work in progress (Contract assets), related to these contracts are recognised on the balance sheet. # How the matter was addressed in our audit iii. Tested the controls pertaining to allocation of resources and budgeting systems which prevent the unauthorized recording/ changes to costs incurred; and iv. Tested on a random sampling basis the controls relating to the estimation of contract costs required to complete the respective projects. 3. On selected specific and statistical samples of contracts, we tested that the revenue recognized is in accordance with the revenue recognition accounting standard including- i. Evaluated the identification of performance obligations and the ascribed transaction price; ii. For testing Company's computation of the estimation of contract costs and onerous obligations, if any. We: - assessed that the estimates of costs to complete were reviewed and approved by appropriate designated management personnel; - performed a retrospective analysis of costs incurred with estimated costs to identify significant variations and challenged whether those variations are required to be considered in estimating the remaining costs to complete the contract; - assessed the appropriateness of work in progress (contract assets) on balance sheet date by evaluating the underlying documentation to identify possible changes in estimated costs to complete the remaining performance obligations; - inspected underlying documents and performed analytics to determine reasonableness of contract costs. # Other Information 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 auditor's report(s) 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 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. # Management's and Board of Directors' Responsibilities for the Standalone Financial Statements The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. 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. # Auditor's Responsibilities for the Audit of the Standalone Financial Statements 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. 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 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. File: AR_TCS_2022_2023.md - 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. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. |
- 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. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 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 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. 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. 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. 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. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act. 5. On the basis of the written representations # received from the directors as on 31 March 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of Section 164(2) of the Act. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". # 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 Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: The Company has disclosed the impact of pending litigations as at 31 March 2023 on its financial position in its standalone financial statements- Refer income tax liabilities disclosed in the balance sheet along with Note 8(f) and Note 19 to the standalone financial statements. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. The management has represented that, to the best of it's knowledge and belief, as disclosed in the Note 21 to the standalone financial statements, 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 person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. |
The management has represented that, to the best of it's knowledge and belief, as disclosed in the Note 21 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. Based on the audit procedures performed that have been 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 (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act. The final dividend paid by the Company during the year, in respect of the same declared for the previous year is in accordance with Section 123 of the Act to the extent it applies to payment of dividend. As stated in note 25 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable. # C. With respect to the matter to be included in the Auditor's Report under Section 197(16) 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 Place: Mumbai Membership No.: 060154 Date: 12 April 2023 ICAI UDIN: 23060154BGXCZS4294 nte˥˳ated ƪnnXal 5e˱o˳t 2022-23 Standalone Financial Statements | 254 # Annexure A to the Independent Auditor's Report on the Standalone Financial Statements of Tata Consultancy Services Limited for the year ended 31 March 2023 (Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) # (i) # (a) (A) 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. No material discrepancies were noticed on such verification. # (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (other than immovable properties where the Company is the lessee and the leases agreements are duly executed in favour of the lessee) disclosed in the standalone financial statements are held in the name of the Company. |
# (d) 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. # (e) 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. # (ii) # (a) The inventory has been physically verified by the management during the year. 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 more than 10% in the aggregate of 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. The Company has not been sanctioned any working capital limit from the financial institutions. # (iii) According to the information and explanations given to us and on the basis of our examination of the records, the Company has made investments in other parties during the year. The Company has granted unsecured loans to a company and other parties and has granted unsecured advances in the nature of loans to other parties during the year, in respect of which the requisite information is as below. The Company has not made any investments in companies, firms or limited liability partnerships. The Company has not granted any loans, unsecured, to firms or limited liability partnerships and has not granted any advances in the nature of loans, unsecured, to companies, firms or limited liability partnerships during the year. The Company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured, to companies, 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 given any loans or advances in the nature of loans or stood guarantee or provided security to subsidiaries. The Company does not hold any investment in any joint ventures or associates. B. Based on the audit procedures carried on by us and as per the information and explanations given to us, the Company has given unsecured loans and unsecured advances in the nature of loans to parties other than subsidiaries as listed below. The Company has not stood guarantee or provided security to parties other than subsidiaries. # Particulars | |Guarantees|Security|Loans|Advances in nature of loans| | | |---|---|---|---|---|---|---| |Aggregate amount during the year|-|-|-|-| | | |Subsidiaries*|-|-|-|-| | | |Joint ventures*|-|-|-|-| | | |Associates*|-|-|-|-| | | |Others|-|₹ 7,588.90 Crores|₹ 196.35 Crores| | | | |Balance outstanding as at balance sheet date-|-|-|-|-| | | |Subsidiaries*|-|-|-|-| | | |Joint ventures*|-|-|-|-| | | |Associates*|-|-|-|-| | | |Others*|-|₹ 12.59 Crores|₹ 262.39 Crores| | | | *As per the Companies Act, 2013 # (b) According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investment made and the terms and conditions of the grant of loans and advances in the nature of loans during the year 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 and in case of advances in the nature of loans given, in our opinion 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 and advances in the nature of loan 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 or advance in the nature of loan granted falling due during the year, which has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to same parties. # (f) 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 granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment. # (iv) According to the information and explanations given to us and on the basis of our examination of the records, the Company has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the Companies Act, 2013. Further, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in relation to loans given and investments made. # (v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable. # (vi) 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 Act 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 Service tax, Duty of excise, Sales tax 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, in our opinion amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or Cess or other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us and on the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or Cess or other statutory dues were in arrears as at 31 March 2023 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 statutory dues of Goods and Service Tax, 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 any dispute except for the following: |Name of the Statute|Nature of the dues|Amount (` in crores)|Period to which the amount relates|Forum where dispute is pending|Remarks, if any| |---|---|---|---|---|---| |The Income-tax Act, 1961|Income-tax|4,181|Assessment Year- 2007-08, 2011-12, 2017-18, 2018-19|Commissioner of Income-tax (Appeals)| | | | |193|Assessment Year- 2006-07|Income-tax Appellate Tribunal| | | | |39|Assessment Year- 2008-09, 2009-10, 2010-11, 2016-17|Assessing Officer / National Faceless Assessment Centre| | |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, 2016-2017, 2017-2018|High Court| | | | |10|Financial Year- 1990-1991, 2002-2003, 2003-2004, 2004-2005, 2005-2006, 2006-2007, 2011-2012, 2012-2013|Tribunal| | | | |2|Financial Year- 1995-1996, 1997-1998, 2004-2005, 2011-2012, 2016-2017, 2017-2018|Assistant Commissioner| | | | |3|Financial Year- 2008-2009, 2010-2011, 2011-2012, 2012-2013, 2015-2016, 2016-2017|Deputy Commissioner| | | | |18|Financial Year- 1997-1998, 2005-2006, 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017-2018|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, 2012-2013, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Commissioner Appeals| | | | |212|Financial Year- 2006-2007, 2007-2008, 2009-2010, 2010-2011, 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Tribunal| | |Goods and Service Tax Act|GST|2|Financial Year - 2020-21|Commissioner Appeals| | These amounts are net of amount paid/ adjusted under protest ` 327 crores. # (viii) 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 surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. # (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 has not defaulted in repayment of loans and borrowing or in the payment of interest thereon to any lender. (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 or government authority. (c) According to the information and explanations given to us by the management, the Company has not obtained any term loans during the year. 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 no funds raised on short-term basis have been used for long-term purposes by the Company. # (f) According to the information and explanations given to us and procedures performed by us, 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 Act). The Company does not hold any investment in any associate or joint venture (as defined under the Act) during the year ended 31 March 2023. # (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 has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable. # (xi) (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit. (b) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government. |
(c) We have taken into consideration the whistle blower complaints received by the Company during the year while determining the nature, timing and extent of our audit procedures. # (xii) According to the information and explanations given to us, 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 Section 177 and 188 of the Act, where applicable, and the details of the related party transactions have been disclosed in the standalone financial statements as required by the applicable 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 Act 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, the Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) has more than one CIC as part of the Group. The Group has six CICs as part of the Group. # (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) File: AR_TCS_2022_2023.md 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, 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. Also refer to the Other Information paragraph of our main audit report which explains that the other information comprising the information included in Company's annual report is expected to be made available to us after the date of this auditor's report. # (xx) (a) 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 Act pursuant to any project other than ongoing projects. Accordingly, clause 3(xx)(a) of the Order is not applicable. (b) In our opinion and according to the information and explanations given to us and based on an independent legal opinion obtained by the Company, upon irrevocable transfer of funds by the Company to implementing agencies for designated multi-year projects undertaken through them, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to ongoing projects. Accordingly, clause 3(xx)(b) of the Order is not applicable. For B S R & Co. |
LLP Chartered Accountants Firm's Registration No.: 101248W/W-100022 Amit Somani Partner Place: Mumbai Membership No.: 060154 Date: 12 April 2023 ICAI UDIN: 23060154BGXCZS4294 Standalone Financial Statements | 258 # Annexure B to the Independent Auditor's Report on the standalone financial statements of Tata Consultancy Services Limited for the year ended 31 March 2023 # 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 Act (Referred to in paragraph 2(A)(f) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) # Opinion We have audited the internal financial controls with reference to financial statements of Tata Consultancy Services Limited ("the Company") as of 31 March 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2023, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note"). # 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 based on the internal financial controls with reference to financial statements 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 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. # Auditors' Responsibility Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected 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 financial statements. # Meaning of Internal Financial Controls with Reference to Financial Statements A company's internal financial controls with reference to 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 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 Financial Statements Because of the inherent limitations of internal financial controls with reference to 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 financial statements to future periods are subject to the risk that the internal financial controls with reference to 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 Place: Mumbai Membership No.: 060154 Date: 12 April 2023 ICAI UDIN: 23060154BGXCZS4294 # Standalone Balance Sheet |(` crore)|Note|As at March 31, 2023|As at March 31, 2022| | |---|---|---|---|---| |ASSETS|ASSETS|ASSETS|ASSETS| | | | | |Non-current assets|Non-current assets|Non-current assets|Non-current assets| | | | | |Property, plant and equipment|8(a)|9,186|9,669| | |Capital work-in-progress|8(a)|1,103|1,146| | |Right-of-use assets|7|5,695|5,837| | |Intangible assets|8(b)|809|1,018| | |Financial assets|Financial assets|Financial assets|Financial assets| | | | | |Investments|6(a)|2,405|2,405| | |Trade receivables|Billed|6(b)|125|90| |Unbilled| |196|53| | |Loans|6(e)|3|8| | |Other financial assets|6(f)|532|626| | |Income tax assets (net)| |2,115|1,643| | |Deferred tax assets (net)|15|2,464|2,779| | |Other assets|8(c)|2,410|1,797| | |Total non-current assets| |27,043|27,071| | |Current assets|Current assets|Current assets|Current assets| | | | | |Inventories|8(d)|27|19| | |Financial assets|Investments|6(a)|35,738|29,262| |Trade receivables|Billed|6(b)|35,534|29,852| |Unbilled| |7,264|6,250| | |Cash and cash equivalents|6(c)|1,462|8,197| | |Other balances with banks|6(d)|3,081|5,495| | |Loans|6(e)|332|5,653| | |Other financial assets|6(f)|1,557|1,432| | |Other assets|8(c)|7,789|8,032| | |Total current assets| |92,784|94,192| | |Total Assets| |1,19,827|1,21,263| | |EQUITY AND LIABILITIES|EQUITY AND LIABILITIES|EQUITY AND LIABILITIES|EQUITY AND LIABILITIES| | | | | |Equity|Share capital|6(n)|366|366| |Other equity|9|74,172|76,807| | |Total equity| |74,538|77,173| | |Liabilities| | | | | |Non-current liabilities|Financial liabilities| | | | |Lease liabilities| |4,698|4,879| | |Other financial liabilities|6(i)|340|518| | |Employee benefit obligations|12|95|103| | |Deferred tax liabilities (net)|15|190|129| | |Unearned and deferred revenue| |642|560| | |Total non-current liabilities| |5,965|6,189| | |Current liabilities|Financial liabilities| | | | |Lease liabilities| |961|976| | |Trade payables|Dues of small enterprises and micro enterprises|6(g)|-|10,082| |Dues of creditors other than small enterprises and micro enterprises|6(h)|13,768| | | |Other financial liabilities|6(i)|6,948|5,826| | |Unearned and deferred revenue| |2,962|3,013| | |Other liabilities|8(e)|3,113|7,033| | |Provisions|8(f)|279|1,377| | |Employee benefit obligations|12|3,022|2,844| | |Income tax liabilities (net)| |8,271|6,750| | |Total current liabilities| |39,324|37,901| | |Total Equity and Liabilities| |1,19,827|1,21,263| | # NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS As per our report of even date attached For B S R & Co. |
LLP Chartered Accountants Firm's registration no: 101248W/W-100022 Amit Somani Partner Membership No: 060154 For and on behalf of the Board Rajesh Gopinathan N Ganapathy Subramaniam CEO and Managing Director COO and Executive Director Samir Seksaria Pradeep Manohar Gaitonde CFO Company Secretary Mumbai, April 12, 2023 Mumbai, April 12, 2023 Standalone Financial Statements 2022-23 | 260 # Standalone Statement of Profit and Loss |(` crore)|Note|Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---|---| |Revenue from operations|10|1,90,354|1,60,341| |Other income|11|5,328|7,486| |TOTAL INCOME| |1,95,682|1,67,827| |Expenses| | | | |Employee benefit expenses|12|96,218|81,097| |Cost of equipment and software licences|13(a)|1,416|1,010| |Finance costs|14|695|486| |Depreciation and amortisation expense| |3,940|3,522| |Other expenses|13(b)|41,723|31,989| |TOTAL EXPENSES| |1,43,992|1,18,104| |PROFIT BEFORE TAX| |51,690|49,723| |Tax expense| | | | |Current tax|15|12,946|11,931| |Deferred tax|15|(362)|(395)| |TOTAL TAX EXPENSE| |12,584|11,536| |PROFIT FOR THE YEAR| |39,106|38,187| |OTHER COMPREHENSIVE INCOME (OCI)| | | | |Items that will not be reclassified subsequently to profit or loss| | | | |Remeasurement of defined employee benefit plans| |54|180| |Income tax on items that will not be reclassified subsequently to profit or loss| |(12)|(39)| |Items that will be reclassified subsequently to profit or loss| | | | |Net change in fair values of investments other than equity shares carried at fair value through OCI| |(679)|(516)| |Net change in intrinsic value of derivatives designated as cash flow hedges| |(25)|(37)| |Net change in time value of derivatives designated as cash flow hedges| |32|(34)| |Income tax on items that will be reclassified subsequently to profit or loss| |236|196| |TOTAL OTHER COMPREHENSIVE INCOME / (LOSSES)| |(394)|(250)| |TOTAL COMPREHENSIVE INCOME FOR THE YEAR| |38,712|37,937| |Earnings per equity share:- Basic and diluted (`)|16|106.88|103.24| |Weighted average number of equity shares| |365,90,51,373|369,88,32,195| # NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS As per our report of even date attached For B S R & Co. LLP Chartered Accountants Firm's registration no: 101248W/W-100022 Amit Somani Partner Membership No: 060154 For and on behalf of the Board Rajesh Gopinathan N Ganapathy Subramaniam CEO and Managing Director COO and Executive Director Samir Seksaria Pradeep Manohar Gaitonde CFO Company Secretary Mumbai, April 12, 2023 Mumbai, April 12, 2023 nte˥˳ated ƪnnXal 5e˱o˳t 2022-23 Standalone Financial Statements 2022-23 | 261 # Standalone Statement of Changes in Equity # A. EQUITY SHARE CAPITAL (` crore) |Balance as at April 1, 2022|Changes in equity share capital due to prior period errors|Restated balance as at April 1, 2022|Changes in equity share capital during the year|Balance as at March 31, 2023| |---|---|---|---|---| |366|-|366|-|366| |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| |---|---|---|---|---| |370|-|370|(4)|366| *Refer note 6(n). # B. OTHER EQUITY (` crore) |Reserves and surplus|Items of other comprehensive income|Total Equity| |---|---|---| |Capital reserve|Investment revaluation reserve|74,172| |Special Economic Zone re-investment reserve|Cash flow hedging reserve| | |Retained earnings| | | |Balance as at April 1, 2022|Profit for the year|Other comprehensive income / (losses)|Total comprehensive income|Dividend|Transfer to Special Economic Zone re-investment reserve|Transfer from Special Economic Zone re-investment reserve|Balance as at March 31, 2023| |---|---|---|---|---|---|---|---| |-|-|-|-|-|-|-|-| |17|-|-|39,106|-|-|-|74,172| |7,287|-|-|39,148|(41,347)|8,380|(3,858)|62,228| |Balance as at April 1, 2021|Profit for the year|Other comprehensive income / (losses)|Total comprehensive income|Dividend|Expenses for buy-back of equity shares|Tax on buy-back of equity shares|Buy-back of equity shares|Transfer to Special Economic Zone re-investment reserve|Transfer from Special Economic Zone re-investment reserve|Balance as at March 31, 2022| |---|---|---|---|---|---|---|---|---|---|---| |-|-|-|-|-|-|-|-|-|-|-| |13|-|-|38,187|-|-|-|-|-|-|76,807| |2,538|-|-|38,328|(13,317)|(49)|(4,192)|(18,000)|9,407|(4,658)|68,949| *Represents values less than `0.50 crore. Gain of `42 crore and `141 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, 2023 and 2022, respectively. # 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 B S R & Co. LLP Chartered Accountants Firm's registration no: 101248W/W-100022 Amit Somani Partner Membership No: 060154 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 12, 2023 Mumbai, April 12, 2023 nte˥˳ated ƪnnXal 5e˱o˳t 2022-23 Standalone Financial Statements 2022-23 | 263 # Standalone Statement of Cash Flows | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |CASH FLOWS FROM OPERATING ACTIVITIES| | | |Profit for the year|39,106|38,187| |Adjustments for:| | | |Depreciation and amortisation expense|3,940|3,522| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|110|107| |Tax expense|12,584|11,536| |Net (gain) / loss on lease modification|3|(2)| |Net gain on sub-lease|(7)|-| |Unrealised foreign exchange gain|(185)|(119)| |Net gain on disposal of property, plant and equipment|(27)|(25)| |Net gain on disposal / fair valuation of investments|(209)|(186)| |Interest income|(3,046)|(2,555)| |Dividend income (including exchange impact)|(2,112)|(3,554)| |Finance costs|695|486| |Operating profit before working capital changes|50,852|47,397| |Net change in| | | |Inventories|(8)|(12)| |Trade receivables| | | |Billed|(5,817)|(4,761)| |Unbilled|(1,157)|(644)| |Loans and other financial assets|192|(152)| |Other assets|(384)|747| |Trade payables|3,686|2,120| |Unearned and deferred revenue|31|412| |Other financial liabilities|1,222|968| |Other liabilities and provisions|(654)|388| |Cash generated from operations|47,963|46,463| |Taxes paid (net of refunds)|(10,934)|(10,336)| |Net cash generated from operating activities|37,029|36,127| |CASH FLOWS FROM INVESTING ACTIVITIES| | | |Bank deposits placed|(3,528)|(14,653)| |Inter-corporate deposits placed|(7,580)|(13,655)| |Purchase of investments|(1,22,721)|(70,826)| |Payment for purchase of property, plant and equipment|(2,041)|(2,147)| |Payment including advances for acquiring right-of-use assets|(94)|(13)| |Payment for purchase of intangible assets|(340)|(457)| |Proceeds from bank deposits|5,930|11,201| |Proceeds from inter-corporate deposits|12,966|18,560| |Proceeds from disposal / redemption of investments|1,15,825|69,451| |Proceeds from sub-lease receivable|5|4| # Standalone Statement of Cash Flows | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Proceeds from disposal of property, plant and equipment|29|29| |Interest received|2,933|2,594| |Dividend received from subsidiaries|1,866|3,554| |Net cash generated from investing activities|3,250|3,642| |CASH FLOWS FROM FINANCING ACTIVITIES|CASH FLOWS FROM FINANCING ACTIVITIES|CASH FLOWS FROM FINANCING ACTIVITIES| |Repayment of lease liabilities|(1,006)|(935)| |Interest paid|(697)|(478)| |Dividend paid|(41,347)|(13,317)| |Transfer of funds to buy-back escrow account|-|(180)| |Transfer of funds from buy-back escrow account|18|162| |Expenses for buy-back of equity shares|-|(49)| |Tax on buy-back of equity shares|(4,192)|-| |Buy-back of equity shares|-|(18,000)| |Net cash used in financing activities|(47,224)|(32,797)| |Net change in cash and cash equivalents|(6,945)|6,972| |Cash and cash equivalents at the beginning of the year|8,197|1,112| |Exchange difference on translation of foreign currency cash and cash equivalents|210|113| |Cash and cash equivalents at the end of the year|1,462|8,197| # Components of cash and cash equivalents |Balances with banks| | | |---|---|---| |In current accounts|776|809| |In deposit accounts|686|7,388| |Cheques on hand|-*|-*| |Cash on hand|-*|-*| |Remittances in transit|-*|-*| |Total|1,462|8,197| *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, 2023 and 2022 on construction / acquisition of any asset and other purposes relating to CSR activities. As per our report of even date attached For B S R & Co. |
LLP Chartered Accountants Firm's registration no: 101248W/W-100022 Amit Somani Partner Membership No: 060154 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 12, 2023 # 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, 2023, 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, 2023 and authorised for issue on April 12, 2023. # 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 has 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. # 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 # Notes forming part of Standalone Financial Statements 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 File: AR_TCS_2022_2023.md 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. 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. # 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 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below: # Ind AS 1 - Presentation of Financial Statements The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements. # Ind AS 12 - Income Taxes The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its financial statements. # Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. Standalone Financial Statements 2022-23 | 267 # Notes forming part of Standalone Financial Statements measurement uncertainty. The Company does not expect this 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, except for trade receivables which are initially measured at transaction price. 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. # 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. 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 of the option is recognised in the statement of profit and loss. # Notes forming part of Standalone Financial Statements 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. |
# Notes forming part of Standalone Financial Statements # (a) Investments Investments consist of the following: # Investments - Non-current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Investment in subsidiaries| | | |Fully paid equity shares (unquoted)|2,405|2,405| |Investments designated at fair value through OCI| | | |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, 2023|As at March 31, 2022| |---|---|---| |Investments carried at fair value through profit or loss| | | |Mutual fund units (quoted)|1,147|884| |Investments carried at fair value through OCI| | | |Government bonds and securities (quoted)|26,128|25,667| |Corporate bonds (quoted)|3,110|1,242| |Investments carried at amortised cost| | | |Certificate of deposits (quoted)|2,955|99| |Commercial papers (quoted)|2,398|381| |Treasury bills (quoted)|-|989| | |35,738|29,262| Government bonds and securities includes bonds pledged with bank for credit facility and with manager to the buy-back amounting to `1,650 crore and `3,560 crore as at March 31, 2023 and 2022, respectively. # Aggregate value of quoted and unquoted investments |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Aggregate value of quoted investments|35,738|29,262| |Aggregate value of unquoted investments (net of impairment)|2,405|2,405| |Aggregate market value of quoted investments|35,736|29,263| |Aggregate value of impairment of investments|19|19| # Market value of quoted investments carried at amortised cost |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Certificate of deposits|2,951|99| |Commercial papers|2,400|381| |Treasury bills|-|990| # Notes forming part of Standalone Financial Statements # Carrying value of investment in equity instruments is as follows: |In Numbers|Currency|Face value per share|Investment in subsidiaries|As at March 31, 2023|As at March 31, 2022| |---|---|---|---|---|---| |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| |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| |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|-|-| |2,405|2,405|2,405|2,405|2,405|2,405| # Equity instruments designated at fair value through OCI |In Numbers|Currency|Face value per share|Equity instruments designated at fair value through OCI|As at March 31, 2023|As at March 31, 2022| |---|---|---|---|---|---| |1,90,00,000|INR|10|Taj Air Limited|19|19| |Less : Impairment in value of investments|Less : Impairment in value of investments|Less : Impairment in value of investments|Less : Impairment in value of investments|(19)|(19)| |-|-|-|-|-|-| *Represents value less than `0.50 crore. |
# 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, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|580|916| |Net loss arising on revaluation of investments other than equities carried at fair value through other comprehensive income|(675)|(516)| |Deferred tax relating to net loss arising on revaluation of investments other than equities carried at fair value through other comprehensive income|236|180| |Net cumulative gain reclassified to statement of profit and loss on sale of investments other than equities carried at fair value through other comprehensive income|(4)|-| |Deferred tax relating to net cumulative gain reclassified to statement of profit and loss on sale of investments other than equities carried at fair value through other comprehensive income|1|-| |Balance at the end of the year|138|580| # (b) Trade receivables - Billed Trade receivables- Billed (unsecured) consist of the following: # Trade receivables - Billed - Non-current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Trade receivables- Billed|771|932| |Less: Allowance for doubtful trade receivables- Billed|(646)|(842)| |Considered good|125|90| # Ageing for trade receivables- billed - non-current outstanding as at March 31, 2023 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|39|75|613|739| |Disputed trade receivables - considered good|-|-|-|-|8|24|32| | |-|-|12|39|83|637|771| |Less: Allowance for doubtful trade receivables - Billed| | | | | | |(646)| | | | | | | | |125| Trade receivables - Unbilled 196 321 # Notes forming part of Standalone Financial Statements # Ageing for trade receivables- billed - 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| | |Disputed trade receivables - considered good|-|-|-|-|-|16|16| | | |-|-|12|93|227|600|932| Less: Allowance for doubtful trade receivables - Billed (842) Trade receivables - Unbilled 90 Trade receivables - Unbilled 53 Trade receivables - Billed 143 # Trade receivables - Billed - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Trade receivables- Billed|35,731|30,010| |Less: Allowance for doubtful trade receivables- Billed|(275)|(173)| |Considered good|35,456|29,837| |Trade receivables- Billed|256|137| |Less: Allowance for doubtful trade receivables- Billed|(178)|(122)| |Credit impaired|78|15| | |35,534|29,852| Above balances of trade receivables- billed include balances with related parties (Refer note 20). # Ageing for trade receivables- billed - current outstanding as at March 31, 2023 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|28,935|5,292|1,124|135|16|191|35,693| | |Undisputed trade receivables - credit impaired|66|42|-|11|18|119|256| | |Disputed trade receivables - considered good|-|-|12|1|-|25|38| | | |29,001|5,334|1,136|147|34|335|35,987| Less: Allowance for doubtful trade receivables - Billed (453) Trade receivables - Unbilled 35,534 Trade receivables - Unbilled 7,264 Trade receivables - Unbilled 42,798 # Notes forming part of Standalone Financial Statements # Ageing for trade receivables- billed 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|23,985|4,069|903|594|224|211|29,986| |Undisputed trade receivables - considered good|-|-|-|57|6|67|130| |Disputed trade receivables - considered good|-|-|-|-|-|24|24| |Disputed trade receivables - credit impaired|-|-|-|-|-|7|7| | |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 # Cash and cash equivalents Cash and cash equivalents consist of the following: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Balances with banks| | | |In current accounts|776|809| |In deposit accounts|686|7,388| |Cheques on hand|-*|-*| |Cash on hand|-*|-*| |Remittances in transit|-*|-*| | |1,462|8,197| *Represents value less than `0.50 crore. |
# Other balances with banks Other balances with banks consist of the following: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Earmarked balances with banks|653|195| |Short-term bank deposits|2,428|5,300| | |3,081|5,495| Earmarked balances with banks primarily relate to margin money for purchase of investments, margin money of derivative contracts and unclaimed dividends. # Notes forming part of Standalone Financial Statements # (e) Loans Loans (unsecured) consist of the following: # Loans - Non-current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Considered good|3|8| # Loans - Current |(` crore)|As at March 31, 2023|As at March 31, 2022| | |---|---|---|---| |Considered good|Inter-corporate deposits|-|5,386| |Loans and advances to employees| |332|267| |Credit impaired|Loans and advances to employees|31|22| |Less: Allowance on loans and advances to employees| |(31)|(22)| | | |332|5,653| Inter-corporate deposits yield fixed interest rate and are placed with financial institutions, who are authorized to accept and use such inter-corporate deposits as per regulations applicable to them. # (f) Other financial assets Other financial assets consist of the following: # Other financial assets - Non-current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Security deposits|508|613| |Others|24|13| | |532|626| # Other financial assets - Current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Security deposits|296|161| |Fair value of foreign exchange derivative assets|190|388| |Interest receivable|624|597| |Others|447|286| | |1,557|1,432| # Notes forming part of Standalone Financial Statements # (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, 2023 and March 31, 2022 is as under: | |As at March 31, 2023|As at March 31, 2022| | | |---|---|---|---|---| |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| | |32|33| |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. # (h) Trade Payables Ageing for trade payables outstanding as at March 31, 2023 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 Others|3,774|4,715|18|7|42|8,556| |Disputed dues- Others|-|-|-|-|29|29| | |3,774|4,715|18|7|71|8,585| Accrued expenses 5,183 Total 13,768 *MSME as per the Micro, Small and Medium Enterprises Development Act, 2006. 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 Others|2,673|2,541|46|27|80|5,367| |Disputed dues- Others|-|-|-|-|32|32| | |2,673|2,541|46|27|112|5,399| Accrued expenses 4,683 Total 10,082 # Notes forming part of Standalone Financial Statements # (i) Other financial liabilities Other financial liabilities consist of the following: # Other financial liabilities - Non-current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Capital creditors|111|289| |Others|229|229| |Total|340|518| Others include advance taxes paid of `226 crore and `226 crore as at March 31, 2023 and 2022, respectively, by the seller of TCS e-Serve Limited (merged with the Company) which, on refund by tax authorities is payable to the seller. |
# Other financial liabilities - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Accrued payroll|4,970|3,914| |Unclaimed dividends|51|46| |Fair value of foreign exchange derivative liabilities|141|128| |Capital creditors|635|723| |Liabilities towards customer contracts|1,075|972| |Others|76|43| |Total|6,948|5,826| # (j) Financial instruments by category The carrying value of financial instruments by categories as at March 31, 2023 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|-|-|-|-|1,462|1,462| |Bank deposits|-|-|-|-|2,428|2,428| |Earmarked balances with banks|-|-|-|-|653|653| |Investments (other than in subsidiary)|1,147|29,238|-|-|5,353|35,738| |Trade receivables|Billed|-|-|-|35,659|35,659| |Unbilled|-|-|-|-|7,460|7,460| |Loans|-|-|-|-|335|335| |Other financial assets|-|-|37|153|1,899|2,089| |Total Financial Assets|1,147|29,238|37|153|55,249|85,824| | |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 liabilities|-|-|-|-|13,768|13,768| |Lease liabilities|-|-|-|-|5,659|5,659| |Other financial liabilities|-|-|-|141|7,147|7,288| |Total Financial Liabilities|-|-|-|141|26,574|26,715| # Notes forming part of Standalone Financial Statements 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|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. Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at March 31, 2023 and 2022, 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 `5,351 crore and `1,470 crore as at March 31, 2023 and 2022, respectively. # (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. File: AR_TCS_2022_2023.md - 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. # Notes forming part of Standalone Financial Statements The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required): |As at March 31, 2023| | | | | | |---|---|---|---|---|---| | |Level 1|Level 2|Level 3| |Total| |Financial assets|Mutual fund units|1,147|-|-|1,147| | |Equity shares|-|-|-|-| | |Government bonds and securities|26,128|-|-|26,128| | |Corporate bonds|3,110|-|-|3,110| | |Certificate of deposits|2,951|-|-|2,951| | |Commercial papers|2,400|-|-|2,400| | |Treasury bills|-|-|-|-| | |Fair value of foreign exchange derivative assets|-|190|-|190| | |Total|Total|Total|Total|35,926| | | | |As at March 31, 2022|As at March 31, 2022|As at March 31, 2022|As at March 31, 2022|As at March 31, 2022| | | | | | |---|---|---|---|---|---| | |Level 1|Level 2|Level 3|Total| | |Financial assets|Mutual fund units|884|-|-|884| | |Equity shares|-|-|-|-| | |Government bonds and securities|25,667|-|-|25,667| | |Corporate bonds|1,242|-|-|1,242| | |Certificate of deposits|99|-|-|99| | |Commercial papers|381|-|-|381| | |Treasury bills|990|-|-|990| | |Fair value of foreign exchange derivative assets|-|388|-|388| | | | | |Total|29,651| # (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. # Notes forming part of Standalone Financial Statements The following are outstanding currency options contracts, which have been designated as cash flow hedges: |Foreign currency|As at March 31, 2023|As at March 31, 2023|As at March 31, 2023|As at March 31, 2022|As at March 31, 2022|As at March 31, 2022| |---|---|---| | |No. of contracts|Notional amount of contracts (` crore)|Fair value (` crore)|No. of contracts|Notional amount of contracts (` crore)|Fair value (` crore)| |US Dollar|8|225|13|63|1,635|44| |Great Britain Pound|22|200|14|41|338|55| |Euro|22|203|10|53|382|25| |Australian Dollar|-|-|-|30|202|(21)| |Canadian Dollar|-|-|-|25|137|(1)| The movement in cash flow hedging reserve for derivatives designated as cash flow hedges is as follows: | |Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2022|Year ended March 31, 2022| |---|---|---| | |Intrinsic value (` crore)|Time value (` crore)|Intrinsic value (` crore)|Time value (` crore)| |Balance at the beginning of the year|27|(53)|56|(27)| |(Gain) / loss transferred to profit or loss on occurrence of forecasted hedge transactions|(376)|488|(636)|525| |Deferred tax on (gain) / loss transferred to profit or loss on occurrence of forecasted hedge transactions|90|(144)|139|(122)| |Change in the fair value of effective portion of cash flow hedges|351|(456)|599|(559)| |Deferred tax on change in the fair value of effective portion of cash flow hedges|(84)|137|(131)|130| |Balance at the end of the year|8|(28)|27|(53)| 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, 2023 and 2022, the notional amount of outstanding contracts aggregated to `46,102 crore and `46,392 crore, respectively, and the respective fair value of these contracts have a net gain of `12 crore and `158 crore. Exchange loss of `1,159 crore and gain of `645 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, 2023 and 2022, respectively. Net foreign exchange gain / (loss) include loss of `112 crore and gain of `111 crore transferred from cash flow hedging reserve for the years ended March 31, 2023 and 2022, respectively. Net loss on derivative instruments of `20 crore recognised in cash flow hedging reserve as at March 31, 2023, is expected to be transferred to the statement of profit and loss by March 31, 2024. The maximum period over which the exposure to cash flow variability has been hedged is through calendar year 2023. 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, 2023 (` crore)|As at March 31, 2022 (` crore)| |---|---|---| |10% Appreciation of the underlying foreign currencies|-|(387)| |10% Depreciation of the underlying foreign currencies|544|2,034| # Notes forming part of Standalone Financial Statements # (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 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). # The following table sets forth information relating to unhedged foreign currency exposure as at March 31, 2023: | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|2,747|91|436|2,736| |Net financial liabilities|(12,419)|(723)|(1,923)|(1,108)| 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 `1,016 crore for the year ended March 31, 2023. # The following table sets forth information relating to 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. # Notes forming part of Standalone Financial Statements # * 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 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. Bank deposits include an amount of `2,428 crore held with three 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, 2023. 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 `90,655 crore and `90,388 crore as at March 31, 2023 and 2022, 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. 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, 2023 and March 31, 2022. # * 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, 2023|As at March 31, 2023|As at March 31, 2022|As at March 31, 2022| |---|---|---| | |Gross%|Net%|Gross%|Net%| |United States of America|54.14|55.13|52.43|53.78| |India|12.03|10.37|12.73|10.68| |United Kingdom|15.48|15.80|16.47|16.84| 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, 2023 and 2022 was `98 crore and `96 crore, respectively. |
The reconciliation of allowance for doubtful trade receivables is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|1,137|1,082| |Change during the year|98|96| |Bad debts written off|(137)|(39)| |Translation Exchange difference|1|(2)| |Balance at the end of the year|1,099|1,137| # Notes forming part of Standalone Financial Statements # 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. # Details regarding the contractual maturities of significant financial liabilities as at: # March 31, 2023 | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|13,768|-|-|-|13,768| |Lease liabilities|1,333|1,129|2,430|2,531|7,423| |Other financial liabilities|6,828|42|301|9|7,180| | |21,929|1,171|2,731|2,540|28,371| |Derivative financial liabilities|141|-|-|-|141| | |22,070|1,171|2,731|2,540|28,512| # March 31, 2022 | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|10,082|-|-|-|10,082| |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| # (n) Equity instruments The authorised, issued, subscribed and fully paid up share capital consist of the following: # As at March 31, 2023 # As at March 31, 2022 | |March 31, 2023|March 31, 2022| |---|---|---| |Authorised|460|460| |460,05,00,000 equity shares of `1 each| | | |105,02,50,000 preference shares of `1 each|105|105| | |565|565| |Issued, Subscribed and Fully paid up|366|366| |365,90,51,373 equity shares of `1 each| | | 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. # Notes forming part of Standalone Financial Statements 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 in the previous year. The equity shares bought back were extinguished on March 29, 2022. # I. Reconciliation of number of shares | | |As at March 31, 2023| |As at March 31, 2022| | | |---|---|---|---|---|---|---| | |Number of shares|Amount (` crore)|Number of shares|Amount (` crore)| | | |Equity shares|Opening balance|365,90,51,373|366|369,90,51,373| |370| |Shares extinguished on buy-back|-|-| |(4,00,00,000)| |(4)| |Closing balance|365,90,51,373| |366|365,90,51,373|366| | # 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, 2023| |As at March 31, 2022| | |---|---|---|---|---|---| |Equity shares|Holding company|264,43,17,117 equity shares (March 31, 2022: 264,43,17,117 equity shares)|264|264| | |Subsidiaries and Associates of Holding company|7220 equity shares (March 31, 2022: 7,220 equity shares) are held by Tata Industries Limited*|-|-| | | | |10,14,172 equity shares (March 31, 2022: 10,14,172 equity shares) are held by Tata Investment Corporation Limited*|-|-| | | | |46,798 equity shares (March 31, 2022: 46,798 equity shares) are held by Tata Steel Limited*|-|-| | | | |766 equity shares (March 31, 2022: 766 equity shares) are held by The Tata Power Company Limited*|-|-| | | | | |264|264| | | *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, 2023| |As at March 31, 2022| |---|---|---|---| |Equity shares|Tata Sons Private Limited, the holding company|264,43,17,117|264,43,17,117| | |% of shareholding|72.27%|72.27%| # Notes forming part of Standalone Financial Statements # V. |
Equity shares movement during the 5 years preceding March 31, 2023 - 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. 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. # VI. Disclosure of Shareholding of Promoters Disclosure of shareholding of promoters as at March 31, 2023 is as follows: |Promoter name|Shares held by promoters|% Change during the year| |---|---|---| |Tata Sons Private Limited|<br/>No. of shares|% of total shares| |264,43,17,117|72.27%| |264,43,17,117|72.27%| - Total |No. of shares|% of total shares| |---|---| |264,43,17,117|72.27%| |264,43,17,117|72.27%| - Disclosure of shareholding of promoters as at March 31, 2022 is as follows: |Promoter name|Shares held by promoters|% Change during the year| |---|---|---| |Tata Sons Private Limited|<br/>No. of shares|% of total shares| |264,43,17,117|72.27%| |266,91,25,829|72.16%| 0.11% Total |No. of shares|% of total shares| |---|---| |264,43,17,117|72.27%| |266,91,25,829|72.16%| 0.11% # 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. # Notes forming part of Standalone Financial Statements 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. The lease 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, 2023|Net carrying amount as at March 31, 2023| |---|---|---| |Leasehold land|179|940| |Buildings|799|4,608| |Leasehold improvement|-|2| |Computer equipment|-|49| |Software licences|-|96| |Vehicles|-|-*| |Total|978|5,695| *Represents value less than `0.50 crore. # Notes forming part of Standalone Financial Statements | |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|1,027|5,837| *Represents value less than `0.50 crore. # Depreciation on right-of-use assets is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Leasehold land|10|9| |Buildings|1,034|991| |Leasehold improvement|2|3| |Computer equipment|16|15| |Software licences|37|38| |Vehicles|-*|1| |Total|1,099|1,057| *Represents value less than `0.50 crore. Interest on lease liabilities is `421 crore and `451 crore for the years ended March 31, 2023 and 2022, respectively. The Company incurred `211 crore and `162 crore for the years ended March 31, 2023 and 2022, respectively, towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is `1,732 crore and `1,561 crore for the years ended March 31, 2023 and 2022, 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 `786 crore and `722 crore as at March 31, 2023 and 2022, respectively. Lease contracts entered by the Company majorly pertain 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. File: AR_TCS_2022_2023.md 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. # Notes forming part of Standalone Financial Statements |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| Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use. 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. # Notes forming part of Standalone Financial Statements # Property, plant and equipment consist of the following: |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and machinery|Computer equipment|Vehicles|Office installations|Electrical fixtures|Furniture|Total| |---|---|---|---|---|---|---|---|---|---|---| |Cost as at April 1, 2022|323|7,737|1,885|752|9,925|35|2,395|1,872|1,512|26,436| |Additions|-|234|48|56|1,291|8|151|63|53|1,904| |Disposals|-|(5)|(8)|-|(269)|(3)|(54)|(9)|(12)|(360)| |Cost as at March 31, 2023|323|7,966|1,925|808|10,947|40|2,492|1,926|1,553|27,980| |Accumulated depreciation as at April 1, 2022|-|(3,286)|(1,221)|(366)|(7,061)|(33)|(2,085)|(1,367)|(1,348)|(16,767)| |Depreciation|-|(393)|(127)|(78)|(1,386)|(4)|(186)|(130)|(81)|(2,385)| |Disposals|-|4|8|-|268|3|54|9|12|358| |Accumulated depreciation as at March 31, 2023|-|(3,675)|(1,340)|(444)|(8,179)|(34)|(2,217)|(1,488)|(1,417)|(18,794)| |Net carrying amount as at March 31, 2023|323|4,291|585|364|2,768|6|275|438|136|9,186| |Capital work-in-progress*|1,103|1,103|1,103|1,103|1,103|1,103|1,103|1,103|1,103|1,103| |Total|10,289|10,289|10,289|10,289|10,289|10,289|10,289|10,289|10,289|10,289| *`1,904 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2023. # Previous Year Data |(` crore)|Freehold land|Buildings|Leasehold improvements|Plant and machinery|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. # 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, 2023 is as follows: |Capital work-in-progress|Amount in Capital work-in-progress for a period of|Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years|Total| |---|---|---|---|---|---|---| |Projects in progress|543|203|37|320|1,103| | 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|Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years|Total| |---|---|---|---|---|---|---| |Projects in progress|639|97|37|373|1,146| | * 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| |---|---| |Cost as at April 1, 2022|1,530| |Additions|247| |Disposals / Derecognised|(50)| |Cost as at March 31, 2023|1,727| |Accumulated amortisation as at April 1, 2022|(512)| |Amortisation|(456)| |Disposals / Derecognised|50| |Accumulated amortisation as at March 31, 2023|(918)| |Net carrying amount as at March 31, 2023|809| # Notes forming part of Standalone Financial Statements |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, 2022|(512)| |Net carrying amount as at March 31, 2022|1,018| The estimated amortisation for years subsequent to March 31, 2023 is as follows: |Year ending March 31,|Amortisation expense| |---|---| |2024|434| |2025|259| |2026|76| |2027|40| | |809| # (c) Other assets Other assets consist of the following: # Other assets - Non-current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Considered good| | | |Capital advances|67|75| |Advances to related parties|63|23| |Contract assets|153|136| |Prepaid expenses|1,907|1,197| |Contract fulfillment costs|33|81| |Others|187|285| | |2,410|1,797| Advances to related parties, considered good, comprise: |Entity|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Voltas Limited|-*|-*| |Tata Realty and Infrastructure Ltd|-*|-*| |Tata Projects Limited|54|23| |Titan Engineering and Automation Limited|-|-*| |Saankhya Labs Private Limited|8|-| |Universal MEP Projects & Engineering Services Limited|1|-| *Represents value less than `0.50 crore. # Notes forming part of Standalone Financial Statements # Other assets - Current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Considered good| | | |Advance to suppliers|48|117| |Advance to related parties|18|8| |Contract assets|4,678|3,334| |Prepaid expenses|1,332|2,735| |Prepaid rent|4|7| |Contract fulfillment costs|531|616| |Indirect taxes recoverable|853|1,001| |Others|325|214| |Considered doubtful| | | |Advance to suppliers|2|2| |Other advances|2|2| |Less: Allowance on doubtful assets|(4)|(4)| |Total|7,789|8,032| Advance to related parties, considered good comprise: |Entity|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Tata Sons Private Limited|7|7| |Tata AIG General Insurance Company Limited|1|1| |Tata Consultancy Services Deutschland GmbH|7|-| |Tata Consultancy Services De Mexico S.A.,De C.V.|2|-| |Titan Company Limited|1|-| Non-current - Others includes advance of `177 crore and `271 crore towards acquiring right-of-use of leasehold land as at March 31, 2023 and 2022, respectively. Contract fulfillment costs of `631 crore and `564 crore for the years ended March 31, 2023 and 2022, respectively, have been amortised in the standalone statement of profit and loss. Refer note 10 for the changes in contract asset. # (d) 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 Company includes direct material and labour cost and a proportion of manufacturing overheads. |
Inventories consist of the following: |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Raw materials, sub-assemblies and components|22|16| |Finished goods and work-in-progress|5|3| |Total|27|19| # Notes forming part of Standalone Financial Statements # (e) Other liabilities Other liabilities consist of the following: # Other liabilities - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Advance received from customers|457|473| |Indirect taxes payable and other statutory liabilities|2,429|2,271| |Tax liability on buy-back of equity shares|-|4,192| |Others|227|97| |Total|3,113|7,033| # (f) Provisions Provisions consist of the following: # Provisions - Current | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Provision towards legal claim (Refer note 19)|206|1,249| |Provision for foreseeable loss|70|125| |Other provisions|3|3| |Total|279|1,377| # 9) Other equity Other equity consist of the following: | |As at March 31, 2023|As at March 31, 2022| | |---|---|---|---| |Capital reserve*|-|-| | |Capital redemption reserve|Opening balance|17|13| | |Transfer from retained earnings|-|4| | |Total|17|17| |Special Economic Zone re-investment reserve|Opening balance|7,287|2,538| | |Transfer from retained earnings|8,380|9,407| | |Transfer to retained earnings|(3,858)|(4,658)| | |Total|11,809|7,287| |Retained earnings|Opening balance|68,949|70,928| | |Profit for the year|39,106|38,187| | |Remeasurement of defined employee benefit plans|42|141| | |Expenses for buy-back of equity shares|-|(49)| | |Tax on buy-back of equity shares|-|(4,192)| | |Buy-back of equity shares|-|(17,996)| | |Transfer from Special Economic Zone re-investment reserve|3,858|4,658| | |Total|1,11,955|91,677| # Notes forming part of Standalone Financial Statements |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Less: Appropriations| | | |Dividend on equity shares|41,347|13,317| |Transfer to capital redemption reserve|-|4| |Transfer to Special Economic Zone re-investment reserve|8,380|9,407| | |62,228|68,949| |Investment revaluation reserve| | | |Opening balance|580|916| |Change during the year (net)|(442)|(336)| | |138|580| |Cash flow hedging reserve (Refer note 6(l))| | | |Opening balance|(26)|29| |Change during the year (net)|6|(55)| | |(20)|(26)| | |74,172|76,807| *Represents value less than `0.50 crore. # 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 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. # Notes forming part of Standalone Financial Statements 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. 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 nature of services is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Consultancy services|1,88,748|1,59,106| |Sale of equipment and software licences|1,606|1,235| |Total|1,90,354|1,60,341| # Notes forming part of Standalone Financial Statements # Revenue disaggregation by industry vertical is as follows: |(` crore)|Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Banking, Financial Services and Insurance|68,240|58,614| |Manufacturing|16,905|14,576| |Retail and Consumer Business|33,169|26,966| |Communication, Media and Technology|33,606|28,778| |Life Sciences and Healthcare|22,398|18,341| |Others|16,036|13,066| |Total|1,90,354|1,60,341| # Revenue disaggregation by geography is as follows: |(` crore)|Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Americas| | | |North America|1,13,208|90,630| |Latin America|382|314| |Europe| | | |United Kingdom|30,676|27,595| |Continental Europe|19,209|17,595| |Asia Pacific|12,017|11,178| |India|10,941|9,547| |Middle East and Africa|3,921|3,482| |Total|1,90,354|1,60,341| Geographical revenue is allocated based on the location of the customers. # Information about major customers No single customer represents 10% or more of the Company's total revenue during the years ended March 31, 2023 and March 31, 2022. |
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 `1,13,145 crore out of which 55.41% 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. # Notes forming part of Standalone Financial Statements # Changes in contract assets are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|3,470|3,051| |Invoices raised that were included in the contract assets balance at the beginning of the year|(2,632)|(2,464)| |Increase due to revenue recognised during the year, excluding amounts billed during the year|3,826|2,828| |Translation exchange difference|167|55| |Balance at the end of the year|4,831|3,470| # Changes in unearned and deferred revenue are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Balance at the beginning of the year|3,573|3,161| |Revenue recognised that was included in the contract liability balance at the beginning of the year|(2,643)|(2,311)| |Increase due to invoicing during the year, excluding amounts recognised as revenue during the year|2,589|2,735| |Translation exchange difference|85|(12)| |Balance at the end of the year|3,604|3,573| # Reconciliation of revenue recognised with the contracted price is as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Contracted price|1,93,451|1,62,898| |Reductions towards variable consideration components|(3,097)|(2,557)| |Revenue recognised|1,90,354|1,60,341| # 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, 2023|Year ended March 31, 2022| |---|---|---| |Interest income|3,046|2,555| |Dividend income|2,106|3,548| |Net gain on disposal / fair valuation of investments carried at fair value through profit or loss|205|186| |Net gain on sale of investments other than equity shares carried at fair value through OCI|4|-| |Net gain on disposal of property, plant and equipment|27|25| |Net gain / (loss) on lease modification|(3)|2| # Notes forming part of Standalone Financial Statements |(` crore)|Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Net gain on sub-lease|7|-| |Net foreign exchange gain / (loss)|(173)|1,068| |Rent income|22|21| |Other income|87|81| |Total|5,328|7,486| # Interest income comprise: |Interest on bank balances and bank deposits|173|256| |---|---|---| |Interest on financial assets carried at amortised cost|574|481| |Interest on financial assets carried at fair value through OCI|2,131|1,818| |Other interest (including interest on tax refunds)|168|-| # Dividend income comprise: Dividend from subsidiaries 2,106 3,548 # 12) 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 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 using the Projected Unit Credit Method. # Notes forming part of Standalone Financial Statements # Employee benefit expenses consist of the following: |(` crore)|Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Salaries, incentives and allowances|87,049|73,115| |Contributions to provident and other funds|6,450|5,734| |Staff welfare expenses|2,719|2,248| |Total|96,218|81,097| # Employee benefit obligations consist of the following: # Employee benefit obligations - Non-current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Foreign defined benefit plans|28|25| |Other employee benefit obligations|67|78| |Total|95|103| # Employee benefit obligations - Current |(` crore)|As at March 31, 2023|As at March 31, 2022| |---|---|---| |Compensated absences|2,991|2,802| |Other employee benefit obligations|31|42| |Total|3,022|2,844| # Employee benefit plans consist of the following: # 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. |
# 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, 2023| | | | | |As at March 31, 2022| | | |---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans|Foreign plans| | | |Total|Domestic plans|Foreign plans|Foreign plans|Total| | |Benefit obligations, beginning of the year|4,464| |1| |25|4,490|4,313|1| |19|4,333| |Translation exchange difference| |-|-| |2|2|-|-| |1|1| |Changes due to inter-company transfers|(3)|-|-|(3)|(3)|-|-|(3)| | | | |Service cost|512| |-|5| |517|536|-|5| |541| |Interest cost|330| |-| |1|331|296|-|-|296| | |Remeasurement of the net defined benefit liability|(158)| |-|1| |(157)|(190)|-|5| |(185)| |Benefits paid|(502)| |-| |(6)|(508)|(488)|-| |(5)|(493)| |Benefit obligations, end of the year|4,643| |1| |28|4,672|4,464|1| |25|4,490| |Change in plan assets| | |As at March 31, 2023| | | | | |As at March 31, 2022| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans|Foreign plans| | | |Total|Domestic plans|Foreign plans|Foreign plans|Total| | | |Fair value of plan assets, beginning of the year|5,517|1| | |-|5,518|4,704|1|-| | |4,705| |Changes due to inter-company transfers|(3)|-|-|(3)|(3)|-|-|(3)| | | | | |Interest income|424| |-|-|424| |334|-|-|334| | | |Employers' contributions|1,056| |-|-|1,056| |975|-|-|975| | | File: AR_TCS_2022_2023.md |Benefits paid|(502)| |-|-|(502)| |(488)|-|-|(488)| | | |Remeasurement- return on plan assets excluding amount included in interest income|(103)|-|-|(103)| | |(5)|-|-|(5)| | | |Fair value of plan assets, end of the year|6,389| |1| |-|6,390|5,517|1|-| | |5,518| |Funded status| | |As at March 31, 2023| | | |As at March 31, 2022| | | | |---|---|---|---|---|---|---|---|---|---|---| |Domestic plans|Foreign plans|Foreign plans| | |Total|Domestic plans|Foreign plans|Foreign plans|Total| | |Deficit of plan assets over obligations| |-|-|(28)|(28)|-|-| |(25)|(25)| |Surplus of plan assets over obligations|1,746| |-|-|1,746|1,053|-|-|1,053| | | |1,746| |-|(28)|1,718|1,053|-| |(25)|1,028| # Notes forming part of Standalone Financial Statements |Category of assets| | |As at March 31, 2023| | | | |As at March 31, 2022| | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans| | | | | | |Foreign plans|Foreign plans| |Total|Domestic plans|Foreign plans|Foreign plans|Total| |Corporate bonds|1,832| |-|-|1,832| |1,696|-|-|1,696| | | | | |Equity instruments|121| |-|-|121| |66|-|-|66| | | | | |Government bonds and securities|2,917| |-|-|2,917| |2,624|-|-|2,624| | | | | |Insurer managed funds|1,387|1| | |-|1,388|981|1|-| |982| | | | |Bank balances|6| |-|-|6| |5|-|-|5| | | | | |Others|126| |-|-|126| |145|-|-|145| | | | | |Total| | | | | |6,390| | | | |5,518| | | | # Net periodic gratuity cost, included in employee cost consists of the following components: |Components| | |As at March 31, 2023| | | | |As at March 31, 2022| | | | | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |Domestic plans| | | | | | |Foreign plans|Foreign plans| |Total|Domestic plans|Foreign plans|Foreign plans|Total| |Service cost|512| |-|5| |517|536|-|5| |541| | | | |Net interest on net defined benefit asset|(94)| |-| |1|(93)|(38)|-|-|(38)| | | | | |Net periodic gratuity / pension cost|418| |-| |6|424|498|-| |5|503| | | | |Actual return on plan assets|321| |-|-|321| |329|-|-|329| | | | | # Remeasurement of the net defined benefit (asset) / liability: |As at March 31, 2023|Domestic plans|Foreign plans|Foreign plans|Total| |---|---|---|---|---| |Actuarial losses arising from changes in demographic assumptions|30|-|1|31| |Actuarial gains arising from changes in financial assumptions|(164)|-|(3)|(167)| |Actuarial (gains) and losses arising from changes in experience adjustments|(24)|-|3|(21)| |Remeasurement of the net defined benefit liability|(158)|-|1|(157)| |Remeasurement- return on plan assets excluding amount included in interest income|103|-|-|103| |Total|(55)|-|1|(54)| # Notes forming part of Standalone Financial Statements | |Domestic plans|Foreign plans|Foreign plans|Total| |---|---|---|---|---| |Actuarial (gains) and losses arising from changes in demographic assumptions|(20)|-|2|(18)| |Actuarial gains arising from changes in financial assumptions|(165)|-|(1)|(166)| |Actuarial (gains) and losses arising from changes in experience adjustments|(5)|-|4|(1)| |Remeasurement of the net defined benefit liability|(190)|-|5|(185)| |Remeasurement- return on plan assets excluding amount included in interest income|5|-|-|5| | |(185)|-|5|(180)| The assumptions used in accounting for the defined benefit plan are set out below: | |As at March 31, 2023|Foreign plans|Domestic plans|Foreign plans| |---|---|---|---|---| |Discount rate|7.50%|3.90%-4.80%|7.00%|1.50%-2.70%| |Rate of increase in compensation levels of covered employees|6.00%|1.95%-3.62%|6.00%|2.24%-3.80%| |Rate of return on plan assets|7.50%|3.90%-4.80%|7.00%|1.50%-2.70%| |Weighted average duration of defined benefit obligations|7 Years|3-8 Years|8 years|3-6.4 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, 2023. The Company does not expect to contribute to defined benefit plan obligations funds for year ending March 31, 2024 in view of adequate surplus plan assets as at March 31, 2023. 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, 2023|As at March 31, 2022| |---|---|---| |Increase of 0.50%|(121)|(159)| |Decrease of 0.50%|127|170| If the expected salary growth increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Increase of 0.50%|129|171| |Decrease of 0.50%|(123)|(161)| # 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, 2023 as follows: |Year ending March 31,|Defined benefit obligations| |---|---| |2024|636| |2025|556| |2026|534| |2027|523| |2028|508| |2029-2033|2,106| # Provident fund 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, 2023|As at March 31, 2022| |---|---|---| |Fair value of plan assets|25,511|22,814| |Present value of defined benefit obligations|(25,511)|(22,814)| |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 obligation of interest guarantee under the deterministic approach are as follows: | |As at March 31, 2023|As at March 31, 2022| |---|---|---| |Discount rate|7.50%|7.00%| |Average remaining tenure of investment portfolio|7 Years|8 years| |Guaranteed rate of return|8.15%|8.10%| The Company expensed `1,614 crore and `1,372 crore for the years ended March 31, 2023 and 2022, respectively, towards provident fund. # Notes forming part of Standalone Financial Statements # 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 `278 crore and `271 crore for the years ended March 31, 2023 and 2022, respectively, towards Employees' Superannuation Fund. # Foreign defined contribution plan The Company expensed `1,070 crore and `885 crore for the years ended March 31, 2023 and 2022, 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, 2023|Year ended March 31, 2022| |---|---|---| |Raw materials, sub-assemblies and components consumed|37|29| |Equipment and software licences purchased|1,381|984| | |1,418|1,013| |Finished goods and work-in-progress| | | |Opening stock|3|-*| |Less: Closing stock|5|3| | |(2)|(3)| | |1,416|1,010| *Represents value less than `0.50 crore. # (b) Other expenses Other expenses consist of the following: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Fees to external consultants|25,539|19,338| |Facility expenses|2,178|1,707| |Travel expenses|2,100|1,361| |Communication expenses|1,588|1,303| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|110|107| |Other expenses|10,208|8,173| | |41,723|31,989| Other expenses include `4,777 crore and `3,733 crore for the years ended March 31, 2023 and 2022, respectively, towards sales, marketing and advertisement expenses and `2,544 crore and `1,708 crore for the years ended March 31, 2023 and 2022, respectively, towards project expenses. # Notes forming part of Standalone Financial Statements # (c) Corporate Social Responsibility (CSR) expenditure | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |1 Amount required to be spent by the company during the year|773|716| |2 Amount of expenditure incurred on:| | | |(i) Construction/acquisition of any asset|-|-| |(ii) On purposes other than (i) above|783|727| |3 Shortfall at the end of the year|-|-| |4 Total of previous years shortfall|-|-| |5 Reason for shortfall|NA|NA| |6 Nature of CSR activities|Disaster Relief, Education, Skilling, Employment, Entrepreneurship, Health, Wellness and Water, Sanitation and Hygiene, Heritage|Disaster Relief, Education, Skilling, Employment, Entrepreneurship, Health, Wellness and Water, Sanitation and Hygiene, Heritage| |7 Details of related party transactions in relation to CSR expenditure as per relevant Accounting Standard:| | | |Contribution to TCS Foundation in relation to CSR expenditure|543|680| # 14) Finance costs Finance costs consist of the following: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Interest on lease liabilities|421|451| |Interest on tax matters|49|7| |Other interest costs|225|28| |Total|695|486| # 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 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. # Notes forming part of Standalone Financial Statements 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. 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, 2023|Year ended March 31, 2022| |---|---|---| |Current tax| | | |Current tax expense for current year|13,623|12,912| |Current tax benefit pertaining to prior years|(677)|(981)| | |12,946|11,931| |Deferred tax| | | |Deferred tax benefit for current year|(362)|(395)| |Deferred tax benefit pertaining to prior years|-|-| | |(362)|(395)| | |12,584|11,536| # 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, 2023|Year ended March 31, 2022| |---|---|---| |Profit before taxes|51,690|49,723| |Indian statutory income tax rate|34.94%|34.94%| |Expected income tax expense|18,063|17,375| |Tax effect of adjustments to reconcile expected income tax expense to reported income tax expense| | | |Tax holidays|(5,097)|(4,604)| |Income exempt from tax|(736)|(1,240)| |Undistributed earnings in branches|58|(232)| |Tax on income at different rates|963|1,107| |Tax pertaining to prior years|(677)|(981)| |Others (net)|10|111| |Total income tax expense|12,584|11,536| # Notes forming part of Standalone Financial Statements 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 export of services for the first five years, 50% of such profit 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 fulfillment of certain conditions. From April 1, 2011 profits from units set up under SEZ scheme are subject to Minimum Alternate Tax (MAT). |
# Significant components of net deferred tax assets and liabilities for the year ended March 31, 2023 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|374|223|-|-|597| |Provision for employee benefit obligations|733|53|-|-|786| |Cash flow hedges|8|-|(1)|-|7| |Receivables, financial assets at amortised cost|372|31|-|-|403| |MAT credit entitlement|974|-|-|(974)|-| |Branch profit tax|(77)|(58)|-|-|(135)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(320)|-|237|-|(83)| |Lease liabilities|181|7|-|-|188| |Others|405|106|-|-|511| |Total|2,650|362|236|(974)|2,274| # Gross deferred tax assets and liabilities are as follows: | |Assets|Liabilities|Net| |---|---|---|---| |Deferred tax assets / (liabilities) in relation to| | | | |Property, plant and equipment and Intangible assets|651|54|597| |Provision for employee benefit obligations|786|-|786| |Cash flow hedges|7|-|7| |Receivables, financial assets at amortised cost|403|-|403| |Branch profit tax|-|135|(135)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(83)|-|(83)| |Lease liabilities|188|-|188| |Others|512|1|511| |Total|2,464|190|2,274| # Notes forming part of Standalone Financial Statements # 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 in / reclassified from other comprehensive income|Adjustments / utilisation|Closing balance| |---|---|---|---|---|---| |Deferred tax assets / (liabilities) in relation to| | | | | | |Property, plant and equipment and intangible assets|290|84|-|-|374| |Provision for employee benefit obligations|639|94|-|-|733| |Cash flow hedges|(8)|-|16|-|8| |Receivables, financial assets at amortised cost|336|36|-|-|372| |MAT credit entitlement|1,710|-|-|(736)|974| |Branch profit tax|(310)|233|-|-|(77)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(500)|-|180|-|(320)| |Lease liabilities|210|(29)|-|-|181| |Others|428|(23)|-|-|405| |Total|2,795|395|196|(736)|2,650| # Gross deferred tax assets and liabilities are as follows: | |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| |Total|2,779|129|2,650| # 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. # 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 `1,471 crore and `1,616 crore as at March 31, 2023 and 2022, 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, 2023 and 2022. # Notes forming part of Standalone Financial Statements 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 2020 are generally subject to examination by the tax authorities. In United States of America, the federal statute of limitation applies to fiscals 2019 and earlier and applicable state statutes of limitation vary by state. In United Kingdom, the statute of limitation generally applies to fiscal 2019 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 period. |
The Company did not have any potentially dilutive securities in any of the periods presented. | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Profit for the year (` crore)|39,106|38,187| |Weighted average number of equity shares|365,90,51,373|369,88,32,195| |Basic and diluted earnings per share (`)|106.88|103.24| |Face value per equity share (`)|1|1| # 17) Auditor's remuneration Auditor's remuneration consists of the following: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Auditor|11|9| |For taxation matters|1|1| |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) `1,454 crore and `1,315 crore as at March 31, 2023 and 2022, respectively, for purchase of property, plant and equipment. # Contingencies - Direct tax matters - Refer note 15. Indirect tax matters # Notes forming part of Standalone Financial Statements # Other claims Claims aggregating `218 crore and `235 crore as at March 31, 2023 and 2022, 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 `7,730 crore (US $940 million) to Epic which was thereafter reduced by the Trial Court to `3,454 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 `822 crore (US $100 million) award and `1,645 crore (US $200 million) in punitive damages. On August 20, 2020, the Appeals Court (a) vacated the award of `2,303 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 `1,151 crore (US $140 million), (b) affirmed the District Court's decision vacating the jury's award of `822 crore (US $100 million) in compensatory damages for alleged use of "other confidential information" by the Company, and, (c) affirmed the District Court's decision upholding the jury's award of `1,151 crore (US $140 million) in compensatory damages for use of the comparative analysis by the Company. 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 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. On April 8, 2021, Epic approached the Supreme Court seeking review of the Order of the Appeals Court which was denied by the Supreme Court on March 21, 2022. On April 21, 2022, Epic invoked payment of `1,151 crore (US $140 million) out of `3,618 crore (US $440 million) Letter of Credit provided as security, towards compensatory damages awarded by the District Court and confirmed by the Appeals Court, already provided for in the earlier years. On July 1, 2022, the District Court passed an Order affirming the punitive damages at `1,151 crore (US $140 million). The Company has filed an appeal on November 16, 2022, in the Appeals Court to reduce the punitive damages awarded by the District Court, which is pending. Pursuant to encashment of the Letter of Credit towards compensatory damages, the value of Letter of Credit made available to Epic stands reduced to `1,250 crore (US $152 million). # Guarantees and letter of comfort File: AR_TCS_2022_2023.md 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. # 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. |
# Notes forming part of Standalone Financial Statements # 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| |---|---|---|---|---|---|---| |Year ended March 31, 2023|38|23,753|1,152|2,506|-|27,449| |Revenue from operations|38|23,753|1,152|2,506|-|27,449| |Dividend income|-|2,106|-|-|-|2,106| |Rent income|-|33|-|-|-|33| |Other income|-|36|-|-|-|36| |Purchases of goods and services (including reimbursements)|-|15,069|564|226|-|15,859| |Brand equity contribution|99|-|-|-|-|99| |Facility expenses|1|109|23|59|-|192| |Lease rental|-|-|56|47|-|103| |Bad debts and advances written off, allowance for doubtful trade receivables and advances (net)|-|-|(1)|1|-|-| |Contribution and advance to post employment benefit plans|-|-|-|-|2,955|2,955| |Purchase of property, plant and equipment|-|1|13|137|-|151| |Advances given|-|-|1|45|-|46| |Advances recovered|-|-|1|15|-|16| |Advances taken|-|2|25|5|-|32| |Dividend paid|29,881|-|16|6|-|29,903| |Guarantees given|-|237|-|-|-|237| |Cost recovery|-|3,591|-|-|-|3,591| |Transfer out of employee benefit obligations|-|6|-|-|-|6| |Transfer in of employee benefit obligations|-|1|-|-|-|1| | |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| |---|---|---|---|---|---|---| |Year ended March 31, 2022|40|21,358|770|2,233|-|24,401| |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| # Notes forming part of Standalone Financial Statements |(` crore)| | | |Year ended March 31, 2022| | | | | |---|---|---|---|---|---|---|---|---| |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| |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| | # Balances receivable from related parties are as follows: |(` crore)| | | | |As at March 31, 2023| | | | | |---|---|---|---|---|---|---|---|---|---| |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| |Trade receivables and contract assets| |2|7,279| |429|794| |-|8,504| |Loans, other financial assets and other assets| |10|458| |95|85| |-|648| | | |12|7,737| |524|879| |-|9,152| # As at March 31, 2022 |(` crore)| | | |As at March 31, 2022| | | | | |---|---|---|---|---|---|---|---|---| |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| |Trade receivables and contract assets| |11|6,704|242|673| |-|7,630| |Loans, other financial assets and other assets| |10|157|52|30| |-|249| | | |21|6,861|294|703| |-|7,879| # Notes forming part of Standalone Financial Statements # Balances payable to 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 and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---|---| |As at March 31, 2023|90|6,771|364|314|278|7,817| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities| | | | | | | |Commitments and guarantees|-|4,427|12|50|-|4,489| |As at March 31, 2022|92|5,067|499|111|-|5,769| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities| | | | | | | |Commitments and guarantees|-|4,610|37|201|-|4,848| # Material related party transactions are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Revenue from operations| | | |Tata Consultancy Services Deutschland GmbH|3,221|3,038| |Tata Consultancy Services Netherlands BV|3,402|3,006| |Tata Consultancy Services Canada Inc.|3,544|2,804| |Tata Consultancy Services Switzerland Ltd.|2,699|2,285| |Tata Consultancy Services Sverige AB|2,274|2,172| |Jaguar Land Rover Limited|1,706|1,500| |Tata Digital Private Limited|502|269| |Purchases of goods and services (including reimbursements) and net of cost recovery| | | |Tata America International Corporation|3,824|3,156| |Tata Consultancy Services De Mexico S.A., De C.V.|2,946|2,130| |TCS Foundation|542|679| |Tata Consultancy Services Canada Inc.|1,280|495| |Dividend income| | | |Tata America International Corporation|643|707| |TCS Iberoamerica SA|190|682| |Tata Consultancy Services Canada Inc.|304|649| |Tata Consultancy Services Netherlands BV|211|646| # Notes forming part of Standalone Financial Statements # Material related party balances are as follows: | |Year ended March 31, 2023|Year ended March 31, 2022| |---|---|---| |Trade receivables and contract assets| | | |Tata America International Corporation|1,366|1,291| |Tata Consultancy Services France|1,227|1,063| |Diligenta Limited|463|745| |Tata Consultancy Services Netherlands BV|634|594| |Tata Consultancy Services Asia Pacific Pte Ltd.|474|345| |Tata Consultancy Services Sverige AB|185|88| |Jaguar Land Rover Limited|482|379| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities| | | |Tata America International Corporation|2,688|2,044| |Tata Consultancy Services De Mexico S.A., De C.V.|933|433| # Transactions with key management personnel are as follows: | |Year ended |
March 31, 2023|Year ended March 31, 2022| |---|---|---| |Short-term benefits|58|53| |Dividend paid during the year|2|1| | |60|54| 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) No funds have been advanced / loaned / invested (from borrowed funds or from share premium or from any other sources / kind of funds) by the Company to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Company shall (i) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. # 22) The sitting fees and commission paid to non-executive directors is `13 crore and `12 crore as at March 31, 2023 and 2022, respectively. # 23) 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. 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. # 24) Additional Regulatory Information # * Ratios |Ratio|Numerator|Denominator|Current year|Previous year| |---|---|---|---|---| |Current ratio (in times)|Total current assets|Total current liabilities|2.4|2.5| |Debt-Equity ratio (in times)|Debt consists of borrowings|Total equity|0.1|0.1| |Debt service coverage ratio (in times)|Earning for Debt Service = Net Profit after taxes + Non-cash operating expenses + Interest + Other non-cash adjustments|Debt service = Interest and lease payments + Principal repayments|23.4|23.2| |Return on equity ratio (in %)|Profit for the year less Preference dividend (if any)|Average total equity|51.6%|50.3%| |Trade receivables turnover ratio (in times)|Revenue from operations|Average trade receivables|4.8|4.8| |Trade payables turnover ratio (in times)|Cost of equipment and software licences + Other expenses|Average trade payables|3.6|3.7| |Net capital turnover ratio (in times)|Revenue from operations|Average working capital (i.e. Total current assets less Total current liabilities)|3.5|2.9| |Net profit ratio (in %)|Profit for the year|Revenue from operations|20.5%|23.8%| |Return on capital employed (in %)|Profit before tax and finance costs|Capital employed = Net worth + Lease liabilities + Deferred tax liabilities|65.2%|60.4%| |Return on investment (in %)|Income generated from invested funds|Average invested funds in treasury investments|7.4%|6.1%| # 25) Dividend Dividends paid during the year ended March 31, 2023 include an amount of `22.00 per equity share towards final dividend for the year ended March 31, 2022 and an amount of `91.00 per equity share towards interim dividends (including special dividend) for the year ended March 31, 2023. 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 declared by the Company are based on the profit available for distribution. On April 12, 2023, the Board of Directors of the Company have proposed a final dividend of `24.00 per share in respect of the year ended March 31, 2023 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately `8,782 crore. As per our report of even date attached For B S R & Co. |
LLP Chartered Accountants Firm's registration no: 101248W/W-100022 Amit Somani Partner Membership No: 060154 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 12, 2023 Mumbai, April 12, 2023 Annual Report 2022-23 Standalone Financial Statements 2022-23 | 315 # 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|End date of accounting period|Currency|Rate|Capital and Reserves|Total Assets|Total Liabilities|Turnover before Tax|Profit for Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |1|APT Online Limited|August 9, 2004|April 1, 2022|March 31, 2023|INR|1.000000|2|114|179|63|25|134|22|6|16|-|89%|India| |2|MP Online Limited|September 8, 2006|April 1, 2022|March 31, 2023|INR|1.000000|1|126|181|54|47|92|35|9|26|-|89%|India| |3|C-Edge Technologies Limited|January 19, 2006|April 1, 2022|March 31, 2023|INR|1.000000|10|351|441|80|-|356|115|29|86|-|51%|India| |4|MahaOnline Limited|September 23, 2010|April 1, 2022|March 31, 2023|INR|1.000000|3|83|149|63|33|1|9|2|7|-|74%|India| |5|TCS e-Serve International Limited|December 31, 2008|April 1, 2022|March 31, 2023|INR|1.000000|10|239|1,087|838|155|2,046|128|35|93|-|100%|India| |6|Diligenta Limited|August 23, 2005|January 1, 2022|December 31, 2022|GBP|101.647598|10|1,515|2,838|1,313|391|4,258|153|23|130|-|100%|U.K.| |7|Tata Consultancy Services Canada Inc.|October 1, 2009|April 1, 2022|March 31, 2023|CAD|60.661331|43|1,324|3,241|1,874|-|10,217|1,133|299|834|-|100%|Canada| |8|Tata America International Corporation|August 9, 2004|April 1, 2022|March 31, 2023|USD|82.232500|2|1,640|5,000|3,358|412|5,017|1,314|337|977|-|100%|U.S.A.| |9|Tata Consultancy Services Asia Pacific Pte Ltd.|August 9, 2004|April 1, 2022|March 31, 2023|USD|82.232500|36|975|2,099|1,088|916|2,798|321|38|283|-|100%|Singapore| |10|Tata Consultancy Services (China) Co., Ltd.|November 16, 2006|January 1, 2022|December 31, 2022|CNY|11.965790|242|67|468|159|41|1,050|73|24|49|-|100%|China| |11|Tata Consultancy Services Japan, Ltd.|July 1, 2014|April 1, 2022|March 31, 2023|JPY|0.616829|267|1,410|2,996|1,319|-|5,260|488|154|334|-|66%|Japan| |12|Tata Consultancy Services Malaysia Sdn Bhd|August 9, 2004|April 1, 2022|March 31, 2023|MYR|18.634149|4|65|272|203|-|518|28|11|17|-|100%|Malaysia| |Sr. No.|Name of the Subsidiary|Date of becoming subsidiary|Start date of accounting period|End date of accounting period|Currency|Exchange Rate|Capital and Reserves|Total Assets|Total Liabilities|Total Investments before Tax|Profit after Tax|Provision for Tax|Proposed Dividend|% of Shareholding|Country| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |13|PT Tata Consultancy Services|October 5, 2006|April 1, 2022|March 31, 2023|IDR|0.005484|1|30|100|69|-|105|21|6|15|-|100%|Indonesia| |14|Tata Consultancy Services (Philippines) Inc.|September 19, 2008|April 1, 2022|March 31, 2023|PHP|1.512530|(42)|169|542|415|-|991|94|10|84|-|100%|Philippines| |15|Tata Consultancy Services (Thailand) Limited|May 12, 2008|April 1, 2022|March 31, 2023|THB|2.405866|2|4|40|34|-|90|1|-|1|-|100%|Thailand| |16|Tata Consultancy Services Belgium|August 9, 2004|April 1, 2022|March 31, 2023|EUR|89.444305|2|463|998|533|-|2,626|140|37|103|-|100%|Belgium| |17|Tata Consultancy Services Deutschland GmbH|August 9, 2004|April 1, 2022|March 31, 2023|EUR|89.444305|1|803|2,309|1,505|-|6,812|415|132|283|-|100%|Germany| |18|Tata Consultancy Services Sverige AB|August 9, 2004|April 1, 2022|March 31, 2023|SEK|7.933748|-|906|1,528|622|-|4,258|258|55|203|-|100%|Sweden| |19|Tata Consultancy Services Netherlands BV|August 9, 2004|April 1, 2022|March 31, 2023|EUR|89.444305|590|2,490|5,030|1,950|1,744|7,625|611|104|507|-|100%|Netherlands| |20|Tata Consultancy Services Italia s.r.l.|August 9, 2004|April 1, 2022|March 31, 2023|EUR|89.444305|20|58|211|133|-|400|9|9|-|-|100%|Italy| |21|Tata Consultancy Services Capellen (G.D. de Luxembourg) S.A.|October 28, 2005|April 1, 2022|March 31, 2023|EUR|89.444305|50|68|313|195|-|798|80|23|57|-|100%|Luxembourg| |22|Tata Consultancy Services Switzerland Ltd.|October 31, 2006|April 1, 2022|March 31, 2023|CHF|89.881408|13|831|1,757|913|-|4,708|272|51|221|-|100%|Switzerland| # Standalone Financial Statements 2022-23 |Sr. No.|Name of the subsidiary|Date of becoming subsidiary|Start date of accounting period|End date of accounting period|Currency|Exchange Rate|Share Capital|Reserves and Surplus|Total Assets|Total Liabilities|Turnover|Profit before Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |23|Tata Consultancy Services Osterreich GmbH|March 9, 2012|April 1, 2022|March 31, 2023|EUR|89.444305|-|4|65|61|-|78|-|-|-|100%|Austria| | |24|Tata Consultancy Services Danmark ApS|March 16, 2012|April 1, 2022|March 31, 2023|DKK|12.007023|-|-|-|-|-|(2)|(5)|-|(5)|-|0%|Denmark| |25|Tata Consultancy Services De Espana S.A.|August 9, 2004|April 1, 2022|March 31, 2023|EUR|89.444305|1|120|244|123|-|567|53|6|47|-|100%|Spain| |26|Tata Consultancy Services (Portugal) Unipessoal, Limitada|July 4, 2005|April 1, 2022|March 31, 2023|EUR|89.444305|-|35|73|38|-|107|26|5|21|-|100%|Portugal| |27|Tata Consultancy Services France|June 28, 2013|April 1, 2022|March 31, 2023|EUR|89.444305|4|(371)|1,674|2,041|-|2,849|34|8|26|-|100%|France| |28|Tata Consultancy Services Saudi Arabia|July 2, 2015|January 1, 2022|December 31, 2022|SAR|21.907052|8|126|290|156|-|597|14|3|11|-|100%|Saudi Arabia| |29|Tata Consultancy Services (Africa) (PTY) Ltd.|October 23, 2007|January 1, 2022|December 31, 2022|ZAR|4.616432|6|43|49|-|49|-|26|-|26|-|100%|South Africa| |30|Tata Consultancy Services (South Africa) (PTY) Ltd.|October 31, 2007|January 1, 2022|December 31, 2022|ZAR|4.616432|8|85|498|405|-|994|52|15|37|-|100%|South Africa| |31|TCS FNS Pty Limited|October 17, 2005|April 1, 2022|March 31, 2023|AUD|54.914864|205|(62)|143|-|2|-|44|-|44|-|100%|Australia| |32|TCS Financial Solutions Beijing Co., Ltd.|December 29, 2006|January 1, 2022|December 31, 2022|CNY|11.965790|44|(7)|52|15|-|55|(3)|-|(3)|-|100%|China| |33|TCS Financial Solutions Australia Pty Limited|October 19, 2005|April 1, 2022|March 31, 2023|AUD|54.914864|-|74|121|47|-|60|49|16|33|-|100%|Australia| |Sr. |
No.|Name of the Subsidiary|Date of becoming subsidiary|Start date of accounting period|End date of accounting period|Currency|Exchange Rate|Capital and Reserves|Total Assets|Total Liabilities|Total Investments before Tax|Profit for Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |34|TCS Iberoamerica SA|August 9, 2004|January 1, 2022|December 31, 2022|USD|82.23|2500|809|997|1806|-|1787|-|188|7|181|-|100%|Uruguay| |35|TCS Solution Center S.A.|August 9, 2004|January 1, 2022|December 31, 2022|UYU|2.12|487|76|253|481|152|-|893|159|40|119|-|100%|Uruguay| |36|Tata Consultancy Services Argentina S.A.|August 9, 2004|January 1, 2022|December 31, 2022|ARS|0.39|254|2|3|43|38|-|43|3|-|3|-|100%|Argentina| |37|Tata Consultancy Services Do Brasil Ltda|August 9, 2004|January 1, 2022|December 31, 2022|BRL|16.14|477|284|122|724|318|-|1495|142|53|89|-|100%|Brazil| |38|Tata Consultancy Services De Mexico S.A., De C.V.|August 9, 2004|January 1, 2022|December 31, 2022|MXN|4.54|387|1|1149|2275|1125|-|4697|597|182|415|-|100%|Mexico| |39|Tata Consultancy Services Chile S.A.|August 9, 2004|January 1, 2022|December 31, 2022|CLP|0.10|115|177|251|611|183|58|851|106|14|92|-|100%|Chile| |40|TCS Inversiones Chile Limitada|August 9, 2004|January 1, 2022|December 31, 2022|CLP|0.10|115|159|185|362|18|334|36|87|2|85|-|100%|Chile| |41|TATA SOLUTION CENTER S.A.|December 28, 2006|January 1, 2022|December 31, 2022|USD|82.23|500|25|95|252|132|-|459|65|15|50|-|100%|Ecuador| |42|TCS Uruguay S.A.|January 1, 2010|January 1, 2022|December 31, 2022|UYU|2.12|-|240|401|161|75|731|109|4|105|-|100%|Uruguay| | |43|MGDC S.C.|January 1, 2010|January 1, 2022|December 31, 2022|MXN|4.54|77|(18)|90|31|-|68|3|(5)|8|-|100%|Mexico| | |44|Tata Consultancy Services Qatar L.L.C.|December 20, 2011|January 1, 2022|December 31, 2022|QAR|22.58|800|5|30|55|20|-|42|(2)|-|(2)|-|100%|Qatar| |45|Tata Consultancy Services UK Limited|October 31, 2018|January 1, 2022|December 31, 2022|GBP|101.64|-|29|29|-|-|-|(1)|1|-|100%|U.K.| | | |46|TCS Business Services GmbH|March 9, 2020|April 1, 2022|March 31, 2023|EUR|89.44|-|76|156|80|56|138|5|2|3|-|100%|Germany| | |47|Tata Consultancy Services Ireland Limited|December 2, 2020|January 1, 2022|December 31, 2022|EUR|89.44|224|105|529|200|-|1315|78|9|69|-|100%|Ireland| | # Standalone Financial Statements 2022-23 |Sr. No.|Name of the subsidiary|Date of becoming subsidiary|Start date of accounting period|End date of accounting period|Currency|Exchange Rate|Capital and Reserves|Total Assets|Total Liabilities|Turnover|Profit before Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |48|TCS Technology Solutions AG|January 01, 2021|January 1, 2022|December 31, 2022|EUR|89.444305|29|687|1,767|1,051|-|1,907|385|70|315|100%|Germany| |49|Saudi Desert Rose Holding B.V.|May 26, 2021|January 1, 2022|December 31, 2022|EUR|89.444305|-|2|2|-|-|-|-|-|-|100%|Netherlands| |50|Tata Consultancy Services Bulgaria EOOD|August 31, 2021|January 1, 2022|December 31, 2022|BGN|45.763537|-|26|62|36|-|72|19|2|17|100%|Bulgaria| |51|Tata Consultancy Services Guatemala, S.A.|September 01, 2021|January 1, 2022|December 31, 2022|GTQ|10.543439|8|12|46|26|-|59|10|3|7|100%|Guatemala| |52|TCS Foundation|March 25, 2015|April 1, 2022|March 31, 2023|INR|1.000000|1|1,305|1,857|551|33|-|(100)|61|(161)|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, 2023. 2. On May 18, 2022, Tata Consultancy Services Asia Pacific Pte Ltd. acquired additional 6.8% ownership interest in Tata Consultancy Services (China) Co., Ltd. for a purchase consideration of ₹25 crore thereby making it a wholly owned subsidiary. 3. Tata Consultancy Services Danmark ApS liquidated w.e.f. July 27, 2022. # 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 12, 2023 # 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 a simple 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 Systematic allocation of the depreciable amount of an intangible asset over its useful life. 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 # Glossary # APIfication The process of exposing a discrete business function or data within an enterprise's systems through APIs. # Application Development and Maintenance Design, development, and deployment of custom software; ongoing support, upkeep, and enhancement of such software over its lifetime. # 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. # 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 # AUC See Assets Under Custody # 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. # Avatar An avatar is a digital representation of yourself, whether it's in a video game, the metaverse, or wherever else it might be applicable. # Basis Point One hundredth of a percentage point, that is, 0.01 percent. # BFSI Acronym for Banking, Financial Services and Insurance # 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. # Blockchain A distributed database that maintains a continuously growing list of records, called blocks, secured from tampering and revision. # Bp See Basis Point # BPaaS See Business Process as a Service # BPS See Business Process Services # Business 4.0 TCS' thought leadership framework that helps enterprises leverage technology to further their growth and transformation agenda. Successful Business 4.0 enterprises use technology to deliver mass personalization, leverage ecosystems, embrace risk and create exponential value. Such enterprises are agile, intelligent, automated and on the cloud. # Business Process as a Service Refers to the delivery of BPS over a cloud computing model. Whereas traditional BPS relies on labor arbitrage to reduce costs, BPaaS aggregates demand using the cloud, servicing multiple customers with a single instance, multi-tenant platform and shared services, thereby delivering significant operating efficiencies. The pricing model is usually outcome based. # Business Process Services Designing, enabling, and executing business operations including data management, analytics, interactions and experience management. # Buyback A corporate action in which a company returns excess cash to shareholders by buying back its shares from them and usually extinguishing those shares thereafter. The company's equity share capital and the number of shares outstanding in the market correspondingly reduced. # CAGR See Compounded Annual Growth Rate # 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. # Carbon Neutral Not adding new greenhouse gas (GHG) emissions to the atmosphere through reduction initiatives and where emissions continue, they are compensated by absorbing an equivalent amount from the atmosphere through carbon offset. # Glossary # 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 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. # Cloud Native A cloud native application consists of discrete, reusable components known as microservices that are designed to integrate into any cloud environment. # CMT Acronym for Communication, Media and Technology # CMMI-SVC Acronym for Capability Maturity Model® Integration For Services # Cognitive Automation The use of AI and machine learning to automate relatively more complex tasks that require reasoning capability and contextual awareness. TCS' ignio™ a leading cognitive automation software product in the market today. # Cognitive Business Operations (CBO) An integrated offering where TCS takes responsibility for the outcome of an entire slice of the customers' operations including the business processes and the underlying IT infrastructure, and uses cognitive automation to transform that operational stack. # Cognitive Computing See Artificial Intelligence # COIN See Co-Innovation Network # Co-Innovation Network This is an extended, global innovation ecosystem curated by TCS, to harness the innovation efforts of start-ups and academia, and incorporate them into transformational solutions built by TCS for its customers. # 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) Platform 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 growth after eliminating the impact of movements in exchange rates during the period. # Contextual Knowledge File: AR_TCS_2022_2023.md 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. # Conversational AI Conversational artificial intelligence (AI) refers to technologies, like chatbots or virtual agents, which users can talk to. They use large volumes of data, machine learning, and natural language processing to help imitate human interactions, recognizing speech and text inputs and translating their meanings across various languages. # 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. # 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. # Glossary # Core 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. # Cyber Security Technologies, processes and practices designed to protect networks, computers, programs and data from attack, damage or unauthorized access. # Days' Sales Outstanding (DSO) A popular way of depicting the Trade Receivable relative to the company's Revenue. DSO = Trade Receivable * 365 / LTM Revenue # DSO Data Mining Data mining is the practice of obtaining valuable information from data sets. The data can be in any form, such as text, audio, or video data. Data mining aims to find actionable insights in the data that can improve business decisions or solve problems. For instance, data mining can discover customer buying patterns and target ads towards people who would likely purchase a product. # Depreciation Systematic allocation of the depreciable amount of an asset over its useful life. # 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. # Digital Divide Digital Divide refers to the unequal spread of technology and the opportunities it affords between different socioeconomic groups in a society. # 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. # 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 # 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. # 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. # Earnings Per Share (EPS) 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. # 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. # EFF1 European Efficiency Classification standard, Level 1 # Effective Tax Rate (ETR) 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. It is an environmental impact study which 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. # 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. # Environmental, Social and Governance Environmental, social and governance (ESG) is a system for how to measure the sustainability of a company in three specific categories: environmental, social and governance. # EPEAT Acronym for Electronic Product Environmental Assessment Tool # EPS See Earnings Per Share # ESG See Environmental, Social and Governance # ETR See Effective Tax rate # 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. # 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. # 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. # Framework A kind of intellectual property, consisting of software which provides generic functionality for a certain business use case, and which is customized for a specific customer's needs with additional code. Use of such pre-built code reduces time to market and results in more stable, reliable solutions. |
# Free Cash Flow Represents the cash a company generates through its operations, less the capital expenditure. Free cash flow = Cash flow from operating activities - Capital expenditure # FTE Acronym Full Time Equivalent # Function Point A function point is a granular building block of a software, based on a functional view of that system, represented by a code snippet whose logic helps the user accomplish something. The concept is used while estimating the effort for building a new application, by decomposing it into its constituent function points of varying levels of complexity. # 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. # 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. # Generative AI Generative AI describes any type of artificial intelligence (AI) that is capable of generating new content, including text, images, video, audio, simulations, code or synthetic data. The most popular example is ChatGPT, a large language model that uses deep learning to produce text that looks like it is written by humans. # GHGs Acronym for Greenhouse Gas. These are gases that trap heat in the atmosphere leading to global warming and climate change. # Global Capability Centers (GCC) / Captive units Captive units include both MNC-owned units that undertake work for the parents' global operations and the company owned units of domestic firms, set up in offshore locations offering cheaper labor pool, helping the parent to reduce its operational costs. # 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. # 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. # IE3 International Electrotechnical Commission (IEC) standards, Level 3 # IGBT Acronym for Insulated Gate Bipolar Transistors # 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. # Glossary # 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. # Internet of Things 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. # Intellectual Property An asset that is the result of a creative design or idea, such as patents, copyrights, reusable code, software products and platforms, and gives the owner exclusive rights over its usage, such that no one can copy or reuse the creation without the owner's permission. # Interactive Technology 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. # 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. # Involuntary Attrition A reduction in the workforce due to the employer's decision to terminate employment, instead of the employees' decision to leave. # IoT See Internet of Things. # IP See Intellectual Property. # 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. # kL Acronym for the unit kilo-liters used to measure volume. |
It is a unit used to measure and report water usage in TCS' offices. # KMP See Key Managerial Personnel. # kWh Acronym for kilowatt hours used as a unit of measurement of electricity. # Large Language Models This is a language model used to train generative AI, and consists of a neural network with many parameters (typically billions of weights), trained on large volumes of unlabeled text. By tracking words in sequences, it learns both context and meaning in language, enabling it to generate text artifacts that look they were written by humans. # 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. # Low-Code, No Code New software development platforms that offer a drag and drop user interface to allow business users to build custom web or mobile applications without actually having to write the code. The difference between the two is related to the extent of programming ability needed. The former might still require some amount of programming, while the latter is entirely drag and drop. In addition to boosting innovation within the enterprise, these platforms also drive up productivity of programmers. # 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. # Machine Learning A type of artificial intelligence that provides computers with the ability to learn behaviors without being explicitly programmed. # 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 Capitalization = Last Trading Price * Total number of outstanding shares. # MEA Acronym for Middle East and Africa. # Glossary |Metaverse|A virtual 3D environment that a user can experience explore on a computer or VR headset. Users can interact with each other in several ways, including social networking, gaming, and shopping.| |---|---| |MFDM™|Acronym for Machine First Delivery Model| |Minimum Viable Product|The most basic version of a new product built in an agile development cycle, with the bare minimum functionality, made available to users at the earliest to get user feedback and validate product value with minimum investment. Once validated, its features and functionalities are continually augmented in subsequent iterative cycles.| |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.| |Moonlighting|Working more than one job at a time, taking on assignments from third parties in addition to a regular employment, usually without the employer's knowledge.| |MSP|See Managed Services Provider| |MVP|See Minimum Viable Product| |MWh|Acronym for megawatt hours used as a unit of measurement of electricity. 1 MWh=1000kWh| |Net Zero|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.| |Non-Controlling Interests|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.| |Operating Model|The manner in which processes are defined and activities are organized to create and deliver value to a target audience. An IT operating model covers activities around new system development, application and infrastructure support whereas business operating models address execution of actions specific to a business function.| |Operating Model Transformation|Redefining individual processes by embedding AI, machine learning and other forms of automation to reduce the need for human intervention, resulting in a leaner operating model that is faster, more agile and more resilient. |
Such transformations - whether in IT or business - can be significantly accelerated by the use of TCS Cognix.| |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 1million @ ` 87/$ after 3 months, paying an option premium of ` 1 million. With this, TCS will have the right to sell USD 1million at an exchange rate of ` 87, even if the prevailing market rate at the end of three months is, say ` 85. On the other hand, if the market rate is higher, say ` 89, 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.| |PAS 2060|It is an internationally recognized standard by the British Standards Institution to verify and substantiate an organization' claim of carbon neutrality.| |PaaS|See Platform as a Service| |Personalization|Segmentation and responding to individual transactions, customized for a single customer in a single instance.| |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.| # Glossary |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| |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.| |RECs/ GOs|Renewable Energy Certificates / Guarantees of Origin are EACs used in different markets.| |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.| |RPA|See Robotic Process Automation| |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.| |Security Operations Center|A Security Operations Center is responsible for protecting an organization against cyber threats. SOC analysts perform round-the-clock monitoring of an organization's network and investigate any potential security incidents.| |SEZ|See Special Economic Zone| |Shareholder Payout Ratio|The proportion of earnings paid to shareholders as compared to the Company's earnings, i.e. Net Income attributable to Shareholders of the Company. Payout can be in the form of dividend and share buyback, including taxes thereon.| |Simplification|The rationalization of IT architectures through consolidation of systems and elimination of redundant systems and layers. The primary purpose is to shrink the IT footprint and make operations leaner and more efficient.| |SOC|See Security Operations Center| # Glossary |Sole Sourced|Non-competitive agreements that allow a single vendor to fulfill the needs of the contractual requirements.| |---|---| |Contract|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.| |Special Economic Zone|In India, these are designated areas in which business and trade laws are different from the rest of the country, with various benefits and tax breaks to promote exports, attract investments, and create local jobs.| |STEM|An acronym for education in the fields of science, technology, engineering and math.| |T&M|See Time and Materials Contract| |TCFD|Acronym for Task Force on Climate-related Financial Disclosures| |tCO2e|Acronym for tonnes of carbon dioxide equivalent| |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.| |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.| |Turnkey Contracts|See Fixed Price Contracts| |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.| File: AR_TCS_2022_2023.md |Vendor Consolidation|A strategy to reduce costs and the overheads of managing a large number of vendors. Usually entails aggregating work currently outsourced to a large number of small providers, and transferring it to a smaller, select set of winning bidders. Besides cost reduction, clients use this to reduce complexity and accelerate their cloud transformation journeys. Selecting a single strategic partner with end to end capabilities to maintain the legacy estate and support the modernization drives efficiency, accountability and speed.| |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.| |Voluntary Attrition|Refers to reduction in workforce resulting from employees willingly leaving the organization to pursue other opportunities, spend time with family, or for some other personal reason.| |VR|See Virtual Reality| |XR|Extended reality, an umbrella term that covers augmented reality, virtual reality and mixed reality.| |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. # Sustainability Disclosures # Identification of Material Topics 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. TCS' Engagement with stakeholders 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 Annual Report 2022-23 # 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 - Value, ethics and compliance - Enterprise Risk Management - Succession Planning - Remuneration Policy |- CG>> Pg 113 - CG>> Pg 113, 114 - CG>> Pg 114 - CG>> Pg 115 - CG>> Disclosures >> Pgs 125 to 127 - MDA >> Internal financial control systems and their adequacy >> Pg 105 - CG>> Pg 114 - MDA>> Pgs 95 to 104 - CG>> Pg 115 - CG>> Pg 122 |Internal|2-9, 2-10, 2-11, 2-12, 2-13, 2-14, 2-15, 2-19| |Business Sustainability|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 16,17 - Letter to Shareholders >> Pgs 8 to 11 - MDA >> Strategy for sustainable growth >> Pgs 86 to 88 - MDA >> Business outlook >> Pg 94,95 - MDA >> Enabling investments >> Pg 87 - Intellectual Capital >> Pg 20,21 |Internal|2-22, 201-1| |Talent Management|The company's ability to attract, develop, motivate, and retain talent is critical to business success.|- Talent acquisition - Talent development - Culture and Diversity - Employee retention - Employee Engagement - Competitive Compensation - Occupational Health and safety |- MDA >> Pg 89 - MDA >> Pg 90 - MDA >> Pg 89, 90 - MDA >> Pg 91 - MDA >> Pg 91 - MDA >> Pg 91 - MDA >> Pg 91 |Internal|401-1, 401-2, 401-3, 403-1, 403-2, 403-5, 403-6, 403-9, 403-10, 404-1, 405-1, 405-2, 406-1| 2 GRI 3-2 3 GRI 3-3 * MDA: Management Discussion and Analysis, CG: Corporate Governance Report, BRSR: Business Responsibility and Sustainability Report Integrated Annual Report 2022-23 Sustainability Disclosures | 331 # 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.|- Social Capital >> Pg 23 - BRSR >> Pg 162, 177 |External|204-1, 207-1, 207-2, 207-3, 308-1, 308-2, 413-1, 414-2| | |Local communities| | | | | |Supplier Social and Environmental Assessment| | | | | |Education and skill development| | | | | |Job creation| | | | | |Taxes payable in different regions|- CG > Tax strategy >> Pg 115 - Consolidated Financial Statements >> Income taxes >> Pgs 235 to 239 - Country-wise subsidiary income taxes >> Pgs 316 to 320 | | | | |Environmental stewardship|- Natural Capital >> Pg 24, 25 |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| |Environmental Footprint|Business sustainability is linked to the planet's sustainability. Moreover, good environmental practices result in greater operational efficiency, adding to financial sustainability.|- Natural Capital >> Pg 24, 25 - BRSR >> Pg 168 | | | | |Energy consumption| | | | | |GHG emissions|- BRSR >> Pgs 169, 170, 175 | | | | |Water management|- BRSR >> Pg 173, 174 | | | | |Waste management|- BRSR >> Pg 171, 172 | | | # Climate change risk and opportunities assessment and management # Aligned with Taskforce on Climate-related Financial Disclosures (TCFD) Framework # Governance # A) Describe the board's oversight of climate-related risks & opportunities. Different Board committees oversee different aspects of climate-related risks and opportunities. # Stakeholder Relationship Committee (SRC) - The SRC is chaired by an independent director and comprises of 3 members including the CEO. It reviews the climate change strategy, approach, and performance of the organization. - The SRC formally meets twice every year to review policies and sustainability performance, including climate change and carbon performance. The board oversight helps drive the program effectively with greater accountability. - The CEO as a part of the SRC, is directly responsible for the efficient operations of the facility and hence is better able to review performance and drive improvement. The quarterly updates go from the Chief Human Resources Officer (CHRO) and is supported by the Head- Environmental Sustainability, Health and Safety. - TCS' carbon reduction goal to reduce its absolute greenhouse gas emissions across Scope 1 and Scope 2 by 70% by 2025 (over 2016 base year), and to achieve net zero emissions by 2030, was reviewed and approved by the committee. # Risk Management Committee (RMC) - The RMC is chaired by an independent director and comprises of 5 members including one additional independent director, 2 executive directors, i.e., CEO, COO, and one company executive, CFO. - The RMC formulates, monitors, and reviews the company's risk management policy. - Climate change risks and opportunities are covered under the strategic and operational risks for the Company and are reviewed in the RMC committee meetings. # Corporate Social Responsibility Committee (CSRC) - The CSRC is chaired by the Company's Chairman and additionally comprises one independent director and one executive director. The committee formulates, monitors, and reviews the company's CSR policy and outcomes, including climate action related projects. - The Board members meet on a quarterly basis and review their activities. # B) Describe management's role in assessing & managing climate-related risks & opportunities. - The Chief Operating Officer is responsible for overall ESG related challenges, targets and achievements. - Responsibility for driving and tracking climate change mitigation initiatives lies with the Chief Human Resources Officer. He reports to the Board sub-committee on sustainability related matters. Head, Environmental Sustainability Health and Safety (ESHS) reports to the CHRO. The ESHS team comprises of environmental sustainability professionals who monitor various climate change related data points including emissions and support the implementation of emission reduction initiatives across TCS locations in collaboration with action owners within the organization. Location level targets are monitored by the location level operations and ESHS teams. - For environmental risk assessment, mitigation, and adaptation, TCS has a well-defined structure with an Enterprise Risk Management Unit which is headed by a Chief Risk Officer. This unit reviews all risks associated with the company operations. ERM categorizes risks and opportunities into Strategic, Operational, Financial, Compliance and Catastrophic. - The risk identification process is carried out for the entire organization and its value chain to assess all risks including the physical, compliance, operational and reputational risks due to climate change and the business opportunities associated with it. Unit level risk assessments are done to assess the physical risks of climate change. |
These are then rolled up to the enterprise-level risk portfolio register and suitably included. These risks are reviewed on a half yearly basis or as required. - As TCS' customers respond to climate change actions, the company is seeing opportunities to provide technology-led solutions to help them achieve their sustainability goals. Recent events have accelerated digital adoption, put the spotlight on supply chain resilience and added urgency to the sustainability imperative. TCS leveraged its deep expertise in IoT, advanced analytics. and machine learning to come up with a suite of offerings in this space, including intellectual property such as Clever Energy™, IP2™, and TCS Envirozone™. Clients across industries such as retail, manufacturing, utilities and consumer goods are engaging the company to develop innovative technology led solutions to reduce energy consumption, or to measure and track green-house gas emissions across their end-to-end supply chain, reduce their carbon footprint, reduce waste and promote recycling. # Strategy 6 # A) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term. Current regulation TCS is required to follow all the environmental regulations around emissions, water discharge, waste recycling etc. Compliance to these regulations is monitored as part of the company's risk management function and integrated into its mitigation plans. TCS discloses its performance against various environmental parameters as per the Securities and Exchange Board of India (SEBI) mandated Business Responsibility & Sustainability Reporting (BRSR) framework, which is a part of this Integrated Annual Report. Emerging regulation Emerging regulations including carbon taxes (coal or fossil fuel taxes leading to escalation in the electricity tariff), mandatory energy audits are examples which impact TCS. Regulations around procurement of renewable energy, which is a key driver of the company's climate change mitigation plan, is also ever evolving in all major geographies. TCS keeps a close watch on the emerging regulations and plans its organizational sustainability strategy and roadmap to adapt to those changes. Technology With more energy efficient and eco-friendly building and IT equipment coming in the market, keeping TCS offices eco-efficient is an ongoing process wherein the company evaluates the technology and suitability and works on a phaseout plan to move to the new more efficient technology. These are considered as operational risks and opportunities which drive the company to make its infrastructure more climate resilient. Additionally, TCS is one of the market leaders in the cloud migration opportunity, helping clients migrate their workloads from owned data centers to hyperscaler clouds, significantly reducing the carbon footprint associated with those workloads. Legal TCS tracks environmental legal compliance (air emissions, water discharges, waste management and others) on a periodic basis and has a robust internal compliance management system to identify and comply with all legal requirements of current, amended and new regulations. Market Climate change is driving a lot of changes in TCS' customer behaviour, thus creating new markets and new opportunities, giving the company an opportunity to partner with them in their climate change mitigation journey by providing solutions, services, and process automation which helps in emission reduction. Reputation Reputational risk is relevant to the company as the investor and customer community is becoming increasingly aware of climate change related issues. It is important to demonstrate leadership in climate action to maintain TCS' reputation. Acute physical Acute physical risks associated with extreme weather events is relevant as TCS has substantial operations in coastal cities in India which are exposed to potential extreme weather events like heavy precipitation, flood, and cyclones. E.g., The company offices located in coastal cities like Chennai, Bhubaneshwar, Kolkata, Kochi are exposed to physical risks from cyclonic events and therefore adequate mitigation plans are in place. Chronic physical Having presence in many major cities across the world, TCS is subject to climate change related chronic physical impacts like change in precipitation pattern, with resultant effects like drought or flood. Also, with TCS's presence in coastal cities like Chennai, Mumbai, Kochi, Trivandrum, Kolkata, rise in sea level and related impacts like land submergence, salt water intrusion, disruption to network and communication systems are more likely. These risks are long term and included from perspective of planning appropriate infrastructure. 6 TCFD Strategy A, B and C. The time horizon considered by TCS during the current year for its assessment of short, medium and long term are 0 to 5 years, 5 to 10 years and 10 to 20 years respectively. |
nte˥rate˟ ƪnnual 5e˱ort 202223 Sustainability Disclosures | 334 # B) Describe where and how climate-related risks and opportunities have influenced the organization business, strategy and financial planning. |Products and services|Have climate-related risks and opportunities influenced your strategy in this area?|Description of influence| |---|---|---| |Yes|As TCS' customers respond to climate change actions, the company is seeing opportunities to provide technology-led solutions to help them achieve their sustainability goals. The change in technology consumption reflects the prevailing trends in the economy. Recent events have accelerated digital adoption, put the spotlight on supply chain resilience and added urgency to the sustainability imperative.| | |Each of these represents an opportunity that can contribute towards the growth of not just as one company, but of the ecosystem as a whole. TCS leveraged its deep expertise in IoT, advanced analytics, and machine learning to come up with a suite of offerings in this space, including intellectual property such as Clever Energy™, IP2™, and TCS Envirozone™.|Each of these represents an opportunity that can contribute towards the growth of not just as one company, but of the ecosystem as a whole. TCS leveraged its deep expertise in IoT, advanced analytics, and machine learning to come up with a suite of offerings in this space, including intellectual property such as Clever Energy™, IP2™, and TCS Envirozone™.| | | |Clients across industries such as retail, manufacturing, utilities and consumer goods are engaging TCS to develop innovative technology led solutions to reduce energy consumption, or to measure and track green-house gas emissions across their end-to-end supply chain, reduce their carbon footprint, reduce waste and promote recycling.|Clients across industries such as retail, manufacturing, utilities and consumer goods are engaging TCS to develop innovative technology led solutions to reduce energy consumption, or to measure and track green-house gas emissions across their end-to-end supply chain, reduce their carbon footprint, reduce waste and promote recycling.| | | |Supply chain and/or value chain|Have climate-related risks and opportunities influenced your strategy in this area?|Description of influence| |---|---|---| |Yes|Supply Chain sustainability through responsible sourcing is one of the risk mitigations identified by the Company under its sustainability risk. TCS's Green Procurement policy outlines its commitment to making its supply chain more responsible and sustainable.| | |Energy efficiency is one of the major procurement considerations in all the company's IT and other infrastructure assets procurement as this is directly correlated with TCS' emission profile.|Energy efficiency is one of the major procurement considerations in all the company's IT and other infrastructure assets procurement as this is directly correlated with TCS' emission profile.| | | |Climate related risks play a very important role in the company's supply chain engagements, and TCS is working with its suppliers to bring in improvements in carbon performance along with other ESG elements.|Climate related risks play a very important role in the company's supply chain engagements, and TCS is working with its suppliers to bring in improvements in carbon performance along with other ESG elements.| | | |Investment in R&D|Have climate-related risks and opportunities influenced your strategy in this area?|Description of influence| |---|---|---| |Yes|TCS' investments in research and innovation have resulted in solutions like Envirozone™, Clever Energy and IP2™. TCS has been using Clever Energy for the last few years to reduce its energy consumption and is now offering these to clients to help them achieve their sustainability goals.| | |Additionally, TCS has been investing in building green campuses (IGBC certified).|Additionally, TCS has been investing in building green campuses (IGBC certified).| | | |Operations|Have climate-related risks and opportunities influenced your strategy in this area?|Description of influence| |---|---|---| |Yes|Climate Change risks play an important consideration in TCS' operations. The company has created an environmentally sustainable approach by creating green policies, processes, frameworks, and infrastructure.| | |TCS' campuses are designed to withstand extreme weather events and the business continuity plans are tested periodically to ensure continued operations without any disruption. Green buildings, efficient operations, green IT, the use of renewable energy to reduce carbon footprint; adoption of newer technologies and methods to manage waste in line with circular economy principles are integral to the company operations.|TCS' campuses are designed to withstand extreme weather events and the business continuity plans are tested periodically to ensure continued operations without any disruption. |
Green buildings, efficient operations, green IT, the use of renewable energy to reduce carbon footprint; adoption of newer technologies and methods to manage waste in line with circular economy principles are integral to the company operations.| | | |All these initiatives are helping TCS achieve its Net Zero target by 2030.|All these initiatives are helping TCS achieve its Net Zero target by 2030.| | | # Have climate-related risks and opportunities influenced your strategy in this area? Direct costs, Capital expenditures, Capital allocation, Assets Yes TCS has aligned its current systems of internal financial control with the requirement of Companies Act 2013, on the lines of the globally accepted risk-based framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. The Internal Control - Integrated Framework (the 2013 framework) is intended to increase transparency and accountability in an organization's process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses. The company has successfully laid down the framework and ensured its effectiveness. Climate risks and opportunities are the key factors while making financial considerations especially while making investments in offices, equipment, and renewable energy. Investment in these areas constitutes a substantial share of the company's overall capital investment. Major investments are in green buildings, roof top solar and other energy efficiency initiatives. In FY 2023 TCS has invested ₹3,063 crore in projects to improve environmental and social impacts. These investments, along with other mitigation steps, helped the company reduce its Scope 1 and 2 emissions by 71% from base year 2016. These initiatives also help the company to position itself as a leader in the climate domain contributing to TCS' market value. # C) Describe the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2 degree Celsius or lower scenario # Climate related scenario # Transition scenarios The climate change scenario analysis conducted for TCS takes a multi-level approach to identify climate risk and opportunity hot spots, interdependencies, and interaction with global macro trends. The top-down analysis of the macro environmental trends that will impact the company at global level included a) nature loss and ecological degradation, b) resource scarcity and driving value chain innovation, c) changing customer and workforce preferences, d) the rise of extreme weather, e) increasing regulations, pricing and disclosure of externalities, f) digitalization and prevalence of infectious diseases and g) rising incomes. Detailed analysis was conducted of material climate change transition risks and opportunities across value chain and assessment of interdependencies between climate risks and opportunities including identification of areas of potential magnification and hedge opportunities. The key value drivers analysis assesses climate risks and opportunities across 3 stages of the value chain including a) Supply Chain (input supplies costs, disruption and access to supplies) b) Operations (carbon costs, operating costs, insurance/ damage costs due to disruption of operation) and c) End markets (demand for low carbon services/ products, market share and competition). In the transition scenario, the IEA B2DS approach has been selected as its more conservative scenario. The inputs included IPCC reports, the NDCs, the SDGs and Government of India plan on energy efficiency and solar energy. The assumptions used in the analysis also considered the anticipated growth of TCS over the years and increased energy demand. Changing customer behavior and carbon costs are assessed as a transition risk to TCS with a growing number of jurisdictions at regional and national level planning to implement a carbon tax or emission trading scheme. # Physical climate The climate change scenario analysis conducted for TCS had a multi-level approach to identify climate risk and opportunity hot spots, interdependencies, and interaction with global macro trends. The top-down analysis of the macro environmental trends that will impact the company at global level included a) nature loss and ecological degradation, b) resource scarcity and driving value chain innovation, c) changing customer and workforce preferences, d) the rise of extreme weather, e) increasing regulations, pricing and disclosure of externalities, f) digitalization and prevalence of infectious diseases and g) rising incomes. Detailed analysis was conducted on a) material climate change physical risks and opportunities across value chain, and b) assessment of interdependencies between climate risks and opportunities including identification of areas of potential magnification and hedge opportunities. |
The key value drivers' analysis assesses climate risks and opportunities across 3 stages of the value chain including a) Supply Chain (input supplies costs, disruption and access to supplies) b) Operations (carbon costs, operating costs, insurance/damage costs due to disruption of operation) & c) End Markets (demand for low carbon services/products, market share and competition). The physical risk is assessed using the RCP 8.5 scenario. The RCP 8.5 scenario takes a global warming between 3-4 degrees above pre-industrial levels which is a conservative scenario and helps us understand the worst-case climate impacts on our operations. Inputs for the assessment included IPCC reports, the NDCs, the SDGs and Government of India plan on energy efficiency and solar energy. The assumptions used in the analysis also considered the anticipated growth of TCS over the years and increased energy demand. Few strategies to mitigate physical risks of climate change include: 1. A robust Business Continuity Plan (BCP) to respond to climate events. 2. Investments in climate resilient infrastructure (for cyclone, floods). # Risk Management # A) Describe the organization's processes for identifying and assessing climate related risks # B) Describe the organization's processes for managing climate-related risks Kindly refer to the 'Enterprise Risk Management' section in Management Discussion and Analysis (Pages 95 to 104), which is a part of this Integrated Annual Report. # C) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization's overall risk management # Metrics and Targets # A. Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process. - a) Greenhouse Gas (GHG) Emissions. Absolute Scope 1, Scope 2, and Scope 3; emissions intensity - b) Climate-related Opportunities-. Proportion of revenue, assets, or other business activities aligned with climate-related opportunities. File: AR_TCS_2022_2023.md - c) Remuneration- Proportion of executive management remuneration linked to climate considerations Please refer to the 'Natural Capital' section (Page 24) and BRSR section >> Principle 6 (Pages 168, 169, 170, 175), which is a part of this Integrated Annual Report. Please refer to the BRSR section >> (Pages 152, 155), which is a part of this Integrated Annual Report. Please refer to the Corporate Governance Report >> Remuneration Policy (Page 122), which is a part of this Integrated Annual Report. For executive directors, the variable component i.e., commission is based on the company's performance- which includes sustainability- and their individual performance. 7 TCFD Risk Management A, B and C 8 TCFD Metrics and Targets A, B and C Integrated Annual Report 2022-23 Sustainability Disclosures | 337 # B. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks. Please refer to the 'Natural Capital' section (Page 24) and BRSR section >> Principle 6 (Pages 168, 169, 170, 175), which is a part of this Integrated Annual Report for disclosures on GHG emissions. Please refer to the 'Enterprise Risk Management' section in Management Discussion and Analysis (Pages 95 to 104), which is a part of this Integrated Annual Report for emissions related risks. # C. Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets. Please refer to the 'Natural Capital' section (Page 24, 25), which is a part of this Integrated Annual Report. Integrated Annual Report 2022-23 Sustainability Disclosures | 338 # GRI Content Index TCS' Integrated Annual Report 2022-23, which includes the financial disclosures and the Business Responsibility and Sustainability Report, is aligned with the Global Reporting Initiative (GRI) Standard, UN Sustainable Development Goals (SDG) and TCFD framework. The Report also conforms to the United Nations Global Compact (UNGC) principles and forms the basis of the company's Communication on Progress (CoP) with the UNGC. The following table provides the mapping of disclosures for FY 2023 against the GRI standard (Comprehensive) requirements and TCFD recommendations mapping. TCS is on a continuous journey to advance its' ESG initiatives and reporting and will continue to evaluate and enhance ESG disclosures as the company makes progress. |GRI Standard Disclosure and Description|TCFD Disclosure|Section *|Page No.| |---|---|---|---| |GRI 2: General Disclosures 2021| | | | |1. The organization and its reporting practices| | | | |2-1 Organizational details|* BRSR| |145| |2-2 Entities included in the organization's sustainability reporting|* BRSR| |146, 148| |2-3 Reporting period, frequency and contact point|* BRSR| |145| |2-4 Restatements of information|* BRSR| |146| |2-5 External assurance|* BRSR| |146, 152| |2. |
Activities and workers| | | | |2-6 Activities, value chain and other business relationships|* BRSR| |146| |2-7 Employees|* BRSR| |147| |2-8 Workers who are not employees|* BRSR| |147| |3. Governance| | | | |2-9 Governance structure and composition|* CG|* BRSR|113, 152| |2-10 Nomination and selection of the highest governance body|* CG| |113| |2-11 Chair of the highest governance body|* CG| |114| |2-12 Role of the highest governance body in overseeing the management of impacts|* Governance A & B|* CG|114, 115| |2-13 Delegation of responsibility for managing impacts|* Governance A & B|* BRSR|166| | |* CG| |152| | |* TCFD Disclosures| |333| |2-14 Role of the highest governance body in sustainability reporting|* Governance A & B|* CG|115| |2-15 Conflicts of interest|* CG| |114| |2-17 Collective knowledge of the highest governance body|* BRSR| |153| |2-19 Remuneration policies|* Metrics and Targets A|* CG|122| | |* BRSR| |165| |2-21 Annual total compensation ratio|* BRSR| |165| |4. Strategy, policies and practices| | | | |2-22 Statement on sustainable development strategy|* MDA|* BRSR|86, 152, 8| |2-23 Policy commitments|* BRSR| |151, 153, 166, 182| |2-24 Embedding policy commitments|* BRSR| |151, 165, 166| |2-25 Processes to remediate negative impacts|* BRSR| |149, 157, 160, 166, 179, 181| |2-27 Compliance with laws and regulations|* BRSR| |153, 173| |2-28 Membership associations|* BRSR| |177| |5. |
Stakeholder engagement| | | | |2-29 Approach to stakeholder engagement|* BRSR| |162| |2-30 Collective bargaining agreements|* BRSR| |158| 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 2022-23 Sustainability Disclosures | 339 # GRI Standard Disclosure and Description # GRI 3: Material Topics 2021 # 3-1 Process to determine material topics # 3-2 List of material topics # 3-3 Management of material topics # GRI 200: Economic Performance # GRI 201: Economic Performance 2016 # 201-1 Direct economic value generated and distributed # 201-2 Financial implications and other risks and opportunities due to climate change # 201-3 Defined benefit plan obligations and other retirement plans # GRI 202: Market Presence # 202-1 Ratios of standard entry level wage by gender compared to local minimum wage # GRI 204: Procurement Practices 2016 # 204-1 Proportion of spending on local suppliers # GRI 205: Anti-corruption 2016 # 205-2 Communication and training about anti-corruption policies and procedures # 205-3 Confirmed incidents of corruption and actions taken # GRI 207: Tax 2019 # 207-1 Approach to tax # 207-2 Tax governance, control, and risk management # 207-3 Stakeholder engagement and management of concerns related to tax # GRI 300: Environmental Performance # GRI 302: Energy 2016 # 302-1 Energy consumption within the organization # 302-3 Energy intensity Metrics used to assess climate-related risks and opportunities in line with its strategy and risk management process # GRI 303: Water and Effluents 2018 # 303-1 Interactions with water as a shared resource # 303-2 Management of water discharge-related impacts # 303-3 Water withdrawal # 303-4 Water discharge # 303-5 Water consumption # 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 # 304-2 Significant impacts of activities, products and services on biodiversity # 304-3 Habitats protected or restored # GRI 305: Emissions 2016 # 305-1 Direct (Scope 1) GHG emissions # Annual Report 2022-23 # TCFD Disclosure |Section|Page No.| |---|---| |Sustainability Disclosures: Identification of Material Topics|330| |BRSR|150| |Sustainability Disclosures: Identification of Material Topics|331| |MDA|95, 150| |BRSR|151, 160| |Sustainability Disclosures: Identification of Material Topics|161, 172| |Financial Capital|16| |Risk Management A, B and C| | |MDA|95 to 104| |BRSR|150| |BRSR|156| |BRSR|165| |BRSR|179| |BRSR|153| |BRSR|154| |CG|115| |TC-SI-130a.1|BRSR 168, 173| |TC-SI-130a.1|BRSR 168| |Metrics and Targets A|BRSR 155, 171, 176| |Natural Capital|24| |CG Report|122| |BRSR|169, 172| |BRSR|169| |TC-SI-130a.2|BRSR 168| |TC-SI-130a.2|BRSR 173, 174| |TC-SI-130a.2|BRSR 168| |BRSR|172| |BRSR|176| |BRSR|176| |Metrics and Targets B|BRSR 169| Sustainability Disclosures | 340 # GRI Standard Disclosure and Description |Disclosure|TCFD Disclosure|Section|Page No.| |---|---|---|---| |305-2 Energy indirect (Scope 2) GHG emissions|* Metrics and Targets B|* BRSR|169| |305-3 Other indirect (Scope 3) GHG emissions| |* BRSR|175| |305-4 GHG emissions intensity| |* BRSR|169, 175| |305-5 Reduction of GHG emissions|* TC-SI-130a.3|* BRSR|170| | |* Metrics and Targets B|* Natural Capital|24| |Risks related to GHG Emissions|* Metrics and Targets B|* MDA|95 to 104| |Metrics and targets used to assess and manage relevant climate related risks and opportunities|* Metrics and Targets C|* Natural Capital|24| # GRI 306: Waste 2020 |306-2 Management of significant waste-related impacts|* BRSR|155, 156, 172| |---|---|---| |306-3 Waste generated|* BRSR|171| |306-4 Waste diverted from disposal|* BRSR|171| |306-5 Waste directed to disposal|* BRSR|171| # GRI 308: Supplier Environmental Assessment 2016 |308-1 New suppliers that were screened using environmental criteria|* BRSR|155, 177| |---|---|---| |308-2 Negative environmental impacts in the supply chain and actions taken|* BRSR|177| # GRI 400: Social Dimension # GRI 401: Employment 2016 |401-1 New employee hires and employee turnover|* Human Capital|18|* BRSR|148| |---|---|---|---|---| |401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees| |* BRSR|156| | |401-3 Parental leave| |* BRSR|157| | # GRI 402: Labor/Management Relations 2016 402-1 Minimum notice periods regarding operational changes * MDA 91 # GRI 403: Occupational Health and Safety 2018 |403-1 Occupational health and safety management system|* BRSR|158| |---|---|---| |403-2 Hazard identification, risk assessment, and incident investigation|* BRSR|159, 160| |403-5 Worker training on occupational health and safety|* BRSR|158| |403-6 Promotion of worker health|* BRSR|159| |403-9 Work-related injuries|* BRSR|160, 161| |403-10 Work-related ill health|* BRSR|160, 161| # GRI 404: Training and Education 2016 |404-1 Average hours of training per year per employee|* BRSR| |158|* Human Capital|19| |---|---|---|---|---|---| |404-3 Details of performance and career development reviews of employees|* BRSR| |158| | | # GRI 405: Diversity and Equal Opportunity 2016 |405-1 Diversity of governance bodies and employees|* Human Capital|18|* BRSR|147| |---|---|---|---|---| |405-2 Ratio of basic salary and remuneration |
of women to men|* BRSR|165| | | # GRI 406: Non-discrimination 2016 406-1 Incidents of discrimination and corrective actions taken * BRSR 166 # GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs * BRSR 172, 179 # GRI 414: Supplier Social Assessment 2016 414-2 Negative social impacts in the supply chain and actions taken * BRSR 162 # Annual Report 2022-23 Sustainability Disclosures | 341 NO_CONTENT_HERE # TCS was ranked amongst the second most Valuable IT Services Brand # Brand Finance Awards # TCS Summit North America 2022 # Awards & Recognition # 2027 |top|top|FutureBrand|KANTAR BRANDZ| |---|---|---|---| |ENAOYER 2023|@NALOYER 2023|Brand Finances|GOLD| |THE STEVIE AWARDS|FOR GREAT EMPLOYERS|ToP 2|MOST VALUADLE SERVICES BRAND| |Forbes|top|mea|digital Impact| |STEMIES|TCDP|2022|26| |MANAGEMENT|COMSULTIHG FIRIS|202|MARKETING EXCELLENCE| |2022 AWARDS|WINNER|IURUN| | |LinkedIn|HURUN burgundy|bt500|#1MFUSTCMoR| |Uk DuIA MiewITechket|INDIA|2021/22|EUROPE| Sed ut prespiciatis unde omnis iste natus error sit voluptatem accusantium doloremque totam rem aperiam, eaque ipsa quae ab illo inventore et quasi architecto. Get Started YOUR LOGO 50civic The Drum 2022 FTSEAGood START UP # 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, cyber attacks or security breaches, 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 File: AR_TCS_2023_2024.md # TATA # TCS/SE/38/2024-25 May 8, 2024 National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (East) Mumbai - 400051 P. J. Towers, Dalal Street, Mumbai - 400001 Symbol - TCS Scrip Code No. 532540 Dear Sirs, # Sub: Annual General Meeting Notice, Integrated Annual Report 2023-24 The twenty-nineth Annual General Meeting ("AGM") of the Company will be held on Friday, May 31, 2024 at 3.00 p.m. IST through Video Conferencing ("VC")/ Other Audio Visual Means ("OAVM"). 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 2023-24 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. Link Intime India Private Limited TATA CONSULTANCY SERVICES TATA Consultancy Services Limited 9th Floor Nirmal Building Nariman Point Mumbai 400 021 Tel. 91 22 6778 9595 Fax 91 22 6778 9660 e-mail [email protected] website www.tcs.com Registered Office 9th Floor Nirmal Building Nariman Point Mumbai 400 021. Corporate identification No. |
(CIN): L22210MH1995PLC084781 # Integrated Annual Report | 2023-2024 # Backdrop: TCS Gitanjali Park Campus, Kolkata, India 20 years of creating value for you 20 years of value creation Since our IPO in 2004 (2004 - 2024) # Integrated Annual Report # 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 56 years. Its consulting-led, cognitive powered, portfolio of business, technology and engineering services and solutions is delivered through its unique Location Independent Agile™ delivery model, recognized as a benchmark of excellence in software development. A part of the Tata group, India's largest multinational business group, TCS has over 601,000 of the world's best-trained consultants in 54 countries. The company generated consolidated revenues of US$29.1 billion in the fiscal year ended March 31, 2024, and is listed on the BSE and the NSE in India. TCS' proactive stance on climate change and award-winning work with communities across the world have earned it a place in leading sustainability indices such as the MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit www.tcs.com # Transforming Industries The TCS' FY 2023-24 (FY 2024) Integrated Annual Report delves into the capability of technological innovations and their impact on business models. Technology is increasingly an enabler in what enterprises can do to adapt and thrive in this new era. Businesses are relying on technologies to help improve their competitive advantage, drive strategy and growth. From Banking, Retail and Manufacturing to Healthcare and Utilities, technology is Transforming Industries in the way they operate, and enhance their customer and employee experience. TCS, with its full services capability and industry specific contextual knowledge, has always remained relevant to clients and stayed close to them in the past technology cycles. The synergistic relationship between Cloud and AI/GenAI technology, is ushering in a significant shift in how industries approach innovation and efficiency. With over half of the workforce trained in AI/ML and Gen AI, TCS will continue to be clients' trusted transformation partner. # Recent Annual Report Themes |FY 2023|FY 2022|FY 2021|FY 2020|FY 2019| |---|---|---|---|---| |Innovating for Greater Futures|Building on Belief|Purpose-driven.|Resilient. Adaptable|Growth and Transformation with Business 4.0TM| # Content |About TCS|02| |---|---| |Board of Directors|04| |Management Team|05| |Letter from the Chairman|06| |Letter from the CEO|08| |The Year Gone by|11| |Integrated Reporting Framework| | |TCS Integrated Business Model|15| |Financial Capital|16| |Human Capital|18| |Intellectual Capital|20| |Social Capital|22| |Natural Capital|24| |Consolidated Financial Statements| | |Independent Auditor's Report|173| |Consolidated Balance Sheet|180| |Consolidated Statement of Profit and Loss|181| |Consolidated Statement of Changes in Equity|182| |Consolidated Statement of Cash Flows|184| |Notes forming part of the Consolidated Financial Statements|186| |Standalone Financial Statements| | |Independent Auditor's Report|241| |Standalone Balance Sheet|250| |Standalone Statement of Profit and Loss|251| |Standalone Statement of Changes in Equity|252| |Standalone Statement of Cash Flows|254| |Notes forming part of the Standalone Financial Statements|256| |Statement under section 129 of the Companies Act, 2013 relating to Subsidiary Companies|304| |Glossary|307| |Sustainability Disclosures| | |Stakeholder Engagement and Identification of Material Topics|315| |Climate Related Disclosures|318| |GRI Content Index|325| |Statutory Section| | |Notice|35| |Directors' Report|55| |Management Discussion and Analysis|69| |Awards and Accolades|91| |Corporate Governance Report|93| |Corporate Social Responsibility|117| |Business Responsibility and Sustainability Report|127| # Integrated Annual Report 2023-24 # Board of Directors |Non-Independent, Non Executive|Independent, Non Executive| | | | |---|---|---|---|---| |N Chandrasekaran|Aarthi Subramanian|O P Bhatt|Dr Pradeep Kumar Khosla|Hanne Sorensen| |C C M N|M N|C M M I|C M I|M M I| |Non-Independent, Executive| | | | | |K Krithivasan|N G Subramaniam|Keki Al-Noor Ramji| | | |CEO & MD|COO & ED|M M M NE|M M I| | Average Age (years): 57 Average Tenure on the Board (years): 0 Board Independence (%): 56% Average Tenure of Independent Directors on the Board (years): 0 |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 Integrated Annual Report 2023-24 # Management Team # Management |K Krithivasan|Chief Executive Officer and Managing Director| |---|---| |N G Subramaniam|Chief Operating Officer and Executive Director| |Samir Seksaria|Chief Financial Officer| |Milind Lakkad|Chief Human Resources Officer| |Dr. |
Harrick Vin|Chief Technology Officer| |Abhinav Kumar|Chief Marketing Officer| |Madhav Anchan|General Counsel Legal| |Pradeep Manohar Gaitonde|Company Secretary| # Business Heads # Industries |Suseel Vasudevan|Banking Financial Services and Insurance| |---|---| |Shankar Narayanan|Banking Financial Services and Insurance| |Debashis Ghosh|Life Sciences, Healthcare, Energy, Resources and Utilities| |Krishnan Ramanujam|Consumer Business Group| |Anupam Singhal|Manufacturing| |V Rajanna|Technology, Software and Services| |Akhilesh Tiwari|Communications, Media and Information Services| # Markets |Suresh Muthuswami|Chairman - TCS North America| |---|---| |Amit Bajaj|North America| |Amit Kapur|UK & Ireland| |Sapthagiri Chapalapalli|Europe| |Girish Ramachandran|Growth Markets| # Services |Siva Ganesan|AI.Cloud| |---|---| |Vikram Karakoti|Enterprise Solutions| |Ganesa Subramanian Vaikuntam|Cyber Security| |Ashok Pai|Enterprise Cognitive Business Operations| |Regu Ayyaswamy|IOT & Digital Engineering| |Kamal Bhadada|TCS Interactive| # Integrated Annual Report 2023-24 # Letter from the Chairman Dear Shareholder, In FY 2024, your company has continued to deliver strong performance. I am pleased to share with you that your company has crossed annual revenues of ₹240,893 crore, a growth of 6.8%, over the previous year. With relentless focus on operational excellence, this growth has come at an industry leading operating margin of 24.6%*, an increase from 24.1% last year. The order book for FY 2024 came at an all-time high of US$ 42.7 billion supported by strong client relationships and engagement. Client metrics continue to exhibit healthy progress with strong client additions. Employee retention continues to be at benchmark levels in the industry. TCS has been selected as a Top Employer of Choice in 32 countries. TCS has retained its ranking as the second most valuable global IT services brand, valued at US$19.2 billion, an increase of US$2 billion from last year. After two years of recessionary fears, persistently high inflation, and unprecedented monetary tightening, the global macro-outlook looks relatively better now with improving growth, disinflation, and monetary easing in sight. Across industries globally, there are multiple mega trends that are shaping priorities of businesses: AI, New Energy, Supply Chain and Talent. - GenAI technologies will impact almost every sector and country going forward. Enterprises have already invested in cloud, data infrastructure and large processing power which will aid AI/ GenAI. GenAI will not only improve productivity, but also create impact we hitherto have not seen or imagined. The global environment around the world continues to go through significant shifts. Post the pandemic, which resulted in supply chain shocks, there was an economic slowdown especially in developed markets. While initial signs of stability began to emerge, the military conflicts have further intensified this year and continue to impact the global supply chains. - Global energy transition is accelerating, and businesses are making clear commitments towards a sustainable future. The energy requirement of our fast-changing world is enormous. Key is to lower the cost of energy while also transitioning to renewables. This transition requires large investment in technology, electric mobility, renewable power, hydrogen and sustainable fuel. *Excludes settlement of legal claim Integrated Annual Report 2023-24 # Letter from the Chairman * Geo-political challenges are continuing to alter established supply chains and companies are rebalancing their supply chains to address both resilience and efficiency. New global supply chain ecosystems are being created, with India playing an important role in advanced manufacturing. * Advanced manufacturing, new technologies like AI, new energy, data and business models are changing the future of work and are compelling new skillsets to be built for the future. * Secure networks have become a key necessity as data is the foundation for businesses of today. These networks power everything from predictive analytics and AI to personalized customer experiences. As value of data increases, along with concerns of privacy and protection, it has rightly become a focal point of security for all businesses. The key question is what these disruptions mean to the IT services industry and how your company is preparing for these? As enterprises globally prepare to respond to these mega trends, we see multiple opportunities for your company. Every industry is embracing these trends and their business is being shaped for the future. For example: * The deployment of AI and GenAI will significantly help financial institutions in both driving efficiency as well as target new customers and serve customers in a very personalized manner. For example, Insurance claims will be processed in a matter of minutes, lending and disbursements will become much faster. * Adoption of new energy solutions and AI technology is driving the future of automobiles. It is not only driving reduction of emissions but also providing a new level of customer experience. |
* AI is accelerating drug development by screening millions of compounds, predicting interactions and generating new candidates for testing. * Connected medical devices together with AI and GenAI will transform Healthcare in a significant way. It will enhance productivity, enable remote care and help overcome shortage of skilled resources. * In Advanced manufacturing, an AI-first approach will drive new benchmarks in productivity, efficiency and sustainability. These transitions will require substantial investment in technology across industry sectors. Your company is making significant investments and building capabilities to partner with customers during this phase of rapid technological shifts: * In FY 2024, TCS has consolidated AI and Cloud expertise with the creation of the AI.Cloud unit. In addition, each of the business groups are developing domain-specific AI/GenAI offerings relevant to the industry value chain. Over 300,000 employees have been upskilled on GenAI technologies in FY 2024. TCS' products and services are also being enhanced with AI capabilities. For example, TCS BaNCSTM is enriching its product portfolio with integrated AI/ML and GenAI capabilities; AI is also being embedded in Cybersecurity services to enable predictive capabilities. * To partner with customers on their energy transition agenda, TCS is investing in research on green hydrogen, biofuels; developing digital platforms to help customers reduce Scope 1/2/3 emissions. Our proprietary ESG framework enables enterprises to build transparency into operations and simplifies compliance reporting. * TCS is pioneering the engineering of the 5G/6G communication stacks using open standards. Two state-of-the-art labs for future ready communication infrastructure and interoperability have been setup at Bengaluru and Gurugram. Investments are being made in multiple niche technologies such as 5G SA Core, O-RAN radios, to build these solutions indigenously. * Your company continues to invest in upskilling its talent base of over 600,000 employees. Employees are actively leveraging experiential and personalized learning on a wide range of emerging technologies, clocking over 51 million learning hours in FY 2024. TCS continues to build strong talent supply chains with deep partnerships with leading educational institutions, shaping the curriculum for new skill needs for the future. On behalf of the Board of Directors of the company, I want to thank you for your continued trust, confidence, and support. Warm regards, N Chandrasekaran Chairman * Telecom industry globally is upgrading communication infrastructure to 5G/6G. These high speed, low latency networks, along with edge compute and AI will become the backbone of businesses in future. Integrated Annual Report 2023-24 # Letter from the CEO Dear Stakeholder, It is my privilege to be writing to you from this desk as we near 20 years to our listing since August 25, 2004. Over the last two decades, your company's Revenue and Net Profits have grown at a compounded annual growth rate of over 18% each. It has been almost a full year since my transition as CEO, and I am happy to report that it has been a very stable and seamless experience for all our stakeholders. During this period, we refocused on our industry and technology expertise, emphasized and refreshed the core values that define who we are as a company, and doubled down on customer centricity and employee empathy. We had a strong finish to the fiscal year FY 2024, with revenue for the year at ₹240,893 crore. This is, a growth of 6.8% over the previous year (3.4% in constant currency). Demand for our services showed remarkable resilience as macroeconomic uncertainties and geopolitical volatilities continued in major markets through the year. This growth came with an industry leading operating margin of 24.6%. More importantly we exited the year with a quarterly operating margin of 26% in Q4, demonstrating our commitment to the margin band of 26% to 28%. Our Net Margin was at 19.3%. The Earnings Per Share was at ₹127.742, a growth of 10.9% over the prior year. Among the Business Segments, Manufacturing grew 10.6%, Life Sciences and Healthcare grew 8.7%, Banking, Financial Services and Insurance grew 5.6%, Consumer Business grew 4.9%, Communication, Media and Technology grew 4.6%, while Others grew 14.5% (YoY in reported currency). Among geographies, growth was led by emerging markets: Latin America grew 21.1%, India grew 20.3%, Middle East & Africa grew 14.8% while Asia Pacific grew 4.0%. The UK grew 17.7%, Continental Europe grew 6.5%. North America grew 2.3% (YoY in reported currency). |
We are seeing strong deal momentum across markets resulting in double-digit growth in our TCV of US$ 42.7 billion, which reflects our deepening partnership with our clients and gives us optimism for the medium to long term growth outlook. In keeping with our capital allocation policy of returning substantial free cashflow to shareholders, the Board has recommended a final dividend of ₹28 per share, bringing the total dividend for the year to ₹73 per share. The company also successfully completed its fifth buyback program, distributing ₹17,000 crore to shareholders. For the full year, the company's shareholder payout was ₹47,445 crore, which will be our largest payout to date. Our average shareholder payout has been more than 100% during the last 5 years. # Letter from the CEO # Business Overview Established in 1968, our company has been a pioneer in the IT industry, across various technology cycles. At each of these defining moments, we refocused our investments, reinvented ourselves, and helped clients transform their businesses to stay ahead of the technology curve. During FY 2024, customers continued reprioritization of projects in favor of those which are considered business-critical and where ROI realization is likely faster. We continue to see pressure on customers' discretionary spending. The recently won deals are converting into revenue as planned, the ongoing engagements started during the pandemic are being re-examined for the incremental value generated. While transformation remains a key ask, customers are expecting the same to be funded through savings from operations. Hence, the key engagement themes we saw during the year were around cost optimization and cloud transformation. Demand was led by vendor consolidation, cloud migration and transformation, customer and employee experience enhancement, operating model transformation, business process optimization, supply chain initiatives, sustainability, AI enablement i.e. creating a cloud and data foundation for AI, and early-stage AI-infused transformational engagements. Today, clients are seeing cloud as a strategy for business transformation and growth. The shift to cloud-native products and platforms is being fast-tracked, to achieve increased collaboration, security, scalability and efficiency. Hybrid, multi-cloud platforms are now becoming mainstream. Cloud adoption is a catalyst for innovation, and a strategy for business and growth itself. It provides the unifying digital fabric that forms the foundation for a connected future--one that continues to unfold with each technological advancement, including generative AI (GenAI). We launched several initiatives this year to inculcate a strong engineering culture among our employees and build deeper skills in market relevant technologies like Cloud, AI, Cyber Security and more. TCS is collaborating with all the hyperscalers and entering new partnerships with other important players in the AI ecosystem to upskill at scale and build AI computing infrastructure to develop AI solutions for our customers. The rise of GenAI has been catching customers' attention, and it promises a leap in productivity and accelerates the creation of new products and services. Although still in the early stages of adoption, the use of GenAI is expected to transform every industry. Many of our clients who are early adopters have begun experimentation and exploration on various use cases of GenAI, with our help. # The Innovation Edge Exploring innovative uses of GenAI continues to be a key focus area. We are helping our customers to use AI to: 1. Assist, leveraging AI to supplement tacit knowledge with contextual knowledge to boost work effectiveness 2. Augment, accelerating elite performance through collaborative intelligence, where humans and machines complement and magnify each other's talents 3. Transform, leaping to a knowledge-driven superstructure with fast, consistent, and high-quality decision output to deliver new ways of working and the full realization of enterprise-wide AI We have created one of the largest AI / ML and GenAI talent pools in the industry. We have doubled down on partnerships in areas such as AI, cloud, quantum computing and cybersecurity. These early investments have given TCS a head start in being a partner in our customers' technology adoption journey. With our contextual knowledge and domain expertise, engineering DNA and intellectual capital, we have been the preferred partner for many customers in their strategic initiatives. This year, we signed several deals that are industry-defining in nature. We have included narratives about the work we did for BSNL - building an indigenous network, a true nation building project and how we built an advanced post trading platform for SIX in this Integrated Annual Report. Our continued investments in Research and Innovation, and in building intellectual property, have further strengthened our transformational credentials. |
Many of our earlier R&I programs have matured into successful platforms and solutions which performed very well this year and helped differentiate our growth. We leveraged TCS HOBSTM to transform Celcom Axiata Berhad's core business support systems. For PostNord, TCS TwinXTM is helping increase sorter capacity, remove bottlenecks, and improve the collection and distribution sort plan. Similarly, TCS OmnistoreTM is helping European home improvement company Kingfisher orchestrate a faster, smoother, and seamless checkout experience. # Building a Skilled Workforce Our approach to talent is strategic -- we consider our employees as key stakeholders in our growth. Our ability to cycle through different technology and business model changes, continuously embrace new knowledge and stay relevant, defines us and gives us a significant edge over our competitors. We have a strength of 601,546 employees, and our LTM attrition in IT services was 12.5%, down by 760 bps over the previous year. Our workforce continued to be very diverse, with over 152 nationalities represented and with women making up 35.6% of the employee base. Integrated Annual Report 2023-24 # Letter from the CEO We launched several initiatives this year to inculcate a strong engineering culture among our employees and build deeper skills in market relevant technologies like Cloud, AI, Cyber Security and more. TCS is collaborating with all the hyperscalers and entering new partnerships with other important players in the AI ecosystem to upskill at scale and build AI computing infrastructure to develop AI solutions for our customers. In FY 2024, TCSers logged 51 million learning hours, and acquired nearly 5 million competencies. A culture of lifelong learning and innovation, by closely linking learning with careers and rewards, has placed us as the Global Top Employer for the 9th consecutive year, across 32 countries -- placing us as one in only 16 organizations worldwide to achieve this status. # Embracing Aalingana We have fully adopted Project Aalingana, the Tata group's sustainability roadmap and the aim is to be net zero by 2045, integrating sustainability into business strategy and concentrating on three interlinked pillars of the project, i.e., promoting the decarbonization of our company and value chains; utilizing a systematic, circular economy approach to reduce resource usage and waste; and protecting and regenerating the environment. We continue to make good progress in our net zero journey, on the environmental front. TCS had set a target to reduce its absolute Scope 1 and Scope 2 emissions by 70% by 2025 and become net zero by 2030. We are well ahead of our initial Scope 1 and 2 targets and have achieved a reduction of 80% in Scope 1 and 2 emissions in FY 2024 over a baseline of 2016. We are doing this by increasing use of renewable sources of energy and improving energy efficiency. The company's strategy for reducing emissions includes addition of more green buildings to the company's real estate portfolio, reduction of IT system power usage, responsible sourcing, and the use of TCS Clever EnergyTM, which leverages IoT, machine learning and AI to optimize energy consumption across campuses. TCS is not only improving its own sustainability but also helping clients develop and implement their sustainability strategies and improve outcomes. We have built a comprehensive suite of over 200 offerings in sustainability services and solutions across different industry verticals. These solutions help enterprises decarbonize their operations and create net-zero pathways, addressing biodiversity loss and growing inequity. We help customers embed circularity in their products and services, by helping design agile, resilient, and sustainable supply chains and promoting reuse, recapture, and recycling. # Passion for Our Purpose TCS is meaningfully connecting marginalized groups, including women and youth, to economic opportunities. We continue to work with communities across the world, pursuing our long-standing commitment to programs in the areas of education, literacy for livelihood, skilling for employment, and digital entrepreneurship; while exploring areas of healthcare, digital inclusion, water, climate and sustainability. Through clearly defined focus areas and strategic programs, our work has impacted the lives of over 7.1 million people. We are working with public and social sector organizations to help close the literacy gap among the most marginalized adults, helping them access government entitlements and improving access to livelihood. We are empowering students in government schools with 21st century skills, introducing them to careers of the future, while empowering and building capacity of the teachers and education system. By working with other private sector organizations, we are helping marginalized youth transition from college to meaningful careers across a variety of sectors. |
Our digital entrepreneurs are connecting disadvantaged communities in rural and aspirational districts across India with front line services in social welfare, banking, finance, insurance, health, e-commerce, logistics and more. Our employee volunteer program called HOPE (Hours of Purpose by Employees) resulted in over 6.7 million hours dedicated to purpose projects across dimensions of biodiversity, mental health, climate action, circularity, literacy, education, skilling, mentoring, conservation and more covering the 17 UN Sustainable Development Goals. # Greater Governance Governance at TCS encompasses ensuring ethical and transparent business conduct, addressing sustainability risks and opportunities and aligning robust disclosure requirements under the aegis of the board. At TCS, the Tata Code of Conduct serves as a guide for all employee behavior. File: AR_TCS_2023_2024.md TCS consciously embeds the highest standards of governance in its operations. We have a holistic compliance framework and an integrated governance structure that encourages a strong commitment to global Environment, Social and Governance (ESG) disclosure standards for promoting transparency and accountability. As part of the Tata Group, we have long recognized the ESG stewardship as core to our purpose. We have a proud legacy of pioneering positive change, not just within the industry but in the communities where we operate as well, and our commitment remains steadfast. # Looking Ahead Our all-time high order book, continued deal flow and pipeline velocity give us confidence in our business momentum. Looking forward, we see greater opportunities ahead, as businesses become more technology-intensive and depend on technology to drive competitive differentiation and transform their industries. Our integrated business model which drives value creation for all our stakeholders, will continue to help us benefit from each new wave of technology change, and be a force multiplier for our growth and leadership in years to come. We thank you for your continued support in our journey ahead. Best regards, K Krithivasan Chief Executive Officer and Managing Director Integrated Annual Report 2023-24 # The Year Gone By Announced a 15-year expansion of its partnership with Aviva, the UK's leading insurance, wealth and retirement provider, to transform Aviva's UK life business and enhance customer experience leveraging the TCS BaNCSTM platform. As part of this, the end-to-end policy administration and servicing will expand to cover over 5.5 million policies. Announced a final dividend of ₹28 per share, taking the total dividend for the year to ₹73 per share. The company also completed its fifth successful buyback returning ₹17,000 crore to shareholders, wherein the buyback process was completed in record time of 63 days. The total shareholder payout for the year was ₹47,445 crore. Recognized as a Global Top Employer by the Top Employers Institute for the ninth consecutive year, for TCS' pioneering employee engagement and talent development initiatives. TCS was also named a top employer in 32 countries and regions, including Europe, the UK, the Middle East, North America, Latin America, and South-East Asia. Ranked the #1 IT service provider for customer satisfaction in Europe in an independent survey of over 2,000 CXOs of the continent's top IT spenders by Whitelane Research, for the 11th consecutive time. The study also revealed that TCS demonstrated an 'exceptional' level of performance across five key IT domains: Digital Transformation, Workplace Services, Security Services, Application Services and Cloud Services, where TCS scored more than 80%, and maintained a healthy lead compared to industry average scores. Launched an AI Experience Zone to foster hands-on proficiency in AI and GenAI for its employees. Within this immersive environment, TCS employees can explore, engage, and experiment with cutting-edge GenAI-powered applications, creating innovative use cases, with all necessary guardrails and while upholding Responsible AI principles. # FORTUNE Featured on FORTUNE® Magazine's 2024 list of the World's Most Admired Companies, also featured in the Forbes Global 2000 Rankings of the largest companies in the world. Ranked the second most valuable IT services brand (brand value up 11.5% to US$19.2 billion) by Brand Finance, with the incremental US$2 billion growth being the highest absolute growth posted among the Top 25 leading IT firms in the world. Former Executive Director, Phiroz Vandrevala, passed away in January 2024. He was a key part of the leadership team and made many significant contributions, such as being part of the efforts to take TCS public in its IPO in 2004, opening-up new markets, mentoring a new generation of TCSers, and in building a strong foundation for the company in the life and pensions industry. |
Enabled Europe's most modern post-trade platform with Euroclear Finland, the national central securities depository of Finland, to integrate its core platform with the European securities settlement engine. This transformation program ensures easier cross-border settlements for investors in Finnish securities, attract more investment into the country, improve access to capital for Finnish issuers and also reduce cross-border settlement risks and costs for investors. Launched TCS Pace Port™ London, the company's sixth global research and co-innovation hub, which is set to become a dynamic center for cutting-edge technology research and development in the region. The Pace Port will focus on innovation across a cross-section of industries, government priorities and critical national infrastructure while creating an ecosystem of experiences. Integrated Annual Report 2023-24 # The Year Gone By Sponsored 13 running events through the year, including the TCS New York City Marathon, TCS Amsterdam Marathon, TCS London Marathon, TCS Toronto Waterfront Marathon and TCS Lidingöloppet, where total distance covered by the runners crossed more than 80 million miles. Partnered with Macquarie University to launch the TCS GoZero Hub, a research and innovation center to guide Australian organizations in their journeys towards net zero carbon emissions. Aligning with the central themes of COP28, this hub will focus on five core themes - energy transition, carbon management, nature positive future, circular economy and sustainable waste management, and climate adaptation and resilience - and how to limit and prepare for future climate change. The TCS GoZero Hub will also support education pathways, providing relevant skills and knowledge to prepare students for successful, future-focused careers. # TCS New York City Marathon # TCS London Marathon Professor Dan Johnson, Pro Vice-Chancellor - Research, Innovation and Enterprise, Macquarie University; K. Krithivasan, CEO & MD, TCS; and Girish Ramachandran, President, TCS Growth Markets at the launch of the TCS GoZero Hub in Sydney. # TCS Toronto Waterfront Marathon Paid tribute to the passing away of Mr. Y P Sahni, one of the members of the original founding team at TCS, who laid the foundations of the company and served as the President till his retirement in 1996. Selected by ASX, Australia's primary securities exchange to provide a next generation clearing and settlement platform to service the Australian market. TCS will leverage its flagship product TCS BaNCS for cash equities clearing and settlement. Signed a multi-year partnership with ASDA in a divestiture and digital transformation deal, to help implement a new organization-wide IT operating model, following its divestiture from Walmart. The strategic partnership will leverage TCS' cloud, AI, and security solutions to help ASDA deliver the divestiture smoothly, on-time and securely, in addition to further enabling ASDA in enhancing its customer experience and innovation capabilities to help increase their market share and retain price leadership. Partnered with The Munch Museum in Oslo, to create immersive and interactive drawing experiences for local visitors and global audiences. Scientists from TCS Research will leverage their expertise in AI and Machine Learning to bring Edvard Munch's artworks and creative process to life through the power of digital innovation. TCS will also provide IT consultancy, collaborative workshops, and talent exchanges to help create immersive museum experiences that showcase the future of art. Integrated Annual Report 2023-24 # The Year Gone By Partnered with SIX, the operator of the Swiss and Spanish financial market infrastructures, to transform its post trade market infrastructure, which offers greater flexibility, security, and ease of maintenance and its modern, cloud-ready architecture can also integrate more easily with digital ecosystems, opening-up possibilities of innovative new products and services. The program is more scalable and currently processes more than 4 million transactions per day, covering more than 60 global markets. The signing of the Swiss Securities Clearing Corporation (SECOM) deal in 1989, marked TCS' entry on the global stage, competing with a select set of large consulting firms for executing large, complex programs involving deep domain expertise. SIX' mission critical core platform was originally built by TCS, and was one of the world's first online real-time settlement systems. Selected by BSNL, state-owned telecom operator of Government of India, to roll out a modern 4G/5G mobile communication infrastructure across India covering 100K telecom sites, as part of its efforts to build indigenous telecom technology and local manufacturing of the telecom gear. Choosen by British Council, the UK's international organization for educational opportunities and cultural relations, to transform its professional services function that includes Finance, Procurement, Human Resources and Digital & Technology. |
TCS will leverage its contextual knowledge, deep domain expertise and proprietary platforms to help develop more innovative and user-friendly services. The partnership will also enable the British Council to focus on improving the quality and efficiency of services, ultimately leading to an enhanced customer experience. Partnered with JLR, a large UK based multinational automobile company, to accelerate digital transformation across its business. TCS will deliver a broad range of services spanning application development & maintenance, enterprise infrastructure management, cloud migration, cybersecurity, and data services. TCS will help JLR transform to a leaner and scalable operating model with a future-ready digital core, by leveraging new technologies to transform IT operations and adopting new ways of working. # GeM Selected as a strategic partner by the Government of India to transform the Government e-Marketplace (GeM) platform, into a world-class platform. The project will enable growth and scale, improve inclusivity for MSME enterprises, enhance data analytics for improved supply-chain operations and provide enriched user experience through innovation and domain expertise of TCS. Integrated Annual Report 2023-24 # The Year Gone By Partnered with Dassault Systèmes through its Living Heart Project that unites an ecosystem of cardiovascular researchers, educators, medical device developers, regulatory agencies including US FDA, and practicing cardiologists, to develop and validate realistic digital simulations of the human heart. The TCS Bio Digital Twin is a biophysics-based high-fidelity computational model developed by TCS' researchers, to enable investigation of the function of a particular human organ remotely and non-invasively. # Imagine the Digital Twin Difference Imagine the difference it might make to simulate heart going through elevated stress. * Created the first-ever digital heart of long-distance runner, two-time Olympian, and Boston Marathon champion Des Linden. The twin will help see, measure, and monitor the heart going through significant stress--and predict with high accuracy how it will perform, to transform how the athlete trains. At the 2023 TCS New York City Marathon Expo at the Javits Center in New York City, two-time Olympic marathoner Des Linden (right) examines a digital twin of her heart being developed by Tata Consultancy Services, next to Dr. Srinivasan Jayaramen, Principal Scientist at TCS. TCS is developing a digital twin version of her heart to showcase how digital twin technology is set to transform how elite athletes train, compete, and manage their health while demonstrating the power and potential of personalized health and wellness. (Photo credit: Joe Hale) Selected by Nest, UK's largest workplace pension scheme, to digitally transform its scheme administration services with a future-ready, digitally enabled, omnichannel platform powered by TCS BaNCSTM. TCS will leverage the latest technologies and data analytics to deliver enhanced, personalized, and self-directed experiences to members. This will enable Nest's 12 million members and 1 million employers to access the right information at the right time, in the way that suits them best. Awarded a 10-year contract by the UK's Department for Education (DfE) to manage the scheme administration services and further enhance customer experiences for the Teachers' Pension Scheme in England and Wales. TCS' future-ready, digitally enabled, omnichannel platform, powered by TCS BaNCSTM, will enable accurate administration of pension records, payment of benefits, effective scheme finance management, proactive member engagement and easy access to information. Engaged by Standard Life International DAC, a wholly owned subsidiary of the Phoenix Group, to transform its operating model and enhance the customer experience for its policyholders in Europe, using the TCS Digital Platform for Life and Pensions, powered by TCS BaNCS. TCS will set up a customer operations center in Germany, and a future-ready Life and Pensions Digital Platform for Germany and Austria. As part of the transformation, TCS will create comprehensive, omnichannel, journey-based digital experiences for policyholders and advisors. Integrated Annual Report 2023-24 # TCS Integrated Business Model # Integrated Five Capitals Business Model Value Creation using the | | | |Financial capital|Sources of funds from business activities| | |---|---|---|---|---|---| |Natural Capital|Non-renewable Resources| | | | | |Renewable and| | | | | | Stakeholder Operations Payout, Reserves Research & Innovation Products & Platforms Services & Solutions Sales, Project Management, Delivery, Quality Management Customer Goodwill/Brand Value/CSR/Taxes Talent Acquisition Talent Engagement Talent Development Contextual Knowledge # Value CUSTOMER ENGAGEMENT Integrated Annual Report 2023-24 # Financial Capital Issue Price on 25th Aug 2004: ₹850 TCS' longevity is a 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 - Superior Return Ratios - Sustained long term cashflow - Consistently high shareholder returns # TCS Value Creation and Distribution | |FY 2023|FY 2024|% of FY 2024 Revenue|Y-o-Y Growth (%)| |---|---|---|---|---| |Revenue from operations|225,458|240,893|100.0|6.8| |Employee cost|127,522|140,131|58.2|9.9| |Other cost of operations *|43,699|41,451|17.2|(5.1)| |R&D and innovation expense|2,500|2,751|1.1|10.0| |Community Investments|866|953|0.4|10.0| |Tax expense *|14,604|16,262|6.8|11.4| |Shareholder payout including proposed final dividend|42,079|47,445|19.7|12.8| * Excludes settlement of legal claim in FY 2024 # Absolute Share Price Return (20 Years of Listing 2004-2024) 40003500300025002000150010005000 Baseline2 = 100 Closing Price as on 31st Mar 2024: ₹3,884 Aug 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 TCS 14 15 16 17 18 19 20 21 22 23 24 BSE IT 3 Times 1:1 Bonus Share Buyback# Dividends paid # 1 GRI 201-1 2 Adjusted for Bonus shares # From listing till Jan'2024, not considered while calculating share price return # Financial Capital # Revenue Trend |CAGR 10.5%| | |Operating Profit Trend| | | | | | |---|---|---|---|---|---|---|---|---| | | | | |25.9%|25.3%| | | | | | | |24.6%| | |24.1%| | | | | | |24.6%| | | |86.19|156,949| |89.27|164,177| | | | | | | | |191,754|103.62| | | | | | | | |225,458|115.19| | | | | | | | # FY 2020 2021 2022 2023 2024 # Operating Profit (₹ crore) 240,893 127.74 # Earnings per share |CAGR 9.0%| | |OCF and Cash Conversion| | | | | |---|---|---|---|---|---|---|---| | | | | |116.2%|100.1%| | | | | | | | |104.2%|99.6%| | |96.8%|38,580|32,369| | | | | | |31,895|42,481|38,802| | | | | | # FY 2020 2021* 2022 2023 2024 # Operating Cash Flow (OCF) (₹ crore) 39,949 (Amount in ₹) 48,453 # OCF to Net Profit Ratio 38,010 54,237 41,965 # Cash Usage for the last 20 years # # Shareholder Payouts 42,079 100%+ 45,097 59,311 101.5% # Average Payout 47,445# Shareholder Distribution 77.5% over last 5 years # Invested Funds |11.2%|Capex|4|10.1%| |---|---|---|---| | |M&A|1.2%| | # FY 2020 2021 2022 2023 2024 # Shareholder Payout (including Dividend, Special Dividend, Buyback and taxes) Shareholder Payout ratio # # includes proposed final dividend # * Excludes provision (in FY 2021) and settlement (in FY 2024) of legal claim # Integrated Annual Report 2023-24 # 18 Human Capital # Best in Class Talent Management Workforce |12.5%|Talent Retention| |---|---| |601,546|Globally distributed, highly localized attrition in IT services| |LTM|Revert to normal range in FY 2024| # Talent Diversity and Inclusion Rising up the ranks % Women improved at mid- and senior levels over last 5 years |152|Nationalities| |---|---| |~214,000+|Women| |35.6% of workforce|44.0%| |58%+ Increase in senior women executives over last 5 years|41.6%| |797|Unique patents filed by women| # TCS Employees by Region, Age and Gender |India|North America|United Kingdom| |---|---|---| |>50 yrs|>50 yrs|>50 yrs| |1.1%|16.2%|15.6%| |0.2%|4.5%|11.4%| |40-50 yrs|40-50 yrs|40-50 yrs| |10.2%|26.6%|20.4%| |2.4%|8.7%|10.2%| |30-40 yrs|30-40 yrs|30-40 yrs| |12.0%|11.5%|9.8%| |<30 yrs|<30 yrs|<30 yrs| |21.4%|3.9%|13.9%| |28.9%|9.2%|9.0%| |30-40|30-40|30-40| |12.4%|30-40|30-40| # Europe |>50 yrs|>50 yrs|>50 yrs| |---|---|---| |20.2%|6.4%|6.4%| |5.6%|2.1%|1.8%| |40-50 yrs|40-50 yrs|40-50 yrs| |18.7%|15.5%|17.8%| |8.1%|6.0%|9.3%| |30-40 yrs|30-40 yrs|30-40 yrs| |18.9%|26.3%|21.7%| |12.6%|12.2%|17.8%| |<30 yrs|<30 yrs|<30 yrs| |9.7%|21.2%|12.6%| |6.2%|10.3%|12.6%| Male Female 1GRI 401-1, GRI 405-1 Integrated Annual Report 2023-24 # Human Capital # Talent Development TCS is invested in its people for the long term, supporting them to build meaningful careers they aspire to, supporting the development of its people, providing them with opportunities and tools for them to continuously develop and reinvent their skills and careers, so they remain at the cutting edge of innovation. Average Learning Hours per employee2 87.1 hrs |Competencies acquired|Senior|Middle|Junior| |---|---|---|---| |Learning Hours|49|57|126| | |54|51|115| |5 million| | | | # Engagement with Purpose TCS Elevate 423,000 employees pursued learning linked to career growth Contextual Masters 73,000 CMs 27% Women # Focused Training Building a strong Engineering culture with focus on Software and Secuware Training # Initial Learning Program Resumed 100% in-person training for freshers # AI. Cloud Certification Goal to make "Every TCSer GenAI Ready by 2025". Over half of the workforce already trained on AI/ML including GenAI. |
# Mid-level Training 65,000 completed since inception 25,000 deployed in opportunities matching their skills # Headcount 2GRI 404-1 Integrated Annual Report 2023-24 # Intellectual Capital # Focus Areas of TCS' R&I: # Intellectual Capital Highlights 5,500+ Researchers and Innovators |3,919 / 8,040|Patents Granted / Filed (cumulative)| |---|---| |257|Tier-1 Publications| |40+|Research and Innovation centers| |70+|Academic Partners| |6|Pace Ports Co-Innovation Hubs| |New York, Amsterdam, Toronto, Pittsburgh, Tokyo, London|New York, Amsterdam, Toronto, Pittsburgh, Tokyo, London| |2,900+|Start-up Partners| # Life Sciences - Generative Design in: # The TCS Pace Innovation Ecosystem A platform that brings together these three rings and the layers within them to create a comprehensive and engaged ecosystem of innovation. Pace is geared toward building innovation experiences and systems of rigor in innovation to create tangible business outcomes for customers speedily and at scale. # Emerging Technologies - Generative AI - 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 # Customers Industrial Projects # Faculty Industry Bodies Integrated Annual Report 2023-24 # Intellectual Capital # Products and Platforms - 29 new wins and 38 go-lives in FY 2024, including 5 large insurance platform wins - Services more than 30% of the global population for Banking, 100+ Countries covered - 8 out of top 10 custodian and asset management firms run on TCS BaNCS - Largest independent solution provider in financial market infrastructure, serving over 20 countries with mission critical systems - Market leader in Indian brokerage and trading system, with 35% volume market share, across front, back office, risk and professional clearing - Largest BpaaS provider, delivering digital transformation to the UK Life & Pension industry, serving 1 in 3 UK citizens - Services more than 140 million property and casualty policies globally; also leading India's general insurance segment - AI /ML powered merchandise optimization platform that enables retailers to unlock exponential value by optimizing space, mix, price in an integrated manner - 1 new win in FY 2024 - AI powered enterprise digital twin covering customer, product and process to help business leaders simulate and optimize enterprise decisions, predict and proactively manage outcomes - 13 new wins and 8 go-lives in FY 2024 - Helps businesses achieve: - Enhanced and accelerated cashflows upto 10% - Upto 10-15% increase in revenues - Upto 2X faster time to market - Build a sustainable competitive advantage - Enhanced customer experience - Improved asset utilization by 5% - Market leading autonomous enterprise platform encompassing unified observability, AI platform and end to end closed loop automation - 130+ deals closed, 20 new customers went live in FY 2024 with AI and GenAI use cases - Business Health Monitoring (BHM), Business Transaction Monitoring (BTM), hybrid and multi CloudOps with FinOps capabilities - 425+ new wins in FY 2024 - 65 million candidates assessed - More than 2,900 question papers delivered in FY 2024, 54% increase YoY - Over 3,100 corporates have access to fresher talent pool through TCS iON NQT - Comprehensive suite, powered by AI, for digital transformation of drug development and clinical trials - 1250+ studies onboarded by TCS ADD Platform - More than 1 million adverse event case processed by TCS ADD Platforms using AI. - 2 new wins and 4 go-lives in FY 2024 - AI powered composable commerce platform that provides a unified, personalized and 'always on' checkout experience for shoppers across channels, helping businesses roll out omnichannel customer journeys and new services quickly without worrying about channel constraints - 2 wins and 1 go-live in FY 2024 - MasterCraft - Digital platform to optimally automate and manage IT processes. - GenAI driven digital products to optimally and securely modernize legacy applications and data. |
- Processed 325 billion records for data privacy and 15 billion records for data quality - Automated generation of 60+ mn 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% - 110 new wins in FY 2024 - Scalable Agile DevSecOps platform to accelerate software development and delivery - 29 new wins in FY 2024 - Plug and play SaaS based business platform to digitally transform business, network and revenue management domains of subscription-based businesses - 3 new wins and 5 go-lives in FY 2024 - Business solutions, foundational technology and tools that bring together combinatorial power of next-gen technologies including DLT/AI, across varied industries like BFSI, Supply Chain, Energy, Utilities and eGovernance. - 6 new wins and 3 go-lives in FY 2024 Integrated Annual Report 2023-24 # 22 Social Capital # Social Capital 2023/24 EUROPE 2014 EUROPE 2020/21 EUROPE TCS' business model and strategy have resulted in fostering long term relationships with its customers, suppliers, a highly skilled workforce, continuous increase in market share, maintain integrity and strong ethics as a responsible corporate citizen and transform industries through a proven track record in longer term value creation. All of this has significantly enhanced the company's brand value, which is a quantifiable measure of its social capital with stakeholders. # Investors TCS is seen as a benchmark in its outreach to investors, its transparency and disclosures, and communication of its longer-term strategy. For the last many years, its Investor Relations program has been winning awards based on surveys of investors and analysts across Asia. # Customers Customer-centricity is at the core of TCS' business strategy. It seeks to deliver superior outcomes, and build strong, enduring relationships. By proactively investing in building newer 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 | |FY 2004|FY 2014|FY 2024| |---|---|---|---| |Rev per US$ 1 Million+ Client (US$ Mn)|US$ 20Mn+|US$ 50Mn+|US$ 100Mn+| |Growth| | |9.4%| # Branding TCS hosted customer summits across North America, Europe, Japan and APAC, bringing together distinguished C-suite executives, partners and thought leaders, with the focus shifting to face-to-face interaction and collaboration in FY 2024. K Krithivasan CEO & MD; TCS # TCS Brand Valuation TCS posted the highest growth in brand value in the IT Services sector this year, increasing the value of its brand by US$ 2 billion according to Brand Finance. Its current brand valuation of US$ 19.2 billion cements its position among the Top 2 Brands globally in its industry. The Kantar BrandZ 'Most Valuable Global Brands 2023' report also ranked TCS among the Top 50 brands globally, across all industries. # 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 - Highly satisfied customers # TCS Brand Valuation (US$ billion) |FY|2020|2021|2022|2023|2024| |---|---|---|---|---|---| | | | | | | | Source: Brand Finance 1 includes multiple investors in group meetings Integrated Annual Report 2023-24 # Social Capital # Community # Education # Entrepreneurship # Literacy # Employment Ignite My Future File: AR_TCS_2023_2024.md Over 312K students and 6K educators gained computational thinking and 21st century skills. Literacy as a Service (Laas) Over 20K adults gained literacy and access to government entitlements. Youth Employment Program (YEP) 23K marginalized youth gained industry readiness. Business with purpose Engaged over 345 customers, creating 138 purpose partnerships. Over 173K new patient consultations. Our CSR programs on Education, Livelihood, Employment, Entrepreneurship ensured the inclusion of marginalized talent through social transformation. |3.4x|Enhancement in income for women who complete YEP and get employment in comparison to an average worker in rural area.| |---|---| |4.6x|Higher earnings for women BridgeIT participants compared to other self-employed in rural India.| |₹953 crore|CSR Spend| |7.1 million|beneficiaries| |143K+|volunteers| |6.7 million hours| | 96% of students who completed goIT demonstrated understanding of how technology can be used to improve their community. 90% of LaaS program participants encouraged their own children especially girls to go to school. GRI 413-1 Integrated Annual Report 2023-24 # Natural Capital # Initiatives for reduction of Scope 3 emissions: # Natural Capital - Employee Commute: - Transition to transport fleet of cabs and buses with EV. - EV charging facility for private vehicles of employees. - Employee engagement for use of public transport. |
- Business Travel: - Reduce business travel through use of collaborative tools and technology. - Use of flights having sustainable aviation fuel (SAF) or other options, as and when these are commercially available. # Energy Management and GHG Emissions Reduction # Outcomes Reduced Energy Consumption …Increased Use of … reduced TCS' Carbon footprint. |Target:|70% reduction of Scope 1 + 2 emissions by 2025 (vs base year 2016) and Net Zero by 2030| | | | |---|---|---|---|---| | |20%|19x|80%|25%| # Initiatives for reduction of Scope 1 and Scope 2 emissions: - Energy Efficiency and Optimization - New campuses designed as per green building standard and innovative technology used. - Optimize operational energy efficiency with real-time monitoring and controls. - Upgrade legacy equipment/utilities. - Green IT - Procurement of energy efficient IT equipment. - Data center and distributed IT power management. - Greater use of Renewable Energy - Maximize roof top solar capacities and RE procurement. # Achievements We have reduced our absolute carbon footprint across Scope 1 and Scope 2 by 80% in FY 2024 over a baseline of 2016, exceeding our target achievement by 10%, one year ahead of time. |% total office space (for India) as per Indian Green Building Council standards.|Renewable energy as % of total energy consumed|weighted average PUE at TCS data centers|Rooftop solar generation capacity across TCS campuses| |---|---|---|---| |67.3%|74%|1.7 PUE|10.2 MWp| Integrated Annual Report 2023-24 # Natural Capital # Water Conservation Target: 3% YoY reduction in freshwater consumption across owned campuses Initiatives: Initiatives include conservation, sewage treatment and reuse, rainwater harvesting (RWH) and employee awareness. All new campuses have been designed for higher water efficiency, treatment and recycling of sewage, and rainwater harvesting. # Waste Reduction and Reuse Target: Reduction in waste generation, maximizing recycling and reuse to divert waste to landfill Maximize recycling of all recyclable waste like e-waste, office paper, packaging and plastic wastes 95% Food waste treated in biodigesters and organic waste converters in owned campuses # Biodiversity increased water 18.5% consumption Y-o-Y due to increase in 'RTO' by employees 2.47 Bn Liters of fresh water consumed in FY 2024 2.8% Water from RWH; 88.5% from third party sources; 8.7% from ground water Water recycled 87% (TCS owned campuses) TCS believes in preserving and enriching the biodiversity within its campuses. Various initiatives have helped support: - 600+ species of flora - 200+ species of fauna - 41,000+ trees present across 18 TCS campuses in India. Integrated Annual Report 2023-24 # Customer Stories # Arturo Merino Head IT, Securities Services SIX This is going to give a second life to our core CSD platform and make our relationship with TCS even stronger. We are conscious of the pressure and high expectations that we have put on TCS for the most complex project in recent years, but the TCS team has lived up to the expectations with an outstanding level of commitment. Our main goal is to become more customer-centric and user friendly and we have achieved it with this platform upgrade. I am sure that we can count on TCS for the many challenges that SIX has ahead. # Trading old for new: SIX unveils an advanced post trading platform With 13,500 trade legs per minute, 13 million transactions per day and few trillion USD worth of securities in custody, SECOM is the electronic post trading system used by SIX for automated processing and settlement of transactions. Built by TCS, SECOM was one of the world's first real-time gross settlement (RTGS) systems and formed the backbone of the Swiss capital market. But can a three-decade old system meet the strenuous demands of modern times? TCS and SIX both knew the answer was 'no'. SIX decided to embark on a journey of transformation yet again, backed by three decades of relation and trust it shares with TCS. Back in 1990, when SIX was looking to enhance the scalability of its batch system to meet the market demands of the future, TCS proposed a new platform called SECOM. This platform would be real time, cutting-edge, scalable, and modular with robust architecture. Enabling straight-through processing, it was amongst the most sophisticated systems of its time. Over the years, TCS continued to manage this system for SIX. Three decades later, SIX partnered with TCS to accomplish another mega feat. TCS executed a PoC to demonstrate the feasibility of modernizing the existing system. TCS showed how this transformation would serve SIX for decades to come - making it more efficient, enabling speed and growth for the firm. |
Placing trust in TCS' execution capabilities, SIX decided to go ahead with the transformation. Thus, the next journey from mainframe to an open and more resilient system began. To take this forward, TCS tapped into its design labs to create a platform that reimagined the user experience and enabled faster response to queries. TCS was able to fast-track this development with an ingenious automation solution which migrated over 500 billion records in record time, saving 10-12 months' time from the overall process. The flexible, secure, and cloud-ready platform is economical and makes SIX' internal operations and process more efficient. The ability to customize individual post trade processes depending on market requirements in different parts of the world has set SIX on a steady path of growth and expansion. With this new and advanced system, SIX became more modern, up to date and market-friendly - boosting customer-centricity and overall competitiveness - and maintaining its pole position in the Swiss financial market. Integrated Annual Report 2023-24 # Customer Stories # CUSTOMERS T O R I E S TCS has been a critical partner of Experian in this initiative from day 1, working closely with the Support Hub team to structure our requirements and design an intuitive, accessible solution that could be deployed quickly. We're proud of Support Hub and its impact in supporting vulnerable consumers, and it's been a pleasure to have TCS join us on this journey. Paul Lamont Product Director Experian Consumer Information Services # Shaping a future of accessibility and financial inclusion With a commitment to empower all individuals to access financial services equitably, Experian PLC, a global leader in consumer and business credit reporting services, has taken a significant step towards bridging the gap in financial inclusion for differently abled people in the UK. As the Dublin, Ireland headquartered company helped differently abled people take control of their credit with complete access to their data and offers, it discovered that this demographic is mostly under-served. Organizations across utilities, retail and banking are not aware or not able to cater to their support needs effectively, providing the company an opportunity to get closer to its customer and deliver more accessible products and services. With TCS as a partner, Experian developed the Support Hub to help vulnerable people get easier access to essential services like banking, utilities, telecom and retail. For the first time, consumers can disclose their support needs to multiple organizations at the same time and have complete control over their data with an intuitive and accessible UX designed exclusively for them. Leveraging the TCS PaceTM and TCS Accessibility Centre of Excellence from design to testing, Support Hub is instrumental in improving Experian's user engagement. The Experian Support Hub allows people to share their support needs with multiple service providers in a simple, standardized way. For instance, the end customer can now define their needs like requesting statements in Braille or getting longer appointments or more support when visiting a branch. Through this unique initiative, Experian has been able to expand its partner ecosystem which will help them enter new markets and make a pivotal advancement in fostering financial inclusion. By 2030, Experian aims to help seven million consumers connect with over 200 organizations. Integrated Annual Report 2023-24 # 28 Customer Stories # CUSTOMERS T O R I E S # Connecting India, Faster: BSNL 4G/5G Network roll-out In response to the Government of India's 'Atmanirbhar Bharat' call, TCS collaborated with Centre for Development of Telematics (C-DOT) and Tejas Networks Limited (Tejas) to design and develop an indigenous telecom stack. This complex initiative was undertaken with significant efforts to design the equipment, establish a lab and testing infrastructure of scale besides building the entire manufacturing ecosystem in India. The resultant solution of EPC Core, RAN, IMS, and the cognitive NMS was proven by integrating it in the state-owned Bharat Sanchar Nigam Limited's (BSNL) existing network through a well-structured proof of concept. The indigenously designed equipment are programmable and the overall network will be 'Software Defined' and highly configurable. With this, India became only the fifth country in the world to have developed this complex technology end to end. - Deploying the EPC Core and IMS software supplied by C-DOT integrating it with the existing BSNL landscape in a high scalable cloud architecture along with TCS' Cognitive Network Operations (CNOPS) to efficiently manage and configure the network. - Install, commission, and optimize the Radios (RAN) meeting the specifications of BSNL and global standards, supplied by Tejas. |
- Extend Operations and Maintenance support to the network on an on-going basis. This project is governed as a 'mission-mode' project by TCS, BSNL and the Department of Telecommunications. As of April 2024, TCS has delivered 11,000 sites and are well on its way to complete the roll-out by end of this year. BSNL has already added to the scope another 22,000 sites to further densify the coverage and to include 'saturation' sites. This is to ensure digital inclusivity to rural and remote areas of India. Post the satisfactory evaluation of the indigenous telecom stack, BSNL awarded TCS the mandate to supply, install and commission the pan India 4G/5G mobile network across 100,000 sites. The contract involves the following key dimensions: - Establishing modern cloud native data centers with geographical redundancies for each of the four zones and about 30+ edge data centers closer to the clients. This is a historic and significant leap towards bridging the digital divide, ushering in the benefits of a powerful voice and data network to all corners of the country. With this, TCS along with its partners is enabling BSNL to enhance its competitiveness, increase revenues, offer a compelling enterprise proposition, and explore new business opportunities. Integrated Annual Report 2023-24 # Customer Stories # CUSTOMERS T O R I E S # A joint venture gives rise to a digitally powered insurance firm What happens when two companies with a shared vision join forces? We have a greenfield insurance firm that is digital-first, always available and provides gold standard customer experience to its members. The entire system was built on a public cloud. The scalable, resilient, and future-ready system was up and running within 15 months and AIB life had exceeded 5,000 new policy sales by the end of 2023. Irish bank, AIB and Great West Life Co entered a joint venture to transform the life, pensions, and investment market in Ireland. They also wanted to address the 35% gender gap in pensions. TCS was selected as a strategic partner for the newly launched AIB life in Ireland, including greenfield operations set up in Letterkenny. TCS helped create a modern, cloud-based technology stack from the ground up with its unique insurance-in-a-box solution. In Ireland, insurance offerings mainly follow a tiring process where the sales process can take weeks. TCS and AIB life re-imagined the entire journey, with a digital first ambition and customers at the heart of everything. A dedicated, cloud-enabled contact center and back-office in Ireland supports AIB life's operations - allowing their distributor to advise customers on 12 different product offerings. Further differentiated products are envisaged to enable AIB life to respond to market changes. TCS continues to support the firm in its mission of creating truly omnichannel experience, while handling 100+ policy activations on an average day, with self-service capabilities and straight through processing. After an extensive review of the market, it was clear that TCS' contextual industry knowledge, European cloud-based technology and global delivery team based in Letterkenny was a great fit for us. As we build and scale what is a new greenfield life company, it is key that we start on a foundation of cutting-edge technology, and from the outset, establish a digital business with a partner that shares our vision, with the capacity and experience to back our ambition to build our new company at pace, while being committed to delivering the very best for our customers. In addition, TCS' investment in Ireland through their Global Delivery Centre in Letterkenny, from where we are servicing AIB life customers, enables us to deliver customer service excellence as we support the financial wellbeing of our customers, their families, and their businesses. Being able to do that from within Ireland was particularly important. Bryan O'Connor Chief Executive Officer AIB life Integrated Annual Report 2023-24 # AI for Business Study # From potential to performance by design The advent of GenAI expands the arc of traditional machine learning and AI, which is one of recognition and reasoning intelligence, to create an operative intelligence that partners with humans to create new possibilities and new opportunities that have the potential to dramatically reshape business. Today's AI delivers far more than just cost savings or improvements in productivity or quality. When combined with human creativity and strategic thinking, companies can continuously improve customer value chains through differentiation and consistent, high-quality organizational output designed to deliver elite outcomes. The recent GenAI technology revolution has taken the world, including business, by storm. |
The advent of GenAI tools raises the potential of "traditional AI" to a new level for TCS clients, especially those seeking to embrace a strategic approach to its adoption and integration. # Survey highlights and takeaways To understand how companies are approaching AI in the next few years, the TCS Thought Leadership Institute surveyed nearly 1,300 CEOs and senior executives in large cross-industry enterprises in 24 countries. # Executives weigh in about the potential impact of AI on their business |AI's impact on organizations' competitive positioning and decision-making|AI's impact on organizations' competitive positioning and decision-making| |---| |57%|are excited or cautiously optimistic about AI's potential impact.| |65%|say human strategic decision making, intuition, and creativity will remain essential to their company's competitive advantage.| # Assessing the best approach to AI adoption |AI impact to strategy and operating models|AI impact to strategy and operating models| |---| |53%|want to take a strategic approach to AI, whether it's an AI-first or business-model-first approach to maximize benefits to their companies.| |72%|are reworking or planning to rework their company's strategy, operating model or offerings to extract the most benefits from and to mitigate any risks of AI implementations.| # Many employees will come to rely on GenAI in the near future |Current focus of AI is innovation|Current focus of AI is innovation| |---| |45%|think up to half their employees will be using GenAI daily in the near future.| |70%|are more focused on using AI to spur innovation than on lowering costs and optimization.| # AI impact on revenue streams 86% are already using AI in some way to enhance current revenue streams or to create entirely new revenue streams. # Top 3 challenges to AI adoption 1. Current IT infrastructure 2. Customers' expectations 3. Current IT service providers Integrated Annual Report 2023-24 # AI for Business Study # TCS Methodology for AI Adoption with a multilayered approach # Where do we start? Start with value (the why and what); identify use cases, not technology. Create a blueprint in the context of the overall value chain. # How do we scale? Design and build for constant change. Maximize stakeholder collaboration and an enterprise network of continuously evolving purposive agents. # How do we drive organizational changes? Create space for adaptation and establish a culture of innovation. Evolve talent and redefine roles on an ongoing basis. # How do we manage the risks? Make the model safe. Establish a governance model for information security, regulatory compliance, and bias mitigation guardrails. Monitor primary metrics/KPIs with stakeholders at frequent intervals. # By design: Accelerating better decisions, performance, and innovation Getting the most from AI will require a multilayered strategy that creates a foundation designed for accelerated productivity, innovation, and performance. This means using AI strategically to: |Assist|Augment|Transform| |---|---|---| |Machines boost human capabilities through knowledge discovery and summarization|Humans and machines collaborate by optimizing activities|Machines elevate, humans ideate to redefine value chains| |AI can supplement tacit knowledge with contextual knowledge to boost work effectiveness.|AI can accelerate elite performance through collaborative intelligence, where humans and machines complement and magnify each other's talents.|Leap from systems of record to a knowledge-driven superstructure with fast, consistent, and high-quality decision output to deliver new ways of working and the full realization of "enterprise-wise" AI.| Integrated Annual Report 2023-24 # Customer Stories # CUSTOMERS T O R I E S Disrupting Industry Boundaries from Transactions to Interactions In partnership with TCS, Ingram Micro, an innovative, US-based global technology distribution company, successfully completed an unprecedented industry transformation to a digital experience company through its groundbreaking platform, XvantageTM. This business model transformation leverages proprietary AI/ML-enhanced technologies and a global, real-time data mesh containing many years of operational and transactional data to enhance operational efficiencies, streamline supply chain processes, and provide world-class, unified experiences for its customers, vendors and associates. The team at TCS was instrumental in the revolutionary build and implementation of Xvantage, resulting in end-to-end transformation across design, architecture, product development, AI, and cloud platform technologies. By embracing a customer-centric approach and fostering innovation in distributed channels with optimized value chains, Xvantage is serving as Ingram Micro's digital twin in helping their customers boost efficiency, increase revenue opportunities, and grow their businesses. Embarking on this transformation journey has been incredibly exciting. With unparalleled dedication, the teams have pioneered a monumental shift within a short timeframe, which has been recognized throughout the industry. And with Xvantage--every day, every week--we're iterating, adding new capabilities, further eliminating complexity for our customers. |
From building a data lake to empowering all users of the platform with data-driven technologies, our TCS colleagues have been integral to the massive strides we've taken together. Sanjib Sahoo EVP & Chief Digital Officer Ingram Micro Integrated Annual Report 2023-24 # Customer Stories # AI and GenAIS T O R I E S Travel better with a Next GenAI Solution A leading North American airline customer wanted to drive operational efficiency throughout the airport operations control domain by enabling key stakeholders with operations information in real time. In addition, their objective was also to improve customer experience through next GenAI technologies. For all US airlines, 116 million are the delayed minutes every year. With an average of 100 passengers on each flight, this results in 11.6 billion minutes of passenger delays and frustration. Travel better during delays was the core around which the airline customer and TCS embarked on a GenAI journey to help their end customers reach their destination by seamlessly capturing contextual data along with their preferences. TCS' solution provided a conversational experience to deliver contextualized personalized message while apologizing for the flight delay, leveraging GenAI to ask about preferences including final location, drive time, earliest arrival, or least waiting time along with an end-to-end integration to provide options and rebooking for a seamless passenger experience. The boarding twin continuously monitors boarding progress and its deviations in real time by merging camera vision data with enterprise events and contextualizing the user experience with proactive and relevant notifications on boarding progress of all flights. # Warranty Claims Anomaly Detection Solution The warranty claims received by a global manufacturer of engines and power system products, for its service network included a mix of structured data, narratives/ notes. The notes were used by experts to determine the validity and the warrantable items in a manually adjudicated claim process. In auto adjudicated claims, there were certain anomalous claims that got cleared for payment if met the criteria of a standard claim. TCS conceptualized and implemented an Intelligent adjudication and anomaly detection solution that automated the review of all claims using Machine Learning for structured data, Natural Language Processing for unstructured data and a scenario-based modelling approach for anomalies, in combination with business rules to provide informed inference to adjudicators or adjust claims wherever apparent before further adjudication. TCS solution provides a scalable model for all types of claims including traceability needed for decision support, and could automate 91% of claims' approval, resulting in efficient utilization of adjudicator's time and improved realization time for the service providers. The solution delivered an increase in productivity hours, an annual savings of over US$5 million in terms of warranty costs and identification of anomalous claims. Integrated Annual Report 2023-24 # Customer Stories # AI and GenAI Stories # Agent Assist for Travel Insurance TCS customer is a leading Global Insurance and Asset Management Provider. The customer's contact center agents need to respond to user queries related to travel insurance policies' terms & conditions across various states it is presently servicing. Agents had to search through many T&C, resulting in high wait time for the customer. # Built Proactive Maintenance Paradigm for Gas Turbine Compressor Casing TCS customer is a leading electricity generating and gas retailing company in ANZ, whose strategy is to develop new power generation infra and improve existing assets to drive long-term growth while meeting sustainability. Currently, significant fuels used to generate electricity are natural gas and coal and three gas turbines are being used to meet peak load of grid. One of the gas turbine compressor casing had developed crack and functionally failed which resulted in shut down. The customer wanted to avoid these unwanted shutdowns by predicting the survival probability for combustor casings. TCS' IP2TM, an intelligent power plant solution that uses AI, IoT, and digital twin technologies was deployed to extract operational life experience profile from timeseries sensors' information of the gas turbine process including more than seven years of historical data. The solution summarizes the data and predicts and validates crack length based on the same for other gas turbines. TCS designed a GenAI led solution to generate quick yet consistent and contextual responses for end users. The state-wise T&C and insurance plans were extracted and semantically chunked to provide context to GenAI models based on user query. Prompt templates were created to extract contextual information needed for agents to generate responses to the end user query. Guardrails have been implemented using responsible AI principles. |
Agents can review, validate, and fine tune responses as needed. The solution can help reduce the average handling time by 40% and thereby result in an overall improvement in customer satisfaction. TCS solution has helped in ensuring that the gas turbines operate efficiently and in preventing costly unplanned maintenance and helps in reducing plant O&M costs while reducing carbon emissions. Integrated Annual Report 2023-24 # Notice File: AR_TCS_2023_2024.md Notice is hereby given that the twenty-nineth Annual General Meeting of Tata Consultancy Services Limited ("Company" or "TCS") will be held on Friday, May 31, 2024, at 3.00 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, 2024, 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, 2024, 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 2023-24. 3. To appoint a Director in place of N Chandrasekaran (DIN 00121863), who retires by rotation and being eligible, offers himself for re-appointment. # Special Business To approve existing as well as new material related party transactions with identified subsidiaries of Promoter Company and/or their 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 identified subsidiaries of Promoter Company and/or their subsidiaries, related parties falling within the definition of 'Related Party' under Section 2(76) of the Act and Regulation 2(1)(zb) of the SEBI Listing Regulations, during financial year 2024-25 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 in the explanatory statement to this resolution, provided that the said transaction(s)/Contract(s)/Arrangement(s)/Agreement(s) shall be carried out in the ordinary course of business and 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." Integrated Annual Report 2023-24 # Notice # 5. |
To approve existing as well as new material related party transactions with Tejas Networks Limited this resolution, be and are hereby approved, ratified and confirmed in all respects. 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 Tejas Networks Limited, related party falling within the definition of 'Related Party' under Section 2(76) of the Act and Regulation 2(1)(zb) of the SEBI Listing Regulations, during financial year 2024-25 on such material terms and conditions as detailed in the explanatory statement to this Resolution and as may be mutually agreed between related party and the Company, such that the maximum value of the Related Party Transactions with such party, in aggregate, does not exceed value as detailed in the explanatory statement provided that the said Transaction(s)/Contract(s)/Arrangement(s)/Agreement(s) shall be carried out in the ordinary course of business and 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." # 6. |
To approve existing as well as new material related party transactions with Tata Motors Limited, Jaguar Land Rover Limited and/or their identified 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 Tata Motors Limited, Jaguar Land Rover Limited and/or their identified subsidiaries, related parties falling within the definition of 'Related Party' under Regulation 2(1)(zb) of the SEBI Listing Regulations, during financial year 2024-25 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 detailed in the explanatory statement for this resolution, provided that the said Transaction(s)/ Contract(s)/Arrangement(s)/Agreement(s) shall be carried out in the ordinary course of business." "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." Integrated Annual Report 2023-24 # Notice 37 "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." # 7. To approve existing as well as new material related party transactions with Tata Consultancy Services Japan, Ltd., subsidiary of the Company 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." # 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 Tata Consultancy Services Japan, Ltd., subsidiary of the Company, a related party falling within the definition of 'Related Party' under Section 2(76) of the Act and Regulation 2(1)(zb) of the SEBI Listing Regulations, during financial year 2024-25 on such material terms and conditions as detailed in the explanatory statement to this Resolution and as may be mutually agreed between related party and the Company, such that the maximum value of the Related Party Transactions with such party, in aggregate, does not exceed value as detailed in the explanatory statement provided that the said transaction(s)/Contract(s)/Arrangement(s)/Agreement(s) shall be carried out in the ordinary course of business and 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." # 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, 10/2022 dated December 28, 2022 and subsequent circulars issued in this regard, the latest being 09/2023 dated September 25, 2023 in relation to "Clarification on holding of Annual General Meeting ("AGM") through Video Conferencing (VC) or Other Audio Visual Means (OAVM)", permitted the holding of the 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 7 of the Notice, is annexed hereto. Further, the relevant details with respect to Item Nos. 3 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 Director seeking 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, SEBI/HO/CFD/PoD-2/P/CIR/2023/4 dated January 5, 2023 and SEBI/HO/CFD/CFD-PoD-2/P/CIR/2023/167 dated October 7, 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 2023-24 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company/National Securities Depository Limited ("NSDL") and the Central Depository Services (India) Limited ("CDSL"), collectively "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 Friday, May 24, 2024, to receive this Notice of the AGM and the Integrated Annual Report for FY 2023-24 by completing the process for registration of e-mail address as under: Integrated Annual Report 2023-24 # Notice 1. Click on the URL: https://liiplweb.linkintime.co.in/EmailReg/Email_Register.html. 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 2023-24 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 proxy(ies) 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. # Registrar and Transfer Agent ("RTA") Pursuant to the Order passed by National Company Law Tribunal (NCLT) dated December 18, 2023, TSR Consultants Private Limited has merged with Link Intime India Private Limited with effect from December 22, 2023. Accordingly, the name of RTA of the Company is changed from TSR Consultants Private Limited to Link Intime India Private Limited (Link Intime / RTA). # 7. # Final Dividend for FY 2023-24: The Board of Directors at its meeting held on April 12, 2024, has recommended a final dividend of `28 per equity share. The Record date fixed for determining entitlement of Members to final dividend for the financial year ended March 31, 2024, if approved at the AGM, is Thursday, May 16, 2024. - If the final dividend is approved at the AGM, payment of such dividend subject to deduction of tax at source ("TDS") will be made on Tuesday, June 4, 2024, as under: SEBI vide its Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 3, 2021 (subsequently amended by Circular Nos. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/687 dated December 14, 2021, SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 March 16, 2023 and SEBI/HO/MIRSD/POD-1/P/CIR/2023/181 November 17, 2023) has mandated that with effect from April 1, 2024, dividend to security holders (holding securities in physical form), shall be paid only through electronic mode. |
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