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# Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements amount of exchange differences related to that foreign operation recognised in OCI is reclassified to statement of profit and loss as part of the gain or loss on disposal. # 5) Use of estimates and judgements The preparation of consolidated financial statements in conformity with the recognition and measurement principles of Ind AS requires management of the Group to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures of contingent liabilities as at the date of consolidated 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 Group uses the following critical accounting judgements, estimates and assumptions in preparation of its consolidated financial statements: # (a) Revenue recognition Revenue for fixed-price contracts is recognised using percentage-of-completion method. The Group estimates the future cost-to-completion of the contracts which is used to determine degree of completion of the performance obligation. File: AR_TCS_2023_2024.md The Group exercises judgement for identification of performance obligations, determination of transaction price, ascribing the transaction price to each distinct performance obligation and in determining whether the performance obligation is satisfied at a point in time or over a period of time. These judgements have been explained in detail under the revenue recognition note (Refer note 12). # (b) Useful lives of property, plant and equipment The Group 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 (Refer note 10(a)). # (c) Impairment of goodwill The Group estimates the value-in-use of the cash generating units (CGUs) based on the future cash flows after considering current economic conditions and trends, estimated future operating results and growth rate and anticipated future economic and regulatory conditions. The estimated cash flows are developed using internal forecasts. The discount rates used for the CGUs represent the weighted average cost of capital based on the historical market returns of comparable companies (Refer note 10(b)). # (d) Fair value measurement of financial instruments When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. # (e) Impairment of financial assets (other than at fair value) Measurement of impairment of financial assets require use of estimates, which have been explained in the note on financial assets, financial liabilities and equity instruments, under impairment of financial assets (other than at fair value) (Refer note 8)). # (f) Provision for income tax and deferred tax assets The Group uses 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 Group exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period. # (g) Provisions and contingent liabilities The Group 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 Group uses significant judgements to assess contingent liabilities. |
Contingent liabilities are disclosed 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 Group 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 consolidated financial statements. # (h) Employee benefits The accounting of employee benefit plans in the nature of defined benefit requires the Group to use assumptions. These assumptions have been explained under employee benefits note (Refer note 14). # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # (i) Leases The Group 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 Group uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Group determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. In assessing whether the Group 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 Group to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Group revises the lease term if there is a change in the noncancellable 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. # 6) Recent pronouncements Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Group. # 7) Business combinations The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in the consolidated statement of profit and loss as incurred. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. Purchase consideration paid in excess of the fair value of net assets acquired is recognised as goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognised as capital reserve. The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests' proportionate share of the acquiree's identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity of subsidiaries. Business combinations arising from transfers of interests in entities that are under common control are accounted at historical cost. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity is recorded in shareholders' equity. # 8) Financial assets, financial liabilities and equity instruments Financial assets and liabilities are recognised when the Group 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 Group 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 Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. # Cash and cash equivalents The Group 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements The Group 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. # 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 Group are recognised at the proceeds received net of direct issue cost. # Derivative accounting # Instruments in hedging relationship The Group 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 Group uses hedging instruments that are governed by the financial risk management policy as approved by the Risk Management Committee. The policy provides principles on the use of such financial derivatives consistent with the risk management strategy of the company and its subsidiaries. While determining the appropriate hedge ratio, the Group takes into consideration the prevailing macro-economic conditions, the availability and liquidity of the hedging instruments, tolerance levels for hedge ineffectiveness and the costs of hedging. The hedging activities are reviewed by the Risk Management Committee every quarter and future course of action is determined. The hedge instruments are designated and documented as hedges at the inception of the contract. The Group 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 Group separates the intrinsic value and time value of an option and designates as hedging instruments only the change in intrinsic value of the option. The change in fair value of the intrinsic value and time value of an option is recognised in the other comprehensive income and accounted as a separate component of equity. |
Such amounts are reclassified into the statement of profit and loss when the related hedged items affect profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity till that time remains and is recognised in 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 Group 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 Group 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 Group recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction. In determining the allowance for expected credit losses, the Group has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal to the 12-months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # (a) Investments Investments consist of the following: # Investments - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Investments designated at fair value through OCI| | | |Fully paid equity shares| | | |Mozido LLC (unquoted)|83|82| |FCM LLC (unquoted)|63|62| |Taj Air Limited (unquoted)|19|19| |Philippine Dealing System Holdings Corporation (unquoted)|8|7| |LATAM Airlines Group S.A. (quoted)|1|-| |Less: Impairment in value of investments|(142)|(134)| |Investments carried at amortised cost| | | |Government bonds and securities (quoted)|188|188| |Corporate bonds (quoted)|61|42| | |281|266| Investments - Non-current includes `249 crore and `229 crore as at March 31, 2024 and 2023, respectively, pertaining to trusts held for specified purposes. # Investments - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Investments carried at fair value through profit or loss| | | |Mutual fund units (quoted)|2,360|2,296| |Investments carried at fair value through OCI| | | |Government bonds and securities (quoted)|24,746|26,128| |Corporate bonds (quoted)|3,406|3,110| |Investments carried at amortised cost| | | |Corporate bonds (quoted)|30|10| |Certificate of deposits (quoted)|-|2,955| |Commercial papers (quoted)|939|2,398| | |31,481|36,897| Investments - Current includes `196 crore and `68 crore as at March 31, 2024 and 2023, respectively, pertaining to trusts and TCS Foundation held for specified purposes. Government bonds and securities includes bonds pledged with bank for credit facility amounting to NIL and `1,650 crore as at March 31, 2024 and 2023, respectively. # Aggregate value of quoted and unquoted investments | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Aggregate value of quoted investments|31,731|37,127| |Aggregate value of unquoted investments (net of impairment)|31|36| |Aggregate market value of quoted investments|31,729|37,121| |Aggregate value of impairment of investments|142|134| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Market value of quoted investments carried at amortised cost is as follows: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Government bonds and securities|186|186| |Corporate bonds|91|50| |Certificate of deposits|-|2,951| |Commercial papers|939|2,400| # Equity instruments designated at fair value through OCI are as follows: |In Numbers|Currency|Face value per share|Equity instruments designated at fair value through OCI|As at March 31, 2024|As at March 31, 2023| | | |---|---|---|---|---|---|---|---| |1,00,00,000|USD|1|Mozido LLC (unquoted)| |83| |82| | |15|USD|5,00,000|FCM LLC (unquoted)|63| |62| |1,90,00,000|INR|10|Taj Air Limited (unquoted)| |19|19| | |5,00,000|PHP|100|Philippine Dealing System Holdings Corporation (unquoted)| |8| |7| |66,05,679|CLP|1|LATAM Airlines Group S.A. |
(quoted)|1| | |-| | | | |Less: Impairment in value of investments| |(142)| |(134)| |Total| | | | |32| |36| # The movement in fair value of investments carried / designated at fair value through OCI is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|41|488| |Net loss arising on revaluation of financial assets carried at fair value|(6)|(2)| |Net gain / (loss) arising on revaluation of investments other than equities carried at fair value through other comprehensive income|248|(676)| |Deferred tax relating to net gain / (loss) arising on revaluation of investments other than equities carried at fair value through other comprehensive income|(40)|233| |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|(11)|(3)| |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|3|1| |Balance at the end of the year|235|41| # Trade receivables - Billed # Trade receivables- Billed (unsecured) consist of the following: # Trade receivables - Billed - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Trade receivables- Billed|765|824| |Less: Allowance for expected credit losses|(638)|(675)| |Considered good|127|149| # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Ageing for trade receivables - non-current outstanding as at March 31, 2024 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|-|-|-|55|86|590|731| | |Disputed trade receivables - considered good|-|-|-|2|-|32|34| | | |-|-|-|57|86|622|765| | |Less: Allowance for expected credit losses| | | | |(638)| | | | | | | | | |127| | | |Trade receivables - Unbilled| | | | | |16| | | | | | | | | |143| | | # Ageing for trade receivables - 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|-|-|-|71|83|638|792| | |Disputed trade receivables - considered good|-|-|-|-|8|24|32| | | |-|-|-|71|91|662|824| | |Less: Allowance for expected credit losses| | | | |(675)| | | | | | | | | |149| | | |Trade receivables - Unbilled| | | | | |199| | | | | | | | | |348| | | # Trade receivables - Billed - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Trade receivables- Billed|44,722|41,244| |Less: Allowance for expected credit losses|(365)|(297)| |Considered good|44,357|40,947| |Trade receivables- Billed|264|343| |Less: Allowance for expected credit losses|(187)|(241)| |Credit impaired|77|102| | |44,434|41,049| # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Ageing for trade receivables - current outstanding as at March 31, 2024 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|38,188|4,952|889|383|6|279| | |Undisputed trade receivables - considered good| | | | | | | | |Undisputed trade receivables - credit impaired|-|6|19|62|18|159| | |Disputed trade receivables - considered good|-|-|-|-|-|25| | | |38,188|4,958|908|445|24|463| | |Less: Allowance for expected credit losses| | | | | | |(552)| | | | | | | | |44,434| |Trade receivables - Unbilled| | | | | | |9,143| | | | | | | | |53,577| # Ageing for trade receivables - 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|36,529|3,360|889|119|53|256| | |Undisputed trade receivables - considered good| | | | | | | | |Undisputed trade receivables - credit impaired|65|42|2|24|36|170| | |Disputed trade receivables - considered good|-|-|12|1|-|25| | |Disputed trade receivables - credit impaired|-|-|-|-|1|3| | | |36,594|3,402|903|144|90|454| | |Less: Allowance for expected credit losses| | | | | | |(538)| | | | | |
| | | |41,049| |Trade receivables - Unbilled| | | | | | |8,905| | | | | | | | |49,954| Above balances of trade receivables- billed includes balances with related parties (Refer note 22). # Cash and cash equivalents Cash and cash equivalents consist of the following: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Balances with banks| | | |In current accounts|2,804|2,114| |In deposit accounts|6,212|4,999| |Cheques on hand|-*|-*| |Cash on hand|-*|-*| |Remittances in transit|-*|10| |Total|9,016|7,123| *Represents value less than `0.50 crore. Balances with banks in current accounts include `9 crore and `8 crore as at March 31, 2024 and 2023, respectively, pertaining to trusts held for specified purposes. # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # (d) Other balances with banks Other balances with banks consist of the following: |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Earmarked balances with banks|471|685| |Short-term bank deposits|3,799|3,224| |Total|4,270|3,909| Earmarked balances with banks primarily relate to margin money for purchase of investments, unclaimed dividends and liquidity backstop as a part of regulatory requirements. Short-term bank deposits include `517 crore and `425 crore as at March 31, 2024 and 2023, respectively, pertaining to TCS foundation held for specified purposes. # (e) Loans Loans (unsecured) consist of the following: # Loans - Non-current |(` crore)|As at March 31, 2024|As at March 31, 2023| | |---|---|---|---| |Considered good|Inter-corporate deposits|-|170| |Loans to employees|2|3| | |Total|2|173| | # Loans - Current |(` crore)|As at March 31, 2024|As at March 31, 2023| | |---|---|---|---| |Considered good|Inter-corporate deposits|170|846| |Loans to employees|321|479| | |Credit impaired|Loans to employees|-|32| |Less: Allowance for loans to employees|-|(32)| | |Total|491|1,325| | Inter-corporate deposits placed with financial institutions yield fixed interest rate. Inter-corporate deposits include `110 crore and `932 crore as at March 31, 2024 and 2023, respectively, pertaining to trusts and TCS Foundation held for specified purposes. # (f) Other financial assets Other financial assets consist of the following: # Other financial assets - Non-current |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Security deposits|749|614| |Earmarked balances with banks|213|192| |Long-term bank deposits|2,248|1,334| |Interest receivable|62|2| |Others|-|7| |Total|3,272|2,149| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Other financial assets - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Security deposits|339|378| |Fair value of foreign exchange derivative assets|141|191| |Interest receivable|764|720| |Advances to employees|368|-| |Less: Allowance for advances to employees|(43)|-| |Others|134|30| |Total|1,703|1,319| Long-term bank deposits include `1,495 crore and `417 crore as at March 31, 2024 and 2023, respectively, pertaining to TCS Foundation held for specified purposes. Interest receivable includes `111 crore and `66 crore as at March 31, 2024 and 2023, respectively, pertaining to trusts and TCS Foundation held for specified purposes. # Trade payables Ageing for trade payables outstanding as at March 31, 2024 is as follows: |Particulars|Not due|Outstanding for following periods from due date of payment| |Total| | | | |---|---|---|---|---|---|---|---| | | |Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |Trade payables|MSME*|82|-|-|-|-|82| |Others|1,001|2,025|29|7|43|3,105| | |Disputed dues- Others|8|11|-|-|30|49| | |Total|1,091|2,036|29|7|73|3,236| | Accrued expenses: 6,745 Total: 9,981 * MSME as per the Micro, Small and Medium Enterprises Development Act, 2006. 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|1,776|1,903|(2)|11|42|3,730| |Disputed dues- Others|-|-|-|-|29|29| | |Total|1,776|1,903|(2)|11|71|3,759| | File: AR_TCS_2023_2024.md Accrued expenses: 6,756 Total: 10,515 Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # (h) Other financial liabilities Other financial liabilities consist of the following: # Other financial liabilities - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Capital creditors|69|120| |Others|296|233| |Total|365|353| Others include advance taxes paid of `226 crore and `226 crore as at March 31, 2024 and 2023, 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, 2024|As at March 31, 2023| |---|---|---| |Accrued payroll|5,760|6,847| |Unclaimed dividends|53|51| |Fair value of foreign exchange derivative liabilities|114|141| |Capital creditors|625|731| |Liabilities towards customer contracts|1,509|1,137| |Others|301|161| |Total|8,362|9,068| # (i) Financial instruments by category The carrying value of financial instruments by categories as at March 31, 2024 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|Cash and cash equivalents|-|-|-|9,016|9,016| | |Bank deposits|-|-|-|6,047|6,047| | |Earmarked balances with banks|-|-|-|684|684| | |Investments|2,360|28,184|-|-|31,762| | |Trade receivables|Billed|-|-|44,561|44,561| | |Unbilled|-|-|-|9,159|9,159| | |Loans|-|-|-|493|493| | |Other financial assets|-|-|46|95|2,514| |Total Financial Assets|2,360|28,184|46|95|73,551|1,04,236| | |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|Trade payables|-|-|-|9,981|9,981| | |Lease liabilities|-|-|-|8,021|8,021| | |Other financial liabilities|-|-|-|114|8,727| |Total Financial Liabilities|-|-|-|114|26,615|26,729| Loans include inter-corporate deposits of `170 crore, with original maturity period within 24 months. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements 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|-|-|-|-|7,123|7,123| |Bank deposits|-|-|-|-|4,558|4,558| |Earmarked balances with banks|-|-|-|-|877|877| |Investments|2,296|29,274|-|-|5,593|37,163| |Trade receivables|Billed|-|-|-|41,198|41,198| |Unbilled|-|-|-|-|9,104|9,104| |Loans|-|-|-|-|1,498|1,498| |Other financial assets|-|-|37|154|1,751|1,942| | |2,296|29,274|37|154|71,702|1,03,463| |Financial liabilities|Trade payables|-|-|-|10,515|10,515| |Lease liabilities|-|-|-|-|7,688|7,688| |Other financial liabilities|-|-|-|141|9,280|9,421| | |-|-|-|141|27,483|27,624| Loans include inter-corporate deposits of `1,016 crore, with original maturity period within 24 months. Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at March 31, 2024 and 2023, approximate the fair value due to their nature. Carrying amounts of bank deposits, earmarked balances with banks, other financial assets and other financial liabilities which are subsequently measured at amortised cost also approximate the fair value due to their nature in each of the periods presented. Fair value measurement of lease liabilities is not required. Fair value of investments carried at amortised cost is `1,215 crore and `5,587 crore as at March 31, 2024 and 2023, respectively. # (j) Fair value hierarchy The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels: - Level 1 -- Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. - Level 2 -- Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). - Level 3 -- Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated 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, 2024| | | | | | |---|---|---|---|---|---| |Financial assets|Level 1|Level 2|Level 3| |Total| |Mutual fund units|2,360|-|-|2,360| | |Equity shares| |1|-|31|32| |Government bonds and securities|24,932|-|-|24,932| | |Corporate bonds|3,497|-|-|3,497| | |Commercial papers| |939|-|-|939| |Fair value of foreign exchange derivative assets| |-|141|-|141| | |31,729|141|31| |31,901| |As at March 31, 2023| | | | | | |---|---|---|---|---|---| |Financial assets|Level 1|Level 2|Level 3| |Total| |Mutual fund units|2,296|-|-|2,296| | |Equity shares|-|-| |36|36| |Government bonds and securities|26,314|-|-|26,314| | |Corporate bonds|3,160|-|-|3,160| | |Certificate of deposits|2,951|-|-|2,951| | |Commercial papers|2,400|-|-|2,400| | |Fair value of foreign exchange derivative assets|-|191|-|191| | | |37,121|191| |36|37,348| # Reconciliation of Level 3 fair value measurement of financial assets | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|36|36| |Impairment in value of investments|(6)|(2)| |Translation exchange difference|1|2| |Balance at the end of the year|31|36| # (k) Derivative financial instruments and hedging activity The Group's revenue is denominated in various foreign currencies. |
Given the nature of the business, a large portion of the costs are denominated in Indian Rupee. This exposes the Group to currency fluctuations. The Board of Directors has constituted a Risk Management Committee (RMC) to frame, implement and monitor the risk management plan of the Group which inter-alia covers risks arising out of exposure to foreign currency fluctuations. Under the guidance and framework provided by the RMC, the Group uses various derivative instruments such as foreign exchange forward, currency options and futures contracts in which the counter party is generally a bank. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements The following are outstanding currency options contracts, which have been designated as cash flow hedges: |Foreign currency|No. of contracts|Notional amount (In million)|Fair value (` crore)|No. of contracts|Notional amount (In million)|Fair value (` crore)| |---|---|---|---|---|---|---| |US Dollar|19|475|6|8|225|13| |Great Britain Pound|29|230|24|22|200|14| |Euro|28|235|16|22|203|10| The movement in cash flow hedging reserve for derivatives designated as cash flow hedges is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|8|27| |(Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions|(139)|(376)| |Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions|31|90| |Change in the fair value of effective portion of cash flow hedges|140|351| |Deferred tax on change in the fair value of effective portion of cash flow hedges|(31)|(84)| |Balance at the end of the year|9|8| The Group has entered into derivative instruments not in hedging relationship by way of foreign exchange forward, currency options and futures contracts. As at March 31, 2024 and 2023, the notional amount of outstanding contracts aggregated to `50,982 crore and `47,500 crore, respectively, and the respective fair value of these contracts have a net loss of `19 crore and gain of `13 crore. Exchange gain of `109 crore and loss of `1,162 crore on foreign exchange forward, currency options and futures contracts that do not qualify for hedge accounting have been recognised in the consolidated statement of profit and loss for the years ended March 31, 2024 and 2023, respectively. Net foreign exchange gain / (loss) include loss of `102 crore and `112 crore transferred from cash flow hedging reserve to profit and loss on occurrence of forecasted hedge transactions for the years ended March 31, 2024 and 2023, respectively. Net loss on derivative instruments of `9 crore recognised in cash flow hedging reserve as at March 31, 2024, is expected to be transferred to the statement of profit and loss by March 31, 2025. The maximum period over which the exposure to cash flow variability has been hedged is through calendar year 2024. Following table summarises approximate gain / (loss) on Group's other comprehensive income on account of appreciation / depreciation of the underlying foreign currencies: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |10% Appreciation of the underlying foreign currencies|-|-| |10% Depreciation of the underlying foreign currencies|910|544| # Financial risk management The Group is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity and interest rate risks, which may adversely impact the fair value of its financial instruments. The Group has a risk management policy which covers risks associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Group. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Group's exposure to market risk is primarily on account of foreign currency exchange rate risk. # * Foreign currency exchange rate risk The fluctuation in foreign currency exchange rates may have potential impact on the consolidated statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. |
Considering the countries and economic environment in which the Group operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The Group, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. Further, any movement in the functional currencies of the various operations of the Group against 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, 2024: | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|2,753|518|161|3,508| |Net financial liabilities|(7,129)|(253)|(2,185)|(753)| 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 `338 crore for the year ended March 31, 2024. # 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. # * 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 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. Refer note 5 for methods, assumptions and information used to measure expected credit losses. Financial instruments that are subject to credit risk consist of trade receivables, loans, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. Inter-corporate deposits of `170 crore are with a financial institution having a high credit-rating assigned by credit-rating agencies. Bank deposits include an amount of `5,197 crore held with two 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, 2024. 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 `2,96,130 crore and `1,09,258 crore as at March 31, 2024 and 2023, respectively, being the total of the carrying amount of balances with banks, bank deposits, investments, trade receivables, loans, 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, 2024 and 2023. |
# * 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, 2024|As at March 31, 2024|As at March 31, 2023|As at March 31, 2023| |---|---|---| |Country|Gross%|Net%|Gross%|Net%| |United States of America|42.07|42.67|43.65|44.31| |India|18.68|17.44|15.45|14.06| |United Kingdom|16.56|16.86|16.05|16.37| 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 losses on trade receivables for the years ended March 31, 2024 and 2023, was `98 crore and `126 crore respectively. The reconciliation of allowance for expected credit losses is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|1,213|1,333| |Change during the year|98|126| |Bad debts written off|(118)|(253)| |Translation exchange difference|(3)|7| |Balance at the end of the year|1,190|1,213| # 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements The tables below provide details regarding the contractual maturities of significant financial liabilities as at: # (` crore) # March 31, 2024 | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|9,981|-|-|-|9,981| |Lease liabilities|1,959|1,709|3,364|3,070|10,102| |Other financial liabilities|8,255|51|73|245|8,624| | |20,195|1,760|3,437|3,315|28,707| |Derivative financial liabilities|114|-|-|-|114| | |20,309|1,760|3,437|3,315|28,821| # (` crore) # 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| # (m) Equity instruments The authorised, issued, subscribed and fully paid up share capital consist of the following: # (` crore) # As at March 31, 2024 # As at March 31, 2023 | | |March 31, 2024|March 31, 2023| |---|---|---|---| |Authorised|460,05,00,000 equity shares of `1 each|460|460| | |105,02,50,000 preference shares of `1 each|105|105| | | |565|565| |Issued, Subscribed and Fully paid up|361,80,87,518 equity shares of `1 each|362|366| | | |362|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. The Board of Directors at its meeting held on October 11, 2023, approved a proposal to buy-back upto 4,09,63,855 equity shares of the Company for an aggregate amount not exceeding `17,000 crore, being 1.12% of the total paid up equity share capital at `4,150 per equity share. The shareholders approved the same on November 15, 2023, by way of a special resolution through postal ballot. A Letter of Offer was made to all eligible shareholders. The Company bought back 4,09,63,855 equity shares out of the shares that were tendered by eligible shareholders and extinguished the equity shares on December 13, 2023. Capital redemption reserve was created to the extent of share capital extinguished (`4 crore). The excess cost of buy-back of `17,046 crore (including `46 crore towards transaction cost of buy-back) over par value of shares and corresponding tax on buy-back of `3,959 crore were offset from retained earnings. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # I. Reconciliation of number of shares | |As at March 31, 2024| | |As at March 31, 2023| | | |---|---|---|---|---|---|---| | |Number of shares|Amount (` crore)|Number of shares|Amount (` crore)| | | |Equity shares| | | | | | | |Opening balance|365,90,51,373| |366|365,90,51,373|366| | |Shares extinguished on buy-back|(4,09,63,855)| |(4)|-|-| | |Closing balance|361,80,87,518| |362|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, 2024| |As at March 31, 2023| |---|---|---|---| |Equity shares| | | | |Holding company|259,54,99,419 equity shares (March 31, 2023: 264,43,17,117 equity shares) are held by Tata Sons Private Limited|260|264| |Subsidiaries and Associates of Holding company| | | | |7,220 equity shares (March 31, 2023: 7,220 equity shares) are held by Tata Industries Limited*|-|-| | |10,14,172 equity shares (March 31, 2023: 10,14,172 equity shares) are held by Tata Investment Corporation Limited*|-|-| | |46,798 equity shares (March 31, 2023: 46,798 equity shares) are held by Tata Steel Limited*|-|-| | |766 equity shares (March 31, 2023: 766 equity shares) are held by The Tata Power Company Limited*|-|-| | | |260| |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, 2024| |As at March 31, 2023| |---|---|---|---| |Equity shares|Tata Sons Private Limited, the holding company|259,54,99,419|264,43,17,117| |% of shareholding| |71.74%|72.27%| # V. Equity shares movement during five years preceding March 31, 2024 * 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements 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, 2024 is as follows: |Promoter name|Shares held by promoters|% Change during the year| |---|---|---| |Tata Sons Private Limited|<br/>No. of shares|% of total shares| |2,595,499,419|71.74%| |No. of shares|% of total shares| |2,644,317,117|72.27%| (0.53)% Total |No. of shares|% of total shares| |---|---| |2,595,499,419|71.74%| |No. of shares|% of total shares| |2,644,317,117|72.27%| (0.53)% 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| |2,644,317,117|72.27%| |No. of shares|% of total shares| |2,644,317,117|72.27%| - Total |No. of shares|% of total shares| |---|---| |2,644,317,117|72.27%| |No. of shares|% of total shares| |2,644,317,117|72.27%| - # 9) Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. # Group as a lessee The Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Group recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. |
The right-of-use asset is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements File: AR_TCS_2023_2024.md 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: |Particulars|Additions for the year ended March 31, 2024|Net carrying amount as at March 31, 2024| |---|---|---| |Leasehold land|-|929| |Buildings|1,928|6,631| |Leasehold improvements|-|25| |Computer equipment|125|202| |Software licences|-|60| |Vehicles|18|34| |Office equipment|1|3| |Furniture and fixtures|2|2| |Total|2,074|7,886| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements | |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| # Depreciation on right-of-use assets is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Leasehold land|11|10| |Buildings|1,593|1,530| |Leasehold improvements|8|6| |Computer equipment|47|32| |Software licences|36|37| |Vehicles|18|16| |Office equipment|3|3| |Furniture and fixtures|-*|-| |Total|1,716|1,634| *Represents value less than `0.50 crore. Interest on lease liabilities is `518 crore and `492 crore for the years ended March 31, 2024 and 2023, respectively. The Group incurred `353 crore and `318 crore for the years ended March 31, 2024 and 2023, respectively, towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is `2,515 crore and `2,538 crore for the years ended March 31, 2024 and 2023, respectively, including cash outflow for short term leases and leases of low-value assets. 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 `815 crore and `786 crore as at March 31, 2024 and 2023, 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. # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 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 as prescribed in Schedule II of the Companies Act, 2013 except in respect of certain categories of assets, where the useful life of the assets has been assessed 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. The estimated useful lives are as mentioned below: |Type of asset|Useful lives| |---|---| |Buildings|20 years*| |Leasehold improvements|Lease term| |Plant and equipment|10 years*| |Computer equipment|4 years*| |Vehicles|4 years*| |Office equipment|2-5 years*| |Electrical installations|4-10 years*| |Furniture and fixtures|5 years*| * The Group believes that the technically evaluated useful lives, different from Schedule II of the Companies Act, 2013, best represent the period over which these assets are expected to be used. 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. |
Integrated Annual Report 2023-24 # 208 Consolidated Financial Statements 2023-24 # 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, 2023|354|8,066|2,673|828|13,435|43|2,815|2,138|1,992|32,344| |Additions|-|217|195|56|970|6|215|96|168|1,923| |Disposals|-|(4)|(98)|(3)|(279)|(4)|(53)|(39)|(22)|(502)| |Translation exchange difference|-|1|7|(3)|73|-|(1)|7|4|88| |Cost as at March 31, 2024|354|8,280|2,777|878|14,199|45|2,976|2,202|2,142|33,853| |Accumulated depreciation as at April 1, 2023|-|(3,744)|(1,945)|(458)|(10,025)|(36)|(2,487)|(1,646)|(1,773)|(22,114)| |Depreciation|-|(413)|(182)|(86)|(1,682)|(4)|(192)|(134)|(97)|(2,790)| |Disposals|-|4|98|2|276|3|50|37|22|492| |Translation exchange difference|-|(1)|(7)|3|(52)|-|-|(5)|(3)|(65)| |Accumulated depreciation as at March 31, 2024|-|(4,154)|(2,036)|(539)|(11,483)|(37)|(2,629)|(1,748)|(1,851)|(24,477)| |Net carrying amount as at March 31, 2024|354|4,126|741|339|2,716|8|347|454|291|9,376| |Capital work-in-progress*|1,564|1,564|1,564|1,564|1,564|1,564|1,564|1,564|1,564|1,564| |Total|10,940|10,940|10,940|10,940|10,940|10,940|10,940|10,940|10,940|10,940| *`1,923 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2024. |(` 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. # Consolidated Financial Statements 2023-24 # 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, 2024 is as follows: |Capital work-in-progress|Amount in Capital work-in-progress for a period of|Total| | | | |---|---|---|---|---|---| |Projects in progress|Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |1,010|160|58|336|1,564| 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| | |Total| |---|---|---|---|---|---| |Projects in progress|Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |658|212|42|322|1,234| 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, 2024|As at March 31, 2023| |---|---|---| |Balance at the beginning of the period|1,858|1,787| |Translation exchange difference|(26)|71| |Balance at the end of the period|1,832|1,858| Goodwill of `689 crore and `685 crore as at March 31, 2024 and 2023, 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 8.67%. 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. The remaining amount of goodwill of `1,143 crore and `1,173 crore as at March 31, 2024 and 2023, 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # 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, 2023|1,892|126|2,018| |Additions|131|-|131| |Disposals / Derecognised|(18)|-|(18)| |Translation exchange difference|(1)|1|-| |Cost as at March 31, 2024|2,004|127|2,131| |Accumulated amortisation as at April 1, 2023|(1,025)|(126)|(1,151)| |Amortisation|(479)|-|(479)| |Disposals / Derecognised|11|-|11| |Translation exchange difference|(1)|(1)|(2)| |Accumulated amortisation as at March 31, 2024|(1,494)|(127)|(1,621)| |Net carrying amount as at March 31, 2024|510|-|510| | |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| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements The estimated amortisation for the years subsequent to March 31, 2024 is as follows: |Year ending March 31|Amortisation expense (` crore)| |---|---| |2025|305| |2026|111| |2027|74| |2028|20| |Total|510| # (d) Other assets Other assets consist of the following: # Other assets - Non-current | |As at March 31, 2024 (` crore)|As at March 31, 2023 (` crore)| |---|---|---| |Considered good| | | |Capital advances|88|68| |Advances to related parties|196|63| |Contract assets|295|215| |Prepaid expenses|2,557|2,138| |Contract fulfillment costs|247|114| |Others|213|208| |Total|3,596|2,806| Advances to related parties, considered good, comprise: |Entity|As at March 31, 2024 (` crore)|As at March 31, 2023 (` crore)| |---|---|---| |Voltas Limited|-|-*| |Tata Realty and Infrastructure Limited|-*|-*| |Tata Projects Limited|191|54| |Titan Engineering and Automation Limited|3|-| |Saankhya Labs Private Limited|-|8| |Universal MEP Projects & Engineering Services Limited|2|1| *Represents value less than `0.50 crore. # Other assets - Current | |As at March 31, 2024 (` crore)|As at March 31, 2023 (` crore)| |---|---|---| |Considered good| | | |Advance to suppliers|174|91| |Advance to related parties|967|9| |Contract assets|5,846|5,616| |Prepaid expenses|2,055|1,494| |Prepaid rent|-|20| |Contract fulfillment costs|1,588|1,035| |Indirect taxes recoverable|1,288|1,049| |Others|349|393| |Considered doubtful| | | |Advance to suppliers|2|2| |Other advances|4|4| |Less: Allowance for doubtful assets|(6)|(6)| |Total|12,267|9,707| # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Advance to related parties, considered good comprise:| | | |Tata Sons Private Limited|-|7| |Tata AIG General Insurance Company Limited|7|1| |Titan Company Limited|-|1| |Tejas Networks Limited|960|-| Non-current - Others includes advance of `177 crore and `177 crore towards acquiring right-of-use of leasehold land as at March 31, 2024 and 2023, respectively. Contract fulfillment costs of `838 crore and `967 crore for the years ended March 31, 2024 and 2023, 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. | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Raw materials, sub-assemblies and components|28|23| |Finished goods and work-in-progress|-*|5| | |28|28| *Represents value less than `0.50 crore. |
# (f) Other liabilities Other liabilities consist of the following: # Other liabilities - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Advance received from customers|1,841|543| |Indirect taxes payable and other statutory liabilities|4,330|4,119| |Others|353|230| | |6,524|4,892| # (g) Provisions Provisions consist of the following: # Provisions - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Provision towards legal claim (Refer note 20)|-|206| |Provision for foreseeable loss|97|101| |Other provisions|43|38| | |140|345| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 11) Other equity Other equity consist of the following: | |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---|---| |Capital reserve| |75|75| |Capital redemption reserve|Opening balance|440|440| | |Transfer from retained earnings|4|-| | | |444|440| |Special Economic Zone re-investment reserve|Opening balance|11,809|7,287| | |Transfer from retained earnings|9,875|8,380| | |Transfer to retained earnings|(5,450)|(3,858)| | | |16,234|11,809| |Retained earnings|Opening balance|74,722|78,158| | |Profit for the year|45,908|42,147| | |Remeasurement of defined employee benefit plans|(13)|275| | |Expenses for buy-back of equity shares|(46)|-| | |Tax on buy-back of equity shares|(3,959)|-| | |Buy-back of equity shares|(16,996)|-| | |Transfer from Special Economic Zone re-investment reserve|5,450|3,858| | |Purchase of non-controlling interests|-|(8)| | | |1,05,066|1,24,430| | |Less: Appropriations| | | | |Dividend on equity shares|25,137|41,347| | |Transfer to capital redemption reserve|4|-| | |Transfer to Special Economic Zone re-investment reserve|9,875|8,380| | |Transfer from statutory reserve|17|(19)| | | |70,033|74,722| |Statutory reserve|Opening balance|143|162| | |Transfer to retained earnings|17|(19)| | | |160|143| |Investment revaluation reserve|Opening balance|41|488| | |Change during the year (net)|194|(447)| | | |235|41| |Cash flow hedging reserve (Refer note 8(k))|Opening balance|(20)|(26)| | |Change during the year (net)|11|6| | | |(9)|(20)| |Foreign currency translation reserve|Opening balance|2,848|2,189| | |Change during the year (net)|107|659| | | |2,955|2,848| | | |90,127|90,058| # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 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. |
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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements 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: |(` crore)|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Consultancy services|2,38,135|2,23,332| |Sale of equipment and software licences|2,758|2,126| |Total|2,40,893|2,25,458| Revenue disaggregation by industry vertical and geography has been included in segment information (Refer note 19). File: AR_TCS_2023_2024.md 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. 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 `1,65,314 crore out of which 47.69% 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: |(` crore)|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|5,831|4,419| |Invoices raised that were included in the contract assets balance at the beginning of the year|(3,933)|(3,305)| |Increase due to revenue recognised during the year, excluding amounts billed during the year|4,182|4,519| |Translation exchange difference|61|198| |Balance at the end of the year|6,141|5,831| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Changes in unearned and deferred revenue are as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|4,846|4,745| |Revenue recognised that was included in the unearned and deferred revenue balance at the beginning of the year|(4,178)|(3,071)| |Increase due to invoicing during the year, excluding amounts recognised as revenue during the year|3,469|3,088| |Translation exchange difference|(15)|84| |Balance at the end of the year|4,122|4,846| # Reconciliation of revenue recognised with the contracted price is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Contracted price|2,44,803|2,28,932| |Reductions towards variable consideration components|(3,910)|(3,474)| |Revenue recognised|2,40,893|2,25,458| The reduction towards variable consideration comprises of volume discounts, service level credits, etc. # Other income Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method. Other income consist of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Interest income|3,781|3,248| |Dividend income|41|15| |Net gain on disposal / fair valuation of investments carried at fair value through profit or loss|301|220| |Net gain on sale of investments other than equity shares carried at fair value through OCI|11|4| |Net gain on disposal of property, plant and equipment|7|26| |Net gain / (loss) on lease modification|7|(2)| |Net foreign exchange gain / (loss)|223|(159)| |Other income|51|97| |Total|4,422|3,449| # Interest income comprise: - Interest on bank balances and bank deposits: 751 (291) - Interest on financial assets carried at amortised cost: 398 (657) - Interest on financial assets carried at fair value through OCI: 2,198 (2,131) - Other interest (including interest on tax refunds): 434 (169) # Dividend income comprise: - Dividend from mutual fund units and other investments: 41 (15) # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 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. # 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, 2024|Year ended March 31, 2023| |---|---|---| |Salaries, incentives and allowances|1,25,432|1,14,359| |Contributions to provident and other funds|10,962|9,644| |Staff welfare expenses|3,737|3,519| |Total|1,40,131|1,27,522| # Employee benefit obligations consist of the following: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Gratuity liability|15|11| |Foreign defined benefit plans|502|383| |Other employee benefit obligations|169|142| |Total|686|536| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Employee benefit obligations - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Compensated absences|4,480|4,027| |Other employee benefit obligations|39|38| |Total|4,519|4,065| # 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: | |Year ended March 31, 2024|Year ended March 31, 2024|Year ended March 31, 2024|Year ended March 31, 2024|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2023| |---|---|---| | |Domestic plans|Domestic plans|Foreign plans|Foreign plans|Domestic plans|Domestic plans|Foreign plans|Foreign plans| |Change in benefit obligations|funded|unfunded|funded|unfunded|funded|unfunded|funded|unfunded| |Benefit obligations, beginning of the year|4,667|3|1,833|294|4,482|3|2,294|269| |Translation exchange|-|-|26|13|-|-|94|29| |Plan participants' contribution|-|-|20|-|-|-|18|-| |Service cost|485|-|33|82|515|-|37|50| |Interest cost|363|-|57|18|332|-|30|11| |Remeasurement of the net defined benefit liability|168|-|(16)|10|(158)|-|(627)|(39)| |Past service cost / (credit)|-|-|6|6|-|-|(7)|-| |Benefits paid|(383)|-|(61)|(31)|(504)|-|(6)|(26)| |Benefit obligations, end of the year|5,300|3|1,898|392|4,667|3|1,833|294| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements | |Year ended March 31, 2024|Year ended March 31, 2024|Year ended March 31, 2024|Year ended March 31, 2024|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2023|Year ended March 31, 2023| |---|---|---| | |Domestic plans funded|Domestic plans unfunded|Foreign plans funded|Foreign plans unfunded|Domestic plans funded|Domestic plans unfunded|Foreign plans funded|Foreign plans unfunded| |Change in plan assets|6,405|-|1,929|-|5,527|-|2,132|-| |Fair value of plan assets, beginning of the year|8,334| |7,659| | | | | | |Translation exchange|-|-|26|-|-|-|111|-| |Interest income|501|-|61|-|425|-|26|-| |Employers' contributions|601|-|53|-|1,060|-|19|-| |Plan participants' contribution|-|-|20|-|-|-|18|-| |Benefits paid|(383)|-|(61)|-|(504)|-|(6)|-| |Remeasurement- return on plan assets excluding amount included in interest income|110|-|50|-|(103)|-|(371)|-| |Fair value of plan assets, end of the year|7,234|-|2,078|-|6,405|-|1,929|-| | | |As at March 31, 2024| | | | | | |As at March 31, 2023| | | |---|---|---|---|---|---|---|---|---|---|---|---| | |Domestic plans funded|Domestic plans unfunded|Foreign plans funded|Foreign plans unfunded|Domestic plans funded|Domestic plans unfunded|Foreign plans funded|Foreign plans unfunded| | | | |Funded status|Deficit of plan assets over obligations|(12)|(3)|(110)|(392)| |(8)|(3)|(89)|(294)| | |Surplus of plan assets over obligations|1,946|-|290|-| | |1,746|-|185|-| | | |1,934|(3)|180|(392)| |1,719|1,738|(3)|96|(294)| | | | |As at March 31, 2024| | | | | |As at March 31, 2023| | | |---|---|---|---|---|---|---|---|---|---|---| | |Domestic plans funded|Domestic plans unfunded|Foreign plans funded|Foreign plans unfunded|Domestic plans funded|Domestic plans unfunded|Foreign plans funded|Foreign plans unfunded| | | |Category of assets|Corporate bonds|1,960|-|371|-|1,832|-|287|-| | | |Equity instruments|201|-|375|-|121|-|352|-| | | |Government bonds and securities|3,172|-|-|-|2,917|-|-|-| | | |Insurer managed funds|1,734|-|607|-|1,390|-|543|-| | | |Bank balances|22|-|78|-|16|-|94|-| | | |Others|145|-|647|-|129|-|653|-| | | |7,234| |-|2,078|-|6,405|-|1,929|-| | Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # 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, 2024| | | | |Year ended March 31, 2023| | | |---|---|---|---|---|---|---|---|---|---|---| | |Domestic|Domestic|Foreign|Foreign|Total|Domestic|Domestic|Foreign|Foreign|Total| |plans|funded|unfunded|funded|unfunded|plans|funded|unfunded|funded|unfunded| | |Service cost|485|-|33|82|600|515|-|37|50|602| |Net interest on net defined benefit (asset) / liability|(138)|-|(4)|18|(124)|(93)|-|4|11|(78)| |Past service cost / (credit)|-|-|6|6|12|-|-|(7)|-|(7)| |Net periodic gratuity / pension cost|347|-|35|106|488|422|-|34|61|517| |Actual return on plan assets|611|-|111|-|722|322|-|(345)|-|(23)| # Remeasurement of the net defined benefit (asset) / liability: |(` crore)| |Year ended March 31, 2024| | | | | | |---|---|---|---|---|---|---|---| | |Domestic|Domestic|Foreign|Foreign|Total| | | |plans|funded|unfunded|funded|unfunded| | | | |Actuarial gains arising from changes in demographic assumptions| | |(2)|-|(4)|(3)|(9)| |Actuarial (gains) and losses arising from changes in financial assumptions| | |67|-|(43)|10|34| |Actuarial losses arising from changes in experience adjustments| |103| |-|31|3|137| |Remeasurement of the net defined benefit liability| |168| |-|(16)|10|162| |Remeasurement- return on plan assets excluding amount included in interest income| |(110)|-| |(50)|-|(160)| | | | |58|-|(66)|10|2| # Year ended March 31, 2023 |(` crore)| | | |Year ended March 31, 2023| | | |---|---|---|---|---|---|---| |Domestic|Domestic|Foreign|Foreign|Total| | | |plans|funded|unfunded|funded|unfunded| | | |Actuarial losses arising from changes in demographic assumptions| |30|-|-|5|35| |Actuarial gains 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| | |(55)| |-|(256)|(39)|(350)| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements The assumptions used in accounting for the defined benefit plan are set out below: | |Year ended March 31, 2024| |Year ended March 31, 2023| | |---|---|---|---|---| | |Domestic plans|Foreign plans|Domestic plans|Foreign plans| |Discount rate|7.00%- 7.25%|1.57%- 9.40%|7.25%- 7.50%|2.16%- 9.40%| |Rate of increase in compensation levels of covered employees|5.00%- 10.00%|1.75%- 7.00%|4.00%- 8.00%|1.50%- 7.00%| |Rate of return on plan assets|7.00%- 7.25%|1.57%- 9.40%|7.25%- 7.50%|2.16%- 9.40%| |Weighted average duration of defined benefit obligations|2-11 Years|3-27 Years|2-13 Years|3-28 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, 2024. |
The Group is expected to contribute `40 crore to defined benefit plan obligations funds for the year ending March 31, 2025 comprising domestic component of `8 crore and foreign component of `32 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, 2024|As at March 31, 2023| |---|---|---|---|---| |Increase of 0.50%|(272)|(265)| | | |Decrease of 0.50%|300|290| | | # If the expected salary growth increases / decreases by 0.50%, the defined benefit obligations would increase / (decrease) as follows: | |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---|---| |Increase of 0.50%| |163|155| |Decrease of 0.50%| |(157)|(147)| 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. # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements The defined benefit obligations shall mature after year ended March 31, 2024 as follows: |Year ending March 31,|Defined benefit obligations| |---|---| |2025|947| |2026|764| |2027|773| |2028|764| |2029|720| |2030-2034|2,989| # 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, 2024|As at March 31, 2023| |---|---|---| |Fair value of plan assets|29,170|25,511| |Present value of defined benefit obligations|(29,170)|(25,511)| |Net excess / (shortfall)|-|-| The plan assets have been primarily invested in Government securities and corporate bonds. |
The principal assumptions used in determining the present value obligations of interest guarantee under the deterministic approach are as follows: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Discount rate|7.25%|7.50%| |Average remaining tenure of investment portfolio|6 years|7 years| |Guaranteed rate of return|8.25%|8.15%| The Group expensed `1,698 crore and `1,628 crore for the years ended March 31, 2024 and 2023, respectively, towards provident fund. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 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 `452 crore and `394 crore for the years ended March 31, 2024 and 2023, respectively, towards Employees' Superannuation Fund. # Foreign defined contribution plans The Group expensed `2,529 crore and `2,109 crore for the years ended March 31, 2024 and 2023, 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 expected credit losses and doubtful 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, 2024|Year ended March 31, 2023| |---|---|---| |Raw materials, sub-assemblies and components consumed|42|37| |Equipment and software licences purchased|3,655|1,846| | |3,697|1,883| |Finished goods and work-in-progress| | | |Opening stock|5|3| |Less: Closing stock|-*|5| | |5|(2)| | |3,702|1,881| *Represents value less than `0.50 crore. # (b) Other expenses Other expenses consist of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Fees to external consultants|15,820|21,337| |Facility expenses|3,100|2,655| |Travel expenses|2,970|2,675| |Communication expenses|2,261|2,246| |Bad debts and advances written off, allowance for expected credit losses and doubtful advances (net)|114|140| |Other expenses|8,499|7,743| | |32,764|36,796| Other expenses include `4,017 crore and `3,488 crore for the years ended March 31, 2024 and 2023, respectively, towards project expenses. # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 16) Finance costs Finance costs consist of the following: |(` crore)|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Interest on lease liabilities|518|492| |Interest on tax matters|30|46| |Other interest costs|230|241| |Total|778|779| # 17) Income taxes Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred taxes are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. # Current income taxes The current income tax expense includes income taxes payable by the Company and its subsidiaries in India and overseas. The current tax payable by the Company and its subsidiaries in India is Indian income tax payable on income after taking credit for tax relief available for export operations in Special Economic Zones (SEZs). The 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, affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred income tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences associated with investments in subsidiaries where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled. For operations carried out in SEZs, deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, to the extent it would be available for set off against future current income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. # The income tax expense consists of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Current tax| | | |Current tax expense for current year|16,284|15,389| |Current tax benefit pertaining to prior years|(420)|(632)| | |15,864|14,757| |Deferred tax| | | |Deferred tax expense / (benefit) for current year|3|(130)| |Deferred tax expense / (benefit) pertaining to prior years|31|(23)| | |34|(153)| | |15,898|14,604| # 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, 2024|Year ended March 31, 2023| |---|---|---| |Profit before tax|61,997|56,907| |Indian statutory income tax rate|34.94%|34.94%| |Expected income tax expense|21,664|19,887| |Tax effect of adjustments to reconcile expected income tax expense to reported income tax expense| | | |Tax holidays|(6,407)|(5,112)| |Income exempt from tax|(522)|(236)| |Undistributed earnings in branches and subsidiaries|111|276| |Tax on income at different rates|891|508| |Tax pertaining to prior years|(389)|(655)| |Effect of tax rate change under new regime|441|-| |Others (net)|109|(64)| |Total income tax expense|15,898|14,604| File: AR_TCS_2023_2024.md 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). |
# Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements Significant components of net deferred tax assets and liabilities for the year ended March 31, 2024 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|686|52|-|-|1|739| |Provision for employee benefits|1,056|84|(24)|-|(8)|1,108| |Cash flow hedges|6|-|(3)|-|-|3| |Receivables, financial assets at amortised cost|438|(15)|-|-|(1)|422| |Branch profit tax|(135)|35|-|-|-|(100)| |Undistributed earnings of subsidiaries|(534)|(146)|-|-|-|(680)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(84)|(2)|(37)|-|(3)|(126)| |Lease liabilities and right-of-use assets|250|20|-|-|-|270| |Others|832|(62)|-|-|20|790| |Total|2,515|(34)|(64)|-|9|2,426| # 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|862|123|739| |Provision for employee benefits|1,149|41|1,108| |Cash flow hedges|3|-|3| |Receivables, financial assets at amortised cost|422|-|422| |Branch profit tax|-|100|(100)| |Undistributed earnings of subsidiaries|-|680|(680)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(124)|2|(126)| |Lease liabilities|1,314|-|1,314| |Right-of-use assets|(1,044)|-|(1,044)| |Others|821|31|790| |Total|3,403|977|2,426| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements 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 and right-of-use assets|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: | |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|1,152|-|1,152| |Right-of-use assets|(902)|-|(902)| |Others|843|11|832| |Total|3,307|792|2,515| 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # 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 unabsorbed business losses will expire based on the year of origination as follows: |March 31,|Unabsorbed business losses (` crore)| |---|---| |2027|1| |2028|-| |Thereafter|39| | |40| 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 `7,473 crore as at March 31, 2024, 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. Contingent liability in respect of tax demands received from direct tax authorities in India and other jurisdictions is `1,871 crore and `1,542 crore as at March 31, 2024 and 2023, 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, 2024 and 2023, 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 2022 are generally subject to examination by the tax authorities. In United States of America, the federal statute of limitation applies to fiscals 2020 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. # 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 periods presented. | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Profit for the year attributable to shareholders of the Company (` crore)|45,908|42,147| |Weighted average number of equity shares|364,68,51,755|365,90,51,373| |Basic and diluted earnings per share (`)|125.88|115.19| |Face value per equity share (`)|1|1| Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 19) Segment information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Group's chief operating decision maker is the Chief Executive Officer and Managing Director. The Group has identified business segments ('industry vertical') as reportable segments. The business segments comprise: 1. Banking, Financial Services and Insurance 2. Manufacturing 3. Consumer Business 4. Communication, Media and Technology 5. Life Sciences and Healthcare 6. Others such as Energy, Resources and Utilities, s-Governance and Products Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment. 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, 2024 and 2023, is as follows: # Year ended March 31, 2024 | |Banking, Financial Services and Insurance|Manufacturing|Consumer Business|Communication, Media and Technology|Life Sciences and Healthcare|Others|Total| |---|---|---|---|---|---|---|---| |Revenue from operations|90,928|23,491|39,357|39,391|26,745|20,981|2,40,893| |Segment result|23,574|7,268|10,252|10,918|7,611|4,673|64,296| |Total unallocable expenses*| | | | | | |6,721| |Operating income| | | | | | |57,575| |Other income| | | | | | |4,422| |Profit before tax| | | | | | |61,997| |Tax expense| | | | | | |15,898| |Profit for the year| | | | | | |46,099| |Depreciation and amortisation expense (unallocable)| | | | | | |4,985| |Significant non-cash items (allocable)|-13|22|3|-|9|92|113| *Includes settlement of legal claim of `958 crore (Refer note 20). # Year ended March 31, 2023 | |Banking, Financial Services and Insurance|Manufacturing|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| # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Information regarding geographical revenue is as follows: |Geography|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Americas| | | |North America|1,23,094|1,20,336| |Latin America|4,845|4,000| |Europe| | | |United Kingdom|39,852|33,861| |Continental Europe|35,772|33,575| |Asia Pacific|18,851|18,132| |India|13,562|11,271| |Middle East and Africa|4,917|4,283| |Total|2,40,893|2,25,458| 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, 2024|As at March 31, 2023| |---|---|---| |Americas| | | |North America|2,198|1,899| |Latin America|960|1,056| |Europe| | | |United Kingdom|1,362|1,487| |Continental Europe|2,456|2,422| |Asia Pacific|917|848| |India|18,307|19,254| |Middle East and Africa|164|178| |Total|26,364|27,144| 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, 2024 and 2023, respectively. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 20) Commitments and contingencies # Capital commitments The Group has contractually committed (net of advances) `2,032 crore and `1,543 crore as at March 31, 2024 and 2023, respectively, for purchase of property, plant and equipment. # Contingencies - Direct tax matters Refer note 17. - Indirect tax matters The Company and its subsidiaries have ongoing disputes with tax authorities mainly relating to treatment of characterisation and classification of certain items. The Company and its subsidiaries have demands amounting to `1,161 crore and `568 crore as at March 31, 2024 and 2023, 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 `226 crore and `277 crore as at March 31, 2024 and 2023, 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. Pursuant to an initial unfavourable judgment from the District Court, the Appeals court re-affirmed the order of compensatory damages of `1,167 crore (US $140 million) and remanded back to the District Court to reassess matter relating to punitive damages (to limit maximum up to `1,167 crore (US $140 million)), the Company has already paid the compensatory damages of `1,167 crore (US $140 million) along with interest in April 2022. The Company's second appeal in the Appeals Court to reduce the punitive damages subsequently affirmed by the District Court was disposed on July 14, 2023, with a re-affirmation of the District Court order awarding punitive damages of `1,167 crore (US $140 million). The Company's petition to the Supreme Court to review the entire judgement including both the compensatory and punitive damages re-affirmed by the Appeals Court was rejected by the Supreme Court on November 20, 2023, pursuant to which, punitive damages of `1,167 crore (US $140 million) was paid on December 1, 2023. The Company has provided the balance punitive damages amount of `958 crore (US $115 million) in its financial statements for the year ended March 31, 2024 and disclosed the same as an "exceptional item" in the consolidated statement of profit and loss. - 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. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # 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, 2024|% of voting power as at March 31, 2023|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 consolidated other income Amount (` crore)|Share in total comprehensive income As % of total comprehensive income Amount (` crore)| | | | | |---|---|---|---|---|---|---|---|---|---|---|---| |Tata Consultancy Services Limited|India|-|-|74.12|72,120|86.29|43,559|85.49|165|86.28|43,724| |APTOnline Limited|India|89.00|89.00|0.13|128|0.04|22|-|-|0.04|22| |C-Edge Technologies Limited|India|51.00|51.00|0.42|411|0.19|94|-|-|0.19|94| |MP Online Limited|India|89.00|89.00|0.13|140|0.06|29|-|-|0.06|29| |TCS e-Serve International Limited|India|100.00|100.00|0.49|476|0.45|229|(0.52)|(1)|0.45|228| |MahaOnline Limited|India|74.00|74.00|0.09|85|0.01|6|-|-|0.01|6| |TCS Foundation|India|100.00|100.00|1.34|1,307|-|-|-|-|-|-| |Tata America International Corporation|U.S.A.|100.00|100.00|1.72|1,669|2.32|1,170|(3.11)|(6)|2.30|1,164| |Tata Consultancy Services Canada Inc.|Canada|100.00|100.00|1.96|1,906|2.07|1,047|-|-|2.07|1,047| |Tata Consultancy Services Argentina S.A.|Argentina|100.00|100.00|-|(1)|(0.01)|(3)|-|-|(0.01)|(3)| |Tata Consultancy Services Chile S.A.|Chile|100.00|100.00|0.36|360|0.10|51|-|-|0.10|51| |Tata Consultancy Services De Mexico S.A., De C.V.|Mexico|100.00|100.00|0.93|916|0.39|197|1.55|3|0.39|200| |Tata Consultancy Services Do Brasil Ltda|Brazil|100.00|100.00|0.43|421|0.05|25|-|-|0.05|25| |TCS Iberoamerica SA|Uruguay|100.00|100.00|1.87|1,822|1.63|824|-|-|1.63|824| |TCS Inversiones Chile Limitada|Chile|100.00|100.00|0.28|279|0.10|49|-|-|0.11|49| |TCS Solution Center S.A.|Uruguay|100.00|100.00|0.33|320|0.14|73|-|-|0.14|73| |TATASOLUTION CENTER S.A.|Ecuador|100.00|100.00|0.10|96|-|-|(0.52)|(1)|-|(1)| |MGDC S.C.|Mexico|100.00|100.00|0.03|27|(0.07)|(36)|-|-|(0.07)|(36)| |TCS Uruguay S.A.|Uruguay|100.00|100.00|0.25|246|0.19|98|-|-|0.19|98| |Tata Consultancy Services Guatemala, S.A.|Guatemala|100.00|100.00|0.03|27|0.01|7|-|-|0.01|7| # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2024|% of voting power as at March 31, 2023|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of total comprehensive income (` crore)|Share in total comprehensive income (` crore)| | |---|---|---|---|---|---|---|---|---| |Tata Consultancy Services Belgium|Belgium|100.00|100.00|0.60|586|0.23|117| | |Tata Consultancy Services De España S.A.|Spain|100.00|100.00|0.13|131|0.02|9| | |Tata Consultancy Services Deutschland GmbH|Germany|100.00|100.00|0.93|909|0.20|101| | | | | | |0.20|(0.52)|(1)|0.20|100| |Tata Consultancy Services Italia s.r.l.|Italy|100.00|100.00|0.08|82|0.01|4| | |Tata Consultancy Services Netherlands BV|Netherlands|100.00|100.00|3.49|3,397|1.12|563| | |Tata Consultancy Services Sverige AB|Sweden|100.00|100.00|1.19|1,157|0.53|266| | |Tata Consultancy Services (Portugal) Unipessoal, Limitada|Portugal|100.00|100.00|0.06|54|0.04|19| | |Diligenta Limited|U.K.|100.00|100.00|1.72|1,673|0.45|226| | | | | | |(3.63)|(7)|0.43|219| | |Tata Consultancy Services Capellen (G.D. de Luxembourg)|Luxembourg|100.00|100.00|0.13|123|0.12|62| | |Tata Consultancy Services Switzerland Ltd.|Switzerland|100.00|100.00|0.89|866|0.41|207| | | | | | |(9.84)|(19)|0.37|188| | |Tata Consultancy Services France|France|100.00|100.00|(0.28)|(275)|0.19|97| | |Tata Consultancy Services Saudi Arabia|Saudi Arabia|100.00|100.00|0.17|161|0.05|27| | |Tata Consultancy Services UK Limited|U.K.|100.00|100.00|0.03|34|0.01|4| | |TCS Business Services GmbH|Germany|100.00|100.00|0.10|97|0.03|13| | | | | | |4.15|8|0.04|21| | |Tata Consultancy Services Bulgaria EOOD|Bulgaria|100.00|100.00|0.03|33|0.01|6| | |Tata Consultancy Services Ireland Limited|Ireland|100.00|100.00|0.46|444|0.22|113| | |TCS Technology Solutions GmbH|Germany|100.00|100.00|0.89|866|0.17|85| | | | | | |31.61|61|0.29|146| | |Tata Consultancy Services Osterreich GmbH|Austria|100.00|100.00|0.01|5|-|1| | | | | | |-|-|-|-| | |Saudi Desert Rose Holding B.V.|Netherlands|-|100.00|-|-|-|-| | |Diligenta (Europe) B.V.|Netherlands|100.00|-|-|-|-|-| | # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2024|% of voting power as at March 31, 2023|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of total comprehensive income (` crore)|Share in total comprehensive income (` crore)| | | |---|---|---|---|---|---|---|---|---|---| |Tata Consultancy Services Pacific Pte Ltd.|Singapore|100.00|100.00|1.08|1,049|0.54|271| | | |Tata Consultancy Services Sdn Bhd|Malaysia|100.00|100.00|0.10|96|0.11|56| | | |TCS FNS Pty Limited|Australia|100.00|100.00|0.14|141|0.10|51| | | |TCS Financial Solutions Australia Pty Limited|Australia|100.00|100.00|0.09|54|0.06|32| | | |PT Tata Consultancy Services Indonesia|Indonesia|100.00|100.00|0.03|27|0.02|10| | | |Tata Consultancy Services (China) Co., Ltd.|China|100.00|100.00|0.38|371|0.15|74| | | |TCS Financial Solutions Beijing Co., Ltd.|China|100.00|100.00|0.04|40|0.01|5| | | |Tata Consultancy Services (Thailand) Limited|Thailand|100.00|100.00|0.02|15|0.02|9| | | |Tata Consultancy Services (Philippines) Inc.|Philippines|100.00|100.00|0.17|161|(2.07)|(4)| | | |Tata Consultancy Services Japan, Ltd.|Japan|66.00|66.00|1.78|1,743|0.82|410| | | |Tata Consultancy Services (Africa) (PTY) Ltd.|South Africa|100.00|100.00|0.05|47|0.07|35| | | |Tata Consultancy Services (South Africa) (PTY) Ltd.|South Africa|100.00|100.00|0.11|105|0.10|50| | | |Tata Consultancy Services Qatar L.L.C.|Qatar|100.00|100.00|0.05|51|0.03|16| | | |Trusts|India|-|-|0.32|307|0.02|12| | | |TOTAL|100.00|-|97,305|100.00|50,481|100.00|193|100.00|50,674| # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements |Name of the entity|Country of incorporation|% of voting power as at March 31, 2024|% of voting power as at March 31, 2023|Net assets, i.e. total assets minus total liabilities (` crore)|Share in Profit or loss As % of consolidated profit or loss (` crore)|Share in other comprehensive income As % of total comprehensive income (` crore)| |---|---|---|---|---|---|---| |a) Adjustments arising out of consolidation| | | |(5,986)|(4,382)|44| |b) Non-controlling interests| | | | | | | |Indian subsidiaries| | | | | | | |APTOnline Limited| |(14)|(2)| |(2)| | |C-Edge Technologies Limited| |(201)|(46)| |(46)| | |MP Online Limited| |(15)|(3)| |(3)| | |MahaOnline Limited| |(22)|(2)| |(2)| | |Foreign subsidiaries| | | | | | | |Tata Consultancy Services (China) Co., Ltd.| | | | | | | |Tata Consultancy Services Japan, Ltd.| |(577)|(137)|62|(75)| | |TOTAL| |(830)|(191)|62|(129)| | |TOTAL| | | |90,489|45,908|299| | | | | |46,207| | | # Notes: 1. TCS Technology Solutions AG renamed as TCS Technology Solutions GmbH. 2. Saudi Desert Rose Holding B.V. merged with Tata Consultancy Services Netherlands BV w.e.f. August 29, 2023. 3. Diligenta Limited incorporated a subsidiary, Diligenta (Europe) B.V. |
in Netherlands on September 14, 2023. # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 22) Related party transactions The Company's principal related parties consist of its holding company Tata Sons Private Limited and its subsidiaries, its own subsidiaries, affiliates and key managerial personnel. The Group's material related party transactions and outstanding balances are with related parties with whom the Group routinely enter into transactions in the ordinary course of business. Refer note 21 for list of subsidiaries of the Company. Transactions and balances with its own subsidiaries are eliminated on consolidation. # Transactions with related parties are as follows: | |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---| |Revenue from operations|50|1,025|4,495|-|5,570| |Purchases of goods and services (including reimbursements)|2|1,390|250|-|1,642| |Brand equity contribution|352|-|-|-|352| |Facility expenses|1|20|73|-|94| |Lease rental|-|49|46|-|95| |Bad debts and advances written off, allowance for expected credit losses and doubtful advances (net)|-|7|(1)|-|6| |Contribution and advance to post employment benefit plans|-|-|-|3,783|3,783| |Purchase of property, plant and equipment|-|108|98|-|206| |Advances given|-|1,013|98|-|1,111| |Advances recovered|-|8|4|-|12| |Advances taken|-|27|1|-|28| |Dividend paid|18,177|8|2|-|18,187| |Buy-back of shares|10,548|4|3|-|10,555| # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements | |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---| |Revenue from operations|38|1,174|3,050|-|4,262| |Purchases of goods and services (including reimbursements)|1|610|225|-|836| |Brand equity contribution|227|-|-|-|227| |Facility expenses|1|25|59|-|85| |Lease rental|-|56|47|-|103| |Bad debts and advances written off, allowance for expected credit losses and doubtful advances (net)|-|(1)|-|-|(1)| |Contribution and advance to post employment benefit plans|-|-|-|2,955|2,955| |Purchase of property, plant and equipment|-|13|137|-|150| |Advances given|-|1|45|-|46| |Advances recovered|-|1|15|-|16| |Advances taken|-|25|4|-|29| |Dividend paid|29,881|16|6|-|29,903| # 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| |---|---|---|---|---|---| |Trade receivables and contract assets|5|411|1,509|-|1,925| |Loans, other financial assets and other assets|2|1,238|9|-|1,249| | |7|1,649|1,518|-|3,174| # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements | |Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---| |Trade receivables and contract assets|2|434|1,004|-|1,440| |Loans, other financial assets and other assets|10|95|85|-|190| | |12|529|1,089|-|1,630| # 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| |---|---|---|---|---|---| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities|355|1,003|428|-|1,786| |Commitments|-|1,412|13|-|1,425| # As at March 31, 2023 | |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| |---|---|---|---|---|---| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities|213|377|322|278|1,190| |Commitments|-|12|50|-|62| # Material related party transactions are as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| | | | | | |---|---|---|---|---|---|---|---| |Revenue from operations| | | |2,902| | |1,707| |Jaguar Land Rover Limited| | | |2,902| | |1,707| |Tata Steel IJmuiden BV| | | |599| | |533| |Tata Digital Private Limited| | | |286| | |502| |Purchases of goods and services (including reimbursements) and net of cost recovery|Tejas Networks Limited| | |754| | |-| |Advances given|Tejas Networks Limited| | |960| | |-| # Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # Material related party balances are as follows: | |As at March 31, 2024|As at March 31, 2023| | |---|---|---|---| |Trade receivables and contract assets|Jaguar Land Rover Limited|898|482| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities|Tejas Networks Limited|607|-| |Loans, other financial assets and other assets|Tejas Networks Limited|960|-| # Transactions with key management personnel are as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Short-term benefits|57|58| |Dividend paid during the year|1|2| |Post-employment benefits|2|-| | |60|60| The remuneration of directors and key executives is determined by the nomination and remuneration committee having regard to the performance of individuals and market trends. Transactions with key management personnel for the year ended March 31, 2023 did not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation / premium paid were 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. # 24) 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. # 25) The sitting fees and commission paid to non-executive directors is `15 crore and `13 crore as at March 31, 2024 and 2023, respectively. # 26) The Board of Directors approved post-employment benefits, payable to the outgoing CEO and Managing Director, which has been actuarially valued. Accordingly, the Company has recorded an expense of `48 crore during the year ended March 31, 2024. # 27) File: AR_TCS_2023_2024.md 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. # 28) TCS Technology Solutions AG renamed as TCS Technology Solutions GmbH. # 29) Saudi Desert Rose Holding B.V. merged with Tata Consultancy Services Netherlands BV w.e.f. August 29, 2023. # 30) Diligenta Limited incorporated a subsidiary, Diligenta (Europe) B.V. in Netherlands on September 14, 2023. Integrated Annual Report 2023-24 # Consolidated Financial Statements 2023-24 # Notes forming part of Consolidated Financial Statements # 30) Dividends Dividends paid during the year ended March 31, 2024 include an amount of `24.00 per equity share towards final dividend for the year ended March 31, 2023 and an amount of `45.00 per equity share towards interim dividends (including special dividend) for the year ended March 31, 2024. 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 declared by the Company are based on profits available for distribution. On April 12, 2024, the Board of Directors of the Company have proposed a final dividend of `28.00 per share in respect of the year ended March 31, 2024 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately `10,131 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, 2024 For and on behalf of the Board K Krithivasan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 # Integrated Annual Report 2023-24 # 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 2024, 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 material 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 2024, and its profit and other comprehensive income, 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: 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. Involvement of our Information technology ('IT') specialists, as required: Assessed the IT environment in which the business systems operate and tested system controls over computation of revenue recognised; Tested the IT controls over appropriateness of cost and revenue reports generated by the system; Tested the controls pertaining to allocation of resources and budgeting systems which prevent the unauthorized recording/changes to costs incurred;| Integrated Annual Report 2023-24 # Standalone Financial Statements # The key audit matter - 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 in mainly 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; - These contracts may involve onerous obligations which requires critical assessment of foreseeable losses to be made by the Company; and - 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 - Tested on a random sampling basis the controls relating to the estimation of contract costs required to complete the respective projects. - On selected specific and statistical samples of contracts, we tested that the revenue recognized is in accordance with the revenue recognition accounting standard including - # 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 operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Company's financial reporting process. # Auditor's Responsibilities for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. Integrated Annual Report 2023-24 # 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. - 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 except for the matters stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014. 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 01 April 2024 to 10 April 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164(2) of the Act. 6. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2A(b) above on reporting under Section 143(3)(b) of the Act and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014. 7. 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". 3. B. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: 1. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial # Standalone Financial Statements Refer income tax liabilities disclosed in the balance sheet along with Note 19 to the standalone financial statements. b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. c. |
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. d. (i) The management has represented that, to the best of its 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. (ii) The management has represented that, to the best of its 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. (iii) 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. e. 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 26 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. f. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1 April 2023. Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software: i. The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting softwares used for maintaining the books of account relating to payroll, consolidation process and certain non-editable fields/tables of the accounting software used for maintaining general ledger. ii. The feature of recording audit trail (edit log) facility was not enabled at the application layer of the accounting softwares relating to revenue, trade receivables and general ledger for the period 1 April 2023 to 13 November 2023 and relating to property, plant and equipment for the period 1 April 2023 to 14 December 2023. Further, for the periods where audit trail (edit log) facility was enabled and operated throughout the year for the respective accounting software, we did not come across any instance of the audit trail feature being tampered with. 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 2024 ICAI UDIN: 24060154BKFDGZ4646 Integrated Annual Report 2023-24 # Standalone Financial Statements # Annexure A to the Independent Auditor's Report on the Standalone Financial Statements of Tata Consultancy Services Limited for the year ended 31 March 2024 (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 lease 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 10% or more in the aggregate for each class of inventory. (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. In our opinion, the quarterly returns or statements filed by the Company with such banks are in agreement with the books of account of the Company. The Company has not been sanctioned any working capital limit from the financial institutions. # (iii) File: AR_TCS_2023_2024.md According to the information and explanations given to us and on the basis of our examination of the records, the Company has made investments and has granted loans or advances in the nature of loans, unsecured, to other parties during the year, in respect of which the requisite information is as below. The Company has not made any investments and has not granted any loans or 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. # Standalone Financial Statements |Particulars|Guarantees|Security|Loans|Advances in nature of loans| |---|---|---|---|---| |Aggregate amount during the year|Subsidiaries*|-|-|-| | |Joint ventures*|-|-|-| | |Associates*|-|-|-| | |Others|-|319|412| |Balance outstanding as at balance sheet date|Subsidiaries*|-|-|-| | |Joint ventures*|-|-|-| | |Associates*|-|-|-| | |Others|-|319|173| *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 investments 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 interest free loans and advances in the nature of loans given, the repayment of principal has been stipulated and the repayments or receipts have been regular. In case of interest bearing loans given, the schedule of 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 loans given. (e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no loan 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 of the Company, the Company has not given any loans, or provided any guarantee or security as specified under Section 185 and 186 of the Companies Act, 2013 ("the Act"). In respect of the investments made by the Company, in our opinion the provisions of Section 186 of the Act have been complied with. (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 2024 for a period of more than six months from the date they became payable. |
Integrated Annual Report 2023-24 # Standalone Financial Statements (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|2,112|Assessment Year- 2011-2012, 2018-2019, 2021-2022|Commissioner of Income tax (Appeals)| | | | |193|Assessment Year- 2006-2007|Income Tax Appellate Tribunal| | | | |36|Assessment Year- 2013-2014, 2016-2017|Assessing Officer / National Faceless Assessment Centre| | |The Central Sales Tax and VAT Act, 1956|Sales tax and VAT|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| | | | |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| | | | |18|Financial Year- 1997-1998, 2005-2006, 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Joint Commissioner| | | | |11|Financial Year- 1990-1991, 1997-1998, 2002-2003, 2003-2004, 2004-2005, 2005-2006, 2006-2007, 2011-2012, 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Tribunal| | |The Finance Act, 1994|Service tax|2|Financial Year- 2002-2003, 2003-2004, 2004-2005, 2008-2009, 2009-2010, 2010-2011, 2011-2012, 2012-2013, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Commissioner Appeals| | | | |213|Financial Year- 2002-2003, 2003-2004, 2004-2005, 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011, 2011-2012, 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017-2018|Tribunal| | |Goods and Service Tax Act|Goods and Services Tax|17|Financial Year- 2017-2018, 2018-2019, 2020-2021|Commissioner Appeals| | ** These amounts are net of amount paid/ adjusted under protest of ` 318 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. (e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries as defined under the 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 2024. (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 2024. (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. # Standalone Financial Statements (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 four 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) 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 multiyear 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 2024 ICAI UDIN: 24060154BKFDGZ4646 Integrated Annual Report 2023-24 # Standalone Financial Statements # Annexure B to the Independent Auditor's Report on the standalone financial statements of Tata Consultancy Services Limited for the year ended 31 March 2024 # 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)(g) 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 2024 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 2024, 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 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 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 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 2024 ICAI UDIN: 24060154BKFDGZ4646 # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Standalone Balance Sheet |(` crore)|Note|As at March 31, 2024|As at March 31, 2023| | |---|---|---|---|---| |ASSETS|ASSETS|ASSETS|ASSETS| | | | | |Non-current assets|Non-current assets|Non-current assets|Non-current assets| | | | | |Property, plant and equipment|8(a)|8,336|9,186| | |Capital work-in-progress|8(a)|1,450|1,103| | |Right-of-use assets|7|6,154|5,695| | |Intangible assets|8(b)|463|809| | |Financial assets|Financial assets|Financial assets|Financial assets| | | | | |Investments|6(a)|2,405|2,405| | |Trade receivables|Billed|6(b)|127|125| |Unbilled| |65|196| | |Loans|6(e)|2|3| | |Other financial assets|6(f)|626|532| | |Deferred tax assets (net)|15|2,524|2,464| | |Income tax assets (net)| |1,062|2,115| | |Other assets|8(c)|3,016|2,410| | |Total non-current assets| |26,230|27,043| | |Current assets|Current assets|Current assets|Current assets| | | | | |Inventories|8(d)|27|27| | |Financial assets|Financial assets|Financial assets|Financial assets| | | | | |Investments|6(a)|29,840|35,738| | |Trade receivables|Billed|6(b)|38,591|35,534| |Unbilled| |7,477|7,264| | |Cash and cash equivalents|6(c)|3,644|1,462| | |Other balances with banks|6(d)|2,955|3,081| | |Loans|6(e)|317|332| | |Other financial assets|6(f)|1,559|1,557| | |Income tax assets (net)| |111| | | |Other assets|8(c)|10,397|7,789| | |Total current assets| |94,918|92,784| | |TOTAL ASSETS| |1,21,148|1,19,827| | |EQUITY AND LIABILITIES|EQUITY AND LIABILITIES|EQUITY AND LIABILITIES|EQUITY AND LIABILITIES| | | | | |Equity|Share capital|6(n)|362|366| |Other equity|9|71,758|74,172| | |Total equity| |72,120|74,538| | |Liabilities|Non-current liabilities| | | | |Financial liabilities|Lease liabilities| |5,128|4,698| |Other financial liabilities|6(i)|315|340| | |Employee benefit obligations|12|144|95| | |Deferred tax liabilities (net)|15|154|190| | |Unearned and deferred revenue| |226|642| | |Total non-current liabilities| |5,967|5,965| | |Current liabilities|Financial liabilities| | | | |Lease liabilities| |1,017|961| | |Trade payables|Dues of small enterprises and micro enterprises|6(g)|79|13,768| |Dues of creditors other than small enterprises and micro enterprises|6(h)|14,520| | | |Other financial liabilities|6(i)|6,286|6,948| | |Unearned and deferred revenue| |2,811|2,962| | |Other liabilities|8(e)|4,458|3,113| | |Provisions|8(f)|71|279| | |Employee benefit obligations|12|3,332|3,022| | |Income tax liabilities (net)| |10,487|8,271| | |Total current liabilities| |43,061|39,324| | |TOTAL EQUITY AND LIABILITIES| |1,21,148|1,19,827| | # 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 K Krithivasan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 Mumbai, April 12, 2024 # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Standalone Statement of Profit and Loss |(` crore)|Note|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---|---| |Revenue from operations|10|202,359|1,90,354| |Other income|11|7,273|5,328| |TOTAL INCOME| |209,632|1,95,682| |Expenses| | | | |Employee benefit expenses|12|103,139|96,218| |Cost of equipment and software licences|13(a)|3,347|1,416| |Finance costs|14|673|695| |Depreciation and amortisation expense| |3,887|3,940| |Other expenses|13(b)|40,026|41,723| |TOTAL EXPENSES| |151,072|1,43,992| |PROFIT BEFORE EXCEPTIONAL ITEM AND TAX| |58,560|51,690| |Exceptional item| | | | |Settlement of legal claim|19|958|-| |PROFIT BEFORE TAX| |57,602|51,690| |Tax expense| | | | |Current tax|15|14,178|12,946| |Deferred tax|15|(135)|(362)| |TOTAL TAX EXPENSE| |14,043|12,584| |PROFIT FOR THE YEAR| |43,559|39,106| |OTHER COMPREHENSIVE INCOME (OCI)| | | | |Items that will not be reclassified subsequently to profit or loss| | | | |Remeasurement of defined employee benefit plans| |(60)|54| |Income tax on items that will not be reclassified subsequently to profit or loss| |(12)| | |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| |237|(679)| |Net change in intrinsic value of derivatives designated as cash flow hedges| |1|(25)| |Net change in time value of derivatives designated as cash flow hedges| |13|32| |Income tax on items that will be reclassified subsequently to profit or loss| |(39)|236| |TOTAL OTHER COMPREHENSIVE INCOME / (LOSSES)| |165|(394)| |TOTAL COMPREHENSIVE INCOME FOR THE YEAR| |43,724|38,712| |Earnings per equity share:- Basic and diluted (`)|16|119.44|106.88| |Weighted average number of equity shares| |364,68,51,755|365,90,51,373| # 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 K Krithivasan CEO and Managing Director File: AR_TCS_2023_2024.md N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 Mumbai, April 12, 2024 # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # A. EQUITY SHARE CAPITAL (` crore) |Balance as at|Changes in equity share capital|Restated balance as at|Changes in equity share capital|Balance as at| |---|---|---|---|---| |April 1, 2023|due to prior period errors| |during the year*|March 31, 2024| |366|-|366|(4)|362| |April 1, 2022|due to prior period errors| |during the year|March 31, 2023| |366|-|366|-|366| *Refer note 6(n) # B. OTHER EQUITY (` crore) |Reserves and surplus|Items of other comprehensive income|Total Equity| | | | | | | |---|---|---|---|---|---|---|---|---| |Capital|Capital redemption reserve|Special Economic Zone reserve|Retained earnings|Investment revaluation reserve|Cash flow hedging reserve| | | | | | | | | | | | | | |Balance as at April 1, 2023|-|17|11,809|62,228|138|8|(28)|74,172| |Profit for the year|-|-|43,559|-|-|-|43,559| | |Other comprehensive income / (losses)|-|-47|201|1|10|165| | | |Total comprehensive income|-|43,512|201|1|10|43,724| | | |Dividend|-|(25,137)|-|-|-|(25,137)| | | |Expenses for buy-back of equity shares|(Refer note 6(n))|-|(46)|-|-|(46)| | | |Tax on buy-back of equity shares|(Refer note 6(n))|-|(3,959)|-|-|(3,959)| | | |Buy-back of equity shares|(Refer note 6(n))|-|4|(17,000)|-|-|(16,996)| | |Transfer to Special Economic Zone re-investment reserve|-|9,875|(9,875)|-|-|-| | | |Transfer from Special Economic Zone re-investment reserve|-|(5,450)|5,450|-|-|-| | | |Balance as at March 31, 2024|-|21|16,234|55,173|339|9|(18)|71,758| |Balance as at April 1, 2022|-|177,287|68,949|580|27|(53)|76,807| | |Profit for the year|-|-|39,106|-|-|-|39,106| | |Other comprehensive income / (losses)|-|42|(442)|(19)|25|(394)| | | |Total comprehensive income|-|39,148|(442)|(19)|25|38,712| | | |Dividend|-|(41,347)|-|-|-|(41,347)| | | |Transfer to Special Economic Zone re-investment reserve|-|8,380|(8,380)|-|-|-| | | |Transfer from Special Economic Zone re-investment reserve|-|(3,858)|3,858|-|-|-| | | |Balance as at March 31, 2023|-|17|11,809|62,228|138|8|(28)|74,172| *Represents value less than `0.50 crore. Loss of `47 crore and gain of `42 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, 2024 and 2023, respectively. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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 K Krithivasan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 Mumbai, April 12, 2024 # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Standalone Statement of Cash Flows | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |CASH FLOWS FROM OPERATING ACTIVITIES| | | |Profit for the year|43,559|39,106| |Adjustments for:| | | |Depreciation and amortisation expense|3,887|3,940| |Bad debts and advances written off, allowance for expected credit losses and doubtful advances (net)|97|110| |Tax expense|14,043|12,584| |Net (gain) / loss on lease modification|(2)|3| |Net gain on sub-lease|-|(7)| |Unrealised foreign exchange gain|(11)|(185)| |Net gain on disposal of property, plant and equipment|(8)|(27)| |Net gain on disposal / fair valuation of investments|(264)|(209)| |Interest income|(3,382)|(3,046)| |Dividend income (including exchange impact)|(3,288)|(2,112)| |Finance costs|673|695| |Operating profit before working capital changes|55,304|50,852| |Net change in| | | |Inventories|-|(8)| |Trade receivables| | | |Billed|(3,145)|(5,817)| |Unbilled|(82)|(1,157)| |Loans and other financial assets|(291)|192| |Other assets|(3,125)|(384)| |Trade payables|831|3,686| |Unearned and deferred revenue|(567)|31| |Other financial liabilities|(698)|1,222| |Other liabilities and provisions|1,498|(654)| |Cash generated from operations|49,725|47,963| |Taxes paid (net of refunds)|(10,583)|(10,934)| |Net cash generated from operating activities|39,142|37,029| |CASH FLOWS FROM INVESTING ACTIVITIES| | | |Bank deposits placed|(6,489)|(3,528)| |Inter-corporate deposits placed|-|(7,580)| |Purchase of investments|(128,764)|(122,721)| |Payment for purchase of property, plant and equipment|(1,720)|(2,041)| |Payment including advances for acquiring right-of-use assets|(17)|(94)| |Payment for purchase of intangible assets|(411)|(340)| |Proceeds from bank deposits|6,605|5,930| |Proceeds from inter-corporate deposits|-|12,966| |Proceeds from disposal / redemption of investments|135,375|115,825| |Proceeds from sub-lease receivable|10|5| # Standalone Financial Statements 2023-24 # Standalone Statement of Cash Flows | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Proceeds from disposal of property, plant and equipment|14|29| |Interest received|2,670|2,933| |Dividend received from subsidiaries|3,534|1,866| |Net cash generated from investing activities|10,807|3,250| |CASH FLOWS FROM FINANCING ACTIVITIES|CASH FLOWS FROM FINANCING ACTIVITIES|CASH FLOWS FROM FINANCING ACTIVITIES| |Repayment of lease liabilities|(1,061)|(1,006)| |Interest paid|(590)|(697)| |Dividend paid|(25,137)|(41,347)| |Transfer of funds to buy-back escrow account|(425)|-| |Transfer of funds from buy-back escrow account|425|18| |Expenses for buy-back of equity shares (Refer note 6(n))|(46)|-| |Tax on buy-back of equity shares (Refer note 6(n))|(3,959)|(4,192)| |Buy-back of equity shares (Refer note 6(n))|(17,000)|-| |Net cash used in financing activities|(47,793)|(47,224)| |Net change in cash and cash equivalents|2,156|(6,945)| |Cash and cash equivalents at the beginning of the year|1,462|8,197| |Exchange difference on translation of foreign currency cash and cash equivalents|26|210| |Cash and cash equivalents at the end of the year|3,644|1,462| |Components of cash and cash equivalents|Components of cash and cash equivalents|Components of cash and cash equivalents| |Balances with banks| | | |In current accounts|1,359|776| |In deposit accounts|2,285|686| |Cheques on hand|-*|-*| |Cash on hand|-*|-*| |Remittances in transit|-*|-*| |Total|3,644|1,462| *Represents value less than `0.50 crore. Refer note 13(c) for amount spent during the years ended March 31, 2024 and 2023 on construction / acquisition of any asset and other purposes relating to CSR activities. # 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 K Krithivasan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 Mumbai, April 12, 2024 Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2024, Tata Sons Private Limited, the holding company owned 71.74% of the Company's equity share capital. The Board of Directors approved the standalone financial statements for the year ended March 31, 2024 and authorised for issue on April 12, 2024. # 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 material accounting policy information related to 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 judgements, estimates and assumptions in preparation of its standalone financial statements: (a) Revenue recognition Revenue for fixed-price contracts is recognised using percentage-of-completion method. |
The Company estimates the future cost-to-completion of the contracts which is used to determine degree of completion of the performance obligation. The Company exercises judgement for identification of performance obligations, determination of transaction price, ascribing the transaction price to each distinct performance obligation and in determining whether the performance obligation is satisfied at a point in time or over a period of time. These judgements have been explained in detail under the revenue note (Refer note 10). (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 (Refer note 8(a)). (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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # (d) Fair value measurement of financial instruments When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. # (i) 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. # (e) Impairment of financial assets (other than at fair value) Measurement of impairment of financial assets require use of estimates, which have been explained in the note on financial assets, financial liabilities and equity instruments, under impairment of financial assets (other than at fair value) (Refer note 6). # (f) Provision for income tax and deferred tax assets The Company uses 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. # 5) Recent pronouncements Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company. # (g) Provisions and contingent liabilities The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required to settle the obligations. |
These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates. The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are disclosed 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. # (h) 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 (Refer note 12). 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. # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements 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 financial risk management policy as approved by the Risk Management Committee. The policy provides principles on the use of such financial derivatives consistent with the risk management strategy of the Company. While determining the appropriate hedge ratio, the Company takes into consideration the prevailing macro-economic conditions, the availability and liquidity of the hedging instruments, tolerance levels for hedge ineffectiveness and the costs of hedging. The hedging activities are reviewed by the Risk Management Committee every quarter and future course of action is determined. The hedge instruments are designated and documented as hedges at the inception of the contract. The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The effectiveness of hedge instruments to reduce the risk associated with the exposure being hedged is assessed and measured at inception and on an ongoing basis. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately reclassified in net foreign exchange gains in the statement of profit and loss. |
The effective portion of change in the fair value of the designated hedging instrument is recognised in the other comprehensive income and accumulated under the heading cash flow hedging reserve. The Company separates the intrinsic value and time value of an option and designates as hedging instruments only the change in intrinsic value of the option. The change in fair value of the intrinsic value and time value of an option is recognised in the other comprehensive income and accounted as a separate component of equity. Such amounts are reclassified into the statement of profit and loss when the related hedged items affect profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity till that time remains and is recognised in the statement of profit and loss when the forecasted transaction ultimately affects profit and loss. Any gain or loss is recognised immediately in the statement of profit and loss when the hedge becomes ineffective. # Instruments not in hedging relationship The Company enters into contracts that are effective as hedges from an economic perspective, but they do not qualify for hedge accounting. The change in the fair value of such instrument is recognised in the statement of profit and loss. # Impairment of financial assets (other than at fair value) The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements financing transaction. In determining the allowance for expected credit losses, 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. # (a) Investments Investments consist of the following: # Investments - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |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 | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Investments carried at fair value through profit or loss| | | |Mutual fund units (quoted)|749|1,147| |Investments carried at fair value through OCI| | | |Government bonds and securities (quoted)|24,746|26,128| |Corporate bonds (quoted)|3,406|3,110| |Investments carried at amortised cost| | | |Certificate of deposits (quoted)|-|2,955| |Commercial papers (quoted)|939|2,398| | |29,840|35,738| Government bonds and securities includes bonds pledged with bank for credit facility amounting to NIL and `1,650 crore as at March 31, 2024 and 2023, respectively. |
# Aggregate value of quoted and unquoted investments is as follows: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Aggregate value of quoted investments|29,840|35,738| |Aggregate value of unquoted investments (net of impairment)|2,405|2,405| |Aggregate market value of quoted investments|29,841|35,736| |Aggregate value of impairment of investments|19|19| # Market value of quoted investments carried at amortised cost is as follows: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Certificate of deposits|-|2,951| |Commercial papers|940|2,400| File: AR_TCS_2023_2024.md Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2024|As at March 31, 2023| |---|---|---|---|---|---| |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|-|-| |Total|Total|Total|Total|2,405|2,405| Equity instruments designated at fair value through OCI: |In Numbers|Currency|Face value per share|Investment in subsidiaries|As at March 31, 2024|As at March 31, 2023| |---|---|---|---|---|---| |1,90,00,000|INR|10|Taj Air Limited|19|19| | | |Less : Impairment in value of investments|(19)|(19)| | |Total|-|-| | | | *Represents value less than `0.50 crore. |
Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # The movement in fair value of investments carried / designated at fair value through OCI is as follows: |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Balance at the beginning of the year|138|580| |Net gain / (loss) arising on revaluation of investments other than equities carried at fair value through other comprehensive income|248|(675)| |Deferred tax relating to net gain / (loss) arising on revaluation of investments other than equities carried at fair value through other comprehensive income|(39)|236| |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|(11)|(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|3|1| |Balance at the end of the year|339|138| # (b) Trade receivables - Billed Trade receivables- Billed (unsecured) consist of the following: # Trade receivables - Billed - Non-current |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Trade receivables- Billed|760|771| |Less: Allowance for expected credit losses|(633)|(646)| |Considered good|127|125| # Ageing for trade receivables - non-current outstanding as at March 31, 2024 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|-|-|-|55|86|585|726| |Disputed trade receivables - considered good|-|-|-|2|-|32|34| | |-|-|-|57|86|617|760| |Less: Allowance for expected credit losses| | | | | |(633)| | | | | | | | |127| | # Trade receivables - Unbilled 65 192 Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Ageing for trade receivables - 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 expected credit losses (646) Trade receivables - Unbilled (125) Trade receivables - Billed (196) Trade receivables - Unbilled (321) # Trade receivables - Billed - Current |Particulars|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Trade receivables- Billed|38,856|35,731| |Less: Allowance for expected credit losses|(320)|(275)| |Considered good|38,536|35,456| |Trade receivables- Billed|190|256| |Less: Allowance for expected credit losses|(135)|(178)| |Credit impaired|55|78| | |38,591|35,534| # Ageing for trade receivables- billed - current outstanding as at March 31, 2024 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|30,928|6,787|933|18|52|113|38,831| | |Undisputed trade receivables - credit impaired|-|6|15|53|12|104|190| | |Disputed trade receivables - considered good|-|-|-|-|-|25|25| | | |30,928|6,793|948|71|64|242|39,046| Less: Allowance for expected credit losses (455) Trade receivables - Unbilled (38,591) Trade receivables - Unbilled (7,477) Trade receivables - Unbilled (46,068) # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 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|28,935|5,292|1,124|135|16|191|35,693| |Undisputed trade receivables - considered good|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 expected credit losses (453) 35,534 Trade receivables - Unbilled 7,264 42,798 Above balances of trade receivables- billed include balances with related parties (Refer note 20). # (c) Cash and cash equivalents Cash and cash equivalents consist of the following: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Balances with banks| | | |In current accounts|1,359|776| |In deposit accounts|2,285|686| |Cheques on hand|-*|-*| |Cash on hand|-*|-*| |Remittances in transit|-*|-*| | |3,644|1,462| *Represents value less than `0.50 crore. |
# (d) Other balances with banks Other balances with banks consist of the following: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Earmarked balances with banks|455|653| |Short-term bank deposits|2,500|2,428| | |2,955|3,081| Earmarked balances with banks primarily relate to margin money for purchase of investments and unclaimed dividends. # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # (e) Loans Loans (unsecured) consist of the following: # Loans - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Considered good|2|3| |Loans to employees|2|3| # Loans - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Considered good|317|332| |Credit impaired|-|31| |Less: Allowance for loans to employees|-|(31)| | |317|332| # (f) Other financial assets Other financial assets consist of the following: # Other financial assets - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Security deposits|600|508| |Long-term bank deposits|12|-| |Others|14|24| | |626|532| # Other financial assets - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Security deposits|320|296| |Fair value of foreign exchange derivative assets|113|190| |Interest receivable|665|624| |Advances to employees|261|-| |Less: Allowance for advances to employees|(41)|-| |Others|241|447| | |1,559|1,557| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2024 and 2023 is as under: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Dues remaining unpaid to any supplier|79|-| |Principal|79|-| |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|24|32| |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, 2024 is as follows: |Particulars|Not due|Outstanding for following periods from due date of payment| | |Total| | | |---|---|---|---|---|---|---|---| | | |Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | | |Trade payables|MSME*|79|-|-|-|79| | |Others|3,269|5,729|18|5|42|9,063| | |Disputed dues- Others| |2|2|-|-|30|34| | |3,350|5,731|18|5|72|9,176| | Accrued expenses 5,423 14,599 *MSME as per the Micro, Small and Medium Enterprises Development Act, 2006. 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 13,768 Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2024|As at March 31, 2023| |---|---|---| |Capital creditors|69|111| |Others|246|229| |Total|315|340| Others include advance taxes paid of `226 crore and `226 crore as at March 31, 2024 and 2023, 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, 2024|As at March 31, 2023| |---|---|---| |Accrued payroll|3,957|4,970| |Unclaimed dividends|53|51| |Fair value of foreign exchange derivative liabilities|109|141| |Capital creditors|582|635| |Liabilities towards customer contracts|1,419|1,075| |Others|166|76| |Total|6,286|6,948| # (j) Financial instruments by category The carrying value of financial instruments by categories as at March 31, 2024 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| | | | | | | |Cash and cash equivalents|-|-|-|-|3,644|3,644| |Bank deposits|-|-|-|-|2,500|2,500| |Earmarked balances with banks|-|-|-|-|455|455| |Investments (other than in subsidiary)|749|28,152|-|-|939|29,840| |Trade receivables| | | | | | | |Billed|-|-|-|-|38,718|38,718| |Unbilled|-|-|-|-|7,542|7,542| |Loans|-|-|-|-|319|319| |Other financial assets|-|-|46|67|2,072|2,185| |Total Financial Assets|749|28,152|46|67|56,189|85,203| | |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| | | | | | | |Trade payables|-|-|-|-|14,599|14,599| |Lease liabilities|-|-|-|-|6,145|6,145| |Other financial liabilities|-|-|-|109|6,492|6,601| |Total Financial Liabilities|-|-|-|109|27,236|27,345| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements 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| | |1,147|29,238|37|153|55,249|85,824| |Financial liabilities|Fair value through profit or loss|Fair value through other comprehensive income|Derivative instruments in hedging relationship|Derivative instruments not in hedging relationship|Amortised cost|Total carrying value| |---|---|---|---|---|---|---| |Trade payables|-|-|-|-|13,768|13,768| |Lease liabilities|-|-|-|-|5,659|5,659| |Other financial liabilities|-|-|-|141|7,147|7,288| | |-|-|-|141|26,574|26,715| Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at March 31, 2024 and 2023, 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 `940 crore and `5,351 crore as at March 31, 2024 and 2023 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. - 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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2024| | | | | | | |---|---|---|---|---|---|---| | |Level 1|Level 2|Level 3| | |Total| |Financial assets| |749|-|-|749| | |Equity shares| |-|-|-|-| | |Government bonds and securities|24,746| |-|-|24,746| | |Corporate bonds| |3,406|-|-|3,406| | |Commercial papers| |940|-|-|940| | |Fair value of foreign exchange derivative assets| |-|113|-|113| | |Total Financial Assets|29,841|113| | |-|29,954| |As at March 31, 2023| | | | | | |---|---|---|---|---|---| | |Level 1|Level 2|Level 3| |Total| |Financial assets|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| | |Fair value of foreign exchange derivative assets|-|190|-|190| | |Total Financial Assets|35,736|190| |-|35,926| # (l) Derivative financial instruments and hedging activity The Company's revenue is denominated in various foreign currencies. Given the nature of the business, a large portion of the costs are denominated in Indian Rupee. This exposes the Company to currency fluctuations. |
The Board of Directors has constituted a Risk Management Committee (RMC) to frame, implement and monitor the risk management plan of the Company which inter-alia covers risks arising out of exposure to foreign currency fluctuations. Under the guidance and framework provided by the RMC, the Company uses various derivative instruments such as foreign exchange forward, currency options and futures contracts in which the counter party is generally a bank. The following are outstanding currency options contracts, which have been designated as cash flow hedges: |Foreign currency|No. of contracts|Notional amount of contracts (In million)|Fair value (` crore)|No. of contracts|Notional amount of contracts (In million)|Fair value (` crore)| |---|---|---|---|---|---|---| |US Dollar|19|475|6|8|225|13| |Great Britain Pound|29|230|24|22|200|14| |Euro|28|235|16|22|203|10| # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements The movement in cash flow hedging reserve for derivatives designated as cash flow hedges is as follows: | |Year ended March 31, 2024| |Year ended March 31, 2023| | |---|---|---|---|---| | |Intrinsic value|Time value|Intrinsic value|Time value| |Balance at the beginning of the year|8|(28)|27|(53)| |(Gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions|(139)|241|(376)|488| |Deferred tax on (gain) / loss transferred to profit and loss on occurrence of forecasted hedge transactions|31|(55)|90|(144)| |Change in the fair value of effective portion of cash flow hedges|140|(228)|351|(456)| |Deferred tax on change in the fair value of effective portion of cash flow hedges|(31)|52|(84)|137| |Balance at the end of the year|9|(18)|8|(28)| 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, 2024 and 2023, the notional amount of outstanding contracts aggregated to `49,180 crore and `46,102 crore, respectively, and the respective fair value of these contracts have a net loss of `42 crore and gain of `12 crore. Exchange gain of `30 crore and loss of `1,159 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, 2024 and 2023, respectively. Net foreign exchange gain / (loss) include loss of `102 crore and `112 crore transferred from cash flow hedging reserve to profit and loss on occurrence of forecasted hedge transactions for the years ended March 31, 2024 and 2023, respectively. Net loss on derivative instruments of `9 crore recognised in cash flow hedging reserve as at March 31, 2024, is expected to be transferred to the statement of profit and loss by March 31, 2025. The maximum period over which the exposure to cash flow variability has been hedged is through calendar year 2024. 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, 2024|As at March 31, 2023| |---|---|---| |10% Appreciation of the underlying foreign currencies|-|-| |10% Depreciation of the underlying foreign currencies|910|544| # (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. # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 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 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 Company as disclosed in note 6(l). # Unhedged foreign currency exposure as at March 31, 2024: | |USD|EUR|GBP|Others| |---|---|---|---|---| |Net financial assets|4,243|507|379|2,143| |Net financial liabilities|(11,238)|(760)|(2,215)|(1,530)| 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 `847 crore for the year ended March 31, 2024. # 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. # Interest rate risk The Company's investments are primarily in fixed rate interest bearing investments. Hence, the Company is not significantly exposed to interest rate risk. # Credit risk Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Refer note 4 for methods, assumptions and information used to measure expected credit losses. Financial instruments that are subject to credit risk 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 `2,500 crore held with two banks having high credit rating which are individually in excess of 10% or more of the Company's total bank deposits as at March 31, 2024. None of the other financial instruments of the Company result in material concentration of credit risk. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements - 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 `90,407 crore and `90,655 crore as at March 31, 2024 and 2023, 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 receivables and contract assets as at March 31, 2024 and 2023. - 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, 2024|As at March 31, 2024|As at March 31, 2023|As at March 31, 2023| |---|---|---| |Country|Gross%|Net%|Gross%|Net%| |United States of America|52.31|53.20|54.14|55.13| |India|13.22|11.68|12.03|10.37| |United Kingdom|16.47|16.78|15.48|15.80| 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 losses on trade receivables for the years ended March 31, 2024 and 2023 was `88 crore and `98 crore, respectively. |
The reconciliation of allowance for expected credit losses is as follows: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Balance at the beginning of the year|1,099|1,137| |Change during the year|88|98| |Bad debts written off|(98)|(137)| |Translation Exchange difference|(1)|1| |Balance at the end of the year|1,088|1,099| # Liquidity risk Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generated sufficient cash flows from operations to meet its financial obligations including lease liabilities as and when they fall due. The tables below provide details regarding the contractual maturities of significant financial liabilities as at: | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| |---|---|---|---|---|---| |Non-derivative financial liabilities|14,599|-|-|-|14,599| |Lease liabilities|1,421|1,264|2,671|2,696|8,052| |Other financial liabilities|6,182|39|262|19|6,502| | |22,202|1,303|2,933|2,715|29,153| |Derivative financial liabilities|109|-|-|-|109| | |22,311|1,303|2,933|2,715|29,262| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements | |Due in 1st year|Due in 2nd year|Due in 3rd to 5th year|Due after 5th year|Total| | |---|---|---|---|---|---|---| |Non-derivative financial liabilities|Trade payables|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| # (n) Equity instruments The authorised, issued, subscribed and fully paid up share capital consist of the following: | | |As at March 31, 2024|As at March 31, 2023| | |---|---|---|---|---| |Authorised|460,05,00,000 equity shares of `1 each|460|460| | | |105,02,50,000 preference shares of `1 each|105|105| | | | | |565|565| |Issued, Subscribed and Fully paid up|361,80,87,518 equity shares of `1 each| |362|366| File: AR_TCS_2023_2024.md The Company's objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. The Company is not subject to any externally imposed capital requirements. The Board of Directors at its meeting held on October 11, 2023, approved a proposal to buy-back upto 4,09,63,855 equity shares of the Company for an aggregate amount not exceeding `17,000 crore, being 1.12% of the total paid up equity share capital at `4,150 per equity share. The shareholders approved the same on November 15, 2023, by way of a special resolution through postal ballot. A Letter of Offer was made to all eligible shareholders. The Company bought back 4,09,63,855 equity shares out of the shares that were tendered by eligible shareholders and extinguished the equity shares on December 13, 2023. Capital redemption reserve was created to the extent of share capital extinguished (`4 crore). The excess cost of buy-back of `17,046 crore (including `46 crore towards transaction cost of buy-back) over par value of shares and corresponding tax on buy-back of `3,959 crore were offset from retained earnings. # I. Reconciliation of number of shares | |As at March 31, 2024| | |As at March 31, 2023| | | |---|---|---|---|---|---|---| |Equity shares|Opening balance|365,90,51,373|366|365,90,51,373|366| | | |Shares extinguished on buy-back|(4,09,63,855)|(4)| | | | | |Closing balance|361,80,87,518|362|365,90,51,373| |366| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # II. Rights, preferences and restrictions attached to shares The Company has one class of equity shares having a par value of `1 each. Each shareholder is eligible for one vote per share held and carry a right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. # III. |
Shares held by Holding Company, its Subsidiaries and Associates | |As at March 31, 2024|As at March 31, 2023| | | |---|---|---|---|---| |Equity shares| | | | | |Holding company|259,54,99,419 equity shares (March 31, 2023: 264,43,17,117 equity shares) are held by Tata Sons Private Limited|260|264| | |Subsidiaries and Associates of Holding company|7220 equity shares (March 31, 2023: 7,220 equity shares) are held by Tata Industries Limited*| |-|-| | |10,04,425 equity shares (March 31, 2023: 10,14,172 equity shares) are held by Tata Investment Corporation Limited*| |-|-| | |46,798 equity shares (March 31, 2023: 46,798 equity shares) are held by Tata Steel Limited*| |-|-| | |766 equity shares (March 31, 2023: 766 equity shares) are held by The Tata Power Company Limited*| |-|-| | | |260|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, 2024|As at March 31, 2023| | | | |---|---|---|---|---|---| |Equity shares|Tata Sons Private Limited, the holding company|259,54,99,419| | |264,43,17,117| |% of shareholding| | |71.74%| |72.27%| # V. Equity shares movement during five years preceding March 31, 2024 * 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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # VI. Disclosure of Shareholding of Promoters Disclosure of shareholding of promoters as at March 31, 2024 is as follows: |Promoter name| |Shares held by promoters| | | |% Change| |---|---|---|---|---|---|---| | | |As at March 31, 2024| |As at March 31, 2023| |during the year| | |No. of shares|% of total shares|No. of shares|% of total shares| | | |Tata Sons Private Limited|259,54,99,419|71.74%|264,43,17,117| |72.27%|(0.53)%| |Total|259,54,99,419|71.74%|264,43,17,117| |72.27%|(0.53)%| Disclosure of shareholding of promoters as at March 31, 2023 is as follows: |Promoter name| |Shares held by promoters| | | |% Change| |---|---|---|---|---|---|---| | |As at March 31, 2023| | |As at March 31, 2022| |during the year| | |No. of shares|% of total shares|No. of shares|% of total shares| | | |Tata Sons Private Limited|264,43,17,117|72.27%|264,43,17,117|72.27%| |-| |Total|264,43,17,117|72.27%|264,43,17,117|72.27%| |-| # 7) Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Company as a lessee The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use asset is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. |
The right-of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. 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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 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, 2024|Net carrying amount as at March 31, 2024| |---|---|---| |Leasehold land|-|928| |Buildings|1,489|5,010| |Leasehold improvement|-|1| |Computer equipment|124|152| |Software licences|-|60| |Vehicles|1|1| |Furniture and fixtures|2|2| |Total|Total|6,154| # 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|Total|5,695| *Represents value less than `0.50 crore. # Depreciation on right-of-use assets is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Leasehold land|11|10| |Buildings|1,079|1,034| |Leasehold improvement|1|2| |Computer equipment|21|16| |Software licences|36|37| |Vehicles|-*|-*| |Furniture and fixtures|-|-| |Total|Total|1,099| *Represents value less than `0.50 crore. |
# Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements Interest on lease liabilities is `438 crore and `421 crore for the years ended March 31, 2024 and 2023, respectively. The Company incurred `221 crore and `211 crore for the years ended March 31, 2024 and 2023, respectively, towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is `1,737 crore and `1,732 crore for the years ended March 31, 2024 and 2023, respectively, including cash outflow for short term leases and leases of low-value assets. 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 `815 crore and `786 crore as at March 31, 2024 and 2023, 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. 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 as prescribed in Schedule II of the Companies Act, 2013 except in respect of certain categories of assets, where the useful life of the assets has been assessed 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. The estimated useful lives are as mentioned below: |Type of asset|Useful lives| |---|---| |Buildings|20 years*| |Leasehold improvements|Lease term| |Plant and equipment|10 years*| |Computer equipment|4 years*| |Vehicles|4 years*| |Office equipment|2-5 years*| |Electrical installations|4-10 years*| |Furniture and fixtures|5 years*| * The Company believes that the technically evaluated useful lives, different from Schedule II of the Companies Act, 2013, best represent the period over which these assets are expected to be used. 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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2023|323|7,966|1,925|808|10,947|40|2,492|1,926|1,553|27,980| |Additions|-|201|94|55|718|6|154|79|143|1,450| |Disposals|-|(4)|(51)|(2)|(230)|(3)|(35)|(37)|(6)|(368)| |Cost as at March 31, 2024|323|8,163|1,968|861|11,435|43|2,611|1,968|1,690|29,062| |Accumulated depreciation as at April 1, 2023|-|(3,675)|(1,340)|(444)|(8,179)|(34)|(2,217)|(1,488)|(1,417)|(18,794)| |Depreciation|-|(407)|(119)|(83)|(1,336)|(4)|(149)|(123)|(73)|(2,294)| |Disposals|4|51|1|228|3|34|35|6|362| | |Accumulated depreciation as at March 31, 2024|-|(4,078)|(1,408)|(526)|(9,287)|(35)|(2,332)|(1,576)|(1,484)|(20,726)| |Net carrying amount as at March 31, 2024|323|4,085|560|335|2,148|8|279|392|206|8,336| |Capital work-in-progress*|1,450| | | | | | | | | | |Total|9,786| | | | | | | | | | *`1,450 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2024. |(` 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| | | | | | | | | | |Total|10,289| | | | | | | | | | *`1,904 crore has been capitalised and transferred to property, plant and equipment during the year ended March 31, 2023. |
# Standalone Financial Statements 2023-24 # 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, 2024 is as follows: |Capital work-in-progress|Amount in Capital work-in-progress for a period of|Total| | | | |---|---|---|---|---|---| | |Less than 1 year|1 - 2 years|2 - 3 years|More than 3 years| | |Projects in progress|919|145|53|333|1,450| 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| | | |Total| |---|---|---|---|---|---|---| | |Less than 1 year|1 - 2 years| |2 - 3 years|More than 3 years| | |Projects in progress|543|203| |37|320|1,103| Project execution plans are modulated basis capacity requirement assessment on an annual basis and all the projects are executed as per rolling annual plan. # 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, 2023|1,727| |Additions|99| |Disposals / Derecognised|(8)| |Cost as at March 31, 2024|1,818| |Accumulated amortisation as at April 1, 2023|(918)| |Amortisation|(445)| |Disposals / Derecognised|8| |Accumulated amortisation as at March 31, 2024|(1,355)| |Net carrying amount as at March 31, 2024|463| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements |Rights under licensing agreement and software licences|(` crore)| |---|---| |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| The estimated amortisation for years subsequent to March 31, 2024 is as follows: |Year ending March 31,|Amortisation expense| |---|---| |2025|282| |2026|100| |2027|66| |2028|15| | |463| # (c) Other assets Other assets consist of the following: # Other assets - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Considered good| | | |Capital advances|88|67| |Advances to related parties|196|63| |Contract assets|206|153| |Prepaid expenses|2,223|1,907| |Contract fulfillment costs|129|33| |Others|174|187| | |3,016|2,410| Advances to related parties, considered good, comprise: | | | | |---|---|---| |Voltas Limited|-|-*| |Tata Realty and Infrastructure Limited|-*|-*| |Tata Projects Limited|191|54| |Titan Engineering and Automation Limited|3|-| |Saankhya Labs Private Limited|-|8| |Universal MEP Projects & Engineering Services Limited|2|1| *Represents value less than `0.50 crore. # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Other assets - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Considered good| | | |Advance to suppliers|109|48| |Advance to related parties|1,023|18| |Contract assets|4,998|4,678| |Prepaid expenses|1,839|1,336| |Contract fulfillment costs|995|531| |Indirect taxes recoverable|1,152|853| |Others|281|325| |Considered doubtful| | | |Advance to suppliers|2|2| |Other advances|2|2| |Less: Allowance for doubtful assets|(4)|(4)| |Total|10,397|7,789| # Advance to related parties, considered good comprise: |Tata Sons Private Limited|-|7| |---|---|---| |Tata AIG General Insurance Company Limited|7|1| |Titan Company Limited|-|1| |Tejas Networks Limited|960|-| |Tata Consultancy Services Deutschland GmbH|12|7| |Tata Consultancy Services De Mexico S.A., De C.V.|3|2| |Tata Consultancy Services (South Africa) (PTY) Ltd.|1|-| |Tata Consultancy Services Do Brasil Ltda|1|-| |Tata Consultancy Services Italia s.r.l.|1|-| |Tata Consultancy Services Japan, Ltd.|2|-| |Tata America International Corporation|35|-| |Tata Consultancy Services (China) Co., Ltd.|1|-| # Non-current - Others Non-current - Others includes advance of `177 crore and `177 crore towards acquiring right-of-use of leasehold land as at March 31, 2024 and 2023, respectively. |
# Contract fulfillment costs Contract fulfillment costs of `464 crore and `631 crore for the years ended March 31, 2024 and 2023, respectively, have been amortised in the standalone statement of profit and loss. Refer note 10 for the changes in contract assets. # (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: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Raw materials, sub-assemblies and components|27|22| |Finished goods and work-in-progress|-*|5| |Total|27|27| *Represents value less than `0.50 crore. # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # (e) Other liabilities Other liabilities consist of the following: # Other liabilities - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Advance received from customers|1,757|457| |Indirect taxes payable and other statutory liabilities|2,350|2,429| |Others|351|227| |Total|4,458|3,113| # (f) Provisions Provisions consist of the following: # Provisions - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Provision towards legal claim (Refer note 19)|-|206| |Provision for foreseeable loss|70|70| |Other provisions|1|3| |Total|71|279| # 9) Other equity Other equity consist of the following: # Other equity | |As at March 31, 2024|As at March 31, 2023| | |---|---|---|---| |Capital reserve*|-|-| | |Capital redemption reserve|Opening balance|17|17| |Transfer from retained earnings (Refer note 6(n))|4|-| | |Total|21|17| | |Special Economic Zone re-investment reserve|Opening balance|11,809|7,287| |Transfer from retained earnings|9,875|8,380| | |Transfer to retained earnings|(5,450)|(3,858)| | |Total|16,234|11,809| | |Retained earnings|Opening balance|62,228|68,949| |Profit for the year|43,559|39,106| | |Remeasurement of defined employee benefit plans|(47)|42| | |Expenses for buy-back of equity shares (Refer note 6(n))|(46)|-| | |Tax on buy-back of equity shares (Refer note 6(n))|(3,959)|-| | |Buy-back of equity shares (Refer note 6(n))|(16,996)|-| | |Transfer from Special Economic Zone re-investment reserve|5,450|3,858| | |Total|90,189|111,955| | # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements |(` crore)|As at March 31, 2024|As at March 31, 2023| |---|---|---| |Less: Appropriations| | | |Dividend on equity shares|25,137|41,347| |Transfer to capital redemption reserve (Refer note 6(n))|4|-| |Transfer to Special Economic Zone re-investment reserve|9,875|8,380| | |55,173|62,228| |Investment revaluation reserve| | | |Opening balance|138|580| |Change during the year (net)|201|(442)| | |339|138| |Cash flow hedging reserve (Refer note 6(l))| | | |Opening balance|(20)|(26)| |Change during the year (net)|11|6| | |(9)|(20)| | |71,758|74,172| *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. File: AR_TCS_2023_2024.md - 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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # 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, 2024|Year ended March 31, 2023| |---|---|---| |Consultancy services|2,00,054|1,88,748| |Sale of equipment and software licences|2,305|1,606| |Total|2,02,359|1,90,354| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Revenue disaggregation by industry vertical is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Banking, Financial Services and Insurance|71,349|68,240| |Manufacturing|18,854|16,905| |Consumer Business|34,612|33,169| |Communication, Media and Technology|35,061|33,606| |Life Sciences and Healthcare|24,352|22,398| |Others|18,131|16,036| |Total|2,02,359|1,90,354| # Revenue disaggregation by geography is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Americas| | | |North America|115,581|113,208| |Latin America|484|382| |Europe| | | |United Kingdom|35,625|30,676| |Continental Europe|20,705|19,209| |Asia Pacific|12,466|12,017| |India|13,105|10,941| |Middle East and Africa|4,393|3,921| |Total|2,02,359|1,90,354| 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, 2024 and 2023. 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 `1,34,160 crore out of which 50.03% 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, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|4,831|3,470| |Invoices raised that were included in the contract assets balance at the beginning of the year|(3,278)|(2,632)| |Increase due to revenue recognised during the year, excluding amounts billed during the year|3,595|3,826| |Translation exchange difference|56|167| |Balance at the end of the year|5,204|4,831| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Changes in unearned and deferred revenue are as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Balance at the beginning of the year|3,604|3,573| |Revenue recognised that was included in the contract liability balance at the beginning of the year|(3,110)|(2,643)| |Increase due to invoicing during the year, excluding amounts recognised as revenue during the year|2,541|2,589| |Translation exchange difference|2|85| |Balance at the end of the year|3,037|3,604| # Reconciliation of revenue recognised with the contracted price is as follows: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Contracted price|2,05,717|1,93,451| |Reductions towards variable consideration components|(3,358)|(3,097)| |Revenue recognised|2,02,359|1,90,354| # 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, 2024|Year ended March 31, 2023| |---|---|---| |Interest income|3,382|3,046| |Dividend income|3,296|2,106| |Net gain on disposal / fair valuation of investments carried at fair value through profit or loss|253|205| |Net gain on sale of investments other than equity shares carried at fair value through OCI|11|4| |Net gain on disposal of property, plant and equipment|8|27| |Net gain / (loss) on lease modification|2|(3)| |Net gain on sub-lease|-|7| |Net foreign exchange gain / (loss)|243|(173)| |Rent income|25|22| |Other income|53|87| |Total|7,273|5,328| # Interest income comprise: - Interest on bank balances and bank deposits: 412 (173) - Interest on financial assets carried at amortised cost: 347 (574) - Interest on financial assets carried at fair value through OCI: 2,198 (2,131) - Other interest (including interest on tax refunds): 425 (168) # Dividend income comprise: Dividend from subsidiaries: 3,296 (2,106) # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 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. # Employee benefit expenses consist of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Salaries, incentives and allowances|93,257|87,049| |Contributions to provident and other funds|7,099|6,450| |Staff welfare expenses|2,783|2,719| |Total|103,139|96,218| # Employee benefit obligations consist of the following: # Employee benefit obligations - Non-current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Foreign defined benefit plans|29|28| |Other employee benefit obligations|115|67| |Total|144|95| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Employee benefit obligations - Current | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Compensated absences|3,300|2,991| |Other employee benefit obligations|32|31| |Total|3,332|3,022| # 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. |
# The following table sets out the details of the defined benefit retirement plans and the amounts recognised in the financial statements: | | |As at March 31, 2024| | |As at March 31, 2023| | | | |---|---|---|---|---|---|---|---|---| | |Domestic plans|Foreign plans|Foreign plans|Domestic plans|Foreign plans|Foreign plans| | | | |funded|funded|unfunded|funded|funded|unfunded| | | |Change in benefit obligations|4,643|1|28|4,672|4,464|1|25|4,490| |Translation exchange difference|-|-|-|-|-|-|2|2| |Changes due to inter-company transfers|1|-|-|1|(3)|-|-|(3)| |Service cost|481|-|4|485|512|-|5|517| |Interest cost|361|-|1|362|330|-|1|331| |Remeasurement of the net defined benefit liability|168|-|2|170|(158)|-|1|(157)| |Benefits paid|(381)|-|(6)|(387)|(502)|-|(6)|(508)| |Benefit obligations, end of the year|5,273|1|29|5,303|4,643|1|28|4,672| # Change in plan assets | | |As at March 31, 2024| | | | |As at March 31, 2023| | | | |---|---|---|---|---|---|---|---|---|---|---| | |Domestic plans|Foreign plans|Foreign plans|Domestic plans|Foreign plans|Foreign plans| | | | | | |funded|funded|unfunded|funded|funded|unfunded| | | | | |Fair value of plan assets, beginning of the year|6,389|1| |-|6,390|5,517|1|-| |5,518| |Changes due to inter-company transfers|1|-|-|1| |(3)|-|-|(3)| | |Interest income|500|-|-|500| |424|-|-|424| | |Employers' contributions|595|-|-|595| |1,056|-|-|1,056| | |Benefits paid|(381)|-|-|(381)| |(502)|-|-|(502)| | |Remeasurement- return on plan assets excluding amount included in interest income|110|-|-|110| |(103)|-|-|(103)| | |Fair value of plan assets, end of the year|7,214|1| |-|7,215|6,389|1|-| |6,390| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements | |As at March 31, 2024|As at March 31, 2024|As at March 31, 2024|As at March 31, 2023|As at March 31, 2023|As at March 31, 2023| | | | | | | |---|---|---|---|---|---|---|---|---| | |Domestic plans funded|Foreign plans funded|Foreign plans unfunded|Total|Domestic plans funded|Foreign plans funded|Foreign plans unfunded|Total| |Funded status|-|-|(29)|(29)|-|-|(28)|(28)| |Surplus of plan assets over obligations|1,941|-|-|1,941|1,746|-|-|1,746| | |1,941|-|(29)|1,912|1,746|-|(28)|1,718| # Category of assets | | |As at March 31, 2024| | |As at March 31, 2023| | | | |---|---|---|---|---|---|---|---|---| | |Domestic plans funded|Foreign plans funded|Foreign plans unfunded|Total|Domestic plans funded|Foreign plans funded|Foreign plans unfunded|Total| |Corporate bonds|1,960|-|-|1,960|1,832|-|-|1,832| |Equity instruments|201|-|-|201|121|-|-|121| |Government bonds and securities|3,172|-|-|3,172|2,917|-|-|2,917| |Insurer managed funds|1,729|1|-|1,730|1,387|1|-|1,388| |Bank balances|10|-|-|10|6|-|-|6| |Others|142|-|-|142|126|-|-|126| | |7,214|1|-|7,215|6,389|1|-|6,390| # Net periodic gratuity cost, included in employee cost consists of the following components: | | |As at March 31, 2024| | |As at March 31, 2023| | | | |---|---|---|---|---|---|---|---|---| | |Domestic plans funded|Foreign plans funded|Foreign plans unfunded|Total|Domestic plans funded|Foreign plans funded|Foreign plans unfunded|Total| |Service cost|481|-|4|485|512|-|5|517| |Net interest on net defined benefit asset|(139)|-|1|(138)|(94)|-|1|(93)| |Net periodic gratuity / pension cost|342|-|5|347|418|-|6|424| |Actual return on plan assets|610|-|-|610|321|-|-|321| # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Remeasurement of the net defined benefit (asset) / liability: | | |As at March 31, 2024| | | |---|---|---|---|---| | |Domestic plans|Foreign plans|Foreign plans|Total| | |funded|funded|unfunded| | |Actuarial gains arising from changes in demographic assumptions|(2)|-|-|(2)| |Actuarial losses arising from changes in financial assumptions|66|-|-|66| |Actuarial losses arising from changes in experience adjustments|104|-|2|106| |Remeasurement of the net defined benefit liability|168|-|2|170| |Remeasurement- return on plan assets excluding amount included in interest income|(110)|-|-|(110)| | |58|-|2|60| | | |As at March 31, 2023| | | |---|---|---|---|---| | |Domestic plans|Foreign plans|Foreign plans|Total| | |funded|funded|unfunded| | |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| | |(55)|-|1|(54)| # The assumptions used in accounting for the defined benefit plan are set out below: | |As at March 31, 2024| |As at March 31, 2023| | |---|---|---|---|---| | |Domestic plans|Foreign plans|Domestic plans|Foreign plans| |Discount rate|7.25%|3.50%-4.80%|7.50%|3.90%-4.80%| |Rate of increase in compensation levels of covered employees|6.00%|2.68%- 3.63%|6.00%|1.95%-3.62%| |Rate of return on plan assets|7.25%|3.50%-4.80%|7.50%|3.90%-4.80%| |Weighted average duration of defined benefit obligations|6 Years|3-6 Years|7 Years|3-8 Years| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements 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, 2024. The Company does not expect to contribute to defined benefit plan obligations funds for year ending March 31, 2025 in view of adequate surplus plan assets as at March 31, 2024. 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. |
# Sensitivity Analysis of Discount Rate | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Increase of 0.50%|(123)|(121)| |Decrease of 0.50%|129|127| # Sensitivity Analysis of Expected Salary Growth | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Increase of 0.50%|130|129| |Decrease of 0.50%|(125)|(123)| 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. # Defined Benefit Obligations Maturity |Year ending March 31,|Defined benefit obligations| |---|---| |2025|798| |2026|670| |2027|665| |2028|650| |2029|603| |2030-2034|2,297| # 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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements The details of fund and plan assets are given below: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Fair value of plan assets|29,170|25,511| |Present value of defined benefit obligations|(29,170)|(25,511)| |Net excess / (shortfall)|-|-| The plan assets have been primarily invested in Government securities and corporate bonds. The principal assumptions used in determining the present value obligations of interest guarantee under the deterministic approach are as follows: | |As at March 31, 2024|As at March 31, 2023| |---|---|---| |Discount rate|7.25%|7.50%| |Average remaining tenure of investment portfolio|6 Years|7 Years| |Guaranteed rate of return|8.25%|8.15%| The Company expensed `1,681 crore and `1,614 crore for the years ended March 31, 2024 and 2023, respectively, towards provident fund. # Superannuation All eligible employees on Indian payroll are entitled to benefits under Superannuation, a defined contribution plan. The Company makes monthly contributions until retirement or resignation of the employee. The Company recognises such contributions as an expense when incurred. The Company has no further obligation beyond its monthly contribution. The Company expensed `286 crore and `278 crore for the years ended March 31, 2024 and 2023, respectively, towards Employees' Superannuation Fund. # Foreign defined contribution plan The Company expensed `1,316 crore and `1,070 crore for the years ended March 31, 2024 and 2023, respectively, towards foreign defined contribution plans. # 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 expected credit losses and doubtful 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, 2024|Year ended March 31, 2023| |---|---|---| |Raw materials, sub-assemblies and components consumed|42|37| |Equipment and software licences purchased|3,300|1,381| | |3,342|1,418| |Finished goods and work-in-progress| | | |Opening stock|5|3| |Less: Closing stock|-*|5| | |5|(2)| | |3,347|1,416| *Represents value less than `0.50 crore. # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # (b) Other expenses Other expenses consist of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Fees to external consultants|22,539|25,539| |Facility expenses|2,511|2,178| |Travel expenses|2,340|2,100| |Communication expenses|1,528|1,588| |Bad debts and advances written off, allowance for expected credit losses and doubtful advances (net)|97|110| |Other expenses|11,011|10,208| |Total|40,026|41,723| Other expenses include `5,118 crore and `4,777 crore for the years ended March 31, 2024 and 2023, respectively, towards sales, marketing and advertisement expenses and `3,655 crore and `2,544 crore for the years ended March 31, 2024 and 2023, respectively, towards project expenses. # (c) Corporate Social Responsibility (CSR) expenditure | |Year ended March 31, 2024|Year ended March 31, 2023| | |---|---|---|---| |1 Amount required to be spent by the company during the year|818|773| | |2 Amount of expenditure incurred on:| | | | |(i) Construction/acquisition of any asset|-|-| | |(ii) On purposes other than (i) above|827|783| | |3 Shortfall at the end of the year|-|-| | |4 Total of previous years shortfall|-|-| | |5 Reason for shortfall|-|NA| | |6 Nature of CSR activities|Education, Research, Health care, Conservation and empowerment programs|Education, Research, Health care, Conservation and empowerment programs| | | |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|520|543| # 14) Finance costs Finance costs consist of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Interest on lease liabilities|438|421| |Interest on tax matters|23|49| |Other interest costs|212|225| |Total|673|695| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 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 File: AR_TCS_2023_2024.md 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, affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. |
Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled. For operations carried out in SEZs, deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. 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, 2024|Year ended March 31, 2023| |---|---|---| |Current tax| | | |Current tax expense for current year|14,422|13,623| |Current tax benefit pertaining to prior years|(244)|(677)| | |14,178|12,946| |Deferred tax| | | |Deferred tax benefit for current year|(135)|(362)| | |(135)|(362)| | |14,043|12,584| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements 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, 2024|Year ended March 31, 2023| |---|---|---| |Profit before taxes|57,602|51,690| |Indian statutory income tax rate|34.94%|34.94%| |Expected income tax expense|20,128|18,063| |Tax effect of adjustments to reconcile expected income tax expense to reported income tax expense| | | |Tax holidays|(6,393)|(5,097)| |Income exempt from tax|(1,152)|(736)| |Undistributed earnings in branches|(35)|58| |Tax on income at different rates|1,313|963| |Tax pertaining to prior years|(244)|(677)| |Effect of tax rate change under new regime|441|-| |Others (net)|(15)|10| |Total income tax expense|14,043|12,584| 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 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, 2024 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|597|64|-|-|661| |Provision for employee benefit obligations|786|86|-|-|872| |Cash flow hedges|7|-|(3)|-|4| |Receivables, financial assets at amortised cost|403|(8)|-|-|395| |Branch profit tax|(135)|35|-|-|(100)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(83)|-|(36)|-|(119)| |Lease liabilities and right-of-use assets|188|11|-|-|199| |Others|511|(53)|-|-|458| | |2,274|135|(39)|-|2,370| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Gross deferred tax assets and liabilities are as follows: |As at March 31, 2024|Assets|Liabilities|Net| |---|---|---|---| |Deferred tax assets / (liabilities) in relation to Property, plant and equipment and Intangible assets|714|53|661| |Provision for employee benefit obligations|872|-|872| |Cash flow hedges|4|-|4| |Receivables, financial assets at amortised cost|395|-|395| |Branch profit tax|-|100|(100)| |Unrealised gain on securities carried at fair value through profit or loss / other comprehensive income|(119)|-|(119)| |Lease liabilities|1,192|-|1,192| |Right-of-use assets|(993)|-|(993)| |Others|459|1|458| |Total|2,524|154|2,370| # 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 and right-of-use assets|181|7|-|-|188| |Others|405|106|-|-|511| |Total|2,650|362|236|(974)|2,274| # 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|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|1,090|-|1,090| |Right-of-use assets|(902)|-|(902)| |Others|512|1|511| |Total|2,464|190|2,274| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements 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. Contingent liability in respect of tax demands received from direct tax authorities in India and other jurisdictions is ₹1,794 crore and ₹1,471 crore as at March 31, 2024 and 2023, 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, 2024 and 2023, 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 2022 are generally subject to examination by the tax authorities. In United States of America, the federal statute of limitation applies to fiscals 2020 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, 2024|Year ended March 31, 2023| |---|---|---| |Profit for the year (₹ crore)|43,559|39,106| |Weighted average number of equity shares|364,68,51,755|365,90,51,373| |Basic and diluted earnings per share (₹)|119.44|106.88| |Face value per equity share (₹)|1|1| # 17) Auditor's remuneration Auditor's remuneration consists of the following: | |Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Auditor|11|11| |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. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 19) Commitments and contingencies # Capital commitments The Company has contractually committed (net of advances) `1,939 crore and `1,454 crore as at March 31, 2024 and 2023, respectively, for purchase of property, plant and equipment. # Contingencies - Direct tax matters Refer note 15. - Indirect tax matters The Company has ongoing disputes with tax authorities mainly relating to treatment of characterisation and classification of certain items. The Company has demands amounting to `516 crore and `498 crore as at March 31, 2024 and 2023, respectively, from various indirect tax authorities which are being contested by the Company based on the management evaluation and advice of tax consultants. - Other claims Claims aggregating `126 crore and `218 crore as at March 31, 2024 and 2023, 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. Pursuant to an initial unfavourable judgment from the District Court, the Appeals court re-affirmed the order of compensatory damages of `1,167 crore (US $140 million) and remanded back to the District Court to reassess matter relating to punitive damages (to limit maximum up to `1,167 crore (US $140 million)), the Company has already paid the compensatory damages of `1,167 crore (US $140 million) along with interest in April 2022. The Company's second appeal in the Appeals Court to reduce the punitive damages subsequently affirmed by the District Court was disposed on July 14, 2023, with a re-affirmation of the District Court order awarding punitive damages of `1,167 crore (US $140 million). The Company's petition to the Supreme Court to review the entire judgement including both the compensatory and punitive damages re-affirmed by the Appeals Court was rejected by the Supreme Court on November 20, 2023, pursuant to which, punitive damages of `1,167 crore (US $140 million) was paid on December 1, 2023. The Company has provided the balance punitive damages amount of `958 crore (US $115 million) in its financial statements for the year ended March 31, 2024 and disclosed the same as an "exceptional item" in the standalone statement of profit and loss. # Guarantees and letter of comfort The Company has given letter of comfort to banks for credit facilities availed by its subsidiaries. As per the terms of letter of comfort, the Company undertakes not to divest its ownership interest directly or indirectly in the subsidiary and provide such managerial, technical and financial assistance to ensure continued successful operations of the subsidiary. The Company has provided guarantees to third parties on behalf of its subsidiaries. The Company does not expect any outflow of resources in respect of the above. The amounts assessed as contingent liability do not include interest that could be claimed by counter parties. Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 20) Related party transactions The Company's principal related parties consist of its holding company, Tata Sons Private Limited and its subsidiaries, its own subsidiaries, affiliates and key managerial personnel. The Company's material related party transactions and outstanding balances are with related parties with whom the Company routinely enter into transactions in the ordinary course of business. Refer note 21 of consolidated financial statement for list of subsidiaries of the Company. |
Transactions with related parties are as follows: | |Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---|---| |Revenue from operations|50|26,298|1,006|3,875|-|31,229| |Dividend income|-|3,296|-|-|-|3,296| |Rent income|-|43|-|-|-|43| |Other income|-|40|-|-|-|40| |Purchases of goods and services (including reimbursements)|1|17,707|1,344|248|-|19,300| |Brand equity contribution|200|-|-|-|-|200| |Facility expenses|1|76|18|73|-|168| |Lease rental|-|-|49|46|-|95| |Bad debts and advances written off, allowance for expected credit losses and doubtful advances (net)|-|-|7|(1)|-|6| |Contribution and advance to post employment benefit plans|-|-|-|-|3,783|3,783| |Purchase of property, plant and equipment|-|-|108|98|-|206| |Advances given|-|5|1,013|98|-|1,116| |Advances recovered|-|5|8|4|-|17| |Advances taken|-|45|27|1|-|73| |Dividend paid|18,177|-|8|2|-|18,187| |Buy-back of shares|10,548|-|4|3|-|10,555| |Cost recovery|-|4,177|-|-|-|4,177| |Sale of property, plant and equipment|-|1|-|-|-|1| |Transfer in of employee benefit obligations|-|1|-|-|-|1| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements | |Tata Sons Private Limited|Subsidiaries of the Tata Sons Private Limited|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons Private Limited and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---|---| |Revenue from operations|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 expected credit losses and doubtful 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| # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Balances receivable from related parties are as follows: | |Tata Sons Private Limited|Subsidiaries of the Company|Subsidiaries of Tata Sons Private Limited|Associates / joint ventures of Tata Sons and their subsidiaries|Other related parties|Total| |---|---|---|---|---|---|---| |As at March 31, 2024|5|8,054|406|1,290|-|9,755| | |2|184|1,238|9|-|1,433| | |7|8,238|1,644|1,299|-|11,188| |As at March 31, 2023|2|7,279|429|794|-|8,504| | |10|458|95|85|-|648| | |12|7,737|524|879|-|9,152| # 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, 2024|181|7,824|993|422|-|9,420| | |-|3,664|1,412|13|-|5,089| |As at March 31, 2023|90|6,771|364|314|278|7,817| | |-|4,427|12|50|-|4,489| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # Material related party transactions are as follows: |(` crore)|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Revenue from operations| | | |Tata Consultancy Services Deutschland GmbH|3,593|3,221| |Tata Consultancy Services Netherlands BV|4,009|3,402| |Tata Consultancy Services Canada Inc.|3,666|3,544| |Jaguar Land Rover Limited|2,902|1,706| |Tata Digital Private Limited|286|502| |Purchases of goods and services (including reimbursements) and net of cost recovery| | | |Tata America International Corporation|4,184|3,824| |Tata Consultancy Services De Mexico S.A., De C.V.|3,335|2,946| |Tata Consultancy Services Canada Inc.|1,938|1,280| |Tejas Networks Limited|754|-| |Dividend income| | | |Tata America International Corporation|1,158|643| |TCS Iberoamerica SA|835|190| |Advances given| | | |Tejas Networks Limited|960|-| # Material related party balances are as follows: |(` crore)|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Trade receivables and contract assets| | | |Tata America International Corporation|1,931|1,366| |Tata Consultancy Services France|1,249|1,227| |Jaguar Land Rover Limited|898|482| |Trade payables, unearned and deferred revenue, other financial liabilities and other liabilities| | | |Tata America International Corporation|2,978|2,688| |Tata Consultancy Services De Mexico S.A., De C.V.|984|933| |Tata Consultancy Services Canada Inc.|1,077|618| |Tejas Networks Limited|607|-| |Loans, other financial assets and other assets| | | |Tejas Networks Limited|960|-| # Transactions with key management personnel are as follows: |(` crore)|Year ended March 31, 2024|Year ended March 31, 2023| |---|---|---| |Short-term benefits|57|58| |Dividend paid during the year|1|2| |Post-employment benefits|2|-| |Total|60|60| The remuneration of directors and key executives is determined by the nomination and remuneration committee having regard to the performance of individuals and market trends. # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 Notes forming part of Standalone Financial Statements Transactions with key management personnel for the year ended March 31, 2023 did not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation / premium paid were 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 `15 crore and `13 crore as at March 31, 2024 and 2023, respectively. 23) The Board of Directors approved post-employment benefits, payable to the outgoing CEO and Managing Director, which has been actuarially valued. Accordingly, the Company has recorded an expense of `48 crore during the year ended March 31, 2024. 24) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020. 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. # 25) Additional Regulatory Information # * Ratios |Ratio|Numerator|Denominator|Current year|Previous year| |---|---|---|---|---| |Current ratio (in times)|Total current assets|Total current liabilities|2.2|2.4| |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|24.0|23.4| |Return on equity ratio (in %)|Profit for the year less Preference dividend (if any)|Average total equity|59.4%|51.6%| |Trade receivables turnover ratio (in times)|Revenue from operations|Average trade receivables|4.5|4.8| |Trade payables turnover ratio (in times)|Cost of equipment and software licences + Other expenses|Average trade payables|3.1|3.6| |Net capital turnover ratio (in times)|Revenue from operations|Average working capital (i.e. Total current assets less Total current liabilities)|3.8|3.5| |Net profit ratio (in %)|Profit for the year|Revenue from operations|21.5%|20.5%| |Return on capital employed (in %)|Profit before tax and finance costs|Capital employed = Net worth + Lease liabilities + Deferred tax liabilities|74.3%|65.2%| |Return on investment (in %)|Income generated from invested funds|Average invested funds in treasury investments|8.3%|7.4%| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 # Notes forming part of Standalone Financial Statements # 26) Dividends Dividends paid during the year ended March 31, 2024 include an amount of `24.00 per equity share towards final dividend for the year ended March 31, 2023 and an amount of `45.00 per equity share towards interim dividends (including special dividend) for the year ended March 31, 2024. 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 declared by the Company are based on the profit available for distribution. On April 12, 2024, the Board of Directors of the Company have proposed a final dividend of `28.00 per share in respect of the year ended March 31, 2024 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately `10,131 crore. # 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 K Krithivasan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 Mumbai, April 12, 2024 # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 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|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| | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |1|Tata America International Corporation|August 9, 2004|April 1, 2023|March 31, 2024|USD|83.38|2500|2|1,667|5,245|3,576|357|5,398|1,454|276|1,178|100%|U.S.A.| |2|Tata Consultancy Services Canada Inc.|October 1, 2009|April 1, 2023|March 31, 2024|CAD|61.30|6154|43|1,863|3,973|2,067|-|11,712|1,419|374|1,045|100%|Canada| |3|Tata Consultancy Services Argentina S.A.|August 9, 2004|January 1, 2023|December 31, 2023|ARS|USD 0.097|220|- (1)|23|24|-|24|(1)|(1)|-|100%|Argentina| | |4|Tata Consultancy Services Chile S.A.|August 9, 2004|January 1, 2023|December 31, 2023|CLP|USD 0.085|62|145|215|517|157|48|788|55|9|46|100%|Chile| |5|Tata Consultancy Services De Mexico S.A., De C.V.|August 9, 2004|January 1, 2023|December 31, 2023|MXN|USD 5.032|106|1|915|2,274|1,358|-|5,389|313|109|204|100%|Mexico| |6|Tata Consultancy Services Do Brasil Ltda|August 9, 2004|January 1, 2023|December 31, 2023|BRL|USD 16.726|009|294|127|772|351|-|1,770|49|24|25|100%|Brazil| |7|TCS Iberoamerica SA|August 9, 2004|January 1, 2023|December 31, 2023|USD|83.38|2500|821|1,001|1,822|-|1,811|-|862|32|830|100%|Uruguay| |8|TCS Inversiones Chile Limitada|August 9, 2004|January 1, 2023|December 31, 2023|CLP|USD 0.085|062|130|149|302|23|273|36|45|1|44|100%|Chile| |9|TCS Solution Center S.A.|August 9, 2004|January 1, 2023|December 31, 2023|UYU|USD 2.220|573|80|240|481|161|-|1,022|113|37|76|100%|Uruguay| |10|TATASOLUTION CENTER S.A.|December 28, 2006|January 1, 2023|December 31, 2023|USD|83.38|2500|25|71|217|121|-|417|1|-|1|100%|Ecuador| |11|MGDC S.C.|January 1, 2010|January 1, 2023|December 31, 2023|MXN|USD 5.032|106|85|(58)|76|49|-|57|(26)|12|(38)|100%|Mexico| |12|TCS Uruguay S.A.|January 1, 2010|January 1, 2023|December 31, 2023|UYU|USD 2.220|573|-|246|431|185|79|908|106|6|100|Uruguay| | |13|Tata Consultancy Services Guatemala, S.A.|September 1, 2021|January 1, 2023|December 31, 2023|GTQ|USD 10.694|314|8|19|46|19|-|65|9|3|6|100%|Guatemala| |14|Tata Consultancy Services Belgium|August 9, 2004|April 1, 2023|March 31, 2024|EUR|INR 89.994|776|2|584|1,184|598|-|2,885|160|43|117|100%|Belgium| |15|Tata Consultancy Services De Espana S.A.|August 9, 2004|April 1, 2023|March 31, 2024|EUR|EUR 89.994|776|1|130|227|96|-|536|(9)|(17)|8|100%|Spain| |16|Tata Consultancy Services Deutschland GmbH|August 9, 2004|April 1, 2023|March 31, 2024|EUR|INR 89.994|776|1|908|2,364|1,455|-|6,769|149|48|101|100%|Germany| |17|Tata Consultancy Services Italia s.r.l.|August 9, 2004|April 1, 2023|March 31, 2024|EUR|EUR 89.994|776|20|62|162|80|-|361|13|9|4|100%|Italy| |18|Tata Consultancy Services Netherlands BV|August 9, 2004|April 1, 2023|March 31, 2024|EUR|EUR 89.994|776|594|2,803|5,024|1,627|1,755|8,423|686|121|565|100%|Netherlands| |19|Tata Consultancy Services Sverige AB|August 9, 2004|April 1, 2023|March 31, 2024|SEK|7.798|734|-|1,157|1,613|456|-|4,224|337|72|265|100%|Sweden| |20|Tata Consultancy Services (Portugal) Unipessoal, Limitada|July 4, 2005|April 1, 2023|March 31, 2024|EUR|EUR 89.994|-|-|54|102|48|-|144|26|6|20|100%|Portugal| |21|Diligenta Limited|August 23, 2005|January 1, 2023|December 31, 2023|GBP|105.137|035|11|1,662|3,001|1,328|616|5,748|295|67|228|100%|U.K.| Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 File: AR_TCS_2023_2024.md |Sr. No.|Name of the Subsidiary|Date of becoming subsidiary|Start date of accounting period|End date of accounting period|Reporting Currency|Parent Currency|Exchange Rate|Share Capital|Reserves and Surplus|Total Assets|Total Liabilities|Investments before Tax|Profit for Tax|Provision for Tax|Profit after Tax|Proposed Dividend|% of Shareholding|Country| | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |22|Tata Consultancy Services Capellen Luxembourg S.A. (G.D. de Luxembourg)|October 28, 2005|April 1, 2023|March 31, 2024|EUR|EUR|89.994776|50|73|255|132|-|739|87|25|62|-|100%|Luxembourg| |23|Tata Consultancy Services Switzerland Ltd.|October 31, 2006|April 1, 2023|March 31, 2024|CHF|EUR|92.033664|14|852|1,781|915|-|4,569|252|49|203|-|100%|Switzerland| |24|Tata Consultancy Services France|June 28, 2013|April 1, 2023|March 31, 2024|EUR|EUR|89.994776|4|(279)|1,752|2,027|-|2,998|83|(14)|97|-|100%|France| |25|Tata Consultancy Services Saudi Arabia|July 2, 2015|January 1, 2023|December 31, 2023|SAR|EUR|22.231776|8|153|654|493|-|1,057|34|7|27|-|100%|Saudi Arabia| |26|Tata Consultancy Services UK Limited|October 31, 2018|January 1, 2023|December 31, 2023|GBP|GBP|105.137035|-|34|83|49|-|50|5|1|4|-|100%|U.K.| |27|TCS Business Services GmbH|March 9, 2020|April 1, 2023|March 31, 2024|EUR|INR|89.994776|-|97|187|90|62|141|19|6|13|-|100%|Germany| |28|Tata Consultancy Services Bulgaria EOOD|August 31, 2021|January 1, 2023|December 31, 2023|BGN|EUR|46.011754|-|33|71|38|-|85|7|1|6|-|100%|Bulgaria| |29|Tata Consultancy Services Ireland Limited|December 2, 2020|January 1, 2023|December 31, 2023|EUR|EUR|89.994776|225|219|610|166|-|1,403|128|15|113|-|100%|Ireland| |30|TCS Technology Solutions GmbH|January 1, 2021|January 1, 2023|December 31, 2023|EUR|EUR|89.994776|29|837|1,603|737|-|1,433|68|(17)|85|-|100%|Germany| |31|Tata Consultancy Services Osterreich GmbH|March 9, 2012|April 1, 2023|March 31, 2024|EUR|EUR|89.994776|-|5|61|56|-|107|1|-|1|-|100%|Austria| |32|Saudi Desert Rose Holding B.V.|May 26, 2021|January 1, 2023|December 31, 2023|EUR|EUR|89.994776|-|-|-|-|-|-|-|-|-|-|0%|Netherlands| |33|Diligenta (Europe) B.V.|September 14, 2023|January 1, 2023|December 31, 2023|EUR|USD|89.994776|-|-|11|11|-|9|-|-|-|-|100%|Netherlands| |34|Tata Consultancy Services Asia Pacific Pte Ltd.|August 9, 2004|April 1, 2023|March 31, 2024|USD|USD|83.382500|37|1,012|1,880|831|929|2,836|307|35|272|-|100%|Singapore| |35|Tata Consultancy Services Malaysia Sdn Bhd|August 9, 2004|April 1, 2023|March 31, 2024|MYR|USD|17.611680|4|92|260|164|-|554|69|14|55|-|100%|Malaysia| |36|TCS FNS Pty Limited|October 17, 2005|April 1, 2023|March 31, 2024|AUD|AUD|54.181949|202|(61)|141|-|2|-|51|-|51|-|100%|Australia| |37|TCS Financial Solutions Australia Pty Limited|October 19, 2005|April 1, 2023|March 31, 2024|AUD|AUD|54.181949|-|54|94|40|-|59|47|16|31|-|100%|Australia| |38|PT Tata Consultancy Services Indonesia|October 5, 2006|April 1, 2023|March 31, 2024|IDR|USD|0.005259|1|26|59|32|-|71|9|-|9|-|100%|Indonesia| |39|Tata Consultancy Services (China) Co., Ltd.|November 16, 2006|January 1, 2023|December 31, 2023|CNY|USD|11.537158|233|138|509|138|40|1,056|101|27|74|-|100%|China| |40|TCS Financial Solutions Beijing Co., Ltd.|December 29, 2006|January 1, 2023|December 31, 2023|CNY|AUD|11.537158|42|(2)|48|8|-|63|5|-|5|-|100%|China| |41|Tata Consultancy Services (Thailand) Limited|May 12, 2008|April 1, 2023|March 31, 2024|THB|USD|2.284452|2|13|39|24|-|98|11|2|9|-|100%|Thailand| |42|Tata Consultancy Services (Philippines) Inc.|September 19, 2008|April 1, 2023|March 31, 2024|PHP|USD|1.483081|(41)|202|503|342|-|985|103|12|91|-|100%|Philippines| # Integrated Annual Report 2023-24 # Standalone Financial Statements 2023-24 |Sr. No.|Name of the Subsidiary|Date of becoming subsidiary|Start date of accounting period|End date of accounting period|Currency|Exchange Rate|Total Capital and Reserves|Total Assets|Total Liabilities|Turnover before Tax|Profit after Tax|Provision for Tax|Proposed Dividend|% of Shareholding|Country| | | | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |43|Tata Consultancy Services Japan, Ltd.|July 1, 2014|April 1, 2023|March 31, 2024|JPY|0.550870|238|1,505|3,164|1,421|-|5,155|542|146|396|-|66%|Japan| |44|APT Online Limited|August 9, 2004|April 1, 2023|March 31, 2024|INR|1.000000|2|126|218|90|52|164|33|10|23|-|89%|India| |45|C-Edge Technologies Limited|January 19, 2006|April 1, 2023|March 31, 2024|INR|1.000000|10|401|536|125|-|423|128|34|94|-|51%|India| |46|MP Online Limited|September 8, 2006|April 1, 2023|March 31, 2024|INR|1.000000|1|139|220|80|29|89|38|9|29|-|89%|India| |47|TCS e-Serve International Limited|December 31, 2008|April 1, 2023|March 31, 2024|INR|1.000000|10|466|877|401|268|1,870|307|78|229|-|100%|India| |48|MahaOnline Limited|September 23, 2010|April 1, 2023|March 31, 2024|INR|1.000000|3|82|146|61|84|-|8|2|6|-|74%|India| |49|Tata Consultancy Services (Africa) (PTY) Ltd.|October 23, 2007|January 1, 2023|December 31, 2023|ZAR|4.389523|6|41|47|-|47|-|34|-|34|-|100%|South Africa| |50|Tata Consultancy Services (South Africa) (PTY) Ltd.|October 31, 2007|January 1, 2023|December 31, 2023|ZAR|4.389523|8|97|557|452|-|934|68|19|49|-|100%|South Africa| |51|Tata Consultancy Services Qatar L.L.C.|December 20, 2011|January 1, 2023|December 31, 2023|QAR|22.897844|5|46|84|33|-|51|18|2|16|-|100%|Qatar| |52|TCS Foundation|March 25, 2015|April 1, 2023|March 31, 2024|INR|1.000000|1|1,306|2,402|1,095|150|-|-|-|-|-|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, 2024. 2. TCS Technology Solutions AG is now renamed as TCS Technology Solution GmbH. 3. |
Saudi Desert Rose Holding B.V. merged with Tata Consultancy Services Netherlands BV w.e.f. August 29, 2023. 4. Diligenta Limited incorporated a subsidiary, Diligenta (Europe) B.V. in Netherlands on September 14, 2023. # For and on behalf of the Board K Krithivasan CEO and Managing Director N Ganapathy Subramaniam COO and Executive Director Samir Seksaria CFO Pradeep Manohar Gaitonde Company Secretary Mumbai, April 12, 2024 # Integrated Annual Report 2023-24 # 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.| |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.| |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.| |AI|See Artificial Intelligence| |AI Assistant|A software agent that uses AI technologies to perform tasks or services for an individual. These assistants can understand and interpret human speech or text inputs, enabling them to execute commands, answer questions, or assist with tasks like scheduling, reminding, or even controlling smart home devices.| |AI Copilot|A virtual assistant that offers real-time guidance and feedback to enhance a human being's work.| |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| # Glossary |API|See Application Programming Interface| |---|---| |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 General Intelligence|A type of artificial intelligence that can perform as well or better than humans on a wide range of cognitive tasks.| |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 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 reduces.| |CAGR|See Compounded Annual Growth Rate| |Capital Expenditure (CapEx)|Funds used by a company to purchase property, plant and equipment and intangible assets (net of proceeds from disposal of such assets) and for payment including advances for acquiring right-of-use assets.| |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.| |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.| Integrated Annual Report 2023-24 # Glossary # 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 metric at exchange rates applicable for the reference period and reporting growth over the reference period. # Contextual Knowledge This is tacit knowledge pertaining to, and specific to, the granular nuances of a customer's business and IT landscape, acquired on the job over a period of time. TCS teams use their contextual knowledge to design technology solutions that are uniquely tailored for that customer, and therefore, a potential source of competitive differentiation. # 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. # Core Banking System A back-end system that processes daily banking transactions and posts updates to accounts and other financial records; typically includes deposit, loan and credit processing capabilities, with interfaces to general ledger systems and reporting tools. # Core Transformation Modernization initiatives that target the one or more elements of the organization's operations stack consisting of business processes, software systems and underlying infrastructure, usually to enable greater agility, scalability, resilience and a superior customer experience. These are typically large in scale and scope, and entail the integrated delivery of multiple capabilities. # 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 # Cyber Security Technologies, processes and practices designed to protect networks, computers, programs and data from attack, damage or unauthorized access. # 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. # Days' Sales Outstanding (DSO) A popular way of depicting the Trade Receivable relative to the company's Revenue. DSO = Trade Receivable * 365 / LTM Revenue # Glossary |Deep Learning|Subset of machine learning that uses neural networks with many layers (deep neural networks) to analyze various factors and make decisions.| |---|---| |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 technologies such as Social Media, Mobility, Analytics, Big Data, Cloud, Artificial Intelligence and Internet of Things.| |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 a given period's Net profit 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-premises data center; usually reserved for low latency use cases.| |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.| |Environment, Social and Governance|Environment, social and governance (ESG) is a system for how to measure the sustainability of a company in three specific categories: environment, social and governance.| |EPEAT|Acronym for Electronic Product Environmental Assessment Tool| |EPS|See Earnings Per Share| |ESG|See Environment, 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.| |Fine Tuning|Process of slightly adjusting or tweaking the parameters of an existing model, which has already been pre-trained on a large dataset, to perform a specific task.| |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.| |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| # Glossary |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. It involves the use of machine learning algorithms to learn patterns across a large data set and generate new content based on those patterns.| |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.| |Green-Tariff|Green tariffs are specialized retail tariffs that electricity distribution companies (discoms) charge for the sale of Renewable Energy (RE) to their consumers. Businesses can sign up for these tariffs and claim RE consumption, while discoms procure electricity on their behalf from RE project developers.| |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| |Hallucination|Tendency of large language models to make things up or provide output that seems plausible but is factually incorrect or unverifiable.| |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.| |IFRS S2|IFRS S2 is an international ESG reporting framework that requires an entity to disclose information about its climate-related risks and opportunities that is useful to users of general-purpose financial reports in making decisions relating to providing resources to the entity.| |Note|IFRS is acronym of International Financial Reporting Standards| |Innovation Days|Focused workshops with a TCS customer where researchers and business leaders from both organizations participate to explore emerging technologies for specific customer problems.| |Innovation Forum|TCS' thought leadership event that is held in major and emerging markets. 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.| |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.| |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.| |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| |ISO|Acronym for International Organization for Standardization| |ISSB|Acronym for International Sustainability Standards Board| |Key Managerial Personnel|At TCS, this refers to the Chief Executive Officer & Managing Director, Chief Operating Officer & Executive Director, Chief Financial Officer and the Company Secretary.| # Glossary |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.| File: AR_TCS_2023_2024.md |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 and relying on patterns and inference instead.| |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| |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|Digital technology which includes- Information, convenience, and social media all combined together, and made available across a variety of screen sizes and hand-held devices.| |MSP|See Managed Services Provider| |MVP|See Minimum Viable Product| |MWh|Acronym for megawatt hours used as a unit of measurement of electricity. 1 MWh=1000kWh| |Natural Language Processing|Branch of Artificial Intelligence that deals with the interaction between computers and humans through natural language, involving complex and challenging tasks such as speech recognition, natural language understanding, and natural language generation.| |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.| Integrated Annual Report 2023-24 # Glossary # 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 1 million @ ₹87/US$ after 3 months, paying an option premium of ₹1 million. With this, TCS will have the right to sell USD 1 million 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. # 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. 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. # Prompt A specific instruction, question, or input provided to an AI model to guide its generation of content. # Prompt Engineering Prompt engineering is the process of writing, refining and optimizing inputs to encourage GenAI systems to create specific, high-quality outputs. # 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. # 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. # Responsible AI Responsible Artificial Intelligence is an approach to developing, assessing, and deploying AI systems in a safe, trustworthy, and ethical way. # 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 # Scope 1, Scope 2, Scope 3 emissions Green house gas emission accounting categories as per the Greenhouse Gas Protocol. # 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. Integrated Annual Report 2023-24 # Glossary SEZ See Special Economic Zone Shareholder Payout The proportion of earnings paid to shareholders as a percentage of the company's earnings, i.e. Net profit 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 Sole Sourced Contract Non-competitive agreements that allow a single vendor to fulfill the needs of the contractual requirements. These types of contracts can be won when the competitor set narrows down significantly and comes down to a single vendor discussion, given the nature of the client's solution requirements. 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 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. UPS Acronym for Uninterruptible Power Supply. It is an electrical device that combines surge protection with a battery back-up. Vendor Consolidation A strategy to reduce costs and the overheads of managing a large number of vendors. Usually entails aggregating work currently outsourced to many 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. VFD Acronym for Variable frequency drive. It is used to regulate the electrical frequency (Hz) of the power supplied to a chiller so that the compressor speed and condenser fan speed (air-cooled chillers only) can be controlled. 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 VRF Acronym for Variable refrigerant flow. Variable refrigerant flow is an air-conditioning system in which multiple indoor units and a single outdoor condensing unit are available. It is precisely the system's capability that helps to control the amount of refrigerant flowing to the indoor units. XR Extended reality, an umbrella term that covers augmented reality, virtual reality and mixed reality. Y-o-Y Year-on-Year ZWL Zero Waste to Landfill- It is a specific goal that can be independently verified. The common interpretation means that at least 99 percent of generated waste is diverted away from landfill, i.e. all waste produced is either reused, recycled, composted, or sent to energy recovery. 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. 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. Integrated Annual Report 2023-24 # Sustainability Disclosures # Sustainability Stakeholder Engagement and Identification of Material Topics TCS conducts periodic 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. Discussions with internal and external stakeholders are evaluated, to prioritize and arrive at a list of material topics with significant economic, environmental, social or governance impact on TCS' business, reputation, and operations. - The company looks at the role of TCS in wider sustainability issues, the impact the company has through its customer engagements and its operations, and the role that the company experts play in professional associations, industry forums and other thought leadership activities to address important issues raised by stakeholders. 1 GRI 3-1 Integrated Annual Report 2023-24 # Sustainability Disclosures # TCS ESG # Principles, Material Topics and Initiatives |Environment|Social| |---|---| |# Material Topics<br/>- Climate Change (I) # Principle<br/>TCS' environmental stewardship rests on four pillars: carbon footprint mitigation, water conservation and recycling, waste reduction and recycling, and preserving biodiversity. # Key Themes<br/>- Energy management - GHG emissions - Water management - Waste management - Biodiversity # Targets<br/>- Reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 70% by 2025 over a 2016 base year. - Net-zero emissions by 2030. - 3% YoY reduction in freshwater consumption across owned campuses. - Reduction in waste generation, maximizing recycling / reuse to divert waste sent to landfill. - Committed to Tata Aalingana program. # Initiatives<br/>- Natural Capital: Page 24, 25 - BRSR: Pages 149 to 159 |# Material Topics<br/>- Business Sustainability (I) # Principle<br/>TCS takes a long-term view, building deep client relationships, and nurturing them, which leads to mutual growth and sustainable outcomes. # Key Themes<br/>- Economic performance - Demand sustainability - Investments in capability development # Targets<br/>- Maintain a financially strong, viable business that is able to adapt to changing technology landscapes, stay relevant to customers and profitably grow its revenues consistently. # Initiatives<br/>- Letter from the CEO - Pages 8 to 10 - Financial Capital - Pg 16,17 - Intellectual Capital - Page 20,21 - MD&A - Strategy for Sustainable Growth, Enabling Investments- Pages 70 to 72 | # Material Topics # Talent Management (I) # Principle TCS is invested in its people for the long term, supporting them to build the meaningful careers they aspire to. # Key Themes - Talent Acquisition - Talent Development - Employee Engagement - Talent Retention - Competitive Compensation # Targets - Attract, develop, motivate and retain diverse talent, that is critical for the company's continued success. - Maximize the potential of every employee by creating a purpose-driven, inclusive, stimulating, and rewarding work environment, delivering outstanding employee experience, while fuelling business growth. # Initiatives - MD&A - Pages 72 to 74 # Material Topics # Diversity, Equity and Inclusion (I) # Principle TCS nurtures and strengthens a diverse, inclusive and equitable culture, where each individual feels seen and heard, and their contributions respected and valued. # Key Themes - Diversity, Equity and Inclusion (DEI) # Targets - Embrace diversity in race, nationality, ethnicity, gender, age, physical ability, neurodiversity, and sexual orientation to create a workforce that contributes in more ways than one to the societies the company works within. - Global DEI policy that prohibits discrimination against any diverse identity group. # Initiatives - MD&A - Page 74 * Boundary of Impact for Material Topics : Internal (I), External (E) MD&A: Management Discussion and Analysis, CG: Corporate Governance Report, BRSR: Business Responsibility and Sustainability Report 2GRI 3-2, GRI 3-3 Integrated Annual Report 2023-24 # Sustainability Disclosures # Governance # Material Topics # Local Communities (E) TCS' vision is to empower communities by connecting people to opportunities in the digital economy. # Key Themes - Local communities - Education and skill development - Job creation - Taxes payable in different regions - Environmental stewardship - Supplier Social and Environmental Assessment # Targets - Build inclusive, equitable and sustainable pathways for all, with a special focus on youth, women, and marginalized communities. |
- Comply with relevant tax laws and obligations in all the jurisdictions TCS operates in and accordingly pay its fair share of taxes in respective countries. # Initiatives - Social Capital - Page 23 - Natural Capital - Page 24, 25 - CG - Tax Strategy- Page 95 - BRSR - Page 143, 160 - Financial Statements - Income Taxes - Pg 224 to 228, country wise income taxes - Pg 304 to 306 # Material Topics # Corporate Governance (I) TCS' philosophy on corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate behaviour and fairness to all stakeholders. # Key Themes - Governance Structure and composition - Independence of the Board and Minority Interest - Avoidance of conflict of interest - Board oversight - Disclosure and Transparency - Enterprise Risk Management - Succession Planning - Remuneration Policy # Targets - Maintain board, management accountability and drive corporate ethics, values and sustainability. - Monitor compliance with laws of the countries in which the company operates, as well as global legislation. # Initiatives - CG - Page 94, 95 # Material Topics # Ethics and Integrity (I) TCS' core values are: Leading Change, Integrity, Respect for the Individual, Excellence, Learning and Sharing. # Key Themes - Value, Ethics and Culture - Compliance # Targets - Strong governance at board, executive and management levels through compliance committees and compliance working groups. - Effective internal controls to comply with regulations, keep a check on unlawful and fraudulent activities and internal audits to provide compliance assurance. # Material Topics # Data Privacy (E) # Principle - To ensure data protection of stakeholders - To make TCS reliable, resilient and immune to existing and evolving volatile environment of constant changes, accidents, attacks and failures. # Key Themes - Data Privacy - Cyber Security # Targets - Ensure controls and robust risk response mechanisms to protect personal data in the TCS ecosystem and also in customer engagements. - Protect all information and assets that TCS owns or is responsible for; thus, ensuring an efficient, safe and secure working environment for TCS and its customers. # Initiatives - BRSR - Pages 164 to 166 # Material Topics # Technology enabling Building greater futures (E) # Principle TCS engages with clients and partners to help shape their journeys to more sustainable and future-fit businesses that thrive within an ecosystem. # Key Themes - Sustainability Services and Offerings # Targets - Help enterprises use the power of technology and innovation to pioneer new sustainable opportunities, take an ecosystem-led approach to build greater futures. - Built a co-innovation network comprising of academia, startups, and business partners, focusing on social innovation and sustainability initiatives that impact people at the grassroots. # Initiatives - Intellectual Capital - Page 22, 23 - BRSR - R&D and Capex spend - Page 135 - MD&A - Enabling Investments - Pages 70 to 72 # Integrated Annual Report 2023-24 # Sustainability Disclosures # TCS Climate Related Disclosures In FY 2023, TCS' climate related disclosures were aligned to the Taskforce for Climate-related Financial Disclosures (TCFD). Subsequently, TCFD fulfilled its remit and was disbanded in October 2023. The International Sustainability Standards Board (ISSB) released IFRS S2, Climate-related Disclosures, in January 2024, which is aligned with the recommendations of TCFD. This year, TCS has disclosed information related to climate-related risk and opportunities aligned with IFRS S2. IFRS S2 applies to disclosure of (1) climate related risks (physical and transitional), to which the entity is exposed and (2) climate related opportunities available to the entity. The disclosure requirements in IFRS S2 are structured around the core content related to the following sections: - Section 1: Governance - Section 2: Strategy - Section 3: Risk Management - Section 4: Metrics and Targets Each of the above topics are addressed below. # Section 1: Governance TCS has a Board level Stakeholder Relationship Committee (SRC) that oversees 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 with respect to sustainability and climate change. - 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 updates are provided by the Chief Human Resources Officer (CHRO) and is supported by the Head- Environmental Sustainability, Health and Safety (ESHS) who oversees the environment and climate change implementation at the organisation. - 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. - Statement by Senior management: Refer page number 132 in BRSR for N G Subramaniam, COO & Executive Director's statement. - During the half yearly meetings, the SRC monitors the progress towards the carbon targets and the carbon reduction initiatives that have been implemented and planned. # Competency TCS has a competent team working on Environmental Sustainability. TCS' Head- Environmental Sustainability, Health, and Safety (ESHS) is a Doctorate in Environmental Science and Engineering and has over 30 years of post-doctoral experience in environmental sustainability and climate change. The ESHS team has recruited professionals who have the requisite qualification and experience in climate change and environmental sustainability. The team has undergone training in advanced topics and regularly participates in external training programs and sessions on the emerging frameworks and regulatory requirements around climate change. File: AR_TCS_2023_2024.md TCS is also a member of the Confederation of Indian Industries (CII) and National Association of Software and Services Companies (NASSCOM), and the company participates as panelist, assessor, or speaker in their training and capacity building workshops on climate change with the perspective of spreading know-how on ESG, climate change mitigation and adaptation strategies among other industries. Remuneration: Refer page number 103 for information on remuneration of the Board members. Apart from the SRC, TCS also has the Risk Management Committee (RMC) that is responsible for risk management oversight at the corporate level. # 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. # Sustainability Disclosures 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. # Section 2: Strategy Climate related risks continue to challenge businesses in every possible way, sometimes amplifying existing risks. Not only is their nature evolving, but their speed of impacting the organisation's operations is also increasing. Operating in an uncertain and ever-changing environment, TCS' global operations bring in considerable complexities and TCS' robust enterprise risk management framework aids in ensuring the strategic objectives are achieved. This framework enables risk identification for short, medium, and long term, risk assessment, risk response planning and actions, risk monitoring and overall risk governance. # Climate-related risks and opportunities Refer to the MD&A section on page number 86 of the TCS Integrated Annual Report for identified climate-related risk and opportunities that could reasonably affect TCS' prospects. The section includes the company's adaptation methodology which will be implemented over following time horizons: |Time-horizon|From (years)|To (years)| |---|---|---| |Short-term|0|5| |Medium-term|5|10| |Long-term|10|Beyond 10| Below is a brief description of TCS' approach and identification of climate-related risks and opportunities. |Climate related R&O|TCS Approach| |---|---| |Current regulation|Regulations undergo frequent changes and, to accommodate such changes, the company must be aware and responsive. In India operations, TCS must comply with all the environmental consent conditions around emissions, water discharge, waste recycling etc. These regulations are included in TCS' risk assessment as compliance risk and thereafter integrated into its mitigation plans. The company also reports to the Securities and Exchange Board of India (SEBI) mandated BRSR framework, which includes non-financial indicators and is a part of this Integrated Annual report. This year as per BRSR reporting requirements, TCS is also undergoing reasonable assurance for the core indicators of BRSR.| |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 are likely to impact the company. 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 work 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.| |Legal|TCS tracks environmental legal compliance (air emissions, water discharges, waste management and others) on periodic basis and have a very robust internal compliance management system to identify and comply with all legal requirements of current, amended and new regulations. While the possibility of a litigation risk is very low, climate change impacts can pose few risks indirectly to TCS.| |Market|Climate change is driving a lot of changes in the company's customer behaviour, thus creating new markets and new opportunities, giving TCS 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 reputation. Climate risks are hence included as strategic risks which is reviewed by leadership to position the company better in the market. This information is required to respond to CDP supply chain module and various customer surveys on sustainability like Dow Jones Sustainability Index, EcoVadis, MSCI, Sustainalytics, etc. Hence performing well in these ratings/scorings is very crucial in maintaining the market reputation which the organization holds.| |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 extreme weather events like heavy precipitation, flood, and cyclones. E.g., The company's 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.| Integrated Annual Report 2023-24 # Sustainability Disclosures # Climate related # TCS Approach Despite the Paris Agreement and global climate action, global warming continues unabated. 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 few coastal cities, rise in sea level and related impacts like land submergence, saltwater intrusion, disruption to network and communication systems are more likely. These risks are long term and included from perspective of planning appropriate infrastructure. TCS has set targets to reduce carbon emissions (scope 1 and 2) by 70% in 2025 compared to 2016 base year and achieve Net Zero by 2030. These are aligned with the global goals taken under the Paris agreement to fight global warming by keeping the planet's temperature below 1.5 degrees Celsius. TCS has reduced its absolute carbon footprint across Scope 1 and Scope 2 by 80% in FY 2024 over a baseline of 2016, exceeding TCS' target achievement by 10%, one year ahead of time. # Business model and value chain TCS' business model and value chain includes its customers and suppliers. The sustainability and climate related transition risks are covered here along with some mitigation plans. # Customers TCS is an IT services and business solution provider company working mostly with Fortune 1000 or Global 2000 corporations and the public sector. The customer perception around climate change risks has strengthened, especially in the major markets, and this is reflected in the increasing customer requests on climate change performance through platforms like CDP, SBTi commitment, RFPs. These all show how adapting to changing customer behaviour around climate change is crucial for business continuity. TCS' stakeholders, especially its customers and employees look at it as a responsible corporate citizen when it comes to climate action. The company's efforts in this domain have been recognized through ESG ratings and CDP ratings / climate change performance (carbon reduction against targets, % renewable energy). In an event, if TCS is unable to meet its climate change commitments, it can lead to a negative impact on its brand and reputation, as well as ESG ratings. A failure to meet the targets, customer expectations or evolving regulatory requirements could also potentially affect its market capitalization. |
TCS ensures that these risks are identified at an early stage and work on mitigation and improvement plans. The company also has a robust business continuity plan. It is an end-to-end framework that effectively manages through defined policy, procedures, guidelines and through in-house developed tools that support planning and communication with all stakeholders. The framework is fully compliant and certified to ISO 22301:2019, CMMI-SVC and is integrated with TCS quality management system for consistent deployment across the organization. TCS also has Emergency Preparedness Plans (EPP) for disasters such as earthquake, floods, cyclones etc in its internal portal. The plan outlays the responsibilities of action owners, plan description including precautions to be taken, evacuation procedures and post incident action plan which would need to be followed at locations facing the emergency scenario. # Suppliers Towards ongoing sustainability assessment, TCS launched its Supplier Sustainability Assessment Platform in FY 2023 and initiated on-boarding of its top supply chain partners. Through this platform, TCS plans to support its suppliers with engagement and guidance to help them improve their sustainability performance. In FY 2024, the company has successfully assessed 17% of its value chain partners (by spend) for sustainability criteria. These efforts ensure that all suppliers who form upstream part of the value chain are assessed for sustainability and climate risks. # Strategy and decision-making Climate-related risks and opportunities have influenced TCS' strategy in the following ways: |Area|Description of influence| |---|---| |Products and services|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. 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 are engaging us 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.| Integrated Annual Report 2023-24 # Sustainability Disclosures # 321 # Area # Description of influence Supply chain and/or value chain: Supply Chain sustainability through responsible sourcing is one of the risk mitigations that TCS has identified 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 assets procurement as this is directly correlated with its emission profile. Climate related risks play a very important role in supply chain engagements, and TCS is working with its suppliers to bring in improvements in overall supply chain sustainability related aspects. As mentioned in the previous section on suppliers, TCS has launched the supplier sustainability assessment platform to facilitate improvements in the supply chain through evaluation and assessment of suppliers. Investment in R&I: TCS' investments in R&I have resulted in solutions like Envirozone™, Clever Energy and IP2™. TCS has been using Clever Energy for the last several years to monitor and help reduce its energy consumption and is now commercially selling it and the other two solutions to clients to help them achieve their sustainability goals. Additionally, TCS has been investing in building green campuses (IGBC certified). These initiatives have enabled reduction of carbon footprint. Operations: Climate Change risks play an important consideration in TCS' operations. TCS has created an environmentally sustainable approach by creating green policies, processes, frameworks, and infrastructure. The company's 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 business operations. These all help the company in achieving its emission reduction targets and journey towards Net Zero by 2030. Direct costs, Capital expenditures, Capital allocation: Climate risks and opportunities are one of the factors while making financial considerations especially while making investments in offices, equipment, and renewable energy production. |
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. Refer BRSR section, Principle 6, page number 152, 153 for more details on the initiatives that also help the company to position itself as leaders in the climate domain hence contribute substantially to its market value. # Financial position, financial performance, and cash flows # Substantive financial or strategic impact of Risk Assessment: Climate risks like business disruption, changing regulatory landscape, acute physical stress and transition risks are identified, prioritized, assessed and managed by the ERM team. Anything with the potential to disrupt regular operations by more than 10% and triggers Business Continuity Plans at the sites is considered as substantial. The financial risk exposure is calculated considering the following quantifiable indicators- (1) Proportion of business units affected OR percentage of operations impacted; (2) Probability of occurrence of extreme climate related events, and 3) the impact potential at the affected locations based on size of operation. In any given year the overall potential financial impact due to an extreme weather event is considered as 0.75% of the revenue. TCS considers a risk tolerance of 10% of the exposure for climate related risks and considered as substantive. Based on the severity and the risk exposure, the appropriate risk response is finalized, and mitigation actions are assigned to relevant functions. The company has identified the following climate-related risks with the potential to have a substantive financial or strategic impact on the company's business: a. Risk of impact on direct operations: TCS has large operations based out of offices in coastal cities which have a high exposure to extreme weather events like high rainfall, cyclones, rise in sea level, etc. During FY 2024, there were no major cyclones that affected the company's campuses. However, earlier event like Cyclone Amphan led to damages in its Kolkata, India campus specifically to the rooftop solar PV installations, solar water heater panels, roof mounted HVAC components, HRW electrical panel room, energy bin of biogas chamber, apart from multiple water leakages at basement and many other external physical damages. This indicates the increased severity and frequency of extreme weather events such as cyclones and floods and the impact these can cause directly on the operations. TCS accounts for such risks at design stage through cyclone and flood water resistance considerations while constructing new buildings. For greenfield projects, the building structure is designed (a) for seismic load as per IS 1893 (Part-1) 2016; Amendment No:2-2020 and (b) for wind speeds as per IS 875 codes. TCS has a strong business continuity plan (critical business operations can be shifted to another city/country/geography) and therefore these physical risks will not affect the business operations significantly, except for the financial implications related to infrastructure damages (if any). Hence the potential financial impact due to physical damage because of extreme weather events is calculated as a percentage of revenue using a risk factor, which in turn is arrived through the company's risk assessment exercises. The potential financial impact will be 0.75% of the revenue which comes to approximately ₹ 1,807 crores or US$218 million. b. Risk of increase in capital expenditure: TCS is an IT services, consulting, and business solutions organization with a presence across multiple geographies, industries, services and products. Being one of the frontrunners in ESG performance, in 2021, the company has taken up ambitious carbon targets as mentioned in previous sections and have also achieved its near-term targets 2 years ahead. # Sustainability Disclosures of timelines. In FY 2024, TCS has further brought down its Scope 1 and Scope 2 emission by 80% over base year 2016. This was despite increased electricity consumption in FY 2024 from employees' return to office and addition of new offices to the reporting boundary. Apart from organizational level commitments, the emerging regulations also motivate TCS to transition towards low carbon business. TCS will need additional CAPEX and OPEX to ensure compliance. The company has envisaged this as a risk, and is developing greener solutions and transitioning to renewable energy. In FY 2024, RE accounts for 74% of total energy and have increased percentage of green tariff. # i. TCS' new campuses are designed according to green building standards for energy and resource efficiency to reduce the carbon footprint. The company invests in energy efficiency initiatives taking into consideration a payback period of 4-5 years. It is also retrofitting its older buildings with energy efficient equipment. |
# ii. TCS' IoT-based Real-time Energy Management System (TCS Clever Energy™) initiative that involves real time monitoring to optimize the operational energy efficiency is used across all offices. This smart, scalable, analytics driven IoT solution uses TCS Connected Universe Platform (TCUP) IoT platform, which forms the backbone enabling visualization of data acquired from various locations and facilities' energy meters and sensors. # iii. While the above initiatives were carried out across TCS India campuses, focus towards achieving Net Zero is also driven through carbon neutrality across Scope 1 and Scope 2 emissions in North America, UK and Ireland, Europe, Asia Pacific, Japan, Latin America, and Middle East & Africa. # c. Risk of Impacting Reputation and Brand Value: TCS is an IT services company working mostly with Fortune 1000 or Global 2000 corporations and the public sector. The customer perception around climate change risks has strengthened, especially in the major markets, and this is reflected in the increasing customer requests on climate change performance through platforms like CDP, SBTi commitments, RFPs and other surveys/ questionnaires. Thus, in an event if TCS is unable to meet its climate change commitments, it can impact the company's brand and reputation, as well as international ESG ratings. The risk due to the same is realized in terms of the company's brand value and the risk is estimated as 0.1% of the same. In FY 2024, TCS brand value rose to US$19.2 billion (Source: Brand Finance). Hence, the potential financial impact due to this risk is estimated at US$19.2 million. To mitigate these impacts, the company has undertaken many initiatives to mitigate its environmental impact which includes green building design, energy efficient building and IT infrastructure, and transition to renewable energy. All the stakeholders are well informed about TCS' climate change performance through its external disclosures which helps to minimize the reputational risks. TCS has identified the following climate-related opportunities with the potential to have a substantive financial or strategic impact on its business: # i. TCS has a large building footprint with its campuses alone covering more than 38 million sq. ft area in India. Out of this, over 67.3% of its buildings are certified to IGBC Green Building standards. TCS has steadily increased its portfolio of green buildings, thereby ensuring energy efficiency in its buildings and reducing both emissions and operating expenditures. Apart from this, the company is also working on improving and upgrading its energy efficiency in existing buildings. Few years back, TCS India took up a major project to change the luminaires to LEDs across its locations which contributed towards significant energy savings. Major retrofits were carried out at some locations with legacy infrastructure to improve the efficiency levels. The TCS Remote Energy Management and Control program witnessed rapid scaling up and further maturity during the year by leveraging IoT platform to acquire asset (chillers, air handling units, etc.) level data which is analyzed to improve asset efficiency and operations. The data center PUE (weighted average) of 1.70 was achieved for the corporate data centers at Mumbai and Chennai. In FY 2024, TCS has achieved a saving to the tune of 16,301 MWh due to energy saving initiatives. (This includes HVAC energy efficiency projects, UPS based energy efficiency projects, expansion in green buildings and real time monitoring of energy efficiency). TCS uses multiple energy sources in its daily operations, electricity being the primary source. Majority of the electricity comes from conventional sources, but TCS has increased the share of renewable electricity (RE) over the years through onsite rooftop solar generation, third party procurement and purchase of Energy Attribute Certificate (EAC) (in select geographies). The RE consumption as a percentage of total electricity consumption has increased from 15.6% in FY 2021 to 74% in FY 2024. TCS' owned roof top solar projects contribute 3 % of the same. Apart from roof top solar photo voltaic installations, TCS increased the renewable energy procurement through a switch over to green tariffs for operations and open access power purchase agreements (PPA). # ii. TCS is looking at developing solutions that respond to changing consumer behaviour. Through its Connected Marketing team, TCS uses sustainability in the social media perspective to better understand the 'green' needs of its consumers, and to also see how consumers are reacting to the new green products that have been introduced. Changing consumer behaviour and expectations are most reflective in the power utility space. |
Towards this area, TCS has developed several strategic partnerships, towards thought-leadership development and solution enhancement (Example: Smart Power and Smart Energy are key solution areas of TCS' Utilities Industry Unit). # Climate Resilience A brief description of the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2oC or lower scenario. Integrated Annual Report 2023-24 # Sustainability Disclosures # Climate related scenario # Transition scenarios IEA B2DS 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 driver 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). In the transition scenario, the IEA B2DS approach has been selected as its more conservative scenario. The inputs included those from Intergovernmental Panel for Climate Change (IPCC) reports, the Nationally Determined Contributions (NDCs), the Sustainable Development Goals (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 behaviour 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 scenarios RCP 8.5 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 physical 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 them 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). File: AR_TCS_2023_2024.md 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 TCS understand the worst-case climate impacts on its operations. The inputs included IPCC reports, the NDCs, the SDGs and Govt. 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). # Section 3: Risk management At TCS, the Corporate Risk Office, led by the Chief Risk Officer, is responsible for driving Enterprise Risk Management (ERM) across all functions in line with TCS Global Risk Management Policy. Refer the MD&A section on page numbers 78, for details on how ERM is driven across the company on all topics, including climate related risks and opportunities. |
The company also considers evolving concepts, trends, policies, customer requirements, regulations, and climate scenario analysis to identify Risk & Opportunities. The company also considers international guidelines/frameworks like GRI, SASB, and CDP for Risk & Opportunity drivers. Risk Assessment Methodology: Refer the MD&A section page number 79 of the TCS Integrated Annual Report for information on Enterprise Risk Management process followed at TCS. # Sustainability Disclosures All climate-related risks are embedded into entity's overall risk management process. TCS has an internal application where identified risks are baselined at the beginning of the year, tracked quarterly and updated with relevant progress. Each risk has an expiry date. Each risk owner responds with the progress and at the end of the financial year ensures closing of the risk. # Section 4: Metrics and targets # Climate related metrics a. Climate-related metrics - Scope 1,2 and 3 greenhouse gas (GHG) emissions in metric tons of CO2 equivalent are disclosed on page number 152, 158 of the BRSR report. The emissions are in accordance with the GHG Protocol Corporate Accounting and Reporting Standards. TCS has a robust environmental sustainability tool where all relevant environmental data are collected monthly, validated, and internally assured periodically across geographies. All locations within the operational control of TCS are included in the boundary of environmental data reporting (consolidated accounting group as per IFRS-S2). GHG emission factors are used from the latest version of IEA, DEFRA, USEPA, GHG Protocol All Sector Tools and regional sources for specific geographies (e.g. CEA for India) to estimate the GHG emissions. The approach, inputs and assumptions are detailed on Page number 152, 158 as part of the BRSR section. The carbon emission data is independently assured by external assurance providers at the end of the financial year. In FY 2024, scope 1 and 2 emissions have undergone reasonable assurance and scope 3 has been subject to limited assurance by KPMG. TCS reports its scope 1, 2 and 3 emissions in the Integrated Annual Report and in CDP (Climate change) disclosures. b. Climate-related transition risks--Business activities vulnerable to climate-related transition risks;- Refer section Sustainability Risks- Climate change and Environmental aspects (R & O), page number 86. c. Climate-related physical risks--Business activities vulnerable to climate-related physical risks;- Refer section Sustainability Risks- Climate change and Environmental aspects (R & O), page number 86. d. Climate-related opportunities--Business activities aligned with climate-related opportunities;- Refer section Sustainability Risks- Climate change and Environmental aspects (R & O), page number 86. e. Capital deployment--the amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities;- Refer BRSR section in Principle 2 (Percentage of R&D and capital expenditure (capex) investments in specific technologies to improve the environmental and social impacts of product and processes to total R&D and capex investments made by the entity, respectively, Page number 135) f. Internal carbon prices: The organization has calculated an internal carbon price based on the total investments envisaged for energy efficiency programs, transition to renewable energy and other investments towards emission reductions. Currently TCS does not apply this carbon price to determine the feasibility of projects or to apply a carbon tax to generate funding for the projects. All these projects and initiatives are driven through internal accruals since they align to overall company and Tata Group philosophy. Currently, TCS is not focusing on offsetting to drive reductions and the company may take up the carbon cost/tax mechanism in the future to generate budgets for purchase of offset instruments. In the coming years, the company may plan to consider applying a carbon tax to business travel (and employee commuting-company provided transport) to bring out the "carbon" cost. This will help reduce Category 6 and 7 of Scope 3 emissions by either reducing travel or switching to carbon efficient means of travel and transportation (like EVs). The price for each metric tonne of greenhouse gas emissions the entity uses to assess the costs of its greenhouse gas emissions is ₹ 2,365. Business decision-making processes this internal carbon price is applied to are: - Capital expenditure - Operations procurement - Risk management - Opportunity management - Value chain engagement Remuneration: Refer page number 103 for information on remuneration of the Board members. # Climate-related targets TCS' climate related targets are mentioned along with its metrics, timeline, and performance in page 24, 25 of the Natural Capital section. In May 2021, TCS set carbon target of 70% reduction of absolute Scope 1 + 2 emissions by 2025 (vs base year 2016) and Net Zero by 2030. |
This target setting is aimed to mitigate the carbon emissions from its activities and enables adapting to climate change risks. The target applies to the entity in entirety across geographies. TCS has already achieved 71% reduction in scope 1 and 2 emissions in FY 2023 (Vs 2016) and 80% reduction in FY 2024 (Vs 2016) thereby overachieving the targets much ahead of its timelines. The performance against the targets is disclosed in this Integrated Annual Report in the Natural Capital Section on Page numbers 24 and 25. TCS has made its commitment to SBTi targets. In June 2022, TCS has responded to SBTi's urgent call for corporate climate action by committing to align with 1.5°C and net-zero through the Business Ambition for 1.5°C campaign. This is published on SBTi website and can be viewed at Companies taking action- Science Based Targets. TCS is working towards submitting the targets for validation by SBTi. # Sustainability Disclosures # GRI Content Index TCS' Integrated Annual Report 2023-24, which includes the Board and Management Commentary, Compliance Reports, Financial Statements, and the Business Responsibility and Sustainability Report, is with reference to the Global Reporting Initiative (GRI) Standard. 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 2024 against the GRI standard requirements. |GRI Standard Disclosure and Description|Section *|Page No.| |---|---|---| |GRI 2: General Disclosures 2021| | | |1. The organization and its reporting practices| | | |2-1 Organizational details|BRSR|127| |2-2 Entities included in the organization's sustainability reporting|BRSR|128, 129| |2-3 Reporting period, frequency and contact point|BRSR|127| |2-4 Restatements of information|BRSR|127| |2-5 External assurance|BRSR|128, 132| |2. Activities and workers| | | |2-6 Activities, value chain and other business relationships|BRSR|128| |2-7 Employees|BRSR|128| |2-8 Workers who are not employees|BRSR|128| |3. Governance| | | |2-9 Governance structure and composition|CG|93, 94| | |BRSR|132| |2-10 Nomination and selection of the highest governance body|CG|93, 94| |2-11 Chair of the highest governance body|CG|94| |2-12 Role of the highest governance body in overseeing the management of impacts|CG|94, 95| |2-13 Delegation of responsibility for managing impacts|CG|102| | |BRSR|132| |2-14 Role of the highest governance body in sustainability reporting|CG|95, 147| |2-15 Conflicts of interest|CG|94| |2-16 Communication of Critical Concerns|BRSR|130, 138, 142, 147, 148, 162, 164| |2-17 Collective knowledge of the highest governance body|BRSR|132| |2-18 Evaluation of the performance of the highest governance body|Directors' Report|58| | |CG|95| |2-19 Remuneration policies|CG|102| | |BRSR|147| |2-20 Process to determine remuneration|CG|95, 100, 102| |2-21 Annual total compensation ratio|BRSR|147| |4. Strategy, policies and practices| | | |2-22 Statement on sustainable development strategy|Letter from the CEO|8| | |MD&A|70| | |BRSR|132, 146| |2-23 Policy commitments|BRSR|131, 133, 148, 165| |2-24 Embedding policy commitments|BRSR|131, 148| 1 Requirement 7: Publish a GRI Content Index * MD&A: Management Discussion and Analysis, CG: Corporate Governance Report, BRSR: Business Responsibility and Sustainability Report # Sustainability Disclosures |GRI Standard Disclosure and Description|Section *|Page No.| |---|---|---| |2-25 Processes to remediate negative impacts|BRSR|130, 138, 142, 147, 148, 162, 164| |2-26 Mechanisms for seeking advice and raising concerns|BRSR|130, 138, 142, 147, 148, 162, 164| |2-27 Compliance with laws and regulations|BRSR|133, 156| |2-28 Membership associations|BRSR|160| |5. |
Stakeholder engagement| | | |2-29 Approach to stakeholder engagement|BRSR|143, 144| |2-30 Collective bargaining agreements|BRSR|138| |GRI 3: Material Topics 2021| | | |3-1 Process to determine material topics|Stakeholder Engagement and Identification of Material Topics|315| |3-2 List of material topics|BRSR|130| | |TCS ESG Principles, Material Topics and Initiatives|316, 317| |3-3 Management of material topics|MD&A|79| | |BRSR|130, 131, 141, 142, 155| | |TCS ESG Principles, Material Topics and Initiatives|316, 317| |GRI 200: Economic Performance| | | |GRI 201: Economic Performance 2016| | | |201-1 Direct economic value generated and distributed|Financial Capital|16, 17| |201-2 Financial implications and other risks and opportunities due to climate change|MD&A|86| | |BRSR|130| |201-3 Defined benefit plan obligations and other retirement plans|BRSR|137| |GRI 202: Market Presence| | | |202-1 Ratios of standard entry level wage by gender compared to local minimum wage|BRSR|147| |GRI 204: Procurement Practices 2016| | | |204-1 Proportion of spending on local suppliers|BRSR|162| |GRI 205: Anti-corruption 2016| | | |205-2 Communication and training about anti-corruption policies and procedures|BRSR|133| |205-3 Confirmed incidents of corruption and actions taken|BRSR|133| |GRI 207: Tax 2019| | | |207-1 Approach to tax|CG|95| |207-2 Tax governance, control, and risk management|CG|95| |207-3 Stakeholder engagement and management of concerns related to tax|CG|95| |GRI 300: Environmental Performance| | | |GRI 302: Energy 2016| | | |302-1 Energy consumption within the organization|BRSR|149, 150| |302-3 Energy intensity|BRSR|149, 150| |GRI 303: Water and Effluents 2018| | | |303-1 Interactions with water as a shared resource|BRSR|151, 156| |303-2 Management of water discharge-related impacts|BRSR|151| |303-3 Water withdrawal|BRSR|150, 156| |303-4 Water discharge|BRSR|156| |303-5 Water consumption|BRSR|150| Integrated Annual Report 2023-24 # Sustainability Disclosures |GRI Standard Disclosure and Description|Section *|Page No.| |---|---|---| |GRI 304: Biodiversity 2016| | | |304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas|* BRSR|156| |304-2 Significant impacts of activities, products and services on biodiversity|* BRSR|159| |304-3 Habitats protected or restored|* BRSR|159| |GRI 305: Emissions 2016| | | |305-1 Direct (Scope 1) GHG emissions|* BRSR|152| |305-2 Energy indirect (Scope 2) GHG emissions|* BRSR|152| |305-3 Other indirect (Scope 3) GHG emissions|* BRSR|158| |305-4 GHG emissions intensity|* BRSR|152, 158| |305-5 Reduction of GHG emissions|* BRSR|152| |GRI 306: Waste 2020| | | |306-2 Management of significant waste-related impacts|* BRSR|135, 136, 155| |306-3 Waste generated|* BRSR|154| |306-4 Waste diverted from disposal|* BRSR|154| |306-5 Waste directed to disposal|* BRSR|154| |GRI 308: Supplier Environmental Assessment 2016| | | |308-1 New suppliers that were screened using environmental criteria|* BRSR|135, 160| |308-2 Negative environmental impacts in the supply chain and actions taken|* BRSR|160| |GRI 400: Social Dimension| | | |GRI 401: Employment 2016| | | |401-1 New employee hires and employee turnover|* Human Capital|18, 19| | |* BRSR|129| |401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees|* BRSR|137| |401-3 Parental leave|* BRSR|138| |GRI 402: Labor/Management Relations 2016| | | |402-1 Minimum notice periods regarding operational changes|* MD&A|74| |GRI 403: Occupational Health and Safety 2018| | | |403-1 Occupational health and safety management system|* BRSR|139| |403-2 Hazard identification, risk assessment, and incident investigation|* BRSR|140, 141| |403-3 Occupational health services|* BRSR|139| |403-5 Worker training on occupational health and safety|* BRSR|139| |403-6 Promotion of worker health|* BRSR|140| |403-9 Work-related injuries|* BRSR|141, 142| |403-10 Work-related ill health|* BRSR|141, 142| |GRI 404: Training and Education 2016| | | |404-1 Average hours of training per year per employee|* Human Capital|19| | |* BRSR|139| |404-3 Details of performance and career development reviews of employees|* BRSR|139| |GRI 405: Diversity and Equal Opportunity 2016| | | |405-1 Diversity of governance bodies and employees|* Human Capital|18, 19| | |* BRSR|129| |405-2 Ratio of basic salary and remuneration of women to men|* BRSR|146, 147| |GRI 406: Non-discrimination 2016| | | |406-1 Incidents of discrimination and corrective actions taken|* BRSR|148| |GRI 413: Local Communities 2016| | | |413-1 Operations with local community engagement, impact assessments, and development programs|* Social Capital|23| | |* BRSR|156, 162| |GRI 414: Supplier Social Assessment 2016| | | |414-2 Negative social impacts in the supply chain and actions taken|* BRSR|143| # Integrated Annual Report 2023-24 # Sustainability Disclosures KPMG Assurance and Consulting Services LLP Telephone: +91 (22) 3989 6000 2nd Floor, Block T2 (B Wing), Lodha Excelus, Apollo Mills Compound, N. M. |
Joshi Marg, Mahalaxmi Mumbai - 400 011 India # Independent Practitioners' Limited Assurance Report To the Directors of Tata Consultancy Services Limited Assurance report on select sustainability disclosures in the Integrated Annual Report prepared in accordance with the Business Responsibility and Sustainability Reporting (BRSR) framework and with reference to the Global Reporting Initiative (GRI) Standards 2021 (together called 'Identified Sustainability Information' (ISI)) of Tata Consultancy Services Limited (TCS) (the 'Company') for the period from 1 April 2023 to 31 March 2024. # Opinion We have performed an assurance engagement on the Identified Sustainability Information (ISI) as detailed in the table below: |Identified Sustainability Information (ISI) subject to assurance|Period subject to assurance|Page number in the Annual Report|Reporting criteria| |---|---|---|---| |Select GRI and BRSR attributes (which are not part of BRSR Core) (refer Annexure 1)|From 1 April 2023 to 31 March 2024|127 to 166 and 315 to 327| | - GRI Standards 2021 - Regulation 34(2)(f) of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements (SEBI LODR) - World Resource Institute (WRI) / World Business Council for Sustainable Development (WBCSD) Greenhouse Gas (GHG) Protocol (A Corporate Accounting and Reporting Standards) - Corporate Value Chain (Scope 3) Accounting & Reporting Standard - Guidance note for BRSR format issued by SEBI This engagement was conducted by a multidisciplinary team including assurance practitioners, engineers and environmental and social professionals. Based on the procedures performed and evidence obtained, nothing has come to our attention to cause us to believe that the company's Identified Sustainability Information on pages [127] to [166] and [315] to [327] of the Annual Report relating to select GRI and BRSR attributes (which are not part of BRSR Core) for the year ended 31 March 2024, subject to limited assurance is not prepared, in all material respects, in accordance with the World Resource Institute (WRI)/World Business Council for Sustainable Development (WBCSD) Greenhouse Gas (GHG) Protocol (A Corporate Accounting and Reporting). # Sustainability Disclosures Reporting Standards), and the Corporate Value Chain (Scope 3) Accounting & Reporting Standard, Regulation 34(2)(f) of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements (SEBI LODR) and with reference to the GRI Standards (2021) and basis of preparation set out in page 128 Section A: General Disclosures 13 of the Integrated Annual Report. We do not express an assurance opinion on information in respect of any other information included in the Integrated Annual Report 2024 or linked from the Sustainability Information or from the Integrated Annual Report 2023, including any images, audio files or embedded videos. # Basis for opinion and conclusion We conducted our engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, and ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, issued by the International Auditing and Assurance Standards Board (IAASB). Our responsibilities under those standards are further described in the "Our responsibilities" section of our report. We have complied with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA). Our firm applies International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, issued by the IAASB. This standard requires the firm to design, implement and operate a system of quality management, including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. # Other information Additionally, we have performed a reasonable assurance engagement on SEBI BRSR Core attributes and issued an independent assurance report on 08 May 2024. Our report thereon is included with the other information. Our limited assurance opinion on the ISI does not extend to other information that accompanies or contains the 'ISI and our assurance report' (hereafter referred to as "other information"). We have read the other information, but we have not performed any procedures with respect to the other information. # Other matter Select BRSR and GRI attributes of the Company for the year ended 31 March 2023 were assured by the previous assurance practitioner who had expressed an unmodified opinion on 09 June 2023. Our opinion is not modified in respect of this matter. |
# Sustainability Disclosures # Intended use or purpose The ISI and our limited assurance report are intended for users who have reasonable knowledge of the BRSR attributes and GRI attributes, the reporting criteria and ISI and who have read the information in the ISI with reasonable diligence and understand that the ISI is prepared and assured at appropriate levels of materiality. Our opinion is not modified in respect of this matter. # Responsibilities for Identified Sustainability Information (ISI) The management of the company are responsible for: - designing, implementing and maintaining internal control relevant to the preparation of the Identified Sustainability Information that is free from material misstatement, whether due to fraud or error; - selecting or developing suitable criteria for preparing the Identified Sustainability Information and appropriately referring to or describing the criteria; and - preparing the Identified Sustainability Information in accordance with the reporting criteria. Those charged with governance are responsible for overseeing the reporting process for the company's ISI. # Exclusions: Our assurance scope excludes the following and therefore we will not express a conclusion on the same: - Operations of the Company other than those mentioned in the "Scope of Assurance". - Aspects of the BRSR and GRI attributes and the data/information (qualitative or quantitative) other than the ISI. - Data and information outside the defined reporting period i.e., 1 April 2023 to 31 March 2024. - The statements that describe expression of opinion, belief, aspiration, expectation, aim, or future intentions provided by the Company. # Inherent limitations The preparation of the company's sustainability information requires the management to establish or interpret the criteria, make determinations about the relevancy of information to be included, and make estimates and assumptions that affect the reported information. Measurement of certain amounts and BRSR and GRI attributes, some of which are estimates, is subject to substantial inherent measurement uncertainty, for example GHG emissions, water footprint, energy footprint. Obtaining sufficient appropriate evidence to support our opinion/conclusion does not reduce the uncertainty in the amounts and metrics. 3 | P a g e # Integrated Annual Report 2023-24 # Sustainability Disclosures # Our responsibilities We are responsible for: - planning and performing the engagement to obtain a limited assurance about whether the ISI is free from material misstatement, whether due to fraud or error; - forming an independent conclusion, based on the procedures we have performed and the evidence we have obtained; and - reporting our conclusion to the Directors of TCS. # Summary of the work we performed as the basis for our conclusion We exercised professional judgement and maintained professional skepticism throughout the engagement. We designed and performed our procedures to obtain evidence that is sufficient and appropriate to provide a basis for limited assurance conclusion. # Limited assurance conclusion Our procedures selected depended on our understanding of the information subject to limited assurance and other engagement circumstances, and our consideration of areas where material misstatements are likely to arise. |
In carrying out our engagement, we: - assessed the suitability of the criteria used by the company in preparing the information subject to limited assurance; - interviewed senior management and relevant staff at corporate and selected locations concerning policies for occupational health and safety, and the implementation of these across the business; - through inquiries, obtained an understanding of TCS's control environment, processes and information systems relevant to the preparation of the information subject to limited assurance, but did not evaluate the design of particular control activities, obtain evidence about their implementation or test their operating effectiveness; - made inquiries of relevant staff at corporate and selected locations responsible for the preparation of the information subject to limited assurance; - undertook ten site visits out of which seven were physical site visits and three were virtual site visits; we selected these sites based on the relative size of the workforce of these locations to the total workforce, unexpected fluctuations in the information subject to limited assurance since the prior period, and sites not visited in the prior period; - inspected, at each site visited, a limited number of items to or from supporting records, as appropriate; - applied analytical procedures, as appropriate; - recalculated the information subject to limited assurance based on the criteria; 4 | P a g e # Integrated Annual Report 2023-24 # Sustainability Disclosures * evaluated the overall presentation of the information subject to limited assurance to determine whether it is consistent with the criteria and in line with our overall knowledge of, and experience with, the company's occupational health and safety. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Shivananda Shetty Partner KPMG Assurance and Consulting Services LLP Date: 08 May 2024 Place: Mumbai 5 | P a g e # Integrated Annual Report 2023-24 # Sustainability Disclosures # Appendix - 1 # Select BRSR and GRI attributes |GRI Indicator|BRSR Linkage|Type of Assurance| |---|---|---| |302-1-(a), (b), (c)-i, (e)|P6 E1- Details of total energy consumption (in Joules or multiples)|Limited| |302-3 (a) Energy intensity|P6 E1- Details of total energy intensity|Limited| |303-3-(a)-I, 303-3-(a)-ii, 303-3-(a)-iii, 303-3-(a)-iv|P6 E3- Provide details of water withdrawal by source|Limited| |303-1-(a), 303-2-(a), 303-4|P6 E4- Provide details of water discharged|Limited| |303-5 (a)|P6 E3- Provide details of water consumption|Limited| |305-1 (a), (b), (c), (d), €Direct (Scope 1) GHG emissions|P6 E7- Provide details of greenhouse gas emissions (Scope 1)|Limited| |305-2 (a), (b), (c), Energy indirect (Scope 2) GHG emissions|P6 E7- Provide details of greenhouse gas emissions (Scope 2)|Limited| |305-4 (a), (b), GHG emissions intensity|P6 E7 - Provide details of greenhouse gas emissions (Scope 1 and Scope 2) intensity|Limited| |306-3-(a) Waste generated|P6 E9- Provide details related to waste generated by category of waste|Limited| |306-4-(a), (b-i), (b-ii), (b-iii), (c-i), (c-ii), (c-iii)|P6 E9 - Provide details related to waste recovered through recycling, re-using or other recovery operations|Limited| |306-5-(a), (b-i), (b-ii), (b-iii), (c-i), (c-ii), (c-iii), (c-iv)|P6 E9- Provide details related to waste disposed by nature of disposal method|Limited| |403-9-(a-i-v), 403-9-(b-i-v)|P3 E11-Details of safety related incidents including lost time injury frequency rate, recordable work-related injuries, no. |
of fatalities|Limited| |303-1 Interactions with water as a shared resource|No direct Linkage|Limited| |303-2 Management of water discharge-related impacts|No direct Linkage|Limited| |303-3-b-(i-iv), 303-4-a-(i-ii)|P6 L1- Water withdrawal, consumption, and discharge in areas of water stress (in kiloliters)|Limited| |303-1-(a), 303-2-(a), 303-4|P6 L1- Water withdrawal, consumption, and discharge in areas of water stress (in kiloliters)|Limited| |303-5 (a)|P6 L1- Water withdrawal, consumption, and discharge in areas of water stress (in kiloliters)|Limited| 6 | P a g e # Integrated Annual Report 2023-24 # Sustainability Disclosures File: AR_TCS_2023_2024.md |304, 413-1-(a-ii), 303-1- (a), 303-1- (c)|P6 E11- If the entity has operations/offices in/around ecologically sensitive areas where environmental approvals /clearances are required, please specify the location and type of operations and if the conditions of environmental approval / clearance are being complied with?|Limited| | |---|---|---|---| |304-2, 304-2-a-(i-vi), 304-2-b-(i-iv), 304-3-(a)|P6 L3- With respect to the ecologically sensitive areas, provide details of significant direct & indirect impact of the entity on biodiversity in such areas along-with prevention and remediation activities.|Limited| | |305-3, 305-3- (a, b)|P6 L2 - Provide details of total Scope 3 emissions|Limited| | |305-4- (a), (b, (c), (d)|P6 L2 - Provide details of total Scope 3 emissions intensity|Limited| | |305-5-(a), (b), (c), (d)|P6 E8 - Projects related to reduction of Green House Gas emissions|Limited| | |306-2|Management of significant waste-related impacts|No direct Linkage| | |GRI Indicator|BRSR Linkage|Type of Assurance| | |308-1, 308-1 (a)|P6 L7- Percentage of value chain partners (by value of business done with such partners) that were assessed for environmental impacts|Limited| | |401-1 (b)|Section A 22- Turnover rate for permanent employees and workers|Limited| | |401-2, 201-3-b-(i-iii), 201-3-c, 201-3-d, 201-3-e|P3 E1- Details of retirement benefits, for Current Financial Year|Limited| | |401-3|Parental leave|P3 E5-Return to work and Retention rates of permanent employees that took parental leave|Limited| |403-1 (a), (b)|P3 E10-Health and safety management system|Limited| | 7 | P a g e Integrated Annual Report 2023-24 # Sustainability Disclosures # Occupational health and safety management system 403-2 (a), (b), (c), 403-4 (a), 403-6 (a) # Hazard identification, risk assessment, and incident investigation 403-5 (a), 404-1 (a-i), 404-2 (a) P3 E8-Details of training given to employees and workers Limited # Worker training on occupational health and safety 403-6, 3-3-(d-i-iii), 403-2-(a-i-ii), 403-9-(c-iii), 403-9-(d), 403-10-(c-iii) P3 E12-Describe the measures taken by the entity to ensure a safe and healthy workplace Limited # Promotion of worker health 404-1, 403-5-(a), 404-1-(a-i), 404-2-(a), 2-24-(a-iv), 205-2-(e), 403-5-(a), 404-1-(a-i-ii), 410-1-a P3 E8-Details of training given to employees and workers # Average hours of training per year per employee 404-3 (a) # Details of performance and career development reviews of employees P3 E9-Details of performance and career development reviews of employees Limited # Diversity of governance bodies and employees 405-1 Section A 21- Participation/Inclusion/Representation of women Limited # Ratio of basic salary and remuneration of women to men 2-25-(e), 406-1-(a) P5 E3-Details of remuneration/salary/wages # Incidents of discrimination and corrective actions taken P5 E8- Number of Complaints made by employees on sexual harassment, discrimination at the workplace, child and forced labour, wages and other human rights related issues Limited # Operations with local community engagement, impact assessments, and development programs 304-1-(a-i-v), 413-1-(a-i-iii), 203-1, 3-3, 2-25-(b), 413-1-(a-viii), 2-12-(b), 2-13- (a, b), 2-29-(a), 2-29-(a-i-iii), 3-3-(d-i-ii), 413-1-(a-iv), 203-1 P8 E1- Details of Social Impact Assessments (SIA) of projects undertaken by the entity based on applicable laws, in the current financial year P8 E3-Describe the mechanisms to receive and redress grievances of the community P8 L1-Provide details of actions taken to mitigate any negative social impacts identified in the Social Impact Assessments P4 L1-Provide the processes for consultation between 8 | P a g e # Integrated Annual Report 2023-24 # Sustainability Disclosures # 414-2 (a) Negative social impacts in the supply chain and actions taken # 2-7-(a), 2-7-(b-i & ii), 405-1-(b-iii) # Employees # 2-8 (a) Workers who are not employees # 2-21 Annual total compensation ratio stakeholders and the Board on economic, environmental, and social topics or if consultation is delegated, how is feedback from such consultations provided to the Board. P4 L3-Provide details of instances of engagement with, and actions taken to, address the concerns of vulnerable/ marginalized stakeholder groups. P3 L5- Details on assessment of value chain partners. |
Limited # General Disclosures 20 a Employees and workers (including differently abled): General Disclosures 20 a- Employees and workers Limited (including differently abled): No direct Linkage Limited # 3-2 List of material topics No direct Linkage Limited 9 | P a g e Integrated Annual Report 2023-24 NOTES NOTES # Stakeholder Engagement # Customer Asia Pacific # Employee Employee Townhall # Vendor # Government AWS rings the closing bell at Nasdaq with TCS (Photo credit: Nasdaq, Inc. / Vanja Savic) # Industry Bodies CEO speaking at Nasscom Technology and Leadership Forum '2024 # Local Community BridgeIT # International organizations, Forum Partners, Media TCS joining global leaders at WEF in Davos, Switzerland # 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 |
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