1) CORPORATE INFORMATION
Tata Consultancy Services Limited (referred to as TCS Limited or
the Company) provides consulting-led integrated portfolio of
information technology (IT) and IT-enabled services delivered through a
network of multiple locations around the globe. The Company''s full
services portfolio consists of IT and Assurance Services, Business
Intelligence and Performance Management, Business Process Services,
Cloud Services, Connected Marketing Solutions, Consulting,
Eco-sustainability Services, Engineering and Industrial Services,
Enterprise Security and Risk Management, Enterprise Solutions,
iON-Small and Medium Businesses, IT Infrastructure Services, Mobility
Products and Services and Platform Solutions.
As at March 31, 2015, Tata Sons Limited owned 73.69% of the Company''s
equity share capital and has the ability to control its operating and
financial policies. The Company''s registered office is in Mumbai and it
has 60 subsidiaries across the globe.
2) SHARE CAPITAL
The Authorised, Issued, Subscribed and Fully paid-up share capital
comprises of equity shares and redeemable preference shares having a
par value of Rs. 1 each as follows:
The Authorised Share Capital was increased to 420,05,00,000 equity
shares of Rs. 1 each and 105,02,50,000 redeemable preference shares of Rs.
1 each pursuant to the amalgamation of two wholly-owned subsidiaries,
Retail FullServe Limited and Computational Research Laboratories
Limited vide Order dated March 22, 2013 and TCS e-Serve Limited vide
Order dated September 6, 2013 of the Hon''ble High Court of Judicature
(b) Rights, preferences and restrictions attached to shares Equity
The Company has one class of equity shares having a par value of Rs. 1
each. Each shareholder is eligible for one vote per share held. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting, except in
case of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
Preference shares carried a fixed cumulative dividend of 1% per annum
and a variable non-cumulative dividend of 1% of the difference between
the rate of dividend declared during the year on the equity shares of
the Company and the average rate of dividend declared on the equity
shares of the Company for three years preceding the year of issue of
the redeemable preference shares.
(e) Equity shares allotted as fully paid up (during 5 years preceding
March 31, 2015) including equity shares issued pursuant to contract
without payment being received in cash
15,06,983 equity shares of Rs. 1 each have been issued to the
shareholders of TCS e-Serve Limited in terms of the composite scheme of
arrangement (the Scheme) sanctioned by the High Court of Judicature
at Bombay vide their order dated September 6, 2013.
3) UNBILLED REVENUE
Unbilled revenue as at March 31, 2015 amounting to Rs. 2439.36 crores
(March 31, 2014: Rs. 2626.08 crores) primarily includes revenue
recognised in relation to efforts incurred on turnkey contracts priced
on a fixed time, fixed price basis.
4) TRADE RECEIVABLES
Trade receivables (Unsecured) consist of the following:
5) Current tax includes additional provision (net) of Rs. 61.33 crores
(March 31, 2014 : additional provision (net) Rs. 467.62 crores) in
domestic and certain overseas jurisdictions relating to earlier years.
The impact of MAT entitlement of earlier period is Rs. 8.83 crores (March
31, 2014 : Rs. 451.92 crores).
6) AMALGAMATION OF COMPANIES WTI Advanced Technology Limited
a) Nature of business
WTI Advanced Technology Limited is engaged in the business of
Information Technology (IT) and Information Technology Engineering
Services (ITES). The Company holds 100.00% of the voting power of WTI
Advanced Technology Limited.
b) WTI Advanced Technology Limited has been amalgamated with the
Company with effect from April 1, 2014 (the appointed date) in
terms of the scheme of amalgamation (Scheme) sanctioned by the High
Court of Judicature at Bombay vide their Order dated March 27, 2015.
Pursuant thereto all assets, unbilled revenue, debts, outstandings,
credits, liabilities, benefits under income tax, service tax, excise,
value added tax, sales tax (including deferment of sales tax), benefits
for and under Software Technology Parks of India (STPI), duties and
obligations of WTI Advanced Technology Limited, have been transferred
to and vested in the Company retrospectively with effect from April 1,
Since WTI Advanced Technology Limited, amalgamated as aforesaid, was
wholly owned by the Company, no shares were exchanged to effect the
c) The amalgamation has been accounted for under the ''pooling of
interests'' method as prescribed by Accounting Standard 14 specified
under Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014. Accordingly, the assets, liabilities
and reserves of WTI Advanced Technology Limited as at April 1, 2014
have been taken over at their book values and in the same form.
The difference between the amounts recorded as investments of the
Company and the amount of Share Capital of WTI Advanced Technology
Limited has been adjusted in the General Reserve.
Accordingly, the amalgamation has resulted in transfer of assets,
liabilities and reserves in accordance with the terms of the Scheme at
the following summarised values:
(a) Defined contribution plans
The Company makes Provident fund, Superannuation fund and foreign
defined contribution fund contributions to defined contribution
retirement benefit plans for eligible employees. Under the schemes, the
Company is required to contribute a specified percentage of the payroll
costs to fund the benefits. In respect of Provident fund contributions
to trust set up for this purpose, the Company is generally liable for
annual contribution and any deficiency in interest cost compared to
interest computed based on the rate of interest declared by the Central
Government under the Employees'' Provident Fund Scheme, 1952. In
addition to such contributions, the Company also recognises potential
deficiency in interest, if any, computed as per acturial valuation of
interest as an expense in the year it is determined.
As of March 31, 2015, the fair value of the assets of the fund and the
accumulated members'' corpus is Rs. 7939.41 crores and Rs. 7419.41 crores
respectively. In accordance with an actuarial valuation, there is no
deficiency in the interest cost as the present value of the expected
future earnings on the fund is greater than the expected amount to be
credited to the individual members based on the expected guaranteed
rate of interest of 8.75%. The actuarial assumptions include discount
rate of 8.00% and an average expected future period of 7.35 years.
The Company recognised Rs. 571.65 crores (March 31, 2014: Rs. 514.91
crores) for provident fund contributions and Rs. 163.47 crores (March 31,
2014: Rs. 136.29 crores) for superannuation contributions in the
statement of profit and loss. The contributions payable to these plans
by the Company are at rates specified in the rules of the schemes.
The Company has contributed Rs. 267.63 crores (March 31,2014: Rs. 177.75
crores) towards foreign defined contribution plans.
(b) Defined benefit plans
The Company makes annual contributions to the Employees'' Group
Gratuity-cum-Life Assurance Scheme, a funded defined benefit plan for
eligible employees. The scheme provides for lump sum payment to vested
employees at retirement, death while in employment or on termination of
employment of an amount equivalent to 15 days salary for service less
than 15 years, three-fourth month''s salary for service of 15 years to
19 years and one month salary for service of 20 years and more, payable
for each completed year of service or part thereof in excess of six
months. Vesting occurs upon completion of five years of service.
The present value of the defined benefit obligation and the related
current service cost are measured using the Projected Unit Credit
Method, with actuarial valuations being carried out at each balance
The following table sets out funded status of the gratuity plan and the
amounts recognised in the Company''s financial statements as at March
The Company has identified business segments (industry practice) as its
primary segment and geographic segments as its secondary segment.
Business segments comprise banking, finance and insurance services,
manufacturing, retail and consumer packaged goods, telecom, media and
entertainment and others such as energy, resources and utilities,
Hi-tech, life science and healthcare, s-Governance, travel,
transportation and hospitality, products, etc.
Revenue and expenses directly attributable to segments are reported
under each reportable segment. Expenses which are not directly
identifiable to specific segment have been allocated on the basis of
associated revenue of the segment and manpower efforts. All other
expenses which are not attributable or allocable to segments have been
disclosed as unallocable expenses.
Assets and liabilities that are directly attributable or allocable to
segments are disclosed under each reportable segment. All other assets
and liabilities are disclosed as unallocable. Fixed assets that are
used interchangeably among segments are not allocated to primary and
Geographical revenue is allocated based on the location of the
customer. Geographic segments of the Company are Americas (including
Canada and South American countries), Europe, India and Others.
7) RELATED PARTY DISCLOSURES
A) Related parties and their relationship
I) Holding Company
Tata Sons Limited
II)(A) Subsidiaries (Direct holding)
1. CMC Limited
II)(B) Subsidiaries (Indirect holding)
i. CMC Americas Inc.
ii. CMC eBiz Inc.
2. Tata Consultancy Services Sverige AB
3. Tata Consultancy Services Asia Pacific Pte Ltd.
i. Tata Consultancy Services Japan Ltd. (merged with IT Frontier
Corporation (a susbsidiary of Mitsubishi Corporation) w.e.f 01.07.2014)
ii. Tata Consultancy Services Malaysia Sdn Bhd
iii. Tata Consultancy Services (China) Co., Ltd.
iv. PT Tata Consultancy Services Indonesia
v. Tata Consultancy Services (Thailand) Limited
vi. Tata Consultancy Services (Philippines) Inc.
vii. Nippon TCS Solution Center Limited
(merged with Tata Consultancy Services Japan Ltd. w.e.f 01.07.2014)
viii. Tata Information Technology (Shanghai) Co. Limited (Amalgamated
with Tata Consultancy services (China) Co., Ltd. w.e.f. 05.11.2013)
ix. Tata Consultancy Services Japan, Ltd. (new entity formed w.e.f
1.07.2014 pursuant to the merger of Tata Consultancy Services Japan
Ltd. and IT Frontier Corporation)
4. TCS Iberoamerica SA
i. TCS Solution Center S.A.
ii. Tata Consultancy Services Argentina S.A.
iii. Tata Consultancy Services De Mexico S.A., De C.V.
iv. TCS Inversiones Chile Limitada
v. Tata Consultancy Services Do Brasil Ltda
vi. Tata Consultancy Services Chile S.A. vii TATASOLUTION CENTER S.A.
viii. TCS Uruguay S.A.
ix. MGDC S.C.
5. Tata Consultancy Services Netherlands BV
i. Tata Consultancy Services Luxembourg S.A.
ii. Tata Consultancy Services Switzerland Ltd.
iii. Tata Consultancy Services France S.A.S.
iv. TCS Italia SRL
v. Tata Consultancy Services Osterreich GmbH
vi. Tata Consultancy Services Danmark ApS
vii. Tata Consultancy Services De Espana S.A.
viii. Tata Consultancy Services Portugal Unipessoal Limitada
ix. Alti S.A.
x. Planaxis Technologies Inc.
xi. Alti HR S.A.S.
xii. Alti Infrastructures Systemes & Reseaux S.A.S.
xiii. Alti NV
xiv. Tescom (France) Software Systems Testing S.A.R.L.
xv. Alti Switzerland S.A.
6. TCS FNS Pty Limited
i. TCS Financial Solutions Australia Holdings Pty Limited
ii. TCS Financial Solutions Australia Pty Limited
iii. PT Financial Network Services
iv. TCS Management Pty Ltd. (Liquidated w.e.f. 23.03.2015)
v. TCS Financial Solutions Beijing Co., Ltd.
7. APOnline Limited
8. Tata America International Corporation
i. MS CJV Investments Corporation
9. Tata Consultancy Services Belgium S.A.
10. Tata Consultancy Services Deutschland GmbH
11. Tata Consultancy Services Canada Inc.
12. Diligenta Limited
i. Diligenta 2 Limited
8. WTI Advanced Technology Limited (Amalgamated with Tata Consultancy
Services Limited pursuant to the order dated 27.03.2015 of the Hon''ble
High Court of Judicature at Bombay. Effective Date: 01.04.2015.
Appointed Date: 01.04.2014)
9. C-Edge Technologies Limited
10. MP Online Limited
11. Tata Consultancy Services Morocco SARL AU (liquidated w.e.f.
30.05.2014 vide court order dated 07.08.2014)
12. Tata Consultancy Services (Africa)(PTY) Ltd.
i. Tata Consultancy Services (South Africa) (PTY) Ltd.
13. TCS e-Serve International Limited
i. TCS e-Serve America, Inc.
14. MahaOnline Limited
15. Tata Consultancy Services Qatar S.S.C.
16. Computational Research Laboratories Inc. (liquidated w.e.f.
17. TCS Foundation (entity incorporated on 13.03.2015 under Section 8
of the Companies Act, 2013)
III) Fellow Subsidiaries with whom the Company has transactions
- Infiniti Retail Limited
- Panatone Finvest Limited
- Tata AIG General Insurance Company Limited
- Tata AIA Life Insurance Company Limited
- Tata Investment Corporation Limited
- Tata Limited
- Tata Asset Management Limited
- Tata Business Support Services Limited
- Tata Capital Limited
- Tata Housing Development Company Limited
- Tata Consulting Engineers Limited
- Tata Sky Limited
- Tata Realty and Infrastructure Limited
- e-Nxt Financials Limited
- Tata Industries Limited
- Tata International Limited
- Tata Autocomp Systems Limited
- Drive India Enterprise Solutions Limited
- Tata Advanced Systems Limited
- Tata Lockheed Martin Aerostructures Limited (formerly Tata
- Tata Capital Housing Finance Limited
- TC Travel and Services Limited
- Tata Securities Limited
- Tata Capital Forex Limited
- Tata Capital Financial Services Limited
- Tata Interactive Systems GmbH
- TATA Africa Holdings (Kenya) Limited
- Tata Zambia Limited
- Tata Sikorsky Aerospace Limited (formerly Tara Aerospace Systems
- Tata Cleantech Capital Limited
- Tata Interactive Systems AG
- Tata Industrial Services Limited
- Tata Uganda Limited
- Tata SIA Airlines Limited
- Tata Africa Holdings (SA) (Proprietary) Limited
- TRIL Infopark Limited (ceased to be an associate and is a
subsidiary w.e.f. 23.03.2015)
- Tata Africa Services (Nigeria) Limited
IV) Key Management Personnel
- Mr. N. Chandrasekaran, Chief Executive Officer and Managing
- Mr. Rajesh Gopinathan, Chief Financial Officer
- Ms. Aarthi Subramanian, Executive Director (w.e.f. 12.03.2015)
As at As at
Particulars March 31, 2015 March 31, 2014
Claims against the Company not
acknowledged as debt 40.72 29.57
Income tax demands (See (a) below) 3901.82 3890.20
Indirect tax demands (See (b) below) 61.01 63.27
Guarantees given by the Company on
behalf of subsidiaries (See (c) and
(d) below) 3310.95 4082.31
a) In respect of income tax demands of Rs. 318.20 crores (March 31, 2014:
Rs. 318.20 crores), not included above, the Company is entitled to an
indemnification from the seller of TCS e-Serve Limited.
b) In respect of indirect tax demands of Rs. 8.53 crores (March 31, 2014:
Rs. 8.53 crores), not included above, the Company is entitled to an
indemnification from the seller of TCS e-Serve Limited.
c) The Company has provided guarantees aggregating Rs. 2694.55 crores
(GBP 291.30 million) (March 31, 2014: Rs. 3167.02 crores) (GBP 317.20
million) to third parties on behalf of its subsidiary Diligenta
Limited. The Company does not expect any outflow of resources in
respect of the above.
d) The Company has provided guarantees aggregating Rs. 87.42 crores (USD
13.97 million) (March 31, 2014: Rs. 83.91 crores) (USD 13.97 million) to
third parties on behalf of its subsidiary Tata America International
Corporation. The Company does not expect any outflow of resources in
respect of the above.
18) CAPITAL AND OTHER COMMITMENTS
a) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 1844.08 crores (March
31, 2014: Rs. 2811.44 crores).
b) The Company has a purchase commitment towards India Innovation Fund
for the uncalled amount of balance Rs. 29618.47 per unit of 1000 units
aggregating to Rs. 2.96 crores (March 31, 2014: Rs. 3.64 crores).
19) DERIVATIVE FINANCIAL INSTRUMENTS
The Company, in accordance with its risk management policies and
procedures, enters into foreign exchange forward, options and future
contracts to manage its exposure in foreign exchange rates. The counter
party is generally a bank. These contracts are for a period between one
day and eight years.
Net gain on derivative instruments of Rs. 150.75 crores recognised in
Hedging Reserve as at March 31, 2015, is expected to be transferred to
the statement of profit and loss by March 31, 2016.
In addition to the above Cash Flow Hedges, the Company has outstanding
foreign exchange forward, options and future contracts with notional
amount aggregating Rs. 19949.03 crores (March 31, 2014: Rs. 15774.90
crores) whose fair value showed a gain of Rs. 159.65 crores as at March
31, 2015 (March 31, 2014: gain of Rs. 261.23 crores). Exchange gain of Rs.
1363.87 crores (March 31,2014 : Exchange loss of Rs. 66.60 crores) on
foreign exchange forward, options and future contracts for the year
ended March 31, 2015 have been recognised in the statement of profit
As at March 31, 2015, the Company has net foreign currency exposures
that are not hedged by derivative instruments or otherwise amounting to
Rs. 2884.79 crores (March 31, 2014: Rs. 681.53 crores).
20) Research and development expenditure aggregating Rs. 192.62 crores
(Previous year: Rs. 176.31 crores), including capital expenditure was
incurred during the year.
21) The Company has revised its policy of providing depreciation on
fixed assets effective April 1,2014. Depreciation is now provided on a
straight line basis for all assets as against the policy of providing
on written down value basis on some assets and straight line basis on
others. Further the remaining useful life has also been revised
wherever appropriate based on an evaluation. The carrying amount as on
April 1, 2014 is depreciated over the revised remaining useful life. As
a result of these changes, the depreciation charge for the year ended
March 31,2015 is higher by Rs. 131.16 crores and the effect relating to
the period prior to April 1,2014 is a net credit of Rs. 528.38 crores
(excluding deferred tax of Rs. 129.62 crores) which has been shown as an
''Exceptional Item'' in the statement of profit and loss.
22) At their respective meetings held on October 16, 2014, the Boards
of the Company and of its subsidiary, CMC Limited have approved a
Scheme of Amalgamation of CMC Limited with the Company. The appointed
date for the proposed Scheme is April 1, 2015. The Scheme is subject to
sanction of the Hon''ble High Courts and all other statutory approvals
as may be required under law.
23) During the year, an amount of Rs. 2326.42 crores has been recognised
in the Statement of Profit and Loss in respect of one-time bonus to
24) During the year, the Company has incurred an amount of Rs. 218.42
crores towards Corporate Social Responsibility expenditure.
25) Previous years'' figures have been recast / restated.