(a) Rights, preferences and restrictions attached to shares
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.
(b) Equity shares allotted as fully paid-up (during 5 years preceding
March 31, 2016) including equity shares issued pursuant to contract
without payment being received in cash 1,16,99,962 equity shares issued
to the shareholders of CMC Limited in terms of the scheme of
amalgamation (''the Scheme'') sanctioned by the High Court of Judicature
at Bombay vide its Order dated August 14, 2015 and the High Court of
Judicature at Hyderabad vide its Order dated July 20, 2015.
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
amalgamation sanctioned by the High Court of Judicature at Bombay vide
its Order dated September 6, 2013.
Previous years'' figures are in italics.
(a) Freehold buildings include Rs, 2.67 crores (March 31, 2015: Rs, 2.67
crores) being value of investment in shares of Co-operative Housing
Societies and Limited Companies.
(b) Net book value of computer equipment of Rs, 6.44 crores (March 31,
2015: Rs, 18.49 crores) and leasehold improvements of Rs, 46.18 crores
(March 31, 2015: Rs, 56.65 crores) are under finance lease.
(c) Legal formalities relating to conveyance of freehold buildings
having net book value Rs, - * crores (March 31, 2015: Rs, 5.18 crores) are
* values less than Rs, 50,000
* Non-current investments having a value of less than Rs, 50,000.
The Company has given letter of comfort to various banks for credit and
/ or foreign exchange hedging facilities availed by its subsidiaries
(a) Tata America International Corporation, (b) Tata Consultancy
Services Switzerland Ltd, (c) Tata Consultancy Services Sverige AB, (d)
Tata Consultancy Services Belgium S.A., (e) Tata Consultancy Services
Deutschland GmbH, (f) Tata Consultancy Services Netherlands BV, (g)
Tata Consultancy Services Asia Pacific Pte Ltd., (h) TCS Italia SRL,
(i) Tata Consultancy Services France S.A.S., (j) Tata Consultancy
Services Malaysia Sdn Bhd and (k) Tata Consultancy Services Luxembourg
S.A. As per the terms of letter of comfort, the Company undertakes not
to divest its ownership interest directly or indirectly in the
subsidiaries and provide such managerial, technical and financial
assistance to ensure continued successful operations of the
On July 2, 2015, the Company through its wholly owned subsidiary, Tata
Consultancy Services Netherlands BV subscribed to 76% share capital of
Tata Consultancy Services Saudi Arabia.
On October 30, 2015, the Company through its wholly owned subsidiaries
TCS Inversiones Chile Limitada and TATA Consultancy Services Chile
S.A., subscribed 100% share capital of Technology Outsourcing S.A.C, an
information technology service provider in Peru.
1.) Current tax includes additional provision (net) of Rs, 31.75 crores
(March 31, 2015: Rs, 61.33 crores) in domestic and certain overseas
jurisdictions relating to earlier years. The impact of MAT entitlement
of earlier period is Rs, 89.24 crores (March 31, 2015: Rs, 8.83 crores).
2.) AMALGAMATION OF COMPANIES
a) Nature of business
CMC Limited is engaged in the design, development and implementation of
software technologies and applications, providing professional services
in India and overseas and procurement, installation, commissioning,
warranty and maintenance of imported / indigenous computer and
networking systems, and in education and training. The Company holds
51.12% of the voting power of CMC Limited.
b) CMC Limited has been amalgamated with the Company with effect from
April 1, 2015 (''appointed date'') in terms of the scheme of amalgamation
(''the Scheme'') sanctioned by the High Court of Judicature at Bombay
vide its Order dated August 14, 2015 and the High Court of Judicature
at Hyderabad vide its Order dated July 20, 2015. The Scheme came into
effect on April 1, 2015 and pursuant thereto all assets, unbilled
revenue, debts, outstanding, 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'') and Special Economic Zone (''SEZ''), duties and
obligations of the CMC Limited, have been transferred to and vested in
the Company retrospectively with effect from April 1, 2015.
Pursuant to the Scheme coming into effect, all the equity shares held
by the Company in CMC Limited shall stand automatically cancelled and
remaining shareholders of CMC Limited holding fully paid equity shares
shall be allotted 79 shares of Rs, 1 each in the Company, credited as
fully paid-up, for every 100 shares of Rs, 10 each fully paid-up held in
the share capital of CMC Limited by adjusting the General reserve.
c) The amalgamation has been accounted for under the ''pooling of
interests'' method as prescribed by Accounting Standard (AS-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 CMC Limited as at April 1, 2015 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 CMC 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 summarized values:
3.) EMPLOYEE RETIREMENT BENEFITS
(a) Defined contribution plans
The Company makes Provident fund, Superannuation fund and foreign
defined contribution fund contributions to defined contribution
retirement benefit plans for eligible employees. Under the schemes, the
Company is required to contribute a specified percentage of the payroll
costs to fund the benefits. In respect of Provident fund contributions
to trust set up for this purpose, the Company is generally liable for
annual contribution and any deficiency in interest cost compared to
interest computed based on the rate of interest declared by the Central
Government under the Employees'' Provident Fund Scheme, 1952. In
addition to such contributions, the Company also recognizes 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, 2016, the fair value of the assets of the fund and the
accumulated members'' corpus is Rs, 9743.90 crores and Rs, 9126.96 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 8.80%. The actuarial assumptions include discount
rate of 7.75% and an average expected future period of 8 years.
The Company recognized Rs, 658.04 crores (March 31, 2015: Rs, 571.65
crores) for provident fund contributions and Rs, 193.02 crores (March 31,
2015: Rs, 163.47 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, 335.42 crores (March 31, 2015: Rs, 267.63
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 recognized in the Company''s financial statements as at March
The estimate of future salary increase considered in actuarial
valuation takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand factors in the employment
The expected return on plan assets is determined considering several
applicable factors mainly the composition of the plan assets held,
assessed risk of asset management, historical results of the return on
plan assets and the Company''s policy for plan asset management.
The expected contribution is based on the same assumptions used to
measure the Company''s gratuity obligations as at March 31, 2016. The
Company is expected to contribute Rs, 102.51 crores for the year ended
March 31, 2017.
4.) SEGMENT REPORTING
The Company has identified business segments (industry practice) as its
primary segment and geographic segments as its secondary segment.
Business segments comprise banking, finance and insurance services,
manufacturing, retail and consumer packaged goods, telecom, media and
entertainment and others such as energy, resources and utilities,
Hi-tech, life science and healthcare, s-Governance, travel,
transportation and hospitality, products, etc.
Revenue and expenses directly attributable to segments are reported
under each reportable segment. Expenses which are not directly
identifiable to specific segment have been allocated on the basis of
associated revenue of the segment and manpower efforts. All other
expenses which are not attributable or allocable to segments have been
disclosed as unallowable 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 unallowable. 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.
5.) RELATED PARTY DISCLOSURES
A) Related parties and their relationship I) Holding Company
Tata Sons Limited
II)(A) Subsidiaries (Direct holding) II)(B) Subsidiaries (Indirect
1. CMC Limited (amalgamated with Tata Consultancy Services w.e.f.
2. CMC Americas Inc. i. CMC eBiz Inc.
3. Tata Consultancy Services Sverige AB
4. Tata Consultancy Services Asia Pacific Pte Ltd. i. Tata
Consultancy Services Malaysia Sdn Bhd
ii. Tata Consultancy Services (China) Co., Ltd.
iii. PT Tata Consultancy Services Indonesia
iv. Tata Consultancy Services (Thailand) Limited
v. Tata Consultancy Services (Philippines) Inc.
vi. Nippon TCS Solution Center Limited
(merged with Tata Consultancy Services Japan Ltd. w.e.f 01.07.2014)
vii. Tata Consultancy Services Japan Ltd.
(merged with IT Frontier Corporation (a susbsidiary of Mitsubishi
Corporation) w.e.f 01.07.2014)
viii. 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)
5. 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.
x. Technology Outsourcing S.A.C. (new entity acquired on 30.10.2015)
6. 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.
6.) RELATED PARTY DISCLOSURES (contd.)
A) Related parties and their relationship (contd.)
II)(A) Subsidiaries (Direct holding) II)(B) Subsidiaries (Indirect
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.
xvii. Tata Consultancy Services Saudi Arabia (New entity incorporated
7.) 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 Solution (Beijing) Co. Ltd.
8. APTOnline Limited (formerly APOnline Limited)
9. Tata America International Corporation i. MS CJV Investments
10. Tata Consultancy Services Belgium S.A.
11. Tata Consultancy Services Deutschland GmbH
12. 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)
13. Tata Consultancy Services Canada Inc.
14. Diligenta Limited i. Diligenta 2 Limited
15. C-Edge Technologies Limited
16. MP Online Limited
17. Tata Consultancy Services Morocco SARL AU (liquidated w.e.f.
30.05.2014 vide court order dated 07.08.2014)
18. Tata Consultancy Services (Africa)(PTY) Ltd. i. Tata Consultancy
Services (South Africa) (PTY) Ltd.
19. TCS e-Serve International Limited i. TCS e-Serve America, Inc.
20. MahaOnline Limited
21. Tata Consultancy Services Qatar S. S. C.
22. Computational Research Laboratories Inc. (liquidated w.e.f.
23. 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
- Tata AIG General Insurance Company Limited
- Tata AIA Life Insurance Company Limited
- Tata Investment Corporation Limited
8.) RELATED PARTY DISCLOSURES (contd.)
A) Related parties and their relationship (contd.)
- Tata Limited
- Tata Advanced Systems 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 (merged with Tata Business Support Services
Limited w.e.f. 01.07.2015)
- Tata Industries Limited
- Tata International Limited
- Drive India Enterprise Solutions Limited (ceased w.e.f. 01.09.2015)
- Nova Integrated System Limited
- Tata Sikorsky Aerospace Limited (formerly Tara Aerospace Systems
- TBSS Healthcare TPA Services Limited
- Tata Capital Housing Finance Limited
- TC Travel And Services Limited
- Tata Securities Limited
- Tata Capital Forex Limited
- Tata Capital Financial Services Limited
- Tata Cleantech Capital Limited
- Tata Value Homes Limited (formerly Smart Value Homes Limited)
- Tata Interactive Systems GmbH
- Tata Interactive Systems AG
- Tata Unistore Limited (named changed w.e.f. 13.05.2015) (formerly
Tata Industrial Services Limited)
- Tata Africa Holdings (SA) (Proprietary) Limited
- TATA Africa Holdings (Kenya) Limited
- TATA Africa Holdings (Tanzania) Limited
- Tata Africa Services (Nigeria) Limited
- Tata Uganda Limited
- Tata Zambia Limited
- Calsea Footwear Private Limited
- Tata SIA Airlines Limited
- Taj Air Limited
- TRIL Infopark Limited
- Tata Autocomp Systems Limited
- Tata Lockheed Martin Aerostructures Limited (formerly Tata
- Panatone Finvest Limited
IV) Key Management Personnel
- Mr. N. Chandrasekaran, Chief Executive Officer and Managing Director
- Mr. Rajesh Gopinathan, Chief Financial Officer
- Ms. Aarthi Subramanian, Executive Director (w.e.f. 12.03.2015)
Rent expense of Rs. 439.19 crores (Previous year: Rs. 550.93 crores) in
respect of obligations under non-cancellable operating leases and Rs.
619.46 crores (Previous year: Rs. 521.77 crores) in respect of
cancellable operating leases have been charged to the statement of
profit and loss.
a) In October 2014, Epic Systems Corporation (''Epic'') filed a legal
claim against the Company in the Court of Western District Madison,
Wisconsin for alleged unauthorized download and misuse of Epic''s
confidential information and trade secrets. In April 2016, the Company
received an unfavorable jury verdict awarding damages totaling Rs,
6227.03 crores (US 0 million) to Epic which the trial judge has
indicated his intent to reduce. On the basis of legal opinion and legal
precedence, the Company expects to defend itself against the claim and
believes that the claim will not sustain.
b) In respect of income tax demands of Rs, 318.20 crores (March 31, 2015:
Rs, 318.20 crores), not included above, the Company is entitled to an
indemnification from the seller of TCS e-Serve Limited.
c) In respect of indirect tax demands of Rs, 8.53 crores (March 31, 2015:
Rs, 8.53 crores), not included above, the Company is entitled to an
indemnification from the seller of TCS e-Serve Limited.
d) The Company has provided guarantees aggregating Rs, 2716.40 crores
(GBP 285.08 million) (March 31, 2015: Rs, 2694.55 crores) (GBP 291.30
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.
9.) CAPITAL AND OTHER COMMITMENTS
a) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs, 1446.17 crores (March
31, 2015: Rs, 1844.08 crores).
b) The Company has a purchase commitment towards India Innovation Fund
for the uncalled amount of balance Rs, 24,486.94 per unit of 1,000 units
aggregating to Rs, 2.45 crores (March 31, 2015: Rs, 2.96 crores)
10.) DERIVATIVE FINANCIAL INSTRUMENTS
The Company, in accordance with its risk management policies and
procedures, enters into foreign exchange forwards, options and futures
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, 56.77 crores recognized in
Hedging Reserve as at March 31, 2016, is expected to be transferred to
the statement of profit and loss by March 31, 2017.
In addition to the above Cash Flow Hedges, the Company has outstanding
foreign exchange forwards, options and future contracts with notional
amount aggregating Rs, 22143.66 crores (March 31, 2015: Rs, 19949.03
crores) whose fair value showed a gain of Rs, 284.48 crores as at March
31, 2016 (March 31, 2015: gain of Rs, 159.65 crores). Exchange gain of Rs,
180.55 crores (March 31, 2015: Exchange gain of Rs, 1363.87 crores) on
foreign exchange forwards, options and future contracts for the year
ended March 31, 2016 have been recognized in the statement of profit
As at March 31, 2016, the Company has net foreign currency exposures
that are not hedged by derivative instruments or otherwise amounting to
Rs, 2119.01 crores (March 31, 2015: Rs, 2884.79 crores)
Consumption figures shown above are after adjusting excess and
shortages ascertained on physical count, unserviceable items, etc.
11.) REMITTANCE IN FOREIGN CURRENCIES FOR DIVIDENDS
The Company has remitted Rs, Nil (March 31, 2015: Rs, Nil ) in foreign
currencies on account of dividends during the year and does not have
information as to the extent to which remittance, if any, in foreign
currencies on account of dividends have been made by / on behalf of
non-resident shareholders. The particulars of dividends declared and
paid to non-resident shareholders for the year ended March 31, 2015 and
interim dividends for the year ended March 31, 2016, are as under:
12.) Research and development expenditure aggregating Rs, 232.22 crores
(Previous year: Rs,192.62 crores), including capital expenditure was
incurred during the year.
13.) During the year, the Company has incurred an amount of Rs, 294.23
crores (Previous year: Rs,218.42 crores) towards Corporate Social
14.) The Company 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.
15.) During the year ended March 31, 2015, an amount of Rs, 2326.42 crores
has been recognized in the statement of profit and loss and accrued
under Trade Payables in the balance sheet in respect of one-time bonus
to eligible employees.
16.) Previous years'' figures have been recast / restated.