(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).
(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.
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, 2025,
MCA has notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f. April 1, 2024. The Company has reviewed the
new pronouncements and based on its evaluation has
determined that it does not have any significant impact in
its financial statements.
6) Financial assets, financial liabilities and equity
instruments
Financial assets and liabilities are recognised when the
Company becomes a party to the contractual provisions of
the instrument. Financial assets and liabilities are initially
measured at fair value, except for trade receivables which
are initially measured at transaction price. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through
profit or loss) are added to or deducted from the fair
value measured on initial recognition of financial asset or
financial liability.
The Company derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all
the risks and rewards of ownership of the asset to another
entity. The Company derecognises financial liabilities when,
and only when, the Company's obligations are discharged,
cancelled or have expired.
Cash and cash equivalents
The Company considers all highly liquid investments, which
are readily convertible into known amounts of cash that are
subject to an insignificant risk of change in value, to be cash
equivalents. Cash and cash equivalents consist of balances
with banks and 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 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.
Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at March 31, 2025 and 2024, 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 NIL and '940 crore as at March 31, 2025 and
2024 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.
(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 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, 2025 and 2024, the notional amount of outstanding contracts aggregated to
'51,859 crore and '49,180 crore, respectively, and the respective fair value of these contracts have a net gain of '211 crore and net
loss of '42 crore.
Exchange loss of '316 crore and gain of '30 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, 2025 and 2024, respectively.
Net foreign exchange gain / (loss) include loss of '41 crore and '102 crore transferred from cash flow hedging reserve for the years
ended March 31, 2025 and 2024, respectively.
Net loss on derivative instruments of '15 crore recognised in cash flow hedging reserve as at March 31, 2025, is expected to be
transferred to the statement of profit and loss by March 31, 2026. The maximum period over which the exposure to cash flow
variability has been hedged is through calendar year 2025.
(m) Financial risk management
The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity and interest rate risks, which
may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks
associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the
risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects
on the financial performance of the Company.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest
rates, credit, liquidity and other market changes. The Company's exposure to market risk is primarily on account of foreign currency
exchange rate risk.
• Foreign currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other
comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities
are denominated in a currency other than the functional currency of the Company. Considering the countries and economic
environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in
those countries.
The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. Further, any
movement in the functional currency of the various operations of the Company against major foreign currencies may impact the
Company's revenue in international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It
hedges a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous
parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the Company.
The following analysis has been worked out based on the net exposures of the Company as of the date of balance sheet which
could affect the 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).
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.
• 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. Loans include Inter-corporate deposits of
'36 crore placed with two subsidiaries as at March 31, 2025 and NIL as at March 31, 2024, respectively. Bank deposits include
an amount of '3,692 crore held with two banks and '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, 2025 and 2024, respectively. None of
the other financial instruments of the Company result in material concentration of credit risk.
• Exposure to credit risk
The carrying amount of financial assets and contract assets represents the maximum credit exposure. The maximum
exposure to credit risk was '96,535 crore and '90,407 crore as at March 31, 2025 and 2024, 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. As at March 31, 2025, a single customer held more than 10% of the
outstanding of trade receivables and contract assets at 10.28%. As at March 31, 2024, no single customer held more than
10% of outstanding of trade receivables and contract assets.
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.
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.
Interest on lease liabilities is '556 crore and '438 crore for the years ended March 31, 2025 and 2024, respectively.
The Company incurred '199 crore and '221 crore for the years ended March 31, 2025 and 2024, respectively, towards expenses
relating to short-term leases and leases of low-value assets.
The total cash outflow for leases is '1,961 crore and '1,737 crore for the years ended March 31, 2025 and 2024, 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 '943 crore and '815 crore as at March 31, 2025 and 2024, 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
The Company recognises the cost of an item of property, plant and equipment as an asset if, and only if it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can measured reliably.
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 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.
The carrying amount of an item of property, plant and equipment shall be derecognised on disposal or when no future economic benefits
are expected from its use or disposal.
(b) Intangible assets
Intangible assets purchased are measured at cost as at the date of acquisition, as applicable, less accumulated amortisation and
accumulated impairment, if any.
Intangible assets consist of rights under licensing agreement and software licences which are amortised over licence period which
equates the economic useful life ranging between 1-5 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.
10) Revenue recognition
The Company earns revenue primarily from providing IT services, consulting and business solutions. The Company offers a
consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions.
Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the
consideration which the Company expects to receive in exchange for those products or services.
• Revenue from time and material and job contracts is recognised on output basis measured by units delivered, efforts expended,
number of transactions processed, etc.
• Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide
services is recognised based on time elapsed mode and revenue is straight-lined over the period of performance.
• In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method ('POC method') of
accounting with contract costs incurred determining the degree of completion of the performance obligation. The contract
costs used in computing the revenues include cost of fulfilling warranty obligations.
• Revenue from the sale of distinct internally developed software and manufactured systems and third party software is
recognised upfront at the point in time when the system / software is delivered to the customer. In cases where implementation
and / or customisation services rendered significantly modifies or customises the software, these services and software are
accounted for as a single performance obligation and revenue is recognised over time on a POC method.
• Revenue from the sale of distinct third party hardware is recognised at the point in time when control is transferred to the
customer.
• The solutions offered by the Company may include supply of third-party equipment or software. In such cases, revenue for
supply of such third party products are recorded at gross or net basis depending on whether the Company is acting as the
principal or as an agent of the customer. The Company recognises revenue in the gross amount of consideration when it is
acting as a principal and at net amount of consideration when it is acting as an agent.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits,
performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes
taxes collected from customers.
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.
Geographical revenue is allocated based on the location of the customers.
• (1) includes revenue in the United States of America of '1,11,607 crore and '1,11,862 crore for the years ended
March 31, 2025 and 2024, respectively.
• (2) includes revenue in the United Kingdom of '38,104 crore and '35,625 crore for the years ended March 31, 2025 and 2024,
respectively.
Information about major customers
No single customer represents 10% or more of the Company's total revenue during the years ended March 31, 2025 and 2024.
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.
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 obligations at the balance sheet date
using the Projected Unit Credit Method.
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.
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 the 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.
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 '291 crore and '286 crore for the years ended March 31, 2025 and 2024, respectively, towards Employees'
Superannuation Fund.
Foreign defined contribution plan
The Company expensed '1,458 crore and '1,316 crore for the years ended March 31, 2025 and 2024, respectively, towards foreign
defined contribution plans.
13) Cost recognition
Costs and expenses are recognised when incurred and have been classified according to their nature.
The costs of the Company are broadly categorised in employee benefit expenses, cost of equipment and software licences,
depreciation and amortisation expense and other expenses. Other expenses mainly include fees to external consultants, facility
expenses, travel expenses, communication expenses, bad debts and advances written off, allowance for 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.
15) Income taxes
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current
and deferred taxes are recognised in statement of profit and loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive
income or directly in equity, respectively.
Current income taxes
The current income tax expense includes income taxes payable by the Company in India and in its branches in overseas where it
operates.
The Company has recognised income tax expenses applying the provisions under section 115BAA of the Income-tax Act, 1961.
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.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations
are subject to interpretation and establishes provisions where appropriate.
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.
The Organisation for Economic Co-operation and Development (OECD) has published the model rules for global minimum tax (Pillar
Two model rules). Pillar Two legislation has been enacted, or substantively enacted, in certain jurisdictions where the Company
operates. The Company is within the scope of the OECD Pillar Two model rules and has evaluated the potential exposure to global
minimum tax. The Company does not expect any material financial impact for the current period. The evaluation of the potential
exposure is based on the most recent country-by-country reporting, and financial statements for the constituent entities in the
Company.
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.
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.
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 '1,012 crore and '1,794 crore as at March 31, 2025 and 2024, 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, 2025 and 2024, 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.
18) Segment information
The Company publishes the standalone financial statements of the Company along with the consolidated financial statements. In
accordance with Ind AS 108- Operating Segments, the Company has disclosed the segment information in the consolidated financial
statements.
19) Commitments and contingencies
Capital commitments
The Company has contractually committed (net of advances) '2,438 crore and '1,939 crore as at March 31, 2025 and 2024,
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 '626 crore and '516 crore as at March 31, 2025 and 2024, 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 '120 crore and '126 crore as at March 31, 2025 and 2024, respectively, against the Company have not
been acknowledged as debts.
> In April 2019, Computer Sciences Corporation (referred to as CSC) filed a legal claim against the Company in the Court
of Northern District of Texas and Dallas Division (trial court) alleging misappropriation of trade secrets and other CSC's
confidential information and sought preliminary and permanent injunctive relief, and unspecified monetary damages and
disgorgement of profits.
A trial before an advisory jury was held and on November 17, 2023, the jury returned an advisory verdict in favour of
CSC, finding that the Company misappropriated CSC's trade secrets and recommended compensation of US $70 million
(equivalent to '598 crore) and a further punitive damage of US $140 million (equivalent to '1,196 crore) to be paid by the
Company to CSC. Subsequently, the parties filed their respective written submissions in the matter. On June 13, 2024, the
trial court passed a judgement as follows:
1. The Court ordered that the Company is liable to CSC for US $56 million (equivalent to '478 crore) in compensatory
damages and US $112 million (equivalent to '957 crore) in exemplary damages.
2. The Court also assessed that the Company is liable for US $26 million (equivalent to '222 crore) in prejudgment
interest through June 13, 2024.
3. The Court also passed certain injunction and other reliefs against the Company.
Pursuant to US Court procedures, a Letter of Credit has been made available to CSC for '2,136 crore (US $250 million) as
financial security in order to stay execution of the judgement pending appeal proceedings and conclusion.
> 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 unfavourable judgment from
the District Court and Appeals Court which awarded US $140 million as compensatory damages and US $140 million
as punitive damages, Epic invoked payment of US $140 million out of US $440 million Letter of Credit provided as
security, towards compensatory damages in April 2022. 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 US $140 million was paid on
December 1, 2023. The Company provided the balance punitive damages amount of US $115 million (equivalent to
'958 crore) 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.
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.
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.
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 '12 crore and '15 crore as at March 31, 2025 and 2024,
respectively.
23) The Board of Directors approved post-employment benefits, payable to the retiring COO and Executive Director, which have been
actuarially valued. Accordingly, the Company has recorded an expense of '22 crore during the year ended March 31, 2025.
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.
26) Dividends
Dividends paid during the year ended March 31, 2025 include an amount of '28.00 per equity share towards final dividend for the
year ended March 31, 2024 and an amount of '96.00 per equity share towards interim dividends (including special dividend) for the
year ended March 31, 2025. 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 declared by the Company are based on the profit available for distribution. On April 10, 2025, the Board of Directors
of the Company have proposed a final dividend of '30.00 per equity share in respect of the year ended March 31, 2025 subject
to the approval of shareholders at the Annual General Meeting, and if approved, would result in cash outflow of approximately
'10,854 crore.
NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS
As per our report of even date attached For and on behalf of the Board
For B S R & Co. LLP K Krithivasan Aarthi Subramanian
Chartered^ Accountants CEO and Managing Director Director
Firm s registration no: 101248^7/^7-100022 DIN: 10106739 DIN: 07121802
Aniruddha Godbole
Partner Samir Seksaria Yashaswin Sheth
Membership No: 105149 CFO Company Secretary
Mumbai, April 10, 2025 Mumbai, April 10, 2025
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