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Tata Consultancy Services Ltd.

BSE: 532540 Sector: IT
NSE: TCS ISIN Code: INE467B01029
BSE 00:00 | 24 Apr Tata Consultancy Services Ltd
NSE 05:30 | 01 Jan Tata Consultancy Services Ltd
OPEN 1840.10
VOLUME 93384
52-Week high 2296.00
52-Week low 1504.40
P/E 20.54
Mkt Cap.(Rs cr) 682,299
Buy Price 1818.30
Buy Qty 26.00
Sell Price 1825.00
Sell Qty 138.00
OPEN 1840.10
CLOSE 1876.90
VOLUME 93384
52-Week high 2296.00
52-Week low 1504.40
P/E 20.54
Mkt Cap.(Rs cr) 682,299
Buy Price 1818.30
Buy Qty 26.00
Sell Price 1825.00
Sell Qty 138.00

Tata Consultancy Services Ltd. (TCS) - Director Report

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Company director report

To the Members

The Directors present the Annual Report of Tata Consultancy Services Limited (theCompany or TCS) along with the audited financial statements for the financial year endedMarch 31 2019. The consolidated performance of the Company and its subsidiaries has beenreferred to wherever required.

1. Financial results

(' crore)



Financial Year 2018-19 (FY 2019) Financial Year 2017-18 (FY 2018) Financial Year 2018-19 (FY 2019) Financial Year 2017-18 (FY 2018)
Revenue 123170 97356 146463 123104
Other income 7627 5803 4311 3642
Total income 130797 103159 150774 126746
Operating expenditure 88206 69551 106957 90588
Depreciation and amortization expense 1716 1647 2056 2014
Total expenses 89922 71198 109013 92602
Profit before finance cost and tax 40875 31961 41761 34144
Finance costs 170 30 198 52
Profit before tax (PBT) 40705 31931 41563 34092
Tax expense 10640 6690 10001 8212
Profit for the year 30065 25241 31562 25880
Attributable to:
Shareholders of the Company 30065 25241 31472 25826
Non-controlling interests NA NA 90 54
Opening balance of retained earnings 74080 65965 79755 71071
Profit for the year 30065 25241 31472 25826
Other comprehensive income / (losses) (14) 86 (41) 102
Total comprehensive income 30051 25327 31431 25928
Dividend (including tax on dividend) (11424) (10726) (11424) (10726)
Buy-back of equity shares (16000) (4963) (16000) (4963)
Expenses for buy-back of equity shares (45) (42) (45) (42)
Issue of bonus shares (86) - (86) -
Realized loss on equity shares carried at fair value through OCI (1) - (1) -
Transfer to Special Economic Zone re-investment reserve (2750) (1579) (2750) (1579)
Transfer from Special Economic Zone re-investment reserve 3334 98 3334 98
Transfer to reserves - - 1306 (32)
Closing balance of retained earnings 77159 74080 85520 79755

2. Issue of Bonus Shares

The Company allotted 1914287591 equity shares as fully paid-up bonus shares in theratio of 1:1 (one equity share for every one existing equity share held on the recorddate) to its shareholders on June 3 2018 pursuant to a resolution passed by theshareholders on May 26 2018 by postal ballot.

3. Buy-back of Equity Shares

In line with the practice of returning 80 to 100 percent free cash flow toshareholders the Company completed its second buy-back of 76190476 equity shares at aprice of '2100 per equity share for an aggregate consideration of '16000 crore. Theoffer size of the buy-back was 21.54 percent of the aggregate paid-up equity share capitaland free reserves of the Company and represented 1.99 percent of the total issued andpaid-up equity share capital of the Company. The buy-back process was completed and theshares were extinguished on September 26 2018. The Company's first buy-back was completedin FY 2018.

4. Dividend

Based on the Company's performance the Directors have recommended a final dividend of'18 per equity share for FY 2019 taking the total dividend to '30 per share. The totaldividend paid for FY 2018 was '25 per share (adjusted for bonus issued in FY 2019). Thefinal dividend on equity shares if approved by the members would involve a cash outflowof '8142 crore including dividend tax. The total dividend on equity shares includingdividend tax for FY 2019 would aggregate '13148 crore resulting in a payout of 43.7percent of the unconsolidated profits of the Company.

5. Transfer to reserves

The closing balance of the retained earnings of the Company for FY 2019 after allappropriation and adjustments was '77159 crore.

6. Company's performance

On a consolidated basis the revenue for FY 2019 was '146463 crore higher by 19.0percent over the previous year's revenue of '123104 crore. The profit after tax (PAT)attributable to shareholders and non-controlling interests for FY 2019 and FY 2018 was'31562 crore and '25880 crore respectively. The PAT attributable to shareholders for FY2019 was '31472 crore registering a growth of 21.9 percent over the PAT of '25826 crorefor FY 2018.

On an unconsolidated basis the revenue for FY 2019 was '123170 crore higher by 26.5percent over the previous year's revenue of '97356 crore in FY 2018. The PAT attributableto shareholders for FY 2019 was '30065 crore registering a growth of 19.1 percent overthe PAT of '25241 crore for FY 2018.

7. Human resource development

Your Company continued to focus on attracting new talent while investing in organictalent development to help employees acquire new skills explore new roles and realizetheir potential.

The reimagined approach to learning and development has helped the Company train over311000 employees on digital technologies and over 348000 employees on Agilemethodologies.

The Company had a net addition of 29287 employees globally taking its total employeecount to 424285. Women make up 35.9 percent of the workforce making your Company one ofthe largest employers of women in the world. A strong localization focus resulted inon-boarding of an all-time high number of local employees across all major markets in FY2019. The diverse workforce now has 147 nationalities.

Progressive HR policies and ongoing employee engagement initiatives guided by ourOneTCS culture have made your Company an industry benchmark for talent retention.Attrition in FY 2019 was 11.3 percent for IT Services. The Company's internal employeesatisfaction survey PULSE showed the highest employee satisfaction and engagement scoresin the last 10 years.

This year the Company democratized campus hiring with an all India TCS NationalQualifier Test administered using the TCS iON Assessment Platform. This was open to anystudent across India who aspired to join TCS. The test saw participation by 280000students from 1800 colleges.

8. Quality initiatives

The Company continues to sustain its commitment to the highest levels of qualitysuperior service management robust information security practices and mature businesscontinuity management. In FY 2019 the Company successfully completed the annual ISOsurveillance audit and retained the enterprise-wide ISO certification for ISO 9001:2015ISO 20000:2011 ISO 27001:2013 and ISO 22301:2012 standards. The Company successfullycompleted the compliance

check for ISO 27017:2015 / 27018:2014 (Security controls for cloud services) standards.The Company continues to maintain the industry specific quality certifications - AS 9100(Aerospace Industry) ISO 13485 (Medical Devices) and TL 9000 (Telecom Industry). TheCompany successfully completed the enterprise-wide surveillance assessment for ISO30105:2016 (ITES/BPS Life cycle process requirements for Service Providers)enterprise-wide annual SSAE 18 (Statement on Standards for Attestation Engagements) andISAE 3402 - SOC 1 and SOC 2 assessment for Business Process Services.

The Company successfully completed Maturity Level 3 of the Automotive SPICE V3.1(Automotive Software Process Improvement and Capability Determination) assessment forautomotive domain projects for Engineering Services.

TCS' integrated Quality Management System (iQMSTM) continues to enableoutstanding value and experience to our customers. iQMS™ is continually enhanced foremerging service offerings new delivery methodologies industry best practices and latesttechnologies. iQMSTM has been updated to conform to the General Data ProtectionRegulation (GDPR) requirements.

Our customer-centricity rigor in operations and focus on delivery excellence haveresulted in consistent improvements in customer satisfaction levels in the periodicsurveys conducted by the Company. This is validated by top rankings in third-party surveysas well.

9. Subsidiary companies

The Company has 50 subsidiaries as on March 31 2019. There are no associates or jointventure companies within the meaning of Section 2(6) of the Companies Act 2013("Act"). There has been no material change in the nature of the business of thesubsidiaries.

On October 31 2018 the Company acquired 100% stake in W12 Studios Limited an UKbased company. W12 Studios brings with it an award-winning digital design studio based inLondon.

Further CMC eBiz Inc. a subsidiary of CMC Americas Inc. a US based subsidiary ofthe Company was voluntarily dissolved with effect from June 19 2018. There were noemployees or business operations in the dissolved subsidiary.

Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company.

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of the Company

10. Directors' responsibility statement

Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirm that:

i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during FY 2019.

11. Directors and key managerial personnel

Hanne Sorensen and Keki Mistry were appointed as additional and independent directorswith effect from December 18 2018. Don Callahan was appointed as additional andindependent director with effect from January 10 2019. A resolution seeking shareholders'approval for their appointment forms a part of the Notice.

N Ganapathy Subramaniam retires by rotation and being eligible offers himself forre-appointment. A resolution seeking shareholders' approval for his re-appointment formspart of the Notice.

O P Bhatt was appointed as an independent director at the nineteenth Annual GeneralMeeting (AGM) held on June 27 2014 for a period of five years. Based on therecommendation of the Nomination and Remuneration Committee his re-appointment for asecond term of five years is proposed at the ensuing AGM for the approval of the Membersby way of special resolution.

During the year V Thyagarajan relinquished the position of independent director witheffect from July 10 2018 as part of the Board succession planning. Prof Clayton MChristensen relinquished the position of independent director with effect from September28 2018 due to personal reasons. Aman Mehta and Dr Ron Sommer were appointed asindependent directors at the nineteenth AGM of the Company held on June 27 2014 for theperiod of five years and are holding office till June 26 2019. The Board places on recordits appreciation for their invaluable contribution and guidance.

Pursuant to the provisions of Section 149 of the Act the independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). There has been nochange in the circumstances affecting their status as independent directors of theCompany.

During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/Committee of the Company.

Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2019 are: Rajesh Gopinathan Chief Executive Officer andManaging Director N Ganapathy Subramaniam Chief Operating Officer and ExecutiveDirector Ramakrishnan V Chief Financial Officer and Rajendra Moholkar CompanySecretary.

12. Number of meetings of the Board

Six meetings of the Board were held during the year under review. For details ofmeetings of the Board please refer to the Corporate Governance Report which is a part ofthis report.

13. Board evaluation

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and SEBIListing Regulations.

The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.

The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on January 5 2017

In a separate meeting of independent directors performance of non-independentdirectors the board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and non executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the independent directors and meetingof Nomination and Remuneration Committee the performance of the board its committeesand individual directors was also discussed. Performance evaluation of independentdirectors was done by the entire board excluding the independent director beingevaluated.

14. Policy on directors' appointment and remuneration and other details

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and is also available on .

15. Internal financial control systems and their adequacy

The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.

16. Audit committee

The details pertaining to the composition of the audit committee are included in theCorporate Governance Report which is a part of this report.

17. Auditors

At the twenty-second AGM held on June 16 2017 the Members approved appointment of B SR & Co. LLP Chartered Accountants (Firm Registration No. 101248W/W-100022) asStatutory Auditors of the Company to hold office for a period of five years from theconclusion of that AGM till the conclusion of the twenty-seventh AGM subject toratification of their appointment by Members at every AGM if so required under the Act.The requirement to place the matter relating to appointment of auditors for ratificationby Members at every AGM has been done away by the Companies (Amendment) Act 2017 witheffect from May 7 2018. Accordingly no resolution is being proposed for ratification ofappointment of statutory auditors at the ensuing AGM and a note in respect of same hasbeen included in the Notice for this AGM.

18. Auditor's report and secretarial audit report

The statutory auditor's report and the secretarial audit report do not contain anyqualifications reservations or adverse remarks or disclaimer. Secretarial audit reportis attached to this report.

19. Risk management

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee has additional oversight in the area of financial risksand controls. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the Management Discussionand Analysis which forms part of this report.

20. Particulars of loans guarantees and investments

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

21. Transactions with related parties

None of the transactions with related parties falls under the scope of Section 188(1)of the Act. The information on transactions with related parties pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are givenin Annexure I in Form No. AOC-2 and the same forms part of this report.

22. Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year underreview are set out in Annexure II of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which is a part of thisreport. The CSR policy is available on .

23. Extract of annual return

As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for FY 2019 is given in Annexure III in the prescribed FormNo. MGT-9 which is a part of this report. The same is available on .

24. Particulars of employees

The information required under Section 197 of the Act read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company and percentage increase in remuneration of each Director ChiefExecutive Officer Chief Financial Officer and Company Secretary in the financial year:

Name Ratio to median remuneration % increase in remuneration in the financial year
Non-executive directors
N Chandrasekaran@ - -
Aman Mehta 51.55 5.00
V Thyagarajan* A A
Prof Clayton M Christensen** A A
Dr Ron Sommer 36.00 4.76
O P Bhatt 35.18 7.50
Aarthi Subramanian@@ - -
Dr Pradeep Kumar Khosla 24.55 AA
Hanne Sorensen***


Keki Mistry***


Don Callahan****


Executive directors
Rajesh Gopinathan 262.30 28.31
N Ganapathy Subramaniam 190.01 24.88
Chief Financial Officer
Ramakrishnan V - 22.58
Company Secretary
Rajendra Moholkar - 18.23

@ As a policy N Chandrasekaran Chairman has abstained from receiving commission fromthe Company and hence not stated.

@@ In line with the internal guidelines of the Company no payment is made towardscommission to the Non-Executive Directors of the Company who are in full time employmentwith any other Tata company and hence not stated.

* Relinquished the position of Independent Director w.e.f. July 10 2018.

** Relinquished the position of Independent Director w.e.f. September 28 2018.

*** Appointed as an Additional and Independent Director w.e.f. December 18 2018.

**** Appointed as an Additional and Independent Director w.e.f. January 10 2019.

 A Since the remuneration is only for part of the year the ratio oftheir remuneration to median remuneration

and percentage increase in remuneration is not comparable and hence not stated.

aa Remuneration received in FY 2019 is not comparable with remuneration received in FY2018 and hence not stated.

b. The percentage increase in the median remuneration of employees in the financialyear: 3.70 percent

c. The number of permanent employees on the rolls of Company: 424285

d. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was 6 percent in India. However during the course of theyear the total increase is approximately 7.2 percent after accounting for promotions andother event based compensation revisions. Employees outside India received a wage increasevarying from 2 percent to 5 percent. The increase in remuneration is in line with themarket trends in the respective countries.

Increase in the managerial remuneration for the year was 14.66 percent.

e. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of theCompany.

f. The statement containing names of top ten employees in terms of remuneration drawnand the particulars of employees as required under Section 197(12) of the Act read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in a separate annexure forming part of this report. Further thereport and the accounts are being sent to the Members excluding the aforesaid annexure. Interms of Section 136 of the Act the said annexure is open for inspection at theRegistered Office of the Company. Any Member interested in obtaining a copy of the samemay write to the Company Secretary.

25. Disclosure requirements

As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the Management Discussion and Analysis are attached which formspart of this report.

As per Regulation 34 of the SEBI Listing Regulations a Business Responsibility Reportis attached and is a part of this Annual Report.

As per Regulation 43A of the SEBI Listing Regulations the Dividend Distribution Policyis disclosed in the Corporate Governance Report and is uploaded on the Company's website

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

26. Deposits from public

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.

27. Conservation of energy technology absorption foreign exchange earnings and outgoConservation of energy:

Energy continues to be a material aspect from climate change as well as operationalperspective. TCS' commitment to decouple energy and carbon footprint from business growthreflects in the reduction in specific consumption that TCS has delivered year-on-year. FY2019 saw addition of more green buildings into office infrastructure addition of roof topsolar system in offices optimization of IT power usage as well as higher operationalefficiency augmented through machine learning based cognitive algorithms on TCS IoTplatform.

The commitment towards energy was reinforced as TCS went in for Energy ManagementSystem certification as per ISO 50001:2011 for its campus at Pune (Sahayadri Park) and thesame was recommended for certification. TCS is the first IT services company in India tohave achieved this certification. The management system gives the tool to look at energyefficiency in a more systematic manner and helps drive continual improvement.

The TCS IoT platform has been further enhanced to acquire Indoor Air Quality (IAQ) data- indoor CO2 levels temperature and relative humidity. This helps ensure thatthe IAQ parameters inside TCS facilities are maintained within acceptable limits to ensurea healthy and conducive work environment for the associates. Renewable energy used in theCompany's offices increased to 10.1 percent from 8.45 percent in the last year. During theyear under review Company added 1.7 MW of rooftop solar system across four locationswith plans to add another 3 MW in the coming year. On data center power managementCompany successfully reduced the Power Utilization Efficiency (PUE) of the 23 data centersto 1.67 from 1.71 in FY 2019. Data Center/server room consolidation was a key enablertowards achieving this efficiency.

These initiatives collectively resulted in the Company's specific energy consumptionreducing by ~6.5 percent and specific carbon footprint reducing by ~8.1 percent ascompared to FY 2018 on a per FTE (full time equivalent) basis.

Technology absorption adaption and innovation:

The Company continues to adopt and use the latest technologies to improve theproductivity and quality of its services and products. The Company's operations do notrequire significant import of technology.

Research & Development (R&D): Specific areas in which R&D was carried outby the Company

TCS Research and Innovation continued its alignment to the Company's business strategyand customer expectations manifest in the Business 4.0 framework. Agility in processes andenablers for a Machine First Delivery Model have been in focus.

TCS has continued to invest in foundational research in Artificial Intelligence (AI)Deep Learning and high performance Computing Systems to further Machine First DeliveryModels. Research and innovation (R&I) programs created business impact across domains.TCS' Knowledge Extraction Framework was deployed for a large retail customer in the MiddleEast. The Compliance Automation was piloted for a leading European Bank. The PhysicalSciences team is working closely with a mining company providing deep insights intomolecular modeling. The Data and Decision Sciences team provided an award winning solutionfor a CPG supply chain customer using reinforcement learning. The drone program from theincubation team had many successful client engagements. Ignio™ a cognitive platformwas significantly enhanced in FY 2019. Using its Machine-First™ approach theplatform enables customers transform underlying technology operations and enhanceproductivity. The MasterCraft Suite sees continuing investment and has 100+ activecustomers. Jile 2.0 the agile planning delivery and transformation offering waslaunched. R&I was a clear differentiator to many business opportunities in FY 2019.

R&I also provided enablers to further digitize and automate TCS' own processes.R&I provided inputs for the TCS National Qualifier Test which has opened up the TCSentry test to talented youth even in remote parts of India. Season Seven of TCS' CodeVitaContest run on an improved coding platform saw 210000 participants build and submit850000 pieces of code.

Research innovation the contextual knowledge within the units the portfolio ofintellectual property help TCS gain significant market share as well as mind share. Tofurther strengthen delivery of research innovation business and technologytransformations in close collaboration with the customer the Company launched TCSPace™ as an umbrella brand and physical spaces called TCS Pace Port™. Thesehubs will be flexible modular spaces featuring innovation showcases co-innovationnetwork start-up accelerators collaborative Think Spaces Academic Research Spaces andAgile Workspaces designed to ignite collaborative experimentation research and rapidproduct prototyping along with customers partners and academia. The first TCS PacePort™ was launched in Tokyo.

TCS leveraged both the Academic Research Ecosystem and the Emerging Technologyecosystem for collaborative research as part of its Co-Innovation (TCS COIN™)Program. Your Company continues to collaborate significantly with existing global academicpartners and premier Indian institutes. Emerging Technology COIN continued itsinteractions with innovation ecosystems in Americas Europe and Asia.

The Company continued to foster its culture of innovation providing all employees theopportunity to innovate and receive recognition. The TCS Innovista competition attracted3600+ entries across business units. An innovation challenge per week was held to solvecustomer problems with associates participating across the Company.

TCS R&I remained closely connected to customers through events in differentgeographies. The TCS Innovation Forum was held in New York City Mexico City London andEdinburgh attracting 700+ customers partners and technology experts. TCS hosted "TheTCS Slush Experience" a curated pitching session to connect to TCS customers to somebreakthrough technology companies at "Slush" the biggest start-up event inEurope. TCS Innovation Days and workshops were held for customers in various geographies.Pilot and proofs of concept implementations resulted from these connects.

TCS R&I leadership continued to lead National Task Forces in areas like AI and 5G.TCS Researchers presented 200+ papers in premier conferences have written books and bookchapters through the year. The Company released a book of essays titled "ReimaginingResearch" describing several of its key research projects. Over a dozen researcherswon best paper awards. TCS Incubation team won the 2018 NASA Space Apps Challenge.

TCS R&I solutions won a number of awards. At the 13th edition of TATAInnovista (2018) TCS won five awards across categories. TCS Research won the first placefor modeling results in an (Additive Manufacture) AM-Bench 2018 Benchmark Challengeconducted by the National Institute of Standards and Technology (NIST) USA. TCSOptumera™ received the Best Machine Learning/Artificial Intelligence ImplementationAward at Cypher 2018 as well as the

"Best Application of AI in the Enterprise Category" award at The Alconics;Verification by Abstraction and Test Generation emerged winner in the InternationalCompetition on Software Verification 2019 held at TACAS in Prague Czech Republic. TCS'Digital Twin Solution won the IT Innovation - Express IT Award. The TCS digital assistivesolution to improve physiotherapy regimen for children with locomotor disabilities wonseveral awards and was deployed jointly in a TCS client's program at a rehabilitationcenter.

As of March 31 2019 the Company has applied for 4596 patents cumulatively. Till datethe Company has been granted 946 patents.

Future Plan of Action

Business 4.0 and its enabling technologies digital reimagination of industry andsociety and industrialization of software and computing will continue to be the focus ofTCS R&I. Engagement with all its businesses with its Co-Innovation Network and withsociety at large will continue.

Expenditure on R&D

TCS Innovation Labs are located in India and other parts of the world. These R&Dcenters as certified by Department of Scientific & Industrial Research (DSIR)function from Pune Chennai Bengaluru Delhi- NCR Hyderabad Kolkata and Mumbai.

Expenditure incurred in the R&D centers and innovation centers during FY 2019 andFY 2018 are given below:

(' crore)

Expenditure on R&D and innovation



FY 2019 FY 2018 FY 2019 FY 2018
a. Capital 2 - 2 -
b. Recurring 303 295 306 298
c. Total R&D expenditure (a+b) 305 295 308 298
d. Innovation center expenditure 1285 1079 1352 1202
e. Total R&D and innovation expenditure (c+d) 1590 1374 1660 1500
f. R&D and innovation expenditure as a percentage of total turnover 1.3% 1.4% 1.1% 1.2%

Foreign exchange earnings and outgo

Export revenue constituted 93.3 percent of the total unconsolidated revenue in FY 2019(92.2 percent in FY 2018).

(' crore)

Foreign exchange earnings and outgo FY 2019 FY 2018
a. Foreign exchange earnings 119499 92258
b. CIF Value of imports 447 768
c. Expenditure in foreign currency 49336 33014

28. Acknowledgments

The Directors thank the Company's employees customers vendors investors and academicpartners for their continuous support.

The Directors also thank the Government of India Governments of various states inIndia Governments of various countries and concerned Government departments and agenciesfor their co-operation.

The Directors appreciate and value the contribution made by every member of the TCSfamily.

On behalf of the Board of Directors N Chandrasekaran

Mumbai April 12 2019 Chairman

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts or arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under fourth provisothereto:

1. Details of contracts or arrangements or transactions not at arm's length basis: TataConsultancy Services Limited (the Company) has not entered into anycontract/arrangement/transaction with its related parties which is not in ordinary courseof business or at arm's length during FY 2019. The Company has laid down policies andprocesses/ procedures so as to ensure compliance to the subject section in the CompaniesAct 2013 (Act) and the corresponding Rules. In addition the process goes throughinternal and external checking followed by quarterly reporting to the Audit Committee.

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: NotApplicable

(f) Date(s) of approval by the Board: Not Applicable

(g) Amount paid as advances if any: Not Applicable

(h) Date on which the special resolution was passed in general meeting as requiredunder first proviso to Section 188: Not Applicable

2. Details of material contracts or arrangement or transactions at arm's length basis:

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Not Applicable

(e) Date(s) of approval by the Board if any: Not Applicable

(f) Amount paid as advances if any: None

Note: All related party transactions are benchmarked for arm's length approved byAudit Committee and reviewed by Statutory Auditors. The above disclosures on materialtransactions are based on threshold of 10 percent of consolidated turnover and consideringwholly owned subsidiaries are exempt for the purpose of Section 188(1) of the Act.

On behalf of the Board of Directors N Chandrasekaran

Mumbai April 12 2019 Chairman

Annual Report on CSR Activities

A brief outline of the Company's Corporate Social Responsibility (CSR) policyincluding overview of projects or programs proposed to be undertaken and a reference tothe web-link to the CSR policy and projects or programs:

The guiding principle of TCS' CSR programs is "Impact through Empowerment".Empowerment results in enabling people to lead a better life. The Company's focus areasare Education and Skill Development Health and Wellness and Environmental Sustainability.In addition the Company has been supporting the restoration of heritage sites as well asparticipating in relief operations during natural disasters.

The Company's participation focuses on operations where it can contribute meaningfullyeither through employee volunteering or by using core competency which develops solutions.In addition for key engagements it also partners with other Tata entities NGOsGovernment and clients.

The communities that the Company chooses are economically backward and consist ofmarginalized groups (like women children and aged) and differently abled. In additionthe Affirmative Action programs of the Company in India are directed towards SC/STcommunities as defined by the Government of India.

The projects undertaken are within the broad framework of Schedule VII of the CompaniesAct 2013. Details of the CSR policy and projects or programs undertaken by the Companyare available on links given below:

1. The composition of the CSR committee: The Company has a CSR committee of directorscomprising N Chandrasekaran Chairman of the Committee O P Bhatt Rajesh Gopinathan andAarthi Subramanian.

2. Average net profit of the company for last three financial years for the purpose ofcomputation of CSR:

'27078 crore.

3. Prescribed CSR Expenditure (two per cent of the amount as in item 2 above): '542crore.

4. Details of CSR spent during the financial year:

a. Total amount to be spent for the financial year: '542 crore

b. Amount unspent: '108 crore

Company spends amount on projects keeping in mind sustainability impact on the desiredrecipientsand efficacy of implementing agencies. Considering the multi year projectstotal amount to be spent and the extent of due diligence to be performed the Company isfocusing on select projects to ensure maximum impact to society. The Company also spendsactively in various communities and on social initiatives in the countries it operates in.These expenditures while in the nature of CSR spend do not qualify under Section 135 ofthe Companies Act 2013. The total CSR spend of the Company for FY 2019 including both thenature of expenses is '527 crore.

c. Manner in which the amount spent during the financial year: Annexed

5. In case the company has failed to spend the two per cent of the average net profitof the last three financial years or any part thereof the company shall provide thereasons for not spending the amount in its Board report.

Please refer to item no. 4(b) above.

6. A responsibility statement of the CSR committee that the implementation andmonitoring of CSR policy is in compliance with CSR objectives and policy of the Company.

We hereby declare that implementation and monitoring of the CSR policy are incompliance with CSR objectives and CSR policy of the Company.

Rajesh Gopinathan N Chandrasekaran

Chief Executive Officer and Managing Director Chairman Corporate Social ResponsibilityCommittee

Mumbai April 12 2019

4 (c) Manner in which amount spent during the financial year is detailed below:

(' crore)

Sr. CSR Project or No. Activity identified Sector in which project is covered Projects or programs (1) Local area or other

(2) Specify the State and district where projects or programs was undertaken

Amount Outlay (budget) project or program wise Amount spent on the projects or program Subheads : (1) Direct Expenditure

(2) Overheads

Cumulative Expenditure up to the reporting period Amount Spent : Direct or through implementing agency
1 Training and

educating children women elderly differently abled scholarships special education and increasing employability

Promoting education including special education and employment enhancing vocation skills especially among children women elderly and the differently abled and livelihood enhancement projects measures for reducing inequalities faced by socially and economically backward groups Pan India 314 36 283 Through



2 Disaster Relief technical support for Hospitals including Cancer Institutes promoting hygenic sanitation. Eradicating hunger poverty and malnutrition promoting preventive health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water Pan India 677 296 606 Through



3 Water conservation through desilting repair and maintenance of lakeswatershed restoration for sustainability and flood protection Ensuring environmental sustainability ecological balance protection of flora and fauna animal welfare agroforestry conservation of natural resources and maintaining quality of soil air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga Pan India 16 3 5 Direct
4 Contribution to TCS Foundation Various sectors covered by Schedule VII of the Companies Act 2013 Pan India 584 92 582 Through



Sub-total 1591 427 1476
Overheads for various CSR initiatives 7
Total CSR Spend 434