Tata Consultancy Services Ltd Management Discussions.

OVERVIEW OF THE INDUSTRY

The pandemic is estimated to have caused a 3.3% contraction of the world output in CY 20201, with advanced economies contracting 4.7%, and many sectors such as travel, hospitality, transportation, aerospace, consumer discretionary and small enterprises getting impacted severely across the world. Consequently, global technology spend2 declined 3.2% to about $1.4 trillion in 2020. Within that, IT services spending declined more, down 3.9%, while Business Process Management declined by 2.4%.

While the spending showed a decline on a full year basis, technology was center-stage in enterprises response to the pandemic-related lockdowns and thereafter. After the initial contraction due to dislocations, the need for business continuity, operational resilience and the switch to digital transactions drove strong demand for IT services over the rest of the year.

Demand for services around remote connectivity, cybersecurity, collaboration tools, digitized processes, automation and cloud adoption, progressively strengthened in the course of the year.

Very importantly, as consumers shifted to digital channels for most of their needs, enterprises realized the need to invest in enhancing customer experience. This significantly and cloud adoption.

The global market for IT services continues to be a highly fragmented one, with even the largest provider having a mid-single digit market share. TCS is among the largest IT services providers globally, with a market share of 1.6%, and has significantly outperformed the market, growing at twice the rate of market growth over the last decade. This may be attributed to market share gains resulting from TCS customer-centric strategy and organization structure, focused investments in building superior capabilities, better execution resulting greater customer satisfaction, and steadily expanding participation in customers growth and transformation spends.

TCS BUSINESS An Overview3

TCS is an IT services, consulting and business solutions organization partnering many of the worlds largest businesses in their transformational journeys for the last 50 years. It has a global presence, deep domain expertise in multiple industry verticals and a complete portfolio of offerings grouped under consulting and service integration, digital transformation services, cloud services, cognitive business operations, and products and platforms targeting every C-suite stakeholder. The Company leverages all these and its deep contextual knowledge of its customers businesses to craft unique, high quality, high impact solutions designed to deliver differentiated business outcomes. These solutions are delivered using its Secure Borderless Workspaces (SBWS ) operating model which enables a highly distributed, Location Independent Agile delivery.

TCS geographic footprint covers North America, Latin America, the United Kingdom, Continental Europe, Asia-Pacific, India, and Middle-East and Africa4. investments in digital transformation TCS considers industry verticals as its go-to-market business segments. The five key vertical clusters are: Banking, Financial Services and Insurance (BFSI), Retail and Consumer Business, Communications, Media and Technology (CMT), Manufacturing and Others. The last category includes Life Sciences and Healthcare, Energy, Resources and Utilities, Public Services and others.

INPUT OUTPUT OUTCOMES
164,177 crore Revenue 116.2%* Operating cash flow to Net income ratio • Strong growth creates more jobs, and career growth opportunities for employees
Financial Capital 4.4x growth over the last decade 101.5%* Shareholder payout to • Best in class profitability and strong balance sheet provide greater ability to invest in newer capabilities and to weather economic downturns
25.9%* Operating margin Net income ratio
50,430 crore Invested Funds • Consistently high shareholder returns enhances relationship capital
5,879 Patents applied • Enabled new business models, new revenue streams
1,850 Patents granted • Expanded the addressable market
Intellectual
Capital 67 academic partnerships and ecosystem of 2,400 startups in COIN program • Differentiated positioning; superior speed to market and generate higher
quality revenues
6,000+ innovators nurtured till date
• •inning large growth and transformation engagements
40,185 Net addition of employees 379k+ associates trained in new • Best in class talent retention helps foster contextual knowledge, ensures stability
Human technologies in delivery teams
Capital 7.2% Œttrition
457k+ associates trained in agile • Upskilling and reskilling at scale has created a large and deep pool of expertise
43 million learning hours logged
48.8% reduction in absolute carbon footprint YoY (Scope 1 + Scope 2) • Limited the impact of the companys physical operations
Natural
Capital 63.9% Reduction in fresh water consumption YoY • Fulfilled responsibilities towards environmental stewardship
1.65 Power utilization efficiency achieved at 21 data centers
1,000+ Number of agile workspaces • Enabled wider adoption of TCS pioneering Location independent agile model,
pre-pandemic
5 PacePorts
Manufactured • Easy switchover to the SBWS during the pandemic
30+ innovation labs
Capital • Greater visibility of TCS Research and Innovation
11 cities with Covid care centers within TCS Facilities
• More innovation engagements
• Relief to employees needing Covid care
48 $100M+ clients 737 crore CSR spend • Deep and enduring customer relationships with high repeat business
Social & 101 $50M+ clients 1.8 million+ Number of beneficiaries of global CSR initiatives • Greater revenue visibility, lower selling expense
Relationship
Capital $14.9 billion Brand Valuation • Stronger brand, helping drive higher quality revenue
787k+ Volunteering hours spent on CSR • Very high goodwill in the community, fulfilling the companys purpose

Value Creation Model5

Talent and creativity, that is represented by human capital, is at the core of TCS value creation engine.

TCS continually enhances its human capital by acquiring the best talent available in each of the markets it operates in, providing a supportive and vibrant workplace to engage that talent, investing in upskilling individuals with the latest technology skills, and giving them career paths matching their aspirations.

A firm belief in organic talent development, and of investing in people has helped TCS successfully navigate through multiple technology cycles over the last five decades, pivoting and adapting each time to build relevant new capabilities through reskilling of the workforce at scale and helping customers realize the benefits of emerging technologies.

The companys industry-aligned, customer-centric organization structure has resulted in each business unit acquiring tremendous domain depth, and the account teams within those units building up immense customer-specific contextual knowledge. This domain expertise, contextual knowledge, project management experience and technology expertise gained on the job represents a conversion of human capital into intellectual capital.

TCS applies some of its intellectual capital towards investments in research and innovation (R&I), exploring the creative use of newer technologies to solve business problems across different industry verticals. In addition to its own intellectual capital, TCS also partners with leading technology providers, start-ups and academic researchers to leverage their intellectual capital and build solutions.

The immediate tangible outcomes of TCS R&I, produced by in-house teams or co-created with customers or partners, are patents, proofs of concepts, and pilot solutions. The latter two are showcased at various innovation centers and Pace Ports , and trigger conversations with customers on innovation in their specific business contexts. These often culminate in them signing up TCS as their innovation partner.

Some of the innovative software solutions piloted by R&I, that are assessed to have a material market potential are productized, adding to TCS large portfolio of products and platforms. These expand the organizations intellectual capital; create new, higher value revenue streams, adding to the financial capital; and enhance its brand positioning i.e. relationship capital.

Customer Engagement

TCS uses its intellectual capital and human capital to build impactful, customized technology and business solutions that address the customers business problems. Further, its ability to stitch together complex, holistic solutions that address the needs of all stakeholders in the enterprise, along with the high levels of trust engendered in customer relationships, helps it win large transformation deals. These deals bring in high quality revenues, powering industry-leading organic growth and margins, boosting the companys financial capital.

These solutions create immense value for its customers by helping them embrace new business models, pursue new revenue streams, deliver superior customer experiences or build resilience and efficiency into their operations, and gain competitive differentiation.

The companys strong service orientation, willingness to invest in the relationship, commitment to deliver impactful outcomes and track record of execution excellence have resulted in consistently high customer satisfaction levels and long, enduring customer relationships. The resultant expansion in relationship capital translates into a very high level of repeat business that lends greater visibility and predictability to the business model.

TCS constantly invests in building newer capabilities and expanding its offerings. By cross-selling and up-selling these new offerings, customer engagements continually expand over the years, covering newer and newer areas of the enterprises operations.

This further broadens and deepens the contextual knowledge of customers business and IT landscapes, further enhancing TCS intellectual capital.

Over time, this combination of business knowledge, contextual knowledge, technology depth, and intellectual property has become a steadily deepening moat around the companys business model and sharpened its differentiated positioning.

Value Sharing

Best in class profitability, to a more predictable and resilient business, and high cash conversion on account of superior execution have resulted in a high return on equity. All this and a shareholder-friendly capital allocation policy have boosted the companys relationship capital with shareholders.

The investments in people, research and innovation, and intellectual property creation are all charged off and not capitalized. The companys capital expenditure to support its growth manufacturing capital towards building campuses, Agile workspaces, innovation centers, and Pace Ports is modest relative to its size. That and the focus on pursuing organic business growth opportunities maximizes the free cash flow available for distribution to shareholders.

TCS physical operations consume social capital in the form of license to operate in each of the communities where it has its facilities, and natural capital in terms of its environmental footprint. TCS enhances its social capital with local communities across the world by investing in areas such as education, skill development, employability, health and wellness, and the environment, mapped to UN Development Goals6. On the environmental front, TCS has a systematic program to reduce its carbon and resource consumption footprint including the use of green IT, green buildings, intelligent energy management using its own IoT-based solution and reduced cost of capital due water and waste recycling. It has also been reducing business travel through greater use of video and audio conferencing and other collaboration tools. The near complete switchover to virtual ways of interaction during the pandemic is expected to continue in the longer term, resulting in a structurally smaller environmental footprint in the future.

TCS business model and strategy have resulted in deep and enduring customer relationships, a vibrant and engaged workforce, a steady expansion of its addressable market, a strong reputation as a responsible corporate citizen and a proven track record in delivering longer term stakeholder value. All of this has significantly enhanced the companys brand value, which is a quantifiable measure of its social and relationship capital with stakeholders.

Strategy for Sustainable Growth

Customer-centricity is at the heart of TCS strategy, organization structure and investment decisions. TCS customer-centric worldview helps spot trends early, embrace business opportunities by making the right investments and mitigating risks while discharging its social and environmental responsibilities. The company invests in broadening and deepening customer relationships by continually looking for new areas in their value chain where the company can add value, proactively investing in building newer capabilities, reskilling its workforce and launching newer services, solutions, products and platforms. Over time, TCS participation has also extended into the departmental budgets of other stakeholders within the customers organizations business heads, CMOs, CROs, COOs, CFOs and even CEOs. This has not only embedded TCS deeper into their businesses but has also resulted in a continual increase in services consumed, revenues and share of wallet, as evidenced by the client metrics reported every quarter and every year.

At an aggregate level, this strategy has resulted in deep and enduring customer relationships, a vibrant and engaged workforce, a steady expansion of the addressable market, and a proven track record in delivering longer term stakeholder value.

Enabling Investments

TCS pioneered the use of the word ‘digital to describe the new family of technologies that emerged in the last few years. Quick to recognize their potential, the company made investments ahead of time7 in developing relevant capabilities in terms of reskilling the workforce, research and innovation around the creative use of these technologies to address business problems across different industries, building collaborative workspaces and innovation centers, IP in these new areas, and alliances and partnerships. Those early investments have given TCS a head start in participating in its customers growth and transformation journeys.

To showcase the outcomes of its own Research and

Innovation, and to provide ideation and prototyping spaces for collaborating with customers on their innovation, TCS has been investing in creating a network of Pace Ports in all its major markets. These co-innovation and advanced research centers consist of TCS COIN accelerators, Agile workspaces, academic research labs and an innovation showcase, and will help engage customers through the discovery, definition, refinement and delivery phases of innovation. The company set up its first Pace Port in Tokyo (FY 2019) and the second in New York (FY 2020), at the Tata Innovation Center in the Cornell Tech campus. In FY 2021, three new Pace Ports at

Amsterdam, Pittsburgh and Toronto respectively became operational digitally.

TCS continued to invest in intellectual property and launched several new products within the ignio suite, the TCS BaNCS suite and the TCS ADD suite. There were also new service offerings launched, catering to the

TCS Digital Library: An interactive channel that delivers cutting-edge thought leadership digitally TCS Rapid Labs: An innovation factory for quick turnaround of proofs of concepts and MVPs TCS Academic Research Lab: A collaborative medium to strike partnerships with academia TCS Innovation Showcase: A sensory experience of TCS ongoing research and innovation stories

TCS COINTM Accelerator: An entrepreneurial forum to bring together client teams to solve specific customer problems TCS Agile Workspace: An environment to produce working-quality pilots and MVP software in short and fast increments TCS Think Space: A space for researchers and analysts to create new solutions by leveraging digital forces and design thinking methodology evolving needs of customers during the pandemic. To gain leadership in the rapidly expanding services opportunity around the hyperscale cloud platforms, TCS launched dedicated practice units around AWS, Microsoft Azure and Google Cloud Platform. Each unit is a full-service, multidisciplinary organization offering customers the full range of transformational and operational services on the respective technology stacks, spanning advisory services, migration, application and data modernization, including SaaS and enterprise productivity suites, infrastructure, cyber-security and edge.

TCS also operationalized ten new Threat Management Centres (TMCs) across locations - including the US, UK, Spain and India - for providing cyber security services locally to its enterprise customers. These centres will focus on providing cyber security solutions and services, including managed detection and response services, incident management and breach support, on-demand cyber vigilance services, digital forensics and regulatory compliance.

Thought Leadership

TCS Business 4.0 thought leadership framework 8 to guide customers in their growth and transformation journeys was refreshed in FY 2021 to include the defining attributes of successful organizations: purpose-driven, resilient and adaptable. These attributes develop from following four behaviors: mass personalize, leverage ecosystems, embrace risk and create exponential value. This is accomplished by harnessing the abundance of resources compute power, storage, talent, market reach created by the convergence of intelligence, agility, automation and cloud.

In addition to this, TCS articulated its three-horizon cloud transformation journey roadmap to guide customers in their core transformation and cloud investments. While these provide a way for customers to think through their digital transformation journeys at a business model level, TCS thought-leading execution framework consisting of the Location Independent Agile model and the Machine First Delivery Model found significant traction in FY 2021, as customers sought greater operational resiliency and efficiency. Operating model transformations using a Machine First approach were seen by customers as foundational for their growth and transformation initiatives.

TCS Location Independent Agile model allows large transformational programs to be delivered by globally distributed teams working collaboratively in an Agile mode, resulting in significant speed to market, reduced risk and enhanced customer experiences. The underlying project management methodology, governance structures, processes and controls, and security protocols were extended to implement SBWS, a fully location-agnostic model for remote working that lends further resilience to the delivery model.

Building on the success of its SBWS model, TCS is now further innovating with service delivery models, launching talent clouds, which enable greater fungibility of talent, resulting in faster project ramp-ups and better delivery outcomes for customers while resulting in higher employee satisfaction.

Outcomes

TCS thought leadership and investments have made it the preferred innovation and transformation partner to progressive enterprises across different industry verticals. Customers bank on TCS contextual knowledge and solutioning capabilities to leverage new technologies to change their business models, drive new revenue streams, strengthen customer relationships by offering superior experiences, or transform their operations.

This has increased demand for the entire gamut of services, solutions, products and platforms offered by TCS, resulting in a stronger order book, more robust revenue growth, and improved market share. These transformational engagements are raising TCS profile within C-suites, embedding its teams more deeply within customers businesses and resulting in greater predictability and resilience.

TCS Strategy

Market Trends TCS Approach Outcomes
More and more industries are leveraging technology to differentiate themselves Customers want solutions to business problems and not just technology skills Position as a growth and transformation partner More investment in research and innovation, co-innovation and collaboration Domain-specific IP Greater focus on contextual knowledge Industry-defining mega deals Thinner competitive set Higher quality revenue More fulfilling work; better retention
Proactive solution selling
Non-CIO buyers emerging in enterprises Full stakeholder services and solutions Expansion of addressable market More deeply embedded in customers business; greater resilience and visibility Higher profile, strategically more important engagements
Transformational partners selected based on solution quality and time to market Leverage TCS contextual knowledge, Location Independent Agile, Machine First Delivery Model and Intellectual Property Thinner competitive set Higher quality revenue
Greater platformization of business Launch of cloud based platforms and new business models Leverage IP portfolio Large deals that improve business visibility Expansion of addressable market Frees up spends for systems of differentiation
Pandemic disruption highlights need for operational resilience and enterprise adaptability Launch of SBWS Greater focus on Location Independent Agile and MFDM Promote operating model transformation using AI Highlights companys responsiveness Market share expansion

FY 2021 PERFORMANCE OVERVIEW: HUMAN CAPITAL9

Talent Management

The ability to attract, motivate, develop and retain talent is critical to TCS continued success. The companys HR strategy is focused on attracting the best talent globally, reskilling and transforming the workforce and providing a stimulating workplace, which is flexible, nurtures social contract, fosters innovation, and builds a result-oriented, high performance culture. The progressive policies, continual investment in upgrading employees skills and the philosophy of empowering individuals and helping them realize their potential have made TCS HR processes and outcomes an industry benchmark.

The SBWS operating model that was rolled out in a record three weeks towards the end of the last fiscal year, proved its strength in FY 2021, enabling every activity that hitherto required physical presence, to be executed remotely. Freed from the constraints of physical location, TCS launched an innovative concept of talent clouds or virtual teams of individuals who are physically distributed across locations, but made available to any project seamlessly, as per client demand and project requirement. This has helped open up more opportunities for employees to explore, across industries, domains and markets, while enabling better utilization of smaller talent pools. Customers are particularly delighted by the faster project ramp-ups that this model enables, and the superior outcomes.

TCS also announced Vision 25x25, wherein by year 2025, only 25% of the workforce will need to be physically present in TCS offices at any point, and an employee needs to spend no more than 25% of their time in a TCS office to be 100% productive. This is expected to make a significant difference to employees quality of life, open up opportunities to demographic segments disadvantaged by the current way of working, help enhance TCS ability to attract and retain diverse talent further and reduce its environmental footprint.

Pandemic Support

Employee health and wellbeing continued to be a key priority in FY 2021. In addition to existing health care benefits, which are a benchmark in the industry, the company launched several initiatives to help employees receive prompt medical attention. Besides a medical helpline, TCS partnered with leading healthcare chains to provide ambulance services, hospital admission assistance and home healthcare services to employees in India.

TCS also set up first-line COVID-19 Care Centers at its premises in 11 cities in India to help employees and their dependents quarantine safely and receive medical attention. The functioning of the existing Occupational Health Centers (OHC) was revisited to ensure better preparedness for medical emergencies from a COVID-19 perspective, with round the clock availability of OHC doctors, and tele medicine.

Thousands of employees and their families who were stranded overseas due to flight cancelations were repatriated through the Vande Bharat Mission. TCS provided self-help resources and counselling services to help employees overcome mental and emotional challenges through the TCS Cares initiative.

A break-up of the workforce by region, age and gender is provided in the charts below10.

Talent Acquisition11

TCS talent acquisition strategy is to identify, engage and hire Top Talent with the right competencies required by the business at the right time to promote future business growth. TCS continues to be the Employer of Choice and delivers a meaningful experience to associates and business through an agile, and data driven ecosystem.

The company remains the preferred employer at leading engineering campuses in India. The companys college recruitment efforts in USA, Canada, Latin America, China and Hungary have been progressing well with very encouraging outcomes. TCS was one of the largest job creators in IT services in several major markets. In the United States, TCS has hired over 21,500 employees over the last five years.

In FY 2021, the company had a net addition of 40,185 employees to its global workforce.

TCS National Qualifier Test

This nationwide online test administered by TCS iON™ has helped TCS tap into the larger national talent pool and boosted the quality of entry-level talent. The FY 2021 was fully virtual, so students could attend it from the safety and comfort of their homes.

Participation by 368,894 students 3,157 colleges represented

Academic Interface Program

TCS partners with academic institutions to enhance their curriculum and pedagogy. Activities include workshops, internships, sponsorship of contests, faculty development programs, research scholarships, curriculum review and launch of new programs.

India: Outside India
• 686 institutes • 422 institutes
• 1,069 student workshops; • 330 student workshops;
120,996 students 21,991 students
• 524 Faculty Development • 10 Faculty Development
Programs; 20,306 teachers Programs; 651 teachers
• 1,302 internships, incl • 296 internships
20 global interns

2,332 associates are pursuing higher studies under the TCS Higher Education program

Gamified hiring

Programming contests to spot top talent 3,708 Gamified hiring offers made 354,000+ registrations from 98 countries in CodeVitas 9th season

Launchpad 2021

Exclusive Campus Commune channel to engage 2020-21 batch through blogs, quizzes, podcasts, webinars, to nurture the talent and also prepare them for the upcoming National Qualifier Test (NQT).

247,000+ students of the FY 2021 batch participated

TCS takes a purpose-centric approach to learning and development that leverages horizontal collaboration and the abundance of internal talent in an ecosystem where the training is just-in-time, just-for-me and just-enough. In response to COVID-19, rigor in learning was intensified, with a focus on building deeper and higher competencies. Starting with the post-offer engagement to onboarding the entire process has been 100% virtual. This virtual ecosystem has enabled trainees to become SBWS-enabled and start their business journey immediately after joining. In the new way of working, engagement with learners has changed significantly.

• Reinvention of teaching and assessment methods with virtual breakout rooms, digital whiteboards, menti-meters, peer tagging, simulation, online games etc.

• Rollout of virtual versions of previously in-person leadership and soft skills programs for uninterrupted upskilling.

• Segmentation of employees to achieve focused learning objectives. Eg: by allocation status, by experience levels, by extent of digital skills etc.

The Contextual Masters pool has grown to over 16,000 in FY 2021, further strengthening the Companys cadre of Growth and Transformation leaders capable of engaging with CXOs on their transformation agenda.

Talent Engagement

TCS has proactively reimagined employee engagement with its “Engagement with Purpose” model focused on health and wellbeing, lifelong learning, career development, living TCS values, social collaboration and community service. It is a virtual, mass-personalized subscription-based program with continuous real time feedback. The company has meaningfully engaged with over 400,000 employees, helping foster togetherness during trying times. The #OneTCS Channel has seen very good response and has helped employees meet, connect, learn, share and spend some time with each other virtually. The Companys internal associate satisfaction survey PULSE showed the highest associate satisfaction and engagement scores in the last 13 years.

Some of the platforms and initiatives used by TCS to enhance and enrich employee engagement are:

Cara: AI-based HR assistant that answers employee questions on HR policies.

Milo: Chatbot to facilitate the mentoring process.

Knome, KnowMax, GEMS: Platforms for social collaboration within the organization, learning, sharing and for rewards and recognition.

Safety First: Initiative focused on employee safety and security.

Fit4life: Builds a fraternity of health and fitness conscious employees and creates a culture of fitness

Purpose4life: Forum for volunteering for community projects in the areas of education, health and environment.

Maitree: Community of TCSers and their families who plan activities that help create a bond among employees and promote work-life balance.

PULSE: TCS annual employee engagement and satisfaction survey is the organizations formal listening forum.

TCS Cares: Program aimed at creating robust avenues to build an emotionally strong and mentally resilient workforce.

Career Management

TCS has multiple initiatives to help employees grow in their careers:

Xcelerate is an integrated platform to capture associates aspirations and mapping them to future opportunities.

iConnect is a highly collaborative tool designed to help employees reach out to senior mentors for guidance on career paths, have face to face dialogues about their role and career. It provides flexibility for group mentoring as well as individual mentoring.

Inspire is the high potential program for mid-level employees. It helps identify high potentials as early as possible, invest in them continuously, enable accelerated growth, and transition them to leadership roles, and reward and recognize their efforts and success.

Talent Review is TCS process to assess and review the leadership pool in the organization. It enables leaders to share their career aspirations and preferences of mobility, followed by an assessment of their leadership attributes. The objective of the program is to create and sustain a healthy leadership pipeline.

Exciting Opportunities is the internal platform to publish niche and critical requirements to the leadership and high potential communities, thereby facilitating talent mobility. This embodies the companys philosophy of giving the first right of refusal for all leadership positions to internal candidates, thereby enabling better leadership development and building strong organizational loyalty.

Competitive Compensation

TCS business model depends on its ability to attract and retain talent in the highly competitive, global market for software engineers with graduate or post-graduate degrees in engineering and with relevant technical skills.

Compensation levels are merit based, determined by qualification, experience levels, special skills if any, and individual performance. Compensation structures are driven by prevailing practices in each country that TCS operates in. The company regularly benchmarks its compensation plans and benefits with the market to ensure competitiveness.

Across the enterprise, remuneration is the same for men and women working full-time, in the same grade, in the same role, and at the same location14. Where relevant, the company publishes the raw mean and median pay differences between genders (not normalized for part-timers or grade and role differences) on its own website as well as on public sites.

The company offers a variety of benefits to full time employees including parental leave15. In FY 2021, a total of 16,907 employees availed of parental leave. Of these, 116 were men and 16,791 were women. Of the 18,767 employees whose parental leave ended during the year, 127 were men and 18,640 were women. Of these, 91 men and 16,176 women employees rejoined work, amounting to a retention rate of 72% and 87% respectively.

At TCS, three months notice is required from either side for termination16. In India, 0.03% of the workforce is unionized17. Although most of the

14 405-2
15 401-3
16 402-1
17 102-41

organizations activities are performed by full-time employees, TCS uses contractors, especially for short-term assignments or those requiring skills not internally available.

In FY 2021, the company launched Elevate, a new merit-based, democratized and transparent talent framework designed to establish a tighter linkage between learning, skill development, career and compensation. Over 138,000 employees were onboarded in this program.

Talent Retention

TCS empowering culture, philosophy of investing in people, career growth opportunities, and progressive HR policies have resulted in consistently high retention levels and developed a strong employer brand. In recent years, the companys investments in organic talent development and initiatives like Contextual Masters have further reassured employees that the company values them for the contextual knowledge they possess and is prepared to invest in equipping them with new-age technology skills that they do not have.

This has made TCS the employer of choice, and its employee retention record an industry benchmark. In FY 2021, TCS IT services attrition rate was at an all-time low of 7.2%.

Talent Diversity18

TCS is an equal opportunity employer, embracing diversity in race, nationality, religion, ethnicity, marital status, gender, age, physical ability, and sexual orientation.

Through a variety of initiatives and campaigns, the company celebrates the diversity within the workforce and promotes inclusion. The company has a well-defined and progressive Diversity and Inclusion Policy with a focus on gender diversity (men, women, non-binary gender), persons with disability and neuro diversity, sexual orientation, diversity of the mind and generational diversity. This includes parental leave and insurance cover for LGBTQ+ partners and gender re-assignment surgery, besides equal opportunity and fair practice. TCS Center of Excellence for Accessibility works on IT solutions for differently abled individuals, aiding their integration into the workforce.

The company believes that its new hybrid working model as envisaged by Vision 25x25 is inherently more inclusive, and will help various demographic groups disadvantaged by the old way of working, to overcome those constraints and pursue fulfilling careers at TCS, further boosting workforce diversity.

Towards creating a more inclusive and equitable workplace, the company has programs like:.

• Champions of Equity, a company-wide campaign that entails senior leaders pledging to fair and equitable practices and serving as role models to the rest of the organization.

• Allies of Diversity, a larger dialog on diversity and inclusion that also includes leaders from customer organizations.

• Race Education, a learning initiative to build awareness around socio-cultural understanding of race and its manifestation at the workplace.

Women in the Workforce

TCS is one of the worlds largest employers of women. The company has multiple initiatives for helping women employees realize their potential, while striking a good work-life balance. These include discussion circles and support groups to help women through major life stages, re-orientation programs to reconnect employees after long childcare leave, interactions with inspirational women leaders, and special leadership development programs to address the needs and aspirations of women at different stages in their careers, learning modules to equip mid-level managers to work with diverse teams, tie-ups with day care centers near the workplace, virtual support groups and parenting workshops. iExcel is TCS flagship program to groom mid-level women managers for business leadership roles through an immersive curriculum designed to improve problem solving, learning agility and innovation. Till date, over 969 employees have undergone this program, including 343 women leaders in the virtual editions organized in FY 2021.

These programs are yielding encouraging results and are expected to steadily increase gender diversity especially at senior levels in the coming years. A few key outcomes are detailed below:

Participation: The overall percentage of women in the workforce has gone up from 33.8% in FY

2016 to 36.5% in FY 2021. There has been significant improvement in womens participation across different levels over the last five years:

Role Mobility: 67% of the participants in the iExcel program reported role movements thereafter. 42% experienced upward progression, 4% had enhanced responsibilities, while 21% had lateral movements.

Mentorship: Participants in these programs are also helping develop and advance others. 343 iExcellers are active mentors, having mentored 2,310 employees till date, an average of 7 mentees per iExcel mentor.

Innovation: This is a high focus area, helping TCS gain a differentiated positioning in the market Of the 2,837 unique inventors responsible for the 1,850 granted patents till date, 607 are women.

Occupational Health and Safety19

TCS has a well-defined Occupational Health and Safety policy and supporting processes to ensure the safety and well-being of its employees. Safety lead and lag indicators are measured across the organization and reported. The board-level Stakeholders Relationship Committee reviews the companys health and safety performance on a regular basis. Over 96% of the workforce is represented in joint management-employee health and safety committees20 that monitor, advise and drive occupational, health and safety initiatives.

TCS is certified to ISO 45001:2018 Occupational Health and Safety Management System standard across 120 of its facilities worldwide. With SBWS becoming the new normal, employee engagement programs transitioned to be able to address the most material issues for employees while they work from home. Ergonomics and general safety at home, stretches and fitness, including yoga and meditation practices, mental health were the most relevant topics which drew employee participation. Employees families, including children, were also engaged in such sessions.

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SBWS Ergo track was instituted to help employees understand ergonomic stressors and equip them with ways to adopt the best feasible posture while working from home. Ergonomics @ Home webinars were conducted every week, reaching over 10,000 employees. There were also sessions on ergonomics for employees kids. A series of self-help tools were created for employees including tips and videos on home ergonomic postures and workstation stretches, blogs posts on ergonomics and wellbeing and an ergo self-assessment quiz. The program has reached over 27,000 employees since the start of SBWS.

Awards and Accolades for Human Capital

• Given the Best of Best award by the Association of Talent Development for the second time in a row, for sustained excellence in learning integration and effectiveness, strategic value of learning and individual and company performance.

• Awarded 18 SteviesR at the 2020 Great Employers Awards; six Gold Stevies, eight Silver Stevies and four Bronze Stevies in recognition of TCS talent management, CSR and business practices that have helped it attract retain the best talent to build a global, diverse workforce, and a vibrant workplace.

• Won the Top Women Award for Corporate Citizenship in South Africa, hosted by Standard Bank, in recognition of its role in advancing women to leadership roles.

• Named a Global Top Employer by the Top Employers Institute for the sixth successive year for its employee-friendly workplace practices and continued investments in building up talent across the organization through professional development initiatives and digital skills programs. In addition, it has been certified as a Top Employer in Europe, UK, North America, APAC, MEA and LATAM. It was ranked the #1 Top Employer in the US, UK, Finland, Switzerland, Singapore, Philippines, Malaysia, Hong Kong, Ecuador, Chile and Australia in the country-wise rankings.

• Won three awards for talent management and excellence in learning at the 2020 Brandon Hall Group Awards; two Gold awards for ‘Best Advance in Creating a Talent Strategy and ‘Best Learning Program Supporting a Change Transformation Business Strategy and a Silver award in the category ‘Best Use of Games and Simulations for Learning.

FY 2021 PERFORMANCE OVERVIEW: INTELLECTUAL CAPITAL

This is a milestone year for TCS Research and Innovation (R&I). TCS first research lab was established forty years ago at the Tata Research, Design and Development Centre (TRDDC) in Pune. TCS Research marked its 40th year by adopting a new brand identity with the tagline RsInventing for Impact. TCS R&I made a significant contribution effof the pandemic across towardsmitigatingthe areas such as drug candidate molecule discovery, COVID data management, diagnostic kits and epidemiological study.

Sustained investments over the years have resulted in a significant scaling up of TCS R&I footprint over the last four decades. Today, TCS has research labs and innovation centers around the world, some deeply embedded within business units, some in collaboration with academia, as part of Pace Ports, as well as dedicated Agile Innovation Centers for customers. The company has over 6,000 inventors and innovators working on advancing scientific knowledge and solving real-world problems.

The companys Chief Technology Officer oversees a three-horizon portfolio of investments spanning current innovation, mid-term and long-term research:

Horizon 01 Horizon 02 Platform Innovations Horizon 03 Disruptive Innovations
Derivative Innovations
Investments in labs across key business units to deliver innovative solutions to solve current customer problems. Several of TCS IP-based products released new features: ignio™ released features related to cognitive procurement, digital workspace and assurance, enabling customers to leverage the power of AI in business and IT functions. Mid-term investments in cloud-based platforms for orchestration of network technologies, robot communications and logistics, and XR-based avatars. R&I is creating digital twin platforms. Futuristic investments in new areas such as DNA computing, AI for protein design, cognitive robotics, meta materials, quantum computing and sensing, and digital twins for biology.
TCS MasterCraft™ launched new features for application development, modernization and enterprise data transformation; strengthened its go-to-market strategy with Cloud Service Providers (hyperscalers). Jile™ MarketPlace was launched to facilitate integration to various commercial and open-source tools in agile project management. TCS CogniXTM for Finance was launched this year.

TCS R&I is building a rich pipeline of IP based assets consisting of patents, products and platforms. To enable business alignment and to de-risk emerging technology use, TCS New Products and Services Development framework monitors the pipeline of evolving, future-focused offerings. This has resulted in a further expansion of the IP portfolio across a range of technologies and industry domain processes. As of March 31, 2021, the company has filed for 5,879 patents and has been granted 1,850 patents. TCS researchers presented over 240 papers at premier research conferences and notable journals this year.

Broad-basing Innovation

Every key business unit has its own innovation program, led by a unit-level CTO. These units leverage their deep domain expertise, customer-specific contextual knowledge and the research outcomes in emerging technologies from Corporate R&I as well as the TCS Co-Innovation Network to come up with innovative solutions for customers in their respective segments. Examples include:

TCS DynaPORT : This solution from the Travel, Transportation and Hospitality unit is for seaports and terminal operators. This one-stop digital terminal operating system (TOS) streamlines order-to-invoice processes and supports multi-modal and multi-purpose requirements. It currently powers over 80 terminals across the globe.

TCS Omnistore : With TCS OmniStore, retailers can orchestrate unified omnichannel customer journeys, build new services and apps quickly without worrying about channel constraints, and ensure their stores are ‘always on to drive unique, interconnected micro-experiences.

TCS Consent Management Solution: This helps organizations automate compliance towards latest privacy regulations while reducing associated costs. It offers a range of capabilities such as consent collection and enforcement, data subject rights, data masking and data discovery.

Innovation Ecosystem

TCS Co-Innovation (COIN ) ecosystem continues er to expand. It now consists of over 2,400 start-ups distributed across innovation hubs all around the world. The global Academic COIN program now has 67 active partnerships with various institutions. New partnerships were forged with KTH Royal Institute of Technology, Sweden, National Institute of Industrial Engineering (NITIE), Mumbai, and IIT Jodhpur, among others.

Customer Engagement

TCS Research and Innovation connects with customers and partners through several channels. TCS Innovation Forum 2020, its flagship event, was reimagined in a format that was optimal for digital channels. Over 3,700 clients and partners attended the series across editions, totaling 4x attendance over the physical event in 2019. A number of Innovation Days, Round Tables and seminars were held for customers around the world.

TCS Pace Ports were launched in Amsterdam, Toronto and Pittsburgh. Pace Ports offer access to COIN accelerators, academic research, design thinking and agile workspaces and innovation showcases, enabling faster innovation. This year Pace Ports anchored 75 customer teams virtually.

TCS runs ideathons and hackathons almost every week to build an innovation culture within the organizationand opportunities to innovate within and outside their current assignments. These crowdsource innovative ideas from within TCS and have been very popular with customers. Several customers have run challenges and have been impressed by the number of novel solutions or ideas TCSers have come up with.

Social Good

A number of assistive technologies have emerged from TCS R&I, including Assisto (Speech aid for Cerebral Palsy); VHAB (Immersive Physio); Verbose (Speech-to-text); School at Home assistance for disabled; Emotrain (Training for Autistic) and Home Bound (COVID related remote medical assistance). These were especially useful during the pandemic, where much of the training and support for children with special needs had to be virtual.

TCS Access Infinity platform that has been powering the Sugamya Pustakalaya portal, won the Zero Project Award this year. Launched by Daisy Forum of India (DFI), a not-for-profit organization with a network of over 100 organisations working for the welfare of the visually impaired, the portal has 674,795 books available for download for the print-disabled community.

Socially responsible initiatives launched include the TCS Sustainathon, Seed.Lab and the Digital Sustainability Index. TCS Sustainathon, in its first edition for Singapore, focused on reducing food wastage. TCS and the Malaysian petroleum major PETRONAS launched a Social Enterprise Education Lab (SEEd.Lab), an end-to-end incubation program for a group of young Malaysian to-be-entrepreneurs and to create employment opportunities for others.

TCS and Auckland Business School Launched an APAC-focused Digital Sustainability Index. The new index will track the adoption and leverage of digital technologies by enterprises for their growth and transformation, and for discharging their social and environmental responsibilities, to create longer term value for all stakeholders.

Other investments in sustainability initiatives like digital farming, the energy value chain, and water and power savings, continue.

The TCS Research Scholar Program is in its 10th year and has supported 350 scholars from 41 premier institutes till date. TCS researchers mentor young social entrepreneurs solving socially relevant problems at the TCS Foundations Digital Impact Square (DISQ), Nashik. DISQ entrepreneurs came up with innovative solutions for coping with the pandemic.

TCS Suite of Products and Platforms

• 19 new wins (50% of the new wins were on TCS BaNCS Cloud) and 25 go lives in FY 2021

• Highlights: y Banking: Serves more than 25% of the world population. Two of the worlds largest core banking implementations run on TCS BaNCS, processing 1 billion accounts y Capital Markets: Performs clearing and settlement in over 20 markets worldwide. Records 10 million trades per day (peak), represents $40 trillion worth of AUC across 100 countries y Insurance: Administers over 20 million life, annuity and pension policies; 135 million property and casualty policies y Global Securities: It offers ready market connectivity to 45+local markets for settlements, with 8 of the top custodians running on the solution .

• Digital Glass room: Virtual learning platform, made available to educational institutions across the country shut down by lockdown, free of cost. Garnered registrations from 37,000 institutions. Remote internships for students across trending domains guided by industry mentors, helped 2.6k college students

• Assessment: 273 million+ candidates assessed till date; 10.5 million+ answer books evaluated, 900,000 registrations for TCS NQT in FY 2021. Remote assessments served 28 million+ candidates. Socially distanced assessments for in-center exams across 700+ cities through zero-touch biometric, crowd management, process digitization, which lead to 20 million+ youth securing their future in academic admission / job recruitment.

• Learning: 12 million+ learners on the platform, 71,000 courses available, 490,000+ communities

• Process Management: 700+ SMB clients, 145+ education ERP clients

• 300+ new wins in India and 7 in International market

• Strategic partnerships in India with bodies like National Skill Development Corporates (NSDC) and the state governments of Kerala and Telangana towards skills development

• World leading cognitive automation software for IT and business operations. FY 2021 highlights:

• 50+ new wins; 180% YoY growth in channel partners

• Manages over 1.5 million technology resources autonomously

• 84 patents filed to date; 30 granted

• Comprehensive suite for digital transformation of drug development and clinical trials

• Executed 500 trials on ADD

• Customers: 9 out of the top 10 pharma companies

• Key implementations: Redesigned operational analytics for top 3 pharma, implemented advanced submission planning for a pharma majors regulatory submission; rolled out cognitive automation of pharmacovigilance for 62 studies ; 12k+ shipments completed ; 10k+ kits dispensed ; 90%+ adherence rate on Decentralized Trials solution; implemented eConsent for 11 studies

• Set up COVID study on ADD in less than 10 days for a leading Asia- based pharma major

• Plug and play SaaS based business platform to digitally transform business, network and revenue management domains of subscription-based businesses

• Prevented revenue leakage of over $100 million and has delivered cost savings of over $25 million for customers globally in FY 2021.

• Serving 33+ clients, across Communications, Utilities, Manufacturing and Personal Care; Serving 22 million+ subscribers, handling 145,000+ devices and processing 1.2 billion+ events.

• 13 new wins and go-lives in FY 2021

• AI powered system of actionable intelligence powered by an enterprise digital twin (customer, product, process) to help business leaders simulate and optimise enterprise decisions, predict and proactively manage outcomes

• 7 new wins and 3 go-lives in FY 2021

• SaaS-based, scalable Agile DevOps platform to accelerate software development and delivery and integrate DevOps tools

• 14,000+ active users till date

• AI-powered retail optimization suite that enables retailers to improve sales and margins with integrated merchandising and supply chain decisions.

• 1 new win and 2 go-lives in FY 2021

• AI-powered future commerce platform that enables unified customer journeys by seamlessly catering to new channels and brand expansions.

• 1 new win and 4 go-lives in FY 2021

• Digital platform to optimally automate and manage IT processes

• FY 2021 Highlights: 25 new wins, 96 billion+ records processed for data privacy, 5 billion+ records processed for data quality, 57+ million lines of code (mloc) analyzed, 5+ mloc generated

• Intelligent smart contract development toolkits, Integration solutions and ‘Designed for DLT business solutions that provides foundational technology, tools and business components for creating distributed ledger solutions across varied industries

• Built on the core principles of Coexistence, Integration and Interoperability, Quartz enables existing systems to coexist and integrate with blockchain platforms and other messaging networks

• 10 new wins and 2 go-lives in FY 2021

Awards and Accolades for Intellectual Capital

• Awarded the Best Patents Portfolio in the Large Enterprises (Information and Communications Technology and Services) category at the Confederation of Indian Industry (CII) Industrial Intellectual Property Awards 2020.

• Won the CIO Magazine Innovation Award jointly with Damen Shipyards, in the ‘Most Innovative B2B Project or Program category, for Triton, Damens connected vessel platform, designed and built by TCS.

• Won the Business Culture Award in the category Best Use of Innovation for Business Culture, for building a culture of innovation that welcomes new ideas from across the organization, resulting in an industry-leading portfolio of intellectual property.

• Highly Commended in the category Best Enterprise AI Solution at The AIconics Awards, TCS Optumera , an AI-powered retail optimization suite, helps retailers make data-driven decisions around right-sizing store space, shopper-centric omni-channel assortments, dynamic pricing strategies and compliance. It also won the 2021 Data Breakthrough Award in the category Data Solution of the Year Retail for empowering retailers to execute integrated strategic decisions.

• Won the 2021 CIO 100 Award for its Intelligent Urban Exchange (IUX) for Workplace Resilience software.

• Won the 2021 IoT Breakthrough Award in the category Enterprise IoT Management Innovation for its Intelligent Urban Exchange (IUX) for Workplace Resilience software.

• Honored with the CIO Choice 2021 award in the category Digital Transformation Enabler for its investments in research and innovation, strong domain knowledge across industries, rigor in service delivery, and comprehensive portfolio of services and platform solutions including IT and advisory services, and digital workplace.

• Conferred the CIO100 Special Award for Business Transformers, IDG Indias annual award program that recognizes and honors organizations and their CIOs, for its digital transformation initiatives, including its SBWS operating model, its digital talent platform, and AI-led solution for timely financial book closure.

• Digitate, a software venture of TCS, was ranked #37 among the Top 100 Software Companies of 2020 by The Software Report, recognized for the rapid growth and market leadership of its ignio suite within five years of launch.

• Named the POS Technology of the Year at the Retail Systems Awards 2020, TCS OmniStore , a flagship product of the TCS Algo Retail suite, was recognized for its open architecture and fluid technology stack that allows enterprises to quickly build new journeys, services, and apps without worrying about channel constraints; all this with the flexibility of reusing existing investments. TCS OmniStore also won the ICXA Award for Excellence in Omnichannel Interactive Customer Experience, for using interactive technologies to create transcendent brand experiences across channels.

• TCS Connected Clinical Trials solution, part of TCS ADD platform, won the 2020 Citeline Award in the category ‘Best Patient-facing Technology Initiative for providing a positive experience to patients in clinical trials and driving efficiency.

FY 2021 PERFORMANCE OVERVIEW: RELATIONSHIP CAPITAL

Customers

Customer-centricity is at the core of TCS business model, organization structure and investment decisions. The philosophy has been to delight them by delivering superior outcomes, and build strong, enduring relationships. Additionally, the company seeks to expand and deepen customer engagements by continually looking for new areas in the customers business where the company can add value, proactively invest in building newer capabilities, and launch new services and solutions to participate in those opportunities.

Client Metrics

Over time, this has resulted in an expanding participation in the departmental spends of a broad range of stakeholders across the enterprise, including business heads, CMOs, CROs, COOs, CFOs and even CEOs. It has also resulted in a continual expansion of customer relationships in terms of the services consumed, revenue and share of wallet, as evidenced by the movement in the large client metrics over the last 5 years.

TCS was ranked #1 in Customer Satisfaction across Europe for the eighth consecutive year in a large, independent survey of 1700 CxOs of top IT spending organizations by Whitelane Research. Additionally, in the individual country rankings, TCS was ranked #1 by customers in UK, France, Germany, Austria, Switzerland Netherlands, Belgium, Luxembourg and the Nordics.

Suppliers21

TCS Sustainable Supply Chain policy and Green Procurement policy outline its commitment to making its supply chain more responsible and sustainable. In FY 2021, the company integrated sustainability, safety and environmental requirements in its online vendor management system across the various stages of vendor lifecycle selection, review and renewal.

Supplier engagement includes defining product specifications on safety/environment, vendor compliance review, outlining mandatory policy and process requirements, desktop assessments, audits and performance review on these criteria. TCS responsible sourcing program encourages its suppliers to go beyond 100% regulatory compliance, and strive for better sustainability performance.

Investors

TCS is seen as a benchmark in transparency and disclosures, publicly communicating its longer-term strategy, qualitative aspects of the demand outlook, risks and opportunities. The company has a robust investor outreach program through which it engages with a broad range of investors domestically and overseas. These efforts towards removing information asymmetries and helping investors arrive at a fair valuation of the companys stock have resulted in TCS topping various regional investor polls conducted by publications such as Institutional Investor, FinanceAsia and AsiaMoney.

In FY 2021, TCS was quick to embrace virtual meetings for its investor outreach, including meetings, virtual NDRs and conferences. TCS was also the first corporate in India to hold a virtual Annual General Meeting last year.

The following table provides the number of investor and analyst interactions by category in FY 2021:

Particulars Q1 Q2 Q3 Q4 FY
2021
Meetings and Calls 59 29 38 95 221
Conferences 47 207 111 62 427
Sell Side Analysts 8 8 27 5 48
Total 114 244 176 162 696

Quarterly, half-yearly, and annual results are intimated to the stock exchanges, published in leading Indian newspapers, emailed to analysts and investors who subscribe to the service, and posted on the website. Half-yearly results are mailed to shareholders, along with a message from the MD on the Companys performance.

The quarterly earnings release is accompanied by a press conference, which is streamed live on www.tcs.com, and an earnings call that is webcast on the website. Material developments during the quarter that might impact revenue or earnings are intimated to the stock exchanges and through the website. Quarterly results, regulatory filings, transcripts of earnings call, Investor Relations presentations and schedules of analyst and investor interactions are available at https://www.tcs.com/ investor-relations

Brand Building

TCS marketing organization aims to elevate the relevance and vitality of the TCS brand, articulate and drive its purpose, deploy cutting-edge marketing technologies to enhance its targeting and amplification capabilities, enable sales, and promote sustainable practices. In FY 2021, TCS marketing organization quickly pivoted to meet the accelerated digital push during the pandemic and strengthened its growth and transformation positioning. Key highlights of the year are:

Full Pivot to Digital

Rapid shift to digital events Innovation Forums, industry events, client workshops, virtual client visits; 500+ events, 20,000 participants, 2,900 client and prospect accounts engaged

Digitally enabled customer engagement Full deployment of digital marketing for sales enablement, including 500+ campaigns in account-based marketing and 50,000 customer touch points

Enabled global marathons go virtual Virtual running apps, digital and physical running experiences created

Breaking out

Leading the narrative with thought leadership New Beginning, Vision 25X25, Secure Borderless Workspaces , Business 4.0

Launched the ‘Transforming India campaign Integrated campaign across digital and television with 1,700 spots; reached 1.6 million high affinity TV audiences; 111 million impressions garnered across digital platforms; over 1 million website clicks generated

Global Media Engagement Leading the conversation during the pandemic, positioning TCS as a thought leader in technology transformation. This resulted in a greater share of voice with over 50,000 mentions and 4,000 unique stories.

Social Media success The company used social media channels effectively to amplify its narratives. Its stakeholder engagement resulted in garnering over 5 million followers on LinkedIn, and 100 million organic impressions.

Driving Associate Engagement and Connect

Launched the #OneTCS platform: A medium to drive employee engagement, connection and motivation. An enterprise-wide, arts-driven talent hunt was launched; interviews and online interaction with celebrity sportspersons, lifestyle gurus to keep the #OneTCS platform vibrant for employees. There were 6.5 million unique engagements on this platform.

Townhalls, events, consistent multi-channel communication: These included celebrating milestones such as achieving the goal of Enterprise Agile by 2020, and 10,000 Contextual Masters

Pandemic communication with clarity to inform and connect: Welfare programs, COVID-19 response initiatives, structured employee well-being program via TCS Cares

Unique usage of external channels to drive employee engagement

Brand launch

TCS adopted a new brand statement, Building on Belief, to convey how its partnership with customers goes beyond technology deployment. It helps them make a meaningful difference, translating their aspiration into reality. The new statement conveys how TCS builds on their ambition and optimism to transform their business for the better, the impact of which is felt by their customers and the communities they serve. It also reflects TCS own belief that it, along with its customers, can harness collective knowledge to innovate in ways that result in better futures for individuals, communities and the planet.

Details of TCS new brand articulation and purpose can be found here: https://www.tcs.com/buildingonbelief.

Refer to the Panel Discussion on Building on Belief (Page 24), featuring N G Subramaniam, Chief Operating Officer, K Ananth Krishnan, Chief Technology Officer and Krishnan Ramanujam, President Business and Technology Services

Brand Value

TCS reputation for customer-centricity, domain depth and execution excellence have made it the preferred growth and transformation partner to leading corporations across the world. It is also recognized as a top employer brand across the major markets it operates in, including North America, Europe, UK, India, Latin America and Australia, among others.

Its purpose-driven community outreach and corporate social responsibility initiatives across the world have earned it local recognition and goodwill. The companys high standing in the investor community is evidenced by the top ranking it has been consistently receiving in surveys across Asia.

The cumulative effect of all the goodwill and recognition from these different stakeholders, and concerted efforts helped put TCS among the Top 3 brands in IT Services by brand value.

According to Brand Finance, TCS brand value grew by $1.4 billion in FY 2021 , the highest absolute growth among the 25 companies assessed, that too in a challenging year when the brand value of IT services companies collectively dropped by 3 percent. Further, at 10 percent growth over the prior year, TCS has outperformed its other two peers among the Top 3 brands in IT services.

Awards and Accolades for Relationship Capital

Partners

• Won the 2020 SAPR Pinnacle Award in the category Integrated Delivery Partner of the Year, in recognition of its outstanding contributions as an SAP partner, dedication to teamwork, innovative approach and capacity to challenge what is bythecompanysmarketingorganization have possible, in helping customers achieve their goals.

• Named the Global System Integrator of the Year 2020 by HPE in recognition of its outstanding performance, commitment to customer excellence, focus on growth, innovation, and professional achievements.

• Won 2020 Pega Partner Award for Excellence in Growth and Delivery for leveraging Pega technologies to drive successful digital transformation programs for joint clients in the insurance, manufacturing and telecommunications industries.

• Awarded the 2020 Canada IMPACT Award for Datacenter Migration by Microsoft Corporation for driving strong business outcomes for its customers, including enhanced security, increased agility, more resiliency, strong TCO benefits and improved governance through both repeatable solutions and transformational wins.

• Recognized by Amazon Web Services (AWS) as the 2020 AWS Migration Success Partner of the Year in India, for TCS commitment to excellence in helping customers successfully migrate and manage their core applications on the cloud.

• Recognized as a Solution Plus Partner by Intels Winners Circle Program, for contributions to the acceleration of #5G and virtual network transformation.

• Won the 2020 Salesforce Partner Innovation Award in the Media Industry category for helping Equifax UK deliver enhanced customer experiences,

Brand

• Ranked among the Top 3 brands in IT services by Brand Finance; TCS clocked the highest absolute brand value growth in the sector in 2020 and was named the fastest growing brand in the industry over the last decade (2010-2020).

• Named a Superbrand in the US and in the UK, on the strength of its brand reputation, business performance, industry-leading job creation, scale of employee training and development, and commitment to corporate social responsibility initiatives.

• Ranked among the Top 100 US brands, across all industries, by Brand Finance for the sixth year in a row. TCS was ranked #59, up two places from last year.

• Won 2 Stevies at the 2020 American Business AwardsR, for the 2019 TCS New York City Marathon app. TCS received a Gold StevieR in the category Mobile Marketing Campaign of the Year and a Silver Stevie in the category Best User Experience.

• Ranked at second place for the Analyst Relations Team of The Year award by the Institute of Industry Analyst Relations, based on their poll of over 100 top industry analysts.

• Listed among the Top 10 in five categories Customer Favourite, Best AR Team, Biggest Improver, Analyst Advocacy Award and Overall Champion, in a survey covering over 300 analysts globally, by The Analyst Observatory at the University of Edinburgh Business School. Notably, this is an unaided measure of analyst mindshare of the larger universe of software vendors, technology providers, hyperscalers, telecom companies and system integrators.

• Won the 2020 Gartner Communications Award in the category ‘Excellence in Building a Corporate Brand for its multi-phased communication strategy, centered around its Business 4.0 thought-leadership framework.

• TCS Transforming India campaign has won the Best Integrated Campaign Award - Gold at the Exchange4Media - India PR and Corporate Communications Conference 2020,

FY 2021 PERFORMANCE OVERVIEW: MANUFACTURED CAPITAL

With SBWS, TCS enabled most of its workforce to be fully productive while working remotely. Through out FY 2021, less than 4% of the workforce worked out of its facilities, mostly confined to very sensitive projects and activities such as R&D which necessarily require specialized equipment and controlled environments. To create a safe workplace for them, TCS deployed its IUX for Workplace Resilience solution which combines risk analytics with key business relaunch functions, including workforce safety, regulatory compliance, operational resilience, and customer engagement.

Its business command dashboard enables site administrators to monitor the daily risk profile and risk prediction for over 180,000 TCSers in India on a rolling seven, 14- and 21-day basis, easing workforce deployment planning. Based on the daily risk scores, site administrators could decide which of the employees could be safely allowed to return to work, if required.

Additionally, to ease the pressure on strained local medical infrastructure and help TCSers and their families safely quarantine themselves in the event of testing positive to the virus, TCS built 11 Covid Health Centers across various cities at its campuses, with a cumulative capacity of 240 beds.

Looking ahead, TCS Vision 25x25 envisages a verydifferentrolefortheoffice, to serve as physical hubs for collaboration, innovation and team building, while routine work can get done from anywhere. Towards this, the company has already built Incubation Development Centers at some of its locations, which will be further refined to align with business requirements. These locations are going to be Open Agile Collaborative Workspaces with Software Defined Network rolled out in a phased manner. This will give the teams mobility, flexibility and seamless collaboration environments for their business functions. TCS is also planning to consolidate old leased, non-agile and smaller vintage facilities to new owned campuses, optimizing its operational expenses.

FY 2021 PERFORMANCE OVERVIEW: FINANCIAL CAPITAL22

The discussions in this section relate to the consolidated, Rupee-denominated financial results pertaining to the year that ended March 31, 2021. The financial statements of Tata Consultancy Services Limited and its subsidiaries (collectively referred to as ‘TCS or ‘the Company are prepared in accordance with the Indian Accounting Standards (referred to as ‘Ind AS) prescribed under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the consolidated financial

The following table gives an overview of the consolidated financial results of the Company:

Rs
FY 2021 Adjusted* FY 2021 Reported FY 2020
Revenue % of Revenue % Growth Revenue % of Revenue Revenue % of Revenue
Revenue from operations 164,177 100.0 4.6 164,177 100.0 156,949 100.0
Earnings before interest, tax, 46,546 28.4 10.5 45,328 27.6 42,109 26.8
depreciation and amortization
(EBIDTA) (before other income)
Profit Before Tax (PBT) 44,978 27.4 6.5 43,760 26.7 42,248 26.9
Profit after tax attributable to 33,388 20.3 3.2 32,430 19.8 32,340 20.6
shareholders of the Company
Earnings per share (in Rs) 89.27 3.6 86.71 86.19

* Excluding provision towards legal claim

Analysis of revenue growth

On a reported basis, TCS revenue grew 4.6% in FY 2021, compared to 7.2% in the prior year, due to the sharp revenue reduction in the first quarter across industry segments from the pandemic impact.

Average currency exchange rates during FY 2021 for . the three major currencies are given below:

Currency Weightage FY 2021 FY 2020 % Change
(%) Rs Rs YoY
USD 52.0 74.06 71.23 4.0
GBP 13.5 97.32 90.15 8.0
EUR 12.0 86.69 78.94 9.8

Movements in currency exchange rates through the year resulted in a positive impact of 5.4% on the reported revenue. The constant currency revenue growth for the year, which is the reported revenue growth stripped of the currency impact, was (0.8)%.

Growth attributable to FY 2021 (%) FY 2020 (%)
Business growth (0.8) 7.1
Impact of Exchange rate 5.4 0.1
Total Growth 4.6 7.2

Segment revenues, year on year growth, a brief commentary and segment margins are provided below:

Industry Vertical Segment Revenue FY 2021 (FY 2020) Rs crore YoY Revenue Growth % Commentary Segment Margin FY 2021 (FY 2020) %
Banking, Financial Services and Insurance 65,634 (61,095) 7.4 Key investment themes included customer experience transformation; future readiness through core transformation including platform simplification and modernization and cloud adoption; optimization of back office operations. Other key areas of spend included adoption of payments, robo-advisory systems and crypto-custody solutions 28.5 (27.7)
Communication, Media and Technology 27,077 (25,978) 4.2 Market reform such as CAT, LIBOR Transition, SFTR, BREXIT also drove significant spend especially around the use of predictive analytics, AI, NLP and automation. Parts of the Media sub-vertical, related to live sports, events, entertainment and radio were affected by the pandemic. Key investment themes included 5G and fiber rollout, network virtualization, operating model transformation, product and platform engineering, business simplification, data and analytics and cloud enablement. M&A and business separation activities was another key driver of spend. 29.6 (29.7)
Retail and Consumer Business 25,589 (26,280) (2.6) Retail and CPG Discretionary retail and some parts of CPG were impacted by the pandemic. Spending was driven by transformation in Demand Planning, Forecasting and Replenishment to ensure continuous availability of high demand essential items; unified customer experience across channels, contactless pick-up / payment, curbside pickups etc; D2C and e-commerce initiatives in CPG. 27.9 (26.1)
Rs Travel, Transportation & Hospitality The sector was badly impacted by pandemic restrictions. Key investment themes include contactless operations and self-service, operating model changes, and simplification.
Manufacturing 15,950 (16,468) (3.1) Large parts of the manufacturing sector were impacted badly by the plant closures and supply chain disruptions. This resulted in postponements in capex and discretionary programs. Key spending themes included IT infrastructure and movement to the cloud, Plant safety and industrial applications such as remote asset management, IT security, Supply chain resilience, in-vehicle software, connected products. 28.1 (27.0)
In the Utilities sub-vertical, key areas of spend included geospatial systems, customer service, and operational resilience and optimization.
Others 29,927 (27,128) 10.3 Growth in the Life Sciences segment was led by pandemic related initiatives such as adverse event processing for the vaccine, M&A synergies through IT integration, digital marketing and analytics, IT operating model transformation, cloud enablement, workplace modernization and cybersecurity. Key areas of spend across other verticals included M&A, cloud adoption, cyber security, operations optimization and vendor consolidation 27.5 (22.6)

Business Outlook

Global economic growth is projected to grow at 6 percent23 in 2021 after an estimated contraction of 3.3 percent in 2020. While there is still uncertainty on the path of the health crisis, with likelihood of third or fourth waves, and the emergence of new strains of the virus, overall business outlook across industries appears to be positive in all of TCS major markets. This is expected to result in an expansion in enterprise spending on IT services globally, following a decline in 2020.

TCS anticipates increased investments by customers in growth and transformation initiatives that deepen customer engagement, enable competitive chain resilience and drive revenue growth. Common investment themes that are expected to accelerate across all industry verticals in FY 2022 are: data-driven customer journey transformations spanning front-, middle- and back-office processes and systems to enable enhanced and personalized customer experiences; digital enablers for direct distribution and end-customer engagement; seamless, personalized omnichannel experiences in consumer-facing industries; product and business model innovations; and adoption of open APIs to enable purpose-driven ecosystems.

Increased activity around mergers, acquisitions and divestitures are expected to drive more opportunities around integration and transitional services. Other industry-specific themes such as regulatory compliance in the banking and financial services domains, supply chain transformation in manufacturing, and connected vehicles in the auto sector are also expected to drive growth. TCS also expects increasing focus on longer term sustainability initiatives across industries, focused on leveraging technology to reduce emissions, wastes and resource consumption.

Core transformation initiatives designed to build a scalable, adaptive, future-ready digital core are also expected to accelerate in FY 2022. TCS anticipates increased spending on business operations transformation using TCS Cognix ; legacy system transformation including application architecture and data modernization; cloud adoption; intelligent automation; cyber-security; IT operating model transformation using a Machine First approach for leaner and more agile operations; and digital workplace transformation for enhanced user experience and superior collaboration. The need for optimization and for freeing up resources for high priority transformation initiatives is also expected to result in more outsourcing engagements and vendor consolidation, helping drive market share gains.

Enterprise Risk Management

The COVID-19 pandemic continues to challenge businesses in every possible way and has amplified existing risks. Operating in an uncertain and ever-changing environment, TCS global operations bring in considerable complexities and its robust enterprise risk management framework aids in ensuring the strategic objectives are achieved. This framework is supported by processes for risk identification, risk assessment, risk response planning and actions, risk monitoring and overall risk governance. The digital platform for integrated risk management provides an enterprise-wide view of risks covering strategic, operational, compliance, financial and catastrophic risks, providing a holistic approach towards informed decision making. Risks are assessed and managed at various levels with a top-down and bottom-up approach covering the enterprise, the business units, the geographies, the functions, the customer relationships and projects.

23 World Economic Outlook, April 2021, International Monetary Fund

Listed below are some of the key risks, anticipated impact on the Company and mitigation strategies.

Key Risks Impact on the Company Mitigation
Disruption and Uncertainty in Business due to the Customers: The COVID-19 pandemic extending into the second year has resulted in changes in consumer behaviors, impacting demand COVID-19 Emergency Response Apex committee at Enterprise level to drive a holistic action plan and coordinate global efforts, based on frequent risk assessments.
COVID-19 pandemic in various industries, hurting small businesses and necessitating large fiscal interventions. Tapering off of these interventions, or the emergence of new variants which trigger new lockdowns and other restrictions could disrupt the return to normalcy and impact customers short-term priorities, growth plans and discretionary budgets. It could also result in restructuring of some contracts, deferment, cancellation of some planned engagements besides other tactical steps such as vendor rationalization, or insourcing of work to captives, impacting the companys revenue growth. Secure Borderless WorkSpaces (SBWSTM) infrastructure enabling associates to work from home and ensure business continuity. Digital communication channels and collaboration platforms set
up for them to stay connected with colleagues and customers.
Regular communication with customers about measures taken to maintain business services and reporting of their operations status.
Pursuing new and re-purposed offerings and solutions during and post the COVID-19 disruption.
Regular coordination with key suppliers for expeditious provisioning of assets critical for business services
Mobility:
Due to new strains of COVID-19 and increasing trend in infection cases globally, business disruptions due to 24*7 dedicated helpline for associates to address COVID-19 related help, queries and for emotional support. Regular webinars, interactive sessions, counseling services (TCS Cares), medical hotline to doctors and fitness sessions for associates. Isolation Centers setup in
intermittent lockdowns, international travel restrictions are likely, impacting the mobility of the companys workforce es. Offic 11TCS
required to travel for work purposes, which in turn may impact service delivery and revenues. Periodic advisories to associates towards ensuring health and safety.
Workforce: SOP for operating TCS Offices including implementing Safe Operating Zones for associates required to work from office, thermal screening, self-declaration, frequent sanitization of premises, social distancing layout etc. AI-based Workplace resilience tool implemented in Delivery Centers to aid in risk profiling and contact tracing.
The continuing pandemic may affect not only the health of affected employees, but also their emotional and mental wellbeing, due to physical isolation for a long period. If large numbers of employees are affected, it could result in business disruption and necessitate higher spends for ensuring business resiliency. There could be hesitation to come back to office in the near future from employees who have been working remotely from their hometowns. This may impact employee morale and satisfaction leading to the risk of higher attrition. Rigorous review and execution of Business Continuity and Crisis Management capability which is benchmarked with ISO 22301certification.
Remote working practices for managers and employees integrated into the Location Independent Agile delivery method, to ensure effectiveness and productivity.
However, the companys relative competitiveness is expected to increase because of its traditional value focus and its strong track record in helping customers improve the efficiency and Regular connect with Government and Health service providers to facilitate planning for logistics and arrangements for vaccination of employees as required.
resilience of their business and IT operations through digital transformation initiatives and the Machine First Delivery ModelTM. Encouraging associates to get vaccinated, including facilitation and reimbursement. Monitoring changes in regulations related to the impact due to pandemic and align internal policies accordingly.
Volatile global political and economic scenario The Company derives a material portion of its revenues from customers discretionary spending which is linked to their business outlook. Political disruptions or volatile economic Broad-based business mix, well diversified across geographies and industry verticals.
conditions due to geo-political tensions, trade wars, and uncertainty regarding post-Brexit impacts on different business sectors may adversely affect that outlook resulting in reduced spending which could restrict revenue growth opportunities. Offerings and value propositions targeting all stakeholders (in addition to the CIO) in the customer organization, covering discretionary as well as non-discretionary spends, and relevant at every point in the business cycle.
Participating in the customers growth and transformation initiatives through services and offerings including advisory services, migration and modernization of applications and workplace transformation using location independent agile, deep contextual knowledge and data-driven analytics and dashboards.
Proactively investing in infrastructure and resourcing to satisfy anticipated customer demand for flexible products-and-platforms based solution offerings and subscription-based services to gain market share and new clients and markets.
More long-term contracting models.
Leveraging business ecosystem through collaboration with partners, startups and alliances to participate in transformation initiatives of customers.
Restrictions on global mobility, location strategies Distributed software development models require the free movement of people across countries and any restrictions in key markets pose a threat to the global mobility of skilled professionals. Ongoing monitoring of the global environment, working with advisors, partners and governments.
Material reduction in dependency on work visas through increased hiring of local talent including freshers, use of contractors, local mobility and training in all major markets.
Restrictions on mobility due to the pandemic, or due to legislations which limit the availability of work visas or which apply onerous eligibility criteria or costs could lead to project delays and increased costs. Leveraging the SBWSTM model to source talent from anywhere and deliver from anywhere.
Use of Location Independent Agile to promote systematic collaboration and reduce the need for co-location.
Active engagement in Science, Technology, Engineering and Math (STEM) initiatives designed to structurally increase the availability of engineering talent in major markets. Greater brand visibility through event sponsorships, community outreach, showcasing of investments, innovation capabilities and employment generation.
Increased outreach to government stakeholders, trade bodies, think tanks and research
institutes.
Business model Rapidly evolving technologies are changing technology erentiated capabilities on emerging technologies through diff Investmentsinbuildingscaleand
challenges consumption patterns, creating new classes of buyers within the enterprise, giving rise to entirely new business models and therefore new kinds of competitors. large scale reskilling, external hiring, research and innovation, solution development and IP asset creation leveraging deep contextual knowledge across customer specific domain, technologies and processes.
The COVID-19 pandemic has resulted in a major acceleration of technology investments by customers to make themselves future-proof and also to power the revival of their business. Establishment of focused business service units providing end-to-end transformational and operational solutions on leading cloud technology platforms spanning advisory, migration and modernization and support of applications.
This investment shift is targeted to deliver superior customer experience or improve their employee engagement or improve their operational resilience. There is a major shift towards public cloud adoption and cloud-based transformation initiatives as well as digitalization of legacy applications. Staying relevant to customers by constantly launching new service practices and technology solutions including a new AI-Powered business command solution to help firms assess risk profiles and protect employees returning to offices and modernizing existing offerings and solutions.
This is resulting in increased demands on the Companys agility to keep pace with the rapidly changing customer expectations. Developing capabilities in organization divestiture and integration planning to cater to Merger and Acquisition induced demand for advisory and business consolidation related services.
Failure to cope may result in loss of market share and impact business growth. Thought leadership by propagating the Business 4.0 framework leveraging the Machine First Delivery Model (MFDM ). Developing industry-specific best practices and AI-led Products to enable customers derive greater business value and discover opportunities to transform and grow their businesses.
There is also increased focus on vendor consolidation and corporate restructuring and mergers and acquisitions in some customer industries. Implementing Location Independent Agile methods to mitigate location constraints and pricing and margin pressures.
Constant scouring of the technology landscape through alliance partnerships, and strong connections in academia and the start-up ecosystem to spot new trends and technologies and launch offerings around them.

Litigation risks Given the scale and geographic spread of the Companys Strengthening internal processes and controls to adequately ensure compliance with contractual operations, litigation risks can arise from commercial disputes, obligations, information security and protection of intellectual property. perceived violation of intellectual property rights and

Improved governance and controls over immigration process / increasing localization and employment related matters. Its rising profile and scale also sensitization of business managers. make TCS a target to litigations without any legal merit. This risk is inherent to doing business across the various countries Potential disputes are promptly brought to the attention of management and dealt with and commensurate with risk faced by other players similarly appropriately. placed in the industry. In addition to incurring legal costs and distracting management, litigations garner negative media Team of in-house counsels, backed by tie-ups with a network of highly reputed global law firms attention and pose reputation risk. Adverse rulings can result in in all the major markets. substantive damages. Robust mechanism to track and respond to notices as well as defend the Companys position in all claims and litigation.

Currency volatility Volatility in currency exchange movements results in Following a currency hedging policy that is aligned with market best practices, to limit impact of transaction and translation exposure. TCS functional currency exchange volatility on receivables, forecasted revenue and other current assets and liabilities is the Indian Rupee. Appreciation of the Rupee against any

Hedging strategies are decided and monitored by the Risk Management Committee of the major currency could impact the reported revenue in Rupee Board convened on a regular basis. terms, the profitability and also result in collection losses.

Breach of data Data Privacy and protection of personal data is an area of Global privacy policy in place covering all applicable geographies and areas of operations, which protection laws increasing concern globally. Legislations like GDPR in Europe sets out the privacy principles within TCS. carry severe consequences for non-compliance or breach.

Global privacy policy in place to oversee and deploy data privacy obligations and support Many other countries have enacted or are enacting their initiatives across the enterprise. DPOs (Data Protection Officers) have been appointed for Data Privacy regulations to ensure protection of personal TCS entities as required by local privacy regulations. Privacy leads have been appointed in all data. Violation of data protection laws or security breaches units. can result in substantive liabilities, fines or penalties and reputational impact. Embedding privacy by design and privacy by default principles in development of new or changed internal processes or services or products. Robust and continued governance of personal data.

Data protection controls and robust risk response mechanisms to cater to protection of personal data in the TCS ecosystem as well as protection of such data in Client-managed networks in Global Delivery Centers.

Integrated Annual Report 2020-21 Management Discussion and Analysis : 135

Industry standard data masking technologies to protect personal data in sensitive customer engagements, as applicable.
Review and sign-off of Data Processing Agreement (DPA) with Vendors and Third parties and their tracking for privacy compliance, where required.
Mandatory online training and other workshops on data privacy and protection and on GDPR. Awareness campaigns through blog posts, email broadcasts, gamification, roadshows and online events.
Implementing and maintaining data transfer agreements, where required for the transfer of data across jurisdictions.
Cyber Attacks Risks of cyber-attacks are forever a threat on account of the fast-evolving nature of the threat. There is also an increased risk due to various pandemic themed cyber threats. Periodic reviews and audits by independent audit firm to verify compliance to obligations. Investments in automated prevention and detection solutions, including Perimeter security controls with advanced tools, enhanced internal vulnerability detection, data leak prevention tools, defined and tested incident management and recovery process in compliance with ISO 27001 standard.
In addition to impact on business operations, a security breach could result in reputational damage, penalties and legal and financial liabilities. Deployment of a security governance tool on all devices used by employees while working remotely, to monitor the work and ensure compliance to company security policies and contractual obligations.
Compliance to security controls for cloud services as per ISO 27017:2015 / 27018:2014 standard.
Continued reinforcement of stringent security policies and procedures including enhanced security measures and awareness building to combat pandemic-themed threats like phishing, soliciting for fraudulent causes or charities, suspicious pleas and communication through social media, text or calls.
Collaboration with Computer Emergency Response Team (CERT) and other private Cyber Intelligence agencies, and enhanced awareness of emerging cyber threats.
Enterprise-wide training and awareness programs on Information Security including the extensively used enterprise-wide communication and collaboration platforms accessed through mobile or desktop channels.
Strict access controls including dynamic passwords for secure access to enterprise applications and special handling of privileged administrator accounts. Rigorous access management on all Cloud deployments.
Encryption of data, data back-up and recovery mechanisms for ensuring business continuity.
Ability to isolate TCS enterprise network from client network and defined escalation mechanisms to handle security incidents in client environment.
Periodic rigorous testing to validate effectiveness of controls through Vulnerability Assessment and Penetration Testing.
Internal and external audits and forensics.
Non-compliance to complex and changing global regulations As a global organization, the Company has to comply with a complex regulatory landscape across multiple jurisdictions, covering areas such as Employment and Labour, Immigration, Taxation, Foreign Exchange and Export Control, Environment, Health and Safety, Anti-Bribery and Anti-Corruption, Data Privacy and so on. Deployment of a comprehensive global compliance management framework that enables tracking of changes to applicable laws and regulations across various jurisdictions and functional areas and managing compliance obligations. This includes those laws and provisions specially enacted directly to cater to the pandemic impacts.
The laws and regulations are continuously evolving, increasing in number and complexity. This has resulted in greater compliance risk and cost for the Company. Periodic regulatory compliance certification, which is fully digitized enables self-governance and covers compliance across all the locations of the Company.
Adequate and effective internal controls to comply with regulations and to keep a check on unlawful and fraudulent activities.
The fast pace of changes in the regulatory environment, including those due to the pandemic, also requires quick understanding of their implications and adaptation in business operations. Failure to comply could result in penalties, reputational damage and criminal prosecution. Awareness through web-based compliance training courses for all staff and regular notifications/ alerts on regulatory changes communicated to stakeholders. Strong governance at executive and board level through compliance committees.
Intellectual Property (IP) infringement and leakage Risk of infringement of third-party IPs by TCS may lead to potential liabilities, increased litigation and impact reputation. Inadequate protection of TCS IP may lead to loss of IP leading to potential loss of ownership rights, revenue and value. Established an industry leading IP management framework (IP 4.0) and accordingly have institutionalized frameworks, processes and procedures that address the risk of infringement of third-party IP while ensuring safeguarding of TCS own IP assets. This strong focus on IP-led growth driven based on the 3P (Patents, Products and Platforms) strategy is contributing significantly towards thinning the competition for TCS.
Established a centralized IP and Software Product Engineering group that strives to build an IP thinking culture and hence covering the IP related awareness aspects effectively.
Well-defined (software) asset lifecycle governance framework that incorporates policy guidance and risk mitigation guidelines on IP, Legal, software product engineering and business-related risks.
IP Governance program that ensures that there is right access and right use of TCS IP, customer IP, partner IP, and third-party IP in service and partner engagements.
Some of the other key controls include: Employee confidentiality agreement, training and awareness for IP protection and prevention of IP contamination and infringement. Digitized system to enable strict controls around movement of people and information across TCS product teams and customer account teams.
Technology inventions celebrated in TCS by running special programs such as “Invent and Inspire” wherein top inventors and their invention stories are recognized for their success and impact on business.
Sustainability Risks - Climate change and Environmental aspects Growing scientific evidence indicates that extreme weather conditions like intense winter storms (recent event in Texas for example), rainfall, cyclones, droughts, are attributable to climate change. As a result of changing weather and seasonal patterns, there are also increasing cases of seasonal diseases, epidemics and pandemics besides threat to human safety and business disruption. An environmentally sustainable approach adopted by creating green policies, processes, frameworks and infrastructure. All TCS Centers globally continue to be certified under the ISO14001:2015 Environment Management Standard.
Designed and planned all delivery centers infrastructure to have minimum impact upon occurrence of any extreme weather events. Business Continuity plans tested periodically to ensure effectiveness in the event of disaster. Mass communication infrastructure to reach targeted set employees used effectively multiple times last year due to pandemic and extreme weather conditions.
As TCS has operations globally with employees distributed across numerous locations due to remote working, these sustainability related risks, if not managed properly, have the potential to impact delivery operations and safety of TCS stakeholders resulting in business disruption. Focus on Carbon footprint reduction, through energy efficiency, use of renewable energy, water management through rainwater harvesting, recycling and waste management. Centralised IoT based Remote Energy Management System across TCS campuses, Roof Top Solar Power Plants in campuses.
Market dimension and opportunity:
As TCS customers respond to climate change actions, the company is seeing a transition in the customers business models, thus creating new markets and new opportunities, creating new business avenues for TCS to partner with them in their climate change mitigation journey by leveraging its core competencies. Driving supply chain sustainability through responsible sourcing.
Year-round associate engagement on environmental awareness and sensitizing them towards nature and conservation of resources.
Market dimension and opportunity:
Consumer behaviors are shaping how products and services are delivered and consumed. Low carbon strategies by consumers and hence increasing demand for more sustainable products and services, present an opportunity for the company.
TCS key solution areas revolve around designing sustainability strategy, sustainability innovation, sustainable consumer analytics and sustainable dashboards. Various TCS products and solutions facilitate alignment to the UN Sustainable Development Goals. TCS works closely with its customers in coming up with innovative solutions leveraging AI, ML, NLP, Cloud and DLT to manage the range of risks and opportunities climate change brings along.

Internal Financial Control Systems and their Adequacy

TCS has aligned its current systems of internal financial control with the requirement of Companies Act 2013, on the lines of the globally accepted risk-based framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. The Internal Control Integrated Framework (the 2013 framework) is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness.

TCS internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. TCS has a well-defined of power with authority limits for approving contracts as well as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down. TCS uses a state-of-the-art enterprise resource planning (ERP) system that connects all parts of the organization, to record data for accounting, consolidation and management information purposes. It has continued its efforts to align all its processes and controls with global best practices.

TCS management has assessed the effectiveness of the Companys internal control over financial reporting (as defined in Clause 17 of SEBI Regulations 2015) as of March 31, 2021.

BSR & Co. LLP, the statutory auditors of TCS have audited the financial statements included in this integrated annual report and have issued an attestation report on the companys internal control over financial reporting (as defined in section 143 of Companies Act 2013).

TCS has appointed Ernst & Young LLP to oversee and carry out internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditors and approved by the audit committee. In line with international practice, the conduct of internal audit is oriented towards the review of internal controls delegation and risks in the Companys operations such as software delivery, accounting and finance, procurement, employee engagement, travel, insurance, IT processes, including most of the subsidiaries and foreign branches.

TCS also undergoes periodic audit by specialized third party consultants and professionals for business specific compliances such as quality management, service management, information security, etc. The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets TCS statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically.

Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), TCS audit committee has concluded that, as of March 31, 2021, the companys internal financial controls were adequate and operating effectively.

Performance Trend 10 years

Amounts in Rs Crore
Ind AS Indian GAAP
FY 2021* FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 FY 2015# FY 2015 FY 2014 FY 2013 FY 2012
Revenue from operations
Total revenue from operations 164,177 164,177 156,949 146,463 123,104 117,966 108,646 94,648 94,648 81,809 62,989 48,894
Revenue by geographic segments
Americas 84,278 84,278 82,000 77,562 66,145 66,091 60,011 51,053 51,053 45,259 35,247 27,570
Europe 52,346 52,346 48,037 43,456 34,155 30,038 29,092 26,730 26,730 23,433 16,813 12,382
India 8,449 8,449 8,964 8,393 7,921 7,415 6,729 6,108 6,108 5,488 4,890 4,202
Others 19,104 19,104 17,948 17,052 14,883 14,422 12,814 10,757 10,757 7,629 6,039 4,740
Cost
Employee cost 91,814 91,814 85,952 78,246 66,396 61,621 55,348 48,296 50,924 40,486 31,922 24,683
Other operating cost 25,817 27,035 28,888 28,711 24,192 24,034 22,621 19,242 19,242 16,170 13,027 9,776
Total cost (excluding interest & depreciation) 117,631 118,849 114,840 106,957 90,588 85,655 77,969 67,538 70,166 56,656 44,949 34,459
Profitability
EBITDA (before other income) 46,546 45,328 42,109 39,506 32,516 32,311 30,677 27,110 24,482 25,153 18,040 14,435
Profit before tax 44,978 43,760 42,248 41,563 34,092 34,513 31,840 28,437 25,809 25,402 18,090 13,923
Profit after tax attributable to shareholders of the
Company 33,388 32,430 32,340 31,472 25,826 26,289 24,270 21,912 19,852 19,164 13,917 10,413
Financial Position
Equity share capital 370 370 375 375 191 197 197 196 196 196 196 196
Reserves and surplus 87,014 86,063 83,751 89,071 84,937 86,017 70,875 52,499 50,439 48,999 38,350 29,284
Gross block of property, plant and equipment 28,658 28,658 26,444 24,522 22,720 20,891 19,308 16,624 16,624 13,162 10,996 8,844
Total investments 29,373 29,373 26,356 29,330 36,008 41,980 22,822 1,662 1,662 3,434 1,897 1,350
Net current assets 66,076 65,125 63,177 70,047 63,396 65,804 47,644 30,726 28,495 27,227 19,734 12,673
Earnings per share in Rs
EPS - as reported 89.27 86.71 86.19 83.05 134.19 133.41 123.18 111.87 101.35 97.67 70.99 53.07
EPS - adjusted for Bonus Issue 89.27 86.71 86.19 83.05 67.10 66.71 61.59 55.94 50.68 48.84 35.50 26.54
Headcount (number)
Headcount (including subsidiaries) as on March 31st 488,649 488,649 448,464 424,285 394,998 387,223 353,843 319,656 319,656 300,464 276,196 238,583

Note : The company transitioned into Ind AS from April 1, 2015. *Excluding provision towards legal claim.

# Excluding the impact of one-time employee reward.

Overview of Funds Invested

Funds invested exclude earmarked balances with banks and equity shares measured at fair value through other comprehensive income.

(Rs Crore)
FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020
Current Non-current Total funds invested
Investments in mutual funds, Government securities and others 29,160 26,140 175 174 29,335 26,314
Deposits with banks 3,848 1,210 719 348 4,567 1,558
Inter-corporate deposits 11,229 8,171 27 27 11,256 8,198
Cash and bank balances 5,272 8,241 - - 5,272 8,241
Total 49,509 43,762 921 549 50,430 44,311

Total invested funds include Rs1,306 crore and Rs1,195 crore for FY 2021 and FY 2020, respectively, pertaining to trusts and TCS Foundation held for specified purposes.

Ratio Analysis 10 years

Ratio Analysis Ind AS Indian GAAP
Units FY 2021* FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 FY 2015# FY 2015 FY 2014 FY 2013 FY 2012
Ratios - Financial Performance
Employee Cost / Total Revenue % 55.9 55.9 54.8 53.4 53.9 52.2 50.9 51.0 53.8 49.5 50.7 50.5
Other Operating Cost / Total % 15.7 16.5 18.4 19.6 19.7 20.4 20.9 20.4 20.3 19.8 20.7 20.0
Revenue
Total Cost / Total Revenue % 71.6 72.4 73.2 73.0 73.6 72.6 71.8 71.4 74.1 69.3 71.4 70.5
EBITDA (Before Other Income) / % 28.4 27.6 26.8 27.0 26.4 27.4 28.2 28.6 25.9 30.7 28.6 29.5
Total Revenue
Profit Before Tax / Total Revenue % 27.4 26.7 26.9 28.4 27.7 29.3 29.3 30.0 27.3 31.1 28.7 28.5
Tax / Total Revenue % 7.0 6.8 6.2 6.8 6.7 6.9 6.9 7.2 6.6 7.4 6.4 7.0
Effective Tax Rate - Tax / PBT % 25.5 25.6 23.2 24.1 24.1 23.6 23.6 23.5 23.7 23.9 22.2 24.4
Profit After Tax / Total Revenue % 20.3 19.8 20.6 21.5 21.0 22.3 22.3 23.2 21.0 23.4 22.1 21.3
Ratios - Growth
Total Revenue % 4.6 4.6 7.2 19.0 4.4 8.6 14.8 15.7 15.7 29.9 28.8 31.0
EBITDA (Before Other Income) % 10.5 7.6 6.6 21.5 0.6 5.3 25.3 7.8 (2.7) 39.4 25.0 29.1
Profit After Tax % 3.2 0.3 2.8 21.9 (1.8) 8.3 22.3 14.3 3.6 37.7 33.6 14.8
Ratios - Balance Sheet
Debt-Equity Ratio Times - - - - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Current Ratio Times 3.0 2.9 3.3 4.2 4.6 5.5 4.1 3.9 2.4 2.7 2.7 2.2

Note : The company transitioned into Ind AS from April 1, 2015. *Excluding provision towards legal claim.

# Excluding the impact of one-time employee reward.

Ratio Analysis Ind AS Indian GAAP
Units FY 2021* FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 FY 2015# FY 2015 FY 2014 FY 2013 FY 2012
Days Sales Outstanding (DSO) in Days 67 67 71 68 74 70 81 79 79 81 82 86
Rs terms
Days Sales Outstanding (DSO) in Days 68 68 67 69 74 73 80 78 78 82 82 81
$ terms
Invested Funds / Capital Employed % 52.6 53.1 47.7 55.2 55.6 55.8 45.8 42.3 43.9 44.0 37.2 35.6
Capital Expenditure / Total % 1.9 1.9 2.0 1.5 1.5 1.7 1.8 3.1 3.1 3.8 4.2 4.1
Revenue
Operating Cash Flow / Total % 23.6 23.6 20.6 19.5 20.4 21.4 17.6 20.5 20.5 18.0 18.4 14.3
Revenue
Free Cash Flow / Operating Cash % 91.9 91.9 90.5 92.5 92.8 92.3 89.7 84.8 84.8 78.9 77.3 71.5
Flow Ratio
Depreciation of Property, Plant % 8.7 8.7 8.6 8.5 9.1 9.5 10.0 11.7 11.7 10.6 10.2 10.7
and Equipment (PPE) / Average
Gross Block of PPE
Ratios - Per Share
EPS - adjusted for Bonus Rs 89.27 86.71 86.19 83.05 67.10 66.71 61.59 55.94 50.68 48.84 35.50 26.54
Price Earning Ratio, end of year Times 35.6 36.6 21.2 24.1 21.2 18.2 20.4 22.8 25.1 21.8 22.1 22.0
Dividend Per Share Rs 38.00 38.00 73.00 30.00 50.00 47.00 43.50 79.00 79.00 32.00 22.00 25.00
Dividend Per Share - adjusted for Rs 38.00 38.00 73.00 30.00 25.00 23.50 21.75 39.50 39.50 16.00 11.00 12.50
Bonus
Market Capitalisation / Total Times 7.2 7.2 4.4 5.1 4.4 4.1 4.6 5.3 5.3 5.1 4.9 4.7
Revenue

Note : The company transitioned into Ind AS from April 1, 2015. *Excluding provision towards legal claim.

# Excluding the impact of one-time employee reward.