From Published Accounts

Section A: 

Disclosures in financial statements regarding Transition
to IndAS

Tata Consultancy Services Ltd. (31-3-2017)

From  Notes 
forming   part  of 
financial statements (unconsolidated)

3. Explanation of Transition to Ind AS

The transition as at April 1, 2015 to Ind AS was carried out
from Previous GAAP. The exemptions and exceptions applied by the Company in
accordance with Ind AS 101- First-time Adoption of Indian Accounting Standards,
the reconciliations of equity and total comprehensive income in accordance with
Previous GAAP to Ind AS are explained below.

Exemptions from retrospective application:

The Company has applied the following exemptions:

(a) Investments in subsidiaries, joint ventures
and      associates

      The Company has elected to adopt the
carrying value under Previous GAAP as on the date of transition i.e. April 1,
2015 in its separate financial statements.

(b) Business combinations

   The Company has elected to apply Ind AS
103 – Business Combinations retrospectively to past business combinations from
April 1, 2013.

Reconciliations between Previous GAAP and Ind AS    

(Rs. Crore)

(iii)   Reconciliation of Statement Cash Flow

       There are no material adjustments to the
Statements of Cash Flow as reported under the Previous GAAP.

Notes to reconciliations between Previous GAAP and Ind AS

(a)    Dividend
(including dividend tax)

        Under Ind AS, dividend to holders of
equity instruments is recognised as a liability in the year in which the
obligation to pay is established. Under Previous GAAP, dividend payable is
recorded as a liability in the year to which it relates. This has resulted in an
increase in equity by Rs. 6,403 crore and Rs. 5,724 crore (including dividend
declared by CMC Limited) as at March 31, 2016 and April 1, 2015 respectively.

(b)    Depreciation        

        In April 2014, the Company revised its
method of depreciation from written down value to straight-line basis. This
change in method was retrospectively adjusted in accordance with the Previous
GAAP. Under Ind AS, the Company has elected to apply Ind AS 16-Property, plant
and equipment from the date of acquisition of property, plant and equipment and
accordingly the change in method has been prospectively applied as a change in
estimate. This has resulted in a decline in equity under Ind AS by Rs. 440 crore,
and Rs. 537 crore as at March 31, 2016, and as at April, 2015 respectively, and
increase in net profit by Rs. 97 crore for the year ended March 31, 2016.

(c)    Fair valuation of investments       

        Under Previous GAAP, current investments
were measured at lower of cost or fair value 
and long term investments were measured at cost less diminution in value
which is other than temporary, under Ind AS Financial assets other than
amortised cost are subsequently measured at fair value.

        The Company holds investment in
government securities with the objective of both collecting contractual cash
flows which give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding and selling
financial assets. The Company has also made an irrevocable election to present
in other comprehensive income subsequent changes in the fair value of equity
investments not held for trading. This has resulted in increase in investment
revaluation reserve by Rs. 82 crore, and increase in investment revaluation
reserve by Rs. 4 crore as at March 31, 2016 and April 1, 2015 respectively.

        Investment in mutual funds have been
classified as fair value through statement of profit and loss and changes in
fair value are recognised in statement of profit and loss. This has resulted in
increase in retained earnings of Rs.1 crore, and Rs. 5 crore as at March 31,
2016 and April 1, 2015 respectively, increase in net profit by Rs. 3 crore for
the year ended March 31,2016.

(d)    Tax
adjustments

        Tax adjustments include deferred tax
impact on account of difference between Previous GAAP and Ind AS. These
adjustments have resulted in an increase in equity under Ind AS by Rs. 101
crore and Rs. 133 crore as at March 31, 2016, and April 1, 2015 respectively
and decrease in net profit by Rs. 28 crore for the year ended March 31,2016.

(e)    Employee benefits

Under
Previous GAAP, actuarial gains and losses were recognised in the statement of
profit and loss. Under Ind AS, the actuarial gains and losses form part of
re-measurement of net defined benefit liability/asset which is recognised in
other comprehensive income in the respective years. This difference has
resulted in increase        in net profit
of Rs.122 crore for the year ended March 31, 2016. However, the same does not
result in difference in equity or total comprehensive income.