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GLOSSARY

This glossary is intended to help understand commonly used terms and phrases in this Report. The explanations are not intended to be technical definitions. If explanations provided here are found to be different from what is described in the Company's periodic financial statements (not limited to Notes to Accounts), then the definition provided in the certified financial statements will prevail.

This is the sum of all the invoices outstanding at the end of the period. To get a complete picture of the total outstanding, one can also add the Unbilled Revenue where invoices are yet to be raised for services already delivered and subtract the Unearned Revenue where invoices have been raised for services that are yet to be delivered. Accounts Receivable is normally viewed in proportion to the size of the organization’s revenue and so it is expressed as Days’ Sales Outstanding or DSO

Traditional methods of software development, which work in phases and are milestone focused, make it hard to keep up with today’s time-to-market demands. Agile represents a new way of working to build and deliver software. It is an interactive approach that allows enterprises to develop software incrementally and faster. TCS is pioneering the location independent model of Agile, that allows for deployment at scale, and helps customers whose own organizations are globally distributed to execute large transformational programs quickly while ensuring stability and quality

Amortisation is an accounting concept similar to depreciation, but used to measure the consumption of intangible assets such as , acquired customer relationships and contracts, etc

In the enterprise context, this is the discovery, interpretation, and communication of meaningful patterns in business data to predict and improve business performance

Acronym for Asia Pacific 

The process of exposing a discrete business function or data within an enterprise's systems through APIs

Design, development, and deployment of custom software; ongoing support, upkeep, and enhancement of such software over its lifetime

APIs are a set of easily accessible protocols for communication between various software components

AI is technology that appears to emulate human performance typically by learning, coming to its own conclusions, appearing to understand complex content, engaging in natural dialogs with people, augmenting human effort or replacing people on execution of non-routine tasks. Also known as Cognitive Computing

Software solutions delivered by leveraging TCS' IP / frameworks or software products

Quality Assurance and Engineering Services encompassing business requirements validation, static and functional testing, non-functional testing including performance engineering, user experience, security and test automation

This measures what portion of the workforce left the organization (voluntarily or involuntarily) in a certain period. Attrition looks at employee departures over the last 12 months (LTM). The formula is: Total number of departures in the LTM / closing headcount

Augmented Reality is a technology that superimposes a computer-generated image on a user's view of the real world to enrich the interaction

Automation is the execution of work by machines in accordance with rules that have either been explicitly coded by a human or ‘learned’ by the machine through pattern recognition of data

A basis point is one hundredth of a percentage point, that is, 0.01%

Acronym for Banking, Financial Services and Insurance

Big Data is high volume, high velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery, and process optimization

Blockchain is a distributed database that maintains a continuously growing list of records, called blocks, secured from tampering and revision

Business 4.0 is TCS’ thought leadership framework that helps enterprises leverage technology to further their growth and transformation agenda. Successful enterprises in the Business 4.0 epoch are ones which use technology to deliver mass personalization, leverage ecosystems, embrace risk and create exponential value. Such enterprises are agile, intelligent, automated and on the cloud

BPaaS refers to the delivery of BPS over a cloud computing model. Whereas the aim of traditional BPS is to reduce labor costs, BPaaS reduces labor count through increased automation, thereby cutting costs in the process. The pricing models are consumption-based or subscription-based commercial terms. As a cloud service, the BPaaS model is accessed via Internet-based technologies

Designing, enabling, and executing business operations including data management, analytics, interactions and experience management

Buy-Back is a corporate action in which a company buys back its shares from the existing shareholders and subsequently extinguishes them. The number of shares outstanding in the market correspondingly reduces

Chatbots are computer programs designed to simulate conversation with human users, especially over the internet. They are typically used in dialog systems for various practical purposes like customer service or information acquisition

Cloud computing is the delivery of easily provisionable computing resources – servers, storage, databases, networking, software, analytics and more – over the Internet, consumed on a pay-as-you-go basis.

Acronym for Communication, Media and Technology

CBO refers to TCS’ integrated offering consisting of BPS and IT IS, where TCS takes responsibility for the process outcomes, and uses cognitive automation to deliver superior outcomes

TCS uses COIN to harness the innovation taking place within the start-up ecosystem, including venture capitalists and academia globally, and incorporating them into innovative solutions for customers     

CAGR is a useful measure of growth over multiple time periods. It can be thought of as the growth rate between any two points in time, assuming that the metric has been compounding during that period

Restating the current period’s transactions in the reporting currency using the exchange rates of other currencies to reporting currency of a prior period. Eliminating the impact of movement in exchange rates over two periods provides a better basis for analyzing performance over periods. At TCS, revenue and profit performance are discussed in constant currency while analyzing performance

Core banking system is a back-end system that processes daily banking transactions and posts updates to accounts and other financial records. Core banking systems typically include deposit, loan and credit processing capabilities, with interfaces to general ledger systems and reporting tools

Cybersecurity is the body of technologies, processes and practices designed to protect networks, computers, programs and data from attack, damage or unauthorized access. In a computing context, security includes both cybersecurity and physical security

Days’ Sales Outstanding is a popular way of depicting the Accounts Receivable relative to the company’s Revenue. (DSO = Accounts Receivable * 365 / Revenue)

Dedicated servers are geared toward single tenants. Typically, companies with business-critical operations that demand high performance plus strict regulatory compliance rely on dedicated servers

Depreciation is a method of allocating the cost of a tangible long-term asset over its useful life. It is a non-cash accounting entry found in the statement of profit and loss

Traditional methods of software development, which work in phases and are milestone focused, make it hard to keep up with today’s time-to-market demands. DevOps represents a new way of working to build and deliver software. DevOps uses high levels of automation and tooling to rapidly deploy the software in production. DevOps, alongwith Agile has enabled TCS to achieve speed to market

Digital is a phrase used to represent new age technologies such as Social Media, Mobility, Analytics, Big Data, Cloud, Artificial Intelligence and Internet of Things

Discretionary spend, also known as Change the Business (CTB) spend, is that portion of the IT budget which is used to fund projects that are not, strictly speaking, essential for day to day operations, but are more transformational in nature. In uncertain economic times, when businesses are forced to cut spends in response to decline in income, discretionary spend is often the first to be scrutinized. What is considered discretionary is subjective and may differ considerably amongst businesses

Dividend is one form of distribution of profits earned by the Company and is usually declared as an amount per equity share held by the Shareholders. TCS has a policy of declaring quarterly interim dividends and the final dividend is approved by the shareholders in the Annual General Meeting

Dividend Payout Ratio is the ratio of the annual dividend paid (including dividend distribution tax) to the Net Income, usually expressed as a percentage

EPS for any period is the amount of that period's Net Income attributable to a single share after deducting any preference dividend and related taxes

EPS = [Net profit – Preference dividend if any] / Weighted average number of shares outstanding during the period

ETR is the proportion of the Profit Before Taxes that is provided towards income taxes

ETR = Provision for Taxes / Profit Before Taxes

Effort is the work performed by an employee, measured by the time spent on various tasks as entered by the employee in a timesheet. The smallest measure of effort is a person-hour which is the work performed by one person for one hour. In very large projects which might entail a few hundred or even a few thousand team-members working over a long period, the effort measured in person-hours can become unwieldy so more convenient units such as person-days, person-weeks, person-months or person-years might be used. In every case, it refers to the work performed by one person for one unit of time. With greater use of automation, and newer contracting models, the link between revenue earned and effort expended is gradually weakening.

Next Generation Product Engineering, Manufacturing Operations Transformation, Services Transformation, Embedded software and Internet of Things

Business and technology consulting, design, architecture, implementation, and support services on Enterprise Application platforms covering the front, middle, and back-office applications such as Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply Chain, Content Management etc., on-premise, cloud and other digital platforms

This is a form of services contract where the vendor takes a turnkey responsibility for delivering a solution for a certain price and within a mutually agreed timeframe. The customer is billed on completion of key project milestones and related deliverables. This arrangement gives the vendor considerable flexibility in the staffing and execution of the project. On the other hand, it also means bearing the project risk.

The fair value of a financial asset or liability is the price that would be received on selling an asset or paid on transferring a liability in an orderly transaction between market participants at the measurement date

A Forward Contract is a hedging instrument wherein two parties agree to buy or sell a particular currency at a pre-determined rate (OR Forward Currency rate) on a specific future date.

For e.g. TCS enters into a forward contract to sell USD 1mn after 3 months @ `68. Irrespective of the prevailing USDINR spot rate, TCS will be obliged to sell USD 1mn @ `68 at the end of 3 months

Gamification is the process of adding games or game-like elements to any activity in order to enrich experiences and encourage user participation

A hybrid cloud combines private cloud, public cloud and single-tenant dedicated servers. The private cloud offers advanced security, the public cloud provides scalability, and the single-tenant dedicated servers offer superior performance for applications that require it

Technical consulting, remote infrastructure management, hosting, process and tools optimization, and technical transformation of the enterprise IT infrastructure to a future proof hybrid cloud model

IaaS is a method of delivering computing, storage, networking and other capabilities via the Internet. IaaS enables companies to utilize web-based operating systems, applications and storage without having to purchase, manage and support the underlying cloud infrastructure

IoT is a network of interconnected machines or devices which are embedded with sensors, software, network connectivity, and necessary electronics to generate and share run-time data that can be studied and used to monitor or control remotely, predict failure, and optimize the design of those machines / devices

Invested funds are funds that are highly liquid in nature, and can be readily converted into cash.

Invested Funds = Cash and Bank Balances + Investments + Deposits with Banks + Inter corporate Deposits    

KMP at TCS refers to the Chief Executive Officer and Managing Director, Chief Operating Officer, Chief Financial Officer, Global Head – Human Resources and the Company Secretary. Please refer to the Company's policy on KMP: http://www.tcs.com/ir-corporate-governance

Acronym for Latin America Geography

Machine learning is a type of artificial intelligence that provides computers with the ability to learn without being explicitly programmed

Total market value of all of a company's outstanding equity shares

Market Cap = Last Trading Price * Total number of outstanding shares

Acronym for Middle East and Africa Geography

Mobility means information, convenience, and social media all combined together, and made available across a variety of screen sizes and devices

Non controlling Interest is the share of the consolidated profits attributable to interests of the non-controlling ownership in the subsidiaries

Non-Discretionary spend, also known as Run the Business (RTB) spend, is that portion of the IT budget that covers the basic IT activities required to keep a business running

Even in tough economic times, non-discretionary spend remains relatively unaffected

PaaS, is a category of cloud computing that provides a platform and environment to allow developers to build applications and services over the internet. PaaS services are hosted in the cloud and accessed by users simply via their web browser

Segmentation and responding to individual transactions, customised for a single customer in a single instance

This is the price charged to the customer per unit of effort. In Time and Material contracts, pricing is the billing rate for a unit of effort (usually measured in person-hours). In Fixed Price contracts, pricing is the total sum the customer is expected to pay for the turnkey solution delivered.

Some use this term interchangeably (and somewhat inaccurately) with the average revenue realized by the company per unit of effort. See Realization

A private cloud offers the agility, scalability and efficiency of the public cloud, with the greater levels of control and security of a single-tenant, dedicated server environment. It can be hosted on-site at your own data center or at a service provider’s data center. When securing your business data or regulatory compliance is paramount, it’s an ideal choice

Public cloud provides easy access to IT resources as you need them and when you need them, reducing the cost and burden of ongoing hardware and datacenter management. A public cloud has multiple tenants and offers pay-as-you-go scalability. It’s well suited for websites with public-facing operations and unpredictable or heavy traffic

This is the revenue received by the company per unit of effort expended. TCS reports the year on year change in realization (in percentage terms) after removing any impact of changes in currency exchange rates.

Billing rates vary depending on what service is offered and in which country, so it is important to note that increases or decreases in realization could be because of changes in the underlying business or geographic mix and not necessarily because of a change in pricing. Also, realization doesn’t take into account the costs and therefore higher realization is not necessarily better or more profitable

Any transaction between a company and its related party involving transfer of services, resources or any obligation, regardless of whether a price is charged.

Please refer the Company's policy on Related Party Transactions : http://www.tcs.com/ir-corporate-governance

Revenue is the income earned by the company from operations by providing IT & consulting services, software licenses, and hardware equipment to customers

RPA is the use of software with artificial intelligence (AI) and machine learning capabilities to handle high-volume, repeatable tasks that previously required humans to perform. These tasks can include queries, calculations and maintenance of records and transactions.

Simplification is the term used to describe the rationalization of IT architectures through consolidation of systems and elimination of redundant systems and layers. The primary purpose is to shrink the IT footprint and make operations leaner and more efficient

SMB is a business which, due to its size, has different IT requirements—and often faces different IT challenges—than large enterprises, and whose IT resources (usually budget and staff) are often highly constrained

Social media is an online environment where content is created, consumed, promoted, distributed, discovered or shared for purposes that are primarily related to communities and social activities rather than to functional, task-oriented objectives. “Media,” in this context, represents an environment characterized by storage and transmission, while “social” describes the distinct way these messages propagate in a one-to-many or many-to-many fashion

SEZ in India were developed as areas in which business and trade laws are different from the rest of the country offering them various benefits and tax breaks with the objective of promoting exports from the country, increase trade, and investment, and help in job creation

STEM is an acronym for education in the fields of science, technology, engineering and math

This is a form of services contract where the customer is billed for the time (hours, days, weeks, etc) logged by the project team members . In other words, the customer is billed for the effort rather than for the outcomes. Project risk is borne by the customer. This is in contrast to Fixed Price Contracts

UBR is revenue that is yet to be invoiced for services already delivered. Typically invoicing in turnkey projects are tied to achieving agreed milestones. UBR arises when the efforts are expended during the course of achieving such milestones and when the contract provides for right to receive payment for effort expended until the milestone is achieved. This is the opposite of Unearned Revenue

UER is invoice raised in advance for services yet to be delivered. In other words, it is the amount that has been invoiced although the underlying effort is yet to be expended. Unearned revenue is the opposite of Unbilled Revenue

VR is an artificial, computer-generated simulation or recreation of a real life environment or situation. It engages users by offering simulated reality experiences firsthand, primarily by stimulating their vision and hearing

Virtualization is the abstraction of IT resources – like a server, client, storage or network – that masks the physical nature and boundaries of those resources from the users of those resources

Volume in any period is the Effort expended and the quantum of hardware equipment and software licenses sold in that period

Acronym for Year-on-Year