6-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the quarter ended September 30, 2020

Commission File Number 001-35754

Infosys Limited

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant's name into English)

Electronics City, Hosur Road, Bangalore - 560 100, Karnataka, India. +91-80-2852-0261

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) : o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) : o

TABLE OF CONTENTS

EXHIBIT 99.1

EXHIBIT 99.2

EXHIBIT 99.3

EXHIBIT 99.4

EXHIBIT 99.5

EXHIBIT 99.6

EXHIBIT 99.7

EXHIBIT 99.8

EXHIBIT 99.9

EXHIBIT 99.10

DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Infosys Limited (“Infosys” or “the Company” or “we”) hereby furnishes the United States Securities and Exchange Commission with copies of the following information concerning our public disclosures regarding our results of operations and financial condition for the quarter and half year ended September 30, 2020.

The following information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On October 14, 2020, we announced our results of operations for the quarter and half year ended September 30, 2020. We issued press releases announcing our results under International Financial Reporting Standards (“IFRS”) in U.S. dollars and Indian rupees, copies of which are attached to this Form 6-K as Exhibits 99.1 and 99.2, respectively.

On October 14, 2020, we held a press conference to announce our results, which was followed by a question and answer session. The transcript of this press conference is attached to this Form 6-K as Exhibit 99.3.

We have also made available to the public on our web site, www.infosys.com, a fact sheet that provides details on our profit and loss account summary for the quarters and half years ended September 30, 2020 and 2019 (as per IFRS); revenue by client geography offering, business segment; information regarding our client concentration; employee information and metrics; and consolidated IT services information. We have attached this fact sheet to this Form 6-K as Exhibit 99.4.

On October 14, 2020, we also held a teleconference with investors and analysts to discuss our results. The transcripts of the teleconference are attached to this Form 6-K as Exhibit 99.5.

We placed form of releases to stock exchanges and advertisements in certain Indian newspapers concerning our results of operations for the quarter and half year ended September 30, 2020, under Ind AS. A copy of the release to the stock exchanges and the advertisement is attached to this Form 6-K as Exhibit 99.6.

We have made available to the public on our web site, www.infosys.com, the following: Audited Interim Condensed Financial Statements in compliance with IFRS in US dollars and the Auditors Report; Audited Interim Condensed Financial Statements in compliance with IFRS in Indian Rupees and the Auditors Report; Audited Interim Ind AS Condensed Standalone Financial Statements and Auditors Report; Audited Interim Ind AS condensed Consolidated Financial Statements and Auditors Report for the quarter and half year ended September 30, 2020. We have attached these documents to this Form 6-K as Exhibits 99.7, 99.8,99.9 and 99.10 respectively.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

	Infosys Limited /s/ Inderpreet Sawhney
Date: October 19, 2020	Inderpreet Sawhney General Counsel and Chief Compliance Officer

INDEX TO EXHIBITS

Exhibit No.	Description of Document
99.1	IFRS USD press release
99.2	IFRS INR press release
99.3	Transcript of October 14, 2020 press conference
99.4	Fact Sheet regarding extract of Registrant's Statement of Profit and Loss for the quarter and half year ended September 30, 2020 and 2019 (as per IFRS); revenue by Business Segment, revenue by Offering, revenue by Client Geography, information regarding Client Concentration; Employee Information and Metrics, Consolidated IT Services Information and cash flow information
99.5	Transcript of October 14, 2020 Earnings Call
99.6	Form of release to stock exchanges and advertisement placed in Indian newspapers
99.7	Audited Interim Condensed Consolidated Financial Statements of Infosys Limited and its Subsidiaries in compliance with International Financial Reporting Standards (IFRS) in US Dollars and the Auditors Report thereon
99.8	Audited Interim Condensed Consolidated Financial Statements of Infosys Limited and its Subsidiaries in compliance with IFRS in Indian Rupees and the Auditors Report thereon
99.9	Audited Interim Condensed Financial Statements of Infosys Limited for the quarter and half year ended September 30, 2020 in compliance with Indian Accounting Standards (INDAS) and Auditors Report thereon.
99.10	Audited Interim Condensed Consolidated Financial Statements of Infosys Limited and its subsidiaries in compliance with INDAS for the quarter and half year ended September 30, 2020 and Auditors Report thereon.

EX-99.1 CHARTER

 Exhibit 99.1
IFRS USD Press Release

Growth acceleration accompanied by 3.7% YoY margin expansion; revenue and margin guidance increased to 2%-3% in cc and 23%-24% respectively

Bengaluru, India – October 14, 2020

“Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2% year on year overall revenue growth and 25.4% growth from digital offerings, which now are at 47.3% of revenues”, said Salil Parekh, CEO and MD. “Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally.”

 

· Q2 revenues grew sequentially by 4.0% in constant currency

· Q2 revenues grew year-on-year by 3.2% in USD; grew by 2.2% in constant currency

· Q2 Digital revenues at $1,568 million (47.3% of total revenues), year-on-year growth of 25.4% in constant currency

· Q2 operating margin at 25.4%, increase of 370 basis points year-on-year

· Q2 free cash flow at $674 million; year-on-year growth of 69.8%

· Q2 net profit at $653 million, year-on-year growth of 14.7%

· Q2 voluntary attrition for IT services declined to 7.8% from 18.3% in Q2 20

· H1 revenues grew by 1.9% in constant currency

· H1 operating margin at 24.1%

· Declared interim dividend of 12 per share

· FY 21 revenue growth guidance revised upward to 2%-3% in constant currency

· FY 21 operating margin guidance revised upward to 23%-24%

1. Financial Highlights – Consolidated results under International Financial Reporting Standards (IFRS)

For the quarter ended September 30, 2020 Revenues were $3,312 million, growth of 3.2% YoY and 6.1% QoQ Operating profit was $840 million, growth of 20.7% YoY and 18.7% QoQ Basic EPS was $0.15, growth of 14.9% YoY and 17.0% QoQ For six months ended September 30, 2020 Revenues were $6,433 million, growth of 1.5% YoY Operating profit was $1,547 million, growth of 15.6% YoY Basic EPS was $0.29, growth of 9.5% YoY

 “The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $ 3.15 bn and attrition reducing to single digits”, said Pravin Rao, COO. “Employees have been critical part of our success. As a recognition of their stellar performance, we are giving 100% variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective Jan 1st.”

“Our relentless efforts on cost optimization and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin to 25.4% and a 300 bps improvement in H1 margins”, said Nilanjan Roy, CFO. “Free Cash Flows grew significantly in H1 driven by our consistent focus on liquidity and cash management. Consequently, we are increasing our interim dividend per share by 50% to 12.”

2. Client wins & Testimonials

Even amid global uncertainty across industries and the current medical situation, Infosys continued to nurture a culture of deep client relevance while building capabilities to aid them through recovery.

· Among several milestones achieved in the second quarter, Consolidated Edison Company (Con Edison), one of the oldest Fortune 500 utility companies, selected Infosys to digitally transform Con Edison’s customer service capabilities over the next four years

· Infosys collaborated with LANXESS, a leading specialty chemicals company headquartered in Cologne, Germany, to support the company’s IT Infrastructure digitization strategy and enable its global workforce with a secure and fully managed modern workplace

· Essential Utilities, one of the largest publicly traded water, wastewater and natural gas providers in the U.S., selected Infosys as a strategic partner to drive its digital transformation

· Infosys has entered into a first-of-its-kind, 360 degree partnership with LivePerson, a leader in conversational AI, headquartered in New York, to transform their infrastructure on the public cloud that will deliver industry-leading agility, scalability, and security. Infosys will also help drive penetration of LivePerson’s offerings across its clients and digital marketing, e-commerce, contact center, employee engagement and shared services channels.

· Old National Bancorp (ONB), the largest financial services bank holding company headquartered in Indiana, U.S., wanted Infosys to enable faster adoption of digital solutions, modernize ONB’s existing technology infrastructure, and enhance both the client and employee experience

· The National Bank of Bahrain (NBB) selected Infosys Finacle for the digital transformation of its transaction banking business

As global businesses navigate this tough environment, the strength of our relationships and our digital capabilities have helped us sustain the momentum to help our clients grow resilient. Here is what some of them have to say:

· “We have worked with the Infosys team for over 5 years now, and very successfully. The results were phenomenal. My finance team and the senior Enterprise leadership team couldn’t believe how far the guys have gone above and beyond the contract. I am so delighted with the results, delighted with the service that I have received. When the pandemic hit, we had to shut down and lock down both onshore and offshore teams. Thanks to the RPA bots, we were able to issue every single order and we didn't miss a single KPI. Without those bots, we would have been stranded. I can't speak highly enough of the guys involved and the actual tool itself. Superstars one and all.” - Brad Monks, Head of Mobile, BT Enterprise 

· Kai Finke, CIO of LANXESS said, “Standardized and harmonized workplace services will enable us to increase our service quality and usability on a global basis as well as increase flexibility and scalability which nowadays are getting more and more important. Working with Infosys will allow us to implement state-of-the-art-technologies faster and thus bring LANXESS to the next level regarding workplace services enhancing our collaboration and mobility capabilities.”

Awards & Recognitions

· Positioned as a leader in Everest PEAK: Cloud-Native Application Development Services PEAK Matrix® Assessment 2020

· Ranked as a leader in NelsonHall NEAT for Quality Engineering Services 2020

· Ranked as a leader by NelsonHall NEAT for Advanced Digital Workplace Services 2020

· Positioned as a leader in HFS Research Top 10 for Travel, Hospitality, and Logistics Service Providers

· Ranked as a leader in Gartner Magic Quadrant for IT Services for Communications Service Providers, Worldwide

· Ranked as a leader in IDC MarketScape: Asia /Pacific SAP Implementation Services Vendor Assessment, 2020

· Positioned as a leader in IDC - MarketScape: Worldwide Manufacturing Intelligence Transformation Strategic Consulting 2020 Vendor Assessment

· Positioned as a leader in IDC - MarketScape: Worldwide Manufacturing Intelligence Transformation 2020 Vendor Assessment

· Positioned as a leader in Forrester Wave: Digital Process Automation Service Providers

· Ranked as a leader CapioIT - Salesforce.com Global Systems Integration and Services Providers Capture Share Report – 2020

· Infosys is a winner of the 2020 Top 10 Working Mother & Avtar Best Company for Women in India award

· Infosys has won the Champion of Inclusion’ award of Working Mother & Avtar Most Inclusive Companies Index (MICI) 2020

· Infosys Düsseldorf innovation hub was awarded with the prestigious NRW.INVEST award 2020

· Infosys won the German Brand Award 2020 for Excellence in Brand Strategy and Creation

· Recognized by the Top Employers Institute, a global certification company, for exceptional standards in employee conditions across Europe for three years in a row. Infosys is also the certified Top Employer in France, Germany, Switzerland, The Netherlands and the United Kingdom

· Infosys Finacle was positioned as a leader in The Forrester Wave™: Digital Banking Processing Platforms (Corporate Banking), Q3 2020 report Infosys Finacle was ranked as a Leader in Gartner’s Magic Quadrant for Global Retail Core Banking report 2020 for the 13th consecutive year

About Infosys

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 46 countries to navigate their digital transformation. With nearly four decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.   Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.  

Safe Harbor

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

Contact

Investor Relations	Sandeep Mahindroo +91 80 3980 1018 Sandeep_Mahindroo@infosys.com
Media Relations	Rishi Basu +91 80 4156 3998 Rajarshi.Basu@infosys.com	Chiku Somaiya +1 71367 06752 Chiku.Somaiya@infosys.com

Infosys Limited and subsidiaries

Extracted from the Condensed Consolidated Balance Sheet under IFRS as at:

(Dollars in millions)

	September 30, 2020	March 31, 2020
ASSETS
Current assets
Cash and cash equivalents	3,038	2,465
Current investments	488	615
Trade receivables	2,430	2,443
Unbilled revenue	1,030	941
Other Current assets	785	748
Total current assets	7,771	7,212
Non-current assets
Property, plant and equipment and Right-of-use assets	2,438	2,361
Goodwill and other Intangible assets	964	950
Non-current investments	1,051	547
Other non-current assets	1,139	1,190
Total non-current assets	5,592	5,048
Total assets	13,363	12,260
LIABILITIES AND EQUITY
Current liabilities
Trade payables	322	377
Unearned revenue	455	395
Employee benefit obligations	263	242
Other current liabilities and provisions	1,764	1,743
Total current liabilities	2,804	2,757
Non-current liabilities
Lease liabilities	551	530
Other non-current liabilities	325	272
Total non-current liabilities	876	802
Total liabilities	3,680	3,559
Total equity attributable to equity holders of the company	9,623	8,646
Non-controlling interests	60	55
Total equity	9,683	8,701
Total liabilities and equity	13,363	12,260

Extracted from the Condensed Consolidated statement of Comprehensive Income under IFRS for:

(Dollars in millions except per equity share data)

	3 months ended September 30, 2020	3 months ended September 30, 2019	6 months ended September 30, 2020	6 months ended September 30, 2019
Revenues	3,312	3,210	6,433	6,340
Cost of sales	2,125	2,140	4,196	4,261
Gross profit	1,187	1,070	2,237	2,079
Operating expenses:
Selling and marketing expenses	153	165	305	333
Administrative expenses	194	209	385	408
Total operating expenses	347	374	690	741
Operating profit	840	696	1,547	1,338
Other income, net (3)	70	83	128	183
Profit before income taxes	910	779	1,675	1,521
Income tax expense	255	207	456	403
Net profit (before minority interest)	655	572	1,219	1,118
Net profit (after minority interest)	653	569	1,212	1,115
Basic EPS ($)	0.15	0.13	0.29	0.26
Diluted EPS ($)	0.15	0.13	0.29	0.26

NOTES:

1. The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter and half year ended September 30, 2020 which have been taken on record at the Board meeting held on October 14, 2020.

2. A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com.

3. Other Income includes Finance Cost.

EX-99.2 BYLAWS

 Exhibit 99.2
IFRS INR Press Release

Growth acceleration accompanied by 3.7% YoY margin expansion; revenue and margin guidance increased to 2%-3% in cc and 23%-24% respectively

Bengaluru, India – October 14, 2020

“Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2% year on year overall revenue growth and 25.4% growth from digital offerings, which now are at 47.3% of revenues”, said Salil Parekh, CEO and MD. “Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally.”

· Q2 revenues grew sequentially by 4.0% in constant currency

· Q2 revenues grew year-on-year by 8.6% in INR; grew by 2.2% in constant currency

· Q2 Digital revenues at $1,568 million (47.3% of total revenues), year-on-year growth of 25.4% in constant currency

· Q2 operating margin at 25.4%, increase of 370 basis points year-on-year

· Q2 free cash flow at 4,989 crore; year-on-year growth of 78.1%

· Q2 net profit at 4,845 crore, year-on-year growth of 20.5%

· Q2 voluntary attrition for IT services declined to 7.8% from 18.3% in Q2 20

· H1 revenues grew by 1.9% in constant currency

· H1 operating margin at 24.1%

· Declared interim dividend of 12 per share

· FY 21 revenue growth guidance revised upward to 2%-3% in constant currency

· FY 21 operating margin guidance revised upward to 23%-24%

1. Financial Highlights - Consolidated results under International Financial Reporting Standards (IFRS)

For the quarter ended September 30, 2020 Revenues were 24,570 crore, growth of 8.6% YoY and 3.8% QoQ Operating profit was 6,228 crore, growth of 26.8% YoY and 16.1% QoQ Basic EPS was 11.42, growth of 20.8% YoY and 14.4% QoQ For six months ended September 30, 2020 Revenues were 48,234 crore, growth of 8.6% YoY Operating profit was 11,593 crore, growth of 23.6% YoY Basic EPS was 21.40, growth of 17.1% YoY

“The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $ 3.15 bn and attrition reducing to single digits”, said Pravin Rao, COO. “Employees have been critical part of our success. As a recognition of their stellar performance, we are giving 100% variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective Jan 1st.”

“Our relentless efforts on cost optimization and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin to 25.4% and a 300 bps improvement in H1 margins”, said Nilanjan Roy, CFO. “Free Cash Flows grew significantly in H1 driven by our consistent focus on liquidity and cash management. Consequently, we are increasing our interim dividend per share by 50% to 12.”

2. Client wins & Testimonials

Even amid global uncertainty across industries and the current medical situation, Infosys continued to nurture a culture of deep client relevance while building capabilities to aid them through recovery.

· Among several milestones achieved in the second quarter, Consolidated Edison Company (Con Edison), one of the oldest Fortune 500 utility companies, selected Infosys to digitally transform Con Edison’s customer service capabilities over the next four years

· Infosys collaborated with LANXESS, a leading specialty chemicals company headquartered in Cologne, Germany, to support the company’s IT Infrastructure digitization strategy and enable its global workforce with a secure and fully managed modern workplace

· Essential Utilities, one of the largest publicly traded water, wastewater and natural gas providers in the U.S., selected Infosys as a strategic partner to drive its digital transformation

· Infosys has entered into a first-of-its-kind, 360 degree partnership with LivePerson, a leader in conversational AI, headquartered in New York, to transform their infrastructure and deliver industry-leading agility, scalability, and security. Infosys will also help drive penetration of LivePerson’s offerings across its client portfolio in digital marketing, e-commerce, contact center, employee engagement and shared services.

· Old National Bancorp (ONB), the largest financial services bank holding company headquartered in Indiana, U.S., wanted Infosys to enable faster adoption of digital solutions, modernize ONB’s existing technology infrastructure, and enhance both the client and employee experience

· The National Bank of Bahrain (NBB) selected Infosys Finacle for the digital transformation of its transaction banking business

As global businesses navigate this tough environment, the strength of our relationships and our digital capabilities have helped us sustain the momentum to help our clients grow resilient. Here is what some of them have to say:

· “We have worked with the Infosys team for over 5 years now, and very successfully. The results were phenomenal. My finance team and the senior Enterprise leadership team couldn’t believe how far the guys have gone above and beyond the contract. I am so delighted with the results, delighted with the service that I have received. When the pandemic hit, we had to shut down and lock down both onshore and offshore teams. Thanks to the RPA bots, we were able to issue every single order and we didn't miss a single KPI. Without those bots, we would have been stranded. I can't speak highly enough of the guys involved and the actual tool itself. Superstars one and all.” - Brad Monks, Head of Mobile, BT Enterprise

· Kai Finke, CIO of LANXESS said, “Standardized and harmonized workplace services will enable us to increase our service quality and usability on a global basis as well as increase flexibility and scalability which nowadays are getting more and more important. Working with Infosys will allow us to implement state-of-the-art-technologies faster and thus bring LANXESS to the next level regarding workplace services enhancing our collaboration and mobility capabilities.”

Awards & Recognitions

· Positioned as a leader in Everest PEAK: Cloud-Native Application Development Services PEAK Matrix® Assessment 2020

· Ranked as a leader in NelsonHall NEAT for Quality Engineering Services 2020

· Ranked as a leader by NelsonHall NEAT for Advanced Digital Workplace Services 2020

· Positioned as a leader in HFS Research Top 10 for Travel, Hospitality, and Logistics Service Providers

· Ranked as a leader in Gartner Magic Quadrant for IT Services for Communications Service Providers, Worldwide

· Ranked as a leader in IDC MarketScape: Asia /Pacific SAP Implementation Services Vendor Assessment, 2020

· Positioned as a leader in IDC - MarketScape: Worldwide Manufacturing Intelligence Transformation Strategic Consulting 2020 Vendor Assessment

· Positioned as a leader in IDC - MarketScape: Worldwide Manufacturing Intelligence Transformation 2020 Vendor Assessment

· Positioned as a leader in Forrester Wave: Digital Process Automation Service Providers

· Ranked as a leader CapioIT - Salesforce.com Global Systems Integration and Services Providers Capture Share Report – 2020

· Infosys is a winner of the 2020 Top 10 Working Mother & Avtar Best Company for Women in India award

· Infosys has won the Champion of Inclusion’ award  of Working Mother & Avtar Most Inclusive Companies Index (MICI) 2020

· Infosys Düsseldorf innovation hub was awarded with the prestigious NRW.INVEST award 2020

· Infosys won the German Brand Award 2020 for Excellence in Brand Strategy and Creation

· Recognized by the Top Employers Institute, a global certification company, for exceptional standards in employee conditions across Europe for three years in a row. Infosys is also the certified Top Employer in France, Germany, Switzerland, The Netherlands and the United Kingdom

· Infosys Finacle was positioned as a leader in The Forrester Wave™: Digital Banking Processing Platforms (Corporate Banking), Q3 2020 report

· Infosys Finacle was ranked as a Leader in Gartner’s Magic Quadrant for Global Retail Core Banking report 2020 for the 13th consecutive year

About Infosys

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 46 countries to navigate their digital transformation. With nearly four decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.   Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.  

Safe Harbor

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

Contact

Investor Relations	Sandeep Mahindroo +91 80 3980 1018 Sandeep_Mahindroo@infosys.com
Media Relations	Rishi Basu +91 80 4156 3998 Rajarshi.Basu@infosys.com	Chiku Somaiya +1 71367 06752 Chiku.Somaiya@infosys.com

Infosys Limited and subsidiaries

Extracted from the Condensed Consolidated Balance Sheet under IFRS as at:

(in crore)

	September 30, 20200	March 31, 2020
ASSETS
Current assets
Cash and cash equivalents	22,411	18,649
Current investments	3,600	4,655
Trade receivables	17,930	18,487
Unbilled revenue	7,596	7,121
Other Current assets	5,788	5,664
Total current assets	57,325	54,576
Non-current assets
Property, plant and equipment and Right-of-use assets	17,986	17,867
Goodwill and other Intangible assets	7,112	7,186
Non-current investments	7,754	4,137
Other non-current assets	8,401	9,002
Total non-current assets	41,253	38,192
Total assets	98,578	92,768
LIABILITIES AND EQUITY
Current liabilities
Trade payables	2,375	2,852
Unearned revenue	3,356	2,990
Employee benefit obligations	1,941	1,832
Other current liabilities and provisions	13,014	13,182
Total current liabilities	20,686	20,856
Non-current liabilities
Lease liabilities	4,068	4,014
Other non-current liabilities	2,390	2,054
Total non-current liabilities	6,458	6,068
Total liabilities	27,144	26,924
Total equity attributable to equity holders of the company	71,000	65,450
Non-controlling interests	434	394
Total equity	71,434	65,844
Total liabilities and equity	98,578	92,768

Extracted from the Condensed Consolidated statement of Comprehensive Income under IFRS for:

(in crore except per equity share data)

	3 months ended September 30, 2020	3 months ended September 30, 2019	6 months ended September 30, 2020	6 months ended September 30, 2019
Revenues	24,570	22,629	48,234	44,432
Cost of sales	15,771	15,079	31,473	29,858
Gross profit	8,799	7,550	16,761	14,574
Operating expenses:
Selling and marketing expenses	1,136	1,162	2,283	2,336
Administrative expenses	1,435	1,476	2,885	2,855
Total operating expenses	2,571	2,638	5,168	5,191
Operating profit	6,228	4,912	11,593	9,383
Other income, net (3)	522	584	950	1,280
Profit before income taxes	6,750	5,496	12,543	10,663
Income tax expense	1,892	1,459	3,412	2,824
Net profit (before minority interest)	4,858	4,037	9,131	7,839
Net profit (after minority interest)	4,845	4,019	9,078	7,817
Basic EPS ()	11.42	9.46	21.40	18.28
Diluted EPS ()	11.40	9.44	21.37	18.25

NOTES:

1. The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter and half year ended September 30, 2020 which have been taken on record at the Board meeting held on October 14, 2020.

2. A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com.

3. Other Income includes Finance Cost.

EX-99.3 VOTING TRUST

   Exhibit 99.3

Press Conference

“Infosys-Press Call”

October 14, 2020

CORPORATE PARTICIPANTS :

Salil Parekh

Chief Executive Officer & Managing Director

Pravin Rao

Chief Operating Officer

Nilanjan Roy

Chief Financial Officer

MEDIA PARTICIPANTS

Kushal Gupta

Zee Business

Mugdha Variyar

CNBC

Chandra Ranganathan

ET Now

Ayushman Baruah

Mint

Sajeet Manghat

BloombergQuint

Saritha Rai

Bloomberg

Shilpa Phadnis

The Times of India

Jochelle Mendonca

ET Prime

Swathi Moorthy

MoneyControl

Rukmini Rao

Business Today

Stuti Das

PTI

Nikita Periwal

Cogencis

Mini Tejaswi

The Hindu

Megha Mandavia

The Economic Times

Sankalp Phartiyal

Reuters

Garima

Good evening everyone and thank you for joining us for Infosys Q2 FY21 financial results. I am Garima and on behalf of Infosys, I would like to welcome you to this press conference. During these testing times, we hope you, your family and your dear ones are safe and well. Before we begin, I wanted to share a few guidelines with our attendees today. Please note, all journalists will be on mute by default throughout the press conference. You will be requested to unmute yourself when your name is called out for asking a question. Should you drop out, please rejoin using the same invite link. With that let me invite, Mr. Salil Parekh, CEO, Infosys to take us through the quarter gone by. Over to you, Salil. 

Salil Parekh

Good afternoon. I trust each of you are safe and healthy. We have had an exceptional quarter in the second quarter, across multiple dimensions: client impact, digital scaling, growth and operating margins. I am grateful to our clients for their continued trust in us and I am proud of our team for their incredible commitment to our clients.

Let me share with you the highlights for Q2. Revenues grew by 2.2% YoY in constant currency and 4% QoQ in constant currency. Digital revenue grew at 25.4% YoY and now it accounts for 47% of our business. We delivered an operating margin of 25.4% and the large deal wins were $3.15 bn.

Our industry leading performance over the first half of this year has been due to the immense commitment of our over 240,000 employees. Recognizing this continuing stellar commitment from our employees during these times, we are paying out variable pay for the quarter at 100%. We will pay a one-time special incentive in Q3 for our junior employees. The salary increase process will restart now and will be effective from January 1, 2021. We restarted promotions in the last quarter at our junior levels and this will now be expanded to all levels.

I am thankful to each one of our employees for staying deeply committed to serving our clients as they have navigated their own personal challenges associated with the ongoing COVID situation and also with the remote operating model that we are working in.

So, a big thank you to all of our employees and all of our clients. Thank you and with that let me hand it over to you Garima for questions.

Garima

Thank you Salil. We will now open the floor for Q&A. Joining Salil, we have with us Mr. Pravin Rao, Chief Operating Officer, Infosys and Mr. Nilanjan Roy, Chief Financial Officer of Infosys. In the interest of time and to give everyone a fair chance may I please request our media friends to ask one question per leader only. Let us move on to our questions now.

Our first question is coming up from Kushal Gupta from Zee Business. Hi Kushal, please unmute yourself and ask the question.

Kushal Gupta

Your results have been brilliant. So, I would like to congratulate you guys for this. My question to Mr. Parekh is that you have increased the guidance for the revenue and the margins, is it because of the client confidence, cost cutting or cost savings which has happened or the acquisitions which you have had in the past, that we are able to see such an increase? My second question is for Mr. Rao. We have seen better performance in BFSI and Retail verticals, will this continue? And in the manufacturing vertical which has weakened, what are key factors that we need to focus for its revival? Third question to Mr. Nilanjan is that, there have been several cost deferrals due to the pandemic, what is the situation now and are there any price negotiations happening? Please provide us some clarity on those aspects?

Salil Parekh

Revenue guidance and margin guidance has been increased- both of those are coming from what we have seen with our business and the confidence that our clients have in what we are doing. The growth comes from the digital work that we are doing with our clients on their transformation journey, how we are supporting them in their cloud business. Specifically, with respect to margin, Nilanjan will also expand on it, there were several specific one-off situations that we saw in Q2. Yet, we see extreme strength in the way that they are going forward with the business as also as we increase our commitment in terms of salary increases that I just talked about. So, overall on the demand side, we see a good demand and a good pipeline and

thanks to some of the recent wins that we have had over the past few quarters and on the margin side, a very strong discipline managing, the way we are looking at our business in addition to some things that we saw on a one-time basis.

With that Pravin over to you on the second part.

Pravin Rao

On the segment side, from a Financial Services perspective, we continue to see good performance both on a YoY and sequential basis. The areas of spend include in the mortgage processing, in payment space, in lending and banks are also investing heavily in terms of enabling remote ways of working, advisory, digital banking, retail banking and so on. Though we see bit muted performance in capital markets and cards and payment space. On the Retail side, we had a tough quarter in Q1, but we have seen improved performance in Q2. On a YoY basis, performance has been flat, but on the QoQ basis, we have seen growth coming back in the retail segment. However, given the nature of the segment, continued bankruptcies and some of the challenges we have seen, we remain cautious about it for the future. Manufacturing is another segment, which has been severely impacted by the pandemic. We have seen impact on both demand and supply side and in addition, they have also had impact of the trade wars. However, things seem to have stabilized in the coming quarter and we expect spend to come back slowly. So, while banking has done extremely well, Financial Services, has done extremely well, the pace of recovery in both Retail and Manufacturing will be slow, but it has been very encouraging in the Q2 and we expect that pace to continue.

Nilanjan Roy

Your question on pricing and margin, if I step back about two quarters when the pandemic started, and we all spoke to you at the end of April. When we were looking at entire cost management at that time, I think this was a three-pronged approach that we took. Firstly, it was about deferrals of cost, which was around promotions, wage hikes, hiring etc. The second one was how do we cut the discrete expenditure whether it was travel or it was brand expenditure etc., and third was our continued strategic cost levers of onsite, offshore pyramid and automation, subcontractors. So, this was the three-pronged approach we have taken and clearly the impact of all those three have been seen in the margin improvements across QoQ.

Specifically in Q2, our margins went up sequentially by 2.7% about 100-basis points from RPP which is pricing; it is a combination of the base impact, which we have seen in this quarter and also some impact of a moderated discount environment, which is ad hoc. The second one is of course around utilization – by about 80-basis points, which had dropped in the previous quarter. So, we have seen a margin impact of that as utilization has improved. The third is the onsite- offshore mix due to the temporary travel restrictions overseas, we have seen it improving substantially and that was around 80-basis points of margin. Now as you can understand a part of this margin benefit has been helped by the deferral of these costs which is why we have seen some accelerated margins and going into the second half of the year as Salil mentioned, some of these cost increases will now come back like wage hikes, promotions, hiring, etc., we will see some impact of that as well.

Garima

Thank you for the answers. Our next question is from Mugdha from CNBC.

Mugdha Variyar

Firstly, congratulations to all of you on a really strong quarter. Salil, let me come to you first, I want to ask you again, M&A activity has really been strong for Infosys this year already, four acquisitions in this calendar year. Firstly is there more appetite for more acquisitions and which areas will you look at and if you can also breakdown organic and inorganic growth for us and also highlight what is the contribution from the Vanguard deal to the revenues in this quarter, if you can highlight that? Nilanjan, a little bit on the capital allocation policy, while your peers have announced a buyback, you did not choose to announce buyback, you have announced an interim dividend as well but what is the rationale behind that if you can highlight that for us? And also, Nilanjan on the pricing, last quarter Infosys mentioned that there were some pricing discounts in Retail and Manufacturing, have those come back or are they coming back to original levels? Pravin to you, firstly good to hear that promotions and hikes are back from January, but will they be on par with pre-COVID levels and on voluntary attrition, it is quite low now. What are the factors that have led to this low voluntary attrition? And across verticals as well, you did say that the pace of recovery in retail and manufacturing will be slow when do you expect to see full recovery?

Salil Parekh

Thanks, Mugdha for those questions. On M&A, we always had an aim to build out the M&A which is focused on our digital capabilities. So, we saw something with a strong partner, Adobe, with another strong partner Salesforce, we have done something very exciting with another partner ServiceNow and then something in the product design space. So those are all different parts of the company and now we are looking around that and integration is going. We are still open to looking at other things as and when they make sense. In terms of the impact, obviously these are very small and 3 of them were done in the last three months and they are small businesses which are going to start, and it will boost our Digital capabilities. In terms of your question on Vanguard we do not break out specifically the revenue specificities of that client in at least this scenario. We are very positive with respect to what we see on the demand side as you know how we looked at the revenue growth margins discussion that we have had. Pravin over to you, please.

Pravin Rao

On the comp increases as Salil mentioned this will be across level effective January 1st. The quantum of increase will be identical to what we have done in the previous year. Your second question was around attrition. Attrition obviously has come down dramatically. It is significantly lower than what we typically see in this time of the year and our comfort zone. There are several reasons to it. Obviously, during this pandemic we have had tremendous focus on employee engagement, particularly engaging with employees in the virtual world was a big challenge. We have done several interventions, we have enabled managers to deal with employees in a virtual manner. We have created a lot of focus on physical wellness, emotional wellness. There have been over 200 initiatives and a lot of people have participated. We also encouraged the employee’s family as well. There have been tremendous focus on health and safety of the employees as well and even when we had employees come into office have come to a very secure environment and they have also been able to quickly enable them to work from home providing assets and other things. So, there are a lot of focus and the effort is ongoing and even for employees who were tested positive, we have provided tremendous amount of support right from hospital tie-up to providing ambulances and foresee continuous engagements with them. So that is one of the reasons why we feel attrition has come down.

Obviously this will not be sustainable once the growth comes back, but we are quite confident that we should be able to sustain in a very narrow band going forward.

In terms of segment performance as I mentioned on a YoY basis, we had positive growth in Financial Services, in Life Sciences and HiTech. Retail was flattish. Other segments had lower growth but on a sequential basis almost every segment had a positive growth. So, from that perspective, we expect degrowth to have bottomed out and growth coming back. Obviously, the pace of growth will be much faster in HiTech, Energy Services and so on but in Retail, Manufacturing and other things it will take some time for recovery to happen but we have already started seeing some positive signs.

Nilanjan Roy

So Mugdha to your first question on the capital allocation, I think we have a clearly articulated capital allocation policy. We rolled that out last year in terms of an increased payout to our shareholder. So earlier it used to be 70% every year, now it is 85% over a period of five years and the whole idea was to give more predictability to our shareholders and give more cash back. So the Board considers in line with that policy every year with our cash flows and our projected earnings. Based on that in fact, that is the reason we had given the higher dividend of 50% on interim dividend on a YoY basis due to a better performance and higher cash flows on a YoY basis.

Garima

Thank you for the answers. We will now move on to the next question which is coming from Chandra from ET Now. Chandra please unmute yourself and ask your question.

Chandra Ranganathan

Thank you so much for talking to ET Now. When I interviewed you a few weeks ago, you gave us a little hint of what is coming but this is a clear outperformance. Sir I want to start by asking you, can these strong deal wins in Q2 be used as a run rate for the future? And Digital now is more than 45% for you. What is it going to be in the next two years and where do you stand as far as Infy’s contention as a bellwether is concerned? Do you believe, it is a serious contender for the bellwether title? Nilanjan, if you can take us through pricing. Salil mentioned during

the quarter that pricing is stable, but are these newer digital services giving you some pricing power? Pravin what percentage of employees continue to work from home? Will you look at a hybrid model going forward because you all have said that social capital is also important. How is it going to pan out going forward?

Salil Parekh

Thanks, Chandra, for those questions. I think on Digital what we are seeing is a continued change in the way different industries and different clients are looking at their digital journey. We have clearly seen through the last six months worldwide, as the people who were more advanced in how their digital infrastructure was set up, those companies have accelerated even faster. And this is a time when a lot of those industries and those companies are looking to go at a different pace. With the investments that we have made specifically in Digital over the last two and three years, that has been a tremendous benefit in what has happened. In terms of large deal wins those as we have discussed, and I have shared before are more volatile. So those are not predicted in every quarter at a certain level; however, we believe our pipeline is fairly good.

We are at 47% of Digital, I think very shortly we will cross over 50% mark, but the journey will keep continuing because the more capability that we build in this and work with different clients, the more opportunities we have in other spaces.

In terms of bellwether, my answer remains the same. I think it is clearly for other people to get those points and not for me. Nilanjan over to you!

Nilanjan Roy

Thanks, Salil. Your question on pricing, in fact, if you see Digital, we have historically seen our digital pricing has been at a higher level. But at the same time, there have been margin pressure in terms of pricing on the core. So that is the reason why some of that balances off. From a discount environment, definitely, in Q1, we saw a higher elevated level of discounts whereas some ongoing or some one-timers that has moderated a bit in this quarter and we are seeing some pricing impact of that. But like I said this varies from QoQ so there is no secular trend on it as well.

Chandra Ranganathan

Pravin on the work-from-home percentage?

Pravin Rao

In terms of work-from-home, today we have about 99% of the people globally working from home - in India, Americas, in parts of Australia, New Zealand it’s close to 99%. In Europe we have slowly started seeing some return to office. We have about roughly 10% of the people working in office in Continental Europe. We also have presence in China and Hong Kong and there it is the reverse we have about 90% of the people working in office and less than 10% working from home. The future as we have said it is a hybrid model where people will have the ability to work-from-home or work from office in a seamless manner. It will depend on the nature of work, client comfort and their own comforts as well and it is not the same set of people always working from home or working from office. So, for us I think the percentage is academic because the same set of people can at times work-from-home and work-from-office. So, our endeavor is to make sure that we create an environment where people have the ability to do that. Obviously given the need for social capital and other stuff there will always be a time when employees want to come and connect and interact with their colleagues and so on. We are not really stating any point on the percentage, we have to be flexible, and anyone should have the ability to work-from-home or work-from-office.

Garima

Thank you so much for answers. The next question is from Ayushman from Mint.

Ayushman Baruah

Thanks, Salil. My first two questions are for you. What are the trends in discretionary spend that you see, I know that the lines may be blurred now, but are clients willing to spend more on ‘good to have’ technologies rather than the ‘must have’? Second, which geographies are really driving your recovery, is it driven by the US or is it driven by UK and Europe. And for Nilanjan, could you just throw some light on the increase in PAT, I mean is this also affected by people working from home and less of traveling costs etc. Thank you.

Salil Parekh

Thanks for your question Ayushman. Discretionary spend is still patchy. What we see is where clients have embarked on a digital transformation journey or they have lot of focus on cost efficiency, automation and in some cases on consolidation of vendors, those are three quick themes that we see in how some of these discussions with our clients are playing out today. In terms of the growth, we have seen growth as you saw in the numbers in all geographies on the YoY basis and on a QoQ basis. To be clear there is more separation by industry. For example as Pravin was sharing earlier, HiTech is doing quite well for us today, Life Sciences is growing quite well, Financial Services is quite stable in its growth and then we see some of those, other industries starting to come back more on a QoQ basis, for example, Retail. With that let me pass it to Nilanjan for the other part.

Nilanjan Roy

Ayushman, I think clearly the reflection in PAT improvement is coming from higher growth and higher margins. And as I mentioned on the margins side, we had a margin improvement strategy at the beginning of COVID which was how do we attack all the cost levers. Clearly discretionary costs like travel etc., have helped the margins, you have seen our travel costs actually coming down quite sharply and of course we think some of this will return once the pandemic is behind and travel continues to start again. But we are seeing some of those benefits of work-from-home because of lower travel etc. On the same time I think we also invested some money in technology enablement for people who are enabled to work-from-home, technology spends and sourcing laptops to all our employees, our security communication spends also have gone up but all in all there have been a benefit because of work-from-home.

Garima

Thank you everyone. Sajeet can we have your question please.

Sajeet Manghat

Mr. Parekh my first question to you is on IT spends. You are speaking to many clients of yours. What is the kind of IT spending that you are seeing especially in the new technology space? Are you seeing a better deal conversion which is happening now because of reduced stress? Any of the faster conversions happening on the deals as we speak. For Pravin, especially the

BFSI space if you can give us an idea of how the entire BFSI space is now looking with respect to new applications, cloud, and some of the sectors like Retail and Energy, how are they looking for you. Nilanjan, the operating margin guidance that you are giving us 23% to 24%, my question is what is the assumption made behind that 23% to 24%? What percentage of your workforce is basically working from home and for the entire FY21 to get the margin of 23% to 24%? We also saw your employee benefit expenses coming down this quarter, what is the reason behind that?

Salil Parekh

Thanks, Sajeet. The deal conversions are about the same. There are some deal situations which on average most of the deal’s conversion timelines look about the same as what we saw at the start, which is about six months. So, nothing in that sense moved faster or slower. We see a good pace of deal conversions that are going through right now. In terms of what we see in the market itself the type of work is still focused more and more on digital work, cost efficiency and vendor consolidation. Pravin over to you on the BFSI and other sectors.

Pravin Rao

In the BFSI sector as I mentioned earlier, we have seen a positive growth in the banking space whereas spend in capital markets and cards and payment is a bit muted. In the banking space itself there is a lot of spend in, mortgage, in lending, in customer care, in payment space and also in enabling virtual ways of working through digital bank, digital consultancy and so on. There is also lot of focus on security and here it is a lot of application of artificial intelligence and analytics and so on. In the Retail space, we see a good traction in brokerage space, health and personal care we are seeing good traction in parts of the CPG. Obviously, again there is lot of focus on online commerce because there is a tremendous increase in online spend, adoption of online and almost every retailer and even CPG segment is also focusing on direct to consumer. In the Utility space, there is spend on grid modernization, there is spend on customer care and so on. So net-net in general across segments there is a lot of focus on enabling remote ways of working, lot of focus on accelerated digital transformation, lot of focus on migrating work load to cloud. Cloud is a big thing today because clients have very clearly recognized that Cloud brings in resiliency and the speed in which you can innovate can be much more faster if you are in a cloud environment. So that there is lot of cost spend on cloud as well and obviously

there is also focus on cost take out, the consolidation of vendors and all of those and these trends are common across the vertical.

Nilanjan Roy

Sajeet your question on margin, yes, we have upped our margin guidance for the year. As you have seen from 21% to 23%, which was previous guidance, to 23% to 24%. Clearly we have seen the first half improvement, but we think there will become headwinds in the second half as we start rolling out some of the deferred cost impact as we talked about the pay hikes, the hiring across, the promotions, so we will see some of that impact kicking in and will impact. We also know Q3 is a seasonally weaker quarter because of furlough from our clients, so that has been baked into the overall guidance of 23% to 24% for the year.

From a work-from-home perspective, I think we expect most of the year a lot of the work- from-home will continue as is. You could see some geographies opening up slightly, but I think most of this year we will continue to see that happen.

Garima

Thank you. We will take our next question from Saritha Rai from Bloomberg. Saritha, please unmute yourself and ask the question

Saritha Rai

Two questions from me. One is about digital revenues which grew over 25% and now closing in on half of your revenues, I am assuming that a lot of your clients are already sort of digitally transformed. I wanted a more nuanced glimpse into what kind of work are you doing which is new and innovative for clients especially clients in the BFSI sector? My second question is about H1B visas, since last week we saw the Trump administration further tightened restrictions of H1B which might affect almost a third overall H1B applications. How is that going to affect your onsite offsite balance and what about cost implications especially since you use quite a lot of contracted workers?

Salil Parekh

Thanks for that questions Saritha. I think, what we have seen with clients is a lot more work in digital and to give you a couple of examples, there is tremendous movement on how clients are leveraging the cloud. What they are doing with it, they are using the cloud to create new ways of distributing, what they are doing in terms of their product, how they are connecting to their suppliers, how they are connecting with their employees. So these type of different ways of leveraging this new technology, makes it much more efficient for many of our large clients to scale, to be flexible, to adapt. So if we look at Retail Industry, the e-commerce revolution is absolutely remarkable. In the type of stats you see whether you see it in the Western European markets, US markets, Asia and Pacific markets, what we are seeing in India and those are the sorts of digital transformation activities that we are more and more participating in.

For the second part, I will just give one view. Pravin will have much more depth on it. We started our localization work in the US specifically several years ago, that is another example of a strategic decision that was made by the company and that is paying benefits to us because with the regulatory changes, that decision where we built six digital centres, recruiting locally, will give us some benefit . For more specifics on this, Pravin over to you.

Pravin Rao

As Salil mentioned since 2017, we have aggressively embarked on a localization strategy. In the last three years, we have recruited more than 13,000 locals in US. Today, nearly 63% of our workforce are local and visa independent. We have also recruited from universities and we are also creating local talent as well through our training and technology capabilities. In addition, we have also expanded our presence in Mexico and Canada where we can provide same time zone services to our clients. At the end of the day, it is all about talent and we are very confident that we should be able to bring the right talent either locally or globally to our clients to meet their needs and we should be able to manage some of the challenges we are seeing on H1B visa with minimal impact.

Garima

Thank you. We will move to a next question now. It is from Shilpa Phadnis from The Times of India. Shilpa, please unmute yourself and ask the question.

Shilpa Phadnis

This question is to Mr. Parekh. The US fiscal stimulus has so far kept the IT downside in check. Do you think the concerns around discontinuing the stimulus in the US could threaten recovery and also impact the banking sector? My second question is on if you were to review your own three year transformation strategy, how would you see that playing out especially do you see the runway for recovery is taking a little longer post the pandemic. The third question, your revenue per employee has dropped to $53,500. I just wanted to get a clarity compared to last year it is a drop of $1000, how do you see that tying into your strategy of nearing 50% in digital revenue. Thank you

Salil Parekh

Thanks for your question Shilpa, I will start with the first one. We see strength in the US economy at this stage. We do not know specifically on the policy changes, but what we seen so far from both European and US where the economies have been supportive, we see a lot of strength in those economies and that is definitely positive for what we see in our business. More broadly we see the huge strength in technology, which is a very large mega trend worldwide that is driving some of these changes. In addition to that your second point of our three-year plan, some of the strategic choices we have made, we’ve talked about Digital, we talked about localization, our intense focus on large client partnerships and deals, the way we worked on reskilling, our own digital infrastructure within the company, all those elements and choices we have made a few years ago are what is resulting in where we are today. In fact my sense is our recovery is much faster than what we see with the industry as a whole. We are one of the few players who have YoY growth in this environment. And so we think we are gaining market share compared to what the industry is seeing and that is the function of where we see ourselves with our clients and the commitment of our employees.

Garima

Thank you. Next question is from Jochelle from ET Prime. Jochelle has sent a question over text, which I am going to read out. It is for Nilanjan on how the DSOs are holding up since we have seen record low DSOs in other companies. Nilanjan, could you please take that up?

Nilanjan Roy

Yes. So, we have also seen very good collections. I think our DSOs have sequentially dropped by two days and that has reflected in our free cash flows. In this time also we have extended some help over the last half year to some of our clients in terms of extended credit terms, etc. So, all in all I think if you see our cash flows, we have been very happy with what we have achieved and the reduction in DSOs.

Garima

Thank you Nilanjan. We will move to our next question for now. It is from Swathi Moorthy from MoneyControl.

Swathi Moorthy

Just a couple of questions; how much of an impact is the recent change in H1B is going to have on margins and what are the alternatives that you have, also offshoring has increased compared to last year to73.9%, some thoughts on that. Second question is about the hiring outlook? So, compared to the last quarter the number of headcounts increased to 240,208 despite onboarding freshers.

Pravin Rao

On the first question on the impact of H1B as I said earlier there are several levers and today we are less dependent and also the wage increase will immediately impact only the people who are going in the new LCAs going forward. It will not impact people who will go on the older LCAs or existing LCA. So, I think we have enough time for us to use many of the levers that I talked about including the nearshore, offshore, more aggressive onsite hiring and so on. So, I think, as we said earlier, we should be able to manage the challenges with minimal impact.

The second question I think was on hiring. In this quarter, we had about 5,500 additions in Infosys Limited roughly about 3,000 freshers and about 2,500 were laterals. For this year we are looking at about 16,500 freshers within India joining us and next year obviously the hiring has started for next year and we are probably looking at about 15,000 hires.

Garima

Thank you. The next question is from Rukmini Rao from Business Today.

Rukmini Rao

I just wanted some bit of insight around the pandemic driven cloud migration or any of those deals that are happening, is there some sense of commoditization of that and is there pricing pressure on such deals with most of the companies doing similar kind of work. Some bit of understanding around that. Thank you.

Salil Parekh

On the cloud deals that you referenced in this current environment, we are seeing, today at least there is no commoditization. In fact, what we are noticing is if you have depth of expertise and some of the acquisitions we have done in the last weeks, organically what we have grown within the capabilities whether it is in some of our partners on the public cloud, whether it is some of the partners on hybrid cloud or whether it is some of the SaaS players, more expertise than in the more capability combined with the industry knowledge the vendor position we have less of margin. These are sorts of things most clients are looking for.

Rukmini Rao

Is the premium, really more than what it was earlier on such deals, if they were?

Salil Parekh

I would not say there is a premium. I would definitely say there is no commoditization and the more differentiated you are, the more you are able to become more and more close to your clients in how these transactions and deals are done and as we build our scale overtime, we can start to look at what sort of premium that generate.

Garima

Thank you so much for the answer. We will take our next question from Stuti from PTI. I am going to read out that question. The question is for Salil. What will be the impact of recent announcement on H1B visa? Infosys had announced new hiring plans for US, how much of that has been completed and the last part is 63% locals in the US, is there a scope to increase it further?

Pravin Rao

I have already stated earlier, today we have about 63% of employees who are locals or visa independent in US and we have recruited about 13,000 people since we started this program about three year back and even before the new regulations we announced our intent to hire another 12,000 in the next two years. Finally the number of people we hire will be subject to availability of talent. And we are not only hiring laterals, but we are also hiring people from community colleges, people from local colleges, universities and we are training them, providing them digital skills and so on. As long as talent is available, we should be able to recruit as much as needed . We have recruited 13,000 people and in recent announcement we talked about 12,000 people that is for two years and it will happen over a period of time.

Garima

The next question is from Nikita Periwal from Cogencis. I am going to read out this question as well. Want to get a sense on interactions with clients in the Retail and Insurance space, would Retail be one of the last ones to recover?

Pravin Rao

As I said, we feel Retail was one of the segments other than Manufacturing which was impacted majorly by COVID. The sector is seeing very encouraging trends. This quarter we have seen growth in Retail. We have had 3 out of the 16 large deal wins from retail space, so we feel reasonably confident about this space. Clients are continuing to invest in online and in analytics. At the same time, we are also a little bit cautious given continued number of stores closing and, we have festival season where spend is likely to be lower and could have a furlough impact and so on. But the positive thing is growth has come back and I think in the next two quarter, is when we start seeing come back to normal. That is on the retail space.

Nikita Periwal

I have a couple of more questions. Your peers have indicated that they are seeing a mix of large as well as small deals. Is this something that you are seeing as well and if yes, what are these new industries that are coming up for spending in technology, what are they looking at? The second thing is you mentioned that you have been seeing a lot of vendor consolidation and people are obviously choosing bigger companies like Infosys, which they trust. In which sector are you seeing the maximum benefit of this vendor consolidation and any impact from Brexit because the deadline is nearing now?

Salil Parekh

Let me start with the trends, what we are seeing is more and more where we see companies which are focused on a few retail online tech companies which are changing, what they are doing for different types of consumers, companies which are more focused on taking advantage of the cloud infrastructure or the digital capabilities, those are the sorts of companies, our client base is the larger companies in the Global 2000 or Global 3000 and those are the types of companies where we see the biggest impact in, where we see more and more activity for the change. For the others, we see where they are going through large transformation programs where they are making changes to their established business models to leverage these new business models that are emerging and how those can be leveraged. On the vendor consolidation, we see several discussions, but we do not see a distinction across industries in those discussions. Those discussions are positive in that we see good affinity from our clients for us but those discussions will play out in my view over the next several quarters.

Garima

Thank you. We will take our next question now from Mini Tejaswi from The Hindu, which I will read out. It is for Salil. As you spoke about 100% variable pay, one-time special incentive, promotions, salary hike etc., can you elaborate on timeline and number of employees going to be covered under these and also a percentage of wage hike please?

Salil Parekh

As Pravin shared, we are going to look at what we do in terms of salary increases which is going to be a similar in the approach we have taken in previous years. I have already shared,

in terms of number of employees covered in one-time incentive, our focus is much more on our junior employees, all of our employees have contributed tremendously. Everyone in this environment as you can imagine is going through individual challenges, how everyone is working even if it is work from home, everyone has different ways of dealing with that situation. We have seen the contribution that the employees have made and they are absolutely incredible and that is in part a huge contributor to how the company has performed. That is the reason why we have announced performance bonus to recognize employees as we witness growth.

Garima

Thank you Salil. We will move on to our next question, it is from Megha Mandavia from The Economic Times.

Megha Mandavia

Thank you for the opportunity to ask this question. Hello everyone. Congratulations on a stellar quarter. The question I wanted to ask you was that change of guard is expected in the US, how is that impacting your decision making on IT spends, are they delaying or deferring, to after US Presidential Election. And the second question I wanted to ask was that can we expect a continued decline in onsite mix for the employees going forward in the US?

Salil Parekh

On the first part, we do not see a lot of activity going on in the US with respect to the elections, but we have seen with our interactions with our clients across different industries, decision- making has continued as they made progress on their transformation activities. In terms of the onsite mix, the way we see it and as Nilanjan was sharing earlier there are travel constraints in last few months and that has in part helped and those are programs we have put in place to become much more efficient. However, over time we will see some of the onsite mix will change as travel opens up.

Garima

Since we could not have Sankalp join us we have his question over text which I am going to read out. For Salil this question is while digital is growing to become nearly 50% of the business how is the run side of the business doing in this environment? We have seen some pricing pressure there earlier; has it improved or has the pricing pressure increased? The second question is for Pravin, you are saying that you are largely going to depend on the tech previously announced to meet H1B challenges, is there nothing new on that front that you will do?

Salil Parekh

Let me start on the first part in the terms of run and digital. As we shared digital is growing at 25%, what we are also seeing very clearly is in many situations, clients are transforming their core to become digital and in doing that that is where we see a lot of changes and lot of transformation happening in the client IT landscape. In terms of run, the run business is still a large part of our activity, running quite well. We have a special expertise in automation. We have deployed our AI capabilities into that space and that is giving us tremendous benefit both in expanding with our clients, giving them some benefits of this efficiency and then ensuring that we remain competitive in that space. For the second part, Pravin will reply.

Pravin Rao

The kind of regulatory changes we are seeing is something we have seen in the past and it will continue irrespective of which government comes to power. I think, the only way out is to reduce dependency on visa and that is the journey we are on the last three years. And we need to continue the journey as well. I said there are multiple levers available, once of course increasing localization and strengthening our presence in nearshore centres in the same time zone and finally, it is also about availability of talent as long as they have good talent. In this COVID environment we have seen how majority of the work can be done in a remote manner. So, it is possible, I think we are extremely confident to service our clients based on whatever talent they need, whether it is local onshore or with talent available in India and other parts of the world. So that is our focus, but in the long run we have to derisk the business and reduce dependency on visa.

Garima

Thank you so much, that wraps up our Q&A segment for today. Thank you so much Salil, Pravin and Nilanjan for answering all those questions so patiently. With that we will close today’s press conference. As we sign off, I would like to inform that the archive webcast of this press conference will be available on the Infosys website and our YouTube channel later today. Thank you once again for joining us. Take care and stay safe.

EX-99.4 ACQ AGREEMNT

Exhibit 99.4

Fact Sheet

 

 

 

 

EX-99.5 HOLDERS RTS

   Exhibit 99.5

Earnings Call

Infosys Earnings Call Q2 FY2021

October 14, 2020

CORPORATE PARTICIPANTS :

Salil Parekh

Chief Executive Officer & Managing Director

Pravin Rao

Chief Operating Officer

Nilanjan Roy

Chief Financial Officer

Sandeep Mahindroo

Financial Controller & Head Investor Relations

ANALYSTS

Yogesh Aggarwal

HSBC

Nitin Padmanabhan

Investec

Moshe Katri

Wedbush

Keith Bachman

Bank of Montreal

Sandeep Agarwal

Edelweiss

Bryan Bergin

Cowen

Kawaljeet Saluja

Kotak

Diviya Nagarajan

UBS

Ankur Rudra

JP Morgan

Pankaj Kapoor

CLSA

Moderator

Ladies and gentlemen good day and welcome to the Infosys earnings conference call. As a reminder all participant lines will be in the listen-only mode and there will an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing “*” then “0” on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Mahindroo. Thank you and over to you Sir!

Sandeep Mahindroo

Hello, everyone and welcome to the Infosys earnings call to discuss Q2 FY21 financial results. I am Sandeep from the Investor Relations Team in Bengaluru.

Joining us today on this call is CEO & MD, Mr. Salil Parekh, COO, Mr. Pravin Rao, CFO, Mr. Nilanjan Roy, along with other members of senior management team.

We will initiate the call with some remarks on the performance of the company by Salil, Pravin and Nilanjan on the most recently concluded quarter before opening up the call for questions.

Please note that anything which we say which refers to our outlook for the future is a forward-looking statement, which must be read in conjunction with the risks that the company faces. A complete statement of explanation of these risks is available in our filings with the SEC, which can be found on www.sec.gov.

I would now like to pass it on to Salil.

Salil Parekh

Thanks Sandeep. Good evening and good morning to everyone on the call. I trust each of you, are safe and healthy.

We had an exceptional quarter in the second quarter across multiple dimensions – client impact, revenues, digital scaling, large deal wins, continued account expansion, operating

margin expansion, strong cash flows and reduction in employee attrition. I am grateful to our clients for their continued trust in us and I am proud of our team for their incredible commitment to our clients.

Let me share with you some of the highlights for Q2:

1. Revenues in constant currency grew at 2.2% YoY and 4.0% sequentially on the back of a very strong Q1.

2. Our growth for H1 over H1 was 1.9% in constant currency terms.

3. Digital revenues grew at 25.4% YoY in constant currency and now accounts for 47.3% of our revenues.

4. We delivered operating margin of 25.4%, which is an expansion of 370 basis points YoY and 270 basis points sequentially. This was achieved after rewarding our employees with variable pay at 100% and awarding a onetime special bonus.

5. Large deal wins, which are wins of work above $50 mn in TCV per contract were at

$3.15 bn.

6. Large deal pipeline remained strong as clients look at accelerating digital transformation programs and continuing their focus on automation and cost efficiency.

7. Our voluntary attrition in IT services is at 7.8%.

8. Our operating cash flow was at 793 mn, a 52% increase YoY.

9. Our balance sheet remained strong with cash and investments positions at $4.6 bn with no debt.

Our industry leading performance over the first half of this year has been due to the immense commitment of our over 240,000 employees. Recognizing the continuing stellar contribution from our employees during these times

1. We are paying out variable pay for the quarter at 100%.

2. We will pay a onetime special incentive in Q3 for junior level employees.

3. The salary increase process will restart now and will be effective as of January 1, 2021.

4. We restarted promotions in the last quarter at our junior levels. This will now be expanded across all levels.

I am thankful to each one of our employees for staying deeply committed to serving our clients as they themselves navigated their own personal challenges associated with the ongoing COVID situation and the remote operating model.

We launched Infosys Cobalt where we brought together all our cloud services, platforms and solutions to support our clients in accelerating their cloud journey and reducing the risk to their cloud programs. Cobalt has 200 industry templates and 14000 cloud components available to our clients for their cloud first programs. Cobalt is built with strong partnerships with leading SaaS, PaaS and Infra as a Service companies across public, private and hybrid cloud environments.

In Q2, we took another large step in our local hiring plans in the US. In the past three years, we have launched six digital centers in the US and hired over 13,000 US workers. We now announced plans to hire an additional 12,000 US workers over the next two years, bringing our hiring commitment in the US to 25,000 over five years. We believe our localization approach is a significant market differentiator and will help us better navigate regulatory changes. The sustained localization investments will ensure that we are able to continue servicing our clients across markets with a combination of local and global talent.

The past three months also saw us announce three acquisitions, GuideVision focused on ServiceNow, Blue Acorn focused on Adobe and Kaleidoscope focused on medical product design.

Our service delivery continues to be exceptional. The feedback from clients remains positive and the dedication of our employees is tremendous. Today 99% of our workforce continues to work from home.

Our results in Q2 are a combination of our continued focus on the needs of our clients, steady execution and our clear strategy to build a digital and cloud aligned company. Looking ahead, we continue to see strong traction in our business.

We increase our revenue guidance for the full year from 0%-2% to 2%-3% growth in constant currency YoY. We increase our operating margin guidance for the full year from 21%-23% to 23%-24%.

Thank you. Now let me request Pravin to update you on our operations. Over to you Pravin!

Pravin Rao

Thank you, Salil. Hello everyone. Hope you are all well and safe.

As we continue to wade through the continuing complexities posed by the pandemic, our rock solid focus on client relevance and employee wellbeing is helping us navigate this challenge successfully.

With most of our delivery centers across the globe remaining closed, the vast majority of our employees are working effectively from home and we are making all efforts to ensure ease of work delivery in a secure manner.

Growth accelerated during the quarter as economies across the world started opening up gradually and clients focused on technology to help overcome the impediments. Revenues increased by 4.0% sequentially on constant currency on top of the robust performance in Q1. YoY growth continued to remain positive and increased further to 2.2% in constant currency. Q2 revenues included only a marginal contribution from the Vanguard deal, which should start ramping up from Q3 onwards.

Several operating parameters improved during the quarter- utilization, onshore delivery share, RPP and subcon costs. Utilization in Q2 improved by 240 bps to 83.6%, mainly on account of improvement in offshore utilization. Onsite, offshore effort mix improved by 190 bps to 26.1%, the lowest ever. RPP also improved both YoY and on sequential basis.

Client metrics remained strong. We added 96 clients during the quarter while the number of

$100 mn+ clients increased by 5 sequentially to reach 30 at the end of Q2.

Large deal wins in the Q2 was the highest ever, at $3.15 bn. We won 16 large deals in Q2 out of which 6 deals were in Financial Services, 3 deals in Retail, 2 deals each in Communication and High-Tech and 1 deal each in Energy Utility Resources and Services, Manufacturing and others. Region wise, 11 were from America, 4 were from Europe, and 1 from the Rest of the World. Share of new deals was 86%.

Voluntary attrition for IT services declined to 7.8% and significantly lower than our comfort band of 14% to 15%. Recognizing the stellar efforts of our employees, which have been the key reason for our strong performance in last six months, we have decided to effect salary increase across all level effective January 1, 2021. We are paying 100% variable pay for Q2 along with a special incentive, which will be paid to employees in lower levels.

Recently the US Department of Labor and Homeland Security issued two separate rules, restricting the H1-B Visa program on both scrutinizing qualifications and mandating significantly higher wages. However, our dedicated focus over the past three years on a local American workforce and our technology and innovation hubs across the US, give us the ability to navigate across this new regulatory terrain.

Moving to business segments:

Financial Services saw continued improvement in performance both on YoY and sequential basis. The uptick in business has been in areas that banks are investing in significantly post COVID such as mortgage servicing, call center technology and operations, lending services to cater to various government relief programs as well as pickup of large digital transformation programs. We have signed 6 large deals in this segment in the last quarter including the Vanguard deal. This should propel revenue growth for Financial Services in the coming quarters.

Finacle, our award-winning banking platform has received multiple industry recognitions during the quarter and we are seeing a lot of traction as banks across the world embark on their digital transformation.

We have also started seeing some momentum back in retail with increased volumes in Q2 and ramp up of earlier deal wins. We however remain cautious on this segment given the continuing demand and liquidity issues and possibly increased furloughs in the coming months.

Performance in Communication segment remained weak given pressure on spending, especially in media, entertainment, advertising and OEM segments. We continue to have a strong pipeline of deals in these segments and have won two large deals in the last quarter which should help in stabilizing the performance for this segment.

Energy, Utility, Resources and Services vertical is also under pressure due to constraint spending in the Oil and Gas, Travel and Hospitality and Resources sectors. However, the current volatility is presenting significant opportunities for cost take out and we continue to build a strong pipeline.

Manufacturing segment was stable during the quarter, which is a massive improvement from the sequential decline in Q1. While there are disruptions across sub-segments, we are seeing opening of pockets, although the pace of recovery may remain sluggish. Cost take out is a major focus for our clients across sectors. We expect gradual improvement in this segment with recovery in volumes and robust new account openings. The deal pipeline remains at a healthy level and makes us hopeful of the future prospects.

Our Digital portfolio is growing strong at over 25% YoY in constant currency and now constitutes 47.3% of overall revenues. In the last quarter, we have been rated as leader in 11 services related capabilities across digital pentagon areas by industry analysts.

Lastly, my heartfelt condolences to the families of five of our colleagues whom we lost due to the pandemic. We stand together and are extending all possible supports to their families during these trying times.

With that, I will hand over to Nilanjan.

Nilanjan Roy

Thanks Pravin. Hope all of you are well and safe with your families and loved ones.

On the back of a strong Q1, Q2 continues to show improving performance with our unwavering focus on client relevance, operational excellence, cost and liquidity management.

Revenues for the quarter grew 4% sequentially in constant currency. This translates to 2.2% growth YoY and 1.9% for H1 YoY in constant currency.

Operating margins expanded by 270 basis points sequentially to 25.4%. The sequential improvement in margins was led by:

- 100 basis points improvement due to increase in RPP,

- 80 bps due to 2.4% increase in utilization, and

- 80 bps due to a 1.9% improvement in onsite and offshore mix, partly due to the temporary travel restrictions.

Benefits from reduction from SG&A and other expenses were offset by increase in depreciation and amortization and cross currency headwinds.

Improved Q2 margin performance has consequently led to H1 operating margins at 24.1%, higher than the 21% to 23% band and 3% higher compared to 21.1% reported for the comparative prior period.

As some of the margin improvement had risen from the cost deferrals etc., we expect some of these benefits to shrink in H2, as we roll out promotions and salary hikes for employees, commence hiring across the organization, with higher travel and overhead costs. All this will consequently impact H2 margins.

Q2 EPS grew by 14.9% in dollar terms and by 20.8% in INR on a YoY basis. H1 EPS grew by 9.5% in dollar terms and 17.1% in INR on a YoY basis.

Collections remained robust with DSO reducing by 2 days to 69. The increase in capex spend during the quarter was mainly towards technological enablement of our employees. FCF for Q2 was a healthy $674 mn, which is a growth of 70% YoY and a 59% in H1 growth YoY. Free cash flow as a percentage of net profit was 103% for Q2 and 116% for H1.

Return on equity increased to 26.7% compared to 25.1% in the prior year.

We continue to maintain a very strong, debt free and liquid balance sheet. Cash and investments at the end of Q2 were $4.55 bn. Yield on cash balance improved to 6.33% in Q2 compared to 6.11% in the previous quarter. Q2 marked the 21^st consecutive quarter of positive forex income despite significant currency volatility across the globe.

Consistent with the improved cash flow and our capital allocation policy, the Board has declared an interim dividend of Rs.12 which is a 50% growth over the interim dividend per share of FY2020.

Based on the strong performance in H1, we are increasing our guidance on revenue for FY21 to 2%-3% in constant currency terms from the previously announced 0%-2%. We are also increasing the margin guidance for this year from 21% -23% to 23%-24%.

With that we can open the call for questions.

Moderator

Thank you very much. We will now begin the question and answer session. The first question is from the line of Yogesh Aggarwal from HSBC. Please go ahead.

Yogesh Aggarwal

Just two clarifications if I may? Firstly, while you have upgraded guidance, the second half implied guidance does not look that strong – largely in-line with the seasonality despite such strong deal wins and there is a little bit contribution hopefully from the acquisitions as well. So, are you expecting some decline in certain verticals going forward? Secondly, on the cost front Nilanjan, employee cost is down QoQ. This is despite the bonus and special incentives. So, is that largely the offshore mix?

Salil Parekh

Let me start with the first one. For Q3 and Q4, we see steadily improving QoQ activity in different industries. For example, High-Tech is looking strong, as Pravin mentioned, Life Sciences is good, Financial Services is stable, Retail also is now starting to see some progress. However, there are furlough impact in Q3 normally and traditionally, Q4 has always been a soft quarter for Infosys. So, we do not see anything negative in the outlook and in fact, we have raised our guidance keeping in mind the strong demand that we see and a good conversion of large deals that we have in place.

Nilanjan Roy

Yogesh, if you see from a net headcount perspective, we only added about 1000 people. So this was less than 0.5%, so there was not much of a headcount change. But in absolute terms,

you are right, the onsite and offshore mix has helped the overall employee cost to come down. But like I said, this is temporary due to the travel restrictions imposed.

Moderator

Thank you. The next question is from the line of Nitin Padmanabhan from Investec. Please go ahead.

Nitin Padmanabhan

Thanks for taking my question, and congrats on a great quarter. I had two questions, one is on the deals that we have won so far. Excluding Vanguard what is the nature of services that you are largely seeing within these deals? Are you seeing a lot more app modernization, cloud migration? The second is, how are clients funding these spends? You did mention that this time, we had a one-time offshore shift because of travel restrictions, do you see clients funding incremental spends through higher offshore shifts going forward? Thank you.

Salil Parekh

The types of things we are seeing in our deal pipeline and what we have closed are essentially are in three areas:

- One is an area which is on everything related to digital transformation, for which a large part is cloud, and the area around cloud migration, cloud deployment, building cloud first applications, rolling out SaaS, working in public and hybrid cloud, private cloud environments.

- The second relates to efficiency which is focused on automation, cost efficiency and how the IT estate can essentially be modernized and made to be more efficient for our clients.

- And the third, we are seeing some in the pipeline, which is on vendor consolidation, where the benefits we will see over the next few quarters in terms of conversions, but we have discussions in those areas where we see some traction.

In terms of how the client is funding it, the main thesis as you alluded is taking cost out of existing estate through automation or the means and funding programs which give growth differentiation, access and experience for our clients for their work going forward. Part of it will be the next in offshore, because clearly these last few months has also demonstrated what could be done in an offshore environment. But, despite all of that, we still see that there will be both volume growth and revenue growth, which is within our pipeline.

Nitin Padmanabhan

So, I think on the offshore perspective, if I got it right, you were suggesting that so far the offshore shift is travel restriction based, but there could be future offshore shifts based on the experience that we have seen so far. Is that the right takeaway?

Salil Parekh

The onsite - offshore mix ratio is difficult to forecast in that sense. Once the travel restrictions become less, there will probably be more work onsite. Equally structurally, there is now more understanding of what are the possibilities on offshore. So those are both countervailing in the sense of how they will play out. And the timing also will not be clear – which one will happen first and at what speed, but both of those are relevant points as we look ahead into the mix.

Moderator

The next question is from the line of Moshe Katri from Wedbush Securities. Please go ahead.

Moshe Katri

Thank you very much, and congratulations for the team. Two questions here. One, given the fact that the M&A pace is accelerating, is there a way to quantify the expected contributions from M&A to your guidance for FY21 in terms of growth? Then just as a follow-up, did you just say that the renewal rates for bookings was 14% for the quarter, which is actually good in terms of incremental new business. Thank you.

Salil Parekh

On the second one, Pravin will comment on the net new and the renewal.

On the first, there were three M&A transactions we did over the last three months. I do not know if there will be an acceleration. We have a good pipeline of deals. We have not quantified in our business model, the percentage that will come in that sense from M&As. We do not have a targeted percentage from M&A. What we do have is a fairly clear view of areas- we did something in Salesforce, in Adobe; we did something in Product Design, we have done something in ServiceNow. So those are specific areas where we see tremendous growth and a good organic business within the company. So that should be the way we play. In terms of this year specifically, we do not have a target that how much will come from M&A.

Pravin Rao

You are right. The net new in the total large deal TCVs is 86% and obviously these numbers do vary QoQ, depending on the nature of deal. There are times when lot of renewals come in a particular quarter. But, this is obviously a very positive thing, higher net new is definitely good news.

Moshe Katri

When you look at your bid and proposal pipeline for the next 6 to 12 months, would you say that the mix is different in terms of renewals versus new deals? Is there anything different in terms of the historical mixes?

Pravin Rao

It is a combination, right? We have got a healthy mix of both renewals, as well as net new in the mix. It is difficult to predict the timelines when these deals will get closure. So that will probably have a bearing in terms of the percentage of net new. Probably, if you look at historical trend, may be the percentage of net new in this pipeline is probably on the higher side. At this stage, I can't really quantify how much higher it is, but it is definitely on the higher side.

Moderator

The next question is from the line of Keith Bachman from Bank of Montreal. Please go ahead.

Keith Bachman

I had a couple of questions. First if, could you clarify, when you talked about in the press release the TCV that was booked in the quarter $3.15 bn, what was the growth rate of that YoY, is my first question? The second question- is there a limit that you see for offshore work? I know you said there was tension on some forces at work that would suggest more onshore work, but there are cost advantage of offshore work – in quarter 2 it was 73.9%. Is there a limit on how high you think that percent could go, any natural barriers to that moving higher, which is a significant enhancement of margin? Third question, could you tell us how many of your employees are currently using visas in the U.S.? Thank you very much.

Salil Parekh

Thanks for that question. I will go with the second one and then Pravin can jump in with the answers on the other two.

In terms of the offshore percent, is there a natural limit? I think there is certainly an ability for more work to be done offshore. There are different things that have opened up as we’ve all learnt, both the clients and us through the course of the last six months. So, I don’t see that there is some sort of a ceiling there.

What is also critical is, as we see more and more work going on, relating to experience and how design is working through some of our digital studios, we see some of that work also expanding and that work has benefits from having some proximity and it can also be done from an offshore perspective.

So specifically, we do not see any sense of ceiling to the offshore work, but it is a function of how that starts to get carved out in different discussions and what the client approach is as that moves on.

Nilanjan Roy

So, we did last year $2.8 bn in Q2, this year $3.1bn in Q2, but the big difference is, last year we had only 11% of net new in the figure. We are now at 86%. So, the quality of the order book has dramatically improved.

Pravin Rao

What was the third question?

Keith Bachman

Number of visas currently at use of your employee base in the U.S. either net new or renewals, just the current number of employees out of your employee base that are subject to visas in the U.S?

Nilanjan Roy

As we mentioned, what we call visa dependent employees in the U.S., currently we are at about 37%.

Moderator

The next question is from the line of Sandeep Agarwal from Edelweiss. Please go ahead.

Sandeep Agarwal

Thanks for the opportunity, and first of all, congrats on excellent execution and excellent numbers. I also wish all Infoscions good health. A very good gesture by management of rewarding employee’s in-line with world-class technology companies like Amazon. I have just two questions. One is, the leakage on core has still been quite high in the current quarter also, and all our strong growth and good work on digital is hurt because of that. So, when do you think this will probably stabilize or do you think it will continue for long in the same way? The reason I am asking this question is because our small competitors like EPAM and others in other geographies, they are growing at the same percentage at a much lower base, but they have this advantage of the core not hurting them. So that is question number one.

Question number two, do you think this pandemic has put cloud on a faster acceleration than even digital and we will see those benefits going forward? Also, if you can answer on the attrition, what is your understanding on the attrition level going forward, are you okay with 7.5% kind of ratio or do you think it will shoot up to low-double digit? Thanks a lot.

Salil Parekh

I will answer the second one on digital and cloud and on the first and the third question Pravin will come back. The way we are seeing, overall digital growth continues to be robust at 25%. I think you are right, we see our clients are adopting cloud at a faster pace. In keeping with some of that and our own capabilities, we launched our own cloud set of assets under the name of Infosys Cobalt. We see a tremendous traction on the cloud side and we see it in quite good shape in many places and some of the acquisitions we are doing are also further strengthening already where we are good and where we can expand faster. So cloud is definitely something that's working well. We believe obviously, it will work for the next several years.

Pravin Rao

Today when we look at what is happening, clients are investing in technology to deal with the pandemic, building resiliencies, fixing supply chain issues and so on. We are seeing tremendous uptick in digital transformation of workplace, which started about couple of years back and this pandemic has only accelerated it, as every client is looking at how to become resilient in the post COVID world. Obviously, the IT spend is not increasing, so they are really funding this digital transformation initiatives by taking costs out from the core through automation and other means. So that is one aspect of it.

Secondly in general, I think the IT spend is always a percentage of overall revenues and more often it remains the same steady percentage. People are able to fund some of the discretionary spend or digital spend by repurposing – by taking away from core. So, as your digital share increases, you will always see the core shrinking because we are talking about the same pie. As long as you are seeing overall growth which is positive for us and in fact wherever we are seeing some of our core shrinking, we also have a play because part of the core shrinking is also because we are proactively taking ideas to customer, taking costs out and other things.

In many of the large deal wins, in fact almost every large deal that we win, has some element of modernization of legacy. So that means that part of the core gets modernized and now that gets counted under digital. So the way to look at it is you have a pie of IT spend and within the IT spend clients actually mix between core and they will invest some in core but they will also look at how to optimize core, so that they can fund some of the newer technologies and some of the discretionary spends that they need, to stay competitive.

As long as we continue to grow and we continue to have a role to play both in terms of core as well as in the digital spend then, we view it as a very positive thing.

Now on the attrition, the attrition that we have today is one of the lowest we have seen in the history of Infosys. It is a combination of two things; one, the combination of the market and how we have reacted to the pandemic. It is also about the focus that we have put in terms of employee welfare, lot of engagements with the employees in the virtual world. We also recognized that employees have been under stress. So, there is a lot of focus on both physical and mental wellness and so on.

We have launched more than 200 interventions, involving families, and we also supported them a lot during the pandemic particularly in cases where employees have tested positive and so on. So, it is a combination, employees are really appreciative of how the company has gone beyond in terms of enabling them to work-from-home as well as dealing with the current crisis. But the reality is, once the market opens up there will be some amount of attrition going up because there will definitely be a war for talent. Our sense is, over a period of time it will probably go back to maybe a low double digit as we talked about, which has always been our comfort zone over the years.

Moderator

Thank you. The next question is from the line of Bryan Bergin from Cowen and Company. Please go ahead.

Bryan Bergin

Thank you. I wanted to ask first on margin sustainability. So, I understand that you have some benefits that dissipate in the second half, but based on how you are delivering projects

today, and how clients have become more accepting of virtual delivery, how should we think about the sustainability of some of the cost factors here as operations normalize? Is there any ability to give us a sense on how much of the mix of the margin expansion you have shown is lasting versus short-term?

Nilanjan Roy

Like I mentioned in my speech, that we have seen this benefit on account of three levers which kick started at the beginning of the year. First was the cost deferrals which we talked about in terms of promotions, the wage hikes, the recruitment fees which we had implemented at the beginning of the first quarter and we clearly see that coming back and this will start impacting the margins. It has helped us in the first half, but it will start impacting the margins – we have talked about that from January 1, 2021 we will rollout wage hike across all levels. We have also mentioned that the promotions which had been limited largely to the junior level employee will now be across. So, we will see headwind from that.

Second is we had cut discretionary expenditure like travel, as you can see that in our results, of course travel has come down dramatically, some of the more discretionary expenditures like brand building etc., also were cut back. We will see some of that going up as well.

Third, is the strategic cost levers, which for us is the most important. This is an ongoing program which we have around the offshore onsite mix. We have seen some benefits of that temporarily and as Salil had mentioned in an earlier question, we will see some timing issues of that as travel returns, but strategically we have seen that coming down over a period of time and our intent remains to continue to see that onsite-offshore mix changing.

For the pyramid, we have done a lot of work around broad basing the pyramid offshore and are now looking at that in the onsite as well. The hub strategy helps us inculcating freshers from community colleges, etc., and the onsite pyramid as well.

Automation remains at the heart. We continue to get more and more productive and efficient for our clients. Some of that is passed back to our clients as discounts and improved productivity and part of that goes to margin improvement strategically. So, these are the different strategic levers.

As we have talked about the three-pronged approach, we will see some of this come back but it is premature to say that how much of this is sustainable. Work-from-home is very premature as of now in terms of what does it do for facilities or travel, but we think that some of this will come back and if we move to a hybrid model, it remains to be seen, how much of that benefits we can keep. We will have to invest more in technology, in communication, in security. So, there may be some balancing there as well, so it is a bit premature to talk about that.

Bryan Bergin

Just to clarify, so that last bucket or that last prong around strategic levers, how much was the benefit YoY in margin from some of those operational actions?

Nilanjan Roy

I do not think we have given this number out before but I can tell you the year before that in FY20, we had set a target of $150 mn of savings and we had overachieved against that number.

Bryan Bergin

Two quick housekeeping ones I may have missed here. Did you say how much the Vanguard deal was within the $3.15 bn of signings? And how much is the inorganic included in your updated FY2021 revenue growth outlook?

Nilanjan Roy

We have not and we do not mention the deal sizes. In terms of our inorganic growth, it is a very, very small portion. Many of them have just kicked off in terms of the signing implementation. So that impact is going to be very marginal for the rest of the year.

Moderator

Thank you. The next question is from the line of Kawaljeet Saluja from Kotak. Please go ahead.

Kawaljeet Saluja

Hi, thank you for the opportunity and congratulations to the management team on a fantastic quarter. My question is also on profitability. Now, I understand that certain cost deferrals have led to an increase in the margin band this year. But at the end of day for Infosys, the margin band has kept on, bouncing around quite a bit in the last three to four years. Now, many of the companies work with a certain aspirational margin band. So, how should really one think about, the current year’s margin band increase? Should one assume that this is the more sustainable band going forward? Or, any thoughts on this would be welcome.

Nilanjan Roy

I think we have been very focused over the last two years in the margin guidance band of 21% to 23% because the year prior to that when we rolled out the new strategy, this was about making the investments in the hubs, in the sales force side and clearly that had an impact on margin. So, we have been very conscious that we need to get the stability in margin, which is why 21% to 23% margin guidance was given in the prior two years. For us the most critical part is to continue to show stability rather than what exactly what you mentioned was much more volatile. Clearly, this is an exceptional year in more ways than one with so many moving parts and variable elements. Many of these, like I said, will not be sustainable. They are, one-timers in terms of deferrals. So, things will come back to normal, but for us, we are confident that our strategic levers will continue to help us making sure that we continue to stay in a steady and stabilized margin environment. Of course, our aspiration is to always improve margins, but in no way can we take the 23% to 24% as something which you can model and go ahead from.

Kawaljeet Saluja

Sorry, did you say that 23% to 24% is a sustainable margin band?

Nilanjan Roy

I said there is no way you can take 23% to 24% as a sustainable number going forward.

Kawaljeet Saluja

That absolutely helps. The second thing is I was surprised with the increase in RPP. I thought that we are living in recession. The increase in RPP is a remarkable achievement, is that largely operations led? Do a cost takeout a figure in client discussions quite a lot? And if yes, when does the impact of that really come in into RPP going forward?

Nilanjan Roy

This is the first one quickly on RPP, the 100 bps is a combination of multiple factors. One is, of course, a day's impact during this quarter. We have seen some improvement in productivity as well through our automation. So, these are the two large ones, and slightly more moderated discount environment. But like I said, discounts always are not secular, so you can always see these ups and downs as well. These are the three carve outs within that 100 bps. Salil, you can take the other one.

Salil Parekh

The point on the cost discounts versus RPP with client discussions, as Nilanjan was sharing, the environment in Q2 especially has been quite stable vis-à-vis discounts. What I mean is not anything unusual, it has been a small number anecdotal and so we feel quite comfortable at this stage and there is none of that large sort of thing coming in into the RPP. But as Nilanjan explained, there were some specific reasons, we are also quite focused on RPP. We will make sure over time, we find a sustained method of doing it should we watch and see how that goes over the next few quarters.

Moderator

The next question is from the line of Diviya Nagarajan from UBS. Please go ahead.

Diviya Nagarajan

Thanks for taking my question and congrats on a blowout quarter this quarter. I think most of my questions have been discussed. So let me focus on another topic here, which is your headcount. Nilanjan earlier pointed out that this quarter, we have seen a fairly muted headcount addition. How do you see this in the rest of the year? That is the first part of my question and secondly, I appreciate that you said that, there are some strategic cost levers and

there are some that you cannot predict given the fluidity of the situation. I heard you quote a

$50 mn target that you were looking at for your strategic cost initiative savings. How has that trended so far? What is that target? Could you quantify that please?

Pravin Rao

On the headcount, the headcount increase will be in line with the growth. This quarter, we had 5,500 additions, about 3,000 were freshers both in India and abroad, and about 2,500 laterals. Our utilization, if you recall, was much lower in Q1 and it has improved significantly but the number of hiring was on the lower side this quarter. So hiring in subsequent Q3, Q4 will obviously be dependent on the growth. In terms of freshers in India, this year, we expect to onboard about 16,500 people and next year we are planning to add another 15,000 people. This is mainly freshers in India.

Nilanjan Roy

I will finish the cost optimization part. We planned for $150 mn, we have exceeded that. We are well on the way of doing similar numbers this year, well above $150 mn, but like I said lot of this then gets compensated by price and wage hikes etc. So, it is not that all these money flows into the bank.

Diviya Nagarajan

Salil, back to the digital growth numbers that we have seen, we have seen a fairly steady 25% kind of growth number on the digital side. Given that this is definitely a scenario where we are looking at possible acceleration in digital spends overall, how do you see the scope for this number accelerating in the next 12-24 months?

Salil Parekh

Diviya, if you look in the previous financial year, we had growth numbers around 30%-35% in one of the quarters and even higher in some other. But there are two factors, one, our size of the digital also is quite large, so it is pretty close to half of our company today. That is practically an over $6 bn business growing at 25%, which is quite remarkable. So, that has its own sets of constraints especially in services type of companies and second is the underlying

secular trend. Today as we were discussing earlier, the cloud part of digital is on a terrific growth path in terms of the market, in terms of what clients are doing, in terms of what large partners are doing. And then there are other areas for example, on data, on experience which are having good traction. So, we will obviously try to drive that faster still, but we also have a large size, so we have to find a way to keep it at this level as well.

Diviya Nagarajan

Sorry, if I might just sneak in one last question, you did talk about how legacy is likely to kind of be taken out, the core gets modernized and therefore that trend of negative momentum that we have seen could continue. But we have seen in the last two quarters, the pace of core decline accelerate. Do you expect that will stabilize and go back to where it was pre-COVID as customers start to stabilize?

Pravin Rao

Okay, I can take a shot at this, Salil, you can add. My one sense is, given the nature of the pandemic and how clients are reacting to it, you will see a lot more of spend on technology. And clients also realize that for them to implement and take advantage of technology, their legacy has to be modern, it has to be agile. Otherwise, it is tough to get the benefit and to drive any innovations in their own organization. So at least I do expect the pace of modernization of legacy to continue much more aggressively than what we have seen in the past.

Moderator

The next question is from the line of Ankur Rudra from JP Morgan. Please go ahead.

Ankur Rudra

Thank you and congratulations. Indeed an exceptional performance all around. Just the first question, Salil, a very strong performance both on revenues and deal wins. If you could just unpack this a bit more, how much of this is a reflection of the overall demand environment versus your ability to gain share in the new state of play and what is helping you do that?

Salil Parekh

The way we see it is, we have had YoY revenue growth. Some of our large peers have had YoY declines. We definitely see market share gain going on in that play. A part of it is, some of the strategic choices we made and investments we made over the past several years, for example, scaling up digital, working in a very focused way on looking at large deals, looking at what we are doing including what Pravin was describing earlier on localization, an extreme focus on reskilling that we have put into place and our own internal digital infrastructure, which has helped us.

We are completely digital from the inside and also have scaled the work-from-home very rapidly in this COVID landscape, which has given increased trust to our clients. Part of it is I think, has been with the demand environment itself in a good shape, specifically for these sorts of activities where the investments have come. Of course, there is a lot of it in our business, as you know well, is the steady execution, a continuous sort of traction to that. So, I think those are the combination of things which are sustaining us so far and hopefully we keep at the execution and that sustains further.

Ankur Rudra

Just a follow up to that, you know, I think this was asked before, but maybe you can unpack this a bit more, your implied guidance for the second half, it appears to be slightly at odds to the strength we have seen so far in the first half including the current momentum of the deals won. Is this due to some planned offshore shift or conservatism on the outlook based on something you are seeing out there and building in?

Salil Parekh

Today, one person’s conservatism is another person’s aggression. We see a very good guidance increase on revenue. There is furlough effect in Q3 and as you know in Q4 Infosys historically had a fairly muted quarter. There are no specific constraints from which we model it. We generally model it from the view of what we have seen as the past – view of the business plus the current deals that we have closed and the pipelines that we are seeing. We are seeing good traction all around as we have described. It is a big change from 0% to 2% to

2% to 3% - we have moved the bottom by 2 percent points, so it is a quite big change in terms of revenue growth guidance.

Ankur Rudra

Just lastly, the pandemic is clearly giving you a significant margin tailwind. Is it time to think about this strategically? Will you, for example, think about this to enter market spaces in situations that you otherwise wouldn't participate to try and expand your addressable market if this tailwind sustains?

Salil Parekh

Without knowing specifically which addressable market you are thinking of, the general answer would be yes. There are markets which we would love to be in, however, what we see today is the ones we have defined have got a nice traction in them and we can deepen our presence in those quite well. Given our operating model, we can build a good business in them at our margin structure for the future. But generally we would look at other market as well.

Moderator

The next question is from the line of Pankaj Kapoor from CLSA. Please go ahead.

Pankaj Kapoor

Salil, first a clarification, did I hear you right when you said that the vendor consolidation is still something that you are in talks with the clients and we have not yet seen a major deal or a relationship conversion so far, is that the right way to understand that?

Salil Parekh

On vendor consolidation there is discussion, it is in our pipeline. We have seen few small things moving. My sense is those things will play out over multiple quarters, because this is a business which has an inherent stickiness. But there is a big change in perceptions in this COVID time, in work-from-home, delivery quality, impact, stability of company and so on.

So my sense is many of those will play out over time when we have seen some early benefit of it, but not a material benefit.

Pankaj Kapoor

Second what kind of macro environment are you building in, in your guidance given that the band also has now reduced, so have you factored in any potential second wave of pandemic coming in the end user markets or do you think that this is something which could be over and above to what your estimates are?

Salil Parekh

Today, we have considered a scenario which is based on how we have seen the trajectory move in the global economy in Q1 and Q2. If we see something dramatic in terms of second wave, in terms of COVID that is not something that we have put into our model. We do not anticipate it, of course it is a possibility no one quite knows what that scenario could be. But we generally modeled it on how we have seen this Q1 and Q2 evolve and that is how we move to the next couple of quarters for this financial year.

Pankaj Kapoor

On the order book, if I take out the Vanguard deal, how does the order book composition look like – is it dominated by the smaller sized deals or besides Vanguard also there are fairly large deals dominating it?

Salil Parekh

We are not decoupling large deals number there as you know. What I can say is generally speaking, within large deal wins in the last few quarters plus the pipeline, we have a decent size of mega deals. There aren’t obviously loads of them, but there is a decent number of them and there is a decent number of other sizes as well there.

Pankaj Kapoor

Is it possible to understand how the new versus renewal ratio would be, if we exclude Vanguard, will that be similar to our historical run rate?

Salil Parekh

If you look, let us say, 12 months ago or 24 months ago, the net new number percent we see in this quarter is good for sure. In general, in the pipeline it seems to be a little bit higher than that percentage. So decoupling the Q2 number- that would not be the way to look at it as we look ahead.

Moderator

Thank you. Ladies and gentlemen that was the last question for today. I now hand the conference over to the management for closing comments.

Salil Parekh

Thank you everyone for joining this session. We are really excited with the way this quarter has played out. The commitment of our employees has been incredible. It has been the most critical element in serving our clients. And you can see from our actions, we really make sure we addressed that absolutely fully. We are delighted with the growth we have seen overall and in digital and with the margin profile of our business. And that has really given us the confidence to increase both the revenue and the margin guidance. Thank you all for joining in the call. Take care. Stay safe.

Moderator

Thank you very much members of the management. Ladies and gentlemen on behalf of Infosys that concludes this conference call. Thank you for joining us, you may now disconnect your lines.

EX-99.6 ADVSER CONTR

Exhibit 99.6
Form of Release to Stock Exchanges

INDEPENDENT Auditor’s Report ON THE AUDIT OF THE CONSOLIDATED FINANCIAL RESULTS

To The Board of Directors of INFOSYS Limited

Opinion

We have audited the accompanying Statement of Consolidated Financial Results of INFOSYS Limited (the “Company”) and its subsidiaries (the Company and its subsidiaries together referred to as the “Group”) for the quarter and half year ended September 30, 2020, (the “Statement”) being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

In our opinion and to the best of our information and according to the explanations given to us, the Statement:

(i) includes the results of the entities as given in the Annexure to this report;

(ii) is presented in accordance with the requirements of Regulation 33 of the Listing Regulations; and

(iii) gives a true and fair view in conformity with the recognition and measurement principles laid down in the Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”) prescribed under section 133 of the Companies Act, 2013 (the “Act”) read with relevant rules issued thereunder and other accounting principles generally accepted in India of the consolidated net profit and consolidated total comprehensive income and other financial information of the Group for the quarter and half year ended September 30, 2020.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (“SAs”) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in Auditor’s Responsibilities for audit of the consolidated financial results section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the consolidated financial results under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion.

Management’s Responsibilities for the Consolidated Financial Results

This Statement, which is the responsibility of the Company’s Management and approved by the Company’s Board of Directors, has been compiled from the audited interim condensed consolidated financial statements for the quarter and half year ended September 30, 2020. The Company’s Board of Directors is responsible for the preparation and presentation of these consolidated financial results that

give a true and fair view of the consolidated net profit and consolidated other comprehensive income and other financial information of the Group in accordance with the recognition and measurement principles laid down in the Ind AS 34, prescribed under Section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations.

The respective Boards of Directors of the companies included in the Group are responsible for maintenance of the adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the respective financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial results by the Directors of the Company, as aforesaid.

In preparing the consolidated financial results, the respective Boards of Directors of the companies included in the Group are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate their respective entities or to cease operations, or have no realistic alternative but to do so.

The respective Boards of Directors of the companies included in the Group are responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for Audit of the Consolidated Financial Results

Our objectives are to obtain reasonable assurance about whether the consolidated financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors.

• Evaluate the appropriateness and reasonableness of disclosures made by the Board of Directors in terms of the requirements specified under Regulation 33 of the Listing Regulations.

• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial results, including the disclosures, and whether the consolidated financial results represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the Financial Information of the entities within the Group to express an opinion on the consolidated financial results. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the consolidated financial results of which we are the independent auditors.

Materiality is the magnitude of misstatements in the consolidated financial results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial results may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial results.

We communicate with those charged with governance of the Company and such other entities included in the consolidated financial results of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

 

Sanjiv V. Pilgaonkar

Partner

Place: Mumbai Date: October 14, 2020 (Membership No.039826)
(UDIN: 20039826AAAAGS6910)

Annexure to Auditors’ Report

List of Entities:

1. Infosys Technologies (China) Co. Limited

2. Infosys Technologies S. de R. L. de C. V.

3. Infosys Technologies (Sweden) AB.

4. Infosys Technologies (Shanghai) Company Limited

5. Infosys Tecnologia DO Brasil LTDA. (effective October 01, 2019, merged into Infosys Consulting Ltda.)

6. Infosys Nova Holdings LLC.

7. EdgeVerve Systems Limited

8. Infosys Austria GmbH

9. Skava Systems Pvt. Ltd.

10. Kallidus Inc.

11. Infosys Chile SpA

12. Infosys Arabia Limited

13. Infosys Consulting Ltda.

14. Infosys CIS LLC

15. Infosys Luxembourg SARL

16. Infosys Americas Inc.

17. Infosys Public Services, Inc.

18. Infosys Canada Public Services Inc.

19. Infosys BPM Limited

20. Infosys (Czech Republic) Limited s.r.o.

21. Infosys Poland Sp Z.o.o

22. Infosys McCamish Systems LLC

23. Portland Group Pty Ltd

24. Infosys BPO Americas LLC.

25. Infosys Consulting Holding AG

26. Infosys Management Consulting Pty Limited

27. Infosys Consulting AG

28. Infosys Consulting GmbH

29. Infosys Consulting S.R.L, Romania

30. Infosys Consulting SAS

31. Infosys Consulting s.r.o.

32. Infosys Consulting (Shanghai) Co., Ltd.(formerly Lodestone Management Consultants Co., Ltd)

33. Infy Consulting Company Limited

34. Infy Consulting B.V.

35. Infosys Consulting Sp. Z.o.o

36. Lodestone Management Consultants Portugal, Unipessoal, Lda.

37. Infosys Consulting S.R.L, Argentina

38. Infosys Consulting (Belgium) NV

39. Panaya Inc.

40. Panaya Limited.

41. Panaya GmbH

42. Panaya Japan Co. Ltd (liquidated effective October 31, 2019)

43. Brilliant Basics Holdings Limited

Annexure to Auditors’ Report

List of Entities:

44. Brilliant Basics Limited

45. Brilliant Basics (MENA) DMCC (liquidated effective July 17, 2020)

46. Infosys Consulting Pte Ltd.

47. Infosys Middle East FZ LLC

48. Fluido Oy

49. Fluido Sweden AB (Extero)

50. Fluido Norway A/S

51. Fluido Denmark A/S

52. Fluido Slovakia s.r.o

53. Fluido Newco AB

54. Infosys Compaz PTE. Ltd

55. Infosys South Africa (Pty) Ltd

56. WongDoody Holding Company Inc.

57. WDW Communications, Inc.

58. WongDoody, Inc

59. HIPUS (Acquired on April 01, 2019)

60. Stater N.V. (Acquired on May 23, 2019)

61. Stater Nederland B.V. (acquired on May 23, 2019)

62. Stater Duitsland B.V. (acquired on May 23, 2019)

63. Stater XXL B.V. (acquired on May 23, 2019)

64. HypoCasso B.V. (acquired on May 23, 2019)

65. Stater Participations B.V. (acquired on May 23, 2019)

66. Stater Deutschland Verwaltungs-GmbH (acquired on May 23, 2019)

67. Stater Deutschland GmbH & Co. KG (acquired on May 23, 2019)

68. Stater Belgium N.V./S.A. (Acquired on May 23, 2019)

69. Outbox systems Inc. dba Simplus (US) (acquired on March 13, 2020)

70. Simplus North America Inc. (acquired on March 13, 2020)

71. Simplus ANZ Pty Ltd. (acquired on March 13, 2020)

72. Simplus Australia Pty Ltd (acquired on March 13, 2020)

73. Sqware Peg Digital Pty Ltd (acquired on March 13, 2020)

74. Simplus Philippines, Inc. (acquired on March 13, 2020)

75. Simplus Europe, Ltd. (acquired on March 13, 2020)

76. Simplus U.K., Ltd. (acquired on March 13, 2020)

77. Simplus Ireland, Ltd. (acquired on March 13, 2020)

78. Infosys Limited Bulgaria EOOD (incorporated effective September 11, 2020)

79. Infosys Employees Welfare Trust

80. Infosys Employee Benefits Trust

81. Infosys Science Foundation

82. Infosys Expanded Stock Ownership Trust

INDEPENDENT AUDITOR’S REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF INFOSYS LIMITED

Opinion

We have audited the accompanying Statement of Standalone Financial Results of INFOSYS LIMITED (the “Company”), for the quarter and half year ended September 30, 2020, (the “Statement”), being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

In our opinion and to the best of our information and according to the explanations given to us, the Statement:

a. is presented in accordance with the requirements of Regulation 33 of the Listing Regulation; and

b. gives a true and fair view in conformity with the recognition and measurement principles laid down in the Indian Accounting Standard 34 “Interim Financial Reporting” (Ind AS 34) prescribed under section 133 of the Companies Act, 2013 (the “Act”) read with relevant rules issued thereunder and other accounting principles generally accepted in India of the net profit and total comprehensive income and other financial information of the Company for the quarter and half year ended September 30, 2020.

Basis for Opinion

We conducted our audit of the Statement in accordance with the Standards on Auditing (“SA”s) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in Auditor’s Responsibilities for the Audit of the Standalone Financial Results section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the Standalone Financial Results under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion.

Management’s Responsibilities for the Standalone Financial Results

This Statement, which is the responsibility of the Company’s Management and approved by the Board of Directors, has been compiled from the related audited interim condensed standalone financial statements for the quarter and half year ended September 30, 2020. The Company’s Board of Directors is responsible for the preparation and presentation of the standalone financial results that give a true and fair view of the net profit and other comprehensive income and other financial information in accordance with the recognition and measurement principles laid down in Ind AS 34, prescribed under Section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial results that give a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the standalone financial results, the Board of Directors is responsible for assessing the Company’s ability, to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the financial reporting process of the Company.

Auditor’s Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone financial results as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors.

• Evaluate the appropriateness and reasonableness of disclosures made by the Board of Directors in terms of the requirements specified under Regulation 33 of the Listing Regulations.

• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial results, including the disclosures, and whether the standalone financial results represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the standalone financial results of the Company to express an opinion on the standalone financial results.

Materiality is the magnitude of misstatements in the standalone financial results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial results may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial results.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

 

Sanjiv V. Pilgaonkar

Partner

Place: Mumbai Date: October 14, 2020 (Membership No.039826)
(UDIN:20039826AAAAGU4722)

  Infosys Limited Regd. office: Electronics City, Hosur Road,
Bengaluru – 560 100, India CIN : L85110KA1981PLC013115 Website: www.infosys.com email: investors@infosys.com T: 91 80 2852 0261, F: 91 80 2852 0362 

Statement of Consolidated Audited Results of Infosys Limited and its subsidiaries for the quarter and half-year ended September 30, 2020 prepared in compliance with the Indian Accounting Standards (Ind-AS)

(in crore, except per equity share data)

Particulars	Quarter ended September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
	Audited	Audited	Audited	Audited	Audited	Audited
Revenue from operations	24,570	23,665	22,629	48,234	44,432	90,791
Other income, net	570	475	626	1,046	1,362	2,803
Total Income	25,140	24,140	23,255	49,280	45,794	93,594
Expenses
Employee benefit expenses	13,400	13,604	12,675	27,004	24,977	50,887
Cost of technical sub-contractors	1,634	1,626	1,651	3,260	3,291	6,714
Travel expenses	151	116	599	267	1,427	2,710
Cost of software packages and others	1,108	893	680	2,001	1,296	2,703
Communication expenses	162	163	129	324	256	528
Consultancy and professional charges	286	262	341	548	631	1,326
Depreciation and amortisation expenses	855	756	727	1,611	1,408	2,893
Finance cost	48	48	42	96	82	170
Other expenses	746	880	915	1,626	1,763	3,656
Total expenses	18,390	18,348	17,759	36,737	35,131	71,587
Profit before tax	6,750	5,792	5,496	12,543	10,663	22,007
Tax expense:
Current tax	1,763	1,321	1,488	3,084	2,947	5,775
Deferred tax	129	199	(29)	328	(123)	(407)
Profit for the period	4,858	4,272	4,037	9,131	7,839	16,639
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net	7	147	(22)	154	(39)	(180)
Equity instruments through other comprehensive income, net	(5)	(1)	2	(6)	5	(33)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedges, net	27	(6)	17	21	(7)	(36)
Exchange differences on translation of foreign operations	21	164	(35)	185	(10)	378
Fair value changes on investments, net	(45)	54	2	9	18	22
Total other comprehensive income/(loss), net of tax	5	358	(36)	363	(33)	151
Total comprehensive income for the period	4,863	4,630	4,001	9,494	7,806	16,790
Profit attributable to:
Owners of the company	4,845	4,233	4,019	9,078	7,817	16,594
Non-controlling interest	13	39	18	53	22	45
	4,858	4,272	4,037	9,131	7,839	16,639
Total comprehensive income attributable to:
Owners of the company	4,847	4,586	3,984	9,434	7,782	16,732
Non-controlling interest	16	44	17	60	24	58
	4,863	4,630	4,001	9,494	7,806	16,790
Paid up share capital (par value 5/- each, fully paid)	2,123	2,122	2,121	2,123	2,121	2,122
Other equity *#	63,328	63,328	62,778	63,328	62,778	63,328
Earnings per equity share (par value 5/- each)**
Basic ()	11.42	9.98	9.46	21.40	18.28	38.97
Diluted ()	11.40	9.97	9.44	21.37	18.25	38.91

* Balances for the quarter and half year ended September 30, 2020 and quarter ended June 30, 2020 represents balances as per the audited Balance Sheet for the year ended March 31, 2020 and balances for the quarter and half year ended September 30, 2019 represents balances as per the audited Balance Sheet for the year ended March 31, 2019 as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

** EPS is not annualized for the quarter and half year ended September 30, 2020, quarter ended June 30, 2020 and quarter and half year ended September 30, 2019.

^# Excludes non-controlling interest

1. Notes pertaining to the current quarter

a) The audited interim condensed consolidated financial statements for the quarter and half-year ended September 30, 2020 have been taken on record by the Board of Directors at its meeting held on October 14, 2020. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unmodified audit opinion. The information presented above is extracted from the audited interim condensed consolidated financial statements. These interim condensed consolidated financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter.

b)

Estimation of uncertainties relating to the global health pandemic from COVID-19 ( COVID-19):

The Group has considered the possible effects that may result from COVID-19 in the preparation of these interim condensed consolidated financial statements including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of COVID-19, the Group has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Group's financial statements may differ from that estimated as at the date of approval of these interim condensed consolidated financial statements.

c)	Acquisitions
	Kaleidoscope Animations, Inc. :
	On October 9, 2020, Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) acquired 100% of voting interests in Kaleidoscope Animations, Inc. a US based Product Design and Development firm, for a total consideration of up to $ 42 million (approximately 310 crore), comprising of cash consideration, contingent consideration and retention payouts, payable to the employees of Kaleidoscope Animations, Inc over the next three years, subject to their continuous employment with the group along with achievement of set targets for respective years. The payment of contingent consideration to sellers of Kaleidoscope Animations, Inc is dependent upon the achievement of certain financial targets by Kaleidoscope Animations, Inc.
	GuideVision s.r.o :
	On October 1, 2020, Infy Consulting Company Limited (Wholly-owned subsidiary of Infosys Consulting Holding AG) acquired 100% of voting interests in GuideVision s.r.o , a ServiceNow Elite Partners in Europe for a total consideration of up to Euro 30 million (approximately 259 crore), comprising of cash consideration, contingent consideration and retention payouts payable to the employees of GuideVision s.r.o over the next three years, subject to their continuous employment with the group. The payment of contingent consideration to sellers of GuideVision s.r.o is dependent upon the achievement of certain financial targets by GuideVision s.r.o.

d)	Proposed Acquisition:
	On October 8, 2020 Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire Blue Acorn iCi, a US based Adobe platinum partner and a digital customer experience company, for a total consideration of up to $125 million (approximately 922 crore) including bonuses, subject to fulfillment of customary closing conditions.

e)

Business transfer - Kallidus Inc. and Skava Systems Private Limited:

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently on August 15, 2020 , the company entered into a business transfer agreement to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of 171 crore and 66 crore respectively. The transaction was between a holding company and a wholly owned subsidiary and therefore was accounted for at carrying values and did not have any impact on the consolidated financial statements.

f)	Employee stock grants
	On recommendation of the Nomination and Remuneration Committee, the Board on October 14, 2020 approved the grant of 33,900 RSUs to certain eligible employees under the 2015 Plan. The grant date for these RSUs is November 1, 2020. The RSUs would vest over a period of three to four years and the exercise price of RSUs will be equal to the par value of the share.

g) On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020.

h) The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

2.	Information on dividends for the quarter and half year ended September 30, 2020
	The Board of Directors declared an interim dividend of 12/- per equity share. The record date for the payment is October 26, 2020.The interim dividend will be paid on November 11, 2020. The interim dividend declared in the previous year was 8/- per equity share.

 (in )

Particulars	Quarter ended September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year Ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
Dividend per share (par value 5/- each)
Interim dividend	12.00	–	8.00	12.00	8.00	8.00
Final dividend	–	–	–	–	–	9.50

3. Audited Consolidated Balance Sheet 

(in crore)

Particulars	As at
	September 30, 2020	March 31, 2020
ASSETS
Non-current assets
Property, plant and equipment	12,332	12,435
Right of use assets	4,195	4,168
Capital work-in-progress	1,216	954
Goodwill	5,360	5,286
Other Intangible assets	1,752	1,900
Financial assets
Investments	7,754	4,137
Loans	23	21
Other financial assets	642	737
Deferred tax assets (net)	1,305	1,744
Income tax assets (net)	5,402	5,384
Other non-current assets	1,272	1,426
Total non-current assets	41,253	38,192
Current assets
Financial assets
Investments	3,600	4,655
Trade receivables	17,930	18,487
Cash and cash equivalents	22,411	18,649
Loans	130	239
Other financial assets	6,359	5,457
Income tax assets (net)	–	7
Other current assets	6,895	7,082
Total current assets	57,325	54,576
Total Assets	98,578	92,768
EQUITY AND LIABILITIES
Equity
Equity share capital	2,123	2,122
Other equity	68,877	63,328
Total equity attributable to equity holders of the Company	71,000	65,450
Non-controlling interests	434	394
Total equity	71,434	65,844
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities	4,068	4,014
Other financial liabilities	805	807
Deferred tax liabilities (net)	863	968
Other non-current liabilities	722	279
Total non-current liabilities	6,458	6,068
Current liabilities
Financial liabilities
Trade payables	2,375	2,852
Lease liabilities	647	619
Other financial liabilities	10,060	10,481
Other Current Liabilities	5,325	4,842
Provisions	686	572
Income tax liabilities (net)	1,593	1,490
Total current liabilities	20,686	20,856
Total equity and liabilities	98,578	92,768

The disclosure is an extract of the audited Consolidated Balance Sheet as at September 30, 2020 and March 31, 2020 prepared in compliance with the Indian Accounting Standards (Ind-AS).

4. Audited Consolidated Statement of Cash Flows 

(in crore)

Particulars	Half-year ended September 30,
	2020	2019
Cash flow from operating activities
Profit for the period	9,131	7,839
Adjustments to reconcile net profit to net cash provided by operating activities:
Income tax expense	3,412	2,824
Depreciation and amortization	1,611	1,408
Interest and dividend income	(804)	(861)
Finance cost	96	82
Impairment loss recognized / (reversed) under expected credit loss model	159	82
Exchange differences on translation of assets and liabilities	(7)	54
Stock compensation expense	174	119
Other adjustments	(60)	(102)
Changes in assets and liabilities
Trade receivables and unbilled revenue	(67)	(1,578)
Loans, other financial assets and other assets	415	410
Trade payables	(477)	(1,071)
Other financial liabilities, other liabilities and provisions	773	930
Cash generated from operations	14,356	10,136
Income taxes paid	(2,987)	(2,705)
Net cash generated by operating activities	11,369	7,431
Cash flows from investing activities
Expenditure on property, plant and equipment and intangibles	(1,306)	(1,891)
Loans to employees	–	5
Deposits placed with corporation	(133)	(7)
Interest and dividend received	708	841
Payment towards acquisition of business, net of cash acquired	–	(511)
Payment of contingent consideration pertaining to acquisition of business	(150)	–
Redemption of escrow pertaining to Buyback	–	257
Other receipts	25	23
Payments to acquire Investments
Preference, equity securities and others	–	(41)
Tax free bonds and government bonds	–	(19)
Liquid mutual funds and fixed maturity plan securities	(11,960)	(18,295)
Non convertible debentures	(829)	(52)
Government securities	(4,664)	(1,561)
Others	(1)	(16)
Proceeds on sale of financial assets
Tax free bonds and government bonds	–	18
Non-convertible debentures	720	1,383
Government securities	1,529	1,170
Commercial paper	–	500
Certificates of deposit	900	1,995
Liquid mutual funds and fixed maturity plan securities	11,850	18,946
Preference and equity securities	–	3
Others	22	10
Net cash (used in) / from investing activities	(3,289)	2,758
Cash flows from financing activities:
Payment of lease liabilities	(351)	(294)
Payment of dividends (including dividend distribution tax)	(4,031)	(5,422)
Payment of dividend to non-controlling interest of subsidiary	(20)	(33)
Shares issued on exercise of employee stock options	6	1
Buyback of equity shares including transaction cost	–	(7,478)
Net cash used in financing activities	(4,396)	(13,226)
Net increase / (decrease) in cash and cash equivalents	3,684	(3,037)
Cash and cash equivalents at the beginning of the period	18,649	19,568
Effect of exchange rate changes on cash and cash equivalents	78	(58)
Cash and cash equivalents at the end of the period	22,411	16,473
Supplementary information:
Restricted cash balance	404	375

The disclosure is an extract of the audited Consolidated Statement of Cash flows for the half year ended September 30, 2020 and September 30, 2019 prepared in compliance with Indian Accounting Standard (Ind AS) 34 Interim Financial Reporting.

5. Segment reporting (Consolidated - Audited) 

(in crore)

Particulars	Quarter ended September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year Ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
Revenue by business segment
Financial Services (1)	7,871	7,457	7,213	15,328	14,069	28,625
Retail (2)	3,651	3,391	3,448	7,043	6,883	14,035
Communication (3)	3,093	3,165	2,961	6,257	5,964	11,984
Energy, Utilities, Resources and Services	3,027	3,027	2,962	6,054	5,796	11,736
Manufacturing	2,241	2,256	2,291	4,497	4,390	9,131
Hi-Tech	2,244	2,063	1,713	4,307	3,392	6,972
Life Sciences (4)	1,672	1,575	1,454	3,246	2,795	5,837
All other segments (5)	771	731	587	1,502	1,143	2,471
Total	24,570	23,665	22,629	48,234	44,432	90,791
Less: Inter-segment revenue	–	–	–	–	–	–
Net revenue from operations	24,570	23,665	22,629	48,234	44,432	90,791
Segment profit before tax, depreciation and non-controlling interests:
Financial Services (1)	2,360	2,001	1,866	4,361	3,579	7,306
Retail (2)	1,300	1,048	1,038	2,349	2,070	4,212
Communication (3)	663	621	623	1,284	1,245	2,424
Energy, Utilities , Resources and Services	825	851	818	1,676	1,542	3,216
Manufacturing	655	506	509	1,160	922	2,059
Hi-Tech	669	598	392	1,268	762	1,604
Life Sciences (4)	565	476	392	1,039	670	1,431
All other segments (5)	46	20	7	67	12	64
Total	7,083	6,121	5,645	13,204	10,802	22,316
Less: Other Unallocable expenditure	855	756	733	1,611	1,419	2,942
Add: Unallocable other income	570	475	626	1,046	1,362	2,803
Less: Finance cost	48	48	42	96	82	170
Profit before tax and non-controlling interests	6,750	5,792	5,496	12,543	10,663	22,007

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ All other segments include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

Notes on segment information

Business segments

Based on the "management approach" as defined in Ind-AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented along these business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments.

Segmental capital employed

Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. The Management believes that it is not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

6. Audited financial results of Infosys Limited (Standalone Information) 

(in crore)

Particulars	Quarter ended September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
Revenue from operations	21,046	20,325	19,666	41,372	38,797	79,047
Profit before tax	6,163	5,378	5,123	11,542	9,943	20,477
Profit for the period	4,497	4,008	3,829	8,505	7,398	15,543

The audited results of Infosys Limited for the above mentioned periods are available on our website, www.infosys.com and on the Stock Exchange website www.nseindia.com and www.bseindia.com. The information above has been extracted from the audited interim standalone condensed financial statements as stated.

	By order of the Board
	for Infosys Limited
Bengaluru, India	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
October 14, 2020

The Board has also taken on record the condensed consolidated results of Infosys Limited and its subsidiaries for the quarter and half-year ended September 30, 2020, prepared as per International Financial Reporting Standards (IFRS) and reported in US dollars. A summary of the financial statements is as follows:

(in US$ million, except per equity share data)

Particulars	Quarter September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
	Audited	Audited	Audited	Audited	Audited	Audited
Revenues	3,312	3,121	3,210	6,433	6,340	12,780
Cost of sales	2,125	2,071	2,140	4,196	4,261	8,552
Gross profit	1,187	1,050	1,070	2,237	2,079	4,228
Operating expenses	347	342	374	690	741	1,504
Operating profit	840	708	696	1,547	1,338	2,724
Other income, net	76	63	89	140	195	395
Finance cost	6	6	6	12	12	24
Profit before income taxes	910	765	779	1,675	1,521	3,095
Income tax expense	255	201	207	456	403	757
Net profit	655	564	572	1,219	1,118	2,338
Earnings per equity share *
Basic	0.15	0.13	0.13	0.29	0.26	0.55
Diluted	0.15	0.13	0.13	0.29	0.26	0.55
Total assets	13,363	13,037	12,021	13,363	12,021	12,260
Cash and cash equivalents and current investments	3,526	2,886	2,820	3,526	2,820	3,080

* EPS is not annualized for the quarter and half year ended September 30, 2020, quarter ended June 30, 2020 and quarter and half year ended September 30, 2019.

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

  Infosys Limited Regd. office: Electronics City, Hosur Road,
Bengaluru – 560 100, India CIN : L85110KA1981PLC013115 Website: www.infosys.com email: investors@infosys.com T: 91 80 2852 0261, F: 91 80 2852 0362 

Statement of Audited results of Infosys Limited for the quarter and half-year ended September 30, 2020 prepared in compliance with the Indian Accounting Standards (Ind-AS)

(in crore, except per equity share data)

Particulars	Quarter ended September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
	Audited	Audited	Audited	Audited	Audited	Audited
Revenue from operations	21,046	20,325	19,666	41,372	38,797	79,047
Other income, net	582	478	604	1,060	1,316	2,700
Total income	21,628	20,803	20,270	42,432	40,113	81,747
Expenses
Employee benefit expenses	11,053	11,222	10,604	22,275	20,985	42,434
Cost of technical sub-contractors	2,125	2,095	2,046	4,220	4,090	8,447
Travel expenses	136	92	482	228	1,182	2,241
Cost of software packages and others	548	481	410	1,029	773	1,656
Communication expenses	121	114	94	235	187	381
Consultancy and professional charges	225	193	253	418	486	1,066
Depreciation and amortisation expense	608	546	542	1,154	1,052	2,144
Finance cost	31	31	28	62	55	114
Other expenses	618	651	688	1,269	1,360	2,787
Total expenses	15,465	15,425	15,147	30,890	30,170	61,270
Profit before tax	6,163	5,378	5,123	11,542	9,943	20,477
Tax expense:
Current tax	1,526	1,225	1,316	2,752	2,632	5,235
Deferred tax	140	145	(22)	285	(87)	(301)
Profit for the period	4,497	4,008	3,829	8,505	7,398	15,543
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability / asset, net	6	156	(18)	162	(35)	(184)
Equity instruments through other comprehensive income, net	(5)	–	2	(5)	2	(31)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedges, net	27	(6)	17	21	(7)	(36)
Fair value changes on investments, net	(45)	49	1	4	16	17
Total other comprehensive income/ (loss), net of tax	(17)	199	2	182	(24)	(234)
Total comprehensive income for the period	4,480	4,207	3,831	8,687	7,374	15,309
Paid-up share capital (par value 5/- each fully paid)	2,129	2,129	2,129	2,129	2,129	2,129
Other Equity*	60,105	60,105	60,533	60,105	60,533	60,105
Earnings per equity share ( par value 5 /- each)**
Basic ()	10.56	9.41	8.97	19.97	17.22	36.34
Diluted ()	10.55	9.41	8.96	19.96	17.21	36.32

* Balances for the quarter and half year ended September 30, 2020 and quarter ended June 30, 2020 represents balances as per the audited Balance Sheet for the year ended March 31, 2020 and balances for the quarter and half year ended September 30, 2019 represents balances as per the audited Balance Sheet for the year ended March 31, 2019 as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

** EPS is not annualized for the quarter and half year ended September 30, 2020, quarter ended June 30, 2020 and quarter and half year ended September 30, 2019.

1. Notes pertaining to the current quarter

a) The audited interim condensed standalone financial statements for the quarter and half-year ended September 30, 2020 have been taken on record by the Board of Directors at its meeting held on October 14, 2020. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unmodified audit opinion. The information presented above is extracted from the audited interim condensed standalone financial statements. These interim condensed standalone financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter.

b)

Estimation of uncertainties relating to the global health pandemic from COVID-19 ( COVID-19):

The Company has considered the possible effects that may result from COVID-19 in the preparation of these interim condensed standalone financial statements including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of COVID-19, the Company has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company's financial statements may differ from that estimated as at the date of approval of these interim condensed standalone financial statements.

c)

Business transfer - Kallidus Inc. and Skava Systems Private Limited:

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently on August 15, 2020 , the company entered into a business transfer agreement to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of 171 crore and 66 crore respectively. The transaction was between a holding company and a wholly owned subsidiary and the resultant impact of 176 crore on account of business transfer was recorded in "Business transfer adjustment reserve" in the standalone financial statements.

d)	Employee stock grants
	On recommendation of the Nomination and Remuneration Committee, the Board on October 14, 2020 approved the grant of 33,900 RSUs to certain eligible employees under the 2015 Plan. The grant date for these RSUs is November 1, 2020. The RSUs would vest over a period of three to four years and the exercise price of RSUs will be equal to the par value of the share.

e) On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020.

f) The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

2.	Information on dividends for the quarter and half-year ended September 30, 2020
	The Board of Directors declared an interim dividend of 12/- per equity share. The record date for the payment is October 26, 2020.The interim dividend will be paid on November 11, 2020. The interim dividend declared in the previous year was 8/- per equity share.

(in )

Particulars	Quarter ended September 30,	Quarter ended June 30,	Quarter ended September 30,	Half-year Ended September 30,		Year ended March 31,
	2020	2020	2019	2020	2019	2020
Dividend per share (par value 5/- each)
Interim dividend	12.00	–	8.00	12.00	8.00	8.00
Final dividend	–	–	–	–	–	9.50

3. Audited Standalone Balance Sheet 

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
ASSETS
Non-current assets
Property, plant and equipment	11,011	11,092
Right of use assets	2,930	2,805
Capital work-in-progress	1,206	945
Goodwill	167	29
Other Intangible assets	85	48
Financial assets
Investments	17,331	13,916
Loans	21	298
Other financial assets	541	613
Deferred tax assets (net)	1,061	1,429
Income tax assets (net)	4,772	4,773
Other non-current assets	1,116	1,273
Total non-current assets	40,241	37,221
Current assets
Financial assets
Investments	2,982	4,006
Trade receivables	15,618	15,459
Cash and cash equivalents	16,247	13,562
Loans	283	307
Other financial assets	4,921	4,398
Other current assets	5,817	6,088
Total current assets	45,868	43,820
Total assets	86,109	81,041
EQUITY AND LIABILITIES
Equity
Equity share capital	2,129	2,129
Other equity	64,714	60,105
Total equity	66,843	62,234
LIABILITIES
Non-current liabilities
Financial liabilities
Lease liabilities	2,927	2,775
Other financial liabilities	89	49
Deferred tax liabilities (net)	489	556
Other non-current liabilities	623	207
Total non - current liabilities	4,128	3,587
Current liabilities
Financial liabilities
Trade payables
Total outstanding dues of micro enterprises and small enterprises	–	–
Total outstanding dues of creditors other than micro enterprises and small enterprises	1,359	1,529
Lease liabilities	418	390
Other financial liabilities	7,397	7,936
Other current liabilities	3,977	3,557
Provisions	629	506
Income tax liabilities (net)	1,358	1,302
Total current liabilities	15,138	15,220
Total equity and liabilities	86,109	81,041

The disclosure is an extract of the audited Balance Sheet as at September 30, 2020 and March 31, 2020 prepared in compliance with the Indian Accounting Standards (Ind-AS).

4. Audited Standalone Statement of Cash flows 

(In crore)

Particulars	Half-year ended September 30,
	2020	2019
Cash flow from operating activities:
Profit for the period	8,505	7,398
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization	1,154	1,052
Income tax expense	3,037	2,545
Impairment loss recognized / (reversed) under expected credit loss model	123	53
Finance cost	62	55
Interest and dividend income	(734)	(837)
Stock compensation expense	154	107
Other adjustments	2	(66)
Exchange differences on translation of assets and liabilities	(20)	28
Changes in assets and liabilities
Trade receivables and unbilled revenue	(268)	(1,763)
Other financial assets and other assets	457	478
Trade payables	(209)	(363)
Other financial liabilities, other liabilities and provisions	184	190
Cash generated from operations	12,447	8,877
Income taxes paid	(2,692)	(2,353)
Net cash generated by operating activities	9,755	6,524
Cash flow from investing activities:
Expenditure on property, plant and equipment	(1,105)	(1,770)
Deposits placed with corporations	(130)	(54)
Loans to employees	–	1
Loan given to subsidiaries	(76)	(1,201)
Loan repaid by subsidiaries	267	276
Proceeds from redemption of debentures	327	187
Investment in subsidiaries	(215)	–
Payment of arising towards business transfer	(66)	–
Proceeds from return of investment	–	6
Payment of contingent consideration pertaining to acquisition	(122)	–
Redemption of escrow pertaining to buyback	–	257
Other receipts	25	23
Payments to acquire investments
Preference, equity securities and others	(1)	(41)
Liquid mutual fund units and fixed maturity plan securities	(10,499)	(15,980)
Tax free bonds and Government bonds	–	(12)
Non Convertible debentures	(746)	–
Government Securities	(4,664)	(1,561)
Proceeds on sale of investments
Liquid mutual fund units and fixed maturity plan securities	10,541	16,655
Tax free bonds and Government bonds	–	13
Non-convertible debentures	535	1,383
Certificates of deposit	900	1,625
Commercial paper	–	500
Government Securities	1,529	1,170
Interest and dividend received	673	836
Net cash (used in) / from investing activities	(2,827)	2,313
Cash flow from financing activities:
Payment of lease liabilities	(210)	(194)
Buyback of equity shares including transaction cost	–	(7,478)
Payment of dividends (including dividend distribution tax)	(4,048)	(5,443)
Shares issued on exercise of employee stock options	5	–
Net cash used in financing activities	(4,253)	(13,115)
Effect of exchange differences on translation of foreign currency cash and cash equivalents	10	(40)
Net increase / (decrease) in cash and cash equivalents	2,675	(4,278)
Cash and cash equivalents at the beginning of the period	13,562	15,551
Cash and cash equivalents at the end of the period	16,247	11,233
Supplementary information:
Restricted cash balance	99	134

The disclosure is an extract of the audited Statement of Cash flows for the half year ended September 30, 2020 and September 30, 2019 prepared in compliance with Indian Accounting Standard (Ind AS) 34 Interim Financial Reporting.

5. Segment Reporting

The Company publishes standalone financial statements along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the audited interim condensed consolidated financial statements. Accordingly, the segment information is given in the audited consolidated financial results of Infosys Limited and its subsidiaries for the quarter and half-year ended September 30, 2020.

	By order of the Board
	for Infosys Limited
Bengaluru, India	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
October 14, 2020

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

  Infosys Limited Regd. office: Electronics City, Hosur Road,
Bengaluru – 560 100, India CIN : L85110KA1981PLC013115 Website: www.infosys.com email: investors@infosys.com T: 91 80 2852 0261, F: 91 80 2852 0362 

Extract of Consolidated Audited Financial Results of Infosys Limited and its subsidiaries for the quarter and half-yearended September 30, 2020 prepared in compliance with the Indian Accounting Standards (Ind-AS)

( in crore except per equity share data)

Particulars	Quarter ended September 30,	Half-year ended September 30,	Quarter ended September 30,
	2020	2020	2019
Revenue from operations	24,570	48,234	22,629
Profit before tax	6,750	12,543	5,496
Profit for the period	4,858	9,131	4,037
Total comprehensive income for the period (comprising profit for the period after tax and other comprehensive income after tax)	4,863	9,494	4,001
Profit attributable to:
Owners of the company	4,845	9,078	4,019
Non-controlling interest	13	53	18
	4,858	9,131	4,037
Total comprehensive income attributable to:
Owners of the company	4,847	9,434	3,984
Non-controlling interest	16	60	17
	4,863	9,494	4,001
Paid-up share capital (par value 5/- each fully paid)	2,123	2,123	2,121
Other equity *#	63,328	63,328	62,778
Earnings per share (par value 5/- each)**
Basic ()	11.42	21.40	9.46
Diluted ()	11.40	21.37	9.44

* Balances for the quarter and half year ended September 30, 2020 represents balances as per the audited Balance Sheet for the year ended March 31, 2020 and balances for the quarter ended September 30, 2019 represents balances as per the audited Balance Sheet for the year ended March 31, 2019 as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

** EPS is not annualized for the quarter and half year ended September 30, 2020 and quarter ended September 30, 2019.

^# Excludes non-controlling interest

1. Notes pertaining to the current quarter

a) The audited interim condensed consolidated financial statements for the quarter and half-year ended September 30, 2020 have been taken on record by the Board of Directors at its meeting held on October 14, 2020. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unmodified audit opinion. The information presented above is extracted from the audited interim condensed consolidated financial statements. These interim condensed consolidated financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter.

b)

Estimation of uncertainties relating to the global health pandemic from COVID-19 ( COVID-19):

The Group has considered the possible effects that may result from COVID-19 in the preparation of these interim condensed consolidated financial statements including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of COVID-19, the Group has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Group's financial statements may differ from that estimated as at the date of approval of these interim condensed consolidated financial statements.

c)	Acquisitions
	Kaleidoscope Animations, Inc. :
	On October 9, 2020, Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) acquired 100% of voting interests in Kaleidoscope Animations, Inc. a US based Product Design and Development firm, for a total consideration of up to $ 42 million (approximately 310 crore), comprising of cash consideration, contingent consideration and retention payouts, payable to the employees of Kaleidoscope Animations, Inc over the next three years, subject to their continuous employment with the group along with achievement of set targets for respective years. The payment of contingent consideration to sellers of Kaleidoscope Animations, Inc is dependent upon the achievement of certain financial targets by Kaleidoscope Animations, Inc. GuideVision s.r.o : On October 1, 2020, Infy Consulting Company Limited (Wholly-owned subsidiary of Infosys Consulting Holding AG) acquired 100% of voting interests in GuideVision s.r.o , a ServiceNow Elite Partners in Europe for a total consideration of up to Euro 30 million (approximately 259 crore), comprising of cash consideration, contingent consideration and retention payouts payable to the employees of GuideVision s.r.o over the next three years, subject to their continuous employment with the group. The payment of contingent consideration to sellers of GuideVision s.r.o is dependent upon the achievement of certain financial targets by GuideVision s.r.o.

d)	Proposed Acquisition:
	On October 8, 2020 Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire Blue Acorn iCi, a US based Adobe platinum partner and a digital customer experience company, for a total consideration of up to $125 million (approximately 922 crore) including bonuses, subject to fulfillment of customary closing conditions.

e)

Business transfer - Kallidus Inc. and Skava Systems Private Limited:

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently on August 15, 2020 , the company entered into a business transfer agreement to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of 171 crore and 66 crore respectively. The transaction was between a holding company and a wholly owned subsidiary and therefore was accounted for at carrying values and did not have any impact on the consolidated financial statements.

f)	Employee stock grants
	On recommendation of the Nomination and Remuneration Committee, the Board on October 14, 2020 approved the grant of 33,900 RSUs to certain eligible employees under the 2015 Plan. The grant date for these RSUs is November 1, 2020. The RSUs would vest over a period of three to four years and the exercise price of RSUs will be equal to the par value of the share.

g) On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020.

h) The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

2.	Information on dividends for the quarter and half-year ended September 30, 2020
	The Board of Directors declared an interim dividend of 12/- per equity share. The record date for the payment is October 26, 2020.The interim dividend will be paid on November 11, 2020. The interim dividend declared in the previous year was 8/- per equity share.

(in )

Particulars	Quarter ended September 30,	Half-year ended September 30,	Quarter ended September 30,
	2020	2020	2019
Dividend per share (par value 5/- each)
Interim dividend	12.00	12.00	8.00
Final dividend	–	–	–

3. Audited financial results of Infosys Limited (Standalone information) 

(in crore)

Particulars	Quarter ended September 30,	Half-year ended September 30,	Quarter ended September 30,
	2020	2020	2019
Revenue from operations	21,046	41,372	19,666
Profit before tax	6,163	11,542	5,123
Profit for the period	4,497	8,505	3,829

The above is an extract of the detailed format of Quarterly audited financial results filed with Stock Exchanges under Regulation 33 of the SEBI (Listing and Other Disclosure Requirements) Regulations, 2015. The full format of the Quarterly Audited Financial Results are available on the Stock Exchange websites, www.nseindia.com and www.bseindia.com, and on the Company's website, www.infosys.com.

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

	By order of the Board
	for Infosys Limited
Bengaluru, India October 14, 2020	U.B. Pravin Rao Chief Operating Officer and Whole-time Director

EX-99.7 DISTR CONTR

   Exhibit 99.7

IFRS USD Earning Release

INDEPENDENT AUDITOR’S REPORT

TO THE BOARD OF DIRECTORS OF INFOSYS LIMITED

Report on the Audit of the Interim Condensed Consolidated Financial Statements

Opinion

We have audited the accompanying Interim condensed consolidated financial statements of INFOSYS LIMITED (the “Company”) and its subsidiaries (the Company and its subsidiaries together referred to as the “Group”), which comprise the Condensed Consolidated Balance Sheet as at September 30, 2020, the Condensed Consolidated Statement of Comprehensive Income for three months and six months period ended, the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Statement of Cash Flows for the six months period ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the “interim condensed consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid interim condensed consolidated financial statements give a true and fair view in conformity with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”), of the consolidated state of affairs of the Group as at September 30, 2020, the consolidated profit and consolidated total comprehensive income for three months and six months period ended on that date, consolidated changes in equity and its consolidated cash flows for the six months period ended on that date.

Basis for Opinion

We conducted our audit of the interim condensed consolidated financial statements in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (“ICAI”). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the interim condensed consolidated financial statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the ICAI and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the interim condensed consolidated financial statements.

Management’s Responsibilities for the Interim Condensed Consolidated Financial Statements

The Company’s Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and consolidated cash flows of the Group in accordance with IAS 34 as issued by the IASB. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records for safeguarding assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the respective interim financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the interim condensed consolidated financial statements by the Directors of the Company, as aforesaid.

In preparing the interim condensed consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group are responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Interim Condensed Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the interim condensed consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these interim condensed consolidated financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the interim condensed consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on effectiveness of the Company’s internal financial controls.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the interim condensed consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the interim condensed consolidated financial statements, including the disclosures, and whether the interim condensed consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group to express an opinion on the interim condensed consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the interim condensed consolidated financial statements of which we are independent auditors.

Materiality is the magnitude of misstatements in the interim condensed consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the interim condensed consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the interim condensed consolidated financial statements.

We communicate with those charged with governance of the Company and such other entities included in the interim condensed consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Place: Mumbai Date: October 14, 2020 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)         Sanjiv V. Pilgaonkar Partner (Membership No.039826) (UDIN: 20039826AAAAGX3822)

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Financial Statements under International Financial Reporting Standards (IFRS) in US Dollars for the three months and six months ended September 30, 2020

Index

Condensed Consolidated Balance Sheet

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statements of Cash Flows

Overview and Notes to the financial statements

1. Overview

1.1 Company overview

1.2 Basis of preparation of financial statements

1.3 Basis of consolidation

1.4 Use of estimates and judgments

1.5 Critical accounting estimates and judgements

1.6 Recent accounting pronouncements

2. Notes to the interim Condensed Consolidated Financial Statements

2.1 Cash and cash equivalents

2.2 Investments

2.3 Financial instruments

2.4 Prepayments and other assets

2.5 Other liabilities

2.6 Provisions and other contingencies

2.7 Property, plant and equipment

2.8 Leases

2.9 Goodwill

2.10 Business combination

2.11 Employees' Stock Option Plans (ESOP)

2.12 Income taxes

2.13 Reconciliation of basic and diluted shares used in computing earnings per share

2.14 Related party transactions

2.15 Segment Reporting

2.16 Revenue from Operations

2.17 Unbilled revenue

2.18 Break-up of expenses and other income, net

2.19 Equity

Condensed Consolidated Balance Sheet

(Dollars in millions except equity share data)

Condensed Consolidated Balance Sheet as at	Note	September 30, 2020	March 31, 2020
ASSETS
Current assets
Cash and cash equivalents	2.1	3,038	2,465
Current investments	2.2	488	615
Trade receivables		2,430	2,443
Unbilled revenue	2.17	1,030	941
Prepayments and other current assets	2.4	750	739
Income tax assets	2.12	–	1
Derivative financial instruments	2.3	35	8
Total current assets		7,771	7,212
Non-current assets
Property, plant and equipment	2.7	1,869	1,810
Right-of-use assets	2.8	569	551
Goodwill	2.9	727	699
Intangible assets		237	251
Non-current investments	2.2	1,051	547
Deferred income tax assets	2.12	177	231
Income tax assets	2.12	732	711
Other non-current assets	2.4	230	248
Total Non-current assets		5,592	5,048
Total assets		13,363	12,260
LIABILITIES AND EQUITY
Current liabilities
Trade payables		322	377
Lease Liabilities	2.8	88	82
Derivative financial instruments	2.3	3	65
Current income tax liabilities	2.12	216	197
Client deposits		–	2
Unearned revenue		455	395
Employee benefit obligations		263	242
Provisions	2.6	93	76
Other current liabilities	2.5	1,364	1,321
Total current liabilities		2,804	2,757
Lease liabilities	2.8	551	530
Deferred income tax liabilities	2.12	117	128
Employee benefit obligations		8	5
Other non-current liabilities	2.5	200	139
Total liabilities		3,680	3,559
Equity
Share capital - 5 ($0.16) par value 4,800,000,000 (4,800,000,000) equity shares authorized, issued and outstanding 4,242,506,036 (4,240,753,210) equity shares fully paid up, net of 16,905,562 (18,239,356) treasury shares as at September 30, 2020 and March 31, 2020	2.19	332	332
Share premium		325	305
Retained earnings		11,573	11,014
Cash flow hedge reserve		1	(2)
Other reserves		715	594
Capital redemption reserve		17	17
Other components of equity		(3,340)	(3,614)
Total equity attributable to equity holders of the company		9,623	8,646
Non-controlling interests		60	55
Total equity		9,683	8,701
Total liabilities and equity		13,363	12,260

The accompanying notes form an integral part of the interim condensed consolidated financial statements.

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Condensed Consolidated Statements of Comprehensive Income

(Dollars in millions except equity share and per equity share data)

Condensed Consolidated Statements of Comprehensive Income	Note	Three months ended		Six months ended
		September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
Revenues	2.16	3,312	3,210	6,433	6,340
Cost of sales	2.18	2,125	2,140	4,196	4,261
Gross profit		1,187	1,070	2,237	2,079
Operating expenses:
Selling and marketing expenses	2.18	153	165	305	333
Administrative expenses	2.18	194	209	385	408
Total operating expenses		347	374	690	741
Operating profit		840	696	1,547	1,338
Other income, net	2.18	76	89	140	195
Finance cost	2.8	6	6	12	12
Profit before income taxes		910	779	1,675	1,521
Income tax expense	2.12	255	207	456	403
Net profit		655	572	1,219	1,118
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Re-measurements of the net defined benefit liability/asset, net		1	(3)	21	(6)
Equity instrument through other comprehensive income, net		(1)	1	(1)	1
		–	(2)	20	(5)
Items that will be reclassified subsequently to profit or loss:
Fair valuation of investments, net		(6)	–	1	2
Fair value changes on derivatives designated as cash flow hedge, net		4	2	3	(1)
Foreign currency translation		213	(224)	254	(207)
		211	(222)	258	(206)
Total other comprehensive income/(loss), net of tax		211	(224)	278	(211)
Total comprehensive income		866	348	1,497	907
Profit attributable to:
Owners of the company		653	569	1,212	1,115
Non-controlling interests		2	3	7	3
		655	572	1,219	1,118
Total comprehensive income attributable to:
Owners of the company		864	346	1,489	905
Non-controlling interests		2	2	8	2
		866	348	1,497	907
Earnings per equity share
Basic ($)		0.15	0.13	0.29	0.26
Diluted ($)		0.15	0.13	0.29	0.26
Weighted average equity shares used in computing earnings per equity share	2.13
Basic		4,241,908,471	4,249,343,678	4,241,506,966	4,275,615,916
Diluted		4,248,961,564	4,255,822,953	4,248,434,533	4,282,322,537

The accompanying notes form an integral part of the interim condensed consolidated financial statements.

As per our report of even date attached.

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Condensed Consolidated Statement of Changes in Equity

(Dollars in millions except equity share data)

	Shares(1)	Share capital	Share premium	Retained earnings	Other reserves (2)	Capital redemption reserve	Cash flow hedge reserve	Other components of equity	Total equity attributable to equity holders of the company	Non-controlling interest	Total equity
Balance as at April 1, 2019	4,335,954,462	339	277	11,248	384	10	3	(2,870)	9,391	9	9,400
Impact on account of adoption of IFRS 16*	–	–	–	(6)	–	–	–	–	(6)	–	(6)
	4,335,954,462	339	277	11,242	384	10	3	(2,870)	9,385	9	9,394
Changes in equity for six months ended September 30, 2019
Net profit	–	–	–	1,115	–	–	–	–	1,115	3	1,118
Remeasurement of the net defined benefit liability/asset*	–	–	–	–	–	–	–	(6)	(6)	–	(6)
Equity instruments through other comprehensive income*	–	–	–	–	–	–	–	1	1	–	1
Fair value changes on investments, net*	–	–	–	–	–	–	–	2	2	–	2
Fair value changes on derivatives designated as cash flow hedge*	–	–	–	–	–	–	(1)	–	(1)	–	(1)
Foreign currency translation	–	–	–	–	–	–	–	(206)	(206)	(1)	(207)
Total comprehensive income for the period	–	–	–	1,115	–	–	(1)	(209)	905	2	907
Shares issued on exercise of employee stock options (Refer note 2.11)	1,395,470	–	–	–	–	–	–	–	–	–	–
Buyback of equity shares	(97,867,266)	(7)	–	(895)	–	–	–	–	(902)	–	(902)
Transaction cost relating to buyback *	–	–	–	(1)	–	–	–	–	(1)	–	(1)
Amount transferred to capital redemption reserve upon buyback	–	–	–	(7)	–	7	–	–	–	–	–
Non-controlling interests on acquisition of subsidiary	–	–	–	–	–	–	–	–	–	46	46
Transfer to other reserves	–	–	–	(163)	163	–	–	–	–	–	–
Transfer from other reserves on utilization	–	–	–	87	(87)	–	–	–	–	–	–
Financial liability under option arrangements	–	–	–	(86)	–	–	–	–	(86)	–	(86)
Employee stock compensation expense (Refer note 2.11)	–	–	17	–	–	–	–	–	17	–	17
Income tax benefit arising on exercise of stock options	–	–	1	–	–	–	–	–	1	–	1
Dividends paid to non controlling interest of subsidiary	–	–	–	–	–	–	–	–	–	(5)	(5)
Dividends (including dividend distribution tax)	–	–	–	(782)	–	–	–	–	(782)	–	(782)
Balance as at September 30, 2019	4,239,482,666	332	295	10,510	460	17	2	(3,079)	8,537	52	8,589

(Dollars in millions except equity share data)

	Shares(1)	Share capital	Share premium	Retained earnings	Other reserves (2)	Capital redemption reserve	Cash flow hedge reserve	Other components of equity	Total equity attributable to equity holders of the company	Non-controlling interest	Total equity
Balance as at April 1, 2020	4,240,753,210	332	305	11,014	594	17	(2)	(3,614)	8,646	55	8,701
Changes in equity for six months ended September 30, 2020
Net profit	–	–	–	1,212	–	–	–	–	1,212	7	1,219
Remeasurement of the net defined benefit liability/asset (Refer note 2.18)*	–	–	–	–	–	–	–	21	21	–	21
Equity instruments through other comprehensive income*	–	–	–	–	–	–	–	(1)	(1)	–	(1)
Fair value changes on investments, net*	–	–	–	–	–	–	–	1	1	–	1
Fair value changes on derivatives designated as cash flow hedge*	–	–	–	–	–	–	3	–	3	–	3
Foreign currency translation	–	–	–	–	–	–	–	253	253	1	254
Total comprehensive income for the period	–	–	–	1,212	–	–	3	274	1,489	8	1,497
Shares issued on exercise of employee stock options (Refer note 2.11)	1,752,826	–	1	–	–	–	–	–	1	–	1
Transfer from other reserves on utilization	–	–	–	77	(77)	–	–	–	–	–	–
Transfer to other reserves	–	–	–	(198)	198	–	–	–	–	–	–
Employee stock compensation expense (Refer note 2.11)	–	–	18	–	–	–	–	–	18	–	18
Income tax benefit arising on exercise of stock options	–	–	1	–	–	–	–	–	1	–	1
Dividends paid to non controlling interest of subsidiary	–	–	–	–	–	–	–	–	–	(3)	(3)
Dividends	–	–	–	(532)	–	–	–	–	(532)	–	(532)
Balance as at September 30, 2020	4,242,506,036	332	325	11,573	715	17	1	(3,340)	9,623	60	9,683

* net of tax

₍₁₎ excludes treasury shares of 16,905,562 as at September 30, 2020 18,239,356 as at April 1, 2020, 18,929,512 as at September 30, 2019 and 20,324,982 as at April 1, 2019, held by consolidated trust.

⁽²⁾ Represents the Special Economic Zone Re-investment reserve created out of the profit of the eligible SEZ unit in terms of the provisions of Sec 10AA(1)(ii) of Income Tax Act,1961. The reserve should be utilized by the Group for acquiring new plant and machinery for the purpose of its business in terms of the provisions of the Sec 10AA(2) of the Income Tax Act, 1961.

The accompanying notes form an integral part of the interim condensed consolidated financial statements.

As per our report of even date attached.

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Condensed Consolidated Statements of Cash Flows

Accounting Policy

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated. The Group considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.

(Dollars in millions)

Particulars	Note	Six months ended
		September 30, 2020	September 30, 2019
Operating activities:
Net Profit		1,219	1,118
Adjustments to reconcile net profit to net cash provided by operating activities :
Depreciation and amortization	2.18	215	201
Interest and dividend income		(35)	(40)
Finance Cost	2.8	12	12
Income tax expense	2.12	456	403
Effect of exchange rate changes on assets and liabilities		(2)	8
Impairment loss under expected credit loss model		21	12
Stock compensation expense	2.11	24	17
Other adjustments		(9)	(15)
Changes in working capital
Trade receivables and unbilled revenue		(9)	(225)
Prepayments and other assets		44	68
Trade payables		(64)	(153)
Unearned revenue and Client deposits		47	(18)
Other liabilities and provisions		56	150
Cash generated from operations		1,975	1,538
Income taxes paid		(399)	(386)
Net cash provided by operating activities		1,576	1,152
Investing activities:
Expenditure on property, plant and equipment and intangibles		(174)	(270)
Loans to employees		–	1
Deposits placed with corporation		(18)	(1)
Interest and dividend received		34	28
Payment towards acquisition of business, net of cash acquired		–	(72)
Payment of contingent consideration pertaining to acquisition of business		(20)	–
Redemption of escrow pertaining to Buyback		–	37
Payments to acquire Investments
Liquid mutual fund units and fixed maturity plan securities		(1,596)	(2,611)
Quoted debt securities		(733)	(234)
Equity and preference securities		–	(6)
Other Investments		–	(2)
Proceeds on sale of Investments		–	–
Quoted debt securities		300	367
Certificate of deposits		120	285
Commercial papers		–	72
Liquid mutual fund units and fixed maturity plan securities		1,582	2,703
Other Investments		3	2
Other receipts		3	3
Net cash (used)/generated in investing activities		(499)	302
Financing activities:
Payment of Lease Liabilities	2.8	(47)	(42)
Payment of dividends (including dividend distribution tax)		(539)	(782)
Payment of dividend to non controlling interests of subsidiary		(3)	(5)
Shares issued on exercise of employee stock options		1	–
Buy back of equity shares including transaction costs	2.19.1	–	(1,070)
Net cash used in financing activities		(588)	(1,899)
Effect of exchange rate changes on cash and cash equivalents		84	(60)
Net increase / (decrease) in cash and cash equivalents		489	(445)
Cash and cash equivalents at the beginning of the period	2.1	2,465	2,829
Cash and cash equivalents at the end of the period	2.1	3,038	2,324
Supplementary information:
Restricted cash balance	2.1	55	53

The accompanying notes form an integral part of the interim condensed consolidated financial statements.

As per our report of even date attached.

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Overview and Notes to the financial statements

1. Overview

1.1 Company overview

Infosys Limited ('the Company' or Infosys) provides consulting, technology, outsourcing and next-generation digital services, to enable clients to execute strategies for their digital transformation.

Infosys together with its subsidiaries and controlled trusts is herein after referred to as the "Group".

The company is a public limited company incorporated and domiciled in India and has its registered office at Bengaluru, Karnataka, India. The company has its primary listings on the BSE Ltd. and National Stock Exchange of India Limited in India. The company’s American Depositary Shares (ADS) representing equity shares are listed on the New York Stock Exchange (NYSE).

The Group's interim condensed consolidated financial statements are authorized for issue by the company's Board of Directors on October 14, 2020.

1.2 Basis of preparation of financial statements

The interim condensed consolidated financial statements have been prepared in compliance with IAS 34, Interim Financial Reporting as issued by International Accounting Standards Board, under the historical cost convention on the accrual basis except for certain financial instruments which have been measured at fair values. Accordingly, these interim condensed consolidated financial statements do not include all the information required for a complete set of financial statements. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the company’s Annual Report on Form 20-F for the year ended March 31, 2020. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the quarter and year-to-date figures are taken from the source and rounded to the nearest digits, the quarter figures in this statement added up to the figures reported for the previous quarters might not always add up to the year-to-date figures reported in this statement.

1.3 Basis of consolidation

Infosys consolidates entities which it owns or controls. The interim condensed consolidated financial statements comprise the financial statements of the company, its controlled trusts and its subsidiaries. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Group companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. The financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the company, are excluded.

1.4 Use of estimates and judgments

The preparation of the financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 1.5. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the interim condensed consolidated financial statements.

Estimation of uncertainties relating to the global health pandemic from COVID-19 (COVID-19):

The Group has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these interim condensed consolidated financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Group has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Group's financial statements may differ from that estimated as at the date of approval of these interim condensed consolidated financial statements.

1.5 Critical accounting estimates and judgements

a. Revenue recognition

The Group’s contracts with customers include promises to transfer multiple products and services to a customer. Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgement.

Fixed price maintenance revenue is recognized ratably on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period. Revenue from fixed price maintenance contract is recognized ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Group’s costs to fulfil the contract is not even through the period of the contract because the services are generally discrete in nature and not repetitive. The use of method to recognize the maintenance revenues requires judgment and is based on the promises in the contract and nature of the deliverables.

The Group uses the percentage-of-completion method in accounting for other fixed-price contracts. Use of the percentage-of-completion method requires the Group to determine the actual efforts or costs expended to date as a proportion of the estimated total efforts or costs to be incurred. Efforts or costs expended are used to measure progress towards completion as there is a direct relationship between input and productivity. The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

b. Income taxes

The company's two major tax jurisdictions are India and the U.S., though the company also files tax returns in other overseas jurisdictions.

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

In assessing the realizability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the group will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced (also refer to note 2.12).

c. Business combinations and intangible assets

Business combinations are accounted for using IFRS 3 (Revised), Business Combinations. IFRS 3 requires us to fair value identifiable intangible assets and contingent consideration to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Estimates are required to be made in determining the value of contingent consideration, value of option arrangements and intangible assets. These valuations are conducted by external valuation experts. These measurements are based on information available at the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management.

d. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group's assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology (Refer to note 2.7).

e. Impairment of Goodwill

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit (CGUs) is less than its carrying amount. For the impairment test, goodwill is allocated to the CGU or groups of CGUs which benefit from the synergies of the acquisition and which represent the lowest level at which goodwill is monitored for internal management purposes.

The recoverable amount of CGUs is determined based on higher of value-in-use and fair value less cost to sell. Key assumptions in the cash flow projections are prepared based on current economic conditions and comprises estimated long term growth rates, weighted average cost of capital and estimated operating margins.

f. Leases

IFRS 16 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Infosys’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Group has concluded that no material changes are required to lease period relating to the existing lease contracts (Refer note 2.8).

g. Allowance for credit losses on receivables and unbilled revenue

The Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The group considered current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates. In calculating expected credit loss, the Group has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID-19.

1.6 Recent accounting pronouncements

New and revised IFRS Standards in issue but not yet effective:

Amendments to IAS 16 Property, Plant and Equipment	Proceeds before Intended Use
Amendments to IAS 37 Onerous Contracts	Cost of Fulfilling a Contract
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16	Interest Rate Benchmark Reform—Phase 2

Amendments to IAS 16

On May 14, 2020 International Accounting Standards Board (IASB) has issued amendment to IAS 16 Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16) which amends the standard to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss.

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2022, although early adoption is permitted. The Group is in the process of evaluating the impact of the amendment.

Amendments to IAS 37

On May 14, 2020 IASB has issued Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) which specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2022, although early adoption is permitted. The Group is in the process of evaluating the impact of the amendment.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform (Phase 2)

The International Accounting Standards Board (Board) has finalized its response to the ongoing reform of inter-bank offered rates (IBOR) and other interest rate benchmarks by issuing a package of amendments to IFRS Standards in August 2020. The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. The amendments in this final phase relate to practical expedient for particular changes in contractual cash flows, relief from specific hedge accounting requirements and certain disclosure requirement.

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2021, although early adoption is permitted.

The Group is in the process of evaluating the impact of the amendment.

2. Notes to the interim Condensed Consolidated Financial Statements

2.1 Cash and cash equivalents

Cash and cash equivalents consist of the following:

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Cash and bank deposits	2,289	1,624
Deposits with financial institutions	749	841
Total Cash and cash equivalents	3,038	2,465

Cash and cash equivalents as at September 30, 2020 and March 31, 2020 include restricted cash and bank balances of $55 million and $52 million, respectively. The restrictions are primarily on account of bank balances held by irrevocable trusts controlled by the company and bank balances held as margin money deposits against guarantees.

The deposits maintained by the Group with banks and financial institutions comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.

2.2 Investments

The carrying value of investments are as follows:

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
(i) Current
Fair value through profit and loss
Liquid Mutual funds	371	278
Fixed maturity plan securities	–	65
Fair Value through Other comprehensive income
Quoted debt securities	83	123
Certificate of deposits	34	149
Total current investments	488	615
(ii) Non-current
Amortized cost
Quoted debt securities	250	244
Fair value through Other comprehensive income
Quoted debt securities	779	281
Unquoted equity and preference securities	14	14
Fair value through profit and loss		.
Unquoted Preference securities	1	1
Others(1)	7	7
Total Non-current investments	1,051	547
Total investments	1,539	1,162
Investment carried at amortized cost	250	244
Investments carried at fair value through other comprehensive income	910	567
Investments carried at fair value through profit and loss	379	351

⁽¹⁾ Uncalled capital commitments outstanding as on September 30, 2020 and March 31, 2020 was $8 million and $8 million, respectively.

Refer note 2.3 for accounting policies on financial instruments.

Method of fair valuation:

(Dollars in millions)

Class of investment	Method	Fair value
		As at September 30, 2020	As at March 31, 2020
Liquid mutual funds	Quoted price	371	278
Fixed maturity plan securities	Market observable inputs	–	65
Quoted debt securities- carried at amortized cost	Quoted price and market observable inputs	303	284
Quoted debt securities- carried at Fair value through other comprehensive income	Quoted price and market observable inputs	862	404
Certificate of deposits	Market observable inputs	34	149
Unquoted equity and preference securities at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model, etc.	14	14
Unquoted equity and preference securities - carried at fair value through profit or loss	Discounted cash flows method, Market multiples method, Option pricing model, etc.	1	1
Others	Discounted cash flows method, Market multiples method, Option pricing model, etc.	7	7
		1,592	1,202

Certain quoted investments are classified as Level 2 in the absence of active market for such investments.

2.3 Financial instruments

Accounting Policy

2.3.1 Initial recognition

The group recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

2.3.2 Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income (FVOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Group has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.

(iii) Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration and financial liability under option arrangements recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

b. Derivative financial instruments

The group holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

(i) Financial assets or financial liabilities, at fair value through profit or loss.

This category has derivative financial assets or liabilities which are not designated as hedges.

Although the group believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under IFRS 9, Financial Instruments. Any derivative that is either not designated as hedge or is so designated but is ineffective as per IFRS 9, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of comprehensive income when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

(ii) Cash flow hedge

The group designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transaction. .

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the net profit in the statement of comprehensive income. If the hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the net profit in the statement of comprehensive income upon the occurrence of the related forecasted transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified to net profit in the statement of comprehensive income.

2.3.3 Derecognition of financial instruments

The group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under IFRS 9. A financial liability (or a part of a financial liability) is derecognized from the group's balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

2.3.4 Fair value of financial instruments

In determining the fair value of its financial instruments, the group uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

Refer to table ‘Financial instruments by category’ below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of those instruments.

2.3.5 Impairment

The Group recognizes loss allowances using the expected credit loss (ECL) model for the financial assets and unbilled revenue which are not fair valued through profit or loss. Loss allowance for trade receivables and unbilled revenues with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of comprehensive income.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at September 30, 2020 were as follows:

(Dollars in millions)

Particulars	Amortized cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer note 2.1)	3,038	–	–	–	–	3,038	3,038
Investments (Refer to Note 2.2)
Liquid mutual funds	–	–	371	–	–	371	371
Quoted debt securities	250	–	–	–	862	1,112	1,165(1)
Certificate of deposits	–	–	–	–	34	34	34
Unquoted equity and preference securities	–	–	1	14	–	15	15
Unquoted investment others	–	–	7	–	–	7	7
Trade receivables	2,430	–	–	–	–	2,430	2,430
Unbilled revenues (Refer note 2.17)(3)	438	–	–	–	–	438	438
Prepayments and other assets (Refer to Note 2.4)	498	–	–	–	–	498	488(2)
Derivative financial instruments	–	–	33	–	2	35	35
Total	6,654	–	412	14	898	7,978	8,021
Liabilities:
Trade payables	322	–	–	–	–	322	322
Lease liabilities	639		–	–	–	639	639
Derivative financial instruments	–	–	3	–	–	3	3
Financial liability under option arrangements	–	–	92	–	–	92	92
Other liabilities including contingent consideration (Refer to note 2.5)	1,096	–	11	–	–	1,107	1,107
Total	2,057	–	106	–	–	2,163	2,163

⁽¹⁾ On account of fair value changes including interest accrued

⁽²⁾ Excludes interest accrued on quoted debt securities carried at amortized cost of $10 million.

⁽³⁾ Excludes unbilled revenue for contracts where the right to consideration is dependent on completion of contractual milestones

The carrying value and fair value of financial instruments by categories as at March 31, 2020 were as follows:

(Dollars in millions)

Particulars	Amortized cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer to Note 2.1)	2,465	–	–	–	–	2,465	2,465
Investments (Refer note 2.2)
Liquid mutual funds	–	–	278	–	–	278	278
Fixed maturity plan securities	–	–	65	–	–	65	65
Quoted debt securities	244	–	–	–	404	648	688(1)
Certificate of deposits	–	–	–	–	149	149	149
Unquoted equity and preference securities	–	–	1	14	–	15	15
Unquoted investment others	–	–	7	–	–	7	7
Trade receivables	2,443	–	–	–	–	2,443	2,443
Unbilled revenues(Refer note 2.17)(3)	369	–	–	–	–	369	369
Prepayments and other assets (Refer to Note 2.4)	476	–	–	–	–	476	465(2)
Derivative financial instruments	–	–	7	–	1	8	8
Total	5,997	–	358	14	554	6,923	6,952
Liabilities:
Trade payables	377	–	–	–	–	377	377
Lease liabilities	612	–	–	–	–	612	612
Derivative financial instruments	–	–	62	–	3	65	65
Financial liability under option arrangements	–	–	82	–	–	82	82
Other liabilities including contingent consideration	1,054	–	45	–	–	1,099	1,099
Total	2,043	–	189	–	3	2,235	2,235

⁽¹⁾ On account of fair value changes including interest accrued

⁽²⁾ Excludes interest accrued on quoted debt securities carried at amortized cost of $11 million.

⁽³⁾ Excludes unbilled revenue for contracts where the right to consideration is dependent on completion of contractual milestones

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as

prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities as at September 30, 2020

(Dollars in millions)

Particulars	As at September 30, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in liquid mutual fund units (Refer to Note 2.2)	371	371	–	–
Investments in quoted debt securities (Refer to Note 2.2)	1,165	1,080	85	–
Investments in certificate of deposit (Refer to Note 2.2)	34	–	34	–
Investments in unquoted equity and preference securities (Refer to Note 2.2)	15	–	–	15
Investments in unquoted investments others (Refer to Note 2.2)	7	–	–	7
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts	35	–	35	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts	3		3	–
Financial liability under option arrangements	92	–	–	92
Liability towards contingent consideration (Refer to note 2.5)*	11	–	–	11

* Discount rate pertaining to contingent consideration ranges from 8% to 14%

During the six months ended September 30, 2020, quoted debt securities of $7 million were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price and quoted debt securities of $18 million were transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

The following table presents fair value hierarchy of assets and liabilities as at March 31, 2020

(Dollars in millions)

Particulars	As at March 31, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in liquid mutual fund units (Refer to Note 2.2)	278	278	–	–
Investments in fixed maturity plan securities (Refer to Note 2.2)	65	–	65	–
Investments in quoted debt securities (Refer to Note 2.2)	688	618	70	–
Investments in certificate of deposit (Refer to Note 2.2)	149	–	149	–
Investments in unquoted equity and preference securities (Refer to Note 2.2)	15	–	–	15
Investments in unquoted investments others (Refer to Note 2.2)	7	–	–	7
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	8	–	8	–
Liabilities
Derivative financial instruments- loss on outstanding foreign exchange forward and option contracts	65	–	65	–
Financial liability under option arrangements	82	–	–	82
Liability towards contingent consideration (Refer to Note 2.5)*	45	–	–	45

* Discount rate pertaining to contingent consideration ranges from 8% to 14%

During the year ended March 31, 2020 quoted debt securities of $87 million were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price and quoted debt securities of $7 million were transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

A one percentage point change in the unobservable inputs used in fair valuation of Level 3 assets and liabilities does not have a significant impact in its value.

Majority of investments of the Group are fair valued based on Level 1 or Level 2 inputs. These investments primarily include investment in liquid mutual fund units, fixed maturity plan securities, certificates of deposit, commercial papers, quoted bonds issued by government and quasi-government organizations and non-convertible debentures. The Group invests after considering counterparty risks based on multiple criteria including Tier I capital, Capital Adequacy Ratio, Credit Rating, Profitability, NPA levels and Deposit base of banks and financial institutions. These risks are monitored regularly as per its risk management program.

2.4 Prepayments and other assets

Prepayments and other assets consist of the following:

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Rental deposits	5	4
Security deposits	1	1
Loans to employees	18	32
Prepaid expenses(1)	133	128
Interest accrued and not due	74	62
Withholding taxes and others(1)	196	209
Advance payments to vendors for supply of goods(1)	6	19
Deposit with corporations*	264	237
Deferred contract cost(1)	5	4
Net investment in sublease of right of use asset	10	5
Other non financial assets(1)	3	4
Other financial assets	35	34
Total Current prepayment and other assets	750	739
Non-current
Loans to employees	3	3
Security deposits	7	7
Deposit with corporations *	5	7
Prepaid gratuity(1)	11	20
Prepaid expenses(1)	9	11
Deferred contract cost(1)	11	13
Withholding taxes and others(1)	105	103
Net investment in sublease of right of use asset	45	53
Rental Deposits	28	29
Other non financial assets	3	–
Other financial assets	3	2
Total Non- current prepayment and other assets	230	248
Total prepayment and other assets	980	987
Financial assets in prepayments and other assets	498	476

⁽¹⁾ Non financial assets

Withholding taxes and others primarily consist of input tax credits and Cenvat recoverable from Government of India. As at September 30, 2020, Cenvat recoverable includes $50 million which are pending adjudication. The Group expects these amounts to be sustainable on adjudication and recoverable on final resolution.

* Deposit with corporation represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

2.5 Other liabilities

Other liabilities comprise the following:

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Accrued compensation to employees	468	391
Accrued provident fund liability(1)	–	9
Accrued expenses	549	518
Withholding taxes and others (1)	263	232
Retention money	3	10
Liabilities of controlled trusts	24	25
Deferred income - government grants(1)	3	–
Liability towards contingent consideration	7	29
Capital creditors	31	37
Others non financial liabilities(1)	1	1
Other financial liabilities	15	69
Total Current other liabilities	1,364	1,321
Non-Current
Liability towards contingent consideration	4	16
Accrued compensation to employees	5	3
Accrued gratuity(1)	5	4
Accrued provident fund liability(1)	16	24
Deferred income - government grants(1)	6	6
Deferred income (1)	2	3
Financial liability under option arrangements	92	82
Withholding taxes and others(1)	69	–
Other financial liabilities	1	1
Total Non-current other liabilities	200	139
Total other liabilities	1,564	1,460
Financial liabilities included in other liabilities	1,199	1,181
Financial liability towards contingent consideration on an undiscounted basis	12	48

⁽¹⁾ Non-financial liabilities

Accrued expenses primarily relate to cost of technical sub-contractors, telecommunication charges, legal and professional charges, brand building expenses, overseas travel expenses and office maintenance.

2.6 Provisions and other contingencies

Accounting Policy

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

Post sales client support

The Group provides its clients with a fixed-period post sales support for its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales. The Group estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Group recognizes any impairment loss on the assets associated with that contract.

Provisions comprise the following:

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Provision for post sales client support and other provisions	93	76
	93	76

Provision for post sales client support and other provisions represents costs associated with providing sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 1 year.

Provision for post sales client support and other provisions is included in cost of sales in the condensed consolidated statement of comprehensive income.

As at September 30, 2020 and March 31, 2020, claims against the Group, not acknowledged as debts, (excluding demands from income tax authorities- Refer to Note 2.12) amounted to $39 million (285 crore) and $30 million (230 crore), respectively.

Legal Proceedings

On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020.

The Group is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Group’s management reasonably expects that these legal actions, when ultimately concluded and determined, will not have a material and adverse effect on the Group’s results of operations or financial condition.

2.7 Property, plant and equipment

Accounting Policy

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The group depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

Building	22-25 years
Plant and machinery(1)	5 years
Computer equipment	3-5 years
Furniture and fixtures	5 years
Vehicles	5 years
Leasehold improvements	Lower of useful life of the asset or lease term

⁽¹⁾ includes solar plant with a useful life of 20 years

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of comprehensive income when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in net profit in the consolidated statement of comprehensive income.

Impairment

Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in net profit in the statement of comprehensive income is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in net profit in the statement of comprehensive income if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

Following are the changes in the carrying value of property, plant and equipment for three months ended September 30, 2020:

(Dollars in millions)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at July 1, 2020	183	1,332	626	930	384	6	3,461
Additions	–	2	8	42	8	–	60
Deletions	–	–	(1)	(5)	(1)	–	(7)
Translation difference	5	33	15	22	11	–	86
Gross carrying value as at September 30, 2020	188	1,367	648	989	402	6	3,600
Accumulated depreciation as at July 1, 2020	–	(448)	(434)	(674)	(254)	(4)	(1,814)
Depreciation	–	(13)	(16)	(36)	(13)	–	(78)
Accumulated depreciation on deletions	–	–	1	5	1	–	7
Translation difference	–	(11)	(10)	(15)	(8)	–	(44)
Accumulated depreciation as at September 30, 2020	–	(472)	(459)	(720)	(274)	(4)	(1,929)
Capital work-in progress as at September 30, 2020							198
Carrying value as at September 30, 2020	188	895	189	269	128	2	1,869
Capital work-in progress as at July 1, 2020							178
Carrying value as at July 1, 2020	183	884	192	256	130	2	1,825

Following are the changes in the carrying value of property, plant and equipment for three months ended September 30, 2019:

(Dollars in millions)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at July 1, 2019	189	1,315	595	881	350	5	3,335
Additions	1	46	46	33	37	1	164
Additions- Business Combinations	–	–	–	–	–	–	–
Deletions	–	–	–	(10)	(1)	–	(11)
Reclassified on account of adoption of IFRS 16	–	–	–	–	–	–	–
Translation difference	(5)	(36)	(16)	(23)	(11)	–	(91)
Gross carrying value as at September 30, 2019	185	1,325	625	881	375	6	3,397
Accumulated depreciation as at July 1, 2019	–	(436)	(406)	(634)	(234)	(3)	(1,713)
Depreciation	–	(12)	(17)	(32)	(11)	–	(72)
Accumulated depreciation on deletions	–	–	–	10	1	–	11
Reclassified on account of adoption of IFRS 16	–	–	–	–	–	–	–
Translation difference	–	11	11	17	6	–	45
Accumulated depreciation as at September 30, 2019	–	(437)	(412)	(639)	(238)	(3)	(1,729)
Capital work-in progress as at September 30, 2019							210
Carrying value as at September 30, 2019	185	888	213	242	137	3	1,878
Capital work-in progress as at July 1, 2019							281
Carrying value as at July 1, 2019	189	879	189	247	116	2	1,903

Following are the changes in the carrying value of property, plant and equipment for six months ended September 30, 2020:

(Dollars in millions)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2020	174	1,324	621	882	381	6	3,388
Additions	9	7	12	88	11	–	127
Deletions	–	–	(2)	(6)	(2)	–	(10)
Translation difference	5	36	17	25	12	–	95
Gross carrying value as at September 30, 2020	188	1,367	648	989	402	6	3,600
Accumulated depreciation as at April 1, 2020	–	(434)	(418)	(646)	(243)	(4)	(1,745)
Depreciation	–	(26)	(32)	(63)	(24)	–	(145)
Accumulated depreciation on deletions	–	–	2	6	2	–	10
Translation difference	–	(12)	(11)	(17)	(9)	–	(49)
Accumulated depreciation as at September 30, 2020	–	(472)	(459)	(720)	(274)	(4)	(1,929)
Capital work-in progress as at September 30, 2020							198
Carrying value as at September 30, 2020	188	895	189	269	128	2	1,869
Capital work-in progress as at April 1, 2020							167
Carrying value as at April 1, 2020	174	890	203	236	138	2	1,810

Following are the changes in the carrying value of property, plant and equipment for six months ended September 30, 2019:

(Dollars in millions)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2019	276	1,291	572	845	321	5	3,310
Additions	1	70	69	63	64	1	268
Additions- Business Combinations	–	–	–	9	1	–	10
Deletions	–	–	(1)	(14)	(2)	–	(17)
Reclassified on account of adoption of IFRS 16	(87)	–	–	–	–	–	(87)
Translation difference	(5)	(36)	(15)	(22)	(9)	–	(87)
Gross carrying value as at September 30, 2019	185	1,325	625	881	375	6	3,397
Accumulated depreciation as at April 1, 2019	(5)	(423)	(390)	(606)	(223)	(3)	(1,650)
Depreciation	–	(25)	(33)	(63)	(22)	–	(143)
Accumulated depreciation on deletions	–	–	1	14	2	–	17
Reclassified on account of adoption of IFRS 16	5	–	–	–	–	–	5
Translation difference	–	11	10	16	5	–	42
Accumulated depreciation as at September 30, 2019	–	(437)	(412)	(639)	(238)	(3)	(1,729)
Capital work-in progress as at September 30, 2019							210
Carrying value as at September 30, 2019	185	888	213	242	137	3	1,878
Capital work-in progress as at April 1, 2019							271
Carrying value as at April 1, 2019	271	868	182	239	98	2	1,931

The aggregate depreciation expense is included in cost of sales in the consolidated statement of comprehensive income.

The contractual commitments for capital expenditure primarily comprises of commitments for infrastructure facilities and computer equipment’s aggregating to $142 million and $180 million as at September 30, 2020 and March 31, 2020, respectively.

2.8 Leases

Accounting Policy

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for land and buildings. The group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group assesses whether: (1) the contract involves the use of an identified asset (2) the group has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. .

Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the group changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

The Group as a lessor

Leases for which the group is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2020

(Dollars in millions)

Particulars	Category of ROU asset
	Land	Buildings	Vehicle	Computer	Total
Balance as of July 1, 2020	83	435	3	8	529
Additions*	1	51	–	1	53
Deletions	–	(4)	–	–	(4)
Depreciation	–	(20)	–	(1)	(21)
Translation difference	2	10	–	–	12
Balance as of September 30, 2020	86	472	3	8	569

* Net of lease incentives of $5 million related to lease of Buildings

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2019

(Dollars in millions)

Particulars	Category of ROU asset
	Land	Buildings	Vehicle	Computer	Total
Balance as of July 1, 2019	91	446	3	–	540
Additions	–	45	–	4	49
Deletions	–	(1)	–	–	(1)
Depreciation	(1)	(18)	–	–	(19)
Translation difference	(2)	(14)	–	(1)	(17)
Balance as of September 30, 2019	88	458	3	3	552

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2020

(Dollars in millions)

Particulars	Category of ROU asset
	Land	Buildings	Vehicle	Computer	Total
Balance as of April 1, 2020	83	461	2	5	551
Additions*	1	49	1	4	55
Deletions	–	(12)	–	–	(12)
Depreciation	–	(40)	–	(1)	(41)
Translation difference	2	14	–	–	16
Balance as of September 30, 2020	86	472	3	8	569

* Net of lease incentives of $11 million related to lease of Buildings

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2019

(Dollars in millions)

Particulars	Category of ROU asset
	Land	Buildings	Vehicle	Computer	Total
Balance as of April 1, 2019	–	419	1	–	420
Reclassified on account of adoption of IFRS 16	92	–	–	–	92
Additions	–	62	–	4	66
Additions through business combination	–	26	2	–	28
Deletions	–	(1)	–	–	(1)
Depreciation	(1)	(36)	–	–	(37)
Translation difference	(3)	(12)	–	(1)	(16)
Balance as of September 30, 2019	88	458	3	3	552

The aggregate depreciation expense on ROU assets is included in cost of sales in the consolidated Statement of Comprehensive Income.

The following is the break-up of current and non-current lease liabilities as of September 30, 2020 and March 31, 2020

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Current lease liabilities	88	82
Non-current lease liabilities	551	530
Total	639	612

2.9 Goodwill

Accounting Policy

Goodwill represents purchase consideration in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the purchase consideration, the fair value of net assets acquired is reassessed and the bargain purchase gain is recognized immediately in the net profit in the Statement of Comprehensive Income. Goodwill is measured at cost less accumulated impairment losses.

Impairment

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit (CGU) is less than its carrying amount. For the impairment test, goodwill is allocated to the CGU or groups of CGU’s which benefit from the synergies of the acquisition. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU.

Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized in net profit in the Statement of Comprehensive Income and is not reversed in the subsequent period.

Following is a summary of changes in the carrying amount of goodwill: 

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Carrying value at the beginning	699	512
Goodwill on HIPUS acquisition	–	16
Goodwill on Stater acquisition	–	57
Goodwill on Simplus acquisition	–	130
Translation differences	28	(16)
Carrying value at the end	727	699

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the CGU or groups of CGUs, which benefit from the synergies of the acquisition.

2.10 Business combination

Accounting Policy

Business combinations have been accounted for using the acquisition method under the provisions of IFRS 3 (Revised), Business Combinations.

The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Group. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Contingent consideration is remeasured at fair value at each reporting date and changes in the fair value of the contingent consideration are recognized in the Statement of Comprehensive Income.

The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity of subsidiaries.

Business combinations between entities under common control is accounted for at carrying value of the assets and liabilities in the Group's consolidated financial statements.

The payments related to options issued by the Group over the non-controlling interests in its subsidiaries are accounted as financial liabilities and initially recognized at the estimated present value of gross obligations. Such options are subsequently measured at fair value in order to reflect the amount payable under the option at the date at which it becomes exercisable. In the event that the option expires unexercised, the liability is derecognised.

Transaction costs that the Group incurs in connection with a business combination such as finders’ fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

Kaleidoscope Animations, Inc.

On October 9, 2020, Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) acquired 100% of voting interests in Kaleidoscope Animations, Inc. a US based Product Design and Development firm, for a total consideration of upto $42 million, comprising of cash consideration of $29 million, contingent consideration of upto $ 12 million and retention payouts of upto $1 million, payable to the employees of Kaleidoscope Animations, Inc over the next three years, subject to their continuous employment with the group along with achievement of set targets for respective years. The payment of contingent consideration to sellers of Kaleidoscope Animations, Inc is dependent upon the achievement of certain financial targets by Kaleidoscope Animations, Inc.

As of October 14, 2020 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of Kaleidoscope Animations, Inc, including allocation of purchase consideration to identifiable assets and liabilities.

GuideVision, s.r.o

On October 1, 2020, Infy Consulting Company Limited (Wholly-owned subsidiary of Infosys Consulting Holding AG) acquired 100% of voting interests in GuideVision s.r.o , a ServiceNow Elite Partners in Europe for a total consideration of upto Euro 30 million (approximately $35 million), comprising of cash consideration of Euro 20 million (approximately $23 million), contingent consideration of upto Euro 4 million (approximately $5 million) and retention payouts of upto Euro 6 million (approximately $7 million), payable to the employees of GuideVision s.r.o over the next three years, subject to their continuous employment with the group. The payment of contingent consideration to sellers of GuideVision s.r.o is dependent upon the achievement of certain financial targets by GuideVision s.r.o.

As of October 14, 2020 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of GuideVision s.r.o, including allocation of purchase consideration to identifiable assets and liabilities.

Business transfer- Kallidus Inc. and Skava Systems Private Limited

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently in August 15, 2020, the company entered into a business transfer agreement to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of $23 million (171 crore) and $9 million (66 crore) respectively.

The transaction was between a holding company and a wholly owned subsidiary and therefore was accounted for at carrying values and did not have any impact on the consolidated financial statements.

Proposed Acquisition

Blue Acorn iCi

On October 8, 2020 Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire Blue Acorn iCi, a US based Adobe platinum partner and a digital customer experience company, for a total consideration of upto $125 million including bonuses, subject to fulfillment of customary closing conditions.

2.11 Employees' Stock Option Plans (ESOP)

Accounting Policy

The Group recognizes compensation expense relating to share-based payments in net profit based on estimated fair-values of the awards on the grant date. The estimated fair value of awards is recognized as an expense in net profit in the consolidated statement of comprehensive income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share premium.

Infosys Expanded Stock Ownership Program 2019 (the 2019 Plan)

On June 22, 2019 pursuant to approval by the shareholders in the Annual General Meeting, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 plan shall not exceed 50,000,000 equity shares. To implement the 2019 Plan, upto 45,000,000 equity shares may be issued by way of secondary acquisition of shares by Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019 plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). The performance parameters will be based on a combination of relative Total Shareholder Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the company as decided by administrator. Each of the above performance parameters will be distinct for the purposes of calculation of quantity of shares to vest based on performance. These instruments will generally vest between a minimum of 1 to maximum of 3 years from the grant date.

2015 Stock Incentive Compensation Plan (the 2015 Plan):

On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Stock Incentive Compensation Plan (the 2015 Plan). The maximum number of shares under the 2015 plan shall not exceed 24,038,883 equity shares (this includes 11,223,576 equity shares which are held by the trust towards the 2011 Plan as at March 31, 2016). The Company expects to grant the instruments under the 2015 Plan over the period of 4 to 7 years. The plan numbers mentioned above would further be adjusted for the September 2018 bonus issue.

The equity settled and cash settled RSUs and stock options would vest generally over a period of 4 years and shall be exercisable within the period as approved by the Nomination and Remuneration Committee (NARC). The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant.

Controlled trust holds 16,905,562 and 18,239,356 shares as at September 30, 2020 and March 31, 2020, respectively under the 2015 plan. Out of these shares, 2,00,000 equity shares each have been earmarked for welfare activities of the employees as at September 30, 2020 and March 31, 2020, respectively.

The following is the summary of grants during three months and six months ended September 30, 2020 and September 30, 2019 under the 2015 Plan:

Particulars	2019 Plan				2015 Plan
	Three months ended September 30,		Six months ended September 30,		Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019	2020	2019	2020	2019
Equity settled RSU
KMPs	–	–	207,808	187,793	–	–	204,097	212,096
Employees other than KMP	–	–	–	–	–	24,650	24,600	36,850
	–	–	207,808	187,793	–	24,650	228,697	248,946

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

In accordance with the employee agreement which has been approved by the shareholders, the CEO is eligible to receive an annual grant of RSUs of fair value 3.25 crore (approximately $0.50 million) which will vest overtime in three equal annual installments upon the completion of each year of service from the respective grant date. Though the annual time based grants for the remaining employment term ending on March 31, 2023 have not been granted as of September 30, 2020, since the service commencement date precedes the grant date, the company has recorded employment stock compensation expense in accordance with IFRS 2, Share based payments.

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, in accordance with the terms of his employment agreement, approved the performance-based grant of RSUs amounting to 13 crore (approximately $2 million) for the fiscal 2021 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 192,964 performance based RSU’s were granted effective May 2, 2020. .

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore (approximately $1.50 million) for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 148,434 performance based RSU’s were granted effective May 2, 2020.

COO and Whole-time director

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 4 crore (approximately $0.50 million) for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 59,374 performance based RSU’s were granted effective May 2, 2020.

Other KMP

Under the 2015 plan:

On April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, in accordance with employment agreement, the Board, approved performance-based grant of 11,133 RSUs to other KMP under the 2015 Plan. The grants were made effective May 2, 2020. The performance based RSUs will vest over three years based on certain performance targets.

Break-up of employee stock compensation expense: -

(Dollars in millions)

Particulars	Three months ended September 30, 2020	Three months ended September 30, 2019	Six months ended September 30, 2020	Six months ended September 30, 2019
Granted to:
KMP	3	2	5	4
Employees other than KMP	9	6	19	13
Total (1)	12	8	24	17
(1) Cash settled stock compensation expense included in the above	3	–	6	–

The fair value of the awards are estimated using the Black-Scholes Model for time and non-market performance based options and Monte Carlo simulation model is used for TSR based options.

The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected dividends, expected term and the risk free rate of interest. Expected volatility during the expected term of the options is based on historical volatility of the observed market prices of the Company's publicly traded equity shares during a period equivalent to the expected term of the options. Expected volatility of the comparative company have been modelled based on historical movements in the market prices of their publicly traded equity shares during a period equivalent to the expected term of the options. Correlation coefficient is calculated between each peer entity and the indices as a whole or between each entity in the peer group.

The fair value of each equity settled award is estimated on the date of grant using the following assumptions:

Particulars	'For options granted in
	Fiscal 2021- Equity Shares-RSU	Fiscal 2021- ADS-RSU	Fiscal 2020- Equity Shares-RSU	Fiscal 2020- ADS-RSU
Weighted average share price () / ($ ADS)	674	8.93	728	10.52
Exercise price ()/ ($ ADS)	5.00	0.07	5.00	0.07
Expected volatility (%)	29-42	29-42	22-30	22-26
Expected life of the option (years)	1-4	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3	2-3
Risk-free interest rate (%)	4-5	0.2-0.3	6-7	1-3
Weighted average fair value as on grant date () / ($ ADS)	563	8.23	607	7.84

The expected life of the RSU/ESOP is estimated based on the vesting term and contractual term of the RSU/ESOP, as well as expected exercise behavior of the employee who receives the RSU/ESOP.

2.12 Income taxes

Accounting policy

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the consolidated statement of comprehensive income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future.

The Group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to share premium.

Income tax expense in the consolidated statement of comprehensive income comprises:

(Dollars in millions)

Particulars	Three months ended September 30, 2020	Three months ended September 30, 2019	Six months ended September 30, 2020	Six months ended September 30, 2019
Current taxes
Domestic taxes	184	151	332	309
Foreign taxes	54	60	80	112
	238	211	412	421
Deferred taxes
Domestic taxes	23	5	48	4
Foreign taxes	(6)	(9)	(4)	(22)
	17	(4)	44	(18)
Income tax expense	255	207	456	403

Income tax expense for the three months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of $14 million and $11 million, respectively. Income tax expense for the six months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of $31 million and $17 million respectively. These reversals pertains to prior periods on account of adjudication of certain disputed matters in favor of the Company and upon filing of return across various jurisdictions.

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:

(Dollars in millions)

Particulars	Three months ended September 30, 2020	Three months ended September 30, 2019	Six months ended September 30, 2020	Six months ended September 30, 2019
Profit before income taxes	910	779	1,675	1,521
Enacted tax rates in India	34.94%	34.94%	34.94%	34.94%
Computed expected tax expense	317	273	584	532
Tax effect due to non-taxable income for Indian tax purposes	(84)	(86)	(156)	(168)
Overseas taxes	25	31	48	58
Tax provision (reversals)	(14)	(11)	(31)	(17)
Effect of differential tax rates	(6)	(2)	(10)	(3)
Effect of exempt non operating income	(1)	(1)	(2)	(3)
Effect of unrecognized deferred tax assets	2	5	4	7
Effect of non-deductible expenses	4	3	9	6
Branch profit tax (net of credits)	(1)	(4)	(2)	(8)
Others	13	(1)	12	(1)
Income tax expense	255	207	456	403

The applicable Indian corporate statutory tax rate for the three months ended and six months ended September 30, 2020 and September 30, 2019 is 34.94% each.

Deferred income tax for the three months ended and six months ended September 30, 2020 and September 30, 2019 substantially relates to origination and reversal of temporary differences.

As at September 30, 2020, claims against the Group not acknowledged as debts from the Indian Income tax authorities amounted to $455 million (3,360 crore). Amount paid to statutory authorities against this amounted to $816 million (6,018 crore).

As at March 31, 2020, claims against the Group not acknowledged as debts from the Income tax authorities amounted to $443 million (3,353 crore). Amount paid to statutory authorities against the above tax claims amounted to $707 million (5,352 crore).

The claims against the group majorly represent demands arising on completion of assessment proceedings under the Income Tax Act, 1961. These claims are on account of multiple issues of disallowances such as disallowance of profits earned from STP Units and SEZ Units, disallowance of deductions in respect of employment of new employees under section 80JJAA, disallowance of expenditure towards software being held as capital in nature, payments made to Associated Enterprises held as liable for withholding of taxes.

These matters are pending before various Appellate Authorities and the management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Group's financial position and results of operations.

2.13 Reconciliation of basic and diluted shares used in computing earnings per share

Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

2.14 Related party transactions

Refer Note 2.20 "Related party transactions" in the Company’s 2020 Annual Report on Form 20-F for the full names and other details of the Company's subsidiaries and controlled trusts.

Changes in Subsidiaries

During the six months ended September 30, 2020, the following are the changes in the subsidiaries:

- On June 1, 2020, Fluido Oy, acquired 100% of the voting interests in Simplus U.K Ltd and Simplus Ireland Ltd. from Simplus Europe Ltd.

- Brilliant Basics (MENA) DMCC, a wholly-owned subsidiary of Brilliant Basics Holdings Limited, has been liquidated effective July 17, 2020.

- Infosys Limited Bulgaria EOOD, a wholly-owned subsidiary of Infosys Ltd, was incorporated on September 11, 2020.

Changes in key management personnel

The following are the changes in the key management personnel:

- D.N. Prahlad resigned as director of the Company effective April 20, 2020.

- Uri Levine appointed as independent director of the Company effective April 20, 2020.

- Bobby Parikh appointed as independent director of the Company effective July 15, 2020.

Transactions with key management personnel

The table below describes the compensation to key management personnel which comprise directors and executive officers:

(Dollars in millions)

Particulars	Three months ended September 30, 2020	Three months ended September 30, 2019	Six months ended September 30, 2020	Six months ended September 30, 2019
Salaries and other employee benefits to whole-time directors and executive officers(1)(2)	5	4	9	9
Commission and other benefits to non-executive/ independent directors	–	–	–	1
Total	5	4	9	10

⁽¹⁾ Total employee stock compensation expense for the three months ended September 30, 2020 and September 30, 2019 includes a charge of $ 3 million and $2 million respectively, towards key managerial personnel. For the six months ended September 30, 2020 and September 30, 2019, includes a charge of $5 million and $4 million respectively, towards key managerial personnel. (Refer note 2.11)

⁽²⁾ Does not include post-employment benefit based on actuarial valuation as this is done for the Company as a whole.

2.15 Segment Reporting

IFRS 8 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Group's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. The Chief Operating Decision Maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented along business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the accounting policies.

Business segments of the Group are primarily enterprises in Financial Services and Insurance, enterprises in Manufacturing, enterprises in Retail, Consumer Packaged Goods and Logistics, enterprises in the Energy, Utilities, Resources and Services, enterprises in Communication, Telecom OEM and Media, enterprises in Hi-Tech, enterprises in Life Sciences and Healthcare and all other segments. The Financial services reportable segments has been aggregated to include the Financial Services operating segment and Finacle operating segment because of the similarity of the economic characteristics. All other segments represent the operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services.

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Revenue for 'all other segments' represents revenue generated by Infosys Public Services and revenue generated from customers located in India, Japan and China and other enterprises in public service. Allocated expenses of segments include expenses incurred for rendering services from the Group's offshore software development centres and on-site expenses, which are categorized in relation to the associated efforts of the segment. Certain expenses such as depreciation and amortization, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably. The management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and adjusted against the total income of the Group.

Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Business segment revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

Disclosure of revenue by geographic locations is given in note 2.16 Revenue from operations

2.15.1 Business Segments

Three months ended September 30, 2020 and September 30, 2019

(Dollars in millions)

	Financial Services(1)	Retail(2)	Communication(3)	Energy , Utilities, resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	Others(5)	Total
Revenues	1,061	492	417	408	302	303	225	104	3,312
	1,023	489	420	420	325	243	207	83	3,210
Identifiable operating expenses	546	234	246	209	155	170	112	69	1,741
	528	244	249	222	180	144	109	50	1,726
Allocated expenses	196	83	81	88	58	43	38	29	616
	231	98	83	82	73	43	42	32	684
Segment profit	319	175	90	111	89	90	75	6	955
	264	147	88	116	72	56	56	1	800
Unallocable expenses									115
									104
Operating profit									840
									696
Other income, net (Refer Note 2.18)									76
									89
Finance cost									6
									6
Profit before Income taxes									910
									779
Income tax expense									255
									207
Net profit									655
									572
Depreciation and amortization									115
									103
Non-cash expenses other than depreciation and amortization									–
									1

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

Six months ended September 30, 2020 and September 30, 2019 

(Dollars in millions)

	Financial Services(1)	Retail(2)	Communication(3)	Energy , Utilities, resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	Others(5)	Total
Revenues	2,044	940	834	807	600	575	433	200	6,433
	2,008	982	851	827	626	484	399	163	6,340
Identifiable operating expenses	1,061	444	497	414	325	319	217	130	3,407
	1,056	494	505	438	351	291	221	98	3,454
Allocated expenses	401	182	166	170	120	87	77	61	1,264
	441	193	168	169	144	84	83	63	1,345
Segment profit	582	314	171	223	155	169	139	9	1,762
	511	295	178	220	131	109	95	2	1,541
Unallocable expenses									215
									203
Operating profit									1,547
									1,338
Other income, net (Refer Note 2.18)									140
									195
Finance cost									12
									12
Profit before Income taxes									1,675
									1,521
Income tax expense									456
									403
Net profit									1,219
									1,118
Depreciation and amortization									215
									201
Non-cash expenses other than depreciation and amortization									–
									2

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

2.15.2 Significant clients

No client individually accounted for more than 10% of the revenues for the three months and six months ended September 30, 2020 and September 30, 2019, respectively.

2.16 Revenue from Operations

Accounting Policy:

The Group derives revenues primarily from IT services comprising software development and related services, maintenance, consulting and package implementation, licensing of software products and platforms across the Group’s core and digital offerings (together called as “software related services”) and business process management services. Contracts with customers are either on a time-and-material, unit of work, fixed-price or on a fixed-timeframe basis.

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties, in writing, to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services (“performance obligations”) to customers in an amount that reflects the consideration the Group has received or expects to receive in exchange for these products or services (“transaction price”). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Group allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Group estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services.

The Group’s contracts may include variable consideration including rebates, volume discounts and penalties. The Group includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Revenue on time-and-material and unit of work based contracts, are recognized as the related services are performed. Fixed price maintenance revenue is recognized ratably either on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period or ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Group’s costs to fulfil the contract is not even through the period of contract because the services are generally discrete in nature and not repetitive. Revenue from other fixed-price, fixed-timeframe contracts, where the performance obligations are satisfied over time is recognized using the percentage-of-completion method. Efforts or costs expended are used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the term of the contracts and are recognized in net profit in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

The billing schedules agreed with customers include periodic performance based billing and / or milestone based progress billings. Revenues in excess of billing are classified as unbilled revenue while billing in excess of revenues are classified as contract liabilities (which we refer to as unearned revenues).

In arrangements for software development and related services and maintenance services, by applying the revenue recognition criteria for each distinct performance obligation, the arrangements with customers generally meet the criteria for considering software development and related services as distinct performance obligations. For allocating the transaction price, the Group measures the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Group is unable to determine the standalone selling price, the Group uses the expected cost plus margin approach in estimating the standalone selling price. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses.

Revenue from licenses where the customer obtains a “right to use” the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period.

Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS).When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two distinct separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for implementation, the Group uses the expected cost plus margin approach in estimating the standalone selling price. Where the license is required to be substantially customized as part of the implementation service the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognized using the percentage-of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the performance obligations are satisfied. ATS revenue is recognized ratably on a straight line basis over the period in which the services are rendered.

Contracts with customers includes subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the Group is acting as an agent between the customer and the vendor, and gross when the Group is the principal for the transaction. In doing so, the group first evaluates whether it controls the good or service before it is transferred to the customer. The Group considers whether it has the primary obligation to fulfil the contract, inventory risk, pricing discretion and other factors to determine whether it controls the goods or service and therefore is acting as a principal or an agent.

The incremental costs of obtaining a contract (i.e., costs that would not have been incurred if the contract had not been obtained) are recognized as an asset if the Group expects to recover them. Any capitalized contract costs are amortized, with the expense recognised as the Group transfers the related goods or services to the customer.

The Group presents revenues net of indirect taxes in its consolidated statement of comprehensive income.

Revenues for the three months ended and six months ended September 30, 2020 and September 30, 2019 is as follows

(Dollars in millions)

Particulars	Three months ended September 30, 2020	Three months ended September 30, 2019	Six months ended September 30, 2020	Six months ended September 30, 2019
Revenue from software services	3,063	3,004	5,967	5,957
Revenue from products and platforms	249	206	466	383
Total revenue from operations	3,312	3,210	6,433	6,340

The Group has evaluated the impact of COVID–19 resulting from (i) the possibility of constraints to render services which may require revision of estimations of costs to complete the contract because of additional efforts; (ii) onerous obligations; (iii) penalties relating to breaches of service level agreements, and (iv) termination or deferment of contracts by customers. The Group has concluded that the impact of COVID–19 is not material based on these estimates. Due to the nature of the pandemic, the Group continues to monitor developments to identify significant uncertainties relating to revenue in future periods.

Disaggregate revenue information

The table below presents disaggregated revenues from contracts with customers by geography and offerings for each of our business segments. The Group believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors.

Three months ended September 30, 2020 and September 30, 2019

(Dollars in millions)

Particulars	Financial Services(1)	Retail(2)	Communication(3)	Energy , Utilities, resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	Others(5)	Total
Revenues by Geography*
North America	613	324	218	230	158	286	154	27	2,010
	589	318	264	233	185	229	134	18	1,970
Europe	219	139	94	141	135	6	66	7	807
	223	141	62	147	124	6	67	5	775
India	53	2	10	1	2	9	1	22	100
	48	2	7	–	3	7	2	17	86
Rest of the world	176	27	95	36	7	2	4	48	395
	163	28	87	40	13	1	4	43	379
Total	1,061	492	417	408	302	303	225	104	3,312
	1,023	489	420	420	325	243	207	83	3,210
Revenue by offerings
Digital	501	254	204	194	135	150	93	37	1,568
	401	209	166	158	121	88	64	23	1,230
Core	560	238	213	214	167	153	132	67	1,744
	622	280	254	262	204	155	143	60	1,980
Total	1,061	492	417	408	302	303	225	104	3,312
	1,023	489	420	420	325	243	207	83	3,210

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

* Geographical revenues is based on the domicile of customer

Six months ended September 30, 2020 and September 30, 2019

(Dollars in millions)

Particulars	Financial Services(1)	Retail(2)	Communication(3)	Energy , Utilities, resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	Others(5)	Total
Revenues by Geography*
North America	1,190	612	457	456	330	543	292	49	3,929
	1,168	638	534	457	354	458	254	34	3,897
Europe	420	273	178	277	251	9	131	14	1,553
	415	283	127	290	242	12	135	10	1,514
India	102	3	17	1	4	19	2	43	191
	91	3	11	–	6	12	3	32	158
Rest of the world	332	52	182	73	15	4	8	94	760
	334	58	179	80	24	2	7	87	771
Total	2,044	940	834	807	600	575	433	200	6,433
	2,008	982	851	827	626	484	399	163	6,340
Revenue by offerings
Digital	953	468	401	368	270	264	168	65	2,957
	761	413	320	297	231	172	116	39	2,349
Core	1,091	472	433	439	330	311	265	135	3,476
	1,247	569	531	530	395	312	283	124	3,991
Total	2,044	940	834	807	600	575	433	200	6,433
	2,008	982	851	827	626	484	399	163	6,340

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

* Geographical revenues is based on the domicile of customer

Digital Services

Digital Services comprise of service and solution offerings of the Group that enable our clients to transform their businesses. These include offerings that enhance customer experience, leverage AI-based analytics and big data, engineer digital products and IoT, modernize legacy technology systems, migrate to cloud applications and implement advanced cyber security systems.

Core Services

Core Services comprise traditional offerings of the Group that have scaled and industrialized over a number of years. These primarily include application management services, proprietary application development services, independent validation solutions, product engineering and management, infrastructure management services, traditional enterprise application implementation, support and integration services.

Products & platforms

The Group also derives revenues from the sale of products and platforms including Finacle – core banking solution, Edge Suite of products, Infosys Nia - Artificial Intelligence (AI) platform which applies next-generation AI and machine learning, Panaya platform, Skava platform, Stater digital platform and Infosys McCamish- insurance platform.

Trade Receivables and Contract Balances

The timing of revenue recognition, billings and cash collections results in receivables, unbilled revenue, and unearned revenue on the Group’s Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon achievement of contractual milestones.

The Group’s receivables are rights to consideration that are unconditional. Unbilled revenues comprising revenues in excess of billings from time and material contracts and fixed price maintenance contracts are classified as financial asset when the right to consideration is unconditional and is due only after a passage of time.

Invoicing to the clients for other fixed price contracts is based on milestones as defined in the contract and therefore the timing of revenue recognition is different from the timing of invoicing to the customers. Therefore, unbilled revenues for other fixed price contracts (contract asset) are classified as non-financial asset because the right to consideration is dependent on completion of contractual milestones.

Invoicing in excess of earnings are classified as unearned revenue.

Trade receivable and unbilled revenues are presented net of impairment in the consolidated Balance Sheet.

2.17 Unbilled revenue

(Dollars in millions)

Particulars	As at
	September 30, 2020	March 31, 2020
Unbilled financial asset (1)	438	369
Unbilled non financial asset (2)	592	572
Total	1,030	941

⁽¹⁾ Right to consideration is unconditional and is due only after a passage of time.

⁽²⁾ Right to consideration is dependent on completion of contractual milestones.

2.18 Break-up of expenses and other income, net

Accounting Policy

2.18.1 Gratuity

The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees of Infosys and its Indian subsidiaries. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the group.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method. The company fully contributes all ascertained liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). In case of Infosys BPM and EdgeVerve, contributions are made to the Infosys BPM Employees' Gratuity Fund Trust and EdgeVerve Systems Limited Employees' Gratuity Fund Trust, respectively. Trustees administer contributions made to the Trusts and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by law of India.

The Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability / asset are recognized in other comprehensive income and not reclassified to profit or loss in subsequent period. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in net profits in the statement of comprehensive income.

2.18.2 Superannuation

Certain employees of Infosys, Infosys BPM and EdgeVerve are participants in a defined contribution plan. The Group has no further obligations to the Plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

2.18.3 Provident fund

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The company contributes a portion of the contributions to the Infosys Limited Employees' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

In respect of Indian subsidiaries, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the respective companies make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The companies have no further obligation to the plan beyond its monthly contributions.

2.18.4 Compensated absences

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

2.18.5 Other income

Other income is comprised primarily of interest income, dividend income, gain/loss on investment and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

2.18.6 Foreign Currency

Transactions and translations

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are recognized in the Consolidated Statement of Comprehensive Income and reported within exchange gains/ (losses) on translation of assets and liabilities, net, except when deferred in Other Comprehensive Income as qualifying cash flow hedges. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction. The related revenue and expense are recognised using the same exchange rate.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

The translation of financial statements of the foreign subsidiaries to the presentation currency is performed for assets and liabilities using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using the average exchange rate for the respective periods. The gains or losses resulting from such translation are included in currency translation reserves under other components of equity. When a subsidiary is disposed off, in full, the relevant amount is transferred to net profit in the Statement of Comprehensive Income. However when a change in the parent's ownership does not result in loss of control of a subsidiary, such changes are recorded through equity.

Other Comprehensive Income, net of taxes includes translation differences on non-monetary financial assets measured at fair value at the reporting date, such as equities classified as financial instruments and measured at fair value through other comprehensive income (FVOCI).

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the Balance Sheet date.

2.18.7 Government grants

The Group recognizes government grants only when there is reasonable assurance that the conditions attached to them will be complied with, and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in the net profit in the statement of comprehensive income on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in the statement of comprehensive income over the periods necessary to match them with the related costs which they are intended to compensate.

2.18.8 Operating Profits

Operating profit of the Group is computed considering the revenues, net of cost of sales, selling and marketing expenses and administrative expenses.

Cost of sales

(Dollars in millions)

Particulars	Three months ended		Six months ended
	September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
Employee benefit costs	1,603	1,608	3,194	3,187
Depreciation and amortization	115	103	215	201
Travelling costs	17	63	30	156
Cost of technical sub-contractors	220	234	435	470
Cost of software packages for own use	40	37	78	69
Third party items bought for service delivery to clients	108	58	187	114
Short term leases	1	3	2	6
Consultancy and professional charges	1	2	3	3
Communication costs	11	11	23	21
Repairs and maintenance	18	18	36	32
Provision for post-sales client support	(1)	3	–	2
Others	(8)	–	(7)	–
Total	2,125	2,140	4,196	4,261

Selling and marketing expenses

(Dollars in Millions)

Particulars	Three months ended		Six months ended
	September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
Employee benefit costs	134	128	271	254
Travelling costs	1	13	1	27
Branding and marketing	13	17	20	37
Consultancy and professional charges	3	5	5	11
Communication costs	–	1	1	1
Others	2	1	7	3
Total	153	165	305	333

Administrative expenses

(Dollars in Millions)

Particulars	Three months ended		Six months ended
	September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
Employee benefit costs	68	62	134	124
Consultancy and professional charges	34	41	66	76
Repairs and maintenance	29	40	60	79
Power and fuel	5	9	9	17
Communication costs	10	7	20	15
Travelling costs	2	10	4	20
Rates and taxes	8	7	15	12
Short-term leases	1	–	3	–
Insurance charges	5	3	9	6
Commission to non-whole time directors	–	–	–	1
Impairment loss recognized/(reversed) under expected credit loss model	8	5	22	13
Contributions towards Corporate Social Responsibility	19	14	35	24
Others	5	11	8	21
Total	194	209	385	408

Other income, net

(Dollars in Millions)

Particulars	Three months ended		Six months ended
	September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
Interest income on financial assets carried at amortized cost	42	43	81	92
Interest income on financial assets carried at fair value through other comprehensive income	13	12	25	28
Dividend income on investments carried at fair value through profit or loss	1	–	1	–
Gain/(loss) on investments carried at fair value through profit or loss	1	5	5	15
Gain/(loss) on investments carried at fair value through other comprehensive income	4	2	7	4
Interest income on income tax refund	–	–	–	1
Exchange gains / (losses) on forward and options contracts	41	(5)	47	15
Exchange gains / (losses) on translation of other assets and liabilities	(35)	28	(39)	21
Others	9	4	13	19
	76	89	140	195

2.19 Equity

Accounting policy

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects.

Treasury Shares

When any entity within the Group purchases the company's ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from Securities premium.

Description of reserves

Retained earnings

Retained earnings represent the amount of accumulated earnings of the Group.

Share premium

The amount received in excess of the par value has been classified as share premium. Additionally, share-based compensation recognized in net profit in the consolidated statement of comprehensive income is credited to share premium.

Other Reserves

The Special Economic Zone Re-investment reserve has been created out of the profit of the eligible SEZ unit in terms of the provisions of Sec 10AA (1)(ii) of Income Tax Act, 1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in terms of the provisions of the Sec 10AA (2) of the Income Tax Act, 1961.

Capital Redemption Reserve

In accordance with section 69 of the Indian Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.

Other components of equity

Other components of equity consist of currency translation, remeasurement of net defined benefit liability / asset, equity instruments fair valued through other comprehensive income, changes on fair valuation of investments and changes in fair value of derivatives designated as cash flow hedges, net of taxes.

Cash flow hedge reserve

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the net profit in the consolidated Statement of Comprehensive Income upon the occurrence of the related forecasted transaction.

2.19.1 Capital Allocation Policy

Effective from fiscal 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As of September 30, 2020, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure there are no externally imposed capital requirements.

2.19.2 Dividend

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits.

The Company declares and pays dividends in Indian rupees. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is also subject to withholding tax at applicable rates.

Amount of per share dividend recognized as distribution to equity shareholders:

Particulars	Six months ended September 30, 2020		Six months ended September 30, 2019
	in	in US Dollars	in	in US Dollars
Final dividend for fiscal 2020	9.50	0.13	–	–
Final dividend for fiscal 2019	–	–	10.50	0.15

The Board of Directors in their meeting on April 20, 2020 recommended a final dividend of 9.50/- per equity share (approximately $0.13 per equity share) for the financial year ended March 31, 2020. The same was approved by the shareholders at the Annual General Meeting held on June 27, 2020 which resulted in a cash outflow of 4,029 crore (approximately $539 million) excluding dividend paid on treasury shares.

The Board of Directors in their meeting on October 14, 2020 declared an interim dividend of 12/- per equity share (approximately $0.16 per equity share) which would result in a net cash outflow of approximately 5,091 crore ($690 million) excluding dividend paid on treasury shares.

2.19.3 Share capital and share premium

The Company has only one class of shares referred to as equity shares having a par value of 5/- each. 16,905,562 shares and 18,239,356 shares were held by controlled trust, as at September 30, 2020 and March 31, 2020, respectively.

for and on behalf of the Board of Directors of Infosys Limited

Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and  Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Bengaluru October 14, 2020

EX-99.13 OTH CONTRCT

  Exhibit 99.8

IFRS INR Earning Release

INDEPENDENT AUDITOR’S REPORT

TO THE BOARD OF DIRECTORS OF INFOSYS LIMITED

Report on the Audit of the Interim Condensed Consolidated Financial Statements

Opinion

We have audited the accompanying interim condensed consolidated financial statements of INFOSYS LIMITED (the “Company”) and its subsidiaries (the Company and its subsidiaries together referred to as the “Group”), which comprise the Condensed Consolidated Balance Sheet as at September 30, 2020, the Condensed Consolidated Statement of Comprehensive Income for three months and six months period ended on that date, the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Statement of Cash Flows for the six months period ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the “interim condensed consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid interim condensed consolidated financial statements give a true and fair view in conformity with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”), of the consolidated state of affairs of the Group as at September 30, 2020, the consolidated profit and consolidated total comprehensive income for the three months and six months period ended on that date, consolidated changes in equity and its consolidated cash flows for the six months ended on that date.

Basis for Opinion

We conducted our audit of the interim condensed consolidated financial statements in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (“ICAI”). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Interim Condensed Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the ICAI, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the interim condensed consolidated financial statements.

Management’s Responsibilities for the Interim Condensed Consolidated Financial Statements

The Company’s Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and consolidated cash flows of the Group in accordance with IAS 34 as issued by the IASB. The respective Board of Directors of the companies included in the Group are responsible for maintenance of the adequate accounting records for safeguarding assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the respective interim financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the interim condensed consolidated financial statements by the Directors of the Company, as aforesaid.

In preparing the interim condensed consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group are responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Interim Condensed Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the interim condensed consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these interim condensed consolidated financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the interim condensed consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on effectiveness of the Company’s internal financial controls.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the interim condensed consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the interim condensed consolidated financial statements, including the disclosures, and whether the interim condensed consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group to express an opinion on the interim condensed consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the interim condensed consolidated financial statements of which we are the independent auditors.

Materiality is the magnitude of misstatements in the interim condensed consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the interim condensed consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the interim condensed consolidated financial statements.

We communicate with those charged with governance of the Company and such other entities included in the interim condensed consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Place: Mumbai Date: October 14, 2020 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)         Sanjiv V. Pilgaonkar Partner (Membership No.039826) (UDIN: 20039826AAAAGW2771)

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Financial Statements under International Financial Reporting Standards (IFRS) in Indian Rupee for the three months and six months ended September 30, 2020

Index

Condensed Consolidated Balance Sheet

Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Overview and notes to the financial statements

1. Overview

1.1 Company overview

1.2 Basis of preparation of financial statements

1.3 Basis of consolidation

1.4 Use of estimates and judgments

1.5 Critical accounting estimates

1.6 Recent accounting pronouncements

2. Notes to the Interim Condensed Consolidated Financial Statements

2.1 Cash and cash equivalents

2.2 Investments

2.3 Financial instruments

2.4 Prepayments and other assets

2.5 Other liabilities

2.6 Provisions and other contingencies

2.7 Property, plant and equipment

2.8 Leases

2.9 Goodwill and other Intangible assets

2.10 Business combinations

2.11 Employees' Stock Option Plans (ESOP)

2.12 Income Taxes

2.13 Reconciliation of basic and diluted shares used in computing earnings per share

2.14 Related party transactions

2.15 Segment reporting

2.16 Revenue from Operations

2.17 Unbilled Revenue

2.18 Break-up of expenses and other income, net

2.19 Equity

Infosys Limited and subsidiaries

(In crore except equity share data)

Consolidated Balance Sheet as at	Note	September 30, 2020	March 31, 2020
ASSETS
Current assets
Cash and cash equivalents	2.1	22,411	18,649
Current investments	2.2	3,600	4,655
Trade receivables		17,930	18,487
Unbilled revenue	2.17	7,596	7,121
Prepayments and other current assets	2.4	5,531	5,595
Income tax assets	2.12	–	7
Derivative financial instruments	2.3	257	62
Total current assets		57,325	54,576
Non-current assets
Property, plant and equipment	2.7	13,791	13,699
Right-of-use assets	2.8	4,195	4,168
Goodwill	2.9	5,360	5,286
Intangible assets		1,752	1,900
Non-current investments	2.2	7,754	4,137
Deferred income tax assets	2.12	1,305	1,744
Income tax assets	2.12	5,402	5,384
Other non-current assets	2.4	1,694	1,874
Total non-current assets		41,253	38,192
Total assets		98,578	92,768
LIABILITIES AND EQUITY
Current liabilities
Trade payables		2,375	2,852
Lease liabilities	2.8	647	619
Derivative financial instruments	2.3	22	491
Current income tax liabilities	2.12	1,593	1,490
Client deposits		–	18
Unearned revenue		3,356	2,990
Employee benefit obligations		1,941	1,832
Provisions	2.6	686	572
Other current liabilities	2.5	10,066	9,992
Total current liabilities		20,686	20,856
Non-current liabilities
Lease liabilities	2.8	4,068	4,014
Deferred income tax liabilities	2.12	863	968
Employee benefit obligations		58	38
Other non-current liabilities	2.5	1,469	1,048
Total liabilities		27,144	26,924
Equity
Share capital - 5 par value 480,00,00,000 (480,00,00,000) equity shares authorized, issued and outstanding 424,25,06,036 (424,07,53,210) equity shares fully paid up, net of 1,69,05,562 (1,82,39,356) treasury shares as at September 30, 2020 (March 31, 2020)	2.19	2,123	2,122
Share premium		745	600
Retained earnings		61,652	57,506
Cash flow hedge reserves		6	(15)
Other reserves		4,972	4,070
Capital redemption reserve		111	111
Other components of equity		1,391	1,056
Total equity attributable to equity holders of the Company		71,000	65,450
Non-controlling interests		434	394
Total equity		71,434	65,844
Total liabilities and equity		98,578	92,768

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP Chartered Accountants Firm’s Registration No : 117366W/ W-100018	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Infosys Limited and subsidiaries

(In crore except equity share and per equity share data) 

Condensed Consolidated Statement of Comprehensive Income for the	Note	Three months ended September 30,		Six months ended September 30,
		2020	2019	2020	2019
Revenues	2.16	24,570	22,629	48,234	44,432
Cost of sales	2.18	15,771	15,079	31,473	29,858
Gross profit		8,799	7,550	16,761	14,574
Operating expenses
Selling and marketing expenses	2.18	1,136	1,162	2,283	2,336
Administrative expenses	2.18	1,435	1,476	2,885	2,855
Total operating expenses		2,571	2,638	5,168	5,191
Operating profit		6,228	4,912	11,593	9,383
Other income, net	2.18	570	626	1,046	1,362
Finance cost		48	42	96	82
Profit before income taxes		6,750	5,496	12,543	10,663
Income tax expense	2.12	1,892	1,459	3,412	2,824
Net profit		4,858	4,037	9,131	7,839
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		7	(22)	154	(39)
Equity instruments through other comprehensive income, net		(5)	2	(6)	5
		2	(20)	148	(34)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		27	17	21	(7)
Exchange differences on translation of foreign operations		21	(35)	185	(10)
Fair value changes on investments, net		(45)	2	9	18
		3	(16)	215	1
Total other comprehensive income/(loss), net of tax		5	(36)	363	(33)
Total comprehensive income		4,863	4,001	9,494	7,806
Profit attributable to:
Owners of the Company		4,845	4,019	9,078	7,817
Non-controlling interests		13	18	53	22
		4,858	4,037	9,131	7,839
Total comprehensive income attributable to:
Owners of the Company		4,847	3,984	9,434	7,782
Non-controlling interests		16	17	60	24
		4,863	4,001	9,494	7,806
Earnings per equity share
Equity shares of par value 5/- each
Basic ()		11.42	9.46	21.40	18.28
Diluted ()		11.40	9.44	21.37	18.25
Weighted average equity shares used in computing earnings per equity share	2.13
Basic		424,19,08,471	424,93,43,678	424,15,06,966	427,56,15,916
Diluted		424,89,61,564	425,58,22,953	424,84,34,533	428,23,22,537

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP Chartered Accountants Firm’s Registration No : 117366W/ W-100018	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Infosys Limited and subsidiaries

Condensed Consolidated Statement of Changes in Equity

 (In crore except equity share data)

	Shares(1)	Share capital	Share premium	Retained earnings	Other reserves(2)	Capital redemption reserve	Other components of equity	Cash flow hedge reserve	Total equity attributable to equity holders of the Company	Non-controlling interest	Total equity
Balance as at April 1, 2019	433,59,54,462	2,170	396	58,848	2,570	61	882	21	64,948	58	65,006
Impact on account of adoption of IFRS 16*	–	–	–	(40)	–	–	–	–	(40)	–	(40)
	433,59,54,462	2,170	396	58,808	2,570	61	882	21	64,908	58	64,966
Changes in equity for the six months ended September 30, 2019
Net profit	–	–	–	7,817	–	–	–	–	7,817	22	7,839
Remeasurement of the net defined benefit liability/asset*	–	–	–	–	–	–	(39)	–	(39)	–	(39)
Fair value changes on derivatives designated as Cash flow hedge*	–	–	–	–	–	–	–	(7)	(7)	–	(7)
Exchange differences on translation of foreign operations	–	–	–	–	–	–	(12)	–	(12)	2	(10)
Equity instruments through other comprehensive income*	–	–	–	–	–	–	5	–	5	–	5
Fair value changes on investments, net*	–	–	–	–	–	–	18	–	18	–	18
Total comprehensive income for the period	–	–	–	7,817	–	–	(28)	(7)	7,782	24	7,806
Shares issued on exercise of employee stock options (Refer to note 2.11)	13,95,470	–	1	–	–	–	–	–	1	–	1
Buyback of equity shares	(9,78,67,266)	(49)	–	(6,211)	–	–	–	–	(6,260)	–	(6,260)
Transaction cost relating to buyback*	–	–	–	(11)	–	–	–	–	(11)	–	(11)
Amount transferred to capital redemption reserve upon buyback	–	–	–	(50)	–	50	–	–	–	–	–
Non–controlling interests on acquisition of subsidiary	–	–	–	–	–	–	–	–	–	311	311
Employee stock compensation expense (refer to note 2.11)	–	–	117	–	–	–	–	–	117	–	117
Income tax benefit arising on exercise of stock options	–	–	7	–	–	–	–	–	7	–	7
Transfer on account of options not exercised	–	–	(1)	1	–	–	–	–	–	–	–
Financial liability under option arrangements	–	–	–	(598)	–	–	–	–	(598)	–	(598)
Transferred to other reserves	–	–	–	(1,145)	1,145	–	–	–	–	–	–
Transferred from other reserves on utilization	–	–	–	616	(616)	–	–	–	–	–	–
Dividends paid to non controlling interest of subsidiary	–	–	–	–	–	–	–	–	–	(33)	(33)
Dividends (including dividend distribution tax)	–	–	–	(5,425)	–	–	–	–	(5,425)	–	(5,425)
Balance as at September 30, 2019	423,94,82,666	2,121	520	53,802	3,099	111	854	14	60,521	360	60,881
Balance as at April 1, 2020	424,07,53,210	2,122	600	57,506	4,070	111	1,056	(15)	65,450	394	65,844
Changes in equity for the six months ended September 30, 2020
Net profit	–	–	–	9,078	–	–	–	–	9,078	53	9,131
Remeasurement of the net defined benefit liability/asset*	–	–	–	–	–	–	154	–	154	–	154
Equity instruments through other comprehensive income*	–	–	–	–	–	–	(6)	–	(6)	–	(6)
Fair value changes on derivatives designated as cash flow hedge*	–	–	–	–	–	–	–	21	21	–	21
Exchange differences on translation of foreign operations	–	–	–	–	–	–	178	–	178	7	185
Fair value changes on investments, net*	–	–	–	–	–	–	9	–	9	–	9
Total comprehensive income for the period	–	–	–	9,078	–	–	335	21	9,434	60	9,494
Shares issued on exercise of employee stock options (Refer to note 2.11)	17,52,826	1	5	–	–	–	–	–	6	–	6
Employee stock compensation expense (refer to note 2.11)	–	–	134	–	–	–	–	–	134	–	134
Income tax benefit arising on exercise of stock options	–	–	5	–	–	–	–	–	5	–	5
Transfer on account of options not exercised	–	–	1	(1)	–	–	–	–	–	–	–
Transferred to other reserves	–	–	–	(1,463)	1,463	–	–	–	–	–	–
Transferred from other reserves on utilization	–	–	–	561	(561)	–	–	–	–	–	–
Dividends paid to non controlling interest of subsidiary	–	–	–	–	–	–	–	–	–	(20)	(20)
Dividends	–	–	–	(4,029)	–	–	–	–	(4,029)	–	(4,029)
Balance as at September 30, 2020	424,25,06,036	2,123	745	61,652	4,972	111	1,391	6	71,000	434	71,434

  * net of tax

⁽¹⁾ excludes treasury shares of 1,69,05,562 as at September 30, 2020, 1,82,39,356 as at April 1, 2020, 1,89,29,512 as at September 30, 2019 and 2,03,24,982 as at April 1, 2019, held by consolidated trust.

⁽²⁾ Represents the Special Economic Zone Re-investment reserve created out of the profit of the eligible SEZ unit in terms of the provisions of Sec 10AA(1)(ii) of Income Tax Act,1961. The reserve should be utilized by the Group for acquiring new plant and machinery for the purpose of its business in terms of the provisions of the Sec 10AA(2) of the Income Tax Act, 1961.

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP Chartered Accountants Firm’s Registration No : 117366W/ W-100018	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Infosys Limited and subsidiaries

Condensed Consolidated Statement of Cash Flows

Accounting Policy

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated. The Group considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.

(In crore)

Particulars	Note	Six months ended September 30,
		2020	2019
Operating activities:
Net Profit		9,131	7,839
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization	2.18	1,611	1,408
Income tax expense	2.12	3,412	2,824
Finance cost		96	82
Interest and dividend income		(273)	(283)
Effect of exchange rate changes on assets and liabilities		(7)	54
Impairment loss under expected credit loss model		159	82
Stock compensation expense	2.11	174	119
Other adjustments		(60)	(102)
Changes in working capital
Trade receivables and unbilled revenue		(67)	(1,578)
Prepayments and other assets		334	473
Trade payables		(477)	(1,071)
Unearned revenue		349	(121)
Other liabilities and provisions		424	1,051
Cash generated from operations		14,806	10,777
Income taxes paid		(2,987)	(2,705)
Net cash generated by operating activities		11,819	8,072
Investing activities:
Expenditure on property, plant and equipment and intangibles		(1,306)	(1,891)
Loans to employees		–	5
Deposits placed with corporation		(133)	(7)
Interest and dividend received		258	200
Payment towards acquisition of business, net of cash acquired		–	(511)
Payment of contingent consideration pertaining to acquisition of business		(150)	–
Redemption of escrow pertaining to Buyback		–	257
Payments to acquire Investments
- Quoted debt securities		(5,493)	(1,632)
- Liquid mutual fund units and fixed maturity plan securities		(11,960)	(18,295)
- Equity and preference securities		–	(41)
- Other investments		(1)	(16)
Proceeds on sale of investments
- Equity and preference securities		–	3
- Certificates of deposit		900	1,995
- Quoted debt securities		2,249	2,571
- Commercial paper		–	500
- Liquid mutual fund units and fixed maturity plan securities		11,850	18,946
- Other investments		22	10
Other receipts		25	23
Net cash (used)/generated in investing activities		(3,739)	2,117
Financing activities:
Payment of lease liabilities		(351)	(294)
Payment of dividends (including dividend distribution tax)		(4,031)	(5,422)
Payment of dividends to non-controlling interests of subsidiary		(20)	(33)
Buyback of equity shares including transaction cost		–	(7,478)
Shares issued on exercise of employee stock options		6	1
Net cash used in financing activities		(4,396)	(13,226)
Effect of exchange rate changes on cash and cash equivalents		78	(58)
Net increase/(decrease) in cash and cash equivalents		3,684	(3,037)
Cash and cash equivalents at the beginning of the period	2.1	18,649	19,568
Cash and cash equivalents at the end of the period		22,411	16,473
Supplementary information:
Restricted cash balance	2.1	404	375

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP Chartered Accountants Firm’s Registration No : 117366W/ W-100018	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

Notes to the Interim Condensed Consolidated Financial Statements

1. Overview

1.1 Company overview

Infosys Limited ('the Company' or Infosys) provides consulting, technology, outsourcing and next-generation digital services, to enable clients to execute strategies for their digital transformation.

Infosys together with its subsidiaries and controlled trusts is herein after referred to as the "Group".

The Company is a public limited company incorporated and domiciled in India and has its registered office at Bengaluru, Karnataka, India. The Company has its primary listings on the BSE Ltd. and National Stock Exchange of India Limited. The Company’s American Depositary Shares (ADS) representing equity shares are listed on the New York Stock Exchange (NYSE).

The Group's interim condensed consolidated financial statements are authorized for issue by the Company's Board of Directors on October 14, 2020.

1.2 Basis of preparation of financial statements

These interim condensed consolidated financial statements have been prepared in compliance with IAS 34, Interim Financial Reporting as issued by International Accounting Standards Board, under the historical cost convention on the accrual basis except for certain financial instruments which have been measured at fair values. Accordingly, these interim condensed consolidated financial statements do not include all the information required for a complete set of financial statements. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s consolidated financial statements under IFRS in indian rupee for the year ended March 31, 2020. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the quarter and year-to-date figures are taken from the source and rounded to the nearest digits, the quarter figures in this statement added up to the figures reported for the previous quarters might not always add up to the year-to-date figures reported in this statement.

1.3 Basis of consolidation

Infosys consolidates entities which it owns or controls. The interim condensed consolidated financial statements comprise the financial statements of the Company, its controlled trusts and its subsidiaries. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Group Companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. The financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company, are excluded.

1.4 Use of estimates and judgments

The preparation of the financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the interim condensed financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in the financial statements have been disclosed in Note 1.5. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the interim condensed consolidated financial statements.

Estimation of uncertainties relating to the global health pandemic from COVID-19 (COVID 19):

The Group has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these interim condensed consolidated financial statements including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Group has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Group's financial statements may differ from that estimated as at the date of approval of these interim condensed consolidated financial statements

1.5 Critical accounting estimates and judgments

a. Revenue recognition

The Group’s contracts with customers include promises to transfer multiple products and services to a customer. Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgement.

Fixed price maintenance revenue is recognized ratably on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period. Revenue from fixed price maintenance contract is recognized ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Group’s costs to fulfil the contract is not even through the period of the contract because the services are generally discrete in nature and not repetitive. The use of method to recognize the maintenance revenues requires judgment and is based on the promises in the contract and nature of the deliverables.

The Group uses the percentage-of-completion method in accounting for other fixed-price contracts. Use of the percentage-of-completion method requires the Group to determine the actual efforts or costs expended to date as a proportion of the estimated total efforts or costs to be incurred. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

b. Income taxes

The Company's two major tax jurisdictions are India and the U.S., though the Company also files tax returns in other overseas jurisdictions.

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

In assessing the realizability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the group will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. (Refer to Note 2.12)

c. Business combinations and intangible assets

Business combinations are accounted for using IFRS 3 (Revised), Business Combinations. IFRS 3 requires us to fair value identifiable intangible assets and contingent consideration to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Estimates are required to be made in determining the value of contingent consideration, value of option arrangements and intangible assets. These valuations are conducted by external valuation experts. These measurements are based on information available at the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management

d. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group's assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. (Refer to Note 2.7).

e. Impairment of Goodwill

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit (CGUs) is less than its carrying amount. For the impairment test, goodwill is allocated to the CGU or groups of CGUs which benefit from the synergies of the acquisition and which represent the lowest level at which goodwill is monitored for internal management purposes.

The recoverable amount of CGUs is determined based on higher of value-in-use and fair value less cost to sell. Key assumptions in the cash flow projections are prepared based on current economic conditions and comprises estimated long term growth rates, weighted average cost of capital and estimated operating margins.

f. Leases

IFRS 16 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Infosys’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Group has concluded that no material changes are required to lease period relating to the existing lease contracts. (Refer to Note no. 2.8)

g. Allowance for credit losses on receivables and unbilled revenue

The Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Group considered current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates. In calculating expected credit loss, the Group has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID -19.

1.6 Recent accounting pronouncements

New and revised IFRS Standards in issue but not yet effective:

Amendments to IAS 16 Property, Plant and Equipment Proceeds before Intended Use

Amendments to IAS 37 Onerous Contracts Cost of Fulfilling a Contract

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform—Phase 2

Amendments to IAS 16

On May 14, 2020 International Accounting Standards Board (IASB) has issued amendment to IAS 16 Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16) which amends the standard to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss.

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2022, although early adoption is permitted. The Group is in the process of evaluating the impact of the amendment.

Amendments to IAS 37

On May 14, 2020 IASB has issued Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) which specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2022, although early adoption is permitted. The Group is in the process of evaluating the impact of the amendment.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform (Phase 2)

The International Accounting Standards Board (Board) has finalized its response to the ongoing reform of inter-bank offered rates (IBOR) and other interest rate benchmarks by issuing a package of amendments to IFRS Standards in August 2020. The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. The amendments in this final phase relate to practical expedient for particular changes in contractual cash flows, relief from specific hedge accounting requirements and certain disclosure requirement.

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2021, although early adoption is permitted.

The Group is in the process of evaluating the impact of the amendment.

2. Notes to the Interim Condensed Consolidated Financial Statements

2.1 Cash and cash equivalents

Cash and cash equivalents consist of the following:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Cash and bank deposits	16,885	12,288
Deposits with financial institutions	5,526	6,361
Total Cash and cash equivalents	22,411	18,649

Cash and cash equivalents as at September 30, 2020 and March 31, 2020 include restricted cash and bank balances of 404 crore and 396 crore, respectively. The restrictions are primarily on account of bank balances held by irrevocable trusts controlled by the Company and bank balances held as margin money deposits against guarantees.

The deposits maintained by the Group with banks and financial institutions comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.

2.2 Investments

The carrying value of the investments are as follows:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
(i) Current
Fair Value through profit or loss
Liquid mutual fund units	2,736	2,104
Fixed Maturity Plan Securities	–	489
Fair Value through other comprehensive income
Quoted Debt Securities	615	936
Certificates of deposit	249	1,126
Total current investments	3,600	4,655
(ii) Non-current
Amortised Cost
Quoted debt securities	1,846	1,846
Fair Value through other comprehensive income
Quoted debt securities	5,745	2,126
Unquoted equity and preference securities	101	102
Fair Value through profit or loss
Unquoted Preference securities	8	9
Others(1)	54	54
Total non-current investments	7,754	4,137
Total investments	11,354	8,792
Investments carried at amortised cost	1,846	1,846
Investments carried at fair value through other comprehensive income	6,710	4,290
Investments carried at fair value through profit or loss	2,798	2,656

⁽¹⁾ Uncalled capital commitments outstanding as at September 30, 2020 and March 31, 2020 was 59 crore and 61 crore, respectively.

Refer note 2.3 for accounting policies on financial instruments.

Method of fair valuation:

(In crore)

Class of investment	Method	Fair value as at
		September 30, 2020	March 31, 2020
Liquid mutual fund units	Quoted price	2,736	2,104
Fixed maturity plan securities	Market observable inputs	–	489
Quoted debt securities- carried at amortized cost	Quoted price and market observable inputs	2,233	2,144
Quoted debt securities- carried at fair value through other comprehensive income	Quoted price and market observable inputs	6,360	3,062
Certificates of deposit	Market observable inputs	249	1,126
Unquoted equity and preference securities - carried at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model	101	102
Unquoted equity and preference securities - carried at fair value through profit or loss	Discounted cash flows method, Market multiples method, Option pricing model	8	9
Others	Discounted cash flows method, Market multiples method, Option pricing model	54	54
Total		11,741	9,090

Certain quoted investments are classified as Level 2 in the absence of active market for such investments.

2.3 Financial instruments

Accounting Policy

2.3.1 Initial recognition

The Group recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

2.3.2 Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income (FVOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Group has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.

(iii) Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration and financial liability under option arrangements recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

b. Derivative financial instruments

The Group holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

(i) Financial assets or financial liabilities, at fair value through profit or loss

This category has derivative financial assets or liabilities which are not designated as hedges.

Although the Group believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under IFRS 9, Financial Instruments. Any derivative that is either not designated as hedge, or is so designated but is ineffective as per IFRS 9, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of comprehensive income when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the Balance Sheet date.

(ii) Cash flow hedge

The Group designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the net profit in the statement of comprehensive income. If the hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the net profit in the statement of comprehensive income upon the occurrence of the related forecasted transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified to net profit in the consolidated statement of comprehensive income.

2.3.3 Derecognition of financial instruments

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under IFRS 9. A financial liability (or a part of a financial liability) is derecognized from the Group's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

2.3.4 Fair value of financial instruments

In determining the fair value of its financial instruments, the Group uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

Refer to table 'Financial instruments by category' below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the balance sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of those instruments.

2.3.5 Impairment

The Group recognizes loss allowances using the expected credit loss (ECL) model for the financial assets and unbilled revenue which are not fair valued through profit or loss. Loss allowance for trade receivables and unbilled revenues with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in consolidated statement of comprehensive income.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at September 30, 2020 were as follows:

(In crore)

Particulars	Amortised cost	Financial assets / liabilities at fair value through profit or loss		Financial assets / liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer to Note 2.1)	22,411	–	–	–	–	22,411	22,411
Investments (Refer to Note 2.2)
Liquid mutual fund units	–	–	2,736	–	–	2,736	2,736
Quoted debt securities	1,846	–	–	–	6,360	8,206	8,593 (1)
Certificates of deposit	–	–	–	–	249	249	249
Unquoted equity and preference securities	–	–	8	101	–	109	109
Unquoted investment others	–	–	54	–	–	54	54
Trade receivables	17,930	–	–	–	–	17,930	17,930
Unbilled revenues (Refer to Note 2.17)(3)	3,233	–	–	–	–	3,233	3,233
Prepayments and other assets (Refer to Note 2.4)	3,664	–	–	–	–	3,664	3,591 (2)
Derivative financial instruments	–	–	239	–	18	257	257
Total	49,084	–	3,037	101	6,627	58,849	59,163
Liabilities:
Trade payables	2,375	–	–	–	–	2,375	2,375
Lease liabilities	4,715	–	–	–	–	4,715	4,715
Derivative financial instruments	–	–	20	–	2	22	22
Financial liability under option arrangements	–	–	678	–	–	678	678
Other liabilities including contingent consideration	8,087	–	79	–	–	8,166	8,166
Total	15,177	–	777	–	2	15,956	15,956

⁽¹⁾ On account of fair value changes including interest accrued

⁽²⁾ Excludes interest accrued on quoted debt securities carried at amortized cost of 73 crore.

⁽³⁾ Excludes unbilled revenue on contracts where the right to consideration is dependent on completion of contractual milestones

The carrying value and fair value of financial instruments by categories as at March 31, 2020 were as follows:

(In crore)

Particulars	Amortised cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer to Note 2.1)	18,649	–	–	–	–	18,649	18,649
Investments (Refer to Note 2.2)
Liquid mutual fund units	–	–	2,104	–	–	2,104	2,104
Fixed maturity plan securities	–	–	489	–	–	489	489
Quoted debt securities	1,846	–	–	–	3,062	4,908	5,206 (1)
Certificates of deposit	–	–	–	–	1,126	1,126	1,126
Unquoted equity and preference securities	–	–	9	102	–	111	111
Unquoted investments others	–	–	54	–	–	54	54
Trade receivables	18,487	–	–	–	–	18,487	18,487
Unbilled revenue (Refer to Note 2.17)(3)	2,796	–	–	–	–	2,796	2,796
Prepayments and other assets (Refer to Note 2.4)	3,596	–	–	–	–	3,596	3,514 (2)
Derivative financial instruments	–	–	53	–	9	62	62
Total	45,374	–	2,709	102	4,197	52,382	52,598
Liabilities:
Trade payables	2,852	–	–	–	–	2,852	2,852
Lease liabilities	4,633	–	–	–	–	4,633	4,633
Derivative financial instruments	–	–	471	–	20	491	491
Financial liability under option arrangements	–	–	621	–	–	621	621
Other liabilities including contingent consideration	7,966	–	340	–	–	8,306	8,306
Total	15,451	–	1,432	–	20	16,903	16,903

⁽¹⁾ On account of fair value changes including interest accrued

⁽²⁾ Excludes interest accrued on quoted debt securities carried at amortized cost of 82 crore.

⁽³⁾ Excludes unbilled revenue on contracts where the right to consideration is dependent on completion of contractual milestones

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities as at September 30, 2020:

(In crore)

Particulars	As at September 30, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in liquid mutual fund units (Refer to Note 2.2)	2,736	2,736	–	–
Investments in quoted debt securities (Refer to Note 2.2)	8,593	7,966	627	–
Investments in certificates of deposit (Refer to Note 2.2)	249	–	249	–
Investments in unquoted equity and preference securities (Refer to Note 2.2)	109	–	–	109
Investments in unquoted investments others (Refer to Note 2.2)	54	–	–	54
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts	257	–	257	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts	22	–	22	–
Financial liability under option arrangements	678	–	–	678
Liability towards contingent consideration (Refer to Note 2.5)*	79	–	–	79

* Discount rate pertaining to contingent consideration ranges from 8% to 14%

During the six months ended September 30, 2020, quoted debt securities of 55 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price and quoted debt securities of 129 crore were transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

The following table presents fair value hierarchy of assets and liabilities as at March 31, 2020:

(In crore)

Particulars	As at March 31, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in liquid mutual fund units (Refer to Note 2.2)	2,104	2,104	–	–
Investments in fixed maturity plan securities (Refer to Note 2.2)	489	–	489	–
Investments in quoted debt securities (Refer to Note 2.2)	5,206	4,678	528	–
Investments in certificates of deposit (Refer to Note 2.2)	1,126	–	1,126	–
Investments in unquoted equity and preference securities(Refer to Note 2.2)	111	–	–	111
Investments in unquoted investments others (Refer to Note 2.2)	54	–	–	54
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	62	–	62	–
Liabilities
Derivative financial instruments- loss on outstanding foreign exchange forward and option contracts	491	–	491	–
Financial liability under option arrangements	621	–	–	621
Liability towards contingent consideration (Refer to Note 2.5)*	340	–	–	340

* Discount rate pertaining to contingent consideration ranges from 8% to 14%

During the year ended March 31, 2020, quoted debt securities of 662 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price and quoted debt securities of 50 crore were transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

A one percentage point change in the unobservable inputs used in fair valuation of Level 3 assets and liabilities does not have a significant impact in its value.

Majority of investments of the Group are fair valued based on Level 1 or Level 2 inputs. These investments primarily include investment in liquid mutual fund units, fixed maturity plan securities, certificates of deposit, commercial papers, quoted bonds issued by government and quasi-government organizations and non convertible debentures. The Group invests after considering counterparty risks based on multiple criteria including Tier I capital, Capital Adequacy Ratio, Credit Rating, Profitability, NPA levels and Deposit base of banks and financial institutions. These risks are monitored regularly as per its risk management program.

2.4 Prepayments and other assets

Prepayments and other assets consist of the following:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Rental deposits	38	27
Security deposits	6	8
Loans to employees	130	239
Prepaid expenses(1)	981	968
Interest accrued and not due	546	474
Withholding taxes and others(1)	1,445	1,583
Advance payments to vendors for supply of goods(1)	43	145
Deposit with corporations*	1,948	1,795
Deferred contract cost(1)	38	33
Net investment in sublease of right of use asset	72	35
Other non financial assets	25	28
Other financial assets	259	260
Total Current prepayment and other assets	5,531	5,595
Non-current
Loans to employees	23	21
Deposit with corporations*	36	55
Rental deposits	209	221
Security deposits	50	50
Withholding taxes and others(1)	778	777
Deferred contract cost(1)	84	101
Prepaid expenses(1)	66	87
Net investment in sublease of right of use asset	334	398
Prepaid gratuity(1)	78	151
Other non financial assets	23	–
Other financial assets	13	13
Total Non- current prepayment and other assets	1,694	1,874
Total prepayment and other assets	7,225	7,469
Financial assets in prepayments and other assets	3,664	3,596

⁽¹⁾ Non financial assets

Withholding taxes and others primarily consist of input tax credits and Cenvat recoverable from Government of India. As at September 30, 2020, Cenvat recoverable includes 372 crore which are pending adjudication. The Group expects these amounts to be sustainable on adjudication and recoverable on final resolution.

*Deposit with corporations represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

2.5 Other liabilities

Other liabilities comprise the following :

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Accrued compensation to employees	3,451	2,958
Accrued expenses	4,050	3,921
Withholding taxes and others(1)	1,943	1,759
Retention money	19	72
Liabilities of controlled trusts	179	188
Deferred income - government grants(1)	22	2
Accrued gratuity (1)	–	3
Accrued provident fund liability (1)	–	64
Liability towards contingent consideration	49	219
Capital Creditors	230	280
Other non-financial liabilities (1)	4	6
Other financial liabilities	119	520
Total current other liabilities	10,066	9,992
Non-current
Liability towards contingent consideration	30	121
Withholding taxes and others(1)	506	–
Accrued gratuity (1)	34	28
Accrued provident fund liability (1)	120	185
Accrued compensation to employees	34	22
Deferred income - government grants(1)	43	43
Deferred income(1)	18	21
Other financial liabilities	5	5
Other non-financial liabilities(1)	1	2
Financial liability under option arrangements	678	621
Total non-current other liabilities	1,469	1,048
Total other liabilities	11,535	11,040
Financial liabilities included in other liabilities	8,844	8,927
Financial liability towards contingent consideration on an undiscounted basis	88	367

⁽¹⁾ Non financial liabilities

Accrued expenses primarily relates to cost of technical sub-contractors, telecommunication charges, legal and professional charges, brand building expenses, overseas travel expenses and office maintenance.

2.6 Provisions and other contingencies

Accounting Policy

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

Post sales client support

The Group provides its clients with a fixed-period post sales support on its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales. The Group estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Group recognizes any impairment loss on the assets associated with that contract.

Provisions comprise the following:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Provision for post sales client support and other provisions	686	572
	686	572

Provision for post sales client support and other provisions represents cost associated with providing post sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 1 year.

Provision for post sales client support and other provisions is included in cost of sales in the consolidated statement of comprehensive income.

As at September 30, 2020 and March 31, 2020 claims against the Group, not acknowledged as debts, (excluding demands from income tax authorities- Refer to Note 2.12) amounted to 285 crore and 230 crore respectively.

Legal proceedings

On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020

The Group is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Group’s management reasonably expects that these legal actions, when ultimately concluded and determined, will not have a material and adverse effect on the Group’s results of operations or financial condition.

2.7 Property, plant and equipment

Accounting Policy

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The Group depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

Building	22-25 years
Plant and machinery(1)	5 years
Computer equipment	3-5 years
Furniture and fixtures	5 years
Vehicles	5 years
Leasehold improvements	Lower of useful life of the asset or lease term

⁽¹⁾ Includes solar plant with a useful life of 20 years

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the consolidated statement of comprehensive income when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in net profit in the consolidated statement of comprehensive income.

Impairment

Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in net profit in the statement of comprehensive income is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in net profit in the statement of comprehensive income if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.

Following are the changes in the carrying value of property, plant and equipment for the three months ended September 30, 2020:

(In crore)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at July 1, 2020	1,385	10,057	4,725	7,019	2,907	45	26,138
Additions	1	14	61	317	57	–	450
Deletions	–	–	(5)	(34)	(6)	(1)	(46)
Translation difference	–	12	2	1	3	–	18
Gross carrying value as at September 30, 2020	1,386	10,083	4,783	7,303	2,961	44	26,560
Accumulated depreciation as at July 1, 2020	–	(3,380)	(3,274)	(5,085)	(1,929)	(30)	(13,698)
Depreciation	–	(96)	(119)	(265)	(89)	(1)	(570)
Accumulated depreciation on deletions	–	–	4	34	6	1	45
Translation difference	–	(1)	(1)	1	(4)	–	(5)
Accumulated depreciation as at September 30, 2020	–	(3,477)	(3,390)	(5,315)	(2,016)	(30)	(14,228)
Capital work-in progress as at July 1, 2020							1,337
Carrying value as at July 1, 2020	1,385	6,677	1,451	1,934	978	15	13,777
Capital work-in progress as at September 30, 2020							1,459
Carrying value as at September 30, 2020	1,386	6,606	1,393	1,988	945	14	13,791

Following are the changes in the carrying value of property, plant and equipment for the three months ended September 30, 2019:

(In crore)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at July 1, 2019	1,305	9,074	4,104	6,086	2,412	40	23,021
Additions	7	330	328	230	258	2	1,155
Deletions	–	–	(1)	(72)	(6)	(1)	(80)
Translation difference	–	(11)	–	(3)	(2)	–	(16)
Gross carrying value as at September 30, 2019	1,312	9,393	4,431	6,241	2,662	41	24,080
Accumulated depreciation as at July 1, 2019	–	(3,009)	(2,804)	(4,380)	(1,612)	(23)	(11,828)
Depreciation	–	(88)	(118)	(222)	(82)	(2)	(512)
Accumulated depreciation on deletions	–	–	1	71	6	1	79
Translation difference	–	(1)	–	4	3	–	6
Accumulated depreciation as at September 30, 2019	–	(3,098)	(2,921)	(4,527)	(1,685)	(24)	(12,255)
Capital work-in progress as at July 1, 2019							1,944
Carrying value as at July 1, 2019	1,305	6,065	1,300	1,706	800	17	13,137
Capital work-in progress as at September 30, 2019							1,488
Carrying value as at September 30, 2019	1,312	6,295	1,510	1,714	977	17	13,313

Following are the changes in the carrying value of property, plant and equipment for the six months ended September 30, 2020:

(In crore)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2020	1,316	10,016	4,701	6,676	2,887	45	25,641
Additions	70	53	92	663	82	–	960
Deletions	–	–	(12)	(44)	(13)	(1)	(70)
Translation difference	–	14	2	8	5	–	29
Gross carrying value as at September 30, 2020	1,386	10,083	4,783	7,303	2,961	44	26,560
Accumulated depreciation as at April 1, 2020	–	(3,284)	(3,161)	(4,885)	(1,848)	(28)	(13,206)
Depreciation	–	(191)	(239)	(471)	(177)	(3)	(1,081)
Accumulated depreciation on deletions	–	–	11	44	13	1	69
Translation difference	–	(2)	(1)	(3)	(4)	–	(10)
Accumulated depreciation as at September 30, 2020	–	(3,477)	(3,390)	(5,315)	(2,016)	(30)	(14,228)
Capital work-in progress as at April 1, 2020							1,264
Carrying value as at April 1, 2020	1,316	6,732	1,540	1,791	1,039	17	13,699
Capital work-in progress as at September 30, 2020							1,459
Carrying value as at September 30, 2020	1,386	6,606	1,393	1,988	945	14	13,791

Following are the changes in the carrying value of property, plant and equipment for the six months ended September 30, 2019:

(In crore)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2019	1,910	8,926	3,951	5,846	2,220	38	22,891
Additions	7	494	487	441	447	4	1,880
Additions- Business combinations	–	–	–	60	10	–	70
Deletions	–	–	(6)	(102)	(10)	(1)	(119)
Reclassified on account of adoption of IFRS 16	(605)	–	–	–	–	–	(605)
Translation difference	–	(27)	(1)	(4)	(5)	–	(37)
Gross carrying value as at September 30, 2019	1,312	9,393	4,431	6,241	2,662	41	24,080
Accumulated depreciation as at April 1, 2019	(33)	(2,927)	(2,697)	(4,192)	(1,541)	(22)	(11,412)
Depreciation	–	(172)	(231)	(440)	(158)	(3)	(1,004)
Accumulated depreciation on deletions	–	–	6	101	10	1	118
Reclassified on account of adoption of IFRS 16	33	–	–	–	–	–	33
Translation difference	–	1	1	4	4	–	10
Accumulated depreciation as at September 30, 2019	–	(3,098)	(2,921)	(4,527)	(1,685)	(24)	(12,255)
Capital work-in progress as at April 1, 2019							1,877
Carrying value as at April, 2019	1,877	5,999	1,254	1,654	679	16	13,356
Capital work-in progress as at September 30, 2019							1,488
Carrying value as at September 30, 2019	1,312	6,295	1,510	1,714	977	17	13,313

The aggregate depreciation expense is included in cost of sales in the consolidated statement of comprehensive income.

The contractual commitments for capital expenditure primarily comprises of commitments for infrastructure facilities and computer equipment’s aggregating to 1,044 crore and 1,365 crore as at September 30, 2020 and March 31, 2020, respectively.

2.8 Leases

Accounting Policy

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for land and buildings. The group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group assesses whether: (1) the contract involves the use of an identified asset (2) the group has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the group changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

The Group as a lessor

Leases for which the group is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2020:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of July 1, 2020	625	3,285	20	67	3,997
Additions*	7	377	1	2	387
Deletions	–	(32)	–	–	(32)
Depreciation	(2)	(147)	(2)	(4)	(155)
Translation difference	1	(4)	–	1	(2)
Balance as of September 30, 2020	631	3,479	19	66	4,195

*Net of lease incentives of 34 crore related to lease of buildings

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2019:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of July 1, 2019	630	3,079	20	–	3,729
Additions	–	320	2	26	348
Deletions	(3)	(5)	–	–	(8)
Depreciation	(2)	(131)	(3)	(1)	(137)
Translation difference	–	(14)	(1)	–	(15)
Balance as of September 30, 2019	625	3,249	18	25	3,917

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2020:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2020	626	3,485	15	42	4,168
Additions*	7	360	9	32	408
Deletions	–	(90)	–	–	(90)
Depreciation	(3)	(292)	(5)	(8)	(308)
Translation difference	1	16	–	–	17
Balance as of September 30, 2020	631	3,479	19	66	4,195

*Net of lease incentives of 84 crore related to lease of buildings

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2019:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2019	–	2,898	9	–	2,907
Reclassified on account of adoption of IFRS 16	634	–	–	–	634
Additions	–	437	4	26	467
Additions through business combination	–	177	10	–	187
Deletions	(3)	(5)	–	–	(8)
Depreciation	(4)	(252)	(5)	(1)	(262)
Translation difference	(2)	(6)	–	–	(8)
Balance as of September 30, 2019	625	3,249	18	25	3,917

The aggregate depreciation expense on ROU assets is included in cost of sales in the consolidated statement of comprehensive income.

The following is the break-up of current and non-current lease liabilities as of September 30, 2020 and March 31, 2020:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current lease liabilities	647	619
Non-current lease liabilities	4,068	4,014
Total	4,715	4,633

2.9 Goodwill and other Intangible assets

2.9.1 Goodwill

Accounting Policy

Goodwill represents the purchase consideration in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquired entity. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the purchase consideration, the fair value of net assets acquired is reassessed and the bargain purchase gain is recognized immediately in the net profit in the Statement of Comprehensive Income. Goodwill is measured at cost less accumulated impairment losses.

Impairment

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit (CGU) is less than its carrying amount. For the impairment test, goodwill is allocated to the CGU or groups of CGU’s which benefit from the synergies of the acquisition. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU.

Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized in net profit in the Statement of Comprehensive Income and is not reversed in the subsequent period.

Following is a summary of changes in the carrying amount of goodwill:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Carrying value at the beginning	5,286	3,540
Goodwill on Stater acquisition	–	399
Goodwill on Hipus acquisition	–	108
Goodwill on Simplus acquisition	–	983
Translation differences	74	256
Carrying value at the end	5,360	5,286

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the CGU or groups of CGUs, which benefit from the synergies of the acquisition.

2.10 BUSINESS COMBINATIONS

2.10.1 Business combinations

Accounting policy

Business combinations have been accounted for using the acquisition method under the provisions of IFRS 3 (Revised), Business Combinations.

The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Group. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Contingent consideration is remeasured at fair value at each reporting date and changes in the fair value of the contingent consideration are recognized in the Statement of Comprehensive Income.

The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity of subsidiaries.

The payments related to options issued by the Group over the non-controlling interests in its subsidiaries are accounted as financial liabilities and initially recognized at the estimated present value of gross obligations. Such options are subsequently measured at fair value in order to reflect the amount payable under the option at the date at which it becomes exercisable. In the event that the option expires unexercised, the liability is derecognised.

Business combinations between entities under common control is outside the scope of IFRS 3 (Revised), Business Combinations and is accounted for at carrying value of the assets and liabilities in the Group's consolidated financial statements.

Transaction costs that the Group incurs in connection with a business combination such as finder’s fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

Kaleidoscope Animations, Inc.

On October 9, 2020, Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) acquired 100% of voting interests in Kaleidoscope Animations, Inc. a US based Product Design and Development firm, for a total consideration of upto $42 million (approximately 310 crore), comprising of cash consideration of $29 million (approximately 214 crore), contingent consideration of upto $12 million (approximately 91 crore) and retention payouts of upto $1 million (approximately 5 crore), payable to the employees of Kaleidoscope Animations, Inc over the next three years, subject to their continuous employment with the group along with achievement of set targets for respective years. The payment of contingent consideration to sellers of Kaleidoscope Animations, Inc is dependent upon the achievement of certain financial targets by Kaleidoscope Animations, Inc.

As of October 14, 2020 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of Kaleidoscope Animations, Inc, including allocation of purchase consideration to identifiable assets and liabilities.

GuideVision, s.r.o

On October 1, 2020, Infy Consulting Company Limited (Wholly-owned subsidiary of Infosys Consulting Holding AG) acquired 100% of voting interests in GuideVision s.r.o , a ServiceNow Elite Partners in Europe for a total consideration of upto Euro 30 million (approximately 259 crore), comprising of cash consideration of Euro 20 million (approximately 173 crore), contingent consideration of upto Euro 4 million (approximately 36 crore) and retention payouts of upto Euro 6 million (approximately 50 crore), payable to the employees of GuideVision s.r.o over the next three years, subject to their continuous employment with the group. The payment of contingent consideration to sellers of GuideVision s.r.o is dependent upon the achievement of certain financial targets by GuideVision s.r.o.

As of October 14, 2020 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of GuideVision s.r.o, including allocation of purchase consideration to identifiable assets and liabilities.

Business transfer- Kallidus Inc. and Skava Systems Private Limited

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently on August 15, 2020, the company entered into a business transfer agreement to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of 171 crore and 66 crore respectively.

The transaction was between a holding company and a wholly owned subsidiary and therefore was accounted for at carrying values and did not have any impact on the consolidated financial statements.

Proposed Acquisition

Blue Acorn iCi

On October 8, 2020 Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire Blue Acorn iCi, a US based Adobe platinum partner and a digital customer experience company, for a total consideration of upto $125 million (approximately 922 crore) including bonuses, subject to fulfillment of customary closing conditions.

2.11 Employees' Stock Option Plans (ESOP)

Accounting Policy

The Group recognizes compensation expense relating to share-based payments in net profit based on estimated fair-values of the awards on the grant date. The estimated fair value of awards is recognized as an expense in net profit in the consolidated statement of comprehensive income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share premium.

Infosys Expanded Stock Ownership Program 2019 (the 2019 Plan)

On June 22, 2019 pursuant to the approval by the shareholders in the Annual General Meeting, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 plan shall not exceed 50,000,000 equity shares. To implement the 2019 Plan , up to 45,000,000 equity shares may be issued by way of secondary acquisition of shares by the Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019 plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). The performance parameters will be based on a combination of relative Total Shareholder Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the company as decided by administrator. Each of the above performance parameters will be distinct for the purposes of calculation of quantity of shares to vest based on performance. These instruments will generally vest between a minimum of 1 to maximum of 3 years from the grant date.

2015 Stock Incentive Compensation Plan (the 2015 Plan) :

On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Stock Incentive Compensation Plan (the 2015 Plan). The maximum number of shares under the 2015 plan shall not exceed 24,038,883 equity shares (this includes 11,223,576 equity shares which are held by the trust towards the 2011 Plan as at March 31, 2016). The Company expects to grant the instruments under the 2015 Plan over the period of 4 to 7 years. The plan numbers mentioned above would further be adjusted for the September 2018 bonus issue.

The equity settled and cash settled RSUs and stock options would vest generally over a period of 4 years and shall be exercisable within the period as approved by the Nomination and Remuneration Committee (NARC) . The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant.

Controlled trust holds 16,905,562 and 18,239,356 shares as at September 30, 2020 and March 31, 2020, respectively under the 2015 plan. Out of these shares 200,000 equity shares each have been earmarked for welfare activities of the employees as at September 30, 2020 and March 31, 2020.

The following is the summary of grants during the three months and six months ended September 30, 2020 and September 30, 2019:

	2019 Plan				2015 Plan
Particulars	Three months ended September 30,		Six months ended September 30,		Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019	2020	2019	2020	2019
Equity settled RSU
KMPs	–	–	2,07,808	1,87,793	–	–	2,04,097	2,12,096
Employees other than KMP	–	–	–	–	–	24,650	24,600	36,850
Total Grants	–	–	2,07,808	1,87,793	–	24,650	2,28,697	2,48,946

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

In accordance with the employee agreement which has been approved by the shareholders, the CEO is eligible to receive an annual grant of RSUs of fair value 3.25 crore which will vest overtime in three equal annual installments upon the completion of each year of service from the respective grant date. Though the annual time based grants for the remaining employment term ending on March 31, 2023 have not been granted as of September 30, 2020, since the service commencement date precedes the grant date, the company has recorded employment stock compensation expense in accordance with IFRS 2, Share based payments.

The Board, on April 20, 2020, based on the recommendations of the nomination and remuneration committee, in accordance with the terms of his employment agreement, approved the grant of performance-based RSUs of fair value of 13 crore for fiscal 2021 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 192,964 performance based RSU’s were granted effective May 2, 2020.

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 148,434 performance based RSU’s were granted effective May 2, 2020.

COO and Whole time director 

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 4 crore for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 59,374 performance based RSU’s were granted effective May 2, 2020.

Other KMPs 

Under the 2015 plan:

On April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, in accordance with employment agreement, the Board, approved performance-based grant of 11,133 RSUs to other KMP under the 2015 Plan. The grants were made effective May 2, 2020. The performance based RSUs will vest over three years based on certain performance targets.

Break-up of employee stock compensation expense

(in crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Granted to:
KMP	19	13	36	31
Employees other than KMP	79	41	138	88
Total (1)	98	54	174	119
(1) Cash settled stock compensation expense included in the above	27	1	40	2

The fair value of the awards are estimated using the Black-Scholes Model for time and non-market performance based options and Monte Carlo simulation model is used for TSR based options.

The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected dividends, expected term and the risk free rate of interest. Expected volatility during the expected term of the options is based on historical volatility of the observed market prices of the Company's publicly traded equity shares during a period equivalent to the expected term of the options. Expected volatility of the comparative company have been modelled based on historical movements in the market prices of their publicly traded equity shares during a period equivalent to the expected term of the options. Correlation coefficient is calculated between each peer entity and the indices as a whole or between each entity in the peer group.

The fair value of each equity settled award is estimated on the date of grant with the following assumptions:

Particulars	For options granted in
	Fiscal 2021- Equity Shares-RSU	Fiscal 2021- ADS-RSU	Fiscal 2020- Equity Shares-RSU	Fiscal 2020- ADS-RSU
Weighted average share price () / ($ ADS)	674	8.93	728	10.52
Exercise price ()/ ($ ADS)	5.00	0.07	5.00	0.07
Expected volatility (%)	29-42	29-42	22-30	22-26
Expected life of the option (years)	1-4	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3	2-3
Risk-free interest rate (%)	4-5	0.2-0.3	6-7	1-3
Weighted average fair value as on grant date () / ($ ADS)	563	8.23	607	7.84

The expected life of the RSU/ESOP is estimated based on the vesting term and contractual term of the RSU/ESOP, as well as expected exercise behavior of the employee who receives the RSU/ESOP.

2.12 INCOME TAXES

Accounting policy

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the Consolidated Statement of Comprehensive income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future.

The Group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to securities premium.

Income tax expense in the consolidated statement of comprehensive income comprises:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Current taxes
Domestic taxes	1,367	1,063	2,485	2,163
Foreign taxes	396	425	599	784
	1,763	1,488	3,084	2,947
Deferred taxes
Domestic taxes	174	33	355	30
Foreign taxes	(45)	(62)	(27)	(153)
	129	(29)	328	(123)
Income tax expense	1,892	1,459	3,412	2,824

Income tax expense for the three months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of 99 crore and 76 crore respectively. Income tax expense for the six months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of 230 crore and 119 crore respectively. These reversals pertains to prior periods on account of adjudication of certain disputed matters in favor of the Company and upon filing of return across various jurisdictions.

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Profit before income taxes	6,750	5,496	12,543	10,663
Enacted tax rates in India	34.94%	34.94%	34.94%	34.94%
Computed expected tax expense	2,359	1,920	4,383	3,726
Tax effect due to non-taxable income for Indian tax purposes	(622)	(604)	(1,169)	(1,176)
Overseas taxes	192	219	364	409
Tax provision (reversals)	(99)	(76)	(230)	(119)
Effect of exempt non-operating income	(9)	(10)	(18)	(21)
Effect of unrecognized deferred tax assets	9	29	26	46
Effect of differential tax rates	(46)	(10)	(74)	(19)
Effect of non-deductible expenses	27	24	65	45
Branch profit tax (net of credits)	(9)	(28)	(17)	(57)
Others	90	(5)	82	(10)
Income tax expense	1,892	1,459	3,412	2,824

The applicable Indian corporate statutory tax rate for the three months and six months ended September 30, 2020 and September 30, 2019 is 34.94% each.

Deferred income tax for the three months and six months ended September 30, 2020 and September 30, 2019 substantially relates to origination and reversal of temporary differences.

As at September 30, 2020, claims against the Group not acknowledged as debts from the Indian Income tax authorities amounted to 3,360 crore. Amount paid to statutory authorities against this amounted to 6,018 crore.

As at March 31, 2020, claims against the Group not acknowledged as debts from the Indian Income tax authorities amounted to 3,353 crore. Amount paid to statutory authorities against the above tax claims amounted to 5,352 crore.

The claims against the group majorly represent demands arising on completion of assessment proceedings under the Income Tax Act, 1961. These claims are on account of multiple issues of disallowances such as disallowance of profits earned from STP Units and SEZ Units, disallowance of deductions in respect of employment of new employees under section 80JJAA, disallowance of expenditure towards software being held as capital in nature, payments made to Associated Enterprises held as liable for withholding of taxes.

These matters are pending before various Appellate Authorities and the management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Group's financial position and results of operations.

2.13 Reconciliation of basic and diluted shares used in computing earnings per share

Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

2.14 Related party transactions

Refer Note 2.14 "Related party transactions" in the Company’s 2020 Consolidated financial statements under IFRS in indian rupee for the full names and other details of the Company's subsidiaries and controlled trusts.

Changes in Subsidiaries

During the six months ended September 30, 2020, the following are the changes in the subsidiaries:

- On June 1, 2020, Fluido Oy, acquired 100% of the voting interests in Simplus U.K. Ltd and Simplus Ireland Ltd from Simplus Europe Ltd

- Brilliant Basics (MENA) DMCC, a wholly-owned subsidiary of Brilliant Basics Holdings Limited, has been liquidated effective July 17, 2020.

- Infosys Limited Bulgaria EOOD, a wholly-owned subsidiary of Infosys Ltd, was incorporated on September 11, 2020.

Change in key management personnel

The following are the changes in the key management personnel:

- D.N. Prahlad (resigned as a member of the Board effective April 20, 2020)

- Uri Levine (appointed as an independent director effective April 20, 2020)

- Bobby Parikh appointed as independent director of the Company effective July 15, 2020.

Transactions with key management personnel

The table below describes the compensation to key management personnel which comprise directors and executive officers:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Salaries and other employee benefits to whole-time directors and executive officers(1)(2)	38	28	71	60
Commission and other benefits to non-executive/ independent directors	2	2	3	4
Total	40	30	74	64

⁽¹⁾ For the three months ended September 30, 2020 and September 30, 2019, includes a charge of 19 crore and 13 crore respectively, towards employee stock compensation expense. For the six months ended September 30, 2020 and September 30, 2019, includes a charge of 36 crore and 31 crore respectively, towards employee stock compensation expense.(Refer note 2.11).

⁽²⁾ Does not include post-employment benefit based on actuarial valuation as this is done for the Company as a whole.

2.15 Segment reporting

IFRS 8 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Group's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. The Chief Operating Decision Maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented along business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the accounting policies.

Business segments of the Group are primarily enterprises in Financial Services and Insurance, enterprises in Manufacturing, enterprises in Retail, Consumer Packaged Goods and Logistics, enterprises in the Energy, Utilities, Resources and Services, enterprises in Communication, Telecom OEM and Media, enterprises in Hi-Tech, enterprises in Life Sciences and Healthcare and all other segments. The Financial services reportable segments has been aggregated to include the Financial Services operating segment and Finacle operating segment because of the similarity of the economic characteristics. All other segments represents the operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services.

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Revenue for 'all other segments' represents revenue generated by Infosys Public services and revenue generated from customers located in India, Japan and China and other enterprises in Public services. Allocated expenses of segments include expenses incurred for rendering services from the Group's offshore software development centers and on-site expenses, which are categorized in relation to the associated efforts of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably. The management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and adjusted against the total income of the Group.

Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Business segment revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

Disclosure of revenue by geographic locations is given in note 2.16 Revenue from operations.

2.15.1 Business segments

Three months ended September 30, 2020 and September 30, 2019

(In crore)

Particulars	Financial Services(1)	Retail(2)	Communication(3)	Energy, Utilities, Resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	All other segments(5)	Total
Revenue	7,871	3,651	3,093	3,027	2,241	2,244	1,672	771	24,570
	7,213	3,448	2,961	2,962	2,291	1,713	1,454	587	22,629
Identifiable operating expenses	4,055	1,733	1,828	1,553	1,153	1,260	827	512	12,921
	3,718	1,722	1,756	1,564	1,264	1,015	770	355	12,164
Allocated expenses	1,456	618	602	649	433	315	280	213	4,566
	1,629	688	582	580	518	306	292	225	4,820
Segment operating income	2,360	1,300	663	825	655	669	565	46	7,083
	1,866	1,038	623	818	509	392	392	7	5,645
Unallocable expenses									855
									733
Operating profit									6,228
									4,912
Other income, net (Refer to note 2.18)									570
									626
Finance Cost									48
									42
Profit before income taxes									6,750
									5,496
Income tax expense									1,892
									1,459
Net profit									4,858
									4,037
Depreciation and amortization expense									855
									727
Non-cash expenses other than depreciation and amortization									–
									6

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

Six months ended September 30, 2020 and September 30, 2019

(In crore)

Particulars	Financial Services(1)	Retail(2)	Communication(3)	Energy, Utilities, Resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	All other segments(5)	Total
Revenues	15,328	7,043	6,257	6,054	4,497	4,307	3,246	1,502	48,234
	14,069	6,883	5,964	5,796	4,390	3,392	2,795	1,143	44,432
Identifiable operating expenses	7,959	3,326	3,730	3,106	2,436	2,388	1,626	979	25,550
	7,400	3,463	3,544	3,068	2,456	2,038	1,551	685	24,205
Allocated expenses	3,008	1,368	1,243	1,272	901	651	581	456	9,480
	3,090	1,350	1,175	1,186	1,012	592	574	446	9,425
Segment operating income	4,361	2,349	1,284	1,676	1,160	1,268	1,039	67	13,204
	3,579	2,070	1,245	1,542	922	762	670	12	10,802
Unallocable expenses									1,611
									1,419
Operating profit									11,593
									9,383
Other income, net (Refer to note 2.18)									1,046
									1,362
Finance Cost									96
									82
Profit before income taxes									12,543
									10,663
Income tax expense									3,412
									2,824
Net profit									9,131
									7,839
Depreciation and amortization expense									1,611
									1,408
Non-cash expenses other than depreciation and amortization									–
									11

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

2.15.2 Significant clients

No client individually accounted for more than 10% of the revenues for the three months and six months ended September 30, 2020 and September 30, 2019, respectively.

2.16 Revenue from Operations

Accounting Policy:

The Group derives revenues primarily from IT services comprising software development and related services, maintenance, consulting and package implementation, licensing of software products and platforms across the Group’s core and digital offerings (together called as “software related services”) and business process management services. Contracts with customers are either on a time-and-material, unit of work, fixed-price or on a fixed-timeframe basis.

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties, in writing, to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services (“performance obligations”) to customers in an amount that reflects the consideration the Group has received or expects to receive in exchange for these products or services (“transaction price”). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Group allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Group estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services.

The Group’s contracts may include variable consideration including rebates, volume discounts and penalties. The Group includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Revenue on time-and-material and unit of work based contracts, are recognized as the related services are performed. Fixed price maintenance revenue is recognized ratably either on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period or ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Group’s costs to fulfil the contract is not even through the period of contract because the services are generally discrete in nature and not repetitive. Revenue from other fixed-price, fixed-timeframe contracts, where the performance obligations are satisfied over time is recognized using the percentage-of-completion method. Efforts or costs expended have been used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the term of the contracts and are recognized in net profit in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

The billing schedules agreed with customers include periodic performance based billing and / or milestone based progress billings. Revenues in excess of billing are classified as unbilled revenue while billing in excess of revenues are classified as contract liabilities (which we refer to as unearned revenues).

In arrangements for software development and related services and maintenance services, by applying the revenue recognition criteria for each distinct performance obligation, the arrangements with customers generally meet the criteria for considering software development and related services as distinct performance obligations. For allocating the transaction price, the Group measures the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Group is unable to determine the standalone selling price, the Group uses the expected cost plus margin approach in estimating the standalone selling price. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses.

Revenue from licenses where the customer obtains a “right to use” the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period.

Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS).When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two distinct separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for implementation, the Group uses the expected cost plus margin approach in estimating the standalone selling price. Where the license is required to be substantially customized as part of the implementation service the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognized using the percentage-of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the performance obligations are satisfied. ATS revenue is recognized ratably on a straight line basis over the period in which the services are rendered.

Contracts with customers includes subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the Group is acting as an agent between the customer and the vendor, and gross when the Group is the principal for the transaction. In doing so, the group first evaluates whether it controls the good or service before it is transferred to the customer. The Group considers whether it has the primary obligation to fulfil the contract, inventory risk, pricing discretion and other factors to determine whether it controls the goods or service and therefore is acting as a principal or an agent.

The incremental costs of obtaining a contract (i.e., costs that would not have been incurred if the contract had not been obtained) are recognized as an asset if the Group expects to recover them. Any capitalized contract costs are amortized, with the expense recognised as the Group transfers the related goods or services to the customer.

The Group presents revenues net of indirect taxes in its consolidated statement of comprehensive income.

Revenues for the three months and six months ended September 30, 2020 and September 30, 2019 is as follows:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Revenue from software services	22,728	21,177	44,747	41,747
Revenue from products and platforms	1,842	1,452	3,487	2,685
Total revenue from operations	24,570	22,629	48,234	44,432

The Group has evaluated the impact of COVID – 19 resulting from (i) the possibility of constraints to render services which may require revision of estimations of costs to complete the contract because of additional efforts;(ii) onerous obligations;(iii) penalties relating to breaches of service level agreements, and (iv) termination or deferment of contracts by customers. The Group has concluded that the impact of COVID – 19 is not material based on these estimates. Due to the nature of the pandemic, the Group continues to monitor developments to identify significant uncertainties relating to revenue in future periods.

Disaggregated revenue information

The table below presents disaggregated revenues from contracts with customers by geography and offerings for each of our business segments. The group believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

Three months ended September 30, 2020 and September 30, 2019

(In crore)

Particulars	Financial Services (1)	Retail(2)	Communication (3)	Energy, Utilities, Resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	Others (5)	Total
Revenues by Geography*
North America	4,547	2,403	1,618	1,710	1,178	2,126	1,141	193	14,916
	4,151	2,245	1,858	1,644	1,305	1,617	943	126	13,889
Europe	1,622	1,033	699	1,043	998	39	493	52	5,979
	1,569	992	439	1,036	875	44	473	36	5,464
India	394	12	74	4	12	65	5	174	740
	340	13	51	1	23	46	13	120	607
Rest of the world	1,308	203	702	270	53	14	33	352	2,935
	1,153	198	613	281	88	6	25	305	2,669
Total	7,871	3,651	3,093	3,027	2,241	2,244	1,672	771	24,570
	7,213	3,448	2,961	2,962	2,291	1,713	1,454	587	22,629
Revenue by offerings
Digital	3,717	1,885	1,512	1,437	997	1,111	692	273	11,624
	2,828	1,475	1,173	1,113	853	623	449	164	8,678
Core	4,154	1,766	1,581	1,590	1,244	1,133	980	498	12,946
	4,385	1,973	1,788	1,849	1,438	1,090	1,005	423	13,951
Total	7,871	3,651	3,093	3,027	2,241	2,244	1,672	771	24,570
	7,213	3,448	2,961	2,962	2,291	1,713	1,454	587	22,629

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

  ^* Geographical revenues is based on the domicile of customer.

Six months ended September 30, 2020 and September 30, 2019

(In crore)

Particulars	Financial Services (1)	Retail(2)	Communication (3)	Energy, Utilities, Resources and Services	Manufacturing	Hi Tech	Life Sciences(4)	Others (5)	Total
Revenues by Geography*
North America	8,921	4,579	3,433	3,422	2,476	4,071	2,189	365	29,456
	8,184	4,468	3,739	3,207	2,481	3,212	1,783	239	27,313
Europe	3,158	2,051	1,328	2,079	1,883	70	988	107	11,664
	2,907	1,981	888	2,030	1,697	85	947	73	10,608
India	762	22	130	8	27	137	12	325	1,423
	638	25	81	2	42	83	18	223	1,112
Rest of the world	2,487	391	1,366	545	111	29	57	705	5,691
	2,340	409	1,256	557	170	12	47	608	5,399
Total	15,328	7,043	6,257	6,054	4,497	4,307	3,246	1,502	48,234
	14,069	6,883	5,964	5,796	4,390	3,392	2,795	1,143	44,432
Revenue by offerings
Digital	7,143	3,499	3,007	2,757	2,026	1,978	1,257	489	22,156
	5,333	2,897	2,244	2,085	1,617	1,206	813	272	16,467
Core	8,185	3,544	3,250	3,297	2,471	2,329	1,989	1,013	26,078
	8,736	3,986	3,720	3,711	2,773	2,186	1,982	871	27,965
Total	15,328	7,043	6,257	6,054	4,497	4,307	3,246	1,502	48,234
	14,069	6,883	5,964	5,796	4,390	3,392	2,795	1,143	44,432

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

  ^* Geographical revenues is based on the domicile of customer.

Digital Services

Digital Services comprise of service and solution offerings of the Group that enable our clients to transform their businesses. These include offerings that enhance customer experience, leverage AI-based analytics and big data, engineer digital products and IoT, modernize legacy technology systems, migrate to cloud applications and implement advanced cyber security systems.

Core Services

Core Services comprise traditional offerings of the Group that have scaled and industrialized over a number of years. These primarily include application management services, proprietary application development services, independent validation solutions, product engineering and management, infrastructure management services, traditional enterprise application implementation, support and integration services.

Products & platforms

The Group also derives revenues from the sale of products and platforms including Finacle – core banking solution, Edge Suite of products, Infosys Nia - Artificial Intelligence (AI) platform which applies next-generation AI and machine learning, Panaya platform, Skava platform, Stater digital platform and Infosys McCamish- insurance platform.

Trade Receivables and Contract Balances

The timing of revenue recognition, billings and cash collections results in Receivables, Unbilled Revenue, and Unearned Revenue on the Group’s Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon achievement of contractual milestones.

The Group’s Receivables are rights to consideration that are unconditional. Unbilled revenues comprising revenues in excess of billings from time and material contracts and fixed price maintenance contracts are classified as financial asset when the right to consideration is unconditional and is due only after a passage of time.

Invoicing to the clients for other fixed price contracts is based on milestones as defined in the contract and therefore the timing of revenue recognition is different from the timing of invoicing to the customers. Therefore unbilled revenues for other fixed price contracts (contract asset) are classified as non-financial asset because the right to consideration is dependent on completion of contractual milestones.

Invoicing in excess of earnings are classified as unearned revenue.

Trade receivables and unbilled revenues are presented net of impairment in the consolidated Balance Sheet.

2.17 Unbilled Revenue

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Unbilled financial asset (1)	3,233	2,796
Unbilled non financial asset (2)	4,363	4,325
Total	7,596	7,121

⁽¹⁾ Right to consideration is unconditional and is due only after a passage of time.

⁽²⁾ Right to consideration is dependent on completion of contractual milestones.

2.18 Break-up of expenses and other income, net

a. Accounting policy

Gratuity

The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees of Infosys and its Indian subsidiaries. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Group.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). In case of Infosys BPM and EdgeVerve, contributions are made to the Infosys BPM Employees' Gratuity Fund Trust and EdgeVerve Systems Limited Employees' Gratuity Fund Trust, respectively. Trustees administer contributions made to the Trusts and contributions are invested in a scheme with the Life Insurance Corporation of India as permitted by Indian law.

The Group recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments is recognized in the Consolidated Statement of Comprehensive income.

Provident fund

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the Infosys Limited Employees' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

In respect of Indian subsidiaries, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the respective companies make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The Companies have no further obligation to the plan beyond its monthly contributions.

Superannuation

Certain employees of Infosys, Infosys BPM and EdgeVerve are participants in a defined contribution plan. The Group has no further obligations to the plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

Compensated absences

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

Other income, net

Other income is comprised primarily of interest income, dividend income, gain/loss on investment and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

Foreign currency

Functional currency

The functional currency of Infosys, Infosys BPM, controlled trusts, EdgeVerve and Skava is the Indian rupee. The functional currencies for other subsidiaries are their respective local currencies. These financial statements are presented in Indian rupees (rounded off to crore; one crore equals ten million).

Transactions and translations

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are recognized in the Consolidated Statement of Comprehensive Income and reported within exchange gains/ (losses) on translation of assets and liabilities, net, except when deferred in Other Comprehensive Income as qualifying cash flow hedges. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction. The related revenue and expense are recognised using the same exchange rate.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

The translation of financial statements of the foreign subsidiaries to the presentation currency is performed for assets and liabilities using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using the average exchange rate for the respective periods. The gains or losses resulting from such translation are included in currency translation reserves under other components of equity. When a subsidiary is disposed off, in full, the relevant amount is transferred to net profit in the statement of comprehensive income. However when a change in the parent's ownership does not result in loss of control of a subsidiary, such changes are recorded through equity.

Other Comprehensive Income, net of taxes includes translation differences on non-monetary financial assets measured at fair value at the reporting date, such as equities classified as financial instruments and measured at fair value through other comprehensive income (FVOCI).

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the Balance Sheet date.

Government grants

The Group recognizes government grants only when there is reasonable assurance that the conditions attached to them will be complied with, and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in the net profit in the statement of comprehensive income on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in the statement of comprehensive income over the periods necessary to match them with the related costs which they are intended to compensate.

Operating Profits

Operating profit of the Group is computed considering the revenues, net of cost of sales, selling and marketing expenses and administrative expenses.

b. The table below provides details of break-up of expenses:

Cost of sales

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Employee benefit costs	11,902	11,335	23,965	22,331
Depreciation and amortization	855	727	1,611	1,408
Travelling costs	130	441	226	1,092
Cost of technical sub-contractors	1,634	1,651	3,260	3,291
Cost of software packages for own use	298	259	581	486
Third party items bought for service delivery to clients	799	414	1,401	798
Short-term leases	6	21	17	38
Consultancy and professional charges	10	13	20	23
Communication costs	82	74	169	146
Repairs and maintenance	137	124	268	226
Provision for post-sales client support	(7)	19	(1)	10
Others	(75)	1	(44)	9
Total	15,771	15,079	31,473	29,858

Selling and marketing expenses

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Employee benefit costs	994	903	2,036	1,779
Travelling costs	4	89	11	193
Branding and marketing	92	120	150	256
Short-term leases	1	1	2	4
Communication costs	3	4	7	8
Consultancy and professional charges	21	34	35	74
Others	21	11	42	22
Total	1,136	1,162	2,283	2,336

Administrative expenses

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Employee benefit costs	504	437	1,003	866
Consultancy and professional charges	255	290	493	534
Repairs and maintenance	213	281	449	554
Power and fuel	37	61	71	121
Communication costs	77	51	148	103
Travelling costs	17	69	30	142
Impairment loss recognized/(reversed) under expected credit loss model	63	36	162	88
Rates and taxes	59	47	114	84
Insurance charges	35	21	65	40
Short-term leases	7	–	20	–
Commission to non-whole time directors	2	2	3	4
Contribution towards Corporate Social Responsibility	140	100	260	168
Others	26	81	67	151
Total	1,435	1,476	2,885	2,855

Other income consists of the following:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Interest income on financial assets carried at amortized cost	315	304	607	653
Interest income on financial assets carried at fair value through other comprehensive income	97	81	186	196
Dividend income on investments carried at fair value through profit or loss	10	1	11	1
Gain/(loss) on investments carried at fair value through profit or loss	9	37	33	102
Gain/(loss) on investments carried at fair value through other comprehensive income	27	11	54	27
Interest income on income tax refund	–	–	–	9
Exchange gains / (losses) on forward and options contracts	307	(43)	354	96
Exchange gains / (losses) on translation of other assets and liabilities	(262)	205	(294)	159
Others	67	30	95	119
Total	570	626	1,046	1,362

2.19 Equity

Accounting policy

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects.

Treasury Shares

When any entity within the Group purchases the company's ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from Securities premium.

Description of reserves

Retained earnings

Retained earnings represent the amount of accumulated earnings of the Group.

Share premium

The amount received in excess of the par value has been classified as share premium. Additionally, share-based compensation recognized in net profit in the consolidated statement of comprehensive income is credited to share premium.

Other Reserves

The Special Economic Zone Re-investment reserve has been created out of the profit of the eligible SEZ unit in terms of the provisions of Sec 10AA (1)(ii) of Income Tax Act, 1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in terms of the provisions of the Sec 10AA (2) of the Income Tax Act, 1961.

Capital Redemption Reserve

In accordance with section 69 of the Indian Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.

Other components of equity

Other components of equity consist of currency translation, remeasurement of net defined benefit liability / asset, equity instruments fair valued through other comprehensive income, changes on fair valuation of investments and changes in fair value of derivatives designated as cash flow hedges, net of taxes.

Cash flow hedge reserve

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the net profit in the consolidated Statement of Comprehensive Income upon the occurrence of the related forecasted transaction.

2.19.1 Dividend

The final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits.

The Company declares and pays dividends in Indian rupees. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay / distribute dividend after deducting applicable taxes. The remittance of dividends outside India is also subject to withholding tax at applicable rates.

Amount of per share dividend recognized as distribution to equity shareholders:-

(In )

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Final dividend for fiscal 2019	–	–	–	10.50
Final dividend for fiscal 2020	–	–	9.50	–

The Board of Directors in their meeting on April 20, 2020 recommended a final dividend of 9.50/- per equity share for the financial year ended March 31, 2020. The same was approved by the shareholders at the Annual General Meeting held on June 27, 2020 which resulted in a cash outflow of 4,029 crore, excluding dividend paid on treasury shares.

The Board of Directors in their meeting on October 14, 2020 declared a interim dividend of 12/- per equity share which would result in a net cash outflow of approximately 5,091 crore excluding dividend paid on treasury shares.

2.19.2 Capital allocation policy

Effective from fiscal 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As at September 30, 2020, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure there are no externally imposed capital requirements

2.19.3 Share capital and share premium

The Company has only one class of shares referred to as equity shares having a par value of 5/- each. 1,69,05,562 and 1,82,39,356 shares were held by controlled trust, as at September 30, 2020 and March 31, 2020, respectively.

for and on behalf of the Board of Directors of Infosys Limited

Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U. B. Pravin Rao Chief Operating Officer and Whole-time Director
D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A. G. S. Manikantha Company Secretary
Bengaluru October 14, 2020

EX-99.9 CUST CONTRCT

    Exhibit 99.9

Ind AS Standalone

INDEPENDENT AUDITOR’S REPORT

TO THE BOARD OF DIRECTORS OF INFOSYS LIMITED

Report on the Audit of the Interim Condensed Standalone Financial Statements

Opinion

We have audited the accompanying interim condensed standalone financial statements of INFOSYS LIMITED (the “Company”), which comprise the Condensed Balance Sheet as at September 30, 2020, the Condensed Statement of Profit and Loss (including Other Comprehensive Income) for three months and six months period ended on that date, the Condensed Statement of Changes in Equity and the Condensed Statement of Cash Flows for the six months period ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the “interim condensed standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid interim condensed standalone financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with Indian Accounting Standard 34 Interim Financial Reporting (“Ind AS 34’) prescribed under section 133 of the Act and other accounting principles generally accepted in India, of the state of affairs of the Company as at September 30, 2020, the profit and total comprehensive income for three months and six months period ended on that date, changes in equity and its cash flows for the six months period ended on that date.

Basis for Opinion

We conducted our audit of the interim condensed standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Interim Condensed Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the interim condensed standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the interim condensed standalone financial statements.

Management Responsibilities for the Interim Condensed Standalone Financial Statements

The Company’s Board of Directors is responsible for the preparation and presentation of these interim condensed standalone financial statements that give a true and fair view of the financial position, financial performance, including total comprehensive income, changes in equity and cash flows of the Company in accordance with Ind AS 34 and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the interim condensed standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the interim condensed standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Interim Condensed Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the interim condensed standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these interim condensed standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the interim condensed standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on effectiveness of the Company’s internal financial controls.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the interim condensed standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the interim condensed standalone financial statements, including the disclosures, and whether the interim condensed standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the interim condensed standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the interim condensed standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the interim condensed standalone financial statements.

We also communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Place: Mumbai Date: October 14, 2020 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)         Sanjiv V. Pilgaonkar Partner (Membership No.039826) (UDIN: 20039826AAAAGV4478)

INFOSYS LIMITED

Condensed Standalone Financial Statements under Indian Accounting Standards (Ind AS) for the three months and six months ended September 30, 2020

Index

Condensed Balance Sheet

Condensed Statement of Profit and Loss

Condensed Statement of Changes in Equity

Condensed Statement of Cash Flows

Overview and notes to the financial statements

1. Overview

1.1 Company overview

1.2 Basis of preparation of financial statements

1.3 Use of estimates and judgments

1.4 Critical accounting estimates

2. Notes to financial statements

2.1 Property, plant and equipment

2.2 Leases

2.3 Investments

2.4 Loans

2.5 Other financial assets

2.6 Trade Receivables

2.7 Cash and cash equivalents

2.8 Other assets

2.9 Financial instruments

2.10 Equity

2.11 Other financial liabilities

2.12 Trade payables

2.13 Other liabilities

2.14 Provisions

2.15 Income taxes

2.16 Revenue from operations.

2.17 Other income, net.

2.18 Expenses

2.19 Reconciliation of basic and diluted shares used in computing earning per share

2.20 Contingent liabilities and commitments

2.21 Related party transactions

2.22 Segment Reporting

INFOSYS LIMITED

(In ₹ crore)

Condensed Balance Sheet as at	Note No.	September 30, 2020	March 31, 2020
ASSETS
Non-current assets
Property, plant and equipment	2.1	11,011	11,092
Right-of-use assets	2.2	2,930	2,805
Capital work-in-progress		1,206	945
Goodwill		167	29
Other intangible assets		85	48
Financial assets
Investments	2.3	17,331	13,916
Loans	2.4	21	298
Other financial assets	2.5	541	613
Deferred tax assets (net)		1,061	1,429
Income tax assets (net)		4,772	4,773
Other non-current assets	2.8	1,116	1,273
Total non - current Assets		40,241	37,221
Current assets
Financial assets
Investments	2.3	2,982	4,006
Trade receivables	2.6	15,618	15,459
Cash and cash equivalents	2.7	16,247	13,562
Loans	2.4	283	307
Other financial assets	2.5	4,921	4,398
Other current assets	2.8	5,817	6,088
Total current assets		45,868	43,820
Total Assets		86,109	81,041
EQUITY AND LIABILITIES
Equity
Equity share capital	2.10	2,129	2,129
Other equity		64,714	60,105
Total equity		66,843	62,234
LIABILITIES
Non-current liabilities
Financial liabilities
Lease liabilities	2.2	2,927	2,775
Other financial liabilities	2.11	89	49
Deferred tax liabilities (net)		489	556
Other non-current liabilities	2.13	623	207
Total non - current liabilities		4,128	3,587
Current liabilities
Financial liabilities
Trade payables	2.12
Total outstanding dues of micro enterprises and small enterprises		–	–
Total outstanding dues of creditors other than micro enterprises and small enterprises		1,359	1,529
Lease liabilities	2.2	418	390
Other financial liabilities	2.11	7,397	7,936
Other current liabilities	2.13	3,977	3,557
Provisions	2.14	629	506
Income tax liabilities (net)		1,358	1,302
Total current liabilities		15,138	15,220
Total equity and liabilities		86,109	81,041

The accompanying notes form an integral part of the interim condensed standalone financial statements. As per our report of even date attached
for Deloitte Haskins & Sells LLP Chartered Accountants Firm's Registration Number 117366W/W-100018:	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED

(In ₹ crore except equity share and per equity share data) 

Condensed Statement of Profit and Loss for the	Note No.	Three months ended September 30,		Six months ended September 30,
		2020	2019	2020	2019
Revenue from operations	2.16	21,046	19,666	41,372	38,797
Other income, net	2.17	582	604	1,060	1,316
Total income		21,628	20,270	42,432	40,113
Expenses
Employee benefit expenses	2.18	11,053	10,604	22,275	20,985
Cost of technical sub-contractors		2,125	2,046	4,220	4,090
Travel expenses		136	482	228	1,182
Cost of software packages and others	2.18	548	410	1,029	773
Communication expenses		121	94	235	187
Consultancy and professional charges		225	253	418	486
Depreciation and amortization expense		608	542	1,154	1,052
Finance cost		31	28	62	55
Other expenses	2.18	618	688	1,269	1,360
Total expenses		15,465	15,147	30,890	30,170
Profit before tax		6,163	5,123	11,542	9,943
Tax expense:
Current tax	2.15	1,526	1,316	2,752	2,632
Deferred tax	2.15	140	(22)	285	(87)
Profit for the period		4,497	3,829	8,505	7,398
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		6	(18)	162	(35)
Equity instruments through other comprehensive income, net		(5)	2	(5)	2
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		27	17	21	(7)
Fair value changes on investments, net	2.3	(45)	1	4	16
Total other comprehensive income/ (loss), net of tax		(17)	2	182	(24)
Total comprehensive income for the period		4,480	3,831	8,687	7,374
Earnings per equity share
Equity shares of par value ₹5/- each
Basic (₹)		10.56	8.97	19.97	17.22
Diluted (₹)		10.55	8.96	19.96	17.21
Weighted average equity shares used in computing earnings per equity share
Basic	2.19	4,25,93,28,154	4,26,88,51,243	4,25,91,94,980	4,29,54,39,223
Diluted	2.19	4,26,19,11,389	4,27,13,30,367	4,26,16,77,462	4,29,79,21,834

The accompanying notes form an integral part of the interim condensed standalone financial statements. As per our report of even date attached
for Deloitte Haskins & Sells LLP Chartered Accountants Firm's Registration Number 117366W/W-100018:	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED

Condensed Statement of Changes in Equity

(In ₹ crore)

Particulars

Equity Share Capital

Other Equity

Total equity attributable to equity holders of the Company

Reserves & Surplus

Other comprehensive income

Securities Premium

Retained earnings

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve (1)

Capital reserve

Capital redemption reserve

Equity Instruments through other comprehensive income

Effective portion of Cash flow hedges

Other items of other comprehensive income / (loss)

Capital reserve

Other reserves(2)

Balance as at April 1, 2019

2,178

138

54,070

190

227

2,479

54

3,219

61

80

21

(6)

62,711

Impact on account of adoption of Ind AS 116

–

–

(17)

–

–

–

–

–

–

–

–

–

(17)

2,178

138

54,053

190

227

2,479

54

3,219

61

80

21

(6)

62,694

Changes in equity for the six months ended September 30, 2019

Profit for the period

–

–

7,398

–

–

–

–

–

–

–

–

–

7,398

Remeasurement of the net defined benefit liability/asset*

–

–

–

–

–

–

–

–

–

–

–

(35)

(35)

Equity instruments through other comprehensive income*

–

–

–

–

–

–

–

–

–

2

–

–

2

Fair value changes on derivatives designated as cash flow hedge*

–

–

–

–

–

–

–

–

–

–

(7)

–

(7)

Fair value changes on investments, net* (refer note no. 2.3)

–

–

–

–

–

–

–

–

–

–

–

16

16

Total comprehensive income for the period

–

–

7,398

–

–

–

–

–

–

2

(7)

(19)

7,374

Transfer to general reserve

–

–

(1,470)

1,470

–

–

–

–

–

–

–

–

–

Transferred to Special Economic Zone Re-investment reserve

–

–

(1,096)

–

–

1,096

–

–

–

–

–

–

–

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

593

–

–

(593)

–

–

–

–

–

–

–

Amount transferred to capital redemption reserve upon buyback

–

–

–

(50)

–

–

–

–

50

–

–

–

–

Exercise of stock options (refer note no. 2.10)

–

77

–

–

(77)

–

–

–

–

–

–

–

–

Share based payment to employees (refer note no. 2.10)

–

–

–

–

117

–

–

–

–

–

–

–

117

Income tax benefit arising on exercise of stock options

–

7

–

–

–

–

–

–

–

–

–

–

7

Buyback of equity shares

(49)

–

(4,717)

(1,494)

–

–

–

–

–

–

–

–

(6,260)

Transaction cost relating to buyback*

–

–

–

(11)

–

–

–

–

–

–

–

–

(11)

Dividends (including dividend distribution tax)

–

–

(5,446)

–

–

–

–

–

–

–

–

–

(5,446)

Balance as at September 30, 2019

2,129

222

49,315

105

267

2,982

54

3,219

111

82

14

(25)

58,475

INFOSYS LIMITED

Condensed Statement of Changes in Equity 

(In ₹ crore)

Particulars

Equity Share Capital

Other Equity

Total equity attributable to equity holders of the Company

Reserves & Surplus

Other comprehensive income

Securities Premium

Retained earnings

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve (1)

Capital reserve

Capital redemption reserve

Equity Instruments through other comprehensive income

Effective portion of Cash flow hedges

Other items of other comprehensive income / (loss)

Capital reserve

Other reserves(2)

Balance as at April 1, 2020

2,129

268

52,419

106

297

3,907

54

3,082

111

49

(15)

(173)

62,234

Changes in equity for the six months ended September 30, 2020

Profit for the period

–

–

8,505

–

–

–

–

–

–

–

–

–

8,505

Remeasurement of the net defined benefit liability/asset*

–

–

–

–

–

–

–

–

–

–

–

162

162

Equity instruments through other comprehensive income*

–

–

–

–

–

–

–

–

–

(5)

–

–

(5)

Fair value changes on derivatives designated as cash flow hedge*

–

–

–

–

–

–

–

–

–

–

21

–

21

Fair value changes on investments*

–

–

–

–

–

–

–

–

–

–

–

4

4

Total comprehensive income for the period

–

–

8,505

–

–

–

–

–

–

(5)

21

166

8,687

Transfer to general reserve

–

–

(1,554)

1,554

–

–

–

–

–

–

–

–

–

Transferred to Special Economic Zone Re-investment reserve

–

–

(1,412)

–

–

1,412

–

–

–

–

–

–

–

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

530

–

–

(530)

–

–

–

–

–

–

–

Exercise of stock options (refer note no.2.10)

–

100

–

–

(100)

–

–

–

–

–

–

–

–

Transfer on account of options not exercised

–

–

–

1

(1)

–

–

–

–

–

–

–

–

Shares issued on exercise of employee stock options (refer note no.2.10)

–

5

–

–

–

–

–

–

–

–

–

–

5

Employee stock compensation expense (refer to note no. 2.10)

–

–

–

–

134

–

–

–

–

–

–

–

134

Income tax benefit arising on exercise of stock options

–

5

–

–

–

–

–

–

–

–

–

–

5

Reserves recorded upon business transfer under common control (Refer note 2.3.1)

–

–

–

–

–

–

–

(176)

–

–

–

–

(176)

Dividends

–

–

(4,046)

–

–

–

–

–

–

–

–

–

(4,046)

Balance as at September 30, 2020

2,129

378

54,442

1,661

330

4,789

54

2,906

111

44

6

(7)

66,843

*net of tax

⁽¹⁾ The Special Economic Zone Re-investment Reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Sec 10AA(1)(ii) of Income Tax Act,1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of the Sec 10AA(2) of the Income Tax Act, 1961.

⁽²⁾ Profit / loss on transfer of business between entities under common control taken to reserve.

The accompanying notes form an integral part of the interim condensed standalone financial statements. As per our report of even date attached
for Deloitte Haskins & Sells LLP Chartered Accountants Firm's Registration Number 117366W/W-100018:	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED

Condensed Statement of Cash Flows

Accounting Policy

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.

(In ₹ crore)

Particulars	Note No.	Six months ended September 30,
		2020	2019
Cash flow from operating activities:
Profit for the period		8,505	7,398
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization	2.1 & 2.2	1,154	1,052
Income tax expense	2.15	3,037	2,545
Impairment loss recognized / (reversed) under expected credit loss model		123	53
Finance cost		62	55
Interest and dividend income		(734)	(837)
Stock compensation expense		154	107
Other adjustments		2	(66)
Exchange differences on translation of assets and liabilities		(20)	28
Changes in assets and liabilities
Trade receivables and unbilled revenue		(268)	(1,763)
Loans, other financial assets and other assets		457	478
Trade payables		(209)	(363)
Other financial liabilities, other liabilities and provisions		184	190
Cash generated from operations		12,447	8,877
Income taxes paid		(2,692)	(2,353)
Net cash generated by operating activities		9,755	6,524
Cash flow from investing activities:
Expenditure on property, plant and equipment		(1,105)	(1,770)
Deposits placed with corporations		(130)	(54)
Loans to employees		-	1
Loan given to subsidiaries		(76)	(1,201)
Loan repaid by subsidiaries		267	276
Proceeds from redemption of debentures		327	187
Investment in subsidiaries		(215)	–
Payment towards business transfer		(66)	–
Proceeds from return of investment		–	6
Payment of contingent consideration pertaining to acquisition		(122)	–
Redemption of escrow pertaining to buyback		–	257
Other receipts		25	23
Payments to acquire investments
Preference, equity securities and others		(1)	(41)
Liquid mutual fund units and fixed maturity plan securities		(10,499)	(15,980)
Tax free bonds and Government bonds		–	(12)
Non Convertible debentures		(746)	–
Government Securities		(4,664)	(1,561)
Proceeds on sale of investments
Liquid mutual fund units and fixed maturity plan securities		10,541	16,655
Tax free bonds and Government bonds		–	13
Non-convertible debentures		535	1,383
Certificates of deposit		900	1,625
Commercial paper		–	500
Government Securities		1,529	1,170
Interest and dividend received		673	836
Net cash (used in) / from investing activities		(2,827)	2,313
Cash flow from financing activities:
Payment of lease liabilities	2.2	(210)	(194)
Buyback of equity shares including transaction cost		–	(7,478)
Shares issued on exercise of employee stock options		5	–
Payment of dividends (including dividend distribution tax)		(4,048)	(5,443)
Net cash used in financing activities		(4,253)	(13,115)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		10	(40)
Net increase / (decrease) in cash and cash equivalents		2,675	(4,278)
Cash and cash equivalents at the beginning of the period	2.7	13,562	15,551
Cash and cash equivalents at the end of the period		16,247	11,233
Supplementary information:
Restricted cash balance	2.7	99	134

The accompanying notes form an integral part of the interim condensed standalone financial statements. As per our report of even date attached
for Deloitte Haskins & Sells LLP Chartered Accountants Firm's Registration Number 117366W/W-100018:	for and on behalf of the Board of Directors of Infosys Limited
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED

Notes to the Interim Condensed Standalone Financial Statements

1. Overview

1.1 Company overview

Infosys Limited ('the Company' or Infosys) provides consulting, technology, outsourcing and next-generation digital services, to enable clients to execute strategies for their digital transformation.

The Company is a public limited company incorporated and domiciled in India and has its registered office at Electronic city, Hosur Road, Bengaluru 560100, Karnataka, India. The company has its primary listings on the BSE Ltd. and National Stock Exchange of India Limited. The Company’s American Depositary Shares (ADS) representing equity shares are listed on the New York Stock Exchange (NYSE).

The interim condensed standalone financial statements are approved for issue by the Company's Board of Directors on October 14, 2020.

1.2 Basis of preparation of financial statements

These interim condensed standalone financial statements are prepared in accordance with Indian Accounting Standard 34 (Ind AS 34), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 ('the Act') and guidelines issued by the Securities and Exchange Board of India (SEBI). Accordingly, these interim condensed standalone financial statements do not include all the information required for a complete set of financial statements. These interim condensed standalone financial statements should be read in conjunction with the standalone financial statements and related notes included in the Company’s Annual Report for the year ended March 31, 2020. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the quarter and year figures are taken from the source and rounded to the nearest digits, the figures reported for the previous quarters might not always add up to the year figures reported in this statement.

1.3 Use of estimates and judgments

The preparation of the interim condensed standalone financial statements in conformity with Ind AS requires the management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the interim condensed financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note no. 1.4. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Estimation of uncertainties relating to the global health pandemic from COVID-19 (COVID-19):

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these interim condensed standalone financial statements including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company's financial statements may differ from that estimated as at the date of approval of these interim condensed standalone financial statements.

1.4 Critical accounting estimates and judgments

a. Revenue recognition

The Company’s contracts with customers include promises to transfer multiple products and services to a customer. Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgement.

Fixed price maintenance revenue is recognized ratably on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period. Revenue from fixed price maintenance contract is recognized ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Company’s costs to fulfil the contract is not even through the period of the contract because the services are generally discrete in nature and not repetitive. The use of method to recognize the maintenance revenues requires judgment and is based on the promises in the contract and nature of the deliverables.

The Company uses the percentage-of-completion method in accounting for other fixed-price contracts. Use of the percentage-of-completion method requires the Company to determine the actual efforts or costs expended to date as a proportion of the estimated total efforts or costs to be incurred. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

b. Income taxes

The Company's two major tax jurisdictions are India and the U.S., though the Company also files tax returns in other overseas jurisdictions.

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Also refer note no. 2.15 and note no. 2.20.

In assessing the realizability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

c. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company's assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. Refer note no. 2.1

d. Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Infosys’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the company has concluded that no material changes are required to lease period relating to the existing lease contracts. Refer note no 2.2

e. Allowance for credit losses on receivables and unbilled revenue

The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID-19.

2.1 PROPERTY, PLANT AND EQUIPMENT

Accounting Policy

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the management. The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

Building(1)	22-25 years
Plant and machinery(1)(2)	5 years
Office equipment	5 years
Computer equipment(1)	3-5 years
Furniture and fixtures(1)	5 years
Vehicles(1)	5 years
Leasehold improvements	Lower of useful life of the asset or lease term

⁽¹⁾ Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.

⁽²⁾ Includes Solar plant with a useful life of 20 years

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

Impairment

Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.

The changes in the carrying value of property, plant and equipment for the three months ended September 30, 2020 are as follows: 

(In ₹ crore)

Particulars	Land- Freehold	Buildings(1)(2)	Plant and machinery(2)	Office Equipment(2)	Computer equipment(2)	Furniture and fixtures(2)	Leasehold Improvements	Vehicles	Total
Gross carrying value as at July 1, 2020	1,385	9,077	3,050	1,103	5,989	1,885	663	43	23,195
Additions	1	11	12	17	280	6	78	–	405
Additions through Business transfer (Refer note 2.3.1)	–	–	–	–	6	–	2	–	8
Deletions	–	–	(1)	(1)	(27)	(3)	(3)	-	(35)
Gross carrying value as at September 30, 2020	1,386	9,088	3,061	1,119	6,248	1,888	740	43	23,573
Accumulated depreciation as at July 1, 2020	–	(3,200)	(2,124)	(814)	(4,362)	(1,296)	(272)	(28)	(12,096)
Depreciation	–	(86)	(70)	(28)	(229)	(52)	(34)	(1)	(500)
Accumulated depreciation on deletions	–	–	1	1	27	2	3	–	34
Accumulated depreciation as at September 30, 2020	–	(3,286)	(2,193)	(841)	(4,564)	(1,346)	(303)	(29)	(12,562)
Carrying value as at July 1, 2020	1,385	5,877	926	289	1,627	589	391	15	11,099
Carrying value as at September 30, 2020	1,386	5,802	868	278	1,684	542	437	14	11,011

The changes in the carrying value of property, plant and equipment for the three months ended September 30, 2019 are as follows:

(In ₹ crore)

Particulars		Buildings(1)(2)	Plant and machinery(2)	Office Equipment(2)	Computer equipment(2)	Furniture and fixtures(2)	Leasehold Improvements	Vehicles	Total
Gross carrying value as at July 1, 2019	1,305	8,234	2,700	966	5,218	1,572	487	39	20,521
Additions	7	239	179	52	204	145	126	2	954
Deletions	–	–	(1)	–	(68)	(2)	–	–	(71)
Gross carrying value as at September 30, 2019	1,312	8,473	2,878	1,018	5,354	1,715	613	41	21,404
Accumulated depreciation as at July 1, 2019	–	(2,872)	(1,832)	(699)	(3,771)	(1,087)	(176)	(22)	(10,459)
Depreciation	–	(80)	(75)	(31)	(188)	(54)	(22)	(2)	(452)
Accumulated depreciation on deletions	–	–	1	–	68	2	–	–	71
Accumulated depreciation as at September 30, 2019	–	(2,952)	(1,906)	(730)	(3,891)	(1,139)	(198)	(24)	(10,840)
Carrying value as at July 1, 2019	1,305	5,362	868	267	1,447	485	311	17	10,062
Carrying value as at September 30, 2019	1,312	5,521	972	288	1,463	576	415	17	10,564

The changes in the carrying value of property, plant and equipment for the six months ended September 30, 2020 are as follows:

(In ₹ crore)

Particulars	Land- Freehold	Buildings(1)(2)	Plant and machinery(2)	Office Equipment(2)	Computer equipment(2)	Furniture and fixtures(2)	Leasehold Improvements	Vehicles	Total
Gross carrying value as at April 1, 2020	1,316	9,038	3,038	1,094	5,690	1,875	669	43	22,763
Additions	70	50	26	28	585	17	80	–	856
Additions through Business transfer (Refer note 2.3.1)	–	–	–	–	6	–	2	–	8
Deletions	–	–	(3)	(3)	(33)	(4)	(11)	–	(54)
Gross carrying value as at September 30, 2020	1,386	9,088	3,061	1,119	6,248	1,888	740	43	23,573
Accumulated depreciation as at April 1, 2020	–	(3,114)	(2,053)	(787)	(4,197)	(1,246)	(248)	(26)	(11,671)
Depreciation	–	(172)	(142)	(57)	(400)	(103)	(66)	(3)	(943)
Accumulated depreciation on deletions	–	–	2	3	33	3	11	–	52
Accumulated depreciation as at September 30, 2020	–	(3,286)	(2,193)	(841)	(4,564)	(1,346)	(303)	(29)	(12,562)
Carrying value as at April 1, 2020	1,316	5,924	985	307	1,493	629	421	17	11,092
Carrying value as at September 30, 2020	1,386	5,802	868	278	1,684	542	437	14	11,011

The changes in the carrying value of property, plant and equipment for the six months ended September 30, 2019 are as follows:

Particulars	Land- Freehold	Land- Leasehold	Buildings(1)(2)	Plant and machinery(2)	Office Equipment(2)	Computer equipment(2)	Furniture and fixtures(2)	Leasehold Improvements	Vehicles	Total
Gross carrying value as at April 1, 2019	1,305	593	8,070	2,612	938	5,052	1,454	414	37	20,475
Additions	7	–	403	267	81	385	265	199	4	1,611
Reclassification on account of adoption of Ind AS 116 (Refer to note 2.2)	–	(593)	–	–	–	–	–	–	–	(593)
Deletions	–	–	–	(1)	(1)	(83)	(4)	–	–	(89)
Gross carrying value as at September 30, 2019	1,312	–	8,473	2,878	1,018	5,354	1,715	613	41	21,404
Accumulated depreciation as at April 1, 2019	–	(32)	(2,797)	(1,762)	(672)	(3,605)	(1,039)	(153)	(21)	(10,081)
Depreciation	–	–	(155)	(145)	(59)	(369)	(104)	(45)	(3)	(880)
Reclassification on account of adoption of Ind AS 116 (Refer to note 2.2)	–	32	–	–	–	–	–	–	–	32
Accumulated depreciation on deletions	–	–	–	1	1	83	4	–	–	89
Accumulated depreciation as at September 30, 2019	–	–	(2,952)	(1,906)	(730)	(3,891)	(1,139)	(198)	(24)	(10,840)
Carrying value as at April 1, 2019	1,305	561	5,273	850	266	1,447	415	261	16	10,394
Carrying value as at September 30, 2019	1,312	–	5,521	972	288	1,463	576	415	17	10,564

⁽¹⁾ Buildings include ₹250/- being the value of five shares of ₹50/- each in Mittal Towers Premises Co-operative Society Limited.

⁽²⁾ Includes certain assets provided on cancellable operating lease to subsidiaries.

The aggregate depreciation has been included under depreciation and amortization expense in the interim condensed statement of Profit and Loss.

2.2 LEASES

Accounting Policy

The Company as a lessee

The Company’s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option. Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2020:

(In ₹ crore)

Particulars	Category of ROU asset			Total
	Land	Buildings	Computers
Balance as at July 1, 2020	553	2,045	67	2,665
Additions*	7	356	2	365
Additions through Business transfer (Refer note 2.3.1)	–	8	–	8
Deletion	–	(11)	–	(11)
Depreciation	(1)	(93)	(3)	(97)
Balance as at September 30, 2020	559	2,305	66	2,930

* Net of lease incentives of ₹34 crore related to lease of buildings

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2019:

(In ₹ crore)

Particulars	Category of ROU asset			Total
	Land	Buildings	Computers
Balance as at July 1, 2019	560	1,837	–	2,397
Additions	–	290	26	316
Deletion	(3)	–	–	(3)
Depreciation	(1)	(80)	(1)	(82)
Balance as at September 30, 2019	556	2,047	25	2,628

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2020:

(In ₹ crore)

Particulars	Category of ROU asset			Total
	Land	Buildings	Computers
Balance as at April 1, 2020	554	2,209	42	2,805
Additions*	7	316	32	355
Additions through Business transfer (Refer note 2.3.1)	–	8	–	8
Deletion	–	(46)	–	(46)
Depreciation	(2)	(182)	(8)	(192)
Balance as at September 30, 2020	559	2,305	66	2,930

* Net of lease incentives of ₹83 crore related to lease of buildings

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2019:

(In ₹ crore)

Particulars	Category of ROU asset			Total
	Land	Buildings	Computers
Balance as at April 1, 2019	–	1,861	–	1,861
Reclassified on account of adoption of Ind AS 116 (refer to note 2.1)	561	–	–	561
Additions	–	341	26	367
Deletions	(3)	–	–	(3)
Depreciation	(2)	(155)	(1)	(158)
Balance as at September 30, 2019	556	2,047	25	2,628

The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense in the interim condensed statement of Profit and Loss.

The following is the break-up of current and non-current lease liabilities as at September 30, 2020 and March 31, 2020:

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current lease liabilities	418	390
Non-current lease liabilities	2,927	2,775
Total	3,345	3,165

2.3 INVESTMENTS 

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current investments
Equity instruments of subsidiaries	7,768	7,553
Debentures of subsidiary	832	1,159
Redeemable Preference shares of subsidiary	1,318	1,318
Preference securities and equity instruments	101	103
Others	31	30
Tax free bonds	1,824	1,825
Government bonds	13	13
Non-convertible debentures	1,589	1,251
Government Securities	3,855	664
Total non-current investments	17,331	13,916
Current investments
Liquid mutual fund units	2,437	2,019
Certificates of deposit	–	886
Fixed maturity plans securities	–	428
Non-convertible debentures	545	673
Total current investments	2,982	4,006
Total carrying value	20,313	17,922

(In ₹ crore, except as otherwise stated)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current investments
Unquoted
Investment carried at cost
Investments in equity instruments of subsidiaries
Infosys BPM Limited	660	660
3,38,23,444 (3,38,23,444) equity shares of ₹10/- each, fully paid up
Infosys Technologies (China) Co. Limited	333	333
Infosys Technologies, S. de R.L. de C.V., Mexico	65	65
17,49,99,990 (17,49,99,990) equity shares of MXN 1 par value, fully paid up
Infosys Technologies (Sweden) AB	76	76
1,000 (1,000) equity shares of SEK 100 par value, fully paid
Infosys Technologies (Shanghai) Company Limited	900	900
Infosys Public Services, Inc.	99	99
3,50,00,000 (3,50,00,000) shares of USD 0.50 par value, fully paid
Infosys Consulting Holding AG	1,323	1,323
23,350 (23,350) - Class A shares of CHF 1,000 each and
26,460 (26,460) - Class B Shares of CHF 100 each, fully paid up
Infosys Americas Inc.	1	1
10,000 (10,000) shares of USD 10 per share, fully paid up
EdgeVerve Systems Limited	1,312	1,312
1,31,18,40,000 (1,31,18,40,000) equity shares of ₹10/- each, fully paid up
Infosys Nova Holdings LLC (1)	1,373	1,335
Infosys Consulting Pte Ltd	10	10
1,09,90,000 (1,09,90,000) shares of SGD 1.00 par value, fully paid
Brilliant Basics Holding Limited	59	59
1,346 (1,346) shares of GBP 0.005 each, fully paid up
Infosys Arabia Limited	2	2
70 (70) shares
Kallidus Inc.	150	150
10,21,35,416 (10,21,35,416) shares
Skava Systems Private Limited	59	59
25,000 (25,000) shares of ₹10/- each, fully paid up
Panaya Inc.	582	582
2 (2) shares of USD 0.01 per share, fully paid up
Infosys Chile SpA	7	7
100 (100) shares
WongDoody Holding Company Inc	380	359
2,000 (2,000) shares
Infosys Luxembourg S.a r.l.	4	4
5,000 (3,700) shares
Infosys Austria GmBH ( formerly known as Lodestone Management Consultants GmbH)	–	–
80,000 (80,000) shares of EUR 1 par value, fully paid up
Infosys Consulting Brazil	337	183
27,50,71,070 (16,49,15,570) shares of BRL 1 per share, fully paid up
Infosys Romania	34	34
99,183 (99,183) shares of RON 100 per share, fully paid up
Infosys Bulgaria	2	–
4,58,000 (Nil) shares of BGN 1 per share, fully paid up
Investment in Redeemable Preference shares of subsidiary
Infosys Consulting Pte Ltd	1,318	1,318
24,92,00,000 (24,92,00,000) shares of SGD 1 per share, fully paid up
	9,086	8,871
Investment carried at amortized cost
Investment in debentures of subsidiary
EdgeVerve Systems Limited
8,32,00,000 (11,59,00,000) Unsecured redeemable, non-convertible debentures of ₹ 100/- each fully paid up	832	1,159
	832	1,159
Investments carried at fair value through profit or loss
Others (2)	31	30
	31	30
Investment carried at fair value through other comprehensive income
Preference securities	100	101
Equity instruments	1	2
	101	103
Quoted
Investments carried at amortized cost
Tax free bonds	1,824	1,825
Government bonds	13	13
	1,837	1,838
Investments carried at fair value through other comprehensive income
Non-convertible debentures	1,589	1,251
Government Securities	3,855	664
	5,444	1,915
Total non-current investments	17,331	13,916
Current investments
Unquoted
Investments carried at fair value through profit or loss
Liquid mutual fund units	2,437	2,019
	2,437	2,019
Investments carried at fair value through other comprehensive income
Certificates of deposit	–	886
	–	886
Quoted
Investments carried at fair value through profit or loss
Fixed maturity plans securities	–	428
	–	428
Investments carried at fair value through other comprehensive income
Non-convertible debentures	545	673
	545	673
Total current investments	2,982	4,006
Total investments	20,313	17,922
Aggregate amount of quoted investments	7,826	4,854
Market value of quoted investments (including interest accrued), current	543	1,101
Market value of quoted investments (including interest accrued), non current	7,879	4,048
Aggregate amount of unquoted investments	12,487	13,068
(1) Aggregate amount of impairment in value of investments	121	121
Reduction in the fair value of assets held for sale	854	854
Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held for Sale"	469	469
Investments carried at cost	9,086	8,871
Investments carried at amortized cost	2,669	2,997
Investments carried at fair value through other comprehensive income	6,090	3,577
Investments carried at fair value through profit or loss	2,468	2,477

⁽²⁾ Uncalled capital commitments outstanding as of September 30, 2020 and March 31, 2020 was ₹14 crore and ₹15 crore, respectively.

Refer note no. 2.9 for accounting policies on financial instruments.

Method of fair valuation: 

(In ₹ crore)

Class of investment	Method	Fair value as at
		September 30, 2020	March 31, 2020
Liquid mutual fund units	Quoted price	2,437	2,019
Fixed maturity plan securities	Market observable inputs	–	428
Tax free bonds and government bonds	Quoted price and market observable inputs	2,223	2,135
Non-convertible debentures	Quoted price and market observable inputs	2,134	1,924
Government Securities	Quoted price	3,855	664
Certificate of deposits	Market observable inputs	–	886
Unquoted equity and preference securities	Discounted cash flows method, Market multiples method, Option pricing model	101	103
Others	Discounted cash flows method, Market multiples method, Option pricing model	31	30

Note : Certain quoted investments are classified as Level 2 in the absence of active market for such investments.

2.3.1 Business transfer- Kallidus Inc. and Skava Systems Private Limited

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently in August 15, 2020, the company entered into a business transfer agreements to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of ₹171 crore and ₹66 crore respectively.The transaction was between a holding company and a wholly owned subsidiary, the resultant impact on account of business transfer was recorded in 'Business Transfer Adjustment Reserve' during the three months ended September 30, 2020. The table below details out the assets and liabilities taken over upon business transfer:

(In ₹ crore)

Particulars	Kallidus Inc.	Skava Systems Private Limited	Total
Goodwill	89	49	138
Intangible assets	54	–	54
Deferred tax assets/ (liabilities)	(14)	1	(13)
Net assets / (liabilities), others	(152)	34	(118)
Total	(23)	84	61
Less: Consideration payable	171	66	237
Business transfer reserve	(194)	18	(176)

2.4 LOANS

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non- Current
Loan receivables considered good - Unsecured
Loans to subsidiaries	–	277
Other Loans
Loans to employees	21	21
	21	298
Unsecured, considered doubtful
Other Loans
Loans to employees	20	24
	41	322
Less: Allowance for doubtful loans to employees	20	24
Total non - current loans	21	298
Current
Loan receivables considered good - Unsecured
Loans to subsidiaries	178	103
Other Loans
Loans to employees	105	204
Total current loans	283	307
Total Loans	304	605

2.5 OTHER FINANCIAL ASSETS

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current
Security deposits (1)	46	46
Net investment in Sublease of right of use asset (1)	334	398
Rental deposits (1)	161	169
Total non-current other financial assets	541	613
Current
Security deposits (1)	1	1
Rental deposits (1)	13	4
Restricted deposits (1)*	1,773	1,643
Unbilled revenues (1)(5)#	2,039	1,973
Interest accrued but not due (1)	494	441
Foreign currency forward and options contracts (2)(3)	242	19
Net investment in Sublease of right of use asset (1)	72	35
Others (1)(4)	287	282
Total current other financial assets	4,921	4,398
Total other financial assets	5,462	5,011
(1) Financial assets carried at amortized cost	5,220	4,992
(2)Financial assets carried at fair value through other comprehensive income	18	9
(3)Financial assets carried at fair value through Profit or Loss	224	10
(4) Includes dues from subsidiaries	39	65
(5) Includes dues from subsidiaries	55	84

* Restricted deposits represent deposit with financial institutions to settle employee related obligations as and when they arise during the normal course of business.

^# Classified as financial asset as right to consideration is unconditional and is due only after a passage of time.

2.6 TRADE RECEIVABLES

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Unsecured
Considered good(2)	15,618	15,459
Considered doubtful	562	491
	16,180	15,950
Less: Allowances for credit losses	562	491
Total trade receivables(1)	15,618	15,459
(1) Includes dues from companies where directors are interested	–	–
(2) Includes dues from subsidiaries	323	408

2.7 CASH AND CASH EQUIVALENTS

 (In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Balances with banks
In current and deposit accounts	11,583	8,048
Cash on hand	–	–
Others
Deposits with financial institutions	4,664	5,514
Total Cash and cash equivalents	16,247	13,562
Balances with banks in unpaid dividend accounts	28	30
Deposit with more than 12 months maturity	6,371	6,171
Balances with banks held as margin money deposits against guarantees	71	71

Cash and cash equivalents as at September 30, 2020 and March 31, 2020 include restricted cash and bank balances of ₹99 crore and ₹101 crore, respectively. The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

The deposits maintained by the Company with banks and financial institutions comprise of time deposits, which can be withdrawn by the Company at any point without prior notice or penalty on the principal.

2.8 OTHER ASSETS

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current
Capital advances	243	310
Advances other than capital advance
Others
Prepaid expenses	37	51
Prepaid gratuity	65	143
Deferred contract cost	9	10
Other receivables	2	–
Withholding taxes and others	760	759
Total non-current other assets	1,116	1,273
Current
Advances other than capital advance
Payment to vendors for supply of goods	32	129
Others
Prepaid expenses (1)	717	736
Unbilled revenues(2)	3,842	3,856
Deferred contract cost	12	11
Withholding taxes and others	1,203	1,356
Other receivables	11	–
Total current other assets	5,817	6,088
Total other assets	6,933	7,361
(1) Includes dues from subsidiaries	211	168
(2) Classified as non financial asset as the contractual right to consideration is dependent on completion of contractual milestones.

Withholding taxes and others primarily consist of input tax credits and Cenvat recoverable from Government of India. As at September 30, 2020 Cenvat recoverable includes ₹355 crore which are pending adjudication. The Company expects these amounts to be sustainable on adjudication and recoverable on final resolution.

2.9 FINANCIAL INSTRUMENTS

Accounting Policy

2.9.1 Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

2.9.2 Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

(v) Investment in subsidiaries

Investment in subsidiaries is carried at cost in the separate financial statements.

b. Derivative financial instruments

The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

(i) Financial assets or financial liabilities, at fair value through profit or loss.

This category includes derivative financial assets or liabilities which are not designated as hedges.

Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated as hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the Statement of Profit and Loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the Balance Sheet date.

(ii) Cash flow hedge

The Company designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions. When a derivative is designated as a cash flow hedge instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedge reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the net profit in the Statement of Profit and Loss. If the hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedge reserve till the period the hedge was effective remains in cash flow hedge reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedge reserve is transferred to the net profit in the Statement of Profit and Loss upon the occurrence of the related forecasted transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedge reserve is reclassified to net profit in the Statement of Profit and Loss.

2.9.3 Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

2.9.4 Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

Refer to financial instruments by category table below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

2.9.5 Impairment

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets and unbilled revenues which are not fair valued through profit or loss. Loss allowance for trade receivables and unbilled revenues with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit or loss.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at September 30, 2020 are as follows:

(In ₹ crore)

Particulars	Amortized cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer Note no. 2.7)	16,247	–	–	–	–	16,247	16,247
Investments (Refer note no.2.3)
Preference securities, Equity instruments and others	–	–	31	101	–	132	132
Tax free bonds and government bonds	1,837	–	–	–	–	1,837	2,223(2)
Liquid mutual fund units	–	–	2,437	–	–	2,437	2,437
Redeemable, non-convertible debentures (1)	832	–	–	–	–	832	832
Non convertible debentures	–	–	–	–	2,134	2,134	2,134
Government Securities	–	–	–	–	3,855	3,855	3,855
Trade receivables (Refer Note no. 2.6)	15,618	–	–	–	–	15,618	15,618
Loans (Refer note no. 2.4)	304	–	–	–	–	304	304
Other financial assets (Refer Note no. 2.5) (4)	5,220	–	224	–	18	5,462	5,389(3)
Total	40,058	–	2,692	101	6,007	48,858	49,171
Liabilities:
Trade payables (Refer Note no. 2.12)	1,359	–	–	–	–	1,359	1,359
Lease liabilities (Refer Note no. 2.2)	3,345	–	–	–	–	3,345	3,345
Other financial liabilities (Refer Note no. 2.11)	5,817	–	9	–	2	5,828	5,828
Total	10,521	–	9	–	2	10,532	10,532

⁽¹⁾ The carrying value of debentures approximates fair value as the instruments are at prevailing market rates

⁽²⁾ On account of fair value changes including interest accrued

⁽³⁾ Excludes interest accrued on tax free bonds and government bonds carried at amortized cost of ₹73 crore

⁽⁴⁾ Excludes unbilled revenue on contracts where the right to consideration is dependent on completion of contractual milestones

The carrying value and fair value of financial instruments by categories as at March 31, 2020 were as follows:

 (In ₹ crore)

Particulars	Amortized cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer Note no. 2.7)	13,562	–	–	–	–	13,562	13,562
Investments (Refer Note no. 2.3)
Preference securities, Equity instruments and others	–	–	30	103	–	133	133
Tax free bonds and government bonds	1,838	–	–	–	–	1,838	2,135(2)
Liquid mutual fund units	–	–	2,019	–	–	2,019	2,019
Redeemable, non-convertible debentures (1)	1,159	–	–	–	–	1,159	1,159
Fixed maturity plan securities	–	–	428	–	–	428	428
Certificates of deposit	–	–	–	–	886	886	886
Government Securities	–	–	–	–	664	664	664
Non convertible debentures	–	–	–	–	1,924	1,924	1,924
Trade receivables (Refer Note no. 2.6)	15,459	–	–	–	–	15,459	15,459
Loans (Refer note no. 2.4)	605	–	–	–	–	605	605
Other financial assets (Refer Note no. 2.5)(4)	4,992	–	10	–	9	5,011	4,929(3)
Total	37,615	–	2,487	103	3,483	43,688	43,903
Liabilities:
Trade payables (Refer note no. 2.12)	1,529	–	–	–	–	1,529	1,529
Lease Liabilities (Refer note no. 2.2)	3,165	–	–	–	–	3,165	3,165
Other financial liabilities (Refer Note no. 2.11)	5,844	–	592	–	20	6,456	6,456
Total	10,538	–	592	–	20	11,150	11,150

⁽¹⁾ The carrying value of debentures approximates fair value as the instruments are at prevailing market rates

⁽²⁾ On account of fair value changes including interest accrued

⁽³⁾ Excludes interest accrued on tax free bonds and government bonds carried at amortized cost of ₹82 crore

⁽⁴⁾ Excludes unbilled revenue on contracts where the right to consideration is dependent on completion of contractual milestones

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The fair value hierarchy of assets and liabilities as at September 30, 2020 is as follows:

 (In ₹ crore)

Particulars	September 30, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in tax free bonds (Refer note no. 2.3)	2,209	2,095	114	–
Investments in government bonds (Refer note no. 2.3)	14	14	–	–
Investments in liquid mutual fund units (Refer note no. 2.3)	2,437	2,437	–	–
Investments in non convertible debentures (Refer note no. 2.3)	2,134	1,621	513	–
Investments in government securities (Refer note no. 2.3)	3,855	3,855	–	–
Investments in equity instruments (Refer note no. 2.3)	1	–	–	1
Investments in preference securities (Refer note no. 2.3)	100	–	–	100
Other investments (Refer note no. 2.3)	31	–	–	31
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer note no. 2.5)	242	–	242	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer note no. 2.11)	4	–	4	–
Liability towards contingent consideration (Refer note no. 2.11)	7	–	–	7

During the six months ended September 30, 2020, tax free bonds of ₹55 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on Quoted price, and non-convertible debentures of ₹129 crore were transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

The fair value hierarchy of assets and liabilities as at March 31, 2020 was as follows:

 (In ₹ crore)

Particulars	March 31, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in government securities (Refer Note no. 2.3)	664	664	–	–
Investments in tax free bonds (Refer Note no. 2.3)	2,122	1,960	162	–
Investments in liquid mutual fund units (Refer Note no. 2.3)	2,019	2,019	–	–
Investments in government bonds (Refer Note no. 2.3)	13	13	–	–
Investments in fixed maturity plan securities (Refer Note no. 2.3)	428	–	428	–
Investments in certificates of deposit (Refer Note no. 2.3)	886	–	886	–
Investments in non convertible debentures (Refer Note no. 2.3)	1,924	1,558	366	–
Investments in equity instruments (Refer Note no. 2.3)	2	–	–	2
Investments in preference securities (Refer Note no. 2.3)	101	–	–	101
Other investments (Refer Note no. 2.3)	30	–	–	30
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer Note no. 2.5)	19	–	19	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer note 2.11)	461	–	461	–
Liability towards contingent consideration (Refer note no. 2.11)(1)	151	–	–	151

⁽¹⁾ Discount rate pertaining to contingent consideration is 14%

During the year ended March 31, 2020, tax free bonds and non-convertible debentures of ₹518 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on Quoted price, and tax free bonds of ₹50 crore were transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

A one percentage point change in the unobservable inputs used in fair valuation of Level 3 assets and liabilities does not have a significant impact in its value.

Majority of investments of the Company are fair valued based on Level 1 or Level 2 inputs. These investments primarily include investment in liquid mutual fund units, fixed maturity plan securities, certificates of deposit, commercial papers, quoted bonds issued by government and quasi-government organizations and non-convertible debentures. The Company invests after considering counterparty risks based on multiple criteria including Tier I capital, Capital Adequacy Ratio, Credit Rating, Profitability, NPA levels and Deposit base of banks and financial institutions. These risks are monitored regularly as per its risk management program.

2.10 EQUITY

Accounting policy

Ordinary Shares

Ordinary shares are classified as equity share capital . Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects.

Description of reserves

Retained earnings

Retained earnings represent the amount of accumulated earnings of the Company.

Securities premium

The amount received in excess of the par value of equity shares has been classified as securities premium.

Share options outstanding account

The Share options outstanding account is used to record the fair value of equity-settled share based payment transactions with employees. The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees.

Other reserves

The Special Economic Zone Re-investment reserve has been created out of the profit of the eligible SEZ unit in terms of the provisions of Sec 10AA (1)(ii) of Income Tax Act, 1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in terms of the provisions of the Sec 10AA (2) of the Income Tax Act, 1961.

Capital redemption reserve

In accordance with section 69 of the Indian Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.

Other components of equity

Other components of equity consist of remeasurement of net defined benefit liability / asset, equity instruments fair valued through other comprehensive income, changes on fair valuation of investments and changes in fair value of derivatives designated as cash flow hedges, net of taxes.

Cash flow hedge reserve

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the statement of Profit and Loss upon the occurrence of the related forecasted transaction.

2.10.1 EQUITY SHARE CAPITAL

(In ₹ crore, except as otherwise stated)

Particulars	As at
	September 30, 2020	March 31, 2020
Authorized
Equity shares, ₹5/- par value
480,00,00,000 (480,00,00,000) equity shares	2,400	2,400
Issued, Subscribed and Paid-Up
Equity shares, ₹5/- par value (1)	2,129	2,129
425,94,11,598 (425,89,92,566) equity shares fully paid-up
	2,129	2,129

⁽¹⁾ Refer note no. 2.19 for details of basic and diluted shares

Forfeited shares amounted to ₹1,500/- (₹1,500/-)

The Company has only one class of shares referred to as equity shares having a par value of ₹5/-. Each holder of equity shares is entitled to one vote per share. The equity shares represented by American Depository Shares (ADS) carry similar rights to voting and dividends as the other equity shares. Each ADS represents one underlying equity share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts. However, no such preferential amounts exist currently.

The reconciliation of the number of shares outstanding and the amount of share capital as at September 30, 2020 and March 31, 2020 is set out below:

(in ₹ crore, except as stated otherwise)

Particulars	As at September 30, 2020		As at March 31, 2020
	Number of shares	Amount	Number of shares	Amount
As at the beginning of the period	425,89,92,566	2,129	435,62,79,444	2,178
Add: Shares issued on exercise of employee stock options	4,19,032	–	5,80,388	–
Less: Shares bought back	–	–	9,78,67,266	49
As at the end of the period	425,94,11,598	2,129	425,89,92,566	2,129

Capital Allocation Policy

Effective from fiscal 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As of September 30, 2020, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure there are no externally imposed capital requirements.

2.10.2 DIVIDEND

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits.

The Company declares and pays dividends in Indian rupees. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is also subject to withholding tax at applicable rates.

The amount of per share dividend recognized as distribution to equity shareholders is as follows:

(in ₹)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Final dividend for fiscal 2020	–	–	9.50	–
Final dividend for fiscal 2019	–	–	–	10.50

The Board of Directors in their meeting on April 20, 2020 recommended a final dividend of ₹9.50/- per equity share for the financial year ended March 31, 2020. The same was approved by the shareholders at the Annual General Meeting held on June 27, 2020 which resulted in a cash outflow of approximately ₹4,046 crore.

The Board of Directors in their meeting on October 14, 2020 declared an interim dividend of ₹12/- per equity share which would result in a net cash outflow of approximately ₹5,111 crore.

2.10.3 Employee Stock Option Plan (ESOP):

Accounting Policy

The Company recognizes compensation expense relating to share-based payments in net profit based on estimated fair-values of the awards on the grant date. The estimated fair value of awards is recognized as an expense in the statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account.

Infosys Expanded Stock Ownership Program 2019 (the 2019 Plan) :On June 22, 2019 pursuant to approval by the shareholders in the Annual General Meeting, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 plan shall not exceed 5,00,00,000 equity shares. To implement the 2019 Plan , up to 4,50,00,000 equity shares may be issued by way of secondary acquisition of shares by Infosys Expanded Stock Ownership Trust. The restricted stock units (RSUs) granted under the 2019 plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and remuneration committee). The performance parameters will be based on a combination of relative total shareholders return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the company as decided by administrator. Each of the above performance parameters will be distinct for the purposes of calculation of quantity of shares to vest based on performance. These instruments will generally vest between a minimum of 1 to maximum of 3 years from the grant date.

2015 Stock Incentive Compensation Plan (the 2015 Plan) : On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Stock Incentive Compensation Plan (the 2015 Plan). The maximum number of shares under the 2015 plan shall not exceed 2,40,38,883 equity shares (this includes 1,12,23,576 equity shares which are held by the trust towards the 2011 Plan as at March 31, 2016). The Company expects to grant the instruments under the 2015 Plan over the period of 4 to 7 years. The plan numbers mentioned above would further be adjusted for the September 2018 bonus issue.The equity settled and cash settled RSUs and stock options would vest generally over a period of 4 years and shall be exercisable within the period as approved by the Nomination and Remuneration Committee (NARC). The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant.

Controlled trust holds 1,69,05,562 and 1,82,39,356 shares as at September 30, 2020 and March 31, 2020, respectively under the 2015 plan. Out of these shares, 2,00,000 equity shares each have been earmarked for welfare activities of the employees as at September 30, 2020 and March 31, 2020.

The following is the summary of grants during the three months and six months ended September 30, 2020 and September 30, 2019 :

	2019 plan				2015 plan
Particulars	Three months ended September 30,		Six months ended September 30		Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019	2020	2019	2020	2019
Equity settled RSU
KMPs	–	–	207,808	187,793	–	–	204,097	212,096
Employees other than KMPs	–	–	–	–	–	24,650	24,600	36,850
	–	–	207,808	187,793	–	24,650	228,697	2,48,946

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

In accordance with the employee agreement which has been approved by the shareholders, the CEO is eligible to receive an annual grant of RSUs of fair value ₹3.25 crore which will vest overtime in three equal annual installments upon the completion of each year of service from the respective grant date. Though the annual time based grants for the remaining employment term ending on March 31, 2023 have not been granted as of September 30, 2020, since the service commencement date precedes the grant date, the company has recorded employment stock compensation expense in accordance with Ind AS 102, Share based payments.

The Board, on April 20, 2020, based on the recommendations of the nomination and remuneration committee, in accordance with the terms of his employment agreement, approved the grant of performance-based RSUs of fair value of ₹13 crore for fiscal 2021 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 1,92,964 performance based RSU’s were granted effective May 2, 2020.

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to ₹10 crore for fiscal year 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 1,48,434 performance based RSU’s were granted effective May 2, 2020.

COO and Whole time director

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to ₹4 crore for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 59,374 performance based RSU’s were granted effective May 2, 2020.

Other KMPs

Under the 2015 plan:

On April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, in accordance with employment agreement, the Board, approved performance-based grant of 11,133 RSUs to other KMP under the 2015 Plan. The grants were made effective May 2, 2020. The performance based RSUs will vest over three years based on certain performance targets.

Break-up of employee stock compensation expense

(in ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Granted to:
KMP	19	13	36	31
Employees other than KMP	67	36	118	76
Total (1)	86	49	154	107
(1) Cash settled stock compensation expense included in the above	23	1	35	1

The fair value of the awards are estimated using the Black-Scholes Model for time and non-market performance based options and Monte Carlo simulation model is used for TSR based options.The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected dividends, expected term and the risk free rate of interest. Expected volatility during the expected term of the options is based on historical volatility of the observed market prices of the Company's publicly traded equity shares during a period equivalent to the expected term of the options. Expected volatility of the comparative company have been modelled based on historical movements in the market prices of their publicly traded equity shares during a period equivalent to the expected term of the options. Correlation coefficient is calculated between each peer entity and the indices as a whole or between each entity in the peer group.

The fair value of each equity settled award is estimated on the date of grant with the following assumptions: 

Particulars	For options granted in
	Fiscal 2021- Equity Shares-RSU	Fiscal 2021- ADS-RSU	Fiscal 2020- Equity Shares-RSU	Fiscal 2020- ADS-RSU
Weighted average share price (₹) / ($ ADS)	674	8.93	728	10.52
Exercise price (₹)/ ($ ADS)	5.00	0.07	5.00	0.07
Expected volatility (%)	29-42	29-42	22-30	22-26
Expected life of the option (years)	1-4	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3	2-3
Risk-free interest rate (%)	4-5	0.2-0.3	6-7	1-3
Weighted average fair value as on grant date (₹) / ($ ADS)	563	8.23	607	7.84

The expected life of the RSU/ESOP is estimated based on the vesting term and contractual term of the RSU/ESOP, as well as expected exercise behavior of the employee who receives the RSU/ESOP.

2.11 OTHER FINANCIAL LIABILITIES 

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current
Others
Compensated absences	50	32
Accrued compensation to employees (1)	34	12
Other payables (1)	5	5
Total non-current other financial liabilities	89	49
Current
Unpaid dividends (1)	28	30
Others
Accrued compensation to employees (1)	2,711	2,264
Accrued expenses (1)(4)	2,390	2,646
Retention monies (1)	18	30
Payable for acquisition of business - Contingent consideration (2)	7	151
Capital creditors (1)	210	254
Compensated absences	1,608	1,497
Other payables (1)(5)	421	603
Foreign currency forward and options contracts (2)(3)	4	461
Total current other financial liabilities	7,397	7,936
Total other financial liabilities	7,486	7,985
(1) Financial liability carried at amortized cost	5,817	5,844
(2) Financial liability carried at fair value through profit or loss	9	592
(3) Financial liability carried at fair value through other comprehensive income	2	20
(4) Includes dues to subsidiaries	5	2
(5) Includes dues to subsidiaries	201	47
Contingent consideration on undiscounted basis	7	152

2.12 TRADE PAYABLES

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Trade payables(1)	1,359	1,529
Total trade payables	1,359	1,529
(1)Includes dues to subsidiaries	317	271

2.13 OTHER LIABILITIES

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non current
Accrued provident fund liability	120	185
Others
Deferred income	18	22
Withholding taxes and others	485	-
Total non - current other liabilities	623	207
Current
Accrued provident fund liability	–	64
Unearned revenue	2,485	2,140
Client deposits	–	9
Others
Withholding taxes and others	1,492	1,344
Total current other liabilities	3,977	3,557
Total other liabilities	4,600	3,764

2.14 PROVISIONS

Accounting Policy

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

a. Post sales client support

The Company provides its clients with a fixed-period post sales support on its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded in the Statement of Profit and Loss. The Company estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

b. Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.

Provision for post-sales client support and other provisions

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Others
Post-sales client support and others	629	506
Total provisions	629	506

Provision for post sales client support and other provisions represents cost associated with providing post sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 1 year.

2.15 INCOME TAXES

Accounting Policy

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future.The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to securities premium.

Income tax expense in the statement of profit and loss comprises:

(In ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Current taxes	1,526	1,316	2,752	2,632
Deferred taxes	140	(22)	285	(87)
Income tax expense	1,666	1,294	3,037	2,545

Income tax expense for the three months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of ₹87 crore and ₹92 crore, respectively. These reversals pertains to prior periods on account of adjudication of certain disputed matters in favor of the Company and upon filing of return across various jurisdictions.

Income tax expense for the six months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of ₹225 crore and ₹111 crore, respectively. These reversals pertains to prior periods on account of adjudication of certain disputed matters in favor of the Company and upon filing of return across various jurisdictions.

Deferred income tax for the three months and six months ended September 30, 2020 and September 30, 2019, substantially relates to origination and reversal of temporary differences.

2.16 REVENUE FROM OPERATIONS

Accounting Policy

The Company derives revenues primarily from IT services comprising software development and related services, maintenance, consulting and package implementation, and from licensing of software products and platforms across the Company’s core and digital offerings (together called as “software related services”). Contracts with customers are either on a time-and-material, unit of work, fixed-price or on a fixed-timeframe basis.

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties, in writing, to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services (“performance obligations”) to customers in an amount that reflects the consideration the Company has received or expects to receive in exchange for these products or services (“transaction price”). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Company allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Company estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services.

The Company’s contracts may include variable consideration including rebates, volume discounts and penalties. The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Revenue on time-and-material and unit of work based contracts, are recognized as the related services are performed. Fixed price maintenance revenue is recognized ratably either on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period or ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Company’s costs to fulfil the contract is not even through the period of contract because the services are generally discrete in nature and not repetitive. Revenue from other fixed-price, fixed-timeframe contracts, where the performance obligations are satisfied over time is recognized using the percentage-of-completion method. Efforts or costs expended have been used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the term of the contracts and are recognized in net profit in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

The billing schedules agreed with customers include periodic performance based billing and / or milestone based progress billings. Revenues in excess of billing are classified as unbilled revenue while billing in excess of revenues are classified as contract liabilities (which we refer to as unearned revenues).

In arrangements for software development and related services and maintenance services, by applying the revenue recognition criteria for each distinct performance obligation, the arrangements with customers generally meet the criteria for considering software development and related services as distinct performance obligations. For allocating the transaction price, the Company measures the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Company is unable to determine the standalone selling price, the Company uses the expected cost plus margin approach in estimating the standalone selling price. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses.

Revenue from licenses where the customer obtains a “right to use” the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period.

Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS).When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two distinct separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for implementation, the Company uses the expected cost plus margin approach in estimating the standalone selling price. Where the license is required to be substantially customized as part of the implementation service the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognized using the percentage-of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the performance obligations are satisfied. ATS revenue is recognized ratably on a straight line basis over the period in which the services are rendered.

Contracts with customers includes subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the Company is acting as an agent between the customer and the vendor, and gross when the Company is the principal for the transaction. In doing so, the Company first evaluates whether it controls the good or service before it is transferred to the customer. The Company considers whether it has the primary obligation to fulfil the contract, inventory risk, pricing discretion and other factors to determine whether it controls the goods or service and therefore is acting as a principal or an agent.

The incremental costs of obtaining a contract (i.e., costs that would not have been incurred if the contract had not been obtained) are recognized as an asset if the Company expects to recover them. Any capitalized contract costs are amortized, with the expense recognised as the Company transfers the related goods or services to the customer.

The Company presents revenues net of indirect taxes in its statement of profit and loss.

Revenue from operations for the three months and six months ended September 30, 2020 and September 30, 2019 is as follows:

(In ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Revenue from software services	20,978	19,613	41,264	38,682
Revenue from products and platforms	68	53	108	115
Total revenue from operations	21,046	19,666	41,372	38,797

The company has evaluated the impact of COVID – 19 resulting from (i) the possibility of constraints to render services which may require revision of estimations of costs to complete the contract because of additional efforts;(ii) onerous obligations;(iii) penalties relating to breaches of service level agreements, and (iv) termination or deferment of contracts by customers. The company has concluded that the impact of COVID – 19 is not material based on these estimates. Due to the nature of the pandemic, the company continues to monitor developments to identify significant uncertainties relating to revenue in future periods.

Disaggregated revenue information

The table below presents disaggregated revenues from contracts with customers by offerings for the three months and six months ended September 30, 2020 and September 30, 2019 respectively. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

(In ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Revenue by offerings
Core	10,988	12,015	22,191	24,179
Digital	10,058	7,651	19,181	14,618
Total	21,046	19,666	41,372	38,797

Digital Services

Digital Services comprise of service and solution offerings of the company that enable our clients to transform their businesses. These include offerings that enhance customer experience, leverage AI-based analytics and big data, engineer digital products and IoT, modernize legacy technology systems, migrate to cloud applications and implement advanced cyber security systems.

Core Services

Core Services comprise traditional offerings of the company that have scaled and industrialized over a number of years. These primarily include application management services, proprietary application development services, independent validation solutions, product engineering and management, infrastructure management services, traditional enterprise application implementation, support and integration services.

Products & platforms

The Company also derives revenues from the sale of products and platforms including Infosys Nia - Artificial Intelligence (AI) platform which applies next-generation AI and machine learning.

Trade receivables and Contract Balances

The timing of revenue recognition, billings and cash collections results in receivables, unbilled revenue, and unearned revenue on the Company’s Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon achievement of contractual milestones.

The Company’s receivables are rights to consideration that are unconditional. Unbilled revenues comprising revenues in excess of billings from time and material contracts and fixed price maintenance contracts are classified as financial asset when the right to consideration is unconditional and is due only after a passage of time.

Invoicing to the clients for other fixed price contracts is based on milestones as defined in the contract and therefore the timing of revenue recognition is different from the timing of invoicing to the customers. Therefore unbilled revenues for other fixed price contracts (contract asset) are classified as non-financial asset because the right to consideration is dependent on completion of contractual milestones.

Invoicing in excess of earnings are classified as unearned revenue.

Trade receivables and unbilled revenues are presented net of impairment in the Balance Sheet.

2.17 OTHER INCOME, NET

2.17.1 Other income - Accounting Policy

Other income is comprised primarily of interest income, dividend income, gain / loss on investments and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

2.17.2 Foreign currency - Accounting Policy

Functional currency

The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees (rounded off to crore; one crore equals ten million).

Transactions and translations

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are recognized in the Statement of Profit and Loss and reported within exchange gains/(losses) on translation of assets and liabilities, net, except when deferred in Other Comprehensive Income as qualifying cash flow hedges. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction. The related revenue and expense are recognised using the same exchange rate.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

Other Comprehensive Income, net of taxes includes translation differences on non-monetary financial assets measured at fair value at the reporting date, such as equities classified as financial instruments and measured at fair value through other comprehensive income (FVOCI).

Government grant

The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them will be complied with, and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in the net profit in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in the net profit in the Statement of Profit and Loss over the periods necessary to match them with the related costs which they are intended to compensate.

Other income for the three months and six months ended September 30, 2020 and September 30, 2019 is as follows:

(In ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Interest income on financial assets carried at amortized cost
Tax free bonds and government bonds	35	35	69	69
Deposit with Bank and others	257	258	495	570
Interest income on financial assets fair valued through other comprehensive income
Non-convertible debentures, commercial paper, certificates of deposit and government securities	86	68	162	170
Income on investments carried at fair value through other comprehensive income	27	11	54	27
Income on investments carried at fair value through profit or loss
Dividend income on liquid mutual funds	7	1	8	1
Gain / (loss) on liquid mutual funds and other investments	10	31	32	93
Exchange gains/(losses) on foreign currency forward and options contracts	279	(38)	311	80
Exchange gains/(losses) on translation of assets and liabilities	(186)	196	(179)	174
Miscellaneous income, net	67	42	108	132
Total other income	582	604	1,060	1,316

2.18 EXPENSES

Accounting Policy

2.18.1 Gratuity

The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trusts and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by Indian law.

The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in net profit in the statement of Profit and Loss.

2.18.2 Provident fund

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the Infosys Limited Employees' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

Infosys has an obligation to fund any shortfall on the yield of the trust’s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India.

2.18.3 Superannuation

Certain employees of Infosys are participants in a defined contribution plan. The Company has no further obligations to the Plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

2.18.4 Compensated absences

The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

(In ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Employee benefit expenses
Salaries including bonus	10,715	10,303	21,614	20,362
Contribution to provident and other funds	226	227	471	459
Share based payments to employees (Refer note no. 2.10)	86	49	154	107
Staff welfare	26	25	36	57
	11,053	10,604	22,275	20,985
Cost of software packages and others
For own use	253	215	474	400
Third party items bought for service delivery to clients	295	195	555	373
	548	410	1,029	773
Other expenses
Power and fuel	25	47	48	94
Brand and Marketing	79	102	123	216
Short-term leases	1	9	12	13
Rates and taxes	41	30	84	60
Repairs and Maintenance	259	314	537	614
Consumables	4	6	11	13
Insurance	29	18	53	33
Provision for post-sales client support and others	(1)	16	10	11
Commission to non-whole time directors	2	2	3	4
Impairment loss recognized / (reversed) under expected credit loss model	40	9	126	58
Auditor's remuneration
Statutory audit fees	1	2	2	2
Tax matters	–	–	–	–
Other services	–	1	1	2
Contributions towards Corporate Social Responsibility	133	93	246	156
Others	5	39	13	84
	618	688	1,269	1,360

2.19 RECONCILIATION OF BASIC AND DILUTED SHARES USED IN COMPUTING EARNING PER SHARE

Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

2.20 CONTINGENT LIABILITIES AND COMMITMENTS

Accounting Policy

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

(In ₹ crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Contingent liabilities
Claims against the Company, not acknowledged as debts(1)	3,431	3,410
[Amount paid to statutory authorities ₹5,813 crore (₹5,229 crore)]
Commitments :
Estimated amount of contracts remaining to be executed on capital contracts and not provided for	1,005	1,305
(net of advances and deposits)(2)
Other Commitments*	14	15

*Uncalled capital pertaining to investments

⁽¹⁾ As at September 30, 2020, claims against the Company not acknowledged as debts in respect of income tax matters amounted to ₹3,281 crore. The claims against the Company majorly represent demands arising on completion of assessment proceedings under the Income Tax Act, 1961. These claims are on account of multiple issues of disallowances such as disallowance of profits earned from STP Units and SEZ Units, disallowance of deductions in respect of employment of new employees under section 80JJAA, disallowance of expenditure towards software being held as capital in nature, payments made to Associated Enterprises held as liable for withholding of taxes. These matters are pending before various Appellate Authorities and the management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Company's financial position and results of operations.Amount paid to statutory authorities against the above tax claims amounted to ₹5,812 crore.

⁽²⁾ Capital contracts primarily comprises of commitments for infrastructure facilities and computer equipment’s.

Legal Proceedings

On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020

The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company’s management reasonably expects that these legal actions, when ultimately concluded and determined, will not have a material and adverse effect on the Company’s results of operations or financial condition.

2.21 RELATED PARTY TRANSACTIONS

Refer to the Company's Annual Report for the year ended March 31, 2020 for the full names and other details of the Company's subsidiaries and controlled trusts.

Changes in Subsidiaries

During the six months ended September 30, 2020, the following are the changes in the subsidiaries:

On June 1, 2020, Fluido Oy, acquired 100% of the voting interests in Simplus U.K,Ltd and Simplus Ireland,Ltd. from Simplus Europe,Ltd.

Brilliant Basics (MENA) DMCC, a wholly-owned subsidiary of Brilliant Basics Holdings Limited, has been liquidated effective July 17, 2020.

Infosys Limited Bulgaria EOOD, a wholly-owned subsidiary of Infosys Ltd, was incorporated on September 11, 2020.

The Company’s material related party transactions during the three months and six months ended September 30, 2020 and September 30, 2019 and outstanding balances as at September 30, 2020 and March 31, 2020 are with its subsidiaries with whom the Company generally enters into transactions which are at arms length and in the ordinary course of business.

Change in key management personnel

The following are the changes in the Key management personnel

D.N. Prahlad , (resigned as a member of the Board effective April 20, 2020)

Uri Levine (appointed as an independent director effective April 20, 2020)

Bobby Parikh (appointed as an independent director effective July 15, 2020)

Transactions with key management personnel

The table below describes the compensation to key managerial personnel which comprise directors and executive officers:

(In ₹ crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Salaries and other employee benefits to whole-time directors and executive officers (1)(2)	38	28	71	60
Commission and other benefits to non-executive / independent directors	2	2	3	4
Total	40	30	74	64

⁽¹⁾ Total employee stock compensation expense for the three months ended September 30, 2020 and September 30, 2019 includes a charge of ₹19 crore and ₹13 crore, respectively, towards key managerial personnel. For the six months ended September 30, 2020 and September 30, 2019, includes a charge of ₹36 crore and ₹31 crore respectively, towards key managerial personnel. (Refer to note 2.10)

⁽²⁾ Does not include post-employment benefit based on actuarial valuation as this is done for the Company as a whole.

2.22 SEGMENT REPORTING

The Company publishes this financial statement along with the interim condensed consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the interim condensed consolidated financial statements.

for and on behalf of the Board of Directors of Infosys Limited
Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru October 14, 2020

EX-99.10 12B1 PLAN

   Exhibit 99.10

Ind AS Consolidated

INDEPENDENT AUDITOR’S REPORT

TO THE BOARD OF DIRECTORS OF INFOSYS LIMITED

Report on the Audit of the Interim Condensed Consolidated Financial Statements

Opinion

We have audited the accompanying interim condensed consolidated financial statements of INFOSYS LIMITED (the “Company”), and its subsidiaries (the Company and its subsidiaries together referred to as the “Group”), which comprise the Condensed Consolidated Balance Sheet as at September 30, 2020, the Condensed Consolidated Statement of Profit and Loss (including Other Comprehensive Income) for the three months and six months period ended on that date, the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Statement of Cash Flows for the six months period ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the “interim condensed consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid interim condensed consolidated financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with the principles laid down in the Indian Accounting Standard 34 Interim Financial Reporting (“Ind AS 34’) prescribed under section 133 of the Act read and other accounting principles generally accepted in India, of the state of affairs of the Group as at September 30, 2020, the profit and total comprehensive income for three months and six months period ended on that date, changes in equity and its cash flows for the six months period ended on that date.

Basis for Opinion

We conducted our audit of the interim condensed consolidated financial statements in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Interim Condensed Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the interim condensed consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the interim condensed consolidated financial statements.

Management Responsibilities for the Interim Condensed Consolidated Financial Statements

The Company’s Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and consolidated cash flows of the Group in accordance with Ind AS 34 and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group are responsible for maintenance of the adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the respective interim financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the interim condensed consolidated financial statements by the Directors of the Company, as aforesaid.

In preparing the interim condensed consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate their own respective entities or to cease operations, or have no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Interim Condensed Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the interim condensed consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these interim condensed consolidated financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the interim condensed consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on effectiveness of the Company’s internal financial controls.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the interim condensed consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the interim condensed consolidated financial statements, including the disclosures, and whether the interim condensed consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group to express an opinion on the interim condensed consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of financial statements of such entities included in the interim condensed consolidated financial statements of which we are independent auditors.

Materiality is the magnitude of misstatements in the interim condensed consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the interim condensed consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the interim condensed consolidated financial statements.

We communicate with those charged with governance of the Company and such other entities included in the interim condensed consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Place: Mumbai Date: October 14, 2020 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)       Sanjiv V. Pilgaonkar Partner (Membership No.039826) (UDIN: 20039826AAAAGT8197)

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Financial Statements under Indian Accounting Standards (Ind AS) for the three months and six months ended September 30, 2020

Index

Condensed Consolidated Balance Sheet

Condensed Consolidated Statement of Profit and Loss

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Overview and notes to the consolidated financial statements

1. Overview

1.1 Company overview

1.2 Basis of preparation of financial statements

1.3 Basis of consolidation

1.4 Use of estimates and judgements

1.5 Critical accounting estimates and judgments

2. Notes to the interim condensed consolidated financial statements

2.1 Property, plant and equipment

2.2 Goodwill

2.3 Investments

2.4 Loans

2.5 Other financial assets

2.6 Trade receivables

2.7 Cash and cash equivalents

2.8 Other assets

2.9 Financial instruments

2.10 Equity

2.11 Other financial liabilities

2.12 Other liabilities

2.13 Provisions

2.14 Income taxes

2.15 Revenue from operations

2.16 Other income, net

2.17 Expenses

2.18 Leases

2.19 Reconciliation of basic and diluted shares used in computing earnings per share

2.20 Contingent liabilities and commitments

2.21 Related party transactions

2.22 Segment reporting

2.23 Business Combination

2.24 Function wise classification of Condensed Consolidated Statement of Profit and Loss

INFOSYS LIMITED AND SUBSIDIARIES

(In crore )

Condensed Consolidated Balance Sheets as at	Note No.	September 30, 2020	March 31, 2020
ASSETS
Non-current assets
Property, plant and equipment	2.1	12,332	12,435
Right-of-use assets	2.18	4,195	4,168
Capital work-in-progress		1,216	954
Goodwill	2.2	5,360	5,286
Other intangible assets		1,752	1,900
Financial assets:
Investments	2.3	7,754	4,137
Loans	2.4	23	21
Other financial assets	2.5	642	737
Deferred tax assets (net)		1,305	1,744
Income tax assets (net)		5,402	5,384
Other non-current assets	2.8	1,272	1,426
Total non-current assets		41,253	38,192
Current assets
Financial assets:
Investments	2.3	3,600	4,655
Trade receivables	2.6	17,930	18,487
Cash and cash equivalents	2.7	22,411	18,649
Loans	2.4	130	239
Other financial assets	2.5	6,359	5,457
Income tax assets (net)		–	7
Other Current assets	2.8	6,895	7,082
Total current assets		57,325	54,576
Total assets		98,578	92,768
EQUITY AND LIABILITIES
Equity
Equity share capital	2.10	2,123	2,122
Other equity		68,877	63,328
Total equity attributable to equity holders of the Company		71,000	65,450
Non-controlling interests		434	394
Total equity		71,434	65,844
Liabilities
Non-current liabilities
Financial Liabilities
Lease liabilities	2.18	4,068	4,014
Other financial liabilities	2.11	805	807
Deferred tax liabilities (net)		863	968
Other non-current liabilities	2.12	722	279
Total non-current liabilities		6,458	6,068
Current liabilities
Financial Liabilities
Trade payables		2,375	2,852
Lease liabilities	2.18	647	619
Other financial liabilities	2.11	10,060	10,481
Other current liabilities	2.12	5,325	4,842
Provisions	2.13	686	572
Income tax liabilities (net)		1,593	1,490
Total current liabilities		20,686	20,856
Total equity and liabilities		98,578	92,768

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED AND SUBSIDIARIES

(in crore, except equity share and per equity share data)

Condensed Consolidated Statement of Profit and Loss	Note No.	Three months ended September 30,		Six months ended September 30,
		2020	2019	2020	2019
Revenue from operations	2.15	24,570	22,629	48,234	44,432
Other income, net	2.16	570	626	1,046	1,362
Total income		25,140	23,255	49,280	45,794
Expenses
Employee benefit expenses	2.17	13,400	12,675	27,004	24,977
Cost of technical sub-contractors		1,634	1,651	3,260	3,291
Travel expenses		151	599	267	1,427
Cost of software packages and others	2.17	1,108	680	2,001	1,296
Communication expenses		162	129	324	256
Consultancy and professional charges		286	341	548	631
Depreciation and amortisation expenses		855	727	1,611	1,408
Finance cost		48	42	96	82
Other expenses	2.17	746	915	1,626	1,763
Total expenses		18,390	17,759	36,737	35,131
Profit before tax		6,750	5,496	12,543	10,663
Tax expense:
Current tax	2.14	1,763	1,488	3,084	2,947
Deferred tax	2.14	129	(29)	328	(123)
Profit for the period		4,858	4,037	9,131	7,839
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset. net		7	(22)	154	(39)
Equity instruments through other comprehensive income, net		(5)	2	(6)	5
		2	(20)	148	(34)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		27	17	21	(7)
Exchange differences on translation of foreign operations		21	(35)	185	(10)
Fair value changes on investments, net		(45)	2	9	18
		3	(16)	215	1
Total other comprehensive income /(loss), net of tax		5	(36)	363	(33)
Total comprehensive income for the period		4,863	4,001	9,494	7,806
Profit attributable to:
Owners of the Company		4,845	4,019	9,078	7,817
Non-controlling interests		13	18	53	22
		4,858	4,037	9,131	7,839
Total comprehensive income attributable to:
Owners of the Company		4,847	3,984	9,434	7,782
Non-controlling interests		16	17	60	24
		4,863	4,001	9,494	7,806
Earnings per Equity share
Equity shares of par value 5/- each
Basic ()		11.42	9.46	21.40	18.28
Diluted ()		11.40	9.44	21.37	18.25
Weighted average equity shares used in computing earnings per equity share	2.19
Basic		424,19,08,471	424,93,43,678	424,15,06,966	427,56,15,916
Diluted		424,89,61,564	425,58,22,953	424,84,34,533	428,23,22,537

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Equity

(In crore )

Particulars

OTHER EQUITY

RESERVES & SURPLUS

Other comprehensive income

Equity Share capital (1)

Securities Premium

Retained earnings

Capital reserve

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve(2)

Other reserves(3)

Capital redemption reserve

Equity instruments through other comprehensive income

Exchange differences on translating the financial statements of a foreign operation

Effective portion of Cash Flow Hedges

Other items of other comprehensive income / (loss)

Total equity attributable to equity holders of the Company

Non-controlling interest

Total equity

Balance as at April 1, 2019

2,170

149

57,566

54

1,242

227

2,570

6

61

72

842

21

(32)

64,948

58

65,006

Impact on account of adoption of Ind AS 116*

–

–

(40)

–

–

–

–

–

–

–

–

–

–

(40)

–

(40)

2,170

149

57,526

54

1,242

227

2,570

6

61

72

842

21

(32)

64,908

58

64,966

Changes in equity for the six months ended September 30, 2019

Profit for the period

–

–

7,817

–

–

–

–

–

–

–

–

–

–

7,817

22

7,839

Remeasurement of the net defined benefit liability/asset*

–

–

–

–

–

–

–

–

–

–

–

–

(39)

(39)

–

(39)

Equity instruments through other comprehensive income*

–

–

–

–

–

–

–

–

–

5

–

–

–

5

–

5

Fair value changes on derivatives designated as cash flow hedge*

–

–

–

–

–

–

–

–

–

–

–

(7)

–

(7)

–

(7)

Exchange differences on translation of foreign operations

–

–

–

–

–

–

–

–

–

–

(12)

–

–

(12)

2

(10)

Fair value changes on investments*

–

–

–

–

–

–

–

–

–

–

–

–

18

18

–

18

Total Comprehensive income for the period

–

–

7,817

–

–

–

–

–

–

5

(12)

(7)

(21)

7,782

24

7,806

Shares issued on exercise of employee stock options

–

1

–

–

–

–

–

–

–

–

–

–

–

1

–

1

Employee Stock Compensation Expense

–

–

–

–

–

117

–

–

–

–

–

–

–

117

–

117

Buyback of equity shares

(49)

–

(4,717)

–

(1,494)

–

–

–

–

–

–

–

–

(6,260)

–

(6,260)

Transaction costs relating to buyback *

–

–

–

–

(11)

–

–

–

–

–

–

–

–

(11)

–

(11)

Amount transferred to capital redemption reserve upon buyback

–

–

–

–

(50)

–

–

–

50

–

–

–

–

–

–

–

Exercise of stock options

–

77

–

–

–

(77)

–

–

–

–

–

–

–

–

–

–

Income tax benefit arising on exercise of stock options

–

7

–

–

–

–

–

–

–

–

–

–

–

7

–

7

Financial liability under option arrangements

–

–

(598)

–

–

–

–

–

–

–

–

–

–

(598)

–

(598)

Dividends paid to non controlling interest of subsidiary

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(33)

(33)

Dividends (including dividend distribution tax)

–

–

(5,425)

–

–

–

–

–

–

–

–

–

–

(5,425)

–

(5,425)

Non–controlling interests on acquisition of subsidiary

–

–

–

–

–

–

–

–

–

–

–

–

–

–

311

311

Transfer to general reserve

–

–

(1,470)

–

1,470

–

–

–

–

–

–

–

–

–

–

–

Transferred to Special Economic Zone Re-investment reserve

–

–

(1,145)

–

–

–

1,145

–

–

–

–

–

–

–

–

–

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

616

–

–

–

(616)

–

–

–

–

–

–

–

–

–

Balance as at September 30, 2019

2,121

234

52,604

54

1,157

267

3,099

6

111

77

830

14

(53)

60,521

360

60,881

Consolidated Statement of Changes in Equity (contd.)

(In crore)

Particulars

OTHER EQUITY

RESERVES & SURPLUS

Other comprehensive income

Equity Share capital (1)

Securities Premium

Retained earnings

Capital reserve

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve(2)

Other reserves(3)

Capital redemption reserve

Equity instruments through Other comprehensive income

Exchange differences on translating the financial statements of a foreign operation

Effective portion of Cash Flow Hedges

Other items of other comprehensive income / (loss)

Total equity attributable to equity holders of the Company

Non-controlling interest

Total equity

Balance as at April 1, 2020

2,122

282

56,309

54

1,158

297

4,070

6

111

39

1207

(15)

(190)

65,450

394

65,844

Changes in equity for the six months ended September 30, 2020

Profit for the period

–

–

9,078

–

–

–

–

–

–

–

–

–

–

9,078

53

9,131

Remeasurement of the net defined benefit liability/asset*

–

–

–

–

–

–

–

–

–

–

–

–

154

154

–

154

Equity instruments through other comprehensive income*

–

–

–

–

–

–

–

–

–

(6)

–

–

–

(6)

–

(6)

Fair value changes on derivatives designated as cash flow hedge*

–

–

–

–

–

–

–

–

–

–

–

21

–

21

–

21

Exchange differences on translation of foreign operations

–

–

–

–

–

–

–

–

–

–

178

–

–

178

7

185

Fair value changes on investments*

–

–

–

–

–

–

–

–

–

–

–

–

9

9

–

9

Total Comprehensive income for the period

–

–

9,078

–

–

–

–

–

–

(6)

178

21

163

9,434

60

9,494

Shares issued on exercise of employee stock options

1

5

–

–

–

–

–

–

–

–

–

–

–

6

–

6

Employee stock compensation expense (refer to note 2.10)

–

–

–

–

–

134

–

–

–

–

–

–

–

134

–

134

Exercise of stock options

–

100

–

–

–

(100)

–

–

–

–

–

–

–

–

–

–

Transfer on account of options not exercised

–

–

–

–

1

(1)

–

–

–

–

–

–

–

–

–

–

Income tax benefit arising on exercise of stock options

–

5

–

–

–

–

–

–

–

–

–

–

–

5

–

5

Dividends paid to non controlling interest of subsidiary

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(20)

(20)

Dividends

–

–

(4,029)

–

–

–

–

–

–

–

–

–

–

(4,029)

–

(4,029)

Transfer to general reserve

–

–

(1,554)

–

1,554

–

–

–

–

–

–

–

–

–

–

–

Transferred to Special Economic Zone Re-investment reserve

–

–

(1,463)

–

–

–

1,463

–

–

–

–

–

–

–

–

–

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

561

–

–

–

(561)

–

–

–

–

–

–

–

–

–

Balance as at September 30, 2020

2,123

392

58,902

54

2,713

330

4,972

6

111

33

1,385

6

(27)

71,000

434

71,434

* Net of tax

⁽¹⁾ Net of treasury shares

⁽²⁾ The Special Economic Zone Re-investment Reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Sec 10AA(1)(ii) of Income Tax Act,1961. The reserve should be utilized by the Group for acquiring new plant and machinery for the purpose of its business in the terms of the Sec 10AA(2) of the Income Tax Act, 1961.

⁽³⁾ Under the Swiss Code of Obligation, few subsidiaries of Infosys Lodestone are required to appropriate a certain percentage of the annual profit to legal reserve which may be used only to cover losses or for measures designed to sustain the Company through difficult times, to prevent unemployment or to mitigate its consequences.

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Statement of Cash Flows

Accounting policy

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated. The Group considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.

(In crore)

Particulars	Note No	Six months ended September 30,
		2020	2019
Cash flow from operating activities
Profit for the period		9,131	7,839
Adjustments to reconcile net profit to net cash provided by operating activities:
Income tax expense	2.14	3,412	2,824
Depreciation and amortization		1,611	1,408
Interest and dividend income	2.16	(804)	(861)
Finance cost		96	82
Impairment loss recognized / (reversed) under expected credit loss model		159	82
Exchange differences on translation of assets and liabilities		(7)	54
Stock compensation expense	2.10	174	119
Other adjustments		(60)	(102)
Changes in assets and liabilities
Trade receivables and unbilled revenue		(67)	(1,578)
Loans, other financial assets and other assets		415	410
Trade payables		(477)	(1,071)
Other financial liabilities, other liabilities and provisions		773	930
Cash generated from operations		14,356	10,136
Income taxes paid		(2,987)	(2,705)
Net cash generated by operating activities		11,369	7,431
Cash flows from investing activities
Expenditure on property, plant and equipment and intangibles		(1,306)	(1,891)
Loans to employees		–	5
Deposits placed with corporation		(133)	(7)
Interest and dividend received		708	841
Payment towards acquisition of business, net of cash acquired		–	(511)
Payment of contingent consideration pertaining to acquisition of business		(150)	–
Redemption of escrow pertaining to Buyback		–	257
Other receipts		25	23
Payments to acquire Investments
Preference, equity securities and others		–	(41)
Tax free bonds and government bonds		–	(19)
Liquid mutual funds and fixed maturity plan securities		(11,960)	(18,295)
Non convertible debentures		(829)	(52)
Government securities		(4,664)	(1,561)
Others		(1)	(16)
Proceeds on sale of Investments
Tax free bonds and government bonds		–	18
Non-convertible debentures		720	1,383
Government securities		1,529	1,170
Commercial paper		–	500
Certificates of deposit		900	1,995
Liquid mutual funds and fixed maturity plan securities		11,850	18,946
Preference and equity securities		–	3
Others		22	10
Net cash (used in) / from investing activities		(3,289)	2,758
Cash flows from financing activities:
Payment of lease liabilities		(351)	(294)
Payment of dividends (including dividend distribution tax)		(4,031)	(5,422)
Payment of dividend to non-controlling interest of subsidiary		(20)	(33)
Shares issued on exercise of employee stock options		6	1
Buyback of equity shares including transaction cost		–	(7,478)
Net cash used in financing activities		(4,396)	(13,226)
Net increase / (decrease) in cash and cash equivalents		3,684	(3,037)
Cash and cash equivalents at the beginning of the period	2.7	18,649	19,568
Effect of exchange rate changes on cash and cash equivalents		78	(58)
Cash and cash equivalents at the end of the period		22,411	16,473
Supplementary information:
Restricted cash balance	2.7	404	375

The accompanying notes form an integral part of the interim condensed consolidated financial statements

As per our report of even date attached

for Deloitte Haskins & Sells LLP	for and on behalf of the Board of Directors of Infosys Limited
Chartered Accountants Firm’s Registration No : 117366W/ W-100018
Sanjiv V. Pilgaonkar Partner Membership No. 039826	Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
	D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Mumbai October 14, 2020	Bengaluru October 14, 2020

INFOSYS LIMITED AND SUBSIDIARIES

Notes to the interim condensed consolidated financial statements

1. Overview

1.1 Company overview

Infosys Limited ('the Company' or Infosys) provides consulting, technology, outsourcing and next-generation digital services, to enable clients to execute strategies for their digital transformation.

Infosys together with its subsidiaries and controlled trusts is hereinafter referred to as 'the Group'.

The Company is a public limited company incorporated and domiciled in India and has its registered office at Electronics city, Hosur Road, Bengaluru 560100, Karnataka, India. The Company has its primary listings on the BSE Ltd. and National Stock Exchange of India Limited. The Company’s American Depositary Shares (ADS) representing equity shares are listed on the New York Stock Exchange (NYSE).

The Group's interim condensed consolidated financial statements are approved for issue by the Company's Board of Directors on October 14, 2020.

1.2 Basis of preparation of financial statements

These interim condensed consolidated financial statements are prepared in accordance with Indian Accounting Standard 34 (Ind AS 34), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 ('the Act') and guidelines issued by the Securities and Exchange Board of India (SEBI). Accordingly, these interim condensed consolidated financial statements do not include all the information required for a complete set of financial statements. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report for the year ended March 31, 2020. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the quarter and year-to-date figures are taken from the source and rounded to the nearest digits, the quarter figures in this statement added up to the figures reported for the previous quarters might not always add up to the year-to-date figures reported in this statement.

1.3 Basis of consolidation

Infosys consolidates entities which it owns or controls. The interim condensed consolidated financial statements comprise the financial statements of the Company, its controlled trusts and its subsidiaries. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Group Companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. These financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company, are excluded.

1.4 Use of estimates and judgements

The preparation of the financial statements in conformity with Ind AS requires the management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in these financial statements have been disclosed in Note no. 1.5. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the interim condensed consolidated financial statements.

Estimation of uncertainties relating to the global health pandemic from COVID-19 (COVID-19):

The Group has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these interim condensed consolidated financial statements including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Group has, at the date of approval of these condensed financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Group's financial statements may differ from that estimated as at the date of approval of these interim condensed consolidated financial statements.

1.5 Critical accounting estimates and judgments

a. Revenue recognition

The Group’s contracts with customers include promises to transfer multiple products and services to a customer. Revenues from customer contracts are considered for recognition and measurement when the contract has been approved, in writing, by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligations to determine the deliverables and the ability of the customer to benefit independently from such deliverables, and allocation of transaction price to these distinct performance obligations involves significant judgement.

Fixed price maintenance revenue is recognized ratably on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period. Revenue from fixed price maintenance contract is recognized ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Group’s costs to fulfil the contract is not even through the period of the contract because the services are generally discrete in nature and not repetitive. The use of method to recognize the maintenance revenues requires judgment and is based on the promises in the contract and nature of the deliverables.

The Group uses the percentage-of-completion method in accounting for other fixed-price contracts. Use of the percentage-of-completion method requires the Group to determine the actual efforts or costs expended to date as a proportion of the estimated total efforts or costs to be incurred. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

b. Income taxes

The Company's two major tax jurisdictions are India and the U.S., though the Company also files tax returns in other overseas jurisdictions.

Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Also refer to Note no. 2.14

In assessing the realizability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the group will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. (Refer to Note 2.14)

c. Business combinations and intangible assets

Business combinations are accounted for using Ind AS 103, Business Combinations. Ind AS 103 requires the identifiable intangible assets and contingent consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Estimates are required to be made in determining the value of contingent consideration, value of option arrangements and intangible assets. These valuations are conducted by external valuation experts. These measurements are based on information available at the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management.

d. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group's assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology (Refer to Note no 2.1).

e. Impairment of Goodwill

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit (CGUs) is less than its carrying amount. For the impairment test, goodwill is allocated to the CGU or groups of CGUs which benefit from the synergies of the acquisition and which represent the lowest level at which goodwill is monitored for internal management purposes.

The recoverable amount of CGUs is determined based on higher of value-in-use and fair value less cost to sell. Key assumptions in the cash flow projections are prepared based on current economic conditions and comprises estimated long term growth rates, weighted average cost of capital and estimated operating margins.

f. Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Infosys’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Group has concluded that no material changes are required to lease period relating to the existing lease contracts. (Refer to Note no. 2.18)

g. Allowance for credit losses on receivables and unbilled revenue

The Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The group considered current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates. In calculating expected credit loss, the Group has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID-19.

2.1 PROPERTY, PLANT AND EQUIPMENT

Accounting policy

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The Group depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

Buildings (1)	22-25 years
Plant and machinery (1)(2)	5 years
Office equipment	5 years
Computer equipment (1)	3-5 years
Furniture and fixtures (1)	5 years
Vehicles(1)	5 years
Leasehold improvements	Lower of useful life of the asset or lease term

⁽¹⁾ Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.

⁽²⁾ Includes Solar plant with a useful life of 20 years

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the Consolidated Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Consolidated Statement of Profit and Loss.

Impairment

Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Consolidated Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Consolidated Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.

The changes in the carrying value of property, plant and equipment for the three months ended September 30, 2020 are as follows:

(In crore)

Particulars	Land - Freehold	Buildings (1)	Plant and machinery	Office Equipment	Computer equipment	Furniture and fixtures	Leasehold Improvements	Vehicles	Total
Gross carrying value as at July 1, 2020	1,387	10,057	3,198	1,276	7,019	2,083	1,073	45	26,138
Additions	1	14	12	18	317	7	81	-	450
Deletions	–	–	(2)	(2)	(34)	(3)	(4)	(1)	(46)
Translation difference	–	12	1	1	1	1	2	–	18
Gross carrying value as at September 30, 2020	1,388	10,083	3,209	1,293	7,303	2,088	1,152	44	26,560
Accumulated depreciation as at July 1, 2020	–	(3,380)	(2,220)	(963)	(5,085)	(1,435)	(585)	(30)	(13,698)
Depreciation	–	(96)	(75)	(31)	(265)	(58)	(44)	(1)	(570)
Accumulated depreciation on deletions	–	–	2	1	34	3	4	1	45
Translation difference	–	(1)	–	(1)	1	–	(4)	–	(5)
Accumulated depreciation as at September 30, 2020	–	(3,477)	(2,293)	(994)	(5,315)	(1,490)	(629)	(30)	(14,228)
Carrying value as at July 1, 2020	1,387	6,677	978	313	1,934	648	488	15	12,440
Carrying value as at September 30, 2020	1,388	6,606	916	299	1,988	598	523	14	12,332

The changes in the carrying value of property, plant and equipment for the three months ended September 30, 2019 are as follows:

(In crore)

Particulars	Land - Freehold	Buildings (1)	Plant and machinery	Office Equipment	Computer equipment	Furniture and fixtures	Leasehold Improvements	Vehicles	Total
Gross carrying value as at July 1, 2019	1,307	9,074	2,798	1,126	6,086	1,747	843	40	23,021
Additions	7	330	223	58	230	169	136	2	1,155
Deletions	–	–	(1)	–	(72)	(6)	–	(1)	(80)
Translation difference	–	(11)	–	(1)	(3)	(2)	1	–	(16)
Gross carrying value as at September 30, 2019	1,314	9,393	3,020	1,183	6,241	1,908	980	41	24,080
Accumulated depreciation as at July 1, 2019	–	(3,009)	(1,912)	(838)	(4,381)	(1,221)	(444)	(23)	(11,828)
Depreciation	–	(88)	(78)	(33)	(221)	(59)	(31)	(2)	(512)
Accumulated depreciation on deletions	–	–	1	–	71	6	–	1	79
Translation difference	–	(1)	–	–	4	2	1	–	6
Accumulated depreciation as at September 30, 2019	–	(3,098)	(1,989)	(871)	(4,527)	(1,272)	(474)	(24)	(12,255)
Carrying value as at July 1, 2019	1,307	6,065	886	288	1,705	526	399	17	11,193
Carrying value as at September 30, 2019	1,314	6,295	1,031	312	1,714	636	506	17	11,825

The changes in the carrying value of property, plant and equipment for the six months ended September 30, 2020 are as follows: 

(In crore)

Particulars	Land - Freehold	Buildings (1)	Plant and machinery	Office Equipment	Computer equipment	Furniture and fixtures	Leasehold Improvements	Vehicles	Total
Gross carrying value as at April 1, 2020	1,318	10,016	3,185	1,265	6,676	2,073	1,063	45	25,641
Additions	70	53	26	32	663	19	97	–	960
Deletions	–	–	(3)	(5)	(44)	(5)	(12)	(1)	(70)
Translation difference	–	14	1	1	8	1	4	–	29
Gross carrying value as at September 30, 2020	1,388	10,083	3,209	1,293	7,303	2,088	1,152	44	26,560
Accumulated depreciation as at April 1, 2020	–	(3,284)	(2,145)	(934)	(4,885)	(1,380)	(550)	(28)	(13,206)
Depreciation	–	(191)	(151)	(63)	(471)	(115)	(87)	(3)	(1,081)
Accumulated depreciation on deletions	–	–	3	4	44	5	12	1	69
Translation difference	–	(2)	–	(1)	(3)	–	(4)	–	(10)
Accumulated depreciation as at September 30, 2020	–	(3,477)	(2,293)	(994)	(5,315)	(1,490)	(629)	(30)	(14,228)
Carrying value as at April 1, 2020	1,318	6,732	1,040	331	1,791	693	513	17	12,435
Carrying value as at September 30, 2020	1,388	6,606	916	299	1,988	598	523	14	12,332

The changes in the carrying value of property, plant and equipment for the six months ended September 30, 2019 are as follows: 

(In crore)

Particulars	Land - Freehold	Land - Leasehold	Buildings (1)	Plant and machinery	Office Equipment	Computer equipment	Furniture and fixtures	Leasehold Improvements	Vehicles	Total
Gross carrying value as at April 1, 2019	1,307	605	8,926	2,709	1,101	5,846	1,620	739	38	22,891
Additions	7	–	494	313	88	441	291	242	4	1,880
Additions - Business Combinations	–	–	–	–	–	60	8	2	–	70
Deletions	–	–	–	(1)	(5)	(102)	(9)	(1)	(1)	(119)
Reclassified on account of adoption of Ind AS 116	–	(605)	–	–	–	–	–	–	–	(605)
Translation difference	–	–	(27)	(1)	(1)	(4)	(2)	(2)	–	(37)
Gross carrying value as at September 30, 2019	1,314	–	9,393	3,020	1,183	6,241	1,908	980	41	24,080
Accumulated depreciation as at April 1, 2019	–	(33)	(2,927)	(1,841)	(813)	(4,192)	(1,170)	(414)	(22)	(11,412)
Depreciation	–	–	(172)	(150)	(63)	(440)	(113)	(63)	(3)	(1,004)
Accumulated depreciation on deletions	–	–	–	1	5	101	9	1	1	118
Reclassified on account of adoption of Ind AS 116	–	33	–	–	–	–	–	–	–	33
Translation difference	–	–	1	1	–	4	2	2	–	10
Accumulated depreciation as at September 30, 2019	–	–	(3,098)	(1,989)	(871)	(4,527)	(1,272)	(474)	(24)	(12,255)
Carrying value as at April 1, 2019	1,307	572	5,999	868	288	1,654	450	325	16	11,479
Carrying value as at September 30, 2019	1,314	–	6,295	1,031	312	1,714	636	506	17	11,825

⁽¹⁾ Buildings include 250/- being the value of five shares of 50/- each in Mittal Towers Premises Co-operative Society Limited.

The aggregate depreciation has been included under depreciation and amortisation expense in the consolidated Statement of Profit and Loss.

2.2 GOODWILL

Accounting policy

Goodwill represents the purchase consideration in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquired entity. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds purchase consideration, the fair value of net assets acquired is reassessed and the bargain purchase gain is recognized in capital reserve. Goodwill is measured at cost less accumulated impairment losses.

Impairment

Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit (CGU) is less than its carrying amount. For the impairment test, goodwill is allocated to the CGU or groups of CGUs which benefit from the synergies of the acquisition. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU.

Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized in the Consolidated Statement of Profit and Loss and is not reversed in the subsequent period.

Following is a summary of changes in the carrying amount of goodwill:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Carrying value at the beginning	5,286	3,540
Goodwill on Hipus acquisition	–	108
Goodwill on Stater acquisition	–	399
Goodwill on Simplus acquisition	–	983
Translation differences	74	256
Carrying value at the end	5,360	5,286

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the CGU or groups of CGUs, which benefit from the synergies of the acquisition.

2.3 INVESTMENTS 

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current
Unquoted
Investments carried at fair value through other comprehensive income
Preference securities	100	101
Equity instruments	1	1
	101	102
Investments carried at fair value through profit and loss
Preference securities	8	9
Others (1)	54	54
	62	63
Quoted
Investments carried at amortized cost
Tax free bonds	1,824	1,825
Government Bonds	22	21
	1,846	1,846
Investments carried at fair value through other comprehensive income
Non convertible debentures	1,890	1,462
Government securities	3,855	664
	5,745	2,126
Total non-current investments	7,754	4,137
Current
Unquoted
Investments carried at fair value through profit or loss
Liquid mutual fund units	2,736	2,104
	2,736	2,104
Investments carried at fair value through other comprehensive income
Certificates of deposit	249	1,126
	249	1,126
Quoted
Investments carried at fair value through profit and loss
Fixed maturity plan securities	–	489
	–	489
Investments carried at fair value through other comprehensive income
Non convertible debentures	615	936
	615	936
Total current investments	3,600	4,655
Total investments	11,354	8,792
Aggregate amount of quoted investments	8,206	5,397
Market value of quoted investments (including interest accrued), current	613	1,425
Market value of quoted investments (including interest accrued), non current	8,189	4,268
Aggregate amount of unquoted investments	3,148	3,395
Investments carried at amortized cost	1,846	1,846
Investments carried at fair value through other comprehensive income	6,710	4,290
Investments carried at fair value through profit or loss	2,798	2,656

⁽¹⁾ Uncalled capital commitments outstanding as at September 30, 2020 and March 31, 2020 was 59 crore and 61 crore, respectively.

Refer to Note no 2.9 for Accounting policies on Financial Instruments.

Method of fair valuation: 

(In crore)

Class of investment	Method	Fair value as at
		September 30, 2020	March 31, 2020
Liquid mutual fund units	Quoted price	2,736	2,104
Fixed maturity plan securities	Market observable inputs	–	489
Tax free bonds and government bonds	Quoted price and market observable inputs	2,233	2,144
Non-convertible debentures	Quoted price and market observable inputs	2,505	2,398
Government securities	Quoted price	3,855	664
Certificate of deposits	Market observable inputs	249	1,126
Unquoted equity and preference securities - carried at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model	101	102
Unquoted equity and preference securities - carried at fair value through profit and loss	Discounted cash flows method, Market multiples method, Option pricing model	8	9
Others	Discounted cash flows method, Market multiples method, Option pricing model	54	54
Total		11,741	9,090

Certain quoted investments are classified as Level 2 in the absence of active market for such investments.

2.4 LOANS 

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non Current
Unsecured, considered good
Other loans
Loans to employees	23	21
	23	21
Unsecured, considered doubtful
Other loans
Loans to employees	25	30
	48	51
Less: Allowance for doubtful loans to employees	25	30
Total non-current loans	23	21
Current
Unsecured, considered good
Other loans
Loans to employees	130	239
Total current loans	130	239
Total loans	153	260

2.5 OTHER FINANCIAL ASSETS

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non Current
Security deposits (1)	50	50
Rental deposits (1)	209	221
Net investment in sublease of right of use asset (1)	334	398
Restricted deposits(1)*	36	55
Others (1)	13	13
Total non-current other financial assets	642	737
Current
Security deposits (1)	6	8
Rental deposits (1)	38	27
Restricted deposits (1)*	1,948	1,795
Unbilled revenues (1)#	3,233	2,796
Interest accrued but not due (1)	546	474
Foreign currency forward and options contracts (2) (3)	257	62
Net investment in sublease of right of use asset (1)	72	35
Others (1)	259	260
Total current other financial assets	6,359	5,457
Total other financial assets	7,001	6,194
(1) Financial assets carried at amortized cost	6,744	6,132
(2) Financial assets carried at fair value through other comprehensive income	18	9
(3) Financial assets carried at fair value through profit or loss	239	53

* Restricted deposits represent deposits with financial institutions to settle employee-related obligations as and when they arise during the normal course of business.

# Classified as financial asset as right to consideration is unconditional and is due only after a passage of time.

2.6 TRADE RECEIVABLES

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Unsecured
Considered good	17,930	18,487
Considered doubtful	649	557
	18,579	19,044
Less: Allowance for credit loss	649	557
Total trade receivables(1)	17,930	18,487

⁽¹⁾ Includes dues from companies where directors are interested

2.7 CASH AND CASH EQUIVALENTS

 (In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Balances with banks
In current and deposit accounts	16,885	12,288
Cash on hand	–	–
Others
Deposits with financial institutions	5,526	6,361
Total cash and cash equivalents	22,411	18,649
Balances with banks in unpaid dividend accounts	28	30
Deposit with more than 12 months maturity	7,492	6,895
Balances with banks held as margin money deposits against guarantees	71	71

Cash and cash equivalents as at September 30, 2020 and March 31, 2020 include restricted cash and bank balances of 404 crore and 396 crore, respectively. The restrictions are primarily on account of bank balances held by irrevocable trusts controlled by the company and bank balances held as margin money deposits against guarantees.

The deposits maintained by the Group with banks and financial institutions comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.

2.8 OTHER ASSETS

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non Current
Capital advances	243	310
Advances other than capital advances
Others
Withholding taxes and others	778	777
Prepaid gratuity	78	151
Prepaid expenses	66	87
Deferred Contract Cost	84	101
Other receivables	23	-
Total Non-Current other assets	1,272	1,426
Current
Advances other than capital advances
Payment to vendors for supply of goods	43	145
Others
Unbilled revenues #	4,363	4,325
Withholding taxes and others	1,445	1,583
Prepaid expenses	981	968
Deferred Contract Cost	38	33
Other receivables	25	28
Total Current other assets	6,895	7,082
Total other assets	8,167	8,508

Withholding taxes and others primarily consist of input tax credits and Cenvat recoverable from Government of India. As at September 30 2020, Cenvat recoverable includes 372 crore which are pending adjudication. The Group expects these amounts to be sustainable on adjudication and recoverable on final resolution.

^# Classified as non financial asset as the contractual right to consideration is dependent on completion of contractual milestones.

2.9 FINANCIAL INSTRUMENTS

Accounting policy

2.9.1 Initial recognition

The Group recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

2.9.2 Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income (FVOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Group has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration and financial liability under option arrangements recognized in a business combination which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate the fair value due to the short maturity of these instruments.

b. Derivative financial instruments

The Group holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

(i) Financial assets or financial liabilities, at fair value through profit or loss.

This category has derivative financial assets or liabilities which are not designated as hedges.

Although the Group believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated as hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the consolidated Statement of Profit and Loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the Balance Sheet date.

(ii) Cash flow hedge

The Group designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the net profit in the consolidated Statement of Profit and Loss. If the hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the net profit in the Consolidated Statement of Profit and Loss upon the occurrence of the related forecasted transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified to net profit in the Consolidated Statement of Profit and Loss.

2.9.3 Derecognition of financial instruments

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Group's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

2.9.4 Fair value of financial instruments

In determining the fair value of its financial instruments, the Group uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

Refer to table 'Financial instruments by category' below for the disclosure on carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximates fair value due to the short maturity of those instruments.

2.9.5 Impairment

The Group recognizes loss allowances using the expected credit loss (ECL) model for the financial assets and unbilled revenue which are not fair valued through profit or loss. Loss allowance for trade receivables and unbilled revenues with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in Consolidated Statement of Profit and Loss.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at September 30, 2020 are as follows:

(In crore)

Particulars	Amortized cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer Note no. 2.7	22,411	–	–	–	–	22,411	22,411
Investments (Refer Note no. 2.3)
Equity and preference securities	–	–	8	101	–	109	109
Tax-free bonds and government bonds	1,846	–	–	–	–	1,846	2,233(1)
Liquid mutual fund units	–	–	2,736	–	–	2,736	2,736
Non convertible debentures	–	–	–	–	2,505	2,505	2,505
Government securities	–	–	–	–	3,855	3,855	3,855
Certificates of deposit	–	–	–	–	249	249	249
Other investments	–	–	54	–	–	54	54
Trade receivables (Refer Note no. 2.6)	17,930	–	–	–	–	17,930	17,930
Loans (Refer Note no. 2.4)	153	–	–	–	–	153	153
Other financials assets (Refer Note no. 2.5)(3)	6,744	–	239	–	18	7,001	6,928(2)
Total	49,084	–	3,037	101	6,627	58,849	59,163
Liabilities:
Trade payables	2,375	–	–	–	–	2,375	2,375
Lease liabilities (Refer Note no. 2.18)	4,715	–	–	–	–	4,715	4,715
Financial Liability under option arrangements ((Refer Note no. 2.11)	–	–	678	–	–	678	678
Other financial liabilities (Refer Note no. 2.11)	8,087	–	99	–	2	8,188	8,188
Total	15,177	–	777	–	2	15,956	15,956

⁽¹⁾ On account of fair value changes including interest accrued

⁽²⁾ Excludes interest accrued on tax free bonds and government bonds carried at amortized cost of 73 crore

⁽³⁾ Excludes unbilled revenue on contracts where the right to consideration is dependent on completion of contractual milestones

The carrying value and fair value of financial instruments by categories as at March 31, 2020 were as follows:

(In crore)

Particulars	Amortised cost	Financial assets/ liabilities at fair value through profit or loss		Financial assets/liabilities at fair value through OCI		Total carrying value	Total fair value
		Designated upon initial recognition	Mandatory	Equity instruments designated upon initial recognition	Mandatory
Assets:
Cash and cash equivalents (Refer Note no. 2.7)	18,649	–	–	–	–	18,649	18,649
Investments (Refer Note no. 2.3)
Equity and preference securities	–	–	9	102	–	111	111
Tax-free bonds and government bonds	1,846	–	–	–	–	1,846	2,144(1)
Liquid mutual fund units	–	–	2,104	–	–	2,104	2,104
Non convertible debentures	–	–	–	–	2,398	2,398	2,398
Government securities	–	–	–	–	664	664	664
Certificates of deposit	–	–	–	–	1,126	1,126	1,126
Other investments	–	–	54	–	–	54	54
Fixed maturity plan securities	–	–	489	–	–	489	489
Trade receivables (Refer Note no. 2.6)	18,487	–	–	–	–	18,487	18,487
Loans (Refer Note no. 2.4)	260	–	–	–	–	260	260
Other financials assets (Refer Note no. 2.5)(3)	6,132	–	53	–	9	6,194	6,112(2)
Total	45,374	–	2,709	102	4,197	52,382	52,598
Liabilities:
Trade payables	2,852	–	–	–	–	2,852	2,852
Lease liabilities (Refer Note no. 2.18)	4,633	–	–	–	–	4,633	4,633
Financial Liability under option arrangements (Refer Note no. 2.11)	–	–	621	–	–	621	621
Other financial liabilities (Refer Note no. 2.11)	7,966	–	811	–	20	8,797	8,797
Total	15,451	–	1,432	–	20	16,903	16,903

⁽¹⁾ On account of fair value changes including interest accrued

⁽²⁾ Excludes interest accrued on tax free bonds and government bonds carried at amortized cost of 82 crore

⁽³⁾ Excludes unbilled revenue on contracts where the right to consideration is dependent on completion of contractual milestones

Fair value hierarchy

Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 -Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3- Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at September 30, 2020:

(In crore)

Particulars	As at September 30, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in liquid mutual funds (Refer Note no. 2.3)	2,736	2,736	–	–
Investments in tax-free bonds (Refer Note no. 2.3)	2,209	2,095	114	–
Investments in government bonds (Refer Note no. 2.3)	24	24	–	–
Investments in non convertible debentures (Refer Note no. 2.3)	2,505	1,992	513	–
Investments in certificates of deposit (Refer Note no. 2.3)	249	–	249	–
Investment in Government securities (Refer Note no. 2.3)	3,855	3,855	–	–
Investments in equity instruments (Refer Note no. 2.3)	1	–	–	1
Investments in preference securities (Refer Note no. 2.3)	108	–	–	108
Other investments (Refer Note no. 2.3)	54	–	–	54
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer Note no. 2.5)	257	–	257	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer Note no. 2.11)	22	–	22	–
Financial liability under option arrangements	678	–	–	678
Liability towards contingent consideration (Refer note no. 2.11)(1)	79	–	–	79

⁽¹⁾ Discount rate pertaining to contingent consideration ranges from 8% to 14% .

During the six months ended September 30, 2020, tax free bonds of 55 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price and non-convertible debentures of 129 crore was transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

The fair value hierarchy of assets and liabilities as at March 31, 2020 was as follows:

(In crore)

Particulars	As at March 31, 2020	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments in liquid mutual funds (Refer Note no. 2.3)	2,104	2,104	–	–
Investments in tax free bonds (Refer Note no. 2.3)	2,122	1,960	162	–
Investments in government bonds (Refer Note no. 2.3)	22	22	–	–
Investments in non convertible debentures (Refer Note no. 2.3)	2,398	2,032	366	–
Investments in certificates of deposit (Refer Note no. 2.3)	1,126	–	1,126	–
Investment in Government securities (Refer Note no. 2.3)	664	664	–	–
Investments in fixed maturity plan securities (Refer Note no. 2.3)	489	–	489	–
Investments in equity instruments (Refer Note no. 2.3)	1	–	–	1
Investments in preference securities (Refer Note no. 2.3)	110	–	–	110
Other investments (Refer Note no. 2.3)	54	–	–	54
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer Note no. 2.5)	62	–	62	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer Note no. 2.11)	491	–	491	–
Financial liability under option arrangements	621	–	–	621
Liability towards contingent consideration (Refer note no. 2.11)(1)	340	–	–	340

⁽¹⁾ Discount rate pertaining to contingent consideration ranges from 8% to 14% .

During the year ended March 31, 2020, tax free bonds and non-convertible debentures of 662 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price and 50 crore was transferred from Level 1 to Level 2 of fair value hierarchy, since these were valued based on market observable inputs.

A one percentage point change in the unobservable inputs used in fair valuation of Level 3 assets and liabilities does not have a significant impact in its value.

Majority of investments of the Group are fair valued based on Level 1 or Level 2 inputs. These investments primarily include investment in liquid mutual fund units, fixed maturity plan securities, certificates of deposit, commercial papers, quoted bonds issued by government and quasi-government organizations and non convertible debentures. The Group invests after considering counterparty risks based on multiple criteria including Tier I capital, Capital Adequacy Ratio, Credit Rating, Profitability, NPA levels and Deposit base of banks and financial institutions. These risks are monitored regularly as per its risk management program.

2.10 EQUITY

Accounting policy

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares, share options and buyback are recognized as a deduction from equity, net of any tax effects.

Treasury Shares

When any entity within the Group purchases the company's ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from Securities premium.

Description of reserves

Retained earnings

Retained earnings represent the amount of accumulated earnings of the Group.

Securities premium

The amount received in excess of the par value has been classified as securities premium.

Share options outstanding account

The share options outstanding account is used to record the fair value of equity-settled share based payment transactions with employees. The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees.

Other reserves

The Special Economic Zone Re-investment reserve has been created out of the profit of the eligible SEZ unit in terms of the provisions of Sec 10AA (1)(ii) of Income Tax Act, 1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in terms of the provisions of the Sec 10AA (2) of the Income Tax Act, 1961.

Capital Redemption Reserve

In accordance with section 69 of the Indian Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.

Other components of equity

Other components of equity consist of currency translation, remeasurement of net defined benefit liability / asset, equity instruments fair valued through other comprehensive income, changes on fair valuation of investments and changes in fair value of derivatives designated as cash flow hedges, net of taxes.

Currency translation reserve

The exchange differences arising from the translation of financial statements of foreign subsidiaries with functional currency other than Indian rupees is recognized in other comprehensive income and is presented within equity.

Cash flow hedge reserve

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the consolidated Statement of Profit and Loss upon the occurrence of the related forecasted transaction.

SHARE CAPITAL 

(In crore, except as otherwise stated)

Particulars	As at
	September 30, 2020	March 31, 2020
Authorized
Equity shares, 5 par value
480,00,00,000 (480,00,00,000) equity shares	2,400	2,400
Issued, Subscribed and Paid-Up
Equity shares, 5 par value(1)	2,123	2,122
424,25,06,036 (424,07,53,210) equity shares fully paid-up(2)
	2,123	2,122

Note: Forfeited shares amounted to 1,500 (1,500)

⁽¹⁾ Refer note no. 2.19 for details of basic and diluted shares

⁽²⁾ Net of treasury shares 1,69,05,562 (1,82,39,356)

The Company has only one class of shares referred to as equity shares having a par value of 5/-. Each holder of equity shares is entitled to one vote per share. The equity shares represented by American Depositary Shares (ADS) carry similar rights to voting and dividends as the other equity shares. Each ADS represents one underlying equity share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts. However, no such preferential amounts exist currently, other than the amounts held by irrevocable controlled trusts. For irrevocable controlled trusts, the corpus would be settled in favour of the beneficiaries.

For details of shares reserved for issue under the employee stock option plan of the Company refer to the note below.

Capital allocation policy

Effective from fiscal 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As at September 30, 2020, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure there are no externally imposed capital requirements.

Dividend

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits.

The Company declares and pays dividends in Indian rupees. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is also subject to withholding tax at applicable rates.

Amount of per share dividend recognized as distribution to equity shareholders:

(in )

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Final dividend for fiscal 2019	–	–	–	10.50
Final dividend for fiscal 2020	–	–	9.50	–

The Board of Directors in their meeting on April 20, 2020 recommended a final dividend of 9.50/- per equity share for the financial year ended March 31, 2020. The same was approved by the shareholders at the Annual General Meeting held on June 27, 2020 which resulted in a cash outflow of 4,029 crore, excluding dividend paid on treasury shares.

The Board of Directors in their meeting on October 14, 2020 declared a interim dividend of 12/- per equity share which would result in a net cash outflow of approximately 5,091 crore excluding dividend paid on treasury shares.

The reconciliation of the number of shares outstanding and the amount of share capital as at September 30, 2020 and March 31, 2020 are as follows:

(In crore, except as stated otherwise)

Particulars	As at September 30, 2020		As at March 31, 2020
	Shares	Amount	Shares	Amount
As at the beginning of the period	424,07,53,210	2,122	433,59,54,462	2,170
Add: Shares issued on exercise of employee stock options	17,52,826	1	26,66,014	1
Less: Shares bought back	–	–	9,78,67,266	49
As at the end of the period	424,25,06,036	2,123	424,07,53,210	2,122

Employee Stock Option Plan (ESOP):

Accounting policy

The Group recognizes compensation expense relating to share-based payments in net profit based on estimated fair values of the awards on the grant date. The estimated fair value of awards is recognized as an expense in the statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account.

Infosys Expanded Stock Ownership Program 2019 (the 2019 Plan) :

On June 22, 2019 pursuant to approval by the shareholders in the Annual General Meeting, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 plan shall not exceed 50,000,000 equity shares. To implement the 2019 Plan, up to 45,000,000 equity shares may be issued by way of secondary acquisition of shares by Infosys Expanded Stock Ownership Trust. The Restricted Stock Units (RSUs) granted under the 2019 plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). The performance parameters will be based on a combination of relative Total Shareholder Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the company as decided by administrator. Each of the above performance parameters will be distinct for the purposes of calculation of quantity of shares to vest based on performance. These instruments will generally vest between a minimum of 1 to maximum of 3 years from the grant date.

2015 Stock Incentive Compensation Plan (the 2015 Plan) :

On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Stock Incentive Compensation Plan (the 2015 Plan). The maximum number of shares under the 2015 plan shall not exceed 24,038,883 equity shares (this includes 11,223,576 equity shares which are held by the trust towards the 2011 Plan as at March 31, 2016). The Company expects to grant the instruments under the 2015 Plan over the period of 4 to 7 years. The plan numbers mentioned above would further be adjusted for the September 2018 bonus issue.

The equity settled and cash settled RSUs and stock options would vest generally over a period of 4 years and shall be exercisable within the period as approved by the Nomination and Remuneration Committee (NARC). The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant.

Controlled trust holds 16,905,562 and 18,239,356 shares as at September 30, 2020 and March 31, 2020, respectively under the 2015 plan. Out of these shares 200,000 equity shares each have been earmarked for welfare activities of the employees as at September 30, 2020 and March 31, 2020.

The following is the summary of grants during the three months and six months ended September 30, 2020 and September 30, 2019, respectively:

Particulars	2019 Plan				2015 Plan
	Three months ended September 30,		Six months ended September 30,		Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019	2020	2019	2020	2019
Equity Settled RSU
KMPs	–	–	207,808	187,793	–	–	204,097	212,096
Employees other than KMP	–	–	–	–	–	24,650	24,600	36,850
	–	–	207,808	187,793	–	24,650	228,697	248,946

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

In accordance with the employee agreement which has been approved by the shareholders, the CEO is eligible to receive an annual grant of RSUs of fair value 3.25 crore which will vest overtime in three equal annual installments upon the completion of each year of service from the respective grant date. Though the annual time based grants for the remaining employment term ending on March 31, 2023 have not been granted as of September 30, 2020, since the service commencement date precedes the grant date, the company has recorded employment stock compensation expense in accordance with Ind AS 102, Share based payments.

The Board, on April 20, 2020, based on the recommendations of the nomination and remuneration committee, in accordance with the terms of his employment agreement, approved the grant of performance-based RSUs of fair value of 13 crore for fiscal 2021 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 192,964 performance based RSU’s were granted effective May 2, 2020.

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 148,434 performance based RSU’s were granted effective May 2, 2020.

COO and Whole time director

Under the 2019 plan:

The Board, on April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 4 crore for fiscal 2021 under the 2019 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 59,374 performance based RSU’s were granted effective May 2, 2020.

Other KMPs

Under the 2015 plan:

On April 20, 2020, based on the recommendations of the Nomination and Remuneration Committee, in accordance with employment agreement, the Board, approved performance-based grant of 11,133 RSUs to other KMP under the 2015 Plan. The grants were made effective May 2, 2020. The performance based RSUs will vest over three years based on certain performance targets.

Break-up of employee stock compensation expense:

(in crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Granted to:
KMP	19	13	36	31
Employees other than KMP	79	41	138	88
Total (1)	98	54	174	119
(1) Cash-settled stock compensation expense included above	27	1	40	2

The fair value of the awards are estimated using the Black-Scholes Model for time and non-market performance based options and Monte Carlo simulation model is used for TSR based options.

The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected dividends, expected term and the risk free rate of interest. Expected volatility during the expected term of the options is based on historical volatility of the observed market prices of the Company's publicly traded equity shares during a period equivalent to the expected term of the options. Expected volatility of the comparative company have been modelled based on historical movements in the market prices of their publicly traded equity shares during a period equivalent to the expected term of the options. Correlation coefficient is calculated between each peer entity and the indices as a whole or between each entity in the peer group.

The fair value of each equity settled award is estimated on the date of grant using the following assumptions:

Particulars	For options granted in
	Fiscal 2021- Equity Shares-RSU	Fiscal 2021- ADS-RSU	Fiscal 2020- Equity Shares-RSU	Fiscal 2020- ADS-RSU
Weighted average share price () / ($ ADS)	674	8.93	728	10.52
Exercise price ()/ ($ ADS)	5.00	0.07	5.00	0.07
Expected volatility (%)	29-42	29-42	22-30	22-26
Expected life of the option (years)	1-4	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3	2-3
Risk-free interest rate (%)	4-5	0.2-0.3	6-7	1-3
Weighted average fair value as on grant date () / ($ ADS)	563	8.23	607	7.84

The expected life of the RSU/ESOP is estimated based on the vesting term and contractual term of the RSU/ESOP, as well as expected exercise behavior of the employee who receives the RSU/ESOP.

2.11 OTHER FINANCIAL LIABILITIES 

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current
Others
Accrued compensation to employees (1)	34	22
Compensated absences	58	38
Financial liability under option arrangements (2)	678	621
Payable for acquisition of business - Contingent consideration(2)	30	121
Other Payables (1)	5	5
Total non-current other financial liabilities	805	807
Current
Unpaid dividends (1)	28	30
Others
Accrued compensation to employees (1)	3,451	2,958
Accrued expenses (1)	4,050	3,921
Retention monies (1)	19	72
Payable for acquisition of business - Contingent consideration (2)	49	219
Payable by controlled trusts (1)	179	188
Compensated absences	1,941	1,832
Foreign currency forward and options contracts (2)(3)	22	491
Capital creditors (1)	230	280
Other payables (1)	91	490
Total current other financial liabilities	10,060	10,481
Total other financial liabilities	10,865	11,288
(1) Financial liability carried at amortized cost	8,087	7,966
(2) Financial liability carried at fair value through profit or loss	777	1,432
(3) Financial liability carried at fair value through other comprehensive income	2	20
Contingent consideration on undiscounted basis	88	367

2.12 OTHER LIABILITIES

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Non-current
Others
Withholding taxes and others	506	–
Deferred income - government grants	43	43
Accrued gratuity	34	28
Accrued provident fund liability	120	185
Deferred income	18	21
Others	1	2
Total non-current other liabilities	722	279
Current
Unearned revenue	3,356	2,990
Client deposit	–	18
Others
Withholding taxes and others	1,943	1,759
Accrued gratuity	–	3
Accrued provident fund liability	–	64
Deferred income - government grants	22	2
Others	4	6
Total current other liabilities	5,325	4,842
Total other liabilities	6,047	5,121

2.13 PROVISIONS

Accounting policy

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

a. Post sales client support

The Group provides its clients with a fixed-period post sales support on its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in Consolidated Statement of Profit and Loss. The Group estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

b. Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Group recognizes any impairment loss on the assets associated with that contract.

Provision for post-sales client support and other provisions

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current
Others
Post-sales client support and other provisions	686	572
Total provisions	686	572

Provision for post sales client support and other provisions represents cost associated with providing post sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 1 year.

2.14 INCOME TAXES

Accounting policy

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the Consolidated Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future.

The Group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to securities premium.

Income tax expense in the consolidated Statement of Profit and Loss comprises:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Current taxes	1,763	1,488	3,084	2,947
Deferred taxes	129	(29)	328	(123)
Income tax expense	1,892	1,459	3,412	2,824

Income tax expense for the three months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of 99 crore and 76 crore, respectively. Income tax expense for the six months ended September 30, 2020 and September 30, 2019 includes reversal (net of provisions) of 230 crore and 119 crore, respectively. These reversals pertains to prior periods on account of adjudication of certain disputed matters in favor of the Company and upon filing of return across various jurisdictions.

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Profit before income taxes	6,750	5,496	12,543	10,663
Enacted tax rates in India	34.94%	34.94%	34.94%	34.94%
Computed expected tax expense	2,359	1,920	4,383	3,726
Tax effect due to non-taxable income for Indian tax purposes	(622)	(604)	(1,169)	(1,176)
Overseas taxes	192	219	364	409
Tax provision (reversals)	(99)	(76)	(230)	(119)
Effect of exempt non-operating income	(9)	(10)	(18)	(21)
Effect of unrecognized deferred tax assets	9	29	26	46
Effect of differential tax rates	(46)	(10)	(74)	(19)
Effect of non-deductible expenses	27	24	65	45
Branch profit tax (net of credits)	(9)	(28)	(17)	(57)
Others	90	(5)	82	(10)
Income tax expense	1,892	1,459	3,412	2,824

The applicable Indian corporate statutory tax rate for the three months and six months ended September 30, 2020 and September 30, 2019 is 34.94% each.

Deferred income tax for the three months and six months ended September 30, 2020 and September 30, 2019 substantially relates to origination and reversal of temporary differences.

2.15 REVENUE FROM OPERATIONS

Accounting policy

The Group derives revenues primarily from IT services comprising software development and related services, maintenance, consulting and package implementation, licensing of software products and platforms across the Group’s core and digital offerings (together called as “software related services”) and business process management services. Contracts with customers are either on a time-and-material, unit of work, fixed-price or on a fixed-timeframe basis.

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties, in writing, to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services (“performance obligations”) to customers in an amount that reflects the consideration the Group has received or expects to receive in exchange for these products or services (“transaction price”). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

The Group assesses the services promised in a contract and identifies distinct performance obligations in the contract. The Group allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary method used to estimate standalone selling price is the expected cost plus a margin, under which the Group estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on similar services.

The Group’s contracts may include variable consideration including rebates, volume discounts and penalties. The Group includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Revenue on time-and-material and unit of work based contracts, are recognized as the related services are performed. Fixed price maintenance revenue is recognized ratably either on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period or ratably using a percentage of completion method when the pattern of benefits from the services rendered to the customer and Group’s costs to fulfil the contract is not even through the period of contract because the services are generally discrete in nature and not repetitive. Revenue from other fixed-price, fixed-timeframe contracts, where the performance obligations are satisfied over time is recognized using the percentage-of-completion method. Efforts or costs expended have been used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the term of the contracts and are recognized in net profit in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

The billing schedules agreed with customers include periodic performance based billing and / or milestone based progress billings. Revenues in excess of billing are classified as unbilled revenue while billing in excess of revenues are classified as contract liabilities (which we refer to as unearned revenues).

In arrangements for software development and related services and maintenance services, by applying the revenue recognition criteria for each distinct performance obligation, the arrangements with customers generally meet the criteria for considering software development and related services as distinct performance obligations. For allocating the transaction price, the Group measures the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Group is unable to determine the standalone selling price, the Group uses the expected cost plus margin approach in estimating the standalone selling price. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses.

Revenue from licenses where the customer obtains a “right to use” the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period.

Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS).When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two distinct separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for implementation, the Group uses the expected cost plus margin approach in estimating the standalone selling price. Where the license is required to be substantially customized as part of the implementation service the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognized using the percentage-of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the performance obligations are satisfied. ATS revenue is recognized ratably on a straight line basis over the period in which the services are rendered.

Contracts with customers includes subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the Group is acting as an agent between the customer and the vendor, and gross when the Group is the principal for the transaction. In doing so, the group first evaluates whether it controls the good or service before it is transferred to the customer. The Group considers whether it has the primary obligation to fulfil the contract, inventory risk, pricing discretion and other factors to determine whether it controls the goods or service and therefore is acting as a principal or an agent.

The incremental costs of obtaining a contract (i.e., costs that would not have been incurred if the contract had not been obtained) are recognized as an asset if the Group expects to recover them. Any capitalized contract costs are amortized, with the expense recognized as the Group transfers the related goods or services to the customer.

The Group presents revenues net of indirect taxes in its consolidated statement of profit and loss.

Revenues for the three months and six months ended September 30, 2020 and September 30, 2019 are as follows:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Revenue from software services	22,728	21,177	44,747	41,747
Revenue from products and platforms	1,842	1,452	3,487	2,685
Total revenue from operations	24,570	22,629	48,234	44,432

The Group has evaluated the impact of COVID – 19 resulting from (i) the possibility of constraints to render services which may require revision of estimations of costs to complete the contract because of additional efforts;(ii) onerous obligations;(iii) penalties relating to breaches of service level agreements, and (iv) termination or deferment of contracts by customers. The Group has concluded that the impact of COVID – 19 is not material based on these estimates. Due to the nature of the pandemic, the Group continues to monitor developments to identify significant uncertainties relating to revenue in future periods.

Disaggregated revenue information

The table below presents disaggregated revenues from contracts with customers by geography and offerings for each of our business segments. The Group believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

For the three months ended September 30, 2020 and September 30, 2019

(In crore)

Particulars	Financial Services (1)	Retail(2)	Communication (3)	Energy , Utilities, Resources and Services	Manufacturing	Hi-Tech	Life Sciences(4)	Others (5)	Total
Revenues by Geography*
North America	4,547	2,403	1,618	1,710	1,178	2,126	1,141	193	14,916
	4,151	2,245	1,858	1,644	1,305	1,617	943	126	13,889
Europe	1,622	1,033	699	1,043	998	39	493	52	5,979
	1,569	992	439	1,036	875	44	473	36	5,464
India	394	12	74	4	12	65	5	174	740
	340	13	51	1	23	46	13	120	607
Rest of the world	1,308	203	702	270	53	14	33	352	2,935
	1,153	198	613	281	88	6	25	305	2,669
Total	7,871	3,651	3,093	3,027	2,241	2,244	1,672	771	24,570
	7,213	3,448	2,961	2,962	2,291	1,713	1,454	587	22,629
Revenue by offerings
Digital	3,717	1,885	1,512	1,437	997	1,111	692	273	11,624
	2,828	1,475	1,173	1,113	853	623	449	164	8,678
Core	4,154	1,766	1,581	1,590	1,244	1,133	980	498	12,946
	4,385	1,973	1,788	1,849	1,438	1,090	1,005	423	13,951
Total	7,871	3,651	3,093	3,027	2,241	2,244	1,672	771	24,570
	7,213	3,448	2,961	2,962	2,291	1,713	1,454	587	22,629

For the six months ended September 30, 2020 and September 30, 2019

(In crore)

Particulars	Financial Services (1)	Retail(2)	Communication (3)	Energy , Utilities, Resources and Services	Manufacturing	Hi-Tech	Life Sciences(4)	Others (5)	Total
Revenues by Geography*
North America	8,921	4,579	3,433	3,422	2,476	4,071	2,189	365	29,456
	8,184	4,468	3,739	3,207	2,481	3,212	1,783	239	27,313
Europe	3,158	2,051	1,328	2,079	1,883	70	988	107	11,664
	2,907	1,981	888	2,030	1,697	85	947	73	10,608
India	762	22	130	8	27	137	12	325	1,423
	638	25	81	2	42	83	18	223	1,112
Rest of the world	2,487	391	1,366	545	111	29	57	705	5,691
	2,340	409	1,256	557	170	12	47	608	5,399
Total	15,328	7,043	6,257	6,054	4,497	4,307	3,246	1,502	48,234
	14,069	6,883	5,964	5,796	4,390	3,392	2,795	1,143	44,432
Revenue by offerings
Digital	7,143	3,499	3,007	2,757	2,026	1,978	1,257	489	22,156
	5,333	2,897	2,244	2,085	1,617	1,206	813	272	16,467
Core	8,185	3,544	3,250	3,297	2,471	2,329	1,989	1,013	26,078
	8,736	3,986	3,720	3,711	2,773	2,186	1,982	871	27,965
Total	15,328	7,043	6,257	6,054	4,497	4,307	3,246	1,502	48,234
	14,069	6,883	5,964	5,796	4,390	3,392	2,795	1,143	44,432

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

^* Geographical revenues is based on the domicile of customer.

Digital Services

Digital Services comprise of service and solution offerings of the Group that enable our clients to transform their businesses. These include offerings that enhance customer experience, leverage AI-based analytics and big data, engineer digital products and IoT, modernize legacy technology systems, migrate to cloud applications and implement advanced cyber security systems.

Core Services

Core Services comprise traditional offerings of the Group that have scaled and industrialized over a number of years. These primarily include application management services, proprietary application development services, independent validation solutions, product engineering and management, infrastructure management services, traditional enterprise application implementation, support and integration services.

Products & platforms

The Group also derives revenues from the sale of products and platforms including Finacle – core banking solution, Edge Suite of products, Infosys Nia - Artificial Intelligence (AI) platform which applies next-generation AI and machine learning, Panaya platform, Skava platform, Stater digital platform and Infosys McCamish- insurance platform.

Trade Receivables and Contract Balances

The timing of revenue recognition, billings and cash collections results in receivables, unbilled revenue, and unearned revenue on the Group’s Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon achievement of contractual milestones.

The Group’s receivables are rights to consideration that are unconditional. Unbilled revenues comprising revenues in excess of billings from time and material contracts and fixed price maintenance contracts are classified as financial asset when the right to consideration is unconditional and is due only after a passage of time.

Invoicing to the clients for other fixed price contracts is based on milestones as defined in the contract and therefore the timing of revenue recognition is different from the timing of invoicing to the customers. Therefore unbilled revenues for other fixed price contracts (contract asset) are classified as non-financial asset because the right to consideration is dependent on completion of contractual milestones.

Invoicing in excess of earnings are classified as unearned revenue.

Trade receivables and unbilled revenues are presented net of impairment in the consolidated Balance Sheet.

2.16 OTHER INCOME, NET

Accounting policy

Other income is comprised primarily of interest income, dividend income, gain/loss on investment and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

Foreign currency

Accounting policy

Functional currency

The functional currency of Infosys, Infosys BPM, controlled trusts, EdgeVerve and Skava is the Indian rupee. The functional currencies for other subsidiaries are their respective local currencies. These financial statements are presented in Indian rupees (rounded off to crore; one crore equals ten million).

Transactions and translations

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are recognized in the Consolidated Statement of Profit and Loss and reported within exchange gains/ (losses) on translation of assets and liabilities, net, except when deferred in Other Comprehensive Income as qualifying cash flow hedges. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction. The related revenue and expense are recognized using the same exchange rate.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

The translation of financial statements of the foreign subsidiaries to the presentation currency is performed for assets and liabilities using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using the average exchange rate for the respective periods. The gains or losses resulting from such translation are included in currency translation reserves under other components of equity. When a subsidiary is disposed off, in full, the relevant amount is transferred to net profit in the Consolidated Statement of Profit and Loss. However when a change in the parent's ownership does not result in loss of control of a subsidiary, such changes are recorded through equity.

Other Comprehensive Income, net of taxes includes translation differences on non-monetary financial assets measured at fair value at the reporting date, such as equities classified as financial instruments and measured at fair value through other comprehensive income (FVOCI).

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the Balance Sheet date.

Government grant

The Group recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in net profit in the Consolidated Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in net profit in the interim condensed consolidated Statement of Profit and Loss over the periods necessary to match them with the related costs which they are intended to compensate.

Other income for the three months and six months ended September 30, 2020 and September 30, 2019 is as follows: 

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Interest income on financial assets carried at amortized cost:
Tax free bonds and Government bonds	35	36	69	72
Deposit with Bank and others	280	268	538	581
Interest income on financial assets carried at fair value through other comprehensive income:
Non-convertible debentures and certificates of deposit, commercial paper and government securities	97	81	186	196
Income on investments carried at fair value through profit or loss
Dividend income on liquid mutual funds	10	1	11	1
Gain / (loss) on liquid mutual funds and other investments	9	37	33	102
Income on investments carried at fair value through other comprehensive income	27	11	54	27
Interest income on income tax refund	–	–	–	9
Exchange gains/ (losses) on foreign currency forward and options contracts	307	(43)	354	96
Exchange gains/ (losses) on translation of assets and liabilities	(262)	205	(294)	159
Miscellaneous income, net	67	30	95	119
Total other income	570	626	1,046	1,362

2.17 EXPENSES

Accounting policy

Gratuity

The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees of Infosys and its Indian subsidiaries. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Group.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). In case of Infosys BPM and EdgeVerve, contributions are made to the Infosys BPM Employees' Gratuity Fund Trust and EdgeVerve Systems Limited Employees' Gratuity Fund Trust, respectively. Trustees administer contributions made to the Trusts and contributions are invested in a scheme with the Life Insurance Corporation of India as permitted by Indian law.

The Group recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments is recognized in the Consolidated Statement of Profit and Loss.

Provident fund

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the Infosys Limited Employees' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government of India. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

In respect of Indian subsidiaries, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the respective companies make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The Companies have no further obligation to the plan beyond its monthly contributions.

Superannuation

Certain employees of Infosys, Infosys BPM and EdgeVerve are participants in a defined contribution plan. The Group has no further obligations to the plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

Compensated absences

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Employee benefit expenses
Salaries including bonus	12,978	12,296	26,166	24,192
Contribution to provident and other funds	270	269	559	543
Share based payments to employees (Refer note no. 2.10)	98	54	174	119
Staff welfare	54	56	105	123
	13,400	12,675	27,004	24,977
Cost of software packages and others
For own use	309	266	600	498
Third party items bought for service delivery to clients	799	414	1,401	798
	1,108	680	2,001	1,296
Other expenses
Repairs and maintenance	324	385	669	745
Power and fuel	37	61	71	121
Brand and marketing	93	123	152	261
Short-term leases (Refer to Note 2.18)	14	22	39	42
Rates and taxes	59	47	114	84
Consumables	26	22	50	38
Insurance	36	22	66	41
Provision for post-sales client support and others	(7)	19	(1)	10
Commission to non-whole time directors	2	2	3	4
Impairment loss recognized / (reversed) under expected credit loss model	63	36	162	88
Contributions towards Corporate Social responsibility	140	100	260	168
Others	(41)	76	41	161
	746	915	1,626	1,763

2.18 Leases  

Accounting Policy

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for land and buildings. The group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group assesses whether: (1) the contract involves the use of an identified asset (2) the group has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the group changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

The Group as a lessor

Leases for which the group is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2020: 

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of July 1, 2020	625	3,285	20	67	3,997
Additions*	7	377	1	2	387
Deletions	–	(32)	–	–	(32)
Depreciation	(2)	(147)	(2)	(4)	(155)
Translation difference	1	(4)	–	1	(2)
Balance as of September 30, 2020	631	3,479	19	66	4,195

* Net of lease incentives of 34 crore related to lease of buildings

Following are the changes in the carrying value of right of use assets for the three months ended September 30, 2019: 

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of July 1, 2019	630	3,079	20	–	3,729
Additions	–	320	2	26	348
Deletion	(3)	(5)	–	–	(8)
Depreciation	(2)	(131)	(3)	(1)	(137)
Translation difference	–	(14)	(1)	–	(15)
Balance as of September 30, 2019	625	3,249	18	25	3,917

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2020:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2020	626	3,485	15	42	4,168
Additions*	7	360	9	32	408
Deletions	–	(90)	–	–	(90)
Depreciation	(3)	(292)	(5)	(8)	(308)
Translation difference	1	16	–	–	17
Balance as of September 30, 2020	631	3,479	19	66	4,195

*Net of lease incentives of 84 crore related to lease of buildings

Following are the changes in the carrying value of right of use assets for the six months ended September 30, 2019:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2019	–	2,898	9	–	2,907
Reclassified on account of adoption of Ind AS 116	634	–	–	–	634
Additions	–	437	4	26	467
Additions through business combination	–	177	10	–	187
Deletions	(3)	(5)	–	–	(8)
Depreciation	(4)	(252)	(5)	(1)	(262)
Translation difference	(2)	(6)	–	–	(8)
Balance as of September 30, 2019	625	3,249	18	25	3,917

The aggregate depreciation on ROU assets has been included under depreciation and amortisation expense in the consolidated Statement of Profit and Loss.

The following is the break-up of current and non-current lease liabilities:

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Current lease liabilities	647	619
Non-current lease liabilities	4,068	4,014
Total	4,715	4,633

2.19 RECONCILIATION OF BASIC AND DILUTED SHARES USED IN COMPUTING EARNINGS PER SHARE

Accounting policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

2.20 CONTINGENT LIABILITIES AND COMMITMENTS

Accounting policy

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

(In crore)

Particulars	As at
	September 30, 2020	March 31, 2020
Contingent liabilities :
Claims against the Group, not acknowledged as debts(1)	3,645	3,583
[Amount paid to statutory authorities 6,019 crore (5,353 crore)]
Commitments :
Estimated amount of contracts remaining to be executed on capital contracts and not provided for (net of advances and deposits)(2)	1,044	1,365
Other commitments*	59	61

* Uncalled capital pertaining to investments

⁽¹⁾ As at September 30, 2020, claims against the Group not acknowledged as debts in respect of income tax matters amounted to 3,360 crore. The claims against the group majorly represent demands arising on completion of assessment proceedings under the Income Tax Act, 1961. These claims are on account of multiple issues of disallowances such as disallowance of profits earned from STP Units and SEZ Units, disallowance of deductions in respect of employment of new employees under section 80JJAA, disallowance of expenditure towards software being held as capital in nature, payments made to Associated Enterprises held as liable for withholding of taxes. These matters are pending before various Appellate Authorities and the management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Group's financial position and results of operations.

Amount paid to statutory authorities against the above tax claims amounted to 6,018 crore.

⁽²⁾ Capital contracts primarily comprises of commitments for infrastructure facilities and computer equipment's.

Legal Proceedings

On the matters pertaining to the whistle blower allegations, previously disclosed by the Company on October 22, 2019, the Company has responded to all the inquires received from the Indian regulatory authorities. The Company submitted its last response on May 15, 2020

The Group is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Group’s management reasonably expects that these legal actions, when ultimately concluded and determined, will not have a material and adverse effect on the Group’s results of operations or financial condition.

2.21 RELATED PARTY TRANSACTIONS

Refer to the Company's Annual Report for the year ended March 31, 2020 for the full names and other details of the Company's subsidiaries and controlled trusts.

Changes in Subsidiaries

During the six months ended September 30, 2020, the following are the changes in the subsidiaries:

- On June 1, 2020, Fluido Oy, acquired 100% of the voting interests in Simplus U.K,Ltd and Simplus Ireland,Ltd. from Simplus Europe,Ltd.

- Brilliant Basics (MENA) DMCC, a wholly-owned subsidiary of Brilliant Basics Holdings Limited, has been liquidated effective July 17, 2020.

- Infosys Limited Bulgaria EOOD, a wholly-owned subsidiary of Infosys Ltd, incorporated on September 11, 2020.

Change in key management personnel

The following are the changes in the key management personnel:

- D.N. Prahlad (resigned as a member of the Board effective April 20, 2020)

- Uri Levine (appointed as an independent director effective April 20, 2020)

- Bobby Parikh (appointed as an independent director effective July 15, 2020)

Transaction with key management personnel:

The table below describes the compensation to key management personnel which comprise directors and executive officers:

(In crore)

Particulars	Three months ended September 30,		Six months ended September 30,
	2020	2019	2020	2019
Salaries and other employee benefits to whole-time directors and executive officers (1)(2)	38	28	71	60
Commission and other benefits to non-executive/independent directors	2	2	3	4
Total	40	30	74	64

⁽¹⁾ Total employee stock compensation expense for the three months ended September 30, 2020 and September 30, 2019 includes a charge of 19 crore and 13 crore, respectively, towards key managerial personnel. For the six months ended September 30, 2020 and September 30, 2019 includes a charge of 36 crore and 31 crore respectively, towards key managerial personnel. (Refer to note 2.10)

⁽²⁾ Does not include post-employment benefit based on actuarial valuation as this is done for the Company as a whole.

2.22 SEGMENT REPORTING

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Group's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. The Chief Operating Decision Maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented along business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the accounting policies.

Business segments of the Group are primarily enterprises in Financial Services and Insurance, enterprises in Manufacturing, enterprises in Retail, Consumer Packaged Goods and Logistics, enterprises in the Energy, Utilities, Resources and Services, enterprises in Communication, Telecom OEM and Media, enterprises in Hi-Tech, enterprises in Life Sciences and Healthcare and all other segments. The Financial services reportable segments has been aggregated to include the Financial Services operating segment and Finacle operating segment because of the similarity of the economic characteristics. All other segments represent the operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services .

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Revenue for 'all other segments' represents revenue generated by Infosys Public services and revenue generated from customers located in India, Japan and China and other enterprises in Public services. Allocated expenses of segments include expenses incurred for rendering services from the Group's offshore software development centers and on-site expenses, which are categorized in relation to the associated efforts of the segment. Certain expenses such as depreciation and amortization, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably. The management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and adjusted against the total income of the Group.

Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. The management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Business segment revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

Disclosure of revenue by geographic locations is given in note 2.15 Revenue from operations.

Business Segments

Three months ended September 30, 2020 and September 30, 2019:

(In crore)

Particulars	Financial Services (1)	Retail (2)	Communication (3)	Energy, Utilities, Resources and Services	Manufacturing	Hi-Tech	Life Sciences (4)	All other segments (5)	Total
Revenue from operations	7,871	3,651	3,093	3,027	2,241	2,244	1,672	771	24,570
	7,213	3,448	2,961	2,962	2,291	1,713	1,454	587	22,629
Identifiable operating expenses	4,055	1,733	1,828	1,553	1,153	1,260	827	512	12,921
	3,718	1,722	1,756	1,564	1,264	1,015	770	355	12,164
Allocated expenses	1,456	618	602	649	433	315	280	213	4,566
	1,629	688	582	580	518	306	292	225	4,820
Segmental operating income	2,360	1,300	663	825	655	669	565	46	7,083
	1,866	1,038	623	818	509	392	392	7	5,645
Unallocable expenses									855
									733
Other income, net (Refer to note 2.16)									570
									626
Finance cost									48
									42
Profit before tax									6,750
									5,496
Income tax expense									1,892
									1,459
Net Profit									4,858
									4,037
Depreciation and amortization expense									855
									727
Non-cash expenses other than depreciation and amortization									–
									6

Six months ended September 30, 2020 and September 30, 2019:

(In crore)

Particulars	Financial Services (1)	Retail (2)	Communication (3)	Energy, Utilities, Resources and Services	Manufacturing	Hi-Tech	Life Sciences (4)	All other segments (5)	Total
Revenue from operations	15,328	7,043	6,257	6,054	4,497	4,307	3,246	1,502	48,234
	14,069	6,883	5,964	5,796	4,390	3,392	2,795	1,143	44,432
Identifiable operating expenses	7,959	3,326	3,730	3,106	2,436	2,388	1,626	979	25,550
	7,400	3,463	3,544	3,068	2,456	2,038	1,551	685	24,205
Allocated expenses	3,008	1,368	1,243	1,272	901	651	581	456	9,480
	3,090	1,350	1,175	1,186	1,012	592	574	446	9,425
Segmental operating income	4,361	2,349	1,284	1,676	1,160	1,268	1,039	67	13,204
	3,579	2,070	1,245	1,542	922	762	670	12	10,802
Unallocable expenses									1,611
									1,419
Other income, net (Refer to note 2.16)									1,046
									1,362
Finance cost									96
									82
Profit before tax									12,543
									10,663
Income tax expense									3,412
									2,824
Net Profit									9,131
									7,839
Depreciation and amortization expense									1,611
									1,408
Non-cash expenses other than depreciation and amortization									–
									11

⁽¹⁾ Financial Services include enterprises in Financial Services and Insurance

⁽²⁾ Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

⁽³⁾ Communication includes enterprises in Communication, Telecom OEM and Media

⁽⁴⁾ Life Sciences includes enterprises in Life sciences and Health care

⁽⁵⁾ Others include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

Significant clients

No client individually accounted for more than 10% of the revenues in the three and six months ended September 30, 2020 and September 30, 2019, respectively.

2.23 BUSINESS COMBINATIONS

Accounting policy

Business combinations have been accounted for using the acquisition method under the provisions of Ind AS 103, Business Combinations.

The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Group. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Contingent consideration is remeasured at fair value at each reporting date and changes in the fair value of the contingent consideration are recognized in the Statement of Profit and Loss.

The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity of subsidiaries.

The payments related to options issued by the Group over the non-controlling interests in its subsidiaries are accounted as financial liabilities and initially recognized at the estimated present value of gross obligations. Such options are subsequently measured at fair value in order to reflect the amount payable under the option at the date at which it becomes exercisable. In the event that the option expires unexercised, the liability is derecognised.

Business combinations between entities under common control is accounted for at carrying value of the assets and liabilities in the Group's consolidated financial statements.

Transaction costs that the Group incurs in connection with a business combination such as finder’s fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

Kaleidoscope Animations, Inc.

On October 9, 2020, Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) acquired 100% of voting interests in Kaleidoscope Animations, Inc. a US based Product Design and Development firm, for a total consideration of up to $ 42 million (approximately 310 crore), comprising of cash consideration of $ 29 million (approximately 214 crore), contingent consideration of upto $ 12 million (approximately 91 crore) and retention payouts of upto $ 1 million (approximately 5 crore), payable to the employees of Kaleidoscope Animations, Inc over the next three years, subject to their continuous employment with the group along with achievement of set targets for respective years. The payment of contingent consideration to sellers of Kaleidoscope Animations, Inc is dependent upon the achievement of certain financial targets by Kaleidoscope Animations, Inc.

As of October 14, 2020 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of Kaleidoscope Animations, Inc, including allocation of purchase consideration to identifiable assets and liabilities.

GuideVision, s.r.o

On October 1, 2020, Infy Consulting Company Limited (Wholly-owned subsidiary of Infosys Consulting Holding AG) acquired 100% of voting interests in GuideVision s.r.o , a ServiceNow Elite Partners in Europe for a total consideration of upto Euro 30 million (approximately 259 crore), comprising of cash consideration of Euro 20 million (approximately 173 crore), contingent consideration of upto Euro 4 million (approximately 36 crore) and retention payouts of upto Euro 6 million (approximately 50 crore), payable to the employees of GuideVision s.r.o over the next three years, subject to their continuous employment with the group. The payment of contingent consideration to sellers of GuideVision s.r.o is dependent upon the achievement of certain financial targets by GuideVision s.r.o.

As of October 14, 2020 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of GuideVision s.r.o, including allocation of purchase consideration to identifiable assets and liabilities.

Business transfer- Kallidus Inc. and Skava Systems Private Limited

On October 11, 2019, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with its wholly-owned subsidiaries, Kallidus Inc. and Skava Systems Private Limited (together referred to as “Skava”), to transfer the business of Skava to Infosys Limited, subject to securing the requisite regulatory approvals for a consideration based on an independent valuation. Subsequently on August 15, 2020 , the company entered into a business transfer agreement to transfer the business of Kallidus Inc. and Skava Systems Private Limited for a consideration of 171 crore and 66 crore respectively.

The transaction was between a holding company and a wholly owned subsidiary and therefore was accounted for at carrying values and did not have any impact on the consolidated financial statements.

Proposed Acquisition

Blue Acorn iCi

On October 8, 2020 Infosys Nova Holdings LLC (a wholly owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire Blue Acorn iCi, a US based Adobe platinum partner and a digital customer experience company, for a total consideration of upto $125 million (approximately 922 crore) including bonuses, subject to fulfillment of customary closing conditions.

2.24 FUNCTION WISE CLASSIFICATION OF CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS 

(In crore)

Particulars	Note no	Three months ended September 30,		Six months ended September 30,
		2020	2019	2020	2019
Revenue from operations	2.15	24,570	22,629	48,234	44,432
Cost of Sales		15,771	15,079	31,473	29,858
Gross profit		8,799	7,550	16,761	14,574
Operating expenses
Selling and marketing expenses		1,136	1,162	2,283	2,336
General and administration expenses		1,435	1,476	2,885	2,855
Total operating expenses		2,571	2,638	5,168	5,191
Operating profit		6,228	4,912	11,593	9,383
Other income, net	2.16	570	626	1,046	1,362
Finance cost		48	42	96	82
Profit before tax		6,750	5,496	12,543	10,663
Tax expense:
Current tax	2.14	1,763	1,488	3,084	2,947
Deferred tax	2.14	129	(29)	328	(123)
Profit for the period		4,858	4,037	9,131	7,839
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset		7	(22)	154	(39)
Equity instruments through other comprehensive income, net		(5)	2	(6)	5
		2	(20)	148	(34)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		27	17	21	(7)
Exchange differences on translation of foreign operations, net		21	(35)	185	(10)
Fair value changes on investments, net		(45)	2	9	18
		3	(16)	215	1
Total other comprehensive income / (loss), net of tax		5	(36)	363	(33)
Total comprehensive income for the period		4,863	4,001	9,494	7,806
Profit attributable to:
Owners of the Company		4,845	4,019	9,078	7,817
Non-controlling interests		13	18	53	22
		4,858	4,037	9,131	7,839
Total comprehensive income attributable to:
Owners of the Company		4,847	3,984	9,434	7,782
Non-controlling interests		16	17	60	24
		4,863	4,001	9,494	7,806

for and on behalf of the Board of Directors of Infosys Limited
Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	U.B. Pravin Rao Chief Operating Officer and Whole-time Director
D. Sundaram Director	Nilanjan Roy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru October 14, 2020