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 June 30, 2023

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, Bengaluru - 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 ended June 30, 2023.

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 July 20, 2023, We announced our results of operations for the quarter ended June 30, 2023. 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 July 20, 2023, 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 website, www.infosys.com, a fact sheet that provides details on our profit and loss account summary for the quarters ended June 30, 2023 and 2022 (as per IFRS); revenue by client geography offering, business segment, revenue by offering; 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 July 20, 2023, 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 ended June 30, 2023, 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 website, 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 the Auditors Report; Audited Interim Ind AS Condensed Consolidated Financial Statements and the Auditors Report for the quarter June 30, 2023. 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
Date: July 25, 2023	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 July 20, 2023 press conference
99.4	Fact Sheet regarding Registrant's Statement of Profit and Loss for the quarters ended June 30, 2023 and 2022 (as per IFRS); revenue by Business Segment, Client Geography, information regarding Client Concentration; Employee Information and Metrics and Consolidated IT Services Information
99.5	Transcript of July 20, 2023 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 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 ended June 30, 2023 in compliance with Indian Accounting Standards (INDAS) and the Auditors Report thereon
99.10	Audited Interim Condensed Consolidated Financial Statements of Infosys Limited and its subsidiaries in compliance with INDAS for the quarter ended June 30, 2023 and the Auditors Report thereon

EX-99.1 CHARTER

Exhibit 99.1

IFRS USD Press Release

Solid Q1 year on year revenue growth of 4.2% at 20.8% operating margins

Strong large deal closures and robust deal pipeline position us well for future growth

Bengaluru, India – July 20, 2023: Infosys (NSE, BSE, NYSE:INFY), a global leader in next-generation digital services and consulting, delivered $4,617 million in Q1 revenues with year on year growth of 4.2% and sequential growth of 1.0% in constant currency. Large deal TCV for the quarter was at $2.3 billion, with net new of 56.1%. Operating margin for the quarter was stable at 20.8%. ROE improved 180 bps to 32.8%. Attrition declined further to 17.3%. FY24 revenue guidance revised to 1.0%-3.5% and operating margin guidance retained at 20%-22%.

“We had a solid Q1 with a growth of 4.2% and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” said Salil Parekh, CEO and MD. “We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team“, he added.

Guidance for FY24:

· Revenue growth of 1.0%-3.5% in constant currency

· Operating margin of 20%-22%

1. Key highlights:

For the quarter ended June 30, 2023

·Revenues in CC terms grew by 4.2% YoY and by 1.0% QoQ

·Reported revenues at $4,617 million, growth of 3.9% YoY

·Operating margin at 20.8%, growth of 0.8% YoY and decline of 0.2% QoQ

·Basic EPS at $0.17, growth of 6.6% YoY

·FCF at $699 million, growth of 6.6% YoY; FCF conversion at 96.6% of net profit

“Q1 operating margins were resilient in an uncertain macro environment on the back of our continued focus on cost optimization. Company’s rigorous operational discipline including improved productivity measures and higher utilization helped margins for the quarter” said Nilanjan Roy, CFO. “Free Cash conversion was robust at 96.6% of net profits. Execution of strong capital allocation policy resulted in higher payouts to investors and improved ROE to 32.8%” he added.

2. Client wins & Testimonials

· Danske Bank recently signed a strategic collaboration with Infosys to accelerate the bank’s digital transformation initiatives with speed and scale. Frans Woelders, Chief Operating Officer, Danske Bank, said, “Our Forward ’28 strategy sets clear ambitions for Danske Bank to be a leading bank in a digital age. This is backed by significant investments in digitalisation and technology, including plans to further develop our customer-facing digital solutions, and modernising our technology infrastructure to enable even better customer experiences and drive operational efficiency. We have a strong starting point, and we want to further accelerate our digital and technology transformation. We have conducted a thorough process to find a partner that can help us achieve that. Infosys has the tools, experience, and expertise to support us in accelerating our transformation using cloud and AI technologies. Given Infosys’ global presence and scale, this collaboration will also give us access to wider talent pools and capabilities.”

· bp recently signed an MoU with Infosys to demonstrate their intent for Infosys to be bp’s primary partner for end-to-end application services. Leigh-Ann Russell, EVP, Innovation & Engineering, bp, said, “We are delighted to further develop our relationship with Infosys to help accelerate our digital transformation and scale growth through tech-enabled operations. Together, we look forward to delivering innovative solutions that meet the evolving needs of our customers and drive growth for the future."

· Infosys and Aramco signed a Memorandum of Understanding (MoU) to bring new insights to HR data and analytics, scale the use of automation tools, and enhance employee experience through artificial intelligence (AI) technologies. Faisal A. Al-Hajji, SVP Human Resources, Aramco, said, “At Aramco, we are constantly looking to improve employee experience and make our company the best place to work. This collaboration will allow us to explore ways to further upgrade our focus on customer-centricity and transform our digital HR offerings.”

· Infosys recently launched Infosys Topaz - an AI-first set of services, solutions and platforms using generative AI technologies. Hemanth Adapa, Product Owner, Predictive Analytics at British Telecom, said, “As part of our continuous efforts to deliver value for our clients, at British Telecom, we engaged with Infosys Topaz to offer AI-powered predictive analytics for various domains such as network performance, sustainability, and security. This has been recognized and appreciated by our clients who can now amplify their mission-critical services with never-before reliability.”

· Infosys and Walmart Commerce Technologies collaborated to deliver scalable omni-channel solutions to retailers. Sunil Kumar, Vice President and General Manager of Walmart Commerce Technologies, said, “Infosys is a trusted partner to businesses that are navigating their digital transformation. We are excited to have Infosys help streamline implementation of the Store Assist app and to serve as a trusted system integration team for our customers.”

· Infosys collaborated with vidaXL as their India IT Partner to set up their business technology support in a scalable and cost-effective way. Ted van Dongen, CIO, vidaXL, said, “vidaXL needed a partner to help them with their growth strategy, with a professional agile approach, and a very broad range technology expertise. In Infosys, vidaXL has found a partner that proved to be dedicated in delivering this by transitioning 8 agile development teams in less than 4 months. This collaboration establishes a mechanism to steer our corporation significantly on every aspect of the technology stack.”

· Infosys extended its collaboration with LexisNexis to provide end-to-end information services across their range of content, enterprise, and product applications. Jeff Reihl, Executive Vice President & Chief Technology Officer, LexisNexis, said, “Our longstanding association with the highly experienced Infosys team has shown excellent results. We at LexisNexis aim to deliver the best content, enterprise, and product application services in the market and we firmly believe that by leveraging Infosys for its downstream, discretionary, and strategic programs, will be in our best interest and we are excited to further expand our relationship with Infosys.”

· Infosys and ATP collaborated to launch a digital Carbon Tracker to enable ATP players to track and mitigate their carbon emissions from travel on Tour. Massimo Calvelli, Chief Executive Officer, ATP, said, “Tennis is on a mission to Net Zero and like many sports, our travel footprint is our biggest challenge. ATP’s new Carbon Tracker makes it simple for players to join that journey, mitigating their impact today and inspiring greener choices tomorrow. This is a story of addressing difficult problems through innovation, and we would thank our partners Infosys for their collaboration and commitment to the project. The potential of this app is massive and we’re just getting started.”

· Keytrade Bank selected Infosys Finacle as the preferred partner for the modernization of its core banking system. Thierry Ternier, CEO, Keytrade Bank, said, “As the sponsor of the project, I am a strong believer in the program because it will strengthen the foundations of our company and make us future-proof to tackle the challenges of a fast-moving environment. Our ultimate goal is to create value and satisfaction for our customers and employees. I am convinced that this program will be a major enabler in reaching those strategic goals. We have chosen Infosys Finacle as our partner for the program because of their worldwide expertise, implementation plan, and price offering.”

· Infosys Finacle helped successfully transform XacBank’s technology landscape with Finacle Digital Banking Suite enabling a robust digital foundation for the bank to achieve its growth strategy. Tsevegjav Gumenjav, Chief Executive Officer, XacBank, said, “We are happy at the successful completion of this much-awaited digital transformation, drawing us closer to our vision to be the preferred universal bank in Mongolia. In this digital-first era, the Finacle platform provides us with the right platform to offer custom offerings for our customers in Mongolia across segments, serving their financial needs in a secure manner. We look forward to scaling new heights with world-class banking and contribute to the larger economic development of Mongolia.”

3. Recognitions

· Infosys has been recognized in BrandZ's prestigious Top 100 Most Valuable Global Brands list, ranked at #66

· Recognized as one of India's Best Employers Among Nation Builders 2023 by the Great Place to Work™ Institute

· Won PeopleFirst HR Award under two categories, ‘Leading Practices in HR Risk Management’ and ‘Leading Practices in HR Business Partnership’

· Recognized as one of the ‘Most Honored’ companies, receiving multiple awards at the 2023 All-Asia Executive Team Rankings from Institutional Investor

· Won the 2023 Microsoft US Partner of the Year Award in the Dynamics 365 Services category

· Awarded the Nasscom ER&D Spotlight Award in the ‘Concept to Engineering Leadership’ category for the Market First Innovation – Digital transformation of B2B sales with Engineering configurator as a core

· Recognized as ServiceNow Telco Partner of the Year 2023

· Recognized as HPE Global System Integrator of the Year 2023 and HPE System Integrator of the Year 2023 for Asia Pacific and Central Europe

· Infosys Finacle won the MEA Finance ‘Best Composable Banking Technology Solution Provider’ award at the MEA Finance Banking Technology Summit 2023

· Infosys BPM won the SS&C Blue Prism Partner Excellence Awards 2023 across 3 categories: ‘Client Business Impact – FSI (Global)’, ‘Client Business Impact – FSI (APAC)’, and ‘Client Business Impact – Telco (APAC)’

· Recognized as a leader in Low-Code Application Development Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in Microsoft Dynamics 365 Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in Application Automation Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in 5G Engineering Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in Wealth and Asset Management PEAK Matrix® Assessment 2023 by Everest

· Rated as a leader in Adobe Experience Cloud Services NEAT 2023 by NelsonHall

· Rated as a leader in SAP Cloud Migration Services NEAT 2023 by NelsonHall

· Rated as a leader in Quality Engineering NEAT 2023 by NelsonHall

· Positioned as a leader in HFS Horizons: ServiceNow Services, 2023

· Positioned as a leader in HFS Horizons: Data modernization services, 2023

· Positioned as a leader in IDC MarketScape: Worldwide Retail Commerce Platform Service Providers 2023 Vendor Assessment

· Positioned as a leader in IDC MarketScape Worldwide Artificial Intelligence Services 2023 Vendor Assessment

· Positioned as a leader in IDC MarketScape: Asia/Pacific Oracle Application Implementation Services 2023 Vendor Assessment

· Infosys recognized as a leader in Digital Engineering Services 2023 ISG Provider Lens™ study in US and Europe

· Infosys recognized as a leader in Microsoft Cloud Ecosystem 2023 ISG Provider Lens™ study in US, UK, Singapore and Malaysia, Australia and Germany

· Infosys rated as a leader in SAP Ecosystem ISG Provider Lens™ study in US, UK, Nordics, Germany and Brazil

· Infosys recognized as #1 Top IT Service Providers in the Nordics in Whitelane Research and PA Consulting Sourcing Study 2023

· Infosys rated as a leader in Avasant’s Multisourcing Service Integration 2022–2023 Radarview™

· Infosys rated as a leader in Avasant’s Financial Services Digital Services 2023–2024 Radarview™

· Infosys rated as a leader in Avasant’s Media and Entertainment Digital Services 2023–2024 Radarview™

About Infosys

Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. We enable clients in more than 56 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace. Visit www.infosys.com to see how Infosys (NSE, BSE, NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance 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 or outcomes 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 the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, and our corporate actions including acquisitions. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. 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	Harini Babu +1 469 996 3516 Harini_Babu@infosys.com

Infosys Limited and subsidiaries

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

(Dollars in millions)

	June 30, 2023	March 31, 2023
ASSETS
Current assets
Cash and cash equivalents	1,501	1,481
Earmarked bank balance for dividend(3)	885	-
Current investments	675	841
Trade receivables	3,191	3,094
Unbilled revenue	1,783	1,861
Other Current assets	1,408	1,349
Total current assets	9,443	8,626
Non-current assets
Property, plant and equipment and Right-of-use assets	2,497	2,516
Goodwill and other Intangible assets	1,082	1,095
Non-current investments	1,462	1,530
Unbilled revenue	168	176
Other non-current assets	1,355	1,369
Total non-current assets	6,564	6,686
Total assets	16,007	15,312
LIABILITIES AND EQUITY
Current liabilities
Trade payables	458	470
Unearned revenue	894	872
Employee benefit obligations	310	292
Other current liabilities and provisions	4,005	3,135
Total current liabilities	5,667	4,769
Non-current liabilities
Lease liabilities	812	859
Other non-current liabilities	407	460
Total non-current liabilities	1,219	1,319
Total liabilities	6,886	6,088
Total equity attributable to equity holders of the company	9,069	9,172
Non-controlling interests	52	52
Total equity	9,121	9,224
Total liabilities and equity	16,007	15,312

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

(Dollars in millions except per equity share data)

	3 months ended June 30, 2023	3 months ended June 30, 2022
Revenues	4,617	4,444
Cost of sales	3,211	3,144
Gross profit	1,406	1,300
Operating expenses:
Selling and marketing expenses	217	193
Administrative expenses	228	219
Total operating expenses	445	412
Operating profit	961	888
Other income, net (4)	57	80
Profit before income taxes	1,018	968
Income tax expense	294	279
Net profit (before minority interest)	724	689
Net profit (after minority interest)	724	689
Basic EPS ($)	0.17	0.16
Diluted EPS ($)	0.17	0.16

NOTES:

1. The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter ended June 30, 2023, which have been taken on record at the Board meeting held on July 20, 2023.

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

3. Represents bank balance earmarked for final dividend. Payment date for dividend was July 3, 2023

4. Other income is net of Finance Cost.

EX-99.2 BYLAWS

Exhibit 99.2

IFRS INR Press Release

Solid Q1 year on year revenue growth of 4.2% at 20.8% operating margins

Strong large deal closures and robust deal pipeline position us well for future growth

Bengaluru, India – July 20, 2023: Infosys (NSE, BSE, NYSE:INFY), a global leader in next-generation digital services and consulting, delivered $4,617 million in Q1 revenues with year on year growth of 4.2% and sequential growth of 1.0% in constant currency. Large deal TCV for the quarter was at $2.3 billion, with net new of 56.1%. Operating margin for the quarter was stable at 20.8%. ROE improved 180 bps to 32.8%. Attrition declined further to 17.3%. FY24 revenue guidance revised to 1.0%-3.5% and operating margin guidance retained at 20%-22%.

“We had a solid Q1 with a growth of 4.2% and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” said Salil Parekh, CEO and MD. “We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team“, he added.

Guidance for FY24:

· Revenue growth of 1.0%-3.5% in constant currency

· Operating margin of 20%-22%

1. Key highlights:

For the quarter ended June 30, 2023

·Revenues in CC terms grew by 4.2% YoY and by 1.0% QoQ

·Reported revenues at 37,933 crore, growth of 10.0% YoY

·Operating margin at 20.8%, growth of 0.7% YoY and decline of 0.2% QoQ

·Basic EPS at 14.37, growth of 12.4% YoY

·FCF at 5,749 crore, growth of 12.6% YoY; FCF conversion at 96.7% of net profit

“Q1 operating margins were resilient in an uncertain macro environment on the back of our continued focus on cost optimization. Company’s rigorous operational discipline including improved productivity measures and higher utilization helped margins for the quarter” said Nilanjan Roy, CFO. “Free Cash conversion was robust at 96.6% of net profits. Execution of strong capital allocation policy resulted in higher payouts to investors and improved ROE to 32.8%” he added.

2. Client wins & Testimonials

· Danske Bank recently signed a strategic collaboration with Infosys to accelerate the bank’s digital transformation initiatives with speed and scale. Frans Woelders, Chief Operating Officer, Danske Bank, said, “Our Forward ’28 strategy sets clear ambitions for Danske Bank to be a leading bank in a digital age. This is backed by significant investments in digitalisation and technology, including plans to further develop our customer-facing digital solutions, and modernising our technology infrastructure to enable even better customer experiences and drive operational efficiency. We have a strong starting point, and we want to further accelerate our digital and technology transformation. We have conducted a thorough process to find a partner that can help us achieve that. Infosys has the tools, experience, and expertise to support us in accelerating our transformation using cloud and AI technologies. Given Infosys’ global presence and scale, this collaboration will also give us access to wider talent pools and capabilities.”

· bp recently signed an MoU with Infosys to demonstrate their intent for Infosys to be bp’s primary partner for end-to-end application services. Leigh-Ann Russell, EVP, Innovation & Engineering, bp, said, “We are delighted to further develop our relationship with Infosys to help accelerate our digital transformation and scale growth through tech-enabled operations. Together, we look forward to delivering innovative solutions that meet the evolving needs of our customers and drive growth for the future."

· Infosys and Aramco signed a Memorandum of Understanding (MoU) to bring new insights to HR data and analytics, scale the use of automation tools, and enhance employee experience through artificial intelligence (AI) technologies. Faisal A. Al-Hajji, SVP Human Resources, Aramco, said, “At Aramco, we are constantly looking to improve employee experience and make our company the best place to work. This collaboration will allow us to explore ways to further upgrade our focus on customer-centricity and transform our digital HR offerings.”

· Infosys recently launched Infosys Topaz - an AI-first set of services, solutions and platforms using generative AI technologies. Hemanth Adapa, Product Owner, Predictive Analytics at British Telecom, said, “As part of our continuous efforts to deliver value for our clients, at British Telecom, we engaged with Infosys Topaz to offer AI-powered predictive analytics for various domains such as network performance, sustainability, and security. This has been recognized and appreciated by our clients who can now amplify their mission-critical services with never-before reliability.”

· Infosys and Walmart Commerce Technologies collaborated to deliver scalable omni-channel solutions to retailers. Sunil Kumar, Vice President and General Manager of Walmart Commerce Technologies, said, “Infosys is a trusted partner to businesses that are navigating their digital transformation. We are excited to have Infosys help streamline implementation of the Store Assist app and to serve as a trusted system integration team for our customers.”

· Infosys collaborated with vidaXL as their India IT Partner to set up their business technology support in a scalable and cost-effective way. Ted van Dongen, CIO, vidaXL, said, “vidaXL needed a partner to help them with their growth strategy, with a professional agile approach, and a very broad range technology expertise. In Infosys, vidaXL has found a partner that proved to be dedicated in delivering this by transitioning 8 agile development teams in less than 4 months. This collaboration establishes a mechanism to steer our corporation significantly on every aspect of the technology stack.”

· Infosys extended its collaboration with LexisNexis to provide end-to-end information services across their range of content, enterprise, and product applications. Jeff Reihl, Executive Vice President & Chief Technology Officer, LexisNexis, said, “Our longstanding association with the highly experienced Infosys team has shown excellent results. We at LexisNexis aim to deliver the best content, enterprise, and product application services in the market and we firmly believe that by leveraging Infosys for its downstream, discretionary, and strategic programs, will be in our best interest and we are excited to further expand our relationship with Infosys.”

· Infosys and ATP collaborated to launch a digital Carbon Tracker to enable ATP players to track and mitigate their carbon emissions from travel on Tour. Massimo Calvelli, Chief Executive Officer, ATP, said, “Tennis is on a mission to Net Zero and like many sports, our travel footprint is our biggest challenge. ATP’s new Carbon Tracker makes it simple for players to join that journey, mitigating their impact today and inspiring greener choices tomorrow. This is a story of addressing difficult problems through innovation, and we would thank our partners Infosys for their collaboration and commitment to the project. The potential of this app is massive and we’re just getting started.”

· Keytrade Bank selected Infosys Finacle as the preferred partner for the modernization of its core banking system. Thierry Ternier, CEO, Keytrade Bank, said, “As the sponsor of the project, I am a strong believer in the program because it will strengthen the foundations of our company and make us future-proof to tackle the challenges of a fast-moving environment. Our ultimate goal is to create value and satisfaction for our customers and employees. I am convinced that this program will be a major enabler in reaching those strategic goals. We have chosen Infosys Finacle as our partner for the program because of their worldwide expertise, implementation plan, and price offering.”

· Infosys Finacle helped successfully transform XacBank’s technology landscape with Finacle Digital Banking Suite enabling a robust digital foundation for the bank to achieve its growth strategy. Tsevegjav Gumenjav, Chief Executive Officer, XacBank, said, “We are happy at the successful completion of this much-awaited digital transformation, drawing us closer to our vision to be the preferred universal bank in Mongolia. In this digital-first era, the Finacle platform provides us with the right platform to offer custom offerings for our customers in Mongolia across segments, serving their financial needs in a secure manner. We look forward to scaling new heights with world-class banking and contribute to the larger economic development of Mongolia.”

3. Recognitions

· Infosys has been recognized in BrandZ's prestigious Top 100 Most Valuable Global Brands list, ranked at #66

· Recognized as one of India's Best Employers Among Nation Builders 2023 by the Great Place to Work™ Institute

· Won PeopleFirst HR Award under two categories, ‘Leading Practices in HR Risk Management’ and ‘Leading Practices in HR Business Partnership’

· Recognized as one of the ‘Most Honored’ companies, receiving multiple awards at the 2023 All-Asia Executive Team Rankings from Institutional Investor

· Won the 2023 Microsoft US Partner of the Year Award in the Dynamics 365 Services category

· Awarded the Nasscom ER&D Spotlight Award in the ‘Concept to Engineering Leadership’ category for the Market First Innovation – Digital transformation of B2B sales with Engineering configurator as a core

· Recognized as ServiceNow Telco Partner of the Year 2023

· Recognized as HPE Global System Integrator of the Year 2023 and HPE System Integrator of the Year 2023 for Asia Pacific and Central Europe

· Infosys Finacle won the MEA Finance ‘Best Composable Banking Technology Solution Provider’ award at the MEA Finance Banking Technology Summit 2023

· Infosys BPM won the SS&C Blue Prism Partner Excellence Awards 2023 across 3 categories: ‘Client Business Impact – FSI (Global)’, ‘Client Business Impact – FSI (APAC)’, and ‘Client Business Impact – Telco (APAC)’

· Recognized as a leader in Low-Code Application Development Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in Microsoft Dynamics 365 Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in Application Automation Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in 5G Engineering Services PEAK Matrix® Assessment 2023 by Everest

· Recognized as a leader in Wealth and Asset Management PEAK Matrix® Assessment 2023 by Everest

· Rated as a leader in Adobe Experience Cloud Services NEAT 2023 by NelsonHall

· Rated as a leader in SAP Cloud Migration Services NEAT 2023 by NelsonHall

· Rated as a leader in Quality Engineering NEAT 2023 by NelsonHall

· Positioned as a leader in HFS Horizons: ServiceNow Services, 2023

· Positioned as a leader in HFS Horizons: Data modernization services, 2023

· Positioned as a leader in IDC MarketScape: Worldwide Retail Commerce Platform Service Providers 2023 Vendor Assessment

· Positioned as a leader in IDC MarketScape Worldwide Artificial Intelligence Services 2023 Vendor Assessment

· Positioned as a leader in IDC MarketScape: Asia/Pacific Oracle Application Implementation Services 2023 Vendor Assessment

· Infosys recognized as a leader in Digital Engineering Services 2023 ISG Provider Lens™ study in US and Europe

· Infosys recognized as a leader in Microsoft Cloud Ecosystem 2023 ISG Provider Lens™ study in US, UK, Singapore and Malaysia, Australia and Germany

· Infosys rated as a leader in SAP Ecosystem ISG Provider Lens™ study in US, UK, Nordics, Germany and Brazil

· Infosys recognized as #1 Top IT Service Providers in the Nordics in Whitelane Research and PA Consulting Sourcing Study 2023

· Infosys rated as a leader in Avasant’s Multisourcing Service Integration 2022–2023 Radarview™

· Infosys rated as a leader in Avasant’s Financial Services Digital Services 2023–2024 Radarview™

· Infosys rated as a leader in Avasant’s Media and Entertainment Digital Services 2023–2024 Radarview™

About Infosys

Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. We enable clients in more than 56 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace. Visit www.infosys.com to see how Infosys (NSE, BSE, NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance 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 or outcomes 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 the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, and our corporate actions including acquisitions. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. 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	Harini Babu +1 469 996 3516 Harini_Babu@infosys.com

Infosys Limited and subsidiaries

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

(In crore)

	June 30, 2023	March 31, 2023
ASSETS
Current assets
Cash and cash equivalents	12,310	12,173
Earmarked bank balance for dividend(3)	7,262	-
Current investments	5,536	6,909
Trade receivables	26,183	25,424
Unbilled revenue	14,628	15,289
Other Current assets	11,555	11,086
Total current assets	77,474	70,881
Non-current assets
Property, plant and equipment and Right-of-use assets	20,487	20,675
Goodwill and other Intangible assets	8,876	8,997
Non-current investments	11,991	12,569
Unbilled revenue	1,379	1,449
Other non-current assets	11,115	11,245
Total non-current assets	53,848	54,935
Total assets	131,322	125,816
LIABILITIES AND EQUITY
Current liabilities
Trade payables	3,759	3,865
Unearned revenue	7,330	7,163
Employee benefit obligations	2,543	2,399
Other current liabilities and provisions	32,863	25,759
Total current liabilities	46,495	39,186
Non-current liabilities
Lease liabilities	6,659	7,057
Other non-current liabilities	3,340	3,778
Total non-current liabilities	9,999	10,835
Total liabilities	56,494	50,021
Total equity attributable to equity holders of the company	74,443	75,407
Non-controlling interests	385	388
Total equity	74,828	75,795
Total liabilities and equity	131,322	125,816

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

(In crore except per equity share data)

	3 months ended June 30, 2023	3 months ended June 30, 2022
Revenues	37,933	34,470
Cost of sales	26,382	24,369
Gross profit	11,551	10,101
Operating expenses:
Selling and marketing expenses	1,783	1,493
Administrative expenses	1,877	1,694
Total operating expenses	3,660	3,187
Operating profit	7,891	6,914
Other income, net (4)	471	620
Profit before income taxes	8,362	7,534
Income tax expense	2,417	2,172
Net profit (before minority interest)	5,945	5,362
Net profit (after minority interest)	5,945	5,360
Basic EPS ()	14.37	12.78
Diluted EPS ()	14.35	12.76

NOTES:

1. The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter ended June 30, 2023, which have been taken on record at the Board meeting held on July 20, 2023.

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

3. Represents bank balance earmarked for final dividend. Payment date for dividend was July 3, 2023

4. Other income is net of Finance Cost.

EX-99.3 VOTING TRUST

Exhibit 99.3

Press Conference

Infosys Limited
Q1 FY24 Media Conference Call

July 20, 2023

CORPORATE PARTICIPANTS:

Salil Parekh

Chief Executive Officer & Managing Director

Nilanjan Roy

Chief Financial Officer

Rishi Basu (Emcee)
Corporate Communications

JOURNALISTS

Ritu Singh

CNBC TV18

Haripriya Sureban

The Hindu BusinessLine

Shilpa Phadnis

The Times of India

Chandra Ranganathan and Haripriya Suresh

Moneycontrol

Sai Ishwarbharath

The Economic Times

Ayushman Baruah

Business Standard

Uma Kannan

The New Indian Express

Sameer Ranjan Bakshi

Financial Express

Varun Vyas

Reuters

Shraddha Goled

Mint

Reshab Shaw

Informist

Rishi Basu

On behalf of Infosys, I would like to welcome all of you. We request one question, or let us say, restricted number of questions from each media house to accommodate everyone over the next hour. And with that, let me invite our Chief Executive Officer, Mr. Salil Parekh, for his opening remarks. Over to you, Salil. 

Salil Parekh

Thanks Rishi and good evening, good afternoon, welcome to everyone that is here. It is always wonderful to have all of you here with us on the campus. I am sure you have seen there are a lot more people on the campus as well, and we are also benefiting from that.

We have had a very strong Q1. Our Q1 growth was solid at 4.2% year-on-year, 1% Q-on-Q in constant currency. We had 20% growth in manufacturing, 13% in life sciences. Our European business grew by 10%. Our operating margin for the quarter was strong at 20.8%.

Our large deals value for Q1 was at $2.3 bn - 56% of this was net new. This included one mega deal win. We also announced a mega deal with a value of $2 bn after the close of Q1, but before our results. With strong large deal and mega deal wins, we are building well for the future.

We are delighted that Topaz, our Generative AI platform is resonating well with our clients. We are working on 80 Generative AI projects for our clients at this time. The work we are doing, covers large language models for software development, for text, document, voice, and video.

Internally, we have developed Generative AI tools based on open-source model of Generative AI platforms that are focused on software development. We have trained 40,000 employees in this area, and we see Generative AI and Topaz being transformational for all of our clients.

In the short term, we see some clients stopping or slowing down transformation programs and discretionary work. This is especially so in financial services, in mortgages, asset management, investment banking, payments, and in telecom. We also see some impact in hi-tech industry and in parts of retail.

Even as we have won two mega deals recently, we have a strong pipeline of large and mega deals. We see revenue from some of these and other large deals towards the later part of our financial year. Keeping that in mind, we are changing our revenue growth guidance for this financial year to growth of between 1% to 3.5% in constant currency.

We have launched a broad comprehensive margin expansion program. The program will work across five areas: pyramid efficiency, automation, improvements in critical portfolios, reducing indirect costs, and communicating and deriving value across our portfolio.

We have an ambition to improve our operating margins in the future periods. Our operating margin guidance for this financial year remains unchanged at between 20% and 22%.

With that, let us open it up for questions. Rishi.

Rishi Basu

Thank you, Salil. We will now open the floor for questions. Joining Salil is Mr. Nilanjan Roy, Chief Financial Officer, Infosys. With that, we have the first question from Ritu Singh from CNBC TV18. 

Ritu Singh

Hi.. The first question, of course, is on your guidance cut. It was a steady quarter for Infosys, whether it is the constant currency growth, the mega deals that you have announced, couple in the quarter and after the quarter close. And your TCV is also higher than the previous quarter. What has so drastically changed in the last three months for you to cut your guidance from 4% - 7% to 1% - 3.5%, and given that top-line you are expecting lower now for the year, how are you confident of maintaining margins at 20% to 22% for the year? That is the first question.

And also, you know, your commentary from clients in terms of when you see, revival in your discretionary spends from whether it is BFSI, retail, hitech all these areas of concern that you have outlined. And your net employee reductions for the last couple of quarters, that has also been coming down. So, we wanted to understand what your hiring plans are? We understand you have already deferred pay hikes for some of the employees, if you could give us a sense on that? Thank you.

Salil Parekh

On the first point, on the revenue growth guidance, we have, as you rightly pointed out, had a good Q1. We have had good large and mega deals. We have also seen some of these deals, the signings and the start dates being delayed. With that, we see a lot of that revenue from that sort of large and mega deals towards the later part of the financial year. And through the quarter, we have seen volumes in some of our clients, in the industries that I shared, were impacted where they were reducing transformational projects or slowing down decision making. So, when we combined those two and we looked out for the full year, we saw that sort of a range in terms of the growth guidance and decided that we should change our growth guidance.

Rishi Basu

Thank you. We will try to come back to you.

Ritu Singh

That did not answer my question.

Salil Parekh

On the margin, we have an extremely strong discipline for our operating margin. We have put in place this expanded margin program that I was referring to. There are five elements of that program, each of them being driven to make sure we have efficiency. You have also seen utilization in Q1 go up, and we will continue to see that with all the focus we are putting into productivity. We are also looking at reducing, within those five elements, indirect spends, and cuts of that nature. So, we feel comfortable with our operating margin guidance. And our operating margin for Q1 at 20.8% was more towards the middle part of that range.

Ritu Singh

We have seen a reduction in the headcount for the last couple of quarters, keeping that in mind, what are your hiring plans for the year?

Salil Parekh

So, we still have a target for recruiting for the year, but we will see how that plays out with respect to, what are the changes in terms of the demand environment and what we do in terms of the attrition numbers that we are seeing. The attrition that we saw in the quarter was stable versus last quarter. Our trailing last 12-month attrition is down to around 17%. So, we see that driving some of the decisions on the recruitments.

Ritu Singh

What did you say, your target for hiring for the year was?

Salil Parekh

We have not given that target. We said, we will look at that based on what that demand environment looks like and how we see the rest of the year playing out.

Rishi Basu

Thanks, Ritu. The next question is from Haripriya Sureban from The Hindu Business Line.

Haripriya Sureban

What is it just for the transformational deals that you are seeing? Or has it translated to the cost takeout kind of - regular kind of deals as well? And given that AI, you have mentioned, you have many active projects, do you think that will sort of help you with margins as well, given that it is coming at a higher price point?

Salil Parekh

So, on the first, the decision making we see has slowed down across large programs. The way a lot of the transformation programs that are running today, they are funded from cost efficiency that comes through that program itself. So overall, the decision making sometimes is slowing down. And we are seeing the start dates in terms of where some of these programs are likely to start, more towards the back end of the year. And that is the reason we are seeing the revenue impact through the year.

On Generative AI, we are excited to be doing 80 projects. AI programs generally have a good margin. They have a lot of work which is focused on enhancing productivity, driving new areas of growth. But at this stage, it is a start. So, we will see when that scales up what the impact of margin is.

Rishi Basu

Thank you. The next question is from Shilpa Phadnis from The Times of India.

Shilpa Phadnis

Hello Sir. If you just look at your sequential revenue growth of 1%,

On an annualized basis, you could have grown at 4% and your guidance is sub-par. So, I just wanted to understand from you, are there deep client concerns that has, you know, made Infosys scale down the guidance significantly?

Salil Parekh

So, the discussion on the guidance is sort of similar. We have seen many of these large and mega deal wins really give us much more confidence in the way clients are working with us, especially on cost efficiency, even with financial services, when we announce on transformation and also consolidation. However, there have been delays in the start of some of these programs and the decision-making in those.

Coupled with that, we have also seen some of the volume during the quarter coming down because of clients in the industries that I mentioned, so financial services, asset management, payments, mortgages, telco, etc., in those specific industries, reducing their volume of work. And those two things have combined for reducing the guidance.

Shilpa Phadnis

I had one more question on your deal win. You spoke about the $2 bn deal win. Would that qualify as Infosys' biggest win that could potentially surpass Daimler?

Salil Parekh

So first, we are now sharing the deal value making sure that that is aligned to the regulations that are there. For the past, we have actually never shared the deal value. So, it will be difficult to compare that.

Shilpa Phadnis

And one last thing on the headcount, Sir. The sector itself is going through a lot of people challenges, you know, deferments of hikes and increments. So, if you can please clarify, what is the kind of hikes that you plan to roll out this year? Is it going to be deferred at all levels? We are getting to hear that senior level hikes are getting deferred. Can you please throw some light on that?

Nilanjan Roy

Yes. So actually, on the compensations, we are actively under consideration as we speak. So, I am sure, you will hear of it even before we finalize that, but it is under active consideration.

Rishi Basu

Thank you. The next question is from Chandra Ranganathan and Haripriya Suresh from Moneycontrol.com.

Chandra Ranganathan

Hi. Salil, you know, on the guidance, again, I wanted to understand what has changed in one quarter, 4%-7% to, you know, 1%-3.5%, any specific ramp-downs that you are seeing, what exactly is happening? And when we spoke to other managements, they say that, even though transformative programs, discretionary has slowed down, clients are still going in for short-term ROI projects. So, you know, is that something that you are looking at in the pipeline?

Secondly, Nilanjan, on the hikes, you said it is under consideration, by when do you expect to announce?

Haripriya Suresh

Hi, also wanted to get some perspective on your, you have seen some top level exits recently as well. Is that a matter of concern? And what are you doing to sort of stem top level attrition? Just wanted to understand that.

Salil Parekh

So, the first question on the guidance, I think the way we have seen it is, what we saw in the start of the quarter, we had a certain view of where our large and mega deals were in terms of, when they would close and when some of that work would start. Plus, what was the volume on the other programs, on the transformation programs, on the digital programs, on our overall volume of work across the portfolio.

What we saw is some of the start dates for the large deals, the mega deals were more later in the year. And the decision making, even as we have announced two of them, we still have some in our pipeline and we will see those over the course of the year as the pipeline evolves, and the volume which we saw the changes in for many discretionary projects or some of the transformation work.

Combining all of that is where we decided that this was the guidance in terms of the growth that we could see today in terms of the outlook. What we do see is, as we look towards the back end of the year, much more growth orientation, because some of these deals will at that stage start to deliver their revenue as well.

Chandra Ranganathan

Short term, are you seeing more, the nature of the deals becoming more short term, ROI, cost takeout?

Salil Parekh

Yes, so we are definitely seeing consolidation, cost efficiency, automation, but we are not seeing short term, meaning short projects like that. But those are the types of deals we are seeing which is more focused on the efficiency as opposed to transformation.

On the compensation, Nilanjan will come, I will just go with the third one first. We have seen, we have announced and rolled out our new leadership structure within the company. We have the great fortune of having incredible leadership talent within the company. And each of them, several of them are stepping up into new roles, driving the growth of this business.

As you can see from these two mega deals and other large deals, overall strength of the business, those people have stepped in, and my sense is Infosys will continue to produce those sort of leaders.

Nilanjan Roy

Yes, so I think, like I said, this is under consideration, so we will come back on the timing etc., but as of now, we are looking at it. We are looking at it as we speak.

Rishi Basu

Thank you. The next question is from Sai Ishwar from the Economic Times.

Sai Ishwarbharath

Hello, gentlemen. So, Salil, you were talking about the fall in volumes across the portfolio, right? So, what exactly is the reason for this fall in volume? Are clients fearing the recession and tightening their spends. And I just wanted to ask about the $100 mn-plus clients, it is falling by 2 sequentially. So, is that because of the ramp-down or is it because of projects getting completed? Thank you.

Salil Parekh

On the first one, the volumes, there mainly, it is clients in the industries that I was referencing, trying to maintain their cost discipline to reduce what they consider discretionary in the short term. So, we see many of these sorts of actions, for example, in mortgages and financial services, or we see that in telecom, or we see that in investment banking, or we see that in hitech. Those are the sorts of projects that typically have got less attention in Q1.

Sai Ishwarbharath

So, have you priced in, like you said a lot of these start dates are baked in the second half of the year, right? So, the guidance now has baked in all the expected revenues, or do we see any improvement in guidance?

Salil Parekh

What we have announced as our wins on large deals and mega deals that is already in the guidance we have given. As we go through the year, as there are more events in terms of wins, we will see what impact that has. There could be impacts which are positive there could be impacts, depending on some of things, gets delayed or not. But as of what we see today is what we have put into the guidance.

Nilanjan Roy

On those two, I mean, I cannot specifically comment on those two specific clients. But generally, as Salil said, the overall impact had a discretionary spend cut rather than any projects fundamentally getting over, that is the general theme.

Sai Ishwarbharath

So, they shifted one bucket lower?

Nilanjan Roy

Yes, they shifted. So, if you see above 50, that is not changed.

Rishi Basu

Thank you, Sai. The next question is from Ayushman Baruah from the Business Standard.

Ayushman Baruah

Hi. A lot has been spoken about AI, so keen to know, what percentage of deals are AI led? Do you see a component of AI in majority of the deals? Is AI integrated in most of the deal conversations that you have? That is first.

And secondly, on the pricing, are you seeing any pricing pressure as such? Thank you.

Salil Parekh

On pricing, Nilanjan will come back on that. On AI, first, we do not disclose the percentage of AI within our portfolio. However, AI or Generative AI is really transformative, and it is something that is changing everything that is going on. For example, we are doing work, which is related to software development, which is related to new code enhancements, migration, maintenance that covers the spectrum of the work that we do. And it is also related to other areas, for example, voice, video, text. These are areas where we do work, which is expanding the type of work we are doing. So, my sense is Generative AI is really going to transform everything that is happening within our portfolio. And Topaz that we have launched, being the leading platform or set of capabilities for Generative AI, I think will make a huge impact. Having 80 active projects is a massive step and it is moving with rapid speed.

Nilanjan Roy

The pricing environment remains quite stable. We have seen in some places, we are able to get some increases from cola, etc. Some cases isolated again, you get some discounts, but by and large it is a very stable environment.

Rishi Basu

Thank you. The next question is from Uma Kannan from The New Indian Express.

Uma Kannan

Good evening, gentlemen. You said, there are some softeners in verticals like BFSI, hitech. So, will this continue, or will it be better going forward in H2? And I also want to know, where are the headwinds coming from? And is it really paradoxical times for the IT industry as such?

Salil Parekh

So there, on the first part, what we look at is, what we see within our portfolio on a daily, weekly, monthly basis. It is, from our perspective, not something we look at as to when something will stop or not stop. We have within our portfolio, work that we can do on digital transformation, cloud, Generative AI, which are really growth drivers in the market. When clients or industries are looking at that we are ready with that, and we have that as one of our growth engines.

On the other hand, when clients are looking at cost, efficiency, consolidation, we also have deep capability in that, and that is some of these wins that you have seen, that we have announced, are reflective of that. So that is what will kick in, in the other side, but we do not have a specific view on when something will change in that.

Rishi Basu

Thank you. The next question is from Sameer Bakshi from the Financial Express.

Sameer Ranjan Bakshi

Hello, Sir. So, in these times, do you see challenges in winning smaller deals, when there is a cut in discretionary spend? And the second one is, when your peers are focusing on Europe, why are you not able to consolidate the European market? Your revenue has fallen by 2%. Thank you.

Salil Parekh

In Europe,I will come to that, on a constant currency basis, we are at a growth of 10%. So, Europe, in fact, you are absolutely right, is an area, we have a lot of attention and focus on. And in many of those markets, we are expanding quite well.

On the smaller projects, we do not see a difference. We are comfortable to win larger programs and smaller programs. It is just that there are some, which are more, not smaller but more discretionary from the perspective of a client, which is where we see some of the volume impact. On the larger mega deals, actually we are seeing very good traction in the two wins but also a good pipeline of large and mega deals.

Rishi Basu

Thank you. The next question is from Varun Vyas from Reuters News.

Varun Vyas

Hello. I was wondering if you could tell me, if the results missed the company's own expectations and when you might see some recovery? And could you explain how you classify large and mega deals? Like, is there a certain threshold above which a deal is considered that?

Salil Parekh

So, the way we see this, we find that when we look at things like Generative AI or if you look at the mega deals or the large deals, we see very good traction and momentum. When we see volumes on discretionary projects, we see some of those slowing down. So, in that sense it is not one size that fits all, we are seeing really good traction on the former. In terms of classification, it is $50 mn or larger that is classified within our system as large deal, and $500 mn or larger is a mega deal.

Varun Vyas

I was wondering, if you could also tell me what kind of variable pay you are paying.

Salil Parekh

So, we do not comment on that externally.

Rishi Basu

Thanks, Varun. The next question is from Shraddha Goled from the Mint.

Shraddha Goled

Hi, good evening. I wanted to ask about the Generative AI training that you mentioned. About 40,000 employees are being trained. So, what kind of training are they undergoing, more details on that? And also wanted to know, if any Generative AI apps or tools are being used internally for any of the operations or functions?

Salil Parekh

So, on the training, we are working with clients on both open-source Generative AI platforms and proprietary Generative AI platforms. These span from different tech companies. Our training internally is on many of these different platforms. Plus, we have built some tools on an open-source Generative AI platform that we are using internally for areas where we do software development. For example, in our products business, in some other areas of services, where we are doing new code development, enhancements or migration.

So for all of those we have built some tools on open-source platforms. So, the training is on those elements of those platforms. We have in fact, rolled out what we call ‘AI assistance’ for our employees where the employees are focused on delivery work, which is in the software development area, on the sales work, on training, on knowledge management, on different components of the work. So, for us, really, we are becoming an AI-first company, driving through the change internally as well as externally.

Shraddha Goled

Are you also using for your internal operations?

Salil Parekh

Yes, absolutely. So those are the ones which we are using internally as well.

Rishi Basu

Thanks, Shraddha. The next question is from Reshab Shaw from The Informist.

Reshab Shaw

Hi, gentlemen. We have seen utilization going up by 2 basis points and attrition coming down. What stopped us from reaching the upper end of the margin guidance?

Nilanjan Roy

Yes. So, I think guidance of 20% to 22%, I mean, we ended the year as you know at 21% for the full year and for the quarter. So, at 20.8%, it is about a 20-basis points reduction. We know, we have levers available, like utilization is definitely, one of them. And the program which we have put into place has actually got five pillars.

The first is automation through Generative AI. The second is a much more beneficial hierarchy index. The third is through more critical portfolio of projects. Fourth is value-based selling, the pricing, and the fifth is a whole indirect cost initiative. So, this is a five-pillar holistic approach we are taking. It has got about 20 tracks and it is being led by Jayesh.

So, we have 30 leaders leading all these tracks. And definitely the aspiration is to continue to grow our margins in the medium term and long term.

Rishi Basu

Thank you. With that, we come to an end of this Q&A session. We thank our friends from media for being here today. Thank you Salil. Thank you Nilanjan.

Before we conclude, please note that the archived webcast of this press conference will be available on the Infosys website and on our YouTube channel later today. We request our friends from media to join us for high tea outside. Thank you once again. Have a lovely evening.

EX-99.4 ACQ AGREEMNT

Exhibit 99.4

Fact Sheet

 

 

EX-99.5 HOLDERS RTS

Exhibit 99.5
Earnings Call

"Infosys Limited

Earnings Conference Call" 

July 20, 2023

CORPORATE PARTICIPANTS:

Salil Parekh

Chief Executive Officer and Managing Director

Nilanjan Roy

Chief Financial Officer

Sandeep Mahindroo
VP, Financial Controller & Head of Investor Relations

journalists

Kawaljeet Saluja

Kotak

Yogesh Aggarwal

HSBC

Ankur Rudra

J.P. Morgan

Apurva Prasad

HDFC Securities

Kumar Rakesh

BNP Paribas

James Friedman

Susquehanna

Abhishek Bhandari

Nomura

Moshe Katri

Wedbush Securities

Mukul Garg

Motilal Oswal Financial Services

Surendra Goyal

Citigroup

Prashant Kothari

Pictet

Bryan Bergin

TD Cowen

Nitin Padmanabhan

Investec

Vibhor Singhal

Nuvama Equities

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 be 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 star then zero on your touchtone phone. 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 Infosys earnings call for Q1 FY '24. Joining us here on this call is CEO and MD, Mr. Salil Parekh, CFO, Mr. Nilanjan Roy and other members of the senior management team. We will start the call with some remarks on the performance of the company for the quarter by Salil and Nilanjan, subsequent to which the call will be opened up for questions.

Kindly, note that anything which we say that refers to our outlook for the future is a forward-looking statement which must be read in conjunction with the risk that the company faces. A full statement 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. Thank you for joining us.

We had a strong quarter in Q1. Our Q1 growth was solid at 4.2% year-on-year and 1.0% quarter-on-quarter in constant currency. We had 21% growth in manufacturing, 14% in Life Sciences. Our Europe region grew by 10%. Our operating margin for the quarter was strong at 20.8%. We generated robust free cash flow of $699 mn in Q1.

Our large deal value for Q1 was $2.3 bn, 56% of this was net new. We had one mega deal win in Q1. Our value of deals of financial services was 50% of the overall large deal value in Q1. We announced a mega deal of $2 bn value after the close of Q1 and before our results, before today. With a strong large deal and mega deal wins, we are building well for the future. Our pipeline of large deals is strong and we continue to have megadeals in our pipeline.

We are delighted that Topaz, our AI and generative AI platform is resonating well with our clients. We are working on 80 generative AI projects for our clients at this time. The work we are doing encompasses large language models for software development, text, document, voice and video.

Internally, we have developed generative AI tools using an open-source model for software development. We are working with open-source and proprietary generative AI platforms and modules. We have trained 40,000 employees on generative AI. We see opportunities for new work and for productivity improvements through this technology. All of these elements are available within our Topaz set of capabilities. We see this area of generative AI and Topaz being really transformative for our clients.

As we look ahead with the large and mega deal successes and our strength in cost efficiency, automation and consolidation, we feel confident. In the short term, we see some clients stopping or slowing down work on transformation programs and discretionary work. This is especially so in financial services, in mortgages, asset management, investment banking and payments and in the telecom industry. We also see some impact in the hitech industry and in parts of retail.

Even as we won two mega deals recently and have a strong pipeline of large and mega deals, we will see revenue from some of these and other large deals towards the later part of our financial year. Keeping that in mind, we are changing our revenue growth guidance for this financial year to growth of 1.0% to 3.5% in constant currency.

As a consequence of our mega deal wins, overall traction in cost efficiency, automation, a differentiated digital cloud and generative AI capabilities, we are well positioned for the medium term and especially towards the end of our financial year and the period after that.

We have launched a broader and comprehensive margin expansion program. The program will work across five areas: pyramid efficiency, automation and generative AI, improvements in critical portfolios, reducing our indirect costs and communicating and deriving value across the portfolio.

Our senior leadership is mobilized on this. We're working on this program with our clients, our employees and partners, and we're taking steps for the short, medium and long term, while keeping the overall strategic direction of the company in mind. We have an ambition to improve our operating margin in the future periods. Our operating margin guidance for the financial year remains unchanged at 20% to 22%.

With that, let me hand it over to Nilanjan.

Nilanjan Roy

Thanks, Salil. Good evening, everyone, and thank you for joining the call.

We entered FY '24 on the backdrop of uncertain macroeconomic environment with clients reassessing the IT spend and continue to focus on cost and efficiency programs.

Q1 revenue growth was 4.2% on a Y-on-Y basis in constant currency. Sequentially, revenue grew by 1% in constant currency and 1.4% in dollar terms.

Operating margin for Q1 was 20.8%, 20 basis points lower sequentially. This was primarily due to a 70 basis points of benefit from cost optimization, including utilization and automation, which was offset by a balanced 90 basis point impact from employee-related costs, including higher variable pay, promotions, etc.

Client metrics remained strong with the number of $50 mn clients increasing to 79 and $200 mn clients at 15, reflecting our strong ability to mine top clients by providing them multiple relevant services.

Headcount at the end of the quarter stood at 336,000 employees, which is a decline of 2% from the previous quarter. A substantial portion of attrition has been backfilled by training and reskilling existing pool of talent and deployment of freshers. Consequently, our utilization excluding trainees improved to 81.1%, which has further headroom for growth. We will calibrate the hiring for FY '24 based on available pool of employees, growth expectations and attrition trends.

Free cash flow for the quarter was robust at $699 mn and the conversion to net profit for Q1 remained strong at 96.6%, led by strong collections. DSO increased by one day sequentially to 63. Consolidated cash and equivalents stood at $4.5 bn at the end of the quarter. This is before the payout of final dividend that happened in the first week of July.

EPS grew by 6.6% in dollar terms and 12.4% in rupee terms.

Yield on cash balance was 6.71% in Q1.

ROE increased to 32.8% in Q1, a 1.8% increase year-on-year, which is a reflection of our strong cash generation and capital allocation policy.

Large deal momentum continued and we signed 16 large deals in Q1; TCV was $2.3 bn with 56% net new. 3 deals reach were in FS, EURS and communication; 4 in retail; 2 in manufacturing and 1 in Life Sciences vertical. Region wise this split by 11 in America, 4 in Europe and 1 in ROW.

Coming to vertical segment performance.

Financial services vertical witnessed continued softness in areas like mortgage, asset management, investment banking, cards and payments. Large and super regional banking clients in US have been resilient during this quarter. Large banking clients are focusing on vendor consolidation, cost takeout and self-funding transformation programs. Many financial institutions are looking at outsourcing the non-core business that includes taking away existing employees across technology and operations. While delayed decision-making is impacting the vertical, our recent deal wins and the strong pipeline will help create momentum and opportunity for future growth.

In retail, cost efficiency and consolidation continues to remain top priority for our clients. There is intense focus on leveraging AI to accelerate digital transformation for enhanced customer and employee experience, predictive analytics and real-time insights. While decision cycles are long, large deal pipelines remain healthy in infra, apps and process modernization, cloud and workload migration.

Communication sector is witnessing continued impact from budget cuts, delayed decision making for newer spend and slow ramp-up. Growth challenges for the clients persist due to increasing opex pressures. Cost optimization and vendor consolidation are top priority for clients who are open to innovative solutions and are asking for AI to amplify productivity. OEM clients are showing greater interest in revenue-generating services, decreased time to market, increased product quality and improved customer experience. Large deal pipeline in this vertical remains very healthy.

Outlook for the energy, utilities, resources and services vertical continues to be positive, though there slowdown in decision-making. Energy clients are coming to us for large-scale transformation programs such as digital capabilities for energy transition and journey to net zero. Utilities clients are focused on in-flight transformation programs or those required for regulatory compliance. Service clients are focused on consolidation and M&A, cloud cost optimization and legacy transformation. Our investment in industry cloud and solutions in the energy transition area had helped us differentiate in these sectors to win multiple deals and build a very strong pipeline.

Manufacturing clients are focusing on controlling the spend and awarding deals which are focused on differentiation. Despite the volatile environment, deal pipeline is strong. Areas like, engineering, IoT, supply chain, cloud, ERP and digital are seeing increased traction. There is a need to increase paper migration to cloud, increasing productivity by transforming to smart factories and transitioning to smart products. We are seeing opportunities across auto, aerospace and industrial.

We have revised our revenue growth guidance for FY '24 to 1.0% to 3.5% in constant currency terms. This is due to lower-than-expected volumes, due to ramp-down in discretionary spend, coupled with lower mega deal volumes arising from delayed timing and longer ramp-up times due to regulatory approvals and transition.

Margin guidance remained at 20% to 22% for FY '24. We continue to aspire for higher margins over the medium term with the razor-sharp focus on cost optimization and efficiency improvements. As Salil mentioned, we have launched a new margin maximization program across the five pillars comprising over 20 tracks.

With that, we can open up 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 Kawaljeet Saluja from Kotak. Please go ahead.

Kawaljeet Saluja

Yeah, hi. Thank you. You know, my first question is the fact that in the prepared remarks, both Nilanjan and Salil, both of you mentioned that the guidance cut is partly due to a delay in volumes or the delay in timing of mega deals. But as far as I remember, your guidance at the lower end was not predicated on mega deal closures, which is 4%, and 7% was predicated on mega deal closures and volumes flowing through.

So I'm just trying to understand, if you can just delayer your guidance, you know basically just highlight what percentage of the cut is attributable to your perception of change in view in the external environment and what percentage is really the delayed signing of mega deals here?

Nilanjan Roy

Yes. So Kawal as you know, there was a guidance of 4% to 7%. Of course, the higher end of the guidance had a larger amount of the mega deals. And the 4%, of course, was predicated a lot on the base volumes, which by default would be in quarter 1, quarter 2. And this is where we have seen discretionary spend cuts in quarter 1 in some clients, and of course, in Q2 as well, some of that softness continues.

As you know, if you have to meet the year, quarter 1 and quarter 2 are very critical for that really to happen. So fundamentally, that is the base reason. As we exit the year, of course, at the higher end, there was the impact of mega deals and our guidance on both ends have come down. And one more reason is that the top-end has come down is also largely also due to the delay in mega deals signing and the transition time. But the pipeline, as Salil said is very healthy. We got two deals under the belt, and we are as confident as we exit the year.

Kawaljeet Saluja

But Nilanjan, just to try to know, when you basically spoke in the last quarter, you did highlight that 1Q would be weaker and we expect pickup in 2Q, whereas right now you are saying that 1Q and 2Q are strong quarters. I'm just trying to understand the disconnect in commentary.

The second part to the question Nilanjan is that, two consecutive quarters, two consecutive misses. I guess last time around as well, there were a lot of pushback saying that the environment has deteriorated and how you built any extra cushion into your guidance, etc. So what are your learnings in the last two quarters? And what are the steps you have taken to ensure that the forecasting process is a little bit more robust than what the guidance cut in the last two quarters indicate?

Nilanjan Roy

Yeah. So Kawal see, when we give the guidance, we see the outlook at that point of time. We have a semblance of what is a pipe. We assume some convertibility. There is an existing book of business. But like I just said, in Q1, from a sequential basis, we are lower than where we thought we would end up to be, right?

Because like I said, Q1 and Q2 was critical for us to meet that guidance. And we have seen these discretionary cuts in clients in some sectors which we have just called out. And that is, what I would say, the base business. And on the other side, there is the mega deal impact. We have got a good pipeline and some of these deals which was supposed to kick-in earlier, are getting delayed later into the year as we speak.

Kawaljeet Saluja

Okay, that is clear. Just a final comment on how the pipeline after the conversion of the $2 bn mega deal as such? Can you just comment on the pipeline? That will be useful.

Salil Parekh

So Kawal, this is Salil. The pipeline, we still have a good pipeline of both large deals. We have some mega deals in the pipeline as well. We see a lot of the work that we are doing on cost, on efficiency, automation, in consolidation those are tracking well with clients. There are some transformation programs which are funded from within the cost efficiency those are also something that we are tracking through. So we do see with the two mega deals signed, a good pipeline today of large deals and we have mega deals in the pipeline as well.

Kawaljeet Saluja

Right. And just one thing, is the upper end of the guidance band in any way predicated on future mega deal closures, or it's based on the deals closed up to now?

Salil Parekh

So here, the way we have built this guidance, or our view of the 3.5% is based on what we have closed today in large and mega deals, and then we have a way of estimating based on what we see into the future as an aggregate, not as a one-off, or not as a binary discussion, but in aggregate with what we see as the probabilities and also the probability of when that work will transition and the revenues are . So those are what we see in the pipeline and are baked into it.

Kawaljeet Saluja

Thank you.

Moderator

Thank you. The next question is from the line of Yogesh Aggarwal from HSBC. Please go ahead.

Yogesh Aggarwal

Yeah, hi. Thanks for letting me come. Salil, just a couple of questions. Firstly, on banking, your banking weakness has been there for a few quarters and now most other companies are showing weakness as well. Whereas if you look at the clients itself, most of their financial results, the tech commentaries and the data is not that weak. So where is the disconnect you think? Are they spending more with captives or smaller subcontractors? Where is this market share loss coming from?

Salil Parekh

Yogesh, I think, what we see in our financial services or banking part of financial services, there are different clients of ours that have different patterns in terms of their own pressures within their business. Some of our clients have had good results, but there are some which have had more difficult economic situations.

Also with a mix from geography between Europe, Asia Pacific, and US, when you break it down into specific sub-industry areas, when you look at asset management, when you look at investment banking, when you look at payments or mortgages, those are the ones where we are seeing the impact.

Our sense is, generally our clients are not spending on those projects. It is not that they are spending somewhere else. Typically, they are choosing not to spend at this time. And as the environment changes, we will see how that pattern changes.

Yogesh Aggarwal

Okay, thanks. And just a quick follow-up. The revised guidance now, at the lower end, I wanted to ask, you have already won few mega deals and the lower end of the guidance suggests almost negative or flattish growth for the next three quarters, which would also mean that for six quarters, seven quarters now, revenues would be flat. So what are the assumptions for the lower end of the guidance I wanted to know?

Salil Parekh

See, here as Nilanjan was sharing about the guidance, the approach is really focused on what we have seen in terms of volumes, discretionary projects in Q1 and an overlay then of the actual mega deals and large deals we have already won, and the estimate that we are looking at.

Some of those deals have start dates have moved out, whereas the volume and discretionary project slowing is still in quarter. So our view is based on how that plays out between those trends, we saw the 1% in terms of the lower end of the guidance when you combine that and then, of course, the high end we talked about earlier.

Yogesh Aggarwal

Great. Thanks, Salil. Thank you.

Moderator

Thank you. The next question is from the line of Ankur Rudra from J.P. Morgan. Please go ahead.

Ankur Rudra

Thank you. Salil, thank you for the updated guidance. I just wanted to get a sense of, obviously, the ask rate for the next three quarters has now moderated from, maybe it could have been 2% to 4%. With the same old guidance, it's 0% to 1.5% as discussed. Just curious about the discretionary cuts and the delays you referenced in your guidance change description. Has this happened more towards the latter half of the quarter? Has there been a linear change over the course of the quarter?

Salil Parekh

So there, Ankur, the way we have seen it is, there will be no difference in the pattern at the beginning or the end of the quarter. It is more focused on the industry that we referenced in our opening remarks between Nilanjan and me. We have seen in different places the discretionary work and some transformation work, where it has either slowed or stopped based on different industries.

Ankur Rudra

Okay. And also, I just want to get a sense of maybe asking this in a slightly different way. Obviously, the guidance change is quite drastic. Is this just the change in environment of spending over the course of the last three months? Or is this also a difference in the way you measure the likelihood of success of when the deals ramp-up, or the win rate of future deals? Just curious about that and if this guidance is more conservative anyway versus the last time you said it?

Salil Parekh

So there, it is a combination, as you pointed out, of the environment in terms of the discretionary or transformational projects in the quarter. And then some of the mega deals and large deals, we saw a delay in decision-making in closing and also delay or changes in the start time or ramp-up of the profile of that deal. We have actually not seen any change in the win rate. And in fact, internally, we had a good win rate in Q1, and we continue to see good traction, whether it is consolidation, cost efficiency on the win rate side.

Ankur Rudra

Appreciate that. Just one clarification, if you could. I know this $2 bn framework agreement that you referenced is the second large deal. Could you clarify if this is fully contracted? And is this type of deal historically also been disclosed in your TCV’s over the last few quarters or years?

Salil Parekh

This deal, while we have first made the announcement, and I'm sure you have seen, we have completed the contract signing of the deal, that is when the deal was announced. These types of deals were also included in the past within our large deal mix. Of course, in the past, there was no requirement of disclosing the specific values.

Ankur Rudra

Okay. Understood. Last question if I can. On margins, they were obviously flattish this time, it seemed like you have done well given what the growth has been. The five-point margin maximization plan you have highlighted, is this you playing offense or defense on margins? In other words, is Infosys confident of potentially expanding margins in F '24? Or is it more for margin defense because growth outlook does not look very strong, at least at the lower end of guide?

Nilanjan Roy

Yes. So like we said, I mean, this is a two-year program we have started. It is quite comprehensive. It is just not looking at cost, it is looking at portfolio. And this is now being led personally by Jayesh with 20 tracks, 30 leaders. Of course, our aspiration continues to be that we will aspire for higher margins than where we are today. So from that perspective, it is offensive -- on offense, I would say offensive, but on offense, this thing to increase our margins. That is the intent.

Ankur Rudra

Appreciate it, thank you, and best of luck.

Moderator

Thank you. The next question is from the line of Apurva Prasad from HDFC Securities. Please go ahead.

Apurva Prasad

Yes, thanks for taking my question. Salil, just wanted a broad further on the guidance. In the last quarter, you had referred to achieving top-end basis the strength of pipeline and factors that are binary. So are those binary factors still in the pipeline or converted but transition is taking longer? So what I am trying to get at is how should we really reconcile the change in revenue guide in the last three months between delay and volume cuts, which is as large as $600 mn?

Salil Parekh

So there, we have already announced two mega deals, which is a positive. We have large and mega deals in the pipeline. The way we have seen it is really the two points you mentioned, which is the volume discretionary work in quarter and the delay in the start of the realization, transition of some of the large and mega deals, those are what have translated to the change in the guidance.

Apurva Prasad

Any way that you could split those factors, how much of an impact would that have been?

Salil Parekh

We will not be in a position to quantify that further between those two, unfortunately.

Apurva Prasad

So okay. And just how would you characterize the business environment and your client conversations at the end of the quarter as compared to how it was at the beginning of the quarter?

Salil Parekh

So there, it is really, the way we see it is, our pipeline for large and mega deals is in excellent shape as we closed the quarter. We see good traction for mega deals and our large deals. The focus is much more when you are talking to clients on efficiency or cost or consolidation. We have a real traction with them. We see less discussions on digital transformation.

And then in general, across the client base for those industries that I referenced in the opening remark, we see where there are discretionary programs where the client feels that they can slow them or pause them for some time, we see that action. So those are the two sort of actions we are seeing. Very good traction, in fact, on the large and mega deals.

Moderator

Apurva, does that answer your question?

Apurva Prasad

Yes, thanks.

Moderator

Thank you. The next question is from the line of Kumar Rakesh from BNP Paribas Please go ahead.

Kumar Rakesh

Hi, good evening. Thank you for taking my question. My first question was more of a clarification. So can you just confirm the process of deciding the revenue growth guidance? Is it the same, which was last fiscal year versus this year? Or have you changed some of the assumptions for the processes that you follow?

Salil Parekh

Hi, Rakesh. This is Salil. So we have following the same approach that we followed over the last several years as we build our outlook or our guidance that we share with the market.

Kumar Rakesh

Great. Got it. Thanks. My second question was on the margin side. So this quarter, we had a slight decline on the margin sequentially. Now wage hike is yet to be given out. So how confident are you on holding on to the current margin or the margins which we had last year? And the cost saving program also you are going to start running? Or there would be more of headwinds than tailwinds on the margin side?

Nilanjan Roy

As you saw my margin walk, we had a 70 basis points benefit from utilization, cost optimization. So we are seeing the tailwinds of that. And the big part of that, we actually put back into employee-related compensation, which is variable pay, that is a big part - promotion. So it is not that we are losing that to the market. That is a conscious decision for us to plow it back towards employees.

So as we look ahead, we are actively considering compensation hikes, we announced this as well at press conference earlier. And the new program that kicks-in, we think in optimization will give us the necessary tailwinds to be well within the margin guidance band.

Kumar Rakesh

Thanks for that. My last question was around the volume commentary which you gave. So last quarter in April when we had the discussion. You had talked about that volume through the quarter, you were seeing signs of improvement. However, in this quarter, you have seen performing much below your expectation. So which are specific pockets you are seeing the weakness specifically? Is it more client specific or the entire industry working a much sharper weakness?

Nilanjan Roy

It is a client-specific, like this time iIn fact, we saw slightly more resilience in the US-based clients. Europe turned out to be slightly weaker. So it is very client specific actually across. I mean, it is sort of a leaking bucket in a number of clients. There is no large drop-off. And this is largely with the discretionary part. So it is some programs which can be pulled back and are discretionary in the nature, those are the ones we are seeing.

Kumar Rakesh

Thanks for that.

Moderator

Thank you. The next question is from the line of James Friedman from Susquehanna. Please go ahead.

James Friedman

Hi, thank you. Salil, I think many investors are wondering, so I appreciate your thoughts. Does it seem to you that the soft demand was primarily due to macro factors, which are presumably temporary? Or is it potentially something more profound like perhaps related to the relevance of services or mindshare? So is this just macro it is going to go away, or is it a question of services in itself?

Salil Parekh

So this is Salil. Thanks for the question. The way we see it today, we see this demand environment, especially on discretionary, that we have been discussing so far, as a function of the macro environment. We can see, for example, if you look at different industries, manufacturing growing at 21%, other industry is doing well, whereas financial service is weaker. So our service portfolio, we believe, works well.

We have already transformed the company, moved it predominantly into a digital business. We are very strong on cloud with our cobalt offering. And now with generative AI and broadly with AI, we have launched our Topaz offering.

My sense is that those are resonating well with clients. And the places where we see the constraints have been more with the macro. Even some of the large and mega deals we are winning, we are winning against a fairly intense competition where we are demonstrating our capabilities, whether it is on transformation or on cost or efficiency or consolidation.

James Friedman

Okay, thank you for that context, Salil. I will drop back in the queue.

Moderator

Thank you. The next question is from the line of Abhishek Bhandari from Nomura. Please go ahead.

Abhishek Bhandari

Yeah. Thank you. I have two questions. First of all, Salil, congrats to you for this $2 bn mega deal. And if you could share some more details around this project given that it is probably the largest you announced anywhere globally. Is it pure services deal? Or there is an element of any hardware purchase along with it? And do you think this will get into revenue translation more in the second half of this year?

Salil Parekh

So thanks for the question. On this specific deal, what we have shared in the public domain is as per the filing with the stock exchange. It really focuses on work that we are doing related to AI and automation-led development, modernization and maintenance services. We do not have anything more to add to that comment.

Abhishek Bhandari

Sure. And do you think this goes into revenue translation in second half?

Salil Parekh

Yes. So again, there, we do not have anything more on the specific deal. It is more about the general comments that we have talked about the large and mega deals. We do see, in general, across our large and mega deals, the revenue coming through in terms of the transitions and revenue realization more towards the later part of the year.

Abhishek Bhandari

Got it. Thank you Salil for that. Nilanjan, my final and second question is to you. So you commented that the salary hikes are under active consideration. So do you think this year, the hike cycle could differ compared to a usual cycle? And it could be more linked to when the growth comes back, we probably will be in a better position to give the hikes for employees?

Nilanjan Roy

So like I said, we are considering everything. Nothing to add more than that really in terms of timing or anything like that.

Abhishek Bhandari

Okay, got it. Thank you and all the best.

Moderator

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

Moshe Katri

So far, Europe has really been holding up well, much better than the US. Can you talk a bit about what you are seeing in Europe, maybe areas where you are seeing some strength in terms of verticals? I am assuming the UK is a big part of it. And if that trend continues based on what you are seeing, i.e. is Europe still holding in there or is it also slowing down? That is my first question, thanks.

Salil Parekh

So thanks to your question. This is Salil. We saw good traction, and we have seen that over the last several quarters in Europe, as you pointed out. We have seen that, especially in the manufacturing segment. We have had good traction in multiple geographies in Europe. So we have a good traction in the Nordics. We also announced a strategic win in the Nordics, which was public a few weeks ago. We have good traction in Germany, as you referenced, a good traction in the UK. So we have had good traction so far.

Now the macro environment, we feel, as Nilanjan also pointed earlier, is definitely something that is affecting overall in Europe. So we are seeing within the segments we referenced, for example, Financial Services and the sub-segments there in telco, in some parts of retail, those being impacted in Europe as well, and we will see how that plays out into the future.

Moshe Katri

Okay. And my follow-up is about an article that came out this week in the local media in India, suggesting that there is an uptick in demand for lateral hires in the industry. And these hires will probably start happening in the month of October and on. Does that make sense to you versus what you are seeing out there in terms of demand and pipeline and the ramp up, that is kind of, as you said, it is going slower than expected?

Salil Parekh

So for that, my sense is, again, some of the comments you might have heard earlier from Nilanjan, our utilization has gone up. Our total headcount number is reduced, and we believe, we have some headroom for the utilization to go up further. So that would be the context in which we are operating.

Moshe Katri

Understood. Thanks for the color.

Moderator

Thank you. The next question is from the line of Mukul Garg from Motilal Oswal Financial Services. Please go ahead.

Mukul Garg

Yes. Hi, thanks. Salil, just wanted to kind of probe a bit further on the change in the guidance, and I'm just focusing on the lower end of your previous guidance. Where it does not look like the miss in Q1 from what you are kind of thinking about last quarter was that meaningful for the guidance at the lower end to come down so drastically.

So is it fair to assume that, the incremental slowdown which you have witnessed is more front ended, i.e. in Q2? Or was there an expectation of a meaningful pickup-in the business in the second half, which is now no longer there?

Salil Parekh

So on the guidance, again, some of the comments that Nilanjan shared earlier, we saw in Q1, the volume and discretionary projects slowing. And based on that, plus the delay in some of the large or mega deals are starting up in terms of revenue, we felt that has given us the view of the lower end of the guidance.

What we see really the function of the way, the volume in the discretionary project evolves. The macro environment, as we look out, is changing as we see things, which are from US to Europe, to Asia, keeping those factors in mind is how we build that lower end of the guidance.

Mukul Garg

Sure. And similarly, on similar track, is there something, we need to kind of see, visualize in terms of sanctity of large deal TCV, which we disclosed. The commentary on pipeline and large deal wins continues to remain very robust. But there is a fair bit of pain, which you are kind of talking about from a discretionary side, which would be coming out of the large deal number.

So can you share the impact on overall TCV? Or is that something, which you would kind of start reassessing simply because it is giving a misleading picture, when you look at only the large deals wins?

Salil Parekh

So there are some distinctions, what we are seeing in the large deals, mega deals, wins in the pipeline and what is more recent in the past quarters is more on cost or efficiency or consolidation. And so that work is continuing.

What we referenced on the slowdown is more on discretionary projects, which are projects or transformation projects, which are from before, which could have been paused or slowed down by the client, and specifically in the industries, where we referenced the impact. Those are the ones, we are seeing. So they are not, in a sense, correlated with the large deals that we are looking at today.

Mukul Garg

Sure. And if I may just ask one clarification. You know, is there any impact in terms of your growth guidance from any client-specific issue, specifically, as Nilanjan kind of highlighted in Europe, in terms of client in-sourcing or kind of slowing down business to you, in any vertical?

Salil Parekh

So there, what Nilanjan was referencing to is not that it is client specific, as you know, in one or two clients. It was more in terms of clients within that industry vertical and more now shifting, what we had in the US to the European market. So it is not that we have specific one or two clients, where we have seen this impact showing up from there.

Mukul Garg

Sure. I think that is helpful. Thanks for taking my questions. I will get back in the queue.

Moderator

Thank you. The next question is from the line of Surendra Goel from Citigroup. Please go ahead.

Surendra Goyal

Yeah. Good evening. So, I know that you do not share this data point, but could you give us a directional sense of how ACV, annualized contract value trends would have moved or would compare Y-o-Y, given the changing nature of the things towards the large and mega cost takeout deals?

Salil Parekh

Thanks for the questions, Surendra. We are not in a position to share that information.

Surendra Goyal

Okay. And on this recently announced mega deal in terms of renewal versus new?

Salil Parekh

The one that was announced after the quarter, before the results?

Surendra Goyal

Yes.

Salil Parekh

Okay. So again, we are not announcing the net new in a specific deal. What I mentioned earlier was the type of work, and that is what, we can say, in addition to what we filed with the stock exchange.

Surendra Goyal

Sure. Thanks, Salil.

Moderator

Thank you. The next question is from the line of Prashant Kothari from Pictet. Please go ahead.

Prashant Kothari

Yeah. A couple of questions. One is, when you are looking at the revenue growth guidance this year, it seems we will be growing maybe worse than the peer group that we track, even in terms of the deciding on management compensation, how do we think about that? What are the things that we need to do in order to regain the kind of competitiveness in the market, so we can continue to outgrow out there? Or do you think, it is all down to discretionary demand being weak and therefore, there is nothing much that we can do, and we just need to wait for the cycle to come back? That is the first question.

Salil Parekh

So there, we have a view with our portfolio. There is a portfolio of services that works well with our clients. We absolutely have the intensity in the client environment with a large and mega deal wins to be back into the growth mode that we have been in for the last several years.

We also have a high base for comps. Q1 of last year was a 21% growth year-on-year, in the previous year, whereas the environment of other peers were not there. So all of those factors coming into play, we are very much of the view that, we have what we need, and we are continuing to go into new areas, like, generative AI or continued investments in cloud to build out, what we want, what our clients are looking for, to continue with the growth situation.

Prashant Kothari

Okay. Thank you. So if it is kind of more about the external environment then, what would be a good kind of a leading indicator that you would use may be internally to figure out that, this weak discretionary demand phase is kind of coming to an end?

Salil Parekh

So internally, we have several elements, that we look at. These are not typically data we share externally. But in terms of the overall translation of that is what we translate into the guidance there.

Prashant Kothari

All right. Yeah, which is presenting a bit of a weak picture as of now. All right. Okay. Thank you very much.

Moderator

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

Bryan Bergin

Hi, good evening. Thank you. I wanted to ask on the margin expansion program. So I understand that this is a two-year initiative. Can you give us a sense of materiality to just how are you thinking about the potential cost savings or an approximate margin expansion potential that you expect to achieve from these pillars?

Nilanjan Roy

Yes. So we cannot really quantify it. These are five critical tracks, pricing and a more holistic sort of value-based selling approach. That is a big one. We know from a pyramid perspective, we have a lot of scope as well. We understand the generative AI and our ongoing automation projects, which we have. That is a continuously and actually with generative AI, we think, we can up the productivity from baseline even more.

Some of our portfolios in our mix, how do we improve margins, – a dedicated head team looking at these accounts. And finally, the indirect cost side and how do we keep a cap on that, looking at more efficient buying, procurement, savings, etc.

So it is a quite a holistic approach, like I said, across 20 tracks. And these are being kicked-off. We cannot quantify the number at this stage. But like we said, our aspiration continues to be to improve our margin in the medium term.

Bryan Bergin

Okay. And then my follow-up, I understand you have got a lot of questions here on the fiscal '24 growth outlook. Just trying to clarify maybe here and maybe tie all these questions together. Is it right to say that at the low end of your '24 growth guidance, that you are assuming a worsening of volume reductions and a worsening of decision-making pace for the balance of the year? And then at the upper end, that the decision-making improves? Just trying to really get to the point of are you assuming more of the same in the improvement or further deterioration, within this range?

Salil Parekh

There, the way we have constructed this guidance, we see that, there is a change or a difference in the environment, in the decision-making. We have seen some of the impact in some of the industries that we shared earlier. And we will see how that volume, discretionary work translates itself over time. So we baked in some range of possibilities into that. We wanted to see how those possibilities play out.

Bryan Bergin

Thank you.

Moderator

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

Nitin Padmanabhan

Yeah. Hi, good evening. Thanks for the opportunity. So Nilanjan, the employee headcount is down 3% over the last two quarters, but the absolute employee cost is up 2%. So what explains that dynamic?

Nilanjan Roy

Yeah. So like I said, this time, we have about 90 bps of impact, we do not see the entire thing in employee cost because even third-party costs have come down. But if you see about 90 basis points, actually more than 120 basis points and then 90 basis points is actually in employee costs, variable pay is a big one, which we have upped consciously, in this quarter, a little bit of promotion, then there are other balancing items.

Nitin Padmanabhan

Yeah. So, just a clarification there. So in the context of the deteriorating environment and attrition sort of falling, the assumption was that employee cost would be something relatively easier to manage. And obviously, because the performance, company-wide performance itself is lower, the variable also should be lower. So what is driving the dynamic on higher variable pay and the compensation?

Nilanjan Roy

So we look at this holistically. And we do not look at just one quarter and decide these decisions. We are looking at the overall environment and attrition, etc, and that is a decision we collectively take. It is just not on a quarter-to-quarter basis.

We have enough headroom in our utilization to grow volumes. And therefore, the attrition, which we see is not entirely replaced by lateral hiring. A part of that happens through lateral hiring, and we continue to re-skill and move up our fresher bench and rotate people through projects. So that benefit, we continue to get.

And like I said, the 70 bps benefit, which we are seeing is coming partly because of improved utilization.

Nitin Padmanabhan

Sure. And lastly, the $2.1 bn deal that we announced, in which vertical is that? If you could clarify that would be helpful?

Nilanjan Roy

No, we do not mention that on what vertical it is.

Nitin Padmanabhan

Okay, sir. Thank you so much all the very best.

Nilanjan Roy

Thank you.

Moderator

Thank you. The next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead.

Vibhor Singhal

Yeah, hi. Good evening. Thanks for taking my question. So, Salil, two questions from my side. One on the harping on the guidance part again. I mean, for long, I think, the guidance that Infosys gives is kind of seen a benchmark for the industry and a lead across for the entire sector as well. And the sharp cut that we had at this time. So just wanted to understand, the putting on hold of discretionary spend and other issues that you mentioned that caused us to lower the guidance, do you see that as a very Infosys specific thing, or do you see it more of an industry across the board that maybe other companies are not seeing it right now, they might be following suit in the next few quarters. Or is it something in the nature of our portfolio because of which you probably feel that it was cyclical?

I mean, in the last three months, because the other companies that have reported, there might not have been such number difference in the guidances. But the kind of $600 mn shock that we have seen, we have not seen that kind of a change in commentary over the past three months by any other player per se. So would you like to basically give some colour on how readable is this environment, that has caused this deterioration to us and not to the other companies in the sector or the industry?

Salil Parekh

So there, my sense is, if you look at our Q1 number, we have 1% quarter-on-quarter growth, which from what I have seen across the industry is, maybe one of the strongest quarter-on-quarter growth. We have a clear view of what we see as we have been discussing on large and mega deals, giving us a strong growth orientation later in the year with some discretionary work, which is slowing in Q1.

So I do not have a sense for the other players. That is how we see it. And if I look at Q1, we have a good outcome in terms of a solid quarter and looking at the industry, maybe higher growth Q-on-Q than many others.

Vibhor Singhal

Got it. And in terms of conversations with the clients, just a follow-up on that, in terms of the conversations with the clients, I think you mentioned it before on the call as well. What is the overall general conversation like, when they put this discretionary part of the deals on hold? I mean, do they want to do it, given the weak macro at this point of time? Is there any rethinking on the part of whether they need this kind of spend at all? Are those original decisions being questioned itself to begin with? What exactly is the nature of the conversation with the clients, which are putting these spends on hold?

Salil Parekh

So here, what we have seen is, again, in the industries, we referenced before, whether it is financial services or telco or hi-tech, the clients or the industries are going through a difficult environment themselves in the macro. They are looking for help or support from their partners like us, where they put some projects, which they perceive to be not immediately relevant for them on a pause or slowing. Those are the discretionary works that slow down. And we will see as the environment changes, what happens there.

Vibhor Singhal

Got it. Great. Thanks for taking my question. And wish you all the best for the rest of the year.

Moderator

Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference back to the management for their closing remarks. Thank you, and over to you.

Salil Parekh

Thanks. This is Salil. I just want to close out. Thank you, everyone, for joining us. In summary, for us, really, we have had a solid Q1, very good Q-on-Q growth, solid margins, excellent large deals and mega deal wins. This sets us up very nicely, with some of the delays and the volume slowing more for the later part of the year. We have also got incredible traction in generative AI with 80 projects and the Topaz work resonating with clients.

We now put in place a stronger program on margin expansion, which is in play. Putting all of that together, we see this is a year, where we will make that difference translating to mega deals and large deals, and as we come towards the later part of the year, showing the realization of all of those.

So thanks again, everyone, for joining in, and look forward to catching up at the next quarterly call.

Moderator

Thank you very much, members of the management. Ladies and gentlemen, on behalf of Infosys, that concludes this conference. Thank you all for joining us and 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 AUDIT OF 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 ended June 30, 2023, (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 subsidiaries 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 ended June 30, 2023.

Basis for Opinion

We conducted our audit 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 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 includes Consolidated financial results is the responsibility of the Company’s Board of Directors and has been approved by them for the issuance. The Statement has been compiled from the related audited interim condensed consolidated financial statements for the three months ended June 30, 2023. This responsibility includes 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 Boards of Directors either intend 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 financial 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.

• Perform procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the Listing Regulations to the extent applicable.

• 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.

Place: Bengaluru Date: July 20, 2023 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)   Sanjiv V. Pilgaonkar Partner (Membership No.039826) UDIN: 23039826BGXSAL6293

Annexure to Auditor’s 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 Nova Holdings LLC.

6. EdgeVerve Systems Limited

7. Infosys Austria GmbH

8. Skava Systems Private Limited (under liquidation)

9. Infosys Chile SpA

10. Infosys Arabia Limited (under liquidation)

11. Infosys Consulting Ltda.

12. Infosys Luxembourg S.a.r.l

13. Infosys Americas Inc. (under liquidation)

14. Infosys Public Services, Inc. USA

15. Infosys BPM Limited

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

17. Infosys Poland Sp z.o.o

18. Infosys McCamish Systems LLC

19. Portland Group Pty Ltd

20. Infosys BPO Americas LLC.

21. Infosys Consulting Holding AG

22. Infosys Management Consulting Pty Limited

23. Infosys Consulting AG

24. Infosys Consulting GmbH

25. Infosys Consulting S.R.L (Romania)

26. Infosys Consulting SAS

27. Infy Consulting Company Ltd.

28. Infy Consulting B.V.

29. Infosys Consulting S.R.L (Argentina) (formerly a wholly-owned subsidiary of Infosys Consulting Holding AG) became the majority owned and controlled subsidiary of Infosys Limited with effect from April 1, 2022

30. Infosys Consulting (Belgium) NV

31. Panaya Inc.

32. Infosys Financial Services GmbH (formerly known as Panaya GmbH) became a wholly owned subsidiary of Infosys Singapore Pte. Ltd with effect from February 23, 2023

33. Panaya Ltd.

34. Brilliant Basics Holdings Limited (under liquidation)

35. Brilliant Basics Limited (under liquidation)

36. Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.)

37. Infosys Middle East FZ LLC

38. Fluido Oy

39. Fluido Sweden AB (Extero)

40. Fluido Norway A/S

41. Fluido Denmark A/S

42. Fluido Slovakia s.r.o

43. Infosys Compaz Pte. Ltd.

44. Infosys South Africa (Pty) Ltd

45. WongDoody, Inc

46. HIPUS Co., Ltd.

47. Stater N.V.

48. Stater Nederland B.V.

49. Stater XXL B.V.

50. HypoCasso B.V.

51. Stater Participations B.V.

52. Stater Belgium N.V./S.A.

53. Outbox systems Inc. dba Simplus (US)

54. Simplus ANZ Pty Ltd.

55. Simplus Australia Pty Ltd

56. Simplus Philippines, Inc.

57. Infosys Fluido UK, Ltd. (formerly Simplus U.K, Ltd)

58. Infosys Fluido Ireland, Ltd. (formerly Simplus Ireland, Ltd)

59. Infosys Limited Bulgaria EOOD

60. Infosys BPM UK Limited

61. Blue Acorn iCi Inc. (formerly known as Beringer Commerce Inc)

62. Kaleidoscope Animations, Inc.

63. Kaleidoscope Prototyping LLC

64. GuideVision s.r.o

65. GuideVision Deutschland GmbH

66. GuideVision Suomi Oy

67. GuideVision Magyarorszag Kft

68. GuideVision Polska Sp. z.o.o

69. Infosys Business Solutions LLC

70. Infosys Germany GmbH (formerly known as Kristall 247. GmbH)

71. GuideVision UK Ltd (under liquidation)

72. Infosys Turkey Bilgi Teknolojileri Limited Sirketi

73. Infosys Germany Holding Gmbh

74. Infosys Automotive and Mobility GmbH & Co. KG

75. Stater GmbH

76. Infosys Green Forum

77. Infosys (Malaysia) SDN. BHD. (formerly Global Enterprise International (Malaysia) Sdn. Bhd.

78. oddity space GmbH acquired by Infosys Germany GmbH on April 20, 2022

79. oddity jungle GmbH acquired by Infosys Germany GmbH on April 20, 2022

80. oddity waves GmbH acquired by Infosys Germany GmbH on April 20, 2022

81. oddity group Services GmbH acquired by Infosys Germany GmbH on April 20, 2022

82. oddity code GmbH acquired by Infosys Germany GmbH on April 20, 2022

83. oddity code d.o.o. (subsidiary of oddity Code GmbH) acquired by Infosys Germany GmbH on April 20, 2022

84. oddity GmbH acquired by Infosys Germany GmbH on April 20, 2022

85. oddity (Shanghai) Co. Ltd. (subsidiary of oddity GmbH) acquired by Infosys Germany GmbH on April 20, 2022

86. oddity Limited (Taipei) (subsidiary of oddity GmbH) acquired by Infosys Germany GmbH on April 20, 2022

87. Infosys Public Services Canada Inc. (a wholly owned subsidiary of Infosys Public Services Inc.) incorporated on July 8, 2022

88. BASE life science A/S acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

89. BASE life science AG (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

90. BASE life science GmbH (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

91. BASE life science Ltd. (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

92. BASE life science S.A.S. (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

93. BASE life science S.r.l. (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

94. Innovisor Inc. (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

95. BASE life science Inc. (a wholly owned subsidiary of BASE life science A/S) acquired by Infosys Singapore Pte. Ltd. (formerly known as Infosys Consulting Pte. Ltd.) on September 1, 2022

96. BASE life science SL. (a wholly owned subsidiary of BASE life science A/S) incorporated on September 6, 2022

97. Panaya Germany GmbH, a wholly owned subsidiary of Panaya Inc. was incorporated on December 15, 2022

98. Infosys Norway, a wholly owned subsidiary of Infosys Singapore Pte. Ltd. was incorporated on February 7, 2023

99. Infosys Employees Welfare Trust

100. Infosys Employee Benefits Trust

101. Infosys Science Foundation

102. Infosys Expanded Stock Ownership Trust

INDEPENDENT AUDITOR’S REPORT ON 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 ended June 30, 2023, (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 Regulations; 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 ended June 30, 2023.

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 Resultsfor the quarter ended June 30, 2023 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 includes the Standalone financial results is the responsibility of the Company’s Board of Directors, and has been approved by them for the issuance. The Statement has been compiled from the related audited interim condensed standalone financial statements for the three months ended June 30, 2023. This responsibility includes the preparation and presentation of the standalone financial results for the quarter ended June 30, 2023 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 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 this 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 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 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 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.

Place: Bengaluru Date: July 20, 2023 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018) Sanjiv V. Pilgaonkar Partner (Membership No.039826) UDIN:23039826BGXSAN1912

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 ended June 30, 2023 prepared in compliance with the Indian Accounting Standards (Ind-AS)

(in crore, except per equity share data)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
	Audited	Audited	Audited	Audited
Revenue from operations	37,933	37,441	34,470	146,767
Other income, net	561	671	676	2,701
Total Income	38,494	38,112	35,146	149,468
Expenses
Employee benefit expenses	20,781	20,311	18,337	78,359
Cost of technical sub-contractors	3,124	3,116	3,909	14,062
Travel expenses	462	426	376	1,525
Cost of software packages and others	2,720	2,886	2,420	10,902
Communication expenses	182	171	170	713
Consultancy and professional charges	346	387	456	1,684
Depreciation and amortisation expenses	1,173	1,121	950	4,225
Finance cost	90	82	56	284
Other expenses	1,254	1,146	938	4,392
Total expenses	30,132	29,646	27,612	116,146
Profit before tax	8,362	8,466	7,534	33,322
Tax expense:
Current tax	2,307	2,260	2,350	9,287
Deferred tax	110	72	(178)	(73)
Profit for the period	5,945	6,134	5,362	24,108
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net	87	25	(86)	8
Equity instruments through other comprehensive income, net	1	(15)	3	(7)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedges, net	6	36	26	(7)
Exchange differences on translation of foreign operations	15	61	53	776
Fair value changes on investments, net	75	42	(372)	(256)
Total other comprehensive income/(loss), net of tax	184	149	(376)	514
Total comprehensive income for the period	6,129	6,283	4,986	24,622
Profit attributable to:
Owners of the company	5,945	6,128	5,360	24,095
Non-controlling interests	–	6	2	13
	5,945	6,134	5,362	24,108
Total comprehensive income attributable to:
Owners of the company	6,132	6,276	4,986	24,598
Non-controlling interests	(3)	7	–	24
	6,129	6,283	4,986	24,622
Paid up share capital (par value 5/- each, fully paid)	2,070	2,069	2,098	2,069
Other equity *#	73,338	73,338	73,252	73,338
Earnings per equity share (par value 5/- each)**
Basic ()	14.37	14.79	12.78	57.63
Diluted ()	14.35	14.77	12.76	57.54

* Balances for the quarter ended June 30, 2023 and June 30, 2022 represent balances as per the audited Balance Sheet for the year ended March 31, 2023 and March 31, 2022, respectively as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

** EPS is not annualized for the quarter ended June 30, 2023, quarter ended March 31, 2023 and quarter ended June 30, 2022

^# Excludes non-controlling interest

1. Notes pertaining to the current quarter

a) The audited interim condensed consolidated financial statements for the quarter ended June 30, 2023 have been taken on record by the Board of Directors at its meeting held on July 20, 2023. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unmodified audit opinion thereon. The information presented above is extracted from the audited interim condensed consolidated financial statements. Those 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) Board Change

Based on the recommendation of the Nomination and Remuneration Committee, the Board considered the appointment of Helene Auriol Potier (DIN - 10166891), as an Additional & Independent Director effective May 26, 2023 for a period of 3 (three) years and the same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023.

c) Update on employee stock grants

The Board, on July 20, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of 23,780 one time RSUs to three eligible employees under the 2015 plan w.e.f August 1, 2023. These RSUs will vest equally over a period of four years.

d) Proposed transaction

Infosys Limited will acquire Danske IT and Support Services India Private Limited (“DIT”) which is Danske Bank’s IT center in India for an estimated consideration of DKK 13.6 million (approximately 16 crore) subject to customary closing adjustments and conditions.

2. Information on dividends for the quarter ended June 30, 2023

For financial year 2023, the Board recommended a final dividend of 17.50/- (par value of 5/- each) per equity share. The same was approved by the shareholders in the Annual General Meeting (AGM) of the Company held on June 28, 2023 and paid on July 3, 2023.

(in )

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
Dividend per share (par value 5/- each)
Interim dividend	–	–	–	16.50
Final dividend	–	17.50	–	17.50

3. Segment reporting (Consolidated - Audited)

(in crore)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
Revenue by business segment
Financial Services (1)	10,661	10,818	10,562	43,763
Retail (2)	5,513	5,537	5,004	21,204
Communication (3)	4,441	4,411	4,464	18,086
Energy, Utilities, Resources and Services	4,889	4,825	4,259	18,539
Manufacturing	5,350	5,078	4,172	19,035
Hi-Tech	3,056	2,989	2,812	11,867
Life Sciences (4)	2,749	2,681	2,257	10,085
All other segments (5)	1,274	1,102	940	4,188
Total	37,933	37,441	34,470	146,767
Less: Inter-segment revenue	–	–	–	–
Net revenue from operations	37,933	37,441	34,470	146,767
Segment profit before tax, depreciation and non-controlling interests:
Financial Services (1)	2,545	2,600	2,754	10,843
Retail (2)	1,629	1,634	1,538	6,396
Communication (3)	984	958	794	3,759
Energy, Utilities , Resources and Services	1,290	1,302	1,145	5,155
Manufacturing	972	902	385	3,113
Hi-Tech	802	750	672	2,959
Life Sciences (4)	702	705	535	2,566
All other segments (5)	140	147	41	339
Total	9,064	8,998	7,864	35,130
Less: Other Unallocable expenditure	1,173	1,121	950	4,225
Add: Unallocable other income	561	671	676	2,701
Less: Finance cost	90	82	56	284
Profit before tax and non-controlling interests	8,362	8,466	7,534	33,322

⁽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 required by 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 currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

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

(in crore)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
Revenue from operations	31,811	30,531	29,527	124,014
Profit before tax	8,146	7,957	6,902	31,643
Profit for the period	5,956	5,904	4,901	23,268

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 financial statements as stated.

	By order of the Board for Infosys Limited
Bengaluru, India July 20, 2023	Salil Parekh Chief Executive Officer and Managing Director

The Board has also taken on record the consolidated results of Infosys Limited and its subsidiaries for the quarter ended June 30, 2023, 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 ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
	Audited	Audited	Audited	Audited
Revenues	4,617	4,554	4,444	18,212
Cost of sales	3,211	3,164	3,144	12,709
Gross profit	1,406	1,390	1,300	5,503
Operating expenses	445	433	412	1,678
Operating profit	961	957	888	3,825
Other income, net	68	82	87	335
Finance cost	11	10	7	35
Profit before income taxes	1,018	1,029	968	4,125
Income tax expense	294	284	279	1,142
Net profit	724	745	689	2,983
Earnings per equity share *
Basic	0.17	0.18	0.16	0.71
Diluted	0.17	0.18	0.16	0.71
Total assets	16,007	15,312	15,193	15,312
Cash and cash equivalents and current investments	2,176	2,322	2,798	2,322

* EPS is not annualized for the quarter ended June 30, 2023, quarter ended March 31, 2023 and quarter ended June 30, 2022.

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance 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 or outcomes 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 the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, and our corporate actions including acquisitions. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. 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 ended June 30, 2023 prepared in compliance with the Indian Accounting Standards (Ind-AS)

(in crore, except per equity share data)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
	Audited	Audited	Audited	Audited
Revenue from operations	31,811	30,531	29,527	124,014
Other income, net	1,001	766	648	3,859
Total income	32,812	31,297	30,175	127,873
Expenses
Employee benefit expenses	16,353	15,581	14,914	62,764
Cost of technical sub-contractors	4,676	4,551	5,011	19,096
Travel expenses	359	335	314	1,227
Cost of software packages and others	1,174	875	1,183	5,214
Communication expenses	129	117	119	502
Consultancy and professional charges	215	261	363	1,236
Depreciation and amortisation expense	746	714	643	2,753
Finance cost	43	43	34	157
Other expenses	971	863	692	3,281
Total expenses	24,666	23,340	23,273	96,230
Profit before tax	8,146	7,957	6,902	31,643
Tax expense:
Current tax	2,065	1,906	2,032	8,167
Deferred tax	125	147	(31)	208
Profit for the period	5,956	5,904	4,901	23,268
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability / asset, net	87	10	(96)	(19)
Equity instruments through other comprehensive income, net	1	(14)	3	(6)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedges, net	6	36	26	(7)
Fair value changes on investments, net	68	38	(344)	(236)
Total other comprehensive income/ (loss), net of tax	162	70	(411)	(268)
Total comprehensive income for the period	6,118	5,974	4,490	23,000
Paid-up share capital (par value 5/- each fully paid)	2,075	2,074	2,104	2,074
Other Equity*	65,671	65,671	67,203	65,671
Earnings per equity share ( par value 5 /- each)**
Basic ()	14.36	14.20	11.65	55.48
Diluted ()	14.34	14.19	11.64	55.42

* Balances for the quarter ended June 30, 2023 and June 30, 2022 represent balances as per the audited Balance Sheet for the year ended March 31, 2023 and March 31, 2022 , respectively as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

** EPS is not annualized for the quarter ended June 30, 2023, quarter ended March 31, 2023 and quarter ended June 30, 2022.

1. Notes pertaining to the current quarter

a) The audited interim condensed standalone financial statements for the quarter ended June 30, 2023 have been taken on record by the Board of Directors at its meeting held on July 20, 2023. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unmodified audit opinion thereon. The information presented above is extracted from the audited interim condensed standalone financial statements. Those 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) Board Change

Based on the recommendation of the Nomination and Remuneration Committee, the Board considered the appointment of Helene Auriol Potier (DIN - 10166891), as an Additional & Independent Director effective May 26, 2023 for a period of 3 (three) years and the same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023. 

c) Update on employee stock grants

The Board, on July 20, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of 23,780 one time RSUs to three eligible employees under the 2015 plan w.e.f August 1, 2023. These RSUs will vest equally over a period of four years.

d) Proposed transaction

Infosys Limited will acquire Danske IT and Support Services India Private Limited (“DIT”) which is Danske Bank’s IT center in India for an estimated consideration of DKK 13.6 million (approximately 16 crore) subject to customary closing adjustments and conditions.

2. Information on dividends for the quarter ended June 30, 2023

For financial year 2023, the Board recommended a final dividend of 17.50/- (par value of 5/- each) per equity share. The same was approved by the shareholders in the Annual General Meeting (AGM) of the Company held on June 28, 2023 and paid on July 3, 2023.

(in )

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2023	2023	2022	2023
Dividend per share (par value 5/- each)
Interim dividend	–	–	–	16.50
Final dividend	–	17.50	–	17.50

3. 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 consolidated financial statements. Accordingly, the segment information is given in the audited consolidated financial results of Infosys Limited and its subsidiaries for the quarter ended June 30, 2023.

	By order of the Board for Infosys Limited
Bengaluru, India July 20, 2023	Salil Parekh Chief Executive Officer and Managing Director

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance 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 or outcomes 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 the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, and our corporate actions including acquisitions. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. 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 ended June 30, 2023 prepared in compliance with the Indian Accounting Standards (Ind-AS)

( in crore, except per equity share data)

Particulars	Quarter ended June 30,	Year ended March 31,	Quarter ended June 30,
	2023	2023	2022
Revenue from operations	37,933	146,767	34,470
Profit before tax	8,362	33,322	7,534
Profit for the period	5,945	24,108	5,362
Total comprehensive income for the period (comprising profit for the period after tax and other comprehensive income after tax)	6,129	24,622	4,986
Profit attributable to:
Owners of the company	5,945	24,095	5,360
Non-controlling interests	–	13	2
	5,945	24,108	5,362
Total comprehensive income attributable to:
Owners of the company	6,132	24,598	4,986
Non-controlling interest	(3)	24	–
	6,129	24,622	4,986
Paid-up share capital (par value 5/- each fully paid)	2,070	2,069	2,098
Other equity *#	73,338	73,338	73,252
Earnings per share (par value 5/- each)**
Basic ()	14.37	57.63	12.78
Diluted ()	14.35	57.54	12.76

* Balances for the quarter ended June 30, 2023 and June 30, 2022 represent balances as per the audited Balance Sheet for the year ended March 31, 2023 and March 31, 2022, respectively as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

** EPS is not annualized for the quarter ended June 30, 2023 and quarter ended June 30, 2022

^# Excludes non-controlling interest

1. Notes pertaining to the current quarter

a) The audited interim condensed consolidated financial statements for the quarter ended June 30, 2023 have been taken on record by the Board of Directors at its meeting held on July 20, 2023. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unmodified audit opinion thereon. The information presented above is extracted from the audited interim condensed consolidated financial statements. Those 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) Board Change

Based on the recommendation of the Nomination and Remuneration Committee, the Board considered the appointment of Helene Auriol Potier (DIN - 10166891), as an Additional & Independent Director effective May 26, 2023 for a period of 3 (three) years and the same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023.

c) Update on employee stock grants

The Board, on July 20, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of 23,780 one time RSUs to three eligible employees under the 2015 plan w.e.f August 1, 2023. These RSUs will vest equally over a period of four years

d) Proposed transaction

Infosys Limited will acquire Danske IT and Support Services India Private Limited (“DIT”) which is Danske Bank’s IT center in India for an estimated consideration of DKK 13.6 million (approximately 16 crore) subject to customary closing adjustments and conditions.

2. Information on dividends for the quarter ended June 30, 2023

For financial year 2023, the Board recommended a final dividend of 17.50/- (par value of 5/- each) per equity share. The same was approved by the shareholders in the Annual General Meeting (AGM) of the Company held on June 28, 2023 and paid on July 3, 2023.

(in )

Particulars	Quarter ended June 30,	Year ended March 31,	Quarter ended June 30,
	2023	2023	2022
Dividend per share (par value 5/- each)
Interim dividend	–	16.50	–
Final dividend	–	17.50	–

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

(in crore)

Particulars	Quarter ended June 30,	Year ended March 31,	Quarter ended June 30,
	2023	2023	2022
Revenue from operations	31,811	124,014	29,527
Profit before tax	8,146	31,643	6,902
Profit for the period	5,956	23,268	4,901

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.

	By order of the Board for Infosys Limited
Bengaluru, India July 20, 2023	Salil Parekh Chief Executive Officer and Managing Director

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance 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 or outcomes 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 the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, and our corporate actions including acquisitions. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. 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.

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 June 30, 2023, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Statement of Cash Flows for the three months 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 June 30, 2023, and their consolidated profit, their consolidated total comprehensive income, their consolidated changes in equity and their consolidated cash flows for the three 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 (“SA”s) 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.

Responsibilities of Management and Those Charged with Governance 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 Boards 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 interim condensed consolidated 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 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 Boards of Directors either intend to liquidate their respective entities or to cease operations, or has 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 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 such 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: Bengaluru Date: July 20, 2023 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)     Sanjiv V. Pilgaonkar Partner (Membership No.039826) UDIN:23039826BGXSAQ2034

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Financial Statements under International Financial Reporting Standards (IFRS) in US dollars for the three months ended June 30, 2023

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 Interim Condensed 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 judgments

1.5 Critical accounting estimates and judgments

1.6 Recent accounting pronouncements

2. Notes to the Interim Condensed Consolidated Financial Statements

2.1 Cash and cash equivalents

2.2 Earmarked bank balance for dividend

2.3 Investments

2.4 Financial instruments

2.5 Prepayments and other assets

2.6 Other liabilities

2.7 Provisions and other contingencies

2.8 Property, plant and equipment

2.9 Leases

2.10 Goodwill and Intangible assets

2.11 Business combinations

2.12 Employees' Stock Option Plans (ESOP)

2.13 Income Taxes

2.14 Basic and diluted shares used in computing earnings per equity share

2.15 Related party transactions

2.16 Segment reporting

2.17 Revenue from Operations

2.18 Unbilled Revenue

2.19 Equity

2.20 Break-up of expenses and other income, net

Infosys Limited and subsidiaries

(Dollars in millions except equity share data)

Condensed Consolidated Balance Sheet as at	Note	June 30, 2023	March 31, 2023
ASSETS
Current assets
Cash and cash equivalents	2.1	1,501	1,481
Earmarked bank balance for dividend	2.2	885	–
Current investments	2.3	675	841
Trade receivables		3,191	3,094
Unbilled revenue	2.18	1,783	1,861
Prepayments and other current assets	2.5	1,386	1,336
Income tax assets	2.13	1	1
Derivative financial instruments	2.4	21	12
Total current assets		9,443	8,626
Non-current assets
Property, plant and equipment	2.8	1,638	1,679
Right-of-use assets	2.9	859	837
Goodwill	2.10	882	882
Intangible assets		200	213
Non-current investments	2.3	1,462	1,530
Unbilled revenue	2.18	168	176
Deferred income tax assets	2.13	125	152
Income tax assets	2.13	844	785
Other non-current assets	2.5	386	432
Total non-current assets		6,564	6,686
Total assets		16,007	15,312
LIABILITIES AND EQUITY
Current liabilities
Trade payables		458	470
Lease liabilities	2.9	222	151
Derivative financial instruments	2.4	6	10
Current income tax liabilities	2.13	583	412
Unearned revenue		894	872
Employee benefit obligations		310	292
Provisions	2.7	187	159
Other current liabilities	2.6	3,007	2,403
Total current liabilities		5,667	4,769
Non-current liabilities
Lease liabilities	2.9	812	859
Deferred income tax liabilities	2.13	136	149
Employee benefit obligations		10	10
Other non-current liabilities	2.6	261	301
Total non-current liabilities		1,219	1,319
Total liabilities		6,886	6,088
Equity
Share capital - 5 ($0.16) par value 4,800,000,000 (4,800,000,000) equity shares authorized, issued and outstanding 4,138,454,008 (4,136,387,925) equity shares fully paid up, net of 11,738,357 (12,172,119) treasury shares as at June 30, 2023 (March 31, 2023)	2.19	325	325
Share premium		383	366
Retained earnings		11,175	11,401
Cash flow hedge reserves		1	–
Other reserves		1,439	1,370
Capital redemption reserve		24	24
Other components of equity		(4,278)	(4,314)
Total equity attributable to equity holders of the Company		9,069	9,172
Non-controlling interests		52	52
Total equity		9,121	9,224
Total liabilities and equity		16,007	15,312

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	Bobby Parikh Director
Bengaluru July 20, 2023	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary

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

Condensed Consolidated Statement of Comprehensive Income for the	Note	Three months ended
		June 30, 2023	June 30, 2022
Revenues	2.17	4,617	4,444
Cost of sales	2.20	3,211	3,144
Gross profit		1,406	1,300
Operating expenses:
Selling and marketing expenses	2.20	217	193
Administrative expenses	2.20	228	219
Total operating expenses		445	412
Operating profit		961	888
Other income, net	2.20	68	87
Finance cost		11	7
Profit before income taxes		1,018	968
Income tax expense	2.13	294	279
Net profit		724	689
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		10	(10)
Equity instruments through other comprehensive income, net		–	(1)
		10	(11)
Items that will be reclassified subsequently to profit or loss
Fair value changes on investments, net		9	(46)
Fair value changes on derivatives designated as cash flow hedge, net		1	3
Exchange differences on translation of foreign operations		17	(400)
		27	(443)
Total other comprehensive income/(loss), net of tax		37	(454)
Total comprehensive income		761	235
Profit attributable to:
Owners of the Company		724	689
Non-controlling interests		–	–
		724	689
Total comprehensive income attributable to:
Owners of the Company		761	235
Non-controlling interests		–	–
		761	235
Earnings per equity share
Basic (in $ per share)		0.17	0.16
Diluted (in $ per share)		0.17	0.16
Weighted average equity shares used in computing earnings per equity share
Basic (in shares)	2.14	4,137,234,750	4,193,747,653
Diluted (in shares)	2.14	4,142,207,951	4,199,491,985

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	Bobby Parikh Director
Bengaluru July 20, 2023	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary

Condensed Consolidated Statement of Changes in Equity

(Dollars in millions except equity share data)

	Number of 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, 2022	4,193,012,929	328	337	11,672	1,170	21	1	(3,588)	9,941	53	9,994
Impact on adoption of amendment to IAS 37##	–	–	–	(2)	–	–	–	–	(2)	–	(2)
	4,193,012,929	328	337	11,670	1,170	21	1	(3,588)	9,939	53	9,992
Changes in equity for the three months ended June 30, 2022
Net profit	–	–	–	689	–	–	–	–	689	–	689
Remeasurement of the net defined benefit liability/asset, net*	–	–	–	–	–	–	–	(10)	(10)	–	(10)
Fair value changes on derivatives designated as Cash flow hedge, net*	–	–	–	–	–	–	3	–	3	–	3
Exchange differences on translation of foreign operations	–	–	–	–	–	–	–	(400)	(400)	–	(400)
Equity instruments through other comprehensive income, net*	–	–	–	–	–	–	–	(1)	(1)	–	(1)
Fair value changes on investments, net*	–	–	–	–	–	–	–	(46)	(46)	–	(46)
Total comprehensive income for the period	–	–	–	689	–	–	3	(457)	235	–	235
Shares issued on exercise of employee stock options (Refer to note 2.12)	–	–	–	–	–	–	–	–	–	–	–
Buyback of equity shares (Refer to note 2.19)**	–	–	–	–	–	–	–	–	–	–	–
Transaction cost relating to buyback*	–	–	–	–	–	–	–	–	–	–	–
Amount transferred to capital redemption reserve upon buyback	–	–	–	–	–	–	–	–	–	–	–
Employee stock compensation expense (Refer to note 2.12)	–	–	17	–	–	–	–	–	17	–	17
Income tax benefit arising on exercise of stock options	–	–	2	–	–	–	–	–	2	–	2
Transferred to other reserves	–	–	–	–	–	–	–	–	–	–	–
Transferred from other reserves on utilization	–	–	–	37	(37)	–	–	–	–	–	–
Dividends paid to non controlling interest of subsidiary	–	–	–	–	–	–	–	–	–	(3)	(3)
Dividends#	–	–	–	(856)	–	–	–	–	(856)	–	(856)
Balance as at June 30, 2022	4,193,012,929	328	356	11,540	1,133	21	4	(4,045)	9,337	50	9,387
	Number of 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, 2023	4,136,387,925	325	366	11,401	1,370	24	–	(4,314)	9,172	52	9,224
Changes in equity for the three months ended June 30, 2023
Net profit	–	–	–	724	–	–	–	–	724	–	724
Remeasurement of the net defined benefit liability/asset, net*	–	–	–	–	–	–	–	10	10	–	10
Equity instruments through other comprehensive income, net*	–	–	–	–	–	–	–	–	–	–	–
Fair value changes on derivatives designated as cash flow hedge, net*	–	–	–	–	–	–	1	–	1	–	1
Exchange differences on translation of foreign operations	–	–	–	–	–	–	–	17	17	–	17
Fair value changes on investments, net*	–	–	–	–	–	–	–	9	9	–	9
Total comprehensive income for the period	–	–	–	724	–	–	1	36	761	–	761
Shares issued on exercise of employee stock options (Refer to note 2.12)	2,066,083	–	–	–	–	–	–	–	–	–	–
Transferred on account of options not exercised	–	–	(1)	1	–	–	–	–	–	–	–
Employee stock compensation expense (Refer to note 2.12)	–	–	18	–	–	–	–	–	18	–	18
Transferred to other reserves	–	–	–	(93)	93	–	–	–	–	–	–
Transferred from other reserves on utilization	–	–	–	24	(24)	–	–	–	–	–	–
Dividends#	–	–	–	(882)	–	–	–	–	(882)	–	(882)
Balance as at June 30, 2023	4,138,454,008	325	383	11,175	1,439	24	1	(4,278)	9,069	52	9,121

* net of tax

# net of treasury shares

^## Impact on account of adoption of amendment to IAS 37 Provisions, Contingent Liabilities and Contingents Assets

⁽¹⁾ excludes treasury shares of 11,738,357 as at June 30, 2023, 12,172,119 as at April 1, 2023, 13,193,290 as at June 30, 2022 and 13,725,712 as at April 1, 2022 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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru
July 20, 2023

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 items 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	Three months ended June 30,
		2023	2022
Operating activities:
Net Profit		724	689
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization		143	123
Interest and dividend income		(35)	(36)
Finance cost		11	7
Income tax expense	2.13	294	279
Exchange differences on translation of assets and liabilities, net		(1)	10
Impairment loss recognized/(reversed) under expected credit loss model		11	6
Stock compensation expense		18	17
Other adjustments		67	17
Changes in working capital
Trade receivables and unbilled revenue		(13)	(324)
Prepayments and other assets		(19)	(165)
Trade payables		(13)	(24)
Unearned revenue		20	(1)
Other liabilities and provisions		(241)	317
Cash generated from operations		966	915
Income taxes paid		(168)	(170)
Net cash generated by operating activities		798	745
Investing activities:
Expenditure on property, plant and equipment and intangibles		(99)	(89)
Deposits placed with Corporation		(54)	(28)
Redemption of deposits placed with Corporation		31	3
Interest and dividend received		33	35
Payment for acquisition of business, net of cash acquired		–	(29)
Payment of contingent consideration pertaining to acquisition of business		–	(8)
Payments to acquire Investments
Liquid mutual funds units		(2,152)	(2,663)
Certificates of deposit		(156)	(377)
Quoted debt securities		(13)	(200)
Commercial paper		(190)	(36)
Other investments		–	(1)
Proceeds on sale of investments
Quoted debt securities		74	121
Certificates of deposit		484	281
Commercial paper		100	–
Liquid mutual funds units		2,106	2,709
Other receipts		15	3
Net cash used in investing activities		179	(279)
Financing activities:
Payment of lease liabilities		(54)	(31)
Payment of dividends		–	(856)
Payment of dividends to non-controlling interests of subsidiary		–	(3)
Other payments		(25)	(15)
Other receipts		–	9
Net cash used in financing activities		(79)	(896)
Net increase/(decrease) in cash and cash equivalents		898	(430)
Effect of exchange rate changes on cash and cash equivalents		7	(104)
Cash and cash equivalents at the beginning of the period	2.1	1,481	2,305
Cash and cash equivalents at the end of the period	2.1	2,386	1,771
Supplementary information:
Restricted cash balance	2.1	47	53
Closing cash and cash equivalents as per consolidated statement of cash flows		2,386	1,771
Less: Earmarked bank balance for dividend	2.2	(885)	–
Closing cash and cash equivalents as per Consolidated Balance Sheet	2.1	1,501	1,771

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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru
July 20, 2023

Overview and 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 strategic objective is to build a sustainable organization that remains relevant to the agenda of clients, while creating growth opportunities for employees and generating profitable returns for investors. Infosys strategy is to be a navigator for our clients as they ideate, plan and execute on their journey to a digital future.

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 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 July 20, 2023.

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 ("IASB"), 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, 2023. 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.

The material accounting policy information used in preparation of the audited condensed consolidated interim financial statements have been discussed in the respective notes.

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 interim condensed consolidated 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 consolidated 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 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 and judgements are reflected in the consolidated 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.

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 the 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.

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.

Provisions for estimated losses, if any, on incomplete 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 Group's two major tax jurisdictions are India and the United States, 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 2.13)

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. These valuations are conducted by external valuation experts. Estimates are required to be made in determining the value of contingent consideration, value of option arrangements and intangible assets. 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. (Refer to note 2.11 and 2.10.2)

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 2.8)

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 it’s 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. (Refer to note 2.10.1)

1.6 Recent accounting pronouncements

1.6.1 Standards issued but not yet effective

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

Amendments to IFRS 16 Leases	Lease Liability in a Sale and Leaseback
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments	Disclosure regarding supplier finance arrangements

Amendments to IFRS 16

On September 22, 2022, International Accounting Standards Board (IASB) has issued amendments to IFRS 16 Leases, which added requirements explaining the subsequent measurement for a sale and leaseback transaction. These amendments will not change the accounting for leases other than those arising in a sale and leaseback transaction.

The effective date for the adoption of this amendment is annual reporting periods beginning on or after January 1, 2024, although early adoption is permitted. The Group does not expect this amendment to have any significant impact in its financial statements.

Amendments to IAS 7 and IFRS 7

On May 25, 2023 International Accounting Standards Board (IASB) has issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosure which requires entities to disclose information that enables users of financial statement to assess how supplier finance arrangements affect its liabilities and cash flows and to understand the effect of supplier finance arrangements on an entity’s exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available to it.

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2024, 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
	June 30, 2023	March 31, 2023
Cash and bank deposits	1,263	1,220
Deposits with financial institutions	238	261
Total Cash and cash equivalents	1,501	1,481

Cash and cash equivalents as at June 30, 2023 and March 31, 2023 include restricted cash and bank balances of $47 million and $44 million, respectively. The restrictions are primarily on account of bank balances held by irrevocable trusts controlled by the company.

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 Earmarked bank balance for dividend

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Earmarked bank balance for dividend	885	–
Total	885	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share (approximately $0.21 per equity share) for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023. Payment date for the dividend is July 3, 2023. Earmarked bank balance for dividend represents cash which is deposited in a designated bank account only for payment of final dividend for financial year ended March 31, 2023.

2.3 Investments

The carrying value of the investments are as follows:

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
(i) Current Investments
Amortized Cost
Quoted debt securities	18	18
Fair Value through profit or loss
Liquid mutual fund units	170	119
Fair Value through other comprehensive income
Quoted Debt Securities	190	179
Certificates of deposits	115	435
Commercial Paper	182	90
Total current investments	675	841
(ii) Non-current Investments
Amortized Cost
Quoted debt securities	215	215
Fair Value through other comprehensive income
Quoted debt securities	1,152	1,221
Unquoted equity and preference securities	24	24
Fair Value through profit or loss
Target maturity fund units	50	49
Others(1)	21	21
Total Non-current investments	1,462	1,530
Total investments	2,137	2,371
Investments carried at amortized cost	233	233
Investments carried at fair value through other comprehensive income	1,663	1,949
Investments carried at fair value through profit or loss	241	189

⁽¹⁾ Uncalled capital commitments outstanding as on June 30, 2023 and March 31, 2023 was $11 million and $11 million, respectively.

Refer to note 2.4 for accounting policies on financial instruments.

Method of fair valuation:

(Dollars in millions)

Class of investment	Method	Fair value
		June 30, 2023	March 31, 2023
Liquid mutual fund units - carried at fair value through profit or loss	Quoted price	170	119
Target maturity fund units - carried at fair value through profit or loss	Quoted price	50	49
Quoted debt securities- carried at amortized cost	Quoted price and market observable inputs	261	261
Quoted debt securities- carried at fair value through other comprehensive income	Quoted price and market observable inputs	1,342	1,400
Commercial paper - carried at fair value through other comprehensive income	Market observable inputs	182	90
Certificates of deposit - carried at fair value through other comprehensive income	Market observable inputs	115	435
Unquoted equity and preference securities - carried at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model	24	24
Others - carried at fair value through profit or loss	Discounted cash flows method, Market multiples method, Option pricing model	21	21
Total		2,165	2,399

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

2.4 Financial instruments

Accounting Policy

2.4.1 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.

2.4.2 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 carried 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 carried 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 or loss.

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 such contracts is generally a bank.

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

This category includes 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 carried 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 consolidated statement of comprehensive income.

2.4.3 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.

2.4.4 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 these instruments.

2.4.5 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 Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Group considers current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates.

The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recorded is recognized as an impairment loss or gain in consolidated statement of comprehensive income.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at June 30, 2023 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)	1,501	–	–	–	–	1,501	1,501
Earmarked bank balance for dividend (Refer to note 2.2)	885	–	–	–	–	885	885
Investments (Refer to note 2.3)
Liquid mutual fund units	–	–	170	–	–	170	170
Target maturity fund units	–	–	50	–	–	50	50
Quoted debt securities	233	–	–	–	1,342	1,575	1,603(1)
Certificates of deposit	–	–	–	–	115	115	115
Commercial Papers	–	–	–	–	182	182	182
Unquoted equity and preference securities	–	–	–	24	–	24	24
Unquoted investment others	–	–	21	–	–	21	21
Trade receivables	3,191	–	–	–	–	3,191	3,191
Unbilled revenues (Refer to note 2.18)(3)	1,100	–	–	–	–	1,100	1,100
Prepayments and other assets (Refer to note 2.5)	623	–	–	–	–	623	612(2)
Derivative financial instruments	–	–	18	–	3	21	21
Total	7,533	–	259	24	1,642	9,458	9,475
Liabilities:
Trade payables	458	–	–	–	–	458	458
Lease liabilities (Refer to note 2.9)	1,034	–	–	–	–	1,034	1,034
Derivative financial instruments	–	–	5	–	1	6	6
Financial liability under option arrangements (Refer to note 2.6)	–	–	76	–	–	76	76
Other liabilities including contingent consideration (Refer to note 2.6)	2,649	–	12	–	–	2,661	2,661
Total	4,141	–	93	–	1	4,235	4,235

⁽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

The carrying value and fair value of financial instruments by categories as at March 31, 2023 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)	1,481	–	–	–	–	1,481	1,481
Investments (Refer to note 2.3)
Liquid mutual fund units	–	–	119	–	–	119	119
Target maturity fund units	–	–	49	–	–	49	49
Quoted debt securities	233	–	–	–	1,400	1,633	1,661(1)
Certificates of deposit	–	–	–	–	435	435	435
Commercial Papers	–	–	–	–	90	90	90
Unquoted equity and preference securities	–	–	–	24	–	24	24
Unquoted investments others	–	–	21	–	–	21	21
Trade receivables	3,094	–	–	–	–	3,094	3,094
Unbilled revenues(Refer to note 2.18)(3)	1,157	–	–	–	–	1,157	1,157
Prepayments and other assets (Refer to note 2.5)	624	–	–	–	–	624	614(2)
Derivative financial instruments	–	–	8	–	4	12	12
Total	6,589	–	197	24	1,929	8,739	8,757
Liabilities:
Trade payables	470	–	–	–	–	470	470
Lease liabilities (Refer to note 2.9)	1,010	–	–	–	–	1,010	1,010
Derivative financial instruments	–	–	8	–	2	10	10
Financial liability under option arrangements (Refer to note 2.6)	–	–	73	–	–	73	73
Other liabilities including contingent consideration (Refer to note 2.6)	2,112	–	12	–	–	2,124	2,124
Total	3,592	–	93	–	2	3,687	3,687

⁽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

For trade receivables, trade payables, other assets and payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

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 measured at fair value on a recurring basis as at June 30, 2023 is as follows:

(Dollars in millions)

Particulars	As at June 30, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.3)
Investments in liquid mutual fund units	170	170	–	–
Investments in target maturity fund units	50	50	–	–
Investments in quoted debt securities	1,603	1,418	185	–
Investments in certificates of deposit	115	–	115	–
Investments in commercial paper	182	–	182	–
Investments in unquoted equity and preference securities	24	–	–	24
Investments in unquoted investments others	21	–	–	21
Others
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts	21	–	21	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts	6	–	6	–
Financial liability under option arrangements (Refer to note 2.6)(1)	76	–	–	76
Liability towards contingent consideration (Refer to note 2.6)(1)	12	–	–	12

⁽¹⁾ Discount rate ranges from 10% to 17%

During the three months ended June 30, 2023, quoted debt securities of $177 million were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price.

The fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at March 31, 2023 is as follows:

(Dollars in millions)

Particulars	As at March 31, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.3)
Investments in liquid mutual fund units	119	119	–	–
Investments in target maturity fund units	49	49	–	–
Investments in quoted debt securities	1,661	1,302	359	–
Investments in certificates of deposit	435	–	435	–
Investments in commercial paper	90	–	90	–
Investments in unquoted equity and preference securities	24	–	–	24
Investments in unquoted investments others	21	–	–	21
Others
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	12	–	12	–
Liabilities
Derivative financial instruments- loss on outstanding foreign exchange forward and option contracts	10	–	10	–
Financial liability under option arrangements (Refer to note 2.6)(1)	73	–	–	73
Liability towards contingent consideration (Refer to note 2.6)(1)	12	–	–	12

⁽¹⁾ Discount rate ranges from 10% to 15%

During the year ended March 31, 2023, quoted debt securities of $47 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 $196 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, target maturity fund units, quoted debt securities, certificates of deposit, commercial paper, quoted bonds issued by government and quasi-government organizations. 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 Group’s risk management program.

2.5 Prepayments and other assets

Prepayments and other assets consist of the following:

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Rental deposits(1)	4	4
Security deposits(1)	1	1
Loans to employees(1)	33	35
Prepaid expenses(2)	377	334
Interest accrued and not due(1)	41	59
Withholding taxes and others(2)	363	398
Advance payments to vendors for supply of goods(2)	27	25
Deposit with corporations(1)(3)	309	286
Deferred contract cost(2)
Cost of obtaining a contract(2)(4)	80	104
Cost of fulfillment(2)	24	21
Net investment in sublease of right-of-use asset(1)	1	6
Other non financial assets (2)	30	32
Other financial assets(1)	96	31
Total Current prepayment and other assets	1,386	1,336
Non-current
Loans to employees(1)	4	5
Security deposits(1)	6	6
Deposit with corporations(1)(3)	12	12
Defined benefit plan assets(2)	4	4
Prepaid expenses(2)	48	41
Deferred contract cost(2)
Cost of obtaining a contract (2)(4)	23	23
Cost of fulfillment(2)	89	79
Withholding taxes and others(2)	84	83
Net investment in sublease of right-of-use asset(1)	1	37
Rental deposits(1)	29	29
Other financial assets(1)	86	113
Total Non- current prepayment and other assets	386	432
Total prepayment and other assets	1,772	1,768
(1) Financial assets carried at amortized cost	623	624

⁽²⁾ Non financial assets

Withholding taxes and others primarily consist of input tax credits and Cenvat/VAT recoverable from Government of India.

⁽³⁾ Deposit with corporation represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

⁽⁴⁾ Includes technology assets taken over by the Group from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Group in accordance with IFRS 15 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Group has entered into financing arrangements with a third party for these assets. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to $71 million. During the three months ended June 30, 2023, $2 million was settled directly by the third party to the customer on behalf of the Group and accordingly considered as non-cash transaction. (Refer to note 2.6)

2.6 Other liabilities

Other liabilities comprise the following:

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Accrued compensation to employees(1)	462	508
Accrued expenses(1)	900	949
Accrued defined benefit liability(3)	1	-
Withholding taxes and others(3)	485	442
Retention money(1)	2	2
Liabilities of controlled trusts(1)	26	26
Deferred income - government grants(3)	1	4
Liability towards contingent consideration(2)	12	12
Capital Creditors(1)	32	82
Final dividend payable to shareholders(1)(5)	795	-
Financial liability under option arrangements(2)#	76	73
Other financial liabilities(1)(4)	215	305
Total current other liabilities	3,007	2,403
Non-current
Accrued compensation to employees(1)	1	1
Accrued expenses(1)	187	198
Accrued defined benefit liability (3)	34	54
Deferred income - government grants(3)	8	5
Deferred income(3)	1	1
Other non-financial liabilities(3)	1	1
Other financial liabilities(1)(4)	29	41
Total non-current other liabilities	261	301
Total other liabilities	3,268	2,704
(1) Financial liability carried at amortized cost	2,649	2,112
(2) Financial liability carried at fair value through profit or loss	88	85

⁽³⁾ Non financial liabilities

⁽⁴⁾ Deferred contract cost (Refer to note 2.5) includes technology assets taken over by the Group from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Group in accordance with IFRS 15 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Group has entered in to financing arrangements with a third party for these assets. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to $71 million. During the three months ended June 30, 2023, $2 million was settled directly by the third party to the customer on behalf of the Group and accordingly considered as non-cash transaction.

⁽⁵⁾ Pertains to final dividend declared by the Company for fiscal 2023 and approved by the shareholders on June 28, 2023. Payment date for dividend is July 3, 2023. (Refer to note 2.19.2)

# Represents liability related to options issued by the Group over the non-controlling interests in its subsidiaries.

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 and cost of third party software and hardware.

2.7 Provisions and other contingencies

Accounting Policy

Provisions

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.

a. 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.

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

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Post sales client support and other provisions	187	159
Total provisions	187	159

Provision for post sales client support represents costs 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 interim condensed consolidated statement of comprehensive income.

As at June 30, 2023 and March 31, 2023, claims against the Group, not acknowledged as debts, (excluding demands from income tax authorities- Refer to Note 2.13) amounted to $89 million (728 crore) and $85 million (700 crore), respectively.

Legal proceedings

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.

2.8 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 charge in respect of periodic depreciation is derived at after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. 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 25 years

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

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date 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. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset.

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 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 June 30, 2023 are as follows:

(Dollars in millions)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2023	174	1,407	625	1,037	409	6	3,658
Additions	–	1	7	27	5	–	40
Deletions*	–	–	(6)	(32)	(4)	–	(42)
Translation difference	–	(5)	1	1	1	(1)	(3)
Gross carrying value as at June 30, 2023	174	1,403	627	1,033	411	5	3,653
Accumulated depreciation as at April 1, 2023	–	(552)	(468)	(709)	(300)	(5)	(2,034)
Depreciation	–	(13)	(14)	(44)	(12)	–	(83)
Accumulated depreciation on deletions*	–	–	6	32	3	–	41
Translation difference	–	1	(1)	(1)	1	–	–
Accumulated depreciation as at June 30, 2023	–	(564)	(477)	(722)	(308)	(5)	(2,076)
Capital work-in progress as at April 1, 2023							55
Carrying value as at April 1, 2023	174	855	157	328	109	1	1,679
Capital work-in progress as at June 30, 2023							61
Carrying value as at June 30, 2023	174	839	150	311	103	–	1,638

The changes in the carrying value of property, plant and equipment for the three months ended June 30, 2022 are as follows:

(Dollars in millions)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2022	188	1,481	653	1,125	423	6	3,876
Additions	–	17	11	43	12	–	83
Additions - Business Combination	–	–	1	–	–	–	1
Deletions*	–	–	(3)	(9)	(3)	–	(15)
Translation difference	(7)	(62)	(28)	(46)	(18)	–	(161)
Gross carrying value as at June 30, 2022	181	1,436	634	1,113	414	6	3,784
Accumulated depreciation as at April 1, 2022	–	(541)	(484)	(796)	(324)	(5)	(2,150)
Depreciation	–	(14)	(14)	(39)	(11)	–	(78)
Accumulated depreciation on deletions*	–	–	3	9	3	–	15
Translation difference	–	23	21	33	14	–	91
Accumulated depreciation as at June 30, 2022	–	(532)	(474)	(793)	(318)	(5)	(2,122)
Capital work-in progress as at April 1, 2022							67
Carrying value as at April 1, 2022	188	940	169	329	99	1	1,793
Capital work-in progress as at June 30, 2022							46
Carrying value as at June 30, 2022	181	904	160	320	96	1	1,708

* During the three months ended June 30, 2023, certain assets which were old and not in use having gross book value of $39 million (net book value: Nil) were retired. During the three months ended June 30, 2022, certain assets which were old and not in use having gross book value of $9 million (net book value: Nil) were retired

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

Repairs and maintenance costs are recognized in the consolidated statement of comprehensive income when incurred.

The Group had contractual commitments for capital expenditure primarily comprising of commitments for infrastructure facilities and computer equipments aggregating to $105 million and $117 million as at June 30, 2023 and March 31, 2023, respectively.

2.9 Leases

Accounting Policy

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for land, buildings and computers. 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.

As a lessee, the Group determines 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 Group’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.

Certain lease arrangements include 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 June 30, 2023:

(Dollars in millions)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2023	76	474	2	285	837
Additions*	–	30	–	68	98
Deletions	–	(1)	–	(28)	(29)
Depreciation	–	(22)	–	(23)	(45)
Translation difference	(1)	–	–	(1)	(2)
Balance as of June 30, 2023	75	481	2	301	859

^* Net of adjustments on account of modifications and lease incentives

Following are the changes in the carrying value of right-of-use assets for the three months ended June 30, 2022:

(Dollars in millions)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2022	83	489	2	62	636
Additions*	–	54	–	46	100
Deletions	–	–	–	(10)	(10)
Depreciation	–	(21)	–	(8)	(29)
Translation difference	(4)	(21)	–	(3)	(28)
Balance as of June 30, 2022	79	501	2	87	669

^* Net of adjustments on account of modifications and lease incentives

The aggregate depreciation expense on ROU assets is included in cost of sales in the interim condensed consolidated statement of comprehensive income.

The following is the break-up of current and non-current lease liabilities as of June 30, 2023 and March 31, 2023:

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Current lease liabilities	222	151
Non-current lease liabilities	812	859
Total	1,034	1,010

2.10 Goodwill and Intangible assets

2.10.1 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 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 and which represents the lowest level at which goodwill is monitored for internal management purposes. 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. Key assumptions in the cash flow projections are prepared based on current economic conditions and includes estimated long term growth rates, weighted average cost of capital and estimated operating margins.

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

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Carrying value at the beginning	882	817
Goodwill on acquisitions	–	79
Translation differences	–	(14)
Carrying value at the end	882	882

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.

2.10.2 Intangible assets

Accounting Policy

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Group has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labour, overhead costs that are directly attributable to prepare the asset for its intended use.

Impairment

Intangible 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 CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the 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 the 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) had no impairment loss been recognized for the asset in prior years.

2.11 Business combinations

Accounting policy

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

The purchase price in 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 purchase price 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 Consolidated 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 outside the scope of IFRS 3 (Revised), Business Combinations and is accounted for at carrying value of assets acquired and liabilities assumed.

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 finder’s fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

2.12 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 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 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). These instruments will generally vest over a period of 4 years The plan numbers mentioned above are further adjusted with 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 11,738,357 and 12,172,119 shares as at June 30, 2023 and March 31, 2023, 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 June 30, 2023 and March 31, 2023, respectively.

The following is the summary of grants during three months ended June 30, 2023 and June 30, 2022:

	2019 Plan		2015 Plan
Particulars	Three months ended June 30,		Three months ended June 30,
	2023	2022	2023	2022
Equity settled RSUs
Key Management Personnel (KMP)	78,281	176,893	333,596	101,967
Employees other than KMP	-	370,960	4,500	-
Total Grants	78,281	547,853	338,096	101,967

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of performance-based RSUs (Annual performance equity grant) of fair value of 34.75 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 2,72,026 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance equity ESG grant) of fair value of 2 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain environment, social and governance milestones as determined by the Board. Accordingly, 15,656 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance Equity TSR grant) of fair value of 5 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on Company’s performance on cumulative relative TSR over the years and as determined by the Board. Accordingly, 39,140 performance based RSU’s were granted effective May 2, 2023.

Though the annual time based grants and annual performance equity TSR grant for the remaining employment term ending on March 31, 2027 have not been granted as of June 30, 2023, since the service commencement date precedes the grant date, the company has recorded employment stock compensation expense in accordance with IFRS 2, Share based payment. The grant date for this purpose in accordance with IFRS 2, Share based payment is July 1, 2022.

Under the 2019 plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore for fiscal 2024 under the 2019 Plan. These RSUs will vest based on achievement of certain performance targets. Accordingly, 78,281 performance based RSU’s were granted effective May 2, 2023.

Other KMP

Under the 2015 plan:

During the three months ended June 30, 2023, based on recommendations of Nomination and Remuneration Committee, the Board approved 6,774 performance based RSUs to a KMP under the 2015 plan. The performance based RSUs will vest over three years based on certain performance targets.

The break-up of employee stock compensation expense is as follows:

(Dollars in millions)

Particulars	Three months ended June 30,
	2023	2022
Granted to:
KMP	2	2
Employees other than KMP	16	15
Total (1)	18	17
(1) Cash settled stock compensation expense included in the above	-	-

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 2024- Equity Shares-RSU	Fiscal 2023- Equity Shares-RSU	Fiscal 2023- ADS-RSU
Weighted average share price () / ($ ADS)	1,277	1,525	18.08
Exercise price ()/ ($ ADS)	5.00	5.00	0.07
Expected volatility (%)	25-31	23-32	27-34
Expected life of the option (years)	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3
Risk-free interest rate (%)	7	5-7	2-5
Weighted average fair value as on grant date () / ($ ADS)	1,113	1,210	13.69

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.

2.13 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 equity or 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; deferred tax assets and deferred 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 equity.

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

(Dollars in millions)

Particulars	Three months ended June 30,
	2023	2022
Current taxes
Domestic taxes	208	215
Foreign taxes	73	87
	281	302
Deferred taxes
Domestic taxes	23	4
Foreign taxes	(10)	(27)
	13	(23)
Income tax expense	294	279

Income tax expense for the three months ended June 30, 2023 and June 30, 2022 includes reversals (net of provisions) of $2 million and provisions (net of reversals) of $4 million, respectively. These provisions and reversals pertaining to prior periods are primarily on account of adjudication of certain disputed matters, upon filing of tax return and completion of assessments, across various jurisdictions.

Deferred income tax for the three months ended June 30, 2023 and June 30, 2022 substantially relates to origination and reversal of temporary differences.

The Company’s Advanced Pricing Arrangement (APA) with the Internal Revenue Service (IRS) for US branch income tax expired in March 2021. The Company has applied for renewal of APA and currently the US taxable income is based on the Company’s best estimate determined based on the expected value method.

As at June 30, 2023, claims against the Group not acknowledged as debts from the Income tax authorities amounted to $496 million (4,066 crore). As at March 31, 2023, claims against the Group not acknowledged as debts from the Income tax authorities amounted to $494 million (4,062 crore).

Amount paid to statutory authorities against the tax claims amounted to $792 million (6,498 crore) and $794 million (6,528 crore) as at June 30, 2023 and March 31, 2023 respectively.

The claims against the group primarily 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 Income Tax Authorities and the Management including the Company's 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.

2.14 Basic and diluted shares used in computing earnings per equity share

Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group 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 Group 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.

2.15 Related party transactions

Refer Note 2.20 "Related party transactions" in the Company’s 2023 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 three months ended June 30, 2023, there are no changes in the subsidiaries.

Changes in key management personnel

The following are the changes in the key management personnel:

Independent directors:

-Helene Auriol Potier (appointed as independent director effective May 26, 2023)

Executive Officers:

-Mohit Joshi (resigned as President effective March 11, 2023 and was on leave till June 9, 2023 which was his last date with the company)

Transactions with key management personnel

The table below describes the related party transactions with key management personnel which comprise directors and executive officers:

(Dollars in millions)

	Three months ended
Particulars	June 30, 2023	June 30, 2022
Salaries and other short term employee benefits to whole-time directors and executive officers(1)(2)	4	4
Commission and other benefits to non-executive/ independent directors	–	–
Total	4	4

⁽¹⁾ Total employee stock compensation expense for the three months ended June 30, 2023 and June 30, 2022 includes a charge of $2 million each, towards key managerial personnel. (Refer note 2.12)

⁽²⁾ Does not include post-employment benefits and other long-term benefits, based on actuarial valuation as these are done for the Company as a whole.

2.16 Segment reporting

IFRS 8 Operating Segments 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 (CODM) 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 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 2.17 Revenue from operations.

2.16.1 Business segments

For the three months ended June 30, 2023 and June 30, 2022

(Dollars in millions)

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	1,298	671	540	595	651	372	335	155	4,617
	1,362	645	576	549	537	363	291	121	4,444
Identifiable operating expenses	748	349	321	327	429	212	194	100	2,680
	756	326	370	294	383	216	172	85	2,602
Allocated expenses	240	124	99	111	104	62	55	38	833
	252	122	103	108	105	60	50	31	831
Segment Profit	310	198	120	157	118	98	86	17	1,104
	354	197	103	147	49	87	69	5	1,011
Unallocable expenses									143
									123
Operating profit									961
									888
Other income, net (Refer to note 2.20)									68
									87
Finance Cost									11
									7
Profit before income taxes									1,018
									968
Income tax expense									294
									279
Net profit									724
									689
Depreciation and amortization									143
									123
Non-cash expenses other than depreciation and amortization									–
									–

⁽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

2.16.2 Significant clients

No client individually accounted for more than 10% of the Revenue for the three months ended June 30, 2023 and June 30, 2022, respectively.

2.17 Revenue from Operations

Accounting Policy:

The Group derives revenues primarily from IT services comprising software development and related services, cloud and infrastructure 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 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. 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 incomplete 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.

Certain cloud and infrastructure services contracts include multiple elements which may be subject to other specific accounting guidance, such as leasing guidance. These contracts are accounted in accordance with such specific accounting guidance. In such arrangements where the Group is able to determine that hardware and services are distinct performance obligations, it allocates the consideration to these performance obligations on a relative standalone selling price basis. In the absence of standalone selling price, the Group uses the expected cost-plus margin approach in estimating the standalone selling price. When such arrangements are considered as a single performance obligation, revenue is recognized over the period and measure of progress is determined based on promise in the contract.

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.

Certain eligible, nonrecurring costs (e.g. set-up or transition or transformation costs) that do not represent a separate performance obligation are recognized as an asset when such costs (a) relate directly to the contract; (b) generate or enhance resources of the Group that will be used in satisfying the performance obligation in the future; and (c) are expected to be recovered.

Capitalized contract costs relating to upfront payments to customers are amortized to revenue and other capitalized costs are amortized to cost of sales over the respective contract life on a systematic basis consistent with the transfer of goods or services to customer to which the asset relates. Capitalized costs are monitored regularly for impairment. Impairment losses are recorded when present value of projected remaining operating cash flows is not sufficient to recover the carrying amount of the capitalized costs.

The Group presents revenues net of indirect taxes in its Consolidated Statement of Comprehensive Income.

Revenues for the three months ended June 30, 2023 and June 30, 2022 is as follows:

(Dollars in millions)

Particulars	Three months ended June 30,
	2023	2022
Revenue from software services	4,349	4,162
Revenue from products and platforms	268	282
Total revenue from operations	4,617	4,444

Products & platforms

The Group also derives revenues from the sale of products and platforms including Finacle – core banking solution, Edge Suite of products, Panaya platform, Infosys Equinox, Infosys Helix, Infosys Applied AI, Infosys Cortex, Stater digital platform and Infosys McCamish – insurance platform.

Disaggregated revenue information

Revenue disaggregation by business segments has been included in segment information (Refer note 2.16). The table below presents disaggregated revenues from contracts with customers by geography and contract type. The Group believes that 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 June 30, 2023 and June 30, 2022

(Dollars in millions)

Particulars	Three months ended June 30,
	2023	2022
Revenues by Geography*
North America	2,809	2,747
Europe	1,235	1,114
India	125	114
Rest of the world	448	469
Total	4,617	4,444

^* Geographical revenues is based on the domicile of customer.

The percentage of revenue from fixed-price contracts for each of the quarter ended June 30, 2023 and June 30, 2022 is 52%.

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 statement of balance sheet.

2.18 Unbilled Revenue

(Dollars in millions)

Particulars	As at
	June 30, 2023	March 31, 2023
Unbilled financial asset (1)	1,100	1,157
Unbilled non financial asset (2)	851	880
Total	1,951	2,037

⁽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.

2.19 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 Share 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 of equity shares has been classified as share premium. Additionally, share-based compensation recognized in net profit in the interim condensed consolidated statement of comprehensive income is credited to share premium. Amounts have been utilized for bonus issue and share buyback from share premium account.

Special Economic Zone Re-investment reserve

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 / retained earnings.

Other components of equity

Other components of equity include currency translation, re-measurement of net defined benefit liability/asset, fair value changes of equity instruments fair valued through other comprehensive income, changes on fair valuation of investments, 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 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 June 30, 2023, 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. Companies are required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

The amount of per share dividend recognized as distribution to equity shareholders in accordance with Companies Act 2013 is as follows:

Particulars	Three months ended June 30, 2023		Three months ended June 30, 2022
	in	in US Dollars	in	in US Dollars
Final dividend for fiscal 2022	–	–	16.00	0.21
Final dividend for fiscal 2023	17.50	0.21	–	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share (approximately $0.21 per equity share) for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023 which will result in a net cash outflow of 7,242 crore (approximately $882 million), excluding dividend paid on treasury shares. Payment date for the dividend is July 3, 2023.

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. 11,738,357 shares and 12,172,119 shares were held by controlled trust, as at June 30, 2023 and March 31, 2023, respectively.

2.20 Break-up of expenses and other income, net

Accounting policy

2.20.1 Gratuity and Pensions

The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees majorly 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. The Company contributes Gratuity 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 operates defined benefit pension plan in certain overseas jurisdictions, in accordance with the local laws. These plans are managed by third party fund managers. The plans provide for periodic payouts after retirement or for a lumpsum payment as set out in rules of each fund and includes death and disability benefits. The defined benefit plans require contributions which are based on a percentage of salary that varies depending on the age of the respective employees.

Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk and market risk.

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 net profits in the consolidated statement of comprehensive income.

2.20.2 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.

2.20.3 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 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.

2.20.4 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.

2.20.5 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 foreign currency assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

2.20.6 Foreign Currency

Functional currency and presentation currency

The functional currency of Infosys, Infosys BPM, EdgeVerve, Skava and controlled trusts is the Indian rupee. The functional currencies for foreign subsidiaries are their respective local currencies. These financial statements are presented in U.S. dollars (rounded off to the nearest million) to facilitate the investors’ ability

to evaluate Infosys’ performance and financial position in comparison to similar companies domiciled in other geographic locations.

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 interim condensed 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.

2.20.7 Government grants

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 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.

2.20.8 Operating Profits

Operating profit of the Group is computed considering the revenues, net of cost of sales, selling and marketing expenses and administrative expenses.

The table below provides details of break-up of expenses:

Cost of sales

(Dollars in millions)

Particulars	Three months ended June 30
	2023	2022
Employee benefit costs	2,280	2,146
Depreciation and amortization	143	123
Travelling costs	39	33
Cost of technical sub-contractors	380	504
Cost of software packages for own use	57	52
Third party items bought for service delivery to clients	271	254
Short-term leases (Refer to note 2.9)	1	1
Consultancy and professional charges	4	3
Communication costs	11	12
Repairs and maintenance	14	14
Provision for post-sales client support	6	1
Others	5	1
Total	3,211	3,144

Selling and marketing expenses

(Dollars in millions)

Particulars	Three months ended June 30
	2023	2022
Employee benefit costs	168	145
Travelling costs	11	10
Branding and marketing	32	29
Consultancy and professional charges	4	4
Others	2	5
Total	217	193

Administrative expenses

(Dollars in millions)

Particulars	Three months ended June 30
	2023	2022
Employee benefit costs	81	76
Consultancy and professional charges	35	52
Repairs and maintenance	30	28
Power and fuel	6	5
Communication costs	11	10
Travelling costs	7	6
Rates and taxes	11	10
Short-term leases (Refer to note 2.9)	1	1
Insurance charges	6	5
Impairment loss recognized/(reversed) under expected credit loss model	11	6
Contribution towards Corporate Social Responsibility	9	8
Others	20	12
Total	228	219

Other income for the three months ended June 30, 2023 and June 30, 2022 is as follows:

(Dollars in millions)

Particulars	Three months ended June 30
	2023	2022
Interest income on financial assets carried at amortized cost	33	31
Interest income on financial assets carried at fair value through other comprehensive income	30	31
Gain/(loss) on investments carried at fair value through profit or loss	6	1
Exchange gains / (losses) on forward and options contracts	16	(37)
Exchange gains / (losses) on translation of other assets and liabilities	(17)	53
Others	-	8
Total	68	87

for and on behalf of the Board of Directors of Infosys Limited

Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	Bobby Parikh Director
Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

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 June 30, 2023, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Statement of Cash Flows for the three months 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 June 30, 2023, and their consolidated profit, their consolidated total comprehensive income, their consolidated changes in equity and their consolidated cash flows for the three 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 (“SA”s) 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.

Responsibilities of Management and Those Charged with Governance 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 Boards 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 interim condensed consolidated 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 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 Boards of Directors either intend to liquidate their respective entities or to cease operations, or has 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 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 such 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: Bengaluru Date: July 20, 2023 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)     Sanjiv V. Pilgaonkar Partner (Membership No.039826) UDIN: 23039826BGXSAP7367

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Financial Statements under International Financial Reporting Standards (IFRS) in Indian Rupee for the three months ended June 30, 2023

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 Interim Condensed 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 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 Earmarked bank balance for dividend

2.3 Investments

2.4 Financial instruments

2.5 Prepayments and other assets

2.6 Other liabilities

2.7 Provisions and other contingencies

2.8 Property, plant and equipment

2.9 Leases

2.10 Goodwill and Intangible Assets

2.11 Business combinations

2.12 Employees' Stock Option Plans (ESOP)

2.13 Income Taxes

2.14 Basic and diluted shares used in computing earnings per equity share

2.15 Related party transactions

2.16 Segment reporting

2.17 Revenue from Operations

2.18 Unbilled Revenue

2.19 Equity

2.20 Break-up of expenses and other income, net

Infosys Limited and subsidiaries

(In crore except equity share data)

Condensed Consolidated Balance Sheet as at	Note	June 30, 2023	March 31, 2023
ASSETS
Current assets
Cash and cash equivalents	2.1	12,310	12,173
Earmarked bank balance for dividend	2.2	7,262	–
Current investments	2.3	5,536	6,909
Trade receivables		26,183	25,424
Unbilled revenue	2.18	14,628	15,289
Prepayments and other current assets	2.5	11,373	10,979
Income tax assets	2.13	11	6
Derivative financial instruments	2.4	171	101
Total current assets		77,474	70,881
Non-current assets
Property, plant and equipment	2.8	13,438	13,793
Right-of-use assets	2.9	7,049	6,882
Goodwill	2.10	7,233	7,248
Intangible assets		1,643	1,749
Non-current investments	2.3	11,991	12,569
Unbilled revenue	2.18	1,379	1,449
Deferred income tax assets	2.13	1,025	1,245
Income tax assets	2.13	6,922	6,453
Other non-current assets	2.5	3,168	3,547
Total non-current assets		53,848	54,935
Total assets		131,322	125,816
LIABILITIES AND EQUITY
Current liabilities
Trade payables		3,759	3,865
Lease liabilities	2.9	1,824	1,242
Derivative financial instruments	2.4	52	78
Current income tax liabilities	2.13	4,781	3,384
Unearned revenue		7,330	7,163
Employee benefit obligations		2,543	2,399
Provisions	2.7	1,538	1,307
Other current liabilities	2.6	24,668	19,748
Total current liabilities		46,495	39,186
Non-current liabilities
Lease liabilities	2.9	6,659	7,057
Deferred income tax liabilities	2.13	1,118	1,220
Employee benefit obligations		81	83
Other non-current liabilities	2.6	2,141	2,475
Total non-current liabilities		9,999	10,835
Total liabilities		56,494	50,021
Equity
Share capital - 5 par value 4,800,000,000 (4,800,000,000) equity shares authorized, issued and outstanding 4,138,454,008 (4,136,387,925) equity shares fully paid up, net of 11,738,357 (12,172,119) treasury shares as at June 30, 2023 (March 31, 2023)	2.19	2,070	2,069
Share premium		1,204	1,065
Retained earnings		58,214	60,063
Cash flow hedge reserves		1	(5)
Other reserves		10,572	10,014
Capital redemption reserve		169	169
Other components of equity		2,213	2,032
Total equity attributable to equity holders of the Company		74,443	75,407
Non-controlling interests		385	388
Total equity		74,828	75,795
Total liabilities and equity		131,322	125,816

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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

Infosys Limited and subsidiaries

(In crore except equity share and per equity share data)

Condensed Consolidated Statement of Comprehensive Income for the		Three months ended June 30,
	Note	2023	2022
Revenues	2.17	37,933	34,470
Cost of sales	2.20	26,382	24,369
Gross profit		11,551	10,101
Operating expenses
Selling and marketing expenses	2.20	1,783	1,493
Administrative expenses	2.20	1,877	1,694
Total operating expenses		3,660	3,187
Operating profit		7,891	6,914
Other income, net	2.20	561	676
Finance cost		90	56
Profit before income taxes		8,362	7,534
Income tax expense	2.13	2,417	2,172
Net profit		5,945	5,362
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		87	(86)
Equity instruments through other comprehensive income, net	2.3	1	3
		88	(83)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		6	26
Exchange differences on translation of foreign operations		15	53
Fair value changes on investments, net	2.3	75	(372)
		96	(293)
Total other comprehensive income/(loss), net of tax		184	(376)
Total comprehensive income		6,129	4,986
Profit attributable to:
Owners of the Company		5,945	5,360
Non-controlling interests		–	2
		5,945	5,362
Total comprehensive income attributable to:
Owners of the Company		6,132	4,986
Non-controlling interests		(3)	–
		6,129	4,986
Earnings per equity share
Equity shares of par value 5/- each
Basic ()		14.37	12.78
Diluted ()		14.35	12.76
Weighted average equity shares used in computing earnings per equity share
Basic (in shares)	2.14	4,137,234,750	4,193,747,653
Diluted (in shares)	2.14	4,142,207,951	4,199,491,985

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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

Infosys Limited and subsidiaries

(In crore except equity share data)

Condensed Consolidated Statement of Changes in Equity	Number of 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, 2022	4,193,012,929	2,098	827	62,423	8,339	139	1,522	2	75,350	386	75,736
Impact on adoption of amendment to IAS 37##	–	–	–	(19)	–	–	–	–	(19)	–	(19)
	4,193,012,929	2,098	827	62,404	8,339	139	1,522	2	75,331	386	75,717
Changes in equity for the three months ended June 30, 2022
Net profit	–	–	–	5,360	–	–	–	–	5,360	2	5,362
Remeasurement of the net defined benefit liability/asset, net*	–	–	–	–	–	–	(86)	–	(86)	–	(86)
Fair value changes on derivatives designated as Cash flow hedge, net*	–	–	–	–	–	–	–	26	26	–	26
Exchange differences on translation of foreign operations	–	–	–	–	–	–	55	–	55	(2)	53
Equity instruments through other comprehensive income, net*	–	–	–	–	–	–	3	–	3	–	3
Fair value changes on investments, net*	–	–	–	–	–	–	(372)	–	(372)	–	(372)
Total comprehensive income for the period	–	–	–	5,360	–	–	(400)	26	4,986	–	4,986
Shares issued on exercise of employee stock options (Refer to note 2.12)	1,414,500	–	2	–	–	–	–	–	2	–	2
Employee stock compensation expense (Refer to note 2.12)	–	–	134	–	–	–	–	–	134	–	134
Income tax benefit arising on exercise of stock options (Refer to note 2.13)	–	–	14	–	–	–	–	–	14	–	14
Transfer on account of options not exercised	–	–	(1)	1	–	–	–	–	–	–	–
Transferred from other reserves on utilization	–	–	–	296	(296)	–	–	–	–	–	–
Dividends paid to non controlling interest of subsidiary	–	–	–	–	–	–	–	–	–	(21)	(21)
Dividends#	–	–	–	(6,711)	–	–	–	–	(6,711)	–	(6,711)
Balance as at June 30, 2022	4,194,427,429	2,098	976	61,350	8,043	139	1,122	28	73,756	365	74,121
Balance as at April 1, 2023	4,136,387,925	2,069	1,065	60,063	10,014	169	2,032	(5)	75,407	388	75,795
Changes in equity for three months ended June 30, 2023
Net profit	–	–	–	5,945	–	–	–	–	5,945	–	5,945
Remeasurement of the net defined benefit liability/asset, net*	–	–	–	–	–	–	87	–	87	–	87
Equity instruments through other comprehensive income, net*	–	–	–	–	–	–	1	–	1	–	1
Fair value changes on derivatives designated as cash flow hedge, net*	–	–	–	–	–	–	–	6	6	–	6
Exchange differences on translation of foreign operations	–	–	–	–	–	–	18	–	18	(3)	15
Fair value changes on investments, net*	–	–	–	–	–	–	75	–	75	–	75
Total comprehensive income for the period	–	–	–	5,945	–	–	181	6	6,132	(3)	6,129
Shares issued on exercise of employee stock options (Refer to note 2.12)	2,066,083	1	1	–	–	–	–	–	2	–	2
Transferred on account of options not exercised	–	–	(6)	6	–	–	–	–	–	–	–
Employee stock compensation expense (Refer to note 2.12)	–	–	144	–	–	–	–	–	144	–	144
Transferred to other reserves	–	–	–	(760)	760	–	–	–	–	–	–
Transferred from other reserves on utilization	–	–	–	202	(202)	–	–	–	–	–	–
Dividends#	–	–	–	(7,242)	–	–	–	–	(7,242)	–	(7,242)
Balance as at June 30, 2023	4,138,454,008	2,070	1,204	58,214	10,572	169	2,213	1	74,443	385	74,828

* net of tax

^## Impact on account of adoption of amendment to Ind AS 37 Provisions, Contingent Liabilities and Contingents Assets

^# net of treasury shares

⁽¹⁾ excludes treasury shares of 11,738,357 as at June 30, 2023, 12,172,119 as at April 1, 2023, 13,193,290 as at June 30, 2022 and 13,725,712 as at April 1, 2022 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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

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		Three months ended June 30,
	Note	2023	2022
Operating activities:
Net Profit		5,945	5,362
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization		1,173	950
Income tax expense	2.13	2,417	2,172
Finance cost		90	56
Interest and dividend income		(278)	(280)
Exchange differences on translation of assets and liabilities, net		(20)	79
Impairment loss recognised/(reversed) under expected credit loss model		91	44
Stock compensation expense		146	132
Other adjustments		558	126
Changes in working capital
Trade receivables and unbilled revenue		(101)	(2,520)
Prepayments and other assets		(158)	(1,280)
Trade payables		(106)	(184)
Unearned revenue		167	(9)
Other liabilities and provisions		(1,989)	2,475
Cash generated from operations		7,935	7,123
Income taxes paid		(1,379)	(1,325)
Net cash generated by operating activities		6,556	5,798
Investing activities:
Expenditure on property, plant and equipment and intangibles		(807)	(692)
Deposits placed with corporation		(444)	(216)
Redemption of deposits placed with corporation		252	22
Interest and dividend received		275	274
Payment for acquisition of business, net of cash acquired		–	(230)
Payment of contingent consideration pertaining to acquisition of business		–	(60)
Payments to acquire Investments
- Quoted debt securities		(104)	(1,545)
- Liquid mutual fund units		(17,680)	(20,745)
- Certificates of deposit		(1,285)	(2,931)
- Commercial paper		(1,558)	(283)
- Other investments		(3)	(10)
Proceeds on sale of investments
- Quoted debt securities		601	931
- Liquid mutual fund units		17,304	21,097
- Certificates of deposit		3,974	2,188
- Commercial paper		824	–
Other receipts		126	22
Net cash (used)/generated in investing activities		1,475	(2,178)
Financing activities:
Payment of lease liabilities		(439)	(250)
Payment of dividends		(1)	(6,712)
Payment of dividends to non-controlling interests of subsidiary		–	(21)
Other payments		(209)	(112)
Other receipts		–	72
Shares issued on exercise of employee stock options		2	2
Net cash used in financing activities		(647)	(7,021)
Net increase/(decrease) in cash and cash equivalents		7,384	(3,401)
Effect of exchange rate changes on cash and cash equivalents		15	(89)
Cash and cash equivalents at the beginning of the period	2.1	12,173	17,472
Cash and cash equivalents at the end of the period	2.1	19,572	13,982
Supplementary information:
Restricted cash balance	2.1	381	422
Closing cash and cash equivalents as per consolidated statement of cash flows		19,572	13,982
Less: Earmarked bank balance for dividend	2.2	7,262	–
Closing cash and cash equivalents as per Consolidated Balance Sheet		12,310	13,982

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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

INFOSYS LIMITED AND SUBSIDIARIES

Overview and 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 strategic objective is to build a sustainable organization that remains relevant to the agenda of clients, while creating growth opportunities for employees and generating profitable returns for investors. Infosys strategy is to be a navigator for our clients as they ideate, plan and execute on their journey to a digital future.

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 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 July 20, 2023.

1.2 Basis of preparation of financial statements

These interim consolidated financial statements have been prepared in compliance with IAS 34, Interim Financial Reporting as issued by International Accounting Standards Board, ("IASB") under the historical cost convention on 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, 2023. 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.

The material accounting policy information used in preparation of the audited condensed consolidated interim financial statements have been discussed in the respective notes.

1.3 Basis of consolidation

Infosys consolidates entities which it owns or controls. The interim 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 judgments

The preparation of the interim condensed consolidated 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 consolidated 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 and judgments 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.

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 the 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 a 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 the 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.

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.

Provisions for estimated losses, if any, on incomplete 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 Group's two major tax jurisdictions are India and the United States, 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, the 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, the 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 2.13)

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 fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. These valuations are conducted by external valuation experts. Estimates are required to be made in determining the value of contingent consideration, value of option arrangements and intangible assets. 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. (Refer to Note 2.11 and 2.10.2).

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 2.8).

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. (Refer to note 2.10.1)

1.6 Recent accounting pronouncements

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

Amendments to IFRS 16 Leases	Lease Liability in a Sale and Leaseback
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments	Disclosure regarding supplier finance arrangements

Amendments to IFRS 16

On September 22, 2022, International Accounting Standards Board (IASB) has issued amendments to IFRS 16 Leases, which added requirements explaining the subsequent measurement for a sale and leaseback transaction. These amendments will not change the accounting for leases other than those arising in a sale and leaseback transaction.

The effective date for the adoption of this amendment is annual reporting periods beginning on or after January 1, 2024, although early adoption is permitted. The Group does not expect this amendment to have any significant impact in its financial statements.

Amendments to IAS 7 and IFRS 7

On May 25, 2023 International Accounting Standards Board (IASB) has issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosure which requires entities to disclose information that enables users of financial statement to assess how supplier finance arrangements affect its liabilities and cash flows and to understand the effect of supplier finance arrangements on an entity’s exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available to it.

The effective date for adoption of this amendment is annual periods beginning on or after January 1, 2024, 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
	June 30, 2023	March 31, 2023
Cash and bank deposits	10,363	10,026
Deposits with financial institutions	1,947	2,147
Total Cash and cash equivalents	12,310	12,173

Cash and cash equivalents as at June 30, 2023 and March 31, 2023 include restricted cash and bank balances of 381 crore and 362 crore, respectively. The restrictions are primarily on account of bank balances held by irrevocable trusts controlled by the Company.

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 Earmarked bank balance for dividend

Cash and cash equivalents consist of the following:

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Earmarked bank balance for dividend	7,262	–
Total	7,262	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023. Payment date for the dividend is July 3, 2023. Earmarked bank balance for dividend represents cash which is deposited in a designated bank account only for payment of final dividend for financial year ended March 31, 2023.

2.3 Investments

The carrying value of investments are as follows:

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
(i) Current Investments
Amortized Cost
Quoted debt securities	150	150
Fair Value through profit or loss
Liquid mutual fund units	1,397	975
Fair Value through other comprehensive income
Quoted Debt Securities	1,554	1,468
Commercial Papers	1,496	742
Certificate of Deposit	939	3,574
Total current investments	5,536	6,909
(ii) Non-current Investments
Amortized Cost
Quoted debt securities	1,767	1,770
Fair Value through other comprehensive income
Quoted debt securities	9,447	10,032
Unquoted equity and preference securities	196	196
Fair Value through profit or loss
Target maturity fund units	409	402
Others(1)	172	169
Total non-current investments	11,991	12,569
Total investments	17,527	19,478
Investments carried at amortized cost	1,917	1,920
Investments carried at fair value through other comprehensive income	13,632	16,012
Investments carried at fair value through profit or loss	1,978	1,546

⁽¹⁾ Uncalled capital commitments outstanding as at June 30, 2023 and March 31, 2023 was 88 crore and 92 crore, respectively.

Refer to note 2.4 for accounting policies on financial instruments.

Method of fair valuation:

(In crore)

Class of investment	Method	Fair value as at
		June 30, 2023	March 31, 2023
Liquid mutual fund units - carried at fair value through profit or loss	Quoted price	1,397	975
Target maturity fund units - carried at fair value through profit or loss	Quoted price	409	402
Quoted debt securities- carried at amortized cost	Quoted price and market observable inputs	2,153	2,148
Quoted debt securities- carried at fair value through other comprehensive income	Quoted price and market observable inputs	11,001	11,500
Commercial Papers- carried at fair value through other comprehensive income	Market observable inputs	1,496	742
Certificates of Deposit- carried at fair value through other comprehensive income	Market observable inputs	939	3,574
Unquoted equity and preference securities - carried at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model	196	196
Others - carried at fair Value through profit or loss	Discounted cash flows method, Market multiples method, Option pricing model	172	169
Total		17,763	19,706

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

2.4 Financial instruments

Accounting Policy

2.4.1 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 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.

2.4.2 Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets 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 or loss.

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 such contracts is generally a bank.

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

This category includes 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 interim consolidated 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 interim consolidated 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 consolidated 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.

2.4.3 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.

2.4.4 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 these instruments.

2.4.5 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 Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Group considers current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates.

The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recorded is recognized as an impairment loss or gain in the interim consolidated statement of comprehensive income.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at June 30, 2023 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 to note 2.1)	12,310	–	–	–	–	12,310	12,310
Earmarked bank balance for dividend (Refer Note no. 2.2)	7,262	–	–	–	–	7,262	7,262
Investments (Refer to note 2.3)
Liquid mutual fund units	–	–	1,397	–	–	1,397	1,397
Target maturity fund units	–	–	409	–	–	409	409
Quoted debt securities	1,917	–	–	–	11,001	12,918	13,154 (1)
Commercial Papers	–	–	–	–	1,496	1,496	1,496
Certificates of deposit	–	–	–	–	939	939	939
Unquoted equity and preference securities	–	–	–	196	–	196	196
Unquoted investment others	–	–	172	–	–	172	172
Trade receivables	26,183	–	–	–	–	26,183	26,183
Unbilled revenues (Refer to note 2.18)(3)	9,027	–	–	–	–	9,027	9,027
Prepayments and other assets (Refer to note 2.5)	5,106	–	–	–	–	5,106	5,014 (2)
Derivative financial instruments	–	–	149	–	22	171	171
Total	61,805	–	2,127	196	13,458	77,586	77,730
Liabilities:
Trade payables	3,759	–	–	–	–	3,759	3,759
Lease liabilities (Refer to note 2.9)	8,483	–	–	–	–	8,483	8,483
Derivative financial instruments	–	–	46	–	6	52	52
Financial liability under option arrangements (Refer to note 2.6)	–	–	627	–	–	627	627
Other liabilities including contingent consideration (Refer to note 2.6)	21,735	–	99	–	–	21,834	21,834
Total	33,977	–	772	–	6	34,755	34,755

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

⁽²⁾ Excludes interest accrued on quoted debt securities carried at amortized cost of 92 crore.

⁽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, 2023 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 to note 2.1)	12,173	–	–	–	–	12,173	12,173
Investments (Refer to note 2.3)
Liquid mutual fund units	–	–	975	–	–	975	975
Target maturity fund units	–	–	402	–	–	402	402
Quoted debt securities	1,920	–	–	–	11,500	13,420	13,648 (1)
Commercial Paper	–	–	–	–	742	742	742
Certificates of deposit	–	–	–	–	3,574	3,574	3,574
Unquoted equity and preference securities	–	–	–	196	–	196	196
Unquoted investments others	–	–	169	–	–	169	169
Trade receivables	25,424	–	–	–	–	25,424	25,424
Unbilled revenue (Refer to note 2.18)(3)	9,502	–	–	–	–	9,502	9,502
Prepayments and other assets (Refer to note 2.5)	5,127	–	–	–	–	5,127	5,043 (2)
Derivative financial instruments	–	–	69	–	32	101	101
Total	54,146	–	1,615	196	15,848	71,805	71,949
Liabilities:
Trade payables	3,865	–	–	–	–	3,865	3,865
Lease liabilities (Refer to note 2.9)	8,299	–	–	–	–	8,299	8,299
Derivative financial instruments	–	–	64	–	14	78	78
Financial liability under option arrangements (Refer to note 2.6)	–	–	600	–	–	600	600
Other liabilities including contingent consideration (Refer to note 2.6)	17,359	–	97	–	–	17,456	17,456
Total	29,523	–	761	–	14	30,298	30,298

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

⁽²⁾ Excludes interest accrued on quoted debt securities carried at amortized cost of 84 crore.

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

For trade receivables, trade payables and other assets and payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

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 measured at fair value on a recurring basis as at June 30, 2023 is as follows:

(In crore)

Particulars	As at June 30, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.3)
Investments in liquid mutual fund units	1,397	1,397	–	–
Investments in target maturity fund units	409	409	–	–
Investments in quoted debt securities	13,154	11,634	1,520	–
Investments in unquoted equity and preference securities	196	–	–	196
Investments in certificates of deposit	939	–	939	–
Investments in commercial papers	1,496	–	1,496	–
Investments in unquoted investments others	172	–	–	172
Others
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts	171	–	171	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts	52	–	52	–
Financial liability under option arrangements (Refer to note 2.6)(1)	627	–	–	627
Liability towards contingent consideration (Refer to note 2.6)(1)	99	–	–	99

⁽¹⁾ Discount rate ranges from 10% to 17%

During the three months ended June 30, 2023, quoted debt securities of 1,449 crore were transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price.

The fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at March 31, 2023 was as follows:

(In crore)

Particulars	As at March 31, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.3)
Investments in liquid mutual fund units	975	975	–	–
Investments in target maturity fund units	402	402	–	–
Investments in quoted debt securities	13,648	10,701	2,947	–
Investments in unquoted equity and preference securities	196	–	–	196
Investments in certificates of deposit	3,574	–	3,574	–
Investments in commercial papers	742	–	742	–
Investments in unquoted investments others	169	–	–	169
Others
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	101	–	101	–
Liabilities
Derivative financial instruments- loss on outstanding foreign exchange forward and option contracts	78	–	78	–
Financial liability under option arrangements (Refer to note 2.6)(1)	600	–	–	600
Liability towards contingent consideration (Refer to note 2.6)(1)	97	–	–	97

⁽¹⁾ Discount rate ranges from 10% to 15%

During the year ended March 31, 2023, quoted debt securities of 383 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 1,611 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, target maturity fund units, quoted debt securities, certificates of deposit, commercial paper, quoted bonds issued by government and quasi-government organizations. 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 Group’s risk management program.

2.5 Prepayments and other assets

Prepayments and other assets consist of the following:

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Rental deposits(1)	30	32
Security deposits(1)	11	10
Loans to employees(1)	267	289
Prepaid expenses(2)	3,097	2,745
Interest accrued and not due(1)	335	488
Withholding taxes and others(2)	2,978	3,268
Advance payments to vendors for supply of goods(2)	222	202
Deposit with corporations(1)(3)	2,532	2,348
Deferred contract cost(2)
Cost of obtaining a contract (2)(4)	657	853
Cost of fulfillment (2)	200	175
Net investment in sublease of right of use asset(1)	5	53
Other non financial assets (2)	249	261
Other financial assets(1)	790	255
Total Current prepayment and other assets	11,373	10,979
Non-current
Loans to employees(1)	34	39
Deposit with corporations(1)(3)	104	96
Rental deposits(1)	240	240
Security deposits(1)	46	47
Withholding taxes and others(2)	685	684
Deferred contract cost(2)
Cost of obtaining a contract (2)(4)	189	191
Cost of fulfillment (2)	729	652
Prepaid expenses(2)	395	332
Net investment in sublease of right of use asset(1)	6	305
Defined benefit plan assets(2)	34	36
Other financial assets(1)	706	925
Total Non- current prepayment and other assets	3,168	3,547
Total prepayment and other assets	14,541	14,526
(1) Financial assets carried at amortized cost	5,106	5,127

⁽²⁾ Non financial assets

Withholding taxes and others primarily consist of input tax credits and Cenvat/VAT recoverable from Government of India.

⁽³⁾ Deposit with corporations represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

⁽⁴⁾ Includes technology assets taken over by the Group from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Group in accordance with IFRS 15 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Group has entered into financing arrangements with a third party for these assets. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to 582 crore. During the three months ended June 30, 2023, 20 crore was settled directly by the third party to the customer on behalf of the Group and accordingly considered as non-cash transaction (Refer to note 2.6)

2.6 Other liabilities

Other liabilities comprise the following:

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Accrued compensation to employees(1)	3,794	4,174
Accrued expenses(1)	7,384	7,802
Withholding taxes and others(3)	3,975	3,632
Retention money(1)	15	20
Liabilities of controlled trusts(1)	211	211
Deferred income - government grants(3)	11	29
Accrued defined benefit liability (3)	4	4
Liability towards contingent consideration(2)	99	97
Capital Creditors(1)	263	674
Final dividend payable to shareholders(1)(5)	6,523	–
Other non-financial liabilities (3)	2	2
Other financial liabilities(1)(4)	1,760	2,503
Financial liability under option arrangements(2)#	627	600
Total current other liabilities	24,668	19,748
Non-current
Accrued expenses(1)	1,535	1,628
Accrued defined benefit liability (3)	280	445
Accrued compensation to employees(1)	7	5
Deferred income - government grants(3)	63	43
Deferred income(3)	6	6
Other financial liabilities(1)(4)	243	342
Other non-financial liabilities(3)	7	6
Total non-current other liabilities	2,141	2,475
Total other liabilities	26,809	22,223
(1) Financial liability carried at amortized cost	21,735	17,359
(2) Financial liability carried at fair value through profit or loss	726	697

⁽³⁾ Non financial liabilities

⁽⁴⁾ Deferred contract cost (Refer to note 2.5) includes technology assets taken over by the Group from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Group in accordance with IFRS 15 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Group has entered into financing arrangements with a third party for these assets. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to 582 crore. During the three months ended June 30, 2023, 20 crore was settled directly by the third party to the customer on behalf of the Group and accordingly considered as non-cash transaction.

⁽⁵⁾ Pertains to final dividend declared by the Company for fiscal 23 and approved by the shareholders on June 28, 2023. Payment date for dividend is July 3, 2023 (refer to note 2.19.1)

# Represents liability related to options issued by the Group over the non-controlling interests in its subsidiaries

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 and cost of third party software and hardware.

2.7 Provisions and other contingencies

Accounting Policy

Provisions

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 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.

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 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.

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. Provisions for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete 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
	June 30, 2023	March 31, 2023
Post sales client support and other provisions	1,538	1,307
Total provisions	1,538	1,307

Provision for post sales client support 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 interim consolidated statement of comprehensive income.

As at June 30, 2023 and March 31, 2023 claims against the Group, not acknowledged as debts, (excluding demands from income tax authorities - Refer to note 2.13) amounted to 728 crore and 700 crore respectively.

Legal proceedings

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.

2.8 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 charge in respect of periodic depreciation is derived at after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. 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 25 years

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

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date 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. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset.

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 interim condensed consolidated 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 consolidated 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.

The changes in the carrying value of property, plant and equipment for the three months ended June 30, 2023 are as follows:

(In crore)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2023	1,429	11,562	5,169	8,519	3,365	45	30,089
Additions	–	5	58	219	45	–	327
Deletions*	–	–	(51)	(266)	(29)	–	(346)
Translation difference	–	(53)	(6)	(1)	(8)	–	(68)
Gross carrying value as at June 30, 2023	1,429	11,514	5,170	8,471	3,373	45	30,002
Accumulated depreciation as at April 1, 2023	–	(4,535)	(3,877)	(5,826)	(2,465)	(40)	(16,743)
Depreciation	–	(109)	(117)	(362)	(100)	(1)	(689)
Accumulated depreciation on deletions*	–	–	50	265	28	–	343
Translation difference	–	13	5	1	7	–	26
Accumulated depreciation as at June 30, 2023	–	(4,631)	(3,939)	(5,922)	(2,530)	(41)	(17,063)
Capital work-in progress as at April 1, 2023							447
Carrying value as at April 1, 2023	1,429	7,027	1,292	2,693	900	5	13,793
Capital work-in progress as at June 30, 2023							499
Carrying value as at June 30, 2023	1,429	6,883	1,231	2,549	843	4	13,438

* During the three months ended June 30, 2023, certain assets which were not in use having gross book value of 320 crore (net book value: Nil) were retired.

The changes in the carrying value of property, plant and equipment for the three months ended June 30, 2022 were as follows:

(In crore)

Particulars	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Total
Gross carrying value as at April 1, 2022	1,429	11,224	4,950	8,527	3,201	44	29,375
Additions - Business Combination	–	–	5	3	3	–	11
Additions	–	132	87	333	96	–	648
Deletions*	–	–	(23)	(71)	(28)	–	(122)
Translation difference	–	(13)	(2)	(2)	(1)	–	(18)
Gross carrying value as at June 30, 2022	1,429	11,343	5,017	8,790	3,271	44	29,894
Accumulated depreciation as at April 1, 2022	–	(4,100)	(3,677)	(6,034)	(2,452)	(37)	(16,300)
Depreciation	–	(107)	(112)	(301)	(85)	(1)	(606)
Accumulated depreciation on deletions*	–	–	23	71	28	–	122
Translation difference	–	2	2	–	–	–	4
Accumulated depreciation as at June 30, 2022	–	(4,205)	(3,764)	(6,264)	(2,509)	(38)	(16,780)
Capital work-in progress as at April 1, 2022							504
Carrying value as at April 1, 2022	1,429	7,124	1,273	2,493	749	7	13,579
Capital work-in progress as at June 30, 2022							365
Carrying value as at June 30, 2022	1,429	7,138	1,253	2,526	762	6	13,479

* During the three months ended June 30, 2022, certain assets which were not in use having gross book value of 68 crore (net book value: Nil) were retired.

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

Repairs and maintenance costs are recognized in the interim condensed consolidated statement of comprehensive income when incurred.

The Group had contractual commitments for capital expenditure primarily comprising of commitments for infrastructure facilities and computer equipment aggregating to 861 crore and 959 crore as at June 30, 2023 and March 31, 2023, respectively.

2.9 Leases

Accounting Policy

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for land, buildings and computers. 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.

As a lessee, the Group determines 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 Group’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.

Certain lease arrangements include 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 June 30, 2023:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2023	623	3,896	15	2,348	6,882
Additions*	–	244	2	557	803
Deletions	–	(8)	–	(233)	(241)
Depreciation	(2)	(184)	(2)	(192)	(380)
Translation difference	(4)	(1)	–	(10)	(15)
Balance as of June 30, 2023	617	3,947	15	2,470	7,049

* Net of adjustments on account of modifications and lease incentives

Following are the changes in the carrying value of right-of-use assets for the three months ended June 30, 2022:

(In crore)

Particulars	Category of ROU asset				Total
	Land	Buildings	Vehicles	Computers
Balance as of April 1, 2022	628	3,711	16	468	4,823
Additions*	–	419	1	352	772
Deletions	–	(1)	–	(76)	(77)
Depreciation	(1)	(162)	(3)	(59)	(225)
Translation difference	(1)	(10)	–	1	(10)
Balance as of June 30, 2022	626	3,957	14	686	5,283

* Net of adjustments on account of modifications and lease incentives

The aggregate depreciation expense on ROU assets is included in cost of sales in the interim condensed consolidated statement of comprehensive income.

The following is the break-up of current and non-current lease liabilities as of June 30, 2023 and March 31, 2023:

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current lease liabilities	1,824	1,242
Non-current lease liabilities	6,659	7,057
Total	8,483	8,299

2.10 Goodwill and Intangible assets

2.10.1 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 and which represents the lowest level at which goodwill is monitored for internal management purposes. 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. Key assumptions in the cash flow projections are prepared based on current economic conditions and includes estimated long term growth rates, weighted average cost of capital and estimated operating margins.

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

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Carrying value at the beginning	7,248	6,195
Goodwill on acquisitions (Refer to Note 2.11)	–	630
Translation differences	(15)	423
Carrying value at the end	7,233	7,248

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.

2.10.2 Intangible assets

Accounting Policy

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the group has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use.

Impairment

Intangible 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 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) had no impairment loss been recognized for the asset in prior years.

2.11 Business combinations

Accounting policy

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

The purchase price in 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 purchase price 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 Interim Condensed Consolidated 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 outside the scope of IFRS 3 (Revised), Business Combinations and is accounted for at carrying value of assets acquired and liabilities assumed.

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 derecognized.

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.

2.12 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 interim condensed 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 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 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). These instruments will generally vest over a period of 4 years. The plan numbers mentioned above are further adjusted with 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 11,738,357 and 12,172,119 shares as at June 30, 2023 and March 31, 2023, respectively under the 2015 plan, out of which 200,000 equity shares each have been earmarked for welfare activities of the employees as at June 30, 2023 and March 31, 2023.

The following is the summary of grants made during the three months ended June 30, 2023 and June 30, 2022:

	2019 Plan		2015 Plan
Particulars	Three months ended June 30,		Three months ended June 30,
	2023	2022	2023	2022
Equity settled RSUs
Key Managerial Personnel (KMP)	78,281	176,893	333,596	101,967
Employees other than KMP	–	370,960	4,500	–
Total Grants	78,281	547,853	338,096	101,967

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of performance-based RSUs (Annual performance equity grant) of fair value of 34.75 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 2,72,026 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance equity ESG grant) of fair value of 2 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain environment, social and governance milestones as determined by the Board. Accordingly, 15,656 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance Equity TSR grant) of fair value of 5 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on Company’s performance on cumulative relative TSR over the years and as determined by the Board. Accordingly, 39,140 performance based RSU’s were granted effective May 2, 2023.

Though the annual time based grants and annual performance equity TSR grant for the remaining employment term ending on March 31, 2027 have not been granted as of June 30, 2023, 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 grant date for this purpose in accordance with IFRS 2, Share based payments is July 1, 2022.

Under the 2019 plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore for fiscal 2024 under the 2019 Plan. These RSUs will vest based on achievement of certain performance targets. Accordingly, 78,281 performance based RSU’s were granted effective May 2, 2023.

Other KMP

Under the 2015 plan:

During the three months ended June 30, 2023, based on recommendations of Nomination and Remuneration Committee, the Board approved 6,774 performance based RSUs to a KMP under the 2015 plan. The performance based RSUs will vest over three years based on certain performance targets.

The break-up of employee stock compensation expense is as follows:

(in crore)

Particulars	Three months ended June 30,
	2023	2022
Granted to:
KMP	20	17
Employees other than KMP	126	115
Total (1)	146	132
(1) Cash settled stock compensation expense included in the above	2	(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 2024- Equity Shares-RSU	Fiscal 2023- Equity Shares-RSU	Fiscal 2023- ADS-RSU
Weighted average share price () / ($ ADS)	1,277	1,525	18.08
Exercise price ()/ ($ ADS)	5.00	5.00	0.07
Expected volatility (%)	25-31	23-32	27-34
Expected life of the option (years)	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3
Risk-free interest rate (%)	7	5-7	2-5
Weighted average fair value as on grant date () / ($ ADS)	1,113	1,210	13.69

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/Stock option.

2.13 Income Taxes

Accounting policy

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the Interim Condensed 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 equity or 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; deferred tax assets and deferred 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 equity.

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

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Current taxes
Domestic taxes	1,708	1,670
Foreign taxes	599	680
	2,307	2,350
Deferred taxes
Domestic taxes	192	30
Foreign taxes	(82)	(208)
	110	(178)
Income tax expense	2,417	2,172

Income tax expense for the three months ended June 30, 2023 and June 30, 2022 includes reversals (net of provisions) of 15 crore and provisions (net of reversals) of 35 crore, respectively. These provisions and reversals pertaining to prior periods are primarily on account of adjudication of certain disputed matters, upon filing of tax return and completion of assessments, across various jurisdictions.

Deferred income tax for the three months ended June 30, 2023 and June 30, 2022 substantially relates to origination and reversal of temporary differences.

The Company’s Advanced Pricing Arrangement (APA) with the Internal Revenue Service (IRS) for US branch income tax expired in March 2021. The Company has applied for renewal of APA and currently the US taxable income is based on the Company’s best estimate determined based on the expected value method.

As at June 30, 2023, claims against the Group not acknowledged as debts from the Income tax authorities amounted to 4,066 crore.

As at March 31, 2023, claims against the Group not acknowledged as debts from the Income tax authorities amounted to 4,062 crore.

The amount paid to statutory authorities against the tax claims amounted to 6,498 crore and 6,528 crore as at June 30, 2023 and March 31, 2023, respectively.

The claims against the group primarily 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 Income Tax 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.

2.14 Basic and diluted shares used in computing earnings per equity share

Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group 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 Group 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.

2.15 Related party transactions

Refer to note 2.14 "Related party transactions" in the Company’s 2023 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 three months ended June 30, 2023, there are no changes in the subsidiaries.

Change in key management personnel

The following are the changes in the key management personnel:

Independent directors:

-Helene Auriol Potier (appointed as independent director effective May 26, 2023)

Executive Officers:

-Mohit Joshi (resigned as President effective March 11, 2023 and was on leave till June 9, 2023 which was his last date with the company)

Transactions with key management personnel

The table below describes the related party transactions with key management personnel which comprise directors and executive officers:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Salaries and other short term employee benefits to whole-time directors and executive officers(1)(2)	32	32
Commission and other benefits to non-executive/ independent directors	4	4
Total	36	36

⁽¹⁾ For the three months ended June 30, 2023 and June 30, 2022, includes a charge of 20 crore and 17 crore respectively, towards employee stock compensation expense. (Refer to note 2.12).

⁽²⁾ Does not include post-employment benefits and other long-term benefits based on actuarial valuation as these are done for the Company as a whole.

2.16 Segment reporting

IFRS 8 Operating Segments 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 (CODM) 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 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 2.17 Revenue from operations.

2.16.1 Business segments

Three months ended June 30, 2023 and June 30, 2022

(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	10,661	5,513	4,441	4,889	5,350	3,056	2,749	1,274	37,933
	10,562	5,004	4,464	4,259	4,172	2,812	2,257	940	34,470
Identifiable operating expenses	6,147	2,869	2,640	2,690	3,523	1,743	1,593	819	22,024
	5,856	2,524	2,867	2,276	2,973	1,675	1,334	662	20,167
Allocated expenses	1,969	1,015	817	909	855	511	454	315	6,845
	1,952	942	803	838	814	465	388	237	6,439
Segment Profit	2,545	1,629	984	1,290	972	802	702	140	9,064
	2,754	1,538	794	1,145	385	672	535	41	7,864
Unallocable expenses									1,173
									950
Operating profit									7,891
									6,914
Other income, net (Refer to note 2.20)									561
									676
Finance cost									90
									56
Profit before income taxes									8,362
									7,534
Income tax expense									2,417
									2,172
Net profit									5,945
									5,362
Depreciation and amortization									1,173
									950
Non-cash expenses other than depreciation and amortization									–

⁽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

2.16.2 Significant clients

No client individually accounted for more than 10% of the revenues for the three months ended June 30, 2023 and June 30, 2022, respectively.

2.17 Revenue from Operations

Accounting Policy:

The Group derives revenues primarily from IT services comprising software development and related services, cloud and infrastructure 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 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. 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 incomplete 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.

Certain cloud and infrastructure services contracts include multiple elements which may be subject to other specific accounting guidance, such as leasing guidance. These contracts are accounted in accordance with such specific accounting guidance. In such arrangements where the Group is able to determine that hardware and services are distinct performance obligations, it allocates the consideration to these performance obligations on a relative standalone selling price basis. In the absence of standalone selling price, the Group uses the expected cost-plus margin approach in estimating the standalone selling price. When such arrangements are considered as a single performance obligation, revenue is recognized over the period and measure of progress is determined based on promise in the contract.

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.

Certain eligible, nonrecurring costs (e.g. set-up or transition or transformation costs) that do not represent a separate performance obligation are recognized as an asset when such costs (a) relate directly to the contract; (b) generate or enhance resources of the Group that will be used in satisfying the performance obligation in the future; and (c) are expected to be recovered.

Capitalized contract costs relating to upfront payments to customers are amortized to revenue and other capitalized costs are amortized to cost of sales over the respective contract life on a systematic basis consistent with the transfer of goods or services to customer to which the asset relates. Capitalized costs are monitored regularly for impairment. Impairment losses are recorded when present value of projected remaining operating cash flows is not sufficient to recover the carrying amount of the capitalized costs.

The Group presents revenues net of indirect taxes in its Interim Condensed Consolidated Statement of Comprehensive Income.

Revenues for the three months June 30, 2023 and June 30, 2022 is as follows:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Revenue from software services	35,735	32,278
Revenue from products and platforms	2,198	2,192
Total revenue from operations	37,933	34,470

Products & platforms

The Group also derives revenues from the sale of products and platforms including Finacle – core banking solution, Edge Suite of products, Panaya platform, Infosys Equinox, Infosys Helix, Infosys Applied AI, Infosys Cortex, Stater digital platform and Infosys McCamish – insurance platform.

Disaggregated revenue information

Revenue disaggregation by business segments has been included in segment information (Refer note 2.16). The table below presents disaggregated revenues from contracts with customers by geography and contract type. The Group believes that 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.

For the three months ended June 30, 2023 and June 30, 2022

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Revenues by Geography*
North America	23,084	21,301
Europe	10,148	8,647
India	1,020	881
Rest of the world	3,681	3,641
Total	37,933	34,470

^* Geographical revenues is based on the domicile of customer.

The percentage of revenue from fixed-price contracts for each of the quarter ended June 30, 2023 and June 30, 2022 is 52%.

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 statement of balance sheet.

2.18 Unbilled Revenue

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Unbilled financial asset (1)	9,027	9,502
Unbilled non financial asset (2)	6,980	7,236
Total	16,007	16,738

⁽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.

2.19 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 Share 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 of equity shares has been classified as share premium. Additionally, share-based compensation recognized in net profit in the interim condensed consolidated statement of comprehensive income is credited to share premium. Amounts have been utilized for bonus issue and share buyback from share premium account.

Special Economic Zone Re-investment reserve

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 / retained earnings.

Other components of equity

Other components of equity include currency translation, re-measurement of net defined benefit liability/asset, fair value changes of equity instruments fair valued through other comprehensive income, changes on fair valuation of investments, 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 interim condensed consolidated Statement of Comprehensive Income upon the occurrence of the related forecasted transaction.

2.19.1 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. Companies are required to pay / distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

The amount of per share dividend recognized as distribution to equity shareholders in accordance with Companies Act 2013 is as follows:

(In )

Particulars	Three months ended June 30,
	2023	2022
Final dividend for fiscal 2022	–	16.00
Final dividend for fiscal 2023	17.50	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023 which will result in a net cash outflow of 7,242 crore, excluding dividend paid on treasury shares. Payment date for the dividend is July 3, 2023.

2.19.2 Capital allocation policy

Effective 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 June 30, 2023, 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. 11,738,357 shares and 12,172,119 shares were held by controlled trust, as at June 30, 2023 and March 31, 2023, respectively.

2.20 Break-up of expenses and other income, net

a. Accounting policy

Gratuity and Pensions

The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees majorly 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. The Company contributes Gratuity 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 operates defined benefit pension plan in certain overseas jurisdictions, in accordance with the local laws. These plans are managed by third party fund managers. The plans provide for periodic payouts after retirement and/or a lumpsum payment as set out in rules of each fund and includes death and disability benefits. The defined benefit plans require contributions which are based on a percentage of salary that varies depending on the age of the respective employees.

Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk and market risk.

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 net profit 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 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 entire Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect in entirety and will record any related impact in the period the Code becomes effective.

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 foreign currency 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, EdgeVerve and Skava and controlled trusts is the Indian rupee. The functional currencies for foreign 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 Interim Condensed 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 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 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 June 30,
	2023	2022
Employee benefit costs	18,736	16,621
Depreciation and amortization	1,173	950
Travelling costs	319	254
Cost of technical sub-contractors	3,123	3,909
Cost of software packages for own use	465	406
Third party items bought for service delivery to clients	2,231	1,976
Short-term leases (Refer to note 2.9)	10	7
Consultancy and professional charges	29	28
Communication costs	89	88
Repairs and maintenance	118	109
Provision for post-sales client support	50	12
Others	39	9
Total	26,382	24,369

Selling and marketing expenses

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Employee benefit costs	1,380	1,126
Travelling costs	88	76
Branding and marketing	263	222
Short-term leases (Refer to note 2.9)	1	1
Communication costs	3	3
Consultancy and professional charges	31	29
Others	17	36
Total	1,783	1,493

Administrative expenses

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Employee benefit costs	665	590
Consultancy and professional charges	286	399
Repairs and maintenance	250	217
Power and fuel	50	39
Communication costs	90	79
Travelling costs	55	46
Impairment loss recognized/(reversed) under expected credit loss model	91	44
Rates and taxes	94	74
Insurance charges	52	41
Short-term leases (Refer to note 2.9)	10	10
Commission to non-whole time directors	3	4
Contribution towards Corporate Social Responsibility	70	60
Others	161	91
Total	1,877	1,694

Other income consists of the following:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Interest income on financial assets carried at amortized cost	274	239
Interest income on financial assets carried at fair value through other comprehensive income	243	240
Gain/(loss) on investments carried at fair value through profit or loss	52	8
Gain/(loss) on investments carried at fair value through other comprehensive income	–	1
Exchange gains / (losses) on forward and options contracts	134	(290)
Exchange gains / (losses) on translation of other assets and liabilities	(137)	417
Others	(5)	61
Total	561	676

for and on behalf of the Board of Directors of Infosys Limited

Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	Bobby Parikh Director
Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

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 June 30, 2023, the Condensed Statement of Profit and Loss (including Other Comprehensive Income), the Condensed Statement of Changes in Equity and the Condensed Statement of Cash Flows for the three months 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 a true and fair view in conformity with 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 state of affairs of the Company as at June 30, 2023 and its profit, total comprehensive income, changes in equity and its cash flows for the three months 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 (“SA”s) 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.

Responsibilities of Management and Those Charged with Governance 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 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 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 such 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.

	For DELOITTE HASKINS & SELLS LLP
	Chartered Accountants
	(Firm’s Registration No. 117366W/W-100018)
	Sanjiv V. Pilgaonkar
	Partner
Place: Bengaluru	(Membership No.039826)
Date: July 20, 2023	UDIN:23039826BGXSAO3665

INFOSYS LIMITED

Condensed Standalone Financial Statements under Indian Accounting Standards (Ind AS) for the three months June 30, 2023

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 Interim Condensed Standalone 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 and judgements

2. Notes to Interim Condensed Financial Statements

2.1 Property, plant and equipment

2.2 Goodwill and intangible assets

2.3 Leases

2.4 Investments

2.5 Loans

2.6 Other financial assets

2.7 Trade Receivables

2.8 Cash and cash equivalents

2.9 Earmarked bank balance for dividend

2.10 Other assets

2.11 Financial instruments

2.12 Equity

2.13 Other financial liabilities

2.14 Trade payables

2.15 Other liabilities

2.16 Provisions

2.17 Income taxes

2.18 Revenue from operations

2.19 Other income, net

2.20 Expenses

2.21 Basic and diluted shares used in computing earnings per equity share

2.22 Contingent liabilities and commitments

2.23 Related party transactions

2.24 Segment Reporting

INFOSYS LIMITED

(In crore)

Condensed Balance Sheet as at	Note No.	June 30, 2023	March 31, 2023
ASSETS
Non-current assets
Property, plant and equipment	2.1	11,340	11,656
Right-of-use assets	2.3	3,686	3,561
Capital work-in-progress		324	275
Goodwill	2.2	211	211
Other intangible assets		–	3
Financial assets
Investments	2.4	23,211	23,686
Loans	2.5	34	39
Other financial assets	2.6	958	1,341
Deferred tax assets (net)		575	779
Income tax assets (net)		6,353	5,916
Other non-current assets	2.10	1,837	1,788
Total non - current assets		48,529	49,255
Current assets
Financial assets
Investments	2.4	3,447	4,476
Trade receivables	2.7	22,188	20,773
Cash and cash equivalents	2.8	6,267	6,534
Earmarked bank balance for dividend	2.9	7,262	–
Loans	2.5	277	291
Other financial assets	2.6	8,786	9,088
Other current assets	2.10	10,812	10,920
Total current assets		59,039	52,082
Total assets		107,568	101,337
EQUITY AND LIABILITIES
Equity
Equity share capital	2.12	2,075	2,074
Other equity		64,671	65,671
Total equity		66,746	67,745
LIABILITIES
Non-current liabilities
Financial liabilities
Lease liabilities	2.3	3,496	3,553
Other financial liabilities	2.13	1,205	1,317
Deferred tax liabilities (net)		788	866
Other non-current liabilities	2.15	272	414
Total non - current liabilities		5,761	6,150
Current liabilities
Financial liabilities
Lease liabilities	2.3	720	713
Trade payables	2.14
Total outstanding dues of micro enterprises and small enterprises		95	97
Total outstanding dues of creditors other than micro enterprises and small enterprises		2,564	2,329
Other financial liabilities	2.13	17,640	12,697
Other current liabilities	2.15	8,596	7,609
Provisions	2.16	1,360	1,163
Income tax liabilities (net)		4,086	2,834
Total current liabilities		35,061	27,442
Total equity and liabilities		107,568	101,337

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	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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

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 June 30,
		2023	2022
Revenue from operations	2.18	31,811	29,527
Other income, net	2.19	1,001	648
Total income		32,812	30,175
Expenses
Employee benefit expenses	2.20	16,353	14,914
Cost of technical sub-contractors		4,676	5,011
Travel expenses		359	314
Cost of software packages and others	2.20	1,174	1,183
Communication expenses		129	119
Consultancy and professional charges		215	363
Depreciation and amortization expenses		746	643
Finance cost		43	34
Other expenses	2.20	971	692
Total expenses		24,666	23,273
Profit before tax		8,146	6,902
Tax expense:
Current tax	2.17	2,065	2,032
Deferred tax	2.17	125	(31)
Profit for the period		5,956	4,901
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		87	(96)
Equity instruments through other comprehensive income, net		1	3
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		6	26
Fair value changes on investments, net		68	(344)
Total other comprehensive income/ (loss), net of tax		162	(411)
Total comprehensive income for the period		6,118	4,490
Earnings per equity share
Equity shares of par value 5/- each
Basic ()		14.36	11.65
Diluted ()		14.34	11.64
Weighted average equity shares used in computing earnings per equity share
Basic (in shares)	2.21	4,14,91,57,540	4,20,71,62,325
Diluted (in shares)	2.21	4,15,26,38,175	4,21,06,04,236

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	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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

INFOSYS LIMITED

Condensed Statement of Changes in Equity

(In crore)

Particulars

Other Equity

Reserves & Surplus

Other comprehensive income

Equity Share Capital

Capital reserve

Capital redemption reserve

Securities Premium

Retained earnings

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve (1)

Equity Instruments through other comprehensive income

Effective portion of Cash flow hedges

Other items of other comprehensive income / (loss)

Total equity attributable to equity holders of the Company

Capital reserve

Other reserves (2)

Balance as at April 1, 2022

2,103

54

2,844

139

172

55,449

9

606

7,926

266

2

(264)

69,306

Impact on adoption of amendment to Ind AS 37#

–

–

–

–

–

(9)

–

–

–

–

–

–

(9)

2,103

54

2,844

139

172

55,440

9

606

7,926

266

2

(264)

69,297

Changes in equity for the three months ended June 30, 2022

Profit for the period

–

–

–

–

–

4,901

–

–

–

–

–

–

4,901

Remeasurement of the net defined benefit liability/asset, net*

–

–

–

–

–

–

–

–

–

–

–

(96)

(96)

Equity instruments through other comprehensive income, net*

–

–

–

–

–

–

–

–

–

3

–

–

3

Fair value changes on derivatives designated as cash flow hedge, net*

–

–

–

–

–

–

–

–

–

–

26

–

26

Fair value changes on investments, net*

–

–

–

–

–

–

–

–

–

–

–

(344)

(344)

Total comprehensive income for the period

–

–

–

–

–

4,901

–

–

–

3

26

(440)

4,490

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

–

–

–

265

–

–

(265)

–

–

–

–

Transferred on account of exercise of stock options (Refer to note 2.12)

–

–

–

–

135

–

–

(135)

–

–

–

–

–

Transfer on account of options not exercised

–

–

–

–

–

–

1

(1)

–

–

–

–

–

Shares issued on exercise of employee stock options (Refer to note 2.12)

1

–

–

–

–

–

–

–

–

–

–

–

1

Employee stock compensation expense (Refer to note 2.12)

–

–

–

–

–

–

–

134

–

–

–

–

134

Income tax benefit arising on exercise of stock options

–

–

–

–

–

–

–

14

–

–

–

–

14

Dividends

–

–

–

–

–

(6,732)

–

–

–

–

–

–

(6,732)

Balance as at June 30, 2022

2,104

54

2,844

139

307

53,874

10

618

7,661

269

28

(704)

67,204

INFOSYS LIMITED

Condensed Statement of Changes in Equity (contd.)

(In crore)

Particulars

Other Equity

Reserves & Surplus

Other comprehensive income

Equity Share Capital

Capital reserve

Capital redemption reserve

Securities Premium

Retained earnings

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve (1)

Equity Instruments through other comprehensive income

Effective portion of Cash flow hedges

Other items of other comprehensive income / (loss)

Total equity attributable to equity holders of the Company

Capital reserve

Other reserves (2)

Balance as at April 1, 2023

2,074

54

2,862

169

133

52,183

2

878

9,654

260

(5)

(519)

67,745

Changes in equity for the three months ended June 30, 2023

Profit for the period

–

–

–

–

–

5,956

–

–

–

–

–

–

5,956

Remeasurement of the net defined benefit liability/asset, net*

–

–

–

–

–

–

–

–

–

–

–

87

87

Equity instruments through other comprehensive income, net*

–

–

–

–

–

–

–

–

–

1

–

–

1

Fair value changes on derivatives designated as cash flow hedge, net*

–

–

–

–

–

–

–

–

–

–

6

–

6

Fair value changes on investments, net*

–

–

–

–

–

–

–

–

–

–

–

68

68

Total comprehensive income for the period

–

–

–

–

–

5,956

–

–

–

1

6

155

6,118

Transferred to Special Economic Zone Re-investment reserve

–

–

–

–

–

(760)

–

–

760

–

–

–

–

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

–

–

–

194

–

–

(194)

–

–

–

–

Transferred on account of exercise of stock options (Refer to note 2.12)

–

–

–

–

274

–

–

(274)

–

–

–

–

–

Transferred on account of options not exercised

–

–

–

–

–

–

6

(6)

–

–

–

–

–

Shares issued on exercise of employee stock options (Refer to note 2.12)

1

–

–

–

–

–

–

–

–

–

–

–

1

Employee stock compensation expense (Refer to note 2.12)

–

–

–

–

–

–

–

144

–

–

–

–

144

Income tax benefit arising on exercise of stock options

–

–

–

–

–

–

–

–

–

–

–

–

–

Reserves on common control transaction

–

–

–

–

–

–

–

–

–

–

–

–

–

Dividends

–

–

–

–

–

(7,262)

–

–

–

–

–

–

(7,262)

Balance as at June 30, 2023

2,075

54

2,862

169

407

50,311

8

742

10,220

261

1

(364)

66,746

* net of tax

^# Impact on account of adoption of amendment to Ind AS 37 Provisions, Contingent Liabilities and Contingents Assets

⁽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	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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

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.	Three months ended June 30,
		2023	2022
Cash flow from operating activities:
Profit for the year		5,956	4,901
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and Amortization		746	643
Income tax expense	2.17	2,190	2,001
Impairment loss recognized / (reversed) under expected credit loss model		86	28
Finance cost		43	34
Interest and dividend income		(817)	(426)
Stock compensation expense		132	118
Other adjustments		213	(8)
Exchange differences on translation of assets and liabilities, net		19	29
Changes in assets and liabilities
Trade receivables and unbilled revenue		(476)	(2,100)
Loans, other financial assets and other assets		(523)	(569)
Trade payables		233	(36)
Other financial liabilities, other liabilities and provisions		(1,159)	1,785
Cash generated from operations		6,643	6,400
Income taxes paid		(1,252)	(1,100)
Net cash generated by operating activities		5,391	5,300
Cash flow from investing activities:
Expenditure on property, plant and equipment		(736)	(571)
Deposits placed with corporation		(392)	(152)
Redemption of deposits placed with corporation		226	–
Interest and dividend received		571	489
Dividend received from subsidiary		400	–
Loan given to subsidiaries		–	(427)
Investment in subsidiaries		(9)	(17)
Proceeds from liquidation of a subsidiary		79	–
Other receipts		123	18
Payments to acquire investments
Liquid mutual fund units		(15,756)	(18,378)
Commercial papers		(1,336)	(259)
Certificates of deposits		(817)	(2,738)
Government Securities		–	(1,370)
Non-convertible debentures		(104)	–
Others		–	(3)
Proceeds on sale of investments
Liquid mutual fund units		15,350	18,805
Non-convertible debentures		275	220
Certificates of deposit		3,350	2,188
Commercial papers		600	–
Government Securities		–	636
Net cash (used in) / generated from investing activities		1,824	(1,559)
Cash flow from financing activities:
Payment of lease liabilities		(191)	(156)
Shares issued on exercise of employee stock options		1	1
Other receipts		–	43
Other payments		(21)	(5)
Payment of dividends		(1)	(6,733)
Net cash used in financing activities		(212)	(6,850)
Net increase / (decrease) in cash and cash equivalents		7,003	(3,109)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		(8)	(10)
Cash and cash equivalents at the beginning of the period	2.8	6,534	12,270
Cash and cash equivalents at the end of the period	2.8	13,529	9,151
Supplementary information:
Restricted cash balance	2.8	77	87
Closing cash and cash equivalents as per Standalone Statement of Cash flow		13,529	9,151
Less: Earmarked bank balance for dividend		7,262	–
Closing cash and cash equivalents as per Standalone Balance Sheet	2.8	6,267	9,151

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	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	Bobby Parikh Director
	Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

INFOSYS LIMITED

Overview and 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. Infosys strategic objective is to build a sustainable organization that remains relevant to the agenda of clients, while creating growth opportunities for employees and generating profitable returns for investors. Infosys strategy is to be a navigator for our clients as they ideate, plan and execute on their journey to a digital future.

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 interim condensed standalone financial statements are approved for issue by the Company's Board of Directors on July 20, 2023.

1.2 Basis of preparation of financial statements

These interim condensed standalone financial statements are prepared in compliance with Indian Accounting Standard (Ind AS) 34 Interim Financial Reporting, under the historical cost convention on 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, 2023. 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.

The material accounting policy information used in preparation of the audited condensed standalone interim financial statements have been discussed in the respective notes.

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 standalone 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 and judgements are reflected in the interim condensed standalone financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the 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.

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.

Provisions for estimated losses, if any, on incomplete 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 United States, 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 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. (Refer to note 2.17)

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 to note 2.1)

2. Notes to the Interim Condensed Standalone Financial Statements

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 charge in respect of periodic depreciation is derived at after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. 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)	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.

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

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. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset.

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 condensed 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 condensed 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 June 30, 2023 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, 2023	1,429	10,445	3,144	1,314	7,235	2,129	968	45	26,709
Additions	–	5	16	21	187	24	22	–	275
Deletions*	–	–	(13)	(10)	(224)	(18)	(7)	–	(272)
Gross carrying value as at June 30, 2023	1,429	10,450	3,147	1,325	7,198	2,135	983	45	26,712
Accumulated depreciation as at April 1, 2023	–	(4,223)	(2,558)	(1,060)	(4,977)	(1,549)	(646)	(40)	(15,053)
Depreciation	–	(98)	(57)	(29)	(301)	(60)	(44)	(1)	(590)
Accumulated depreciation on deletions*	–	–	13	10	224	18	6	–	271
Accumulated depreciation as at June 30, 2023	–	(4,321)	(2,602)	(1,079)	(5,054)	(1,591)	(684)	(41)	(15,372)
Carrying value as at April 1, 2023	1,429	6,222	586	254	2,258	580	322	5	11,656
Carrying value as at June 30, 2023	1,429	6,129	545	246	2,144	544	299	4	11,340

* During the three months ended June 30, 2023, certain assets which were not in use having gross book value of 250 crore (net book value: nil) were retired.

The changes in the carrying value of property, plant and equipment for the three months ended June 30, 2022 were 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, 2022	1,429	10,115	3,054	1,250	7,239	2,070	817	44	26,018
Additions	–	131	47	21	249	44	58	–	550
Deletions	–	–	(3)	(2)	(38)	(1)	–	–	(44)
Gross carrying value as at June 30, 2022	1,429	10,246	3,098	1,269	7,450	2,113	875	44	26,524
Accumulated depreciation as at April 1, 2022	–	(3,834)	(2,494)	(993)	(5,163)	(1,614)	(499)	(37)	(14,634)
Depreciation	–	(95)	(59)	(26)	(247)	(51)	(35)	(1)	(514)
Accumulated depreciation on deletions	–	–	3	2	38	1	–	–	44
Accumulated depreciation as at June 30, 2022	–	(3,929)	(2,550)	(1,017)	(5,372)	(1,664)	(534)	(38)	(15,104)
Carrying value as at April 1, 2022	1,429	6,281	560	257	2,076	456	318	7	11,384
Carrying value as at June 30, 2022	1,429	6,317	548	252	2,078	449	341	6	11,420

⁽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 statement of Profit and Loss.

Repairs and maintenance costs are recognized in the statement of Profit and Loss when incurred.

2.2 GOODWILL AND INTANGIBLE ASSETS

2.2.1 Goodwill

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

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Carrying value at the beginning	211	211
Carrying value at the end	211	211

2.2.2 Intangible Assets:

Accounting Policy

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labor, overhead costs that are directly attributable to prepare the asset for its intended use.

2.3 LEASES

Accounting Policy

The Company as a lessee

The Company’s lease asset classes primarily consist of leases for land, buildings and computers. 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.

As a lessee, the Company determines 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.

Certain lease arrangements include 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 June 30, 2023:

(In crore)

Particulars	Category of ROU asset			Total
	Land	Buildings	Computers
Balance as at April 1, 2023	548	2,669	344	3,561
Additions*	–	256	72	328
Deletion	–	(2)	(46)	(48)
Depreciation	(1)	(122)	(32)	(155)
Balance as at June 30, 2023	547	2,801	338	3,686

* Net of adjustments on account of modifications and lease incentives

Following are the changes in the carrying value of right-of-use assets for the three months ended June 30, 2022:

(In crore)

Particulars	Category of ROU asset			Total
	Land	Buildings	Computers
Balance as at April 1, 2022	552	2,621	138	3,311
Additions*	–	348	20	368
Deletion	–	(1)	(17)	(18)
Depreciation	(1)	(107)	(12)	(120)
Balance as at June 30, 2022	551	2,861	129	3,541

* Net of adjustments on account of modifications and lease incentives

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 June 30, 2023 and March 31, 2023:

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current lease liabilities	720	713
Non-current lease liabilities	3,496	3,553
Total	4,216	4,266

2.4 INVESTMENTS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current investments
Equity instruments of subsidiaries	9,028	9,078
Redeemable Preference shares of subsidiary	2,831	2,831
Preference securities and equity instruments	196	196
Compulsorily convertible debentures	–	–
Target maturity fund units	409	402
Others	82	82
Tax free bonds	1,739	1,742
Government bonds	14	14
Non-convertible debentures	2,262	2,490
Government Securities	6,650	6,851
Total non-current investments	23,211	23,686
Current investments
Liquid mutual fund units	700	260
Commercial Papers	1,169	420
Certificates of deposit	271	2,765
Tax free bonds	150	150
Government bonds	–	–
Government Securities	206	5
Non-convertible debentures	951	876
Total current investments	3,447	4,476
Total carrying value	26,658	28,162

(In crore, except as otherwise stated)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current investments
Unquoted
Investment carried at cost
Investments in equity instruments of subsidiaries
Infosys BPM Limited	662	662
33,828 (33,828) equity shares of 10,000/- each, fully paid up
Infosys Technologies (China) Co. Limited	369	369
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	1,010	1,010
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#	2,637	2,637
Infosys Singapore 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
Skava Systems Private Limited	–	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, Inc.	380	380
100 (100) shares
Infosys Luxembourg S.a r.l.	26	17
20,000 (20,000) shares
Infosys Austria GmbH	–	–
80,000 (80,000) shares of EUR 1 par value, fully paid up
Infosys Consulting Brazil	337	337
27,50,71,070 (27,50,71,070) shares of BRL 1 per share, fully paid up
Infosys Consulting S.R.L. (Romania)	34	34
99,183 (99,183) shares of RON 100 per share, fully paid up
Infosys Limited Bulgaria EOOD	2	2
4,58,000 (4,58,000) shares of BGN 1 per share, fully paid up
Infosys Germany Holdings GmbH	2	2
25,000 (25,000) shares EUR 1 per share, fully paid up
Infosys Green Forum	1	1
10,00,000 (10,00,000) shares 10 per share, fully paid up
Infosys Automotive and Mobility GmbH	15	15
Infosys Germany GmbH	–	–
25,000 (25,000) shares EUR 1 per share, fully paid up
Infosys Turkey Bilgi Teknolojileri Limited Sirketi	7	7
1,30,842 (1) share Turkish Liras 100 (10,000) per share, fully paid up
Infosys Consulting S.R.L. (Argentina)	2	2
2,94,500 (Nil) shares AR$ 100 per share, fully paid up
Infosys Business Solutions LLC	8	8
10,000 (Nil) shares USD 100 per share, fully paid up
Investments in Redeemable Preference shares of subsidiary
Infosys Singapore Pte Ltd	2,831	2,831
45,62,00,000 (24,92,00,000) shares of SGD 1 per share, fully paid up
40,000,000 (Nil) shares of USD 1 per share, fully paid up
	11,859	11,909
Investments carried at fair value through profit or loss
Target maturity fund units	409	402
Others (1)	82	82
	491	484
Investments carried at fair value through other comprehensive income
Preference securities	193	193
Equity instruments	3	3
	196	196
Quoted
Investments carried at amortized cost
Tax free bonds	1,739	1,742
Government bonds	14	14
	1,753	1,756
Investments carried at fair value through other comprehensive income
Non-convertible debentures	2,262	2,490
Government Securities	6,650	6,851
	8,912	9,341
Total non-current investments	23,211	23,686
Current investments
Unquoted
Investments carried at fair value through profit or loss
Liquid mutual fund units	700	260
	700	260
Investments carried at fair value through other comprehensive income
Commercial Papers	1,169	420
Certificates of deposit	271	2,765
	1,440	3,185
Quoted
Investments carried at amortized cost
Tax free bonds	150	150
	150	150
Investments carried at fair value through other comprehensive income
Government Securities	206	5
Non-convertible debentures	951	876
	1,157	881
Total current investments	3,447	4,476
Total investments	26,658	28,162
Aggregate amount of quoted investments	11,972	12,128
Market value of quoted investments (including interest accrued), current	1,326	1,050
Market value of quoted investments (including interest accrued), non-current	10,898	11,336
Aggregate amount of unquoted investments	14,686	16,034
# Aggregate amount of impairment in value of investments	94	94
Reduction in the fair value of assets held for sale	854	854
Investments carried at cost	11,859	11,909
Investments carried at amortized cost	1,903	1,906
Investments carried at fair value through other comprehensive income	11,705	13,603
Investments carried at fair value through profit or loss	1,191	744

⁽¹⁾ Uncalled capital commitments outstanding as of June 30, 2023 and March 31, 2023 was 8 crore and 8 crore, respectively.

Refer to note 2.11 for accounting policies on financial instruments.

Method of fair valuation:

(In crore)

Class of investment	Method	Fair value as at
		June 30, 2023	March 31, 2023
Liquid mutual fund units - carried at fair value through profit or loss	Quoted price	700	260
Target maturity fund units - carried at fair value through profit or loss	Quoted price	409	402
Tax free bonds and government bonds - carried at amortized cost	Quoted price and market observable inputs	2,139	2,134
Non-convertible debentures - carried at fair value through other comprehensive income	Quoted price and market observable inputs	3,213	3,366
Government securities - carried at fair value through other comprehensive income	Quoted price and market observable inputs	6,856	6,856
Commercial Papers - carried at fair value through other comprehensive income	Market observable inputs	1,169	420
Certificates of deposit - carried at fair value through other comprehensive income	Market observable inputs	271	2,765
Unquoted equity and preference securities - carried at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model	196	196
Others - carried at fair value through profit or loss	Discounted cash flows method, Market multiples method, Option pricing model	82	82
Total		15,035	16,481

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

2.5 LOANS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non- Current
Loans considered good - Unsecured
Other Loans
Loans to employees	34	39
	34	39
Loans credit impaired - Unsecured
Other Loans
Loans to employees	–	–
Less: Allowance for credit impairment	–	–
	–	–
Total non - current loans	34	39
Current
Loans considered good - Unsecured
Loans to subsidiaries	44	43
Other Loans
Loans to employees	233	248
Total current loans	277	291
Total Loans	311	330

2.6 OTHER FINANCIAL ASSETS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Security deposits (1)	42	43
Net investment in Sublease of right of use asset (1)	–	298
Rental deposits (1)	184	183
Unbilled revenues (1)(5)#	611	686
Others(1)	121	131
Total non-current other financial assets	958	1,341
Current
Security deposits (1)	1	1
Rental deposits (1)	4	5
Restricted deposits (1)*	2,282	2,116
Unbilled revenues (1)(5)#	4,462	5,166
Interest accrued but not due (1)	284	441
Foreign currency forward and options contracts (2)(3)	144	79
Net investment in Sublease of right-of-use asset (1)	–	48
Others (1)(4)	1,609	1,232
Total current other financial assets	8,786	9,088
Total other financial assets	9,744	10,429
(1) Financial assets carried at amortized cost	9,600	10,350
(2) Financial assets carried at fair value through other comprehensive income	22	32
(3) Financial assets carried at fair value through Profit or Loss	122	47
(4) Includes dues from subsidiaries	1,327	1,051
(5) Includes dues from subsidiaries	143	290

* 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.

2.7 TRADE RECEIVABLES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Trade Receivable considered good - Unsecured (1)	22,683	21,202
Less: Allowance for expected credit loss	495	429
Trade Receivable considered good - Unsecured	22,188	20,773
Trade Receivable - credit impaired - Unsecured	120	106
Less: Allowance for credit impairment	120	106
Trade Receivable - credit impaired - Unsecured	–	–
Total trade receivables (2)	22,188	20,773
(1) Includes dues from subsidiaries	717	611
(2) Includes dues from companies where directors are interested	–	–

2.8 CASH AND CASH EQUIVALENTS

 (In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Balances with banks
In current and deposit accounts	4,797	4,864
Cash on hand	–	–
Others
Deposits with financial institutions	1,470	1,670
Total Cash and cash equivalents	6,267	6,534
Balances with banks in unpaid dividend accounts	36	37
Deposit with more than 12 months maturity	–	700

Cash and cash equivalents as at June 30, 2023 and March 31, 2023 include restricted cash and bank balances of 77 crore and 46 crore, respectively.

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.

2.9 EARMARKED BANK BALANCE FOR DIVIDEND

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Earmarked bank balance for dividend	7,262	—
Total	7,262	—

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023. Payment date for the dividend is July 3, 2023. Earmarked bank balance for dividend represents cash which is deposited in a designated bank account only for payment of final dividend for financial year ended March 31, 2023.

2.10 OTHER ASSETS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Capital advances	145	141
Advances other than capital advances
Others
Prepaid expenses	57	63
Defined benefit plan assets	9	9
Deferred contract cost
Cost of obtaining a contract(3)	123	139
Cost of fulfillment	666	601
Unbilled revenues(2)	169	167
Withholding taxes and others	668	668
Total non-current other assets	1,837	1,788
Current
Advances other than capital advances
Payment to vendors for supply of goods	176	171
Others
Prepaid expenses (1)	1,927	1,705
Unbilled revenues(2)	6,118	6,365
Deferred contract cost
Cost of obtaining a contract(3)	319	400
Cost of fulfillment	132	109
Withholding taxes and others	2,092	2,047
Other receivables	48	123
Total current other assets	10,812	10,920
Total other assets	12,649	12,708
(1) Includes dues from subsidiaries	182	198

⁽²⁾ Classified as non-financial asset as the contractual right to consideration is dependent on completion of contractual milestones.

⁽³⁾ Includes technology assets taken over by the Company from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Company in accordance with Ind AS 115 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Company has entered into a financing arrangement with a third party for these assets which has been considered as financial liability. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to 92 crore. (Refer to note 2.12)

Withholding taxes and others primarily consist of input tax credits and Cenvat/ VAT recoverable from Government of India.

2.11 FINANCIAL INSTRUMENTS

Accounting Policy

2.11.1 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.

2.11.2 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 carried 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 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 carried 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.

(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 such contracts is generally a bank.

(i) Financial assets or financial liabilities, carried 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 condensed 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.

2.11.3 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.

2.11.4 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, option pricing model, market multiples, 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 these instruments.

2.11.5 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 Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considers current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates.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 recorded is recognized as an impairment loss or gain in statement of profit and loss.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at June 30, 2023 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 to note 2.8)	6,267	–	–	–	–	6,267	6,267
Earmarked bank balance for dividend (Refer note 2.9)	7,262	–	–	–	–	7,262	7,262
Investments (Refer to note 2.4)
Preference securities, Equity instruments and others	–	–	82	196	–	278	278
Tax free bonds and government bonds	1,903	–	–	–	–	1,903	2,139(1)
Liquid mutual fund units	–	–	700	–	–	700	700
Target maturity fund units	–	–	409	–	–	409	409
Commercial Papers	–	–	–	–	1,169	1,169	1,169
Certificates of deposits	–	–	–	–	271	271	271
Non convertible debentures	–	–	–	–	3,213	3,213	3,213
Government Securities	–	–	–	–	6,856	6,856	6,856
Trade receivables (Refer to note 2.7)	22,188	–	–	–	–	22,188	22,188
Loans (Refer to note 2.5)	311	–	–	–	–	311	311
Other financial assets (Refer to note 2.6) (3)	9,600	–	122	–	22	9,744	9,652(2)
Total	47,531	–	1,313	196	11,531	60,571	60,715
Liabilities:
Trade payables (Refer to note 2.14)	2,659	–	–	–	–	2,659	2,659
Lease liabilities (Refer to note 2.3)	4,216	–	–	–	–	4,216	4,216
Other financial liabilities (Refer to note 2.13)	16,753	–	8	–	6	16,767	16,767
Total	23,628	–	8	–	6	23,642	23,642

⁽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 92 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, 2023 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 to note 2.8)	6,534	–	–	–	–	6,534	6,534
Investments (Refer to note 2.4)
Preference securities, Equity instruments and others	–	–	82	196	–	278	278
Tax free bonds and government bonds	1,906	–	–	–	–	1,906	2,134(1)
Target maturity fund units	–	–	402	–	–	402	402
Liquid mutual fund units	–	–	260	–	–	260	260
Commercial Papers	–	–	–	–	420	420	420
Certificates of deposits	–	–	–	–	2,765	2,765	2,765
Non convertible debentures	–	–	–	–	3,366	3,366	3,366
Government Securities	–	–	–	–	6,856	6,856	6,856
Trade receivables (Refer to note 2.7)	20,773	–	–	–	–	20,773	20,773
Loans (Refer to note 2.5)	330	–	–	–	–	330	330
Other financial assets (Refer to note 2.6)(3)	10,350	–	47	–	32	10,429	10,345(2)
Total	39,893	–	791	196	13,439	54,319	54,463
Liabilities:
Trade payables (Refer to note 2.14)	2,426	–	–	–	–	2,426	2,426
Lease Liabilities (Refer to note 2.3)	4,266	–	–	–	–	4,266	4,266
Other financial liabilities (Refer to note 2.13)	11,989	–	42	–	14	12,045	12,045
Total	18,681	–	42	–	14	18,737	18,737

⁽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 84 crore

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

For trade receivables, trade payables, other assets and 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.

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 measured at fair value on a recurring basis as at June 30, 2023 is as follows:

(In crore)

Particulars	As at June 30, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.4)
Investments in tax free bonds	2,125	1,969	156	–
Investments in government bonds	14	14	–	–
Investments in liquid mutual fund units	700	700	–	–
Investments in target maturity fund units	409	409	–	–
Investments in certificates of deposit	271	–	271	–
Investments in commercial papers	1,169	–	1,169	–
Investments in non convertible debentures	3,213	1,923	1,290	–
Investments in government securities	6,856	6,856	–	–
Investments in equity instruments	3	–	–	3
Investments in preference securities	193	–	–	193
Other investments	82	–	–	82
Others
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer to note 2.6)	144	–	144	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer to note 2.13)	14	–	14	–

During the three months ended June 30, 2023, tax free bonds and non-convertible debentures of 1,368 crore were transferred from Level 2 to Level 1 of fair value hierarchy since these were valued based on quoted price.

The fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at March 31, 2023 was as follows:

(In crore)

Particulars	As at March 31, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.4)
Investments in tax free bonds	2,120	1,331	789	–
Investments in target maturity fund units	402	402	–	–
Investments in government bonds	14	14	–	–
Investments in liquid mutual fund units	260	260	–	–
Investments in certificates of deposit	2,765	–	2,765	–
Investments in commercial papers	420	–	420	–
Investments in non convertible debentures	3,366	1,364	2,002	–
Investments in government securities	6,856	6,856	–	–
Investments in equity instruments	3	–	–	3
Investments in preference securities	193	–	–	193
Other investments	82	–	–	82
Others
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer to note 2.6)	79	–	79	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer note 2.13)	56	–	56	–

During the year ended March 31, 2023, tax free bonds and government securities of 383 crore were transferred from Level 2 to Level 1 of fair value hierarchy since these were valued based on quoted price. Further non-convertible debentures of 1,611 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, target maturity fund units, tax free bonds, certificates of deposit, commercial paper, treasury bills, government securities, 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 Company's risk management program.

2.12 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

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 / retained earnings.

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. Amounts have been utilized for bonus issue and share buyback from share premium account.

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.

Special Economic Zone Re-investment reserve

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.

Other components of equity

Other components of equity include 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.

2.12.1 EQUITY SHARE CAPITAL

(In crore, except as otherwise stated)

Particulars	As at
	June 30, 2023	March 31, 2023
Authorized
Equity shares, 5/- par value
4,80,00,00,000 (4,80,00,00,000) equity shares	2,400	2,400
Issued, Subscribed and Paid-Up
Equity shares, 5/- par value (1)	2,075	2,074
4,15,01,92,365 (4,14,85,60,044 ) equity shares fully paid-up
	2,075	2,074

⁽¹⁾ Refer to note 2.21 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. For details of shares reserved for issue under the employee stock option plan of the Company, refer to the note below.

The reconciliation of the number of shares outstanding and the amount of share capital as at June 30, 2023 and March 31, 2023 is set out below:

(in crore, except as stated otherwise)

Particulars	As at June 30, 2023		As at March 31, 2023
	Number of shares	Amount	Number of shares	Amount
As at the beginning of the period	4,14,85,60,044	2,074	4,20,67,38,641	2,103
Add: Shares issued on exercise of employee stock options	1,632,321	1	22,47,751	1
Less: Shares bought back	–	–	6,04,26,348	30
As at the end of the period	4,15,01,92,365	2,075	4,14,85,60,044	2,074

Capital allocation policy

Effective 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 June 30, 2023, 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.

2.12.2 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. Companies are required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

The amount of per share dividend recognized as distribution to equity shareholders in accordance with Companies Act, 2013 is as follows:-

(in )

Particulars	Three months ended June 30,
	2023	2022
Final dividend for fiscal 2022	–	16.00
Final dividend for fiscal 2023	17.50	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023 which will result in a net cash outflow of 7,262 crore. Payment date for the dividend is July 3, 2023.

2.12.3 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 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 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). These instruments will generally vest over a period of 4 years. The plan numbers mentioned above are further adjusted with 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 1,17,38,357 shares and 12,172,119 shares as at June 30, 2023 and March 31, 2023, 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 June 30, 2023 and March 31, 2023.

The following is the summary of grants made during the three months ended June 30, 2023 and June 30, 2022:

	2019 plan		2015 plan
Particulars	Three months ended June 30,		Three months ended June 30,
	2023	2022	2023	2022
Equity settled RSUs
Key Managerial Personnel (KMP)	78,281	176,893	333,596	101,967
Employees other than KMP	–	370,960	4,500	–
Total Grants	78,281	547,853	338,096	101,967

Notes on grants to KMP:

CEO & MD

Under the 2015 plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of performance-based RSUs (Annual performance equity grant) of fair value of 34.75 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 2,72,026 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance equity ESG grant) of fair value of 2 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain environment, social and governance milestones as determined by the Board. Accordingly, 15,656 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance Equity TSR grant) of fair value of 5 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on Company’s performance on cumulative relative TSR over the years and as determined by the Board. Accordingly, 39,140 performance based RSU’s were granted effective May 2, 2023.

Though the annual time based grants and annual performance equity TSR grant for the remaining employment term ending on March 31, 2027 have not been granted as of June 30, 2023, 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 payment. The grant date for this purpose in accordance with Ind AS 102, Share based payment is July 1, 2022.

Under the 2019 plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore for fiscal 2024 under the 2019 Plan. These RSUs will vest based on achievement of certain performance targets. Accordingly, 78,281 performance based RSU’s were granted effective May 2, 2023.

Other KMP

Under the 2015 plan:

During the three months ended June 30, 2023, based on recommendations of Nomination and Remuneration Committee, the Board approved 6,774 performance based RSUs to a KMP under the 2015 plan. The performance based RSUs will vest over three years based on certain performance targets.

The break-up of employee stock compensation expense is as follows:

(in crore)

Particulars	Three months ended June 30,
	2023	2022
Granted to:
KMP	20	17
Employees other than KMP	112	101
Total (1)	132	118
(1) Cash settled stock compensation expense included in the above	1	(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 2024- Equity Shares-RSU	Fiscal 2023- Equity Shares-RSU	Fiscal 2023- ADS-RSU
Weighted average share price () / ($ ADS)	1,277	1,525	18.08
Exercise price () / ($ ADS)	5.00	5.00	0.07
Expected volatility (%)	25-31	23-32	27-34
Expected life of the option (years)	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3
Risk-free interest rate (%)	7	5-7	2-5
Weighted average fair value as on grant date () / ($ ADS)	1,113	1,210	13.69

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.

2.13 OTHER FINANCIAL LIABILITIES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Others
Compensated absences	74	76
Accrued compensation to employees (1)	7	5
Accrued expenses (1)	1,089	1,184
Other payables (1)(6)	35	52
Total non-current other financial liabilities	1,205	1,317
Current
Unpaid dividends (1)	36	37
Others
Accrued compensation to employees (1)	2,788	3,072
Accrued expenses (1)(4)	4,296	4,430
Retention monies (1)	14	17
Capital creditors (1)	246	652
Compensated absences	2,004	1,893
Final dividend payable to share holders(1)*	6,543	-
Other payables (1)(5)(6)	1,699	2,540
Foreign currency forward and options contracts (2)(3)	14	56
Total current other financial liabilities	17,640	12,697
Total other financial liabilities	18,845	14,014
(1) Financial liability carried at amortized cost	16,753	11,989
(2) Financial liability carried at fair value through profit or loss	8	42
(3) Financial liability carried at fair value through other comprehensive income	6	14
(4) Includes dues to subsidiaries	30	30
(5) Includes dues to subsidiaries	327	422

⁽⁶⁾ Deferred contract cost (Refer to note 2.10) includes technology assets taken over by the Company from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Company in accordance with Ind AS 115 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Company has entered into a financing arrangement with a third party for these assets which has been considered as financial liability. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to 92 crore.

* Pertains to final dividend declared by the Company for fiscal 2023 and approved by the shareholders on June 28, 2023. Payment date for dividend is July 3, 2023 (Refer note 2.12.2).

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

2.14 TRADE PAYABLES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Outstanding dues of micro enterprises and small enterprises	95	97
Outstanding dues of creditors other than micro enterprises and small enterprises(1)	2,564	2,329
Total trade payables	2,659	2,426
(1) Includes dues to subsidiaries	820	653

2.15 OTHER LIABILITIES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Accrued defined benefit liability	247	412
Others
Deferred income	2	2
Deferred income - government grants	23	–
Total non - current other liabilities	272	414
Current
Accrued defined benefit liability	2	2
Unearned revenue	5,732	5,491
Others
Deferred income - government grants	10	28
Withholding taxes and others	2,852	2,088
Total current other liabilities	8,596	7,609
Total other liabilities	8,868	8,023

2.16 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. Provisions for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete 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
	June 30, 2023	March 31, 2023
Current
Others
Post-sales client support and others	1,360	1,163
Total provisions	1,360	1,163

Provision for post sales client support and other provisions majorly 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.

2.17 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 equity or 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; deferred tax assets and deferred 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 equity.

Income tax expense in the statement of Profit and Loss comprises:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Current taxes	2,065	2,032
Deferred taxes	125	(31)
Income tax expense	2,190	2,001

Income tax expense for the three months ended June 30, 2023 and June 30, 2022 includes reversals (net of provisions) of 46 crore and provisions (net of reversals) of 19 crore, respectively. These provisions and reversals pertaining to prior periods are primarily on account of adjudication of certain disputed matters, upon filing of tax return and completion of assessments, across various jurisdictions.

Deferred income tax for the three months June 30, 2023 and June 30, 2022 substantially relates to origination and reversal of temporary differences.

The Company’s Advanced Pricing Arrangement (APA) with the Internal Revenue Service (IRS) for US branch income tax expired in March 2021. The Company has applied for renewal of APA and currently the US taxable income is based on the Company’s best estimate determined based on the expected value method.

2.18 REVENUE FROM OPERATIONS

Accounting Policy

The Company derives revenues primarily from IT services comprising software development and related services, cloud and infrastructure services, maintenance, consulting and package implementation, 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 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. 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 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 incomplete 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.

Certain cloud and infrastructure services contracts include multiple elements which may be subject to other specific accounting guidance, such as leasing guidance. These contracts are accounted in accordance with such specific accounting guidance. In such arrangements where the Company is able to determine that hardware and services are distinct performance obligations, it allocates the consideration to these performance obligations on a relative standalone selling price basis. In the absence of standalone selling price, the Company uses the expected cost-plus margin approach in estimating the standalone selling price. When such arrangements are considered as a single performance obligation, revenue is recognized over the period and measure of progress is determined based on promise in the contract.

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.

Certain eligible, nonrecurring costs (e.g. set-up or transition or transformation costs) that do not represent a separate performance obligation are recognized as an asset when such costs (a) relate directly to the contract; (b) generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future; and (c) are expected to be recovered.

Capitalized contract costs relating to upfront payments to customers are amortized to revenue and other capitalized costs are amortized to expenses over the respective contract life on a systematic basis consistent with the transfer of goods or services to customer to which the asset relates. Capitalized costs are monitored regularly for impairment. Impairment losses are recorded when present value of projected remaining operating cash flows is not sufficient to recover the carrying amount of the capitalized costs.

The Company presents revenues net of indirect taxes in its Statement of Profit and Loss.

Revenue from operations for the three months ended June 30, 2023 and June 30, 2022 is as follows:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Revenue from software services	31,748	29,487
Revenue from products and platforms	63	40
Total revenue from operations	31,811	29,527

Products & platforms

The Company derives revenues from the sale of products and platforms including Infosys Applied AI which applies next-generation AI and machine learning.The percentage of revenue from fixed-price contracts for each of the quarter ended June 30, 2023 and June 30, 2022 is 55%.

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.

2.19 OTHER INCOME, NET

2.19.1 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 foreign currency assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

2.19.2 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 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.

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 shall 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 June 30, 2023 and June 30, 2022 is as follows:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Interest income on financial assets carried at amortized cost
Tax free bonds and government bonds	33	37
Deposit with Bank and others	179	169
Interest income on financial assets carried at fair value through other comprehensive income
Non-convertible debentures, commercial papers, certificates of deposit and government securities	205	219
Income on investments carried at fair value through other comprehensive income	–	1
Income on investments carried at fair value through profit or loss
Gain / (loss) on liquid mutual funds and other investments	41	19
Dividend received from subsidiary	400	–
Exchange gains/(losses) on foreign currency forward and options contracts	135	(196)
Exchange gains/(losses) on translation of other assets and liabilities	(66)	334
Miscellaneous income, net	74	65
Total other income	1,001	648

2.20 EXPENSES

Accounting Policy

2.20.1 Gratuity and Pension

The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible Indian employees of Infosys. 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. The Company contributes Gratuity 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 the Life Insurance Corporation of India as permitted by Indian law.

The Company operates defined benefit pension plan in certain overseas jurisdictions, in accordance with the local laws. These plans are managed by third party fund managers. The plans provide for periodic payouts after retirement or for a lumpsum payment as set out in rules of each fund and includes death and disability benefits. The defined benefit plans require contributions which are based on a percentage of salary that varies depending on the age of the respective employees

Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an external actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and market risk.

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 is recognized in net profit in the Statement of Profit and Loss.

2.20.2 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 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.

2.20.3 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.

2.20.4 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.

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Employee benefit expenses
Salaries including bonus	15,708	14,261
Contribution to provident and other funds	499	444
Share based payments to employees (Refer to note 2.12)	132	118
Staff welfare	14	91
	16,353	14,914
Cost of software packages and others
For own use	378	338
Third party items bought for service delivery to clients	796	845
	1,174	1,183
Other expenses
Power and fuel	44	35
Brand and Marketing	224	191
Short-term leases	1	3
Rates and taxes	75	54
Repairs and Maintenance	242	221
Consumables	7	7
Insurance	42	34
Provision for post-sales client support and others	54	17
Commission to non-whole time directors	3	4
Impairment loss recognized / (reversed) under expected credit loss model	86	28
Auditor's remuneration
Statutory audit fees	1	2
Tax matters	–	–
Other services	–	–
Contributions towards Corporate Social Responsibility	60	52
Others	132	44
	971	692

2.21 BASIC AND DILUTED SHARES USED IN COMPUTING EARNINGS PER EQUITY 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.

2.22 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
	June 30, 2023	March 31, 2023
Contingent liabilities:
Claims against the Company, not acknowledged as debts(1)	4,351	4,316
[Amount paid to statutory authorities 6,097 crore (6,115 crore)]
Commitments:
Estimated amount of contracts remaining to be executed on capital contracts and not provided for	774	824
(net of advances and deposits)(2)
Other Commitments*	8	8

* Uncalled capital pertaining to investments

⁽¹⁾ As at June 30, 2023 and March 31, 2023, claims against the Company not acknowledged as debts in respect of income tax matters amounted to 3,964 crore and 3,953 crore, respectively.The claims against the Company primarily 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 Income Tax 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 tax claims amounted to 6,088 crore and 6,105 crore as at June 30, 2023 and March 31, 2023, respectively.

⁽²⁾ Capital contracts primarily comprises of commitments for infrastructure facilities and computer equipments.

Legal Proceedings

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.

2.23 RELATED PARTY TRANSACTIONS

Refer to the Company's Annual Report for the year ended March 31, 2023 for the full names and other details of the Company's subsidiaries and controlled trusts.

Changes in Subsidiaries

During the three months ended June 30, 2023, there are no changes in the subsidiaries.

The Company’s related party transactions during the three months June 30, 2023 and June 30, 2022 and outstanding balances as at June 30, 2023 and June 30, 2022 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:

Independent directors:

-Helene Auriol Potier (appointed as independent director effective May 26, 2023)

Executive Officers:

-Mohit Joshi (resigned as President effective March 11, 2023 and was on leave till June 9, 2023 which was his last date with the company)

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 June 30,
	2023	2022
Salaries and other short term employee benefits to whole-time directors and executive officers(1)(2)	32	32
Commission and other benefits to non-executive / independent directors	4	4
Total	36	36

⁽¹⁾ Total employee stock compensation expense for the three months ended June 30, 2023 and June 30, 2022 includes a charge of 20 crore and 17 crore, respectively, towards key managerial personnel.(Refer to note 2.12).

⁽²⁾ Does not include post-employment benefits and other long-term benefits based on actuarial valuation as these are done for the Company as a whole.

2.24 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	Bobby Parikh Director
Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023

EX-99.10 12B1 PLAN

Exhibit 99.10
Ind AS Consolidated

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Financial Statements under Indian Accounting Standards (Ind AS) for the three months June 30, 2023

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 Interim Condensed 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 judgments

1.5 Critical accounting estimates and judgments

2. Notes to the Interim Condensed Consolidated Financial Statements

2.1 Business Combinations

2.2 Property, plant and equipment

2.3 Goodwill and intangible assets

2.4 Investments

2.5 Loans

2.6 Other financial assets

2.7 Trade receivables

2.8 Cash and cash equivalents

2.9 Earmarked bank balance for dividend

2.10 Other assets

2.11 Financial instruments

2.12 Equity

2.13 Other financial liabilities

2.14 Other liabilities

2.15 Provisions

2.16 Income taxes

2.17 Revenue from operations

2.18 Other income, net

2.19 Expenses

2.20 Leases

2.21 Basic and diluted shares used in computing earnings per equity share

2.22 Contingent liabilities and commitments

2.23 Related party transactions

2.24 Segment reporting

2.25 Function wise classification of Condensed Consolidated Statement of Profit and Loss

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 June 30, 2023, the Condensed Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Statement of Cash Flows for the three months 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 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 state of affairs of the Group as at June 30, 2023, and their consolidated profit, their consolidated total comprehensive income, their consolidated changes in equity and their consolidated cash flows for the three 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 (“SA”s) 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.

Responsibilities of Management and Those Charged with Governance 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 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 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 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 Boards of Directors either intend to liquidate their own 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 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 such 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: Bengaluru Date: July 20, 2023 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)     Sanjiv V. Pilgaonkar Partner (Membership No.039826) UDIN:23039826BGXSAM8580

INFOSYS LIMITED AND SUBSIDIARIES

(In crore )

Condensed Consolidated Balance Sheets as at	Note No.	June 30, 2023	March 31, 2023
ASSETS
Non-current assets
Property, plant and equipment	2.2	12,939	13,346
Right-of-use assets	2.20	7,049	6,882
Capital work-in-progress		338	288
Goodwill	2.3	7,233	7,248
Other intangible assets		1,643	1,749
Financial assets
Investments	2.4	11,991	12,569
Loans	2.5	34	39
Other financial assets	2.6	2,230	2,798
Deferred tax assets (net)		1,025	1,245
Income tax assets (net)		6,922	6,453
Other non-current assets	2.10	2,444	2,318
Total non-current assets		53,848	54,935
Current assets
Financial assets
Investments	2.4	5,536	6,909
Trade receivables	2.7	26,183	25,424
Cash and cash equivalents	2.8	12,310	12,173
Earmarked bank balance for dividend	2.9	7,262	–
Loans	2.5	267	289
Other financial assets	2.6	11,773	11,604
Income tax assets (net)		11	6
Other current assets	2.10	14,132	14,476
Total current assets		77,474	70,881
Total assets		131,322	125,816
EQUITY AND LIABILITIES
Equity
Equity share capital	2.12	2,070	2,069
Other equity		72,373	73,338
Total equity attributable to equity holders of the Company		74,443	75,407
Non-controlling interests		385	388
Total equity		74,828	75,795
Liabilities
Non-current liabilities
Financial Liabilities
Lease liabilities	2.20	6,659	7,057
Other financial liabilities	2.13	1,866	2,058
Deferred tax liabilities (net)		1,118	1,220
Other non-current liabilities	2.14	356	500
Total non-current liabilities		9,999	10,835
Current liabilities
Financial Liabilities
Lease liabilities	2.20	1,824	1,242
Trade payables		3,759	3,865
Other financial liabilities	2.13	23,271	18,558
Other current liabilities	2.14	11,322	10,830
Provisions	2.15	1,538	1,307
Income tax liabilities (net)		4,781	3,384
Total current liabilities		46,495	39,186
Total equity and liabilities		131,322	125,816

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	Salil Parekh	Bobby Parikh
	Chairman	Chief Executive Officer	Director
		and Managing Director
	Nilanjan Roy	Jayesh Sanghrajka	A.G.S. Manikantha
	Chief Financial Officer	Executive Vice President and Deputy Chief Financial Officer	Company Secretary
Bengaluru July 20, 2023

INFOSYS LIMITED AND SUBSIDIARIES

(In crore, except equity share and per equity share data)

Condensed Consolidated Statement of Profit and Loss for the	Note No.	Three months ended June 30,
		2023	2022
Revenue from operations	2.17	37,933	34,470
Other income, net	2.18	561	676
Total income		38,494	35,146
Expenses
Employee benefit expenses	2.19	20,781	18,337
Cost of technical sub-contractors		3,124	3,909
Travel expenses		462	376
Cost of software packages and others	2.19	2,720	2,420
Communication expenses		182	170
Consultancy and professional charges		346	456
Depreciation and amortization expenses		1,173	950
Finance cost		90	56
Other expenses	2.19	1,254	938
Total expenses		30,132	27,612
Profit before tax		8,362	7,534
Tax expense:
Current tax	2.16	2,307	2,350
Deferred tax	2.16	110	(178)
Profit for the period		5,945	5,362
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		87	(86)
Equity instruments through other comprehensive income, net		1	3
		88	(83)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		6	26
Exchange differences on translation of foreign operations		15	53
Fair value changes on investments, net		75	(372)
		96	(293)
Total other comprehensive income /(loss), net of tax		184	(376)
Total comprehensive income for the period		6,129	4,986
Profit attributable to:
Owners of the Company		5,945	5,360
Non-controlling interests		–	2
		5,945	5,362
Total comprehensive income attributable to:
Owners of the Company		6,132	4,986
Non-controlling interests		(3)	–
		6,129	4,986
Earnings per equity share
Equity shares of par value 5/- each
Basic ()		14.37	12.78
Diluted ()		14.35	12.76
Weighted average equity shares used in computing earnings per equity share
Basic (in shares)	2.21	4,137,234,750	4,193,747,653
Diluted (in shares)	2.21	4,142,207,951	4,199,491,985

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	Salil Parekh	Bobby Parikh
	Chairman	Chief Executive Officer	Director
		and Managing Director
	Nilanjan Roy	Jayesh Sanghrajka	A.G.S. Manikantha
	Chief Financial Officer	Executive Vice President and Deputy Chief Financial Officer	Company Secretary
Bengaluru July 20, 2023

INFOSYS LIMITED AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Equity

(In crore)

Particulars

Equity Share capital(1)

OTHER EQUITY

Total equity attributable to equity holders of the Company

Non-controlling interest

Total equity

Reserves & Surplus

Other comprehensive income

Capital reserve

Capital redemption reserve

Securities Premium

Retained earnings

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve (2)

Other reserves (3)

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)

Balance as at April 1, 2022

2,098

54

139

200

61,313

1,061

606

8,339

16

254

1,560

2

(292)

75,350

386

75,736

Impact on adoption of amendment to Ind AS 37#

–

–

–

–

(19)

–

–

–

–

–

–

–

–

(19)

–

(19)

2,098

54

139

200

61,294

1,061

606

8,339

16

254

1,560

2

(292)

75,331

386

75,717

Changes in equity for the three months ended June 30, 2022

Profit for the period

–

–

–

–

5,360

–

–

–

–

–

–

–

–

5,360

2

5,362

Remeasurement of the net defined benefit liability/asset, net*

–

–

–

–

–

–

–

–

–

–

–

–

(86)

(86)

–

(86)

Equity instruments through other comprehensive income, net*

–

–

–

–

–

–

–

–

–

3

–

–

–

3

–

3

Fair value changes on derivatives designated as cash flow hedge, net*

–

–

–

–

–

–

–

–

–

–

–

26

–

26

–

26

Exchange differences on translation of foreign operations

–

–

–

–

–

–

–

–

–

–

55

–

–

55

(2)

53

Fair value changes on investments, net*

–

–

–

–

–

–

–

–

–

–

–

–

(372)

(372)

–

(372)

Total Comprehensive income for the period

–

–

–

–

5,360

–

–

–

–

3

55

26

(458)

4,986

–

4,986

Shares issued on exercise of employee stock options (Refer to Note 2.12)

–

–

–

2

–

–

–

–

–

–

–

–

–

2

–

2

Employee stock compensation expense (Refer to Note 2.12)

–

–

–

–

–

–

134

–

–

–

–

–

–

134

–

134

Transfer on account of options not exercised

–

–

–

–

–

1

(1)

–

–

–

–

–

–

–

–

–

Transferred on account of exercise of stock options

–

–

–

135

–

–

(135)

–

–

–

–

–

–

–

–

–

Income tax benefit arising on exercise of stock options

–

–

–

–

–

–

14

–

–

–

–

–

–

14

–

14

Dividends (1)

–

–

–

–

(6,711)

–

–

–

–

–

–

–

–

(6,711)

–

(6,711)

Dividends paid to non controlling interest of subsidiary

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(21)

(21)

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

–

–

296

–

–

(296)

–

–

–

–

–

–

–

–

Balance as at June 30, 2022

2,098

54

139

337

60,239

1,062

618

8,043

16

257

1,615

28

(750)

73,756

365

74,121

(In crore)

Particulars

Equity Share capital(1)

OTHER EQUITY

Total equity attributable to equity holders of the Company

Non-controlling interest

Total equity

Reserves & Surplus

Other comprehensive income

Capital reserve

Capital redemption reserve

Securities Premium

Retained earnings

General reserve

Share Options Outstanding Account

Special Economic Zone Re-investment reserve (2)

Other reserves (3)

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)

Balance as at April 1, 2023

2,069

54

169

166

58,957

1,054

878

10,014

19

247

2,325

(5)

(540)

75,407

388

75,795

Changes in equity for the three months ended June 30, 2023

Profit for the period

–

–

–

–

5,945

–

–

–

–

–

–

–

–

5,945

–

5,945

Remeasurement of the net defined benefit liability/asset, net*

–

–

–

–

–

–

–

–

–

–

–

–

87

87

–

87

Equity instruments through other comprehensive income, net*

–

–

–

–

–

–

–

–

–

1

–

–

–

1

–

1

Fair value changes on derivatives designated as cash flow hedge, net*

–

–

–

–

–

–

–

–

–

–

–

6

–

6

–

6

Exchange differences on translation of foreign operations

–

–

–

–

–

–

–

–

–

–

18

–

–

18

(3)

15

Fair value changes on investments, net*

–

–

–

–

–

–

–

–

–

–

–

–

75

75

–

75

Total Comprehensive income for the period

–

–

–

–

5,945

–

–

–

–

1

18

6

162

6,132

(3)

6,129

Shares issued on exercise of employee stock options (Refer to Note 2.12)

1

–

–

1

–

–

–

–

–

–

–

–

–

2

–

2

Employee stock compensation expense (Refer to Note 2.12)

–

–

–

–

–

–

144

–

–

–

–

–

–

144

–

144

Transferred on account of exercise of stock options

–

–

–

274

–

–

(274)

–

–

–

–

–

–

–

–

–

Transferred on account of options not exercised

–

–

–

–

–

6

(6)

–

–

–

–

–

–

–

–

–

Dividends (1)

–

–

–

–

(7,242)

–

–

–

–

–

–

–

–

(7,242)

–

(7,242)

Transferred to Special Economic Zone Re-investment reserve

–

–

–

–

(760)

–

–

760

–

–

–

–

–

–

–

–

Transferred from Special Economic Zone Re-investment reserve on utilization

–

–

–

–

202

–

–

(202)

–

–

–

–

–

–

–

–

Balance as at June 30, 2023

2,070

54

169

441

57,102

1,060

742

10,572

19

248

2,343

1

(378)

74,443

385

74,828

* Net of tax

^# Impact on account of adoption of amendment to Ind AS 37 Provisions, Contingent Liabilities and Contingents Assets

⁽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	Salil Parekh	Bobby Parikh
	Chairman	Chief Executive Officer	Director
		and Managing Director
	Nilanjan Roy	Jayesh Sanghrajka	A.G.S. Manikantha
	Chief Financial Officer	Executive Vice President and Deputy Chief Financial Officer	Company Secretary
Bengaluru July 20, 2023

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.	Three months ended June 30,
		2023	2022
Cash flow from operating activities
Profit for the period		5,945	5,362
Adjustments to reconcile net profit to net cash provided by operating activities:
Income tax expense	2.16	2,417	2,172
Depreciation and amortization		1,173	950
Interest and dividend income		(517)	(485)
Finance cost		90	56
Impairment loss recognized / (reversed) under expected credit loss model		91	44
Exchange differences on translation of assets and liabilities, net		(20)	79
Stock compensation expense		146	132
Other adjustments		555	126
Changes in assets and liabilities
Trade receivables and unbilled revenue		(101)	(2,520)
Loans, other financial assets and other assets		(311)	(1,362)
Trade payables		(106)	(184)
Other financial liabilities, other liabilities and provisions		(1,822)	2,466
Cash generated from operations		7,540	6,836
Income taxes paid		(1,379)	(1,325)
Net cash generated by operating activities		6,161	5,511
Cash flows from investing activities
Expenditure on property, plant and equipment and intangibles		(807)	(692)
Deposits placed with corporation		(444)	(216)
Redemption of deposits placed with Corporation		252	22
Interest and dividend received		670	561
Payment towards acquisition of business, net of cash acquired	2.1	–	(230)
Payment of contingent consideration pertaining to acquisition of business		–	(60)
Other receipts		126	22
Payments to acquire Investments
Liquid mutual fund units		(17,680)	(20,745)
Target maturity fund		–	–
Certificates of deposit		(1,285)	(2,931)
Commercial Paper		(1,558)	(283)
Non-convertible debentures		(104)	(125)
Government securities		–	(1,420)
Others		(3)	(10)
Proceeds on sale of Investments
Liquid mutual funds units		17,304	21,097
Certificates of deposit		3,974	2,188
Commercial Paper		824	–
Non-convertible debentures		375	295
Government securities		226	636
Net cash generated / (used in) from investing activities		1,870	(1,891)
Cash flows from financing activities
Payment of lease liabilities		(439)	(250)
Payment of dividends		(1)	(6,712)
Payment of dividend to non-controlling interest of subsidiary		–	(21)
Shares issued on exercise of employee stock options		2	2
Other receipts		–	72
Other payments		(209)	(112)
Net cash used in financing activities		(647)	(7,021)
Net increase / (decrease) in cash and cash equivalents		7,384	(3,401)
Effect of exchange rate changes on cash and cash equivalents		15	(89)
Cash and cash equivalents at the beginning of the period	2.8	12,173	17,472
Cash and cash equivalents at the end of the period	2.8	19,572	13,982
Supplementary information:
Restricted cash balance	2.8	381	422
Closing cash and cash equivalents as per consolidated statement of cash flows		19,572	13,982
Less: Earmarked bank balance for dividend	2.9	7,262	–
Closing cash and cash equivalents as per Consolidated Balance Sheet	2.8	12,310	13,982

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	Salil Parekh	Bobby Parikh
	Chairman	Chief Executive Officer	Director
		and Managing Director
	Nilanjan Roy	Jayesh Sanghrajka	A.G.S. Manikantha
	Chief Financial Officer	Executive Vice President and Deputy Chief Financial Officer	Company Secretary
Bengaluru July 20, 2023

INFOSYS LIMITED AND SUBSIDIARIES

Overview and 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 strategic objective is to build a sustainable organization that remains relevant to the agenda of clients, while creating growth opportunities for employees and generating profitable returns for investors. Infosys strategy is to be a navigator for our clients as they ideate, plan and execute on their journey to a digital future.

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 July 20, 2023.

1.2 Basis of preparation of financial statements

These interim condensed consolidated financial statements are prepared in compliance with Indian Accounting Standard (Ind AS) 34 Interim Financial Reporting, under the historical cost convention on 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, 2023. 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. The material accounting policy information used in preparation of the audited condensed consolidated interim financial statements have been discussed in the respective notes.

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 judgments

The preparation of the interim condensed consolidated 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 consolidated 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. 1.5. 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 and judgements are reflected in the interim condensed consolidated 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.

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 judgment.

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 the 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 judgment and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

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.

Provisions for estimated losses, if any, on incomplete 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 Group's two major tax jurisdictions are India and the United States, 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, the 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, the 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 2.16).

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 fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. These valuations are conducted by external valuation experts. Estimates are required to be made in determining the value of contingent consideration, value of option arrangements and intangible assets. These measurements are based on information available at the acquisition date and are based on expectations and assumptions that have been deemed reasonable by the Management (Refer to Note 2.1).

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 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 to Note 2.2).

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 (Refer to Note 2.3.1).

2. Notes to the Interim Condensed Consolidated Financial Statements

2.1 BUSINESS COMBINATIONS

Accounting policy

Business combinations have been accounted for using the acquisition method under the provisions of Ind AS 103, Business Combinations.

The purchase price in 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 purchase price 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 Consolidated 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.

Business combinations between entities under common control is accounted for at carrying value of the assets acquired and liabilities assumed 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 derecognized.

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.

2.2 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 charge in respect of periodic depreciation is derived at after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. 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 the 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 25 years

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

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. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset.

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 June 30, 2023 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, 2023	1,431	11,562	3,302	1,482	8,519	2,303	1,445	45	30,089
Additions	–	5	22	26	219	28	27	–	327
Deletions*	–	–	(27)	(22)	(266)	(24)	(7)	–	(346)
Translation difference	–	(53)	(4)	(2)	(1)	–	(8)	–	(68)
Gross carrying value as at June 30, 2023	1,431	11,514	3,293	1,484	8,471	2,307	1,457	45	30,002
Accumulated depreciation as at April 1, 2023	–	(4,535)	(2,437)	(1,198)	(5,826)	(1,675)	(1,032)	(40)	(16,743)
Depreciation	–	(109)	(66)	(33)	(362)	(65)	(53)	(1)	(689)
Accumulated depreciation on deletions*	–	–	27	22	265	24	5	–	343
Translation difference	–	13	4	1	1	–	7	–	26
Accumulated depreciation as at June 30, 2023	–	(4,631)	(2,472)	(1,208)	(5,922)	(1,716)	(1,073)	(41)	(17,063)
Carrying value as at April 1, 2023	1,431	7,027	865	284	2,693	628	413	5	13,346
Carrying value as at June 30, 2023	1,431	6,883	821	276	2,549	591	384	4	12,939

The changes in the carrying value of property, plant and equipment for the three months ended June 30, 2022 were 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, 2022	1,431	11,224	3,210	1,427	8,527	2,278	1,234	44	29,375
Additions - Business Combination	–	–	–	5	3	1	2	–	11
Additions	–	132	47	22	333	51	63	–	648
Deletions*	–	–	(3)	(20)	(71)	(17)	(11)	–	(122)
Translation difference	–	(13)	(1)	(1)	(2)	–	(1)	–	(18)
Gross carrying value as at June 30, 2022	1,431	11,343	3,253	1,433	8,790	2,313	1,287	44	29,894
Accumulated depreciation as at April 1, 2022	–	(4,100)	(2,344)	(1,150)	(6,034)	(1,779)	(856)	(37)	(16,300)
Depreciation	–	(107)	(69)	(29)	(301)	(57)	(42)	(1)	(606)
Accumulated depreciation on deletions*	–	–	3	20	71	17	11	–	122
Translation difference	–	2	1	1	–	(1)	1	–	4
Accumulated depreciation as at June 30, 2022	–	(4,205)	(2,409)	(1,158)	(6,264)	(1,820)	(886)	(38)	(16,780)
Carrying value as at April 1, 2022	1,431	7,124	866	277	2,493	499	378	7	13,075
Carrying value as at June 30, 2022	1,431	7,138	844	275	2,526	493	401	6	13,114

⁽¹⁾ Buildings include 250/- being the value of five shares of 50/- each in Mittal Towers Premises Co-operative Society Limited.

* During the three months ended June 30, 2023 and June 30, 2022, certain assets which were not in use having gross book value of 320 crore (net book value: Nil) and 68 crore (net book value: Nil) respectively, were retired.

The aggregate depreciation has been included under depreciation and amortization expense in the interim condensed Consolidated Statement of Profit and Loss.

Repairs and maintenance costs are recognized in the Consolidated Statement of Profit and Loss when incurred.

2.3 GOODWILL AND OTHER INTANGIBLE ASSETS

2.3.1 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 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 and which represents the lowest level at which goodwill is monitored for internal management purposes. 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. Key assumptions in the cash flow projections are prepared based on current economic conditions and includes estimated long term growth rates, weighted average cost of capital and estimated operating margins.

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

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Carrying value at the beginning	7,248	6,195
Goodwill on acquisitions	–	630
Translation differences	(15)	423
Carrying value at the end	7,233	7,248

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.

2.3.2 Intangible Assets

Accounting policy

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Group has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labor, overhead costs that are directly attributable to prepare the asset for its intended use.

Impairment

Intangible 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 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 amortization) had no impairment loss been recognized for the asset in prior years.

2.4 INVESTMENTS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current Investments
Unquoted
Investments carried at fair value through other comprehensive income
Preference securities	193	193
Equity instruments	3	3
	196	196
Investments carried at fair value through profit or loss
Target maturity fund units	409	402
Others (1)	172	169
	581	571
Quoted
Investments carried at amortized cost
Government bonds	28	28
Tax free bonds	1,739	1,742
	1,767	1,770
Investments carried at fair value through other comprehensive income
Non convertible debentures	2,336	2,713
Government securities	7,111	7,319
	9,447	10,032
Total non-current investments	11,991	12,569
Current Investments
Unquoted
Investments carried at fair value through profit or loss
Liquid mutual fund units	1,397	975
	1,397	975
Investments carried at fair value through other comprehensive income
Commercial Paper	1,496	742
Certificates of deposit	939	3,574
	2,435	4,316
Quoted
Investments carried at amortized cost
Tax free bonds	150	150
	150	150
Investments carried at fair value through other comprehensive income
Non convertible debentures	1,272	1,155
Government securities	282	313
	1,554	1,468
Total current investments	5,536	6,909
Total investments	17,527	19,478
Aggregate amount of quoted investments	12,918	13,420
Market value of quoted investments (including interest accrued), current	1,723	1,637
Market value of quoted investments (including interest accrued), non current	11,446	12,042
Aggregate amount of unquoted investments	4,609	6,058
Investments carried at amortized cost	1,917	1,920
Investments carried at fair value through other comprehensive income	13,632	16,012
Investments carried at fair value through profit or loss	1,978	1,546

⁽¹⁾ Uncalled capital commitments outstanding as at June 30, 2023 and March 31, 2023 was 88 crore and 92 crore, respectively.

Refer to Note 2.11 for Accounting policies on Financial Instruments.

Method of fair valuation:

(In crore)

Class of investment	Method	Fair value as at
		June 30, 2023	March 31, 2023
Liquid mutual fund units - carried at fair value through profit or loss	Quoted price	1,397	975
Target maturity fund units - carried at fair value through profit or loss	Quoted price	409	402
Tax free bonds and government bonds - carried at amortized cost	Quoted price and market observable inputs	2,153	2,148
Non-convertible debentures - carried at fair value through other comprehensive income	Quoted price and market observable inputs	3,608	3,868
Government securities - carried at fair value through other comprehensive income	Quoted price and market observable inputs	7,393	7,632
Commercial Papers - carried at fair value through other comprehensive income	Market observable inputs	1,496	742
Certificates of deposit - carried at fair value through other comprehensive income	Market observable inputs	939	3,574
Unquoted equity and preference securities - carried at fair value through other comprehensive income	Discounted cash flows method, Market multiples method, Option pricing model	196	196
Others - carried at fair value through profit or loss	Discounted cash flows method, Market multiples method, Option pricing model	172	169
Total		17,763	19,706

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

2.5 LOANS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non Current
Loans considered good - Unsecured
Other loans
Loans to employees	34	39
	34	39
Loans credit impaired - Unsecured
Other loans
Loans to employees	1	2
Less: Allowance for credit impairment	(1)	(2)
	–	–
Total non-current loans	34	39
Current
Loans considered good - Unsecured
Other loans
Loans to employees	267	289
Total current loans	267	289
Total loans	301	328

2.6 OTHER FINANCIAL ASSETS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non Current
Security deposits (1)	46	47
Rental deposits (1)	240	240
Unbilled revenues (1)#	1,128	1,185
Net investment in sublease of right-of-use asset (1)	6	305
Restricted deposits (1)*	104	96
Others (1)	706	925
Total non-current other financial assets	2,230	2,798
Current
Security deposits (1)	11	10
Rental deposits (1)	30	32
Restricted deposits (1)*	2,532	2,348
Unbilled revenues (1)#	7,899	8,317
Interest accrued but not due (1)	335	488
Foreign currency forward and options contracts (2)(3)	171	101
Net investment in sublease of right of-use-asset (1)	5	53
Others (1)	790	255
Total current other financial assets	11,773	11,604
Total other financial assets	14,003	14,402
(1) Financial assets carried at amortized cost	13,832	14,301
(2) Financial assets carried at fair value through other comprehensive income	22	32
(3) Financial assets carried at fair value through profit or loss	149	69

* 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.

2.7 TRADE RECEIVABLES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Trade Receivable considered good - Unsecured	26,765	25,965
Less: Allowance for expected credit loss	582	541
Trade Receivable considered good - Unsecured	26,183	25,424
Trade Receivable - credit impaired - Unsecured	160	142
Less: Allowance for credit impairment	160	142
Trade Receivable - credit impaired - Unsecured	–	–
Total trade receivables	26,183	25,424

2.8 CASH AND CASH EQUIVALENTS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Balances with banks
In current and deposit accounts	10,363	10,026
Cash on hand	–	–
Others
Deposits with financial institutions	1,947	2,147
Total cash and cash equivalents	12,310	12,173
Balances with banks in unpaid dividend accounts	36	37
Deposit with more than 12 months maturity	125	833

Cash and cash equivalents as at June 30, 2023 and March 31, 2023 include restricted cash and bank balances of 381 crore and 362 crore respectively. The restrictions are primarily on account of bank balances held by irrevocable trusts controlled by the company.

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.

2.9 EARMARKED BANK BALANCE FOR DIVIDEND

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Current
Earmarked bank balance for dividend	7,262	–
Total	7,262	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023. Payment date for the dividend is July 3, 2023. Earmarked bank balance for dividend represents cash which is deposited in a designated bank account only for payment of final dividend for financial year ended March 31, 2023.

2.10 OTHER ASSETS

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Capital advances	161	159
Advances other than capital advances
Others
Withholding taxes and others	685	684
Unbilled revenues #	251	264
Defined benefit plan assets	34	36
Prepaid expenses	395	332
Deferred Contract Cost
Cost of obtaining a contract *	189	191
Cost of fulfillment	729	652
Total non-current other assets	2,444	2,318
Current
Advances other than capital advances
Payment to vendors for supply of goods	222	202
Others
Unbilled revenues #	6,729	6,972
Withholding taxes and others	2,978	3,268
Prepaid expenses	3,097	2,745
Deferred Contract Cost
Cost of obtaining a contract *	657	853
Cost of fulfillment	200	175
Other receivables	249	261
Total current other assets	14,132	14,476
Total other assets	16,576	16,794

^# Classified as non financial asset as the contractual right to consideration is dependent on completion of contractual milestones.

* Includes technology assets taken over by the Group from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Group in accordance with Ind AS 115 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Group has entered into financing arrangements with a third party for these assets. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to 582 crore. This includes, 20 crore was settled directly by the third party to the customer on behalf of the Group and accordingly considered as non-cash transaction (Refer to Note 2.13).

Withholding taxes and others primarily consist of input tax credits and Cenvat/VAT recoverable from Government of India.

2.11 FINANCIAL INSTRUMENTS

Accounting policy

2.11.1 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, 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.

2.11.2 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 carried 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 carried 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.

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 such contracts is generally a bank.

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

This category includes 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.

2.11.3 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.

2.11.4 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, option pricing model, market multiples, 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 these instruments.

2.11.5 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 Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Group considers current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates.

The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recorded is recognized as an impairment loss or gain in Consolidated Statement of Profit and Loss.

Financial instruments by category

The carrying value and fair value of financial instruments by categories as at June 30, 2023 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 to Note 2.8)	12,310	–	–	–	–	12,310	12,310
Earmarked bank balance for dividend (Refer Note no. 2.9)	7,262	–	–	–	–	7,262	7,262
Investments (Refer to Note 2.4)
Equity and preference securities	–	–	–	196	–	196	196
Tax free bonds and government bonds	1,917	–	–	–	–	1,917	2,153(1)
Liquid mutual fund units	–	–	1,397	–	–	1,397	1,397
Target maturity fund units	–	–	409	–	–	409	409
Non convertible debentures	–	–	–	–	3,608	3,608	3,608
Government securities	–	–	–	–	7,393	7,393	7,393
Commercial paper	–	–	–	–	1,496	1,496	1,496
Certificates of deposit	–	–	–	–	939	939	939
Other investments	–	–	172	–	–	172	172
Trade receivables (Refer to Note 2.7)	26,183	–	–	–	–	26,183	26,183
Loans (Refer to Note 2.5)	301	–	–	–	–	301	301
Other financials assets (Refer to Note 2.6)(3)	13,832	–	149	–	22	14,003	13,911(2)
Total	61,805	–	2,127	196	13,458	77,586	77,730
Liabilities:
Trade payables	3,759	–	–	–	–	3,759	3,759
Lease liabilities (Refer to Note 2.20)	8,483	–	–	–	–	8,483	8,483
Financial Liability under option arrangements (Refer to Note 2.13)	–	–	627	–	–	627	627
Other financial liabilities (Refer to Note 2.13)	21,735	–	145	–	6	21,886	21,886
Total	33,977	–	772	–	6	34,755	34,755

⁽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 92 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, 2023 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 to Note 2.8)	12,173	–	–	–	–	12,173	12,173
Investments (Refer to Note 2.4)
Equity and preference securities	–	–	–	196	–	196	196
Tax free bonds and government bonds	1,920	–	–	–	–	1,920	2,148(1)
Liquid mutual fund units	–	–	975	–	–	975	975
Target maturity fund units	–	–	402	–	–	402	402
Non convertible debentures	–	–	–	–	3,868	3,868	3,868
Government securities	–	–	–	–	7,632	7,632	7,632
Commercial paper	–	–	–	–	742	742	742
Certificates of deposit	–	–	–	–	3,574	3,574	3,574
Other investments	–	–	169	–	–	169	169
Trade receivables (Refer to Note 2.7)	25,424	–	–	–	–	25,424	25,424
Loans (Refer to Note 2.5)	328	–	–	–	–	328	328
Other financials assets (Refer to Note 2.6)(3)	14,301	–	69	–	32	14,402	14,318(2)
Total	54,146	–	1,615	196	15,848	71,805	71,949
Liabilities:
Trade payables	3,865	–	–	–	–	3,865	3,865
Lease liabilities (Refer to Note 2.20)	8,299	–	–	–	–	8,299	8,299
Financial Liability under option arrangements (Refer to Note 2.13)	–	–	600	–	–	600	600
Other financial liabilities (Refer to Note 2.13)	17,359	–	161	–	14	17,534	17,534
Total	29,523	–	761	–	14	30,298	30,298

⁽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 84 crore

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

For trade receivables, trade payables, other assets and 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.

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 measured at fair value on a recurring basis as at June 30, 2023 is as follows:

(In crore)

Particulars	As at June 30, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.4)
Investments in liquid mutual funds	1,397	1,397	–	–
Investments in target maturity fund units	409	409	–	–
Investments in tax free bonds	2,125	1,969	156	–
Investments in government bonds	28	28	–	–
Investments in non convertible debentures	3,608	2,244	1,364	–
Investment in government securities	7,393	7,393	–	–
Investments in equity instruments	3	–	–	3
Investments in preference securities	193	–	–	193
Investments in commercial paper	1,496	–	1,496	–
Investments in certificates of deposit	939	–	939	–
Other investments	172	–	–	172
Others
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer to Note 2.6)	171	–	171	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer to Note 2.13)	52	–	52	–
Financial liability under option arrangements (Refer to Note 2.13) (1)	627	–	–	627
Liability towards contingent consideration (Refer to Note 2.13)(1)	99	–	–	99

⁽¹⁾ Discount rate ranges from 10% to 17%

During the three months ended June 30, 2023, non-convertible debentures, government securities and tax free bonds of 1,449 crore was transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price.

The fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at March 31, 2023 was as follows:

(In crore)

Particulars	As at March 31, 2023	Fair value measurement at end of the reporting period using
		Level 1	Level 2	Level 3
Assets
Investments (Refer to note 2.4)
Investments in liquid mutual funds	975	975	–	–
Investments in target maturity fund units	402	402	–	–
Investments in tax free bonds	2,120	1,331	789	–
Investments in government bonds	28	28	–	–
Investments in non convertible debentures	3,868	1,793	2,075	–
Investment in government securities	7,632	7,549	83	–
Investments in equity instruments	3	–	–	3
Investments in preference securities	193	–	–	193
Investments in commercial paper	742	–	742	–
Investments in certificates of deposit	3,574	–	3,574	–
Other investments	169	–	–	169
Others
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts (Refer to Note 2.6)	101	–	101	–
Liabilities
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts (Refer to Note 2.13)	78	–	78	–
Financial liability under option arrangements (Refer to Note 2.13) (1)	600	–	–	600
Liability towards contingent consideration (Refer to Note 2.13)(1)	97	–	–	97

⁽¹⁾ Discount rate ranges from 10% to 15%

During the year ended March 31, 2023, government securities and tax free bonds of 383 crore was transferred from Level 2 to Level 1 of fair value hierarchy, since these were valued based on quoted price. Further, non-convertible debentures of 1,611 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, target maturity fund units, tax free bonds, certificates of deposit, commercial paper, treasury bills, government securities, 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 Group's risk management program.

2.12 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.

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

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 / retained earnings.

Retained earnings

Retained earnings represent the amount of accumulated earnings of the Group.

Securities premium

The amount received in excess of the par value of equity shares has been classified as securities premium. Amounts have been utilized for bonus issue and share buyback from share premium account.

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.

Special Economic Zone Re-investment reserve

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.

Other components of equity

Other components of equity include 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 interim condensed Consolidated Statement of Profit and Loss upon the occurrence of the related forecasted transaction.

EQUITY SHARE CAPITAL

(In crore, except as otherwise stated)

Particulars	As at
	June 30, 2023	March 31, 2023
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)	2,070	2,069
4,13,84,54,008 (4,13,63,87,925) equity shares fully paid-up(2)
	2,070	2,069

Note: Forfeited shares amounted to 1,500 (1,500)

⁽¹⁾ Refer to Note 2.21 for details of basic and diluted shares

⁽²⁾ Net of treasury shares 1,17,38 357 (1,21,72,119)

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 favor of the beneficiaries.

For details of shares reserved for issue under the employee stock option plan of the Company refer to the note below.

The reconciliation of the number of shares outstanding and the amount of share capital as at June 30, 2023 and March 31, 2023 are as follows:

(In crore, except as stated otherwise)

Particulars	As at June 30, 2023		As at March 31, 2023
	Number of shares	Amount	Number of shares	Amount
As at the beginning of the period	413,63,87,925	2,069	419,30,12,929	2,098
Add: Shares issued on exercise of employee stock options	20,66,083	1	38,01,344	1
Less: Shares bought back	–	–	6,04,26,348	30
As at the end of the period	413,84,54,008	2,070	413,63,87,925	2,069

Capital allocation policy

Effective 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 June 30, 2023, 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. Companies are required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

The amount of per share dividend recognized as distribution to equity shareholders in accordance with Companies Act 2013 is as follows:

(in )

Particulars	Three months ended June 30,
	2023	2022
Final dividend for fiscal 2022	–	16.00
Final dividend for fiscal 2023	17.50	–

The Board of Directors in their meeting held on April 13, 2023 recommended a final dividend of 17.50/- per equity share for the financial year ended March 31, 2023. The same was approved by the shareholders at the Annual General Meeting (AGM) of the Company held on June 28, 2023 which will result in a net cash outflow of 7,242 crore, excluding dividend paid on treasury shares. Payment date for the dividend is July 3, 2023.

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 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 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 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). These instruments will generally vest over a period of 4 years. The plan numbers mentioned above are further adjusted with 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 1,17,38,357 and 1,21,72,119 shares as at June 30, 2023 and March 31, 2023, 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 June 30, 2023 and March 31, 2023.

The following is the summary of grants made during the three months ended June 30, 2023 and June 30, 2022:

Particulars	2019 Plan		2015 Plan
	Three months ended June 30,		Three months ended June 30,
	2023	2022	2023	2022
Equity Settled RSUs
Key Management Personnel (KMP)	78,281	176,893	333,596	101,967
Employees other than KMP	–	370,960	4,500	–
Total Grants	78,281	547,853	338,096	101,967

Notes on grants to KMP:

CEO & MD

Under the 2015 Plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the grant of performance-based RSUs (Annual performance equity grant) of fair value of 34.75 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain performance targets. Accordingly, 2,72,026 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance equity ESG grant) of fair value of 2 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on achievement of certain environment, social and governance milestones as determined by the Board. Accordingly, 15,656 performance based RSU’s were granted effective May 2, 2023.

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved the performance-based grant of RSUs (Annual performance Equity TSR grant) of fair value of 5 crore for fiscal 2024 under the 2015 Plan. These RSUs will vest in line with the employment agreement based on Company’s performance on cumulative relative TSR over the years and as determined by the Board. Accordingly, 39,140 performance based RSU’s were granted effective May 2, 2023.

Though the annual time based grants and annual performance equity TSR grant for the remaining employment term ending on March 31, 2027 have not been granted as of June 30, 2023, 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 payment. The grant date for this purpose in accordance with Ind AS 102, Share based payment is July 1, 2022.

Under the 2019 Plan:

The Board, on April 13, 2023, based on the recommendations of the Nomination and Remuneration Committee, approved performance-based grant of RSUs amounting to 10 crore for fiscal 2024 under the 2019 Plan. These RSUs will vest based on achievement of certain performance targets. Accordingly, 78,281 performance based RSU’s were granted effective May 2, 2023.

Other KMP

Under the 2015 Plan:

During the three months ended June 30, 2023, based on recommendations of Nomination and Remuneration Committee, the Board approved 6,774 performance based RSUs to a KMP under the 2015 plan. The performance based RSUs will vest over three years based on certain performance targets.

The break-up of employee stock compensation expense is as follows:

(in crore)

Particulars	Three months ended June 30,
	2023	2022
Granted to:
KMP	20	17
Employees other than KMP	126	115
Total (1)	146	132
(1) Cash-settled stock compensation expense included in the above	2	(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 2024- Equity Shares-RSU	Fiscal 2023- Equity Shares-RSU	Fiscal 2023- ADS-RSU
Weighted average share price () / ($ ADS)	1,277	1,525	18.08
Exercise price () / ($ ADS)	5.00	5.00	0.07
Expected volatility (%)	25-31	23-32	27-34
Expected life of the option (years)	1-4	1-4	1-4
Expected dividends (%)	2-3	2-3	2-3
Risk-free interest rate (%)	7	5-7	2-5
Weighted average fair value as on grant date () / ($ ADS)	1,113	1,210	13.69

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.

2.13 OTHER FINANCIAL LIABILITIES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Others
Accrued compensation to employees (1)	7	5
Accrued expenses (1)	1,535	1,628
Compensated absences	81	83
Other Payables (1)(4)	243	342
Total non-current other financial liabilities	1,866	2,058
Current
Unpaid dividends (1)	36	37
Others
Accrued compensation to employees (1)	3,794	4,174
Accrued expenses (1)	7,384	7,802
Retention monies (1)	15	20
Payable for acquisition of business - Contingent consideration (2)	99	97
Payable by controlled trusts (1)	211	211
Compensated absences	2,543	2,399
Financial liability under option arrangements (2) #	627	600
Foreign currency forward and options contracts (2)(3)	52	78
Capital creditors (1)	263	674
Final dividend payable to shareholders (1)*	6,523	–
Other payables (1)(4)	1,724	2,466
Total current other financial liabilities	23,271	18,558
Total other financial liabilities	25,137	20,616
(1) Financial liability carried at amortized cost	21,735	17,359
(2) Financial liability carried at fair value through profit or loss	772	761
(3) Financial liability carried at fair value through other comprehensive income	6	14

⁽⁴⁾ Deferred contract cost (Refer to Note 2.10) includes technology assets taken over by the Group from a customer as a part of transformation project which is not considered as distinct goods or services and the control related to the assets is not transferred to the Group in accordance with Ind AS 115 - Revenue from contract with customers. Accordingly, the same has been considered as a reduction to the total contract value and accounted as Deferred contract cost. The Group has entered into financing arrangements with a third party for these assets. As at June 30, 2023, the financial liability pertaining to such arrangements amounts to 582 crore. During the three months ended June 30, 2023, 20 crore was settled directly by the third party to the customer on behalf of the Group and accordingly considered as non-cash transaction.

# Represents liability related to options issued by the Group over the non-controlling interests in its subsidiaries

* Pertains to final dividend declared by the Company for fiscal 2023 and approved by the shareholders on June 28, 2023. Payment date for dividend is July 3, 2023 (Refer to Note 2.12)

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

2.14 OTHER LIABILITIES

(In crore)

Particulars	As at
	June 30, 2023	March 31, 2023
Non-current
Others
Deferred income - government grants	63	43
Accrued defined benefit liability	280	445
Deferred income	6	6
Others	7	6
Total non-current other liabilities	356	500
Current
Unearned revenue	7,330	7,163
Others
Withholding taxes and others	3,975	3,632
Accrued defined benefit liability	4	4
Deferred income - government grants	11	29
Others	2	2
Total current other liabilities	11,322	10,830
Total other liabilities	11,678	11,330

2.15 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. Provisions for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete 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
	June 30, 2023	March 31, 2023
Current
Others
Post-sales client support and other provisions	1,538	1,307
Total provisions	1,538	1,307

Provision for post sales client support and other provisions majorly 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 profit and loss.

2.16 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 equity or 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; deferred tax assets and deferred 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 equity.

Income tax expense in the Consolidated Statement of Profit and Loss comprises:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Current taxes	2,307	2,350
Deferred taxes	110	(178)
Income tax expense	2,417	2,172

Income tax expense for the three months ended June 30, 2023 and June 30, 2022 includes reversals (net of provisions) of 15 crore and provisions (net of reversals) of 35 crore, respectively. These provisions and reversals pertaining to prior periods are primarily on account of adjudication of certain disputed matters, upon filing of tax return and completion of assessments, across various jurisdictions.

Deferred income tax for the three months ended June 30, 2023 and June 30, 2022 substantially relates to origination and reversal of temporary differences.

The Company’s Advanced Pricing Arrangement (APA) with the Internal Revenue Service (IRS) for US branch income tax expired in March 2021. The Company has applied for renewal of APA and currently the US taxable income is based on the Company’s best estimate determined based on the expected value method.

2.17 REVENUE FROM OPERATIONS

Accounting policy

The Group derives revenues primarily from IT services comprising software development and related services, cloud and infrastructure 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 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. 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 the 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 incomplete 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.

Certain cloud and infrastructure services contracts include multiple elements which may be subject to other specific accounting guidance, such as leasing guidance. These contracts are accounted in accordance with such specific accounting guidance. In such arrangements where the Group is able to determine that hardware and services are distinct performance obligations, it allocates the consideration to these performance obligations on a relative standalone selling price basis. In the absence of standalone selling price, the Group uses the expected cost-plus margin approach in estimating the standalone selling price. When such arrangements are considered as a single performance obligation, revenue is recognized over the period and measure of progress is determined based on promise in the contract.

Revenue from licenses where the customer obtains a “right to use” the licenses is recognized at the time the license are 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.

Certain eligible, nonrecurring costs (e.g. set-up or transition or transformation costs) that do not represent a separate performance obligation are recognized as an asset when such costs (a) relate directly to the contract; (b) generate or enhance resources of the Group that will be used in satisfying the performance obligation in the future; and (c) are expected to be recovered.

Capitalized contract costs relating to upfront payments to customers are amortized to revenue and other capitalized costs are amortized to expenses over the respective contract life on a systematic basis consistent with the transfer of goods or services to customer to which the asset relates. Capitalized costs are monitored regularly for impairment. Impairment losses are recorded when present value of projected remaining operating cash flows is not sufficient to recover the carrying amount of the capitalized costs.

The Group presents revenues net of indirect taxes in its Consolidated Statement of Profit and Loss.

Revenue from operation for the three months ended June 30, 2023 and June 30, 2022 are as follows:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Revenue from software services	35,735	32,278
Revenue from products and platforms	2,198	2,192
Total revenue from operations	37,933	34,470

Products & platforms

The Group also derives revenues from the sale of products and platforms including Finacle – core banking solution, Edge Suite of products, Panaya platform, Infosys Equinox, Infosys Helix, Infosys Applied AI, Infosys Cortex, Stater digital platform and Infosys McCamish – insurance platform.

Disaggregated revenue information

Revenue disaggregation by business segments has been included in segment information (Refer to Note 2.24). The table below presents disaggregated revenues from contracts with customers by geography and contract type. The Group believes that 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.

For the three months ended June 30, 2023 and June 30, 2022:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Revenues by Geography*
North America	23,084	21,301
Europe	10,148	8,647
India	1,020	881
Rest of the world	3,681	3,641
Total	37,933	34,470

^* Geographical revenue is based on the domicile of customer

The percentage of revenue from fixed-price contracts for each of the quarter ended June 30, 2023 and June 30, 2022 is 52%.

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.

2.18 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 foreign currency 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, EdgeVerve, Skava and controlled trusts is the Indian rupee. The functional currencies for foreign 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 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 ended June 30, 2023 and June 30, 2022 is as follows:

(In crore)

Particulars	Three months ended June 30,
	2023	2022
Interest income on financial assets carried at amortized cost
Tax free bonds and Government bonds	34	37
Deposit with Bank and others	240	202
Interest income on financial assets carried at fair value through other comprehensive income
Non-convertible debentures, commercial paper, certificates of deposit and government securities	243	240
Income on investments carried at fair value through profit or loss
Gain / (loss) on liquid mutual funds and other investments	52	8
Income on investments carried at fair value through other comprehensive income	–	1
Exchange gains / (losses) on forward and options contracts	134	(290)
Exchange gains / (losses) on translation of other assets and liabilities	(137)	417
Miscellaneous income, net	(5)	61
Total other income	561	676

2.19 EXPENSES

Accounting policy

Gratuity and Pensions

The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees majorly 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. The Company contributes Gratuity 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 operates defined benefit pension plan in certain overseas jurisdictions, in accordance with the local laws. These plans are managed by third party fund managers. The plans provide for periodic payouts after retirement and/or for a lumpsum payment as set out in rules of each fund and includes death and disability benefits. The defined benefit plans require contributions which are based on a percentage of salary that varies depending on the age of the respective employees.

Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk and market risk.

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 net profit 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.

(In crore) 

Particulars	Three months ended June 30,
	2023	2022
Employee benefit expenses
Salaries including bonus	19,985	17,589
Contribution to provident and other funds	560	497
Share based payments to employees (Refer to Note 2.12)	146	132
Staff welfare	90	119
	20,781	18,337
Cost of software packages and others
For own use	489	444
Third party items bought for service delivery to clients	2,231	1,976
	2,720	2,420
Other expenses
Repairs and maintenance	324	286
Power and fuel	50	39
Brand and marketing	265	224
Short-term leases	21	18
Rates and taxes	94	74
Consumables	44	42
Insurance	53	42
Provision for post-sales client support and others	50	12
Commission to non-whole time directors	3	4
Impairment loss recognized / (reversed) under expected credit loss model	91	44
Contributions towards Corporate Social Responsibility	70	60
Others	189	93
	1,254	938

2.20 Leases 

Accounting Policy    

The Group as a lessee     

The Group’s lease asset classes consist of leases for land, buildings and computers. 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.

As a lessee, the Group determines 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 Group 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 Group’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.

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 June 30, 2023:

(In crore) 

Particulars	Category of ROU asset
	Land	Buildings	Vehicles	Computers	Total
Balance as of April 1, 2023	623	3,896	15	2,348	6,882
Additions*	–	244	2	557	803
Deletions	–	(8)	–	(233)	(241)
Depreciation	(2)	(184)	(2)	(192)	(380)
Translation difference	(4)	(1)	–	(10)	(15)
Balance as of June 30, 2023	617	3,947	15	2,470	7,049

^* Net of adjustments on account of modifications and lease incentives

Following are the changes in the carrying value of right-of-use assets for the three months ended June 30, 2022:

(In crore) 

Particulars	Category of ROU asset
	Land	Buildings	Vehicles	Computers	Total
Balance as of April 1, 2022	628	3,711	16	468	4,823
Additions*	–	419	1	352	772
Deletions	–	(1)	–	(76)	(77)
Depreciation	(1)	(162)	(3)	(59)	(225)
Translation difference	(1)	(10)	–	1	(10)
Balance as of June 30, 2022	626	3,957	14	686	5,283

^* Net of adjustments on account of modifications and lease incentives

The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense in the interim condensed Consolidated Statement of Profit and Loss.

The following is the break-up of current and non-current lease liabilities as at June 30, 2023 and March 31, 2023:

(In crore) 

Particulars	As at
	June 30, 2023	March 31, 2023
Current lease liabilities	1,824	1,242
Non-current lease liabilities	6,659	7,057
Total	8,483	8,299

2.21 BASIC AND DILUTED SHARES USED IN COMPUTING EARNINGS PER EQUITY SHARE

Accounting policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group 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 Group 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.

2.22 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
	June 30, 2023	March 31, 2023
Contingent liabilities :
Claims against the Group, not acknowledged as debts(1)	4,794	4,762
[Amount paid to statutory authorities 6,508 crore (6,539 crore)]
Commitments :
Estimated amount of contracts remaining to be executed on capital contracts and not provided for (net of advances and deposits)(2)	861	959
Other commitments*	88	92

* Uncalled capital pertaining to investments

⁽¹⁾ As at June 30, 2023 and March 31, 2023, claims against the Group not acknowledged as debts in respect of income tax matters amounted to 4,066 crore and 4,062 crore, respectively. The claims against the Group primarily 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 Income Tax 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 tax claims amounted to 6,498 crore and 6,528 crore as at June 30, 2023 and March 31, 2023, respectively.

⁽²⁾ Capital contracts primarily comprises of commitments for infrastructure facilities and computer equipments.

Legal Proceedings

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.

2.23 RELATED PARTY TRANSACTIONS

Refer to the Company's Annual Report for the year ended March 31, 2023 for the full names and other details of the Company's subsidiaries and controlled trusts.

Changes in Subsidiaries

During the three months ended June 30, 2023, there are no changes in the subsidiaries.

Changes in key management personnel

The following are the changes in the key management personnel:

Independent directors:

- Helene Auriol Potier (appointed as independent director effective May 26, 2023)

Executive Officers:

- Mohit Joshi (resigned as President effective March 11, 2023 and was on leave till June 9, 2023 which was his last date with the company)

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 June 30,
	2023	2022
Salaries and other short term employee benefits to whole-time directors and executive officers (1)(2)	32	32
Commission and other benefits to non-executive/independent directors	4	4
Total	36	36

(1) Total employee stock compensation expense for the three months ended June 30, 2023 and June 30, 2022 includes a charge of 20 crore and 17 crore, respectively, towards key management personnel (Refer to Note 2.12).

(2) Does not include post-employment benefits and other long-term benefits based on actuarial valuation as these are done for the Company as a whole.

2.24 SEGMENT REPORTING

Ind AS 108, Operating segments, 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 (CODM) 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 2.17 Revenue from operations.

Business Segments

Three months ended June 30, 2023 and June 30, 2022:

(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	10,661	5,513	4,441	4,889	5,350	3,056	2,749	1,274	37,933
	10,562	5,004	4,464	4,259	4,172	2,812	2,257	940	34,470
Identifiable operating expenses	6,147	2,869	2,640	2,690	3,523	1,743	1,593	819	22,024
	5,856	2,524	2,867	2,276	2,973	1,675	1,334	662	20,167
Allocated expenses	1,969	1,015	817	909	855	511	454	315	6,845
	1,952	942	803	838	814	465	388	237	6,439
Segment operating income	2,545	1,629	984	1,290	972	802	702	140	9,064
	2,754	1,538	794	1,145	385	672	535	41	7,864
Unallocable expenses									1,173
									950
Other income, net (Refer to Note 2.18)									561
									676
Finance cost									90
									56
Profit before tax									8,362
									7,534
Income tax expense									2,417
									2,172
Net Profit									5,945
									5,362
Depreciation and amortization									1,173
									950
Non-cash expenses other than depreciation and amortization									–

⁽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 for the three months ended June 30, 2023 and June 30, 2022, respectively.

2.25 FUNCTION WISE CLASSIFICATION OF CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS

(In crore)

Particulars	Note No.	Three months ended June 30,
		2023	2022
Revenue from operations	2.16	37,933	34,470
Cost of Sales		26,382	24,369
Gross profit		11,551	10,101
Operating expenses
Selling and marketing expenses		1,783	1,493
General and administration expenses		1,877	1,694
Total operating expenses		3,660	3,187
Operating profit		7,891	6,914
Other income, net	2.17	561	676
Finance cost		90	56
Profit before tax		8,362	7,534
Tax expense:
Current tax	2.15	2,307	2,350
Deferred tax	2.15	110	(178)
Profit for the period		5,945	5,362
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability/asset, net		87	(86)
Equity instruments through other comprehensive income, net		1	3
		88	(83)
Items that will be reclassified subsequently to profit or loss
Fair value changes on derivatives designated as cash flow hedge, net		6	26
Exchange differences on translation of foreign operations, net		15	53
Fair value changes on investments, net		75	(372)
		96	(293)
Total other comprehensive income / (loss), net of tax		184	(376)
Total comprehensive income for the period		6,129	4,986
Profit attributable to:
Owners of the Company		5,945	5,360
Non-controlling interests		–	2
		5,945	5,362
Total comprehensive income attributable to:
Owners of the Company		6,132	4,986
Non-controlling interests		(3)	–
		6,129	4,986

for and on behalf of the Board of Directors of Infosys Limited

Nandan M. Nilekani Chairman	Salil Parekh Chief Executive Officer and Managing Director	Bobby Parikh Director
Nilanjan Roy Chief Financial Officer	Jayesh Sanghrajka Executive Vice President and Deputy Chief Financial Officer	A.G.S. Manikantha Company Secretary
Bengaluru July 20, 2023