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Moneycontrol.com India | Notes to Account > Computers - Software > Notes to Account from Infosys - BSE: 500209, NSE: INFY
BSE: 500209|NSE: INFY|ISIN: INE009A01021|SECTOR: Computers - Software
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Notes to Accounts Year End : Mar '13
1.  Company overview
 Infosys Limited (''Infosys'' or ''the Company''), along with its
 majority- owned and controlled subsidiary, Infosys BPO Limited
 (''Infosys BPO''), and wholly-owned and controlled subsidiaries,
 Infosys Technologies (Australia) Pty. Limited (''Infosys
 Australia''), Infosys Technologies (China) Co. Limited (''Infosys
 China''), Infosys Consulting India Limited (''Infosys Consulting
 India''), Infosys Technologies S. de R. L. de C. V. (''Infosys
 Mexico''), Infosys Technologies (Sweden) AB. (''Infosys Sweden''),
 Infosys Tecnologia do Brasil Ltda (''Infosys Brasil''), Infosys
 Public Services Inc., U.S. (''Infosys Public Services''), Infosys
 Technologies (Shanghai) Co. Limited (''Infosys Shanghai'') and
 Lodestone Holding AG and its controlled subsidiaries (''Infosys
 Lodestone''), is a leading global technology services corporation. The
 Company provides business consulting, technology, engineering and
 outsourcing services to help clients build tomorrow''s enterprise.  In
 addition, the Company offers software products for the banking
 The abridged financial statements have been prepared pursuant to Rule
 7A of the Companies (Central Government''s) General Rules and Forms,
 1956 and are based on the annual accounts for the year ended March 31,
 (Note 1 in the Notes to accounts of the annual standalone financial
 2.  Notes on accounts
 Amounts in the abridged financial statements are presented in Rs.
 crore, except for per share data and as otherwise stated. Certain
 amounts that are required to be disclosed and do not appear due to
 rounding off are detailed in note 13. All exact amounts are stated with
 the suffix ''/-''. One crore equals 10 million.
 The previous year''s figures have been regrouped / re-classified,
 wherever necessary to conform to the current presentation.
 (Note 2 in the Notes to accounts of the annual standalone financial
 3.  Dividend
 The Board, in its meeting on October 12, 2012, declared an interim
 dividend of Rs. 15 per equity share. Further the Board, in its meeting
 on April 12, 2013, proposed a final dividend of Rs. 27 per equity
 share.  The proposal is subject to the approval of shareholders at the
 Annual General Meeting to be held on June 15, 2013. The total dividend
 appropriation for the year ended March 31, 2013 amounted to Rs. 2,815
 crore including corporate dividend tax of Rs. 403 crore.
 During the year ended March 31, 2012, the amount of per share dividend
 recognized as distributions to equity shareholders was Rs. 47.  The
 dividend for the year ended March 31, 2012 includes Rs. 22 per share of
 final dividend, Rs. 15 per share of interim dividend and Rs. 10 per
 share of special dividend - 10 years of Infosys BPO operations.  The
 total dividend appropriation amounted to Rs. 3,137 crore including
 corporate dividend tax of Rs.438 crore.
 (Note 2.1 in the Notes to accounts of the annual standalone financial
 4.  Investment in Lodestone Holding AG
 On October 22, 2012, Infosys acquired 100% of the outstanding share
 capital of Lodestone Holding AG, a global management consultancy firm
 headquartered in Zurich, Switzerland. The acquisition was executed
 through a share purchase agreement for an upfront cash consideration of
 Rs. 1,187 crore and a deferred consideration of Rs. 608 crore.
 The deferred consideration is payable to the selling shareholders of
 Lodestone on the third anniversary of the acquisition date and is
 contingent upon their continued employment for a period of three years.
 The investment in Lodestone has been recorded at the acquisition cost
 and the deferred consideration is being recognized on a proportionate
 basis over a period of three years from the date of acquisition. An
 amount of Rs. 50 crore and Rs. 85 crore,representing the proportionate
 charge of the deferred consideration has been recognized as an expense
 during the quarter ended March 31, 2013 and year ended March 31, 2013.
 (Note 2.10.1 in the Notes to accounts of the annual standalone
 financial statements).
 Infosys guarantees the performance of certain contracts entered into by
 its subsidiaries.
 List of key management personnel Whole-time Directors
 S. Gopalakrishnan, S. D. Shibulal, Srinath Batni, V. Balakrishnan,
 Ashok Vemuri, B. G. Srinivas.
 Executive Council members
 U. B. Pravin Rao, U. Ramadas Kamath, Chandrashekar Kakal, Nandita
 Gurjar, Stephen R. Pratt, Basab Pradhan, Prasad Thrikutam, Rajiv Bansal
 (effective November 1, 2012).
 Non-whole-time Directors
 K. V. Kamath, Deepak M. Satwalekar, Dr. Omkar Goswami, David L. Boyles,
 Sridar A. Iyengar (retired with effect from August 13, 2012), Prof.
 Jeffrey S. Lehman, R. Seshasayee, Ann M. Fudge, Ravi Venkatesan.
 During the year ended March 31, 2013, an amount of Rs. 10 crore (Rs. 20
 crore for the year ended March 31, 2012) was donated to Infosys
 Foundation, a not-for-profit foundation, in which certain Directors of
 the Company are trustees.
 5.  Segment reporting
 The Company''s operations predominantly relate to providing end-to-end
 business solutions thereby enabling clients to enhance business
 performance, delivered to customers globally operating in various
 industry segments. Effective quarter ended June 30, 2011, the Company
 reorganized its business to increase its client focus.  Consequent to
 the internal reorganization there were changes effected in the
 reportable segments based on the ''management approach'', as laid
 down in AS 17, Segment reporting. The Chief Executive Officer evaluates
 the Company''s performance and allocates resources based on an analysis
 of various performance indicators by industry classes and geographic
 segmentation of customers. Accordingly, segment information has been
 presented both along industry classes and geographic segmentation of
 customers, industry being the primary segment. 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 significant accounting policies.
 Industry segments for the Group are primarily Financial Services and
 Insurance (FSI) comprising enterprises providing banking, finance and
 insurance services, enterprises in Manufacturing (MFG), enterprises in
 the Energy, Utilities, Communications and Services (ECS) and
 enterprises in Retail, Consumer Packaged Goods, Logistics and Life
 Sciences (RCL). Geographic segmentation is based on business sourced
 from that geographic region and delivered from both onsite and
 offshore. North America comprises the U.S., Canada and Mexico, Europe
 includes continental Europe (both the east and the west), Ireland and
 the U.K., and the Rest of the World comprising all other places except
 those mentioned above and India. Consequent to the above change in the
 composition of reportable segments, the prior year comparatives have
 been restated.
 Revenue and identifiable operating expenses in relation to segments are
 categorized based on items that are individually identifiable to that
 segment. Allocated expenses of segments include expenses incurred for
 rendering services from the Company''s offshore software development
 centers and onsite expenses, which are categorized in relation to the
 associated turnover of the segment. Certain expenses such as
 depreciation, which form a significant component of total expenses, are
 not specifically allocable to specific segments as the underlying
 assets are used interchangeably. The Management believes that it is not
 practical to provide segment disclosures relating to those costs and
 expenses, and accordingly these expenses are separately disclosed as
 ''unallocated'' and adjusted against the total income of the Company
 Fixed assets used in the Company''s business or liabilities contracted
 have not been identified to any of the reportable segments, as the
 fixed assets and services are used interchangeably between segments.
 Accordingly, no disclosure relating to total segment assets and
 liabilities are made. Geographical information on revenue and industry
 revenue information are collated based on individual customers invoiced
 or in relation to which the revenue is otherwise recognized.
 (Note 2.27 in the Notes to accounts of the annual standalone financial
 6.  Exceptional item
 During the years ended March 31, 2013 and March 31, 2012, the Company
 received dividend of Rs. 83 crore and Rs. 578 crore (presented net of
 taxes in the previous year) respectively from its wholly-owned
 subsidiary Infosys Australia. The tax on dividend received for the
 years ended March 31, 2013 and March 31, 2012 was Rs. 14 crore and Rs.
 94 crore, respectively
 (Note 2.36 in the Notes to accounts of the annual standalone financial
 7.  Litigation
 On May 23, 2011, we received a subpoena from a grand jury in the U.S.
 District Court for the Eastern District of Texas. The subpoena requires
 that we provide to the grand jury certain documents and records related
 to our sponsorships for, and uses of, B1 business visas. We are
 complying with the subpoena. In connection with the subpoena, during a
 meeting with the U.S. Attorney''s Office for the Eastern District of
 Texas, we were advised that we and certain of our employees are targets
 of the investigation. We are engaged in discussions with the U.S.
 Attorney''s Office regarding this matter, however, we cannot predict the
 outcome of such discussions.
 In addition, the U.S. Department of Homeland Security (DHS) has
 reviewed our employer eligibility verifications on Form I-9 with
 respect to our employees working in the U.S. In connection with this
 review, we have been advised that the DHS has found errors in a
 significant percentage of our Forms I-9 that the Department has
 reviewed, and may impose fines and penalties on us related to such
 alleged errors. At this time, we cannot predict the outcome of the
 discussions with the DHS or other governmental authority regarding the
 review of our Forms I-9.
 In light of the fact that, among other things, the foregoing
 investigation and review may not be complete and we remain in
 discussions with the U.S. Attorney''s Office regarding these matters, we
 are unable to make an estimate of the amount or range of loss that we
 expect to incur in connection with the resolution of these matters.
 Further, in the event that any governmental authority undertakes any
 actions that limit any visa program that we utilize or imposes
 sanctions, fines or penalties on us or our employees, this could
 materially and adversely affect our business, results of operations,
 and financial condition.
 (Note 2.34 in the Notes to accounts of the annual standalone financial
Source : Dion Global Solutions Limited
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