Infosys Technologies

 
 
 
 
 
 
 
  
 
 
  
 
 
1.    Notes on accounts
 
Amounts in the financial statements are presented in Rupees crore, except for per share data and as
otherwise stated. Certain amounts do not appear due to rounding off, and are detailed in note 23.3. All exact
amounts are stated with the suffix “/-”. One crore equals 10 million.
 
The previous period / year figures have been regrouped / reclassified, wherever necessary to conform to
the current presentation.
 
2.  Quantitative details
 
The Company is primarily engaged in the development and maintenance of computer software. The production
and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the
quantitative details of sales and certain information as required under paragraphs 3, 4C and 4D of part II of
Schedule VI to the Companies Act, 1956.
 
3.. Dues to micro and small enterprises
 
The Company has no dues to micro and small enterprises during the year ended March 31, 2009 and March 31,
2008 and as at March 31, 2009 and March 31, 2008.
 
4.  Stock option plans
 
The Company has two Stock Option Plans that are currently operational.
 
5. Income taxes
 
The provision for taxation includes tax liabilities in India on the Companys global income as reduced by
exempt incomes and any tax liabilities arising overseas on income sourced from those countries. Most of
Infosys operations are conducted through Software Technology Parks (STPs). Income from STPs are tax exempt
for the earlier of 10 years commencing from the fiscal year in which the unit commences software development,
or March 31, 2010.
 
Infosys also has operations in Special Economic Zones (SEZs). Income from SEZs is fully tax exempt for
the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling
certain conditions. Pursuant to the changes in the Indian Income Tax Act, the Company has calculated its tax
liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carried forward and set off
against the future tax liabilities. Accordingly, a sum of Rs. 262 crore and Rs. 169 crore was carried forward
and shown under Loans and Advances in the Balance Sheet as at March 31, 2009 and March 31, 2008
respectively.
 
The tax provision for the year ended March 31, 2009 includes a net reversal of Rs. 108 crore pertaining
to earlier periods, comprising Rs. 323 crore for provisions no longer required which is offset by a charge of
Rs. 215 crore due to re-assessment of uncertain tax positions. The tax provision for the year ended March 31,
2008 includes a reversal of Rs. 121 crore relating to liabilities no longer required.
 
6. Segment reporting
 
The Companys operations predominantly relate to provide end-to-end business solutions that leverage
technology, thereby enabling clients to enhance business performance delivered to customers globally
operating in various industry segments. Accordingly, revenues represented along industry classes comprise the
primary basis of segmental information set out in these financial statements. Secondary segmental reporting is
performed on the basis of the geographical location of customers.
 
The accounting principles consistently used in the preparation of the financial statements are also
consistently applied to record income and expenditure in individual segments. These are as set out in the
significant accounting policies.
 
Industry segments at the Company are primarily financial services comprising customers providing banking,
finance and insurance services; manufacturing companies; companies in the telecommunications and the retail
industries; and others such as utilities, transportation and logistics companies.
 
Income and direct expenses in relation to segments are categorized based on items that are individually
identifiable to that segment, while the remainder of the costs 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 services are used
interchangeably. The Company 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
directly charged against total income.
 
Fixed assets used in the Companys 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.
 
Customer relationships are driven based on the location of the respective client. North America comprises
the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the
west), Ireland and the United Kingdom; and the rest of the world comprising all other places except, those
mentioned above and India.
 
Geographical revenues are segregated based on the location of the customer who is invoiced or in relation
to which the revenue is otherwise recognized.
 
7. Provision for doubtful debts
 
Periodically, the Company evaluates all customer dues to the Company for collectability. The need for
provisions is assessed based on various factors including collectability of specific dues, risk perceptions
of the industry in which the customer operates, general economic factors, which could affect the customers
ability to settle. The Company normally provides for debtor dues outstanding for 180 days or longer as at the
Balance Sheet date. As at March 31, 2009 the Company has provided for doubtful debts of Rs. 66 crore (Rs. 20
crore as at March 31, 2008) on dues from certain customers although the outstanding amounts were less than
180 days old, since the amounts were considered doubtful of recovery. The Company pursues the recovery of the
dues, in part or full.
 
Investment details of plan assets
 
100% of the plan assets are invested in debt instruments. The estimate of future salary increases,
considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant
factors such as supply and demand factors in the employment market.
 
Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan,
and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations
under the gratuity plan reduced by Rs. 37 crore, which is being amortized on a straight line basis to the net
Profit and Loss account over 10 years representing the average future service period of the employees. The
unamortized liability as at March 31, 2009 and March 31, 2008 amounted to Rs. 29 crore and Rs. 33 crore
respectively and disclosed under Current Liabilities.
 
The Company expects to contribute approximately Rs. 40 crore to the gratuity trust during fiscal
2010.
 
8.a Provident Fund
 
The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board
(ASB) states that benefits involving employer established provident funds, which require interest shortfalls
to be recompensed are to be considered as defined benefit plans. Pending the issuance of the guidance note
from the Actuarial Society of India, the Companys actuary has expressed an inability to reliably measure
provident fund liabilities. Accordingly, the Company is unable to exhibit the related information.
 
The Company contributed Rs. 137 crore and Rs. 110 crore during the year ended March 31, 2009 and 2008
respectively.
 
8.b Superannuation
 
The Company contributed Rs. 52 crore and Rs. 42 crore during the year ended March 31, 2009 and 2008
respectively.
 
9. Miscellaneous income
 
Miscellaneous income of Rs. 36 crore during the year ended March 31, 2009 includes a net amount of Rs. 18
crore consisting of Rs. 33 crore received from Axon Group Plc. towards the inducement fee offset by Rs. 15
crore towards expenses incurred in relation to this transaction.
 
10. Cash Flow statement 11.a Unclaimed dividend
 
The balance of cash and cash equivalents includes Rs. 2 crore as at March 31, 2009 (Rs. 2 crore as at
March 31, 2008) set aside for payment of dividends.
 
11.b Restricted cash
 
Deposits with financial institutions and body corporate as at March 31, 2009 include an amount of Rs. 253
crore (Rs. 161 crore as at March 31, 2008) deposited with Life Insurance Corporation of India to settle
employee benefit obligations as and when they arise during the normal course of business. This amount is
considered as restricted cash and is hence not considered “cash and cash equivalents”.