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Infosys
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Explore Infosys connections « Mar 10
Notes to Accounts Year End : Mar '11
Amounts in the abridged financial statements are presented in Indian
 rupees 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 11. All exact amounts are stated
 with the suffix /-. One crore equals 10 million.
 
 The previous year figures have been regrouped / reclassified, wherever
 necessary to conform to the current presentation.
 
 (Note 23.2 in the Notes to Accounts of the annual standalone financial
 statements).
 
 1.  Capital commitments and contingent liabilities
 
                                                      in Rs. crore
 
 Particulars                                    As at March 31,
                                            2011              2010
 
 Estimated amount of unexecuted 
 capital contracts
 (net of advances and deposits)             742               267
 
 Outstanding guarantees and counter 
 guarantees to various banks, in
 respect of the guarantees given by 
 those banks in favour of various
 government authorities and
 others                                       3                 3
 
 Claims against the Company, 
 not acknowledged as debts (1)
 
 [Net of amount paid to 
 statutory authorities Rs. 469
 crore (Rs. 241 crore) ]                    271               28
 
                                in      in Rs.    in       in Rs.
                            million     crore  million      crore 
 
 Forward contracts 
 outstanding
 
 In USD                        500      2,230     228       1,024
 
 In Euro                        20        127      16          97
 
 In GBP                         10         72       7          48
 
 In AUD                         10         46       3          12 
 
 Options contracts outstanding
 
 In USD                          –          –     200         898
 
                                        2,475               2,079
 
 (1) Claims against the Company not acknowledged as debts include demand
 from the Indian tax authorities for payment of additional tax of Rs.
 671 crore (Rs. 214 crore),
 
 including interest of Rs. 177 crore (Rs. 39 crore) upon completion of
 their tax review for fiscal 2005, fiscal 2006 and fiscal 2007. The tax
 demands are mainly on account of disallowance of a portion of the
 deduction claimed by the Company under Section 10A of the Income tax
 Act. The deductible amount is determined by the ratio of export
 turnover to total turnover. The disallowance arose from certain
 expenses incurred in foreign currency being reduced from export
 turnover but not reduced from total turnover. The tax demand for fiscal
 2007 also includes disallowance of portion of profit earned outside
 India from the STP units and disallowance of profits earned from SEZ
 units. The matter for fiscal 2005, 2006 and 2007 is pending before the
 Commissioner of Income tax (Appeals), Bangalore.
 
 The Company is contesting the demands and the Management, including its
 tax advisors, believes that its position will likely be upheld in the
 appellate process. No tax expense has been accrued in the financial
 statements for the tax demand raised.  The Management believes that the
 ultimate outcome of this proceeding will not have a material adverse
 effect on the Companys financial position and results of operations.
 (Note 23.2.2 in the Notes of Accounts of the annual standalone
 financial statements)
 
 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.  (Note 23.2.3 in the Notes to Accounts of the annual standalone
 financial statements)
 
 5.  Related party transactions
 
 List of related parties
 
 (1) During the year ended March 31, 2011, the Company made an
 additional investment of Rs. 42 crore (US$ 9 million) in Infosys China,
 which is a wholly owned subsidiary.  As of March 31, 2011, and March
 31, 2010, the Company has invested an aggregate of Rs. 107 crore (US$
 23 million) and Rs. 65 crore (US$ 14 million) respectively, in the
 subsidiary.
 
 (2) During the year ended March 31, 2011, the Company made an
 additional investment of Rs. 14 crore (Mexican Peso 40 million) in
 Infosys Mexico, which is a wholly owned subsidiary. As of March 31,
 2011, and March 31, 2010, the Company has invested an aggregate of Rs.
 54 crore (Mexican Peso 150 million) and Rs. 40 crore (Mexican Peso 110
 million) respectively, in the subsidiary.
 
 (3) On February 21, 2011, the Company incorporated a wholly-owned
 subsidiary, Infosys Technologies (Shanghai) Company Limited and
 invested Rs. 11 crore (US$ 3 million) in the subsidiary. As of March
 31, 2011, the Company has invested an aggregate of Rs. 11 crore (US$ 3
 million) in the subsidiary.
 
 (4) During the year ended March 31, 2011, the Company made an
 additional investment of Rs. 10 crore (BRL 4 million) in the
 subsidiary. As of March 31, 2011, and March 31, 2010, the Company has
 invested an aggregate of Rs. 38 crore (BRL 15 million) and Rs. 28 crore
 (BRL 11 million) respectively, in the subsidiary
 
 (5) Infosys BPO s.r.o, Infosys BPO (Poland) Sp.Z.o.o, Infosys BPO
 (Thailand) Limited and McCamish Systems LLC are wholly owned
 subsidiaries of Infosys BPO. During the year ended March 31, 2011,
 Infosys BPO (Thailand) Limited was liquidated.
 
 (6) During the year ended March 31, 2010, Infosys Consulting
 incorporated wholly-owned subsidiary, Infosys Consulting India Limited.
 As of March 31, 2011, and March 31, 2010, Infosys Consulting has
 invested an aggregate of Rs. 1 crore in the subsidiary.
 
 (3) During the year ended March 31, 2010, Infosys BPO acquired 100% of
 the voting interests in McCamish Systems LLC (McCamish), a business
 process solutions provider based in Atlanta, Georgia, in the United
 States. The business acquisition was conducted by entering into
 Membership Interest Purchase Agreement for a cash consideration of
 Rs. 173 crore and a contingent consideration of Rs. 67 crore. The
 acquisition was accounted as a business combination which resulted in
 goodwill of Rs. 227 crore.
 
 Infosys guarantees the performance of certain contracts entered into by
 its subsidiaries.
 
 During the year ended March 31, 2011, an amount of nil (Rs. 34 crore
 for the year ended March 31, 2010) was donated to Infosys Foundation, a
 not-for-profit foundation, in which certain directors of the Company
 are trustees.
 
 During the year ended March 31, 2011, an amount of Rs. 12 crore (Rs. 23
 crore for the year ended March 31, 2010) has been granted to Infosys
 Science Foundation, a not-for-profit foundation, in which certain
 directors and officers of the Company are trustees.
 
 (Note 23.2.7 in the Notes to Accounts of the annual standalone
 financial statements)
 
 4. Transactions with key management personnel
 
 Key management personnel comprise directors and members of the
 executive council.
 
 Particulars of remuneration and other benefits paid to key management
 personnel during the year ended March 31, 2011 and March 31, 2010 have
 been detailed in Schedule 12.
 
 (1) The Company depreciates fixed assets based on estimated useful
 lives that are lower than those prescribed in Schedule XIV of the
 Companies Act, 1956. Accordingly, the rates of depreciation used by the
 Company are higher than the minimum prescribed by Schedule XIV.
 
 During the year ended March 31, 2011 and March 31, 2010, Infosys BPO
 has provided for commission of Rs. 0.12 crore and Rs. 0.12 crore to a
 non-whole-time director of Infosys.
 
 (Note 23.2.8 in the Notes to Accounts of the annual standalone
 financial statements).
 
 5.  Dues to micro, small and medium enterprises
 
 The Company has no dues to micro and small enterprises during the year
 ended March 31, 2011 and March 31, 2010 and as at March 31, 2011 and
 March 31, 2010.  (Note 23.2.24 in the Notes to Accounts of the annual
 standalone financial statements)
 
 6.  Aggregate fair value of unquoted investments
 
 As at March 31, 2011 and March 31, 2010, the aggregate fair value of
 unquoted investments is Rs. 119 crore and Rs. 3,497.
 
 (Note 23.2.15 in the Notes to Accounts of the annual standalone
 financial statements)
 
 7.  Transactions with key management personnel
 
 Key management personnel comprises of directors and members of the
 executive council.
 
Source : Dion Global Solutions Limited
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