1. Background
 
 Patni Computer Systems Limited (Patni or the Company) was
 incorporated on 10 February 1978 under the Companies Act, 1956. On 18
 September 2003, the Company converted itself from a private limited
 company into a public limited company. In February 2004, Patni
 completed initial public offering of its equity shares in India
 comprising fresh issue of 13,415,200 shares and sale of 5,324,000
 equity shares by the existing shareholders.
 
 In December 2005, Patni issued 5,125,000 American Depository Shares
 (ADSs) at a price of US$ 20.34 per ADS. There was a secondary
 offering of additional 1,750,000 ADSs to the existing shareholders.
 Patni also issued 1,031,250 ADSs at the price of US$ 20.34 per ADS on
 the exercise of Greenshoe option by the underwriters. Each ADS
 represented two equity shares of Rs. 2 each fully paid-up.
 
 Patni owns 100 % equity interest in Patni Americas, Inc.  (formerly
 Patni Computer Systems, Inc.), a company incorporated in USA, Patni
 Computer Systems (UK) Limited (Patni UK), a company incorporated in UK,
 Patni Computer Systems GmbH, a company incorporated in Germany. In
 April 2003, Patni Americas, Inc., USA acquired 100 % equity interest in
 The Reference Inc, a company incorporated in USA. In November 2004,
 Patni Americas, Inc. acquired 100 % equity in Patni Telecom Solutions
 Inc - USA and its subsidiaries. In July 2007, Patni Americas, Inc.
 acquired Patni Life Sciences Inc., (formerly known as Taratec
 Development Corporation), a company incorporated in New Jersey, U.S.A,
 for consideration in cash. Effective 1 October 2010, Patni Life
 Sciences Inc. has been merged with Patni Americas, Inc., USA. In June
 2010, Patni Americas Inc. acquired CHCS Services Inc.,a company
 incorporated in Florida, U.S.A, for consideration in cash. In July
 2010, CHCS Services Inc., opened a branch office in Noida. Patni
 Computer Systems Brasil Ltda., a company incorporated in Brazil has
 been dissolved in October 2010.
 
 In July 2007, Patni UK acquired business and assets of Logan Orviss
 International (LOI), a European telecommunications consulting
 services company in a business combination. In March 2008, Patni UK has
 set up a subsidiary in Czech Republic named Patni Computer Systems
 (Czech) s.r.o. In December 2008, the company has set up a subsidiary in
 Mexico named PCS Computer Systems Mexico, SA de CV. Patni also operates
 through foreign branch offices in USA, Japan, Sweden, Korea,
 Netherlands, Australia, Finland, Turkey, Ireland, Romania and
 Switzerland. In June 2009, the company has set up a 100% subsidiary in
 Singapore named Patni (Singapore) Pte Limited. In April 2010, Patni
 (Singapore) Pte Limited opened a foreign branch office in Malaysia. In
 June 2010, Patni (Singapore) Pte Limited has set up a 100% subsidiary
 in Japan named Patni Computer Systems Japan Inc. In June 2010, Patni
 Computer Systems Japan Inc. has entered into Joint Venture Agreement
 (49% stake) with J R Kyushu System Solutions Inc. The Joint Venture
 Company J R Kyushu Patni Systems Inc. has been incorporated on 1st July
 2010. In August 2010 Patni UK opened a branch office in Ireland. In
 August 2010 Patni (Singapore) Pte Limited has set up a 100% subsidiary
 in China named Patni Computer Systems (Suzhou) Co., Ltd. In November
 2010 Patni (Singapore) Pte Limited has set up a 100% subsidiary in
 China named Patni Computer Systems Software (Dalian) Limited.
 
 Patni together with its subsidiaries (collectively, Patni Group or
 the Company) is engaged in IT consulting, software development and
 Business Process Outsourcing (BPO). The Company provides multiple
 service offerings to its clients across various industries comprising
 financial services, insurance services, manufacturing, retail and
 distribution, communications, media and utilities and technology
 services (comprising independent software vendors and product
 engineering). The various service offerings comprise application
 development, application maintenance and support, packaged software
 implementation, infrastructure management services, product engineering
 services, quality assurance services and BPO services.
 
 3 Share capital
 
 1) Of the above, 14,500,000 equity shares of Rs. 2 each were allotted
 as fully paid bonus shares in March 1995 by capitalisation of general
 reserve aggregating Rs. 29,000.
 
 2) In June 2001, Patnis Board of Directors approved a sub division of
 existing equity shares of Rs. 10 each into 5 equity shares of Rs. 2
 each.
 
 3) The above also includes 46,867,500 equity shares of Rs. 2 each
 allotted as fully paid bonus shares in August 2001 by capitalisation of
 share premium aggregating Rs. 93,735.
 
 4) In December 2002, in pursuance of section 77A of the Companies Act,
 1956, Patni bought back 1,650,679 equity shares by utilising the share
 premium account. In this regard, an amount equivalent to the nominal
 value of the share capital bought back by the Company aggregating Rs.
 3,301, has been transferred from general reserve to capital redemption
 reserve.
 
 5) In August 2003, the Company allotted 37,140,283 equity shares of Rs.
 2 each as fully paid bonus shares by capitalization of share premium
 aggregating Rs. 74,281.
 
 6) In February 2004, Patni made an initial public offering (IPO) of
 its equity shares in India comprising fresh issue of 13,415,200 shares
 and sale of 5,324,000 equity shares by
 
 the existing shareholders. In this regard, equity shares of Rs. 2 each
 were issued at a premium of Rs. 228 aggregating Rs. 3,085,496.
 
 7) In December 2005, Patni issued 6,156,250 American Depository Shares
 (ADSs) representing 12,312,500 equity shares of Rs. 2 each fully
 paid-up at a price of US$ 20.34 per ADS for a gross proceeds of Rs.
 5,739,262. Each ADS represents two equity shares of Rs. 2 each fully
 paid-up.
 
 8) In February 2008, the Board of Directors of the Company approved a
 proposal to repurchase fully paid equity shares upto 10% of the paid up
 capital and free reserves, at a maximum price of Rs. 325 per equity
 share, for an aggregate amount upto Rs. 2,370,000. The buyback proposal
 had been approved in accordance with the provisions of Section 77A,
 77AA, 77B and other applicable provisions of the Companies Act, 1956
 and the provisions of Securities and Exchange Board of India (Buy-back
 of Securities) Regulations, 1998 (Buy Back Regulations), for which
 necessary public announcements were made in April 2008.
 
 During the year ended 31 December 2008, the Company repurchased a total
 of 10,957,082 equity shares through the Bombay Stock Exchange and the
 National Stock Exchange for an aggregate consideration of Rs. 2,370,000
 being 100% of the amount authorised for buy back. Subsequently, the
 Company extinguished such equity shares as per the requirements of the
 section 77A of the Companies Act, 1956. In this regard an amount
 equivalent to the nominal value of the share capital bought back by the
 Company aggregating Rs. 21,914, has been transferred from general
 reserve to capital redemption reserve which can be utilized only for
 the purpose of issuing fully paid bonus shares of the Company. (Refer
 note 4)
 
 9) Refer note 24 for employee stock options exercised during the year.
 
 5.Secured Loans
 
 Nature of security
 
 Finance lease obligations are secured against the vehicles acquired on
 lease.
 
 8. Sundry debtors (Unsecured)
 
 Of the above, debts due from companies under the same management as
 defined under Section 370(1)(B) of the Companies Act, 1956 aggregate
 Rs. 1,402,894 (2009: Rs. 1,617,440). This consists of debts due from
 Patni Americas, Inc. aggregating Rs. 913,731 (2009: Rs. 1,186,336);
 Patni Computer Systems (UK) Limited aggregating Rs. 366,883 (2009:
 Rs.315,002), Patni Computer Systems Gmbh aggregating Rs. 55,439 (2009:
 Rs. 26,944), Patni Telecom Solutions Private Limited Rs. 5,205 (2009:
 Rs. 10,099), Patni Life Science, Inc. Rs. 37,045 (2009: Rs. 74,727),
 Patni Telecom Solutions Inc Rs. 214 (2009: Rs. 614), Patni Telecom
 Solutions (UK) Limited Rs. 294 (2009: Rs. 3,717), Patni (Singapore) PTE
 Limited Rs. 3,521 (2009: Rs. Nil), Patni Computer Systems (Czech) s.r.o
 Rs. 1,122 (2009: Rs. Nil), Patni Computer Systems (Suzhou) Rs. 72
 (2009: Rs. Nil), Patni Computer Systems Japan Inc Rs. 14,204 (2009: Rs.
 Nil), PCS Computer Systems, Mexico, SA Rs. 464 (2009: Rs.  Nil), CHCS
 Services Inc Rs. 4,699 (2009: Rs.  Nil).
 
 17. Taxes
 
 b) Provision for Income Tax has been computed on the basis of Minimum
 Alternate Tax (MAT) in accordance with Sec 115JB of the Income Tax
 Act,1961. Considering the future profitability and taxable positions in
 the subsequent years, the company has recognised MAT credit
 entitlement of Rs. 754,755 (2009 : Rs. 434,179) as an asset by
 crediting to the Profit & loss account an equivalent amount and
 included under Loans and Advances (Note 10) in accordance with the
 guidance note on Accounting for credit available in respect of Minimum
 Alternate Tax under Income Tax Act, 1961 issued by the Institute of
 Chartered Accountants of India.
 
 c) In 2009 the company received a favorable order from the Income Tax
 Appellate Tribunal allowing the set off of losses of 10A units against
 Business Income. Based on the same during 2009 the Company has reversed
 the relevant tax provisions amounting to Rs. 114,393 relating to the
 above issue for all years upto Assessment Year 2006-07.
 
 d) The Statute of limitation period for the March 2007 and March 2006
 tax return of the US Branch of the Company expired in December, 2010
 and December 2009 respectively i.e. on expiry of 3 years from the date
 of filing which was 15 December 2007 and 15 December 2006. Hence the
 company has reversed the provision for that year on account of taxes &
 interest. Accordingly the following amounts have been included in the
 Income Statement for the year ended 31 December 2010 and 2009:
 
 (i) Included in Other Income
 
 In 2009 the company received a favorable order from the Income Tax
 Appellate Tribunal allowing the set off of losses of 10A units against
 Business Income. Based on the same the Company has reversed the
 relevant tax provisions amounting to Rs. 114,393.
 
 19. Segmental information
 
 In accordance with paragraph 4 of Accounting standard 17 Segment
 Reporting the Company has presented segmental information only in the
 consolidated financial statements (refer note 20 of the consolidated
 financial statements) of the Company.
 
 20. Related party transactions
 
 a) Names of related parties and nature of relationship where control
 exists
 
 Sr. 
 No.  Category of related 
      parties                 Names
 
 1.   Subsidiaries         1) Patni Americas, Inc., USA
 
                           2) Patni Computer Systems (UK) Limited
 
                           3) Patni Computer Systems GmbH
 
                           4) Patni Telecom Solutions Inc., USA
 
                           5) Patni Telecom Solutions (UK) Limited., UK
 
                           6) Patni Telecom Solutions Private Limited
   
                           7) Patni Life Sciences Inc., USA7
 
                           8) Patni Computer Systems Brasil Ltda6.
 
                           9) Patni Computer Systems (Czech) s.r.o
 
                          10) PCS Computer Systems, Mexico, SA de CV
 
                          11) Patni (Singapore) Pte Limited
 
                          12) CHCS Services Inc., USA
  
                          13) Patni Computer Systems Japan Inc
 
                          14) Patni Computer Systems (Suzhou) Co., 
                              Limited
 
                          15) Patni Computer Systems Software 
                              (Dalian) Limited
 
 2. Joint Ventures         1) J R Kyushu Patni Systems Inc
 
 3. Entities over which 
 the promoters             1) PCS Technology Limited and its
 exercise significant         subsidiaries
 
 influence /               2) Ashoka Computer Systems Private 
                              Limited control 
 
 (Affiliates)              3) PCS Cullinet Private Limited
 
                           4) PCS Finance Private Limited
 
                           5) Ravi & Ashok Enterprises
 
                           6) iSolutions Inc.
 
 4. Key management 
 personnel                1) Mr Narendra K. Patni
 
                          2) Mr Ashok K. Patni
 
                          3) Mr Gajendra K. Patni
 
                          4) Mr William Grabe
 
                          5) Mr Arun Duggal
 
                          6) Mr Michael Cusumano
 
                          7) Mr Arun Maira1
 
                          8) Mr Pradip Shah
 
                          9) Mr Ramesh Venkateswaran
 
                         10) Mr Louis Theodoor van den Boog2
 
                         11) Mr Abhay Havaldar
 
                         12) Mr Jeya Kumar3
 
                         13) Mr Pradeep Baijal4
 
                         14) Mr Vimal Bhandari5
 
 5. Parties with 
 substantial interest     1) Members of Patni family and
                             their relatives
 
                          2) General Atlantic Mauritius 
                             Limited (GA)
 
 6.  Others               1) Ravindra Patni Family Trust
 
                          2) Anirudh Patni
 
                          3) Patni Computer System Limited 
                             Employee Gratuity Fund
 
 
 1.  Ceased to be director with effect from 22 July 2009
 
 2.  Ceased to be Executive director with effect from 20 February 2009
 and now Non executive director.
 
 3.  Appointed as Chief Executive Officer with effect from 20 February
 2009 and as Executive Director from 25 June 2009
 
 4.  Appointed as Director with effect from 25 June 2009
 
 5.  Appointed as Director with effect from 15 January 2010
 
 6.  Dissolved in October 2010
 
 7.  Merged with Patni Americas, Inc., USA in October 2010,
 
 23. Contingent liabilities and capital commitments
 
                                            2010             2009
 
 Estimated amount of contracts 
 remaining to be executed on 
 capital account and not provided 
 for                                   2,435,404        2,585,843
 
 Foreign currency forward contracts   14,930,616       14,883,003
 
 Foreign currency option contracts       223,500          465,200
 
 Bank guarantees                         173,054           76,994
 
 Tax contingency                       3,745,312        2,482,297
 
 Estimated amount of contracts remaining to be executed on capital
 account and not provided for includes cases wherein purchase orders
 have been released and work has either not commenced or has been
 partially completed.
 
 Foreign currency forward contracts and forward currency options
 represents the total notional value of such contracts outstanding as at
 the balance sheet date.
 
 In December 2008, the Company received a demand of approximately Rs.
 458,665 for the Assessment Year 2003-04 including an interest demand of
 Rs. 258,644 and another demand in January 2009 of approximately Rs.
 1,132,951 for the Assessment Year 2005-06 including an interest demand
 of approximately Rs. 422,516. These new demands concerns the same issue
 of disallowance of tax benefits under Section 10A of the Indian Income
 Tax Act, 1961(ACT) as per earlier assessments. Subsequently, in June
 2010, the Company has filed an extension for stay of demand. As per
 stay of demand order, till December 2010, the Company has paid sum of
 Rs. 66,000 for the Assessment Year 2003-04 and Rs. 239,072 for the
 Assessment Year 2005-06 as regards the matter under appeal. Management
 considers these demands as not tenable against the Company, and
 therefore no provision for this tax contingency has been established.
 
 The Tax department had earlier rejected the Companys claim under
 section 10A and raised a demand of Rs. 630,166 for Assessment Year
 2004- 05 and Rs. 261,703 for Assessment Year 2002-03 in December 2006
 and December 2007 respectively. However on appeal in 2008, the CIT
 (Appeal) had allowed the claim under section 10A of the Income Tax Act,
 1961. The Indian Income tax department has appealed against the CIT
 (Appeals) orders in respect of Assessment Year 2002-03 and 2004-05 in
 the tribunal. Management considers these demands as not tenable against
 the Company and, therefore, no provision for this tax contingency has
 been established.
 
 In November 2010, the Company has received demand order for Assessment
 Year 2006-07 for a sum of Rs. 1,261,827 including an interest demand of
 Rs. 441,653 disallowing tax benefits under Section 10A of the Act as
 per the earlier assessments, as well as making a Transfer Pricing
 Adjustment for the Companys BPO operations. The Company has filed the
 appeal before the Indian Income Tax Appellate Tribunal and also filed
 an appeal for the stay of demand with the tax department. Management
 considers these disallowances as not tenable against the Company, and
 therefore no provision for this tax contingency has been established.
 
 In December 2010, the Income tax department has issued draft assessment
 order for Assessment Year 2007-08 disallowing tax benefits under
 Section 10A of the Act as per the earlier assessments, as well as
 making a Transfer Pricing Adjustment for delayed recoveries from
 Associates Enterprises. The Company has filed the objections against
 the draft order before the Dispute Resolution Panel (DRP) newly set
 up under the Income Tax Act, 1961. Management considers these
 disallowances as not tenable against the Company, and therefore no
 provision for this tax contingency has been established.
 
 Certain other income tax related legal proceedings are pending against
 the Company. Potential liabilities, if any, have been adequately
 provided for, and the Company does not currently estimate any
 incremental liability in respect of these proceedings. Additionally,
 the Company is also involved in lawsuits and claims which arise in
 ordinary course of business. There are no such matters pending that the
 Company expects to be material in relation to its business.
 
 24. Employee stock compensation plans
 
 On 30 June 2003, Patni established the Patni ESOP 2003 plan (the
 plan). Under the plan, the Company is authorized to issue up to
 11,142,085 equity shares to eligible employees. Employees covered by
 the Plan are granted an option, which may be based on service and
 performance criteria, to purchase shares of the Company subject to the
 requirements of vesting. The options vest in a graded manner over four
 years with 25 per cent of the options vesting at the end of each year
 and expire at the end of 5 years from the date of vesting. A
 compensation committee constituted by the Board of directors of the
 Company administers the plan. The plan has been amended to enable the
 Company to issue upto 2,000,000 ADR linked options ( wherein one ADR
 linked option is equal to two equity shares ) to the employees of the
 Company as well as its subsidiaries and hence Patni ESOP 2003 -
 Revised 2006 has come into force with effect from 21 June 2006.  In
 June 2009 at the Annual General Meeting the shareholders authorised the
 Company to issue additional 8,000,000 equity shares to eligible
 employees under the Patni ESOP 2003 - Revised 2009 plan.
 
 24 Employee stock compensation plans
 
 On 18 August 2009, a further amendment was made to the Indian Income
 Tax Act, with retroactive effect from 1 April 2009, abolishing the
 provisions of FBT. Thus, for any exercises of stock options by the
 employee on or after 1 April 2009, the shares issued, or allocated and
 transferred by the Company, are no longer subject to FBT.
 
 25. Amounts due to micro, small and medium enterprises
 
 As at 31 December 2010, the company has no outstanding dues to any
 vendors registered with appropriate authority under the Micro, Small
 and Medium Enterprises Development Act 2006. There have been no delays
 in settlement of dues to such vendors, warranting any payment of
 interest as provided in the above Act (2009 : ` Nil).
 
 28. Supplementary statutory information
 
 a) Managerial remuneration does not include Rs. 74,756 (including
 pension provision Rs. 54,603 and leave provision Rs. 6,681) ; (2009 :
 Rs. 82,745, including provision for pension : Rs. 26,338 and leave
 provisions Rs. 4,379) paid/accrued to manager by the subsidiary company
 during the year ended 31 December 2010.
 
 b) Sitting fees paid to non executive directors not included above
 aggregated Rs. 1,240 (2009: Rs. 1,420) during the year ended 31
 December 2010.
 
 c) Commission expense in respect of Non-Executive directors not
 included above aggregated Rs. 14,109 (2009: Rs. 29,345).
 
 d) Decrease in provision for pension liability aggregating to Rs. 6,275
 for the year 2010 (2009: Rs. 3,575) towards the pension plan of two non
 whole-time directors Mr Ashok K Patni and Mr Gajendra K Patni has not
 been included above, since such pension liability arose on account of
 services rendered prior to their appointment as non whole-time
 directors.
 
 e) The above figure do not include gratuity which is actuarially
 determined on an overall basis for the company as a whole and separate
 amount for director is not available.
 
 30. Change in estimates
 
 As per Companys practice, the Company has finalized the amount of
 incentive payable to the employees for the fiscal year 31 December 2009
 based on completion of employee appraisals including final
 determination of key operating parameters applicable to each employee
 and business unit during the year ended 31 December 2010. Accordingly,
 the Company has reversed incentive accrual amounting to Rs. 168,205
 which has been included under personnel cost in profit & loss for the
 year ended 31 December 2010.
 
 32. Employee Benefit Plans Gratuity Benefits
 
 In accordance with the Payment of Gratuity Act, 1972, Patni provides
 for gratuity, a defined retirement plan covering all employees. The
 plan provides a lump sum payment to vested employees at retirement or
 termination of employment based on the respective employees defined
 portion of last salary and the years of employment with the Company.
 
 Patni contributes each year to a gratuity fund based upon actuarial
 valuations performed by an actuary. The fund is administered by Patni
 through a trust set up for the purpose. All assets of the plan are
 owned by the Trust and comprise of approved debt and other securities
 and deposits with banks.
 
 32. Employee Benefit Plans
 
 Defined Contribution Plans
 
 Amount of Rs. 247,153 (2009: Rs. 227,633) is recognised as an expense
 and included in Personnel Costs (Refer Schedule 14) in the Profit and
 
 Loss Account.
 
 Pension Benefits
 
 Founder Directors of the Company are entitled to receive pension
 benefits upon retirement or termination from employment at the rate of
 50% of their last drawn monthly salary. The pension is payable from the
 time the eligible director reaches the age of sixty five and is payable
 to the directors or the surviving spouse. The liabilities for these
 pension plans are actuarially determined and periodically recognized.
 The plan is not funded.
 
 33. The Finance Act,2009 has extended the availability of the 10-year
 income tax holiday by a period of one year such that the tax holiday
 will be available until the earlier of fiscal year ending 31 March 2011
 or 10 years after the commencement of a Companys undertaking. The
 fringe benefit tax has also been abolished.
 
 34. Subsequent event
 
 Pan-Asia iGATE Solutions and iGATE Global Solutions Limited entered
 into share and securities purchase agreements on 10 January 2011, with
 the promoter group of Patni and General Atlantic Mauritius Limited to
 acquire 63% equity interest of the Company at a price of Rs. 503.5 per
 share, subject to fulfillment of certain conditions.
 
 35. Prior year comparatives
 
 Previous period figures have been appropriately reclassified /
 regrouped to conform to the current periods presentations.