Annexure to the auditors' report
The Annexure referred to in our report to the members of Infosys Technologies Limited (‘the Company’) for the year ended March 31, 2011. We report that :
| (i) | (a) | The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. |
| (b) | The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. | |
| (c) | Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption. | |
| (ii) | The Company is a service company, primarily rendering information technology services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable. | |
| (iii) | (a) | The Company has granted a loan to a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956 (‘the Act’). The maximum amount outstanding during the year was  47.71 crore and the year-end balance of such loan amounted to 22.69 crore. Other than the above, the Company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under section 301 of the Act. |
| (b) | In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company. | |
| (c) | In the case of loan granted to the body corporate listed in the register maintained under Section 301 of the Act, the borrower has been regular in the payment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount. | |
| (d) | There are no overdue amounts of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under Section 301 of the Act. | |
| (e) | The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable. | |
| (iv) | In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit. | |
| (v) | (a) | In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. |
| (b) | In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. |
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| (vi) | The Company has not accepted any deposits from the public. | |
| (vii) | In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business. | |
| (viii) | The Central Government of India has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act for any of the services rendered by the Company. | |
| (ix) | (a) | According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees’ State Insurance, Customs duty and Excise duty. |
| Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. | ||
| According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues were in arrears as at March 31, 2011 for a period of more than six months from the date they became payable. |
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| (b) | According to the information and explanations given to us, there are no material dues of Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of Income tax, Sales tax, and Service tax, have not been deposited by the Company on account of disputes : |
Name of the statute |
Nature of dues |
(Amount |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act,1961 |
Fringe benefit tax and interest demanded |
2.28 |
Assessment year 2008-2009 |
Commissioner of Income Tax (Appeals), Bangalore |
Income Tax Act,1961 |
Income-tax, interest and penalty demanded |
228.19(1)(2) |
Assessment year 2007-2008 |
Commissioner of Income Tax (Appeals), Bangalore |
Income Tax Act,1961 |
Interest on Income-tax demanded |
0.51 |
Assessment year 2006-2007 |
Commissioner of Income Tax (Appeals), Bangalore |
KVAT Act, 2003 |
Sales tax, interest and penalty demanded |
24.53(1) |
April 2005 to March 2009 |
High Court of Karnataka |
Central Sales Tax Act, 1956 |
Sales tax demanded |
0.31(1) (2) |
April 2007 to March 2008 |
High Court of Andhra Pradesh |
Service tax |
Service tax demanded |
2.58 |
January 2005 to March 2009 |
Appellate Tribunal, Bangalore |
Service tax |
Service tax and penalty demanded |
23.15 |
February 2007 to March 2009 |
Appellate Tribunal, Bangalore |
| Notes : | (1) | Net of amounts paid under protest. |
| (2) | A stay order has been received against the amount disputed and not deposited. |
| (x) |
The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. |
| (xi) | The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year. |
| (xii) | The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. |
| (xiii) | In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. |
| (xiv) | According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. |
| (xv) | According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. |
| (xvi) | The Company did not have any term loans outstanding during the year. |
| (xvii) | The Company has not raised any funds on short-term basis. |
| (xviii) | The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act. |
| (xix) | The Company did not have any outstanding debentures during the year. |
| (xx) | The Company has not raised any money by public issues during the year. |
| (xxi) | According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit. |
for B S R & Co. |
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Natrajh Ramakrishna Membership number : 32815 |