Schedules to the financial statements for the year ended March 31, 2011

23.2.20. Provision for post-sales client support and warranties

The movement in the provision for post-sales client support and warranties is as follows :

in crore

Particulars	Year ended March 31,
	2011	2010
Balance at the beginning	73	75
Provision recognized / (reversed)	5	(2)
Provision utilized	–	–
Exchange difference during the year	–	–
Balance at the end	78	73

Provision for post-sales client support is expected to be utilized over a period of 6 months to 1 year.

23.2.21. Gratuity Plan

The following table set out the status of the Gratuity Plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation and plan assets :

in crore

Particulars	As at March 31,
	2011	2010	2009	2008	2007
Obligations at year beginning	308	256	217	221	180
Transfer of obligation	–	(2)	–	–	–
Service cost	171	72	47	47	44
Interest cost	24	19	15	16	14
Actuarial (gain) / loss	15	(4)	–	(9)	–
Benefits paid	(59)	(33)	(23)	(21)	(17)
Amendment in benefit plans	–	–	–	(37)	–
Obligations at year end	459	308	256	217	221
Defined benefit obligation liability as at the Balance Sheet date is fully funded by the Company
Change in plan assets
Plans assets at year beginning, at fair value	310	256	229	221	167
Expected return on plan assets	34	24	16	18	16
Actuarial gain / (loss)	1	1	5	2	3
Contributions	173	62	29	9	52
Benefits paid	(59)	(33)	(23)	(21)	(17)
Plans assets at year end, at fair value	459	310	256	229	221
Reconciliation of present value of the obligation and the fair value of the plan assets :
Fair value of plan assets at the end of the year	459	310	256	229	221
Present value of the defined benefit obligations at the end of the year	459	308	256	217	221
Asset recognized in the Balance Sheet	–	2	–	12	–
Assumptions
Interest rate	7.98%	7.82%	7.01%	7.92%	7.99%
Estimated rate of return on plan assets	9.36%	9.00%	7.01%	7.92%	7.99%
Weighted expected rate of salary increase	7.27%	7.27%	5.10%	5.10%	5.10%

Net gratuity cost for the years ended March 31, 2011 and March 31, 2010 comprises of the following components :

 

Particulars	Year ended March 31,
	2011	2010
Gratuity cost for the year
Service cost	171	72
Interest cost	24	19
Expected return on plan assets	(34)	(24)
Actuarial (gain) / loss	14	(5)
Plan amendment amortization	(4)	(3)
Net gratuity cost	171	59
Actual return on plan assets	35	25

Gratuity cost, as disclosed above, is included under salaries and bonus and is segregated between software development expenses, selling and marketing expenses and general and administration expenses on the basis of number of employees.

During the year ended March 31, 2010, a reimbursement obligation of 2 crore has been recognized towards settlement of gratuity liability of Infosys Consulting India Limited.

As at March 31, 2011 and March 31, 2010, the plan assets have been primarily invested in government securities. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The Company expects to contribute approximately 100 crore to the gratuity trust during the fiscal 2012.

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 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, 2011 and March 31, 2010 amounted to 22 crore and 26 crore, respectively and is disclosed under ‘Current Liabilities’.

23.2.22.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 final guidance note from the Actuarial Society of India, the Company’s actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.

The Company contributed 179 crore towards Provident Fund during the year ended March 31, 2011. (150 crore during the year ended March 31, 2010).

23.2.22.b Superannuation

The Company contributed 57 crore to the Superannuation Trust during the year ended March 31, 2011 (54 crore during the year ended March 31, 2010).

23.2.23 Cash Flow statement

23.2.23.a. Unclaimed dividend

The balance of cash and cash equivalents includes 3 crore as at March 31, 2011 (2 crore as at March 31, 2010) set aside for payment of dividends.

23.2.23.b. Restricted deposits

Deposits with financial institutions as at March 31, 2011 include 344 crore (281 crore as at March 31, 2010) deposited with Life Insurance Corporation of India to settle employee-related 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’.

23.2.24 Dues to micro and small 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.

23.2.25 Exceptional item

During the year ended March 31, 2010, the Company sold 32,31,151 shares of OnMobile Systems Inc., U.S. (OMSI) at a price of 166.58 per share amounting to a total consideration of 53 crore, net of taxes and transactions costs. The resultant income of 48 crore has been appropriated to capital reserve.