
Financials
Consolidated financial statements
Independent Auditors’ report on Consolidated financial statements
To the Members of Infosys Limited
Report on the Consolidated financial statements
We have audited the accompanying Consolidated financial statements of Infosys Limited (‘the Holding Company’) and its subsidiaries and associate (collectively referred to as ‘the Company’ or ‘the Group’), comprising the consolidated balance sheet as at 31 March 2016, the consolidated statement of profit and loss, the consolidated cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘the Consolidated financial statements’).
Management’s responsibility for the Consolidated financial statements
The Holding Company’s Board of Directors is responsible for the preparation of the Consolidated financial statements in terms of the requirements of the Companies Act, 2013 (‘the Act’) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (hereinafter referred to as ‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. The Board of Directors of the Company is responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated financial statements by the Directors of the Holding Company, as aforesaid.
Auditors’ responsibility
Our responsibility is to express an opinion on the Consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the Consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the Consolidated financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Company, as at 31 March 2016, and their consolidated profit and their consolidated cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. |
As required by sub-section 3 of Section 143 of the Act, we report, to the extent applicable, that: |
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a. |
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid Consolidated financial statements. |
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b. |
In our opinion, proper books of account as required by law relating to preparation of the aforesaid Consolidated financial statements have been kept so far as it appears from our examination of those books. |
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c. |
The consolidated balance sheet, the consolidated statement of profit and loss, and the consolidated cash flow statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. |
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d. |
In our opinion, the aforesaid Consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. |
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e. |
On the basis of the written representations received from the directors of the Holding Company as on 31 March 2016 taken on record by the Board of Directors of the Holding Company and the report of the statutory auditors of its subsidiary companies incorporated in India, none of the Directors of the Group companies incorporated in India is disqualified as on 31 March 2016 from being appointed as a Director of that company in terms of sub-section 2 of Section 164 of the Act. |
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f. |
With respect to the adequacy of the internal financial controls over financial reporting of the Group and the operating effectiveness of such controls, refer to our separate report in ‘Annexure A’; and |
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g. |
With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: |
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i. |
The Consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group. Refer to Note 2.19 to the Consolidated financial statements; |
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ii. |
Provision has been made in the Consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivatives contracts. Refer to Note 2.6 to the Consolidated financial statements; and |
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iii. |
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and subsidiary companies incorporated in India. |
for B S R & Co. LLP
Chartered Accountants
Firm’s registration number: 101248W/W-100022
Bangalore 15 April, 2016 |
Supreet Sachdev Partner Membership number: 205385 |
Annexure to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)
In conjunction with our audit of the Consolidated financial statements of the Company as of and for the year ended 31 March 2016, we have audited the internal financial controls over financial reporting of Infosys Limited (‘the Holding Company’) and its subsidiary companies which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The Respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note’) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
for B S R & Co. LLP
Chartered Accountants
Firm’s registration number: 101248W/W-100022
Bangalore 15 April, 2016 |
Supreet Sachdev Partner Membership number: 205385 |
Consolidated Balance Sheet
in ₹ crore
Particulars |
Note |
As at March 31, |
|
2016 |
2015 |
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EQUITY AND LIABILITIES |
|||
SHAREHOLDERS’ FUNDS |
|||
Share capital |
2.1 |
1,144 |
572 |
Reserves and surplus |
2.2 |
56,682 |
50,164 |
57,826 |
50,736 |
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Minority interests |
– |
– |
|
NON-CURRENT LIABILITIES |
|||
Deferred tax liabilities (net) |
2.3 |
– |
– |
Other long-term liabilities |
2.4 |
126 |
50 |
126 |
50 |
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CURRENT LIABILITIES |
|||
Trade payables |
|||
Total outstanding dues of micro enterprises and small enterprises |
2.31 |
– |
– |
Total outstanding dues of creditors other than micro enterprises and small enterprises |
386 |
140 |
|
Other current liabilities |
2.5 |
7,601 |
6,920 |
Short-term provisions |
2.6 |
9,202 |
8,443 |
17,189 |
15,503 |
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75,141 |
66,289 |
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ASSETS |
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NON-CURRENT ASSETS |
|||
Fixed assets |
|||
Tangible assets |
2.7 |
8,637 |
7,685 |
Intangible assets |
2.7 |
4,543 |
3,661 |
Capital work-in-progress |
960 |
776 |
|
14,140 |
12,122 |
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Non-current investments |
2.9 |
1,817 |
1,398 |
Deferred tax assets (net) |
2.3 |
533 |
536 |
Long-term loans and advances |
2.10 |
6,832 |
4,906 |
Other non-current assets |
2.11 |
66 |
85 |
23,388 |
19,047 |
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CURRENT ASSETS |
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Current investments |
2.9 |
75 |
872 |
Trade receivables |
2.12 |
11,330 |
9,713 |
Cash and cash equivalents |
2.13 |
32,697 |
30,367 |
Short-term loans and advances |
2.14 |
7,651 |
6,290 |
51,753 |
47,242 |
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75,141 |
66,289 |
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SIGNIFICANT ACCOUNTING POLICIES |
1 |
The accompanying notes form an integral part of the Consolidated financial statements.
As per our report of even date attached |
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for B S R & Co. LLP Chartered Accountants Firm’s registration number:101248W/W-100022 |
for and on behalf of the Board of Directors of Infosys Limited |
Supreet Sachdev Partner Membership number: 205385 |
R. Seshasayee Chairman |
Dr. Vishal Sikka Chief Executive Officer and
|
U. B. Pravin Rao Chief Operating Officer and Whole-time Director |
Bangalore April 15, 2016 |
Roopa Kudva Director |
M. D. Ranganath Chief Financial Officer and
|
A. G. S. Manikantha Company Secretary |
Consolidated Statement of Profit and Loss
in ₹ crore, except per equity share data
Particulars |
Note |
For the year ended March 31, |
|
2016 |
2015 |
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Income from software services and products |
2.15 |
62,441 |
53,319 |
Other income |
2.16 |
3,128 |
3,430 |
Total revenue |
65,569 |
56,749 |
|
Expenses |
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Employee benefit expenses |
2.17 |
34,418 |
29,802 |
Deferred consideration pertaining to acquisition |
2.29.1 |
110 |
219 |
Cost of technical sub-contractors |
3,531 |
2,171 |
|
Travel expenses |
2,263 |
1,818 |
|
Cost of software packages and others |
2.17 |
1,274 |
1,044 |
Communication expenses |
449 |
495 |
|
Consultancy and professional charges |
779 |
421 |
|
Depreciation and amortization expenses |
2.7 |
1,266 |
1,017 |
Other expenses |
2.17 |
2,497 |
2,478 |
Total expenses |
46,587 |
39,465 |
|
PROFIT BEFORE TAX |
18,982 |
17,284 |
|
Tax expense |
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Current tax |
2.18 |
5,315 |
4,835 |
Deferred tax |
2.18 |
(14) |
76 |
PROFIT BEFORE MINORITY INTEREST / SHARE IN NET PROFIT /
|
13,681 |
12,373 |
|
Share in net profit / (loss) of associate |
2.29.3 |
(3) |
(1) |
PROFIT FOR THE YEAR |
13,678 |
12,372 |
|
Profit attributable to |
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Owners of the Company |
13,678 |
12,372 |
|
Minority interests |
– |
– |
|
13,678 |
12,372 |
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EARNINGS PER EQUITY SHARE |
|||
Equity shares of par value ₹ 5/- each |
|||
Basic |
59.85 |
54.13 |
|
Diluted |
59.84 |
54.13 |
|
Number of shares used in computing earnings per share |
2.27 |
||
Basic |
2,28,56,16,160 |
2,28,56,10,264 |
|
Diluted |
2,28,57,11,583 |
2,28,56,40,948 |
|
SIGNIFICANT ACCOUNTING POLICIES |
1 |
The accompanying notes form an integral part of the Consolidated financial statements.
As per our report of even date attached |
|
for B S R & Co. LLP Chartered Accountants Firm’s registration number:101248W/W-100022 |
for and on behalf of the Board of Directors of Infosys Limited |
Supreet Sachdev Partner Membership number: 205385 |
R. Seshasayee Chairman |
Dr. Vishal Sikka Chief Executive Officer and
|
U. B. Pravin Rao Chief Operating Officer and Whole-time Director |
Bangalore April 15, 2016 |
Roopa Kudva Director |
M. D. Ranganath Chief Financial Officer and
|
A. G. S. Manikantha Company Secretary |
Consolidated Cash Flow Statement
in ₹ crore
Particulars |
Note |
For the year ended March 31, |
|
2016 |
2015 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
|||
Profit before tax and after share in associate’s profit |
18,979 |
17,283 |
|
Adjustments to reconcile profit before tax to cash provided by operating activities |
|||
Depreciation and amortization expenses |
1,266 |
1,017 |
|
Deferred consideration pertaining to acquisition |
110 |
219 |
|
Interest and dividend income |
(2,698) |
(2,892) |
|
Provision for bad and doubtful debts |
(52) |
171 |
|
Other adjustments |
147 |
82 |
|
Effect of exchange differences on translation of assets and liabilities |
122 |
66 |
|
Changes in assets and liabilities |
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Trade receivables |
(1,479) |
(1,475) |
|
Loans and advances and other assets |
(1,523) |
(221) |
|
Liabilities and provisions |
856 |
854 |
|
15,728 |
15,104 |
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Income taxes paid (Refer to Note 2.19) |
(5,865) |
(6,751) |
|
NET CASH GENERATED BY OPERATING ACTIVITIES |
9,863 |
8,353 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||
Payment towards capital expenditure (including intangible assets), net of sale proceeds |
(2,723) |
(2,247) |
|
Payment for acquisition of business, net of cash acquired |
(747) |
(1,282) |
|
Payment for acquisition of interests in associate |
– |
(94) |
|
Investments in liquid mutual fund units |
(24,171) |
(23,892) |
|
Investments in preferred stock |
(82) |
– |
|
Investments in other investments |
(22) |
– |
|
Disposal of liquid mutual fund units |
24,947 |
25,096 |
|
Disposal of certificates of deposit |
– |
830 |
|
Investments in tax-free bonds |
(299) |
– |
|
Investments in government bonds |
(3) |
(1) |
|
Investment in fixed maturity plan securities |
– |
(30) |
|
Redemption of fixed maturity plan securities |
33 |
157 |
|
Interest and dividend received |
2,381 |
2,551 |
|
NET CASH USED / (PROVIDED) IN INVESTING ACTIVITIES |
(686) |
1,088 |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||
Dividends paid net of inter-company dividend (including corporate dividend tax) |
(6,813) |
(4,935) |
|
NET CASH PROVIDED IN FINANCING ACTIVITIES |
(6,813) |
(4,935) |
|
Effect of exchange differences on translation of foreign currency cash and cash equivalents |
(34) |
(89) |
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
2,330 |
4,417 |
|
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
30,367 |
25,950 |
|
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR |
32,697 |
30,367 |
|
SIGNIFICANT ACCOUNTING POLICIES |
1 |
The accompanying notes form an integral part of the Consolidated financial statements.
As per our report of even date attached |
|
for B S R & Co. LLP Chartered Accountants Firm’s registration number:101248W/W-100022 |
for and on behalf of the Board of Directors of Infosys Limited |
Supreet Sachdev Partner Membership number: 205385 |
R. Seshasayee Chairman |
Dr. Vishal Sikka Chief Executive Officer and
|
U. B. Pravin Rao Chief Operating Officer and Whole-time Director |
Bangalore April 15, 2016 |
Roopa Kudva Director |
M. D. Ranganath Chief Financial Officer and
|
A. G. S. Manikantha Company Secretary |
Significant accounting policies and notes on accounts
Company overview
Infosys is a global leader in consulting, technology, outsourcing and next-generation services. Along with its subsidiaries, Infosys provides Business IT services (comprising application development and maintenance, independent validation, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management); consulting and systems integration services (comprising consulting, enterprise solutions, systems integration and advanced technologies); products, business platforms and solutions to accelerate intellectual property-led innovation including Finacle®, our banking solution; and offerings in the areas of analytics, cloud, and digital transformation.
Infosys, together with its subsidiaries and controlled trusts, is herein after referred to as ‘the Group’.
The Company is a public limited company incorporated and domiciled in India and has its registered office at Bangalore, Karnataka, India. The Company has its primary listings on the BSE Limited and National Stock Exchange of India Limited in India. The Company’s American Depositary Shares representing equity shares are also listed on the New York Stock Exchange (NYSE), Euronext London and Euronext Paris.
1. Significant accounting policies
1.1 Basis of preparation of financial statements
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The financial statements are prepared in accordance with the principles and procedures required for the preparation and presentation of Consolidated financial statements as laid down under the Accounting Standard (AS) 21, ‘Consolidated financial statements’. The Consolidated financial statements comprise the financial statements of the Company, its controlled trusts and its subsidiaries as disclosed in Note 2.21, combined on a line-by-line basis by adding together book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gain / loss. The Consolidated financial statements are prepared by applying uniform accounting policies in use at the Group. Minority interests have been excluded. Minority interests represent that part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company.
Associates are entities over which the Group has significant influence but not control. Investments in associates are accounted for using the equity method of accounting as laid down under Accounting Standard (AS) 23, ‘Accounting for Investment in Associate in Consolidated financial statements’. The investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the acquisition date. The Group’s investment in associates includes goodwill identified on acquisition.
1.2 Use of estimates
The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage of completion which requires the Group to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of tangible assets and intangible assets.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the Consolidated financial statements in the period in which the changes are made and, if material, their effects are disclosed in the notes to the Consolidated financial statements.
1.3 Revenue recognition
Revenue is primarily derived from software development and related services and from the licensing of software products. Arrangements with customers for software development and related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.
Revenue on time-and-material contracts is recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price and fixed-timeframe contracts, where there is no uncertainty about measurement or collectability of consideration, is recognized based on the percentage-of-completion method. When there is uncertainty about measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Cost and earnings in excess of billings are classified as unbilled revenue, while billings in excess of cost and earnings are classified as unearned revenue. Deferred contract costs are amortized over the term of the contract. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates.
Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized ratably over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts, which require significant implementation services, where revenue for the entire arrangement is recognized over the implementation period based on the percentage-of-completion method. Revenue from client training, support and other services arising due to the sale of software products is recognized as the related services are performed.
The Group accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discount / incentive amount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount / incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Group recognizes the liability based on its estimate of the customer’s future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then the discount is not recognized until the payment is probable and the amount can be estimated reliably. The Group recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.
The Group presents revenues net of indirect taxes in its consolidated Statement of Profit and Loss.
Profit on sale of investments is recorded on transfer of title from the Group and is determined as the difference between the sale price and carrying value of the investment. Lease rentals are recognized ratably on a straight-line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Group’s right to receive dividend is established.
1.4 Provisions and contingent liabilities
A provision is recognized if, as a result of a past event, the Group has a present legal obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
1.5 Post-sales client support and warranties
The Group provides its clients with a fixed-period, post-sales support for corrections of errors and support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in consolidated Statement of Profit and Loss. The Group estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions and likelihood of occurrence.
1.6 Onerous contracts
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.
1.7 Tangible assets and capital work-in-progress
Tangible assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until such assets are ready for use. Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use at the reporting date.
1.8 Intangible assets including goodwill
Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Goodwill comprises the excess of purchase consideration over the parent’s portion of equity of the subsidiary at the date on which investment in the subsidiary is made. Goodwill arising on consolidation or acquisition is not amortized but is tested for impairment.
Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Group has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labor and overhead costs that are directly attributable to preparing the asset for its intended use.
1.9 Depreciation and amortization
Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Group for use. Leasehold improvements are written off over the lower of the remaining primary period of lease or the life of the asset. The Management estimates the useful lives for the other fixed assets as follows:
Buildings (1) |
22-25 years |
Plant and machinery (1) |
5 years |
Office equipment |
5 years |
Computer equipment (1) |
3-5 years |
Furniture and fixtures (1) |
5 years |
Vehicles (1) |
5 years |
(1) Based on technical evaluation, the Management believes that the useful lives as given above best represent the period over which the Management expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
Depreciation and amortization methods, useful lives and residual values are reviewed periodically, including at each financial year end. (Refer to Note 2.7)
1.10 Impairment
The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset’s net selling price or value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset other than goodwill is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
1.11 Retirement benefits to employees
Gratuity
The Group provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible employees of Infosys and its Indian subsidiaries. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Group.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Limited Employees’ Gratuity Fund Trust (‘the Trust’). In case of Infosys BPO and EdgeVerve, contributions are made to the Infosys BPO’s Employees’ Gratuity Fund Trust and EdgeVerve Systems Limited Employees’ Gratuity Fund Trust, respectively. Trustees administer contributions made to the Trusts and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by Indian law.
The Group recognizes the net obligation of the Gratuity Plan in the Balance Sheet as an asset or liability, in accordance with Accounting Standard (AS) 15, ‘Employee Benefits’. The Group’s overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made, and historical returns. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the consolidated Statement of Profit and Loss in the period in which they arise.
Superannuation
Certain employees of Infosys, Infosys BPO and EdgeVerve are participants in a defined contribution plan. The Group has no further obligations to the Plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.
Provident fund
Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee’s salary. The Company contributes a part of the contributions to the Infosys Limited Employees’ Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the Trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.
In respect of Indian subsidiaries, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the respective Company make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee’s salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The Companies have no further obligations under the provident fund plan beyond its monthly contributions.
Compensated absences
The employees of the Group are entitled to compensated absences, which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.
1.12 Share-based payments
The Group accounts for equity-settled stock options in accordance with the accounting treatment prescribed by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Employee Share-based Payments issued by the Institute of Chartered Accountants of India using the intrinsic value method.
1.13 Foreign currency transactions
Foreign-currency-denominated monetary assets and liabilities are translated at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.
The translation of the financial statements of the foreign subsidiaries from the local currency to the reporting currency of the Company is performed for Balance Sheet accounts using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using a monthly average exchange rate for the respective periods. The resulting difference is presented as foreign currency translation reserve included in ‘Reserves and Surplus’. When a subsidiary is disposed off, in part or in full, the relevant amount is transferred to profit or loss.
1.14 Forward and options contracts in foreign currencies
The Group uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduces the risk or cost to the Group and the Group does not use those for trading or speculation purposes.
Effective April 1, 2008, the Company adopted AS 30, ‘Financial Instruments: Recognition and Measurement’, to the extent that the adoption did not conflict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements.
Forward and options contracts are fair-valued at each reporting date. The Company designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast transactions. The Company records the gain or loss on effective hedges, if any, in the hedging reserve until the transactions are complete. On completion, the gain or loss is transferred to the consolidated Statement of Profit and Loss of that period. To designate a forward or options contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract and subsequently whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. Changes in the fair value relating to the ineffective portion of the hedges and derivative instruments that do not qualify or have not been designated for hedge accounting are recognized in the consolidated Statement of Profit and Loss.
1.15 Income taxes
Income taxes are accrued in the same period in which the related revenue and expenses arise. A provision is made for income tax, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum alternate tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the Consolidated Balance Sheet if there is convincing evidence that the Group will pay normal tax after the tax holiday period and the resultant asset can be measured reliably. The Group offsets, on a year-on-year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.
The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets, in situation where unabsorbed depreciation and carry forward business loss exist, are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than in situations of unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. Deferred tax assets and deferred tax liabilities have been offset wherever the Group has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to consolidated Statement of Profit and Loss are credited to the securities premium account.
1.16 Earnings per share
Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value, which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus share issues including for changes effected prior to the approval of the Consolidated financial statements by the Board of Directors.
1.17 Investments
Trade investments are the investments made to enhance the Group’s business interests. Investments are either classified as current or long-term, based on the Management’s intention. Current investments are carried at the lower of cost and fair value of each investment individually. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.
1.18 Cash and cash equivalents
Cash and cash equivalents comprise cash and cash-on-deposit with banks and financial institutions. The Group considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
1.19 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated.
1.20 Leases
The leases under which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight-line basis in the consolidated Statement of Profit and Loss over the lease term.
1.21 Government grants
The Group recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to depreciable assets are treated as deferred income and are recognized in the consolidated Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in the consolidated Statement of Profit and Loss over the periods necessary to match them with the related costs which they are intended to compensate.
2. Notes on accounts for the year ended March 31, 2016
Amounts in the financial statements are presented in ₹ crore, except per equity share data and as otherwise stated. All exact amounts are stated with the suffix ‘/-’. One crore equals 10 million.
The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.
2.1 Share capital
in ₹ crore, except as otherwise stated
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Authorized |
||
Equity shares, ₹ 5/- par value |
||
2,40,00,00,000 (1,20,00,00,000) equity shares |
1,200 |
600 |
Issued, Subscribed and Paid-Up |
||
Equity shares, ₹ 5/- par value (1) |
1,144 |
572 |
2,28,56,21,088 (1,14,28,05,132) equity shares fully paid-up (2) |
||
1,144 |
572 |
Forfeited shares amounted to ₹ 1,500 (₹ 1,500)
(1) Refer to Note 2.27 for details of basic and diluted shares
(2) Net of treasury shares 1,13,23,576 (56,67,200)
The Company has only one class of shares referred to as equity shares having a par value of ₹ 5. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the period of five years immediately preceding March 31, 2016
The Company has allotted 1,14,84,72,332 fully-paid-up shares of face value ₹ 5 each during the quarter ended June 30, 2015, pursuant to a bonus issue approved by the shareholders through a postal ballot. The book closure date fixed by the Board was June 17, 2015.
The Company has allotted 57,42,36,166 fully-paid-up equity shares of face value ₹ 5 each during the quarter ended December 31, 2014 pursuant to a bonus issue approved by the shareholders through a postal ballot. The record date fixed by the Board of Directors was December 3, 2014.
For both the bonus issues, a bonus share of one equity share for every equity share held, and a stock dividend of one American Depositary Share (ADS) for every ADS held has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. Options granted under the restricted stock unit plan have been adjusted for bonus shares.
The Board has increased dividend payout ratio from up to 40% to up to 50% of post-tax consolidated profits effective fiscal 2015.
During the year ended March 31, 2015, the amount of dividend per share recognized as distribution to equity shareholder includes ₹ 30 per share of interim dividend (not adjusted for bonus shares of June 17, 2015 and December 3, 2014) and ₹ 29.50 per share of final dividend (not adjusted for bonus shares on June 17, 2015). The total dividend appropriation for the year ended March 31, 2015 amounted to ₹ 6,145 crore including corporate dividend tax of ₹ 1,034 crore.
The Board of Directors, in its meeting on October 12, 2015, declared an interim dividend of ₹ 10 per equity share. Further, the Board of Directors, in its meeting on April 15, 2016, has proposed a final dividend of ₹ 14.25 per equity share for the financial year ended March 31, 2016. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on June 18, 2016. The total dividend appropriation for the year ended March 31, 2016 amounted to ₹ 6,704 crore including corporate dividend tax of ₹ 1,134 crore.
The Central Government, in consultation with National Advisory Committee on Accounting Standards, has amended the Companies (Accounting Standards) Rules, 2006 (‘principal rules’), through a notification issued by the Ministry of Corporate Affairs dated March 30, 2016. The Companies (Accounting Standards) Rules, 2016 is effective March 30, 2016. According to the amended rules, the above-mentioned proposed dividend will not be recorded as a liability as at March 31, 2016. (Refer to Para 8.5 of AS-4 – Contingencies and Events occurring after Balance Sheet date). The Company believes, based on a legal opinion, that the Rule 3(2) of the principal rules has not been withdrawn or replaced and accordingly, the Companies (Accounting Standards) Rule, 2016 will apply to the accounting periods commencing on or after March 30, 2016. Therefore the Company has recorded ₹ 3,939 crore as liability for proposed dividends (including corporate dividend tax) as at March 31, 2016.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.
The details of shareholders holding more than 5% shares as at March 31, 2016 and March 31, 2015 are as follows:
Name of the shareholder |
As at March 31, 2016 |
As at March 31, 2015 |
||
No. of shares |
% held |
No. of shares |
% held |
|
Deutsche Bank Trust Company Americas
|
38,53,17,937 |
16.78 |
18,60,73,981 |
16.20 |
Life Insurance Corporation of India |
13,22,74,300 |
5.76 |
5,52,74,758 |
4.81 |
The reconciliation of the number of shares outstanding and the amount of share capital as at March 31, 2016 and March 31, 2015 are as follows:
Particulars |
As at March 31, 2016 |
As at March 31, 2015 |
||
No. of shares |
Amount |
No. of shares |
Amount |
|
Number of shares at the beginning of the year |
1,14,28,05,132 |
572 |
57,14,02,566 |
286 |
Add: Bonus shares issued (including bonus on treasury shares) |
1,14,84,72,332 |
574 |
57,42,36,166 |
287 |
Less: Increase in treasury shares consequent to bonus issue |
56,67,200 |
2 |
28,33,600 |
1 |
Add: Shares issued on exercise of employee stock options |
10,824 |
– |
– |
– |
Number of shares at the end of the year |
2,28,56,21,088 |
1,144 |
1,14,28,05,132 |
572 |
Stock option plan
2015 Stock Incentive Compensation Plan
SEBI issued the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (‘SEBI Regulations’), which replaced the SEBI ESOP Guidelines, 1999. The 2011 Plan (as explained below) was required to be amended and restated in accordance with the SEBI Regulations. Consequently, to effect this change and to further introduce stock options / ADRs and other stock incentives, the Company put forth the 2015 Stock Incentive Compensation Plan (‘the 2015 Plan’) for approval to the shareholders of the Company. Pursuant to the approval by the shareholders through a postal ballot which ended on March 31, 2016, the Board of Directors have been authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Plan. The maximum number of shares under the 2015 Plan shall not exceed 2,40,38,883 equity shares (this includes 1,12,23,576 equity shares which are currently held by the Trust towards the 2011 Plan). 1,70,38,883 equity shares will be issued as RSUs at par value and 70,00,000 equity shares will be issued as stock options at market price. These instruments will vest over a period of four years and the Company expects to grant the instruments under the 2015 Plan over the period of four to seven years.
2011 RSU Plan
The Company had a 2011 RSU Plan (‘the 2011 Plan’) which provided for the grant of restricted stock units (RSUs) to eligible employees of the Company. The Board of Directors recommended the establishment of the 2011 Plan to the shareholders on August 30, 2011 and the shareholders approved the recommendation of the Board of Directors on October 17, 2011 through a postal ballot. The maximum aggregate number of shares that may be awarded under the plan was 1,13,34,400 and the plan was expected to continue in effect for a term of 10 years from the date of initial grant under the plan. During the year ended March 31, 2015, the Company made a grant of 1,08,268 restricted stock units (adjusted for bonus issues) to Dr. Vishal Sikka, Chief Executive Office and Managing Director. The Board, in its meeting held on June 22, 2015, on the recommendation of nomination and remuneration committee, further granted 1,24,061 RSUs to Dr. Vishal Sikka. These RSUs are vesting over a period of four years from the date of the grant in the proportions specified in the award agreement. The RSUs will vest subject to achievement of certain key performance indicators as set forth in the award agreement for each applicable year of the vesting tranche and continued employment through each vesting date. Further, the Company has earmarked 1,00,000 equity shares for welfare activities of the employees, approved by the shareholders through a postal ballot which ended on March 31, 2016. The equity shares currently held under this plan, i.e. 1,12,23,576 equity shares (this includes the aggregate number of equity shares that may be awarded under the 2011 Plan as reduced by 10,824 equity shares already exercised by Dr. Vishal Sikka and 1,00,000 equity shares which have been earmarked for welfare activities of the employees) have been subsumed under the 2015 Plan.
Further, the award granted to Dr. Vishal Sikka on June 22, 2015 was modified by the nomination and remuneration committee on April 14, 2016. There is no modification or change in the total number of RSUs granted or the vesting period (which is four years). The modifications relate to the criteria of vesting for each of the years. Based on the modification, the first tranche of the RSUs will vest subject to achievement of certain key performance indicators for the year ended March 31, 2016. Subsequent vesting of RSUs for each of the remaining years would be subject to continued employment.
In accordance with the SEBI Regulations, 2014, the excess of the closing market price on the grant date of the RSUs over the exercise price is amortized on a straight-line basis over the vesting period.
The activity in the 2011 Plan during the years ended March 31, 2016 and March 31, 2015 is as follows:
Particulars |
Year ended March 31, 2016 |
Year ended March 31, 2015 |
||
Shares arising out of options |
Weighted average exercise price |
Shares arising out of options |
Weighted average exercise price |
|
The 2011 Plan |
||||
Outstanding at the beginning (1) |
1,08,268 |
5 |
– |
– |
Granted |
1,24,061 |
5 |
1,08,268 |
5 |
Forfeited and expired |
– |
– |
– |
– |
Exercised (1) |
10,824 |
5 |
– |
– |
Outstanding at the end |
2,21,505 |
5 |
1,08,268 |
5 |
Exercisable at the end |
– |
– |
– |
– |
(1) Adjusted for bonus issues
The weighted average remaining contractual life of RSUs outstanding as of March 31, 2016 and March 31, 2015 under the 2011 Plan was 1.98 years and 2.39 years, respectively.
The weighted average share price of options exercised under the 2011 Plan on the date of exercise was ₹ 1,088.
The differential on stock compensation expense if the ‘fair value’ of the RSUs on the date of the grant were considered instead of the ‘intrinsic value’ during the years ended March 31, 2016 and March 31, 2015 is less than ₹ 1 crore. Consequently, there is no impact on earnings per share.
The fair value for the above impact analysis is estimated on the date of grant using the Black-Scholes-Merton model with the following assumptions:
Particulars |
For options granted in fiscal |
|
2016 |
2015 |
|
Grant date |
22-Jun-15 |
21-Aug-14 |
Weighted average share price (₹) (1) |
1,024 |
3,549 |
Exercise price (₹) (1) |
5 |
5 |
Expected volatility (%) |
28-36 |
30-37 |
Expected life of the option (years) |
1-4 |
1-4 |
Expected dividends (%) |
2.43 |
1.84 |
Risk-free interest rate (%) |
7-8 |
8-9 |
Weighted average fair value as on grant date (₹) (1) |
948 |
3,355 |
(1) Data for fiscal 2015 is not adjusted for bonus issues
The expected term of an RSU is estimated based on the vesting term and contractual term of the RSU, as well as expected exercise behavior of the employee who receives the RSU. Expected volatility during the expected term of the RSU is based on historical volatility of the observed market prices of the Company’s publicly traded equity shares during a period equivalent to the expected term of the RSU.
During the years ended March 31, 2016 and March 31, 2015, the Company recorded an employee compensation expense of ₹ 7 crore and ₹ 2 crore in the consolidated Statement of Profit and Loss.
2.2 Reserves and surplus
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Capital reserves – Opening balance |
54 |
54 |
Add: Transferred from surplus |
– |
– |
54 |
54 |
|
Foreign currency translation reserve – Opening balance |
332 |
376 |
Add: Foreign currency translation during the year |
81 |
(44) |
Foreign currency translation reserve – Closing balance |
413 |
332 |
Securities premium account – Opening balance |
2,784 |
3,070 |
Less: Amount utilized for issuance of bonus shares (Refer to Note 2.1) |
572 |
286 |
Add: Exercise of stock options |
1 |
|
2,213 |
2,784 |
|
Stock options outstanding – Opening balance (Refer to Note 2.1) |
2 |
– |
Additions during the year |
7 |
2 |
Less: Exercise of stock options |
1 |
– |
8 |
2 |
|
General reserve – Opening balance |
10,505 |
9,288 |
Add: Transferred from surplus |
1,579 |
1,217 |
12,084 |
10,505 |
|
Other reserve – Opening balance (1) |
4 |
3 |
Add: Transferred from surplus |
1 |
1 |
5 |
4 |
|
Cash flow hedge reserve – Opening balance |
– |
– |
Add: Unrealized gains / (loss) from effective hedges |
1 |
– |
Less: Reclassification to Statement of Profit and Loss |
1 |
– |
– |
– |
|
Special Economic Zone Re-investment Reserve – Opening balance (2) |
– |
– |
Add: Transferred from surplus |
591 |
– |
Less: Transferred to surplus on utilization |
591 |
– |
Special Economic Zone Re-investment Reserve – Closing balance |
– |
– |
Surplus – Opening balance |
36,483 |
31,453 |
Add: Inter-company dividend |
28 |
21 |
Add: Net profit after tax transferred from the Statement of Profit and Loss |
13,678 |
12,372 |
Add: Transfer from Special Economic Zone Re-investment Reserve on utilization |
591 |
– |
Amount available for appropriation |
50,780 |
43,846 |
Appropriations |
||
Interim dividend |
2,297 |
1,723 |
Final dividend |
3,273 |
3,388 |
Total dividend |
5,570 |
5,111 |
Dividend tax |
1,134 |
1,034 |
Amount transferred to other reserve |
1 |
1 |
Amount transferred to Special Economic Zone Re-investment Reserve |
591 |
– |
Amount transferred to general reserve |
1,579 |
1,217 |
Surplus – Closing balance |
41,905 |
36,483 |
56,682 |
50,164 |
(1) Under the Swiss Code of Obligation, a few subsidiaries of Lodestone are required to appropriate 5% of the annual profit to legal reserve until this equals 20% of the paid-up share capital. To the extent it does not exceed one-half of the share capital, the general reserve may be used only to cover losses or for measures designed to sustain the Company through difficult times, to prevent unemployment or to mitigate its consequences.
(2) The Special Economic Zone Re-investment Reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii) of the Income-tax Act,1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of the Section 10AA(2) of the Income-tax Act, 1961.
2.3 Deferred taxes
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Deferred tax assets |
||
Fixed assets |
178 |
241 |
Trade receivables |
89 |
111 |
Compensated absences |
389 |
299 |
Computer software |
50 |
51 |
Accrued compensation to employees |
68 |
48 |
Post-sales client support |
77 |
74 |
Others |
55 |
30 |
906 |
854 |
|
Deferred tax liabilities |
||
Branch profit tax |
334 |
316 |
Others |
39 |
2 |
373 |
318 |
|
Deferred tax assets after set-off |
533 |
536 |
Deferred tax liabilities after set-off |
– |
– |
Deferred tax assets and deferred tax liabilities have been offset wherever the Group has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.
As at March 31, 2016 and March 31, 2015, the Group has provided for branch profit tax of ₹ 334 crore and ₹ 316 crore, respectively, for its overseas branches, as the Group estimates that these branch profits would be distributed in the foreseeable future. The change in provision for branch profit tax includes ₹ 18 crore movement on account of exchange rate during the year ended March 31, 2016.
2.4 Other long-term liabilities
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Others |
||
Gratuity obligation – unamortized amount relating to plan amendment
|
– |
3 |
Deferred income – government grant on land-use rights |
47 |
47 |
Payable for acquisition of business
|
46 |
– |
Accrued salaries and benefits |
||
Bonus and incentives |
33 |
– |
126 |
50 |
2.5 Other current liabilities
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Accrued salaries and benefits |
||
Salaries and benefits |
1,104 |
1,237 |
Bonus and incentives |
1,162 |
869 |
Unearned revenue |
1,332 |
1,052 |
Unpaid dividends |
5 |
3 |
Other liabilities |
||
Provision for expenses |
2,189 |
1,984 |
Retention monies |
80 |
53 |
Withholding and other taxes payable |
1,296 |
904 |
Gratuity obligation – unamortized amount relating to plan amendment, current
|
4 |
4 |
Payable for acquisition of business
|
86 |
525 |
Advances received from clients |
28 |
27 |
Payable by controlled trusts |
167 |
177 |
Deferred income – government grant on land-use rights |
1 |
1 |
Accrued gratuity (Refer to Note 2.24) |
1 |
7 |
Other payables |
141 |
74 |
Mark-to-market forward and options contracts |
5 |
3 |
7,601 |
6,920 |
2.6 Short-term provisions
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Provision for employee benefits |
||
Compensated absences |
1,341 |
1,069 |
Others |
||
Proposed dividend |
3,273 |
3,388 |
Provision for |
||
Tax on dividend |
666 |
690 |
Income taxes (net of advance tax and tax deducted at source) |
3,410 |
2,818 |
Post-sales client support and warranties and others |
512 |
478 |
9,202 |
8,443 |
Provision for post-sales client support and warranties and others
The movement in the provision for post-sales client support and warranties and others is as follows:
in ₹ crore
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Balance at the beginning |
478 |
379 |
Provision recognized / (reversed) |
106 |
172 |
Provision utilized |
(103) |
(84) |
Exchange difference |
31 |
11 |
Balance at the end |
512 |
478 |
Provision for post-sales client support and warranties and other provisions are expected to be utilized over a period of six months to one year.
2.7 Fixed assets
The changes in the carrying value of fixed assets for the year ended March 31, 2016 are as follows:
in ₹ crore, except as otherwise stated
Particulars |
Tangible assets |
Intangible assets |
Total |
||||||||||||
Land-Freehold |
Land- Leasehold |
Buildings (1) |
Plant and equipment |
Office equipment (3) |
Computer equipment (3) |
Furniture and fixtures (3) |
Leasehold improvements |
Vehicles |
Total |
Goodwill |
Intellectual property rights and others |
Land-use rights |
Total |
||
Original cost |
|||||||||||||||
As at April 1, 2015 |
931 |
633 |
5,881 |
1,427 |
676 |
3,347 |
958 |
221 |
34 |
14,108 |
3,595 |
42 |
71 |
3,708 |
17,816 |
Additions through acquisitions (3) |
– |
– |
– |
– |
1 |
2 |
1 |
– |
– |
4 |
881 |
– |
– |
881 |
885 |
Additions during the year |
41 |
17 |
444 |
333 |
166 |
1,103 |
256 |
9 |
6 |
2,375 |
– |
2 |
– |
2 |
2,377 |
Deductions / retirement during the year |
– |
– |
– |
(1) |
(6) |
(396) |
(7) |
(1) |
(12) |
(423) |
– |
(10) |
– |
(10) |
(433) |
Foreign exchange difference |
– |
– |
– |
– |
2 |
16 |
1 |
6 |
1 |
26 |
– |
(2) |
1 |
(1) |
25 |
As at March 31, 2016 |
972 |
650 |
6,325 |
1,759 |
839 |
4,072 |
1,209 |
235 |
29 |
16,090 |
4,476 |
32 |
72 |
4,580 |
20,670 |
Depreciation and amortization |
|||||||||||||||
As at April 1, 2015 |
– |
16 |
1,982 |
881 |
412 |
2,287 |
647 |
179 |
19 |
6,423 |
– |
42 |
5 |
47 |
6,470 |
Accumulated depreciation on acquired assets (3) |
– |
– |
– |
– |
1 |
1 |
– |
– |
– |
2 |
– |
– |
– |
– |
2 |
For the year |
– |
6 |
219 |
220 |
100 |
553 |
139 |
22 |
5 |
1,264 |
– |
1 |
1 |
2 |
1,266 |
Deductions / adjustments during the year (3) |
– |
– |
– |
(1) |
(5) |
(237) |
(6) |
2 |
(7) |
(254) |
– |
(10) |
– |
(10) |
(264) |
Foreign exchange difference |
– |
– |
– |
– |
1 |
14 |
1 |
2 |
– |
18 |
– |
(2) |
– |
(2) |
16 |
As at March 31, 2016 |
– |
22 |
2,201 |
1,100 |
509 |
2,618 |
781 |
205 |
17 |
7,453 |
– |
31 |
6 |
37 |
7,490 |
Net book value |
|||||||||||||||
As at March 31, 2016 |
972 |
628 |
4,124 |
659 |
330 |
1,454 |
428 |
30 |
12 |
8,637 |
4,476 |
1 |
66 |
4,543 |
13,180 |
The changes in the carrying value of fixed assets for the year ended March 31, 2015 are as follows:
in ₹ crore, except as otherwise stated
Particulars |
Tangible assets |
Intangible assets |
Total |
||||||||||||
Land-Freehold |
Land- Leasehold |
Buildings (1) |
Plant and equipment |
Office equipment (3) |
Computer equipment (3) |
Furniture and fixtures (3) |
Leasehold improvements |
Vehicles |
Total |
Goodwill |
Intellectual property rights and others |
Land-use rights |
Total |
||
Original cost |
|||||||||||||||
As at April 1, 2014 |
782 |
360 |
5,026 |
1,150 |
551 |
2,659 |
805 |
212 |
35 |
11,580 |
2,244 |
58 |
68 |
2,370 |
13,950 |
Additions through acquisitions (2) |
– |
– |
– |
– |
– |
13 |
9 |
– |
– |
22 |
1,351 |
1 |
– |
1,352 |
1,374 |
Additions during the year |
149 |
273 |
855 |
280 |
140 |
765 |
161 |
22 |
6 |
2,651 |
– |
– |
– |
– |
2,651 |
Deductions / retirement during the year |
– |
– |
– |
(3) |
(14) |
(82) |
(10) |
(10) |
(6) |
(125) |
– |
(17) |
– |
(17) |
(142) |
Foreign exchange difference |
– |
– |
– |
– |
(1) |
(8) |
(7) |
(3) |
(1) |
(20) |
– |
– |
3 |
3 |
(17) |
As at March 31, 2015 |
931 |
633 |
5,881 |
1,427 |
676 |
3,347 |
958 |
221 |
34 |
14,108 |
3,595 |
42 |
71 |
3,708 |
17,816 |
Depreciation and amortization |
|||||||||||||||
As at April 1, 2014 |
– |
– |
1,794 |
703 |
345 |
1,965 |
530 |
169 |
18 |
5,524 |
– |
45 |
3 |
48 |
5,572 |
Accumulated depreciation on acquired assets (2) |
– |
– |
– |
– |
– |
(9) |
(4) |
– |
– |
(13) |
– |
– |
– |
– |
(13) |
For the year |
– |
16 |
188 |
181 |
81 |
387 |
128 |
16 |
6 |
1,003 |
– |
13 |
1 |
14 |
1,017 |
Deductions / adjustments during the year (2) |
– |
– |
– |
(2) |
(13) |
(52) |
(2) |
(8) |
(4) |
(81) |
– |
(16) |
– |
(16) |
(97) |
Foreign exchange difference |
– |
– |
– |
(1) |
(1) |
(4) |
(5) |
2 |
(1) |
(10) |
– |
– |
1 |
1 |
(9) |
As at March 31, 2015 |
– |
16 |
1,982 |
881 |
412 |
2,287 |
647 |
179 |
19 |
6,423 |
– |
42 |
5 |
47 |
6,470 |
Net book value |
|||||||||||||||
As at March 31, 2015 |
931 |
617 |
3,899 |
546 |
264 |
1,060 |
311 |
42 |
15 |
7,685 |
3,595 |
– |
66 |
3,661 |
11,346 |
(1) Buildings include ₹ 250 being the value of five shares of ₹ 50 each in Mittal Towers Premises Co-operative Society Limited.
(2) Includes certain assets having gross book value of ₹ 23 crore, accumulated depreciation of ₹ 14 crore and net book value of ₹ 9 crore taken over on acquisition of Panaya effective March 5, 2015.
(3) Includes certain assets having gross book value of ₹ 4 crore, accumulated depreciation of ₹ 2 crore and net book value of ₹ 2 crore taken over on acquisition of Kallidus, Skava and Noah.
During the quarter ended June 30, 2014, the Management, based on internal and external technical evaluation, had reassessed the remaining useful life of certain assets primarily consisting of buildings and computers with effect from April 1, 2014. Accordingly, the useful lives of certain assets required a change from the previous estimate.
The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of some of these agreements, the Company has the option to purchase or renew the properties on expiry of the lease period.
2.8 Leases
Obligations on long-term, non-cancelable operating leases
The lease rentals charged during the year and the future minimum rental payments in respect of non-cancelable operating leases are as follows:
in ₹ crore
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Lease rentals recognized during the year |
360 |
309 |
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Lease obligations payable |
||
Within one year of the Balance Sheet date |
372 |
168 |
Due in a period between one year and five years |
873 |
395 |
Due after five years |
442 |
168 |
A majority of the Group’s operating lease arrangements extend up to a maximum of 10 years from their respective dates of inception and relate to rented overseas premises. Some of these lease agreements have price escalation clauses.
2.9 Investments
in ₹ crore, except as otherwise stated
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Non-current investments |
||
Long-term investments – at cost |
||
Others (unquoted) |
||
Investments in preferred stock and equity instruments (Refer to Note 2.9.1) |
99 |
7 |
Less: Provision for equity investments |
6 |
6 |
93 |
1 |
|
Others (Refer to Note 2.9.1) |
22 |
– |
115 |
1 |
|
Others (quoted) |
||
Investments in tax-free bonds
|
1,599 |
1,300 |
Investment in government bonds
|
– |
4 |
1,599 |
1,304 |
|
Long-term investments – equity method |
||
Trade (unquoted) |
||
Investment in associate |
||
DWA Nova LLC (Refer to Note 2.21) |
103 |
93 |
103 |
93 |
|
Total non-current investments |
1,817 |
1,398 |
Current investments |
||
Current portion of long-term investments |
||
Quoted |
||
Fixed maturity plans
|
– |
30 |
Investment in government bonds
|
5 |
– |
5 |
30 |
|
Current investments – at the lower of cost and fair value |
||
Unquoted |
||
Liquid mutual fund units
|
68 |
842 |
68 |
842 |
|
Quoted |
||
Investment in government bonds
|
2 |
– |
2 |
– |
|
Total current investments |
75 |
872 |
Total investments |
1,892 |
2,270 |
Aggregate amount of quoted investments excluding interest accrued but not due of ₹ 58 crore included under Note 2.14 Short-term loans and advances |
1,606 |
1,334 |
Market value of quoted investments |
1,703 |
1,376 |
Aggregate amount of unquoted investments |
292 |
942 |
Aggregate amount of provision made for non-current unquoted investments |
6 |
6 |
2.9.1 Details of investments
The details of non-current other investments in preferred stock, equity instruments and others as at March 31, 2016 and March 31, 2015 are as follows:
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Preferred stock |
||
Airviz Inc. 2,82,279 (Nil) Series A Preferred Stock, fully paid-up, par value USD 0.001 each |
13 |
– |
ANSR Consulting 52,631 (Nil) Series A Preferred Stock, fully paid-up, par value USD 0.001 each |
9 |
– |
Whoop Inc. 16,48,352 (Nil) Series B Preferred Stock, fully paid-up, par value USD 0.0001 each |
20 |
– |
CloudEndure Ltd. 12,79,645 (Nil) Preferred Series B Shares, fully paid-up, par value ILS 0.01 each |
13 |
– |
Nivetti Systems Private Limited 2,28,501 (Nil) Preferred Stock, fully paid-up, par value ₹ 1 each |
10 |
– |
Waterline Data Science Inc. 39,33,910 (Nil) Series B Preferred Stock, fully paid-up, par value USD 0.00001 each |
27 |
– |
Equity instrument OnMobile Systems Inc.,
21,54,100 (21,54,100) common stock at USD 0.4348 each, fully paid-up, par value
|
4 |
4 |
Merasport Technologies Private Limited 2,420 (2,420) equity shares at ₹ 8,052/- each, fully paid-up, par value ₹ 10/- each |
2 |
2 |
Global Innovation and Technology Alliance 15,000 (10,000) equity shares at ₹ 1,000/- each, fully paid-up, par value ₹ 1,000/- each |
1 |
1 |
Others |
||
Vertex Ventures U.S. Fund I, L.P |
22 |
– |
121 |
7 |
|
Less: Provision for investment |
6 |
6 |
115 |
1 |
2.9.2 Details of investments in tax-free bonds and government security bond
The balances held in tax-free bonds as at March 31, 2016 and March 31, 2015 are as follows:
in ₹ crore
Particulars |
Face value ₹ |
As at March 31, 2016 |
As at March 31, 2015 |
||
Units |
Amount |
Units |
Amount |
||
7.34% Indian Railway Finance Corporation Limited Bonds 19FEB2028 |
1,000/- |
21,00,000 |
211 |
21,00,000 |
211 |
8.30% National Highways Authority of India Bonds 25JAN2027 |
1,000/- |
5,00,000 |
53 |
5,00,000 |
53 |
7.18% Indian Railway Finance Corporation Limited Bonds 19FEB2023 |
1,000/- |
20,00,000 |
201 |
20,00,000 |
201 |
8.46% India Infrastructure Finance Company Limited Bonds 30AUG2028 |
10,00,000/- |
2,000 |
200 |
2,000 |
200 |
8.46% Power Finance Corporation Limited Bonds 30AUG2028 |
10,00,000/- |
1,500 |
150 |
1,500 |
150 |
8.35% National Highways Authority of India Bonds 22NOV2023 |
10,00,000/- |
1,500 |
150 |
1,500 |
150 |
8.26% India Infrastructure Finance Company Limited Bonds 23AUG28 |
10,00,000/- |
1,000 |
100 |
1,000 |
100 |
8.10% Indian Railway Finance Corporation Limited Bonds 23FEB2027 |
1,000/- |
5,00,000 |
53 |
5,00,000 |
53 |
8.54% Power Finance Corporation Limited Bonds 16NOV2028 |
1,000/- |
5,00,000 |
50 |
5,00,000 |
50 |
8.48% India Infrastructure Finance Company Limited Bonds 05SEP2028 |
10,00,000/- |
450 |
45 |
450 |
45 |
7.93% Rural Electrification Corporation Limited Bonds 27MAR2022 |
1,000/- |
2,00,000 |
21 |
2,00,000 |
21 |
8.20% Power Finance Corporation Limited Bonds 2022 |
1,000/- |
5,00,000 |
51 |
5,00,000 |
51 |
8.00% Indian Railway Finance Corporation Limited Bonds 2022 |
1,000/- |
1,50,000 |
15 |
1,50,000 |
15 |
7.28% National Highways Authority of India Bonds 18SEP30 |
10,00,000/- |
2,000 |
200 |
– |
– |
7.28% Indian Railway Finance Corporation Limited 21DEC30 |
1,000/- |
4,22,800 |
42 |
– |
– |
7.35% National Highways Authority of India Bonds 11JAN31 |
1,000/- |
5,71,396 |
57 |
– |
– |
74,52,646 |
1,599 |
64,56,450 |
1,300 |
The balances held in government bonds as at March 31, 2016 and March 31, 2015 are as follows:
in ₹ crore
Particulars |
Face value PHP |
As at March 31, 2016 |
As at March 31, 2015 |
||
Units |
Amount |
Units |
Amount |
||
Fixed Rate Treasury Notes 1.62 PCT MAT DATE 7 SEPT 2016 |
100 |
50,000 |
1 |
– |
– |
Fixed Rate Treasury Notes 2.20 PCT MAT DATE 25 APR 2016 |
100 |
60,000 |
1 |
60,000 |
1 |
Fixed Rate Treasury Notes 1.00 PCT MAT DATE 25 APR 2016 |
100 |
2,00,000 |
3 |
2,00,000 |
3 |
Fixed Rate Treasury Notes 1.70 PCT MAT DATE 22 FEB 2017 |
100 |
10,000 |
– |
– |
– |
Fixed Rate Treasury Notes 1.70 PCT PHY6972FW G18 MAT Date 22 FEB 2017 |
100 |
1,50,000 |
2 |
– |
– |
Fixed Rate Treasury Notes 1.96 PCT MAT DATE 27 JAN 2016 |
100 |
– |
– |
10,000 |
– |
Fixed Rate Treasury Notes 7.00 PCT PIBD0716A488 MAT DATE 27 JAN 2016 |
100 |
– |
– |
10,000 |
– |
4,70,000 |
7 |
2,80,000 |
4 |
2.9.3 Details of investments in fixed maturity plans
The balances held in fixed maturity plans as at March 31, 2015 are as follows:
in ₹ crore
Particulars |
Face value ₹ |
Units |
Amount |
SBI debt fund series A-28-Growth – direct-367 days |
10 |
1,25,00,000 |
13 |
SBI debt fund series A-31-Growth – direct-367 days |
10 |
75,00,000 |
7 |
UTI Fixed Term Income Fund Series XIX – III (368 days) |
10 |
1,00,00,000 |
10 |
3,00,00,000 |
30 |
2.9.4 Details of investments in liquid mutual fund units and certificates of deposit
The balances held in liquid mutual fund units as at March 31, 2016 are as follows:
in ₹ crore
Particulars |
Units |
Amount |
Reliance Money Manage Fund |
32,925 |
7 |
Reliance Liquid Fund Cash Plan |
2 |
– |
ICICI Prudential Liquid – Direct Plan |
16,07,064 |
16 |
Reliance Liquid Fund Treasury Plan |
2,07,283 |
31 |
BSL Cash Manager – Growth |
3,89,089 |
14 |
22,36,363 |
68 |
The balances held in liquid mutual fund units as at March 31, 2015 are as follows:
in ₹ crore
Particulars |
Units |
Amount |
SBI Premier Liquid Fund – Direct Plan Daily Dividend |
9,97,094 |
100 |
IDFC Cash Fund – Direct Plan Daily Dividend |
29,30,197 |
293 |
Reliance Liquid Fund – Treasury Plan – Direct Plan Daily Dividend Option |
9,81,551 |
150 |
Reliance Mutual Fund – Liquid |
4,08,049 |
45 |
Birla Sun Life Mutual Fund – Liquid |
47,37,327 |
48 |
ICICI Liquid Plan – Direct Plan Daily Dividend |
2,05,44,807 |
206 |
3,05,99,025 |
842 |
2.10 Long-term loans and advances
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Unsecured, considered good |
||
Capital advances |
933 |
664 |
Security deposits |
78 |
68 |
Rental deposits |
146 |
47 |
Other loans and advances |
||
Advance income taxes (net of provisions) |
5,230 |
4,089 |
Prepaid expenses |
87 |
7 |
Deferred contract cost |
333 |
– |
Loans and advances to employees |
||
Housing and other loans |
25 |
31 |
6,832 |
4,906 |
|
Unsecured, considered doubtful |
||
Loans and advances to employees |
19 |
12 |
6,851 |
4,918 |
|
Less: Provision for doubtful loans and advances to employees |
19 |
12 |
6,832 |
4,906 |
2.11 Other non-current assets
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Others |
||
Advance to gratuity trust
|
4 |
27 |
Restricted deposits (Refer to Note 2.28) |
62 |
58 |
66 |
85 |
2.12 Trade receivables
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Debts outstanding for a period exceeding six months |
||
Unsecured |
||
Considered doubtful |
200 |
182 |
Less: Provision for doubtful debts |
200 |
182 |
– |
– |
|
Other debts |
||
Unsecured |
||
Considered good |
11,330 |
9,713 |
Considered doubtful |
89 |
184 |
11,419 |
9,897 |
|
Less: Provision for doubtful debts |
89 |
184 |
11,330 |
9,713 |
|
11,330 |
9,713 |
2.13 Cash and cash equivalents
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Cash on hand |
– |
– |
Balances with banks |
||
In current and deposit accounts |
27,420 |
26,195 |
Others |
||
Deposits with financial institutions |
5,277 |
4,172 |
32,697 |
30,367 |
|
Balances with banks in unpaid dividend accounts |
5 |
3 |
Deposit accounts with more than 12 months maturity |
404 |
311 |
Balances with banks held as margin money deposits against guarantees |
342 |
185 |
Cash and cash equivalents as of March 31, 2016 and March 31, 2015 include restricted cash and bank balances of ₹ 492 crore and ₹ 364 crore, respectively. The restrictions are primarily on account of cash and bank balances held by irrevocable trusts controlled by the Company, bank balances held as margin money deposits against guarantees and balances held in unpaid dividend bank accounts.
The deposits maintained by the Group with banks and financial institutions comprise time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.
The details of balances as on Balance Sheet dates with banks are as follows:
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
In current accounts |
||
ANZ Bank, Taiwan |
13 |
4 |
Axis Bank, India |
1 |
– |
Banamex Bank, Mexico |
5 |
10 |
Banamex Bank, Mexico
|
3 |
1 |
Bank of America, Mexico |
21 |
26 |
Bank of America, U.S. |
681 |
716 |
Bank Zachodni WBK S.A, Poland |
3 |
4 |
Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan |
1 |
1 |
Barclays Bank, U.K. |
19 |
10 |
Bank Leumi, Israel (U.S. Dollar account) |
17 |
7 |
Bank Leumi, Israel
|
10 |
15 |
Bank Leumi, Israel (Euro account) |
– |
3 |
China Merchants Bank, China |
8 |
4 |
Citibank N.A, China |
65 |
20 |
Citibank N.A., China
|
72 |
24 |
Citibank N.A., Costa Rica |
2 |
5 |
Citibank N.A., Czech Republic |
– |
6 |
Citibank N.A., Australia |
72 |
25 |
Citibank N.A., Brazil |
5 |
27 |
Citibank N.A., Dubai |
1 |
1 |
Citibank N.A., India |
1 |
7 |
Citibank N.A., Japan |
15 |
20 |
Citibank N.A., New Zealand |
6 |
6 |
Citibank N.A., Portugal |
2 |
– |
Citibank N.A., Singapore |
3 |
2 |
Citibank N.A., South Africa |
5 |
3 |
CitiBank N.A., South Africa
|
1 |
– |
Citibank N.A., Philippines,
|
1 |
1 |
CitiBank N.A., U.S. |
60 |
– |
CitiBank N.A., EEFC
|
– |
2 |
Commerzbank, Germany |
19 |
19 |
Crédit Industriel et Commercial Bank, France |
4 |
1 |
Deutsche Bank, India |
8 |
5 |
Deutsche Bank, Philippines |
13 |
3 |
Deutsche Bank, Philippines
|
1 |
3 |
Deutsche Bank, Poland |
5 |
19 |
Deutsche Bank, Poland (Euro account) |
– |
1 |
Deutsche Bank, EEFC
|
2 |
– |
Deutsche Bank, EEFC (Euro account) |
32 |
3 |
Deutsche Bank, EEFC (Swiss Franc account) |
5 |
5 |
Deutsche Bank, EEFC
|
96 |
8 |
Deutsche Bank, EEFC (United Kingdom Pound Sterling account) |
9 |
5 |
Deutsche Bank, Belgium |
59 |
13 |
Deutsche Bank, Malaysia |
9 |
– |
Deutsche Bank, Czech Republic |
14 |
6 |
Deutsche Bank, Czech Republic
|
1 |
2 |
Deutsche Bank, Czech Republic
|
28 |
20 |
Deutsche Bank, France |
10 |
2 |
Deutsche Bank, Germany |
17 |
8 |
Deutsche Bank, Netherlands |
6 |
2 |
Deutsche Bank, Russia |
2 |
– |
Deutsche Bank, Russia
|
1 |
– |
Deutsche Bank, Singapore |
4 |
5 |
Deutsche Bank, Spain |
1 |
1 |
Deutsche Bank, Switzerland |
1 |
– |
Deutsche Bank, United Kingdom |
170 |
25 |
HSBC Bank, Brazil |
5 |
3 |
HSBC Bank, Hong Kong |
1 |
44 |
ICICI Bank, India |
72 |
30 |
ICICI Bank, EEFC (U.S. Dollar account) |
10 |
14 |
ING Bank, Belgium |
3 |
– |
Nordbanken, Sweden |
15 |
3 |
Punjab National Bank, India |
4 |
7 |
Raiffeisen Bank, Czech Republic |
5 |
– |
Raiffeisen Bank, Romania |
4 |
– |
Royal Bank of Scotland, China |
– |
45 |
Royal Bank of Scotland, China
|
– |
47 |
Royal Bank of Canada, Canada |
78 |
16 |
Santander Bank, Argentina |
– |
2 |
Santander Bank, Spain |
– |
1 |
State Bank of India, India |
8 |
2 |
Silicon Valley Bank, U.S. |
5 |
66 |
Silicon Valley Bank, (Euro account) |
65 |
16 |
Silicon Valley Bank, (United Kingdom Pound Sterling account) |
19 |
5 |
Union Bank of Switzerland AG |
15 |
12 |
Union Bank of Switzerland AG,
|
12 |
4 |
Union Bank of Switzerland AG, (Australian Dollar account) |
2 |
– |
Union Bank of Switzerland AG,
|
28 |
2 |
Union Bank of Switzerland AG,
|
4 |
1 |
Wells Fargo Bank N.A., U.S. |
23 |
38 |
Westpac, Australia |
6 |
6 |
1,994 |
1,470 |
|
In deposit accounts |
||
Allahabad Bank |
– |
200 |
Andhra Bank |
948 |
171 |
Axis Bank |
1,340 |
1,495 |
Bank of Baroda |
– |
2,394 |
Bank of India |
77 |
2,691 |
Canara Bank |
2,115 |
3,006 |
Central Bank of India |
1,538 |
1,383 |
Citibank |
125 |
– |
Corporation Bank |
1,285 |
1,277 |
Deutsche Bank, Poland |
237 |
121 |
Development Bank of Singapore |
– |
35 |
HDFC Bank Ltd. |
2,650 |
2,097 |
ICICI Bank |
4,049 |
3,166 |
IDBI Bank |
1,900 |
856 |
Indian Overseas Bank |
1,250 |
651 |
Indusind Bank |
250 |
75 |
ING Vysya Bank |
– |
100 |
Jammu & Kashmir Bank |
25 |
– |
Kotak Mahindra Bank |
537 |
5 |
National Australia Bank |
1 |
87 |
Oriental Bank of Commerce |
1,967 |
1,580 |
Punjab National Bank |
18 |
592 |
South Indian Bank |
23 |
27 |
State Bank of India |
2,310 |
– |
Syndicate Bank |
1,266 |
407 |
Union Bank of India |
140 |
1,051 |
Vijaya Bank |
304 |
466 |
Yes Bank |
724 |
604 |
25,079 |
24,537 |
|
In unpaid dividend accounts |
||
Axis Bank – Unpaid dividend account |
2 |
– |
HDFC Bank – Unpaid dividend account |
1 |
1 |
ICICI Bank – Unpaid dividend account |
2 |
2 |
5 |
3 |
|
In margin money deposits against guarantees |
||
Canara Bank |
132 |
128 |
Citibank |
3 |
– |
ICICI Bank |
150 |
– |
State Bank of India |
57 |
57 |
342 |
185 |
|
Deposits with financial institutions |
||
HDFC Limited |
5,277 |
4,172 |
5,277 |
4,172 |
|
Total cash and cash equivalents as per Balance Sheet |
32,697 |
30,367 |
2.14 Short-term loans and advances
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Unsecured, considered good |
||
Others |
||
Advances |
||
Prepaid expenses |
201 |
98 |
Deferred contract cost |
48 |
– |
For supply of goods and rendering of services |
110 |
79 |
Withholding and other taxes receivable |
1,799 |
1,364 |
Others |
25 |
9 |
2,183 |
1,550 |
|
Restricted deposits (Refer to Note 2.28) |
1,238 |
1,100 |
Unbilled revenues |
3,029 |
2,845 |
MAT credit entitlement |
– |
– |
Interest accrued but not due |
762 |
444 |
Loans and advances to employees |
||
Salary advances |
229 |
64 |
Housing and other loans |
74 |
158 |
Security deposits |
7 |
4 |
Rental deposits |
13 |
24 |
Mark-to-market forward and options contracts |
116 |
101 |
7,651 |
6,290 |
2.15 Income from software services and products
in ₹ crore
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Income from software services |
60,528 |
51,666 |
Income from software products |
1,913 |
1,653 |
62,441 |
53,319 |
2.16 Other income
in ₹ crore
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Interest received on deposits with banks and others |
2,634 |
2,734 |
Dividend received on investment in mutual fund units |
64 |
158 |
Gain on sale of investments |
3 |
14 |
Gains / (losses) on foreign currency, net |
165 |
480 |
Miscellaneous income, net |
262 |
44 |
3,128 |
3,430 |
2.17 Expenses
in ₹ crore
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Employee benefit expenses |
||
Salaries and bonus including overseas staff expenses |
33,549 |
29,022 |
Contribution to provident and other funds |
660 |
646 |
Employee compensation expense
|
7 |
2 |
Staff welfare |
202 |
132 |
34,418 |
29,802 |
|
Cost of software packages and others |
||
For own use |
740 |
855 |
Third-party items bought for service delivery to clients |
534 |
189 |
1,274 |
1,044 |
|
Other expenses |
||
Office maintenance |
581 |
420 |
Power and fuel |
217 |
219 |
Brand building |
198 |
158 |
Rent |
360 |
309 |
Rates and taxes, excluding taxes on income |
109 |
126 |
Repairs to building |
190 |
99 |
Repairs to plant and machinery |
92 |
76 |
Computer maintenance |
151 |
125 |
Consumables |
41 |
44 |
Insurance charges |
60 |
53 |
Provision for post-sales client support and warranties |
8 |
39 |
Commission to non-whole-time directors |
9 |
9 |
Provision for bad and doubtful debts and advances |
(46) |
175 |
Auditors’ remuneration |
||
Statutory audit fees |
7 |
5 |
Taxation matters |
– |
– |
Other services |
– |
– |
Reimbursement of expenses |
– |
– |
Bank charges and commission |
9 |
12 |
Contributions towards CSR |
||
(Refer to Note 2.30) |
216 |
254 |
Others |
295 |
355 |
2,497 |
2,478 |
2.18 Tax expense
in ₹ crore
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Current tax |
||
Income taxes |
5,315 |
4,835 |
Deferred taxes |
(14) |
76 |
5,301 |
4,911 |
Income tax expense for the years ended March 31, 2016 and March 31, 2015 includes reversals (net of provisions) of ₹ 309 crore and ₹ 158 crore pertaining to earlier periods.
Income taxes
The provision for taxation includes tax liabilities in India on the Company’s global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries as per Indian Income-tax Act, 1961. Infosys’ operations are conducted through Software Technology Parks (‘STPs’) and Special Economic Zones (‘SEZs’). Income from STPs were tax exempt for the first 10 years from the fiscal year in which the unit commenced software development, or March 31, 2011 whichever is earlier. Income from SEZs is fully tax exempt for the first five years, 50% exempt for the next five years and 50% exempt for another five years subject to fulfilling certain conditions.
2.19 Contingent liabilities and commitments (to the extent not provided for)
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Contingent liabilities |
||
Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favor of various government authorities and others |
56 |
43 |
Claims against the Company, not acknowledged as debts (2)
|
284 |
264 |
Commitments |
||
Estimated amount of unexecuted capital contracts (net of advances and deposits) |
1,486 |
1,574 |
Other commitment (1) |
79 |
– |
(1) Uncalled capital pertaining to investment in Vertex Ventures U.S. Fund I, L.P
(2) Claims against the Company not acknowledged as debts for the year ended March 31, 2016 include demand from the Indian income tax authorities for payment of tax of ₹ 4,135 crore (₹ 3,337 crore), including interest of ₹ 1,224 crore (₹ 964 crore) upon completion of their tax assessment for fiscals 2007, 2008, 2009, 2010 and 2011 (for the year ended March 31, 2015 – upon completion of their tax assessment for fiscals 2006, 2007, 2008, 2009 and 2010). These demands were paid to statutory tax authorities which include ₹ 913 crore paid during the year ended March 31, 2016 consequent to demand from tax authorities in India for fiscal 2011 towards denial of certain tax benefits. The Company has filed an appeal with the income tax appellate authorities.
Demand for fiscals 2007, 2008 and 2009 includes disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income-tax Act as 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. Demand for fiscals 2007, 2008, 2009, 2010 and 2011 also includes disallowance of portion of profit earned outside India from the STP units under Section 10A of the Income-tax Act and disallowance of profits earned from SEZ units under Section 10AA of the Income-tax Act. The matters for fiscals 2007, 2008 and 2009 are pending before the Commissioner of Income Tax (Appeals) Bangalore. The matter for fiscals 2010 and 2011 is pending before Honorable Income Tax Appellate Tribunal (ITAT) Bangalore. The Company is contesting the demand and the Management including its tax advisors believes that its position will likely be upheld in the appellate process. The Management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s financial position and results of operations.
The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company’s results of operations or financial condition.
2.20 Derivative instruments
The details in respect of outstanding foreign exchange forward and option contracts are as follows:
Particulars |
As at March 31, |
|||
2016 |
2015 |
|||
in million |
in ₹ crore |
in million |
in ₹ crore |
|
Forward contracts outstanding |
||||
In USD |
510 |
3,379 |
716 |
4,475 |
In Euro |
100 |
750 |
67 |
447 |
In GBP |
65 |
623 |
73 |
671 |
In AUD |
55 |
281 |
98 |
466 |
In CAD |
– |
– |
12 |
59 |
In SGD |
– |
– |
25 |
114 |
In CHF |
25 |
173 |
– |
– |
Options outstanding |
||||
In USD |
125 |
828 |
– |
– |
In Euro |
– |
– |
– |
– |
6,034 |
6,232 |
As of the Balance Sheet date, the Group’s net foreign currency exposures that are not hedged by a derivative instrument or otherwise is ₹ 1,506 crore (₹ 568 crore as at March 31, 2015).
The foreign exchange forward and option contracts mature within 12 months. The derivative financial instruments are analyzed into relevant maturity groupings based on the remaining period as of the Balance Sheet date as follows:
in ₹ crore
Particulars |
As at March 31, |
|
2016 |
2015 |
|
Not later than one month |
1,577 |
1,484 |
Later than one month and not later than three months |
3,420 |
3,781 |
Later than three months and not later than one year |
1,037 |
967 |
6,034 |
6,232 |
The Group recognized a gain on derivative financial instruments of ₹ 29 crore and gain of ₹ 514 crore during the year ended March 31, 2016 and March 31, 2015, respectively, which is included in ‘Other income’.
2.21 Related party transactions
in %
Name of subsidiary |
Country |
Holding as at March 31, |
|
2016 |
2015 |
||
Infosys BPO Limited (Infosys BPO) |
India |
99.98 |
99.98 |
Infosys Technologies (China) Co. Limited (Infosys China) |
China |
100 |
100 |
Infosys Technologies S. de R. L. de C. V.
|
Mexico |
100 |
100 |
Infosys Technologies (Sweden) AB (Infosys Sweden) |
Sweden |
100 |
100 |
Infosys Technologies (Shanghai) Company Limited (Infosys Shanghai) |
China |
100 |
100 |
Infosys Tecnologia do Brasil Ltda. (Infosys Brasil) |
Brazil |
100 |
100 |
Infosys Public Services, Inc. (Infosys Public Services) |
U.S. |
100 |
100 |
Infosys Americas Inc. (Infosys Americas) |
U.S. |
100 |
100 |
Infosys (Czech Republic) Limited s.r.o (formerly Infosys BPO s.r.o) (1) |
Czech Republic |
99.98 |
99.98 |
Infosys Poland Sp. z o.o. (1) (formerly Infosys BPO Poland, Sp z.o.o) |
Poland |
99.98 |
99.98 |
Infosys BPO S. de R.L. de C.V (1)(17) |
Mexico |
– |
– |
Infosys McCamish Systems LLC (1) |
U.S. |
99.98 |
99.98 |
Portland Group Pty. Limited (1) |
Australia |
99.98 |
99.98 |
Portland Procurement Services Pty Ltd (5) |
Australia |
– |
– |
Infosys BPO Americas LLC (1)(16) |
U.S. |
– |
– |
Infosys Technologies (Australia) Pty. Limited (Infosys Australia) (2) |
Australia |
100 |
100 |
EdgeVerve Systems Limited (EdgeVerve) (7) |
India |
100 |
100 |
Infosys Consulting Holding AG (Infosys Lodestone) (formerly Lodestone Holding AG) |
Switzerland |
100 |
100 |
Lodestone Management Consultants Inc. (3) |
U.S. |
100 |
100 |
Infosys Management Consulting Pty Limited (formerly Lodestone Management Consultants Pty. Limited) (3) |
Australia |
100 |
100 |
Infosys Consulting AG (formerly Lodestone Management Consultants AG) (3) |
Switzerland |
100 |
100 |
Lodestone Augmentis AG (2)(6) |
Switzerland |
100 |
100 |
Lodestone GmbH
|
Switzerland |
100 |
100 |
Lodestone Management Consultants (Belgium) S.A. (4) |
Belgium |
99.90 |
99.90 |
Infosys Consulting GmbH (formerly Lodestone Management Consultants GmbH) (3) |
Germany |
100 |
100 |
Infosys Consulting Pte Ltd. (formerly Lodestone Management Consultants Pte Ltd) (3) |
Singapore |
100 |
100 |
Infosys Consulting SAS (formerly Lodestone Management Consultants SAS) (3) |
France |
100 |
100 |
Infosys Consulting s.r.o. (formerly Lodestone Management Consultants s.r.o.) (3) |
Czech Republic |
100 |
100 |
Lodestone Management Consultants GmbH (3) |
Austria |
100 |
100 |
Lodestone Management Consultants Co., Ltd. (3) |
China |
100 |
100 |
Infy Consulting Company Ltd. (formerly Lodestone Management Consultants Ltd.) (3) |
U.K. |
100 |
100 |
Infy Consulting B.V.
|
Netherlands |
100 |
100 |
Infosys Consulting Ltda. (formerly Lodestone Management Consultants Ltda.) (4) |
Brazil |
99.99 |
99.99 |
Infosys Consulting
|
Poland |
100 |
100 |
Lodestone Management Consultants Portugal, Unipessoal, Lda (3) |
Portugal |
100 |
100 |
S.C. Infosys Consulting S.R.L.(formerly SC Lodestone Management Consultants S.R.L.) (3) |
Romania |
100 |
100 |
Infosys Consulting S.R.L. (formerly Lodestone Management Consultants S.R.L.) (3) |
Argentina |
100 |
100 |
Infosys Canada Public Services Ltd.(8) |
Canada |
– |
– |
Infosys Nova Holdings LLC (Infosys Nova) (9) |
U.S. |
100 |
100 |
Panaya Inc. (Panaya)(10) |
U.S. |
100 |
100 |
Panaya Ltd. (11) |
Israel |
100 |
100 |
Panaya GmbH (11) |
Germany |
100 |
100 |
Panaya Pty Ltd. (11) |
Australia |
– |
– |
Panaya Japan Co. Ltd. (11) |
Japan |
100 |
100 |
Skava Systems Pvt. Ltd. (Skava Systems) (12) |
India |
100 |
– |
Kallidus Inc. (Kallidus) (13) |
U.S. |
100 |
– |
Noah Consulting LLC (Noah) (14) |
U.S. |
100 |
– |
Noah Information Management Consulting Inc. (Noah Canada) (15) |
Canada |
100 |
– |
(1) Wholly-owned subsidiary of Infosys BPO
(2) Under liquidation
(3) Wholly-owned subsidiaries of Infosys Consulting Holding AG (formerly Lodestone Holding AG)
(4) Majority-owned and controlled subsidiaries of Infosys Consulting Holding AG (formerly Lodestone Holding AG)
(5) Wholly-owned subsidiary of Portland Group Pty. Limited. Liquidated effective May 14, 2014.
(6) Wholly-owned subsidiary of Infosys Consulting AG (formerly Lodestone Management Consultants AG)
(7) Incorporated effective February 14, 2014 (Refer to Note 2.29.5)
(8) Wholly-owned subsidiary of Infosys Public Services, Inc. Incorporated effective December 19, 2014
(9) Incorporated effective January 23, 2015
(10) On March 5, 2015, Infosys acquired 100% of the voting interest in Panaya Inc.
(Refer to Note 2.29.2)
(11) Wholly-owned subsidiary of Panaya Inc.
(12) On June 2, 2015, Infosys acquired 100% of the voting interest in Skava Systems
(Refer to Note 2.29.3)
(13) On June 2, 2015, Infosys acquired 100% of the voting interest in Kallidus Inc.
(Refer to Note 2.29.3)
(14) On November 16, 2015, Infosys acquired 100% of the membership interests in Noah
(Refer to Note 2.29.4)
(15) Wholly-owned subsidiary of Noah
(16) Incorporated effective November 20, 2015
(17) Liquidated effective March 15, 2016
Infosys has provided guarantee for performance of certain contracts entered into by its subsidiaries.
in %
Name of associate |
Country |
Holding as at March 31, |
|
2016 |
2015 |
||
DWA Nova LLC (1) |
U.S. |
16 |
20 |
(1) Associate of Infosys Nova Holdings LLC. During the year ended March 31, 2015, the Group acquired 20% of the equity interests in DWA Nova LLC for a cash consideration of ₹ 94 crore. The Company has made this investment to form a new company along with Dream Works Animation (DWA). The new company, DWA Nova LLC, will develop and commercialize image generation technology to provide end-to-end digital manufacturing capabilities for companies involved in the design, manufacturing, marketing or distribution of physical consumer products. As of March 31, 2016, Infosys Nova holds 16% of the equity interest in DWA Nova LLC.
List of other related parties
Particulars |
Country |
Nature of relationship |
Infosys Limited Employees’ Gratuity Fund Trust |
India |
Post-employment benefit plan of Infosys |
Infosys Limited Employees’ Provident Fund Trust |
India |
Post-employment benefit plan of Infosys |
Infosys Limited Employees’ Superannuation Fund Trust |
India |
Post-employment benefit plan of Infosys |
Infosys BPO Limited Employees’ Superannuation Fund Trust |
India |
Post-employment benefit plan of Infosys BPO |
Infosys BPO Limited Employees’ Gratuity Fund Trust |
India |
Post-employment benefit plan of Infosys BPO |
EdgeVerve Systems Limited Employees’ Gratuity Fund Trust |
India |
Post-employment benefit plan of EdgeVerve |
EdgeVerve Systems Limited Employees’ Superannuation Fund Trust |
India |
Post-employment benefit plan of EdgeVerve |
Infosys Limited Employees’ Welfare Trust |
India |
Controlled trust |
Infosys Employee Welfare Trust |
India |
Controlled trust |
Infosys Science Foundation |
India |
Controlled trust |
Refer to Notes 2.24, 2.25 and 2.26 for information on transactions with post-employment benefit plans mentioned above.
List of key managerial personnel
Whole-time directors
S. D. Shibulal (resigned effective July 31, 2014) |
Srinath Batni (resigned effective July 31, 2014) |
B. G. Srinivas (resigned effective June 10, 2014) |
U. B. Pravin Rao |
Dr. Vishal Sikka (appointed effective June 14, 2014) |
Non-whole-time directors
N. R. Narayana Murthy (resigned effective October 10, 2014) |
S. Gopalakrishnan (resigned effective October 10, 2014) |
K. V. Kamath (resigned effective June 5, 2015) |
Dr. Omkar Goswami (retired effective December 31, 2014) |
Prof. Jeffrey S. Lehman |
R. Seshasayee |
Ann M. Fudge (retired effective June 14, 2014) |
Ravi Venkatesan |
Kiran Mazumdar-Shaw |
Carol M. Browner (resigned effective November 23, 2015) |
Prof. John W. Etchemendy (appointed effective December 4, 2014) |
Roopa Kudva (appointed effective February 4, 2015) |
Dr. Punita Kumar-Sinha (appointed effective January 14, 2016) |
Executive officers
M. D. Ranganath Chief Financial Officer and Executive Vice President (effective October 12, 2015) |
David D. Kennedy Executive Vice President, General Counsel and Chief Compliance Officer (effective November 1, 2014) |
Rajiv Bansal Chief Financial Officer (till October 12, 2015) |
Srikantan Moorthy Group Head of Human Resource Development (till March 31, 2015) |
Parvatheesam K. Company Secretary (resigned effective January 10, 2015) |
Company secretary
A. G. S. Manikantha (appointed effective June 22, 2015) |
Related party transactions
Transaction with key managerial personnel
The compensation to key managerial personnel, comprising directors and members of executive officers, is as follows:
Particulars |
Year ended March 31, |
|
2016 |
2015 |
|
Salaries and other employee benefits to whole-time directors and members of executive officers (1)(2)(3)(4) |
101 |
30 |
Commission and other benefits to non-executive / independent directors |
10 |
9 |
Total |
111 |
39 |
(1) Includes stock compensation expense of ₹ 7 crore for the year ended March 31, 2016 (₹ 2 crore for the year ended March 31, 2015) to the CEO in line with the compensation plan approved by the shareholders.
(2) Includes payables to the CFO who stepped down w.e.f. October 12, 2015.
(3) Includes payment of variable pay amounting to ₹ 14 crore for the year ended March 31, 2015 to the CEO as decided by the nomination and remuneration committee in line with the compensation plan approved by the shareholders.
(4) Includes provision for variable pay amounting to US $4.33 million (approximately ₹ 29 crore) for the year ended March 31, 2016 to the CEO. The shareholders in the EGM dated July 30, 2014 had approved a variable pay of US $4.18 million (approximately₹ 28 crore at current exchange rate) at a target level and also authorized the Board to alter and vary the terms of remuneration. Accordingly, the Board based on the recommendations of the nominations committee approved on April 15, 2016, US $4.33 million (approximately ₹ 29 crore) as variable pay for the year ended March 31, 2016.
Additional information pursuant to para 2 of general instructions for the preparation of Consolidated financial statements
in ₹ crore
Name of entity |
Net assets |
Share in profit or loss |
||
as % of consolidated net assets |
Amount |
as % of consolidated profit or loss |
Amount |
|
Infosys Ltd. |
89.2 |
57,157 |
96.0 |
15,786 |
Indian Subsidiaries |
||||
Infosys BPO |
5.4 |
3,475 |
3.5 |
570 |
EdgeVerve |
1.8 |
1,152 |
(0.5) |
(90) |
Skava Systems |
0.0 |
15 |
0.0 |
6 |
Foreign Subsidiaries |
||||
Infosys China |
0.2 |
107 |
(0.5) |
(86) |
Infosys Mexico |
0.1 |
96 |
0.1 |
15 |
Infosys Sweden |
(0.1) |
(40) |
(0.1) |
(17) |
Infosys Shanghai |
1.1 |
677 |
0.0 |
(1) |
Infosys Brasil |
0.1 |
90 |
0.2 |
29 |
Infosys Public Services |
0.4 |
271 |
0.7 |
111 |
Infosys Americas |
0.0 |
1 |
0.0 |
– |
Infosys (Czech Republic) Limited s.r.o (formerly Infosys BPO s.r.o) |
0.1 |
50 |
0.0 |
4 |
Infosys BPO (Poland) Sp Z.o.o |
0.6 |
358 |
0.6 |
95 |
Infosys McCamish Systems LLC |
0.1 |
53 |
0.2 |
25 |
Portland Group Pty. Limited |
0.2 |
103 |
0.2 |
31 |
Infosys Australia |
0.1 |
37 |
0.0 |
1 |
Infosys Lodestone |
0.5 |
301 |
0.0 |
6 |
Lodestone Management Consultants Inc. |
0.0 |
18 |
0.1 |
22 |
Lodestone Management Consultants Pty Limited |
0.0 |
(20) |
0.0 |
(6) |
Infosys Consulting AG |
0.1 |
88 |
0.3 |
43 |
Lodestone Augmentis AG |
0.0 |
2 |
0.0 |
– |
Hafner Bauer & Ödman GmbH |
0.0 |
– |
0.0 |
– |
Lodestone Management Consultants (Belgium) S.A. |
0.0 |
(22) |
0.0 |
(4) |
Infosys Consulting GmbH |
0.1 |
33 |
(0.1) |
(11) |
Infosys Consulting Pte Ltd. |
(0.1) |
(45) |
(0.1) |
(9) |
Infosys Consulting SAS |
0.0 |
(9) |
0.0 |
(7) |
Infosys Consulting s.r.o. |
0.0 |
4 |
0.0 |
3 |
Lodestone Management Consultants GmbH |
0.0 |
(2) |
0.0 |
– |
Lodestone Management Consultants Co., Ltd. |
(0.1) |
(33) |
(0.1) |
(19) |
Infosys Consulting Ltd. |
0.1 |
44 |
0.0 |
6 |
Infy Consulting B.V. |
0.0 |
15 |
0.1 |
12 |
Infosys Consulting Ltda. |
0.0 |
23 |
(0.1) |
(10) |
Infosys Consulting Sp. Z o.o. |
0.0 |
7 |