The bank balances in India include both Rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are maintained to meet the expenditure of the overseas branches and project-related expenditure overseas. The deposit account represents deposits of maturity up to 365 days.
Our treasury policy calls for investing surpluses with highly-rated companies, banks and financial institutions for maturities up to 365 days, as also with liquid mutual funds with a limit on investments in individual entities.
| 2010 | 2009 | |
| Unsecured, considered good | ||
| Loans to subsidiary | 46 | 51 |
| Advances | ||
| Pre-paid expenses | 25 | 27 |
| Interest accrued but not due | 4 | 1 |
| Advance to Gratuity Fund Trust | 2 | – |
| For supply of goods and services | 5 | 6 |
| Withholding and other taxes receivable | 321 | 149 |
| Others | 13 | 4 |
| Sub-total | 416 | 238 |
| Unbilled revenues | 789 | 738 |
| Advance income tax | 641 | 268 |
| MAT credit entitlement | – | 262 |
| Loans and advances to employees | 100 | 105 |
| Electricity and other deposits | 60 | 37 |
| Rental deposits | 13 | 13 |
| Deposits with financial institutions and body corporate(1) | 1,781 | 1,503 |
| Mark-to-market gain on forward and options contracts | 88 | – |
| Total | 3,888 | 3,164 |
| (1) | An amount of Rs. 281 crore (Rs. 253 crore as at March 31, 2009 ) deposited with the Life Insurance Corporation of India to settle leave obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and hence not considered as ‘cash and cash equivalents’. |
As at March 31, 2010, the total outstanding loan to Infosys Technologies (China) Co. Limited was Rs. 46 crore (US $10 million), the total outstanding loan as at March 31, 2009 was Rs. 51 crore (US $10 million). The loan is repayable within five years from the date of disbursement at the discretion of the subsidiary.
The withholding and other taxes receivable represents transaction taxes paid in various domestic and overseas jurisdictions which are recoverable.
Unbilled revenues consist primarily of costs and earnings in excess of billings to the client on fixed-price, and fixed-timeframe contracts.
The details of advance income taxes are as follows :
| 2010 | 2009 | |
| Domestic tax | 635 | 267 |
| Overseas tax | 6 | 1 |
| 641 | 268 |
Our loan schemes provide for personal loans and salary advances that are provided primarily to employees in India who are not executive officers or directors. The loans and advances are recoverable within 24 months.
Electricity and other deposits represent electricity deposits, telephone deposits, insurance deposits and advances of a similar nature. The rent deposits are for buildings taken on lease by us for our software development centers and marketing offices in locations across the world.
Deposits with financial institutions and corporate bodies represent surplus money deployed in the form of short-term deposits.
| 2010 | 2009 | |
| Sundry creditorsa | ||
| For goods and servicesa | 96a | 35a |
| For accrued salaries and benefitsa | 446a | 383a |
| For other liabilitiesa | ||
| Provision for expensesa | 375a | 381a |
| Retention moniesa | 66a | 50a |
| Withholding and other taxesa | 235a | 206a |
| Mark-to-market on options / forward contractsa | –a | 98a |
| Gratuity obligations – unamortized amounta | 26a | 29a |
| Othersa | 8a | 6a |
| Sub-totala | 1,252a | 1,188a |
| Advances received from clientsa | 7a | 5a |
| Unearned revenuea | 502a | 312a |
| Unclaimed dividenda | 2a | 2a |
| Totala | 1,763a | 1,507a |
Sundry creditors for accrued salaries and benefits include the provision for bonus and incentive payable to the staff. Sundry creditors for other liabilities represent amounts accrued for other operational expenses. Retention monies represent monies withheld on contractor payments pending final acceptance of their work. Withholding and other taxes payable represent local taxes payable in various countries in which we operate and the same will be paid in due course.
Effective July 1, 2007, we revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by Rs. 37 crore, which is being amortized on a straight line basis to the Profit and Loss account over ten years, representing the average future service period of employees. An amount of Rs. 3 crore was amortized during the year. The unamortized balance as at March 31, 2010 was Rs. 26 crore.
Advances received from clients represent monies received for the delivery of future services. Unearned revenue consists primarily of advance client billing on fixed-price, and fixed-timeframe contracts for which related costs were not yet incurred. Unclaimed dividends represent dividends paid, but not encashed by shareholders, and are represented by a bank balance of the equivalent amount.
| 2010 | 2009 | |
| Proposed dividenda | 861a | 773a |
| Tax on dividenda | 143a | 131a |
| Income taxesa | 719a | 575a |
| Unavailed leavea | 239a | 244a |
| Post-sales client support and warrantiesa | 73a | 75a |
| Totala | 2,035a | 1,798a |
Proposed dividend represents the final dividend we recommended to our shareholders. Upon approval by our shareholders, this will be paid after the Annual General Meeting. Provision for tax on dividend denotes taxes payable on dividends declared for the year.
Provisions for taxation represent estimated income tax liabilities, both in India and overseas. The details are as follows :
| 2010 | 2009 | |
| Domestic taxa | 37a | 91a |
| Overseas taxa | 682a | 484a |
| Totala | 719a | 575a |
Provisions for unavailed leave is toward our liability for leave encashment valued on an actuarial basis. The provision for post-sales client support and warranties is toward likely expenses for providing post-sales client support on fixed-price contracts.
Of the total revenues for the years ended March 31, 2010 and March 31, 2009, approximately 98.7% were derived from our overseas operations whereas 1.3% were derived from domestic operations.
Our revenues are generated primarily on fixed-timeframe or time-and-material basis. Revenue from software services on fixed-price and fixed-timeframe contracts are recognized as per the proportionate-completion method. On time-and-material contracts, revenue is recognized as the related services rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in multiple arrangement contracts, where revenue is recognized as per the proportionate-completion method.
The segmentation of software services by project type is as follows :
| 2010 | 2009 | |
| Fixed-pricea | 40.8a | 37.6a |
| Time-and-materiala | 59.2a | 62.4a |
| Totala | 100.0a | 100.0a |
Our revenues are also segmented into onsite and offshore revenues. Onsite revenues are for those services which are performed at our client locations or at our global development centers, as part of software projects, while offshore revenues are for services which are performed at our software development centers located in India.
The segmentation of revenues by location (including product revenue) is as follows :
| 2010 | 2009 | |
| Onsitea | 48.7a | 49.3a |
| Offshorea | 51.3a | 50.7a |
| Totala | 100.0a | 100.0a |
The services performed onsite typically generate higher revenues per-capita, but at lower gross margins in percentage as compared to the services performed at our own facilities. Therefore, any increase in the onsite effort impacts our margins.
The details of effort mix for software services and products in person-months are as follows :
| 2010 | 2009 | |
| Onsitea | 26.1a | 28.4a |
| Offshorea | 73.9a | 71.6a |
| Totala | 100.0a | 100.0a |
The growth in software services and product revenues is due to an all-round growth in various segments of the business mix and is mainly due to growth in business volumes.
The details of the same are as follows :
| 2010 | 2009 | |
| Income (in Rs. crore)a | ||
| Software servicesa | 20,215a | 19,416a |
| Software productsa | 925a | 848a |
| Totala | 21,140a | 20,264a |
| Person-monthsa | ||
| Software servicesa | ||
| Onsitea | 1,75,581a | 1,79,329a |
| Offshorea | 4,42,336a | 4,07,977a |
| Billed-totala | 6,17,917a | 5,87,306a |
| Software productsa | 54,772a | 44,934a |
| Non-billablea | 2,31,186a | 2,19,351a |
| Traininga | 92,081a | 62,019a |
| Sub-totala | 9,95,956a | 9,13,610a |
| Supporta | 54,032a | 46,779a |
| Totala | 10,49,988a | 960,389a |
| Increase / (Decrease) in billed person-monthsa | ||
| Onsitea | (3,748)a | 15,664a |
| % changea | (2.1)a | 9.6a |
| Offshorea | 34,359a | 55,654a |
| % changea | 8.4a | 15.8a |
| Totala | 30,611a | 71,318a |
| % changea | 5.2a | 13.8a |
| Support / total (%)a | 5.1a | 4.9a |
During the year, the volume of software services grew by 5.2% compared to 13.8% in the previous year. The onsite and offshore volume growth were (2.1)% and 8.4% respectively during the year, compared to 9.6% and 15.8% in the previous year. In US Dollar terms, onsite per capita revenues increased by 3.4% during the year, offshore per capita revenues decreased by 4.7% and blended per capita revenues decreased by 2.8%. During the previous year, onsite per capita revenues decreased by 1.5%, offshore per capita revenues decreased by 1.4% and blended per capita revenues decreased by 2.6% in US Dollar terms.
The revenues from software products grew 9.1% compared to 42% in the previous year. Of the software products revenue, 82.1% came from exports compared to 75.7% in the previous year.