Schedules to the financial statements for the year ended March 31, 2011
23.2.8. Transactions with key management personnel
Key management personnel comprise directors and members of executive council.
Particulars of remuneration and other benefits paid to key management personnel during the year ended March 31, 2011 and March 31, 2010 have been detailed in Schedule 23.4.
The aggregate managerial remuneration under Section 198 of the Companies Act 1956, to the directors (including managing director) is as follows :
in 
crore
Particulars |
Year ended March 31, |
|
2011 |
2010 |
|
Whole-time directors |
||
Salary |
2 |
2 |
Contribution to provident and other funds |
1 |
– |
Perquisites and incentives |
6 |
7 |
Total remuneration |
9 |
9 |
Non-whole-time directors |
||
Commission |
6 |
6 |
Reimbursement of expenses |
1 |
1 |
Total remuneration |
7 |
7 |
Computation of net profit in accordance with Section 349 of the Companies Act, 1956, and calculation of commission payable to non-whole-time directors are as follows :
in crore
Particulars |
Year ended March 31, |
|
2011 |
2010 |
|
Net profit after tax before exceptional item |
6,443 |
5,755 |
Add : Whole-time director’s remuneration |
9 |
9 |
Commission to non-whole-time directors |
6 |
6 |
Provision for bad and doubtful debts and advances |
3 |
(1) |
Depreciation as per books of accounts |
740 |
807 |
Provision for taxation |
2,378 |
1,717 |
9,579 |
8,293 |
|
Less : Depreciation as envisaged under Section 350 of the Companies Act (1) |
740 |
807 |
Net profit on which commission is payable |
8,839 |
7,486 |
Commission payable to non-whole-time directors |
||
Maximum allowed as per the Companies Act, 1956 at 1% |
88 |
75 |
Maximum approved by the share holders at 1% (1%) |
88 |
75 |
Commission approved by the Board |
6 |
6 |
| Note : | (1) | The Company depreciates fixed assets based on estimated useful lives that are lower than those prescribed in Schedule XIV of the Companies Act, 1956. Accordingly the rates of depreciation used by the Company are higher than the minimum prescribed by Schedule XIV. |
During the year ended March 31, 2011 and March 31, 2010 Infosys BPO has provided for commission of 0.12 crore and 0.12 crore to a non-whole-time director of Infosys.
23.2.9. Research and development expenditure
in crore
Particulars |
Year ended March 31, |
|
2011 |
2010 |
|
Capital |
6 |
3 |
Revenue |
521 |
437 |
23.2.10. Stock option plans
The Company has two Stock Option Plans.
1998 Stock Option Plan (‘the 1998 Plan’)
The 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January 1998, and is for issue of 1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A compensation committee comprising independent members of the Board of Directors administers the 1998 Plan. All options had been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan.
1999 Stock Option Plan (‘the 1999 Plan’)
In fiscal 2000, the Company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in September 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The compensation committee administers the 1999 Plan. Options were issued to employees at an exercise price that is not less than the fair market value. The 1999 Plan lapsed on June 11, 2009, and consequently no further shares will be issued to employees under this plan.
The activity in the 1998 Plan and 1999 Plan during the year ended March 31, 2011 and March 31, 2010 are as follows :
Particulars |
Year ended March 31, |
|
2011 |
2010 |
|
The 1998 Plan |
||
Options outstanding, beginning of the year |
2,42,264 |
9,16,759 |
Less : Exercised |
1,88,675 |
6,14,071 |
Forfeited |
3,519 |
60,424 |
Options outstanding, end of the year |
50,070 |
2,42,264 |
The 1999 Plan |
||
Options outstanding, beginning of the year |
2,04,464 |
9,25,806 |
Less : Exercised |
1,37,692 |
3,81,078 |
Forfeited |
18,052 |
3,40,264 |
Options outstanding, end of the year |
48,720 |
2,04,464 |
The weighted average share price of options exercised under the 1998 Plan during the year ended March 31, 2011 and March 31, 2010 was 2,950 and 2,266 respectively. The weighted average share price of options exercised under the 1999 Plan during the year ended March 31, 2011 and March 31, 2010 was 2,902 and 2,221 respectively.
The following tables summarize information about the 1998 and 1999 share options outstanding as at March 31, 2011 and March 31, 2010 :
Range of exercise prices per share ( |
As at March 31, 2011 |
||
Number of shares arising out of options |
Weighted average remaining contractual life |
Weighted average exercise price |
|
The 1998 Plan |
|||
300 – 700 |
24,680 |
0.73 |
587 |
701 – 1,400 |
25,390 |
0.56 |
777 |
50,070 |
0.65 |
683 |
|
The 1999 Plan |
|||
300 – 700 |
33,759 |
0.65 |
448 |
701 – 2,500 |
14,961 |
1.71 |
2,121 |
48,720 |
0.97 |
962 |
|
Range of exercise prices per share ( |
As at March 31, 2010 |
||
Number of shares arising out of options |
Weighted average remaining contractual life |
Weighted average exercise price |
|
The 1998 Plan |
|||
300 – 700 |
1,74,404 |
0.94 |
551 |
701 – 1,400 |
67,860 |
1.27 |
773 |
2,42,264 |
1.03 |
613 |
|
The 1999 Plan |
|||
300 – 700 |
1,52,171 |
0.91 |
439 |
701 – 2,500 |
52,293 |
1.44 |
2,121 |
2,04,464 |
1.05 |
869 |
|
The aggregate options considered for dilution are set out in note 23.2.19
23.2.11. 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. Infosys’ operations are conducted through Software Technology Parks (‘STPs’) and Special Economic Zones (‘SEZs’). Income from STPs are tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development, or March 31, 2011.
Income from SEZs is fully tax exempt for the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling certain conditions. For fiscal 2008 and 2009, the Company had calculated its tax liability under Minimum Alternate Tax (MAT). The MAT credit can be carried forward and set off against the future tax payable. In fiscal 2010, the Company calculated its tax liability under normal provisions of the Income Tax Act and utilized the brought forward MAT Credit.
As at March 31, 2011, the Company has provided for branch profit tax of 176 crore for its overseas branches, as the Company estimates that these branch profits would be distributed in the foreseeable future.