Management's discussion and analysis (Contd.)

5. Deferred tax assets / liabilities

We recorded deferred tax assets of 406 crore as at March 31, 2011 (313 crore as at March 31, 2010) and deferred tax liability of 176 crore as at March 31, 2011 (232 crore as at March 31, 2010).

We assess the likelihood that our deferred tax assets will be recovered from future taxable income. We believe it is more likely than not that we will realize the benefits of these deductible differences.

6. Sundry debtors

Sundry debtors amounted to 4,212 crore (net of provision for doubtful debts amounting to 83 crore) as at March 31, 2011, compared to 3,244 crore (net of provision for doubtful debts amounting to 100 crore) as at March 31, 2010. These debts are considered good and realizable. Debtors are at 16.6% of revenues for the year ended March 31, 2011, compared to 15.3% for the previous year, representing a Days Sales Outstanding (DSO) of 61 days and 56 days for the respective years.

Our largest client constituted 2.7% of sundry debtors as at March 31, 2011. The age profile of debtors is as follows :

in %

Days	2011	2010
0-30	58.3	60.7
31-60	33.0	31.9
61-90	4.3	3.8
Above 91	4.4	3.6
	100.0	100.0

Provisions are generally made for all debtors' outstanding for more than 180 days as also for others, depending on the Management's perception of the risk. The need for provisions is assessed based on various factors, including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors that could affect the customer's ability to settle.

The movement in provisions for doubtful debts during the year is as follows :

in crore

	2011	2010
Opening balance	100	105
Add : Amount provided	3	(1)
Less : Amount written-off	20	4
Closing balance	83	100

Provision for bad and doubtful debts as a percentage of revenue is 0.01% for the year ended March 31, 2011, as against nil for the year ended March 31, 2010.

The unbilled revenues as at March 31, 2011 and March 31, 2010, amounted to 1,158 crore and 789 crore respectively.

7. Cash and cash equivalents

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.

8. Loans and advances

in crore

	2011	2010
Unsecured, considered good
Loans to subsidiary	32	46
Advances
Pre-paid expenses	52	25
Interest accrued but not due	14	14
Advance to Gratuity Fund Trust	–	2
For supply of goods and services	50	5
Withholding and other taxes receivable	516	321
Others	10	13
Sub-total	674	426
Unbilled revenues	1,158	789
Advance income tax	924	641
Loans and advances to employees	126	100
Electricity and other deposits	60	60
Rental deposits	18	13
Deposits with financial institutions and body corporate ⁽¹⁾	1,844	1,781
Mark-to-market gain on forward and options contracts	63	88
Total	4,867	3,898

⁽¹⁾

An amount of

344 crore (

281 crore as at March 31, 2010) 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, 2011, the outstanding loan to Infosys Technologies (China) Company Limited was 23 crore (US$ 5 million), the outstanding loan as at March 31, 2010 was 46 crore (US$ 10 million). During the year, the Company has given a loan of 9 crore (US$ 2 million) to Infosys Tecnologia do Brasil Ltda, which is outstanding as of March 31, 2011. The loan is repayable within five years and six months at the discretion of the subsidiary, for the China and Brazil subsidiaries respectively.

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 :

in crore

	2011	2010
Domestic tax	897	635
Overseas tax	27	6
Total	924	641

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.

9. Current liabilities

in crore

	2011	2010
Sundry creditors
For goods and services	85	96
For accrued salaries and benefits	405	446
For other liabilities
Provision for expenses	537	375
Retention monies	21	66
Withholding and other taxes	292	235
Gratuity obligations – unamortized amount	22	26
Others	8	8
Sub-total	1,370	1,252
Advances received from clients	19	7
Unearned revenue	488	502
Unclaimed dividend	3	2
Total	1,880	1,763

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 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 4 crore was amortized during the year. The unamortized balance as at March 31, 2011 was 22 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.

10. Provisions

in crore

	2011	2010
Proposed dividend	1,149	861
Tax on dividend	187	143
Income taxes	756	719
Unavailed leave	303	239
Post-sales client support and warranties	78	73
Total	2,473	2,035

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 final dividend declared for the year.

Provisions for taxation represent estimated income tax liabilities, both in India and overseas. The details are as follows :

in crore

	2011	2010
Domestic tax	37	37
Overseas tax	719	682
Total	756	719

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 towards likely expenses for providing post-sales client support on fixed-price contracts.