Schedules to the financial statements for the year ended March 31, 2011
16.2. Notes to financial statements
16.2.1. Capital commitments and contingent liabilities
in 
As at March |
As at March |
|
31, 2011 |
31, 2010 |
|
Estimated amount of unexecuted capital contracts (net of advance and deposits) |
65,38,84,579 |
12,39,09,532 |
Forward contracts outstanding : |
||
US$ / INR |
$ 45,500,000 |
$ 39,000,000 |
(Equivalent approximate in |
(202,93,00,000) |
(175,11,00,000) |
GBP / US$ |
£ 5,000,000 |
£ 3,500,000 |
(Equivalent approximate in |
(35,90,00,000) |
(23,78,60,000) |
Claims against the Company not acknowledged as debts |
– |
– |
As of the Balance Sheet date, the Company’s net foreign currency exposure that is not hedged by a derivative instrument or otherwise is Nil (Nil as at March 31, 2010).
16.2.2. Export obligation
The Company has an export obligation towards the Software Technology Parks of India, in respect of duty free capital imports made by it. The remaining export obligation was Nil as at March 31, 2011 and March 31, 2010.
16.2.3. Aggregate expenses
Following are the aggregate amounts incurred on certain specific expenses that are required to be disclosed under Schedule VI to the Companies Act, 1956 :
in
Year ended March 31, |
||
2011 |
2010 |
|
Salaries and ex-gratia including overseas staff expenses |
5,97,37,08,375 |
5,31,24,49,497 |
Staff welfare |
6,06,39,520 |
1,01,75,193 |
Contribution to provident and other funds |
25,36,01,179 |
20,93,40,699 |
Overseas travel expenses |
33,74,68,358 |
36,95,52,094 |
Consumables |
3,18,96,633 |
1,49,08,974 |
Computer maintenance |
98,28,471 |
63,39,320 |
Cost of software for own use |
24,96,48,390 |
17,61,29,896 |
Communication expenses |
32,20,68,274 |
28,05,59,334 |
Consultancy charges |
37,53,55,896 |
37,05,00,833 |
Travel and conveyance |
14,55,20,034 |
15,36,70,643 |
Rent |
40,30,86,167 |
39,62,62,603 |
Printing and stationery |
98,48,499 |
71,25,814 |
Office maintenance |
26,02,72,881 |
24,65,45,292 |
Legal and professional charges |
7,31,14,519 |
5,39,86,094 |
Brand building |
1,94,46,326 |
69,16,780 |
Recruitment and training expenses |
13,26,39,310 |
13,93,06,287 |
Power and fuel |
17,64,29,955 |
17,70,80,350 |
Insurance charges |
7,52,61,859 |
7,01,21,316 |
Rates and taxes |
2,17,97,669 |
1,81,08,947 |
Donations |
– |
59,60,028 |
Auditor’s remuneration : |
||
Audit fees |
23,00,000 |
20,90,000 |
Bank charges and commission |
24,86,576 |
12,51,323 |
Postage and courier |
45,27,131 |
35,86,210 |
Professional membership and seminar participation fees |
8,67,415 |
26,97,990 |
Provision for bad and doubtful debts |
1,27,95,723 |
11,31,118 |
Provision for bad and doubtful loans and advances |
8,21,763 |
8,62,912 |
Marketing expenses |
3,98,18,972 |
63,98,467 |
Other miscellaneous expenses |
2,60,69,992 |
1,14,11,356 |
Total |
9,02,13,19,887 |
8,05,44,69,370 |
16.2.4. Quantitative details
The Company is engaged in providing business process management services. The sale of such services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of services rendered and certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.
16.2.5 Imports (valued on the cost, insurance and freight basis)
in
Year ended March 31, |
||
2011 |
2010 |
|
Capital goods |
6,62,02,041 |
6,09,28,256 |
16.2.6. Expenditure in foreign currency (on payment basis)
in
Year ended March 31, |
||
2011 |
2010 |
|
Salary, legal and professional charges |
1,33,94,27,779 |
1,50,51,89,183 |
Overseas travel expenses and relocation expenses |
38,32,12,225 |
42,60,57,841 |
Bank charges, consultancy and others |
70,08,41,363 |
55,41,30,936 |
Communication |
21,79,26,254 |
14,39,18,243 |
2,64,14,07,621 |
2,62,92,96,203 |
|
16.2.7. Earnings in foreign currency (on receipt basis)
in
Year ended March 31, |
||
2011 |
2010 |
|
From business process management services |
10,90,00,11,448 |
11,05,35,29,120 |
16.2.8. Obligations on long-term non-cancellable operating leases
The lease rentals charged during the year and maximum obligations on long-term non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows :
in
Year ended March 31, |
||
2011 |
2010 |
|
Lease rentals charged during the year |
40,30,86,167 |
39,62,62,603 |
in
As at March |
As at March |
|
31, 2011 |
31, 2010 |
|
Lease obligations : |
||
Within one year of the Balance Sheet date |
8,50,28,088 |
10,89,75,438 |
Due in a period between one year and five years |
8,12,09,462 |
9,35,84,295 |
Later than five years |
– |
– |
The Company has entered into non-cancellable operating lease arrangements for premises with Infosys Technologies Limited and others. The existing operating lease arrangements extend for periods between 36 months and 72 months from their respective dates of inception. The lease rentals paid are included as a component of services purchased from Infosys Technologies Limited (also refer Note 16.2.12 below).
16.2.9. Provision for taxation
The Company benefits from certain significant tax incentives provided to firms rendering business process management services under Indian tax laws. These incentives presently include an exemption from payment of Indian corporate income taxes for a period of ten consecutive years of operation of software development facilities designated as ‘Software Technology Parks’ (the ‘STP Tax Holiday’). The period of the STP Tax Holiday available to such companies is restricted to 10 consecutive years beginning from the financial year when the unit started rendering business process management services or March 31, 2011, whichever is earlier.
The Company also has operations in a Special Economic Zone (SEZ). 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. Pursuant to the amendments in the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carried forward and set off against the future tax liabilities. Accordingly, 63,05,23,541 was carried forward and shown under ‘Loans and Advances’ in the Balance Sheet as of March 31, 2011 and 41,81,66,536 as of March 31, 2010.
During the year ended March 31, 2011 the Company has provided 4,44,75,547 as additional provision for tax and 9,42,08,313 as additional MAT credit entitlement for earlier years.
16.2.10. Cash and bank balances
in
As at March 31, |
As at March 31, |
|
2011 |
2010 |
|
Cash on hand |
92,621 |
84,850 |
Details of balances as on Balance Sheet dates with non-scheduled banks :
in
Balances with non-scheduled banks |
As at March 31, |
As at March 31, |
2011 |
2010 |
|
In current accounts |
||
ICICI Bank, London |
67,23,007 |
1,06,84,997 |
PNC Bank, New Jersey(1) |
2,23,000 |
2,24,500 |
Bank of America, California |
7,26,58,909 |
8,38,42,099 |
Deutsche Bank, Philippines |
1,66,57,487 |
3,81,24,631 |
Royal Bank of Canada, Ontario |
45,90,164 |
13,14,384 |
10,08,52,567 |
13,41,90,611 |
(1) This represents restricted bank balance, in trust account, in accordance with collection agency licensing requirements in US.
Details of balances as on Balance Sheet dates with scheduled banks :
in
Balances with scheduled banks |
As at March 31, |
As at March 31, |
2011 |
2010 |
|
In current accounts |
||
Citibank |
3,20,400 |
12,44,514 |
Deustche Bank |
72,15,811 |
64,51,133 |
Deustche Bank – EEFC account in Euro |
16,34,655 |
55,91,061 |
Deustche Bank – EEFC account in United Kingdom Pound Sterling |
19,59,860 |
50,58,140 |
Deustche Bank – EEFC account in US dollars |
1,87,70,059 |
41,00,082 |
ICICI Bank |
9,77,80,843 |
3,32,11,141 |
ICICI Bank – EEFC account in Euro |
7,95,75,167 |
74,75,628 |
ICICI Bank – EEFC account in United Kingdom Pound Sterling |
41,67,262 |
1,45,79,067 |
ICICI Bank – EEFC account in US dollars |
77,80,267 |
3,06,23,644 |
State Bank of India |
1,64,134 |
59,099 |
21,93,68,458 |
10,83,93,509 |
|
In deposit accounts |
||
Allahabad Bank |
61,50,00,000 |
50,00,00,000 |
Axis Bank Limited |
60,00,00,000 |
– |
Bank of Maharashtra |
18,00,00,000 |
– |
Canara Bank |
75,00,00,000 |
– |
Central Bank of India |
– |
– |
ICICI Bank |
22,00,00,000 |
49,50,40,000 |
IDBI Bank |
54,00,00,000 |
– |
Indian Overseas Bank |
18,00,00,000 |
9,00,00,000 |
Kotak Mahindra Bank |
– |
35,50,00,000 |
Oriental Bank of Commerce |
75,00,00,000 |
– |
State Bank of Hyderabad |
30,00,00,000 |
24,00,00,000 |
State Bank of India |
23,000 |
23,000 |
Syndicate Bank |
4,00,00,000 |
17,50,00,000 |
South Indian Bank Limited |
25,00,00,000 |
– |
Vijaya Bank |
49,00,00,000 |
– |
Yes Bank |
10,00,00,000 |
– |
5,01,50,23,000 |
1,85,50,63,000 |
in
Maximum balances held in non – scheduled banks |
Year ended March 31, |
|
2011 |
2010 |
|
In current accounts : |
||
ICICI Bank, London |
4,08,84,293 |
3,46,60,072 |
PNC Bank, New Jersey |
2,35,350 |
2,52,580 |
Bank of America, California |
18,06,59,160 |
23,89,68,846 |
Deutsche Bank, Philippines |
9,77,16,012 |
12,99,37,963 |
Royal Bank of Canada, Ontario |
1,06,90,435 |
89,77,435 |