Accounting report infosys company

Module: Introduction to Financial Accounting
Accounting Analysis Of The Company
SUBMITTED TO: MRS. DHAARNA SINGH RATHORE
1 | P a g e C a n d i d a t e s : A . I s h a n J u n e j a . B . J u h i P r e m j a n i

I take this opportunity to express gratitude and deep regards to my
guide (respected professor DHAARNA SINGH RATHOD) for her
exemplary guidance, monitoring and constant encouragement
throughout the course of this thesis. The blessings, help and
guidance given by her carry us a long way in the journey of life on
which I am about to embark. I am obliged to staff members of Auro
University, for the valuable information provided by them in their
respective fields. I am grateful for their cooperation during the
period of my review paper. Lastly, I thank the almighty, my parents
and financial accounting module leader for their constant
encouragement without which the review paper would not be
possible.

Serial number Topic Page number
1. Company profile 4
2. Introduction of Infosys 5
3. Summary of the report 6
4. Accounting Principles 7
5. Balance sheet of Infosys 11
6. Capital Structure 15
7. Ratio Analysis 18
8. Accounting Standards 22
9. Accounting Software
used
25
10. Credibility of Infosys 27
11. Conclusion 31
12. References 32

Name of the Company: INFOSYS
Names Age Current Position
N.R Narayana Murthy 69 Founder of the board
Dr. Vishal Sikka 58 Chief executive officer and
managing director
Pravin Rao 49 Chief Operating Officer
R. Seshasayee 46 Chairman of the board
Carol. M browner 51 Independent Director
Prof. John W.
Etchemendy
58 Independent Director
Roopa Kudva 54 Independent Director
Jeffrey Sean Lehman 43 Independent Director
Ravi Venkatesan 48 Independent Director
Kiran Mazumder-Shaw 52 Independent director

Infosys is a global leader in consulting, technology, and
outsourcing and next-generation services. It enables clients in
more than 50 countries to outperform the competition and stay
ahead of the innovation curve. With US$8.83 billion in LTM Q1
FY16 revenues and 179,000+ employees, it is helping
enterprises to renew themselves while also creating new
avenues to generate value. It provides enterprises with
strategic insights on what lies ahead. It helps enterprises to
transform and thrive in a changing world through strategic
consulting, operational leadership, and the co-creation of
breakthrough solutions, including those in mobility,
sustainability, big data, and cloud computing.
Infosys has a growing global presence with more than
179,000+ employees. Globally, it has 85 sales and marketing
offices and 100 development centres as at March 31, 2015.
Milestones
 Board decides to increase the dividend pay-out ratio to up
to 50% of post-tax profits.
 Infosys announces USD 250 million ‘Innovate in India
Fund’ to support Indian start-ups.
 Infosys acquired Panaya, Inc., a leading provider of
automation technology for large scale enterprise software
management.
The Report of Infosys includes:

 Accounting principles followed by INFOSYS.
 Accounting standards followed- and methods under
each standard.
 Accounting software followed (Computer and
accounting) by INFOSYS.
 Capital structure of the company and fluctuations if any
in last five years.
 Personal comments on company’s credibility and
market position.
Accounting Principles:

Accounting Principles are those rules of action adopted by
the accountants universally while recording accounting
transactions. The principles of accounting are classified into
two sub categories which are as follows:
CONCEPTS CONVENTIONS
Business Entity Consistency
Money Measurement Full Disclosure
Going Concern Conservatism
Cost Concept Materiality
Dual Aspect --
Accounting Period --
Matching concept --
Accounting Concepts are the basic assumptions or conditions
upon which the science of accounting is based.
CONCEPTS:

Business Entity:
This concept implies that a business unit is separate and distinct from
the persons who supplies capital to it. Irrespective of the form of
organization, a business unit has got its own individuality as
distinguished from the persons who own or control it. The accounting
equation (i.e. Assets= Liabilities + Capital) is the best example.
Money measurement:
Money is the only practical unit of measurement that can be employed
to achieve homogeneity of financial data, so accounting records have
only those transactions which can be expressed in terms of money.
Example: sales, purchases and so on.
Going Concern:
It is assumed that a business unit has a reasonable expectation of
continuing business at a profit for an indefinite period of time. Due to
this concept the suppliers supply goods on credit and the fixed assets are
recorded at original cost and not at liquidation value; depreciation is
also charged on original cost without concern to realization value.
Cost concept:
Cost concept means that the amount where any asset is bought is to be
written in the financial statement. The marked price is not to be written
here but exact the amount in which the asset is bought should be
written. Hence the assets are recorded at the cost incurred in acquiring
them. It will reduce the scope for subjectivity and personal bias.
Dual Aspect:
This is the basic concept of accounting. According to this concept, every
financial transaction involves a two-fold aspect: yielding of that benefit
and giving of that benefit. So there must be two effects one receiving

effect and the other giving effect. That’s why every debit has a
corresponding credit.
Accounting Period:
The measurement of business income or a loss on a whole life basis is
very simple. But for that purpose the company has to be liquidated to
find the performance. To get out of this, the final accounts are prepared
on periodical basis normal for a year.
Matching:
This concept is based on the accounting period concept. The most
important objective of running a business is to ascertain profit
periodically. The determination of profit of a particular accounting
period is essentially a process of matching the revenue recognized
during the period and the costs to be allocated to the period to obtain
the revenue.
CONVENTIONS:
Accounting conventions:
The term convention denotes circumstances or traditions which guide
the accountants while preparing the accounting statements.
Consistency:
Accounting rules, practices and conventions should be continuously
observed and applied i.e., they should not change from one year to
another. The results of different years will be comparable only when
accounting rules are continuously adhered to from year to year.
Full Disclosure:
According to this convention, all accounting statements should be
honestly prepared and to that end full disclosure of all significant
information should be made. All information which is of material

interest to proprietors, creditors and investors should be disclosed in
accounting statements.
Conservatism:
Conservatism means taking the gloomy view of a situation. It is a policy
of caution or playing safe. With this, the businessmen take into account
all the possible losses which may occur and ignore the possible gains in
future while recording the accounts. The closing stock is valued at
market price or cost price whichever is less.
Materiality:
Whether something should be disclosed in the accounts or not in the
financial statements will depend on whether it is material or not.
Materiality depends on the amount involved in the transaction. For
example, the expense incurred in purchasing a waste basket worth Rs.50
is termed as expense for the year rather than an asset. Customs also
drives the materiality only round figures have to be recorded to make
the figures manageable without affecting the accuracy.
NOTE: The financial statements of INFOSYS and its subsidiaries are
prepared in compliance with the Companies Act, 1956 and generally
accepted accounting principles in India (Indian GAAP). INFOSYS is
following the revised schedule VI as notified by the Ministry of
Corporate Affairs with effect from April 1, 2011, in the financial
statements under discussion.

Balance sheet of Infosys ------------- in Rs. Cr. --------------
Mar ‘ 15 Mar ‘ 14 Mar ‘ 13 Mar ‘ 12 Mar ‘ 11
12 mths 12 mths 12 mths 12 mths 12 mths
Sources of
Fund
Total Share
capital
574.00 286.00 287.00 287.00 287.00
Equity Share
capital
574.00 286.00 287.00 287.00 287.00
Share App
Money
0.00 0.00 0.00 0.00 0.00
Pref. share
capital
0.00 0.00 0.00 0.00 0.00
Reserves 47,494.00 41,806.00 35,772.00 29,470.00 24,214.00
Net worth 48,068.00 42,092.00 36,059.00 29,757.00 24,501.00
Secured
Loans
0.00 0.00 0.00 0.00 0.00
Unsecured
Loans
0.00 0.00 0.00 0.00 0.00
Total Debt 0.00 0.00 0.00 0.00 0.00
Total
Liabilities
48.068.00 42,092.00 36.059.00 29,757.00 24,501.00

12 mths 12 mths 12 mths 12 mths 12 mths
Application
Of funds
Gross Block 12,827.00 10,374.00 8,029.00 4,061.00 4,056.00
Less:
Revaluation
Reserves
0.00 0.00 0.00 0.00 0.00
Less: Accum.
Depreciation
5,480.00 4,642.00 3,576.00 0.00 0.00
Net Block 7,347.00 5,732.00 4,453.00 4,061.00 4,056.00
Capital work
in progress
769.00 954.00 1,135.00 588.00 249.00
Investments 6,857.00 6,717.00 4,344.00 1,409.00 1,325.00
Inventories 0.00 0.00 0.00 0.00 0.00
Sundry
Debtors
8,627.00 7,336.00 6,365.00 5,404.00 4,212.00
Cash and
Bank Bal.
27,722.00 24,100.00 20,401.00 18,057.00 13,665.00
Total Current
Assets
36,349.00 31,436.00 26,766.00 23,461.00 17,877.00
Loans and
advances
10,491.00 7,873.00 6,330.00 6,296.00 5,347.00
Fixed
deposits
0.00 0.00 0.00 0.00 0.00

Total CA,
Loans and
Advances
46,840.00 39,309.00 33,096.00 29,757.00 23,224.00
Deferred
Credit
0.00 0.00 0.00 0.00 0.00
Current
Liabilities
5,700.00 4,503.00 3,181.00 2,454.00 1,880.00
Provisions 8,045.00 6,117.00 3,788.00 3,604.00 2,473.00
Total CL
and
Provisions
13,745.00 10,620.00 6,969.00 6,058.00 4,353.00
Net Current
Assets
33,095.00 28,689.00 26,127.00 23,699.00 18,871.00
Misc.
expenses
0.00 0.00 0.00 0.00 0.00
Total Assets 48,068.00 42,092.00 36,059.00 29,757.00 24,501.00
Contingent
Liabilities
1,461.00 1,020.00 1,693.00 1,024.00 1,016.00
Book Value
(Rs.)
418.54 736.64 627.00 518.21 426.73

Period Instrument Authorized
Capital
Issued
Capital
PAID-UP
From To ( In Rs. ) ( In Rs. ) Shares
(nos)
Face
Value
Capital
2014 2015 Equity
Share
600 574.24 1,14,84,
72,332
5 574.24
2013 2014 Equity
share
300 285.7 57,14,02
,566
5 285.7
2012 2013 Equity
Share
300 287.08 57,41,51
,559
5 287.08
2011 2012 Equity
Share
300 287.08 57,41,51
,559
5 287.08
2010 2011 Equity
Share
300 287.08 57,41,51
,559
5 287.08

0
100
200
300
400
500
600
2014-
15
2013-
14
2012-
13
2011-
12
2010-
11
Authorized Capital
Issued Capital
Different tools which can be considered for determining the
position of the company:

1. Payback Period
2. Accounting Rate of Return
3. Net Present Value
4. Working Capital
5. Cash Flow Forecast
6. Variance Analysis
7. Net Assets
8. Owners’ Equity
9. Depreciation
10. Intangible Assets
11. Stock Valuation
12. Ratio Analysis
a. Gross Profit Margin g. Debtors Days
b. Net Profit Margin h. Creditor Days
c. Current Ratio i. Earnings per Share
d. Quick Ratio j. Dividend Yield
e. Stock Turnover k. Gearing Ratio
f. Return on Investment

Investment
valuation
Ratios
Face Value 5.00 5.00 5.00 5.00 5.00
Dividend per
Share
59.50 63.00 42.00 47.00 60.00
Operation
Profit per
Share (Rs)
121.57 219.23 191.82 175.21 146.55
Net Operating
Profit per
Share (Rs)
411.85 776.00 640.24 544.28 442.13
Bonus in
Equity Capital
96.63 93.58 93.26 93.26 93.26
Profitability
Ratios
Adjusted Cash
Margin (%)
25.01 24.07 25.62 26.53 27.07
Net Profit 25.71 22.99 24.79 27.10 25.38

Margin (%)
Return on
Long Term
Funds (%)
34.08 33.26 34.03 37.28 36.00
Liquidity
Ratios
Current Ratio 3.41 3.70 4.75 4.91 5.34
Quick Ratio 3.38 3.65 4.69 4.88 5.28
Debt Equity
Ratio
0.00 0.00 0.00 0.00 0.00
Management
Efficiency
Ratio
Debtors
turnover Ratio
5.93 6.47 6.25 6.50 6.81
Asset
Turnover Ratio
1.05 1.13 1.12 1.15 1.09
No. of days in
working
capital
233.13 211.55 233.86 256.89 246.45
Profit and Loss
account Ratios
Material Cost
Composition
0.08 0.04 0.05 0.00 0.00
Expenses as
Composition
97.58 97.32 98.21 99.78 94.38

Of Total Sales
Cash Flow
indicator
Ratios
Dividend
Payout Ratio
Net Profit
42.01 35.49 26.45 31.86 53.46
Dividend
Payout Ratio
Cash Profit
39.08 32.03 23.94 29.13 47.96
Earning
Retention
Ratio
56.51 64.51 73.30 66.21 46.54
Cash Earning
Retention Ratio
59.65 67.97 75.86 69.26 52.04
Mar ‘15 Mar ‘ 14 Mar ‘ 13 Mar ‘ 12 Mar ‘ 11
Earnings per
Share
105.91 178.40 158.75 147.50 112.22
Book value 418.54 736.64 627.95 518.21 426.73
According to our observation and understanding, it can be
concluded through the ratio analysis that INFOSYS has been one of
the best companies existing in the corporate sector of our country. It
has forecasted and achieved the success which no Indian company
could even imagine to achieve in the global service.

Where does INFOSYS invest:
• Automation
• Machine Learning
• Artificial Intelligence (AI)
• Analytics & Big Data
• Learning, Collaboration & Design
Number Title
Period beginning on or after
Mandatory for
accounting

AS 1 Disclosure of accounting
policies
1.4.1991
AS 2 (Revised) Valuation of Inventories 1.4.1999
AS 3 (Revised) Cash Flow Statements 1.4.2001
AS 4 (Revised) Contingencies and events
occurring after the balance
sheet Date
1.4.1995
AS 5 (Revised) Prior Period and Extra ordinary
Items and Changes in
Accounting Policies
1.4.1996
AS 6 (Revised) Depreciation Accounting 1.4.1995
AS 7 (Revised) Accounting for Construction
Contracts
1.4.2003
AS 8 Accounting for Research and
Developments
1.4.1991
AS 9 Revenue Recognition 1.4.1991
AS 10 Accounting for Fixed Assets 1.4.1991
AS 11 (Revised
2003)
Accounting for the effect of
Changes in Foreign Rates
1.4.2004
AS 12 Accounting for Government
Grants
1.4.1995
AS 13 Accounting for Investments 1.4.1995
AS 14 Accounting for Amalgamations 1.4.1994
AS 15 (Revised) Employee Benefits 7.12.2006
AS 16 Borrowing Costs 1.4.2000

AS 17 Segment Reporting 1.4.2001
AS 18 Related party Disclosures 1.4.2001
AS 19 Leases 1.4.2001
AS 20 Earnings per Share 1.4.2001
AS 21 Accounting for Investments in
Subsidiaries
1.4.2001
AS 22 Accounting for Taxes on Income 1.4.2001
AS 23 Accounting for Investments in
Associates
1.4.2002
AS 24 Discontinuing Operations 1.4.2004
AS 25 Interim Financial Reporting 1.4.2002
AS 26 Intangible Assets 1.4.2003
AS 27 Financial Reporting of Interest
in Joint Ventures
1.4.2002
AS 28 Impairment of Assets 1.4.2004
AS 29 Provisions, Contingent
Liabilities and Contingent
Assets
1.4.2004
AS 30 Financial Instruments:
Recognition and Measurements
1.4.2011
Presentations
1.4.2011
Disclosures
1.4.2011

*Mandatory:
1. For enterprises whose debts or securities are listed on a
recognised stock exchange in India, and
2. All other commercial or industrial enterprises whose turnover for
the accounting period exceeds Rs 50 crores.
Accounting software describes a type of application
software that records and processes accounting transactions
within functional modules such as accounts payable, accounts
receivable, payroll, and trial balance. It functions as
an accounting information system.
1. Oracle Accounting Software:

Oracle's JD Edwards EnterpriseOne Accounts Receivable
streamlines and accelerates the process of applying receipts,
giving you real-time accounts receivable information. Handle
complex transactions quickly and automatically, minimize the
need for manual processing, improve your customer
relationships, and enhance your organization's ability to
respond to credit and collections issues.
JD Edwards EnterpriseOne Accounts Receivable is part of
Oracle's JD Edwards EnterpriseOne financial management
family of applications.
Advantages of Oracle Software as compared to other
accounting softwares:
1. Workflow tailored to your business processes.

2. Detailed account visibility that allows you to see when
and how customers are paying, and the discounts they
are taking advantage of.
3. Multinational functionality, including multi-currency
processing and international tax management.
4. User-definable collections criteria from a combination
of variables.
5. Simplified handling of nonstandard customer
deductions.
 Share prices, revenue and net profit to support
Infosys:

 Cash flows of last 5 years:
 P & L Data of last 5 years:

 Growth Ratios of last 5 years:
 Standalone Balance sheet to show the increase in total
assets of Infosys:

Finally in conclusion we would like to explain the
future options of Infosys with the help of ‘AIKIDO’
which is launched by the CEO of INFOSYS.
Aim: Next-Generation Services in Design Thinking, Platforms
and Knowledge-Based IT.
Its Services aims at helping their clients address three key
aspects of their business: a non-disruptive renewal and
simplification of their existing landscapes; introduction of new
offerings and business models in a dynamic business
environment, and creating a culture of innovation in their
organizations.

 http://www.infosys.com/about/management-
profiles/Pages/index.aspx
 http://www.infosys.com/investors/reports-
filings/annual-report/Pages/index.aspx
 http://www.moneycontrol.com/financials/infosys/bala
nce-sheet/IT#IT
 http://www.moneycontrol.com/financials/infosys/ratio
s/IT#IT
 http://www.moneycontrol.com/financials/infosys/capit
al-structure/IT#IT
 https://www.google.co.in/search?
q=infosys&biw=1093&bih=534&source=lnms&tbm=isch
&sa=X&ved=0CAgQ_AUoA2oVChMI97Wgq6rWxwIVyQi
OCh19WQQp
 http://www.moneyworks4me.com/indianstocks/large-
cap/it-ites/it-software/infosys/company-info

Accounting report infosys company

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