accounting report infosys company

Module: Introduction to Financial Accounting

Accounting Analysis Of The CompanySUBMITTED 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 0.00 0.00 0.00 0.00 0.00



Money

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


300 287.08 57,41,51,559

5 287.08


300 287.08 57,41,51,559

5 287.08


300 287.08 57,41,51,559

5 287.08



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 Margin (%)

25.71 22.99 24.79 27.10 25.38

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 Of Total Sales

97.58 97.32 98.21 99.78 94.38

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

AS 31 Financial Instruments: Presentations

1.4.2011

AS 32 Financial Instruments: 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/ balance-sheet/IT#IT

http://www.moneycontrol.com/financials/infosys/ ratios/IT#IT

http://www.moneycontrol.com/financials/infosys/ capital-structure/IT#IT

https://www.google.co.in/search? q=infosys&biw=1093&bih=534&source=lnms&tbm=isch&sa=X&ved=0CAgQ_AUoA2oVChMI97Wgq6rWxwIVyQiOCh19WQQp

http://www.moneyworks4me.com/indianstocks/large- cap/it-ites/it-software/infosys/company-info


http://www.moneyworks4me.com/indianstocks/large-cap/it-ites/it-software/infosys/company-info

http://www.moneyworks4me.com/indianstocks/large-cap/it-ites/it-software/infosys/company-info

https://www.google.co.in/search?q=infosys&biw=1093&bih=534&source=lnms&tbm=isch&sa=X&ved=0CAgQ_AUoA2oVChMI97Wgq6rWxwIVyQiOCh19WQQp



http://www.moneycontrol.com/financials/infosys/capital-structure/IT#IT

http://www.moneycontrol.com/financials/infosys/capital-structure/IT#IT

http://www.moneycontrol.com/financials/infosys/ratios/IT#IT

http://www.moneycontrol.com/financials/infosys/ratios/IT#IT

http://www.moneycontrol.com/financials/infosys/balance-sheet/IT#IT

http://www.moneycontrol.com/financials/infosys/balance-sheet/IT#IT

http://www.infosys.com/investors/reports-filings/annual-report/Pages/index.aspx

http://www.infosys.com/investors/reports-filings/annual-report/Pages/index.aspx

http://www.infosys.com/about/management-profiles/Pages/index.aspx

http://www.infosys.com/about/management-profiles/Pages/index.aspx

accounting report infosys company

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