Infinite Computer Solutions India Ltd

INFINITE COMPUTER SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-2012 MANAGEMENT DISCUSSION AND ANALYSIS Overview: The consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, the consolidated financial statements prescribed by the Companies (Accounting Standards) Rules, 2006 and in accordance with the Indian Generally Accepted Accounting Principles (GAAP), and the provisions of the Companies Act, 1956, to the extent applicable. Our management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner, the form and substance of transactions and reasonably present our state of affairs, profits and cash flows for the year. Synopsis Infinite Computer Solutions (India) Limited is a global service provider of application management, infrastructure management, product engineering and mobility solutions, with a focus on telecom, energy and utilities, media and content, healthcare and BFSI industries. Our services are spread across application management services, packaged application services, independent validation and verification, product development and support, to higher value-added offerings, including product engineering and mobility and messaging products and solutions. With telecom being our key vertical, we aim to be a dominant player in the market to provide services to the telecom and media industry, providing IT services to service providers, equipment manufacturers and software vendors. Our footprint spans several countries in four continents offering onsite, offsite, and near-shore capabilities in major international markets. We established our presence in most of the large telecom and IT services markets globally, with offices at multiple locations in the U.S, the U.K. India, Singapore, Malaysia, and China. We recorded a revenue growth (in USD terms) of 14% in FY 2012, a volatile year for the IT sector. The year also witnessed the Company crossing the Rs 10,000 million annual revenue milestone. Revenues of Rs 10,558 million was achieved despite a few setbacks which included an unforeseen decline in contribution from our top client and the transfer of a BOT project for another leading client. However, we overcame these reversals owing to a distinguished client base. The latter was further enhanced in FY 2012 by addinglO large global corporations, who have the potential to be US $10 million plus accounts for us over the next couple of years. These clients, together with our existing clients which are fairly, diversified, and large provides us with a very strong platform for continued growth and will reduce the client concentration risk going ahead. The operating margin for FY 2012 was 17.35%, a marginal increase compared to the previous year. Economic Environment & Industry Outlook Despite widespread macroeconomic instability and a volatile financial scenario during 2011, worldwide IT spending exceeded USD 1.7 trillion, recording a steady annual growth of 5.4%. Software products, IT and BPO services continued to lead, accounting for over USD 1 trillion - 63% of the total spend. In 2011, global IT services spend grew to USD 605 billion, an annual growth of 3.2%, a marginal decline from 3.4% recorded in 2010. The year saw global sourcing grow twice as fast as global technology spend at 12%, suggesting a steady widening of the boundaries of outsourcing. Within the global sourcing industry, India was able to increase its market share from 51% in 2009 to 58% in 2011, highlighting the country's continued competitiveness and the effectiveness of India-based providers in enhancing their value-appeal to clients. This resulted in the Indian IT-BPO sector recording aggregate revenues of USD 100 billion in FY 2012, an annual growth of 14%. Software and services revenues, comprising nearly 87% of the total industry revenue grew by 15% over FY 2011. Within software and services exports, IT services accounts for 58%, BPO nearly 23% and engineering R&D and software products account for 19%. Exports, excluding hardware, at USD 69 billion grew by 16% and continue to be the mainstay for the sector. Global GDP, after growing by 2.7 per cent in 2011, is expected to grow by 2.5 per cent in 2012 owing to uncertainties on the macroeconomic front. This coupled with other geographical factors is expected to slow the growth rate of worldwide IT spending in 2012. Gartner cut its forecast for 2012 worldwide IT spending growth to 3.7 percent from its earlier estimate of 4.6 percent growth. The forecast was further reduced to 2.5% due to the recent strengthening in the value of the US dollar. IT services is expected to grow by 4.3% in 2012, and 4.7% in 2013 as organisations use IT to improve operational efficiencies and enhance competitive advantage. The IT outsourcing market is set to grow at a CAGR of about 8% during 2011 to 2013, while BPO off shoring is expected to grow over 7% during the same period. The growth in the global outsourcing market was buoyed by buyer dissatisfaction with large-size contracting as well as by suppliers expanding their capabilities and collaborating to deliver outcomes. Nasscom's forecast for growth of IT-BPO exports in FY 2013 is 11-14%. Industry experts also predicted a transition to accelerate spending post the slowdown on the back of a shift from older technologies to newer technologies such as analytics, mobile devices, software-as-a-service-based collaborative process apps, among others. Nasscom reckons that technology changes coupled with socio-economic issues and better economic prospects will present a new set of opportunities, which can propel industry revenues to USD 225 billion by 2020. We strongly support the notion that the future of the technology services industry will extend beyond services - it will be a combination of services, solutions and platforms. Hence, the business model is expected to transform from a traditional human capital-intensive model to a software capital-intensive model over time. Consequently, IP-based solutions and investments in IP-based offerings will become critical to the competitiveness of the Indian IT services industry. Accordingly, the focus will need to be on investing in skills development, especially around software product engineering, business analytics, domain (industry) expertise, consulting, and programme management capabilities. Business strategy/technology focus/services portfolio Our focus is not merely on revenue and margin growth, but also on transforming our service portfolio from traditional IT services to more higher value-added services like infrastructure management, product engineering and R&D, mobility and messaging. There is also an emphasis on moving away from time and material work to doing more business using fixed bids and revenue share models. We believe that enhanced presence in niche business segments and superior client mining strategies will enable us to not only grow but also overcome issues of high client concentration and delayed project ramp-ups. Moreover, presence in niche business segments help in complex and innovative deal wins, which in-turn could help in faster growth as well as higher customer recall. IT is now a key element of every business and customers are increasingly looking at how IT can be used to increase productivity. Mobile-enabling applications is an important aspect in fulfilling this need. Customers are looking for a system integrator for complete implementation in the mobile application space. We are currently active on the Enterprise Messaging space. We possess a robust platform that has been in the market place for and as of today it supports about 130 million subscribers and close to about 700 billion messages per year. The initial services were focused on one-way and two-way text-based messaging providing wireless customers or employees, alerts and requesting confirmation of appointments and authorisation for financial transactions. These services are now evolving into more complex and more valuable mobile business communications involving instant messaging chats and services that contribute to improving revenue and will command higher fees. In FY12, we launched next-generation mobility and messaging products into the market place. We also launched PMC which is the Personal Messaging Cloud. All of these platforms and products will deliver a much higher user experience in terms of messaging. Our R&D and product engineering services are at present focused on the telecom vertical, which is undergoing significant changes across the value chain. Unlike conventional R&D, our value proposition is to take over retiring end-of-life products, support these products, and extend the shelf life of the product by adding functionality and features. The advantage of this model is that while we get a share of the revenue that a client is generating from the product, the client is able to stretch the R&D budget especially in the prevailing scenario. Our IMS offerings revolve around our expertise in remote infrastructure and network management, enhancing data centre and IT security services, production support and end-user computing services. Our focus is towards building capabilities that enable us to offer end-to-end IMS as a Managed Service Offering. The Build Operate Transfer model that we use helps our customers to leverage our infrastructure, technology, people and process to save huge investments. This model works efficiently for customers, as they can focus on their business functions and leave the technology to us. Our differentiation is in our understanding of the customers strategy or vision and partnering with them to ensure their success with accountability for their IT. Risks and concerns The rhetoric of protectionism in the US and Europe invariably comes to the fore in troubled times, threatening to narrow the limits of outsourcing and marring our prospects as well as issuing visas. Though the impact of such discourse in the past has not been significant, fallout of such negative sentiments, increased hiring outside India, could dent our competitive advantage and impact margins. Our progress is also dependant on the movement of the domestic currency, which has depreciated in the last year. The rupee witnessed a steep depreciation in recent times which is a reversal of the pattern seen in early 2012. While a fall in the rupee will enhance margins, currency volatility poses a significant challenge and could have an impact on the hedges taken by us. The continuing uncertainties in the global economy, especially in the euro zone, could have an impact on the IT spend by corporates, leading to concerns on demand and in some cases, pricing. The demand scenario has an inevitable and immediate impact on talent availability and retention. There is also a direct correlation with wage increases, which can affect operating margins. There could be dilution in differentiation if competitors develop similar capabilities or our inability to introduce higher-value service offerings and innovative business models. Such a dilution will lead to growth constraints and pressure on margins. Our work with governmental agencies exposes us to additional operational and financial risks. Financial performance The financial performance discussed below is based on the consolidated financial results for the year ended March 31, 2012. Share capital The authorised share capital of the Company is Rs 500 million comprising 50 million equity shares of Rs 10 each. The paid up share capital stands at Rs 425.6 million as on March 31, 2012. Reserves and surplus General reserve General reserve stands at Rs 158.2 million on March 31, 2012 compared with Rs 63.5 million in the previous year. The increase in general reserves over the previous year is on account of mandatory transfer of profits to reserves on declaration of interim and final dividend that was made during the current year. Capital redemption reserve Capital redemption reserve stands at Rs 15 million on March 31, 2012 compared with Rs 1 million in the previous year. Profit and loss account The balance retained in the profit and loss account as of March 31, 2012 is Rs 3,534.5 million compared with Rs 2,857 million as of March 31, 2011. Forex translation reserve The balance retained in the forex translation reserve as of March 31, 2012 is Rs 280.3 million compared with Rs (23.1) million as of March 31, 2011. Shareholder's fund The total shareholders' funds increased to Rs 5,089.4 million as of March 31, 2012 from Rs 4,162.8 million as of the previous year. The book value per share increased to Rs 119.58 as of March 31, 2012 as compared with Rs 94.70 as of March 31, 2011. Loan Funds Our loan funds decreased to Rs 308.5 million as of March 31, 2012 from Rs 476.9 million as of previous year. This reduction is mainly due to decrease in long-term borrowings to Rs 43.5 million as of March 31, 2012 from Rs 269.5 million as of the previous year. We repaid Rs 1.8 million of our other long-term liabilities during the year, thereby, bringing the outstanding amount as on March 31, 2011 to nil. Deferred tax liabilities Deferred tax liabilities as on March 31, 2012 were Rs 229.4 million as compared with Rs 161.2 million as of March 31, 2011. Current liabilities and provisions Current liabilities and provisions were Rs 4,767.3 million as of March 31, 2012 as compared with Rs 3,622.2 million as of March 31, 2011. Our working capital related borrowings increased to Rs 547.8 million as of March 31, 2012 as compared with Rs 246.1 million in the previous year. Trade payables increased to Rs 1,256.4 million from 1,145.7 million in the previous year. Other current liabilities reduced to Rs 552.8 million from Rs 641.8 million in the previous year. Fixed assets The movement in fixed assets is shown in the table below: Assets Gross Block as on Gross Block as on March 31, 2012 March 31, 2011 Land 110.6 83.2 Buildings 165.5 163.4 Computers 329.2 226.3 Office equipment 119.0 95.2 Furniture and fixtures 129.4 106.8 Vehicles 38.5 44.3 Leasehold improvements 60.8 10.0 IT and networking equipment 550.6 438.4 Plant and machinery 38.8 38.8 Electrical installations 56.7 41.8 Intangible assets - software 1,160.3 923.1 Total 2,759.4 2,171.3 The net block of fixed assets, capital work in progress and intangible asset under development increased to Rs 2,153.4 million from Rs 1,739.8 million as on March 31, 2011. This increase is due to an increase of Rs 272.9 millions in tangible and intangible assets, a reduction of Rs 34.1 million in capital work in progress and an increase of Rs 174.8 million in intangible assets under development. Goodwill Opening goodwill as shown in the Consolidated Balance Sheet was Rs 541.9 million in respect of acquisition of 100% stock of Comnet International Company by Infinite Computer Solutions Inc. which increased to Rs 646.0 million as on March 31, 2012, an increase of Rs 104.1 million over the previous year's balance. Thk inrrpacp k attrihi i+ahlo tn pyrhannp Hifftarpnrp Investments The Company has made several strategic investments in a number of wholly- owned 100% subsidiaries, the details of which are as per the table below. Sl. Name of the subsidiary Country of Percentage of Ownership No. company Incorporation Interest as at 31st March 31st March 2012 2011 1 Infinite Computer Solutions Pte. Ltd. Singapore 100% 100% 2 Infinite Computer Solutions Inc. USA 100% 100% 3 Infinite Computer Solutions Sdn, Bhd Malaysia 100% 100% 4 Infinite Computer Solutions (Shanghai) Co. Ltd China 100% 100% 5 Infinite Computer Solutions Ltd United Kingdom 100% 100% 6 Comnet International Company USA 100% 100% Subsidiary Subsidiary of Sr. No.2 of Sr. No.2 7 India Comnet International Pvt Ltd India 100% 100% Subsidiary Subsidiary of Sr. No.6 of Sr. No.6 8 Infinite Infosoft Services Pvt. Ltd. India 100% 100% 9 Infinite Data Systems Pvt. Ltd. India 100% 100% 10 Infinite Data Systems UK Ltd. UK 100% 100% Subsidiary Subsidiary of Sr.no.9 of Sr. no.9 11 Infinite Convergence Solutions Inc. USA 100% 100% 12 Infinite Infocomplex Pvt. Ltd. India 100% 100% 13 Infinite Computer UAE Incorporated Incorporated Solutions FZE on June 24, on June 24, 2010. 2010. Investment Investment is yet is yet to be made to be made 14 Infinite Infoworld Ltd. India 100% 100% 15 Infinite Infopark Ltd. India 100% - (Incorporated on December 2011) Infinite Computer Solution Inc., USA, has a contingent liability of USD 325,000 with respect to the Investment in Servesharp Inc.in accordance with the 'Second Closing' clause of the share purchase agreement, this amount shall be payable subject to Servesharp Inc meeting the criteria set forth in the said agreement. As of the balance sheet date, it cannot be ascertained or estimated with reasonable accuracy whether Servesharp Inc would or would not meet the set criteria. Considering the nature of the transaction, this liability has not been included in the value of investment in Servesharp Inc. Consequently, this liability is being disclosed as a contingency, via this note. During 2011 -12, Infinite Infopark Ltd. was incorporated, which is a wholly-owned subsidiary of Infinite Computer Solutions (India) Limited. Deferred tax asset Deferred tax asset as on March 31, 2012 was Rs 200.4 million as compared with Rs 135.2 million as of March 31, 2011. Current assets Trade receivables Trade receivables decreased to Rs 2,322.2 million after provision for doubtful debts amounting to Rs 50.9 million as of March 31, 2012 from Rs 2,338.8 million after provision for doubtful debts amounting to Rs 37.7 million as of March 31, 2011. Included in the debtors are those pertaining to pass-through revenue-Rs 753 million and Rs 889.1 million for the year ended March 31, 2012 and 2011 respectively. The Days Sales Outstanding (DSO) as appears in the financials is 135 days for the year ended March 31, 2012 as compared with 137 days for the previous year. The DSO of the core business (excluding pass through) reduced from 102 days in FY11 to 98 in FY12. Cash and cash equivalents The cash and cash equivalents at the end of March 31, 2012 are Rs 1,506 million as compared with Rs 834.4 million as on March 31, 2011. The bank balances in India include both rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are of the Company's overseas subsidiaries, its branches and an overseas collection account. Short-term loans and advances Loans and advances as on March 31, 2012 were Rs 1,026.6 million as compared with Rs 1,141.9 million as on March 31, 2011. The decrease is mainly due to the reduction in advance to vendors. Other current assets Other current assets increased to Rs 1,984.3 million as of March 31, 2012 from Rs 1,235.4 million on March 31, 2011. The increase in this is mainly due to increase in unbilled receivables. Unbilled receivables pertain to services provided to customers during the financial year but have been invoiced after March 31, 2012. The unbilled receivables as on March 31, 2012 were Rs 1,940.9 million as compared with Rs 1,207.9 million for the previous year. Consolidated revenue The financial year 2012 was a great one for Infinite as the Company made remarkable progress in its business performance. The year saw Infinite grow its topline by 19.5% in INR terms to Rs 10,558 million and about 14% in USD terms to USD 220.7 million. We classified our revenues into four geographic segments comprising the Americas, Europe, Asia Pacific and domestic (India). The geographic breakdown of revenues contained in the following table, is based on the location of the specific client entity for which the project has been executed, irrespective of the location where the invoice is raised or whether the work is performed onsite or from our offshore delivery centers in India. Geographical location 31st March 2012 31st March 2011 Domestic 1,330.4 662.9 Americas 8,085.3 7,313.9 Europe 442.2 543.8 APAC 700.2 312.2 Our revenues are generated from time and material, fixed price and revenue share projects. On time-and-material contracts revenues are recognised as the related services are rendered. Revenue from fixed price contracts is recognized as per the proportionate completion method. Revenue from revenue share contracts is recognised as and when it accrues. The segmentation of software services by project type is as follows: Project Type FY 2012 FY 2011 Fixed price/SOW 27.1% 35.0% Revenue share 16.5% 14.5% Time and material 56.4% 50.5% Our revenues are also segmented into onsite and offshore revenues. Onsite revenues are those where the services are provided at our clients locations while offshore revenues are those where the services are provided from our software development centers located in India. This segmentation is as follows: Revenue Mix FY 2012 FY 2011 Onsite 64.8% 67.8% Offshore/domestic 35.2% 32.2% The services performed onsite typically generate higher revenues per- capita, but at a lower gross margin in percentage as compared with services performed at our own facilities. Therefore, any increase in onsite effort impacts our margins. The growth in revenue is due to an all-round growth in various segments of the business mix and is mainly due to growth in business volumes. Other income Other income for the year ended March 31, 2012 is Rs 124.1 million and increased 100% over the previous year's income of Rs 61.9 million. Out this, an increase of Rs 42.8 million is on account of an exchange gain in the current year. Another reason for this increase is the increase in interest and dividend income over the previous year of Rs 18.3million. Expenses The overall expenditure of the Company grew by 20.39% over the last year to Rs 9,075.3 million. The expenses mainly comprise manpower cost, other expenses, financial cost and depreciation. The increase is due to increase in business volume, increase in number of office locations in India and overseas and overall growth in business activity. Manpower related expenses Manpower related expenses include salaries, wages and bonus, contribution to provident fund and other funds, staff welfare costs and expenses towards contractual services. These expenses grew by 16.68% in the fiscal year 2012 over fiscal year 2011. General and administration expenses The administration and other expenses saw an increase of 30.2% in fiscal 2012. Increase in depreciation is mainly due to increase in investment in infrastructure and equipment, as well as amortisation of software to service our growing business. The Company incurred an interest expense of Rs 18.7 million in fiscal 2012 on borrowings as compared with Rs 18.4 million in fiscal 2011. EBITDA margins This period saw our EBITDA rise by 24.08% in INR terms to Rs 1,834.9 million and by 18.10% in USD terms to USD 38.3 million. EBITDA margins as a percentage of revenue was 17.39% in fiscal 2012 as compared to 16.74% in fiscal 2011. Profit before Tax Profit before tax, prior period and extraordinary items increased by 18.47% to Rs 1,606.8 million in fiscal 2012 from Rs 1,356.3 million in fiscal 2011. Profit before tax as a percentage of revenue was 15.22% in fiscal 2012 as compared with 15.36% in fiscal 2011. Taxes The provision of current tax and deferred tax for the year ended March 31, 2012 is Rs 399.8 million as compared with Rs 284.5 million in the previous year. The effective tax rate in these years is 24.88% and 20.97% respectively. Net profit The profit after tax (PAT), for the year ended March 31, 2011 was up by 12.61% in INR terms to Rs 1,207 million and by 7.40% in USD terms to USD 25.2 million. Profit after tax as a percentage of revenue was 11.44% in fiscal 2012 and 12.13% fiscal 2011.

INFINITE COMPUTER SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS Overview The financial statements have been prepared in compliance with the requirements of the Companies Act 1956, guidelines issued by Securities & Exchange Board of India (SEBI). Our management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner, the form and substance of transactions and reasonably present our state of affairs, profits and cash flows for the year. Synopsis Established in 1999 and listed in 2010, Infinite has come a long way in the past decade, both in terms of establishing sound fundamentals as well as being applauded for our client focus and management. With an exemplary clientele, comprising of Fortune 500 and Global 1000 companies, our focus on blue chip companies has paid off and we have been able to acquire, retain as well as grow these large accounts consistently over time. Despite the industry challenges and the economic downturn over the past two years, Infinite has shown a significant jump in both its top-line and bottom-line growth. Even amidst the slowdown, Infinite's revenues from USA grew at a two-year CAGR of 43% during FY08-FY10. For FY 2011, we have posted a consolidated annual revenue growth in rupee terms of 33 % and PAT of 35.4%. Economic Environment & Industry Outlook Fiscal 2011 has been a defining year for the Indian IT industry. With the global economic crisis in the background, many positive factors have redefined the industry. From growth rates exceeding expectations, markets opening up to generate healthy talent management and attrition issues and fast changing business dynamics, the year has played out very positively. As per NASSCOM, by 2020, demographic shifts will fuel the growth of new sectors, markets, and service lines in the IT sector and 80% of incremental growth will be driven by opportunities outside the current core markets, verticals and customer segments. Business services will account for 60% of the total opportunity in 2020 and as such there is a strong need for new business models. NASSCOM also lays emphasis on the expansion of new verticals of Public Sector, Healthcare, Media and Utilities in developed countries. The exports component of the Indian industry is expected to expand three- fold and reach USD 175 billion and the domestic component will grow to USD 50 billion by 2020. Also, Asia (including Japan) will bypass Europe in the global economy, by having a 30% share in the Global GDP. Business Overview Infinite's biggest dtrength lies in its ability to constantly question itself. Last year we thought on five key points. Business drivers in terms of client engagement and our shift to new and reinvented business models It is rightly perceived that clients today are demanding more for less and are looking for value beyond cost saving. Cost arbitrage alone will not survive in the long run. With the high degree of business uncertainty, it is imperative that new productivity frontiers need to be identified and innovative pricing and operating models be implemented. Companies want to dispose non core activities and focus on core activities. To this end, we have made a strategic shift of focus on transaction and outcome pricing model, state of the art forecasting and sizing models, shared services model and productivity driven incentive. However, for risks to be successfully shared between customers and suppliers, in depth investment needs to be made in the deal structure, both in terms of money as well as expertise, to make it work for both parties. We have managed to successfully develop subject matter expertise and benchmarking based value delivery models to implement this. Most importantly, we became trusted business partners, in terms of values, ethics and compliance. Emphasis on employee engagements and workforce strategies and re-evaluating the same In 2010, we participated in the Best IT Employer Survey conducted by Dataquest, and were overall ranked 5th. It was heartening to see the solidarity displayed by our employees. With companies being under pressure to maintain current profit levels and reduce costs, the industry implemented a number of measures such as increased working hours, salary freezes or low single digit increases and higher controls. However, at Infinite, not only did we give an average double digit growth, we continued our hiring process. We made an attempt to rethink our workforce strategies, by thinking of new ways of building domain expertise and staying focused on the innovation roadmap, continuing to invest in training, making changes to the grade structure and overall strengthening processes. We have made every effort to capture the changing mood of the organization, evaluate the people metrics in place, align training programs to roles, recruit as well as retain the right talent and ensure a transparent system of performance management. Dealing with volatility: Building effective relations with investors Post being a listed Company, it has been a strategic management responsibility to maintain an effective two way communication between the Company and the financial community. We realize the necessity for a Company to showcase its ability to achieve its business goals and increase long term shareholder value, by integrating economic, environmental and social opportunities to its business strategies. We have proactively engaged with the market to provide information on our continued progress over each quarter, to try and gauge the interest of the financial community and address their concerns through regularity and transparency of information. Managing Costs and Risks With the objective to move to best-in-class, we understand that it is imperative to manage costs and the risks associated with them effectively. The key to it is to build a customer-centric culture where everyone is empowered and energized to continuously drive service excellence and profitable growth, with unyielding integrity. Also, fixed costs need to be turned into variable to support expansion and growth and excessive onshore capital expenditure needs to be avoided. Tactical measures should /'continue to help achieve cost savings and greater productivity. Sustainable bottom line through operational excellence We acknowledged the need of a leaner operating model to create a domain and business value focus on the operations floor. We have continued with our efforts to make internal centers even more cost effective, without compromising the quality of operations. Pricing has been classified to be pricing per FTE, pricing per transaction and pricing per volume of transaction. We continue to strive to move from an FTE pricing to a transaction or value based pricing. To increase our bottom line efficiency, we also lay emphasis on FX volatility. In the long term, this can be best done through creating a natural hedge by diversifying revenue and cost. In the medium and short term, clearly defined policies with specified risk tolerances, differentiated contract type and certainty of exposures will play a key role. Financial Performance The financial performance discussed below is based on the consolidated financial results for the year ended March 31, 2011. Share Capital The authorized share capital of the Company is Rs 500 Million consisting of 50 Million equity shares of Rs 10 each. The paid up share capital stands at Rs 439.60 Million as on March 31, 2011, the same amount as in the previous year. Reserves and Surplus General Reserve General Reserve stands at Rs 63.50 Million on March 31, 2011 compared to Rs 29.13 Million in the previous year. The increase in general reserves over the previous year is on account of mandatory transfer of profits to reserves on declaration of Interim Dividend that was made in the third quarter of the current year. Capital Redemption Reserve Capital redemption reserve as on March 31, 2011 and March 31, 2010 stands at Rs 1.05 Million. Profit & Loss Account The balance retained in the profit and loss account as of March 31, 2011 is Rs 2,856.98 Million compared to Rs 1,973.31 Million as of March 31, 2010. Forex Translation Reserve The balance retained in the Forex translation reserve as of March 31, 2011 is Rs. (23.14) Million compared to Rs 1.61 Million as of March 31, 2010. Shareholders' Fund The total shareholders' funds increased to Rs 4,162.79 Million as of March 31, 2011 from Rs 3,269.51 Million as of the end of the previous year. The book value per share increased to Rs 94.70 as of March 31, 2011 as compared to Rs 74.37 as of March 31, 2010. Loan Funds Our working capital related borrowings have increased to Rs 297.37 Million as of March 31, 2011 as compared to Rs 147.83 Million in the previous year. We have repaid Rs 13.0 Million of our term loans during the year, thereby, bringing the outstanding amount of term loan as on March 31, 2011 to nil. Deferred Tax Liabilities Deferred tax liabilities as on March 31, 2011 were Rs 161.16 Million as compared to Rs 64.09 Million as of March 31, 2010. Fixed Assets The movement in the Fixed Assets is shown in the table below: Rs. in Million Assets Gross block Gross block as on as on March 31, 2011 March 31, 2010 Land 8.32 4.42 Buildings 16.34 14.33 Computers 22.63 17.97 Office Equipment 9.52 6.91 Furniture & Fixtures 10.68 6.93 Vehicles 4.43 3.43 Leasehold Improvements 1.00 0.55 Software 91.57 13.83 IT & Networking Equipments 43.84 36.55 Plant & Machinery 3.88 3.84 Electrical Installations 4.18 3.77 Intangible Assets 0.25 0.25 Finance Lease - Software 0.50 0.50 TOTAL 217.13 113.30 The net block of fixed assets, capital advances, capital work in progress and software work in progress increased to Rs 1,848.38 Million from Rs 929.63 Million. This increase is due to an increase in net fixed assets of Rs 872.59 Million and of Rs 46.16 Million on account of capital advances and capital work in progress Goodwill Opening goodwill as shown in the Consolidated Balance Sheet was Rs. 545.81 Million in respect of acquisition of 100% stock of Comnet International Company by Infinite Computer Solutions Inc. During the year, an additional consideration of USD 88,279 was paid to Comnet International Company. This amount is related to refund of income taxes paid during the pre-acquisition period and has therefore been treated as the cost of investment. This has resulted in a corresponding increase in the value of goodwill. However, the goodwill at the end of the year is reduced to Rs. 541.96 Million due to foreign exchange difference. Deferred Tax Asset Deferred tax asset as on March 31, 2011 was Rs 135.18 Million as compared to Rs. 135.89 Million in March 31, 2010. Investments The Company has made several strategic investments in a number of wholly owned 100 % subsidiaries, the details of which are as per the table below. During the year the Company's subsidiary Infinite Computer Solutions, Inc. USA acquired rights to invest in 98,000 preferred stock of Servesharp Inc., USA for a total cost of USD 550,000. The Company has recognized the rights entitlement to this investment to the extent of USD 225,000 (Rs. 10.05 Million) during the reporting period. Besides the above investments the Company also has invested Rs 158.38 Million in various mutual funds. Out of these Rs 79.39 Million is from the IPO proceeds and Rs 78.99 Million is from internal accruals. Values in Rs As on March 31, 2011 Name of the Country of % of Amount in Subsidiaries Incorporation ownership Rs. investment 1. Infinite Computer Singapore 100% 26,717,648 Solutions Pte. Ltd. 2. Infinite Computer Solutions Inc. USA 100% 229,532,000 3. Infinite Computer Solutions Sdn, Bhd Malaysia 100% 4,144,004 4. Infinite Computer Solutions (Shanghai) Co. Ltd China 100% 8,512,775 5. Infinite Computer Solutions Ltd United Kingdom 100% 16,881,531 6. Infinite Australia Pty Limited, Australia Australia 100% 103,759 (after diminution of INR 97,976) 7. Comnet International USA 100% 702,852,394 Company Subsidiary of Sr. No.2 8. India Comnet India 100% 11,077,074 International Pvt Ltd Subsidiary of Sr. No.7 9. Infinite Infosoft Services Pvt. Ltd. India 100% 10,000,000 10. Infinite Data Systems Pvt. Ltd. India 100% 10,000,000 11. Infinite Data Systems UK 100% 5,105,800 UK Ltd. Subsidiary of Sr. No.10 12. Infinite Convergence USA 100% 434,570,000 Solutions Inc. 13. Infinite Infocomplex India 100% 30,200,000 Pvt. Ltd. 14. Infinite Computer UAE Incorporated Solutions FZE on June 24, 2010. Investment is yet to be made 15. Infinite Infoworld India 100% 11,800,000 Pvt. Ltd. During the year 2010-11, a provision of Rs. 0.10 Million has been made for diminution in the value of investment made by the parent company in Infinite Australia Pty. Ltd which is carrying accumulated losses of Rs.0.263 Million in excess of the original investment. Sundry Debtors Sundry debtors increased to Rs.2,338.85 Million after provision for doubtful debts amounting to Rs. 37.78 Million as of March 31, 2011 from Rs. 2,194.32 Million with provision for doubtful debts amounting to Rs. 18.36 Million as of March 31, 2010. Included in the debtors are those pertaining to pass-through revenue - Rs 889.18 Million and Rs.706.34 Million for the year ended March 31, 2011 and 2010, respectively. The Days Sales Outstanding (DSO) is 103 days for the year ended March 31, 2011 as compared to 117 days for the previous year. The DSO of the core business (excluding pass through) has reduced from 102 days in Q3 to 90 in Q4. Cash and Bank Balance The cash and bank balance at the end of March 31, 2011 is Rs 834.43 Million as compared to Rs 548.38 Million as on March 31, 2010. The bank balances in India include both rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are maintained by overseas subsidiaries of the Other Current Assets Other Current Assets increased to Rs. 1,232.73 Million as of March 31, 2011 from Rs. 922.17 Million on March 31, 2010. The increase is mainly due to increase in unbilled receivables. Unbilled receivables pertain to services provided to customers during the financial year but have been invoiced after March 31, 2011. The unbilled receivables as on March 31, 2011 were Rs 1,207.99 Million as compared to Rs 900.44 Million for the previous year. Loans and Advances Loans and advances as on March 31, 2011 were Rs. 950.32 Million as compared to Rs. 500.04 Million as on March 31, 2010. The increase is mainly due to advances paid to vendors from whom services will be received during the next fiscal. Current Liabilities and Provisions Current liabilities and provisions were Rs. 3,265.44 Million as of March 31, 2011 as compared to Rs. 2,730.92 Million as of March %31, 2010. Consolidated Revenue Fiscal 2011 was a great one for Infinite as the Company made remarkable progress in its business performance. The year saw Infinite grow its top line by 32.96% in INR terms to Rs. 8,832.81 Million and about 37.88x% in USD terms to USD 193.58 Million. We have classified our revenues into four geographic segments comprising the Americas, Europe, Asia Pacific and Domestic (India). The geographic breakdown of revenues contained in the following table, is based on the location of the specific client entity for which the project has been executed, irrespective of the location where the invoice is raised or whether the work is performed onsite or from our offshore delivery centers in India. Rs. in Million Geographical 2011 2010 Location Domestic 662.89 269.08 Americas 7,313.92 5,839.18 Europe 543.81 395.40 APAC 312.18 139.31 Our revenues are generated from Time and Material, Fixed Price and Revenue Share projects. On time-and-material contracts revenues are recognized as the related services are rendered. Revenue from fixed price contracts is recognized as per the proportionate completion method. Revenue from revenue share contracts is recognized as and when it accrues. The segmentation of software services by project type is as follows: Project Type 2011 2010 Fixed Price/SOW 34.95% 41.95% Revenue Share 14.53% 7.03% Time and Material 50.55% 51.02% Our revenues are also segmented into onsite and offshore revenues. Onsite revenues are those where the services are provided at our clients locations while offshore revenues are those where the services are provided from our software development centers located in India. This segmentation is as follows: Revenue Mix 2011 2010 Onsite 67.7% 66.20% Offshore/Domestic 32.3% 33.80% The services performed onsite typically generate higher revenues per- capita, but at a lower gross margin in percentage as compared to services performed at our own facilities. Therefore, any increase in onsite effort impacts our margins. The growth in revenue is due to an all-round growth in various segments of the business mix and is mainly due to growth in business volumes. Other Income Other income for the year ended March 31, 2011 is Rs 61.62 Million, and has increased by 215.54 % over the previous year's income of Rs 19.52 Million. Out of this an increase of Rs. 18.94 million is on account of an exchange gain in the current year. In the previous year, there was a loss of Rs. 83.32 Million. The increase in Interest and Dividend from Rs 11.90 Million in FY 2010 to Rs 39.35 Million in FY 2011 has also contributed to the increase in other income. Expenses The overall expenditure of the Company grew by 35.54 % over the last year to Rs 7,336.21 Million. Operating and other expenses mainly include subcontracting costs, travelling expenses, project costs, communication expenses, rent, repairs and maintenance, and professional fee. The increase is due to increase in business volume, increase in number of office locations in India and overseas and overall growth in business activity. Employee Related Expenses Employee related expenses include salaries, wages and bonus, contribution to provident fund and other funds and staff welfare costs. These expenses grew by 48.42% in fiscal 2011 over fiscal 2010, mainly due to increase in headcount that rose by 45 % in the year, as well as due to annual increments that were paid to eligible employees. General and Administration Expenses The administration & other expenses (excluding the impact of exchange difference) saw an increase of 16.79% compared to the previous fiscal. Increase in depreciation is mainly due to increase in investment in infrastructure and equipment, as well as amortization of software to service our growing business. The Company incurred interest expense of Rs 16.75 Million in fiscal 2011 on borrowings as compared to Rs. 12.65 Million in fiscal 2010. EBITDA Margins This period saw our EBITDA rise by 21.88% in INR terms to Rs.1,478.88 Million and by 26.12% in USD terms to USD 32.41 Million. EBITDA margins as a percentage of revenue was 16.74% in fiscal 2011 as compared to 18.27% in fiscal 2010, in rupee terms. Profit before Tax Profit before tax, prior period and extraordinary items increased by 26.59% to Rs 1,356.28 Million in fiscal 2011 from Rs 1,071.37 Million in fiscal 2010. Profit before tax as a percentage of revenue was 15.36% in fiscal 2011 as compared to 16.13% in fiscal 2010. Taxes The provision of current tax and deferred tax for the year ended March 31, 2011 is Rs 284.46 Million as compared to Rs 231.33 Million in the previous year. The effective tax rate in these years is 20.97% and 21.59% respectively. Net Profit The Profit after Tax (PAT), for the year ended March 31, 2011 was up by 35.39% in INR terms to Rs 1,071.82 Million and by 39.85% in USD terms to USD 23.49 Million. Profit after tax as a percentage of revenue was 12.13% in fiscal 2011 and 11.92% in fiscal 2010. (FY10 numbers are after extraordinary and prior period items).

INFINITE COMPUTER SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS Overview: The financial statements have been prepared in compliance with the requirements of the Companies Act 1956, guidelines issued by Securities & Exchange Board of India (SEBI). Our management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner, the form and substance of transactions and reasonably present our state of affairs, profits and cash flows for the year. Economic Environment: While robust fundamentals ensured that the recession impact on India was relatively moderate, yet in an increasingly globalised environment, it could not escape declining GDP growth, rising unemployment and weakened consumer demand. However, prompt action by governments across the world and stimulus packages, helped to contain this downfall and make way for revival by the end of 2009. 2009 was also instrumental for more ways than one for the Indian IT industry. While the industry displayed tenacity and resilience, it also commenced its journey to achieve its aspirations in view of the altered landscape. It commenced working on its agenda to diversify beyond core offerings and markets, through new business and pricing models, specialized to provide end-to-end service offerings with deeper penetration across verticals, transformed the process delivery through re-engineering and enabling technology, innovated through research and development, to drive inclusive growth in India by developing targeted solutions for the domestic market. All these measures, along with India's game changing value proposition have helped India widen its leadership position in the global sourcing market. The advent of 2010 has signaled the revival of outsourcing within core markets, along with the emerging markets increasingly adopting outsourcing for enhanced competitiveness. Key demand indicators such as Increased deal flow, volume growth, stable pricing, and faster decision making has made the industry post good results. Though full recovery is expected, development of new growth levers, improved efficiency and changing demand outlook signifies early signs. India's knowledge sector today offers great opportunity for companies like Infinite to join the high growth trajectory and its future. Though the country recorded more than 7% growth over the last 5 years, the next challenge is inclusive growth. There is scope and opportunities in areas of information technology, knowledge and innovations. Our strong domestic investment drivers will support healthy rates of growth over the long term. Indian economy has weathered the global storm with a high degree of resilience and it is expected to have robust growth ahead of other economies. Against this backdrop, Infinite sees before it a wide opportunity spectrum in infrastructure investment potential and the vast Indian diaspora spanning the globe. Industry Outlook: As per NASSCOM, the global technology related spending is expected to grow from 2010 onwards, led by growth in outsourcing adoption and despite the unprecedented economic downturn the IT industry will witness sustainable growth. There will be greater focus on cost and operational efficiencies, which is expected to enhance global sourcing. India Inc would remain focused on tactical measures to achieve cost savings and greater productivity. The Services and Software segments are estimated to cross USD 1.2 trillion by 2012. This is more than the 5.2 per cent growth expected in the total IT spending. The industry will continue to diversify in terms of geographies; verticals and service lines & SMBs are expected to emerge as a significant opportunity due to lower IT adoption currently. Lack of working age population in the developed economies and a significant long term cost arbitrage indicates, India's sustained cost competitiveness and service providers are expected to enhance focus on domestic market to de-risk business and tap into the local growth opportunities. At this year's NASSCOM India Leadership Forum held in Mumbai in mid- February, officials were cheering about how the industry had triumphed over troubled times and reached its USD 50 billion export target. India's software exports for the year ending March were estimated to total USD 49.7 billion. Export growth in 20092010 was expected to be 5.5%. Yet according to NASSCOM, the performance of the industry this year is far stronger than what is reflected in the growth numbers. As for next year, the association reports, software and services export revenues should be up 12% to 15% to around USD 56.57 billion. On the domestic front, growth in 2009-2010 is expected to be much higher, at 12% with revenues expected to reach USD 13 billion and rising 15% to 17% next year. Business Overview: The financial year 2010 was great for Infinite as the Company listed on Indian bourses, made remarkable progress in business against the backdrop of a slowly recovering economy. Our limited or no exposure to some of the business sectors that underwent the turmoil made a big difference. Our long term relationships with global large clients- a key attribute of our business model, kept us away from the susceptibility. During the year, we made a strategic acquisition of Intellectual Property and several organic investments for accelerated growth. As part of the recent acquisition, the Company's wholly owned subsidiary Infinite Convergence Solutions Inc. entered into a strategic alliance with Motorola to further develop and support Motorola's software enabled short message service (SMS) and multi-media messaging service (MMS) messaging solutions. Under this ten year agreement, the Company has acquired a non transferable, non-assignable, royalty bearing, world-wide non-exclusive license to Motorola's messaging product solutions, in order to reproduce and prepare derivative works of the base license product for the purpose of developing an application product and related services to be sold as a licensed implementation to Motorola, its clients and third parties. Title to, and the intellectual property ownership of the licensed messaging products remain with Motorola, while we retain all rights, title to, and the intellectual property of all add-on software developed by Infinite. Motorola and Infinite will share the revenue from the provisions of the messaging platform service to Motorola's current clients and new clients of both Motorola and Infinite, in a pre-defined revenue sharing model. As per our projections, based on the currently available data, our share of revenue per year, in FY 2010-11 is expected to be around USD 20 million, while starting FY 2011-12 it is expected to be upwards of USD 40 million per year. The increased focus by the Indian enterprises as well as by the Government on IT spends has provided us with an opportunity to cater to the domestic IT market. Our domain knowledge and expertise in the Telecom, Textile and Utility sectors provides us with an opportunity to tap the growing market in India. The Government sector, where we've previously executed complex projects in the State Utilities arena is an area we will continue to tap into, to deliver value and demonstrate capability. We bagged Uttarakand Power Corporation's IT modernization project worth Rs. 125 crores. This project is a part of the larger Restructured Accelerated Reforms Program (R-APDRP), an initiative driven by the Government of India in collaboration with the States. This win testifies our strengths, expertise and track record in the Utility vertical. We are excited to be part of this government initiative that is expected to revolutionize power distribution in the country. We are actively engaged in the bidding process in a number of States and are hopeful of positive results in a few more States. Our Remote Infrastructure Management Division continued to grow its existing revenue streams as well as acquire new clients. We signed a three- year agreement with iYogi Inc. to set up Service Desk Operations to support iYogi's customers across US, Canada, United Kingdom and Australia. This center is expected to scale between 500 to a 1000 technical support agents in the next twelve months. Our focus and investment in developing productized solutions for the SME segment in the manufacturing vertical, has in the last year found its niche with our breaking into this segment with an ERP-specific domain competency. During this year, we successfully completed end-to-end implementation of this solution for two of the leading textile manufactures in India. Financial Performance 1. Share Capital: The authorized share capital of the Company is Rs. 50 crores which includes 4.65 crore equity shares of Rs 10 each and 35 lakh 0% convertible preference shares of Rs 10 each. The paid up share capital stands at Rs. 43.96 crores as on March 31,2010 compared to Rs. 38.22 crores on March 31, 2009. The increase in paid up capital during the year is due to a fresh allotment of 5,735,952 equity shares on completion of the Company's Initial Public Offering (IPO). 2. Reserves and Surplus: a) Share Premium Account: The addition to the share premium account of Rs. 88.90 crores during the year is due to the premium received on issue of 5,735,952 equity shares at a premium of Rs. 155 per share. This amount has been reduced by Rs. 7.07 crores being share issue expenses related to the IPO. The net increase to share premium account is Rs. 81.83 crores. b) General Reserve: General reserve stands at Rs. 2.91 crores on March 31,2010 and there is no change from March 31,2009. c) Capital Redemption Reserve: Capital redemption reserve stands at Rs. 10.49 lakhs on March 31, 2010 and there is no change from March 31,2009. d) Profit and Loss Account: The balance retained in the profit and loss account as of March 31, 2010 is Rs. 197.33 crores compared to Rs. 118.16 crores as of March 31,2009. e) Forex Translation Reserve: The balance retained in the Forex translation reserve as of March 31, 2010 is Rs. 0.16 crores compared to Rs. (7.75) crores as of March 31,2009. f) Shareholders' Funds: The total shareholders' funds increased to Rs 326.95 crores as of March 31, 2010 from Rs 152.30 crores as of the previous year end. The book value per share increased to Rs 74.37 as of March 31,2010 as compared to Rs 39.84 as of March 31,2009. 3. Loan Funds: Our working capital related borrowings have reduced to Rs. 14.78 crores as of March 31, 2010 as compared to Rs. 16.76 crores in the previous year. We have repaid Rs 2.60 crores of our term loan during the year, thereby, bringing the outstanding amount as on March 31, 2010 toRs 1.30 crores 4. Deferred Tax Liabilities: Deferred tax liabilities as on March 31, 2010 were at Rs. 6.41 crores as compared to Rs. 3.70 crores as of Match 31,2009. 5. Fixed Assets: During the year we incurred capital expenditure of Rs 50.70 crores comprising of additions to gross block of Rs 39.02 crores. Out of this Rs 5.07 crores was funded from internal accruals and the balance Rs 33.95 crores from the finance lease towards acquisition of IT and Networking equipment by the Company's wholly owned subsidiary - Infinite Convergence Solutions Inc. The expenditure on buildings, computers, office equipments, furniture and fixtures, vehicles was Rs 0.43 crores, Rs 1.07 crores, Rs.0.52 crores, Rs 0.12 crores, respectively. The movement in the Fixed Assets is shown in the table below: Amount in Rs. Assets Gross block Gross block as on as on March 31, 2010 March 31, 2009 Leasehold Land 44,196,800 44,196,800 Buildings 143,334,111 139,041,212 Computers 179,677,832 168,964,314 Office Equipment 69,064,371 63,807,685 Furniture & Fixtures 69,339,744 61,020,466 Vehicles 34,328,040 33,093,343 Leasehold Improvements 5,517,342 5,479,090 Software 138,348.227 124,048,039 IT & Networking Equipments 365,546,358 26,008,261 Plant & Machinery 38,376,116 38,376,116 Electrical Installations 37,735,283 36,215,022 Intangible Assets 2,482,700 2,488,963 Finance Lease - Software 5,043,070 - TOTAL 1,132,989.994 742,739,311 The net block of fixed assets, capital advances and capital/software work in progress increased to Rs.92.96 crores from Rs. 48.51 crores as on March 31,2010. Out of the increase, Rs. 11.51 crores and Rs. 33.94 crores relate respectively to software development and networking infrastructure equipment, acquired on finance lease by the Company's new subsidiary Infinite Convergence Solutions Inc. 6. Goodwill: The goodwill has increased to Rs. 54.58 crores in March 31.2010 from Rs41.01 crores on March 31, 2009. This increase is attributable to an additional consideration of USD 1.50 million paid by Infinite Computer Solutions Inc, USA towards the final settlement of acquisition of Comnet International Company, USA. The balance is attributable to exchange difference on restatement of investment from USD to Rupees. Values in Rs. As on March 31, 2010 S. Name of the Country of % of ownership Amount in No. subsidiary Incorporation investment Rs. company 1. Infinite Computer Solutions Pte. Ltd. Singapore 100% 26,717,648 2. Infinite Computer Solutions Inc. USA 100% 2,342,000 3. Infinite Computer Solutions Sdn, Bhd. Malaysia 100% 1,087,500 4. Infinite Computer Solutions (Shanghai) Co. Ltd China 100% 8,512,775 5. Infinite Computer Solutions Ltd United Kingdom 100% 16,881,531 6. Infinite Australia Pry. Ltd. Australia 100% 201,735 7. Comnet International Company USA 100% 572,068,151 Subsidiary of Sr. No.2 8. India Comnet International India 100% 10,027,667 Pvt Ltd Subsidiary of Sr. No.7 9. Infinite Infosoft Services India 100% 1,000,000 Pvt Ltd. 10. Infinite Data Systems Pvt Ltd. India 100% 10,000,000 11. Infinite Data Systems UK Ltd. UK 100% 5,105,800 Subsidiary of Sr. no.10 12. Infinite Convergence Solutions Inc. USA 100% 232,300,000 7. Deferred Tax Asset: Deferred tax asset as on March 31,2010 was Rs. 13.59 crores as compared to Rs. 10.10 crores as of March 31,2009. 8. Investments: The Company has made several strategic investments in a number of wholly owned 100% subsidiaries, the details of which are as the per table below. During the year the Company invested Rs 23.23 crores in Infinite Convergence Solutions, Inc., this was invested out of the money received by the Company from the IPO proceeds. Besides the above investments the Company also has invested Rs 76.44 crores in various mutual funds. Out of these Rs 57.27 crores is from the IPO proceeds and Rs 19.14 crores is from internal accruals. 9. Sundry Debtors: Sundry debtors reduced to Rs. 219.43 crores with provision for doubtful debts amounting to Rs. 1.83 crores as of March 31,2010 from Rs. 246.85 crores with provision for doubtful debts amounting to Rs. 2.15 crores as of March 31,2009. Included in the debtors are those pertaining to pass-through revenue - Rs 70.60 crores and Rs 64.90 crores for the year ended March 31, 2010 and 2009 respectively. The Days Sales Outstanding (DSO) is 105 days for the year ended March 31,2010 as compared to 100 days for the previous year. 10. Cash and Bank Balance: The cash and bank balance at the end of March 31, 2010 is Rs 54.84 crores as compared to Rs 24.31 crores as on March 31,2009. The bank balances in India include both rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are maintained by overseas subsidiaries of the Company. 11. Other Current Assets: Other Current Assets increased to Rs. 92.22 crores as of March 31, 2010 from Rs. 12.81 crores on March 31, 2009. The increase in this is mainly due to increase in unbilled receivables. Unbilled receivables pertain to services provided to customers during the financial year but have been invoiced after March 31, 2010. The unbilled receivables as on March 31, 2010 were Rs 90.04 crores as compared to Rs 12.72 crores for the previous year. 12. Loans and Advances: Loans and advances as on March 31,2010 were Rs. 50.04 crores as compared to Rs. 27.63 crores as on March 31, 2009. The increase is mainly due to advances paid to vendors from whom services will be received during the next financial year. 13. Current Liabilities and Provisions: Current liabilities and provisions were Rs. 273.09 crores as of March 31, 2010 as compared to Rs.234.56 crores in March 31, 2009. 14. Consolidated Revenue: The financial year 2010 was a great one for Infinite as the Company made remarkable progress in business performance. The year saw Infinite grow its top line by 34.3% in INR terms to Rs. 666.2 5 crores and about 32% in USD terms to USD 140.9 million. We have classified our revenues into four geographic segments comprising the Americas, Europe, Asia Pacific and Domestic (India). The geographic breakdown of revenues contained in the following table, is based on the location of the specific client entity for which the project has been executed, irrespective of the location where the invoice is raised or whether the work is performed onsite or from our offshore delivery centres in India. Rs. in Crores Geographical 2010 2009 location Domestic 26.91 24.53 Americas 583.92 446.53 Europe 39.54 10.04 APAC 13.93 8.76 Of the total revenue for the year ended March 31,201095.95% were derived from overseas operations as compared to 94.99 % for the previous year. Our revenues are generated from Time and Material, Fixed Price and Revenue share projects. On time-and-material contracts revenues are recognized as the related services are rendered. Revenue from fixed price contracts is recognized as per the proportionate completion method. Revenue from revenue share contracts is recognized as and when it accrues. The segmentation of software services by project type is as follows: Our revenues are also segmented into onsite and offshore Project Type 2010 2009 Fixed Price 41.95% 42.80% Revenue Share 7.03% 6.20% Time and Material 51.02% 52.00% revenues. Onsite revenues are those where the services are provided at our clients locations while offshore revenues are those where the services are provided from our software development centers located in India. This segmentation is as follows: The services performed onsite typically generate higher revenues Revenue Mix 2010 2009 Onsite 66.20% 71.90% Offshore 33.80% 29.10% per-capita, but at a lower gross margin in percentage as compared to services performed at our own facilities. Therefore, any increase in onsite effort impacts our margins. The growth in revenue is due to an all-round growth in various segments of the business mix and is mainly due to growth in business volumes. 15, Other Income: Other income for the year ended March 31,2010 is Rs 1.95 crores, and has reduced by 68.6% over the previous year's income of Rs 6.21 crores. This is mainly because there was an exchange gain of Rs. 4.80 crores in the previous year. In the current year, there is a loss of Rs. 8.33 crores. 16, Expenses: The overall expenditure of the company grew by 27.6% over the last year to Rs 559.11 crores. Operating and other expenses mainly include subcontracting costs, travelling expenses, communication expenses, rent, repairs and maintenance, office establishment costs, software expenses and professional fees. The increase is due to increase in business volume, increase in number of office locations in India and overseas and overall growth in business activity. 17, Employee Related Expenses: Employee related expenses include salaries, wages and bonus, contribution to provident fund and other funds and staff welfare -costs. These expenses grew by 31.9% in the fiscal year 2010 over fiscal year 2009, mainly due to increase in headcount that rose by 40% in the year and also due to annual increments that were paid to eligible employees. 18. General and Administration Expenses: The administration & other expenses (excluding the impact of exchange difference) saw a rise of about 17% in the same period. Increase in depreciation is mainly due to increase in investment in infrastructure and equipment, to service our growing business. The Company incurred interest expense of Rs. 1.26 crores in fiscal 2010 on borrowings as compared to Rs. 1.48 crores in fiscal 2009. 19. EBITDA Margins: This period saw our EBITDA rise by over 79% in INR terms to Rs 114.96 crores and by about 75% in USD terms to USD 24.20 million. EBITDA margins as a percentage of revenue was 17.25% in fiscal 2010 as compared to 12.92% in fiscal 2009. 20. Profit before Tax: Profit before tax, prior period and extraordinary items increased by 85.47% to Rs. 107.14 crores in fiscal 2010 from Rs. 57.76 crores in fiscal 2009. Profit before tax as a percentage of revenue was 16.08% in fiscal 2010 as compared to 11.6% in fiscal 2009. 21. Taxes: The provision of current tax, deferred tax and fringe benefits tax for the year ended March 31, 2010 is Rs. 23.13 crores as compared to Rs. 12.03 crores in the previous year. The effective tax rate in these years is 20.73% and 20.76%, respectively. 22. Net Profit: The Profit after Tax (PAT), for the year ended March 31,2010 shot up by about 73.15% in INR terms to Rs 79.17 crores and by 70.74% in USD terms to USD 16.80 million. Profit after tax as a percentage of revenue was 11.9% in fiscal 2010 and 9.2% in fiscal 2009.