Connected world - KPIT Cummins

Connected world 

FINANCIAL STATEMENTS OF SUBSIDIARIES 2010-2011

Contents 

KPIT Infosystems Limited .............................................................01 

KPIT Infosystems Inc. ..................................................................07 

KPIT Infosystems GmbH ...............................................................13 

KPIT Infosystems Inc. (SolvCentral) .................................................18 

KPIT Infosystems France SAS .........................................................23 

Sparta Consulting Inc. .................................................................28 

Sparta Infotech India Private Limited ...............................................34 

In2soft GmbH ...........................................................................40 

Statement pursuant to Section 212 of the Companies Act, 1956, 

forming a part of the Directors' Report .............................................45

KPIT Infosystems Limited 

Registered Offi ce: Ground Floor, The Annexe, Hurst Grove, Sandford Lane, Hurst, Berkshire RG10 0SQ, 

United Kingdom 

Directors’ Report 

Dear Shareholders, 

Your Directors are pleased to present herewith the ninth report of the Directors on the operations of the 

Company together with the accounts for the period ended March 31, 2011. 

Financial Results 

Particulars Year 2010-11 

GBP 

Total Revenues 

Net Profi t /(Loss) for the period 

Balance Sheet as at 

11,109,661 

(240,088) 

Year 2010-11 

` 

788,326,968 

(17,036,227) 

Year 2009-10 

GBP 

11,534,959 

(87,837) 

Year 2009-10 

` 

877,540,897 

(6,644,739) 

The Company recorded revenue of GBP 11.11 Million during the year as compared to GBP 11.53 Million 

in the previous year. 

Share Capital 

During the year under review, the Company increased its Authorised Share Capital by GBP 2.0 Million 

approximately. 

(Pursuant to Section 212 of the Companies Act, 1956) 

Schedule March 31, 2011 March 31, 2010 

GBP ` GBP ` 

Sources of Funds 

Share holders’ Funds 

Share capital I 5,717,170 430,052,879 3,701,000 285,851,629 

Reserves and surplus 

Loan Funds 

II (22,322,872) (34,777,358) 

Unsecured loans III - - 250,000 17,007,500 

Total 5,717,170 407,730,007 3,951,000 268,081,771 

Application of Funds 

Fixed Assets IV 

Gross block 39,151 2,706,725 31,364 2,175,970 

Less: Accumulated depreciation 27,126 1,978,183 22,338 1,638,424 

Net block 12,025 728,542 9,026 537,547 

Investments 

Current assets, loans and 

advances 

V 4,717,625 339,338,744 2,701,455 183,779,963 

Sundry debtors VI 3,836,466 275,956,997 2,516,150 171,173,681 

Cash & bank balances VII 1,025,035 73,730,752 1,109,260 75,462,981 

Loans & advances VIII 372,412 26,787,549 344,364 23,426,983 

5,233,913 376,475,298 3,969,774 270,063,645 

Less: Current liabilities and IX 

provisions 

5,129,600 368,972,197 3,372,376 229,422,777 

Net current assets 104,313 7,503,101 597,398 40,640,868 

(Profi t) and Loss A/C X 883,212 60,159,620 643,125 43,123,393 

Total 5,717,170 407,730,007 3,951,000 268,081,770 

Notes to Accounts XVI 

The schedules and notes to accounts form an integral part of the fi nancial statements 

For and on behalf of the Board of Directors 

Pune Kishor Patil 

April 25, 2011 Chairman 

1 

Financial Statement of the Subsidiaries F.Y. 2010-2011 

Directors 

Mr. Girish Wardadkar resigned from the directorship of the Company with effect from April 25, 2011. 

Audit 

The Company is not required by UK laws to have an independent audit fi rm to issue a report to the 

shareholders as to whether the fi nancial statements give a true and fair view. No audit opinion has been 

sought in respect of these fi nancial statements. The accounts are prepared from the internally prepared 

management accounts of the Company. The same management accounts are audited in order for the 

Group Auditors to give an audit opinion in relation to the group accounts i.e. consolidated accounts of KPIT 

Cummins Infosystems Ltd., the parent company. However, no separate audit report is given in respect of 

the Company. An audit report for the group accounts is issued by Deloitte, Haskins & Sells, Pune, and is 

included in its fi nancial statements. 

Profi t and Loss Account for year ended 


KPIT Infosystems Limited 





GBP ` GBP ` 

Income 

Software Services and 

Products 

Domestic Sales 10,081,911 715,399,222 10,172,792 769,556,122 

Export Sales 1,027,749 72,927,747 1,362,166 107,984,776 

11,109,661 788,326,968 11,534,959 877,540,897 

Software development 

XI 

expenses 

9,817,247 696,618,986 10,237,684 774,465,075 

Gross Profi t 1,292,414 91,707,983 1,297,276 103,075,822 

Selling and marketing 

expenses 

XII 217,490 15,432,826 151,495 11,460,352 

General and administration XIII 

expenses 

Operating profi t before 

1,289,758 91,519,491 1,211,065 91,615,118 

interest, depreciation and tax (214,835) (15,244,334) (65,284) 352 

Interest XIV 1,981 140,560 8,875 671,366 

Depreciation 

Operating profi t after 

interest, depreciation and 

IV 4,788 339,760 6,587 498,296 

before tax (221,604) (15,724,655) (80,746) (1,169,310) 

Other income 

Profi t before tax and before 

XV (18,484) (1,311,573) - (4,938,975) 

extra-ordinary items (240,088) (17,036,227) (80,746) (6,108,285) 

Provision for Taxation - - 7,091 536,454 

Profi t /(loss)after tax and 

before extra-ordinary Items 

(240,088) (17,036,227) (87,837) (6,644,739) 

Extraordinary Item - prior 

period expenses 

- - - - 

Profi t /(loss) After Tax (240,088) (17,036,227) (87,837) (6,644,739) 

Amount available for 

appropriation 

Amount transferred - profi t 

(240,088) (17,036,227) (87,837) (6,644,739) 

and (loss) account (240,088) (17,036,227) (87,837) (6,644,739) 

Earning per share 

(Equity shares at par) 

(240,088) (17,036,227) (87,837) (6,644,739) 

Basic (0.04) (2.98) (0.02) (1.80) 

Diluted 

Number of shares used in 

computing earnings per share 

(0.04) (2.98) (0.02) (1.80) 

Basic (weighted average) 5,717,170 5,717,170 3,701,000 3,701,000 

Diluted (weighted average) 5,717,170 5,717,170 3,701,000 3,701,000 

Notes to Accounts XVI 

The schedules and notes to accounts form an integral part of the fi nancial statements 



April 25, 2011 Chairman

KPIT Infosystems Limited, UK 

Cash Flow Statement for the year ended 


March 31, 2011 March 31, 2010 

GBP 

A] Cash fl ow from operating activities 

` GBP ` 

Net profi t/(loss) before tax and 

extraordinary items 

Adjustments for 

(240,088) (17,036,227) (80,746) (6,108,285) 

(Profi t)/loss on sale of fi xed assets - - - - 

Depreciation 4,788 339,760 6,587 494,933 

Interest and fi nancial charges 2,908 206,312 4,123 311,861 

Interest income 927 65,752 (4,752) (359,505) 

Cash Flow Before Working Capital Changes 


(231,465) (16,424,403) (74,788) (5,660,997) 

(Increase)/decrease in receivables (1,320,316) (104,783,316) 900,561 77,767,900 

(Increase)/decrease in loans & advances (28,049) (3,360,566) 165,906 13,751,206 

Increase/(decrease) in accounts payable 1,757,224 139,549,420 (548,148) (56,226,581) 

Cash infl ow/(outfl ow) from Operations 177,393 14,981,134 443,530 29,631,528 

Provision for taxation - - (7,091) (536,454) 

Net cash infl ow/(outfl ow) from operations 

B] Cash fl ow from investing activity 

177,393 14,981,135 436,440 29,095,075 

Purchase of fi xed assets (7,787) (530,755) (490) (33538) 

Sale of fi xed assets - - - - 

Increase in investments (2,016,170) (155,558,781) (2,680,483) (182,136,831) 

Interest received (927) (65,752) 4,752.31 359,504.96 

Net Cash from/(used) in investing activity 

C] Cash fl ow from fi nancing activity 

Repayment of term loan 

(2,024,883) (156,155,289) (2,676,219) (181,810,863) 

Issue of shares 2,016,170 144,201,250 2,700,000 217,761,750 

Increase/(decrease) in working capital loan (250,000) (17,007,500) (850,000) (63,138,500) 

Interest and fi nance charges (2,908) (206,312) (4,123) (311,861) 

Net Cash used in fi nancing activity 1,763,263 126,987,438 1,845,878 154,311,389 

D] Exchange Gain/(Loss) 

Net Increase/(Decrease ) in Cash and 

12,454,487 (35,653,042) 

cash equivalents (A + B + C + D) 

Cash & cash equivalents at close of 

(84,228) (1,732,229) (393,902) (34,057,441) 

the year 

Cash & cash equivalents at beginning 

1,025,035 73,730,752 1,109,260 75,462,981 

of the year 1,109,260 75,462,981 1,503,163 109,520,422 

Cash Surplus/(defi cit) for the year 

Note: 

Cash and cash equivalents include: 

Balance with scheduled banks 

(84,228) (1,732,229) (393,902) (34,057,441) 

- On current accounts 924,755 66,517,609 1,009,234 68,658,199 

- On deposit account 100,280 7,213,143 100,026 6,804,782 

1,025,035 73,730,752 1,109,260 75,462,981 




2 

Schedules to the Balance Sheet as at 


March 31, 2011 March 31, 2010 

GBP 

SCHEDULE - I SHARE CAPITAL 

Authorized 

` GBP ` 

Allotted, Called up and fully paid 

5,717,170 ordinary shares (previous year 

2,000,000 160,660,000 2,000,000 160,660,000 

3,701,000 of £1 each) of £ 1 each 5,717,170 430,052,879 3,701,000 285,851,629 

Total 5,717,170 430,052,879 3,701,000 285,851,629 

SCHEDULE - II RESERVES AND SURPLUS 

Cumulative Translation Adjustments 

As per last Balance Sheet - (34,777,358) - 875,684 

Add : Additions for the year - 12,454,487 - (35,653,043) 

- (22,322,872) - (34,777,358) 

SCHEDULE - III UNSECURED LOANS 

Loan due to Group companies - - 250,000 17,007,500 

Interest accrued and due to Group companies - - - - 

Total - - 250,000 17,007,500



SCHEDULE - IV FIXED ASSETS 

Particulars As on 

April 1, 2010 

March 31, 2011 March 31, 2010 

GBP ` GBP ` 

SCHEDULE - V INVESTMENTS 

Long term investments 

Trade (Unquoted) 

Investment in Subsidiaries 

KPIT Infosystems GmbH, Germany 

100% of total equity shares 

One share of nominal value of Euro 20,000 and 

One share of nominal value of Euro 30,000 4,717,625 339,338,744 2,701,455 183,779,963 

Total 4,717,625 339,338,744 2,701,455 183,779,963 

SCHEDULE - VI SUNDRY DEBTORS 

Unsecured 

Outstanding for a period exceeding six months 

Considered Good 8,651 622,266 - - 

Considered doubtful 24,700 1,776,705 - 

Other Debts 

33,351 2,398,971 - - 

Considered Good 3,803,115 273,558,026 2,516,150 171,173,681 

Considered doubtful 

Less: Reserve for doubtful debts 

3,803,115 273,558,026 2,516,150 171,173,681 

Total 3,836,466 275,956,997 2,516,150 171,173,681 

SCHEDULE - VII CASH AND BANK BALANCES 

Balance with Scheduled banks 

On current accounts 924,755 66,517,609 1,009,234 68,658,199 

On deposit account 100,280 7,213,143 100,026 6,804,782 

Total 1,025,035 73,730,752 1,109,260 75,462,981 

3 


Gross block Depreciation Net block 

Additions Deductions/ 

Discarded 

As on 

Mar 31, 2011 

Up to 

April 1, 2010 

Adjustment for the year On 

Deductions/ 

Discarded 

Up to 

Mar 31, 2011 

As on 

Mar 31, 2011 

GBP 

As on 

March 31, 2010 

Leasehold Property 1,023 - - 1,023 1,023 - - - 1,023 - - 

Offi ce Equipments 1,093 286 - 1,379 232 - 380 - 612 767 861 

Plant & Machinery(Computers) 22,502 7,501 - 30,003 19,597 - 3,619 - 23,216 6,787 2,905 

Furniture and Fixtures 6,746 - - 6,746 1,486 - 789 - 2,275 4,471 5,260 

Total 31,364 7,787 - 39,151 22,339 - 4,788 - 27,126 12,024 9,026 

Previous Year 30,874 490 - 31,364 15,751 - 6,587 - 22,338 9,026 15,123 


April 1, 2010 

Gross block Depreciation Net block 


Discarded 

As on 

Mar 31, 2011 

Up to 

April 1, 2010 

Adjustment for the year On 

Deductions/ 

Discarded 

Up to 

Mar 31, 2011 

As on 

Mar 31, 2011 

` 

As on 

March 31, 2010 

Leasehold Property 70,730 - - 70,730 70,730 - - - 70,730 0 0 

Offi ce Equipments 32,093 286 - 32,379 15,742 - 26,968 - 42,710 (10,331) 49,889 

Computers 1,728,286 530,469 - 2,258,755 1,475,980 - 256,800 - 1,732,779 525,976 218,769 

Furniture and Fixtures 344,861 - - 344,861 75,971 - 55,992 - 131,964 212,897 268,890 

Total 2,175,970 530,755 - 2,706,725 1,638,423 - 339,760 - 1,978,183 728,542 537,547 

Previous Year 2,142,434 33,538 - 2,175,970 1,143,491 (3,353) 498,286 - 1,638,423 537,547 998,942 

March 31, 2011 March 31, 2010 

GBP ` GBP ` 

SCHEDULE - VIII LOANS AND ADVANCES 

[Unsecured, considered good] 

Advances recoverable in cash or in kind 

or for value to be received (See Note 7 of 

Schedule XV) 33,544 2,412,848 38,158 2,595,921 

Loans to Group Companies - - 178,039 12,112,000 

Interest accrued and due on loans to group 

companies 

- - - - 

Dues from Group companies 310,223 22,314,376 100,676 6,849,004 

TDS Receivable - Advance tax 5,028 361,650 5,028 342,042 

Prepaid Expenses 10,127 728,461 9,035 614,624 

358,924 25,817,335 330,937 22,513,591 

Deposits 13,173 947,555 13,173 896,180 

Interest Accrued but not due 315 22,659 253 17,212 

Total 372,412 26,787,549 344,364 23,426,983 

SCHEDULE - IX CURRENT LIABILITIES AND 

PROVISIONS 

Current liabilities 

Sundry creditors 

Due to Group Companies 4,643,130 333,980,373 3,069,512 208,818,897 

For accrued salaries and benefi ts 125,332 9,015,110 106,511 7,245,922 

4,768,462 342,995,482 3,176,023 216,064,818 

Other liabilities 349,218 25,119,248 184,433 12,546,983 

Provisions 11,921 857,467 11,921 810,975 

Total 5,129,600 68,972,197 3,372,376 229,422,777 

SCHEDULE - X PROFIT AND LOSS ACCOUNT 

As per last Balance Sheet 643,125 43,123,393 555,288 36,478,654 

Add: (Surplus)/defi cit for the year 240,088 17,036,227 87,837 6,644,739 

Total 883,212 60,159,620 643,125 43,123,393


Schedules annexed to and forming a part of Profi t and Loss Account 


March 31, 2011 March 31, 2010 

GBP ` GBP ` 

SCHEDULE- XI SOFTWARE 

DEVELOPMENT EXPENSES 

Consultancy charges 9,805,177 695,762,514 10,229,549 773,849,675 

Visa Expenses 

Cost of service delivery 

12,070 856,471.40 8,135 615,400.28 

Total 9,817,247 696,618,986 10,237,684 774,465,075 

SCHEDULE - XII SELLING AND 

MARKETING EXPENSES 

Marketing Travel Expenses 217,490 15,432,826 151,495 11,460,352 

Total 217,490 15,432,826 151,495 11,460,352 

SCHEDULE - XIII GENERAL AND 

ADMINISTRATION EXPENSES 

Salaries and bonus 944,833 67,044,075 916,422 69,325,896 

Contribution to Provident and other 

funds 

114,046 8,092,520 95,754 7,243,629 

Recruitment and Training Expenses 19,808 1,405,562 6,731 509,166 

Rent, Rates and taxes 78,766 5,589,113 71,926 5,441,066 

Communication Expenses 47,189 3,348,500 42,612 3,223,546 

Professional and Legal Expenses 52,500 3,725,324 46,565 3,522,601 

Printing and stationery 2,260 160,400 1,874 141,787 

Repairs to Others 2,961 210,090 3,771 285,231 

Power and Fuel 3,242 230,055 1,201 90,886 

Insurance Charges 13,793 978,747 10,892 823,925 

Audit fees 5,500 390,273 7,000 529,539 

Loss (net) on Sale of Assets - - - - 

Offi ce Expenses 4,860 344,832 6,317 477,846 

Total 1,289,758 91,519,491 1,211,065 91,615,118 

SCHEDULE - XIV INTEREST, NET 

Financial charges 2,908 206,312 4,123 311,861 

Lease Rent - - - - 

2,908 206,312 4,123 311,861 

Less : Interest income 927 65,752 (4,752) (359,505) 

Total 1,981 140,560 8,875 671,366 

SCHEDULE - XV DIVIDEND ON 

INVESTMENTS 

Foreign Exchange Fluctuation Gains - - - - 

Other Income (18,484) (1,311,573) (65,289) (4,938,975) 

Miscellaneous Income - - - - 

Total (18,484) (1,311,573) (65,289) (4,938,975) 

SCHEDULE XV - NOTES TO ACCOUNTS 

1. Going Concern 

KPIT Infosystems Limited is a company incorporated in the UK. The company is the wholly owned 

subsidiary of KPIT Cummins Infosystems Ltd (formerly known as KPIT Infosystems Ltd.) the 

holding company that is incorporated under the laws of India. 

The Company has made a Loss of ` 17,036,227 (GBP 240,088) in the current fi nancial year. The 

accumulated losses till March 2011 of Rs 60,159,620 (GBP 883,212) and the Working Capital of 

` 7,503,101 (GBP 104,313) as of that date have presently been funded by the holding company, 

by way of capital contribution. However, in the opinion of the management, in the coming years, 

the company expects to make suffi cient profi ts to absorb the accumulated losses and meet its 

operating cash fl ow needs, out of internal accruals. 

During the year Kpit Cummins Infosystems has invested further capital of GBP 2,016,170. 

2. Signifi cant Accounting Policies 

a) Basis for preparation of fi nancial statements 

The fi nancial statements have been prepared on historical cost convention on accrual 

basis, in accordance with Generally Accepted Accounting Principles (GAAP) as applicable 

in India and the provisions of the Companies Act 1956. The accounting standards issued 

by the Institute of Chartered Accountants of India have been complied with to the extent 

applicable to the Company. 

All income and expenditure having a material bearing on the fi nancial statements are 

recognised on the accrual basis. 

b) Revenue recognition 

Revenue from software development and services on time and material basis is 

recognized based on software development, services rendered and billed to clients as per 

4 

the contractual obligations. In case of fi xed price contracts, revenue is recognized based 

on the milestone/s achieved as agreed upon in the contract on proportionate completion 

basis. 

c) Expenditure 

Expenses are accounted on an accrual basis and provisions are made for all known losses 

and liabilities. 

d) Fixed Assets 

Fixed assets are stated at the cost of acquisition, less accumulated depreciation. Direct 

costs are capitalized till the assets are ready to put to use. Fixed assets taken on lease are 

written off over the lease period. 

e) Depreciation 

Depreciation on fi xed asset of the Company is provided on expected useful life of the 

assets at the following rates: 

Class of Asset Rate of Depreciation 

Leasehold Buildings Amortized over the period of lease. 

Computer Hardware 33.33% - SLM 

Plant & Machinery & Offi ce equipment 33.33% - SLM 

Furniture, fi ttings and equipments 15% - RBM 

f) Impairment of Assets 

Management periodically assesses using, external and internal sources, whether there is 

an indication that an asset may be impaired. Impairment occurs where the carrying value 

exceeds the present value of future cash fl ows expected to arise from the continuing use 

of the asset and its eventual disposal. The impairment loss to be expensed is determined 

as the excess of the carrying amount over the higher of the asset’s net sales price or 

present value as determined above. 

During the year under consideration, there was no indication, either internal or external as 

to the impairment of any of the assets. 

g) Foreign Currency Transactions 

The transactions with respect to the income and expenditure in foreign currency are 

recorded at a monthly average exchange rate, which is near to the actual rate. The 

exchange differences arising either on settlement or on translation of foreign currency 

transactions are recognized in the profi t and loss account in the year in which they arise. 

h) Conversion into Indian Rupees 

The transactions, which are in local currency GBP, have been converted for reporting in 

Indian Currency on the following basis. 

• For the purpose of preparation of the accounts during the year, all income and 

expense items are converted at the average rate of exchange applicable for the 

year. All assets and liabilities are translated at the closing rate as on the balance 

sheet date except for fi xed assets which are converted at the exchange rate 

prevailing at the time of acquisition of these assets. 

• The share capital is carried forward at the rate of exchange prevailing on the 

transaction date. The resulting exchange difference on account of translation 

of account balances at the year end is transferred to the Translation Reserve 

Account and the said account is being treated as “Reserve and Surplus”. 

i) Investments 

Long term Investments are stated at Cost, less any provision for permanent diminution in 

value. Such costs are inclusive of acquisition costs directly attributable to the Investments 

such as legal expenses, professional fees etc. incurred during the course of such 

acquisition. Overseas investments are carried at their original rupee cost. 

j) Provisions, Contingent Liabilities and Contingent Assets 

As per Accounting Standard 29, ‘Provisions, Contingent Liabilities and Contingent 

Assets’, the Company recognizes provisions only when it has a present obligation as a 

result of a past event, it is probable that an outfl ow of resources embodying economic 

benefi ts will be required to settle the obligation and when a reliable estimate of the amount 

of the obligation can be made. 

No Provisions is recognized for – 

A. Any possible obligation that arises from past events and the existence of which 

will be confi rmed only by the occurrence or non-occurrence of one or more 

uncertain future events not wholly within the control of the Company; or 

B. Any present obligation that arises from past events but is not recognized 

because- 

1) It is not probable that an outfl ow of resources embodying economic 

benefi ts will be required to settle the obligation; or 

2) A reliable estimate of the amount of obligation cannot be made. 

Such obligations are recorded as Contingent Liabilities. These are 

assessed periodically and only that part of the obligation for which 

an outfl ow of resources embodying economic benefi ts is probable, 

is provided for, except in the extremely rare circumstances where no 

reliable estimate can be made.

Contingent Assets are not recognized in the fi nancial statements since this may result in the recognition of 

income that may never be realized 

3. Contingent Liabilities 

The Company has no liabilities of contingent nature outstanding as at March 31, 2011. 

4. Earnings in Foreign Currency 

Sr. 

No. 

Particulars 2010-11 

` 

2009-10 

` 

1. Software Exports 245,783,369 380,828,992 

Sr. 

No. 


GBP 

2009-10 

GBP 


5. Expenditure in Foreign Currency 

Sr. 

No. 


` 

2009-10 

` 

1. Software Consultancy Charges 221,133,751 334,364,809 

2. Rent 542,838 Nil 

3. Professional Fees 210,247 422,180 

4. Travel Expenses Nil 109,131 

Sr. 

No. 


GBP 

2009-10 

GBP 

1. Software Consultancy Charges 3,119,313 4,914,961 

2. Rent 7,650 Nil 

3. Professional Fees 2,963 6,205 

4. Travel Expenses Nil 1,604 

6. Related party transactions 

During the year the company entered into related party transactions with the following: - 

Sr. 

No. 

Name of Related 

Party 

1. KPIT Cummins 

Infosystems Limited 

Description of 

Relationship 

2. KPIT Cummins Fellow Subsidiary 

Global Business of the Holding 

Solutions Ltd[Merged Company 

with kpit Cummins 

Inosystems Ltd. 

Effective 

March 1, 2011] 

3 KPIT Infosystems 

GmbH 

4. KPIT Infosystems 

GmbH 


GMBH 


GmbH 










Inc. 


Inc. 

Nature of 

Transaction 

Holding Company Software 

Consultancy 

Charges Payable 

Software 

Consultancy 


Subsidiary Reimbursement 

of Expenses to 

KPIT Info GmbH 

Subsidiary Reimbursement 

of Expenses from 

KPIT Info. GmbH 

Subsidiary Interest on term 

Loan 

Amount of 

Transaction 

[`] 

659,762,514 

[752,519,025] 

Nil 

[21,317,789] 

127,829 

[110,145] 

802,953 

[1,017,640] 

182,796 

[265,793] 

Subsidiary Unsecured Loan Nil 

Nil 

Holding Company Reimbursement 


KPIT Cummins 

India 




India 

Holding Company Interest on Term 

Loan 

105,782,534 

[40,644,802] 

1,438,258 

[11,992,349] 

Holding Company Unsecured Loan Nil 

[Nil] 

Fellow subsidiary 

of Holding 

Company 


of Holding 

Company 

Reimbursement 

of Expenses From 

USA 

Reimbursement 

of Expenses To 

USA 

Balance as at 

March 31, 2011 

[`] 

(288,988,337) 

[(179,912,518)] 

Nil 

[(5,730,284)] 

101,505 

[Nil] 

33,910 

[46,440] 

Nil 

[12,112,000] 

9,421,221 

[ 2,658,867] 

139,452 

[621,597] (34,763) 

8,861,190 

[8,942,542] 

Nil 

[106,188] 

[(17,038,428)] 

2,144,006 

[2,245,553] 

5 

Sr. 

No. 


Party 

13. KPITGBS [Merged 



Effective March 1, 

2011] 

14. KPITGBS[Merged 




2011] 



Relationship 


of Holding 

Company 


of Holding 

Company 

15. Solvcentral.com, USA Fellow subsidiary 

of Holding 

Company 

16 Sparta Consulting 

Inc., USA 

17 In2Soft GmbH 

Germany 


Central Europe 

Sp.zo.o. [Merged 

with KPIT Cummins 

Infosystems Ltd. 


2011 



Sp.zo.o [Merged 




2011 


of Holding 

Company 


of Holding 

Company 


of Holding 

Company 


of Holding 

Company 

20. Pankaj Sathe Key Management 

Personnel 

21. Kishor Patil Key Management 

Personnel 

Sr. 

No. 

Name of Related Party Description of 

Relationship 



2. KPIT Cummins Global 

Business Solutions 

Ltd. [Merged with KPIT 

Cummins Infosystems 

Ltd. Effective 

March 1, 2011 

Nature of 

Transaction 

Reimbursement 


KPGB 

Reimbursement 

of Expenses To 

KPGB 

Reimbursement 

of Expenses 

Reimbursement 

of Expenses 

Reimbursement 


In2soft Gmbh 

Germany 

Reimbursement 


KPPL 

Reimbursement 


KPPL 

Salary & 

Reimbursement 

of Expenses 

Salary & 

Reimbursement 

of Expenses 

Nature of 

Transaction 


Consultancy 


Fellow Subsidiary 

of the Holding 

Company 

Software 

Consultancy 


3. KPIT Infosystems GmbH Subsidiary Reimbursement of 

Expenses to KPIT 

Info GmbH 

4. KPIT Infosystems GmbH Subsidiary Reimbursement 


KPIT Info GmbH 

5. KPIT Infosystems GmbH Subsidiary Interest on Term 

Loan 

Amount of 

Transaction 

[`] 

Nil 

[1,779,479] 

Nil 

[145,924] 

Nil 

[24,049] 

7,504,927 

[Nil] 

3,244,240 

[Nil] 

Nil 

[Nil] 

Nil 

[Nil] 

18,006,429 

[19,778,609] 

1,203,933 

[1,280,409] 

Amount of 

Transaction 

[GBP] 

9,805,177 

[9,947,578] 

Nil 

[281,801] 

1,777 

[1,619] 

11,163 

[14,959] 

2,576 

[3,907] 

6. KPIT Infosystems GmbH Subsidiary Unsecured Loan Nil 

[Nil] 












India 

Holding Company Reimbursement of 


Cummins India 

Holding Company Interest on Term 

Loan 

1,470,631 

[1,76,280] 

19,995 

[597,454] 

1,965 

[9,137] 

Holding Company Unsecured Loan Nil 

Nil 

Balance as at 

March 31, 2011 

[`] 

Nil 

[124,155] 

Nil 

[24,049] 

7,504,927 

[Nil] 

3,244,240 

[Nil] 

Nil 

[1,188,331] 

(1,598,303) 

[Nil] 

Nil 

[Nil] 

Balance as at 

March 31, 2011 

[GBP] 

4,017,633 

[2,644,606] 

Nil 

[84,232] 

(1,411) 

[Nil] 

472 

[683] 

Nil 

[178,039] 

130,977 

[39,079] 

(483)

Sr. 

No. 


Name of Related Party Description of 

Relationship 

11. KPIT Infosystems Inc. Fellow subsidiary 

of Holding 

Company 

12.. KPIT Infosystems Inc. Fellow subsidiary 

of Holding 

Company 

13.. KPITGBS [Merged 


Infosystems Ltd. Effective 

March 1, 2011 

14.. KPITGBS [Merged 

with Kpit Cummins 


March 1, 2011 


of Holding 

Company 


of Holding 

Company 

15.. Solvcentral.com, USA Fellow subsidiary 

of Holding 

Company 

16. Sparta Consulting Inc., 

USA 


of Holding 

Company 

17. In2Soft GmbH Germany Fellow subsidiary 

of Holding 

Company 


Central Europe Sp.z.o.o. 

[Merged with KPIT 

Cummins Infosystems 

Ltd. Effective 

March 1, 2011 

19. KPIT Infosystems Central 

Europe Sp. z.o.o.[Merged 



March 1, 2011 


of Holding 

Company 


of Holding 

Company 

20. Pankaj Sathe Key Management 

Personnal 

21. Kishor Patil Key Management 

Personnel 

The fi gures for the previous year are shown in brackets. 

Nature of 

Transaction 

Reimbursement 


USA 

Reimbursement of 

Expenses to USA 

Reimbursement 


GBS 


Expenses to GBS 


Expenses 


Expenses 


Expenses 

Reimbursement 


KPPL 

Reimbursement 


KPPL 

Salary & 


Expenses 

Salary & 


Expenses 

Amount of 

Transaction 

[GBP] 

123,192 

[131,450] 

Nil 

[1,561] 

26,157 

[26,157] 

2,145 

[2,145] 

Nil 

[354] 

104,337 

[Nil] 

45,103 

[Nil] 

Nil 

[Nil] 

NIL 

[Nil] 

253,755 

[261,448] 

16,966 

[16,926] 

Balance as at 

March 31, 2011 

[GBP] 

29,807 

33,008 

1,825 

[1,825] 

Nil 

[354] 

104,337 

[Nil] 

45,103 

[Nil] 

Nil 

[17,468] 

(22,220) 

[(44,541)] 

NIL 

[NIL] 

6 

7. Advances recoverable in cash or in kind or value to be received include ` 1,150,880 (Previous year 

` 2,069,704), GBP 16,000 (Previous year GBP 28,774) towards loan given to the Director, Projects 

and Services. The maximum balance outstanding during the year is ` 2,069,704 (Previous year ` 

2,315,044) GBP 28,774 (Previous year GBP 31,774) 

8. Income Taxes 

No provision for Income Tax has been made in view of the signifi cant accumulated carried 

forward losses. On the grounds of prudence deferred tax asset has not been created on the timing 

differences arising on account of signifi cant carried forward losses. 

9. Disclosure relating to Deferred Income Tax 

During the year, the Company has computed deferred tax in accordance with AS-22 on Taxes on 

Income issued by the Institute of Chartered Accountants of India. However, the net deferred tax 

Asset is GBP 265,451/- (Previous GBP 189,775/-) has not been recognized in the books of account 

on account of consideration of prudence. 

The effect of signifi cant timing difference that results in deferred tax asset & liability as at the end 

of the year as given below. 

(GBP) 

Nature of timing difference 2010-11 2009-10 

Decpreciation (8,108) (8,575) 

Carried forward losses 641,241 641,328 

Nature of timing difference 2010-11 2009-10 

Depreciation (583,235) (648,699) 

Carried forward losses 46,124,465 48,516,463 

10. The above fi nancial statements are prepared from the internally prepared management Accounts 

of the Company. The same management Accounts are audited in order for the Group Auditors to 

give an audit opinion in relation to Group accounts. However, no separate audit report is given in 

respect of the Company. An audit report for the Group is issued by Deloitte Haskins & Sells and is 


11. The previous year’s fi gures have been regrouped, wherever necessary, to conform to the current 

Year’s classifi cation. 

12. During the year KPIT Infosystems Ltd., UK fully repaid loan taken from KPIT Cummins Infosystems 

Ltd. amounting to GBP 250,000 

13. The Company is a wholly owned subsidiary of KPIT Cummins Infosystems Limited. The accounts 

have been prepared and audited to be attached to the accounts of KPIT Cummins Infosystems 

Limited, the holding company to comply with the provisions of Section 212 of the Companies Act, 

in India. 




(`)

KPIT Infosystems Inc. 

Registered Offi ce: 33, Wood Avenue South, Iselin, NJ 08830, USA 



Your Directors are pleased to present herewith the tenth report of the Directors on the operations of the 




USD 


89,895,783 

Net Profi t/(Loss) for the period 316,931 

Operations 

Year 2010-11 

` 

4,098,645,404 

14,449,915 

Year 2009-10 

USD 

73,574,214 

266,167 

Year 2009-10 

` 

3,483,739,018 

12,602,998 

The Company recorded revenue of US$ 89.89 Million during the year as compared to US$ 73.57 Million 

in previous year. 

The Company acquired 100% shares in CPG Solutions LLC (‘CPG’), an Oracle Gold Partner and a focused 

player in solutions for companies in Manufacturing, Supply Chain and Engineering space. The total 

consideration payable for the acquisition is USD 13.2 Million. With effect from October 1, 2010, CPG 

became a wholly owned subsidiary of the Company. 

Consolidated Balance Sheet as at 



USD ` USD ` 



Share capital I 24,209,854 1,110,577,204 18,209,854 841,018,985 

Reserves and surplus II 1,557,028 40,713,320 1,237,714 35,758,988 

25,766,882 1,151,290,524 19,447,568 876,777,973 

Loan Funds 

Unsecured Loans III 450,000 20,092,500 – – 

Deferred tax Liability 11,642 519,815 8,513 384,277 

Total 26,228,524 1,171,902,839 19,456,082 877,162,250 



Gross block 701,357 29,647,541 571,163 23,863,238 


Net block 97,536 5,154,140 81,113 2,623,436 

Goodwill on consolidation 5,774,827 257,846,019 – – 

Investments ** 

Deferred tax Asset 


advances 

V 12,922,201 576,976,263 12,922,201 583,308,141 


Cash and bank balances VII 3,370,605 150,497,512 2,276,928 102,780,539 

Loans and advances VIII 9,867,635 440,589,910 5,527,225 249,498,919 

34,970,875 1,561,449,579 18,872,083 851,885,844 

Less: Current liabilities 

and provisions 

IX 27,536,915 1,229,523,162 12,419,314 560,655,173 

Net current assets 7,433,960 331,926,417 6,452,769 291,230,673 

Total 26,228,524 1,171,902,839 19,456,082 877,162,250 

Notes to Accounts XV 

The Schedules and Notes to Accounts form an integral part of the Financial Statements 


Pune Kishor Patil Ajay Bhagwat 

April 25, 2011 Chairman Director 

7 


The Company’s fi nancial fi gures presented include CPG’s fi nancials from the period October 1, 2010 to 

March 31, 2011. 

Share Capital 

During the year under review, the Company increased its Authorised Share Capital by USD 6 Million. 

Directors 

Mr. Prabhu Bendre resigned from the directorship of the Company with effect from May 31, 2010. 

Dr. Masaru Igarashi was appointed as a director of the Company with effect from October 25, 2010. 

Mr. Girish Wardadkar resigned from the directorship of the Company with effect from April 25, 2011. 

Audit 

The Company is not required by US laws to have an independent audit fi rm to issue a report to the 









KPIT Infosystems Inc. 



Statement of Consolidated Profi t and Loss for the year ended 



USD ` USD ` 

Income 

Software services and products 

- Domestic sales 84,546,124 3,854,736,815 68,678,039 3,251,905,160 

- Export sales 5,349,659 243,908,589 4,896,174 231,833,858 

89,895,783 4,098,645,404 73,574,214 3,483,739,018 

Software development expenses X 78,551,159 3,581,406,571 64,372,879 3,048,055,817 

Gross profi t 11,344,624 517,238,833 9,201,335 435,683,200 

Selling and marketing expenses XI 1,366,752 62,314,748 1,155,260 54,701,553 

General and administration 

expenses 

XII 8,614,491 392,763,093 6,724,367 318,398,762 

Operating profi t before interest, 

depreciation and tax 

1,363,380 62,160,992 1,321,708 62,582,885 

Interest XIII (88,625) (4,040,722) 32,692 1,547,968 

Depreciation IV 80,626 3,675,990 124,164 5,879,148 

Operating profi t after interest, 

depreciation and Before Tax 

1,371,380 62,525,723 1,164,853 55,155,769 

Other income XIV 52,497 2,393,513 1,772 83,915 


Exceptional items 

1,423,877 64,919,236 1,166,625 55,239,684 

Provision for taxation 1,103,817 50,326,660 903,952 42,802,127 

Deferred Tax 3,129 142,661 (3,494) (165,441) 

Profi t/(loss) after tax and before 

Exceptional items 

316,931 14,449,915 266,167 12,602,998 

Exceptional Item - Provision for 

decline in value of Investment in 

Findant Inc., USA 

– – – – 

Profi t/(loss) after tax 

Amount available for 

316,931 14,449,915 266,167 12,602,998 

appropriation 

316,931 14,449,915 266,167 12,602,998 

Amount transferred - profi t and 

(loss) account 

316,931 14,449,915 266,167 12,602,998 


before Exceptional Items 


316,931 14,449,915 266,167 12,602,998 


The Schedule and Notes to Accounts form an integral part of the Financial Statements 



April 25, 2011 Chairman Director

KPIT Infosystems Inc., USA 

Consolidated Cash Flow Statement for the year ended 


March 31, 2011 March 31, 2010 

Particulars 


USD ` USD ` 




1,423,877 64,919,236 1,166,625 55,239,684 

(Profi t)/loss on sale of fi xed assets - - - - 

Depreciation 80,626 3,675,990 124,164 5,604,730 

Interest and fi nancial charges (1,061) (48,333) 32,691 1,547,967 

Interest income (87,565) (3,992,390) - - 

Provision for doubtful debts/(Write 

back of excess provision for bad and 

doubtful debts) 

- - - - 

Dividend received - - - - 

Foreign exchange (gain)/loss - - - - 

Cash fl ow before working capital changes 


1,415,876 64,554,503 1,323,480 62,392,381 

(Increase)/decrease in receivables (10,664,705) (470,755,771) 929,626 111,669,120 

(Increase)/decrease in loans and advances (4,340,411) (191,090,991) (1,688,007) (55,321,856) 

Increase/(decrease) in accounts payable 15,117,600 668,867,989 (2,613,131) (205,247,854) 

Cash infl ow/(outfl ow) from operations 

Direct taxes and extra-ordinary items 

1,528,361 71,575,731 (2,048,032) (86,508,208) 

Taxes paid (1,106,946) (50,469,321) (900,458) (42,636,686) 

Deferred tax 3,129 135,538 (3,494) (227,480) 

Exceptional Items - - - - 



424,544 21,241,949 (2,951,984) (129,372,374) 

Purchase of fi xed assets (97,048) (6,206,695) (6,775) (136,431) 

Goodwill on acquisition of CPG (5,774,827) (257,846,019) - - 

(Increase)/decrease in investments - 6,331,878 (10,760,867) (473,188,179) 

Interest received 87,565 3,992,390 - - 



(5,784,310) (253,728,445) (10,767,642) (473,324,610) 

Issue of shares 6,000,000 269,558,219 12,750,000 596,781,250 

Increase/(decrease) in capital reserve - - - - 

Profi t distributed to shareholders 2,383 - - - 

Increase/(decrease) in working capital 

loan 

450,000 20,092,500 - - 

Interest and fi nance charges 1,061 48,333 (32,691) (1,547,967) 

Net cash used in fi nancing activity 6,453,444 289,699,051 12,717,309 595,233,283 


Net Increase/(decrease ) in cash and 

- (9,495,582) - (56,833,220) 

cash equivalents (A + B + C + D) 1,093,679 47,716,973 (1,002,316) (64,296,921) 

Cash and cash equivalents at close of 

the year (refer note below) 

3,370,607 150,497,512 2,276,928 102,780,539 

Cash and cash equivalents at beginning 

of the year (refer note below) 

2,276,928 102,780,539 3,279,244 167,077,460 

Cash surplus/(defi cit) for the year 

Note: 


1,093,679 47,716,973 (1,002,316) (64,296,921) 

Remittance in Transit 

Balance with non-scheduled banks 

- - - - 

- On current accounts 3,370,605 150,497,512 2,276,928 102,780,539 

- On deposit account - - - - 

3,370,605 150,497,512 2,276,928 102,780,539 



April 25, 2011 Chairman Director 

8 

Schedules forming part of the Balance Sheet as on 


March 31, 2011 March 31, 2010 

USD ` USD ` 


Authorised 

100,000 common shares with no par value 5,590,000 334,782,764 5,590,000 334,782,764 

Issued, Subscribed and Paid Up 

10,892 common shares 

(Previous year 10,592) 

10,892 shares are held by the holding 

company KPIT Cummins Infosystems 

Limited 

24,209,854 1,110,577,204 18,209,854 841,018,985 

Total 24,209,854 1,110,577,204 18,209,854 841,018,985 


Capital reserve 

As per last Balance Sheet 31,780 1,418,977 31,780 1,434,549 

Additions during the year - - - - 

General reserve 

31,780 1,418,977 31,780 1,434,549 

As per last Balance Sheet 1,208,317 90,113,736 939,767 77,510,739 

Transferred from Profi t and Loss 

Account 

316,931 14,449,915 266,167 12,602,998 

Translation reserve 

1,525,248 104,563,651 1,205,934 90,113,736 

As per last Balance Sheet - (55,789,297) - 859,281 

Additions during the year - (9,480,010) - (56,648,578) 

- (65,269,308) - (55,789,297) 

Total 1,557,028 40,713,320 1,237,714 35,758,988 


Loan from KPSO 450,000 20,092,500 - - 

Total 450,000 20,092,500 - -

Schedules forming part of the Balance Sheet as on 




April 1, 

2010 

Opening 

Balance 

as per CPG 

9 


Gross Block Depreciation Net Block 


Discarded 

Exchange 

Gain/Loss 

As on 

March 31, 

2011 

Upto 

April 1, 

2010 

Opening 

Balance 

as per CPG 

For the 

Period 

On 

Deduction/ 

Discarded 

Exchange 

Gain/Loss 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

USD 

As on 

March 31, 

2010 

Building - - 14,228 - - 14,228 - - - - - - 14,228 - 

Computer Hardware 178,743 90,999 19,250 10,771 - 278,221 159,561 40,986 22,618 8,609 - 214,556 63,665 19,182 

Offi ce Equipment 26,840 - 860 1,137 - 26,563 26,416 - 295 303 - 26,408 155 424 

Furniture and Fixtures 55,716 3,956 12,808 - - 72,480 45,570 1,072 6,351 - - 52,992 19,488 10,146 

Electrical Equipments 1,850 - - - - 1,850 1,850 - - - - 1,850 - - 

Goodwilll 308,016 - - - - 308,016 256,654 - 51,362 - - 308,016 - 51,361 

Total 571,164 94,955 47,146 11,908 - 701,357 490,051 42,058 80,626 8,912 - 603,822 97,536 81,113 

Previous Year 564,389 - 6,775 - - 571,164 365,887 - 124,163 - - 490,050 81,113 198,502 


April 1, 

2010 

Opening 

Balance 

as per CPG 



Discarded 

Exchange 

Gain/Loss 

As on 

March 31, 

2011 

Upto 

April 1, 

2010 

Opening 

Balance 

as per CPG 

For the 

Period 

On 

Deduction / 

Discarded 

Exchange 

Gain/Loss 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

` 

As on 

March 31, 

2010 

Building - - 635,290 - - 635,290 - - - - - - 635,290 - 

Computer Hardware 7,880,163 4,087,658 830,462 (480,924) (24,570) 12,292,789 7,186,280 1,841,085 1,031,239 384,399 (23,669) 7,809,452 4,483,337 693,883 

Offi ce Equipment 1,243,273 - 38,629 (50,771) - 1,231,131 1,225,927 - 13,457 13,533 - 1,225,851 5,279 17,346 

Furniture and Fixtures 2,426,478 177,716 571,883 - (1,068) 3,175,009 1,998,612 48,145 289,550 - (790) 2,287,372 887,637 427,866 

Electrical Equipments 85,100 - - - - 85,100 81,336 - - - - 81,336 3,764 3,764 

Goodwill 12,228,223 - - - - 12,228,223 10,747,646 - 2,341,743 - - 13,089,390 (861,167) 1,480,577 

Total 23,863,237 4,265,374 2,076,263 (531,695) - 29,647,541 21,239,802 1,889,230 3,675,990 397,932 (24,459) 24,493,401 5,154,140 2,623,435 

Previous Year 23,726,806 - 136,431 - - 23,863,238 15,635,071 - 5,604,730 - - 21,239,802 2,623,436 8,091,735 

March 31, 2011 March 31, 2010 

USD ` USD ` 


Long-term investments 

Trade (Unquoted) 


Solvcentral.com, Inc. 

A subsidiary company incorporated in USA 

2550 equity shares at par - Solvcentre 4,861,334 217,058,559 4,861,334 219,440,613 

Sparta Consulting Inc., USA 8,060,867 359,917,704 8,060,867 363,867,529 

Investment in shares of Findant Inc. 342,136 15,276,372 342,136 15,444,019 

Provision for decline in the value of investments (342,136) (15,276,372) (342,136) (15,444,019) 

Total 12,922,201 576,976,263 12,922,201 583,308,141 


Unsecured 

Outstanding for a period exceeding six months 

Considered good - - - - 

Considered doubtful - - 213,015 9,615,480 

Other Debts 

- - 213,015 9,615,480 

Considered good 21,732,635 970,362,157 10,860,423 490,239,487 

Considered doubtful - - 4,404 198,801 

21,732,635 970,362,157 10,864,827 490,438,289 

Less: Reserve for doubtful debts - - (9,911) (447,383) 

21,732,635 970,362,157 11,067,931 499,606,386 

Total 21,732,635 970,362,157 11,067,931 499,606,386 

March 31, 2011 March 31, 2010 

USD ` USD ` 


Cash on hand 

Cheques on hand 


On current accounts 

Ro CITI Bank 3,370,605 150,497,512 2,276,928 102,780,539 

Total 3,370,605 150,497,512 2,276,928 102,780,539 




or for value to be received 90,340 4,033,689 179,101 8,084,602 

Due from Group companies 12,167 543,264 9,871 445,569 

Loan to Sparta Consulting Inc. 5,563,976 248,431,522 3,001,772 135,499,998 

Advance Tax 4,037,818 180,288,590 2,252,864 101,694,266 

Prepaid expenses 134,263 5,994,852 54,684 2,468,416 

Deposits 29,070 1,297,993 28,934 1,306,068 

Total 9,867,635 440,589,910 5,527,225 249,498,919 

SCHEDULE - IX CURRENT LIABILITIES 

AND PROVISIONS 



For goods and services 2,738,321 122,266,035 624,929 28,256,606 

For accrued salaries and benefi ts 1,531,746 68,392,476 769,783 34,747,992 

Due to Group companies 19,298,549 861,680,227 8,084,698 364,943,269 

23,568,617 1,052,338,738 9,479,410 427,947,868 

Provisions 

For expenses 450,763 20,126,576 526,189 23,752,164 

For Taxation 3,517,533 157,057,848 2,413,716 108,955,140 

3,968,296 177,184,424 2,939,905 132,707,304 

Total 27,536,915 1,229,523,162 12,419,314 560,655,172


Schedules to Profi t and Loss Account for the year ended 


March 31, 2011 March 31, 2010 

USD ` USD ` 

SCHEDULE - X SOFTWARE 


Salaries and bonus 

Consultancy charges 63,247,830 2,883,677,297 54,648,222 2,587,593,332 

Visa expenses 1,288,697 58,755,963 771,874 36,548,215 

Cost of service delivery 14,014,632 638,973,311 8,952,783 423,914,270 

Total 78,551,159 3,581,406,571 64,372,879 3,048,055,817 

SCHEDULE - XI SELLING AND 


Marketing services expenses 469,208 21,392,745 531,838 25,182,511 

Marketing travel expenses 897,544 40,922,003 623,422 29,519,042 

Total 1,366,752 62,314,748 1,155,260 54,701,553 

SCHEDULE - XII GENERAL AND 


Salaries and bonus 

Recruitment and training 

5,861,723 267,255,277 4,386,580 207,704,584 

expenses 382,247 17,427,890 149,296 7,069,180 

Rent, rates and taxes 415,467 18,942,530 531,837 25,182,474 

Communication expenses 297,476 13,562,905 234,663 11,111,314 

Professional and legal expenses 590,494 26,922,558 472,114 22,354,611 

Printing and stationery 31,372 1,430,332 28,718 1,359,802 

Repairs to others 470,311 21,443,016 321,267 15,211,990 

Insurance charges 198,982 9,072,241 189,576 8,976,420 

Audit fees 

Provision for bad and doubtful 

17,318 789,590 17,008 805,324 

debts (9,911) (451,876) 9,911 469,286 

Other Offi ce Expenses 356,018 16,232,042 383,396 18,153,778 

Total 8,614,491 392,763,093 6,724,367 318,398,762 

SCHEDULE - XIII INTEREST, 

NET 

Financial charges (1,060) (48,332) 32,692 1,547,968 

Lease rent - - - - 

Less: 

(1,061) (48,333) 32,691 1,547,967 

Interest income 87,565 3,992,390 - - 

Total (88,625) (4,040,722) 32,692 1,547,968 

SCHEDULE - XIV OTHER 

INCOME 

Forex Gain/Loss 52,497 2,393,513 1,772 83,915 

Total 52,497 2,393,513 1,772 83,915 


1. Basis of consolidation 

The Consolidated Financial Statements relate to KPIT Infosystems Inc. (the Company) and its 

subsidiary CPG Solutions LLC. 

a) Principles of consolidation: 

The Consolidated Financial Statements have been prepared on the following basis: 

i. The Financial Statements of the Company and its subsidiary have been combined on a 

line-by-line basis by adding together the book value of like items of assets, liabilities, 

income and expenses. The intra-group balances and intra-group transactions and 

unrealized profi ts or losses have been fully eliminated. 

ii. The excess of cost to the Company of its investments in the Subsidiary Companies over 

its share of equity of the subsidiary companies, at the dates on which the investment 

in the Subsidiary Companies are made, is recognized as ‘Goodwill on Consolidation’ 

being an asset in the Consolidated Financial Statements. Alternatively, where the share 

of equity in the subsidiary companies on the date of investment is in excess of cost of 

investment of the Company, it is recognised as ‘Capital Reserve’ and shown under the 

head ‘Reserves and Surplus’ in the Consolidated Financial Statements. 

b) Following subsidiaries are considered in the Consolidated Financial Statements: 

% voting power held 

Sr. Name of the Subsidiary Country of As at March 31, As at March 31, 

No. 

Incorporation 

2011 

2010 

1. CPG Solutions LLC US 100.00 N.A 

10 


KPIT Infosystems Inc. is a company incorporated in the State of New Jersey, USA. On October 

1, 2010, the Company has acquired 100% shares of CPG Solutions LLC, USA, a provider of 

premium Oracle Consulting services to manufacturing and supply chain companies for an upfront 

consideration of USD 6,000,000. The agreement is for a total consideration of USD 13,200,000 

which includes an upfront payment of USD 6,000,000 and a milestone based consideration of 

USD 7,200,000. The payment of milestone based consideration is based on the achievement of the 

performance target set forth in the agreement over the performance period which commences on 

October 1, 2010 and ending on October 1, 2012. 

The Company after consolidating CPG LLC, has made a profi t of ` 14,449,915, (USD 316,931) in 

the current fi nancial year. The company’s accumulated Profi t till March 2011 of ` 104,563,651, 

(USD 1,525,248) and the Working Capital of ` 331,926,417 (USD 7,433,960) as of that date, have 

presently been funded by the holding company, by way of capital contribution. During the year KPIT 

Cummins Infosystems Ltd. has invested further capital of USD 6,000,000. 



The fi nancial statements have been prepared on historical cost convention and on accrual 

basis, in accordance with Generally Accepted Accounting Principles (GAAP) as applicable in 

India and the provisions of the Companies Act, 1956. The accounting standards issued by the 

Institute of Chartered Accountants of India have been complied with to the extent applicable to 

the Company. 


recognised on an accrual basis. 


Revenue from software development and services on time and material basis is recognized 

based on software development, services rendered and billed to clients as per the contractual 

obligations. In case of fi xed price contracts, revenue is recognized based on the milestone/s 

achieved as agreed upon in the contract on proportionate completion basis. 


Expenses are accounted on an accrual basis and provisions are made for all known losses and 

liabilities. 


Fixed assets are stated at the cost of acquisition, less accumulated depreciation. Direct costs 

are capitalized till the assets are ready to put to use. 


Depreciation on fi xed asset of the Company is provided based on expected useful life of the 

assets at the following rates on straight-line method (SLM): 

Class of Asset Rates of Depreciation 

KPIT Infosystems Inc CPG Solutions LLC 

Computer Hardware 20% - SLM 25% - SLM 

Offi ce Equipments 20% - SLM 

Furniture and Fixtures 20% - SLM 25% - SLM 

Electrical Equipments 10% - SLM 

Goodwill Amortized over 3 years 




exceeds the present value of future cash fl ows expected to arise from the continuing use of 

the asset and its eventual disposal. The impairment loss to be expensed is determined as the 

excess of the carrying amount over the higher of the asset's net sales price or present value as 

determined above. 

During the year under consideration, there was no indication, either internal or external as to 

the impairment of any of the assets. 

g) Conversion into Indian Rupees 

The transaction in reporting currency, i.e. USD, have been converted for reporting in Indian 

Currency, i.e. INR on the following basis. 

• For the purpose of preparation of the accounts during the year, all income and expense 

items are converted at the average rate of exchange applicable for the year. All assets and 

liabilities are translated at the closing rate as on the balance sheet date except for fi xed 

assets which are converted at the exchange rate prevailing at the time of acquisition of 

these assets. 

• The Share Capital is carried forward at the rate of exchange prevailing on the transaction 

date. The resulting exchange difference on account of translation at the year end is 

transferred to the Translation Reserve Account and the said account is being treated as 

“Reserve and Surplus”. 

h) Investments 

Long-term Investments are stated at Cost, less any provision for permanent diminution in 


such as legal expenses, professional fees etc. incurred during the course of such acquisition. 

Overseas investments are carried at their original rupee cost. 

i) Provisions, Contingent Liabilities and Contingent Assets 

As per Accounting Standard 29, ‘Provisions, Contingent Liabilities and Contingent Assets’, 

the Company recognizes provisions only when it has a present obligation as a result of a past 

event, it is probable that an outfl ow of resources embodying economic benefi ts will be required 

to settle the obligation and when a reliable estimate of the amount of the obligation can be 

made.

Sr. 

No. 


A. Any possible obligation that arises from past events and the existence of which will be 

confi rmed only by the occurrence or non-occurrence of one or more uncertain future 

events not wholly within the control of the Company; or 

B. Any present obligation that arises from past events but is not recognized because- 

1) It is not probable that an outfl ow of resources embodying economic benefi ts will 

be required to settle the obligation; or 


Such obligations are recorded as Contingent Liabilities. These are assessed periodically and 

only that part of the obligation for which an outfl ow of resources embodying economic benefi ts 

11 


is probable, is provided for, except in the extremely rare circumstances where no reliable 

estimate can be made. 

Contingent Assets are not recognized in the fi nancial statements since this may result in the 

recognition of income that may never be realized. 




During the year the Company entered into following related party transactions with the following. The 

fi gures for the last year are mentioned in Bracket at the bottom of Amount column. 

Name of Related Party Description of Relationship Nature of Transaction Amount of Transaction 

(`) 

Balance as at 

March 31, 2011 

(`) 

1. KPIT Cummins Infosystems Limited Holding Company Software Consultancy Charges Payable 2,322,114,451 

733,998,381 

[1,472,311,563] [(230,421,057)] 

2 KPIT Cummins Global Business Solutions 

Ltd. [Merged with KPIT Cummins 

Infosystems Ltd. Effective March 1, 2011] 

Fellow Subsidiary of KPIT Cummins Infosystems Limited Software Consultancy Charges Payable Nil 

[444,954,111] 

Nil 

[(100,215,444)] 

3 KPIT Cummins Infosystems Limited Holding Company Reimbursement of expenses to 

165,240,391 

KPIT Cummins India 

[136,385,312] 60,738,541 

4 KPIT Cummins Infosystems Limited Holding Company Reimbursement of expenses from 

37,768,340 [(31,927,386)] 


[24,726,564] 




Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of expenses to 

KPIT Cummins Global Business 

Solutions Ltd. 

Nil 

[1,086,814] Nil 




Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of expenses From 

KPIT Cummins Global Business 

Solutions Ltd. 

Nil 

[9,891,318] 

[151,791] 

7 Solvcentral.com Inc., USA Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses to 

62,939,177 

Solv Central.Com, USA 

[60,485,746] 10,929,739 

8 Solvcentral.com Inc., USA Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses from 

63,444,312 

[(84,499)] 


[33,843,297] 

9 Solvcentral.com Inc., USA Fellow Subsidiary of KPIT Cummins Infosystems Limited Loan payable to Solvcentral.com. Inc 22,325,000 

20,092,500 

[Nil] 

[Nil] 

10 KPIT Infosystems Ltd., UK Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses to 

7,636,892 

KPIT Infosystems Ltd., UK 

[2,139,950] 2,120,311 

11 KPIT Infosystems Ltd., UK Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses from 

Nil [(2,249,890)] 


[94,806] 

12 KPIT Infosystems Central Europe Sp.z.o.o. 

[Merged with KPIT Cummins Infosystems 

Ltd. Effective March 1, 2011] 

Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses from 

KPIT Infosystems Central Europe Sp.z.o.o. 

Nil 

[Nil] 

Nil 

[549,226] 

13 Sparta Consulting Inc., USA Fellow Subsidiary of KPIT Infosystems Inc. Loan given to Sparta Consulting Inc., USA 111,625,000 

245,575,000 

[135,420,000] [135,499,998] 

14 Sparta Consulting Inc., USA Fellow Subsidiary of KPIT Infosystems Inc. Interest on Loan given to Sparta Consulting 

3,992,390 

2,916,666 

Inc., USA 

[83,904] 

[83,904] 

15 Sparta Consulting Inc., USA Fellow Subsidiary of KPIT Infosystems Inc. Reimbursement of expenses from Sparta 

28,509,217 

28,509,217 

Consulting Inc., USA 

[Nil] 

[Nil] 

16 Sachin Tikekar Key Management Personnel Salary & Reimbursement of expenses 322,867 

Nil 

[453,290] 

[Nil] 

17 Chinmay Pandit Relative of Key Management Personnel Salary & Reimbursement of expenses 143,638 

Nil 

[6,384,439] 

[Nil] 

18 Jayada Pandit Relative of Key Management Personnel Salary & Reimbursement of expenses 89,713 

Nil 

[1,320,576] 

[Nil] 

19 Nitin Tarte Key Management Personnel Salary & Reimbursement of expenses Nil 

Nil 

[846,951] 

[Nil] 

Sr. 

No. 


[USD] 

Balance as at 

March 31, 2011 [USD] 

1. KPIT Cummins Infosystems Limited Holding Company Software Consultancy Charges Payable 52,007,043 

16,438,934 

[32,616,561] [(5,104,587)] 




Fellow Subsidiary of KPIT Cummins Infosystems Limited Software Consultancy Charges Payable Nil 

[9,857,202] 

Nil 

[(2,220,103)] 

3 KPIT Cummins Infosystems Limited Holding Company Reimbursement of expenses to 

3,700,793 


[3,021,385] 1,360,326 

4 KPIT Cummins Infosystems Limited Holding Company Reimbursement of marketing expenses from 

845,875 

[707,297] 

KPIT Cummins Infosystems Ltd. 

[547,775]

Sr. 

No. 



[USD] 

Nature of timing difference Amount Deferred Tax Liability 

Depreciation** 1,528,861 519,815 

** As depreciation as per books is higher than the depreciation as per tax laws. 

(`) 

(USD) 


Depreciation** 34,241 11,642 

9. 


Visa fee expenses are being written off over a period of one year in line with the policy of the holding 

company, KPIT Cummins Infosystems Limited. 

12 

Balance as at 

March 31, 2011 [USD] 




Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses to 

KPIT Cummins Global Solutions Ltd. 

Nil 

[24,077] Nil 





KPIT Cummins Global Solutions Ltd. 

Nil 

[219,125] 

[(3363)] 

7 Solvcentral.com Inc., USA Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses to 

1,409,612 

Solv Central.Com 

[ 1,339,959] 244,787 

8 Solvcentral.com Inc., USA Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses from 

1,420,925 

[(1,872)] 


[749,741] 

9 Solvcentral.com Inc., USA Fellow Subsidiary of KPIT Cummins Infosystems Limited Loan payable to Solvcentral.com. Inc. 500,000 

450,000 

[Nil] 

[Nil] 

10 KPIT Infosystems Ltd., UK Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses to 

171,039 


[47,407] 47,487 

11 KPIT Infosystems Ltd., UK Fellow Subsidiary of KPIT Cummins Infosystems Limited Reimbursement of marketing expenses from 

Nil 

[(49,842)] 


[2,100] 

12 KPIT Infosystems Central Europe Sp.z.o.o. 

[Merged with KPIT Cummins Infosystems 

Ltd. Effective March 1, 2011] 


KPIT Infosystems Central Europe Sp.z.o.o. 

Nil 

[Nil] 

Nil 

[12,167] 

13 Sparta Consulting Inc., USA Fellow Subsidiary of KPIT Infosystems Inc Loan given to Sparta Consulting inc.USA 2,500,000 

5,500,000 

[3,000,000] 

[3,000,000] 

14 Sparta Consulting Inc., USA Fellow Subsidiary of KPIT Infosystems Inc Interest on Loan given to Sparta Consulting 

87,565 

63,976 

Inc., USA 

[1,772] 

[1,772] 

15 Sparta Consulting Inc., USA Fellow Subsidiary of KPIT Infosystems Inc Reimbursement of expenses from Sparta 

625,294 

625,294 

Consulting Inc., USA 

[Nil] 

[Nil] 

16 Sachin Tikekar Key Management Personnel Salary and Reimbursement of expenses 7,231 

Nil 

[10,042] 

[Nil] 

17 Chinmay Pandit Relative of Key Management Personnel Salary and Reimbursement of expenses 3,217 

Nil 

[141,436] 

[Nil] 

18 Jayada Pandit Relative of Key Management Personnel Salary and Reimbursement of expenses 2,009 

Nil 

[29,255] 

[Nil] 

19 Nitin Tarte Key Management Personnel Salary and Reimbursement of expenses Nil 

Nil 

[18,763] 

Nil 

The previous years fi gures are shown in brackets. 


10. The previous year’s fi gures have been regrouped, wherever necessary, to confi rm to the current 

Net Provision of ` 50,326,660 (USD 1,103,817) has been made in the books for the current year 

year’s classifi cation. 

2010-11 based on tax laws in USA in respect of Federal Tax & State Tax. The Company has provided 11. The Company is a wholly owned subsidiary of KPIT Cummins Infosystems Limited. The accounts 

deferred Tax Liability of ` 142,661 (USD 3,129) on the timing difference arising on account of carried 

have been prepared and audited to attach to the accounts of KPIT Cummins Infosystems Limited, the 

forward losses and taxes under the provisions of minimum alternate tax. 

holding company to comply with the provisions of Section 212 of the Companies Act, 1956 in India. 

7. Maximum Bank Balances 

12. During 2009-10, KPIT Infosystems Inc., USA, had acquired 100% shares of Sparta Consulting Inc., 

USA (California based SAP solutions Firm) for initial merger consideration of USD 8,000,000 and 

Sr. Bank Name Nature of Account Maximum Balance 

the same is a wholly owned subsidiary of KPIT Infosystems Inc., USA. KPIT Infosystems Inc., USA 

No. 

(`) 

shall pay Additional Merger Consideration to the equity holders of Sparta Consulting Inc aggregate 

1. Citi Bank USD - Current a/c 472,775,130 

amount not exceeding USD 24,000,000. The payment of additional merger consideration is based on 

the achievement of the performance targets set forth in the agreement over the performance period 

2. Citi Bank Health Insurance Insurance - Current a/c 5,187,173 

which commences on January 1, 2010 and ending on December 31, 2012. KPIT Infosystems Inc, 

USA will also pay Deferred Merger Consideration on the second anniversary of the Closing Date, not 


exceeding an amount of USD 2,000,000. 

No. 

(USD) 

During the current year KPIT Infosystems Inc., USA has granted an additional loan of USD 2,550,000 

1. Citi Bank USD - Current a/c 10,588,469 

to Sparta Consulting Inc. (Total Loan amt 5.500,000). 

2. Citi Bank Health Insurance Insurance - Current a/c 116,174 

13. The above fi nancial statements are prepared from the internally prepared management Accounts of 

the Company. The same management Accounts are audited in order for the Group Auditors to give 

8. Pursuant to the Accounting Standard (AS-22) on “Accounting for taxes on income” issued by the 

an audit opinion in relation to Group Accounts. However, no separate audit report is given in respect 

Institute of Chartered Accountants of India which is mandatory, the Company has considered the 

of the company. An audit report for the Group is issued by Deloitte Haskins & Sells and is included 

effect of timing differences in the tax expenses in the Profi t and Loss Account and deferred tax a 

asset/liability in the Balance Sheet. 

in its fi nancial statements. 



April 25, 2011 Chairman Director

KPIT Infosystems GmbH 

Registered Offi ce: Mainzer Landstrasse 176, 60327, Frankfurt am Main, Germany 



Your Directors are pleased to present herewith the sixth report of the Directors on the operations of the 




Euro 


Net Profi t/(Loss) for the period 

9,203,759 

271,048 

Year 2010-11 

` 

555,454,544 

16,357,967 

Year 2009-10 

Euro 

7,535,517 

(270,095) 

Year 2009-10 

` 

503,441,629 

(18,044,788) 

Operations 

The Company recorded a revenue of Euro 9.20 Million during the year as compared to Euro 7.53 Million 

in previous year. 

The Company acquired 74% shareholding in In2Soft GmbH, Germany (‘In2Soft’). With effect from October 

1, 2010, In2Soft became a subsidiary of the Company. In2Soft is an expert in diagnostics and telematics 

for the automotive industry. The fi xed consideration payable for acquisition of In2Soft is Euro 2.5 Million. 


Pursuant to Section 212 of the Companies Act, 1956 


EUR ` EUR ` 

SOURCES OF FUNDS 


Share capital I 2,450,000 146,662,500 50,000 2,687,100 

Reserves and surplus II - 7,185,123 - 191,401 

2,450,000 153,847,623 50,000 2,878,501 

Loan Funds 

Unsecured Loans III - - 200,000 12,111,998 

APPLICATION OF FUNDS 

Total 2,450,000 153,847,623 250,000 14,990,499 


Gross block 53,657 3,393,257 51,206 3,101,014 


Net block 23,319 1,474,744 28,043 1,698,314 

Investments 

Current Assets, Loans and 

Advances 

V 1,700,000 107,508,000 - - 


Cash and bank balances VII 963,888 60,956,302 543,630 32,922,234 

Loans and advances VIII 219,794 13,899,760 210,283 12,734,710 

3,279,275 207,381,444 3,082,280 186,662,961 

Less: Current liabilities 

and provisions IX 2,924,828 184,966,129 3,503,605 212,178,312 

Net current assets 354,447 22,415,315 (421,324) (25,515,346) 

(Profi t) and Loss Account X 372,234 22,449,563 643,282 38,807,530 

Total 2,450,000 153,847,623 250,000 14,990,499 


The Schedules and Notes to Accounts form an Integral Part of the Financial Statements 




13 


Share Capital 

During the year, the Company increased its Authorised Share Capital by Euro 2.4 Million. 

Directors 

Mr. Girish Wardadkar has resigned from the directorship of the Company with effect from April 25, 2011. 

Audit 

The Company is not required by German laws to have an independent audit fi rm to issue a report to the 












Profi t and Loss Account for the year ended 



EUR ` EUR ` 

Income 

Software Services and Products 


Export Sales 3,474,990 209,718,546 2,259,196 150,934,993 

9,203,759 555,454,544 7,535,517 503,441,629 

Software Development Expenses XI 8,071,629 487,129,458 6,618,742 442,192,583 

Gross profi t 1,132,131 68,325,086 916,775 61,249,047 

Selling and Marketing Expenses 

General and Administration 

XII 95,801 5,781,664 307,260 20,527,778 

Expenses 

Operating Profi t before Interest, 

XIII 746,711 45,064,657 860,883 57,514,865 

Depreciation and Tax 289,618 17,478,765 (251,368) (16,793,597) 

Interest XIV 8,954 540,410 11,062 739,046 

Depreciation 

Operating Profi t after Interest, 

IV 7,175 433,020 7,666 512,146 

Depreciation and Tax 273,490 16,505,335 (270,095) (18,044,788) 

Other Income 

Profi t before Tax and 

(2,442) (147,368) - - 

Extra-ordinary Items 271,048 16,357,967 (270,095) (18,044,788) 

Provision for Taxation 

Profi t after Tax and before 

- - - - 

Extra-ordinary Items 

Extraordinary Item - Prior Period 

271,048 16,357,967 (270,095) (18,044,788) 

Expenses - - - - 

Profi t/(Loss) after Tax 271,048 16,357,967 (270,095) (18,044,788) 







Cash Flow Statement for year ended 


March 31, 2011 March 31, 2010 

EUR ` EUR ` 

A] CASH FLOW FROM OPERATING 

ACTIVITIES 




271,048 16,357,967 (270,095) (18,044,788) 

Depreciation 7,175 515,814 7,548 349,073 


Interest income (1,208) (72,903) (1,752) (117,079) 

Cash fl ow before working capital changes 


287,177 17,414,192 (251,484) (16,956,668) 

(Increase)/decrease in receivables 232,775 8,480,635 1,317,367 105,008,266 

(Increase)/decrease in loans and advances (9,511) (1,165,050) (12,403) 618,178 

Increase/(decrease) in accounts payable. (578,777) (27,212,184) (448,917) (54,537,856) 

Cash infl ow/(outfl ow) from operations (68,336) (2,482,406) 604,563 34,131,919 


B] CASH FLOW FROM INVESTING 

ACTIVITY 

(68,336) (2,482,406) 604,563 34,131,919 

Purchase of fi xed assets (2,451) (292,244) (1,133) 277,896 

Increase in investments (1,700,000) (107,508,000) - - 

Interest received 1,208 72,903 1,752 117,079 


C] CASH FLOW FROM FINANCING ACTIVITY 

(1,701,243) (107,727,341) 620 394,975 

Issue of shares 2,400,000 143,975,400 - - 

Increase/(decrease) in working capital loan (200,000) (12,112,001) (155,000) (11,843,402) 


Net cash used in fi nancing activity 2,189,838 131,250,085 (167,815) (12,699,528) 

D] EXCHANGE (GAIN)/LOSS - 6,993,730 - 3,924,309 

Net Increase/(decrease) in cash and cash 

equivalents (A + B + C + D) 

420,258 28,034,068 437,368 25,751,676 

Cash and cash equivalents at close of the 

year (refer note below) 

963,888 60,956,302 543,630 32,922,234 

Cash and cash equivalents at beginning of 


543,630 32,922,234 106,262 7,170,558 


Note: 



420,258 28,034,068 437,368 25,751,676 

- On current accounts 963,888 60,956,302 543,630 32,922,234 

963,888 60,956,302 543,630 32,922,234 




14 

Schedules annexed to and forming part of the Balance Sheet 


March 31, 2011 March 31, 2010 

EUR ` EUR ` 

SCHEDULE – I SHARE CAPITAL 

AUTHORISED 

2 Equity Shares of Nominal Amount EUR 

20,000 & EUR 30,000 (Previous year EUR 

20,000 & EUR 30,000) respectively 2,450,000 146,662,500 50,000 2,687,100 

ISSUED, SUBSCRIBED AND PAID UP 

2 Equity Shares of Nominal Amount EUR 

20,000 & EUR 30,000 (Previous year EUR 

20,000 & EUR 30,000) respectively 

2,450,000 146,662,500 50,000 2,687,100 

Total 2,450,000 146,662,500 50,000 2,687,100 

SCHEDULE – II RESERVES AND SURPLUS 

Translation Reserve 

As per last Balance Sheet - 191,401 - (3,732,908) 

Add: Additions for the year - 6,993,722 - 3,924,309 

Total - 7,185,123 - 191,401 

SCHEDULE – III UNSECURED LOANS 

Loan from Group Company - - 200,000 12,112,000 

- - 200,000 12,112,000



SCHEDULE – IV FIXED ASSETS 


April 1, 

2010 

15 


GROSS BLOCK DEPRECIATION NET BLOCK 


Discarded 

As on 

March 31, 

2011 

Up to 

April 1, 

2010 

For the 

year 

On 

Deductions/ 

Discarded 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

Euro 

As on 

March 31, 

2010 

Furniture and Fixtures 31,368 - - 31,368 12,200 2,875 - 15,075 16,292 19,167 

Plant and Machinery 3,598 - - 3,598 2,463 825 - 3,288 310 1,135 

Computers 16,239 2,451 - 18,691 8,498 3,475 - 11,973 6,717 7,741 

51,206 2,451 - 53,657 23,162 7,175 - 30,337 23,320 28,044 

Previous year 50,073 2,309 1,176 51,206 15,614 7,666 118 23,162 28,044 34,459 


April 1, 

2010 

Adjustment 

Asset 

Translation 

March 31, 2011 March 31, 2010 

EUR ` EUR ` 

SCHEDULE – V INVESTMENTS 

Equity Shares in In2Soft GmbH 1,700,000 107,508,000 - - 

1,700,000 107,508,000 - - 

SCHEDULE – VI SUNDRY DEBTORS 

Unsecured 

Outstanding for a period exceeding six 

months 

Considered Good 12,737 805,495 279,834 16,946,731 

Considered Doubtful 

Other Debts 

- - 13,846 838,497 


Considered Doubtful - - - - 

2,082,856 131,719,886 2,034,688 123,220,788 

Less: Provision for Doubtful Debts - - - - 

Total 2,095,593 132,525,382 2,328,368 141,006,017 

SCHEDULE – VII CASH AND BANK BALANCES 


On current accounts with HSBC Bank 


- - - - 

On current accounts with Hypovereins Bank 

(For maximum balances see Note No. 7 of 

Schedule XV) 

963,888 60,956,302 543,630 32,922,234 

Total 963,888 60,956,302 543,630 32,922,234 

SCHEDULE – VIII LOANS AND ADVANCES 


Advances recoverable in cash or in kind or for 

value to be received 1,440 91,066 1,890 114,458 

Dues from Group Companies 88,805 5,616,041 73,056 4,424,245 


182,474 11,539,672 187,333 11,344,882 

Deposits 37,320 2,360,088 22,950 1,389,828 

Total 219,794 13,899,760 210,283 12,734,710 

GROSS BLOCK DEPRECIATION NET BLOCK 


Discarded 

As on 

March 31, 

2011 

Up to 

April 1, 2010 

Adjustement 

Translation 

For the 

year 

On 

Deductions/ 

Discarded 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

March 31, 2011 March 31, 2010 

EUR ` EUR ` 

SCHEDULE – IX CURRENT LIABILITIES AND 

PROVISIONS 

Current Liabilities 

Sundry Creditors 

For Goods and Services 19,238 1,216,635 8,580 519,605 

Other Liabilities 191,170 12,089,570 214,213 12,972,732 

Dues to Group Companies 

Provisions 

2,537,142 160,448,830 2,905,513 175,957,876 

For expenses 177,279 11,211,094 375,299 22,728,099 

Total 2,924,828 184,966,129 3,503,605 212,178,312 

SCHEDULE – X PROFIT AND LOSS ACCOUNT 

Profi t and Loss Account 

As per last Balance Sheet (643,282) (38,807,530) (373,187) (20,762,742) 

Additions during the year 271,048 16,357,967 (270,095) (18,044,788) 

Total (372,234) (22,449,563) (643,282) (38,807,530) 

` 

As on 

March 31, 

2010 

Furniture and Fixtures 1,899,628 84,065 - - 1,983,693 738,865 40,990 173,509 - 953,363 1,030,330 1,160,764 

Plant and Machinery 217,923 9,644 - - 227,567 149,170 8,987 49,789 - 207,946 19,621 68,753 

Computers 983,462 49,586 148,948 - 1,181,997 514,664 32,818 209,722 - 757,204 424,793 468,798 

3,101,014 143,295 148,948 - 3,393,257 1,402,699 82,794 433,020 - 1,918,513 1,474,744 1,698,315 

Previous year 3,378,910 (352,642) 156,748 82,002 3,101,014 1,053,626 (155,217) 512,144 7,854 1,402,699 1,698,315 2,325,284


Schedules annexed to and forming part of Profi t and Loss 

Account for the year ended 


March 31, 2011 March 31, 2010 

EUR ` EUR ` 

SCHEDULE – XI SOFTWARE 


Salaries and Bonus 80,579 4,863,029 67,556 4,513,329 

Consultancy charges - - - - 

Visa Expenses 8,871 535,358 17,003 1,135,932 

Cost of Service Delivery 7,982,178 481,731,072 6,534,183 436,543,322 

Total 8,071,629 487,129,458 6,618,742 442,192,583 

SCHEDULE – XII SELLING AND 


Marketing Services Expenses 41,398 2,498,426 237,128 15,842,322 


Total 95,801 5,781,664 307,260 20,527,778 

SCHEDULE – XIII GENERAL AND 


Salaries and Bonus 516,791 31,188,782 721,632 48,211,632 

Contribution to provident and other 

funds 

- - - - 

Staff Welfare 2,378 143,505 2,786 186,158 

Foreign travel expenses - - - - 

Travelling and conveyance - - - - 

Recruitment and Training Expenses 2,689 162,290 1,832 122,398 

Rent, Rates and Taxes 81,089 4,893,785 68,852 4,599,975 



Printing and Stationery 2,677 161,582 2,102 140,462 

Repairs to Others 1,054 63,602 4,198 280,437 

Donations 1,120 67,569 1,260 84,180 

Power and fuel 295 17,803 62 4,148 


Foreign Exchange Valuation - - (51) (3,424) 

Loss on sale of fi xed assets - - (118) (7,854) 

Bad debts wrtitten off - - - - 

Provision for bad and doubtful debts - - - - 

Offi ce Expenses 12,552 757,516 6,422 429,050 

Total 746,711 45,064,657 860,883 57,514,865 

SCHEDULE – XIV INTEREST, NET 


Lease rent 2,390 144,214 4,969 331,972 

Less: 

10,162 613,314 12,815 856,126 

Interest income 1,208 72,903 1,752 117,079 

Total 8,954 540,410 11,062 739,046 

16 

1. Introduction 

KPIT Infosystems GmbH, Germany is a wholly owned subsidiary of KPIT Infosystems Limited, UK. 

The Company has made a Profi t of ` 16,357,967 /- (EUR 271,048) in the current fi nancial year. The 

accumulated losses till March 2011 of ` 22,449,563 (EUR 372,234). 

During the year KPIT Infosystems Ltd., UK has invested further capital of Euro 2,400,000. 



The fi nancial statements have been prepared on historical cost convention on accrual basis, in 

accordance with Generally Accepted Accounting Principles (GAAP) as applicable in India and 

the provisions of the Companies Act, 1956. The accounting standards issued by the Institute 

of Chartered Accountants of India have been complied with to the extent applicable to the 

Company. 










liabilities. 



are capitalized till the assets are ready to put to use. Fixed assets taken on lease are written off 

over the lease period. 


Depreciation on fi xed asset of the Company is provided on expected useful life of the assets at 

the following rates: 


Computer Hardware 20% - SLM 

Plant and Machinery 33.33% - SLM 

Furniture, fi ttings and equipments 15% - RBM 






excess of the carrying amount over the higher of the asset’s net sales price or present value as 





The transactions with respect to the income and expenditure in foreign currency are recorded 

at a monthly average exchange rate, which is near to the actual rate. The exchange differences 

arising either on settlement or on translation of foreign currency transactions are recognized in 

the profi t and loss account in the year in which they arise. 


The transactions, which are in local currency Euro, have been converted for reporting in Indian 

Currency on the following basis. 





these assets. 

• The share capital is carried forward at the rate of exchange prevailing on the transaction 

date. The resulting exchange difference on account of translation of account balances at 

the year end is transferred to the Translation Reserve Account and the said account is 

being treated as “Reserve and Surplus”. 






made. 



confi rmed only by the occurrence or non-occurrence of one or more uncertain future events 

not wholly within the control of the Company; or 


1. It is not probable that an outfl ow of resources embodying economic benefi ts will be 

required to settle the obligation; or 

2. A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as Contingent Liabilities. These are assessed periodically 

and only that part of the obligation for which an outfl ow of resources embodying 

economic benefi ts is probable, is provided for, except in the extremely rare circumstances 

where no reliable estimate can be made. 

Contingent Assets are not recognized in the fi nancial statements since this may result in 

the recognition of income that may never be realized 




Sr. No. Particulars 2010-11 2009-10 


Sr. No. Particulars 2010-11 

Euro 

2009-10 

1. Software Exports 115,621 84,762 


During the year the Company entered into related party transactions with the following: 

Sr. Name of Related Description of Nature of 

Amount of Balance as at 

No. Party 

Relationship Transaction Transaction March 31, 2011 

(`) 

(`) 

1. KPIT Cummins Holding Company Software 

481,706,119 (160,319,296) 

Infosystems 

Consultancy [436,463,207] [(175,855,439)] 

Limited 


2. KPIT Infosystems Fellow Subsidiary Reimbursement of 

Nil 

Nil 

Central Europe of the Holding Expenses 

[Nil] [54,315] 

Sp. z.o.o (Merged 

with KPIT 

Cummins 


Effective 

March 1, 2011 

Company 


Ltd. (KPUK) 


Ltd. (KPUK) 


Ltd. (KPUK) 

6. In2Soft GmbH 

Germany 


Infosystems 

Limited 


Infosystems 

Limited 



KPUK 



KPUK 

Holding Company Interest payable 

on Unsecured loan 

from KPUK 


of the holding 

company 

9. Sanjay Mandal Key Management 

Personnel 


Personnel 

Sr. 

No. 


Party 


Infosystems 

Limited 



Sp. z.o.o 

[Merged with 



effective 

March 1, 2011 


Ltd., UK 


Ltd., UK 

Reimbursement 


In2soft 




India 





Relationship 

Nil 

[1,150,682] 

762,244 

[118,667] 

193,580 

[293,713] 

332,451 

[Nil] 

70,868,183 

[82,242,843] 

1,250,397 

[4,784,532] 

Salary 2,534,700 

[12,217,358] 


Expenses 

Nature of 

Transaction 


Consultancy 



of the Holding 

Company 


Expenses 


Expenses to KPUK 



KPUK 

192,376 

[1,401,877] 

Amount of 

Transaction 

EURO 

7,981,764 

[6,532,894] 

Nil 

[Nil] 

` 

103,110 

[Nil] 

(34,446) 

[(46,809)] 

332,451 

[Nil] 

5,418,072 

[4,416,738] 

Nil 

[Nil] 

Nil 

[Nil] 

Balance as at 

March 31, 2011 

EURO 

(2,535,093) 

[(2,903,822)] 

Nil 

[897] 

Nil 

[17,223] 1,630 

12,053 

[1,776] 

[(115,348)] 

17 

Sr. 

No. 


Party 


Ltd., UK 

6. In2Soft GmbH, 

Germany 


Infosystems 

Limited, UK 


Infosystems 

Limited, UK 



Relationship 

Nature of 

Transaction 

Holding Company Interest on 

unsecured loan 

Payable to KPUK 


of the holding 

company 


Personel 


Personel 

Reimbursement 


In2Soft 




India 




Amount of 

Transaction 

EURO 

3,061 

[4,396] 

5,257 

[Nil] 

1,120,623 

[1,230,996] 

19,772 

[71,614] 

Salary 42,000 

[182,867] 


Expenses 

3,042 

[20,983] 

Balance as at 

March 31, 2011 

EURO 

(545) 

[(773)] 

5,257 

[Nil] 

85,675 

[72,932] 

Nil 

[Nil] 

Nil 

[Nil] 

The fi gures for the previous year are shown in brackets. 


No provision for Income Tax has been made in view of the signifi cant accumulated carried forward 

losses. On the grounds of prudence deferred tax asset has not been created on the timing differences 

arising on account of signifi cant carried forward losses. 

7. Maximum Bank Balances 


No. 

(`) 

1. HVB Bank Current Account 127,035,330 

Sr. 

No. 

Bank Name Nature of Account Maximum Balance 

(EURO) 

1. HVB Bank Current Account 2,008,781 

8. On October 1, 2010, the Company has acquired 74% shares of In2Soft GmbH, Germany, vehicle 

diagnostics and telematics specialist in German market. 

9. During the year KPIT Infosystems GmbH has fully repaid loan taken from KPIT Infosystems Ltd., UK 

Euro 200,000. 



an audit opinion in relation to Group accounts. However, no separate audit report is given in respect 

of the Company. An audit report for the Group is issued by Deloitte Haskins & Sells and is included 



year’s classifi cation. 

12. The Company is a wholly owned subsidiary of KPIT Cummins Infosystems Limited. The accounts 

have been prepared and audited to be attached to the accounts of KPIT Cummins Infosystems 

Limited, the holding company to comply with the provisions of Section 212 of the Companies Act, in 

India. 




KPIT Infosystems Inc. (SolvCentral) 


Registered Offi ce: 33, Wood Avenue South, Iselin, NJ 08830, USA 



Your Directors are pleased to present herewith, the report of the Directors on the operations of the 

Company together with the accounts for the year ended March 31, 2011. 



USD 



1,641,546 

(595,845) 

Year 2010-11 

` 

74,843,533 

(27,166,548) 

Year 2009-10 

USD 

2,722,461 

(13,977) 

Year 2009-10 

` 

128,901,714 

(661,793) 

Operations 

The Company recorded revenue of USD 1.64 Million during the year as compared to USD 2.72 Million in 

the previous year. 



March 31, 2011 March 31, 2010 

Schedule USD ` USD ` 


Share holders’ funds 

Share capital I 2,550 115,209 2,550 115,209 

Reserves and surplus II 203,841 9,100,255 799,685 36,097,741 

Total 206,391 9,215,464 802,235 36,212,950 


Fixed assets III 

Gross block 54,938 2,479,921 54,938 2,479,921 


Net block 2,166 96,809 4,336 195,713 

Deferred tax Asset 


advances 

(737) (32,907) 28,984 1,308,338 

Sundry debtors IV (8,598) (383,901) 564,740 25,492,421 

Cash and bank balances V 29,973 1,338,314 448,025 20,223,848 

Loans and advances VI 842,943 37,637,394 396,396 17,893,313 

864,318 38,591,807 1,409,161 63,609,583 

Less: Current liabilities and 

provisions 

VII 659,358 29,440,245 640,246 28,900,682 


Total 206,391 9,215,464 802,235 36,212,950 

Notes to Accounts XII 

The Schedules and notes to accounts form an integral part of the fi nancial statements 




18 

Directors 

Mr. Probodh Chiplunkar resigned from the directorship of the Company with effect from April 1, 2010. 

Audit 





Group Auditors to give an audit opinion in relation to the group accounts i.e. consolidated accounts of 

KPIT Cummins Infosystems Ltd., the ultimate parent company. However, no separate audit report is given 

in respect of the Company. An audit report for the group accounts is issued by Deloitte, Haskins & Sells, 

Pune, and is included in its fi nancial statements. 


KPIT Infosystems Inc.(SolvCentral) 

Pune, Kishor Patil 


Statement of Profi t and Loss for the year ended 


March 31, 2011 March 31, 2010 

Schedule USD ` USD ` 

Income 

Software services and products 


Export Sales - - - - 

1,641,546 74,843,533 2,722,461 128,901,714 

Software development expenses VIII 1,390,041 63,376,580 2,095,127 99,199,005 

Gross profi t 251,505 11,466,953 627,334 29,702,709 

Selling and marketing expenses 


IX 65,657 2,993,504 68,010 3,220,112 

expenses X 749,339 34,164,870 569,454 26,962,205 

Operating profi t before 

interest, depreciation and tax 

(563,491) (25,691,421) (10,129) (479,607) 

Interest XI 465 21,201 470 22,253 

Depreciation III 2,169 98,904 2,894 137,011 



(566,125) (25,811,526) (13,493) (638,871) 

Other income 1 57 1 41 

Profi t/(Loss) before tax (566,124) (25,811,468) (13,492) (638,830) 

- Provision for taxation - - - - 

- Deferred Tax 29,721 1,355,079 485 22,964 

Profi t/(Loss) after tax 

Extraordinary item - prior period 

(595,845) (27,166,548) (13,977) (661,793) 

expenses - - - - 

Profi t/(Loss) after tax 



(595,845) (27,166,548) (13,977) (661,793) 

Basic (233.66) (10,653.55) (5.48) (259.53) 

Diluted 



(233.66) (10,653.55) (5.48) (259.53) 

Basic (weighted average) 2,550 2,550 2,550 2,550 

Diluted (weighted average) 2,550 2,550 2,550 2,550 

Notes to Accounts XII 

The Schedules and notes to accounts form an integral part of the fi nancial statements. 






March 31, 2011 March 31, 2010 

USD ` USD ` 





(Profi t)/loss on sale of fi xed assets 

(566,124) (25,811,468) (13,492) (638,830) 

Depreciation 2,169 98,904 2,894 (146,566) 

Interest and fi nancial charges 465 21,201 470 22,253 

Provision for doubtful debts 

Cash fl ow before working capital 

(89,583) (4,084,376) - (1) 

changes 


(653,072) (29,775,740) (10,129) (763,144) 

(Increase)/decrease in receivables 662,921 29,960,698 1,591,984 84,392,743 

(Increase)/decrease in loans and 

advances 

Increase/(decrease) in accounts 

(446,547) (19,744,081) 123,682 8,604,633 

payable 

Cash infl ow/(outfl ow) from 

19,112 539,564 (1,601,214) (85,301,689) 

operations 

Direct taxes and extra-ordinary 

items 

(417,586) (19,019,559) 104,323 6,932,542 

Provision for Tax (29,721) (1,355,079) (485) (22,964) 

Deferred tax 

Net cash infl ow/(outfl ow) from 

29,721 1,341,245 485 193,108 

operations (417,586) (19,033,394) 104,323 7,102,685 

B] Net Cash from/(used) in investing 

activity - - (2,891) 171,962 


Interest and fi nance charges (465) (21,201) (470) (22,253) 

Net cash used in fi nancing activity (465) (21,201) (470) (22,253) 


Net Increase/(decrease ) in cash and 

- 169,061 - (4,711,346) 

cash equivalents (A + B+ C) 

Cash and cash equivalents at close of 

(418,052) (18,885,534) 100,962 2,541,048 


Cash and cash equivalents at beginning 

29,973 1,338,314 448,025 20,223,848 

of the year (refer note below) 448,025 20,223,848 347,063 17,682,799 

Note: 

Cash surplus/(defi cit) for the year (418,052) (18,885,534) 100,962 2,541,048 




29,973 1,338,314 448,025 20,223,848 




19 




March 31, 2011 March 31, 2010 

USD ` USD ` 

SCHEDULE - I 

SHARE CAPITAL 

Authorised 

2,550 ordinary shares at par 2,550 115,209 2,550 115,209 


2,550 ordinary shares issued at par 

2,550 115,209 2,550 115,209 

Total 2,550 115,209 2,550 115,209 

SCHEDULE - II 

RESERVES AND SURPLUS 

General reserve 

As per last Balance Sheet 

Transferred from Profi t and Loss 

799,685 36,935,578 813,664 37,597,371 

Account (595,845) (27,166,548) (13,977) (661,793) 


203,841 9,769,030 799,685 36,935,578 

As per last balance sheet - (837,837) - 3,873,509 

Additions during the year - 169,061 - (4,711,346) 

- (668,776) - (837,837) 

Total 203,841 9,100,254 799,685 36,097,741




SCHEDULE - III 

FIXED ASSETS 

Particulars Gross Block Depreciation Net Block 

As on 

April 1, 

2010 


Discarded 

As on 

March 31, 

2011 

March 31, 2011 March 31, 2010 

USD ` USD ` 

SCHEDULE - IV 

SUNDRY DEBTORS 

Unsecured 

Outstanding for a period 

exceeding six months 

Considered good - - - - 


Other Debts 

- - 89,583 4,043,765 

Considered good (8,598) (383,901) 564,741 25,492,421 

Considered doubtful - - - - 

(8,598) (383,901) 654,324 29,536,187 

Less: Reserve for doubtful debts - - 89,583 4,043,765 

Total (8,598) (383,901) 564,740 25,492,421 

SCHEDULE - V 

CASH AND BANK BALANCES 

Cash on hand 


Bank of America on USD Current 

- - - - 

Account 29,973 1,338,314 448,025 20,223,848 

Total 29,973 1,338,314 448,025 20,223,848 

20 

Upto 

April 1, 

2010 

For the 

year 

Deductions/ 

Discarded 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

USD 

As on 

March 31, 

2010 

Plant and Machinery 103 - - 103 103 - - 103 - - 

Furniture and Fixture 6,674 - - 6,674 5,730 421 - 6,151 523 945 

Computers 48,161 - - 48,161 44,769 1,748 - 46,517 1,644 3,392 

Total 54,938 - - 54,938 50,602 2,169 - 52,771 2,167 4,336 

Previous year 52,049 2,890 - 54,938 47,709 2,893 - 50,603 4,336 4,340 

Particulars Gross Block Depreciation Net Block 

As on 

April 1, 

2010 

Adjustment 

Translation 


Discarded 

As on 

March 31, 

2011 

Upto 

April 1, 

2010 

Adjustment 

Translation 

For the 

year 

Deductions/ 

Discarded 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

March 31, 2011 March 31, 2010 

USD ` USD ` 

SCHEDULE - VI 

LOANS AND ADVANCES 


Advances recoverable in cash or in 

kind or for value to be received 450,000 20,092,500 - - 

Dues from Group companies - - 2,713 122,448 

Prepaid expenses - - 750 33,855 

Advance Tax 392,943 17,544,894 392,933 17,737,009 

Total 842,943 37,637,394 396,396 17,893,313 

SCHEDULE - VII 

CURRENT LIABILITIES AND PROVISIONS 



For goods and services 119,120 5,318,708 238,240 10,754,194 


Due to Group companies 252,950 11,294,236 23,899 1,078,781 

Other liabilities 

413,511 18,463,196 394,398 17,803,168 

For Taxation 245,847 10,977,049 245,847 11,097,514 

245,847 10,977,049 245,847 11,097,514 

Total 659,358 29,440,245 640,246 28,900,682 

` 

As on 

March 31, 

2010 

Plant and Machinery 4,649 - - - 4,649 4,649 - - - 4,649 - - 

Furniture and Fixture 301,284 - - - 301,284 258,655 - 19,210 - 277,865 23,420 42,630 

Computers 2,173,987 - - - 2,173,987 2,020,904 - 79,694 - 2,100,598 73,389 153,083 

Total 2,479,921 - - - 2,479,921 2,284,208 - 98,904 - 2,383,112 96,809 195,713 

Previous year 2,651,883 (308,357) 136,395 - 2,479,921 2,430,775 (283,577) 137,011 - 2,284,208 195,713 221,109

Schedules to Profi t and Loss Account for the year ended 


March 31, 2011 March 31, 2010 

USD 

SCHEDULE - VIII 

SOFTWARE DEVELOPMENT EXPENSES 

` USD ` 

Salaries and bonus 902,222 41,135,297 1,287,784 60,973,343 

Consultancy charges - - - - 

Other Direct cost 487,819 22,241,282 807,343 38,225,661 

Total 1,390,041 63,376,580 2,095,127 99,199,005 

SCHEDULE - IX 

SELLING AND MARKETING EXPENSES 

Marketing services expenses 778 35,491 14,643 693,318 


Total 65,657 2,993,504 68,010 3,220,112 

SCHEDULE - X 

GENERAL AND ADMINISTRATION 

EXPENSES 

Salaries and bonus 622,496 28,381,660 451,465 21,375,736 

Recruitment and training expenses 13,110 597,745 - - 

Rent, rates and taxes 790 35,997 5,576 263,995 

Communication expenses 5,773 263,224 2,931 138,762 

Professional and legal expenses 103,171 4,703,908 109,004 5,161,082 

Printing and stationery - - 179 8,461 

Repairs to others - - - - 

Provision for bad and doubtful debts (89,583) (4,084,376) - (1) 

Bad Debts written off 89,583 4,084,377 - - 

Other Offi ce Expenses 3,999 182,334 299 14,171 

Total 749,339 34,164,870 569,454 26,962,205 

SCHEDULE - XI 

INTEREST, NET 

Financial charges 465 21,201 470 22,253 

Less: 

465 21,201 470 22,253 

Interest income - - - - 

Total 465 21,201 470 22,253 

21 


SCHEDULE XII - NOTES TO ACCOUNTS 

1. Introduction 

Solvcentral.com Inc. (“the Company”) is wholly owned subsidiary of KPIT Infosystems Inc. 

The Company has made a Loss of ` 27,166,548 (USD 595,845) in the current fi nancial year. The 

accumulated profi t till March 2011 is ` 9,769,030/- (USD 203,841) 







Company. 

All income and expenditure having a material bearing on the fi nancial statements are recognised 

on an accrual basis. 


Revenue from software development and services on time and material basis is recognised 


obligations. 



liabilities. 


Fixed assets are stated at the cost of acquisition, less accumulated depreciation. 


Depreciation on fi xed asset of the Company is provided on expected useful life of the assets at the 

following rates on straight-line method (SLM): 

Class of Asset *Rates of Depreciation 

Computer Hardware 33.33% 

Offi ce Equipments 10% 

Furniture 10% 

Plant and Machinery 33.33% 

Fittings 14.29% 

• The rates of Depreciation are above minimum rates prescribed under Schedule XIV to the 

Companies Act, 1956. 











The transactions, which are in the local currency, i.e. USD, have been converted for reporting 

in Indian Currency i.e. INR on the following basis: 

For the purpose of preparation of the accounts during the year, all income and expense items 

are converted at the average rate of exchange applicable for the year. All assets and liabilities 

are translated at the closing rate as on the balance sheet date except the fi xed assets which are 

converted at the rates on the date of purchase. The Share Capital is carried forward at the rate 

of exchange prevailing on the transaction date. The resulting exchange difference on account 

of translation at the year ends are transferred to the Translation Reserve Account and the said 

account is being treated as “ Reserve and Surplus”. 

h) Provisions, Contingent Liabilities and Contingent Assets 





made. 

No Provisions is recognised for – 




B. Any present obligation that arises from past events but is not recognized because - 




Such obligations are recorded as Contingent Liabilities. These are assessed 

periodically and only that part of the obligation for which an outfl ow of resources 

embodying economic benefi ts is probable, is provided for, except in the extremely 

rare circumstances where no reliable estimate can be made. 

Contingent Assets are not recognised in the fi nancial statements since this may result in the 

recognition of income that may never be realised





During the year the Company entered into following related party transactions: The fi gures for the last 

year are mentioned in Bracket at the bottom of Amount column. 

Sr. 

No. 

Name of 

Related Party 

1 KPIT 


Infosystems 

Limited 


Infosystems 

Inc., USA 


Infosystems 

Inc., USA 


Infosystems 

Ltd., UK 

5 Probodh 

Chiplunkar 

Sr. 

No. 

Name of 

Related Party 

1 KPIT Cummins 

Infosystems 

Limited 

2 

KPIT 

Infosystems 

Inc., USA 


Infosystems 

Inc., USA 


Infosystems 

Ltd., UK 

5 Probodh 

Chiplunkar 


Relationship 

Nature of 

Transaction 


of Expenses 

from KPIT India 


of KPIT Cummins 

Infosystems 

Limited 



Infosystems 

Limited 




Key Management 

Personnel 


Relationship 

Reimbursement 


KPIT India 

Reimbursement 

of Expenses 

from KPIT 

Infosystems 

Inc., USA 

Reimbursement 

of Expenses 

to KPIT 

Infosystems 

Inc., USA 

Loan given KPIT 

Infosystems 

Inc., USA 

Reimbursement 

of Expenses 

from UK 

Amount of 

Transaction 

[`] 

Nil 

[551,244] 

4,501,963.06 

[9,497,922] 

62,939,177 

[60,485,746] 

63,444,312 

[33,843,297] 

22,325,000 

[Nil] 

Nil 

[24,095] 

Salary 9,967,706 

[11,638,413] 

Nature of 

Transaction 


of Expenses 

from KPIT India 



Infosystems 

Limited 



Infosystems 

Limited 



Infosystems 

Limited 




Key Management 

Personnel 

Reimbursement 


KPIT India 

Reimbursement 

of Expenses 

from KPIT 

Infosystems 

Inc., USA 

Reimbursement 

of Expenses 

to KPIT 

Infosystems 

Inc., USA 

Loan Given 

to KPIT Info 

systems Inc., 

USA 

Reimbursement 

of Expenses 

Amount of 

Transaction 

[USD] 

Nil 

[12,212] 

100,828 

[210,410] 

1,409,612 

[1,339,959] 

1,420,925 

[ 749,741] 

500,000 

[Nil] 

Nil 

[534] 

Salary 223,241 

[257,829] 

Balance as at 

March 31, 2011 

[`] 

(364,497) 

[(1,064,906)] 

(10,929,739) 

[84,499] 

20,092,500 

[Nil] 

Nil 

[24,095] 

Nil 

[Nil] 

Balance as at 

March 

31, 2011 

[USD] 

(8,163) 

[(23,591)] 

(244,787) 

[1,872] 

450,000 

[Nil] 

Nil 

[534] 

Nil 

22 


Provision for Income Tax has been made in accordance with the Federal and State tax rules in United 

States of America. It has been made on the basis of workings made available by the tax consultant. 






7. The accounts have been prepared and audited to be attached to the accounts of KPIT Cummins 

Infosystems Limited, the holding company to comply with the provisions of Section 212 of the 

Companies Act, 1956 in India. 

8. During the year Company has given Interest free loan of USD 500,000 KPIT Infosystems Inc., out of 

which USD 50,000 was repaid during the year. 

9. Pursuant to the Accounting Standard (AS-22) on “Accounting for taxes on income” issued by the 

Institute of Chartered Accountants of India which is mandatory, the Company has considered the 

effect of timing differences in the tax expenses in the Profi t and Loss Account and deferred tax a 

asset/liability in the Balance Sheet. 


Depreciation** 98,904 32,907 



Depreciation** 2,169 737 


(`) 

(USD) 




KPIT Infosystems France SAS (formerly known as Pivolis SAS) 

Registered Offi ce: Tour Egee-La Defense, 17, Avenue de l’Arche, 92671, Courbevoie Cedex, Paris, France 



Your Directors are pleased to present herewith the fi fth report of the Directors on the operations of the 

Company together with the accounts for the year ended March 31, 2011. 



Euro 



5,401,533 

20,214 

Year 2010-11 

` 

325,987,035 

1,219,943 

Year 2009-10 

Euro 

5,118,648 

91,790 

Year 2009-10 

` 

341,972,615 

6,132,407 

Operations 

The Company recorded revenue of Euro 5.40 Million during the year as compared to Euro 5.12 Million in 

the previous year. 




Euro ` Euro ` 



Share capital I 100,000 5,428,000 100,000 5,428,000 

Reserves and surplus 

Loan Funds 

II 264,939 17,650,695 244,725 15,448,525 

Unsecured loans III – – – – 


Total 364,939 23,078,695 344,725 20,876,525 


Gross block 69,342 4,385,174 47,955 2,904,104 


Net block 25,064 1,584,987 11,342 686,740 

Investments and advances V 22,519 1,424,100 4,574 277,017 


Cash and bank balances VII 654,664 41,400,942 608,101 36,826,612 

Loans and advances VIII 1,799,175 113,779,852 1,350,361 81,777,858 

4,384,180 277,255,554 3,816,212 231,109,896 

Less: Current liabilities and 

provisions 

IX 4,066,824 257,185,946 3,487,403 211,197,127 


Total 364,939 23,078,695 344,725 20,876,525 

Notes to accounts XV 

The schedules and notes to accounts form an integral part of the fi nancial statements. 



April, 25, 2011 Chairman 

23 


Audit 

The Company is not required by French laws to have an independent audit fi rm to issue a report to the 




Group Auditors to give an audit opinion in relation to the group accounts i.e. consolidated accounts of 

KPIT Cummins Infosystems Ltd., the parent Company. However, no separate audit report is given in respect 

of the Company. An audit report for the group accounts is issued by Deloitte, Haskins & Sells, Pune, 

and is included in its fi nancial statements. 


KPIT Infosystems France SAS 

Pune, Kishor Patil 


Profi t and Loss Account for the year ended 



Euro ` Euro ` 

Income 



Export Sales 2,780,621 167,812,785 2,750,262 183,742,696 

5,401,533 325,987,035 5,118,648 341,972,615 

Software development expenses X 3,526,857 212,848,769 3,145,565 210,152,594 

Gross Profi t 1,874,676 113,138,265 1,973,083 131,820,020 

Selling and marketing expenses XI 133,602 8,063,017 129,737 8,667,648 


expenses 

XII 1,720,012 103,804,115 1,651,804 110,355,590 

Operating profi t before interest, 


21,061 1,271,133 191,541 12,796,782 

Interest XIII 9,334 563,322 14,447 965,181 

Depreciation IV 9,020 544,369 6,350 424,209 


depreciation and before tax 

2,708 163,442 170,746 11,407,392 

Other income XIV 16,643 1,004,419 – – 



19,351 1,167,861 170,746 11,407,392 

Provision for Taxation 

Profi t after tax and before 

(863) (52,083) 78,956 5,274,985 

extraordinary Items 

Extraordinary Item - prior period 

expenses 

20,214 1,219,943 91,790 6,132,407 

Profi t After Tax 

Earning per share (Equity 

shares at par) 

20,214 1,219,943 91,790 6,132,407 

Basic 0.20 12.20 0.92 61.32 

Diluted 



0.20 12.20 0.92 61.32 

Basic (weighted average) 100,000 100,000 100,000 100,000 

Diluted (weighted average) 100,000 100,000 100,000 100,000 


The schedules and notes to accounts form an integral part of the fi nancial statements. 



April, 25, 2011 Chairman




March 31, 2011 March 31, 2010 

Euro ` Euro ` 





19,351 1,167,861 170,746 11,407,392 

(Profi t)/loss on sale of fi xed assets – – – – 

Depreciation 7,665 582,822 6,350 175,099 


Profi t/(loss) adjustment for 

previous year 

Cash Flow Before Working Capital 

Changes 


– 40,166 – (1,165,492) 

36,350 2,354,170 191,543 11,382,179 

(Increase)/decrease in receivables (72,591) (9,569,333) 1,115,152 88,106,112 

(Increase)/decrease in loans and 

advances 

Increase/ (decrease) in accounts 

payable 

Cash infl ow/(outfl ow) from 

Operations 

(448,814) (32,001,994) (870,903) (49,424,026) 

579,421 45,988,818 (203,487) (37,864,070) 

58,015 4,417,491 40,762 818,015 

Provision for taxation 863 52,083 (78,956) (5,274,985) 

Net cash infl ow/(outfl ow) from 

operations 

95,228 6,823,744 153,349 6,925,210 


Purchase of fi xed assets (21,387) (1,481,070) (5,644) (49,072) 

(Increase)/Decrease in investments (17,945) (1,147,083) – 31,654 

Net Cash from/(used) in investing 

activity 

(39,331) (2,628,153) (5,644) (17,418) 


Increase/(decrease) in working 

capital loan 

– – (185,525) (12,519,242) 


Net Cash used in fi nancing activity (9,334) (563,322) (199,972) (13,484,424) 

D] Exchange Gain/(Loss) – 942,059 – (1,158,396) 

Net Increase/(Decrease ) in Cash 

and cash equivalents (A + B + C + D) 

46,563 4,574,330 (52,267) (7,735,029) 

Cash and cash equivalents at close 

of the year 

654,664 41,400,942 608,101 36,826,612 

Cash and cash equivalents at 

beginning of the year 

608,101 36,826,612 660,368 44,561,641 

Cash Surplus/(defi cit) for the year 

Note: 



46,563 4,574,330 (52,267) (7,735,029) 


- On deposit account – – – – 

654,664 41,400,942 608,101 36,826,612 




24 


(Pursuant to Section 2 12 of the Companies Act, 1956) 

March 31, 2011 March 31, 2010 

Euro 

Schedule - I 

SHARE CAPITAL 

Authorized 

` Euro ` 

100,000 common shares with no par value 

Allotted, Called up and fully paid 

100,000 5,428,000 100,000 5,428,000 

100,000 common shares (Previous year 

100,000) with no par value 

Out of this 74,500 shares are held by KPIT 

Cummins Infosystems Ltd., the Holding 

Company 

100,000 5,428,000 100,000 5,428,000 

Total 100,000 5,428,000 100,000 5,428,000 

Schedule - II 

RESERVES AND SURPLUS 

Profi t and loss account 

As per last Balance Sheet (244,725) (15,394,136) (152,934) (10,427,221) 

Less: Profi t and Loss Prior year adjustment – (40,166) – 1,165,492 

Add: (Surplus)/defi cit for the year (20,214) (1,219,943) (91,790) (6,132,407) 

Cumulative Translation Adjustments 

(264,939) (16,654,245) (244,725) (15,394,136) 

As per last Balance Sheet – 54,390 – 1,212,786 

Add: Additions for the year – 942,059 – (1,158,396) 

Total – 996,449 – 54,390 

Total (264,939) (17,650,695) (244,725) (15,339,746) 

Schedule - III 

Unsecured Loans 

Loan due to Group companies – – – – 

Loan due to others – – – – 

Total – – – –



SCHEDULE - IV 

FIXED ASSETS 


April 1, 

2010 

Adjustments 

Asset 

Translation 

March 31, 2011 March 31, 2010 

Euro ` Euro ` 

SCHEDULE - V 

INVESTMENTS 

Investment in Mutual Funds 22,519 1,424,100 4,574 277,017 

Total 22,519 1,424,100 4,574 277,017 

SCHEDULE - VI 

SUNDRY DEBTORS 

Unsecured 

Outstanding for a period exceeding six 

months 

Considered Good – – – – 

Considered doubtful 

Other Debts 

– – – – 


Considered doubtful – – 3,250 196,792 

1,930,341 122,074,760 1,857,749 112,505,427 

Less: Reserve for doubtful debts – – – – 

Total 1,930,341 122,074,760 1,857,749 112,505,427 

SCHEDULE - VII 

CASH AND BANK BALANCES 

Balance with Scheduled banks 

On current accounts 654,664 41,400,942 608,101 36,826,612 

On deposit account – – – – 

Total 654,664 41,400,942 608,101 36,826,612 

SCHEDULE - VIII 

LOANS AND ADVANCES 



or for value to be received 723,846 45,776,028 416,086 25,198,157 

Due from Group Companies 459,513 29,059,598 623,419 37,754,244 

Prepaid Expenses 595,423 37,654,573 274,001 16,593,487 

1,778,782 112,490,199 1,313,505 79,545,889 

Deposits 20,393 1,289,653 36,856 2,231,969 

Interest Accrued but not due – – – – 

Total 1,799,175 113,779,852 1,350,361 81,777,858 

25 




Discarded 

As on 

March 31, 

2011 

Up to 

April 1, 

2010 

Adjustments 

Translation 


Discarded 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

` 

As on 

March 31, 

2010 

Leasehold Property 260,974 11,550 228,033 (272,524) 228,033 79,891 4,470 19,860 (85,757) 18,464 209,568 181,083 

Computers 2,568,701 113,687 377,570 – 3,059,958 2,118,086 111,897 339,116 – 2,569,100 490,857 450,615 

Plant and Machinery – – 960,015 – 960,015 – 4,022 83,981 – 88,003 872,011 – 

Other intangiable assets 74,428 3,294 59,446 – 137,168 19,387 3,821 101,412 – 124,620 12,547 55,041 

Total 2,904,103 128,531 1,625,064 (272,524) 4,385,174 2,217,364 124,210 544,369 (85,757) 2,800,186 1,584,983 686,739 

Previous Year 2,855,031 (292,780) 341,853 - 2,904,103 2,042,266 (249,110) 424,590 – 2,217,364 686,739 812,765 


April 1, 

2010 

Adjustments 

Asset 

Translation 

Euro 



Discarded 

As on 

March 31, 

2011 

Up to 

April 1, 

2010 

Adjustments 

Translation 


Discarded 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

As on 

March 31, 

2010 

Leasehold Property 4,309 – 3,606 4,309 3,606 1,319 – 329 1,356 292 3,314 2,990 

Computers 42,416 – 5,970 – 48,386 35,005 – 5,619 – 40,625 7,762 7,411 

Plant & Machinery – – 15,181 – 15,181 – – 1,392 – 1,392 13,789 – 

Other intangiable assets 1,229 – 940 – 2,169 290 – 1,680 – 1,971 198 939 

Total 47,955 – 25,697 – 69,342 36,615 – 9,020 1,356 44,279 25,063 11,340 

Previous Year 42,311 – 5,645 – 47,955 30,265 – 6,350 – 36,615 11,340 12,045 

March 31, 2011 March 31, 2010 

Euro ` Euro ` 

SCHEDULE - IX 

CURRENT LIABILITIES AND PROVISIONS 


Sundry creditors – – 29,298 1,774,289 

Due to Group Companies 2,924,934 184,972,855 2,507,063 151,827,749 


3,134,552 198,229,077 2,808,658 170,092,345 

Other liabilities 

For goods and services 

Other Liabilities 

Provisions 

911,266 57,628,449 657,739 39,832,659 

For Corporate Tax 21,006 1,328,419 21,006 1,272,123 

Total 4,066,824 257,185,946 3,487,403 211,197,127


Schedules annexed to Profi t and Loss Account for the year ended 


March 31, 2011 March 31, 2010 

Euro 

SCHEDULE - X 

SOFTWARE DEVELOPMENT EXPENSES 

` Euro ` 

Salaries and bonus – – – – 

Contribution to provident and other funds – – – – 

Consultancy charges 3,526,857 212,848,769 3,145,565 210,152,594 

Total 3,526,857 212,848,769 3,145,565 210,152,594 

SCHEDULE - XI 

SELLING AND MARKETING EXPENSES 

Marketing Expenses 14,747 889,983 25,574 1,708,571 


Total 133,602 8,063,017 129,737 8,667,648 

SCHEDULE - XII 

General and Administration Expenses 

Salaries and bonus 1,304,636 78,735,857 1,288,865 86,107,983 

Staff Welfare 18,339 1,106,796 174 11,625 

Recruitment and Training Expenses 30,062 1,814,250 21,625 1,444,748 

Rent, Rates and taxes 131,885 7,959,358 154,547 10,325,139 



Printing and stationery 1,618 97,636 3,143 209,981 

Repairs to Plant and Machinery 

Repairs to Others 

Power and Fuel 

2,648 159,839 12,000 801,710 

Insurance Charges 1,656 99,925 949 63,392 

Audit fees 5,127 309,408 4,308 287,830 

Provision for doubtful debts 45,410 2,740,531 (10,265) (685,775) 

Loss on Sale of Assets 2,953 178,219 – – 

Bad Debts – – – – 

Offi ce Expenses 35,830 2,162,351 58,388 3,900,884 

Total 1,720,012 103,804,115 1,651,804 110,355,590 

SCHEDULE - XIII 

INTEREST, NET 


Lease Rent – – – – 

9,334 563,322 14,447 965,181 

Less: Interest income – – – – 

Total 9,334 563,322 14,447 965,181 

SCHEDULE - XIV 

OTHER INCOME 

Foreign Exchange Fluctuation Gains 7,306 440,905 – – 

Other Income 9,337 563,514 – – 

Total 16,643 1,004,419 – – 




26 



The Company became subsidiary of KPIT Cummins Infosystems Ltd. (The holding Company) with 

effect from April 1, 2006 wherein the holding company acquired 73% shares in a phased manner 

in accordance with Joint Venture agreement dated November 8, 2005. During the year 2007-08 the 

holding company has increased its investment in the Company up to 74.5%. During the year 2008-09 

the Company has increased its holding to 100%. 

The Company has made a profi t of ` 1,219,944 (EUR 20,214) in the current fi nancial year. The 

accumulated Profi t till March, 2011 of ` 17,650,703 (EUR 264,939) and the Working Capital of 

` 20,069,608 (EUR 317,356) as of that date has presently been funded by the holding company, by 

way of capital contribution. 







Company. 










liabilities. 



are capitalized till the assets are ready to put to use. Fixed assets taken on lease are written off 

over the lease period. 


Depreciation on fi xed asset of the Company is provided on expected useful life of the assets at 

the following rates: 


Computer Hardware 33.33% - SLM 

Leasehold Improvement Amortized over period of lease 


Management periodically assesses using, external and internal sources, whether there is an 

indication that an asset may be impaired. Impairment occurs where the carrying value exceeds 

the present value of future cash fl ows expected to arise from the continuing use of 







The transactions with respect to the income and expenditure in foreign currency are recorded 

at a monthly average exchange rate, which is near to the actual rate. The exchange differences 

arising either on settlement or on translation of foreign currency transactions are recognized in 

the profi t and loss account in the year in which they arise.


The transactions, which are in local currency Euro, have been converted for reporting in Indian 

Currency on the following basis: 





these assets. 

• The share capital is carried forward at the rate of exchange prevailing on the transaction 

date. The resulting exchange difference on account of translation of account balances at 

the year end is transferred to the Translation Reserve Account and the said account is 

being treated as “Reserve and Surplus”. 






made. 


















Sr. 

No. 


` 

2009-10 

` 

1. Software Exports Nil 11,208,992 

Sr. 

No. 


Euro 

2009-10 

Euro 

1. Software Exports Nil 167,774 

27 



During the year the Company entered into related party transactions with the following: - 

Sr. 

No. 

Name of 

Related 

Party 

1. KPIT 


Infosystems 

Limited 



Infosystems 

Limited 



Infosystems 

Limited 



Infosystems 

Limited 

Sr. 

No. 

Name of 

Related 

Party 



Infosystems 

Limited 



Infosystems 

Limited 



Infosystems 

Limited 



Infosystems 

Limited 


Relationship 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Holding 

Company 


Relationship 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Nature of 

Transaction 

Interest payable 


from KPIN 

Amount of 

Transaction (`) 

Nil 

[317,940] 

Unsecured loan Nil 

[11,691,750] 

Software 

Consultancy 


Reimbursement 



India 

Nature of 

Transaction 

Interest payable 


from KPIN 

205,416,205 

[208,677,515] 

7,428,751 

[19,682,627] 

Amount of 

Transaction 

EURO 

Nil 

[5,250] 

Unsecured loan Nil 

[1,75,000] 

Software 

Consultancy 


Reimbursement 



India 

3,403,701 

[3,123,486] 

123,093 

[294,606] 

Balance as at 

March 31,2011 

(`) 

Nil 

[Nil] 

Nil 

[Nil] 

184,972,855 

[151,827,749] 

29,059,598 

[43,788,439] 

Balance as at 

March 31,2011 

EURO 

Nil 

[Nil] 

Nil 

[Nil] 

2,924,934 

[2,507,063] 

459,513 

[623,419] 







Year’s classifi cation. 

8. The Company is a wholly owned subsidiary of KPIT Cummins Infosystems Limited. The accounts have 

been prepared and audited to be attached to the accounts of KPIT Cummins Infosystems Limited, the 

holding company to comply with the provisions of Section 212 of the Companies Act, in India. 



April, 25, 2011 Chairman

Sparta Consulting Inc. 


Registered Offi ce: 111, Woodmere Road, Suite 200, Folsom, California 95630, USA 



Your Directors are pleased to present herewith the report of the Directors on the operations of the Company 

together with the accounts for the year ended March 31, 2011. 



USD 

Year 2010-11 

` 

13.11.2009 to 

31.03.2010 

USD 

13.11.2009 to 

31.03.2010 

` 


Net Profi t /(Loss) for 

59,030,559 2,691,399,938 12,222,429 578,701,433 

the period 

2,621,110 119,505,001 402,150 19,040,788 


28 

Operations 

The Company recorded revenue of US$ 59.03 Million during the year under review. 

Audit 












April 25, 2011 Director 

MARCH 31, 2011 MARCH 31, 2011 MARCH 31, 2010 MARCH 31, 2010 

Schedule USD USD ` ` USD USD ` ` 


Share Holders’ Funds 

Share Capital I 5,105,200 212,355,075 5,105,200 212,355,075 

Reserves and Surplus II (2,552,562) (98,379,946) (5,173,672) (215,445,920) 

2,552,638 113,975,129 (68,472) (3,090,845) 

Loan Funds 

Unsecured Loans III 5,546,871 247,667,791 3,000,000 135,420,000 

Total 


8,099,509 361,642,920 2,931,528 132,329,155 


Gross Block 1,462,046 65,280,341 627,141 28,309,141 

Less: Accumulated Depreciation/Amortization 1,109,097 49,521,197 285,105 12,869,621 

Net Block 352,948 15,759,144 342,036 15,439,520 

Capital Work-in-Progress 116,722 469,670 5,211,630 20,970,774 - 342,036 - 15,439,520 

Investments 

Current Assets, Loans and Advances 

V 1,400,000 62,510,000 1,400,000 63,196,000 

Sundry Debtors VI 13,160,231 587,604,319 3,706,307 167,302,697 

Cash and Bank Balances VII 5,368,308 239,694,933 1,743,410 78,697,513 

Loans and Advances VIII 151,501 6,764,511 326,837 14,753,450 

Less: Current Liabilities and Provisions 

18,680,040 834,063,763 5,776,554 260,753,661 

Current Liabilities IX 11,303,381 504,696,115 4,053,125 182,958,093 

Provisions IX 1,146,820 51,205,502 533,937 24,101,932 

12,450,201 555,901,617 4,587,062 207,060,025 

Net Current Assets 6,229,839 278,162,147 1,189,492 53,693,636 

Total 8,099,509 361,642,920 2,931,528 132,329,155 

Signifi cant Accounting Policies and Notes to Accounts XIV 



April 25, 2011 Director


Schedule March 31, 

2011 

USD 

March 31, 

2011 

` 

March 31, 

2010 

USD 

March 31, 

2010 

` 

INCOME 

- Domestic Sales 59,030,559 2,691,399,938 12,222,429 578,701,433 

59,030,559 2,691,399,938 12,222,429 578,701,433 

Software Development X 

Expenses 

46,133,962 2,103,401,107 7,853,836 371,859,494 

Gross Profi t 12,896,597 587,998,831 4,368,592 206,841,938 

Selling and Marketing 

Expenses 

XI 3,143,765 143,334,724 1,362,282 64,500,647 

General and Administration XII 

Expenses 

6,144,236 280,136,267 2,522,513 119,434,708 

Profi t before interest, 

depreciation and exchange 

Gain/(Loss) 

3,608,596 164,527,840 483,797 22,906,584 

Interest XIII 83,743 3,818,187 1,024 48,520 

Depreciation/Amortization 

Profi t After Interest, 

Depreciation and Before 

Tax and Exchange 

IV 823,993 37,568,577 77,443 3,666,710 

Gain/(Loss) 2,700,860 123,141,076 405,330 19,191,353 

Profi t Before Tax 

Provision for Taxation - 

2,700,860 123,141,076 405,330 19,191,353 

Current Year 79,750 3,636,075 3,180 150,565 

Profi t After Tax 

Profi t Available for 

2,621,110 119,505,001 402,150 19,040,788 

Appropriation 

Signifi cant Accounting 

Policies and Notes to 

2,621,110 119,505,001 402,150 19,040,788 

Accounts XIV 




April 25, 2011 Director 

29 



Particulars March 31, 2011 March 31, 2011 

A] CASH FLOWS FROM OPERATING ACTIVITIES 

USD ` 

Net profi t/( loss) before tax 


2,700,860 123,141,076 

(Profi t)/loss on sale of fi xed assets (net) - - 

Depreciation/Amortization 823,993 37,568,577 

Interest and fi nancial charges 622 28,336 

Interest income 

Provision for doubtful debts/(Write back of excess provision 

83,123 3,789,851 

for bad and doubtful debts - - 

Bad debts written off 60,188 2,744,178 

Provision for doubtful advances - 

Dividend income 

Exchange differences on translation of foreign currency cash 

- 

and cash equivalents - (1,753,027) 

Unrealised foreign exchange (Gain)/Loss - - 

Operating Profi t before working capital changes 


3,668,786 165,518,994 

(Increase)/Decrease in Sundry Debtors (9,514,112) (423,045,800) 

(Increase)/Decrease in Loans and Advances 278,181 12,580,990 

Increase/(Decrease) in Current Liabilities and Provisions 7,783,494 345,285,420 

Cash generated from operations 2,216,349 100,339,604 

Taxes Paid (102,950) (4,671,955) 

Net cash from operating activities 

B] CASH FLOW FROM INVESTING ACTIVITIES 

2,113,399 95,667,649 

Purchase of fi xed assets and Intangible assets (including CWIP) (951,627) (43,099,832) 

Increase in investments in subsidiaries - - 

Purchase of Mutual Fund Investments - - 

Interest received (83,123) (3,789,851) 

Dividend received from Mutual Fund Investments 

Fixed Deposit with banks (net) having maturity over three 

- 

months - - 

Net Cash from/(used in) investing activities 

C] CASH FLOW FROM FINANCING ACTIVITIES 

Repayment of term loan (Net) 

Proceeds from issue of Share Capital 

(1,034,750) (46,889,683) 

Loan from holding company 2,546,871 112,247,791 

Application Money Received - - 

Proceeds from working capital loan (net) - - 

Increase/(decrease) in fi nance lease obligation - - 

Dividend paid including dividend tax - - 

Interest and fi nance charges (622) (28,336) 

Net cash from/(used in) fi nancing activities 

D] Exchange differences on translation of foreign currency 

2,546,250 112,219,455 

cash and cash equivalents 

Net Increase/(decrease) in cash and cash 

- - 

equivalents (A + B + C + D) 3,624,898 160,997,421 

Cash and cash equivalents at close of the year (refer Note 1 

below) 

5,368,308 239,694,933 

Cash and cash equivalents at beginning of the year (refer Note 

1 below) 

1,743,410 78,697,513 


Note 1: 


3,624,898 160,997,419 

Cash on hand 300 13,395 

Cheques in Hand 


- - 

- On current accounts 5,368,008 239,681,538 

Total 

Add: Deposits with original maturity over three months 

5,368,308 239,694,933 

Add: Deposits under lien 

Cash and cash equivalents at the end of the year as 

- - 

per Schedule VII 

Note 2: 

5,368,308 239,694,933 

The above cash fl ow statement has been prepared under the indirect method as set out in Accounting 

Standard 3 on cash fl ow statements. 

Note 3: 

Previous year’s fi gures have been rearranged/regroupped wherever necessary. 





Schedules annexed to and forming part of the Balance Sheet as at 


USD USD ` ` USD USD ` ` 


Authorized 

(100,000,000 Equity shares) 

(100,000,000 Preference shares) 


(5,105,200 equity shares of Nominal Value USD 1 each) 

5,105,200 212,355,075 5,105,200 212,355,075 

Total 5,105,200 212,355,075 5,105,200 212,355,075 



As per last Balance Sheet - 28,154,521 - 

Additions during the year 


- - (30,593,548) (2,439,027) 28,154,521 28,154,521 

As per last balance sheet (5,173,672) (215,445,920) (5,575,822) (262,641,230) 

Add: Surplus for the year 2,621,110 119,505,001 402,150 19,040,788 

(2,552,562) (95,940,919) (5,173,672) (243,600,442) 

(2,552,562) (95,940,919) (5,173,672) (243,600,442) 

Total (2,552,562) (98,379,946) (5,173,672) (215,445,920) 


From Others: - - - - 

Loan from KPIT Infosystems Inc., USA 5,546,871 247,667,791 3,000,000 135,420,000 

Total 5,546,871 247,667,791 3,000,000 135,420,000 


Particulars As at 

April 1, 

2010 

GROSS BLOCK DEPRECIATION / AMORTIZATION NET BLOCK 

Additions 

for the Year 

2010-11 

Deletions 

for the Year 

2010-11 

As at 

March 31, 

2011 

30 

Up to 

April 1, 

2010 

For the 

Year 

2010-11 

On 

Deletions/ 

Discarded 

for the year 

2010-11 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

As on 

March 31, 

2010 

USD USD USD USD USD USD USD USD USD USD 

Land (Leasehold) 12,373 15,848 - 28,221 4,884 2,737 - 7,621 20,600 7,489 

Building - - - - - - - - - - 

Plant and Machinery 565,129 186,142 - 751,271 258,796 200,753 - 459,549 291,722 306,333 

Computers - 611,132 - 611,132 - 609,828 - 609,828 1,304 - 

Furniture and fi ttings 49,639 21,782 - 71,422 21,425 10,674 - 32,099 39,323 28,214 

TOTAL 627,141 834,904 - 1,462,046 285,105 823,992 - 1,109,097 352,949 342,036 

Capital Work-in-Progress 116,722 116,722 

GRAND TOTAL 627,141 834,904 - 1,462,046 285,105 823,992 - 1,109,097 469,670 458,758 

Previous Year 619,805 9,107 1,771 627,141 208,794 77,443 1,132 285,105 342,037 - 


April 1, 

2010 

Additions 

for the Year 

2010-11 


Deletions 

for the Year 

2010-11 

Exchange 

Gain/(Loss) 

As at 

March 31, 

2011 

Up to 

April 1, 

2010 

For the 

Year 

2010-11 

On 

Deletions/ 

Discarded 

for the year 

2010-11 

Exchange 

Gain/(Loss) 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

As on 

March 31, 

2010 

` ` ` ` ` ` ` ` ` ` ` ` 

Computers - 27,228,814 - - 27,228,814 - 27,804,084 (575,271.00) - 27,228,813 - - 

Land (Leasehold) 558,532 707,612 - (6,063) 1,260,081 220,469 124,802 - (4,975.33) 340,295 919,786 338,063 

Plant and Machinery 25,509,900 8,369,488 - (276,913) 33,602,474 11,682,039 9,152,999 - (316,187.00) 20,518,851 13,083,623 13,827,861 

Furniture and fi ttings 2,240,709 972,587 - (24,323) 3,188,972 967,113 486,692 - (20,567.99) 1,433,237 1,755,735 1,273,596 

TOTAL 28,309,141 37,278,500 - (307,299) 65,280,341 12,869,621 37,568,578 (575,271) (341,730) 49,521,198 15,759,144 15,439,520 

Previous Year 28,808,532 411,090 79,937 (830,544) 28,309,141 9,704,745 3,666,710 (53,600) (448,234) 12,869,621 15,439,520 -


31 



USD USD ` ` USD USD ` ` 


LONG TERM INVESTMENTS (AT COST) 

Non-Trade (unquoted) 


SPARTA Infotech India Private Limited 

10,000 shares of ` 10/- each (Previous Year: 10,000) 

1,400,000 62,510,000 1,400,000 63,196,000 

Total 1,400,000 62,510,000 1,400,000 63,196,000 


Other Debts 

Considered good 13,160,231 587,604,319 3,706,307 167,302,697 


13,160,231 587,604,319 3,734,603 168,579,986 

Less: Provision for doubtful debts - 13,160,231 - 587,604,319 28,296 3,706,307 1,277,290 167,302,697 

Total 13,160,231 587,604,319 3,706,307 167,302,697 


Cash on hand 


300 13,395 - - 

On current accounts 5,368,008 239,681,538 1,743,410 78,697,513 

On deposit account - 5,368,008 - 239,681,538 - 1,743,410 - 78,697,513 

Total 5,368,308 239,694,933 1,743,410 78,697,513 


[Unsecured, considered good unless otherwise stated] 

Advances recoverable in cash or in kind or for value 

to be received 

7,377 329,371 16,310 736,224 

Due from Subsidiary Companies - - 263,728 11,904,667 

Advance Tax and Tax Deducted At Source (net of provision) 102,846 4,592,052 - - 

Prepaid expenses 21,576 131,799 963,387 5,884,810 29,319 309,356 1,323,466 13,964,356 

Deposits 19,702 879,701 17,481 789,094 

Total 151,501 6,764,511 326,837 14,753,450 

SCHEDULE - IX CURRENT LIABILITIES AND PROVISIONS 



For Goods and Services 4,403,372 196,610,579 2,586,602 116,759,226 

For Accrued Salaries and Benefi ts 3,428,738 153,093,151 1,061,264 47,905,449 

Other Liabilities 370,491 16,542,541 199,629 9,011,239 

Dues to Subsidiaries 1,897,471 84,722,089 - - 

Unearned Revenue 1,203,309 53,727,756 205,631 9,282,181 

11,303,381 504,696,115 4,053,125 182,958,093 

Provisions 

For Taxation (net of advance tax) 79,646 3,556,172 - - 

For Staff Benefi t Schemes 1,067,174 1,146,820 47,649,330 51,205,502 533,937 533,937 24,101,932 24,101,932 

Total 12,450,201 555,901,617 4,587,062 207,060,025


Schedules annexed to and forming part of Profi t & Loss 


Particulars March 31, 

2011 

USD 

March 31, 

2011 

` 

November 12, 

2010 to 

March 31, 

2010 

USD 

November 12, 

2010 to 

March 31, 

2010 

` 

SCHEDULE - X SOFTWARE 


Salaries and Bonus 15,279,275 696,633,072 3,378,521 159,964,512 

Consultancy Charges 16,647,398 759,010,359 2,681,362 126,955,799 

Travel and Overseas Expenses 6,576,341 299,837,297 670,933 31,767,016 

Cost of Service Delivery 7,630,948 347,920,378 1,123,020 53,172,168 

Total 46,133,962 2,103,401,107 7,853,836 371,859,494 

SCHEDULE - XI SELLING AND 


Marketing services expenses 2,747,612 125,272,787 1,072,076 50,760,126 


Total 3,143,765 143,334,724 1,362,282 64,500,647 

SCHEDULE - XII GENERAL AND 


Salaries and Bonus 5,280,742 240,766,617 1,765,149 83,575,371 

Staff Welfare 49,762 2,268,799 991 46,943 

Foreign Travel Expenses 364,234 16,606,642 42,453 2,010,056 

Travelling and Conveyance 604 27,551 2,075 98,238 

Recruitment and Training Expenses 51,638 2,354,340 19,856 940,121 

Rent 173,487 7,909,861 62,260 2,947,875 

Rates and Taxes 1,507 68,700 124 5,862 



Printing and Stationery 42,696 1,946,661 8,421 398,715 

Repairs to Building 2,571 117,225 2,981 141,160 

Repairs to Plant and Machinery (9,633) (439,189) 25,938 1,228,076 


Audit Fees (11,440) (521,584) 11,667 552,388 

Bad debts Written off 60,188 2,744,178 20,657 978,066 

Loss (net) on Sale of Assets - - 361 17,098 

Other Miscellaneous Expenses (111,872) (5,100,627) 430,011 20,359,942 

Total 6,144,236 280,136,267 2,522,513 119,434,708 

SCHEDULE - XIII INTEREST, NET 

Finance Charges 622 28,336 2,715 128,530 

Sub-Total 

Less: 

622 28,336 2,715 128,530 

Interest Income (83,123) (3,789,851) 1,690 80,009 

Total 83,743 3,818,187 1,024 48,520 

32 

SCHEDULE - XIV NOTES TO ACCOUNTS 


Sparta Consulting Inc. is a company incorporated in the State of California, USA. The Company is a 

wholly owned subsidiary of KPIT Infosystems Inc., USA. 

The Company has made a Profi t of USD 2,621,110 (` 119,505,001) in the current fi nancial year. 

The accumulated loss till March 2011 of USD 2,552,562 (` 95,940,919) and the Working Capital of 

USD 6,229,839 (` 278,162,147) as of that date, have presently been funded by the holding company, 

by way of capital contribution. 







the Company. 










liabilities. 



are capitalized till the assets are ready to put to use. 





Lease hold improvement Amortized over period of lease 

Offi ce Equipments 33.33% - SLM 

Plant and machinery 20% - SLM 






excess of the carrying amount over the higher of the asset’s net sales price or present value as 











these assets. 




“Reserve and Surplus”.











made. 




















Sr. 

No. 

Name of 

Related 

Party 


Infosystems 

Inc. 


Infosystems 

Inc. 


Infosystems 

Inc. 


Infosystems 

Inc. 

5 Sparta 

Infotech India 

Pvt. Ltd., 

Noida 

6. Sparta 


Pvt. Ltd., 

Noida 


Infosystems 

Ltd., UK 


Relationship 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Nature of 

Transaction 

Investment in 

Equity 

Amount of 

Transaction 

(`) 

Nil 

[212,355,075] 

Loan 111,625,000 

[135,420,000] 

Interest on 

Loan 

Reimbursement 

of Expenses 

3,992,390 

[83,904] 

28,509,217 

[Nil] 

Subsidiary Investment Nil 

[1,400,000] 

Subsidiary Software 

Consultancy 

Charges 

Fellow 

subsidiary 

Reimbursement 

of Expenses 

302,252,773 

[135,938,160] 

7,187,115 

[Nil] 

Balance as at 

March 31, 2011 

(`) 

212,355,075 

[212,355,075] 

245,575,000 

[135,420,000] 

2,916,666 

[83,904] 

28,509,217 

[Nil] 

54,778,900 

[54,778,900] 

123,133,384 

[(11,904,422)] 

(7,187,115) 

[Nil] 

33 

Sr. 

No. 

Name of 

Related Party 


Infosystems 

Inc. 


Infosystems 

Inc. 


Infosystems 

Inc. 


Infosystems 

Inc. 

5. Sparta 


Pvt. Ltd., 

Noida 

6. Sparta 


Pvt. Ltd., 

Noida 


Infosystems 

Ltd., UK 



Relationship 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Holding 

Company 

Nature of 

Transaction 

Investment in 

Equity 

Amount of 

Transaction 

(USD) 

Loan 2,500,000 

[3,000,000] 

Interest on Loan 87,565 

[1,772] 

Reimbursement 

of Expenses 

625,294 

[Nil] 

Subsidiary Investment Nil 

(Nil) 

Subsidiary Software 

Consultancy 

Charges 

Fellow 

subsidiary 

Reimbursement 

of Expenses 

6,629,319 

[2,870,922] 

160,966 

[Nil] 

Balance as at 

March 31,2010 

(USD) 

Nil 5,105,200 

[5,105,200] 

5,500,000 

[3,000,000] 

63,976 

[1,772] 

625,294 

[Nil] 

1,400,000 

[1,400,000] 

2,757,747 

[(263,728)] 

160,966 

[Nil] 


5. The Company is a wholly owned subsidiary of KPIT Infosystems Inc., USA. The accounts have been 

prepared and audited to attach to the accounts of KPIT Cummins Infosystems Limited, the holding 

company to comply with the provisions of Section 212 of the Companies Act, 1956 in India. 




of the company. An audit report for the Group is issued by Deloitte Haskins & Sells and is included 





Sparta Infotech India Private Limited 


Registered Offi ce: C-157, Manu Apartments, Mayur Vihar, Phase-I, Delhi - 110 091 



Your Directors hereby present their Report on the Audited Accounts of the Company for the period ended 

March 31, 2011. 

Particulars From 01.04.2010 

to 31.03.2011 

` 

*From 13.11.2009 

to 31.03.2010 

` 

Income from Operations 304,733,003 50,288,634 

Total Expenses 171,959,001 41,961,185 

PBDIT 132,774,002 8,327,450 

Profi t/(Loss) before Tax (PBT) 109,226,517 4,080,224 

Profi t/(Loss) after Tax (PAT) 111,222,405 3,459,625 

Profi t available for appropriation 111,222,405 3,459,625 

*Financial fi gures reported are for the post – acquisition period (i.e. from November 13, 2009 to 

March 31, 2010) 

Performance 

The Company recorded revenue of ` 304.73 Million during the year. 

34 

The Company is engaged in the business of providing software consulting, system designing, enterprise 

application and computer programming services to its customers from domestic and offshore locations. 

The Company has a manpower of around 244 as on March 31, 2011. 

Dividend 

No dividend has been recommended for the year ended March 31, 2011. 

Auditors 

The Statutory Auditors, M/s. S. N. Chandak & Associates, Chartered Accountants, New Delhi retire at the 

ensuing Annual General Meeting and have confi rmed their eligibility pursuant to Section 224(1B) of the 

Companies Act, 1956 and willingness to accept the offi ce, if re-appointed. 

Directors’ Responsibility Statement pursuant to Section 217(2AA) of the Companies Act, 1956 

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors confi rm: 

a) That in the preparation of the accounts for the fi nancial year ended March 31, 2011, the applicable 

accounting standards have been followed and there has been no material departure; 

b) That the Directors have selected such accounting policies and applied them consistently and made 

judgements and estimates that were reasonable and prudent so as to give true and fair view of the 

state of affairs of the Company at the end of the said fi nancial year and of the profi t of the Company 

for the said fi nancial year; 

c) That the Directors have taken proper and suffi cient care for the maintenance of adequate accounting 

records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of 

the Company and for preventing and detecting fraud and other irregularities; 

d) That the Directors have prepared the accounts for the year ended March 31, 2011 on a ‘going 

concern’ basis. 

Particulars of Employees under Section 217(2A) of the Companies Act, 1956 

The following are details as required under the provisions of Section 217(2A) of the Companies Act, 1956 

read with Companies (Particulars of Employees) Rules, 1975: 

Employee Name Age (Years) Designation Qualifi cation Experience (Years) Date of joining Remuneration (in ` Lacs) Particulars of previous employment 

Vishal Jain 36 Managing Director MBA 13 01-01-2008 68.86 Fujitsu Consulting 

Vinod K. Mudavangatil 42 Director (Sales & 

Recruitment) 

Notes: Remuneration comprises basic salary, allowances and taxable value of perquisites. 

Remuneration does not include Company’s contribution to provident fund and actuarial valuation of 

gratuity. 

None of the employees is related to any director of the Company. 

None of the employees owns more than 2% of the outstanding shares of the Company as on 

March 31, 2011. 

The nature of employment is contractual in all the above cases. 

Fixed Deposits 

The Company has not accepted any deposits and, as such, no amount of principal or interest was 

outstanding on the date of the Balance Sheet. 

Information u/s 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of 

Particulars in the Report of Board of Directors) Rules, 1988 

Conservation of Energy - Though the operations of the Company are not energy intensive, yet a few energy 

saving measures like using energy - effi cient computers and equipments with latest technologies have 

been implemented by the Company. 

Technology Absorption - The Company is constantly upgrading its technological excellence through its 

Information Technology Services Group. 

MBA 19 15-01-2008 66.06 Fujitsu Consulting 

Foreign Exchange Earnings and Outgo – The Company has its focus on Exports and undertakes all the 

possible efforts to expand its presence in the Export market geographically. Total foreign exchange 

earnings for the period under review have been ` 260.03 Million and foreign exchange outgo is ` 2.19 

Million. 

Acknowledgements 

Your Directors take this opportunity to thank all the shareholders of the Company for their continued 

support. 

Your Directors hereby place on record their appreciation for the co-operation and support received from all 

the Customers, Vendors and bankers and also thank all the employees of the Company for their valuable 

contribution in the Company. 

By Order of the Board of Directors 

For Sparta Infotech India Private Limited 

Delhi Vishal Jain 




` ` ` ` 



Share Capital I 54,878,900 54,878,900 

Reserves and Surplus II 141,211,399 196,090,299 29,988,995 84,867,895 

Deferred Tax Liability (Net) - 177,418 

Total 


196,090,299 85,045,313 

Fixed Assets III 

Gross Block 

Less: Accumulated 

122,125,093 103,864,083 

Depreciation/Amortization 39,795,608 23,151,144 

Net Block 82,329,485 80,712,939 

Capital Work-in-Progress 

Current Assets, Loans 

and Advances 

17,020,639 99,350,124 8,152,995 88,865,934 

Sundry Debtors IV 118,549,213 4,420,962 

Cash and Bank Balances V 14,629,361 11,741,221 

Loans and Advances VI 6,651,362 5,756,304 

Less: Current Liabilities 

and Provisions 

139,829,936 21,918,487 

Current Liabilities VII 42,844,092 24,562,841 

Provisions VII 2,118,140 1,176,267 

44,962,232 25,739,108 

Net Current Assets 94,867,704 (3,820,621) 

Deferred Tax Asset (Net) 1,872,471 - 

Total 196,090,299 85,045,313 

Signifi cant Accounting 

Policies and Notes to 

Accounts 

XII 


Delhi Samiksha Agrawal Vishal Jain Rohit Kayal 

April 14, 2011 Company Secretary Director Director 

35 



Schedule March 31, 2011 November 13, 2009 

to ‘March 31, 2010 

` ` 

INCOME 


- Overseas Sales 304,408,003 50,288,634 

- Domestic Sales 325,000 - 

304,733,003 50,288,634 

Software Development Expenses VIII 125,072,822 33,080,538 

Gross Profi t 179,660,181 17,208,096 

General and Administration Expenses 

Profi t before interest, depreciation and 

IX 46,886,179 8,880,647 

exchange Gain/(Loss) 132,774,002 8,327,450 

Interest X 1,844,447 398,478 

Depreciation/Amortization III 16,690,165 5,328,673 

Preliminary Expenses written off 

Profi t After Interest, Depreciation and 

41,900 - 

Before Tax and Exchange Gain/(Loss) 114,197,492 2,600,300 

Other Income XI (4,970,974) 1,479,924 

Profi t Before Tax 109,226,517 4,080,224 

Provision for Taxation - Current Year 54,000 - 

Provision for Taxation - Deferred Tax (2,049,889) 620,598 

Profi t After Tax 111,222,405 3,459,625 

Profi t Available for Appropriation 111,222,405 3,459,625 



April 14, 2011 Company Secretary Director Director



Particulars 


March 31, 2011 

` 

Net profi t/(loss) before tax 


109,226,517 

(Profi t)/loss on sale of fi xed assets (net) 699 

Depreciation/Amortization 16,690,165 

Interest and fi nancial charges 14,970 



125,976,671 

(Increase)/Decrease in Sundry Debtors (114,201,128) 

(Increase)/Decrease in Loans and Advances (1,103,898) 

Increase/(Decrease) in Current Liabilities and Provisions 19,212,240 

Cash generated from operations 29,883,885 

Taxes Paid 191,423 



30,075,308 

Purchase of fi xed assets and Intangible assets (including CWIP) (27,192,654) 

Proceeds from the sale of fi xed assets 17,600 

Increase in investments in subsidiaries - 

Sale of Investments in shares of banks/Mutual funds - 

(Increase)/Decrease in advances for acquisitions - 

Sale of investment - 

Proceeds from liquidation of subsidiary - KPIT Systems L.L.C , Dubai, ME - 

Purchase of Mutual Fund Investments - 

Interest received 2,856 

Dividend received from Mutual Fund Investments - 

Fixed Deposit with banks (net) having maturity over three months - 



(27,172,198) 

Interest and fi nance charges (14,970) 

Net cash from/(used in) fi nancing activities (14,970) 

D] Exchange differences on translation of foreign currency cash and cash 

equivalents 

- 

Net Increase/(decrease) in cash and cash equivalents (A + B + C + D) 2,888,140 

Cash and cash equivalents at close of the year (refer Note 1 below) 14,629,361 

Cash and cash equivalents at beginning of the year (refer Note 1 below) 11,741,221 

Cash surplus/(defi cit) for the year 2,888,140 

Note 1: 


- 

Cash on hand 


22,445 

- On current accounts 13,606,915 

- On deposit account 1,000,000 

Cash and cash equivalents at the end of the year as per Schedule VII 

Note 2: 

14,629,361 

The above cash fl ow statement has been prepared under the indirect method as set out in Accounting 

Standard 3 on cash fl ow statements 



April 14, 2011 Company Secretary Director Director 

36 


as at 

March 31, 2011 March 31, 2010 

` ` ` ` 


Authorized 

(6,000,000 equity shares of ` 10 each) 60,000,000 60,000,000 


(5,487,890 equity shares (PY 5,487,890) 

of ` 10 each fully paid up) 

54,878,900 54,878,900 

Total 54,878,900 54,878,900 

SCHEDULE - II RESERVES AND 

SURPLUS 


As per last balance sheet 29,988,994 26,529,368 

Add: Surplus for the year 111,222,405 141,211,399 3,459,625 29,988,995 

Total 141,211,399 29,988,995


SCHEDULE - III FIXED ASSETS 


April 1, 2010 

Additions 

for the Year 

2010-11 

37 



Deletions 

for the Year 

2010-11 

As at 

March 31, 

2011 

Up to 

April 1, 2010 

For the Year 

2010-11 

On Deletions/ 

Discarded 

for the year 

2010-11 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

As on 

March 31, 

2010 

` `. ` ` ` ` ` ` ` ` 

Intangible Assets 

Goodwill 

[Refer Note 1.5 of Schedule XV] 

- - - - - - - - - - 

Software Package 

Tangible Assets 

4,373,627 3,108,580 - 7,482,207 2,045,134 2,144,895 - 4,190,029 3,292,178 2,328,493 

Land (Leasehold) - - - - - - - - - - 

Building 68,605,322 2,873,800 - 71,479,122 8,927,499 4,906,040 - 13,833,539 57,645,583 59,677,823 

Plant and Machinery 18,189,452 4,808,123 - 22,997,575 6,102,523 4,441,874 - 10,544,397 12,453,178 12,086,929 

Computers 8,810,111 5,909,507 64,000 14,655,618 4,579,386 4,180,446 45,701 8,714,131 5,941,487 4,230,725 

Furniture and fi ttings 3,494,571 1,625,000 - 5,119,571 1,443,469 938,711 - 2,382,180 2,737,391 2,051,102 

Vehicles - Owned 391,000 - - 391,000 53,133 78,200 - 131,333 259,667 337,867 

Total 103,864,083 18,325,010 64,000 122,125,093 23,151,144 16,690,166 45,701 39,795,609 82,329,484 80,712,939 

Capital Work-in-Progress - - - - - - - - 17,020,639 9,340,832 

Grand Total 103,864,083 18,325,010 64,000 122,125,093 23,151,144 16,690,166 45,701 39,795,609 99,350,123 90,053,771 

March 31, 2011 March 31, 2010 

` ` ` ` 

SCHEDULE - IV SUNDRY DEBTORS 

Other Debts 

Considered good 118,549,213 4,420,962 

Considered doubtful - - 

118,549,213 4,420,962 

Less: Provision for doubtful debts - 118,549,213 - 4,420,962 

Total 118,549,213 4,420,962 

SCHEDULE - V CASH AND BANK 

BALANCES 

Cash on hand 


22,445 24,857 

On current accounts 13,606,915 11,716,364 

On deposit account 1,000,000 14,606,915 - 11,716,364 

Total 14,629,361 11,741,221 

SCHEDULE - VI LOANS AND ADVANCES 

Advances recoverable in cash or in 

kind or for value to be received 

5,585,124 4,532,095 

Advance Tax and Tax deducted at source 

(net of provision) 

111,351 345,890 


Deposits 785,134 751,759 

Interest accrued on fi xed deposits 25,699 - 

Income accrued but not due - - 

Total 6,651,362 5,756,304 

SCHEDULE - VII CURRENT LIABILITIES 




For Goods and Services 6,377,265 22,635,847 

Other Liabilities 6,405,581 1,926,995 

Due to Subsidiary Companies 30,061,247 - 

42,844,092 24,562,841 

Provisions 

For Taxation (net of advance tax) 10,884 - 

For Staff Benefi t Schemes 2,107,256 2,118,140 1,176,267 1,176,267 

Total 44,962,232 25,739,108 



Particulars March 31, 2011 November 13, 2009 

to ‘March 31, 2010 

SCHEDULE VIII - SOFTWARE 


` ` 

Salaries and Bonus 88,893,913 32,702,545 

Consultancy Charges 36,178,909 377,993 

Total 125,072,822 33,080,538 

SCHEDULE - IX GENERAL AND 


Staff Welfare 5,663,755 3,011,630 

Travelling and Conveyance 4,385,092 857,596 

Recruitment and Training Expenses 995,194 282,631 

Rent 168,277 68,212 

Communication Expenses 5,246,131 2,156,968 

Professional and Legal Expenses 487,700 110,022 

Printing and Stationery 188,585 28,899 

Repairs to Plant and Machinery 657,301 (19,942) 

Repairs to Others 1,165,257 242,203 

Power and Fuel 2,756,799 644,853 

Insurance Charges 

Auditors Remuneration 

1,522,499 419,931 

Audit Fees 400,000 181,775 

Out-of-Pocket Expenses 25,000 (958) 

Loss (net) on Sale of Assets 699 3,697 

Other Miscellaneous Expenses 3,147,579 893,129 

Total 46,886,179 8,880,647 

SCHEDULE - X INTEREST, NET 

Finance Charges 14,970 5,193 

Lease Charges 1,858,032 393,285 

Less: 

1,873,002 398,478 

Interest Income 28,555 - 

Total 1,844,447 398,478 

SCHEDULE - XI OTHER INCOME 

Foreign exchange gain/(loss) (5,016,869) 1,458,859 

Miscellaneous Income 45,895 21,065 

Total (4,970,974) 1,479,924


Schedule XII - Signifi cant Accounting Policies and Notes to 

Accounts 

Company Overview 

Sparta Infotech India Private Limited was incorporated on 25th August, 2007 under the Companies Act, 

1956 and is subsidiary of Sparta Consulting Inc., USA. 

Sparta Infotech India Private Limited (herein referred to as “Company”) is in the business of providing 

software consulting, system design, enterprise application and computer programming services to 

its customers from domestic and offshore location and has its development facility located at Special 

Economic Zone, Noida. 


Basis for preparation of fi nancial statements 

The fi nancial statements are prepared in accordance with Indian Generally Accepted Accounting 

Principles (‘GAAP’) under the historical cost convention on accrual basis. All items of income and 

expenditure having a material bearing on the fi nancial statements are recognized on the accrual basis. 

GAAP comprises mandatory accounting standards as prescribed by the Companies Accounting 

Standard Rules, 2006 and the provisions of Companies Act, 1956. 

Use of Estimates 

The preparation of fi nancial statements requires the management of the Company to make estimates 

and assumptions that affect the reported balances of assets and liabilities and disclosures relating to 

the contingent liabilities as at the date of fi nancial statements and reported amounts of income and 

expenditure during the year. 

1.1. Revenue recognition 

The Company derives revenues primarily from software related services. Arrangement with 

customers for software related services are either on a fi xed price or on time and material 

basis. 

Revenue on time and material contracts is recognized as the related services are performed 

and revenue from the end of the last billing to the balance sheet date is recognized as unbilled 

revenues. Revenue from fi xed-price contracts are recognized as per percentage of completion 

method which is determined on the basis of time incurred as a proportion of budgeted time. 

Costs and earnings in excess of costs and earnings are classifi ed as unearned revenue on 

individual contract basis. 

1.2. Expenditure 

Expenses are accounted on the accrual basis and provisions are made for all known losses and 

liabilities. 

1.3. Provision for Doubtful Debts 

The Company carries out the periodic exercise to evaluate its receivables. 

While making such provision, various other factors like probable recovery of the dues, 

business risks, economic factors, legal status of the customer / Joint Ventures / Partners are 

taken into account. 

1.4. Fixed Assets, Intangible Assets and Capital Work-in-Progress 

(a) Fixed Assets are stated at the cost of acquisition, less accumulated depreciation and 

impairment loss, if any. Direct costs are capitalized till the assets are put to use. 

(b) Intangible Assets 

If a Company incurs expenditure which meets criteria of intangible asset as mentioned in 

Accounting Standard 26, such expenditure is capitalized and is amortized over its useful 

life as estimated by the Management. 

1.5. Depreciation 

Depreciation on fi xed assets is provided using straight-line method based on useful life of 

assets as estimated by the Management. Depreciation is charged on all assets purchased and 

sold during the year on a proportionate basis. The rates of depreciation are as per or above 

minimum rates prescribed under Schedule XIV of the Companies Act, 1956. The Rates of 

Depreciation are as follows: 

Individual assets costing less than ` 5,000/- are depreciated at the rate of 100%. Permanent 

improvements to the leasehold property are depreciated over the lease term or useful life 

whichever is shorter. 

• Furniture and fi ttings - 20.00% 

• Computer Equipments and Software - 33.33% 

• Vehicles - 20.00% 

• Offi ce Equipments - 20.00% 

• Buildings - Over the lease period of land 

1.6. Impairment of Assets 

The Management periodically assesses using, external and internal sources, whether there is 

an indication that an asset may be impaired. Impairment loss is recognised when the carrying 

value of an asset exceeds its recoverable amount. The recoverable amount is higher of the 

asset’s net selling price and value in use, which means the present value of future cash fl ows 

expected to arise from the continuing use of the asset and its eventual disposal. 

1.7. Leases 

Assets leased by the Company in the capacity of the Lessee, where the Company has 

substantially all the risks and rewards of ownership are classifi ed as Finance Lease. Such 

leases are classifi ed at the inception of Lease at lower of the Fair Value or the present value of 

minimum lease payments and a liability is created for an equivalent amount. Each lease rental 

paid is allocated between the liability and interest cost so as to obtain a constant period rate of 

interest on the outstanding liability for each year. 

Lease arrangement where the risks and rewards incidental to the ownership of an asset 

substantially vest with the lessor, are recognised as Operating Lease. Lease Rentals under 

operating lease are recognised in the Profi t and Loss Account on straight line basis. 

38 

1.8. Foreign currency transactions 

Foreign currency denominated monetary assets and liabilities are translated at exchange 

rates in effect at the Balance Sheet date. The gains or losses resulting from such transactions 

are included in the Profi t and Loss Account. Income and expenses denominated in foreign 

currencies are translated using exchange rate in effect on the date of transaction. Transaction 

gains or losses realized upon settlement of foreign currency transactions are included in 

determining the net profi t for the period in which transaction is settled. 

1.9. Retirement benefi ts to employees 

Contribution to the provident fund is recognized as an expense in the Profi t and Loss account 

in the year in which contribution is due. 

Gratuity and leave encashment which are defi ned benefi ts are accrued on an actuarial valuation 

carried out by an independent actuary at each balance sheet date. 

1.10. Accounting for Taxes on Income 

Income tax comprises of current tax (i.e. amount of tax for the period determined in accordance 

with the income tax law) and deferred tax (refl ecting the tax effects of timing differences 

between accounting income and taxable income for the period). The deferred tax charge or 

credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates 

that they will be realized in future; however where there is unabsorbed depreciation and carry 

forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual 

certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet 

date and written down or written up to refl ect the amount that is reasonably/virtually certain 

(as the case may be) to be realized. 

Timing differences which reverse within the tax holiday period, do not result in tax consequence 

and therefore no deferred taxes are recognized in respect of the same. For this purpose, the 

timing differences, which originate fi rst, are considered to reverse fi rst. 

1.11. Provisions, Contingent Liabilities and Contingent Assets 

As per Accounting Standard 29, ‘Provisions, Contingent Liabilities and Contingent Assets’, the 

Company recognizes provisions only when it has a present obligation as a result of a past event, 

it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle 

the obligation and when a reliable estimate of the amount of the obligation can be made. 















1.12. Cash Flow Statement 

Cash Flows are reported using the indirect method, whereby net profi ts before tax is adjusted 

for the effects of transactions of a non-cash nature and any deferrals or accruals of past or 

future cash receipts or payments. The cash fl ows from regular revenue generating, investing 

and fi nancing activities of the Company are segregated. 

2. Disclosures as required by Schedule VI of the Companies Act, 1956 

2.1 Managerial Remuneration: 

(` in Lacs) 

2011 2010 

Salary and allowances 76.80 34.32 

Contribution to provident fund 1.54 0.54 

Total 78.34 34.86 

Information relating to managerial remuneration does not include provision for gratuity 

and leave encashment, which is provided on an overall basis. Perquisites are valued by 

management at cost/fair values. Computation of net profi ts in accordance with Section 349 of 

the Companies Act, 1956 has not been given, as commission by way of percentage of profi ts 

for the year is not payable to the key managerial personnel. 

2.2 Capital Commitments 

(` in Lacs) 

2011 2010 

Estimated amount of contracts remaining to be 

executed on capital account (net of advances) not 

provided for 18.86 56.87 

2.3 In the opinion of the Board of Directors, Current Assets, Loans and Advances have a value on 

realization in ordinary course of business at least equal to the amount at which they are stated 

in the Balance sheet. 

2.4 Contingent Liabilities not provided for ` Nil. (Previous Year Nil) 

2.5 Value of imports on CIF basis: 

(` in Lacs) 

2011 2010 

Capital goods 9.14 Nil

2.6 Earning in foreign currency (On accrual basis): 

(` in Lacs) 

2011 2010 

Software service income 2,600.29 502.89 

2.7 Expenditure in foreign currency (On accrual basis); 

(` in Lacs) 

2011 2010 

Travelling 12.80 13.46 

Others 9.14 Nil 

Total 21.94 13.46 

2.8 Quantitative information 

The Company is engaged in providing software services. The production and sale of such 

software services cannot be expressed in any generic unit. Hence, it is not possible to give 

quantitative information as required under paragraph 3 and 4C of part II of Schedule VI of the 

Companies Act, 1956. 

2.9 There are no dues payable to small-scale industrial undertakings and dues to micro and small 

enterprises. 

3. Disclosures as required by Accounting Standards issued by The Institute of Chartered Accountants 

of India: 

3.1 Related party transactions 

The following related party transactions were carried out during the year: 

(` in Lacs) 

Name of the 

Related Party 

Sparta Consulting 

Inc., USA 


Infosystems 

Limited 

Nature of 

Relationship 

Holding 

Company 

Ultimate Parent 

Company 

Nature of 

Transaction 

Sale of Services 

[including 

2011 2010 

unbilled revenue] 

Reimbursement 

of expenses 

3037.27 550.00 

received 

Advance 

404.96 28.72 

received 

Accounts 

Nil 191.62 

Receivable 

Software 

development 

& consultancy 

727.17 Nil 

charges 

Accounts 

334.01 Nil 

Payable 300.61 Nil 

Sh. Rohit Kayal Director Remuneration 8.24 6.92 

Sh. Vishal Jain Director Remuneration 70.10 27.94 

3.2 Cash and cash equivalents 

(` in Lacs) 

Particulars 

At the beginning of the year 

2011 2010 

Cash in hand 

Balance with schedule banks 

0.25 0.63 

In current accounts 

At the end of the year 

117.16 54.16 

Cash in hand 

Balance with schedule banks 

0.22 0.25 

In current accounts 136.07 117.16 

Note: Fixed deposits with bank having original maturity of more than three months 

aggregating to ` 10.26 Lacs (Previous year: ` Nil) are not readily available for liquidity and 

have been excluded from Cash and cash equivalents. 

3.3 Segment reporting 

The Company has only one business segment i.e. IT software services and no further 

disclosures are required under Accounting standard-17, issued by the Institute of Chartered 

Accountants of India. 

Geographical segments: 

The following table shows the distribution of the Company’s consolidated sales and debtors/ 

unbilled debtors by geographical market, regardless of where the services were rendered. 

(` in Lacs) 

Outside India India 

Revenue 3,044.08 3.25 

[502.89] - 

Debtors (including unbilled revenue) 1,185.49 - 

[44.20] - 

*Gross Block of Fixed Assets (including 

- 1,316.63 

work-in-progress and capital advances) 

*Gross block of fi xed assets located in India 

- [1,088.31] 

39 


3.4 Retirement Benefi ts 

The disclosures as per the revised Accounting Standard 15 on “Employee Benefi ts”, (AS 15) 

issued by the Institute of Chartered Accountants of India are as follows: 

Actuarial valuation has been done with the following assumptions. 

a) Compensated absences 

b) Gratuity 

Particulars Compensated absences 

(Unfunded) 

Gratuity 

(Unfunded) 

2011 2010 2011 2010 

Discount rate 

Rate of increase in 

8.00% 7.50% 8.00% 7.50% 

compensation levels 5.50% 5.00% 5.50% 5.00% 

A. Change in the present value of obligation : 


Gratuity 

(Unfunded) 

(Unfunded) 

2011 2010 2011 2010 

` ` ` ` 

Opening present value of 

obligation 297,496 255,954 878,771 336,480 

Interest cost 23,800 19,197 70,302 25,236 

Current service cost 262,026 179,394 764,641 504,368 

Benefi ts paid 

Actuarial loss/(gain) on 

(1,006,198) (628,286) – – 

obligations 

Closing present value of 

909,079 471,237 (92,661) 12,687 

obligation 486,203 297,496 1,621,053 878,771 

B. Expenses recognized in the Profi t and Loss Account 


(Unfunded) 

Gratuity 

(Unfunded) 

2011 2010 2011 2010 

` ` ` ` 

Current service cost 262,026 179,394 764,641 504,368 

Interest cost 

Net actuarial loss/ (gain) 

23,800 19,197 70,302 25,236 

recognized in the period 

Total expenses recognized in 

909,079 471,237 (92,661) 12,687 

the Profi t and Loss account 1,194,905 669,828 742,282 542,291 

3.4 Earning per share 

Particulars 2011 2010 

Weighted average number of equity shares of ` 10 each 

outstanding during the year 

5,487,890 5,487,890 

Net profi t after tax (in `) 111,222,405 27,160,092 

Net profi t after tax available for equity shareholders (in `) 111,222,405 27,160,092 

Basic and diluted earning per equity share of ` 10 each 20.27 4.95 

3.5 Deferred Tax Assets/Liability (net) 

The net deferred tax assets/liability represents the following timing differences: 

(` in Lacs ) 

2011 2010 

a) Deferred tax assets 

Arising on account of timing differences in: 

- Depreciation 1,872,471 - 

b) Deferred tax liabilities 

Arising on account of timing differences in: 

- Depreciation - 177,418 

Deferred tax assets /(liability) 1,872,471 (177,418) 

4. Other Disclosures and Explanatory Notes 

4.1 Previous year fi gures have been regrouped or rearranged wherever necessary to make them 

comparable with those of current year. 



April 14, 2011 Company Secretary Director Director

In2soft GmbH 

KPIT In2soft GmbH 

Registered Offi ce: Adams-Lehmann-Str. 109, 80797 Munich, Germany 



Your Directors are pleased to present herewith the report of the Directors on the operations of the Company 

together with the accounts for the period ended March 31, 2011. 


Particulars *1.10.2010 to 31.03.2011 *1.10.2010 to 31.03.2011 

Euro 

` 


1,643,592 

99,192,149 

Net Profi t /(Loss) for the period 

121,426 

7,328,198 

*Financial fi gures reported are for the post acquisition period (i.e. from October 1, 2010 to March 31, 

2011) 

Operations 

The Company recorded revenue of Euro 1.64 Million during the period under review. 

In October, 2010, KPIT Infosystems GmbH, a wholly owned subsidiary of KPIT Infosystems Limited, UK 

acquired 74% shareholding in the Company. The fi xed consideration payable for acquisition of the shares 



Euro Euro ` ` 



Share Capital I 50,000 3,050,000 

Reserves and Surplus II 486,704 30,891,189 

536,704 33,941,189 

Loan Funds 

Secured Loans III 180,813 11,434,641 


Total 717,517 45,375,830 


Gross Block 

Less: Accumulated Depreciation/ 

246,606 15,595,357 

Amortisation 199,707 12,629,477 

Net Block 46,899 2,965,880 

Capital Work-in-Progress 

Current Assets, Loans and Advances 

- 46,899 - 2,965,880 

Sundry Debtors V 885,129 55,975,533 

Cash and Bank Balances VI 511 32,345 

Loans and Advances VII 24,925 1,576,285 

Less: Current Liabilities and 

Provisions 

910,565 57,584,163 

Current Liabilities VIII 119,691 7,569,239 

Provisions VIII 120,256 7,604,974 

239,947 15,174,213 

Net Current Assets 670,618 42,409,950 

Total 717,517 45,375,830 

Signifi cant Accounting Policies 

and Notes to Accounts XIV 


Munich Guven Kivran 

April 24, 2011 Managing Director 

40 

is Euro 2.5 Million. The objective of the acquisition was to have productized solutions for global automotive 

customers. 

Audit 

The Company is not required by UK laws to have an independent audit fi rm to issue a report to the 









In2soft GmbH 




INCOME 



Euro ` 

- Overseas Sales 11,306 682,327 

- Domestic Sales 1,632,286 98,509,822 

1,643,592 99,192,149 

Software Development Expenses IX 1,109,546 66,962,012 

Gross Profi t 534,046 32,230,137 

Selling and Marketing Expenses X 63,125 3,809,623 

General and Administration Expenses XI 228,753 13,805,410 

Profi t before interest, depreciation and exchange 

Gain/(Loss) 242,168 14,615,104 

Interest XII 5,377 324,525 

Depreciation/Amortisation IV 14,621 882,394 

Profi t After Interest, Depreciation and Before Tax 

and Exchange Gain/(Loss) 222,170 13,408,185 

Other Income XIII 12,233 738,293 

Profi t Before Tax 234,403 14,146,478 

Provision for Taxation - Current Year 112,977 6,818,280 

Profi t After Tax 121,426 7,328,198 

Signifi cant Accounting Policies and Notes to Accounts XIV 

Schedules annexed to and forming part of Profi t and Loss Account for the year ended 



April 24, 2011 Managing Director


Particulars March 31, 2011 March 31,2011 


Euro ` 

Net profi t/(loss) before tax 


234,403 14,146,478 

(Profi t)/loss on sale of fi xed assets (net) - - 

Depreciation/Amortisation 14,621 882,394 

Employee Stock Option cost - - 

Interest and fi nancial charges 5,377 324,525 

Interest income - - 

Unrealised foreign exchange (Gain)/Loss - 1,281,051 



254,402 16,634,448 

(Increase)/Decrease in Sundry Debtors 149,614 7,143,746 

(Increase)/Decrease in Loans and Advances 2,878 167,284 

Increase/(Decrease) in Current Liabilities and Provisions (38,409) (1,983,295) 

Cash generated from operations 368,485 21,962,184 

Taxes Paid (69,688) (4,047,436) 



298,797 17,914,748 

Purchase of fi xed assets and Intangible assets (including CWIP) (7,704) (565,507) 



(7,704) (565,507) 

Proceeds from working capital loan (net) (107,680) (6,163,428) 

Increase/(decrease) in fi nance lease obligation - - 

Dividend paid including dividend tax (178,173) (10,868,523) 

Interest and fi nance charges (5,377) (324,525) 

Net cash from/(used in) fi nancing activities 

D] Exchange differences on translation of foreign currency 

(291,229) (17,356,476) 

cash and cash equivalents 

Net Increase/(decrease) in cash and cash equivalents 

- - 

(A + B + C + D) (137) (7,237) 

Cash and cash equivalents at close of the year (refer note 1 below) 

Cash and cash equivalents at beginning of the year (refer note 

511 32,345 

1 below) 649 39,582 


Note 1: 


(137) (7,237) 




- - 

- On current accounts 3 215 

- On deposit account - - 

Total 511 32,345 

Add: Deposits with original maturity over three months - - 

Add: Deposits under lien 

Cash and cash equivalents at the end of the year as per 

- - 

Schedule VII 

Note 2: 

The above cash fl ow statement has been prepared under the 

indirect method as set out in Accounting Standard 3 on cash 

fl ow statements 

Note 3: 

Previous year’s fi gures have been rearranged/regroupped 

wherever necessary 

511 32,345 




41 



March 31, 2011 March 31, 2011 

Euro Euro ` ` 


Authorized 

50,000 Ordinary Shares of Nominal Value Euro 

1 each 


50,000 3,050,000 

(50,000 shares of Euro 1 each) 50,000 3,050,000 

Total 50,000 3,050,000 



As per last Balance Sheet - - 

Additions during the year - - 462,819 462,819 

Profi t and Loss Prior to acquisition 


365,278 23,100,172 

As per last balance sheet - - 

Add: Surplus for the year 121,426 7,328,198 

121,426 7,328,198 

121,426 7,328,198 

Total 486,704 30,891,189 

SCHEDULE - III SECURED LOANS 

Cash credit 

[Secured by hypothecation of current assets] 180,813 11,434,641 

Total 180,813 11,434,641


Schedules annexed to and forming part of the Consolidated Balance Sheet 



October 1, 

2010 

Additions 

for the Year 

2010-11 

March 31, 2011 March 31, 2011 

Euro Euro ` ` 

SCHEDULE - V SUNDRY DEBTORS 

Considered good 885,129 55,975,533 

Considered doubtful 7,600 480,624 

892,729 - 56,456,157 - 

Less: Provision for doubtful debts 7,600 885,129 480,624 55,975,533 

Total 885,129 55,975,533 

SCHEDULE - VI CASH AND BANK BALANCES 




- 

On current accounts 3 - 215 

On deposit account - 3 - 215 

Total 511 32,345 


Deductions 

for the 

Year 2010-11 

Exchange 

Gain/Loss 

As at 

March 31, 

2011 

Up to 

October 1, 

2010 

42 

For the 

Year 

2010-11 

On Deletions/ 

Discarded for the 

year 2010-11 

Exchange 

Gain/Loss 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

Euro 

As on 

September 

30, 2010 

Computers and Software 22,336 1,762 - - 24,098 20,710 773 - - 21,483 2,615 1,626 

Plant and Machinery 214,475 8,033 - - 222,507 164,376 13,848 - - 178,224 44,284 50,099 

Total 236,811 9,795 - - 246,606 185,086 14,621 - - 199,707 46,899 51,725 


October 1, 

2010 

Additions 

for the Year 

2010-11 

Gross Block Depreciation / Amortization Net Block 

Deductions 

for the 

Year 2010-11 

Exchange 

Gain/Loss 

As at 

March 31, 

2011 

Up to 

October 1, 

2010 

For the 

Year 

2010-11 

On Deletions/ 

Discarded for the 

year 2010-11 

Exchange 

Gain/Loss 

Up to 

March 31, 

2011 

As on 

March 31, 

2011 

` 

As on 

September 

30, 2010 

Computers and Software 1,362,511 111,442 - 50,033 1,523,985 1,164,183 46,665 - 147,749 1,358,597 165,388 198,327 

Plant and Machinery 13,082,953 507,996 - 480,423 14,071,372 9,998,514 835,729 - 436,637 11,270,879 2,800,492 3,084,439 

Total 14,445,464 619,437 - 530,456 15,595,357 11,162,697 882,394 - 584,386 12,629,477 2,965,881 3,282,767 

March 31, 2011 March 31, 2011 

Euro Euro ` ` 

SCHEDULE - VII LOANS AND ADVANCES 

[Unsecured, considered good unless 

otherwise stated] 

Advances recoverable in cash or in kind or 

for value to be received 

3,683 232,904 

Due from Subsidiary Companies - - 

Advance Tax and Tax Deducted At Source (net 

of provision) 

21,243 1,343,382 - 

Prepaid expenses - 24,925 - 1,576,285 

Total 24,925 1,576,285 

SCHEDULE - VIII CURRENT LIABILITIES 




For Goods and Services 23,167 1,465,086 

Other Liabilities 43,805 2,770,231 

Due to Subsidiary Companies 52,719 3,333,921 

119,691 7,569,239 

Provisions 

for Taxation (net of advance tax) 79,356 5,018,458 

for Staff Benefi t Schemes 40,900 120,256 2,586,516 7,604,974 

Total 239,947 15,174,212



Particulars March 31, 2011 March 31, 2011 

SCHEDULE - IX SOFTWARE DEVELOPMENT EXPENSES 

Euro ` 

Salaries and Bonus 1,051,279 63,445,584 

Contribution to Providend and other funds - - 

Consultancy Charges - - 

Travel and Overseas Expenses 891 53,773 


Cost of Service Delivery 57,375 3,462,656 

Total 1,109,546 66,962,012 

SCHEDULE - X SELLING AND MARKETING EXPENSES 

Marketing services expenses 19,180 1,157,529 

Marketing travel expenses 43,945 2,652,094 

Total 63,125 3,809,623 

SCHEDULE - XI GENERAL AND ADMINISTRATION EXPENSES 

Salaries and Bonus 10,454 630,917 

Contribution to Providend and other funds - 

Staff Welfare 16,887 1,019,163 


Foreign Travel Expenses - - 

Travelling and Conveyance 4,331 261,404 

Recruitment and Training Expenses 913 55,102 

Rent 108,048 6,520,787 

Rates and Taxes 2,905 175,326 

Communication Expenses 5,094 307,444 

Professional and Legal Expenses 27,579 1,664,398 

Printing and Stationery 2,809 169,524 

Repairs to Building - - 

Repairs to Plant and Machinery - - 

Repairs to Others 34,117 2,059,004 

Power and Fuel 4,215 254,386 

Insurance Charges 2,956 178,389 

Other Miscellaneous Expenses 8,443 509,568 

Total 228,753 13,805,410 

SCHEDULE - XII INTEREST, NET 

Finance Charges 5,377 324,525 

Lease Charges - 

Sub-Total 5,377 324,525 

Less: 

Interest Income - - 

Total 5,377 324,525 

SCHEDULE - XIII OTHER INCOME 

Foreign exchange gain/(loss) - 

Miscellaneous Income 12,233 738,293 

Total 12,233 738,293 

SCHEDULE XIV - NOTES TO ACCOUNTS 


In2soft GmbH is a company incorporated in the Germany. On October 1, 2010, KPIT Infosystems 

GmbH Germany has acquired 74% shares in the Company. 

The Company has made a Profi t of Euro 121,426 (` 7,328,198) in the current fi nancial year. 





43 




the Company. 






obligations. In case of fi xed price contracts, revenue is recognised based on the milestone/s 




liabilities. 



are capitalised till the assets are ready to put to use. 





Computers and Software 33.33%- SLM 

Offi ce Equipments 

10.00% - SLM 

Plant and Machinery 

33.33% - SLM 


The Management periodically assesses using, external and internal sources, whether there is 

an indication that an asset may be impaired. Impairment loss is recognised when the carrying 

value of an asset exceeds its recoverable amount. The recoverable amount is higher of the 

asset’s net selling price and value in use, which means the present value of future cash fl ows 

expected to arise from the continuing use of the asset and its eventual disposal 








these assets. 




“Reserve and Surplus”. 











made. 


A. Any possible obligation that arises from past events and the existence of which will 

be confi rmed only by the occurrence or non-occurrence of one or more uncertain future 






Such obligations are recorded as Contingent Liabilities. These are assessed periodically and 

only that part of the obligation for which an outfl ow of resources embodying economic benefi ts 

is probable, is provided for, except in the extremely rare circumstances where no reliable 

estimate can be made. 




The Company has no liabilities of contingent nature outstanding as at March 31, 2011.





Sr. 

No. 


Party 


GmbH, Germany 


Inc. 


GmbH, Germany 

Sr. 

No. 


Party 


GmbH, Germany 

2 KPIT Infosystems 

Inc. 


GmbH, Germany 


Relationship 

Nature of 

Transaction 

Holding Company Investment in 

Equity 


expenses to UK 


of holding 

company 


Relationship 

Reimbursement 

of expenses from 

Germany 

Nature of 

Transaction 

Holding Company Investment in 

Equity 


Consultancy 

charges payable 


of holding 

company 

Reimbursement 

of expenses from 

Germany 



Transaction March 31, 2011 

(`) 

(`) 

3,162,000 3,162,000 

3,244,240 (3,244,240) 

332,451 332,451 


Transaction March 31, 2011 

(Euro) (Euro) 

50,000 50,000 

52,719 (52,719) 

5,257 5,257 

44 

5. The Company is a wholly owned subsidiary of KPIT Infosystems Inc., USA. The accounts have been 

prepared and audited to attach to the accounts of KPIT Cummins Infosystems Limited, the holding 

company to comply with the provisions of Section 212 of the Companies Act, 1956 in India. 








April 24, 2011 Managing Director

Statement pursuant to Section 212 of the Companies Act, 1956 

In2soft GmbH, 

Germany 

CPG Solutions 

LLC , US 

Sparta Infotech 

India Pvt. Ltd., 

Noida 


Inc., USA 

KPIT Infosystems 

France SAS 

(Formerly Pivolis 

SAS) 

Ended on 

March 31, 2011 


Inc (a.k.a. 

Solvcentral 

.com), USA 

Ended on March 

31, 2011 


GmbH, Germany 


Inc., USA 


Limited, UK 

Name of the 

Subsidiary 

Company 

Ended on 

March 31, 2011 

Ended on 

March 31, 2011 

Ended on 

March 31, 2011 

Ended on 

March 31, 2011 

Ended on 

March 31, 2011 

Ended on 

March 31, 2011 

Ended on 

March 31, 2011 

100% 100% (through 


100% 100% 100% (through 


Financial Year of 

the Subsidiary 

Company 

Holding Company’s 

Interest 

74% (through 


GmbH, Germany) 

50,000 shares 

of Euro 1 each 

(held through 


GmbH, Germany) 

100% (through 


Inc.,USA) 

780,000 shares of 

USD 1 each (held 

through KPIT 

Infosystems Inc. 

USA) 

100% (through 


Inc.,USA) 

5,487,890 Equity 

shares of Nominal 

Value ` 10 each 

(held through 


Inc., USA) 

Inc., USA) 

5,105,200 Equity 

shares of Nominal 

Value USD 1 each 

(held through 


Inc., USA) 

100,000 Shares of 

Nominal value of 

Euro 1 each 

100%(through 


Inc.,USA) 

2,550 Share of 

Nominal Value 

USD 1 each (held 


Infosystems Inc, 

USA) 

Ltd.,UK) 

2 Share of Nominal 

Value Euro 20,000 

& Euro 30,000 

respectively (held 


Infosystems Ltd., 

UK) 

10,892 Ordinary 

Stock at par 

5,717,170 

Ordinary shares of 

1/- GBP each 

Number of 

Shares held by 


Infosystems 

Limited in 

the Subsidiary 

Company 

The net aggregate 

of Profi t/(loss) 

for the current 

fi nancial year 

of Subsidiary 

Company, so far 

it concerns to the 

members of the 

Company: 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Dealt with in 

accounts of 

Holding Company 

45 

Profi t : 

EUR 121,427 

Nil 

Profi t : 

USD 1,022,288 

Nil 

Profi t : 

` 111,222,404 

Profi t : 

(PY ` 3,459,625) 

Profi t : 

USD 2,621,107 

Profi t : 

(PY USD 402,150) 

Profi t : 

EUR 20,214 

Profi t : 

(PY EUR 91,790) 

Loss : 

USD 595,845 

Loss: 

(PY USD 13,977) 

Profi t : 

EUR 271,048 

Loss: 

(PY EUR 270,095) 

Loss : 

USD 705,358 

Profi t : 

(PY USD 266,167) 

Loss: 

GBP 240,087 

Loss: 

(PY GBP 87,837) 

Not dealt with in 

the accounts of 


The net aggregate 

of profi t/(loss) 

for the previous 

fi nancial years 

of the Subsidiary 

Company, so far 

it concerns to the 

members of the 

Holding Company: 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Annual Report 2010-2011 

Dealt with in 



Profi t : 

EUR 486,704 

Nil 

Profi t : 

USD 2,429,094 

Nil 

Profi t : 

` 141,211,397 

Profi t : 

` 29,988,995 

Loss : 

USD 2,552,566 

Loss : 

USD 5,173,672 

Profi t: 

EUR 264,939 

Profi t: 

(PY EUR 244,725) 

Profi t: 

USD 203,842 

Profi t: 

(PY 799,687) 

Loss : EUR 

372,232 

Loss: (PY EUR 

643,280) 

Profi t :USD 

500,578 

Profi t :(PY USD 

1,205,936) 

Loss : GBP 

883,210 

Loss : (PY GBP 

643,123) 

Not dealt with in 




S. B. (Ravi) Pandit 

Pune, April 25, 2011 Chairman & Group CEO

Consolidated fi nancial statement of Subsidiaries - 2010-11 

KPIT Cummins Infosystems Limited 

(Amount in ` Million) 

Proposed 

dividend (incl. 

dividend tax) 

Profi t 

after 

taxation 

Provision 

for 

taxation 

Profi t 

before 

taxation 

Sales Other 

Income 

Investment 

(except 

in case of 

investment in 

subsidiaries) 

Total 

liabilities 

[excl. (3) 

& (4)] 

Total 

Assets 

Reserves 

& Surplus 

Share 

Capital 

Name of the Subsidiary % of 

Holding 

Sr. 

No. 

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) 

100% 430.05 (82.68) 716.24 368.87 - 788.33 (20.70) (36.42) - (36.42) - 

1 KPIT Infosystems Limited, 

UK 

2 KPIT Infosystems Inc., USA 100% 1,114.57 (9.86) 1,998.68 893.97 - 3,763.04 (30.57) (14.66) 50.47 (65.13) - 

100% 6.32 16.75 280.97 257.89 - 325.99 0.56 1.17 (0.05) 1.22 - 

3 KPIT Infosystems France 

SAS, (formerly Pivolis SAS.) 

100% 0.12 9.10 7.27 (1.95) - 74.84 0.00 (25.81) 1.36 (27.17) - 

4 KPIT Infosystems Inc.,(a.k.a. 

Solvcentral.com), USA (a) 

100% 154.94 (23.54) 316.27 184.87 - 555.45 (0.15) 16.36 - 16.36 - 

5 KPIT Infosystems GmBH, 

Germany (b) 

100% 227.95 (113.97) 539.56 425.58 - 2,691.40 - 123.14 3.64 119.51 - 

6 Sparta Consulting Inc., 

USA (c) 

46 

100% 54.88 141.21 209.12 13.03 - 304.73 (4.97) 109.23 (2.00) 111.22 - 

7 Sparta Infotech India Pvt. 

Ltd., Noida (f) 

8 CPG Solutions LLC, US (d) 100% 34.83 108.46 200.12 56.84 - 337.21 - 46.61 - 46.61 - 

9 In2soft GmbH, Germany (e) 74% 3.16 30.78 62.64 28.70 - 99.19 0.74 14.15 6.82 7.33 - 

a) 100% owned by KPIT Infosystems Inc., USA 

b) 100% owned by KPIT Infosystems Limited, UK 

c) 100% owned by KPIT Infosystems Inc., USA 

d) 100% owned by KPIT Infosystems Inc., USA 

e) 74% owned by KPIT Infosystems GmbH, Germany 

f) 100% owned by Sparta Consulting Inc., USA

Notes

Notes

REGISTERED OFFICE, 

CORPORATE OFFICE AND SOFTWARE 

DEVELOPMENT CENTRE 

KPIT Cummins Infosystems Ltd. 

Plot No. 35 &36, 

Rajiv Gandhi Infotech Park, 

Phase 1, MIDC, Hinjawadi, 

Pune - 411057, India 

Phone: +91 - 20 - 6652 5000 

Fax: +91 - 20 - 6652 5001 

SOFTWARE DEVELOPMENT CENTRES 

Shailendra Techno Park, 

Plot #116, EPIP Zone, 

1st Stage, Whitefield, 

Bangalore East - 560 066, India 

Phone: +91 - 80 - 6606 6000 

Adarsh Prime Projects Pvt.Ltd., 

No 20 & 21, SEZ, Sarjapura Outer 

Ring Road, (Near Intel Campus), 

Devarabesanahalli, 

Bangalore-560103, India 

Phone: +91 - 80 - 3028 7500 

Fax: +91 - 80 - 3028 7439 

Regus Citi Centre, 

Level 6, Chennai Citi Centre, 

10/11, Dr.Radhakrishnan Salai, 

Chennai - 600 004, India 

Phone: +91 - 44 - 4221 8003 

Fax: +91 - 44 - 4221 8222 

35, Noida Special Economic Zone, 

Phase II, Noida 201305, 

Uttar Pradesh, India 

Phone: +91-120-3073555 

Adams Lehman Strasse, 109, 

80797, Munich, Germany 

Phone: +49 - 89 - 4523 583 18 

Fax: +49 -89 - 4623 583 19 

Crimpage Corporation Building 

Plot No. 57, Street No. 17 MIDC, 

Andheri (East), 

Mumbai – 400093, India 

Phone: +91- 22 66718746 

OVERSEAS OFFICES 

USA 

33, Wood Avenue South, STE 720 

Iselin, NJ 08830, USA 

Phone: +732 - 321 - 0921 

Fax: +732 - 321 – 0922 

a) 1266, Washington Street, 

Columbus, IN 47201, USA 

Phone: +812-379-1811/1816/ 

1308/1319 

Fax: +812-379-1812 

b) 9720 Cypresswood Dr, 

Suite # 420, 

Houston, TX 77070 

Phone: +1 - 281 - 720 0288 

Fax: +1 - 281 - 720 0293 

c) 30100 Telegraph RD, STE 366 

Bingham Farms, MI 48025 

d) 111 Woodmere Road, Suite 200, 

Folsom, California 95630, USA 

Phone: +1 - 916 - 985 0300 

e) 1877, S. Federal Highway, 

Suite 200, Boca Raton, 

FL, 33432, USA 

UK 

Ground Floor, The Annexe Hurst 

Grove, Sandford Lane, Hurst, 

Berkshire RG10 0SQ,United Kingdom 

Phone: +44 - 118 - 934 – 5656 

Sweden 

KPIT Infosystems Limited Filial UK 

c/o Deloitte AB, Box 386, 

20123 MALMO, Sweden 

France 

Tour Egée - La Défense 

17, avenue de l'Arche 

92671 COURBEVOIE CEDEX, France 

Phone: +33 - 1- 4717 8190 

Fax : +33 - 1 - 4667 9925 

Germany 

Mainzer Landstrasse 176 

60327 Frankfurt am Main, Germany 

China 

A04 Room, Longzhu Plaza, 

No. 2117 Pudong Avenue, 

Pudong New District, 

Shanghai, China 

Phone: +86 - 21 - 6169 2019 

Fax: +86 - 21 - 6169 2021 

Japan 

Muromachi CS Bldg. 7F, 

4-6-5, Nihonbashi - Muromachi, 

Chuo-Ku, Tokyo, 103-0022, Japan 

Phone: +81 - 3 - 6913 8501 

Fax: +81 - 3 - 5205 2434 

Singapore 

3, Phillip Street, 

#18-00, Commerce Point, 

Singapore - 048693. 

Phone: +65 - 6532 5746 

Fax: +65 - 6532 7680 

South Africa 

Ground Floor, Block E, 

Business Connexion, 

Park - North Block 789 16th Road, 

Randjesforntein, Midrand 

1683, South Africa 

South Korea 

3-306 Eunma Apt. 

Daechi-dong Gangnam-gu 

Seoul 135-778 South Korea 

SEZ Premises 

KPIT Cummins Infosystems Limited 

SEZ Unit, 3rd Floor, IT – 3, Flagship, 

Rajiv Gandhi Infotech Park, 

MIDC, Phase I, Hinjewadi, 

Pune - 411057, India 

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