Subject: Letter To Professor - Content of Annual Report Infosys 2020-2021 - Notes To Financial Statements

Subject: Letter to professor |Content of Annual Report Infosys 2020-2021| Notes to financial statements -
Property Plant & Equipment.
Respected Sir,
Property, Plant and Equipment
 The topic allotted to me is to analyse the of the notes to financial statements with respect to property
plant and Equipment which is very important metric to analyse the company’s financial position.
 The assets on a company's balance sheet contribute to its total earnings and overall value. Of these,
plant assets often prove to be among the more beneficial, monetarily supported assets.
 The contributions of PPE to a business are many, and understanding how they operate can help keep
track of a company's progress.
 I have made the following observations from the annual report of Infosys which was provided to me.
Property, Plant and Equipment address a huge extent of the resource base of Infosys.
Depreciation
 Depreciation is calculated using the straight-line method. Depreciation techniques, helpful lives and
remaining qualities are investigated occasionally, including at each monetary year end.
 The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s
expected useful life and the expected residual value at the end of its life
 Repairs and maintenance costs are recognized in the Consolidated Statement of Profit and Loss when
incurred. The cost and related accumulated depreciation are eliminated from the financial statements
upon sale or retirement of the asset and the resultant gains or losses are recognized in the
Consolidated Statement of Profit and Loss.
 The helpful lives and lingering upsides of Company's resources are dictated by the administration at
that point. The resource is obtained and looked into intermittently, including at each monetary year
end. The below are the useful life fixed for various non-current assets by Infosys.
Buildings 22-25 years
Plant and machinery 5 years

Office equipment 3-5 years
Computer equipment 5 years

Furniture and fixtures 5 years
Vehicles 5 Years
Leasehold improvements Lower of useful life of the
asset or lease term
Impairment
 Property, plant and gear are assessed for recoverability at whatever point occasions or changes in
conditions demonstrate that their conveying sums may not be recoverable.
 For the purpose of impairment testing, the recoverable amount (i.e., the higher of the fair value less
cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the cash generating unit to which the asset belongs.
Leases
 Ind AS 116 expects renters to decide the lease term as the non-cancellable time of a rent changed
with any alternative to expand or end the rent, if the utilization of such choice is sensibly certain. The
Company makes an appraisal on the normal rent term on a rent by-rent premise and subsequently
evaluates whether it is sensibly sure that any alternatives to broaden or on the other hand end the
agreement will be worked out.
 In assessing the rent term, the Company considers factors, for example, any huge leasehold upgrades
attempted over the rent term, costs identifying with the end of the rent and the significance of the
fundamental resource for Infosys' tasks considering the area of the basic resource and the
accessibility of appropriate other options.
 The rent term in ongoing periods is revaluated to guarantee that the rent term mirrors the current
financial conditions. Subsequent to considering current and future financial conditions, the
organization has inferred that no material changes are needed to rent period identifying with the
current rent contracts.
Credit loses
 Infosys determines the allowance for credit losses based on historical loss experience adjusted to
reflect current and estimated future economic conditions.
 The Company considered current and anticipated future economic conditions relating to industries
the Company deals with and the countries where it operates. In calculating expected credit loss, the
Company has also considered credit reports and other related credit information for its customers to
estimate the probability of default in future and has taken into account estimates of possible effect
from the pandemic relating to COVID-19.
Inference and comments
 It can be seen from the notes to financial statements- property, plants, and equipment of Infosys that
the carrying value of PP&E in the year end March 2021 is Rs 12560 crores whereas in the year end
March 2020 was Rs. 12435 there’s a difference of around Rs. 125 crores various additions for
scalability have been taken and deletions of assets that are not used or impaired.
 As the company buys more PP&E, the value of its Net PP&E will increase, and as time passes, the
value will decrease according to depreciation expenses. Since there is increase in the carrying value of
PP&E it is a positive indicator for the future growth and scalability of the Infosys business .
Regards
Vidya V
21119- [email protected]
9448043073

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Subject: Letter to professor |Content of Annual Report Infosys 2020-2021| Notes to financial statements -

Property Plant & Equipment.

Property, Plant and Equipment

Buildings 22-25 years

Plant and machinery 5 years

Computer equipment 5 years

Inference and comments

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