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Directors Report of Infosys Ltd.

Mar 31, 2017

Dear members.

The Board of Directors hereby submits the report of the business and operations of your Company (‘the Company’ or ‘Infosys’), along with the audited financial statements, for the financial year ended March 31, 2017. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Results of our operations

in Rs. crore, except per equity share data

Particulars

Standalone

Consolidated

2017

2016

2017

2016

Revenue from operations

59,289

53,983

68,484

62,441

Cost of sales

37,057

33,409

43,253

39,098

Gross profit

22,232

20,574

25,231

23,343

Operating expenses

Selling and marketing expenses

2,728

2,695

3,591

3,431

General and administration expenses

3,628

3,285

4,739

4,292

Total operating expenses

6,356

5,980

8,330

7,723

Operating profit

15,876

14,594

16,901

15,620

Other income, net

3,062

3,006

3,080

3,123

Profit before non-controlling interests /

share in net loss of associate

18,938

17,600

19,981

18,743

Share in net loss of associate and others

-

-

(30)

(3)

Profit before tax

18,938

17,600

19,951

18,740

Tax expense

5,120

4,907

5,598

5,251

Profit after tax

13,818

12,693

14,353

13,489

Non-controlling interests

-

-

-

-

Profit for the period

13,818

12,693

14,353

13,489

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

(47)

(2)

(50)

(12)

Items that will be reclassified subsequently to profit or loss

29

-

(228)

303

Total other comprehensive income, net of tax

(18)

(2)

(278)

291

Total comprehensive income

13,800

12,691

14,075

13,780

Retained earnings - opening balance

44,698

40,065

47,063

41,606

Add:

Profit for the period

13,818

12,693

14,353

13,489

Transfer from Special Economic Zone Re-investment Reserve

on utilization (1)

953

591

953

591

Less:

Dividends including dividend tax

(6,980)

(6,843)

(6,952)

(6,814)

Transfer to general reserve

(1,579)

(1,217)

(1,582)

(1,217)

Transfer to other reserve (2)

-

-

-

(1)

Transfer to Special Economic Zone Re-investment Reserve (1)

(953)

(591)

(953)

(591)

Retained earnings - closing balance

49,957

44,698

52,882

47,063

Earnings per share (EPS) (3)

Basic

60.16

55.26

62.80

59.02

Diluted

60.15

55.26

62.77

59.02

Notes : The above figures are extracted from the standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS). For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101, First-Time Adoption of Indian Accounting Standards, with April 1, 2015 as the transition date and IGAAP as the previous GAAP.

1 crore = 10 million

(1) The Special Economic Zone (SEZ) Re-investment Reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii) of the Income-tax Act,1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of Section 10AA(2) of the Income-tax Act, 1961.

(2) Under the Swiss Code of Obligation, a few Infosys Consulting Holding AG (formerly Lodestone Holding AG) subsidiaries are required to appropriate a certain percentage of the annual profit to legal reserve, which may be used only to cover the losses or for measures designed to sustain the Company through difficult times, to prevent unemployment or to mitigate its consequences.

(3) Equity shares are at par value of Rs.5 per share.

Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For the Infosys group, Ind AS is applicable from April 1, 2016, with a transition date of April 1, 2015 and IGAAP as the previous GAAP.

The following are the areas which had an impact on account of transition to Ind AS :

- Business combinations including recording of intangibles and deferred taxes and accounting for common control transactions

- Fair valuation of certain financial instruments

- Employee costs pertaining to defined benefit obligations

- Discounting of certain long-term liabilities

- Share-based payments

The reconciliations and descriptions of the effect of the transition from IGAAP to Ind AS have been provided in Note 2.2 in the notes to accounts in the standalone and consolidated financial statements.

Revenues - standalone

Our revenue from operations on a standalone basis increased to Rs.59,289 crore from Rs.53,983 crore in the previous year, at a growth rate of 9.8%. Our software export revenues aggregated to Rs.57,491 crore, up by 9.1% from Rs.52,709 crore in the previous year. Out of the total revenue, 65.1% came from North America, 22.0% from Europe, 3.0% from India and 9.9% from the Rest of the World. On a standalone basis, our share of revenues from all parts of the world outside North America has increased to 34.9% in the current year from 34.0% in the previous year.

Revenues - consolidated

Our revenue from operations on a consolidated basis increased to Rs.68,484 crore from Rs.62,441 crore in the previous year, at a growth rate of 9.7%. Our software export revenues aggregated to Rs.66,304 crore, up by 9.0% from Rs.60,818 crore in the previous year. Out of the total revenue, 61.9% came from North America, 22.5% from Europe, 3.2% from India, and 12.4% from the Rest of the World. On a consolidated basis, our share of revenues from all parts of the world outside North America increased to 38.1% in the current year from 37.3% in the previous year.

Profits - standalone

Our gross profit on a standalone basis amounted to Rs.22,232 crore (37.5% of revenue), as against Rs.20,574 crore (38.1% of revenue) in the previous year. Sales and marketing costs were 4.6% of our revenue for the year ended March 31, 2017, as compared to 5.0% for the year ended March 31, 2016. General and administration expenses were 6.1% of our revenues each during the current and previous years. The operating profit amounted to Rs.15,876 crore (26.8% of revenue), as against Rs.14,594 crore (27.0% of revenue), in the previous year. The profit before tax was Rs.18,938 crore (31.9% of revenue), as against Rs.17,600 crore (32.6% of revenue) in the previous year. Net profit was Rs.13,818 crore (23.3% of revenue), as against Rs.12,693 crore (23.5% of revenue) in the previous year.

Profits - consolidated

Our gross profit on a consolidated basis amounted to Rs.25,231 crore (36.8% of revenue), as against Rs.23,343 crore (37.4% of revenue) in the previous year. Sales and marketing costs were 5.2% of our revenue for the year ended March 31, 2017, as compared to 5.5% for the year ended March 31, 2016. General and administration expenses were 6.9% of our revenues each during the current and previous years. The operating profit amounted to Rs.16,901 crore (24.7% of revenue), as against Rs.15,620 crore (25.0% of revenue) in the previous year. The profit before tax was Rs.19,951 crore (29.1% of revenue), as against Rs.18,740 crore (30.0% of revenue) in the previous year. Net profit was Rs.14,353 crore (21.0% of revenue), as against Rs.13,489 crore (21.6% of revenue) in the previous year.

Capital expenditure on tangible assets -standalone

This year, on a standalone basis, we capitalized Rs.1,817 crore. This comprises Rs.654 crore for investment in computer equipment, Rs.6 crore in vehicles, and the balance of Rs.1,157 crore in infrastructure.

In the previous year, we capitalized ‘2,163 crore. This comprised Rs.945 crore for investment in computer equipment, Rs.5 crore in vehicles, and the balance of Rs.1,213 crore in infrastructure.

Capital expenditure on tangible assets -consolidated

On a consolidated basis, we capitalized Rs.2,799 crore. During the current year, Rs.800 crore has been invested in computer equipment, Rs.8 crore in vehicles, and the balance of Rs.1,991 crore in infrastructure.

In the previous year, we capitalized Rs.2,379 crore, including assets having gross book value of Rs.4 crore taken over on acquisitions. This comprised Rs.1,105 crore for investment in computer equipment, Rs.6 crore in vehicles, and the balance of Rs.1,268 crore in infrastructure.

Liquidity

We continue to be debt-free and maintain sufficient cash to meet our strategic and operational requirements. We understand that liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity enables us to be agile and ready for meeting unforeseen business needs. We believe that our working capital is sufficient to meet our current requirements. As on March 31, 2017, on a standalone basis, we had liquid assets (includes cash and cash equivalents and investments other than investments in unquoted equity and preference securities, convertible promissory note and others) of Rs.34,561 crore, as against Rs.30,711 crore at the previous year end. On a consolidated basis, we had liquid assets of Rs.38,773 crore at the current year end, as against Rs.34,371 crore at the previous year-end. These funds comprise deposits with banks and highly-rated financial institutions, liquid mutual funds, including investment in fixed maturity plan securities, tax-free bonds, government bonds, non-convertible debentures of highly-rated companies and certificates of deposit (CDs). CDs represent marketable securities of banks and eligible financial institutions for a specified time period with high credit rating given by domestic credit rating agencies. The details of these investments are disclosed under the ‘non-current and current investments’ section in the standalone and consolidated financial statements in this Annual Report.

Appropriations Dividend

The Board, in its meeting held on October 14, 2016, declared an interim dividend of Rs.11.00 per equity share. Further, the Board, in its meeting held on April 13, 2017, has recommended a final dividend of Rs.14.75 per equity share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting (AGM) to be held on June 24, 2017. The total dividend declared (excluding dividend tax) for the current year is Rs.5,915 crore, as against Rs.5,570 crore in the previous year. Dividend (including dividend tax), as a percentage of consolidated net profit after tax, is 49.6% as compared to 49.7% in the previous year.

The Register of Members and Share Transfer Books will remain closed on June 3, 2017 for the purpose of payment of the final dividend for the financial year ended March 31, 2017, and the AGM. The AGM is scheduled to be held on June 24, 2017.

Bonus shares

During the current year, there has been no change in the capital structure. During the previous year, the Company had allotted 1,14,84,72,332 fully-paid-up equity shares of face value Rs.5 each to the shareholders of the Company in proportion of 1:1 and consequently, the number of shares increased from 1,14,84,72,332 to 2,29,69,44,664.

Particulars of loans, guarantees or investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

Transfer to reserves

We propose to transfer Rs.1,382 crore to the general reserve on account of declaration of dividend at both standalone and consolidated levels.

Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Particulars of contracts or arrangements made with related parties

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 2 to the Board’s report.

Material changes and commitments affecting financial position between the end of the financial year and date of the report

- The Board, at its meeting held on April 13, 2017, approved the following policies :

Capital Allocation Policy : The Board reviewed and approved the Capital Allocation Policy of the Company after taking into consideration the strategic and operational cash requirements of the Company in the medium term. The key aspects of the Capital Allocation Policy are : The Company’s current policy is to pay dividends of up to 50% of the post-tax profits of the fiscal. Effective fiscal 2018, the Company expects to pay out up to 70% of the free cash flow of the corresponding fiscal in such manner (including by way of dividend and / or share buyback) as may be decided by the Board from time to time, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend payout includes dividend distribution tax.

In addition to the above, the Board has also identified an amount of up to Rs.13,000 crore (US $2 billion, converted with exchange rate as on March 31, 2017) to be paid out to shareholders during fiscal 2018, in such manner (including by way of dividend and / or share buyback), to be decided by the Board, subject to applicable laws and requisite approvals, if any.

Dividend Distribution Policy : As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (‘the Listing Regulations’), the top 500 listed companies shall formulate a dividend distribution policy Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and / or retaining profits earned by the Company The policy is enclosed as Annexure 9 to the Board’s report and is also available on the Company’s website, at https://www.infosys.com/investors/corporate-governance/Documents/dividend-distribution.pdf.

Details of the other policies approved by the Board during fiscal 2017 are provided in Annexure 10 to the Board’s report.

- The Board / nomination and remuneration committee (‘the committee’) approved the following :

CEO compensation : Following the shareholders’ approval of the CEO’s compensation through a postal ballot on March 31, 2016, and based on fiscal 2017 performance, the Board, in its meeting held on April 13, 2017, granted performance-based equity and stock options for fiscal 2017 to the CEO. Additionally, the Board approved annual time-based vesting grant for fiscal 2018. The grants would be made w.e.f. May 2, 2017. The Board also approved the variable pay for the year ended March 31, 2017.

COO compensation : Following the shareholders’ approval of the COO’s compensation through a postal ballot on March 31, 2017, the Board granted RSUs and ESOPs to the COO in its meeting held on April 13, 2017. The RSUs and ESOPs will be granted w.e.f. May 2, 2017.

The details of RSUs and ESOPs granted are provided as part of the notes to the standalone and consolidated financial statements.

Management’s discussion and analysis

In terms of the provisions of Regulation 34 of the Listing Regulations, the Management’s discussion and analysis is set out in this Annual Report.

2. Business Strategy

Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while generating profitable growth for our investors. In order to do this, we will apply the priorities of ‘renew’ and ‘new’ to our own business and cascade it to everything we do.

These translate to the following strategic focus areas :

Build expansive, lasting relationships with our clients by delivering differentiated offerings : Our strategy is to engage with clients on their large transformative programs, both in traditional IT areas as well as for their new digital business initiatives. We expand existing client relationships by providing them a broad set of end-to-end service offerings and increase the size, nature and number of projects we do with them. Our specific industry, domain, process, and technology expertise allow us to enable clients to transform their businesses with innovative strategies and solutions.

We invest in building our own and acquiring proprietary software platforms targeted at addressing the strategic imperatives of our clients in various industries. The combination of our intellectual property and the services surrounding it generates unique value propositions for our clients.

Through our Zero Distance program, we help our clients innovate and derive more value from their projects. Zero Distance is the process of everyday innovation at Infosys whereby all employees are expected to innovate in their individual capacities and through their individual jobs. Zero Distance has a three-fold emphasis : to reduce the gap between us and the code we write, between us and our clients, and between us and the end-user.

We also invest in targeted business development and marketing to acquire new clients, and increase our presence in new geographies and market segments. We position our brand as differentiated, global and respected.

Deliver solutions and services leveraging highly cost-effective models: Our strategy is to leverage software-based automation and our Global Delivery Model to deliver solutions and services to our clients in the most cost-effective manner, while at the same time optimizing our cost structure to remain competitive.

We are embracing artificial intelligence-based automation techniques and software automation platforms to boost productivity of our projects. We are also taking advantage of the new advances in software process engineering and collaboration technologies to enhance our productivity.

Our Global Delivery Model provides scale, quality, expertise, cost, and time-to-market advantages to our client projects.

The model enables us to work at the location where the best talent is available and where it makes the best economic sense with the least amount of risk. Over the last 30 years, we have developed our distributed execution capabilities to deliver high-quality and scalable services. This scalable infrastructure complements our ability to deliver project components that are executed round the clock and across time zones enabling us to optimize and reduce project delivery times.

Enhance our operational processes for agility and optimal cost: We periodically assess the effectiveness of our organization structure and processes to optimize them for alignment with our strategic objectives and agility. We continually evaluate critical cross-functional processes and benchmark them with best-in-class practices to optimize costs and enable swift and effective response to our clients. We constantly monitor and optimize various operational parameters such as the cost and utilization of resources, distribution of employees around the world, the cost of operating our campuses and the optimal realization of the efficiencies of scale.

In fiscal 2017, our Zero Bench program ensured sustained engagement of employees in internal projects throughout the year. Zero Bench is helping us fast-track our service line strategy on automation and innovation.

Attract and retain a global, diverse, motivated and high-performing employee base : Our employees are our biggest assets. To meet the evolving need of our clients, our priority is to attract and engage the best talent in the right locations with the right skills. We offer our employees challenging work assignments, benchmarked compensation, and a collaborative, productive work environment. We have an objective performance management system that rewards high performers. We invest substantially in employee engagement to motivate employees and encourage social communication and collaboration.

Teaching and learning are central to the Infosys culture. Our investments in our Global Education Center and in creating various learning opportunities for our employees help them stay abreast of new developments in software technologies, spur innovation and help them build a lifelong career at Infosys.

We are guided by our value system which motivates our attitudes and actions. Our core values are Client Value, Leadership by Example, Integrity and Transparency, Fairness and Excellence (C-LIFE).

Pursue strategic alliances and acquisitions : We leverage alliances that complement our core competencies. We partner with leading technology software and hardware providers in creating, deploying, integrating and operating business solutions for our clients. We have also expanded the scope of our collaborations to encompass universities and research organizations.

We will deploy our capital in making selective business acquisitions that augment our expertise, complement our presence in certain market segments and accelerate the execution of our strategies.

We have an innovation fund with an outlay of US $500 million to support the creation of a global ecosystem of strategic partners.

Organization

Our go-to-market business units are organized as :

- Financial Services

- Manufacturing

- Retail, CPG and Logistics

- Energy & utilities, Communications and Services

- Hi-Tech

- Life Sciences, Healthcare and Insurance

- China

- Japan

- India

- Infosys Public Services

Our service delivery is organized as horizontal centers of excellence :

- Infosys Consulting

- Global Delivery

- Enterprise Solutions

- Infosys Digital

- Application Development Services

- Application Management Services

- Application Modernization Services

- Independent Validation Solutions

- Data and Analytics

- Engineering Services

- Cloud and Infrastructure Services

- Infosys Center for Emerging Technology Solutions

- Products

- Finacle®

- EdgeVerve

- Platforms

- Panaya

- Skava

- Infosys BPO

Client base

Our client-centric approach continues to bring us high levels of client satisfaction. We derived 97.3% of our consolidated revenues from repeat business this fiscal. We received the highest satisfaction score from our customer survey for the year as compared to any score that we had received in the past 12 years. We, along with our subsidiaries, added 321 new clients, including a substantial number of large global corporations. Our total client base at the end of the year stood at 1,162. The number of 100 million dollar clients increased from 14 last year to 19 during the year. The client segmentation, based on the last 12 months’ revenue for the current and previous years, on a consolidated basis is as follows :

Clients

2017

2016

1 million dollar

598

558

5 million dollar

282

268

10 million dollar

189

177

25 million dollar

91

88

50 million dollar

56

52

75 million dollar

31

31

100 million dollar

19

14

200 million dollar

6

6

300 million dollar

1

1

Infrastructure

We added 2.2 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2017 stands at 44.5 million sq. ft. The number of marketing offices as on March 31, 2017 is 84, compared to 85 in the previous year.

Infosys Innovation Fund

We have a multi-pronged strategy in identifying, investing in and promoting next-generation technologies. We believe we will achieve this on the basis of organic investments in R&D, as well as by making significant investments in innovations developed externally, especially by startups. Our investment and acquisition strategy will be key to ensuring that we remain competitive and at the forefront of innovation.

The Infosys Innovation Fund identifies early-stage startups developing innovative, next-generation solutions and technologies in the areas of AI, machine learning and automation, Big Data and analytics, physical-digital convergence, infrastructure and cloud, and education and learning.

The Fund partners with startups by providing early-stage capital and by helping bring their innovations to market, attaining scale, providing mentorship, product validation and customer introductions. The portfolio consists of 13 companies. Out of the total outlay, US $45 million has been invested as of March 31, 2017 and we have an uncalled capital commitment of US $18 million.

Subsidiaries and associates

We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation services. At the beginning of the year, we had 16 direct subsidiaries, 30 step-down subsidiaries and one associate. As on March 31, 2017, we have 17 direct subsidiaries, 26 step-down subsidiaries and one associate.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared the consolidated financial statements of the Company, which form part of this Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 1 to the Board’s Report. The statement also provides the details of performance and financial position of each of the subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website, www.infosys.com. These documents will also be available for inspection till the date of the AGM during business hours at our registered office in Bengaluru, India.

Quality

While sustaining existing external benchmarks and certifications, our Quality practice at Infosys has added new certifications and further enhanced our programs and initiatives to renew our commitment to the culture of quality, client value, innovation and productivity improvement.

We continue to follow international quality standard certifications such as ISO 9001, ISO 22301, ISO 20000, ISO 27001, AS EN 9100, ISO 13485, OHSAS 18001 and ISO 14001. We have migrated to ISO 9001:2015 in the last year and became one of the early adopters of this new version. We have received an independent auditors’ assurance report on compliance to ISAE 3402 / SSAE16 and a certification of compliance on PCIDSS V 3.0 for Infosys BPO Limited. Our focus towards upholding the maturity on CMMi Level 5 continued through independent internal assessments and we have added Infosys public services to the CMMi scope.

Our Quality department handles large change management initiatives to drive quality and productivity improvements across the Company, using various techniques such as Six Sigma, Lean methodology, and engineering levers like Reuse, Automation and Tools.

Branding

The Infosys brand is a key intangible asset of the Company It positions Infosys as the next-generation services company that helps enterprises renew themselves while also creating new avenues to generate value. Brand Infosys is nurtured around the premise that software, in a very fundamental way, is reshaping the world around us. Because of this, there is a duality that every business faces - on the one hand, the need to renew existing systems, to improve their effectiveness with new technologies and innovation, and on the other, the need to deliver new kinds of services and new solutions in new ways using next-generation technologies. Infosys helps its clients achieve this dual agenda in a culture of learning and innovation at the grassroots level by implementing Zero Distance - our approach to operating at the intersection of desirability, feasibility and viability.

Our marketing reach extends globally through advertisements, public relations and digital marketing initiatives. We participate in premier business and industry events around the world. We also organize signature events and roundtables across geographies. ‘Confluence’, our flagship client event, is consistently well-attended and rated highly by our clients and industry partners.

Awards and recognition

In fiscal 2017, we won multiple awards and recognition, both international and national. The significant awards include :

Business and management

- Best Company in India, at Finance Asia’s 20th anniversary platinum awards

- National Award for Excellence in Corporate Governance, 16th National Awards of the Institute of Company Secretaries of India

- Golden Peacock Award, 16th London Global Convention on Corporate Governance and Sustainability

Banking (for Finacle®)

- Market Leader among digital platforms, Ovum Decision Matrix: Selecting a Digital Banking Platform, 2017—18 report by Ovum Research

- Leader and Star Performer, Everest Groups Global Banking AO Service Provider PEAK Matrix™ Assessment, 2016

ERP services

- Seven awards at the 2016 Oracle Excellence Awards

- Leader in Gartner Magic Quadrant for SAP® Application Services, North America

- Leader, IDC Market Scape : Worldwide Oracle Implementation Services 2016 Vendor Assessment

Technology innovation

- Five marketing and innovation awards following the launch of a successful strategic technology partnership with Association of Tennis Professionals (ATP)

- Leader in the Winners Circle - Excellent at Innovation and Execution, HfSs Research Blueprint : Design Thinking in the As-A-service Economy

Sustainability

- Smartest Building award for the software development blocks (SDB) at the Pune campus, Network 18 and Honeywell Smart Building Awards

- Global Sustainability Leadership Award for sustainable carbon management practice

For the complete list of awards and recognition, refer to https://www. infosys.com/about/awards.

3. Human resources management

The Human Resources (HR) department at Infosys is driven by the mission :

- To help Infoscions realize their potential - to develop, grow and achieve their purpose

- To build the right culture and capabilities to enable us to delight our customers

- To make Infosys the best place to work for passionate, innovative people who want to make a difference

HR management at Infosys goes beyond the set boundaries of compensation, performance reviews and development. We look at the employee’s entire work life cycle, to ensure timely interventions that help build a long-lasting and fruitful career. With this in mind, we initiated several positive changes in our HR practice this year. The vision for HR is articulated through five strategic tracks :

- Driving entrepreneurial energy

- Facilitating organization effectiveness

- Building our talent engine

- Sharpening our leadership edge

- Providing a world-class employee experience

We have set up a scalable recruitment and human resources management process. Over the last year, on a standalone basis, we received 12,93,877 applications from prospective employees, interviewed 1,05,674 applicants, and extended offers of employment to 51,004 applicants. The Infosys Group added 6,320 (net) and 44,235 (gross) employees this year, taking the total strength to 2,00,364 from 1,94,044 at the end of the previous year.

On a standalone basis, the annualized attrition rate for fiscal 2017 stands at 15.0%, as compared to 13.6% for fiscal 2016.

The following is an overview of some of the major programs undertaken during fiscal 2017 :

- Pulse is our renewed approach to reviewing employee engagement, with the key change being moving from an annual format to a more continuous and customized survey format for feedback. We also ensure clear ownership and real-time analytics dashboards to take swift action, based on the feedback received.

- We identified influencer groups within the organization, whose networks could be leveraged to spread ideas of innovation and collaboration. We worked on refreshing this list to include more people and keep it dynamic.

- We continued to work on simplifying internal processes through a collaborative effort between various teams to ensure that employees are able to be at their productive best. Rewards and recognition in terms of the annual awards for excellence, quarterly promotions, and unit awards continued. We also maintained our focus on performance differentiation to ensure that our high-performing employees are driven towards higher purpose and goals.

- The Stock Incentive Rewards Program for employees was launched this year, bringing back a much-cherished program after over a decade. Through this program, select high-performing employees were awarded company stocks based on their potential.

In addition to the above, we have mechanisms in place to foster a positive workplace environment, free from harassment of any nature. We have institutionalized the Anti-Sexual Harassment Initiative (ASHI) framework, through which we address complaints of sexual harassment at the workplace. Our global policy assures discretion and guarantees non-retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land wherever we operate. We have also constituted an internal committee in all locations across India to consider and address sexual harassment complaints in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The details of the issues raised and resolved regarding sexual harassment at the workplace are available in the Business Responsibility Report which is part of this Annual Report.

Education, training and assessment

Learning and education are at the foundation of Infosys. Competency development continues to be a key area of strategic focus for us. During fiscal 2017, the total training provided for employees was over 2.04 million person days. Many of our employees also took external certifications, creating a large pool of certified people.

We are working with external Massive Open Online Course (MOOC) providers to make the best content, along with flexible learning modalities, available to our employees, to enhance learning effectiveness and reach. We provide opportunities for fresh hires to learn using MOOCs while waiting to join Infosys. We are also using MOOCs to enable existing employees on niche technologies and skills.

To enhance the innovation quotient of the workforce, we conducted the Design Thinking program which trains individuals in an empathetic, customer-centric mode of problem-finding and problem-solving. The total number of participants benefiting from Design Thinking training crossed 1,35,000 as of March 31, 2017. The Design Thinking training has been imparted to client teams, leadership teams, employees and fresh recruits.

Campus Connect, our industry-academia partnership program, made progress through the launch of electives to help engineering colleges run new programs within their curricula. In fiscal 2017, we engaged with 1,056 faculty members who in turn trained 44,546 students. With this, the total number of beneficiaries covered has reached 14,167 faculty members and 4,16,185 students from 301 engineering institutions.

Infosys Leadership Institute

The vision of the Infosys Leadership Institute (ILI) is to be recognized as a world-class leadership development organization that develops a deep leadership bench for Infosys. The primary purpose of ILI is to develop and prepare senior leaders of the organization for current and future executive leadership roles. ILI employs a wide range of developmental approaches including experiential programs, classroom training, coaching, ‘Leaders Teach’, and experience-sharing sessions. Senior leaders from across Infosys and its subsidiaries are beneficiaries of ILI’s programs. We are partnering with Stanford Graduate School of Business to curate the Infosys Global Leadership Program for our existing and future leaders at Infosys. The Global Leadership Program, developed and offered by Stanford, is expected to cover over 100 Infosys leaders organized into cohorts. Each cohort is divided into small teams and are assigned key strategic projects that provide exposure to broader business management challenges, and to the senior leadership of the Company. The five-day program features sessions taught by Stanford faculty covering topics such as corporate strategy and leadership and team management, as well as critical skills such as negotiation and storytelling, and action learning via project work. Cohort 1 graduated in 2016 in our Mysuru campus, and Cohort 2 in April 2017 at our Bengaluru campus.

Particulars of employees

The ratio of the remuneration of each whole-time director and key managerial personnel (KMP) to the median of employees’ remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Board’s report (Annexure 3). Refer to tables 3(b) and 3(c) in Annexure 3.

Additionally, the following details form part of Annexure 3 to the Board’s report :

- To ensure better comparability and clarity, the Company has voluntarily provided details of compensation (including value of stock incentives granted) for fiscals 2017 and fiscal 2016 (Refer to table 3(a))

- Remuneration to independent directors (Refer to table 3(d))

- Statement containing the names of top 10 employees in terms of remuneration drawn (Refer to table 3(e))

- Details of employees posted in India throughout the fiscal and in receipt of a remuneration of Rs.1.02 crore or more per annum (Refer to table 3(e))

- Details of employees posted in India for part of the year and in receipt of Rs.8.5 lakh or more a month (Refer to table 3(e)).

The details of employees posted outside India and in receipt of a remuneration of Rs.1.02 crore or more per annum or Rs.8.5 lakh or more a month can be made available on request.

Employee stock options / Restricted stock units

The Company, under the 2015 Stock Incentive Compensation Plan (‘the 2015 Plan’), approved by the shareholders vide postal ballot concluded on March 31, 2016, grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performance with Company objectives, and promoting increased participation by them in the growth of the Company.

The total number of equity shares and ADRs to be allotted pursuant to the exercise of the stock incentives under the 2015 Plan to the employees of the Company and its subsidiaries shall not cumulatively exceed 2,40,38,883 equity shares (approximately 1% of the issued capital). The details of the 2015 Plan, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share-based Employee Benefits) Regulations, 2014 is available on the Company’s website, at https://www.infosys. com/investors/corporate-governance/Documents/disclosures-pursuant-SEBI-regulations.pdf.

The details of the employee stock options / RSU plan form part of the Notes to accounts of the financial statements in this Annual Report.

The details of stock incentives granted during the year ended March 31, 2017 (1) are as follows :

Approval date

Grantees

Date of grant

Stock incentives approved by the Board / nomination and remuneration committee

RSUs

Stock options

Dr. Vishal Sikka

1,20,700

-

July 15, 2016

7,898 eligible mid-level

August 1, 2016

managers (5)

18,57,820

-

Mohit Joshi

52,350

1,12,750

Rajesh K. Murthy

45,000

96,900

Ravi Kumar S.

52,350

1,12,750

Sandeep Dadlani

52,350

1,12,750

M. D. Ranganath

30,650

48,400

October 14, 2016

A. G. S. Manikantha

November 1, 2016

1,000

-

Krishnamurthy Shankar

12,050

19,000

Gopi Krishnan Radhakrishnan (4)

1,500

425 eligible high-performing executives (5)

9,04,775

9,43,810

January 13, 2017

3 eligible employees (5)

February 1, 2017

18,550

-

Dr. Vishal Sikka

amounting to (2) US $1.9 million and

amounting to

April 13, 2017 (1)

May 2, 2017

(3) US $2 million

(2) US $0.96 million

U. B. Pravin Rao

27,250

43,000

3 eligible employees (5)

37,100

73,600

Notes :The RSUs and stock options would vest over a period of four years and shall be exercisable within the period as approved by the Board / nomination and remuneration committee from time to time. The exercise price of RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant or the price as determined under the applicable law in respective jurisdictions.

(1) Includes stock incentives granted between the end of the financial year and date of the report

(2) Pertains to performance-based grants for fiscal 2017

(3) Pertains to time-based grants for fiscal 2018

(4) In November 2016, 1,500 RSUs were granted to Gopi Krishnan Radhakrishnan who was appointed as KMP w.e.f. January 1, 2017

(5) Approved count

Grants exercised during the year: During fiscal 2017, Dr. Vishal Sikka exercised 34,062 RSUs and held 3,08,143 RSUs outstanding as on March 31, 2017.

4. Corporate governance

Our corporate governance philosophy

Corporate governance is about maximizing shareholder value legally, ethically and sustainably At Infosys, the goal of corporate governance is to ensure fairness for every stakeholder. We believe sound corporate governance is critical to enhancing and retaining investor trust. We always seek to ensure that our performance is driven by integrity Our Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

Our Corporate governance report for fiscal 2017 forms part of this Annual Report.

Board diversity

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/board-diversity-policy.pdf.

Additional details on Board diversity is available in the Corporate governance report that forms part of this Annual Report.

Number of meetings of the Board

The Board met eight times during the financial year. The meeting details are provided in the Corporate governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.

Policy on directors’ appointment and remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2017, the Board had 10 members, two of whom were executive or whole-time directors, and eight were independent directors.

The policy of the Company on directors’ appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, at https://www.infosys.com/investors/corporate-governance/documents/nomination-remuneration-policy.pdf. There has been no change in the policy since last fiscal. We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

Declaration by independent directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

Board evaluation

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate governance report. The outcome of the Board evaluation for fiscal 2017 was discussed by the nomination and remuneration committee and the Board at the meeting held on April 13, 2017.

Familiarization program for independent directors

All new independent directors inducted into the Board attend an orientation program. The details of the training and familiarization program are provided in the Corporate governance report. Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The format of the letter of appointment is available on our website, at https://www.infosys.com/investors/ corporate-governance/Documents/appointment-independent-director.pdf.

Directors and key managerial personnel Chairmen of the Board

R. Seshasayee is the non-executive Chairman of the Board and Ravi Venkatesan, Independent Director, was appointed Co-Chairman of the Board at the meeting held on April 13, 2017.

Inductions

The following appointments were made till the date of the report :

- Appointment of Ravi Venkatesan, Independent Director, as the Co-Chairman of the Board effective April 13, 2017.

- Appointment of D. N. Prahlad as an independent director of the Board effective October 14, 2016.

- Appointment of Mohit Joshi, Sandeep Dadlani, Rajesh K. Murthy, Ravi Kumar S., David D. Kennedy and Krishnamurthy Shankar as key managerial personnel (KMP), as defined under Ind AS 24, Related Party Disclosures, effective October 13, 2016.

- Appointment of Gopi Krishnan Radhakrishnan as Acting General Counsel and as KMP, as defined under Ind AS 24, Related Party Disclosures, effective January 1, 2017.

Dr. Vishal Sikka, U. B. Pravin Rao, M. D. Ranganath and A. G. S. Manikantha were appointed as KMP, as defined under Section 2(51) of the Companies Act, 2013, in earlier years.

Reappointments

As per the provisions of the Companies Act, 2013, U. B. Pravin Rao retires by rotation at the ensuing AGM and being eligible, seeks reappointment. The Board recommends his reappointment.

Retirements and resignations

David D. Kennedy ceased to be the General Counsel and Chief Compliance Officer effective December 31, 2016.

Committees of the Board

As on March 31, 2017, the Board had six committees : the audit committee, the nomination and remuneration committee, the corporate social responsibility committee, the stakeholders relationship committee, the risk and strategy committee, and the finance and investment committee. The Board constituted a new committee, the committee of directors, effective April 13, 2017. All committees, except the corporate social responsibility committee, consist entirely of independent directors. A detailed note on the composition of the Board and its committees is provided in the Corporate governance report section of this Annual Report.

Adoption of new Articles of Association

The Ministry of Corporate Affairs (MCA) notified most of the sections of the Companies Act, 2013 (‘the Act’) which replace the provisions of the Companies Act, 1956. The MCA also notified the rules pertaining to the further notified sections. In order to bring the Articles of Association (AOA) of the Company in line with the provisions of the Act, the Company recommended that the members adopt a comprehensive new set of the Articles of Association of the Company (‘new articles’), in substitution of, and to the exclusion of, the AOA. The resolution to adopt the new articles was passed by requisite majority by the members of the Company through a postal ballot which concluded on March 31, 2017. The new articles are available on the website of the Company, at https://www.infosys.com/investors/shareholder-services/pages/index.aspx#memorandum.

Internal financial control and its adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

Extract of annual return

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 6 to the Board’s report.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules’), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends. Further, the corresponding shares will be transferred as per the requirements of the IEPF rules, details of which are provided on our website, at www.infosys.com/IEPE

Directors’ responsibility statement

The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with applicable transition guidance. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The directors confirm that :

- In preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed.

- They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period.

- They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- They have prepared the annual accounts on a going concern basis.

- They have laid down internal financial controls, which are adequate and are operating effectively.

- They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

5. Audit reports and auditors Audit reports

- The Auditors’ Report for fiscal 2017 does not contain any qualification, reservation or adverse remark. The Auditors’ Report is enclosed with the financial statements in this Annual Report.

- The Secretarial Auditors’ Report for fiscal 2017 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors’ Report is enclosed as Annexure 5 to the Board’s report in this Annual Report.

- As required by the Listing Regulations, the auditors’ certificate on corporate governance is enclosed as Annexure 4 to the Board’s report. The auditors’ certificate for fiscal 2017 does not contain any qualification, reservation or adverse remark.

- In addition to getting certified by the auditors, we have also voluntarily engaged a Practicing Company Secretary to audit us on corporate governance and issue a report. The report does not contain any qualification, reservation or adverse remarks.

Auditors

Statutory auditors

Under Section 139 of the Indian Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the said section. The audit committee of the Company has proposed, and on January 13, 2017, the Board of Directors of the Company has recommended the appointment of Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm registration number 117366 W/W 100018) (‘Deloitte’) as the statutory auditors of the Company. Deloitte will hold office for a period of five consecutive years from the conclusion of the 36th Annual General Meeting of the Company scheduled to be held on June 24, 2017, till the conclusion of the 41st Annual General Meeting to be held in the year 2022, subject to the approval of the shareholders of the Company. The first year of audit will be of the financial statements for the year ending March 31, 2018, which will include the audit of the quarterly financial statements for the year.

To align with the above, the Board of Directors of the Company also approved the appointment of Deloitte as the independent registered public accounting firm of the Company. This appointment is effective the year ending March 31, 2018. As the independent registered public accounting firm, Deloitte will audit the annual financial statements of the Company to be included in the Company’s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (SEC). KPMG will continue as the Company’s independent registered public accounting firm through the completion of the audit for the year ending March 31, 2017 and for the purpose of filing such audited financial statements in the Form 20-F for the year ending March 31, 2017.

Secretarial auditor

As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed Parameshwar G. Hegde of Hegde & Hegde, Practicing Company Secretaries, as secretarial auditor of the Company for fiscal 2018.

6. Corporate social responsibility (CSR)

Infosys has been an early adopter of CSR initiatives. The Company works primarily through its CSR trust, the Infosys Foundation, towards supporting projects in eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development projects. Details of the CSR policy are available on our website, at https://www.infosys.com/ investors/corporate-governance/Documents/corporate-social-responsibility-policy.pdf. The annual report on our CSR activities is appended as Annexure 7 to the Board’s report.

Infosys Foundation

Infosys Foundation was established in 1996 for social welfare activities. Fiscal 2017 marked the 20th anniversary of the Foundations journey of transforming the lives of communities in need across India. Since its inception, the Foundation, through its grant-making and partnerships with individuals, government bodies and competent non-governmental bodies, has fostered a sustainable culture of development in the areas of healthcare, promotion of education and eradication of hunger, rural development, art and culture, and destitute care across the remotest regions of India. For more details on the Foundation’s activities, visit https://www.infosys.com/ infosys-foundation.

Infosys Foundation USA

In fiscal 2017, Infosys Foundation USA advanced its mission to increase access to Computer Science (CS) and Maker education, with an emphasis on under-represented students. The Foundation has impacted 2,539 teachers, 1,34,529 students, and 2,490 schools across the 50 U.S. states, through initiatives such as :

- CS Teacher Support

- CS Student Support

- Maker Initiatives

For more details, visit http://www.infosys.org/infosys-foundation-usa/.

Infosys Science Foundation

The Infosys Science Foundation (ISF) was set up by Infosys and some members of its management in 2009 to encourage the pursuit and practice of the sciences and research. The Infosys Prize, governed by the ISF, recognizes some of the finest research connected to India. The prize winners are awarded a purse of Rs.65 lakh (tax-free in India) and a citation by a jury of global renown across six fields. The winners of the Infosys Prize 2016 were Prof. V Kumaran (Professor, Department of Chemical Engineering, Indian Institute of Science, Bengaluru) in Engineering and Computer Science, Prof. Sunil Amrith (Mehra Family Professor of South Asian Studies, Professor of History, Harvard University, U.S.) in Humanities, Prof. Gagandeep Kang (Executive Director of Translational Health Science and Technology Institute, Faridabad) in Life Sciences, Prof. Akshay Venkatesh (Professor, Department of Mathematics, Stanford University, U.S.) in Mathematical Sciences, Dr. Anil Bhardwaj (Director, Space Physics Laboratory, Vikram Sarabhai Space Centre, Thiruvananthapuram) in Physical Sciences, and Prof. Kaivan Munshi (Frank Ramsey Professor of Economics, University of Cambridge, U.K.) in Social Sciences.

For more details, visit www.infosys-science-foundation.com.

Sustainability initiatives

Our sustainability charter is driven by our core values and ethics. Our sustainability actions encompass economic, social and environmental dimensions. Through Campus Connect, we share some of our best practices with engineering colleges, thus aligning the needs of institutions, faculty and students with those of the IT industry. SPARK and Rural Reach programs focus on raising aspirations and building awareness about computers and the power of IT among students in rural India. For more information about our industry-academia partnerships, visit our website, https://www.infosys.com/ sustainability.

We have been persistent in our efforts to ensure reuse, recycling and responsible disposal of waste to minimize the amount of waste going to landfills. In our efforts to achieve our goal of sourcing 100% of our electricity requirements from renewables, we have continued to invest in solar energy across our campuses. In fiscal 2016, we launched a solar farm at our Hyderabad campus. The energy generated in the farm has helped us in meeting most of our energy requirement through renewables. Details of our environmental sustainability actions are available in Annexure 8 to the Board’s report.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars, as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure 8 to the Board’s report.

Business Responsibility Report (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for top 100 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRR disclosures into our Annual Report.

We also publish the Sustainability Report annually. Our report follows the Global Reporting Initiative’s G4 framework. This is a comprehensive report that covers all aspects of our sustainability activities. The report is audited by an external auditor, DNV GL. For more details, visit https://www.infosys. com/sustainability/.

Green initiatives

Electronic copies of the Annual Report 2016-17 and the Notice of the 36th Annual General Meeting are sent to all members whose email addresses are registered with the Company / depository participant(s). For members who have not registered their email addresses, physical copies are sent in the permitted mode.

Acknowledgments

We thank our customers, vendors, investors, bankers, employee volunteers and trustees of Infosys Foundation, Infosys Foundation USA and Infosys Science Foundation for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Labour and Employment, the Ministry of Communications, the Ministry of Electronics and Information Technology, the Ministry of Commerce and Industry, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Gurugram, Hubballi, Hyderabad, Indore, Jaipur, Mangaluru, Mysuru, Nagpur, Noida, Pune, Mumbai, Kochi and Thiruvananthapuram - and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

R. Seshasayee Dr. Vishal Sikka

Bengaluru Chairman Chief Executive Officer and

April 13, 2017 Managing Director


Mar 31, 2015

To the members,

We are delighted to present the report on our business and operations for the year ended March 31, 2015.

1. Results of our operations

in Rs. crore, except per share data

Particulars Standalone Consolidated

2015 2014 2015 2014

Income from software services and products 47,300 44,341 53,319 50,133

Software development expenses 27,828 26,738 31,834 30,804

Gross profit 19,472 17,603 21,485 19,329

Selling and marketing expenses 2,549 2,390 2,946 2,625

General and administration expenses 2,961 2,686 3,668 3,323

Operating profit before depreciation 13,962 12,527 14,871 13,381

Depreciation and amortization 913 1,101 1,017 1,317

Operating profit 13,049 11,426 13,854 12,064

Other income 3,337 2,576 3,430 2,664

Profit before exceptional item and tax 16,386 14,002 17,284 14,728

Profit on transfer of business (1) <42> - - -

Profit before tax 16,798 14,002 17,284 14,728

Tax expense 4,634 3,808 4,911 4,072

Profit before minority interest and share in net profit / (loss) of associate 12,164 10,194 12,373 10,656

Share in net profit / (loss) of associate - - <1) -

Profit for the period 12,164 10,194 12,372 10,656

Surplus - opening balance 30,392 25,383 31,453 26,041

Dividend eliminated on consolidation of trust - 13 21 13

Reserves on transfer of assets and liabilities of Infosys Consulting India Limited - 6 - -

Reserves on consolidation of trust - 50 - -

Deconsolidation of trust (2) (42) - - -

Amount available for appropriation 42,514 35,646 43,846 36,710

Dividend

Interim 1,723 1,149 1,723 1,149

Final 3,388 2,469 3,388 2,469

Total dividend 5,111 3,618 5,111 3,618

Dividend tax 1,034 615 1,034 615

Amount transferred to general reserve 1,217 1,021 1,217 1,021

Amount transferred to other reserve (3) - - 1 3

Surplus - closing balance 35,152 30,392 36,483 31,453

Earnings Per Share (EPS) before exceptional item (4)(5)

Basic 102.33 89.20 108.26 93.25

Diluted 102.33 89.20 108.25 93.25

EPS after exceptional item (4)(5)

Basic 105.91 89.20 108.26 93.25

Diluted 105.91 89.20 108.25 93.25

Notes: The above figures are extracted from the standalone and consolidated financial statements as per Indian Generally Accepted Accounting Principles (GAAP).

1 crore = 10 million

(1) On April 15, 2014, the Board of Directors (''the Board'') of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with EdgeVerve Systems Limited (EdgeVerve), subject to securing the requisite approval from shareholders in the Annual General Meeting. Subsequently, at the Annual General Meeting held on June 14, 2014, the shareholders authorized the Board to enter into a Business Transfer Agreement and related documents with EdgeVerve, with effect from July 1, 2014 or such other date as may be decided by the Board. The Company has undertaken an enterprise valuation by an independent valuer and accordingly the business has been transferred for a consideration of Rs. 421 crore (US $70 million) with effect from July 1, 2014. Net assets amounting to Rs. 9 crore have also been transferred and accordingly a gain ofRs. 412 crore has been recorded as an exceptional item. The consideration has been settled through the issue of fully-paid-up shares in EdgeVerve. The transfer of assets and liabilities is accounted for at carrying values and does not have any impact on the consolidated financial statements.

(2) Effective January 1, 2015, Infosys Limited Employees'' Welfare Trust has been deconsolidated consequent to SEBI (Share Based Employee Benefits) Regulations, 2014 issued on October 28, 2014.

(3) Under the Swiss Code of Obligation, a few Lodestone subsidiaries are required to appropriate 5% of the annual profit to legal reserve until this equals 20% of the paid-up share capital. To the extent it does not exceed one-half of the share capital, the general reserve may be used only to cover losses or for measures designed to sustain the Company through difficult times, to prevent unemployment or to mitigate its consequences.

(4) Equity shares are at par value of Rs.5/- each.

(5) The Company has allotted 57,42,36,166fully-paid-up equity shares of face value Rs. 5/- each during the year ended March 31,2015, pursuant to a bonus issue approved by the shareholders through a postal ballot. The record date fixed by the Board was December 3, 2014. A bonus share of one equity share for every equity share held, and a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. Earnings per share (EPS) of the previous year has been adjusted for the bonus issue, in accordance with Accounting Standard (AS) 20 - Earnings Per Share.

Revenues - standalone

Our total income on a standalone basis increased to Rs.47,300 crore from Rs. 44,341 crore in the previous year, at a growth rate of 6.7%. Our software export revenues aggregated to Rs. 45,993 crore, up by 6.8% from Rs. 43,063 crore in the previous year. Out of the total revenue, 64.0% came from North America, 21.8% from Europe, 2.8% from India and 11.4% from the Rest of the World. On a standalone basis, our share of revenues from all parts of the world outside North America has decreased to 36.0% in the current year from 36.9% in the previous year.

Revenues - consolidated

Our total income on a consolidated basis increased to Rs. 53,319 crore from Rs. 50,133 crore in the previous year, at a growth rate of 6.4%. Our software export revenues aggregated to Rs. 52,035 crore, up by 6.5% from Rs. 48,839 crore in the previous year. Out of the total revenue, 61.5% came from North America, 24.1% from Europe, 2.4% from India, and 12.0% from the Rest of the World. A focus of our growth strategy is to expand our business to parts of the world outside North America to diversify our revenues. On a consolidated basis, our share of revenues from all parts of the world outside North America decreased to 38.5% in the current year from 39.3% in the previous year.

Profits - standalone

Our gross profit on a standalone basis amounted to Rs. 19,472 crore (41.2% of revenue), as against Rs. 17,603 crore (39.7% of revenue) in the previous year. Sales and marketing costs were 5.4% of our revenue for each of the years ended March 31, 2015 and March 31, 2014. General and administration expenses were 6.3% and 6.0% of our revenues during the current year and previous year, respectively. The operating profit before depreciation amounted to Rs. 13,962 crore (29.5% of revenue), as against Rs. 12,527 crore (28.3% of revenue) in the previous year. The profit before exceptional item and tax was Rs. 16,386 crore (34.7% of revenue), as against Rs. 14,002 crore (31.6% of revenue) in the previous year.

Profits - consolidated

Our gross profit on a consolidated basis amounted to Rs. 21,485 crore (40.3% of revenue), as against Rs. 19,329 crore (38.6% of revenue) in the previous year. Sales and marketing costs were 5.5% and 5.2% of our revenue for the years ended March 31, 2015 and March 31, 2014, respectively General and administration expenses were 6.9% and 6.7% of our revenues during the current year and previous year, respectively. The Operating Profit before Depreciation amounted to Rs. 14,871 crore (27.9% of revenue), as against Rs. 13,381 crore (26.7% of revenue) in the previous year. The profit before tax was Rs. 17,284 crore (32.4% of revenue), as against Rs. 14,728 crore (29.4% of revenue) in the previous year.

Capital expenditure on tangible assets - standalone

This year, on a standalone basis, we capitalized Rs.2,540 crore. This comprises Rs. 694 crore for investment in computer equipment, Rs. 3 crore on vehicles and the balance of Rs. 1,843 crore on infrastructure investments.

In the previous year, we capitalized Rs. 2,381 crore. This comprised Rs. 672 crore for investment in computer equipment, Rs. 3 crore on vehicles and the balance of Rs. 1,706 crore on infrastructure investments.

Capital expenditure on tangible assets - consolidated

On a consolidated basis, we capitalized Rs. 2,673 crore in the current year. This comprises Rs. 778 crore for investment in computer equipment, Rs. 6 crore on vehicles, and the balance of Rs. 1,889 crore on infrastructure investments.

In the previous year, we capitalized Rs. 2,533 crore. This comprised Rs. 759 crore for investment in computer equipment, Rs. 11 crore on vehicles, and the balance of Rs. 1,763 crore on infrastructure investments.

Liquidity

We continue to be debt-free and maintain sufficient cash to meet our strategic objectives. We understand that liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity enables us to make a rapid shift in direction, if there is a market demand. During fiscal 2015, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments. As on March 31, 2015, on a standalone basis, we had liquid assets of Rs. 29,705 crore, as against Rs. 28,149 crore at the previous year end. On a consolidated basis, we had liquid assets of Rs. 32,543 crore at the current year-end, as against Rs. 30,277 crore at the previous year end. These funds comprise deposits with banks and highly rated financial institutions, liquid mutual funds, fixed maturity plans, certificates of deposit, tax-free bonds and government bonds. The details of the tax-free bonds and government bonds are disclosed under the ''non-current investments'' section in the financial statements in this Annual Report.

Appropriations

Dividend

The Board, in its meeting held on April 24, 2015, decided to revise and increase the dividend payout ratio to up to 50% of post-tax consolidated profits effective fiscal 2015 from the existing cap of up to 40%.

The Board, in its meeting held on October 10, 2014, declared an interim dividend of Rs. 30/- per equity share (not adjusted for bonus issue). Further, the Board, in its meeting held on April 24, 2015, has recommended a final dividend of Rs. 29.50/- per equity share (equivalent to Rs. 14.75/- per share post the 1:1 bonus issue, if the 1:1 bonus issue approved by members, pursuant to the Postal Ballot Notice dated April 24, 2015) for the financial year ended March 31, 2015. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on June 22, 2015.

The total dividend appropriation (excluding dividend tax) for the current year is Rs. 5,111 crore, as against Rs. 3,618 crore in the previous year. Dividend (including dividend tax) as a percentage of consolidated net profit after tax is 49.8%, as compared to 39.7% in the previous year.

The Register of Members and Share Transfer Books will remain closed on June 17, 2015 for the purpose of payment of the final dividend for the financial year ended March 31, 2015, and the Annual General Meeting. The Annual General Meeting is scheduled to be held on June 22, 2015.

Bonus shares

The Company, in December 2014, had issued bonus shares to the shareholders of the Company in proportion of 1:1 and consequently, the paid-up share capital of the Company increased from 57,42,36,166 to 1,14,84,72,332 shares.

Particulars of loans, guarantees or investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

Transfer to reserves

We propose to transfer Rs. 1,217 crore to the general reserve. An amount of Rs. 35,152 crore is proposed to be retained in the surplus.

Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Particulars of contracts or arrangements made with related parties

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 2 to the Board''s report.

Material changes and commitments affecting financial position between the end of the financial year and date of report

On April 24, 2015, the Board authorized the Company to execute a Business Transfer Agreement and related documents with the Company''s subsidiary, EdgeVerve, subject to securing the requisite approval from shareholders through postal ballot. The proposed transfer of the business of Finacle and Edge Services to EdgeVerve is at an estimated consideration of up to Rs. 3,400 crore and up to Rs. 220 crore, respectively. On April 24, 2015, the Company entered into a definitive agreement to acquire Kallidus Inc. (doing business as Skava) and its affiliate, a leading provider of digital experience solutions, including mobile commerce and in-store shopping experiences, to large retail clients, for a consideration of US $120 million (approximately Rs. 750 crore), including a deferred component and retention bonus.

The Board, in its meeting held on April 24, 2015, has considered, approved and recommended a bonus issue of one equity share for every equity share held and a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, as on a record date to be determined. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder would remain unchanged. The bonus issue of equity shares and ADSs will be subject to approval by the shareholders through postal ballot, and any other applicable statutory and regulatory approvals.

Apart from these, there have been no other material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report.

Variation in market capitalization

As at March 31, Increase / 2015 2014 (decrease) in %

Market capitalization (in Rs. crore) 2,54,771 1,88,510 35.1

Price earnings ratio (1) 20.5 17.6 16.5

Percentage increase in the market price of the shares in comparison with the last public offer price (2) 5,97,687

Notes: Data based on share prices quoted on NSE.

(1) Based on consolidated Indian GAAP financial statements.

(2) Last public offer price has been adjusted for bonus issues and stock split.

Management''s discussion and analysis

In terms of the provisions of Clause 49 of the Listing Agreement, the Management''s discussion and analysis is set out in this Annual Report.

2. Business

Strategy

Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while generating profitable growth for our investors.

In order to do this, we will apply the priorities of our strategy — renew and new — to our own business and cascade it to everything we do. This applies to our solution and service offerings, our client and employee engagement processes, and to the operational processes of the Company. These translate to the following strategic focus areas : Differentiate our solution and service offerings : In process-oriented services — infrastructure management, business process outsourcing, and software testing or maintenance — our strategy will be to embrace the concepts of automation and artificial intelligence to improve productivity, gain higher accuracy and reduce the total cost to clients. We are leveraging our Global Delivery Model to provide scale, quality, expertise and cost advantages to our projects with clients. We are building differentiated platforms such as our Edge Suite, our Finacle® core banking product and the Infosys Information Platform. We will leverage the advantages of open source technologies in providing innovative and high cost-benefit performance solutions to our clients. We will continue to invest in emerging mobile and digital technologies and big data analytics.

Pursue strategic alliances and acquisitions : We are developing alliances that complement our core competencies. We are partnering with leading technology software providers in creating, deploying, integrating and operating business solutions for our clients. We plan to deploy our capital in making selective business acquisitions that augment our expertise, complement our presence in certain market segments and accelerate the execution of our strategies.

Build deep and impactful client relationships : Our strategy is to engage with clients on their large transformative programs, both in traditional IT areas as well as for their new digital business initiatives. We are expanding existing client relationships by providing them a broad set of end-to-end service offerings and increasing the size, nature and number of projects we do with them. We will acquire new clients, and increase our presence in new geographies and market segments by investing in targeted business development and marketing. We will invest in high-performing consulting and business development teams and the processes and systems required to make them effective. We will continue to ensure our brand is differentiated, global and respected. Build a culture within the Company that delivers innovation to clients : We will create the required environment, structures, ecosystems and economic models that will spur innovation across the Company We are using Design Thinking methods to elicit new problem statements and bring together our deep knowledge of client industries and emerging technologies to solve problems for our clients. We have allocated US $500 million towards an innovation fund to tap into innovation networks of early stage companies and universities to gain access to new thinking and business models. We will continue to build a collaborative and entrepreneurial culture in the organization.

Attract and retain a global, diverse, motivated and high performing employee base : Our employees are our biggest assets. To meet the evolving need of our clients, our priority is to attract and engage the best talent in the right locations with the right skills. We are fully committed to strengthening our brand to continue to be the ''employer of choice''. A series of measures have been initiated to empower our employees through trust and accountability. We have overhauled our performance management system to bring in more objectivity, created internal marketplace for employees to work on challenging assignments, and increased the focus on providing a safe and transparent working environment. We are guided by our value system which motivates our attitudes and actions. Our core values are Client Value, Leadership by Example, Integrity and Transparency, Fairness and Excellence (C-LIFE). We have invested substantially in training, which is central to our employees'' learning and career development process. We are committed to creating a work environment that is social, fun and collaborative. We continue to provide employees with life-long learning opportunities in a transparent and meritocratic culture. Enhance our operational effectiveness for agility and cost : We will periodically assess the effectiveness of our organization structure and processes to optimize it for alignment with our strategic objectives and agility. We continually evaluate critical cross-functional processes and benchmark them with best-in-class practices to optimize costs and enable swift and effective response to our clients. We constantly monitor and optimize various operational parameters such as the cost and utilization of resources, distribution of employees around the world, the cost of operating our campuses and optimally realizing the efficiencies of scale and the strengths of our Global Delivery Model.

Organizational changes

To enhance our agility in the market, sharpen our competitive differentiation and defragment centers of excellence, we realigned our organizational structure. The realignment is effective April 1, 2015. Our go-to-market units are organized around five global industry segments :

- Financial Services

- Manufacturing

- Retail, CPG & Logistics

- Energy, Utilities, Communications & Services

- Life Sciences, Healthcare & Insurance

Apart from the five industry segments, our businesses in India, China and Japan are run as standalone regional business units.

Our service delivery will be organized as horizontal centers of excellence or service lines, with a focus on nurturing innovation, to drive differentiation across the industry segments. This organization will comprise the following service lines :

- Infosys Global Consulting

- Global Delivery

- Enterprise Solutions

- Infosys Digital

- Enterprise Mobility

- Custom Application Development

- Application Management Services

- Independent Validation Solutions

- Business Intelligence

- Engineering Services

- Cloud and Infrastructure Services

- Products

- Finacle

- EdgeVerve

- Platforms

- Infosys BPO

Client base

Our client-centric approach continues to bring us high levels of client satisfaction. We derived 97.8% of our consolidated revenues from repeat business this fiscal. We, along with our subsidiaries, added 221 new clients, including a substantial number of large global corporations. Our total client base at the end of the year stood at 950. The client segmentation for the current and previous years on a consolidated basis is as follows :

in nos.

Clients 2015 2014

1 million dollar 529 501

5 million dollar 244 232

10 million dollar 159 148

25 million dollar 83 78

50 million dollar 47 42

75 million dollar 29 24

100 million dollar 15 13

200 million dollar 4 3

300 million dollar - 1

Infrastructure

We added 35.62 lakh sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2015 stands at 403.68 lakh sq. ft. The number of marketing offices as on March 31,2015 was 85, compared to 73 in the previous year.

Subsidiaries and associates

We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation services. At the beginning of the year, we had 11 direct subsidiaries. As on March 31, 2015, we have 13 direct subsidiaries, 29 step-down subsidiaries and one associate.

During the year, the Board of Directors (''the Board'')reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 1 to the Board''s report. The statement also provides the details of performance, financial positions of each of the subsidiaries.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.infosys.com. These documents will also be available for inspection during business hours at our registered office in Bengaluru, India. During the year, investments were made in the following subsidiaries / associate :

- Infosys Nova Holdings LLC : During the year, the Company incorporated a new subsidiary, Infosys Nova Holdings LLC (''Infosys Nova''), in the U.S., effective January 23, 2015. Subsequently, Infosys Nova acquired 20% of the equity interests in DWA Nova LLC, a company formed along with DreamWorks Animation (DWA), for a cash consideration of Rs. 94 crore. DWA Nova LLC will develop and commercialize image generation technology in order to provide end-to-end digital manufacturing capabilities to companies involved in the designing, manufacturing, marketing or distribution of physical consumer products.

- Panaya Inc. : On March 5, 2015, Infosys acquired 100% voting interests in Panaya Inc. (''Panaya''), a Delaware Corporation in the U.S., by entering into a share purchase agreement for a cash consideration of approximately Rs. 1,398 crore. Panaya is a leading provider of automation technology for large-scale enterprise and software management.

- EdgeVerve : Infosys established EdgeVerve Systems Limited in 2014, to help global corporations sense, influence, fulfill and serve the needs of digital consumers, and leverage the potential of their business ecosystems.

On April 15, 2014, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with EdgeVerve, subject to securing the requisite approval from shareholders in the Annual General Meeting. Subsequently, at the Annual General Meeting held on June 14, 2014, the shareholders authorized the Board to enter into a Business Transfer Agreement and related documents with EdgeVerve, with effect from July 1, 2014 or such other date as may be decided by the Board. The Company has undertaken an enterprise valuation by an independent valuer and accordingly the business has been transferred for a consideration of Rs. 421 crore (US $70 million) with effect from July 1, 2014, settled through the issue of fully-paid-up equity shares.

Products and platforms Finacle®

Finacle® is the industry-leading universal banking solution from Infosys that helps banks simplify their operations, accelerate innovation and create new opportunities. Today, Finacle® is the choice for banks across 84 countries and serves over 547 million customers. The solution is consistently rated as a leader in the market by various industry analysts. Finacle® solutions address core banking, e-banking, mobile banking, CRM, payments, treasury, origination, liquidity management and wealth management of retail and corporate, and universal banks worldwide. The solution''s component-based structure and enterprise- class capabilities helps banks boost agility and efficiency of their operations, and significantly improves customer experience across channels.

A study of top 1,000 global banks revealed that banks powered by Finacle® enjoy 50% higher returns on assets, 30% higher returns on capital, and 8.1 percentage point lower costs to income than others. The Company is organizing its software product assets within an integrated product group, which will be part of EdgeVerve, a subsidiary of Infosys. The Company therefore proposes to integrate Finacle business into EdgeVerve with effect from August 01, 2015.

EdgeVerve

EdgeVerve defines, develops and operates innovative, cloud-hosted business platforms and software products which are offered to clients as ''Pay-as-you-use'' services. We focus on realizing business outcomes for our clients by driving their revenue growth, cost-effectiveness and improved profitability. All our platforms are branded under the Edge umbrella.

Platforms

An important part of our strategy is the creation of the ''Infosys Platform'' which consists of the Infosys Information Platform (IIP) and the Infosys Automation Platform (IAP). These in turn consist of a number of open source software components, and/or Infosys proprietary software products, all of which can be deployed on public or private cloud or at the customer''s premise. IIP is intended to address the key challenges that enterprises have in effectively storing, managing and analyzing the increasing amounts of data available to business enterprises. Infosys'' objective is to use IIP to help customers find an improved way to package, develop, administer and monitor their enterprise data. Because it is based on existing, tested open source components, IIP offers rapid deployment as a base for a broad variety of industry-specific scenarios. It is particularly suited for deployment in scenarios where a customer''s existing environment lacks scalability or speed of reporting.

Quality

We continue our journey of delivering value to our clients through significant investments in quality programs. While sustaining existing external benchmarks and certifications, we have added new certifications and further enhanced our programs and initiatives to renew our commitment to the culture of quality.

We continue to adhere to international quality standard certifications such as ISO 9001:2008, ISO 22301, ISO 20000, AS EN 9100, ISO 13485, TL 9000 SV OHSAS 18001 and ISO 14001. We have also received an independent auditor''s assurance report on compliance to ISAE 3402 / SSAE16 and a certification of compliance on PCIDSS V 2.0 for Infosys BPO Limited. We also get assessed at CMMi level 5. According to the Process Maturity Profile published by the CMMi Institute of Carnegie Mellon University in December 2014, only 7% of 10,768 organizations globally are operating at Level 5, which is the highest level of process maturity.

Infosys is certified under various standards to meet client demands and enhance delivery value. Infosys Limited and Infosys BPO Limited are certified for the revised ISO 27001:2013 information security standards. As part of Infosys'' contract, the Central Processing Center of the Government of India''s income tax department was certified for ISO 27001. Following the successful completion of external independent assurance assessment based on GRI G4 comprehensive requirements, Infosys became the first IT company to publish a sustainability report compliant with GRI G4 comprehensive guidelines.

Our Quality department handles large change management initiatives to drive quality and productivity improvements across the Company, using various techniques such as Six Sigma, Lean methodology and engineering levers like Reuse and Tools. It is governed and monitored through the Balanced Scorecard and validated using the Infosys Scaling Outstanding Performance (iSOP) program adopted from the Malcolm Baldridge National Quality Award (MBNQA) framework.

Our Business Value Articulation (BVA) framework is an initiative comprising frameworks, methodologies, processes and systems to promote articulation and assurance of business value for various engagements. The BVA program helped us create substantial impact on our clients. We continue to fine-tune our Client Value Survey to capture the voice of our customers, and to assess client expectations as an ongoing process. The data that is collected is analyzed around satisfaction, advocacy, loyalty, fulfillment and value for money, and helps us draw action plans to improve client experience.

Branding

The Infosys brand is a key intangible asset of the Company The branding initiative is designed to reposition Infosys as the next-generation services company that would help enterprises renew themselves while also creating new avenues to generate value. Brand Infosys is being built around the premise that software, in a very fundamental way, is reshaping the world around us. And because of this, there is a duality that every business faces - on the one hand, the need to renew existing systems, to improve their effectiveness with new technologies and innovation, and on the other hand, the need to deliver completely new kinds of services and new solutions in new ways using next-generation technologies. Infosys helps its clients achieve this dual agenda in a culture of learning, creativity and purpose. It is the delivery of this brand promise that makes us the right technology partner for clients in over 50 countries. Brand Infosys has been recognized by leading publications and independent industry bodies globally. We are regularly rated by global industry analysts as a leader in key services and solutions across domains. Refer to the Awards and recognition section in this report.

Our marketing reach extends globally through advertisements, public relations and digital marketing initiatives. We participate in premier business and industry events around the world. We also organize signature events and roundtables across geographies. ''Confluence'', our flagship client event, is consistently well-attended and highly rated by our clients and industry partners.

Awards and recognition

In fiscal 2015, we received numerous awards and recognition, both international and national. Here is a quick glimpse of some of them :

Business and management

- We won the 2014 Thomson Reuters India Innovation Award in the ''Hi-Tech Corporate'' category. This award honors organizations headquartered in India for their spirit of innovation in R&D.

- We won the 2014 Asia IP Elite Award, which recognizes companies that are leading the way in IP value creation in the Asia-Pacific region.

- Infosys AssistEdge and Openreach (infrastructure division of BT) won the prestigious Alsbridge Innovation Award 2014 for ''Customer Service Seamless Desktop''.

- We topped Asiamoney''s Corporate Governance Poll in the ''domestic country'' category. The poll was expanded to cover Australia and Vietnam, and is the largest ever, with 322 select analysts and investors voicing their opinions.

- At the Institutional Investor 2014 All-Asia Rankings, we were honored with several awards in the IT services and software categories. The recognitions included Best CFO and Best Investor Relations.

- We were included in the top list of ''Business Innovation and Transformation Partners'' by Lunendonk, a leading German IT and consulting industry analyst firm. Only 11 companies across all German consulting and IT companies make it to this premiere league.

- We won the Data Security Council of India (DSCI) Excellence Award under the ''Privacy in Outsourcing Sector (IT-ITeS / BPM)'' category.

- We were voted India''s best company in the areas of corporate governance and commitment to paying good dividends, while the Infosys CFO, Rajiv Bansal, was chosen as India''s best CFO in FinanceAsia''s Asia''s Best Companies poll, 2015.

- We were recognized by the Neiman Marcus Group as the ''2014 Technology Partner of the Year'' after a rigorous selection process, based on four parameters - Service, Quality, Value and Innovation.

- We received the prestigious ''Daimler Supplier Award 2014'' for Outstanding Quality in the provision of IT Data Center Services.

- We were named the partner of the year by a leading global retailer.

- We were named a leader in The Forrester Wave™: BI Service Providers, Q4 2014. We received top scores for experience across multiple geographies and industries, strategic investments in business intelligence, and transparency.

- We were also inducted into the Winner''s Circle in HfS Research Enterprise Analytics Services Blueprint.

- Infosys BPO won four Gold Awards at the TISS LeapVault Chief Learning Officers Awards 2014 in the categories ''Best Global L&D Team of the Year'', ''Best Corporate University'', ''Best Virtual Learning Program'' and ''Best Induction Training Program''.

- Infosys McCamish won the Workflow Management Coalition (WfMC) Global Award for ''Excellence in Case Management for Insurance''.

- Infosys BPO won the 2014 Golden Peacock National Training Award. It was also declared a winner at the National Institution for Quality and Reliability Awards in India.

- Infosys BPO and Procter & Gamble jointly won the 2014 Outsourcing Excellence Award.

- Infosys BPO received an ASTD Excellence in Practice in Coaching and Mentoring citation.

- We were named leaders in the Magic Quadrant for Finance and Accounting BPO by Gartner for the fourth consecutive year.

- We have been identified as a Leader in NelsonHall''s Vendor Evaluation and Assessment for application outsourcing.

Banking

- Finacle® won five international banking excellence awards in partnership with its clients at the annual Asian Banker Awards 2014. These included two awards each for core banking and channel solutions implementation, and one award for its treasury management implementation.

- Finacle® was rated as a leader in Gartner''s Magic Quadrant for International Retail Core Banking 2014 for the eighth time in a row. Infosys was positioned at the highest level, within the Leaders Quadrant, in ability to execute and furthest in completeness of vision.

- Finacle® emerged as a leader in a key industry assessment - The Forrester Wave™ : Customer-Centric Global Banking Platforms, Q3 2014.

- CEB TowerGroup rated Finacle® e-Banking and trade finance solutions as ''Best-in-Class'' solutions for customer experience, design and security, and enterprise support.

- Finacle® was also judged a winner by Juniper Research for the 2014 Future Mobile Awards in the ''Mobile Banking'' category.

- Finacle® was rated by CEB TowerGroup analysts as ''Best-in-Class'' for bank user services and enterprise support.

- Finacle® was named a leader in the IDC MarketScape - Worldwide Core Banking Solutions 2014 Vendor Assessment : Global Providers for North American Banks during the year.

ERP services

- We were named leaders in Gartner''s Magic Quadrant for Oracle Application Implementation Services, Worldwide - for our completeness of vision and ability to execute.

- We were positioned in the ''Winner''s Circle'' of the HfS Blueprint - SAP Services.

- We were named leaders in the IDC MarketScape Worldwide Oracle Implementation Services Ecosystem''s 2014 report.

Technology innovation

- We won Hitachi''s ''Technical Architect Team of the Year'' award for exemplary work in architecting an infrastructure transformation solution for a leading U.S.-based financial services provider.

- The American Council for Technology - Industry Advisory Council (ACT-IAC) selected Infosys'' Marketplace-as-a-Service platform as one of the top 30 finalists for its ''Igniting Innovation 2015'' awards.

- Infosys was a winner in the 2014 ''Simulating Reality'' contest organized by MSC Software. The winning team from Infosys used MSC''s simulation technologies to better diagnose osteoporosis and accurately quantify fracture risk.

Healthcare

- We were cited as ''Leader and Star Performer'' in Life Sciences IT Outsourcing in Everest Group''s report : IT Outsourcing in Life Sciences - Service Provider Landscape with PEAK Matrix™ Assessment 2014.

- The Indo-American Chamber of Commerce recognized Infosys for ''Excellence in Innovation'' and ''Excellence in Environment, Health & Safety''.

- Infosys Public Services won the ''Hottest Government Contractor'' honor on June 24, 2014 at the 13th Annual Northern Virginia Technology Council (NVTC) ''Hot Ticket Awards'' for developing innovative solutions to help the government.

- Infosys Public Services was ranked 16th in the 2014 ''Healthcare Informatics 100'', based on revenues from healthcare IT products and services.

- Infosys Public Services'' efforts in modernizing the core systems of Long Term Care Partners (LTCP) to optimize operations and support its growth were acknowledged by LTCP.

Diversity

- The Women of Color magazine honored 13 Infoscions in October 2014. The ''Women of Color in Technology'' awards is a competitive national awards program that recognizes and honors the exceptional achievements of distinguished multicultural women who excel in Science, Technology, Engineering and Mathematics (STEM) in the U.S.

- We won the 2014 Asia Pacific HRM Congress Award for ''Diversity and HR''.

Sustainability awards

Our sustainability efforts won us several awards and accolades in fiscal 2015. These are some of the highlights :

- We won the Ashden International Gold Award, also known as the ''Green Oscars'', for ''Sustainable Buildings''.

- We were recognized for our efforts in sustainability and awarded the Solar Globe Award, 2014 for ''Excellence in Sustainability''.

- We were awarded the NDTV Property Award for our Software Development Block (SDB) 2 and 3 in the Hyderabad campus under the ''Most Environment Friendly Commercial / Office Space'' category.

- We won the Bry Air Award under the ''System Design'' category for our next-generation smart buildings.

- The Bureau of Energy Efficiency awarded us the National Energy Conservation Award for SDB 1 and 2, two buildings in our Mahindra City campus, and a certificate of merit for SDB 1 in Mahindra City and SDB 4 and 6 in the Sholinganallur campus, in Chennai.

- We were ranked third in the State Pollution Control Award given by the Kerala State Pollution Control Board for our efforts in pollution control and environmental protection at our Thiruvananthapuram campus.

- We received the first prize in the ''Lawn and Garden'' category in the Dasara Phala Pushpa Darshana-2015 for the 13th consecutive year for our Mysuru Development Center.

- We were recognized by the Karnataka State Pollution Control Board for the green belt development at our Mangaluru Nethra Development Center.

- We were placed second in the Environment, Health & Safety Award given by CII in the ''Office / Software / Service'' category and also a 4 star rating for our Bengaluru Development Center.

- We won the first prize in the ''Energy Efficiency'' category from the Maharashtra Energy Development Agency (MEDA) for our Pune Phase 2 campus and second prize for our Pune Phase 1 campus.

3. Human resources management

To ensure good human resources management at Infosys, we focus on all aspects of the employee lifecycle. This provides a holistic experience for the employee as well. During their tenure at the Company, employees are motivated through various skill-development, engagement and volunteering programs. All the while, we create effective dialogs through our communication channels to ensure that the feedback reach the relevant teams, including the leadership. Through the annual employee engagement survey (LITMUS 2015), a number of tracks were identified this fiscal, and employees were invited to be part of the teams that actionized these tracks. In addition, a special, cross-functional team was put in place to enhance employee experience by renewing systems and processes. Quarterly promotions, 100% variable payout for two consecutive quarters, an Expert Track to identify individuals who are technically proficient, and a unique crowd-sourcing initiative to gather ideas around innovation were some of the interventions made to engage and develop employees. Interactions with the leadership continue through email, face-to- face interactions, video conferencing and video messages. We also launched the first Hackathon at Infosys, across our global locations to encourage rapid prototyping and problem-solving, and build a culture of innovation.

We have set up a scalable recruitment and human resources management process. Over the last year, on a standalone basis, we received 13,80,283 applications from prospective employees. The Infosys Group added 15,782 (net) and 53,386 (gross) employees this year, taking the total strength to 1,76,187 from 1,60,405 at the end of the previous year.

On a standalone basis, the attrition rate for fiscal 2015 stands at 18.9% compared to 18.7% for the previous year.

Talent fulfillment

Last year, a new function was established for identifying the best fit talent for any project on time, through the deployment of available people, recruitment and training. Over the last one year, this has yielded rich dividends. Our ability to staff the right people for our business needs has improved substantially and at the same time, talent utilization has moved up materially. A robust supply chain has been built that will yield dividends in the years to come.

Particulars of employees

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure 3a to the Board''s report.

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of '' 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure 3b to the Board''s report.

Education, training and assessment

Learning and education are at the foundation of Infosys. Competency development continues to be a key area of strategic focus for us.

We launched new training programs to align with the new business strategy of renew and new. During fiscal 2015, the total training provided for employees was over 3.36 million person days. Many of our employees also undertook external certifications, thereby creating a large pool of certified people.

To enhance the innovation quotient among the workforce, we conducted the Design Thinking program for over 23,975 employees during fiscal 2015, including fresh recruits. In addition, the training has been imparted to client teams and leadership teams.

Our flagship industry-academia partnership program, Campus Connect, made progress through the launch of electives to help engineering colleges run new programs within their curricula. In fiscal 2015, we engaged with 1,440 faculty members who in turn trained over 34,655 students. With this, the total number of beneficiaries covered has reached over 11,886 faculty members and over 3,30,643 students from 348 engineering institutions.

SPARK is an academia connect program that exposes students in schools and colleges to the current opportunities and developments in IT and aims to inspire them and raise their aspirations. As part of this program, we engaged with over 38,460 students during the year. Since its launch in 2008, the program has reached over 9,16,460 students. Over 78,726 students participated in Aspirations2020, the coding contest we conduct for engineering students, in fiscal 2015.

Our knowledge management system set a new record by winning the Global Most Admired Knowledge Enterprise (MAKE) award for the 10th time, Asian MAKE award for the 12th time and Indian MAKE award for the 10th time.

Infosys Leadership Institute

The vision of the Infosys Leadership Institute (ILI) is to be recognized as a globally respected institution that is committed to developing leaders for Infosys. The focus of the institute is to develop and prepare leaders of the organization for current and future executive leadership positions. ILI''s leadership development model includes three dimensions — transformational, instrumental and transactional leadership — with Infosys values at its core. The institute employs a range of developmental approaches including classroom training, individualized coaching, and ''leaders teach'' sessions. Leaders from across Infosys and its subsidiaries are target beneficiaries of ILI''s programs.

4. Corporate governance

Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization''s brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders'' expectations. At Infosys, it is imperative that our company affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of our stakeholders.

We continue to benchmark our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and CRISIL. ICRA has rated our corporate governance practices at CGR 1 and CRISIL has assigned CRISIL GVC Level 1 rating to us.

We comply with the Securities and Exchange Board of India (SEBI)''s guidelines on corporate governance. We have documented our internal policies on corporate governance. During the year, we continued to comply with the U.S. Sarbanes-Oxley Act, 2002. Several aspects of the Act, such as the Whistleblower Policy and Code of Conduct and Ethics, have been incorporated into our policies. Our Corporate governance report for fiscal 2015 forms part of this Annual Report.

Board diversity

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website, http://www.injosys.com/investors/corporate-governance/Pages/policies.aspx.

Number of meetings of the Board

The Board met nine times during the financial year, the details of which are given in the Corporate governance report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

Policy on directors'' appointment and remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2015, the Board consists of 10 members, two of whom are executive or whole-time directors, and eight are independent directors. The Board periodically evaluates the need for change in its composition and size.

The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is appended as Annexure 4 to the Board''s report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

Declaration by independent directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board evaluation

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee.

None of the independent directors are due for re-appointment.

Training of independent directors

Every new independent director of the Board attends an orientation program. To familiarize the new inductees with the strategy, operations and functions of our Company, the executive directors / senior managerial personnel make presentations to the inductees about the Company''s strategy, operations, product and service offerings, markets, software delivery, organization structure, finance, human resources, technology, quality, facilities and risk management.

The Company has a program to help its directors improve their expertise in governance by providing a training fee of US $5,000 per annum for them to attend courses on board governance held by well-known business schools in any part of the world.

Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as a director. The format of the letter of appointment is available on our website, http://www.infosys. com/investors/corporate-governance/Pages/policies.aspx.

Inductions

On the recommendation of the nomination and remuneration committee, the Board appointed Dr. Vishal Sikka as a whole-time director with effect from June 14, 2014 to July 31, 2014 and as CEO and MD effective August 1, 2014. We thank the shareholders for their support in confirming Dr. Vishal Sikka''s appointment at the Extraordinary General Meeting held on July 30, 2014.

On the recommendations of the nomination and remuneration committee, the Board appointed Prof. John W Etchemendy as an Independent member of the Board effective December 04, 2014. We thank the shareholders for their support in confirming Prof. John W Etchemendy''s appointment through postal ballot on March 2, 2015. The nomination and remuneration committee also recommended the induction of Roopa Kudva as an independent member of the Board on February 4, 2015. Roopa Kudva is a member of several policy-level committees relating to the Indian financial system, including committees of SEBI and the Reserve Bank of India. She regularly features in lists of the most powerful women in business compiled by prominent publications, including Fortune and Business Today. We seek your support in confirming the appointment of Roopa Kudva in the ensuing Annual General Meeting.

Re-appointments

As per the provisions of the Companies Act 2013, U. B. Pravin Rao retires at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his re-appointment.

The Companies Act, 2013, provides for the appointment of independent directors. Sub-section (10) of Section 149 of the Companies Act, 2013 provides that independent directors shall hold office for a term of up to five consecutive years on the board of a company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company Accordingly, all the independent directors except for Roopa Kudva, who was appointed as additional director on February 4, 2015, were appointed by the shareholders either at the general meeting or through postal ballot as required under Section 149(10). Further, according to Sub-section (11) of Section 149, no independent director shall be eligible for appointment for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in Sub-sections (6) and (7) of Section 152 of the Act shall not apply to such independent directors.

None of the independent directors will retire at the ensuing Annual General Meeting.

Retirements and resignations

B. G. Srinivas resigned as whole-time director with effect from June 10, 2014. The Board places on record its appreciation for the services rendered by B. G. Srinivas during his tenure with the Company.

Srinath Batni resigned as whole-time director with effect from July 31, 2014. The Board appreciates and thanks him for his efforts in driving delivery and quality excellence for the Company S. D. Shibulal resigned as CEO and MD with effect from July 31, 2014. S. D. Shibulal is a co-founder of the Company and has played a seminal role in shaping its destiny The Board places on record its gratitude for the services rendered by Shibulal during his long association with the Company

S. Gopalakrishnan resigned as a whole-time director and Executive Vice Chairman of the Board with effect from June 14, 2014 and as non-executive Vice Chairman with effect from October 10, 2014. As a co-founder, he has contributed to the Company''s progress through the various roles he has played over the last 33 years. The Board thanks him for his guidance and invaluable contribution.

Narayana Murthy resigned as a whole-time director and Executive Chairman of the Board with effect from June 14, 2014 and as Non-Executive Chairman with effect from October 10, 2014. The Board places on record its deep sense of appreciation for the services rendered by Narayana Murthy, who is not just the founder of the Company, but also one of the architects of the Indian IT industry. Narayana Murthy indicated that in line with the Company''s high corporate governance standards and to avoid any perceived conflicts, it would not be appropriate for him to be the Chairman Emeritus of

Infosys. The Board accepted his decision and thanked him for his vision, leadership and guidance in making Infosys a globally respected company.

Ann M. Fudge retired as independent director with effect from June 14, 2014. The Board thanks her for providing valuable guidance to the Company during her tenure.

Dr. Omkar Goswami retired as independent director with effect from December 31, 2014. The Board places on record its sincere appreciation for Dr. Omkar Goswami''s long and fruitful association with the Company.

Parvatheesam Kanchinadham resigned as the Chief Risk & Compliance Officer and Company Secretary of the Company, with effect from January 10, 2015. The Board thanks Parvatheesam for the many roles he played during his tenure with the Company.

Committees of the Board

Currently, the Board has five committees : the audit committee, nomination and remuneration committee, corporate social responsibility committee, stakeholders relationship committee, and risk and strategy committee. All committees, except the corporate social responsibility committee, consist entirely of independent directors.

A detailed note on the Board and its committees is provided under the Corporate governance report section in this Annual Report. The composition of the committees and compliances, as per the applicable provisions of the Act and Rules, are as follows :

Employees'' stock options / Restricted stock units

The Company has a 2011 RSU Plan which provides for the grant of restricted stock units (RSUs) to eligible employees of the Company. The Board placed the proposal of instituting the 2011 Plan to the shareholders on August 30, 2011, and the shareholders approved the proposal on October 17, 2011 through a postal ballot. The maximum aggregate number of shares that may be awarded under the Plan is 56,67,200 (currently held by the Infosys Limited Employees'' Welfare Trust and adjusted for bonus shares issued) and the plan shall continue in effect for a term of 10 years from the date of initial grant under the plan. The RSUs will be issued at par value of equity shares. The 2011 Plan is administered by the management development and compensation committee, now known as the nomination and remuneration committee (''the committee''), and through the Infosys Limited Employees'' Welfare Trust (''the Trust'').

During the year ended March 31, 2015, the Company made a grant of 27,067 RSUs (equivalent to 54,134 RSUs after adjusting for bonus issue made in December 2014) to Dr. Vishal Sikka, Chief Executive Officer and Managing Director. The RSUs will vest over a period of four years from the date of the grant in the proportions specified in the award agreement. The RSUs will vest subject to the achievement of certain key performance indicators as set forth in the award agreement for each applicable year of the vesting tranche and continued employment through each vesting date.

The details of the employee stock options / RSU plan form part of the notes to accounts of the financial statements in this Annual Report.

Directors'' responsibility statement as required under Section 134(3) (c) of the Companies Act, 2013

The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''the Act''), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards.

The directors confirm that :

- In preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed.

- The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period.

- The directors have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The directors have prepared the annual accounts on a going concern basis.

- The directors have laid down internal financial controls, which are adequate and are operating effectively.

- The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Auditors'' certificate on corporate governance

As required by Clause 49 of the Listing Agreement, the auditors'' certificate on corporate governance is enclosed as Annexure 5 to the Board''s report.

5. Auditors

Statutory auditors

At the Annual General Meeting held on June 14, 2014, B S R & Co. LLP, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2018. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of B S R & Co. LLP, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Secretarial auditor

Parameshwar G. Hegde of Hegde & Hegde, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2014-15 forms part of the Annual Report as Annexure 6 to the Board''s report.

The Board has appointed Parameshwar G. Hegde, Hegde & Hegde, Practicing Company Secretaries, as secretarial auditor of the Company for the financial year 2015-16.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Extract of annual return

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 7 to the Board''s report.

Internal financial control

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

6. Corporate social responsibility

Infosys has been an early adopter of corporate social responsibility initiatives. Along with sustained economic performance, environmental and social stewardship is a key factor for holistic business growth. The Company works with Infosys Foundation towards removing malnutrition, improving healthcare infrastructure, supporting primary education, rehabilitating abandoned women and children, and preserving Indian art and culture.

Over the years, we have been striving to achieve a fine balance of economic, environmental and social imperatives, while also paying attention to the needs and expectations of our internal as well as external stakeholders. Our corporate social responsibility is not limited to philanthropy, but encompasses holistic community development, institution building and sustainability related initiatives.

As per the Companies Act, 2013, all companies having net worth of Rs.500 crore or more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising three or more directors, at least one of whom should be an independent director and such Company shall spend at least 2% of the average net profits of the Company''s three immediately preceding financial year. Accordingly, we spent Rs. 243 crore towards our CSR activities in fiscal 2015.

Our CSR committee comprises K. V Kamath (Chairperson), R. Seshasayee, Kiran Mazumdar-Shaw and Dr. Vishal Sikka. The committee is responsible for formulating and monitoring the CSR policy of the Company.

CSR activities, as per the provisions of the Companies Act, 2013, may be undertaken by the Company through a registered trust or a registered society. In 1996, Infosys set up the Infosys Foundation (''the Foundation'') as a not-for-profit trust. The Foundation works closely with and supports the Board and the committee in identifying and implementing CSR activities. The Foundation also assists the Board and the committee in reporting progress of deployed initiatives and in making appropriate disclosures (internal / external) on a periodic basis.

Details about the CSR policy and initiatives taken by the Company on Corporate Social Responsibility during the year is available on our website, http://www.injosys.com/investors/corporate-governance/Pages/ policies.aspx. The annual report on our CSR activities is appended as Annexure 8 to the Board''s report.

Infosys Foundation

The Infosys Foundation was established in 1996 as a not-for-profit trust to conduct social welfare activities. Over the years, the Foundation has initiated, guided and conducted several programs in education, healthcare, disaster relief and rural development.

In fiscal 2015, the Foundation''s work spanned a wide range of activities such as sponsoring various organizations that promote local arts and culture, funding professorships and scholarships at institutes of higher education, funding community healthcare initiatives in Chennai, Bengaluru and Mumbai, and aiding welfare initiatives in remote rural areas and tribal areas in Arunachal Pradesh and Odisha. The Foundation also sponsored programs providing for the care of the destitute in several states. A more detailed report on the Foundation''s activities during fiscal 2015 forms part of the Infosys Foundation''s report and is available on our website, www.infosys.com.

We would like to thank the honorary trustees of the Foundation, who continue to devote their valuable time and energy in planning, directing and monitoring its activities.

Infosys Foundation USA

The Infosys Foundation USA''s (''the Foundation'') proposed charter was approved by the CSR Committee of the Board in January 2015 with a focus on bridging the digital divide in the U.S. The trustees of Infosys Foundation USA are Vandana Sikka (Chairperson), Sudha Murty and Sandeep Dadlani. The Foundation is committed to making quality computing education widely and easily accessible to everyone - irrespective of exposure, lack of resources, prior skills or proficiency. From enabling computer education in K-12, to supporting research in computer science, and empowering adults with IT training that enhances their employability, the Foundation is on a mission to catalyze a human revolution. An initial outlay of US $10 million was approved for the Foundation''s activities by the CSR committee of the Board. During fiscal 2014-15, the Foundation disbursed US $126,378 towards various CSR activities.

The ACM - Infosys Foundation Award

The ACM, Association for Computing Machinery, and the Infosys Foundation award set up in 2007 recognizes the finest recent innovations by young scientists and system developers in the computing field each year. An endowment from the Infosys Foundation provides financial support for the US $175,000 annual award.

Dan Boneh, professor of Computer Science and Electrical Engineering at Stanford University, won the 2014 award for his contributions to the ground-breaking development of pairing-based cryptography and its application in identity-based encryption. His work established the field of pairing-based cryptography, the dominant area in cryptography for the last decade, by demonstrating the use of pairing functions to solve wide variety of problems in cryptography. Boneh, with Matt Franklin, showed how pairings could be used to develop a fully functional identity-based encryption scheme (IBE). This ushered in a whole new area of cryptography research to which Boneh''s contributions have been central. IBE makes security mechanisms easier to use and deploy, and improves computer security to keep data, devices and critical systems safe, private and accessible.

Sustainability initiatives

Our sustainability charter is driven by our core values and ethics. Our sustainability actions encompass economic, social and environmental dimensions.

We continue to advocate and influence positive and affirmative sustainability actions across the globe. Our CEO and MD, Dr. Vishal Sikka, and several senior leaders participated in the World Economic Forum in Davos in January 2015, and engaged in discussions with global leaders on this year''s theme, ''The new global context''.

After Infosys became the first IT Company in the world to publish a sustainability report using the Global Reporting Initiative (GRI) G4 comprehensive guidelines in 2014, GRI Focal Point India invited Infosys to co-facilitate workshops to share our learnings.

Working with the community to facilitate larger social development is part of the Infosys culture. It is deeply ingrained in the ethos of the Company and amplified through actions, championed by leaders themselves.

Through our organization-led projects such as Campus Connect, Rural Reach and SPARK, we have successfully harnessed our reach and resources to encourage students in rural India to pursue higher education, provide infrastructure for government schools, and train faculty across schools and colleges. We work closely with educational institutions across the country to improve access to quality education offered in schools and universities.

Infosys also provides a platform for employees to engage in volunteering at our Development Centers (DCs) around the world where they are based. The CSR and Eco Clubs work with local initiatives and are powered entirely by employees in that location.

This year, the Clean India Campaign sparked off a chain of programs — cleanliness of the heart, mind, body, surroundings and neighborhoods — which was rolled out in most of our campuses across India.

On the environmental front, focused efforts on smart building systems, retrofits, new building designs with an effective envelope, and renewable energy, have significantly reduced our energy consumption in the last seven years. We pioneered the radiant cooling technology in India through radiant slab and radiant panel-based cooling systems. We have installed smart water meters across our campuses. We have been persistent in our efforts to ensure reuse, recycling and responsible disposal of waste to minimize the amount of waste going to landfills. In our efforts to achieve our goal of sourcing 100% of our electricity requirements from renewables by fiscal 2018, we have continued to invest in solar energy across our campuses.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure 9 to the Board''s report.

Business Responsibility Report

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for listed entities. In compliance with the said circular, we have provided the BRR as part of our Annual Report. We also publish the Infosys Sustainability Report annually. Our report follows the GRI G4 framework. This is a comprehensive report that covers all aspects of our sustainability activities. The report is audited by an external auditor, Det Norske Veritas Germanischer Lloyd (DNV GL).

Green initiatives

During fiscal 2011, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous years, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.infosys.com.

Electronic copies of the Annual Report 2014-15 and Notice of the 34th Annual General Meeting are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2015 and the Notice of the 34th Annual General Meeting are sent in the permitted mode. Members requiring physical copies can send a request to the Company.

The Company provides e-voting facility to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015. The instructions for e-voting are provided in the Notice.

Infosys Science Foundation

The Infosys Science Foundation (ISF), a not-for-profit trust, was set up in 2009 by Infosys, its founders and a few of its management, to promote research in the sciences. The Infosys Prize, instituted by the ISF, recognizes exemplary research by scholars and scientists connected to India. It hopes to inspire young Indians to choose a vocation in scientific research.

The prize categories and the names of the winners of the Infosys Prize 2014 are as follows :

Category Winners

Engineering and Prof. Jayant Haritsa Computer Science Indian Institute of Sdence India

Humanities Prof. Shamnad Basheer Increasing Diversity by Increasing Access / SpicyIP India Life Sciences Prof.Shubha Tole

Tata Institute of Fundamental Research, India Mathematical Prof. Madhu Sudan

Sciences Massachusetts Institute of Technology / Microsoft, U.S.

Physical Sciences Dr. Srivari Chandrasekhar

Council of Scientific and Industrial Research — Indian Institute of Chemical Technology, India Social Sciences Prof. Esther Duflo Massachusetts Institute of Technology/ Abdul Latif Jameel Poverty Action Lab, U.S.

The Infosys Prize 2014 presentation ceremony was held in Kolkata at Taj Bengal on January 5, 2015. The President of India, Pranab Mukherjee, congratulated the winners and sent a video address that was played at the ceremony. The Chief Guest, Nobel Laureate economist, Prof. Amartya Sen, felicitated the laureates in the six categories with a 22 karat gold medal, a citation and a prize purse of Rs. 65 lakh, tax-free in India. The prize money was increased from Rs. 55 lakh to Rs. 65 lakh this year. ISF also hosts the Infosys Science Foundation lectures (nationwide public talks by jurors and laureates of the Infosys Prize on their work), school events and contests in the hope of capturing the attention and imagination of the youth. In keeping with its mission of popularizing science in India, the ISF instituted a new program, Gnanadeepa, to train middle-school mathematics and science teachers from rural areas. Held at Infosys, Mysuru, the pilot initially targeted 500 government school teachers in Karnataka and was attended by over 630 participants from all 34 educational districts in the state. For more details on the activities and the trustees of the Infosys Science Foundation, visit our website, www.infosys-science-foundation.com.

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Indore, Jaipur, Mangaluru, Mysuru, Nagpur, Noida, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

K. V. Kamath Dr.Vishal Sikka R. Seshasayee

Chennai Chairman Chief Executive Officer and Director April 24, 2015 Managing Director


Mar 31, 2014

We are delighted to present the report on our business and operations for the year ended March 31, 2014.

1. Results of our operations

in Rs. crore, except per share data

Particulars Standalone Consolidated 2014 2013 2014 2013

Income from software services and products 44,341 36,765 50,133 40,352

Software development expenses 26,738 21,662 30,804 24,179

Gross profit 17,603 15,103 19,329 16,173

Selling and marketing expenses 2,390 1,870 2,625 2,034

General and administration expenses 2,686 2,218 3,323 2,606

Operating Profit Before Depreciation 12,527 11,015 13,381 11,533

Depreciation and amortization 1,101 956 1,317 1,099

Operating profit 11,426 10,059 12,064 10,434

Other income 2,576 2,215 2,664 2,365

Profit before exceptional item and tax 14,002 12,274 14,728 12,799

Dividend income (1) – 83 – –

Profit before tax 14,002 12,357 14,728 12,799

Tax expense 3,808 3,241 4,072 3,370

Profit for the period 10,194 9,116 10,656 9,429

Surplus – opening balance 25,383 19,993 26,041 20,323

Dividend eliminated on consolidation of trust 13 – 13 15

Reserves on transfer of assets and liabilities of Infosys Consulting India Limited 6 – – –

Reserves on consolidation of trust 50 – – –

Amount available for appropriation 35,646 29,109 36,710 29,767

Dividend

Interim 1,149 862 1,149 862

Final 2,469 1,550 2,469 1,550

Total dividend 3,618 2,412 3,618 2,412

Dividend tax 615 403 615 403

Amount transferred to general reserve 1,021 911 1,021 911

Amount transferred to legal reserve – – 3 –

Surplus – closing balance 30,392 25,383 31,453 26,041

Earnings Per Share (EPS) before exceptional item (2)

Basic 178.39 157.55 186.49 165.01

Diluted 178.39 157.55 186.49 165.01

EPS after exceptional item (2)

Basic 178.39 158.76 186.49 165.01

Diluted 178.39 158.76 186.49 165.01

Notes : The above figures are extracted from the standalone and consolidated financial statements as per Indian GAAP. 1 crore = 10 million

(1) Dividend received of Rs. 83 crore from the wholly-owned subsidiary, Infosys Technologies Australia Pty. Limited, during the year ended March 31, 2013.

(2) Equity shares are at par value of Rs. 5/- each.

Revenues – standalone

Our total income on a standalone basis increased to Rs. 44,341 crore from Rs. 36,765 crore in the previous year, at a growth rate of 20.6%. Our software export revenues aggregated to Rs. 43,063 crore, up by 19.8% from Rs. 35,932 crore in the previous year. Out of the total revenue, 63.1% came from North America, 22.1% from Europe, 2.9% from India and 11.9% from the Rest of the World. On a standalone basis, our share of revenues from all parts of the world outside of North America increased to 36.9% in the current year from 36.2% in the previous year.

Revenues – consolidated

Our total income on a consolidated basis increased to Rs. 50,133 crore from Rs. 40,352 crore in the previous year, at a growth rate of 24.2%. Our software export revenues aggregated to Rs. 48,839 crore, up by 23.6% from Rs. 39,511 crore in the previous year. Out of the total revenue, 60.7% came from North America, 24.4% from Europe, 2.6% from India, and 12.3% from the Rest of the World. A focus of our growth strategy is to expand our business to parts of the world outside North America to diversify our revenues. On a consolidated basis, our share of revenues from all parts of the world outside North America increased to 39.3% in the current year from 37.8% in the previous year.

Profits – standalone

Our gross profit on a standalone basis amounted to Rs. 17,603 crore (39.7% of revenue) as against Rs. 15,103 crore (41.1% of revenue) in the previous year. The Operating Profit Before Depreciation amounted to Rs. 12,527 crore (28.2% of revenue) as against Rs. 11,015 crore (30.0% of revenue) in the previous year. Sales and marketing costs were 5.4% and 5.1% of our revenue for the years ended March 31, 2014 and March 31, 2013, respectively. General and administration expenses were 6.1% and 6.0% of our revenues during the current year and previous year, respectively. The net profit before exceptional item and tax was Rs. 14,002 crore (31.6% of revenue) as against Rs. 12,274 crore (33.4% of revenue) in the previous year.

Profits – consolidated

Our gross profit on a consolidated basis amounted to Rs. 19,329 crore (38.5% of revenue) as against Rs. 16,173 crore (40.1% of revenue) in the previous year. The Operating Profit Before Depreciation amounted to Rs. 13,381 crore (26.7% of revenue) as against Rs. 11,533 crore (28.6% of revenue) in the previous year. Sales and marketing costs were 5.2% and 5.0% of our revenue for the years ended March 31, 2014 and March 31, 2013, respectively. General and administration expenses were 6.6% and 6.5% of our revenues during the current year and previous year, respectively. The net profit before tax was Rs. 14,728 crore (29.4% of revenue) as against Rs. 12,799 crore (31.7% of revenue) in the previous year.

Capital expenditure – standalone

This year, on a standalone basis, we capitalized Rs. 2,381 crore. This comprises Rs. 672 crore for investment in computer equipment, Rs. 3 crore on vehicles and the balance of Rs. 1,706 crore on infrastructure investments.

In the previous year, we added Rs. 1,422 crore including Rs. 96 crore transferred from Infosys Technologies Australia Pty. Limited to our gross block. This comprises Rs. 640 crore for investment in computer equipment, Rs. 30 crore in Intellectual Property Rights, Rs. 1 crore on vehicles, and the balance of Rs. 751 crore on infrastructure investments.

Capital expenditure – consolidated

On a consolidated basis, we capitalized Rs. 2,533 crore in the current year. This comprises Rs. 759 crore for investment in computer equipment, Rs. 11 crore on vehicles, and the balance of Rs. 1,763 crore on infrastructure investments.

In the previous year, we added Rs. 1,556 crore (excluding goodwill of Rs. 1,153 crore) to our gross block. This comprises Rs. 702 crore for investment in computer equipment, Rs. 9 crore in Intellectual Property Rights, Rs. 19 crore on vehicles, and the balance of Rs. 826 crore on infrastructure investments.

Liquidity

We continue to be debt-free and maintain sufficient cash to meet our strategic objectives. We understand that liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity enables us to make a rapid shift in direction, should the market so demand. During fiscal year 2014, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments. As on March 31, 2014, on a standalone basis, we had liquid assets of Rs. 28,149 crore as against Rs. 22,289 crore at the previous year-end. On a consolidated basis, we had liquid assets of Rs. 30,277 crore at the current year-end as against Rs. 23,944 crore at the previous year-end. These funds comprise deposits with banks, highly-rated financial institutions, liquid mutual funds, fixed maturity plans, certificates of deposit, tax-free bonds and government bonds. The tax-free bonds and government bonds are disclosed under non-current investments.

Appropriations

Dividend

Our earlier policy was to pay dividend of up to 30% of the post-tax profits. At the Board meeting held on April 15, 2014, the Board decided to increase the dividend pay-out ratio to up to 40% of post-tax profits effective fiscal year 2014. In October 2013, we paid an interim dividend of Rs. 20/- per share (par value of Rs. 5/- each). We recommended a final dividend of Rs. 43/- per share (par value of Rs. 5/- each), making in all Rs. 63/- per share (par value of Rs. 5/- each), as dividend for the year.

The total dividend pay-out (excluding dividend tax) for the current year is Rs. 3,618 crore as against Rs. 2,412 crore in the previous year. Dividend (including dividend tax) as a percentage of consolidated net profit after tax is 39.7% as compared to 29.9% in the previous year.

The Register of Members and Share Transfer Books will remain closed from May 31, 2014 to June 14, 2014 (both days inclusive) for the purpose of payment of the final dividend for the financial year ended March 31, 2014 and the Annual General Meeting (AGM). The AGM is scheduled to be held on June 14, 2014.

Transfer to reserves

We propose to transfer Rs. 1,021 crore (10% of the standalone net profit for the year) to the general reserve. An amount of Rs. 30,392 crore is proposed to be retained in the Surplus.

Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Management''s discussion and analysis

In terms of the provisions of Clause 49 of the Listing Agreement, the Management''s discussion and analysis is set out in this Annual Report.

2. Business Strategy

During the year, we continued to work on the vision articulated in the Infosys 3.0 strategy and also strengthened focus on our core competence area of Business IT Services (BITS). We also continued to explore and invest in the products and platforms space. Given the very different R&D environment demanded by products and platforms, and the objective of delinking revenues from person-month effort, the Board approved the transfer of the existing Products, Platforms and Solutions business (excluding Finacle) to a wholly-owned subsidiary of Infosys Limited. The new subsidiary has been named Edgeverve Systems Limited. Edgeverve Systems Limited is a related party as defined under the Companies Act, 2013. The transaction requires members'' approval by way of special resolution and hence the Board has decided to seek the members'' approval at the ensuing AGM.

We also introduced a number of strategic initiatives during the fiscal year to spur overall growth and productivity in the Company. The following are some of the broad areas covered by these initiatives :

Cost optimization : A series of measures have been initiated to yield high levels of cost optimization. These include focusing on location optimization, increasing offshore effort ratios, deploying people in the right jobs and eliminating unnecessary costs.

Enhancing sales productivity : We are focusing on reinvigorating our sales teams and enabling them with better systems, training, processes and metrics. This will help us in winning large revenue yielding multi-year outsourcing projects.

Improving delivery effectiveness : Our software delivery has always been of a high order, and we want to re-focus on strengthening it further. We are developing intellectual property (IP)-based solutions to delink revenue from effort and focusing on improving individual work productivity.

Organizational changes

Dynamic challenges faced by businesses today require companies to evolve with changing times to remain competitive. As part of the organizational changes that were implemented during fiscal year 2014, our Board adopted a two-president governance structure for the Company and appointed B. G. Srinivas and U. B. Pravin Rao as Presidents of the Company, reporting to the Chief Executive Officer and Managing Director, S. D. Shibulal, effective January 3, 2014. Following the appointment of the Presidents, the Executive Council ceased to exist with effect from April 1, 2014.

The existing business portfolios have been realigned under the two Presidents. To strengthen our focus on growing existing client relationships and increasing market share through service differentiation and operational agility, changes have been made in our organizational structure. In order to retain industry focus and strengthen client-centric delivery, the operating segments have been provided with integrated sales and delivery functions.

The following are the operating segments : Energy, Communications and Services

- Financial Services

- Growth Markets

- Insurance

- Life Sciences and Healthcare

- Manufacturing

- Resources and Utilities

- Retail, Consumer Packaged Goods and Logistics

Client base

Our client-centric approach has continued to result in high levels of client satisfaction. We derived 97.7% of our consolidated revenues from repeat business. We, along with our subsidiaries, added 238 new clients, including a substantial number of large global corporations. Our total client base at the end of the year stood at 890. The client segmentation for the current and previous years on a consolidated basis is as follows :

in Nos

Clients 2014 2013

1 million dollar 501 448

5 million dollar 232 213

10 million dollar 148 137

20 million dollar 91 80

30 million dollar 70 62

40 million dollar 57 49

50 million dollar 42 40

60 million dollar 38 33

70 million dollar 30 28

80 million dollar 20 19

90 million dollar 17 17

100 million dollar 13 12

200 million dollar 3 3

300 million dollar 1 –

Infrastructure

During the year, we added 51.62 lakh sq. ft. of physical infrastructure space. The total available space as on March 31, 2014 stands at 368.06 lakh sq. ft. The number of marketing offices as on March 31, 2014 was 73, compared to 69 in the previous year.

Subsidiaries

We are a global IT services and consulting company. Our subsidiaries help us deliver end-to-end services to maximize value for our clients. At the beginning of the year, we had 10 direct subsidiaries. During the year, we incorporated Edgeverve Systems Limited and Infosys Americas, Inc. The Honorable High Court of Karnataka sanctioned the scheme of amalgamation of Infosys Consulting India Limited with Infosys Limited with an effective date of August 23, 2013 and an appointed date of January 12, 2012. As on March 31, 2014, we have 11 direct subsidiaries and 25 step-down subsidiaries.

During the year, the Board of Directors reviewed the affairs of the subsidiary companies. As per Section 212 of the Companies Act, 1956, we are required to attach the Balance Sheet, Statement of Profit and Loss and other documents of our subsidiaries. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, exempted companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. The Company has published the audited consolidated financial statements for the fiscal year 2014 and the same forms part of this Annual Report. Accordingly, this Annual Report does not contain the financial statements of our subsidiaries. The Statement pursuant to Section 212 of the Companies Act, 1956, highlighting the summary of the financial performance of our subsidiaries is annexed to this report.

The audited financial statements and related information of subsidiaries are available on our website, www.infosys.com. These documents will also be available for inspection during business hours at our registered office in Bangalore, India.

Products, platforms and solutions

In November 2013, Gartner analyst Susan Tan, in her report, Market Insight : Integrated Platform Solutions are the Next Frontier for IT Services Providers, stated, "Infosys is perhaps the most aggressive of IT services providers in going after the integrated platform solution market." This is a strong endorsement for our Products, Platforms and Solutions group, which operates under the Infosys Edge umbrella. The report also highlights the strengths of our Edge Platform Solutions — providing the client with end-to-end solutions, bundling infrastructure, software license, operations and business process services.

With seven Edge products / platforms and six other product-based solutions and nearly 90 clients, Infosys Edge has developed a key portfolio of strategic investments in products and platforms and has a good mix of horizontal and vertical offerings. This has helped us establish ourselves as a credible IP owner.

Offerings from Infosys Edge

Infosys AssistEdge : This is a customer service experience product for contact centers that provides an integrated service experience across all customer service channels including web, chat, phone and social media. It enables organizations to realize a faster return on investment through improved agent efficiency, reduced call volumes, and quicker go-live periods.

Infosys BrandEdge : This simplifies digital marketing through a comprehensive cloud-based platform that helps enterprises build digital assets and launch marketing campaigns to listen, analyze, and act on customer insights. BrandEdge improves the efficiency of marketing teams and helps drive deeper customer relationships through effective multi-channel conversations.

Infosys Credit Servicing Platform : This solution helps financial institutions manage multiple loans and asset classes across the globe. It manages multiple credit types and asset classes through the complete life cycle — from on-boarding to resolution and closure. Infosys DigitizeEdge : This offering helps enterprises enrich and deliver digital assets through a variety of business models. It helps in conversion, enrichment, and normalization of digital assets to proactively engage with consumers across digital channels, including mobiles and television. This includes Infosys Flypp™ and Digital Transformation offerings.

Infosys InteractEdge : This solution enhances consumer experience for brands and enterprises across all digital touchpoints. It helps them create and manage content, democratize access to content, personalize recommendation of content and products, and finally, build transaction capability from anywhere and for anyone. Infosys ProcureEdge : This helps enterprises realize rapid and sustainable savings across their source-to-pay lifecycle. Delivered in the cloud, ProcureEdge can be deployed rapidly, enabling enterprises to enhance savings, reduce total cost of ownership, and improve supplier performance and compliance.

Infosys TradeEdge : An insight-driven sales platform for global brands to accelerate profitable growth in emerging markets, TradeEdge helps brands know markets better, reach customers faster and drive costs lower. It helps global companies reach billions of new consumers, and increase revenues while reducing non-productive inventory.

Other products and solutions

Our strategic approach to non-linear business growth has resulted in significant investments in products and solutions that generate I P. While our investments in IP have enabled us to accelerate delivery of services, clients have seen huge productivity and time-to-market improvements. Digital services covering cloud, big data, mobility and functional areas such as HR and Commerce are the focus areas for our products and solutions. Some of these are as follows : Infosys BigDataEdge : This solution empowers IT and business teams to quickly discover, analyze and act on information to drive real-time business decisions. It enables real-time discovery of data across both internal systems and external sources.

Infosys Cloud Ecosystem Hub : This helps enterprises create, adopt and manage their hybrid cloud ecosystem. It helps in rapid creation, adoption, and governance of cloud services across the ecosystem. Infosys Commerce Solution : This solution drives multi-channel commerce by enhancing consumer experience, increasing traffic and order value. It enables enterprises to use social interactions to predict, personalize, and enhance the customers'' overall shopping experience. Infosys Talent Management Solution : Our talent management solution enables enterprises to deepen employee engagement and simplify the entire hire-to-retire lifecycle of the human resource function. Infosys mConnect : This is a multi-channel mobile middleware that is designed to optimize user experience across channels and platforms. Infosys Mobile Wallet Solution : This popular product enables the financial ecosystem of consumers, merchants, telecoms, banks, governments and enterprises to process payments.

Finacle®

Finacle partners with banks to simplify banking and arm them with accelerated innovation to build tomorrow''s banks, today. Our solutions address the core banking, e-banking, mobile banking, CRM, payments, treasury, origination, liquidity management, wealth management and Islamic banking requirements of retail, corporate and universal banks worldwide.

In 2013, Infosys was positioned as a leader in Gartner''s International Retail Core Banking report for the seventh time in a row for its Finacle® core banking solution. Finacle 11E is the latest release of the award-winning Finacle® universal banking solution. The solution''s component-based deployment offers banks extreme agility to progressively modernize and meet business priorities, thus helping them realize modernization benefits faster.

As on March 31, 2014, Finacle® is the choice of 183 banks across 84 countries and powers operations across 56,000 branches and enables its customer banks to serve over 599 million accounts and 437 million customers worldwide.

Quality

We continue our journey of delivering value to our clients through significant investments in quality programs. While sustaining existing external benchmarks and certifications, we have added new certifications to deliver greater value to our clients'' businesses.

Infosys is certified under various standards to meet client demands and enhance delivery value. Infosys Limited and Infosys BPO Limited are certified for ISO 22301:2012 Societal Security, Business Continuity Management Systems standards. As part of Infosys'' contract, the Central Processing Center of the Government of India''s Income Tax department was certified for the ISO 15489 Record Management System Standards, making it the first government organization in Asia to attain this certification.

We continue to demonstrate process excellence by adhering to various international quality standard certifications, including ISO 9001:2008, ISO 27001, ISO 20000, AS EN 9100, ISO 13485, TL 9000-SV, OHSAS 18001 and ISO 14001. We have also received an independent auditor''s assurance report on compliance to ISAE 3402 / SSAE16 and a certification of compliance on PCIDSS V 2.0 for Infosys BPO Limited. Infosys McCamish Systems LLC has completed SOC 1 Type II Statement on SSAE 16. This certification confirms that the delivery of operations and IT services for Infosys McCamish''s clients is done with the highest level of security and controls. Apart from this, we continue to get assessed at CMMI level 5. According to the Process Maturity Profile published by the CMMI Institute of Carnegie Mellon

University in September 2013, only 6.6% of 5,944 organizations most recently appraised are operating at Level 5, which is the highest level of CMMI assessment.

Our Quality department handles large change management initiatives to drive quality and productivity improvements across the Company. It is managed through the Balanced Scorecard and Infosys Scaling Outstanding Performance (iSOP) program adopted from the Malcolm Baldridge National Quality Award (MBNQA) framework.

Our Business Value Articulation (BVA) framework ensures alignment of our approaches to deliver and maximize value to our clients. Our Business Value Realization (BVR) program is an initiative comprising frameworks, methodologies, processes and systems to promote articulation and assurance of business value for various engagements. The BVA program helped us have a substantial impact on our clients. We continue to fine-tune our Client Value Survey to capture the voice of our customers, and to assess client expectations as an ongoing process. The data that is collected is analyzed around satisfaction, advocacy, loyalty, fulfillment and value for money. This information is used to draw action plans to improve client experience on an ongoing basis.

Infosys Labs

Our research and development efforts focus on the twin goals of improving productivity and quality of our services, alongside working towards technology-driven innovation and differentiation that will deliver greater value to our clients.

At Infosys Labs, service innovation is being achieved through enhanced automation, optimization, prevention and effective collaboration among distributed teams.

Infosys Labs has established a set of service innovation groups focused on enhancing quality and productivity of six dominant Infosys services — Business Process Outsourcing; Infrastructure Management Services; Independent Validation Services; Application Development and Maintenance including Large Deals; Consulting and Systems Integration; and Modernization. These groups work on service platforms with a focus on automation, optimization, consolidation, and on enhancing the effectiveness of contextual collaboration for distributed teams.

Under its Client Innovation umbrella, Infosys Labs has established six Centers of Excellence (CoE), namely Modernization, Advanced Analytics, Security and Dependability, Advanced Mobility, Experience, and Innovation Co-Creation. The CoEs work towards establishing technology-based client innovation and differentiation through the establishment of Client Innovation Centers, publishing focused technology points of view, implementing proofs of concepts driven by our focus on client value, and conducting client workshops. Additionally, we have set up innovation centers with a number of our clients, university partners, and industry research consortia to drive co-creation.

Infosys Labs focuses on developing significant new intellectual property to enhance the productivity and quality of our services while enabling differentiation in client offerings. During fiscal year 2014, Infosys Labs filed 79 unique patent applications in the United States Patent and Trademark Office (USPTO), the Indian Patent Office and other jurisdictions. On a standalone basis, our research and development expenses for fiscal years 2014, 2013 and 2012 were Rs. 873 crore, Rs. 907 crore and Rs. 655 crore, respectively.

Branding

The Infosys brand is a key intangible asset of the Company. Our brand promise – Building Tomorrow''s Enterprise – communicates the value we bring to our clients. It is the expression of how we provide insights on what is ahead and partner with clients to help them succeed amidst change. We do this by uncovering opportunities to drive new sources of business value through consulting and the co-creation of breakthrough solutions. We enable clients to sustain the advantage by delivering services that drive smarter, more efficient operations. It is the delivery of our brand promise that makes us the right technology partner for clients in over 30 countries. ''Powered by intellect and driven by values'', brand Infosys has been recognized by leading publications and independent industry bodies globally We are regularly rated by global industry analysts as a leader in key services and solutions across domains. Refer to the Awards and recognition section below for more details.

Our marketing reach extends globally through advertisements, web initiatives and social media conversations. We promote our brand through trade and general publications. We participate in premier business and industry events around the world. ''Confluence'', our flagship client event, is consistently well-attended and highly-rated by our clients and industry partners.

Awards and recognition

In fiscal year 2014, as in the previous years, we received a number of awards and recognition from national and international industry bodies and media houses. The significant ones among them are as follows :

Corporate governance and investor relations

- We were voted the best in several categories, including ''Best Overall for Corporate Governance'' and ''Best for Investor Relations'', in Asiamoney''s Annual Corporate Governance Poll 2013.

- We were ranked third globally for corporate governance practices and second best for IR websites in India by IR Global Rankings 2013.

- We topped the 2013 Institutional Investor Rankings among all Indian companies across sectors.

- We were honored in the 2013 Institutional Investor All Asia Rankings.

Banking

- Our flagship banking product, Finacle®, was recognized as a ''Best in Class'' provider by the CEB TowerGroup Mobile Banking Solutions Technology Analysis report.

Finacle® won the prestigious ''Best Core Banking Technology'' award at the Innovation in Technology and Transaction Banking Awards 2013, organized by The Banker.

- Gartner''s International Retail Core Banking report positioned us as a leader for the seventh time in a row for Finacle®.

Healthcare

- Infosys Public Services, Inc. was recognized by Avivia Health from Kaiser Permanente as a strategic partner to develop its innovative gamification platform to improve consumer engagement.

- Infosys Public Services, Inc. has been named in the ''Healthcare''s Hottest Companies for 2013'' list by Modern Healthcare, a leading healthcare publication for senior decision makers.

Application management

- We were positioned as a leader in the Gartner Magic Quadrant for Oracle Applications Management Service Providers worldwide.

- We were named a leader in Gartner''s Magic Quadrant for SAP Application Management Services worldwide.

Technology innovation

- We were positioned in the winners'' circle in HfS Enterprise Analytics Services Blueprint 2013, and recognized for our significant scale in analytics, execution excellence across service areas, and responsiveness to clients.

- We won the Global Telecoms Business Innovation Award with British Telecom.

- We won the 2013 Simulating Reality contest, a global contest for excellence in biomedical engineering, organized by MSC Software. The contest recognized Infosys for its use of next generation technologies for innovation in the area of engineering design.

- We were ranked as a leader in The Forrester Wave™ – Enterprise Mobility Services, Q1 2013 report.

Business process management

- Along with our partners, British Telecom, we won the award for excellence in telecommunication, utilities and hi-tech outsourcing for 2013, given by the National Outsourcing Association (NOA).

- Infosys BPO Limited was positioned in the Leaders category in Everest Group''s Procurement Outsourcing Service Provider Landscape with PEAK Matrix Assessment.

Business and management

- Infosys Edge received the NASSCOM Business Innovation Award 2013.

- We received the Platinum Award at the Asset Excellence in Management and Corporate Awards 2013.

- Infosys China was recognized among the ''Top 10 Global Services Providers'' of 2013 in China at the fifth Annual China Sourcing Summit.

- We were recognized by IBM as Smarter Commerce Business Partner of the Year for Australia and New Zealand.

- We were ranked No. 1 among the best managed companies in Asia Pacific for 2013 in the annual Euromoney ''Best Managed Companies in Asia'' survey

Corporate learning and talent development

- We won the prestigious Global Most Admired Knowledge Enterprise (MAKE) Award 2013 for the ninth successive time. We have won the Asian MAKE Award 11 times in a row.

- We received CorpU''s Learning Excellence and Innovation Award 2013 for our ''Connect Architecture'' program.

- InStep, our global internship program, won the National Council for Work Experience (NCWE) Award.

Sustainability awards

Our sustainability efforts won us several awards and accolades in fiscal year 2014 :

- We won the 2013 Ian Kiernan Award for Corporate Social Responsibility given by the Australian Human Resources Institute. The award recognizes us for our success in enhancing our corporate social responsibility program and becoming more inclusive and meaningful for our staff, beneficiaries and the Australian community

- We were adjudged the runners up at the Green IT Awards 2013 in three categories — Sustainable Design Project of the Year, Team of the Year, and Green IT Magazine Company of the Year.

- We won the Federation of Indian Chambers of Commerce and Industry (FICCI) Business Responsibility Award 2013 in the ''Best Green building'' category for the Software Development Block-1 building in our Hyderabad campus.

- The GreenCo Summit by Confederation of Indian Industry (CII) recognized our outstanding contribution to the Indian Green Building Council initiatives in 2013.

- The Bangalore Chamber of Industry and Commerce honored us for our adoption of best practices in effective management of solid waste in the field of ''Innovation in knowledge sharing on Solid Waste Management''.

- We won the CII National Award, 2013 for Excellence in Energy Management in two categories — Innovative Project and Energy Efficient Unit.

- We won the award for ''Corporate Sustainability Stewardship'' at the 2013 Parivartan Sustainability Leadership Awards.

- We were given the ''Excellence Award'' for the Retrofit Category - Metropolitan City at the Emerson Cup Awards 2013.

- We received a commendation certificate for Significant Achievement at the CII-ITC Sustainability Awards 2013.

- We won the first prize in the buildings category at the National Energy Conservation Awards, 2013.

- We were named a ''2013 Environmental Tracking (ET) Carbon Ranking Leader'' for our disclosure practices and for achieving significant reduction in greenhouse gas emissions.

3. Human resources management

We firmly believe that employee motivation, development, and engagement are key aspects of good human resources management. We provide several forums and communication channels for our employees to not only share their points of view and feedback related to our business, but also share feedback on self-development and career advancement. These forums have helped us identify and implement a number of structural changes during the year. These included compensation revision across the organization, streamlining of compensation structure, quarterly cycles of promotion and progression, and rotation of onsite assignments. Providing opportunities for employees to interact with senior management through innovative interventions such as ''Just-a-Minute'' (JAM) with the Management, town hall events across campuses and priority mailers notifying employees about every organizational change and development are a few of the measures taken to boost communication with employees. Rewarding and recognizing consistent superior performance is essential to build a stronger Infosys. This year, we introduced the ''Fast Track'' program, which is designed exclusively to identify high performers and provide them challenging opportunities to grow faster within the organization.

We have set up a scalable recruitment and human resources management process. Over the last year, we received 9,11,220 applications from prospective employees. We added 24,517 (gross) and 801 (net) employees this year, taking our total strength to 1,27,198 from 1,26,397 at the end of the previous year for Infosys Limited. The Infosys Group added 3,717 (net) and 39,985 (gross) employees this year, taking the total strength to 1,60,405 from 1,56,688 at the end of the previous year.

The attrition rate stands at 18.7% compared to 16.3% for the previous year for Infosys Limited.

Talent fulfillment

During the year, a new function has been established for identifying talent required for new opportunities and recruiting based on competence and performance. Focused training and creating a flexible system for timely placement of the best-fit talent within projects are the main goals of this initiative, which aims ultimately to build a robust supply chain that will yield dividends in the years to come.

Particulars of employees

The table containing the names and other particulars of employees in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is annexed to this report.

Education, Training and Assessment

Competency development continues to be a key area of strategic focus for us. During fiscal year 2014, the total training provided for Infoscions was over 2.13 million person days. Many of our employees also took external certifications, creating a large pool of certified people.

Our flagship industry-academia partnership program, Campus Connect, made significant progress through the launch of electives to help engineering colleges run new programs within their curricula. During fiscal year 2014, we engaged with 1,476 faculty members who in turn trained over 41,000 students. With this, the total number of beneficiaries covered has reached over 10,400 faculty members and over 2,92,000 students from 372 engineering institutions.

SPARK is an academia connect program that exposes students in schools and colleges to the current opportunities and developments in IT and aims to inspire them and raise their aspirations. As part of this program, we engaged with over 36,000 students during the year. Since its launch in 2008, the program has reached over 8,78,000 students. Over 65,000 students participated in Aspirations2020 in fiscal year 2014, the coding contest we conduct for engineering students.

Our knowledge management system set a new record by winning the Global Most Acknowledged Knowledge Enterprise (MAKE) award for the ninth time, the Asian MAKE Award for the 11th time and the Indian MAKE Award for the ninth time.

Infosys Limited is a proud winner in the American Society for Training and Development''s (ASTD) 2013 Best Awards program. We were among 28 organizations from five countries (Canada, India, Taiwan, Turkey and the U.S.) to receive the 2013 Best Award. As in previous years, our researchers continued to demonstrate their thought leadership through their publications / presentations at global conferences and contributions to books and journals.

Infosys Leadership Institute

Our vision for the Infosys Leadership Institute (ILI) is to be a globally recognized institute that promotes and advances the field of leadership development. Over the years, ILI has created several proprietary methodologies, actionable development programs and interventions for leadership development that have been benchmarked with the best. ILI works towards executing business strategies and ensuring that Infosys has ready leaders to take on senior leadership positions.

4. Corporate governance

We continue to benchmark our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and Credit Rating Information Services of India Limited (CRISIL). ICRA has rated our corporate governance practices at CGR 1 and CRISIL has assigned CRISIL GVC Level 1 rating to us.

We comply with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI) in 2002. Our Corporate Governance Report for the fiscal year 2014 forms part of this Annual Report.

We have documented our internal policies on corporate governance. During the year, we continued to comply with the U.S. Sarbanes-Oxley Act, 2002. Several aspects of the Act, such as the Whistleblower Policy and Code of Conduct and Ethics, have been incorporated in our policy.

Board of Directors Inductions

On June 1, 2013, the Board appointed Narayana Murthy as Executive Chairman of the Board. K. V. Kamath stepped down as Chairman of the Board to take up the position of Lead Independent Director. We thank the shareholders for their support in confirming Narayana Murthy''s appointment at the AGM on June 15, 2013.

The Board also re-designated S. Gopalakrishnan as the Executive Vice Chairman of the Board, while S. D. Shibulal continued as the Chief Executive Officer and Managing Director (CEO and MD). On December 20, 2013, the nominations and governance committee recommended the induction of U. B. Pravin Rao as a whole-time director and Kiran Mazumdar-Shaw as an independent member of the Board. U. B. Pravin Rao has been with Infosys Limited since 1986. He has been the Senior Vice President and Global Head of Retail, Consumer Packaged Goods, Logistics and Life Sciences, as well as a member of the Board of Lodestone Holding AG, and heads the ILI. Kiran Mazumdar-Shaw is a globally recognized corporate leader and the Chairman and Managing Director of Biocon Limited. She has been named among TIME magazine''s 100 most influential people in the world.

On April 15, 2014, the nominations and governance committee recommended the induction of Carol M. Browner to the Board. Carol M. Browner is an expert in environmental policy and law and has served as Director of the White House Office of Energy and Climate Change Policy under the Obama administration and before that, in the Environmental Protection Agency under the Clinton administration. We seek your support in confirming the appointments of U. B. Pravin Rao, Kiran Mazumdar-Shaw and Carol M. Browner.

Re-appointments

As per the provisions of the Companies Act, 2013, B. G. Srinivas and S. Gopalakrishnan will retire in the ensuing AGM and being eligible, seek re-appointment. The Board of Directors recommend their re-appointment.

The Companies Act, 2013 provides for appointment of independent directors. Sub-section (10) of Section 149 of the Companies Act, 2013 (effective April 1, 2014) provides that independent directors shall hold office for a term of up to five consecutive years on the Board of a company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the company.

Sub-section (11) states that no independent director shall be eligible for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Act shall not apply to such independent directors.

Our non-executive (independent) directors (except for Kiran Mazumdar-Shaw and Carol M. Browner) were appointed as directors liable to retire by rotation under the provisions of the erstwhile Companies Act, 1956. The Board of Directors has been advised that non-executive (independent) directors so appointed would continue to serve the term that was ascertained at the time of appointment as per the resolution pursuant to which they were appointed. Therefore, it stands to reason that only those non-executive (independent) directors who will complete their present term at the ensuing AGM of the Company in June 2014, being eligible and seeking re-appointment, be considered by the shareholders for re-appointment for a term of up to five consecutive years.

Non-executive (independent) directors who do not complete their term at the ensuing AGM, will continue to hold office till the expiry of their term (based on retirement period calculation) and thereafter would be eligible for re-appointment for a fixed term in accordance with the Companies Act, 2013.

CEO succession

The nominations and governance committee has begun the search to select the successor to S. D. Shibulal, CEO and MD, who has expressed his desire to retire as the CEO and MD of the Company and as a member of the Board either on the date of the last Board meeting before his superannuation — January 9, 2015, or when his successor is ready to assume office, whichever is earlier. The nominations and governance committee is open to evaluating internal and external candidates based on merit. It has appointed Development Dimensions International, a company specializing in internal corporate executive evaluations and Egon Zehnder, an executive search firm, to assist in identifying internal and external candidates respectively.

Retirements and resignations

Leo Puri stepped down as independent member of the Board, with effect from August 14, 2013. This is pursuant to his appointment as Managing Director of UTI Asset Management Co. Ltd. The Board places on record its appreciation for the services rendered by Leo Puri to the Board and the Company.

Ashok Vemuri, Member of the Board, resigned from the services of the Company effective September 12, 2013. The Board would like to thank and record its appreciation for his contribution in building the Company''s market leadership in the Financial Services, Manufacturing verticals and in North America.

In accordance with the retirement policy for the Company''s Board of Directors (attainment of 65 years of age for independent directors appointed to the Board prior to October 15, 2010), Deepak M. Satwalekar, Independent Director, retired from the Board effective November 13, 2013. Deepak M. Satwalekar had joined the Board in October 1997 and the Board would like to thank him for his long and fruitful association with the Company.

V. Balakrishnan resigned from the services of the Company, effective December 31, 2013. V. Balakrishnan had been part of the Infosys journey for 22 years, and the Board conveys its deep sense of appreciation for the services rendered by him during his tenure as the Chief Financial Officer, and then as the Member of the Board in charge of Infosys BPO Limited, Lodestone Holding AG, Finacle, India Business Unit and Global Immigration.

David L. Boyles retired from the Board effective January 17, 2014. David L. Boyles had joined the Board in July 2005 and played an important role, especially in strengthening the Company''s Risk Management framework. The Board thanks him for his insights that have helped the Company immensely.

Directors'' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments, which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013 (to the extent notified), the Companies Act, 1956 (to the extent applicable), and guidelines issued by SEBI. There are no material departures from prescribed accounting standards in the adoption of these standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

The Board of Directors has taken sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 (to the extent applicable) and the Companies Act, 2013 (to the extent notified), to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

5. Auditors

The auditors, B S R & Co. LLP, Chartered Accountants, retire at the ensuing AGM and have confirmed their eligibility and willingness to accept office, if re-appointed.

6. Civil settlements

During the year, the Company completed a civil settlement with the U.S. Department of State, Immigrations and Customs Enforcement and the U.S. Department of Homeland Security relating to I-9 paperwork errors and visa matters that were the subject of investigation by the U.S. Attorney''s Office for the Eastern District of Texas. In the settlement, Infosys agreed to pay Rs. 213 crore (US $34 million) to resolve all allegations. The Company categorically denied claims of systemic visa fraud, misuse of visas for competitive advantage or immigration abuse, and the U.S. Government acknowledged the Company''s commitment to compliance with the immigration laws through its current visa and I-9 practices. No criminal charges or court rulings were brought against the Company. Nor have any limitations been imposed on the Company''s eligibility for federal contracts or access to U.S. visa programs. The Company continues to adhere to all laws, rules and regulations wherever it operates, and take compliance obligations seriously. The Board is happy that the settlement removes the uncertainty of litigation and allows the Company to continue to focus on delivering measurable results for clients.

7. Corporate social responsibility

Over the years, we have been striving to achieve a fine balance of economic, environmental and social imperatives, while also paying attention to the needs and expectations of our internal as well as external stakeholders. Our corporate social responsibility is not limited to philanthropy, but encompasses holistic community development, institution building and sustainability-related initiatives.

As per the Companies Act, 2013, all companies having net worth of Rs.500 crore or more, or turnover of Rs. 1,000 crore or more or a net profit of Rs.5 crore or more during any financial year will be required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising three or more directors, at least one of whom will be an independent director.

Aligning with the guidelines, we have constituted a committee comprising K. V Kamath (Chairperson), R. Seshasayee, Kiran Mazumdar-Shaw and S. D. Shibulal. The committee is responsible for formulating and monitoring the CSR policy of the Company The committee has adopted a policy that intends to :

- Strive for economic development that positively impacts the society at large with a minimal resource footprint.

- Be responsible for the corporation''s actions and encourage a positive impact through its activities on the environment, communities and stakeholders.

CSR activities, as per the provisions of the Companies Act, 2013, can be undertaken by the Company through a registered trust or a registered society In 1996, Infosys set up the Infosys Foundation (''the Foundation'') as a not-for-profit trust. The Foundation will work closely with and support the Board and the committee in our CSR activities. The Foundation will assist the committee in identifying the areas of CSR activities, programs and execution of initiatives as per predefined guidelines. The Foundation will also assist the Board and the committee in reporting progress of deployed initiatives and in making appropriate disclosures (internal / external) on a periodic basis.

Infosys Foundation

Infosys Foundation was established in 1996 as a not-for-profit trust through which we could channelize our social welfare initiatives. Over the years, the Foundation has initiated, guided and conducted several programs in education, healthcare, disaster relief and rural development, and has been successful in bringing about a positive change in the lives of the underprivileged sections of society. The Foundation has also been a major patron of the arts and has supported several endangered art forms.

In fiscal year 2014, the Foundation''s work spanned a wide range of development areas, including offering scholarships to disadvantaged students, funding school buildings and libraries, aiding drinking water projects in remote villages and rehabilitating street children and devadasis (a marginalized community in South India). The Foundation received Rs.9 crore as grant from Infosys Limited in fiscal year 2014. A more detailed report on the Foundation''s activities during fiscal year 2014 forms part of our Sustainability Report, available on our website, www.infosys.com.

We would like to thank the honorary trustees of the Foundation, who continue to devote their valuable time and energy to planning, directing and monitoring its activities.

The Association for Computing Machinery - Infosys Foundation Award

The Association for Computing Machinery – Infosys Foundation Award in Computing Sciences was established in August 2007. ACM (www.acm.org) is the world''s largest educational and scientific computing society, uniting computing educators, researchers and professionals. The Infosys Foundation made an endowment to institute this award, which carries a prize of US $175,000.

David Blei, Associate Professor in the Department of Computer Science at Princeton University, is the recipient of the 2013 ACM-Infosys Foundation Award in Computing Sciences. Prof. Blei initiated an approach to analyzing large collections of data using innovative statistical methods, known as ''topic modeling'', that make it possible to organize and summarize digital archives on a scale that would be impossible through human annotation.

Sustainability initiatives

Our sustainability charter is driven by our core values and ethics. Our sustainability actions are streamlined on the three themes — Social contract, Resource intensity and Green innovation. The highlights of our initiatives on the three themes are as follows :

Social contract

- Fostering innovation in the societies where we operate is important to inspire and celebrate innovators and their innovations. We partnered with TV18, a leading provider of business news on Indian television, to present Innovating for a Better Tomorrow, a unique tele-series that showcased 14 exemplary innovations that have not only transformed the lives of millions of Indians but have made indelible impressions globally.

- Our unique initiative, Health Assessment and Lifestyle Enrichment (HALE) received the silver recognition at the ''Express IT Awards'' 2013.

The Infosys Foundation supported the construction of Isha Vidyalaya School in Tamil Nadu and KIMS Hospital in Hubli, Karnataka, during fiscal year 2014.

- We launched a policy advocacy statement last fiscal year to influence positive and affirmative sustainability actions across the globe.

Resource intensity

- We have set up robust processes to manage greenhouse gases (GHG) effectively. Through constant monitoring and rigorous sustainability practices, we have been able to reduce the Scope 1 and Scope 2 emissions by 59.3% as compared to fiscal year 2008.

Note: Scope 1 covers fuel, hydrochloroflurocarbons, SF6 and emissions from company-owned vehicles and Scope 2 covers electricity.

- We achieved a reduction by 43.6% in our per capita electricity consumption as compared to fiscal year 2008.

- We were able to reduce our water intensity by 34.5% as compared to fiscal year 2008.

- We used 75.6 million units of electricity from renewable sources in fiscal year 2014.

10.1 MW in connected load was reduced through retrofits over the last three years.

- As of fiscal year 2014, 3.4 million sq. ft. of our built-up area has received the highest level of green building rating.

- We installed 2MW of solar photovoltaic plants at our campuses between 2012 and 2014.

Green innovation

- We deployed a Dynamic Storage Tier technology which helped us limit storage infrastructure, accompanying data center power and cooling requirements while increasing the capacity. In addition, it helped improve our enterprise storage performance by 95% with cost savings and performance improvements.

- Our research labs, Infosys Labs, developed the Infosys Electronic Signature Solution (iESS) that enables easy and seamless integration of digital signature support into enterprise approval workflows replacing the need for manual signatures. This has not only reduced paper usage for some of our government and banking clients, but has also enhanced security and regulatory compliance.

- We also revisited our model of handling customer-loaned assets constituting equipment to the tune of US $1.5 billion, which traditionally had to be shipped back at the end of project closure. By liaising with the government for necessary policy changes and building internal processes and checks, we were able to change the utilization drastically. The cost of shipping the assets back was eliminated for the client, and our ability to scale infrastructure was improved. We were able to enhance our loaned asset reconciliation for disposal as e-waste, and achieve reduction in energy and fuel expenditure.

- Our investments on research on Internet of Things (IoT), along with COMMIT, a public-private research community, has helped in creating wearable technology that can potentially be used in areas such as assisted living, remote monitoring of the elderly and monitoring safety of personnel working in hazardous environments.

A detailed report on our sustainability initiatives and actions is available on our website, www.infosys.com.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are annexed to this report.

Business Responsibility Report

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for listed entities. In compliance with the said circular, we have provided the BRR and the same forms part of this Annual Report.

We also publish the Infosys Sustainability Report annually. Our report follows the Global Reporting Initiative (GRI) framework. This is a

comprehensive report that covers all aspects of our sustainability activities divided into the three focus areas — Social contract, Resource intensity and Green innovation. The report is audited by an external auditor, Det Norske Veritas Germanischer Lloyd (DNV GL).

Green initiatives

During fiscal year 2011, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous years, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.infosys.com.

Electronic copies of the Annual Report 2014 and Notice of the 33rd AGM are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2014 and the Notice of the 33rd AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.

The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting is provided in the Notice.

Infosys Science Foundation

The Infosys Science Foundation (ISF), a not-for-profit trust, was set up in 2009 by Infosys, its Founders and a few of its management personnel to promote research in the sciences. The ISF celebrated its fifth anniversary this year. The Infosys Prize, instituted by the ISF, recognizes exemplary research by scholars and scientists connected to India. It hopes to inspire young Indians to choose a vocation in scientific research.

The prize categories and the names of the winners for 2013 in each category are as follows :

Category Subjects 2013 Winners

Engineering and Computer Science All branches of Engineering Dr. V Ramgopal Rao

Humanities Archaeology, History, Philosophy, Legal Theory Prof. Nayanjot Lahiri (Archaeology) and Literary Studies Prof. Ayesha Kidwai (Linguistics)

Life Sciences Biology, Medicine and Plant Science Dr. Rajesh Gokhale

Mathematical Sciences Mathematics and Statistics Prof. Rahul Pandharipande

Physical Sciences Earth Sciences, Physics and Chemistry Prof. Shiraz Naval Minwalla

Social Sciences Anthropology, Economics, Political Science, Prof. Aninhalli R. Vasavi Psychology and Sociology

The Infosys Prize 2013 presentation was held in Bangalore on February 8, 2014. Kofi A. Annan, former Secretary-General of the United Nations (1997-2006), felicitated the laureates with a 22-karat gold medallion and a citation each and a prize purse of Rs.55 lakh per category (the prize money was increased from Rs.50 lakh to Rs.55 lakh this year). Kofi Annan released a book, Encouraging the Spirit of Research, compiled by the ISF to commemorate the five-year milestone and celebrate the work of 31 laureates. The simple language and the graphic story concept used in the book are intended to help students and non-academic people understand and access groundbreaking and seminal research.

ISF also hosts lectures by its laureates and jury members to spread awareness about the interesting research they are working on. They also host school events and contests to capture the attention and imagination of the youth. For more details, visit www.infosys-science-foundation.com.

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) – Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Indore, Jaipur, Mangalore, Mysore, Nagpur, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

S. Gopalakrishnan S. D. Shibulal

Bangalore Executive Vice Chairman Chief Executive Officer and

April 15, 2014 of the Board Managing Director


Mar 31, 2013

To the members,

The are delighted to present the report on our business and operations for the year ended March 31, 2013.

1. Results of our operations

in Rs. crore, except per share data 2013 2012

Income from software services and products 36,765 31,254

Software development expenses 21,662 17,835

Gross profit 15,103 13,419

Selling and marketing expenses 1,870 1,453

General and administration expenses 2,218 1,905

Operating Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) 11,015 10,061

Interest - -

Depreciation 956 794

Operating profit 10,059 9,267

Other income 2,215 1,829

Net profit before exceptional item and tax 12,274 11,096

Dividend income (1) 83 578

Net profit before tax 12,357 11,674

Provision for taxation 3,241 3,204

Net profit after tax and exceptional item 9,116 8,470

Profit and Loss account balance brought forward 19,993 15,591

Intercompany dividend - -

Reserves on termination of Infosys Consulting Inc. - (84)

Amount available for appropriation 29,109 23,977

Dividend

Interim 862 862

Special dividend - 574

Final 1,550 1,263

Total dividend 2,412 2,699

Dividend tax 403 438

Amount transferred to general reserve 911 847

Balance in Profit and Loss account 25,383 19,993

Earnings Per Share (EPS) before exceptional item (2)

Basic 157.55 139.07

Diluted 157.55 139.06

EPS after exceptional item (2)

Basic 158.76 147.51

Diluted 158.76 147.50

Notes: 1 crore = 10 million

(1) Dividend received of Rs. 83 crore and Rs. 578 crore from the wholly-owned subsidiary, Infosys Australia Pty Limited, during the years ended March 31, 2013 and March 31, 2012, respectively

(2) Equity shares are at par value of Rs.5/- each.

2. Business

Our total income increased to Rs. 36,765 crore from Rs. 31,254 crore in the previous year, at a growth rate of 17.6%. Our software export revenues aggregated to Rs. 35,932 crore, up by 17.8% from Rs. 30,514 crore in the previous year. Out of the total revenue, 63.8% came from North America, 21.8% from Europe, 2.3% from India and 12.1% from the Rest of the World. Our revenues from India have increased to Rs. 833 crore from Rs. 740 crore, with a growth rate of 12.6%. The share of the fixed-price component of the business was 40.0%, compared to 39.3% during the previous year.

Our gross profit amounted to Rs. 15,103 crore (41.1% of revenue) as against Rs. 13,419 crore (42.9% of revenue) in the previous year. The Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs. 11,015 crore (30.0% of revenue) as against Rs. 10,061 crore (32.2% of revenue) in the previous year. Sales and marketing costs were 5.1% and 4.6% of our revenue for the years ended March 31, 2013 and March 31, 2012, respectively. General and administration expenses were 6.0% and 6.1% of our revenues during the current year and previous year, respectively. The net profit before exceptional item and tax was Rs. 12,274 crore (33.4% of revenue) as against Rs. 11,096 crore (35.5% of revenue) in the previous year. We seek long-term partnerships with our clients that will enhance their value while addressing their IT requirements. Our client-centric approach has resulted in high levels of client satisfaction. We derived 97.8% of our consolidated revenues from repeat business. We, along with our subsidiaries, added 235 new clients, including a substantial number of large global corporations. The total client base at the end of the year stood at 798. The client list for the current and previous years on a consolidated basis are as follows :

in Nos.

2013 2012

Million-dollar clients 448 399

Five-million-dollar clients 213 190

Ten-million-dollar clients 137 132

Twenty-million-dollar clients 80 79

Thirty-million-dollar clients 62 64

Forty-million-dollar clients 49 50

Fifty-million-dollar clients 40 40

Sixty-million-dollar clients 33 28

Seventy-million-dollar clients 28 23

Eighty-million-dollar clients 19 17

Ninety-million-dollar clients 17 16

Hundred-million-dollar clients 12 13

Two Hundred-million-dollar clients 3 2

Three Hundred-million-dollar clients - 1

During the year 2012-13, we added 23.11 lakh sq. ft. of physical infrastructure space. The total available space as on March 31, 2013 stands at 316.44 lakh sq. ft. The number of marketing offices as at March 31, 2013 was 69 as compared to 65 in the previous year.

3. Subsidiaries

During the year under review, we entered into share purchase agreement with Lodestone Holding AG to purchase 100% shareholding in Lodestone Holding AG, as a result of which Lodestone Holding AG has become a 100% wholly-owned subsidiary of Infosys Limited. The cost of acquisition is CHF 311 million. Lodestone Holding AG, headquartered in Zurich, is a global consulting firm advising international companies on strategy and process optimization as well as IT transformation. With a value-integration approach, Lodestone Holding AG pursues a combination of management and IT consulting. Founded in 2005, the firm has presence in 17 countries across five continents. Lodestone Holding AG''s advisory services are primarily geared to the life science, chemical and financial services industries along with the investment, automotive and consumer goods sectors. We have 10 subsidiaries (excluding step-down subsidiaries) : Infosys BPO Limited; Infosys Technologies (Australia) Pty Limited; Infosys Technologies (China) Co. Limited; Infosys Consulting India Limited; Infosys Technologies S. de R. L. de C. V; Infosys Technologies (Sweden) AB; Infosys Tecnologia do Brasil Ltda; Infosys Public Services Inc.; Infosys Technologies (Shanghai) Co. Limited; and Lodestone Holding AG. We have 26 step-down subsidiaries : Infosys BPO s.r.o.; Infosys BPO (Poland) Sp.Z.o.o; McCamish Systems LLC;

Portland Procurement Services Pty. Limited; Portland Group Pty. Limited; Lodestone Management Consultants (Canada) Inc.; Lodestone Management Consultants Inc.; Lodestone Management Consultants Pty Limited; Lodestone Management Consultants (Asia Pacific) Limited (liquidated); Lodestone Management Consultants AG; Lodestone Augmentis AG; Hafner Bauer & Odman GmbH; Lodestone Management Consultants (Belgium) S.A.; Lodestone Management Consultants GmbH, Austria; Lodestone Management Consultants Pte Ltd.; Lodestone Management Consultants SAS; Lodestone Management Consultants s.r.o; Lodestone Management Consultants GmbH, Germany; Lodestone Management Consultants China Co., Ltd; Lodestone Management Consultants Ltd; Lodestone Management Consultants B.V; Lodestone Management Consultants Ltda; Lodestone Management Consultants sp. z.o.o.; Lodestone Management Consultants Portugal, Unipessoal, Lda; S.C. Lodestone Management Consultants S.R.L; and Lodestone Management Consultants S.R.L.

As per Section 212 of the Companies Act, 1956, we are required to attach the, Balance Sheet, Statement of Profit and Loss and other documents of our subsidiaries. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly the Annual Report 2012-13 does not contain the financial statements of our subsidiaries. Please refer statement pursuant to Section 212 of the Companies Act, 1956 for the summary financial performance of our subsidiaries. The audited financial statements and related information of subsidiaries will be available on our website, www.infosys.com. These documents will also be available for inspection during business hours at our registered office in Bangalore, India.

4. Products and platforms

Infosys Products, Platforms and Solutions (PPS) are geared to drive innovation-led growth for our clients that will power tomorrow''s enterprise, today Combining our market-leading products - Cloud-based hosting and platform operations - our offerings help enterprises accelerate growth, maximize profitability and increase asset efficiency Our PPS offerings have been recognized as an industry best practice for developing and managing software assets by Forrester Research, in a July 2012 report Asset-Based IT Services Shift Service Vendors'' Operating Models.

Our PPS portfolio includes :

Finacle®

Finacle partners with banks to transform process, product and customer experience, arming them with ''accelerated innovation'' that is key to building tomorrow''s bank. Our solutions address the core banking, e-banking, mobile banking, customer relationship management, wealth management, treasury, and Islamic banking requirements of retail, corporate and universal banks worldwide. Keeping up with global trends, Finacle® also offers new-age solutions like digital commerce for enabling cashless transactions and financial inclusion for banking the unbanked. With these offerings Finacle® enables banks to stay ahead of changing customer demands, competition and mounting global regulations as they transform into tomorrow''s banks. The Finacle R&D unit is engaged in research and development of new technologies in the banking domain.

Today Finacle® is the choice of 168 banks across 81 countries and powers operations across 49,600 branches globally It enables its customer banks to serve 447 million accounts and 359 million consumers worldwide. Finacle® is regarded as a leader in the core banking market space by industry analysts for years now. 44% of the banks leveraging Finacle® are among the World''s Top 1000.

Infosys Edge suite of Products and Platforms

Infosys Edge suite of products, platforms and solutions caters to next-generation market needs driven by global trends, including digital consumers, emerging economies, new commerce and healthcare. Our offerings leverage technologies in the areas of cloud computing, mobility, Big Data, rich media and social media. By combining products from us and our partners, Cloud-based hosting and platform operations, we help clients achieve the business outcomes they seek. Infosys Edge is adopted by more than 75 global clients across industries and has also won key industry recognitions.

Products

Our products include :

Infosys AssistEdge : A customer service experience product for contact centers and provides an integrated service experience across channels including web, chat, phone and social media.

Infosys BigDataEdge : Empowers IT and business teams to quickly discover, analyze and act on information to drive real-time business decisions.

Flypp™ : A digital experience product that includes a white-labeled application marketplace which helps our partners actively engage with their consumers across digital channels.

Infosys Customer Self-Service Energy Manager : Helps utilities ensure customer delight through sustainable energy management and revitalized customer service.

SpeedSolve : A collaborative, chat-based customer support product from Infosys and AT&T to reduce call transfer rates, call handle time, and call volumes.

Infosys Digital Transformation : Helps publishers provide their digital consumers with a rich, integrated and seamless content experience. Infosys Meter Data Management Appliance : An out-of-the-box meter data management solution that helps utilities streamline their meter-to-cash process and realize value from their advanced metering infrastructure.

Infosys Account Origination System : Enables enterprise-class customer onboarding with data capture and due diligence capabilities across multiple regulations.

Infosys Alert and Case Management System : Supports end-to-end management of cases, alerts, and exceptions across departments for enterprises.

Infosys Forward Compliance System : Enables enterprises to effectively manage and monitor complex regulatory compliance requirements around Foreign Account Tax Compliance Act (FATCA) and its various Inter-Government Agreements (IGA).

Infosys Trade Origination System : Helps companies strategically differentiate their brokerage services by providing their customers with a superior trading experience.

Infosys Transaction Reconciliation System : Provides end-to-end capabilities for managing the diverse reconciliation needs of an enterprise, from source-loading to exception management and resolution.

Infosys Health Benefit Exchange : A novel, transparent, and competitive insurance hub designed for individuals and small businesses to buy qualified plans.

Infosys iTransform - ICD-10 Migration Suite : A suite designed to automate all stages of migration to ICD-10 and help organizations turn compliance into a competitive advantage.

Note: ICD-10 is the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list by the World Health Organization (WHO).

Infosys mConnect - Multi-channel Mobile Middleware : A middleware that is designed to optimize user experience through its context-aware mobile multimode middleware across channels and platforms. Infosys Omni-channel Personalization Engine : Helps retailers foster consumer relationship by presenting personalized content to their consumers across channels.

Infosys Cloud Ecosystem Hub : Helps enterprises create, adopt and manage their hybrid cloud ecosystem.

Platforms

Our suite of business platforms are built around specific themes that provide significant opportunities to enterprises. This suite drives deeper engagement with digital consumers, builds smarter organizations and addresses the needs of emerging markets. Our offerings are powered by best-in-class domain expertise, IP and cloud computing. Our focus is on delivering guaranteed business outcomes that impact our client''s top-line or bottom-line. We host, operate and manage these business platforms on a subscription-based pricing model, providing our clients with rapid time-to-value.

Our platforms include :

Infosys BrandEdge : Simplifies digital marketing across the organization through a comprehensive Cloud-based platform.

Infosys CommerceEdge : Drives multi-channel commerce by enhancing consumer experience, driving traffic and increasing order value.

Infosys Credit Servicing Platform : An integrated credit servicing and asset management platform, for managing multiple loans and asset classes across the globe for financial institutions.

Infosys IT Asset Performance Management Platform : Maximizes return on IT asset investments by enhancing performance, and mitigating risks while optimizing costs.

Infosys SocialEdge : Helps in monetizing digital demand by harnessing the power of social media to deepen consumer and employee engagement for enterprises.

Infosys Source-to-Pay Platform : Helps enterprises realize rapid and sustainable savings across their source-to-pay lifecycle.

Infosys TalentEdge : Enables enterprises to deepen employee engagement and simplify the entire hire-to-retire lifecycle of the human resource function.

Infosys TradeEdge : Facilitates global companies to accelerate long-term growth and profitability in emerging markets.

Infosys WalletEdge : Enables the financial ecosystem of consumers, merchants, telecoms, banks, governments, and enterprises, to process payments.

Infosys Edge suite of products and platforms has won key industry recognitions. Infosys Cloud Ecosystem Hub won the 2012 Golden Peacock Award for the most innovative product / service. Our Edge suite of platforms won the NASSCOM Business Innovation Award for 2013.

5. Quality

We continue our journey of delivering value to our clients through significant investments in quality programs. We have adopted several external benchmarks and certifications. Infosys is certified under various standards to meet client demands and enhance value delivery. These include TL 9000-SV, ISO 9001, AS EN 9100, ISO 20000, OHSAS 18001, ISO 14001, ISO 27001 and ISO 13485 and SEI CMMi Level 5. Infosys is the first ''IT Services / BPO organization'' in India, covering multiple locations across India, to receive the ISO 22301 accredited certification awarded by British Standards Institution. In addition, Infosys BPO has been certified for SSAE 16 audit standard and PCI-DSS 2.0 standard across different delivery centers. Data centers in India, U.S. and Australia which cater hosting services to us and our clients have been certified for ISO 27001.

Our Quality department handles large change management initiatives to drive quality and productivity improvements across our Company. It is managed through the Balanced Scorecard and Infosys Scaling Outstanding Performance (iSOP) program adopted from the Malcolm Baldrige National Quality Award (MBNQA).

Our Quality department has ensured that process and technology capability is built to deliver the offerings in alignment with our Company strategy. The Quality department has been instrumental in building capability for program management of business transformation, PPS, cloud and mobility service, etc. Further, Quality department has developed accelerators and enablers with integrated methodology, tools and reusable assets. It has also provided service delivery platforms for key offerings.

We continue to fine-tune our ''Business Value Articulation'' (BVA) framework, which ensures alignment of our approaches to deliver and maximize value to our clients. Our ''Business Value Realization'' program is an initiative comprising frameworks, methodologies, processes and systems, to promote articulation and assurance of business value for various engagements. We leveraged this BVA program extensively across services / domains and were able to make a substantial impact on our clients'' business value. The process excellence and transformation program has delivered significant benefit across multiple service lines.

Our Quality department is spearheading various key initiatives and driving excellence across the organization. We proactively adopted the latest external and internal industry best practices. We have institutionalized the incremental and breakthrough improvements by adopting customized programs on Six-sigma and lean methodologies for IT. This has resulted in improving the efficiency and impacted effectiveness in IT services / operations leading to significant savings for our clients.

6. Infosys Labs

Infosys Labs focuses on defining and driving the research and innovation agenda for us. It is a dedicated research group comprising technology and domain-focused members. At Infosys Labs, we have identified large, multidisciplinary problem spaces that embody the challenges faced by our clients and we are creating technology solutions to solve them.

Infosys Labs has set up a ''Center of Innovation for Tomorrow''s Enterprise'' (CITE) which manages the research on the seven core themes for Building Tomorrow''s Enterprise. The themes are focused on Digital Consumers, Emerging Economies, Healthcare Economy, Sustainable Tomorrow, New Commerce, Smarter Organizations and Pervasive Computing.

Our Enterprise Technology Research group focuses on topics such as semantic technology, context aware systems, intelligent sensing, multi-channel convergence, large data modeling and simulation, next generation computing platform visualization, and immersive experiences.

Our Center for Services Innovation focuses on software engineering aspects like software dependability, preventive maintenance, distributed service delivery, modernization and automation and optimization.

Infosys Labs is structured to deliver value to clients and Infosys business groups along the dimensions of Optimization, Transformation and Innovation.

We have set up innovation centers with a number of our clients, university partners, technology partners and industry research consortiums.

We focus on developing Intellectual Property (IP) assets that will enable new and differentiated products, platforms, solutions and services for our business groups.

This year, over 334 articles were published by Infosys Labs'' researchers in leading journals, magazines, books and conference proceedings. Infosys Labs Briefings, our highly respected peer-reviewed journal, published issues in areas such as Big Data and model-based software engineering.

We collaborate with leading national and international universities such as the University of Southern California, University of Cambridge, University of Illinois at Urbana-Champaign, Indian Institute of Technology Bombay - Monash Research Academy, Purdue University, Queens University Belfast, Indraprastha Institute of Information Technology, Delhi, Indian Institute of Science, Bangalore, Indian Institute of Information Technology, Bangalore. Last year, we collaborated with institutions like National ICT Australia (NICTA) and Office of the Chief Scientist of Israel. We are a member of several global research consortia, including India-U.K. Advanced Technology Centre of Excellence in Next Generation Networks, Systems and Services, and Smart Services Cooperative Research Consortium, Australia.

This fiscal, Infosys Labs'' IP Cell filed 97 unique patent applications in the U.S. Patent and Trademark Office (USPTO), the Indian Patent Office and other jurisdictions. The aggregate unique patent applications filed stand at 532 and are under various stages of processing. The total number of patents granted is 87.

7. Branding

The Infosys brand is a key intangible asset of the Company Our brand promise - Building Tomorrow''s Enterprise - communicates the value we bring to our clients. It is the expression of how we provide insight on what''s ahead and then partner with clients to help them transform and thrive in a changing world. We do this by uncovering opportunities for innovation-led growth through strategic consulting and co-creating disruptive solutions. We then enable clients to sustain that advantage with smarter operations. It is the unfailing delivery of our brand promise that makes us the right technology partner for clients, from over 30 countries. The Infosys brand has been recognized by leading publications and independent industry bodies globally. To name just a few, we are :

- Ranked 19 th position in a survey of innovative companies based on an ''innovation premium'' principle of stock market valuation

- Ranked first globally for our corporate governance practices by IR Global Rankings (IRGR)

- Accorded the top position in the National Council for Work Experience (NCWE) Awards 2013, making us one of the U.K.''s best internship providers

- Recognized as one of the ''Achievers 50 Most Engaged Workplaces™'' in the United States (U.S.)

We are regularly rated by global industry analysts as a leader in key services and solutions across domains.

Refer to the Awards and recognition section below for more details.

Our marketing reach extends globally through advertisements, web initiatives and social media conversations. We promote our brand through trade and general publications. We participate in premier business and industry events around the world. Confluence, our flagship client event, is consistently well-attended and highly-rated by our client and industry attendees.

8. Awards and recognition

In 2012-13, as in the years preceding, we earned a number of awards and honors from various industry bodies and media organizations across the globe. Some of the significant awards are :

- Infosys and British Telecom jointly won the prestigious Global Telecoms Business Innovation Award 2012 under the Business Service Innovation category.

- The Infosys - RioTinto relationship won the Outsourcing Excellence Award, for Best New Process / Application from Outsourcing Center, an Alsbridge company

- We were awarded the Pegasystems Excellence in Solution Development Award for the best-in-class insurance service delivery platform.

- Spirit AeroSystems recognized Infosys with the Platinum Award for consistent high-quality engineering services.

- We received the 2012 IT Partner of the Year Award from Analog Devices, a global leader in high-performance semiconductors for signal processing applications.

- The Asian Banker Technology Implementation Awards 2012 awarded Finacle® along with DBS Bank as the Best Core Banking Implementation for Regional and International Banks Award.

- Another Finacle® client, ING Vysya Bank won the Best Corporate Internet Banking Initiative Award.

- Finacle® also jointly won first place in the Core Banking Technology Provider of the Year category at the Banker''s Innovation in Banking Technology Awards, 2012.

- We have been identified as one of the top 25 performers in the Caring for Climate Initiative by United Nations Global Compact (UNGC) and UN Environment Program.

- We have also been recognized as an innovation leader in India in KPMG''s 2012 Global Technology Innovation Survey

- We were recognized as one of the Achievers 50 Most Engaged Workplaces™ in the U.S. for our leadership and innovation towards engaging employees.

- We were ranked second in the 2012 Global Outsourcing 100 List compiled annually by the International Association of Outsourcing Professionals (IAOP) for our performance across all four survey assessment categories, namely, size and growth, customer references, organizational competencies, and management capabilities.

- For the second consecutive year, we have won the P&G Global Business Services Organization''s External Business Partner Excellence Award for the quality of our execution, commitment to relationship and work with P&G''s ecosystem of partners and co-creating innovation.

- Infosys China has been listed among the Top 10 Global Service Providers in China by the China Council for International Investment Promotion for the second consecutive year.

- Infosys BPO won the Award for Innovation in Learning at the Best Learning and Development Awards 2012.

- Infosys BPO won the Golden Peacock HR Excellence Award 2012.

- Infosys BPO won the Award for Institution Building at the Asia Pacific HRM Congress Awards - 2012.

- We were declared the winners of 2012 Asia''s Most Admired Knowledge Enterprises (MAKE) study by Teleos, in association with the KNOW Network for the 10th time, for developing knowledge-based products and services.

- Infosys BPO has been awarded the prestigious 2012 Optimas Award for ''Managing Change'', recognizing exemplary achievements in workforce management and for successfully integrating new employees from around the globe into the organization.

- Infosys BPO won the Gold Award for Marketing Excellence in the category of ''Marketing with Social and Interactive Media'' at the Information Technology Services Marketing Association (ITSMA) Awards 2012.

- We have received the Microsoft Platform Modernization Award for sales achievement for our Legacy Modernization solution, which helps customers migrate to Microsoft platforms.

- We were awarded the National Energy Conservation Award 2012 for our energy conservation efforts at our campuses in Jaipur and Pune.

- Finacle® has been ranked as a long-term leader in the Forrester Wave™, Global Banking Platforms, Q4 2012.

- The Institute of Directors, India, conferred the prestigious Golden Peacock Award to Infosys Cloud Ecosystem Hub, recognizing the Hub as the ''Most Innovative Product / Service'' of 2012.

- The National Association of Software and Services Companies (NASSCOM) presented their prestigious Business Innovation Award for 2013 to Infosys Edge for its original concept, business viability, scalability, R&D investments, and overall impact on the industry.

9. Capital expenditure

This year, we capitalized Rs. 1,422 crore. This comprises Rs. 640 crore (includes Rs. 62 crore transferred from Infosys Australia) for investment in computer equipment, Rs. 30 crore (includes Rs. 21 crore transferred from Infosys Australia) in Intellectual Property rights, Rs. 1 crore on vehicles and the balance of Rs. 751 crore (includes Rs. 13 crore transferred from Infosys Australia) on infrastructure investments. We invested Rs. 145 crore to acquire 119.35 acres of land in Bangalore, Hubli, Mysore, and Thiruvananthapuram.

Last year, we added Rs. 807 crore to our gross block. This comprises Rs. 245 crore for investment in computer equipment (includes Rs. 10 crore transferred from Infosys Consulting Inc., on its termination), Rs. 17 crore in Intellectual Property rights, Rs. 2 crore on vehicles and the balance of Rs. 543 crore on infrastructure investments. We invested Rs. 158 crore to acquire 371 acres of land in Bangalore, Bhubaneswar, Mangalore, Nagpur and Indore.

10. Liquidity

We continue to be debt-free and maintain sufficient cash to meet our strategic objectives. We clearly understand that the liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2013, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments. As at March 31, 2013, we had liquid assets of Rs. 22,289 crore as against Rs. 19,898 crore at the previous year-end. These funds have been invested in deposits with banks, highly-rated financial institutions, liquid mutual funds, certificates of deposit and tax free bonds. The tax free bonds are disclosed under non-current investments.

11. Increase in share capital

During the year, we issued 6,165 shares on the exercise of stock options under the 1999 Employee Stock Option Plans. As a result of this, the outstanding issued, subscribed and paid-up equity shares increased from 57,42,30,001 as at March 31, 2012 to 57,42,36,166 shares as at March 31, 2013.

12. Appropriations Dividend

Our policy is to pay dividend of up to 30% of the consolidated net profit after tax. In October 2012, we paid an interim dividend of Rs. 15/- per share. We recommended a final dividend of Rs. 27/- per share (par value of Rs. 5/- each), making in all Rs. 42/- per share as dividend for the year.

The total dividend amount pay out (excluding dividend tax) for the current year is Rs. 2,412 crore, as against Rs. 2,699 crore in the previous year. The dividend for the previous year includes a special dividend of Rs. 10/- per share for the completion of 10 years of Infosys BPO operations amounting to Rs. 574 crore. Dividend (including dividend tax) as a percentage of consolidated net profit after tax is 29.9% as compared to 29.7% in the previous year.

The register of members and share transfer books will remain closed from June 1, 2013 to June 15, 2013 (both days inclusive). Our Annual General Meeting is scheduled to be held on June 15, 2013.

Transfer to reserves

We propose to transfer Rs. 911 crore (10% of the standalone net profit for the year) to the general reserve. An amount of Rs. 25,383 crore is proposed to be retained in the Statement of Profit and Loss.

13. Corporate governance

We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world.

Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and Credit Rating Information Services of India Limited (CRISIL). ICRA has rated our corporate governance practices at CGR 1 and CRISIL has assigned CRISIL GVC Level 1 rating to us.

We comply with the recommendations of the N. R. Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). For fiscal 2013, the compliance report is provided in the Corporate governance report section of the Annual Report. The auditors'' certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors'' report section.

We have documented our internal policies on corporate governance. In line with the committee''s recommendations, the Management''s discussion and analysis of the financial position of the Company is provided in this Annual Report.

During the year, we continued to fully comply with the U.S. Sarbanes-Oxley Act of 2002. Several aspects of the Act, such as the Whistleblower Policy and Code of Conduct and Ethics, have been incorporated in our Company policy.

14. Listing in NYSE

During the year, we withdrew the listing of our American Depositary Shares (ADSs) from NASDAQ and listed the same in the New York Stock Exchange (NYSE) and NYSE Euronext - London and Paris. The delisting and listing is to leverage the NYSE-Euronext partnership to seek listing in Paris and London stock exchanges which are home to many of our investors, clients and employees. This will also empower our investor base and increase the trading window available for our global investors. We believe this will support our aspirational and strategic goals to grow the Company

15. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to the directors'' report section.

16. Particulars of employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the directors'' report section. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company The same will also be published on our website, www.infosys.com

17. Directors'' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us, and guidelines issued by SEBI on the historical cost convention as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

We have taken sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

18. Directors

The Board inducted Leo Puri as Additional Director with effect from April 11, 2013. We seek your support in confirming his appointment as director liable to retire by rotation.

In accordance with the retirement policy for the Company''s Board, Sridar A. Iyengar retired from the Board effective August 13, 2012. We place on record our deep sense of appreciation for the services rendered by Sridar A. Iyengar during his tenure as a Board member.

As per Article 122 of the Articles of Association, S. D. Shibulal, Srinath Batni, Deepak M. Satwalekar, Dr. Omkar Goswami and R Seshasayee retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, seek re-appointment.

19. Auditors

The auditors, B S R & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

20. Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

21. Human resources management

Our employees are the most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. We have set up a scalable recruitment and human resources management process. We added 22,019 (gross) and 1,333 (net) employees this year (excluding employees transferred within Infosys group companies), taking our total strength to 1,26,397 from 1,24,789 at the end of the previous year. The Infosys Group added 6,694 (net) and 37,036 (gross) employees this year, taking the total strength to 1,56,688 from 1,49,994 at the end of the previous year. Our attrition rate stands at 16.3% compared to 14.7% for the previous year. Over the last year, we received 3,78,994 applications from prospective employees and we continue to remain an employer of choice in the industry.

22. Education and Research

Competency development continues to be a key area of strategic focus for us. We launched new programs for our employees in keeping with the changes in the use of technology in education. We enhanced our technology led training efforts in multiple areas. With over 1,000 videos on various topics and many multimedia artifacts for learning, we now have a rich repository of technology-assisted learning.

During fiscal 2013, the total training provided for Infoscions was over 1.4 million person days. Many of our employees also took external certifications creating a large pool of certified people.

Our flagship industry-academia partnership program, Campus Connect, made significant progress through the launch of electives to help engineering colleges run new programs within their curricula. This has been very well received by the academia.

During fiscal 2013, we engaged with 1,700 faculty members who in turn trained 60,800 students. With this, the total number of beneficiaries covered are over 8,970 faculty members and 2,51,800 students from 358 engineering institutions.

Another program that is a testimony to our commitment to education is SPARK, a program that exposes students in schools and colleges to the current opportunities and developments in IT and aims to inspire them and raise their aspirations. As part of this program, we engaged with over 1,59,800 students during the year. From its launch in 2008, the program has reached over 8,42,000 students. Over 96,570 students participated in Aspirations 2020 in fiscal 2013, the coding contest we conduct for engineering students.

Our knowledge management system set a new record by winning the Global Most Acknowledged Knowledge Enterprise (MAKE) award for the ninth time.

Like previous years, our researchers continued to demonstrate their thought leadership in several areas through their publications at global conferences and through contributions to book chapters and publications.

23. Infosys Leadership Institute

The Infosys Leadership Institute (ILI) was established with an aim to develop world-class corporate leaders. The institute identifies potential candidates and supports the development required to take on key leadership positions within the Company ILI aims to be a globally recognized institution that remains relevant to Infosys while advancing the field with original thought leadership.

Over the last year, ILI has ramped up the team to 15 members in both the Leadership and Organizational Development and Decision Solutions departments.

In fiscal 2013, ILI also showcased thought leadership through collaborations with leading researchers across the globe including pioneering a new evidence-based Charismatic Leadership course in partnership with academic partners.

24. Sustainability initiatives

Our sustainability charter is driven by our core values and ethics. Our sustainability themes and actions are inextricably intertwined in our everyday business practices. Our sustainability actions rest on three pillars viz., Social contract, Resource intensity and Green innovation.

Social contract

Today, businesses have an extended set of stakeholders - local communities, social organizations and the society - with the ability to influence the future of business. These stakeholders have ethical, social and environmental expectations that extend beyond financial goals and legal expectations - implicit social contracts that enterprises must honor. We believe that these social covenants are fundamental to nurturing stakeholder trust and ensuring business continuity.

Education

Campus Connect Program : This Infosys-academia flagship program, is focused on a partnership with engineering colleges, to enhance the pool of highly capable talent for growth requirements in the IT space. Launched in 2004, the Campus Connect program has enabled over 8,970 faculty members and 2,51,800 students across 358 engineering colleges, till date.

Project Genesis : It is an industry-academia partnership program, focused on degree colleges, that enables academicians to handle queries and apprehensions of students about a career in the BPO industry. The objective of this program is to help academicians interact with the student community, informing and updating them on trends and technologies in the IT domain. It covers students from Tier 2 and Tier 3 cities in India, helping to bridge the skill gap between industry requirements and graduate education. Project Genesis has covered 3,200 faculty in 1,700 institutes, involving 1,00,000 students in fiscal 2013.

SPARK Program : SPARK is a volunteer-driven program that aims at raising the aspirations of students and has the following offerings - SPARK-Rural Reach Program, SPARK-Catch Them Young, SPARK- On Campus Events and SPARK-Guru. The nation-wide program creates excitement amongst students about Information Technology (IT), educates them about the role of IT in business, and prepares them for the opportunities that the industry has to offer to the youth in the country. Over 8,42,000 students have benefited from this program since its inception in 2008. The program has involved 35,644 Infosys employees as volunteers, who invested their personal time on Saturdays for these offerings. This year, the SPARK program covered the following beneficiaries :

Particulars FY 2013 Total (1)

Events completed 607 3,577

Students 1,59,827 8,42,167

Girl students 76,212 3,40,802

Rural students 81,757 4,77,904

Faculty enabled 4,613 27,814

Employee volunteers 4,388 35,644

1 The cumulative total since the start of the program until fiscal 2013.

Infosys won NASSCOM''s NExT Practices Awards 2012, the top honor for designing and implementing innovative programs in creating capacity and capabilities for IT and ITeS talent, through its Campus Connect and Project Genesis programs. The award recognizes companies that have been leaders in bridging the industry''s demand-supply gap and addressing employability concerns.

Community development

Promoting the cause of health and hygiene in rural India, the Infosys Foundation invested Rs. 10 crore and started the Parishudh Initiative. We collaborated with over 10 Non-governmental Organizations (NGO) in North Karnataka since its inception 18 months ago. The Parishudh initiative has helped 10,000 families build toilets in over 300 villages and has created opportunities for economic development through entrepreneurial development. Over 20 entrepreneurs have been encouraged to run their own business through this initiative. Over 50,000 people have been benefited by the Parishudh Initiative. We have also been conducting awareness sessions to educate over three lakh families on the need for good hygiene and sanitation. Many policy related changes aimed at the welfare of rural communities have been submitted to the governments of Karnataka and India. Our team has also developed an easily replicable model of project management to scale up this program.

Resource intensity

In the face of accelerated depletion of natural resources, incremental increases in resource efficiency are not sufficient and beyond a point, optimization gets prohibitively expensive. Resource intensity is about doing far more with far less. It is about finding transformational ways to de-intensify and achieve the same or better outcome using fewer resources.

In 2007, we launched our environmental sustainability initiatives and have since taken great strides towards becoming a sustainable organization. We are committed to becoming carbon neutral by 2017. As part of this initiative, the Company has committed to reduce its per capita electricity consumption by 50% over 2007-08 levels by 2017 and source 100% of electricity requirement from renewable resources. In recognition of this, we were listed among top 25 performers in Caring for Climate initiative. Launched by the United Nations Secretary General Ban Ki-moon in 2007, Caring for Climate is the UN Global Compact (UNGC) and UN Environment Programme''s initiative aimed at advancing the role of business in addressing climate change. Caring for Climate is endorsed by nearly 400 companies from 65 countries. We are the only global consulting and technology company to make it into the top 25 performers list. For more information, refer to : http:// www.infosys.com/newsroom/features/pages/caring-climate-initiative.aspx

Green innovation

Business imperatives like environmental sustenance and resource conservation are providing new opportunities for enterprises to leverage and stimulate innovation and spur business growth. Green innovation is about addressing sustainability challenges through innovation, differentiation, driving efficiencies and creating new avenues for growth to become trendsetters.

Infosys Labs, our research and innovation department continues to drive innovation across the seven themes of our strategic direction, Building Tomorrow''s Enterprise through the ''Center for Innovation for Tomorrow''s Enterprise'' (CITE). The institute for research on sustainability is part of CITE and focuses on business research in the area of enterprise sustainability; collaborates with universities and research bodies to bring the latest developments and thinking to our clients; partners with our business units to bring in sustainability aspects in their offerings; and designs new offerings to address enterprise sustainability challenges.

A detailed report on our sustainability initiatives and actions is published in the Business Responsibility Report 2012-13 and Sustainability Report 2012-13. For more details, visit our website, www.infosys.com

25. Employee Stock Option Plan (ESOP)

We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :

1998 Plan 1999 Plan

Total grants authorized by the plan (No.) 1,17,60,000 ADS 5,28,00,000 shares

Pricing formula on date of grant Not less than 90% of fair market value Fair market value

Variation in terms NA NA

Ratio of ADS to equity shares 1 ADS = 1 equity share NA

Options granted during the year (No.) - -

Weighted average price per option granted (Rs.) NA NA

Options vested as at March 31, 2013 (No.) - -

Options exercised during the year (No.) - 6,165

Total number of shares arising as a result of exercise of options - 6,165

Money raised on exercise of options (Rs. crore) - 1.31

Options forfeited and lapsed during the year (No.) - 5,518

Total number of options in force at the end of the year (No.) - -

Grant to senior management - -

Employees receiving 5% or more of the total number of options granted during the year - -

Employees granted options equal to or exceeding 1% of the issued capital - -

Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 (Before exceptional items) 157.55 157.55

Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 (After exceptional items) 158.76 158.76

SEBI has issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight-line basis over the vesting period.

We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where the options are issued to the employees at an exercise price not less than the fair market value. For fiscal 2013 and 2012 there was no stock compensation cost. During fiscal 2013 and 2012, stock options under the 1998 Plan and 1999 Plan have not been granted. Hence, the weighted average fair values of grant during these years are nil.

All stock options under the 1998 and 1999 Employees Stock Option Plans were granted at the prevalent market price on the date of grant. Accordingly, we have calculated the compensation cost arising on account of stock options granted using the intrinsic value method. Hence, the disclosure in terms of Clause 12.1 (n) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not applicable.

2013 2012 No. of options Weighted average No. of options Weighted average exercise price (Rs.) exercise price (Rs.)

1998 Plan

Outstanding at the beginning of the year - - 50,070 683

Forfeited - - (480) 862

Exercised - - (49,590) 734

Outstanding at the end of the year Nil - Nil -

Vested at the end of the year Nil - Nil -

1999 Plan

Outstanding at the beginning of the year 11,683 2,121 48,720 962

Forfeited (5,518) 2,121 (8,185) 430

Exercised (6,165) 2,121 (28,852) 643

Outstanding at the end of the year Nil - 11,683 2,121

Vested at the end of the year Nil - 7,429 2,121

Restricted Stock Unit (RSU) Plan

We have received the approval of our shareholders, through a postal ballot, to implement a RSU Plan. The plan permits the grant of RSU, to certain eligible employees of the Company. The purpose of the RSU Plan is to motivate key employees and encourage them to align their individual aspiration with the objectives of the Company. We have not yet issued any units under the plan during the year ended March 31, 2013.

26. Infosys Science Foundation

The Infosys Science Foundation, a not-for-profit trust, was set up in 2009 by Infosys and some of its management to promote research in the sciences. The Infosys Prize, instituted by the foundation, recognizes exemplary research by scholars and scientists connected to India. It hopes to inspire young Indians to choose a vocation in scientific research.

The prize is given annually across six categories :

Category Areas of accomplishment

Physical Sciences Earth Sciences, Physics and Chemistry

Mathematical Sciences Mathematics and Statistics

Engineering and Computer All branches of Engineering Science

Life Sciences Biology, Medicine and Plant Science

Social Sciences Anthropology, Economics, Political Science, Psychology and Sociology

Humanities Archeology, History, Philosophy, Legal Theory and Literary Studies

The Infosys Prize 2012 presentation was held in New Delhi on January 3, 2013. Dr. Gro Harlem Brundtland, former Prime Minister of Norway and former Director General of the World Health Organization, felicitated the laureates with a 22 karat gold medallion and a citation each and a prize purse of Rs. 50 lakh per category The inaugural Humanities Prize was given jointly in Literary Studies and History For more details about the Infosys Science Foundation, visit our website, www.infosys-science-foundation.com

27. Infosys Foundation

We established the Infosys Foundation in 1996, as a not-for-profit trust to support our social initiatives. The Foundation supports programs and organizations devoted to the welfare of the destitute, rural poor, and economically disadvantaged sections of the society.

The Infosys USA Foundation is active in the areas of Science, Technology, Engineering and Math (STEM) education, and the promotion of arts and culture. The Foundation has committed a grant of US $380,000 for the New York City Science Education Initiative of the New York Academy of Sciences (NYAS). The program is developed in association with the New York City Department of Youth and Community Development (DYCD) to train and mentor students of underserved communities of New York and Citizen Schools of New Jersey in STEM. We have also worked with the Wayne County Community College District (WCCCD) to offer our world-renowned software development training program to grow Detroit''s technology talent pool.

A summary of the work done by the Foundation is provided in the Additional information section in the Annual Report published on our website, www.infosys.com

We express our gratitude to the honorary trustees of the Foundation for contributing their valuable time and energy to its activities.

28. Green initiatives

During fiscal 2011, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous years, this year too we are publishing only the statutory disclosures in the print version of the Annual Report along with the Abridged standalone financial statements prepared in compliance with Section 219 of the Companies Act, 1956 and Clause 32 of the Listing Agreement. Additional details are available on our website, www.infosys.com

29. Business Responsibility Report

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, had proposed to mandate inclusion of Business Responsibility Reports as part of the Annual Report for listed entities. According to the proposal, the report should describe measures taken by the listed companies along with key principles enunciated in the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business'' framed by the Ministry of Corporate Affairs. This is intended to be adopted by companies in India to report their Corporate Social Responsibility (CSR) activities and initiatives. We have always been at the forefront of voluntary disclosures to ensure transparent reporting on all matters related to our Company''s governance and business operations. We had voluntarily published our first Business Responsibility Report 2011-12 based on SEBI''s proposal. This year too, we are publishing the report to cover aspects related to our strategy on CSR, green initiatives and activities taken up for the year 2012-13. The Infosys Business Responsibility Report is available on our website, www.infosys.com

We also publish the Infosys Sustainability Report annually. Our report follows the Global Reporting Initiative (GRI) framework. This is a comprehensive report that covers all aspects of our sustainability activities pertaining to our Social contract, Resource intensity and Green innovation. The report is audited by an external auditor, Det Norske Veritas AS (DNV). We have been consistently receiving an A rating from GRI and DNV for our Sustainability Reports. For more details on the Infosys Sustainability Report, visit www.infosys.com

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Technology Parks (STPs) - Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mysore, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

S. D. Shibulal S. Gopalakrishnan

Bangalore Chief Executive Officer and Executive Co-Chairman

April 12, 2013 Managing Director of the Board


Mar 31, 2012

The are delighted to present the report on our business and operations for the year ended March 31st, 2012.

1. Results of our operations

in Rs crore, except per share data

2012 2011

Income from software services and products 31,254 25,385

Software development expenses 17,835 14,267

Gross profit 13,419 11,118

Selling and marketing expenses 1,453 1,219

General and administration expenses 1,905 1,485

Operating Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) 10,061 8,414

Interest - -

Depreciation 794 740

Operating profit before tax 9,267 7,674

Other income, net 1,829 1,147

Net profit before tax and exceptional item 11,096 8,821

Provision for taxation 3,110 2,378

Net profit after tax and before exceptional item 7,986 6,443

Dividend income, net of taxes (1) 484 _

Net profit after tax and after exceptional item 8,470 6,443

Profit and Loss account balance brought forward 15,591 13,806

Reserves on termination of Infosys Consulting Inc. (84) -

Amount available for appropriation 23,977 20,249

Dividend

Interim 862 574

Special dividend (2) 574 1,722

Final 1,263 1,149

Total dividend 2,699 3,445

Dividend tax 438 568

Amount transferred to general reserve 847 645

Balance in Profit and Loss account 19,993 15,591

EPS before exceptional item (3)

Basic 139.07 112.26

Diluted 139.06 112.22

EPS after exceptional item (3)

Basic 147.51 112.26

Diluted 147.50 112.22

Notes: 1 crore = 10 million

(1) Dividend received of Rs 484 crore, net of taxes of Rs 94 crore from the wholly-owned subsidiary, Infosys Australia Pty. Limited.

(2) 10 years of Infosys BPO operations for 2012 and 30th year special dividend for 2011.

(3) Equity shares are at par value of Rs 5/- each.

2. Business

Our total income increased to Rs31,254 crore from Rs25,385 crore in the previous year, at a growth rate of 23.1%. Our software export revenues aggregated to Rs 30,514 crore, up by 23.1% from Rs 24,791 crore in the previous year. Out of the total revenue, 65.1% came from North America, 21.2% from Europe, 2.3% from India and 11.4% from the Rest of the World.

Our revenues from India have increased from Rs 594 crore to Rs 740 crore, with a growth rate of 24.6%. The share of the fixed-price component of the business was 41.1%, compared to 42.1% during the previous year.

Our gross profit amounted to Rs 13,419 crore (42.9% of revenue) as against Rs 11,118 crore (43.8% of revenue) in the previous year. The Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs 10,061 crore (32.2% of revenue) as against Rs 8,414 crore (33.2% of revenue) in the previous year. Sales and marketing costs were 4.6% and 4.8% of our revenue for the years ended March 31, 2012 and March 31, 2011, respectively. General and administration expenses were 6.1% and 5.8% of our revenues during the current year and previous year, respectively. The net profit after tax before exceptional item was Rs 7,986 crore (25.6% of revenue) as against Rs 6,443 crore (25.4% of revenue) in the previous year. We seek long-term partnerships with our clients that will enhance their value while addressing their IT requirements. Our customer- centric approach has resulted in high levels of client satisfaction. We derived 97.8% of our revenues from repeat business. We, along with our subsidiaries, added 172 new clients, including a substantial number of large global corporations. The total client base at the end of the year stood at 694. The client list for the current and previous years are as follows :

in Nos.

2012 2011

Million-dollar clients 399 366

Five-million-dollar clients 190 187

Ten-million-dollar clients 132 126

Fifty-million-dollar clients 40 28

Hundred-million-dollar clients 13 11

During the year, we added 16.70 lakh sq. ft. of physical infrastructure space. The total available space now stands at 293.33 lakh sq. ft. The number of marketing offices as at March 31, 2012 was 65 as compared to 64 in the previous year.

3. Subsidiaries

We have nine subsidiaries : Infosys BPO Limited, Infosys Technologies (Australia) Pty. Limited, Infosys Technologies (China) Co. Limited, Infosys Consulting India Limited, Infosys Technologies S. de R. L. de C. V, Infosys Technologies (Sweden) AB, Infosys Technologia do Brasil Ltda, Infosys Public Services Inc., and Infosys Technologies (Shanghai) Co. Limited. We have four step-down subsidiaries : Infosys BPO s.r.o., Infosys BPO (Poland) Sp.Z.o.o, McCamish Systems LLC, and Portland Group Pty. Limited. To increase our client relevance and sustain industry leadership, we made organizational changes to the Company and as part of this re-organization we decided to integrate Infosys Consulting Inc. into Infosys Limited. Accordingly, on October 7, 2011, the Board of Directors of Infosys Consulting Inc., approved the termination and winding down of the entity, and entered into a scheme of amalgamation and initiated its merger with Infosys Limited. The termination of Infosys Consulting Inc. became effective on January 12, 2012, in accordance with the Texas Business Organizations Code. Effective January 12, 2012, the assets and liabilities of Infosys Consulting Inc., have been transferred to Infosys Limited. Infosys Consulting India Limited (subsidiary of Infosys Consulting Inc.) is currently in the process of being merged into Infosys Limited. Further, Infosys BPO acquired 100% of the voting interest in Portland Group Pty. Limited, a strategic sourcing and category management services provider based in Australia for a cash consideration of Rs 199 crore. This acquisition was completed during January 2012.

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors' report, Balance Sheet, and Profit and Loss account of our subsidiaries. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2011-12 does not contain the financial statements of our subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable, will be made available on request. The same will be published on our website, www.infosys.com. These documents will also be available for inspection during business hours at our registered office in Bangalore, India.

4. Products and platforms

Our products and platforms are focused on innovation-led business growth for our clients. Our offerings leverage the latest technologies in cloud computing, mobility, big data, rich media and social to provide guaranteed business outcomes.

Products

Finacle

Finacle™ from Infosys is a comprehensive, flexible and fully web- enabled solution that addresses the core, e-banking, mobile, CRM, wealth management, treasury, and Islamic banking requirements of universal, retail and corporate banks worldwide. Finacle™, our universal banking solution, partners with banks worldwide to transform products, processes and customer experience, arming them with 'accelerated innovation' that is the key in building tomorrow's bank. Other offerings include the Finacle Core Banking solution for regional rural banks; Finacle Digital Commerce solution, which enables next generation digital payments; Finacle Alerts solution, which alerts end-users on events recorded by diverse business systems; Finacle Advizor, which combines the convenience of human intervention with banking self-service channels through the interplay of video, audio and data communication; and Finacle WatchWiz, a comprehensive new-generation monitoring solution that allows banks to monitor, diagnose and resolve issues.

Our professional services complement the solutions portfolio and includes consulting, package implementation, independent validation, migration, application development and maintenance, systems integration, software performance engineering and support.

Today, Finacle™ is the choice of 154 banks across 75 countries and powers operations across 48,500 branches. Finacle™ enables its customer banks to serve 423 million accounts and 347 million consumers worldwide. Finacle™ is regarded as a leader in the core banking market space by industry analysts since many years. Today, 42% of the banks leveraging Finacle™ are among the Top 1000.

Finacle™ is one of the most scalable core banking solutions in the world with an unparalleled performance benchmark of 104 million effective transactions per hour for channel (non-branch) transactions and 41 million effective transactions per hour for branch transactions. This year, Finacle™ also sets a new global performance benchmark for Finacle e-banking solution by effectively managing over half a million online transactions and supporting over 2.8 million web page visits, with over 33,000 concurrent users in 30 minutes.

Our other product range includes:

Flypp™ : This is a white-labeled app marketplace that helps our partners to actively engage with their consumers across digital channels.

Infosys Customer Self-Service Energy Manager : This product helps utilities ensure customer delight through sustainable energy management and revitalized customer service.

Infosys Health Benefit Exchange : This is a novel, transparent, and competitive insurance hub designed for individuals and small businesses to buy qualified plans.

Infosys iTrans form - ICD-10 Migration Suite : This suite is designed to automate all stages of migration to ICD-10 and help organizations turn compliance into a competitive advantage.

Infosys mConnect - Multi-Channel Mobile Middleware : This is a middleware that is designed to optimize user experience through its context-aware mobile multimode middleware across channels and platforms.

Infosys Omni-Channel Personalization Engine : This engine that helps retailers foster consumer relationship by presenting personalized content across channels.

Infosys Real-Time Expertise Manager : This system delivers customer delight by making every interaction effective and by providing instant access to expertise.

Infosys Supply Chain Performance Management Suite : This analytical suite gives a 360-degree view of Supply-Demand service chain performance to drive collaborative decision-making.

Infosys Trading Platform : This platform helps to strategically differentiate brokerage services and provide superior trading experience to customers.

Infosys Transaction Reconciliation Platform : This comprehensive operations platform addresses end-to-end reconciliation needs of an enterprise.

Platforms

Our suite of business platforms, Infosys Edge™, is built around specific themes that provide significant opportunities to enterprises. We focus on delivering guaranteed business outcomes. We host, operate and manage these platforms on a subscription-based pricing model, providing our clients with rapid time-to-value. Our platforms include: Infosys Brand Edge™ : This simplifies digital marketing across the organization through a comprehensive cloud-based platform.

Infosys Commerce Edge™ : This helps in driving multi-channel commerce by enhancing consumer experience, driving traffic and increasing order value.

Infosys Credit Servicing Platform : This is an integrated credit servicing and asset management platform, for managing multiple loans and asset classes across the globe.

Infosys IT Asset Performance Management Platform : This helps in maximizing return on IT asset investments by enhancing performance, and mitigating risks while optimizing costs.

Infosys Social Edge™ : This helps in monetizing digital demand by harnessing the power of social media to deepen consumer and employee engagement.

Infosys Source-to-Pay Platform : This helps enterprises realize rapid and sustainable savings across their source-to-pay lifecycle.

Infosys Talent Edge™ : This enables enterprises to deepen employee engagement and simplify the entire hire-to-retire lifecycle of the human resource function.

Infosys Trade Edge™ : This enables global companies to accelerate long-term growth and profitability in emerging markets.

Infosys Wallet Edge™ : This enables a financial ecosystem of consumers, merchants, telecoms, banks, governments, and enterprises, to process payments.

5. Quality

We continue our journey of delivering value to our clients through significant investments in quality programs. We have adopted several external benchmarks and certifications. Infosys is certified under various standards to meet client demands and enhance value delivery. These include TL 9000-SV, ISO 9001, AS EN 9100, ISO 20000, BS25999, OHSAS 18001, ISO 14001, ISO 27001 and ISO 13485. Infosys BPO has been certified for eSCM - SP v 2.0 Level 5, the eSourcing Capability Model for Service Providers developed by a consortium led by Carnegie Mellon University's Information Technology Services Qualification Center. Our Australia and Shanghai centers have been assessed at SEI-CMMi Level 5.

Our Quality department handles large change management initiatives to drive quality and productivity improvements across Infosys. It is managed through the Balanced Scorecard and Infosys Scaling Outstanding Performance (iSOP) program adopted from the Malcolm Baldrige National Quality Award (MBNQA).

We continue to fine-tune our 'Business Value Articulation' framework, which ensures alignment of our approaches to deliver value to our clients. Our 'Business Value Realization' program is an initiative comprising frameworks, methodologies, processes and systems, to promote articulation and assurance of business value for various engagements.

6. Infosys Labs

As part of our strategic direction towards Infosys 3.0, Infosys Labs, our research and innovation arm, has been driving research across the 'Building Tomorrow's Enterprise' (BTE) mega trends that will transform the businesses of our clients. Inspired by the principle of 'Innovation Co-creation', Infosys Labs has been strengthening its innovation ecosystem with clients, partners and industry consortia. Infosys Labs has also continued to focus on service differentiation and developing client-focused business solutions.

Infosys Labs is organized as a global network of research labs and innovation hubs. Our research agenda is driven by our strategic vision of 'Building Tomorrow's Enterprise' and Business Value Realization. We have created a 'Center of Innovation for Tomorrow's Enterprise', which manages seven institutes pertaining to the seven themes of 'Building Tomorrow's Enterprise'. We have identified large, multidisciplinary problem spaces that embody the challenges facing our clients and are creating technological solutions to solve these. The Enterprise Technology Research group focuses on a number of topics including visualization, semantic technology, context aware systems and others. Our research also focuses on the software engineering and services innovation aspects.

We believe that co-creation is the preferred mode of innovation. We have set up innovation centers with a few clients, university partners, technology partners and industry research bodies. We focus on creating affordable solutions for tomorrow's enterprises. Our research also helps in significantly enhancing productivity of our service offerings and helps create new services.

This year, over 119 articles were published by Infosys Labs' researchers in leading journals, magazines and conference proceedings. Infosys Labs Briefings, our highly respected peer-reviewed journal published issues this fiscal year, in areas such as Modern Learning Technologies and Model-based Software Engineering.

Infosys Labs collaborates with leading national and international universities such as the University of Southern California, University of Cambridge, Queensland University of Technology, University of Illinois at Urbana Champaign, Indian Institute of Technology, Bombay

- Monash Research Academy, Purdue University, Indian Institute of Information Technology - Bangalore.

This year, Infosys Labs' Intellectual Property Cell filed 143 unique patent applications in the United States Patent and Trademark Office (USPTO), the Indian Patent Office and other jurisdictions. The aggregate unique patent applications filed stand at 474 and are under various stages of processing. The total granted patents are 47. Out of these, 46 have been granted in the U.S. and one in Luxembourg.

7. Branding

Brand Infosys is one of the most important intangible asset that we own. Our brand's promise, 'Building Tomorrow's Enterprise', unveiled last year, is gaining rapid traction and momentum across markets. We provide comprehensive business solutions that leverage technology and domain expertise to help our clients gain market differentiation and competitive advantage. Our group is well known by the brand, 'Infosys' to all stakeholders and the general public.

We believe the word, 'Technologies' is restrictive for the kind of business we are pursuing today as a transformation partner for our global clients. We are also playing a larger role as a systems integrator by globally aligning with hardware, products and software players. Considering this and to reflect our transition from a provider of technology services to being a transformation partner to our global clients, we changed our name, effective June 16, 2011, from 'Infosys Technologies Limited' to 'Infosys Limited'. The name change was effected following approval by the Board, our shareholders and the Indian regulatory authorities.

Our brand has been recognized by leading publications and independent industry bodies. We were :

- Ranked the World's Most Innovative Companies by Forbes and HOLT, a division of Credit Suisse

- Ranked as one of the Most Admired Thought Leaders in a survey by TLG Communications and Globe Scan

- Conferred Asia's Most Preferred Brands award in the IT category at the Asian Leadership Awards, hosted by the Asian Confederation of Businesses and supported by Stars of the Industry Group

- Ranked among the Greenest Brands for the third consecutive year, in a consumer survey conducted by Cohn & Wolfe, Esty Environmental Partners and Penn Schoen and Berland Associates

- Rated by Global Industry Analysts as a Leader in key services and solutions across domains

We were featured in case studies and articles by leading industry bodies. Forrester Research highlighted Infosys as a Gold Standard in Training and published a case study on our Continuous Education & Learning Programs in their report, The Importance Of Evaluating Your Vendor's Training Capability: What You Need To Know, September 2011. For more details on the report and the award, visit www.infosys.com In India, Business Today rated us at No. 2 in the survey on 'Best Companies to Work For'. In the U.S., we were ranked fourth in this year's Bliss Leap Award among top 50 U.S. companies designated by employees as the happiest places to work for.

We continue to leverage social media platforms to engage with potential employees. This year, our Facebook fans crossed 1,45,000. We promote our brand through targeted publications and at premier events around the world. In addition to a targeted advertising campaign in Forbes and Bloomberg Business Week this year, we maintained a leadership presence at premier industry events like Oracle® Open World and Sapphire. Confluence, our flagship client event held in the U.S. and Europe was well-attended and highly appreciated. We had a strong presence at the World Economic Forum 2012 held in Davos, Switzerland.

8. Awards and recognition

In 2011-12, as in the years preceding, we earned a number of awards and honors from various industry bodies and media organizations across the globe. We were :

- Positioned by Gartner in the leaders quadrant for Oracle application services across Europe

- Winners of the 2011 Global Most Admired Knowledge Enterprises (MAKE) Award, becoming the first and only Indian company to win the award eight times

- Ranked fourth in the 2011 Bliss Leap Awards, instituted by Career Bliss

- Ranked first in all the four categories — Best IR website, Best Online Annual Report, Best Financial Disclosure and Best Corporate Governance Practices — at the 2011 IR Global Rankings in India

- Recognized in the Institutional Investor magazine's 2011 All-Asia Executive Team Rankings

- Winners of the Platinum Award in The Asset Corporate 2010 Awards

- Named a Leader in IT Infrastructure Outsourcing by Forrester

- Adjudged India's best company for corporate governance by the Asia money poll

- Named India's most respected company by Business World

9. Capital expenditure

This year, we capitalized Rs 807 crore. This comprises Rs 245 crore for investment in computer equipment (includes computer equipment having gross book value of Rs10 crore transferred from Infosys Consulting Inc., on its termination), Rs 17 crore in intellectual property rights, Rs 2 crore on vehicles and the balance of Rs 543 crore on infrastructure investments. We invested Rs 158 crore to acquire 371 acres of land in Bangalore, Bhubaneswar, Mangalore, Nagpur and Indore.

Last year, we added Rs 1,017 crore to our gross block excluding Rs 3 crore which was due to movement of land from leasehold to freehold to our gross block. This comprised Rs 251 crore for investment in computer equipment. The balance of Rs 764 crore was due to infrastructure investments along with Rs 2 crore on vehicles. We invested Rs 225 crore to acquire 267 acres of land in Delhi, Bangalore and Mangalore.

10. Liquidity

We continue to be debt-free and maintain sufficient cash to meet our strategic objectives. We clearly understand that the liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2012, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments. As at March 31, 2012, we had liquid assets of Rs 19,898 crore as against Rs 15,284 crore at the previous year-end.

These funds have been invested in deposits with banks, highly rated financial institutions, certificates of deposits and liquid mutual funds.

11. Increase in share capital

During the year, we issued 78,442 shares on the exercise of stock options under the 1998 and 1999 Employee Stock Option Plans. As a result of this, the outstanding issued, subscribed and paid-up equity shares increased from 57,41,51,559 to 57,42,30,001 shares as at March 31, 2012.

12. Appropriations Dividend

Our policy is to pay dividend of up to 30% of the consolidated net profit after tax of the Infosys group.

In October 2011, we paid an interim dividend of Rs 15/- per share. We recommended a final dividend of Rs 22/- per share and a special dividend of Rs 10/- per share on account of completion of 10 years of Infosys BPO operations (par value of Rs 5/- each), making in all Rs 47/- per share as dividend for the year.

The total dividend amount pay out is Rs 2,699 crore, as against Rs 3,445 crore in the previous year. The dividend for the previous year includes the 30th year special dividend of Rs 30 per share amounting to Rs 1,722 crore. Dividend (including dividend tax) excluding special dividend as a percentage of consolidated net profit after tax is 29.7% as compared to 29.3% in the previous year.

The register of members and share transfer books will remain closed from May 26, 2012 to June 9, 2012 (both days inclusive). Our Annual General Meeting is scheduled to be held on June 9, 2012.

Transfer to reserves

We propose to transfer Rs 847 crore (10% of the net profit for the year) to the general reserve. An amount of Rs 19,993 crore is proposed to be retained in the Profit and Loss account.

13. Corporate governance

We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and Credit Rating Information Services of India Limited (CRISIL). ICRA has rated our corporate governance practices at CGR 1. CRISIL has assigned CRISIL GVC Level 1 rating to us.

We comply with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). For fiscal year 2012, the compliance report is provided in the Corporate governance report section of the Annual Report. The auditors' certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors' report section.

We have documented our internal policies on corporate governance. In line with the committee's recommendations, the Management's Discussion and Analysis of the financial position of the Company is provided in this Annual Report.

During the year, we continued to fully comply with the U. S. Sarbanes-Oxley Act of 2002. Several aspects of the Act, such as the Whistleblower Policy and Code of Conduct and Ethics, have been incorporated in our Company policy

14. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to the directors' report section.

15. Particulars of employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the directors' report section. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. The same will also be published on our website, www.infosys.com

16. Directors' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us, and guidelines issued by SEBI on the historical cost convention as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

We have taken sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

17. Directors

During the year, the Board appointed K. V Kamath as the Chairman of the Board, S. Gopalakrishnan as the Executive Co-Chairman of the Board and S. D. Shibulal as the Chief Executive Officer and Managing Director. All of these appointments were effective August 21, 2011. The Board inducted Ann M. Fudge, V Balakrishnan, B. G. Srinivas and Ashok Vemuri as Additional Directors. Further, the Board appointed V Balakrishnan, B. G. Srinivas and Ashok Vemuri as Whole-time Directors of the Company. We seek your support in confirming all of these appointments.

As per Article 122 of the Articles of Association, S. Gopalakrishnan, K. V Kamath, David L. Boyles and Prof. Jeffrey S. Lehman retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, seek re-appointment.

In accordance with the retirement policy for the Company's Board, N. R. Narayana Murthy and Prof. Marti G. Subrahmanyam retired from the Board effective August 20, 2011 and August 23, 2011, respectively We place on record our deep sense of appreciation for the services rendered by N. R. Narayana Murthy and Prof. Marti G. Subrahmanyam during their tenure as Board members.

The Board of Directors appointed N. R. Narayana Murthy as the Chairman Emeritus. This is in recognition of his founding the company. mentoring senior management and nurturing the organization over the last 30 years.

18. Auditors

The auditors, B S R & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

19. Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

20. Human resources management

Our employees are the most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. We have set up a scalable recruitment and human resources management process, which enables us to attract and retain high-caliber employees. We added 16,069 (net), excluding employee transfers of 711 from Infosys Consulting Inc. as a part of its termination, and 33,201 (gross) employees this year, taking our total strength to 1,24,789 from 1,08,009 at the end of the previous year. The Infosys group added 19,174 (net) and 45,605 (gross) employees this year, taking the total strength to 1,49,994 from 1,30,820 at the end of the previous year. Our attrition rate stands at 14.7% compared to 17.0% for the previous year. Over the last year, we received 6,22,971 applications from prospective employees and we continue to remain an employer of choice in the industry.

21. Education & Research

We continue to make significant investments in the learning and development of our employees. This has become even more important given the pace at which things change in our industry. We introduced programs in new technology areas such as Cloud Programming and Mobile Application Development, last year. We enhanced our continuous education programs with a new framework that provides more learning flexibility to our employees. We also launched our collaboration with international business schools for the co-creation and co-delivery of business programs.

During the financial year, the total training provided for Infoscions was over 1.6 million person days. Many of our employees also took external certifications creating a large pool of certified people.

Our flagship industry-academia partnership program, Campus Connect, made significant progress through the launch of electives to help engineering colleges run new programs within their curricula. This has been very well received by the academia. During the financial year, we engaged with 1,500 faculty members who in turn trained 35,000 students. With this, the total number of beneficiaries covered are over 7,200 faculty members and 1,53,000 students from 474 engineering institutions.

SPARK is an Infosys program that exposes students in schools and colleges to the current opportunities and developments in IT and raises their aspirations. As part of this program, we engaged with over 1,30,000 students during the financial year. From its launch in 2008, the program has reached out to over 5,00,000 students. Over 23,000 students participated in Aspirations 2020, the coding contest we conduct for engineering students.

Our knowledge management system set a new record by winning the Global Most Acknowledged Knowledge Enterprise (MAKE) award for the eighth time. We were also awarded the Corporate University (CorpU) Xchange Award 2011 for Campus Connect.

Our researchers demonstrated their thought leadership in several areas through their publications at global conferences and through contributions to book chapters and publications.

22. Infosys Leadership Institute

The Infosys Leadership Institute (ILI) was established with the aim of developing world-class corporate leaders. The institute identifies potential candidates and supports the development required to take on key leadership positions within the Company. The institute aims to be a globally recognized institution that remains relevant to Infosys while advancing the field with original thought leadership.

Over the last year, ILI has engaged in several activities to grow our high potential 'Tier leaders'. ILI deployed the 'Leadership Journey Series' of assessments and conducted coaching sessions to help leaders with their personal development plans. It also developed structured road maps guiding development around the seven key Infosys leadership dimensions, as well as initiatives such as Leading Value Creation. Tier leaders were offered internationally renowned programs on ethical influence and charismatic leadership from globally recognized experts.

In 2011-12, ILI showcased thought leadership through collaborations with leading researchers across the globe. Our blogs in Leaderati and Forbes.com received an unprecedented number of hits. Our team members participated in over 27 conference presentations, publications and keynote presentations.

23. Sustainability initiatives

Sustainability at Infosys has not been limited to the idea of sustainable consumption alone. For us, sustainability has been at the core of our business since inception. Our business philosophy - Predictability, Sustainability, Profitability, and De-risking (PSPD) - has been the underlying and overarching aspect of every business decision that we have made over the past three decades. Our core values and ethics are the bedrock of our sustainability practices. Sustainability themes and actions are inextricably intertwined in our everyday business practices. Sustainability actions at Infosys rest on three pillars viz., Social contract, Resource intensity and Green innovation.

A detailed report on our sustainability initiatives and actions is published in the Infosys Sustainability Report 2011-12. For more details, visit www.infosys.com

Today, enterprises have to honor the expectations of an extended set of stakeholders which includes local communities, social organizations and society in general. The following are some of the significant initiatives that were taken up during the year :

Parishudh : This program focused on improving health and hygiene measures in rural India. It was rolled out in Gulbarga, Bidar, Raichur and Yadgir districts of Karnataka. As part of this program, the Infosys Foundation built over 10,000 toilets in villages at a cost of Rs10 crore. Campus Connect : This program was set up to improve the employability of engineering students. Over 7,200 faculty members and 1,53,000 students were trained through the program. The program has contributed to the World Economic Forum 2011 report, Talent Mobility Good Practices.

SPARK : Launched in 2008, this day-long program is aimed at raising the aspirations of children across the country. The SPARK portfolio includes three programs, Rural Reach Program (RRP), Catch Them Young (CTY) and Spark Guru. RRP encourages children in class five to seven from rural schools to pursue science and mathematics. CTY identifies bright youngsters from urban schools for a two-week exclusive IT training program at Infosys during their school holidays. Spark Guru helps in competency building of school teachers from government and government aided schools. This year, SPARK touched the lives of 3,97,819 students and faculty members.

Beneficiaries in Nos.

Girl students 1,85,533

Rural students 2,66,905

Faculty enabled 8,650

Employee volunteers 10,577

Total 3,97,819

Infosys employee volunteers : We have built an ecosystem primarily driven by leadership, where employees contribute their personal time and money to projects of their choice. Many of our employee- driven volunteer programs have reached out to a large number of beneficiaries. A few significant initiatives that were taken up during the year are :

Notebook Drive 2011-12 : This initiative is aimed at providing stationery items to students of government schools and children from less privileged backgrounds in India.

Green Connect : This is our employee volunteer eco-group at Bangalore. It provides a platform for employees to initiate and engage in activities related to climate change, the ecological balance of our planet and become responsible citizens. The group has over 2,000 active volunteers.

Resource intensity is about finding transformational ways to de-intensify and achieve the same or better outcome using far lesser resources. Since four years, the Green Infrastructure team has made great strides in supporting sustainability at Infosys. By optimizing design, technology and innovation we have significantly decreased our energy and water consumption rates across all campuses. We have reduced our per capita energy consumption by 32% in this year compared to fiscal 2008 when we started our sustainability journey. Our goal now is to be carbon neutral by 2018.

24. Employee Stock Option Plan (ESOP)

We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :

1998 Plan 1999 Plan

Total grants authorized by the plan (No.) 1,17,60,000 ADS 5,28,00,000 shares Pricing formula on date of grant Not less than 90% of fair market value Fair market value

Variation in terms NA NA

Ratio of ADS to equity shares 1 ADS = 1 equity share NA

Options granted during the year (No.) - -

Weighted average price per option granted (Rs ) NA NA

Options vested as at March 31, 2012 (No.) - 7,429

Options exercised during the year (No.) 49,590 28,852

Total number of shares arising as a result of exercise of options 49,590 28,852

Money raised on exercise of options (Rs crore) 3.72 1.86

Options forfeited and lapsed during the year (No.) 480 8,185

Total number of options in force at the end of the year (No.) - 11,683

Grant to senior management - -

Employees receiving 5% or more of the total number of options granted during the year - -

Employees granted options equal to or exceeding 1% of the issued capital - -

Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 (Before exceptional items) 139.06 139.06

Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 (After exceptional items) 147.50 147.50

SEBI has issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period.

We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where the options are issued to the employees at an exercise price not less than the fair market value.

For fiscal 2012 and 2011 there was no stock compensation cost. During fiscal 2012 and 2011, stock options under the 1998 Plan and 1999 Plan have not been granted. Hence, the weighted average fair values of grant during these years are nil.

All stock options under the 1998 and 1999 Employees Stock Option Plans were granted at the prevalent market price on the date of grant. Accordingly, we have calculated the compensation cost arising on account of stock options granted using the intrinsic value method. Hence, the disclosure in terms of Clause 12.1 (n) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not applicable.

2012 2011 No. of options Weighted average No. of options Weighted average exercise price (Rs) exercise price (Rs) 1998 Plan

Outstanding at the beginning of the year 50,070 683 2,42,264 613

Forfeited (480) 862 (3,519) 722

Exercised (49,590) 734 (1,88,675) 600

Outstanding at the end of the year Nil - 50,070 683

Vested at the end of the year Nil _ 50,070 683

1999 Plan

Outstanding at the beginning of the year 48,720 962 2,04,464 869

Forfeited (8,185) 430 (18,052) 964

Exercised (28,852) 643 (1,37,692) 823

Outstanding at the end of the year 11,683 2,121 48,720 962

Vested at the end of the year 7,429 2,121 40,232 717

Restricted Stock Unit (RS U) Plan

During the year, we sought the approval of our shareholders, through a postal ballot, to implement a Restricted Stock Unit (RSU) Plan. The RSU Plan permits the grant of Restricted Stock Units, to certain eligible employees of the Company. The purpose of the RSU Plan is to motivate key employees and encourage them to align their individual aspiration with the objectives of the Company. We have not yet issued any units under the plan.

25. Infosys Science Foundation

The Infosys Science Foundation, a not-for-profit trust was set up to promote research in pure and applied sciences. The Infosys Prize instituted by the foundation endeavors to elevate the prestige of scientific research in India and inspire young Indians to choose a vocation in scientific research. The prize is given annually to honor outstanding achievements of contemporary researchers and scientists across five categories :

Category Areas of accomplishment

Physical Sciences Physics, Chemistry and Earth Sciences

Mathematical Sciences Mathematics and Statistics

Engineering and Computer All branches of Engineering Science

Life Sciences Biology, Medicine and Plant Science

Social Sciences and History, Sociology, Anthropology, Economics Political Science, Economics and International Relations

The Infosys Prize 2011 presentation was held in Bangalore on January 9, 2012. Dr. A. P J. Abdul Kalam, former President of India, felicitated the laureates with a 22 karat gold medallion, a citation and a cash grant of Rs 50 lakh, each.

Expanding the scope of the awards, a sixth category has been introduced for the Infosys Prize 2012. The new category, Humanities, will cover Philosophy, History, Archeology, Linguistics and Literary Studies.

For more details about the Infosys Science Foundation, visit www.infosys-science-foundation.com

26. Infosys Foundation

We established Infosys Foundation in 1996, as a not-for-profit trust to support our social initiatives. The Foundation supports programs and organizations devoted to the cause of the destitute, the rural poor, the mentally challenged, and the economically disadvantaged sections of the society. The Foundation also helps in the promotion of arts and culture. The Infosys USA Foundation has committed a grant of US $380,000 for the New York City (NYC) Science Education Initiative of the New York Academy of Sciences (NYAS). The program is developed in association with the New York City Department of Youth and Community Development (DYCD) to train and mentor students of underserved communities of New York and Citizen Schools of New Jersey in Science, Technology, Engineering and Math (STEM). We have also worked with the Wayne County Community College District (WCCCD) to offer our world-renowned software development training program to grow Detroit's technology talent pool.

A summary ofthe work done by the Foundation is provided in the Additional information section in the Annual Report published on our website, www.infosys.com. On your behalf, we express our gratitude to the honorary trustees of the Foundation for sparing their valuable time and energy for its activities.

27. Green initiatives

During the previous fiscal, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like last year, this year too we are publishing only the statutory disclosures in the print version of the Annual Report along with the Abridged standalone financial statements prepared in compliance with the Section 219 of the Companies Act, 1956 and Clause 32 of the Listing Agreement. Additional details are available on our website, www.infosys.com.

28. Business responsibility report

The Securities Exchange Board of India (SEBI), vide its press release dated November 24, 2011, had proposed that listed entities should submit Business Responsibility Reports as a part of their Annual Reports. According to the proposal, the report should describe measures taken by the listed companies along with key principles enunciated in the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business' framed by the Ministry of Corporate Affairs (MCA). This is intended to be adopted by companies in India to report their CSR activities and initiatives. We have always been at the forefront of voluntary disclosures to ensure transparent reporting on all matters related to our Company's governance and business operations. We have decided to publish our first Business Responsibility Report this year based on SEBI's proposal. The report covers our philosophy on corporate social responsibility, initiatives and activities taken up as part of this philosophy for the year 2011-12. The Infosys Business Responsibility report will be available on our website, www.infosys.com. We also publish the Infosys Sustainability Report annually. Our report follows the Global Reporting Initiative (GRI) framework. This is a comprehensive report that covers all aspects of our sustainability activities pertaining to our social contract, resource intensity and green innovation. The report is audited by an external auditor, Det Norske Veritas AS (DNV). We have been consistently receiving an A rating from GRI and DNV for our Sustainability Reports. For more details on the Infosys Sustainability Reports, visit www.infosys.com.

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the state governments, the Software Technology Parks (STPs) - Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mysore, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

S. D. Shibulal S. Gopalakrishnan

Bangalore Chief Executive Officer and Executive Co-Chairman

April 13, 2012 Managing Director of the Board


Mar 31, 2011

We are delighted to present the report on our business and operations for the year ended March 31, 2011.

1. Results of operations

in Rs. crore, except per share data 2011 2010

Income from software services and products 25,385 21,140

Software development expenses 14,267 11,559

Gross profit 11,118 9,581

Selling and marketing expenses 1,219 974

General and administration expenses 1,485 1,247

Operating profit before interest and depreciation (PBIDTA) 8,414 7,360

Interest – –

Depreciation 740 807

Operating profit before tax 7,674 6,553

Other income, net 1,147 919

Net profit before tax and exceptional item 8,821 7,472

Provision for taxation 2,378 1,717

Net profit after tax and before exceptional item 6,443 5,755

Income on sale of investments, net of taxes (1) – 48

Net profit after tax and after exceptional

item 6,443 5,803

Profit and Loss account balance brought forward 13,806 10,305

Amount available for appropriation 20,249 16,108

Dividend

Interim 574 573

30th year special dividend – interim 1,722 –

Final 1,149 861

Total dividend 3,445 1,434

Dividend tax 568 240

Amount transferred to general reserve 645 580

Amount transferred to capital reserve – 48

Balance in Profit and Loss account 15,591 13,806

EPS before exceptional item (2)

Basic 112.26 100.37

Diluted 112.22 100.26

EPS after exceptional item (2)

Basic 112.26 101.22

Diluted 112.22 101.10

Notes : Rs. 1 crore equals Rs. 10 million.

(1) Income from sale of investments in On Mobile Systems Inc., U.S., net of taxes and transaction costs.

(2) Equity shares are at par value of Rs. 5/- each.

2. Building Tomorrows Enterprise

During the year, we formally launched our new corporate strategy, Building Tomorrows Enterprise to showcase our plan for leading the services industry into the new era as the next generation global consulting and services company. In our journey to increase our client relevance and sustain industry leadership, we have made organizational changes towards creating Infosys 3.0 – a truly global enterprise partner for our clients to drive their transformational, operational and innovation priorities and helping them build their enterprise of the future.

To further our transition towards business-led consulting combined with innovative products and solutions, we have regrouped our existing industry units globally into the following groups :

- Financial Services and Insurance

- Manufacturing

- Energy, Utilities, Communications and Services

- Retail, Consumer Packaged Goods, Logistics and Life Sciences

This transition will enable us to increase our client relevance, strengthen our strategic partnerships with our clients and evolve our business model.

It will help us to sharpen our industry vertical focus, allow us to invest in capabilities to deliver higher business value and align our innovation agenda with that of our clients. The new structure will also significantly expand our global market and provide opportunities for the next generation of leaders.

3. Business

Our total income increased to Rs.25,385 crore from Rs. 21,140 crore in the previous year, at a growth rate of 20.1%. Our software export revenues aggregated to Rs. 24,791 crore, up by 18.8% from Rs. 20,871 crore in the previous year. Out of the total revenue 66.2% came from North America, 20.7% from Europe and 10.7% from the Rest of the World.

Our revenues from India have increased from Rs. 269 crore to Rs. 594 crore, with a growth rate of 120.8% which is higher than that of the other regions. The share of the fixed-price component of the business was 42.1%, compared to 40.8% during the previous year.

Our gross profit amounted to Rs. 11,118 crore (43.8% of revenue) as against Rs. 9,581 crore (45.3% of revenue) in the previous year. The onsite revenues increased from 48.7% in the previous year to 50.2% in the current year. The onsite person-months comprised 26.5% of the total billed efforts, compared to 26.1% during the previous year. The Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs. 8,414 crore (33.1% of revenue) as against Rs. 7,360 crore (34.8% of revenue) in the previous year. Sales and marketing costs were 4.8% and 4.6% of our revenue for the years ended March 31, 2011 and March 31, 2010 respectively. General and administration expenses were 5.8% and 5.9% of our revenues during the current year and previous year respectively. The net profit after tax was Rs. 6,443 crore (25.4% of revenue) as against Rs. 5,803 crore (27.5% of revenue) in the previous year. The net profit for the previous year includes income from sale of investments in OnMobile Systems Inc., U.S., of Rs. 48 crore, net of taxes and transaction costs.

We seek long-term partnerships with our clients that enhance their value while addressing their IT requirements. Our customer- centric approach has resulted in high levels of client satisfaction. We derived 98% of our revenues from repeat business. We, along with our subsidiaries, added 139 new clients, including a substantial number of large global corporations. The total client base at the end of the year stood at 620. Further, we have 366 million-dollar clients (338 in the previous year), 187 five-million-dollar clients (159 in the previous year), 126 ten-million-dollar clients (97 in the previous year), 28 fifty-million-dollar clients (26 in the previous year), and 11 hundred-million-dollar clients (6 in the previous year).

During the year, we added 19.86 lakh sq. ft. of physical infrastructure space. The total available space now stands at 276.63 lakh sq. ft. The number of marketing offices as at March 31, 2011 was 64 as compared to 65 in the previous year.

4. Subsidiaries

We have nine subsidiaries : Infosys BPO Limited, Infosys Technologies (Australia) Pty. Limited, Infosys Technologies (China) Company Limited, Infosys Consulting, Inc., Infosys Technologies S. de R. L. de C. V. , Infosys Technologies (Sweden) AB, Infosys Tecnologia do Brasil Ltda, Infosys Public Services Inc., U.S., and Infosys Technologies (Shanghai) Company Limited. We have four step-down subsidiaries : Infosys BPO s.r.o., Infosys BPO (Poland) Sp.Z.o.o, McCamish Systems LLC, and Infosys Consulting India Limited.

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors report, Balance Sheet, and Profit and Loss account of our subsidiaries. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2010-11 does not contain the financial statements of our subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office in Bangalore, India. The same will also be published on our website, www.infosys.com

5. FinacleTM

Finacle™, our universal banking solution, partners with banks across the globe to power their innovation agenda enabling them to differentiate their products and services thereby enhancing customer experience and achieving greater operational efficiency. FinacleTM is a comprehensive, flexible and fully web-enabled solution that addresses the core banking, treasury, wealth management, Islamic banking, consumer and corporate e-banking, direct banking, financial inclusion and mobile banking requirements of universal, retail and corporate banks worldwide. Other offerings in the FinacleTM universal banking solution include the FinacleTM Core Banking solution for regional rural banks; the FinacleTM Alerts Solution, which enables banks to alert end-users on events recorded by diverse business systems; FinacleTM Advizor, which combines the convenience of human intervention with banking self-service channels through the interplay of video, audio and data communication; and FinacleTM WatchWiz, a comprehensive new-generation monitoring solution that allows banks to monitor, diagnose and resolve issues. Our professional services complement the solutions portfolio and include consulting, package implementation, independent validation, migration, application development and maintenance, system integration, software performance engineering and support. These offerings make Finacle™ a strong innovation facilitator, enabling banks to accelerate growth, while maximizing value from their large-scale business transformation. FinacleTM is chosen by 140 banks across 73 countries to power operations across 47,000 branches. Today, FinacleTM enables its customer banks to serve 390 million accounts and 289 million consumers worldwide. Finacle™ is also leading the financial inclusion agenda in India. Of the 82 regional rural banks in the country, 45 have opted to leverage FinacleTM across 9,900 branches. Independent reports by renowned research firms have positioned FinacleTM among the leaders in the global evaluation of retail core banking solution vendors. Finacle™ is one of the most scalable core banking solutions in the world with an unparalleled performance benchmark of 104 million effective transactions per hour for channel (non-branch) transactions and 41 million effective transactions per hour for branch transactions.

6. Quality

We continue our journey of delivering value to our clients through significant investments in quality programs. In September 2010, an enterprise-wide CMMi assessment was conducted by an SEI-certified high-maturity appraiser, and we were assessed at CMMi Level 5. This is the highest level of the CMMi assessment. SEI-CMMi

is the Carnegie Mellon Software Engineering Institutes Capability Maturity Model, which assesses the quality of an organizations processes and methodologies.

Our Quality department handles large change-management initiatives to drive quality and productivity improvements across the organization and is managed through the Balanced Scorecard and Infosys Scaling Outstanding Performance (iSOP) program.

During the year, the Quality department, in collaboration with multiple stakeholders across the organization, had developed a framework called Business Value Articulation which ensures alignment of our approaches to deliver value to our customers. Some of our key initiatives are :

ENCORE : An initiative to promote reuse and reduce cycle time by creating and deploying reusable technical and business components.

i-Trim : A framework based on lean practices, focusing on eliminating non-compete activities to optimize process performance, addressing business and operational challenges in service delivery.

BrITe : Our customer centric, systematic, data driven methodology to create an impact on the business results and assist in maximizing profits.

Proso++ : An empirical model based on the best practices and execution experience of the delivery teams at Infosys.

We continue to focus on institutionalizing large initiatives. Some of our achievements in the area are listed below :

Infy Swift : Our differentiated methodology for the Global Delivery Model (GDM) to achieve faster time to market.

ESTEEM : This is our Centre of Excellence to enhance estimation maturity for improved predictability and de-risking of our client delivery.

TRANSCEED : Our initiative to enhance program management capabilities, including development of integrated systems and tools, relevant enabling / certification and ecosystem for collaboration / knowledge exchange.

ASCENT : A framework to provide a robust and integrated platform for account management that further facilitates account planning, monitoring and reviews.

PROSPER : A differentiated methodology for driving excellence in production support services.

TIDE : A solution that brings together tools, systems and processes across lifecycle stages and enhances data integrity by capturing accurate data.

We are certified under various standards to meet our client demands and improve value delivery. These certifications include TL 9000-SV, ISO 9001 : 2008, AS EN 9100, ISO 20000, BS25999, OHSAS 18001, ISO 14001, ISO 23026, ISO 27001 and ISO 13485. Infosys BPO has been certified for eSCM – SP v. 2.0 Level 5, the eSourcing Capability Model for Service Providers developed by a consortium led by Carnegie Mellon Universitys Information Technology Services Qualification Center. Our Australia and Shanghai centers have been assessed at SEI-CMMi Level 5 and ISO 27001.

7. Infosys Labs

Infosys Labs, launched as part of our strategic direction Building Tomorrows Enterprise, is responsible for driving innovation across the mega trends identified by us that will transform the businesses of our clients. Building on the successes of the award winning SETLabs, Infosys Labs will focus on the Companys vision and enable customer co-creation, while continuing its focus on service differentiation and developing client-focused business solutions.

Organized as a global network of research labs and innovation hubs, Infosys Labs will :

-Undertake research to define the ideas behind Building Tomorrows Enterprise

- Identify large, multidisciplinary problem spaces that embody the challenges facing our clients and create technological solutions to solve them

- Create client-specific innovation agenda through co-creation and ensure business value realization

- Collaborate with universities and external research labs worldwide

- Leverage global talent

During the year, more than 96 articles were published by Infosys Labs researchers in leading journals, magazines and conference proceedings. SETLabs Briefings, our highly respected peer-reviewed journal, published multiple issues this fiscal year, in areas such as e-Governance, Green IT, Business Platforms for Next-Gen Enterprise Packages, Leveraging IT for Better Performance, Service Oriented Performance, Digital Convergence and Perspectives on Software Engineering. Infosys Labs collaborated with leading national and international universities such as the University of Southern California, Indian Institute of Technology, Bombay – Monash Research Academy Purdue University, IIIT, Hyderabad and IIIT, Bangalore.

During the year, Infosys Labs IP Cell filed 91 patent applications in the United States Patent and Trademark Office (USPTO) and the Indian Patent Office. We now have an aggregate of 357 patent applications pending in India and the U.S. The USPTO has granted us 22 patents.

8. Branding

The Infosys brand is one of the most important intangible assets that we own. As part of the journey towards building a globally respected brand, we recently unveiled our new corporate strategy of Building Tomorrows Enterprise, to position Infosys as a next generation global consulting and IT services company.

During the fiscal year, our brand has been recognized by leading publications and independent industry bodies. We were :

- Ranked as Indias Most Admired Company according to the Wall Street Journal survey

- Voted the Most Admired Indian Company by peers in the Businessworld Most Respected Companies 2011 survey

- Acknowledged by the Harvard Business Review for our best practice in The CEOs Role in Business Model Reinvention

- Awarded the NASSCOM Diversity Award for Innovative Programs

- Awarded the Sustainability Leadership award by India Carbon Outlook

- Awarded the CII National Award for Excellence in Energy Management 2010

Industry analysts rated us as a leader in reports across our key services and markets. The offerings for which we were rated highly include application outsourcing, infrastructure management, Oracle and SAP service providers, comprehensive finance and accounting, business process outsourcing, and for the FinacleTM core banking solution.

We saw a substantial increase in the number of visitors to our website and continued to add to the million-plus visitors to our blogs on business and technology-related topics during the year. Our employees contributed and published several thought leadership articles across various industry forums and publications. We leveraged social media platforms and engaged with our stakeholders and investors on YouTube, SlideShare, Twitter and Facebook.

Leading global publications commended us on our leadership, talent and performance. We continued to have a leadership presence at premier industry events like Oracle® Open World and Sapphire. Our annual client event, Confluence, in the U.S. and Europe were well attended, and highly appreciated. At the World Economic Forum

in Davos, Switzerland, our lunch panel discussion witnessed a full audience and the evening get-together hosted by us was attended by some of the most influential and powerful global business leaders.

9. Awards and recognition

In 2010, as in previous years, awards and recognition marked our accomplishments in various fields. We were :

- The winners of the RMMY Best in Show award for the third year in a row

Among the top 20 global companies to win the Most Admired Knowledge Enterprises (MAKE) Award 2010 Named the best company for corporate governance in the Asiamoney poll

- Ranked among the top 10 value-creating technology and telecommunications companies by the Boston Consulting Group

- The winners (along with Telstra) of the Best ITSM (IT Service Management) Project of the Year, the top industry award given by itSMF Australia

- Voted the best company in management, corporate governance, investor relations, and corporate social responsibility (India) in a survey by FinanceAsia

10. Capital expenditure

During the year, we capitalized Rs. 1,017 crore excluding Rs. 3 crore, which was due to the movement in land from leasehold to freehold to our gross block. This comprises of Rs. 251 crore for investment in computer equipment. The balance of Rs.764 crore was due to infrastructure investment along with Rs. 2 crore on vehicles. We invested Rs. 225 crore to acquire 267 acres of land in Bangalore, Delhi and Mangalore.

During the previous year, we capitalized Rs. 787 crore to our gross block. This comprised of Rs. 140 crore for investment in computer equipment. The balance of Rs. 646 crore was due to infrastructure investment along with Rs. 1 crore on vehicles. We invested Rs. 43 crore to acquire 161 acres of land in Hyderabad, Mysore and Mangalore.

11. Liquidity

We continue to be debt-free, and maintain sufficient cash to meet our strategic objectives. We clearly understand that the liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2011, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments. As at March 31, 2011, we had liquid assets of Rs. 15,284 crore as against Rs. 14,794 crore at the previous year-end.

These funds have been invested in deposits with banks, highly rated financial institutions, certificates of deposits and liquid mutual funds.

12. Increase in share capital

During the year, we issued 3,26,367 shares on the exercise of stock options under the 1998 and 1999 Employee Stock Option Plans. As a result of this, the outstanding issued, subscribed and paid-up equity shares increased from 57,38,25,192 to 57,41,51,559 shares as at March 31, 2011.

13. Appropriations

Dividend

Our policy is to pay dividend of up to 30% of the consolidated net profit after tax of the group.

In October 2010, we paid an interim dividend of Rs. 10/- per share and a 30th year special dividend of Rs. 30/- per share. We recommended a final dividend of Rs. 20/- per share (par value of Rs. 5/- each), making in all Rs. 60/- per share as dividend for the year.

The total dividend amount paid out is Rs. 3,445 crore, as against Rs. 1,434 crore in the previous year. Dividend (including dividend tax) excluding 30th year special dividend as a percentage of consolidated profit after tax is 29.3% as compared to 26.9% in the previous year.

The register of members and share transfer books will remain closed from May 28, 2011 to June 11, 2011 (both days inclusive). Our Annual General Meeting has been scheduled to be held on June 11, 2011.

Transfer to reserves

We propose to transfer Rs. 645 crore (10% of the net profit for the year) to the general reserve. An amount of Rs. 15,591 crore is proposed to be retained in the Profit and Loss account.

14. Corporate governance

We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and Credit Rating Information Services of India Limited (CRISIL). ICRA has rated our corporate governance practices at CGR 1. CRISIL has assigned CRISIL GVC Level 1 rating to us.

We have complied with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). For fiscal year 2011, the compliance report is provided in the Corporate governance section of the Annual Report. The auditors certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors report section.

We have documented our internal policies on corporate governance. In line with the committees recommendations, the Managements Discussion and Analysis of the financial position of the Company is provided in this Annual Report.

During the year, we continued to fully comply with the U.S. Sarbanes- Oxley Act of 2002. Several aspects of the Act, such as the Whistleblower Policy and Code of Conduct, have been incorporated in our Company policy. Our Code of Conduct was updated to make it relevant and responsive to the changing needs of our business.

15. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to the directors report section.

16. Particulars of employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the directors report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. The same will also be published on our website www.infosys.com

17. Directors responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us; and guidelines issued by SEBI on the historical cost

convention; as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

18. Directors

The Board inducted R. Seshasayee and Ravi Venkatesan to the Board. We seek your support in confirming their appointment as directors liable to retire by rotation.

In accordance with the retirement policy for the Companys Board of Directors (the Board), Claude Smadja, Independent Director, retired from the Board effective August 30, 2010. We place on record our deep sense of appreciation for the services rendered by Claude Smadja during his tenure as a Board member.

As per Article 122 of the Articles of Association, K. Dinesh, Srinath Batni, Sridar A. Iyengar, Deepak M. Satwalekar and Dr. Omkar Goswami retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, seek re-appointment, except K. Dinesh.

K. Dinesh has expressed his intention not to seek re-appointment. The Members of the Board place on record their deep sense of appreciation for the services rendered by K. Dinesh during his tenure as Member of the Board and Head of Quality, Information Systems and the Communication Design Group.

T. V. Mohandas Pai has resigned as Member of the Board and has requested the Board to relieve him of the responsibilities post the Companys Annual General Meeting on June 11, 2011.

The Board of Directors considered and accepted the resignation of T. V. Mohandas Pai. The resignation is effective June 11, 2011, post the Companys Annual General Meeting. The Members of the Board have placed on record their deep sense of appreciation for the services rendered by T. V. Mohandas Pai during his tenure as Member of the Board, and Director and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute.

19. Auditors

The auditors, B S R & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

20. Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

21. Human resources management

Employees are our vital and most valuable assets. We have created a favorable work environment that encourages innovation and meritocracy. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high-caliber employees. We added 15,321 (net) and 32,247 (gross) employees this year, taking our total strength to 1,08,009 from 92,688 at the end of the previous year. We added 17,024 (net) and 43,120 (gross) employees this year, taking the total strength of the Infosys group to 1,30,820 from 1,13,796 at the end of the previous

year. Our attrition rate stands at 17.0% compared to 13.4% for the previous year. Over the last year, we received 8,29,800 applications from prospective employees and we continue to remain an employer of choice in the industry.

22. Education & Research

Continuous education of our employees is of prime significance for us. We believe that this is necessary not only for our own sustainability and growth as an organization but also for enabling the professional development of our employees. In addition to the six month residential foundation program that we conduct for every fresh engineer who joins us, we also lay significant emphasis on the continuous education of our employees. The foundation program is designed to aid students in effectively transitioning from the academic world to the corporate world as qualified professionals.

During the financial year, the total training provided for Infoscions was over 1.5 million person days. During the year, we launched several novel programs to help enhance the business competency of our employees, in addition to introducing new programs aligned to evolving business needs.

We have made significant progress with the Campus Connect program aimed at building a robust industry-academia partnership. We deepened our relationship with several engineering institutions across India through the co-creation of several new electives introduced into their curricula. During the financial year, we engaged with 1,040 faculty members who in turn trained 33,000 students. With this the total number of faculty covered under the program is 5,600 and the number of students trained is 1,20,000 from 530 engineering institutions. The program has received international accolades such as the Corporate University Xchange Award for Excellence and Innovation for the year 2011. As part of SPARK, an Infosys program to expose students from high schools and universities to the world of IT and raise their aspirations, we engaged with over 1,75,000 students during the financial year. From its launch a little over two years ago, the program has reached out to over 2,80,000 students.

Our internationally acclaimed Knowledge Management program won the Global MAKE (Most Admired Knowledge Enterprise) award for the seventh time, the Asian MAKE award for the eighth time, and the India MAKE award for the sixth time during the financial year.

Our researchers published their articles and white papers in prestigious journals and conferences as well as in books and invited chapters in reputed publications.

23. Infosys Leadership Institute

The Infosys Leadership Institute (ILI) was established with the aim of developing world-class corporate leaders. The institute helps to identify potential candidates and earmarks them for the training required to take on key leadership positions within the Company. The ILIs Tier Leadership development hopes to produce and mould business leaders of tomorrow. The institute aims to be a globally recognized institution with a focus on training leaders capable of tackling current and future business challenges. The work done by the ILI helps not only in the identification of leaders but also in the nurturing of a leadership mindset and culture across the organization.

Over the last year, ILI has engaged in several activities to support and grow our group of high potential tier leaders as well as advance the field of leadership development. The institute rolled out the Leadership Journey Series Assessment and conducted assessment feedback sessions as well as helped leaders plan and execute their personal development plans. It also developed structured roadmaps guiding development around the seven key Infosys leadership dimensions, as well as key initiatives such as Creating Client Value.

In 2010-11, ILI showcased thought leadership through collaborations with leading researchers from India and abroad, 12 conference presentations, one peer-reviewed journal article, several keynote presentations and most importantly, the release of the book, Leadership @ Infosys, which combines research and practice perspectives to capture the essence of what it means to excel as a leader at Infosys.

24. Sustainability initiatives

Sustainability is a commitment for us to align our strategy in all aspects of our business with our stakeholders in various dimensions such as economic, social and environment. Our focus areas are embodied in the following themes – social contract, resource intensity and green innovation – and are articulated in our Sustainability Policy. Social contracts are our implicit responsibility to the larger society, to factor in social and environmental aspects as important dimensions of our business. Resource intensity is about doing more with less resources - energy, water or material. Green innovation is about leveraging the opportunity for business leadership through sustainability

The Infosys Sustainability Executive Council (ISEC) oversees the planning and progress of all our sustainability initiatives.

As part of our sustainability journey, many of our business units are pursuing innovation in green technologies and many of these have been implemented as solutions for our clients. Some of them are :

- iSustain : An enterprise carbon energy and resource management tool with sustainability reporting and performance management capabilities.

- InGreen Energy Management : Enables enterprises to reduce energy usage through automated tracking and identifcation of consumption patterns; opportunities for changes and reduction, reporting and analysis. It has helped us save energy usage and costs to the tune of 20%.

- InGreen Personal Carbon Calculator : Helps organizations create awareness among employees and measure their daily carbon footprint.

- iSmart : An intelligent power strip that can not only supply power from an electrical source to devices connected to it in enterprise environments, but also monitor their energy consumption level on a continuous basis.

- Integrated Real time Campus Management System (iRCMS) : An enterprise monitoring system that tracks and allows efficient energy management and prolong the life of energy equipment through surveillance. iRCMS helps enterprises with their manpower savings by allowing the facilities and business managers to take informed decisions based on consumption and demand related parameters of energy thereby helping buildings and real estates go green and sustainable.

This fiscal year, our Green Initiatives and the Voice of Youth teams successfully implemented several campaigns and initiatives for creating awareness and influencing our employees and stakeholders in reducing their carbon footprint. Some of the key employee-driven activities have been :

- Earth Hour : The global drive of WWF which led to 3,136 units (over 3.1 MWh) of electrical equipment load turned off during one hour across nine DC-locations in India.

- Infosys Megawatt Challenge : The Infosys Megawatt Challenge was launched at our U.S. offices to reward employees who brought about a reduction in their energy consumption over a period of six months and a positive outreach at their local communities.

- COP16 : Representation at the United Nations Climate Change Conference (COP16) held at Cancun as a member on the delegation from World Business Council for Sustainable Development.

As part of our commitment to social contracts, several of our employee- driven clubs and groups are actively involved in building an equitable society Some of the significant programs this fiscal year have been :

- Notebook Drive : This initiative targets students of government schools who are not in a position to afford notebooks and stationery to pursue their academics. The NBD provides them stationery typically required by the beneficiaries for one academic year. We now reach out to 45,000 children in 400 schools and distribute more than 1,72,000 notebooks. More than 4,000 Infoscions worldwide are actively involved in organizing donation campaigns, purchasing notebooks, managing the logistics, and overseeing the distribution of school kits.

- SPARK : This program offers a learning environment that helps students realize their potential and assess their industry preparedness. The program partners with academic institutions to enhance talent pool as well as meet the demands of the IT industry. Launched in August 2008, SPARK is managed by 2,400 Infosys

volunteers across development centers. This year it has benefitted more than 1,75,000 students, 1,450 institutions and 6,200 faculty members.

- Karnataka food relief : Infosys always responds to a humanitarian crisis by volunteering and pledging support. In October 2009, the northern districts of Karnataka were severely affected by foods after torrential rainfall. It claimed hundreds of lives and rendered millions of villagers homeless. Our employees joined hands to rebuild villages and undertake a mass housing project. Infoscions, together with the Board of Directors and the Infosys Foundation, contributed Rs. 30 crore towards relief, rehabilitation and reconstruction. Under the auspices of the state governments Aasare scheme, we partnered with local NGOs to construct homes across 18 villages. The ongoing housing project serves as a model for sustainable development.

For more details on our sustainability initiatives, visit www.infosys.com

25. Employee Stock Option Plan (ESOP)

We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :

1998 Plan 1999 Plan

Total grants authorized by the plan (no.) 1,17,60,000 ADS 5,28,00,000 shares

Pricing formula on date of grant Not less than 90% of Fair market value fair market value

Variation in terms NA NA Ratio of ADS to equity shares 1 ADS = 1 equity share NA

Options granted during the year (no.) – –

Weighted average price per option granted (Rs.) NA NA

Options vested as at March 31, 2011 (no.) 50,070 40,232

Options exercised during the year (no.) 1,88,675 1,37,692

Total number of shares arising as a result of exercise of options 1,88,675 1,37,692

Money raised on exercise of options (Rs. crore) 13 11

Options forfeited and lapsed during the year (no.) 3,519 18,052

Total number of options in force at the end of the year (no.) 50,070 48,720

Grant to senior management – –

Employees receiving 5% or more of the total number of options granted during the year – –

Employees granted options equal to or exceeding 1% of the issued capital – –

Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 112.22 112.22

SEBI has issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period.

We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where the options are issued to the employees at an exercise price not less than the fair market value.

If the compensation cost on account of stock options granted after June 30, 2003 (as required by the amendment effective June 30, 2003) under 1998 and 1999 Plans was computed using the fair value method, our compensation cost would have been higher by Rs. 1 crore. Our profit would hence be less by Rs. 1 crore for fiscal 2010. The impact on EPS for fiscal 2010 would be Rs. 0.01. For fiscal 2011 there was no stock compensation cost. During fiscal 2011 and 2010, stock options under the 1998 Plan and 1999 Plan have not been granted. Hence, the weighted average fair values of grant during these years are nil.

All stock options under the 1998 and 1999 Employees Stock Option Plans were granted at the prevalent market price on the date of grant. Accordingly, we have calculated the compensation cost arising on account of stock options granted using the intrinsic value method.

Hence, the disclosure in terms of Clause 12.1 (n) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not applicable.

2011 No. of options Weighted average exercise price (Rs.)

1998 Plan

Outstanding at the beginning of the year 2,42,264 613

Forfeited (3,519) 722

Exercised (1,88,675) 600

Outstanding at the end of the year 50,070 683

Vested at the end of the year 50,070 683

1999 Plan

Outstanding at the beginning of the year 2,04,464 869

Forfeited (18,052) 964

Exercised (1,37,692) 823

Outstanding at the end of the year 48,720 962

Vested at the end of the year 40,232 717

2010 No. of options Weighted average exercise price (Rs.)

1998 Plan

Outstanding at the beginning of the year 9,16,759 904

Forfeited (60,424) 1,550

Exercised (6,14,071) 854

Outstanding at the end of the year 2,42,264 613

Vested at the end of the year 2,42,264 613

1999 Plan

Outstanding at the beginning of the year 9,25,806 1,248

Forfeited (3,40,264) 1,968

Exercised (3,81,078) 821

Outstanding at the end of the year 2,04,464 869

Vested at the end of the year 1,84,759 735

26. Infosys Science Foundation

The Infosys Science Foundation, a not-for-profit trust set up to promote research in pure and applied sciences, presented the Infosys Prize to scientists and researchers in the five categories of research listed below :

- Physical Sciences - Physics, Chemistry and Earth Sciences

- Mathematical Sciences - Mathematics and Statistics

- Engineering and Computer Science - All branches of Engineering

- Life Sciences - Biology, Medicine and Plant Science

- Social Sciences and Economics - History, Sociology, Anthropology Political Science, Economics and International Relations

Nominations were evaluated by an eminent jury in each area, comprising outstanding international personalities selected by the trustees of the Foundation.

The Infosys Prize 2010 presentation was held in Mumbai on January 6, 2011. Laureates were felicitated by the Prime Minister of India, Dr. Manmohan Singh. The prize in each category comprised a 24 karat gold medallion, a citation and a cash grant of Rs.50 lakh.

For more details on the Infosys Science Foundation, refer to the website www.infosys-science-foundation.com

27. Infosys Foundation

We are committed to contributing to the society and established Infosys Foundation in 1996 as a not-for-profit trust to support our social initiatives. The Foundation supports programs and organizations devoted to the cause of the destitute, the rural poor, the mentally challenged, and the economically disadvantaged sections of the society. The Foundation also helps preserve certain cultural forms and dying arts of India.

A summary of the work done by the Foundation is provided in the Additional Information Report published on our website www.infosys.com. On your behalf, we express our gratitude to the honorary trustees of the Foundation for sparing their valuable time and energy for its activities.

28. Green initiative

During the previous fiscal, we started a sustainability initiative with the aim of being green and minimizing our impact on the environment. Like last year, this year too we are publishing only the statutory disclosures in the print version of the Annual Report along with the Abridged standalone financial statements prepared in compliance with the Section 219 of the Companies Act, 1956. Additional details are available on our website, www.infosys.com.

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the state governments, the Software Technology Parks (STPs) – Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mysore, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

S. Gopalakrishnan S. D. Shibulal Chief Operating Officer Chief Executive Officer and Managing Director and Director

Bangalore April 15, 2011


Mar 31, 2010

We are delighted to present the report on our business and operations for the year ended March 31, 2010.

1. Results of operations

in Rs. crore, except per share data

2010 2009

Income from software services and products 21,140 20,264

Software development expenses 11,559 11,145

Gross profit 9,581 9,119

Selling and marketing expenses 974 933

General and administration expenses 1,247 1,280

Operating profit before interest and depreciation (PBIDTA) 7,360 6,906

Interest - -

Depreciation 807 694

Operating profit before tax 6,553 6,212

Other income, net 919 502

Net profit before tax 7,472 6,714

Provision for taxation 1,717 895

Net profit after tax and before exceptional item 5,755 5,819

Income on sale of investments, net of taxes(1) 48 -

Net profit after tax and after exceptional item 5,803 5,819

Profit and Loss account balance brought forward 10,305 6,642

Less : Residual dividend paid - 1

Dividend tax on the above - -

Amount available for appropriation 16,108 12,460

Dividend

Interim 573 572

Final 861 773

Total dividend 1,434 1,345

Dividend tax 240 228

Amount transferred to general reserve 580 582

Amount transferred to capital reserve 48 -

Balance in Profit and Loss account 13,806 10,305

EPS before exceptional item(2)

Basic 100.37 101.65

Diluted 100.26 101.48

EPS after exceptional item(2)

Basic 101.22 101.65

Diluted 101.10 101.48

Notes : 1 crore equals 10 million.

(1) Income from sale of investments in OnMobile Systems Inc, USA, net of taxes and transaction costs.

(2) Equity shares are at par value of Rs. 5/- each.

2. Business

Our total income increased to Rs. 21,140 crore from Rs. 20,264 crore in the previous year, at a growth rate of 4.3%. Our software export revenues aggregated to Rs. 20,871 crore, up by 4.3% from Rs. 20,004 crore in the previous year. Of these, 67.9% of the revenues came from North America, 22.2% from Europe and 9.9% from the Rest of the World.

Our revenues from the Rest of the World have increased from Rs. 1,821 crore to Rs. 2,068 crore, with a growth rate of 13.6% which is higher than that of the other regions. The share of fixed-price component of the business was 40.8%, compared to 37.6% during the previous year.

Our gross profit amounted to Rs. 9,581 crore (45.3% of revenue) as against Rs. 9,119 crore (45.0% of revenue) in the previous year. The onsite revenues decreased from 49.3% in the previous year to 48.7% in the current year. The onsite person-months comprised 26.1% of the total billed efforts, compared to 28.4% during the previous year. The Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs. 7,360 crore (34.8% of revenue) as against Rs. 6,906 crore (34.1% of revenue) in the previous year. Sales and marketing costs were 4.6% of our revenue for the years ended March 31, 2010 and March 31, 2009. General and administration expenses decreased from 6.3% in the previous year to 5.9% in the current year. We continue to reap the benefits of economies of scale. The net profit after tax was Rs. 5,803 crore (27.5% of revenue) as against Rs. 5,819 crore (28.7% of revenue) in the previous year. The net profit for the year includes income from sale of investments in OnMobile Systems Inc, USA, of Rs. 48 crore, net of taxes and transaction costs.

We seek long-term partnerships with clients while addressing their IT requirements. Our customer-centric approach has resulted in high levels of client satisfaction. We derived 97.3% of our revenues from repeat business. This means that our valued and sustainable client partnerships have contributed to revenues during the previous fiscal year also. We along with our subsidiaries added 141 new clients, including a substantial number of large global corporations. The total client base at the end of the year stood at 575. Further, we have 338 million-dollar clients (327 in the previous year), 159 five-million-dollar clients (151 in the previous year), 97 ten-million-dollar clients (101 in the previous year), 26 fifty-million-dollar clients (20 in the previous year), and 6 hundred-million-dollar clients (4 in the previous year).

During the year, we added 28.61 lakh sq. ft. of physical infrastructure space. The total available space now stands at 255.04 lakh sq. ft. The number of marketing offices as at March 31, 2010 was 65 as compared to 55 in the previous year.

3. Subsidiaries

We have eight subsidiaries : Infosys BPO Limited, Infosys Technologies (Australia) Pty Limited, Infosys Technologies (China) Co. Limited, Infosys Consulting Inc, Infosys Technologies S. de R. L. de C. V. , Infosys Technologies (Sweden) AB, Infosys Tecnologia DO Brasil LTDA and Infosys Public Services Inc, USA. We have six step-down subsidiaries : Infosys BPO s.r.o., Infosys BPO (Poland) Sp.Z.o.o, Infosys BPO (Thailand) Limited, McCamish Systems LLC, Mainstream Software Pty Limited and Infosys Consulting India Limited.

During the year, Infosys BPO acquired 100% voting interests in McCamish Systems LLC (McCamish), a business process solutions provider based at Atlanta, U.S. The business acquisition was conducted by entering into Membership Interest Purchase Agreement for a cash consideration of Rs. 173 crore and a contingent consideration of Rs. 67 crore. The acquisition was completed during the year and accounted as a business combination which resulted in goodwill of Rs. 227 crore.

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors report, Balance Sheet, and Profit and Loss account of our subsidiaries. We had applied to the Government of India for an exemption from such an attachment as we present the audited consolidated financial statements in the Annual Report. The Government of India has granted us an exemption from complying with Section 212. Accordingly, the Annual Report does not contain the financial statements of these subsidiaries. The audited annual accounts and related information of subsidiaries, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office in Bangalore, India. The same will also be hosted on our website, www.infosys.com

4. Finacle™

Finacle™ from Infosys partners with banks across the globe to power their innovation agenda, enabling them to differentiate their products and services, enhance customer experience and achieve greater operational efficiency. Finacle solutions address world-wide banking needs such as core banking, wealth management, Customer Relationship Management (CRM), Islamic banking and treasury requirements of retail, corporate and universal banking. Finacle solutions also empower banks with multiple sales, service and marketing channels including e-banking, mobile banking and call centers. Recently, Finacle™ has launched a slew of innovative offerings including Finacle Advizor, Finacle Treasury-in-a-box, Finacle Core Banking for regional rural banks, and Finacle Financial Inclusion solutions. These offerings make Finacle™ a strong innovation- facilitator enabling banks to accelerate growth, while maximizing value from their large-scale business transformation.

Finacle™ is the chosen solution in over 130 banks across 65 countries, helping them serve more than 30,000 branches. These include over 2,000 branches of regional rural banks in India which are leading the financial inclusion initiative in the country. Independent reports by renowned research firms have positioned Finacle™ among the leaders in the global evaluation of retail core banking solution vendors. Finacle™ is one of the most scalable core banking solutions in the world with an unparalleled performance benchmark of 104 million effective transactions per hour (29,010 ETPS).

5. Quality

We continue our journey toward excellence with a critical focus on Quality and Productivity with significant investments in quality programs. In May 2009, Infosys BPO was certified for eSCM – SP ver 2.0 level 5, the eSourcing Capability Model for Service Providers developed by a consortium led by Carnegie Mellon Universitys Information Technology Services Qualification Center. We were the fourth in the world to receive this certification. We continue to focus on surveillance audits in ISO certifications such as ISO 9001-TickIT ISO 27001, ISO 20000, ISO 13485, ISO 140001, OHSAS, TL 9000 and AS 9100.

Our quality department manages large change management initiatives to drive Quality and Productivity improvements across the organization. The institutionalization of these large initiatives are managed through the balanced scorecard and Infosys Scaling Outstanding Performance (iSOP) program.

The quality department in collaboration with multiple stakeholders across the organization developed a framework called Business Value Articulation which ensures alignment of our approaches to deliver value to our customers. Some of the key improvement initiatives are :

- Infy Swift – Our differentiated methodology for Global Delivery Model (GDM) enabled short-cycle delivery approach with ‘Best Practices of iterative’ and ‘Predictable Infosys Process’ to achieve faster time to market

ESTEEM (Estimation CoE) – Our drive to standardize estimation techniques and models for various service lines and implementation of the same

- TRANSCEED – Our initiative to enhance program management capabilities, including development of integrated systems and tools, relevant enabling / certification and ecosystem for collaboration / knowledge exchange

ASCENT – Our effort to provide a robust and integrated platform for account management that further facilitates account planning, monitoring and reviews

- Prosper – A differentiated methodology for driving excellence in production support services

TIDE – Total Integrated Delivery Environment which ensures robust way of executing projects in various technologies

BrITe – We continue to focus on Business Results Impact @ Infosys Technologies that uniquely blends IT-specific Six Sigma approach with statistical predictive modeling. This addresses diverse business critical parameters and provides breakthrough improvements.

6. Software Engineering and Technology Labs (SETLabs)

SETLabs at Infosys is the center for applied technology research in software engineering and enterprise technology. SETLabs leverages emerging technologies for improving engineering effectiveness and developing client-focused business solutions. During the year, SETLabs built and enhanced several solutions, frameworks, tools and methodologies in the areas of software engineering, high performance and grid computing, cloud computing, convergence technologies, knowledge-driven information systems and Web 2.0.

During the year, more than 60 articles were published by SETLabs researchers in leading journals, magazines and conference proceedings. SETLabs Briefings, a highly respected peer-reviewed journal, published multiple issues related to areas like Next Generation Enterprise Packages, Cloud Computing, Enterprise Level Business Architecture, Knowledge Engineering and Management, Collaboration, Web 2.0, and Performance Engineering in this fiscal year. SETLabs collaborated with leading national and international universities such as the University of Southern California, Indian Institute of Technology, Bombay, and Monash Research Academy

During the year, SETLabs IP Cell filed 31 patent applications in the United States Patent and Trademark Office (USPTO) and Indian Patent Office. We now have an aggregate of 224 patent applications pending in India and the U.S. and the USPTO has granted nine patents.

7. Branding

We believe that the ‘Infosys’ brand is one of the most important intangible assets that we own. During this fiscal year, we have been appreciated by the following bodies as a recognition of how we operate and conduct business :

- Ranked as the most admired company in India according to the Wall Street Journal survey

- Ranked among the 50 most respected companies in the world by Reputation Institutes Global Reputation Pulse 2009

Ranked among the top 25 companies in Business Weeks InfoTech 100

- Ranked among the top 25 companies in the world for developing leaders by Fortune / Hewitt

- Ranked as the best company to work for in India by Business Todays ninth survey of ‘Best Companies to Work For’.

Industry analysts rated us highly in reports on our key services and markets. The services for which we were rated highly include, Service Oriented Architecture, Oracle Service providers, Comprehensive Finance and Accounting Business Process Outsourcing, and also for the Finacle™ product suite.

We had over a million visits to our blogs on business and technology related topics on our website www.infosys.com during the year. Our employees contributed and published several thought leadership articles across various industry fora and publications. We leveraged social media platforms and engaged with our stakeholders and investors on YouTube, SlideShare, Twitter and Facebook.

Leading global publications wrote about us, our leadership, our talent and our performance. We continued to have leadership presence at premier industry events like Oracle® Open World and Sapphire. Our annual client events in the U.S. and Europe were well attended, and highly appreciated. At the World Economic Forum in Davos, Switzerland, our lunch panel discussion witnessed a full audience and the evening get-together hosted by us was attended by some of the most influential and powerful global business leaders.

8. Awards and recognition

As we pursue excellence relentlessly, we are delighted to receive several global recognitions and awards. This fiscal year we were :

- Ranked among the best in investor relations in the APAC region

Received the Gold Award for Investor Relations in Technology in the U.S. in the ‘Asset Triple A Corporate Awards’

- Ranked as the most sought-after company in India by Business Today Survey

- Received the award for excellence in inclusivity instituted by the American Society for Training & Development (ASTD)

- Honored with the Oracle Titan Partner Award at Oracle® Open World 2009 event Received the Excellence Award for Diversity Hiring Initiatives for Infosys BPO

- Listed on Forbes Asian Fabulous 50 for the fourth consecutive year

- Recognized as one of ‘Indias Best Companies to Work For’ in a survey conducted by Great Place to Work® Institute

- Listed in Fortunes 100 fastest-growing companies

- Ranked as the Best Outsourcing Partner by the Waters Rankings 2009

- Listed among best companies for leaders by Hay Group and Chief Executive Magazine

- The sole company from India to be featured in the Top 25 list of Business Weeks InfoTech 100

- Received the distinction of having one of the ‘Best Ranked Online Annual Reports in Greater China & Asia / Pacific’ at IR Global Rankings 2009.

9. Capital expenditure

During the year, we capitalized Rs. 787 crore to our gross block comprising Rs. 140 crore for investment in computer equipment and the balance of Rs. 646 crore on infrastructure investment, besides Rs. 1 crore on vehicles. We invested Rs. 43 crore to acquire 161 acres of land in Hyderabad, Jaipur, Mysore and Mangalore.

During the previous year, we capitalized Rs. 1,822 crore to our gross block, including investment in computer equipment of Rs. 273 crore, Rs. 1,536 crore on infrastructure investment and Rs. 12 crore toward intangible asset acquisition.

10. Liquidity

We continue to be debt-free, and maintain sufficient cash to meet our strategic objectives. We clearly understand that the liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2010, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments, leaving a surplus of Rs. 4,515 crore. As at March 31, 2010, we had liquid assets of Rs. 14,804 crore as against Rs. 10,289 crore at the previous year-end.

These funds have been invested in deposits with banks, highly rated financial institutions, certificate of deposits and liquid mutual funds.

11. Increase in share capital

During the year, we issued 9,95,149 shares on the exercise of stock options under the 1998 and 1999 Employee Stock Option Plans. Due to this, the outstanding issued, subscribed and paid-up equity share capital increased from 57,28,30,043 shares to 57,38,25,192 shares as at March 31, 2010.

12. Appropriations Dividend

Our policy is to pay dividend up to 30% of the net profit after tax of the Company.

In October 2009, we paid an interim dividend of Rs. 10/- per share. We recommended a final dividend of Rs. 15/- per share (par value of Rs. 5/- each).

The total dividend amount paid out is Rs. 1,434 crore, as against Rs. 1,345 crore in the previous year. Dividend (including dividend tax) as a percentage of profit after tax before exceptional items is 29.1% as compared to 27.0% in the previous year.

The register of members and share transfer books will remain closed from May 29, 2010 to June 12, 2010 (both days inclusive). Our Annual General Meeting has been scheduled for June 12, 2010.

Transfer to reserves

We propose to transfer Rs. 580 crore (10% of the net profit for the year) to the general reserve and another Rs. 48 crore to capital reserve. An amount of Rs. 13,806 crore is proposed to be retained in the Profit and Loss account.

13. Corporate governance

We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and Credit Rating Information Services of India Limited (CRISIL). ICRA has rated our corporate governance practices at CGR 1. CRISIL has assigned CRISIL GVC Level 1 rating to us.

We have complied with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). For fiscal year 2010, the compliance report is provided in the Corporate Governance section of the Annual Report. The auditors certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors report section.

We have documented our internal policies on corporate governance. In line with the committees recommendations, the Managements discussion and analysis of the financial position of the Company is provided in this Annual Report.

During the year, we continued to fully comply with the U.S. Sarbanes- Oxley Act of 2002. Several aspects of the Act such as the Whistleblower Policy and Code of Conduct for senior officers and executives have been incorporated in our Company policy.

During fiscal 2009, we adopted the International Financial Reporting Standards (IFRS) for our Securities and Exchange Commission (SEC), U.S. filings.

On November 9, 2009, SEBI issued a press release permitting listed entities having subsidiaries to voluntarily submit the consolidated financial statements as per IFRS. Further, on April 5, 2010, SEBI issued a circular amending the Listing Agreement to allow listed companies having subsidiaries to prepare and publish consolidated financial statements as per IFRS. Accordingly, for the quarter and year ended March 31, 2010, we voluntarily prepared and published unaudited consolidated IFRS Financial Statements (in Indian Rupees) in addition to preparing and publishing audited standalone and consolidated financial statements in accordance with Indian GAAP. The audited IFRS Financial Statements are available on our website, www.infosys.com.

14. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to the directors’ report section.

15. Particulars of employees

In terms of provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

16. Directors responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us; and guidelines issued by SEBI on the historical cost convention; as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

17. Directors

During the year, we recommended the induction of K. V. Kamath to the Board. A person of extraordinary capabilities, Kamath has had an illustrious career in the banking industry. We thank you for your support in confirming his appointment as director liable to retire by rotation in our Annual General Meeting held on June 20, 2009.

The Board of Directors appointed Prof. Marti G. Subrahmanyam as the Lead Independent Director. Prof. Subrahmanyam succeeds Deepak M. Satwalekar in this role. Satwalekar became the first Lead Independent Director in India, when he was appointed in May 2003.

Nandan M. Nilekani was invited by Honorable Prime Minister Dr. Manmohan Singh to take charge as the Chairperson of the Unique Identification Authority of India (UIDAI), in the rank of Cabinet Minister. Nandan accepted the invitation and consequently relinquished the position of Co-Chairman and Member of the Board.

The Board placed on record its deep sense of appreciation for the services rendered by Nandan M. Nilekani as a co-founder, Chief Operating Officer, Chief Executive Officer and Managing Director, and as the Co-Chairman of the Board of Directors.

Rama Bijapurkar resigned as Independent Member of the Board. The board placed on record its deep sense of appreciation for the services rendered by Rama Bijapurkar as an Independent Member of the Board.

As per Article 122 of the Articles of Association, N. R. Narayana Murthy, Prof. Marti G. Subrahmanyam, S. Gopalakrishnan, S. D. Shibulal and T. V. Mohandas Pai retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, seek re-appointment.

18. Auditors

The auditors, B S R & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

19. Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

20. Human resource management

Employees are our vital and most valuable assets. We have created a favorable work environment that encourages innovation and meritocracy. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high caliber employees. We added 6,837 (net) and 18,905 (gross) employees, taking our total strength to 92,688 up from 85,851 at the end of the previous year. Our attrition rate stands at 13.4% compared to 11.1% for the previous year. Over the last year, we received 4,00,812 applications from prospective employees and we continue to remain an employer of choice in the industry.

During the year, we implemented the Infosys Role and Career Enhancement (iRACE) program. iRACE aligns talent management activities with client priorities, business needs and employee aspirations. We are excited about the influence iRACE will have on our future success.

21. Education & Research

We understand the significance of learning and continual education in providing our employees with latest skills and technologies. We believe this will help in creating a challenging, entrepreneurial and empowering work environment that rewards dedication and a strong work ethic for our employees. We have instituted two specialized units, Education & Research and the Infosys Leadership Institute (ILI) to address the learning needs of our Company. The Infosys Global Education Center, a world-class training facility established at our campus in Mysore, India, is aimed at consolidating the learning requirements across the Company. With a total built-up area of 1.44 million square feet, the Infosys Global Education Center can accommodate the training needs of approximately 14,000 employees at a time.

Our training, continuing education and career development programs are designed to ensure that our technology professionals and leaders enhance their skill-sets in alignment with their respective roles. Most of the engineering graduates we hire complete an integrated on-the-job training module of about 20 to 29 weeks before they are assigned to a business unit.

Our employees also undergo certification programs periodically to develop the skills relevant for their roles. During the year, the total days of training doubled to over two million person-days. In addition, we have been working with several colleges across India through our CampusConnect program, enabling their faculty to provide industry-related training to their students.

As of March 31, 2010, the Education & Research unit employed around 610 full-time faculty members, including 208 with doctorate or master’s degree.

During the year, the Education & Research unit published a compendium of white papers. These are also shared with our partner CampusConnect institutions. The compendium covers domains such as computing model and systems, software architecture and information and theory application in supply chain management. Researchers from the group have also published papers in renowned international publications and conference proceedings.

Several world bodies have recognized our achievements in the fields of knowledge management and continual learning programs. Our Education & Research unit has received the following awards and recognitions during the year :

- Golden Peacock National Training Award for the year 2009

- The American Society for Training & Development (ASTD) BEST award in 2009 for the fifth consecutive year

- The first Indian company inducted into the Global Most Admired Knowledge Enterprise (MAKE) Hall of Fame, retaining our position for the fifth consecutive year

- The Asian MAKE Award 2009

- Ranked at the top in the Indian MAKE Award 2009, for the second year after 2005.

ILI focuses exclusively on developing leadership skills for our senior-most and high potential tier leaders. Each tier leader is assigned an ILI counselor for personalized coaching and for planning self-development programs.

ILI members have published original research papers and made several presentations at global conferences including the prestigious Society for Industrial / Organizational Psychology’s ‘Leading Edge’ forum and other annual conferences. The research topics included succession forecasting, virtual reality assessment, leadership due diligence and intangible asset valuation.

22. Sustainability initiatives

Sustainability for us is a way of conducting business and is an integral part of our Company strategy. Our sustainability journey has reached a critical mass this fiscal year.

The Infosys Sustainability Executive Council (ISEC) oversees the strategic implementation of our business, social, environmental and code of ethics practices. Our sustainability policy complements various other policies in existence across the organization, and is based on our philosophy of maximizing value to our stakeholders – our clients, employees, investors, vendor partners and the society

As part of the Infosys Strategic Planning for fiscal 2011, sustainability has emerged as one of the key tracks. Our sustainability agenda will focus on the following strategic themes :

Social contract : Social contract for us is the just pursuance of humanism in all spheres of our business. Engaging stakeholders and ensuring that we create a sustainable tomorrow are an important part of this journey. We support and encourage employee participation across various corporate social responsibility (CSR) initiatives. An organization-wide initiative called Spark was envisaged as an employee-driven CSR in August 2008. This nation-wide initiative has reached out to 1,00,000 students in India as at March 31, 2010. This program focuses on disseminating knowledge about advancements in IT, and our role in its growth, thus helping students to gain first-hand exposure to opportunities available for their studies and career planning.

Resource Efficiency : Resource efficiency for us translates as reducing the impact on our environment. Our efforts in ensuring resource efficiency at all our centers involve working toward green buildings, conserving energy, reducing and reusing paper, reducing and recycling water and effective waste management.

Green Innovation : We are committed toward reducing the harmful impact on the environment around us. Our efforts do not stop at re-engineering our processes to align with green goals, but extend to any product / service / process that is new and displaces traditional ways of doing business while optimizing resource utilization and adhering to social contracts. Many of our business units are innovating and building on ideas that achieve resource efficiency. Some of the innovative green ideas that have been deployed for our clients include reducing the weight of an aircraft and introducing smart grids within the organization.

During the previous year, we started a sustainability initiative with specific focus on reducing the carbon footprint involving our Annual Reports. Toward this end, we had stated that commencing fiscal 2010, our printed copy of the Annual Report to shareholders would contain only the statutory details. Accordingly, the Annual Report for the year ended March 31, 2010, contains only those details that are statutorily required to be published in the Annual Report along with Abridged Standalone Financial Statements prepared in compliance with Section 219 of the Companies Act, 1956. Additional details are available on our website, www.infosys.com. Through this initiative, we propose to reduce consumption of paper by about 100 tonnes.

For more details on our sustainability initiatives, refer to our website, www. infosys.com.

23. Employee Stock Option Plan (ESOP)

We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :

1998 Plan 1999 Plan

Total grants authorized by the plan (no.) 1,17,60,000 ADS 5,28,00,000 shares

Not less than 90% of fair Pricing formula on date of grant market value Fair market value

Variation in terms NA NA

Ratio of ADS to equity shares 1 ADS = 1 equity share NA

Options granted during the year (no.) - -

Weighted average price per option granted (Rs.) NA NA

Options vested as at March 31, 2010 (no.) 2,42,264 1,84,759

Options exercised during the year (no.) 6,14,071 3,81,078

Total number of shares arising as a result of exercise of options 6,14,071 3,81,078

Money raised on exercise of options (Rs. crore) 57 31

Options forfeited and lapsed during the year (no.) 60,424 3,40,264

Total number of options in force at the end of the year (no.) 2,42,264 2,04,464

Grant to senior management - -

Employees receiving 5% or more of the total number of options granted during the year - -

Employees granted options equal to or exceeding 1% of the issued capital - -

Diluted EPS before exceptional item on issue of shares on exercise calculated in accordance with AS 20 Rs. 100.26 Rs. 100.26

Diluted EPS after exceptional item on issue of shares on exercise calculated in accordance with AS 20 Rs. 101.10 Rs. 101.10

SEBI has issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period.

We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where the options are issued to the employees at an exercise price not less than the fair market value. If the compensation cost on account of stock options granted after June 30, 2003 (as required by the amendment effective June 30, 2003) under 1998 and 1999 Plans was computed using the fair value method, our compensation cost would have been higher by Rs. 1 crore and Rs. 7 crore and our profit would hence be less by Rs. 1 crore and Rs. 7 crore for fiscal 2010 and 2009, respectively. The impact on EPS for fiscal 2010 and 2009 would be Rs. 0.01 and Rs. 0.13, respectively. During fiscal 2010 and 2009, stock options under the 1998 Plan and 1999 Plan have not been granted. Hence, the weighted average fair values of grant during these years are nil.

All stock options under the 1998 and 1999 Employees Stock Option Plans were granted at the prevalent market price on the date of grant. Accordingly, we have calculated the compensation cost arising on account of stock options granted using the intrinsic value method. Hence, the disclosure in terms of Clause 12.1(n) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not applicable.

2010 2009

No. of options Weighted average No. of options Weighted average exercise price (Rs.) exercise price (Rs.)

1998 Plan

Outstanding at the beginning of the year 9,16,759 904 15,30,447 813

Forfeited (60,424) 1,550 (1,58,102) 1,785

Exercised (6,14,071) 854 (4,55,586) 890

Outstanding at the end of the year 2,42,264 613 9,16,759 904

Vested at the end of the year 2,42,264 613 9,16,759 904

1999 Plan

Outstanding at the beginning of the year 9,25,806 1,248 14,94,693 1,163

Forfeited (3,40,264) 1,968 (1,90,188) 1,814

Exercised (3,81,078) 821 (3,78,699) 620

Outstanding at the end of the year 2,04,464 869 9,25,806 1,248

Vested at the end of the year 1,84,759 735 8,51,301 1,177

24. Infosys Science Foundation

During fiscal 2009, we had set up Infosys Science Foundation, a not-for-profit trust to promote research in pure and applied sciences in India.

The Infosys Prize endeavors to elevate the prestige of scientific research in India and inspire young Indians to choose a vocation in scientific research. It also seeks to boost the confidence of economists, social scientists and other researchers who are already engaged in and committed to advanced research in these areas.

The Infosys Prize categories include :

- Physical Sciences – Physics and Chemistry

- Mathematical Sciences – Mathematics and Statistics

- Engineering Sciences – All branches of Engineering

- Life Sciences – Biology and Medicine

- Social Sciences and Economics – Economics, History, Sociology, Political Sciences and other Social Sciences.

The jury for each area consists of eminent international personalities selected by the trustees of the Foundation.

The inaugural Infosys Prize laureates were felicitated and awarded prizes at a grand ceremony in New Delhi on January 4, 2010, by Honorable Vice President of India Mohammad Hamid Ansari.The prize in each category comprised a special gold medallion, a citation expounding the laureate’s work and Rs. 50 lakh as prize money.

For more details on the Infosys Science Foundation, refer to the website, www.infosys-science-foundation.com.

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Customs and Excise Departments, the Income Tax Department, the Ministry of Commerce, the Ministry of Finance, the Reserve Bank of India, the state governments, the Software Technology Parks (STPs) – Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mysore, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors

S. Gopalakrishnan S. D. Shibulal

Bangalore Chief Executive Officer and Chief Operating Officer and

April 13, 2010 Managing Director Director

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