Mar 31, 2023
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, 2023. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Results of our operations and state of affairs
(In '' crore, except per equity share data) |
||||||
Particulars |
Standalone |
Consolidated |
||||
For the year ended March 31, |
YoY growth |
For the year ended March 31, |
YoY growth |
|||
2023 |
2022 |
(%) |
2023 |
2022 |
(%) |
|
Revenue from operations |
1,24,014 |
1,03,940 |
19.3 |
1,46,767 |
1,21,641 |
20.7 |
Other income, net |
3,859 |
3,224 |
19.7 |
2,701 |
2,295 |
17.7 |
Total income |
1,27,873 |
1,07,164 |
19.3 |
1,49,468 |
1,23,936 |
20.6 |
Expenses |
||||||
Cost of sales |
85,762 |
69,629 |
23.2 |
1,02,353 |
81,998 |
24.8 |
Selling and marketing expenses |
5,018 |
4,125 |
21.6 |
6,249 |
5,156 |
21.2 |
General and administration expenses |
5,293 |
4,787 |
10.6 |
7,260 |
6,472 |
12.2 |
Total expenses |
96,073 |
78,541 |
22.3 |
1,15,862 |
93,626 |
23.7 |
Profit / loss before finance cost and tax expenses |
31,800 |
28,623 |
11.1 |
33,606 |
30,310 |
10.9 |
Finance cost |
157 |
128 |
22.7 |
284 |
200 |
42.0 |
Profit before tax |
31,643 |
28,495 |
11.0 |
33,322 |
30,110 |
10.7 |
Profit before tax (% of revenue) |
25.5 |
27.4 |
22.7 |
24.8 |
||
Tax expense |
8,375 |
7,260 |
15.4 |
9,214 |
7,964 |
15.7 |
Profit after tax |
23,268 |
21,235 |
9.6 |
24,108 |
22,146 |
8.9 |
Profit after tax (% of revenue) |
18.8 |
20.4 |
16.4 |
18.2 |
||
Total other comprehensive income / (loss), net of tax |
(268) |
(48) |
514 |
182 |
||
Total comprehensive income for the year attributable to the owners of the Company |
23,000 |
21,187 |
24,598 |
22,293 |
||
Profit attributable to owners of the Company |
23,268 |
21,235 |
24,095 |
22,110 |
||
Non-controlling interests |
- |
- |
13 |
36 |
||
Earnings per share (EPS) |
||||||
Basic |
55.48 |
50.27 |
10.4 |
57.63 |
52.52 |
9.7 |
Diluted |
55.42 |
50.21 |
10.4 |
57.54 |
52.41 |
9.8 |
1 crore = 10 million |
||||||
Notes: |
||||||
The above figures are extracted from the audited standalone and consolidated financial statements of the Company as per the Indian Accounting Standards (Ind AS). |
||||||
Financial position |
(In '' crore, except equity share data) |
|||
Particulars |
Standalone As at March 31, 2023 |
2022 |
Consolidated As at March 31, 2023 |
2022 |
Net current assets |
24,640 |
27,461 |
31,695 |
33,582 |
Property, plant and equipment (including capital work-in-progress) |
11,931 |
11,795 |
13,634 |
13,491 |
Right-of-use assets |
3,561 |
3,311 |
6,882 |
4,823 |
Goodwill and other intangible assets |
214 |
243 |
8,997 |
7,902 |
Other non-current assets |
33,549 |
31,601 |
25,422 |
24,484 |
Total assets |
1,01,337 |
99,387 |
1,25,816 |
1,17,885 |
Non-current lease liabilities |
3,553 |
3,228 |
7,057 |
4,602 |
Other non-current liabilities |
2,597 |
1,877 |
3,778 |
3,944 |
Retained earnings - Opening balance |
55,449 |
57,518 |
61,313 |
62,643 |
Add: |
||||
Profit for the year |
23,268 |
21,235 |
24,095 |
22,110 |
Transfer from Special Economic Zone Re-investment Reserve on |
1,397 |
1,012 |
1,464 |
1,100 |
utilization |
||||
Less: |
||||
Impact on adoption of amendment to Ind AS 37, Provisions, |
(9) |
0 |
(19) |
0 |
Contingent Liabilities and Contingent Assets |
||||
Dividends |
(13,675) |
(12,700) |
(13,632) |
(12,655) |
Buyback of equity shares (including tax on buyback) |
(11,096) |
(8,822) |
(11,096) |
(8,822) |
Transaction cost relating to buyback (net of tax) |
(5) |
- |
(5) |
- |
Transfer to legal reserve |
- |
- |
(3) |
(10) |
Amount transferred to capital redemption reserve upon buyback |
(21) |
- |
(21) |
- |
Transfer to Special Economic Zone Re-investment Reserve |
(3,125) |
(2,794) |
(3,139) |
(3,054) |
Changes in controlling stake of the subsidiaries |
- |
- |
- |
1 |
Retained earnings - Closing balance |
52,183 |
55,449 |
58,957 |
61,313 |
Equity share capital |
2,074 |
2,103 |
2,069 |
2,098 |
Other reserves and surplus⢠|
13,752 |
11,750 |
12,354 |
10,415 |
Other comprehensive income |
(264) |
4 |
2,027 |
1,524 |
Non-controlling interest |
- |
- |
388 |
386 |
Total equity |
67,745 |
69,306 |
75,795 |
75,736 |
Total equity and liabilities |
1,01,337 |
99,387 |
1,25,816 |
1,17,885 |
(,) Excluding retained earnings |
Effective fiscal 2020, the Company expects to return approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and / or share buyback and / or special dividends, 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 and buyback include applicable taxes.
In line with the Capital Allocation Policy, the Board, at its meeting held on October 13, 2022, approved the buyback of equity shares, from the open market route through the Indian stock exchanges, amounting to ''9,300 crore (Maximum Buyback Size, excluding buyback tax) at a price not exceeding ''1,850 per share (Maximum Buyback Price), subject to shareholders'' approval.
The shareholders approved the proposal of buyback of equity shares recommended by the Board of Directors by way of postal ballot through e-voting and the result of which was declared on December 3, 2022.
The buyback was offered to all equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchanges. The buyback of equity shares through the stock exchanges commenced on December 7, 2022 and was completed on February 13, 2023. During this buyback period, the Company purchased and extinguished a total of 6,04,26,348 equity shares from the stock exchanges at a volume weighted average buyback price of ''1,539.06 per equity share comprising 1.44% of the pre-buyback paid-up equity share capital of the Company. The buyback resulted in a cash outflow of ?9,300 crore (excluding transaction costs and tax on buyback). The Company funded the buyback from its free reserves including Securities Premium Account as explained in Section 68 of the Companies Act, 2013.
In accordance with Section 69 of the Companies Act, 2013, as at March 31, 2023, the Company has created a Capital Redemption Reserve of ?30 crore equal to the nominal value of the shares bought back as an appropriation from the general reserve and retained earnings.
During the year ended March 31, 2023, the Company paid an interim dividend of ?16.5 per share and announced a final dividend of ?17.5 per share, subject to shareholders'' approval in the ensuing AGM. After returning the above amounts, the Company would have returned approximately 86% of the cumulative free cash flow for fiscals 2020, 2021, 2022 and 2023 through dividends and buybacks, in line with the Capital Allocation Policy.
The Capital Allocation Policy is available on our website, at
https://www.infosys.com/investors/corporate-governance/
documents/capital-allocation-policy.pdf.
Our principal sources of liquidity are cash and cash equivalents, investments and the cash flow that we generate from our operations. 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 requirements. Liquidity enables us to be agile and ready for meeting unforeseen strategic and business needs, and opportunities.
As of March 31, 2023, we had ''24,640 crore in working capital on a standalone basis, and ''31,695 crore on a consolidated basis.
Consolidated cash and investments stand at ''22,509 crore on a standalone basis and ''31,286 crore on a consolidated basis as on March 31, 2023, as against ''29,950 crore on a standalone basis, and ''37,419 crore on a consolidated basis as on March 31, 2022.
Consolidated cash and investments, on both standalone and consolidated basis, include deposits with banks and financial institutions with high credit ratings by international and domestic credit rating agencies. As a result, liquidity risk of cash and cash equivalents is limited. Ratings are monitored periodically. Liquid assets also include investments in liquid mutual fund units, target maturity funds units, certificates of deposit (CDs), commercial paper (CP), quoted bonds issued by government and quasi-government organizations, and nonconvertible debentures. CDs and CPs represent marketable securities of banks, NBFCs and eligible financial institutions for a specified time period with high credit rating given by domestic credit rating agencies. G-secs are highly liquid and marketable instruments issued across tenure, backed by Government of India carrying a sovereign credit. Investments made in nonconvertible debentures are issued by government-owned institutions and financial institutions with high credit rating. We invest after considering counterparty risks based on multiple criteria including Tier-I capital, capital adequacy ratio, credit rating, profitability, NPA levels and deposit base of banks and financial institutions.
The details of these investments are disclosed under the ''non-current and current investments'' section in the Standalone and Consolidated financial statements in this Integrated Annual Report.
Dividend The Company recommended / declared dividend as under: |
||||
Fiscal 2023 |
Fiscal 2022 |
|||
Dividend per |
Dividend payout |
Dividend per |
Dividend payout |
|
share (in '') |
(in '' crore) |
share (in '') |
(in '' crore) |
|
Interim dividend |
16.50 |
6,943 |
15.00 |
6,308 |
Final dividend |
17.50 (1) |
7,260 (1) |
16.00 |
6,731 |
Total dividend |
34.00 |
31.00 |
||
Payout ratio (interim and final dividend) * |
69.5% (2) |
57.2% |
Note:
The Company declares and pays dividend in Indian rupees. Companies are required to pay / distribute dividend after deducting applicable withholding income
taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
* Payout ratio is computed as a percentage of free cash flow prepared under IFRS.
(1) Recommended by the Board of Directors at its meeting held on April 13, 2023. The payment is subject to the approval of the shareholders at the ensuing AGM of the Company to be held on June 28, 2023. The record date for the purposes of the final dividend will be June 2, 2023 and payment will be made on July 3, 2023.
(2) Our present Capital Allocation Policy is to pay approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semiannual dividends and / or share buyback and / or special dividends, 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. Including buyback, the Company has returned 86% of the cumulative free cash flow for the years ended March 31, 2020, 2021, 2022 and 2023.
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 Integrated Annual Report.
We do not propose to transfer any amount to general reserve on declaration of dividend.
We have not accepted any fixed deposits, including from the public, 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
There were no contracts, arrangements or transactions entered into during fiscal 2023 that fall under the scope of Section 188(1) of the Companies Act, 2013. As required under the Companies Act, 2013, the prescribed Form AOC-2 is appended as Annexure 2 to the Board''s report.
Management''s discussion and analysis
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Management''s discussion and analysis is set out in this Integrated Annual Report.
In terms of the provisions of Section 134 of the Companies Act, 2013, the Risk management report is set out in this Integrated Annual Report.
The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and Securities and Exchange Board of India (SEBI) regulations are provided in Annexure 8 to the Board''s report.
Material changes and commitments affecting financial position between the end of the financial year and date of the report
There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.
Our clients and prospective clients are faced with transformative business opportunities due to advances in software and computing technology. These organizations are dealing with the challenge of having to reinvent their core offerings, processes and systems rapidly and position themselves as ''digitally enabled'' or ''digital first'' organisations. The journey to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices. Our strategy is to be a navigator for our clients as they ideate, plan and execute their journey to a digital future.
For details of our continued investments and outcomes of our strategic initiatives, refer to the Strategy section of the Integrated Report.
Our go-to-market business units and solutions are detailed in the Operating context section of the Integrated Report.
There has been a net movement of 3.02 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31,2023 stands at 56.86 million sq. ft. We have presence in 56 countries across 274 locations as on March 31, 2023.
Infosys has a systematic M&A approach aimed to strengthen digital services capabilities, deepen industry expertise, and expand geographical footprint.
During the fiscal year ended March 31,2023, the Group completed two business combinations to complement its digital offerings by acquiring 100% voting interests in:
a. oddity GmbH, oddity group services GmbH, oddity space GmbH, oddity jungle GmbH, oddity code GmbH and oddity waves GmbH (collectively known as oddity), a Germany-based digital marketing, experience, and commerce agency, on April 20, 2022.
b. BASE life science A/S, a consulting and technology firm in the Life Science industry in Europe, on September 1, 2022.
These acquisitions are expected to strengthen the Group''s creative, branding and experience design capabilities and augment the Group''s life sciences expertise, scales its digital transformation capabilities with cloud-based industry solutions and expand its presence across Europe.
We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation digital services. At the beginning of the year, we had 27 direct subsidiaries and 50 step-down subsidiaries. As on March 31, 2023, we have 28 direct subsidiaries and 70 step-down subsidiaries. Further, the Company does not have any material subsidiary. The changes in subsidiaries during the year are included in the Standalone financial statements of the Company.
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 Integrated Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 1 to the Board''s report.
The statement also provides details of the performance and financial position of each of the subsidiaries, along with the changes that occurred, during fiscal 2023.
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 its subsidiaries, are available on our website, at www.infosys.com.
Our employees are our most important assets. We are committed to hiring and retaining the best talent and being among the industry''s leading employers. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustained high performance. Our human resources management focuses on allowing our employees to develop their skills, grow in their career and navigate their next.
Infosys'' goal has always been to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. Towards this, the Company has set up the Anti-Sexual Harassment Initiative (ASHI), which proudly completes 23 years of enabling a positive and safe work environment for our employees. Our ASHI practices have set an industry benchmark as it ranked first among 350 companies that participated in an external survey on the best anti-sexual harassment initiatives in 2017, 2019, 2020, 2021 and 2022.
Infosys has constituted an Internal Committee (IC) in all the development centers of the Company in India to consider and resolve all sexual harassment complaints reported by women. The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted and decisions made by the IC at the respective locations, and a senior woman employee is the presiding officer over every case. Half of the total members of the IC are women. The role of the IC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment.
In the last few years, the IC has worked extensively on creating awareness on relevance of sexual harassment issues in the new normal by using new and innovative measures to help employees understand the forms of sexual harassment while working remotely. The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability Report of this Integrated Annual Report.
The Company had 2,72,665 employees on standalone basis and 3,43,234 employees on consolidated basis as of March 31, 2023.
The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) (as required under the Companies Act, 2013) to the median of employees'' remuneration, and the list of top 10 employees in terms of remuneration drawn, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure 3 to this Board''s report. The statement containing particulars of employees employed throughout the year and in receipt of remuneration of ''1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of ''8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, is provided in a separate exhibit forming part of this report and is available on the website of the Company, at https://www.infosys.com/investors/reports-filings/Documents/exhibitboards-report2023.pdf. The Integrated Annual Report is being sent to the shareholders excluding the aforesaid exhibit. Shareholders interested in obtaining this information may access the same from the Company website. In accordance with Section 136 of the Companies Act, 2013, this exhibit is available for inspection by shareholders through electronic mode.
Notes:
1. The employees mentioned in the aforesaid exhibit have / had permanent employment contracts with the Company.
2. The employees are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
3. The details of employees posted outside India and in receipt of a remuneration of ''60 lakh or more per annum or ''5 lakh or more a month can be made available on specific request.
The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.
Infosys Expanded Stock Ownership Program 2019 (âthe 2019 Plan")
On June 22, 2019, pursuant to approval by the shareholders in the AGM, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan.
The maximum number of shares under the 2019 Plan shall not exceed 5,00,00,000 equity shares. To implement the 2019 Plan, up to 4,50,00,000 equity shares may be issued by way of secondary acquisition of shares by the Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019 Plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (the Nomination and Remuneration Committee). The performance parameters will be based on a combination of relative Total Shareholder Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the Company as decided by the administrator.
Each of the above performance parameters will be distinct for the purposes of calculation of the quantity of shares to vest based on performance. These instruments will generally vest between a minimum of one and a maximum of three years from the grant date.
2015 Stock Incentive Compensation Plan (âthe 2015 Plan")
On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Plan.
The maximum number of shares under the 2015 Plan shall not exceed 2,40,38,883 equity shares (not adjusted for bonus issue). These instruments will vest generally over a period of four years and shall be exercisable within the period as approved by the Nomination and Remuneration Committee. The exercise price
of the 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.
Consequent to the September 2018 bonus issue, all the then outstanding options granted under the stock option plan have been adjusted for bonus shares.
The total number of equity shares and American Depositary Receipts (ADRs) to be allotted to the employees of the Company and its subsidiaries under the 2015 Plan does not cumulatively exceed 1% of the issued capital. For the shares and ADRs issued under the 2019 Plan, the cumulative amount does not exceed 1.15% of the issued capital. The 2019 Plan and 2015 Plan are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time, and there has been no material change to the plans during the fiscal.
The details of the 2019 Plan and 2015 Plan, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are available on the Company''s website, at https://www.infosys.com/investors/reports-filings/Documents/ disclosures-pursuant-SEBI-regulations2023.pdf.
The details of the 2019 Plan and 2015 Plan form part of the Notes to accounts of the financial statements in this Integrated Annual Report.
Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Infosys, the 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 2023 forms part of this Integrated Annual Report.
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, regional and industry experience, cultural and geographical background, age, ethnicity, race, gender, knowledge and skills including expertise in financial, diversity, global business, leadership, information technology, mergers and acquisitions, Board service and governance, sales and marketing, Environmental, Social and Governance (ESG), risk management and cybersecurity and other domains, which will ensure that Infosys retains its competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity.
The policy is available on our website, at
https://www.infosys.com/investors/corporate-governance/
documents/board-diversity-policy.pdf.
Additional details on Board diversity are available in the Corporate governance report that forms part of this Integrated Annual Report.
The Board met eight times during the financial year. The meeting details are provided in the Corporate governance report that forms part of this Integrated Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.
The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. As of March 31, 2023, the Board had eight members, consisting of an executive director, a non-executive and non-independent director and six independent directors. One of the independent directors of the Board is a woman. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the Corporate overview section that forms part of this Integrated Annual Report.
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.
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.
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), Code for independent directors of the Companies Act, 2013 and of the Listing Regulations.
The Nomination and Remuneration Committee engaged Egon Zehnder, external consultants, to conduct Board evaluation for the year. The evaluation of all the directors, committees, Chairman of the Board, and the Board as a whole, was conducted based on the criteria and framework adopted by the Board.
The Board evaluation process was completed during fiscal 2023. The evaluation parameters and the process have been explained in the Corporate governance report.
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.
1. The shareholders at the 41st AGM held on June 25, 2022 reappointed Salil Parekh as CEO and MD effective July 1, 2022 till March 31,2027.
2. The shareholders vide postal ballot concluded on March 31,2023 approved the appointment of Govind Iyer, as an independent director effective January 12, 2023, for a term of five (5) years till January 11,2028.
3. The Board, based on the recommendation of Nomination and Remuneration Committee, appointed D. Sundaram as Lead Independent Director of the Company, effective March 23, 2023.
4. Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board appointed Shaji Mathew as a Group Head of Human Resources and further designated as an executive officer effective March 22, 2023, for the purpose of reporting under the rules of the U.S. Securities and Exchange Commission and Key Managerial Personnel as defined under Ind AS 24, Related Party Disclosures.
In the opinion of the Board, the independent directors appointed during the year possess requisite integrity, expertise, experience and proficiency.
1. Ravi Kumar S., President (KMP), has resigned effective October 11, 2022. The Board of Directors placed on record its appreciation for the services rendered by him.
2. Mohit Joshi, President, resigned from the Company. He is on leave from March 11, 2023 and will stay on leave till the last date with the Company i.e. June 9, 2023. The Board placed on record its appreciation for the services rendered by him.
3. Krishnamurthy Shankar, Group Head of Human Resources (KMP), retired on March 21, 2023. He led the development of a strong employee value proposition, helped build a digital skills-based ecosystem and enabled digital career paths for employees. The Board placed on record its sincere appreciation for his contributions to the Company.
4. Kiran Mazumdar-Shaw, Lead Independent Director, retired as member of the Board of Directors on completion of tenure effective March 22, 2023. The Board placed on record their appreciation for Ms. Shaw''s invaluable contribution, guidance, and strategic vision, that has helped the Company build and execute a resilient growth strategy.
5. The Board took note of Uri Levine''s retirement as an Independent Director effective April 19, 2023 upon completion of his term. The Board placed on record its sincere appreciation for his contributions to the Company.
As on March 31, 2023, the Board had six committees: the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee, the Risk Management Committee, the Stakeholders Relationship Committee, the Environment, Social and Governance (ESG) Committee.
All committees comprise only independent directors, one of whom is chosen as the chairperson of the committee.
Additionally, the Board had incorporated a Cybersecurity Risk Sub-Committee of the Risk Management Committee.
During the year, all recommendations made by the committees were approved by the Board.
A detailed note on the composition of the Board and its committees is provided in the Corporate governance report, which forms part of this Integrated Annual Report.
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of fraud, error-reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the ''Internal control systems and their adequacy'' section in the Management''s discussion and analysis, which forms part of this Integrated Annual Report.
At Infosys, as our employees operate efficiently as a hybrid workforce, we continued to remain vigilant on the evolving cybersecurity threat landscape. In our endeavor to maintain a robust cybersecurity posture, the team has remained abreast of emerging cybersecurity events globally, so as to achieve higher compliance and its continued sustenance. We continue to be certified against the Information Security Management System (ISMS) Standard ISO 27001:2013. Additionally, we have also been attested on SSAE 18 SOC 1 and SOC 2 by an independent audit firm. During the year, our focus on our cybersecurity personnel training, reskilling, and building a security culture of collective onus, encouraging shift left, enabling the developer community with dedicated courses and resource kits went ahead as planned, together with our overall initiatives on improving cybersecurity processes, technologies and posture.
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report, which forms part of this Integrated Annual Report.
In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https://www.infosys.com/ investors/reports-filings/documents/annual-returns-2022-23.pdf.
The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.
The Company''s shares are listed on BSE Limited and the National Stock Exchange of India Limited, and its ADSs are listed on the New York Stock Exchange (NYSE).
During the year, the Company has transferred the unclaimed and un-encashed dividends of ?2,43,11,422. Further, 4,47,153 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. The details of the resultant benefits arising out of shares already transferred to the IEPF, year-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividend account up to the year, and the corresponding shares, which are liable to be transferred, are provided in the Corporate governance report and are also available on our website, at www.infosys.com/ IEPF. Details of shares / dividend transferred to IEPF can also be obtained by accessing https://www.iepf.gov.in/IEPFWebProject/ SearchInvestorAction.do?method=gotoSearchInvestor\.
Members are requested to claim the dividend(s), which have remained unclaimed/unpaid, by sending a written request to the Company at [email protected] or to the Company''s Registrar and Transfer Agent KFin Technologies Limited at einward.ris@ kfintech.com or at their address at KFin Technologies Limited, Unit: Infosys Limited, Selenium Tower B, Plot 31-32, Financial District, Nanakramguda, Serilingampally Mandal, Hyderabad 500032. Members can find the details of Nodal officer appointed by the company under the provisions of IEPF at https://www.infosys.com/investors/shareholder-services/ unclaimed-dividend-shares.html.
The financial statements are prepared in accordance with the 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 Companies Act, 2013 and guidelines issued by SEBI.
The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. 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, 2023 , the applicable accounting standards have been followed and there are no material departures.
⢠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 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 the Companies Act, 2013 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.
The Auditors'' Report for fiscal 2023 does not contain any qualification, reservation, or adverse remark.
The Report is enclosed with the Financial statements in this Integrated Annual Report.
The Secretarial Auditors'' Report for fiscal 2023 does not contain any qualification, reservation, or adverse remark. The Secretarial Auditors'' Report is enclosed as Annexure 5 to the Board''s report, which forms part of this Integrated Annual Report.
The Auditor''s certificate confirming compliance with conditions of corporate governance as stipulated under Listing Regulations, for fiscal 2023 is enclosed as Annexure 4 to the Board''s report, which forms part of this Integrated Annual Report.
The Secretarial Auditor''s certificate on the implementation of share-based schemes in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, will be made available on request at the AGM, electronically.
Statutory auditor
Deloitte Haskins & Sells LLP, Chartered Accountants (Firm registration number 117366W/W-100018) ("Deloitte") was appointed as the statutory auditors of the Company, to hold office for the second term of five consecutive years from the conclusion of the 41st AGM of the Company held on June 25, 2022, till the conclusion of the 46th AGM to be held in 2027, as required under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.
Secretarial auditor
Makarand M. Joshi & Co., Company Secretaries (FCS: 5533,
CP: 3662), are appointed as secretarial auditor of the Company for fiscal 2024, as required under Section 204 of the Companies Act, 2013 and Rules thereunder.
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
6. Corporate social responsibility (CSR)
Infosys has been an early adopter of CSR initiatives. The Company works primarily through the Infosys Foundation, towards supporting projects in the areas of education, healthcare, women empowerment, sustainability, rehabilitating the destitute, preserving Indian art and culture, rural development and disaster relief.
The Company''s CSR Policy is 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 6 to the Board''s report. Infosys also undertakes CSR initiatives outside of India, in US, Australia, and across Europe in UK, Germany, France and Ukraine. The initiatives in the US are carried out through Infosys Foundation USA. The said initiatives are over and above the statutory requirement.
The highlights of the initiatives undertaken by the Company, Infosys Foundation, and Infosys Foundation USA form part of this Integrated Annual Report.
7. 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 7 to the Board''s report, which forms part of this Integrated Annual Report.
In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting ("the Committee") to finalize business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBC). Through its report, the Committee recommended that BRR be rechristened BRSR, where disclosures are based on ESG parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting.
The BRSR disclosures form a part of this Integrated Annual Report. The non-financial sustainability disclosures have been independently assured by KPMG.
In October 2020, we launched our ESG Vision 2030. Our focus is steadfast on leveraging technology to battle climate change, water management and waste management. On the social front, our emphasis is on the development of people, especially in the areas of digital skilling, improving diversity and inclusion, facilitating employee wellness and experience, delivering technology for good and energizing the communities we work in. We are also redoubling our efforts to serve the interests of all our stakeholders, by leading through our core values and setting benchmarks in corporate governance.
The ESG Committee was constituted by the Board with effect from April 14, 2021, to discharge its oversight responsibility on matters related to organization-wide ESG initiatives, priorities, and leading ESG practices. The ESG Committee reports to the Board and meets every quarter to review progress on the ESG ambitions articulated in our ESG Vision 2030.
We thank our clients, 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 for 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 thank the Government of India, particularly the Ministry of Labour and Employment, the Ministry of Environment and Forests, the Ministry of New and Renewable Energy, the Ministry of Communications, the Ministry of Electronics and Information Technology (Dept of IT), the Ministry of Commerce and Industry, the Ministry of Finance, the Ministry of Corporate Affairs, the Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, GST authorities, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments under the state governments and union territories, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Coimbatore , Gurugram, Hubballi, Hyderabad, Indore, Jaipur, Kochi, Kolkata, Mangaluru, Mohali, Mumbai, Mysuru, Nagpur, Noida, Pune, Thiruvananthapuram, Visakhapatnam - and other government agencies for their support, and look forward to their continued support in the future. We also thank the US federal government, the U.S. Securities and Exchange Commission, the Internal Revenue Service, and various state governments, especially those of Indiana, Rhode Island, Connecticut, Texas, Arizona and North Carolina.
Mar 31, 2022
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, 2022. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
in '' crore, except per equity share data |
||||||
Particulars |
Standalone |
Consolidated |
||||
For the year ended |
YoY |
For the year ended |
YoY |
|||
March 31, |
growth |
March 31, |
growth |
|||
2022 |
2021 |
(%) |
2022 |
2021 |
(%) |
|
Revenue from operations |
1,03,940 |
85,912 |
21.0 |
1,21,641 |
1,00,472 |
21.1 |
Other income, net |
3,224 |
2,467 |
30.7 |
2,295 |
2,201 |
4.3 |
Total income |
1,07,164 |
88,379 |
21.3 |
1,23,936 |
1,02,673 |
20.7 |
Expenses |
||||||
Cost of sales |
69,629 |
55,541 |
25.4 |
81,998 |
65,413 |
25.4 |
Selling and marketing expenses |
4,125 |
3,676 |
12.2 |
5,156 |
4,627 |
11.4 |
General and administration expenses⢠|
4,787 |
4,559 |
5.0 |
6,472 |
5,810 |
11.4 |
Total expenses |
78,541 |
63,776 |
23.2 |
93,626 |
75,850 |
23.4 |
Profit / loss before finance cost and tax expenses |
28,623 |
24,603 |
16.3 |
30,310 |
26,823 |
13.0 |
Finance cost |
128 |
126 |
1.6 |
200 |
195 |
2.6 |
Profit before tax |
28,495 |
24,477 |
16.4 |
30,110 |
26,628 |
13.1 |
Profit before tax (% of revenue) |
27.4 |
28.5 |
24.8 |
26.5 |
||
Tax expense |
7,260 |
6,429 |
12.9 |
7,964 |
7,205 |
10.5 |
Profit after tax |
21,235 |
18,048 |
17.7 |
22,146 |
19,423 |
14.0 |
Profit after tax (% of revenue) |
20.4 |
21.0 |
18.2 |
19.3 |
||
Total other comprehensive income / (loss), net of tax |
(48) |
191 |
182 |
306 |
||
Total comprehensive income for the year attributable to the owners of the Company |
21,187 |
18,239 |
22,293 |
19,651 |
||
Profit attributable to owners of the Company |
21,235 |
18,048 |
22,110 |
19,351 |
||
Non-controlling interests |
- |
- |
36 |
72 |
||
Earnings per share (EPS) |
||||||
Basic |
50.27 |
42.37 |
18.6 |
52.52 |
45.61 |
15.2 |
Diluted |
50.21 |
42.33 |
18.6 |
52.41 |
45.52 |
15.1 |
1 crore = 10 million
Notes:
The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS).
Equity shares are at par value of ''5 per share.
(1) Includes impairment of capital assets of ''283 crore under CSR expense in the Standalone financial statements of the Company, consequent to the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. During the year ended March 31, 2021, the Company intended to transfer its CSR capital assets created prior to January 2021 to a controlled subsidiary and the same has been completed on obtaining the requisite approvals in the year ended March 31, 2022. The recoverable amount of capital assets is expected to exceed the carrying amount including in the period subsequent to the transfer to a controlled subsidiary, hence no impairment charge has been recorded in the Consolidated financial statements.
Financial position |
in '' crore, except equity share data |
|||
Particulars |
Standalone |
Consolidated |
||
As at March 31, |
As at March 31, |
|||
2022 |
2021 |
2022 |
2021 |
|
Net current assets |
27,461 |
30,660 |
33,582 |
36,868 |
Property, plant and equipment (including capital work-in-progress) |
11,795 |
11,836 |
13,491 |
13,482 |
Right-of-use assets |
3,311 |
3,435 |
4,823 |
4,794 |
Goodwill and other intangible assets |
243 |
234 |
7,902 |
8,151 |
Other non-current assets |
31,601 |
30,152 |
24,484 |
21,226 |
Total assets |
99,387 |
93,939 |
1,17,885 |
1,08,386 |
Non-current lease liabilities |
3,228 |
3,367 |
4,602 |
4,587 |
Other non-current liabilities |
1,877 |
1,419 |
3,944 |
3,152 |
Retained earnings - Opening balance |
57,518 |
52,419 |
62,643 |
56,309 |
Add: |
||||
Profit for the year |
21,235 |
18,048 |
22,110 |
19,351 |
Transfer from Special Economic Zone Re-investment Reserve on utilization |
1,012 |
967 |
1,100 |
1,039 |
Less: |
||||
Dividends |
(12,700) |
(9,158) |
(12,655) |
(9,120) |
Buyback of equity shares (including tax on buyback) |
(8,822) |
- |
(8,822) |
- |
Transfer to general reserve |
- |
(1,554) |
(10) |
(1,554) |
Transfer to Special Economic Zone Re-investment Reserve |
(2,794) |
(3,204) |
(3,054) |
(3,354) |
Payment towards acquisition of minority interest |
- |
- |
1 |
(28) |
Retained earnings - Closing balance |
55,449 |
57,518 |
61,313 |
62,643 |
Equity share capital |
2,103 |
2,130 |
2,098 |
2,124 |
Other reserves and surplus⢠|
11,750 |
11,831 |
10,415 |
10,243 |
Other comprehensive income |
4 |
52 |
1,524 |
1,341 |
Non-controlling interest |
- |
- |
386 |
431 |
Total equity |
69,306 |
71,531 |
75,736 |
76,782 |
Total equity and liabilities |
99,387 |
93,939 |
1,17,885 |
1,08,386 |
(1) Excluding retained earnings |
Introduction
Approaching Strategy Delivering
value creation review value
Governance
Statutory Financial
reports statements
Board''s report
BRSR
Based on consolidated financial statements
Revenue distribution by geographical segments (in %) Revenue distribution by offerings (in %)
Revenue distribution by business segments (in %)
32.4 32.0
? 2021 SS 2022
(,) FS - Includes enterprises in Financial Services and Insurance
(2) Retail - Includes enterprises in Retail, Consumer Packaged Goods and Logistics
(3) COM - Includes enterprises in Communication, Telecom OEM and Media
(4) EURS - Includes enterprises in Energy, Utilities, Resources and Services
(5) MFG - Includes enterprises in Manufacturing
(6) Hi-Tech - Includes enterprises in Hi-Tech
(7) LS - Includes enterprises in Life Sciences and Healthcare
(8) Others - Includes segments of businesses in India, Japan, China, Infosys Public Services and other enterprises in public services
72
Infosys Integrated Annual Report 2021-22
At Infosys, as we continue in our endeavor to fight waves of the COVID-19 pandemic, our priority remains the safety and well-being of our employees, and business continuity for our clients. Business continuity programs were tested and practiced, and the processes were proven to be resilient. We received the ISO 22301 Business Continuity Management System certification for being a company with resilient processes.
Considering employee safety as paramount, we implemented elaborate support measures for employees during the three COVID-19 waves in India, and at our global locations. We operated dedicated COVID Care Centers in 14 cities in India and also established tie-ups with more than 1,500 hospitals in 323 cities in India for the treatment of employees and their families. We also established a 24x7 war room and help-desk-coordinated support measures, such as tie-ups with testing labs and ambulance services providers, video consultation with doctors, COVID leave provision, insurance coverage, oxygen concentrators, medicines, fresh food, and counselling support. During the COVID waves, we provided emergency support (hospital beds / ventilators / plasma / oxygen) for over 6,100 employees / family members and addressed more than 78,000 queries for COVID medical support. Some of these support measures were also provided at global locations as required.
We also leveraged our technological expertise, creating mobile application ''Apthamitra'' to help local governments in their fight against COVID-19.
Vaccination efforts: We facilitated Company-sponsored vaccination drives in India for employees and five dependents, including booster doses. We arranged vaccination centers at our campuses in India and also conducted vaccination camps in major cities for the benefit of employees working from home, away from DC locations. As on March 31,2022, 96.1% of employees in India were vaccinated with at least one dose, and 90% were fully vaccinated.
At global locations, we encouraged employees to avail vaccinations provided by the governments.
Work from home (WFH): At the onset of the pandemic at 2020, to ensure employee safety and business continuity, we were able to transition 99% of employees globally to a work from home arrangement. Further, based on client requirements and the COVID situation, WFH continued as required in fiscal 2022. We have been able to virtually engage over 1,50,000 employees through more than 900 initiatives, and employee satisfaction with these initiatives has been rated at an all-time high of 91% across locations.
Wellness: Amid these transitions and pandemic-related uncertainties, the well-being of our employees has become a critical focal point. Through concentrated efforts over the last 24 months, we have implemented several well-being initiatives for our employees globally, including sessions with experts on mental health, self-care and women''s health, along with sessions on creating a healthy work-life balance. We have also developed a virtual General Practice service in Europe, where employees can schedule video consultations, without a physical visit.
Client support: Our focus on our client commitments remained unwavering through this period, reflecting in the record number of large deals we secured even while working remotely. With our operations teams ensuring smooth WFH processes and remote collaboration for our 3,14,000 global workforce, we were able to ensure that client service level agreements (SLAs) were met and project milestones delivered on time. However, remote working conditions also multiplied cybersecurity risks, not just for us, but for clients as well. Being an early adopter of advanced cybersecurity strategies, including the setting up of seven Cyber Defence Centers in India, the US and Europe, we could minimize threats to our operations as well as offer cybersecurity solutions to our clients.
We continued to provide critical support to clients around the world in essential services such as banking, healthcare and communications. Although travel was ruled out for most of the fiscal, we leveraged cloud and other digital transformation offerings to bring in new business, ensuring maximization of benefits to our shareholders.
Meeting and learning online: As an organization, our external communication had to transition to new virtual models as well. Events, such as quarterly results, analyst meetings and the Annual General Meeting, have been executed successfully leveraging our in-house platforms such as Infosys Meridian.
All recruitment drives have also been conducted virtually. Our online learning platform, Lex, and other virtual programs allow our training programs to continue unaffected. In fiscal 2022, the number of employees leveraging Lex rose by 35.5% from the previous fiscal. Leveraging initiatives like Skill Tags and Digital Quotient has enabled learning and reskilling of talent to proceed at an incredible pace. Digital Quotient acts as a guide-on-the-go to ensure digital preparedness for our talent, while Skill Tags allow employees to move beyond learning to establish their expertise in new-age / niche technology spaces. The number of Skill Tagged employees increased steadily during fiscal 2022, growing by 47% over fiscal 2021. Cloud (AWS, Azure), SAP and Python continued to feature as the most sought-after skills for certification. Overall, we had more than 1,60,000 employees who undertook various certifications.
At Infosys, even amid an unprecedented global crisis, we continue to balance success as a business with exemplary governance and responsiveness to the needs of all our stakeholders.
Effective fiscal 2020, the Company expects to return approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and / or share buyback and / or special dividends, 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 and buyback include applicable taxes.
In line with the Capital Allocation Policy, the Board, at its meeting held on April 14, 2021, approved the buyback of equity shares, from the open market route through the Indian stock exchanges, amounting to ''9,200 crore (Maximum Buyback Size, excluding buyback tax) at a price not exceeding ''1,750 per share (Maximum Buyback Price), subject to shareholders'' approval in the ensuing Annual General Meeting (AGM).
The shareholders approved the proposal of buyback of equity shares recommended by the Board of Directors in the AGM held on June 19, 2021.
The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchange. The buyback of equity shares through the stock exchanges commenced on June 25, 2021 and was completed on September 8, 2021. During this buyback period, the Company purchased and extinguished a total of 5,58,07,337 equity shares from the stock exchanges at a volume weighted average buyback price of ''1,648.53 per equity share comprising 1.31% of the pre-buyback paid-up equity share capital of the Company. The buyback resulted in a cash outflow of ''9,200 crore (excluding transaction costs and tax on buyback). The Company funded the buyback from its free reserves including Securities Premium as explained in Section 68 of the Companies Act, 2013.
During the year ended March 31, 2022, the Company paid an interim dividend of ''15 per share and announced a final dividend of ''16 per share, subject to shareholders'' approval in the ensuing AGM. After returning the above amounts, the Company would have returned approximately 73% of the free cash flow for fiscals 2020, 2021 and 2022 through dividends and buybacks, in line with the Capital Allocation Policy.
The Capital Allocation Policy is available on our website, at
https://www.infosys.com/investors/corporate-governance/
documents/capital-allocation-policy.pdf.
Our principal sources of liquidity are cash and cash equivalents, investments and the cash flow that we generate from our operations. 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 requirements. Liquidity enables us to be agile and ready for meeting unforeseen strategic and business needs.
As of March 31,2022, we had ''27,461 crore in working capital on a standalone basis, and ''33,582 crore on a consolidated basis.
Consolidated cash and investments stand at ''29,950 crore on a standalone basis and ''37,419 crore on a consolidated basis as on March 31,2022, as against ''30,764 crore on a standalone basis, and ''38,660 crore on a consolidated basis as on March 31, 2021.
Consolidated cash and investments, on both standalone and consolidated basis, include deposits with banks and financial institutions with high credit ratings by international and domestic credit rating agencies. As a result, liquidity risk of cash and cash equivalents is limited. Ratings are monitored periodically. Liquid assets also include investments in liquid mutual fund units, fixed maturity plan securities, certificates of deposit (CDs), commercial paper, quoted bonds issued by government and quasi-government organizations, and nonconvertible debentures. 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. Investments made in non-convertible debentures are issued by government-owned institutions and financial institutions with high credit rating. We invest after considering counterparty risks based on multiple criteria including Tier-I capital, capital adequacy ratio, credit rating, profitability, NPA levels and deposit base of banks and financial institutions.
The details of these investments are disclosed under the ''non-current and current investments'' section in the Standalone and Consolidated financial statements in this Integrated Annual Report.
This year, on a standalone basis, additions to tangible assets was ''2,381 crore. This comprises ''1,100 crore in infrastructure and ''1,281 crore for investment in computer equipment.
In the previous year, we had additions to tangible assets of ''2,015 crore. This comprised ''1,039 crore in infrastructure, ''975 crore for investment in computer equipment, and ''1 crore in vehicles.
This year, on a consolidated basis, additions to tangible assets was ''2,716 crore. This comprises ''1,174 crore in infrastructure and ''1,542 crore in computer equipment.
In the previous year, we had additions to tangible assets of ''2,231 crore. This comprised ''1,071 crore in infrastructure, ''1,159 crore for investment in computer equipment and ''1 crore in vehicles.
This year, on a standalone basis, additions to right-of-use (ROU) assets was ''374 crore. This comprises ''306 crore in buildings, and ''68 crore in computer equipment.
In the previous year, we had additions to ROU assets of ''1,109 crore. This comprised ''1,017 crore in land and buildings, and ''92 crore in computer equipment.
This year, on a consolidated basis, additions to ROU assets was ''914 crore. This comprises ''449 crore in buildings, ''459 crore in computer equipment and ''6 crore in vehicles.
The Company recommended / declared dividend as under:
In the previous year, we had additions to ROU assets of ''1,394 crore. This comprised ''1,241 crore in land and buildings,
''140 crore for investment in computer equipment and ''13 crore in vehicles.
Fiscal 2022 |
Fiscal 2021 |
|||
Dividend per share (in '') |
Dividend payout (in '' crore) |
Dividend per share (in '') |
Dividend payout (in '' crore) |
|
Interim dividend |
15.00 |
6,308 |
12.00 |
5,112 |
Final dividend |
(1)16.00 |
6,731 |
15.00 |
6,391 |
Total dividend |
31.00 |
27.00 |
||
Payout ratio (interim and final dividend)* |
(2)57.2% |
52.2% |
Note:
The Company declares and pays dividend in Indian rupees. Companies are required to pay / distribute dividend after deducting applicable withholding income taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
(1) Recommended by the Board of Directors, at its meeting held on April 13, 2022. The payment is subject to the approval of the shareholders at the ensuing AGM of the Company to be held on June 25, 2022. The record date for the purposes of the final dividend will be June 01, 2022 and will be paid on June 28, 2022.
(2) Our present Capital Allocation Policy is to pay approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semiannual dividends and / or share buyback and / or special dividends, 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. Including buyback, the Company would have returned 73% of the free cash flow for the years ended March 31, 2020, 2021 and 2022.
* Payout ratio is computed as a percentage of Free cash flow prepared under IFRS.
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 Integrated Annual Report.
We do not propose to transfer any amount to general reserve on declaration of dividend.
We have not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.
There were no contracts, arrangements or transactions entered into during fiscal 2022 that fall under the scope of Section 188(1) of the Companies Act, 2013. As required under the Companies Act, 2013, the prescribed Form AOC-2 is appended as Annexure 2 to the Board''s report.
In terms of the provisions of Regulation 34 of the Listing Regulations, the Management''s discussion and analysis is set out in this Integrated Annual Report.
In terms of the provisions of Section 134 of the Companies Act, 2013, a Risk management report is set out in this Integrated Annual Report.
The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and Securities and Exchange Board of India (SEBI) regulations are provided in Annexure 8 to the Board''s report.
There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.
Our strategic objective is to build a sustainable and resilient organization that remains relevant to the agenda of our clients, while creating growth opportunities for our employees, generating profitable returns for our investors and contributing to the communities that we operate in.
Our clients and prospective clients are faced with transformative business opportunities due to advances in software and computing technology. These organizations are dealing with the challenge of having to reinvent their core offerings, processes and systems rapidly and position themselves as ''digitally enabled''. The current economic climate and volatility have caused enterprises to accelerate their adoption of digital technologies - to enhance organizational resilience, get competitive advantage and optimize cost structures. The journey
to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices. Our strategy is to be a navigator for our clients as they ideate, plan and execute their journey to a digital future.
In fiscal 2022, we continued to execute our four-pronged strategy to strengthen our relevance to clients and drive accelerated value creation. We believe the investments we have made, and continue to make, in our strategy will enable us to advise and help our clients as they tackle these market conditions, especially in the areas of digitization of processes, migration to cloud-based technologies, workplace transformation, business model transformation, data analytics, enhanced cybersecurity controls and cost structure optimization in IT. Further, we have successfully enabled our employees worldwide to work remotely and securely - thus achieving the operational stability to deliver on client commitments and ensuring our own business continuity.
For details of our continued investments and outcomes of our strategic initiatives, refer to the Strategy section of the Integrated Report.
Our go-to-market business units and solutions are detailed in the Infosys at a glance section of the Integrated Report.
There has been a net movement of 1 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2022 stands at 53.84 million sq. ft. We have presence in 54 countries across 247 locations as on March 31, 2022.
Infosys has a systematic M&A approach aimed to strengthen digital services capabilities, deepen industry expertise, and expand geographical footprint.
On March 22, 2022, Infosys Consulting Pte. Ltd. (a wholly-owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire oddity, a Germany-based digital marketing, experience, and commerce agency, for a total consideration of up to â¬50 million (approximately ?420 crore), which includes earn-out, management incentives and bonuses. This acquisition is expected to strengthen the Group''s creative, branding and experience design capabilities in Germany and across Europe.
To consummate this transaction, Infosys Consulting Pte. Ltd. has simultaneously acquired Infosys Germany GmBH (formerly Kristall 247. GmBH).
We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation digital services. At the beginning of the year, we had 24 direct subsidiaries and 62 step-down subsidiaries. As on March 31,2022, we have 27 direct subsidiaries and 50 step-down subsidiaries. The changes
in subsidiaries during the year are included in the Standalone financial statements of the Company.
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 Integrated Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure I to the Board''s report. The statement also provides details of the performance and financial position of each of the subsidiaries, along with the changes that occurred, during fiscal 2022.
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 its subsidiaries, are available on our website, www.infosys.com.
Our professionals are our most important assets. We are committed to hiring and retaining the best talent and being among the industry''s leading employers. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustained high performance. Our human resource management focuses on allowing our employees to develop their skills, grow in their career and navigate their next.
Infosys'' goal has always been to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. Towards this, the Company has set up the Anti-Sexual Harassment Initiative (ASHI), which proudly completes 22 years of enabling a positive and safe work environment for our employees. Our ASHI practices have set an industry benchmark as it ranked first among 350 companies that participated in an external survey on the best anti-sexual harassment initiatives in 2017, 2019, 2020 and 2021.
Infosys has constituted an Internal Committee (IC) in all the development centers of the Company in India to consider and resolve all sexual harassment complaints reported by women. The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted and decisions made by the IC at the respective locations, and a senior woman employee is the presiding officer over every case. Half of the total members of the IC are women. The role of the IC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. In the last few years, the IC has worked extensively on creating awareness on relevance of sexual harassment issues in the new normal by using brand new and innovative measures to help employees understand the forms of sexual harassment while working remotely. The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability Report of this Integrated Annual Report.
The Company had 2,51,376 employees on standalone basis and 3,14,015 employees on consolidated basis as of March 31, 2022.
The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) (as required under the Companies Act, 2013) to the median of employees'' remuneration, and the list of top 10 employees in terms of remuneration drawn, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, form part of Annexure 3 to this Board''s report. The statement containing particulars of employees employed throughout the year and in receipt of remuneration of ''1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of ''8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate exhibit forming part of this report and is available on the website of the Company, at https://www.infosys.com/ investors/reports-filings/Documents/exhibitboards-report2022.pdf. The Integrated Annual Report and accounts are being sent to the shareholders excluding the aforesaid exhibit. Shareholders interested in obtaining this information may access the same from the Company website. In accordance with Section 136 of the Companies Act, 2013, this exhibit is available for inspection by shareholders through electronic mode.
Notes:
1. The employees mentioned in the aforesaid exhibit have / had permanent employment contracts with the Company.
2. The employees are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
3. The details of employees posted outside India and in receipt of a remuneration of ''60 lakh or more per annum or ''5 lakh or more a month can be made available on specific request.
The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.
Infosys Expanded Stock Ownership Program 2019 (âthe 2019 Plan")
On June 22, 2019, pursuant to approval by the shareholders in the AGM, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 Plan shall not exceed 5,00,00,000 equity shares. To implement the 2019 Plan, up to 4,50,00,000 equity shares may be issued by way of secondary acquisition of shares by the Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019 Plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (the nomination and remuneration committee). The performance parameters will be based on a combination of relative Total Shareholder
Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the Company as decided by the administrator.
Each of the above performance parameters will be distinct for the purposes of calculation of the quantity of shares to vest based on performance. These instruments will generally vest between a minimum of one and a maximum of three years from the grant date.
2015 Stock Incentive Compensation Plan (âthe 2015 Plan")
On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Plan. The maximum number of shares under the 2015 Plan shall not exceed 2,40,38,883 equity shares (not adjusted for bonus issue). These instruments will generally vest over a period of four years and the Company expects to grant the instruments under the 2015 Plan over the period of four to seven years. These RSUs and stock options shall be exercisable within the period as approved by the nomination and remuneration committee. The exercise price of the 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.
Consequent to the September 2018 bonus issue, all the then outstanding options granted under the stock option plan have been adjusted for bonus shares.
The total number of equity shares and American Depositary Receipts (ADRs) to be allotted to the employees of the Company and its subsidiaries under the 2015 Plan does not cumulatively exceed 1% of the issued capital. For the shares and ADRs issued under the 2019 Plan, the cumulative amount does not exceed 1.15% of the issued capital. The 2019 Plan and 2015 Plan are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time, and there has been no material change to the plans during the fiscal.
The details of the 2019 Plan and 2015 Plan, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are available on the Company''s website, at https://www.infosys.com/investors/reports-filings/Documents/ disclosures-pursuant-SEBI-regulations2022.pdf.
The details of the 2019 Plan and 2015 Plan form part of the Notes to accounts of the financial statements in this Integrated Annual Report.
Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Infosys, the 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 2022 forms part of this Integrated Annual Report.
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, regional and industry experience, cultural and geographical background, age, ethnicity, race, gender, knowledge and skills including expertise in financial, global business, leadership, technology, mergers & acquisitions, Board service, strategy, sales and marketing, Environment, Social and Governance (ESG), risk and cybersecurity and other domains, which will ensure that Infosys retains its competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity.
The policy is available on our website, at
https://www.infosys.com/investors/corporate-governance/
documents/board-diversity-policy.pdf.
Additional details on Board diversity are available in the Corporate governance report that forms part of this Integrated Annual Report.
The Board met eight times during the financial year. The meeting details are provided in the Corporate governance report that forms part of this Integrated Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.
The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2022, the Board had eight members, one of who is an executive director, a nonexecutive and non-independent director and six independent directors. Two of the independent directors of the Board are women. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the Corporate governance report that forms part of this Integrated Annual Report.
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.
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.
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.
The nomination and remuneration committee engaged Egon Zehnder, external consultants, to conduct Board evaluation for the year. The evaluation of all the directors, committees, Chairman of the Board, and the Board as a whole, was conducted based on the criteria and framework adopted by the Board. The Board evaluation process was completed during fiscal 2022. The evaluation parameters and the process have been explained in the Corporate governance report.
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.
The shareholders approved the following appointments during the 40th AGM held on June 19, 2021:
⢠Bobby Parikh, as an independent director of the Board effective July 15, 2020
⢠Chitra Nayak, as an independent director of the Board effective March 25, 2021
Director liable to retire by rotation
As per the provisions of the Companies Act, 2013, Nandan. M. Nilekani, the non-executive and non-independent chairman, whose office is liable to retire at the ensuing AGM, being eligible, seeks reappointment. Based on performance evaluation and the recommendation of the nomination and remuneration committee, the Board recommends his reappointment. The notice convening the 41st AGM, to be held on June 25, 2022, sets out the details.
Reappointment of independent director
D. Sundaram was appointed as an independent director for the first term of five years effective July 14, 2017. His office of directorship is due for retirement on July 13, 2022. Based on the recommendation of the nomination and remuneration committee and after taking into account the performance evaluation of his first term of five years and considering the knowledge, acumen, expertise, experience and the substantial contribution he brings to the Board, the committee has recommended the appointment of D. Sundaram to the Board for a second term of five years. The Board, at its meeting held on April 13, 2022, approved the reappointment of D. Sundaram as an independent director of the Company with effect from July 14, 2022 to July 13, 2027, whose office shall not be liable to retire by rotation.
The Board recommends the reappointment to the shareholders. The notice convening the 41st AGM, to be held on June 25, 2022, sets out the details.
Retirements and resignations
U.B. Pravin Rao, COO and Whole-time Director, retired as member of the Board effective December 12, 2021. The Board expressed its deep sense of appreciation for Pravin''s leadership over his 35 years of service with the Company and acknowledges his immense efforts and contributions towards global delivery and business enablement. The disclosure in this regard is available at https://www.infosys.com/investors/documents/retirement-whole-time-director-13dec2021.pdf.
As on March 31, 2022, the Board had six committees: the audit committee, the corporate social responsibility committee, the nomination and remuneration committee, the risk management committee, the stakeholders relationship committee and the Environment, Social and Governance (ESG) committee. All committees comprise only independent directors, one of whom is chosen as the chairperson of the committee.
The Board, at its meeting held on April 14, 2021, instituted the ESG committee.
During the year, all recommendations made by the committees were approved by the Board.
A detailed note on the composition of the Board and its committees is provided in the Corporate governance report.
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the ''Internal control systems and their adequacy'' section in the Management''s discussion and analysis, which forms part of this Integrated Annual Report.
At Infosys, while our employees operated efficiently as a remote and hybrid workforce, we continued to remain vigilant on the evolving cybersecurity threat landscape. In our endeavor to maintain a robust cybersecurity posture, the team has remained abreast of emerging cybersecurity events globally, so as to achieve higher compliance and its continued sustenance. We continue to be certified against the Information Security Management System (ISMS) Standard ISO 27001:2013. Additionally, we have also been attested on SSAE 18 SOC 1 and SOC 2 by an independent audit firm. During the year, our focus on our cybersecurity personnel''s training and reskilling went ahead as planned, together with our overall initiatives on improving cybersecurity processes and technologies.
Our periodic stakeholder interactions ensured that we have sponsorship from the senior management and all critical stakeholders in a timely manner.
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report.
In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at
https://www.infosys.com/investors/reports-filings/documents/
The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.
The Company''s shares are listed on BSE Limited and the National Stock Exchange of India Limited, and its ADSs are listed on the New York Stock Exchange (NYSE).
During the year, the Company has transferred the unclaimed and un-encashed dividends of ''2,02,58,692. Further, 4,154 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. The details of the resultant benefits arising out of shares already transferred to the IEPF, year-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividend account up to the year, and the corresponding shares, which are liable to be transferred, are provided in the Shareholder information section of the Corporate governance report and are also available on our website, at www.infosys.com/IEP .
The financial statements are prepared in accordance with the 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 Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after. 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, 2022, the applicable accounting standards have been followed and there are no material departures.
⢠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 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 the Companies Act, 2013 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.
⢠The Auditors'' Report for fiscal 2022 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements in this Integrated Annual Report.
⢠The Secretarial Auditors'' Report for fiscal 2022 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors'' Report is enclosed as Annexure 5 to the Board''s report.
⢠The Auditor''s certificate confirming compliance with conditions of corporate governance as stipulated under Listing Regulations, for fiscal 2022 is enclosed as Annexure 4 to the Board''s report.
⢠The Secretarial Auditor''s certificate on the implementation of share-based schemes in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, will be made available at the AGM, electronically.
Auditors Statutory auditors
Under Section 139(2) of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years and each such term would require approval of the shareholders. In line with the requirements of the Companies Act, 2013, Statutory Auditor M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration Number 117366W/ W-100018) were appointed as Statutory Auditor of the Company at the 36th AGM held on June 24, 2017 to hold office from the conclusion of the said meeting till the conclusion of the 41st AGM to be held in the year 2022. The term of office of M/s Deloitte Haskins & Sells LLP, as Statutory Auditors of the Company will conclude from the close of the forthcoming AGM of the Company.
The Board of Directors of the Company, based on the recommendation of the audit committee, at its meeting held on April 13, 2022, reappointed M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration Number 117366W/ W-100018) as the Statutory Auditor of the Company to hold office for a second term of five consecutive years from the conclusion of the 41st AGM till the conclusion of the 46th AGM to be held in the year 2027 and will be placed for the approval of the shareholders at the ensuing AGM.
During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under the Companies Act, 2013, the Code of Ethics issued by the Institute of Chartered Accountants of India and the U.S.
Securities and Exchange Commission and the Public Company Accounting Oversight Board.
The Board recommends their reappointment to the shareholders. The notice convening the 41st AGM to be held on June 25, 2022 sets out the details.
Secretarial auditor
Makarand M. Joshi & Co., Practicing Company Secretaries, are appointed as secretarial auditor of the Company for fiscal 2023, as required under Section 204 of the Companies Act, 2013 and Rules thereunder.
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
Infosys has been an early adopter of CSR initiatives. The Company works primarily through the Infosys Foundation, towards supporting projects in the areas of protection of national heritage, restoration of historical sites, and promotion of art and culture; destitute care and rehabilitation; environmental sustainability and ecological balance; promoting education, and enhancing vocational skills; promoting healthcare including preventive healthcare; and rural development. In fiscal 2022, the Company''s CSR efforts included COVID-19 relief in multiple states.
The Company''s CSR Policy is 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 6 to the Board''s report. Infosys also undertakes CSR initiatives outside of India, in Australia, Europe and the US. The initiatives in the US are carried out through Infosys Foundation USA. The said initiatives are over and above the statutory requirement.
The highlights of the initiatives undertaken by the Company, Infosys Foundation, and Infosys Foundation USA form part of this Integrated Annual Report.
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 7 to the Board''s report.
In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting ("the Committee") to finalize business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBC). Through its report, the Committee recommended that BRR be rechristened BRSR, where disclosures are based on ESG parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting.
SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, while disclosure is voluntary for fiscal 2022 .
The Committee Report encourages companies to report their performance for fiscal 2022 to be better prepared to adopt this framework from the next fiscal.
Infosys has adopted the BRSR voluntarily for fiscal 2022 to provide enhanced disclosures on ESG practices and priorities of the Company. The BRSR disclosures form a part of Infosys'' Integrated Annual Report 2021-22. In addition to this, we also publish a comprehensive ESG Report annually, based on the GRI standard. The non-financial sustainability disclosures in our Integrated Annual Report and ESG Report have been independently assured by KPMG. The ESG Report is available at https://www.infosys.com/sustainability/documents/infosys-esg-report-2021-22.pdf.
In October 2020, we launched our ESG Vision 2030. Our focus is steadfast on leveraging technology to battle climate change, conserving water and managing waste. On the social front, our emphasis is on the development of people, especially around digital skilling, improving diversity and inclusion, facilitating employee wellness and experience, delivering technology for good and energizing the communities we work in. We are also redoubling efforts to serve the interests of all our stakeholders, by leading through our core values and setting benchmarks in corporate governance. Our Board instituted an ESG committee on April 14, 2021, to discharge its oversight responsibility on matters related to organization-wide ESG initiatives, priorities, and leading ESG practices. The ESG committee reports to the Board and meets every quarter.
Mar 31, 2019
Dear members.
The Board of Directors hereby submits the report of the business and operations of your Company (âthe Companyâ or âInfosysâ), along with the audited financial statements, for the financial year ended March 31, 2019. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Results of our operations and state of affairs
in Rs. crore, except per equity share data
Particulars |
Standalone |
Consolidated |
||
For the year ended |
For the year ended |
|||
March 31, |
March 31, |
|||
2019 |
2018 |
2019 |
2018 |
|
Revenue from operations |
73,107 |
61,941 |
82,675 |
70,522 |
Cost of sales |
47,412 |
39,138 |
53,867 |
45,130 |
Gross profit |
25,695 |
22,803 |
28,808 |
25,392 |
Operating expenses |
||||
Selling and marketing expenses |
3,661 |
2,763 |
4,473 |
3,560 |
General and administration expenses |
4,225 |
3,562 |
5,455 |
4,684 |
Total operating expenses |
7,886 |
6,325 |
9,928 |
8,244 |
Operating profit |
17,809 |
16,478 |
18,880 |
17,148 |
Reduction in fair value of assets held for sale / disposal group held for sale1 |
(265) |
(589) |
(270) |
(118) |
Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from âHeld for Saleâ(2) |
(469) |
(451) |
||
Other income, net(3)(4) |
2,852 |
4,019 |
2,882 |
3,311 |
Profit before non-controlling interests / share in net loss of associate |
19,927 |
19,908 |
21,041 |
20,341 |
Share in net loss of associate, including impairment of associate2 |
â |
- |
â |
(71) |
Profit before tax |
19,927 |
19,908 |
21,041 |
20,270 |
Tax expense® |
5,225 |
3,753 |
5,631 |
4,241 |
Profit after tax |
14,702 |
16,155 |
15,410 |
16,029 |
Profit attributable to owners of the Company |
14,702 |
16,155 |
15,404 |
16,029 |
Non-controlling interests |
- |
- |
6 |
â |
Other comprehensive income |
||||
Items that will not be reclassified subsequently to profit or loss |
57 |
59 |
48 |
62 |
Items that will be reclassified subsequently to profit or loss |
22 |
(38) |
86 |
281 |
Total other comprehensive income, net of tax |
79 |
21 |
134 |
343 |
Total comprehensive income for the year attributable to owners of the Company |
14,781 |
16,176 |
15,538 |
16,372 |
Non-controlling interest |
- |
6 |
â |
|
Earnings per share (EPS)3 |
||||
Basic |
33.66 |
35.64 |
35.44 |
35.53 |
Diluted |
33.64 |
35.62 |
35.38 |
35.50 |
1 crore = 10 million
Notes : The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS).
(1) During the quarter ended December 31, 2017, on account of the conclusion of an Advance Pricing Agreement (APA) with the US Internal Revenue Service (IRS), the Company had reversed income tax expense provision of US$ 225 million (Rs.1,432 crore), which pertained to previous periods.
(2) During the year ended March 2018, Kallidus and Skava (together referred to as âSkavaâ) and Panaya were classified under âHeld for Saleâ, resulting in a reduction in fair value in respect of Panaya amounting to Rs. 118 crore. In the year ended March 31, 2019, a further reduction of Rs.270 crore was recorded in respect of Panaya and on reclassification of Panaya and Skava from âHeld for Saleâ, the Company recognized an adjustment in respect of excess of carrying amount over recoverable amount of Rs. 451 crore in respect of Skava.
In the Standalone financial statements of the Company, during the year ended March 31, 2018, investments in respect of these subsidiaries were reclassified under âHeld for Saleâ. On reclassification, these investments were measured at the lower of carrying amount and fair value less cost to sell and consequently, a reduction in the fair value of assets held for sale of Rs. 589 crore in respect of Panaya has been recognized in the Standalone Statement of Profit and Loss. During the year ended March 31, 2019, a further reduction of Rs.265 crore was recorded in respect of Panaya and on reclassification of these investments from âHeld for Saleâ, the Company recognized an adjustment in respect of excess of carrying amount over recoverable amount of Rs.469 crore in respect of Skava.
(3) Other income includes Rs. 51 crore and Rs. 262 crore for the years ended March 31, 2019 and March 31, 2018, respectively, in the Consolidated financial statements of the Company towards interest on income tax refund.
Other income includes Rs. 50 crore and Rs.257 crore for the years ended March 31, 2019 and March 31, 2018, respectively, in the Standalone financial statements of the Company towards interest on income tax refund.
(4) During the year ended March 31, 2018, the Company has written down the entire carrying value of the investment in its associate, DWA Nova LLC, amounting to Rs. 71 crore in the Consolidated Statement of Profit and Loss. Consequent to the above, the Company has written down the entire carrying value of the investment in its subsidiary, Infosys Nova Holdings LLC, amounting to Rs. 94 crore in the Standalone Statement of Profit and Loss.
(5) Equity shares are at par value of Rs. 5 per share and adjusted for the September 2018 bonus issue.
Financial position
in Rs. crore, except equity share data
Particulars |
Standalone |
Consolidated |
||
As at March |
As at March |
As at March |
As at March |
|
31, 2019 |
31, 2018 |
31, 2019 |
31, 2018 |
|
Cash and cash equivalents |
15,551 |
16,770 |
19,568 |
19,818 |
Current investments |
6,077 |
5,906 |
6,627 |
6,407 |
Assets held for sale4 |
â |
1,525 |
â |
2,060 |
Net current assets5 |
30,793 |
30,903 |
34,240 |
34,176 |
Property, plant and equipment^â (including capital work-in-progress) |
11,606 |
10,469 |
12,867 |
11,722 |
Goodwill(1) |
29 |
29 |
3,540 |
2,211 |
Other intangible assets(1) |
74 |
101 |
691 |
247 |
Other non-current assets |
20,998 |
21,188 |
14,762 |
15,693 |
Total assets |
78,930 |
75,877 |
84,738 |
79,890 |
Liabilities directly associated with assets held for sale(1) |
â |
â |
â |
324 |
Non-current liabilities |
789 |
713 |
1,094 |
861 |
Retained earnings â opening balance |
55,671 |
49,957 |
58,477 |
52,882 |
Add: |
||||
Profit for the year |
14,702 |
16,155 |
15,404 |
16,029 |
Transfer from Special Economic Zone Re-investment |
1,386 |
|||
Reserve on utilization6 |
582 |
1,430 |
617 |
|
Less: |
||||
Dividends including dividend distribution tax |
(13,768) |
(7,500) |
(13,712) |
(7,469) |
Transfer to general reserve |
(1,615) |
(1,382) |
(1,615) |
(1,382) |
Transfer to Special Economic Zone Re-investment |
||||
Reserve(4) |
(2,306) |
(2,141) |
(2,417) |
(2,200) |
Transferred to other reserves |
â |
â |
(1) |
â |
Retained earnings â closing balance |
54,070 |
55,671 |
57,566 |
58,477 |
Equity share capital® |
2,178 |
1,092 |
2,170 |
1,088 |
Other reserves and surplus7 |
6,368 |
6,723 |
4,309 |
4,589 |
Other comprehensive income |
95 |
16 |
903 |
769 |
Non-controlling interest |
â |
â |
58 |
1 |
Total equity® |
62,711 |
63,502 |
65,006 |
64,924 |
Total equity and liabilities |
78,930 |
75,877 |
84,738 |
79,890 |
Number of equity shares8 |
435,62,79,444 |
218,41,14,257 |
433,59,54,462 |
217,33,12,301 |
(1) During the year ended March 2018, Kallidus and Skava (together referred to as âSkavaâ) and Panaya were classified under âHeld for Saleâ, resulting in a reduction in fair value in respect of Panaya amounting to Rs. 118 crore. Accordingly, assets amounting to Rs.2,060 crore and liabilities amounting to Rs. 324 crore in respect of the disposal group had been classified under âHeld for Saleâ. In the year ended March 31, 2019, a further reduction of Rs. 270 crore was recorded in respect of Panaya and on reclassification of Panaya and Skava from âHeld for Saleâ, the Company recognized an adjustment in respect of excess of carrying amount over recoverable amount of Rs. 451 crore in respect of Skava.
In the Standalone financial statements of the Company, on reclassification, these investments were measured at the lower of carrying amount and fair value less cost to sell and consequently, a reduction in the fair value of assets held for sale of Rs. 589 crore in respect of Panaya has been recognized in the Standalone Statement of Profit and Loss during the year ended March 31, 2018. Accordingly, investments amounting to Rs. 1,525 crore in respect of these subsidiaries were reclassified under âHeld for Saleâ. During the year ended March 31, 2019, a further reduction of Rs.265 crore was recorded in respect of Panaya and on reclassification of these investments from âHeld for Saleâ, and an adjustment was recognized in respect of excess of carrying amount over recoverable amount of Rs.469 crore in respect of Skava.
(2) Excludes assets held for sale and liabilities directly associated with assets held for sale as at March 31, 2018.
(3) In line with the Capital Allocation Policy announced in April 2018, shareholders approved a buyback of equity shares from the open market route through Indian stock exchanges of up to Rs.8,260 crore (maximum buyback size) at a price not exceeding Rs. 800 per share (maximum buyback price). The buyback shall close within six months from the date of opening of the buyback, i.e. March 20, 2019, or such other period as may be permitted under the Companies Act, 2013 or SEBI (Buy-Back of Securities) Regulations, 2018.
Accordingly, during the year ended March 31, 2019, 1,26,52,000 equity shares were purchased from the stock exchange, which includes 18,18,000 shares that have been purchased but not extinguished as of March 31, 2019 and 36,36,000 shares that have been purchased but have not been settled and therefore not extinguished. The buyback of equity shares through the stock exchange commenced on March 20, 2019 and is expected to be completed by September 2019. Subsequent to the year end, the Company has purchased 81,31,000 shares till the date of the Boardâs report.
During the previous year, 11,30,43,478 equity shares (not adjusted for the September 2018 bonus issue) were bought back by the Company for a total amount of Rs.13,000 crore.
(4) 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.
(5) Excluding retained earnings.
Summary Profit and Loss - standalone
Particulars |
Year ended March 31, |
||||
2019 |
% of revenue |
2018 |
% of revenue |
YoY growth (%) |
|
Revenue from operations |
73,107 |
100.0 |
61,941 |
100.0 |
18.0 |
Gross profit |
25,695 |
35.2 |
22,803 |
36.8 |
12.7 |
Selling and marketing expenses |
3,661 |
5.0 |
2,763 |
4.5 |
32.5 |
General and administration expenses |
4,225 |
5.8 |
3,562 |
5.7 |
18.6 |
Operating profit |
17,809 |
24.4 |
16,478 |
26.6 |
8.1 |
Profit before tax |
19,927 |
27.3 |
19,908 |
32.1 |
0.1 |
Net profit(1) |
14,702 |
20.1 |
16,155 |
26.1 |
(9.0) |
(1) Includes the following :
- Reversal of income tax provision of US$ 225 million (Rs. 1,432 crore) pertaining to previous periods on account of conclusion of APA during the previous year
- During the year ended March 2018, recorded a reduction in fair value in respect of Panaya amounting to Rs. 589 crore. In the year ended March 31, 2019, a further reduction of Rs.265 crore was recorded in respect of Panaya.
- During the year ended March 31, 2019, on reclassification of Panaya and Skava from âHeld for Saleâ, the Company recognized an adjustment in respect of excess of carrying amount over recoverable amount of Rs.469 crore in respect of Skava.
(2) Adjusted for the September 2018 bonus issue.
Summary Profit and Loss - consolidated
Particulars |
Year ended March 31, |
||||
2019 |
% of revenue |
2018 |
% of revenue |
YoY growth (%) |
|
Revenue from operations |
82,675 |
100.0 |
70,522 |
100.0 |
17.2 |
Gross profit |
28,808 |
34.8 |
25,392 |
36.0 |
13.5 |
Selling and marketing expenses |
4,473 |
5.4 |
3,560 |
5.1 |
25.6 |
General and administration expenses |
5,455 |
6.6 |
4,684 |
6.6 |
16.5 |
Operating profit |
18,880 |
22.8 |
17,148 |
24.3 |
10.1 |
Profit before tax |
21,041 |
25.5 |
20,270 |
28.7 |
3.8 |
Net profit® |
15,410 |
18.6 |
16,029 |
22.7 |
(3.9) |
(1) Includes impact on account of :
- Reversal of income tax provision of US$ 225 million (Rs. 1,432 crore) pertaining to previous periods on account of conclusion of an APA during the previous year
- Recorded a reduction in fair value in respect of Panaya amounting to Rs. 118 crore and Rs.270 crore, for the years ended March 31, 2018 and March 31, 2019, respectively
- On reclassification of Panaya and Skava from âHeld for Saleâ, the Company recognized an adjustment in respect of excess of carrying amount over recoverable amount of Rs. 451 crore in respect of Skava during the year ended March 31, 2019
(2) Adjusted for the September 2018 bonus issue
(3) Based on IFRS USD financial statements
(4) FS â Includes enterprises in Financial Services and Insurance
(5) Retail â Includes enterprises in Retail, Consumer Packaged Goods and Logistics
(6) COM â Includes enterprises in Communication, Telecom OEM and Media
(7) EURS â Includes enterprises in the Energy, Utilities, Resources and Services
(8) MFG â Includes enterprises in Manufacturing
(9) Hi-Tech â Includes enterprises in Hi-Tech
(10) LS â Includes enterprises in Life Sciences and Healthcare
(11) Others â Includes segments of businesses in India, Japan, China, Infosys Public Services and other public services enterprises.
Capital expenditure on tangible assets -standalone
This year, on a standalone basis, we incurred a capital expenditure of Rs. 3,040 crore. This comprises Rs. 2,008 crore in infrastructure, Rs. 1,023 crore for investment in computer equipment, and Rs. 9 crore in vehicles.
In the previous year, we had incurred a capital expenditure of Rs. 1,823 crore. This comprised Rs. 1,422 crore in infrastructure, Rs. 396 crore for investment in computer equipment, and Rs. 5 crore in vehicles.
Capital expenditure on tangible assets -consolidated
This year, on a consolidated basis, we incurred a capital expenditure of Rs. 3,193 crore. This comprises Rs. 2,055 crore in infrastructure, Rs. 1,129 crore in computer equipment and Rs. 9 crore in vehicles.
In the previous year, we had incurred a capital expenditure of Rs. 1,955 crore. This comprised Rs. 1,479 crore in infrastructure, Rs. 471 crore for investment in computer equipment and Rs. 5 crore in vehicles.
Liquidity
Our principal sources of liquidity are cash and cash equivalents, current investments and the cash flow that we generate from our operations. 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 requirements. Liquidity enables us to be agile and ready for meeting unforeseen strategic and business needs. We believe that our working capital is sufficient to meet our current requirements.
As of March 31, 2019, we had Rs. 30,793 crore in working capital (working capital defined as current assets minus current liabilities) on a standalone basis, and Rs. 34,240 crore on a consolidated basis.
Liquid assets stand at Rs. 25,790 crore on a standalone basis and Rs. 30,690 crore on a consolidated basis as at March 31, 2019, as against Rs. 27,752 crore on a standalone basis, and Rs. 31,765 crore on a consolidated basis as on March 31, 2018. Liquid assets, on both standalone and consolidated basis, include deposits with banks and high-rated financial institutions, investments in liquid mutual funds, fixed maturity plan securities, tax-free bonds, government bonds and securities, non-convertible debentures, certificates of deposit (CDs), and commercial paper. 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. Investments made in non-convertible debentures are issued by government-owned institutions and financial institutions with high credit rating. The details of these investments are disclosed under the ânon-current and current investmentsâ section in the standalone and consolidated financial statements in this Annual Report.
Capital Allocation Policy
- In line with the Capital Allocation Policy announced in April 2018, the Board, at its meeting on January 11, 2019, approved the buyback of equity shares through the open market route through the Indian stock exchanges, amounting to Rs. 8,260 crore (maximum buyback size) at a price not exceeding Rs. 800 per equity share (maximum buyback price), subject to the shareholdersâ approval by way of a postal ballot. Further, the Board also approved a special dividend of Rs. 4 per share which resulted in a payout of Rs. 2,107 crore (including dividend distribution tax).
- The buyback is offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through Indian stock exchanges.
The shareholders approved the proposal of buyback of equity shares through the postal ballot that concluded on March 12, 2019. At the maximum buyback price of Rs. 800 per equity share and the maximum buyback size of Rs. 8,260 crore, the maximum indicative number of equity shares bought back would be 10,32,50,000 equity shares (maximum buyback shares) comprising approximately 2.36% of the paid-up equity share capital of the Company The Company will fund the buyback from its free reserves. The buyback of equity shares through Indian stock exchanges commenced on March 20, 2019 and is expected to be completed by September 2019. During the year ended March 31, 2019, 1,26,52,000 equity shares were bought back from the Indian stock exchanges. Subsequent to the year end, the Company has purchased 81,31,000 shares till the date of the Boardâs report.
After the execution of the above, along with the special dividend (including dividend distribution tax) of Rs. 2,633 crore already paid in June 2018, the Company would complete the distribution of Rs. 13,000 crore to the shareholders, which was announced as part of its Capital Allocation Policy in April 2018.
Basic EPS
Basic earnings per share decreased by 5.6% to Rs. 33.66 at the standalone level and by 0.3% to Rs. 35.44 at the consolidated level.
Dividend
Dividend per share declared is in line with the Capital Allocation Policy approved by the Board on April 13, 2018. The Company declared dividend as under :
Fiscal 2019 |
Fiscal 2018(1) |
|||
Dividend per share (in Rs.) |
Dividend Payout |
Dividend per share (in Rs.) |
Dividend Payout |
|
Interim dividend |
7.00 |
3,680 |
6.50 |
3,422 |
Final dividend |
(2) 10.50 |
(3) 5,504 |
10.25 |
5,349 |
Special dividend |
4.00 |
2,107 |
5.00 |
2,633 |
Total dividend |
21.50 |
21.75 |
||
Payout ratio(4) (interim and final dividend) |
(5) 68.6% |
69.8% |
Dividend payout includes dividend distribution tax
(1) Adjusted for the September 2018 bonus issue
(2) Recommended by the Board of Directors at its meeting held on April 12, 2019. The payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company to be held on June 22, 2019 and will be paid on June 25, 2019.
(3) Actual dividend payout will be based on the number of shares outstanding as on the book closure date.
(4) Our dividend policy is to pay up to 70% of free cash flow. 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.
(5) Based on the outstanding number of shares as on March 31, 2019.
The Register of Members and Share Transfer Books will remain closed on June 15, 2019 for the purpose of payment of the final dividend for the financial year ended March 31, 2019. The AGM is scheduled to be held on June 22, 2019 and the final dividend will be paid on June 25, 2019.
Bonus issue
The Board, at its meeting held on July 13, 2018, approved and recommended the issue of bonus shares to celebrate the 25th year of the Companyâs public listing in India and to further increase the liquidity of its shares. The shareholders approved the issue of bonus shares (vide postal ballot concluded on August 22, 2018). The Company had allotted 218,41,91,490 fully-paid-up equity shares of face value Rs. 5 each. A bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held have been allotted. The bonus shares were credited to the eligible shareholders as on the record date, i.e. September 5, 2018.
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. 1,470 crore to the general reserve on account of the declaration of dividend.
Fixed deposits
We have not accepted any fixed deposits, including from the public, 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 Boardâs report.
Managementâs discussion and analysis
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managementâs discussion and analysis is set out in this Annual Report.
Risk management report
In terms of the provisions of Section 134 of the Companies Act, 2013, a Risk management report is set out in this Annual Report.
Board policies
The details of the policies approved and adopted by the Board are provided in Annexure 9 to the Boardâs report.
Material changes and commitments affecting financial position between the end of the financial year and date of the report
Acquisition
Hitachi Procurement Service Co. Ltd
On April 1, 2019, Infosys Consulting Pte Limited (a wholly-owned subsidiary of Infosys Limited) acquired 81% of voting interests in Hitachi Procurement Service Co., Ltd. (HIPUS), Japan, a wholly-owned subsidiary of Hitachi Ltd, Japan for a total cash consideration of JPY 3.29 billion (approximately Rs. 206 crore), on fulfilment of closing conditions. The Company had paid an advance of JPY 3.29 billion (approximately Rs. 206 crore) to Hitachi towards cash consideration on March 29, 2019. HIPUS handles indirect materials purchasing functions for the Hitachi Group. The name of the Company â Hitachi Procurement Service Co., Ltd. â has been changed to HIPUS Co., Ltd. with effect from April 1, 2019.
As of April 12, 2019 (i.e., the date of adoption of financial statements by the Board of Directors), the Company is in the process of finalizing the accounting for acquisition of HIPUS, including allocation of purchase consideration to identifiable assets and liabilities.
2. Business description
Strategy
Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while creating growth opportunities for our employees and generating profitable growth for our investors.
Our clients and prospective clients are faced with transformative business opportunities due to advances in software and computing technology. These organizations are dealing with the challenge of having to reinvent their core offerings, processes and systems rapidly and position themselves as âdigitally enabledâ. The journey to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices. Our strategy is to be a navigator for our clients as they ideate on, plan and execute their journey to a digital future.
We have embraced a four-pronged strategy to strengthen our relevance to clients and drive accelerated value creation. Towards implementing the strategy, we will :
- Scale Agile Digital - Reskill our people
- Energize the core - Expand localization
Scale Agile Digital
We will continue to make targeted investments to rapidly accelerate our Agile Digital business. We define âdigitalâ as a set of use cases that drive business outcomes for our clients across five areas :
- Experience : Well-designed systems for digital marketing, omnichannel interaction, personalization and content management that can enhance customer experience
- Insight : AI-based systems for advanced analytics, leveraging Big Data
- Innovate : Engineering new and digital-first products and offerings leveraging Internet of Things and advanced industry Software-as-a-Service platforms
- Accelerate : The digitization of core systems by migrating to cloud technologies, abstracting APIs, modernizing legacy systems and infrastructure, integrating applications and leveraging Robotic Process Automation (RPA)
- Assure : Implementing advanced cyber-security systems and specialized validation of software systems.
We use our Digital Navigation Framework to help our clients transform their organization and achieve these business outcomes. The framework is a set of accelerators that, when combined together, fast-track the process of transformation. These accelerators are distinct capabilities in the areas of Design, Proximity centers, Agile methodologies, Automation assets and Learning platforms.
In addition to these, we will also invest in sales and consulting capabilities to engage with clients both in their technology divisions and their business organizations.
We will continue to leverage alliances that complement our core competencies. We will continue to partner with leading technology software and hardware providers in creating, deploying, integrating and operating business solutions for our clients.
We will continue to invest in research and development (R&D) to stay abreast of new technologies and to incubate new offerings in areas such as blockchain, AR / VR and speech, vision, video and image intelligence. We will expand the scope of our collaborations to encompass universities, research organizations and the startup innovation ecosystem.
We will continue to deploy our capital in making selective business acquisitions that augment our Agile Digital expertise, to complement our presence in certain market segments.
Energize the core
We will continue to embrace automation and artificial intelligence (AI)-based techniques and software automation platforms to boost productivity of our clientsâ core processes and systems.
We will continue to leverage these, along with lean processes, agile development 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 will continue to invest in our flagship RPA platform AssistEdge®, our AI platform, Infosys NIA®, and in core business applications such as Finacle®, McCamish and others to bring differentiated and market-leading features and capabilities to our projects with clients.
Reskill our people
An exponential adoption of new technologies is leading to a wide digital talent gap. As technology shifts gain rapid acceleration, we will continue to drive talent reskilling at scale for our own employees and for our clientsâ organizations in the new areas of digital services.
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 our employees stay abreast of new developments in software technologies, spur innovation and help them build a lifelong career with the Company.
We will continue to invest in advanced, anytime-anywhere learning systems such as our Lex platform and in creating and harnessing up-to-date content from internal and external sources. Further, we are expanding our relationships with universities around the world to curate specific curricula for our employees in areas such as creative design skills, machine learning, autonomous technologies, blockchain etc.
Expand localization
We believe that client proximity lends several benefits while delivering Agile Digital transformations, and we will continue to invest in localizing our workforce in various geographies. We had announced the setting up of four delivery and innovation centers in the US in fiscal 2018, and announced one more in fiscal 2019. These centers are already operational in Indiana, Connecticut, Rhode Island, Texas and North Carolina. We are recruiting locally from universities in the US. We aim to become an employer of choice for US universities and will set up dedicated leadership and support teams in the US, Europe and Australia. Our strategy to localize will also reduce our dependence on immigration policies.
Organization
Our go-to-market business units are organized as :
- Financial Services and Insurance
- Life Sciences and Healthcare
- Manufacturing
- Retail, Consumer Packaged Goods and Logistics
- Hi-Tech
- Communications, Telecom OEM and Media
- Energy, Utilities, Resources and Services
- Infosys Public Services
- Other public services enterprises
Our solutions are primarily classified as digital and core.
- Digital
â Experience
â Insight
â Innovate
â Accelerate
â Assure
- Core
â Application management services
â Proprietary application development services
â Independent validation solutions
â Product engineering and management
â Infrastructure management services
â Traditional enterprise application implementation
â Support and integration services
- Products and Platforms
â Finacle®
â Edge suite
â Infosys NIA®
â Infosys McCamish
â Panaya®
â Skava®
- Business Process Management â Infosys BPM
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, along with our subsidiaries, added 345 new clients, including a substantial number of large global corporations. Our total client base at the end of the year stood at 1,279. The client segmentation, based on the last 12 monthsâ revenue for the current and previous years, on a consolidated basis, is as follows :
Clients |
2019 |
2018 |
100 million dollar |
25 |
20 |
50 million dollar |
60 |
57 |
10 million dollar |
222 |
198 |
1 million dollar |
662 |
634 |
Infrastructure
We added 2.75 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2019 stands at 49.32 million sq. ft. We have presence in 191 locations across 46 countries as on March 31, 2019.
Infosys Innovation Fund
Our investment and acquisition strategy is designed to strengthen our competitive positioning and bring technology innovation to our clients. We have a multi-pronged strategy in identifying, investing in, and evangelizing next-generation technologies. We believe we will achieve this through organic investments in R&D, as well as by making investments in external innovation ecosystems and in particular, technology startup companies.
The Infosys Innovation Fund identifies early-stage startup companies developing innovative, next-generation solutions and technologies in the areas of AI and machine learning, Big Data and analytics, convergence of physical and digital processes, technology infrastructure management, cloud systems and cybersecurity. The Fund partners with startups by providing early-stage capital and in helping bring their innovations to market, attaining scale, product validation and customer introductions.
The Fund has invested US$ 59 million to date in the form of minority holdings in early-stage companies. During the year, the Company divested its stake in two investments resulting in a net gain of US$ 8 million. As of March 31, 2019, the Fund has an additional US$ 12 million in uncalled / pending capital commitments. The carrying value of investments as on March 31, 2019 was US$ 20 million (Rs. 138 crore).
Subsidiaries
We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation digital services. At the beginning of the year, we had 20 direct subsidiaries and 26 step-down subsidiaries. As on March 31, 2019, we have 25 direct subsidiaries and 34 step-down subsidiaries. We have acquired following subsidiaries during the year :
- On May 22, 2018, Infosys acquired 100% of the voting interests in WongDoody Holding Company Inc., (WongDoody) an US-based, full-service creative and consumer insights agency. The business acquisition was conducted by entering into a share purchase agreement for a total consideration of up to US$ 75 million (approximately Rs. 514 crore on acquisition date).
- On October 11, 2018, Infosys Consulting Pte Limited (a wholly-owned subsidiary of Infosys Limited) acquired 100% voting interests in Fluido Oy (Fluido), a Nordic-based Salesforce advisor and consulting partner in cloud consulting, implementation and training services, for a total consideration of up to ⬠65 million (approximately Rs. 560 crore).
- On November 16, 2018, Infosys Consulting Pte Limited (a wholly-owned subsidiary of Infosys Limited) acquired 60% stake in Infosys Compaz Pte. Ltd, a Singapore-based IT services company. The business acquisition was conducted by entering into a share purchase agreement for a total consideration of up to SGD 17 million (approximately Rs. 91 crore on acquisition date).
Assets held for sale : During the year ended March 2018, the Company had initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as âSkavaâ) and Panaya, collectively referred to as âthe disposal groupâ. The disposal group was classified and presented separately as âHeld for Saleâ and was carried at the lower of carrying value and fair value. Consequently, a reduction in the fair value of the disposal group held for sale amounting to Rs. 118 crore in respect of Panaya had been recognized in the Consolidated Statement of Profit and Loss for the year ended March 31, 2018. Accordingly, assets amounting to Rs. 2,060 crore and liabilities amounting to Rs. 324 crore in respect of the disposal group had been classified as âheld for saleâ. In the standalone financial statements, on reclassification, the investment in these subsidiaries was classified and presented separately as âHeld for Saleâ and was carried at the lower of carrying value and fair value. Consequently, a reduction in the fair value of investment of Rs. 589 crore in respect of Panaya was recognized in the Standalone Statement of Profit and Loss. Accordingly, investments amounting to Rs. 1,525 crore in respect of these subsidiaries had been reclassified as âheld for saleâ.
During the year ended March 31, 2019, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company recorded a reduction in the fair value of the disposal group held for sale amounting to Rs. 270 crore in respect of Panaya in the consolidated financial statements and a reduction in the fair value of investment amounting to Rs. 265 crore in respect of Panaya in the standalone financial statements.
Further, during the year ended March 31, 2019, based on the evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that the disposal group does not meet the criteria for âHeld for Saleâ classification because it is no longer highly probable that the sale would be consummated by March 31, 2019 (12 months from the date of initial classification under âHeld for Saleâ). Accordingly, as per Ind AS 105, Non-current Assets held for Sale and Discontinued Operations, the assets and liabilities of Panaya and Skava have been included on a line-by-line basis in the consolidated financial statements for the period and as at March 31, 2019. On reclassification from âHeld for Saleâ, the assets of Panaya and Skava have been remeasured in the year ended March 31, 2019 at the lower of cost and recoverable amount resulting in an adjustment in respect of excess of carrying amount over recoverable amount on reclassification from âHeld for Saleâ of Rs. 451 crore (comprising Rs. 358 crore towards goodwill and Rs. 93 crore towards the value of customer relationships) in respect of Skava in the Consolidated Statement of Profit and Loss for the year ended March 31, 2019. In the standalone financial statements, the investment in subsidiaries Panaya and Skava have been remeasured at the lower of cost and recoverable amount resulting in recognition of an adjustment in respect of excess of carrying amount over recoverable amount on reclassification from âHeld for Saleâ of Rs.469 crore in respect of Skava in the Standalone Statement of Profit and Loss for the year ended March 31, 2019. Refer to Note 2.1.2 of the Consolidated financial statements and Note 2.3.8 of the Standalone financial statements.
Proposed acquisition
Stater N.V
On March 28, 2019, Infosys Consulting Pte Limited (a wholly-owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire 75% of the shareholding in Stater N.V, a wholly-owned subsidiary of ABN AMRO Bank N.V, the Netherlands, for a consideration including base purchase price of up to ⬠127.5 million (approximately Rs. 990 crore) and customary closing adjustments, subject to regulatory approvals and fulfilment of closing conditions.
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 Boardâs report. The statement also provides details of the 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
The Quality function at Infosys internalized the organizations vision and strategy of âNavigate the Nextâ, and formulated three strategic imperatives :
- Differentiate
- Optimize
- De-Risk
Our Quality department drove the org-wide agile transformation to scale our capabilities for Agile Digital in tune with the Company strategy. It led the way in driving Lean and Automation throughout the organization to enhance productivity and improve quality. It deployed robust frameworks and tools for service lines in a collaborative manner and has enabled several thousand employees on these over the past year. The Quality department was instrumental in developing and Open Sourcing the Infosys DevOps Platform â a key differentiator for Infosys in its Agile & DevOps offering.
The Quality department-led âBe the Navigatorâ workshops across the organization helped enhance monetization of these ideas for Infosys. The Quality department worked with cross-functional teams to drive enterprise agility by simplifying processes, reducing cost and enhancing employee experience. We proactively led compliance and assurance through audits and assessments to intensely reduce risk for the organization, with increased coverage of services and centers. We continue to comply with international management system standards and models viz. ISO 9001, ISO 27001, CMMI, ISO 14001, OHSAS 18001, ISO 22301, ISO 20000 and AS 9100 in fiscal 2019. Our European centers have been assessed for GDPR requirements as well. Infosys Limited as an enterprise is assessed for ISAE 3402 / SSAE 18 SOC 1 type II and has received an independent auditorsâ assurance compliance report.
Branding
The Infosys brand is a key intangible asset for the Company. It positions Infosys as a next-generation digital services company that helps enterprises navigate their digital transformation. Brand Infosys is built around the premise that our three decades of experience in managing the systems and workings of global enterprises uniquely positions us to be navigators for our clients. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with Agile Digital at scale to deliver unprecedented levels of performance and customer delight. Our Always-on Learning foundation drives their continuous improvement through building and transferring digital skills, expertise and ideas from our innovation ecosystem. Our Localization investments in talent and digital centers help accelerate the enterprise transformation agenda. We deliver on this promise with our Digital Navigation Framework.
Our marketing reach extends globally through digital-first multi-channel campaigns. A good example is the Infosys Boosting American Innovation campaign that has helped elevate the perception of the brand as a locally-relevant digital partner. As the digital innovation partner for the Australian Open, Roland-Garros and the ATP, we help showcase how brand Infosys is reimagining the tennis ecosystem for a billion fans globally leveraging data, insights and digital experiences. We participate in premier business and industry events around the world, while also organizing our own signature events and CXO roundtables. Confluence, our flagship client event series across the US, Europe and APAC, is rated highly by our clients and industry partners.
Awards and recognition
In fiscal 2019, we won multiple awards and honors, both international and national. The significant ones among them are as follows :
Business and management
- Rated for the second time in a row under the leadership category in a corporate governance study conducted jointly by BSE Limited and the International Finance Corporation, a member of the World Bank Group, and Institutional Investors Advisory Services, based on G20 / OECD principles, which are globally accepted benchmarks for corporate governance
- Won the Platinum award at the Asset Corporate Awards, the longest running Environment, Social, and Governance awards in Asia, for the ninth consecutive year. This award is based on an evaluation of financial performance, management, corporate governance, social and environmental responsibility and investor relations
- Received awards for Best CFO, Best Investor Relations Professional, Best Investor Relations Program, Best Asia In-house Tax Team, Best Corporate Governance, Best ESG SRI Metrics, and Best Analyst Day in the 2018 All-Asia Executive Team rankings in the Technology / IT Services and Software sector
- Won the 2018 Golden Peacock Award for risk management
Digital services and technology innovation
- Recognized as a Leader in The Forrester Wave⢠: Digital Process Automation Service Providers, Q3 2018
- Positioned as a Leader in IDC MarketScape : Western Europe Digital Quality Assurance Services 2018 Vendor Assessment
- Recognized as a Leader in NelsonHall NEAT, Digital Banking Services 2018
- Recognized as a Leader in Gartnerâs Magic Quadrant for Public Cloud Infrastructure Professional and Managed Services worldwide
- Honored with five awards at the DevOps Industry Awards, 2018
- Won five prestigious Oracle North America Specialized Partner of the Year Awards
- Positioned as a Leader in IDC MarketScape 2018 for Worldwide Oracle Implementation Services
Banking (for Finacle®)
- Finacle® was positioned as a leader in the Gartner Magic Quadrant for Global Retail Core Banking
- A consortium of seven leading banks in India powered by Finacleâs blockchain-based trade network won the Best Trade Finance and Supply Chain Initiative award at the Celent Model Bank Awards 2018
Human resources
- The Companyâs global internship program, InStep, was ranked No.1 in the Best Overall Internship category by Vault.coms survey on Top Internships for 2019
- Recognized by the Top Employers Institute as a top employer of 2019 for excellence in employment practices. Also ranked among the top three employers in Europe and the Middle East
- Our performance management system â iCount â bagged the Association of Talent Developmentâs Excellence in Practice award for talent management
Sustainability
- Listed as an index component of the prestigious Dow Jones Sustainability Indices (DJSI) and is part of the DJSI World and DJSI Emerging Markets indices
- Included in the prestigious Climate A list for a second consecutive year by the Carbon Disclosure Project
- Received Gold recognition from EcoVadis for CSR practices including environment, labor and human rights, ethics and sustainable procurement
For the complete list of awards and recognition, refer to https://www. infosys.com/about/awards.
3. Human resources management
At Infosys, we focus on the workplace of tomorrow that promotes a collaborative, transparent and participative organization culture, encourages innovation, and rewards individual contribution. The focus of human resources management at Infosys is to ensure that we enable each and every employee to navigate the next, not just for clients, but also for themselves. We have reimagined our employee value proposition, to make it more meaningful to our employees.
The three key strategic pillars under this are :
- Inspiring them to build whatâs next
- Making sure their career never stands still
- Navigating further, together
Here are some of the initiatives we have pioneered this year :
- Be the Navigator : An empowerment program to encourage purposeful innovation for clients. Impetus is given in the form of hackathons, makeathons, ideathons and knowledge-sharing sessions. The initiative has been taken up in the US, Australia and UK as well. We already have a repository of 2,000 stories of incremental innovation.
- Awards for Excellence : The Awards for Excellence remains our largest rewards and recognition platform for employees. This year, we received the highest number of nominations across geographies, covering over 20 categories.
- Petit Infoscion Day : An eagerly-awaited family-day event for employees completes 25 exciting years. Children are engaged through fun and educational activities and their academic and co-curricular achievements rewarded.
- HALE : Our Health Assessment & Lifestyle Enrichment program for employees is celebrating 15 years of building and sustaining a healthy and productive workforce by promoting health and well-being, ensuring safety, and encouraging work-life balance.
- Manager enablement : Empowering managers through analytics-based, customizable learning tools such as MaQ, and initiatives such as MPACT, MSPEED and Pravesh, that focus on continuous learning, reskilling and refactoring of talent. Significant rewards await the top managers who ace the challenges.
- Digital transformation : A key HR initiative to create an agile, connected and empowered workforce. InfyMe, our new mobile app, helps employees with first-hand information and access to systems and processes anytime, anywhere.
- Onboarding experience : The Launchpad app has simplified the joining process for our new hires in the US and in India, ensuring easy connect, less paperwork, and seamless integration into the organization.
- Skill Tags and Bridge programs : To help our employees reskill, we introduced Skill Tags, aligned to our digital and niche service offerings which offer employees a new-age skill identity. The Bridge Program enables employees to steer their career into new areas of work such as domain and techno-functional consulting, specialist programming, technical architect and design roles.
- Expanding our overseas workforce : With a constant focus on localization, we have increased our emphasis on rewards and recognition to keep the local talent pool motivated in our key markets, such as the US. In the UK and the rest of Europe, we have partnered with local universities, supported large people transition and integration programs, and for the first time, made it to the list of Forbesâ Best Employers for New Graduates List. Infosys China celebrated 15 years, and Impressions, the new joinee assimilation program, was reinstated. In Australia, we have been hiring local talent and absorbing them into key accounts.
- Stock Incentive Rewards program : We have focused on differentiated rewards for high performers via Restricted Stock Units (RSUs) in the form of Indian shares or ADRs across levels. We also have points-based incentives for learning new skills, enhanced maternity benefits in the US, new retail insurance plans in India, and various compensation programs across geographies to attract and retain the best talent.
Internal complaints committee
Infosys has constituted an Internal Committee (IC) in all the development centers of the Company across India to consider and resolve all sexual harassment complaints reported by women. The constitution of the IC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the committee includes external members from NGOs or with relevant experience. Investigation is conducted and decisions made by the IC at the respective location, and a senior woman employee is the presiding officer over every case. Half of the total members of the IC are women. The details of complaints pertaining to sexual harassment that were filed, disposed of and pending during the financial year are provided in the Business responsibility report of this Annual report.
Education, training and assessment
Infosys believes in lifelong learning and competency development for its employees. Our Education, Training and Assessment (ETA) team has been instrumental in creating a culture of learning in the organization. Lex, a highly scalable, mobile-first, modular learning platform that allows our employees to access learning content from anywhere, any device, at any time, is ETAs newest offering. The recommendation engine in Lex suggests appropriate learning paths based on the adjacency skills of employees. We now have about 700 courses on Lex, in addition to over 1,500 courses in instructor-led training mode. Managers can create their own learning paths and goals and share them with their teams. The platform is being made available to our customers as Wingspan.
We are working with various academic institutions to reskill our employees. We have collaborations with the Rhode Island School of Design to train employees on design skills, with Purdue University on cybersecurity, with Trinity College, Hartford on business analysis skills, with Cornell University on program management, and with the University of North Carolina for data analytics.
We launched a platform called InfyTQ, with several courses on technical and professional skills, aimed at improving the understanding of the fundamental building blocks of technology among engineering students across India, to help them become industry-ready.
Campus Connect, our industry-academia partnership program, made progress with the launch of electives to help engineering colleges run new programs within their curricula. In fiscal 2019, we engaged with 564 faculty members who in turn trained 52,051 students. With this, the total number of beneficiaries covered has reached 15,783 faculty members and 5,08,375 students from 274 engineering institutions.
Infosys Leadership Institute
Deepening our focus on enabling leaders on their personalized development journey, Infosys Leadership Institute (ILI) offered a variety of leadership development experiences in fiscal 2019. ILI continued to work closely with business leaders and HR leaders to gain deep insights into the development focus areas and learning themes across the organization. Based on these insights, ILI offered executive-level skill-building programs such as Executive Presence, Boardroom Excellence, Powerful Communication, and sales enablement programs such as Human Side of the Deal, Consultative Selling and Deal Coaching. These programs were facilitated in partnership with best-in-class global leadership development organizations across locations, including the US, the UK, Australia and India.
ILI also continued its partnership with Stanford Graduate School of Business and had one cohort of 64 leaders graduating this year. The cohort also participated in strategic enterprise-wide projects, along with executive coaching as part of their development. We also completed Leadership Talent Reviews across our business to identify leadership capability and successor readiness. In support of the organizational objectives on Diversity and Inclusion, ILI also enhanced its focus on women leaders by designing and offering exclusive programs for them. Overall, we had 1,352 participants across leadership levels leverage the various development interventions through the year.
Infosys Knowledge Institute
The Infosys Knowledge Institute (IKI), established in 2018, helps industry leaders develop a deeper understanding of business and technology trends through compelling thought leadership. Our researchers and subject matter experts provide a fact base that aids decision-making on critical business and technology issues. Our current research focuses on five strategic themes : employee experience and learning, impact of AI and automation, agile enterprises, design as a multi-faceted discipline, and the role of physical location in the future of work. IKI also publishes regularly on industry, function, and technology trends.
Particulars of employees
The Company had 1,80,457 employees (on a standalone basis) as of March 31, 2019. The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) (as required under the Companies Act, 2013) to the median of employeesâ remuneration, and the list of top 10 employees in terms of remuneration drawn, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure 3 to this Boardâs report.
The statement containing particulars of employees employed throughout the year and in receipt of remuneration of Rs. 1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of Rs. 8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate exhibit forming part of this report and is available on the website of the Company at https://www.infosys.com/investors/reports-filings/ Documents/exhibit-boards-report2019.pdf. The Annual Report and accounts are being sent to the shareholders excluding the aforesaid exhibit. Shareholders interested in obtaining this information may access the same from the Company website or send a written request to the Company. In accordance with Section 136 of the Companies Act, 2013, this exhibit is available for inspection by shareholders at the Registered Office of the Company during business hours on all working days, 21 days before the Annual General Meeting and copies may be made available on request.
Notes :1. The employees mentioned in the aforesaid exhibit have / had permanent employment contracts with the Company.
2. The employees are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
3. The details of employees posted outside India and in receipt of a remuneration of Rs. 60 lakh or more per annum or Rs. 5 lakh or more a month can be provided on request.
Employee stock options / RSUs
The Company, under the 2015 Stock Incentive Compensation Plan (âthe 2015 Planâ), 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 performances with Company objectives, and promoting increased participation by them in the growth of the Company.
The total number of equity shares and American Depositary Receipts (ADRs) to be allotted to the employees of the Company and its subsidiaries, pursuant to the exercise of the stock incentives under the 2015 Plan, shall not cumulatively exceed 1% of the issued capital. The 2015 Plan is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time and there has been no material changes to the plan during the fiscal. 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, are available on the Companyâs website, at https://www. infosys .com/investors/reports-filings/ Documents/disclosures-pursuant-SEBI-regulations2019.pdf. The details of the 2015 Plan form part of the Notes to accounts of the financial statements in this Annual Report.
4. Corporate governance
Our corporate governance philosophy
Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Infosys, 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 2019 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 backgrounds, age, ethnicity, race and gender, that will help us retain our competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/board-diversity-policy.pdf.
Additional details on Board diversity are available in the Corporate governance report that forms part of this Annual Report.
Number of meetings of the Board
The Board met 12 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 directorsâ appointment and remuneration
The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2019, the Board had nine members, two of whom are executive directors, one a non-executive and non-independent member and six independent directors. Three of the independent directors of the Board are women.
The policy of the Company on directorsâ 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.
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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Board evaluation
The nomination and remuneration committee engaged Egon Zehnder, external consultants, to conduct Board evaluation for the year. The evaluation of all the directors, committees, Chairman of the Board, and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation parameters and the process have been explained in the Corporate governance report.
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 KMP Inductions
- Michael Gibbs was appointed as an independent director to the Board, effective July 13, 2018. The appointment was approved by shareholders (vide postal ballot concluded on August 22, 2018).
- Nilanjan Roy was appointed as Chief Financial Officer and as a KMP, effective March 1, 2019.
Reappointments
- Kiran Mazumdar-Shaw was reappointed as an independent director, effective April 1, 2019, and the same was approved by shareholders (vide postal ballot concluded on March 12, 2019).
- Based on the terms of appointment, executive directors and the non-executive and non-independent chairman are subject to retirement by rotation. Nandan M. Nilekani, who was appointed on August 24, 2017, in the current term, being the longest-serving member and who is liable to retire, being eligible, seeks reappointment. The Board recommends his reappointment.
Retirements and resignations
- Ravi Venkatesan, an independent director, resigned as member of the Board effective May 11, 2018 to pursue new opportunities. The disclosure in this regard is available at https://www.infosys.com/newsroom/press-releases/Pages/ resignation-independent-director-11may2018.aspx
- M.D. Ranganath resigned as Chief Financial Officer and as KMP effective November 16, 2018.
Change in designation
The Board, upon the resignation of M.D. Ranganath, appointed Jayesh Sanghrajka, Deputy Chief Financial Officer, as the Interim Chief Financial Officer at its meeting held on November 15, 2018. The Board, at its meeting held on December 20, 2018, appointed Nilanjan Roy as Chief Financial Officer effective March 1, 2019 and accordingly, re-designated Jayesh Sanghrajka as Deputy Chief Financial Officer with effect from March 1, 2019.
Committees of the Board
As on March 31, 2019, the Board had five committees : the audit committee, the corporate social responsibility committee, the nomination and remuneration committee, the risk management committee, and the stakeholders relationship committee. During the year, the risk and strategy committee changed its name to risk management committee effective April 1, 2019. 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.
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 Companyâs policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. Refer to âInternal control systems and their adequacyâ in Managementâs discussion and analysis in this Annual Report.
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 the Companyâs operations in future.
SEBI settlement order
The Company had submitted a settlement application on December 5, 2017 with the Securities and Exchange Board of India (SEBI). SEBI passed a settlement order dated February 15, 2019 (âthe Settlement Orderâ) in respect of the settlement application. The settlement application pertained to matters relating to the severance agreement entered into with the former CFO of the Company, Rajiv Bansal, in October 2015, and was based on an undertaking by the Company without admitting the findings of facts and conclusion of law. The Company has paid a settlement amount of Rupees thirty-four lakh thirty-five thousand (Rs. 34,35,000) in respect of the said settlement of allegations under the Settlement Order. Pursuant to the Settlement Order, the possible proceedings against the Company stand settled and no enforcement action will be initiated by SEBI against the Company in respect of the said allegations.
Reporting of frauds by auditors
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boardâs report.
Annual return
In accordance with the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 6 to the Boardâs report.
Secretarial standards
The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.
Listing on stock exchanges
The Companyâs shares are listed on BSE Limited and National Stock Exchange of India Limited, and its ADSs are listed on New York Stock Exchange (NYSE).
Delisting of ADSs on Euronext Paris and Euronext London
In July 2018, the Company voluntarily delisted its ADSs from the Euronext Paris and Euronext London exchanges. The primary reason for delisting is the low average daily trading volume of Infosys ADSs on these exchanges, which was not commensurate with the related administrative requirements. During the five-year period of the Companyâs listing on Euronext Paris and Euronext London, the average daily trading volume of the Companyâs ADSs was significantly lower than its average daily trading volume on the NYSE. There was no change in the Infosys share / ADS count, capital structure and float as a result of the delisting from the above exchanges. Infosys ADSs continues to be listed on the NYSE under the symbol âINFYâ and investors can continue to trade their ADSs on the NYSE as before.
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 (âthe IEPF Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF; established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on 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 of the IEPF Authority. During the year, the Company has transferred the unclaimed and unpaid dividends of Rs. 1,54,19,936. Further, 1,71,485 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF rules. The details are provided in the Shareholder information section of this Annual Report and are also available on our website, at www.infosys.com/IEPF
Directorsâ 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 Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. 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, 2019, the applicable accounting standards have been followed and there are no material departures.
- 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 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 the Companies Act, 2013 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 Auditorsâ Report for fiscal 2019 does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements in this Annual Report.
- The Secretarial Auditorsâ Report for fiscal 2019 does not contain any qualification, reservation or adverse remark. The Secretarial Auditorsâ Report is enclosed as Annexure 5 to the Boardâs report in this Annual Report.
- As required by the Listing Regulations, the auditorsâ certificate on corporate governance is enclosed as Annexure 4 to the Boardâs report. The auditorsâ certificate for fiscal 2019 does not contain any qualification, reservation or adverse remark.
- As required under SEBI (Share Based Employee Benefits) Regulations, 2014, the auditors have issued a certificate that the share-based scheme(s) have been implemented in accordance with the regulations and the resolution of the Company passed through a postal ballot that concluded on March 31, 2016.
- In addition, the Company has also voluntarily engaged a Practicing Company Secretary to conduct an audit of corporate governance. The report does not contain any qualification, reservation or adverse remarks.
Auditors
Statutory auditors
Under Section 139 of the 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 provisions of Companies Act, 2013. In line with the requirements of the Companies Act, 2013, Deloitte Haskins & Sells LLP, Chartered Accountants (Firm registration number 117366 W/W 100018) (âDeloitteâ) was appointed as the statutory auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 36th AGM of the Company held on June 24, 2017, till the conclusion of the 41st AGM to be held in the year 2022. The requirement for the annual ratification of auditorsâ appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 7, 2018.
During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under Companies Act, 2013, Code of ethics issued by Institute of Chartered Accountants of India and U.S. Securities and Exchange Commission and the Public Company Accounting Oversight Board.
Secretarial auditor
As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board appointed Parameshwar G. Hegde of Hegde & Hegde, Practicing Company Secretaries, as secretarial auditor of the Company for fiscal 2019.
Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
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 the areas of education, eradication of hunger and malnutrition, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development. The Companyâs CSR Policy is 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 Boardâs report.
Infosys Foundation
Infosys Foundation was established in 1996 for social welfare activities. 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, eradication of hunger, rural development, art and culture, and destitute care across India. This year, the Foundationâs activities extended to most states of India, with an emphasis on expanding our reach to create deeper impact while ensuring focus on key areas of development. The highlights of the Foundationâs work included the introduction of the Aarohan Social Innovation Awards, restoration of water bodies in Karnataka, supporting the construction of a metro station in partnership with Bangalore Metro Rail Corporation Limited, enabling the pursuit of access and excellence in sports through the GoSports Foundation, and disaster relief efforts in Tamil Nadu, Karnataka, and Kerala. For more details on the Foundationâs activities, visit https://www.infosys.com/infosys-foundation.
Winners of the first Aarohan Social Innovation Awards with jury members at the awards ceremony in Bengaluru
Infosys Foundation USA
Infosys Foundation USA was established in 2015 with the mission of expanding computer science and maker education to K-12 students and teachers across the US, especially among underrepresented communities. The Foundation conducts professional development programs for teachers, partners with leading non-profits, and runs innovative campaigns to raise awareness about bridging the digital divide.
This year, the Foundation launched the inaugural Pathfinders Summer Institute at Indiana University in Bloomington which brought together nearly 600 K-12 public school teachers for a week of intensive classroom training from leading organizations in the computer science and maker space. Another initiative was the nation-wide InfyMaker grant competition to reward schools, libraries, museums, and non-profits for innovative maker projects. The Foundation also convened leading policy-makers, academics, and practitioners at its signature conference, CrossRoads 2018, to promote computer science education as a driver for greater equity and faster economic growth. Through its #WhyIMake campaign and in partnership with pioneering non-profits, such as Code.org, Teach for America, Girl Scouts of America, and the Hispanic Heritage Foundation, Infosys Foundation USA has deepened its commitment to preparing communities across the US for a technology-enabled future. For more information about the Foundation, visit http://www.infosys.org/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 stellar research connected to India. The ISF honored the winners of the Infosys Prize 2018 at an awards ceremony on January 5, 2019, in Bengaluru while also celebrating its 10th year milestone.
The laureates of the Infosys Prize 2018 were Prof. Navakanta Bhat (Professor, Indian Institute of Science, Bengaluru and Chairperson, Centre for Nano Science and Engineering, IISc, Bengaluru) in Engineering and Computer Science; Prof. Kavita Singh (Professor and Dean, School of Arts and Aesthetics, Jawaharlal Nehru University, New Delhi) in Humanities;
Prof. Roop Mallik (Professor, Department of Biological Sciences, Tata Institute of Fundamental Research, Mumbai) in Life Sciences; Prof. Nalini Anantharaman (Professor and Chair of Mathematics, Institute for Advanced Study, University of Strasbourg, France) in Mathematical Sciences; Prof. S.K. Satheesh (Professor, Centre for Atmospheric and Oceanic Sciences, Indian Institute of Science, Bengaluru and Director, Divecha Centre for Climate Change, IISc, Bengaluru) in Physical Sciences; and Prof. Sendhil Mullainathan (University Professor, Professor of Computation and Behavioral Science, and George C. Tiao Faculty Fellow, The University of Chicago Booth School of Business) in Social Sciences.
The winners were chosen by jury panels chaired by distinguished scientists and researchers - Prof. Pradeep K. Khosla for Engineering and Computer Science; Prof. Amartya Sen for Humanities; Prof. Mriganka Sur for Life Sciences; Prof. Srinivasa S.R. Varadhan for Mathematical Sciences; Prof. Shrinivas Kulkarni for Physical Sciences; and Prof. Kaushik Basu for Social Sciences. The laureates were felicitated by the Chief Guest, Prof. Manjul Bhargava, Fields Medalist and Professor of Mathematics at Princeton University, with a pure gold medal, a citation and a prize purse of US$ 100,000. To know more about the ISFâs initiatives, visit www.infosys-science-foundation.com.
Infosys Prize jury chairs, ISF trustees and Infosys CEO & MD Salil Parekh with the chief guest, Prof. Manjul Bhargava
Sustainability initiatives
Our sustainability charter is driven by our core values and ethics. Our sustainability actions encompass economic, social and environmental dimensions. Our Rural Reach programs focus on raising aspirations and building awareness about computers and the power of IT among students in rural India. Continuing our focus on identifying talent at a budding stage and creating learning opportunities for students at the school level, we hosted the CTY (Catch Them Young) program at various Development Centers in India. For more information about our industry-academia partnerships, visit our website, https://www.infosys.com/sustainability.
Building responsible citizenship is core to our employee volunteering efforts. We provide platforms to our employees to collaborate and form volunteering groups and work with local communities. We also reward social responsibility and promote and celebrate the volunteering achievements of our employees through all our internal communication channels. For more information about our employee volunteering efforts, visit our website, http://www.infosys.org/volunteering.
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. On World Environment Day 2018, we took a pledge to make our campuses ânon-recyclable plastics freeâ by 2020. We also declared our commitment to reducing the per capita generation of plastic waste on our campuses by 50%. In fiscal 2019, we added 2.8 MW of solar PV capacity on our campuses leading to 49 MW of total solar power plant capacity. Details of our environmental sustainability actions are available in Annexure 8 to the Boardâs 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 Boardâs report.
Business Responsibility Report (BRR)
The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for top 500 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 This is a comprehensive report that covers all aspects of our sustainability activities. The report is independently assured by DNV GL. For more details, visit https://www.mfosys.com/sustainability/.
Green initiatives
Electronic copies of the Annual Report 2018-19 and the Notice of the 38th 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 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 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 Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, GST authorities, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments under the state governments and union territories, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Gurugram, Hubballi, Hyderabad, Indore, Jaipur, Kolkata, 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. We also thank the US federal government, the U.S. Securities and Exchange Commission, the Internal Revenue Service, and various state governments, especially those of Indiana, Rhode Island, Connecticut, Texas and North Carolina.
for and on behalf of the Board of Directors
Sd/- Sd/-
Nandan M. Nilekani Salil Parekh
Bengaluru Chairman Chief Executive Officer and
April 12, 2019 Managing Director
Mar 31, 2018
Dear members.
The Board of Directors hereby submits the report of the business and operations of your Company (âthe Companyâ or âInfosysâ), along with the audited financial statements, for the financial year ended March 31, 2018. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Results of our operations and state of affairs
                                                                                                           in Rs. crore, except per equity share data
Particulars |
Standalone |
Consolidated |
||
 |
For the year ended March 31, |
For the year ended March 31, |
||
 | ||||
 |
2018 |
2017 |
2018 |
2017 |
Revenue from operations |
61,941 |
59,289 |
70,522 |
68,484 |
Cost of sales |
39,138 |
37,057 |
45,130 |
43,253 |
Gross profit |
22,803 |
22,232 |
25,392 |
25,231 |
Operating expenses |
 |  |  |  |
Selling and marketing expenses |
2,763 |
2,728 |
3,560 |
3,591 |
General and administration expenses |
3,562 |
3,628 |
4,684 |
4,739 |
Total operating expenses |
6,325 |
6,356 |
8,244 |
8,330 |
Operating profit |
16,478 |
15,876 |
17,148 |
16,901 |
Impairment loss on assets held for sale(2) |
589 |
â |
â |
- |
Other income, net(2)(3)(4) |
4,019 |
3,062 |
3,193 |
3,080 |
Profit before non-controlling interests / share in net loss of associate |
19,908 |
18,938 |
20,341 |
19,981 |
Share in net loss of associate, including impairment of associate(4) |
â |
â |
(71) |
(30) |
Profit before tax |
19,908 |
18,938 |
20,270 |
19,951 |
Tax expense® |
3,753 |
5,120 |
4,241 |
5,598 |
Profit after tax(1) |
16,155 |
13,818 |
16,029 |
14,353 |
Non-controlling interests |
â |
â |
â |
- |
Profit for the year(1)(2) |
16,155 |
13,818 |
16,029 |
14,353 |
Other comprehensive income |
 |  |  |  |
Items that will not be reclassified subsequently to profit or loss |
59 |
(47) |
62 |
(50) |
Items that will be reclassified subsequently to profit or loss |
(38) |
29 |
281 |
(228) |
Total other comprehensive income, net of tax |
21 |
(18) |
343 |
(278) |
Total comprehensive income for the year |
16,176 |
13,800 |
16,372 |
14,075 |
Earnings per share (EPS)(5) |
 |  |  |  |
Basic(1) |
71.28 |
60.16 |
71.07 |
62.80 |
Diluted |
71.25 |
60.15 |
71.00 |
62.77 |
Notes :The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS).
1 crore = 10 million
(1) Â Â Â During the quarter ended December 31, 2017, on account of the conclusion of an Advance Pricing Agreement (APA) with the US Internal Revenue Service (IRS), the Company has, in accordance with the APA, reversed income tax expense provision of US$ 225 million (Rs.1,432 crore) which pertains to previous periods which are no longer required. Consequently, profit for the year ended March 31, 2018 has increased, resulting in an increase in basic earnings per equity share by Rs.5.88 on a consolidated basis and Rs.5.85 on a standalone basis for the year ended March 31, 2018.
(2) Â Â Â In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as âSkavaâ) and Panaya (collectively referred to as âthe disposal groupâ). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to Rs.2,060 crore and liabilities amounting to Rs.324 crore in respect of the disposal group have been reclassified under âheld for saleâ. On reclassification, the disposal group has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of Rs.118 crore in respect of Panaya has been recognized in the consolidated Statement of Profit and Loss under âother incomeâ for the year ended March 31, 2018. The disposal group does not constitute a separate major component of the Company and therefore, has not been classified as discontinued operations.
In the standalone financial statements of the Company, investments amounting to Rs.1,525 crore in respect of these subsidiaries have been reclassified under âheld for saleâ. On reclassification, these investments have been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of Rs.589 crore in respect of Panaya has been recognized in the standalone Statement of Profit and Loss for the year ended March 31, 2018.
(3) Â Â Â Other income includes Rs.257 crore and Rs.262 crore for the year ended March 31, 2018 in the standalone and consolidated financial statements of the Company respectively towards interest on income tax refund. Other income in the consolidated Statement of Profit and Loss for the year ended March 31, 2018, also includes impairment loss of Rs.118 crore in respect of Panaya, as mentioned in the preceding note.
(4) Â Â Â During the year ended March 31, 2018, Infosys Nova Holdings LLC, a wholly-owned subsidiary, has written down the entire carrying value of its investment in its associate, DWA Nova LLC. Consequently, the Company has written down the entire carrying value of the investment in its subsidiary, Infosys Nova Holdings LLC, amounting to Rs.94 crore in the standalone Statement of Profit or Loss of the Company under other income.
Consequent to the above, in the consolidated financials, the Company has written down the entire carrying value of the investment in its associate, DWA Nova LLC, amounting to Rs.71 crore. The write-down in the carrying value of investment in associate DWA Nova LLC during the year ended March 31, 2017 was Rs.18 crore.
(5) Â Â Â Equity shares are at par value of Rs.5 per share.
Financial position
                                                                                                               in Rs. crore, except per equity share data
Particulars |
Standalone |
Consolidated |
||
As at March 31, 2018 |
As at March 31,2017 |
As at March 31, 2018 |
As at March 31, 2017 |
|
Cash and cash equivalents® |
16,770 |
19,153 |
19,818 |
22,625 |
Current investments® |
5,906 |
9,643 |
6,407 |
9,970 |
Assets held for sale(1) |
1,525 |
- |
2,060 |
- |
Net current assets® |
30,903 |
35,896 |
34,176 |
39,692 |
Property, plant and equipment(1) (including capital work-in-progress) |
10,469 |
9,852 |
11,722 |
11,116 |
Goodwill® |
29 |
- |
2,211 |
3,652 |
Other intangible assets® |
101 |
- |
247 |
776 |
Other non-current assets |
21,188 |
22,351 |
15,693 |
14,106 |
Total assets |
75,877 |
79,885 |
79,890 |
83,355 |
Liabilities directly associated with assets held for sale(1) |
- |
- |
324 |
- |
Non-current liabilities |
713 |
82 |
861 |
360 |
Retained earnings - opening balance |
49,957 |
44,698 |
52,882 |
47,063 |
Add: |
 |  |  |  |
Profit for the year |
16,155 |
13,818 |
16,029 |
14,353 |
Transfer from Special Economic Zone Re-investment Reserve on utilization® |
582 |
953 |
617 |
953 |
Less: |
 |  |  |  |
Dividends including dividend distribution tax |
(7,500) |
(6,980) |
(7,469) |
(6,952) |
Transfer to general reserve |
(1,382) |
(1,579) |
(1,382) |
(1,582) |
Transfer to Special Economic Zone Re-investment Reserve® |
(2,141) |
(953) |
(2,200) |
(953) |
Retained earnings - closing balance |
55,671 |
49,957 |
58,477 |
52,882 |
Other equity |
7,831 |
18,060 |
6,446 |
16,100 |
Total equity® |
63,502 |
68,017 |
64,924 |
68,982 |
Total equity and liabilities |
75,877 |
79,885 |
79,890 |
83,355 |
Number of equity shares® |
218,41,14,257 |
229,69,44,664 |
217,33,12,301 |
228,56,55,150 |
(1) Â Â Â In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as âSkavaâ) and Panaya (collectively referred to as âthe disposal groupâ). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to Rs.2,060 crore and liabilities amounting to Rs.324 crore in respect of the disposal group have been reclassified under âheld for saleâ. On reclassification, the disposal group has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of Rs.118 crore in respect of Panaya has been recognized in the consolidated Statement of Profit and Loss for the year ended March 31, 2018. The disposal group does not constitute a separate major component of the Company and therefore, has not been classified as discontinued operations.
On a standalone basis, investments amounting to Rs.1,525 crore in respect of these subsidiaries have been reclassified under âheld for saleâ. On reclassification, these investments have been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of Rs.589 crore in respect of Panaya has been recognized in the standalone profit and loss for the year ended March 31, 2018.
(2) Â Â Â Excludes assets held for sale and liabilities directly associated with assets held for sale.
(3) Â Â Â During the year, 11,30,43,478 equity shares were bought back by the Company for a total amount of Rs.13,000 crore.
(4) Â Â Â 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.
Revenues - standalone
Our revenue from operations on a standalone basis increased by 4.5% to Rs.61,941 crore in fiscal 2018. Our software export revenues aggregated to Rs.60,080 crore, up from Rs.57,491 crore in the previous year. Out of the total revenue, 62.9% came from North America, 23.3% from Europe, 10.8% from the Rest of the World, and 3.0% from India.
Revenues - consolidated
Our revenue from operations on a consolidated basis increased by 3.0% to Rs.70,522 crore in fiscal 2018. Our software export revenues aggregated to Rs.68,291 crore, up from Rs.66,304 crore in the previous year. Out of the total revenue, 60.4% came from North America, 23.7% from Europe, 12.7% from the Rest of the World, and 3.2% from India.
Profits - standalone
Our gross profit on a standalone basis amounted to Rs.22,803 crore (36.8% of revenue), as against Rs.22,232 crore (37.5% of revenue) in the previous year. Selling and marketing costs were 4.5% of our revenue for the year ended March 31, 2018, as compared to 4.6% for the year ended March 31, 2017. General and administration expenses were 5.7% of our revenue for the year ended March 31, 2018, as compared to 6.1% for the year ended March 31, 2017. The operating profit amounted to Rs.16,478 crore (26.6% of revenue), as against Rs.15,876 crore (26.8% of revenue), in the previous year. The profit before tax was Rs.19,908 crore (32.1% of revenue), as against Rs.18,938 crore (31.9% of revenue) in the previous year. Net profit was Rs.16,155 crore (26.1% of revenue), as against Rs.13,818 crore (23.3% of revenue) in the previous year.
Note : Based on Ind AS consolidated financial statements.
* Includes reversal of income tax provision of US$ 225 million (Rs.1,432 crore) pertaining to previous periods on account of conclusion of APA. Consequently, profit for the year ended March 31, 2018 has increased, resulting in an increase in basic earnings per equity share by Rs.5.88 on a consolidated basis.
(1) Financial Services    (2) Energy & utilities, Communications and Services (3) Retail, Consumer Packaged Goods and Logistics
(4) Life Sciences, Healthcare and Insurance (5) Manufacturing
Profits - consolidated
Our gross profit on a consolidated basis amounted to Rs.25,392 crore (36.0% of revenue), as against Rs.25,231 crore (36.8% of revenue) in the previous year. Selling and marketing costs were 5.1% of our revenue for the year ended March 31, 2018, as compared to 5.2% for the year ended March 31, 2017. General and administration expenses were 6.6% of our revenue for the year ended March, 31 2018, as compared to 6.9% for the year ended March 31, 2017. The operating profit amounted to Rs.17,148 crore (24.3% of revenue), as against Rs.16,901 crore (24.7% of revenue) in the previous year. The profit before tax was Rs.20,270 crore (28.7% of revenue), as against Rs.19,951 crore (29.1% of revenue) in the previous year. Net profit was Rs.16,029 crore (22.7% of revenue), as against Rs.14,353 crore (21.0% of revenue) in the previous year.
Capital expenditure on tangible assets -standalone
This year, on a standalone basis, we incurred capital expenditure of Rs.1,823 crore. This comprises Rs.1,422 crore in infrastructure, Rs.396 crore for investment in computer equipment and Rs.5 crore in vehicles.
In the previous year, we incurred capital expenditure of Rs.1,817 crore. This comprised Rs.1,157 crore in infrastructure, Rs.654 crore for investment in computer equipment and Rs.6 crore in vehicles.
Capital expenditure on tangible assets -consolidated
On a consolidated basis, we incurred capital expenditure of Rs.1,955 crore. During the current year, Rs.1,479 crore in infrastructure, Rs.471 crore in computer equipment and Rs.5 crore in vehicles have been invested.
In the previous year, we incurred capital expenditure of Rs.2,799 crore. This comprised Rs.1,991 crore in infrastructure, Rs.800 crore for investment in computer equipment and Rs.8 crore in vehicles.
Liquidity
Our principal sources of liquidity are cash and cash equivalents and the cash flow that we generate from our operations. 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 requirements. Liquidity enables us to be agile and ready for meeting unforeseen strategic and business needs. We believe that our working capital is sufficient to meet our current requirements.
As of March 31, 2018, we had Rs.30,903 crore in working capital (working capital defined as current assets, excluding assets held for sale minus current liabilities, excluding liabilities directly associated with assets held for sale) on a standalone basis, and Rs.34,176 crore on a consolidated basis. Working capital includes liquid assets of Rs.27,752 crore on a standalone basis and Rs.31,765 crore on a consolidated basis as at March 31, 2018, as against Rs.34,561 crore on a standalone basis, and Rs.38,773 crore on a consolidated basis as on March 31, 2017.
Liquid assets on both standalone and consolidated basis include deposits with banks and highly-rated financial institutions, investments in liquid mutual funds, fixed maturity plan securities, tax-free bonds, government bonds, non-convertible debentures of highly-rated companies, certificates of deposit (CDs) and commercial paper. 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. Investments made in non-convertible debentures issued by government-aided institutions and financial institutions with high credit rating. The details of these investments are disclosed under the ânon-current and current investmentsâ section in the standalone and consolidated financial statements in this Annual Report.
Capital Allocation Policy
The Board, at its meeting on April 13, 2018, 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 as follows :
i. The Board has decided to retain the current policy of returning up to 70% of the free cash flow of the corresponding financial year in such manner 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 International Financial Reporting Standards (IFRS). Dividend payout includes Dividend Distribution Tax (DDT).
ii. In addition to the above, out of the cash on the Balance Sheet, the Board has identified an amount of up to Rs.13,000 crore (US$ 2 billion(1)) to be paid to shareholders in the following manner :
a.    A special dividend of Rs.10.00 per share (US$ 0.15 per ADR(1)) resulting in a payout of approximately Rs.2,600 crore (approximately US$ 400 million®) in June 2018
b.    An amount of up to approximately Rs.10,400 crore (approximately US$ 1,600 million®) to be paid out to shareholders for fiscal 2019, in such manner as may be decided by the Board, subject to applicable laws and requisite approvals, if any.
(1) USD / INR exchange rate at 65.00.
Basic EPS
Basic earnings per share increased by 18.5% to Rs.71.28 at standalone level and by 13.2% to Rs.71.07 at consolidated level. On account of the conclusion of APA with the IRS, the Company has reversed income tax expense amounting to US$ 225 million (Rs.1,432 crore) pertaining to previous periods resulting in an increase in profits for fiscal 2018. Consequently, earnings per share increased by Rs.5.85 per share on a standalone basis and Rs.5.88 per share on a consolidated basis for the year ended March 31, 2018.
Dividend
Dividend per share declared is in line with the Capital Allocation Policy approved by the Board on April 13, 2017. The Company declared dividend as under :
Dividend per share (in Rs.) |
Fiscal 2017(2) |
Fiscal 2018(3) |
Interim dividend |
11.00 |
13.00 |
Final dividend |
14.75 |
(1) 20.50 |
Special dividend |
- |
(1)10.00 |
Total dividend |
25.75 |
43.50 |
Payout ratio (interim and final dividend) |
49.6% |
69.8% |
(1) Â Â Â Recommended by the Board of Directors at its meeting held on April 13, 2018. The payment is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company to be held on June 23, 2018.
(2) Â Â Â Our dividend policy was to pay up to 50% of consolidated post-tax profits.
(3) Â Â Â Our dividend policy is to pay up to 70% of free cash flow. 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.
The Register of Members and Share Transfer Books will remain closed on June 16, 2018 for the purpose of payment of the final dividend for the financial year ended March 31, 2018, payment of the special dividend, and the AGM. The AGM is scheduled to be held on June 23, 2018.
Share buyback
In line with the Capital Allocation Policy, the Board, at its meeting on August 19, 2017, approved a proposal for the Company to buy back its fully-paid-up equity shares of face value Rs.5 each from the eligible equity shareholders of the Company for an amount not exceeding Rs.13,000 crore. The shareholders approved the proposal of buyback of equity shares through the postal ballot that concluded on October 7, 2017. The buyback offer comprised a purchase of 11,30,43,478 equity shares aggregating 4.92% of the paid-up equity share capital of the Company at a price of Rs.1,150 per equity share. The buyback was offered to all eligible equity shareholders (including those who became equity shareholders as on the record date by cancelling American Depositary Shares (ADSs) and withdrawing underlying equity shares) of the Company as on the record date (i.e. November 1, 2017) on a proportionate basis through the âTender offerâ route. The Company concluded the buyback procedures on December 27, 2017 and 11,30,43,478 equity shares were extinguished. The Company has utilized securities premium and general reserve for the buyback of its shares. In accordance with Section 69 of the Companies Act, 2013, the Company has created a Capital Redemption Reserve of Rs.56 crore equal to the nominal value of the shares bought back as an appropriation from the general reserve.
Advance Pricing Agreement (APA) with the US Internal Revenue Service (IRS)
During the quarter ended December 31, 2017, the Company concluded an APA with the IRS. Under the APA, the Company and the IRS have agreed on the methodology to allocate revenues and compute the taxable income of the Companyâs US branch operations. This agreement covers fiscal 2011 to fiscal 2021. The Company expects the APA to enhance the predictability of the Companyâs tax obligation in respect of its US operations. In accordance with the APA, the Company has reversed income tax expense provision of US$ 225 million (Rs.1,432 crore) which pertains to previous periods that are no longer required. Consequently, profit for the year ended March 31, 2018 has increased resulting in an increase in basic earnings per share by Rs.5.85 on a standalone basis and Rs.5.88 on a consolidated basis for the year ended March 31, 2018.
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.1,615 crore to the general reserve on account of declaration of dividend on both standalone and consolidated levels.
Fixed deposits
We have not accepted any fixed deposits including from the public 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 Boardâs report.
Managementâs discussion and analysis
In terms of the provisions of Regulation 34 of the Listing Regulations, the Managementâs discussion and analysis is set out in this Annual Report.
Risk management report
In terms of the provisions of Section 134 of the Companies Act, 2013, a Risk management report is set out in this Annual Report.
Board policies
The details of the policies approved and adopted by the Board are provided in Annexure 9 to the Boardâs report.
Material changes and commitments affecting financial position between the end of the financial year and date of the report
- Â Â Â Lead Independent Director : The Board, at its meeting held on April 13, 2018, appointed Kiran Mazumdar-Shaw, Independent Director, as the Lead Independent Director of the Board.
- Â Â Â Acquisition : The Board, at its meeting held on April 13, 2018, approved the Company to enter into a definitive agreement to acquire WongDoody Holding Company Inc, a US-based creative and consumer insights agency, for a total consideration of up to US$ 75 million (approximately Rs.489 crore), including contingent consideration and retention payouts, subject to regulatory approvals and fulfillment of closing conditions.
- Â Â Â Capital Allocation Policy : The Board, at its meeting held on April 13, 2018, 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. Key aspects of the Capital Allocation Policy have been discussed earlier in the Boardâs report.
2. Business description Strategy
Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while creating growth opportunities for our employees and generating profitable returns for our investors.
Our clients and prospective clients are faced with transformative business opportunities due to advances in software and computing technology. These organizations are dealing with the challenge of having to reinvent their core offerings, processes and systems rapidly and position themselves as âdigitally enabledâ. The journey to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices.
Our strategy is to be a navigator for our clients as they ideate, plan and execute their journey to a digital future, to help them ânavigate your nextâ.
We have embraced a four-pronged strategy to strengthen our relevance to clients and drive accelerated value creation. Towards implementing the strategy, we will :
-    Scale Agile Digital    - Re-skill our people
-    Energize the core    - Expand localization
Scale Agile Digital
We will continue to make targeted investments to rapidly accelerate our Agile Digital business. We define âdigitalâ as a set of use cases that drive business outcomes for our clients across five areas :
- Â Â Â Experience : Well-designed systems for digital marketing, omnichannel interaction, personalization and content management that can enhance customer experience
- Â Â Â Insight : AI-based systems for advanced analytics, leveraging Big Data
- Â Â Â Innovate : Engineering new and digital-first products and offerings leveraging Internet of Things and advanced industry Software-as-a-Service platforms
- Â Â Â Accelerate : The digitization of core systems by migrating to cloud technologies, abstracting APIs, modernizing legacy systems and infrastructure, integrating applications and leveraging Robotic Process Automation (RPA)
- Â Â Â Assure : Implementing advanced cyber-security systems and specialized validation of software systems.
In addition to these, we will also invest in sales and consulting capabilities to engage with clients both in their technology divisions and their business organizations.
We will continue to leverage alliances that complement our core competencies. We will continue to partner with leading technology software and hardware providers in creating, deploying, integrating and operating business solutions for our clients.
We will continue to invest in research and development (R&D) to stay abreast of new technologies and to incubate new offerings in areas such as blockchain, AR / VR and speech, vision, video and image intelligence. We will expand the scope of our collaborations to encompass universities, research organizations and the startup innovation ecosystem. We will continue to deploy our capital in making selective business acquisitions that augment our Agile Digital expertise, to complement our presence in certain market segments.
Energize the core
We will continue to embrace automation and artificial intelligence (AI)-based techniques and software automation platforms to boost productivity of our clientsâ core processes and systems.
We will continue to leverage these, along with lean processes, Agile development and our Global Delivery Model (GDM) 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 will continue to invest in our flagship RPA platform AssistEdge®, our AI platform, Infosys Nia®, and in core business applications such as Finacle®, McCamish and others to bring differentiated and market-leading features and capabilities to our projects with clients.
Re-skill our people
An exponential adoption of new technologies is leading to a wide digital talent gap. As technology shifts gain rapid acceleration, we will drive talent re-skilling at scale for our own employees and for our clientsâ organizations in the new areas of digital services.
Teaching and learning are central to Infosys culture. Our investments in our Global Education Center and in creating various learning opportunities for our employees help our employees stay abreast of new developments in software technologies, spur innovation and help them build a lifelong career with the Company.
We will continue to invest in advanced, anytime-anywhere learning systems such as our Lex platform and in creating and harnessing up-to-date content from internal and external sources. Further, we are expanding our relationships with universities around the world to curate specific curricula for our employees in areas such as creative design skills, machine learning, autonomous technologies, blockchain etc.
Expand localization
We believe that client proximity lends several benefits while delivering Agile Digital transformations, and we will invest in localizing our workforce in various geographies. We have announced the setting up of four delivery and innovation centers in the US. The first of these is already active in Indianapolis, while three others - in Connecticut, Rhode Island and North Carolina - are well on the way to becoming operational. We are recruiting locally from universities in the US. We aim to become an employer of choice from US universities and will set up dedicated leadership and support teams in the US, Europe and Australia. Our strategy to localize will also reduce our dependence on immigration policies.
Organization
Our go-to-market business units are organized as :
- Â Â Â Financial Services
- Â Â Â Life Sciences, Healthcare and Insurance
- Â Â Â Manufacturing
- Â Â Â Retail, Consumer Packaged Goods and Logistics
- Â Â Â Hi-tech
- Â Â Â Communications
- Â Â Â Services, Utilities, Resources and Energy
- Â Â Â Infosys Public Services
Our service delivery is organized as horizontal service lines :
- Â Â Â Global Delivery
- Â Â Â Experience
- Â Â Â Insight
- Â Â Â Innovate
- Â Â Â Accelerate
- Â Â Â Assure
- Â Â Â Infosys Global Consulting
- Â Â Â Infosys Center for Emerging Technology Solutions
- Â Â Â Products and Platforms
-    Finacle®
- Â Â Â Edge suite
-    Infosys Nia®
- Â Â Â Infosys McCamish
-    Panaya®
-    Skava®
- Â Â Â Business Process Management - Infosys BPM
Client base
Our client-centric approach continues to bring us high levels of client satisfaction. We derived 98.5% of our consolidated revenues from repeat business this fiscal. We, along with our subsidiaries, added 283 new clients, including a substantial number of large global corporations. Our total client base at the end of the year stood at 1,204. The client segmentation, based on the last 12 monthsâ revenue for the current and previous years, on a consolidated basis, is as follows :
Clients |
2018 |
2017 |
100 million dollar + |
20 |
19 |
75 million dollar + |
35 |
31 |
50 million dollar + |
57 |
56 |
1 million dollar + |
634 |
598 |
Infrastructure
We added 2.04 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2018 stands at 46.57 million sq. ft. We have a total of 126 development centers in 27 countries, 82 sales offices in 35 countries. We have a presence in 45 countries as on March 31, 2018.
Infosys Innovation Fund
Our investment and acquisition strategy is designed to strengthen our competitive positioning and bring technology innovation to our clients. We have a multi-pronged strategy in identifying, investing in, and evangelizing next-generation technologies. We believe we will achieve this through organic investments in R&D, as well as by making investments in external innovation ecosystems and in particular, technology startup companies.
The Infosys Innovation Fund identifies early-stage startup companies developing innovative, next-generation solutions and technologies in the areas of AI and machine learning, Big Data and analytics, convergence of physical and digital processes, technology infrastructure management, cloud systems and cyber security. The Fund partners with startups by providing early-stage capital and in helping bring their innovations to market, attaining scale, product validation and customer introductions.
The Fund has invested US$ 53 million to date in the form of minority holdings in early-stage companies. As of March 31, 2018, the Fund has an additional US$ 12 million in uncalled / pending capital commitments. The carrying value of such investments as on March 31, 2018 was US$ 31 million on account of write-down of investment in DWA Nova amounting to US$ 11 million (Rs.71 crore) and on account of changes in fair value.
Subsidiaries and associates
We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation services. At the beginning of the year, we had 17 direct subsidiaries, 26 step-down subsidiaries and one associate. As on March 31, 2018, we have 20 direct subsidiaries and 26 step-down subsidiaries.
Name change of Infosys BPO Limited : During the year, Infosys BPO Limited, an Indian subsidiary of the Company. received the approval of the Ministry of Corporate Affairs, Government of India, to change the name of the Company to Infosys BPM Limited. The new name is a reflection of the paradigm shift in the nature of services that the Company now offers through its holistic approach of end-to-end transformative BPM (Business Process Management).
Assets held for sale : In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as âSkavaâ) and Panaya (collectively referred to as âthe disposal groupâ). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to Rs.2,060 crore and liabilities amounting to Rs.324 crore in respect of the disposal group have been reclassified under âheld for saleâ. On reclassification, the disposal group has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of Rs.118 crore in respect of Panaya has been recognized in the consolidated Statement of Profit and Loss under other income for the year ended March 31, 2018. An impairment loss of Rs.589 crore in respect of Panaya has been recognized in the standalone Statement of Profit and Loss for the year ended March 31, 2018.
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 Boardâs report. The statement also provides details of the 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
The Quality function at Infosys has been at the forefront of enabling delivery and support functions in differentiation, optimization and de-risking. While we continue to comply with international management standards, such as ISO 9001, ISO 22301, ISO 20000, ISO 27001, AS EN 9100, ISO 13485, OHSAS 18001 and ISO 14001, we have transitioned to ISO 14001: 2015 and AS 9100 Rev D newer versions of the standards in applicable business segments in fiscal 2018. These standards are ahead of the curve and we continue to be early adopters in the industry. Infosys acquired Level 5 rating in CMMi DEV + CMMi SVC at the enterprise level covering all service lines and geographies. Infosys Limited as an enterprise is assessed for ISAE 3402 / SSAE 18 SOC 1 type II and has received an independent auditorsâ assurance compliance report. Infosys BPM Limited received the Certificate of Compliance for PCI-DSS v3.2 and EdgeVerve Systems Limited has been certified for ISO 22301 : 2012, Business continuity management system.
Our Quality department drove large change initiatives for productivity improvements using Automation and Lean. A focused Automation Group in Quality has worked with service line COEs to create automation solutions which helped improve project productivity across the organization. Implementation of Lean and Six Sigma brought about significant improvement in projects. This year, the Quality function also created Agile-driven, differentiated methodologies for new services launched - which helped deliver superior outcomes in projects.
Branding
The Infosys brand is a key intangible asset of the Company It positions Infosys as a next-generation digital services company that helps enterprises navigate their digital transformation. Brand Infosys is built around the premise that our three decades of experience in managing the systems and workings of global enterprises uniquely positions us to be navigators for our clients. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with Agile Digital at scale to deliver unprecedented levels of performance and customer delight. Our Always-on Learning foundation drives their continuous improvement through building and transferring digital skills, expertise and ideas from our innovation ecosystem.
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. âConfluenceâ, our flagship client event, is consistently well-attended and rated highly by our clients and industry partners.
Awards and recognition
In fiscal 2018, we won multiple awards and recognition, both international and national. The significant ones among them are as follows :
Business and management
- Â Â Â Ranked in the Leadership category in a corporate governance study conducted jointly by BSE Limited, International Finance Corporation and Institutional Investors Advisory Services
- Â Â Â Won the Platinum Award at the Asset Corporate Awards, the longest running Environment, Social, and Governance awards in Asia. This award is based on an evaluation of financial performance, management, corporate governance, social and environmental responsibility and investor relations
- Â Â Â Declared Model Employer by the Ministry of Labour and Employment, Government of India, for managing labor law compliance
- Â Â Â Infosys tax team won the coveted âAsiaâs Best In-House Tax Team of the Yearâ award for 2017 from Euromoney, a leading publisher in the field of business and finance
- Â Â Â Received awards for Best CEO, Best CFO, and Best Investor Relations at the 2017 All-Asia Executive Team Rankings by the Institutional Investor magazine in the Technology / IT Services and Software sector
Banking (for Finacle®)
-    India Post, powered by Finacle®, was a winner in the âworldâs largest core banking transformationâ category at the prestigious Banking Technology magazine awards
- Â Â Â Won the âBest Digital Banking Technologyâ award at the Banker Middle East awards 2017
ERP services
- Â Â Â Won three prestigious Oracle Excellence Awards for Specialized Partner Cloud Services
-    Positioned as a Leader in The Forrester Waveâ¢: Applications Management and Digital Operations Services, Q4 2017
Technology innovation
- Â Â Â Positioned as a Leader in Everest Groupâs Digital Services in Consumer Banking PEAK Matrix 2017
- Â Â Â Awarded the âMicrosoft Platform Modernizationâ award and the âMicrosoft World Wide Consulting &Â System Integrator Intelligent Cloud Alliance Partnerâ award at Microsoft Inspire 2017
Sustainability
- Â Â Â Inducted into the prestigious Dow Jones Sustainability Indices (DJSI) and is now part of the DJSI World and DJSI Emerging Markets Indices
- Â Â Â Infosys Pune became the largest campus in the world to earn the LEED Platinum certification from the US Green Building Council
Human resources
- Â Â Â Placed fifth in Business Todayâs Best Companies to Work For list for 2018
- Â Â Â Infosys Europe certified by the Top Employers Institute for its exceptional employee conditions and awarded the exclusive Top Employers Europe 2018 certification
- Â Â Â Won the Golden Peacock HR Excellence Award for 2017.
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 :
- Â Â Â To help Infoscions realize their potential - to develop, grow and achieve their purpose
- Â Â Â To build the right culture and capabilities to enable us to delight our customers
- Â Â Â 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 employeeâs 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.
We have set up a scalable recruitment and HR management process. Over the last year, on a standalone basis, we received 15,40,498 applications from prospective employees. The Infosys Group added 3,743 (net) and 44,110 (gross) employees this year, taking the total strength to 2,04,107 from 2,00,364 at the end of the previous year.
On a standalone basis, the annualized attrition rate for fiscal 2018 stands at 16.4%, as compared to 15.0% for the previous year.
Here are some of the initiatives we have pioneered this year, along with recognition received for the same :
- Â Â Â Zero Distance (ZD), the movement to bring innovation to every project at Infosys, continued into its third year. The total number of ZD plans increased to over 16,000, many of which were discussed with clients, as the focus this year was on the monetization of ZD plans. In addition, we rewarded employees throughout the year for their innovative work through various awards at the unit and organization levels.
- Â Â Â We moved from an annual employee engagement survey model to a more continuous and customized survey format for feedback. This new approach has seen good traction over the year, with insights gathered from various sections of employees throughout the annual period. These insights have led to the creation of tracks for actionizing. To help trickle the information back into the teams, all managers have access to a dashboard containing feedback from their respective teams.
- Â Â Â In response to the technology disruptions that are transforming our business, we have continued to empower employees by letting them take charge of their careers and learning journeys. With a focus on preparing employees for tomorrow, we have enabled them to create and charter career and learning paths on Compass, our internal digital career platform. Through Compass, we provide our employees a world of opportunities - be it internal career movements, mentoring, learning, internships and more. Employees can also make use of experiences like âPower Programmersâ (to build capability in emerging and high-end technologies). In addition, for our Managers, we have created MaQ, an innovative analytics-based tool that equips them to stay abreast of technology and also makes them future-ready. Through these initiatives we continue to ensure that our employees are exposed to compelling career opportunities and have access to learning anytime, anywhere.
- Â Â Â We continued to focus on employee safety as an important aspect of providing a great place to work. We revamped many of our processes and tech offerings, and launched the Infosys Emergency App for employees to get quick help during an emergency. We revised our workplace guidelines and security infrastructure to make them more robust. We continuously communicated with employees on available safety measures to increase awareness, benchmarked our work in this space against the best that is on offer, and sought regular feedback from employees to ensure their involvement in making Infosys even more safe and secure.
- Â Â Â The Next Gen Talent Management Model was taken one step further this year with the launch of a dashboard and system that captures all employee data for easy, data-driven decision-making. The system was launched to business leaders to give them deeper analytical insights into their teams.
- Â Â Â To ensure that employees are at their productive best, we continued to work on simplifying internal processes through a collaborative effort with various teams. Rewards and recognition, in terms of the annual awards for excellence, quarterly promotions, and unit awards, continued.
- Â Â Â The stock incentives program was leveraged for rewarding and retaining our high-potential employees and senior leadership.
- Â Â Â We were ranked second among 250+ companies which participated in the AVTAR Best Companies for Women Score Card on Safety in India
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 Complaints Committee (ICC) 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
Infosys believes in lifelong learning for its employees, and competency development continues to be a key area of strategic focus for us. Our Education, Training and Assessment (ETA) department is at the forefront of creating a culture of learning in the organization. In the age of disruption, whether it is Digital, AI, Machine Learning (ML) or other emerging technologies, we created more than 75 new courses for our employees to embrace new and emerging technologies and be future-ready. We now have about 250 internally created self-learning programs focusing on the key foundations and real-life examples (including flight simulators), making them market-relevant effectively. These are in addition to the 1,500+ courses and 3,600 micro-learning videos already available. We recently built a new learning platform called Lex. Lex is a highly scalable and modular learning platform that allows our employees to access learning content from anywhere, from any device, at any time, and learn at a time convenient for them. Employees can even download the content and access it later when they are offline as well. With this, we are able to achieve our goal of enabling âLearning on the Goâ for our employees.
To ensure that we have systemic intervention in place to re-skill our existing employees in new and emerging technologies, we created a recommendation engine to suggest appropriate learning paths based on the adjacency skills they possess currently, and created learning stacks to provide an end-to-end view of technology and industry best practices. This helps us bring our re-skilling programs in line with our growth projections and address our employeesâ aspirations. Building up on our extensive experience in India, we started enabling fresh hires in the US at various places like Raleigh, Indianapolis, Plano etc., and making them project-ready We have collaborated with local universities and MOOC providers in the US for various educational offerings. For example, we are working with Rhode Island School of Design to train our employees on digital and design skills, and working with Udacity to train some of our fresh hires in the US, to offer their Nanodegree programs to our fresh hires in India, and âSelf Driving Car Engineerâ Nanodegree program to our experienced employees. Similarly we are working with Coursera to enable our employees on Google Cloud Platform.
Campus Connect, our industry-academia partnership program, made progress with the launch of electives to help engineering colleges run new programs within their curricula. In fiscal 2018, we engaged with 1,052 faculty members who in turn trained 40,139 students. With this, the total number of beneficiaries covered has reached 15,219 faculty members and 4,56,324 students from 286 engineering institutions.
Infosys Leadership Institute
Infosys Leadership Institute (ILI) embraces a customized approach to host initiatives aligned to specific development needs of the senior leadership team. Our business leaders, along with HR business partners, identify needs for their respective talent pool through formal talent review discussions. These themes help us to evolve our learning calendar of open programs called Leadership Labs. We had over 200 leaders nominated across functions, subsidiaries and technologies, resulting in a diverse mix across locations, focused on leadership facets like executive presence, storytelling etc. To provide deep dive into specific skills, we launched four Leadership Tracks for 45 leaders, spanning a period of 3-6 months. In partnership with Stanford Graduate School of Business, we had two cohorts comprising 38 and 65 leaders who completed their graduation during the year.
Infosys Sales Academy provides learning curricula and interventions for our sales leaders. ILI also supports development of women leaders through mentoring and womenâs leadership experience workshops. Leaders nurturing future leaders is a key component of our approach to learning.
Particulars of employees
The ratio of the remuneration of each whole-time director and key managerial personnel (KMP) to the median of employeesâ 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 Boardâs report (Annexure 3). Refer to tables 3(a) and 3(b) in Annexure 3.
Additionally, the following details form part of Annexure 3 to the Boardâs report :
- Â Â Â Remuneration to non-executive / independent directors (Refer to table 3(c))
- Â Â Â Statement containing the names of top 10 employees in terms of remuneration drawn (Refer to table 3(d))
- Â Â Â 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)(i))
- Â Â Â 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)(ii))
- Â Â Â The details of employees posted outside India and in receipt of a remuneration of Rs.60 lakh or more per annum or Rs.5 lakh or more a month can be made available on request.
Employee stock options / Restricted stock units (RSU)
The Company, under the 2015 Stock Incentive Compensation Plan (âthe 2015 Planâ), approved by the shareholders vide a 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 performances with Company objectives, and promoting increased participation by them in the growth of the Company.
The total number of equity shares and American Depositary Receipts (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 2015 Plan is in compliance with SEBI (Share-based Employee Benefits) Regulations, 2014, and there has been no material changes to the plan during the fiscal. 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, are available on the Companyâs website, at https://www. infosys.com/investors/reports-filings/Documents/disclosures-pursuant-SEBI-regulations2018.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, 2018 are as follows :
Approval date |
Grantees |
Date of grant |
Stock incentives approved by the Board / nomination and remuneration committee |
|
 |  |  |
RSUs |
Stock options |
Apr 13,2017 |
U.B. Pravin Rao |
May 2, 2017 |
27,250 |
43,000 |
Apr 13,2017 |
Dr. Vishal Sikka |
May 2, 2017 |
2,70,224 |
3,30,525 |
Apr 13,2017 |
Eligible employees other than KMP |
May 2, 2017 |
37,100 |
73,600 |
Jul 13, 2017 |
Inderpreet Sawhney |
August 1, 2017 |
(1) 58,150 |
44,450 |
Jul 13, 2017 |
Eligible employee other than KMP |
August 1, 2017 |
7,450 |
- |
Feb 27, 2018 |
Salil Parekh |
February 27, 2018 |
(2) 1,13,024 |
- |
Feb 27, 2018 |
M.D. Ranganath |
February 27, 2018 |
66,850 |
- |
Feb 27, 2018 |
Ravi Kumar S. |
February 27, 2018 |
66,850 |
- |
Feb 27, 2018 |
Mohit Joshi |
February 27, 2018 |
66,850 |
- |
Feb 27, 2018 |
Krishnamurthy Shankar |
February 27, 2018 |
12,400 |
- |
Feb 27, 2018 |
A.G.S. Manikantha |
February 27, 2018 |
2,000 |
- |
Feb 27, 2018 |
Eligible employees other than KMP |
February 27, 2018 |
16,02,510 |
- |
Note : Includes cash-settled stock incentives
(1) Â Â Â Includes time-based grant of 19,450 RSUs and a one-time, time-based grant of 38,700 RSUs on joining
(2) Â Â Â Pursuant to the approval of the shareholders through a postal ballot on February 20, 2018, Salil Parekh (CEO &Â MD) is eligible to receive, under the 2015 Plan, an annual grant of RSUs of fair value Rs.3.25 crore, which will vest over time in three equal annual installments upon completion of each year of service from the respective grant date, a one-time grant of RSUs of fair value Rs.9.75 crore, which will vest over time in two equal annual installments upon completion of each year of service from the grant date, and an annual grant of performance-based RSUs of fair value Rs.13 crore, which will vest after completion of three years, the first of which concludes on March 31, 2021, subject to the achievement of performance targets set by the Board or its committee.
The Board, based on the recommendations of the nomination and remuneration committee, approved, on February 27, 2018, an annual time-based grant for fiscal 2018 of 28,256 RSUs and a one-time, time-based grant of 84,768 RSUs. The grants were made effective February 27, 2018.
Grants exercised during the year : During fiscal 2018, exercise of grants by eligible employees were as follows :
Name |
RSUs |
Options |
||
Exercised and allotted in fiscal 2018 |
Outstanding as on March 31, 2018 |
Exercised and allotted in fiscal 2018 |
Outstanding as on March 31, 2018 |
|
Salil Parekh(1) |
- |
1,13,024 |
- |
- |
U.B. Pravin Rao |
- |
27,250 |
- |
43,000 |
M.D. Ranganath |
7,662 |
89,838 |
- |
48,400 |
Ravi Kumar S. |
13,087 |
1,06,113 |
28,187 |
84,563 |
Mohit Joshi |
13,087 |
1,06,113 |
- |
1,12,750 |
Krishnamurthy Shankar |
3,012 |
21,438 |
- |
19,000 |
Inderpreet Sawhney® |
- |
58,150 |
- |
44,450 |
|
250 |
2,750 |
- |
- |
Dr. Vishal Sikka(3) |
70,772 |
- |
- |
- |
Rajesh K. Murthy(4) |
11,250 |
- |
24,225 |
- |
Eligible employees other than KMP |
5,49,775 |
33,31,740 |
- |
6,20,500 |
Note : Includes cash-settled stock incentives
(1) Â Â Â The Board, based on the recommendations of the nomination and remuneration committee, approved an annual time-based grant for fiscal 2018 of 28,256 RSUs, which will vest over time in three equal annual installments upon completion of each year of service and a one-time, time-based grant of 84,768 RSUs, which will vest over time in two equal annual installments upon completion of each year of service from the grant date.
(2) Â Â Â Includes time-based grant of 19,450 RSUs and a one-time, time-based grant of 38,700 RSUs on joining
(3) Â Â Â During fiscal 2018, Dr. Vishal Sikka exercised 70,772 RSUs. Consequent to his resignation from the Company on August 24, 2017, the unvested stock incentives (time-based and performance-based awards) granted to him were forfeited.
(4) Â Â Â Resigned effective January 31, 2018, and the unvested stock incentives granted to him were forfeited.
4. Corporate governance
Our corporate governance philosophy
Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Infosys, 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 2018 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, that will help us retain our competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/board-diversity-policy.pdf.
Additional details on Board diversity are available in the Corporate governance report that forms part of this Annual Report.
Number of meetings of the Board
The Board met 11 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 directorsâ appointment and remuneration
The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2018, the Board had nine members, two of whom were executive or whole-time directors, one a non-executive and non-independent member and six independent directors. Three of the independent directors of the Board are women. The policy of the Company on directorsâ 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 nomination and remuneration committee engaged Egon Zehnder, external consultants, to conduct Board evaluation for the year. The evaluation of all the directors, committees, Chairman of the Board, and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation parameters and the process have been explained in the Corporate governance report. The outcome of the Board evaluation for fiscal 2018 was discussed by the nomination and remuneration committee and the Board at the meeting held on April 13, 2018.
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 Inductions
The following appointments were made during the year :
- Â Â Â Nandan M. Nilekani as non-executive non-independent director and Chairman of the Board effective August 24, 2017, approved by shareholders vide a postal ballot concluded on October 7, 2017.
- Â Â Â D. Sundaram as independent director of the Board effective July 14, 2017, approved by shareholders vide a postal ballot concluded on October 7, 2017.
- Â Â Â Salil Parekh as the Chief Executive Officer and Managing Director (CEO &Â MD) effective January 2, 2018, approved by shareholders vide a postal ballot concluded on February 20, 2018.
- Â Â Â Inderpreet Sawhney as Group General Counsel and Chief Compliance Officer effective July 3, 2017, and as key managerial personnel (KMP), as defined under Ind AS 24, Related Party Disclosures, effective July 14, 2017.
Reappointments
As per the provisions of the Companies Act, 2013, U.B. Pravin Rao, who has been longest in the office, retires by rotation at the ensuing AGM and, being eligible, seeks reappointment. The Board recommends his reappointment.
Retirements and resignations
R. Seshasayee resigned as non-executive Chairman and member of the Board effective August 24, 2017.
Dr. Vishal Sikka was appointed as Executive Vice Chairman subsequent to his resignation as CEO and MD at the Board meeting held on August 18, 2017 and resigned as a Director and Executive Vice Chairman effective August 24, 2017. Prof. John W. Etchemendy and Prof. Jeffrey S. Lehman, independent directors, resigned as members of the Board effective August 24, 2017.
Gopi Krishnan Radhakrishnan resigned as Acting General Counsel and KMP effective June 24, 2017.
Sandeep Dadlani, President and Segment Head -Manufacturing, Retail, CPG and Logistics, resigned as KMP effective July 14, 2017.
Rajesh K. Murthy, President and Segment Head - Energy, Resources, Utilities and Communications and Services, resigned as KMP effective January 31, 2018.
Change in designation
The Board, at its meeting held on April 13, 2018, appointed Kiran Mazumdar-Shaw as the Lead Independent Director. Ravi Venkatesan resigned as Co-Chairman of the Board and continued to be a member of the Board effective August 24, 2017.
The Board, upon the resignation of Dr. Vishal Sikka, appointed U.B. Pravin Rao, Chief Operating Officer and Whole-time Director, as Interim Chief Executive Officer and Managing Director at its meeting held on August 18, 2017. The Board, at its meeting held on December 2, 2017, appointed Salil Parekh as Chief Executive Officer and Managing Director effective January 2, 2018 and accordingly re-designated U.B. Pravin Rao as Chief Operating Officer and Whole-time Director with effect from January 2, 2018. The shareholders approved these vide a postal ballot concluded on February 20, 2018.
Committees of the Board
As on March 31, 2018, 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 committee of directors was dissolved with effect from January 12, 2018. The finance and investment committee was dissolved effective April 13, 2018. The roles and responsibilities of the finance and investment committee were delegated to the audit committee with effect from April 13, 2018. 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.
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 Companyâs policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and 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 the Companyâs operations in future.
The Company has submitted a settlement application on December 5, 2017 with the Securities and Exchange Board of India (SEBI). The settlement application pertains to matters relating to the severance agreement entered into with Rajiv Bansal, the Companyâs former CFO, in October 2015. Through the settlement process, the Company wants to resolve allegations relating to the Company not seeking prior and separate approval of the nomination and remuneration committee and the audit committee in relation to the severance agreement entered into with Rajiv Bansal; and in relation to disclosures pertaining to the said severance agreement, cessation of payments and initiation of arbitration under the severance agreement. The settlement application process is based on an undertaking that the Company will neither admit nor deny the finding of fact or conclusion of law. The Company will provide an update upon the conclusion of the settlement process.
Reporting of frauds by auditors
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boardâs report.
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 Boardâs report.
Secretarial standards
The Company complies with all applicable secretarial standards.
Listing on stock exchanges
The Companyâs shares are listed on BSE Limited and National Stock Exchange of India Limited, and ADSs are listed on New York Stock Exchange (NYSE), Euronext Paris and Euronext London. Infosys was inducted into the Dow Jones Sustainability Indices in fiscal 2018.
BSE Limited : The Companyâs shares were listed on BSE in June, 1993 and will be completing 25 years of public listing in India.
New York Stock Exchange : The Company listed its ADSs on the NYSE on December 12, 2012. The Company celebrated its fifth anniversary of being listed on NYSE on December 20, 2017 by ringing the âopening bellâ.
Proposed delisting of ADSs on Euronext Paris and Euronext London
In March 2018, the Company announced its intention to voluntarily delist its ADSs from the Euronext Paris and Euronext London exchanges. The primary reason for seeking the proposed delisting is the low average daily trading volume of Infosys ADSs on these exchanges, which is not commensurate with the related administrative requirements. During the five-year period of the Companyâs listing on Euronext Paris and Euronext London, the average daily trading volume of the Companyâs ADSs was significantly lower than its average daily trading volume on the NYSE. The proposed delisting is subject to approval from Euronext Paris S.A. and Euronext London Limited. There will be no change in the Infosys share / ADS count, capital structure and float as a result of the proposed delisting from the above exchanges. Infosys ADSs will continue to be listed on the NYSE under the symbol âINFYâ and investors can continue to trade their ADSs on the NYSE as before.
Subject to the approval of the proposed delisting by Euronext Paris S.A. and Euronext London Limited, a sale facility will be provided by the Company to the holders of ADSs trading on the Euronext Paris and Euronext London exchanges. ADS holders who opt for it will be able to sell their ADSs on the NYSE in accordance with Euronext Paris and Euronext London rules. ADS holders who do not opt for it can continue to retain their ADSs and will be able to trade their ADSs on the NYSE. Further, until the date of completion of the proposed delisting, the ADS holders can continue to trade their ADSs on the Euronext Paris and Euronext London exchanges.
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 (âthe Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on 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 of the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends of Rs.2,04,47,770. Further, 1,05,234 corresponding shares were transferred as per the requirements of the IEPF rules. The details are provided in the Shareholder information section of this Annual Report and are also available on our website, at www.infosys.com/IEP .
Directorsâ 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 SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (âthe Actâ), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Effective April 1, 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, 2018, the applicable accounting standards have been followed and there are no material departures.
- Â Â Â 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.
- Â Â Â They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
- Â Â Â They have prepared the annual accounts on a going concern basis.
- Â Â Â They have laid down internal financial controls, which are adequate and are operating effectively
- Â Â Â 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
- Â Â Â The Auditorsâ Report for fiscal 2018 does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements in this Annual Report.
- Â Â Â The Secretarial Auditorsâ Report for fiscal 2018 does not contain any qualification, reservation or adverse remark. The Secretarial Auditorsâ Report is enclosed as Annexure 5 to the Boardâs report in this Annual Report.
- Â Â Â As required by the Listing Regulations, the auditorsâ certificate on corporate governance is enclosed as Annexure 4 to the Boardâs report. The auditorsâ certificate for fiscal 2018 does not contain any qualification, reservation or adverse remark.
- Â Â Â In addition, the Company has also voluntarily engaged a Practicing Company Secretary to audit on corporate governance. The report does not contain any qualification, reservation or adverse remarks.
Auditors Statutory auditors
Under Section 139 of the 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. In line with the requirements of the Companies Act, 2013, Deloitte Haskins &Â Sells LLP. Chartered Accountants (Firm registration number 117366 W/W 100018) (âDeloitteâ) was appointed as the statutory auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 36th Annual General Meeting of the Company held on June 24, 2017, till the conclusion of the 41st Annual General Meeting to be held in the year 2022, subject to ratification by shareholders at the general meeting or as may necessitated by the Act from time to time. The first year of audit was of the financial statements for the year ending March 31, 2018, which included the audit of the quarterly financial statements for the year. Accordingly, the appointment of Deloitte Haskins &Â Sells LLP is being placed before the shareholders for ratification.
Secretarial auditor
As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed Parameshwar G. Hegde of Hegde &Â Hegde, Practicing Company Secretaries, as secretarial auditor of the Company for fiscal 2019.
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 Boardâs report.
Infosys Foundation
Infosys Foundation was established in 1996 for social welfare activities. 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, eradication of hunger, rural development, art and culture, and destitute care across India. This year, the Foundationâs activities have extended from Jammu &Â Kashmir to Tamil Nadu, and from Gujarat to Arunachal Pradesh, with an emphasis on expanding our reach while ensuring focus on key areas of development. The highlights of the Foundationâs work included the building of a dharmashala at PGIMER, Chandigarh, gravity-fed water supply systems around Visakhapatnam, renovation of Capital Hospital at Bhubaneswar, a hi-tech kitchen at Kandi, Telangana in partnership with the Akshaya Patra Foundation and continued Swachh Bharat efforts in Tamil Nadu, Karnataka, Maharashtra and Telangana. For more details on the Foundationâs activities, visit https://www.infosys. com/infosys-foundation.
Infosys Foundation USA
In fiscal 2018, 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 teachers, students and schools across US states, through initiatives such as :
- Â Â Â CS Teacher Support
- Â Â Â CS Student Support
- Â Â Â 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 2017 were Prof. Sanghamitra Bandyopadhyay (Director, Indian Statistical Institute (ISI), Kolkata) in Engineering and Computer Science, Prof. Ananya Jahanara Kabir (Professor of English Literature, Kingâs College, London, UK) in Humanities, Prof. Upinder S. Bhalla (Professor, National Centre for Biological Sciences, Tata Institute of Fundamental Research (TIFR), Bengaluru) in Life Sciences, Prof. Ritabrata Munshi (Professor, School of Mathematics, TIFR, Mumbai, and Statistics and Mathematics Unit, ISI, Kolkata) in Mathematical Sciences, Prof. Yamuna Krishnan (Professor, Department of Chemistry, University of Chicago, US) in Physical Sciences, and Prof. Lawrence Liang (Professor, School of Law, Governance and Citizenship, Ambedkar University, Delhi) in Social Sciences. The chief guest, Prof. Kip Thorne, Nobel laureate in Physics for 2017, along with the jury chairs and trustees, gave away the prizes to the winners at a ceremony in Bengaluru on January 10, 2018.
For more details on the ISFâs activities, 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 2018, we installed a solar farm of 30MW capacity in Karnataka. Details of our environmental sustainability actions are available in Annexure 8 to the Boardâs report.
Dow Jones Sustainability Indices : Infosys has been inducted into the prestigious Dow Jones Sustainability Indices (DJSI) on September 7, 2017 and is now part of the DJSI World and DJSI Emerging Markets Indices. This recognition is testimony to Infosysâ corporate sustainability leadership in the IT services and Internet Software and Services industry.
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 Boardâs 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. This is a comprehensive report that covers all aspects of our sustainability activities. The report is independently assured by DNV GL, in accordance with the Global Reporting Initiativeâs framework. For more details, visit https://www. infosys.com/sustainability/.
Green initiatives
Electronic copies of the Annual Report 2017-18 and the Notice of the 37th 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 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 Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments under the state governments and union territories, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Gurugram, Hubballi, Hyderabad, Indore, Jaipur, Kolkata, 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. We also thank the US federal government, the Securities and Exchange Commission, the Internal Revenue Service, and various state governments, especially those of Indiana, Rhode Island, Connecticut, Texas and North Carolina.
                                                 for and on behalf of the Board of Directors
Bengaluru                                 Nandan M. Nilekani              Salil Parekh
April 13, 2018                           Chairman                              Chief Executive Officer and Managing Director
Â
Mar 31, 2017
Dear members.
The Board of Directors hereby submits the report of the business and operations of your Company (âthe Companyâ or âInfosysâ), 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 â2,163 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 ânon-current and current investmentsâ 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 Boardâs 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 Companyâs 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 (âthe Listing Regulationsâ), 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 Boardâs report and is also available on the Companyâs 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 Boardâs report.
- The Board / nomination and remuneration committee (âthe committeeâ) approved the following :
CEO compensation : Following the shareholdersâ approval of the CEOâs 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 shareholdersâ approval of the COOâs 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.
Managementâs discussion and analysis
In terms of the provisions of Regulation 34 of the Listing Regulations, the Managementâs 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 ârenewâ and ânewâ 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
- 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 monthsâ 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 Boardâs 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 auditorsâ 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. âConfluenceâ, 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 Asiaâs 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, 2017â18 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 employeeâs 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, âLeaders Teachâ, and experience-sharing sessions. Senior leaders from across Infosys and its subsidiaries are beneficiaries of ILIâs 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 employeesâ 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 Boardâs 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 Boardâs 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 (âthe 2015 Planâ), 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 Companyâs 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 directorsâ 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 directorsâ 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 (âthe Actâ) 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 (ânew articlesâ), 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 Companyâs 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 Companyâs 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 Boardâs 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 (âthe Rulesâ), 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
Directorsâ 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 (âthe Actâ), 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 Auditorsâ Report for fiscal 2017 does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements in this Annual Report.
- The Secretarial Auditorsâ Report for fiscal 2017 does not contain any qualification, reservation or adverse remark. The Secretarial Auditorsâ Report is enclosed as Annexure 5 to the Boardâs report in this Annual Report.
- As required by the Listing Regulations, the auditorsâ certificate on corporate governance is enclosed as Annexure 4 to the Boardâs report. The auditorsâ 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) (âDeloitteâ) 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 Companyâs Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (SEC). KPMG will continue as the Companyâs 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 Boardâs 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 Foundationâs 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 Boardâs 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 Boardâs 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 Initiativeâs 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 Â
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 WaveÂ: 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 Â
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) Â 83 Â Â
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 Â 13 15
Reserves on transfer of
assets and liabilities
of Infosys Consulting
India Limited 6 Â Â Â
Reserves on consolidation
of trust 50 Â Â Â
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 Â
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 Â
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 Â
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) Â 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
WorkplacesÂ'' 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
WaveÂ, 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
Finacleà 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. FinacleÃ, 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, Finacleà is the choice of 154 banks across 75 countries and
powers operations across 48,500 branches. Finacleà enables its
customer banks to serve 423 million accounts and 347 million consumers
worldwide. Finacleà is regarded as a leader in the core banking
market space by industry analysts since many years. Today, 42% of the
banks leveraging Finacleà are among the Top 1000.
Finacleà 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, Finacleà 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:
Flyppà : 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 EdgeÃ, 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 Edgeà : This simplifies digital marketing across the
organization through a comprehensive cloud-based platform.
Infosys Commerce Edgeà : 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 Edgeà : 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 Edgeà : This enables enterprises to deepen employee
engagement and simplify the entire hire-to-retire lifecycle of the
human resource function.
Infosys Trade Edgeà : This enables global companies to accelerate
long-term growth and profitability in emerging markets.
Infosys Wallet Edgeà : 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 Oracleî 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 à Best IR website, Best
Online Annual Report, Best Financial Disclosure and Best Corporate
Governance Practices à 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 à Ã
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) Ã 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 à interim 1,722 Ã
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 à 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 Ã 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
FinacleÃ, 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 Finacleà 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. Finacleà 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. Finacleà 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 Ã 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 à 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 Oracleî 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 à 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 à social contract, resource intensity and green
innovation à 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.) Ã Ã
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 à Ã
Employees receiving 5% or more of
the total number of options granted
during the year à Ã
Employees granted options equal
to or exceeding 1% of the issued
capital à Ã
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) Ã 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. FinacleÃ
Finacleà 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, Finacleà 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
Finacleà a strong innovation- facilitator enabling banks to accelerate
growth, while maximizing value from their large-scale business
transformation.
Finacleà 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 Finacleà among the leaders in
the global evaluation of retail core banking solution vendors.
Finacleà 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 Ã 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 à Our differentiated methodology for Global Delivery Model
(GDM) enabled short-cycle delivery approach with ÃBest Practices of
iterativeà and ÃPredictable Infosys Processà to achieve faster time to
market
ESTEEM (Estimation CoE) Ã Our drive to standardize estimation
techniques and models for various service lines and implementation of
the same
- TRANSCEED Ã Our initiative to enhance program management
capabilities, including development of integrated systems and tools,
relevant enabling / certification and ecosystem for collaboration /
knowledge exchange
ASCENT Ã Our effort to provide a robust and integrated platform for
account management that further facilitates account planning,
monitoring and reviews
- Prosper à A differentiated methodology for driving excellence in
production support services
TIDE Ã Total Integrated Delivery Environment which ensures robust way
of executing projects in various technologies
BrITe à 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 ÃInfosysà 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 ÃBest Companies to Work ForÃ.
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 FinacleÃ
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 Oracleî 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 ÃAsset Triple A Corporate AwardsÃ
- 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 Oracleî 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 ÃIndias Best Companies to Work Forà in a survey
conducted by Great Place to Workî 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 ÃBest Ranked Online
Annual Reports in Greater China & Asia / Pacificà 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 directorsà 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 masterÃs
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 PsychologyÃs ÃLeading Edgeà 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 à 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 à Physics and Chemistry
- Mathematical Sciences à Mathematics and Statistics
- Engineering Sciences à All branches of Engineering
- Life Sciences à Biology and Medicine
- Social Sciences and Economics à 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 laureateÃs 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) Ã 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