Fiscal 2014 was a year of optimism and renewed vigor for Infosys. We
crossed revenues of Rs. 50,000 crore (8 billion in US dollar terms).
Further, in dollar terms, our revenue growth doubled to 11.5% in fiscal
2014 from 5.8% in fiscal 2013, while in rupee terms, the year-on-year
growth was 24.2%. This was a year in which we reaffirmed our commitment
to all our stakeholders.
Our performance during the year exceeded our initial guidance. At the
beginning of the year, our guidance stood at 6% – 10%. We revised our
guidance at the beginning of Q3 FY 2014 to 9% – 10%, which we
subsequently revised upwards to 11.5% – 12% at the beginning of Q4 FY
2014. Our performance for the year was therefore in line with the lower
end of our most recent guidance. As per the International Financial
Reporting Standards (IFRS), our consolidated revenues in rupee terms
for fiscal 2014 stood at Rs. 50,133 crore. Out of the total revenue,
North America and Europe accounted for 60.7% and 24.4%, respectively.
India and the Rest of the World contributed 2.6% and 12.3%,
respectively. The profit after tax was Rs. 10,648 crore, a year-on-year
growth of 13.0%. In accordance with IFRS in US dollar terms, our
annual revenue for fiscal 2014 stood at ,249 million, while the net
income stood at ,751 million, a year-on-year growth of 1.5%. Liquid
assets of the Company, comprising cash and cash equivalents, current
available-for-sale financial assets, investments in certificates of
deposit and quoted debt securities, stood at Rs. 30,251 crore at the end
of fiscal 2014, versus Rs. 23,958 crore at the end of fiscal 2013 on IFRS
basis. We are pleased to announce a final dividend of Rs. 43 per share
for fiscal 2014.
Our clients are one of our most important stakeholders and we strive to
be consistently relevant to their changing business needs. On a
consolidated basis, we added 238 new clients, taking our client base to
890. We expanded our global footprint further this fiscal, with a new
delivery center in Eindhoven in the Netherlands.
We commenced work on our new campuses in Indore, Mohali, Noida, and
Nagpur in India and in Araraquara in Brazil.
To enable our clients to anticipate and adapt to the ever-changing
business environment, we have had to transform ourselves internally
many a time. In recent years, we embarked on a strategy that focuses on
opportunities from three key streams — first, highly-competitive, large
revenue-yielding outsourcing projects; second, consulting-led,
end-to-end solutions leveraging technology for higher margins; third,
intellectual-property-based solutions, to delink revenue from effort.
Over the past year, while we continued to stay the course of that
strategy, we sharpened its execution. In fiscal 2014, we increased our
focus on the first stream while ensuring that the second and third
Our biggest assets are our employees. Through their hard work, passion
and commitment to excellence, they help us differentiate ourselves in
the marketplace and realize our aspirations. We added 39,985 employees
to the Infosys family (net addition of 3,717). The total employee
strength as on March 31, 2014 was 1,60,405 for Infosys and its
Our vendor partners constitute another important stakeholder group. We
manage our supply chain responsibly and work with our suppliers to
achieve business efficiencies. We launched the Supplier Code of Conduct
in fiscal 2014 to further strengthen our supply chain business
While delivering value to our clients, we make sure that we do not lose
focus of the need to give back to society. Through the Infosys
Foundation, we continue to expand our reach and make a difference to
society by empowering people and communities at the bottom of the
pyramid, and providing opportunities to improve standards of living.
Our flagship industry-academia partnership program, Campus Connect,
launched in 2004, works with 372 institutions today. About 41,000
students and 1,476 faculty members were benefitted by the program this
In October 2013, we concluded a civil settlement with the U.S.
Department of State, Immigrations and Customs Enforcement and the U.S.
Department of Homeland Security that brought to a close the
investigation by the U.S. Attorney''s office for the Eastern District of
Texas relating to I-9 paperwork errors and visa matters involving the
Although we exceeded our initial guidance and feel encouraged as our
growth rate doubled, we believe that the results are below the
benchmarks that we set for ourselves. To get back on the path of
industry-leading performance that is expected of us, we have embarked
on three strategic initiatives — to increase sales effectiveness, to
improve our delivery efficiency and to enhance our cost
Our practices, partnerships and innovations won us many accolades this
fiscal. British Telecom''s ''Seamless Desktop'' program, powered by
Infosys AssistEdge, won the prestigious ''Global Telecoms Business
Innovation Award'' for 2013 in the consumer service innovation category.
We were positioned as a Leader in Gartner''s Magic Quadrant for SAP
Application Management Services and for Oracle Application
Implementation Services worldwide. Gartner''s International Retail Core
Banking report positioned us as a Leader for the seventh time in a row
for Finacle®. Finacle® also won the ''Best Core Banking Technology''
award for the second year running at the Innovation in Technology and
Transaction Banking Awards 2013, organized by The Banker. At
Asiamoney''s Annual Corporate Governance Poll 2013, we were recognized
as the ''Best Overall for Corporate Governance, Responsibilities of
Management and the Board of Directors, Disclosure and Transparency,
Shareholders'' Rights and Equitable Treatment, and Investor Relations''.
The IR global rankings 2013 ranked us third for corporate governance
practices globally and second for IR websites in India. We also topped
the 2013 Institutional Investor Rankings among all Indian companies
across sectors. Our commitment to sustainability paid us rich dividends
too. We were named the ''2013 Environmental Tracking (ET) Carbon Ranking
Leader'' by the Environmental Investment Organization. The Australian
Human Resources Institute honored us with the 2013 Ian Kiernan Award
for Corporate Social Responsibility.
Our subsidiaries continued to gain traction by winning strategic deals
and accolades. Infosys Public Services, Inc. (IPS) was named in the
''Healthcare''s Hottest Companies for 2013'' list by Modern Healthcare.
Avivia Health from Kaiser Permanente recognized IPS as a strategic
partner to develop its innovative gamification platform to improve
consumer engagement. Infosys China was named among the ''Top 10 Global
Services Providers in China'' for 2013 at the fifth Annual China
With our unwavering focus on growing existing client relationships and
increasing market share through service differentiation and operational
agility, we have made several strategic changes to our organizational
structure and leadership. We reorganized ourselves into eight business
segments : Financial Services; Insurance; Energy and Communications;
Life Sciences and Healthcare; Resources and Utilities; Manufacturing;
Retail, Consumer Packaged Goods and Logistics; and Growth Markets.
In January this year, we adopted a two-president structure by elevating
B. G. Srinivas and U. B. Pravin Rao as Presidents. B. G. Srinivas will
focus on global markets and U. B. Pravin Rao will focus on global
delivery and service innovation. The Executive Council ceased to exist
from April 1, 2014.
As you are aware, in June, 2013, the Board requested Narayana Murthy to
take over as the Executive Chairman of the Board, and he agreed. The
Board also inducted three new members — U. B. Pravin Rao, Kiran
Mazumdar-Shaw, and Carol M. Browner. All three bring to the table a
wealth of experience and insights that will enrich the Company in many
I would like to take this opportunity to share another exciting update
with you. Starting this year, we are publishing our Annual Report in a
new integrated format. The ''Integrated Annual Report 2014'' is our first
attempt to provide a holistic report encompassing economic, social and
environmental parameters. Our reporting framework fits the broader
process of setting organizational strategy implementing action plans,
and assessing outcomes. This report complies with the mandatory listing
requirement of the Securities and Exchange Board of India (SEBI) and is
in line with the nine principles enunciated in the National Voluntary
Guidelines on Social, Environmental and Economic Responsibilities of
Business. Our ''Sustainability Report'' provides detailed information on
our responsible business practices across these three parameters in
accordance with the Global Reporting Initiative G4 framework.
We have been through a period of external and internal challenges in
the last three years. Externally, we were facing legal and regulatory
challenges, investigation by the U.S. Department of Justice and
increased regulatory scrutiny. Internally, we were embarking on a new
strategic direction and transitioning from Infosys 2.0 to Infosys 3.0.
A new organizational structure and leadership were just settling into
Today, all these challenges are behind us and the investigation by the
Department of Justice has been concluded. The Infosys 3.0 transition is
complete and well-received by our clients, who have reposed their
confidence in us. The new organizational structure and leadership are
firmly in place. Our revenue growth this year has doubled from the last
fiscal, and margins are on the right trajectory
As we prepare for the future, we strongly believe that these changes
will help us stay agile and relevant to changing client priorities. We
could not agree more with George Bernard Shaw who said, Progress is
impossible without change. In the year ahead, we foresee exciting
times for us and for the industry. We also foresee change. With your
trust and support, we are confident that we will continue to evolve
with the changing times.
As I write my last communication in the Annual Report as CEO and MD, I
cannot help reflecting on the challenges we have faced since our
earliest days as a technology services company. These challenges have
only made us more resilient. I have had my own share of challenges over
the past three years. I feel happy that I have addressed these
challenges head-on and will be leaving behind a stronger and more
S. D. Shibulal
Bangalore Chief Executive Officer and
April 15, 2014 Managing Director