The are delighted to present the report on our business and operations
for the year ended March 31st, 2012.
1. Results of our operations
in Rs crore, except per share data
2012 2011
Income from software services and products 31,254 25,385
Software development expenses 17,835 14,267
Gross profit 13,419 11,118
Selling and marketing expenses 1,453 1,219
General and administration expenses 1,905 1,485
Operating Profit Before Interest,
Depreciation, Taxes and Amortization
(PBIDTA) 10,061 8,414
Interest - -
Depreciation 794 740
Operating profit before tax 9,267 7,674
Other income, net 1,829 1,147
Net profit before tax and exceptional item 11,096 8,821
Provision for taxation 3,110 2,378
Net profit after tax and before
exceptional item 7,986 6,443
Dividend income, net of taxes (1) 484 _
Net profit after tax and after
exceptional item 8,470 6,443
Profit and Loss account balance brought
forward 15,591 13,806
Reserves on termination of Infosys
Consulting Inc. (84) -
Amount available for appropriation 23,977 20,249
Dividend
Interim 862 574
Special dividend (2) 574 1,722
Final 1,263 1,149
Total dividend 2,699 3,445
Dividend tax 438 568
Amount transferred to general reserve 847 645
Balance in Profit and Loss account 19,993 15,591
EPS before exceptional item (3)
Basic 139.07 112.26
Diluted 139.06 112.22
EPS after exceptional item (3)
Basic 147.51 112.26
Diluted 147.50 112.22
Notes: 1 crore = 10 million
(1) Dividend received of Rs 484 crore, net of taxes of Rs 94 crore from
the wholly-owned subsidiary, Infosys Australia Pty. Limited.
(2) 10 years of Infosys BPO operations for 2012 and 30th year special
dividend for 2011.
(3) Equity shares are at par value of Rs 5/- each.
2. Business
Our total income increased to Rs31,254 crore from Rs25,385 crore in the
previous year, at a growth rate of 23.1%. Our software export revenues
aggregated to Rs 30,514 crore, up by 23.1% from Rs 24,791 crore in the
previous year. Out of the total revenue, 65.1% came from North America,
21.2% from Europe, 2.3% from India and 11.4% from the Rest of the
World.
Our revenues from India have increased from Rs 594 crore to Rs 740 crore,
with a growth rate of 24.6%. The share of the fixed-price component of
the business was 41.1%, compared to 42.1% during the previous year.
Our gross profit amounted to Rs 13,419 crore (42.9% of revenue) as
against Rs 11,118 crore (43.8% of revenue) in the previous year. The
Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA)
amounted to Rs 10,061 crore (32.2% of revenue) as against Rs 8,414 crore
(33.2% of revenue) in the previous year. Sales and marketing costs were
4.6% and 4.8% of our revenue for the years ended March 31, 2012 and
March 31, 2011, respectively. General and administration expenses were
6.1% and 5.8% of our revenues during the current year and previous
year, respectively. The net profit after tax before exceptional item
was Rs 7,986 crore (25.6% of revenue) as against Rs 6,443 crore (25.4% of
revenue) in the previous year. We seek long-term partnerships with our
clients that will enhance their value while addressing their IT
requirements. Our customer- centric approach has resulted in high
levels of client satisfaction. We derived 97.8% of our revenues from
repeat business. We, along with our subsidiaries, added 172 new
clients, including a substantial number of large global corporations.
The total client base at the end of the year stood at 694. The client
list for the current and previous years are as follows :
in Nos.
2012 2011
Million-dollar clients 399 366
Five-million-dollar clients 190 187
Ten-million-dollar clients 132 126
Fifty-million-dollar clients 40 28
Hundred-million-dollar clients 13 11
During the year, we added 16.70 lakh sq. ft. of physical infrastructure
space. The total available space now stands at 293.33 lakh sq. ft. The
number of marketing offices as at March 31, 2012 was 65 as compared to
64 in the previous year.
3. Subsidiaries
We have nine subsidiaries : Infosys BPO Limited, Infosys Technologies
(Australia) Pty. Limited, Infosys Technologies (China) Co. Limited,
Infosys Consulting India Limited, Infosys Technologies S. de R. L. de
C. V, Infosys Technologies (Sweden) AB, Infosys Technologia do Brasil
Ltda, Infosys Public Services Inc., and Infosys Technologies (Shanghai)
Co. Limited. We have four step-down subsidiaries : Infosys BPO s.r.o.,
Infosys BPO (Poland) Sp.Z.o.o, McCamish Systems LLC, and Portland Group
Pty. Limited. To increase our client relevance and sustain industry
leadership, we made organizational changes to the Company and as part
of this re-organization we decided to integrate Infosys Consulting Inc.
into Infosys Limited. Accordingly, on October 7, 2011, the Board of
Directors of Infosys Consulting Inc., approved the termination and
winding down of the entity, and entered into a scheme of amalgamation
and initiated its merger with Infosys Limited. The termination of
Infosys Consulting Inc. became effective on January 12, 2012, in
accordance with the Texas Business Organizations Code. Effective
January 12, 2012, the assets and liabilities of Infosys Consulting
Inc., have been transferred to Infosys Limited. Infosys Consulting
India Limited (subsidiary of Infosys Consulting Inc.) is currently in
the process of being merged into Infosys Limited. Further, Infosys BPO
acquired 100% of the voting interest in Portland Group Pty. Limited, a
strategic sourcing and category management services provider based in
Australia for a cash consideration of Rs 199 crore. This acquisition was
completed during January 2012.
As per Section 212 of the Companies Act, 1956, we are required to
attach the Directors'' report, Balance Sheet, and Profit and Loss
account of our subsidiaries. The Ministry of Corporate Affairs,
Government of India vide its Circular No. 2/2011 dated February 8,
2011, has provided an exemption to companies from complying with
Section 212, provided such companies publish the audited consolidated
financial statements in the Annual Report. Accordingly, the Annual
Report 2011-12 does not contain the financial statements of our
subsidiaries. The audited annual accounts and related information of
our subsidiaries, where applicable, will be made available on request.
The same will be published on our website, www.infosys.com. These
documents will also be available for inspection during business hours
at our registered office in Bangalore, India.
4. Products and platforms
Our products and platforms are focused on innovation-led business
growth for our clients. Our offerings leverage the latest technologies
in cloud computing, mobility, big data, rich media and social to
provide guaranteed business outcomes.
Products
Finacle
Finacle™ from Infosys is a comprehensive, flexible and fully web-
enabled solution that addresses the core, e-banking, mobile, CRM,
wealth management, treasury, and Islamic banking requirements of
universal, retail and corporate banks worldwide. Finacle™, our
universal banking solution, partners with banks worldwide to transform
products, processes and customer experience, arming them with
''accelerated innovation'' that is the key in building tomorrow''s
bank. Other offerings include the Finacle Core Banking solution for
regional rural banks; Finacle Digital Commerce solution, which enables
next generation digital payments; Finacle Alerts solution, which alerts
end-users on events recorded by diverse business systems; Finacle
Advizor, which combines the convenience of human intervention with
banking self-service channels through the interplay of video, audio and
data communication; and Finacle WatchWiz, a comprehensive
new-generation monitoring solution that allows banks to monitor,
diagnose and resolve issues.
Our professional services complement the solutions portfolio and
includes consulting, package implementation, independent validation,
migration, application development and maintenance, systems
integration, software performance engineering and support.
Today, Finacle™ is the choice of 154 banks across 75 countries and
powers operations across 48,500 branches. Finacle™ enables its
customer banks to serve 423 million accounts and 347 million consumers
worldwide. Finacle™ is regarded as a leader in the core banking
market space by industry analysts since many years. Today, 42% of the
banks leveraging Finacle™ are among the Top 1000.
Finacle™ is one of the most scalable core banking solutions in the
world with an unparalleled performance benchmark of 104 million
effective transactions per hour for channel (non-branch) transactions
and 41 million effective transactions per hour for branch transactions.
This year, Finacle™ also sets a new global performance benchmark for
Finacle e-banking solution by effectively managing over half a million
online transactions and supporting over 2.8 million web page visits,
with over 33,000 concurrent users in 30 minutes.
Our other product range includes:
Flypp™ : This is a white-labeled app marketplace that helps our
partners to actively engage with their consumers across digital
channels.
Infosys Customer Self-Service Energy Manager : This product helps
utilities ensure customer delight through sustainable energy management
and revitalized customer service.
Infosys Health Benefit Exchange : This is a novel, transparent, and
competitive insurance hub designed for individuals and small businesses
to buy qualified plans.
Infosys iTrans form - ICD-10 Migration Suite : This suite is designed to
automate all stages of migration to ICD-10 and help organizations turn
compliance into a competitive advantage.
Infosys mConnect - Multi-Channel Mobile Middleware : This is a
middleware that is designed to optimize user experience through its
context-aware mobile multimode middleware across channels and
platforms.
Infosys Omni-Channel Personalization Engine : This engine that helps
retailers foster consumer relationship by presenting personalized
content across channels.
Infosys Real-Time Expertise Manager : This system delivers customer
delight by making every interaction effective and by providing instant
access to expertise.
Infosys Supply Chain Performance Management Suite : This analytical
suite gives a 360-degree view of Supply-Demand service chain
performance to drive collaborative decision-making.
Infosys Trading Platform : This platform helps to strategically
differentiate brokerage services and provide superior trading
experience to customers.
Infosys Transaction Reconciliation Platform : This comprehensive
operations platform addresses end-to-end reconciliation needs of an
enterprise.
Platforms
Our suite of business platforms, Infosys Edge™, is built around
specific themes that provide significant opportunities to enterprises.
We focus on delivering guaranteed business outcomes. We host, operate
and manage these platforms on a subscription-based pricing model,
providing our clients with rapid time-to-value. Our platforms include:
Infosys Brand Edge™ : This simplifies digital marketing across the
organization through a comprehensive cloud-based platform.
Infosys Commerce Edge™ : This helps in driving multi-channel commerce
by enhancing consumer experience, driving traffic and increasing order
value.
Infosys Credit Servicing Platform : This is an integrated credit
servicing and asset management platform, for managing multiple loans
and asset classes across the globe.
Infosys IT Asset Performance Management Platform : This helps in
maximizing return on IT asset investments by enhancing performance, and
mitigating risks while optimizing costs.
Infosys Social Edge™ : This helps in monetizing digital demand by
harnessing the power of social media to deepen consumer and employee
engagement.
Infosys Source-to-Pay Platform : This helps enterprises realize rapid
and sustainable savings across their source-to-pay lifecycle.
Infosys Talent Edge™ : This enables enterprises to deepen employee
engagement and simplify the entire hire-to-retire lifecycle of the
human resource function.
Infosys Trade Edge™ : This enables global companies to accelerate
long-term growth and profitability in emerging markets.
Infosys Wallet Edge™ : This enables a financial ecosystem of
consumers, merchants, telecoms, banks, governments, and enterprises, to
process payments.
5. Quality
We continue our journey of delivering value to our clients through
significant investments in quality programs. We have adopted several
external benchmarks and certifications. Infosys is certified under
various standards to meet client demands and enhance value delivery.
These include TL 9000-SV, ISO 9001, AS EN 9100, ISO 20000, BS25999,
OHSAS 18001, ISO 14001, ISO 27001 and ISO 13485. Infosys BPO has been
certified for eSCM - SP v 2.0 Level 5, the eSourcing Capability Model
for Service Providers developed by a consortium led by Carnegie Mellon
University''s Information Technology Services Qualification Center. Our
Australia and Shanghai centers have been assessed at SEI-CMMi Level 5.
Our Quality department handles large change management initiatives to
drive quality and productivity improvements across Infosys. It is
managed through the Balanced Scorecard and Infosys Scaling Outstanding
Performance (iSOP) program adopted from the Malcolm Baldrige National
Quality Award (MBNQA).
We continue to fine-tune our ''Business Value Articulation''
framework, which ensures alignment of our approaches to deliver value
to our clients. Our ''Business Value Realization'' program is an
initiative comprising frameworks, methodologies, processes and systems,
to promote articulation and assurance of business value for various
engagements.
6. Infosys Labs
As part of our strategic direction towards Infosys 3.0, Infosys Labs,
our research and innovation arm, has been driving research across the
''Building Tomorrow''s Enterprise'' (BTE) mega trends that will
transform the businesses of our clients. Inspired by the principle of
''Innovation Co-creation'', Infosys Labs has been strengthening its
innovation ecosystem with clients, partners and industry consortia.
Infosys Labs has also continued to focus on service differentiation and
developing client-focused business solutions.
Infosys Labs is organized as a global network of research labs and
innovation hubs. Our research agenda is driven by our strategic vision
of ''Building Tomorrow''s Enterprise'' and Business Value Realization.
We have created a ''Center of Innovation for Tomorrow''s Enterprise'',
which manages seven institutes pertaining to the seven themes of
''Building Tomorrow''s Enterprise''. We have identified large,
multidisciplinary problem spaces that embody the challenges facing our
clients and are creating technological solutions to solve these. The
Enterprise Technology Research group focuses on a number of topics
including visualization, semantic technology, context aware systems and
others. Our research also focuses on the software engineering and
services innovation aspects.
We believe that co-creation is the preferred mode of innovation. We
have set up innovation centers with a few clients, university partners,
technology partners and industry research bodies. We focus on creating
affordable solutions for tomorrow''s enterprises. Our research also
helps in significantly enhancing productivity of our service offerings
and helps create new services.
This year, over 119 articles were published by Infosys Labs''
researchers in leading journals, magazines and conference proceedings.
Infosys Labs Briefings, our highly respected peer-reviewed journal
published issues this fiscal year, in areas such as Modern Learning
Technologies and Model-based Software Engineering.
Infosys Labs collaborates with leading national and international
universities such as the University of Southern California, University
of Cambridge, Queensland University of Technology, University of
Illinois at Urbana Champaign, Indian Institute of Technology, Bombay
- Monash Research Academy, Purdue University, Indian Institute of
Information Technology - Bangalore.
This year, Infosys Labs'' Intellectual Property Cell filed 143 unique
patent applications in the United States Patent and Trademark Office
(USPTO), the Indian Patent Office and other jurisdictions. The
aggregate unique patent applications filed stand at 474 and are under
various stages of processing. The total granted patents are 47. Out of
these, 46 have been granted in the U.S. and one in Luxembourg.
7. Branding
Brand Infosys is one of the most important intangible asset that we
own. Our brand''s promise, ''Building Tomorrow''s Enterprise'',
unveiled last year, is gaining rapid traction and momentum across
markets. We provide comprehensive business solutions that leverage
technology and domain expertise to help our clients gain market
differentiation and competitive advantage. Our group is well known by
the brand, ''Infosys'' to all stakeholders and the general public.
We believe the word, ''Technologies'' is restrictive for the kind of
business we are pursuing today as a transformation partner for our
global clients. We are also playing a larger role as a systems
integrator by globally aligning with hardware, products and software
players. Considering this and to reflect our transition from a
provider of technology services to being a transformation partner to
our global clients, we changed our name, effective June 16, 2011, from
''Infosys Technologies Limited'' to ''Infosys Limited''. The name
change was effected following approval by the Board, our shareholders
and the Indian regulatory authorities.
Our brand has been recognized by leading publications and independent
industry bodies. We were :
- Ranked the World''s Most Innovative Companies by Forbes and HOLT, a
division of Credit Suisse
- Ranked as one of the Most Admired Thought Leaders in a survey by TLG
Communications and Globe Scan
- Conferred Asia''s Most Preferred Brands award in the IT category at
the Asian Leadership Awards, hosted by the Asian Confederation of
Businesses and supported by Stars of the Industry Group
- Ranked among the Greenest Brands for the third consecutive year, in a
consumer survey conducted by Cohn & Wolfe, Esty Environmental Partners
and Penn Schoen and Berland Associates
- Rated by Global Industry Analysts as a Leader in key services and
solutions across domains
We were featured in case studies and articles by leading industry
bodies. Forrester Research highlighted Infosys as a Gold Standard in
Training and published a case study on our Continuous Education &
Learning Programs in their report, The Importance Of Evaluating Your
Vendor''s Training Capability: What You Need To Know, September 2011.
For more details on the report and the award, visit www.infosys.com In
India, Business Today rated us at No. 2 in the survey on ''Best
Companies to Work For''. In the U.S., we were ranked fourth in this
year''s Bliss Leap Award among top 50 U.S. companies designated by
employees as the happiest places to work for.
We continue to leverage social media platforms to engage with potential
employees. This year, our Facebook fans crossed 1,45,000. We promote
our brand through targeted publications and at premier events around
the world. In addition to a targeted advertising campaign in Forbes and
Bloomberg Business Week this year, we maintained a leadership presence
at premier industry events like Oracle® Open World and Sapphire.
Confluence, our flagship client event held in the U.S. and Europe was
well-attended and highly appreciated. We had a strong presence at the
World Economic Forum 2012 held in Davos, Switzerland.
8. Awards and recognition
In 2011-12, as in the years preceding, we earned a number of awards and
honors from various industry bodies and media organizations across the
globe. We were :
- Positioned by Gartner in the leaders quadrant for Oracle application
services across Europe
- Winners of the 2011 Global Most Admired Knowledge Enterprises (MAKE)
Award, becoming the first and only Indian company to win the award
eight times
- Ranked fourth in the 2011 Bliss Leap Awards, instituted by
Career Bliss
- Ranked first in all the four categories — Best IR website, Best
Online Annual Report, Best Financial Disclosure and Best Corporate
Governance Practices — at the 2011 IR Global Rankings in India
- Recognized in the Institutional Investor magazine''s 2011 All-Asia
Executive Team Rankings
- Winners of the Platinum Award in The Asset Corporate 2010 Awards
- Named a Leader in IT Infrastructure Outsourcing by Forrester
- Adjudged India''s best company for corporate governance by the
Asia money poll
- Named India''s most respected company by Business World
9. Capital expenditure
This year, we capitalized Rs 807 crore. This comprises Rs 245 crore for
investment in computer equipment (includes computer equipment having
gross book value of Rs10 crore transferred from Infosys Consulting Inc.,
on its termination), Rs 17 crore in intellectual property rights, Rs 2
crore on vehicles and the balance of Rs 543 crore on infrastructure
investments. We invested Rs 158 crore to acquire 371 acres of land in
Bangalore, Bhubaneswar, Mangalore, Nagpur and Indore.
Last year, we added Rs 1,017 crore to our gross block excluding Rs 3
crore which was due to movement of land from leasehold to freehold to
our gross block. This comprised Rs 251 crore for investment in computer
equipment. The balance of Rs 764 crore was due to infrastructure
investments along with Rs 2 crore on vehicles. We invested Rs 225 crore
to acquire 267 acres of land in Delhi, Bangalore and Mangalore.
10. Liquidity
We continue to be debt-free and maintain sufficient cash to meet our
strategic objectives. We clearly understand that the liquidity in the
Balance Sheet has to balance between earning adequate returns and the
need to cover financial and business risks. Liquidity also enables us
to make a rapid shift in direction, should the market so demand. During
fiscal 2012, internal cash flows have more than adequately covered
working capital requirements, capital expenditure, investment in
subsidiaries and dividend payments. As at March 31, 2012, we had liquid
assets of Rs 19,898 crore as against Rs 15,284 crore at the previous
year-end.
These funds have been invested in deposits with banks, highly rated
financial institutions, certificates of deposits and liquid mutual
funds.
11. Increase in share capital
During the year, we issued 78,442 shares on the exercise of stock
options under the 1998 and 1999 Employee Stock Option Plans. As a
result of this, the outstanding issued, subscribed and paid-up equity
shares increased from 57,41,51,559 to 57,42,30,001 shares as at March
31, 2012.
12. Appropriations Dividend
Our policy is to pay dividend of up to 30% of the consolidated net
profit after tax of the Infosys group.
In October 2011, we paid an interim dividend of Rs 15/- per share. We
recommended a final dividend of Rs 22/- per share and a special dividend
of Rs 10/- per share on account of completion of 10 years of Infosys BPO
operations (par value of Rs 5/- each), making in all Rs 47/- per share
as dividend for the year.
The total dividend amount pay out is Rs 2,699 crore, as against Rs 3,445
crore in the previous year. The dividend for the previous year includes
the 30th year special dividend of Rs 30 per share amounting to Rs 1,722
crore. Dividend (including dividend tax) excluding special dividend as
a percentage of consolidated net profit after tax is 29.7% as compared
to 29.3% in the previous year.
The register of members and share transfer books will remain closed
from May 26, 2012 to June 9, 2012 (both days inclusive). Our Annual
General Meeting is scheduled to be held on June 9, 2012.
Transfer to reserves
We propose to transfer Rs 847 crore (10% of the net profit for the year)
to the general reserve. An amount of Rs 19,993 crore is proposed to be
retained in the Profit and Loss account.
13. Corporate governance
We continue to be a pioneer in benchmarking our corporate governance
policies with the best in the world. Our efforts are widely recognized
by investors in India and overseas. We have undergone the corporate
governance audit by ICRA and Credit Rating Information Services of
India Limited (CRISIL). ICRA has rated our corporate governance
practices at CGR 1. CRISIL has assigned CRISIL GVC Level 1 rating to
us.
We comply with the recommendations of the Narayana Murthy Committee on
Corporate Governance constituted by the Securities and Exchange Board
of India (SEBI). For fiscal year 2012, the compliance report is
provided in the Corporate governance report section of the Annual
Report. The auditors'' certificate on compliance with the mandatory
recommendations of the committee is provided in the Annexure to the
directors'' report section.
We have documented our internal policies on corporate governance. In
line with the committee''s recommendations, the Management''s Discussion
and Analysis of the financial position of the Company is provided in
this Annual Report.
During the year, we continued to fully comply with the U. S.
Sarbanes-Oxley Act of 2002. Several aspects of the Act, such as the
Whistleblower Policy and Code of Conduct and Ethics, have been
incorporated in our Company policy
14. Conservation of energy, research and development, technology
absorption, foreign exchange earnings and outgo
The particulars as prescribed under Sub-section (1)(e) of Section 217
of the Companies Act, 1956, read with the Companies (Disclosure of
particulars in the report of the Board of Directors) Rules, 1988, are
provided in the Annexure to the directors'' report section.
15. Particulars of employees
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees are set out in the
Annexure to the directors'' report section. However, as per the
provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the registered office of the Company. The same will also
be published on our website, www.infosys.com
16. Directors'' responsibility statement as required under Section 217
(2AA) of the Companies Act, 1956
The financial statements are prepared in accordance with the accounting
standards issued by the Institute of Chartered Accountants of India and
the requirements of the Companies Act, 1956, to the extent applicable
to us, and guidelines issued by SEBI on the historical cost convention
as a going concern and on the accrual basis. There are no material
departures from prescribed accounting standards in the adoption of the
accounting standards.
The Board of Directors accepts responsibility for the integrity and
objectivity of these financial statements. The accounting policies used
in the preparation of the financial statements have been consistently
applied except as otherwise stated in the notes accompanying the
respective tables. The estimates and judgments related to the financial
statements have been made on a prudent and reasonable basis, in order
that the financial statements reflect in a true and fair manner the
form and substance of transactions, and reasonably present our state of
affairs and profits for the year.
We have taken sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 1956, to safeguard the assets of the Company and to prevent and
detect fraud and other irregularities.
17. Directors
During the year, the Board appointed K. V Kamath as the Chairman of the
Board, S. Gopalakrishnan as the Executive Co-Chairman of the Board and
S. D. Shibulal as the Chief Executive Officer and Managing Director.
All of these appointments were effective August 21, 2011. The Board
inducted Ann M. Fudge, V Balakrishnan, B. G. Srinivas and Ashok Vemuri
as Additional Directors. Further, the Board appointed V Balakrishnan,
B. G. Srinivas and Ashok Vemuri as Whole-time Directors of the Company.
We seek your support in confirming all of these appointments.
As per Article 122 of the Articles of Association, S. Gopalakrishnan,
K. V Kamath, David L. Boyles and Prof. Jeffrey S. Lehman retire by
rotation in the forthcoming Annual General Meeting. All of them, being
eligible, seek re-appointment.
In accordance with the retirement policy for the Company''s Board, N. R.
Narayana Murthy and Prof. Marti G. Subrahmanyam retired from the Board
effective August 20, 2011 and August 23, 2011, respectively We place on
record our deep sense of appreciation for the services rendered by N.
R. Narayana Murthy and Prof. Marti G. Subrahmanyam during their tenure
as Board members.
The Board of Directors appointed N. R. Narayana Murthy as the Chairman
Emeritus. This is in recognition of his founding the company.
mentoring senior management and nurturing the organization over the
last 30 years.
18. Auditors
The auditors, B S R & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed.
19. Fixed deposits
We have not accepted any fixed deposits and, as such, no amount of
principal or interest was outstanding as of the Balance Sheet date.
20. Human resources management
Our employees are the most valuable assets of the Company. We
encourage innovation, meritocracy and the pursuit of excellence. We
have set up a scalable recruitment and human resources management
process, which enables us to attract and retain high-caliber employees.
We added 16,069 (net), excluding employee transfers of 711 from Infosys
Consulting Inc. as a part of its termination, and 33,201 (gross)
employees this year, taking our total strength to 1,24,789 from
1,08,009 at the end of the previous year. The Infosys group added
19,174 (net) and 45,605 (gross) employees this year, taking the total
strength to 1,49,994 from 1,30,820 at the end of the previous year. Our
attrition rate stands at 14.7% compared to 17.0% for the previous year.
Over the last year, we received 6,22,971 applications from prospective
employees and we continue to remain an employer of choice in the
industry.
21. Education & Research
We continue to make significant investments in the learning and
development of our employees. This has become even more important given
the pace at which things change in our industry. We introduced programs
in new technology areas such as Cloud Programming and Mobile
Application Development, last year. We enhanced our continuous
education programs with a new framework that provides more learning
flexibility to our employees. We also launched our collaboration with
international business schools for the co-creation and co-delivery of
business programs.
During the financial year, the total training provided for Infoscions
was over 1.6 million person days. Many of our employees also took
external certifications creating a large pool of certified people.
Our flagship industry-academia partnership program, Campus Connect,
made significant progress through the launch of electives to help
engineering colleges run new programs within their curricula. This has
been very well received by the academia. During the financial year, we
engaged with 1,500 faculty members who in turn trained 35,000 students.
With this, the total number of beneficiaries covered are over 7,200
faculty members and 1,53,000 students from 474 engineering
institutions.
SPARK is an Infosys program that exposes students in schools and
colleges to the current opportunities and developments in IT and raises
their aspirations. As part of this program, we engaged with over
1,30,000 students during the financial year. From its launch in 2008,
the program has reached out to over 5,00,000 students. Over 23,000
students participated in Aspirations 2020, the coding contest we
conduct for engineering students.
Our knowledge management system set a new record by winning the Global
Most Acknowledged Knowledge Enterprise (MAKE) award for the eighth
time. We were also awarded the Corporate University (CorpU) Xchange
Award 2011 for Campus Connect.
Our researchers demonstrated their thought leadership in several areas
through their publications at global conferences and through
contributions to book chapters and publications.
22. Infosys Leadership Institute
The Infosys Leadership Institute (ILI) was established with the aim of
developing world-class corporate leaders. The institute identifies
potential candidates and supports the development required to take on
key leadership positions within the Company. The institute aims to be a
globally recognized institution that remains relevant to Infosys while
advancing the field with original thought leadership.
Over the last year, ILI has engaged in several activities to grow our
high potential ''Tier leaders''. ILI deployed the ''Leadership
Journey Series'' of assessments and conducted coaching sessions to
help leaders with their personal development plans. It also developed
structured road maps guiding development around the seven key Infosys
leadership dimensions, as well as initiatives such as Leading Value
Creation. Tier leaders were offered internationally renowned programs
on ethical influence and charismatic leadership from globally
recognized experts.
In 2011-12, ILI showcased thought leadership through collaborations
with leading researchers across the globe. Our blogs in Leaderati and
Forbes.com received an unprecedented number of hits. Our team members
participated in over 27 conference presentations, publications and
keynote presentations.
23. Sustainability initiatives
Sustainability at Infosys has not been limited to the idea of
sustainable consumption alone. For us, sustainability has been at the
core of our business since inception. Our business philosophy -
Predictability, Sustainability, Profitability, and De-risking (PSPD) -
has been the underlying and overarching aspect of every business
decision that we have made over the past three decades. Our core values
and ethics are the bedrock of our sustainability practices.
Sustainability themes and actions are inextricably intertwined in our
everyday business practices. Sustainability actions at Infosys rest on
three pillars viz., Social contract, Resource intensity and Green
innovation.
A detailed report on our sustainability initiatives and actions is
published in the Infosys Sustainability Report 2011-12. For more
details, visit www.infosys.com
Today, enterprises have to honor the expectations of an extended set of
stakeholders which includes local communities, social organizations and
society in general. The following are some of the significant
initiatives that were taken up during the year :
Parishudh : This program focused on improving health and hygiene
measures in rural India. It was rolled out in Gulbarga, Bidar, Raichur
and Yadgir districts of Karnataka. As part of this program, the Infosys
Foundation built over 10,000 toilets in villages at a cost of Rs10
crore. Campus Connect : This program was set up to improve the
employability of engineering students. Over 7,200 faculty members and
1,53,000 students were trained through the program. The program has
contributed to the World Economic Forum 2011 report, Talent Mobility
Good Practices.
SPARK : Launched in 2008, this day-long program is aimed at raising the
aspirations of children across the country. The SPARK portfolio
includes three programs, Rural Reach Program (RRP), Catch Them Young
(CTY) and Spark Guru. RRP encourages children in class five to seven
from rural schools to pursue science and mathematics. CTY identifies
bright youngsters from urban schools for a two-week exclusive IT
training program at Infosys during their school holidays. Spark Guru
helps in competency building of school teachers from government and
government aided schools. This year, SPARK touched the lives of
3,97,819 students and faculty members.
Beneficiaries in Nos.
Girl students 1,85,533
Rural students 2,66,905
Faculty enabled 8,650
Employee volunteers 10,577
Total 3,97,819
Infosys employee volunteers : We have built an ecosystem primarily
driven by leadership, where employees contribute their personal time
and money to projects of their choice. Many of our employee- driven
volunteer programs have reached out to a large number of beneficiaries.
A few significant initiatives that were taken up during the year are :
Notebook Drive 2011-12 : This initiative is aimed at providing
stationery items to students of government schools and children from
less privileged backgrounds in India.
Green Connect : This is our employee volunteer eco-group at Bangalore.
It provides a platform for employees to initiate and engage in
activities related to climate change, the ecological balance of our
planet and become responsible citizens. The group has over 2,000 active
volunteers.
Resource intensity is about finding transformational ways to
de-intensify and achieve the same or better outcome using far lesser
resources. Since four years, the Green Infrastructure team has made
great strides in supporting sustainability at Infosys. By optimizing
design, technology and innovation we have significantly decreased our
energy and water consumption rates across all campuses. We have reduced
our per capita energy consumption by 32% in this year compared to
fiscal 2008 when we started our sustainability journey. Our goal now
is to be carbon neutral by 2018.
24. Employee Stock Option Plan (ESOP)
We had introduced various stock option plans for our employees. The
details of options granted under the 1998 Stock Option Plan (the 1998
Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :
1998 Plan 1999 Plan
Total grants authorized by
the plan (No.) 1,17,60,000 ADS 5,28,00,000
shares
Pricing formula on date of
grant Not less than
90% of
fair market
value Fair market
value
Variation in terms NA NA
Ratio of ADS to equity shares 1 ADS = 1
equity share NA
Options granted during the
year (No.) - -
Weighted average price per
option granted (Rs ) NA NA
Options vested as at
March 31, 2012 (No.) - 7,429
Options exercised during
the year (No.) 49,590 28,852
Total number of shares
arising as a result of
exercise of options 49,590 28,852
Money raised on exercise
of options (Rs crore) 3.72 1.86
Options forfeited and
lapsed during the year (No.) 480 8,185
Total number of options in
force at the end of the
year (No.) - 11,683
Grant to senior management - -
Employees receiving 5%
or more of the total number
of options granted during
the year - -
Employees granted options
equal to or exceeding
1% of the issued capital - -
Diluted EPS on issue of
shares on exercise
calculated in
accordance with AS 20
(Before exceptional items) 139.06 139.06
Diluted EPS on issue of shares
on exercise calculated in
accordance with AS 20
(After exceptional items) 147.50 147.50
SEBI has issued the Employee Stock Option Scheme and Employee Stock
Purchase Scheme Guidelines, 1999. This is effective for all stock
option schemes established after June 19, 1999. In accordance with
these guidelines, the excess of the market price of the underlying
equity shares as of the date of the grant over the exercise price of
the option, including up-front payments, if any, is to be recognized
and amortized on a straight line basis over the vesting period.
We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where
the options are issued to the employees at an exercise price not less
than the fair market value.
For fiscal 2012 and 2011 there was no stock compensation cost. During
fiscal 2012 and 2011, stock options under the 1998 Plan and 1999 Plan
have not been granted. Hence, the weighted average fair values of grant
during these years are nil.
All stock options under the 1998 and 1999 Employees Stock Option Plans
were granted at the prevalent market price on the date of grant.
Accordingly, we have calculated the compensation cost arising on
account of stock options granted using the intrinsic value method.
Hence, the disclosure in terms of Clause 12.1 (n) of SEBI (Employees
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, is not applicable.
2012 2011
No. of
options Weighted
average No. of
options Weighted
average
exercise
price
(Rs) exercise
price
(Rs)
1998 Plan
Outstanding at the
beginning of the year 50,070 683 2,42,264 613
Forfeited (480) 862 (3,519) 722
Exercised (49,590) 734 (1,88,675) 600
Outstanding at the end
of the year Nil - 50,070 683
Vested at the end of the year Nil _ 50,070 683
1999 Plan
Outstanding at the
beginning of the year 48,720 962 2,04,464 869
Forfeited (8,185) 430 (18,052) 964
Exercised (28,852) 643 (1,37,692) 823
Outstanding at the end of
the year 11,683 2,121 48,720 962
Vested at the end of the year 7,429 2,121 40,232 717
Restricted Stock Unit (RS U) Plan
During the year, we sought the approval of our shareholders, through a
postal ballot, to implement a Restricted Stock Unit (RSU) Plan. The
RSU Plan permits the grant of Restricted Stock Units, to certain
eligible employees of the Company. The purpose of the RSU Plan is to
motivate key employees and encourage them to align their individual
aspiration with the objectives of the Company. We have not yet issued
any units under the plan.
25. Infosys Science Foundation
The Infosys Science Foundation, a not-for-profit trust was set up to
promote research in pure and applied sciences. The Infosys Prize
instituted by the foundation endeavors to elevate the prestige of
scientific research in India and inspire young Indians to choose a
vocation in scientific research. The prize is given annually to honor
outstanding achievements of contemporary researchers and scientists
across five categories :
Category Areas of accomplishment
Physical Sciences Physics, Chemistry and Earth Sciences
Mathematical Sciences Mathematics and Statistics
Engineering and Computer All branches of Engineering
Science
Life Sciences Biology, Medicine and Plant Science
Social Sciences and History, Sociology, Anthropology,
Economics Political Science, Economics and
International Relations
The Infosys Prize 2011 presentation was held in Bangalore on January 9,
2012. Dr. A. P J. Abdul Kalam, former President of India, felicitated
the laureates with a 22 karat gold medallion, a citation and a cash
grant of Rs 50 lakh, each.
Expanding the scope of the awards, a sixth category has been introduced
for the Infosys Prize 2012. The new category, Humanities, will cover
Philosophy, History, Archeology, Linguistics and Literary Studies.
For more details about the Infosys Science Foundation, visit
www.infosys-science-foundation.com
26. Infosys Foundation
We established Infosys Foundation in 1996, as a not-for-profit trust to
support our social initiatives. The Foundation supports programs and
organizations devoted to the cause of the destitute, the rural poor,
the mentally challenged, and the economically disadvantaged sections of
the society. The Foundation also helps in the promotion of arts and
culture. The Infosys USA Foundation has committed a grant of US
0,000 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 |