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,
2016. 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
2016 2015 2016 2015
Income from software
services and products 53,983 47,300 62,441 53,319
expenses 32,255 27,828 37,609 31,834
Gross profit 21,728 19,472 24,832 21,485
Selling and marketing
expenses 2,694 2,549 3,431 2,946
General and administration
expenses 3,271 2,961 4,281 3,668
before depreciation 15,763 13,962 17,120 14,871
amortization 1,115 913 1,266 1,017
Operating profit 14,648 13,049 15,854 13,854
Other income 3,009 3,337 3,128 3,430
Profit before exceptional
item and tax 17,657 16,386 18,982 17,284
Profit on transfer of
business (1) 3,036 412 - -
Profit before tax 20,693 16,798 18,982 17,284
Tax expense 4,907 4,634 5,301 4,911
Profit before minority
interest and share in net
profit / (loss) of
associate 15,786 12,164 13,681 12,373
Share in net profit /
(loss) of associate - - (3) (1)
Profit for the year 15,786 12,164 13,678 12,372
Surplus – opening balance 35,152 30,392 36,483 31,453
Dividend eliminated on
consolidation of trust - - 28 21
Special Economic Zone
Reserve on utilization (2) 591 - 591 -
Deconsolidation of trust (3) - (42) - -
Amount available for
appropriation 51,529 42,514 50,780 43,846
Interim 2,297 1,723 2,297 1,723
Final 3,273 3,388 3,273 3,388
Total dividend 5,570 5,111 5,570 5,111
Dividend tax 1,134 1,034 1,134 1,034
Amount transferred to
general reserve 1,579 1,217 1,579 1,217
Amount transferred to
other reserve (4) - - 1 1
Amount transferred to
Special Economic Zone
Re-investment Reserve (2) 591 - 591 -
Surplus – closing balance 42,655 35,152 41,905 36,483
share (EPS) before
exceptional item (5)(6)
Basic 55.51 51.17 59.85 54.13
Diluted 55.51 51.17 59.84 54.13
EPS after exceptional
Basic 68.73 52.96 59.85 54.13
Diluted 68.73 52.96 59.84 54.13
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 24, 2015, the Board of Directors of Infosys authorized the
Company to execute a Business Transfer Agreement and related documents
with EdgeVerve Systems Limited (EdgeVerve), to transfer the business of
Finacle and Edge Services. Based on an enterprise valuation done by an
independent valuer, the business was transferred for a consideration of
Rs, 3,222 crore and Rs, 177 crore for Finale and Edge Services,
respectively. Net assets amounting to Rs, 363 crore (including working
capital amounting to Rs, 337 crore) have been transferred and accordingly
a gain of Rs, 3,036 crore has been recorded as an exceptional item.
During the year ended March 31, 2015, based on an enterprise valuation
done by an independent valuer, the business was transferred for a
consideration of Rs, 421 crore with effect from July 1, 2014. Net assets
amounting to Rs, 9 crore have also been transferred and accordingly a
gain of Rs, 412 crore has been recorded as an exceptional item. The
transfer of assets and liabilities has been accounted for at carrying
values and does not have any impact on the consolidated financial
(2) 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 the Section
10AA(2) of the Income-tax Act, 1961.
(3) Effective January 1, 2015, the Infosys Limited Employees'' Welfare
Trust (''the Trust'') has been deconsolidated consequent to SEBI (Share
Based Employee Benefits) Regulations, 2014 issued on October 28, 2014.
(4) Under the Swiss Code of Obligation, a few Infosys Consulting
Holding AG (formerly Lodestone Holding AG) 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
(5) Equity shares are at par value of Rs, 5 per share.
(6) The Company has allotted 1,14,84,72,332 fully-paid-up equity shares
of face value of Rs, 5 each in June 2015, and 57,42,36,136 fully-paid-up
equity shares were allotted on December 2014, pursuant to a bonus issue
approved by the shareholders. For the bonus issue, 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
Revenues – standalone
Our total income on a standalone basis increased to Rs, 53,983 crore from
Rs, 47,300 crore in the previous year, at a growth rate of 14.1%. Our
software export revenues aggregated to Rs, 52,709 crore, up by 14.6% from
Rs, 45,993 crore in the previous year. Out of the total revenue, 66.0%
came from North America, 21.8% from Europe, 2.4% from India and 9.8%
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 34.0% in the current year from 36.0% in the previous year.
Revenues – consolidated
Our total income on a consolidated basis increased to Rs, 62,441 crore
from Rs, 53,319 crore in the previous year, at a growth rate of 17.1%.
Our software export revenues aggregated to Rs, 60,818 crore, up by 16.9%
from Rs, 52,035 crore in the previous year. Out of the total revenue,
62.7% came from North America, 23.0% from Europe, 2.6% from India, and
11.7% from the Rest of the World. On a consolidated basis, our share of
revenues from all parts of the world outside North America decreased to
37.3% in the current year from 38.5% in the previous year.
Profits – standalone
Our gross profit on a standalone basis amounted to Rs, 21,728 crore
(40.2% of revenue), as against Rs, 19,472 crore (41.2% of revenue) in the
previous year. Sales and marketing costs were 5.0% of our revenue for
the year ended March 31, 2016 as compared to 5.4% for the year ended
March 31, 2015. General and administration expenses were 6.1% and 6.3%
of our revenues during the current year and previous year,
respectively. The operating profit before depreciation amounted to Rs,
15,763 crore (29.2% of revenue), as against Rs, 13,962 crore (29.5% of
revenue) in the previous year. The profit before exceptional item and
tax was Rs, 17,657 crore (32.7% of revenue), as against Rs, 16,386 crore
(34.7% of revenue) in the previous year. Net profit was Rs, 15,786 crore
(29.2% of revenue), as against Rs, 12,164 crore (25.8% of revenue) in the
Profits – consolidated
Our gross profit on a consolidated basis amounted to Rs, 24,832 crore
(39.8% of revenue), as against Rs, 21,485 crore (40.3% of revenue) in the
previous year. Sales and marketing costs were 5.5% of our revenue for
the years ended March 31, 2016 and March 31, 2015. General and
administration expenses were 6.9% of our revenues each during the
current year and previous year. The operating profit before
depreciation amounted to Rs, 17,120 crore (27.4% of revenue), as against
Rs, 14,871 crore (27.9% of revenue) in the previous year. The profit
before tax was Rs, 18,982 crore (30.4% of revenue), as against Rs, 17,284
crore (32.4% of revenue) in the previous year. Net profit was Rs, 13,678
crore (21.9% of revenue), as against Rs, 12,372 crore (23.2% of revenue)
in the previous year.
Capital expenditure on tangible assets – standalone
This year, on a standalone basis, we capitalized Rs, 2,163 crore. This
comprises Rs, 945 crore for investment in computer equipment, Rs, 5 crore
on vehicles and the balance of Rs, 1,213 crore on infrastructure.
In the previous year, we capitalized Rs, 2,540 crore. This comprised Rs,
694 crore for investment in computer equipment, Rs, 3 crore on vehicles
and the balance of Rs, 1,843 crore on infrastructure.
Capital expenditure on tangible assets – consolidated
On a consolidated basis, we capitalized Rs, 2,379 crore including certain
assets having gross book value of Rs, 4 crore taken over on acquisitions
during the year. During the current year, Rs, 1,105 crore has been
invested in computer equipment, Rs, 6 crore on vehicles, and the balance
of Rs, 1,268 crore on infrastructure.
In the previous year, we capitalized Rs, 2,673 crore including assets
having gross book value of Rs, 22 crore taken over on an acquisition.
During the year, Rs, 778 crore has been invested in computer equipment, Rs,
6 crore on vehicles, and the balance of Rs, 1,889 crore in
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. We believe that our
working capital is sufficient to meet our current requirements. As on
March 31, 2016, on a standalone basis, we had liquid assets of Rs, 30,711
crore, as against Rs, 29,705 crore at the previous year-end. On a
consolidated basis, we had liquid assets of Rs, 34,371 crore at the
current year-end, as against Rs, 32,543 crore at the previous year-end.
These funds comprise deposits with banks and highly rated financial
institutions, liquid mutual funds, fixed maturity plans, tax-free bonds
and government bonds. The details of the tax-free bonds and government
bonds are disclosed under the ''non-current and current investments''
section in the financial statements in this Annual Report.
The Board, in its meeting held on October 12, 2015, declared an interim
dividend of Rs, 10 per equity share. Further, the Board, in its meeting
held on April 15, 2016, has recommended a final dividend of Rs, 14.25 per
equity share for the financial year ended March 31, 2016. The proposal
is subject to the approval of shareholders at the ensuing Annual
General Meeting to be held on June 18, 2016. The total dividend
appropriation (excluding dividend tax) for the current year is Rs, 5,570
crore, as against Rs, 5,111 crore in the previous year. Dividend
(including dividend tax) as a percentage of consolidated net profit
after tax is 49.7%, as compared to 49.8% in the previous year.
The Register of Members and Share Transfer Books will remain closed on
June 11, 2016 for the purpose of payment of the final dividend for the
financial year ended March 31, 2016, and the Annual General Meeting.
The Annual General Meeting is scheduled to be held on June 18, 2016.
The Company has allotted 1,14,84,72,332 fully-paid-up equity shares of
face value Rs, 5 each in June 2015 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.
The Company allotted 57,42,36,166 fully-paid-up equity shares of face
value Rs, 5 each in December 2014 to the shareholders of the Company in
proportion of 1:1 and consequently, the number of shares increased from
57,42,36,166 to 1,14,84,72,332.
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, 1,579 crore to the general reserve on account
of declaration of dividend. An amount of Rs, 42,655 crore is proposed to
be retained in the surplus at the standalone level.
We have not accepted any fixed deposits and, as such, no amount of
principal or interest was outstanding as of the Balance Sheet date.
Particulars of contracts or arrangements made with related parties
Particulars of contracts or arrangements with related parties referred
to in Section 188(1) of the Companies Act, 2013, in the prescribed Form
AOC-2, is appended as Annexure 2 to the Board''s report.
Material changes and commitments affecting financial position between
the end of the financial year and date of the report
The shareholders have approved the following resolutions through a
postal ballot concluded on March 31, 2016 :
- 2015 Stock Incentive Compensation Plan and grant of stock incentives
to eligible employees of the Company under the Plan
- 2015 Stock Incentive Compensation Plan and grant of stock incentives
to eligible employees of the Company''s subsidiaries under the Plan
- Re-appointment of Prof. Jeffrey S. Lehman, as an Independent Director
- Appointment of Dr. Punita Kumar-Sinha, as an Independent Director
- Re-appointment of Dr. Vishal Sikka, Chief Executive Officer and
Managing Director, on the following terms and conditions :
– Base pay : An annual base salary of US ,000,000 to be paid in
accordance with the Company''s normal practices and subject to
– Variable pay : Annual performance-based variable pay at a target
level of US ,000,000 less applicable tax and subject to the Company''s
achievement of fiscal year performance targets set by the Board as
described in the postal ballot;
– Stock compensation : Eligible to receive an annual grant of 1) US
,000,000 of fair value in RSUs which vest over time (''time-based
RSUs''), subject to continued service, and 2) US ,000,000 in
performance-based equity and stock options upon achievement of certain
performance targets as described in the postal ballot;
– Employee benefits and paid vacation as applicable to other whole-time
directors of the Company;
– Minimum and maximum remuneration : Should Dr. Sikka fail to achieve
minimum performance targets, his remuneration as proposed will fall to
US ,000,000 annually, consisting of US ,000,000 of base salary and
US ,000,000 of time-based RSUs. If Dr. Sikka''s performance targets
are exceeded, the performance-based payments for variable components of
his compensation (variable pay and performance equity) will be capped
at 150% of the target compensation for such variable components.
The details of the postal ballot result are provided in the Corporate
governance report which forms part of this Annual Report.
Variation in market capitalization
As at March 31, Increase /
2016 2015 (decrease) in %
(in Rs, crore) 2,79,837 2,54,771 9.8
ratio (1) 20.4 20.5 (0.5)
in the market price
of shares in com-
the last public
offer price (2) 6,56,600
Notes : Data based on share prices quoted on NSE
(1) Based on consolidated Indian GAAP financial statements
(2) Last public offer price in India has been adjusted for bonus issues
and stock split.
Management''s discussion and analysis
In terms of the provisions of Regulation 34 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Management''s discussion and
analysis is set out in this Annual Report.
2. Business Strategy
Our strategic objective is to build a sustainable organization that
remains relevant to the agenda of our clients, while generating
profitable growth for our investors. In order to do this, we will apply
the priorities of ''renew'' and ''new'' to our own business and cascade it
to everything we do.
These translate to the following strategic focus areas :
Build expansive, lasting relationships with our clients by delivering
differentiated market 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 with 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 allows us to enable clients to transform their
businesses with innovative strategies and solutions. Through our
transformation service offering, which we call ''Aikido'', we help our
clients address key aspects of their business. Our ''Ai'' offering, a
result of our investments in building intellectual property, helps
clients leverage software-based platforms to dramatically boost
productivity and to deliver next-generation experiences to their
customers. Our ''Ki'' offering captures the know-how of existing client
technology landscapes, which we then leverage for process improvements
and transformation. With our ''Do'' offering, which incorporates Design
Thinking concepts, we help clients identify and prioritize their most
significant problems and solve them in rapid, iterative and innovative
ways. We offer an end-to-end suite of high-quality, highly-responsive
and innovation-led services spanning business consulting, IT services,
software platform-based services and business process management. This
enables us to partner with our clients on large, multi-year
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, the gap between us and our clients,
and the gap between us and the ultimate end-user.
We also plan to acquire new clients and increase our presence in new
geographies and market segments by investing in targeted business
development and marketing. We will 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 leveraging
software process engineering and collaboration technologies to improve
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 acceptable 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 reduce project delivery times.
Enhance our operational processes for agility and optimal cost : W e
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, cost of operating our campuses and whether we are optimally
realizing the efficiencies of scale.
Last year, we launched our Zero Bench program. This program allows us
to effectively deploy our un-utilized resources into internal projects.
Zero Bench enables employees to fulfill their professional aspirations
while at the same time helping us to improve our employee engagement
and our operational efficiency.
Attract and retain a global, diverse, motivated and high-performing
employee base : Our employees are our biggest assets. To meet the
evolving needs 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. Our performance
management system is objective and rewards performance. 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 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 0 million to tap
into innovation networks of early-stage companies and universities to
gain access to new thinking and business models.
Our go-to-market business units are organized as follows :
- Financial Services
- Retail, CPG and Logistics
- Energy, Utilities, Communications and Services
- Life Sciences, Healthcare and Insurance
- Infosys Public Services
Our service delivery is organized as horizontal centers of excellence :
- Infosys Global Consulting
- Global Delivery
– Enterprise Solutions
– Infosys Digital
– Enterprise Mobility
– 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
- Infosys BPO
Our client-centric approach continues to bring us high levels of client
satisfaction. We derived 97.1% of our consolidated revenues from repeat
business this fiscal. We, along with our subsidiaries, added 325 new
clients, including a substantial number of large global corporations.
Our total client base at the end of the year stood at 1,092. The client
segmentation for the current and previous years on a consolidated basis
is as follows :
Clients 2016 2015
1 million dollar 558 529
5 million dollar 268 244
10 million dollar 177 159
25 million dollar 88 83
50 million dollar 52 47
75 million dollar 31 29
100 million dollar 14 15
200 million dollar 6 4
300 million dollar 1 -
We added 19.67 lakh sq. ft. of physical infrastructure space during the
year. The total available space as on March 31, 2016 stands at 423.35
lakh sq. ft. The number of marketing offices as on March 31, 2016 was
85, the same as the previous year.
Infosys Innovation Fund
We have an innovation fund with an outlay of US 0 million to tap
into innovation networks of early-stage companies and universities to
gain access to new thinking and business models.
Through the Infosys Innovation Fund, we have invested in six start-ups
Subsidiaries and associates
We, along with our subsidiaries, provide consulting, technology,
outsourcing and next-generation services. At the beginning of the year,
we had 13 direct subsidiaries, 29 step-down subsidiaries and one
associate. As on March 31, 2016, we have 16 direct subsidiaries, 30
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, which forms part of this Annual Report. Further, a
statement containing the salient features of the financial statement of
our subsidiaries in the prescribed format AOC-1 is appended as Annexure
1 to the Board''s report. The statement also provides the details of
performance and financial 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 Bangalore, India.
During the year, investments were made in the following subsidiary and
new acquisitions :
- EdgeVerve Systems Limited (EdgeVerve) : On April 24, 2015, the Board
of Directors of Infosys authorized the Company to execute a Business
Transfer Agreement and related documents with EdgeVerve, to transfer
the business of Finacle and Edge Services. Post the requisite approval
from shareholders through postal ballot on June 4, 2015, a Business
Transfer Agreement and other related documents were executed with
EdgeVerve to transfer the business with effect from August 1, 2015. The
Company has undertaken an enterprise valuation by an independent valuer
and accordingly the businesses were transferred for a consideration of
Rs, 3,222 crore and Rs, 177 crore for Finacle and Edge Services,
respectively. The consideration was settled through the issue of
85,00,00,000 equity shares amounting to Rs, 850 crore and 25,49,00,000
non-convertible redeemable debentures amounting to Rs, 2,549 crore in
EdgeVerve, post the requisite approval from shareholders on December
11, 2015. The transfer of assets and liabilities was accounted for at
carrying values and did not have any impact on the consolidated
- Kallidus Inc. and Skava Systems Pvt. Ltd. (Kallidus) : On June 2,
2015, Infosys acquired 100% of the voting interests in Kallidus Inc.,
(d.b.a Skava) (Kallidus), a leading provider of digital experience
solutions, including mobile commerce and in-store shopping experiences
to large retail clients, and 100% of the voting interests of Skava
Systems Private Limited, India, an affiliate of Kallidus. The business
acquisition was conducted by entering into a share purchase agreement
for a cash consideration of US million (approximately Rs, 578 crore)
and a contingent consideration of up to US million (approximately Rs,
128 crore on acquisition date), the payment of which is dependent upon
the achievement of certain financial targets by Kallidus over a period
of three years ending on December 31, 2017.
- Noah Consulting LLC (Noah) : On November 16, 2015, Infosys acquired
100% membership interest in Noah Consulting LLC, a leading provider of
advanced information management consulting services for the oil and gas
industry. The business acquisition was conducted by entering into a
share purchase agreement for a cash consideration of US million
(approximately Rs, 216 crore) and a contingent consideration of up to US
million (approximately Rs, 33 crore on acquisition date) and retention
bonus of up to US million (approximately Rs, 212 crore on acquisition
date), referred to as retention bonus, payable to the employees of Noah
at each anniversary following the acquisition date over the next three
years, subject to their continuous employment with the Group at each
anniversary. The payment of contingent consideration to the sellers of
Noah was dependent upon the achievement of certain financial targets by
Noah for the years ended December 31, 2015 and December 31, 2016.
During the year ended March 31, 2016, based on the assessment of Noah
achieving the targets for the respective periods, the entire contingent
consideration was reversed.
EdgeVerve Systems Limited, a wholly-owned subsidiary of Infosys,
develops innovative software products and offers them on premise and on
the cloud. Our products help businesses develop deeper connections with
stakeholders, power continuous innovation and accelerate growth in the
digital world. We power our clients'' growth in rapidly-evolving areas
like banking, interactive commerce, distributive trade, credit
servicing, customer service and enterprise buying.
Today, EdgeVerve products and platforms are used by global corporations
across industries such as financial services, insurance, retail and
CPG, life sciences, manufacturing, and telecom. Our solutions are
available in two broad categories – Edge suite and Finacle®.
Finacle®, our universal banking solution suite, is the choice of
financial institutions across 92 countries and serves over 839 million
bank customers. Finacle® solutions address the core banking, e-banking,
mobile banking, CRM, payments, treasury, origination, liquidity
management, Islamic banking, wealth management, and analytics needs of
financial institutions. Finacle® solutions are consistently rated as a
leader in the market by top industry analysts and is proven to be the
most scalable banking platform globally.
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). Our platforms leverage open
source software components, and / or our proprietary software products,
all of which can be deployed in the public or private cloud or on the
- IIP : Our IIP helps enterprises embark on their Big Data journey by
providing a compelling price-performance ratio in data processing while
also enabling them to take advantage of innovations happening in the
open source community. IIP is based on an assembly of tested open
source components and offers rapid deployment as a base for a broad
variety of industry-specific scenarios.
- IAP : Our IAP, which was built on top of IIP, enables improved
efficiencies in IT operations. IAP helps ensure business outcomes by
monitoring and analyzing in near real-time, the health of all layers of
IT systems including business processes, applications and
infrastructure leveraging stream processing and Big Data technologies.
IAP aims to predict issues using knowledge models, machine learning
algorithms and predictive analytics and prevent business disruptions
through proactive interventions. IAP automates repetitive tasks in IT
operations and leverages advanced capabilities like natural language
processing and artificial intelligence.
- Panaya : Panaya, an Infosys company, is a leader in ERP change
analytics and cloud-based enterprise software testing. The Panaya
CloudQuality™ Suite disrupts the risk, time and costs required to
deliver all types of SAP® and Oracle® EBS changes. Powered by Big Data
analytics and aggregating since 2008, Panaya Cloud Quality™ Suite
delivers insights that tell organizations what will break, how to fix
it and what to test. It is constantly improving and finding smarter
ways to perform everything from day-to-day maintenance to major
Skava, an Infosys company, powers the next generation of digital
transformation for leading retailers worldwide by delivering the most
versatile technology platform in the industry. Skava enables digital
shopping experiences for global brands across mobile, tablet, desktop,
in-store, and all emerging channels.
OSSmosis, the Infosys Open Source program, was set up with an objective
of ''nurturing innovation through Open Source adoption and
contribution''. Through this program, over 25,000 employees have been
trained on key Open source technologies; 12 key communities of
practices, including BigData and DevOps, have been setup; new and
existing partners are engaged for enablement, joint solutions and
go-to-market. Over 100 key contributors have been contributing to
forums like Spark, Selenium, Jenkins etc. Infosys'' POV on Open Source
OSSmosis-open-source-journey.pdf) was acknowledged by several clients,
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, client value,
innovation and productivity improvement.
We continue to adhere to international quality standard certifications
such as ISO 9001, ISO 22301, ISO 20000, ISO 27001, AS EN 9100, ISO
13485, TL 9000 S V, OHSAS 18001 and ISO 14001. We have received an
independent auditors'' assurance report on compliance to ISAE 3402 /
SSAE16 and a certification of compliance on PCIDSS V 3.0 for Infosys
BPO Limited. 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 2015, only 7% of 12,691 organizations
globally are operating at Level 5, which is the highest level of
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.
Our Quality department partners with business units to help implement
and sustain the Zero Distance program, an initiative to infuse
grassroots innovation across all our projects, and effectively measure
benefits to the client, and ensure substantial client impact.
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.
The Infosys brand is a key intangible asset of the Company. It
positions 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 and
innovation at the grassroots level. The way Infosys connects with its
clients, builds out great ideas and creates value from innovations is
called Zero Distance – describing its approach to operating at the
intersection of desirability, feasibility and viability.
Our marketing reach extends globally through advertisements, public
relations and digital marketing initiatives. We participate in premier
business and industry events around the world. We also organize
signature events and roundtables across geographies. ''Confluence'', our
flagship client event, is consistently well-attended and rated highly
by our clients and industry partners.
Awards and recognition
In fiscal 2016, we were conferred multiple awards and recognition, both
international and national. The major ones among them are listed as
Business and management
- We won the ''Corporate Citizen of the Year Award'' at the Economic
Times Award 2015.
- The Institute of Company Secretaries of India honored us with the
certificate of recognition for adopting exemplary corporate governance
practices at the National Awards for Excellence in Corporate
- Our Annual Report 2014-15 received the Gold award in the IT category
at the League of American Communications Professionals Vision Awards
2014. In the Asia-Pacific region category, we were featured among the
top 50 reports, while the letter to the shareholder was adjudged the
''Best Shareholder Letter''.
- We were ranked among Asia''s Most Admired Brands of 2014 by World
Consulting & Research Corporation, a leading brand rating and ranking
- Infosys Finacle® has been named a leader by Forrester Research, Inc.
in The Forrester Wave™ : Mobile Banking Solutions, Q4 2015 report, and
in The Forrester Wave™ : Omnichannel Banking Solutions, Q3 2015 report.
- We were positioned as a Leader and Star Performer in 2015 Banking
Application Outsourcing PEAK Matrix™ by Everest.
- We received the Highest Product Score in ''Gartner Critical
Capabilities for International Retail Core Banking'' Report. Finacle®
emerged as the leading solution with the highest scores across all the
- We won the 2015 Oracle Excellence Award for the strategic focus areas
of SaaS and PaaS, and Specialized Partner of the Year, North America,
for CX Cloud as well as PaaS.
- We were positioned as a Leader in Gartner''s Magic Quadrant for Oracle
Application Management Services as well as for SAP Implementation
Services Worldwide, 2015.
- We were recognized as one of the ''most relevant'' service providers
for digital strategy in North America by the Everest Group in a report
titled ''North America Digital Adoption Survey – How Pervasive is Your
- IDC Energy Insights, a leading market intelligence and advisory
services firm, positioned Infosys as a ''major player'' for providing
professional services to the oil and gas industry.
- We were positioned as a Leader in Gartner''s Magic Quadrant for
Application Testing Services, Worldwide, 2015.
- We were rated as ''Leaders'' in the Forrester Global Wave for Workplace
- We were positioned as a ''Major Player'' in the IDC MarketScape on
Microsoft implementation services.
- The IDC MarketScape report, ''Worldwide Manufacturing PLM Strategic
Consulting 2015 Vendor Assessment'' positioned Infosys as a ''Leader'' in
providing manufacturing product lifecycle management (PLM) strategic
- We were awarded the Leadership in Energy and Environment Design
(LEED) India Platinum rating for two of our buildings in Pune and
- At The Energy Award, London, we won the Innovative Technology of the
- Infosys was placed third in the Industrial Water Use Efficiency
category at the Federation of Indian Chambers of Commerce and Industry
- We received the NDTV Property Award under the Most
Environment-Friendly Commercial / Office Space category.
- We also won the Golden Peacock Award under the Corporate Award for
Sustainability – India category.
- The Solar Energy Global Conference and Awards recognized Infosys
under four categories : Best Company for Commercial Rooftop
Installations, Best Company for Sustainability in Solar Energy, Company
of the Year, and Best Company for Green Initiatives.
For the complete list of awards and recognition won by Infosys, refer
3. Human resources management
We have set up a scalable recruitment and human resources management
process. Over the last year, on a standalone basis, we received
11,15,745 applications from prospective employees. The Infosys Group
added 17,857 (net) and 52,545 (gross) employees this year, taking the
total strength to 1,94,044 from 1,76,187 at the end of the previous
On a standalone basis, the attrition rate for fiscal 2016 stands at
13.6%, compared to 18.9% for the previous year.
Human resources management at Infosys goes beyond the set boundaries of
compensation, performance reviews and development. We look at the
employee''s entire lifecycle, 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.
A large part of our focus in fiscal 2015 was on listening to employee
feedback to make the right changes. Zero Distance, a movement to bring
innovation to every project at Infosys, facilitated by a five-point
framework of innovation was an example of employee engagement built
through ground-up involvement in organizational growth and strategy.
Through the year, we gathered feedback from employees across all our
communication channels and platforms, including our annual employee
engagement survey (LITMUS 2016). From LITMUS, we identified a number of
tracks to be act ionized, and invited employees to be a part of these.
We also worked on an exercise to identify influencer groups within the
organization, whose networks could be leveraged to spread ideas of
innovation and collaboration. To ensure that employees are able to be
their productive best, we worked 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.
As part of the focus on human resources development during fiscal 2016,
we introduced iCount, the renewed performance management system. We
moved away from the bell curve, to focus on individual employee
contribution and continuous feedback, and built a self-serviced
platform to empower employees to design their own journey within the
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 issues raised and resolved regarding sexual harassment
of women at the workplace are available in the Enhancing employee value
section in the Business Responsibility Report which forms part of this
We continue to improve our talent supply chain processes to maintain a
consistent high utilization throughout the year and effectively support
our higher growth.
In fiscal 2016, we launched an innovative program named ''Zero Bench'' to
productively engage employees who are on bench (between client
engagements) to create valuable outcomes for the organization. Our
employees can now leverage our training infrastructure to upgrade their
skills during their bench period and also work on short, internal
projects of their choice, to gain exposure, hone their skills, extend
networks, while delivering value.
To foster a culture of innovation and rapid problem-solving using
technology, we launched the second season of the Infosys Global
Hackathon. During this fiscal, we also launched Compass, a digital
platform to mobilize opportunities in careers, learning and networks
within the organization.
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 2016, the total training provided for Infoscions was over
2.12 million person days. Many of our employees also took external
certifications, creating a large pool of certified people.
To enhance the innovation quotient among 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 the Design Thinking training
crossed 80,000 as of March 31, 2016. The Design Thinking training has
been imparted to client teams, leadership teams, Infoscions and fresh
Our industry-academia partnership program, Campus Connect, made
progress through the launch of electives to help engineering colleges
run new programs within their curricula. During fiscal 2016, we engaged
with 1,225 faculty members who in turn trained 40,996 students. With
this, the total number of beneficiaries covered has reached 13,111
faculty members and 3,71,639 students from 317 engineering
Our knowledge management system set a new record by winning the Global
Most Admired Knowledge Enterprise (MAKE) award for the 11th time, Asian
MAKE award for the 13th time and Indian MAKE award for the 11th 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 within Infosys. The primary purpose of the institute
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 classroom training, coaching,
''leaders teach'' and experience-sharing sessions. Senior leaders from
across Infosys and its subsidiaries are the beneficiaries of ILI''s
Particulars of employees
The ratio of remuneration of each director to the median of employees''
remuneration as per Section 197(12) of the Companies Act, 2013, read
with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 forms part of the Board''s report
A statement containing the names of every employee posted in India
throughout the financial year and in receipt of a remuneration of Rs, 60
lakh or more, or posted 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 forms part of the Board''s report (Annexure 3b). The details of
employees posted outside India can be made available on request.
Employees'' stock options / Restricted stock units
2015 Stock Incentive Compensation Plan
The shareholders approved the issuance of stock incentives to the
employees of the Company and its subsidiaries under the 2015 Stock
Incentive Compensation Plan (''the 2015 Plan'') in the recently concluded
postal ballot on March 31, 2016. The 2015 plan is in compliance with
the SEBI (Share Based Employee Benefits) Regulations, 2014 and the
details are also available on our website
(https://www.infosys.com/investors/corporate-governance). The purpose
of the 2015 Plan is to :
- Attract, retain and motivate talented and critical employees;
- Encourage employees to align individual performance with Company
- Reward employee performance with ownership.
The 2015 Plan provides for stock incentives to eligible employees such
as Restricted Stock Units (RSU) and stock options (together ''Stock
Incentives''). Subject to applicable law and conditions for exercise,
eligible employees are entitled to receive equity shares, American
Depositary Receipts (ADRs) or cash on exercise of the Stock Incentives.
The Stock Incentives vest over a period of four years from the date of
the grant, or such other period as decided in the sole discretion by
the Administrator. The 2015 Plan shall be administered by the
nomination and remuneration committee of the Board constituted by the
Company pursuant to the provisions of Section 178 of the Companies Act,
2013 (''the Administrator''). The Administrator''s decisions,
determinations, and interpretations will be final and binding on all
eligible employees and participants under the 2015 Plan. Each Stock
Incentive shall be evidenced by an award agreement that will specify
such terms and conditions as the Administrator will determine,
including whether the eligible employees will get equity shares of the
Company, ADRs of the Company or cash on exercise of the Stock
The Board had, in October 2015, recommended that the Company create a
pool of up to 2% of the shares outstanding towards the 2015 Plan for
employees of the Company. The Management has recommended to the Board
that a budget of 1% of the shares outstanding be allocated at this time
to the needs of the Plan, amounting to approximately 2,40,38,883 equity
shares. This 1% pool includes 1,12,23,576 treasury shares of the
Company that are currently held in trust towards the 2011 RSU Plan.
Consequently, an additional 1,28,15,307 equity shares, amounting to
0.56% of the shares outstanding, will be required to be set aside for
the 2015 Plan. We expect the pool of 2,40,38,883 shares to be granted
over a period of four to seven years.
To calculate the employee compensation cost, the Company uses the Fair
Value Method for the valuation of the Stock Incentives granted.
The exercise price for the restricted stock units will be equal to the
par value of the shares and the exercise price of stock options would
be market price as on the date of the grant.
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) of which 1,70,38,883 shares will be issued as RSUs at par
value (including shares currently held under the RSU 2011 Plan
amounting to 1,12,23,576 equity shares) and 70,00,000 will be issued as
stock options at market price. The mix of RSUs, options or other equity
rights under the Plan may be adjusted in the sole determination of the
Administrator from time to time.
In June 2015, the Company, based on the recommendation of the
nomination and remuneration committee, made a grant of 1,24,061 RSUs to
Dr. Vishal Sikka. The grant price was Rs, 5 per RSU and the RSUs would
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.
Further, the award granted to Dr. Vishal Sikka on June 22, 2015 was
modified by the nomination and remuneration committee on April 14,
2016. There is no modification or change in the total number of RSUs
granted or the vesting period (which is four years). The modifications
relate to the criteria of vesting for each of the years. Based on the
modification, the first tranche of the RSUs will vest subject to
achievement of certain key performance indicators for the year ended
March 31, 2016.
During fiscal 2016, Dr. Vishal Sikka exercised 10,824 options and held
2,21,505 options outstanding as on March 31, 2016.
The details of the employee stock options / RSU plan form part of the
Notes to accounts of the financial statements in this Annual Report.
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 enhance and retain 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
Our Corporate governance report for fiscal 2016 forms part of this
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 (https://www.
policy.pdf). More detail on 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 details of
which are given in the Corporate governance report. The maximum
interval between any two meetings did not exceed 120 days, as
prescribed in the Companies Act, 2013.
Policy on directors'' appointment and remuneration
The current policy is to have an appropriate mix of executive and
independent directors to maintain the independence of the Board, and
separate its functions of governance and management. On March 31, 2016,
the Board consists of nine members, two of whom are executive or
whole-time directors, and seven are independent directors.
The policy of the Company on directors'' appointment and remuneration,
including 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 (https://www.infosys.com/investors/corporate-
governance/Documents/nomination-remuneration-policy.pdf). There has
been no change in the policy since the last fiscal year. 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.
SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, mandates that the Board shall monitor and review the Board
evaluation framework. The framework includes the evaluation of
directors on various parameters such as :
- Board dynamics and relationships
- Information flows
- Relationship with stakeholders
- Company performance and strategy
- Tracking Board and committees'' effectiveness
- Peer evaluation
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
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 Board approved the evaluation results as collated by the
nomination and remuneration committee.
Familiarization program for independent directors
All new independent directors inducted into the Board attend an
orientation program. The details of training and familiarization
program are provided in the Corporate governance report and is also
available on our website (https://www.infosys.com/investors/corporate-
governance). 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 (https://www.
Infosys'' code of conduct for the prevention of insider trading
The Board of Directors has adopted the Insider Trading Policy in
accordance with the requirements of the SEBI (Prohibition of Insider
Trading) Regulation, 2015 and the applicable US Securities laws. The
Insider Trading Policy of the Company lays down guidelines and
procedures to be followed, and disclosures to be made while dealing
with shares of the Company, as well as the consequences of violation.
The policy has been formulated to regulate, monitor and ensure
reporting of deals by employees and to maintain the highest ethical
standards of dealing in Company securities.
The Insider Trading Policy of the Company covering code of practices
and procedures for fair disclosure of unpublished price sensitive
information and code of conduct for the prevention of insider trading,
is available on our website
The Securities and Exchange Board of India (SEBI), on September 2,
2015, issued SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 with the aim to consolidate and streamline the
provisions of the Listing Agreement for different segments of capital
markets to ensure better enforceability. The said regulations were
effective December 1, 2015. Accordingly, all listed entities were
required to enter into the Listing Agreement within six months from the
effective date. The Company entered into Listing Agreement with BSE
Limited and the National Stock Exchange of India Limited during
We seek to promote and follow the highest level of ethical standards in
all our business transactions guided by our value system. The SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015
mandated the formulation of certain policies for all listed companies.
All our corporate governance policies are available on our website
The policies are reviewed periodically by the Board and updated based
on need and new compliance requirement.
In addition to its Code of Conduct and Ethics, key policies that have
been adopted by the Company are as follows :
Name of the policy Brief description
Recoupment Policy The policy deals with the provisions if the Company
its financial statements. It allows the Company to recover any
incentive-based compensation received by an executive officer that is
in excess of what would have been payable based on the restated and
corrected financial statements. Whistleblower Policy The Company has
adopted the whistleblower mechanism for
(Policy on vigil directors and employees to report concerns about
mechanism) behavior, actual or suspected fraud, or violation of the
code of conduct and ethics. There has been no change to the
Whistleblower Policy adopted by the Company during fiscal 2016.
Nomination and This policy formulates the criteria for determining
Remuneration Policy competencies, positive attributes and independence
appointment of a director (executive / non-executive) and also the
criteria for determining the remuneration of the directors, key
managerial personnel and other employees. Corporate Social The policy
outlines the Company''s strategy to bring about a
Responsibility Policy positive impact on society through programs
relating to hunger, poverty, education, healthcare, environment and
lowering its resource footprint. Policy on Material The policy is used
to determine the material subsidiaries and Subsidiaries material
non-listed Indian subsidiaries of the Company and to provide the
governance framework for them. Related Party The policy regulates all
transactions between the Company and its Transaction Policy related
Insider Trading Policy The policy provides the framework in dealing
with securities of the Company.
Corporate Policy The policy is aimed at providing clear guidelines and
procedures Statement on Investor for disclosing material information
outside the Company in Relations order to provide accurate and timely
communications to our shareholders and the financial markets. Policy
for Determining This policy applies to disclosures of material events
affecting Materiality for Infosys and its subsidiaries. This policy is
in addition to the
Disclosures Company''s corporate policy statement on investor relations,
which deals with the dissemination of unpublished, price-sensitive
information. The Board amended the corporate policy statement on
investor relations to make it consistent with the materiality policy
and conform to the U.S. regulations. Document Retention The policy
deals with the retention and archival of corporate and Archival Policy
records of Infosys Limited and all its subsidiaries.
Directors and Key Managerial Personnel
Chairman of the Board
K. V. Kamath stepped down as Chairman and Independent Director of the
Company effective June 5, 2015 consequent to his appointment as the
President of the New Development Bank promoted by BRICS nations. R.
Seshasayee, an independent director, took over as the Chairman of the
Board effective June 5, 2015.
The Board made the following appointments / re-appointments based on
the recommendations of the nomination and remuneration committee :
- Re-appointment of Prof. Jeffrey S. Lehman as an Independent Director
of the Board effective April 14, 2016.
- Appointment of Dr. Punita Kumar-Sinha as an Independent Director of
the Board effective January 14, 2016.
- Re-appointment of Dr. Vishal Sikka as Chief Executive Officer and
Managing Director of the Company with effect from April 1, 2016.
We thank the shareholders for their support in confirming the
above-mentioned appointments in the recently-concluded postal ballot on
March 31, 2016.
The Board, on the recommendations of the nomination and remuneration
committee, also appointed :
- M. D. Ranganath as the Chief Financial Officer effective October 12,
- A. G. S. Manikantha as Company Secretary effective June 22, 2015.
Further, the Board appointed A. G. S. Manikantha as the Compliance
Officer for SEBI Listing regulations with effect from December 1, 2015.
As per the provisions of the Companies Act 2013, Dr. Vishal Sikka,
retires by rotation at the ensuing Annual General Meeting and being
eligible, seeks re-appointment. The Board recommends his
Retirements and resignations
K. V. Kamath resigned as Independent Director with effect from June 5,
2015, consequent to his nomination as president of the BRICS New
Development Bank. The Board places on record its appreciation for the
services rendered by K. V. Kamath during his tenure with the Company.
Carol M. Browner resigned as Independent Director with effect from
November 23, 2015 due to personal reasons. The Board places on record
its appreciation for the services rendered by Carol M. Browner during
her tenure with the Company.
Rajiv Bansal resigned as CFO with effect from October 12, 2015. The
Board places on record its appreciation for the services rendered by
him during his tenure with the Company.
Committees of the Board
Currently, the Board has 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.
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.
Internal financial control and its adequacy
The Board has adopted policies and procedures for ensuring the orderly
and efficient conduct of its business, including adherence to the
Company''s policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial
Significant and material orders
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Company''s
operations in future.
Extract of annual return
In accordance with Section 134(3)(a) of the Companies Act, 2013, an
extract of the annual return in the prescribed format is appended as
Annexure 6 to the Board''s report.
Directors'' responsibility statement
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 the 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, 2016, 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
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 2017. 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.
The Auditors'' Report for fiscal 2016 does not contain any
qualification, reservation or adverse remark. The Auditors'' Report is
enclosed with the financial statements in this Annual Report.
Parameshwar G. Hegde of Hegde & Hegde, Practicing Company Secretaries,
was appointed to conduct the secretarial audit of the Company for the
fiscal 2016, as required under Section 204 of the Companies Act, 2013
and Rules thereunder. The secretarial audit report for fiscal 2016
forms part of the Annual Report as Annexure 5 to the Board''s report.
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
The Board has appointed Parameshwar G. Hegde, Hegde & Hegde, Practicing
Company Secretaries, as secretarial auditor of the Company for fiscal
Auditors'' certificate on corporate governance
As required by SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the auditors'' certificate on corporate governance is
enclosed as Annexure 4 to the Board''s report. The auditors'' certificate
for fiscal 2016 does not contain any qualification, reservation or
6. Corporate social responsibility
Infosys has been an early adopter of corporate social responsibility
(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.
As per the Companies Act, 2013, all companies having a net worth of Rs,
500 crore or more, or a 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 CSR committee of the Board of Directors comprising three
or more directors, at least one of whom should be an independent
director. All such companies are required to spend at least 2% of the
average net profits of their three immediately preceding financial
years on CSR-related activities. Accordingly, the Company was required
to spend Rs, 256 crore towards CSR activities, out of which Rs, 202
crore was utilized on activities specified in Schedule VII of the
Companies Act, 2013. A few of the projects undertaken are multi-year
projects. In addition, as part of its ongoing CSR programs, the
Company has spent Rs, 10 crore on Chennai flood relief and
rehabilitation activities and Rs, 76 crore on multiple CSR initiatives
– including environmental sustainability and conservation of natural
resources aimed at long-term sustainability of the ecosystem – which
were not covered under Schedule VII of the Companies Act, 2013. At the
consolidated level, the total expenditure on CSR activities, as
specified in Schedule VII of the Companies Act, 2013, was Rs, 216
Details of the CSR policy and initiatives adopted by the Company on CSR
during the year is available on our website (https://www.
responsibility-policy.pdf). The annual report on our CSR activities is
appended as Annexure 7 to the Board''s report.
Established in 1996 as a not-for-profit trust for social welfare
activities, the Infosys Foundation has grown as a pioneer and guide in
implementing programs in the areas of healthcare, education, hunger
eradication, rural development, disaster relief, arts and culture, and
destitute care across India.
The highlights of the Foundation''s work in fiscal 2016 included setting
up of a center for artificial intelligence at the Indraprastha
Institute of Information Technology, Delhi, help in rebuilding
communities in calamity-hit Visakhapatnam and flood-affected Chennai,
aid in building toilets in schools in Odisha, conservation of the
endangered Olive Ridley turtles and partnership with Bharatiya Vidya
Bhavan in 11 states to promote underprivileged artists. The Foundation
also supported the construction of water facility and enclosures for
animals at the Bannerghatta National Park in Bangalore, and efforts to
conserve India''s vast medical heritage.
The Foundation has also been relentlessly continuing its pursuits to
improve healthcare and education in rural India. For more details on
the Foundation''s activities, refer to the website,
It is with deep gratitude that we acknowledge the efforts of our
employee volunteers. We also thank the trustees of the Foundation, who
continue to devote their time and effort in planning, guiding and
monitoring its activities.
Infosys Foundation USA
Infosys Foundation USA took on a leadership role in supporting and
expanding access to Computer Science (CS) and Maker education across
the U.S., especially in under-represented and underserved communities.
In fiscal 2016, as part of its mission to prepare students for an
increasingly digital future, Infosys Foundation USA engaged and
invested in CS and Maker-related programs in the following key areas :
- CS professional development : A shortage of trained teachers
continues to be the most critical bottleneck for expanding CS in
schools. By providing foundational support for organizations like
Code.org and initiatives like CS PD Week, Infosys Foundation USA
supported CS professional development (teacher training) opportunities
for several thousand teachers nationwide, especially in high-poverty
- CS teacher support : Access to tools and infrastructure is another
area where resources are required for teachers who seek to bring CS to
their classrooms. Infosys Foundation USA supported teachers directly
through organizations like DonorsChoose.org and Tynker by sponsoring CS
classroom projects and education software.
- CS diversity : Infosys Foundation USA believes free bootcamps,
hackathons and after-school programs provide a much-needed on-ramp and
early exposure to coding.
- Making : With the Infy Maker awards and through partnerships with
CREATE Lab at the Carnegie Mellon University, Infosys Foundation USA
sought to give students the opportunity to develop the creative
confidence to be Makers.
- Research and curriculum development : Working with Stanford
University and other leading research organizations, Infosys Foundation
USA supported the larger CS education community in key areas.
We thank our employee volunteers for their interest and dedication. We
also thank our trustees, who continue to guide and inspire us.
Infosys Science Foundation
The Infosys Science Foundation (ISF) was set up by Infosys and some of
its management in 2009 to encourage the pursuit and practice of the
sciences. 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 2015
were Prof. Umesh Waghmare (Professor, Theoretical Sciences Unit,
Jawaharlal Nehru Centre for Advanced Scientific Research, Bangalore) in
Engineering and Computer Science, Prof. Jonardan Ganeri (Global Network
Professor of Philosophy, New York University, New York, and Visiting
Professor, Department of Philosophy, King''s College, London) in
Humanities, Dr. Amit Sharma (Head, Structural and Computational Biology
Group, International Centre for Genetic Engineering and Biotechnology,
New Delhi) in Life Sciences, Prof. Mahan Mj (Professor, School of
Mathematics, Tata Institute of Fundamental Research, Mumbai) in
Mathematical Sciences, Prof. G. Ravindra Kumar (Senior Professor,
Department of Nuclear and Atomic Physics, Tata Institute of Fundamental
Research, Mumbai) in Physical Sciences, and Dr. Srinath Raghavan
(Senior Fellow, Centre for Policy Research, New Delhi) in Social
Sciences. The winners were felicitated by the President of India,
Pranab Mukherjee, in a ceremony in New Delhi on February 13, 2016.
The winners of the Infosys Prize serve as role models for young
researchers and scholars. Jurors and winners of the prize give public
talks around the country under the Infosys Science Foundation Lectures,
to talk about their work and instill a love for science and research
among young students. The ISF expanded Gnanadeepa, a program to train
educators on how to impart science and math concepts so students will
grasp them better. Apart from training teachers from government
schools, the program now trains B.Ed and D.Ed teachers as well. The
Foundation also hosts contests, school events and media debates to
promote a healthy discussion around science and research in the
country. For more details, visit www.infosys-science-foundation.com.
We would like to express our gratitude to the trustees who take an
active part in driving ISF''s activities through the year.
The ACM – Infosys Foundation Award
The Association for Computing Machinery (ACM), 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 5,000 annual award. The winner of the
2015 award is Stefan Savage, Professor in the Computer Science and
Engineering department''s Systems and Networking Group at UC San Diego''s
Jacobs School of Engineering.
Our sustainability charter is driven by our core values and ethics.
Our sustainability actions encompass economic, social and environmental
Through our organization-led projects such as Campus Connect, Rural
Reach and SPARK, we support students from underprivileged backgrounds
to pursue higher education, provide infrastructure for government
schools, and train faculty across schools and colleges. For more
information about our industry-academia partnerships, visit our
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 the campus get off the grid and run 100% on renewable
energy. Details of our environmental sustainability actions are
available in Annexure 8 to the Board''s report and in the Environment
section of the Business Responsibility Report.
Conservation of energy, research and development, technology
absorption, foreign exchange earnings and outgo
The particulars as prescribed under sub-section (3)(m) of Section 134
of the Companies Act, 2013, read with the Companies (Accounts) Rules,
2014, are enclosed as Annexure 8 to the Board''s report.
Business Responsibility Report
The SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (''Regulations'') mandates inclusion of the Business Responsibility
Report (BRR) as part of the Annual Report for top 100 listed entities
based on market capitalization. In compliance with the regulation, we
have provided the BRR as part of our Annual Report.
We also publish the Sustainability Report annually. Our report follows
the Global Reporting Initiative''s G4 framework. This is a comprehensive
report that covers all aspects of our sustainability activities. The
report is audited by an external auditor, DNV GL.
As in the previous years, this year too, we are publishing only the
statutory disclosures in the print version of the Annual Report.
Electronic copies of the Annual Report 2015-16 and Notice of the 35th
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.
We thank our customers, vendors, investors, bankers and the ministry of
labor for their continued support during the year. We place on record
our appreciation of the contribution made by our employees at all
levels. Our consistent growth was made possible by their hard work,
solidarity, cooperation and support.
We thank the governments of various countries where we have our
operations. We also thank the Government of India, particularly the
Ministry of Communication and Information Technology, the Ministry of
Commerce, the Ministry of Finance, the Ministry of Corporate Affairs,
the Customs and Excise Departments, the Income Tax Department, the
Reserve Bank of India, the State Governments, the Software Technology
Parks (STPs) / Special Economic Zones (SEZs) – Bangalore, Bhubaneswar,
Chandigarh, Chennai, Gurgaon, Hyderabad, Indore, Jaipur, Mangalore,
Mysore, Nagpur, 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
Bangalore Chairman Chief Executive Officer and
April 15, 2016 Managing Director