To the members,
We are delighted to present the report on our business and operations for the yearended March 31, 2013.
|1. Results of our operations || |
| || |
in Rs. crore, except per share
| ||2013 ||2012 |
|Income from software services and products ||36,765 ||31,254 |
|Software development expenses ||21,662 ||17,835 |
|Gross profit ||15,103 ||13,419 |
|Selling and marketing expenses ||1,870 ||1,453 |
|General and administration expenses ||2,218 ||1,905 |
|Operating Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) ||11,015 ||10,061 |
|Interest || || |
|Depreciation ||956 ||794 |
|Operating profit ||10,059 ||9,267 |
|Other income ||2,215 ||1,829 |
|Net profit before exceptional item and tax ||12,274 ||11,096 |
|Dividend income (1) ||83 ||578 |
|Net profit before tax ||12,357 ||11,674 |
|Provision for taxation ||3,241 ||3,204 |
|Net profit after tax and exceptional item ||9,116 ||8,470 |
|Profit and Loss account balance brought forward ||19,993 ||15,591 |
|Intercompany dividend || || |
|Reserves on termination of Infosys Consulting Inc. || ||(84) |
|Amount available for appropriation ||29,109 ||23,977 |
|Dividend || || |
|Interim ||862 ||862 |
|Special dividend || ||574 |
|Final ||1,550 ||1,263 |
|Total dividend ||2,412 ||2,699 |
|Dividend tax ||403 ||438 |
|Amount transferred to general reserve ||911 ||847 |
|Balance in Profit and Loss account ||25,383 ||19,993 |
|Earnings Per Share (EPS) before exceptional item (2) || || |
|Basic ||157.55 ||139.07 |
|Diluted ||157.55 ||139.06 |
|EPS after exceptional item (2) || || |
|Basic ||158.76 ||147.51 |
|Diluted ||158.76 ||147.50 |
Notes : 1 crore = 10 million
(1) Dividend received of ` 83 crore and ` 578 crore from the wholly-ownedsubsidiary, Infosys Australia Pty. Limited, during the years ended March 31, 2013 andMarch 31, 2012, respectively.
(2) Equity shares are at par value of ` 5/- each.
Our total income increased to Rs. 36,765 crore from Rs. 31,254 crore in the previousyear, at a growth rate of 17.6%. Our software export revenues aggregated to Rs. 35,932crore, up by 17.8% from Rs. 30,514 crore in the previous year. Out of the total revenue,63.8% came from North America, 21.8% from Europe, 2.3% from India and 12.1% from the Restof the World. Our revenues from India have increased to Rs. 833 crore from Rs. 740 crore,with a growth rate of 12.6%. The share of the fixed-price component of the business was40.0%, compared to 39.3% during the previous year.
Our gross profit amounted to Rs. 15,103 crore (41.1% of revenue) as against Rs. 13,419crore (42.9% of revenue) in the previous year. The Profit Before Interest, Depreciation,Taxes and Amortization (PBIDTA) amounted to Rs. 11,015 crore (30.0% of revenue) as againstRs. 10,061 crore (32.2% of revenue) in the previous year. Sales and marketing costs were5.1% and 4.6% of our revenue for the years ended March 31, 2013 and March 31, 2012,respectively. General and administration expenses were 6.0% and 6.1% of our revenuesduring the current year and previous year, respectively. The net profit before exceptionalitem and tax wasRs. 12,274 crore (33.4% of revenue) as against Rs. 11,096 crore (35.5% ofrevenue) in the previous year. We seek long-term partnerships with our clients that willenhance their value while addressing their IT requirements. Our client-centric approachhas resulted in high levels of client satisfaction. We derived 97.8% of our consolidatedrevenues from repeat business. We, along with our subsidiaries, added 235 new clients,including a substantial number of large global corporations. The total client base at theend of the year stood at 798. The client list for the current and previous years on aconsolidated basis are as follows :
| || || |
| ||2013 ||2012 |
|Million-dollar clients ||448 ||399 |
|Five-million-dollar clients ||213 ||190 |
|Ten-million-dollar clients ||137 ||132 |
|Twenty-million-dollar clients ||80 ||79 |
|Thirty-million-dollar clients ||62 ||64 |
|Forty-million-dollar clients ||49 ||50 |
|Fifty-million-dollar clients ||40 ||40 |
|Sixty-million-dollar clients ||33 ||28 |
|Seventy-million-dollar clients ||28 ||23 |
|Eighty-million-dollar clients ||19 ||17 |
|Ninety-million-dollar clients ||17 ||16 |
|Hundred-million-dollar clients ||12 ||13 |
|Two Hundred-million-dollar clients ||3 ||2 |
|Three Hundred-million-dollar clients || ||1 |
During the year 2012-13, we added 23.11 lakh sq. ft. of physical infrastructure space.The total available space as on March 31, 2013 stands at 316.44 lakh sq. ft. The number ofmarketing offices as at March 31, 2013 was 69 as compared to 65 in the previous year.
During the year under review, we entered into share purchase agreement with LodestoneHolding AG to purchase 100% shareholding in Lodestone Holding AG, as a result of whichLodestone Holding AG has become a 100% wholly-owned subsidiary of Infosys Limited. Thecost of acquisition is CHF 311 million. Lodestone Holding AG, headquartered in Zurich, isa global consulting firm advising international companies on strategy and processoptimization as well as IT transformation. With a value-integration approach, LodestoneHolding AG pursues a combination of management and IT consulting. Founded in 2005, thefirm has presence in 17 countries across five continents. Lodestone Holding AG's advisoryservices are primarily geared to the life science, chemical and financial servicesindustries along with the investment, automotive and consumer goods sectors. We have 10subsidiaries (excluding step-down subsidiaries) : Infosys BPO Limited; InfosysTechnologies (Australia) Pty. Limited; Infosys Technologies (China) Co. Limited; InfosysConsulting India Limited; Infosys Technologies S. de R. L. de C. V.; Infosys Technologies(Sweden) AB; Infosys Tecnologia do Brasil Ltda; Infosys Public Services Inc.; InfosysTechnologies (Shanghai) Co. Limited; and Lodestone Holding AG. We have 26 step-downsubsidiaries : Infosys BPO s.r.o.; Infosys BPO (Poland) Sp.Z.o.o; McCamish Systems LLC;
Portland Procurement Services Pty. Limited; Portland Group Pty. Limited; LodestoneManagement Consultants (Canada) Inc.; Lodestone Management Consultants Inc.; LodestoneManagement Consultants Pty. Limited; Lodestone Management Consultants (Asia Pacific)Limited (liquidated); Lodestone Management Consultants AG; Lodestone Augmentis AG; HafnerBauer & dman GmbH; Lodestone Management Consultants (Belgium) S.A.; LodestoneManagement Consultants GmbH, Austria; Lodestone Management Consultants Pte Ltd.; LodestoneManagement Consultants SAS; Lodestone Management Consultants s.r.o; Lodestone ManagementConsultants GmbH, Germany; Lodestone Management Consultants China Co., Ltd; LodestoneManagement Consultants Ltd; Lodestone Management Consultants B.V.; Lodestone ManagementConsultants Ltda; Lodestone Management Consultants sp. z.o.o.; Lodestone ManagementConsultants Portugal, Unipessoal, Lda; S.C. Lodestone Management Consultants S.R.L; andLodestone Management Consultants S.R.L.
As per Section 212 of the Companies Act, 1956, we are required to attach the, BalanceSheet, Statement of Profit and Loss and other documents of our subsidiaries. The Ministryof 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, providedsuch companies publish the audited consolidated financial statements in the Annual Report.Accordingly, the Annual Report 2012-13 does not contain the financial statements of oursubsidiaries. Please refer statement pursuant to Section 212 of the Companies Act, 1956for the summary financial performance of our subsidiaries. The audited financialstatements and related information of subsidiaries will be available on our website, www.infosys.com.These documents will also be available for inspection during business hours at ourregistered office in Bangalore, India.
4. Products and platforms
Infosys Products, Platforms and Solutions (PPS) are geared to drive innovation-ledgrowth for our clients that will power tomorrow's enterprise, today. Combining ourmarket-leading products Cloud-based hosting and platform operations ourofferings help enterprises accelerate growth, maximize profitability and increase assetefficiency. Our PPS offerings have been recognized as an industry best practice fordeveloping and managing software assets by Forrester Research, in a July 2012 report Asset-BasedIT Services Shift Service Vendors Operating Models. Our PPS portfolio includes :
Finacle partners with banks to transform process, product and customer experience,arming them with accelerated innovation that is key to building tomorrow'sbank. Our solutions address the core banking, e-banking, mobile banking, customerrelationship management, wealth management, treasury, and Islamic banking requirements ofretail, corporate and universal banks worldwide. Keeping up with global trends, Finaclealso offers new-age solutions like digital commerce for enabling cashless transactions andfinancial inclusion for banking the unbanked. With these offerings Finacleenables banks to stay ahead of changing customer demands, competition and mounting globalregulations as they transform into tomorrow's banks. The Finacle R&D unit is engagedin research and development of new technologies in the banking domain.
Today Finacle is the choice of 168 banks across 81 countries and powersoperations across 49,600 branches globally. It enables its customer banks to serve 447million accounts and 359 million consumers worldwide. Finacle is regarded asa leader in the core banking market space by industry analysts for years now. 44% of thebanks leveraging Finacle are among the World's Top 1000.
Infosys Edge suite of Products and Platforms
Infosys Edge suite of products, platforms and solutions caters to next-generationmarket needs driven by global trends, including digital consumers, emerging economies, newcommerce and healthcare. Our offerings leverage technologies in the areas of cloudcomputing, mobility, Big Data, rich media and social media. By combining products from usand our partners, Cloud-based hosting and platform operations, we help clients achieve thebusiness outcomes they seek. Infosys Edge is adopted by more than 75 global clients acrossindustries and has also won key industry recognitions.
Our products include :
Infosys AssistEdge: A customer service experience product for contact centers andprovides an integrated service experience across channels including web, chat, phone andsocial media.
Infosys BigDataEdge : Empowers IT and business teams to quickly discover, analyze andact on information to drive real-time business decisions.
Flypp: A digital experience product that includes a white-labeled applicationmarketplace which helps our partners actively engage with their consumers across digitalchannels.
Infosys Customer Self-Service Energy Manager : Helps utilities ensure customer delightthrough sustainable energy management and revitalized customer service.
SpeedSolve : A collaborative, chat-based customer support product from Infosys andAT&T to reduce call transfer rates, call handle time, and call volumes.
Infosys Digital Transformation : Helps publishers provide their digital consumers witha rich, integrated and seamless content experience.
Infosys Meter Data Management Appliance : An out-of-the-box meter data managementsolution that helps utilities streamline their meter-to-cash process and realize valuefrom their advanced metering infrastructure.
Infosys Account Origination System : Enables enterprise-class customer onboarding withdata capture and due diligence capabilities across multiple regulations.
Infosys Alert and Case Management System : Supports end-to-end management of cases,alerts, and exceptions across departments for enterprises.
Infosys Forward Compliance System : Enables enterprises to effectively manage andmonitor complex regulatory compliance requirements around Foreign Account Tax ComplianceAct (FATCA) and its various Inter-Government Agreements (IGA).
Infosys Trade Origination System : Helps companies strategically differentiate theirbrokerage services by providing their customers with a superior trading experience.
Infosys Transaction Reconciliation System : Provides end-to-end capabilities formanaging the diverse reconciliation needs of an enterprise, from source-loading toexception management and resolution.
Infosys Health Benefit Exchange : A novel, transparent, and competitive insurance hubdesigned for individuals and small businesses to buy qualified plans.
Infosys iTransform ICD-10 Migration Suite : A suite designed to automate allstages of migration to ICD-10 and help organizations turn compliance into a competitiveadvantage.
Note : ICD-10 is the 10th revision of the International Statistical Classification ofDiseases and Related Health Problems (ICD), a medical classification list by the WorldHealth Organization (WHO).
Infosys mConnect Multi-channel Mobile Middleware : A middleware that is designedto optimize user experience through its context-aware mobile multimode middleware acrosschannels and platforms. Infosys Omni-channel Personalization Engine : Helps retailersfoster consumer relationship by presenting personalized content to their consumers acrosschannels.
Infosys Cloud Ecosystem Hub : Helps enterprises create, adopt and manage their hybridcloud ecosystem.
Our suite of business platforms are built around specific themes that providesignificant opportunities to enterprises. This suite drives deeper engagement with digitalconsumers, builds smarter organizations and addresses the needs of emerging markets. Ourofferings are powered by best-in-class domain expertise, IP and cloud computing. Our focusis on delivering guaranteed business outcomes that impact our client's top-line orbottom-line. We host, operate and manage these business platforms on a subscription-basedpricing model, providing our clients with rapid time-to-value.
Our platforms include :
Infosys BrandEdge: Simplifies digital marketing across the organization through acomprehensive Cloud-based platform.
Infosys CommerceEdge : Drives multi-channel commerce by enhancing consumer experience,driving traffic and increasing order value.
Infosys Credit Servicing Platform : An integrated credit servicing and asset managementplatform, for managing multiple loans and asset classes across the globe for financialinstitutions.
Infosys IT Asset Performance Management Platform : Maximizes return on IT assetinvestments by enhancing performance, and mitigating risks while optimizing costs.
Infosys SocialEdge: Helps in monetizing digital demand by harnessing the power ofsocial media to deepen consumer and employee engagement for enterprises.
Infosys Source-to-Pay Platform : Helps enterprises realize rapid and sustainablesavings across their source-to-pay lifecycle.
Infosys TalentEdge : Enables enterprises to deepen employee engagement and simplify theentire hire-to-retire lifecycle of the human resource function.
Infosys TradeEdge : Facilitates global companies to accelerate long-term growth andprofitability in emerging markets.
Infosys WalletEdge: Enables the financial ecosystem of consumers, merchants, telecoms,banks, governments, and enterprises, to process payments.
Infosys Edge suite of products and platforms has won key industry recognitions. InfosysCloud Ecosystem Hub won the 2012 Golden Peacock Award for the most innovative product /service. Our Edge suite of platforms won the NASSCOM Business Innovation Award for 2013.
We continue our journey of delivering value to our clients through significantinvestments in quality programs. We have adopted several external benchmarks andcertifications. Infosys is certified under various standards to meet client demands andenhance value delivery. These include TL 9000-SV, ISO 9001, AS EN 9100, ISO 20000, OHSAS18001, ISO 14001, ISO 27001 and ISO 13485 and SEI CMMi Level 5. Infosys is the firstIT Services / BPO organization in India, covering multiple locations acrossIndia, to receive the ISO 22301 accredited certification awarded by British StandardsInstitution. In addition, Infosys BPO has been certified for SSAE 16 audit standard andPCI-DSS 2.0 standard across different delivery centers. Data centers in India, U.S. andAustralia which cater hosting services to us and our clients have been certified for ISO27001.
Our Quality department handles large change management initiatives to drive quality andproductivity improvements across our Company. It is managed through the Balanced Scorecardand Infosys Scaling Outstanding Performance (iSOP) program adopted from the MalcolmBaldrige National Quality Award (MBNQA).
Our Quality department has ensured that process and technology capability is built todeliver the offerings in alignment with our Company strategy. The Quality department hasbeen instrumental in building capability for program management of businesstransformation, PPS, cloud and mobility service, etc. Further, Quality department hasdeveloped accelerators and enablers with integrated methodology, tools and reusableassets. It has also provided service delivery platforms for key offerings.
We continue to fine-tune our Business Value Articulation (BVA) framework,which ensures alignment of our approaches to deliver and maximize value to our clients.Our Business Value Realization program is an initiative comprising frameworks,methodologies, processes and systems, to promote articulation and assurance of businessvalue for various engagements. We leveraged this BVA program extensively across services /domains and were able to make a substantial impact on our clients' business value. Theprocess excellence and transformation program has delivered significant benefit acrossmultiple service lines.
Our Quality department is spearheading various key initiatives and driving excellenceacross the organization. We proactively adopted the latest external and internal industrybest practices. We have institutionalized the incremental and breakthrough improvements byadopting customized programs on Six-sigma and lean methodologies for IT. This has resultedin improving the efficiency and impacted effectiveness in IT services / operations leadingto significant savings for our clients.
6. Infosys Labs
Infosys Labs focuses on defining and driving the research and innovation agenda for us.It is a dedicated research group comprising technology and domain-focused members. AtInfosys Labs, we have identified large, multidisciplinary problem spaces that embody thechallenges faced by our clients and we are creating technology solutions to solve them.
Infosys Labs has set up a Center of Innovation for Tomorrow's Enterprise(CITE) which manages the research on the seven core themes for Building Tomorrow'sEnterprise. The themes are focused on Digital Consumers, Emerging Economies, HealthcareEconomy, Sustainable Tomorrow, New Commerce, Smarter Organizations and PervasiveComputing.
Our Enterprise Technology Research group focuses on topics such as semantic technology,context aware systems, intelligent sensing, multi-channel convergence, large data modelingand simulation, next generation computing platform visualization, and immersiveexperiences.
Our Center for Services Innovation focuses on software engineering aspects likesoftware dependability, preventive maintenance, distributed service delivery,modernization and automation and optimization.
Infosys Labs is structured to deliver value to clients and Infosys business groupsalong the dimensions of Optimization, Transformation and Innovation.
We have set up innovation centers with a number of our clients, university partners,technology partners and industry research consortiums.
We focus on developing Intellectual Property (IP) assets that will enable new anddifferentiated products, platforms, solutions and services for our business groups.
This year, over 334 articles were published by Infosys Labs' researchers in leadingjournals, magazines, books and conference proceedings. Infosys Labs Briefings, ourhighly respected peer-reviewed journal, published issues in areas such as Big Data andmodel-based software engineering.
We collaborate with leading national and international universities such as theUniversity of Southern California, University of Cambridge, University of Illinois atUrbana-Champaign, Indian Institute of Technology Bombay Monash Research Academy,Purdue University, Queens University Belfast, Indraprastha Institute of InformationTechnology, Delhi, Indian Institute of Science, Bangalore, Indian Institute of InformationTechnology, Bangalore. Last year, we collaborated with institutions like National ICTAustralia (NICTA) and Office of the Chief Scientist of Israel. We are a member of severalglobal research consortia, including India-U.K. Advanced Technology Centre of Excellencein Next Generation Networks, Systems and Services, and Smart Services Cooperative ResearchConsortium, Australia.
This fiscal, Infosys Labs' IP Cell filed 97 unique patent applications in the U.S.Patent and Trademark Office (USPTO), the Indian Patent Office and other jurisdictions. Theaggregate unique patent applications filed stand at 532 and are under various stages ofprocessing. The total number of patents granted is 87.
The Infosys brand is a key intangible asset of the Company. Our brand promise Building Tomorrow's Enterprise communicates the value we bring to our clients. Itis the expression of how we provide insight on what's ahead and then partner with clientsto help them transform and thrive in a changing world. We do this by uncoveringopportunities for innovation-led growth through strategic consulting and co-creatingdisruptive solutions. We then enable clients to sustain that advantage with smarteroperations. It is the unfailing delivery of our brand promise that makes us the righttechnology partner for clients, from over 30 countries. The Infosys brand has beenrecognized by leading publications and independent industry bodies globally. To name justa few, we are :
Ranked 19th position in a survey of innovative companies based on aninnovation premium principle of stock market valuation
Ranked first globally for our corporate governance practices by IR GlobalRankings (IRGR)
Accorded the top position in the National Council for Work Experience (NCWE)Awards 2013, making us one of the U.K.'s best internship providers
Recognized as one of the Achievers 50 Most Engaged Workplacesin the United States (U.S.)
We are regularly rated by global industry analysts as a leader in key services andsolutions across domains.
Refer to the Awards and recognition section below for more details.
Our marketing reach extends globally through advertisements, web initiatives and socialmedia conversations. We promote our brand through trade and general publications. Weparticipate in premier business and industry events around the world. Confluence, ourflagship client event, is consistently well-attended and highly-rated by our client andindustry attendees.
8. A wards and recognition
In 2012-13, as in the years preceding, we earned a number of awards and honors fromvarious industry bodies and media organizations across the globe. Some of the significantawards are :
Infosys and British Telecom jointly won the prestigious Global Telecoms BusinessInnovation Award 2012 under the Business Service Innovation category.
The Infosys RioTinto relationship won the Outsourcing Excellence Award,for Best New Process / Application from Outsourcing Center, an Alsbridge company.
We were awarded the Pegasystems Excellence in Solution Development Award for thebest-in-class insurance service delivery platform.
Spirit AeroSystems recognized Infosys with the Platinum Award for consistenthigh-quality engineering services.
We received the 2012 IT Partner of the Year Award from Analog Devices, a globalleader in high-performance semiconductors for signal processing applications.
The Asian Banker Technology Implementation Awards 2012 awarded Finaclealong with DBS Bank as the Best Core Banking Implementation for Regional and InternationalBanks Award.
Another Finacle client, ING Vysya Bank won the Best CorporateInternet Banking Initiative Award.
Finacle also jointly won first place in the Core Banking TechnologyProvider of the Year category at the Banker's Innovation in Banking Technology Awards,2012.
We have been identified as one of the top 25 performers in the Caring forClimate Initiative by United Nations Global Compact (UNGC) and UN Environment Program.
We have also been recognized as an innovation leader in India in KPMG's 2012Global Technology Innovation Survey.
We were recognized as one of the Achievers 50 Most Engaged Workplaces inthe U.S. for our leadership and innovation towards engaging employees.
We were ranked second in the 2012 Global Outsourcing 100 List compiled annuallyby the International Association of Outsourcing Professionals (IAOP) for our performanceacross all four survey assessment categories, namely, size and growth, customerreferences, organizational competencies, and management capabilities.
For the second consecutive year, we have won the P&G Global BusinessServices Organization's External Business Partner Excellence Award for the quality of ourexecution, commitment to relationship and work with P&G's ecosystem of partners andco-creating innovation.
Infosys China has been listed among the Top 10 Global Service Providers in Chinaby the China Council for International Investment Promotion for the second consecutiveyear.
Infosys BPO won the Award for Innovation in Learning at the Best Learning andDevelopment Awards 2012.
Infosys BPO won the Golden Peacock HR Excellence Award 2012.
Infosys BPO won the Award for Institution Building at the Asia Pacific HRMCongress Awards 2012.
We were declared the winners of 2012 Asia's Most Admired Knowledge Enterprises(MAKE) study by Teleos, in association with the KNOW Network for the 10th time, fordeveloping knowledge-based products and services.
Infosys BPO has been awarded the prestigious 2012 Optimas Award forManaging Change, recognizing exemplary achievements in workforce managementand for successfully integrating new employees from around the globe into theorganization.
Infosys BPO won the Gold Award for Marketing Excellence in the category ofMarketing with Social and Interactive Media at the Information TechnologyServices Marketing Association (ITSMA) Awards 2012.
We have received the Microsoft Platform Modernization Award for salesachievement for our Legacy Modernization solution, which helps customers migrate toMicrosoft platforms.
We were awarded the National Energy Conservation Award 2012 our energyconservation efforts at our campuses in Jaipur and Pune.
Finacle has been ranked as a long-term leader in the ForresterWave, Global Banking Platforms, Q4 2012.
The Institute of Directors, India, conferred the prestigious Golden PeacockAward to Infosys Cloud Ecosystem Hub, recognizing the Hub as the Most InnovativeProduct / Service of 2012.
The National Association of Software and Services Companies (NASSCOM) presentedtheir prestigious Business Innovation Award for 2013 to Infosys Edge for its originalconcept, b