Infosys Ltd Directors Report.

Dear members,

The Board of Directors hereby submits the report of the business and operations of your Company ("the Company" or "Infosys"), along with the audited financial statements, for the financial year ended March 31, 2021. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Results of our operations and state of affairs

in Rs crore, except per equity share data

Particulars

Standalone For the year ended March 31,

Consolidated For the year ended March 31,

2021 2020 2021 2020
Revenue from operations 85,912 79,047 1,00,472 90,791
Cost of sales 55,541 52,816 65,413 60,732
Gross profit 30,371 26,231 35,059 30,059
Operating expenses
Selling and marketing expenses 3,676 3,814 4,627 4,711
General and administration expenses(1) 4,559 4,526 5,810 5,974
Total operating expenses 8,235 8,340 10,437 10,685
Operating profit 22,136 17,891 24,622 19,374
Finance cost 126 114 195 170
Other income, net 2,467 2,700 2,201 2,803
Profit before tax 24,477 20,477 26,628 22,007
Tax expense 6,429 4,934 7,205 5,368
Profit after tax 18,048 15,543 19,423 16,639
Profit attributable to owners of the Company 18,048 15,543 19,351 16,594
Non-controlling interests 72 45
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss 268 (215) 253 (213)
Items that will be reclassified subsequently to profit or loss (77) (19) 53 364
Total other comprehensive income / (loss), net of tax 191 (234) 306 151
Total comprehensive income for the year attributable to the owners of the Company 18,239 15,309 19,651 16,732
Non-controlling interest 78 58
Earnings per share (EPS)(2)
Basic 42.37 36.34 45.61 38.97
Diluted 42.33 36.32 45.52 38.91

1 crore = 10 million

Notes: The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS). (1) Includes impairment of capital asset of Rs 283 crore under CSR expense in the Standalone financial statements of the Company, as the Company intends to transfer its CSR capital assets created prior to January 2021 to a controlled subsidiary consequent to the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

The recoverable amount of capital asset is expected to exceed the carrying amount including in the period subsequent to the transfer to a controlled subsidiary, hence no impairment charge has been recorded in the Consolidated financial statements.

(2) Equity shares are at par value of Rs 5 per share.

Financial position

in Rs crore, except equity share data

Particulars Standalone Consolidated
As at March 31, As at March 31,
2021 2020 2021 2020
Cash and cash equivalents 17,612 13,562 24,714 18,649
Current investments 2,037 4,006 2,342 4,655
Net current assets 30,660 28,600 36,868 33,720
Property, plant and equipment
(including capital work-in-progress) 11,836 12,037 13,482 13,389
Right-of-use assets 3,435 2,805 4,794 4,168
Goodwill 167 29 6,079 5,286
Other intangible assets 67 48 2,072 1,900
Other non-current assets 30,152 22,302 21,226 13,449
Total assets 93,939 81,041 1,08,386 92,768
Non-current lease liabilities 3,367 2,775 4,587 4,014
Other non-current liabilities 1,419 812 3,152 2,054
Retained earnings – opening balance 52,419 54,070 56,309 57,566
Add:
Profit for the year 18,048 15,543 19,351 16,594
Transfer from Special Economic Zone Re-investment
Reserve on utilization 967 1,036 1,039 1,080
Less:
Impact of adoption of Ind AS 116 (17) (40)
Dividends (including dividend distribution tax if any) (9,158) (9,553) (9,120) (9,517)
Buyback of equity shares (4,717) (4,717)
Effect of modification of equity-settled share-based
payment awards to cash-settled awards (9) (9)
Transfer to general reserve (1,554) (1,470) (1,554) (1,470)
Transfer to Special Economic Zone Re-investment
Reserve (3,204) (2,464) (3,354) (2,580)
Financial liability under option arrangements (598)
Payment towards acquisition of minority interest (28)
Retained earnings – closing balance 57,518 52,419 62,643 56,309
Equity share capital 2,130 2,129 2,124 2,122
Other reserves and surplus(1) 11,831 7,825 10,243 5,978
Other comprehensive income 52 (139) 1,341 1,041
Non-controlling interest 431 394
Total equity 71,531 62,234 76,782 65,844
Total equity and liabilities 93,939 81,041 1,08,386 92,768
Number of equity shares 426,06,60,846 425,89,92,566 424,51,46,114 424,07,53,210

(1) Excluding retained earnings

Summary Profit and Loss – standalone

in Rs crore, except per equity share data

Particulars Year ended March 31,
2021 % of revenue 2020 % of revenue YoY growth (%)
Revenue from operations 85,912 100.0 79,047 100.0 8.7
Gross profit 30,371 35.4 26,231 33.2 15.8
Selling and marketing expenses 3,676 4.3 3,814 4.8 (3.6)
General and administration expenses 4,559 5.3 4,526 5.7 0.7
Operating profit 22,136 25.8 17,891 22.6 23.7
Profit before tax 24,477 28.5 20,477 25.9 19.5
Net profit 18,048 21.0 15,543 19.7 16.1
Earnings per equity share
Basic 42.37 36.34 16.6

Summary Profit and Loss – consolidated

in Rs crore, except per equity share data

Particulars Year ended March 31,
2021 % of revenue 2020 % of revenue YoY growth (%)
Revenue from operations 1,00,472 100.0 90,791 100.0 10.7
Gross profit 35,059 34.9 30,059 33.1 16.6
Selling and marketing expenses 4,627 4.6 4,711 5.2 (1.8)
General and administration expenses 5,810 5.8 5,974 6.6 (2.7)
Operating profit 24,622 24.5 19,374 21.3 27.1
Profit before tax 26,628 26.5 22,007 24.2 21.0
Net profit 19,423 19.3 16,639 18.3 16.7
Profit attributable to owners of the Company 19,351 19.3 16,594 18.3 16.6
Earnings per equity share
Basic 45.61 38.97 17.0

Refer to the notes under the table, ‘Results of our operations and state of affairs, for factors impacting net profit and basic EPS.

Based on Ind AS consolidated financial statements

(4) EURS – Includes enterprises in Energy, Utilities, Resources and Services (5) MFG – Includes enterprises in Manufacturing (6) Hi-Tech – Includes enterprises in Hi-Tech (7) LS – Includes enterprises in Life Sciences and Healthcare

(8) Others – Includes segments of businesses in India, Japan, China, Infosys Public Services and other enterprises in public services

Global health pandemic from COVID-19

In fiscal 2020, when the COVID-19 pandemic first broke, Infosys swiftly reacted by providing the required support to the workforce, clients and the community. From setting up a core team to monitor the situation closely and staying in constant touch with the local authorities, sharing timely updates with the global employee base, to enabling the near-seamless transition to the remote mode of work – the Company scaled up its efforts quickly and restored normalcy of operations. Central to these efforts was the need to ensure the physical safety and mental wellbeing of our global workforce. In the early months of the pandemic, through its employee repatriation effort, Infosys managed the evacuation of 1,865 employees and 1,165 members of their families, from 35 countries – a one-of-its-kind operation by a company. Fiscal 2021 has seen the health crisis deepen, and the worlds attention is focused on Indias response to it. With so many global businesses relying on Indias technology services sector to run their core operations, the industrys resilience has wide-ranging global impact. Corporations, along with delivering business continuity for clients, must, with renewed vigor, ensure the wellbeing of their employees and the communities in which they operate.

Today, 96.5% of Infosys employees continue to work from home. With a more virulent surge of the pandemic in India, Infosys has ramped up its efforts significantly to mitigate the impact of the virus. We have set up exclusive COVID-19 care centers across seven Development Center (DC) locations, including Bengaluru, Pune, NCR, Chennai, and Hyderabad, and similar centers are on the anvil in the coming weeks across all other Infosys locations. We plan to, subject to approvals, set up similar centers in other Indian cities where we have campuses. We tied up with COVID-19 testing laboratories across India, collaborated with emergency ambulance providers in major cities, and partnered with 1,500+ hospitals, in 240 cities in India, to enable treatment for employees and their families. All medical treatments for COVID-19 are covered under employee insurance, and employees who have contracted it are allowed 21 days of additional paid leave to recuperate. Employee wellbeing checks are conducted frequently. In the event of an unfortunate turn, Infosys offers support to the grieving family, including financial support through insurance.

Comprehending the importance of the role played by vaccines in our fight against the virus, we have been working very closely with government authorities and medical experts to put together various frameworks for the immunization drive to encourage employees and their family members to get vaccinated. We have created COVID-19 vaccination centers across Infosys campuses. Operations have commenced across seven DCs already and work is in progress in other DCs. We have also collaborated with 130+ hospitals in India where employees and their families can be vaccinated. Committed as always to holistic employee wellbeing, we have rolled out over 900+ employee initiatives across locations, centered on mental health, self-care, and prioritizing work-life balance. Infosys helping hand extends beyond business. We have honored the commitment of Rs 100 crore for COVID-19 relief in India that we made in March 2020, through the Infosys Foundation. This will help expand the capacity of COVID-care hospital beds, increase the supply of oxygen concentrators and ventilators, as well as provide food and funds to migrant laborers impacted by the lockdowns. We also leveraged our technological expertise, creating mobile applications like ‘Crush Covid RI and ‘Apthamitra to help local governments in their fight against COVID-19.

Our focus on our client commitments remained unwavering through this period, reflecting in the record number of large deals we secured even while working remotely. With our operations teams ensuring smooth work-from-home processes and remote collaboration for our 2,60,000+ global workforce, we were able to ensure that client service-level agreements (SLAs) were met and project milestones delivered on time. However, remote working conditions also implied multiplied cybersecurity risks, not just for us but for clients as well. Having been an early adopter of advanced cybersecurity strategies, including the setting up of seven Cyber Defence Centers in India, US and Europe, we were in a position to minimize threats to our operations as well as offer cybersecurity solutions to our clients. We continued to provide critical support to clients in essential services sectors such as banking, healthcare and communications around the world. Although travel was ruled out for most of this fiscal, we leveraged cloud and other digital transformation offerings to bring in new business, ensuring maximization of benefits to our shareholders.

As an organization, our external communication has had to transition to the new virtual models as well. Events such as the quarterly results, analyst meetings and the Annual General Meeting have all been executed successfully leveraging our in-house platforms such as Infosys Meridian. All recruitment drives have also been conducted virtually. Our online learning platform, Lex, and virtual classes allow our training programs to continue unaffected, with 2,40,000 employees using the platform in fiscal 2021. Leveraging initiatives like Skill Tags and Digital Quotient has enabled learning and reskilling of talent to proceed at an incredible pace. Digital Quotient acts as a guide-on-the-go to ensure digital preparedness for our talent, while Skill Tags allow employees to move beyond learning to establish their skill expertise in new-age / niche technology spaces. Thanks to structured learning paths made available through Lex, there has been a threefold increase in reskilled talent over the last fiscal.

At Infosys, even amid an unprecedented global crisis, we continue to balance success as a business with exemplary governance and responsiveness to the needs of all our stakeholders.

Capital Allocation Policy

Effective fiscal 2020, the Company expects to return approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and / or share buyback and / or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure, as per the Consolidated Statement of Cash Flows prepared under IFRS. Dividend and buyback include applicable taxes.

In line with the Capital Allocation Policy, the Board, at its meeting held on April 14, 2021, approved the buyback of equity shares, from the open market route through the Indian stock exchanges, amounting to Rs 9,200 crore (Maximum Buyback Size, excluding buyback tax) at a price not exceeding Rs 1,750 per share (Maximum Buyback Price), subject to shareholders approval in the ensuing Annual General Meeting (AGM). During the year, the Company paid an interim dividend of Rs 12 per share and announced a final dividend of Rs 15 per share, subject to shareholders approval in the ensuing AGM. After returning the above amounts, the Company would have returned approximately 83% of the free cash flow for fiscal 2020 and fiscal 2021 through dividends and buybacks, in line with the Capital Allocation Policy announced in July 2019.

The Capital Allocation Policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/capital-allocation-policy.pdf.

Liquidity

Our principal sources of liquidity are cash and cash equivalents, investments and the cash flow that we generate from our operations. We continue to be debt-free and maintain sufficient cash to meet our strategic and operational requirements. We understand that liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business requirements. Liquidity enables us to be agile and ready for meeting unforeseen strategic and business needs. As of March 31, 2021, we had Rs 30,660 crore in working capital on a standalone basis, and Rs 36,868 crore on a consolidated basis.

Consolidated cash and investments stand at Rs 30,764 crore on a standalone basis and Rs 38,660 crore on a consolidated basis as at March 31, 2021, as against Rs 21,321 crore on a standalone basis, and Rs 27,276 crore on a consolidated basis as on March 31, 2020.

Consolidated cash and investments, on both standalone and consolidated basis, include deposits with banks and financial institutions with high credit ratings by international and domestic credit rating agencies. As a result, liquidity risk of cash and cash equivalents is limited. Ratings are monitored periodically, and we have considered the latest available credit information to the extent available in view of COVID-19 as at the date of approval of the financial statements. Liquid assets also include investments in liquid mutual fund units, fixed maturity plan securities, certificates of deposit (CDs), commercial paper, quoted bonds issued by government and quasi-government organizations, and non-convertible debentures. CDs represent marketable securities of banks and eligible financial institutions for a specified time period with high credit rating given by domestic credit rating agencies. Investments made in non-convertible debentures are issued by government-owned institutions and financial institutions with high credit rating. We invest after considering counterparty risks based on multiple criteria including Tier I capital, capital adequacy ratio, credit rating, profitability, NPA levels and deposit base of banks and financial institutions. The details of these investments are disclosed under the ‘non-current and current investments section in the Standalone and Consolidated financial statements in this Annual Report.

Capital expenditure on tangible assets – standalone

This year, on a standalone basis, additions to tangible assets was Rs 2,015 crore. This comprises Rs 1,039 crore in infrastructure, Rs 975 crore for investment in computer equipment, and Rs 1 crore in vehicles.

In the previous year, we had additions to tangible assets of

Rs 3,035 crore. This comprised Rs 2,263 crore in infrastructure,

Rs 765 crore for investment in computer equipment, and

Rs 7 crore in vehicles.

Capital expenditure on tangible assets – consolidated

This year, on a consolidated basis, additions to tangible assets was Rs 2,231 crore. This comprises Rs 1,071 crore in infrastructure, Rs 1,159 crore in computer equipment and

Rs 1 crore in vehicles.

In the previous year, we had additions to tangible assets of

Rs 3,437 crore. This comprised Rs 2,500 crore in infrastructure,

Rs 930 crore for investment in computer equipment and

Rs 7 crore in vehicles.

Leases

This year, on a standalone basis, additions to right-of-use (ROU) assets was Rs 1,109 crore. This comprises Rs 1,017 crore in land and buildings, and Rs 92 crore in computer equipment. In the previous year, we had additions to ROU assets of Rs 787 crore. This comprised Rs 738 crore in land and buildings, and

Rs 49 crore in computer equipment.

This year, on a consolidated basis, additions to ROU assets was Rs 1,394 crore. This comprises Rs 1,241 crore in land and buildings, Rs 140 crore in computer equipment and

Rs 13 crore in vehicles.

In the previous year, we had additions to ROU assets of

Rs 1,120 crore. This comprised Rs 1,065 crore in land and buildings, Rs 49 crore for investment in computer equipment and Rs 6 crore in vehicles.

Dividend

The Company recommended / declared dividend as under:

Fiscal 2021 Fiscal 2020
Dividend per Dividend payout Dividend per Dividend payout
share (in Rs) (in Rs crore) share (in Rs) (in Rs crore)
Interim dividend 12.00 5,112 8.00 4,107
Final dividend (1) 15.00 6,391 9.50 4,046
Total dividend 27.00 17.50
Payout ratio (interim and final dividend) (2) 52.2% (2) 53.5%

Note: Interim dividend payout for fiscal 2020 includes dividend distribution tax.

(1) Recommended by the Board of Directors at its meeting held on April 14, 2021. The payment is subject to the approval of the shareholders at the ensuing AGM of the Company to be held on June 19, 2021. The record date for the purposes of the final dividend will be June 01, 2021 and will be paid on June 25, 2021.

(2) Our present Capital Allocation Policy is to pay approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and / or share buyback and / or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the Consolidated Statement of Cash Flows prepared under IFRS.

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 do not propose to transfer any amount to general reserve on declaration of dividend.

Fixed deposits

We have not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Particulars of contracts or arrangements made with related parties

There were no contracts, arrangements or transactions entered into during fiscal 2021. As required under the Companies Act, 2013, the prescribed Form AOC-2 is appended as Annexure 2 to the Boards report.

Managements discussion and analysis

In terms of the provisions of Regulation 34 of the Listing Regulations, the Managements discussion and analysis is set out in this Annual Report.

Risk management report

In terms of the provisions of Section 134 of the Companies Act, 2013, a Risk management report is set out in this Annual Report.

Board policies

The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and SEBI regulations are provided in Annexure 8 to the Boards report.

Material changes and commitments affecting financial position between the end of the financial year and date of the report

The Board, at its meeting held on April 14, 2021, approved the proposal of buyback of equity shares. The details of the buyback, together with its implications on the Companys financial position, are explained under the ‘Capital Allocation Policy section of this report and the financial statements for the year ended March 31, 2021.

There have been no other material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

2. Business description

Strategy

Our strategic objective is to build a sustainable and resilient organization that remains relevant to the agenda of our clients, while creating growth opportunities for our employees, generating profitable returns for our investors and contributing to the communities that we operate in. Our clients and prospective clients are faced with transformative business opportunities due to advances in software and computing technology. These organizations are dealing with the challenge of having to reinvent their core offerings, processes and systems rapidly and position themselves as ‘digitally enabled. The current economic climate and volatility, resulting from the COVID-19 pandemic, in their operations has accelerated their adoption of digital technologies – to enhance organizational resilience, get competitive advantage and optimize cost structures. The journey to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices. Our strategy is to be a navigator for our clients as they ideate, plan and execute on their journey to a digital future. In fiscal 2021, we continued to execute our four-pronged strategy to strengthen our relevance to clients and drive accelerated value creation. We believe the investments we have made, and continue to make, in our strategy will enable us to advise and help our clients as they tackle these market conditions, especially in the areas of digitization of processes, migration to cloud-based technologies, workplace transformation, business model transformation, data analytics, enhanced cybersecurity controls and cost structure optimization in IT. Further, we have successfully enabled our employees worldwide to work remotely and securely – thus achieving the operational stability to deliver on client commitments and ensuring our own business continuity.

In fiscal 2021, we launched our integrated cloud offering, Infosys CobaltTM, bringing together 14,000+ cloud assets, 200+ solution blueprints and an array of ecosystem alliances. Infosys CobaltTM is helping enterprises to securely access cloud capabilities with the assurance of single-point accountability for outcomes. We also launched Infosys Applied AI to help enterprises adopt a comprehensive approach and roadmap to scaling enterprise-grade AI for their businesses.

For details of our continued investments and outcomes of our strategic initiatives, please refer to the Managements Discussion and Analysis section of this Annual Report.

Organization

Our go-to-market business units are organized as:

• Financial Services and Insurance

• Life Sciences and Healthcare

• Retail, Consumer Packaged Goods and Logistics

• Communications, Telecom OEM and Media

• Energy, Utilities, Resources and Services

• Manufacturing

• Hi-tech

• Others, which includes India, Japan, China, Infosys Public Services and other Public Service enterprises

Our solutions have been primarily classified as digital and core.

Digital:

• Experience

• Insight

• Innovate

• Accelerate

• Assure Core:

• Application management services

• Proprietary application development services

• Independent validation solutions

• Product engineering and management

• Infrastructure management services

• Traditional enterprise application implementation

• Support and integration services

Our products and platforms include:

• Finacle

• Edge Suite

• Infosys NIA

• Infosys McCamish

• Panaya

• Skava

• Stater Mortgage Servicing Platform

• Wingspan

• Infosys Meridian

• CyberNext

• LEAP

Infrastructure

We added 0.86 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2021 stands at 52.83 million sq. ft. We have presence in more than 50 countries across 234 locations as on March 31, 2021.

Mergers and acquisitions

Infosys has a systematic M&A approach aimed to strengthen digital services capabilities, deepen industry expertise, and expand geographical footprint. Focused on executing Infosys Agile Digital strategy, during the year, the Company completed three acquisitions:

• GuideVision, s.r.o. a leading ServiceNow Elite Partner in Europe augmenting Infosys CobaltTM portfolio of cloud services and strengthening nearshore delivery presence on October 1, 2020

• Kaleidoscope Animations, Inc., a US-based product design and development firm strengthening presence in Medical devices, Consumer and Industrial markets on October 9, 2020

• Beringer Commerce Inc. and Beringer Capital Digital Group Inc., collectively known as Blue Acorn iCi, an award-winning, Adobe Platinum partner in the US, and a leader in digital customer experience, commerce and analytics on October 27, 2020 These acquisitions through Infy Consulting Company Ltd (a_ wholly-owned subsidiary of Infosys Consulting Holding AG) and Infosys Nova Holdings LLC (a wholly-owned subsidiary of Infosys Limited) were made for a total consideration of Rs 1,407_ crore, comprising a cash consideration of Rs 1,307_crore and contingent consideration with an estimated fair value of Rs 100 crore as on the date of acquisition. Refer to Note 2.1 of the Consolidated financial statements for further details of these acquisitions.

Subsidiaries

We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation digital services. At the beginning of the year, we had 23 direct subsidiaries and 52 step-down subsidiaries. As on March 31, 2021, we have 24 direct subsidiaries and 62 step-down subsidiaries. The changes in subsidiaries during the year is included in the

Standalone financial statements of the Company.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared the Consolidated financial statements of the Company, which form part of this Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 1 to the Boards report. The statement also provides details of the performance and financial position of each of the subsidiaries, along with the changes that occurred, during fiscal 2021. 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.

3. Human resources management

Our professionals are our most important assets. We are committed to hiring and retaining the best talent and being among the industrys leading employers. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustained high performance. Our human resource management focuses on allowing our employees to develop their skills, grow in their career and navigate their next.

Internal complaints committee

Infosys goal has always been to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. Towards this, the Company has set up the Anti-Sexual Harassment Initiative (ASHI), which proudly completes 21 years of enabling a positive and safe work environment for our employees. Our ASHI practices have set an industry benchmark as it ranked first among 300+ companies that participated in an external survey on the best anti-sexual harassment initiatives in 2017, 2019 and 2020. Infosys has constituted an Internal Committee (IC) in all the development centers of the Company across India to consider and resolve all sexual harassment complaints reported by women. The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted and decisions made by the IC at the respective locations, and a senior woman employee is the presiding officer over every case. Half of the total members of the IC are women. The role of the IC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. In the last one year, the IC has worked extensively on creating awareness on relevance of sexual harassment issues in the new normal by using brand-new and innovative measures to help employees understand the forms of sexual harassment while working remotely. The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility Report of this Annual report.

Particulars of employees

The Company had 2,04,396 employees on standalone basis and 2,59,619 employees on consolidated basis as of March 31, 2021. The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) (as required under the Companies Act, 2013) to the median of employees remuneration, and the list of top 10 employees in terms of remuneration drawn, as required under

Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure 3 to this Boards report. The statement containing particulars of employees employed throughout the year and in receipt of remuneration of Rs 1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of Rs 8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate exhibit forming part of this report and is available on the website of the Company,fiat https://www.infosys.com/investors/ reports-filings/Documents/exhibitboards-report2021.pdf. The Annual Report and accounts are being sent to the shareholders excluding the aforesaid exhibit. Shareholders interested in obtaining this information may access the same from the Company website. In accordance with Section 136 of the Companies Act, 2013, this exhibit is available for inspection by shareholders through electronic mode.

Notes:

1 The employees mentioned in the aforesaid exhibit have / had permanent employment contracts with the Company.

2. The employees are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

3. The details of employees posted outside India and in receipt of a remuneration of Rs 60 lakh or more per annum or Rs 5 lakh or more a month can be made available on specific request.

Employee stock options / Restricted Stock Units (RSUs)

The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.

Infosys Expanded Stock Ownership Program 2019 ("the 2019 Plan")

On June 22, 2019, pursuant to approval by the shareholders in the AGM, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 Plan shall not exceed 5,00,00,000 equity shares. To implement the 2019 Plan, up to 4,50,00,000 equity shares may be issued by way of secondary acquisition of shares by the Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019 Plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (the nomination and remuneration committee). The performance parameters will be based on a combination of relative Total Shareholder Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the Company as decided by the administrator. Each of the above performance parameters will be distinct for the purposes of calculation of the quantity of shares to vest based on performance. These instruments will generally vest between a minimum of one to a maximum of three years from the grant date.

2015 Stock Incentive Compensation Plan ("the_2015_Plan")

On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Plan. The maximum number of shares under the 2015 Plan shall not exceed 2,40,38,883 equity shares (not adjusted for bonus issue). These instruments will generally vest over a period of four years and the Company expects to grant the instruments under the 2015 Plan over the period of four to seven years. These RSUs and stock options shall be exercisable within the period as approved by the nomination and remuneration committee. The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant.

Consequent to the September 2018 bonus issue, all the then outstanding options granted under the stock option plan have been adjusted for bonus shares. The total number of equity shares and American Depositary Receipts (ADRs) to be allotted to the employees of the Company and its subsidiaries under the 2015 Plan does not cumulatively exceed 1% of the issued capital. For the shares and ADRs issued under the 2019 Plan, the cumulative amount does not exceed 1.15% of the issued capital. The 2019 Plan and 2015 Plan are in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, and there has been no material change to the plans during the fiscal.

The details of the 2019 Plan and 2015 Plan, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014, are available on the Companys website, at https://www.infosys.com/investors/reports-filings/ Documents/disclosures-pursuant-SEBI-regulations2021.pdf. The details of the 2019 Plan and 2015 Plan form part of the Notes to accounts of the financial statements in this Annual Report.

4. Corporate governance

Our corporate governance philosophy

Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Infosys, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

Our Corporate governance report for fiscal 2021 forms part of this Annual Report.

Board diversity

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender, that will help us retain our competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/board-diversity-policy.pdf. Additional details on Board diversity are available in the Corporate governance report that forms part of this Annual Report.

Number of meetings of the Board

The Board met seven times during the financial year. The meeting details are provided in the Corporate governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.

Policy on directors appointment and remuneration

The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2021, the Board had nine members, two of whom are executive directors, a non-executive and non-independent director and six independent directors. Two of the independent directors of the Board are women. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the Corporate governance report that forms part of this Annual Report. The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, at https://www.infosys.com/investors/corporate-governance/documents/nomination-remuneration-policy.pdf. We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

Declaration by independent directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

Board evaluation

The nomination and remuneration committee engaged Egon Zehnder, external consultants, to conduct Board evaluation for the year. The evaluation of all the directors, committees, Chairman of the Board, and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board evaluation process was completed during fiscal 2021. The evaluation parameters and the process have been explained in the Corporate governance report.

Familiarization program for independent directors

All new independent directors inducted into the Board attend an orientation program. The details of the training and familiarization program are provided in the Corporate governance report. Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The format of the letter of appointment is available on our website, at https://www.infosys.com/ investors/corporate-governance/Documents/appointment-independent-director.pdf.

Directors and KMP

Inductions

Uri Levine was appointed to the Board as an independent director effective April 20, 2020 for a period of three years and the same was approved by the shareholders at the 39th AGM held on June 27, 2020. Bobby Parikh was appointed to the Board as an additional and independent director effective July 15, 2020 for a period of three years subject to the approval of shareholders. In the opinion of the Board, he is a well-respected business leader who brings a wealth of experience and financial acumen to the Infosys Board. His vast experience in the realm of corporate governance will greatly benefit the Company. Further, he possesses integrity and relevant proficiency which will bring tremendous value to the Board and to the Company. The Board recommends his appointment to the shareholders. The notice convening the 40th AGM to be held on June 19, 2021 sets out the details. Chitra Nayak was appointed to the Board as an additional and independent director effective March 25, 2021 for a period of three years subject to the approval of shareholders. In the opinion of the Board, she brings Silicon Valley experience expertise, integrity and proficiency that will provide valuable insights as Infosys pivots its service offerings in consulting and digital solutions to help businesses in their strategic intent of digital transformation. The Board recommends her appointment to the shareholders. The notice convening the 40th AGM to be held on June 19, 2021 sets out the details.

Reappointments

Director liable to retire by rotation

As per the provisions of the Companies Act, 2013, U.B. Pravin Rao, COO and Whole-time Director, whose office is liable to retire at the ensuing AGM, being eligible, seeks reappointment. Based on performance evaluation and the recommendation of the nomination and remuneration committee, the Board recommends his reappointment. U.B Pravin Rao will be superannuating on December 12, 2021 as per the Companys policy. The notice convening the 40th AGM to be held on June 19, 2021 sets out the details.

Reappointment of independent director

Michael Gibbs was appointed as an independent director for the first term of three years effective July 13, 2018. His office of directorship is due for retirement on July 12, 2021. Based on the recommendation of the nomination and remuneration committee and after taking into account the performance evaluation of his first term of three years and considering the knowledge, acumen, expertise, experience and the substantial contribution, the committee has recommended the appointment of Michael Gibbs to the Board for a second term of five years. The Board, at its meeting held on April 14, 2021, approved the reappointment of Michael Gibbs as an independent director of the Company with effect from July 13, 2021 to July 12, 2026, whose office shall not be liable to retire by rotation. The Board recommends his reappointment to the shareholders. The notice convening the 40th AGM to be held on June 19, 2021 sets out the details.

Retirements and resignations

D.N. Prahlad, an independent director, resigned as a member of the Board effective April 20, 2020 to devote more time to his other business commitments. The disclosure in this regard is available at https://www.infosys.com/newsroom/ press-releases/2020/independent-director-stepping-down-20april2020.html.

Dr. Punita Kumar-Sinha, an independent director, on completion of her tenure, retired as a member of the Board effective January 13, 2021. The disclosure in this regard is available at https://www.infosys.com/investors/documents/ retirement-independent-director-13jan2021.pdf.

Committees of the Board

As on March 31, 2021, the Board had five committees: the audit committee, the corporate social responsibility committee, the nomination and remuneration committee, the risk management committee, and the stakeholders relationship committee. A majority of the committees consists entirely of independent directors. The Board, at its meeting held on April 14, 2021, instituted the Environment, Social and Governance (ESG) committee. The committee consists entirely of independent directors. During the year, all recommendations made by the committees were approved by the Board.

A detailed note on the composition of the Board and its committees is provided in the Corporate governance report.

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 Companys policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the ‘Internal control systems and their adequacy section in the Managements discussion and analysis, which forms part of this Annual Report.

Cybersecurity

In the light of the COVID-19 pandemic, fiscal 2021 was a challenging year for businesses globally. At Infosys, while our employees operated efficiently as a remote workforce, we continue to keep a close tab on our cybersecurity posture. We continued our efforts to keep ourselves up to date with cybersecurity events globally so as to achieve higher compliance and its continued sustenance. We continue to be certified against the Information Security Management

System (ISMS) Standard ISO 27001:2013. During the year, our focus on our cybersecurity personnels training and reskilling went ahead as planned, together with our initiatives on improving cybersecurity processes and technologies. Our periodic stakeholder interactions ensured that we have sponsorship from the senior management and all critical stakeholders in a timely manner.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

Reporting of frauds by auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

Annual return

In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https://www.infosys.com/investors/reports-filings/annual-report/annual-reports.html.

Secretarial standards

The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

Listing on stock exchanges

The Companys shares are listed on BSE Limited and the National Stock Exchange of India Limited, and its ADSs are listed on the New York Stock Exchange (NYSE).

Investor Education and Protection Fund (IEPF)

During the year, the Company has transferred the unclaimed and un-encashed dividends of Rs 1,75,57,643. Further, 16,264 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. The details of the resultant benefits arising out of shares already transferred to the IEPF, year-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividend account up to the year, and the corresponding shares, which are liable to be transferred, are provided in the Shareholder information section of the Corporate governance report and are also available on our website, at www.infosys.com/IEPF.

Directors responsibility statement

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The directors confirm that:

• In preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed and there are no material departures.

• They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

• They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

• They have prepared the annual accounts on a going concern basis.

• They have laid down internal financial controls, which are adequate and are operating effectively.

• They have devised proper systems to ensure compliance with the provisions of all applicable laws, and such systems are adequate and operating effectively.

5. Audit reports and auditors

Audit reports

• The Auditors Report for fiscal 2021 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements in this Annual Report.

• The Secretarial Auditors Report for fiscal 2021 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is enclosed as Annexure 5 to the Boards report.

• The Auditors certificate confirming compliance with conditions of corporate governance as stipulated under Listing Regulations, for fiscal 2021 is enclosed as Annexure 4 to the Boards report.

• The auditors certificate on the implementation of share-based schemes in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014, will be made available at the AGM, electronically.

Auditors

Statutory auditors

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the provisions of Companies Act, 2013. In line with the requirements of the Companies Act, 2013, Deloitte Haskins & Sells LLP, Chartered Accountants (Firm registration number 117366 W/W 100018) ("Deloitte") was appointed as the statutory auditors of the Company, to hold office for a period of five consecutive years from the conclusion of the 36th AGM of the Company held on June 24, 2017, till the conclusion of the 41st AGM to be held in 2022. The requirement for the annual ratification of auditors appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017, notified on May 7, 2018.

During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under the Companies Act, 2013, the Code of Ethics issued by the Institute of Chartered Accountants of India and the U.S. Securities and Exchange Commission and the Public Company Accounting Oversight Board.

Secretarial auditor

Parameshwar G. Hegde of Hegde & Hegde, Practicing Company Secretaries, is appointed as secretarial auditor of the Company for fiscal 2022, as required under Section 204 of the Companies Act, 2013 and Rules thereunder.

Cost records and cost audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

6. Corporate social responsibility (CSR)

Infosys has been an early adopter of CSR initiatives. The Company works primarily through the Infosys Foundation, towards supporting projects in the areas of protection of national heritage, restoration of historical sites, and promotion of art and culture; destitute care and rehabilitation; environmental sustainability and ecological balance; promoting education, and enhancing vocational skills; promoting healthcare including preventive healthcare, and rural development. In fiscal 2021, the Companys CSR efforts included COVID-19 relief in multiple states. The Companys CSR Policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ Documents/corporate-social-responsibility-policy.pdf. The annual report on our CSR activities is appended as Annexure 6 to the Boards report. Infosys also undertakes CSR initiatives outside of India, in Australia and the US. The initiatives in the US are carried out through Infosys Foundation USA. The said initiatives are over and above the statutory requirement. The highlights of the initiatives undertaken by the Company, the Infosys Foundation, and Infosys Foundation USA form part of this Annual Report.

7. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars, as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure 7 to the Boards report.

Business Responsibility Report (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for the top 1,000 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRR disclosures into our Annual Report. We also publish a GRI Standards-based Sustainability / ESG Report annually. The report is independently assured by DNV GL. Details are available on our website, at https://www.infosys.com/sustainability/documents/infosys-esg-report-2020-21.pdf.

Environmental, Social and Governance (ESG)

2020 marked a milestone year for the Company. We turned carbon-neutral 30 years ahead of the global targets, fulfilling the vision of our founders towards sustainable growth. In October 2020, we launched our ESG vision and ambitions for 2030, cementing our commitment to values-based progress. The ESG committee of the Board, formed in April 2021, is chaired by Lead Independent Director, Kiran Mazumdar-Shaw, and includes independent directors Chitra Nayak and Uri Levine as its members.

Acknowledgments

We thank our clients, vendors, investors, bankers, employee volunteers and trustees of the Infosys Foundation, Infosys Foundation USA and Infosys Science Foundation for their continued support during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We thank the governments of various countries where we have our operations. We thank the Government of India, particularly the Ministry of Labour and Employment, the Ministry of Environment and Forests, the Ministry of New and Renewable Energy, the Ministry of Communications, the Ministry of Electronics and Information Technology (Dept of IT), the Ministry of Commerce and Industry, the Ministry of Finance, the Ministry of Corporate Affairs, the Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, GST authorities, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments under the state governments and union territories, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) – Bengaluru, Bhubaneswar, Chandigarh, Chennai, Gurugram, Hubballi, Hyderabad, Indore, Jaipur, Kochi, Kolkata, Mangaluru, Mohali, Mumbai, Mysuru, Nagpur, Noida, Pune, and Thiruvananthapuram – and other government agencies for their support, and look forward to their continued support in the future. We also thank the US federal government, the U.S. Securities and Exchange Commission, the Internal Revenue Service, and various state governments, especially those of Indiana, Rhode Island, Connecticut, Texas, Arizona and North Carolina.

for and on behalf of the Board of Directors

Sd/- Sd/-
Bengaluru Nandan M. Nilekani Salil Parekh
April 14, 2021 Chairman Chief Executive Officer and Managing Director