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© Infosys Technologies Limited 2001-2002 Financial Performance – Year ended March 31, 2002.

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Presentation on theme: "© Infosys Technologies Limited 2001-2002 Financial Performance – Year ended March 31, 2002."— Presentation transcript:

1 © Infosys Technologies Limited Financial Performance – Year ended March 31, 2002

2 June 08, 2002© Infosys Technologies Limited This presentation may contain certain forward looking statements. The company may not achieve results as expressed or implied by such forward looking statements. Actual results could differ materially from those expressed or implied in such forward looking statements due to a number of factors including those discussed under the head "Risk factors" in the company's filings with the United States Securities and Exchange Commission. Do not place undue reliance on these forward looking statements. This presentation contains references to findings of various reports available in the public domain. The company makes no representation as to their accuracy or that the company subscribes to those findings. They are provided only by way of information.

3 June 08, 2002© Infosys Technologies Limited Highlights »Achieved revenue growth of 32.0% ( in $ terms) as against our guidance of 30% in April 2001 despite a very challenging environment »Banking unit revenues grew by over 100% and crossed the Rs.100 crore threshold »116 clients added during the year, of which, 62 were added in the post September 11 period »Total dividend of Rs. 20 per share (400% on par value of Rs. 5) taking the payout to 17.0% as compared to 12.0% in the previous year

4 June 08, 2002© Infosys Technologies Limited Highlights »Board approves investment of up to US$ 5 million for foray into Business Process Management (BPM) »Separate company – Progeon Limited formed for the BPM operations »Citigroup to invest US$ 20 million in Progeon Limited

5 June 08, 2002© Infosys Technologies Limited , , The year at a glance 1, , Income (Rs.cr) 37% 1, , Export Income (Rs.cr) 36% Gross Profit (Rs.cr) 34%

6 June 08, 2002© Infosys Technologies Limited The year at a glance , Operating Profit (Rs.cr) 36% PBT (Rs.cr) 36% PAT* (Rs.cr) 30% * From ordinary activities

7 June 08, 2002© Infosys Technologies Limited Drivers of growth FY98FY99FY00FY01FY02 Revenue growth (%) Of which Volume growth (%) Price growth (%) (2.5) In $ terms

8 June 08, 2002© Infosys Technologies Limited We experienced intense pricing pressure during the year… FY98FY99FY00FY01FY02 Per-capita revenue ($ p.m) Onsite6,6007,9008,50011,00011,400 Offshore3,2003,7004,4005,3004,900 Blended4,0004,8005,7007,3006,900 Change in per-capita revenue (%) Onsite Offshore (7.5) Blended (5.5)

9 June 08, 2002© Infosys Technologies Limited … which was negated by higher volume growth. FY98FY99FY00FY01FY02 Increase in billed person months Onsite1,6382,4505,2447,8424,748 Offshore4,1925,7075,00613,61816,796 Total5,8308,15710,25021,46021,544 Change in billed person months (%) Onsite Offshore Total

10 June 08, 2002© Infosys Technologies Limited We improved our utilization… FY 01Q1 02Q2 02Q3 02Q4 02FY02 Utilization rates Including trainees (%) Excluding trainees (%)

11 June 08, 2002© Infosys Technologies Limited …and took various cost control measures. Variable compensation »Salary hike during the year linked to attainment of company performance targets Recruitment »Just in time recruitment »Recruitment based on business outlook Non-revenue generating expenses »Reduced non-sales support personnel recruitment during the year »Offshoring of onsite functions in non-revenue generating activities

12 June 08, 2002© Infosys Technologies Limited …and took various cost control measures. »Others »Continuous rationalization of internal policies »Re-negotiations with vendors »Reduction in discretionary spending »Vacating leased premises, etc. »Cost cuts during the year aggregated 2.4% of revenues (3.5% excluding increase in personnel cost in the US)

13 June 08, 2002© Infosys Technologies Limited The US personnel costs had increased… Unanticipated increase in personnel costs in the US due to significantly higher floor pay imposed upon H1B visa holders »Additional cost of US$ 6.2 million (1.1% of revenue)

14 June 08, 2002© Infosys Technologies Limited …but still maintained our margins. 54.2%53.0% Gross Profit (%) Operating Profit (%) PAT* (%) 40.2%39.9% 32.8%31.0% * From ordinary activities

15 © Infosys Technologies Limited Our revenues are well-segmented

16 June 08, 2002© Infosys Technologies Limited Geographic segments

17 June 08, 2002© Infosys Technologies Limited Business segments

18 June 08, 2002© Infosys Technologies Limited Vertical domains

19 June 08, 2002© Infosys Technologies Limited Technology segments

20 June 08, 2002© Infosys Technologies Limited Project segmentation

21 June 08, 2002© Infosys Technologies Limited Onsite - offshore segmentation

22 © Infosys Technologies Limited We continue to de-risk our business

23 June 08, 2002© Infosys Technologies Limited Client concentration FY 2002FY 2001FY 2000 Active clients Clients added % of revenue from top client6.1%7.3%7.2% % of revenue from top 5 clients24.1%26.0%30.2% % of revenue from top 10 clients39.4%39.2%45.7% Clients accounting for >5% of revenue234 Million dollar clients million dollar clients million dollar clients million dollar clients63- Million dollar clients/ total clients 28.3%29.3%21.6%

24 June 08, 2002© Infosys Technologies Limited Exposure to telecom Category % of telecom revenue % of total revenue FY 02FY 01FY 02FY 01 Service providers Product companies Equipment manufacturers Others Total

25 June 08, 2002© Infosys Technologies Limited We have a strong and liquid balance sheet (Rs. crore) Mar 31, 2002%Mar 31, 2001% SOURCES OF FUNDS Share capital Reserves and surplus2, , Total2, , APPLICATION OF FUNDS Fixed assets Investments Deferred tax assets Sundry debtors Cash and equivalents1, Other current assets Current liabilities & provisions(459.41)(22)(319.85)(23) Total2, , Continued to be a zero-debt company

26 June 08, 2002© Infosys Technologies Limited Our receivables are under control Days of sales receivable - 47 daysDays of sales receivable – 58 days Age profile of accounts receivable

27 June 08, 2002© Infosys Technologies Limited We continue to invest for the future »Hired 1,548 people with a net addition of 907 for the year »Sales force strengthened with an addition of 39 people during the year »New sales offices opened in Netherlands, Singapore and Switzerland »Capex of Rs crore during the year of which Rs crore was spent on technological infrastructure

28 June 08, 2002© Infosys Technologies Limited Our cash flows are strong… (Rs. crore) FY 2002FY 2001 Operating cash flows Financing cash flows(104.77)(39.82) Proceeds on exercise of stock options Dividends paid(109.37)(42.20) Investing cash flows(280.23)(451.30) Purchases of fixed assets(322.74)(463.35) Proceeds on sale of fixed assets Long-term investments(10.32)(26.65) Interest income Effect of exchange differences Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year1,

29 June 08, 2002© Infosys Technologies Limited …despite heavy investment in capex Capital Investment (Rs.cr) Depreciation (Rs.cr) Depreciation / Revenues (%) %

30 © Infosys Technologies Limited Cash Management

31 June 08, 2002© Infosys Technologies Limited Our cash management policies »Financial policies »Maintain liquid assets at »25% of revenue and »40% of total assets »Earn »Return on capital - 2x cost of capital »Return on average invested capital – 3x cost of capital »Our current cost of capital is estimated to be 17.17% »Maintain sufficient cash in the balance sheet »To fund ongoing capex requirements to meet growth objectives »To fund operational expenses and other strategic initiatives for the next one year »To maintain business continuance in case of exigencies

32 June 08, 2002© Infosys Technologies Limited Cash management – How we performed TargetFY 2002FY 2001FY 2000 ROCE (%)54.4%62.6%46.3% Times cost of capital ROIC (%)83.1%105.4%111.6% Times cost of capital Operating cash flows / revenues30.0%31.5%28.4%28.3% Days sales outstanding Cash & equivalents / total assets40.0%49.4%41.6%61.0% Cash & equivalents / revenue 25.0%39.4%30.4%57.6%

33 © Infosys Technologies Limited Other Performance Indicators

34 June 08, 2002© Infosys Technologies Limited Other performance indicators 56.1% 46.6% 40.6% Return on Average Net Worth (RONW) (%) 62.6% 54.4% 46.3% Return on Capital Employed (ROCE) (%) 105.4% 83.1% 111.6% Return on Invested Capital (ROIC) (%)

35 June 08, 2002© Infosys Technologies Limited Other performance indicators Capital Output Ratio Invested Capital Output Ratio Value Added / Total Revenue (%) 79.8%83.9%78.5%

36 June 08, 2002© Infosys Technologies Limited Other performance indicators EPS from Ordinary Activities (Rs.) Cash EPS* (Rs.) Dividend Payout (%) % 17.0% 11.6%

37 June 08, 2002© Infosys Technologies Limited Other performance indicators Book Value (Rs.) Price Earnings (x) 68,547 62, , Market Price / Adjusted IPO Price (%)

38 June 08, 2002© Infosys Technologies Limited Strength of the invisibles FY 2002FY 2001FY 2000 Brand value (Rs.cr)7,2565,3765,246 EVA (Rs.cr) Value added (Rs.cr)2,2391, HR value (Rs.cr)9,5395,1232,237 Education index31,38528,72515,544 Average age of employees Revenue from image enhancing clients (%)56%52%47%

39 © Infosys Technologies Limited Financial Highlights US GAAP

40 June 08, 2002© Infosys Technologies Limited Revenues (US$ million) Gross Profit (US$ million) Operating Income (US$ million) % 27% 30%

41 June 08, 2002© Infosys Technologies Limited Operating Income (excl. stock comp) Net Income Net Income (excl. stock comp) (US$ million) 29% 25% 24%

42 June 08, 2002© Infosys Technologies Limited Investor services »Share transfers in physical form completed within 15 days »Investor grievances / correspondence attended to within a period of 10 days (Except in cases constrained by disputes or legal impediments) »99.05% of the companys shares are now held in electronic form »Pending share transfer related litigation - 18 cases

43 June 08, 2002© Infosys Technologies Limited Community services »Grants of Rs.3.75 crore during the year to Infosys Foundation, a not-for-profit trust to support initiatives that benefit society at large »Continued the social programs initiated in 1999 – Catch Them Young, Rural Reach and Train The Trainer »Infosys has donated 1,185 computers to 435 institutions across India through its Classrooms initiative launched in January 1999

44 June 08, 2002© Infosys Technologies Limited Awards won during the year »The Institute of Chartered Accountants of India award for best presented annual report in 2001 for the seventh successive year »The Institute of Company Secretaries of India National Award for excellence in corporate governance »Asiamoney award for best investor relations in India for 2001 »Corporate Citizenship Award by The Economics Times of India »Ranked No.1 in the CG Watch 2002, the CLSA study on corporate governance practices in emerging markets

45 © Infosys Technologies Limited Thank You w w w. i n f o s y s. c o m


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