1. Financial Performance – Year ended March 31, 2002
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2. This presentation may contain certain forward looking statements
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.
June 08, 2002
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3. 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
June 08, 2002
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4. 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
June 08, 2002
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5. The year at a glance
37%
36%
2,603.59
2,552.47
34%
1,900.56
1,378.77
1,874.02
1,029.73
2001
2002
2001
2002
2001
2002
Income
(Rs.cr)
Export Income
(Rs.cr)
Gross Profit
(Rs.cr)
June 08, 2002
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6. The year at a glance 36% 36% 30% Operating Profit PBT PAT* 943.39
1,037.63
807.96
696.03
764.84
623.32
2001
2002
Operating Profit
(Rs.cr)
2001
2002
PBT
(Rs.cr)
2001
2002
PAT*
(Rs.cr)
* From ordinary activities
June 08, 2002
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7. Drivers of growth FY98 FY99 FY00 FY01 FY02
In $ terms
FY98 FY99 FY00 FY01 FY02
Revenue growth (%)
Of which
Volume growth (%)
Price growth (%) (2.5)
June 08, 2002
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8. We experienced intense pricing pressure during the year…
FY98 FY99 FY00 FY01 FY02
Per-capita revenue ($ p.m)
Onsite 6,600 7,900 8,500 11,000 11,400
Offshore 3,200 3,700 4,400 5,300 4,900
Blended 4,000 4,800 5,700 7,300 6,900
Change in per-capita revenue (%)
Onsite
Offshore (7.5)
Blended (5.5)
June 08, 2002
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9. … which was negated by higher volume growth.
FY98 FY99 FY00 FY01 FY02
Increase in billed person months
Onsite 1,638 2,450 5,244 7,842 4,748
Offshore 4,192 5,707 5,006 13,618 16,796
Total 5,830 8,157 10,250 21,460 21,544
Change in billed person months (%)
Onsite
Offshore
Total
June 08, 2002
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10. We improved our utilization…
FY 01 Q1 02 Q2 02 Q3 02 Q4 02 FY02
Utilization rates
Including trainees (%)
Excluding trainees (%)
June 08, 2002
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11. …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
June 08, 2002
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12. …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)
June 08, 2002
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13. 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)
June 08, 2002
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14. …but still maintained our margins.
54.2%
53.0%
40.2%
39.9%
32.8%
31.0%
2001
2002
Gross Profit (%)
2001
2002
Operating Profit (%)
2001
2002
PAT* (%)
* From ordinary activities
June 08, 2002
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15. Our revenues are well-segmented
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16. Geographic segments 2000-2001 2001-2002 June 08, 2002
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17. Business segments 2000-2001 2001-2002 June 08, 2002
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18. Vertical domains 2000-2001 2001-2002 June 08, 2002
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19. Technology segments 2000-2001 2001-2002 June 08, 2002
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20. Project segmentation 2000-2001 2001-2002 June 08, 2002
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21. Onsite - offshore segmentation
June 08, 2002
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22. We continue to de-risk our business
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23. Client concentration FY 2002 FY 2001 FY 2000
Active clients
Clients added
% of revenue from top client 6.1% 7.3% 7.2%
% of revenue from top 5 clients 24.1% 26.0% 30.2%
% of revenue from top 10 clients 39.4% 39.2% 45.7%
Clients accounting for >5% of revenue 2 3 4
Million dollar clients
5-million dollar clients
10-million dollar clients
20-million dollar clients 6 3 -
Million dollar clients/ total clients 28.3% 29.3% 21.6%
June 08, 2002
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24. Exposure to telecom Category % of telecom revenue % of total revenue
FY 02 FY 01 FY 02 FY 01
Service providers
Product companies
Equipment manufacturers
Others
Total
June 08, 2002
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25. We have a strong and liquid balance sheet
(Rs. crore)
Mar 31, 2002 % Mar 31, 2001 %
SOURCES OF FUNDS
Share capital
Reserves and surplus 2, ,
Total 2, ,
APPLICATION OF FUNDS
Fixed assets
Investments
Deferred tax assets
Sundry debtors
Cash and equivalents 1,
Other current assets
Current liabilities & provisions (459.41) (22) (319.85) (23)
Continued to be a zero-debt company
June 08, 2002
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26. Our receivables are under control
Days of sales receivable - 47 days
Days of sales receivable – 58 days
Age profile of accounts receivable
June 08, 2002
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27. 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
June 08, 2002
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28. Our cash flows are strong…
(Rs. crore)
FY 2002 FY 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 year 1,
June 08, 2002
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29. …despite heavy investment in capex.
463.35
322.74
42%
6.2
5.9
160.65
112.89
2001
2002
Capital Investment
(Rs.cr)
Depreciation
(Rs.cr)
2001
2002
Depreciation / Revenues (%)
2002
2001
June 08, 2002
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30. Cash Management
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31. 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
June 08, 2002
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32. Cash management – How we performed
Target FY 2002 FY 2001 FY 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 / revenues 30.0% 31.5% 28.4% 28.3%
Days sales outstanding
Cash & equivalents / total assets 40.0% 49.4% 41.6% 61.0%
Cash & equivalents / revenue 25.0% 39.4% 30.4% 57.6%
June 08, 2002
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33. Other Performance Indicators
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34. Other performance indicators
111.6%
105.4%
83.1%
62.6%
56.1%
54.4%
46.6%
46.3%
40.6%
2000
2001
2002
2000
2001
2002
2000
2001
2002
Return on Average Net Worth (RONW) (%)
Return on Capital Employed (ROCE) (%)
Return on Invested Capital (ROIC) (%)
June 08, 2002
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35. Other performance indicators
3.66
3.34
2.79
1.71
1.50
1.25
78.5%
79.8%
83.9%
2000
2001
2002
2000
2001
2002
2000
2001
2002
Capital Output Ratio
Invested Capital
Output Ratio
Value Added /
Total Revenue (%)
June 08, 2002
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36. Other performance indicators
146.4
122.12
111.29
94.23
51.28
43.23
17.0%
12.0%
11.6%
2000
2001
2002
2000
2001
2002
2000
2001
2002
EPS from Ordinary Activities (Rs.)
Cash EPS* (Rs.)
Dividend Payout (%)
June 08, 2002
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37. Other performance indicators
151,076
314.31
68,547
62,737
210.05
207.48
125.97
43.19
30.50
2000
2001
2002
2000
2001
2002
2000
2001
2002
Market Price /
Adjusted IPO Price (%)
Book Value (Rs.)
Price Earnings (x)
June 08, 2002
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38. Strength of the invisibles
FY 2002 FY 2001 FY 2000
Brand value (Rs.cr) 7,256 5,376 5,246
EVA (Rs.cr)
Value added (Rs.cr) 2,239 1,
HR value (Rs.cr) 9,539 5,123 2,237
Education index 31,385 28,725 15,544
Average age of employees
Revenue from image enhancing
clients (%) 56% 52% 47%
June 08, 2002
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39. Financial Highlights
US GAAP
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40. 32% 27% 30% Revenues Gross Profit Operating Income 545.05 413.85
200.24
255.02
137.51
178.55
2001
2002
2001
2002
2001
2002
Revenues
(US$ million)
Gross Profit
(US$ million)
Operating Income
(US$ million)
June 08, 2002
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41. Operating Income (excl. stock comp)
183.55
29%
24%
25%
169.47
164.47
142.59
137.03
131.95
2001
2002
2001
2002
2001
2002
Operating Income (excl. stock comp)
Net Income
Net Income
(excl. stock comp)
(US$ million)
June 08, 2002
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42. 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 company’s shares are now held in electronic form
Pending share transfer related litigation - 18 cases
June 08, 2002
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43. 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
June 08, 2002
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44. 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
June 08, 2002
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45. Thank You w w w . i n f o s y s . c o m
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