Slide 1

Transcript Slide 1

Financial Performance 2006-07

V. Balakrishnan

Chief Financial Officer

Safe harbor

Certain statements made here concerning Infosys’ future growth prospects are forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2007 and the Quarterly Reports on Form 6-K for the fiscal quarters ended June 30, 2006, September 30, 2006 and December 31,2006. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.

Highlights

» » » » Revenues of US $3 billion in Fiscal 2007 » Revenue growth of 44% in dollar terms and 46% in rupee terms as against our guidance of 28-30% in April 2006 » Recommended a final dividend of Rs. 6.50 per share (130% on par value of Rs. 5 per share) amounting to Rs. 371 crores. Including Interim dividend, the total dividend recommended for the year is Rs. 11.50 per share (230% on par value of Rs. 5 per share) amounting to Rs. 649 crores Added 160 clients during the year Net addition of 19,526 employees Award for the best presented Annual Report for fiscal 2006 received from The Institute of Chartered Accountants of India (ICAI) for the 11th consecutive year © Infosys Technologies Limited 2006-07

Completed sponsored secondary offering of ADS in Nov 2006 – size of USD 1.6 billion, the largest international equity offering from India at that time

Included in NASDAQ Global Select Market in July 2006

First Indian company to be added to the NASDAQ-100 Index and the only Indian company to be part of any major global indices

A great year – Growth exceeded our expectations

Revenue (Q1) Rs. Cr.

EPS Revenue (Q2) Rs. Cr.

EPS Revenue (Q3) Rs. Cr.

EPS Revenue (Q4) Rs. Cr.

EPS Guidance 2,793 – 2,816 12.38 – 12.60

3,257 – 3,280 14.73 – 14.89

3,602 – 3,625 16.84

3,789 – 3,798 17.88

Actual 3,015 14.36

3,451 16.75

3,655 17.64

3,772 20.30

Revenue and profit grew faster…

13,893 6,435 9,521 4,455 4,391 3,091 2006 2007 Revenues (Rs. Cr.) 2006 2007 Gross profit (Rs. Cr.) 2006

Based on consolidated Indian GAAP Financials * Net profit after tax and minority interest, before exceptional item and tax reversals

2007 Operating profit (Rs. Cr.) 3,726 2,458 2006 2007 Net profit* (Rs. Cr.)

…While margins were maintained.

46.8

32.5

46.3

31.6

2006 2007 Gross profit (%) 2006 2007 Operating profit (%)

* Net profit after tax and minority interest, before exceptional item and tax reversals

26.8

25.8

2006 2007 Net profit* (%)

Business mix became richer….

Increased contribution from new services (% to total revenue) Package Implementation Testing Consulting Business Process Management Engineering Services Other services Total 2003 11.0% 3.4% 4.3% 0.5% 2.6% 7.8% 29.6% 2004 14.5% 5.3% 3.7% 1.6% 2.2% 8.1% 35.4% 2005 15.2% 5.8% 3.6% 2.7% 2.0% 8.4% 37.7% 2006 16.2% 5.9% 3.5% 4.0% 1.8% 9.7% 41.1% 2007 17.5% 6.9% 3.6% 4.7% 1.6% 9.4% 43.7% © Infosys Technologies Limited 2006-07

…resulting in higher revenue productivity.

Variation in per-capita revenues (in US$ terms) Onsite Offshore Blended 2003 (2.5)% (4.7)% (0.8)% 2004 (2.9)% (2.6)% (5.0)% 2005 0.2% 1.3% (1.0)% 2006 0.3% 0.8% 0.7% 2007 4.4% 2.7% 4.9% © Infosys Technologies Limited 2006-07

We continued to leverage the Global Delivery Model

Effort mix (%) Onsite Offshore Total Billed person months Onsite Offshore Total Change in billed person months (%) Onsite Offshore Total Utilization rates Including trainees (%) Excluding trainees (%) 2006 31.7

68.3

100.0

95,675 206,579 302,254 32.1

30.9

31.3

71.0

78.1

2007 32.9

67.1

100.0

134,767 274,989 409,756 40.9

33.1

35.6

69.1

77.1

Wages increased during the year

Wage increase – Offshore – Onsite Onsite salaries (% to revenues) Offshore salaries (% to revenues) Variable salaries (Rs. Cr.) Variable salary as a % of offshore salary 2006 15% 3% 32.9% 14.5% 427 25.3% 2007 15% 3% 32.4% 15.6% 599 24.9% © Infosys Technologies Limited 2006-07

The G&A expenses were under control

General & Administration expenses (Rs. Cr.) General & Administration cost / revenue (%) G&A personnel Total no. of employees % to total employees 2006 764 8.0% 2,776 52,715 5.3% 2007 1,115 8.0% 3,548 72,241 4.9% © Infosys Technologies Limited 2006-07

We continued to invest for growth

1) Sales & Marketing expenses (Rs. Cr.) Selling & Marketing expenses / revenues (%) Sales & Marketing employees (No.) Marketing offices (No.) 2) R&D Expenses (Rs. Cr.) 3) Losses in subsidiaries : China Consulting 2006 600 6.3

444 37 102 (17) (36) 2007 929 6.7

537 43 167 (29) (111) © Infosys Technologies Limited 2006-07

The currency moved favorably

Average rupee dollar rate This Year Previous Year % change Period end rupee dollar rate This Year Previous Year % change Forward contracts and options outstanding as at March 31 ($ Mn) Transaction & translation losses (Rs. Cr.) Benefit due to hedging (Rs. Cr.) Net impact (Rs. Cr.) 2006 44.21

44.87

(1.5%) 44.48

43.62

2.0% 350 (8) (69) (77) 2007 45.06

44.21

1.9% 43.10

44.48

(3.1%) 470 (21) 63 42 © Infosys Technologies Limited 2006-07

The end result

Income Software development and BPM expenses GROSS PROFIT Selling and marketing expenses General and administration expenses Operating profit before interest and depreciation Interest Depreciation Operating profit after interest, depreciation and amortization Other income Provision for investments NET PROFIT BEFORE TAX Provision for taxation NET PROFIT AFTER TAX Exceptional item NET PROFIT AFTER TAX, EXCEPTIONAL ITEM & BEFORE MINORITY INTEREST Minority interest NET PROFIT AFTER TAX, EXCEPTIONAL ITEM & MINORITY INTEREST © Infosys Technologies Limited 2006-07 2006 9,521 5,066 4,455 600 764 3,091 – 437 2,654 139 1 2,792 313 2,479 – % 100% 53% 47% 6% 8% 32% – 5% 28% 1% 0% 29% 3% 26% – 2,479 21 2,458 26% – 26% 2007 13,893 7,458 6,435 929 1,115 4,391 – 514 3,877 372 2 4,247 386 3,861 6 % 100% 54% 46% 7% 8% 32% – 4% 28% 3% 0% 31% 3% 28% – 3,867 11 3,856 28% – 28%

We have a Healthy Balance Sheet

Rs. Cr.

SOURCES OF FUNDS Share capital Reserves and surplus Minority interest Total APPLICATION OF FUNDS Fixed assets Investments Deferred tax assets Sundry debtors Cash & equivalents Other current assets Current liabilities Total We continue to be a zero-debt company 2007 286 10,969 4 11,259 3,771 – 92 2,436 6,073 1,037 (2,150) 11,259 % 2 97 1 100 33 – 1 22 54 9 (19) 100 2006 138 6,828 68 7,034 2,226 2 65 1,608 4,709 770 (2,346) 7,034 % 2 97 1 100 32 – 1 23 66 11 (33) 100 © Infosys Technologies Limited 2006-07

We exercise tight control over receivables

2006 31.30% 3.20% 4.40% 61.10%

Days of sales receivable – 61 days

2007 2.10% 2.70% 36.70% 58.50%

Days of sales receivable – 64 days 0 – 30 31 – 60 61 – 90 Age profile of accounts receivable > 90 © Infosys Technologies Limited 2006-07

We continue to balance between liquidity and profitability ROCE (%) Times cost of capital ROIC (%) Times cost of capital Days sales outstanding Cash & cash equivalents / total assets * Cash & cash equivalents / revenue * Dividend % (% to net profits)**

* Cash and cash equivalents include investments in liquid mutual funds ** Excluding Silver Jubilee special dividend in 2006

Target 2.0

3.0

60 40.0% 25.0% Upto 20% 2005 51.4% 3.8

123.6% 9.1

67 54.4% 41.6% 18.5

2006 44.9% 3.5

94.0% 7.3

61 64.7% 49.4% 19.4

2007 45.7% 3.1

89.1% 6.0

64 50.6% 43.0% 19.9

Our revenues are well diversified

21% 11% 15% FY 00 15% 1% 6% FY 00 Revenue by Industry Vertical FY 07 23% 30% 20%

Insurance, Banking & Financial Services Manufacturing Telecom Retail Others

10% 19% 78% Revenue by Geography

North America Europe India Rest of the World

26% 2% 9% FY 07 14% 37% 63%

The power of the intangibles

Average age of employees (years) Education index Women employees / total employees (%) Attrition (%) HR value (Rs. Cr.) Brand value (Rs. Cr.) EVA (Rs. Cr.) Value added (Rs. Cr.) R&D expenditure (Rs. Cr.) R&D expenditure / revenue (%) 2005 26.0

100,351 24.9% 9.7

28,334 14,153 1,132 6,053 74 1.08

2006 26.0

148,499 27.6% 11.2

46,637 22,915 1,540 8,030 102 1.07

2007 26.0

203,270 30.9% 13.7

57,452 31,617 2,122 11,879 167 1.20

Performance of subsidiaries

Infosys BPO Limited Formed Investment (Rs. Cr.) Holding (%) – Mar 2007 Shares Buyback in FY 2007 – Citicorp – IBPO employees FY07 Revenue (Rs. Cr.) FY07 PAT (Rs. Cr.) FY07 PAT % Y-o-Y Growth Revenue % Y-o-Y Growth PAT % Employees as of March 31, 2007 © Infosys Technologies Limited 2006-07 Apr 2002 637 98.92

87,50,000 2,11,909 662 152 22.9

74.7

63.4

11,226

Performance of subsidiaries

Infosys Technologies (Australia) Pty Limited Acquired Investment (Rs. Cr.) Holding (%) – Mar 2007 FY07 Revenue (Rs. Cr.) FY07 PAT (Rs. Cr.) FY07 PAT % Y-o-Y Growth Revenue % Y-o-Y Growth PAT % Employees as of March 31, 2007 © Infosys Technologies Limited 2006-07 Jan 2004 66 100.00

446 71 15.9

39 294 306

Performance of subsidiaries

Infosys Technologies (China) Co. Limited Formed Investment (Rs.Cr.) Holding (%) – Mar 2007 FY07 Revenue (Rs.Cr.) FY07 PAT (Rs.Cr.) Employees Oct 2003 46 100.00

Performance of subsidiaries

Infosys Consulting Inc., Formed Investment (Rs.Cr.) Holding (%) – Mar 2007 FY07 Revenue (Rs.Cr.) FY07 PAT (Rs.Cr.) Employees © Infosys Technologies Limited 2006-07 Apr 2004 90 100.00

213 (111) 209

Financial statements - US GAAP

Financial highlights

3,090 2,152 2006 Revenues 2007

( US$ Million )

1,313 908 2006 2007 Gross profit 852 599 2006 2007 Operating income 850 555 2006 Net income 2007

Financial highlights

42.5

42.2

2006 2007 Gross profit (%) 27.8

27.6

2006 2007 Operating income (%) 27.5

25.8

2006 Net income (%) 2007

RISK MANAGEMENT

Infosys’ unified view of the Risk Universe

Strategy Industry Counter-party Resources Operations Compliance - Planning effectiveness - Growth engines - Leadership - Geopolitical change - Technical innovation - Competition intensity - Vendor selection - Vendor exposure - Credit management - Talent supply management - Talent development - Career Value Management - Operations planning - Execution excellence - Systems & processes - Regulatory dynamics - IP management - Data security management - Service differentiation - Brand and reputation - Execution of strategy - Industry & market dynamics - Access to capital - Market selection - Supply-chain management - Customer exposure - Customer concentration - Scalability of infrastructure - Deployment efficiency - Complex execution management - Contingency planning - Contractual compliance - Contractual exposures - Litigation/violation response

Slide 1

Transcript Slide 1

Financial Performance 2006-07

Safe harbor

Highlights

Sponsored Secondary ADS Program

Completed sponsored secondary offering of ADS in Nov 2006 – size of USD 1.6 billion, the largest international equity offering from India at that time

Included in NASDAQ Global Select Market in July 2006

First Indian company to be added to the NASDAQ-100 Index and the only Indian company to be part of any major global indices

A great year – Growth exceeded our expectations

Revenue and profit grew faster…

…While margins were maintained.

Business mix became richer….

…resulting in higher revenue productivity.

We continued to leverage the Global Delivery Model

Wages increased during the year

The G&A expenses were under control

We continued to invest for growth

The currency moved favorably

The end result

We have a Healthy Balance Sheet

We exercise tight control over receivables

Our revenues are well diversified

The power of the intangibles

Performance of subsidiaries

Performance of subsidiaries

Performance of subsidiaries

Performance of subsidiaries

Financial statements - US GAAP

Financial highlights

Financial highlights

RISK MANAGEMENT

Infosys’ unified view of the Risk Universe

Thank You

Slide 1

Transcript Slide 1

Financial Performance 2006-07

Safe harbor

Highlights

Sponsored Secondary ADS Program

Completed sponsored secondary offering of ADS in Nov 2006 – size of USD 1.6 billion, the largest international equity offering from India at that time

Included in NASDAQ Global Select Market in July 2006

First Indian company to be added to the NASDAQ-100 Index and the only Indian company to be part of any major global indices

A great year – Growth exceeded our expectations

Revenue and profit grew faster…

…While margins were maintained.

Business mix became richer….

…resulting in higher revenue productivity.

We continued to leverage the Global Delivery Model

Wages increased during the year

The G&A expenses were under control

We continued to invest for growth

The currency moved favorably

The end result

We have a Healthy Balance Sheet

We exercise tight control over receivables

Our revenues are well diversified

The power of the intangibles

Performance of subsidiaries

Performance of subsidiaries

Performance of subsidiaries

Performance of subsidiaries

Financial statements - US GAAP

Financial highlights

Financial highlights

RISK MANAGEMENT

Infosys’ unified view of the Risk Universe

Thank You

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