ERR INFOSYS

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18/04/2009 Darshan R.Nikam

Management Team


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Company Overview

The company was incorporated as Infosys Consultants Private Limited on 2nd July 1981 atMumbai. Infosys was promoted by professionals Viz. Mr. S. Gopalakrishnan, Mr. K. Dinesh, Mr.Nandan M Nilekani, Mr. N.R. Narayana Murthy & Mr. N S Raghavan. On 21 st April 1992 the

name changed to Infosys Technologies Private Limited, and the registered office moved toBangalore. On 2nd June 1992 the company was converted into a Public Limited Company underthe name Infosys Technologies Limited. In 1993 the company turned up with ISO 9000certification.

Infosys became the first Indian company to be listed on an American Stock Exchange. It is listedon the Nasdaq Composite Index as INFY. It has been clarified at level 5, a level achieved by only1.5 per cent of the more than 1000 software companies tested under the capability maturitymodel of the Software Engineering Institute (SEI).

Infosys Technologies Limited along with its majority owned and controlled subsidiary, InfosysBPO Limited, India (Infosys BPO) formerly known as Progeon Limited, and wholly-owned

subsidiaries, Infosys Technologies (Australia) Pty. Limited (Infosys Australia), InfosysTechnologies (China) Company Limited (Infosys China) formerly known as InfosysTechnologies (Shanghai) Company Limited, Infosys Consulting, Inc., USA (InfosysConsulting) and Infosys Technologies S. de R.L. de C.V. (Infosys Mexico) is a leading globaltechnology services organization.


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Products and Services

Company is engaged in software development in the form of services, turnkey projects andproducts for domestic and export market. The software development is targeted towards thedistribution, telecommunication and manufacturing sector world wide. The company provides

software maintenance, re-engineering and downsizing of software applications for variousmarket segments.

The company provides end-to-end business solutions that leverage technology thereby enablingclients to enhance business performance. The solutions span the entire software life cycleencompassing technical consulting, design, development, re-engineering, maintenance, systemintegration, package evaluation and implementation, and testing and infrastructuremanagement services. In addition, the company offers software products for the bankingindustry. In 2000, the company launched Finacle an integrated, centralized, multi-currency andmulti-language-enabled and functionally rich banking solution to address retail and corporate

banking requirements.

Infosys has an e-platform for the banking and finance industry called Finacle to streamline theentire banking process for an entire gamut of services that banks offer, including insurance,venture capital and e-commerce. It integrates a wide range of delivery channels such asATM/POS, call centers, internet, mobiles and hand held devices. Avaya Inc, a leading globalprovider of voice and data networks to businesses, has a partnership with Infosys to provideconsulting and IT services to strengthen its customer relationship management (CRM) solutionsthat include Avaya Interaction Centre, Avaya Commitment Manager and Avaya BusinessIntelligence.

Global Reach

Company has a strategic global relationship with US-based Microsoft Corporation, theworldwide leader in computing software, for developing, promoting and delivering acomprehensive portfolio of Infosys business solution offerings and enterprise services builtusing the Microsoft.NET Enterprise Server platform. As part of the strategic global relationship,Infosys and Microsoft will develop business solution offerings in areas such as CustomerRelationship Management, ecommerce, Financial Services, Insurance and Retail.

Infosys has tie-ups with Franklin Templeton Investments (FTI) for interactive informationinfrastructure. The company has tie up in the telecom solution area with US-based QuintessentCommunications Inc, a leader in the telecom industry integrated service. Infosys andQuintessent working together to develop and test selected applications that automate dataexchange between telecommunications carriers. The company has also tied up with anotherU.S.-based firm, Jetstream Communications Inc, to co-develop broadband solutions. Infosyshas an alliance with Kakawa Discount House, Nigeria a discount house formed by a consortiumof key banks in Nigeria. Kakawa Discount House will deploy Infosys Finacle suite of solutions.

Aircraft maker Airbus Industries has hired Infosys Technologies for wing design. Infosys isfocusing on avionics domain as a high priority area. Infosys avionics group has already started

began working the project and expects to do more for the aircraft maker. The avionics group ispart of the Infosys engineering services consulting practice (ESCP) group. It was set up recently


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to target global leaders in the avionics business, and comprises professionals and seniorindustry consultants.

The Company has 52 Global Development Centers, the majority of which are located in India.The Company also has development centers in various countries including Australia, Canada,China, Japan, Mauritius, Mexico, Poland and at multiple locations in the United States and

Europe.

Branding

During the year 2008, the company received Diamond Award for the best global brandcampaign in the category of Sharpening Brand and Competitive Differentiation from the ITServices Marketing Association (ITSMA).

The company got extensive coverage in leading global print, electronic and digital media. Thecompany was also featured on leading online business and technology destinations like

www.cio.com , www.businessweek.com and www.forbes.com. CNBC promoted the Infosys

brand on its channels across the US, Europe and Asia as a sponsor of the Whos in charge?debate and as the host of the 2020: Future by design breakfast at Davos.

The company is recognized as a leader by leading analyst firms for many of its offerings. Aleading analyst firm ranked the company as a leader in global IT infrastructure outsourcing, SAPimplementation providers and Oracle implementation providers. The company is also figured asa leader for North America and Europe Offshore Applications Services. Infosys BPO was rankedamongst the top six comprehensive FAO service providers by a leading analyst firm.

The company has leveraged Web 2.0 technologies for effective online branding. The Companysblogs ran on www.economist.com, videos ran on YouTube and the investor section of thecompanys website was voted as the winner in the Best Investors Relations Website and BestCorporate Governance categories in Asia Pacific and Africa by MZ Consult NY LLC, in the 2008investor relations global rankings. The company also has its own intranet-based TV channel,Infy TV, for internal commutation and branding. With Infosys, clients are assured of atransparent business partner, world class processes, speed of execution and the power to stretchtheir IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over103,000 employees in over 50 offices worldwide.


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Recent News

In fo s ys a d d s n e t o f 1,772 e m p loye es in Q4 20 0 9 15/ 0 4 / 20 0 9

Infosys Technologies and its subsidiaries added net of 1,772 employees during thequarter ended March 31, 2009. The gross addition during the last quarter was 4,935employees.``The year ahead would be challenging on the people front, `` said T V Mohandas Pai,Member of the Board and Head - HRD and Education & Research.``Our continuous investment in capability development, training and certification wouldmake us more competitive. We have tightened our performance management system to

create a more focused workforce, `` he said.

In fo s ys eyes a cq u is it io n s in US 28 / 0 3 / 20 0 9

Infosys Technologies Ltd eyeing at some acquisition in US during the downturn, co-chairman Nandan Nilekani was quoted as saying on Friday. "Acquisitions will definitely

be very accessible in this market from a price point of view', Nilekani told the Wall StreetJournal in an interview.If it makes sense, we'll do it".

He said that the companies operating in the areas of healthcare and pharmaceuticalsspace might make particularly interesting targets, he said. In the interview, Nilekanireiterated Infosys's previous guidance regarding the revenue growth of about 12 per centfor the financial year ending March 31. That would be a sharp deceleration from growthof 35 per cent in the year ended March 31, 2008.

Regarding the economic crisis, Nilekani said "I've never seen this level of lack of clarity."He said the executives are "more focused on short-term tactical issues" than making

bigger decisions about outsourcing. In response, Nilekani said Infosys is working onalternative payment arrangements with customers that include some that would link feesto business results. However, the other customers are asking to pay on a per-transaction

basis, rather than a lump sum for a system. Nilekani said the rising protectionistsentiment in the U.S. also is affecting the decision making of the customers aboutoutsourcing.


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In fo s ys Techn o l ogi e s 16 / 3 / 200 9

Infosys Technologies Limited announced that it has worked with Bekins Van Lines tosuccessfully transform its enterprise application architecture to support new businesschannels and growth opportunities. Bekins is one of the largest North Americanintegrated networks and provides services for movement of household, tradeshow andhigh value and military goods.

Working closely with Infosys, Bekins simultaneously modernized all critical operationalQuote-to-Cash Logistics systems from a 25-year old legacy platform to a service-orientedarchitecture (SOA) workflow-based system in only 18 months while maintaining

business continuity,

"Infosys was a strategic partner throughout our implementation, working with us to helpdefine the modernization strategy and create a migration roadmap at each step of thetransformation journey," said Randy Valentino, chief technology officer and vicepresident of Information Technology at Bekins Van Lines, "The success of this projecthas not only delivered a highly flexible and efficient IT infrastructure, it has positionedour business for future growth opportunities,"

As a result of the transformation, Bekins has eliminated significant system inefficienciesleading to improved business processes and reduction in IT costs. The flexible SOAplatform facilitates easier integration with external service providers and channelpartners, including internet-based lead generation with core shipment andtransportation execution systems, and management of the sales process fromprospecting to order booking and rating. Bekins has already reduced IT costs over 50percent through reduced maintenance, license, system hardware and branchcommunication costs.

"We worked closely with the team at Bekins to ensure the success of this project," saidSandeep Dadlani, vice president of Retail, Consumer Packaged Goods and Logistics atInfosys Technologies. "Modernization of legacy applications is a challenge that spansindustries and geographies and we were pleased to work with Bekins throughout eachphase of this successful project from addressing challenges to achieving benefits.


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Ind i an IT ind us t r y w i ll t i de ove r cu r r en tcr i s i s : In fosys ch ief

1 6 / 0 3 / 2 0 0 9

Indian IT industry would tide over the current crisis and may beat the US in terms ofhaving the largest number IT professionals in the world in the next 3 years, accordingto Infosys chief and co-founder S Gopalakrishnan, reports Business Standard.

He said that the industry offers considerable opportunities over the next 30 yearsHe was speaking during the event - Systems Continuum 2009, organized by IITBombays Shailesh J Mehta School of Management.

Shares of the company gained Rs 69.2, or 5.64%, to end at Rs 1,296.35. The totalvolume of shares traded was 314,600 at the BSE (Friday).


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Financial Highlights (Stand alone basis)


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Ratios

P&L Ratios

Particulars 2007-08 2006-07 2005-06 2004-05 2003-04

Export revenue/ Total revenue (%) 98.60 98.40 98.18 98.05 98.61

Software dev expenses/ Total revenue (%) 56.72 55.35 54.13 53.28 52.41

Gross Profit/ Total revenue (%) 43.28 44.65 45.87 46.72 47.59

Selling and marketing expenses/Totalrevenue(%) 4.67 5.47 5.53 5.72 7.04

General and administration expenses/ Total revenue (%) 6.90 7.05 7.23 7.11 7.29

Employee costs/ Total revenue (%) 49.89 48.02 47.29 46.39 49.69

Operating profit/ Total revenue (%) 31.72 32.13 33.12 33.90 33.26

Operating profit after depreciation and interest/ Totalrevenue (%)

28.23 28.56 28.58 29.99 28.41

Depreciation and amortization/Total revenue (%) 3.49 3.57 4.53 3.91 4.85

Tax/ Total revenue (%) 4.03 2.68 3.36 4.74 4.77

PAT from ordinary activities/ Total revenue (%) 28.57 28.72 26.82 27.10 26.12

ROCE (%) 41.38 45.73 44.89 51.43 48.10

Return on invested capital (%) 71.12 89.10 93.96 123.56 137.46

Growth ratios

Particulars 2007-08 2006-07 2005-06 2004-05 2003-04

Export revenue (%) 19.28 45.97 31.79 43.27 32.49

Total revenue (%) 19.01 45.65 31.60 44.08 31.42

Operating profit (%) 17.47 41.35 28.56 46.82 24.50

Net profit from ordinary activities (%) 18.35 56.01 30.23 49.52 29.81

EPS from ordinary activities (%) 15.36 52.95 28.02 47.87 29.51


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Balance Sheet Ratios

Particulars 2007-08 2006-07 2005-06 2004-05 2003-04

Debt-equity ratio - - - - -

Debtors revenue (days) 72 64 61 67 48

Current ratio 3.28 4.91 2.73 2.77 1.65

Cash and cash equivalents/ Total assets (%) 57.00 50.62 64.71 54.38 85.11

Cash and cash equivalents/ Total revenue (%) 49.14 42.97 49.44 41.56 58.16

Ratios - Return

Particulars 2007-08 2006-07 2005-06

PAT before exceptional items / average net worth(%)

36.26 41.83 39.89

ROCE (PBIT / Average capital employed) (%) 41.38 45.73 44.89

Return on average invested capital (%)71.12 88.81 93.96

Capital out put ratio 1.27 1.46 1.49

Invested capital out put ratio 2.76 3.29 3.74

Value added / total revenue (%) 85.97 80.71 80.79

Enterprise value / Total Revenue (%) 4.76 8.34 8.61

Dividend / adjusted public offer price (%) 1,785 1,549 1,011

Market Price / adjusted public offer price (%) 1,94,008 2,71,987 2,00,852


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Infosys Vs Peers

Parameter Infosys (Rs. mn.) TCS (Rs. mn.) Wipro (Rs. mn.)a . Ke y I n d i ca t o r

Sales 156480.00 185337.20 102271.17

PAT 44700.00 45087.60 20204.80

Operating Margin(% of OI) 31.8 27 .2 24.3

Net Margin(% of OI) 28.5 24.3 19.7

b . Gr o w t h R a t e

sales % 19.01 24 .05 0.00

PAT % 18.16 20 .00 0.00

c .F i nan c ia l H ea l t hDebt/Equity 0.00 0.01 0.01

d . P r i ce P e r f o r m a n c e

3 months 13.77 6.34 12.78

6 months 0.39 -7.42 - 13 .59

9 months -22 .36 -34.63 -36 .71

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CompanySales

Rs. Cr.PAT

Rs. Cr.

MarketCapitalRs. Cr.

In fosys Techn ologies Ltd . 15,648.00 4,470.00 81,684.45

Tata Consultancy Services Ltd. 18,533.72 4,508.76 59,029.79

Wipro Ltd. 17,492.60 3,063.30 40,135.34

HCL Technologies Ltd. 3,768.62 1,101.82 8,177.95

Oracle Financial Services Software Ltd. 1,792.97 410.87 6,484.59


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