financial performance for the year ended march 31, 2001 financial performance for the year ended...

FINANCIAL PERFORMANCE FOR THE YEAR ENDED MARCH 31, 2001

FINANCIAL PERFORMANCE FOR THE YEAR ENDED MARCH 31, 2001

All brand names, product names or logos referenced in this presentation are trademarks or registered trademarks of their respective companies or organizations © 2001 Infosys All rights reserved

--------20th Annual General Meeting--------

© 2001 Infosys All rights reserved

20th Annual General Meeting

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.

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.



Highlights

More than 100% year-on-year growth in Revenue and Profit after tax before extraordinary items in all the four quarters during the year

Total dividend of Rs. 10.00 per share (200% on par value of Rs. 5) for the year taking the total amount of dividend to Rs. 66.16 crore as against Rs. 29.76 crore for the previous year

FII investment limit increased to 49% from 40%

Awarded silver shield for best presented accounts by ICAI, for the sixth consecutive time

More than 100% year-on-year growth in Revenue and Profit after tax before extraordinary items in all the four quarters during the year

Total dividend of Rs. 10.00 per share (200% on par value of Rs. 5) for the year taking the total amount of dividend to Rs. 66.16 crore as against Rs. 29.76 crore for the previous year

FII investment limit increased to 49% from 40%

Awarded silver shield for best presented accounts by ICAI, for the sixth consecutive time



921.46

1959.94

113%

113%

2000 2001

Total income (Rs.cr)

869.70

1874.03

378.88

808.92

Exports (Rs.cr)

2000 2001

Operating profit(Rs.cr)

20012000

Year at a glance

115%

115%

114%

114%



* From ordinary activities

Year at a glance (contd…)

325.65

696.03

2000 2001

PBT(Rs.cr)

285.95

623.32

PAT*(Rs.cr)

2000 2001

Basic EPS*(Rs)

20012000

94.23

43.23

114%

114%

118%

118%

118%

118%



41.1% 41.3%

2000 2001

PBIDT (%)

35.3% 35.5%

PBT* (%)

2000 2001

PAT* (%)

20012000

31.8%31.0%

Year at a glance (contd…)

* From ordinary activities



Extra-ordinary items

Infosys piloted the venture – OnMobile Systems Inc as part of the incubation scheme for employees to launch their own ventures while continuing to derive benefits from a close association with the company.

During the year, Infosys transferred its intellectual property rights in the Onscan product – a web enabled notification product to OnMobile Systems Inc for a gross consideration of Rs 8.93 crore (Rs 5.49 crore – net of tax) received in the form of equity, preferred voting and non-voting securities

Infosys piloted the venture – OnMobile Systems Inc as part of the incubation scheme for employees to launch their own ventures while continuing to derive benefits from a close association with the company.

During the year, Infosys transferred its intellectual property rights in the Onscan product – a web enabled notification product to OnMobile Systems Inc for a gross consideration of Rs 8.93 crore (Rs 5.49 crore – net of tax) received in the form of equity, preferred voting and non-voting securities



Provision for investments

Pending the conclusion of liquidation proceedings, provision has been made for investments and accounts receivable in EC Cubed Inc., and Alpha Thinx Mobile Phone Services AG.

Rs.cr

Investment Accounts Cumulativereceivable billings

EC Cubed Inc. 13.08 4.6723.02

Alpha Thinx Mobile Phone

Services AG. 2.21 1.496.58

Total 15.29 6.1629.60

Pending the conclusion of liquidation proceedings, provision has been made for investments and accounts receivable in EC Cubed Inc., and Alpha Thinx Mobile Phone Services AG.

Rs.cr

Investment Accounts Cumulativereceivable billings

EC Cubed Inc. 13.08 4.6723.02

Alpha Thinx Mobile Phone

Services AG. 2.21 1.496.58

Total 15.29 6.1629.60



Leveraging the Global Delivery Model

16 state-of-the-art development centers in India

Global development center in Toronto, Canada

6 proximity development centers in Fremont, Boston, Chicago, New Jersey, Phoenix, Arizona in the US and in London, UK

Sales and marketing offices in 25 locations across the globe

…we link customers worldwide.

16 state-of-the-art development centers in India

Global development center in Toronto, Canada

6 proximity development centers in Fremont, Boston, Chicago, New Jersey, Phoenix, Arizona in the US and in London, UK

Sales and marketing offices in 25 locations across the globe

…we link customers worldwide.



20012000

68

35.6

203.4

87

57.1

413.85

42 48 57 6887

11.4 17.2 25.4 35.657.1

39.6

68.3

121

203.4

413.85

1997 1998 1999 2000 2001

Fiscal year ended March 31,

Per-capita revenues (US$ 000) Billed manmonths (‘000) Revenues (US$ Mn)

80% CAGR

50% CAGR

20% CAGR

Drivers of growth

103%

60%

28%

Fiscal year ended March 31,



Revenue SegmentationRevenue Segmentation



1999-2000 2000-2001

Geographic segments

73.5%

1.4%6.3%

18.8%

N.AmericaEuropeROWIndia

78.0%

5.8%1.4%

14.8%

N.AmericaEuropeROWIndia



1999-2000 2000-2001

Business segments

43.7%

28.6%

10.1%

2.6%4.7%2.0%

6.0%

1.6%0.7%

Development MaintenanceRe-engineering Package implementationConsulting TestingEngineering services Other servicesProducts

40.0%

25.4%

7.2%

6.1%2.5%

2.9%

4.9%

1.7%

9.3%

Development MaintenanceRe-engineering Package implementationConsulting TestingEngineering services Other servicesProducts



1999-2000 2000-2001

Vertical domains

17.8%

14.2%

19.5%

9.1%

2.2%

17.4%

1.4%

18.4%

Manufacturing Insurance

Banking & financial services Telecom

Retail Utilities

Transportation & logistics Others

23.0%

15.0%

15.1%

10.6%

2.8%

15.1%

3.0%

15.4%

Manufacturing Insurance

Banking & financial services Telecom

Retail Utilities

Transportation & logistics Others



1999-2000 2000-2001

Technology segments

47.2%

25.0%

6.8%

7.4%

13.6%

Distributed systemsMainframe/mid-rangeInternetProprietary telecom systemsOthers

44.6%

13.6%

5.1%

8.3%

28.4%

Distributed systemsMainframe/mid-rangeInternetProprietary telecom systemsOthers



1999-2000 2000-2001

Project segmentation

31.5%

68.5%

Fixed Price Time and Material

28.2%

71.8%

Fixed Price Time and Material



1999-2000 2000-2001

Onsite-offshore segmentation

48.5%

51.5%

Onsite Offshore

51.5%

48.5%

Onsite Offshore



De-risking Business Portfolio RisksDe-risking Business Portfolio Risks



Client concentration

FY 2001 FY 2000 FY 1999

Active clients 273 194 115 Clients added during the year 122 99 39 % of revenue from top client 7.3% 7.2% 6.4% % of revenue from top 5 clients 26.0% 30.2% 28.4% % of revenue from top 10 clients 39.2% 45.7% 44.0% Clients accounting for >5%

of revenues 3 4 5 Repeat business (%) 85% 87% 90% No. of million-dollar clients 80 42 35 No. of 5-million-dollar clients 19 10 6 No. of 10-million-dollar clients 11 4 - No. of 20-million-dollar clients 3 - -

FY 2001 FY 2000 FY 1999

Active clients 273 194 115 Clients added during the year 122 99 39 % of revenue from top client 7.3% 7.2% 6.4% % of revenue from top 5 clients 26.0% 30.2% 28.4% % of revenue from top 10 clients 39.2% 45.7% 44.0% Clients accounting for >5%

of revenues 3 4 5 Repeat business (%) 85% 87% 90% No. of million-dollar clients 80 42 35 No. of 5-million-dollar clients 19 10 6 No. of 10-million-dollar clients 11 4 - No. of 20-million-dollar clients 3 - -



Repeat business

FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01

Repeat business ($ million)FY 95 18.0 24.4 21.1 22.1 27.5 31.1 34.3 FY 96 2.2 12.1 18.3 28.6 33.6 45.9 FY 97 6.3 16.4 24.1 37.2 64.1 FY 98 11.5 28.8 47.4 69.5 FY 99 12.1 28.9 47.6 FY 00 25.2 88.2 FY 01 64.1 Total 18.0 26.6 39.6 68.3 121.0 203.4 413.9

Repeat business (% of total revenue)FY 95 100.0 91.8 53.4 32.3 22.7 15.3 8.3 FY 96 8.2 30.6 26.8 23.6 16.5 11.1 FY 97 16.0 24.0 19.9 18.3 15.5 FY 98 16.9 23.8 23.3 16.8 FY 99 10.0 14.2 11.5 FY 00 12.4 21.3 FY 01 15.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0

FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01

Repeat business ($ million)FY 95 18.0 24.4 21.1 22.1 27.5 31.1 34.3 FY 96 2.2 12.1 18.3 28.6 33.6 45.9 FY 97 6.3 16.4 24.1 37.2 64.1 FY 98 11.5 28.8 47.4 69.5 FY 99 12.1 28.9 47.6 FY 00 25.2 88.2 FY 01 64.1 Total 18.0 26.6 39.6 68.3 121.0 203.4 413.9

Repeat business (% of total revenue)FY 95 100.0 91.8 53.4 32.3 22.7 15.3 8.3 FY 96 8.2 30.6 26.8 23.6 16.5 11.1 FY 97 16.0 24.0 19.9 18.3 15.5 FY 98 16.9 23.8 23.3 16.8 FY 99 10.0 14.2 11.5 FY 00 12.4 21.3 FY 01 15.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0



E-business exposure

Q1 Q2 Q3 Q4FY 01

Internet & e-commercerelated revenues ($ mn) 23.0 30.8 32.5 31.2

117.5

Of this, business from – Established

corporations 62% 70% 80% 84%75%

Dot-coms & venture-funded companies 38% 30% 20% 16%

25%

Q1 Q2 Q3 Q4FY 01

Internet & e-commercerelated revenues ($ mn) 23.0 30.8 32.5 31.2

117.5

Of this, business from – Established

corporations 62% 70% 80% 84%75%

Dot-coms & venture-funded companies 38% 30% 20% 16%

25%



Q1 Q2 Q3 Q4FY 01

Revenues from dot-com& internet start-up companies 10.9% 9.5% 5.8% 4.0%

7.1%

Telecom start-up companies 6.3% 2.7% 3.5% 3.0%

3.7%

Total start-up and venture funded companies 17.2% 12.2% 9.3% 7.0%

10.8%

Q1 Q2 Q3 Q4FY 01

Revenues from dot-com& internet start-up companies 10.9% 9.5% 5.8% 4.0%

7.1%

Telecom start-up companies 6.3% 2.7% 3.5% 3.0%

3.7%

Total start-up and venture funded companies 17.2% 12.2% 9.3% 7.0%

10.8%

Revenues from start-up and venture funded companies



Maintained A Strong Balance SheetMaintained A Strong Balance Sheet



A strong balance sheet...(Rs. crore)

Mar 31, 2001 % Mar 31, 2000 %

SOURCES OF FUNDSSOURCES OF FUNDSShare capital 33.08 2 33.08 3Reserves and surplus 1356.56 79 800.23 80Current liabilities & provisions 319.85 19 165.96 17Total 1709.49 100 999.27 100

APPLICATION OF FUNDSAPPLICATION OF FUNDSFixed assets 557.66 33 207.34 21Investments 34.12 2 13.83 1Sundry Debtors 302.37 18 136.18 14Cash and equivalents 577.74 34 508.37 51Other current assets 237.60 14 133.55 13Total 1709.49 100 999.27 100

CONTINUED TO BE A ZERO-DEBT COMPANY

(Rs. crore)

Mar 31, 2001 % Mar 31, 2000 %

SOURCES OF FUNDSSOURCES OF FUNDSShare capital 33.08 2 33.08 3Reserves and surplus 1356.56 79 800.23 80Current liabilities & provisions 319.85 19 165.96 17Total 1709.49 100 999.27 100

APPLICATION OF FUNDSAPPLICATION OF FUNDSFixed assets 557.66 33 207.34 21Investments 34.12 2 13.83 1Sundry Debtors 302.37 18 136.18 14Cash and equivalents 577.74 34 508.37 51Other current assets 237.60 14 133.55 13Total 1709.49 100 999.27 100

CONTINUED TO BE A ZERO-DEBT COMPANY



159.87

463.35

2000 2001

Capital investment(Rs.cr)

53.23

112.89

Depreciation (Rs.cr)

2000 2001

Depreciation/ revenues (%)

20012000

5.85.8

...Inspite of increased Capex spending19

0%19

0%

112%112%



Cash flows continue to be strong…(Rs. crore)

FY 2001 FY 2000 Operating cash flows 541.23 249.48 Financing cash flows (39.82) (21.53)

Proceeds on exercise of stock options 2.38 1.76Dividends paid (42.20) (19.92)Expenses related to issue of ADSs /ADSs linked stock options - (3.37)

Investing cash flows (452.22) (146.16)Purchases of fixed assets (463.35) (159.87)Proceeds on sale of fixed assets 0.22 0.10Long-term investments (26.63) (13.08)Income from investments 37.55 26.69

Effect of exchange differences 20.17 9.93 Net increase in cash & cash equivalents 69.36 91.71 Cash and cash equivalents, beginning of year 508.37 416.66 Cash and cash equivalents, end of year 577.74 508.37

(Rs. crore)

FY 2001 FY 2000 Operating cash flows 541.23 249.48 Financing cash flows (39.82) (21.53)

Proceeds on exercise of stock options 2.38 1.76Dividends paid (42.20) (19.92)Expenses related to issue of ADSs /ADSs linked stock options - (3.37)

Investing cash flows (452.22) (146.16)Purchases of fixed assets (463.35) (159.87)Proceeds on sale of fixed assets 0.22 0.10Long-term investments (26.63) (13.08)Income from investments 37.55 26.69

Effect of exchange differences 20.17 9.93 Net increase in cash & cash equivalents 69.36 91.71 Cash and cash equivalents, beginning of year 508.37 416.66 Cash and cash equivalents, end of year 577.74 508.37



1999-2000 2000-2001Days of sales receivable - 56 days Days of sales receivable - 58 days

Age profile of Accounts Receivable

Age profile of Accounts Receivable

...While receivables are continuously monitored.

1.7%

64.7%

31.8%

1.8%

0-30 31-60 61-90 >90

2.5%

69.2%

26.6%

1.7%

0-30 31-60 61-90 >90



Other Key Performance IndicatorsOther Key Performance Indicators



Effort and margins analysis

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

40.0%

41.0%

42.0%

43.0%

44.0%

45.0%

46.0%

47.0%

48.0%

49.0%

50.0%

51.0%

Bench and trainingmanmonths

2,420 3,419 4,186 3,254 3,982 6,877 7,691 9,077

US GAAP gross margins(%)

48.1% 45.6% 45.3% 43.7% 47.7% 48.7% 47.3% 49.6%

Q1 FY00

Q2 FY00

Q3 FY00

Q4 FY00

Q1 FY01

Q2 FY01

Q3 FY01

Q4 FY01



40.6%

56.1%54.2%

2000 20011999

Return on Average Net Worth (RONW)

46.3%

62.6%63.5%

2000 20011999

Return on Capital Employed (ROCE)

111.7%105.7%

93.5%

2000 20011999

Return on Invested Capital (ROIC)

Other performance indicators



1.251.711.36

2000 20011999

Capital Output Ratio

3.66 3.343.64

2000 20011999

Invested Capital Output Ratio

63.84

13.4418.08

2000 20011999

Enterprise value/total revenue (X)




* From ordinary activities.


43.23

94.23

20.71

2000 20011999

EPS* (Rs.)

51.28

111.29

26.30

2000 20011999

Cash EPS* (Rs.)

4.5010.00

3.75

2000 20011999

Dividend per share (Rs.)

Restated on par value of Rs.5 and adjusted for bonus issues in earlier years.



125.97

210.05

86.84

2000 20011999

Book value (Rs.)

207.48

43.1970.74

2000 20011999

Price Earnings (x)

151,076

68,547

24,632

2000 20011999

Market price/Adjusted IPO price (%)

Restated on par value of Rs.5 and adjusted for bonus issues in earlier years.




FY 2001 FY 2000 FY 1999

Brand value (Rs.cr) 5,376 5,246 1,727

EVA (Rs.cr) 389.02 129.06 70.78

Value added (Rs.cr) 1,563.18 723.31 374.11

HR value (Rs.cr) 5,123.42 2,237.42 945.70

Education index 28,725 15,544 10,731

Average age ofemployees (years) 25.67 26.14 26.14

Revenue from image enhancing clients (%) 52% 47% 49%

FY 2001 FY 2000 FY 1999

Brand value (Rs.cr) 5,376 5,246 1,727

EVA (Rs.cr) 389.02 129.06 70.78

Value added (Rs.cr) 1,563.18 723.31 374.11

HR value (Rs.cr) 5,123.42 2,237.42 945.70

Education index 28,725 15,544 10,731

Average age ofemployees (years) 25.67 26.14 26.14

Revenue from image enhancing clients (%) 52% 47% 49%

Strength of the invisibles



Financial HighlightsFinancial Highlights

US GAAPUS GAAP



Amounts in US$ mn

Year at a glance

203.44

413.85

2000 2001

Revenues

92.36

200.24

60.50

137.51

Gross profit

2000 2001

Operating income

20012000

103%

103%

117%

117%

127%127%



65.62

142.59

2000 2001

Operating income (excl. stock comp)

61.34

131.95

66.46

137.03

Net income

2000 2001

Net income (excl. stock comp)

20012000

Amounts in US$ mn

Year at a glance (Contd…)11

7%11

7%

115%

115%

106%

106%



Year at a glance (Contd…)

32.3%34.5%

2000 2001

Operating income (excl. stock comp)

/ revenues

32.7% 33.1%

1.01

2.08

Net income (excl. stock comp)

/ revenues

2000 2001

Basic EPS(excl. stock comp)

($)

20012000

106%

106%



US GAAP and Indian GAAP reconciliation(US$ Mn)

FY 2001 FY 2000

Net profit as per Indian GAAP 136.84 67.78

Adjustments

Deferred tax 0.77 0.85

Provision for retirement benefit to

employees 0.74 (0.74)

Employee stock-based compensation (5.08) (5.12)

Provision for contingencies/e-inventing (0.09) (1.42)

Transfer of intellectual property rights

(net of tax) (1.23) -

Net income as per US GAAP 131.95 61.34

(US$ Mn)

FY 2001 FY 2000

Net profit as per Indian GAAP 136.84 67.78

Adjustments

Deferred tax 0.77 0.85

Provision for retirement benefit to

employees 0.74 (0.74)

Employee stock-based compensation (5.08) (5.12)

Provision for contingencies/e-inventing (0.09) (1.42)

Transfer of intellectual property rights

(net of tax) (1.23) -

Net income as per US GAAP 131.95 61.34



Service To InvestorsService To Investors



Investor services

87.7% of share transfers in physical form completed within 15 days during the year

Investor grievances/ correspondence attended to within a period of 10 days (Except in cases constrained by disputes or legal impediments)

Over 98% of the company’s shares are now held in electronic form

Pending share transfer related litigation - 13 cases

87.7% of share transfers in physical form completed within 15 days during the year

Investor grievances/ correspondence attended to within a period of 10 days (Except in cases constrained by disputes or legal impediments)

Over 98% of the company’s shares are now held in electronic form

Pending share transfer related litigation - 13 cases



Community InitiativesCommunity Initiatives



Community services

Grants of Rs.5.26 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.

Covered about 800 urban children from 100 schools, 2,000 children in rural schools (in five languages), and 90 engineering college teachers from over about 60 colleges across the country

Infosys has donated 744 computers to 272 institutions across India through its Computers@ classrooms initiative launched in January 1999

Grants of Rs.5.26 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.

Covered about 800 urban children from 100 schools, 2,000 children in rural schools (in five languages), and 90 engineering college teachers from over about 60 colleges across the country

Infosys has donated 744 computers to 272 institutions across India through its Computers@ classrooms initiative launched in January 1999



Our Efforts Were Well RecognizedOur Efforts Were Well Recognized



Awards won during the year

For the sixth year in succession, Infosys received the silver shield from the Institute of Chartered Accountants of India for the Best Presented Accounts for 1999-2000

Asiamoney poll of financial analysts voted Infosys the best in management among the listed companies in India for the fifth time in a row

The Far Eastern Economic Review rated Infosys as the No.1 company in India in the Review 2000, an annual survey of India’s leading companies

For the sixth year in succession, Infosys received the silver shield from the Institute of Chartered Accountants of India for the Best Presented Accounts for 1999-2000

Asiamoney poll of financial analysts voted Infosys the best in management among the listed companies in India for the fifth time in a row

The Far Eastern Economic Review rated Infosys as the No.1 company in India in the Review 2000, an annual survey of India’s leading companies



Thank you Thank you

financial performance for the year ended march 31, 2001 financial performance for the year ended...

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