Infy Shareholders Okay Increase In Fii Limit To 100%

The shareholders of Infosys Technologies have approved an increase in the limit on foreign institutional investors (FII) holding in the company to 100 per cent from the current 49 per cent of the paid-up equity capital.

Responding to a shareholder view against the move, Infosys chairman and chief mentor N R Narayana Murthy said: "In the days of globalisation, one has to compete with one's strength and not with one's fears and one cannot shy away from globalisation."

Murthy told shareholders that no board member would sell their shares and 'run away'. "We are here to run the company and have to make it sure that shareholders get better and better returns," Murthy said.

 

The shareholders also approved the final dividend of Rs 12.50 per share (250 per cent on par value of Rs 5) as recommended by the board earlier. The total dividend for the year stands at Rs 20 per share (400 per cent on par value of Rs 5).

Infosys has said there is no short-term impact on the company's growth because of the cancellation of client visits arising out of Indo-Pak war fears, but there could be possible long-term consequences.

"There is no short-term impact as we see it today. But it could be possible that there may be a long-term impact if the situation persists," S Gopalakrishnan, chief operating officer and deputy managing director, told shareholders at the company's 21st annual general meeting.

Gopalakrishnan said Infosys is ready with a contingency plan for clients. "We are in touch with our clients to reassure them about the situation and we are prepared even if we have to move a project overseas,'' Gopalakrishnan said.

On a shareholder's demand for a share buyback, Nandan Nilekani, president and chief executive officer, said the company does not have any such plans or any move to issue bonus shares.

The shareholders also approved the appointment of former World Economic Forum head Claude Smadja as an independent member of the board. The AGM also adopted the balance sheet and the profit and loss account for the year-ended March 31, 2002. Infosys had reported a 29.6 per cent increase in net profits at Rs 807.96 crore and a 37 per cent increase in revenues at Rs 2,603.59 crore for 2001-02 over the previous year.

Earlier, Narayana Murthy told shareholders that he was extremely happy with the performance of each and every Infoscian (Infosys employees) during his tenure. He said the company has shown that it has the best forecasting system in the industry in India.

"When we had projected a growth of 30 per cent last year, the whole industry differed with us saying that we were underestimating the growth. However, today we know that the industry has grown by only 18 per cent and we grew by 31.7 per cent exceeding the projections." He said this was as per the company's philosophy of `under-promise and over-deliver,' he said.

Murthy said Infosys has lived up to the highest standards of corporate governance even at the risk of a possible short-term loss of market capitalisation. He said every Infoscian has stood by his words to live up to the promises made to every stakeholder and were even willing to forego salary hikes. "Infosys represents to me what civilised society is all about, " Murthy said.

Murthy, who stepped down during the year as CEO and donned the role of chief mentor, told shareholders, "I see a great band of leaders at Infosys and believe that the new CEO, Mr Nandan Nilekani, will achieve much more for the organisation than I have been able to."