The Board of Directors hereby submits the report of the business andoperations of your Company ("the Company" or "Infosys") along withthe audited financial statements for the financial year ended March 31 2021. Theconsolidated performance of the Company and its subsidiaries has been referred to whereverrequired.
1. Results of our operations and state of affairs
in Rs crore except per equity share data
|Particulars || |
Standalone For the year ended March 31
Consolidated For the year ended March 31
| ||2021 ||2020 ||2021 ||2020 |
|Revenue from operations ||85912 ||79047 ||100472 ||90791 |
|Cost of sales ||55541 ||52816 ||65413 ||60732 |
|Gross profit ||30371 ||26231 ||35059 ||30059 |
|Operating expenses || || || || |
|Selling and marketing expenses ||3676 ||3814 ||4627 ||4711 |
|General and administration expenses(1) ||4559 ||4526 ||5810 ||5974 |
|Total operating expenses ||8235 ||8340 ||10437 ||10685 |
|Operating profit ||22136 ||17891 ||24622 ||19374 |
|Finance cost ||126 ||114 ||195 ||170 |
|Other income net ||2467 ||2700 ||2201 ||2803 |
|Profit before tax ||24477 ||20477 ||26628 ||22007 |
|Tax expense ||6429 ||4934 ||7205 ||5368 |
|Profit after tax ||18048 ||15543 ||19423 ||16639 |
|Profit attributable to owners of the Company ||18048 ||15543 ||19351 ||16594 |
|Non-controlling interests || || ||72 ||45 |
|Other comprehensive income || || || || |
|Items that will not be reclassified subsequently to profit or loss ||268 ||(215) ||253 ||(213) |
|Items that will be reclassified subsequently to profit or loss ||(77) ||(19) ||53 ||364 |
|Total other comprehensive income / (loss) net of tax ||191 ||(234) ||306 ||151 |
|Total comprehensive income for the year attributable to the owners of the Company ||18239 ||15309 ||19651 ||16732 |
|Non-controlling interest || || ||78 ||58 |
|Earnings per share (EPS)(2) || || || || |
|Basic ||42.37 ||36.34 ||45.61 ||38.97 |
|Diluted ||42.33 ||36.32 ||45.52 ||38.91 |
1 crore = 10 million
Notes: The above figures are extracted from the audited standalone andconsolidated financial statements as per Indian Accounting Standards (Ind AS). (1)Includes impairment of capital asset of Rs 283 crore under CSR expense in the Standalonefinancial statements of the Company as the Company intends to transfer its CSR capitalassets created prior to January 2021 to a controlled subsidiary consequent to theCompanies (Corporate Social Responsibility Policy) Amendment Rules 2021.
The recoverable amount of capital asset is expected to exceed thecarrying amount including in the period subsequent to the transfer to a controlledsubsidiary hence no impairment charge has been recorded in the Consolidated financialstatements.
(2) Equity shares are at par value of Rs 5 per share.
in Rs crore except equity share data
|Particulars ||Standalone ||Consolidated |
| ||As at March 31 ||As at March 31 |
| ||2021 ||2020 ||2021 ||2020 |
|Cash and cash equivalents ||17612 ||13562 ||24714 ||18649 |
|Current investments ||2037 ||4006 ||2342 ||4655 |
|Net current assets ||30660 ||28600 ||36868 ||33720 |
|Property plant and equipment || || || || |
|(including capital work-in-progress) ||11836 ||12037 ||13482 ||13389 |
|Right-of-use assets ||3435 ||2805 ||4794 ||4168 |
|Goodwill ||167 ||29 ||6079 ||5286 |
|Other intangible assets ||67 ||48 ||2072 ||1900 |
|Other non-current assets ||30152 ||22302 ||21226 ||13449 |
|Total assets ||93939 ||81041 ||108386 ||92768 |
|Non-current lease liabilities ||3367 ||2775 ||4587 ||4014 |
|Other non-current liabilities ||1419 ||812 ||3152 ||2054 |
|Retained earnings opening balance ||52419 ||54070 ||56309 ||57566 |
|Add: || || || || |
|Profit for the year ||18048 ||15543 ||19351 ||16594 |
|Transfer from Special Economic Zone Re-investment || || || || |
|Reserve on utilization ||967 ||1036 ||1039 ||1080 |
|Less: || || || || |
|Impact of adoption of Ind AS 116 || ||(17) || ||(40) |
|Dividends (including dividend distribution tax if any) ||(9158) ||(9553) ||(9120) ||(9517) |
|Buyback of equity shares || ||(4717) || ||(4717) |
|Effect of modification of equity-settled share-based || || || || |
|payment awards to cash-settled awards || ||(9) || ||(9) |
|Transfer to general reserve ||(1554) ||(1470) ||(1554) ||(1470) |
|Transfer to Special Economic Zone Re-investment || || || || |
|Reserve ||(3204) ||(2464) ||(3354) ||(2580) |
|Financial liability under option arrangements || || || ||(598) |
|Payment towards acquisition of minority interest || || ||(28) || |
|Retained earnings closing balance ||57518 ||52419 ||62643 ||56309 |
|Equity share capital ||2130 ||2129 ||2124 ||2122 |
|Other reserves and surplus(1) ||11831 ||7825 ||10243 ||5978 |
|Other comprehensive income ||52 ||(139) ||1341 ||1041 |
|Non-controlling interest || || ||431 ||394 |
|Total equity ||71531 ||62234 ||76782 ||65844 |
|Total equity and liabilities ||93939 ||81041 ||108386 ||92768 |
|Number of equity shares ||4260660846 4258992566 ||4245146114 4240753210 || || |
(1) Excluding retained earnings
Summary Profit and Loss standalone
in Rs crore except per equity share data
|Particulars ||Year ended March 31 |
| ||2021 ||% of revenue ||2020 ||% of revenue ||YoY growth (%) |
|Revenue from operations ||85912 ||100.0 ||79047 ||100.0 ||8.7 |
|Gross profit ||30371 ||35.4 ||26231 ||33.2 ||15.8 |
|Selling and marketing expenses ||3676 ||4.3 ||3814 ||4.8 ||(3.6) |
|General and administration expenses ||4559 ||5.3 ||4526 ||5.7 ||0.7 |
|Operating profit ||22136 ||25.8 ||17891 ||22.6 ||23.7 |
|Profit before tax ||24477 ||28.5 ||20477 ||25.9 ||19.5 |
|Net profit ||18048 ||21.0 ||15543 ||19.7 ||16.1 |
|Earnings per equity share || || || || || |
|Basic ||42.37 || ||36.34 || ||16.6 |
Summary Profit and Loss consolidated
in Rs crore except per equity share data
|Particulars ||Year ended March 31 |
| ||2021 ||% of revenue ||2020 ||% of revenue ||YoY growth (%) |
|Revenue from operations ||100472 ||100.0 ||90791 ||100.0 ||10.7 |
|Gross profit ||35059 ||34.9 ||30059 ||33.1 ||16.6 |
|Selling and marketing expenses ||4627 ||4.6 ||4711 ||5.2 ||(1.8) |
|General and administration expenses ||5810 ||5.8 ||5974 ||6.6 ||(2.7) |
|Operating profit ||24622 ||24.5 ||19374 ||21.3 ||27.1 |
|Profit before tax ||26628 ||26.5 ||22007 ||24.2 ||21.0 |
|Net profit ||19423 ||19.3 ||16639 ||18.3 ||16.7 |
|Profit attributable to owners of the Company ||19351 ||19.3 ||16594 ||18.3 ||16.6 |
|Earnings per equity share || || || || || |
|Basic ||45.61 || ||38.97 || ||17.0 |
Refer to the notes under the table Results of our operations andstate of affairs' for factors impacting net profit and basic EPS.
Based on Ind AS consolidated financial statements
(4) EURS Includes enterprises in Energy Utilities Resourcesand Services (5) MFG Includes enterprises in Manufacturing (6) Hi-Tech Includes enterprises in Hi-Tech (7) LS Includes enterprises in Life Sciences andHealthcare
(8) Others Includes segments of businesses in India JapanChina Infosys Public Services and other enterprises in public services
Global health pandemic from COVID-19
In fiscal 2020 when the COVID-19 pandemic first broke Infosys swiftlyreacted by providing the required support to the workforce clients and the community.From setting up a core team to monitor the situation closely and staying in constant touchwith the local authorities sharing timely updates with the global employee base toenabling the near-seamless transition to the remote mode of work the Company scaledup its efforts quickly and restored normalcy of operations. Central to these efforts wasthe need to ensure the physical safety and mental wellbeing of our global workforce. Inthe early months of the pandemic through its employee repatriation effort Infosysmanaged the evacuation of 1865 employees and 1165 members of their families from 35countries a one-of-its-kind operation by a company. Fiscal 2021 has seen the healthcrisis deepen and the world's attention is focused on India's response to it.With so many global businesses relying on India's technology services sector to runtheir core operations the industry's resilience has wide-ranging global impact.Corporations along with delivering business continuity for clients must with renewedvigor ensure the wellbeing of their employees and the communities in which they operate.
Today 96.5% of Infosys employees continue to work from home. With amore virulent surge of the pandemic in India Infosys has ramped up its effortssignificantly to mitigate the impact of the virus. We have set up exclusive COVID-19 carecenters across seven Development Center (DC) locations including Bengaluru Pune NCRChennai and Hyderabad and similar centers are on the anvil in the coming weeks acrossall other Infosys locations. We plan to subject to approvals set up similar centers inother Indian cities where we have campuses. We tied up with COVID-19 testing laboratoriesacross India collaborated with emergency ambulance providers in major cities andpartnered with 1500+ hospitals in 240 cities in India to enable treatment for employeesand their families. All medical treatments for COVID-19 are covered under employeeinsurance and employees who have contracted it are allowed 21 days of additional paidleave to recuperate. Employee wellbeing checks are conducted frequently. In the event ofan unfortunate turn Infosys offers support to the grieving family including financialsupport through insurance.
Comprehending the importance of the role played by vaccines in ourfight against the virus we have been working very closely with government authorities andmedical experts to put together various frameworks for the immunization drive to encourageemployees and their family members to get vaccinated. We have created COVID-19 vaccinationcenters across Infosys campuses. Operations have commenced across seven DCs already andwork is in progress in other DCs. We have also collaborated with 130+ hospitals in Indiawhere employees and their families can be vaccinated. Committed as always to holisticemployee wellbeing we have rolled out over 900+ employee initiatives across locationscentered on mental health self-care and prioritizing work-life balance. Infosys'helping hand extends beyond business. We have honored the commitment of Rs 100 crore forCOVID-19 relief in India that we made in March 2020 through the Infosys Foundation. Thiswill help expand the capacity of COVID-care hospital beds increase the supply of oxygenconcentrators and ventilators as well as provide food and funds to migrant laborersimpacted by the lockdowns. We also leveraged our technological expertise creating mobileapplications like Crush Covid RI' and Apthamitra' to help localgovernments in their fight against COVID-19.
Our focus on our client commitments remained unwavering through thisperiod reflecting in the record number of large deals we secured even while workingremotely. With our operations teams ensuring smooth work-from-home processes and remotecollaboration for our 260000+ global workforce we were able to ensure that clientservice-level agreements (SLAs) were met and project milestones delivered on time.However remote working conditions also implied multiplied cybersecurity risks not justfor us but for clients as well. Having been an early adopter of advanced cybersecuritystrategies including the setting up of seven Cyber Defence Centers in India US andEurope we were in a position to minimize threats to our operations as well as offercybersecurity solutions to our clients. We continued to provide critical support toclients in essential services sectors such as banking healthcare and communicationsaround the world. Although travel was ruled out for most of this fiscal we leveragedcloud and other digital transformation offerings to bring in new business ensuringmaximization of benefits to our shareholders.
As an organization our external communication has had to transition tothe new virtual models as well. Events such as the quarterly results analyst meetings andthe Annual General Meeting have all been executed successfully leveraging our in-houseplatforms such as Infosys Meridian. All recruitment drives have also been conductedvirtually. Our online learning platform Lex and virtual classes allow our trainingprograms to continue unaffected with 240000 employees using the platform in fiscal2021. Leveraging initiatives like Skill Tags and Digital Quotient has enabled learning andreskilling of talent to proceed at an incredible pace. Digital Quotient acts as aguide-on-the-go to ensure digital preparedness for our talent while Skill Tags allowemployees to move beyond learning to establish their skill expertise in new-age / nichetechnology spaces. Thanks to structured learning paths made available through Lex therehas been a threefold increase in reskilled talent over the last fiscal.
At Infosys even amid an unprecedented global crisis we continue tobalance success as a business with exemplary governance and responsiveness to the needs ofall our stakeholders.
Capital Allocation Policy
Effective fiscal 2020 the Company expects to return approximately 85%of the free cash flow cumulatively over a five-year period through a combination ofsemi-annual dividends and / or share buyback and / or special dividends subject toapplicable laws and requisite approvals if any. Free cash flow is defined as net cashprovided by operating activities less capital expenditure as per the ConsolidatedStatement of Cash Flows prepared under IFRS. Dividend and buyback include applicabletaxes.
In line with the Capital Allocation Policy the Board at its meetingheld on April 14 2021 approved the buyback of equity shares from the open market routethrough the Indian stock exchanges amounting to Rs 9200 crore (Maximum Buyback Sizeexcluding buyback tax) at a price not exceeding Rs 1750 per share (Maximum BuybackPrice) subject to shareholders' approval in the ensuing Annual General Meeting(AGM). During the year the Company paid an interim dividend of Rs 12 per share andannounced a final dividend of Rs 15 per share subject to shareholders' approval inthe ensuing AGM. After returning the above amounts the Company would have returnedapproximately 83% of the free cash flow for fiscal 2020 and fiscal 2021 through dividendsand buybacks in line with the Capital Allocation Policy announced in July 2019.
The Capital Allocation Policy is available on our website athttps://www.infosys.com/investors/corporate-governance/documents/capital-allocation-policy.pdf.
Our principal sources of liquidity are cash and cash equivalentsinvestments and the cash flow that we generate from our operations. We continue to bedebt-free and maintain sufficient cash to meet our strategic and operational requirements.We understand that liquidity in the Balance Sheet has to balance between earning adequatereturns and the need to cover financial and business requirements. Liquidity enables us tobe agile and ready for meeting unforeseen strategic and business needs. As of March 312021 we had Rs 30660 crore in working capital on a standalone basis and Rs 36868 croreon a consolidated basis.
Consolidated cash and investments stand at Rs 30764 crore on astandalone basis and Rs 38660 crore on a consolidated basis as at March 31 2021 asagainst Rs 21321 crore on a standalone basis and Rs 27276 crore on a consolidated basisas on March 31 2020.
Consolidated cash and investments on both standalone and consolidatedbasis include deposits with banks and financial institutions with high credit ratings byinternational and domestic credit rating agencies. As a result liquidity risk of cash andcash equivalents is limited. Ratings are monitored periodically and we have consideredthe latest available credit information to the extent available in view of COVID-19 as atthe date of approval of the financial statements. Liquid assets also include investmentsin liquid mutual fund units fixed maturity plan securities certificates of deposit(CDs) commercial paper quoted bonds issued by government and quasi-governmentorganizations and non-convertible debentures. CDs represent marketable securities ofbanks and eligible financial institutions for a specified time period with high creditrating given by domestic credit rating agencies. Investments made in non-convertibledebentures are issued by government-owned institutions and financial institutions withhigh credit rating. We invest after considering counterparty risks based on multiplecriteria including Tier I capital capital adequacy ratio credit rating profitabilityNPA levels and deposit base of banks and financial institutions. The details of theseinvestments are disclosed under the non-current and current investments'section in the Standalone and Consolidated financial statements in this Annual Report.
Capital expenditure on tangible assets standalone
This year on a standalone basis additions to tangible assets was Rs2015 crore. This comprises Rs 1039 crore in infrastructure Rs 975 crore for investmentin computer equipment and Rs 1 crore in vehicles.
In the previous year we had additions to tangible assets of
Rs 3035 crore. This comprised Rs 2263 crore in infrastructure
Rs 765 crore for investment in computer equipment and
Rs 7 crore in vehicles.
Capital expenditure on tangible assets consolidated
This year on a consolidated basis additions to tangible assets was Rs2231 crore. This comprises Rs 1071 crore in infrastructure Rs 1159 crore in computerequipment and
Rs 1 crore in vehicles.
In the previous year we had additions to tangible assets of
Rs 3437 crore. This comprised Rs 2500 crore in infrastructure
Rs 930 crore for investment in computer equipment and
Rs 7 crore in vehicles.
This year on a standalone basis additions to right-of-use (ROU)assets was Rs 1109 crore. This comprises Rs 1017 crore in land and buildings and Rs 92crore in computer equipment. In the previous year we had additions to ROU assets of Rs787 crore. This comprised Rs 738 crore in land and buildings and
Rs 49 crore in computer equipment.
This year on a consolidated basis additions to ROU assets was Rs1394 crore. This comprises Rs 1241 crore in land and buildings Rs 140 crore in computerequipment and
Rs 13 crore in vehicles.
In the previous year we had additions to ROU assets of
Rs 1120 crore. This comprised Rs 1065 crore in land and buildings Rs49 crore for investment in computer equipment and Rs 6 crore in vehicles.
The Company recommended / declared dividend as under:
| ||Fiscal 2021 ||Fiscal 2020 |
| ||Dividend per Dividend payout ||Dividend per Dividend payout |
| ||share (in Rs) ||(in Rs crore) ||share (in Rs) ||(in Rs crore) |
|Interim dividend ||12.00 ||5112 ||8.00 ||4107 |
|Final dividend ||(1) 15.00 ||6391 ||9.50 ||4046 |
|Total dividend ||27.00 || ||17.50 || |
|Payout ratio (interim and final dividend) ||(2) 52.2% || ||(2) 53.5% || |
Note: Interim dividend payout for fiscal 2020 includes dividenddistribution tax.
(1) Recommended by the Board of Directors at its meeting held on April14 2021. The payment is subject to the approval of the shareholders at the ensuing AGM ofthe Company to be held on June 19 2021. The record date for the purposes of the finaldividend will be June 01 2021 and will be paid on June 25 2021.
(2) Our present Capital Allocation Policy is to pay approximately 85%of the free cash flow cumulatively over a five-year period through a combination ofsemi-annual dividends and / or share buyback and / or special dividends subject toapplicable laws and requisite approvals if any. Free cash flow is defined as net cashprovided by operating activities less capital expenditure as per the ConsolidatedStatement of Cash Flows prepared under IFRS.
Particulars of loans guarantees or investments
Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 form part of the Notes to the financial statements provided in thisAnnual Report.
Transfer to reserves
We do not propose to transfer any amount to general reserve ondeclaration of dividend.
We have not accepted any fixed deposits including from the publicand as such no amount of principal or interest was outstanding as of the Balance Sheetdate.
Particulars of contracts or arrangements made with related parties
There were no contracts arrangements or transactions entered intoduring fiscal 2021. As required under the Companies Act 2013 the prescribed Form AOC-2is appended as Annexure 2 to the Board's report.
Management's discussion and analysis
In terms of the provisions of Regulation 34 of the Listing Regulationsthe Management's discussion and analysis is set out in this Annual Report.
Risk management report
In terms of the provisions of Section 134 of the Companies Act 2013 aRisk management report is set out in this Annual Report.
The details of the policies approved and adopted by the Board asrequired under the Companies Act 2013 and SEBI regulations are provided in Annexure 8 tothe Board's report.
Material changes and commitments affecting financial position betweenthe end of the financial year and date of the report
The Board at its meeting held on April 14 2021 approved the proposalof buyback of equity shares. The details of the buyback together with its implications onthe Company's financial position are explained under the Capital AllocationPolicy' section of this report and the financial statements for the year ended March31 2021.
There have been no other material changes and commitments which affectthe financial position of the Company that have occurred between the end of the financialyear to which the financial statements relate and the date of this report.
2. Business description
Our strategic objective is to build a sustainable and resilientorganization that remains relevant to the agenda of our clients while creating growthopportunities for our employees generating profitable returns for our investors andcontributing to the communities that we operate in. Our clients and prospective clientsare faced with transformative business opportunities due to advances in software andcomputing technology. These organizations are dealing with the challenge of having toreinvent their core offerings processes and systems rapidly and position themselves asdigitally enabled'. The current economic climate and volatility resulting fromthe COVID-19 pandemic in their operations has accelerated their adoption of digitaltechnologies to enhance organizational resilience get competitive advantage andoptimize cost structures. The journey to the digital future requires not just anunderstanding of new technologies and new ways of working but a deep appreciation ofexisting technology landscapes business processes and practices. Our strategy is to be anavigator for our clients as they ideate plan and execute on their journey to a digitalfuture. In fiscal 2021 we continued to execute our four-pronged strategy to strengthenour relevance to clients and drive accelerated value creation. We believe the investmentswe have made and continue to make in our strategy will enable us to advise and help ourclients as they tackle these market conditions especially in the areas of digitization ofprocesses migration to cloud-based technologies workplace transformation business modeltransformation data analytics enhanced cybersecurity controls and cost structureoptimization in IT. Further we have successfully enabled our employees worldwide to workremotely and securely thus achieving the operational stability to deliver on clientcommitments and ensuring our own business continuity.
In fiscal 2021 we launched our integrated cloud offering InfosysCobaltTM bringing together 14000+ cloud assets 200+ solution blueprints and an array ofecosystem alliances. Infosys CobaltTM is helping enterprises to securely access cloudcapabilities with the assurance of single-point accountability for outcomes. We alsolaunched Infosys Applied AI to help enterprises adopt a comprehensive approach and roadmapto scaling enterprise-grade AI for their businesses.
For details of our continued investments and outcomes of our strategicinitiatives please refer to the Management's Discussion and Analysis section of thisAnnual Report.
Our go-to-market business units are organized as:
Financial Services and Insurance
Life Sciences and Healthcare
Retail Consumer Packaged Goods and Logistics
Communications Telecom OEM and Media
Energy Utilities Resources and Services
Others which includes India Japan China Infosys PublicServices and other Public Service enterprises
Our solutions have been primarily classified as digital and core.
Application management services
Proprietary application development services
Independent validation solutions
Product engineering and management
Infrastructure management services
Traditional enterprise application implementation
Support and integration services
Our products and platforms include:
Stater Mortgage Servicing Platform
We added 0.86 million sq. ft. of physical infrastructure space duringthe year. The total available space as on March 31 2021 stands at 52.83 million sq. ft.We have presence in more than 50 countries across 234 locations as on March 31 2021.
Mergers and acquisitions
Infosys has a systematic M&A approach aimed to strengthen digitalservices capabilities deepen industry expertise and expand geographical footprint.Focused on executing Infosys' Agile Digital strategy during the year the Companycompleted three acquisitions:
GuideVision s.r.o. a leading ServiceNow Elite Partner in Europeaugmenting Infosys CobaltTM portfolio of cloud services and strengthening nearshoredelivery presence on October 1 2020
Kaleidoscope Animations Inc. a US-based product design anddevelopment firm strengthening presence in Medical devices Consumer and Industrialmarkets on October 9 2020
Beringer Commerce Inc. and Beringer Capital Digital Group Inc.collectively known as Blue Acorn iCi an award-winning Adobe Platinum partner in the USand a leader in digital customer experience commerce and analytics on October 27 2020These acquisitions through Infy Consulting Company Ltd (a_ wholly-owned subsidiary ofInfosys Consulting Holding AG) and Infosys Nova Holdings LLC (a wholly-owned subsidiary ofInfosys Limited) were made for a total consideration of Rs 1407_ crore comprising a cashconsideration of Rs 1307_crore and contingent consideration with an estimated fair valueof Rs 100 crore as on the date of acquisition. Refer to Note 2.1 of the Consolidatedfinancial statements for further details of these acquisitions.
We along with our subsidiaries provide consulting technologyoutsourcing and next-generation digital services. At the beginning of the year we had 23direct subsidiaries and 52 step-down subsidiaries. As on March 31 2021 we have 24 directsubsidiaries and 62 step-down subsidiaries. The changes in subsidiaries during the year isincluded in the
Standalone financial statements of the Company.
During the year the Board of Directors reviewed the affairs of thesubsidiaries. In accordance with Section 129(3) of the Companies Act 2013 we haveprepared the Consolidated financial statements of the Company which form part of thisAnnual Report. Further a statement containing the salient features of the financialstatements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 1 tothe Board's report. The statement also provides details of the performance andfinancial position of each of the subsidiaries along with the changes that occurredduring fiscal 2021. In accordance with Section 136 of the Companies Act 2013 the auditedfinancial statements including the Consolidated financial statements and relatedinformation of the Company and audited accounts of each of its subsidiaries are availableon our website www.infosys.com.
3. Human resources management
Our professionals are our most important assets. We are committed tohiring and retaining the best talent and being among the industry's leadingemployers. For this we focus on promoting a collaborative transparent and participativeorganization culture and rewarding merit and sustained high performance. Our humanresource management focuses on allowing our employees to develop their skills grow intheir career and navigate their next.
Internal complaints committee
Infosys' goal has always been to create an open and safe workplacefor every employee to feel empowered irrespective of gender sexual preferences andother factors and contribute to the best of their abilities. Towards this the Companyhas set up the Anti-Sexual Harassment Initiative (ASHI) which proudly completes 21 yearsof enabling a positive and safe work environment for our employees. Our ASHI practiceshave set an industry benchmark as it ranked first among 300+ companies that participatedin an external survey on the best anti-sexual harassment initiatives in 2017 2019 and2020. Infosys has constituted an Internal Committee (IC) in all the development centers ofthe Company across India to consider and resolve all sexual harassment complaints reportedby women. The IC has been constituted as per the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the committee includes externalmembers from NGOs or with relevant experience. Investigations are conducted and decisionsmade by the IC at the respective locations and a senior woman employee is the presidingofficer over every case. Half of the total members of the IC are women. The role of the ICis not restricted to mere redressal of complaints but also encompasses prevention andprohibition of sexual harassment. In the last one year the IC has worked extensively oncreating awareness on relevance of sexual harassment issues in the new normal by usingbrand-new and innovative measures to help employees understand the forms of sexualharassment while working remotely. The details of sexual harassment complaints that werefiled disposed of and pending during the financial year are provided in the BusinessResponsibility Report of this Annual report.
Particulars of employees
The Company had 204396 employees on standalone basis and 259619employees on consolidated basis as of March 31 2021. The percentage increase inremuneration ratio of remuneration of each director and key managerial personnel (KMP)(as required under the Companies Act 2013) to the median of employees' remunerationand the list of top 10 employees in terms of remuneration drawn as required under
Section 197(12) of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 form part ofAnnexure 3 to this Board's report. The statement containing particulars of employeesemployed throughout the year and in receipt of remuneration of Rs 1.02 crore or more perannum and employees employed for part of the year and in receipt of remuneration of Rs 8.5lakh or more per month as required under Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided in a separate exhibit forming part of this report and is available onthe website of the Companyfiat https://www.infosys.com/investors/reports-filings/Documents/exhibitboards-report2021.pdf. The Annual Report and accounts arebeing sent to the shareholders excluding the aforesaid exhibit. Shareholders interested inobtaining this information may access the same from the Company website. In accordancewith Section 136 of the Companies Act 2013 this exhibit is available for inspection byshareholders through electronic mode.
1 The employees mentioned in the aforesaid exhibit have / had permanentemployment contracts with the Company.
2. The employees are neither relatives of any directors of the Companynor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
3. The details of employees posted outside India and in receipt of aremuneration of Rs 60 lakh or more per annum or Rs 5 lakh or more a month can be madeavailable on specific request.
Employee stock options / Restricted Stock Units (RSUs)
The Company grants share-based benefits to eligible employees with aview to attracting and retaining the best talent encouraging employees to alignindividual performances with Company objectives and promoting increased participation bythem in the growth of the Company.
Infosys Expanded Stock Ownership Program 2019 ("the 2019Plan")
On June 22 2019 pursuant to approval by the shareholders in the AGMthe Board has been authorized to introduce offer issue and provide share-basedincentives to eligible employees of the Company and its subsidiaries under the 2019 Plan.The maximum number of shares under the 2019 Plan shall not exceed 50000000 equityshares. To implement the 2019 Plan up to 45000000 equity shares may be issued by wayof secondary acquisition of shares by the Infosys Expanded Stock Ownership Trust. The RSUsgranted under the 2019 Plan shall vest based on the achievement of defined annualperformance parameters as determined by the administrator (the nomination and remunerationcommittee). The performance parameters will be based on a combination of relative TotalShareholder Return (TSR) against selected industry peers and certain broader marketdomestic and global indices and operating performance metrics of the Company as decided bythe administrator. Each of the above performance parameters will be distinct for thepurposes of calculation of the quantity of shares to vest based on performance. Theseinstruments will generally vest between a minimum of one to a maximum of three years fromthe grant date.
2015 Stock Incentive Compensation Plan ("the_2015_Plan")
On March 31 2016 pursuant to the approval by the shareholders throughpostal ballot the Board was authorized to introduce offer issue and allot share-basedincentives to eligible employees of the Company and its subsidiaries under the 2015 Plan.The maximum number of shares under the 2015 Plan shall not exceed 24038883 equityshares (not adjusted for bonus issue). These instruments will generally vest over a periodof four years and the Company expects to grant the instruments under the 2015 Plan overthe period of four to seven years. These RSUs and stock options shall be exercisablewithin the period as approved by the nomination and remuneration committee. The exerciseprice of the RSUs will be equal to the par value of the shares and the exercise price ofthe stock options would be the market price as on the date of grant.
Consequent to the September 2018 bonus issue all the then outstandingoptions granted under the stock option plan have been adjusted for bonus shares. The totalnumber of equity shares and American Depositary Receipts (ADRs) to be allotted to theemployees of the Company and its subsidiaries under the 2015 Plan does not cumulativelyexceed 1% of the issued capital. For the shares and ADRs issued under the 2019 Plan thecumulative amount does not exceed 1.15% of the issued capital. The 2019 Plan and 2015 Planare in compliance with SEBI (Share Based Employee Benefits) Regulations 2014 as amendedfrom time to time and there has been no material change to the plans during the fiscal.
The details of the 2019 Plan and 2015 Plan including terms ofreference and the requirement specified under Regulation 14 of the SEBI (Share BasedEmployee Benefits) Regulations 2014 are available on the Company's website at https://www.infosys.com/investors/reports-filings/Documents/disclosures-pursuant-SEBI-regulations2021.pdf. The details of the 2019 Plan and2015 Plan form part of the Notes to accounts of the financial statements in this AnnualReport.
4. Corporate governance
Our corporate governance philosophy
Our corporate governance practices are a reflection of our value systemencompassing our culture policies and relationships with our stakeholders. Integrity andtransparency are key to our corporate governance practices to ensure that we gain andretain the trust of our stakeholders at all times. Corporate governance is aboutmaximizing shareholder value legally ethically and sustainably. At Infosys the Boardexercises its fiduciary responsibilities in the widest sense of the term. Our disclosuresseek to attain the best practices in international corporate governance. We also endeavorto enhance long-term shareholder value and respect minority rights in all our businessdecisions.
Our Corporate governance report for fiscal 2021 forms part of thisAnnual Report.
The Company recognizes and embraces the importance of a diverse boardin its success. We believe that a truly diverse board will leverage differences inthought perspective knowledge skill regional and industry experience cultural andgeographical backgrounds age ethnicity race and gender that will help us retain ourcompetitive advantage. The Board Diversity Policy adopted by the Board sets out itsapproach to diversity. The policy is available on our website athttps://www.infosys.com/investors/corporate-governance/documents/board-diversity-policy.pdf. Additional details on Board diversity are availablein the Corporate governance report that forms part of this Annual Report.
Number of meetings of the Board
The Board met seven times during the financial year. The meetingdetails are provided in the Corporate governance report that forms part of this AnnualReport. The maximum interval between any two meetings did not exceed 120 days asprescribed by the Companies Act 2013.
Policy on directors' appointment and remuneration
The current policy is to have an appropriate mix of executivenon-executive and independent directors to maintain the independence of the Board andseparate its functions of governance and management. As of March 31 2021 the Board hadnine members two of whom are executive directors a non-executive and non-independentdirector and six independent directors. Two of the independent directors of the Board arewomen. The details of Board and committee composition tenure of directors areas ofexpertise and other details are available in the Corporate governance report that formspart of this Annual Report. The policy of the Company on directors' appointment andremuneration including the criteria for determining qualifications positive attributesindependence of a director and other matters as required under Sub-section (3) of Section178 of the Companies Act 2013 is available on our website athttps://www.infosys.com/investors/corporate-governance/documents/nomination-remuneration-policy.pdf.We affirm that the remuneration paid to the directors is as per the terms laid out in theNomination and Remuneration Policy of the Company.
Declaration by independent directors
The Company has received necessary declaration from each independentdirector under Section 149(7) of the Companies Act 2013 that he / she meets the criteriaof independence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25of the Listing Regulations.
The nomination and remuneration committee engaged Egon Zehnderexternal consultants to conduct Board evaluation for the year. The evaluation of all thedirectors committees Chairman of the Board and the Board as a whole was conducted basedon the criteria and framework adopted by the Board. The Board evaluation process wascompleted during fiscal 2021. The evaluation parameters and the process have beenexplained in the Corporate governance report.
Familiarization program for independent directors
All new independent directors inducted into the Board attend anorientation program. The details of the training and familiarization program are providedin the Corporate governance report. Further at the time of the appointment of anindependent director the Company issues a formal letter of appointment outlining his /her role function duties and responsibilities. The format of the letter of appointmentis available on our website at https://www.infosys.com/investors/corporate-governance/Documents/appointment-independent-director.pdf.
Directors and KMP
Uri Levine was appointed to the Board as an independent directoreffective April 20 2020 for a period of three years and the same was approved by theshareholders at the 39th AGM held on June 27 2020. Bobby Parikh was appointed to theBoard as an additional and independent director effective July 15 2020 for a period ofthree years subject to the approval of shareholders. In the opinion of the Board he is awell-respected business leader who brings a wealth of experience and financial acumen tothe Infosys Board. His vast experience in the realm of corporate governance will greatlybenefit the Company. Further he possesses integrity and relevant proficiency which willbring tremendous value to the Board and to the Company. The Board recommends hisappointment to the shareholders. The notice convening the 40th AGM to be held on June 192021 sets out the details. Chitra Nayak was appointed to the Board as an additional andindependent director effective March 25 2021 for a period of three years subject to theapproval of shareholders. In the opinion of the Board she brings Silicon Valleyexperience expertise integrity and proficiency that will provide valuable insights asInfosys pivots its service offerings in consulting and digital solutions to helpbusinesses in their strategic intent of digital transformation. The Board recommends herappointment to the shareholders. The notice convening the 40th AGM to be held on June 192021 sets out the details.
Director liable to retire by rotation
As per the provisions of the Companies Act 2013 U.B. Pravin Rao COOand Whole-time Director whose office is liable to retire at the ensuing AGM beingeligible seeks reappointment. Based on performance evaluation and the recommendation ofthe nomination and remuneration committee the Board recommends his reappointment. U.BPravin Rao will be superannuating on December 12 2021 as per the Company's policy.The notice convening the 40th AGM to be held on June 19 2021 sets out the details.
Reappointment of independent director
Michael Gibbs was appointed as an independent director for the firstterm of three years effective July 13 2018. His office of directorship is due forretirement on July 12 2021. Based on the recommendation of the nomination andremuneration committee and after taking into account the performance evaluation of hisfirst term of three years and considering the knowledge acumen expertise experience andthe substantial contribution the committee has recommended the appointment of MichaelGibbs to the Board for a second term of five years. The Board at its meeting held onApril 14 2021 approved the reappointment of Michael Gibbs as an independent director ofthe Company with effect from July 13 2021 to July 12 2026 whose office shall not beliable to retire by rotation. The Board recommends his reappointment to the shareholders.The notice convening the 40th AGM to be held on June 19 2021 sets out the details.
Retirements and resignations
D.N. Prahlad an independent director resigned as a member of theBoard effective April 20 2020 to devote more time to his other business commitments. Thedisclosure in this regard is available at https://www.infosys.com/newsroom/press-releases/2020/independent-director-stepping-down-20april2020.html.
Dr. Punita Kumar-Sinha an independent director on completion of hertenure retired as a member of the Board effective January 13 2021. The disclosure inthis regard is available at https://www.infosys.com/investors/documents/retirement-independent-director-13jan2021.pdf.
Committees of the Board
As on March 31 2021 the Board had five committees: the auditcommittee the corporate social responsibility committee the nomination and remunerationcommittee the risk management committee and the stakeholders relationship committee. Amajority of the committees consists entirely of independent directors. The Board at itsmeeting held on April 14 2021 instituted the Environment Social and Governance (ESG)committee. The committee consists entirely of independent directors. During the year allrecommendations made by the committees were approved by the Board.
A detailed note on the composition of the Board and its committees isprovided in the Corporate governance report.
Internal financial control and its adequacy
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company's policiessafeguarding of its assets prevention and detection of fraud error reporting mechanismsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures. For more details refer to the Internal control systems andtheir adequacy' section in the Management's discussion and analysis which formspart of this Annual Report.
In the light of the COVID-19 pandemic fiscal 2021 was a challengingyear for businesses globally. At Infosys while our employees operated efficiently as aremote workforce we continue to keep a close tab on our cybersecurity posture. Wecontinued our efforts to keep ourselves up to date with cybersecurity events globally soas to achieve higher compliance and its continued sustenance. We continue to be certifiedagainst the Information Security Management
System (ISMS) Standard ISO 27001:2013. During the year our focus onour cybersecurity personnel's training and reskilling went ahead as planned togetherwith our initiatives on improving cybersecurity processes and technologies. Our periodicstakeholder interactions ensured that we have sponsorship from the senior management andall critical stakeholders in a timely manner.
Significant and material orders
There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and the Company'soperations in future.
Reporting of frauds by auditors
During the year under review neither the statutory auditors nor thesecretarial auditor has reported to the audit committee under Section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees the details of which would need to be mentioned in the Board's report.
In accordance with the Companies Act 2013 the annual return in theprescribed format is available at https://www.infosys.com/investors/reports-filings/annual-report/annual-reports.html.
The Company complies with all applicable secretarial standards issuedby the Institute of Company Secretaries of India.
Listing on stock exchanges
The Company's shares are listed on BSE Limited and the NationalStock Exchange of India Limited and its ADSs are listed on the New York Stock Exchange(NYSE).
Investor Education and Protection Fund (IEPF)
During the year the Company has transferred the unclaimed andun-encashed dividends of Rs 17557643. Further 16264 corresponding shares on whichdividends were unclaimed for seven consecutive years were transferred as per therequirements of the IEPF Rules. The details of the resultant benefits arising out ofshares already transferred to the IEPF year-wise amounts of unclaimed / un-encasheddividends lying in the unpaid dividend account up to the year and the correspondingshares which are liable to be transferred are provided in the Shareholder informationsection of the Corporate governance report and are also available on our website atwww.infosys.com/IEPF.
Directors' responsibility statement
The financial statements are prepared in accordance with the IndianAccounting Standards (Ind AS) under the historical cost convention on accrual basis exceptfor certain financial instruments which are measured at fair values the provisions ofthe Companies Act 2013 and guidelines issued by SEBI. The Ind AS are prescribed underSection 133 of the Companies Act 2013 read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015 and Companies (Indian Accounting Standards) AmendmentRules 2016. Accounting policies have been consistently applied except where anewly-issued accounting standard is initially adopted or a revision to an existingaccounting standard requires a change in the accounting policy hitherto in use.
The directors confirm that:
In preparation of the annual accounts for the financial yearended March 31 2021 the applicable accounting standards have been followed and there areno material departures.
They have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period.
They have taken proper and sufficient care towards themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
They have prepared the annual accounts on a going concern basis.
They have laid down internal financial controls which areadequate and are operating effectively.
They have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems are adequate and operatingeffectively.
5. Audit reports and auditors
The Auditors' Report for fiscal 2021 does not contain anyqualification reservation or adverse remark. The Report is enclosed with the financialstatements in this Annual Report.
The Secretarial Auditors' Report for fiscal 2021 does notcontain any qualification reservation or adverse remark. The Secretarial Auditors'Report is enclosed as Annexure 5 to the Board's report.
The Auditor's certificate confirming compliance withconditions of corporate governance as stipulated under Listing Regulations for fiscal2021 is enclosed as Annexure 4 to the Board's report.
The auditor's certificate on the implementation ofshare-based schemes in accordance with SEBI (Share Based Employee Benefits) Regulations2014 will be made available at the AGM electronically.
Under Section 139 of the Companies Act 2013 and the Rules madethereunder it is mandatory to rotate the statutory auditors on completion of the maximumterm permitted under the provisions of Companies Act 2013. In line with the requirementsof the Companies Act 2013 Deloitte Haskins & Sells LLP Chartered Accountants (Firmregistration number 117366 W/W 100018) ("Deloitte") was appointed as thestatutory auditors of the Company to hold office for a period of five consecutive yearsfrom the conclusion of the 36th AGM of the Company held on June 24 2017 till theconclusion of the 41st AGM to be held in 2022. The requirement for the annual ratificationof auditors' appointment at the AGM has been omitted pursuant to Companies(Amendment) Act 2017 notified on May 7 2018.
During the year the statutory auditors have confirmed that theysatisfy the independence criteria required under the Companies Act 2013 the Code ofEthics issued by the Institute of Chartered Accountants of India and the U.S. Securitiesand Exchange Commission and the Public Company Accounting Oversight Board.
Parameshwar G. Hegde of Hegde & Hegde Practicing CompanySecretaries is appointed as secretarial auditor of the Company for fiscal 2022 asrequired under Section 204 of the Companies Act 2013 and Rules thereunder.
Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribedunder the provisions of Section 148(1) of the Companies Act 2013 are not applicable forthe business activities carried out by the Company.
6. Corporate social responsibility (CSR)
Infosys has been an early adopter of CSR initiatives. The Company worksprimarily through the Infosys Foundation towards supporting projects in the areas ofprotection of national heritage restoration of historical sites and promotion of art andculture; destitute care and rehabilitation; environmental sustainability and ecologicalbalance; promoting education and enhancing vocational skills; promoting healthcareincluding preventive healthcare and rural development. In fiscal 2021 the Company'sCSR efforts included COVID-19 relief in multiple states. The Company's CSR Policy isavailable on our website at https://www.infosys.com/investors/corporate-governance/Documents/corporate-social-responsibility-policy.pdf. The annual report on our CSRactivities is appended as Annexure 6 to the Board's report. Infosys also undertakesCSR initiatives outside of India in Australia and the US. The initiatives in the US arecarried out through Infosys Foundation USA. The said initiatives are over and above thestatutory requirement. The highlights of the initiatives undertaken by the Company theInfosys Foundation and Infosys Foundation USA form part of this Annual Report.
7. Conservation of energy research and development technologyabsorption foreign exchange earnings and outgo
The particulars as prescribed under Sub-section (3)(m) of Section 134of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 are enclosedas Annexure 7 to the Board's report.
Business Responsibility Report (BRR)
The Listing Regulations mandate the inclusion of the BRR as part of theAnnual Report for the top 1000 listed entities based on market capitalization. Incompliance with the Listing Regulations we have integrated BRR disclosures into ourAnnual Report. We also publish a GRI Standards-based Sustainability / ESG Report annually.The report is independently assured by DNV GL. Details are available on our website athttps://www.infosys.com/sustainability/documents/infosys-esg-report-2020-21.pdf.
Environmental Social and Governance (ESG)
2020 marked a milestone year for the Company. We turned carbon-neutral30 years ahead of the global targets fulfilling the vision of our founders towardssustainable growth. In October 2020 we launched our ESG vision and ambitions for 2030cementing our commitment to values-based progress. The ESG committee of the Board formedin April 2021 is chaired by Lead Independent Director Kiran Mazumdar-Shaw and includesindependent directors Chitra Nayak and Uri Levine as its members.
We thank our clients vendors investors bankers employee volunteersand trustees of the Infosys Foundation Infosys Foundation USA and Infosys ScienceFoundation for their continued support during the year. We place on record ourappreciation for the contribution made by our employees at all levels. Our consistentgrowth was made possible by their hard work solidarity cooperation and support. We thankthe governments of various countries where we have our operations. We thank the Governmentof India particularly the Ministry of Labour and Employment the Ministry of Environmentand Forests the Ministry of New and Renewable Energy the Ministry of Communications theMinistry of Electronics and Information Technology (Dept of IT) the Ministry of Commerceand Industry the Ministry of Finance the Ministry of Corporate Affairs the CentralBoard of Direct Taxes the Central Board of Indirect Taxes and Customs GST authoritiesthe Reserve Bank of India Securities and Exchange Board of India (SEBI) variousdepartments under the state governments and union territories the Software TechnologyParks (STPs) / Special Economic Zones (SEZs) Bengaluru Bhubaneswar ChandigarhChennai Gurugram Hubballi Hyderabad Indore Jaipur Kochi Kolkata Mangaluru MohaliMumbai Mysuru Nagpur Noida Pune and Thiruvananthapuram and other governmentagencies for their support and look forward to their continued support in the future. Wealso thank the US federal government the U.S. Securities and Exchange Commission theInternal Revenue Service and various state governments especially those of IndianaRhode Island Connecticut Texas Arizona and North Carolina.
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for and on behalf of the Board of Directors
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|Bengaluru ||Nandan M. Nilekani ||Salil Parekh |
|April 14 2021 ||Chairman ||Chief Executive Officer and Managing Director |