The Board of Directors hereby submits the report of the business and operations of yourCompany ("the Company" or "Infosys") along with the audited financialstatements for the financial year ended March 31 2022. The consolidated performance ofthe Company and its subsidiaries has been referred to wherever required.
1. Results of our operations and state of affairs
| || || |
in Rs. crore except per equity share data
|Particulars || |
| || |
For the year ended March 31
|YoY growth || |
For the year ended March 31
|YoY growth |
| ||2022 ||2021 ||(%) ||2022 ||2021 ||(%) |
|Revenue from operations ||103940 ||85912 ||21.0 ||121641 ||100472 ||21.1 |
|Other income net ||3224 ||2467 ||30.7 ||2295 ||2201 ||4.3 |
|Total income ||107164 ||88379 ||21.3 ||123936 ||102673 ||20.7 |
|Expenses || || || || || || |
|Cost of sales ||69629 ||55541 ||25.4 ||81998 ||65413 ||25.4 |
|Selling and marketing expenses ||4125 ||3676 ||12.2 ||5156 ||4627 ||11.4 |
|General and administration expenses*1' ||4787 ||4559 ||5.0 ||6472 ||5810 ||11.4 |
|Total expenses ||78541 ||63776 ||23.2 ||93626 ||75850 ||23.4 |
|Profit / loss before finance cost and tax expenses ||28623 ||24603 ||16.3 ||30310 ||26823 ||13.0 |
|Finance cost ||128 ||126 ||1.6 ||200 ||195 ||2.6 |
|Profit before tax ||28495 ||24477 ||16.4 ||30110 ||26628 ||13.1 |
|Profit before tax (% of revenue) ||27.4 ||28.5 || ||24.8 ||26.5 || |
|Tax expense ||7260 ||6429 ||12.9 ||7964 ||7205 ||10.5 |
|Profit after tax ||21235 ||18048 ||17.7 ||22146 ||19423 ||14.0 |
|Profit after tax (% of revenue) ||20.4 ||21.0 || ||18.2 ||19.3 || |
|Total other comprehensive income / (loss) net of tax ||(48) ||191 || ||182 ||306 || |
|Total comprehensive income for the year attributable to the owners of the Company ||21187 ||18239 || ||22293 ||19651 || |
|Profit attributable to owners of the Company ||21235 ||18048 || ||22110 ||19351 || |
|Non-controlling interests ||- ||- || ||36 ||72 || |
|Earnings per share (EPS) || || || || || || |
|Basic ||50.27 ||42.37 ||18.6 ||52.52 ||45.61 ||15.2 |
|Diluted ||50.21 ||42.33 ||18.6 ||52.41 ||45.52 ||15.1 |
1 crore = 10 million
The above figures are extracted from the audited standalone and consolidated financialstatements as per Indian Accounting Standards (Ind AS).
Equity shares are at par value of Rs.5 per share.
Includes impairment of capital assets of Rs.283 crore under CSR expense inthe Standalone financial statements
of the Company consequent to the Companies(Corporate Social Responsibility Policy) Amendment Rules 2021. During the year endedMarch 31 2021 the Company intended to transfer its CSR capital assets created prior toJanuary 2021 to a controlled subsidiary and the same has been completed on obtaining therequisite approvals in the year ended March 31 2022. The recoverable amount of capitalassets is expected to exceed the carrying amount including in the period subsequent to thetransfer to a controlled subsidiary hence no impairment charge has been recorded in the Consolidatedfinancial statements.
| || |
in Rs. crore except equity share data
|Particulars || |
| || |
As at March 31
As at March 31
| ||2022 ||2021 ||2022 ||2021 |
|Net current assets ||27461 ||30660 ||33582 ||36868 |
|Property plant and equipment (including capital work-in-progress) ||11795 ||11836 ||13491 ||13482 |
|Right-of-use assets ||3311 ||3435 ||4823 ||4794 |
|Goodwill and other intangible assets ||243 ||234 ||7902 ||8151 |
|Other non-current assets ||31601 ||30152 ||24484 ||21226 |
|Total assets ||99387 ||93939 ||117885 ||108386 |
|Non-current lease liabilities ||3228 ||3367 ||4602 ||4587 |
|Other non-current liabilities ||1877 ||1419 ||3944 ||3152 |
|Retained earnings - Opening balance ||57518 ||52419 ||62643 ||56309 |
|Add: || || || || |
|Profit for the year ||21235 ||18048 ||22110 ||19351 |
|Transfer from Special Economic Zone Re-investment Reserve on utilization ||1012 ||967 ||1100 ||1039 |
|Less: || || || || |
|Dividends ||(12700) ||(9158) ||(12655) ||(9120) |
|Buyback of equity shares (including tax on buyback) ||(8822) ||- ||(8822) ||- |
|Transfer to general reserve ||- ||(1554) ||(10) ||(1554) |
|Transfer to Special Economic Zone Re-investment Reserve ||(2794) ||(3204) ||(3054) ||(3354) |
|Payment towards acquisition of minority interest ||- ||- ||1 ||(28) |
|Retained earnings - Closing balance ||55449 ||57518 ||61313 ||62643 |
|Equity share capital ||2103 ||2130 ||2098 ||2124 |
|Other reserves and surplus(1) ||11750 ||11831 ||10415 ||10243 |
|Other comprehensive income ||4 ||52 ||1524 ||1341 |
|Non-controlling interest ||- ||- ||386 ||431 |
|Total equity ||69306 ||71531 ||75736 ||76782 |
|Total equity and liabilities ||99387 ||93939 ||117885 ||108386 |
Excluding retained earnings
Global health pandemic from COVID-19
At Infosys as we continue in our endeavor to fight waves of the COVID-19 pandemic ourpriority remains the safety and well-being of our employees and business continuity forour clients. Business continuity programs were tested and practiced and the processeswere proven to be resilient. We received the ISO 22301 Business Continuity ManagementSystem certification for being a company with resilient processes.
Considering employee safety as paramount we implemented elaborate support measures foremployees during the three COVID-19 waves in India and at our global locations. Weoperated dedicated COVID Care Centers in 14 cities in India and also established tie-upswith more than 1500 hospitals in 323 cities in India for the treatment of employees andtheir families. We also established a 24x7 war room and help-desk- coordinated supportmeasures such as tie-ups with testing labs and ambulance services providers videoconsultation with doctors COVID leave provision insurance coverage oxygenconcentrators medicines fresh food and counselling support. During the COVID waves weprovided emergency support (hospital beds / ventilators / plasma / oxygen) for over 6100employees / family members and addressed more than 78000 queries for COVID medicalsupport. Some of these support measures were also provided at global locations asrequired.
We also leveraged our technological expertise creating mobile application 'Apthamitra'to help local governments in their fight against COVID-19.
Vaccination efforts: We facilitated Company-sponsored vaccination drives in Indiafor employees and five dependents including booster doses. We arranged vaccinationcenters at our campuses in India and also conducted vaccination camps in major cities forthe benefit of employees working from home away from DC locations. As on March 31202296.1% of employees in India were vaccinated with at least one dose and 90% were fullyvaccinated.
At global locations we encouraged employees to avail vaccinations provided by thegovernments.
Work from home (WFH): At the onset of the pandemic at 2020 to ensure employeesafety and business continuity we were able to transition 99% of employees globally to awork from home arrangement. Further based on client requirements and the COVID situationWFH continued as required in fiscal 2022. We have been able to virtually engage over150000 employees through more than 900 initiatives and employee satisfaction with theseinitiatives has been rated at an all-time high of 91% across locations.
Wellness: Amid these transitions and pandemic-related uncertainties the well-beingof our employees has become a critical focal point. Through concentrated efforts over thelast
24 months we have implemented several well-being initiatives for our employeesglobally including sessions with experts on mental health self-care and women's healthalong with sessions on creating a healthy work-life balance. We have also developed avirtual General Practice service in Europe where employees can schedule videoconsultations without a physical visit.
Client support: Our focus on our client commitments remained unwavering throughthis period reflecting in the record number of large deals we secured even while workingremotely. With our operations teams ensuring smooth WFH processes and remote collaborationfor our 314000+ global workforce we were able to ensure that client service levelagreements (SLAs) were met and project milestones delivered on time. However remoteworking conditions also multiplied cybersecurity risks not just for us but for clientsas well. Being an early adopter of advanced cybersecurity strategies including thesetting up of seven Cyber Defence Centers in India the US and Europe we could minimizethreats to our operations as well as offer cybersecurity solutions to our clients.
We continued to provide critical support to clients around the world in essentialservices such as banking healthcare and communications. Although travel was ruled out formost of the fiscal we leveraged cloud and other digital transformation offerings to bringin new business ensuring maximization of benefits to our shareholders.
Meeting and learning online: As an organization our external communication had totransition to new virtual models as well. Events such as quarterly results analystmeetings and the Annual General Meeting have been executed successfully leveraging ourin-house platforms such as Infosys Meridian.
All recruitment drives have also been conducted virtually. Our online learningplatform Lex and other virtual programs allow our training programs to continueunaffected. In fiscal 2022 the number of employees leveraging Lex rose by 35.5% from theprevious fiscal. Leveraging initiatives like Skill Tags and Digital Quotient has enabledlearning and reskilling of talent to proceed at an incredible pace. Digital Quotient actsas a guide-on-the- go to ensure digital preparedness for our talent while Skill Tagsallow employees to move beyond learning to establish their expertise in new-age / nichetechnology spaces. The number of Skill Tagged employees increased steadily during fiscal2022 growing by 47% over fiscal 2021. Cloud (AWS Azure) SAP and Python continued tofeature as the most sought-after skills for certification. Overall we had more than160000 employees who undertook various certifications.
At Infosys even amid an unprecedented global crisis we continue to balance success asa business with exemplary governance and responsiveness to the needs of all ourstakeholders.
Capital Allocation Policy
Effective fiscal 2020 the Company expects to return approximately 85% of the free cashflow cumulatively over a five-year period through a combination of semi-annual dividendsand / or share buyback and / or special dividends subject to applicable laws andrequisite approvals if any. Free cash flow is defined as net cash provided by operatingactivities less capital expenditure as per the Consolidated Statement of Cash Flowsprepared under IFRS. Dividend and buyback include applicable taxes.
In line with the Capital Allocation Policy the Board at its meeting held on April 142021 approved the buyback of equity shares from the open market route through the Indianstock exchanges amounting to Rs.9200 crore (Maximum Buyback Size excluding buyback tax)at a price not exceeding Rs.1750 per share (Maximum Buyback Price) subject toshareholders' approval in the ensuing Annual General Meeting (AGM).
The shareholders approved the proposal of buyback of equity shares recommended by theBoard of Directors in the AGM held on June 19 2021.
The buyback was offered to all eligible equity shareholders of the Company (other thanthe Promoters the Promoter Group and Persons in Control of the Company) under the openmarket route through the stock exchange. The buyback of equity shares through the stockexchanges commenced on June 25 2021 and was completed on September 8 2021. During thisbuyback period the Company purchased and extinguished a total of 55807337 equityshares from the stock exchanges at a volume weighted average buyback price of Rs.1648.53per equity share comprising 1.31% of the pre-buyback paid-up equity share capital of theCompany. The buyback resulted in a cash outflow of Rs.9200 crore (excluding transactioncosts and tax on buyback). The Company funded the buyback from its free reserves includingSecurities Premium as explained in Section 68 of the Companies Act 2013.
During the year ended March 31 2022 the Company paid an interim dividend of Rs.15 pershare and announced a final dividend of Rs.16 per share subject to shareholders' approvalin the ensuing AGM. After returning the above amounts the Company would have returnedapproximately 73% of the free cash flow for fiscals 2020 2021 and 2022 through dividendsand buybacks in line with the Capital Allocation Policy.
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 equivalents investments and thecash flow that we generate from our operations. We continue to be debt-free and maintainsufficient cash to meet our strategic and operational requirements.
We understand that liquidity in the Balance Sheet has to balance between earningadequate returns and the need to cover financial and business requirements. Liquidityenables us to be agile and ready for meeting unforeseen strategic and business needs.
As of March 312022 we had Rs.27461 crore in working capital on a standalone basisand Rs.33582 crore on a consolidated basis.
Consolidated cash and investments stand at Rs.29950 crore on a standalone basis andRs.37419 crore on a consolidated basis as on March 312022 as against Rs.30764 crore ona standalone basis and Rs.38660 crore on a consolidated basis as on March 31 2021.
Consolidated cash and investments on both standalone and consolidated basis includedeposits with banks and financial institutions with high credit ratings by internationaland domestic credit rating agencies. As a result liquidity risk of cash and cashequivalents is limited. Ratings are monitored periodically. Liquid assets also includeinvestments in liquid mutual fund units fixed maturity plan securities certificates ofdeposit (CDs) commercial paper quoted bonds issued by government and quasi-governmentorganizations and nonconvertible debentures. CDs represent marketable securities of banksand eligible financial institutions for a specified time period with high credit ratinggiven by domestic credit rating agencies. Investments made in non-convertible debenturesare issued by government-owned institutions and financial institutions with high creditrating. We invest after considering counterparty risks based on multiple criteriaincluding Tier-I capital capital adequacy ratio credit rating profitability NPA levelsand deposit base of banks and financial institutions.
The details of these investments are disclosed under the Rs.non-current and currentinvestments' section in the Standalone and Consolidated financial statements in thisIntegrated Annual Report.
Capital expenditure on tangible assets -
This year on a standalone basis additions to tangible assets was Rs.2381 crore. Thiscomprises Rs.1100 crore in infrastructure and Rs.1281 crore for investment in computerequipment.
In the previous year we had additions to tangible assets of Rs.2015 crore. Thiscomprised Rs.1039 crore in infrastructure Rs.975 crore for investment in computerequipment and Rs.1 crore in vehicles.
Capital expenditure on tangible assets - consolidated
This year on a consolidated basis additions to tangible assets was Rs.2716 crore.This comprises Rs.1174 crore in infrastructure and Rs.1542 crore in computer equipment.
In the previous year we had additions to tangible assets of Rs.2231 crore. Thiscomprised Rs.1071 crore in infrastructure Rs.1159 crore for investment in computerequipment and Rs.1 crore in vehicles.
This year on a standalone basis additions to right-of-use (ROU) assets was Rs.374crore. This comprises Rs.306 crore in buildings and Rs.68 crore in computer equipment.
In the previous year we had additions to ROU assets of Rs.1109 crore. This comprisedRs.1017 crore in land and buildings and Rs.92 crore in computer equipment.
This year on a consolidated basis additions to ROU assets was Rs.914 crore. Thiscomprises Rs.449 crore in buildings Rs.459 crore in computer equipment and Rs.6 crore invehicles.
In the previous year we had additions to ROU assets of Rs.1394 crore. This comprisedRs.1241 crore in land and buildings
'140 crore for investment in computer equipment and Rs.13 crore in vehicles.
The Company recommended / declared dividend as under:
| || |
| ||Dividend per share (in Rs.) ||Dividend payout (in Rs. crore) ||Dividend per share (in Rs.) ||Dividend payout (in Rs. crore) |
|Interim dividend ||15.00 ||6308 ||12.00 ||5112 |
|Final dividend ||<'>16.00 ||6731 ||15.00 ||6391 |
|Total dividend ||31.00 || ||27.00 || |
|Payout ratio (interim and final dividend)* ||<2>57.2% || ||52.2% || |
The Company declares and pays dividend in Indian rupees. Companies are required to pay/ distribute dividend after deducting applicable withholding income taxes. The remittanceof dividends outside India is governed by Indian law on foreign exchange and is alsosubject to withholding tax at applicable rates.
Recommended by the Board of Directors at its meeting held on April 13 2022.The payment is subject to the approval of the shareholders at the ensuing AGM of theCompany to be held on June 25 2022. The record date for the purposes of the finaldividend will be June 01 2022 and will be paid on June 28 2022.
Our present Capital Allocation Policy is to pay approximately 85% of the freecash flow cumulatively over a five-year period through a combination of semiannualdividends and / or share buyback and / or special dividends subject to applicable lawsand requisite approvals if any. Free cash flow is defined as net cash provided byoperating activities less capital expenditure as per the Consolidated Statement of CashFlows prepared under IFRS. Including buyback the Company would have returned 73% of thefree cash flow for the years ended March 31 2020 2021 and 2022.
* Payout ratio is computed as a percentage of Free cash flow prepared under IFRS.
Particulars of loans guarantees or investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the Notes to the financial statements provided in this Integrated AnnualReport.
Transfer to reserves
We do not propose to transfer any amount to general reserve on declaration of dividend.
We have not accepted any fixed deposits including from the public and as such noamount of principal or interest was outstanding as of the Balance Sheet date.
Particulars of contracts or arrangements made with related parties
There were no contracts arrangements or transactions entered into during fiscal 2022that fall under the scope of Section 188(1) of the Companies Act 2013. As required underthe Companies Act 2013 the prescribed Form AOC-2 is appended as Annexure 2 to theBoard's report.
Management's discussion and analysis
In terms of the provisions of Regulation 34 of the Listing Regulations the Management'sdiscussion and analysis is set out in this Integrated Annual Report.
Risk management report
In terms of the provisions of Section 134 of the Companies Act 2013 a Riskmanagement report is set out in this Integrated Annual Report.
The details of the policies approved and adopted by the Board as required under theCompanies Act 2013 and Securities and Exchange Board of India (SEBI) regulations areprovided in Annexure 8 to the Board's report.
Material changes and commitments affecting financial position between the end of thefinancial year and date of the report
There have been no material changes and commitments which affect the financial positionof the Company that have occurred between the end of the financial year to which thefinancial statements relate and the date of this report.
2. Business description
Our strategic objective is to build a sustainable and resilient organization thatremains relevant to the agenda of our clients while creating growth opportunities for ouremployees generating profitable returns for our investors and contributing to thecommunities that we operate in.
Our clients and prospective clients are faced with transformative businessopportunities due to advances in software and computing technology. These organizationsare dealing with the challenge of having to reinvent their core offerings processes andsystems rapidly and position themselves as 'digitally enabled'. The current economicclimate and volatility have caused enterprises to accelerate their adoption of digitaltechnologies - to enhance organizational resilience get competitive advantage andoptimize cost structures. The journey
to the digital future requires not just an understanding of new technologies and newways of working but a deep appreciation of existing technology landscapes businessprocesses and practices. Our strategy is to be a navigator for our clients as they ideateplan and execute their journey to a digital future.
In fiscal 2022 we continued to execute our four-pronged strategy to strengthen ourrelevance to clients and drive accelerated value creation. We believe the investments wehave 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.
For details of our continued investments and outcomes of our strategic initiativesrefer to the Strategy section of the Integrated Report.
Our go-to-market business units and solutions are detailed in the Infosys at aglance section of the Integrated Report.
There has been a net movement of 1 million sq. ft. of physical infrastructure spaceduring the year. The total available space as on March 31 2022 stands at 53.84 millionsq. ft. We have presence in 54 countries across 247 locations as on March 31 2022.
Mergers and acquisitions (M&A)
Infosys has a systematic M&A approach aimed to strengthen digital servicescapabilities deepen industry expertise and expand geographical footprint.
On March 22 2022 Infosys Consulting Pte. Ltd. (a wholly-owned subsidiary of InfosysLimited) entered into a definitive agreement to acquire oddity a Germany-based digitalmarketing experience and commerce agency for a total consideration of up to 50million (approximately Rs.420 crore) which includes earn-out management incentives andbonuses. This acquisition is expected to strengthen the Group's creative branding andexperience design capabilities in Germany and across Europe.
To consummate this transaction Infosys Consulting Pte. Ltd. has simultaneouslyacquired Infosys Germany GmBH (formerly Kristall 247. GmBH).
We along with our subsidiaries provide consulting technology outsourcing andnext-generation digital services. At the beginning of the year we had 24 directsubsidiaries and 62 step-down subsidiaries. As on March 312022 we have 27 directsubsidiaries and 50 step-down subsidiaries. The changes
in subsidiaries during the year are included in the Standalone financial statementsof the Company.
During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 we have prepared the Consolidatedfinancial statements of the Company which form part of this Integrated Annual Report.Further a statement containing the salient features of the financial statements of oursubsidiaries in the prescribed format AOC-1 is appended as Annexure I to the Board'sreport. The statement also provides details of the performance and financial positionof each of the subsidiaries along with the changes that occurred during fiscal 2022.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the Consolidated financial statements and related informationof the Company and audited accounts of its subsidiaries are available on our websitewww.infosys.com.
3. Human resources management
Our professionals are our most important assets. We are committed to hiring andretaining the best talent and being among the industry's leading employers. For this wefocus on promoting a collaborative transparent and participative organization cultureand rewarding merit and sustained high performance. Our human resource management focuseson allowing our employees to develop their skills grow in their career and navigate theirnext.
Internal complaints committee
Infosys' goal has always been to create an open and safe workplace for every employeeto feel empowered irrespective of gender sexual preferences and other factors andcontribute to the best of their abilities. Towards this the Company has set up theAnti-Sexual Harassment Initiative (ASHI) which proudly completes 22+ years of enabling apositive and safe work environment for our employees. Our ASHI practices have set anindustry benchmark as it ranked first among 350+ companies that participated in anexternal survey on the best anti-sexual harassment initiatives in 2017 2019 2020 and2021.
Infosys has constituted an Internal Committee (IC) in all the development centers ofthe Company in India to consider and resolve all sexual harassment complaints reported bywomen. 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 few years 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 and Sustainability Report of this Integrated Annual Report.
Particulars of employees
The Company had 251376 employees on standalone basis and 314015 employees onconsolidated basis as of March 31 2022.
The percentage increase in remuneration ratio of remuneration of each director and keymanagerial personnel (KMP) (as required under the Companies Act 2013) to the median ofemployees' remuneration and the list of top 10 employees in terms of remuneration drawnas 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 of Annexure 3 to this Board's report. Thestatement containing particulars of employees employed throughout the year and in receiptof remuneration of Rs.1.02 crore or more per annum and employees employed for part of theyear and in receipt of remuneration of Rs.8.5 lakh or more per month as required underSection 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is provided in a separate exhibitforming part of this report and is available on the website of the Company athttps://www.infosys.com/ investors/reports-filings/Documents/exhibitboards-report2022.pdf.The Integrated Annual Report and accounts are being sent to the shareholders excluding theaforesaid exhibit. Shareholders interested in obtaining this information may access thesame from the Company website. In accordance with Section 136 of the Companies Act 2013this exhibit is available for inspection by shareholders through electronic mode.
1. The employees mentioned in the aforesaid exhibit have / had permanent employmentcontracts with the Company.
2. The employees are neither relatives of any directors of the Company nor hold 2% ormore of the paid-up equity share capital of the Company as per Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
3. The details of employees posted outside India and in receipt of a remuneration ofRs.60 lakh or more per annum or Rs.5 lakh or more a month can be made available onspecific request.
Employee stock options / Restricted Stock Units (RSUs)
The Company grants share-based benefits to eligible employees with a view to attractingand retaining the best talent encouraging employees to align individual performances withCompany objectives and promoting increased participation by them in the growth of theCompany.
Infosys Expanded Stock Ownership Program 2019 ("the 2019 Plan")
On June 22 2019 pursuant to approval by the shareholders in the AGM the Board hasbeen authorized to introduce offer issue and provide share-based incentives to eligibleemployees of the Company and its subsidiaries under the 2019 Plan. The maximum number ofshares under the 2019 Plan shall not exceed 50000000 equity shares. To implement the2019 Plan up to 45000000 equity shares may be issued by way of secondary acquisitionof shares by the Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019Plan shall vest based on the achievement of defined annual performance parameters asdetermined by the administrator (the nomination and remuneration committee). Theperformance parameters will be based on a combination of relative Total Shareholder
Return (TSR) against selected industry peers and certain broader market domestic andglobal indices and operating performance metrics of the Company as decided by theadministrator.
Each of the above performance parameters will be distinct for the purposes ofcalculation of the quantity of shares to vest based on performance. These instruments willgenerally vest between a minimum of one and a maximum of three years from the grant date.
2015 Stock Incentive Compensation Plan ("the 2015 Plan")
On March 31 2016 pursuant to the approval by the shareholders through postal ballotthe Board was authorized to introduce offer issue and allot share-based incentives toeligible employees of the Company and its subsidiaries under the 2015 Plan. The maximumnumber of shares under the 2015 Plan shall not exceed 24038883 equity shares (notadjusted for bonus issue). These instruments will generally vest over a period of fouryears and the Company expects to grant the instruments under the 2015 Plan over the periodof four to seven years. These RSUs and stock options shall be exercisable within theperiod as approved by the nomination and remuneration committee. The exercise price of theRSUs will be equal to the par value of the shares and the exercise price of the stockoptions would be the market price as on the date of grant.
Consequent to the September 2018 bonus issue all the then outstanding options grantedunder the stock option plan have been adjusted for bonus shares.
The total number of equity shares and American Depositary Receipts (ADRs) to beallotted to the employees of the Company and its subsidiaries under the 2015 Plan does notcumulatively exceed 1% of the issued capital. For the shares and ADRs issued under the2019 Plan the cumulative amount does not exceed 1.15% of the issued capital. The 2019Plan and 2015 Plan are in compliance with SEBI (Share Based Employee Benefits and SweatEquity) Regulations 2021 as amended from time to time and there has been no materialchange to the plans during the fiscal.
The details of the 2019 Plan and 2015 Plan including terms of reference and therequirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits andSweat Equity) Regulations 2021 are available on the Company's website athttps://www.infosys.com/investors/reports-filings/Documents/disclosures-pursuant-SEBI-regulations2022.pdf.
The details of the 2019 Plan and 2015 Plan form part of the Notes to accounts ofthe financial statements in this Integrated Annual Report.
4. Corporate governance
Our corporate governance philosophy
Our corporate governance practices are a reflection of our value system encompassingour culture policies and relationships with our stakeholders. Integrity and transparencyare key to our corporate governance practices to ensure that we gain and retain the trustof our stakeholders at all times. Corporate governance is about maximizing shareholdervalue legally ethically and sustainably. At Infosys the Board exercises its fiduciaryresponsibilities in the widest sense of the term. Our disclosures seek to attain the bestpractices in international corporate governance. We also endeavor to enhance long-termshareholder value and respect minority rights in all our business decisions.
Our Corporate governance report for fiscal 2022 forms part of this IntegratedAnnual Report.
The Company recognizes and embraces the importance of a diverse Board in its success.We believe that a truly diverse Board will leverage differences in thought perspectiveregional and industry experience cultural and geographical background age ethnicityrace gender knowledge and skills including expertise in financial global businessleadership technology mergers & acquisitions Board service strategy sales andmarketing Environment Social and Governance (ESG) risk and cybersecurity and otherdomains which will ensure that Infosys retains its competitive advantage. The BoardDiversity Policy adopted by the Board sets out its approach 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 available in the Corporate governancereport that forms part of this Integrated Annual Report.
Number of meetings of the Board
The Board met eight times during the financial year. The meeting details are providedin the Corporate governance report that forms part of this Integrated 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 executive non-executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As of March 31 2022 the Board had eight membersone of who is an executive director a nonexecutive and non-independent director and sixindependent directors. Two of the independent directors of the Board are women. Thedetails of Board and committee composition tenure of directors areas of expertise andother details are available in the Corporate governance report that forms part ofthis Integrated Annual Report.
The policy of the Company on directors' appointment and remuneration including thecriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website at https://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 inthe Nomination and Remuneration Policy of the Company.
Declaration by independent directors
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofthe Listing Regulations.
The nomination and remuneration committee engaged Egon Zehnder external consultantsto conduct Board evaluation for the year. The evaluation of all the directors committeesChairman of the Board and the Board as a whole was conducted based on the criteria andframework adopted by the Board. The Board evaluation process was completed during fiscal2022. The evaluation parameters and the process have been explained in the Corporategovernance report.
Familiarization program for independent directors
All new independent directors inducted into the Board attend an orientation program.The details of the training and familiarization program are provided in the Corporategovernance report. Further at the time of the appointment of an independent directorthe Company issues a formal letter of appointment outlining his / her role functionduties and responsibilities. The format of the letter of appointment is available on ourwebsite at https://www.infosys.com/investors/corporate-governance/Documents/appointment-independent-director.pdf.
Directors and KMP
The shareholders approved the following appointments during the 40*h AGMheld on June 19 2021:
Bobby Parikh as an independent director of the Board effective July 15 2020
Chitra Nayak as an independent director of the Board effective March 25 2021
Director liable to retire by rotation
As per the provisions of the Companies Act 2013 Nandan. M. Nilekani thenon-executive and non-independent chairman whose office is liable to retire at theensuing AGM being eligible seeks reappointment. Based on performance evaluation and therecommendation of the nomination and remuneration committee the Board recommends hisreappointment. The notice convening the 41s* AGM to be held on June 25 2022sets out the details.
Reappointment of independent director
D. Sundaram was appointed as an independent director for the first term of five yearseffective July 14 2017. His office of directorship is due for retirement on July 132022. Based on the recommendation of the nomination and remuneration committee and aftertaking into account the performance evaluation of his first term of five years andconsidering the knowledge acumen expertise experience and the substantial contributionhe brings to the Board the committee has recommended the appointment of D. Sundaram tothe Board for a second term of five years. The Board at its meeting held on April 132022 approved the reappointment of D. Sundaram as an independent director of the Companywith effect from July 14 2022 to July 13 2027 whose office shall not be liable toretire by rotation.
The Board recommends the reappointment to the shareholders. The notice convening the 41stAGM to be held on June 25 2022 sets out the details.
Retirements and resignations
U.B. Pravin Rao COO and Whole-time Director retired as member of the Board effectiveDecember 12 2021. The Board expressed its deep sense of appreciation for Pravin'sleadership over his 35 years of service with the Company and acknowledges his immenseefforts and contributions towards global delivery and business enablement. The disclosurein this regard is available at https:/ /www.infosys.com/investors/documents/retirement-whole-time-director-13dec2021.pdf.
Committees of the Board
As on March 31 2022 the Board had six committees: the audit committee the corporatesocial responsibility committee the nomination and remuneration committee the riskmanagement committee the stakeholders relationship committee and the Environment Socialand Governance (ESG) committee. All committees comprise only independent directors one ofwhom is chosen as the chairperson of the committee.
The Board at its meeting held on April 14 2021 instituted the ESG committee.
During the year all recommendations made by the committees were approved by the Board.
A detailed note on the composition of the Board and its committees is provided in the Corporategovernance report.
Interna! financial control and its adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of fraud error reporting mechanisms accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures. For more details refer to the 'Internal control systems and their adequacy'section in the Management's discussion and analysis which forms part of thisIntegrated Annual Report.
At Infosys while our employees operated efficiently as a remote and hybrid workforcewe continued to remain vigilant on the evolving cybersecurity threat landscape. In ourendeavor to maintain a robust cybersecurity posture the team has remained abreast ofemerging cybersecurity events globally so as to achieve higher compliance and itscontinued sustenance. We continue to be certified against the Information SecurityManagement System (ISMS) Standard ISO 27001:2013. Additionally we have also been attestedon SSAE 18 SOC 1 and SOC 2 by an independent audit firm. During the year our focus on ourcybersecurity personnel's training and reskilling went ahead as planned together with ouroverall initiatives on improving cybersecurity processes and technologies.
Our periodic stakeholder interactions ensured that we have sponsorship from the seniormanagement and all critical stakeholders in a timely manner.
Significant and material orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations in future.
Reporting of frauds by auditors
During the year under review neither the statutory auditors nor the secretarialauditor has reported to the audit committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in the Board's report.
In accordance with the Companies Act 2013 the annual return in the prescribed formatis available at https://www.infosys.com/investors/reports-filings/documents/annual-returns-2021-22.pdf.
The Company complies with all applicable secretarial standards issued by the Instituteof Company Secretaries of India.
Listing on stock exchanges
The Company's shares are listed on BSE Limited and the National Stock Exchange of IndiaLimited 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 and un-encashed dividends ofRs.20258692. Further 4154 corresponding shares on which dividends were unclaimed forseven consecutive years were transferred as per the requirements of the IEPF Rules. Thedetails of the resultant benefits arising out of shares already transferred to the IEPFyear-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividendaccount up to the year and the corresponding shares which are liable to be transferredare provided in the Shareholder information section of the Corporate governance reportand are also available on our website at www.infosys.com/IEP=.
Directors' responsibility statement
The financial statements are prepared in accordance with the Indian AccountingStandards (Ind AS) under the historical cost convention on accrual basis except forcertain financial instruments which are measured at fair values the provisions of theCompanies Act 2013 (to the extent notified) and guidelines issued by SEBI. The Ind AS areprescribed under Section 133 of the Companies Act 2013 read with Rule 3 of the Companies(Indian Accounting Standards) Rules 2015 and relevant amendment rules issued there after.Accounting policies have been consistently applied except where a newly-issued accountingstandard is initially adopted or a revision to an existing accounting standard requires achange in the accounting policy hitherto in use.
The directors confirm that:
In preparation of the annual accounts for the financial year ended March 312022 the applicable accounting standards have been followed and there are no materialdepartures.
They have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period.
They have taken proper and sufficient care towards the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
They have prepared the annual accounts on a going concern basis.
They have laid down internal financial controls which are adequate and areoperating effectively.
They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
5. Audit reports and auditors
The Auditors' Report for fiscal 2022 does not contain any qualificationreservation or adverse remark. The Report is enclosed with the financial statements inthis Integrated Annual Report.
The Secretarial Auditors' Report for fiscal 2022 does not contain anyqualification reservation or adverse remark. The Secretarial Auditors' Report is enclosedas Annexure 5 to the Board's report.
The Auditor's certificate confirming compliance with conditions of corporategovernance as stipulated under Listing Regulations for fiscal 2022 is enclosed as Annexure4 to the Board's report.
The Secretarial Auditor's certificate on the implementation of share-basedschemes in accordance with SEBI (Share Based Employee Benefits and Sweat Equity)Regulations 2021 will be made available at the AGM electronically.
Auditors Statutory auditors
Under Section 139(2) of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of two terms of five consecutiveyears and each such term would require approval of the shareholders. In line with therequirements of the Companies Act 2013 Statutory Auditor M/s Deloitte Haskins &Sells LLP Chartered Accountants (ICAI Firm Registration Number 117366W/ W-100018) wereappointed as Statutory Auditor of the Company at the 36*h AGM held on June 242017 to hold office from the conclusion of the said meeting till the conclusion of the 41s*AGM to be held in the year 2022. The term of office of M/s Deloitte Haskins & SellsLLP as Statutory Auditors of the Company will conclude from the close of the forthcomingAGM of the Company.
The Board of Directors of the Company based on the recommendation of the auditcommittee at its meeting held on April 13 2022 reappointed M/s Deloitte Haskins &Sells LLP Chartered Accountants (ICAI Firm Registration Number 117366W/ W-100018) as theStatutory Auditor of the Company to hold office for a second term of five consecutiveyears from the conclusion of the 41s* AGM till the conclusion of the 46thAGM to be held in the year 2027 and will be placed for the approval of the shareholders atthe ensuing AGM.
During the year the statutory auditors have confirmed that they satisfy theindependence criteria required under the Companies Act 2013 the Code of Ethics issued bythe Institute of Chartered Accountants of India and the U.S.
Securities and Exchange Commission and the Public Company Accounting Oversight Board.
The Board recommends their reappointment to the shareholders. The notice convening the41s* AGM to be held on June 25 2022 sets out the details.
Makarand M. Joshi & Co. Practicing Company Secretaries are appointed assecretarial auditor of the Company for fiscal 2023 as required under Section 204 of theCompanies Act 2013 and Rules thereunder.
Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
6. Corporate social responsibility (CSR)
Infosys has been an early adopter of CSR initiatives. The Company works primarilythrough the Infosys Foundation towards supporting projects in the areas of protection ofnational heritage restoration of historical sites and promotion of art and culture;destitute care and rehabilitation; environmental sustainability and ecological balance;promoting education and enhancing vocational skills; promoting healthcare includingpreventive healthcare; and rural development. In fiscal 2022 the Company's CSR effortsincluded COVID-19 relief in multiple states.
The Company's CSR Policy is available on our website at
The annual report on our CSR activities is appended as Annexure 6 to the Board'sreport. Infosys also undertakes CSR initiatives outside of India in Australia Europeand the US. The initiatives in the US are carried out through Infosys Foundation USA. Thesaid initiatives are over and above the statutory requirement.
The highlights of the initiatives undertaken by the Company Infosys Foundation andInfosys Foundation USA form part of this Integrated Annual Report.
7. Conservation of energy research and
development technology absorption foreign exchange earnings and outgo
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are enclosed as Annexure 7 tothe Board's report.
Business Responsibility and Sustainability Report (BRSR)
In November 2018 the Ministry of Corporate Affairs (MCA) constituted a Committee onBusiness Responsibility Reporting ("the Committee") to finalize businessresponsibility reporting formats for listed and unlisted companies based on the frameworkof the National Guidelines on Responsible Business Conduct (NGRBC). Through its reportthe Committee recommended that BRR be rechristened BRSR where disclosures are based onESG parameters compelling organizations to holistically engage with stakeholders and gobeyond regulatory compliances in terms of business measures and their reporting.
SEBI vide its circular dated May 10 2021 made BRSR mandatory for the top 1000listed companies (by market capitalization) from fiscal 2023 while disclosure isvoluntary for fiscal 2022 .
The Committee Report encourages companies to report their performance for fiscal 2022to be better prepared to adopt this framework from the next fiscal.
Infosys has adopted the BRSR voluntarily for fiscal 2022 to provide enhanceddisclosures on ESG practices and priorities of the Company. The BRSR disclosures form apart of Infosys' Integrated Annual Report 2021-22. In addition to this we also publish acomprehensive ESG Report annually based on the GRI standard. The non-financialsustainability disclosures in our Integrated Annual Report and ESG Report have beenindependently assured by KPMG. The ESG Report is available athttps://www.infosys.com/sustainability/documents/infosys- esg-report-2021-22.pdf.
Environmental Social and Governance (ESG)
In October 2020 we launched our ESG Vision 2030. Our focus is steadfast on leveragingtechnology to battle climate change conserving water and managing waste. On the socialfront our emphasis is on the development of people especially around digital skillingimproving diversity and inclusion facilitating employee wellness and experiencedelivering technology for good and energizing the communities we work in. We are alsoredoubling efforts to serve the interests of all our stakeholders by leading through ourcore values and setting benchmarks in corporate governance. Our Board instituted an ESGcommittee on April 14 2021 to discharge its oversight responsibility on matters relatedto organization-wide ESG initiatives priorities and leading ESG practices. The ESGcommittee reports to the Board and meets every quarter.
We thank our clients vendors investors bankers employee volunteers and trustees ofInfosys Foundation Infosys Foundation USA and Infosys Science Foundation for theircontinued support during the year. We place on record our appreciation for thecontribution made by our employees at all levels. Our consistent growth was made possibleby their hard work solidarity cooperation and support.
We thank the governments of various countries where we have our operations. We thankthe Government of India particularly the Ministry of Labour and Employment the Ministryof Environment and Forests the Ministry of New and Renewable Energy the Ministry ofCommunications the Ministry of Electronics and Information Technology (Dept of IT) theMinistry of Commerce and Industry the Ministry of Finance the Ministry of CorporateAffairs the Central Board of Direct Taxes the Central Board of Indirect Taxes andCustoms GST authorities the Reserve Bank of India Securities and Exchange Board ofIndia (SEBI) various departments under the state governments and union territories theSoftware Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru BhubaneswarChandigarh Chennai Coimbatore Gurugram Hubballi Hyderabad Indore Jaipur KochiKolkata Mangaluru Mohali Mumbai Mysuru Nagpur Noida Pune and Thiruvananthapuram -and other government agencies for their support and look forward to their continuedsupport in the future. We also thank the US federal government the U.S. Securities andExchange Commission the Internal Revenue Service and various state governmentsespecially those of Indiana Rhode Island Connecticut Texas Arizona and North Carolina.
| ||for and on behalf of the E ||loard of Directors |
| ||Sd/- ||Sd/- |
| ||Nandan M. Nilekani ||Salil Parekh |
|Bengaluru April 13 2022 ||Chairman ||Chief Executive Officer and Managing Director |