· 30 years of infosys infosys annual report 2010-11 “posterity will not excuse you if you did...

30 years of InfosysAnnual Report 2010-11

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30 years of Infosys

Infosys Annual Report 2010-11

“Posterity will not excuse you if you did not dream big. You owe it to your customers, your colleagues, your investors, and the society. Every major civilization, every great advance in science and technology, and every great company is built on a big dream.”

N. R. Narayana MurthyChairman and Chief Mentor

30 years of InfosysTurning thirty is a good time to reminisce. And reflect. And look ahead.

Thirty is one of those rare junctures when you have both youth and experience on your side. Thus, as Infosys completes thirty, we talk about the pleasures and pains of starting small; the genesis of a value-based organization culture; personal goals turning into company milestones; sharing wealth and caring for society; learning and educating; building infrastructure for one and all; agreeing to disclose and refusing to compromise on quality; and above all, believing in a vision and leading by example to see it become reality.

Thirty is also the time to break new ground.

This Annual Report is printed on 100% recycled paper as certified by the U.K.-based National Association of Paper Merchants (NAPM) and France-based Association des Producteurs et des Utilisateurs des papiers et cartons Recyclés (APUR).

30 years of Infosys


Sitting on a high stool at the NASDAQ headquarters in New York in front of the scorching lights of TV cameras, I borrowed the words of Neil Armstrong to tell the world how important it was for an Indian company to be listed on the NASDAQ. N. R. Narayana MurthyChairman and Chief Mentor

Goodbye, folks. March on with values...

30 years of Infosys


It was on one of those rare nights at home during the late eighties. I was huddling with my young children, Rohan and Akshata, when Rohan, the most mischievous child I have ever come across, asked innocently whether I loved Infosys more than him and his sister. I got away from that embarrassing situation by saying that I loved my children much more than anything else. However, even today, when we reminisce about the incident, my children are not fully convinced that I was telling them the truth. When I was busy overseeing every detail of the strategy and the operations of the company — from designing the company logo, the company song and the presentation materials, signing off on every drawing and material used in every building on our campuses around the world and coming home late at night — it was difficult to argue with the innocent but correct logic of my children. When I was spending 16-hour days in the office and was away from home for as many as 330 days in a year, it was hard for my children to believe in my commitment to the family.

There is no doubt that the Infosys journey has been an integral part of my life. Most of my colleagues say that Infosys is an inseparable part of me and I am an inseparable part of Infosys. I have been the Number One actor in every major decision taken in the company. I have rejoiced in every significant milestone of the company. I have commiserated in every false step that this company has taken. The best analogy that I can think of for this separation between Infosys and me is that of one’s daughter getting married and leaving her parents’ home. Yes, the parents will be there when she needs them and they will be happy that she is starting a new life in an exciting new environment.

It is not easy for me to write my last article in the Annual Report of the company. As I write this, a mosaic of images from the past whizzes through my mind. The list seems endless and it would be difficult to narrate them all in this article. So let me highlight a few of them. The day we assembled in my tiny apartment in Mumbai to decide that respect from every stakeholder was the most valuable thing for us. The day we convinced our first US customer to close his own operations at SEEPZ and hitch his future with ours was a significant milestone for us. The day we won the MICO data center contract, starting as an underdog and going on to differentiate ourselves based on our advanced mathematical modeling competence, was a day that boosted our confidence as engineers. The day we inaugurated India’s first software campus is still vivid in my memory. Distributing 27% of the company’s equity among our employees was a proud moment for those of us who have always considered the idea of sharing wealth to be an important part of our social responsibility.

Listing in India in 1993 pushed us to become leaders in corporate governance. The joy of being India’s first software company to be certified at Level 4 of the Capability Maturity Model of the Software Engineering Institute at Carnegie Mellon was clearly what enhanced our own belief in quality. Sitting on a high stool at the NASDAQ headquarters in New York in front of the scorching lights of TV cameras, I borrowed the words of Neil Armstrong to tell the world how important it was for an Indian company to be listed on the NASDAQ. Opening our ultra-modern offices in London, Paris, New York, Melbourne, Shanghai and Tokyo heralded our aspirations to be a global company.

The inauguration of the first education center at Mysore by Prime Minister Manmohan Singh and the second one by Mrs. Sonia Gandhi, the President of the Indian National Congress, were both sound reaffirmations of our long-held belief in the importance of education and research. Participating in the Billion Dollar Day function, declaring several special dividends and bonus shares,

becoming part of NASDAQ-100, starting our banking group, creating Infosys Consulting and Infosys BPO, building more than 28 million sq. ft. of world-class development centers, winning several prestigious global awards, and establishing the Infosys Foundation are milestones that brought us great pride.

There have been some moments of great dilemmas and sadness too. Bidding goodbye to perhaps the brightest of my co-founder colleagues early in the journey was disheartening. Refusing to accept unreasonable terms and walking away from business with a Fortune-10 company was a test of our resolve. Accepting the resignation of a senior colleague and dealing with the instance where our code of ethics was jeopardized were tests of adherence to our values. Deliberating all alone on the resignation offer of a co-founder is not something I would wish even upon my enemy. Being accused of violating our own high standard of business ethics recently made me lose several nights of sleep. Occasional incidents of the organization turning bureaucratic, the inability of some of our leaders to take quick and firm decisions, and the government-company interface becoming less business-friendly from time to time are things that make me sad. But then, this tapestry of happy and not-so-happy incidents is normal and keeps life exciting.

What have been the lessons from this extraordinary marathon? Assembling a team of extraordinary people who have displayed outstanding capabilities through their value system, competence, low ego and high energy is crucial to the progress of any institution. The differentiation comes from ideas, and ideas come from bright minds. Therefore, good people are the primary assets of a great organization. It is essential to realize that even the best people may not be able to run the entire marathon. Different people run out of endurance and intellectual horsepower at different points of time. Some people drop out of the marathon since they do not see any value in an organization when their own time under the arc light is over. A leader’s responsibility is to recognize this, provide them opportunities outside the organization, and usher in suitable replacements. Infosys’ journey is replete with many such examples.

Many intelligent people possess a high ego and low patience to deal with people less capable than themselves. Leaders have to manage this anomaly very carefully, counsel these errant people from time to time, and allow them to operate as long as they do not become dysfunctional and start harming the organization. If they do cross the threshold, it takes courage to inform the individuals that their time in the organization is over and that they have to leave. However, one aspect that marks out a truly superior organization is the ability of its employees at all levels to be driven by values and to ensure adherence and compliance under any circumstance. No individual is high or important enough for an organization to put up with non-compliance.

Leadership by example is what creates trust in people to follow a leader. As long as a leader is able to show his or her sacrifice and commitment to a cause, others will follow him or her. I am glad we decided on respect from our stakeholders (customers, employees, investors, vendor-partners, government of the land and the society) as the primary objective of the company. I have seen hundreds of instances of such leadership-by-example at Infosys.

A sense of ownership among employees is extremely important to build a long-term future for a corporation. Such ownership comes from fair, merit-based and generous sharing of wealth and perquisites among each member of the company. This is my answer to many of my friends, who wonder why, when Infosys was founded, I took a small percentage of my earlier salary while every other co-founder’s salary was increased by at least 10%.

30 years of Infosys


The same friends tell me that they do not know of any other instance where as much as 10% to 15% of the company equity was given to co-founders who had just 12 to 18 months of work experience.

I do not know of any Indian company that has given away as much as R 50,000 crore (at current stock prices) of stock options to employees. Today, every Indian employee at every level who joined us on or before March 2010 is a stockholder of Infosys. The point I would like to make is that such acts demonstrate that our leaders walked the talk in sacrifice and commitment.

Strategy is about ensuring sustained differentiation in a changing environment for better net income margins. Differentiation without better net income margins is meaningless. In my opinion, operating margins and earnings before taxes, depreciation and amortization (EBITDA) are not appropriate measures. In fact, the best measure of differentiation is the per-capita free cash flow generated. Such cash flows bring cash to invest in better people, research and development, infrastructure, training, and better customer and employee confidence. The famous Harvard historian, Niall Ferguson, says in his book, Civilization : the West and the Rest, that the six attributes that have made Western civilization dominant during the last five hundred years are: competition, science, property rights, medicine, consumption and a good work ethic. I have been saying for many years now that the factors that differentiate a corporation from its competitors are : an enduring value system, open-mindedness, a pluralistic and meritocratic approach, and practicing speed, imagination and excellence in execution. Leaders have to focus on creating such an environment.

Leadership is about taking bold and firm decisions with incomplete information in an environment of uncertainty. Leaders who waffle do not inspire confidence in their people. It is important to use as much data and modeling as possible to eliminate clearly bad decisions. My decision to walk away from a Fortune-10 company when they contributed 25% of our revenue was one such example of decision making under uncertainty. It was a tough decision that was taken so calmly and firmly that the head of sales at Infosys at that time thought I was not bothered about the future of the company! I had to explain to him that I did indeed agonize over it but that, as a leader, I could not be driven by panic since such an important decision required a calm and composed mind.

Every leader must have a mental model of his or her business with at best five to seven parameters that determine sensitivity to revenue and net-income. It is important to update that model suitably as the business landscape changes. Any leader who cannot quickly do such sensitivity calculation would not be able to take quick and bold decisions. Even today, I carry and update the mental model of our business in my mind.

Generosity is an essential part of a leader. It is the foundation on which teamwork is built. The ability to share the limelight with one’s colleagues, the ability to step aside and give opportunity to younger people when they want that fame, power and glory, and the ability to provide a safety net of advice for them is an important aspect of strengthening the future of an organization. It is not easy to give up power, particularly when you have been the object of so much adulation. I must say that Infosys has done a good job in bringing two such transitions before I leave the portals of this company.

Scalability is the true test of the endurance of an organization. The ability to grow successfully without losing quality, productivity, employee, investor and customer satisfaction and the spirit of a small company is what makes Infosys a great company. We have grown from 50 customers to 620 customers, from 10 projects to 6,500 projects, from 100 employees to 1,30,820 employees,

from 100 sq. ft. to 28 million sq. ft. of built-up space, and from 100 investors to over 4,50,000 investors. Such a scalability exercise has been successful, thanks to our PSPD model of operation. PSPD stands for Predictability of revenues, Sustainability of such predictability, Profitability of such realized revenues, and Derisking. Predictability happens because of a good forecasting system that derives realistic data from the trenches and tempers it with the wisdom of senior business leaders. Sustainability refers to the systems that help the efforts of sales people beating the pavement and meeting customers to make the prediction true, the efforts of our delivery people to deliver quality products on time within budgets, and to the efforts of our finance people raising the invoice on time and collecting money on time. Profitability refers to the systems that help our people make value-based sales, follow rigorous budgeting exercises, control costs, get best value for money and ensure the agreed-upon profitability. Derisking refers to systems that identify risks in various dimensions of our operations — people, geographies, technologies, application areas and services — collect periodic data, review the risk levels and

take suitable actions to mitigate them.

Innovation is the best instrument for creating sustained differentiation. However, it must be accepted that revenues for a corporation come from well-understood ideas and business models. For example, most of a bank’s revenues will come from borrowing money at a certain rate and lending it at a higher rate. Part of the profits from such models will be used for research and development to generate new ideas. A few of these ideas will be seeded and some of them will become mainstream revenue earners. Therefore, it is very important for a leader to focus on innovation, particularly, when the times are good.

We have demonstrated that businesses can be run legally and ethically; that it is possible for an Indian company to benchmark with the global best; and that any set of youngsters with values, hard work, team work and a little bit of smartness can indeed be successful entrepreneurs.

30 years of Infosys


Customers put food on our table. Therefore, we have to have a laser focus on exceeding their expectations, being open and honest with them, and ensuring that they look good in front of their customers. Employees are the only instruments we have to make our customers and investors succeed. Therefore, we have to create an environment of openness, meritocracy, fairness, transparency, honesty and accountability amongst our employees.

Our investors understand that businesses will have their share of ups and downs. They want us, the management, to level with them at all times. Therefore, “when in doubt, please disclose” is a good policy for a corporation. Society provides customers, employees, investors, bureaucrats and politicians. Therefore, earning the goodwill of every society that we operate in is extremely important for us. Global benchmarking is a powerful instrument that helps us to improve our self-confidence, compete with the best global competitors, and serve our customers better.

We Indians must recognize, as we have done at Infosys, that we are our own enemies. There is no external enemy. Our failures are because of our lack of commitment to our cause, our inability to accept meritocracy, and our indifference to honesty and want of a good work ethic amongst our leaders. Performance alone is the key differentiator. This stems from my belief that performance leads to recognition, recognition brings respect and respect brings power. Therefore, if India wants to be a superpower as we keep hoping, the only instrument we have is performance.

We have demonstrated that businesses can be run legally and ethically; that it is possible for an Indian company to benchmark with the global best; and that any set of youngsters with values, hard work, team work and a little bit of smartness can indeed be successful entrepreneurs. This way, we have enthused millions of young men and women in India. This, in my opinion, is Infosys’ greatest contribution.

I have realized that humility, grace and courtesy are genuine only when you have power and glory. That is why the leaders at Infosys have practiced this time and again. Humility provides us the strength of mind to learn from people better than us. Grace and courtesy make us worthy competitors. They also remind us that such glory and power are ephemeral and give us the strength to handle the days when we too could lose our shine.

The crucial things we have to do in the future are : recognize our weaknesses; be open-minded about learning from people better than us; learn from our mistakes and not repeat them; be humble, honest and courteous; benchmark with the best in every dimension; use innovation to perform at global levels; and create a worthwhile vision and improve every day. This is how our mantra of focusing on speed, imagination and excellence in execution will take this company very far. I have absolutely no doubt about it. I wish Kris and my fellow Infoscions the best in their journey forward. The board has been kind enough to name me the Chairman-emeritus. Therefore, I will always be there to add value if asked.

Thanks,

Narayana Murthy

30 years of Infosys


The finance journey

The finance journey started with the incorporation of Infosys on July 2, 1981. The paid in capital was R 10,000, reportedly borrowed by Narayana Murthy from his wife. At inception, the Founders put in the basic financial principles – the company will earn a profit from year one, all projects will be delivered at a reasonable profit, the balance sheet will be liquid, borrowings will be only for asset creation, corporate resources will never be used for personal purposes and dividends will be paid out of surpluses. Indeed the initial years were tough, as India was a closed economy. Revenues grew from R 0.12 crore in the first year to R 8.66 crore in fiscal 1992, the year of economic reforms in India. The Founders were very clear that 10 years from founding they would go for an IPO and create liquidity for themselves. Employees were given stock in the company. In fact, by March 31, 1992 they owned 13.6% of the shares.

The IPO was indeed a seminal event for the company. During the road show, the Founders made a projection that the company would be a US$ 100 million revenue company by 2000, with a 20% net income, when revenues were US$ 5.01 million with net income of US$ 1.23 million as of March 31, 1993. The IPO was for creating a campus for 1,000 people, along with state of the art computing systems costing in all R 16.58 crore, more than the revenue of the previous year of R 8.66 crore. Great courage indeed! The IPO in February 1993 was a tough act. The market

did not understand a software company as it was unheard of and completely new. The market was also rough at that time. The issue barely squeezed through, with help from its investment bankers. The issue opened at R 145 on listing. Soon thereafter, our journey commenced as a public company.

Right from the beginning of being a public company, we decided that transparency was a competitive advantage and shareholders, as true owners, deserved the fullest, most timely information. September 1, 1993, our first AGM after listing, was a seminal event and well attended; lunch was offered too. In October 1993, India saw its first investor meet after listing at Mumbai with a large attendance, where management presented the investors with its strategy for growth, thus setting a new trend.

We invested part of the IPO proceeds in the primary and secondary markets to enhance returns. The markets went bad and we wrote off most of the investments. It was a humbling experience to stand in front of the investors and admit that we had made a mistake and assuring them that it would not be repeated.

Very soon the company put in place the 1994 Employees Stock Option Scheme, which along with the 1998 ADR scheme and the 1999 scheme gave stocks to over 18,000 employees, creating hundreds of dollar millionaires and thousands of rupee millionaires. Drivers, office assistants, secretaries got stock along with others and

V. BalakrishnanChief Financial Officer

T. V. Mohandas PaiDirector and Head – Administration, Education and Research, Finacle, Human Resources Development and Infosys Leadership Institute

30 years of Infosys


became millionaires. It soon became the most successful scheme in India and set a benchmark for other companies. It gave us an unique positioning, democratized wealth and suddenly the professionals realized that they too could become wealthy by ethical means early in their careers. It revolutionized India. The 1994 ESOP scheme was sought to be taxed in the hands of the employees and after a protracted legal battle, the Supreme Court held in 2008 that the scheme did not create a taxable event, allowing all grantees the benefit of no tax, helped of course by the abolition of capital gains tax on sale provided the shares are held for more than 12 months.

The company made a private placement of shares at R 450 in July 1994 to raise R 25 crore for its expansion. Soon after, in October 1994, the company declared a bonus issue of 1:1, the first of many bonus issues. 100 shares issued in the IPO at R 9,500 has today become 12,800 shares valued at R 4.15 crore (as of March 31, 2011) an annual compounded growth of 59%, a total gain of 4,64,422%, including total dividends received to date of R 26.4 lakh.

The 1994 annual report was a very different report in terms of financial reporting and disclosure and soon became a collector’s item. It started a trend with the 1995 report and subsequent reports disclosing a management commentary on the accounts, brand accounting, human resources accounting, EVA statement, and financial accounts in the GAAP of eight countries, some of them in the local language. The company won the first of its continuous 11 awards for the Best Presented Accounts from the Institute of Chartered Accountants of India (ICAI). The ICAI had to finally give us the Hall of Fame award that made us ineligible to apply for future years! The first financial statements under U.S. GAAP done voluntarily were issued.

We also issued the first publicly articulated financial policy in India which inter alia said that the company aimed to earn a minimum return on capital employed of two times the cost of capital, on invested capital of three times cost of capital; pay dividend of up to 20% of post-tax profits only out of cash surpluses (now increased to 30% of consolidated profit), maintain liquid assets on the balance sheet to meet a year’s working expenses, borrow only for short-term mismatches in cash flows, depreciate assets in the shortest possible time; earn a minimum of 25% profit on sales revenue. In fact if a search were to be made of any corporation in the world over the last 15 years which has earned a minimum of 25% return on equity and 25% profit on sales, very few companies would show up and Infosys would be one of them. We started giving guidance in fiscal 1995 and this became a trend. Many have questioned us since then on the need to give guidance, and our view has been that we need to have symmetry of information between the business and the outside world and this was the best way to do it.

We then started preparing for our listing on the NASDAQ. In 1995, we had expressed our intention to list on the NASDAQ before the end of the decade. We started getting ready with the U.S. GAAP financial statements, benchmarked our corporate governance standards and investor relations standards. We started announcing our results quarterly from June 30, 1997, much before it became mandatory. We revamped our Board having majority of independent directors, instituted the Board committee systems, put in place a whistle blower policy, and policies to prevent insider trading, all of

which became benchmarks once again. Infosys became the most followed company for its governance practices. We started work for the listing in 1997, postponed it as markets fell, started again in 1998 and completed in 1999.

The IPO road show was a great event, we met nine investors a day, with two teams across the globe to raise US$ 70 million. Two days before listing there was no book and we were nervous and almost called off the issue but soon the orders came in a torrent. It gathered a book of over US$ 3.5 billion, the first listing in the U.S. by an Indian company. The book runners suggested a price of US$ 37, we insisted on US$ 34 leaving them perplexed, insisting that we had to be fair to our investors. The stock on listing opened at US$ 51. We came back to India and were welcomed as heroes, and history was created. We reached revenues of US$ 203.4 million by fiscal 2000 with a net income of US$ 61.3 million, keeping the commitment made to investors when our Founders did the first road show!

A year later, we saw the biggest technology rally on the NASDAQ with our stock going up to US$ 675 at the height of the internet boom. Over two weeks, the company saw its valuation go up during the boom by US$ 20 billion only to see it come down by US$ 15 billion in one week! The markets crashed soon after in 2003 and the recession started. During April 2003 at the time of our annual guidance, Narayan Murthy made the famous statement about “fog on the windscreen” and we gave guidance in tune with our business forecast. The stock crashed 40% in two days and shook up the market. We recovered in our business and soon reached the US$ 1 billion mark in fiscal 2004. We had a great celebration! Liquidity on the NASDAQ was lacking. We worked with regulators in India to create the policies for a Secondary sponsored listing of an ADR. We had an issue of US$ 300

million, once again a first. We followed this up with a US$ 1 billion secondary ADR in 2005 and then a US$ 1.5 billion secondary ADR in fiscal 2007 that enabled us to get into the NASDAQ-100 index, again a first for any Indian company. We were the first foreign filers to file financial statements in IFRS with the Securities and Exchange Commission, U.S.

We are proud to be part of this dream journey – to set the benchmark in financial reporting; to use transparency and disclosures as our competitive advantage; to lead good practices in the country which got mandated later for all companies to follow; to set and follow the best corporate governance norms in the world; and above all build a financially strong company in all aspects. We have built a flexible financial model that has withstood many testing times. We were always willing to stand-up and share any bad news with stakeholders just as we shared good news. Our ability to look at long-term challenges and invest ahead of need without being unduly influenced by short-term consequences, had kept us in good stead. Today we have a strong balance sheet with US$ 3.8 billion in cash and cash equivalents, listed on the NASDAQ and in India with over 4,50,000 investors. The journey that started with

R 10,000, has evolved into a balance sheet of R 26,000 crore with over R 11,623 crore paid out as dividend.

The journey continues...

We are proud to have been part of this dream journey. Using exemplary corporate governance guidelines, we have built a financially sound company.

30 years of Infosys


In 1983, we had developed an application on a new platform for a German client. During its acceptance testing, Narayana Murthy noticed a single character error in the output and he called the client immediately and informed them about the error. The company was very impressed by our focus on quality, and our proactive and transparent approach that they accepted the application without going through the elaborate tests planned.

That incident sowed the seeds of our focus on quality in the company. Though Quality, as a function at Infosys was formally instituted in late 1992, it has been an integral part of our existence over the last 30 years.

I have had the privilege of being part of most of the quality journey at Infosys and the distinct honor of steering it for the past 19 years. I have had the good fortune of working with a team comprising the brightest minds in the industry such as, Dr. V. A. Sastry, Dr. Pankaj Jalote, S. Raghavan, M. R. Bhashyam and Satyendra Kumar. I am sharing the highlights of how our focus on quality has enabled us to earn the trust of our stakeholders.

In November 1992, the Quality function was instituted at Infosys under the leadership of Dr. V. A. Sastry in the backdrop of a booming business. At the time, we had around 25 active projects but we were aware that growth was around the corner. We had to lay a strong foundation with a formal structure for the implementation

and measurement of quality. We also wanted to ensure that our focus on quality translated into business value for our clients. In the initial years, we took our first but firm steps on this journey when we got our ISO (with TickIT (1) ) certification in 1993 which certified us on the strength of our basic processes. Our journey had begun in right earnest.

Over the next few years, we worked towards increasing the scope of our quality metrics by refining our software development lifecycle processes. Dr. Pankaj Jalote led our efforts during the CMM assessment. We were assessed at Level 4 in 1997 and this not only highlighted the strength of our business processes but also indicated that the organization was undergoing tangible changes in imbibing the quality culture.

This cultural change paid us rich dividends. In 1999, we touched the US$ 100 million revenue mark and also became the first Indian company to be listed on the NASDAQ. This success was duly complemented by the distinction of becoming the 21st company in the world to be accredited the CMM Level 5 standard for software development.

By then, we were entering a phase where business was poised to grow in leaps and bounds. This necessitated us to scale our Quality function to keep pace with the growing business complexity. This foresight drove Bhashyam and me to conduct

The quality journey

K. DineshDirector and Head – Communication Design Group, Information Systems and Quality & Productivity

30 years of Infosys


a detailed evaluation of the certification standards available at the time. We adopted the Malcolm Baldrige National Quality Award (MBNQA) model successfully in 2000 when our revenues touched US$ 200 million and with around 300 ongoing projects. The MBNQA is one of the most prestigious Total Quality Management models adopted by many industries.

After 2000, when Satyendra Kumar took over as the head of Quality and Sanjay Purohit joined him, the Quality function attained a new dimension. Today, the Quality function is pervasive across our services, units / enabler functions and geographies and plays a pivotal role in managing organizational risk.

The past decade led to the implementation of the Balanced Scorecard

(2) framework that translated corporate strategies into measurable goals. As we added new lines of services such as BPO, Aerospace, Medical Devices and Telecom amongst others, our focus was on growing sustainably and reducing the impact of our operations on the environment.

This led us to implement domain-specific certification standards as and when new service lines were added. Some of the certifications include, eSCM-SP Level 5, AS 9100, ISO 13485, ISO 14001, OHSAS18001 and TL 9000. Recently, Infosys, as well as Infosys China, one of our fastest growing subsidiaries, have been assessed at CMMi Level 5.

One of the most significant developments in this decade was the creation of the Infosys Quality System, which documents and demystifies our quality management system through PRidE, our in-house, web-based, business process platform. Today, through our Business Value Articulation (BVA) initiative, we are connecting and articulating the business value that we add to our clients by continuously improving the quality of all our processes.

The Predictability, Profitability, Sustainability and Derisking (PSPD) model has been at the core of our business philosophy. In 1993, we had 25 projects, 750 employees, US$ 5 million in revenue and operated out of two offices in India and one international sales office in Boston.

Today, we have over 620 clients, 6,500 projects, 1,30,820 employees, US$ 6.04 billion in revenue, and operate out of 64 sales offices and 63 global development centers spread across 75 cities in 32 countries.

Despite the ever-increasing business complexity, our Quality function has sustained its reach across the organization and enabled us to deliver on the promises we make to our stakeholders, year after year.

The fact that we deliver 99% of our projects on time and 96% within budget, the fact that our repeat business has increased from around 87% in 2000 to over 97% today, and the fact that our Client Satisfaction Index went up even at the peak of the recession in 2009 are all testament to one fact – that quality has been the platform on which we have delivered predictable, profitable, sustainable and de-risked business value to our stakeholders.

The prestigious awards and recognitions that we have received along the way have made our journey even more heartening and

memorable. The IEEE Computer Society and the Carnegie Mellon University Software Engineering Institute awarded the 2010 Software Process Achievement Award and the award citation was a testimony to our commitment : “For establishing an extremely cost-effective, sustained, and culturally integrated quality and productivity improvement program during a period of extraordinary corporate growth”. We were also awarded an entry to the Balanced Scorecard Hall of Fame in 2007 on the strength of our innovative strategy planning and execution capabilities.

When I look back, I realize that quality at Infosys is not just about governance, prerequisites or metrics. Through quality, we have succeeded as an organization to set ourselves on the path of the continued pursuit of excellence with a constancy of purpose. In the process, we have earned the sustained trust of our stakeholders – employees, clients, alliance partners, the industry, government and the society at

large. This trust is an intangible, yet an invaluable asset and reflects the success of our quality journey over the past three decades. I strongly believe that it will continue to be at the core of our success in the years to come.

(1) TickIT is a quality certification program for software development,supported primarily by the software industries in the United Kingdom and Sweden. (2) The Balanced Scorecard is a strategic planning and management system originated by Dr. Robert Kaplan and Dr. David Norton as a performance measurement framework that added

strategic non-financial performance measures to traditional financial metrics to give managers and executives a more balanced view of organizational performance.

Through quality, we have succeeded as an organization to set ourselves on the path of the continued pursuit of excellence with a constancy of purpose. In the process, we have earned the sustained trust of our stakeholders

30 years of Infosys


I still vividly remember one of the classes I taught in 1995 at our Mangalore Development Center. It was a small rented building and we had a batch of 30 new trainees. At that time, all of us used to teach programming basics and database management to all our new employees. Teaching was integral to our jobs because we wanted to create an environment where everyone was expected to participate in the education process and build long-lasting bonds with our employees. Those trainees still remember the classes I taught. Today, many of them are part of the senior management at Infosys.

Since the beginning, we had recognized the significance of education in the growth of an individual, a company and that of a nation. We believed that to create a learning organization, our employees must constantly learn and grow professionally through various phases of their development and life. While our formal education department, what is now known as Education & Research (E&R), was not created until 1991, the underlying foundation was always present.

As we grew, there was a need to scale and address predictability. Thus, we started our Education & Research (E&R) department, a function charged with the responsibility to educate and train our employees with a highly competent, full-time faculty. Meanwhile, the economic reforms gave a fresh impetus to the IT industry and was growing so rapidly that availability of talent was a serious

concern. The number of engineering graduates who specialized in computer science was insufficient.

While we were scaling up, we realized that it was imperative to build our own education department as a core competency rather than outsource the training to third-party vendors.

With the adoption of global quality standards in the early Nineties, education and training, like all other key organizational processes, was integrated with our quality function. Having a dedicated department for education meant that we could aim at the standardization of our training programs.

Over the years, an incredible amount of material has been created and this has become the main pillar of our successful training programs. Our approach to education was always innovative — we identified several gaps in the prevailing education system and created our own processes by experimenting with various learning methodologies. Our educators were associated with real-life projects and this helped them in designing courses that were comprehensive, inter-connected and relevant.

Initially, our approach to learning was distributed. Every Development Center had its own team and employees, and trainees had to move often across locations to complete their training. We decided that creating a centralized and strategic infrastructure

The education and research journey

S. GopalakrishnanChief Executive Officer and Managing Director

30 years of Infosys


would address our growth. With this intent, the Infosys Global Education Centre (GEC), Mysore, was established. The GEC is the largest corporate education center in the world. It is a symbol of not just our commitment to education and lifelong learning but also of our journey as an organization — from a batch of 30 trainees whom I taught in 1995, to a facility that currently hosts over 14,000 trainees.

The GEC catapulted the growth of our E&R capabilities many times over. Spread over 337 acres, the GEC is one of the largest classical buildings in independent India. We currently employ over 300 faculty members to provide standardized, comprehensive education and training at the GEC.

While we added new services to our business portfolio, we transitioned from being a technology solutions company to a business solutions company. New services such as consulting, package implementation, systems integration, infrastructure management, independent validation and business process management necessitated the creation of an equipped workforce. Our training programs have been dynamic to take these new challenges in their stride and rapidly create new training streams.

Apart from entry-level training, we have always believed that lifelong learning is crucial to build a sustainable and competitive advantage. Our continuous learning programs are in line with the needs of our clients and the emergence of new technologies, and are based on the role competencies being performed at a business vertical along four dimensions – technology, client business domain, processes, and behavioral skills.

We have also linked the learning and performance management processes and our certification programs assess the knowledge of an individual with relevance to a specific role. We have successfully conducted an incredible 2,00,000 assessments in the last year alone.

We introduced knowledge management into our work culture before it became a popular term. We had a system called the Body of Knowledge (BoK), which consisted of a folder that was placed on the company librarian’s desk. Individuals or teams would share their problem-solving experience as a report and file it into this folder for everyone to access.

Following the rapid growth in the Nineties, we realized we had to expand its scale, considering our geographic spread, technological flux and functional specialization. It was at this time that our E&R department began developing Knowledge Management (KM) as a strategic initiative.

The Infosys KM solution has grown to meet our changing needs. We developed additional features around the KM solution to support collaboration, namely, the KM portal – a central repository for content; People Knowledge Map – a directory service for locating experts; Knowledge Exchange – a set of online discussion forums; and KMail – an auto-response generator and workflow engine for answering questions. Together, these have enabled us to leverage organizational knowledge in a systematic manner.

It is beyond doubt that education influences the development and growth of a country’s economy. Over the last 30 years, the Indian IT industry has grown to become the largest employer in the country’s organized private sector. While India has produced a large number of engineering and science graduates, the varying quality of education is a cause for concern. At Infosys, education has always been a fundamental principle, extending beyond the growth of our organization.

As a major stakeholder in the global aspirations of the Indian IT industry, we were concerned with this issue and we decided to create a program that could help narrow this gap. This vision led to the creation of the Campus Connect Program, a unique industry-academia interaction that seeks to reach upstream with the education system and align the capabilities and outcomes of the educational institutions with the needs of the IT industry. Today, Campus Connect is proud to be associated with almost 530 engineering institutions and has successfully trained over 1,20,000 students.

The scope of education, research and training cannot be confined within the walls of a corporate organization. Learning begins at the level of the individual, and scales the levels of team, organization and country, before

finally making a global impact. At Infosys, we recognize that the superstructure of a globally competitive and sustainable business transformation can only be built upon a strong base of learning and education.

From a humble learning organization to a pioneer in the field of industry-academia partnerships, it has been a journey where we have learnt as much as we have taught. I feel proud when I see the Infosys education and research wagon filling up with new and eager learners every year. Empowered by learning, these young Infoscions will create value for our clients, shareholders, their fellow Infoscions, and the society at large.

From a humble learning organization to a pioneer in the field of industry-academia partnerships, it has been a journey where we have learnt as much as we have taught.

30 years of Infosys


Building world-class infrastructure – realization of a dream

Today, Infosys is recognized globally as a company with one of the best infrastructure. It all started with a dream – of having our own campus in Bangalore. In 1992, the Karnataka government allocated four acres of land in Electronics City, Bangalore to us. It had a challenging terrain and poor accessibility and entailed a cost of R 17.22 crore when our revenues for fiscal 1992 was only R 8.66 crore. This didn’t deter us and an IPO was floated to raise funds for building the campus. It was to have a built-up area of 1,60,000 sq. ft., with a capacity to seat 1,000 people, low cost yet elegant, modern yet traditional. It was completed in 11 months, with Murthy overseeing the project himself. It soon became the most visited corporate campus in India, with over 70 heads of state and global political leaders visiting it. Today, the Bangalore campus has grown to 81 acres, a distributed low-rise campus of 4.2 million sq. ft. of built up space, 26,850 seats, large air-conditioning plants, a 2.5 MLD waste water recycling plant, a helipad, cricket, football and hockey grounds, a 487-room hostel, a 1,350-seater auditorium, an experience theatre, seven food courts, swimming pools, gyms, a bookstore, a convenience store, bank branches, a laundromat, ATMs, along with a multi-level parking lot for 1,600 cars and 1,750 two-wheelers and a bus station for 75 buses. It has redefined the way the IT industry operates in India. Our persistent efforts to improve infrastructure in our campus and connectivity to it have resulted in more than 75% of employees

commuting to work by public transport. Till date, we have invested R 1,830 crore in the infrastructure of the campus and it generates revenues to the tune of R 7,900 crore annually.

In 1995, we decided to start an office in a smaller city and selected Mangalore as the first center outside Bangalore, attracted by the high educational standards of the city. In December 1995, we opened our Mangalore center and soon expanded it to 15,000 sq. ft., with 300 seats. In 1999, we bought a semi-built bus station at an auction from the government, refurbished it with 1,400 seats, and soon outgrew this too. In 2006, we purchased 325 acres of SEZ land on top of a beautiful, green hill overlooking the sea. Today, this has 6,27,000 sq. ft. of built-up space, with 3,350 seats, a food court and a hostel. Another 6,14,000 sq. ft. is under construction, with a capacity of 2,500 seats. We are creating a bio-park and have planted around 75,000 indigenous trees and built seven large artificial lakes for rainwater harvesting to make this a self-sustaining campus.

In 1996, as the company grew, we set up our operations in Pune. It was in a rented space with 450 seats. In 1998, we built a 25-acre campus with 4,300 seats. Outgrowing this, we acquired 114 acres in 2003 which, when completed, will have 6.5 million sq. ft. of built-up space, seating 34,000 people. We experimented with interesting architecture, constructing large space frame buildings, a 15-level multistoried hostel with 1,000 rooms and large water harvesting

T. V. Mohandas PaiDirector and Head – Administration, Education and Research, Finacle, Human Resources Development and Infosys Leadership Institute

Ramadas Kamath U.Senior Vice President and Head – Administration, Commercial, Facilities, Infrastructure and Security

30 years of Infosys


reservoirs. We also built one of India’s first all-steel, 11-level parking lot for 2,000 cars and 1,000 two-wheelers and a bus station.

Down south, we started our operations in Chennai at the same time as in Pune, and again in a rented place. In 2000, we started our own campus at Sholinganallur. This campus has a built-up area of 5,00,000 sq. ft., with a seating capacity of 3,700. We added a second campus in a 129-acre space in Mahindra City SEZ. This campus today has 2.5 million sq. ft. of built-up area, with 16,000 seats, and a 1,000-room hostel. Another 3.9 million sq. ft. with 15,000 seats is under construction.

In 1999, we acquired 100 acres of land to build the Infosys Leadership Institute (ILI) and a software development building (SDB) in Mysore. What had started as a campus with an ILI building, a 96-room hostel, an SDB and two food courts, has today grown to be the largest Infosys campus, with a total area of 337 acres. We expanded our SDBs and soon decided to make Mysore the center for our global training by building the Global Education Center (GEC 1). In 2009, we built GEC 2, which is one of India’s largest single buildings, a 1.02 million sq. ft. classical structure, with classrooms for training 9,200 employees at a single sitting, 300 faculty cabins, a large food court with 2,000 seats, a huge library, boardrooms, and a very large atrium, making it the largest corporate university in the world today.

Today our education infrastructure can train about 14,000 trainees at one sitting. It has a 10,100-room hostel and ten food courts. It also has induction rooms, a four-stage multiplex-cum-auditorium area, an employee care center of 1,10,000 sq. ft., with a large swimming pool, indoor sports complex, convenience stores, a medical center, a cricket stadium, athletic tracks, a football ground, a climbing wall, India’s largest laundry, and many other amenities. Overall, the campus has 9 million sq. ft. of built-up space with an investment of over R 2,330 crore, and another 3 million sq. ft. is being planned. This campus also has large water and waste water treatment plants, power generation facilities and is a mini city in itself. We built eight artificial lakes to harvest rainwater, which has helped us meet 60% of our fresh water requirement in-house. We have planted over 40,000 trees, making it home to 63 species of birds and countless varieties of butterflies.

After the initial occupation of rented premises in the High Tech city, we moved to our own 50-acre campus in Hyderabad in November 2001. This campus has 1.8 million sq. ft. of built-up space, with 10,000 seats. Further growth led us to start work on a 450-acre campus. We are building one of India’s largest software development campuses, with the first phase of 2.9 million sq. ft. with 14,000 seats, built at an investment of R 980 crore. With the addition of the second phase, it will have a total built-up area of 4.7 million sq. ft. and 25,000 employees, water harvesting facilities, innovative air-conditioning technology saving 30% of our energy consumption, and all buildings adhering to the highest LEED standards. With a verdant landscape, 70 species of birds, 66 species of butterflies, and 265 species of plants all carefully preserved, we propose to make this one of the greenest IT campuses.

In 1997, we expanded east to Bhubaneswar. The state government gave us a rented building meant for a government department. Soon we purchased a 46-acre plot for a new campus and occupied it in January 2001. Today, this campus can accommodate 4,000 employees. It also has innovative landscaping and green building exteriors making it visually appealing.

In Chandigarh, we outgrew our modest office in Mohali and purchased 30 acres of land in the SEZ for a new campus and occupied this in 2006. Today this has 1.1 million sq. ft. with 5,300 seats. We also have 200 acres in Jaipur currently, along with an Infosys BPO building with 3,500 seats. We will soon be commencing the construction of new buildings for the parent company in this campus.

In Thiruvananthapuram, we acquired 50 acres in January 2001 and we will be building one of the largest IT parks in Kerala. It has a unique architecture, with SDBs in the shape of ships and will have 2.4 million sq. ft. built-up area and seats for 10,000 employees once it is completed.

An incredible journey

What was just a dream in 1992 has become an unbelievable journey with 28 million sq. ft. of built-up space and 1,23,000 seats as of March 31, 2011. We are currently building another 8.3 million sq. ft. with 40,000 seats. Soon we are starting a US$ 150 million campus in Shanghai for 8,000 seats. We have invested R 9,450 crore so far, with a commitment of another R 2,500 crore to complete what we started. Our infrastructure needs are very large. As of fiscal 2011, we have a power demand of 81 MW, diesel generating capacity of 134 MW, 48,000

tons of comfort air conditioning, UPS capacity of 45 MW, fresh water storage of 33 million liters, waste water treatment capacity of 16 million liters, diesel storage of 1,700 KL, a laundry capacity of 7.3 tonnes per day, 35 food courts capable of feeding 40,000 people in a single sitting, training facilities of 25,000 seats, 13,800 hostel rooms, over 2,25,000 trees and 2,085 acres of land across the globe. We have a total network bandwidth of 6,700 Mbps connecting over 1,50,000 desktops, 37,500 laptops and 5,500 servers globally. Till date, we have created parking spaces for 9,500 cars and 15,300 two-wheelers in our Indian campuses for the comfort of our employees. Another seven multi-level parking lots are under construction for 13,800 cars and 15,500 two-wheelers to cater to our ever increasing employee strength. However, 70% of our employees still use public transport to commute to work as a result of our sustained focus on encouraging mass transport.

What started as a dream of a campus of 1,60,000 sq. ft. has grown into a mammoth network, built to the highest standards, within the shortest possible time, following the best environmental principles, with a per capita energy consumption of only 230 units per month.

What was just a dream in 1992 has become an unbelievable journey with 28 million sq. ft. of built-up space and 1,23,000 seats as of March 31, 2011. We are currently building another 8.3 million sq. ft. with 40,000 seats.

30 years of Infosys


As we enter the thirtieth year, my thoughts go back to 1986, when I joined Infosys, then operating out of a two-storey building in Bangalore. That period is still so vivid in my memory. While studying engineering, I had realized that being an electrical engineer for life was not my cup of tea. A chance encounter with my neighbor, Bala Kuthiyar, changed my destiny. He was working with Infosys and had been sent abroad. That, and an opportunity to move out of electrical engineering, was motivation enough for me to apply. Narayana Murthy and N. S. Raghavan interviewed me and I was lucky to be selected. I joined Infosys at a princely salary of R 1,500, much to the dismay of my well-wishers, ignoring three other wonderful job offers.

Twenty-five years is a long period. But for me time has elapsed too fast. It has been an absolute dream working here and I have enjoyed my tenure here to the fullest. Today, as I reflect on my 25-year tenure, I believe that Infosys has delivered on its vision, creating a truly outstanding company with a distinct corporate culture, one in which every Infoscion can take a great deal of pride. I am deeply proud of its accomplishments and more so of the team of people responsible for its ongoing success. While there have been several milestones, in my perspective, the following stand out as particularly memorable.

I was deputed to travel onsite to the U.S. within a couple of months of joining the company. Until then, I had never lived away from my family. I had wonderful colleagues who helped me settle down both professionally and personally. I spent over three years in the U.S., traveling across multiple locations, often on single-person projects. I also spent a year in the U.K., consulting at Reebok, perhaps the first project for Infosys in Europe. These three-plus years was an intense learning period for me.

Our Global Delivery Model (GDM) evolved in the early Nineties and we set up our first Offshore Development Center (ODC) for GE. The big moment for me was when we won a contract from Reebok (France) to build a state-of-the art information management system. We christened it as the Distributor Management Apparel Package (DMAP), also called ‘Dinesh, Murthy and Prahlad’, as they were actively involved. This was one of our early efforts at creating a product that leveraged our deep domain knowledge.

We worked in shifts and the compilation took ages making us disciplined coders. While it was hard work, we did have our share of fun and learning and it was teamwork at its best. I still remember the endless arguments with K. Dinesh on the need for hardware upgrades and his insistence that we have staggered lunch breaks and ensure 100% utilization to justify the upgrade costs.

Growing tall with Infosys

U. B. Pravin RaoSenior Vice President and Head – Retail & Infrastructure Management Services

30 years of Infosys


Around the same time, we sold the DMAP to Reebok U.K., Reebok Canada and Reebok International. I was personally involved in selling and implementing the product at Reebok U.K. and later to Reebok Canada. We were competing with another well-known product and it was a great experience learning the art of client-stakeholder management from K. Dinesh.

When I look at today’s dominant Retail ERP packages, I believe DMAP had rich and comparable features even in those days, and perhaps this was a missed opportunity for Infosys not to market DMAP beyond Reebok. Another significant milestone was Infosys going public in 1993 and being listed on the Indian stock exchange. A majority of us did not realize its significance and bought a few 100 shares out of a sheer sense of patriotism. It has turned out to be one of the most profitable investments made to date. Infosys also launched the ESOP plan in 1994 thus becoming one of the first companies in India to make this kind of an offer. It created a strong sense of ownership amongst our employees and helped strengthen the Infosys brand.

The mid-nineties saw Infosys move its corporate headquarters to Electronics City, Bangalore, an unpopular move with employees at that time. This was perhaps one of the finest examples of futuristic thinking on the part of the Infosys board and I have seen many such examples along the way.

While today we take our laptops and smart phones for granted, I still remember the times when we had debates about how many people would share a PC. During this period, I was involved in Infosys winning the largest development project for implementing a policy management system for a leading re-insurance company in the U.S.

The late Nineties saw Infosys expanding its service footprint by introducing Enterprise Solutions and IBCS (consulting practice). We leveraged our knowledge in implementing Y2K solutions and expanded our client portfolio. In 1999, we were listed on the NASDAQ, a proud moment for all of us and an important step towards creating a global Infosys brand.

We also benefitted tremendously from the dotcom boom. I was at that time heading delivery for the Europe region. This gave me an opportunity to understand the European market, the challenges around language, culture and client relationships. It contributed significantly to my professional development.

The dotcom bubble burst in 2001 and led to challenging times for Infosys. We were forced to take some tough measures. Employee satisfaction plummeted to unprecedented lows. Nandan, the then CEO, provided assurance that corrective steps would be taken. An initiative was launched to identify the root cause for employee dis-engagement. I was actively involved in the initiative and experienced firsthand the efforts of the organization to stay true to its core values in tough times as well. My faith in Infosys has been reinforced through this and many other subsequent experiences.

One of the most satisfying periods for me has been my current stint as Unit Head, Retail CPG and Logistics (RCL). RCL was the first vertical to be formed in November 2002. It has been a wonderful journey with industry-leading performances in many parameters. We have won accolades both from our clients as well as from industry analysts, we have been featured in several journals and publications such as Fortune and Business Week.

We have contributed to Infosys’ aspirations of moving up the value chain and IP-led growth through our solutions such as the ST360, iConnect, digital commerce / marketing platforms, and competitive intelligence. The proudest moment for us was when a RIS News survey of leading Retailers in North America, rated Infosys as the number one IT and consulting service provider for the retail

industry.

I cannot express how grateful I am for the opportunity and privilege of working with Infosys. It has been an extremely fulfilling and enriching experience both at a personal and professional level. Very few people get the opportunity to be part of a successful growth story like Infosys and work closely with a visionary and caring leadership like that of our founders, led by Narayana Murthy. In these years, I have grown with the organization, celebrated success, learned from the losses and have had the good fortune of working with the brightest minds in the industry. It did not take long for me to realize that this is a special company.

While many things have changed over the years, our core values, our pursuit of excellence and customer delight, employee-friendliness and tremendous personal sacrifice that each one at Infosys offers to ensure that our clients are successful, have remained the same. I am

confident that with the consistent contributions from Infoscions and support from all stakeholders, we will be a global consulting giant and an organization that we can continue to be truly proud of, in the decades to come.

I have grown with the organization, celebrated success, learnt from the losses and had the good fortune of working with the brightest minds in the industry. It did not take long for me to realize that this is a special company.

30 years of Infosys


I had the extraordinary privilege of steering the Human Capital Management strategies at Infosys for the better part of the first twenty years of its growth period. Justifying the Infosys tagline, “Powered by intellect, driven by values”, coupled with our mission to make Infosys a globally respected corporation, put an enormous responsibility on all of us, to build high-capability human resource teams and concurrently develop and nurture a value-driven organizational culture.

We identified at a very early stage, that ‘learnability’ was the most critical factor for success in the software profession. We defined learnability as “the ability of the individual to make generic inferences from specific experiences and being able to apply such knowledge in new unstructured situations”.

To be truthful, we were not, at that stage, exposed to the theory of multiple intelligences developed later by Dr. Howard Gardner of Harvard University. However, we quickly realized that Logical-Mathematical Intelligence, or abilities in numbers and reasoning, was essential to do well in this field. I set about developing and validating a series of tests that could measure these attributes with a certain degree of reliability.

We also believed that not all of our software professionals need to be drawn only from the pool of Computer / Electronics / Electrical Engineering graduates. We decided to enlarge the catchment area

for better access to larger numbers of bright students with high levels of logical-mathematical intelligence.

We were, perhaps, the first blue-blooded software company in that period to recruit fresh engineers from a variety of backgrounds – such as Mechanical Engineering, Civil Engineering, Naval Architecture and Metallurgical Engineering. To select the best, we relied on the Arithmetical Reasoning (AR) and Analytical Thinking (AT) tests that were personally designed and developed by me. These tests were considered to be tougher than the GMAT / GRE tests, and soon, Infosys acquired the ‘elitist’ tag – word went round that only the brightest engineers could get into the company.

Our faith in our tests was so strong that we even rejected a high rank-holder from an IIT, simply because he did not get the qualifying marks in our tests. The most piquant situation was when Murthy insisted that I request Prof. K. V. Viswanathan, at that time Computer Science professor at the prestigious IIM, Calcutta, to take these tests. We were interviewing Prof. Viswanathan for the position of Head of Education & Research and fortunately for me, he was more than willing to take the tests. Not only did he do well in the tests but went on to build the most effective E&R division at Infosys. Today, the world-class training center in Mysore is equipped to train 14,000 employees and Fortune magazine has called it the “Taj Mahal of training centers”.

Human capital management

N. S. RaghavanEmployee No. 1 of Infosys

30 years of Infosys


The most daunting responsibility, however, was creating and nurturing an organizational culture that emphasized the right set of values, so that we could build an institution of lasting value, one that we could be truly proud of in the decades to come.

It was clear to us that the strongest foundation for Infosys had to be laid by the large contingent of our exemplary senior management. Some of the critical qualities that the senior leadership needed to demonstrate by personal example were displaying high levels of transparency, creating trusting relationships, promoting merit and performance-driven rewards and recognition systems, encouraging a culture of bold innovations with a willingness to venture into unchartered territories, and most critically, engendering a sense of ownership among Infoscions by sharing the wealth that they helped to create.

I personally believe that the most significant intervention for emotionally engaging Infoscions was the creation of Employees Stock Offer Plan (ESOP), long before any regulatory guidelines were available. I remember the prolonged discussions with Murthy on ESOP distribution strategies. Murthy was of the opinion that substantial amounts of ESOPs should be given to a smaller percentage of employees who were outstanding performers. I argued that while a small set of people did merit high rewards for their outstanding contribution, the real infrastructure for the growth of Infosys was being built by a large number of very good, but not necessarily outstanding contributors. These professionals also needed to be recognized and rewarded to ensure sustained growth.

Finally, we came up with an optimal solution where the outstanding contributors were given large numbers of ESOPs through the ‘Chairman’s quota’ whereas most of the good performers earned smaller number of ESOPs over a period, based on their yearly contributions. The ‘elitist’ Chairman’s quota was based on recommendations sent to Murthy, where as the egalitarian ESOP distribution was based on a system of phased allocations for people at various levels.

With this, we created the largest number of dollar and rupee millionaires by any company, and more importantly, created a sense of ownership and belonging among all our employees. Carrying on this tradition, Infosys, on entering the 30th year of its inception, provided shares from the Infosys Employee Welfare Trust to all employees based on their number of years of service at Infosys.

As a measure of our commitment to transparency and openness, I made it a point to visit all Infosys campuses in April every year, to personally explain the rationale behind the salary revisions, promotions, loan policies, ESOP allocations, etc. To demonstrate our genuine interest in employee feedback, I incorporated any good suggestions from employees into the policy framework.

I remember that one year, I made a marginal change in the remuneration of professionals with Computer Science degrees. This was meant mainly to address the longstanding complaint that it was unfair to treat Computer Science graduates with four years of relevant education, on par with, say, a civil engineer who had no such background and needed to be fully trained at Infosys. I decided, therefore, to give a token increase in remuneration

to the Computer Science graduates. However, I was surprised to receive very strong negative feedback from all non-Computer science graduates, many of whom were rank holders from their universities. They were very unhappy that the commitment I had made in the campuses that all graduates would be treated as equals was being violated, albeit in a small way. It was the principle of honoring a commitment that they were insisting on and not the amounts involved. I accepted the fairness of the argument and immediately converted the small extra payment to Computer Science graduates into an extra allowance and restricted this payment to that year alone.

Over the years, the innovative HR strategies at Infosys have been receiving accolades worldwide, with the latest being the Global HR Excellence award 2010 by the World HRD Congress in January 2010 for the ‘Most Admired and Best HR Team’. Given the complexity of managing a highly talented workforce

of more than 1,30,800, drawn from more than 85 nationalities and deployed across the globe, Infosys can be truly proud of its performance in the area of Human Capital Management.

I personally believe that the most significant intervention for emotionally engaging Infoscions was the creation of Employees Stock Offer Plan (ESOP), long before any regulatory guidelines were available.

30 years of Infosys


Historical data

Notes : The above figures are based on Indian GAAP standalone financial statements. (1) Excluding extraordinary / exceptional items.

in r crore, execpt per share data

30 years of Infosys


Contents

Letter to the shareholder .......................................... 2

The year at a glance ................................................. 4

Board and committees ............................................. 5

Directors’ report........................................................ 7

Management’s discussion and analysis .................... 19

Risk management report .......................................... 28

CEO and CFO certification ........................................ 30

Abridged financial statements .................................. 31

Balance sheet abstract and the Company’s general business profile ............................................ 42

Consolidated financial statements ........................... 43

Corporate governance report .................................... 63

Shareholder information ........................................... 74

Global presence ........................................................ 81

Notice of the 30th Annual General Meeting


2 | Letter to the shareholder

Letter to the shareholder

Dear Shareholder,

Fiscal 2011 was a year of improved performance, recovery, consolidation and new explorations for us. The global economic climate posed several challenges, but we made the best use of our resources and abilities for growth. At the beginning of the fiscal, we had projected a revenue growth of 9% to 11% in rupee terms and 16% to 18% in US$ terms. At the end of the fiscal, we achieved a growth of 20.9% in rupee terms and 25.8% in US$ terms.

Some of our verticals and service lines were high achievers in this fiscal. The performance of our retail vertical helped us emerge first among the global retail IT service providers in 2010. We were adjudged second among the ‘Global Outsourcing 100’ by the International Association of Outsourcing Professionals. The strong customer-driven vertical focus that we have created has helped us take advantage of the opportunities we identified in the market.

The overall performance for the year spelled growth, both for us and for our clients. Our International Financial Reporting Standards (IFRS) consolidated revenues for this fiscal stood at R 27,501 crore, a year-on-year growth of 20.9%. The profit after tax was R 6,823 crore, a year-on-year growth of 9.7%. In accordance with the IFRS, our annual revenue for fiscal 2011 was US$ 6,041 million, a year-on-year growth of 25.8%, while our net income registered a year-on-year growth of 14.2% to stand at US$ 1,499 million.

Out of the total revenue, 65.3% came from North America, 21.5% from Europe and 11.0% from the Rest of the World. The number of our million-dollar clients grew to 366 in fiscal 2011 from 338 in the last fiscal.

We are pleased to announce a final dividend of R 20 per equity share (equivalent to US$ 0.45 per American Depository Share (ADS) at the prevailing exchange rate of R 44.40 per US$). The dividends are payable on the equity shares / ADSs outstanding as on book closure date, at the prevailing exchange rate on the payment date, and are subject to approval by the shareholders. Earlier in the fiscal, we paid an interim dividend of R 10 per share and a 30th year special dividend of R 30 per share.

Our world-class business consulting model, designed to help our clients build their enterprises of tomorrow through technology-driven transformation, won us several prestigious projects this fiscal. A large US-based retailer partnered with us on its strategy on mobile application development to complement its e-commerce offerings. A leading manufacturer of helicopters engaged us to transform business intelligence capabilities at the enterprise level. We performed a security audit assessment and remediation of Sarbanes-Oxley-based conflicts for a global food service retailer in its Oracle financial applications.

Kris GopalakrishnanChief Executive Officer and Managing Director

S. D. ShibulalChief Operating Officer and Director


Letter to the shareholder | 3

Our flagship offering for the banking industry, Finacle™, continued to grow its business, with 41 client wins this fiscal. We crossed another milestone as innovation partner to banks with the launch of Finacle Analyz™, a comprehensive analytics solution for banks to make faster decisions. Flypp™, the mobile application marketplace developed by us, helped us enter a strategic relationship for reciprocal licensing and distribution of applications with Mobile Streams, the global mobile content retailer. iEngage™, our digital consumer platform, is currently powering social media marketing, e-commerce and employee engagement programs for five Global 500 companies.

A number of prestigious awards and recognitions were bestowed on us this fiscal. The Boston Consulting Group ranked us among the top 10 value-creating technology and telecommunications companies. Our high standards of corporate governance earned us the recognition of the best company for corporate governance from Asiamoney. A FinanceAsia survey voted us the best company in management, corporate governance, investor relations, and corporate social responsibility in India. Another survey by the Wall Street Journal named us the most admired company in India. We thank the readers and investors for considering us worthy of these distinctions.

Our commitment to adopt sustainable business practices were recognized by India Carbon Outlook with the Sustainability Leadership award. Even as we plan to add 4.7 million sq. ft. of built-up area to our existing infrastructure, we adhere to the highest environmental standards — building LEED-certified structures, creating water harvesting facilities, adopting innovative air-conditioning technology, and making significant savings in energy consumption. We continue to promote green technologies and eco-friendly practices in our offices and for our clients.

As we step into the new fiscal, we also get ready to complete the thirtieth year of our operations. Needless to say, it has been a tremendous journey. An organization started by seven individuals is now a family of 1,30,820 Infoscions. What was started with a paltry capital of US$ 250 is now generating revenues in excess of US$ 6 billion. From the first major client win of Data Basics Corporation to 600-plus clients today; from a small rented office space in Pune to over 60 development centers worldwide — the journey has been exhilarating as well as humbling.

While we celebrate what we have achieved in these three decades, we must also bid farewell to the person who took the first steps with courage and conviction and made the rest of the journey easier for us. N. R. Narayana Murthy retires this year as Chairman of the Board. His contributions to Infosys, to the IT industry and to India need no reiteration. The Government of India recognized his achievements by conferring the Padma Vibhushan on him in 2008. He has received numerous awards and recognitions from around the world in the last several years. Every Infoscion is grateful to N. R. Narayana Murthy for his leadership by example and his support to their personal development. In recognition of his contribution to Infosys, the Board has decided to name him the Chairman Emeritus of the company.

The composition of the Board has undergone a few more changes. The Board has inducted two new members, R. Seshasayee and Ravi Venkatesan. We are confident that these two industry stalwarts will bring their experience, expertise and insights to our decision-making process.

K. Dinesh, Member of the Board and Head of Quality, Information Systems and the Communication Design Group, will retire by rotation at the forthcoming Annual General Meeting and has decided not to seek re-appointment. T. V. Mohandas Pai, Member of the Board, and Director and Head – Administration, Education & Research, Finacle, Human Resources Department, and Infosys Leadership Institute, has resigned as Member of the Board. The Board has decided to relieve him of responsibilities post the company’s Annual General Meeting on June 11, 2011. Both K. Dinesh and T. V. Mohandas Pai have been instrumental in the growth of the company, and we wish them success with their future endeavors.

On August 21, 2011, N. R. Narayana Murthy will retire as the Chairman and Chief Mentor. The Board of Directors on April 30, 2011 announced the following changes to the board : K. V. Kamath to be appointed as the Chairman of the Board; S. Gopalakrishnan to relinquish the post of Chief Executive Officer and Managing Director and be appointed as a Whole-time Director and designated as executive Co-Chairman of the Board; S. D. Shibulal to be appointed as the Chief Executive Officer and Managing Director. All the above appointments are effective from August 21, 2011.

We are on the threshold of yet another breakthrough in our journey towards adding greater value to our clients. We have unveiled Infosys 3.0, our new brand positioning that essentially marks our transition from a technology solutions company to a next-generation global consulting and services company, proactively helping clients build their enterprises of tomorrow. The global economy in general and the IT industry in particular have changed significantly over the past few years, requiring us to change our business strategy and realign our agenda with that of our clients. We have consolidated all our verticals under four heads : Financial Service and Insurance; Manufacturing; Energy, Utilities, Communications and Services; Retail, Consumer Packaged Goods, Logistics and Life Sciences. We have decided on three focus areas : business transformation, business operations and business innovation. We believe that the new strategy and structure will help us expand our global market by forging stronger strategic partnerships with our clients and increasing our relevance to all facets of their enterprise.

In keeping with our shift from being a technology solutions provider to a business transformation partner for our clients, the Board has decided to change the name of the company from ‘Infosys Technologies Limited’ to ‘Infosys Limited’. We are confident that this change will propel the organization forward to accelerated growth and sustain its leadership position in the industry.

We hope you will continue to support our new direction in the same way that you have stood by us over the years. At the end of this eventful and successful year, our thanks go out to you, our shareholders, and to our clients, the governments of various countries, our partners and our employees.

Kris GopalakrishnanChief Executive Officer andManaging Director

S. D. ShibulalChief Operating Officer andDirector

Bangalore

April 30, 2011


4 | The year at a glance

The year at a glance

Indian GAAP – standalonein r crore, except per share data

2011 2010 Growth (%) Financial performance

Income 25,385 21,140 20.1Gross profit 11,118 9,581 16.0Operating profit (PBIDTA) 8,414 7,360 14.3Profit after tax (1) 6,443 5,755 12.0EPS (1) (par value of R 5/- each) : Basic 112.26 100.37 11.8

Diluted 112.22 100.26 11.9Dividend Per share (2) 60.00 25.00 140.0

Financial positionCapital expenditure 1,152 565 103.9Fixed assets 4,555 4,188 8.8Cash and cash equivalents (3) 15,284 14,794 3.3Net current assets 18,391 13,141 40.0Total assets 24,677 22,268 10.8Debt – – –Net worth 24,501 22,036 11.2Cash and cash equivalents / total assets (%) 61.9 66.5 –Market capitalization 1,86,100 1,50,110 24.0

IFRS – consolidatedin r crore, except per share data

2011 2010 Growth (%) Revenues 27,501 22,742 20.9Gross profit 11,585 9,722 19.2Operating income 8,102 6,910 17.3Net income (4) 6,823 6,219 9.7EPS (4) (par value of R 5/- each) : Basic 119.45 109.02 9.6

Diluted 119.41 108.90 9.7

in US$ million, except per share data

2011 2010 Growth (%) Revenues 6,041 4,804 25.8Gross profit 2,544 2,055 23.8Operating income 1,779 1,460 21.8Net income (4) 1,499 1,313 14.2EPS (4) (par value of R 5/- each) : Basic 2.62 2.30 13.9

Diluted 2.62 2.30 13.9Notes : 1 crore equals 10 million

(1) Before exceptional item(2) Dividend includes 30th year special dividend of r 30 per share for fiscal 2011.(3) Includes investment in certificate of deposit of r 119 crore for the fiscal 2011; liquid mutual funds of r 2,317 crore and r 1,180 crore in certificate of deposit for fiscal 2010.(4) Includes income from sale of investments in OnMobile Systems Inc., U.S. of $ 11 million (r 48 crore), net of transaction costs, for the financial year ended March 31, 2010.

IFRS Consolidated (in R crore) IFRS Consolidated (in US$ million)


Board and committees | 5

The Board of Directors


S. Gopalakrishnan Chief Executive Officer and Managing Director


Prof. Marti G. SubrahmanyamLead Independent Director

Deepak M. SatwalekarIndependent Director

Dr. Omkar GoswamiIndependent Director

Sridar A. IyengarIndependent Director

David L. BoylesIndependent Director

Prof. Jeffrey S. LehmanIndependent Director

K. V. KamathIndependent Director

R. SeshasayeeIndependent Director

Ravi Venkatesan (1)

Independent Director

K. DineshDirector and Head – Communication Design Group, Information Systems, and Quality & Productivity

T. V. Mohandas Pai Director and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute

Srinath BatniDirector and Head – Delivery Excellence

Executive Council

S. GopalakrishnanChief Executive Officer and Managing Director Head – Executive Council



T. V. Mohandas PaiDirector and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute



Board and committees – Infosys Technologies Limited

Ashok VemuriSenior Vice President – Banking & Capital Markets, and Strategic Global Sourcing

Chandra Shekar KakalSenior Vice President – Enterprise Solutions

B. G. SrinivasSenior Vice President – Manufacturing, Product Engineering, and Product Lifecycle & Engineering Solutions

Subhash B. DharSenior Vice President – Communications, Media & Entertainment, Global Sales, Alliances & Marketing and Independent Validation Solutions

Board Committees

Audit committee

Deepak M. SatwalekarChairperson

Prof. Marti G. Subrahmanyam

Sridar A. Iyengar

K. V. Kamath

R. Seshasayee

Compensation committee

K. V. Kamath Chairperson

Dr. Omkar Goswami

David L. Boyles

Prof. Jeffrey S. Lehman

Nominations committee

Prof. Jeffrey S. LehmanChairperson

Deepak M. Satwalekar

K. V. Kamath

Investor grievance committee

Dr. Omkar GoswamiChairperson


Prof. Marti G. Subrahmanyam

R. Seshasayee

Risk management committee

David L. BoylesChairperson

Dr. Omkar Goswami

Sridar A. Iyengar

Prof. Jeffrey S. Lehman

(1) Appointed with effect from April 15, 2011.


6 | Board and committees

The Board of Directors

Infosys BPO LimitedT. V. Mohandas Pai Chairperson

D. SwaminathanChief Executive Officer and Managing Director

Jayanth R. VarmaIndependent Director


S. D. ShibulalDirector

Eric S. PaternosterDirector

B. G. SrinivasDirector

Infosys Technologies (China) Company LimitedS. D. ShibulalChairperson

V. R. RangarajanChief Executive Officer and Director

N. R. Narayana MurthyDirector

T. V. Mohandas PaiDirector

Srinath BatniDirector

Ashok VemuriDirector

V. G. DheeshjithDirector

T. P. PrasadDirector

Infosys Technologies (Shanghai) Company LimitedS. D. ShibulalChairperson

V. R. RangarajanDirector and Legal Representative


Infosys Technologies (Australia) Pty. LimitedK. DineshChairperson

Jackie KorhonenChief Executive Officer and Managing Director


V. G. DheeshjithDirector

U. B. Pravin RaoDirector

Subhash B. DharDirector

Infosys Consulting, Inc.S. D. ShibulalChairperson

Stephen R. PrattChief Executive Officer and Managing Director

Raj JoshiDirector

N. R. Narayana MurthyDirector

Ashok VemuriDirector

Chandra Shekar KakalDirector


Infosys Technologies S. de R. L. de C. V.Ashok VemuriSole Manager

Infosys Technologies (Sweden) ABS. D. ShibulalChairperson

Eric S. PaternosterDirector

Rajesh KrishnamurthyDirector


Infosys Public Services, Inc.Prof. Jeffrey S. LehmanChairperson

Eric S. PaternosterChief Executive Officer and Director

S. D. ShibulalDirector


Infosys Tecnologia do Brasil LtdaPuneet Singh GillLegal Administrator

Board and committees – Subsidiaries

The Infosys Board of Directors

Standing : Ramaswami SeshasayeeIndependent Director

Deepak M. SatwalekarIndependent Director



Ravi VenkatesanIndependent Director



Dr. Omkar GoswamiIndependent Director

Prof. Jeffrey S. LehmanIndependent Director

David L. BoylesIndependent Director

Sitting : K. V. KamathIndependent Director

Prof. Marti G. SubrahmanyamLead Independent Director



T. V. Mohandas PaiDirector and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute

As of April 15, 2011

The Infosys Executive Council

Standing : T. V. Mohandas PaiDirector and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute

Ashok VemuriSenior Vice President – Banking & Capital Markets, and Strategic Global Sourcing

B. G. SrinivasSenior Vice President – Manufacturing, Product Engineering, and Product Lifecycle & Engineering Solutions



Chandra Shekar KakalSenior Vice President – Enterprise Solutions

Subhash B. DharSenior Vice President – Communications, Media & Entertainment, Global Sales, Alliances & Marketing, and Independent Validation Solutions

Sitting : V. BalakrishnanChief Financial Officer


S. D. ShibulalChief Operating Officer and DirectorAs of April 15, 2011

Directors’ report | 7


Directors’ report

To the members,

We are delighted to present the report on our business and operations for the year ended March 31, 2011.

1. Results of operationsin r crore, except per share data

2011 2010Income from software services and products 25,385 21,140

Software development expenses 14,267 11,559Gross profit 11,118 9,581

Selling and marketing expenses 1,219 974General and administration expenses 1,485 1,247

Operating profit before interest and depreciation (PBIDTA) 8,414 7,360

Interest – –Depreciation 740 807

Operating profit before tax 7,674 6,553Other income, net 1,147 919

Net profit before tax and exceptional item 8,821 7,472Provision for taxation 2,378 1,717

Net profit after tax and before exceptional item 6,443 5,755Income on sale of investments, net of taxes (1) – 48Net profit after tax and after exceptional item 6,443 5,803Profit and Loss account balance brought forward 13,806 10,305Amount available for appropriation 20,249 16,108Dividend

Interim 574 57330th year special dividend – interim 1,722 –Final 1,149 861Total dividend 3,445 1,434Dividend tax 568 240

Amount transferred to general reserve 645 580Amount transferred to capital reserve – 48Balance in Profit and Loss account 15,591 13,806EPS before exceptional item (2)

Basic 112.26 100.37Diluted 112.22 100.26

EPS after exceptional item (2)

Basic 112.26 101.22Diluted 112.22 101.10

Notes : r 1 crore equals r 10 million. (1) Income from sale of investments in OnMobile Systems Inc., U.S., net of taxes

and transaction costs. (2) Equity shares are at par value of r 5/- each.

2. Building Tomorrow’s EnterpriseDuring the year, we formally launched our new corporate strategy, Building Tomorrow’s Enterprise to showcase our plan for leading the services industry into the new era as the next generation global consulting and services company. In our journey to increase our client relevance and sustain industry leadership, we have made organizational changes towards creating Infosys 3.0 – a truly global enterprise partner for our clients to drive their transformational, operational and innovation priorities and helping them build their enterprise of the future.

To further our transition towards business-led consulting combined with innovative products and solutions, we have regrouped our existing industry units globally into the following groups :

• Financial Services and Insurance• Manufacturing• Energy, Utilities, Communications and Services• Retail, Consumer Packaged Goods, Logistics and Life Sciences

This transition will enable us to increase our client relevance, strengthen our strategic partnerships with our clients and evolve our business model.

It will help us to sharpen our industry vertical focus, allow us to invest in capabilities to deliver higher business value and align our innovation agenda with that of our clients. The new structure will also significantly expand our global market and provide opportunities for the next generation of leaders.

3. Business Our total income increased to R 25,385 crore from R 21,140 crore in the previous year, at a growth rate of 20.1%. Our software export revenues aggregated to R 24,791 crore, up by 18.8% from R 20,871 crore in the previous year. Out of the total revenue 66.2% came from North America, 20.7% from Europe and 10.7% from the Rest of the World.

Our revenues from India have increased from R 269 crore to R 594 crore, with a growth rate of 120.8% which is higher than that of the other regions. The share of the fixed-price component of the business was 42.1%, compared to 40.8% during the previous year.

Our gross profit amounted to R 11,118 crore (43.8% of revenue) as against R 9,581 crore (45.3% of revenue) in the previous year. The onsite revenues increased from 48.7% in the previous year to 50.2% in the current year. The onsite person-months comprised 26.5% of the total billed efforts, compared to 26.1% during the previous year. The Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to R 8,414 crore (33.1% of revenue) as against R 7,360 crore (34.8% of revenue) in the previous year. Sales and marketing costs were 4.8% and 4.6% of our revenue for the years ended March 31, 2011 and March 31, 2010 respectively. General and administration expenses were 5.8% and 5.9% of our revenues during the current year and previous year respectively. The net profit after tax was R 6,443 crore (25.4% of revenue) as against R 5,803 crore (27.5% of revenue) in the previous year. The net profit for the previous year includes income from sale of investments in OnMobile Systems Inc., U.S., of R 48 crore, net of taxes and transaction costs.

We seek long-term partnerships with our clients that enhance their value while addressing their IT requirements. Our customer-centric approach has resulted in high levels of client satisfaction. We derived 98% of our revenues from repeat business. We, along with our subsidiaries, added 139 new clients, including a substantial number of large global corporations. The total client base at the end of the year stood at 620. Further, we have 366 million-dollar clients (338 in the previous year), 187 five-million-dollar clients (159 in the previous year), 126 ten-million-dollar clients (97 in the previous year), 28 fifty-million-dollar clients (26 in the previous year), and 11 hundred-million-dollar clients (6 in the previous year).

During the year, we added 19.86 lakh sq. ft. of physical infrastructure space. The total available space now stands at 276.63 lakh sq. ft. The number of marketing offices as at March 31, 2011 was 64 as compared to 65 in the previous year.

8 | Directors’ report


4. SubsidiariesWe have nine subsidiaries : Infosys BPO Limited, Infosys Technologies (Australia) Pty. Limited, Infosys Technologies (China) Company Limited, Infosys Consulting, Inc., Infosys Technologies S. de R. L. de C. V., Infosys Technologies (Sweden) AB, Infosys Tecnologia do Brasil Ltda, Infosys Public Services Inc., U.S., and Infosys Technologies (Shanghai) Company Limited. We have four step-down subsidiaries : Infosys BPO s.r.o., Infosys BPO (Poland) Sp.Z.o.o, McCamish Systems LLC, and Infosys Consulting India Limited.

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors’ report, Balance Sheet, and Profit and Loss account of our subsidiaries. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2010-11 does not contain the financial statements of our subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office in Bangalore, India. The same will also be published on our website, www.infosys.com

5. FinacleTM

Finacle™, our universal banking solution, partners with banks across the globe to power their innovation agenda enabling them to differentiate their products and services thereby enhancing customer experience and achieving greater operational efficiency.

FinacleTM is a comprehensive, flexible and fully web-enabled solution that addresses the core banking, treasury, wealth management, Islamic banking, consumer and corporate e-banking, direct banking, financial inclusion and mobile banking requirements of universal, retail and corporate banks worldwide. Other offerings in the FinacleTM universal banking solution include the FinacleTM Core Banking solution for regional rural banks; the FinacleTM Alerts Solution, which enables banks to alert end-users on events recorded by diverse business systems; FinacleTM Advizor, which combines the convenience of human intervention with banking self-service channels through the interplay of video, audio and data communication; and FinacleTM WatchWiz, a comprehensive new-generation monitoring solution that allows banks to monitor, diagnose and resolve issues. Our professional services complement the solutions portfolio and include consulting, package implementation, independent validation, migration, application development and maintenance, system integration, software performance engineering and support. These offerings make Finacle™ a strong innovation facilitator, enabling banks to accelerate growth, while maximizing value from their large-scale business transformation.

FinacleTM is chosen by 140 banks across 73 countries to power operations across 47,000 branches. Today, FinacleTM enables its customer banks to serve 390 million accounts and 289 million consumers worldwide. Finacle™ is also leading the financial inclusion agenda in India. Of the 82 regional rural banks in the country, 45 have opted to leverage FinacleTM across 9,900 branches. Independent reports by renowned research firms have positioned FinacleTM among the leaders in the global evaluation of retail core banking solution vendors. Finacle™ is one of the most scalable core banking solutions in the world with an unparalleled performance benchmark of 104 million effective transactions per hour for channel (non-branch) transactions and 41 million effective transactions per hour for branch transactions.

6. QualityWe continue our journey of delivering value to our clients through significant investments in quality programs. In September 2010, an enterprise-wide CMMi assessment was conducted by an SEI-certified high-maturity appraiser, and we were assessed at CMMi Level 5. This is the highest level of the CMMi assessment. SEI-CMMi

is the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model, which assesses the quality of an organizations’ processes and methodologies.

Our Quality department handles large change-management initiatives to drive quality and productivity improvements across the organization and is managed through the Balanced Scorecard and Infosys Scaling Outstanding Performance (iSOP) program.

During the year, the Quality department, in collaboration with multiple stakeholders across the organization, had developed a framework called ‘Business Value Articulation’ which ensures alignment of our approaches to deliver value to our customers. Some of our key initiatives are :

ENCORE : An initiative to promote reuse and reduce cycle time by creating and deploying reusable technical and business components.

i-Trim : A framework based on lean practices, focusing on eliminating non-compete activities to optimize process performance, addressing business and operational challenges in service delivery.

BrITe : Our customer centric, systematic, data driven methodology to create an impact on the business results and assist in maximizing profits.

Proso++ : An empirical model based on the best practices and execution experience of the delivery teams at Infosys.

We continue to focus on institutionalizing large initiatives. Some of our achievements in the area are listed below :

Infy Swift : Our differentiated methodology for the Global Delivery Model (GDM) to achieve faster time to market.

ESTEEM : This is our Centre of Excellence to enhance estimation maturity for improved predictability and de-risking of our client delivery.

TRANSCEED : Our initiative to enhance program management capabilities, including development of integrated systems and tools, relevant enabling / certification and ecosystem for collaboration / knowledge exchange.

ASCENT : A framework to provide a robust and integrated platform for account management that further facilitates account planning, monitoring and reviews.

PROSPER : A differentiated methodology for driving excellence in production support services.

TIDE : A solution that brings together tools, systems and processes across lifecycle stages and enhances data integrity by capturing accurate data.

We are certified under various standards to meet our client demands and improve value delivery. These certifications include TL 9000-SV, ISO 9001 : 2008, AS EN 9100, ISO 20000, BS25999, OHSAS 18001, ISO 14001, ISO 23026, ISO 27001 and ISO 13485. Infosys BPO has been certified for eSCM – SP v. 2.0 Level 5, the eSourcing Capability Model for Service Providers developed by a consortium led by Carnegie Mellon University’s Information Technology Services Qualification Center. Our Australia and Shanghai centers have been assessed at SEI-CMMi Level 5 and ISO 27001.

7. Infosys LabsInfosys Labs, launched as part of our strategic direction ‘Building Tomorrow’s Enterprise’, is responsible for driving innovation across the mega trends identified by us that will transform the businesses of our clients. Building on the successes of the award winning SETLabs, Infosys Labs will focus on the Company’s vision and enable customer co-creation, while continuing its focus on service differentiation and developing client-focused business solutions.



Organized as a global network of research labs and innovation hubs, Infosys Labs will :

• Undertake research to define the ideas behind Building Tomorrow’s Enterprise

• Identify large, multidisciplinary problem spaces that embody the challenges facing our clients and create technological solutions to solve them

• Create client-specific innovation agenda through co-creation and ensure business value realization

• Collaborate with universities and external research labs worldwide• Leverage global talent

During the year, more than 96 articles were published by Infosys Labs’ researchers in leading journals, magazines and conference proceedings. SETLabs Briefings, our highly respected peer-reviewed journal, published multiple issues this fiscal year, in areas such as e-Governance, Green IT, Business Platforms for Next-Gen Enterprise Packages, Leveraging IT for Better Performance, Service Oriented Performance, Digital Convergence and Perspectives on Software Engineering. Infosys Labs collaborated with leading national and international universities such as the University of Southern California, Indian Institute of Technology, Bombay – Monash Research Academy, Purdue University, IIIT, Hyderabad and IIIT, Bangalore.

During the year, Infosys Labs’ IP Cell filed 91 patent applications in the United States Patent and Trademark Office (USPTO) and the Indian Patent Office. We now have an aggregate of 357 patent applications pending in India and the U.S. The USPTO has granted us 22 patents.

8. BrandingThe Infosys brand is one of the most important intangible assets that we own. As part of the journey towards building a globally respected brand, we recently unveiled our new corporate strategy of ‘Building Tomorrow’s Enterprise’, to position Infosys as a next generation global consulting and IT services company.

During the fiscal year, our brand has been recognized by leading publications and independent industry bodies. We were :

• Ranked as India’s Most Admired Company according to the Wall Street Journal survey

• Voted the Most Admired Indian Company by peers in the Businessworld Most Respected Companies 2011 survey

• Acknowledged by the Harvard Business Review for our best practice in ‘The CEO’s Role in Business Model Reinvention’

• Awarded the NASSCOM Diversity Award for Innovative Programs

• Awarded the Sustainability Leadership award by India Carbon Outlook

• Awarded the CII National Award for Excellence in Energy Management 2010

Industry analysts rated us as a leader in reports across our key services and markets. The offerings for which we were rated highly include application outsourcing, infrastructure management, Oracle and SAP service providers, comprehensive finance and accounting, business process outsourcing, and for the FinacleTM core banking solution.

We saw a substantial increase in the number of visitors to our website and continued to add to the million-plus visitors to our blogs on business and technology-related topics during the year. Our employees contributed and published several thought leadership articles across various industry forums and publications. We leveraged social media platforms and engaged with our stakeholders and investors on YouTube, SlideShare, Twitter and Facebook.

Leading global publications commended us on our leadership, talent and performance. We continued to have a leadership presence at premier industry events like Oracle® Open World and Sapphire. Our annual client event, Confluence, in the U.S. and Europe were well attended, and highly appreciated. At the World Economic Forum

in Davos, Switzerland, our lunch panel discussion witnessed a full audience and the evening get-together hosted by us was attended by some of the most influential and powerful global business leaders.

9. Awards and recognitionIn 2010, as in previous years, awards and recognition marked our accomplishments in various fields. We were :

• The winners of the RMMY Best in Show award for the third year in a row

• Among the top 20 global companies to win the Most Admired Knowledge Enterprises (MAKE) Award 2010

• Named the best company for corporate governance in the Asiamoney poll

• Ranked among the top 10 value-creating technology and telecommunications companies by the Boston Consulting Group

• The winners (along with Telstra) of the Best ITSM (IT Service Management) Project of the Year, the top industry award given by itSMF Australia

• Voted the best company in management, corporate governance, investor relations, and corporate social responsibility (India) in a survey by FinanceAsia

10. Capital expenditureDuring the year, we capitalized R 1,017 crore excluding R 3 crore, which was due to the movement in land from leasehold to freehold to our gross block. This comprises of R 251 crore for investment in computer equipment. The balance of R 764 crore was due to infrastructure investment along with R 2 crore on vehicles. We invested R 225 crore to acquire 267 acres of land in Bangalore, Delhi and Mangalore.

During the previous year, we capitalized R 787 crore to our gross block. This comprised of R 140 crore for investment in computer equipment. The balance of R 646 crore was due to infrastructure investment along with R 1 crore on vehicles. We invested R 43 crore to acquire 161 acres of land in Hyderabad, Mysore and Mangalore.

11. LiquidityWe continue to be debt-free, and maintain sufficient cash to meet our strategic objectives. We clearly understand that the liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2011, internal cash flows have more than adequately covered working capital requirements, capital expenditure, investment in subsidiaries and dividend payments. As at March 31, 2011, we had liquid assets of R 15,284 crore as against R 14,794 crore at the previous year-end.

These funds have been invested in deposits with banks, highly rated financial institutions, certificates of deposits and liquid mutual funds.

12. Increase in share capitalDuring the year, we issued 3,26,367 shares on the exercise of stock options under the 1998 and 1999 Employee Stock Option Plans. As a result of this, the outstanding issued, subscribed and paid-up equity shares increased from 57,38,25,192 to 57,41,51,559 shares as at March 31, 2011.

13. Appropriations

DividendOur policy is to pay dividend of up to 30% of the consolidated net profit after tax of the group.

In October 2010, we paid an interim dividend of R 10/- per share and a 30th year special dividend of R 30/- per share. We recommended a final dividend of R 20/- per share (par value of R 5/- each), making in all R 60/- per share as dividend for the year.



The total dividend amount paid out is R 3,445 crore, as against R 1,434 crore in the previous year. Dividend (including dividend tax) excluding 30th year special dividend as a percentage of consolidated profit after tax is 29.3% as compared to 26.9% in the previous year.

The register of members and share transfer books will remain closed from May 28, 2011 to June 11, 2011 (both days inclusive). Our Annual General Meeting has been scheduled to be held on June 11, 2011.

Transfer to reservesWe propose to transfer R 645 crore (10% of the net profit for the year) to the general reserve. An amount of R 15,591 crore is proposed to be retained in the Profit and Loss account.

14. Corporate governanceWe continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas. We have undergone the corporate governance audit by ICRA and Credit Rating Information Services of India Limited (CRISIL). ICRA has rated our corporate governance practices at CGR 1. CRISIL has assigned CRISIL GVC Level 1 rating to us.

We have complied with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). For fiscal year 2011, the compliance report is provided in the Corporate governance section of the Annual Report. The auditors’ certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors’ report section.

We have documented our internal policies on corporate governance. In line with the committee’s recommendations, the Management’s Discussion and Analysis of the financial position of the Company is provided in this Annual Report.

During the year, we continued to fully comply with the U.S. Sarbanes-Oxley Act of 2002. Several aspects of the Act, such as the Whistleblower Policy and Code of Conduct, have been incorporated in our Company policy. Our Code of Conduct was updated to make it relevant and responsive to the changing needs of our business.

15. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to the directors’ report section.

16. Particulars of employeesIn terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the directors’ report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. The same will also be published on our website www.infosys.com

17. Directors’ responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us; and guidelines issued by SEBI on the historical cost

convention; as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

18. DirectorsThe Board inducted R. Seshasayee and Ravi Venkatesan to the Board. We seek your support in confirming their appointment as directors liable to retire by rotation.

In accordance with the retirement policy for the Company’s Board of Directors (‘the Board’), Claude Smadja, Independent Director, retired from the Board effective August 30, 2010. We place on record our deep sense of appreciation for the services rendered by Claude Smadja during his tenure as a Board member.

As per Article 122 of the Articles of Association, K. Dinesh, Srinath Batni, Sridar A. Iyengar, Deepak M. Satwalekar and Dr. Omkar Goswami retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, seek re-appointment, except K. Dinesh.

K. Dinesh has expressed his intention not to seek re-appointment. The Members of the Board place on record their deep sense of appreciation for the services rendered by K. Dinesh during his tenure as Member of the Board and Head of Quality, Information Systems and the Communication Design Group.

T. V. Mohandas Pai has resigned as Member of the Board and has requested the Board to relieve him of the responsibilities post the Company’s Annual General Meeting on June 11, 2011.

The Board of Directors considered and accepted the resignation of T. V. Mohandas Pai. The resignation is effective June 11, 2011, post the Company’s Annual General Meeting. The Members of the Board have placed on record their deep sense of appreciation for the services rendered by T. V. Mohandas Pai during his tenure as Member of the Board, and Director and Head – Administration, Education & Research, Finacle, Human Resources Development, and Infosys Leadership Institute.

19. AuditorsThe auditors, B S R & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

20. Fixed depositsWe have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

21. Human resources managementEmployees are our vital and most valuable assets. We have created a favorable work environment that encourages innovation and meritocracy. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high-caliber employees. We added 15,321 (net) and 32,247 (gross) employees this year, taking our total strength to 1,08,009 from 92,688 at the end of the previous year. We added 17,024 (net) and 43,120 (gross) employees this year, taking the total strength of the Infosys group to 1,30,820 from 1,13,796 at the end of the previous



year. Our attrition rate stands at 17.0% compared to 13.4% for the previous year. Over the last year, we received 8,29,800 applications from prospective employees and we continue to remain an employer of choice in the industry.

22. Education & ResearchContinuous education of our employees is of prime significance for us. We believe that this is necessary not only for our own sustainability and growth as an organization but also for enabling the professional development of our employees. In addition to the six month residential foundation program that we conduct for every fresh engineer who joins us, we also lay significant emphasis on the continuous education of our employees. The foundation program is designed to aid students in effectively transitioning from the academic world to the corporate world as qualified professionals.

During the financial year, the total training provided for Infoscions was over 1.5 million person days. During the year, we launched several novel programs to help enhance the business competency of our employees, in addition to introducing new programs aligned to evolving business needs.

We have made significant progress with the Campus Connect program aimed at building a robust industry-academia partnership. We deepened our relationship with several engineering institutions across India through the co-creation of several new electives introduced into their curricula. During the financial year, we engaged with 1,040 faculty members who in turn trained 33,000 students. With this the total number of faculty covered under the program is 5,600 and the number of students trained is 1,20,000 from 530 engineering institutions. The program has received international accolades such as the Corporate University Xchange Award for Excellence and Innovation for the year 2011. As part of SPARK, an Infosys program to expose students from high schools and universities to the world of IT and raise their aspirations, we engaged with over 1,75,000 students during the financial year. From its launch a little over two years ago, the program has reached out to over 2,80,000 students.

Our internationally acclaimed Knowledge Management program won the Global MAKE (Most Admired Knowledge Enterprise) award for the seventh time, the Asian MAKE award for the eighth time, and the India MAKE award for the sixth time during the financial year.

Our researchers published their articles and white papers in prestigious journals and conferences as well as in books and invited chapters in reputed publications.

23. Infosys Leadership InstituteThe Infosys Leadership Institute (ILI) was established with the aim of developing world-class corporate leaders. The institute helps to identify potential candidates and earmarks them for the training required to take on key leadership positions within the Company. The ILI’s Tier Leadership development hopes to produce and mould business leaders of tomorrow. The institute aims to be a globally recognized institution with a focus on training leaders capable of tackling current and future business challenges. The work done by the ILI helps not only in the identification of leaders but also in the nurturing of a leadership mindset and culture across the organization.

Over the last year, ILI has engaged in several activities to support and grow our group of high potential ‘tier leaders’ as well as advance the field of leadership development. The institute rolled out the Leadership Journey Series Assessment and conducted assessment feedback sessions as well as helped leaders plan and execute their personal development plans. It also developed structured roadmaps guiding development around the seven key Infosys leadership dimensions, as well as key initiatives such as Creating Client Value.

In 2010-11, ILI showcased thought leadership through collaborations with leading researchers from India and abroad, 12 conference presentations, one peer-reviewed journal article, several keynote presentations and most importantly, the release of the book, Leadership @ Infosys, which combines research and practice perspectives to capture the essence of what it means to excel as a leader at Infosys.

24. Sustainability initiativesSustainability is a commitment for us to align our strategy in all aspects of our business with our stakeholders in various dimensions such as economic, social and environment. Our focus areas are embodied in the following themes – social contract, resource intensity and green innovation – and are articulated in our Sustainability Policy. Social contracts are our implicit responsibility to the larger society, to factor in social and environmental aspects as important dimensions of our business. Resource intensity is about doing more with less resources – energy, water or material. Green innovation is about leveraging the opportunity for business leadership through sustainability.

The Infosys Sustainability Executive Council (ISEC) oversees the planning and progress of all our sustainability initiatives.

As part of our sustainability journey, many of our business units are pursuing innovation in green technologies and many of these have been implemented as solutions for our clients. Some of them are :

• iSustain : An enterprise carbon energy and resource management tool with sustainability reporting and performance management capabilities.

• InGreen Energy Management : Enables enterprises to reduce energy usage through automated tracking and identification of consumption patterns; opportunities for changes and reduction, reporting and analysis. It has helped us save energy usage and costs to the tune of 20%.

• InGreen Personal Carbon Calculator : Helps organizations create awareness among employees and measure their daily carbon footprint.

• iSmart : An intelligent power strip that can not only supply power from an electrical source to devices connected to it in enterprise environments, but also monitor their energy consumption level on a continuous basis.

• Integrated Real time Campus Management System (iRCMS) : An enterprise monitoring system that tracks and allows efficient energy management and prolong the life of energy equipment through surveillance. iRCMS helps enterprises with their manpower savings by allowing the facilities and business managers to take informed decisions based on consumption and demand related parameters of energy thereby helping buildings and real estates go green and sustainable.

This fiscal year, our Green Initiatives and the Voice of Youth teams successfully implemented several campaigns and initiatives for creating awareness and influencing our employees and stakeholders in reducing their carbon footprint. Some of the key employee-driven activities have been :

• Earth Hour : The global drive of WWF which led to 3,136 units (over 3.1 MWh) of electrical equipment load turned off during one hour across nine DC-locations in India.

• Infosys Megawatt Challenge : The Infosys Megawatt Challenge was launched at our U.S. offices to reward employees who brought about a reduction in their energy consumption over a period of six months and a positive outreach at their local communities.

• COP16 : Representation at the United Nations Climate Change Conference (COP16) held at Cancun as a member on the delegation from World Business Council for Sustainable Development.



As part of our commitment to social contracts, several of our employee-driven clubs and groups are actively involved in building an equitable society. Some of the significant programs this fiscal year have been :

• Notebook Drive : This initiative targets students of government schools who are not in a position to afford notebooks and stationery to pursue their academics. The NBD provides them stationery typically required by the beneficiaries for one academic year. We now reach out to 45,000 children in 400 schools and distribute more than 1,72,000 notebooks. More than 4,000 Infoscions worldwide are actively involved in organizing donation campaigns, purchasing notebooks, managing the logistics, and overseeing the distribution of school kits.

• SPARK : This program offers a learning environment that helps students realize their potential and assess their industry preparedness. The program partners with academic institutions to enhance talent pool as well as meet the demands of the IT industry. Launched in August 2008, SPARK is managed by 2,400 Infosys

volunteers across development centers. This year it has benefitted more than 1,75,000 students, 1,450 institutions and 6,200 faculty members.

• Karnataka flood relief : Infosys always responds to a humanitarian crisis by volunteering and pledging support. In October 2009, the northern districts of Karnataka were severely affected by floods after torrential rainfall. It claimed hundreds of lives and rendered millions of villagers homeless. Our employees joined hands to rebuild villages and undertake a mass housing project. Infoscions, together with the Board of Directors and the Infosys Foundation, contributed R 30 crore towards relief, rehabilitation and reconstruction. Under the auspices of the state government’s ‘Aasare’ scheme, we partnered with local NGOs to construct homes across 18 villages. The ongoing housing project serves as a model for sustainable development.

For more details on our sustainability initiatives, visit www.infosys.com

25. Employee Stock Option Plan (ESOP) We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :

1998 Plan 1999 PlanTotal grants authorized by the plan (no.) 1,17,60,000 ADS 5,28,00,000 sharesPricing formula on date of grant Not less than 90% of

fair market valueFair market value

Variation in terms NA NARatio of ADS to equity shares 1 ADS = 1 equity share NAOptions granted during the year (no.) – –Weighted average price per option granted (R ) NA NAOptions vested as at March 31, 2011 (no.) 50,070 40,232Options exercised during the year (no.) 1,88,675 1,37,692Total number of shares arising as a result of exercise of options 1,88,675 1,37,692Money raised on exercise of options (R crore) 13 11Options forfeited and lapsed during the year (no.) 3,519 18,052Total number of options in force at the end of the year (no.) 50,070 48,720Grant to senior management – –Employees receiving 5% or more of the total number of options granted during the year – –Employees granted options equal to or exceeding 1% of the issued capital – –Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 112.22 112.22

SEBI has issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period.

We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where the options are issued to the employees at an exercise price not less than the fair market value.

If the compensation cost on account of stock options granted after June 30, 2003 (as required by the amendment effective June 30, 2003) under 1998 and 1999 Plans was computed using the fair value method, our compensation cost would have been higher by R 1 crore. Our profit would hence be less by R 1 crore for fiscal 2010. The impact on EPS for fiscal 2010 would be R 0.01. For fiscal 2011 there was no stock compensation cost. During fiscal 2011 and 2010, stock options under the 1998 Plan and 1999 Plan have not been granted. Hence, the weighted average fair values of grant during these years are nil.



All stock options under the 1998 and 1999 Employees Stock Option Plans were granted at the prevalent market price on the date of grant. Accordingly, we have calculated the compensation cost arising on account of stock options granted using the intrinsic value method.

Hence, the disclosure in terms of Clause 12.1 (n) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not applicable.

2011 2010No. of options Weighted average

exercise price (R ) No. of options Weighted average

exercise price (R ) 1998 Plan

Outstanding at the beginning of the year 2,42,264 613 9,16,759 904Forfeited (3,519) 722 (60,424) 1,550Exercised (1,88,675) 600 (6,14,071) 854Outstanding at the end of the year 50,070 683 2,42,264 613Vested at the end of the year 50,070 683 2,42,264 613

1999 PlanOutstanding at the beginning of the year 2,04,464 869 9,25,806 1,248Forfeited (18,052) 964 (3,40,264) 1,968Exercised (1,37,692) 823 (3,81,078) 821Outstanding at the end of the year 48,720 962 2,04,464 869Vested at the end of the year 40,232 717 1,84,759 735

26. Infosys Science FoundationThe Infosys Science Foundation, a not-for-profit trust set up to promote research in pure and applied sciences, presented the Infosys Prize to scientists and researchers in the five categories of research listed below :

• Physical Sciences – Physics, Chemistry and Earth Sciences

• Mathematical Sciences – Mathematics and Statistics

• Engineering and Computer Science – All branches of Engineering

• Life Sciences – Biology, Medicine and Plant Science

• Social Sciences and Economics – History, Sociology, Anthropology, Political Science, Economics and International Relations

Nominations were evaluated by an eminent jury in each area, comprising outstanding international personalities selected by the trustees of the Foundation.

The Infosys Prize 2010 presentation was held in Mumbai on January 6, 2011. Laureates were felicitated by the Prime Minister of India, Dr. Manmohan Singh. The prize in each category comprised a 24 karat gold medallion, a citation and a cash grant of R 50 lakh.

For more details on the Infosys Science Foundation, refer to the website www.infosys-science-foundation.com

27. Infosys FoundationWe are committed to contributing to the society and established Infosys Foundation in 1996 as a not-for-profit trust to support our social initiatives. The Foundation supports programs and organizations devoted to the cause of the destitute, the rural poor, the mentally challenged, and the economically disadvantaged sections of the society. The Foundation also helps preserve certain cultural forms and dying arts of India.

A summary of the work done by the Foundation is provided in the Additional Information Report published on our website www.infosys.com. On your behalf, we express our gratitude to the honorary trustees of the Foundation for sparing their valuable time and energy for its activities.

28. Green initiativeDuring the previous fiscal, we started a sustainability initiative with the aim of being green and minimizing our impact on the environment. Like last year, this year too we are publishing only the statutory disclosures in the print version of the Annual Report along with the Abridged standalone financial statements prepared in compliance with the Section 219 of the Companies Act, 1956. Additional details are available on our website, www.infosys.com.

AcknowledgmentsWe thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the state governments, the Software Technology Parks (STPs) – Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mysore, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.

for and on behalf of the Board of Directors



Bangalore

April 15, 2011



IT infrastructureDuring the year, optimized desktop power management configuration has been extended to around 80,000 desktops. Our in-house application, ‘Terminator’, designed to force-schedule the shutdown of desktops, is being enhanced to achieve further reduction in power demand by desktops. In addition to this, around 10,000 older desktops have been replaced this year with newer power-efficient models.

We have continued our efforts towards restructuring the existing data centers and server rooms. Around twelve server rooms have been revamped this year and about 4,400 sq. ft. of server room / lab space has been released. Further, our projects have been swift to adopt the internal enterprise cloud, a shared, secure and virtualized computing environment with an easy-to-use ‘Self-Service’ portal. On an average, 90% of the virtual instances are in use at any given time and we are planning to further augment the capacity.

Video Conferencing (VC) usage has increased steadily this year and currently, on an average, around 2,500 VC calls are happening per month. Further, we have introduced Telepresence, an Ultra High Definition (1080p) VC facility in three locations. Telepresence relays true life-size images and employs spatial audio to provide an immersive experience to the participants. Usage of this facility would help us connect with customers at CXO levels across the world and reduce our travel requirements.

Research and Development (R&D) Our new strategic direction ‘Building Tomorrow’s Enterprise’ identifies trends that are driving and transforming the businesses of our clients globally. These include digital consumers, emerging economies, healthcare economy, sustainable tomorrow, new commerce, smarter organizations and pervasive computing. These themes are now being used to define the research and innovation agenda of the Company.

Infosys LabsInfosys Labs, a dedicated research and innovation group comprising technology and domain-focused members has been established. It builds on the successes of the award winning Software Engineering and Technology Labs (SETLabs) and envisages a broader mandate.

The primary research focus areas include Software Engineering, Convergence, Knowledge-driven Information Systems, Security & Privacy, Distributed Computing and Innovation. We also have dedicated Centers of Excellence on Maintenance & Service Differentiation, Microsoft Technology and Cloud Computing.

Some of the specific areas of research include semantic and language technologies for information extraction from social media and for customer engagement, context aware systems, pervasive computing including mobility & sensor networks, scalable computing including GPGPU, multi-core and cloud computing, data privacy and user authentication, preventive software maintenance and software engineering.

Learn more about Infosys Labs and i ts focus areas at http://www.infosys.com/infosys-labs/

FinacleThe Finacle R&D unit at Infosys is engaged in the research of developing new technologies in the banking domain. Finacle R&D solutions address the areas of core banking, wealth management, CRM, Islamic banking and treasury requirements of retail, corporate and universal banks worldwide. Finacle solutions also empower banks with multiple sales, service and marketing channels including e-banking and mobile banking.

a) Particulars pursuant to Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988

Conservation of energyBuilding infrastructureDuring the year, two of our buildings, one in Jaipur and the other in Thiruvananthapuram, were awarded the prestigious LEED Platinum rating – the highest rating for Green Buildings, by the Indian Green Building Council (IGBC). All new buildings that were completed in the previous year have been registered for LEED rating from IGBC and we hope to achieve a Platinum rating in all cases. The energy performance of all the buildings designed in the previous year has been found to be more efficient than the globally accepted ASHRAE efficiency standards for buildings.

On new technologies, one building in our Hyderabad campus has been commissioned with radiant cooling, a method of cooling used for the first time in a commercial building in India. A chilled water storage tank of 300 KL capacity has been built at our Mangalore campus to increase the efficiency of the air conditioning system. This system is under testing and is expected to reduce peak load as well as energy consumption. Initial results of this system have been very encouraging. Chilled beam systems, which are expected to be more efficient than the conventional air conditioning systems, are being implemented in three new buildings in our Pune campus. High-efficiency chillers that consume considerably lesser power have been selected for all new upcoming projects, thus reducing peak demand as well as energy consumption.

During the year, we worked with electricity and power regulators in Karnataka and with the government of India for making green power cheaper, an achievement that is significant not only for us but would also benefit the community at large. A similar initiative is being taken up in other parts of the country. We purchased about 8.53 million units of green power during the year and this figure is expected to increase substantially in the coming years. On renewable energy, two solar photovoltaic systems of about 200 KW and 125 KW are being installed in our Jaipur and Thiruvananthapuram campuses respectively. Together, these are expected to generate about 4,50,000 units of electricity annually, thus reducing the burden on the grid.

A considerable amount of time and effort was earmarked for conserving power across all our development centers in India. Some of the measures taken include :

• Installation of wind turbines at our campuses in Pune, Bangalore and Mangalore

• Installation of occupancy sensors in conference rooms and restrooms

• Introduction of LED lamps in lieu of fluorescent tubes

• Variable Frequency Drives (VFD) installed in condenser pumps on chillers

• Approval to replace old and inefficient utilities such as DG sets, pumps and motors

• Strong monitoring of the Environmental Management System as per ISO 14001 guidelines

These measures have resulted in reducing the per capita power consumption by over 3% during the year.

Annexure to the directors’ report



Education & Research The E-Com research lab of the E&R unit focuses its research in the areas of game theory applications to IT services, distributed computing, optimization theory applications to IT services, pattern recognition systems, face recognition algorithms, large data management and education technology.

Collaborations with academia and industryWe co-create with clients, technology partners, universities and the larger innovation ecosystem by setting up joint innovation centers and developing solutions for complex business problems.

We are associated with various universities globally including, Purdue University, Indian Institute of Science, Bangalore, IIIT, Hyderabad, IIIT, Bangalore, IIT, Bombay – Monash Research Academy, University of Southern California, University of Cambridge and the University of Illinois at Urbana-Champaign. We also associate with several industry consortia including the IU-ATC in the United Kingdom (U.K.) and the Smart Services CRC in Australia.

With a definitive aim to enlarge the innovation ecosystem to include start-ups, entrepreneurs, incubation cells and other innovation players in the industry, Infosys Labs organized an ‘Innovation Camp’ in Bangalore in March 2011. This is part of our larger program planned across the globe.

R&D highlightsOur efforts in R&D have helped us offer new services to clients in the areas of Software Engineering, Convergence, Knowledge-driven Information Systems, Security & Privacy and Distributed Computing. We are developing client-focused business solutions based on the intellectual property developed by multiple research groups. Our R&D efforts have helped us win large deals across industry verticals.

From a banking industry perspective, the Finacle R&D unit has launched innovative offerings such as FinacleTM Advisor, FinacleTM Mobile Banking 2.0, FinacleTM Treasury-in-a-box, FinacleTM Core Banking for regional rural banks and FinacleTM financial inclusion solutions. Our research has also helped develop key Finacle solutions like Core Banking, CRM, Consumer e-banking, Wealth Management and others.

Our R&D efforts have also helped differentiate our solutions and win awards. An illustrative list is provided here :

• FinacleTM was adjudged a ‘Winner’ in the 5th Annual ‘Leaders in Innovation Awards’ by Financial-i, a leading U.K. based financial publication for the ‘Best Core Banking Software’.

• Our research on mobility and our innovation accelerator Infosys mConnect, has powered award winning Infosys solutions such as FlyppTM – recognized for its ‘innovative approach to technology and business in telecom’ at the Aegis Graham Bell Awards 2010 and Infy-on-the-Go – recognized at the Information Week innovation award 2010.

• Infosys iSmart, a sensor-based energy management solution developed by Infosys Labs, was selected as an innovative solution in the Grand Challenges for Technologists (2010) held by Technology Review (India), the magazine of the Massachusetts Institute of Technology.

During the year, the research groups also published two books, Raising Enterprise Applications – A Software Engineering Perspective and Process-centric Architecture for Software Systems, and over 125 papers in leading publications and journals.

Future plan of actionWe are now using the ‘Building Tomorrow’s Enterprise’ theme to focus on our technology research and to identify large, multidisciplinary problem areas that embody the challenges facing our clients.

We will continue to focus on and collaborate with leading national and international universities, product vendors and technology start-up companies. We are creating an ecosystem to co-create business solutions on client-specific business themes.

Expenditure on R&Din r crore

2011 2010Revenue expenditure 521 437Capital expenditure 6 3Total 527 440R&D expenditure / total revenue 2.1% 2.1%

Foreign exchange earnings and outgo

Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services, and export plansDuring the year, 97.7% of our revenues were derived from exports. We have established a substantial direct marketing network around the world, including North America, Europe and Asia Pacific.

These offices are staffed with sales and marketing specialists who sell our services to large international clients.

Foreign exchange earned and usedin r crore

2011 2010Earnings 23,960 21,075Outflow (including capital imports) 10,765 8,490Net foreign exchange earnings (NFE) 13,195 12,585NFE / Earnings 55.1% 59.7%

for and on behalf of the Board of Directors



Bangalore

April 15, 2011



b) Auditors’ certificate on corporate governanceThe Members of Infosys Technologies Limited

We have examined the compliance of conditions of Corporate Governance by Infosys Technologies Limited (‘the Company’), for the year ended on 31 March 2011, as stipulated in Clause 49 of the Listing Agreement of the Company with the stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

for B S R & Co.Chartered Accountants

Firm registration number : 101248W

Bangalore

15 April, 2011

Natrajh RamakrishnaPartner

Membership number : 32815


Infosys Annual R

eport 2010-11

Statement pursuant to Section 212 of the Companies Act, 1956in r crore

Subsidiary Infosys Technologies

(Australia) Pty. Limited

Infosys Technologies

(China) Company

Limited


S. de R. L. de C. V.

Infosys Technologies (Sweden) AB

Infosys Tecnologia

do Brasil Ltda

Infosys Public

Services, Inc.


(Shanghai) Company Limited (1)

Infosys Consulting,

Inc.

Infosys Consulting

India Limited

Infosys BPO Limited

Infosys BPO s.r.o.

Infosys BPO (Poland) Sp.Z.o.o

McCamish Systems

LLC

Financial period ended Mar 31, 2011

Dec 31, 2010

Dec 31, 2010

Dec 31, 2010

Dec 31, 2010

Mar 31, 2011

NA Mar 31, 2011

Mar 31, 2011

Mar 31, 2011

Mar 31, 2011

Mar 31, 2011

Mar 31, 2011

Holding company’s interest as at March 31, 2011

100.00% in equity

shares

100.00% in capital

100.00% in capital

100.00% in equity

shares

100.00% in equity

shares

100.00% in equity

shares

100.00% in capital

100.00% in equity

shares

100.00% in equity

shares

99.98% in equity shares




Shares held by the holding company in the subsidiary

1,01,08,869 shares of

AUD 0.11 par value,

fully paid up

NA NA 1,000 equity shares of

SEK 100 par value, fully

paid up

1,45,16,997 equity shares of BRL 1 par

value, fully paid up

1,00,00,000 equity shares of US$ 0.50

par value, fully paid up

NA 5,50,00,000 shares of US$ 1.00 par value,

fully paid up

NA 3,38,22,319 equity shares

of R 10 par value, fully

paid up

NA NA NA

Net aggregate profits / losses of the subsidiary for the current period so far as it concerns the members of the holding company :

a. Dealt with or provided for in the accounts of the holding company – – – – – – – – – – – – –

b. Not dealt with or provided for in the accounts of the holding company Profit : 84 Profit : 40 Loss : 1 Profit : 1 Loss : 8 Loss : 1 – Profit : 78 Profit : 2 Profit : 205 Profit : 2 Profit : 11 Loss : 20

Net aggregate profits / losses for previous financial years of the subsidiary so far as it concerns the members of the holding company :

a. Dealt with or provided for in the accounts of the holding company – – – – – – – – – – – – –

b. Not dealt with or provided for in the accounts of the holding company Profit : 285 Loss : 29 Loss : 15 – Loss : 8 – – Loss : 186 Profit : 1 Profit : 877 Profit : 24 Profit : 24 Loss : 18

Notes : The above details are as at March 31, 2011 (1) On February 21, 2011, the Company incorporated Infosys Technologies (Shanghai) Company Limited.




Deepak M. SatwalekarDirector

Prof. Marti G. SubrahmanyamDirector

Dr. Omkar GoswamiDirector

Sridar A. IyengarDirector

David L. BoylesDirector

Prof. Jeffrey S. LehmanDirector

K. V. KamathDirector

R. Seshasayee Director

K. DineshDirector

BangaloreApril 15, 2011


Srinath Batni Director


K. ParvatheesamCompany Secretary


Infosys Annual R

eport 2010-11

Statement pursuant to Section 212 of the Companies Act, 1956in r crore except employee data

Subsidiary Exchange rate as at March 31, 2011

Issued and subscribed

share capital

Reserves Loans Total assets

Total liabilities

Investments Turnover Profit / (Loss) before taxation

Provision for

taxation

Profit / (Loss) after

taxation

No. of EmployeesLong-term Current Total

Infosys Technologies (Australia) Pty. Limited 1 AUD = R 46.11 4 488 – 492 492 – – – 984 116 32 84 514 Infosys Technologies (China) Company Limited 1 RMB = R 6.82 107 5 23 135 135 – – – 359 42 2 40 2,765 Infosys Technologies S. de R. L. de C. V. 1 MXN = R 3.75 54 (14) – 40 40 – – – 99 1 2 (1) 521 Infosys Technologies (Sweden) AB 1 SEK = R 7.10 – 1 – 1 1 – – – 11 1 0 1 13 Infosys Tecnologia do Brasil Ltda 1 BRL = R 27.46 38 (15) 9 32 32 – – – 51 (6) 2 (8) 173 Infosys Public Services, Inc. 1 USD = R 44.60 23 (3) – 20 20 – – – – (1) – (1) – Infosys Technologies (Shanghai) Company Limited (1) 1 RMB = R 6.82 11 – – 11 11 – – – – – – – – Infosys Consulting, Inc. 1 USD = R 44.60 240 (106) – 134 134 1 – 1 841 134 56 78 573 Infosys Consulting India Limited (2) INR 1 3 – 4 4 – – – 28 4 2 2 139 Infosys BPO Limited INR 34 1,107 – 1,141 1141 320 21 341 1,129 215 10 205 16,416 Infosys BPO s.r.o. (3) 1 CZK = R 2.58 3 28 – 31 31 – – – 56 3 1 2 353 Infosys BPO (Poland) Sp.Z.o.o (3) 1 PLN = R 15.76 4 76 – 80 80 – – – 140 14 3 11 1,059 McCamish Systems LLC (3) 1 USD = R 44.60 115 (121) 18 12 12 – – – 150 (20) – (20) 285

Notes : Information on subsidiaries is provided in compliance with the circular no. 2/2011 dated February 8, 2011 of the Ministry of Corporate Affairs, Government of India. We undertake to make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our shareholders. The annual accounts will also be available for inspection during business hours at our registered office in Bangalore, India. The same will also be available on our website, www.infosys.com

Proposed dividend from the above subsidiaries is nil. (1) On February 21, 2011, the Company incorporated Infosys Technologies (Shanghai) Company Limited. (2) Wholly-owned subsidiary of Infosys Consulting, Inc. (3) Wholly-owned subsidiary of Infosys BPO Limited












K. DineshDirector

BangaloreApril 15, 2011





Management’s discussion and analysis | 19


OverviewThe financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, guidelines issued by the Securities and Exchange Board of India (SEBI) and the Generally Accepted Accounting Principles (GAAP) in India. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs, profits and cash flows for the year.

A. Industry structure and developmentsChanging economic and business conditions and rapid technological innovation are creating an increasingly competitive market environment that is driving corporations to transform their operations. Consumers of products and services are increasingly demanding accelerated delivery times and lower prices. Companies are focusing on their core competencies and using outsourced technology service providers to adequately address these needs. The role of technology has evolved from supporting corporations to transforming their business. There is an increasing need for highly skilled technology professionals in the markets in which we operate. At the same time, corporations are reluctant to expand their internal IT departments and increase costs. These factors have increased the reliance of corporations on their outsourced technology service providers and are expected to continue to drive future growth for outsourced technology services.

1. Increasing trend toward offshore technology services Outsourcing the development, management and ongoing maintenance of technology platforms and solutions has become increasingly important to companies. The effective use of offshore technology services offers a variety of benefits to them, including lower cost of ownership of IT infrastructure, lower labor costs, improved quality and innovation, faster delivery of solutions and more flexibility in scheduling. In addition, technology companies are also recognizing the benefits of offshore service providers in software research and development and related support functions, and are outsourcing a greater portion of these activities. This has also resulted in more and more diversification in the range of services delivered offshore.

2. The India advantage India is widely recognized as the premier destination for offshore technology services. According to the NASSCOM Strategic Review 2011, IT services exports (excluding exports relating to business process outsourcing (BPO), hardware, engineering design and product development) from India are estimated to grow by 22.7% in fiscal 2011, to record revenues of US$ 33.5 billion. The same review also forecasts that BPO exports from India are estimated to grow by 14% in fiscal 2011 to record revenues of US$ 14.1 billion. There are several key factors contributing to the growth of IT and IT-enabled services (ITES) in India and by Indian companies. Some of these factors are high-quality delivery, significant cost benefits and abundant skilled resources.

3. Evolution of technology outsourcing The realm of technology outsourcing is changing. In an environment of rapid technological advancement, globalization and regulatory changes, companies are looking at outsourcing approaches that require their technology service providers to develop specialized systems, processes and solutions along with cost-effective delivery capabilities.

4. Global Delivery Model (GDM) Our GDM allows us to execute services where it is most cost effective and sell services where it is most profitable. The GDM makes the best use of our large pool of highly skilled technology professionals and our 24-hour execution capabilities across multiple time zones. Other factors that make it one of the best delivery models in the world are its ability to accelerate delivery times of large projects by simultaneously processing project components; cost competitiveness across geographic regions; built-in redundancy to ensure uninterrupted services; and a knowledge management system that enables us to re-use solutions where appropriate.

Our GDM mitigates risks associated with providing offshore technology services to our clients. Speedy and effective communication being the key, we use multiple service providers and a mix of terrestrial and optical fiber links with alternate routing. In India, we rely on two telecommunication carriers to provide high-speed links interconnecting our global development centers. We rely on multiple links on submarine cable paths to interconnect our development centers with network hubs in other parts of the world. Our significant investment in redundant infrastructure enables us to provide uninterrupted service to our clients.

5. Our end-to-end solutions We complement our industry expertise with specialized support for our clients. We also leverage the expertise of our various Centers of Excellence and our software engineering group and technology lab to create customized solutions for our clients. In addition, we continually evaluate and train our professionals in new technologies and methodologies. Finally, we ensure the integrity of our service delivery by utilizing a scalable and secure infrastructure.

We generally assume full project management responsibility in each of our solution offerings. We strictly adhere to our SEI-CMMi Level 5 internal quality and project management processes. Our project delivery focus is supplemented by a robust knowledge management system that enables us to leverage existing solutions across our Company. We use in-house tools for project management and software lifecycle support. We believe that our processes, methodologies, knowledge management systems and tools reduce the overall cost to the client, mitigate risks, enhance the quality of our offerings and allow clients to improve time-to-market for their solutions. The revenues attributed to the custom application development, maintenance and production support, product engineering, package-enabled consulting and implementation and business transformation consulting services represented a majority of our total revenues in fiscal 2011.

B. Financial condition

Sources of funds

1. Share capitalAt present, we have only one class of shares – equity shares of par value R 5/- each. Our authorized share capital is R 300 crore, divided into 60 crore equity shares of R 5/- each. The issued, subscribed and paid up capital stood at R 287 crore as at March 31, 2011 (same as the previous year).

During the year, employees exercised 1,88,675 equity shares issued under the 1998 Stock Option Plan and 1,37,692 equity shares issued under the 1999 Stock Option Plan. Consequently, the issued, subscribed and outstanding shares increased by 3,26,367. The details of options granted, outstanding and vested as at March 31, 2011, are provided in the Notes to the consolidated financial statements section in the Annual Report.

Management's discussion and analysis

20 | Management’s discussion and analysis


2. Reserves and Surplus

2.a Capital reserveThe balance as at March 31, 2011 amounted to R 54 crore. During the previous year, the addition to the capital reserve account of R 48 crore is on account of transfer of profit on sale of investments in OnMobile Systems Inc., U.S. of R 48 crore, which was included in the net profit.

2.b Share premiumThe addition to the share premium account of R 35 crore during the year is primarily on account of premium received on issue of 3,26,367 equity shares, on exercise of options under the 1998 and 1999 Stock Option Plans of R 24 crore.

An amount of R 11 crore (R 10 crore in the previous year) was credited to the share premium account arising due to tax benefits in overseas jurisdiction of deductions earned on exercise of employees' stock options, in excess of compensation charged to the Profit and Loss account.

2.c General reservesAn amount of R 645 crore representing 10% of the profits for the year ended March 31, 2011 (previous year R 580 crore) was transferred to the general reserves account from the Profit and Loss account.

2.d Profit and Loss accountThe balance retained in the Profit and Loss account as at March 31, 2011 is R 15,591 crore, after providing the interim, 30th year special and final dividend for the year of R 574 crore, R 1,722 crore and R 1,149 crore respectively and dividend tax of R 568 crore thereon. The total amount of profits appropriated to dividend including dividend tax was R 4,013 crore, as compared to R 1,674 crore in the previous year.

2.e Shareholder fundsThe total shareholder funds increased to R 24,501 crore as at March 31, 2011 from R 22,036 crore as of the previous year end. The book value per share increased to R 426.73 as at March 31, 2011, compared to R 384.01 as of the previous year-end.

Application of funds

3. Fixed assets

3.a Capital expenditureWe incurred a capital expenditure of R 1,152 crore (R 565 crore in the previous year) comprising additions to gross block of R 1,017 crore, net of R 3 crore movement in land from leasehold to freehold for the year ended March 31, 2011. An increase of R 90 crore on account of increase in capital work-in-progress and R 45 crore on account of decrease in retention monies. The entire capital expenditure was funded out of internal accruals.

3.b Additions to gross blockDuring the year, we capitalized R 1,017 crore to our gross block comprising R 251 crore for investment in computer equipment and the balance of R 764 crore on infrastructure investment and R 2 crore on vehicles. We invested R 225 crore to acquire 267 acres of land in Bangalore, Delhi and Mangalore. The expenditure on buildings, computer equipment, plant and machinery and furniture and fixtures, increased by R 323 crore, R 251 crore, R 147 crore and R 69 crore respectively.

During the previous year, we capitalized R 787 crore to our gross block, including investment in computer equipment of R 140 crore, R 646 crore on infrastructure investment and R 1 crore on vehicles. We invested R 43 crore to acquire 161 acres of land in Hyderabad, Jaipur, Mysore and Mangalore.

3.c Deductions to gross blockDuring the year, we deducted R 440 crore (net book value of R nil) from the gross block on retirement of assets. During the previous year, we retired / transferred various assets with a gross block of R 387 crore (net book value of R nil) R 8 crore on donation of computer systems and R 21 crore on disposal of various assets.

3.d Capital expenditure commitmentsWe have a capital expenditure commitment of R 742 crore, as at March 31, 2011 as compared to R 267 crore as at March 31, 2010.

4. InvestmentsWe made several strategic investments aimed at procuring business benefits and operational efficiency for us. During the previous year, the Company sold 32,31,151 shares of OnMobile Systems Inc., U.S., for a total consideration of R 53 crore, net of taxes and transaction cost.

4.a Majority-owned subsidiary

Infosys BPO LimitedWe established Infosys BPO Limited as a majority-owned and controlled subsidiary on April 3, 2002, to provide business process management services. Infosys BPO seeks to leverage the benefits of service delivery globalization, process redesign and technology to drive efficiency and cost effectiveness in customer business processes.

On December 4, 2009, Infosys BPO acquired 100% of voting interest in McCamish Systems LLC, a business process solutions provider based at Atlanta, U.S., for a cash consideration of R 173 crore and a contingent consideration of R 67 crore.

4.b Wholly-owned subsidiariesDuring the year, the investments in our subsidiaries were as follows :

Subsidiary In foreign currency R croreInfosys Technologies (China) Company Limited US$ 9 million 42Infosys Tecnologia do Brasil Ltda BRL 3.8 million 10Infosys Technologies S. de R. L. de C. V., Mexico MXN 40 million 14Infosys Technologies (Shanghai) Company Limited (1) US$ 2.5 million 11

(1) During the year, Infosys Technologies Limited incorporated a wholly-owned subsidiary Infosys Technologies (Shanghai) Company Limited

5. Deferred tax assets / liabilitiesWe recorded deferred tax assets of R 406 crore as at March 31, 2011 (R 313 crore as at March 31, 2010) and deferred tax liability of R 176 crore as at March 31, 2011 (R 232 crore as at March 31, 2010).

We assess the likelihood that our deferred tax assets will be recovered from future taxable income. We believe it is more likely than not that we will realize the benefits of these deductible differences.

6. Sundry debtorsSundry debtors amounted to R 4,212 crore (net of provision for doubtful debts amounting to R 83 crore) as at March 31, 2011, compared to R 3,244 crore (net of provision for doubtful debts amounting to R 100 crore) as at March 31, 2010. These debts are considered good and realizable. Debtors are at 16.6% of revenues for the year ended March 31, 2011, compared to 15.3% for the previous year, representing a Days Sales Outstanding (DSO) of 61 days and 56 days for the respective years.



Our largest client constituted 2.7% of sundry debtors as at March 31, 2011. The age profile of debtors is as follows :

in %

Days 2011 20100-30 58.3 60.731-60 33.0 31.961-90 4.3 3.8Above 91 4.4 3.6

100.0 100.0

Provisions are generally made for all debtors' outstanding for more than 180 days as also for others, depending on the Management's perception of the risk. The need for provisions is assessed based on various factors, including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors that could affect the customer's ability to settle.

The movement in provisions for doubtful debts during the year is as follows :

in r crore

2011 2010Opening balance 100 105Add : Amount provided 3 (1) Less : Amount written-off 20 4Closing balance 83 100

Provision for bad and doubtful debts as a percentage of revenue is 0.01% for the year ended March 31, 2011, as against nil for the year ended March 31, 2010.

The unbilled revenues as at March 31, 2011 and March 31, 2010, amounted to R 1,158 crore and R 789 crore respectively.

7. Cash and cash equivalentsThe bank balances in India include both rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are maintained to meet the expenditure of the overseas branches and project-related expenditure overseas. The deposit account represents deposits of maturity up to 365 days.

Our treasury policy calls for investing surpluses with highly-rated companies, banks and financial institutions for maturities up to 365 days, as also with liquid mutual funds with a limit on investments in individual entities.

8. Loans and advancesin r crore

2011 2010Unsecured, considered goodLoans to subsidiary 32 46Advances

Pre-paid expenses 52 25Interest accrued but not due 14 14Advance to Gratuity Fund Trust – 2For supply of goods and services 50 5Withholding and other taxes receivable 516 321Others 10 13

Sub-total 674 426Unbilled revenues 1,158 789Advance income tax 924 641Loans and advances to employees 126 100Electricity and other deposits 60 60Rental deposits 18 13Deposits with financial institutions and body corporate (1) 1,844 1,781Mark-to-market gain on forward and options contracts 63 88Total 4,867 3,898

(1) An amount of r 344 crore (r 281 crore as at March 31, 2010) deposited with the Life Insurance Corporation of India to settle leave obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and hence not considered as ‘cash and cash equivalents’.

As at March 31, 2011, the outstanding loan to Infosys Technologies (China) Company Limited was R 23 crore (US$ 5 million), the outstanding loan as at March 31, 2010 was R 46 crore (US$ 10 million). During the year, the Company has given a loan of R 9 crore (US$ 2 million) to Infosys Tecnologia do Brasil Ltda, which is outstanding as of March 31, 2011. The loan is repayable within five years and six months at the discretion of the subsidiary, for the China and Brazil subsidiaries respectively.

The withholding and other taxes receivable represents transaction taxes paid in various domestic and overseas jurisdictions which are recoverable.

Unbilled revenues consist primarily of costs and earnings in excess of billings to the client on fixed-price, and fixed-timeframe contracts.

The details of advance income taxes are as follows : in r crore

2011 2010Domestic tax 897 635Overseas tax 27 6Total 924 641

Our loan schemes provide for personal loans and salary advances that are provided primarily to employees in India who are not executive officers or directors. The loans and advances are recoverable within 24 months.

Electricity and other deposits represent electricity deposits, telephone deposits, insurance deposits and advances of a similar nature. The rent deposits are for buildings taken on lease by us for our software development centers and marketing offices in locations across the world.

Deposits with financial institutions and corporate bodies represent surplus money deployed in the form of short-term deposits.

9. Current liabilitiesin r crore

2011 2010Sundry creditors

For goods and services 85 96For accrued salaries and benefits 405 446

For other liabilitiesProvision for expenses 537 375Retention monies 21 66Withholding and other taxes 292 235

Gratuity obligations – unamortized amount 22 26Others 8 8Sub-total 1,370 1,252Advances received from clients 19 7Unearned revenue 488 502Unclaimed dividend 3 2Total 1,880 1,763

Sundry creditors for accrued salaries and benefits include the provision for bonus and incentive payable to the staff. Sundry creditors for other liabilities represent amounts accrued for other operational expenses. Retention monies represent monies withheld on contractor payments pending final acceptance of their work. Withholding and other taxes payable represent local taxes payable in various countries in which we operate and the same will be paid in due course.

Effective July 1, 2007, we revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by R 37 crore, which is being amortized on a straight line basis to the Profit and Loss account over ten years, representing the average future service period of employees. An amount of R 4 crore was amortized during the year. The unamortized balance as at March 31, 2011 was R 22 crore.



Advances received from clients represent monies received for the delivery of future services. Unearned revenue consists primarily of advance client billing on fixed-price, and fixed-timeframe contracts for which related costs were not yet incurred. Unclaimed dividends represent dividends paid, but not encashed by shareholders, and are represented by a bank balance of the equivalent amount.

10. Provisionsin r crore

2011 2010Proposed dividend 1,149 861Tax on dividend 187 143Income taxes 756 719Unavailed leave 303 239Post-sales client support and warranties 78 73Total 2,473 2,035

Proposed dividend represents the final dividend we recommended to our shareholders. Upon approval by our shareholders, this will be paid after the Annual General Meeting. Provision for tax on dividend denotes taxes payable on final dividend declared for the year.

Provisions for taxation represent estimated income tax liabilities, both in India and overseas. The details are as follows :

in r crore

2011 2010

Domestic tax 37 37Overseas tax 719 682Total 756 719

Provisions for unavailed leave is toward our liability for leave encashment valued on an actuarial basis. The provision for post-sales client support and warranties is towards likely expenses for providing post-sales client support on fixed-price contracts.

C. Results of operations

1. IncomeOf the total revenues for the years ended March 31, 2011 and March 31, 2010, approximately 97.7% were derived from our overseas operations whereas 2.3% were derived from domestic operations.

Our revenues are generated primarily on fixed-timeframe or time-and-material basis. Revenues from software services on fixed-price and fixed-timeframe contracts are recognized as per the proportionate-completion method. On time-and-material contracts, revenue is recognized as the related services rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in multiple arrangement contracts, where revenue is recognized as per the proportionate-completion method.

The segmentation of software services by project type is as follows : in %

2011 2010Fixed-price 42.1 40.8Time-and-material 57.9 59.2Total 100.0 100.0

Our revenues are also segmented into onsite and offshore revenues. Onsite revenues are for those services which are performed at our client locations or at our global development centers, as part of software projects, while offshore revenues are for services which are performed at our software development centers located in India.

The segmentation of revenues by location (including product revenue) is as follows :

in %

2011 2010Onsite 50.2 48.7Offshore 49.8 51.3Total 100.0 100.0

The services performed onsite typically generate higher revenues per capita, but at lower gross margins in percentage as compared to the services performed at our own facilities. Therefore, any increase in the onsite effort impacts our margins.

The details of effort mix for software services and products in person-months are as follows :

in %

2011 2010Onsite 26.5 26.1Offshore 73.5 73.9Total 100.0 100.0

The growth in software services and product revenues is due to an all-round growth in various segments of the business mix and is mainly due to growth in business volumes.

The details of the same are as follows :

2011 2010Income (in R crore)

Software services 24,100 20,215Software products 1,285 925

Total 25,385 21,140Person-monthsSoftware services

Onsite 2,24,378 1,75,581Offshore 5,50,555 4,42,336

Billed-total 7,74,933 6,17,917Software products 71,020 54,772Non-billable 2,04,435 2,31,186Training 1,10,288 92,081Sub-total 11,60,676 9,95,956Support 62,345 54,032Total 12,23,021 10,49,988Increase / (Decrease) in billed person monthsOnsite 48,797 (3,748)

% change 27.8 (2.1) Offshore 1,08,219 34,359

% change 24.5 8.4Total 1,57,016 30,611

% change 25.4 5.2Support / total (%) 5.1 5.1

1.a Software servicesDuring the year, the volume of software services grew by 25.4% compared to 5.2% in the previous year. The onsite and offshore volume growth were 27.8% and 24.5% respectively during the year, compared to (2.1) % and 8.4% in the previous year. In U.S. dollar terms, onsite per capita revenues increased by 0.7% during the year, offshore per capita revenues decreased by 4.2% and blended per capita revenues decreased by 1.1%. During the previous year, onsite per capita revenues increased by 3.4% offshore per capita revenues decreased by 4.7% and blended per capita revenues decreased by 2.8% in U.S. dollar terms.



1.b Software productsThe revenues from software products grew 38.9% compared to 9.1% in the previous year. Of the software products revenue, 82.1% came from exports (same as previous year).

2. Expenditure

2.a Software development expensesin r crore

2011 % 2010 % Growth %

Revenues 25,385 100.0 21,140 100.0 20.1Software development expenses : Salaries and bonus 11,013 43.4 9,216 43.6 19.5Technical sub-contractors 2,044 8.0 1,479 7.0 38.2Overseas travel expenses 573 2.3 401 1.9 42.9Cost of software packages 320 1.3 309 1.4 3.6Third party items bought for service delivery to clients 139 0.5 17 0.1 717.6Communication expenses 39 0.2 45 0.2 (13.3) Post-sales customer support and warranties 5 – (2) – 350.0Other expenses 134 0.5 94 0.5 42.6Total 14,267 56.2 11,559 54.7 23.4

We incurred software development expenses at 56.2% of revenues, compared to 54.7% during the previous year. Employee costs relate to salaries paid to employees in India and include overseas staff expenses. The total software professionals person-months increased to 11,60,676 for the year ended March 31, 2011, from 9,95,956 person-months during the previous year, an increase of 16.5%. Of this, the onsite and offshore billed person-months (including software products) are 2,24,378 and 6,21,575 for the year ended March 31, 2011, as compared to 1,75,581 and 4,97,108 for the previous year. The non-billable and trainees person-months were 3,14,723 and 3,23,267 during the current and previous year respectively. The non-billable and trainees person-months were 27.1% and 32.5% of the total software professional person-months for the current and previous year respectively. We added 32,247 employees (gross) and 15,321 employees (net) during the year as compared to 18,905 employees (gross) and 6,837 employees (net) during the previous year.

The utilization rates of billable employees for the years ended March 31, 2011 and March 31, 2010 are as follows :

in %

2011 2010Including trainees 72.9 67.5Excluding trainees 80.5 74.4

The cost of technical sub-contractors includes R 1,568 crore toward purchase of services from subsidiaries for the year ended March 31, 2011, as against R 1,210 crore in the previous year. The details of such related party transactions are available in the Notes to Accounts. The balance amount was utilized toward availing the services of external consultants to augment skill sets that were required in various projects. We continue to engage the services of these consultants on a need basis.

The overseas travel expenses representing cost of travel overseas for software development constituted approximately 2.3% and 1.9% respectively of total revenue for the years ended March 31, 2011 and

March 31, 2010. Overseas travel expenses include visa charges of R 184 crore (0.7% of revenues) for the year, compared to R 92 crore (0.4% of revenues) in the previous year.

Cost of software packages primarily represents the cost of software packages and tools procured for our internal use. These packages and tools enhance the quality of our services and also meet the needs of software development. The cost of software packages was 1.3% and 1.4% respectively of the revenues for the years ending March 31, 2011 and March 31, 2010. Our accounting policy is to charge such purchases to the Profit and Loss accounts in the year of purchase. Third party items bought for service delivery to clients include software and hardware procured from third parties for resale to clients primarily in India. The increase in third party items bought for service delivery to clients is due to an increase in volume of system integration projects executed in the Indian market.

A major part of our revenues is generated from offshore software development. We use high-end communication tools in order to establish real-time connections with our clients. The communication expenses represent approximately 0.2% of revenues for the years ending March 31, 2011 and March 31, 2010 respectively.

The provision for post-sale customer support and warranties saw a charge of R 5 crore against the reversal of R 2 crore for the years ended March 31, 2011 and March 31, 2010 respectively.

Other expenses representing staff welfare, computer maintenance, consumables and rent approximate to 0.5% of revenues during the year (same as the previous year).

2.b Gross profitThe gross profit during the year was R 11,118 crore representing 43.8% of revenues compared to R 9,581 crore representing 45.3% of revenues in the previous year.

2.c Selling and marketing expensesWe incurred selling and marketing expenses at 4.8% of our total revenues, compared to 4.6% in the previous year. Selling and marketing expenses primarily consist of employee costs which include bonus payment. All other expenses excluding the employee cost were 1.0% of revenues during the year (same as previous year). The number of sales and marketing personnel increased from 800 as at March 31, 2010 to 902 as at March 31, 2011.

We and our subsidiaries added 139 new customers as compared to 141 during the previous year.

2.d General and administration expensesWe incurred general and administration expenses amounting to 5.8% and 5.9% of our total revenues, during the current year and previous year respectively. All other expenses excluding the employee cost were 4.2% of revenues during the year as compared to 4.3% in the previous year.

Employee costs increased as the number of administration personnel increased from 3,922 as at March 31, 2010 to 4,487 as at March 31, 2011.

3. Operating profitsWe earned an operating profit (PBIDTA) of R 8,414 crore, representing 33.2% of total revenues compared to R 7,360 crore, representing 34.8% of total revenues, during the previous year.

4. DepreciationWe provided R 740 crore and R 807 crore toward depreciation for the years ended March 31, 2011 and March 31, 2010 representing 2.9% and 3.8% of total revenues. The depreciation for the years ended March 31, 2011 and March 31, 2010 includes an amount of R 33 crore and R 86 crore, toward 100% depreciation on assets costing less than R 5,000 each. The depreciation as a percentage of average gross block (excluding land) is 11.9% and 13.7% for the years ending March 31, 2011 and 2010 respectively.



5. Other income, netOur treasury policy allows us to invest in short-term instruments with a maturity of up to 365 days, with a limit on individual fund / bank. The increase in interest income during the year was on account of higher cash generation in the business and increase in the average yield during the year.

We use foreign exchange forward contracts and options to hedge our exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts and options reduces our risks / costs. We do not use foreign exchange forward contracts or options for trading or speculation purposes.

Foreign exchange gains / (losses) include transaction and translation losses of R 13 crore and a loss of R 237 crore for the years ended March 31, 2011 and March 31, 2010 respectively and option / forward contracts-gain of R 52 crore and a gain of R 276 crore for the years ended March 31, 2011 and March 31, 2010 respectively.

The composition of currency-wise revenues for the years ended March 31, 2011 and March 31, 2010 is as follows :

in %

Currency 2011 2010 US Dollar (US$) 73.7 74.4UK Pound (GBP) 6.5 8.5Euro (EUR) 6.8 6.7Australian Dollar (AUD) 6.6 5.8Others 6.4 4.6Total 100.0 100.0

6. Sensitivity to rupee movement Every 1% movement in the Indian rupee against the US dollar has an impact of approximately 50 basis points on operating margin.

7. Provision for taxWe have provided for our tax liability both in India and overseas. The Indian corporate tax rate for the year ended March 31, 2011 is 33.22%. Export profits for the year were entitled to tax benefits under two schemes of the Government of India viz., the STPI and SEZ scheme.

7.a Software Technology Parks (STPs) The profits attributable to operations under the STP scheme were exempted from income tax for a consecutive period of ten years from the financial year in which the unit started producing computer software, or March 31, 2011, whichever was earlier.

The details regarding the commencement of operations at our STP locations and the year upto which the deduction under the STP scheme was availed are as follows :

Software Technology Park

Year of Commenc-

ement (1)

Tax exemptionClaimed

from (1)

Available upto (1)

Electronics City, Bangalore 1995 1997 2004Mangalore 1996 1999 2005Pune 1997 1999 2006Bhubaneswar 1997 1999 2006Chennai 1997 1999 2006Phase I, Electronics City, Bangalore 1999 1999 2008Phase II, Electronics City, Bangalore 2000 2000 2009Hinjawadi, Pune 2000 2000 2009Mysore 2000 2000 2009Hyderabad 2000 2000 2009Chandigarh 2000 2000 2009Sholinganallur, Chennai 2001 2001 2010Konark, Bhubaneswar 2001 2001 2010


Year of Commenc-

ement (1)


from (1)

Available upto (1)

Mangala, Mangalore 2001 2001 2010Thiruvananthapuram 2004 2004 2011

(1) Financial year

7.b Special Economic Zones (SEZs) During the financial year three more SEZ units at Mysore, Hyderabad and Mahindra City, Chennai commenced production.

As per the SEZ Act, the units will be eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits or gains for the next five years. Certain tax benefits are also available for a further five years subject to the units meeting defined conditions.

The details regarding the commencement of operations at our SEZ locations and the year upto which the deduction under the SEZ scheme is available are as follows :

Special Economic Zone Year of Commenc-

ement (1)


from (1)

Available upto (1)

Mahindra City – unit 1, Chennai 2006 2006 2020Chandigarh 2007 2007 2021Mangalore 2008 2008 2022Pune 2008 2008 2022Thiruvananthapuram 2010 2010 2024Mysore 2011 2011 2025Hyderabad 2011 2011 2025Mahindra City – unit 2, Chennai 2011 2011 2025

(1) Financial year

Other fiscal benefits, including indirect tax waivers, are being extended for setting up, operating and maintaining the unit.

For the current year, approximately 1.61% of our revenues came from the STP unit at Thiruvananthapuram, which was under tax holiday, 9.60% of revenues came from the SEZ at Mahindra City – unit 1, Chennai, which was eligible for deduction based on 50% of the profits of the unit and 13.34% of revenues came from other SEZ units, which were eligible for deduction based on entire profits of these units. The balance 75.45% of revenues came from other STP units, which were subject to full tax in India. We pay taxes in various countries in which we operate, on the income that is sourced to those countries. The details of provision for taxes are as follows :

in r crore

Year ended March 31, 2011 2010Overseas tax 502 433Domestic tax 2,019 1,551

2,521 1,984MAT credit – (288) Deferred taxes (143) 21

2,378 1,717

The effective tax rate increased to 26.96 % in fiscal 2011 as compared to 23.0% in fiscal 2010.

8. Net profit after taxOur net profit increased by 12% to R 6,443 crore for the year ended March 31, 2011 from R 5,755 crore in the previous year, excluding exceptional item. This represents 25.4% and 27.2% of total revenue for the year ended March 31, 2011 and March 31, 2010 respectively.



9. Earnings Per Share (EPS) Our basic EPS increased by 11.8% during the year to R 112.26 per share from R 100.37 per share in the previous year. The outstanding shares used in computing basic EPS increased from 57,33,09,523 for the year ended March 31, 2010 to 57,40,13,650 for the year ended March 31, 2011, an increase of 0.1%.

10. Segmental profitabilityOur operations predominantly relate to providing end-to-end business solutions that leverage technology, thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers.

The income and operating income by industry and geographical segments are provided in this section.

10.a Industry segmentsin r crore

Finan- cial

services

Manu- factur-

ing

Telecom Retail Others Total

Segmental revenues2011 9,293 4,686 3,134 3,757 4,515 25,3852010 7,354 3,988 3,234 2,989 3,575 21,140

Growth % 26.4 17.5 (3.1) 25.7 26.3 20.1Segmental operating income

2011 3,113 1,572 990 1,307 1,432 8,4142010 2,644 1,258 1,167 1,065 1,226 7,360

Growth % 17.7 25.0 (15.2) 22.7 16.8 14.3Segmental operating profit (%)

2011 33.5 33.5 31.6 34.8 31.7 33.12010 35.9 31.5 36.1 35.6 34.3 34.8

10.b Geographical segmentsin r crore

North America

Europe India Rest of the World

Total

Segmental revenues2011 16,815 5,252 594 2,724 25,3852010 14,170 4,633 269 2,068 21,140

Growth % 18.7 13.4 120.8 31.7 20.1Segmental operating income

2011 5,684 1,821 186 723 8,4142010 5,028 1,650 133 549 7,360

Growth % 13.0 10.4 39.8 31.7 14.3Segmental operating profit (%)

2011 33.8 34.7 31.3 26.5 33.12010 35.5 35.6 49.4 26.5 34.8

11. LiquidityOur growth has been financed largely through cash generated from operations.

Net cash generated from operations was R 4,270 crore and R 5,855 crore for the years ended March 31, 2011 and March 31, 2010 respectively. Net cash provided by / (used in) investing activities was R 3,235 crore and (R 3,298) crore for the years ended March 31, 2011 and March 31, 2010 respectively. Net cash used in financing activities was R 3,642 crore and R 1,481 crore for the years ended March 31, 2011 and March 31, 2010, respectively.

12. Related party transactionsThese have been discussed in detail in the Notes to the Abridged financial statements section of this report.

13. Events occurring after the Balance Sheet dateThere were no significant events occurring after the Balance Sheet date.

D. Opportunities and threatsWe believe our competitive strengths include :

• Leadership in sophisticated solutions that enable our clients to optimize the efficiency of their business

• Proven GDM • Commitment to superior quality and process execution• Strong brand and long-standing client relationships• Status as an employer of choice• Ability to scale• Innovation and leadership

1. Our strategyWe seek to further strengthen our position as a leading global technology services company by successfully differentiating our service offerings and increasing the scale of our operations. To achieve these goals, we seek to :

• Increase business from existing and new clients• Expand geographically• Continue to invest in infrastructure and employees• Continue to enhance our engagement models and offerings• Continue to develop deep industry knowledge• Enhance brand visibility• Pursue alliances and strategic acquisitions

2. CompetitionWe operate in a highly competitive and rapidly changing market and compete with consulting firms such as Accenture Limited, Atos Origin S.A., Cap Gemini S.A., and Deloitte Consulting LLP; divisions of large multinational technology firms such as Hewlett-Packard Company and International Business Machines Corporation; IT outsourcing firms such as Computer Sciences Corporation, Keane Inc., Logica Plc and Dell Perot Systems; offshore technology services firms such as Cognizant Technology Solutions Corporation, Tata Consultancy Services Limited and Wipro Technologies Limited; software firms such as Oracle Corporation and SAP A.G.; business process outsourcing firms such as Genpact Limited and WNS Global Services and in-house IT departments of large corporations.

In the future, we expect competition from firms establishing and building their offshore presence and firms in countries with lower personnel costs than those prevailing in India. However, we recognize that price alone cannot constitute a sustainable competitive advantage. We believe that the principal competitive factors in our business include the ability to effectively integrate onsite and offshore execution capabilities to deliver seamless, scalable, cost-effective services; increase scale and breadth of service offerings to provide one-stop solutions; provide industry expertise to clients’ business solutions; attract and retain high-quality technology professionals and maintain financial strength to make strategic investments in human resources and physical infrastructure through business cycles.

We believe we compete favorably with respect to these factors.



E. Outlook, risks and concernsThis section contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these statements as a result of certain factors.

The following lists our outlook, risks and concerns :

• Our revenues and expenses are difficult to predict and can vary significantly from period to period, which could cause our share price to decline. We may not be able to sustain our previous profit margins or levels of profitability.

• Our revenues are highly dependent on clients primarily located in the U.S. and Europe, as well as in certain industries, and an economic slowdown or other factors that affect the economic health of the U.S., Europe or these industries may affect our business.

• Currency fluctuations may affect the results of our operations.

• Our success depends largely upon our highly skilled technology professionals and our ability to hire, attract, motivate, retain and train our personnel.

• We may face difficulties in providing end-to-end business solutions for our clients, which could lead to clients discontinuing their work with us. This in turn could harm our business.

• Intense competition in the market for technology services could affect our cost advantages, which could reduce our share of business from clients and may decrease our revenues.

• Our revenues are highly dependent upon a small number of clients, and the loss of any one of our major clients could significantly impact our business.

• Legislation in certain countries in which we operate, including the United States and the United Kingdom, may restrict companies in those countries from outsourcing work to us.

• Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance.

• Our failure to complete fixed-price, fixed-timeframe contracts or transaction-based pricing contracts within the budget and on time, may negatively affect our profitability.

• Our client contracts can be terminated without cause and with little or no notice or penalty. This could negatively impact our revenues and profitability.

• Our engagements with customers are singular in nature and do not necessarily provide for subsequent engagements.

• Our client contracts are often conditioned upon our performance, which, if unsatisfactory, may result in less revenue than previously anticipated.

• Some of our long-term client contracts contain benchmarking provisions which, if triggered, could result in lower future revenues and profitability under the contract.

• Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and in the industries on which we focus.

• Disruptions in telecommunications, system failures or virus attacks could harm our ability to execute our GDM, which could result in client dissatisfaction and a reduction of our revenues.

• We may be liable to our clients for damages caused by disclosure of confidential information, system failures, errors or unsatisfactory performance of services.

• Our increasing work with governmental agencies may expose us to additional risks.

• We are investing substantial cash assets in new facilities and physical infrastructure, and our profitability could be reduced if our business does not grow proportionately.

• We may be unable to recoup our investment costs to develop our software products.

• Our insiders who are significant shareholders may control the election of our Board and may have interests that conflict with those of our other shareholders or holders of our ADSs.

• We may engage in acquisitions, strategic investments, strategic partnerships or alliances or other ventures that may or may not be successful.

• Our net income would decrease if the Government of India reduces or withdraws tax benefits and other incentives it provides to us or when our tax holidays expire or terminate.

• In the event that the Government of India or the government of another country changes its tax policies in a manner that is adverse to us, our tax expense may materially increase, reducing our profitability.

• We operate in jurisdictions that impose transfer pricing and other tax-related regulations on us, and any failure to comply could materially and adversely affect our profitability.

• Wage pressures in India and the hiring of employees outside India may prevent us from sustaining our competitive advantage and may reduce our profit margins.

• Terrorist attacks or a war could adversely affect our business, results of operations and financial condition.

• The markets in which we operate are subject to the risk of earthquakes, floods, tsunamis and other natural and man made disasters.

• Changes in immigration laws may affect our ability to compete and provide services to our clients in various countries. This could hamper our growth and may have an impact on our revenues.

• Our ability to acquire companies organized outside India depends on the approval of the Government of India and / or the Reserve Bank of India, and failure to obtain this approval could negatively impact our business.

For more details on risk factors, refer to our quarterly and annual filings with the Securities and Exchange Commission (SEC), USA, available on our website www.infosys.com

F. Internal control systems and their adequacyThe CEO and CFO certification provided in the CEO and CFO Certification section of the Annual Report discusses the adequacy of our internal control systems and procedures.



G. Material developments in human resources / industrial relations, including number of people employed

Our culture and reputation as a leader in the technology services industry enables us to recruit and retain some of the best available talent in India.

1. Human capital Our employees are our most important and valuable assets. During fiscal 2011, we received around 8,29,800 employment applications, approximately 1,36,200 were interviewed and 67,400 job offers were made. As of March 31, 2011, Infosys and its subsidiaries had employed 1,30,820 employees, of which 1,23,811 are technology professionals, including trainees.

The key elements that define our human capital development include :

1.a RecruitmentWe have built our global talent pool by recruiting students from premier universities, colleges and institutes in India and through need-based hiring of project leaders and middle managers. We recruit students in India who have consistently shown high levels of achievement. We have also begun selective recruitment at campuses in the U.S., the U.K., Australia and China. We rely on a rigorous selection process involving a series of aptitude tests and interviews to identify the best applicants. This selection process is continually assessed and refined based on the performance tracking of past recruits.

1.b Training and developmentWith a total built-up area of 1.44 million sq. ft., the Infosys Global Education Center in Mysore, can train approximately 14,000 employees at a time.

As of March 31, 2011, we employed 698 full-time employees as faculty, including 255 with doctorates or masters degrees. Our faculty conducts integrated training for our new employees. Our employees undergo certification programs each year to develop / upgrade the skills relevant for their roles.

Leadership development is a core part of our training program. We established the Infosys Leadership Institute at our Mysore campus to enhance the leadership skills required to manage the complexities of the rapidly changing marketplace.

We have also been working with several colleges across India through our Campus Connect program, enabling their faculty to provide industry related training to students.

1.c CompensationOur technology professionals receive competitive salaries and benefits. We have also adopted a performance-linked compensation program that links compensation to individual performance, as well as the Company’s performance.

28 | Risk management report


Risk management report

The risk management report discusses the various dimensions of our enterprise risk management practices. Readers are cautioned that the risk related information outlined here is not exhaustive and is for information purposes only. The discussion may contain statements, which may be forward-looking in nature. Our business model is subject to uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Readers are advised to exercise their own judgment in assessing risks associated with the Company and refer to discussions of risks in the Company’s previous annual reports and the filings with the Securities and Exchange Commission, USA.

A. Overview Enterprise Risk Management (ERM) at Infosys encompasses practices relating to identification, assessment, monitoring and mitigation of various risks to our business objectives. ERM at Infosys seeks to minimize adverse impact of risks on our business objectives and enable the Company to leverage market opportunities effectively. Further, our risk management practices seek to sustain and enhance the long-term competitive advantage of the Company. Risk management is integral to our business model, described as ‘Predictable, Sustainable, Profitable and De-risked’ (PSPD). Our core values and ethics provide the platform for our risk management practices.

B. Infosys risk management frameworkOur risk management framework comprises of the following key components.

1. Risk management structureThe risk management structure at Infosys spans across the enterprise at all levels. These levels also form the various lines of defense in our risk management.

The key roles and responsibilities regarding risk management in the Company are summarized below :

Level Key roles and responsibilities

Board of Directors (Board)

• Corporate governance oversight of risk management performed by the Executive Management

• Review the performance of the Risk Management Committee

Risk Management Committee (RMC)

• Comprises four independent directors

• David L. Boyles, Chairperson• Sridar A. Iyengar• Dr. Omkar Goswami• Prof. Jeffrey S. Lehman

• Assisting the Board in fulfilling its corporate governance oversight responsibilities with regard to identification, evaluation and mitigation of operational, strategic and external environment risks

• Monitoring and reviewing risk management practices of the Company

• Reviewing and approving risk-related disclosures

Risk Council (RC) • Comprises the Chief Executive Officer (CEO), the Chief Operating Officer (COO) and the Chief Financial Officer (CFO)

• Reviewing enterprise risks from time to time, initiating mitigation actions, identifying the owners and reviewing the progress and effectiveness of mitigation actions

• Formulation and deployment of risk management policies

• Deploying practices for the identification, assessment, monitoring, mitigation and reporting of risks

Level Key roles and responsibilities

Risk Council (RC) • Providing updates to RMC and the Board from time to time on the enterprise risks and actions taken

Office of Risk Management (ORM)

• Comprises the network of risk managers from units and our group companies and is led by the Chief Risk Officer (CRO)

• Facilitating the execution of risk management practices in the enterprise as mandated, in the areas of risk identification, assessment, monitoring, mitigation and reporting

• Providing periodic updates to the RC and quarterly updates to the RMC on top risks and their mitigation

• Working closely with owners of risk in deploying mitigation measures and monitoring their effectiveness.

Unit Heads • Responsible for managing their functions as per the Company risk management philosophy

• Responsible for managing risks concomitant to the business decisions relating to their unit, span of control or area of operations

• Manage risks at the unit level that may arise from time to time, in consultation with the Risk Council

The Infoscion • Adhering to risk management policies and procedures

• Implementation of prescribed risk mitigation actions

• Reporting risk events and incidents in a timely manner

2. Risk categoriesThe following broad categories of risks have been considered in our risk management framework :

• Strategy : Risks emanating out of the choices we make on markets, resources and delivery model which can potentially impact our long-term competitive advantage

• Industry : Risks relating to inherent characteristics of our industry including, competitive structure, technological landscape, extent of linkage to economic environment and regulatory structure

• Counterparty : Risks arising from our association with entities for conducting business. These include clients, vendors, alliance partners and their respective industries

• Resources : Risks arising from inappropriate sourcing or sub-optimal utilization of key organizational resources such as talent, capital and infrastructure

• Operations : Risks inherent to business operations including those relating to client acquisition, service delivery to clients, business support activities, information security, intellectual property, physical security and business activity disruptions

Risk management report | 29


• Regulations and compliance : Risks due to inadequate compliance to regulations, contractual obligations and intellectual property violations leading to litigation and loss of reputation.

3. Key risk management practicesThe key risk management practices include those relating to risk assessment, measurement, monitoring, reporting, mitigation actions and integration with strategy and business planning.

• Risk identification and assessment : Periodic assessment of business risk environment to identify significant risks for the Company and prioritizing the risks for action. Mechanisms for identification and prioritization of risks include risk survey, business risk environment scanning and focused discussions in the RC and the RMC. A risk survey of executives across units, functions and subsidiaries is conducted before the annual strategy exercise. The risk register and internal audit findings also provide pointers for risk identification.

• Risk measurement, mitigation and monitoring : For top risks, dashboards are created that track external and internal indicators relevant for risks, so as to indicate the risk level. The trend line assessment of top risks, analysis of exposure and potential impact are carried out. Mitigation plans are finalized, owners are identified and the progress of mitigation actions are monitored and reviewed.

• Risk Reporting : The top risks report outlining the risk level, trend line, exposure, potential impact and status of mitigation actions is discussed in the RC and the RMC on a periodic basis. In addition, risk update is provided to the Board. Entity level risks such as project and account level risks are reported to and discussed at the appropriate levels within the organization.

• Integration with strategy and business planning : Identified risks are used as one of the key inputs for the development of strategy and annual business plan.

Key components of Infosys Risk Management Framework

C. Overview of risk environment and key risk management activities of the year

While the business risk environment gradually improved during the year, several macro economic and regulatory developments required our close monitoring and interventions. In our key markets, business outlook indicators improved and the financial position of several key clients stabilized during the year. While unemployment rates in key markets moderated, they continued to be high prompting several government policy interventions. There were regulatory changes and proposals relating to visa policies in key markets. Macroeconomic developments in the Eurozone led to high volatility in currencies from which we derive our revenues. Keeping in view the business risk environment, we closely monitored our competitive position and deployed interventions.

Our risk management approach and practices continued to focus on minimizing the adverse impact of risks on our business objectives and to enable the Company to leverage market opportunities based on risk-return parity. Our active management of currency risks minimized the impact in a volatile currency market. Our continued emphasis on credit risk management through periodic credit quality assessments and focused collection mechanisms resulted in the improvement of credit quality indicators. We continued our emphasis on talent management relating to attraction, retention, engagement and competency development. We further strengthened operational risk mitigation mechanisms in areas including information security, data protection, physical security, project service delivery and contracts management. Our periodic assessment and monitoring of business risk and regulatory environment resulted in timely deployment of appropriate mitigation measures.

The following risk management activities were conducted :

1. Top risk identification, tracking and review• Annual risk survey across functions and subsidiaries to

get inputs on key risks and prioritization. Subsequent discussions in the RC and the RMC for finalization of top risks

• Review of top risks in the RC and the RMC covering risk level, trend line, exposure, potential impact and progress of key mitigation actions

• Review discussions on key items from risk register by the RC and the RMC

2. Risk assessments and review• Periodic assessment of business risk environment including

analysis of top clients, counterparty exposures, competitive positioning and sovereign risk

• Risk assessment of regulatory environment, especially those relating to visa and taxation

• Assessment and review of financial risks such as currency risk, credit risk and liquidity

• Risk assessments in multiple areas including talent management, competitive positioning, service delivery, information security, intellectual property, physical security and business continuity

• Review of contractual compliance monitoring systems and account risk management systems in business units

• Evaluation of the company’s ERM program with global best practices

30 | CEO and CFO certification


CEO and CFO certification

To

The Board of Directors Infosys Technologies Limited Bangalore

We, S. Gopalakrishnan, Chief Executive Officer and Managing Director, and V. Balakrishnan, Chief Financial Officer of Infosys Technologies Limited, to the best of our knowledge and belief, certify that :

1. We have reviewed the Balance Sheet and Profit and Loss account (standalone and consolidated), and all the schedules and notes on accounts, as well as the Cash Flow statements, and the Directors’ report.

2. Based on our knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the statements made.

3. Based on our knowledge and information, the financial statements, and other financial information included in this report, present in all material respects a true and fair view of the Company’s affairs, the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report, and are in compliance with the existing accounting standards and / or applicable laws and regulations.

4. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company’s Code of Conduct.

5. We are responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting for the Company, and we have :

a. Designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared.

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP).

c. Evaluated the effectiveness of the Company’s disclosure, controls and procedures.

d. Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

6. We have disclosed, based on our most recent evaluation, wherever applicable, to the Company’s auditors and the audit committee of the Company’s Board of Directors (and persons performing the equivalent functions) :

a. There were no deficiencies in the design or operation of internal controls, that could adversely affect the Company’s ability to record, process, summarize and report financial data, and there have been no material weaknesses in internal controls over financial reporting including any corrective actions with regard to deficiencies.

b. There were no significant changes in internal controls during the year covered by this report.

c. All significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the financial statements.

d. There were no instances of fraud of which we are aware, that involve the Management or other employees who have a significant role in the Company’s internal control system.

7. In the event of any materially significant misstatements or omissions, we will return to the Company that part of any bonus or incentive or equity-based compensation, which was inflated on account of such errors.

8. We affirm that we have not denied any personnel, access to the audit committee of the Company (in respect of matters involving alleged misconduct) and we have provided protection to whistleblowers from unfair termination and other unfair or prejudicial employment practices.

9. We further declare that all Board members and senior managerial personnel have affirmed compliance with the Code of Conduct for the current year.

Bangalore April 15, 2011

S. GopalakrishnanChief Executive Officer andManaging Director


Abridged financial statements | 31


Auditors’ report on abridged financial statements

To the Members of Infosys Technologies Limited

We have examined the abridged Balance Sheet of Infosys Technologies Limited (‘the Company’) as at 31 March, 2011 and the abridged Profit and Loss account and the Cash Flow statement for the year ended on that date, together with the notes thereon.

These abridged financial statements have been prepared by the Company pursuant to Rule 7A of the Companies (Central Government’s) General Rules and Forms, 1956 and are based on the accounts of the Company for the year ended 31 March, 2011 prepared in accordance with Schedule VI to the Companies Act, 1956 and covered by our report dated 15 April, 2011 to the members of the Company which report is attached.

for B S R & Co. Chartered Accountants

Firm’s registration number : 101248W


Bangalore Membership number : 32815

15 April, 2011

32 | Abridged financial statements


Auditors’ report to the members of Infosys Technologies Limited

We have audited the attached Balance Sheet of Infosys Technologies Limited (‘the Company’) as at 31 March, 2011, the Profit and Loss account of the Company and the Cash Flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors’ Report) Order, 2003 (‘the Order’), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (‘the Act’), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that :

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) on the basis of written representations received from the directors, as at 31 March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 31 March, 2011 from being appointed as a director in terms of Section 274 (1)(g) of the Act;

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2011;

(ii) in the case of the Profit and Loss account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.





15 April, 2011



Annexure to the auditors’ report

The Annexure referred to in our report to the members of Infosys Technologies Limited (‘the Company’) for the year ended 31 March, 2011. We report that :

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) The Company is a service company, primarily rendering information technology services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable.

(iii) (a) The Company has granted a loan to a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956 (‘the Act’). The maximum amount outstanding during the year was R 47.71 crore and the year-end balance of such loan amounted to R 22.69 crore. Other than the above, the Company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) In the case of the loan granted to the body corporate listed in the register maintained under Section 301 of the Act, the borrower has been regular in the payment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly, paragraph 4 (iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under Section 301 of the Act.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4 (iii)(e) to 4 (iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of R 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

(viii) The Central Government of India has not prescribed the maintenance of cost records under Section 209 (1)(d) of the Act for any of the services rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees’ State Insurance, Customs duty and Excise duty.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income-tax, Sales tax, Wealth tax, Service tax and other material statutory dues were in arrears as at March 31, 2011 for a period of more than six months from the date they became payable.



(b) According to the information and explanations given to us, there are no material dues of Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to the information and explanations given to us, the following dues of Income tax, Sales tax, and Service tax, have not been deposited by the Company on account of disputes :

Name of the statute Nature of dues Amount (R crore)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961 Fringe benefit tax and interest demanded

2.28 Assessment year 2008-2009 Commissioner of Income Tax (Appeals), Bangalore

Income Tax Act, 1961 Income-tax, interest and penalty demanded

228.19*# Assessment year 2007-2008 Commissioner of Income Tax (Appeals), Bangalore

Income Tax Act, 1961 Interest on Income-tax demanded

0.51 Assessment year 2006-2007 Commissioner of Income Tax (Appeals), Bangalore

KVAT Act, 2003 Sales tax, interest and penalty demanded

24.53* April 2005 to March 2009 High Court of Karnataka

Central Sales Tax Act, 1956 Sales tax demanded 0.31*# April 2007 to March 2008 High Court of Andhra PradeshService tax Service tax demanded 2.58 January 2005 to March 2009 Appellate Tribunal, BangaloreService tax Service tax and penalty

demanded23.15 February 2007 to March 2009 Appellate Tribunal, Bangalore

* Net of amounts paid under protest.# A stay order has been received against the amount disputed and not deposited.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) The Company has not raised any funds on short-term basis.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.





15 April, 2011



Abridged financial statements

Statement containing salient features of Balance Sheet as per Section 219 (1) (b) (iv) of the Companies Act, 1956

Abridged Balance Sheet as at March 31, in r crore

2011 2010I. SOURCES OF FUNDS1. SHAREHOLDERS’ FUNDS

(a) Capital (i) Equity capital 287 287

(b) Reserves and surplus(i) Capital reserve 54 54 (ii) Share premium account 3,057 3,022 (iii) Revenue reserve 5,512 4,867 (iv) Surplus in Profit and Loss account 15,591 13,806

24,501 22,036 2. DEFERRED TAX LIABILITIES 176 232

3. LOAN FUNDS – – TOTAL OF (1) TO (3) 24,677 22,268 II. APPLICATION OF FUNDS1. FIXED ASSETS

(a) Net block (original cost less depreciation) 4,056 3,779 (b) Capital work-in-progress 499 409

4,555 4,188 2. INVESTMENTS

(a) Investment in subsidiary companies – unquoted 1,202 1,125 (b) Others – unquoted 123 3,501

1,325 4,626 3. DEFERRED TAX ASSETS 406 313 4. (I) CURRENT ASSETS, LOANS AND ADVANCES

(a) Sundry debtors 4,212 3,244 (b) Cash and bank balances 13,665 9,797 (c) Loans and advances

(i) To subsidiary companies 32 46 (ii) To others 4,835 3,852

22,744 16,939 (II) LESS : CURRENT LIABILITIES AND PROVISIONS

(a) Liabilities 1,880 1,763 (b) Provisions 2,473 2,035

NET CURRENT ASSETS (I-II) 18,391 13,141 TOTAL OF (1) TO (4) 24,677 22,268

As per our report attached




Membership No. 32815












K. DineshDirector

Bangalore

April 15, 2011








Statement containing salient features of Profit and Loss account as per Section 219 (1)(b)(iv) of the Companies Act, 1956

Abridged Profit and Loss accountFor the year ended March 31, in r crore

2011 2010I. INCOME

Income from software services and products 25,385 21,140 Interest 1,068 743 Dividend 18 101 Other income / (loss) 61 66

TOTAL 26,532 22,050 II. EXPENDITURE

Software development expenses 3,196 2,317 Selling expenses 241 215 Salaries, wages and other employee benefits 12,448 10,340 Managerial remuneration 16 16 Depreciation and amortization 740 807 Auditors’ remuneration 1 1 Provision for doubtful debts 3 (1) Provision for post-sales client support and warranties 5 (2) Other expenses 1,061 885

TOTAL 17,711 14,578 III. PROFIT BEFORE TAX AND EXCEPTIONAL ITEM (I-II) 8,821 7,472 IV. PROVISION FOR TAXATION 2,378 1,717 V. PROFIT AFTER TAX BEFORE EXCEPTIONAL ITEM (III-IV) 6,443 5,755

Income from sale of investments, net of taxes – 48 6,443 5,803

VI. DIVIDEND ON EQUITY SHARESInterim 574 573 30th year special dividend 1,722 – Final dividend 1,149 861 Tax on dividend 568 240

VII. TRANSFER TO RESERVES / SURPLUS 2,430 4,129

















K. DineshDirector

Bangalore

April 15, 2011








Abridged Cash Flow statementFor the year ended March 31, in r crore

2011 2010CASH FLOWS FROM OPERATING ACTIVITIESNet profit before tax and exceptional item 8,821 7,472 Adjustments to reconcile net profit before tax to cash provided by operating activities

Provision for investments – (9) Depreciation and amortization 740 807 Interest and dividend income (1,086) (844) Effect of exchange differences on translation of deferred tax liabilities (6) – Effect of exchange differences on translation of foreign currency cash and cash equivalents (5) 68

Changes in current assets and liabilitiesSundry debtors (968) 146 Loans and advances (704) (368) Current liabilities and provisions 234 236

7,026 7,508 Income taxes paid (2,756) (1,653) NET CASH GENERATED BY OPERATING ACTIVITIES 4,270 5,855 CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets and change in capital work-in-progress (1,152) (565) Investments in subsidiaries (77) (120) Investments in other securities 3,378 (3,497) Interest and dividend received 1,086 831

CASH FLOWS FROM INVESTING ACTIVITIES BEFORE EXCEPTIONAL ITEM 3,235 (3,351) Proceeds on sale of long-term investments, net of taxes – 53

NET CASH USED IN INVESTING ACTIVITIES 3,235 (3,298) CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of share capital on exercise of stock options 24 88 Repayment of loan given to subsidiary 14 5 Dividends paid including residual dividend (3,156) (1,346) Dividend tax paid (524) (228)

NET CASH USED IN FINANCING ACTIVITIES (3,642) (1,481) Effect of exchange differences on translation of foreign currency cash and cash equivalents 5 (68)

NET INCREASE IN CASH AND CASH EQUIVALENTS 3,868 1,008 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 11,297 10,289 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 15,165 11,297

















K. DineshDirector

Bangalore

April 15, 2011







Notes to the abridged financial statements for the year ended March 31, 2011

1. Company overviewInfosys Technologies Limited (‘Infosys’ or ‘the Company’) along with its majority-owned and controlled subsidiary, Infosys BPO Limited (‘Infosys BPO’) and wholly-owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited (‘Infosys Australia’), Infosys Technologies (China) Company Limited (‘Infosys China’), Infosys Consulting, Inc. (‘Infosys Consulting’), Infosys Technologies S. de R. L. de C. V. (‘Infosys Mexico’), Infosys Technologies (Sweden) AB (‘Infosys Sweden’), Infosys Tecnologia do Brasil Ltda (‘Infosys Brasil’), Infosys Public Services, Inc., U.S. (‘Infosys Public Services’) and Infosys Technologies (Shanghai) Company Limited (‘Infosys Shanghai’) is a leading global technology services corporation. The Company provides end-to-end business solutions that leverage cutting-edge technology, thereby enabling clients to enhance business performance. The Company provides solutions that span the entire software lifecycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the Company offers software products for the banking industry. (Note 23 in the Notes to Accounts of the annual standalone financial statements)

2. Notes on accountsAmounts in the abridged financial statements are presented in Indian rupees crore, except for per share data and as otherwise stated. Certain amounts that are required to be disclosed and do not appear due to rounding off are detailed in note 11. All exact amounts are stated with the suffix ‘/-’. One crore equals 10 million.

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation. (Note 23.2 in the Notes to Accounts of the annual standalone financial statements).

3. Capital commitments and contingent liabilitiesin r crore

Particulars As at March 31,2011 2010

Estimated amount of unexecuted capital contracts (net of advances and deposits) 742 267 Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favour of various government authorities and others 3 3 Claims against the Company, not acknowledged as debts (1)

[Net of amount paid to statutory authorities R 469 crore (R 241 crore) ] 271 28

in million

in r crore

in million

in r

croreForward contracts outstanding

In USD 500 2,230 228 1,024 In Euro 20 127 16 97 In GBP 10 72 7 48 In AUD 10 46 3 12

Options contracts outstandingIn USD – – 200 898

2,475 2,079 (1) Claims against the Company not acknowledged as debts include demand from the

Indian tax authorities for payment of additional tax of r 671 crore (r 214 crore),

including interest of r 177 crore (r 39 crore) upon completion of their tax review for fiscal 2005, fiscal 2006 and fiscal 2007. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2005, 2006 and 2007 is pending before the Commissioner of Income tax (Appeals), Bangalore.

The Company is contesting the demands and the Management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.(Note 23.2.2 in the Notes of Accounts of the annual standalone financial statements)

4. Quantitative detailsThe Company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956. (Note 23.2.3 in the Notes to Accounts of the annual standalone financial statements)

5. Related party transactionsList of related parties

Name of subsidiaries Country Holding as at March 31,

2011 2010Infosys BPO India 99.98% 99.98%Infosys Australia Australia 100% 100%Infosys China (1) China 100% 100%Infosys Consulting U.S. 100% 100%Infosys Mexico (2) Mexico 100% 100%Infosys Sweden Sweden 100% 100%Infosys Shanghai (3) China 100% –Infosys Brasil (4) Brazil 100% 100%Infosys Public Services, Inc. U.S. 100% 100%Infosys BPO s.r.o (5) Czech

Republic 99.98% 99.98%Infosys BPO (Poland) Sp.Z.o.o (5) Poland 99.98% 99.98%Infosys BPO (Thailand) Limited (5) Thailand – 99.98%Infosys Consulting India Limited (6) India 100% 100%McCamish Systems LLC (5) (7) U.S. 99.98% 99.98%

(1) During the year ended March 31, 2011, the Company made an additional investment of r 42 crore (US$ 9 million) in Infosys China, which is a wholly owned subsidiary. As of March 31, 2011, and March 31, 2010, the Company has invested an aggregate of r 107 crore (US$ 23 million) and r 65 crore (US$ 14 million) respectively, in the subsidiary.

(2) During the year ended March 31, 2011, the Company made an additional investment of r 14 crore (Mexican Peso 40 million) in Infosys Mexico, which is a wholly owned subsidiary. As of March 31, 2011, and March 31, 2010, the Company has invested an aggregate of r 54 crore (Mexican Peso 150 million) and r 40 crore (Mexican Peso 110 million) respectively, in the subsidiary.

(3) On February 21, 2011, the Company incorporated a wholly-owned subsidiary, Infosys Technologies (Shanghai) Company Limited and invested r 11 crore (US$ 3 million) in the subsidiary. As of March 31, 2011, the Company has invested an aggregate of r 11 crore (US$ 3 million) in the subsidiary.

(4) During the year ended March 31, 2011, the Company made an additional investment of r 10 crore (BRL 4 million) in the subsidiary. As of March 31, 2011, and March 31, 2010, the Company has invested an aggregate of r 38 crore (BRL 15 million) and r 28 crore (BRL 11 million) respectively, in the subsidiary

(5) Infosys BPO s.r.o, Infosys BPO (Poland) Sp.Z.o.o, Infosys BPO (Thailand) Limited and McCamish Systems LLC are wholly owned subsidiaries of Infosys BPO. During the year ended March 31, 2011, Infosys BPO (Thailand) Limited was liquidated.



(6) During the year ended March 31, 2010, Infosys Consulting incorporated wholly-owned subsidiary, Infosys Consulting India Limited. As of March 31, 2011, and March 31, 2010, Infosys Consulting has invested an aggregate of r 1 crore in the subsidiary.

(7) During the year ended March 31, 2010, Infosys BPO acquired 100% of the voting interests in McCamish Systems LLC (McCamish), a business process solutions provider based in Atlanta, Georgia, in the United States. The business acquisition was conducted by entering into Membership Interest Purchase Agreement for a cash consideration of r 173 crore and a contingent consideration of r 67 crore. The acquisition was accounted as a business combination which resulted in goodwill of r 227 crore.

Infosys guarantees the performance of certain contracts entered into by its subsidiaries.

Details of amounts due to or due from as at March 31, 2011 and March 31, 2010 :

in r crore

Particulars As at March 31, 2011 2010

Loans and advancesInfosys China 23 46 Infosys Brasil 9 –

Sundry debtors Infosys China 39 19 Infosys Australia 5 7 Infosys Mexico 1 1 Infosys Consulting 24 26 Infosys Brasil – 1 Infosys BPO (including subsidiaries) 3 2

Sundry creditorsInfosys China 32 18 Infosys Australia – 20 Infosys BPO (including subsidiaries) 3 7 Infosys Consulting 17 43 Infosys Consulting India 1 1 Infosys Mexico 1 5 Infosys Sweden 1 1

Deposit taken for shared servicesInfosys BPO 7 7

The details of the related party transactions entered into by the Company and maximum dues from subsidiaries for the year ended March 31, 2011 and March 31, 2010 are as follows :

in r crore

Particulars Year ended March 31, 2011 2010

Capital transactions : Financing transactions

Infosys Consulting – 50 Infosys China 42 –Infosys Shanghai 11 –Infosys Mexico 14 18 Infosys Brasil 10 28 Infosys Public Services – 24

Loans / AdvancesInfosys Brasil 9 –Infosys China (23) –

Revenue transactions : Purchase of services

Infosys Australia 889 634 Infosys China 240 134 Infosys Consulting 353 378 Infosys Consulting India 5 –Infosys Sweden 12 11 Infosys BPO (including subsidiaries) 17 3 Infosys Brasil 3 5


Infosys Mexico 49 45 Purchase of shared services including facilities and personnel

Infosys BPO (including subsidiaries) 114 53 Interest income

Infosys China 2 3 Sale of services

Infosys Australia 33 25 Infosys China 6 10 Infosys Consulting 73 25 Infosys BPO (including subsidiaries) 21 –

Sale of shared services including facilities and personnel

Infosys BPO (including subsidiaries) 78 71 Infosys Consulting 4 4

Maximum balances of loans and advancesInfosys Australia 81 51 Infosys China 48 48 Infosys Brasil 9 – Infosys BPO (including subsidiaries) – 4 Infosys Mexico 4 4 Infosys Consulting 35 35

During the year ended March 31, 2011, an amount of nil (R 34 crore for the year ended March 31, 2010) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

During the year ended March 31, 2011, an amount of R 12 crore (R 23 crore for the year ended March 31, 2010) has been granted to Infosys Science Foundation, a not-for-profit foundation, in which certain directors and officers of the Company are trustees.(Note 23.2.7 in the Notes to Accounts of the annual standalone financial statements)

6. Transactions with key management personnelKey management personnel comprise directors and members of the executive council.

Particulars of remuneration and other benefits paid to key management personnel during the year ended March 31, 2011 and March 31, 2010 have been detailed in Schedule 12.

The aggregate managerial remuneration under Section 198 of the Companies Act 1956, to the directors (including the managing director) is as follows :

in r crore


Whole-time directorsSalary 2 2 Contribution to provident and other funds 1 – Perquisites and incentives 6 7

Total remuneration 9 9 Non-whole-time directors

Commission 6 6 Reimbursement of expenses 1 1

Total remuneration 7 7



Computation of net profit in accordance with Section 349 of the Companies Act, 1956, and calculation of commission payable to non-whole-time directors are as follows :

in r crore


Net profit after tax and before exceptional item 6,443 5,755 Add :

Whole-time directors’ remuneration 9 9 Commission to non-whole-time-directors 6 6 Provision for bad and doubtful debts 3 (1) Provision for doubtful loans and advances – – Depreciation as per books of accounts 740 807 Provision for taxation 2,378 1,717

9,579 8,293 Less :

Depreciation as envisaged under Section 350 of the Companies Act (1) 740 807

Net profit on which commission is payable 8,839 7,486 Commission payable to non-whole-time-directors : Maximum allowed as per the Companies Act, 1956 at 1% 88 75 Maximum approved by the share holders at 1% (1%) 88 75 Commission approved by the Board 6 6

(1) The Company depreciates fixed assets based on estimated useful lives that are lower than those prescribed in Schedule XIV of the Companies Act, 1956. Accordingly, the rates of depreciation used by the Company are higher than the minimum prescribed by Schedule XIV.

During the year ended March 31, 2011 and March 31, 2010, Infosys BPO has provided for commission of R 0.12 crore and R 0.12 crore to a non-whole-time director of Infosys.(Note 23.2.8 in the Notes to Accounts of the annual standalone financial statements).

7. Dues to micro, small and medium enterprisesThe Company has no dues to micro and small enterprises during the year ended March 31, 2011 and March 31, 2010 and as at March 31, 2011 and March 31, 2010. (Note 23.2.24 in the Notes to Accounts of the annual standalone financial statements)

8. Aggregate fair value of unquoted investmentsAs at March 31, 2011 and March 31, 2010, the aggregate fair value of unquoted investments is R 119 crore and R 3,497. (Note 23.2.15 in the Notes to Accounts of the annual standalone financial statements)

9. Cash and cash equivalentsin r crore


As per the Balance Sheet 13,665 9,797 Add : Deposits with financial institutions

(excluding interest accrued but not due) (1) 1,500 1,500

15,165 11,297

(1) Excludes restricted deposits held with Life Insurance Corporation of India of r 344 crore (r 281 crore) for funding leave liability.

10. Important ratios

Ratio Year ended March 31, 2011 2010

Sales to total assets ratio 1.03 0.95 Operating profit / average capital employed ratio (%) 32.98 32.89 Return on average net worth – before exceptional item (%) 27.69 28.89 Return on average net worth – after exceptional item (%) 27.69 29.13 Profit after tax to sales ratio – before exceptional item (%) 25.38 27.22 Profit after tax to sales ratio – after exceptional item (%) 25.38 27.45

11. Details of rounded off amountsThe abridged financial statements are represented in R crore as per the approval received from Department of Company Affairs (DCA) earlier. Those items which were not represented in the abridged financial statement due to rounding off to the nearest R crore are given as follows :

Balance Sheet itemsin r crore

Schedule Description As at March 31, 2011 2010

5 Related party transactionsDebtors

Infosys BPO s.r.o. – 0.04 Infosys Consulting India 0.29 – Infosys Thailand – 0.04 Infosys Sweden – 0.08 Infosys Public Services 0.11 – Infosys Brasil – 0.62

CreditorsInfosys Brasil 0.14 0.16 Infosys Mexico 0.31 – Infosys Thailand – 0.02

Profit & Loss itemsin r crore

Schedule Description Year ended March 31, 2011 2010

5 Related party transactions

Revenue transactionsPurchase of services – Infosys BPO s.r.o. – 0.44 Purchase of services – Infosys BPO (Poland) 0.41 0.03 Purchase of services – Infosys Brasil 0.35 –

(Note 23.3 in the Notes to Accounts of the annual standalone financial statements)



12. Transactions with key management personnelKey management personnel comprises of directors and members of the executive council.

Particulars of remuneration and other benefits paid to whole-time directors and members of executive council during the year ended March 31, 2011 and March 31, 2010 are as follows :

in r crore

Name Salary Contribu- tions to

provident and other

funds

Perqui-sites and

incentives

Total remu-

neration

Co-Chairman

Nandan M. Nilekani (1) – – – – 0.09 0.02 0.23 0.34

Chief Executive Officer and Managing Director

S. Gopalakrishnan 0.34 0.08 0.69 1.11 0.32 0.08 0.61 1.01

Chief Operating Officer and Director

S. D. Shibulal 0.34 0.08 0.66 1.08 0.31 0.08 0.56 0.95

Whole-time Directors K. Dinesh 0.34 0.08 0.68 1.10

0.32 0.08 0.61 1.01 T. V. Mohandas Pai 0.43 0.10 2.56 3.09

0.36 0.08 2.69 3.13 Srinath Batni 0.43 0.10 1.76 2.29

0.36 0.07 1.98 2.41 Executive Council Members Chief Financial Officer

V. Balakrishnan 0.38 0.08 2.15 2.61 0.30 0.08 2.06 2.44

Ashok Vemuri 2.22 – 3.10 5.32 2.09 – 2.79 4.88

Chandra Shekar Kakal 0.34 0.08 2.16 2.58 0.28 0.06 1.73 2.07

B. G. Srinivas 1.94 – 2.99 4.93 1.81 – 2.75 4.56

Subhash B. Dhar 0.30 0.08 1.69 2.07 0.24 0.07 1.42 1.73

(1) Effective July 9, 2009, Nandan M. Nilekani has relinquished the positions of Co-Chairman and Member of the Board.

Particulars of remuneration and other benefits of non-executive / independent directors for the year ended March 31, 2011 and March 31, 2010 are as follows :

Name Com- mission

Sitting fees

Reim- burse-

ment of expenses

Total remu-

neration

Independent DirectorsDeepak M. Satwalekar 0.59 – 0.01 0.60

0.60 – – 0.60 Prof. Marti G. Subrahmanyam 0.79 – 0.23 1.02

0.65 – 0.20 0.85 Dr. Omkar Goswami 0.51 – 0.03 0.54

0.52 – 0.03 0.55 Claude Smadja (1) 0.23 – 0.09 0.32

0.59 – 0.25 0.84 Rama Bijapurkar (2) 0.04 – – 0.04

0.49 – 0.02 0.51 Sridar A. Iyengar 0.69 – 0.24 0.93

0.62 – 0.21 0.83 David L. Boyles 0.65 – 0.34 0.99

0.59 – 0.15 0.74 Prof. Jeffrey S. Lehman 0.67 – 0.13 0.80

0.61 – 0.24 0.85 K. V. Kamath 0.56 – 0.01 0.57

0.39 – 0.02 0.41 R. Seshasayee (3) 0.10 – – 0.10

– – – –Non-executive Chairman and Chief mentorN. R. Narayana Murthy 0.61 – – 0.61

0.57 – – 0.57 (1) Retired from the Board effective August 30, 2010 (2) Resigned from the Board effective April 13, 2010 (3) Joined the Board effective January 13, 2011 (Note 23.4 in the Notes to Accounts of the annual standalone financial statements)

42 | Balance sheet abstract and the Company’s general business profile


Balance Sheet abstract and the Company's general business profile

Amount in r crore, except per share data

I. Registration details

CIN L 8 5 1 1 0 K A 1 9 9 2 P L C 0 1 3 1 1 5

Registration no. 1 3 1 1 5 State code 0 8

Balance Sheet date 3 1 0 3 1 1Date Month Year

II. Capital raised during the year

Public issue N I L Rights issue N I L

Bonus issue N I L Private placement N I L

Preferential offer of shares under the Employee Stock Option Plan scheme (1) 2 4

III. Position of mobilization and deployment of funds

Total liabilities 2 4 6 7 7 Total assets 2 4 6 7 7

Sources of funds

Paid-up capital 2 8 7 Reserves and surplus 2 4 2 1 4

Secured loans N I L Unsecured loans N I L

Deferred tax liabilities 1 7 6

Application of funds

Net fixed assets 4 5 5 5 Investments 1 3 2 5

Net current assets 1 8 3 9 1 Deferred tax assets 4 0 6

Miscellaneous expenditure N I L Accumulated losses N I L

IV. Performance of the Company Income from software services and products 2 5 3 8 5 Other Income 1 1 4 7

Total income 2 6 5 3 2 Total expenditure 1 7 7 1 1

Profit before tax 8 8 2 1 Profit after tax 6 4 4 3

Earning per share (Basic) (R ) 1 1 2 . 2 6Earning per share (Diluted) (R ) 1 1 2 . 2 2

Dividend rate (%) (Equity share of par value R 5/- each) (2) 1 2 0 0

V. Generic names of principal product / services of the Company (as per monetary terms)

Item code no. (ITC Code) 8 5 2 4 9 0 0 9

Product description C O M P U T E R S O F T W A R E

(1) Issue of shares arising on the exercise of options granted to employees under the Company’s (no.) – 1998 Plan : 1,88,675; 1999 Plan : 1,37,692(2) Including 600% of 30th year special dividend












K. DineshDirector

Bangalore

April 15, 2011





Consolidated financial statements | 43


Consolidated financial statements

Auditors’ report To the board of directors of Infosys Technologies Limited

We have audited the attached consolidated Balance Sheet of Infosys Technologies Limited (‘the Company’) and subsidiaries (collectively referred to as the ‘Infosys Group’) as at 31 March, 2011, the consolidated Profit and Loss Account of the Infosys Group for the year ended on that date and the consolidated Cash Flow Statement of the Infosys Group for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that the consolidated financial statements have been prepared by the Company’s management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial statements prescribed by the Companies (Accounting Standards) Rules, 2006.

In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India :

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Infosys Group as at 31 March 2011;(b) in the case of the consolidated Profit and Loss Account, of the profit of the Infosys Group for the year ended on that date; and(c) in the case of the consolidated Cash Flow Statement, of the cash flows of the Infosys Group for the year ended on that date.





April 15, 2011

44 | Consolidated financial statements


Consolidated Balance Sheet

As at March 31, in r crore

Schedule 2011 2010SOURCES OF FUNDSSHAREHOLDERS’ FUNDS

Share capital 1 286 286 Reserves and surplus 2 25,690 22,763

25,976 23,049 DEFERRED TAX LIABILITIES 5 176 232 MINORITY INTEREST – –

26,152 23,281 APPLICATION OF FUNDSFIXED ASSETS 3

Original cost 8,501 7,839 Less : Accumulated depreciation and amortization 3,266 2,893 Net book value 5,235 4,946 Add : Capital work-in-progress 525 409

5,760 5,355 INVESTMENTS 4 144 3,702 DEFERRED TAX ASSETS 5 497 432 CURRENT ASSETS, LOANS AND ADVANCES

Sundry debtors 6 4,653 3,494 Cash and bank balances 7 15,095 10,556 Loans and advances 8 5,320 4,197

25,068 18,247 LESS : CURRENT LIABILITIES AND PROVISIONS

Current liabilities 9 2,677 2,343 Provisions 10 2,640 2,112

NET CURRENT ASSETS 19,751 13,792 26,152 23,281

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 24Note : The schedules referred to above form an integral part of the consolidated Balance Sheet.

















K. DineshDirector

Bangalore

April 15, 2011







Consolidated Profit and Loss account

For the year ended March 31, in r crore, except per share data

Schedule 2011 2010Income from software services, products and business process management 27,501 22,742 Software development and business process management expenses 11 15,054 12,071 GROSS PROFIT 12,447 10,671 Selling and marketing expenses 12 1,512 1,184 General and administration expenses 13 1,967 1,626

3,479 2,810 OPERATING PROFIT BEFORE DEPRECIATION AND MINORITY INTEREST 8,968 7,861 Depreciation 854 905 OPERATING PROFIT BEFORE MINORITY INTEREST 8,114 6,956 Other income, net 14 1,211 934 Provision for investments – (9) NET PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEM 9,325 7,899 Provision for taxation (refer to note 24.2.8) 15 2,490 1,681 NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST AND EXCEPTIONAL ITEM 6,835 6,218 Income from sale of investments, net of taxes (refer to note 24.2.22) – 48 NET PROFIT AFTER TAX, EXCEPTIONAL ITEM AND BEFORE MINORITY INTEREST 6,835 6,266 Minority interest – – NET PROFIT AFTER TAX, EXCEPTIONAL ITEM AND MINORITY INTEREST 6,835 6,266 Balance Brought Forward 14,371 10,560 Add : Intercompany dividend 16 –

14,387 10,560 AMOUNT AVAILABLE FOR APPROPRIATION 21,222 16,826 Interim dividend 574 573 Interim dividend – 30th year special dividend 1,722 – Final dividend 1,149 861 Total dividend 3,445 1,434 Dividend tax 568 240 Amount transferred to general reserve 1,245 780 Amount transferred to capital reserve – 48 Balance in Profit and Loss account 15,964 14,324

21,222 16,826 EARNINGS PER SHARE Equity shares of par value R 5/- eachBefore exceptional item

Basic 119.66 108.99 Diluted 119.63 108.87

After exceptional itemBasic 119.66 109.84 Diluted 119.63 109.72

Number of shares used in computing earnings per share (1)

Basic 57,11,80,050 57,04,75,923Diluted 57,13,68,358 57,11,16,031

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 24Notes : The schedules referred to above form an integral part of the consolidated Profit and Loss account. (1) Refer to note 24.2.16

















K. DineshDirector

Bangalore

April 15, 2011







Consolidated Cash Flow statement

For the year ended March 31, in r crore

Schedule 2011 2010CASH FLOWS FROM OPERATING ACTIVITIESNet profit before tax, minority interest and exceptional item 9,325 7,899 Adjustments to reconcile net profit before tax to cash provided by operating activities

(Profit) / loss on sale of fixed assets – (2) Provision for investments – (9) Depreciation 854 905 Interest and dividend income (1,154) (881) Effect of exchange differences on translation of deferred tax liability (8) Effect of exchange differences on translation of foreign currency cash and cash equivalents (45) 31 Effect of exchange differences on translation of subsidiaries 54 54

Changes in current assets and liabilitiesSundry debtors 16 (1,159) 194 Loans and advances 17 (758) (438) Current liabilities and provisions 18 489 187

7,598 7,940 Income taxes paid 19 (2,846) (1,753) NET CASH GENERATED BY OPERATING ACTIVITIES 4,752 6,187 CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of fixed assets and change in capital work-in-progress 20 (1,305) (658) Payment for acquisition of business, net of cash acquired (3) (173) Investments in / (disposal) of securities 21 3,558 (3,698) Proceeds from disposal of fixed assets – 2 Interest and dividend received 22 1,148 871

Cash flow from investing activities before exceptional item 3,398 (3,656) Proceeds on sale of long-term investments, net of taxes (refer to note 24.2.22) – 53 NET CASH USED IN INVESTING ACTIVITIES 3,398 (3,603) CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of share capital on exercise of stock options 24 89 Dividends paid including net of intercompany dividend (3,140) (1,346) Dividend tax paid (524) (228)

NET CASH USED IN FINANCING ACTIVITIES (3,640) (1,485) Effect of exchange differences on translation of foreign currency cash and cash equivalents 45 (31) NET INCREASE IN CASH AND CASH EQUIVALENTS 4,555 1,068 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 12,111 10,993 Add : Opening balance of cash and cash equivalents arising on consolidation of controlled

trusts – 50 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 23 16,666 12,111 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 24

Note : The schedules referred to above form an integral part of the consolidated Cash Flow statement.

















K. DineshDirector

Bangalore

April 15, 2011







Schedules to the consolidated Balance Sheet

in r crore, except as otherwise stated

As at March 31, 2011 20101 SHARE CAPITAL

AuthorizedEquity shares, R 5/- par value60,00,00,000 (60,00,00,000) equity shares 300 300

Issued, subscribed and paid upEquity shares,R 5/- par value (1) 287 287 57,41,51,559 (57,38,25,192) equity shares fully paid up

Less : 28,33,600 (28,33,600) shares held by Controlled Trusts 1 1

286 286 [Of the above, 53,53,35,478 (53,53,35,478) equity shares, fully paid up have been issued as bonus shares by capitalization of the general reserve]

286 286 Notes : Forfeited shares amounted to r 1,500/- (r 1,500/-) (1) For details of options in respect of equity shares, refer to note 24.2.7 and also

refer to note 24.2.16 for details of basic and diluted shares.

3 FIXED ASSETS in r crore, except as otherwise stated

Particulars Original cost Depreciation and amortization Net book valueAs at

April 1, 2010

Additions / Adjustments

Deletions / Retirement / Adjustments

As at March 31,

2011

As at April 1,

2010

For the year Deletions / Adjustments

As at March 31,

2011

As at March 31,

2011

As at March 31,

2010

Goodwill 916 – – 916 – – – – 916 916 Land : Freehold 178 229 – 407 – – – – 407 178

Leasehold 149 – 3 146 – – – – 146 149 Buildings (1) 3,300 326 – 3,626 745 233 – 978 2,648 2,555 Plant and machinery (2) 1,263 169 146 1,286 648 238 147 739 547 615 Computer equipment (2) 1,251 294 214 1,331 1,046 236 213 1,069 262 205 Furniture and fixtures (2) 710 78 113 675 403 124 112 415 260 307 Leasehold improvements 55 48 8 95 37 22 9 50 45 18 Vehicles 5 2 – 7 2 1 – 3 4 3 Intellectual property right 12 – – 12 12 – – 12 – –

7,839 1,146 484 8,501 2,893 854 481 3,266 5,235 4,946 Previous year 7,093 1,175 429 7,839 2,416 905 428 2,893 4,946

Notes : (1) Buildings include r 250/- being the value of 5 shares of r 50/- each in Mittal Towers Premises Co-operative Society Limited. (2) During the years ended March 31, 2011 and March 31, 2010, certain assets which were old and not in use having gross book value of r 488 crore and r 387 crore respectively,

(net book value nil) were retired.

As at March 31, 2011 20104 INVESTMENTS (1)

Long-term investments – at costTrade (unquoted) Other investments 6 7 Less : Provision made for

investments 2 3 4 4

Current investments – at the lower of cost and fair valueNon-trade (unquoted) Liquid mutual fund units 21 2,518 Certificates of deposit 119 1,180

140 3,698 144 3,702

Aggregate amount of unquoted investments 144 3,702

(1) Refer to note 24.2.11


As at March 31, 2011 20102 RESERVES AND SURPLUS

Capital reserve 54 6 Add : Transfer from Profit and Loss

account (refer to note 24.2.22) – 48 54 54

Foreign currency translation reserve 101 47 Share premium account – As at April 1, 3,027 2,925 Add : Share premium arising on

consolidation of controlled trusts – 4 Receipts on exercise of employee stock options 24 88 Income tax benefit arising from exercise of stock options 11 10

3,062 3,027 General reserve – As at April 1, 5,264 4,484 Add : Transfer from Profit and Loss

account 1,245 780 6,509 5,264

Balance in Profit and Loss account 15,964 14,324 Add : Corpus of the controlled

trusts – 47 15,964 14,371 25,690 22,763

As at March 31, 2011 20105 DEFERRED TAXES

Deferred tax assetsFixed assets 253 217 Sundry debtors 20 28 Others 224 187

497 432 Deferred tax liabilitiesBranch profit tax 176 232

176 232




As at March 31, 2011 20106 SUNDRY DEBTORS

Debts outstanding for a period exceeding six months

Unsecured Considered good – – Considered doubtful 67 81

Other debtsUnsecured

Considered good (1) 4,653 3,494 Considered doubtful 19 21

4,739 3,596 Less : Provision for doubtful debts 86 102

4,653 3,494 (1) Includes dues from companies where our

directors are interested 2 11

Schedules to the consolidated Balance Sheet


As at March 31, 2011 20107 CASH AND BANK BALANCES (1)

Cash on hand – –Balances with scheduled banks (2)

In current accounts (3) 225 175 In deposit accounts 13,610 9,092

Balances with non-scheduled banks In deposit accounts 708 336 In current accounts 552 953

15,095 10,556 (1) Refer to note 24.2.20 for details of balances

with scheduled and non-scheduled banks(2) Includes balance held by controlled trusts

(refer to note 24.2.21.b) 89 48 (3) Includes balance in unclaimed dividend

account (refer to note 24.2.21.a) 3 2

8 LOANS AND ADVANCESUnsecured, considered goodAdvances

Prepaid expenses 67 39 For supply of goods and rendering of services 36 19 Withholding and other taxes receivable 548 343 Others 24 30

675 431 Unbilled revenues 1,243 841 Advance income taxes 993 667 MAT credit entitlement (refer to note 24.2.8) 63 42 Interest accrued and not due 25 19 Loans and advances to employees

Housing and other loans 47 38 Salary advances 94 73

Electricity and other deposits 63 63 Rental deposits 43 36 Deposits with financial institutions (refer to note 24.2.9) (1) 2,008 1,892 Mark-to-market gain on forward and options contracts 66 95

5,320 4,197 Unsecured, considered doubtfulLoans and advances to employees 3 3

5,323 4,200 Less : Provision for doubtful loans

and advances to employees 3 3 5,320 4,197

(1) Includes balance held by controlled trusts (refer to note 24.2.21.b) 86 21

9 CURRENT LIABILITIESSundry creditors

Goods and services 44 10 Accrued salaries and benefits

Salaries 83 55 Bonus and incentives 649 594

For other liabilitiesProvision for expenses 791 645 Retention monies 26 72 Withholding and other taxes payable 329 250

Payable for acquisition of business 65 68 Gratuity obligation – unamortized amount 22 26 Others 6 8

2,015 1,728 Advances received from clients 22 8 Payable by controlled trusts 119 74 Unearned revenue 518 531 Unclaimed dividend (1) 3 2

2,677 2,343 (1) Refer to note 24.2.21.a

10 PROVISIONSProposed dividend 1,149 861 Provision for

Tax on dividend 187 143 Income taxes (1) 817 724 Unavailed leave 399 302 Post-sales client support and warranties (2) 88 82

2,640 2,112 (1) Refer to note 24.2.8(2) Refer to note 24.2.17



Schedules to consolidated Profit and Loss account


For the year ended March 31, 2011 201011 SOFTWARE DEVELOPMENT

AND BUSINESS PROCESS MANAGEMENT EXPENSESSalaries and bonus including overseas staff expenses 12,460 10,285Contribution to provident and other funds 420 281Staff welfare 91 44Technical sub-contractors 603 372 Software packages for own use 350 336 Third party items bought for service delivery to clients 139 17 Overseas travel expenses 690 488 Communication expenses 82 83 Rent 90 73 Computer maintenance 53 29 Consumables 27 25 Provision for post-sales client support and warranties 5 (2) Miscellaneous expenses 44 40

15,054 12,071

12 SELLING AND MARKETING EXPENSESSalaries and bonus including overseas staff expenses 1,208 928 Contribution to provident and other funds 7 4 Staff welfare 3 2 Overseas travel expenses 121 99 Travel and conveyance 7 7 Brand building 74 57 Commission charges 15 16 Professional charges 16 23 Rent 17 15 Marketing expenses 22 15 Telephone charges 15 11 Printing and stationery 1 1 Sales promotion 1 1 Communication expenses 2 3 Miscellaneous expenses 3 2

1,512 1,184


For the year ended March 31, 2011 201013 GENERAL AND

ADMINISTRATION EXPENSESSalaries and bonus including overseas staff expenses 638 520 Contribution to provident and other funds 29 21 Staff welfare – –Overseas travel expenses 28 23 Travel and conveyance 108 75 Telephone charges 138 128 Professional charges 328 255 Power and fuel 167 145 Office maintenance 222 165 Guest house maintenance 9 4 Insurance charges 33 31 Printing and stationery 13 11 Rates and taxes 54 31 Donations 1 44 Rent 39 37 Advertisements 7 3 Professional membership and seminar participation fees 12 9 Repairs to building 45 34 Repairs to plant and machinery 36 32 Postage and courier 13 12 Books and periodicals 4 4 Recruitment and training 2 2 Provision for bad and doubtful debts 2 – Provision for doubtful loans and advances 2 1 Commission to non-whole-time directors 6 6 Auditor’s remuneration –

Statutory audit fees 2 2 Bank charges and commission 2 2 Freight charges 2 1 Research grants 18 23 Miscellaneous expenses 7 5

1,967 1,626

14 OTHER INCOME, NETInterest received on deposits with banks and others (1) 1,133 775 Dividend received on investment in liquid mutual funds (non-trade unquoted) 21 106 Miscellaneous income, net (refer to note 24.2.10) 15 23 Gains / (losses) on foreign currency 42 30

1,211 934 (1) Includes tax deducted at source 94 97

15 PROVISION FOR TAXATIONIncome taxes (1) 2,624 2,059 MAT credit entitlement (21) (307) Deferred taxes (2) (113) (71)

2,490 1,681 (1) Refer to note 24.2.8(2) Excludes translation difference of r 8 crore on deferred tax liabilities



Schedules to consolidated Cash Flow statement


For the year ended March 31, 2011 201016 CHANGE IN SUNDRY DEBTORS

As per the Balance Sheet 4,653 3,494 Less : Opening balance considered 3,494 3,672

Sundry debtors pertaining to acquired business – 16

1,159 (194)

17 CHANGE IN LOANS AND ADVANCESAs per the Balance Sheet (1) 5,320 4,197 Less : Gratuity obligation –

unamortized amount relating to plan amendment (2) 22 26 Deposits with financial institutions, included in cash and cash equivalents (3) 1,571 1,555 MAT credit entitlement 63 42 Advance income taxes 993 667 Interest accrued and not due 25 19

2,646 1,888 Less : Opening balance considered 1,888 1,388

Opening balance of loans and advances pertaining to controlled trusts and acquired business – 62

758 438 (1) Net of gratuity transitional liability(2) Refer to note 24.2.18(3) Excludes restricted deposits held with LIC of r 437 crore (r 337 crore) for funding

employee related obligations

18 CHANGE IN CURRENT LIABILITIES AND PROVISIONSAs per the Balance Sheet 5,317 4,455 Less : Unclaimed dividend 3 2

Gratuity obligation – unamortized amount relating to plan amendment 22 26 Retention monies 26 72 Payable for acquisition of business 65 68 Provisions considered separately in cash flow statement

Dividends 1,149 861 Tax on dividend 187 143 Income taxes 817 724

3,048 2,559 Less : Opening balance considered 2,559 2,298

Opening Balance of current liabilities and provisions pertaining to controlled trusts and acquired business – 74

489 187


For the year ended March 31, 2011 201019 INCOME TAXES PAID

Charge as per the Profit and Loss account 2,490 1,681 Add : Increase / (Decrease) in

advance income taxes 326 393 Increase / (Decrease) in deferred taxes (1) 113 74 Increase / (Decrease) in MAT credit entitlement 21 (242)

Less : (Increase) / Decrease in income tax provision 93 143 Income tax benefits arising from exercise of stock options 11 10

2,846 1,753 (1) Excludes translation difference of r 8 crore on deferred tax liabilities

20 PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESSAdditions as per Balance Sheet (1) 1,143 943 Less : Opening capital work-in-

progress 409 677 Add : Closing capital work-in-

progress 525 409 Add : Opening retention monies 72 55 Less : Closing retention monies 26 72

1,305 658 (1) Net of r 3 crore movement in land from leasehold to free-hold upon acquisition as at

March 31, 2011 and excludes goodwill of r 227 crore and net fixed assets of r 5 crore pertaining to acquired business as at March 31, 2010.

21 INVESTMENTS IN / (DISPOSAL OF) SECURITIES (1)

As per the Balance Sheet 140 3,698 Less : Opening balance considered 3,698 –

(3,558) 3,698 (1) Refer to note 24.2.11 for details of investments and redemptions

22 INTEREST AND DIVIDEND RECEIVED Interest and dividend income as per Profit and Loss account 1,154 881 Add : Opening interest accrued but

not due 19 6 Less : Closing interest accrued but

not due (1) 25 16 1,148 871

(1) Excludes r 3 crore pertaining to controlled trusts as of March 31, 2010

23 CASH AND CASH EQUIVALENTS AT THE ENDAs per the Balance Sheet 15,095 10,556 Add : Deposits with financial

institutions (excluding interest accrued and not due) (1) 1,571 1,555

16,666 12,111 (1) Excludes restricted deposits held with LIC of R 437 crore (R 337 crore) for funding

employee related obligations



Schedules to the consolidated financial statements for the year ended March 31, 201124. Significant accounting policies and notes

on accounts

Company overviewInfosys Technologies Limited (‘Infosys’ or ‘the Company’) along with its majority owned and controlled subsidiary, Infosys BPO Limited (‘Infosys BPO’) and wholly owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited (‘Infosys Australia’), Infosys Technologies (China) Company Limited (‘Infosys China’), Infosys Consulting, Inc. (‘Infosys Consulting’), Infosys Technologies S. de R. L. de C.V. (‘Infosys Mexico’), Infosys Technologies (Sweden) AB (‘Infosys Sweden’), Infosys Tecnologia do Brasil Ltda (‘Infosys Brasil’), Infosys Public Services, Inc., U.S. (‘Infosys Public Services’) and Infosys Technologies (Shanghai) Company Limited (‘Infosys Shanghai’) and controlled trusts is a leading global technology services corporation. The group of companies (‘the Group’) provides end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance. The Group provides solutions that span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the Group offers software products for the banking industry, business consulting and business process management services.

24.1. Significant accounting policies

24.1.1. Basis of preparation of financial statementsThe financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair value. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements are prepared in accordance with the principles and procedures required for the preparation and presentation of consolidated financial statements as laid down under the Accounting Standard (AS) 21, ‘Consolidated Financial statements’. The financial statements of Infosys – the parent Company, Infosys BPO, Infosys China, Infosys Australia, Infosys Mexico, Infosys Consulting, Infosys Sweden, Infosys Brasil, Infosys Public Services, Infosys Shanghai and controlled trusts have been combined on a line-by-line basis by adding together book values of items like assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gain / loss. The consolidated financial statements are prepared by applying uniform accounting policies in use at the Group. Minority interests have been excluded. Minority interests represent that part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company.

24.1.2. Use of estimatesThe preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage-of-completion which requires the Group to estimate the efforts expended to date as a proportion of the total efforts to be expended, provisions for doubtful

debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the consolidated financial statements for the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset’s net selling price and value in use which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset other than goodwill is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss that had been recognized for the asset in previous years.

24.1.3. Revenue recognitionRevenue is primarily derived from software development and related services, licensing of software products and business process management. Arrangements with customers are either on a fixed-price, fixed-timeframe or on a time and material basis.

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price, fixed-timeframe contracts, where there is no uncertainty as to the measurement or collectability of consideration, is recognized based upon the percentage-of-completion method. When there is uncertainty as to the measurement or the ultimate collectability revenue recognition is postponed until such uncertainty is resolved. Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates.

Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized ratably over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts, which require significant implementation services, where revenue for the entire arrangement is recognized over the implementation period based upon the percentage of completion. Revenue from client training, support and other services arising out of the sale of software products is recognized as the related services are performed.

The Group accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discount / incentive amount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount / incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Group recognizes the liability based on its estimate of the customer’s future purchases. If it is probable that the criteria for the discount will not be met,



or if the amount thereof cannot be estimated reliably, then the discount is not recognized until the payment is probable and the amount can be estimated reliably. The Group recognizes changes in the estimated amount of obligations for discounts using a cumulative catch-up approach. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

The Group presents revenues net of value-added taxes in its consolidated Profit and Loss account.

Profit on sale of investments is recorded on transfer of title from the Group and is determined as the difference between the sale price and carrying value of the investment. Lease rentals are recognized ratably on a straight-line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Group’s right to receive dividend is established.

24.1.4. Provisions and contingent liabilitiesA provision is recognized if, as a result of a past event, the Group has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

24.1.4.a. Post-sales client support and warrantiesThe Group provides its clients with a fixed-period warranty for corrections of errors and call support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales. The Group estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions.

24.1.4.b. Onerous contractsProvisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.

24.1.5. Fixed assets, including goodwill, intangible assets and capital work-in-progress

Fixed assets are stated at cost, less accumulated depreciation and impairments, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Goodwill comprises the excess of purchase consideration over the fair value of the net assets of the acquired enterprise. Goodwill arising on consolidation or acquisition is not amortized but is tested for impairment.

24.1.6. Depreciation and amortizationDepreciation on fixed assets is provided on the straight-line method based on useful lives of assets as estimated by the Management. Depreciation for assets purchased / sold during the period is proportionately charged. Individual low cost assets (acquired for less than R 5,000/-) are depreciated over a period of one year from the date of acquisition. Intangible assets are amortized over their respective

individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Group for its use. Leasehold improvements are written off over the lower of the remaining primary period of lease or the life of the asset. The Management estimates the useful lives for the other fixed assets as follows :

Buildings 15 yearsPlant and machinery 5 yearsComputer equipment 2-5 yearsFurniture and fixtures 5 yearsVehicles 5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

24.1.7. Retirement benefits to employees

24.1.7.a. GratuityIn accordance with the Payment of Gratuity Act, 1972, Infosys provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible employees of the Company and Infosys BPO. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Group.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees’ Gratuity Fund Trust (‘the Trust’). In case of Infosys BPO, contributions are made to the Infosys BPO Employees’ Gratuity Fund Trust. Trustees administer contributions made to the Trusts and contributions are invested in specific instruments, as permitted by the law. The Group recognizes the net obligation of the Gratuity plan in the consolidated Balance Sheet as an asset or liability, respectively in accordance with AS 15, ‘Employee Benefits’. The Group’s overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made and historical returns. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the consolidated Profit and Loss account in the period in which they arise.

24.1.7.b. Superannuation Certain employees of Infosys are also participants in the superannuation plan (‘the Plan’) which is a defined contribution plan. The Company has no obligations to the Plan beyond its monthly contributions. Certain employees of Infosys BPO and Infosys Australia are also eligible for superannuation benefit. Infosys BPO and Infosys Australia makes monthly provisions under the superannuation plan based on a specified percentage of each covered employee’s salary. Infosys BPO has no further obligations to the superannuation plan beyond its monthly provisions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

24.1.7.c. Provident fundEligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee’s salary. The Company contributes a part of the contributions to the Infosys Technologies Limited Employees’ Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.



In respect of Infosys BPO, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Infosys BPO make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee’s salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. Infosys BPO has no further obligations under the provident fund plan beyond its monthly contributions

24.1.7.d. Compensated absencesThe employees of the Group are entitled to compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

24.1.8. Research and developmentResearch costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably.

24.1.9. Foreign currency transactionsForeign currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the Profit or Loss account. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

The functional currency of Infosys and Infosys BPO is the Indian rupee. The functional currencies for Infosys Australia, Infosys China, Infosys Consulting, Infosys Mexico, Infosys Sweden, Infosys Brasil, Infosys Public Services and Infosys Shanghai are their respective local currencies. The translation of financial statements of the foreign subsidiaries from the local currency to the functional currency of the Company is performed for Balance Sheet accounts using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using a monthly average exchange rate for the respective periods and the resulting difference is presented as foreign currency translation reserve included in ‘Reserves and Surplus’. When a subsidiary is disposed off, in part or in full, the relevant amount is transferred to Profit or Loss.

24.1.10. Forward contracts and options in foreign currencies

The Group uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduce the risk or cost to the Group and the Group does not use those for trading or speculation purposes.

Effective April 1, 2008, the Group adopted AS 30, ‘Financial Instruments : Recognition and Measurement’, to the extent that the adoption did not conflict with existing accounting standards and other

authoritative pronouncements of Company Law and other regulatory requirements.

Forward and options contracts are fair valued at each reporting date. The resultant gain or loss from these transactions is recognized in the Profit or Loss account. The Group records the gain or loss on effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the consolidated Profit and Loss account for that period. To designate a forward or options contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the consolidated Profit and Loss account. Currently, the hedges undertaken by the Group are all ineffective in nature and the resultant gain or loss consequent to fair valuation is recognized in the consolidated Profit and Loss account at each reporting date.

24.1.11. Income taxesIncome taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. MAT paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the consolidated Balance Sheet if there is convincing evidence that the Group will pay normal tax after the tax holiday period and the resultant asset can be measured reliably. The Group offsets, on a year-on-year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The differences that result between the profit offered for income taxes and the profit as per the financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets, in a situation where unabsorbed depreciation and carry forward business loss exists, are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than in situation of unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to the consolidated Profit and Loss account are credited to the share premium account.

24.1.12. Earnings per shareBasic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.



The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the consolidated financial statements by the Board of Directors.

24.1.13. InvestmentsTrade investments are the investments made to enhance the Group’s business interests. Investments are either classified as current or long-term based on the Management’s intention at the time of purchase. Current investments are carried at lower of cost and fair value of each investment individually. Cost for overseas investments comprises the Indian rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

24.1.14. Cash and cash equivalentsCash and cash equivalents comprises of cash and cash on deposit with banks and corporations. The Group considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

24.1.15. Cash flow statementCash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated.

24.1.16. LeasesLease under which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight line basis in the Profit and Loss account over the lease term.

24.1.17. Government grantsThe Group recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to depreciable fixed assets are treated as deferred income and are recognized in the Profit and Loss statement on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in the Profit and Loss statement over the periods necessary to match them with the related costs which they are intended to compensate.

24.2. Notes on AccountsAmounts in the financial statements are presented in Indian rupees crore, except for per share data and as otherwise stated. Certain amounts that are required to be disclosed and do not appear due to rounding off are detailed in note 24.3. All exact amounts are stated with the suffix ‘/-’. One crore equals 10 million.

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation.

24.2.1. Aggregate expensesThe aggregate amounts incurred on expenses are as follows :

in r crore

Particulars Year ended March 31,2011 2010

Salaries and bonus including overseas staff expenses 14,306 11,733 Contribution to provident and other funds 456 306 Staff welfare 94 46 Overseas travel expenses 839 610 Travel and conveyance 115 82 Technical sub-contractors 603 372 Software packages for own use 350 336 Third party items bought for service delivery to clients 139 17 Professional charges 344 278 Telephone charges 153 139 Communication expenses 84 86 Power and fuel 167 145 Office maintenance 222 165 Guesthouse maintenance 9 4 Rent 146 125 Brand building 74 57 Commission charges 15 16 Insurance charges 33 31 Printing and stationery 14 12 Computer maintenance 53 29 Consumables 27 25 Rates and taxes 54 31 Advertisements 7 3 Donations 1 44 Marketing expenses 22 15 Professional membership and seminar participation fees 12 9 Repairs to buildings 45 34 Repairs to plant and machinery 36 32 Postage and courier 13 12 Provision for post-sales client support and warranties 5 (2) Books and periodicals 4 4 Recruitment and training 2 2 Provision for bad and doubtful debts 2 – Provision for doubtful loans and advances 2 1 Commission to non-whole-time directors 6 6 Sales promotion expenses 1 1 Auditor’s remuneration

Statutory audit fees 2 2 Bank charges and commission 2 2 Freight charges 2 1 Research grants 18 23 Miscellaneous expenses 54 47

18,533 14,881



24.2.2. Capital commitments and contingent liabilitiesin r crore


Estimated amount of unexecuted capital contracts (net of advances and deposits) 814 301 Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favor of various government authorities and others 21 18 Claims against the Company, not acknowledged as debts

(1) [Net of amount paid to statutory authorities of R 469 crore (R 241 crore)] 271 28

in million

in R

crorein

millionin R

croreForward contracts outstanding

In USD 546 2,433 267 1,199In Euro 28 177 22 130In GBP 15 108 11 71In AUD 10 46 3 12

Options contracts outstanding

In USD – – 200 8982,764 2,310

(1) Claims against the Company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of r 671 crore (r 214 crore), including interest of r 177 crore (r 39 crore) upon completion of their tax review for fiscal 2005, fiscal 2006 and fiscal 2007. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2005, 2006 and 2007 is pending before the Commissioner of Income tax ( Appeals), Bangalore.

The Company is contesting the demands and the Management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

24.2.3. Obligations on long-term, non-cancelable operating leases

The lease rentals charged for the year ended March 31, 2011 and March 31, 2010 and maximum obligations on long-term non-cancelable operating leases payable as per the rentals are stated in the respective agreements :

in r crore


Lease rentals recognized during the year 146 125

in r crore

Lease obligations payable As at March 31,2011 2010

Within one year of the Balance Sheet date 109 84 Due in a period between one year and five years 251 249 Due after five years 71 62

The operating lease arrangements extend upto a maximum of ten years from their respective dates of inception and relates to rented overseas premises. Some of these lease agreements have a price escalation clause.

24.2.4. Related party transactionsDuring the year ended March 31, 2011, an amount of nil (R 35 crore for the year ended March 31, 2010) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors and officers of the Company are trustees. Related parties include Infosys Science Foundation and Infosys Technologies Limited Employees’ Welfare Trust which are controlled trusts.

24.2.5. Transactions with key management personnelParticulars of remuneration and other benefits paid to key management personnel during the year ended March 31, 2011 and March 31, 2010 have been detailed in Schedule 24.4.

24.2.6. Research and development expenditure in r crore


Capital 6 3 Revenue 527 435

24.2.7. Stock option plansThe Company has two Stock option plans that are currently operational.

1998 Stock Option Plan (‘the 1998 Plan’) The 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January 1998, and is for issue of 1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A Compensation Committee comprising independent members of the Board of Directors administers the 1998 Plan. All options have been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan.

1999 Stock Option Plan (‘the 1999 Plan’) In fiscal 2000, the Company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in September 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The Compensation Committee administers the 1999 Plan. Options were issued to employees at an exercise price that is not less than the fair market value. The 1999 Plan lapsed on June 11, 2009, and consequently no further shares will be issued to employees under this plan.



The activity in the 1998 Plan and 1999 Plan during the year ended March 31, 2011 and March 31, 2010 is as follows :


The 1998 Plan : Options outstanding, beginning of year 2,42,264 9,16,759Less : Exercised 1,88,675 6,14,071

Forfeited 3,519 60,424Options outstanding, end of year 50,070 2,42,264The 1999 Plan : Options outstanding, beginning of year 2,04,464 9,25,806Less : Exercised 1,37,692 3,81,078

Forfeited 18,052 3,40,264Options outstanding, end of year 48,720 2,04,464

The weighted average share price of options exercised under the 1998 Plan during the year ended March 31, 2011 and March 31, 2010 was R 2,950 and R 2,266 respectively. The weighted average share price of options exercised under the 1999 Plan during the year ended March 31, 2011 and March 31, 2010 was R 2,902 and R 2,221 respectively.

The following tables summarize information about the 1998 and 1999 share options outstanding as of March 31, 2011 and March 31, 2010 :

Range of exercise prices per share (R )

As at March 31, 2011Number of shares

arising out of options

Weighted average

remaining contractual

life

Weighted average exercise

price

The 1998 Plan : 300-700 24,680 0.73 587 701-1,400 25,390 0.56 777

50,070 0.65 683 The 1999 Plan : 300-700 33,759 0.65 448 701-2,500 14,961 1.71 2,121

48,720 0.97 962




Weighted average


life


price

The 1998 Plan : 300-700 1,74,404 0.94 551 701-1,400 67,860 1.27 773

2,42,264 1.03 613 The 1999 Plan : 300-700 1,52,171 0.91 439 701-2,500 52,293 1.44 2,121

2,04,464 1.05 869

The aggregate options considered for dilution are set out in note 24.2.16

Proforma Accounting for Stock Option Grants

Guidance note on ‘Accounting for employee share based payments’ issued by the Institute of Chartered Accountants of India establishes financial accounting and reporting principles for employee share based payment plans. The guidance note applies to employee share based payment plans, the grant date in respect of which falls on or after April 1, 2005.

As allowed by the guidance note, Infosys has elected to continue to apply the intrinsic value-based method of accounting described above, and has adopted the disclosure requirements of the guidance note ‘Accounting for employee share based payments’. Had the compensation cost for Infosys’ stock-based compensation plan been determined in a manner consistent with the fair value approach described in the guidance note, the Company’s net profit and basic and diluted earnings per share as reported would have reduced to the proforma amounts as indicated :

in r crore, except per share data


Net profit after tax, exceptional item and minority interestAs reported 6,835 6,266 Less : Stock-based employee

compensation expense – 1 Adjusted proforma 6,835 6,265 Basic earnings per share as reported 119.66 109.84 Proforma basic earnings per share 119.66 109.83 Diluted earnings per share as reported 119.63 109.72 Proforma diluted earnings per share 119.63 109.71

24.2.8. Income taxesThe provision for taxation includes tax liabilities in India on the Company’s global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries. Infosys’ operations are conducted through Software Technology Parks (‘STPs’) and Special Economic Zones (‘SEZs’). Income from STPs are tax exempt for the earlier of ten years commencing from the fiscal year in which the unit commences software development, or March 31, 2011. Income from SEZs is fully tax exempt for the first five years, 50% exempt for the next five years and 50% exempt for another 5 years subject to fulfilling certain conditions. For fiscal 2008 and 2009, the company had calculated its tax liability under Minimum Alternate Tax (MAT). The MAT credit can be carried forward and set off against the future tax payable. In the current year, the Company has calculated its tax liability under normal provisions of the Income Tax Act and utilized the brought forward MAT credit.

As at March 31, 2011, the Company has provided for branch profit tax of R 176 crore for its overseas branches, as the Company estimates that these branch profits would be distributed in the foreseeable future. Further, the tax provision for the year ended March 31, 2010, included a net tax reversal of R 316 crore relating to SEZ units, for provisions no longer required.

24.2.9. Loans and advancesin r crore


Deposits with financial institutions : HDFC Limited 1,571 1,551 Sundaram BNP Paribas Home Finance Limited – 4 Life Insurance Corporation of India 437 337

2,008 1,892

Deposit with Life Insurance Corporation of India represents amount deposited to settle employee-related obligations as and when they arise during the normal course of business (refer to note 24.2.21.b).



24.2.10. Fixed assetsFor the year ended March 31, 2011, the Profit / Loss on disposal of fixed assets is less than R 1 crore and accordingly disclosed in note 24.3. Profit / Loss on disposal of fixed assets during the year ended March 31, 2010 was R 2 crore.

The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of these agreements, the Company has the option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the value of the properties at the time of entering into the lease-cum-sale agreements. These amounts are disclosed as ‘Land – leasehold’ under ‘Fixed assets’ in the financial statements. Additionally, certain land has been purchased for which the Company has possession certificate but for which the sale deeds are yet to be executed as at March 31, 2011.

24.2.11. Details of investmentsThe details of investments in and disposal of securities for the year ended March 31, 2011 and March 31, 2010 are as follows :

in r crore


Investment in securitiesCertificates of deposit 840 1,180 Liquid mutual fund units 1,932 9,901

2,772 11,081 Redemption / Disposal of investment in securities

Long-term investments – 5 Liquid mutual fund units 4,429 7,383 Certificates of deposit 1,901 –

6,330 7,388 Net movement in investment (3,558) 3,693

24.2.12. Holding of Infosys in its subsidiaries

Name of the subsidiary

Country of incorporation

As at March 31,2011 2010

Infosys BPO India 99.98% 99.98%Infosys Australia Australia 100% 100%

Infosys China (1) China 100% 100%Infosys Consulting U.S. 100% 100%Infosys Mexico (2) Mexico 100% 100%Infosys Sweden Sweden 100% 100%Infosys Shanghai (3) China 100% –Infosys Brasil (4) Brazil 100% 100%Infosys Public Services U.S. 100% 100%Infosys BPO s.r.o (5) Czech Republic 99.98% 99.98%Infosys BPO (Poland) Sp.Z.o.o (5) Poland 99.98% 99.98%Infosys BPO (Thailand) Limited (5) Thailand – 99.98%Infosys Consulting India Limited (6) India 100% 100%McCamish Systems LLC (5)(7) U.S. 99.98% 99.98%

(1) During the year ended March 31, 2011, the Company made an additional investment of r 42 crore (US$ 9 million) in Infosys China, which is a wholly owned subsidiary. As of March 31, 2011 and March 31, 2010, the Company has invested an aggregate of r 107 crore (US$ 23 million) and r 65 crore (US$ 14 million) respectively, in the subsidiary.

(2) During the year ended March 31, 2011, the Company made an additional investment of r 14 crore (Mexican Peso 40 million) in Infosys Mexico, which is a wholly owned subsidiary. As of March 31, 2011 and March 31, 2010, the Company has invested an aggregate of r 54 crore (Mexican Peso 150 million) and r 40 crore (Mexican Peso 110 million) respectively, in the subsidiary.

(3) On February 21, 2011, the Company incorporated a wholly-owned subsidiary, Infosys Technologies (Shanghai) Company Limited and invested r 11 crore (US$ 3 million) in the subsidiary. As of March 31, 2011 the Company has invested an aggregate of r 11 crore (US$ 3 million) in the subsidiary.

(4) During the year ended March 31, 2011, the Company made an additional investment of r 10 crore (BRL 4 million) in the subsidiary. As of March 31, 2011 and March 31, 2010 the Company has invested an aggregate of r 38 crore (BRL 15 million) and r 28 crore (BRL 11 million), respectively, in the subsidiary.

(5) Infosys BPO s.r.o, Infosys BPO (Poland) Sp.Z.o.o, Infosys BPO (Thailand) Limited and McCamish Systems LLC are wholly owned subsidiaries of Infosys BPO. During the year ended March 31, 2011, Infosys BPO (Thailand) Limited was liquidated.

(6) During the year ended March 31, 2010, Infosys Consulting incorporated a wholly-owned subsidiary, Infosys Consulting India Limited. As of March 31, 2011 and March 31, 2010, Infosys Consulting has invested an aggregate of r 1 crore in the subsidiary.


24.2.13. Provision for doubtful debtsPeriodically, the Group evaluates all customer dues to the Group for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could effect the customer’s ability to settle. The Group normally provides for debtor dues outstanding for 180 days or longer as at the Balance Sheet date. As at March 31, 2011, the Group has provided for doubtful debts of R 19 crore (R 21 crore as at March 31, 2010) on dues from certain customers although the outstanding amounts were less than 180 days old, since the amounts were considered doubtful of recovery. The Group pursues the recovery of the dues, in part or full.

24.2.14. Segment reportingThe Group’s operations predominantly relate to providing end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers.

The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the note on significant accounting policies.

Industry segments at the Group are primarily f inancial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, transportation and logistics companies.

Income and direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably. The Group believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as ‘unallocated’ and directly charged against total income.

Fixed assets used in the business or liabilities contracted have not been identified for any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made.



Customer relationships are driven based on the location of the respective client. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the Rest of the World comprising all other places except, those mentioned above and India.

Geographical revenues are segregated based on the location of the customer who is invoiced or in relation to which the revenue is otherwise recognized.

Industry segmentsYear ended March 31, 2011 and March 31, 2010 :

in r crore

Particulars Financial Services

Manufac- turing

Telecom Retail Others Total

Revenues 9,862 5,393 3,549 3,898 4,799 27,501 7,731 4,506 3,661 3,035 3,809 22,742

Identifiable operating expenses 4,122 2,311 1,420

1,647 2,099

11,599

3,068 1,993 1,284

1,243 1,544 9,132 Allocated expenses 2,456 1,370 899 990 1,219 6,934

1,953 1,139 926 767 964 5,749 Segmental operating income 3,284 1,712 1,230 1,261 1,481 8,968

2,710 1,374 1,451 1,025 1,301 7,861 Unallocable expenses 854

905 Operating income 8,114

6,956 Other income, net 1,211

934 Provision for investments –

(9) Net profit before taxes and exceptional item 9,325

7,899 Income taxes 2,490

1,681 Net profit after taxes before exceptional item 6,835

6,218 Exceptional item – Income on sale of investments, net of taxes –

48 Net profit after taxes and exceptional item 6,835

6,266

Geographic segmentsYear ended March 31, 2011 and March 31, 2010 :

in r crore

Particulars North America


Total

Revenues 17,958 5,927 599 3,017 27,501 14,972 5,237 270 2,263 22,742

Identifiable operating expenses 7,658 2,467 281 1,193 11,599

6,067 2,093 80 892 9,132 Allocated expenses 4,555 1,488 144 747 6,934

3,784 1,325 68 572 5,749



Total

Segmental operating income 5,745 1,972 174 1,077 8,968

5,121 1,819 122 799 7,861 Unallocable expenses 854

905 Operating income 8,114

6,956 Other income, net 1,211

934 Provision on investments –

(9) Net profit before taxes and exceptional item 9,325

7,899 Income taxes 2,490

1,681 Net profit after taxes before exceptional item 6,835

6,218 Exceptional item – Income on sale of investments, net of taxes –


6,266

24.2.15. Dividends remitted in foreign currenciesThe Company remits the equivalent of the dividends payable to equity shareholders and holders of ADS. For ADS holders the dividend is remitted in Indian rupees to the depository bank, which is the registered shareholder on record for all owners of the Company’s ADSs. The depositary bank purchases the foreign currencies and remits dividends to the ADS holders.

The particulars of dividends remitted are as follows : in r crore

Particulars Number of shares to which the

dividends relate

Year ended March 31,

2011 2010Interim and 30th year special dividend for fiscal 2011 10,87,18,147 435 – Interim dividend for fiscal 2010 10,70,15,201 – 107 Final dividend for fiscal 2010 10,68,22,614 160 – Final dividend for fiscal 2009 10,73,97,313 – 145



24.2.16. Reconciliation of basic and diluted shares used in computing earnings per share

in Nos.


Number of shares considered as basic weighted average shares outstanding (1) 57,11,80,050 57,04,75,923Add : Effect of dilutive issues of

shares / stock options 1,88,308 6,40,108Number of shares considered as weighted average shares and potential shares outstanding 57,13,68,358 57,11,16,031

(1) Excludes shares held by controlled trusts

24.2.17. Provision for post-sales client support and warranties

The movement in the provision for post-sales client support and warranties is as follows :

in r crore


Balance at the Beginning 82 92 Provision recognized / (reversed) 5 (2) Provision utilized – (8) Translation difference 1 – Balance at the end 88 82

Provision for post-sales client support is expected to be utilized over a period of 6 months to 1 year.

24.2.18. Gratuity PlanThe following table sets out the status of the gratuity plan as required under AS 15.

Reconciliation of the opening and closing balances of the present value of the defined benefit obligation and plan assets :

in r crore

Particulars As at March 31,2011 2010 2009 2008 2007

Obligations at year beginning 325 267 224 225 183 Service cost 178 80 51 50 45 Interest cost 25 19 16 17 14 Actuarial loss / (gain) 17 (5) 1 (8) (1) Benefits paid (65) (36) (25) (23) (16) Amendment in benefit plan – – – (37) – Obligations at year end 480 325 267 224 225 Defined benefit obligation liability as at the Balance Sheet is fully funded by the Group.Change in plan assetsPlans assets at year beginning, at fair value 327 268 236 225 170 Expected return on plan assets 36 25 17 18 16 Actuarial gain – 1 5 2 3 Contributions 182 69 35 14 54 Benefits paid (65) (36) (25) (23) (18) Plan assets at year end, at fair value 480 327 268 236 225


Reconciliation of present value of the obligation and the fair value of the plan assets : Fair value of plan assets at the end of the period 480 327 268 236 225 Present value of the defined benefit obligations at the end of the year 480 325 267 224 225 Asset recognized in the Balance Sheet – 2 1 12 – AssumptionsInterest rate 7.98% 7.82% 7.01% 7.92% 7.99%Estimated rate of return on plan assets 9.36% 9.00% 7.01% 7.92% 7.99%Weighted expected rate of salary increase 7.27% 7.27% 5.10% 5.10% 5.10%

Net gratuity cost for the year ended March 31, 2011 and March 31, 2010 comprises of the following components :

in r crore


Gratuity cost for the yearService cost 178 80 Interest cost 25 19 Expected return on plan assets (36) (25) Actuarial gain 17 (6) Plan amendment amortization (4) (3) Net gratuity cost 180 65 Actual return on plan assets 37 26

Gratuity cost, as disclosed above, is included under salaries and bonus and is segregated between software development expenses, selling and marketing expenses and general and administration expenses on the basis of the number of employees.

As of March 31, 2011 and March 31, 2010, the plan assets have been primarily invested in government securities. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by R 37 crore, which is being amortized on a straight line basis to the Profit and Loss account over ten years representing the average future service period of the employees. The unamortized liability as at March 31, 2011 and March 31, 2010 amounted to R 22 crore and R 26 crore, respectively and is disclosed under ‘Current Liabilities’.

The group expects to contribute approximately R 106 crore to the gratuity trusts during fiscal 2012.

24.2.19.a. Provident FundThe Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by the Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the Company’s actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.



The Company contributed R 198 crore and R 171 crore to the Provident Fund during the year ended March 31, 2011 and March 31, 2010 respectively.

24.2.19.b. SuperannuationThe Company contributed R 109 crore and R 91 crore to the Superannuation Trust during the year ended March 31, 2011 and March 31, 2010 respectively.

24.2.20. Cash and bank balances The details of balances as on Balance Sheet dates with scheduled banks are as follows :

in r crore

Balances with scheduled banks in India As at March 31,2011 2010

In current accountsCitibank – Unclaimed dividend account 1 – Citibank N.A., India 2 2 Deustche Bank 12 13 Deustche Bank – EEFC (Euro account) 8 3 Deustche Bank – EEFC (Swiss Franc account) 2 – Deutsche Bank – EEFC (United Kingdom Pound Sterling account) – 1 Deustche Bank – EEFC (U.S. Dollar account) 143 8 HDFC Bank – Unclaimed dividend account 1 1 ICICI Bank 32 133 ICICI Bank – EEFC (Euro account) – 1 ICICI Bank – EEFC (United Kingdom Pound Sterling account) 1 2 ICICI Bank – EEFC (U.S. Dollar account) 22 10 ICICI Bank – Unclaimed dividend account 1 1

225 175In deposit accounts

Andhra Bank 399 99 Allahabad Bank 561 150 Axis Bank 536 – Bank of India 1,197 881 Bank of Baroda 1,100 299 Bank of Maharashtra 506 500 Barclays Bank – 100 Canara Bank 1,329 963 Central Bank of India 354 100 Corporation Bank 295 276 DBS Bank – 49 HDFC Bank 646 – HSBC Bank – 483 ICICI Bank 788 1,435 IDBI Bank 770 909 ING Vysya Bank – 25 Indian Overseas Bank 518 140 Jammu and Kashmir Bank 12 10 Kotak Mahindra Bank 25 61 Oriental Bank of Commerce 653 100 Punjab National Bank 1,493 994 Standard Chartered Bank – – State Bank of Hyderabad 255 233 State Bank of India 457 126 State Bank of Mysore 354 496 South Indian Bank 50 – Syndicate Bank 504 475 The Bank of Nova Scotia – – Union Bank of India 631 93 Vijaya Bank 144 95 Yes Bank 33 –

13,610 9,092

The details of balances as on Balance Sheet dates with non-scheduled banks are as follows :

in r crore

Balances with non-scheduled banks As at March 31,2011 2010

In current accountsABN AMRO Bank, China 17 33 ABN AMRO Bank, China (U.S. Dollar account) 24 14 ABN AMRO Bank, Taiwan 3 2 Bank of America, Mexico 4 18 Bank of America, U.S. 296 686 Banamex, Mexico 2 2 China Merchants Bank, China – 1 Citibank NA, Australia 61 25 Citibank NA, Brazil 5 9 Citibank NA, China (U.S. Dollar account) 11 – Citibank NA, Czech Republic 1 – Citibank NA, Czech Republic (U.S. Dollar account) – 2 Citibank NA, New Zealand 2 1 Citibank NA, Japan 17 2 Citibank NA, Thailand 1 1 Deutsche Bank, Belgium 5 18 Deutsche Bank, Czech Republic 1 – Deutsche Bank, France 3 1 Deutsche Bank, Germany 5 12 Deutsche Bank, Moscow (U.S. Dollar account) – 1 Deutsche Bank, Netherlands 2 7 Deustche Bank, Philippines 1 – Deustche Bank, Philippines (U.S. Dollar account) 1 3 Deutsche Bank, Poland 1 2 Deustche Bank, Poland (Euro account) 2 1 Deutsche Bank, Spain 1 1 Deustche Bank, Thailand – 3 Deustche Bank, Thailand (U.S. Dollar account) – 1 Deutsche Bank, U.K. 40 29 Deutsche Bank, Singapore 3 1 Deutsche Bank, Switzerland 1 10 Deutsche Bank, Switzerland (U.S. Dollar account) – 1 HSBC Bank, U.K. 10 2 ICICI Bank, U.K. 1 1 National Australia Bank Limited, Australia 1 21 National Australia Bank Limited, Australia (U.S. Dollar account) – 14 Nordbanken, Sweden 5 1 Royal Bank of Canada, Canada 23 20 Shanghai Pudong Development Bank, China 2 – Wachovia Bank, U.S. – 7

552 953 In deposit accounts

ABN AMRO bank, China 14 – Bank of America, Mexico 17 – Bank of America, U.S. 82 – Citibank N.A., Czech Republic 5 9 Citibank N.A, (Euro account) – 3 Citibank N.A, (U.S. Dollar account) 1 4 Citibank N.A, Brazil 3 – Deutsche Bank, Poland 21 8 HSBC Bank, London 18 – National Australia Bank Limited, Australia 546 312 Nordbanken, Sweden 1 –

708 336 Total cash and bank balances as per Balance Sheet 15,095 10,556



24.2.21. Cash Flow statement

24.2.21.a. Unclaimed dividendThe balance of cash and cash equivalents includes R 3 crore as at March 31, 2011 (R 2 crore as at March 31, 2010) set aside for payment of dividends.

24.2.21.b. Balances held by controlled trusts The balance of cash and cash equivalents includes R 106 crore and R 69 crore as at March 31, 2011 and March 31, 2010 held by controlled trusts.

24.2.21.c. Restricted cashDeposits with financial institutions as at March 31, 2011 include R 437 crore (R 337 crore as at March 31, 2010) deposited with Life Insurance Corporation of India to settle employee related obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and is hence not considered ‘cash and cash equivalents’.

24.2.22 Exceptional itemDuring the year ended March 31, 2010 the Company sold 32,31,151 shares of OnMobile Systems Inc., U.S. (OMSI) at a price of R 166.58 per share amounting to a total consideration of R 53 crore, net of taxes and transaction costs. The resultant income of R 48 crore has been appropriated to capital reserve.

24.3. Details of rounded off amountsThe financial statements are represented in R crore as per the approval received from the Department of Company Affairs (DCA) earlier. Those items which were not represented in the financial statement due to rounding off to the nearest R crore are given as follows :

Balance Sheet items in r crore

Schedule Description As at March 31,2011 2010

Balance Sheet24.2.20 Non-scheduled banks – Current

AccountABN AMRO Bank, Denmark 0.27 0.21 Banamex, Mexico – 2.00 Bank of Baroda, Mauritius 0.02 0.02 China Merchants Bank, China 0.16 0.62 Citibank N.A., Czech Republic 0.18 0.35 Citibank N.A., Czech Republic Euro account 0.31 0.13 Citibank N.A., China 0.13 – Deustche Bank, Moscow 0.10 0.34 Deutsche Bank, Philippines 0.90 0.39 Deustche Bank, Poland 0.04 2.37 Deustche Bank, Poland Euro account 0.02 0.74 Deutsche Bank, Zurich, Switzerland 0.01 9.72 ICICI Bank, U.K. – 1.07 Nordbanken, Sweden – 0.73 PNC Bank, U.S. – 0.02 Standard Chartered Bank, UAE 0.17 0.09 Svenska Handelsbanken, Sweden 0.03 0.01 The Bank of Tokyo – Mitsubishi UFJ, Limited, Japan 0.41 0.16

Profit & Loss items in r crore

Schedule Description Year ended March 31,

2011 2010Profit and Loss

Minority interest 0.04 0.06 Residual dividend paid – 0.25 Additional dividend tax 0.01 0.04

24.2.1 Aggregate expensesProvision for doubtful loans and advances – 0.01 Auditor’s remuneration

Certification charges 0.06 0.05 Out-of-pocket expenses 0.02 0.04 Others 0.05 0.01

Cash flow statement itemsin r crore

Schedule Description Year ended March 31,

2011 2010Profit / Loss on sale of fixed assets 0.84 2.00

24.4 Transactions with key management personnel

Key management personnel comprise directors and members of the Executive Council.

Particulars of remuneration and other benefits paid to whole-time directors and members of Executive Council during the year ended March 31, 2011 and March 31, 2010 are as follows :

in r crore

Name Salary Contribu-tions to

provident and other

funds

Perqui- sites and

incentives

Total Remun- eration

Co-Chairman (1)

Nandan M. Nilekani – – – – 0.09 0.02 0.23 0.34




S. D. Shibulal 0.34 0.08 0.66 1.08 0.31 0.08 0.56 0.95

Whole-time directorsK. Dinesh 0.34 0.08 0.68 1.10

0.32 0.08 0.61 1.01 T. V. Mohandas Pai 0.43 0.10 2.56 3.09

0.36 0.08 2.69 3.13 Srinath Batni 0.43 0.10 1.76 2.29

0.36 0.07 1.98 2.41 (1) Effective July 9, 2009, Nandan M. Nilekani relinquished the positions of

Co-Chairman and Member of the Board.



in r crore

Name Salary Contribu-tions to

provident and other

funds

Perqui- sites and

incentives

Total Remun- eration

Executive Council membersChief Financial Officer

V. Balakrishnan 0.38 0.08 2.15 2.61 0.30 0.08 2.06 2.44

Ashok Vemuri 2.22 – 3.10 5.32 2.09 – 2.79 4.88


B. G. Srinivas 1.94 – 2.99 4.93 1.81 – 2.75 4.56

Subhash B. Dhar 0.30 0.08 1.69 2.07 0.24 0.07 1.42 1.73

Particulars of remuneration and other benefits of non-executive / independent directors for the year ended March 31, 2011 and March 31, 2010 :

Name Commi- ssion

Sitting fees

Reimbu- rsement of

expenses

Total Remune-

rationIndependent directorsDeepak M. Satwalekar 0.59 – 0.01 0.60

0.60 – – 0.60 Prof. Marti G. Subrahmanyam 0.79 – 0.23 1.02

0.65 – 0.20 0.85 Dr. Omkar Goswami 0.51 – 0.03 0.54

0.52 – 0.03 0.55 Claude Smadja (1) 0.23 – 0.09 0.32

0.59 – 0.25 0.84 Rama Bijapurkar (2) 0.04 – 0.04 0.08

0.49 – 0.02 0.51 Sridar A. Iyengar 0.81 – 0.24 1.05

0.74 – 0.21 0.95 David L. Boyles 0.65 – 0.34 0.99


0.61 – 0.24 0.85 K. V. Kamath 0.56 – 0.01 0.57

0.39 – 0.02 0.41 R. Seshasayee (3) 0.10 – 0.10 0.20

– – – – Non-executive Chairman and Chief mentorN. R. Narayana Murthy 0.61 – – 0.61

0.57 – – 0.57 (1) Retired from the Board effective August 30, 2010(2) Resigned from the Board effective April 13, 2010(3) Joined the Board effective January 13, 2011

Corporate governance report | 63


Corporate governance report

Corporate governance ratings

CRISILCRISIL has been consistently assigning us the ‘CRISIL GVC Level 1’ rating for several years now. This Governance and Value Creation (GVC) rating indicates our capability to create wealth for all our stakeholders while adopting sound corporate governance practices.

ICRAICRA assigned ‘CGR 1’ rating to our corporate governance practices. The rating is the highest on ICRA’s Corporate Governance Rating (CGR) scale of CGR 1 to CGR 6. We are the first Company in India to be assigned the highest CGR by ICRA. The rating reflects our transparent shareholding pattern, sound Board practices, interactive decision-making process, high level of transparency, disclosures encompassing all important aspects of our operations and our excellent track record in investor servicing. A notable feature of our corporate governance practices is the emphasis on transparency and substance over form.

Corporate governance guidelinesOver the years, the Board has developed corporate governance guidelines to help fulfill, our corporate responsibility towards our stakeholders. These guidelines ensure that the Board will have the necessary authority and processes in place to review and evaluate our operations when required. Further, these guidelines allow the Board to make decisions that are independent of the Management. The Board may change these guidelines from time to time to effectively achieve our stated objectives.

A. Board compositionSize and composition of the BoardThe current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and to separate its functions of governance and management. Currently, the Board consists of 14 members, five of whom are executive or whole-time directors, one is non-executive and eight are independent directors.

Three of the executive directors are our founders. The Board believes that the current size is appropriate, based on our present circumstances. The Board periodically evaluates the need for change in its composition and size.

“Board of Directors is central to good corporate governance. Not only do directors help ensure regulatory compliance, but they shape corporate strategy and help chart its execution”.

– Troy A. Paredes,Commissioner, U.S. Securities and Exchange Commission

At the Transatlantic Corporate Governance Dialogue, Brussels, Belgium, October 25, 2010

Company’s philosophyCorporate governance at Infosys is a value-based framework to manage our Company affairs in a fair and transparent manner. As a responsible corporation, we use this framework to maintain accountability in all our affairs, and employ democratic and open processes. We have evolved guidelines and best practices over the years to ensure timely and accurate disclosure of information regarding our financials, performance, leadership and governance of the Company.

Our corporate governance philosophy is based on the following principles :

• Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law.

• Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose.

• Make a clear distinction between personal conveniences and corporate resources

• Communicate externally, in a truthful manner, about how the Company is run internally

• Comply with the laws in all the countries in which we operate

• Have a simple and transparent corporate structure driven solely by business needs

• The Management is the trustee of the shareholders’ capital and not the owner

The Board of Directors (‘the Board’) is at the core of our corporate governance practice and oversees how the Management serves and protects the long-term interests of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance.

The majority of our Board, eight out of 14, are independent members. Further, we have audit, compensation, investor grievance, nominations and risk management committees, which comprise independent directors.

As part of our commitment to follow global best practices, we comply with the Euroshareholders Corporate Governance Guidelines, 2000, and the recommendations of the Conference Board Commission on Public Trusts and Private Enterprises in the U.S. We also adhere to the United Nations Global Compact policy. Further, a note on our compliance with the corporate governance guidelines of six countries (Australia, Canada, France, Germany, Japan and the United Kingdom) in their national languages is available on our website, www.infosys.com

64 | Corporate governance report


Composition of the Board, and directorships held as at March 31, 2011

Name of the director Age India listed companies (1)

All companies around the world (2)

Committee membership (3)

Chairperson of committees (3)

Founder and non-executive director N. R. Narayana Murthy 64 – 6 – –

Founders and whole-time directors S. Gopalakrishnan 56 – 1 – –S. D. Shibulal 56 – 8 1 –K. Dinesh 57 – 3 – –

Whole-time directors T. V. Mohandas Pai 52 – 5 – –Srinath Batni 56 – 4 – –

Independent directors Deepak M. Satwalekar 62 4 8 4 2Prof. Marti G. Subrahmanyam 64 0 8 2 –Dr. Omkar Goswami 54 6 12 8 4Sridar A. Iyengar 63 3 13 6 3David L. Boyles 62 – 2 – –Prof. Jeffrey S. Lehman 54 – 2 – –K. V. Kamath 63 3 5 1 –R. Seshasayee 62 3 16 4 –

Notes : There are no inter-se relationships between our Board members. (1) Excluding directorship in Infosys Technologies Limited and its subsidiaries. (2) Directorships in companies around the world (listed, unlisted and private limited companies) including Infosys Technologies Limited and its subsidiaries. (3) As required by Clause 49 of the Listing Agreement, the disclosure includes memberships / chairpersonship of audit committee and investor grievance committee in Indian public

companies (listed and unlisted).

Responsibilities of the Chairman, CEO and the COOOur current policy is to have a non-executive Chairman and Chief Mentor – N. R. Narayana Murthy; a Chief Executive Officer (CEO) and Managing Director – S. Gopalakrishnan; and a Chief Operating Officer (COO) and Director – S. D. Shibulal. The responsibility and authority of these officials are as follows :

• The Chairman and Chief Mentor is responsible for mentoring our core management team in transforming us into a world-class, next-generation organization that provides state-of-the-art, technology-leveraged business solutions to corporations across the world. He also interacts with global thought leaders to enhance our leadership position. In addition, he continues to interact with various institutions to highlight the benefits of IT and help these benefits percolate to all sections of the society. As Chairman of the Board, he is also responsible for all Board and corporate governance matters.

• The CEO and Managing Director is responsible for corporate strategy, brand equity, planning, external contacts and other management matters. He is also responsible for achieving the annual business targets and acquisitions.

• The COO is responsible for all customer service operations. He is also responsible for innovation and research in technology advancements, new initiatives and investments.

• The CEO, COO, the other executive directors and senior management personnel are responsible for achieving targets. They make periodic presentations to the Board on their responsibilities and performance.

Board definition of independent directorsAccording to Clause 49 of the Listing Agreement with Indian stock exchanges, an independent director means a person who is not an officer or employee of the Company or its subsidiaries or any other individual having a material pecuniary relationship or transactions with the Company which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. We adopted a much stricter definition of independence as required by the NASDAQ listing rules and the Sarbanes-Oxley Act, U.S.

Lead Independent Director Prof. Marti G. Subrahmanyam is the Lead Independent Director.

He represents and acts as spokesperson for the independent directors as a group, and is responsible for the following :

• Presiding over all executive sessions of the Board’s independent directors

• Working closely with the Chairman and the CEO to finalize the information flow, meeting agendas and schedules

• Liaising with the Chairman, CEO and the independent directors on the Board

• Taking the lead role, along with the Chairman, in the Board evaluation process

Board membership criteriaThe nominations committee works with the entire Board to determine the appropriate characteristics, skills and experience required for the Board as a whole as well as its individual members. Board members are expected to possess the expertise, skills and experience required to manage and guide a high-growth, high-tech IT services company, deriving revenue primarily from G-7 countries. Expertise in strategy, technology, finance, quality and human resources is essential. Generally, the members are between 40 and 60 years of age, and are not related to any executive directors or independent directors. They are not expected to serve in any executive or independent position in any company that is in direct competition with us. Board members are expected to rigorously prepare for, attend and participate in all Board and applicable committee meetings. Each member is expected to ensure that their other current and planned future commitments do not materially interfere with their responsibilities with us.

Selection of new directorsThe Board is responsible for the selection of new directors. The Board delegates the screening and selection process involved in selecting new directors to the nominations committee, which consists exclusively of independent directors. The nominations committee in turn makes recommendations to the Board on the induction of any new directors.



Membership termThe Board constantly evaluates the contribution of the members and periodically shares updates with the shareholders about re-appointments as per statute. The current law in India mandates the retirement of one third of the Board members (who are liable to retire by rotation) every year, and qualifies the retiring members for re-appointment. Executive directors are appointed by the shareholders for the tenure of a maximum period of five years, but are eligible for re-appointment upon completion of their term. Subject to the applicable provisions of law, non-executive directors generally serve for a period of nine years (three terms of three years each) or up to the age of retirement, whichever is earlier.

Retirement policyThe age of retirement for all executive directors is 60 years. The nominations committee may, at its discretion, determine their continuation as members of the Board upon superannuation / retirement.

The age of retirement for non-executive directors and independent directors is 65 years.

The age of retirement for independent directors joining the Board on or after October 15, 2010, shall be 70 years.

An independent Board chair is generally permitted to serve in the capacity until the age of 70 years.

Succession planningThe nominations committee works with the Board to plan for orderly succession of leadership within the Board and the company, and to maintain contingency plans for succession in case of any exigencies.

Board compensation policyThe compensation committee determines and recommends to the Board the compensation payable to the directors. All Board-level compensation is approved by the shareholders and separately disclosed in the financial statements. Remuneration of the executive directors consists of a fixed component and a performance incentive. The compensation committee makes a quarterly appraisal of the performance of the executive directors based on a detailed performance-related matrix. The annual compensation of the executive directors is approved by the compensation committee, within the parameters set by the shareholders at the shareholders’ meetings.

The compensation payable to the independent directors is limited to a fixed amount per year as determined and approved by the Board, the sum of which is within the limit of 1% of our net profits for the year, calculated as per the provisions of the Companies Act, 1956. The performance of independent directors is reviewed by the Board on an annual basis.

Cash compensation paid to directors in fiscal 2011 in r crore

Name of the director Fixed salary Bonus / Incentives

Commission Total Notice period (in

months) Basic salary Perquisites /

AllowancesRetiral

benefitsTotal fixed

salaryFounder and non-executive director

N. R. Narayana Murthy – – – – – 0.61 0.61 NA Founders and whole-time directors

S. Gopalakrishnan 0.34 0.12 0.08 0.54 0.57 – 1.11 6 S. D. Shibulal 0.34 0.11 0.08 0.53 0.55 – 1.08 6 K. Dinesh 0.34 0.11 0.08 0.53 0.57 – 1.10 6

Whole-time directorsT. V. Mohandas Pai 0.43 0.14 0.10 0.67 2.42 – 3.09 6 Srinath Batni 0.43 0.14 0.10 0.67 1.62 – 2.29 6

Independent directorsDeepak M. Satwalekar – – – – – 0.59 0.59 NA Prof. Marti G. Subrahmanyam – – – – – 0.79 0.79 NA Dr. Omkar Goswami – – – – – 0.51 0.51 NA Rama Bijapurkar (1) – – – – – 0.04 0.04 NA Claude Smadja (2) – – – – – 0.23 0.23 NA Sridar A. Iyengar – – – – – 0.69 0.69 NA David L. Boyles – – – – – 0.65 0.65 NA Prof. Jeffrey S. Lehman – – – – – 0.67 0.67 NA K. V. Kamath – – – – – 0.56 0.56 NAR. Seshasayee (3) – – – – – 0.10 0.10 NA

Notes : None of the above directors are eligible for any severance pay and none of them hold any stock options as at March 31, 2011. (1) For the period April 1, 2010 to April 13, 2010 (2) For the period April 1, 2010 to August 30, 2010 (3) For the period January 13, 2011 to March 31, 2011



Shares and options held by non-executive / independent directors as at March 31, 2011

Equity shares (no.)

ADS (no.)

N. R. Narayana Murthy 23,79,672 – Deepak M. Satwalekar 56,000 – Prof. Marti G. Subrahmanyam – 17,500Dr. Omkar Goswami 12,300 – Sridar A. Iyengar – – David L. Boyles – 2,000 Prof. Jeffrey S. Lehman – – K. V. Kamath – – R. Seshasayee – –

Non-executive / independent directors’ remunerationSection 309 of the Companies Act, 1956, states that a director, who is neither in the whole-time employment of the Company nor a managing director, may be paid remuneration by way of commission, if the Company, by special resolution, authorizes such payment. Members of the Company at the Annual General Meeting held on June 22, 2007, approved payment of remuneration by way of commission to non-executive directors, at a sum not exceeding 1% per annum of our net profits. We have paid R 5.44 crore (US$ 1,218,250) as commission to our non-executive directors. The aggregate amount was arrived at as per the following criteria :

in R crore US$Fixed Board fee 0.33 75,000 Variable fee (1) 0.11 25,000Chairperson of the Board 0.22 50,000Lead Independent Director 0.13 30,000Chairperson – audit committee 0.13 30,000Members – audit committee 0.09 20,000Chairperson – other committees 0.04 10,000Members – other committees 0.02 5,000

Notes : 1 US$ = r 44.60 (1) Variable fee is based on the attendance at the Board meeting(s).

Independent directors based overseas and traveling to India to attend Board meetings will be eligible to receive an additional US$ 10,000 per meeting. This is based on the fact that these independent directors have to spend at least two additional days in travel while attending Board meetings in India.

The Board believes that the above commission structure is commensurate with global best practices in terms of remunerating non-executive / independent directors of a Company of similar size and adequately compensates for the time and contribution made by our non-executive / independent directors.

Memberships in other boardsExecutive directors may, with the prior consent of the Chairperson of the Board of Directors, serve on the boards of two other business entities, provided that such business entities are not in direct competition with our business operations. Executive directors are also allowed to serve on the boards of corporate or government bodies whose interests are germane to the future of the IT and software business, or the key economic institutions of the nation, or whose prime objective is benefiting society. Independent directors are not expected to serve on the boards of competing companies. Other than this, there are no limitations except those imposed by law and good corporate governance practices. The outside directorships held by each of our directors are listed in the Composition of the Board and Directorships table in this section.

B. Board meetings

Scheduling and selection of agenda items for Board meetingsDates for Board meetings in the ensuing year are decided in advance and published as part of the Annual Report. Most Board meetings are held at our registered office at Electronics City, Bangalore, India. The Chairperson of the Board and the Company Secretary draft the agenda for each meeting, along with explanatory notes, in consultation with the CEO and the Lead Independent Director, and distribute these in advance to the directors. Every Board member can suggest additional items for inclusion in the agenda. The Board meets at least once a quarter to review the quarterly results and other items on the agenda, and also on the occasion of the Annual General Meeting of the shareholders. Additional meetings are held, when necessary. Independent directors are expected to attend at least four Board meetings in a year. However, the Board being represented by independent directors from various parts of the world, it may not be possible for each one of them to be physically present at all the meetings. We use video / teleconferencing facilities to enable their participation. Committees of the Board usually meet the day before the formal Board meeting, or whenever the need arises for transacting business. Five Board meetings were held during the year ended March 31, 2011. These were held on April 13, 2010; June 12, 2010 (coinciding with last year’s Annual General Meeting of the shareholders) ; July 13, 2010; October 15, 2010 and January 13, 2011.

Attendance of directors during fiscal 2011

Name of the director No. of meetingsHeld Attended

N. R. Narayana Murthy 5 5S. Gopalakrishnan 5 5Prof. Marti G. Subrahmanyam 5 5Deepak M. Satwalekar 5 5Dr. Omkar Goswami 5 5Sridar A. Iyengar 5 5David L. Boyles 5 5Prof. Jeffrey S. Lehman 5 5K. V. Kamath 5 5R. Seshasayee 1 1K. Dinesh 5 5S. D. Shibulal 5 5T. V. Mohandas Pai 5 5Srinath Batni 5 5

Note : All the above directors attended the Annual General Meeting held on June 12, 2010, with the exception of R. Seshasayee, who was appointed as director with effect from January 13, 2011.

Availability of information to Board membersThe Board has unfettered and complete access to any information within the Company, and to any of our employees. At Board meetings, managers who can provide additional insights into the items being discussed are invited.

Regular updates provided to the Board include :

• Annual operating plans and budgets, capital budgets and updates

• Quarterly results of our operating divisions or business segments

• Minutes of meetings of audit, compensation, nominations, risk management and investor grievance committees as well as abstracts of circular resolutions passed

• The Board minutes of the subsidiary companies

• General notices of interest received from directors

• Dividend data

• Information on recruitment and remuneration of senior officers just below the Board level, including appointment or removal of the CFO and Company Secretary, if any.



• Materially important litigations, show cause, demand, prosecution and penalty notices

• Fatal or serious accidents, dangerous occurrences, and issues related to material effluent or pollution

• Any materially relevant defaults in financial obligations to and by us

• Any issue that involves possible public or product liability claims of a substantial nature

• Details of joint ventures, acquisitions of companies or collaboration agreements

• Transactions that involve substantial payments toward goodwill, brand equity or intellectual property

• Any significant development involving human resources management

• Sale of material nature, of investments, subsidiaries and assets, which are not in the normal course of business

• Details of foreign exchange exposure and the steps taken by the Management to limit risks of adverse exchange rate movement

• Non-compliance of any regulatory, statutory or listing requirements, as well as shareholder services such as non-payment of dividend and delays in share transfer

Discussion with independent directorsThe Board’s policy is to regularly have separate meetings with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management make presentations on relevant issues.

In addition, our independent directors meet periodically in an executive session that is without the Chairperson, or any of the executive directors, or the Management.

Materially significant related party transactionsThere have been no materially significant related party transactions, monetary transactions or relationships between the Company and directors, the Management, subsidiary or relatives, except for those disclosed in the financial statements for the year ended March 31, 2011.

C. Board committeesCurrently, the Board has five committees : audit committee, compensation committee, nominations committee, investor grievance committee and risk management committee. All committees consist entirely of independent directors.

The Board, in consultation with the nominations committee, is responsible for constituting, assigning, co-opting and fixing terms of service for committee members. It delegates these powers to the nominations committee.

The Chairperson of the Board, in consultation with the Company Secretary and the committee chairperson, determines the frequency and duration of the committee meetings. Normally, all the committees meet four times a year. Recommendations of the committees are submitted to the entire Board for approval.

The quorum for meetings is either two members or one-third of the members of the committee, whichever is higher.

1. Audit committeeOur audit committee (‘the committee’) comprises five independent directors :

• Deepak M. Satwalekar, Chairperson• Prof. Marti G. Subrahmanyam• Sridar A. Iyengar• K. V. Kamath• R. Seshasayee

In India, we are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). In the U.S., we are listed on the NASDAQ Global Select. In India, Clause 49 of the Listing Agreement makes it mandatory for listed companies to adopt an appropriate audit committee charter. The Blue Ribbon Committee set up by the U.S. Securities and Exchange Commission (SEC) recommends that every listed Company adopt an audit committee charter. This recommendation has also been adopted by NASDAQ.

In our meeting on May 27, 2000, our committee adopted a charter which meets the requirements of Clause 49 of the Listing Agreement with Indian stock exchanges and the SEC.

The primary objective of the committee is to monitor and provide effective supervision of the Management’s financial reporting process to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. The committee oversees the work carried out in the financial reporting process by the Management, the internal auditors and the independent auditor, and notes the processes and the safeguards employed by each. The committee has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent auditor in accordance with the law. All possible measures must be taken by the committee to ensure the objectivity and independence of the independent auditor.

Audit committee attendance during fiscal 2011Four audit committee meetings were held during the year – on April 12, 2010; July 12, 2010; October 14, 2010 and January 12, 2011.

No. of meetingsHeld Attended

Deepak M. Satwalekar 4 4 Prof. Marti G. Subrahmanyam 4 4 Sridar A. Iyengar 4 4K. V. Kamath (1) 3 3R. Seshasayee (2) – –

(1) Appointed with effect from April 13, 2010(2) Appointed with effect from January 13, 2011

During the year, the audit committee held two conference calls on April 7, 2010 and October 8, 2010.

Audit committee report for the year ended March 31, 2011Each member of the committee is an independent director, according to the definition laid down in the audit committee charter, and Clause 49 of the Listing Agreement with the relevant Indian stock exchanges.

The Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with the generally accepted auditing standards, and for issuing a report thereon. The committee’s responsibility is to monitor these processes. The committee is also responsible for overseeing the processes related to the financial reporting and information dissemination. This is to ensure that the financial statements are true, fair, sufficient and credible. In addition, the committee recommends to the Board the appointment of the Company’s internal and independent auditors.

In this context, the committee discussed with the Company’s auditors, the overall scope and plans for the independent audit. The Management represented to the committee that the Company’s financial statements were prepared in accordance with the Generally Accepted Accounting Principles. The committee discussed with the auditors, in the absence of the Management (whenever necessary), the Company’s audited financial statements including the auditors’ judgments about the quality, not just the applicability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.



The committee also discussed with the auditors other matters required by the Statement on Auditing Standards No. 114 (SAS 114) – The Auditor’s Communication With Those Charged With Governance – and the Sarbanes-Oxley Act of 2002.

Relying on the review and discussions conducted with the Management and the independent auditors, the audit committee believes that the Company’s financial statements are fairly presented in conformity with the Generally Accepted Accounting Principles in all material aspects.

The committee has also reviewed the internal controls put in place to ensure that the accounts of the Company are properly maintained and that the accounting transactions are in accordance with prevailing laws and regulations. In conducting such reviews, the committee found no material discrepancy or weakness in the internal control systems of the Company.

The committee also reviewed the financial policies of the Company and expressed its satisfaction with the same.

The Company’s auditors provided to the committee the written disclosures required by Independence Standards Board Standard No. 1 – ‘Independence Discussions with Audit Committees’ – based on which the committee discussed the auditors’ independence with both the Management and the auditors. After review, the committee expressed its satisfaction on the independence of both the internal and the statutory auditors.

Moreover, the committee considered whether any non-audit services provided by the auditors’ firm could impair the auditors’ independence, and concluded that there were no such services provided.

The committee secured compliance on the affirmation of the Board of Directors to the NASDAQ stock exchange, under the relevant rules of the exchange on composition of the committee and independence of the committee members, disclosures relating to non-independent members, financial literacy and financial expertise of members, and a review of the audit charter.

Based on the committee’s discussion with the Management and the auditors and the committee’s review of the representations of the Management and the report of the auditors to the committee, the committee has recommended the following to the Board of Directors :

1. The audited financial statements prepared as per Indian GAAP of Infosys Technologies Limited for the year ended March 31, 2011, be accepted by the Board as a true and fair statement of the financial status of the Company;

2. The audited abridged financial statements prepared as per Indian GAAP of Infosys Technologies Limited for the year ended March 31, 2011, be accepted by the Board as a true and fair statement of the financial status of the Company;

3. The audited, consolidated financial statements prepared as per Indian GAAP of Infosys Technologies Limited and its subsidiaries for the year ended March 31, 2011 be accepted by the Board as a true and fair statement of the financial status of the group; and

4. The audited financial statements prepared as per International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) for the year ended March 31, 2011, be accepted and included in the Company’s Annual Report on Form 20-F, to be filed with the U.S. Securities and Exchange Commission.

The committee has recommended to the Board the re-appointment of B S R & Co., Chartered Accountants, as the statutory auditors of the Company for the fiscal year ending March 31, 2012, and that the necessary resolutions for appointing them as auditors be placed before the shareholders. The committee has also recommended to the Board the appointment of KPMG, India, as independent auditors of the Company for the IFRS financial statements, for the financial year ending March 31, 2012.

The committee recommended the appointment of Singhvi Dev and Unni as the internal auditors of the Company for the fiscal ending March 31, 2012, to review various operations of the Company, and determined and approved the fees payable to them.

The committee has also issued a letter in line with recommendation No. 9 of the Blue Ribbon Committee on audit committee effectiveness, which is to be provided in the financial statements prepared in accordance with IFRS section of the Annual Report on Form 20-F.

In conclusion, the committee is sufficiently satisfied that it has complied with its responsibilities as outlined in the audit committee charter.

Sd/-

Mumbai Deepak M. SatwalekarMay 6, 2011 Chairperson

2. Compensation committeeOur compensation committee (‘the committee’) comprises four independent directors. They are :

• K. V. Kamath, Chairperson• Prof. Jeffrey S. Lehman• David L. Boyles• Dr. Omkar Goswami

The purpose of the committee of the Board of Directors (‘the Board’) shall be to discharge the Board’s responsibilities related to compensation of the Company’s executive directors and senior management. The committee has the overall responsibility of approving and evaluating the compensation plans, policies and programs for executive directors and senior management.

The committee shall annually review and approve for the CEO, the executive directors and senior management (a) the annual base salary; (b) the annual incentive bonus, including the specific goals and amount; (c) equity compensation; (d) employment agreements, severance arrangements, and change in control agreements / provisions, and (e) any other benefits, compensation or arrangements.

The committee, in consultation with the CEO, shall review the performance of all the executive directors each quarter, on the basis of the detailed performance parameters set for each of the executive directors at the beginning of the year. The compensation committee may, from time-to-time, also evaluate the usefulness of such performance parameters, and make necessary amendments.

Compensation committee attendance during fiscal 2011Five compensation committee meetings were held during the year ended March 31, 2011. These were held on April 12, 2010; June 12, 2010; July 12, 2010; October 15, 2010 and January 13, 2011.


K. V. Kamath (1) 4 4Prof. Jeffrey S. Lehman 5 5David L. Boyles 5 5Dr. Omkar Goswami (1) 4 4

(1) Appointed with effect from April 13, 2010

During the year, the compensation committee held three conference calls – on August 26, 2010; November 26, 2010 and February 16, 2011.

Compensation committee report for the year ended March 31, 2011During the year, the committee reviewed the performance of all whole-time directors on each quarter based on a detailed performance parameters set for each of the whole-time directors and approved the payment of individual performance incentives to each one of them. The committee also from time to time evaluated the usefulness of such performance parameters and has suggested necessary changes to the



to the same. The committee further reviewed the performance of the Members of the Executive Council on a half yearly basis and approved the payment of variable compensation.

The committee believes that the compensation and benefits are adequate to motivate and retain the senior officers of the Company.

The Nominations committee, on April 30, 2011 recommended the appointment of K. V. Kamath as the Non-Executive Chairman of the Board of Directors with effect from August 21, 2011. In this connection, the Committee discussed and recommended to the Board that, while serving in this role, K. V. Kamath, as the Non-Executive Chairman of the Board be entitled to a special fee of US$ 150,000 (over and above the regular Board fee) per year for Chairmanship of the Board. In arriving at this conclusion, the Committee took note of the fact that K. V. Kamath would devote as much as 30 days per year to Infosys, over and above the time that other independent directors ordinarily devote to Infosys.

K. V. Kamath being interested in the proceedings recused himself from the discussions on the matter.

Apart from the said disclosures, none of the directors had a material beneficial interest in any contract of significance to which the Company or any of its subsidiaries were a party, during the financial year.

Sd/-

Bangalore Dr. Omkar Goswami April 30, 2011 Member, Compensation Committee

3. Nominations committeeOur nominations committee (‘the committee’) comprises three independent directors :

• Prof. Jeffrey S. Lehman, Chairperson• Deepak M. Satwalekar• K. V. Kamath

The purpose of the committee (‘the committee’) of the Board of Directors (‘the Board’) is to oversee the Company’s nomination process for the top level management and specifically to identify, screen and review individuals qualified to serve as executive directors, non-executive directors and independent directors consistent with criteria approved by the Board and to recommend, for approval by the Board, nominees for election at the annual meeting of shareholders. The committee also makes recommendations to the Board on candidates for :

1. Nomination for election or re-election by the shareholders; and

2. Any Board vacancies that are to be filled by the Board.

The committee may act on its own in identifying potential candidates, inside or outside the Company, or may act upon proposals submitted by the Chairperson of the Board of Directors. The committee will review and discuss all documents pertaining to candidates and will conduct evaluation of candidates in accordance with a process that it sees fit and appropriate, passing on the recommendations for nomination to the Board.

The committee also coordinates and oversees the annual self-evaluation of the Board’s performance and of individual directors in the governance of the Company.

Nominations committee attendance during fiscal 2011 The committee held four meetings during the year – on April 12, 2010; July 13, 2010; October 14, 2010 and January 12, 2011.


Prof. Jeffrey S. Lehman 4 4Deepak M. Satwalekar 4 4K. V. Kamath(1) 3 3

(1) Appointed with effect from April 13, 2010

Nominations committee report for the year ended March 31, 2011The nominations committee (‘the committee’) of the Board of Directors (‘the Board’) is responsible for overseeing the Company’s nomination process for the top level management positions and to identify, screen and recommend to the Board individuals qualified to serve as executive directors, non-executive directors and independent directors consistent with the criteria approved by the Board.

Leadership succession at Infosys upon the retirement of N. R. Narayana Murthy, the Chairman of the Board and the Chief Mentor, is a subject the nominations committee has been busy with for a substantial period of time. This process involved several close consultations with individual Board members.

The nominations committee believes that sound succession planning of senior leadership is the most important ingredient for creating a robust future for the Company. Therefore, the Committee adopted a rigorous process to ensure that the Board selects the right candidates for senior leadership positions.

The committee circulated documents reviewing the skills and experiences that should be represented within the Board, as well as (in particular) the key responsibilities of the Chairman. The committee revised these documents in response to feedback from other Board members.

The committee solicited nominations from Board members of potential candidates for Board membership and leadership positions. Members of the committee had individual and group conversations with individual Board members and groups of Board members concerning the suitability of different potential candidates.

The upcoming retirement of N. R. Narayana Murthy defines a unique transition in the history of the Company. After careful deliberation internally and with each of the other Board members, the committee unanimously concluded that it was important to use this moment for a full transition at the senior leadership level, rather than for a transition only in the position of Chairman, with an anticipated transition at the CEO level ten months later.

The committee also decided that it was important to continue to incorporate new global perspectives on governance best practices, while at the same time ensuring that the leadership structure also satisfied the specific needs of the Company.

Accordingly, the Committee was of the unanimous opinion that at this moment in the Company’s history, it is best to have a Non-Executive Chairman of the Board who will bring an independent perspective to that role, an Executive Co-Chairman for stronger connect with clients, investors and employees, and a Chief Executive Officer and Managing Director with primary responsibility for designing and implementing the strategy of the Company. Specifically, the committee forwarded the following recommendations to the Board for its consideration.

1. K. V. Kamath be appointed as the Chairman of the Board.

2. S. Gopalakrishnan be appointed as the Whole-time Director and to be designated as the Executive Co-Chairman of the Board.

3. S. D. Shibulal be appointed as the Chief Executive Officer and Managing Director.

K. V. Kamath being interested in the proceedings recused himself from the discussions on his appointment as the Chairman of the Board.

The committee recommended that the Board appoint N. R. Narayana Murthy as the Chairman Emeritus, effective August 21, 2011. This is in recognition of his founding the Company, mentoring his senior management and nurturing the organization over the last thirty years.

During the year, the committee recommended the induction of R. Seshasayee and Ravi Venkatesan as Independent Directors on the Board. The Committee was impressed with R. Seshasayee’s extensive experience in managing the operations of a large corporation during tough times and his ability to tackle and manage challenges, and



with Ravi Venkatesan’s extensive experience in stewarding successful transformational changes within established, respected multinational companies, coupled with his knowledge of the Indian and global software services industry.

Also, during the year, the committee discussed the retirement of Members of the Board as per statutory requirements. As a third of the members have to retire every year based on their date of appointment, K. Dinesh, Srinath Batni, Sridar A. Iyengar, Deepak M. Satwalekar and Dr. Omkar Goswami, will retire in the ensuing AGM. The committee considered their performance and recommended that the shareholders consider the necessary resolutions for the re-appointment of these members, except for K. Dinesh, who expressed his intention not to seek re-appointment, due to personal reasons.

During the year, the committee also coordinated and oversaw the annual performance self-evaluation of the Board and of individual directors in the governance of the Company.

Sd/-

Bangalore Prof. Jeffrey S. Lehman April 30, 2011 Chairperson

4. Investor grievance committeeOur investor grievance committee (‘the committee’) comprises four independent directors :

• Dr. Omkar Goswami, Chairperson• Deepak M. Satwalekar• Prof. Marti G. Subrahmanyam• R. Seshasayee

K. Parvatheesam, Company Secretary, is the Compliance Officer.

Investor grievance committee attendance during fiscal 2011The committee has the mandate to review and redress shareholder grievances. Four investor grievance committee meetings were held during the year – on April 13, 2010; July 13, 2010; October 15, 2010 and January 13, 2011.


Dr. Omkar Goswami 4 4Deepak M. Satwalekar 4 4Prof. Marti G. Subrahmanyam 4 4R. Seshasayee(1) 1 1

(1) Appointed with effect from January 13, 2011

Investor grievance committee report for the year ended March 31, 2011The committee expresses satisfaction with the Company’s performance in dealing with investor grievances and its share transfer system.

The details of complaints resolved during the financial year ended March 31, 2011 are as follows :

Nature of complaints Received Resolved ClosingDividend related 706 706 –

It has also been noted that the shareholding in dematerialized mode as on March 31, 2011 was 99.72%, the same as in the previous year.

Sd/-

Bangalore Dr. Omkar GoswamiApril 15, 2011 Chairperson

5. Risk management committeeOur risk management committee (‘the committee’) is comprised of four independent directors :

• David L. Boyles, Chairperson• Sridar A. Iyengar• Dr. Omkar Goswami• Prof. Jeffrey S. Lehman

The purpose of the committee of the Board of Directors (‘the Board’) shall be to assist the Board in fulfilling its corporate governance ideals in overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environment risks. The committee has the overall responsibility of monitoring and approving the risk policies and associated practices of the Company. The committee is also responsible for reviewing and approving risk disclosure statements in any public documents or disclosures.

Risk management committee attendance during fiscal 2011 The committee held five meetings during the year – on April 13, 2010; July 12, 2010; July 13, 2010; October 14, 2010 and January 12, 2011.


David L. Boyles 5 5Sridar A. Iyengar 5 5Dr. Omkar Goswami 5 5Prof. Jeffrey S. Lehman 5 5

The committee also held three conference calls on April 1, 2010; October 11, 2010 and on January 8, 2011.

Risk management committee report for the year ended March 31, 2011The committee reviewed the Company’s risk management practices on a quarterly basis. This included review of business risk environment, top risks in terms of exposure, risk levels and their trend line, potential impact and progress of mitigation plans. Further, as per a scheduled annual calendar, the committee reviewed risk management practices in the areas of service delivery, talent management, competitive positioning, information security, client account level risks, contracts management and financial risks. In addition, individual committee members performed reviews in specific areas. The committee also reviewed the results of the annual risk survey and findings of benchmarking evaluation of the Company’s ERM program. The committee has also received and considered an assessment of its activities by the Board.

While acknowledging the dynamic nature of the business environment, the committee believes that the Infosys Risk Framework along with risk assessment, monitoring, mitigation and reporting practices are adequate to minimize the impacts of foreseeable material risks facing the Company and will strengthen the risk management practices in the Company. In conclusion, the committee is sufficiently satisfied that it has complied with its responsibilities as outlined in the risk management committee charter.

Sd/-

Bangalore David L. BoylesApril 14, 2011 Chairperson

D. Management review and responsibility

Formal evaluation of officersThe compensation committee of the Board approves the compensation and benefits for all Executive Board Members as well as members of the Executive Council. Another committee, headed by the CEO, reviews, evaluates and decides the annual compensation of our officers from the level of Vice President, excluding members of the Executive Council.



Investor grievances and share transferWe have a Board-level investor grievance committee to examine and redress shareholders’ and investors’ complaints. The status on complaints and share transfers is reported to the entire Board. The details of shares transferred and the nature of complaints are provided in the Shareholder information section of the Annual Report. For shares transferred in physical form, the Company provides adequate notice to the seller before registering the transfer of shares. The share transfer committee of the Company will meet as often as required to approve share transfers. For matters regarding shares transferred in physical form, share certificates, dividends and change of address, shareholders should communicate with Karvy Computershare Private Limited, our registrar and share transfer agent. Their address is given in the Shareholder information section of the Annual Report.

Share transactions in electronic form can be effected in a much simpler and faster manner. After confirmation of sale / purchase transaction from the broker, shareholders should approach the depository participant with a request to debit or credit the account for the transaction. The depository participant will immediately arrange to complete the transaction by updating the account. There is no need for separate communication to the Company to register the share transfer.

Details of non-complianceThere has been no instance of non-compliance with any legal requirements nor have there been any strictures imposed by any stock exchange, SEBI or SEC, on any matters relating to the capital market over the last three years.

Postal ballotsFor the year ended March 31, 2011, there are no ordinary or special resolutions that need to be passed by our shareholders through a postal ballot.

Auditors’ certificate on corporate governanceAs required by Clause 49 of the Listing Agreement, the auditors’ certificate is given in the Annexure to the directors’ report section in the Annual Report.

CEO and CFO certificationAs required by Clause 49 of the Listing Agreement, the CEO / CFO certification is provided in the CEO and CFO certification section of the Annual Report.

Code of ConductIn compliance with Clause 49 of the Listing Agreement, the Company has adopted a Code of Conduct. This code is applicable to the Members of the Board, the Executive Council and all employees of the Company and Subsidiaries. The Code of Conduct is available on our website, www.infosys.com.

All the members of the Board and the Executive Council and senior financial officers have affirmed compliance to the Code of Conduct, as at March 31, 2011. A declaration to this effect, signed by the CEO, the Managing Director and the CFO, is provided in the CEO and CFO certification section of the Annual Report.

Board interaction with clients, employees, institutional investors, the government and the pressThe Chairman, the CEO and the COO, in consultation with the CFO, handle all interactions with investors, the media and various governments. The CEO and the COO manage most of the interactions with clients and employees.

Risk managementWe have an integrated approach to managing risks inherent in various aspects of our business. More details are provided in the Risk management report section of the Annual Report.

Management’s discussion and analysisA detailed report on the Management’s discussion and analysis is provided in the Management’s discussion and analysis section of the Annual Report.

E. Shareholders

Disclosures regarding the appointment or re-appointment of directorsAccording to the Articles of Association, one-third of the directors retire by rotation and, if eligible, seek re-appointment at the Annual General Meeting of shareholders. As per Article 122 of the Articles of Association, K. Dinesh, Srinath Batni, Sridar A. Iyengar, Deepak M. Satwalekar and Dr. Omkar Goswami will retire in the ensuing Annual General Meeting. The Board has recommended the re-appointment of all the retiring directors, except K. Dinesh who expressed his intention not to seek re-appointment due to personal reasons. The Board also decided to appoint S. Gopalakrishnan as the Whole-time Director (to be designated as the Executive Co-Chairman of the Board) and S. D. Shibulal as the Chief Executive Office and Managing Director. These appointments are effective from August 21, 2011. The detailed profiles of all these directors are provided in the Notice convening the Annual General Meeting.

Communication to the shareholdersWe send quarterly reports to each shareholder via email. The report contains select financial data extracted from the audited financial statements under Indian GAAP and unaudited financial statements under IFRS. The quarterly report along with additional information is also posted on our website. Moreover, the quarterly / annual results and official news releases are generally published in The Economic Times, The Times of India, Business Standard, Business Line, Financial Express and Udayavani (a regional daily published from Bangalore). Quarterly and annual financial statements, along with segmental information, are also posted on our website. Earnings calls with analysts and investors are broadcast live on the website and their transcripts are published on the website soon thereafter. Any specific presentations made to analysts and others are also posted on our website. The proceedings of the Annual General Meeting are webcast live for shareholders across the world. The video archives are also available on our website, www.infosys.com

General body meetingsThe details of the last three Annual General Meetings are as follows :

Financial year ended Date and Time Venue Special resolution passedMarch 31, 2008 June 14, 2008 at 3 p.m. IST NIMHANS Convention Center,

Hosur Road, Bangalore, IndiaNone

March 31, 2009 June 20, 2009 at 3 p.m. IST Christ University Auditorium, Hosur Road, Bangalore, India

None

March 31, 2010 June 12, 2010 at 3 p.m. IST Christ University Auditorium, Hosur Road, Bangalore, India

None



Compliance with non-mandatory requirements of Clause 49 of the Listing AgreementClause 49 of the Listing Agreement mandates us to obtain a certificate from either the auditors or practicing Company Secretaries regarding compliance of conditions of corporate governance as stipulated in the Clause, and annex the certificate with the Directors’ report, which is sent annually to all our shareholders. We have obtained a certificate to this effect and the same is given as an Annexure to the directors’ report.

The Clause further states that the non-mandatory requirements may be implemented as per our discretion. However, the disclosures of compliance with mandatory requirements and adoption (and compliance) / non-adoption of the non-mandatory requirements shall be made in this section of the Annual Report.

We comply with the following non-mandatory requirements :

The BoardIndependent directors may have a tenure not exceeding, in the aggregate, a period of nine years on our Board.

None of the independent directors on our Board have served for a tenure exceeding nine years from the date when the new Clause 49 became effective.

Remuneration committeeWe have instituted a compensation committee. A detailed note on compensation / remuneration committee is provided under the Compensation committee in this section.

Shareholders’ rightsThe Clause states that a half-yearly declaration of financial performance, including summary of the significant events in the last six months, may be sent to each shareholder.

We communicate with investors regularly through e-mail, telephone and face-to-face meetings either in investor conferences, Company visits or on road shows.

We also leverage the internet in communicating with our investor base. We announce quarterly financial results within two weeks of the close of a quarter. After the announcement of the quarterly financial results, a business television channel in India telecasts a live discussion with our Management. This enables a large number of retail shareholders in India to understand our operations better. The announcement of quarterly results is followed by media briefings in several television channels, press conferences and earnings conference calls. The earnings calls are webcast live on the internet so that information is available to all at the same time. Further, transcripts of the earnings calls are posted on our website, www.infosys.com, within a week. Highlights of the results are also made available to mobile phone users in India through SMS and WAP.

Training of Board membersAll new non-executive directors inducted into the Board are given an orientation. Presentations are made by various executive directors and senior management giving an overview of our operations to familiarize the new non-executive directors with the operations. The new non-executive directors are given orientation on our services, group structure and subsidiaries, our constitution, Board procedures and matters reserved for the Board, our major risks and risk management strategy.

The Board’s policy is to have separate meetings regularly with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management share point of views and leadership thoughts on relevant issues.

We also facilitate the continual education requirements of our directors. Each director is entitled for a training fee of US$ 5,000 per annum. Independent directors are allowed to attend educational programs in the areas of board / corporate governance.

Mechanism for evaluating non-executive Board membersThe Board evaluates the performance of non-executive / independent directors through a peer-evaluation process every year. Each Board member makes a presentation to the Board highlighting their contributions and thought leadership initiatives pursued during the year. A scale of 1 to 3 is used by every Board member during the evaluation of each of the external Board members.

Independent directors have three key roles, namely, governance, control and guidance. Some of the performance indicators based on which the independent directors are evaluated include:

• Ability to contribute to and monitor our corporate governance practices.

• Ability to contribute by introducing international best practices to address top-management issues.

• Active participation in long-term strategic planning.

• Commitment to the fulfillment of a director’s obligations and fiduciary responsibilities. This includes participation at the Board and Committee Meetings.

Whistleblower policyWe have established a mechanism for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of our code of conduct or ethics policy. It also provides for adequate safeguards against victimization of employees who avail of the mechanism, and also allows direct access to the Chairperson of the audit committee in exceptional cases. We further affirm that no employee has been denied access to the audit committee.

F. Compliance with the corporate governance codes

Corporate Governance Voluntary Guidelines 2009The Ministry of Corporate Affairs, Government of India, published the Corporate Governance Voluntary Guidelines in 2009. These guidelines have been published keeping in view the objective of encouraging the use of better practices through voluntary adoption, which not only serve as a benchmark for the corporate sector but also help them in achieving the highest standard of corporate governance. These guidelines provide corporate India a framework to govern themselves voluntarily as per the highest standards of ethical and responsible conduct of business. The Ministry hopes that adoption of these guidelines will also translate into a much higher level of stakeholders’ confidence which is crucial in ensuring the long-term sustainability and value generation by businesses. The guidelines broadly focus on areas such as Board of Directors, responsibilities of the Board, audit committee functions, roles and responsibilities, appointment of auditors, compliance with secretarial standards and a mechanism for whistleblower support. We substantially comply with the Corporate Governance Voluntary Guidelines.



Revised Clause 49 of the Listing AgreementSEBI, with a view to improving corporate governance standards in India and to enhance the transparency and integrity of the market, constituted a committee on corporate governance under the chairmanship of N. R. Narayana Murthy. The committee issued two sets of recommendations : the mandatory recommendations and the non-mandatory recommendations.

SEBI has incorporated the recommendations made by the Narayana Murthy Committee on Corporate Governance in Clause 49. A revised Clause 49 was made effective from January 1, 2006. We fully comply with the revised Clause 49 of the Listing Agreement.

Naresh Chandra CommitteeFollowing instances of irregularities involving auditors in the U.S. and in India, the Government of India, by an order dated August 21, 2002, constituted a high-level committee under the chairmanship of Naresh Chandra to examine the auditor-company relationship and to regulate the role of auditors. Chapters 2, 3 and 4 of the Naresh Chandra Committee report are relevant to us. We comply with these recommendations.

Kumar Mangalam Birla CommitteeSEBI appointed a committee on corporate governance on May 7, 1999, under the chairmanship of Kumar Mangalam Birla, to promote and raise the standards of corporate governance. The SEBI Board adopted the recommendations of the committee on January 25, 2000. We comply with these recommendations.

Euroshareholders Corporate Governance Guidelines, 2000‘Euroshareholders’ is the confederation of European shareholders associations, constituted to represent the interests of individual shareholders in the European Union. The guidelines are based on the general principles of corporate governance issued by the Organization for Economic Co-operation and Development (OECD) in 1999, but are more specific and detailed. Subject to the statutory regulations in force in India, we comply with these recommendations.

Compliance with findings and recommendation of the Conference Board Commission on Public Trust and Private Enterprises in the U.S.The Conference Board Commission on Public Trust and Private Enterprises was convened to address the circumstances which led to corporate irregularities and the subsequent decline of confidence in the American capital markets. The commission addressed three key areas – executive compensation, corporate governance, and audit and accounting issues, and issued its first set of findings and recommendations. We substantially comply with these recommendations.

OECD Principles of Corporate GovernanceThe governments of the 30 countries in the OECD have recently approved a revised version of the OECD’s Principles of Corporate Governance, adding new recommendations for good practice in corporate behavior with a view to rebuilding and maintaining public trust in companies and stock markets. We comply with these recommendations.

A detailed compliance report, with the recommendations of various committees listed in this section, is available on our website www.infosys.com.

United Nations Global CompactAnnounced by the United Nations Secretary-General, Kofi Annan, at the World Economic Forum in Davos, Switzerland, in January 1999, and formally launched at the UN Headquarters in July 2000, the Global Compact calls on companies to embrace ten principles in the areas of human rights, labor standards and environment. The Global Compact is a value-based platform designed to promote institutional learning. It utilizes the power of transparency and dialog to identify and disseminate good practices based on universal principles. The ten principles are drawn from the Universal Declaration of Human Rights, the International Labor Organization’s Fundamental Principles on Rights at Work, and the Rio Principles on Environment and Development.

The Global Compact recommends that companies embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption.

According to these principles, businesses should :

• Support and respect the protection of internationally proclaimed human rights

• Ensure that they are not complicit in human rights abuses

• Uphold the freedom of association and the effective recognition of the right to collective bargaining

• Support the elimination of all forms of forced and compulsory labor

• Support the effective abolition of child labor

• Eliminate discrimination with respect to employment and occupation

• Support a precautionary approach to environmental challenges

• Undertake initiatives to promote greater environmental responsibility

• Encourage the development and diffusion of environment-friendly technologies

• Work against corruption in all its forms, including extortion and bribery

On August 27, 2001, we adopted the United Nations Global Compact policy and became a partner with the United Nations in this initiative. A strong sense of social responsibility is an integral part of our value system. We adhere to the principles of the United Nations Global Compact.

Source : www.unglobalcompact.org

74 | Shareholder information


Shareholder information

The Company is sending periodic communication to the concerned shareholders, advising them to lodge their claims with respect to unclaimed dividend. Shareholders are cautioned that once unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof with the Company.

Dividend remitted to IEPF during the last three years

Fiscal Amount (R) 2011 4,48,2962010 6,60,2042009 6,49,767

Investor services

Tentative calendar

Quarter ending Earnings release Quiet periodJun 30, 2011 Jul 12, 2011 Jun 16 to Jul 14, 2011Sep 30, 2011 Oct 12, 2011 Sep 16 to Oct 14, 2011Dec 31, 2011 Jan 12, 2012 Dec 16, 2011 to Jan 14, 2012Mar 31, 2012 Apr 13, 2012 Mar 16 to Apr 15, 2012

Annual General Meeting

Date and time June 11, 2011, Saturday, 3 p.m. ISTVenue The Christ University Auditorium,

Hosur Road, Bangalore 560 029Book closure dates May 28, 2011 to June 11, 2011 Dividend payment date June 13, 2011

Investor awarenessMaintaining the highest standards of corporate governance is not a matter of mere form, but of substance. In continuation of our efforts in that direction, we have provided a synopsis of some of your rights and responsibilities as a shareholder on our website, www.infosys.com. We encourage you to visit our website and read the document. We hope that the document will give you appropriate guidance, though in brief, on any questions regarding your rights as a shareholder.

Dematerialization of shares and liquidityInfosys shares are tradable compulsorily in electronic form and, through Karvy Computershare Private Limited, Registrars and Share Transfer Agents, we have established connectivity with both the depositories, that is, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The International Securities Identification Number (ISIN) allotted to our shares under the Depository System is INE009A01021.

As at March 31, 2011, 99.72% of our shares were held in dematerialized form and the rest in physical form.

We were the first company in India to pay a one-time custodial fee of R 44.43 lakh to NSDL. Consequently, our shareholders do not have to pay depository participants, the custodial fee charged by NSDL on their holding.

CorporateInfosys was incorporated in Pune, in 1981, as Infosys Consultants Private Limited, a private limited company under the Indian Companies Act, 1956. We changed our name to Infosys Technologies Private Limited in April 1992 and to Infosys Technologies Limited in June 1992, when we became a public limited company. We made an initial public offering in February 1993 and were listed on stock exchanges in India in June 1993. Trading opened at R 145 per share, compared to the IPO price of R 95 per share. In October 1994, we made a private placement of 5,50,000 shares at R 450 each to Foreign Institutional Investors (FIIs), Financial Institutions (FIs) and body corporates.

In March 1999, we issued 20,70,000 American Depositary Shares (ADSs) (equivalent to 10,35,000 equity shares of par value of R 10/- each) at US$ 34 per ADS under the ADS Program and the same were listed on the NASDAQ National Market. All the above data is unadjusted for issue of stock split and bonus shares. In July 2003, June 2005 and November 2006, we successfully completed secondary ADR issues of US$ 294 million, US$ 1.1 billion and US$ 1.6 billion respectively.

The address of our registered office is Electronics City, Hosur Road, Bangalore 560 100, Karnataka, India.

Bonus issues and stock split

Fiscal 1986 1989 1991 1992 1994 1997 1999 2005 2007Bonus 1:1 1:1 1:1 1:1 1:1 1:1 1:1 3:1 1:1

Note : In addition of shares, the Company split the stock in the ratio of 2 for 1 in fiscal 2000.

Dividend policyThe dividend policy is to distribute up to 30% of the consolidated Profit After Tax (PAT) of the Infosys group as dividend.

Unclaimed dividendSection 205 of the Companies Act, 1956, mandates that companies transfer dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). In accordance with the following schedule, the dividend for the years mentioned as follows, if unclaimed within a period of seven years, will be transferred to IEPF.

Year Type of dividend

Dividend per share

(R)

Date of declaration

Due date for transfer

Amount (R) (1)

2004 Final (2) 115.00 Jun 12, 04 Jul 11, 11 27,53,1002005 Interim 5.00 Oct 12, 04 Nov 11, 11 5,95,535

Final 6.50 Jun 11, 05 Jul 10, 12 5,82,4522006 Interim 6.50 Oct 11, 05 Nov 10, 12 4,88,384

Final (3) 38.50 Jun 10, 06 Jul 9, 13 17,28,7272007 Interim 5.00 Oct 11, 06 Nov 10, 13 6,46,835


Final (4) 27.25 Jun 14, 08 Jul 13, 15 30,41,3492009 Interim 10.00 Oct 11, 08 Nov 10, 15 21,47,850


Final 15.00 Jun 12, 10 Jul 17, 17 25,36,9502011 Interim (5) 40.00 Oct 15, 10 Nov 20, 17 54,44,880

(1) Amount unclaimed as at March 31, 2011.(2) Includes one-time special dividend of r 100/- per share.(3) Includes silver jubilee special dividend of r 30/- per share.(4) Includes special dividend of r 20/- per share.(5) Includes 30th year special dividend of r 30/- per share.

Shareholder information | 75


Shares held in demat and physical mode as at March 31, 2011 are as follows :

Category Number of % to total equityshareholders shares

Demat modeNSDL 3,31,093 56,68,67,476 98.73CDSL 84,986 56,81,625 0.99Total 416,079 57,25,49,101 99.72Physical mode 544 16,02,458 0.28Grand total 4,16,623 57,41,51,559 100.00

To enable us to serve our investors better, we request shareholders whose shares are in physical mode to dematerialize shares and to update their bank accounts with the respective depository participants.

Secretarial auditAs a measure of good corporate governance practice, the Board of Directors of the Company appointed Parameshwar G. Hegde, Practicing Company Secretary, to conduct Secretarial Audit of records and documents of the Company. The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, and all the Regulations and Guidelines of the Securities and Exchange of India (SEBI) as applicable to the Company. The audit also covers the reconciliation on a quarterly basis, the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The audit has confirmed that the total issued / paid up capital is in agreement with the aggregate total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL. Further, the company voluntarily adheres to the various Secretarial Standards issued by the Institute of Company Secretaries of India.

Investor complaints

Received AttendedNature of complaints

2011 2010 2011 2010

Dividend / Bonus related 706 629 706 629

We attended to most of the investors’ grievances / correspondences within a period of ten days from the date of receipt of such grievances. The exceptions have been for cases constrained by disputes or legal impediments.

Designated e-mail address for investor servicesIn terms of Clause 47 (f) of the Listing Agreement, the designated e-mail address for investor complaints is [email protected]

Legal proceedingsThere are certain pending cases related to disputes over title to shares in which we had been made a party. However, these cases are not material in nature.

Shareholders holding more than 1% of the sharesThe details of shareholders (non-founders) holding more than 1% of the equity as at March 31, 2011 are as follows :

Name of the shareholder No. of Shares %Life Insurance Corporation of India (1) 2,45,97,487 4.28Oppenheimer Developing Markets Fund (2) 1,25,56,971 2.19Abu Dhabi Investment Authority (2) 1,10,65,282 1.93Franklin Templeton Investment Funds (2) 99,87,588 1.74ICICI Prudential Life Insurance Company Limited (3) 84,09,519 1.46Vanguard Emerging Markets Stock Index Fund (2) 70,88,500 1.23Government of Singapore (2) 63,01,219 1.10Aberdeen Asset Managers Limited (2) 62,68,000 1.09Bajaj Allianz Life Insurance Company Limited (3) 61,41,329 1.07HDFC Trustee Company Limited (3) 59,05,736 1.03

(1) Financial institution(2) Foreign institutional investor(3) Body corporate

Distribution of shareholding as at March 31, 2011

Range of equity shares held

No. of share-

holders

% No. of shares %

1 14,561 3.50 14,561 0.002-10 1,92,179 46.13 12,85,207 0.2211-50 1,37,501 33.00 36,49,192 0.6451-100 31,252 7.50 24,74,459 0.43101-200 15,387 3.70 23,48,626 0.40201-500 9,991 2.40 33,09,698 0.58501-1,000 5,846 1.40 43,36,039 0.761,001-5,000 6,267 1.50 1,47,43,304 2.575,001-10,000 1,434 0.34 1,01,97,201 1.7810,001 and above 2,204 0.53 43,07,43,251 75.02Total 4,16,622 100.00 47,31,01,538 82.40Equity shares underlining ADS 1 0.00 10,10,50,021 17.60Total 4,16,623 100.00 57,41,51,559 100.00

Share transfers in physical formShares sent for physical transfer are effected after giving a 15-day notice to the seller for confirmation of the sale. Our share transfer committee meets as often as required. The total number of shares transferred in physical form during the year was 424 as against 60 for the previous year.

Listing on stock exchanges

Codes India GlobalNSE BSE NASDAQ

Exchange INFOSYSTCH 500209 INFYReuters INFY.NS INFY.BO INFY.OBloomberg NINFO IN INFO IN –

The listing fees for fiscal 2012 have been paid for all the above stock exchanges.

Stock market data relating to shares listed in IndiaOur market capitalization is included in the computation of the BSE-30 Sensitive Index (Sensex), the BSE Dollex, S&P CNX NIFTY Index and NASDAQ-100 Index. The monthly high and low quotations, as well as the volume of shares traded at the BSE, the NSE and NASDAQ for the current year are provided in the following page.



Shareholding pattern

Category March 31, 2011 March 31, 2010

Shareholders (no.)

Voting strength (%)

Number of shares held

Shareholders (no.)

Voting strength (%)

Number of shares held

Founders holding

Indian founders 19 16.04 9,20,85,078 19 16.05 9,20,84,978

Total founders holding (A) 19 16.04 9,20,85,078 19 16.05 9,20,84,978

Public shareholding

Institutional investors

Mutual funds 332 4.60 2,63,83,936 266 4.02 2,30,90,168

Banks, financial institutions and insurance companies 60 4.40 2,52,50,097 55 3.90 2,24,10,708

Foreign institutional investors 989 36.12 20,73,99,314 892 36.36 20,86,37,229

Others

Private corporate bodies 3,357 6.70 3,84,66,629 3,223 5.40 3,09,81,305

Indian public 4,05,131 13.18 7,56,70,639 3,70,644 14.33 8,22,20,794

NRIs / OCBs / Foreign nationals 6,696 0.86 49,37,208 6,571 0.81 46,58,086

Trusts 38 0.50 29,08,637 45 0.50 28,65,977

Total public shareholding (B) 4,16,603 66.36 38,10,16,460 3,81,696 65.32 37,48,64,267

Equity shares underlying ADS (C) 1 17.60 10,10,50,021 1 18.63 10,68,75,947

Total (A + B + C) 4,16,623 100.00 57,41,51,559 3,81,716 100.00 57,38,25,192

Stock market data – Exchanges in India

BSE NSE Total volume

High (R) Low (R) Volume (No.) High (R) Low (R) Volume (No.) (BSE & NSE) (No.)

2010

April 2,801.55 2,644.05 38,02,005 2,801.60 2,643.75 2,62,06,242 3,00,08,247

May 2,702.15 2,533.30 20,57,441 2,706.15 2,533.40 2,03,97,880 2,24,55,321

June 2,817.90 2,625.25 18,12,206 2,822.70 2,624.35 1,80,94,283 1,99,06,489

July 2,894.95 2,729.00 28,21,046 2,895.90 2,727.50 2,01,31,995 2,29,53,041

August 2,873.40 2,696.00 15,50,015 2,874.65 2,700.45 1,49,29,717 1,64,79,732

September 3,058.50 2,750.65 19,29,074 3,059.15 2,753.00 2,25,48,316 2,44,77,390

October 3,184.25 2,969.60 29,26,489 3,185.25 2,970.85 2,47,46,483 2,76,72,972

November 3,082.90 2,966.45 16,12,368 3,082.65 2,963.80 1,73,13,835 1,89,26,203

December 3,445.00 3,054.55 19,67,499 3,446.95 3,052.40 1,74,02,190 1,93,69,689

2011

January 3,475.85 3,116.30 24,39,518 3,481.45 3,117.70 2,28,41,828 2,52,81,346

February 3,161.20 3,003.05 16,89,953 3,165.25 2,997.10 2,02,18,080 2,19,08,033

March 3,236.75 2,922.15 23,82,349 3,241.30 2,922.30 2,30,22,036 2,54,04,385

Total 3,475.85 (1) 2,533.30 (1) 2,69,89,963 3,481.45 (1) 2,533.40 (1) 24,78,52,885 27,48,42,848

Volume traded / average outstanding shares (%) FY 2011 6 52 58

FY 2010 9 72 81

FY 2009 18 100 118

Note : The number of shares outstanding is 47,31,01,538. American Depositary Shares (ADSs) have been excluded for the purpose of this calculation. (1) Represents yearly high and yearly low of equity shares.

Shareholder information | 77


Stock market data – NASDAQ

High ($) Low ($) High (R) Low (R) Volume (No.)

2010

April 63.05 59.86 2,796.90 2,655.40 3,49,68,168

May 60.75 55.18 2,816.97 2,558.70 3,56,44,538

June 63.56 56.55 2,952.36 2,626.75 2,99,59,933

July 63.02 58.01 2,832.11 2,606.96 3,01,27,055

August 63.37 57.28 2,487.84 2,574.16 2,39,45,776

September 67.31 59.70 3,024.91 2,682.91 2,75,77,117

October 71.20 66.34 3,154.16 2,947.48 3,57,49,334

November 69.56 64.51 3,191.41 2,959.71 2,42,38,801

December 76.41 67.85 3,416.29 3,033.57 1,86,54,990

2011

January 77.53 67.62 3,559.40 3,104.43 3,54,93,366

February 69.56 66.52 3,148.98 3,011.36 2,15,98,322

March 71.70 64.52 3,197.82 2,877.59 3,33,67,452

Total 77.53 (1) 55.18 (1) 3,559.40 (1) 2,558.70 (1) 35,13,24,852

Notes : 1 ADS = 1 equity share. U.S. dollar has been converted into Indian rupee at the monthly closing rates. The number of ADSs outstanding as at March 31, 2011 was 10,10,50,021. The percentage of volume traded to the total float was 347.67% as against 500.24% in the previous year.

(1) Represents yearly high and yearly low of ADSs

Infosys share price versus the BSE Sensex

Base 100 = April 1, 2010



ADS premium compared to price quoted on BSE

Based on monthly high prices

Outstanding ADSsOur ADSs as evidenced by American Depositary Receipts (ADRs) are traded in the U.S. on the NASDAQ Global Select Market under the ticker symbol ‘INFY’. Each equity share is represented by one ADS. The ADRs evidencing ADSs began trading on NASDAQ from March 11, 1999, when they were issued by the Depository Deutsche Bank Trust Company Americas (the Depository), pursuant to the Deposit Agreement. As at March 31, 2011, there were 54,850 record holders of ADRs evidencing 10,10,50,021 ADSs (1 ADS = 1 equity share).

Shareholder inform

ation | 79

Infosys Annual R

eport 2010-11

Share price chart

We caution that the stock price performance shown in the graph below should not be considered indicative of potential future stock price performance.

Notes : Adjusted for bonus issues and stock split. Base 100 = June 1993. Historical stock price performance should not be considered indicative of potential future stock price performance.



Investor contacts

Addresses of regulatory authority / stock exchanges

In IndiaSecurities and Exchange Board of IndiaPlot No. C4-A, G Block, Bandra Kurla Complex Bandra (East), Mumbai 400 051 Tel. : 91 22 2644 9000 / 4045 9000Fax : 91 22 2644 9016 – 20 / 4045 9016 – 20

National Stock Exchange of India LimitedExchange Plaza, Bandra-Kurla ComplexBandra (East), Mumbai 400 051Tel. : 91 22 2659 8100, Fax : 91 22 2659 8120

Bombay Stock Exchange Limited Phiroze Jeejeebhoy TowersDalal Street, Mumbai 400 001Tel. : 91 22 2272 1233, Fax : 91 22 2272 1919

Outside IndiaThe NASDAQ Stock MarketOne Liberty Plaza165 Broadway New York, NY 10006 Tel. : 212 401 8700

Depository for equity shares in IndiaNational Securities Depository LimitedTrade World, A Wing, 4th and 5th FloorsKamala Mills CompoundSenapathi Bapat Marg, Lower ParelMumbai 400 013Tel. : 91 22 2499 4200, Fax : 91 22 2497 6351

Central Depository Services (India) LimitedPhiroze Jeejeebhoy Towers, 17th FloorDalal Street, FortMumbai 400 001Tel. : 91 22 2272 3333, Fax : 91 22 2272 3199

For queries relating to financial statementsV. Balakrishnan Chief Financial Officer

Tel. : 91 80 2852 0440, Fax : 91 80 2852 0754E-mail : [email protected]

For queries relating to shares / dividend / complianceK. ParvatheesamCompany Secretary and Compliance Officer


Investor correspondence in IndiaAvishek LathManager − Investor Relations


Investor correspondence in the U.S.Sandeep MahindrooSenior Manager − Investor Relations


Registrar and share transfer agentsKarvy Computershare Private LimitedRegistrars and Share Transfer AgentsPlot No. 17 to 24, Near Image HospitalVittalrao Nagar, MadhapurHyderabad 500 081, IndiaTel. : 91 40 4465 5151, Fax : 91 40 4465 5024E-mail : [email protected]

Depository bank (ADS)

United StatesDeutsche Bank Trust Company AmericasTrust & Securities Services 60 Wall Street, 27th FloorMS# NYC60-2727New York, NY 10005, U.S.Tel. : 1 212 250 1905, Fax : 1 212 797 0327

India Deutsche Bank A. G.Trust & Securities Services 222, Dr. D. N. Road, Kodak Houses1st Floor, Fort, Mumbai 400 001, IndiaTel. : 91 22 6658 4380 – 89, Fax : 91 22 2207 9614

Custodian in India (ADS) ICICI Bank LimitedSecurities Market ServicesEmpire Complex, F7 / E7 First Floor414, Senapati Bapat Marg, Lower ParelMumbai 400 013, IndiaTel. : 91 22 6667 2030 / 2026, Fax : 91 22 6667 2740 / 2779


Global presence | 81

Global presence

Asia Pacific

Hong Kong2 Exchange Square 8 / F, 8 Connaught PlaceCentral, Hong KongTel. : 852 2297 2231Fax : 852 2297 0066

JapanIzumi Garden Wing 2F1-6-3, Roppongi, Minato-kuTokyo 106 0032Tel. : 81 3 5545 3251Fax : 81 3 5545 3252

MalaysiaMerak Block, Suite BPersiaran Multimedia1st Floor, Cyberjaya,Kuala Lumpur 63000Tel. : 60 383 203 829

Mauritius4th Floor, B WingEbène Cyber TowersReduit, MauritiusTel. : 230 401 9200Fax : 230 464 1318

Singapore04-01 / 06, 1 Changi Business ParkCrescent, Singapore 486025Tel. : 65 6572 8400Fax : 65 6572 8405

Level 43, Unit 2Suntec Tower 29 Temasek BlvdSingapore – 038989Tel. : 65728400Fax : 65728400

United Arab EmiratesDubai506 and 805 Liberty House, DIFCP. O. Box 506846DubaiTel. : 971 4 508 0200Fax : 971 4 508 0225

SharjahZ3 Office 11, SAIF ZoneP. O. Box 8230, SharjahTel. : 971 6 557 1068Fax : 971 6 557 3768

Europe

BelgiumRegus Park Atrium11, Rue des Colonies KolonienstraatB 1000 BrusselsTel. : 32 2 517 62 30Fax : 32 2 517 67 00

Czech RepublicRegus Business CenterPrague Stock ExchangeRybna Street 682 / 1411005 Prague 1Tel. : 420 222 191 387Fax : 420 222 191 700

DenmarkRegus CopenhagenLarsbjoernsstraede 31454 CopenhagenTel. : 45 33 3772 94Fax : 45 33 3243 70

FinlandRegus Mannerheimintie 12 B00100 HelsinkiTel. : 358 925 166 239Fax : 358 925 166 100

FranceParisTour Opus 12, 4th Floor77 Esplanade du Général de Gaulle92 914 Paris La Defense 9 Tel. : 33 1 56 39 12 00Fax : 33 1 56 39 12 01

Toulouse7, Avenue Didier Daurat2nd Floor, Blagnac31700 ToulouseTel. : 33 5 34 50 92 77Fax : 33 5 34 50 91 90

GermanyEschbornTopas 1, Merganthalleralle 77 65760 EschbornTel. : 49 6196 9694 0Fax : 49 6196 9694 200

FrankfurtOpernturm, 22nd Floor, Bokenheimer Landstrasse, 60306 Frankfurt am MainTel. : 49 0 69 269566 000Fax : 49 0 69 269566 200

StuttgartLiebknechtstrasse 33D 70565 StuttgartTel. : 49 711 7811 570Fax : 49 711 7811 571

WalldorfPartner PortAltrottstr. 31, 69190 WalldorfTel. : 49 6227 73 4350Fax : 49 6227 73 4359

GreeceGreek Branch,Regus Hellas S.A. 166A Kifissias Avenue & 2, Sofokleous strMaroussi GR 151 26Tel : 30 210 727 9055Fax : 30 210 7279200

IrelandRegus Prembroke House30 Pembroke Street Upper Dublin 2Tel. : 353 1 234 2470Fax : 353 1 234 2575

NorwayRegus Business Center Ibsen ASC. J. Hambrosplass 2C1st Floor, Oslo 0164Tel. : 47 22 99 60 42Fax : 47 22 99 60 10

Russia4 / 430, 4. Lesnoy Pereulok,Moscow 125047Tel. : 7 495 642 8710Fax : 7 495 225 8500

SpainRegus – CUZCO IVPaseo de la Castellana 141-828046, MadridTel. : 34 91 503 0644Fax : 34 91 503 0530

SwedenStureplan 4C, 4tr114 35, StockholmTel. : 46 8 463 1112Fax : 46 8 463 1114

SwitzerlandBaselRegus Basel City CentreInnere Margarethenstrasse 5 Basel 4051Tel. : 41 0 61 204 4545Fax : 41 0 61 204 4500

Geneva18, Avenue Louis-Casai1209 GenevaTel. : 41 22 747 7894Fax : 41 22 747 7900

Zurich3rd Floor, Badenerstrasse 5308048 ZurichTel. : 41 43 817 4170Fax : 41 43 817 4150

The NetherlandsWorld Trade CenterH-Tower, 23rd FloorZuidplein 1901077 XV AmsterdamTel. : 31 20 796 5500Fax : 31 20 796 5501

United KingdomAberdeenCBXII West Wing 382 - 390 Midsummer BoulevardMilton Keynes MK9 2RGTel. : 44 1908 84 74 00Fax : 44 1908 84 74 01

London14th and 15th Floor10 Upper Bank StreetCanary WharfLondon E 14 5NPTel. : 44 20 7715 3300Fax : 44 20 7715 3301

SwindonPart First FloorWakefield HouseAspect Park, Pipers WaySwindon SN 31RETel. : 44 179 352 8766Fax : 44 179 352 3714

India

BangaloreElectronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 0261Fax : 91 80 2852 0362

Infosys – Center PointOffshore Development CenterPlot No. 26AElectronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 0261Fax : 91 80 2852 0362

Reddy BuildingK 310, 1st Main5th Block, KoramangalaBangalore 560 095Tel. : 91 80 2553 2591Fax : 91 80 2553 0391

Salarpuria Infozone3rd and 4th FloorWing A, No. 39 (P), No. 41 (P) and No. 42 (P) Electronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 0261Fax : 91 80 2852 0362

BhubaneswarPlot No. E / 4, Info CityBhubaneswar 751 024Tel. : 91 674 232 0032Fax : 91 674 232 0100

ChandigarhBlock A and B, Ground FloorDLF Building, Plot No. 2Rajiv Gandhi Technology ParkKishangarhChandigarh 160 101Tel. : 91 172 502 1100Fax : 91 172 504 6222

Plot No. 1 Rajiv Gandhi Technology ParkKishangarhChandigarh 160 101Tel. : 91 172 503 8000Fax : 91 172 504 6860

Chennai138 Old Mahabalipuram RoadSholinganallurChennai 600 119Tel. : 91 44 2450 9530Fax : 91 44 2450 0390

Mahindra Industrial ParkTP 1 / 1, Central AvenueTechno Park SEZMahindra World CityNatham Sub Post, ChengelpetKancheepuram DistrictChennai 603 002Tel. : 91 44 4741 1111Fax : 91 44 4741 5151

HyderabadSurvey No. 210Manikonda VillageLingampallyRangareddy (Dist.) Hyderabad 500 032Tel. : 91 40 6642 0000Fax : 91 40 2300 5223

MangaloreKuloor Ferry Road, KottaraMangalore 575 006Tel. : 91 824 245 1485Fax : 91 824 245 1504

IT and ITeS SEZKamblapadavuKurnad Post, Pajeeru VillageBantwal Taluk 574 153Dakshina Kannada (Dist.) Tel. : 91 824 228 4492Fax : 91 824 228 4491

Mumbai85, ‘C’, Mittal Towers8th Floor, Nariman PointMumbai 400 021Tel. : 91 22 2284 6490Fax : 91 22 2284 6489

MysoreNo. 350, Hebbal Electronics CityMysore 570 018Tel. : 91 821 240 4101Fax : 91 821 240 4200

New DelhiK30, Green Park MainBehind Green Park MarketNew Delhi 110 016Tel. : 91 11 2651 4829Fax : 91 11 2685 3366

PunePlot No. 1, Rajiv Gandhi Infotech Park,Hinjawadi, Taluka Mulshi, Pune 411 057Tel. : 91 20 2293 2800Fax : 91 20 2293 2832

Plot No. 24Rajiv Gandhi Infotech ParkPhase II, Village MaanTaluka Mulshi, Pune 411 057Tel. : 91 20 3982 7000Fax : 91 20 3982 8000

Thiruvananthapuram3rd Floor, Bhavani TechnoparkThiruvananthapuram 695 581Tel. : 91 471 398 2222Fax : 91 471 270 0889

Plot No. 1, Technopark Campus II, Attipara VillageThiruvananthapuram 695 581 Tel. : 91 471 398 2222Fax : 91 471 270 0889

North America

CanadaCalgarySuite 1000, 888-3rd Street SWBankers Hall,West TowerCalgary, AB T2P 5C5Tel. : 1 403 444 6896Fax : 1 403 444 6699

Toronto5140 Yonge StreetSuite 1400 TorontoOntario, M2N 6L7Tel. : 1 416 224 7400Fax : 1 416 224 7449

United StatesAtlanta400 Galleria ParkwaySuite 1490, AtlantaGA 30339Tel. : 1 770 799 1860Fax : 1 770 799 1861

Bellevue3326 160th Avenue SESuite 300, BellevueWA 98008Tel. : 1 425 256 6200Fax : 1 425 256 6201

Bentonville2700 SE ‘S’ Street, Suite 200Bentonville, AR 72712Tel. : 1 479 271 4600Fax : 1 479 271 4601

Bridgewater400 Crossing BoulevardSuite 101, BridgewaterNJ 08807Tel. : 1 908 450 8200Fax : 1 908 450 8201


82 | Global presence

North America (contd.) Charlotte13777 Ballantyne Corporate PLSuite 250, Charlotte, NC 28277Tel. : 1 704 972 0320Fax : 1 704 972 0311

Fremont6607 Kaiser DriveFremont, CA 94555Tel. : 1 510 742 3000Fax : 1 510 742 3090

Hartford95 Glastonbury BlvdGlastonbury, CT 06033Tel. : 1 860 494 4139Fax : 1 860 494 4140

Houston14800 St. Mary’s LaneSuite 160, HoustonTX 77079Tel. : 1 281 493 8698Fax : 1 281 493 8601

Lake ForestOne Spectrum PointeSuite 350, Lake Forest CA 92630Tel. : 1 949 206 8400Fax : 1 949 206 8499

Lisle2300 Cabot DriveSuite 250, Lisle IL 60532Tel. : 1 630 482 5000Fax : 1 630 505 9144

Minneapolis80 South, 8th StreetSuite 900Minneapolis, MN 55402Tel. : 1 612 349 5258Fax : 1 510 248 2022

New York630 Fifth AvenueSuite 1600, Rockefeller CenterNew York, NY 10111Tel. : 1 646 254 3100Fax : 1 646 254 3101

Phoenix10835 N 25th AvenueSuite 200, Phoenix AZ 85029Tel. : 1 480 655 3598Fax : 1 480 655 3501

Plano6100, Tennyson ParkwaySuite 200, Plano TX 75024Tel. : 1 469 229 9400Fax : 1 469 229 9598

QuincyTwo Adams PlaceQuincy, MA 02169Tel. : 1 781 356 3100Fax : 1 781 356 3150

Reston12021 Sunset Hills RoadSuite 340, Reston VA 20190Tel. : 1 703 234 3798Fax : 1 703 234 3701

Southfield3000 Town CenterSuite 2850 Southfield, MI 48075Tel. : 1 248 603 4300Fax : 1 248 208 3315

Subsidiaries of Infosys Technologies Limited

Infosys Technologies (Australia) Pty. LimitedBrisbaneLevel 12, 259 Queen StreetBrisbane QLD 4000Tel. : 61 7 3231 9800Fax : 61 7 3231 9899

MelbourneLevel 5, 818 Bourke StreetDocklands VIC 3008P. O. Box 528Collins Street WestMelbourne VIC 8007Tel. : 61 3 9860 2000Fax : 61 3 9860 2999

Melbourne (Lonsdale Street) Level 21 150 Lonsdale StreetMelbourne VIC 3000P. O. Box 528Collins Street WestMelbourne VIC 8007Tel. : 61 3 9860 2000Fax : 61 3 9860 2997

PerthLevel 18, Central Park Building152-158 St. Georges Terrace, Perth WA 6000Tel. : 61 8 9288 1750Fax : 61 8 9288 1753

SydneyLevel 3, 77 Pacific HighwayNorth Sydney NSW 20060P. O. Box 1885Tel. : 61 2 8912 1500Fax : 61 2 8912 1555

New ZealandLevel 27, PWC Tower188 Quay StreetAuckland New Zealand 1010Tel. : 64 9 363 2700Fax : 64 9 363 2727

Infosys Tecnologia do Brasil LtdaBrazilRua Da Paisagem, 220Edificio Lumiere, Andar : 5 E 6Vila Da Serra, Nova LimaMinas Gerais - CEP 34.000-000-BrazilTel. : 55 31 33068900Fax : 55 31 33068901

Infosys Technologies (China) Company LimitedBeijingNo. 7 Guang Hua RoadFloor 28thB1- 1 HanWei Building. ChaoYang DistrictBeijing, ChinaTel. : 010 57335000

DalianNo. 1001-1006, No. 1 Hui Xian GardenDalian Hi-Tech Industry ParkDalian, ChinaTel : 86 21 58843000Fax : 86 21 58843001

HangzhouBldg A2, No. 301 Binxing Road Binjiang District Hangzhou 310052Tel. : 86 571 87930030Fax : 86 571 87930001

ShanghaiBldg A, No. 6, 3158 Long Dong Road,Zhangjiang Hi-Tech Park,Shanghai 201203Tel : 86 21 58843000Fax : 86 21 58843006

Bldg 18, 1387 Zhang Dong Road, Zhangjiang Hi-Tech Park,Shanghai 201203Tel : 86 21 58843000Fax : 86 21 58843001

Infosys Technologies (Shanghai) Company LimitedRoom 401, 501, Building Wu,No. 555 Dong Chuan Road,Min Hang District, Shanghai, ChinaTel : 86 21 58843000Fax : 86 21 58843001

Infosys Technologies S. de R L. de C. V.MexicoAve. Acueducto No. 26104piso Col. Del Paseo ResidencialMonterrey, N. L. C. P. 64920Tel. : 521 81 1253 8400Fax : 521 81 1253 8401

Corporativo Santa MariaBoulevard Diaz Ordaz Numero 130Monterrey, Mexico CP 64650Tel. : 521 81 8850 9300Fax : 521 81 8850 9301

Infosys Consulting, Inc.North America6100, Tennyson ParkwaySuite 200, Plano, TX 75024Tel. : 1 469 229 9400Fax : 1 469 229 9598

United Kingdom14th and 15th Floor10 Upper Bank StreetCanary WharfLondon E 14 5NPTel. : 44 20 7715 3300Fax : 44 20 7715 3301

Subsidiary of Infosys Consulting, Inc.

Infosys Consulting India LimitedPlot No. 26-A, Ground FloorElectronic City, Hosur Road, Bangalore 560 100Tel : 91 80 6688 1144 Fax : 91 80 6688 2140

Infosys Technologies (Sweden) AB Stureplan 4C, 4tr114 35, StockholmTel. : 46 8 463 1112Fax : 46 8 463 1114

Infosys BPO LimitedAustralia - MelbourneLevel 5, 818, Bourke StreetDocklands VIC 3008P. O. Box 528Collins Street WestMelbourne VIC 8007Tel. : 61 3 9860 2000Fax : 61 3 9860 2999

Canada - Toronto5140, Yonge StreetSuite 1400Toronto ON M2N 6L7Tel. : 416 224 7400Fax : 416 224 7449

India - BangaloreElectronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 2405Fax : 91 80 2852 2411

Pavithra Complex, No. 127th Main, 2nd Cross1st Stage, BTM LayoutBangalore 560 068Tel. : 91 80 3021 3600Fax : 91 80 4171 4808

Salarpuria InfozoneWing A, No. 39 (P) 41 (P) and 42 (P) Electronic City, Hosur RoadBangalore 560100Tel. : 91 80 4067 0035Fax : 91 80 4067 0034

27, SJR TowersBannerghatta RoadJ. P. Nagar, III PhaseBangalore 560 078Tel. : 91 80 5103 2000Fax : 91 80 2658 8676

India - ChennaiTemple Steps 6th and 7th FloorNo. 184, Annasalai SaidapetChennai 600 015Tel. : 91 44 6600 7000Fax : 91 44 6600 7005

India - Gurgaon7th floor Tower A, B and CBuilding No. 6DLF Cyber City Developer LimitedSpecial Economic ZoneSector 24 and 25 DLF PH-3GurgaonTel. : 91 124 4583 700Fax : 91 124 4583 701

India - JaipurPlot No. E-142-143Sitapura Industrial AreaJaipur 302022Tel. : 91 141 2771 325Fax : 91 141 2771 325

IT-A-001Mahindra World CitySpecial Economic ZoneVillage KalwaraTahsil SanganerJaipur 302029Tel. : 91 141 3956 000Fax : 91 141 3956 100

India - PunePlot No. 1, Building No. 4Pune Infotech ParkHinjawadi, Taluka MulshiPune 411 057Tel. : 91 20 2293 2900Fax : 91 20 2293 4540


Philippines2nd and 3rd FloorTrade Hall MetroMarket, Bonifacio Global CityFort Bonifacio Taguig CityMetro Manila, PhilippinesTel. : 632 856 3319Fax : 632 856 3320

United Kingdom14th Floor10 Upper Bank StreetCanary WharfLondon E14 5NPTel. : 44 20 7715 3388Fax : 44 20 7715 3301

United States - Bridgewater400 Crossing Boulevard1st Floor, BridgewaterNJ 08807Tel. : 1 908 450 8209Fax : 1 908 842 0284

Subsidiaries of Infosys BPO

Infosys BPO s.r.oCzech Republic Holandka 9,63900, BrnoTel. : 420 542 212406Fax : 420 543 236349

Infosys BPO Poland Sp.Z o.o.Al. Piłsudskiego 22 90-051Lodz, PolandTel. : 48 42 291 8000Fax : 48 42 291 8081

UL. Gdanska 4790-729 Lodz, PolandTel. : 48 42 291 8205Fax : 48 42 291 80 73

McCamish Systems LLC6425 Powers Ferry Road3rd FloorAtlanta, GA 30339Tel. : 1 800 366 0819Fax : 1 770 690 1800

Global presence

Creative concept and design by Communication Design Group, Infosys.© 2011 Infosys Technologies Limited, Bangalore, India. Infosys acknowledges the proprietary rights in the trademarks and product names of other companies mentioned in the Annual Report.

INFOSYS TECHNOLOGIES LIMITEDElectronics City, Hosur RoadBangalore 560 100, IndiaTel. : 91 80 2852 0261Fax : 91 80 2852 0362

www.infosys.com

April 30, 2011

Dear member,

You are cordially invited to attend the thirtieth Annual General Meeting of the members to be held on Saturday, June 11, 2011 at 3.00 p.m. IST at the Christ University Auditorium, Hosur Road, Bangalore 560 029, Karnataka, India.

The Notice for the meeting, containing the business to be transacted, is enclosed herewith.

Attendees with disabilities who require assistance at the Annual General Meeting are requested to contact :

Charles Henry HawkesVice President and Regional Head – Facilities

Infosys Technologies Limited, Electronics City, Hosur RoadBangalore 560 100, IndiaTel. : 91 80 2852 0261 Ext. : 2250Mobile : 91 98450 15990

Very truly yours,


Encl : Notice

NoticeNotice is hereby given that the thirtieth Annual General Meeting (AGM) of the members of Infosys Technologies Limited will be held on Saturday, June 11, 2011, at 3.00 p.m. IST at the Christ University Auditorium, Hosur Road, Bangalore 560 029, Karnataka, India, to transact the following business :

Ordinary business

Item no. 1 – Adoption of accountsTo receive, consider and adopt the Balance Sheet as at March 31, 2011, the Profit and Loss account for the year ended on that date and the Report of the Directors and the Auditors thereon.

Item no. 2 – Declaration of dividendTo declare a final dividend for the financial year ended March 31, 2011.

Item no. 3 – Re-appointment of Srinath BatniTo appoint a director in place of Srinath Batni, who retires by rotation and, being eligible, seeks re-appointment.

Item no. 4 – Re-appointment of Sridar A. IyengarTo appoint a director in place of Sridar A. Iyengar, who retires by rotation and, being eligible, seeks re-appointment.

Item no. 5 – Re-appointment of Deepak M. SatwalekarTo appoint a director in place of Deepak M. Satwalekar, who retires by rotation and, being eligible, seeks re-appointment.

Item no. 6 – Re-appointment of Dr. Omkar GoswamiTo appoint a director in place of Dr. Omkar Goswami, who retires by rotation and, being eligible, seeks re-appointment.

Item no. 7 – Retirement of K. DineshTo resolve not to fill the vacancy for the time being in the Board, caused by the retirement of K. Dinesh, who retires by rotation and does not seek re-appointment.

Item no. 8 – Appointment of AuditorsTo appoint auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration and to pass the following resolution thereof :

Resolved that B S R & Co., Chartered Accountants (Firm registration number 101248W), be and are hereby re-appointed as the Auditors of the Company to hold office from the conclusion of this Annual General Meeting to the conclusion of the next Annual General Meeting on such remuneration as may be determined by the Board of Directors in consultation with the Auditors, and the remuneration may be paid on a progressive billing basis to be agreed between the Auditors and the Board of Directors.

Special business

Item no. 9 – Appointment of R. Seshasayee as a Director, liable to retire by rotation

To consider and, if thought fit, to pass with or without modification(s), the following resolution as an ordinary resolutionResolved that R. Seshasayee, be and is hereby appointed as a Director of the Company, liable to retire by rotation.

Item no. 10 – Appointment of Ravi Venkatesan as a Director, liable to retire by rotation

To consider and, if thought fit, to pass with or without modification(s), the following resolution as an ordinary resolutionResolved that Ravi Venkatesan, be and is hereby appointed as a Director of the Company, liable to retire by rotation.

Item no. 11 – Appointment of S. Gopalakrishnan as Whole-time Director

To consider and, if thought fit, to pass with or without modification(s), the following as an ordinary resolution : Resolved that pursuant to the provisions of Section(s) 269, read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), approval of the Company be and is hereby accorded to the appointment of S. Gopalakrishnan, as Whole-time Director of the Company for a period of five years, with effect from August 21, 2011 (subject to the retirement policy applicable to the Board of Directors of the Company) on the terms and conditions as stated in the explanatory statement and on the remuneration set out below :

1. Salary per month : R 2,90,550 in the scale of R 2,75,000 to R 6,00,000.

2. Bonus : Up to a maximum of 20% of the salary, payable quarterly or at other intervals, as may be decided by the Board of Directors (‘the Board’).

3. Company performance linked incentive : Payable quarterly or at other intervals, as may be decided by the Board.

4. Individual performance linked incentive : Payable quarterly or at other intervals, as may be decided by the Board.

5. Perquisites and allowances :

a. Housing : Furnished / unfurnished residential accommodation or house rent allowance up to 10% of the salary in lieu thereof. The expenditure incurred by the Company on gas, electricity, water and furnishings, if any, shall be valued as per Income Tax Rules, 1962.

b. Medical reimbursement / allowance : Reimbursement of actual expenses for self and family and / or allowance will be paid as decided by the Board from time to time.

c. Leave travel concession / allowance : For self and family once in a year, as decided by the Board from time to time.

d. Club fees : Fees payable subject to a maximum of two clubs.

e. Provision for driver / driver’s salary allowance : As per the rules of the Company.

f. Personal accident insurance : As per the rules of the Company.

6. Other benefits :

a. Earned / privilege leave : As per the rules of the Company.

b. Company’s contribution to provident fund and superannuation fund : As per the rules of the Company.

c. Gratuity : As per the rules of the Company.

d. Encashment of leave : As per the rules of the Company.

e. Company car and telephone : Use of the Company’s car and telephone at the residence for official purposes, as per the rules of the Company.

(i)

Minimum remuneration : Resolved further that notwithstanding anything herein above stated, where in any financial year closing on and after March 31, 2012, the Company incurs a loss or its profits are inadequate, the Company shall pay to S. Gopalakrishnan the remuneration by way of salary, bonus and other allowances not exceeding the limits specified under Para 2 of Section II, Part II of Schedule XIII to the Companies Act, 1956 (including any statutory modifications or re-enactment(s) thereof, for the time being in force), or such other limits as may be prescribed by the Government from time to time as minimum remuneration.

Resolved further that the Board of Directors of the Company be and are hereby authorized to vary, alter or modify the different components of the above-stated remuneration as may be agreed to by the Board of Directors and S. Gopalakrishnan.

Item no. 12 – Appointment of S. D. Shibulal as Chief Executive Officer and Managing Director

To consider and, if thought fit, to pass with or without modifications, the following as an ordinary resolution : Resolved that pursuant to the provisions of Section(s) 269 read with Schedule XIII, and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modifications or re-enactment(s) thereof, for the time being in force), approval of the Company be and is hereby accorded to the appointment of S. D. Shibulal, as Chief Executive Officer and Managing Director of the Company for a period of five years, with effect from August 21, 2011 (subject to the retirement policy applicable to the Board of Directors of the Company) on the terms and conditions as stated in the explanatory statement and on the remuneration set out below :

1. Salary per month : R 2,90,550 in the scale of R 2,75,000 to R 6,00,000.

2. Bonus : Up to a maximum of 20% of the salary, payable quarterly or at other intervals, as may be decided by the Board of Directors (Board).

3. Company performance linked incentive : Payable quarterly or at other intervals, as may be decided by the Board.

4. Individual performance linked incentive : Payable quarterly or at other intervals, as may be decided by the Board.

5. Perquisites and allowances :

a. Housing : Furnished / unfurnished residential accommodation or house rent allowance up to 10% of the salary in lieu thereof. The expenditure incurred by the Company on gas, electricity, water and furnishings, if any, shall be valued as per the Income Tax Rules, 1962.

b. Medical reimbursement / allowance : Reimbursement of actual expenses for self and family and / or allowance will be paid as decided by the Board from time to time.

c. Leave travel concession / allowance : For self and family once in a year, as decided by the Board from time to time.

d. Club fees : Fees payable subject to a maximum of two clubs.

e. Provision for driver / driver’s salary allowance : As per the rules of the Company.

f. Personal accident insurance : As per the rules of the Company.

(ii)

6. Other benefits :

a. Earned / privilege leave : As per the rules of the Company.

b. Company’s contribution to provident fund and superannuation fund : As per the rules of the Company.

c. Gratuity : As per the rules of the Company.

d. Encashment of leave : As per the rules of the Company.

e. Company car and telephone : Use of the Company’s car and telephone at the residence for official purposes, as per the rules of the Company.

Minimum remuneration : Resolved further that notwithstanding anything herein above stated, where in any financial year closing on and after March 31, 2012, the Company incurs a loss or its profits are inadequate, the Company shall pay to S. D. Shibulal the remuneration by way of salary, bonus and other allowances not exceeding the limits specified under Para 2 of Section II, Part II of Schedule XIII to the Companies Act, 1956 (including any statutory modifications or re-enactment(s) thereof, for the time being in force), or such other limits as may be prescribed by the Government from time to time as minimum remuneration.

Resolved further that the Board of Directors of the Company be and are hereby authorized to vary, alter or modify the different components of the above-stated remuneration as may be agreed to by the Board of Directors and S. D. Shibulal.

Item no. 13 – Change in the name of the Company

To consider and, if thought fit, to pass with or without modifications, the following as a special resolution : Resolved that subject to the approval of the Central Government under Section 21 and other applicable provisions, if any, of the Companies Act, 1956, the name of the Company be changed from Infosys Technologies Limited to Infosys Limited and that the name of the Company shall be Infosys Limited with effect from the date of issue of Certificate of Incorporation by the Registrar of Companies, Karnataka, in that behalf, and accordingly, the name Infosys Technologies Limited wherever it occurs in the Memorandum and Articles of Association of the Company be substituted by the name Infosys Limited.

Resolved further that, the Board of Directors be and are hereby authorized to take all necessary steps for giving effect to the aforesaid resolution.

Registered office : Electronics City Hosur Road Bangalore 560 100 India


by order of the Board of Directors for Infosys Technologies Limited

K. Parvatheesam Company Secretary

Notes1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE IN THE MEETING AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. The instrument appointing the proxy must be deposited at the registered office of the Company not less than 48 hours before the commencement of the meeting.

3. Members / proxies should bring duly filled Attendance Slips sent herewith to attend the meeting.

4. The Register of Directors’ Shareholding, maintained under Section 307 of the Companies Act, 1956, will be available for inspection by the members at the AGM.

5. The Register of Contracts, maintained under Section 301 of the Companies Act, 1956, will be available for inspection by the members at the registered office of the Company.

6. The Register of Members and Share Transfer Books will remain closed from May 28, 2011 to June 11, 2011 (both days inclusive).

7. The certificate from the Auditors of the Company certifying that the Company’s 1998 Stock Option Plan and 1999 Stock Option Plan are being implemented in accordance with SEBI Guidelines, 1999 (Employees Stock Option Scheme and Employees Stock Purchase Scheme), and in accordance with the resolution of the members passed at the general meeting will be available for inspection by the members at the AGM.

8. Subject to the provisions of Section 206A of the Companies Act, 1956, dividend as recommended by the Board of Directors, if declared at the meeting, will be paid on June 13, 2011 to those members whose names appear on the Register of Members as on May 27, 2011.

9. Members whose shareholding is in the electronic mode are requested to direct change of address notifications and updates of savings bank account details to their respective depository participants. Members are encouraged to utilize the Electronic Clearing System (ECS) for receiving dividends.

10. Members are requested to address all correspondence, including dividend matters, to the Registrar and Share Transfer Agents, Karvy Computershare Private Limited, Plot No. 17 to 24, Near Image Hospital, Vittalrao Nagar, Madhapur 414, Hyderabad 500081, India.

11. Members wishing to claim dividends, which remain unclaimed, are requested to correspond with K. Parvatheesam, Company Secretary, at the Company’s registered office. Members are requested to note that dividends not encashed or claimed within seven years from the date of transfer to the Company’s Unpaid Dividend Account, will, as per Section 205A of the Companies Act, 1956, be transferred to the Investor Education and Protection Fund.

12. Infosys is concerned about the environment and utilizes natural resources in a sustainable way. Recently, the Ministry of Corporate Affairs (MCA), Government of India, through its Circular Nos. 17 / 2011 and 18 / 2011, dated April 21, 2011 and April 29, 2011 respectively, has allowed companies to send official documents to their shareholders electronically as part of its green initiatives in corporate governance.

Recognizing the spirit of the circular issued by the MCA, we henceforth propose to send documents like the Notice convening the general meetings, Financial Statements, Directors’ Report, Auditors’ Report, etc to the email address provided by you with your depositories.

We request you to update your email address with your depository participant to ensure that the annual report and other documents reach you on your preferred email.

(iii)

Explanatory statement under Section 173 (2) of the Companies Act, 1956

Item no. 9R. Seshasayee was co-opted as an Additional Director of the Company with effect from January 13, 2011, pursuant to Section 260 of the Companies Act, 1956, read with Article 114 of the Articles of Association of the Company. R. Seshasayee holds office of Director up to the date of the Annual General Meeting. The Company has received notice in writing from a member along with a deposit of R 500/- proposing the candidature of R. Seshasayee for the office of Director under the provisions of Section 257 of the Companies Act, 1956. None of the Directors of the Company other than R. Seshasayee is interested or concerned in the resolution.

The Board accordingly recommends the resolution as set out in Item no. 9 of the Notice for approval of the members.

Item no. 10Ravi Venkatesan was co-opted as an Additional Director of the Company with effect from April 15, 2011, pursuant to Section 260 of the Companies Act, 1956, read with Article 114 of the Articles of Association of the Company. Ravi Venkatesan holds office of Director up to the date of the Annual General Meeting. The Company has received notice in writing from a member along with a deposit of R 500/- proposing the candidature of Ravi Venkatesan for the office of Director under the provisions of Section 257 of the Companies Act, 1956. None of the Directors of the Company other than Ravi Venkatesan is interested or concerned in the resolution.

The Board accordingly recommends the resolution as set out in Item no. 10 of the Notice for approval of the members.

Item no. 11The members of the Company at their meeting held on June 22, 2007 approved the appointment of S. Gopalakrishnan as Chief Executive Officer and Managing Director of the Company for a period of five years commencing June 22, 2007.

However, pursuant to the leadership succession changes announced by the Board on April 30, 2011, it is proposed to appoint S. Gopalakrishnan as the Whole-time Director (with the designation, Executive Co-Chairman of the Board) with effect from August 21, 2011. Accordingly, S. Gopalakrishnan will relinquish the office of Chief Executive Officer and Managing Director on August 20, 2011.

The appointment as Whole-time Director is subject to the approval of members. The terms and conditions of his appointment are as follows :

1. Period of appointment : Five years beginning August 21, 2011 and ending on August 20, 2016, subject to the retirement policy applicable to the Board of Directors of the Company.

2. Details of remuneration : As provided in the resolution.

3. The agreement, executed between the Company and S. Gopalakrishnan, may be terminated by either party by giving six months notice in writing of such termination.

4. S. Gopalakrishnan shall perform such duties as shall from time to time be entrusted to him, subject to the superintendence, guidance and control of the Board of Directors and he shall perform such other duties as shall from time to time be entrusted to him by the Board of Directors.

The resolution seeks the approval of the members in terms of Section 269 read with Schedule XIII and other applicable provisions of the Companies Act, 1956 for the appointment of S. Gopalakrishnan as the Whole-time Director of the Company for a period of five years commencing from August 21, 2011.

No director, except S. Gopalakrishnan, is interested or concerned in the appointment and remuneration payable to S. Gopalakrishnan as Whole-time Director.

The terms of appointment of S. Gopalakrishnan, as stated in this notice, may be treated as the abstract under Section 302 of the Companies Act, 1956. The copies of relevant resolutions of the Board with respect to the appointment is available for inspection by members at the registered office of the Company during working hours on any working day till the date of the Annual General Meeting.

The Board accordingly recommends the resolution as set out in Item no. 11 for approval of the members.

Item no. 12The members of the Company at their meeting held on June 22, 2007 approved the appointment of S. D. Shibulal as Whole-time Director of the Company for a period of five years commencing January 10, 2007.

The Board of Directors at their meeting held on April 30, 2011, resolved to appoint S. D. Shibulal as the Chief Executive Officer and Managing Director of the Company, commencing August 21, 2011.

The appointment is subject to the approval of members. The terms and conditions of his appointment are as follows :

1. Period of appointment : Five years beginning August 21, 2011 and ending on August 20, 2016, subject to the retirement policy applicable to the Board of Directors of the Company.

2. Details of remuneration : As provided in the resolution.

3. The agreement, executed between the Company and S. D. Shibulal, may be terminated by either party by giving six months notice in writing of such termination.

4. S. D. Shibulal shall perform such duties as shall from time to time be entrusted to him, subject to the superintendence, guidance and control of the Board of Directors and he shall perform such other duties as shall from time to time be entrusted to him by the Board of Directors.

The resolution seeks the approval of the members in terms of Section 269, read with Schedule XIII and other applicable provisions of the Companies Act, 1956 for the appointment of S. D. Shibulal as the Chief Executive Officer and Managing Director of the Company for a period of five years commencing August 21, 2011.

No director, except S. D. Shibulal, is interested or concerned in the appointment and remuneration payable to S. D. Shibulal as the Chief Executive Officer and Managing Director.

The terms of appointment of S. D. Shibulal, as stated in this notice, may be treated as the abstract under Section 302 of the Companies Act, 1956. The copies of relevant resolutions of the Board in respect of the appointment is available for inspection by members at the registered office of the Company during working hours on any working day till the date of the Annual General Meeting.

The Board accordingly recommends the resolution as set out in Item no. 12 for approval of the members.

(iv)

Item no. 13The Board of Directors at their meeting held on April 30, 2011 decided to change the name of the Company from Infosys Technologies Limited to Infosys Limited.

Infosys provides comprehensive business solutions that leverage technology and domain expertise to help its clients gain market differentiation and competitive advantage. Infosys’ comprehensive offerings include business and technology consulting, custom application and development, maintenance and production support, infrastructure management, package enabled consulting and implementation, product engineering solutions and product lifecycle management, systems integration, re-engineering, independent validation, and business process management as well as newer solutions such as cloud strategy adoption and Software as a Service (SaaS).

Infosys has operations in more than 30 countries and is a well-known brand. Today, the group is known by the brand ‘Infosys’ across all the stakeholders and general public.

Also, the Board believes that use of the word, ‘Technologies’, is restrictive for the kind of business the Company is pursuing today, when it is playing the role of a transformation partner for most of its global clients. The Company is also playing a larger role as a systems integrator by globally aligning with hardware, products and software players.

In order to reflect the brand name and represent the group’s activities, the Board recommends the change of the Company’s name to ‘Infosys Limited’.

This decision will henceforth see all our business segments to be referred by the Company name ‘Infosys’. This business decision regarding the change in the Company name is part of our branding strategy for the Infosys Group. This does not, in any way, mean a change in constitution / control / management of the Company.

None of the Directors is in any way interested or concerned in the proposal. The Board accordingly recommends the resolution as set out in Item no. 13 for approval of the members.

Registered office :

Electronics City Hosur Road Bangalore 560 100 India


by order of the Board of Directors for Infosys Technologies Limited

K. Parvatheesam Company Secretary

Companies (other than Infosys) in which Sridar A. Iyengar holds directorship and committee memberships

Directorships Chairperson of Board committeesInfosys BPO Limited

ICICI Bank Limited

Rediff.com India Limited

Mahindra Holidays and Resorts India Limited

OnMobile Global Limited

CL Educate Limited

ICICI Prudential Life Insurance Company Limited

Cleartrip Travel Services Private Limited

AverQ Inc.

Kovair Software Inc.

Rediff Holdings Inc.

American India Foundation Inc.

Cleartrip Inc.

ICICI Bank Limited

Audit Committee

Rediff.com India Limited

Audit Committee

CL Educate Limited

Audit committeeMember of Board committeesInfosys BPO Limited

Audit committee

Mahindra Holidays and Resorts India Limited

Audit Committee

Shareholding in the CompanySridar A. Iyengar does not hold any shares of the Company.


Profile and expertise in specific functional areasDeepak M. Satwalekar was the Managing Director and CEO of HDFC Standard Life Insurance Company Limited between 2000 and 2008. Before that, he served as the Managing Director of Housing

Development Finance Corporation (HDFC) since 1993. He has been a consultant to the World Bank, the Asian Development Bank, the United States Agency for International Development (USAID), and the United Nations Centre for Human Settlements (HABITAT).

Deepak is a recipient of the ‘Distinguished Alumnus Award’ from the Indian Institute of Technology, Bombay. He is on the Advisory Council of IIT, Bombay and has been a member and chairman of several expert groups related to industry, government and the Reserve Bank of India.

Deepak obtained a Bachelor’s degree in Technology from IIT, Bombay and a Master’s degree in Business Administration from the American University, Washington DC.

Srinath Batni

Profile and expertise in specific functional areas Srinath Batni was inducted as a member of the Board of Directors of Infosys in May 2000. He is responsible for Delivery Excellence at Infosys.

Srinath is also a Director on the Board of Infosys Technologies (China) Company Limited, Infosys Technologies (Shanghai) Company Limited and Infosys (Australia) Pty. Limited.

Srinath joined Infosys in June 1992 as Project Manager and since held several management positions. Before joining Infosys, he worked as a Project Manager for the Indian subsidiary of a leading French company (since 1990). Prior to that, he was responsible for implementing production management and materials management systems at one of India’s leading public sector heavy engineering and manufacturing companies (since 1980).

Srinath received a Bachelor’s degree in Mechanical Engineering from Mysore University in 1975 and a Master’s degree in Mechanical Engineering from the Indian Institute of Science, Bangalore, in 1979.

Companies (other than Infosys) in which Srinath Batni holds directorship and committee memberships

Directorships Chairperson of Board committeesInfosys Technologies (China) Company Limited

Infosys Technologies (Shanghai) Company Limited

Infosys Technologies (Australia) Pty. Limited

NoneMember of Board committeesNone

Shareholding in the CompanySrinath Batni holds 5,89,847 equity shares of the Company.

Sridar A. Iyengar

Profile and expertise in specific functional areasSridar A. Iyengar is an independent mentor investor in early stage entrepreneurs and companies. For more than 35 years, he has worked in the U.K., U.S. and India with a large number of companies

at all stages such as growth and globalization. He has been advising them on strategic issues.

Sridar A. Iyengar is the President of the Foundation for Democratic Reforms in India, a US-based non-profit organization. He is also an advisor to several venture and private equity funds.

He was previously a senior partner with KPMG in the U.S. and U.K. and served for three years as Chairman and CEO of KPMG’s operations in India.

Sridar A. Iyengar has a Bachelor of Commerce (Hons) degree from the University of Calcutta and is a Fellow of the Institute of Chartered Accountants in England and Wales.

(v)

Additional information on directors recommended for re-appointment

Companies (other than Infosys) in which Dr. Omkar Goswami holds directorship and committee memberships

Directorships Chairperson of Board committeesCERG Advisory Private Limited

Dr. Reddy’s Laboratories Limited

Infrastructure Development Finance Company Limited

Crompton Greaves Limited

DSP BlackRock Investment Managers Private Limited

Ambuja Cements Limited

Cairn India Limited

Godrej Consumer Products Limited

Max New York Life Insurance Company Limited

Avantha Power and Infrastructure Limited

Max India Limited

Dr. Reddy’s Laboratories Limited

Audit Committee

Cairn India Limited

Investor Grievance Committee

Crompton Greaves Limited

Audit CommitteeMember of Board committeesInfrastructure Development Finance Company Limited

Audit Committee

Investor Grievance Committee

Cairn India Limited

Audit Committee

Godrej Consumer Products Limited

Audit Committee

Shareholding in the CompanyDr. Omkar Goswami holds 12,300 equity shares of the Company.

R. Seshasayee

Profile and expertise in specific functional areasA Chartered Accountant by profession, R. Seshasayee started his career with Hindustan Lever Limited in 1971. Currently, he is the Executive Vice Chairman of Ashok Leyland Limited. Seshasayee

was the Managing Director of Ashok Leyland from April 1998 to March 2011.

As the Managing Director, Seshasayee spearheaded the drive for growth and development of Ashok Leyland. The company registered a turnover of US$ 1.61 billion in 2009-2010 and has one of the most comprehensive product portfolios in the medium and heavy commercial vehicle segment. Under Seshasayee’s leadership, Ashok Leyland has maintained its unbroken track record of profitability, and expanded its global footprint. He has been the Chairman of IndusInd Bank since July 2007. On the National Council of Confederation of Indian Industry (CII) for over twenty years, he was the National President of CII from 2006-2007. He was the President of the Society of Indian Automobile Manufacturers, the apex body representing the automobile industry of India from 2001-2003.

Seshasayee has served on several government committees, including the J. J. Irani Committee on Company Law. He is a member of the Board of Trade, an advisory body on policies relating to trade and commerce. He was also a member of the government delegation to the Doha Ministerial Round of the World Trade Organization (WTO) in 2001 and the Hong Kong Ministerial in 2005.

Seshasayee has been part of several professional committees such as the Accounting Standards Board and the Research Committees of the Institute of Chartered Accountants of India.

Seshasayee was also a director on the Boards of various companies, including ICICI Bank. He is also associated with several charitable, educational, cultural and social welfare organizations, including the Indian Cancer Institute.

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Companies (other than Infosys) in which Deepak M. Satwalekar holds directorship and committee memberships

Directorships Chairperson of Board committeesFranklin Templeton Asset Management India Private Limited

Asian Paints (India) Limited

Piramal Healthcare Limited

Germinait Solutions Private Limited

The Tata Power Company Limited

IL&FS Transportation Networks Limited

National Stock Exchange of India Limited

Indian Institute for Human Settlements

Piramal Healthcare Limited

Investor Grievance CommitteeMember of Board committeesThe Tata Power Company Limited

Audit Committee

Shareholding in the CompanyDeepak Satwalekar holds 56,000 equity shares of the Company.

Dr. Omkar Goswami

Profile and expertise in specific functional areasDr. Omkar Goswami is the Founder and Chairman of CERG Advisory Private Limited (CERG is the acronym for the Corporate and Economic Research Group).

A professional economist, Dr. Goswami completed his Master’s in Economics from the Delhi School of Economics in 1978 and his D. Phil (Ph.D) from Oxford in 1982. He taught and conducted research for 18 years at Oxford, Delhi School of Economics, Harvard, Tufts, Jawaharlal Nehru University, Rutgers University and the Indian Statistical Institute, New Delhi.

In March 1997 he moved away from formal academics to become the editor of Business India, one of the country’s most prestigious business magazines. From August 1998 to March 2004, Dr. Goswami served as the Chief Economist of the Confederation of Indian Industry – India’s premier apex industry organization.

Dr. Goswami has served on several government committees. He was the chairman of the Committee on Industrial Sickness and Corporate Restructuring in 1993, which recommended the revamping of India’s bankruptcy laws and procedures; member of the Working Group on the Companies Act; the CII Committee on Corporate Governance; the Rakesh Mohan Committee on Railway Infrastructure Reform; the Vijay Kelkar Committee on Direct Tax Reforms; the Naresh Chandra Committee on Auditor-Company Relationship; the N. R. Narayana Murthy Committee on Corporate Governance instituted by SEBI, among others.

Dr. Goswami has been a consultant to the World Bank, the IMF, the Asian Development Bank and the OECD.

Other than his regular columns for newspapers and magazines, Dr. Goswami has authored three books and over 70 research papers on economic history, industrial economics, public sector, bankruptcy laws and procedures, economic policy, corporate finance, corporate governance, public finance, tax enforcement and legal reforms.

Companies (other than Infosys) in which Ravi Venkatesan holds directorship and committee memberships

Directorships Chairperson of Board committeesNone None

Member of Board committeesNone

Shareholding in the CompanyRavi Venkatesan holds 110 equity shares of the Company.

S. Gopalakrishnan

Profile and expertise in specific functional areasS. Gopalakrishnan (Kris) is one of the founders of Infosys Technologies Limited. In 1981, Kris, along with N. R. Narayana Murthy and five others, founded Infosys Technologies Limited. His initial

responsibilities included the management of design, development, implementation, and support of information systems for clients in the consumer products industry in the U.S.

Between 1987 and 1994, Kris headed the technical operations of KSA / Infosys (a joint venture between Infosys and KSA in Atlanta, U.S.) as Vice President (Technical). In 1994, Kris returned to India and was appointed Deputy Managing Director of Infosys.

On June 22, 2007, Kris was appointed the CEO and Managing Director of Infosys. Kris previously served as the Chief Operating Officer (April 2002), and as the President and Joint Managing Director (August 2006). His responsibilities included customer services, technology, investments, and acquisitions.

Kris is recognized as a global thought leader. He was selected in Thinkers 50, an elite list of global business thinkers compiled by Des Dearlove and Stuart Crainer, in association with the IE Business School, Madrid, and the London Business School’s Management Innovation Lab.

Kris is the Chairman of the Confederation of Indian Industry (CII) Southern Regional Council and serves on the Board of Governors at the Indian Institute of Management (IIM), Bangalore. Kris is also the Chairman of the Indian Institute of Information Technology and Management (IIITM), Kerala, and the Vice Chairman of the Board of Information Technology Education Standards (BITES) set up by the Karnataka Government. He is a member of ACM, IEEE and IEEE Computer Society.

In January 2011, Kris was awarded the Padma Bhushan, the country’s third highest civilian honor, by the Government of India.

Kris holds Master’s degrees in Physics (1977) and Computer Science (1979) from the Indian Institute of Technology, Madras.

Companies (other than Infosys) in which S. Gopalakrishnan holds directorship and committee memberships

Directorships Chairperson of Board committees

None NoneMember of Board committeesNone

Shareholding in the CompanyS. Gopalakrishnan holds 66,56,726 equity shares of the Company.

Companies (other than Infosys) in which R. Seshasayee holds directorship and committee memberships

Directorships Chairperson of Board committeesAshok Leyland Limited

Ashley Airways Limited

Ashley Alteams India Limited

Hinduja Foundries Limited

IndusInd Bank Limited

Hinduja Automotive Limited, U.K.

Ashok Leyland Nissan Vehicles Limited

Hinduja Group India Limited

Hinduja Leyland Finance Limited

Hinduja National Power Corporation Limited

Irizar TVS Limited

Nissan Ashok Leyland Technologies Limited

Nissan Ashok Leyland Powertrain Limited

Optare plc., U.K.

Ashok Leyland Defense Systems Limited

NoneMember of Board committeesAshok Leyland Limited

Investors Grievance Committee

Hinduja Foundries Limited

Investors Grievance Committee

Shareholding in the CompanyR. Seshasayee does not hold any equity shares of the Company.

Ravi Venkatesan

Profile and expertise in specific functional areasRavi Venkatesan was the Chairman of Microsoft India and was responsible for Microsoft’s marketing, operational and business development efforts in the country.

Prior to joining Microsoft, Ravi Venkatesan worked for over seventeen years with Cummins Inc., a US-based designer, manufacturer and distributor of engines and related technologies. He served in various leadership capacities at Cummins including Chairman of Cummins India Limited and Managing Director of Tata Cummins Limited, a joint venture between Cummins Inc. and Tata Motors. His biggest contribution at Cummins was leading the transformation of Cummins in India into a major provider of power solutions and the largest manufacturer of automotive engines in the country.

Ravi Venkatesan has a B.Tech in Mechanical Engineering from the Indian Institute of Technology, Bombay (1985), an MS in Industrial Engineering from Purdue University (1986) and a MBA from Harvard University (1992) where he was a Baker Scholar. Ravi Venkatesan was awarded Purdue University’s Outstanding Industrial Engineer award for the year 2000 and the Distinguished Alumnus award by the Indian Institute of Technology, Bombay in 2003.

Ravi Venkatesan is a member of the Executive Council of NASSCOM, the Confederation of Indian Industry (CII), was a Director on the Board of Thermax Ltd. and a member of the Advisory Council of the Indian Institute of Technology, Bombay and IIIT, Bangalore. He has contributed frequently to the Harvard Business Review and some of his articles include Strategic Sourcing – to Make or Not to Make and The Strategy that Wouldn’t Travel.

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S. D. Shibulal

Profile and expertise in specific functional areasS. D. Shibulal (Shibu) is one of the co-founders and a member of the Board of Directors of Infosys Technologies Limited. Shibu has over three decades of IT leadership experience. He has played a pivotal

role in the Infosys journey and a seminal role in the evolution of the Global Delivery Model which is now the de-facto industry standard for delivery of outsourced IT services.

Shibu started his Infosys journey in 1981 by first spearheading its project management, and then handling client relationships in the North American region for a decade. He followed this with a five-year sabbatical with Sun Microsystems between 1991 and 1996, where he was responsible for designing and implementing their first e-commerce application amongst other creditable contributions. In 1997, on his return to Infosys, Shibu established and headed the Internet Consultancy practice. He moved on to serve several leadership roles at the group level, firstly as the Worldwide Head of Customer Delivery and later as Group Head, Worldwide Sales and Customer Delivery. Over the years, Shibu has been known to foster innovation, leadership, teamwork and work values within the organization.

On June 22, 2007, Shibu took over from S. Gopalakrishnan as Chief Operating Officer and has been serving this role since. His focus has been on increasing competitiveness, improving customer experience, improving employee engagement and increasing the depth of services.

Shibu received a Master’s degree in Physics from the University of Kerala and an MS in Computer Science from the University of Boston. He is a member of several international forums, such as the Seoul International Business Advisory Council (SIBAC), the International Board of Foundation, Globethics.net, the Global Corporate Governance Forum’s Private Sector Advisory Group, the International Advisory Board, Boston University and the Metropolitan College Dean’s Advisory Board, Boston University.

Companies (other than Infosys) in which S. D. Shibulal holds directorship and committee memberships

Directorships Chairperson of Board committees

Infosys BPO Limited

Infosys Consulting, Inc.

Infosys Technologies (China) Company Limited

Infosys Technologies (Sweden) AB

Infosys Consulting India Limited

Infosys Public Services Inc.

Infosys Technologies (Shanghai) Company Limited

NoneMember of Board committeesInfosys BPO Limited

Audit Committee

Shareholding in the CompanyS. D. Shibulal holds 24,69,711 equity shares of the Company.

Attendance record of the directors seeking appointment / re-appointmentDirectors Number of meetings

held attendedSrinath Batni 5 5Sridar A. Iyengar 5 5Deepak M. Satwalekar 5 5Dr. Omkar Goswami 5 5R. Seshasayee 1 1Ravi Venkatesan – –

S. Gopalakrishnan 5 5S. D. Shibulal 5 5

Disclosure in terms of Clause 49 (IV) (G) (ia) of the Listing AgreementThere are no inter-se relationships between the Board members.

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INFOSYS TECHNOLOGIES LIMITEDRegistered Office : Electronics City, Hosur Road, Bangalore 560 100, India

ADDITIONAL INFORMATION AND PRACTICE NOT REQUIRED UNDER THE COMPANIES ACT, 1956Infosys’ Board acknowledges the fact that not all shareholders attend the AGM and even though a proposal may have received the assent of the requisite majority of shareholders present at the AGM, the overall shareholder response to any proposal is not captured or known.

Infosys believes that determining and disclosing the overall shareholder response to the proposals placed before the shareholders in a general meeting is a valuable corporate governance practice. To this end, during the previous eight AGMs, the Company had made available a non-mandatory ballot through the postal system / internet as a channel for all shareholders to informally express their views on the resolutions tabled before the shareholders in the AGM. The non-mandatory ballot has helped the Company assess the general view of the absentee shareholders on the resolutions set out in the Notice.

The non-mandatory ballot through the internet is not in substitution of, or in addition to, your right as a shareholder to vote at the AGM.

The non-mandatory ballot through the internet will not have the force of a legally binding vote and will not be construed as a vote at the AGM. The result of the non-mandatory ballot through the internet will not impact the votes cast at the AGM. For your vote to be valid, ensure that you are present in person or send the nominated proxy in person to attend the AGM.

Please note that regardless of you participating in the non-mandatory ballot through the internet, you as a shareholder are entitled to attend and vote at the AGM or to appoint a proxy to attend the AGM.

The Company has appointed Parameshwar Hegde, Practicing Company Secretary, who in the opinion of the Board is a duly qualified person, as the Scrutinizer for the non-mandatory ballot through the internet. The Scrutinizer will collate all non-mandatory ballots and the results of the same will be disclosed at the AGM proceedings.

INSTRUCTIONS FOR PARTICIPATING IN THE NON-MANDATORY BALLOT THROUGH THE INTERNET To access the non-mandatory ballot portal, use the following URL :

From Infosys website : www.infosys.com/agm2011

From Karvy website : http://karisma.karvy.com/infosys

HOW TO VOTE1. Shareholders will have to choose between three modes of holding – holding shares in physical form, holding shares in a demat account with

a depository participant connected to National Securities Depository Limited (NSDL) or holding shares in a demat account with a depository participant connected to Central Depository Services (India) Limited (CDSL).

2. Investors having a demat account with a depository participant connected to NSDL : Enter the depository participant identification number (DP ID) and client identification number (Client ID). Example : DP ID – IN302902 and Client ID – 11111111

3. Investors having a demat account with a depository participant connected to CDSL : Enter the 16-digit demat account number. Example : Demat Account Number is 1234567832145678

4. Investors holding shares in physical form : Enter the registered folio number. Example : Folio – ITL000123

5. If valid entry as per step 2, step 3 or step 4 above is done, you will be able to cast your ballot. Cast your ballot by clicking on the check box corresponding to each resolution and make your selection by choosing ‘In Favor’, ‘Against’ or ‘Abstain’ for each resolution. Alternatively, you can also click the SELECT ALL button and cast your ballot.

6. Click the SAVE / NEXT button to preview the options that you had selected in the previous step.

7. Click the SUBMIT button to cast your vote for the online ballot.

8. Investors may cast their non-mandatory ballot only once on a resolution, using a specific demat account. If an investor has multiple demat accounts, he / she will be able to participate in the non-mandatory ballot separately, for each demat account, by using the respective DP ID and Client ID.

9. The portal will be open for voting from June 1, 2011 to June 9, 2011 between 10 a.m. to 5 p.m. IST.


PROXY FORMThirtieth Annual General Meeting – June 11, 2011

Regd. Folio no. / DP Client ID

I / We ………………………………………......................…………………….…. of …………………………….............…… in the district of

…….............……..................……. being a member / members of the Company hereby appoint …………...............…………….....……… of

……….………………..………….. in the district of ……………………………………. or failing him / her .……...…...........……………...of

………………………….....……… in the district of ……………………….…….………….. as my / our proxy to vote for me / us on my / our

behalf at the THIRTIETH ANNUAL GENERAL MEETING of the Company to be held at the Christ University Auditorium, Hosur Road,

Bangalore 560 029, Karnataka, India, at 3 p.m. IST on Saturday, June 11, 2011 and at any adjournment(s) thereof.

Signed this …………………………………. day of ………………………… 2011.

…………………………………

Fifteen Paise Revenue Stamp

Signature of the member

Note : This form, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Office of the Company, not less than 48 hours before the meeting.

....…......................................................................................... Please tear here ....….................................................................................….......


ATTENDANCE SLIPThirtieth Annual General Meeting – June 11, 2011

Regd. Folio no. / DP Client ID

No. of shares held

I certify that I am a member / proxy for the member of the Company.

I hereby record my presence at the THIRTIETH ANNUAL GENERAL MEETING of the Company at the Christ University Auditorium, Hosur Road, Bangalore 560 029, Karnataka, India, at 3 p.m. IST on Saturday, June 11, 2011.

………………………………… …………………………………Name of the member / proxy Signature of the member / proxy(in BLOCK letters)

Note : Please fill up this attendance slip and hand it over at the entrance of the meeting hall. Members are requested to bring their copies of the Annual Report to the meeting.

Route map

Map not to scale

Christ University AuditoriumHosur Road,Bangalore 560 029Karnataka, India.

30 years of InfosysAnnual Report 2010-11

30 years of InfosysAdditional Information 2010-11

00-Cover-Page.indd 1 5/25/2011 2:03:34 PM

30 years of Infosys

Infosys Additional Information 2010-11

“Posterity will not excuse you if you did not dream big. You owe it to your

customers, your colleagues, your investors, and the society. Every major

civilization, every great advance in science and technology, and every great

company is built on a big dream.”


30 years of InfosysTurning thirty is a good time to reminisce. And reflect. And look

ahead.

Thirty is one of those rare junctures when you have both youth

and experience on your side. Thus, as Infosys completes thirty, we

talk about the pleasures and pains of starting small; the genesis

of a value-based organization culture; personal goals turning

into company milestones; sharing wealth and caring for society;

learning and educating; building infrastructure for one and all;

agreeing to disclose and refusing to compromise on quality; and

above all, believing in a vision and leading by example to see it

become reality.

Thirty is also the time to break new ground.

This Annual Report is printed on 100% recycled paper as certified by the U.K.-based National Association of Paper Merchants (NAPM) and France-based Association des Producteurs et des Utilisateurs des papiers et cartons Recyclés (APUR).

30 years of Infosys


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30 years of Infosys


Awards for Excellence 2010-11 .............................................. 2

Ratio analysis ........................................................................ 7

Auditors’ report ..................................................................... 9

Balance Sheet .....................................................................12

Profit and Loss account ......................................................13

Cash Flow statement .........................................................14

Schedules ............................................................................15

Financial statements as per IFRS ....................................... 35

Additional information ........................................................ 64

Select historical data .......................................................... 65

Revenue segmentation ...................................................... 66

Statutory obligations ........................................................... 67

Human resource valuation .................................................. 69

Value-added statement ...................................................... 70

Brand valuation ................................................................... 71

Economic Value-Added (EVA®) statement .......................... 72

Balance sheet including intangible assets .......................... 73

Intangible assets score sheet ............................................ 74

ValueReporting™ ............................................................... 76

Management structure ...................................................... 78

Infosys Foundation ............................................................. 79

Report on health, safety and environment ........................ 80

Financial statements (unaudited) ....................................... 82

Extract of audited IFRS financial statements ..................... 91

Global presence .................................................................. 92

Contents

2 | Awards for Excellence


Awards for Excellence 2010-11

The Pursuit of Excellence forms an integral part of our core values. At Infosys, employees have made excellence a habit. The abundance of talent

within the organization and our employees’ single-minded determination to be the best ensure that we are ahead of our competition. This has,

over the years, earned us the trust and confidence of our stakeholders.

The Infosys Awards for Excellence seeks to reward those employees who have remained true to our core values. They were initiated in 1995 as

the “Managerial Excellence Awards”. Over the years the awards have grown to exemplify much of what it means to be an Infoscion. The awards

recognize the vision, ability and hard work of those who have enriched us with their valuable contributions. The Awards for Excellence, 2010,

were given at the organizational and regional levels.

Organizational Level

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”

− Aristotle

Account Management (Large Account)Real Excellence in Engagement and DeliveryAtul Kumar JainDevasenapathy Murugappan MuthuMilind Vasantrao PandeMohit SaxenaNageswara Rao V. ChilamkurthiRavi Kumar DikshitSenthil Nathan M.Sunil Shivappa

The Band of AchieversAnindya GhoshKrishna Kowndinya AyyalasomayajulaPrashant R. KhadilkarPriya ChanderRamkumar AkilenSatyanarayana N. G.Shyamsundar V.Swaminathan Sundaresan

Account Management (Small Account)Global Power Leader Account Management Team

Abhishek ArunAlagappan RmChinmay JainDevendra SinghPrabhat Kumar Das Prashant Bandopant PendseRohit AgarwalRohit Kedia

Brand ManagementInfosys iEngage Digital Consumer Platform LaunchAkhil SrivastavaArun Kumar GanesanBalaji SampathHarini Suresh BabuRahul S.Sumit Virmani

Oracle Practice at Enterprise SolutionsAmandeep Singh SyaliJeanne S. WillisPriyanka ChandraRishi Raj PaulSteven Charles TunleyVarinder Verma

Client DelightOnline Store for a Consumer Electronics MajorDivya VijayammaFeby DenahonJamal Basha PesaravaiKishore Raghavendra KamathRaghavendra GandadiRajesh J. ThekkekkaraRuby MottackelSuchitra

Awards for Excellence | 3


Application and Infrastructure Support for the E-commerce PlatformAnil Kumar B.Ashutosh AgrawalBeulah VejendlaManga RachakondaMohit AgarwalPrakash Kumar AgarwalSreekanth Bajagur Panduranga RaoVishal Miglani

Department ManagementThe Quality Department

Development Center (Large)The Hyderabad Development Center

Development Center (Small)The China Development CenterThe Mangalore Development Center

Infosys Champion – Domain ChampionGautam Bandyopadhyay

Infosys Champion – Technology ChampionChandan Mahadeo GokhaleJitendra Pal Thethi

Innovation – InitiativesInfosys MaskIT Team Enabling Differentiator and Non Linear GrowthAshutosh SaxenaBalaji RaghunathanMandar Sharadchandra JoshiRamakrishna Reddy G.Venugopal SubbaraoVishal Krishna Saxena

Innovation – Thought LeadershipIntelligent Power StripKumar PadmanabhSanjoy Paul

Internal Customer DelightDelivery Risk Management GroupAkhil GoyalBinesh T. Narayan NairDharmalingam T.Kalaivani K. G.Lakshmidevi DhakshanamoorthyTaher Nuruddin Kapadia

People DevelopmentEngineering Competency Development as a Strategic Business DifferentiatorNiranjan Vijay AwatiShivakumar Jayappa AddamaniSridhar GatpaSriranga Ramanuj Acharya K. N.Sumana Y. S.Swetha V. C.Victor Sundararaj

People Integration at McCamish Systems LLCChristina StephensonDependra MathurMegan GrovesNeeti KhankaPeddity Samuel AbhishekSuperna Shankar

Program ManagementApplication Support and Maintenance Program for Leading Apparel RetailerAnusheel GuptaAtul AgarwalDeepanjan DebDhayal Prasad SubramanianMalini B. N.Namita Kumar ShettigarSivasankar StalinSrinivasa N. KaranthSriram SubramanianSuneel Govindrao Kulkarni

Service Assurance Platform Upgrade for a Leading Australian TelcoAloke Kumar DeyAmol Dnyaneshwar GhongadeBhargava Chakravarthy NimmarajuDitesh ChohanNagaiah PasiNaveen Kumar L.Srinivas Babu VaddepatiSumita SrivastavaSusanto Kumar DeVeera Anjani Kumar Valivarthi

Project Execution ExcellenceSigma Base Development and ImplementationHisaya KusagawaPranav Shekhar JhaRaghu S.Samir Y. VaidyaShreyas PrabhuSrinivas S. DeshpandeSuchand R. S.Vivek Kumar SinghVivek SinhaArindam Deb

Brochure SolutionAmbili K.Aparna SuriyanarayananArul Rosaline Pradipa S.Biju NambisanDivya Veerarahavalu MuthukrishnanRajesh KrishnanRavishankar R.Renjith JohnSrinivasan NambiVishnuvardhana V. V.

Billing Setup Module & Tariff Billing ToolDeepman SinghGourav SoodKapil AhujaMayank MehrotraSaurabh ChaudharyShweta AroraSushant Mohan SaxenaTaranjit SinghVishal Aggarwal

Material Planning Toolkit Development for a Large Food and Beverage MajorJoy SenPrabhat KhareSathish Babu SridharanSaurabh AgarwalShalini Mandara RamachandraShashi Kiran A. R.Shweta MenonSridevi ChattaSuneetha Chittamuri

Local Application Maintenance and Support for an Auto Giant in JapanMadan Mohan JanaMadona KumarMahesh Kumar DamaniManoj Kumar GoyalNibedita PandaRashmi N.Tao GuoVivek SinhaYuji Yamaguchi

Business Insight & AnalyticsAnwar Abdu MohamedAromal Beena SivadasanAshwini Kumar Gopalkrishna ShenoyMinhaj AshrafMukund NairRamu BalakrishnanSakalya Dattaprasad KulkarniSandesh Venkatesh ShanbhagSiddharth Prakash WarangRoshan Lawrence D’ Souza

Sales ManagementApplication and Infrastructure Support for the World’s Leading Software CompanyAnand SwaminathanAnant Raghavendra AdyaBurhanuddin JafferNimesh KochetaRaju P. KattadyRama Murthy PrabhalaSanthanakrishnan S.Venkatesh R. L.

Social ConsciousnessNorth Karnataka Flood Relief ProgramArchana N.Arun Vijaya KumarHanamant Baburao KulkarniManjunath GopiPavan MailwarVasudevrao Madhukarrao Deshpande

Technology ExcellenceCloud ComputingHamsaraj Laxman ShettyRajkumar R.Venkatesh Nagaraju Sagare

The Infosys Customer Satisfaction Survey 2010The Manufacturing IBU (MFG)The Product Lifecycle and Engineering Solutions (PLES) Unit



The Infosys Code ChampionCharan Kumar VudaSrinivas KsheerasagaraSujaya Kumari S.

Unit ManagementThe Enterprise Solutions (ES) UnitThe Infosys BPOThe Retail, CPG, Logistics (RETL) Unit

Regional Level – First PrizeClient DelightMid-year Review ProgramAnshuk Anil JainDinesh ChekuriManeesh Rajesh Kumar ShrivastavaPrakash M.Sandeep BolukondaSrinivasan KaleSriuma ParimiWajid Hussain Mohammed

Service Assurance Platform Upgrade for a Leading Australian TelcoAloke Kumar DeyAmol Dnyaneshwar GhongadeBhargava Chakravarthy NimmarajuDitesh ChohanNaveen Kumar L.Sumita SrivastavaSusanto Kumar DeVijendra Singh Rajput

Infosys Champion – Domain ChampionJayesh AmdekarSudripto De

Infosys Champion – Technology ChampionKiran K. S. R.

Innovation – InitiativesTransforming Drug Discovery through Biological Entity Management SystemAnirban GhoshKirti JindalKrutin Kumar BoloorNeppoliyan ThangaveluRamesh Krishnan BalakrishnanSunil Medagam

Internal Customer DelightClient Services Group Boot CampAnubhav PradhanManeesh Vinod BakhleNevil Jose PaulSatheesha B. N.Srikantan MoorthySuparna Shankar

Flourishing Ecosystem of New Business Offerings and Internal Adoption of Mobility Around Infosys mConnectKarthik G. V.Pallab SenPuneet GuptaRaghavendra D. HegdeSameer WadhwaVenkat Kumar Sivaramamurthy

People Development

Infosys China Education Center – JiaxingLuLu MaMurali Mohan K.Wei ShenXiuJuan ZhuYunZhi JiangZheng Zong

Remedy People Development ProgramAjay ManchandaniGagan AgrawalNagaraj Achutha PaiPiyush AgrawalSaumitra Bhalchandra KalikarSumeet Rajendra Das

Project Execution ExcellenceCustomer Marketing Group for a Fortune 500 Global Financial Services CompanyAmit Prakash GuptaBal Mukund ShuklaGopesh KumarHari ThachappillyHarshad Ravindra KhodkeHrishikesh Vijay ShirodkarKapil Mohan SingbalPriyank JainSandeep Nivritti LokhandeVijay Anand

Bottom Hole Assembly Drawing Application for an Oil Field Services CompanyAbhishek SaxenaAnimesh Kumar HazraCharly Arnold GeddamKrishna Kumar ArrepuMehul Vinod PatelNarasimha Murty BulusuSandeep GargSrinivasa Rao ChukkaSriram SundararajanUday Prasad Panday

Business Process Analysis and Technical DocumentationAastha Ashok ShanglooDilip Bansilal KalraPranay B. LohkareSangita Avadhut SatheSita Devi U. PillaySurendra BalusuVaibhav Mitrasen PatilVarun SinghVinaykumar Shrikant MhapankarYogesh Suresh Agrawal

Carrier Access Billing SystemGarima KhannaNitin Tularam MahajanPartha ChakrabortyPriya Jaysinh JoisherPushpak Dhanaraj DeoreSatyabrata BiswasShirish BansalVikash Kumar SinghYash Manohar GajpallaYogendra Jayprakash Dhruva

Railroad Shipment and Operations Application SupportGopinath D.Murali M.Naveen Guha Narain GovindarajuluNaveen Mysore SrinivasRajesh Velayudhan VeliyaveetilRohit TandonShubha S. D.Sovan Sunil PandaSudeendra NagarajSwarna Sankaran

Yard Planner 2.5 (YP 2.5)Arun C. B.Krishnan G. R.Rishikesh KumarShishir AlvaShrinivas N.Sovan Sunil PandaSudhir Sanjeeva Murthy Jajur

Distributor Connect ProjectDeepak GuptaLokesh GuptaNitesh MittalNoopur Narendra Kumar KothariRajesh M. P.Sanketh AcharyaShalini A.Sneha Ghanashyam RaikarSourav RoySuresh Prahlad Bharadwaj

Maintenance of Intermodal and Equipment DistributionDinesh Thurvas RavindranathGaurav RastogiGuiDan WuJigar DoshiKripa BhaarathPrem JaisinghaniSumit Mohan JhaSunish V.Suresh Mullappulli ChettoorVijayalakshmi Krishnamurthy

Oracle-based Financial Management Solution for a Payment Services MajorAnkur Ram Shankar SharmaBasavraj LoniDilip FauzdarHitesh Ashok MadanRaghavendra Rao Manjoji Rao Nagendra RaoRohit MohindruSachin Satyanarayan ChitlangeSagar Dwarkanath NavandarSowmya Varadarajan TrikkurTarika Jain

Awards for Excellence | 5


Patient Appointment Scheduling (PAS)Angeline Jeya Shanthi George Sargunar G.Anusha MuthukrishnanBharath Kumar BurlaGayathri MuruganHema Sampath KumarNaresh Kumar Venkatampalli VenkatesanRamnathan RavindranSenthil Murugan ManikantanTharani SathyanarayananYogarajan Gnanaprakasam Kumaran

Supply Chain SupportAjish MuraliJobin JohnManoj Kumar JainMukesh RalhanNirav Satish VikamshiNitin AggarwalShuchi BhandariSundeep ThirukovelaVidya S.Yashvanth Lohantha Shantharam

Leading Mortgage Insurer – Insurance Data Entry & AccountingJayakrishnan SasikumarKathiriki Sreenivas ReddyMurali M. S.Ravi Babu KolatiSree Lekshmi L. B.Sujith K. Shajee

Spectrum Internationalization (i18n) ProgramMayank JainNikhil GuptaNitin BansalPerminder Singh VohraPrashant JindalSatya Prabh KathooriaSaurabh KashyapSumit ChadhaVinay Prabhu M.Sudhir Srivastava

Social ConsciousnessHoPE Club – Service Beyond CharityAbhishek TiwariAyappa Nanjappa KongettiraDebasis KonarManoj S.Pritam Kumar SinhaRajesh Kumar SinghRamesh K. N.Shruthi Laxmain N.Sudhir Reddy DyapaVikas Mulla

Mamata Welfare SocietyBhaskara PeddanarappagariDhiraj Varma Budharaju K.Gayathri Devi KandukuriKankanala Sundeep ReddyNipun JainRama Murthy PrabhalaRambabu Sampangi KaipaRamesh IlluriSreevalli Lavanya ChintalapatiVeerabhadra Rao Chilukuri

Promoting Green Power in the CountryPraveen Gupta

SamarpanDeepak Kumar BaroliaJayanthi Huttinagadde VenkatachalaiahKiran N. G.Kusuma Kumari C.Lakshmi Kamala Wunnava VenkataMaheshkumar BasavarajappaPankaj TiwariSuja WarriarSwapnil Ramesh ShahVasanth J.

Systems and Processes A System for Co-designing Industry Electives with AcademiaAnoop SinghManishaMukundh NagarajanRenu VadhvaniSoudamini Randhir PatilSrinagesh Chatarajupalli

Content Management System and Content Delivery Network for Infosys WebsiteAjith Kumar K. G.Gaurav KumarManish KumarSachin Prakash SanchetiSuresh Selvaraj

IS EfficiencyGeetha DasJasbir Kaur SaundJolly SamarNiraj Kumar VermaRajkumar S.Suresh B. K.

Software Asset Management (SAM) Anup Arjunrao MoreBhaskaran SrinivasanChandrakanth DesaiDeepak A. G.Shreshta ShyamsundarYoganand T. D.

Technology Excellence Digital Marketing PlatformAjit SagarSenthil Kumar KrishnasamyShailesh Leslie AlbuquerqueTharanian MahendranVishvanath Mahesh Muthyala

Intelligent Power Plant ControllerKarthikeyan KrishnamoorthyBijoy AlokkanRahul Kumar

The Infosys Code ChampionAniket Dinkarrao PatilBhabani Sankar PattanayakOmkar Deepak MuranjanSachin Shivdatt JoshiYash Manohar Gajpalla

Value ChampionImproving the Quality of Life of Filariasis PatientsNaveen Krishna Tarur

Regional Level – Second PrizeClient DelightGlobal Pre-paid Interactive Portfolio for a Global Financial Services CompanyAmit LalChandra Mohan NandakumarDhinakaran T.Jithesh E. P.Muthu Kumar NatarajanSivakumar SwaminathanSunil FernandesVivek Dwivedi

Siebel Support Project for a Large Telecom Provider in Asia-PacificAnshul DubeyNaga Dolanandam PitchukaPradeep Reddy NalliahgariRama Rao GanapatineediRasheed Abdul MohammadSwapna ChandaTulasi CherukuriVimlesh Ankur

Infosys Champion – Domain ChampionAbhishek SabharwalAmit LohaniKailash Badrinarayan Samdani

Infosys Champion – Technology Champion Venu Gopala Krishna Kishore AnumakondaVikram SrivastavaJai GaneshAnand Avinash TambeyTarun LalwaniSidharth Subhash Ghag

Innovation – InitiativesFinacleTM Advisor from MS Competency Group Finacle ArchieAnushree ChhariaRemya N. S.Sandeep S.Sanjay KannanSivasubburaj PalrajSrinivas Gali

FlyppTM – White Labeled Mobile Applications StoreBhaskara Krishna HegdeKush KochgawayPuneet SrivastavaRohit SampigeSameer Laxman ShettySanjeev Kapoor



Infrastructure Transformation ServicesBasab BandyopadhyayGuruprakash Pai KarkalaMadhukar I. B.Ramshankar RamdattanRohit Nand

Infy-on-the-goDeepak Nagesh MurdeshwarMandar Kumar AnandaShailesh Mahadev KawaleSrinivas SreekumarVijay NatarajanVinod Sai G.

iNSTAF – Infosys Network Services Test and Automation FrameworkManjunath D. KulkarniNithin JoseSanjay Kumar MisraShaijo MohanSourabh PandeySyeda Irrum Shabbir

Internal Customer DelightInfosys Tools Group Deployment TeamBhakti Neeladhar SalianNaresh Balaram ChoudharySandeep ChauhanSnehashree M. K. PrasadSrinivasa Sujit RaoVasudeva Murthy Niranjan

Mysore Food Committee – Creating Options and DelightDinesh SinghJohn Britto JesurajSarit PoriaSubrata DasSuhail MuhammedVidyabhushana Hande

New Engagement Models Corporate InitiativeAmit MisraAmod Bandu KumbharAsha KurupLakshmi Narasimha Rao GundaSaji Antony K.Vijaya Sorna Kumar Namasivayam

People DevelopmentDirection Forward InitiativeAktharunnisa Syed HasinuddinAntony MenacherryKrithika RamachandranMadhu Sudhan R.Narayanan ShanmugamSathya Ganesh

Finance Center of Excellence – Empowering Through Collective LearningAnna TumidajewiczDivya GJairam Raghunatha RaoMeenu VermaMichal CieslakSunita Ramachandra Bhat

Social Consciousness SNEHAM TeamAnbulingom T.Deeppak Chakravarthy KambarayarDevaraj BalakrishnanDharmambiha D. R.Lakshmi Narayanan R.Lilly Priyadarshini L.Sivakumar GanesanThothadri SrinivasanVasanth S.Vinoth Kumar

Social Forum to Enable the NeedyAnil Kumar G. R.Darshana Ganesh MuruvandaJitendra KumarMajur Avinash PuranikManoj AggarwalMrithyunjay D. S.Rajagopalan P.Subrata DasVidya Rajesh PaliwalVivek Gajanan Hanchate

Spark Hyderabad – Raising Aspirations of StudentsAnand Rajendra KumarBrijesh ChawdaMani Sri VellankiNarsimha Rao MannepalliRajanish VaidyaSasank Sekhar NayakSrinagesh ChatarajupalliSudheer Reddy KolaVenkata Bhanu Prasad Tolety

Vinesh Kumar R.D

Spark – Raising Aspirations of Students @ ChandigarhAnil Kumar GuptaArvind RainaDeepak BhallaDharm Veer SinghJeet Vikram MinhasKanika SharmaNikhil JainPankaj BhartiRicha AroraVishal Bhat

SPRING Infosys ChinaDhanesh SubramanianGopi Chand PaladuguJianYe ZhuJin XuLiLi LuLom Harshni ChauhanPorna PramanikWeiDong LiXiaoLei LiuYuMei Li

Team AkankshaAkshaya Kumar SatpathyAmrita DeoBasudev MohantyDebi Prasanna PatnaikManish Kumar PandeyNitiv NigamPrashant Kumar SahuRamakrishna SahooSanjaya Kumar MoharanaSanjeeb Panda

Systems and ProcessesInfosys Tools Group Systems and Processes TeamAmit GulatiNaresh Balaram ChoudharyPallavi BommaPrabhat Ranjan KumarRaghavendra S.Srinivasa Sujit Rao

Predictability Sustainability Profitability and De-risking model for Revenue Recognition for Infosys and Group of CompaniesGopalakrishnan RamachandranMohammed Shazin ThottathilNarasimharao V. V. S. V. R KompellaPrem Joseph PereiraRavi Krishnan SubramonySandip Kumar Agarwal

The Infosys Code ChampionAkshay Gangadhar ShindePraveen Kumar BeharaRohit SapruThangamani S.

Ratio analysis | 7

Infosys Additional information 2010-11

Ratio analysis

2011 2010 2009Ratios – financial performance Export revenue / total revenue (%) 97.66 98.73 98.72Domestic revenue / total revenue (%) 2.34 1.27 1.28Software development expenses / total revenue (%) 56.20 54.68 55.00Gross profit / total revenue (%) 43.80 45.32 45.00Selling and marketing expenses / total revenue (%) 4.80 4.61 4.60General and administration expenses / total revenue (%) 5.85 5.90 6.32Selling, General and Administrative (SG&A) expenses / total revenue (%) 10.65 10.51 10.92Aggregate employee costs / total revenue (%) 49.08 48.96 49.20Operating profit (PBIDTA) / total revenue (%) 33.15 34.82 34.08Depreciation and amortization / total revenue (%) 2.92 3.82 3.42Operating profit after depreciation and interest / total revenue (%) 30.23 31.00 30.66Other income / total revenue (%) 4.52 4.30 2.48Provision for investments / total revenue (%) – (0.04) –Profit before tax / total revenue (%) 34.75 35.35 33.13Tax / total revenue (%) 9.37 8.12 4.42Effective tax rate – Tax / PBT (%) 26.96 22.98 13.33Profit after tax (2) / total revenue (%) 25.38 27.22 28.72Ratios – Balance Sheet Debt-equity ratio – – –Current ratio 5.22 4.46 4.72Days Sales Outstanding (DSO) 61 56 61Cash and equivalents / total assets (%) (1) 61.94 66.48 57.65Cash and equivalents / total revenue (%) (1) 60.21 70.03 50.78Capital expenditure / total revenue (%) 4.54 2.75 5.81Operating cash flows / total revenue (%) 16.82 27.80 25.42Depreciation / average gross block (%) 11.90 13.17 13.23Technology investment / total revenue (%) 2.25 2.12 2.70Ratios – returns PAT (2) / average net worth (%) 27.69 28.89 37.18ROCE (PBIT / average capital employed) (%) 37.58 37.25 42.85Return on average invested capital (%) (1) 67.73 68.75 78.84Capital output ratio 1.08 1.05 1.29Invested capital output ratio (1) 3.01 2.81 3.03Value added / total income (%) 82.99 84.45 83.68Enterprise-value / total revenue (x) 6.73 6.40 3.23Dividend / adjusted public offer price (3) (%) 4,042 3,368 3,166Market price / adjusted public offer price (%) 436,723 3,52,465 1,78,800Ratios – growth Overseas revenue (%) 18.78 4.33 29.65Total revenue (%) 20.08 4.32 29.50Operating profit before depreciation (%) 14.32 6.57 39.15Net profit (2) (%) 11.95 (1.10) 30.18Net profit after exceptional item (%) 11.03 (0.27) 30.18Basic EPS (2) (%) 11.85 (1.26) 29.92Basic EPS after exceptional item (%) 10.91 (0.42) 29.92Ratios – per share Basic EPS (2) (R ) 112.26 100.37 101.65Basic EPS after exceptional item (R ) 112.26 101.22 101.65Basic cash EPS (2) (R ) 125.14 114.46 113.77Basic cash EPS after exceptional item (R ) 125.14 115.30 113.77Price / earnings, end of year (2) 28.87 26.06 13.02Price / cash earnings, end of year (2) 25.90 22.85 11.64PE / EPS growth (2) 2.44 (20.68) 0.44Book value (R ) 426.73 384.01 310.90Price / book value, end of year 7.60 6.81 4.26Dividend per share (par value of R 5/- each) (3) 30.00 25.00 23.50Dividend (3) (%) 600 500 470Dividend payout (%) (3) (4) 29.34 26.93 26.26Market capitalization / total revenue, end of year (x) 7.33 7.10 3.74

Notes : The ratio calculations are based on standalone Indian GAAP financial statements. (1) Investments in liquid mutual funds and certificates of deposit have been considered as cash and cash equivalents for the purpose of the above ratio analysis. (2) Before exceptional item (3) Excludes special dividend for fiscal 2011 (4) Calculated as a % of the consolidated profits of the Infosys group

8 | Ratio analysis


Ratio analysis

(1) Investments in liquid mutual funds and certificates of deposit have been considered as cash and cash equivalents for the purpose of the above ratio analysis. (2) Before exceptional item (3) Excludes special dividend for fiscal 2011

Auditors’ report | 9


We have audited the attached Balance Sheet of Infosys Technologies Limited (‘the Company’) as at March 31, 2011, the Profit and Loss account of the Company and the Cash Flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors’ Report) Order, 2003 (‘the Order’), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (‘the Act’), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that :

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) on the basis of written representations received from the directors, as at March 31, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as at March 31, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Act;

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

(ii) in the case of the Profit and Loss account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.



Bangalore15 April 2011



Auditors’ report to the members of Infosys Technologies Limited

10 | Auditors’ report


Annexure to the auditors’ report

The Annexure referred to in our report to the members of Infosys Technologies Limited (‘the Company’) for the year ended March 31, 2011. We report that :

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) The Company is a service company, primarily rendering information technology services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) The Company has granted a loan to a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956 (‘the Act’). The maximum amount outstanding during the year was R 47.71 crore and the year-end balance of such loan amounted to R 22.69 crore. Other than the above, the Company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) In the case of loan granted to the body corporate listed in the register maintained under Section 301 of the Act, the borrower has been regular in the payment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under Section 301 of the Act.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of R 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

(viii) The Central Government of India has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act for any of the services rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees’ State Insurance, Customs duty and Excise duty.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues were in arrears as at March 31, 2011 for a period of more than six months from the date they became payable.

Auditors’ report | 11


(b) According to the information and explanations given to us, there are no material dues of Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of Income tax, Sales tax, and Service tax, have not been deposited by the Company on account of disputes :

Name of the statute Nature of dues Amount (R crore)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act,1961Fringe benefit tax and

interest demanded 2.28 Assessment year 2008-2009Commissioner of Income Tax

(Appeals), Bangalore

Income Tax Act,1961Income-tax, interest and

penalty demanded 228.19 (1) (2) Assessment year 2007-2008Commissioner of Income Tax


Income Tax Act,1961Interest on Income-tax

demanded 0.51 Assessment year 2006-2007Commissioner of Income Tax


KVAT Act, 2003Sales tax, interest and

penalty demanded 24.53 (1) April 2005 to March 2009 High Court of KarnatakaCentral Sales Tax Act, 1956 Sales tax demanded 0.31 (1) (2) April 2007 to March 2008 High Court of Andhra PradeshService tax Service tax demanded 2.58 January 2005 to March 2009 Appellate Tribunal, Bangalore

Service taxService tax and penalty

demanded 23.15 February 2007 to March 2009 Appellate Tribunal, BangaloreNotes : (1) Net of amounts paid under protest. (2) A stay order has been received against the amount disputed and not deposited.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) The Company has not raised any funds on short-term basis.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.



Bangalore15 April 2011



12 | Standalone financial statements


Balance Sheet

As at March 31, in r crore

Schedule 2011 2010SOURCES OF FUNDSSHAREHOLDERS’ FUNDS

Share capital 1 287 287Reserves and surplus 2 24,214 21,749

24,501 22,036DEFERRED TAX LIABILITIES 5 176 232

24,677 22,268APPLICATION OF FUNDSFIXED ASSETS 3

Original cost 6,934 6,357Less : Accumulated depreciation and amortization 2,878 2,578Net book value 4,056 3,779Add : Capital work-in-progress 499 409

4,555 4,188INVESTMENTS 4 1,325 4,626DEFERRED TAX ASSETS 5 406 313CURRENT ASSETS, LOANS AND ADVANCES

Sundry debtors 6 4,212 3,244Cash and bank balances 7 13,665 9,797Loans and advances 8 4,867 3,898

22,744 16,939LESS : CURRENT LIABILITIES AND PROVISIONS

Current liabilities 9 1,880 1,763 Provisions 10 2,473 2,035

NET CURRENT ASSETS 18,391 13,141 24,677 22,268

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 23Note : The schedules referred to above are an integral part of the Balance Sheet.


for B S R & Co. Chartered AccountantsFirm’s Reg No : 101248W














K. DineshDirector






Standalone financial statements | 13


Profit and Loss account

For the year ended March 31, in r crore, except per share data

Schedule 2011 2010Income from software services and products 25,385 21,140Software development expenses 11 14,267 11,559GROSS PROFIT 11,118 9,581Selling and marketing expenses 12 1,219 974General and administration expenses 13 1,485 1,247

2,704 2,221OPERATING PROFIT BEFORE DEPRECIATION 8,414 7,360Depreciation 740 807OPERATING PROFIT 7,674 6,553Other income, net 14 1,147 910Provision for investments – (9)NET PROFIT BEFORE TAX AND EXCEPTIONAL ITEM 8,821 7,472Provision for taxation (refer to note 23.2.11) 15 2,378 1,717NET PROFIT AFTER TAX BEFORE EXCEPTIONAL ITEM 6,443 5,755Income on sale of investments, net of taxes (refer to note 23.2.25) – 48NET PROFIT AFTER TAX AND EXCEPTIONAL ITEM 6,443 5,803Balance brought forward 13,806 10,305Balance in Profit and Loss account 20,249 16,108AMOUNT AVAILABLE FOR APPROPRIATION 20,249 16,108Dividend

Interim dividend 574 57330th year special dividend 1,722 –Final dividend 1,149 861

Total dividend 3,445 1,434Dividend tax 568 240Amount transferred to general reserve 645 580Amount transferred to capital reserve – 48Balance in Profit and Loss account 15,591 13,806

20,249 16,108EARNINGS PER SHAREEquity shares of par value R 5/- each Before exceptional item

Basic 112.26 100.37Diluted 112.22 100.26

After exceptional itemBasic 112.26 101.22Diluted 112.22 101.10

Number of shares used in computing earnings per share (1)

Basic 57,40,13,650 57,33,09,523Diluted 57,42,01,958 57,39,49,631

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 23 Notes : The schedules referred to above are an integral part of the Profit and Loss account. (1) Refer to note 23.2.19



Natrajh RamakrishnaPartnerMembership No. 32815












K. DineshDirector








Cash Flow statement

For the year ended March 31, in r crore

Schedule 2011 2010CASH FLOWS FROM OPERATING ACTIVITIESNet profit before tax 8,821 7,472Adjustments to reconcile net profit before tax to cash provided by operating activities

Depreciation 740 807Provision for investments – (9)Interest and dividend income (1,086) (844)Effect of exchange differences on translation of deferred tax liabilities (6) –Effect of exchange differences on translation of foreign currency cash and cash equivalents (5) 68

Changes in current assets and liabilitiesSundry debtors (968) 146Loans and advances 16 (704) (368)Current liabilities and provisions 17 234 236

7,026 7,508Income taxes paid 18 (2,756) (1,653)NET CASH GENERATED BY OPERATING ACTIVITIES 4,270 5,855CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets and change in capital work-in-progress 19 (1,152) (565)Investments in subsidiaries 20 (a) (77) (120)Investment / (Disposal) of other securities 20 (b) 3,378 (3,497)Interest and dividend received 21 1,086 831

CASH FLOWS FROM INVESTING ACTIVITIES BEFORE EXCEPTIONAL ITEM 3,235 (3,351)Proceeds on sale of long-term investments, net of taxes (refer to note 23.2.25) – 53

NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES 3,235 (3,298)CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of share capital on exercise of stock options 24 88Repayment of loan given to subsidiary 20 (c) 14 5Dividends paid including residual dividend (3,156) (1,346)Dividend tax paid (524) (228)

NET CASH USED IN FINANCING ACTIVITIES (3,642) (1,481)Effect of exchange differences on translation of foreign currency cash and cash equivalents 5 (68)NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 3,868 1,008CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 11,297 10,289CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 22 15,165 11,297SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 23

Note : The schedules referred to above are an integral part of the Cash Flow statement.



Natrajh RamakrishnaPartnerMembership No. 32815












K. DineshDirector








Schedules to the Balance Sheet


As at March 31, 2011 20101 SHARE CAPITAL

AuthorizedEquity shares, R 5/- par value60,00,00,000 (60,00,00,000) equity shares 300 300

Issued, subscribed and paid upEquity shares, R 5/- par value (1) 287 287 57,41,51,559 (57,38,25,192) equity shares fully paid up

[Of the above, 53,53,35,478 (53,53,35,478) equity shares, fully paid up have been issued as bonus shares by capitalization of the general reserve]

287 287 Notes : Forfeited shares amounted to r 1,500/- (r 1,500/-) (1) For details of options in respect of equity shares, refer to note 23.2.10 and

also refer to note 23.2.19 for details of basic and diluted shares

2 RESERVES AND SURPLUSCapital reserve 54 6Add : Transferred from Profit and Loss

account – 48 54 54

Share premium account – Opening balance 3,022 2,925Add : Receipts on exercise of employee

stock options 24 87 Income tax benefit arising from exercise of stock options 11 10

3,057 3,022General reserve – Opening balance 4,867 4,287Add : Transferred from Profit and Loss

account 645 580 5,512 4,867

Balance in Profit and Loss account 15,591 13,806 24,214 21,749

3 FIXED ASSETS in r crore, except as otherwise stated

Particulars Original cost Depreciation and amortization Net book valueAs at

April 1, 2010

Additions during the

year

Deductions / Retirement

during the year

As at March 31,

2011

As at April 1,

2010

For the year

Deductions During the

year

As at March 31,

2011

As at March 31,

2011

As at March 31,

2010

Land : Freehold 178 228 – 406 – – – – 406 178Leasehold 138 – 3 135 – – – – 135 138

Buildings (1) (2) 3,209 323 – 3,532 737 227 – 964 2,568 2,472Plant and machinery (2) (3) 1,149 147 144 1,152 597 215 144 668 484 552Computer equipment (2) (3) 1,037 251 196 1,092 882 186 196 872 220 155Furniture and fixtures (2) (3) 629 69 100 598 347 112 100 359 239 282Vehicles 5 2 – 7 3 – – 3 4 2Intellectual property rights 12 – – 12 12 – – 12 – – 6,357 1,020 443 6,934 2,578 740 440 2,878 4,056 3,779Previous year 5,986 787 416 6,357 2,187 807 416 2,578 3,779

Notes : (1) Buildings include r 250/- being the value of 5 shares of r 50/- each in Mittal Towers Premises Co-operative Society Limited. (2) Includes certain assets provided on operating lease to Infosys BPO, a subsidiary. Refer to note 23.2.6 for details (3) During the year ended March 31, 2011 and March 31, 2010, certain assets which were old and not in use having gross book value of r 440 crore and r 387 crore respectively (net book value nil) were retired.


As at March 31, 2011 20104 INVESTMENTS (1)

Long-term investments – at costTrade (unquoted)

Other investments 6 6Less : Provision for investments 2 2

4 4Non-trade (unquoted)

SubsidiariesInfosys BPO Limited (2)

3,38,22,319 (3,38,22,319) equity shares of R 10/- each, fully paid 659 659Infosys Technologies (China) Company Limited 107 65Infosys Technologies (Australia) Pty. Limited1,01,08,869 (1,01,08,869) equity shares of AUD 0.11 par value, fully paid 66 66Infosys Consulting, Inc., U.S.5,50,00,000 (5,50,00,000) common stock of US$ 1.00 par value, fully paid 243 243Infosys Technologies, S. de R. L. de C. V., Mexico 54 40Infosys Technologies Sweden AB1,000 (1,000) equity shares of SEK 100 par value, fully paid – –Infosys Tecnologia do Brasil Ltda1,45,16,997 (1,07,16,997) shares of BRL 1.00 par value, fully paid 38 28Infosys Technologies (Shanghai) Company Limited 11 –Infosys Public Services, Inc. 1,00,00,000 (1,00,00,000) common stock of US$ 0.50 par value, fully paid 24 24

1,202 1,125Current investments – at the lower of cost and fair value

Non-trade (unquoted)Liquid mutual fund units – 2,317Certificates of deposit 119 1,180

119 3,497 1,325 4,626

Aggregate amount of unquoted investments 1,325 4,626Notes : (1) Refer to note 23.2.15 for details of investments (2) Investments include 6,79,250 (13,36,331) options of Infosys BPO limited




As at March 31, 2011 20105 DEFERRED TAXES

Deferred tax assetsFixed assets 234 201Sundry debtors 19 28Other assets 153 84

406 313Deferred tax liabilitiesBranch profit tax 176 232

6 SUNDRY DEBTORS (1)

Debts outstanding for a period exceeding six months

Unsecured Considered doubtful 64 79

Other debtsUnsecured

Considered good (2) 4,212 3,244Considered doubtful 19 21

4,295 3,344Less : Provision for doubtful debts 83 100

4,212 3,244(1) Includes dues from companies where directors are

interested 2 11(2) Includes dues from subsidiaries

(refer to note 23.2.7) 72 56

7 CASH AND BANK BALANCES (1)

Cash on hand – –Balances with scheduled banks

In current accounts (2) 197 153In deposit accounts 13,024 8,868

Balances with non-scheduled banksIn current accounts 444 776

13,665 9,797(1) Refer to note 23.2.12 for details of balances with

scheduled and non-scheduled banks(2) Includes balance in unclaimed dividend account

(refer to note 23.2.23.a) 3 2

8 LOANS AND ADVANCESUnsecured, considered good

Loans to subsidiary (refer to note 23.2.7) 32 46Advances

Prepaid expenses 52 25For supply of goods and rendering of services 50 5Advance to gratuity trust and others – 2Withholding and other taxes receivable 516 321Others 10 13

660 412Unbilled revenues 1,158 789Advance income taxes 924 641Interest accrued but not due 14 14Loans and advances to employees

Housing and other loans 42 38Salary advances 84 62

As at March 31, 2011 2010Electricity and other deposits 60 60Rental deposits 18 13Deposits with financial institutions (refer to note 23.2.13) 1,844 1,781Mark-to-market gain on forward and options contracts 63 88

4,867 3,898Unsecured, considered doubtful

Loans and advances to employees 3 2 4,870 3,900

Less : Provision for doubtful loans and advances to employees 3 2

4,867 3,898

9 CURRENT LIABILITIESSundry creditors

Goods and services (1) 85 96Accrued salaries and benefits

Salaries 42 25Bonus and incentives 363 421

For other liabilitiesProvision for expenses 537 375Retention monies 21 66Withholding and other taxes payable 292 235

Gratuity obligation – unamortized amount relating to plan amendment 22 26Others (2) 8 8

1,370 1,252Advances received from clients 19 7Unearned revenue 488 502Unclaimed dividend 3 2

1,880 1,763(1) Includes dues to subsidiaries (refer to note 23.2.7) 55 95(2) Includes deposits received from subsidiary (refer to note 23.2.7) 7 7

10 PROVISIONSProposed dividend 1,149 861Provision for

Tax on dividend 187 143Income taxes (1) 756 719Unavailed leave 303 239Post-sales client support and warranties (2) 78 73

2,473 2,035Notes : (1) Refer to note 23.2.11 (2) Refer to note 23.2.20

Schedules to the Balance Sheet

Loans and advances (contd.) :




Schedules to Profit and Loss account


For the year ended March 31, 2011 201011 SOFTWARE DEVELOPMENT

EXPENSESSalaries and bonus including overseas staff expenses 10,635 8,972Contribution to provident and other funds 378 244Staff welfare 53 28Technical sub-contractors – subsidiaries 1,568 1,210Technical sub-contractors – others 476 269Overseas travel expenses including visa 573 401Software packages for own use 320 309Third party items bought for service delivery to clients 139 17Communication expenses 39 45Computer maintenance 33 22Consumables 23 22Rent 25 22Provision for post-sales client support and warranties 5 (2)

14,267 11,559

12 SELLING AND MARKETING EXPENSESSalaries and bonus including overseas staff expenses 969 753Contribution to provident and other funds 7 4Staff welfare 2 2Overseas travel expenses 100 82Traveling and conveyance 4 3Commission charges 12 16Brand building 70 55Professional charges 13 22Rent 12 12Marketing expenses 14 11Telephone charges 14 11Printing and stationery 1 1Communication expenses 1 1Sales promotion expenses – 1

1,219 974

13 GENERAL AND ADMINISTRATION EXPENSESSalaries and bonus including overseas staff expenses 390 330Contribution to provident and other funds 25 17Professional charges 286 220Telephone charges 116 106Power and fuel 142 122Traveling and conveyance 79 58Overseas travel expenses 15 10Office maintenance expenses 188 136Insurance charges 24 23Printing and stationery 10 8Donations 1 43Rent 31 28Advertisements 6 3Repairs to building 44 33Repairs to plant and machinery 33 31

For the year ended March 31, 2011 2010Rates and taxes 48 26Professional membership and seminar participation fees 10 8Postage and courier 9 8Books and periodicals 3 3Bank charges and commission 1 2Auditor’s remuneration

Statutory audit fees 1 1Provision for bad and doubtful debts and advances 3 (1)Commission to non-whole-time directors 5 6Freight charges 1 1Research grants 14 25

1,485 1,247

14 OTHER INCOME, NETInterest received on deposits with banks and others (1) 1,068 743Dividend received on investment in liquid mutual fund units (non-trade unquoted) 18 101Miscellaneous income, net (2) 22 27Gains / (losses) on foreign currency, net 39 39

1,147 910 91 95

Notes : (1) Includes tax deducted at source (2) Refer to note 23.2.6 and 23.2.14

15 PROVISION FOR TAXATIONIncome taxes (1) 2,521 1,984MAT credit entitlement – (288)Deferred taxes (2) (143) 21

2,378 1,717Notes : (1) Refer to note 23.2.11 (2) Excludes translation difference of r 6 crore on deferred tax liabilities

General and administration expenses (contd.) :




Schedules to Cash Flow statement


For the Year ended March 31, 2011 201016 CHANGE IN LOANS AND ADVANCES

As per the Balance Sheet 4,867 3,898Less : Gratuity obligation – unamortized

amount relating to plan amendment (1) 22 26

Deposits with financial institutions included in cash and cash equivalents (2) 1,500 1,500Interest accrued but not due 14 14Loan to subsidiary 32 46Advance income taxes 924 641

2,375 1,671Less : Opening balance considered 1,671 1,303

704 368Notes : (1) Refer to note 23.2.21 (2) Excludes restricted deposits held with LIC of r 344 crore (r 281 crore) for

funding leave liability

17 CHANGE IN CURRENT LIABILITIES AND PROVISIONSAs per the Balance Sheet 4,353 3,798Less : Unclaimed dividend 3 2

Retention monies 21 66Gratuity obligation – unamortized amount relating to plan amendment 22 26Provisions separately considered in Cash Flow statementIncome taxes 756 719Proposed dividend 1,149 861Tax on dividend 187 143

2,215 1,981Less : Opening balance considered 1,981 1,745

234 236

18 INCOME TAXES PAIDCharge as per the Profit and Loss account 2,378 1,717Add / (Less) : Increase / (Decrease) in

advance income taxes 283 373Increase / (Decrease) in deferred taxes (1) 143 (21)Increase / (Decrease) in MAT credit entitlement – (262)Income tax benefit arising from exercise of stock options (11) (10)(Increase) / Decrease in income tax provision (37) (144)

2,756 1,653Note : (1) Excludes translation difference of r 6 crore on deferred tax liabilities

19 PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESSAs per the Balance Sheet (1) 1,017 787Less : Opening capital work-in-progress 409 615Add : Closing capital work-in-progress 499 409Add : Opening retention monies 66 50Less : Closing retention monies 21 66

1,152 565Note : (1) Net of r 3 crore movement in land from leasehold to free-hold for the year

ended March 31, 2011


For the Year ended March 31, 2011 201020 (a) INVESTMENTS IN SUBSIDIARIES (1)

As per the Balance Sheet 1,202 1,125Less : Opening balance considered 1,125 1,005

77 120Note : (1) Refer to note 23.2.15 for investment made in subsidiaries

20 (b) INVESTMENT / (DISPOSAL) OF SECURITIES (1)

Opening balance considered 3,497 –Less : Closing as per the Balance

Sheet 119 (3,497) 3,378 3,497

Note : (1) Refer to note 23.2.15 for investment and redemptions

20 (c) REPAYMENT OF SUBSIDIARY LOANOpening balance 46 51Less : Closing balance (1) 32 46

14 5Note : (1) Net of exchange rate fluctuation of Nil and r 5 crore as at March 31, 2011

and March 31, 2010 respectively

21 INTEREST AND DIVIDEND RECEIVEDInterest and dividend income as per Profit and Loss account 1,086 844Add : Opening interest accrued but not

due 14 1Less : Closing interest accrued but not

due on certificates of deposit and bank deposits 14 14

1,086 831

22 CASH AND CASH EQUIVALENTS AT THE ENDAs per the Balance Sheet 13,665 9,797Add : Deposits with financial

institutions (1) 1,500 1,500 15,165 11,297

Note : (1) Excludes restricted deposits held with LIC of r 344 crore (r 281 crore) for funding leave liability (refer to note 23.2.23b)

Schedules | 19


Schedules to the financial statements for the year ended March 31, 2011

23. Significant accounting policies and notes on accounts

Company overviewInfosys Technologies Limited (‘Infosys’ or ‘the Company’) along with its majority-owned and controlled subsidiary, Infosys BPO Limited (‘Infosys BPO’) and wholly-owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited (‘Infosys Australia’), Infosys Technologies (China) Company Limited (‘Infosys China’), Infosys Consulting Inc. (‘Infosys Consulting’), Infosys Technologies S. de R. L. de C. V. (‘Infosys Mexico’), Infosys Technologies (Sweden) AB. (‘Infosys Sweden’), Infosys Tecnologia do Brasil Ltda. (‘Infosys Brasil’), Infosys Public Services, Inc., U.S. (‘Infosys Public Services’) and Infosys Technologies (Shanghai) Company Limited (‘Infosys Shanghai’) is a leading global technology services corporation. The Company provides end-to-end business solutions that leverage cutting-edge technology, thereby enabling clients to enhance business performance. The Company provides solutions that span the entire software lifecycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the Company offers software products for the banking industry.

23.1. Significant accounting policies

23.1.1. Basis of preparation of financial statementsThese financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

23.1.2. Use of estimates The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage of completion which requires the Company to estimate the efforts expended to date as a proportion of the total efforts to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount.

The recoverable amount is higher of the asset’s net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

23.1.3. Revenue recognitionRevenue is primarily derived from software development and related services and from the licensing of software products. Arrangements with customers for software development and related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price and fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized based upon the percentage of completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Cost and earnings in excess of billings are classified as unbilled revenue, while billings in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates.

Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized ratably over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts, which require significant implementation services, where revenue for the entire arrangement is recognized over the implementation period based upon the percentage-of-completion. Revenue from client training, support and other services arising due to the sale of software products is recognized as the related services are performed.

The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discount / incentive amount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount / incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer’s future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts using a cumulative catch-up approach. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

The Company presents revenues net of value-added taxes in its Profit and Loss account.

Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sale price and carrying value of the investment. Lease rentals are recognized ratably on a straight line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Company’s right to receive dividend is established.

20 | Schedules


23.1.4. Provisions and contingent liabilitiesA provision is recognized if, as a result of a past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

23.1.4.a. Post-sales client support and warrantiesThe Company provides its clients with a fixed-period warranty for corrections of errors and telephone support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in cost of sales. The Company estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions.

23.1.4.b. Onerous contractsProvisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.

23.1.5. Fixed assets, intangible assets and capital work-in-progress

Fixed assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets, and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

23.1.6. Depreciation and amortizationDepreciation on fixed assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Individual low-cost assets (acquired for less than R 5,000/-) are depreciated over a period of one year from the date of acquisition. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the other fixed assets as follows :

Buildings 15 yearsPlant and machinery 5 yearsComputer equipment 2 – 5 yearsFurniture and fixtures 5 yearsVehicles 5 years


23.1.7. Retirement benefits to employees

23.1.7.a. Gratuity In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible employees.

The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees’ Gratuity Fund Trust (‘the Trust’). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by the law. The Company recognizes the net obligation of the Gratuity Plan in the Balance Sheet as an asset or liability, respectively in accordance with Accounting Standard (AS) 15, ‘Employee Benefits’. The Company’s overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made, and historical returns. The discount rate is based on the government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the Profit and Loss account in the period in which they arise.

23.1.7.b. Superannuation Certain employees of Infosys are also participants in the superannuation plan (‘the Plan’) which is a defined contribution plan. The Company has no obligations to the Plan beyond its monthly contributions.

23.1.7.c. Provident fundEligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee’s salary. The Company contributes a part of the contributions to the Infosys Technologies Limited Employees’ Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

23.1.7.d. Compensated absencesThe employees of the Company are entitled to compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

23.1.8. Research and developmentResearch costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably.

23.1.9. Foreign currency transactionsForeign-currency denominated monetary assets and liabilities are translated at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the Profit and Loss account. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

Schedules | 21


Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

23.1.10. Forward and options contracts in foreign currencies

The Company uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduce the risk or cost to the Company and the Company does not use those for trading or speculation purposes.

Effective April 1, 2008, the Company adopted AS 30, ‘Financial Instruments : Recognition and Measurement’, to the extent that the adoption did not conflict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements.

Forward and options contracts are fair valued at each reporting date. The resultant gain or loss from these transactions are recognized in the Profit and Loss account. The Company records the gain or loss on effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the Profit and Loss account of that period. To designate a forward or options contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the Profit and Loss account. Currently hedges undertaken by the Company are all ineffective in nature and the resultant gain or loss consequent to fair valuation is recognized in the Profit and Loss account at each reporting date.

23.1.11. Income taxesIncome taxes are accrued in the same period that the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the Balance Sheet if there is convincing evidence that the Company will pay normal tax after the tax holiday period and the resultant asset can be measured reliably. The Company offsets, on a year on year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets in situation where unabsorbed depreciation and carry forward business loss exists, are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than in situation of unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to Profit and Loss account are credited to the share premium account.

23.1.12. Earnings per shareBasic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

23.1.13. InvestmentsTrade investments are the investments made to enhance the Company’s business interests. Investments are either classified as current or long-term based on Management’s intention at the time of purchase. Current investments are carried at the lower of cost and fair value of each investment individually. Cost for overseas investments comprises the Indian rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

23.1.14. Cash and cash equivalentsCash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

23.1.15. Cash Flow statementCash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

23.1.16. Leases Lease under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight line basis in the Profit and Loss account over the lease term.

23.2. Notes on accountsAmounts in the financial statements are presented in rupees crore, except for per share data and as otherwise stated. Certain amounts that are required to be disclosed and do not appear due to rounding off are detailed in note 23.3. All exact amounts are stated with the suffix ‘/-’. One crore equals 10 million.

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation.

22 | Schedules


23.2.1. Aggregate expensesThe aggregate amounts incurred on expenses are as follows :

in r crore

Year ended March 31,2011 2010

Salaries and bonus including overseas staff expenses 12,459 10,350Overseas travel expenses 688 493Traveling and conveyance 83 61Technical sub-contractors – subsidiaries 1,568 1,210Technical sub-contractors – others 476 269Software packages for own use 320 309Third party items bought for service delivery to clients 139 17Professional charges 299 242Telephone charges 130 117Communication expenses 40 46Power and fuel 142 122Office maintenance expenses 188 136Commission charges 12 16Brand building 70 55Rent 68 62Insurance charges 24 23Computer maintenance 33 22Printing and stationery 11 9Consumables 23 22Donations 1 43Advertisements 6 3Marketing expenses 14 12Repairs to building 44 33Repairs to plant and machinery 33 31Rates and taxes 48 26Professional membership and seminar participation fees 10 8Postage and courier 9 8Provision for post-sales client support and warranties 5 (2)Freight charges 1 1Books and periodicals 3 3Provision for bad and doubtful debts and advances 3 (1)Commission to non-whole-time directors 5 6Bank charges and commission 1 2Auditor’s remuneration 0 0

Statutory audit fees 1 1Research grants 14 25

16,971 13,780

23.2.2. Capital commitments and contingent liabilitiesin r crore


Estimated amount of unexecuted capital contracts (net of advances and deposits)

742 267

Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favor of various government authorities and others

3 3


Claims against the Company, not acknowledged as debts (1) 271 28 [Net of amount paid to statutory authorities R 469 crore (R 241 crore)]

in million

in R

crorein

millionin R

croreForward contracts outstandingIn U.S. dollar 500 2,230 228 1,024 In Euro 20 127 16 97 In GBP 10 72 7 48 In AUD 10 46 3 12 Options contracts outstandingIn U.S. dollar – – 200 898

2,475 2,079Note : (1) Claims against the Company not acknowledged as debts include demand from

the Indian tax authorities for payment of additional tax of r 671 crore (r 214 crore), including interest of r 177 crore (r 39 crore) upon completion of their tax review for fiscal 2005, fiscal 2006 and fiscal 2007. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income Tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2005, 2006 and 2007 is pending before the Commissioner of Income Tax (Appeals), Bangalore. The Company is contesting the demands and the Management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

As of the Balance Sheet date, the Company’s net foreign currency exposures that are not hedged by a derivative instrument or otherwise is R 1,196 crore (R 891 crore as at March 31, 2010).

The foreign exchange forward and option contracts mature between 1 to 12 months. The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the Balance Sheet date :

in r crore

Particulars As of March 31,2011 2010

Not later than one month 413 242 Later than one month and not later than three months 590 746 Later than three months and not later than one year 1,472 1,091

2,475 2,079

The Company recognized a net gain on derivative financial instruments of R 53 crore and R 276 crore during the year ended March 31, 2011 March 31, 2010, respectively, which are included in other income.

23.2.3. Quantitative detailsThe Company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

in r crore

Schedules | 23


23.2.4. Imports (valued on the cost, insurance and freight basis)

in r crore


Capital goods 161 91 Software packages 4 10 165 101

23.2.5. Activity in foreign currencyin r crore


Earnings in foreign currency (on receipts basis)

Income from software services and products 23,954 21,072 Interest received from banks and others 6 3

Expenditure in foreign currency (on payments basis)

Overseas travel expenses (including visa charges) 535 404 Professional charges 159 150 Technical sub-contractors – subsidiaries 1,568 1,210 Overseas salaries and incentives 6,907 5,950 Other expenditure incurred overseas for software development 1,431 675

Net earnings in foreign currency 13,360 12,686

23.2.6. Obligations on long-term, non-cancelable operating leases

The lease rentals charged during the year and the maximum obligations on long-term, non-cancelable operating leases payable as per the rentals stated in the respective agreements are as follows :

in r crore


Lease rentals recognized during the year 68 62

in r crore

Lease obligations payable As at March 31,2011 2010

Within one year of the Balance Sheet date 63 48 Due in a period between one year and five years 152 149 Due after five years 30 24

The operating lease arrangements, are renewable on a periodic basis and extend up to a maximum of ten years from their respective dates of inception and relates to rented overseas premises. Some of these lease agreements have a price escalation clause.

Fixed assets provided on operating lease to Infosys BPO, a subsidiary company, as at March 31, 2011 and March 31, 2010 are as follows :

Particulars Cost Accumulated depreciation

Net book value

Buildings 60 25 35 59 21 38

Plant and machinery 3 2 1 18 15 3

Computer equipment 1 1 – 1 1 –

Particulars Cost Accumulated depreciation

Net book value

Furniture and fixtures 1 1 – 3 2 1

Total 65 29 36 81 39 42

The aggregate depreciation charged on the above assets during the year ended March 31, 2011 amounted to R 6 crore (R 7 crore for the year ended March 31, 2010).

The rental income from Infosys BPO for the year ended March 31, 2011 amounted to R 17 crore (R 16 crore for the year ended March 31, 2010).

23.2.7. Related party transactions List of related parties :

Name of subsidiaries Country Holding as at March 31,2011 2010

Infosys BPO India 99.98% 99.98%Infosys Australia Australia 100% 100%Infosys China (1) China 100% 100%Infosys Consulting U.S. 100% 100%Infosys Mexico (2) Mexico 100% 100%Infosys Sweden Sweden 100% 100%Infosys Shanghai (3) China 100% –Infosys Brasil (4) Brazil 100% 100%Infosys Public Services, Inc. U.S. 100% 100%Infosys BPO s.r.o. (5) Czech

Republic 99.98% 99.98%Infosys BPO (Poland) Sp.Z.o.o (5) Poland 99.98% 99.98%Infosys BPO (Thailand) Limited (5) Thailand – 99.98%Infosys Consulting India Limited (6) India 100% 100%McCamish Systems LLC (5) (7) U.S. 99.98% 99.98%

Notes : (1) During the year ended March 31, 2011 the Company made an additional investment of r 42 crore (US$ 9 million) in Infosys China, which is a wholly-owned subsidiary. As of March 31, 2011 and March 31, 2010, the Company has invested an aggregate of r 107 crore (US$ 23 million) and r 65 crore (US$ 14 million), respectively, in the subsidiary.

(2) During the year ended March 31, 2011 the Company made an additional investment of r 14 crore (Mexican Peso 40 million) in Infosys Mexico, which is a wholly-owned subsidiary. As of March 31, 2011 and March 31, 2010, the Company has invested an aggregate of r 54 crore (Mexican Peso 150 million) and r 40 crore (Mexican Peso 110 million), respectively, in the subsidiary.

(3) On February 21, 2011 the Company incorporated a wholly-owned subsidiary, Infosys Technologies (Shanghai) Company Limited and invested r 11 crore (US$ 3 million) in the subsidiary. As of March 31, 2011 the Company has invested an aggregate of r 11 crore (US$ 3 million) in the subsidiary.

(4) During the year ended March 31, 2011 the Company made an additional investment of r 10 crore (BRL 4 million) in the subsidiary. As of March 31, 2011 and March 31, 2010 the Company has invested an aggregate of r 38 crore (BRL 15 million) and r 28 crore (BRL 11 million), respectively, in the subsidiary.

(5) Infosys BPO s.r.o, Infosys BPO (Poland) Sp.Z.o.o, Infosys BPO (Thailand) Limited and McCamish Systems LLC are wholly-owned subsidiaries of Infosys BPO. During the year ended March 31, 2011 Infosys BPO (Thailand) Limited was liquidated.

(6) During the year ended March 31, 2010, Infosys Consulting incorporated a wholly-owned subsidiary, Infosys Consulting India Limited. As of March 31, 2011 and March 31, 2010 Infosys Consulting has invested an aggregate of r 1 crore in the subsidiary.


24 | Schedules


Infosys guarantees the performance of certain contracts entered into by its subsidiaries.

The details of amounts due to or due from as at March 31, 2011 and March 31, 2010 are as follows :

in r crore


Loans and advancesInfosys China 23 46 Infosys Brasil 9 –

Sundry debtorsInfosys China 39 19 Infosys Australia 5 7 Infosys Mexico 1 1 Infosys Consulting 24 26 Infosys Brasil – 1 Infosys BPO (including subsidiaries) 3 2

Sundry creditorsInfosys China 32 18 Infosys Australia – 20 Infosys BPO (including subsidiaries) 3 7 Infosys Brasil – – Infosys Consulting 17 43 Infosys Consulting India 1 1 Infosys Mexico 1 5 Infosys Sweden 1 1

Deposit taken for shared servicesInfosys BPO 7 7

The details of the related party transactions entered into by the Company and maximum dues from subsidiaries, in addition to the lease commitments described in note 23.2.6, for the year ended March 31, 2011 and March 31, 2010 are as follows :

in r crore


Capital transactionsFinancing transactions

Infosys Mexico 14 18 Infosys China 42 – Infosys Shanghai 11 – Infosys Brasil 10 28 Infosys Public services – 24 Infosys Consulting – 50

Loans / AdvancesInfosys Brasil 9 – Infosys China (23) –

Revenue transactionsPurchase of services

Infosys Australia 889 634 Infosys China 240 134 Infosys Consulting 353 378 Infosys Consulting India 5 –

Infosys BPO (including subsidiaries) 17 3 Infosys Sweden 12 11 Infosys Mexico 49 45 Infosys Brasil 3 5

Purchase of shared services including facilities and personnel

Infosys BPO (including subsidiaries) 114 53 Interest income

Infosys China 2 3


Sale of servicesInfosys Australia 33 25 Infosys China 6 10 Infosys BPO (including subsidiaries) 21 – Infosys Consulting 73 25

Sale of shared services including facilities and personnel

Infosys BPO (including subsidiaries) 78 71 Infosys Consulting 4 4

Maximum balances of loans and advancesInfosys Australia 81 51 Infosys China 48 48 Infosys Brasil 9 – Infosys BPO (including subsidiaries) – 4 Infosys Mexico 4 4 Infosys Consulting 35 35

During the year ended March 31, 2011, an amount of Nil (R 34 crore for the year ended March 31, 2010) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

During the year ended March 31, 2011, an amount of R 12 crore (R 23 crore for the year ended March 31, 2010) has been granted to Infosys Science Foundation, a not-for-profit foundation, in which certain directors and officers of the Company are trustees.

23.2.8. Transactions with key management personnelKey management personnel comprise directors and members of executive council.

Particulars of remuneration and other benefits paid to key management personnel during the year ended March 31, 2011 and March 31, 2010 have been detailed in Schedule 23.4.

The aggregate managerial remuneration under Section 198 of the Companies Act 1956, to the directors (including managing director) is as follows :

in r crore


Whole-time directorsSalary 2 2 Contribution to provident and other funds 1 – Perquisites and incentives 6 7

Total remuneration 9 9 Non-whole-time directors

Commission 6 6 Reimbursement of expenses 1 1

Total remuneration 7 7

Computation of net profit in accordance with Section 349 of the Companies Act, 1956, and calculation of commission payable to non-whole-time directors are as follows :

in r crore


Net profit after tax before exceptional item 6,443 5,755

Add : Whole-time director’s remuneration 9 9

Commission to non-whole-time directors 6 6

in r crore

Schedules | 25



Provision for bad and doubtful debts and advances 3 (1)Depreciation as per books of accounts 740 807 Provision for taxation 2,378 1,717

9,579 8,293 Less : Depreciation as envisaged under

Section 350 of the Companies Act (1) 740 807

Net profit on which commission is payable 8,839 7,486 Commission payable to non-whole-time directorsMaximum allowed as per the Companies Act, 1956 at 1% 88 75 Maximum approved by the share holders at 1% (1%) 88 75 Commission approved by the Board 6 6

Note : (1) The Company depreciates fixed assets based on estimated useful lives that are lower than those prescribed in Schedule XIV of the Companies Act, 1956. Accordingly the rates of depreciation used by the Company are higher than the minimum prescribed by Schedule XIV.

During the year ended March 31, 2011 and March 31, 2010 Infosys BPO has provided for commission of R 0.12 crore and R 0.12 crore to a non-whole-time director of Infosys.

23.2.9. Research and development expenditure in r crore


Capital 6 3 Revenue 521 437

23.2.10. Stock option plansThe Company has two Stock Option Plans.

1998 Stock Option Plan (‘the 1998 Plan’)The 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January 1998, and is for issue of 1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A compensation committee comprising independent members of the Board of Directors administers the 1998 Plan. All options had been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan.

1999 Stock Option Plan (‘the 1999 Plan’)In fiscal 2000, the Company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in September 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The compensation committee administers the 1999 Plan. Options were issued to employees at an exercise price that is not less than the fair market value. The 1999 Plan lapsed on June 11, 2009, and consequently no further shares will be issued to employees under this plan.

The activity in the 1998 Plan and 1999 Plan during the year ended March 31, 2011 and March 31, 2010 are as follows :


The 1998 PlanOptions outstanding, beginning of the year 2,42,264 9,16,759Less : Exercised 1,88,675 6,14,071

Forfeited 3,519 60,424Options outstanding, end of the year 50,070 2,42,264The 1999 PlanOptions outstanding, beginning of the year 2,04,464 9,25,806Less : Exercised 1,37,692 3,81,078

Forfeited 18,052 3,40,264Options outstanding, end of the year 48,720 2,04,464

The weighted average share price of options exercised under the 1998 Plan during the year ended March 31, 2011 and March 31, 2010 was R 2,950 and R 2,266 respectively. The weighted average share price of options exercised under the 1999 Plan during the year ended March 31, 2011 and March 31, 2010 was R 2,902 and R 2,221 respectively.

The following tables summarize information about the 1998 and 1999 share options outstanding as at March 31, 2011 and March 31, 2010 :




Weighted average


life


price

The 1998 Plan300 – 700 24,680 0.73 587 701 – 1,400 25,390 0.56 777

50,070 0.65 683 The 1999 Plan300 – 700 33,759 0.65 448 701 – 2,500 14,961 1.71 2,121

48,720 0.97 962




Weighted average


life


price

The 1998 Plan300 – 700 1,74,404 0.94 551 701 – 1,400 67,860 1.27 773

2,42,264 1.03 613 The 1999 Plan300 – 700 1,52,171 0.91 439 701 – 2,500 52,293 1.44 2,121

2,04,464 1.05 869

The aggregate options considered for dilution are set out in note 23.2.19

23.2.11. Income taxesThe provision for taxation includes tax liabilities in India on the Company’s global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries. Infosys’ operations are conducted through Software Technology Parks (‘STPs’) and Special Economic Zones (‘SEZs’). Income from STPs are tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development, or March 31, 2011.

in r crore

26 | Schedules


Income from SEZs is fully tax exempt for the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling certain conditions. For fiscal 2008 and 2009, the Company had calculated its tax liability under Minimum Alternate Tax (MAT). The MAT credit can be carried forward and set off against the future tax payable. In fiscal 2010, the Company calculated its tax liability under normal provisions of the Income Tax Act and utilized the brought forward MAT Credit.

As at March 31, 2011, the Company has provided for branch profit tax of R 176 crore for its overseas branches, as the Company estimates that these branch profits would be distributed in the foreseeable future.

23.2.12. Cash and bank balances The details of balances as on Balance Sheet dates with non-scheduled banks are as follows :

in r crore

Balances with non-scheduled banks As at March 31, 2011 2010

In current accountsANZ Bank, Taiwan 3 2 Bank of America, U.S. 274 644 Citibank NA, Australia 61 24 Citibank NA, New Zealand – – Citibank NA, Thailand 1 1 Citibank NA, Japan 17 2 Deutsche Bank, Belgium 5 18 Deutsche Bank, Germany 5 12 Deutsche Bank, Moscow (U.S. dollar account) – 1 Deutsche Bank, Netherlands 2 7 Deutsche Bank, France 3 1 Deutsche Bank, Switzerland 1 10 Deutsche Bank, Switzerland (U.S. dollar account) – 1 Deutsche Bank, Singapore 3 1 Deutsche Bank, U.K. 40 29 Deutsche Bank, Spain 1 2 HSBC Bank, U.K. 1 1 Nordbanken, Sweden 4 – Royal Bank of Canada, Canada 23 20

444 776

The details of balances as on Balance Sheet dates with scheduled banks are as follows :

in r crore


In current accountsCitibank – Unclaimed dividend account 1 – Deustche Bank 11 12 Deustche Bank – EEFC (Euro account) 8 3 Deustche Bank – EEFC (U.S. dollar account) 141 8 Deutsche Bank – EEFC account in Swiss Franc 2 – HDFC Bank – Unclaimed dividend account 1 1 ICICI Bank 18 121 ICICI Bank – EEFC (U.S. dollar account) 14 7 ICICI bank – Unclaimed dividend account 1 1

197 153In deposit accounts

Allahabad Bank 500 100 Andhra Bank 399 99 Axis Bank 476 – Bank of Baroda 1,100 299


Bank of India 1,197 881 Bank of Maharashtra 488 500 Barclays Bank – 100 Canara Bank 1,254 958 Central Bank of India 354 100 Corporation Bank 295 276 DBS Bank – 49 HDFC Bank 646 – HSBC Bank – 483 ICICI Bank 689 1,370 IDBI Bank 716 900 ING Vysya Bank – 25 Indian Overseas Bank 500 131 Jammu and Kashmir Bank 12 10 Kotak Mahindra Bank 25 25 Oriental Bank of commerce 578 100 Punjab National Bank 1,493 994 State Bank of Hyderabad 225 200 State Bank of India 449 126 State Bank of Mysore 354 496 South Indian Bank 25 – Syndicate Bank 500 458 Union Bank of India 631 93 Vijaya Bank 95 95 Yes Bank 23 –

13,024 8,868 Total cash and bank balances as per Balance Sheet 13,665 9,797

The details of maximum balances during the year with non-scheduled banks are as follows :

in r crore

Maximum balance with non-scheduled banks during the year


In current accountsANZ Bank, Taiwan 3 – ABN AMRO Bank, Taiwan – 4 Bank of America, U.S. 927 694 BNP Paribas Bank, Norway 1 – Citibank NA, Australia 156 134 Citibank NA, New Zealand 7 5 Citibank NA, Singapore – 45 Citibank NA, Japan 21 17 Citibank NA, Thailand 4 1 Deutsche Bank, Belgium 23 47 Deutsche Bank, Germany 36 31 Deutsche Bank, Netherlands 19 20 Deutsche Bank, France 9 6 Deutsche Bank, Moscow (RUB account) 2 – Deutsche Bank, Moscow (U.S. dollar account) 1 1 Deutsche Bank, Spain 4 5 Deutsche Bank, Singapore 18 15 Deutsche Bank, Switzerland 93 39 Deutsche Bank, Switzerland (U.S. dollar account) 11 14 Deutsche Bank, U.K. 125 183 HSBC Bank, U.K. 2 8 Morgan Stanley Bank, U.S. 6 8

in r crore

Schedules | 27


Maximum balance with non-scheduled banks during the year


Nordbanken, Sweden 4 – Royal Bank of Canada, Canada 47 28 Standard Chartered Bank, UAE 5 4 Svenska Handelsbanken, Sweden 3 3

The Bank of Tokyo – Mitsubishi UFJ Ltd., Japan 4 2

23.2.13. Loans and advancesDeposits with financial institutions :

in r crore


HDFC Limited 1,500 1,500 Life Insurance Corporation of India (LIC) 344 281

1,844 1,781

The maximum balance (including accrued interest) held as deposits with financial institutions is as follows :

in r crore


Deposits with financial institutions :HDFC Limited 1,619 1,550Life Insurance Corporation of India 431 281

Deposit with LIC represents amount deposited to settle employee benefit obligations as and when they arise during the normal course of business (refer to note 23.2.23.b.).

23.2.14. Fixed assetsProfit / (loss) on disposal of fixed assets during the year ended March 31, 2011 and March 31, 2010 is less than R 1 crore and accordingly disclosed under note 23.3.

Depreciation charged to the Profit and Loss account includes a charge relating to assets costing less than R 5,000/- each and other low value assets.

in r crore


Depreciation charged during the year 33 86

The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of these agreements, the Company has the option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the value of the properties at the time of entering into the lease-cum-sale agreements. These amounts are disclosed as ‘Land – leasehold’ under ‘Fixed assets’ in the financial statements. Additionally, certain land has been purchased for which though the Company has possession certificate, the sale deeds are yet to be executed as at March 31, 2011.

23.2.15. Details of investmentsin r crore


Long-term investmentsOnMobile Systems Inc., (formerly Onscan Inc.) U.S.21,54,100 (21,54,100) common stock at US$ 0.4348 each, fully paid, par value US$ 0.001 each

4 4


Merasport Technologies Private Limited 2,420 (2,420) equity shares at R 8,052 each, fully paid, par value R 10 each 2 2

6 6 Less : Provision for investment 2 2

4 4

The details of liquid mutual fund units as at March 31, 2010 is as follows :

in r crore

Particulars Number of units

Amount

Tata Floater Fund – Weekly Dividend 27,28,06,768 275 Kotak Floater Long Term Plan – Weekly Dividend 20,93,66,402 211 Reliance Medium Term Fund – Weekly Dividend Plan D 13,68,30,703 234 Birla Sun Life Savings Fund – Institutional – Weekly Dividend Payout 26,71,60,366 267 ICICI Prudential Flexible Income Plan Premium – Weekly Dividend Payout 2,93,92,648 310 IDFC Money Manager Fund – Treasury Plan – Super Institutional Plan C – Weekly Dividend 38,95,22,783 390 UTI Treasury Advantage Fund – Institutional Weekly Dividend Plan – Payout 38,86,168 389 HDFC Floating Rate Income Fund – Short Term Plan – Dividend Weekly 12,03,96,040 122 DWS Ultra Short Term Fund – Institutional Weekly Dividend 3,96,85,983 40 SBI – SHF – Ultra Short Term Fund – Institutional Plan – Weekly Dividend Payout 3,47,73,535 35 Franklin Templeton India Ultra Short Bond Fund Super Institutional Plan – Weekly Dividend Payout 1,09,36,513 11 DSP BlackRock Floating Rate Fund – Institutional – Weekly Dividend 99,866 10 Religare Ultra Short Term Fund – Institutional Weekly Dividend 2,25,53,650 23

153,74,11,425 2,317 At cost 1,413 At fair value 904

2,317

The balances held in certificates of deposit as at March 31, 2011 is as follows :

in r crore

Particulars Face value R Units Amount State Bank of Hyderabad 1,00,000 7,500 71 Union Bank of India 1,00,000 5,000 48

12,500 119

28 | Schedules


The balances held in certificates of deposit as at March 31, 2010 is as follows :in r crore

Particulars Face value R Units AmountPunjab National Bank 1,00,000 50,000 480 Bank of Baroda 1,00,000 27,500 265 HDFC Bank 1,00,000 25,000 236 Corporation Bank 1,00,000 20,000 189 Jammu and Kashmir Bank 1,00,000 1,000 10

1,23,500 1,180

The details of investments and disposal of securities during the year ended March 31, 2011 and March 31, 2010 are as follows :In r crore


Investment in securitiesSubsidiary – Infosys Consulting – 50 Subsidiary – Infosys China 42 – Subsidiary – Infosys Mexico 14 18 Subsidiary – Infosys Brasil 10 28 Subsidiary – Infosys Public Services – 24 Subsidiary – Infosys Shanghai 11 – Certificates of deposit 840 1,180 Liquid mutual fund units 1,583 9,016

2,500 10,316 Redemption / disposal of investment in securities

Long-term investments – 5 Certificates of deposit 1,901 – Liquid mutual fund units 3,900 6,699

5,801 6,704 Net movement in investments (3,301) 3,612

The details of investment purchased and sold during the year ended March 31, 2011 is as follows :In r crore

Name of the fund Face value R Units CostBirla Sun Life Cash Plus – Institutional Premium – Daily Dividend – Reinvestment 10 17,46,98,810 175 Birla Sun Life Savings Fund – Institutional – Weekly Dividend Payout 10 9,19,03,006 92 ICICI Prudential Flexible Income Plan Premium – Weekly Dividend 100 2,84,44,817 300 ICICI Prudential Liquid Super Institutional Plan – Dividend – Daily 100 3,67,95,966 368 IDFC Money Manager Fund – Investment Plan – Institutional Plan B – Weekly Dividend 10 4,29,06,464 43 Kotak Floater Long Term – Weekly Dividend 10 33,23,89,222 335 Kotak Liquid – Institutional Premium – Daily Dividend 10 6,38,19,533 78 Tata Floater Fund – Weekly Dividend 10 8,42,88,604 85 Reliance Medium Term Fund – Weekly Dividend Plan 10 2,16,35,163 37 Birla Sun Life Short Term Fund – Institutional Fortnightly Dividend – Payout 10 6,85,47,384 70

The details of investments purchased and sold during the year ended March 31, 2010 is as follows :In r crore

Name of the fund Face value R Units CostBirla Sun Life Short Term Fund – Institutional – Fortnightly Dividend 10 30,69,30,245 312 Birla Sun Life Savings Fund – Institutional – Weekly Dividend 10 44,96,87,618 450 DSP BlackRock Strategic Bond Fund – Institutional Plan – Monthly Dividend 1,000 4,90,830 50 DBS Chola Freedom Income – Short Term Fund – Weekly Dividend 10 8,19,67,368 86 HDFC Floating Rate Income Fund – Short-term 10 50,78,57,424 515 ICICI Prudential Floating Rate Plan D – Weekly Dividend 10 23,88,35,963 239 ICICI Prudential Flexible Income Plan Premium – Weekly Dividend 100 4,17,36,593 440 IDFC Money Manager Fund – Treasury Plan – Super Institutional Plan C 10 61,62,18,874 617 Reliance Medium Term Fund – Weekly Dividend Plan D 10 30,23,62,955 517 UTI Treasury Advantage Fund – Institutional Weekly Dividend Payout 1,000 43,48,966 435 HSBC Floating Rate Long Term – Institutional Weekly Dividend Payout 10 13,43,20,855 151 DWS Ultra Short Term Fund – Institutional Weekly Dividend 10 100,27,38,474 1,011 Religare Ultra Short Term Fund – Institutional Weekly Dividend 10 50,89,85,841 510 Principal Floating Rate Fund FMP – Institutional Option – Dividend Payout Weekly 10 11,11,37,088 111

Schedules | 29


Name of the fund Face value R Units CostTata Floater Fund – Weekly Dividend 10 25,78,43,865 260 Kotak Floater Long Term Plan – Weekly Dividend 10 44,64,32,595 450 SBI – SHF – Ultra Short Term Fund – Institutional Plan – Weekly Dividend Payout 10 41,66,63,413 420 Franklin Templeton India Ultra Short Bond Fund Super Institutional Plan – Weekly Dividend Payout 10 12,37,59,926 125

23.2.16. Segment reportingThe Company’s operations predominantly relate to providing end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers.

The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the significant accounting policies.

Industry segments at the Company are primarily financial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, transportation and logistics companies.

Income and direct expenses in relation to segments is categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably. The Company believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as ‘unallocated’ and directly charged against total income.

Fixed assets used in the Company’s business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made.

Industry segmentsYear ended March 31, 2011 and March 31, 2010 :

in r crore

Particulars Financial services

Manufacturing Telecom Retail Others Total

Revenues 9,293 4,686 3,134 3,757 4,515 25,385 7,354 3,988 3,234 2,989 3,575 21,140

Identifiable operating expenses 4,210 2,107 1,471 1,643 2,115 11,546 3,095 1,853 1,355 1,267 1,564 9,134

Allocated expenses 1,970 1,007 673 807 968 5,425 1,615 877 712 657 785 4,646

Segmental operating income 3,113 1,572 990 1,307 1,432 8,414 2,644 1,258 1,167 1,065 1,226 7,360

Unallocable expenses 740 807

Operating income 7,674 6,553

Other income, net 1,147 910

Provision for investments – (9)

Net profit before taxes and exceptional item 8,821 7,472

Income taxes 2,378 1,717

Net profit after taxes before exceptional item 6,443 5,755

Exceptional item – Income on sale of investments, net of taxes –


5,803

in r crore

30 | Schedules


Geographic segmentsYear ended March 31, 2011 and March 31, 2010 :

in r crore



Total

Revenues 16,815 5,252 594 2,724 25,385 14,170 4,633 269 2,068 21,140

Identifiable operating expenses 7,521 2,311 286 1,428 11,546 6,028 1,963 77 1,066 9,134

Allocated expenses 3,610 1,120 122 573 5,425 3,114 1,020 59 453 4,646

Segmental operating income 5,684 1,821 186 723 8,414 5,028 1,650 133 549 7,360

Unallocable expenses 740 807

Operating income 7,674 6,553

Other income, net 1,147 910

Provision for investments – (9)

Net profit before taxes and exceptional item 8,821 7,472

Income taxes 2,378 1,717

Net profit after taxes before exceptional item 6,443 5,755

Exceptional item – Income on sale of investments, net of taxes – 48

Net profit after taxes and exceptional item 6,443 5,803

23.2.17. Provision for doubtful debtsPeriodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customer’s ability to settle. The Company normally provides for debtor dues outstanding for 180 days or longer as at the Balance Sheet date. As at March 31, 2011 the Company has provided for doubtful debts of R 19 crore (R 21 crore as at March 31, 2010) on dues from certain customers although the outstanding amounts were less than 180 days old, since the amounts were considered doubtful of recovery. The Company pursues the recovery of the dues, in part or full.

23.2.18. Dividends remitted in foreign currenciesThe Company remits the equivalent of the dividends payable to equity shareholders and holders of ADS. For ADS holders the dividend is remitted in Indian rupees to the depository bank, which is the registered shareholder on record for all owners of the Company’s ADSs. The depositary bank purchases the foreign currencies and remits dividends to the ADS holders.

The particulars of dividends remitted are as follows :

Particulars Number of shares to which the dividends

relate

Year ended March 31,

2011 2010Interim and 30th year special dividend for fiscal 2011 10,87,18,147 435 – Interim dividend for fiscal 2010 10,70,15,201 – 107 Final dividend for fiscal 2010 10,68,22,614 160 – Final dividend for fiscal 2009 10,73,97,313 – 145

23.2.19. Reconciliation of basic and diluted shares used in computing earnings per share


Number of shares considered as basic weighted average shares outstanding 57,40,13,650 57,33,09,523Add : Effect of dilutive issues of

shares / stock options 1,88,308 6,40,108Number of shares considered as weighted average shares and potential shares outstanding 57,42,01,958 57,39,49,631

Schedules | 31


23.2.20. Provision for post-sales client support and warranties The movement in the provision for post-sales client support and warranties is as follows :

in r crore


Balance at the beginning 73 75 Provision recognized / (reversed) 5 (2)Provision utilized – – Exchange difference during the year – – Balance at the end 78 73

Provision for post-sales client support is expected to be utilized over a period of 6 months to 1 year.

23.2.21. Gratuity PlanThe following table set out the status of the Gratuity Plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation and plan assets : in r crore


Obligations at year beginning 308 256 217 221 180 Transfer of obligation – (2) – – – Service cost 171 72 47 47 44 Interest cost 24 19 15 16 14 Actuarial (gain) / loss 15 (4) – (9) – Benefits paid (59) (33) (23) (21) (17)Amendment in benefit plans – – – (37) – Obligations at year end 459 308 256 217 221Defined benefit obligation liability as at the Balance Sheet date is fully funded by the CompanyChange in plan assetsPlans assets at year beginning, at fair value 310 256 229 221 167 Expected return on plan assets 34 24 16 18 16 Actuarial gain / (loss) 1 1 5 2 3 Contributions 173 62 29 9 52 Benefits paid (59) (33) (23) (21) (17)Plans assets at year end, at fair value 459 310 256 229 221Reconciliation of present value of the obligation and the fair value of the plan assets :Fair value of plan assets at the end of the year 459 310 256 229 221 Present value of the defined benefit obligations at the end of the year 459 308 256 217 221 Asset recognized in the Balance Sheet – 2 – 12 – AssumptionsInterest rate 7.98% 7.82% 7.01% 7.92% 7.99%Estimated rate of return on plan assets 9.36% 9.00% 7.01% 7.92% 7.99%Weighted expected rate of salary increase 7.27% 7.27% 5.10% 5.10% 5.10%

Net gratuity cost for the years ended March 31, 2011 and March 31, 2010 comprises of the following components :


Gratuity cost for the yearService cost 171 72 Interest cost 24 19 Expected return on plan assets (34) (24)Actuarial (gain) / loss 14 (5)Plan amendment amortization (4) (3)Net gratuity cost 171 59 Actual return on plan assets 35 25

Gratuity cost, as disclosed above, is included under salaries and bonus and is segregated between software development expenses, selling and marketing expenses and general and administration expenses on the basis of number of employees.

During the year ended March 31, 2010, a reimbursement obligation of R 2 crore has been recognized towards settlement of gratuity liability of Infosys Consulting India Limited.

32 | Schedules


As at March 31, 2011 and March 31, 2010, the plan assets have been primarily invested in government securities. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The Company expects to contribute approximately R 100 crore to the gratuity trust during the fiscal 2012.

Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the Gratuity Plan reduced by R 37 crore, which is being amortized on a straight line basis to the net Profit and Loss account over 10 years representing the average future service period of the employees. The unamortized liability as at March 31, 2011 and March 31, 2010 amounted to R 22 crore and R 26 crore, respectively and is disclosed under ‘Current Liabilities’.

23.2.22.a Provident fundThe Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. Pending the issuance of the final guidance note from the Actuarial Society of India, the Company’s actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.

The Company contributed R 179 crore towards Provident Fund during the year ended March 31, 2011. (R 150 crore during the year ended March 31, 2010).

23.2.22.b Superannuation The Company contributed R 57 crore to the Superannuation Trust during the year ended March 31, 2011 (R 54 crore during the year ended March 31, 2010).

23.2.23 Cash Flow statement

23.2.23.a. Unclaimed dividendThe balance of cash and cash equivalents includes R 3 crore as at March 31, 2011 (R 2 crore as at March 31, 2010) set aside for payment of dividends.

23.2.23.b. Restricted depositsDeposits with financial institutions as at March 31, 2011 include R 344 crore (R 281 crore as at March 31, 2010) deposited with Life Insurance Corporation of India to settle employee-related obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and is hence not considered ‘cash and cash equivalents’.

23.2.24 Dues to micro and small enterprisesThe Company has no dues to micro and small enterprises during the year ended March 31, 2011 and March 31, 2010 and as at March 31, 2011 and March 31, 2010.

23.2.25 Exceptional itemDuring the year ended March 31, 2010, the Company sold 32,31,151 shares of OnMobile Systems Inc., U.S. (OMSI) at a price of R 166.58 per share amounting to a total consideration of R 53 crore, net of taxes and transactions costs. The resultant income of R 48 crore has been appropriated to capital reserve.

23.3 Details of rounded off amountsThe financial statements are represented in R crore as per the approval received from Department of Company Affairs (DCA) earlier. Those items which were not represented in the financial statement due to rounding off to the nearest R crore are given as follows :

Balance Sheet itemsin r crore


3 Fixed assetsVehicles

Addition during the year – 0.04 Depreciation on deletions – 0.04 Deletion during the year 0.08 – Depreciation on deletions 0.08 –

4 InvestmentsInvestment in Infosys Sweden 0.06 0.06

23.2.7 Related party transactionsDebtors

Infosys BPO s.r.o. – 0.04 Infosys Thailand – 0.04 Infosys Consulting India 0.29 – Infosys Public Services 0.11 – Infosys Sweden – 0.08 Infosys Technologia do Brasil Ltda – 0.62

CreditorsInfosys BPO s.r.o. – 0.16 Infosys Technologia do Brasil Ltda 0.14 – Infosys Mexico 0.31 – Infosys Thailand – 0.02

23.2.12 Balances with non-scheduled banks– ABN AMRO Bank, Denmark 0.27 0.21 – Bank of Baroda, Mauritius 0.02 0.02 – Citibank NA, New Zealand 0.20 0.26

Schedules | 33



– Deutsche Bank, Moscow 0.10 0.34 – Deutsche Bank, Moscow (U.S. dollar) 0.11 1.21 – Deutsche Bank, Singapore – 0.66 – Deutsche Bank, Zurich, Switzerland (U.S. dollar account) 0.01 1.40 – Nordbanken, Sweden – 0.06 – Standard Chartered Bank, UAE 0.17 0.09 – The Bank of Tokyo – Mitsubishi UFJ, Ltd., Japan 0.41 0.16

23.2.12 Maximum balances with non-scheduled banks– ABN Amro Bank, Denmark 0.27 0.21 – Deutsche Bank, Russia – 0.37 – Nordbanken, Sweden – 0.48 – Deutsche Bank, Russia (U.S. dollar account) – 0.21

Profit and Loss itemsin r crore

Schedule Description Year ended March 31,2011 2010

Profit and Loss Provision for investment – 9.00 Additional dividend tax – 0.04

23.2.1 Aggregate expensesProvision for doubtful loans and advances – 0.28 Auditor’s remuneration

Statutory audit fees – 0.69 Certification charges 0.06 0.05 Out-of-pocket expenses 0.04 0.03

Freight charges – 1.01 Sales promotion expenses 0.28 1.00 Bank charges and commission – 1.75

23.2.7 Related party transactionsRevenue transactions

Purchase of services – Infosys BPO (Poland) 0.41 0.03 Purchase of services – Infosys BPO s.r.o – 0.44 Purchase of services – Infosys Brasil 0.35 –

23.4 Transactions with key management personnelKey management personnel comprise directors and members of Executive Council.

Particulars of remuneration and other benefits paid to whole-time directors and members of Executive Council during the year ended March 31, 2011 and March 31, 2010 are as follows :

in r crore

Name Salary Contributions to provident and

other funds

Perquisites and incentives

Total remuneration

Co-Chairman (1)

Nandan M. Nilekani – – – – 0.09 0.02 0.23 0.34




S. D. Shibulal 0.34 0.08 0.66 1.08 0.31 0.08 0.56 0.95

Whole-time directors

K. Dinesh 0.34 0.08 0.68 1.10

0.32 0.08 0.61 1.01 T. V. Mohandas Pai 0.43 0.10 2.56 3.09

0.36 0.08 2.69 3.13 Srinath Batni 0.43 0.10 1.76 2.29

0.36 0.07 1.98 2.41

34 | Schedules


Name Salary Contributions to provident and

other funds

Perquisites and incentives

Total remuneration

Executive Council Members Chief Financial Officer

V. Balakrishnan 0.38 0.08 2.15 2.61 0.30 0.08 2.06 2.44

Ashok Vemuri 2.22 – 3.10 5.32 2.09 – 2.79 4.88


B. G. Srinivas 1.94 – 2.99 4.93 1.81 – 2.75 4.56

Subhash B. Dhar 0.30 0.08 1.69 2.07 0.24 0.07 1.42 1.73

Note : (1) Effective July 9, 2009, Nandan M. Nilekani relinquished the positions of Co-Chairman and Member of the Board

Particulars of remuneration and other benefits of non-executive / independent directors for the years ended March 31, 2011 and March 31, 2010 :in r crore

Name Commission Sitting fees Reimbursement of expenses

Total remuneration

Independent directors

Deepak M. Satwalekar 0.59 – 0.01 0.60 0.60 – – 0.60

Prof. Marti G. Subrahmanyam 0.79 – 0.23 1.02 0.65 – 0.20 0.85

Dr. Omkar Goswami 0.51 – 0.03 0.54 0.52 – 0.03 0.55

Claude Smadja (1) 0.23 – 0.09 0.32 0.59 – 0.25 0.84

Rama Bijapurkar (2) 0.04 – – 0.04

0.49 – 0.02 0.51Sridar A. Iyengar 0.69 – 0.24 0.93

0.62 – 0.21 0.83 David L. Boyles 0.65 – 0.34 0.99


0.61 – 0.24 0.85 K. V. Kamath 0.56 – 0.01 0.57

0.39 – 0.02 0.41 R. Seshasayee (3) 0.10 – – 0.10

– – – –Non-executive Chairman and Chief mentor

N. R. Narayana Murthy 0.61 – – 0.61 0.57 – – 0.57

Notes : (1) Retired from the board effective August 30, 2010 (2) Resigned from the board effective April 13, 2010 (3) Joined the board effective January 13, 2011

in r crore

Financial statements as per IFRS | 35


Financial statements as per IFRS

Auditors’ report to the Board of Directors of Infosys Technologies LimitedWe have audited the attached consolidated Balance Sheet of Infosys Technologies Limited (‘the Company’) and subsidiaries (collectively referred to as ‘the Infosys Group’) as at March 31, 2011, the related consolidated statements of comprehensive income for the year ended on that date, and the related consolidated statement of changes in equity and cash flows for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the International Financial Reporting Standards as issued by International Accounting Standards Board (‘IFRS’) :

• in the case of the consolidated Balance Sheet, of the financial position of the Infosys Group as of March 31, 2011;

• in the case of the consolidated statement of comprehensive income, of the financial performance of the Infosys Group for the year ended on that date;

• in the case of the consolidated statement of changes in equity, of the changes in equity of the Infosys Group for the year ended on that date; and

• in the case of the consolidated statement of cash flows, of the cash flows of the Infosys Group for the year ended on that date.

for B S R & Co.Chartered AccountantsFirm’s registration number : 101248W

Natrajh RamakrishnaPartnerMembership number : 32815

Bangalore

April 15, 2011

36 | Financial statements as per IFRS


Infosys Technologies Limited and subsidiaries

Consolidated Balance Sheet as of March 31, in r crore, except share data

Note 2011 2010ASSETS Current assets Cash and cash equivalents 2.1 16,666 12,111Available-for-sale financial assets 2.2 21 2,518Investment in certificates of deposit 123 1,190Trade receivables 4,653 3,494Unbilled revenue 1,243 841Derivative financial instruments 2.7 66 95Prepayments and other current assets 2.4 917 641Total current assets 23,689 20,890Non-current assetsProperty, plant and equipment 2.5 4,844 4,439Goodwill 2.6 825 829Intangible assets 2.6 48 56Available-for-sale financial assets 2.2 23 38Deferred income tax assets 2.17 378 346Income tax assets 2.17 993 667Other non-current assets 2.4 463 347Total non-current assets 7,574 6,722Total assets 31,263 27,612LIABILITIES AND EQUITY Current liabilities Trade payables 44 10Current income tax liabilities 2.17 817 724Client deposits 22 8Unearned revenue 518 531Employee benefit obligations 2.8 140 131Provisions 2.9 88 82Other current liabilities 2.10 2,012 1,707Total current liabilities 3,641 3,193Non-current liabilities Deferred income tax liabilities 2.17 – 114Employee benefit obligations 2.8 259 171Other non-current liabilities 2.10 60 61Total liabilities 3,960 3,539Equity Share capital – R 5 par value 60,00,00,000 equity shares authorized, issued and outstanding 57,13,17,959 and 57,09,91,592, net of 28,33,600 treasury shares each, as of March 31, 2011 and March 31, 2010, respectively 286 286Share premium 3,082 3,047Retained earnings 23,826 20,668Other components of equity 109 72Total equity attributable to equity holders of the Company 27,303 24,073Total liabilities and equity 31,263 27,612

Note : The accompanying notes form an integral part of the consolidated financial statements.


for B S R & Co.Chartered AccountantsFirm Reg No : 101248W

Natrajh Ramakrishna N. R. Narayana Murthy S. Gopalakrishnan S. D. Shibulal Deepak M. SatwalekarPartner Membership No. 32815

Chairman and Chief Mentor Chief Executive Officer and Managing Director


Director

Prof. Marti G. Subrahmanyam Dr. Omkar Goswami Sridar A. Iyengar David L. BoylesDirector Director Director Director

Prof. Jeffrey S. Lehman K. V. Kamath R. Seshasayee K. DineshDirector Director Director Director

Bangalore T. V. Mohandas Pai Srinath Batni V. Balakrishnan K. ParvatheesamApril 15, 2011 Director Director Chief Financial Officer Company Secretary




Consolidated statements of comprehensive incomein r crore, except share data

Note Year ended March 31,2011 2010

Revenues 27,501 22,742Cost of sales 15,916 13,020Gross profit 11,585 9,722Operating expensesSelling and marketing expenses 1,512 1,184Administrative expenses 1,971 1,628Total operating expenses 3,483 2,812Operating profit 8,102 6,910Other income, net 2.14 1,211 990Profit before income taxes 9,313 7,900Income tax expense 2.17 2,490 1,681Net profit 6,823 6,219Other comprehensive income Reversal of impairment loss on available-for-sale financial asset – 9Gain transferred to net profit on sale of available-for-sale financial asset – (5)Fair value changes on available-for-sale financial asset, net of tax effect (refer note 2.2 and 2.17) (12) 26Exchange differences on translating foreign operations 49 50Total other comprehensive income 37 80Total comprehensive income 6,860 6,299Profit attributable toOwners of the Company 6,823 6,219Non-controlling interest – –

6,823 6,219Total comprehensive income attributable toOwners of the Company 6,860 6,299Non-controlling interest – –

6,860 6,299Earnings per equity share

Basic (R) 119.45 109.02Diluted (R) 119.41 108.90

Weighted average equity shares used in computing earnings per equity share 2.18Basic 57,11,80,050 57,04,75,923Diluted 57,13,68,358 57,11,16,031

Note : The accompanying notes form an integral part of the consolidated financial statements.






Director







Consolidated statements of changes in equityin r crore, except share data

Shares Share capital Share premium

Retained earnings

Other components

of equity

Total equity attributable to

equity holders of the Company

Balance as of April 1, 2009 57,28,30,043 286 2,944 15,972 (8) 19,194Changes in equity for the year ended March 31, 2010 Shares issued on exercise of employee stock options 9,95,149 1 88 – – 89Share-based compensation – – 1 – – 1Treasury shares (1) (28,33,600) (1) 4 – – 3Reserves on consolidation of trusts – – – 46 – 46Income tax benefit arising on exercise of share options – – 10 – – 10Dividends (including corporate dividend tax) – – – (1,569) – (1,569)Reversal of impairment loss on available-for-sale financial asset – – – – 9 9 Gain transferred to net profit on sale of available-for-sale financial asset – – – – (5) (5) Fair value changes on available-for-sale financial assets, net of tax effect – – – – 26 26 Net profit – – – 6,219 – 6,219Exchange differences on translating foreign operations – – – – 50 50Balance as of March 31, 2010 57,09,91,592 286 3,047 20,668 72 24,073Changes in equity for the year ended March 31, 2011Shares issued on exercise of employee stock options 3,26,367 – 24 – – 24Income tax benefit arising on exercise of share options – – 11 – – 11Dividends (including corporate dividend tax) – – – (3,665) – (3,665)Fair value changes on available-for-sale financial assets, net of tax effect (refer note 2.2) – – – – (12) (12)Net profit – – – 6,823 – 6,823Exchange differences on translating foreign operations – – – – 49 49Balance as of March 31, 2011 57,13,17,959 286 3,082 23,826 109 27,303

Note : The accompanying notes form an integral part of the consolidated financial statements. (1) Treasury shares held by controlled trusts consolidated effective July 1, 2009






Director







Consolidated statements of cash flowsin r crore

Notes Year ended March 31,2011 2010

Operating activities : Net profit 6,823 6,219Adjustments to reconcile net profit to net cash provided by operating activities :Depreciation and amortization 2.5 and 2.6 862 942Income tax expense 2.17 2,490 1,681Share based compensation – 1Income on available-for-sale financial assets and certificates of deposit (101) (169)Profit on sale of property, plant and equipment – (2)Other non-cash item 4 2Changes in working capitalTrade receivables (1,158) 193Prepayments and other assets (236) (233)Unbilled revenue (401) (92)Trade payables 34 (17)Client deposits 13 3Unearned revenue (14) 199Other liabilities and provisions 447 (100)Cash generated from operations 8,763 8,627Income taxes paid 2.17 (2,856) (1,754)Net cash provided by operating activities 5,907 6,873

Investing activities :Payment for acquisition of business (2) (173)Expenditure on property, plant and equipment, including changes in retention money 2.5 and 2.10 (1,301) (657)Proceeds on sale of property, plant and equipment 1 2Loans to employees (31) 7Non-current deposits placed with corporation (100) (28)Income on available-for-sale financial assets 21 106Investment in certificates of deposit (840) (1,180)Redemption of certificates of deposit 1,985 –Investment in available-for-sale financial assets (1,932) (9,901)Redemption of available-for-sale financial assets 4,430 7,436Net cash provided by / (used in) investing activities 2,231 (4,388)

Financing activities :Proceeds from issuance of common stock on exercise of employee stock options 24 89Payment of dividends (3,141) (1,346)Payment of dividend tax (524) (223)Net cash used in financing activities (3,641) (1,480)Effect of exchange rate changes on cash and cash equivalents 58 63Net increase / (decrease) in cash and cash equivalents 4,497 1,005Cash and cash equivalents at the beginning 2.1 12,111 10,993Opening cash and cash equivalents of controlled trusts – 50Cash and cash equivalents at the end 2.1 16,666 12,111

Supplementary information :Restricted cash balance 2.1 108 71

Note : The accompanying notes form an integral part of the consolidated financial statements






Director






1. Company overview and significant accounting policies

1.1 Company overview Infosys Technologies Limited (‘Infosys’ or ‘the Company’) along with its controlled trusts, majority-owned and controlled subsidiary, Infosys BPO Limited (‘Infosys BPO’) and wholly-owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited (‘Infosys Australia’), Infosys Technologies (China) Company Limited (‘Infosys China’), Infosys Consulting, Inc. (‘Infosys Consulting’), Infosys Technologies S. de R. L. de C. V. (‘Infosys Mexico’), Infosys Technologies (Sweden) AB (‘Infosys Sweden’), Infosys Tecnologia do Brasil Ltda (‘Infosys Brasil’), Infosys Public Services, Inc., (‘Infosys Public Services’) and Infosys Technologies (Shanghai) Company Limited (‘Infosys Shanghai’) is a leading global technology services Company. The Infosys group of companies (‘the Group’) provides end-to-end business solutions that leverage technology thereby enabling its clients to enhance business performance. The Group’s operations are to provide solutions that span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the Group offers software products for the banking industry and business process management services.

The Company is a public limited Company incorporated and domiciled in India and has its registered office at Bangalore, Karnataka, India. The Company has its primary listing on the Bombay Stock Exchange and National Stock Exchange in India. The Company’s American Depositary Shares representing equity shares are also listed on the NASDAQ Global Select Market. The Company’s consolidated financial statements were authorized for issuance by the Company’s Board of Directors on April 15, 2011.

1.2 Basis of preparation of financial statements These consolidated financial statements have been prepared in compliance with the International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), under the historical cost convention on the accrual basis except for certain financial instruments and prepaid gratuity benefits which have been measured at fair values. Accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

1.3 Basis of consolidation Infosys consolidates entities which it owns or controls. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable are also taken into account. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Group companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. These financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company, are excluded.

1.4 Use of estimates The preparation of the financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of

accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 1.5. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

1.5 Critical accounting estimates

a. Revenue recognition The Company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the Company to estimate the efforts expended to date as a proportion of the total efforts to be expended. Efforts expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

b. Income taxes The Company’s two major tax jurisdictions are India and the U.S., though the Company also files tax returns in other overseas jurisdictions. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions (refer to note 2.17).

c. Business combinations and intangible assetsBusiness combinations are accounted for using IFRS 3 (Revised), Business Combinations. IFRS 3 requires the identifiable intangible assets and contingent consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets. These valuations are conducted by independent valuation experts.

1.6 Revenue recognition The Company derives revenues primarily from software development and related services, from business process management services and from the licensing of software products. Arrangements with customers for software development and related services and business process management services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price, fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method.

When there is uncertainty as to measurement or ultimate collectability revenue recognition is postponed until such uncertainty is resolved. Efforts expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates.

Notes to the consolidated financial statements



Costs and earnings in excess of billings are classified as unbilled revenue while billings in excess of costs and earnings are classified as unearned revenue. Maintenance revenue is recognized ratably over the term of the underlying maintenance arrangement.

In arrangements for software development and related services and maintenance services, the Company has applied the guidance in ‘IAS 18 Revenue’, by applying the revenue recognition criteria for each separately, identifiable component of a single transaction. The arrangements generally meet the criteria for considering software development and related services as separately identifiable components. For allocating the consideration, the Company has measured the revenue in respect of each separable component of a transaction at its fair value, in accordance with principles given in IAS 18. The price that is regularly charged for an item when sold separately is the best evidence of its fair value.

In cases where the Company is unable to establish objective and reliable evidence of fair value for the software development and related services, the Company has used a residual method to allocate the arrangement consideration. In these cases the balance of the consideration, after allocating the fair values of undelivered components of a transaction has been allocated to the delivered components for which specific fair values do not exist.

License fee revenues are recognized when the general revenue recognition criteria given in IAS 18 are met. Arrangements to deliver software products generally have three elements : license, implementation and Annual Technical Services (ATS). The Company has applied the principles given in IAS 18 to account for revenues from these multiple element arrangements. Objective and reliable evidence of fair value has been established for ATS. Objective and reliable evidence of fair value is the price charged when the element is sold separately. When other services are provided in conjunction with the licensing arrangement and objective and reliable evidence of their fair values have been established, the revenue from such contracts are allocated to each component of the contract in a manner, whereby revenue is deferred for the undelivered services and the residual amounts are recognized as revenue for delivered elements.

In the absence of objective and reliable evidence of fair value for implementation, the entire arrangement fee for license and implementation is recognized using the percentage-of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the services are performed. ATS revenue is recognized ratably over the period in which the services are rendered.

Advances received for services and products are reported as client deposits until all conditions for revenue recognition are met.

The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discounts / incentives amount to each of the underlying revenue transaction that results in progress by the customer towards earning the discount / incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer’s future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably.

The Company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

The Company presents revenues net of value-added taxes in its statement of comprehensive income.

1.7 Property, plant and equipment Property, plant and equipment are stated at cost, less accumulated depreciation and impairments, if any. The direct costs are capitalized until the property, plant and equipment are ready for use, as intended by the Management.

The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets for current and comparative periods are as follows :

Buildings 15 yearsPlant and machinery 5 yearsComputer equipment 2 – 5 yearsFurniture and fixtures 5 yearsVehicles 5 years


Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably.

Repairs and maintenance costs are recognized in net profit in the statement of comprehensive income when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in net profit in the statement of comprehensive income. Assets to be disposed of are reported at the lower of the carrying value or the fair value less cost to sell.

1.8 Business combinations Business combinations have been accounted for using the acquisition method under the provisions of IFRS 3 (Revised), Business Combinations.

The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.

Transaction costs that the Group incurs in connection with a business combination such as finders’ fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

1.9 Goodwill Goodwill represents the cost of business acquisition in excess of the Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the cost of business acquisition, a gain is recognized immediately in net profit in the statement of comprehensive income. Goodwill is measured at cost less accumulated impairment losses.

1.10 Intangible assets Intangible assets are stated at cost less accumulated amortization and impairments. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.



Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably.

The costs which can be capitalized include the cost of material, direct labor, overhead costs that are directly attributable to preparing the asset for its intended use. Research and development costs and software development costs incurred under contractual arrangements with customers are accounted as cost of sales.

1.11 Financial instruments Financial instruments of the Group are classified under the following categories : non-derivative financial instruments comprising of loans and receivables, available-for-sale financial assets and trade and other payables; derivative financial instruments under the category of financial assets or financial liabilities at fair value through profit or loss; share capital and treasury shares. The classification of financial instruments depend on the purpose for which those were acquired. The Management determines the classification of its financial instruments at initial recognition.

a. Non-derivative financial instruments

(i) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the Balance Sheet date which are presented as non-current assets. Loans and receivables are measured initially at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss or provisions for doubtful accounts. Loans and receivables are represented by trade receivables, net of allowances for impairment, unbilled revenue, cash and cash equivalents, prepayments, certificates of deposit and other assets.

Cash and cash equivalents comprise cash and bank deposits and deposits with corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. Certificates of deposit is a negotiable money market instrument for funds deposited at a bank or other eligible financial institution for a specified time period.

(ii) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or are not classified in any of the other categories. Available-for-sale financial assets are recognized initially at fair value plus transactions costs. Subsequent to initial recognition these are measured at fair value and changes therein, other than impairment losses and foreign exchange gains and losses on available-for-sale monetary items are recognized directly in other comprehensive income.

When an investment is de-recognized, the cumulative gain or loss in other comprehensive income is transferred to net profit in the statement of comprehensive income. These are presented as current assets unless the Management intends to dispose of the assets after 12 months from the Balance Sheet date.

(iii) Trade and other payables Trade and other payables are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest method.

b. Derivative financial instrumentsFinancial assets or financial liabilities, at fair value through profit or loss

This category has two sub-categories wherein, financial assets or financial liabilities are held for trading or are designated as such upon initial recognition.

A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short-term. Derivatives are categorized as held for trading unless they are designated as hedges.

The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in foreign exchange rates on trade receivables and forecasted cash flows denominated in certain foreign currencies. The counterparty for these contracts is generally a bank or a financial institution. Although the Company believes that these financial instruments constitute hedges from an economic perspective, they do not qualify for hedge accounting under IAS 39, Financial Instruments : Recognition and Measurement. Any derivative that is either not designated as a hedge, or is so designated but is ineffective as per IAS 39, is categorized as a financial asset, at fair value through profit or loss.

Derivatives are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of comprehensive income when incurred. Subsequent to initial recognition, derivatives are measured at fair value through profit or loss and the resultant exchange gains or losses are included in other income. Assets / liabilities in this category are presented as current assets / current liabilities if they are either held for trading or are expected to be realized within 12 months after the Balance Sheet date.

c. Share capital and treasury shares

Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

Treasury shares When any entity within the Group purchases the Company’s ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to / from retained earnings.

1.12 Impairment

a. Financial assets The Group assesses at each Balance Sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset is considered impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

(i) Loans and receivables Impairment loss in respect of loans and receivables measured at amortized cost are calculated as the difference between their carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Such impairment loss is recognized in net profit in the statement of comprehensive income.

(ii) Available-for-sale financial assets Significant or prolonged decline in the fair value of the security below its cost and the disappearance of an active trading market for the security are objective evidence that the security is impaired. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value and is recognized in net profit in the statement of comprehensive income. The cumulative loss that was recognized in other comprehensive income is transferred to net profit in the statement of comprehensive income upon impairment.



b. Non-financial assets

(i) Goodwill Goodwill is tested for impairment on an annual basis and whenever there is an indication that goodwill may be impaired, based on a number of factors including operating results, business plans and future cash flows. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Group’s Cash Generating Units (CGU) expected to benefit from the synergies arising from the business combination.

A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU.

Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized as net profit in the statement of comprehensive income and is not reversed in the subsequent period.

(ii) Intangible assets and property, plant and equipmentIntangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount, i.e. the higher of the fair value less cost, to sell and the value-in-use is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in net profit in the statement of comprehensive income is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset.

c. Reversal of impairment loss An impairment loss for financial assets is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of impairment loss for an asset other than goodwill and available-for-sale financial assets that are equity securities is recognized in net profit in the statement of comprehensive income. For available-for-sale financial assets that are equity securities, the reversal is recognized in other comprehensive income.

1.13 Fair value of financial instrumentsIn determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

For all other financial instruments the carrying amounts approximate

fair value due to the short maturity of those instruments.

The fair value of securities, which do not have an active market and where it is not practical to determine the fair values with sufficient reliability, are carried at cost less impairment.

1.14 Provisions A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

a. Post-sales client supportThe Company provides its clients with a fixed-period, post-sales support for corrections of errors and telephone support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales. The Company estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

b. Onerous contractsProvisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Group recognizes any impairment loss on the assets associated with that contract.

1.15 Foreign currency

Functional currencyThe functional currency of Infosys and Infosys BPO is the Indian rupee. The functional currencies for Infosys Australia, Infosys China, Infosys Consulting, Infosys Mexico, Infosys Sweden, Infosys Brasil, Infosys Public Services and Infosys Shanghai are the respective local currencies. These financial statements are presented in Indian rupees, rounded off to the nearest crore; one crore equals 10 million.

Transactions and translationsForeign currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in net profit in the statement of comprehensive income. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

The translation of financial statements of the foreign subsidiaries to the functional currency of the Company is performed for assets and liabilities using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using the average exchange rate for the respective periods. The gains or losses resulting from such translation are included in currency translation reserves under other



components of equity.

When a subsidiary is disposed of, in part or in full, the relevant amount is transferred to net profit in the statement of comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the Balance Sheet date.

1.16 Earnings per equity share Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value which is the average market value of the outstanding equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of equity shares and potentially dilutive equity shares are adjusted in retrospect for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

1.17 Income tax Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the statement of comprehensive income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date.

A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to share premium.

1.18 Employee benefits

1.18.1 Gratuity In accordance with the Payment of Gratuity Act, 1972, Infosys provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees’ Gratuity Fund Trust (‘the Trust’). In case of Infosys BPO, contributions are made to the Infosys BPO Employees’ Gratuity Fund Trust. Trustees administer contributions made to the Trusts and contributions are invested in specific designated instruments as permitted by law and investments are also made in mutual funds that invest in the specific designated instruments.

The Group recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability, respectively in accordance with IAS 19, Employee benefits. The discount rate is based on the government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to net profit in the statement of comprehensive income in the period in which they arise. When the computation results in a benefit to the Group, the recognized asset is limited to the net total of any unrecognized past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

1.18.2 SuperannuationCertain employees of Infosys are also participants in a defined contribution plan. The Company has no further obligations to the Plan beyond its monthly contributions. Certain employees of Infosys BPO are also eligible for superannuation benefit. Infosys BPO has no further obligations to the superannuation plan beyond its monthly contribution which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

Certain employees of Infosys Australia are also eligible for superannuation benefit. Infosys Australia has no further obligations to the superannuation plan beyond its monthly contribution.

1.18.3 Provident fundEligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee’s salary. The Company contributes a part of the contributions to the Infosys Technologies Limited Employees’ Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

In respect of Infosys BPO, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Infosys BPO make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee’s salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The Company has no further obligation to the plan beyond its monthly contributions.



1.18.4 Compensated absences The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is measured based on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

1.19 Share-based compensation The Group recognizes compensation expense relating to share-based payments in net profit using a fair-value measurement method in accordance with IFRS 2, Share-Based Payment. Under the fair value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period for each separately, treating the vesting portion of the award as if the award was in-substance, multiple awards. The Group includes a forfeiture estimate in the amount of compensation expense being recognized.

The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton valuation model. The expected term of an option is estimated based on the vesting term and contractual term of the option, as well as expected exercise behavior of the employee who receives the option. The expected volatility during the expected term of the option is based on historical volatility, during a period equivalent to the expected term of the option, of the observed market prices of the Company’s publicly traded equity shares. Expected dividends during the expected term of the option are based on recent dividend activity. Risk-free interest rates are based on the government securities yield in effect at the time of the grant over the expected term.

1.20 Dividends Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.

1.21 Operating profit Operating profit for the Group is computed considering the revenues, net of cost of sales, selling and marketing expenses and administrative expenses.

1.22 Other incomeOther income is comprised primarily of interest income and dividend income. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

1.23 LeasesLeases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight line basis in net profit in the statement of comprehensive income over the lease term.

1.24 Government grantsThe Group recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to depreciable fixed assets are treated as deferred income and are recognized in net profit in the statement of comprehensive income on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in net profit in the statement of comprehensive income over the periods necessary to match them with the related costs which they are intended to compensate.

1.25 Recent accounting pronouncements

1.25.1 Standards issued but not yet effectiveIFRS 9 Financial Instruments : In November 2009, International Accounting Standards Board issued IFRS 9, Financial Instruments : Recognition and Measurement, to reduce complexity of the current rules on financial instruments as mandated in IAS 39. The effective date for IFRS 9 is annual periods beginning on or after January 1, 2013 with permission for early adoption. IFRS 9 has fewer classification and measurement categories as compared to IAS 39 and has eliminated, held to maturity, available for sale and loans and receivables. Further it eliminates the rule based requirement of segregating embedded derivatives and tainting rules pertaining to, held to maturity investments. For an investment in an equity instrument which is not held for trading, the standard permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognized in other comprehensive income would ever be reclassified to Profit or Loss. The Group is required to adopt the standard by accounting year commencing April 1, 2014. The Group is currently evaluating the requirements of IFRS 9, and has not yet determined the impact on the consolidated financial statements.

2. Notes to the consolidated financial statements

2.1 Cash and cash equivalents Cash and cash equivalents consist of the following :

in r crore

As of March 31,2011 2010

Cash and bank deposits 15,095 10,556Deposits with corporations 1,571 1,555 16,666 12,111

Cash and cash equivalents as of March 31, 2011 and March 31, 2010 include restricted cash and bank balances of R 108 crore and R 71 crore respectively. The restrictions are primarily on account of cash and bank balances held by irrevocable trusts controlled by the Company and unclaimed dividends.

The deposits maintained by the Group with banks and corporations comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.



The following table provides details of cash and cash equivalents :in r crore

As of March 31,2011 2010

Current AccountsABN Amro Bank, China 17 33ABN Amro Bank, China (U.S. dollar account) 24 14ABN Amro Bank, Taiwan 3 2Bank of America, Mexico 4 18Bank of America, U.S. 296 686 Banamex, Mexico 2 2China Merchants Bank, China – 1Citibank NA, Australia 61 25Citibank NA, Brazil 5 9Citibank NA, China (U.S. dollar account) 11 –Citibank NA, Czech Republic (Euro account) – 2Citibank NA, Czech Republic (U.S. dollar account) – –Citibank NA., Czech Republic 1 –Citibank NA, New Zealand 2 1Citibank NA, Japan 17 2Citibank NA, India 2 2Citibank NA, India, Unclaimed dividend account 1 –Citibank NA, Thailand 1 1Deustche Bank, India 12 13Deutsche Bank, Czech Republic 1 –Deutsche Bank, Belgium 5 18Deutsche Bank, Poland – 2Deutsche Bank, France 3 1Deutsche Bank, Germany 5 12Deutsche Bank, Moscow (U.S. dollar account) – 1Deutsche Bank, Netherlands 2 7Deustche Bank, Philippines 1 –Deustche Bank, Philippines (U.S. dollar account) 1 3Deutsche Bank, Poland 1 –Deustche Bank, Poland (Euro account) 2 1Deutsche Bank, Spain 1 1Deutsche Bank, Singapore 3 1Deutsche Bank, Switzerland 1 10Deutsche Bank, Switzerland (U.S. dollar account) – 1Deustche Bank, Thailand – 3Deustche Bank, Thailand (U.S. dollar account) – 1Deutsche Bank, United Kingdom 40 29Deustche Bank – EEFC (Euro account) 8 3Deutsche Bank – EEFC (United Kingdom Pound Sterling account) – 1Deustche Bank – EEFC (Swiss Franc account) 2 –Deustche Bank – EEFC (U.S. dollar account) 143 8HSBC Bank, U.K. 10 2HDFC Bank – Unclaimed dividend account 1 1ICICI Bank, India 32 133ICICI Bank, U.K. 1 1ICICI Bank – EEFC (Euro account) – 1ICICI Bank – EEFC (United Kingdom Pound Sterling account) 1 2ICICI Bank – EEFC (U.S. dollar account) 22 10

As of March 31,2011 2010

ICICI bank – Unclaimed dividend account 1 1National Australia Bank Limited, Australia 1 21National Australia Bank Limited, Australia (U.S. dollar account) – 14Nordbanken, Sweden 5 1Royal Bank of Canada, Canada 23 20Shanghai Pudong Development Bank, China 2 –Wachovia Bank, U.S. – 7

777 1,128Deposit AccountsABN Amro Bank, China 14 –Andhra Bank 399 99Allahabad Bank 561 150Axis Bank 536 –Bank of America 82 –Bank of America, Mexico 17 –Bank of Baroda 1,100 299Bank of India 1,197 881Bank of Maharashtra 506 500Barclays Bank – 100Canara Bank 1,329 963Central Bank of India 354 100Corporation Bank 295 276Citibank NA, Czech Republic 5 9Citibank NA, Czech Republic, U.S. dollar 1 –Citibank (Euro account) – 3Citibank (U.S. dollar account) – 4Citibank Brazil 3 –Deustche Bank, Poland 21 8DBS Bank – 49HDFC Bank 646 –HSBC Bank – 483HSBC Bank, U.K. 18 –ICICI Bank 788 1,435IDBI Bank 770 909ING Vysya Bank – 25Indian Overseas Bank 518 140Jammu and Kashmir Bank 12 10Kotak Mahindra Bank 25 61National Australia Bank Limited, Australia 546 312Nordbanken, Sweden 1 –Oriental Bank of Commerce 653 100Punjab National Bank 1,493 994South Indian Bank 50 –State Bank of Hyderabad 255 233State Bank of India 457 126State Bank of Mysore 354 496Syndicate Bank 504 475Union Bank of India 631 93Vijaya Bank 144 95Yes Bank 33 –

14,318 9,428Deposits with corporationsHDFC Limited 1,571 1,551Sundaram BNP Paribas Home Finance Limited – 4

1,571 1,555Total 16,666 12,111

in r crore



2.2 Available-for-sale financial assetsInvestments in liquid mutual fund units and unlisted equity securities are classified as available-for-sale financial assets.

Cost and fair value of investment in liquid mutual fund units and unlisted equity securities are as follows :

in r crore

As of March 31,2011 2010

CurrentLiquid mutual fund units :

Cost and fair value 21 2,518Non CurrentUnlisted equity securities :

Cost 4 4Gross unrealized holding gains 19 34Fair value 23 38

Total available-for-sale financial assets 44 2,556

During February 2010, Infosys sold 32,31,151 shares of OnMobile Systems Inc., U.S., at a price of R 166.58 per share, derived from quoted prices of the underlying marketable equity securities. The total consideration amounted to R 53 crore, net of taxes and transaction costs. The resultant income of R 48 crore was included under other income for the year ended March 31, 2010. Additionally, the remaining 21,54,100 shares had been fair valued at R 38 crore as at March 31, 2010. As of March 31, 2011 the 21,54,100 shares were fair valued at R 23 crore and the resultant unrealized loss of R 12 crore, net of taxes of R 3 crore has been recognized in other comprehensive income for the year ended March 31, 2011. The fair value of R 23 crore has been derived based on an agreed upon exchange ratio between these unlisted equity securities and quoted prices of the underlying marketable equity securities.

2.3 Business combinations During the year ended March 31, 2010 Infosys BPO acquired 100% of the voting interests in McCamish Systems LLC (McCamish), a business process solutions provider based in Atlanta, Georgia, in the United States. The business acquisition was conducted by entering into Membership Interest Purchase Agreement for a cash consideration of R 173 crore and a contingent consideration of up to R 93 crore. The fair value of contingent consideration and its undiscounted value on the date of acquisition were R 40 crore and R 67 crore, respectively.

During the year ended March 31, 2011, the liability related to contingent consideration increased by R 4 crore due to the passage of time.

This business acquisition is expected to enable Infosys BPO to deliver growth in platform-based services in the insurance and financial services industry and is also expected to enable McCamish to service larger portfolios of transactions for clients and expand into global markets. Consequently, the excess of the purchase consideration paid over the fair value of assets acquired has been accounted for as goodwill.

The purchase price has been allocated based on the Management’s estimates and independent appraisal of fair values as follows :

in r crore

Component Acquiree’s carrying amount

Fair value adjustments

Purchase price

allocatedProperty, plant and equipment 5 – 5Net current assets 9 – 9Intangible assets-Customer contracts and relationships – 48 48Intangible assets-Computer software platform – 13 13 14 61 75 Goodwill 138Total purchase price 213

Of the goodwill stated above, goodwill to the extent of R 95 crore is deductible for tax purposes.

The amount of trade receivables acquired from the above business acquisition was R 16 crore. The entire amount has been collected subsequently.

The identified intangible customer contracts and relationships are being amortized over a period of nine years whereas the identified intangible computer software platform has been amortized over a period of four months, based on the Management’s estimate of the useful life of the assets.

The acquisition date fair value of each major class of consideration as of the acquisition date is as follows :

in r crore

Particulars Consideration settledFair value of total consideration Cash paid 161 Liabilities settled in cash 12Contingent consideration 40Total 213

The payment of contingent consideration is dependent upon the achievement of certain revenue targets and net margin targets by McCamish over a period of 4 years ending March 31, 2014. Further, contingent to McCamish signing any deal with a customer with total revenues of US$ 100 million or more, the aforesaid period will be extended by 2 years. The total contingent consideration can range between R 67 crore and R 93 crore.

The fair value of the contingent consideration is determined by discounting the estimated amount payable to the previous owners of McCamish on achievement of certain financial targets. The key inputs used for the determination of fair value of contingent consideration are the discount rate of 13.9% and the probabilities of achievement of the net margin and the revenue targets ranging from 50% to 100%.

2.4 Prepayments and other assets Prepayments and other assets consist of the following :

in r crore

As of March 31, 2011 2010

Current Rental deposits 43 36Security deposits with service providers 63 63Loans to employees 137 106Prepaid expenses (1) 47 39Interest accrued and not due 21 9Withholding taxes (1) 548 343Advance payments to vendors for supply of goods (1) 36 19Other assets 22 26

917 641Non-current Loans to employees 4 6Deposit with corporation 437 337Prepaid expenses (1) 20 –Prepaid gratuity and other benefits (1) 2 4

463 3471,380 988

Financial assets in prepayments and other assets 727 583

(1) Non-financial assets

Withholding taxes primarily consist of input tax credits. Other assets primarily represent travel advances and other recoverable from customers. Security deposits with service providers relate principally to leased telephone lines and electricity supplies.

Deposit with corporation represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

48 | Financial statements as per IFR

S

Infosys Additional inform

ation 2010-11

2.5 Property, plant and equipment Following are the changes in the carrying value of property, plant and equipment for the year ended March 31, 2011 :

in r crore

Land Buildings Plant and machinery

Computer equipment

Furniture and fixtures

Vehicles Capital work-in-progress

Total

Gross carrying value as of April 1, 2010 327 3,300 1,263 1,251 765 5 409 7,320Additions 224 326 170 291 126 2 116 1,255Deletions – – (147) (219) (123) – – (489)Translation difference – – – 9 3 – – 12Gross carrying value as of March 31, 2011 551 3,626 1,286 1,332 771 7 525 8,098Accumulated depreciation as of April 1, 2010 – (745) (648) (1,046) (440) (2) – (2,881)

Depreciation – (233) (237) (236) (147) (1) – (854)Accumulated depreciation on deletions – – 147 219 123 – – 489Translation difference – – 1 (7) (2) – – (8)Accumulated depreciation as of March 31, 2011 – (978) (737) (1,070) (466) (3) – (3,254)Carrying value as of April 1, 2010 327 2,555 615 205 325 3 409 4,439Carrying value as of March 31, 2011 551 2,648 549 262 305 4 525 4,844

Following are the changes in the carrying value of property, plant and equipment for the year ended March 31, 2010 : in r crore

Land Buildings Plant and machinery

Computer equipment

Furniture and fixtures

Vehicles Capital work-in-progress

Total

Gross carrying value as of April 1, 2009 285 2,913 1,183 1,233 774 4 677 7,069Additions 42 387 212 199 101 1 (268) 674 Acquisition through business combination – – – 5 – – – 5Deletions – – (133) (186) (110) – – (429)Translation difference – – 1 – – – – 1Gross carrying value as of March 31, 2010 327 3,300 1,263 1,251 765 5 409 7,320 Accumulated depreciation as of April 1, 2009 – (535) (521) (960) (387) (1) – (2,404)Depreciation – (210) (259) (272) (163) (1) – (905)Accumulated depreciation on deletions – – 132 186 110 – – 428Accumulated depreciation as of March 31, 2010 – (745) (648) (1,046) (440) (2) – (2,881)Carrying value as of April 1, 2009 285 2,378 662 273 387 3 677 4,665Carrying value as of March 31, 2010 327 2,555 615 205 325 3 409 4,439

During the years ended March 31, 2011 and March 31, 2010, certain assets which were not in use having gross book value of R 488 crore and R 387 crore, respectively, (carrying value nil) were retired.

The depreciation expense for the years ended March 31, 2011 and March 31, 2010 is included in cost of sales in the statement of comprehensive income.

Carrying value of land includes R 146 crore and R 149 crore as of March 31, 2011 and March 31, 2010 respectively, towards deposits paid under certain lease-cum-sale agreements to acquire land including agreements where the Company has an option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the market value of the properties prevailing at the time of entering into the lease-cum-sale agreements with the balance payable at the time of purchase. The contractual commitments for capital expenditure were R 814 crore and R 301 crore, as of March 31, 2011 and March 31, 2010 respectively.



2.6 Goodwill and intangible assets Following is a summary of changes in the carrying amount of goodwill :

in r crore

As of March 31, 2011 2010

Carrying value at the beginning 829 692Goodwill recognized on acquisition (refer note 2.3) – 138Translation differences pertaining to foreign subsidiary (4) (1)Carrying value at the end 825 829

Goodwill has been allocated to the cash generating units (CGU), identified to be the operating segments as follows :

in r crore

Segment As of March 31,2011 2010

Financial services 400 403Manufacturing 96 94Telecom 14 15Retail 226 228Others 89 89Total 825 829

The entire goodwill relating to Infosys BPO’s acquisition of McCamish has been allocated to the ‘Financial services’ segment.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the CGU which are operating segments regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance.

The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. The fair value of a CGU is determined based on the market capitalization. The value-in-use is determined based on specific calculations. These calculations use pre-tax cash flow projections over a period of five years, based on financial budgets approved by the Management and an average of the range of each assumption mentioned below.

As of March 31, 2011, the estimated recoverable amount of the CGU exceeded its carrying amount. The recoverable amount was computed based on the fair value being higher than value-in-use and the carrying amount of the CGU was computed by allocating the net assets to operating segments for the purpose of impairment testing. The key assumptions used for the calculations are as follows :

In % Long-term growth rate 8 – 10Operating margins 17 – 20Discount rate 13

The above discount rate is based on the Weighted Average Cost of Capital (WACC) of the Company. These estimates are likely to differ from future actual results of operations and cash flows.

Following is a summary of changes in the carrying amount of acquired intangible assets :

in r crore

As of March 31,2011 2010

Gross carrying value at the beginning 117 56Customer contracts and relationships (refer note 2.3) – 48Computer software platform (refer note 2.3) – 13Gross carrying value at the end 117 117 Accumulated amortization at the beginning 61 21Amortization expense 8 37Translation differences – 3Accumulated amortization at the end 69 61Net carrying value 48 56

The intangible customer contracts recognized at the time of acquisition of Philips BPO operations are being amortized over a period of seven years, being the Management’s estimate of its useful life, based on the life over which economic benefits are expected to be realized. However, during the year ended March 31, 2010 the amortization of this intangible asset has been accelerated based on the usage pattern of the asset. As of March 31, 2011, the customer contracts have a remaining amortization period of approximately four years.

The intangible customer contracts and relationships recognized at the time of McCamish acquisition are being amortized over a period of nine years, being management’s estimate of its useful life, based on the life over which economic benefits are expected to be realized. As of March 31, 2011, the customer contracts and relationships have a remaining amortization period of eight years.

The intangible computer software platform recognized at the time of McCamish acquisition having a useful life of four months, being management’s estimate of its useful life, based on the life over which economic benefits were expected to be realized, has been fully amortized.

The aggregate amortization expense included in cost of sales, for the years ended March 31, 2011 and March 31, 2010 was R 8 crore and R 37 crore respectively.

Research and development expense recognized in net profit in the statement of comprehensive income, for the years ended March 31, 2011 and March 31, 2010 was R 528 crore and R 435 crore respectively.



2.7 Financial instruments

Financial instruments by category The carrying value and fair value of financial instruments by categories as of March 31, 2011 were as follows :

in r crore

Loans and receivables

Financial assets /

liabilities at fair value

through profit and loss

Available for sale

Trade and other payables

Total carrying value / fair

value

Assets Cash and cash equivalents (refer note 2.1) 16,666 – – – 16,666Available-for-sale financial assets (refer note 2.2) – – 44 – 44Investment in certificates of deposit 123 – – – 123Trade receivables 4,653 – – – 4,653Unbilled revenue 1,243 – – – 1,243Prepayments and other assets (refer note 2.4) 727 – – – 727Derivative financial instruments – 66 – – 66Total 23,412 66 44 – 23,522Liabilities Trade payables – – – 44 44Client deposits – – – 22 22Employee benefit obligations (refer note 2.8) – – – 399 399Other liabilities (refer note 2.10) – – – 1,678 1,678Liability towards acquisition of business on a discounted basis (refer note 2.10) – – – 43 43Total – – – 2,186 2,186

The carrying value and fair value of financial instruments by categories as of March 31, 2010 were as follows : in r crore

Loans and receivables

Financial assets /

liabilities at fair value

through profit and loss

Available for sale

Trade and other payables

Total carrying value / fair

value

Assets Cash and cash equivalents (refer note 2.1) 12,111 – – – 12,111Available-for-sale financial assets (refer note 2.2) – – 2,556 – 2,556Investment in certificates of deposit 1,190 – – – 1,190Trade receivables 3,494 – – – 3,494Unbilled revenue 841 – – – 841Derivative financial instruments – 95 – – 95Prepayments and other assets (refer note 2.4) 583 – – – 583Total 18,219 95 2,556 – 20,870LiabilitiesTrade payables – – – 10 10Client deposits – – – 8 8Employee benefit obligations (refer note 2.8) – – – 302 302Other liabilities (refer note 2.10) – – – 1,452 1,452Liability towards acquisition of business on a discounted basis (refer note 2.10) – – – 40 40Total – – – 1,812 1,812



Fair value hierarchy

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or

indirectly (derived from prices). Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2011 :in r crore

As of March 31,

2011

Fair value measurement at end of the reporting period / year using

Level 1 Level 2 Level 3Assets Available-for-sale financial asset – investments in liquid mutual fund units (refer note 2.2) 21 21 – –Available-for-sale financial asset – investments in unlisted equity instruments (refer note 2.2) 23 – 23 –Derivative financial instruments – gains on outstanding foreign exchange forward and option contracts 66 – 66 –

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2010 :in r crore

As of March 31,

2010

Fair value measurement at end of the reporting period / year using

Level 1 Level 2 Level 3Assets Available-for-sale financial asset – investments in liquid mutual fund units (refer note 2.2) 2,518 2,518 – – Available-for-sale financial asset – investments in unlisted equity instruments (refer note 2.2) 38 – 38 –Derivative financial instruments – gains on outstanding foreign exchange forward and option contracts 95 – 95 –

Income from financial assets or liabilities that are not at fair value through profit or loss is as follows : in r crore


Interest income on deposits and certificates of deposit 1,133 779Income from available-for-sale financial assets 23 160 1,156 939

Derivative financial instruments The Company uses derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in foreign exchange rates on trade receivables and forecasted cash flows denominated in certain foreign currencies. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace. The following table gives details in respect of outstanding foreign exchange forward and option contracts :

As of As ofMarch 31, 2011 March 31, 2010

In million In R crore In million In R croreForward contracts In U.S. dollars 546 2,433 267 1,199In Euro 28 177 22 130In GBP 15 108 11 71In AUD 10 46 3 12Option contractsIn U.S. dollars – – 200 898

2,764 2,310

The Company recognized a net gain on derivative financial instruments of R 56 crore during the year ended March 31, 2011 as against a net gain on derivative financial instruments of R 299 crore during the year ended March 31, 2010, respectively, which are included as other income.



The foreign exchange forward and option contracts mature between 1 to 12 months. The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the Balance Sheet date :

in r crore

As of March 31, 2011 2010

Not later than one month 435 280Later than one month and not later than three months 649 825Later than three months and not later than one year 1,680 1,205 2,764 2,310

Financial risk management

Financial risk factors The Company’s activities expose it to a variety of financial risks : market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The demographics of the customer, including the default risk of the industry and country in which the customer operates also has an influence on the credit risk assessment.

Market risk The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in the United States and elsewhere, and purchases from overseas suppliers in various foreign currencies. The Company uses derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in foreign exchange rates on trade receivables and forecasted cash flows denominated in certain foreign currencies. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations are adversely affected as the rupee appreciates / depreciates against these currencies.

The following table gives details in respect of the outstanding foreign exchange forward and option contracts :

in r crore

As of March 31, 2011 2010

Aggregate amount of outstanding forward and option contracts 2,764 2,310Gains / (losses) on outstanding forward and option contracts 66 95

The outstanding foreign exchange forward and option contracts as of March 31, 2011 and March 31, 2010, mature between one to twelve months.

The following table analyzes foreign currency risk from financial instruments as of March 31, 2011 : in r crore

U.S. dollars Euro United Kingdom Pound Sterling

Australian dollars

Other currencies

Total

Cash and cash equivalents 589 40 69 532 138 1,368Trade receivables 3,095 407 475 294 221 4,492Unbilled revenue 731 180 97 65 71 1,144Other assets 589 12 61 – 38 700Trade payables (1) – (1) – (11) (13)Client deposits (20) – – – (1) (21)Accrued expenses (232) (17) 15 – (37) (271)Accrued compensation to employees (134) – (14) – (60) (208)Other liabilities (1,468) (180) (28) (4) (68) (1,748)Net assets / (liabilities) 3,149 442 674 887 291 5,443

The following table analyzes foreign currency risk from financial instruments as of March 31, 2010 : in r crore

U.S. dollars Euro United Kingdom Pound Sterling

Australian dollars

Other currencies

Total

Cash and cash equivalents 764 46 31 315 123 1,279Trade receivables 2,446 254 370 204 177 3,451Unbilled revenue 567 72 110 32 39 820Other assets 481 13 11 1 45 551Trade payables (1) (1) – – (7) (9)Client deposits (7) – – – – (7)Accrued expenses (254) (16) – – (26) (296)Accrued compensation to employees (149) (2) – – (48) (199)Other liabilities (1,128) (137) (56) – (36) (1,357)Net assets / (liabilities) 2,719 229 466 552 267 4,233

For the year ended March 31, 2011 and March 31, 2010, every percentage point depreciation / appreciation in the exchange rate between the Indian rupee and U.S. dollar, has affected the Company’s operating margins by approximately 0.5% and 0.6% respectively.

Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting period and the current reporting period.



Credit risk Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to R 4,653 crore and R 3,494 crore as of March 31, 2011 and March 31, 2010, respectively and unbilled revenue amounting to R 1,243 crore and R 841 crore as of March 31, 2011 and March 31, 2010, respectively.

Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in the United States. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The following table provides details in respect of percentage of revenues generated from the top customer and the top five customers :

in %


Revenue from top customer 4.7 4.6Revenue from top five customers 15.4 16.4

Financial assets that are neither past due nor impaired Cash and cash equivalents, available-for-sale financial assets and investment in certificates of deposits are neither past due nor impaired. Cash and cash equivalents include deposits with banks and corporations with high credit-ratings assigned by international and domestic credit-rating agencies. Available-for-sale financial assets include investment in liquid mutual fund units and unlisted equity securities. Certificates of deposit represent funds deposited at a bank or other eligible financial institution for a specified time period. Of the total trade receivables, R 3,350 crore and R 2,444 crore as of March 31, 2011 and March 31, 2010, respectively, were neither past due nor impaired.

Financial assets that are past due but not impaired There is no other class of financial assets that is not past due but impaired except for trade receivables of R 3 crore and nil as of March 31, 2011 and March 31, 2010, respectively.

The Company’s credit period generally ranges from 30 – 45 days. The age analysis of the trade receivables have been considered from the due date.

The age-wise break up of trade receivables, net of allowances that are past due, is as follows :

in r crore

Period (in days) As of March 31,2011 2010

Less than 30 929 80031 – 60 193 15261 – 90 61 43More than 90 117 55

1,300 1,050

The allowance for impairment of trade receivables for the years ended March 31, 2011 and March 31, 2010 was R 2 crore and less than R 1 crore, respectively. The movement in the allowance for impairment of trade receivables is as follows :

in r crore


Balance at the beginning 102 106Translation differences (5) 2Impairment loss recognized (refer note 2.11) 2 –Trade receivables written off (13) (6)Balance at the end 86 102

Liquidity riskAs of March 31, 2011, the Company had a working capital of R 20,048 crore including cash and cash equivalents of R 16,666 crore, available-for-sale financial assets of R 21 crore and investments in certificates of deposit of R 123 crore. As of March 31, 2010, the Company had a working capital of R 17,697 crore including cash and cash equivalents of R 12,111 crore, available-for-sale financial assets of R 2,518 crore and investments in certificates of deposit of R 1,190 crore.

As of March 31, 2011 and March 31, 2010, the outstanding employee benefit obligations were R 399 crore and R 302 crore, respectively, which have been fully funded. Further, as of March 31, 2011 and March 31, 2010, the Company had no outstanding bank borrowings. Accordingly, no liquidity risk is perceived.

The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2011 : in r crore

Particulars Less than 1 year 1 – 2 years 2 – 4 years 4 – 7 years Total Trade payables 44 – – – 44 Client deposits 22 – – – 22 Other liabilities (refer note 2.10) 1,658 20 – – 1,678 Liability towards acquisition of business on an undiscounted basis (refer note 2.10) 4 10 43 8 65

The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2010 : in r crore

Particulars Less than 1 year 1 – 2 years 2 – 4 years 4 – 7 years Total Trade payables 10 – – – 10Client deposits 8 – – – 8Other liabilities (refer note 2.10) 1,431 – 21 – 1,452Liability towards acquisition of business on an undiscounted basis (refer note 2.10) – 9 27 31 67

As of March 31, 2011 and March 31, 2010, the Company had outstanding financial guarantees of R 21 crore and R 18 crore, respectively, towards leased premises. These financial guarantees can be invoked upon breach of any term of the lease agreement. To the Company’s knowledge, there has been no breach of any term of the lease agreement as of March 31, 2011 and March 31, 2010.



2.8 Employee benefit obligations Employee benefit obligations comprise the following :

in r crore

As of March 31, 2011 2010

Current Compensated absence 140 131 140 131Non-current Compensated absence 259 171 259 171 399 302

2.9 Provisions Provisions comprise the following :

in r crore

As of March 31, 2011 2010

Provision for post-sales client support 88 82

Provision for post-sales client support represents cost associated with providing post-sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 6 months to 1 year. The movement in the provision for post-sales client support is as follows :

in r crore


Balance at the beginning 82 92Provision recognized / (reversed) (refer note 2.11) 5 (2)Provision utilized – (8)Translation difference 1 –Balance at the end 88 82

Provision for post-sales client support for the years ended March 31, 2011 and March 31, 2010 is included in cost of sales in the statement of comprehensive income.

2.10 Other liabilities Other liabilities comprise the following :

in r crore

As of March 31,2011 2010

CurrentAccrued compensation to employees 732 667Accrued expenses 771 606Withholding taxes payable (1) 329 250Retainage 26 72Unamortized negative past service cost (refer note 2.12.1) (1) 22 26Liabilities arising on consolidation of trusts 119 74Liability towards acquisition of business 3 –Others 10 12 2,012 1,707Non-currentLiability towards acquisition of business 40 40Incentive accruals 20 21

60 612,072 1,768

Financial liabilities included in other liabilities (excluding liability towards acquisition of business) 1,678 1,452

As of March 31,2011 2010

Financial liability towards acquisition of business on a discounted basis 43 40Financial liability towards acquisition of business on an undiscounted basis (refer note 2.3) 65 67

(1) Non financial liabilities

Accrued expenses primarily relates to cost of technical sub-contractors, telecommunication charges, legal and professional charges, brand building expenses, overseas travel expenses and office maintenance. Others include unclaimed dividend balances.

2.11 Nature of expenses in r crore


Employee benefit costs (refer note 2.12.4) 14,856 12,093Depreciation and amortization charges (refer note 2.5 and 2.6) 862 942Travel costs 954 692

Consultancy and professional charges 344 278Software packages for own use 350 336Third party items bought for service delivery 139 17Communication costs 237 225Cost of technical sub-contractors 603 372Power and fuel 167 145Office maintenance 222 165Repairs and maintenance 134 95Rates and taxes 54 31Insurance charges 33 31Commission 15 16Branding and marketing expenses 104 73Consumables 27 25Provision for post-sales client support (refer note 2.9) 5 (2)Allowance for impairment of trade receivables (refer note 2.7) 2 –Postage and courier 13 12Printing and stationery 14 12Operating lease payments (refer note 2.15) 146 125Others 118 149Total cost of sales, selling and marketing expenses and administrative expenses 19,399 15,832

2.11.1 Break up of expenses

Cost of salesin r crore


Employee benefit costs 12,971 10,617Depreciation and amortization 862 942Travel costs 690 488Software packages for own use 350 336Third party items bought for service delivery 139 17Cost of technical sub-contractors 603 372Consumables 27 25Operating lease payments 90 73

in r crore




Communication costs 82 83Repairs and maintenance 53 29Provision for post-sales client support 5 (2)Other expenses 44 40Total 15,916 13,020

Sales and marketing expensesin r crore


Employee benefit costs 1,218 935Travel costs 128 106Branding and marketing 97 73Operating lease payments 17 15Communication costs 17 14Commission 15 16Consultancy and professional charges 16 23Printing and stationery 1 1Others 3 1Total 1,512 1,184

Administrative expenses in r crore


Employee benefit costs 667 541Consultancy and professional charges 328 255Repairs and maintenance 81 66Office maintenance 222 165Power and fuel 167 145Communication costs 138 128Travel costs 136 98Allowance for impairment of trade receivables 2 –Rates and taxes 54 31Insurance charges 33 31Operating lease payments 39 37Postage and courier 13 12Printing and stationery 13 11Branding and marketing 7 –Other expenses 71 108Total 1,971 1,628

2.12 Employee benefits

2.12.1 Gratuity The following tables set out the funded status of the gratuity plans and the amounts recognized in the Company’s financial statements as of March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008 :

in r crore

As of March 31,2011 2010 2009 2008

Change in benefit obligations Benefit obligations at the beginning 325 267 224 225Service cost 178 80 51 50Interest cost 25 19 16 17Actuarial (gains) / losses 17 (5) 1 (8)Benefits paid (65) (36) (25) (23)Amendment in benefit plan – – – (37)Benefit obligations at the end 480 325 267 224Change in plan assets Fair value of plan assets at the beginning 327 268 236 225Expected return on plan assets 36 25 17 18Actuarial gains – 1 5 2Employer contributions 182 69 35 14Benefits paid (65) (36) (25) (23)Fair value of plan assets at the end 480 327 268 236Funded status – 2 1 12Prepaid gratuity benefit 2 4 1 12Accrued gratuity (2) (2) – –

Net gratuity cost for the years ended March 31, 2011 and March 31, 2010 comprises the following components : in r crore

Year ended March 31, 2011 2010

Service cost 178 80Interest cost 25 19Expected return on plan assets (36) (25)Actuarial (gains) / Losses 17 (6)Plan amendments (4) (3)Net gratuity cost 180 65

in r crore



The net gratuity costs have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows :

in r crore


Cost of sales 157 57Selling and marketing expenses 15 5Administrative expenses 8 3 180 65

Effective July 1, 2007, the Company amended its Gratuity Plan, to suspend the voluntary defined death benefit component of the Gratuity Plan. This amendment resulted in a negative past service cost amounting to R 37 crore, which is being amortized on a straight-line basis over the average remaining service period of employees which is 10 years. The unamortized negative past service cost of R 22 crore and R 26 crore as of March 31, 2011 and March 31, 2010, respectively, has been included under other current liabilities.

The weighted-average assumptions used to determine benefit obligations as of March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008 are as follows :

As of March 31,2011 2010 2009 2008

Discount rate 8.0% 7.8% 7.0% 7.9%Weighted average rate of increase in compensation levels 7.3% 7.3% 5.1% 5.1%

The weighted-average assumptions used to determine net periodic benefit cost for the year ended March 31, 2011 and March 31, 2010 are as follows :


Discount rate 7.8% 7.0%Weighted average rate of increase in compensation levels 7.3% 7.3%Rate of return on plan assets 9.4% 9.0%

The Company contributes all ascertained liabilities towards gratuity to the Infosys Technologies Limited Employees’ Gratuity Fund Trust. In case of Infosys BPO, contributions are made to the Infosys BPO Employees’ Gratuity Fund Trust. Trustees administer contributions made to the trust and contributions are invested in specific designated instruments as permitted by Indian law and investments are also made in mutual funds that invest in the specific designated instruments. As of March 31, 2011 and March 31, 2010 the plan assets have been primarily invested in government securities.

Actual return on assets for the year ended March 31, 2011 and March 31, 2010 was R 36 crore and R 26 crore, respectively.

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The Company’s overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made, and historical returns. Historical returns during the year ended March 31, 2011 and March 31, 2010 have not been lower than the expected rate of return on plan assets estimated for those years. The discount rate is based on the government securities yield. The Company expects to contribute approximately R 106 crore to the gratuity trusts during fiscal 2012.

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.

2.12.2 Superannuation The Company contributed R 109 crore and R 91 crore to the superannuation plan during the year ended March 31, 2011 and March 31, 2010, respectively.

Superannuation contributions have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows :

in r crore



2.12.3 Provident fund The Company has an obligation to fund any shortfall on the yield of the trust’s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. In the absence of reliable measures for future administered rates and due to the lack of measurement guidance, the Company’s actuary has expressed its inability to determine the actuarial valuation for such provident fund liabilities. Accordingly, the Company is unable to exhibit the related information.

The Company contributed R 198 crore and R 171 crore to the provident fund during the year ended March 31, 2011 and March 31, 2010, respectively.

Provident fund contributions have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows :

in r crore



2.12.4 Employee benefit costs include : in r crore


Salaries and bonus 14,369 11,765Defined contribution plans 128 112Defined benefit plans 359 215Share based compensation – 1 14,856 12,093

The employee benefit cost is recognized in the following line items in the statement of comprehensive income :

in r crore


Cost of sales 12,971 10,617Selling and marketing expenses 1,218 935Administrative expenses 667 541 14,856 12,093



2.13 Equity

Share capital and share premium The Company has only one class of shares referred to as equity shares having a par value of R 5/-. The amount received in excess of the par value has been classified as share premium. Additionally, share-based compensation recognized in net profit in the statement of comprehensive income is credited to share premium. 28,33,600 shares were held by the controlled trust, each as of March 31, 2011 and March 31, 2010.

Retained earnings Retained earnings represent the amount of accumulated earnings of the Company.

Other components of equity Other components of equity consist of currency translation and fair value changes on available-for-sale financial assets.

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As of March 31, 2011, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure there are no externally imposed capital requirements.

The rights of equity shareholders are set out below.

2.13.1 Voting Each holder of equity shares is entitled to one vote per share. The equity shares represented by American Depositary Shares (ADS) carry similar rights to voting and dividends as the other equity shares. Each ADS represents one underlying equity share.

2.13.2 Dividends The Company declares and pays dividends in Indian rupees. Indian law mandates that any dividend declared out of accumulated distributable profits can be done only after the transfer to a general reserve of a specified percentage of net profit computed in accordance with current regulations. The remittance of dividends outside India is governed by the Indian law on foreign exchange and is subject to applicable distribution taxes.

The amount of per share dividend recognized as distributions to equity shareholders for the years ended March 31, 2011 and March 31, 2010 was R 55.00 and R 23.50, respectively. The dividend for the year ended March 31, 2011 includes R 15.00 per share of final dividend for the year ended March 31, 2010 and R 10.00 per share of interim dividend and R 30.00 per share of 30th year special dividend, authorized by the Board on its meeting held on October 15, 2010. The dividend for the year ended March 31, 2010 includes R 13.50 per share of final dividend for the year ended March 31, 2009 and R 10.00 per share of interim dividend.

The Board of Directors, in their meeting on April 15, 2011, proposed a final dividend of approximately R 20 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on June 11, 2011, and if approved, would result in a cash outflow of approximately R 1,336 crore, inclusive of corporate dividend tax of R 187 crore.

2.13.3 Liquidation In the event of liquidation of the Company, the holders of shares shall be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently, other than the amounts held by irrevocable controlled trusts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.

For irrevocable controlled trusts, the corpus would be settled in favor of the beneficiaries.

2.13.4 Share options There are no voting, dividend or liquidation rights to the holders of options issued under the Company’s share option plans.

2.14 Other income Other income consists of the following :

in r crore


Interest income on deposits and certificates of deposit 1,133 779Exchange gains / (losses) on forward and options contracts 56 299Exchange gains / (losses) on translation of other assets and liabilities (14) (269)Income from available-for-sale financial assets / investments 23 160Others 13 21 1,211 990

2.15 Operating leases The Company has various operating leases, mainly for office buildings, that are renewable on a periodic basis. Rental expense for operating leases was R 146 crore and R 125 crore for the years ended March 31, 2011 and March 31, 2010, respectively.

The schedule of future minimum rental payments in respect of non-cancellable operating leases is as follows :

in r crore

As of March 31, 2011 2010

Within one year of the Balance Sheet date 109 84Due in a period between one year and five years 251 249Due after five years 71 62

The operating lease arrangements extend up to a maximum of ten years from their respective dates of inception, and relates to rented overseas premises. Some of these lease agreements have a price escalation clause.

2.16 Employees Stock Option Plans (ESOP) 1998 Employees Stock Option Plan (‘the 1998 Plan’)

The Company’s 1998 Plan provides for the grant of non-statutory share options and incentive share options to employees of the Company. The establishment of the 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January 1998. The Government of India has approved the 1998 Plan, subject to a limit of 1,17,60,000 equity shares representing 1,17,60,000 ADS to be issued under the 1998 Plan. All options granted under the 1998 Plan are exercisable for equity shares represented by ADSs. The options under the 1998 Plan vest over a period of one through four years and expire five years from the date of completion of vesting. The 1998 Plan is administered by a compensation committee comprising four members, all of whom are independent members of the Board of Directors. The term of the 1998 Plan ended on January 6, 2008, and consequently no further shares will be issued to employees under this plan.

1999 Employees Stock Option Plan (‘the 1999 Plan’)

In the year 2000, the Company instituted the 1999 Plan. The Board of Directors and shareholders approved the 1999 Plan in June 1999. The 1999 Plan provides for the issue of 5,28,00,000 equity shares to employees. The 1999 Plan is administered by a compensation committee comprising four members, all of whom are independent members of the Board of Directors.



Under the 1999 Plan, options will be issued to employees at an exercise price, which shall not be less than the Fair Market Value (FMV) of the underlying equity shares on the date of grant. Under the 1999 Plan, options may also be issued to employees at exercise prices that are less than FMV only if specifically approved by the shareholders of the Company in a general meeting. All options under the 1999 Plan are exercisable for equity shares. The options under the 1999 Plan vest over a period of one through six years, although accelerated vesting based on performance conditions is provided in certain instances and expire over a period of six months through five years from the date of completion of vesting. The term of the 1999 Plan ended on June 11, 2009, and consequently no further shares will be issued to employees under this plan.

The activity in the 1998 Plan and 1999 Plan during the year ended March 31, 2011 and March 31, 2010 are set out as follows :

Year ended March 31, 2011 Year ended March 31, 2010Shares arising out of options

Weighted average

exercise price

Shares arising out of options

Weighted average

exercise price1998 Plan : Outstanding at the beginning 2,42,264 613 9,16,759 904Forfeited and expired (3,519) 722 (60,424) 1,550Exercised (1,88,675) 600 (6,14,071) 854Outstanding at the end 50,070 683 2,42,264 613Exercisable at the end 50,070 683 2,42,264 6131999 Plan :Outstanding at the beginning 2,04,464 869 9,25,806 1,253Forfeited and expired (18,052) 964 (3,40,264) 1,968Exercised (1,37,692) 823 (3,81,078) 821Outstanding at the end 48,720 962 2,04,464 869Exercisable at the end 40,232 717 1,84,759 735

The weighted average share price of options exercised under the 1998 Plan during the year ended March 31, 2011 and March 31, 2010 was R 2,950 and R 2,266, respectively. The weighted average share price of options exercised under the 1999 Plan during the year ended March 31, 2011 and March 31, 2010 was R 2,902 and R 2,221 respectively.

The cash expected to be received upon the exercise of vested options for the 1998 Plan and 1999 Plan is R 3 crore each.

The following table summarizes information about share options outstanding and exercisable as of March 31, 2011 :

Range of exercise prices per share (R ) Options outstanding Options exercisable No. of shares arising out of

options

Weighted average

remaining contractual life

Weighted average

exercise price

No. of shares arising out of

options

Weighted average


Weighted average

exercise price

1998 Plan : 300 – 700 24,680 0.73 587 24,680 0.73 587701 – 1,400 25,390 0.56 777 25,390 0.56 777 50,070 0.65 683 50,070 0.65 6831999 Plan :300 – 700 33,759 0.65 448 33,759 0.65 448701 – 2,500 14,961 1.71 2,121 6,473 1.71 2,121 48,720 0.97 962 40,232 0.82 717

The following table summarizes information about share options outstanding and exercisable as of March 31, 2010 :

Range of exercise prices per share (R ) Options outstanding Options exercisable


options

Weighted average


Weighted average

exercise price


options

Weighted average


Weighted average

exercise price

1998 Plan : 300 – 700 1,74,404 0.94 551 1,74,404 0.94 551701 – 1,400 67,860 1.27 773 67,860 1.27 773 2,42,264 1.03 613 2,42,264 1.03 6131999 Plan :300 – 700 1,52,171 0.91 439 1,52,171 0.91 439701 – 2,500 52,293 1.44 2,121 32,588 1.20 2,121 2,04,464 1.05 869 1,84,759 0.97 735

The share-based compensation recorded for the year ended March 31, 2011 was nil and for year ended March 31, 2010 was R 1 crore.



2.17 Income taxIncome tax expense in the statement of comprehensive income comprises :

in r crore


Current taxesDomestic taxes 2,060 1,594Overseas taxes 564 465

2,624 2,059Deferred taxesDomestic taxes (95) (474)Overseas taxes (39) 96

(134) (378)Income tax expense 2,490 1,681

The entire deferred income tax for the years ended March 31, 2011 and March 31, 2010 relates to origination and reversal of temporary differences.

A reversal of deferred tax liability of R 3 crore for the year ended March 31, 2011 respectively, relating to an available-for-sa le f inancia l asse t has been recognized in other comprehensive income (refer note 2.2). For the year ended March 31, 2010 a deferred tax liability of R 8 crore relating to an available-for-sale financial asset has been recognized in other comprehensive income.

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized as follows :

in r crore


Profit before income taxes 9,313 7,900Enacted tax rates in India 33.22% 33.99%Computed expected tax expense 3,094 2,685Tax effect due to non-taxable income for Indian tax purposes (788) (1,058)Overseas taxes, net 399 394Tax reversals (236) (489)Tax effect due to set off provisions on brought forward losses – (104)Effect of exempt income (3) (51)Interest and penalties – 22Effect of unrecognized deferred tax assets 19 16Effect of differential overseas tax rates (7) (16)Temporary difference related to branch profits – 247Effect of non-deductible expenses 4 26Others 8 9Income tax expense 2,490 1,681

The overseas tax expense is due to income taxes payable overseas, principally in the U.S. The Company benefits from certain significant tax incentives provided to software firms under Indian tax laws. These incentives include those for facilities set up under the Special Economic Zones Act, 2005 and software development facilities designated as ‘Software Technology Parks’ (the STP Tax Holiday). The STP Tax Holiday is available for ten consecutive years, beginning from the financial year when the unit started producing computer software or April 1, 1999, whichever is earlier. The Indian government, through the Finance Act, 2009, has extended the tax holiday for the STP units until March 31, 2011. Most of the Company’s STP units have already completed the tax holiday period and for the remaining STP units the tax holiday will expire by the end of March 31, 2011.

Under the Special Economic Zones Act, 2005 scheme, units in designated special economic zones which begin providing services on or after April 1, 2005 are eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits or gains for a further five years. Certain tax benefits are also available for a further period of five years subject to the STP unit meeting defined conditions.

Infosys is subject to a 15% Branch Profit Tax (BPT) in the U.S. to the extent of the U.S. branch’s net profit during the year is greater than the increase in the net assets during the year, computed in accordance with the Internal Revenue Code. As of March 31, 2011, Infosys’ U.S. branch net assets amounted to approximately R 2,647 crore. As of March 31, 2011, the Company has provided for branch profit tax of R 176 crore for its U.S. branch, as the Company estimates that these branch profits are expected to be distributed in the foreseeable future.

Deferred income tax liabilities have not been recognized on temporary differences amounting to R 1,466 crore and R 1,052 crore as of March 31, 2011 and March 31, 2010 respectively, associated with investments in subsidiaries and branches as it is probable that the temporary differences will not reverse in the foreseeable future.

The gross movement in the current income tax asset / (liability) for the years ended March 31, 2011 and March 31, 2010 is as follows :

in r crore


Net current income tax asset / (liability) at the beginning (57) (307)Translation differences (10) (4)Income tax benefit arising on exercise of stock options 11 10Income tax paid 2,856 1,754Minimum Alternate Tax credit utilized (1) – 549Current income tax expense (refer note 2.17) (2,624) (2,059)Net current income tax asset / (liability) at the end 176 (57)

(1) Minimum alternate tax of R 288 crore was recognized and utilized during the year ended March 31, 2010

The tax effects of significant temporary differences that resulted in deferred income tax assets and liabilities are as follows :

in r crore

As of March 31,2011 2010

Deferred income tax assets Property, plant and equipment 257 217Minimum alternate tax credit carry-forwards 63 42Computer software 24 25Accrued compensation to employees 26 –Trade receivables 20 28Compensated absences 104 50Accumulated subsidiary losses 39 86Others 28 26Total deferred income tax assets 561 474Deferred income tax liabilitiesIntangible asset (2) (2)Temporary difference related to branch profits (176) (232)Available-for-sale financial asset (5) (8)Total deferred income tax liabilities (183) (242)Total deferred income tax assets 378 232



As of March 31,2011 2010

Deferred income tax assets to be recovered after 12 months 392 368Deferred income tax liability to be settled after 12 months (63) (175)Deferred income tax assets to be recovered within 12 months 169 106Deferred income tax liability to be settled within 12 months (120) (67) 378 232

In assessing the realization capability of deferred income tax assets, the Management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the Company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

The gross movement in the deferred income tax account for the years ended March 31, 2011 and March 31, 2010 is as follows :

in r crore


Net deferred income tax asset at the beginning 232 408Translation differences 9 3Minimum alternate tax credit utilized – (549)Credits relating to temporary differences (refer note 2.17) 134 378Temporary difference on available-for-sale financial asset (refer note 2.2) 3 (8)Net deferred income tax asset at the end 378 232

The credits relating to temporary differences during the year ended March 31, 2011 and March 31, 2010 are primarily on account of compensated absences, accrued compensation to employees and property, plant and equipment.

Pursuant to the enacted changes in the Indian Income Tax Laws effective April 1, 2007, a Minimum Alternate Tax (MAT) has been extended to income in respect of which a deduction may be claimed under sections 10A and 10AA of the Income Tax Act. Consequent to the enacted change, Infosys BPO has calculated its tax liability for current domestic taxes after considering MAT. The excess tax paid under MAT provisions being over and above regular tax liability can be carried forward and set off against future tax liabilities computed under regular tax provisions. Infosys BPO was required to pay MAT, and, accordingly, a deferred income tax asset of R 63 core and R 42 crore has been recognized on the Balance Sheet as of March 31, 2011 and March 31, 2010, respectively, which can be carried forward for a period of ten years from the year of recognition.

2.18 Earnings per equity shareThe following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share :


Basic earnings per equity share – weighted average number of equity shares outstanding (1) 57,11,80,050 57,04,75,923Effect of dilutive common equivalent shares – share options outstanding 1,88,308 6,40,108Diluted earnings per equity share – weighted average number of equity shares and common equivalent shares outstanding 57,13,68,358 57,11,16,031

(1) Excludes treasury shares

For the year ended March 31, 2011, and March 31, 2010 there were no outstanding options to purchase equity shares which had an anti-dilutive effect.

2.19 Related party transactions

List of subsidiaries :

Particulars Country Holding as of March 31,

2011 March 31,

2010 Infosys BPO Limited India 99.98% 99.98%Infosys Technologies (Australia) Pty. Limited Australia 100% 100%Infosys Technologies (China) Company Limited China 100% 100%Infosys Consulting, Inc. U.S. 100% 100%Infosys Technologies S. de R. L. de C. V. Mexico 100% 100%Infosys BPO s.r.o. (1) Czech

Republic 99.98% 99.98%Infosys BPO (Poland) Sp.Z.o.o (1) Poland 99.98% 99.98%Infosys BPO (Thailand) Limited (1) (3) Thailand – 99.98%Infosys Technologies (Sweden) AB Sweden 100% 100%Infosys Tecnologia do Brasil Ltda Brazil 100% 100%Infosys Consulting India Limited (2) India 100% 100%Infosys Public Services, Inc. U.S. 100% 100%Infosys Technologies (Shanghai) Company Limited (4) China 100% –McCamish Systems LLC (1) (refer note 2.3) U.S. 99.98% 99.98%

Notes :(1) Infosys BPO s.r.o., Infosys BPO (Poland) Sp.Z.o.o, Infosys BPO (Thailand)

Limited and McCamish Systems LLC are wholly-owned subsidiaries of Infosys BPO.

(2) Infosys Consulting India Limited is a wholly-owned subsidiary of Infosys Consulting.

(3) During the year ended March 31, 2011 Infosys BPO (Thailand) Limited was liquidated.

(4) On February 21, 2011 Infosys incorporated a wholly-owned subsidiary, Infosys Shanghai.

Infosys has provided guarantee for performance of certain contracts entered into by its subsidiaries.

in r crore



List of other related parties :

Particulars Country Nature of relationship Infosys Technologies Limited Employees’ Gratuity Fund Trust India Post-employment benefit plan of InfosysInfosys Technologies Limited Employees’ Provident Fund Trust India Post-employment benefit plan of InfosysInfosys Technologies Limited Employees’ Superannuation Fund Trust India Post-employment benefit plan of InfosysInfosys BPO Limited Employees’ Superannuation Fund Trust India Post-employment benefit plan of Infosys BPOInfosys BPO Limited Employees’ Gratuity Fund Trust India Post-employment benefit plan of Infosys BPOInfosys Technologies Limited Employees’ Welfare Trust India Employee Welfare Trust of Infosys Infosys Science Foundation India Controlled trust

Note : Refer note 2.12 for information on transactions with post-employment benefit plans mentioned above.

Transactions with key management personnelThe table below describes the compensation to key management personnel who comprise directors and members of the executive council :

in r crore


Salaries and other employee benefits 33 31

2.20 Segment reportingIFRS 8 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Company’s operations predominantly relate to providing IT solutions, delivered to customers located globally, across various industry segments.

The Chief Operating Decision Maker evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by industry classes and geographic segmentation of customers. Accordingly, segment information has been presented both along industry classes and geographic segmentation of customers. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

Industry segments for the Company are primarily financial services comprising enterprises providing banking, finance and insurance services, manufacturing enterprises, enterprises in the telecommunications (telecom) and retail industries, and others such as utilities, transportation and logistics companies.

Geographic segmentation is based on business sourced from that geographic region and delivered from both on-site and off-shore. North America comprises the United States of America, Canada and Mexico, Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom, and the Rest of the World comprising all other places except those mentioned above and India.

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Allocated expenses of segments include expenses incurred for rendering services from the Company’s offshore software development centers and on-site expenses, which are categorized in relation to the associated turnover of the segment.

Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably. Management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as ‘unallocated’ and adjusted against the total income of the Company.

Fixed assets used in the Company’s business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practical to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Geographical information on revenue and industry revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

2.20.1 Industry segments in r crore

Year ended March 31, 2011 Financial services


Revenues 9,862 5,393 3,549 3,898 4,799 27,501 Identifiable operating expenses 4,122 2,311 1,420 1,647 2,100 11,600 Allocated expenses 2,456 1,370 899 990 1,218 6,933Segment profit 3,284 1,712 1,230 1,261 1,481 8,968 Unallocable expenses 866Operating profit 8,102Other income, net 1,211Profit before income taxes 9,313Income tax expense 2,490Net profit 6,823Depreciation and amortization 862Non-cash expenses other than depreciation and amortization 4



Industry segments (Contd.)

in r crore

Year ended March 31, 2010 Financial services


Revenues 7,731 4,506 3,661 3,035 3,809 22,742Identifiable operating expenses 3,068 1,993 1,284 1,243 1,544 9,132Allocated expenses 1,953 1,139 926 767 964 5,749Segment profit 2,710 1,374 1,451 1,025 1,301 7,861Unallocable expenses 951Operating profit 6,910Other income, net 990Profit before income taxes 7,900Income tax expense 1,681Net profit 6,219Depreciation and amortization 942Non-cash expenses other than depreciation and amortization 3

2.20.2 Geographic segments in r crore

Year ended March 31, 2011 North America Europe India Rest of the World

Total

Revenues 17,958 5,927 599 3,017 27,501 Identifiable operating expenses 7,658 2,467 281 1,194 11,600 Allocated expenses 4,555 1,488 144 746 6,933 Segment profit 5,745 1,972 174 1,077 8,968 Unallocable expenses 866 Operating profit 8,102 Other income, net 1,211 Profit before income taxes 9,313 Income tax expense 2,490 Net profit 6,823 Depreciation and amortization 862Non-cash expenses other than depreciation and amortization 4

in r crore

Year ended March 31, 2010 North America


Total

Revenues 14,972 5,237 270 2,263 22,742 Identifiable operating expenses 6,067 2,093 80 892 9,132 Allocated expenses 3,784 1,325 68 572 5,749 Segment profit 5,121 1,819 122 799 7,861 Unallocable expenses 951Operating profit 6,910Other income, net 990Profit before income taxes 7,900Income tax expense 1,681Net profit 6,219Depreciation and amortization 942Non-cash expenses other than depreciation and amortization 3



2.20.3 Significant clients No client individually accounted for more than 10% of the revenues in the year ended March 31, 2011 and March 31, 2010.

2.21 Litigation The Company is subject to legal proceedings and claims which have arisen in the ordinary course of its business. The Company’s management does not reasonably expect that legal actions, when ultimately concluded and determined, will have a material and adverse effect on the results of operations or the financial position of the Company.

2.22 Tax contingencies The Company has received demands from the Indian taxation authorities for payment of additional tax of R 671 crore including interest of R 177 crore, upon completion of their tax review for fiscal 2005, 2006 and 2007. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2005, fiscal 2006 and fiscal 2007 is pending before the Commissioner of Income tax (Appeals), Bangalore.

The Company is contesting the demands and management and its tax advisors believe that its position will likely be upheld in the appellate process. No additional provision has been accrued in the financial statements for the tax demands raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

64 | Additional information


Additional information

Employee strength and revenue growth since 1996

Fiscal Employees Growth % IFRS (US$ million) (1) IFRS (R crore) (2)

Revenues Growth % Net Income (2)

Growth % Income Growth % PAT Growth %

1996 1,172 30 27 47 7 72 89 60 21 581997 1,705 45 40 49 9 27 139 57 34 601998 2,605 53 68 73 (3) 13 60 258 85 60 791999 3,766 45 121 77 (3) 30 119 509 98 133 1202000 5,389 43 203 68 61 102 882 73 286 1152001 9,831 82 414 103 132 115 1,901 115 623 1182002 10,738 9 545 32 164 25 2,604 37 808 302003 15,876 48 754 38 195 18 3,640 40 955 182004 25,634 61 1,063 41 270 39 4,853 33 1,244 302005 36,750 43 1,592 50 419 55 7,130 47 1,846 482006 52,715 43 2,152 35 555 32 9,521 34 2,458 332007 72,241 37 3,090 44 850 53 13,893 46 3,850 572008 91,187 26 4,176 35 1,155 36 16,692 20 4,659 212009 1,04,850 15 4,663 12 1,281 11 21,693 30 5,975 282010 1,13,796 9 4,804 3 1,313 2 22,742 5 6,219 42011 1,30,820 15 6,041 26 1,499 14 27,501 21 6,823 105-year CAGR 20 23 22 24 23

(1) The data for the year 2007 and prior years is as per U.S. GAAP.(2) The data for the year 2008 and prior years is as per consolidated Indian GAAP. (3) Excludes a one-time deferred stock compensation expense arising from a stock split amounting to US$ 13 million and US$ 2 million in fiscal 1999 and 1998 respectively.

Employee strength of the Infosys group

2011 2010Functional classification

Software professionals 1,23,811 94.6% 1,06,864 93.9%Sales and support 7,009 5.4% 6,932 6.1%

1,30,820 100.0% 1,13,796 100.0%Gender

Male 86,604 66.2% 75,674 66.5%Female 44,216 33.8% 38,122 33.5%

1,30,820 100.0% 1,13,796 100.0% Age profile

20 – 25 59,897 45.8% 55,334 48.6%26 – 30 45,182 34.5% 38,162 33.5%31 – 40 23,021 17.6% 18,208 16.0%41 – 50 2,219 1.7% 1,729 1.5%51 – 60 452 0.3% 333 0.4%60 and above 49 0.1% 30 –

1,30,820 100.0% 1,13,796 100.0%

Software development centers of the Infosys groupWe have 63 global development centers of which 30 are in India – nine in Bangalore, four each in Chennai and Pune, three in Mangalore, two each in Bhubaneswar, Chandigarh and Thiruvananthapuram, and one each in New Delhi, Hyderabad, Jaipur and Mysore. We have a global development center in Toronto, Canada. In addition, we have eleven proximity development centers in the United States – Fremont, Quincy, Lisle, Bridgewater, Phoenix, Plano, Atlanta, Charlotte, Houston, Hartford and Bentonville; six in China; three in Australia; two each in Mexico and United Kingdom; and one each in Czech Republic, Japan (Tokyo), Mauritius, Poland, Philippines, Singapore, France and Brazil. Infosys BPO Limited, Infosys Australia, Infosys China, Infosys Shanghai, Infosys Consulting, Infosys Mexico, Infosys Sweden, Infosys Brasil and Infosys Public Services are our wholly-owned subsidiaries.

Marketing offices of the Infosys groupWe have 64 marketing offices around the world of which 60 are located outside India – 19 in the United States, four each in Australia and Germany, three each in Switzerland, U.A.E. and the U.K., two each in Canada, Czech Republic and France and one each in Belgium, Denmark, Finland, Hong Kong, Ireland, Japan, Norway, Spain, Sweden, Greece, The Netherlands, Mauritius, Mexico, Brazil, Russia, New Zealand, Singapore, and Malaysia. Addresses of offices are provided in the Global presence section of the Annual Report.

American Depositary Share (ADS)

About ADSAn American Depositary Share (ADS) is a negotiable certificate evidencing ownership of an outstanding class of stock in a non-U.S. company. ADSs are created when ordinary shares are delivered to a custodian bank in the domestic market, which then instructs a depositary bank in the United States to issue ADSs based on a predetermined ratio. ADSs are SEC-registered securities and may trade freely, just like any other security, either on an exchange or in the over-the-counter market.

Difference between an ADS and a GDRADSs and Global Depositary Receipts (GDRs) have the same functionality – they both evidence ownership of foreign securities deposited with a custodian bank. ADSs represent securities that are listed in the United States, while GDRs represent securities listed outside the United States, typically in the United Kingdom.

Voting rights of ADS holdersIn the event of a matter submitted to the holders of ordinary shares for a vote, the ADS holders on record as at a particular date will be allowed to instruct the depositary bank to exercise the vote with respect to the equity shares representing the ADSs held by them.

Entitlement to cash dividendsWhenever dividends are paid to ordinary shareholders, cash dividends to ADS holders are declared in local currency and paid in U.S. dollars, based on the prevailing exchange rate, by the depositary bank, net of the depositary’s fees and expenses.

Disclosure policyWe have a written disclosure policy, which covers interaction with external constituents such as analysts, fund managers and the media.

Select historical data | 65


ation 2010-11

Select historical datain r crore, except per share data, other information and ratios

1982 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Financial performance

Income 0.12 2,604 3,623 4,761 6,860 9,028 13,149 15,648 20,264 21,140 25,385Operating profit (PBIDTA) 0.04 1,038 1,272 1,584 2,325 2,989 4,225 4,963 6,906 7,360 8,414Interest – – – – – – – – – – –Depreciation – 161 189 231 268 409 469 546 694 807 740Provision for taxation – 135 201 227 325 303 352 630 895 1,717 2,378Profit after tax (1) 0.04 808 958 1,243 1,859 2,421 3,777 4,470 5,819 5,755 6,443Dividend – 132 179 196 310 412 649 758 1,345 1,434 1,723One-time / special dividend – – – 668 – 830 – 1,144 – – 1,722

Margins (%) Operating profit margin (PBIDTA) 33.3 39.9 35.1 33.3 33.9 33.1 32.1 31.7 34.1 34.8 33.1Net profit margin (1) 33.3 31.0 26.4 26.1 27.1 26.8 28.7 28.6 28.7 27.2 25.4Return on average net worth (1) 96.9 46.6 38.8 40.7 43.8 39.9 41.9 36.3 37.2 28.9 27.7Return on average capital employed 96.9 54.4 46.9 48.1 51.4 44.9 45.7 41.4 42.9 37.2 37.6

Per share data (R) (2) Basic EPS (1) – 15.27 18.09 23.43 34.63 44.34 67.82 78.24 101.65 100.37 112.26Dividend – 2.50 3.38 3.69 5.75 7.50 11.50 13.25 23.50 25.00 30.00One-time / special dividend – – – 12.50 – 15.00 – 20.00 – – 30.00Book value – 39.29 53.98 61.03 96.87 125.15 195.41 235.84 310.90 384.01 426.73

Financial position Share capital – 33 33 33 135 138 286 286 286 287 287Reserves and surplus 0.04 2,047 2,828 3,220 5,107 6,759 10,876 13,204 17,523 21,749 24,214Net worth 0.04 2,080 2,861 3,253 5,242 6,897 11,162 13,490 17,809 22,036 24,501Debt – – – – – – – – – – –Gross block – 961 1,273 1,570 2,183 2,837 3,889 4,508 5,986 6,357 6,934Capital expenditure – 323 219 430 794 1,048 1,443 1,370 1,177 581 1,152Cash and cash equivalents 0.02 1,027 1,639 1,819 1,683 3,779 5,610 7,689 10,289 11,297 15,165Investment in liquid mutual funds and certificate of deposits – – – 930 1,168 684 – – – 3,497 119Net current assets 0.06 1,293 2,018 1,220 2,384 3,832 7,137 8,496 12,288 13,141 18,391Total assets 0.04 2,080 2,861 3,253 5,242 6,897 11,162 13,490 17,846 22,268 24,677

Shareholding related Number of shareholders 7 88,650 77,010 66,945 1,58,725 1,95,956 4,88,869 5,55,562 4,96,907 3,81,716 4,16,623Market capitalization – period end NA 24,654 26,847 32,909 61,073 82,154 1,15,307 82,362 75,837 1,50,110 1,86,100Public shareholding (%) (3) – 68.08 68.32 65.56 70.20 66.55 64.35 64.31 64.38 65.32 66.36

Credit rating Standard & Poor’s BBB BBB BBB BBB+ BBB+ BBB+ BBB+Dun & Bradstreet 5A1 5A1 5A1 5A1 5A1 5A1 5A1 5A1

Corporate governance rating CRISIL – (GVC) Level 1 Level 1 Level 1 Level 1 Level 1 Level 1 Level 1 Level 1ICRA CGR 1 CGR 1 CGR 1 CGR 1 CGR 1 CGR 1 CGR 1 CGR 1

Notes : The above figures are based on Indian GAAP (standalone). (1) Excluding extraordinary activities / exceptional items (2) Calculated on a per share basis, adjusted for bonus issues in previous years (3) Total public shareholding as defined under Clause 40A of the Listing Agreement (excludes shares held by founders and American Depositary Receipt holders)

66 | Revenue segmentation


Revenue segmentation

Geographic segmentationin %

2011 2010 2009 2008 2007North America 65.3 65.8 63.2 62.0 63.3 Europe 21.5 23.0 26.4 28.1 26.4 India 2.2 1.2 1.3 1.3 1.6 Rest of the World 11.0 10.0 9.1 8.6 8.7 Total 100.0 100.0 100.0 100.0 100.0

Industry segmentationin %

2011 2010 2009 2008 2007Manufacturing 19.6 19.8 19.7 14.7 13.5Banking, financial services and insurance 35.8 34.0 33.9 35.7 37.4

Banking and financial services 27.7 26.3 26.7 28.5 30.2Insurance 8.1 7.7 7.2 7.2 7.2

Telecom 12.9 16.1 18.1 21.6 19.3Retail 14.2 13.3 12.6 11.8 10.0Energy and utilities 6.1 5.9 5.7 5.2 5.3Transportation and logistics 1.9 2.0 2.3 2.5 2.4Others 9.5 8.9 7.7 8.5 12.1Total 100.0 100.0 100.0 100.0 100.0

Project type(1)

in %

2011 2010 2009 2008 2007Fixed price 40.3 38.5 35.4 31.0 26.7 Time and material 59.7 61.5 64.6 69.0 73.3 Total 100.0 100.0 100.0 100.0 100.0

(1) Excluding products

Service offeringin %

2011 2010 2009 2008 2007ServicesApplication Development and Maintenance 39.0 41.3 42.4 45.4 48.0

Application Development 16.0 18.0 20.5 21.7 23.1Application Maintenance 23.0 23.3 21.9 23.7 24.9

Business Process Management 5.6 6.1 6.0 5.7 4.7Consulting Services and Package Implementation 25.5 24.4 24.9 23.8 21.1Infrastructure Management 6.3 7.2 6.3 4.9 4.4Product Engineering Services 2.4 2.2 2.2 1.6 1.6Systems Integration 5.4 4.2 3.6 2.8 2.3Testing Services 7.5 6.4 6.8 7.5 6.9Others 3.4 4.0 3.9 4.7 7.1Total services 95.1 95.8 96.1 96.4 96.1Product revenues 4.9 4.2 3.9 3.6 3.9Total 100.0 100.0 100.0 100.0 100.0

Note : The above figures are based on IFRS (audited) financial statements

Statutory obligations | 67


Statutory obligations

Software Technology Park schemeWe have set up Software Technology Parks (STPs), which are 100% export-oriented units, for the development of software at Bangalore, Bhubaneswar, Chandigarh, Chennai, Hyderabad, Mangalore, Mysore, Pune and Thiruvananthapuram (all in India). Certain capital items purchased for these centers are eligible for 100% customs and excise duty exemption, subject to fulfillment of stipulated export obligations, which was five times the value of duty-free imports of capital goods, or duty-free purchase of goods subject to excise, over a period of five years on a yearly basis. Beginning April 2001, the export obligation on duty-free import of capital goods, or duty-free purchase of goods subject to excise is thrice the value of such goods over a period of five years. Beginning April 2002, the export obligation on duty-free import of capital goods or duty-free purchase of goods subject to excise is thrice the value of such goods over a period of three years. Beginning April 2003, the units are required to achieve positive Net Foreign Exchange earnings (NFE) only. The period to achieve the net positive NFE is five years from the date of commencement of production / renewal of the license for the unit.

The non-fulfillment of export obligations or positive net foreign exchange earnings (NFE) may result in penalties as stipulated by the government, which may have an impact on future profitability.

We have fulfilled our export obligations and achieved a positive net foreign exchange earnings for all our operations under the Software Technology Park scheme.

Special Economic Zone schemeOur first Special Economic Zone (SEZ) unit, became operational at Mahindra World City (a private multi-product Special Economic Zone), Chennai, in the financial year 2005-06 and our second SEZ Unit in this SEZ become operational during the financial year 2010-11, with a total approved area of about 129.00 acres. We established our SEZ unit at Chandigarh (Rajiv Gandhi Chandigarh Technology Park), with an approved area of about 30.21 acres, in the financial year 2006-07. During the financial year 2007-08, SEZ units were established in Pune and Mangalore, with an approved area of about 77.81 acres and 305.58 acres respectively. During the financial year 2009-10 our SEZ unit at Thiruvananthapuram, with an approved area of about 50 acres, commenced production. During the financial year 2010-11 we have commenced our operations at SEZ units in Mysore and Hyderabad, with an approved area of about 54.64 acres and 447.33 acres respectively. The SEZ Units came into existence under the new Special Economic Zones Act, 2005 (‘the SEZ Act’).

As per the SEZ Act, the unit will be eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits or gains for a further five years. Certain tax benefits are also available for a further five years, subject to the unit meeting defined conditions. Other fiscal benefits including indirect tax waivers are being extended for setting up, operating and maintaining the unit.

The units operating under the SEZ scheme are required to achieve positive net foreign exchange earnings (NFE) over a period of five years from the date of commencement. We have achieved positive foreign exchange earnings for all our operations under the SEZ Scheme. However, in case of SEZ’s operationalized during the year, the positive foreign exchange earnings will be met in the future.

TaxationWe benefit from certain significant tax incentives provided to the software industry under Indian tax laws. These currently include :

(i) deduction of export profit from the operation of software development facilities designated as Software Technology Parks (the STP tax deduction) and

(ii) deduction of export profits from units in Special Economic Zones.

The period for which STP tax deduction is available to each STP was restricted to ten consecutive years, starting from the financial year when the unit started producing computer software or March 31, 2011, whichever is earlier.

The details regarding the commencement of operations at our STP locations and the year up to which the deduction under the STP scheme was availed are as follows :


Year of commencement (1)


from (1)

Available up to (1)

Infosys Electronics City, Bangalore 1995 1997 2004Mangalore 1996 1999 2005Pune 1997 1999 2006Bhubaneswar 1997 1999 2006Chennai 1997 1999 2006Phase I, Electronics City, Bangalore 1999 1999 2008Phase II, Electronics City, Bangalore 2000 2000 2009Hinjawadi, Pune 2000 2000 2009Mysore 2000 2000 2009Hyderabad 2000 2000 2009Chandigarh 2000 2000 2009Sholinganallur, Chennai 2001 2001 2010Konark, Bhubaneswar 2001 2001 2010Mangala, Mangalore 2001 2001 2010Thiruvananthapuram 2004 2004 2011

Infosys BPOPhase I, Electronics City, Bangalore 2002 2002 2011Pune 2003 2003 2011Phase II, Electronics City, Bangalore 2005 2005 2011Jaipur 2006 2006 2011Gurgaon 2006 2006 2011Chennai 2004 2004 2011

(1) Financial year

68 | Statutory obligations


The details regarding the commencement of operations at our SEZ locations and the year up to which the deduction under the SEZ scheme is available are as follows :

Special Economic Zone Year of commencement (1)


from (1)

Available up to (1)

InfosysMahindra City – unit 1, Chennai 2006 2006 2020Chandigarh 2007 2007 2021Mangalore 2008 2008 2022Pune 2008 2008 2022Thiruvananthapuram 2010 2010 2024Mysore 2011 2011 2025Hyderabad 2011 2011 2025Mahindra City – unit 2, Chennai 2011 2011 2025

Infosys BPOPune 2007 2007 2021Jaipur 2008 2008 2022Gurgaon 2008 2008 2022

(1) Financial year

The benefits of these tax incentive programs have historically resulted in an effective tax rate, well below the statutory rates for us. There is no assurance that the Government of India will continue to provide these incentives.

The government may reduce or eliminate the tax exemptions provided to Indian exporters at any time in the future. This may result in our export profits being fully taxed, and may adversely affect the post-tax profits in the future.

On a full tax-paid basis, without any duty concessions on equipment, hardware and software, our post-tax profits for the relevant years are estimated as follows :

in r crore, except per share data

2011 2010 2009Profit before tax 9,313 7,900 6,894Less : Additional depreciation on

duty waived for certain assets 49 70 90Reduction in other income 53 49 67Adjusted profit before tax 9,211 7,781 6,737Less : Income tax on the above on

full tax basis 3,162 2,776 2,400Restated profit after tax 6,049 5,005 4,337Restated basic EPS (R ) 105.89 87.74 76.15

Note : The figures above are based on IFRS financial statements. However, it may be noted that this is only an academic exercise. We have provided for income tax in full in the respective years and there is no carried-forward liability on this account.

Human resource valuation | 69


Human resource valuation

A fundamental dichotomy in accounting practices is between human and non-human capital. As a standard practice, non-human capital is considered as assets and reported in the financial statements, whereas human capital is mostly ignored by accountants. The definition of wealth as a source of income inevitably leads to the recognition of human capital as one of the several forms of wealth such as money, securities and physical capital.

We have used the Lev & Schwartz model to compute the value of human resources. The evaluation is based on the present value of future earnings of employees and on the following assumptions :

a) Employee compensation includes all direct and indirect benefits earned both in India and overseas

b) The incremental earnings based on group / age have been considered

c) The future earnings have been discounted at the cost of capital of 11.21% (previous year 10.60%).in r crore, unless stated otherwise

2011 2010Employees (no.) Software professionals 1,23,811 1,06,864Support 7,009 6,932Total 1,30,820 1,13,796Value of human resources Software professionals 1,22,539 1,06,173Support 12,566 7,114Total 1,35,105 1,13,287Total income (1) 27,501 22,742Total employee cost (1) 14,856 12,093Value-added 25,031 20,935Net profit (1) 6,823 6,219Ratios Value of human resources per employee 1.03 1.00Total income / human resources value (ratio) 0.20 0.20Employee cost / human resources value (%) 11.0 10.7Value-added / human resources value (ratio) 0.19 0.18Return on human resources value (%) 5.1 5.5

(1) As per IFRS (audited) financial statements

70 | Value-added statement


Value-added statement in r crore

2011 % 2010 % Growth %Value-added

Income 27,501 22,742 20.9Less : Operating expenses excluding personnel costs

Software development and business process management expenses 2,083 1,461 Selling and marketing expenses 294 249 General and administration expenses 1,304 1,087

3,681 2,797 Value-added from operations 23,820 19,945 19.4Other income (including exceptional items) 1,211 990 Total value-added 25,031 20,935 19.6Distribution of value-added

Human resourcesSalaries and bonus 14,856 59.4 12,093 57.8 22.8

Providers of capitalDividend (1) 3,445 13.8 1,434 6.8 140.2Minority interest – – – – –Interest on debt – – – – –

3,445 13.8 1,434 6.8 140.2Taxes

Corporate income taxes 2,490 9.9 1,681 8.0 48.1Dividend tax (1) 568 2.3 240 1.2 136.7

3,058 12.2 1,921 9.2 59.2Income retained in business

Depreciation and amortization 862 3.4 942 4.5 (8.5)Retained in business 2,810 11.2 4,545 21.7 (38.2)

3,672 14.6 5,487 26.2 (33.1)Total 25,031 100.0 20,935 100.0 19.6

Note : The figures above are based on IFRS financial statements. (1) Considered on accrual basis

Brand valuation | 71


The strength of the invisibleFrom time to time, we have used various models for evaluating assets of the Balance Sheet to bring certain advances in financial reporting to the notice of our shareholders. The aim of such modeling is to lead the debate on the Balance Sheet of the next millennium. These models are still the subject of debate among researchers and using the data in projecting the future is risky. We are not responsible for any direct, indirect or consequential losses suffered by any person using these models or data.

A Balance Sheet discloses the financial position of a company. The financial position of an enterprise is influenced by the economic resources it controls, its financial structure, liquidity and solvency, and its capacity to adapt to changes in the business environment. However, it is becoming increasingly clear that intangible assets have a significant role in defining the growth of a high-tech company.

Valuing the brandThe wave of brand acquisitions in the late 1980s exposed the hidden value of highly branded companies, and brought brand valuation to the fore. The values associated with a product or service are communicated to the consumer through the brand. Consumers no longer want just a product or service, they want a relationship based on trust and familiarity.

A brand is much more than a trademark or a logo. It is a ‘trust mark’ – a promise of quality and authenticity that clients can rely on. Brand equity is the value addition provided to a product or a company by its brand name. It is the financial premium that a buyer is willing to pay for the brand over a generic or less worthy brand. Brand equity is not created overnight. It is the result of the relentless pursuit of quality in manufacturing, selling, servicing, advertising and marketing. It is integral to the quality of client experiences in dealing with the Company and its services over a period.

The sixth annual BRANDZ™ Top 100 Most Valuable Global Brands ranking published in conjunction with Bloomberg and Kantar Worldpanel was announced in 2011 by Millward Brown. According to the report, Apple topped the ranking with a brand value of US$ 153.3 billion. The market capitalization of Apple as on 31st March 2011 was US$ 322.26 billion. Thus, 47.6% of market capitalization represented its brand value. The contribution of brand value in commanding price premiums and decreased cost of entry into new markets and categories is significant. Companies adopt strategic approaches and best practice methodologies to improve their brand value.

Approach to brand valuationThe task of measuring brand value is a complex process. Several models are available for assessing brand value. The most widely used is the brand-earnings-multiple model. There are several variants of this model.

We have adapted the generic brand-earnings-multiple model (reference : Valuation of Trademarks and Brand Names by Michael Birkin in the book, Brand Valuation, edited by John Murphy and published by Business Books Limited, London) to value our corporate brand, ‘Infosys’. The methodology followed for valuing our brand is as follows :

• Determine brand profits by eliminating the non-brand profits from the total profits

• Restate the historical profits at present-day values• Provide for the remuneration of capital to be used for purposes

other than promotion of the brand• Adjust for taxes• Determine the brand-strength or brand-earnings multiple.

Brand valuation

Brand-strength multiple is a function of several factors such as leadership, stability, market, internationality, trend, support and protection. We have evaluated these factors on a scale of 1 to 100 internally, based on the information available.

Brand valuationin r crore

2011 2010 2009Profit before interest and tax 9,313 7,900 6,894Less : Non-brand income 1,090 891 426Adjusted profit before tax 8,223 7,009 6,468Inflation factor 1.000 1.103 1.217Present value of brand profits 8,223 7,732 7,871Weightage factor 3 2 1Weighted average profits 8,001 – –Remuneration of capital 1,284 – –Brand-related profits 6,717 – –Tax 2,231 – –Brand earnings 4,486 – –Brand multiple 9.03 – –Brand value 40,509 – –

Assumptions • The figures above are based on IFRS financial statements.

• Brand revenue is total revenue excluding other income after adjusting for cost of earning such income, since this is an exercise to determine our brand value as a Company and not for any of our products or services.

• Inflation is assumed at 9.35% per annum; 5% of the average capital employed is used for purposes other than promotion of the brand and tax rate is at 33.22%.

• The earnings multiple is based on our ranking against the industry average based on certain parameters (exercise undertaken internally and based on available information).

in r crore

2011 2010 2009Brand value 40,509 36,907 32,345Market capitalization 1,86,100 1,50,110 75,837 Brand value as a percentage of market capitalization (%) 21.8 24.6 42.7Brand value / revenue (x) 1.47 1.62 1.49

72 | Economic Value-Added (EVA®) statement


Economic Value-Added (EVA®) statement

Economic Value-Added is the surplus generated by an entity after meeting an equitable charge towards providers of capital. It is the post-tax return on capital employed (adjusted for the tax shield on debt) less the cost of capital employed. Companies which earn higher returns than cost of capital create value, and companies which earn lower returns than cost of capital are deemed harmful for shareholder value.


2011 2010 2009 2008 2007Cost of capital

Return on risk-free investment (%) 7.66 7.20 7.00 8.00 8.00Market premium (%) 5.00 5.00 7.00 7.00 7.00Beta variant 0.71 0.68 0.74 0.76 0.99 Cost of equity (%) 11.21 10.60 12.18 13.32 14.97Average debt / total capital (%) – – – – –Cost of debt – net of tax (%) NA NA NA NA NAWeighted Average Cost of Capital (WACC) (%) 11.21 10.60 12.18 13.32 14.97Average capital employed 25,688 21,634 17,431 12,527 9,147

Economic Value-Added (EVA®) Operating profits 8,102 6,910 6,421 4,640 3,877 Less : Tax 2,490 1,681 919 685 386 Cost of capital 2,880 2,293 2,123 1,669 1,369 Economic Value-Added 2,732 2,936 3,379 2,286 2,122

Enterprise value Market value of equity 1,86,100 1,50,110 75,837 82,362 1,15,307 Add : Debt – – – – – Less : Cash and cash equivalents 16,810 15,819 10,993 8,307 6,033 Enterprise value 1,69,290 1,34,291 64,844 74,055 1,09,274

Return ratios PAT / average capital employed (%) 26.6 28.7 34.3 37.2 42.2EVA® / average capital employed (%) 10.6 13.6 19.4 18.2 23.2Enterprise value / average capital employed (x) 6.6 6.2 3.7 5.9 11.9

Growth (%) Operating profits 17.3 7.6 38.4 19.7 46.1Average capital employed 18.7 24.1 39.1 37.0 48.1EVA® (6.9) (13.1) 47.8 7.7 37.8Market value of equity 24.0 97.9 (7.9) (28.6) 40.4Enterprise value 26.1 107.1 (12.4) (32.2) 41.1

Notes : Cost of equity = return on risk-free investment + expected risk premium on equity investment adjusted for our beta variant in India. Figures above are based on IFRS financial statements. The data for year 2008 and 2007 is as per consolidated Indian GAAP. Cash and cash equivalents include investments in liquid mutual funds and certificate of deposits.

Balance sheet including intangible assets | 73


Balance Sheet including intangible assets

As at March 31,in r crore

2011 2010ASSETS Current assets Cash and cash equivalents 16,666 12,111Available-for-sale financial assets 21 2,518Investment in certificates of deposit 123 1,190Trade receivables 4,653 3,494Unbilled revenue 1,243 841Derivative financial instruments 66 95Prepayments and other current assets 917 641Total current assets 23,689 20,890Non-current assetsProperty, plant and equipment 4,844 4,439Goodwill 825 829Intangible assets

Brand value 40,509 36,907Human resources value 1,35,105 1,13,287Other intangible assets 48 56

Available-for-sale financial assets 23 38Deferred income tax assets 378 346Income tax assets 993 667Other non-current assets 463 347Total non-current assets 1,83,188 1,56,916Total assets 2,06,877 1,77,806LIABILITIES AND EQUITY Current liabilities Trade payables 44 10Current income tax liabilities 817 724Client deposits 22 8Unearned revenue 518 531Employee benefit obligations 140 131Provisions 88 82Other current liabilities 2,012 1,707Total current liabilities 3,641 3,193Non-current liabilities Deferred income tax liabilities – 114Employee benefit obligations 259 171Other non-current liabilities 60 61Total liabilities 3,960 3,539Equity Share capital 286 286Share premium 3,082 3,047Retained earnings 23,826 20,668Capital reserves-intangible assets 1,75,614 1,50,194Other components of equity 109 72Total equity attributable to equity holders of the Company 2,02,917 1,74,267Total liabilities and equity 2,06,877 1,77,806

Notes : The figures above are based on IFRS financial statements.This Balance Sheet is provided for the purpose of information only. We accept no responsibility for any direct, indirect or consequential losses or damages suffered by any person relying on the same.

74 | Intangible assets score sheet


Intangible assets score sheet

We caution investors that this data is provided only as additional information to them. We are not responsible for any direct, indirect or consequential losses suffered by any person using this data.

From the 1840s to the early 1990s, a corporate’s value was mainly driven by its tangible assets – values presented in the corporate Balance Sheet. The managements of companies valued these resources and linked all their performance goals and matrices to these assets – Return on Investment and capital turnover ratio. The market capitalization of companies also followed the value of tangible assets shown in the Balance Sheet with the difference seldom being above 25%. In the latter half of the 1990s, the relationship between market value and tangible asset value changed dramatically. By early 2000, the book value of the assets represented less than 15% of the total market value. In short, intangible assets are the key drivers of market value in this new economy.

A knowledge-intensive company leverages know-how, innovation and reputation to achieve success in the marketplace. Hence, these attributes should be measured and improved upon year after year to ensure continual success. Managing a knowledge organization necessitates a focus on the critical issues of organizational adaptation, survival, and competence in the face of ever-increasing, discontinuous environmental change. The profitability of a knowledge firm depends on its ability to leverage the learnability of its professionals, and to enhance the reusability of their knowledge and expertise. The intangible assets of a company include its brand, its ability to attract, develop and nurture a cadre of competent professionals, and its ability to attract and retain marquee clients.

Intangible assetsThe intangible assets of a company can be classified into four major categories : human resources, intellectual property assets, internal assets and external assets.

Human resourcesHuman resources represent the collective expertise, innovation, leadership, entrepreneurship and managerial skills of the employees of an organization.

Intellectual property assetsIntellectual property assets include know-how, copyrights, patents, products and tools that are owned by a corporation. These assets are valued based on their commercial potential. A corporation can derive its revenues from licensing these assets to outside users.

Internal assetsInternal assets are systems, technologies, methodologies, processes and tools that are specific to an organization. These assets give the organization a unique advantage over its competitors in the marketplace. These assets are not licensed to outsiders. Examples of internal assets include methodologies for assessing risk, methodologies for managing projects, risk policies and communication systems.

External assetsExternal assets are market-related intangibles that enhance the fitness of an organization for succeeding in the marketplace. Examples are customer loyalty (reflected by the repeat business of the Company) and brand value.

The score sheetWe published models for valuing two of our most important intangible assets – human resources and the ‘Infosys’ brand. This score sheet is broadly adopted from the intangible asset score sheet provided in the book titled, The New Organizational Wealth, written by Dr. Karl-Erik Sveiby and published by Berrett-Koehler Publishers Inc., San Francisco.

We believe such representation of intangible assets provides a tool to our investors for evaluating our market-worthiness.

ClientsThe growth in revenue is 25.8% this year, compared to 3% in the previous year (in U.S. dollar). Our most valuable intangible asset is our client base. Marquee clients or image-enhancing clients contributed 49.8% of revenues during the year. They gave stability to our revenues and also reduced our marketing costs.

The high percentage of revenues 98.0% from repeat orders during the current year is an indication of the satisfaction and loyalty of our clients. The largest client contributed 4.7% to our revenue, compared to 4.6% during the previous year. The top 5 and 10 clients contributed around 15.4% and 25.7% to our revenue respectively, compared to 16.4% and 26.2% respectively, during the previous year. Our strategy is to increase our client base and, thereby, reduce the risk of depending on a few large clients. During the year, we added 139 new clients compared to 141 in the previous year. We derived revenue from customers located in 71 countries against 66 countries in the previous year. Sales per client grew by around 16.6 % from US$ 8.35 million in the previous year to US$ 9.74 million this year. Days Sales Outstanding (DSO) was 63 days this year compared to 59 days in the previous year.

OrganizationDuring the current year, we invested around 2.57% of the value-added (2.34% of revenues) in technology infrastructure, and around 2.13% of the value-added (1.94% of revenues) on R&D activities.

A young, fast-growing organization requires efficiency in the area of support services. The average age of support employees is 31.8 years, as against the previous year’s average age of 30.4 years. The sales per support staff has increased during the year compared to the previous year and the proportion of support staff to the total organizational staff, has marginally decreased over the previous year.

PeopleWe are in a people-oriented business. We added 43,120 employees this year on gross basis (net 17,024) from 27,639 (net 8,946) in the previous year. We added 15,883 laterals this year against 4,895 in the previous year. The education index of employees has gone up substantially to 3,43,407 from 2,96,586. This reflects the quality of our employees. Our employee strength comprises people from 88 nationalities as at March 31, 2011. The average age of employees as at March 31, 2011 was 27. Attrition was 17.0% for this year compared to 13.4% in the previous year (excluding subsidiaries).

Notes• Marquee or image-enhancing clients are those who enhance the

Company’s market-worthiness, typically, Fortune 500 clients. They are often reference clients for us.

• Sales per client is calculated by dividing total revenue by the total number of clients.

• Repeat business revenue is the revenue during the current year from those clients who contributed to our revenue during the previous year too.

• Value-added statement is the revenue less payment to all outside resources. The statement is provided in the Value-added statement section of this document.

• Technology investment includes all investments in hardware and software, while total investment in the organization is the investment in our fixed assets.

• The average proportion of support staff is the average number of support staff to average total staff strength.

• Sales per support staff is our revenue divided by the average number of support staff (support staff excludes technical support staff)

Intangible assets score sheet | 75


• The education index is shown as at the year end, with primary education calculated as 1, secondary education as 2 and tertiary education as 3.

External structure – our clients

2011 2010Growth / renewal Revenue growth (%)

In U.S. dollar terms 26 3In rupee terms 21 5Exports / total revenue (%) 98 99

Clients Total 620 575

Added during the year 139 141Marquee clients

Total 138 126Added during the year 22 19Revenue contribution (%) 50 50Revenue derived – number of countries 71 66

Efficiency Sales / Client

US$ million 9.74 8.35R crore 44.36 39.55 Sales and marketing expenses / revenue (%) 5.50 5.21DSO (days) 63 59Provision for debts / revenue (%) 0.01 –

Stability Repeat business (%) 98.0 97.3No. of clients accounting > 5% of revenue – –Client concentration

Top client (%) 4.7 4.6Top five clients (%) 15.4 16.4Top ten clients (%) 25.7 26.2

Client distribution 1 million dollar + 366 3385 million dollar + 187 15910 million dollar + 126 9720 million dollar + 73 5930 million dollar + 53 4140 million dollar + 41 3350 million dollar + 28 2660 million dollar + 24 1670 million dollar + 19 1280 million dollar + 15 1090 million dollar + 11 8100 million dollar + 11 6200 million dollar + 2 1

Internal structure – our organization

2011 2010Growth / renewal R&D

R&D / total revenue (%) 1.94 1.93R&D / value-added (%) 2.13 2.09

Technology investment Investment / revenue (%) 2.33 2.37Investment / value-added (%) 2.56 2.58

Total investment Total investment / total revenue (%) 4.73 2.89Total investment / value-added (%) 5.20 3.14

Efficiency Sales per support staff

US$ million 0.92 0.84R crore 4.20 4.00

General and administrative expenses / revenue (%) 7.17 7.16Average proportion of support staff (%) 5.35 5.36Stability Average age of support staff (years) 31.8 30.4

Competence – our people

2011 2010Growth / renewal Total employees added during the year 1,30,820 1,13,796

Gross 43,120 27,639Net 17,024 8,946

Laterals added 15,883 4,895Staff education index 3,43,407 2,96,586Employees – number of nationalities 88 83Gender classification (%)

Male 66.2 66.5Female 33.8 33.5

Number of non-Indian national employees 7,805 6,064Efficiency Value-added / employee (R crore)

Software professionals 0.22 0.21Total employees 0.20 0.20

Value-added / employee (US$ million) Software professionals 0.05 0.04Total employees 0.05 0.04

Stability Average age of employees (years) 27 27Attrition – excluding subsidiaries (%) 17.0 13.4Attrition – excluding involuntary separation (%) 15.5 10.4

Note : The above figures are based on IFRS financial statements.

76 | ValueReporting™


ValueReporting™

At Infosys, we have always believed that information asymmetry between the Management and shareholders should be minimized. Accordingly, we have always been at the forefront in practicing progressive and transparent disclosures. We were the first in India to adopt the U.S. Generally Accepted Accounting Principles (U.S. GAAP). Further, we were the first foreign private issuer in India to file primary financial statements with the Securities and Exchange Commission (SEC) in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Thereafter, we rapidly progressed to additional disclosures that give deeper insights to the way we run our business and into our value creation. We continue to provide additional information even though it is not mandated by law because we believe that it will enable investors to make more informed choices about our performance.

The book, The Value Reporting Revolution : Moving Beyond the Earnings Game, authored by Robert Eccles, Robert Herz, Mary Keegan and David Phillips, associated to the accounting firm, PricewaterhouseCoopers, (published by John Wiley & Sons, Inc., U.S., ©2001), acknowledged the need to go beyond GAAP in providing information to shareholders. In their book, Building Public Trust : The Future of Corporate Reporting (published by John Wiley & Sons, Inc., U.S., ©2002 PricewaterhouseCoopers), our business model and reporting were referred to in detail.

We believe the following Value Reporting™ paradigm applies to us :

The ValueReporting™ paradigm

We identified the need to provide a range of non-financial parameters early in our existence – before our Indian public offering in 1993.

To reduce information asymmetry, we make the following disclosures in addition to the mandated Indian and IFRS financial statements and supplementary data as required by the relevant statutes :

• Brand valuation

• Balance Sheet including intangible assets

• Economic Value-Added (EVA®) statement

• Intangible asset scorecard

• Risk management report

• Human resource accounting and value-added statement

ValueReporting™ | 77


The Corporate Reporting™ framework

By adopting similar internal measures to evaluate business performance, our employees are adjudged based on metrics that are additional to the financials. This balances financial and non-financial performance across all levels of the organization. Accordingly, we seek to align the measures by which stakeholders measure our performance with what results in employee rewards.

In addition to the Annual Report, a Sustainability Report measuring compliance against the Global Reporting Initiative (GRI) is also being published since fiscal 2008.

In fiscal 2005, we adopted and furnished eXtensible Business Reporting Language (XBRL) data to the United States Securities and Exchange Commission (SEC) for the first time. We are the fourth Company worldwide to adopt XBRL. As the SEC website is under preparation for the acceptance of IFRS XBRL filings, we have not been furnishing our IFRS filings after March 31, 2009 although we have completed a pilot testing on XBRL statements in IFRS. We have been invited by the International Accounting Standards Board to conduct pilot testing of the new versions of the IFRS taxonomy.

The book, One Report : Integrated Reporting for a Sustainable Strategy, authored by Robert Eccles and Michael Krzus, (published by John Wiley & Sons, Inc., U.S., © 2010), analyses the need to give one integrated report for financial and non-financial measures for providing information to shareholders. Although we give all the information through multiple reports today, we would be striving towards an integrated report in future. In an endeavor to achieve the same we have significantly enhanced the involvement of social media network by having a Company presence on FacebookTM and TwitterTM for interacting with a wider and larger part of the stakeholder community. We have also adopted a social media policy that provides guidelines for participating in social media responsibly without compromising the Company’ interest by deliberate or inadvertent disclosure of Company confidential / proprietary information.

In the coming years, we will continue in our commitment to furnish additional qualitative information to help our shareholders better understand the Management of our business.

78 | Managem

ent structure


ation 2010-11

Management structure

Infosys Foundation | 79


Infosys Foundation

It is every man’s obligation to put back into the world at least the equivalent of what he takes out of it.

– Albert Einstein

The Infosys Foundation was set up in 1996 with the noble intention of supporting the underprivileged sections of the society and enriching their lives.

Promoted by Infosys Technologies Limited, the Foundation started small, but has now spread its work across various parts of India. A small but dedicated team of the Foundation has sustained and nurtured developmental programs across the most needy areas. The Foundation’s activities range from making healthcare accessible, to spreading education, sponsoring the arts and rehabilitation of affected communities, especially in the rural and underdeveloped regions of India.

The key focus areas of the Foundation are :

• Social rehabilitation and rural uplift

• Learning and education

• Healthcare

• Arts and culture

The highlights of some of the projects the Foundation was involved in during 2010-11 are :

Learning and educationEducation is a strong empowering factor in improving the quality of life of the underprivileged and to bring about grass root socio-economic change. The Foundation believes that by providing the platform to support primary, secondary, higher education, vocational and professional learning through public and private agencies, we can empower our people to realize their full potential. Some of the work that the Foundation has done in this field during 2010-11 are :

• Distributed Kannada and English illustrated story book series – Chandamama in 3,158 schools across rural Karnataka

• Awarded a cash reward of R 10,000 to each team that participated in the Olympiad Science Congress through the Tata Institute of Fundamental Research

• Awarded scholarships to 4,000 meritorious students from economically weaker backgrounds

• Awarded 10 scholarships to meritorious Ph.D students in various faculties at Gulbarga University

• Supplied books and education materials to the Door Step mobile school that provides free education to underprivileged children in Pune

• Helped in part in the construction of school buildings and toilets in Andhra Pradesh, Chennai, Maharashtra, Bihar and Madhya Pradesh

• Donated furniture to colleges, schools and libraries in Maharashtra and Karnataka

• Donated computers to schools in Karnataka, Andhra Pradesh and Maharashtra

• Assisted in the renovation of the library at the Gokhale Institute of Public Affairs that houses 50,000 books

• Through the Manohar Grantha Mala, helped publish the unpublished works of writers of yesteryear for the purpose of documentation

• Sponsored the first International Sanskrit Book Fair held in Bangalore

HealthcareDeveloping countries such as India face an acute need in the areas of accessible and affordable healthcare. The Infosys Foundation regularly supports programs that address this need. In 2010-11, the Foundation has supported the following initiatives and programs :

• Completed the construction of Standard Care & Rehabilitation Centre for mentally ill homeless persons run by the Chittaprakash Trust in H. D. Kote, Karnataka

• Supplied mobile incubators to different hospitals on an experimental basis for the care of poor patients

• Supplied food to in-patients suffering from leprosy, tuberculosis, HIV and eye conditions in rural Karnataka

Arts and cultureWith rapid urbanization and advances in technology, local crafts and arts are becoming endangered, and the lack of sponsorship and support is making their survival even more difficult. The Infosys Foundation identifies, nurtures and promotes rare and vanishing folk arts of the country, and supports them through various scholarships. In the year, 2010-11, the Foundation supported the following initiatives :• Sponsored the publication of a book on Kantha embroidery that

speaks of the tradition of Kantha and its evolution into a highly valued art form

• Sponsored Yakshagana Puppet Shows by Kogga Kamath and Sri Gopalakrishna Yakshagana Bombeyata Sangha, Kasaragod and Surabhi troops from Hyderabad

• Sponsored stage theatre events and shows by various troupes, both local and international, for a year

• Sponsored music concerts by 50 musicians through the Bharatiya Vidya Bhavan

• Sponsored the publication of Karnataka Kala Darshana through the Navakarnataka Publication Pvt. Ltd.

• Sponsored the publication of Kannada plays, short stories and novels by Masti Venkatesh Iyengar by the M. V. J. K Trust (Reg.)

Social rehabilitation and rural welfareThe Foundation works closely with partners and communities that strive towards the mitigation of social inequality. In the year 2010-11, we were involved in the following activities :

• Constructed 2,541 houses for flood victims in Raichur and Yadgir districts

• Donated sewing machines to 500 destitute women in rural Karnataka and Andhra Pradesh and helped them earn a living and lead respectable lives

• Supported the rehabilitation of 914 street children in Delhi through the NGO, Sathi

• Supported the rehabilitation of 920 devadasi women and 1,240 devadasi children

• Sponsored the training of 300 tribal persons in agriculture, horticulture, sericulture, floriculture bee-keeping, farm machinery operation and maintenance, fishery, dairy and poultry farming, welding and carpentry

• Supported orphanages and schools for the physically handicapped, the visually impaired and the hearing impaired in Karnataka, Tamil Nadu and Maharashtra

• Provided support to development work in Bihar, Madhya Pradesh, Orissa and Andhra Pradesh through the Sri Kottala Basaveshwara Bharatiya Sikshana Samiti Sedam

• Empowered over 7,50,000 women in three districts in Karnataka by training them in hygiene, health, nutrition, infant care, livelihood, literacy and sanitation through an experimental program called Jnanavikasa.

80 | Report on health, safety and environment


Report on health, safety and environment

In managing Health, Safety and Environment (HSE) during the year, we focused our efforts on better design, smarter operations, reduction in wastage of resources and strengthening systems to reduce potential health and safety incidents.

OZONEOZONE – Infosys’ Health, Safety and Environmental Management System (HSEMS) enunciates our philosophy and commitment towards environmental protection and management of health and safety of our employees, contractors and visitors. During March 2011, we were recertified compliant to ISO 140001: 2004 standard and OHSAS 18001: 2007 specifications at all our development centers in India. These certifications are a testament to our consistent pursuit of excellence in HSE management at Infosys.

Some of the most significant HSE initiatives undertaken during the year are listed below:

Awareness and employee engagement We encourage our employees to get actively involved in initiatives that work towards the improvement of society and the environment around us. Several employee-driven eco groups have been instituted at our development centers and we encourage them to participate in campaigns that inculcate eco-friendly lifestyles. Some of the major environmental campaigns conducted successfully during 2010-11 by our eco groups are:

• The global work party on climate change conducted by 350.org which saw participation by thousands of employees

• The Earth hour week which culminated in ’Earth hour‘ observed globally by the WWF

• The deployment of an interactive sustainability portal. This was developed by the Hyderabad Eco Club and helps in tracking the carbon footprint of the campus

EnergyOpportunities for energy conservation were identified in all our operations, for both the physical and IT infrastructure. Some of the significant initiatives that have been taken up during the year are listed here:

• Installation of wind turbines at our campuses in Pune, Bangalore and Mangalore

• Installation of occupancy sensors in conference rooms and rest rooms

• Introduction of LED lamps in lieu of fluorescent tubes

• Installed Variable Frequency Drives (VFD) in condenser pumps on chillers

• Initiative to replace old and inefficient utilities such as DG sets, pumps and motors

• Setting up of a strong monitoring system for the Environmental Management System as per ISO 14001 guidelines

These measures have resulted in a reduction of the per capita power consumption by over 3.85% during the year.

Infrastructure developmentOur persistent efforts to build the most sustainable infrastructure were acknowledged last year with two of our buildings, one each in Jaipur and Thiruvananthapuram campuses, being awarded the LEED Platinum rating, the highest standard for Green Buildings by the Indian Green Building Council (IGBC). Continuing this commitment, all our new buildings that are under construction have been registered for LEED rating from the IGBC and are designed with

a high performance envelope. This reduces the solar heat gain, while providing natural light. The energy performance of all the buildings designed in the previous year has been found to be more efficient than the globally accepted ASHRAE efficiency standards.

The following are some of the measures implemented during the year:

• A new building at our Hyderabad campus has been commissioned with radiant cooling, a method of cooling used for the first time in a commercial building in India.

• A chilled water storage tank of 300 KL capacity has been built in our Mangalore campus to increase the efficiency of the air-conditioning system. This system is under testing and is expected to reduce peak load as well as energy consumption. Initial results of this system have been very encouraging.

• Chilled beam systems, which are expected to be more efficient than the conventional air-conditioning systems are being implemented in three new buildings in our Pune campus.

• High efficiency chillers which consume considerably lesser power have been selected for all new upcoming projects, thus reducing peak demand as well as energy consumption.

IT infrastructureAs part of our efforts towards reducing power consumption and increasing operational efficiency, the following are some of the significant efforts pursued during the year:

• The optimized desktop power management configuration has been extended to around 80,000 desktops. An in-house application, ‘Terminator’, was designed to force-schedule the shutdown of desktops. This is being enhanced to achieve further reduction in power demand by desktops. In addition to this, around 10,000 older desktops have been replaced this year with newer power efficient models.

• We have continued our efforts towards restructuring the existing data centers and server rooms. Around twelve server rooms have been revamped this year and about 4,400 sq. ft. of server room / lab space has been released. Further, adoption of internal enterprise cloud, a shared, secure and virtualized computing environment with an easy-to-use ‘self-service’ portal, by projects has been swift. On an average 90% of the virtual instances are in use at any given time and we are planning to augment the capacity shortly.

• Video Conference (VC) usage has increased steadily this year and currently on an average around 2,500 VC calls are scheduled per month. Further, we have introduced Telepresence, an ultra high definition (1080p) capability VC facility, in three locations. Telepresence relays true life-size images and employs spatial audio to provide an immersive experience to the participants. Usage of this facility would help us connect with customers at CXO levels using VC and reduce travel requirements.

Green power• During the year we worked with electricity and power regulators

in Karnataka and at the Centre for making green power cheaper, an achievement that is significant not only for Infosys but would also benefit the community at large. A similar initiative is being taken up in other parts of the country. Infosys purchased about 14.52 million units of green power during the previous year and this figure is expected to increase substantially in the coming years.

• On renewable energy, a solar photo voltaic system of about 200 KW and 125 KW are being installed at the Jaipur and Thiruvananthapuram campuses respectively. These together are expected to generate about 4,50,000 units of electricity annually,

Report on health, safety and environment | 81


thus reducing the burden on the grid.

WaterRecognizing the immense importance of water as a natural resource, we have successfully achieved our target of reducing our employee ‘per capita’ fresh water consumption in our Indian campuses by 6.80% during 2010-11 through various water conservation initiatives. As part of our corporate goal to become a water-neutral organization, we have built rainwater harvesting reservoirs in our Mysore, Hyderabad, Pune and Mangalore campuses with a combined water holding capacity of over 300 million liters. We have also built state-of-the art waste water treatment plants to recycle and reuse the waste water generated in our campuses for flushing, landscaping and air-conditioning requirements.

Carbon emissionsOur goal is to become carbon-neutral. Several energy reduction programs have been initiated, such as campaigns promoting the use of mass transport and car-pooling among employees. We encourage our employees to use teleconferencing and video conferencing facility to avoid long-distance travel, thus minimizing the impact on the environment.

Chemical substances In order to minimize the harmful environmental impact of chemicals used in our facilities primarily for housekeeping, landscaping and pest control, we have standardized the chemicals used across our Indian campuses. This has resulted in a 75% reduction in the number of chemicals being used. We have introduced green seal products for housekeeping and are working on finding eco-friendly alternatives in other areas.

Waste managementWe have embarked on recycling all organic waste generated at our campuses with the establishment of a biogas plant in our Mysore campus. A second plant is under construction in our Pune campus. The biogas generated will be used as cooking fuel in the food courts and the final treated waste will be used as manure in our gardens. Effective waste management has been achieved by ensuring environment friendly methods of disposal and / or disposal as per regulations.

BiodiversityWe planted about 40,000 trees during 2010-11, taking the total number of trees in our Indian locations to more than 1,80,000. We are trying to ensure that most of the trees are native to the geographical locations of our campuses, which helps to promote local biodiversity and contributes to water conservation. Our sustainable practices have made our Mysore campus home to more than 52 species of birds including many endangered ones.

Health and safety

SafetySafety is every employee’s responsibility and concern. Employees are expected to report incidents or workplace hazards. An Occupational Health & Safety (OH&S) Committee is set up in each development center. This committee is made up of OH&S representatives who represent employees of a designated work group and its role is to take a proactive approach in assisting the employer to develop and implement the best possible OH&S policies, plans and procedures for eliminating or minimizing the occupational risks that are inherent in the business. Hazard and risk identification exercises are carried out and programs / measures for the reduction or mitigation of the same are ensured.

Health Assessment and Lifestyle Enrichment (HALE)HALE is a best in class initiative aimed at improving organizational productivity through employee health and wellbeing. Starting as a response to increasing instances of lifestyle ailments like heart disease and stress, HALE has expanded its programs that span across several Development Centers. During the year, the HALE team held several health interventions, leisure interventions and innumerable awareness and information campaigns such as the Health Week, Safety Week, Health Matters – Arrest Hypertension, specials on our corporate television channel, InfyTV, online interventions, quizzes, puzzles, chat sessions with doctors and specialists, information mailers and sharing of health tips.

While Infosys continues on its journey to becoming a world-class employer, the HALE team is striving to ensure that it does so with employees who are healthy, able to balance work and life effectively.

Online health and wellness supportWe have a tie-up with ChiHealth, a Health and wellness information portal, which offers online Integrated Wellness Services. Our employees can access this platform from the HALE portal. The ChiHealth is a one-stop solution that offers holistic preventive healthcare online services and addresses pertinent issues related to health and wellbeing. This portal has a wealth of information on wellness, preventive health, nutrition, diet, fitness, diseases and disorders. Employees visiting the portal are provided information on health and wellness by a team of experts in the respective areas.

Assessments and reviewsPeriodic reviews and audits of the HSEMS are conducted for evaluating the HSE performance and the suitability and effectiveness of processes and programs in achieving the objectives and targets set for the year.

PHOENIX – The Business Continuity Management System (BCMS) at InfosysDuring the year, all development centers in India were certified compliant to the BS25999 standard. Our Business Continuity program Management System (BCMS) comprises three phases:

• Emergency Response Phase : This is an incident management phase which refers to the initial reaction to an incident, focused on protecting life and organizational assets.

• Business Continuity Phase : This phase refers to the resumption of the most time-sensitive or critical business operations following an incident.

• Disaster Recovery Phase : This phase refers to bringing back business operations to a normal / sustainable level, following an incident.

Mock drills and exercises are carried out as per schedules and the learning from exercises, incidents and threats are analyzed and appropriate preventive and corrective actions are undertaken.

For additional details on our sustainability initiatives, refer to the Sustainability Report available on our website, www.infosys.com.

82 | Multi-country GAAP


Financial statements (unaudited) presented in substantial compliance with GAAP requirements of various countries and International Financial Reporting Standards and reports of substantial compliance with the respective corporate governance standards

Over the past decades, technology and information revolutions have fundamentally transformed economic and political relationships between nations. Thanks to the opening up of financial markets across the globe, investors today have a wide choice of capital markets to invest in. Consequently, the global investor must have access to information about the performance of any company, in any market that he or she chooses to invest in. However, differences in language, accounting practices, and reporting requirements in various countries render performance reports by many companies rather investor-unfriendly.

Today, the strength of a global company lies in its ability to access high-quality capital at the lowest cost from a global pool of investors. Such companies study the needs of global investors and publish financial information in a language and form understood by their existing as well as prospective investors. In the process, financial statistics may have to be restated and financial terminology may need to be translated. Indeed, a key issue in international financial analysis is the restatement and translation of financial reports that describe operations conducted in one environment, but which are the subject of review and analysis in another.

The International Financial Reporting Standards (IFRS) have gained significant momentum across the globe. Many countries have adopted IFRS and some of them, including India, are in the process of adopting the same. The U.S. Securities and Exchange Commission (SEC) permits foreign private issuers to file financial statements in accordance with IFRS without any reconciliation with U.S. GAAP. We have fully adopted IFRS as issued by the International Accounting Standards Board for our filings with SEC, effective March 31, 2009. Audited IFRS statements are available in our Annual Report on Form 20-F, filed with SEC for the year ended March 31, 2011. The details are also available on our website www.infosys.com.

Australia, France, Germany and United Kingdom have adopted IFRS. We are presenting extracts of the unaudited consolidated financial statements for these countries presented in substantial compliance with IFRS in their respective local currencies. Canada is in the process of adopting IFRS in full with effect from the year 2011. Canadian GAAP financial statements have been presented on the same basis as earlier years. The financial information presented in Japanese GAAP in this annual report has been translated from our audited IFRS financial statements. The information will be included in the Securities Report to be filed with the Ministry of Finance, Japan. Further, keeping in mind their local regulations and practices, these countries have formulated their own corporate governance standards. We have provided statements on substantial compliance with these standards in the respective national languages of these countries.

The unaudited consolidated Balance Sheets and Income Statements, excluding notes to the financial statements, have been presented by converting the various financial parameters, reported in our consolidated Balance Sheets and Income Statements, into the respective currencies of the above countries.

In addition, appropriate adjustments have been made for differences, if any, in accounting principles, and in formats, between India, these countries and IFRS.

Corporate governance report – Australia, Canada, France, Germany, Japan and United Kingdom

Australia ASX Corporate Governance Council – Principles of good corporate governance and best practices recommendations The Australian Stock Exchange (ASX) Corporate Governance Council (‘the Council’) was formed on August 15, 2002 to develop and deliver an industry-wide, support framework for corporate governance which could provide a practical guide for listed companies, their investors, the wider market and the Australian community. The Council published its first edition of ‘Principles of Good Corporate Governance and Best Practice Recommendations’ document in March 2003. The Council undertook an extensive review of the first edition and issued a revised Corporate Governance Principles and Recommendations (second edition Corporate Governance Guidelines) in August 2007. Further, amendments were made to the second edition in 2010, and were applicable to an entity’s first financial year commencing on or after January 1, 2011, though early application was encouraged. The Company has adopted these amendments early. The corporate governance principles and recommendations of the council are not mandatory, but Australian listed entities must disclose those principles that are not in compliance and the reasons for non-compliance.

The council proposed eight core principles which it believes underlie good corporate governance. We comply substantially with all recommendations made by the council, except the following :

1. Recommendation 2.2 – The Chair should be an independent director : The current policy of the Company is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and to separate the board functions of governance and management. The Board consists of 14 members, 5 of who are executive or full-time directors, 1 is non-executive and 8 are independent directors. Mr. N. R. Narayana Murthy, who is the Non-Executive Member of the Board, is our Chairman and Chief Mentor. Further, Prof. Marti G. Subrahmanyam has been appointed as the Lead Independent Director. Effective August 21, 2011, the Board has appointed Mr. K. V. Kamath, who is our independent director, as Chairman of the Board.

The financial information provided in this section is unaudited. Financial information presented in substantial compliance with the GAAP requirements of countries and IFRS may not meet all the regulatory requirements to be characterized as financial statements presented in explicit and unreserved compliance with such requirements. The statements on compliance or substantial compliance with corporate governance standards of various countries may not meet all the relevant regulatory requirements to be characterized as statements of explicit and unreserved compliance with corporate governance requirements. The financial information provided in this section does not contain sufficient information to allow full understanding of our results or our state of affairs. In the event of a conflict in interpretation, the ‘Audited Indian GAAP financial statements’ section and the ‘Corporate governance report’ section of the Annual Report should be considered. We caution investors that these reports are provided only as additional information to our global investors. Using such reports for predicting our future, or of any other company, is risky. We are not responsible for any direct, indirect or consequential losses suffered by any person using these corporate governance reports, financial statements or data.

Multi-country GAAP | 83


2. Recommendation 3.3 and 3.4 – The diversity policy : The Company is committed to providing a work environment free of discrimination and harassment. The Company is an equal opportunities employer and makes employment decisions based on merit and business needs. The Company believes in equal work opportunities for all employees and does not condone favoritism or the appearance of favoritism at the workplace. These are included in the Company’s code of conduct. Further, internally the Company has an “Infosys Women’s Inclusivity Network (IWIN)” sponsored by the non-executive chairman. The objective of IWIN is to create a gender sensitive and inclusive work environment, help women in their career lifecycle and develop women for managerial and leadership roles, thereby maintaining gender ratios at all levels in the organization. The Company also discloses the percentage of women employees in the organization in the Additional Information to the Annual Report.

3. Recommendation 5.1 – Ensure compliance with ASX listing rule disclosure requirements : We are not listed on the Australian Stock Exchange. However, we have established necessary policies and procedures to ensure that announcements are made in a timely manner, are factual, do not omit any material information and are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.

4. Recommendation 7.3 – Declaration in relation to the listed entity’s financial statements by Chief Executive Officer (CEO) and Chief Financial Officer (CFO) provided in accordance with section 295A of the Corporation Act : We are not listed on the Australian Stock Exchange and hence this recommendation is not applicable to the Company. However, our CEO and CFO provide necessary certifications with respect to the Company’s financial statements and internal controls. The certification is provided in compliance with the Indian and U.S. regulatory requirements.

CanadaCorporate governance : A guide to good disclosure, issued by the the Toronto Stock ExchangeIn December 2003, The Toronto Stock Exchange (TSX) issued guidelines which would help issuers prepare meaningful disclosure that complies with its requirements. TSX only requires companies to explain their practices, and not to adopt the practices in the guidelines. These guidelines were updated in January 2006.

We substantially comply with all the recommendations.

FranceLa gouvernance d’entreprise des sociétés cotées – Décembre 2008Les principes de la gouvernance d’entreprises des sociétés cotées tirent leur origine des rapports VIENOT de juillet 1995 et juillet 1999, des rapports BOUTON de septembre 2002, janvier 2007 et octobre 2008 sur les recommandations concernant la rémunération des dirigeants des sociétés cotées. Cet ensemble de recommandations fut préparé par des groupes de travail de L’Association Française des Entreprises Privées (AFEP) et le Mouvement des Entreprises de France (MEDEF). Cette « consolidation » des travaux menés par des présidents de grandes sociétés françaises constitue une réponse à la communication de la Commission Européenne sur la gouvernance d’entreprise et le droit des sociétés, qui préconise que chaque Etat membre désigne un code de référence auquel les sociétés devront se conformer ou expliquer en quoi leurs pratiques diffèrent et pour quelles raisons.

Ce rapport avait fait plusieurs recommandations. Notre société se conforme strictement à ces recommandations, à l’exception des points ci-dessous :

7.1 La représentation des salaries et des salaries actionnaires – La politique actuelle de la société est d’avoir 14 membres du conseil. Dans ce conseil, 8 sont des directeurs indépendants, 1 un directeur non-cadre et 5 des directeurs cadres. De ces directeurs cadres, 3 sont des directeurs fondateurs et 2 sont des directeurs employés.

14.2.1. Revue des comptes par un comité d’audit – La société a un comité d’audit qui comprend 4 directeurs indépendants. Tous les membres du comité sont des financiers et un membre est l’expert financier. Le comité se réunit au moins une fois par trimestre (un jour avant la réunion du conseil d’administration) pour revoir et examiner les états financiers.

17. Déontologie pour les directeurs – La législation locale des entreprises ne demande pas que les directeurs détiennent personnellement des actions de la société. Cependant, la plupart des directeurs, excepté un, détiennent personnellement des parts de la société.

GermanyDeutscher Corporate Governance Kodex, in der Fassung vom 26. Mai 2010Der Deutsche Corporate Governance Kodex stellt wesentliche gesetzliche Vorschriften zur Leitung und Überwachung deutscher börsennotierter Gesellschaften dar. Der Kodex wurde entwickelt, um das deutsche Corporate Governance System transparent und nachvollziehbar zu machen. Er will das Vertrauen der internationalen und nationalen Anleger, der Kunden, der Mitarbeiter und der Öffentlichkeit in die Leitung und Überwachung deutscher börsennotierter Gesellschaften fördern.

Der Kodex enthält zahlreiche Empfehlungen. Grundsätzlich folgt unser Unternehmen diesen Empfehlungen der Regierungskommission, es gibt jedoch folgende Ausnahmen:

1. Empfehlungen 3, 4 and 5 – Das duale System der Unternehmenseinheit – Das Unternehmen hat ein einstufiges Führungssystem, in welches sowohl leitende, als auch überwachende Positionen integriert sind. Zurzeit besteht das System aus 14 Vorständen, darunter 5 geschäftsführende, 1 nicht geschäftsführender und 8 unabhängige Vorstände.

2. Empfehlung 4.1.5 – Vielfalt in den Führungsfunktionen – Der Ernennungsausschuss des Aufsichtsrats ist verantwortlich für die Überwachung des Ernennungsprozesses der höchsten Vorstandspositionen im Unternehmen und dafür, solche qualifizierten Personen zu finden, zu überprüfen und dem Ausschuss zu empfehlen, die als geschäftsführender, nicht geschäftsführender oder unabhängiger Vorstand, nach den vom Ausschuss festgelegten Anforderungen geeignet erscheinen. Der Ernennungsausschuss hat bei der Besetzung von Führungspositionen das Kriterium der Vielfalt in die Überlegungen mit einbezogen.



Japan

日本日本におけるコーポレート・ガバナンスに関する問題のいくつかについては、日本の法令（会社支配の構造や手続については会社法、コーポレート・ガバナンスの状況の開示については金融商品取引法および開示に関する内閣府令等）および株式会社東京証券取引所の上場会社コーポレート・ガバナンス原則（同原則の尊重が有価証券上場規程第445条の2で規定されている。同原則は、http://www.tse.or.jp/rules/cg/principles/index.htmlにて入手可能）が対処している。金融商品取引法、関係内閣府令および上場会社コーポレート・ガバナンス原則は、インフォシス・テクノロジー・リミテッドのような日本における継続開示会社に対して、コーポレート・ガバナンスの状況（例えば、会社の機関の内容、内部統制システムの整備の状況、リスク管理体制の整備の状況、役員報酬の内容、監査報酬の内容、内部監査の組織および手続等）の開示を求めている。当社は、本年次報告書においてこの情報を開示している。

United KingdomThe U.K. corporate governance code supersedes and replaces the combined code on corporate governance issued in June, 2008. It follows a review by the Financial Reporting Council of the implementation of the code in 2008 and subsequent consultation on possible amendments to the code. This new code is applicable for reporting years beginning on or after June 29, 2010.

We substantially comply with all recommendations of the combined code except for the following:

1. Code B.1.1 – Board balance and independence – The independent directors annually affirm their independence as per the definition of the Indian and U.S. listing rules. The Board of Directors also annually determine the independence of these directors. The local listing rules also prescribe a maximum tenure of nine years for an independent director to serve on a company’s board. The rule was effective January 2006. None of our independent directors have served for more than nine years from the date of the rule becoming effective.

2. Code B.2.4 – Appointments to the Board – The nominations committee of the Board of Directors is responsible to oversee the Company’s nomination process for the top level management positions and to identify, screen and recommend to the Board individuals qualified to serve as executive directors, non-executive directors and independent directors consistent with the criteria approved by the Board. The Nominations Committee believes that sound succession planning of senior leadership is the most important ingredient for creating a robust future for the Company. Therefore, the Committee has adopted a rigorous process to ensure that the Board selects the right candidates for senior leadership positions. The Company does not appoint external search consultants nor openly advertises for appointment of Chairman or non-executive director.

3. Code B.4.1 – Induction on joining the Board – All new non-executive directors inducted into the Board are given an orientation. Presentations are made by various executive directors giving an overview of our operations to familiarize the new non-executive directors with the operations. The new non-executive directors are given orientation on our services, group structure and subsidiaries, our constitution, Board procedures and matters reserved for the Board, our major risks as well as our risk management strategies.

The Board’s policy is to have separate meetings regularly with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management make presentations on relevant issues.

4. Code B.6.2 – Evaluation of Board – The Company is not listed on the London Stock Exchange and is not part of FTSE 350. However, the compensation committee of the Company, together with the CEO, reviews the performance of all the executive directors and senior management each quarter, on the basis of detailed performance parameters set for each of the executive directors at the beginning of the year. The compensation committee may from time-to-time, also evaluate the usefulness of such performance parameters, and make necessary amendments. The Board evaluates the performance of non-executive directors through a peer-evaluation process every year.

5. Code D.1.2 – Remuneration policy – The Company has a policy to allow its executive directors to serve on the board of two other business entities with the prior consent of the Chairperson of the Board of Directors. Remuneration earned by virtue of such board membership is retained by the directors concerned.

6. Code E1 – Dialogue with institutional investors – Our communication policy addresses the needs of all investors. We use various forums to communicate with our investors and share long-term and short-term plans and our corporate strategies. As a policy, we do not differentiate between small and large investors. Non-executive directors do not meet with large investors as required under the code.

7. Code E.1.1. and E.1.2 – Relations with shareholders – The CEO, COO, CFO, members of the Executive Council and the Investor Relations team meet investors on a regular basis to understand their views and perspectives. The Company also has a practice of conducting analyst meets both in India and abroad. Views obtained from investors and analysts during the course of such meetings are communicated to the Board of Directors at the ensuing Board meeting.



Consolidated Balance Sheets (unaudited) as of March 31, Australian Dollar (AUD) in million

2011 2010AssetsCash and cash equivalents 3,615 2,943

Available-for-sale financial assets 5 612Investments in certificates of deposit 26 289Trade receivables 1,009 849Unbilled revenue 270 204Derivative financial instruments 15 23Prepayments and other assets 199 156

Total current assets 5,139 5,076Property, plant and equipment 1,050 1,079Intangible assets 190 213Available-for-sale financial assets 5 9Deferred tax assets 82 85Income tax assets 216 161Other non-current assets 99 84

Total non-current assets 1,642 1,631Total assets 6,781 6,707Liabilities

Trade payables 10 2Derivative financial instruments – –Current tax payable 177 176Client deposits 5 2Unearned revenue 112 129Employee benefits 30 32Provisions 19 20Other current liabilities 436 415

Total current liabilities 789 776Deferred tax liabilities – 28Employee benefits 56 41Other non-current liabilities 14 14

Total non-current liabilities 70 83Total liabilities 859 859Net assets 5,922 5,848Equity

Share capital – 600,000,000 equity shares authorized, issued and outstanding 571,317,959 and 570,991,592 as at March 31, 2011 and March 31, 2010, respectively (including share premium) 844 836Retained earnings 6,619 5,030Other components of equity (1,541) (18)

Total equity attributable to equity holders of the Company 5,922 5,848

Financial information presented in substantial compliance with Australian Accounting Standards Board (AASB)

Consolidated statements of comprehensive income (unaudited) for the years ended March 31,

Australian dollar (AUD) in million, except share data

2011 2010Revenues 6,405 5,654Cost of sales 3,708 3,235Gross profit 2,697 2,419Operating expensesSelling and marketing expenses 352 295Administrative expenses 459 405Operating profit 1,886 1,719Other income, net 283 246Profit before income tax 2,169 1,965Income tax expense 580 419Net Profit 1,589 1,546Other Comprehensive incomeReversal of impairment loss on available-for-sale financial asset – 2Gain transferred to net profit on sale of available-for-sale financial asset – (1)Fair value changes on available-for-sale financial asset, net of tax effect (2) 7Exchange differences on translating foreign operations 76 793Total other comprehensive income 74 801Total comprehensive income for the year 1,663 2,347Profit attributable to : Owners of the company 1,589 1,546Non-controlling interest – –Profit for the year 1,589 1,546Total comprehensive income attributable to:Owners of the company 1,663 2,347Non- controlling interest – –Total comprehensive income for the year 1,663 2,347Earnings per equity share

Basic (AUD) 2.78 2.71Diluted (AUD) 2.78 2.71

Weighted average number of shares used in computing earnings per equity share

Basic 571,180,050 570,475,923Diluted 571,368,358 571,116,031

Notes :1. The functional currency of the Company is the Indian Rupee. These financial statements

have been presented by translating revenue and expenditure at an average rate during the year; assets, liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholders’ equity at an average rate for the year. The difference arising on translation is shown under other components of equity.

2. Exchange rates (1 AUD =)

in r

2011 2010Average rate 42.95 40.30Period end rate 46.11 41.16



Consolidated Balance Sheets (unaudited) as of March 31, Canadian dollars (CAD) in million, except share data

2011 2010AssetsCurrent Assets

Cash and cash equivalents 3,624 2,742Investments in liquid mutual fund units 5 570Investment in certificate of deposits 26 269Trade accounts receivable 1,011 791Unbilled revenue 271 190Prepaid expenses and other current assets 214 167

Total current assets 5,151 4,729Property, plant and equipment 1,053 1,005Goodwill 179 186Intangible assets, net 11 12Investments in liquid mutual fund units 5 8Deferred tax assets 82 79Advance income taxes 216 150Other assets 101 78

Total assets 6,798 6,247Liabilities and stockholders’ equityCurrent liabilities

Accounts payable 10 2Income taxes payable 177 164Client deposits 5 2Unearned revenue 112 120Other current liabilities 487 660

Total current liabilities 791 948Non-current liabilities

Deferred income tax liabilities – 26Other non-current liabilities 70 52

Parent company stockholders’ equity

Common stock, R5/- par value 600,000,000 equity shares authorized, issued and outstanding – 571,317,959 and 570,991,592 as of March 31, 2011 and 2010 respectively 73 73Additional paid-in capital 681 705Accumulated other comprehensive income (279) (397)Retained earnings 5,462 4,840

Total parent company stockholder’s equity 5,937 5,221

Non-controlling interest – –Total equity 5,937 5,221Total liabilities and stockholders’ equity 6,798 6,247

Financial information presented in substantial compliance with GAAP requirements of Canada

Consolidated statement of earnings and retained earnings (unaudited) for the years ended March 31,

CAD in million, except share data

2011 2010Sales 6,144 5,232Cost of sales 3,556 2,994Gross margin 2,588 2,238ExpensesSelling, general and administration expenses 778 648Income from operations 1,810 1,590Provision for investments – (1)Interest and other income 272 215Gain on sale of long term investment – 12Earnings before income taxes 2,082 1,818Provision for income taxes 556 388Net earnings before non-controlling interest 1,526 1,430Non-controlling interest – –Net earnings after non-controlling interest 1,526 1,430Cash dividend declared 904 379

622 1,051Retained earnings, beginning of the year 4,840 3,778Reserves on consolidation of trusts (1) – 11Retained earnings, end of the year 5,462 4,840Earnings per share Net earnings

Basic (CAD) 2.67 2.51Fully diluted (CAD) 2.67 2.50

Weighted average number of shares

Basic 571,180,050 570,475,923Fully diluted 571,368,358 571,116,031

(1) Effective fiscal 2010 treasury shares held by controlled trusts were consolidated


have been presented by translating revenue and expenditure at an average rate for the year; assets, liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholders’ equity at an average rate for the year. The difference arising on translation is shown under accumulated other comprehensive income.

2. Exchange rates (1 CAD =)

in r




Bilan consolidé (non-audité) au 31 mars en millions d’euros, sauf résultat par action

2011 2010ACTIFActif circulant

Disponibilités 2,630 2,004Valeurs mobilières de placement 4 417Certificats de dépôt 19 197Clients 734 578Factures à établir 196 139Instruments financiers dérivés 11 16Charges constatés d’avance et autres actifs circulants 145 105

Total actif circulant 3,739 3,456Actif non-circulant

Installations techniques, matériels et outillages industriels 764 735Fonds de commerce 130 136Immobilisations incorporelles 8 9Immobilisations financières disponibles 4 6Impôt différé actif 60 58Impôt sur les sociétés actif 157 110Autre actif non-circulant 72 56

Total actif non-circulant 1,195 1,110Total actif 4,934 4,566PASSIF ET CAPITAUX PROPRESPassif circulant

Fournisseurs 7 1Impôts sur les sociétés passif 129 120Acompte client 4 1Produits constatés d’avance 82 88Avantages des salaries obligatoires 22 22Provisions 14 13Autre passif circulant 317 282

Total passif circulant 575 527Passif non circulant

Impôt différé passif – 19Avantages des salaries obligatoires 41 28Autre passif non circulant 10 10

Total passif 626 584Capitaux propres

Capital – 5/- par valeur 600,000,000 actions autorisées, émises et comprises 571,317,959 et 570,991,592 jusqu’au 31 mars, 2011 et 1, 2010, respectivement 48 48Prime d’émission 521 515Report à nouveau 4,560 3,425Autres capitaux propres (821) (6)

Total des capitaux propres attribué à la part groupe 4,308 3,982Total passif et capitaux propres 4,934 4,566

Etats financiers préparés en conformité avec les normes IFRS (International Financial Reporting Standards) – France

Compte de résultat consolidé des éléments latents (non-audité) pour les années finissant au 31 mars

En millions d’euros, sauf résultat par action

2011 2010Produits 4,574 3,400Coût des ventes 2,648 1,945Résultat brut 1,926 1,455Charges d’exploitation :Coût des ventes et de marketing 251 178Charges administratives 328 243Total des charges d’exploitation 579 421Résultat d’exploitation 1,347 1,034Autre produits, net 202 148Résultat avant impôt 1,549 1,182Impôt sur les bénéfices 414 252Résultat net 1,135 930Autre résultat – Eléments latents Extourne des pertes de valeur des immobilisations financières disponibles – 1Gain transféré au résultat net sur les ventes des immobilisations financières disponibles

– (1)

Gain latent sur les immobilisations financières disponibles, net de l’impact de l’impôt

(2) 4

Différence de change 55 423Total autre résultat – Eléments latents 53 427Total résultat élément latent 1,188 1,357Résultat attribué à : Part du groupe 1,135 930Intérêts minoritaires – –

1,135 930Total résultat élément latent attribué à : Part du groupe 1,188 1,357Intérêts minoritaires – –

1,188 1,357Résultat par action

Base (euros) 1.99 1.63Diliué (euros) 1.99 1.63

Nombre moyen pondéré d’actions

Base 571,180,050 570,475,923Dilué 571,368,358 571,116,031

Notes :1. La devise fonctionnelle de la société est la roupie indienne. Ces états financiers ont

été présentés en convertissant les produits et les charges avec un taux moyen pondéré pendant l’année ; l’actif circulant, le passif circulant, les installations techniques, les matériels et outillages industriels, les emprunts à long terme, avec un taux à la fin de l’année ; et toutes les augmentations des capitaux propres, avec un taux moyen pour l’année. La différence obtenue avec la conversion est comptabilisée dans les autres capitaux propres.

2. Taux de change (1 EURO =)

in r




Konsolidierte Bilanzen (ungeprüft) zum 31. März, Euros in Millionen, außer Angaben zu Aktien

2011 2010VERMÖGENSWERTEKurzfristige Vermögenswerte

Zahlungsmittel und Zahlungsmitteläquivalente 2,630 2,004Zur Veräußerung verfügbare finanzielle Vermögenswerte 4 417Festverzinsliche Wertpapiere 19 197Forderungen aus Lieferung und Leistung 734 578Geleistete Anzahlungen 196 139Derivate 11 16Anzahlungen und sonstige Vermögenswerte 145 105

Summe kurzfristige Vermögenswerte 3,739 3,456Langfristige Vermögenswerte

Sachanlagen 764 735Geschäfts- oder Firmenwert 130 136Immaterielle Vermögenswerte 8 9Zur Veräußerung verfügbare finanzielle Vermögenswerte 4 6Latente Steueransprüche 60 58Steueransprüche (Ertragsteuern) 157 110Sonstige langfristige Vermögenswerte 72 56

Summe langfristige Vermögenswerte 1,195 1,110Summe Vermögenswerte 4,934 4,566SCHULDEN UND EIGENKAPITALKurzfristige Schulden

Verbindlichkeiten aus Lieferung und Leistung 7 1Steuerschulden (Ertragsteuern) 129 120Kundenanzahlungen 4 1Verbindlichkeiten aus Fertigungsaufträgen / erhaltene Anzahlungen 82 88Verpflichtungen zu Leistungen an Arbeitnehmer 22 22Rückstellungen 14 13Sonstige kurzfristige Schulden 317 282

Summe kurzfristige Schulden 575 527Langfristige Schulden

Latente Steuerschulden – 19Verpflichtungen zu Leistungen an Arbeitnehmer 41 28Sonstige langfristige Schulden 10 10

Summe Schulden 626 584Eigenkapital

Gezeichnetes Kapital – R 5/- Nennwert 600,000,000 genehmigte Stammaktien, ausgegeben und ausstehend 571,317,959 und 570,991,592 zum 31. März 2011 und 31. März 2010, entsprechend 48 48Kapitalrücklage 521 515Bilanzgewinn 4,560 3,425Sonstige Teile des Eigenkapitals (821) (6)

Summe Eigenkapital, den Anteilseignern des Unternehmens zurechenbar 4,308 3,982Summe Schulden und Eigenkapital 4,934 4,566

Finanzielle Information, dargestellt in wesentlicher Übereinstimmung mit den IFRS (International Financial Reporting Standards) – Deutschland

Konsolidierte Gesamtergebnisrechnung (ungeprüft) für die Jahre endend zum 31. März,

Euros in Millionen, außer Angaben zu Aktien

2011 2010Umsatzerlöse 4,574 3,400Herstellungskosten 2,648 1,945Bruttoergebnis vom Umsatz 1,926 1,455Betriebliche Aufwendungen:Vertriebs- und Marketingaufwendungen 251 178Verwaltungskosten 328 243Summe betriebliche Aufwendungen 579 421Betriebsergebnis 1,347 1,034Sonstige Erträge, netto 202 148Gewinn vor Ertragsteuern 1,549 1,182Ertragsteueraufwand 414 252Jahresüberschuss 1,135 930Sonstiges Ergebnis Umkehr von Abwertungsverlusten von zur Veräußerung verfügbaren finanziellen Vermögenswerten

– 1

Gewinn aus dem Verkauf von zur Veräußerung verfügbaren finanziellen Vermögenswerten, der auf den Jahresüberschuss übertragen wurde

– (1)

Änderungen des beizulegenden Zeitwerts der zur Veräußerung verfügbaren finanziellen Vermögenswerte, bereinigt um Steuereffekte

(2) 4

Wechselkursdifferenzen aus der Umrechnung von Transaktionen in fremder Währung 55 423Summe sonstiges Ergebnis 53 427Summe Ergebnis 1,188 1,357Gewinn, zuzurechnen den: Anteilseignern des Unternehmens 1,135 930Minderheitsbeteiligten – –

1,135 930Summe Ergebnis, zuzurechnen den: Anteilseignern des Unternehmens 1,188 1,357Minderheitsbeteiligten – –

1,188 1,357Ergebnis pro Aktie

Einfach (Euro) 1.99 1.63Verwässert (Euro) 1.99 1.63

Gewichtete durchschnittliche Anteilsaktien, aus denen sich das Ergebnis pro Aktie errechnet

Einfach 571,180,050 570,475,923Verwässert 571,368,358 571,116,031

Anmerkung :1. Die funktionale Währung des Unternehmens ist die Indische Rupie. Diese

Jahresabschlüsse wurden durch Umrechnung von Erträgen und Aufwendungen unter Zugrundelegung eines jahresdurchschnittlichen Wechselkurses erstellt; kurzfristige Vermögenswerte, kurzfristige Schulden, Sachanlagen und langfristige Anleihen wurden mit dem Jahresendkurs umgerechnet; Zuwächse im Eigenkapital wurden mit dem Jahresdurchschnittskurs umgerechnet. Sich aus der Umrechnung ergebende Differenzen sind in den sonstigen Teilen des Eigenkapitals enthalten.

2. Wechselkurse (1 EURO =)in r

2011 2010Durchschnittskurs 60.14 67.02Periodenendkurs 63.38 60.45



インフォシス・テクノロジーズ・リミテッドおよび子会社

連結貸借対照表　3月31日現在

（単位：百万円（１株当たりデータを除く。））

2011年 3月31日現在

2010年 3月31日現在

資産

流動資産

現金および現金同等物 310,732 224,339売却可能金融資産 416 46,647譲渡性預金証書投資 2,245 22,035売上債権 86,725 64,691未収収益 23,199 15,549デリバティブ金融商品 1,247 1,746前払費用およびその他の資産 17,129 11,890

流動資産合計 441,693 386,897非流動資産

有形固定資産 90,301 82,235のれん 15,383 15,216無形固定資産 915 998売却可能金融資産 416 665繰延税金資産 7,068 6,486法人税資産 18,542 12,306

その他非流動資産 8,564 6,403非流動資産合計 141,189 124,309資産合計 582,882 511,206負債および資本

流動負債

仕入債務 832 166未払法人税 15,216 13,387顧客預り金 416 166繰延収益 9,645 9,812従業員給付債務 2,578 2,411引当金 1,663 1,497その他流動負債 37,501 31,597

流動負債合計 67,850 59,037非流動負債

繰延税金負債 – 2,162従業員給付債務 4,823 3,160その他非流動負債 1,164 1,081

負債合計 73,837 65,439資本

普通株式　1株の額面金額　13円授権株式数　600,000,000株発行済株式数　2011年3月31日現在571,317,959 株　2010年3月31日現在570,991,592株（それぞれ金庫株2,833,600株を除く。）

5,322 5,322

資本剰余金 58,371 57,706利益剰余金 440,196 383,405その他の資本の構成要素 5,155 (665)

当社株主帰属資本合計 509,044 445,767負債および資本合計 582,882 511,206

Financial information presented in substantial compliance with the International Financial Reporting Standards (IFRS) – Japan

インフォシス・テクノロジーズ・リミテッドおよび子会社

連結包括利益計算書　3月31日終了年度

（単位：百万円（株式数および１株当たりデータを除く。））

2010年 2009年

収益 502,309 399,453売上原価 290,776 228,579売上総利益 211,534 170,873営業費用：

販売費およびマーケティング費 27,606 20,871一般管理費 36,004 28,604営業費用合計 63,610 49,474営業利益 147,924 121,399その他の収益純額 22,201 17,378税引前利益 170,125 138,777法人税費用 45,483 29,601当期純利益 124,642 109,176その他包括利益

売却可能金融資産減損損失戻入れ – 166当期純利益に振替えられた売却可能金融資産売却益 – (83)売却可能金融資産の公正価値の変動（税効果後） (166) 499海外業務の為替換算差損益 5,987 46,148その他包括利益合計 5,821 46,730包括利益合計 130,462 155,906以下に帰属する当期純利益：

当社株主 124,642 109,176非支配持分 – –

124,642 109,176以下に帰属する包括利益合計：

当社株主 130,462 155,906非支配持分 – –

130,462 155,9061株当たり当期純利益

基本的（単位：円） 218 191希薄化後（単位：円） 218 191

1株当たり当期純利益の算定に使用した加重平均発行済株式数

基本的 571,180,050 570,475,923希薄化後 571,368,358 571,116,031

注：上記財務情報中の円金額は、2011年3月31日に株式会社三菱東京UFJ銀行が建値した対顧客電信直物売買相場の仲値である１米ドル＝83.15円により米ドル金額から円金額に換算されている。



Consolidated Balance Sheets (unaudited) as of March 31, United Kingdom Pound Sterling (GBP) in millions except share data

2011 2010ASSETSCurrent assets

Cash and cash equivalents 2,321 1,783Available-for-sale financial assets 3 371Investment in certificates of deposit 17 175Trade receivables 648 514Unbilled revenue 173 124Derivative financial instruments 9 14Prepayments and other assets 128 93

Total current assets 3,299 3,074Non-current assets

Property, plant and equipment 675 653Goodwill 115 121Intangible assets 7 8Available-for-sale financial assets 3 5Deferred income tax assets 53 52Income tax assets 139 98Other non-current assets 63 50

Total non-current assets 1,055 987Total assets 4,354 4,061LIABILITIES AND EQUITYCurrent liabilities

Trade payables 6 1Current income tax liabilities 114 106Client deposits 3 1Unearned revenue 72 78Employee benefit obligations 19 19Provisions 12 12Other current liabilities 280 251

Total current liabilities 506 468Non-current liabilities

Deferred income tax liabilities – 17Employee benefit obligations 36 25Other non-current liabilities 9 9

Total liabilities 551 519Equity

Share capital – R5/- par value 600,000,000 equity shares authorized, issued and outstanding 571,317,959 and 570,991,592 as of March 31, 2011 and March 31, 2010, respectively

33 33

Share premium 464 459Retained earnings 4,010 3,046Other components of equity (704) 4

Total equity attributable to equity holders of the Company 3,803 3,542Total liabilities and equity 4,354 4,061

Financial information presented in substantial compliance with the International Financial Reporting Standards (IFRS) – United Kingdom

Consolidated statements of comprehensive income (unaudited) for the years ended March 31,

GBP in millions except share data

2011 2010Revenues 3,887 3,008Cost of sales 2,250 1,721Gross profit 1,637 1,287Operating expenses Selling and marketing expenses 214 157Administrative expenses 279 215Total operating expenses 493 372Operating profit 1,144 915Other income, net 172 131Profit before income taxes 1,316 1,046Income tax expense 352 223Net profit 964 823Other comprehensive income Reversal of impairment loss on available-for-sale financial asset – 1Gain transferred to net profit on sale of available-for-sale financial asset – (1)Fair value changes on available-for-sale financial asset , net of tax effect (1) 4Exchange differences on translating foreign operations 46 390Total other comprehensive income 45 394Total comprehensive income 1,009 1,217Profit attributable to: Owners of the company 964 823Non-controlling interest – –

964 823Total comprehensive income attributable to:Owners of the company 1,009 1,217Non-controlling interest – –

1,009 1,217Earnings per equity share

Basic (GBP) 1.69 1.44Diluted (GBP) 1.69 1.44

Weighted average equity shares used in computing earnings per equity share

Basic 571,180,050 570,475,923Diluted 571,368,358 571,116,031


have been presented by translating revenue and expenditure at an average rate during the year; current assets, current liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholders’ equity at an average rate for the year. The difference arising on translation is shown under Other components of equity.

2. Exchange rates (1 GBP =)

in r


Extract of audited IFRS financial statements | 91


Extract of audited IFRS financial statements

Financial statements included in our annual filing with the U.S. Securities and Exchange Commission (SEC) in the Form 20-F have been prepared in compliance with the International Financial Reporting Standards as issued by International Accounting Standards Board (IFRS).

As in the previous year we will be availing NASDAQ’s rule amendment which allows a company to furnish its annual reports to its ADS holders on its website in lieu of physical distribution. Accordingly the annual report and the filing with the SEC in the Form 20-F is available on our website www.infosys.com. However, a physical copy will be made available to shareholders on request.

The extract of the audited Balance Sheet and Statement of Comprehensive Income as per IFRS is provided here under :

Consolidated Balance Sheets as of March 31, United States Dollar (US$) in million, except share data

2011 2010ASSETS Current assets

Cash and cash equivalents $3,737 $2,698Available-for-sale financial assets 5 561Investment in certificates of deposit 27 265Trade receivables 1,043 778Unbilled revenue 279 187Derivative financial instruments 15 21Prepayments and other current assets 206 143

Total current assets 5,312 4,653Non-current assets

Property, plant and equipment 1,086 989Goodwill 185 183Intangible assets 11 12Available-for-sale financial assets 5 8Deferred income tax assets 85 78Income tax assets 223 148Other non-current assets 103 77

Total non-current assets 1,698 1,495Total assets $7,010 $6,148LIABILITIES AND EQUITY Current liabilities

Trade payables $10 $2Current income tax liabilities 183 161Client deposits 5 2Unearned revenue 116 118Employee benefit obligations 31 29Provisions 20 18Other current liabilities 451 380

Total current liabilities 816 710Non-current liabilities Deferred income tax liabilities – 26Employee benefit obligations 58 38Other non-current liabilities 14 13Total liabilities 888 787Equity

Share capital- R 5 ($0.16) par value 600,000,000 equity shares authorized, issued and outstanding 571,317,959, and 570,991,592, net of 2,833,600 treasury shares as of March 31, 2011 and 2010, respectively 64 64Share premium 702 694Retained earnings 5,294 4,611Other components of equity 62 (8)

2011 2010Total equity attributable to equity holders of the Company 6,122 5,361Total liabilities and equity $7,010 $6,148

Consolidated statements of comprehensive income for the years ended March 31,

United States Dollar (US$) in million, except share data

2011 2010Revenues $6,041 $4,804Cost of sales 3,497 2,749Gross profit 2,544 2,055Operating expenses : Selling and marketing expenses 332 251Administrative expenses 433 344Total operating expenses 765 595Operating profit 1,779 1,460Other income, net 267 209Profit before income taxes 2,046 1,669Income tax expense 547 356Net profit $1,499 $1,313Other comprehensive income Reversal of impairment loss on available-for-sale financial asset – $2Gain transferred to net profit on sale of available-for-sale financial asset – (1)Fair value changes on available-for-sale financial asset, net of tax effect (2) 6Exchange differences on translating foreign operations 72 555Total other comprehensive income $70 $562Total comprehensive income $1,569 $1,875Profit attributable to : Owners of the Company 1,499 1,313Non-controlling interest – –

$1,499 $1,313Total comprehensive income attributable to : Owners of the Company 1,569 1,875Non-controlling interest – –

$1,569 $1,875Earnings per equity share

Basic ($) 2.62 2.30Diluted ($) 2.62 2.30

Weighted average equity shares used in computing earnings per equity share

Basic 571,180,050 570,475,923Diluted 571,368,358 571,116,031

Note :1. The functional currency of the Company is the Indian rupee. These financial

statements have been presented by translating revenue and expenditure at an average rate during the year; current assets, current liabilities, property, plant and equipment, long-term borrowings at the year-end rate; and accretions to stockholder’s equity at an average rate for the year. The difference arising on translation is shown under other components of equity.

2. Exchange rates (1 US$ =)

in R



92 | Global presence

Global presence

Asia Pacific

Hong Kong2 Exchange Square 8 / F, 8 Connaught PlaceCentral, Hong KongTel. : 852 2297 2231Fax : 852 2297 0066

JapanIzumi Garden Wing 2F1-6-3, Roppongi, Minato-kuTokyo 106 0032Tel. : 81 3 5545 3251Fax : 81 3 5545 3252

MalaysiaMerak Block, Suite BPersiaran Multimedia1st Floor, Cyberjaya,Kuala Lumpur 63000Tel. : 60 383 203 829

Mauritius4th Floor, B WingEbène Cyber TowersReduit, MauritiusTel. : 230 401 9200Fax : 230 464 1318

Singapore04-01 / 06, 1 Changi Business ParkCrescent, Singapore 486025Tel. : 65 6572 8400Fax : 65 6572 8405

Level 43, Unit 2Suntec Tower 29 Temasek BlvdSingapore – 038989Tel. : 65728400Fax : 65728400

United Arab EmiratesDubai506 and 805 Liberty House, DIFCP. O. Box 506846DubaiTel. : 971 4 508 0200Fax : 971 4 508 0225

SharjahZ3 Office 11, SAIF ZoneP. O. Box 8230, SharjahTel. : 971 6 557 1068Fax : 971 6 557 3768

Europe

BelgiumRegus Park Atrium11, Rue des Colonies KolonienstraatB 1000 BrusselsTel. : 32 2 517 62 30Fax : 32 2 517 67 00

Czech RepublicRegus Business CenterPrague Stock ExchangeRybna Street 682 / 1411005 Prague 1Tel. : 420 222 191 387Fax : 420 222 191 700

DenmarkRegus CopenhagenLarsbjoernsstraede 31454 CopenhagenTel. : 45 33 3772 94Fax : 45 33 3243 70

FinlandRegus Mannerheimintie 12 B00100 HelsinkiTel. : 358 925 166 239Fax : 358 925 166 100

FranceParisTour Opus 12, 4th Floor77 Esplanade du Général de Gaulle92 914 Paris La Defense 9 Tel. : 33 1 56 39 12 00Fax : 33 1 56 39 12 01

Toulouse7, Avenue Didier Daurat2nd Floor, Blagnac31700 ToulouseTel. : 33 5 34 50 92 77Fax : 33 5 34 50 91 90

GermanyEschbornTopas 1, Merganthalleralle 77 65760 EschbornTel. : 49 6196 9694 0Fax : 49 6196 9694 200

FrankfurtOpernturm, 22nd Floor, Bokenheimer Landstrasse, 60306 Frankfurt am MainTel. : 49 0 69 269566 000Fax : 49 0 69 269566 200

StuttgartLiebknechtstrasse 33D 70565 StuttgartTel. : 49 711 7811 570Fax : 49 711 7811 571

WalldorfPartner PortAltrottstr. 31, 69190 WalldorfTel. : 49 6227 73 4350Fax : 49 6227 73 4359

GreeceGreek Branch,Regus Hellas S.A. 166A Kifissias Avenue & 2, Sofokleous strMaroussi GR 151 26Tel : 30 210 727 9055Fax : 30 210 7279200

IrelandRegus Prembroke House30 Pembroke Street Upper Dublin 2Tel. : 353 1 234 2470Fax : 353 1 234 2575

NorwayRegus Business Center Ibsen ASC. J. Hambrosplass 2C1st Floor, Oslo 0164Tel. : 47 22 99 60 42Fax : 47 22 99 60 10

Russia4 / 430, 4. Lesnoy Pereulok,Moscow 125047Tel. : 7 495 642 8710Fax : 7 495 225 8500

SpainRegus – CUZCO IVPaseo de la Castellana 141-828046, MadridTel. : 34 91 503 0644Fax : 34 91 503 0530

SwedenStureplan 4C, 4tr114 35, StockholmTel. : 46 8 463 1112Fax : 46 8 463 1114

SwitzerlandBaselRegus Basel City CentreInnere Margarethenstrasse 5 Basel 4051Tel. : 41 0 61 204 4545Fax : 41 0 61 204 4500

Geneva18, Avenue Louis-Casai1209 GenevaTel. : 41 22 747 7894Fax : 41 22 747 7900

Zurich3rd Floor, Badenerstrasse 5308048 ZurichTel. : 41 43 817 4170Fax : 41 43 817 4150

The NetherlandsWorld Trade CenterH-Tower, 23rd FloorZuidplein 1901077 XV AmsterdamTel. : 31 20 796 5500Fax : 31 20 796 5501

United KingdomAberdeenCBXII West Wing 382 - 390 Midsummer BoulevardMilton Keynes MK9 2RGTel. : 44 1908 84 74 00Fax : 44 1908 84 74 01

London14th and 15th Floor10 Upper Bank StreetCanary WharfLondon E 14 5NPTel. : 44 20 7715 3300Fax : 44 20 7715 3301

SwindonPart First FloorWakefield HouseAspect Park, Pipers WaySwindon SN 31RETel. : 44 179 352 8766Fax : 44 179 352 3714

India

BangaloreElectronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 0261Fax : 91 80 2852 0362

Infosys – Center PointOffshore Development CenterPlot No. 26AElectronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 0261Fax : 91 80 2852 0362

Reddy BuildingK 310, 1st Main5th Block, KoramangalaBangalore 560 095Tel. : 91 80 2553 2591Fax : 91 80 2553 0391

Salarpuria Infozone3rd and 4th FloorWing A, No. 39 (P), No. 41 (P) and No. 42 (P) Electronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 0261Fax : 91 80 2852 0362

BhubaneswarPlot No. E / 4, Info CityBhubaneswar 751 024Tel. : 91 674 232 0032Fax : 91 674 232 0100

ChandigarhBlock A and B, Ground FloorDLF Building, Plot No. 2Rajiv Gandhi Technology ParkKishangarhChandigarh 160 101Tel. : 91 172 502 1100Fax : 91 172 504 6222

Plot No. 1 Rajiv Gandhi Technology ParkKishangarhChandigarh 160 101Tel. : 91 172 503 8000Fax : 91 172 504 6860

Chennai138 Old Mahabalipuram RoadSholinganallurChennai 600 119Tel. : 91 44 2450 9530Fax : 91 44 2450 0390

Mahindra Industrial ParkTP 1 / 1, Central AvenueTechno Park SEZMahindra World CityNatham Sub Post, ChengelpetKancheepuram DistrictChennai 603 002Tel. : 91 44 4741 1111Fax : 91 44 4741 5151

HyderabadSurvey No. 210Manikonda VillageLingampallyRangareddy (Dist.) Hyderabad 500 032Tel. : 91 40 6642 0000Fax : 91 40 2300 5223

MangaloreKuloor Ferry Road, KottaraMangalore 575 006Tel. : 91 824 245 1485Fax : 91 824 245 1504

IT and ITeS SEZKamblapadavuKurnad Post, Pajeeru VillageBantwal Taluk 574 153Dakshina Kannada (Dist.) Tel. : 91 824 228 4492Fax : 91 824 228 4491

Mumbai85, ‘C’, Mittal Towers8th Floor, Nariman PointMumbai 400 021Tel. : 91 22 2284 6490Fax : 91 22 2284 6489

MysoreNo. 350, Hebbal Electronics CityMysore 570 018Tel. : 91 821 240 4101Fax : 91 821 240 4200

New DelhiK30, Green Park MainBehind Green Park MarketNew Delhi 110 016Tel. : 91 11 2651 4829Fax : 91 11 2685 3366

PunePlot No. 1, Rajiv Gandhi Infotech Park,Hinjawadi, Taluka Mulshi, Pune 411 057Tel. : 91 20 2293 2800Fax : 91 20 2293 2832


Thiruvananthapuram3rd Floor, Bhavani TechnoparkThiruvananthapuram 695 581Tel. : 91 471 398 2222Fax : 91 471 270 0889

Plot No. 1, Technopark Campus II, Attipara VillageThiruvananthapuram 695 581 Tel. : 91 471 398 2222Fax : 91 471 270 0889

North America

CanadaCalgarySuite 1000, 888-3rd Street SWBankers Hall,West TowerCalgary, AB T2P 5C5Tel. : 1 403 444 6896Fax : 1 403 444 6699

Toronto5140 Yonge StreetSuite 1400 TorontoOntario, M2N 6L7Tel. : 1 416 224 7400Fax : 1 416 224 7449

United StatesAtlanta400 Galleria ParkwaySuite 1490, AtlantaGA 30339Tel. : 1 770 799 1860Fax : 1 770 799 1861

Bellevue3326 160th Avenue SESuite 300, BellevueWA 98008Tel. : 1 425 256 6200Fax : 1 425 256 6201

Bentonville2700 SE ‘S’ Street, Suite 200Bentonville, AR 72712Tel. : 1 479 271 4600Fax : 1 479 271 4601

Bridgewater400 Crossing BoulevardSuite 101, BridgewaterNJ 08807Tel. : 1 908 450 8200Fax : 1 908 450 8201


Global presence | 93

North America (contd.) Charlotte13777 Ballantyne Corporate PLSuite 250, Charlotte, NC 28277Tel. : 1 704 972 0320Fax : 1 704 972 0311

Fremont6607 Kaiser DriveFremont, CA 94555Tel. : 1 510 742 3000Fax : 1 510 742 3090

Hartford95 Glastonbury BlvdGlastonbury, CT 06033Tel. : 1 860 494 4139Fax : 1 860 494 4140

Houston14800 St. Mary’s LaneSuite 160, HoustonTX 77079Tel. : 1 281 493 8698Fax : 1 281 493 8601

Lake ForestOne Spectrum PointeSuite 350, Lake Forest CA 92630Tel. : 1 949 206 8400Fax : 1 949 206 8499

Lisle2300 Cabot DriveSuite 250, Lisle IL 60532Tel. : 1 630 482 5000Fax : 1 630 505 9144

Minneapolis80 South, 8th StreetSuite 900Minneapolis, MN 55402Tel. : 1 612 349 5258Fax : 1 510 248 2022

New York630 Fifth AvenueSuite 1600, Rockefeller CenterNew York, NY 10111Tel. : 1 646 254 3100Fax : 1 646 254 3101

Phoenix10835 N 25th AvenueSuite 200, Phoenix AZ 85029Tel. : 1 480 655 3598Fax : 1 480 655 3501

Plano6100, Tennyson ParkwaySuite 200, Plano TX 75024Tel. : 1 469 229 9400Fax : 1 469 229 9598

QuincyTwo Adams PlaceQuincy, MA 02169Tel. : 1 781 356 3100Fax : 1 781 356 3150

Reston12021 Sunset Hills RoadSuite 340, Reston VA 20190Tel. : 1 703 234 3798Fax : 1 703 234 3701

Southfield3000 Town CenterSuite 2850 Southfield, MI 48075Tel. : 1 248 603 4300Fax : 1 248 208 3315

Subsidiaries of Infosys Technologies Limited

Infosys Technologies (Australia) Pty. LimitedBrisbaneLevel 12, 259 Queen StreetBrisbane QLD 4000Tel. : 61 7 3231 9800Fax : 61 7 3231 9899

MelbourneLevel 5, 818 Bourke StreetDocklands VIC 3008P. O. Box 528Collins Street WestMelbourne VIC 8007Tel. : 61 3 9860 2000Fax : 61 3 9860 2999

Melbourne (Lonsdale Street) Level 21 150 Lonsdale StreetMelbourne VIC 3000P. O. Box 528Collins Street WestMelbourne VIC 8007Tel. : 61 3 9860 2000Fax : 61 3 9860 2997

PerthLevel 18, Central Park Building152-158 St. Georges Terrace, Perth WA 6000Tel. : 61 8 9288 1750Fax : 61 8 9288 1753

SydneyLevel 3, 77 Pacific HighwayNorth Sydney NSW 20060P. O. Box 1885Tel. : 61 2 8912 1500Fax : 61 2 8912 1555

New ZealandLevel 27, PWC Tower188 Quay StreetAuckland New Zealand 1010Tel. : 64 9 363 2700Fax : 64 9 363 2727

Infosys Tecnologia do Brasil LtdaBrazilRua Da Paisagem, 220Edificio Lumiere, Andar : 5 E 6Vila Da Serra, Nova LimaMinas Gerais - CEP 34.000-000-BrazilTel. : 55 31 33068900Fax : 55 31 33068901

Infosys Technologies (China) Company LimitedBeijingNo. 7 Guang Hua RoadFloor 28thB1- 1 HanWei Building. ChaoYang DistrictBeijing, ChinaTel. : 010 57335000

DalianNo. 1001-1006, No. 1 Hui Xian GardenDalian Hi-Tech Industry ParkDalian, ChinaTel : 86 21 58843000Fax : 86 21 58843001

HangzhouBldg A2, No. 301 Binxing Road Binjiang District Hangzhou 310052Tel. : 86 571 87930030Fax : 86 571 87930001

ShanghaiBldg A, No. 6, 3158 Long Dong Road,Zhangjiang Hi-Tech Park,Shanghai 201203Tel : 86 21 58843000Fax : 86 21 58843006

Bldg 18, 1387 Zhang Dong Road, Zhangjiang Hi-Tech Park,Shanghai 201203Tel : 86 21 58843000Fax : 86 21 58843001

Infosys Technologies (Shanghai) Company LimitedRoom 401, 501, Building Wu,No. 555 Dong Chuan Road,Min Hang District, Shanghai, ChinaTel : 86 21 58843000Fax : 86 21 58843001

Infosys Technologies S. de R L. de C. V.MexicoAve. Acueducto No. 26104piso Col. Del Paseo ResidencialMonterrey, N. L. C. P. 64920Tel. : 521 81 1253 8400Fax : 521 81 1253 8401

Corporativo Santa MariaBoulevard Diaz Ordaz Numero 130Monterrey, Mexico CP 64650Tel. : 521 81 8850 9300Fax : 521 81 8850 9301

Infosys Consulting, Inc.North America6100, Tennyson ParkwaySuite 200, Plano, TX 75024Tel. : 1 469 229 9400Fax : 1 469 229 9598

United Kingdom14th and 15th Floor10 Upper Bank StreetCanary WharfLondon E 14 5NPTel. : 44 20 7715 3300Fax : 44 20 7715 3301

Subsidiary of Infosys Consulting, Inc.

Infosys Consulting India LimitedPlot No. 26-A, Ground FloorElectronic City, Hosur Road, Bangalore 560 100Tel : 91 80 6688 1144 Fax : 91 80 6688 2140

Infosys Technologies (Sweden) AB Stureplan 4C, 4tr114 35, StockholmTel. : 46 8 463 1112Fax : 46 8 463 1114

Infosys BPO LimitedAustralia - MelbourneLevel 5, 818, Bourke StreetDocklands VIC 3008P. O. Box 528Collins Street WestMelbourne VIC 8007Tel. : 61 3 9860 2000Fax : 61 3 9860 2999

Canada - Toronto5140, Yonge StreetSuite 1400Toronto ON M2N 6L7Tel. : 416 224 7400Fax : 416 224 7449

India - BangaloreElectronics City, Hosur RoadBangalore 560 100Tel. : 91 80 2852 2405Fax : 91 80 2852 2411

Pavithra Complex, No. 127th Main, 2nd Cross1st Stage, BTM LayoutBangalore 560 068Tel. : 91 80 3021 3600Fax : 91 80 4171 4808

Salarpuria InfozoneWing A, No. 39 (P) 41 (P) and 42 (P) Electronic City, Hosur RoadBangalore 560100Tel. : 91 80 4067 0035Fax : 91 80 4067 0034

27, SJR TowersBannerghatta RoadJ. P. Nagar, III PhaseBangalore 560 078Tel. : 91 80 5103 2000Fax : 91 80 2658 8676

India - ChennaiTemple Steps 6th and 7th FloorNo. 184, Annasalai SaidapetChennai 600 015Tel. : 91 44 6600 7000Fax : 91 44 6600 7005

India - Gurgaon7th floor Tower A, B and CBuilding No. 6DLF Cyber City Developer LimitedSpecial Economic ZoneSector 24 and 25 DLF PH-3GurgaonTel. : 91 124 4583 700Fax : 91 124 4583 701

India - JaipurPlot No. E-142-143Sitapura Industrial AreaJaipur 302022Tel. : 91 141 2771 325Fax : 91 141 2771 325

IT-A-001Mahindra World CitySpecial Economic ZoneVillage KalwaraTahsil SanganerJaipur 302029Tel. : 91 141 3956 000Fax : 91 141 3956 100

India - PunePlot No. 1, Building No. 4Pune Infotech ParkHinjawadi, Taluka MulshiPune 411 057Tel. : 91 20 2293 2900Fax : 91 20 2293 4540


Philippines2nd and 3rd FloorTrade Hall MetroMarket, Bonifacio Global CityFort Bonifacio Taguig CityMetro Manila, PhilippinesTel. : 632 856 3319Fax : 632 856 3320

United Kingdom14th Floor10 Upper Bank StreetCanary WharfLondon E14 5NPTel. : 44 20 7715 3388Fax : 44 20 7715 3301

United States - Bridgewater400 Crossing Boulevard1st Floor, BridgewaterNJ 08807Tel. : 1 908 450 8209Fax : 1 908 842 0284

Subsidiaries of Infosys BPO

Infosys BPO s.r.oCzech Republic Holandka 9,63900, BrnoTel. : 420 542 212406Fax : 420 543 236349

Infosys BPO Poland Sp.Z o.o.Al. Piłsudskiego 22 90-051Lodz, PolandTel. : 48 42 291 8000Fax : 48 42 291 8081

UL. Gdanska 4790-729 Lodz, PolandTel. : 48 42 291 8205Fax : 48 42 291 80 73

McCamish Systems LLC6425 Powers Ferry Road3rd FloorAtlanta, GA 30339Tel. : 1 800 366 0819Fax : 1 770 690 1800

Global presence

Creative concept and design by Communication Design Group, Infosys.© 2011 Infosys Technologies Limited, Bangalore, India. Infosys acknowledges the proprietary rights in the trademarks and product names of other companies mentioned in the Annual Report.

142 | Notes


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30 years of InfosysAnnual Report 2010-11 – Additional Information

· 30 years of infosys infosys annual report 2010-11 “posterity will not excuse you if you did...

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