© infosys technologies limited 2001-2002 financial performance – year ended march 31, 2002

© Infosys Technologies Limited 2001-2002

Financial Performance –Year ended March 31, 2002

Financial Performance –Year ended March 31, 2002

June 08, 2002 © Infosys Technologies Limited 2001-2002

This presentation may contain certain forward looking statements. The company may not achieve results as expressed or implied by such forward looking statements. Actual results could differ materially from those expressed or implied in such forward looking statements due to a number of factors including those discussed under the head "Risk factors" in the company's filings with the United States Securities and Exchange Commission. Do not place undue reliance on these forward looking statements. This presentation contains references to findings of various reports available in the public domain. The company makes no representation as to their accuracy or that the company subscribes to those findings. They are provided only by way of information.


HighlightsHighlights

» Achieved revenue growth of 32.0% ( in $ terms) as against our guidance of 30% in April 2001 despite a very challenging environment

» Banking unit revenues grew by over 100% and crossed the Rs.100 crore threshold

» 116 clients added during the year, of which, 62 were added in the post September 11 period

» Total dividend of Rs. 20 per share (400% on par value of Rs. 5) taking the payout to 17.0% as compared to 12.0% in the previous year


HighlightsHighlights

» Board approves investment of up to US$ 5 million for foray into Business Process Management (BPM)» Separate company – Progeon Limited formed for the

BPM operations» Citigroup to invest US$ 20 million in Progeon Limited


1,029.73

1,378.77

The year at a glanceThe year at a glance

1,900.56

2,603.59

2001 2002

Income (Rs.cr)

37%

1,874.02

2,552.47

2001 2002

Export Income(Rs.cr)

36%

2001 2002

Gross Profit(Rs.cr)

34%


The year at a glanceThe year at a glance

764.84

1,037.63

2001 2002

Operating Profit(Rs.cr)

36%

696.03

943.39

2001 2002

PBT(Rs.cr)

36%

623.32

807.96

2001 2002

PAT*(Rs.cr)

30%

* From ordinary activities


Drivers of growthDrivers of growth

FY98 FY99 FY00 FY01 FY02

Revenue growth (%) 72.6 77.0 68.2 103.4 31.7

Of which

Volume growth (%) 57.0 50.3 49.6 62.0 34.2

Price growth (%) 15.7 26.7 18.6 41.4 (2.5)

In $ terms


We experienced intense pricing pressure during the year…We experienced intense pricing pressure during the year…

FY98 FY99 FY00 FY01FY02

Per-capita revenue ($ p.m)Onsite 6,600 7,900 8,500 11,00011,400Offshore 3,200 3,700 4,400 5,3004,900Blended 4,000 4,800 5,700 7,3006,900

Change in per-capita revenue (%)Onsite 19.7 7.6 29.43.6Offshore 15.6 18.9 20.5(7.5)Blended 20.0 18.8 28.1(5.5)


… which was negated by higher volume growth.… which was negated by higher volume growth.

FY98 FY99 FY00 FY01 FY02

Increase in billed person months

Onsite 1,638 2,450 5,244 7,842 4,748

Offshore 4,192 5,707 5,006 13,618 16,796

Total 5,830 8,157 10,250 21,460 21,544

Change in billed person months (%)

Onsite 72.8 63.0 82.7 67.7 24.4

Offshore 45.8 42.8 26.3 56.6 44.6

Total 51.1 47.3 40.4 60.2 37.7


We improved our utilization…We improved our utilization…

FY 01 Q1 02 Q2 02 Q3 02 Q4 02FY02

Utilization rates

Including trainees (%) 67.4 69.5 68.8 69.6 72.470.1

Excluding trainees (%) 78.3 73.2 72.7 72.7 72.972.9


…and took various cost control measures.…and took various cost control measures.

Variable compensation» Salary hike during the year linked to attainment of company

performance targets

Recruitment» Just in time recruitment» Recruitment based on business outlook

Non-revenue generating expenses» Reduced non-sales support personnel recruitment during the

year» Offshoring of onsite functions in non-revenue generating

activities


…and took various cost control measures.…and took various cost control measures.

» Others » Continuous rationalization of internal policies

» Re-negotiations with vendors

» Reduction in discretionary spending

» Vacating leased premises, etc.

» Cost cuts during the year aggregated 2.4% of revenues (3.5% excluding increase in personnel cost in the US)


The US personnel costs had increased… The US personnel costs had increased…

Unanticipated increase in personnel costs in the US due to significantly higher floor pay imposed upon H1B visa holders

» Additional cost of US$ 6.2 million (1.1% of revenue)


…but still maintained our margins.…but still maintained our margins.

54.2% 53.0%

2001 2002

Gross Profit (%)

2001 2002

Operating Profit (%)

2001 2002

PAT* (%)

40.2% 39.9%

32.8% 31.0%

* From ordinary activities


Our revenues are well-segmentedOur revenues are well-segmented


Geographic segmentsGeographic segments

71.2%

2.0%7.3%

19.5%

73.5%

6.3%1.4%

18.8%

2000-2001 2001-2002


Business segmentsBusiness segments

40.0%

25.4%

9.3%

2.5%6.1%1.7%

7.2%

4.9%

2.9%32.0%

29.0%

9.8%

5.4%4.0%

2.9%

4.2%

2.6%

10.1%

2000-2001 2001-2002


Vertical domainsVertical domains2000-2001 2001-2002

17.1%

16.3%

20.4%

12.3%

2.7%

13.6%

2.0%

15.6%

17.8%

14.2%

19.5%

9.1%

2.2%

17.4%

1.4%

18.4%


Technology segmentsTechnology segments

2000-2001 2001-2002

44.6%

13.6%

5.1%

8.3%

28.4%

48.3%

14.4%

2.6%

11.7%

23.0%


Project segmentationProject segmentation

28.2%

71.8%

31.6%

68.4%

2000-2001 2001-2002


Onsite - offshore segmentationOnsite - offshore segmentation

51.5%

48.5%

50.8%

49.2%

2000-2001 2001-2002


We continue to de-risk our businessWe continue to de-risk our business


Client concentrationClient concentrationFY 2002 FY 2001 FY 2000

Active clients 293 273 194

Clients added 116 122 99

% of revenue from top client 6.1% 7.3% 7.2%

% of revenue from top 5 clients 24.1% 26.0% 30.2%

% of revenue from top 10 clients 39.4% 39.2% 45.7%

Clients accounting for >5% of revenue 2 3 4

Million dollar clients 83 80 42

5-million dollar clients 25 19 10

10-million dollar clients 16 11 4

20-million dollar clients 6 3 -

Million dollar clients/ total clients 28.3% 29.3% 21.6%


Exposure to telecomExposure to telecom

Category % of telecom revenue % of total revenue

FY 02 FY 01 FY 02 FY 01

Service providers 31.4 20.8 4.9 3.8

Product companies 2.9 7.5 0.4 1.4

Equipment manufacturers 65.1 68.0 10.2 12.6

Others 0.6 3.7 0.1 0.6

Total 100.0 100.0 15.6 18.4


We have a strong and liquid balance sheetWe have a strong and liquid balance sheet(Rs. crore)

Mar 31, 2002 % Mar 31, 2001%

SOURCES OF FUNDS

Share capital 33.09 2 33.082

Reserves and surplus 2,047.22 98 1,356.5698

Total 2,080.31 100 1,389.64100

APPLICATION OF FUNDSFixed assets 718.24 35 557.66

40Investments 44.44 2 34.12

2Deferred tax assets 24.22 1 -

-Sundry debtors 336.73 16 302.37

22Cash and equivalents 1,026.96 49 577.74

42Other current assets 389.13 19 237.60

17Current liabilities & provisions (459.41) (22) (319.85)

(23)Total 2,080.31 100 1,389.64

100

Continued to be a zero-debt company


2.5%

69.2%

26.6%

1.7%

0.5%

69.0%

30.0%

0.5%

Our receivables are under controlOur receivables are under control2001-2002 2000-2001

Days of sales receivable - 47 days Days of sales receivable – 58 days

Age profile of accounts receivable


We continue to invest for the futureWe continue to invest for the future

» Hired 1,548 people with a net addition of 907 for the year

» Sales force strengthened with an addition of 39 people during the year

» New sales offices opened in Netherlands, Singapore and Switzerland

» Capex of Rs. 322.74 crore during the year of which

Rs. 67.40 crore was spent on technological infrastructure


Our cash flows are strong…Our cash flows are strong…(Rs. crore)

FY 2002 FY 2001

Operating cash flows 820.96 540.32 Financing cash flows (104.77) (39.82)

Proceeds on exercise of stock options 4.60 2.38Dividends paid (109.37) (42.20)

Investing cash flows (280.23) (451.30)Purchases of fixed assets (322.74) (463.35)Proceeds on sale of fixed assets 1.60 0.23Long-term investments (10.32) (26.65)Interest income 51.23 38.47

Effect of exchange differences 13.26 20.17 Net increase in cash and cash equivalents 449.22 69.37 Cash and cash equivalents, beginning of year 577.74 508.37 Cash and cash equivalents, end of year 1,026.96 577.74


…despite heavy investment in capex.…despite heavy investment in capex.

2001 2002

Capital Investment(Rs.cr)

112.89

160.65

Depreciation (Rs.cr)

2001 2002

Depreciation / Revenues (%)

20022001

6.25.942%

463.35

322.74


Cash ManagementCash Management


Our cash management policiesOur cash management policies

» Financial policies» Maintain liquid assets at

» 25% of revenue and » 40% of total assets

» Earn» Return on capital - 2x cost of capital» Return on average invested capital – 3x cost of capital» Our current cost of capital is estimated to be 17.17%

» Maintain sufficient cash in the balance sheet » To fund ongoing capex requirements to meet growth objectives» To fund operational expenses and other strategic initiatives for

the next one year» To maintain business continuance in case of exigencies


Cash management – How we performedCash management – How we performed

Target FY 2002 FY 2001 FY 2000

ROCE (%) 54.4% 62.6% 46.3%

Times cost of capital 2.0 3.2 2.9 2.0

ROIC (%) 83.1% 105.4% 111.6%

Times cost of capital 3.0 4.8 5.0 5.0

Operating cash flows / revenues 30.0% 31.5% 28.4% 28.3%

Days sales outstanding 60 47 58 56

Cash & equivalents / total assets 40.0% 49.4% 41.6% 61.0%

Cash & equivalents / revenue 25.0% 39.4% 30.4% 57.6%


Other Performance IndicatorsOther Performance Indicators


Other performance indicatorsOther performance indicators

56.1%46.6%

40.6%

2001 20022000

Return on Average Net Worth (RONW) (%)

62.6%54.4%

46.3%

2001 20022000

Return on Capital Employed (ROCE) (%)

105.4%

83.1%

111.6%

2001 20022000

Return on Invested Capital (ROIC) (%)



1.71 1.501.25

2001 20022000

Capital Output Ratio

3.342.79

3.66

2001 20022000

Invested Capital Output Ratio

2001 20022000

Value Added /Total Revenue (%)

79.8% 83.9%78.5%



2001 20022000

EPS from Ordinary Activities (Rs.)

111.29

146.4

51.28

2001 20022000

Cash EPS* (Rs.)

2001 20022000

Dividend Payout (%)

94.23

122.12

43.23

12.0%17.0%11.6%



210.05

314.31

125.97

2001 20022000

Book Value (Rs.)

43.19 30.50

207.48

2001 20022000

Price Earnings (x)

68,54762,737

151,076

2001 20022000

Market Price /Adjusted IPO Price (%)


Strength of the invisiblesStrength of the invisibles

FY 2002 FY 2001 FY 2000

Brand value (Rs.cr) 7,256 5,376 5,246

EVA (Rs.cr) 510 389 129

Value added (Rs.cr) 2,239 1,563 723

HR value (Rs.cr) 9,539 5,123 2,237

Education index 31,385 28,725 15,544

Average age of employees 26.60 25.67 26.14

Revenue from image enhancing

clients (%) 56% 52% 47%


Financial HighlightsFinancial Highlights

US GAAP


413.85

545.05

2001 2002

Revenues(US$ million)

200.24

255.02

137.51

178.55

Gross Profit(US$ million)

2001 2002

Operating Income(US$ million)

20022001

32%

27%

30%


142.59

183.55

2001 2002

Operating Income (excl. stock comp)

131.95

164.47

137.03

169.47

Net Income

2001 2002

Net Income (excl. stock comp)

20022001

(US$ million)

29%

25% 24

%


Investor servicesInvestor services

» Share transfers in physical form completed within 15 days » Investor grievances / correspondence attended to within a

period of 10 days (Except in cases constrained by disputes or legal impediments)

» 99.05% of the company’s shares are now held in electronic form

» Pending share transfer related litigation - 18 cases


Community servicesCommunity services

» Grants of Rs.3.75 crore during the year to Infosys Foundation, a not-for-profit trust to support initiatives that benefit society at large

» Continued the social programs initiated in 1999 – Catch Them Young, Rural Reach and Train The Trainer

» Infosys has donated 1,185 computers to 435 institutions across India through its Computers @ Classrooms initiative launched in January 1999


Awards won during the yearAwards won during the year

» The Institute of Chartered Accountants of India award for best presented annual report in 2001 for the seventh successive year

» The Institute of Company Secretaries of India National Award for excellence in corporate governance

» Asiamoney award for best investor relations in India for 2001

» Corporate Citizenship Award by The Economics Times of India

» Ranked No.1 in the CG Watch 2002, the CLSA study on corporate governance practices in emerging markets


Thank YouThank You

w w w . i n f o s y s . c o m

© infosys technologies limited 2001-2002 financial performance – year ended march 31, 2002

Documents

forward looking statements

price growth

progeon limitedthe year

financial performance

higher volume growth

various cost control

income rs

certain forward