Annual Report 2020–21 This Page Is Left Blank Intentionally Contents
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Cloud chaos to clarity Infosys BPM Limited Annual Report 2020–21 This page is left blank intentionally Contents Board’s report . 6 Management’s discussion and analysis . 18 Annexures to the Board’s report . 34 Corporate governance report . 46 Risk management report . 54 CEO and CFO certification . 56 Standalone Financial Statements . 57 Consolidated Financial Statements . 103 Ratio Analysis . 154 Global Presence . .. 155 Notice . 158 Board and Committees – Infosys BPM Limited The Board of Directors Board committees Corporate social responsibility Ravikumar Singisetti committee Audit committee Chairman Ravikumar Singisetti Gopal Devanahalli Chairperson Anantharaman Radhakrishnan Chairperson and Financial Expert Chief Executive Officer and Managing Director Anantharaman Radhakrishnan Michael Nelson Gibbs Member Gopal Devanahalli Member Independent Director Gopal Devanahalli Ravikumar Singisetti Member Michael Nelson Gibbs Member Independent Director Nomination and remuneration Investment committee Inderpreet Sawhney committee Director Ravikumar Singisetti Gopal Devanahalli Chairperson Chairperson Michael Nelson Gibbs Anantharaman Radhakrishnan Member Member Ravikumar Singisetti Member Prem Joseph Pereira Member As on March 31, 2021 Infosys BPM Limited Annual Report 2020-21 Board and Committees | 5 Board’s report Dear members, The Board of Directors hereby submits the report of the business and operations of your Company (“the Company”), along with the audited financial statements, for the financial year ended March 31, 2021. The consolidated performance of the Company and its subsidiaries (“the Group”) has been referred to wherever required. 1 . Results of our operations and state of affairs in ` crore, except per equity share data Particulars Standalone Consolidated For the year ended March 31, For the year ended March 31, 2021 2020 2021 2020 Revenue from operations 5,450 4,595 8,846 6,922 Cost of sales 4,150 3,439 6,987 5,348 Gross profit 1,300 1,156 1,859 1,574 Operating expenses Selling and marketing expenses 212 219 222 235 General and administration expenses 349 337 564 519 Total operating expenses 561 556 1,342 754 Operating profit 739 600 1,073 820 Other income, net 207 290 199 279 Finance cost (30) (32) (41) (41) Profit before tax 916 858 1,231 1,058 Tax expenses 221 210 323 252 Profit for the year 695 648 908 806 Other comprehensive income Items that will not be reclassified subsequently to profit or loss (9) (3) (9) (6) Items that will be reclassified subsequently to profit or loss (1) 6 35 46 Total other comprehensive income, net of tax (10) 3 26 40 Total comprehensive income for the year 685 651 934 846 Earnings per share (EPS) (1) Basic 205.51 191.61 268.30 238.23 Diluted 205.51 191.61 268.30 238.23 Notes: The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS) 1 crore = 10 million (1) Equity shares are at par value of `10 per share. 6 | Board’s report Infosys BPM Limited Annual Report 2020-21 Financial position in ` crore, except equity share and per equity share data Particulars Standalone Consolidated 2021 2020 2021 2020 Cash and cash equivalents 3,000 2,274 4,080 3,137 Current investments 175 630 175 630 Net current assets 3,320 3,260 4,430 4,081 Property, plant and equipment (including capital work-in-progress) 234 214 312 281 Right to use assets 479 427 896 836 Goodwill 19 19 426 406 Other intangible assets – – 16 5 Other non-current assets 78 108 110 141 Total assets 7,039 6,168 10,595 8,677 Non-current liabilities 483 419 1,383 843 Retained earnings – opening balance 4,632 4,000 5,479 4,768 Add: Profit for the year 695 648 908 806 Exchange differences on translation foreign operations and re measurement differences (10) 3 26 40 Transfer from Special Economic Zone Re-investment Reserve on utilization(1) 80 71 80 71 Less: Impact on account of adoption of Ind AS 116 – (19) – (8) Dividends including dividend distribution tax (321) – (321) – Transfer to Special Economic Zone Re-investment Reserve(1) (80) (71) (80) (71) Retained earnings – closing balance 4,996 4,632 6,092 5,479 Other equity 34 34 34 34 Total equity 5,030 4,666 6,126 5,513 Total equity and liabilities 7,039 6,168 10,595 8,677 Number of equity shares 3,38,27,751 3,38,27,751 3,38,27,751 3,38,27,751 (1) The Special Economic Zone (SEZ) Re-investment Reserve has been created out of the profit of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii) of the Income-tax Act, 1961. The reserve should be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of Section 10AA(2) of the Income-tax Act, 1961. Infosys BPM Limited Annual Report 2020-21 Board’s report | 7 Company’s overview next by digitally transforming their business services and by enhancing experience for their stakeholders through Infosys BPM Limited is a leader in providing end-to-end our approach of digital automation to amplify business outsourcing services and innovative solutions to its clients productivity and efficiency, insights to improve business in today’s ever-changing technology landscape through outcomes and effectiveness and innovation to enhance traditional, digital service offerings, vertical utility platforms stakeholder delight and experience. The Company has also and shared service center models. Our integrated IT and been consistently ranked among the top employers of choice, business process management solutions approach enables our on the basis of its industry-leading HR practices. clients across industries and service lines to unlock business value and address their business challenges. Performance overview (standalone) Whether it is about utilizing innovative business excellence Our revenues from operations aggregated to `5,450 crore, frameworks, ongoing productivity improvements, process up by 18.6% from `4,595 crore in the previous year. Our reengineering, automation, and cutting-edge technology gross profits amounted to `1,300 crore as against `1,156 platforms, we are able to consistently add value to our crore in the previous year. The operating profits amounted clients, with our traditional BPM service offerings, being to `739 crore as against `600 crore in the previous year. complemented by our digital business offerings. Sales and marketing costs were `212 crore and ` 219 crore Our platform-based digital capabilities were given a further for the years ended March 31, 2021 and March 31, 2020 fillip with our strategic purchase of a new business and respectively. General and administration expenses were `349 underwriting platform from STEP Solutions Group LLC, crore and `337 crore during the current year and previous which will further enhance our existing industry-leading year respectively. Net profits after tax stood at ` 695 crore as VPAS policy administration platform and our modernized against ` 648 crore in the previous year. The profit after tax insurance platform for global life insurance and annuity for the year was 12.8% of revenue. – McCamish NGIN. Our other existing vertical utilities platform in mortgage include our JV with ABN Amro’s Performance overview (consolidated) Stater while our joint venture with Hitachi, Panasonic and Our revenues from operations aggregated to ` 8,846 crore, Pasona in Japan enhanced our traditional enterprise services up by 27.8% from ` 6,922 crore in the previous year. Our in sourcing and procurement. Our acquisition of Eishtec, gross profits amounted to `1,859 crore as against ` 1,574 one of Ireland’s leading customer service providers, has crore in the previous year. The operating profits amounted to successfully enabled us to further enrich our services in the `1,073 crore as against `820 crore in the previous year. Sales space, enabling us to better serve our clients from the UK and and marketing costs were `222 crore and `235 crore for the Ireland, further leveraging our deep expertise in technology, years ended March 31, 2021 and March 31, 2020 respectively. analytics, and digital. General and administration expenses were `564 crore and Infosys BPM Limited continues to be ranked a leader across `519 crore during the current and previous year, respectively. industry utilities such as Insurance, Mortgage, Banking, Net profits after tax were ` 908 crore as against `806 crore in Healthcare, Capital Markets, Financial Services, Energy, the previous year. The Group’s profit after tax for the year is Manufacturing, Telecom and Retail; across enterprise 10.3% of revenue. The Company continues to be amongst the offerings such as Finance & Accounting, Sourcing and most profitable BPM companies in India. The Company had Procurement and Human Resources Outsourcing as well as 220 customers as on March 31, 2021. The Company ended digital offerings such as Digital Interactive Services, Analytics, fiscal 2021 with 46,130 employees across 115 nationalities. RPA and Artificial Intelligence (AI) by leading analysts such Fiscal 2021 was a challenging one across the BPM industry as Nelsonhall, Gartner, Everest, HfS, ISG and IDC. due to the worldwide impact of COVID-19 pandemic, and The Company seeks to differentiate in the market by navigating the year was marked by a fundamental shift in the business clients to experience their next by delivering business value model of delivering business process management services. through deep domain expertise and technology prowess. For Infosys BPM, glowing testimonials from our clients We invest in offerings that help clients optimize their Cost stand out as a testament to our resilience, partnership and of Revenues (CoR) instead of the traditional approach of work ethics, ensuring seamless and secure client operations optimizing just the Selling, General and Administrative virtually, fulfilling client demands by delivering business as (SG&A) expenses. We leverage the global delivery model usual and beyond.