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Infosys BPO Annual Report 2014-15 Infosys BPO Annual Report 2014-15 Board and committees – Infosys BPO Limited The Board of Directors Nomination & Remuneration Share Allotment Committee U. B. Pravin Rao Committee U. B. Pravin Rao Chairman of the Board Prof. Jayanth R. Varma Chairman Anup Uppadhayay Chairman Anup Uppadhayay Chief Executive Officer and Managing Director U. B. Pravin Rao Member Prof. Jayanth R. Varma Member Rajiv Bansal Independent Director Dr. Omkar Goswami Member Dr. Omkar Goswami Member Investment Committee Independent Director Roopa Kudva Member U. B. Pravin Rao Rajiv Bansal Chairman Director Corporate Social Responsbility Anup Uppadhayay Roopa Kudva Member Independent Director Committee U. B. Pravin Rao Deepak Bhalla Board Committees Chairman Member Anup Uppadhayay Audit Committee Member Prof. Jayanth R. Varma Dr. Omkar Goswami Chairman and Financial Expert Member U. B. Pravin Rao Roopa Kudva Member Member Dr. Omkar Goswami Member Roopa Kudva Member The Board of Directors – Subsidiaries Infosys BPO s.r.o Infosys McCamish Systems, LLC Portland Group Pty.Ltd Anup Uppadhayay Anup Uppadhayay Anup Uppadhayay Chairman of the Supervisory Board Chairman Director Deepak Bhalla Deepak Bhalla Bruce Stevenson Executive Director (Jednatel) Director Managing Director & Chief Executive Officer Anantha Radhakrishnan Gordon Beckham Gavin Solsky Director Chief Executive Officer Director Rajesh K. Murthy Ravi Kumar S. Deepak Bhalla Director Director Director Infosys BPO Poland Sp. Z.o.o Kapil Jain Anantha Radhakrishnan Director Director Anup Uppadhayay Rishi Kumar Jain Director Binny Mathews Director Director Deepak Bhalla Rich Magner Director Director Anantha Radhakrishnan Director Rajesh K. Murthy Director As on March 31, 2015 Board and committees – Infosys BPO Limited This page is intentionally left blank Infosys BPO Limited 2014-15 Contents Board's Report. .1 Annexures to the Board's Report . 7 Management's Discussion and Analysis (Consolidated) . 24 Risk Management Report. .36 Report on Health, Safety and Environment . 39 CEO and CFO certification . 41 Standalone Financial Statements . 42 Consolidated Financial Statements. .65 Ratio Analysis . 86 Corporate Governance Report. .87 Global Presence . 96 Notice of the 13th Annual General Meeting. .97 Infosys BPO Limited 2014-15 Board's Report To the Members, We are pleased to present the report on the business and operations of your Company for the year ended March 31, 2015. 1. Results of our Operations (Standalone) in ` crore, except per share data Particulars March 31, 2015 March 31, 2014 Income from Business Process Management Services 2,510 2,323 Cost of Revenue 1,652 1,441 Gross Profit 858 882 Selling and Marketing Expenses 106 103 General and Administration expenses 205 203 Operating Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) 547 576 Interest, Depreciation & Amortization 50 70 Operating Profit before tax 497 506 Other income, net 191 150 Net Profit before tax and exceptional item 688 656 Provision for taxation 168 144 Net profit after tax and before exceptional item 520 512 Net Profit after tax and after exceptional item 520 512 Earnings Per Share (EPS) Basic 153.64 151.32 Diluted 153.64 151.32 2. Performance Overview We continue to focus on moving our pricing models to outcome based and non-effort based pricing. Several of the deals were Our income from business process management services signed on fixed and outcome based pricing model in FY 2015. aggregated to ` 2,510 crore, up by 8.06% from ` 2,323 crore in the previous year. Four new delivery centers were opened in Fargo, Dublin, North Dakota and Channel Islands (all are virtual offices). With this Our gross profit amounted to ` 858 crore as against ` 882 crore in our total Delivery Center count has increased to 32 locations in the previous year. The profit before interest, depreciation, taxes 14 countries. Our global presence has helped us to add multiple and amortization amounted to ` 547 crore as against ` 576 crore new logos to our repertoire. in the previous year. Sales and marketing costs were ` 106 crore TM and ` 103 crore for the years ended March 31, 2015 and March 31, Last year we had unveiled Process Progression Model (PPM). 2014 respectively. General and administration expenses were PPM brings together multiple transformation levers and ` 205 crore and ` 203 crore during the current year and previous competencies developed by us, to help clients progress their year respectively. The net profit after tax before exceptional item business processes in a phased way and maximize efficiency and was ` 520 crore as against ` 512 crore in the previous year. effectiveness of each process. We have accessed our key clients and the levels have been signed off by the clients. Through the The company's profitability after tax for the year is 20.71%. framework we are continually tracking the progress of the accounts The company continues to be amongst the most profitable BPO for improved business outcomes. companies in India. The company added 11 (net) customers and now has 161 customers as on March 31, 2015. The company Infosys BPO, given its rich technology heritage has been in the ended the year with 31,647 employees having added 2,989 (net) forefront of driving automation at various levels of business employees during the year. processing activities. It has put in place a well-defined RPA Framework with several proven components (including Our focus on accelerating growth enabled us to grow our revenue self-learning capabilities) that are process agnostic and independent and strengthen our market position. Through consistent value of the underlying application / technology. Leveraging the same, delivery and our presence in various external forums has enhanced it has completed around 50+ automation projects in FY 2015 and our relationship with our existing customers. Another year of has seen proven productivity of around 25-35% over the life of successful engagement has enhanced our relationship with one a typical client engagement. This has not only helped amplify diversified technology company with primary divisions focused individual agent and advisor productivity but also has helped in the areas of Healthcare, Consumer Lifestyle and Lighting. increase perfect process performance and enhanced customer Our wins have been strategically significant and add versatility experience. to our portfolio. Some of the key clients won this year include American Multinational Corporation in Hi Tech space, British We are also selling Robotic process automation as a service to our multinational pharmaceutical, biologics, vaccines and consumer clients and have responded to multiple sales pitches leveraging healthcare company, a major Dutch insurance group, American Robotic Process Automation. manufacturer of batteries and personal care products, Fortune We continue to invest in new service lines, consulting capabilities, 500 and S&P 500 manufacturer of specialized industrial products centers of excellence for sustainable growth. and equipment and a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Board's Report | 1 Infosys BPO Annual Report 2014-15 HR's focus in FY 14-15 was on “People Capability Development”. • Renewing existing services offerings by embedding analytics, Newer approaches and innovation was the key to develop and automation technologies, consulting capabilities in our current engage talent. Leveraging technology for wider reach and the 24/7 solutions to create transformation solutions for our clients. approach for learning resulted in initiatives like learning through • Investing in new service lines to stay relevant to clients evolving kiosks, use of tablets, etc. Project Communic-Care, an initiative to needs enhance written and oral communication of entry level employees • Focus on innovative commercial models and providing ensured greater relevance and connect with the ultimate customer transformation and consulting capabilities throughout the while enhancing greater confidence and articulation skills amongst engagement lifecycle. our employees. Innovative programs for developing employee competencies like the Learn and Earn, larger coverage through • Increasing capability of our employees by strengthening domain tie-ups with universities for higher education were some of the training. highlights to cover large sections of our employees. Club FuEL, Disclosure under the Sexual Harassment of Women a club of Future Emerging Leaders were selected High Potential at Workplace (Prevention, Prohibition and Redressal) employees are trained to undertake leadership position in the future. Harvard Manage Mentor in collaboration with Harvard Act, 2013 Business Publishing, brings to employees suite of courses based We have specific processes, policies and procedures for dealing on Harvard Business School's researched ‘Learn, Practice, Apply’ with issues and concerns raised by our employees to ensure framework. Greater focus on geo locations for learning and fair and transparent resolutions. The Hearing Employees and development brought in the ‘value-add’ which the organization is Resolving (HEAR) forum helps employees express their grievances, striving for. A program called Inception, was launched to develop and addresses them in a fair and objective manner. Our Anti-Sexual greater capability amongst our managers with the focus to delve Harassment Initiative (ASHI) allows employees to report sexual deeper into client's minds, develop