Being Resilient. That’s Live Enterprise. Infosys BPM Limited Annual Report 2019–20 This page is left blank intentionally Board and Committees – Infosys BPM Limited The Board of Directors Board committees Corporate social responsibility committee Ravikumar Singisetti Audit committee Chairman Ravikumar Singisetti Gopal Devanahalli Chairperson Anantharaman Radhakrishnan Chairperson and Financial Expert Managing Director and Chief Executive Officer Anantharaman Radhakrishnan Michael Nelson Gibbs Member Gopal Devanahalli Member Independent Director Gopal Devanahalli Ravikumar Singisetti Member Michael Nelson Gibbs Member Independent Director Investment committee Inderpreet Sawhney Nomination and remuneration committee Ravikumar Singisetti Director Gopal Devanahalli Chairperson Chairperson Anantharaman Radhakrishnan Michael Nelson Gibbs Member Member Prem Joseph Pereira Ravikumar Singisetti Member Member As on April 1, 2020 Infosys BPM Limited Annual Report 2019-20 This page is left blank intentionally Contents Board’s report . 1 Annexures to the Board’s report . 13 Corporate governance report . 30 Management’s discussion and analysis . 39 Risk management report . 54 Report on health, safety and environment . 56 CEO and CFO certification . .. 58 Standalone financial statements . 59 Consolidated financial statements . .. 104 Ratio analysis . .. 153 Global presence . .. 154 Notice to the 18th Annual General Meeting . 157 Infosys BPM Limited Annual Report 2019-20 This page is left blank intentionally Board’s report Dear members, The Board of Directors hereby submits the report of the business and operations of Infosys BPM Limited (“the Company”), along with the audited financial statements, for the financial year ended March 31, 2020. 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 For the year ended March 31, March 31, 2020 2019 2020 2019 Revenue from operations 4,595 3,932 6,922 6,022 Cost of sales 3,439 2,856 5,348 4,558 Gross profit 1,156 1,076 1,574 1,464 Selling and marketing expenses 219 200 235 212 General and administration expenses 337 318 519 494 Operating profit 556 558 820 758 Other income, net 290 225 279 211 Financial cost (32) – (41) – Profit before tax 858 783 1,058 969 Tax expenses 210 187 252 252 Profit for the year 648 596 806 717 Other comprehensive income Items that will not be reclassified subsequently to profit or loss (3) (4) (6) (13) Items that will be reclassified subsequently to profit or loss 6 1 46 (23) Total other comprehensive income, net of tax 3 (3) 40 (36) Total comprehensive income for the year 651 593 846 681 Earnings per share (EPS) (1) Basic 191.61 176.30 238.23 211.88 Diluted 191.61 176.30 238.23 211.88 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. Infosys BPM Limited Annual Report 2019-20 Board’s report I 1 Financial position in ` crore, except equity share and per equity share data Particulars Standalone Consolidated 2020 2019 2020 2019 Cash and cash equivalents 2,274 1,837 3,137 2,627 Current investments 630 535 630 535 Net current assets 3,260 2,673 4,081 3,484 Property, plant and equipment (including capital work-in- progress) 214 239 281 271 Right to use assets 427 – 836 – Goodwill 19 19 406 394 Other intangible assets – – 5 13 Other non-current assets 108 77 141 145 Total assets 6,168 4,848 8,677 6,677 Non-current liabilities 419 11 843 57 Retained earnings – opening balance 4,000 3,407 4,768 4080 Add : Profit for the year 648 596 806 717 Exchange differences on translation foreign operations and re-measurement differences 3 (3) 40 (36) Reserves created on account of common control business acquisition – – – 7 Transfer from Special Economic Zone Re-investment Reserve on utilization 71 66 71 66 Less : Impact on account of adoption of Ind AS 116 (19) – (8) – Transfer to Special Economic Zone Re-investment Reserve(1) (71) (66) (71) (66) Retained earnings – closing balance 4,632 4,000 5,479 4,768 Other equity 34 34 34 34 Total equity 4,666 4,034 5,513 4,802 Total equity and liabilities 6,168 4,848 8,677 6,632 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 2 I Board’s report Infosys BPM Limited Annual Report 2019-20 Company’s overview and by enhancing experience for their stakeholders through Infosys BPM Limited, (IBPM), formerly Infosys BPO Limited, our approach of digital automation to amplify business the business process management subsidiary of Infosys productivity and efficiency, insights to improve business Limited, provides end-to-end transformative services to outcomes and effectiveness and innovation to enhance its clients globally. The company’s integrated IT and BPM stakeholder delight and experience. The Company has also solutions approach drives optimized outcomes and enables it been consistently ranked among the top employers of choice, to unlock business value across industries and service lines, on the basis of its industry leading HR practices. address business challenges for its clients helping them Performance overview (Standalone) navigate their next. The primary focus for IBPM is to enable Our revenues from operations aggregated to ` 4,595 crore, its clients to achieve their cost reduction objectives, improve up by 16.9% from ` 3,932 crore in the previous year. Our process efficiencies, enhance effectiveness, and deliver gross profits amounted to ` 1,156 crore as against ` 1,076 superior customer experience crore in the previous year. The operating profits amounted Infosys BPM Limited is a leader in providing innovative to ` 600 crore as against ` 558 crore in the previous year. solutions to its clients in today’s ever-changing technology Sales and marketing costs were ` 219 crore and ` 200 crore landscape through traditional, digital service offerings, for the years ended March 31, 2020 and March 31, 2019 vertical utility platforms and shared service center models. respectively. General and administration expenses were ` 337 Whether it is about utilizing innovative business excellence crore and ` 318 crore during the current year and previous frameworks, ongoing productivity improvements, process year respectively. Net profits after tax stood at ` 648 crore as reengineering, automation, and cutting-edge technology against ` 596 crore in the previous year. The profit after tax platforms, we are able to consistently add value to our clients. for the year was 14.1% of revenue. Our traditional BPM service offerings, are complemented by our Digital Business offerings – Digital Transformation Performance overview (Consolidated) Services and Digital Interactive Services. While the Group’s Our revenues from operations aggregated to ` 6,922 crore, joint venture with Hitachi, Panasonic and Pasona in Japan up by 14.9% from ` 6,022 crore in the previous year. Our enhances our traditional enterprise services in sourcing and gross profits amounted to ` 1,574 crore as against ` 1,464 procurement; our platform-based digital capabilities were crore in the previous year. The operating profits amounted to further enriched in insurance with the launch of McCamish ` 820 crore as against ` 758 crore in the previous year. Sales NGIN, our modernized insurance platform for global life and marketing costs were ` 235 crore and ` 212 crore for the insurance and annuity; and in mortgage platform servicing years ended March 31, 2020 and March 31, 2019 respectively. capabilities through the Group’s acquisition of ABN Amro General and administration expenses were ` 519 crore and Bank’s wholly-owned subsidiary – Stater NV. ` 494 crore during the current and previous year, respectively. Infosys BPM Limited continues to be ranked leaders across Net profits after tax were ` 806 crore as against ` 717 crore industry utilities such as Insurance, Mortgage, Banking, in the previous year. The Group’s profit after tax for the year Healthcare, Capital Markets, Financial Services, Energy, is 11.6% of revenue. Manufacturing, Telecom and Retail; across enterprise offerings The Company continues to be amongst the most profitable such as Finance & Accounting, Sourcing and Procurement BPM companies in India. The Company has 212 customers as and Human Resources Outsourcing as well as Digital on March 31, 2020. The Company ended FY20 with 42,157 offerings such as Digital Interactive Services, Analytics, RPA employees across 122 nationalities. and Artificial Intelligence (AI) by leading analysts such as The financial year 2020 was a very productive and significant Nelsonhall, Gartner, Everest, HfS, ISG and IDC. one for Infosys BPM Limited since we won multiple new Your Company seeks to differentiate in the market by logos which include a UK-based multinational professional navigating clients to experience their next by delivering services firm, a Europe-based and a US-based mortgage business value through deep domain expertise and technology services provider and a Europe-based logistics and supply prowess. We invest in offerings that help clients optimize their chain company among others. The company also entered into Cost of Revenues (CoR) instead of the traditional approach a strategic partnership with Eishtec, one of Ireland’s leading of optimizing just the Selling, General and Administrative customer service providers. This included transfer of Eishtec’s (SG&A) expenses.