Welcome to the
23
rd
Annual
General
Meeting
Annual General Meeting 2003 - 04
Financial Performance
2003 - 04
V. Balakrishnan
Company Secretary and
Senior Vice President - Finance
© Infosys Technologies Limited 2003 - 04
Safe Harbor
Annual General Meeting 2003 - 04
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.
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Highlights *
Annual General Meeting 2003 - 04
 Achieved
billion dollars in revenues during the year
 Continued
to be the largest listed software exporter in India
 Achieved
a revenue growth of 41% (in $ terms) as against
our guidance of 27% in April 2003
 119
clients added during the year
 Net
addition of 9,758 employees during the year
* Consolidated
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Highlights
Annual General Meeting 2003 - 04
 Proposed
3:1 Bonus issue
 Recommended
one - time special dividend of 2,000%
(Rs. 100 per share)
 Recommended
a final dividend of 300% (Rs. 15 per share)
billion dollar bonus to all employees – approximately
US$ 1,000 per employee
 Paid
June 12, 2004
© Infosys Technologies Limited 2003 - 04
The year at a glance
Annual General Meeting 2003 - 04
4,761
4,695
3,623
3,544
2,266
1,809
2003
June 12, 2004
2004
2003
2004
2003
2004
Income
Export Income
Gross Profit
(Rs.cr)
(Rs.cr)
(Rs.cr)
© Infosys Technologies Limited 2003 - 04
The year at a glance
Annual General Meeting 2003 - 04
1,584
1,470
1,272
1,243
1,159
958
2003
June 12, 2004
2004
2003
2004
2003
2004
Operating Profit
PBT
PAT
(Rs.cr)
(Rs.cr)
(Rs.cr)
© Infosys Technologies Limited 2003 - 04
The year at a glance
Annual General Meeting 2003 - 04
50%
48%
35%
33%
2003
June 12, 2004
2004
2003
2004
26%
26%
2003
2004
Gross Profit
Operating Profit
PAT
(%)
(%)
(%)
© Infosys Technologies Limited 2003 - 04
Pricing pressure continued…
Annual General Meeting 2003 - 04
Variation in Per-capita revenues (in US$ terms) *
FY 00
FY 01
FY 02
FY 03
FY 04
8.0%
28.9%
4.4%
(2.5)%
(2.9)%
Offshore
16.9%
22.3%
(7.6)%
(4.7)%
(2.6)%
Blended
19.8%
27.0%
(4.4)%
(0.8)%
(5.1)%
Onsite
* Software services
June 12, 2004
© Infosys Technologies Limited 2003 - 04
The Indian rupee had appreciated …
Annual General Meeting 2003 - 04
US$ – Re rate
2003
2004
%
As at 31st March
47.53
43.40
(8.69)
Average rate for the year
48.35
45.78
(5.32)
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Our response…
Annual General Meeting 2003 - 04
Strong volume growth
Increase in billed person months
Onsite
Offshore
Total
Change in billed person months (%)
Onsite
Offshore
Total
Utilization rates
Including trainees (%)
Excluding trainees (%)
June 12, 2004
FY 00
FY 01
FY 02
FY 03
FY 04
5,244
5,006
10,250
7,842
13,618
21,460
4,748
16,796
21,544
12,596
17,893
30,489
14,184
38,102
52,286
82.7
26.3
40.4
67.7
56.6
60.2
24.4
44.6
37.7
52.1
32.8
38.8
38.6
52.7
47.9
72.9
79.4
67.4
78.3
70.1
72.9
77.6
82.2
73.5
82.1
© Infosys Technologies Limited 2003 - 04
Our response…
Annual General Meeting 2003 - 04
Continued to spend more on sales and marketing infrastructure
FY 2003
FY 2004
30
31
280
275
29
34
Brand Building exp / Revenue (%)
0.80%
0.72%
Sales & Marketing cost (Rs. cr)
266.98
335.08
Sales & Marketing cost / Revenue (%)
7.37%
7.04%
Marketing offices (Nos.)
Employees (Nos.)
Brand Building (Rs. cr)
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Our response…
Annual General Meeting 2003 - 04
Maintained tight control on General & Administration expenditure
FY 2003
FY 2004
Total General & Administration cost / Rev. (%)
7.46%
7.29%
Total No. of Employees
15,356
23,377
1,069
1,337
6.96%
5.72%
G&A Personnel
% to Total Employees
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Our response…
Annual General Meeting 2003 - 04
Actively hedged our net forex receivables
($ mn)
FY 2003
FY 2004
88
143
324
759
Forward foreign exchange contracts
outstanding as at March 31
Forward contracts booked during the year
June 12, 2004
© Infosys Technologies Limited 2003 - 04
...and delivered on our promise *
Annual General Meeting 2003 - 04
As per US GAAP - 2003-04
EPADS
Revenue
350
221
233
238
276
292
0.54
0.6
0.49
0.5
250
0.41
0.44
0.55
0.58
0.5
0.45
0.4
USD
USD (Million)
300
251
259
303
200
150
0.3
0.2
100
0.1
50
0
0
Q1
Q2
Q3
Q1
Q4
Q2
Q3
Q4
Quarter
Quarter
Guidance
Performance
(Guidance Vs Performance)
* Consolidated
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Strategic investments
Annual General Meeting 2003 - 04

Made a provision of Rs. 9.24 crore for strategic investments during the
year

The provision was based on the review of their financial condition as
well as the business environment in which they operate
Rs. Cr
Cumulative investments up to March 31, 2004
153.13
Cumulative billings up to March 31, 2004
208.58
Less: Provisions / write-off of investments
(55.35)
Less: Accounts receivables provided for / written-off
(10.51)
Net benefit
142.72
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Acquisition of Expert Information Services Pty
Limited, Australia
Annual General Meeting 2003 - 04

Acquired 100 % equity in Expert Information services Pty. Limited,
Australia (Expert) . The transaction value was approximately
AU$ 32 Mn

Expert is a leading IT service provider in Australia, specializing in
design, building & integration of business solutions

Expert, founded in 1994, has a client base of medium and large
enterprises spanning across industry sectors

Expert has a strong history of controlled growth and profitability

Subsequent to acquisition, Expert has been renamed as
‘Infosys Technologies (Australia) Pty. Limited’

The company has a total head count of 375 as on March 31, 2004
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Formation of a subsidiary in China
Annual General Meeting 2003 - 04
a wholly-owned subsidiary – Infosys Technologies
(Shanghai) Co. Ltd, in China
 Formed
 Will
invest up to US$ 5 Mn in the subsidiary
 Main
focus is to tap the growing domestic market in China
 To
hire from the local talent pool and leverage their
language skill sets to deliver services for the other markets
in Asia-Pacific region
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Formation of Infosys Consulting, Inc.
Annual General Meeting 2003 - 04

Launched Infosys Consulting, Inc. in Texas, with an investment of up to
US $ 20 Mn

Infosys Consulting, Inc. will be a wholly-owned subsidiary of Infosys

A new generation consulting firm – an unconventional approach

Plan to assemble a dream team of top consultants from large
consulting firms

To offer our clients more competitively priced projects, practical ways
to increase competitiveness and a much higher return on their
consulting dollar

A further step towards best Global Delivery Model
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
Revenue segmentation
© Infosys Technologies Limited 2003 - 04
Geographic segments *
Annual General Meeting 2003 - 04
2002-2003
2003-2004
1.4%
2.1%
8.2%
7.2%
19.2%
17.7%
71.2%
73.0%
* Consolidated
June 12, 2004
N. America
Europe
ROW
India
© Infosys Technologies Limited 2003 - 04
Business segments *
Annual General Meeting 2003 - 04
2002-2003
2003-2004
4.6%
2.8%
8.3%
9.7%
25.7%
32.1%
2.6%
2.2%
3.4%
5.3%
4.3%
3.7%
11.0%
14.5%
6.0%
5.5%
30.1%
28.2%
* Consolidated
June 12, 2004
Development
Maintenance
Re-engineering
Package implementation
Consulting
Testing
Engineering services
Other services
Products
© Infosys Technologies Limited 2003 - 04
Vertical domains *
Annual General Meeting 2003 - 04
2002-2003
9.7%
2003-2004
16.4%
10.3%
6.8%
7.1%
14.3%
2.9%
11.4%
14.8%
12.9%
3.0%
11.6%
23.7%
23.3%
15.2%
16.6%
Manufacturing
Insurance
Banking & Financial Services
Telecom
Retail
Energy & Utilities
Transportation & Logistics
Others
* Consolidated
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Project segmentation *
Annual General Meeting 2003 - 04
2002-2003
2003-2004
34.1%
36.7%
63.3%
65.9%
Fixed Price
* Consolidated services
June 12, 2004
Time and Material
© Infosys Technologies Limited 2003 - 04
Onsite - offshore segmentation
Annual General Meeting 2003 - 04
Revenue
2002-2003
2003-2004
54.7%
53.0%
45.3%
47.0%
Effort
2002-2003
2003-2004
31.6%
33.7%
66.3%
68.4%
Onsite
Offshore
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
De-risking
© Infosys Technologies Limited 2003 - 04
Client concentration
Annual General Meeting 2003 - 04
FY 2002
FY 2003
FY 2004
Active clients
293
345
393
Clients added
116
92
119
6.1%
5.8%
5.0%
% of revenue from top 5 clients
24.1%
23.4%
22.6%
% of revenue from top 10 clients
39.4%
37.3%
36.0%
2
2
1
Million dollar+ clients
83
115
131
5-million dollar+ clients
25
41
51
10-million dollar+ clients
16
16
25
20-million dollar+ clients
6
9
12
50-million dollar+ clients
-
-
3
28.3%
33.3%
33.3%
88%
92%
93%
% of revenue from top client
Clients accounting for >5% of revenue
Million dollar clients / total clients
Repeat Business (%)
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
Cash management
© Infosys Technologies Limited 2003 - 04
We have a strong and liquid Balance Sheet
Annual General Meeting 2003 - 04
(Rs. Crore)
Mar 31, 2003
%
Mar 31, 2004
%
33.12
1
33.32
1
Reserves and surplus
2,827.53
99
3,220.11
99
Total
2,860.65
100
3,253.43
100
Fixed assets
772.72
27
970.30
30
Investments
33.20
1
97.78
3
Deferred tax assets
36.81
1
35.63
1
512.14
18
632.51
19
1,638.51
57
2,769.00
86
570.50
20
631.73
19
Current liabilities & provisions
(703.23)
(24)
(1,883.52)
(58)
Total
2,860.65
100
3,253.43
100
SOURCES OF FUNDS
Share capital
APPLICATION OF FUNDS
Sundry debtors
Cash and equivalents
Other current assets
Continued to be a zero-debt company
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Our receivables are under control
Annual General Meeting 2003 - 04
2003-2004
2002-2003
39%
4.6%
1.3%
1.2%
25.6%
28.7%
68.6%
66.1%
Days of sales receivable - 48 days
Days of sales receivable - 52 days
Age profile of accounts receivable
0-30
June 12, 2004
31-60
61-90
>90
© Infosys Technologies Limited 2003 - 04
Our cash flows are strong
Annual General Meeting 2003 - 04
FY 2003
(Rs. Crore)
FY 2004
(Rs. Crore)
Operating cash flows
915.96
1,633.97
Financing cash flows
(151.97)
(94.48)
13.52
122.27
Dividends paid
(165.49)
(216.75)
Investing cash flows
(153.41)
(1,332.01)
Purchases of fixed assets
(219.26)
(429.87)
0.33
1.43
(12.53)
(1,003.85)
78.05
100.28
0.97
(6.59)
611.55
200.89
Cash and cash equivalents, beginning of year
1,026.96
1,638.51
Cash and cash equivalents, end of year
1,638.51
1,839.40
Proceeds on exercise of stock options
Proceeds on sale of fixed assets
Investment in securities
Interest income
Effect of exchange differences
Net increase in cash and cash equivalents
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Our cash management policies
Annual General Meeting 2003 - 04
Financial policies



Maintain liquid assets at

25% of revenue and

40% of total assets
Earn

Return on average capital employed – 2x cost of capital

Return on average invested capital – 3x cost of capital

Our current cost of capital is estimated to be 14.09%
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
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Cash management – How we performed
Annual General Meeting 2003 - 04
Description
Target
FY 2002
FY 2003
FY 2004
54.4%
46.9%
48.1%
3.2
2.8
3.4
83.1%
79.9%
137.5%
3.0
4.8
4.7
9.8
60
47
52
48
Cash & equivalents / total assets *
40.0%
49.4%
57.3%
85.1%
Cash & equivalents / revenue *
25.0%
39.4%
45.2%
58.2%
ROCE (%)
Times cost of Capital
2.0
ROIC (%)
Times cost of Capital
Days sales outstanding
A one-time special dividend of Rs. 666.41 crore was recommended by the board
* Cash and cash equivalents include investments in liquid mutual funds
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
Other performance
indicators
© Infosys Technologies Limited 2003 - 04
Other performance indicators
Annual General Meeting 2003 - 04
137.5%
83.1%
79.9%
54.4%
46.6%
38.8% 40.7%
46.9%
48.1%
2002 2003 2004
2002 2003 2004
Return on Average
Net Worth (RONW) (%)
Return on Capital Employed
(ROCE) (%)
June 12, 2004
2002 2003 2004
Return on Invested Capital
(ROIC) (%)
© Infosys Technologies Limited 2003 - 04
Other performance indicators
Annual General Meeting 2003 - 04
187.38
222.17
144.68
173.22
122.12
146.40
78.2%
17.0%
2002 2003 2004
2002 2003 2004
19.9%
2002 2003 2004
EPS from Ordinary Activities
Cash EPS
Dividend Payout
(Rs.)
(Rs.)
(%)
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Other performance indicators
Annual General Meeting 2003 - 04
83,170%
488.20
68,259%
62,737%
431.84
314.31
30.50 28.01 26.35
2002 2003 2004
2002 2003 2004
2002 2003 2004
Book Value (Rs.)
Price Earnings
(Multiple)
Market Price /
Adjusted IPO Price (%)
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Strength of the invisibles *
Annual General Meeting 2003 - 04
FY 2002
FY 2003
FY 2004
26.6
26.6
26.0
31,385
44,972
74,057
7,257
7,488
8,185
510
455
690
Value added (Rs.Cr)
2,239
3,051
4,185
HR value (Rs.Cr)
9,539
10,778
21,140
Average age of employees (Yrs)
Education index
Brand value (Rs.Cr)
EVA (Rs.Cr)
* Consolidated
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
Consolidated Income
statement
© Infosys Technologies Limited 2003 - 04
Income statement
Annual General Meeting 2003 - 04
FY 04
FY 03
% change
Overseas
4,786.72
3,564.36
34.3%
Domestic
66.23
75.62
(12.4%)
4,852.95
3,639.98
33.3%
Software development and BPM expenses
2,538.67
1,822.96
39.3%
GROSS PROFIT
2,314.28
1,817.02
27.4%
Selling and marketing expenses
350.90
271.73
29.1%
General and administration expenses
369.19
275.67
33.9%
1,594.19
1,269.62
25.6%
-
-
236.73
190.34
24.4%
1,357.46
1,079.28
25.8%
123.38
100.26
23.1%
9.67
23.77
(59.3%)
1,471.17
1,155.77
27.3%
227.54
201.00
13.2%
1,243.63
954.77
30.3%
INCOME – Services, Products and BPM
Operating profit before interest, depreciation and amortization
Interest
Depreciation and amortization
Operating profit after interest, depreciation and amortization
Other income
Provision for investments
NET PROFIT BEFORE TAX
Provision for taxation
NET PROFIT AFTER TAX
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
Financial Highlights
– US GAAP
© Infosys Technologies Limited 2003 - 04
Financial Highlights – US GAAP
Annual General Meeting 2003 - 04
1,062.59
753.81
460.30
336.45
2003
June 12, 2004
2004
2003
2004
218.64
293.1
2
2003
2004
Revenues
Gross Profit
Operating Income
(US$ million)
(US$ million)
(US$ million)
© Infosys Technologies Limited 2003 - 04
Financial Highlights – US GAAP
Annual General Meeting 2003 - 04
295.93
194.87
270.2
9
273.11
199.6
7
223.45
2003
2004
Operating Income
(excl. stock comp)
(US$ million)
June 12, 2004
2003
2004
2003
2004
Net Income
Net Income
(US$ million)
(excl. stock comp)
(US$ million)
© Infosys Technologies Limited 2003 - 04
Investor services
Annual General Meeting 2003 - 04
 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)
 99.53%
of the company’s shares are now held in electronic
form
 Pending
June 12, 2004
share transfer related litigation -17 cases
© Infosys Technologies Limited 2003 - 04
Community services
Annual General Meeting 2003 - 04
 Grants
of Rs. 12 crore during the year to Infosys
Foundation, a not-for-profit trust to support initiatives that
benefit society at large
 Projects
undertaken during the year by Infosys Foundation
were in the cause of health care, rural poor &
underprivileged, education, art & culture & others
 Infosys
donated 729 computers to various institutions
across India through its Computers@Classrooms initiative
 Continued
to adhere to the principles of the UN Global
Compact Programme
 Established
June 12, 2004
Infosys Environment Policy
© Infosys Technologies Limited 2003 - 04
Awards won during the year
Annual General Meeting 2003 - 04
 Award
for the best presented Annual Report for fiscal 2003
received from The Institute of Chartered Accountants of
India. This award was received for the eighth consecutive
year.
 Asiamoney
award for best investor relations in India
 Assigned
a Corporate Governance Scorecard ‘CGS-8.6’
in a scale of 1 (low) to 10 (high) by Standard & Poor’s
June 12, 2004
© Infosys Technologies Limited 2003 - 04
Annual General Meeting 2003 - 04
Thank You
www.infosys.com
© Infosys Technologies Limited 2003 - 04