Intangible assets score sheet

We caution investors that this data is provided only as additional information to them. We are not responsible for any direct, indirect or consequential losses suffered by any person using this data.

From the 1840s to the early 1990s, a corporate’s value was mainly driven by its tangible assets – values presented in the corporate Balance Sheet. The managements of companies valued these resources and linked all their performance goals and matrices to these assets – Return on Investment and capital turnover ratio. The market capitalization of companies also followed the value of tangible assets shown in the Balance Sheet with the difference seldom being above 25%. In the latter half of the 1990s, the relationship between market value and tangible asset value changed dramatically. By early 2000, the book value of the assets represented less than 15% of the total market value. In short, intangible assets are the key drivers of market value in this new economy.

A knowledge-intensive company leverages know-how, innovation and reputation to achieve success in the marketplace. Hence, these attributes should be measured and improved upon year after year to ensure continual success. Managing a knowledge organization necessitates a focus on the critical issues of organizational adaptation, survival, and competence in the face of ever-increasing, discontinuous environmental change. The profitability of a knowledge firm depends on its ability to leverage the learnability of its professionals, and to enhance the reusability of their knowledge and expertise. The intangible assets of a company include its brand, its ability to attract, develop and nurture a cadre of competent professionals, and its ability to attract and retain marquee clients.

Intangible assets

The intangible assets of a company can be classified into four major categories : human resources, intellectual property assets, internal assets and external assets.

Human resources

Human resources represent the collective expertise, innovation, leadership, entrepreneurship and managerial skills of the employees of an organization.

Intellectual property assets

Intellectual Property assets include know-how, copyrights, patents, products and tools that are owned by a corporation. These assets are valued based on their commercial potential. A corporation can derive its revenues from licensing these assets to outside users.

Internal assets

Internal assets are systems, technologies, methodologies, processes and tools that are specific to an organization. These assets give the organization a unique advantage over its competitors in the marketplace. These assets are not licensed to outsiders. Examples of internal assets include methodologies for assessing risk, methodologies for managing projects, risk policies and communication systems.

External assets

External assets are market-related intangibles that enhance the fitness of an organization for succeeding in the marketplace. Examples are customer loyalty (reflected by the repeat business of the Company) and brand value.

The score sheet

We published models for valuing two of our most important intangible assets – human resources and the “Infosys” brand. This score sheet is broadly adopted from the intangible asset score sheet provided in the book titled, The New Organizational Wealth, written by Dr. Karl-Erik Sveiby and published by Berrett-Koehler Publishers Inc., San Francisco. We believe such representation of intangible assets provides a tool to our investors for evaluating our market-worthiness.


The growth in revenue is 3% this year, compared to 12% in the previous year (in US $). Our most valuable intangible asset is our client base. Marquee clients or image-enhancing clients contributed 50% of revenues during the year. They gave stability to our revenues and also reduced our marketing costs.

The high percentage 97.3% of revenues from repeat orders during the current year is an indication of the satisfaction and loyalty of our clients. The largest client contributed 4.6% to our revenue, compared to 6.9% during the previous year. The top 5 and 10 clients contributed around 16.4% and 26.2% to our revenue respectively, compared to 18.0% and 27.7% respectively, during the previous year. Our strategy is to increase our client base and, thereby, reduce the risk of depending on a few large clients. During the year, we added 141 new clients compared to 156 in the previous year. We derived revenue from customers located in 66 countries against 67 countries in the previous year. Sales per client grew by around 3.7% from US $8.05 million in the previous year to US $8.35 million this year. Days Sales Outstanding (DSO) was 59 days this year compared to 62 days in the previous year.


During the current year, we invested around 2.58% of the value-added (2.37% of revenues) on technology infrastructure, and around 2.09% of the value-added (1.93% of revenues) on R&D activities.

A young, fast-growing organization requires efficiency in the area of support services. The average age of support employees is 30.4 years, as against the previous year’s average age of 29.6 years. The sales per support staff has come down during the year compared to the previous year and the proportion of support staff to the total organizational staff, has improved over the previous year.


We are in a people-oriented business. We added 27,639 employees this year on gross basis (net 8,946) from 28,231 (net 13,663) in the previous year. We added 4,895 laterals this year against 5,796 in the previous year. The education index of employees has gone up substantially to 2,96,586 from 2,72,644. This reflects the quality of our employees. Our employee strength comprises people from 83 nationalities March 31, 2010 . The average age of employees as at March 31, 2010 was 27. Attrition was 13.4% for this year compared to 11.1% in the previous year (excluding subsidiaries).


The education index is shown as at the year end, with primary education calculated as 1, secondary education as 2 and tertiary education as 3.

External structure – our clients

  2010 2009
Growth / renewal    
Revenue growth (%)    
In US Dollar terms 3 12
In Rupee terms 5 30
Exports / total revenue (%) 99 99
Total 575 579
Added during the year 141 156
Marque clients    
Total 126 99
Added during the year 19 7
Revenue contribution (%) 50 44
Revenue derived – Number of countries 66 67
Sales / Client    
US $ million 8.35 8.05
Rs. crore 39.55 37.47
Sales and marketing expenses / revenue (%) 5.21 5.09
DSO (days) 59 62
Provision for debts / revenue (%) _ 0.35
Repeat business (%) 97.3 97.6
No. of clients accounting > 5% of revenue _ 1
Client concentration    
Top client (%) 4.6 6.9
Top five clients (%) 16.4 18.0
Top ten clients (%) 26.2 27.7
Client distribution    
1 million dollar + 338 327
5 million dollar + 159 151
10 million dollar + 97 101
20 million dollar + 59 59
30 million dollar + 41 39
40 million dollar + 33 30
50 million dollar + 26 20
60 million dollar + 16 16
70 million dollar + 12 12
80 million dollar + 10 10
90 million dollar + 8 7
100 million dollar + 6 4
200 million dollar + 1 1
300 million dollar +


Internal structure – our organization

  2010 2009
Growth / renewal    
R&D / total revenue (%) 1.93 1.24
R&D / value-added (%) 2.09 1.41
Technology investment    
Investment / revenue (%) 2.37 2.93
Investment / value-added (%) 2.58 3.33
Total investment    
Total investment / total revenue (%) 2.97 6.12
Total investment / value-added (%) 3.22 6.96
Sales per support staff    
US $ million 0.84 0.94
Rs. crore 4.00 4.35
General and admin expenses / revenue (%) 7.15 7.51
Average proportion of support staff (%) 5.36 5.04
Average age of support staff (years) 30.4 29.6


Competence – our people

  2010 2009
Growth / renewal    
Total employees 1,13,796 1,04,850
Added during the year    
Gross 27,639 28,231
Net 8,946 13,663
Laterals added 4,895 5,796
Staff education index 2,96,586 2,72,644
Employees – Number of nationalities 83 76
Gender classification (%)    
Male 66.5 66.6
Female 33.5 33.4
Number of non-Indian national employees 6,064 4,698
Value-added / employee (Rs. crore)    
Software professionals 0.21 0.20
Total employees 0.20 0.19
Value-added / employee ($ million)    
Software professionals 0.04 0.04
Total employees 0.04 0.04
Average age of employees (years) 27 26
Attrition – excluding subsidiaries (%) 13.4 11.1
Attrition – excluding involuntary separation (%) 10.4 9.1
Note : The above figures are based on consolidated financial statements.