Letter to the shareholder


Dear Shareholder,

Fiscal 2011 was a year of improved performance, recovery, consolidation and new explorations for us. The global economic climate posed several challenges, but we made the best use of our resources and abilities for growth. At the beginning of the fiscal, we had projected a revenue growth of 9% to 11% in rupee terms and 16% to 18% in US$ terms. At the end of the fiscal, we achieved a growth of 20.9% in rupee terms and 25.8% in US$ terms.

Some of our verticals and service lines were high achievers in this fiscal. The performance of our retail vertical helped us emerge first among the global retail IT service providers in 2010. We were adjudged second among the 'Global Outsourcing 100' by the International Association of Outsourcing Professionals. The strong customer-driven vertical focus that we have created has helped us take advantage of the opportunities we identified in the market.

The overall performance for the year spelled growth, both for us and for our clients. Our International Financial Reporting Standards (IFRS) consolidated revenues for this fiscal stood at Rupee Symbol27,501 crore, a year-on-year growth of 20.9%. The profit after tax was Rupee Symbol6,823 crore, a year-on-year growth of 9.7%. In accordance with the IFRS, our annual revenue for fiscal 2011 was US$ 6,041 million, a year-on-year growth of 25.8%, while our net income registered a year-on-year growth of 14.2% to stand at US$ 1,499 million. Out of the total revenue, 65.3% came from North America, 21.5% from Europe and 11.0% from the Rest of the World. The number of our million-dollar clients grew to 366 in fiscal 2011 from 338 in the last fiscal.

We are pleased to announce a final dividend of Rupee Symbol20 per equity share (equivalent to US$ 0.45 per American Depository Share (ADS) at the prevailing exchange rate of Rupee Symbol44.40 per US$). The dividends are payable on the equity shares / ADSs outstanding as on book closure date, at the prevailing exchange rate on the payment date, and are subject to approval by the shareholders. Earlier in the fiscal, we paid an interim dividend of Rupee Symbol10 per share and a 30th year special dividend of Rupee Symbol30 per share.

Our world-class business consulting model, designed to help our clients build their enterprises of tomorrow through technology-driven transformation, won us several prestigious projects this fiscal. A large US-based retailer partnered with us on its strategy on mobile application development to complement its e-commerce offerings. A leading manufacturer of helicopters engaged us to transform business intelligence capabilities at the enterprise level. We performed a security audit assessment and remediation of Sarbanes-Oxley-based conflicts for a global food service retailer in its Oracle financial applications.

Our flagship offering for the banking industry, Finacle™, continued to grow its business, with 41 client wins this fiscal. We crossed another milestone as innovation partner to banks with the launch of Finacle Analyz™, a comprehensive analytics solution for banks to make faster decisions. Flypp™, the mobile application marketplace developed by us, helped us enter a strategic relationship for reciprocal licensing and distribution of applications with Mobile Streams, the global mobile content retailer. iEngage™, our digital consumer platform, is currently powering social media marketing, e-commerce and employee engagement programs for five Global 500 companies.

A number of prestigious awards and recognitions were bestowed on us this fiscal. The Boston Consulting Group ranked us among the top 10 value-creating technology and telecommunications companies. Our high standards of corporate governance earned us the recognition of the best company for corporate governance from Asiamoney. A FinanceAsia survey voted us the best company in management, corporate governance, investor relations, and corporate social responsibility in India. Another survey by the Wall Street Journal named us the most admired company in India. We thank the readers and investors for considering us worthy of these distinctions.

Our commitment to adopt sustainable business practices were recognized by India Carbon Outlook with the Sustainability Leadership award. Even as we plan to add 4.7 million sq. ft. of built-up area to our existing infrastructure, we adhere to the highest environmental standards — building LEED-certified structures, creating water harvesting facilities, adopting innovative air-conditioning technology, and making significant savings in energy consumption. We continue to promote green technologies and eco-friendly practices in our offices and for our clients.

As we step into the new fiscal, we also get ready to complete the thirtieth year of our operations. Needless to say, it has been a tremendous journey. An organization started by seven individuals is now a family of 1,30,820 Infoscions. What was started with a paltry capital of US$ 250 is now generating revenues in excess of US$ 6 billion. From the first major client win of Data Basics Corporation to 600-plus clients today; from a small rented office space in Pune to over 60 development centers worldwide — the journey has been exhilarating as well as humbling.

While we celebrate what we have achieved in these three decades, we must also bid farewell to the person who took the first steps with courage and conviction and made the rest of the journey easier for us. N. R. Narayana Murthy retires this year as Chairman of the Board. His contributions to Infosys, to the IT industry and to India need no reiteration. The Government of India recognized his achievements by conferring the Padma Vibhushan on him in 2008. He has received numerous awards and recognitions from around the world in the last several years. Every Infoscion is grateful to N. R. Narayana Murthy for his leadership by example and his support to their personal development. In recognition of his contribution to Infosys, the Board has decided to name him the Chairman Emeritus of the company.

The composition of the Board has undergone a few more changes. The Board has inducted two new members, R. Seshasayee and Ravi Venkatesan. We are confident that these two industry stalwarts will bring their experience, expertise and insights to our decision-making process.

K. Dinesh, Member of the Board and Head of Quality, Information Systems and the Communication Design Group, will retire by rotation at the forthcoming Annual General Meeting and has decided not to seek re-appointment. T. V. Mohandas Pai, Member of the Board, and Director and Head – Administration, Education & Research, Finacle, Human Resources Department, and Infosys Leadership Institute, has resigned as Member of the Board. The Board has decided to relieve him of responsibilities post the company's Annual General Meeting on June 11, 2011. Both K. Dinesh and T. V. Mohandas Pai have been instrumental in the growth of the company, and we wish them success with their future endeavors.

On August 21, 2011, N. R. Narayana Murthy will retire as the Chairman and Chief Mentor. The Board of Directors on April 30, 2011 announced the following changes to the board : K. V. Kamath to be appointed as the Chairman of the Board; S. Gopalakrishnan to relinquish the post of Chief Executive Officer and Managing Director and be appointed as a Whole-time Director and designated as executive Co-Chairman of the Board; S. D. Shibulal to be appointed as the Chief Executive Officer and Managing Director. All the above appointments are effective from August 21, 2011.

We are on the threshold of yet another breakthrough in our journey towards adding greater value to our clients. We have unveiled Infosys 3.0, our new brand positioning that essentially marks our transition from a technology solutions company to a next-generation global consulting and services company, proactively helping clients build their enterprises of tomorrow. The global economy in general and the IT industry in particular have changed significantly over the past few years, requiring us to change our business strategy and realign our agenda with that of our clients. We have consolidated all our verticals under four heads : Financial Service and Insurance; Manufacturing; Energy, Utilities, Communications and Services; Retail, Consumer Packaged Goods, Logistics and Life Sciences. We have decided on three focus areas : business transformation, business operations and business innovation. We believe that the new strategy and structure will help us expand our global market by forging stronger strategic partnerships with our clients and increasing our relevance to all facets of their enterprise.

In keeping with our shift from being a technology solutions provider to a business transformation partner for our clients, the Board has decided to change the name of the company from 'Infosys Technologies Limited' to 'Infosys Limited'. We are confident that this change will propel the organization forward to accelerated growth and sustain its leadership position in the industry.

We hope you will continue to support our new direction in the same way that you have stood by us over the years. At the end of this eventful and successful year, our thanks go out to you, our shareholders, and to our clients, the governments of various countries, our partners and our employees.

Kris Gopalakrishnan
Chief Executive Officer and
Managing Director

S. D. Shibulal
Chief Operating Officer and


April 30, 2011