Bangalore, June 20: Software major Infosys` Chief
Mentor and Chairman, N R Naryana Murthy on Saturday said the company expected reduction of IT budgets by the clients to impact its growth during the current year but was confident of emerging stronger when the uncertainties ended.
"Many of our clients are reducing their IT budgets. This
will impact our growth during the current year. A recent
survey of our top 135 clients indicated that a majority of
them will downsize their IT budgets. Consequently, our revenue
guidance in US Dollars indicated a decline of 3.1 per cent to
6.7 per cent in fiscal 2010", Murthy told shareholders during
the 28th Annual General Meeting of the company here.
"We have taken several steps to mitigate the impact of
the current crisis. We are confident that we will be stronger
when the economic uncertainities end", he said.
The company, he said, started the year with a revenue
guidance of a growth of 19-21 per cent in USD terms.
During the course of the year, the firm ran into a "perfect
storm" of a global financial crisis and growth and revenues
were severely impacted.
"Despite these adversities we ended the year with our
revenues growing by 11.7 per cent in US dollar terms, as per
the International Financial Reporting Standard."
"During the year, we also saw significant depreciation of
the Indian Rupee against the US dollar by around 26.7 per cent
which resulted in a revenue growth of over 30.0 percent as per
the Indian GAAP", he told the shareholders.
"Our business model has proved its versatility in this
tough environment", he said.
Infosys added 156 clients with the repeat business
contributing 97.6 per cent of the revenues. It had 579 active
clients with four of them billing over USD 100 million of
business annually, Murthy said.
"As per our dividend policy, directors recommend a final
dividend of Rs 13.50 per share, making it a total dividend of
Rs 23.50 per share for the year", he said.
He also announced inducting banker K V Kamath on the
Board of Directors.
The company, he said, had increased its focus on new
engagement models to ensure higher return on investment and
have enhanced the current suite of offerings.
"We have re-aligned our cost structure to protect
margins", he said, adding, the management had accepted highest
reduction in variable compensation and compensation and
promotions had been postponed for fiscal 2010 "to remain
competitive in the current difficult circumstances".
However, the company had honoured commitments to campus
recruits during the last fiscal, he said.
The firm had filed for 200 patent applications in the US
and India, said the Chief Mentor.
The firm, he said, had completed construction of six
million square feet of workplace across delivery centres,
taking the total workspace to 22.64 million sq ft. The global
education centre at Mysore can train 13,500 engineers at a
time and manage the training of 20,000 engineers annually, he
said.
The company reduced per capita consumption of energy and
carbon emission by five per cent during the year.
Cash really existed: Infosys assures investors
Investor apprehension
post-Satyam financial scam today appeared to spill over at the
Infosys Annual General Meeting with some of them raising
questions whether auditors had physically verified the bank
accounts of the country`s leading software company.
Raising questions during the 28th Annual General Meeting
of the firm, one of the investors said he was concerned after
burning his fingers in the Satyam scam and was keen to know
whether auditors had physically verified bank accounts.
"Have you physically checked it", he asked those on the
dais and also wanted to know whether the auditors had accepted
any free lunches and gifts.
Assuring the investors, Balakrishnan, Chief Financial
Officer, said the "cash really existed" and that the auditors
had access to accounts and had verified it.
To questions on bonus share, S Gopalakrishnan, Co-CEO and
MD, said the firm was listening to its shareholders and
would discuss the issue with the board. "Let us see what the
board had to decide", he said.
Assuaging investors` fears over the firm`s overseas
loss-making subsidiaries, including China, Balakrishnan said
the firm hopes they break even by this year or next year
before it sees some profits. "We are working hard on it", he
said.
Bureau Report
