As on: Mar 31, 2023 06:50 AM
Dear members,
The Board of Directors hereby submits the report of the business and operations of your Company ("the Company" or "Infosys"), along with the audited financial statements, for the financial year ended March 31, 2022. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Results of our operations and state of affairs
in Rs. crore, except per equity share data
Standalone
Consolidated
For the year ended March 31,
1 crore = 10 million
Notes:
The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS).
Equity shares are at par value of Rs.5 per share.
(1)
Financial position
in Rs. crore, except equity share data
As at March 31,
Excluding retained earnings
Global health pandemic from COVID-19
At Infosys, as we continue in our endeavor to fight waves of the COVID-19 pandemic, our priority remains the safety and well-being of our employees, and business continuity for our clients. Business continuity programs were tested and practiced, and the processes were proven to be resilient. We received the ISO 22301 Business Continuity Management System certification for being a company with resilient processes.
Considering employee safety as paramount, we implemented elaborate support measures for employees during the three COVID-19 waves in India, and at our global locations. We operated dedicated COVID Care Centers in 14 cities in India and also established tie-ups with more than 1,500 hospitals in 323 cities in India for the treatment of employees and their families. We also established a 24x7 war room and help-desk- coordinated support measures, such as tie-ups with testing labs and ambulance services providers, video consultation with doctors, COVID leave provision, insurance coverage, oxygen concentrators, medicines, fresh food, and counselling support. During the COVID waves, we provided emergency support (hospital beds / ventilators / plasma / oxygen) for over 6,100 employees / family members and addressed more than 78,000 queries for COVID medical support. Some of these support measures were also provided at global locations as required.
We also leveraged our technological expertise, creating mobile application 'Apthamitra' to help local governments in their fight against COVID-19.
Vaccination efforts: We facilitated Company-sponsored vaccination drives in India for employees and five dependents, including booster doses. We arranged vaccination centers at our campuses in India and also conducted vaccination camps in major cities for the benefit of employees working from home, away from DC locations. As on March 31,2022, 96.1% of employees in India were vaccinated with at least one dose, and 90% were fully vaccinated.
At global locations, we encouraged employees to avail vaccinations provided by the governments.
Work from home (WFH): At the onset of the pandemic at 2020, to ensure employee safety and business continuity, we were able to transition 99% of employees globally to a work from home arrangement. Further, based on client requirements and the COVID situation, WFH continued as required in fiscal 2022. We have been able to virtually engage over 1,50,000 employees through more than 900 initiatives, and employee satisfaction with these initiatives has been rated at an all-time high of 91% across locations.
Wellness: Amid these transitions and pandemic-related uncertainties, the well-being of our employees has become a critical focal point. Through concentrated efforts over the last
24 months, we have implemented several well-being initiatives for our employees globally, including sessions with experts on mental health, self-care and women's health, along with sessions on creating a healthy work-life balance. We have also developed a virtual General Practice service in Europe, where employees can schedule video consultations, without a physical visit.
Client support: Our focus on our client commitments remained unwavering through this period, reflecting in the record number of large deals we secured even while working remotely. With our operations teams ensuring smooth WFH processes and remote collaboration for our 3,14,000+ global workforce, we were able to ensure that client service level agreements (SLAs) were met and project milestones delivered on time. However, remote working conditions also multiplied cybersecurity risks, not just for us, but for clients as well. Being an early adopter of advanced cybersecurity strategies, including the setting up of seven Cyber Defence Centers in India, the US and Europe, we could minimize threats to our operations as well as offer cybersecurity solutions to our clients.
We continued to provide critical support to clients around the world in essential services such as banking, healthcare and communications. Although travel was ruled out for most of the fiscal, we leveraged cloud and other digital transformation offerings to bring in new business, ensuring maximization of benefits to our shareholders.
Meeting and learning online: As an organization, our external communication had to transition to new virtual models as well. Events, such as quarterly results, analyst meetings and the Annual General Meeting, have been executed successfully leveraging our in-house platforms such as Infosys Meridian.
All recruitment drives have also been conducted virtually. Our online learning platform, Lex, and other virtual programs allow our training programs to continue unaffected. In fiscal 2022, the number of employees leveraging Lex rose by 35.5% from the previous fiscal. Leveraging initiatives like Skill Tags and Digital Quotient has enabled learning and reskilling of talent to proceed at an incredible pace. Digital Quotient acts as a guide-on-the- go to ensure digital preparedness for our talent, while Skill Tags allow employees to move beyond learning to establish their expertise in new-age / niche technology spaces. The number of Skill Tagged employees increased steadily during fiscal 2022, growing by 47% over fiscal 2021. Cloud (AWS, Azure), SAP and Python continued to feature as the most sought-after skills for certification. Overall, we had more than 1,60,000 employees who undertook various certifications.
At Infosys, even amid an unprecedented global crisis, we continue to balance success as a business with exemplary governance and responsiveness to the needs of all our stakeholders.
Capital Allocation Policy
Effective fiscal 2020, the Company expects to return approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and / or share buyback and / or special dividends, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure, as per the Consolidated Statement of Cash Flows prepared under IFRS. Dividend and buyback include applicable taxes.
In line with the Capital Allocation Policy, the Board, at its meeting held on April 14, 2021, approved the buyback of equity shares, from the open market route through the Indian stock exchanges, amounting to Rs.9,200 crore (Maximum Buyback Size, excluding buyback tax) at a price not exceeding Rs.1,750 per share (Maximum Buyback Price), subject to shareholders' approval in the ensuing Annual General Meeting (AGM).
The shareholders approved the proposal of buyback of equity shares recommended by the Board of Directors in the AGM held on June 19, 2021.
The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchange. The buyback of equity shares through the stock exchanges commenced on June 25, 2021 and was completed on September 8, 2021. During this buyback period, the Company purchased and extinguished a total of 5,58,07,337 equity shares from the stock exchanges at a volume weighted average buyback price of Rs.1,648.53 per equity share comprising 1.31% of the pre-buyback paid-up equity share capital of the Company. The buyback resulted in a cash outflow of Rs.9,200 crore (excluding transaction costs and tax on buyback). The Company funded the buyback from its free reserves including Securities Premium as explained in Section 68 of the Companies Act, 2013.
During the year ended March 31, 2022, the Company paid an interim dividend of Rs.15 per share and announced a final dividend of Rs.16 per share, subject to shareholders' approval in the ensuing AGM. After returning the above amounts, the Company would have returned approximately 73% of the free cash flow for fiscals 2020, 2021 and 2022 through dividends and buybacks, in line with the Capital Allocation Policy.
The Capital Allocation Policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/capital-allocation-policy.pdf.
Liquidity
Our principal sources of liquidity are cash and cash equivalents, investments and the cash flow that we generate from our operations. We continue to be debt-free and maintain sufficient cash to meet our strategic and operational requirements.
We understand that liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business requirements. Liquidity enables us to be agile and ready for meeting unforeseen strategic and business needs.
As of March 31,2022, we had Rs.27,461 crore in working capital on a standalone basis, and Rs.33,582 crore on a consolidated basis.
Consolidated cash and investments stand at Rs.29,950 crore on a standalone basis and Rs.37,419 crore on a consolidated basis as on March 31,2022, as against Rs.30,764 crore on a standalone basis, and Rs.38,660 crore on a consolidated basis as on March 31, 2021.
Consolidated cash and investments, on both standalone and consolidated basis, include deposits with banks and financial institutions with high credit ratings by international and domestic credit rating agencies. As a result, liquidity risk of cash and cash equivalents is limited. Ratings are monitored periodically. Liquid assets also include investments in liquid mutual fund units, fixed maturity plan securities, certificates of deposit (CDs), commercial paper, quoted bonds issued by government and quasi-government organizations, and nonconvertible debentures. CDs represent marketable securities of banks and eligible financial institutions for a specified time period with high credit rating given by domestic credit rating agencies. Investments made in non-convertible debentures are issued by government-owned institutions and financial institutions with high credit rating. We invest after considering counterparty risks based on multiple criteria including Tier-I capital, capital adequacy ratio, credit rating, profitability, NPA levels and deposit base of banks and financial institutions.
The details of these investments are disclosed under the Rs.non-current and current investments' section in the Standalone and Consolidated financial statements in this Integrated Annual Report.
Capital expenditure on tangible assets -
standalone
This year, on a standalone basis, additions to tangible assets was Rs.2,381 crore. This comprises Rs.1,100 crore in infrastructure and Rs.1,281 crore for investment in computer equipment.
In the previous year, we had additions to tangible assets of Rs.2,015 crore. This comprised Rs.1,039 crore in infrastructure, Rs.975 crore for investment in computer equipment, and Rs.1 crore in vehicles.
Capital expenditure on tangible assets - consolidated
This year, on a consolidated basis, additions to tangible assets was Rs.2,716 crore. This comprises Rs.1,174 crore in infrastructure and Rs.1,542 crore in computer equipment.
In the previous year, we had additions to tangible assets of Rs.2,231 crore. This comprised Rs.1,071 crore in infrastructure, Rs.1,159 crore for investment in computer equipment and Rs.1 crore in vehicles.
Leases
This year, on a standalone basis, additions to right-of-use (ROU) assets was Rs.374 crore. This comprises Rs.306 crore in buildings, and Rs.68 crore in computer equipment.
In the previous year, we had additions to ROU assets of Rs.1,109 crore. This comprised Rs.1,017 crore in land and buildings, and Rs.92 crore in computer equipment.
This year, on a consolidated basis, additions to ROU assets was Rs.914 crore. This comprises Rs.449 crore in buildings, Rs.459 crore in computer equipment and Rs.6 crore in vehicles.
In the previous year, we had additions to ROU assets of Rs.1,394 crore. This comprised Rs.1,241 crore in land and buildings,
'140 crore for investment in computer equipment and Rs.13 crore in vehicles.
Dividend
The Company recommended / declared dividend as under:
Fiscal 2022
Fiscal 2021
Note:
The Company declares and pays dividend in Indian rupees. Companies are required to pay / distribute dividend after deducting applicable withholding income taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
(2)
* Payout ratio is computed as a percentage of Free cash flow prepared under IFRS.
Particulars of loans, guarantees or investments
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Integrated Annual Report.
Transfer to reserves
We do not propose to transfer any amount to general reserve on declaration of dividend.
Fixed deposits
We have not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.
Particulars of contracts or arrangements made with related parties
There were no contracts, arrangements or transactions entered into during fiscal 2022 that fall under the scope of Section 188(1) of the Companies Act, 2013. As required under the Companies Act, 2013, the prescribed Form AOC-2 is appended as Annexure 2 to the Board's report.
Management's discussion and analysis
In terms of the provisions of Regulation 34 of the Listing Regulations, the Management's discussion and analysis is set out in this Integrated Annual Report.
Risk management report
In terms of the provisions of Section 134 of the Companies Act, 2013, a Risk management report is set out in this Integrated Annual Report.
Board policies
The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and Securities and Exchange Board of India (SEBI) regulations are provided in Annexure 8 to the Board's report.
Material changes and commitments affecting financial position between the end of the financial year and date of the report
There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.
2. Business description
Strategy
Our strategic objective is to build a sustainable and resilient organization that remains relevant to the agenda of our clients, while creating growth opportunities for our employees, generating profitable returns for our investors and contributing to the communities that we operate in.
Our clients and prospective clients are faced with transformative business opportunities due to advances in software and computing technology. These organizations are dealing with the challenge of having to reinvent their core offerings, processes and systems rapidly and position themselves as 'digitally enabled'. The current economic climate and volatility have caused enterprises to accelerate their adoption of digital technologies - to enhance organizational resilience, get competitive advantage and optimize cost structures. The journey
to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices. Our strategy is to be a navigator for our clients as they ideate, plan and execute their journey to a digital future.
In fiscal 2022, we continued to execute our four-pronged strategy to strengthen our relevance to clients and drive accelerated value creation. We believe the investments we have made, and continue to make, in our strategy will enable us to advise and help our clients as they tackle these market conditions, especially in the areas of digitization of processes, migration to cloud-based technologies, workplace transformation, business model transformation, data analytics, enhanced cybersecurity controls and cost structure optimization in IT. Further, we have successfully enabled our employees worldwide to work remotely and securely - thus achieving the operational stability to deliver on client commitments and ensuring our own business continuity.
For details of our continued investments and outcomes of our strategic initiatives, refer to the Strategy section of the Integrated Report.
Organization
Our go-to-market business units and solutions are detailed in the Infosys at a glance section of the Integrated Report.
Infrastructure
There has been a net movement of 1 million sq. ft. of physical infrastructure space during the year. The total available space as on March 31, 2022 stands at 53.84 million sq. ft. We have presence in 54 countries across 247 locations as on March 31, 2022.
Mergers and acquisitions (M&A)
Infosys has a systematic M&A approach aimed to strengthen digital services capabilities, deepen industry expertise, and expand geographical footprint.
On March 22, 2022, Infosys Consulting Pte. Ltd. (a wholly-owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire oddity, a Germany-based digital marketing, experience, and commerce agency, for a total consideration of up to €50 million (approximately Rs.420 crore), which includes earn-out, management incentives and bonuses. This acquisition is expected to strengthen the Group's creative, branding and experience design capabilities in Germany and across Europe.
To consummate this transaction, Infosys Consulting Pte. Ltd. has simultaneously acquired Infosys Germany GmBH (formerly Kristall 247. GmBH).
Subsidiaries
We, along with our subsidiaries, provide consulting, technology, outsourcing and next-generation digital services. At the beginning of the year, we had 24 direct subsidiaries and 62 step-down subsidiaries. As on March 31,2022, we have 27 direct subsidiaries and 50 step-down subsidiaries. The changes
in subsidiaries during the year are included in the Standalone financial statements of the Company.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared the Consolidated financial statements of the Company, which form part of this Integrated Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure I to the Board's report. The statement also provides details of the performance and financial position of each of the subsidiaries, along with the changes that occurred, during fiscal 2022.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated financial statements and related information of the Company and audited accounts of its subsidiaries, are available on our website, www.infosys.com.
3. Human resources management
Our professionals are our most important assets. We are committed to hiring and retaining the best talent and being among the industry's leading employers. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustained high performance. Our human resource management focuses on allowing our employees to develop their skills, grow in their career and navigate their next.
Internal complaints committee
Infosys' goal has always been to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. Towards this, the Company has set up the Anti-Sexual Harassment Initiative (ASHI), which proudly completes 22+ years of enabling a positive and safe work environment for our employees. Our ASHI practices have set an industry benchmark as it ranked first among 350+ companies that participated in an external survey on the best anti-sexual harassment initiatives in 2017, 2019, 2020 and 2021.
Infosys has constituted an Internal Committee (IC) in all the development centers of the Company in India to consider and resolve all sexual harassment complaints reported by women. The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted and decisions made by the IC at the respective locations, and a senior woman employee is the presiding officer over every case. Half of the total members of the IC are women. The role of the IC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. In the last few years, the IC has worked extensively on creating awareness on relevance of sexual harassment issues in the new normal by using brand new and innovative measures to help employees understand the forms of sexual harassment while working remotely. The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability Report of this Integrated Annual Report.
Particulars of employees
The Company had 2,51,376 employees on standalone basis and 3,14,015 employees on consolidated basis as of March 31, 2022.
The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) (as required under the Companies Act, 2013) to the median of employees' remuneration, and the list of top 10 employees in terms of remuneration drawn, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, form part of Annexure 3 to this Board's report. The statement containing particulars of employees employed throughout the year and in receipt of remuneration of Rs.1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of Rs.8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate exhibit forming part of this report and is available on the website of the Company, at https://www.infosys.com/ investors/reports-filings/Documents/exhibitboards-report2022.pdf. The Integrated Annual Report and accounts are being sent to the shareholders excluding the aforesaid exhibit. Shareholders interested in obtaining this information may access the same from the Company website. In accordance with Section 136 of the Companies Act, 2013, this exhibit is available for inspection by shareholders through electronic mode.
1. The employees mentioned in the aforesaid exhibit have / had permanent employment contracts with the Company.
2. The employees are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
3. The details of employees posted outside India and in receipt of a remuneration of Rs.60 lakh or more per annum or Rs.5 lakh or more a month can be made available on specific request.
Employee stock options / Restricted Stock Units (RSUs)
The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.
Infosys Expanded Stock Ownership Program 2019 ("the 2019 Plan")
On June 22, 2019, pursuant to approval by the shareholders in the AGM, the Board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2019 Plan. The maximum number of shares under the 2019 Plan shall not exceed 5,00,00,000 equity shares. To implement the 2019 Plan, up to 4,50,00,000 equity shares may be issued by way of secondary acquisition of shares by the Infosys Expanded Stock Ownership Trust. The RSUs granted under the 2019 Plan shall vest based on the achievement of defined annual performance parameters as determined by the administrator (the nomination and remuneration committee). The performance parameters will be based on a combination of relative Total Shareholder
Return (TSR) against selected industry peers and certain broader market domestic and global indices and operating performance metrics of the Company as decided by the administrator.
Each of the above performance parameters will be distinct for the purposes of calculation of the quantity of shares to vest based on performance. These instruments will generally vest between a minimum of one and a maximum of three years from the grant date.
2015 Stock Incentive Compensation Plan ("the 2015 Plan")
On March 31, 2016, pursuant to the approval by the shareholders through postal ballot, the Board was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Plan. The maximum number of shares under the 2015 Plan shall not exceed 2,40,38,883 equity shares (not adjusted for bonus issue). These instruments will generally vest over a period of four years and the Company expects to grant the instruments under the 2015 Plan over the period of four to seven years. These RSUs and stock options shall be exercisable within the period as approved by the nomination and remuneration committee. The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant.
Consequent to the September 2018 bonus issue, all the then outstanding options granted under the stock option plan have been adjusted for bonus shares.
The total number of equity shares and American Depositary Receipts (ADRs) to be allotted to the employees of the Company and its subsidiaries under the 2015 Plan does not cumulatively exceed 1% of the issued capital. For the shares and ADRs issued under the 2019 Plan, the cumulative amount does not exceed 1.15% of the issued capital. The 2019 Plan and 2015 Plan are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time, and there has been no material change to the plans during the fiscal.
The details of the 2019 Plan and 2015 Plan, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are available on the Company's website, at https://www.infosys.com/investors/reports-filings/Documents/ disclosures-pursuant-SEBI-regulations2022.pdf.
The details of the 2019 Plan and 2015 Plan form part of the Notes to accounts of the financial statements in this Integrated Annual Report.
4. Corporate governance
Our corporate governance philosophy
Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Infosys, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.
Our Corporate governance report for fiscal 2022 forms part of this Integrated Annual Report.
Board diversity
The Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, regional and industry experience, cultural and geographical background, age, ethnicity, race, gender, knowledge and skills including expertise in financial, global business, leadership, technology, mergers & acquisitions, Board service, strategy, sales and marketing, Environment, Social and Governance (ESG), risk and cybersecurity and other domains, which will ensure that Infosys retains its competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity.
The policy is available on our website, at https://www.infosys.com/investors/corporate-governance/ documents/board-diversity-policy.pdf.
Additional details on Board diversity are available in the Corporate governance report that forms part of this Integrated Annual Report.
Number of meetings of the Board
The Board met eight times during the financial year. The meeting details are provided in the Corporate governance report that forms part of this Integrated Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.
Policy on directors' appointment and remuneration
The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2022, the Board had eight members, one of who is an executive director, a nonexecutive and non-independent director and six independent directors. Two of the independent directors of the Board are women. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the Corporate governance report that forms part of this Integrated Annual Report.
The policy of the Company on directors' appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, at https:// www.infosys.com/investors/corporate-governance/documents/ nomination-remuneration-policy.pdf.
We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
Declaration by independent directors
The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.
Board evaluation
The nomination and remuneration committee engaged Egon Zehnder, external consultants, to conduct Board evaluation for the year. The evaluation of all the directors, committees, Chairman of the Board, and the Board as a whole, was conducted based on the criteria and framework adopted by the Board. The Board evaluation process was completed during fiscal 2022. The evaluation parameters and the process have been explained in the Corporate governance report.
Familiarization program for independent directors
All new independent directors inducted into the Board attend an orientation program. The details of the training and familiarization program are provided in the Corporate governance report. Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The format of the letter of appointment is available on our website, at https://www.infosys.com/investors/corporate-governance/ Documents/appointment-independent-director.pdf.
Directors and KMP
Inductions
The shareholders approved the following appointments during the 40*h AGM held on June 19, 2021:
• Bobby Parikh, as an independent director of the Board effective July 15, 2020
• Chitra Nayak, as an independent director of the Board effective March 25, 2021
Reappointments
Director liable to retire by rotation
As per the provisions of the Companies Act, 2013, Nandan. M. Nilekani, the non-executive and non-independent chairman, whose office is liable to retire at the ensuing AGM, being eligible, seeks reappointment. Based on performance evaluation and the recommendation of the nomination and remuneration committee, the Board recommends his reappointment. The notice convening the 41s* AGM, to be held on June 25, 2022, sets out the details.
Reappointment of independent director
D. Sundaram was appointed as an independent director for the first term of five years effective July 14, 2017. His office of directorship is due for retirement on July 13, 2022. Based on the recommendation of the nomination and remuneration committee and after taking into account the performance evaluation of his first term of five years and considering the knowledge, acumen, expertise, experience and the substantial contribution he brings to the Board, the committee has recommended the appointment of D. Sundaram to the Board for a second term of five years. The Board, at its meeting held on April 13, 2022, approved the reappointment of D. Sundaram as an independent director of the Company with effect from July 14, 2022 to July 13, 2027, whose office shall not be liable to retire by rotation.
The Board recommends the reappointment to the shareholders. The notice convening the 41st AGM, to be held on June 25, 2022, sets out the details.
Retirements and resignations
U.B. Pravin Rao, COO and Whole-time Director, retired as member of the Board effective December 12, 2021. The Board expressed its deep sense of appreciation for Pravin's leadership over his 35 years of service with the Company and acknowledges his immense efforts and contributions towards global delivery and business enablement. The disclosure in this regard is available at https:/ /www.infosys.com/investors/documents/retirement- whole-time-director-13dec2021.pdf.
Committees of the Board
As on March 31, 2022, the Board had six committees: the audit committee, the corporate social responsibility committee, the nomination and remuneration committee, the risk management committee, the stakeholders relationship committee and the Environment, Social and Governance (ESG) committee. All committees comprise only independent directors, one of whom is chosen as the chairperson of the committee.
The Board, at its meeting held on April 14, 2021, instituted the ESG committee.
During the year, all recommendations made by the committees were approved by the Board.
A detailed note on the composition of the Board and its committees is provided in the Corporate governance report.
Interna! financial control and its adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the 'Internal control systems and their adequacy' section in the Management's discussion and analysis, which forms part of this Integrated Annual Report.
Cybersecurity
At Infosys, while our employees operated efficiently as a remote and hybrid workforce, we continued to remain vigilant on the evolving cybersecurity threat landscape. In our endeavor to maintain a robust cybersecurity posture, the team has remained abreast of emerging cybersecurity events globally, so as to achieve higher compliance and its continued sustenance. We continue to be certified against the Information Security Management System (ISMS) Standard ISO 27001:2013. Additionally, we have also been attested on SSAE 18 SOC 1 and SOC 2 by an independent audit firm. During the year, our focus on our cybersecurity personnel's training and reskilling went ahead as planned, together with our overall initiatives on improving cybersecurity processes and technologies.
Our periodic stakeholder interactions ensured that we have sponsorship from the senior management and all critical stakeholders in a timely manner.
Significant and material orders
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.
Reporting of frauds by auditors
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's report.
Annual return
In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https://www.infosys.com/investors/reports-filings/documents/ annual-returns-2021-22.pdf.
Secretarial standards
The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.
Listing on stock exchanges
The Company's shares are listed on BSE Limited and the National Stock Exchange of India Limited, and its ADSs are listed on the New York Stock Exchange (NYSE).
Investor Education and Protection Fund (IEPF)
During the year, the Company has transferred the unclaimed and un-encashed dividends of Rs.2,02,58,692. Further, 4,154 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. The details of the resultant benefits arising out of shares already transferred to the IEPF, year-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividend account up to the year, and the corresponding shares, which are liable to be transferred, are provided in the Shareholder information section of the Corporate governance report and are also available on our website, at www.infosys.com/IEP=.
Directors' responsibility statement
The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after. Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The directors confirm that:
• In preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed and there are no material departures.
• They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.
• They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
• They have prepared the annual accounts on a going concern basis.
• They have laid down internal financial controls, which are adequate and are operating effectively.
• They have devised proper systems to ensure compliance with the provisions of all applicable laws, and such systems are adequate and operating effectively.
5. Audit reports and auditors
Audit reports
• The Auditors' Report for fiscal 2022 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements in this Integrated Annual Report.
• The Secretarial Auditors' Report for fiscal 2022 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors' Report is enclosed as Annexure 5 to the Board's report.
• The Auditor's certificate confirming compliance with conditions of corporate governance as stipulated under Listing Regulations, for fiscal 2022 is enclosed as Annexure 4 to the Board's report.
• The Secretarial Auditor's certificate on the implementation of share-based schemes in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, will be made available at the AGM, electronically.
Auditors Statutory auditors
Under Section 139(2) of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years and each such term would require approval of the shareholders. In line with the requirements of the Companies Act, 2013, Statutory Auditor M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration Number 117366W/ W-100018) were appointed as Statutory Auditor of the Company at the 36*h AGM held on June 24, 2017 to hold office from the conclusion of the said meeting till the conclusion of the 41s* AGM to be held in the year 2022. The term of office of M/s Deloitte Haskins & Sells LLP, as Statutory Auditors of the Company will conclude from the close of the forthcoming AGM of the Company.
The Board of Directors of the Company, based on the recommendation of the audit committee, at its meeting held on April 13, 2022, reappointed M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration Number 117366W/ W-100018) as the Statutory Auditor of the Company to hold office for a second term of five consecutive years from the conclusion of the 41s* AGM till the conclusion of the 46th AGM to be held in the year 2027 and will be placed for the approval of the shareholders at the ensuing AGM.
During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under the Companies Act, 2013, the Code of Ethics issued by the Institute of Chartered Accountants of India and the U.S.
Securities and Exchange Commission and the Public Company Accounting Oversight Board.
The Board recommends their reappointment to the shareholders. The notice convening the 41s* AGM to be held on June 25, 2022 sets out the details.
Secretarial auditor
Makarand M. Joshi & Co., Practicing Company Secretaries, are appointed as secretarial auditor of the Company for fiscal 2023, as required under Section 204 of the Companies Act, 2013 and Rules thereunder.
Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
6. Corporate social responsibility (CSR)
Infosys has been an early adopter of CSR initiatives. The Company works primarily through the Infosys Foundation, towards supporting projects in the areas of protection of national heritage, restoration of historical sites, and promotion of art and culture; destitute care and rehabilitation; environmental sustainability and ecological balance; promoting education, and enhancing vocational skills; promoting healthcare including preventive healthcare; and rural development. In fiscal 2022, the Company's CSR efforts included COVID-19 relief in multiple states.
The Company's CSR Policy is available on our website, at
https://www.infosys.com/investors/corporate-governance/
Documents/corporate-social-responsibility-policy.pdf.
The annual report on our CSR activities is appended as Annexure 6 to the Board's report. Infosys also undertakes CSR initiatives outside of India, in Australia, Europe and the US. The initiatives in the US are carried out through Infosys Foundation USA. The said initiatives are over and above the statutory requirement.
The highlights of the initiatives undertaken by the Company, Infosys Foundation, and Infosys Foundation USA form part of this Integrated Annual Report.
7. Conservation of energy, research and
development, technology absorption, foreign exchange earnings and outgo
The particulars, as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure 7 to the Board's report.
Business Responsibility and Sustainability Report (BRSR)
In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting ("the Committee") to finalize business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBC). Through its report, the Committee recommended that BRR be rechristened BRSR, where disclosures are based on ESG parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting.
SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, while disclosure is voluntary for fiscal 2022 .
The Committee Report encourages companies to report their performance for fiscal 2022 to be better prepared to adopt this framework from the next fiscal.
Infosys has adopted the BRSR voluntarily for fiscal 2022 to provide enhanced disclosures on ESG practices and priorities of the Company. The BRSR disclosures form a part of Infosys' Integrated Annual Report 2021-22. In addition to this, we also publish a comprehensive ESG Report annually, based on the GRI standard. The non-financial sustainability disclosures in our Integrated Annual Report and ESG Report have been independently assured by KPMG. The ESG Report is available at https://www.infosys.com/sustainability/documents/infosys- esg-report-2021-22.pdf.
Environmental, Social and Governance (ESG)
In October 2020, we launched our ESG Vision 2030. Our focus is steadfast on leveraging technology to battle climate change, conserving water and managing waste. On the social front, our emphasis is on the development of people, especially around digital skilling, improving diversity and inclusion, facilitating employee wellness and experience, delivering technology for good and energizing the communities we work in. We are also redoubling efforts to serve the interests of all our stakeholders, by leading through our core values and setting benchmarks in corporate governance. Our Board instituted an ESG committee on April 14, 2021, to discharge its oversight responsibility on matters related to organization-wide ESG initiatives, priorities, and leading ESG practices. The ESG committee reports to the Board and meets every quarter.
Acknowledgments
We thank our clients, vendors, investors, bankers, employee volunteers and trustees of Infosys Foundation, Infosys Foundation USA and Infosys Science Foundation for their continued support during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
We thank the governments of various countries where we have our operations. We thank the Government of India, particularly the Ministry of Labour and Employment, the Ministry of Environment and Forests, the Ministry of New and Renewable Energy, the Ministry of Communications, the Ministry of Electronics and Information Technology (Dept of IT), the Ministry of Commerce and Industry, the Ministry of Finance, the Ministry of Corporate Affairs, the Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, GST authorities, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments under the state governments and union territories, the Software Technology Parks (STPs) / Special Economic Zones (SEZs) - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Coimbatore , Gurugram, Hubballi, Hyderabad, Indore, Jaipur, Kochi, Kolkata, Mangaluru, Mohali, Mumbai, Mysuru, Nagpur, Noida, Pune, and Thiruvananthapuram - and other government agencies for their support, and look forward to their continued support in the future. We also thank the US federal government, the U.S. Securities and Exchange Commission, the Internal Revenue Service, and various state governments, especially those of Indiana, Rhode Island, Connecticut, Texas, Arizona and North Carolina.