in a Dynamic Environment - Domain-b

Annual Report 2008-09RevenuesRevenues from operationsThe Company’s (unconsolidated) total revenues increasedto Rs.22,404.00 crore in fiscal 2009, from Rs.18,289.85crore in fiscal 2008, a growth of 22.49%.Revenues from information technology and consultancyservices increased to Rs.21,535.75 crore in fiscal 2009from Rs.17,446.51 crore in fiscal 2008, a growth of 23.44%.Revenues from information technology and consultancyservices contributed 96.12 % of revenues in fiscal 2009(95.39% in fiscal 2008).Revenues from sale of equipment and software licensesincreased to Rs.868.25 crore in fiscal 2009 from Rs.843.34crore in fiscal 2008, a growth of 2.95%. Sale of equipmentand software licenses was at 3.88% of revenues in fiscal2009 (4.61% in fiscal 2008).ExpenditureEmployee costs and overseas business expensesEmployee costs includes salaries which have fixed andvariable components, contribution to provident fund,superannuation fund, gratuity fund and the employeeinsurance schemes. It also includes expenses incurred onstaff welfare.Overseas business expenses primarily comprise livingallowances paid to employees in connection with overseasassignments. For purpose of this Management Discussionand Analysis (MD & A), these costs grouped in ‘overseasbusiness expenses’ have been regrouped in ‘employeecosts’ for aggregating all costs related to employeecompensations. In this MD & A, we refer to suchaggregated costs as ‘Total employee costs’.‘Total employee costs’ in fiscal 2009 was Rs.11,676.34 crore(Rs.9,413.05 crore in fiscal 2008). ‘Total employee costs’as percentage of revenues was 52.12% in fiscal 2009(51.47% in fiscal 2008). This increase of 0.65% isattributable primarily to: increase in headcount increase in compensation package, particularly inIndia effect of exchange variation for foreign currencyallowances paid to employees deployed at variousoverseas locations.Overseas business expenses (other than employeeallowances)This includes travel, marketing and office expensesincurred overseas.Expenses on this account went up from Rs.417.19 crore infiscal 2008 to Rs.421.63 crore in fiscal 2009 mainly due toincrease in travel related costs by Rs.9.96 crore anddecrease in marketing costs by Rs.5.52 crore in fiscal2009 as compared to fiscal 2008. As a percentage ofrevenues, overseas business expenses decreased from2.28% in fiscal 2008 to 1.88% in fiscal 2009.Services rendered by business associates and othersPayments for services rendered by business associates orsub-contractors engaged for software development andother IT services, are included in this head. The Companynormally engages these consultants to bridge shortagesin certain skill sets.These expenses increased from Rs.689.25 crore in fiscal2008 to Rs.1,019.67 crore in fiscal 2009. As a percentageof revenues, it went up from 3.77% in fiscal 2008 to 4.55%in fiscal 2009. This increase of 0.78% is attributable tohiring of services of professionals with required skill setsnot available within the Company, required for deliveringend-to-end IT services projects undertaken by theCompany.Other operating expensesAmount in Rs. croreNature of expenses For the year For the yearendedendedMarch 31, 2009 March 31, 2008Rs crore % of Rs crore % ofrevenues revenuesSoftware, hardware918.17 4.10337.28 1.51292.77 1.31263.42 1.18492.75 2.20103.82 0.46122.16 0.55164.34 0.7398.89 0.44471.93 2.10Total 3,265.53 14.58 2,994.12 16.37Other operating expenses given above, have increasedfrom Rs.2,994.12 crore in fiscal 2008 to Rs.3,265.53 crorein fiscal 2009. As a percentage of revenues, it hasdecreased from 16.37% in fiscal 2008 to 14.58% in fiscal2009. The decrease of 1.79% is primarily due to: reduction in the cost of software, hardware andmaterial procured for rendering systems integrationprojects by 0.48%66