in a Dynamic Environment - Domain-b

Annual Report 2008-09 on-site services 51.19% (53.87% in fiscal 2008) services from global and regional delivery centers4.59% (4.21% in fiscal 2008).ExpenditureEmployee costs and overseas business expensesThe consolidated ‘Total employee costs’ for fiscal 2009was Rs.14,473.86 crore (Rs.11,411.05 crore in fiscal 2008).Employee costs as a percentage of revenues was 52.04%in fiscal 2009 (50.45% in fiscal 2008).This increase of 1.59% as a percentage of revenues 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 increased contributions to retirement funds.Utilisation of manpower resources including trainees was69.40% as at March 31, 2009 (75.80% as at March 31,2008). The utilisation excluding trainees was 79.70% asat March 31, 2009 (79.10% as at March 31, 2008).Overseas business expenses (other than employeeallowances paid overseas)Overseas business expenses (other than employeeallowances paid overseas) increased from Rs.438.42 crorein fiscal 2008 to Rs.460.07 crore in fiscal 2009. As apercentage of revenues these expenses decreased from1.94% in fiscal 2008 to 1.65% in fiscal 2009. Overseastravel which constituted the largest component, increasedfrom Rs.274.10 crore in fiscal 2008 (1.21% of revenues)to Rs.303.87 crore in fiscal 2009 (1.09% of revenues). Thisreduction in travel related costs as a percentage ofrevenues of 0.12% is primarily due to controls put in placeand increased utilization of videoconferencing and VoiceOver Internet Protocol (VOIP) facilities.Services rendered by business associates and othersExpenses on business associates increased fromRs.850.49 crore in fiscal 2008 to Rs.1,108.71 crore in fiscal2009. As a percentage of revenues, these expensesincreased from 3.76% in fiscal 2008 to 3.99% in fiscal2009. The increase of 0.23% is attributable to the needfor hiring the services of professionals with required skillsets, not available within the Company. The managementconducts periodic reviews of the need for these associatesand the availability of the required skill sets within theCompany and manages these costs appropriately.Other operating expensesNature of expenses For the year For the yearendedendedMarch 31, 2009 March 31, 2008Rs. crore % of Rs. crore % ofrevenuesrevenues1,031.22 3.71423.51 1.52390.33 1.40408.64 1.47595.89 2.14256.63 0.92176.53 0.63196.23 0.71120.99 0.441,000.47 3.60Total 4,600.44 16.54 4,208.19 18.60Other operating expenses have increased fromRs.4,208.19 crore in fiscal 2008 to Rs.4,600.44 crore infiscal 2009. As a percentage of revenues, these expensesdecreased from 18.60% in fiscal 2008 to 16.54% in fiscal2009, primarily due to: reduction in the cost of software, hardware andmaterial procured for rendering systems integrationprojects by 1.02% reduction in cost of software licenses procured by0.54% reduction in recruitment and training costs by 0.32% reduction in travel and conveyance costs by 0.38% reduction in ‘other expenses’ by 0.16%.The reductions in the above items of expenses are resultsof cost control measures taken by the Company.However, rent costs as a percentage of revenues went upfrom 1.87% in fiscal 2008 to 2.14% in fiscal 2009 mainlydue to requirement of additional space commensuratewith growth of business.Other incomeConsolidated ‘other income’ in fiscal 2008 was a gain ofRs.728.29 crore, which in fiscal 2009 was a loss ofRs.426.99 crore.76