[Presentation]
I welcome the members to the 39th Annual General Meeting. This meeting is being held through video conference in accordance with the circular issued by the Ministry of Corporate Affairs and SEBI. For safety reasons, each of us is in a different location. Before we start the main proceedings of the meeting, I request my colleagues on the video conference to introduce themselves. Salil?
Good afternoon, everyone. I'm Salil Parekh. I'm CEO and Managing Director of Infosys. I'm in Bengaluru in my home.
Pravin?
Namaskara. I am Pravin Rao, Chief Operating Officer and Member of the Board. I am attending from my residence in Bengaluru.
Kiran?
Namaskara. I'm Kiran Mazumdar-Shaw, Lead Independent Director. I am attending this AGM from my residence in Bengaluru.
Sundaram?
This is D. Sundaram, attending the AGM of Infosys from Mumbai. I'm an Independent Director and Chair of the Audit Committee. Thank you.
Punita?
Hello. Good evening. I'm Punita Kumar-Sinha, Independent Director and Chair of the Stakeholders Relationship Committee, attending the AGM from Jharkhand.
Michael?
Good afternoon, everyone. This is Michael Gibbs. I'm attending from my home in Houston, Texas.
Uri?
Good afternoon, everyone. My name is Uri Levine, and I'm attending from Tel Aviv, Israel.
Nilanjan?
Good afternoon, everyone. I'm Nilanjan Roy, CFO, attending from the Bengaluru campus.
Mani?
Hi. Good evening, everyone. This is Manikantha, Company Secretary, joining from Bangalore.
Apart from them, we also have key executives and senior management joining from their respective locations. Statutory Auditor, Deloitte, and Secretarial Auditor, Parameshwar G. Hegde, have also joined this meeting. We have the requisite quorum present through video conference to conduct the proceedings of this meeting. Participation of members through video conference is being reckoned for the purpose of quorum as per the circular issued by MCA and Section 103 of the Companies Act 2013. The quorum being present, I call this meeting to order. I now request Manikantha, Company Secretary, to provide general instructions to the members regarding participation in this meeting.
Hi. Good evening, everyone. Members may note that this annual general meeting is being held through video conference in accordance with the Companies Act 2013 and circular issued by the Ministry of Corporate Affairs and SEBI. Facility for joining this meeting through video conference or other audiovisual means is made available for the members on a first-come, first-serve basis. The company has also provided webcast facility to view the live proceedings of this annual general meeting on the company's website. The register of directors and key managerial personnel, the register of contracts or arrangements, has been made available electronically for inspection by the members during the AGM. Members seeking to inspect such documents can send their request to investors@infosys.com. As the AGM is being held through video conference, the facility for appointment of proxies by the members was not applicable, hence, the proxy register for inspection is not available.
The company has received requests from a few members to register them as speakers at the meeting. Accordingly, the floor will be open for these members to ask questions or express their views. The moderator will facilitate this session once the chairman opens the floor for questions and answers. Members can also post their views or questions on the Ask a Question tab on their video conference screens before 4:30 P.M. IST. It may be noted that the company reserves the right to limit the number of members asking questions, depending on the availability of the time at the AGM. The company had provided the facility to cast the votes electronically on all resolutions set forth in the notice.
Members who have not cast their votes electronically and who are participating in this meeting will have an opportunity to cast their votes during the meeting through the e-voting system provided by NSDL. Members can click on Vote tab on the video conference screen to avail this feature. Members are requested to refer to the instructions provided in the notice appearing on the video conference page for a seamless participation through video conference. In case members face any difficulty, they may reach out on the helpline numbers. Thank you very much.
Thank you, Mani. The company has taken all feasible efforts under the current circumstances to enable members to participate through video conference and vote at the AGM. I thank all the members, colleagues on the board, auditors, and the management team for joining this meeting over a video conference. I hope all of you are safe and are in good health. Dear shareholders, welcome to the 39th annual general meeting of Infosys. It is a pleasure to connect with all of you again, although this time we meet virtually. On behalf of the Infosys board of directors, I want to thank you for taking the time out to join us today. Your support and confidence in us, even in uncertain times like these, drive us to look for more ways to do more and create greater value.
During fiscal 2020, our overall revenue grew 9.8% in constant currency terms, totaling $12.8 billion. With operational rigor and steady focus on expense management, our margin stood at 21.3%. The value of our large transformation deals stood at $9 million, and our digital revenue in constant currency terms grew by 38%. The board of directors has recommended a final dividend of INR 9.5 per share for fiscal 2020. Coupled with an interim dividend of INR 8 per share paid in October 2019, the total dividend payout for the year was INR 8,120 crores. Our earnings per share grew by 8.3% in U.S. dollar terms. The board of directors has recommended the appointment of Uri Levine as an Independent director of the company effective April 20th, 2020.
Uri is a much admired serial tech entrepreneur with extensive and in-depth business understanding of emerging technologies and will bring tremendous value to the company. D.N. Prahlad has stepped down as an Independent Director to devote more time to his other business commitments. Earlier, in February 2020, Roopa Kudva retired from the board of Infosys as an Independent Director after the completion of her tenure. On behalf of the board of directors and on your behalf, I place on record our appreciation for the services rendered by them during their tenure. The COVID-19 pandemic is extraordinary and unprecedented. It has impacted the world and every country, business, and individual. These are not easy times for any of us, and all our clients are dealing with several challenges as well. For instance, retailers have been hit hard in the non-grocery, apparel, lifestyle, and fashion sections. Travel and hospitality have greatly slumped.
Bankers will have to deal with deferred loan payments. The insurance sector is compelled to charge lower premiums in some categories, and manufacturers must manage both demand and supply hurdles as they repair their broken supply chains. Media and entertainment is impacted because of reduced outdoor activities and shrinking ad spend. A 5G projects and adoption will slow down as well, as corporates begin to reconsider their capital allocation. From building more flexible supply chains to urgently enhancing e-commerce offerings and supporting new models of employee experience, so much needs to be done to accelerate recovery and resilience. Technology is essential to get it all working, the efficiency of automation to make it viable, and experiential design to unlock more value from this. With all of that, we can help them become more responsive to the changing context and develop live enterprise capabilities.
We have already pivoted our resources to the new needs of our clients and strengthened our expertise in cloud, workspace transformation, and smart automation to be able to help them accelerate and scale their digital endeavors. Much of the confidence that we can deliver comes from our own digital transformation in the past two years, guided by the Navigate your Next strategy articulated by Salil Parekh, our CEO and MD. This has amplified our capabilities with virtual workplaces, secure polycloud environment, microservice services for our digital platforms, curated offerings in our service store, and tools for remote collaboration. All these are our strengths as a live enterprise.
With the strategic steer from our COO, Pravin Rao, and the global senior leadership, these same strengths helped us prioritize the safety of our workforce. Through the pandemic, enabling 93% of our over 240,000 employees across 46 countries to work from home in just a few weeks. Our remote access infrastructure was expanded 10x for virtual private network bandwidth, and back-end capacity scaled by 4x to support the increase in concurrent connected remote users. Officially provided devices, as well as personal ones, were enabled with wireless connectivity to let our employees securely connect with our office networks. Cloud-based remote audio, video, and content collaboration platforms are integral to this setup. The InfyMe application continues to connect all Infosys employees to the latest company updates, from advisories to policies and other company benefits, while also allowing them to self-declare their health status.
In Mysore, over 9,000 trainees and interns have relocated to their homes from our residential Global Education Center. They're all enabled to continue training on our digital learning platform, Infosys Lex. In addition to bite-sized online content, Lex brings trainer-led lessons, a hands-on lab environment, and even proctored internal certifications all virtually to the homes of our learners. Our clients continue to take advantage, albeit remotely, of our digital delivery centers in the Europe, Asia, and in U.S.. To meet the growing demand for direct in-market engagements, in early FY 2020, we added a new center each in Arizona in the U.S. and in Düsseldorf, Germany. Encouraged by the strong traction we are seeing for a global network of digital studios, we added to the chain an experience design and innovation studio in London. This year, we surpassed our Spring 2017 commitment to hire 10,000 American workers.
We also hired over 19,000 college graduates from campuses in India. The post-cloud era is bringing our industry the opportunity to do so much more. Infosys this year was recognized as Microsoft Global Alliance SI Partner of the Year, largely because of the significant influence we have over Microsoft Azure consumption with our clients. We also continue to grow solutions on Amazon Web Services to help our clients fast track their digital transformation on cloud. We expanded our relationship with Google Cloud to become the qualified managed services provider and grow in our ability to provide industry-specific solutions on Google Cloud Platform. In addition, Infosys has become the first global systems integrator to join IBM's new public cloud ecosystem. This collaboration will help our clients, including those in highly regulated industries such as financial services, insurance, and healthcare, to benefit from public cloud.
Our acquisition of Simplus, one of the fastest growing Salesforce platinum partners in the U.S. and Australia, further accelerates our enterprise cloud capabilities. Over the last few years, we have made huge investments in making Infosys stronger and more resilient. These investments have positioned us very well, and this is demonstrated in the way we are responding to the COVID-19 pandemic. Combining the scale, brand, and relationships of a large company with the speed, responsiveness, and agility of a startup, we are confident of tiding through this global crisis. Our robust balance sheet, steady growth momentum, digital systems for our people, and our executive team unified in their focus on strategy execution are the advantages that are clearly working for us. On behalf of the board, I want to assure you all that we will spare no effort to build on this foundation to emerge stronger in time.
We remain indebted to the generous guidance and support of our partners, clients, co-founders, and governments of the several countries and states that we operate in. I'm grateful to you, our shareholder, for your continued trust in us. Thank you. Warm regards, Nandan. I now request Salil, CEO and MD, to address the shareholders.
Thank you, Nandan. Good afternoon again to all the shareholders that are joining in. I will take a few minutes to share with you our journey in financial year 2020, and then give you a little flavor of how things have developed in just the last few weeks as well, and a glimpse of where we are going in the future. The way I'm trying to define this for the session, first, it's about our successful financial year 2020. Second is about the stability that we have seen in the time of crisis. The third, to show and demonstrate our live enterprise concept very much in action. In terms of how financial 2020 was and the way that we made a difference with our clients. First, we had excellent growth. The growth was 9.8% for the full year.
We had a strong operating margin. Even better, our earnings per share grew very strongly at 8.3% in dollar terms. Our digital revenue was excellent, far in advance of where the market is. More critically, of our overall company, the digital business is now well over 40% and becoming bigger and bigger. We had put a lot of efforts into large deals, and those came in at over $9 billion, just at $9 billion, for the year. Our company today is $12.8 billion in size, 240,000 employees across 46 countries. One of the things we had started a few years ago was our digital journey. In this digital journey with this pentagon, which is something we use inside the company extensively, with our clients every day, and also with everyone outside in terms of analysts, show how we think about digital.
Both the digital revenue growth has been accelerating, if you look at the difference between financial year 2019 and financial year 2020, and the percentage of digital in our company is going up. We know this is a business that our clients are really close to, and the more we pursue this, the more we relevant for their future. In support of these and as a result of these, we have seen our overall growth accelerate across the last two years from where we were, and we plan to maintain this as we come out of the crisis as well. What is even heartening is the way we are focused on our large client accounts and relationships. Here, we track relationships which yield more than $100 million per year, relationships which yield more than $50 million per year.
You can see a clear and steady progress that your company has made in building, maintaining, and expanding these relationships. We've all talked about how the large deals have and this is also heartening to see that what we had as a very strong foundation, we've then built upon it in the previous year, in financial year 2019, and further scaled it in financial year 2020 to have a solid engine for large deals momentum. In summary, our financial performance is strong. Here, I want to share some of our numbers in rupees to show all of the movement in income, in profit, and EPS in rupee terms as well. As we have done all of this, we have got tremendous recognition from the outside world, beyond the numbers and beyond the financial metrics. We have been ranked number three by Forbes as the World's Best Regarded Company.
This is truly something everyone within Infosys has a huge amount of pride, and everyone outside, including all of our shareholders, should feel tremendous joy to see the company having received this. We won a UN on Global Climate Action, again s omething that was started 10 or 15 years ago by the founders as a really leading mission is something we are proud that the company continues to do and build upon. We've also received awards from our partners like Microsoft, from independent analysts like Gartner and IDC, and in many different fields. I've given just a few examples here, these are in a number of different fields that we are starting to perform and have been performing in a leading way. I want to share something to give you a clear view that we are in excellent financial strength as we closed the year.
We had $3.6 billion of cash on our balance sheet with zero debt. We provided $1.1 billion of dividends financial year. A critical measure, 97.8% of our revenue comes from non-rupee currencies, mainly U.S. dollar, euro, Australian dollar, and the U.K. pound. To give you a little bit more detail on the balance sheet, you can see that it's strong, it's debt-free, and it's liquid, something which is very important when one enters a crisis of the nature we are in the middle of. Here, I want to share a little bit about how we have returned capital to our shareholders.
In fact, we expanded our capital return policy through the financial year and made it spread out over five years to make sure we're doing all the right measures of returning capital across a five-year period. We remain committed to this. This is something that we are quite proud of in returning the capital to our shareholders. As a consequence, we have built an extremely strong foundation for our future success. In addition to having a good year in financial year 2020, we are preparing a foundation for the future years so that we remain as strong in the market as we've been. We have the trust of our clients, relevant services, especially on the digital side. We have an extremely motivated team of employees. We have an aligned leadership team that is working hand in hand and working together for the better of the company.
As March came upon us, at the end of March, the crisis started, and we have maintained an absolutely laser focus during this crisis so far. We very quickly moved our attention to some new and very limited few priorities. The first amongst them was employee safety. The second, we wanted to have absolute stability in delivering our work for our clients. Third, we could sense that the clients were looking at new things, and we wanted to shift to those needs. Of course, fourth, we wanted to be even more careful with our cost and expense as we entered the crisis. Even if we had a strong balance sheet, we did not want to take any chances. First, on employee safety, that is the most critical element for us. Our entire team, led by Pravin and everyone in the leadership, put this absolutely into motion right away.
We have social distancing, masks, increased sanitation, temperature checks, and a variety of measures which we have implemented within our campus to make sure everything for our employees is safe. We already have 99% of our employees working effectively with technology enablement, thanks to the foresight that the company had some years ago and the investments that were made in the infrastructure, and then the rapid way we could, in a modular manner, expand that infrastructure. On this slide, I give just some examples without reading all of them, of the detailed positive comments that I, our own team, all of our leaders have received from hundreds of clients of the company. It is actually quite touching to see how the clients reacted in the way that the company has supported the clients, and therefore a feeling of depending strongly on the company.
Then, we noticed that clients are looking for new things in this environment. One of the things that Nandan mentioned was the quick agility, quick reflex, even if it's a big company. We have now looked at what is the client's need on cloud and digital. To give you one example, in a discussion I was having overs ight [inaudible] with a CEO of a company two weeks ago. They made a statement, taking 24 months to do in a digital transformation program. They want to finish in the matter of two months. This is the speed that our clients are now looking for. We are ready to help them. The second, as we are being careful with our cost and expenses, our clients are similarly careful with their cost and expenses. With that, we have seen an increased use of automation that we have put in place.
Third, because of the strength of what we have done recently and the long history of trust that our clients have with us, in addition to the financial strength of the company, many clients are looking at consolidations, and we feel we will be well-positioned to take advantage of that. In this crisis, we are also operating with tremendous agility. We are able to continue our work on service delivery, on transitions, on even sales activities with our clients in a new contactless method. We've adopted huge amounts of reskilling across the company in the platform that Nandan was sharing with you, and in many ways, making it very important for the individuals to reskill. We've also developed an agile methodology which we've launched and expanded across the company. Those things are making us more ready for the future.
We launched a localization component of our strategy, which allows us, in addition to the depth we have in India, to build a more resilient business in different geographies and help us navigate better in the new and changing visa regulations. While we are doing all of this in terms of business, we continue to remain committed to the communities that we operate in and that we are involved in. The Infosys Foundation in India is absolutely a leading example of the sorts of work that is being done, whether it's in the or whether it's in food, whether it's in rural development. The list is extensive and very detailed and exhaustive in the way the support is provided.
We've also started on a small way in the U.S. with our foundation activities. We did some small activities in the U.K. as well in this financial year, given what was going on in the country. Again, as a consequence of all of these actions and the strength of the company, our expectation and my expectation is we will emerge stronger from this crisis on a good momentum. We believe keeping all the attention we have, we will emerge with a good momentum. Second, we have changed the direction to make sure we are focused on employee safety, on clients' needs, and the client service delivery. We have, with our actions, increased the trust that our clients have with us. The commitment and motivation of employees remains strong, and our leadership is quite focused and aligned.
In conclusion, we had a successful financial year in 2020. We have stability during the first few months of the crisis. We are convinced that we will emerge stronger from this crisis. I really want to thank you all for your continued support, dear shareholders. Give us the guidance and the support and the voice to make sure that the company continues on its journey into the future. Thank you, and back to you, Nandan.
Thank you, Salil. I now request Manikantha, our Company Secretary, to provide a summary of the auditor's report.
Thank you. The Statutory Auditors, Deloitte Haskins & Sells LLP, and Secretarial Auditor, Parameshwar G. Hegde, has expressed unqualified opinion in the respective audit reports for the financial year 2019-2020. There were no qualifications, observations, or adverse comments on financial statements on matters which have any material bearing on the functioning of the company. The statutory auditors report on standalone financial statements and consolidated financial statements are available on page numbers 150 and 212 of the annual report. Secretarial audit report is enclosed as annexure five to the Board's report on page number 45 of the annual report. Thank you.
Thank you, Manikantha. As the notice is already circulated to all the members, I take the notice convening the meeting as read. Before we proceed, I am pleased to bring to your notice that as required under the Companies Act 2013, the company has provided you all the facility to cast your vote electronically on all resolutions set forth in the notice. Members who have not cast their vote electronically and who are participating in this meeting will have an opportunity to cast their votes through the e-voting system provided by NSDL. Members may please note that there will be no voting by show of hands. We now take up the resolutions as set forth in the notice. We will open the floor for any question by members after all the resolutions are tabled.
Item number one, adoption of financial statements. The financial statement of the company, including the consolidated financial statements for the financial year ended March 31, 2020, including the report of board of directors and auditors, have all been provided to the members. Item number two of the notice, declaration of dividend. The Board has recommended a final dividend of INR 9.5 per equity share. You would recall that an interim dividend of INR 8 per equity share was already paid for the financial year ended March 31, 2020. The dividend amount, including the interim, will be INR 17.50 per equity share. Item number three of the notice, to appoint a director in place of Salil Parekh, who retires by rotation and being eligible, seeks reappointment. Item number four of the notice, appointment of Uri Levine as an Independent Director.
The text of the resolutions, along with explanatory statement, is provided in the notice circulated to the members. If any members desires to ask any question pertaining to any item on the notice, he/she may do so now. Members are requested to keep their questions brief and specific. The moderator will facilitate the questions on the video feature. To avoid repetition, the answers to all the questions will be provided towards the end. Members may also note that the company reserves the right to limit the numbers of members asking questions, depending on the availability of time. While the members are queuing up to ask questions, may I request the team to play short videos on building a live enterprise and making of the Aarohan Social Innovation Awards.
[Presentation]
Are you unmuting?
Yep, I am unmuting.
Dear shareholders, thank you for joining our 39th AGM today and for taking time to participate in today's AGM. Before we go live with the Q&A, here are some points to note for your convenience. Kindly turn on your video. When you are projected on the broadcast screen, kindly unmute yourself and proceed to ask your question. Please mention your name, folio number, and the location from where you are joining. Each shareholder will have two minutes for their questions. To avoid repetition, the board will respond to all the questions at the end. Once you have asked your question, you can log off and continue to watch the AGM proceedings. The board will be taking questions on video from shareholders in two or three sets, depending on the number of questions on video. Now we request Mr. [K. Sadananda Sastry] to unmute himself and kindly proceed with the question.
My number is 11702201. I'm coming from Bangalore. Sir, first of all, I have sent an appeal to you for postponement of meeting this COVID period, but there is no response for that one. Why the company is hurriedly convening this meeting, I do not know. What is the reason when this Ministry of Corporate Affairs is so liberal in giving the extension of periods for conducting the meeting? Secondly, sir, it's a question to the chairman. Sir, that is in page number 13, you have said 9,000 trainees from Mysore unit have been sent home. What about the Hyderabad units, sir? Neither you have shown us, nor we have seen that one. That is one pending is there, of course. What about that particular Hyderabad unit? Secondly, there is a question to Salil Parekh.
Sir, in your statement, you have given that is with all cooperation of these officials and the employees, that you have achieved an extraordinary result. What is an extraordinary result? That is only the total profit. That is the implications. This explanation gave it to you in the financial statement. Sir, while appreciating your company's help to the public during this COVID period, I felt sorry. One thing that particularly amid when the people are losing job, livelihood, and their partial salary, they are getting without many, they are looking after that one. But amidst that one, the company has declared a perquisite package to Infosys employees in this period, particularly COVID period. That somewhere I heard that one. Somewhere I have seen that Mr. Parekh has been given a INR 43 crores of package that I do not know whether it is true or not.
The public will think otherwise when this is the position if you broadcast it through paper, it will be a burden to the other peoples also. As well as the public think otherwise and distorts the image of the company. Anyway, now in this aspect, our chairman is poor and our CEO is rich. For that, I will give special wishes to him. Sir, coming to the financial aspect. Sir, I'm not talking about your dividend or bonus shares or rights issues or there is mementos, et cetera. I want to maintain, I want to look after the safety and this one concerned about the strength and stability of the company. Sir, in your financial statement, that is the page number 22- 24, you have given that a profit of $ 16,639 is the PAT t hat is a profit after tax, sir.
So when it comes—
Sir—
When it is comparing to the previous year.
Mr. [K. Sadananda Sastry], we request you to kindly wrap up your question at the earliest.
Only another three questions, sir. They're small questions, please. When compared to that one, there is a growth of INR 1,230 crores that's compared to the earlier. Out of that INR 760 crores. That is interest you have earned on refund orders, as well as this Panama adjustment, other things is there. INR 760 crores goes out of INR 1,230 crores, only hardly INR 470 crores is left over growth. How do you justify that one? It is a great achievement. What is your comments were my comments? Lastly, still some of that your subsidiaries are running under loss. Last time how it is already sounded in the last AGM. What is your strategy? That is even Shanghai also, that is enemy country, Shanghai also it is pending. What is your strategy to bring it to the positive line, sir?
Sir, I am very much particular about the last item of your P&L, that is other expenses. Nowhere I have seen here, because some companies are loading some unallocable expenditures also. It's not available to see that one. You please, Mr. Manikantha will send afterwards the copy of that one, that I will use it for my ensuing AGM, sir. Sir, lastly, sir, this is the AGM. Some of our members are making use of this one, sir. I think there is no answer for that one. Anyway, I told you that one. For that one—
May we request you to kindly wrap up your question.
Okay. Lastly, it is a COVID period. That is more anger will be there. I will conclude this one. This is my comments. Thank you very much. Good luck. Good evening. See you at our, this is Christ College, during next year physically. Thank you very much, sir. Thank you very much.
Thank you for your question, sir. We have noted your questions, and the board will answer at the end of the session. Thank you. Now, we have a question coming in from the next shareholder, Mr. [Anish Hegde]. Please go ahead with your question.
Hi, I'm Anish joining from Bangalore. My DPID is 1208160016224236. I have two questions. Since most of the employees are now working from home, and Infosys being the lead has enabled more than 90% of its workforce to work from home. WHO also recently released a report saying there is a more than fivefold increase in the number of cyber threat. In this regard, the company has issued directives and the company has issued guidance to employees working from home as to how to protect their security. Seeing as how this brings about more security risk and more cost, what is the additional framework that the company has set up in this place to ensure that the data is secure, seeing as how the WHO report says there's an increase in the cyber threats.
What is the additional framework that the company has set up in place to protect its data? Secondly, since the company has also mentioned in this AGM in its annual report that an integrated ERM framework has been set in place, which has strengthened the company's risk policy. Infosys also being a certified ISO 27001 2013 ISMS standard, what is the risk that the company has anticipated or is anticipating from this cyber threat? Because in the annual report, the company has stated in the outlooks that there might be an increase in the cyber threat. In this regard, what is the anticipated threat, or what is the cost of this anticipated threat on the company? Thank you.
Thank you, Mr. [Anish Hegde]. We have the next shareholder lined up. We request [Manoj], kindly go ahead with your question.
Good evening. Thank you for the opportunity. My name is [Manoj] from Bangalore. My DPID is IN303028. My question is regarding the workplaces. Much has been said about work from home, work from anywhere, and all that. Given that Infosys has always prided itself on having a world-class campus experience for its diverse workforce and for its clients, would there be any change in this strategy in light of the times we are in? Thank you very much.
Thank you, Mr. [Manoj]. We have the next question from another shareholder. Mr. [Bijnan], kindly unmute yourself and ask your question. Mr. [Bijnan], if you can go ahead and ask your question, please. Mr. [Bijnan], we can't hear you. Mr. [Bijnan], we have trouble in hearing you. I think there is some connectivity issue. Can you re-log in and ask your question? We'll be taking the questions from other shareholders. You can kindly re-log in and come in the queue. We have next question coming from Mr. [Naveen]. [Naveen], kindly unmute yourself and ask your question. [Naveen], we can't hear you. Kindly unmute your mic and ask your question.
Thank you very much for the opportunity. Yes. Hi. Thank you very much for the opportunity. Sir, I have few set of questions. First is, recently we have a news of H-1B and H-2B and other visas which are banned by United States. What would be the impact on, you know, company Infosys? Will there be any change in the business models due to this visa ban? Second question, there is prevailing, you know, tensions between U.S. and China. Right now, will Infosys be benefited from this tensions? Will Infosys get more business because of this tensions? Third, right now, of course, there is tensions between India and China as well now, presently. What would be the impact for Infosys? Third question is, as recently on May 22nd, 2018, you have acquired the company by name WongDoody Holding Company. Are you planning for future acquisitions?
Are the operations smooth for this particular company, because this company is in U.S.. Are the operations smooth enough for this particular company right now? Because this company is right now in U.S. And, just last question which I have to ask is, we had heard a news about the Neiman Marcus, one of the company named Neiman Marcus of U.S., which had closed 40 retail stores. Will there be an impact on Infosys? Same for JCPenney also. They were our clients. That's what I wanted to know. My ID is, I'm sorry, I did not mention my ID, 1208160011915976. I am calling from Mumbai. Just these four questions. Thank you very much, sir.
Thank you, Mr. [Naveen].
Yeah.
We have the next shareholder coming in. Mr. [Anjai], kindly unmute yourself and ask your question. Mr. [Anjai], can you hear us? I think we have some trouble with [Anjai's] connection. Can we have the next shareholder, please? Mr. [Sudhir]?
Yeah.
Yeah. Please kindly go ahead with your question.
Yeah. Good day, everybody. Congrats on efforts in these trying times. Thank you for taking my query. I have two sets of query. One is on growth and business continuity. Part of that is Infosys growth rate has come down significantly over the years compared to before. Shouldn't there be some out-of-the-box thinking or steps to ensure much better growth rates than these last years? Next part is, what is the expected revenue impact growth in dollar in FY 2020-2021? How does the new H-1B visa rule affect Infosys performance from year on? When can the company go back to EBITDA margins in excess of 26%? The next set of questions is on products and platforms. Shouldn't the company increase focus on products, platforms, and productize domain expertise, making this a percentage of total revenue target and a five-year plan?
This percentage can be measured year-on-year vis-à-vis the total revenue for the whole company and can be verified with stated goals. The next part is, can we also produce software consumer products like Microsoft, et cetera, and also be a B2C company? Next one is, how much is being spent each year as a percentage of sales on innovative technologies, products, and platforms? Thank you for taking my queries.
Thank you, Mr. [Sudhir]. May I request the next shareholder to go ahead with the question, please. Mr. [Arockiaraj], kindly unmute yourself and go ahead with your question. Mr. [Arockiaraj], kindly unmute yourself and go ahead.
Yeah.
Go ahead with your question, sir.
Yeah. Thank you for the opportunity that you have given for me to speak over here. What are all the plans that Infosys is having in 2020-2021 to improve the overall profit percentage? That is my question. Thank you.
Thank you, Mr. [Arockiaraj]. May I request the next shareholder to go ahead with the question, please. Madam, kindly go ahead with your question. Ms. Suchitra. Ms. [Suchitra], can you hear us? Ms. [Suchitra], can you hear us? I think we have some trouble from the line of Ms. [Suchitra]. Can we take the next question, please? Ms. [Vasudha], can you kindly unmute and go ahead.
Yes, sir. Good afternoon, sir. I have only one question. What is the impact on company's business in India as well as U.S. due to COVID-19 pandemic situations? Secondly, what are your future plans to work on this pandemic COVID-19 situation? I hereby support all your resolutions. Thank you.
Thank you, Ms. [Vasudha]. Can we have the next question, please? I think that was the last question from this set of shareholders. We'll come back with more set of questions shortly. Hi. We have next set of questions from the next batch of shareholders. We have one question from an audio line from Mrs. [Patel] from Mumbai.
Hello.
Madam, can you hear us? Kindly go ahead with your question.
Good evening to all of you.
Good evening, madam. We can hear you. Kindly go ahead with your question.
Yes, sir. I would like to wish everybody a very happy day. Good evening to all. This is 39th AGM, and all your people, Rakesh, Pooja, Mr. Girish, they have taken excellent, very good trouble. Yes. It is not for the first time that in Infosys that we are talking from Mumbai. Every year, except the last year, we have been talking with you all from Mumbai on and off at the AGM. It has been very excellent for giving me this opportunity to speak over here. I wish the company and everybody all the very best. I even wish Manikantha and even our Rekha. Please give special regards to her. Now I put forth my questions. Sir, economic downtrend is the best time for new acquisitions.
Where does Infosys stand as far as new acquisitions are concerned during this pandemic lockdown? Can high cash be utilized for buying shares of other companies as an investment, not as an acquisition? Hello?
We can hear you. Kindly go ahead with your questions.
Yeah. Can high cash balance be utilized for buying shares of other companies as an investment, but not as an acquisition? At least 5%-10% of the cash base, which can be utilized by the company. Next question, how many off-roll employees are there as far as your company is concerned, Infosys? What is the impact of employee productivity in this pre-COVID vis-à-vis post-COVID period, lockdown period, in the top line and bottom line in it? How much lease rental expense as a percentage to the income and profit of the company? What is the estimated reduction in cost of lease rental due to work from home policy? Any new business verticals or opportunities which Infosys proposes to venture? I wish the company all the very best, the management team, all the very best. Thank you for dividend INR 9.5, though I feel it is a little less.
Of course, ups and downs are always there. Yes, I also wish Mr. Uri Levine, if he is here at this meeting, welcome, Mr. Levine. I suppose that you have come in place of Mr. Prahlad. Mr. Levine, you have said FeeX, FairFly, Refundit . By any chance are you going to implement this even in our country? It would be great if possible.
Let me request the vendor after four minutes.
I support all your resolutions. I thank everybody for their excellent help and support, and wish good luck to all. Thank you very much.
Thank you. Can we have the next question from Mr. [Anjai Ramesh]? [Anjai Ramesh], kindly unmute yourself and ask your question. Mr. [Anjai Ramesh], kindly unmute yourself and ask your question.
Good day. Hope I'm audible to all.
Yes, you are audible. Kindly go ahead with your question.
Thank you. First of all, thank you for giving me this opportunity to speak at this AGM, the 39th AGM of Infosys and the first EAGM of Infosys due to this corona era. Straight to the questions. Due to the paucity of time, I'm not taking much time. Actually, I don't have any questions as such, but I have a few suggestions which the management and the board could look upon. First thing, during this COVID era, please make sure all the stakeholders are wellbeing. [inaudible] No layoffs. That reputation of the company will be at the best. Second thing I would like to tell is that you can work on the existing workforce and implement more skills in them. That is the second suggestion.
Third, I would like to suggest that you could see more on the CSR side, which would help the country and the world as a whole. Since Infosys is a global company, I would request you to have more emphasis on the CSR side, because as the balance sheet, as on the side of economics or the financials of the company is very strong. I hope the COVID cannot impact much on this. Best wishes to all the management and the board of directors. Thank you for this opportunity given to me. Thank you.
Thanks, Mr. [Anjai]. Can we have next question from Mr. [Bijnan], please? Mr. [Anjai], if you can log off and continue in the broadcast, please. [audio distortion] shareholders joining from audio. We request the shareholders to kindly go ahead and ask their questions. Can we have the first shareholder on the audio question, please?
Yes. This is [Mukund Deshpande].
Mr. [Mukund Deshpande], kindly go ahead and ask your question. Mr. [Mukund Deshpande]? Mr. [Mukund Deshpande]? We have trouble hearing you. Kindly [audio distortion].
[inauible]
Do we have any other shareholder on the audio question?
Page one.
We have the next shareholder lined up for the video question. May I request to turn on the video, and then we can take the question by Ms. [Suchitra]. Ms. [Suchitra], kindly unmute yourself and ask your question. Ms. [Suchitra]? Ms. [Suchitra], are you asking your question on the audio? Ms. [Suchitra], you need to unmute yourself and ask your question. I think there is some issue. Ms. [Suchitra], can you hear us? We have some connectivity issue from Ms. [Suchitra's] line. Can we take the next question from the next shareholder? Mr. [Abhirup Nandy]. Mr. [Bijnan]? Mr. [Bijnan], have you joined the audio line, please?
Right, sir. May I continue?
Mr. [Bijnan], kindly go ahead. We can hear you very well. Kindly go ahead with your question.
Do you hear me, sir?
Yes, sir, we can hear you very well.
I'm audible?
Yes, sir. Please go ahead with your question.
Mr. Chairman, sir, member of the board, my investor friend, and ladies and gentlemen, I am C.A. B.S. Srimal. I am extremely grateful to Mr. Nilekani for giving us the opportunity to interact in the proceeding of this AGM and share our views and suggestion. I am sure Mr. Chairman would take it in proper perspective and would respond fully so that we go back fully informed. I am also thankful to my fellow investor, who have taken their time out to actively participate and share their views and suggestion to make it more lively. Sir, I happened to talk to your Company Secretary, Mr. Mani, yesterday, and he made a remark while talking that the COVID-19 has thrown up this opportunity to organize AGM on virtual mode.
I cannot but more with disagree with him that it was definitely open up the opportunity to participate at the AGM by the investor who reside outside the purview of the company's registered office. While in the subject, sir, could you tell us what is the expenses of conducting the meeting on virtual mode vis-à-vis physical mode? Let me now share a few of my thoughts and suggestions. I would like to offer my thanks to the Chairman and CEO, Mr. Parekh, for producing a reasonably good result under the prevailing circumstances, when we find there is a downward trend in the economy, and also for rewarding the investor in various counts. Going forward, I would like to take up the dividend payout, which is dear for all the investors. The company has declared dividend to the tune of INR 17.50, 53.2% compared to INR 21.50, 68.8% last fiscal.
Could we hope, sir, for better dividend payout in the current year? I would also like to point out the draconian provision of the Companies Act 2013, wherein if dividend remains unclaimed, the shares would also be liable to be forfeited. Hence, the management as well as the investor should be very proactive in this regard, so that the shareholders don't miss to claim their unclaimed dividend. In view of the present visa policy of Trump administration, what could be the impact on our company? In page 26, revenue per employee is lower compared to previous year. Steps initiated by the company for rectification. Could you, sir, enlighten us about the present position of two subsidiaries shown under head for sale, and for which INR 265 crore + INR 469 crore was provided in last year's account, their current position.
While in the subject, my attention is also drawn to page 34, where I found about 19 subsidiaries shows nil turnover, and about nine subsidiaries are running at a loss totaling to INR 420 crore approximately, out of the total 73 subsidiary company we have. What is the management view and action envisaged in this regard, sir?
Mr. [Bijnan]—
[audio distortion]
Mr. [Bijnan], I request [audio distortion] .
Hello?
Mr. [Bijnan], can you kindly wrap up your question at the earliest, please?
Yes. In profit and loss account, INR 114 crore is for the finance charges. What is that about and its next year's estimate? There appears to be a definite trend of this [inaudible] combination in India. Same is also pursued by the government and digitization in India, and same is also pursued vigorously by the government, and augmented by the present pandemic, how the company could get benefit out of this trend. In this respect, my attention goes to page 24, wherein I found that current year's digital segment has grown by 2% and core segment fall 8%. What is your current projection in this regard? Sir, with this, I would like to conclude and thank you very much for giving me the patient hearing. Thank you so very much.
Thank you, Mr. [Bijnan].
Thank you.
Do we have the next audio question, please? Mr. [Abhirup Nandy], can you hear us? Mr. [Abhirup Nandy], kindly unmute yourself and ask your question. Mr. [Abhirup Nandy]?
We have the next question from Mr. [Tamal Kumar Majumder]. He's on video. Mr. [Tamal Kumar Majumder], kindly go ahead and ask your question.
Hi, this is [Tamal Kumar Majumder], an Equity Shareholder from Kolkata. I have some questions about audited accounts and other matters. My first question, our operating margin is decreasing every year. From 25% in financial year 2016, it became 21.3% during financial year 2020. Yes.
Mr. [Tamal Kumar Majumder].
[Tamal Kumar Majumder], Equity Shareholder.
Yeah, kindly go ahead and ask your question. We heard the first part of your question.
Would you please share your thoughts in this respect and your expectation for the current year? My second question is, Infosys recently announces permanent work from home for 30. Yes. Yes, I am saying, sir.
Kindly go ahead, sir. Kindly go ahead and ask your question.
Is it okay, audible?
Yes, we can hear you.
Is it audible?
We can hear you.
Okay.
Kindly complete your question.
Okay, sir. Infosys recently announces permanent workforce from home. Third is, recently Moody's has also lowered-
[audio distortion]
Sir, I am asking question. Already two questions I asked. My third question is, recently Moody's has lowered Infosys rating from BAA-1 negative from A3 negative. The agency said that Infosys rating can be further downgraded if it undertakes material debt-funded acquisitions or increased return to shareholders. Whereas in page 85 of the annual report.
Kindly go ahead, sir.
Yes. My third question.
Thank you, Mr. [Tamal Kumar Majumder], for your questions. Kindly log off and continue to watch the proceedings. May request the next shareholder to go ahead and ask your question. Kindly unmute yourself and go ahead, Mr. [Jaydip]. [Jaydip], kindly go ahead and ask your question.
Good evening, Chairman.
Yes, we can hear you.
Good evening, Chairman, board of directors. Thanks for the dividend passed on to the shareholders. Sir, company managing continuity of business by the work from home in this era of crisis. Will this continue this system in the normal conditions? Sir, the recent crisis has accelerated clients more along digital activities like planned scheduling, cost reduction, and reducing idle time. Hope our company will seize this opportunity to serve the changing needs. Are we planning to spread globally outside 46 countries? Sir, due to COVID crisis, are there any plans for layoff or planning for three days of work schedule like that? Sir, that's all from my side, and best wishes to the management and staff for the coming days with better results. What future plans do you have? Any future plans like that? Thank you, sir.
Thank you, Mr. [Jaydip]. Mr. [Adil], can you hear us? Kindly unmute your line and ask your question. Mr. [Adil]? Mrs. [Homayun]? Mrs. [Homayun]?
Yes.
Mrs. [Homayun]? Mrs. [Homayun], we can't hear you. Can you kindly speak or unmute your line?
You hear me?
Yeah. Kindly go ahead and ask your question. Mrs. [Homayun], you have to unmute yourself.
Yes.
Kindly unmute yourself and ask your question.
I'm [Homayun]. Yeah, can you hear me now?
Yes, madam, kindly ask your question.
Can you hear me?
Hello.
Yeah. Hello.
Yes, we can hear you. Kindly ask your question.
Like to know this lockdown, how has it affected us? I just want to know to what extent it has affected us. One question. Secondly, I want to know our subsidiary in China, will this war between India and China affect our work in China? I would just like to know. Are you planning to close down because in the beginning, or was it running in profit? I would like to know. Regarding recruitment, have you done any new recruitment? Was there a need to do new recruitment, or were you about to do and you have kept on hold because of this lockdown? We are proud of Mr. Nandan Nilekani. We are proud of all our directors. Mr. Nandan Nilekani was the founder of Aadhaar card system. In fact, we are proud of all our directors. They are all great authorities in their own respect.
Sir, we came to know how many countries you are located, we just wanted to know. Regarding H1 visa, somebody else has also mentioned. Sir, how will it affect us? Will there be changes? Sir, Mr. Trump claims he's a friend of Mr. Modi. Sir, Mr. Modi's citizens should not be treated like this. We should be helped, because without H1 visa, sir, our very good intelligent people will not be available to the Americans. Sir, now I'm concluding my questions. Sir, I'm handing it over to my husband, because, sir, we are speaking on the same mobile. His name is [Beruh Pouredehi]. Sir, he may speak for a few minutes with your permission.
Kindly hand over.
Hello. Yeah. Thank you very much. Sir, I would like to ask you that in how many countries are we located, 46 countries or more than that? How many employees we are having totally? Because TCS is having more than 400,000 employees. Whether Narayan Murthy is taking keen interest in our company, because he was the original founder with the support of Sudha Murty. The Infosys Foundation is doing very fantastic work. Sir, we would like to know how this pandemic situation has affected our, this profits. Sir, we would like to ask you which sector is doing the maximum profit in banking, finance, insurance. So we would like to know. Sir, we support all your resolutions, and we have already visited your Bangalore unit, and even Mysore unit also we have visited.
Long back. We are very old shareholders. We used to attend your AGM when Niladri Prasad used to conduct at ITC Maratha and subsequently at Four Seasons. We are very proud that we are able to get in connect with you and have our, what you call, maximum in touch with you. We would like to support all your resolutions, and we wish our company all the best, and you keep on giving maximum dividend, because our company that on Friday it has gone from 700 to 747. It is share price has rocketed because of Accenture. All the IT companies are doing very well, and we hope that our number two slot in the IT sector will reward us, all the shareholders. Sir, we wish our company all the best, and we hope to see better days ahead.
Thank you very much, and give our regards to Narayana Murthy and Salil Parekh. Sir, we hope to see you next year physically. Thank you very much. Sir.
Thank you, sir. May I request the next question to be taken by video? Mr. [Adil]. Mr. [Adil], kindly unmute yourself and ask your question. Mr. [Adil], kindly unmute. Yeah. Mr. [Adil], we can't hear you. Kindly unmute yourself and ask your question. I think there is a poor connection from Mr. [Adil]. Mr. [Adil], we'll take your question next time. Probably you can come reconnecting, and we will take the question. Meanwhile, may I request Mr. [Santosh] to unmute himself and go ahead with his question?
Sir, my name is [Santosh Kumar Saraf]. Are you hearing me, sir?
Yes, sir. We can hear you. Kindly go ahead with your question.
Sir, my name is [Santosh Kumar Saraf]. I'm from Kolkata. I would like to thanks the board of member and CFO for their achievement through the year in spite of business difficulty faced due to pandemic. Second, I would like to thank Mr. Ramchandra, Mr. Roshni, Mrs. Roshni for their effort in a nice drive and personally support us with all technical issue and query. Sir, I would like to thank for good dividend by company at the rate of INR 7.50 for this year. With regard our respected Prime Minister vision for making India a self-reliant nation, is there any extra incentive that Infosys is taking in its capacity as Infosys being one of the reputed indigenous organization? Thank you for allowing me to speak today, and wishing everyone to safe. Hope meet you all in person next year. Thank you.
Thank you, Mr. [Santosh]. Can we have the next question on audio? Ms. [Suchitra]. Ms. [Suchitra], are you there?
Yes.
Thank you. Go ahead and ask your question, madam.
[Non-English content]
Thank you, Ms. [Suchitra]. Can we have the next question on the audio, please? Mr. [Abhirup].
Good afternoon. Am I audible?
Yes, sir. Kindly go ahead and ask your question.
Sorry, there was some video error from my side. I apologize for this. My questions would be, sir, you have two subsidiaries, Infosys Technologies Shanghai Co Limited, that is in China. It is a 100% subsidiary. It has been posting continuous loss. Also you have Infosys Consulting Shanghai Co Limited. That is a less material subsidiary, but that also has a negative equity. What are the reasons for such continuous loss, and what are the strategies ahead with these China companies? Sir, you have invested INR 1,335 crores in Infosys Nova Holdings instead of directly investing in Outbox Systems Incorporation. What is the logic behind directly not indirectly investing through Infosys Nova Holdings? Sir, proud to have our company getting certified by ISO 27701. Sir, really a great achievement.
I would also like to really appreciate the way you have expressed open-heartedly the risk related to current COVID situation. We shareholder are absolutely agreeing with and we are prepared for it, hoping that management will give their best. Sir, thank you. There is no complaints regarding your financials. It has been very well disclosed. Sir, as per Audit Committee, you are having exactly three members. Since it is a very important committee of our entity, are you looking ahead to increase one more member? Because three is the minimum, you're keeping the minimum. Still, if required, you may consider keeping one more member for Audit Committee. Thank you, sir.
Thank you, Mr. [Abhirup]. Can we have the next question on audio, please? Mr. [Santosh Kumar]. Ms. [Kirti Shah]. [ Kirti Shah], kindly go ahead and ask your question. We can hear you. [Kirti Shah]? Can we move to the next question, please? Mr. [Sharath Kumar]. Okay, I think we have few shareholders lined up on the video. Can we take the question from. Yes, Mr. [Adil]. Kindly—
[audio distortion]
Thank you, Mr. [Adil]. Can we have the next question from an audio link, please? Mr. [Sharath Kumar]. Mr. [Sharath Kumar], kindly unmute yourself and ask your question. Mr. [Muralidharan]. [Kirti Shah], if you can unmute yourself and ask your question. [Kirti Shah], kindly unmute yourself and ask your question.
Yeah. Hello.
Yes, we can hear you.
Are you hearing?
We can. Yes, kindly go ahead with your question.
Why our PE is? [audio distortion]
Mr. [Kirti Shah].
Why our PE is very low compared to industry? Hello?
Mr. [Kirti Shah], kindly go ahead with your question.
Why our net profit margin is 35% in two years? Hello?
Sir, we can hear you. We heard your first question.
Last year [audio distortion] 66%. Day by day margin. What you are taking, and what step you are taking for this PE? Why our PE is lower than industrial PE? What are you doing for the betterment of the shareholder? What you plan for the betterment of shareholder now? I already said on [audio distortion].
Thank you, Mr. [Kirti Shah], for your questions. Can we move to the next question on audio bridge? Mr. [Reddappa], can you unmute yourself and ask your question, please? Mr. [Reddappa], kindly ask your question. Can we move to the next question, please? Can we have Mr. [Sharath Kumar]? Mr. [Sharath Kumar], kindly ask your question.
One second, sir. One second. Let the camera get connected.
Mr. [Abhishek]?
Yes, sir.
Mr. [Abhishek], we can hear you. Kindly go ahead and ask your question.
[audio distortion]
Mr. [Abhishek], you can kindly go and ask your question. [crosstalk] Looks like there is some connectivity issue with you. We request you to kindly go ahead and ask your question on audio.
Shall I start, sir?
Yes, sir. Kindly go ahead and ask your question. Mr. [Abhishek]? I think Mr. [Abhishek] is in a bad network area. We request him to kindly rejoin and ask the question. Can we ask the next shareholder to go ahead and ask the question? Mr. [Ashok Chakravarthi], kindly go ahead and unmute yourself and ask your question. Mr. [Ashok Chakravarthi]? Can we take the next question from a video question? Mr. [Muralidharan]? Mr. [Muralidharan], kindly unmute yourself and ask your question. Mr. [Muralidharan], kindly go ahead and ask your question. Mr. [Muralidharan], we can't hear you.
Yes. Mr. Chairman, ladies and gentlemen. [inaudible] First of all, I would like to congratulate the entire staff. [inaudible] Without their help, I would not be here now. With the great effort appearing into the role is difficult [inaudible]. First of all, I would like to thank the board for giving me an opportunity to attend to this. Point on this is now, whether we'll be able to get this year. Point number 2, after the COVID, can we get together after the COVID ends. We have on one fine day that will be very easy. The management were excellent. Customer care extended to all the shareholders. They have promptly sent the AGM report. Promptly followed up [inaudible]. In fact, we are very grateful to them. No more anything on the annual report to be pointed out.
Recently, U.S. imposed certain conditions on the H-1B visa, will it affect Infosys and the profit? This issue. This is the report. In fact, I am [R Muralidharan]. There is only one thing I want to say is thank you very much.
Thank you, Mr. [Muralidharan]. Can we have the next question from an audio line, please? [Ashok Chakravarthi]? Mr. [Bharat Raj]? Mr. [Reddappa]?
Evening, sir.
Yes, Mr. Reddappa. Kindly go ahead and ask your question.
Sir, good evening, everybody, sir. My name is [Reddappa Gundluru]. Thank you for this facility. You are giving very good opportunity for the virtual program today, sir. I'm very happy about this meeting, sir. Why? Because I wanted to appreciate our company board of directors, especially Nandan Nilekani. Why? Because he's a troubleshooter. He's increasing our company reputation, higher level, sir. He's a nice person. He's a capable person. He's a deserved person, sir. That's why we are investing more money every year, sir. Thank you so much for the dividend also, sir. Sir, my question is, what is the impact on recently U.S. government and other countries are taking some decisions on H-1B, all other visas? What is the impact on the company upcoming years for the revenue growth? Can you brief about this in this pandemic, Corona?
Upcoming couple of years, what is the impact on the company? Is positive or negative? I would like to know, sir. This is on of company. Another question is Okay, I'm restricting only one question, sir.
Thank you, Mr. [Reddappa]. Can we have the next question from Mr. [Ashok Chakravarthi]? Mr. [Ashok Chakravarthi], kindly unmute yourself and ask your question. Can we move to the next shareholder, please? Mr. [Mukund Deshpande]?
Yeah. Very good evening, all of you. Sir, can you hear me?
Yes, sir, we can hear you. Kindly go ahead and ask your question.
Yeah. Sir, my question is, the present COVID-19 crisis is going on. I will say it is a crisis one, and second crisis tomorrow may face where the problem with China border and other countries. Our management is ready to face the challenges?
Mr. [Mukund Deshpande]? Mr. [Mukund Deshpande], kindly unmute yourself and continue asking your question, please.
Yeah. My question is, present COVID-19 problem is going on. I will say this is a crisis one. Second crisis is tomorrow may we have to face, that is China border and other countries. Management is ready to face the challenges?
Thank you, Mr. [Mukund]. We have noted your questions. Can we have the next question from Mr. [Abhishek], please? Mr. [Abhishek], kindly unmute yourself and ask your question. Yes, Mr. [Abhishek], kindly go ahead and ask your question. [Abhishek], kindly mute yourself. Kindly unmute yourself and ask your question.
Sir, I think I've already raised the question. You have already given opportunity.
Thank you, Mr. [Abhishek]. You can kindly log off and watch the proceedings. Can we take the next question, please, from an audio bridge? Mr. [Bharat Raj], kindly unmute yourself and ask your question.
Mani, let's line up all the remaining speakers and check their-.
Thank you. With this, we conclude the question session from all the shareholders. I hand over back to Mr. Nandan Nilekani.
Thank you for all the questions. While we provide the answers to the questions shortly, I request to play a video which showcases the work done by Infosys team during the last year.
[Presentation]
Hello. We will now begin the answers to the questions. In this round, we are answering the questions that were raised in the web chat. After one round of web chat questions, we will come back with a round of questions from the video and audio questions that were asked just now. The first question I have is: Any clarification on the whistleblower done during the last financial year apart from the stock exchange notification? This is from [Preet Subodhbhai Jadawala]. Answer is: W e have dealt with the matter in accordance with our whistleblower policy. The company cooperated with the investigation by the SEC in regard to the whistleblower matter. In March 2020, the company received notification from SEC that the SEC had concluded its investigation, and the company does not anticipate any further action by the SEC on this matter.
Additionally, the class action lawsuit that was filed in 2019 has been voluntarily dismissed without prejudice. With respect to Indian regulators, the company has responded to all the inquiries received from all the authorities so far. We can confidently say that the matter is closed and that the whistleblower allegations have been dismissed. Second question: Hi, I would like to know Infosys strategy on acquisitions amidst various opportunities that are opening up due to COVID. This is [Kalyan Kumar Guggilam]. Answer is: W e look at mainly tuck-in acquisition opportunities in the digital technology arena, including bolstering our presence in some less represented geographies. We look forward to expand our presence and capabilities in technology of the future. We are also seeing opportunities of the captive takeover area.
Question number three: From long-term prospects, have you or assigned any team or have any plans to identify opportunities arising due to COVID situation? Shareholder name is [Parameshwar Venkatachalam]. Answer: It is clear that enterprises that had moved forward with their digital transformation agenda, leveraging technology, have fared better in this crisis. Technology will be a major aspect of the solution for clients to shift their business models and increase their resilience, both of which are required right now. We are quickly pivoted to offering resilient remote working solutions like cybersecurity, return to workplace, and IT cost restructuring as they have become very relevant to our clients. We are also seeing the acceleration of digital transformation in migration to cloud, automation, and increasing focus on optimizing costs. We are also seeing opportunities for vendor consolidation and captive takeout. Question number four. This is from [Mahesh Bhagwan Makhija].
I would like to know how our company can help our nation and entire universe to combat COVID-19 through various types of technology. Answer: We are conscious of our social responsibility and have contributed to the efforts of governments and communities of the countries where we operate to combat the impact of this pandemic. Our technology research teams are deeply involved in assisting governments in various countries to respond to the pandemic using technology. In India, we're involved in assisting various local administrations dealing with contact tracing. Similarly, in the U.K. and the U.S.A., we're helping to build technology apps and solutions for contact tracing and aiding the healthcare communities. As you know, our Infosys Foundation is doing a lot of work in creating healthcare facilities, ensuring needs of migrant workers are taken care of, and in supporting PPE for healthcare workers.
We are also working with government in Karnataka for setting up call center to track, help, and monitor impacted citizens. As you can see, we're doing a lot of things in the COVID area. Our final question is: My question is about innovation in Infosys. Is Infosys working with any academic or research partners to create low-cost medical equipment like ventilators for COVID? This is from [Sharma Kappaguddu]. Answer: As I said in the previous answer, our technology teams are working across the world, providing technology for contact tracing and other solutions and helping in aiding the healthcare communities around the world. Nothing to do specifically with ventilators. With that, I hand over to Salil to take his questions.
Thank you, Nandan. Dear shareholders, there's a few questions that have come to address. First question: Have you seen any drop or cancellation of large projects from travel and hospitality sector? The shareholder asking, [K. Moideen Ghani]. The answer is: F or us, travel and hospitality sector is relatively small, so we don't expect any material business impact from this sector. Second question: Please brief us about the least affected sector and worst affected sector with COVID and its impact. Will they compensate each other? Shareholder name, [Anita Gandhi]. Answer: Sectors like retail, manufacturing, and the travel and hospitality I just shared are the ones most impacted. Financial services, energy utilities are relatively lesser impacted. Communications, high tech, life science, healthcare have seen actually slightly better opportunities. There will be some overall negative impact as a result of COVID-related decisions in the near term.
In the medium and long term, we see opportunities for clients as they fast-track their digital transformation journey, consolidation of vendors, and some captive activity. Next question: What is the outlook for the first quarter considering the COVID situation and U.S. H-1B visa restrictions? A question from shareholder [Bhupender Nag Modi]. Here, we have seen the answer: We have seen business impact due to deal closures and longer decision cycles. However, the impact is less as compared to what we envisaged in April. Since many of the economies have opened up, there is strong government fiscal and monetary support. We've not seen large cancellations. We've also been able to put in place methods through technology for connecting with our clients that have helped.
We've also increased employees in the U.S. over the last two or more years, where we have a large percentage of our employees over 60 years who are independent of any visa situations. The next question: Hello, sir. What is the biggest business challenge faced by the company in view of COVID, and how do you plan to overcome this? The shareholder is [Vinay Charanveer Shetty]. The challenge facing us really, all of our industry, is really the uncertainty of the situation and the duration with respect to our clients. There is no clear sense yet of when the recovery will begin and when the sentiment of our clients or their employees or in general the consumers will improve.
Another risk could be a second wave which could emerge and if there are more lockdowns. We are in constant communication with our clients, and overall, we see an increased move to the work of digital, and assisting them more and more in this need. We are confident if we continue to work with our clients on their immediate and emerging technology needs, we will actually emerge stronger. Next question: Have you lost any market share business in the U.S.? Shareholder name, [Jasmeet Singh]. We continue to engage with our clients on a regular basis remotely. They're very appreciative of our response and our ability to transition the work from home as the pandemic has struck. They want to engage more with us and to see digital transformation in their business.
In financial year 2020, we grew at 9.8%, which is among the fastest growth rate of large vendors across the global IT industry. This is a testimony to the fact that we are gaining market share. We also saw our digital revenue grow at a very fast rate of 38%, and that's another area where we can see that we are gaining market share. The next question: What will be the impact of slowdown in the economy on the operating revenues and for H1 financial year 2021? The shareholder name is [Vishrat Dilip Bora]. In the near term, we do see an impact on our business. The company anticipates some slowing as a consequence of the global crisis. This is impacting the closure of some new deals and decision cycles across various verticals.
However, we see, in the medium term and the longer term, much more benefits and positive activity across the business. Operating margins will see a headwind due to some challenges from utilization in the near term, which we'll try and offset through lower overheads, lower travel costs, and cost optimization measures that we have already kicked in. We have a strong balance sheet and have responded fast to contain risks and the costs to ensure our financial resilience. Infosys is poised to confront the challenge and help its clients navigate through it as well, and emerge resilient from this crisis.
The next question: I would like to understand how will this new work from home scenario have an impact on margins in terms of CapEx and operating cost that will have to be incurred to set up this infrastructure on a permanent basis, and what would be annual recurring CapEx and OpEx towards this? Shareholder name is [Harit Shah]. Work from home will create business disruption due to revenue impact, but will also create short-term utilization challenges on the margin. We expect such margins to be offset by cost take out, higher offshoring, and lower travel costs. Due to the slowing growth resulting from the crisis, our CapEx needs will also reduce in the short term. We will reassess our long-term capital plans based on how the situation evolves. The next question: Does the company have any plan to acquire foreign IT firms in the near future?
The shareholder name is [Sabiyu Rehman Gunduvayal ]. The answer: We are actively looking at acquisitions outside India. The focus of those will be in the digital areas, specifically on cloud or on the data side, and also could be focused on business platforms. The current climate could offer us opportunities for acquisitions, and we have a healthy pipeline that we are on a regular basis. The next question: What is the business plan future after COVID-19, and how impacted will the IT industry be? The shareholder name is [Naval Kishore]. The pandemic itself will have an impact in the near term. In the medium and long term, we continue to see that the technology side will have a lot of positive traction with our clients, especially as it relates to cloud and digital, as it relates to cybersecurity.
We have quickly pivoted our focus on those and areas of cost efficiency and areas of consolidation. While we see some near-term impact, in the medium and long term, we continue to see actually a good traction in many of those areas. Next question: What are Infosys' plans for enhancing their artificial intelligence capabilities in financial year 2020 and beyond? The shareholder name, [Ronak Rajpal]. Artificial intelligence has been a core area for our company for many years. We have a dedicated service line in helping our clients leverage AI in their processes and for their automation tasks. We are building AI capabilities in our data analytics practice for predictive analysis. On our Edge suite platforms which use AI and machine learning extensively. Our AI related techniques are becoming pervasive. We'll see this is to be a crucial capability.
We are also using a lot of AI related courses in our reskilling platform, both on Lex and Wingspan. We expect to leverage strong partnerships we have with third-party AI solutions for the benefit of our clients. Next question: First of all, thank you to the Infosys management for the opportunity of joining via VC. Certainly in the future, even if the pandemic wasn't here, this seems really great that many can join in and get first hand experience. I have two questions for the management. First is, what will be the future of cloud computing and AI? Shareholder name is [Shobha Dujari]. On AI, the points I just shared will be relevant. On cloud computing, it's a very large area of growth for all of our clients.
We have been extremely proactive, built a good set of capabilities, and also we have built partnerships with the large cloud providers, and now with two of the emerging cloud providers as well. We believe we are extremely well-positioned to benefit from the cloud activities as they will develop. Those are all the questions in this first round for me. Pravin, over to you, please. Pravin, you're on mute.
Okay. Sorry. Thanks, Salil. The first question for me is: I n this pandemic, when most people are working from home, can Infosys play a role in providing education from home using technology? The shareholder name is [Keshab Yunus Modi]. We have invested in our Lex platform, which provides us ability for anyone to learn anytime, anywhere, 24 x7 . Using that platform, our employees can access learning content, they can interact with instructors, they can take regular assignments, and they can get certified as well. Our clients are also excited about making this platform available for their own employees for accelerated learning opportunities. We have extended this platform to them, and it is called Wingspan. Likewise, for engineering graduates in India, we have also a version of this platform called InfyTQ, where they are able to get access to high quality computer science education.
In U.S. as well, we have opened up Pathfinders Online Institute, an online learning platform for teachers, school children, and their families, so that they can access high quality computer science education from home for free. The second question is: D uring this COVID pandemic era, when many companies are opting to lay off tons of employees to cut on operating costs, the shareholder would like to know whether Infosys is planning to do something on similar lines. Shareholder name is [Abhishek Singhal]. Given our overall business situation and our long-term commitment to our employees, we have no plans for mass layoffs. We continue our performance-based exits in line with our earlier practice. There's a question from [Imran Akkar]: Is working from home affecting the productivity of deliverables? The response is: W e have had very positive stories from our projects and client stakeholders.
As you're aware, we have moved about 93% of our workforce to remote working in early April. At peak we had about 97% of our people working from home. Initial benchmarking shows that we have been able to maintain productivity as well as all the deliverables to our clients. We have not seen any client escalations or SLA misses on account of work from home. The next question is: What percentage of your workforce is currently working from home? How do you see this changing in the coming weeks, months? What is the steady state you envisage? There have been similar questions from few shareholders. Their names are [Om Prakash Subbarao], [Venkateswaran S.], [Jahangir Dar Hanumesh], [Vasudev Rao]. Currently, as I said, we have about 95% of our workforce working from home. At peak we had about 97%.
Today, we have about under 5% working from office. We are not in a hurry to start working from office. We want to do it in a very slow and calibrated manner, keeping in mind the safety and security of our employees. In the long term, we envisage a hybrid model where one would have the flexibility to work from either office or work from home. There'll always be times when people have to work from office, even though they may have flexibility and ability to work from home. This will depend on the nature of the project as well as client comfort. It's very difficult at this stage to envisage what the percentage would be, but our endeavor is to make sure that we have an environment and operating model which gives us the flexibility to either work from office or work from home.
The next question is: W hat would be the impact of H-1B visa restrictions imposed by U.S.? They have been asked by a couple of shareholders, [Amit Prakash Bhonsle] and [Arunabha Bhattacharya]. We are constantly monitoring the developments in the U.S. regarding immigration rules, and we believe Infosys is well prepared to address any near-term challenges as a result of our strong localization strategy and a resilient business model. In the last 24 months, we have implemented our localization initiatives at scale in U.S., recruiting more than 10,000 U.S. nationals or permanent residents and have significantly reduced our dependency on visas. Currently, about 60% of our U.S. employees are visa independent. The next question is: What is the outlook on new hires, especially lateral hires, and how has the attrition rate been over the past quarter? Shareholder name is [Vikas R].
We have ensured remote onboarding for our lateral joins this quarter. We have committed that we will honor all the offers made by us and look forward to welcoming the new Infoscions. Our attrition rate has declined over the last few quarters, thanks to our employee engagement initiatives and robust growth rates which gives opportunity for employees for career growth. We expect to see further decline in attrition in the coming quarters. Next question is: Infosys has not had any presence in Northeast India where there are seven states and Guwahati is heart of all. Any plan for expansion and capture of the market? Shareholder name is [Suranjan Sharma]. In the eastern part, we have a presence in Bhubaneswar right now and we also have plans for expanding in Kolkata. Given the new normal, it is very difficult to envisage the post-pandemic situation.
Given that, in the near term, we are not planning to open any new offices or invest any more in incremental infrastructure spend. But, once we have clarity on the long-term normal post the pandemic, we will definitely take this into account. Next question is: What implications does company foresee on its financial operations from the ongoing tensions from China and other global issues like depreciation in the value of rupee? Shareholder name is [Piyush Vinodh Sancheti]. We are a global company with operations in many countries across the world and have clients in China who are largely serviced locally by our China-based employees. We are, of course, deeply concerned about the recent escalation in the geopolitical tensions. At this stage, we have not seen any disruptions in our operations. We will comply with government directives in any of the countries that we operate in.
Regarding the movement in currencies, we have an active hedging strategy to tide over currency volatility. Next question is from [Shriram Sampath]: Request an update on the GST software as news item appeared prominently that the top executives of the company were summoned by the Ministry of Finance regarding the software glitch. We are working with both GSTN and the government in addressing the issues raised. Today, the system is working fine, and based on our advice, GSTN has also staggered the filing dates in order for us to bring down the load that was hitting the system on the last day. Next question is: Why can't our company diversify into slightly non-traditional areas like developing an app that is a competitor to TikTok? Shareholder name is [Shubham Bharatiya ]. This is a good question and a good suggestion.
We continuously look for business opportunities and expanding our footprint and getting into new areas like products and platforms. We will definitely consider this. That's the end of the question in this round, and I will now pass it on to Nilanjan.
Thank you, Pravin. We've got a couple of questions on dividend, so I'll take them one by one. This is a question from [Sushil Haksar]: Will your dividend policy be maintained? The board has revised its capital allocation policy in FY 2020 to return approximately 85% of free cash flows to shareholders over a five-year period till FY 2024, through a combination of semi-annual dividends and/or share buyback and/or special dividends subject to applicable laws and requisite approvals. There is no change in that policy. The second question from [Biswarup Ganguly]: Can the company get any interim dividend this year? The company and the board will take a decision on interim dividend for FY 2021 in due course.
In spite of earnings a good income, the dividend paid is less than that of the previous year. Is it possible to increase the same? This is a question by [Jai Raghuraman ]. Given the COVID-related uncertainties, it becomes very important to ensure liquidity in the business. Many companies globally have stopped this dividend due to uncertainty. Despite this, the board has approved INR 9.50 as final dividend, equaling the total regular dividend paid in FY 2019 of INR 17.5. The board will return 85% of free cash flows approximately to shareholders over a five-year period as per the capital allocation policy. Any possibility of stock split, and what about dividend distribution policy? This is a question from [Anandu Vitthal Nayak]. I have already mentioned about the dividend distribution policy. The board will consider the stock splits if there's a need at an opportune time in the future.
What is the year-over-year split of organic growth versus inorganic growth due to acquisitions? Example, Brilliant Basics or Stater. This is a question from [R. Santhosh]. Overall growth, as you know, is 9.8% for FY 2020 in constant currency terms. This includes Stater JV, Fluido acquisitions, and Simplus acquisitions, excluding which the organic growth for FY 2020 was over 8% in constant currency terms. There's an increase in the total expenditure, i.e., INR 11,142 crores in 2018, 2019 and INR 6,901 crores in 2019, 2020. Please let me know the reason for the same. There's a question from [Vijith Chandrakant Joshi]. The cost of sales was 66.9% of revenue as compared to 65.2% during the previous year.
This is mainly on account of increase in employee cost and cost of technical subcontractors, which increased in 2020 on account of increase in volumes, increase in compensation, and increase in technical subcontractors to meet the talent crunch, partially offset by our cost optimization measures, including on-site mix. Why is operating margin going down year-on-year from 25% in 2016 to 21% in 2020? This is a question from [Ishan Sharma]. Our operating margins were very steady in FY 2017 and 2018. You may recall that we spoke of specific investments in the business to enhance our digital capabilities, increase localization, retraining our employees, and investing in strengthening our sales team. We made these investments in FY 2019.
In addition, we have had every year salary increases in line with industry practice, pricing pressure on the core part of our business offset by cost optimization, increase in digital business, and currency benefits. These were the primary reasons for the drop in profitability. We have shown margin recovery and resilience through FY 2020 and hope to continue on that path going forward, barring the near-term pressures due to COVID-related issues. Operating margins have come down from 22.8% in FY 2019 to 21.3% in FY 2020. Why is there any specific reason for this fall? This is from Mr. [K.S. Balasubramaniam] .
Our operating margin in FY 2020 was 21.3%, which decreased over FY 2019 by 150 basis points. Net cost optimization benefit from higher offshoring, pyramid lean and automation was offset due to the salary increase of 160 basis points. We also had higher visa costs in FY 2020. All this led to 150 basis point drop in operating margin in FY 2020. When can the company go back to EBITDA margin in excess of 26%? We have a very focused margin improvement program that is looking at both operating levers as well as some strategic shifts through leveraging automation. We don't have a long-term margin guidance in place. Can you let me know our business segmentation in terms of AI, digital, data, cloud, and so on? This is from [Sunder Ram Madduri]. We declare the digital revenue by business segment, this is in page 278 of the annual report.
The digital pillars are there in investor presentation page number 12. Have any bonus shares been declared in the financial year 2021? This is from [Vimal Kumar M.]. There have been no bonus shares declared for FY 2020. With that, I will pass on to Manikantha.
Thank you, Nilanjan. There were few questions. I'll go through them. There was a question from Mr. [Mohit Agarwal], and the question is: As a shareholder, I am interested for the capital appreciation of my share. I like to know if the company declares in this AGM or any time in the future bonus to its members. The answer is: T he company has issued one is to one bonus shares in the year 2019. The board will consider at an appropriate time in the future an issuance of bonus shares. There was a question from [Thomas P. Joshua], and the question is: How can I view the statutory registers? There are similar questions in that regard by Mr. [Kumkum Rathee], [Nishant S. Shirke], [Amit Kumar Gupta].
The response is: A s mentioned earlier in this AGM, for inspecting the statutory registers, kindly send an email to investors@infosys.com from your registered email ID along with your contact details. The register will be made available to you for electronic inspection. There was a question from Mr. [George Alexander] asking why is the participation in the AGM on a first come, first serve basis? There are similar questions from a couple of other shareholders. The response is: A s per the circular issued by Ministry of Corporate Affairs, companies should arrange a facility having a capacity to allow at least 1,000 members to participate on a first come, first serve basis. However, the company had not put any restrictions on the number of shareholders participating in this meeting. We had overwhelming participation from all the shareholders across the country, across the globe.
The chairman will mention the number of shareholders participated in this meeting over the video conference in the closing remarks. With that, I hand over to Chairman, Mr. Nandan Nilekani.
Thank you, Mani. Now we will come to the second round of questions. These are questions that were asked in the video conference, and we will do it in the same order. I don't have any specific questions to be answered from the video conference questions. Video and audio conference questions. I will hand over to Salil.
Thank you. There are a few questions that have come to me from the video questions. Thank you for the questions. I'll start with them. The first question: E conomic downside, good time for acquisitions. This is a shareholder name, Mrs. [Patel]. We have a very active program to look at acquisitions. We are looking at acquisitions in the area of the digital focus, whether that's in cloud or in data. We're also looking at acquisitions in some specific geographies. We feel that these acquisitions are actively being considered. There's a good pipeline that we are looking at. The next question: Will the lockdown impact on business? Will India, China political situation affect our business? The shareholder name is [Homayun]. The first part of the question was already answered separately, which talked about how we are doing the work from home. I won't repeat.
On the second part of the question with respect to China, we are a global company with operations in many countries, including in China. A lot of our work that we do in China is being serviced by our employees within China. Infosys is deeply concerned with the recent escalation in the geopolitical tension. At this time, we've not seen any disruption of our work in China. We will comply with the government directives in all of the countries we operate in, going forward, as we've always done. Next question: Status of performance of companies which were previously held. Shareholder name is [Srimal]. We had previously held assets of Panaya and Kallidus for sale. However, in April 2019, we had announced that we had taken them off the market as we had not received proposals that met our expectations.
We have subsequently implemented plans to integrate them more closely to refocus their activities and to bring them closer to what our focus in the market is. We are making steady progress on these plans. Those are all the questions from me. Pravin, I hand it over to you.
Thank you, Salil. The first question is, are we continuing with our recruitment plan under current situation? Shareholder name is [Homayun]. We are committed to honoring all the offers we have made and are in the process of reviewing the joining dates for the same. We are evaluating the pace of hiring for remainder of FY 2021 to arrive at an optimal number of hires to meet our business requirements. Overall, we expect lateral hiring to continue in some manner and limited to skills which are niche. The second question is: W hat is the expected reduction in cost of lease rental due to COVID? As we said, these are early days. In the new normal, it will be a hybrid model where we'll have employees partly working from home and partly working from office.
At this stage, it is very difficult to determine what percentage of employees will work from office and what percentage will work from home. Having said that, we are looking at opportunities for reducing cost in every aspect of our business. The next question is: C an the company spend more towards CSR? Shareholder name, [Anjai]. As we mentioned earlier, Infosys Foundation has already spent INR 120 crores towards their mitigating the COVID impact. Infosys Foundation has a defined plan for spending on CSR as approved by the board. In addition to that, we also invest in CSR activities across the globe, which is over and above the CSR limits. This request will, however, be placed before the board for suitable consideration. Next question is: C yber threat and data security in the wake of COVID. What is the framework that the company is using? Shareholder name, [Anish Hegde].
As part of our cybersecurity strategy, we have deployed robust security controls to safeguard all our endpoints, system and network, and cloud infrastructure against cyberattacks directed towards Infosys. The different cybersecurity solutions we have implemented have inbuilt artificial intelligence and machine learning capabilities, which are vital for securing the organization. The existing IT remote access infrastructure was scaled up in order to enable employees to securely connect and work from home. We will continue to monitor the situation and continue to invest in technology to mitigate any risk from new cyber threats. That's all I had. I will now pass it on to Nilanjan.
Thank you, Pravin. There were a couple of question on the subsidies. The first question was; W hat are the subsidiaries under the loss and the strategy for converting them to profit? A similar question was on what is the profitability of Infosys China? This is coming from [Anirudh]. We work with each subsidiary company for improving their profitability over a period of time. Most of our subsidiaries also work closely and in synergy with other Infosys entities. We closely manage these businesses to ensure that they are accretive to the entire Infosys group as a whole. Second question: W hat are the plans to improve operating margins for FY 2021? This is from [Nath]. Our big focus will be accelerated cost takeouts.
While we have made enormous progress on this during the last few years, this is even more critical for FY 2021, in the period of the COVID headwinds. We have embarked on a series of steps to address near-term margin pressure emanating from lower utilization due to supply and demand mismatches, which include complete freeze on discretionary spending. We will also continue to look at the entire gamut of other cost levers we have as the situation evolves. Our ongoing strategic cost optimization levers around automation, pyramid rationalization, on-site offshore mix, subcontractors, will continue as in the earlier years. We are also looking at reduction in CapEx, barring any committed or non-discretionary spends. Finance charges of INR 114 crores. Please provide details. This question is from Simha. The company adopted the new accounting standard Ind AS 116 on leases effective 1st April 2019.
Finance cost relates to interest on lease liability, which is calculated using incremental borrowing rate. Can we hope for better dividend next year? This is from Mr. [C.A.B. Srimal]. The board will take a call on the dividend payout every year after considering various factors, including a capital allocation policy, cash generation, and deployment needs. Why is our PE lower compared with industry? This is from [Kirti Shah]. We don't comment on any stock price and valuations. As a company and management, we are focused on shareholder returns, and a large part of the management remuneration is aligned to the TSR metric, as you will recall the shareholders which approved in 2019 ESOP plan. That is all from me. Mani, over to you.
I think all the questions were answered by Salil, Pravin, and Nilanjan. With that, I will hand over back to Mr. Chairman.
Thank you, Mani. Members may note that e-voting on the NSDL platform will continue to be available for the next 30 minutes. Therefore, members who have not cast a vote yet are requested to do so. The board of directors has appointed Parmeshwar G. Hegde, Practicing Company Secretary, as the scrutinizer to supervise the e-voting process. Further, I hereby authorize Manikantha, the Company Secretary, to declare the result of the voting and place the results on the website of the company at the earliest. The resolutions as set forth in the notice shall be deemed to be passed today subject to receipt of requisite number of votes. We had 1,771 members participating today in this 39th annual general meeting. We are grateful to all our shareholders from all over the world who have come in by video conferencing. A 1,771 people participated.
Thank you all for attending the meeting, and I hereby declare the proceedings as closed. Thank you very much and see you next year.