1. VALUATION Of THE COMPANY 10/18/10 - BY ANKIT GOR

2. Brand Valuation 10/18/10 - BY ANKIT GOR

5. Introduction & evidence of brand valuation The increasing recognition of the value of intangibles came with the continuous increase in the gap between companies’ book values and their stock market valuations, as well as sharp increases in premiums above the stock market value that were paid in mergers and acquisitions in the late 1980s. 10/18/10 - BY ANKIT GOR

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12. Social value of brands Brands are accused of stifling competition and tarnishing the virtues of the capitalist system by encouraging monopoly and limiting consumer choice. The opposing argument is that brands create substantial social as well as economic value as a result of increased competition, improved product performance and the pressure on brand owners to behave in socially responsible ways. 10/18/10 - BY ANKIT GOR

13. Social value of brands Competition on the basis of performance as well as price, which is the nature of brand competition, fosters product development and improvement. 10/18/10 - BY ANKIT GOR

16. Value of a brand N = ∑ RBt / (1+r)t + residual value/(1+r)n t = 1 = Anticipated revenue in year t, attributable to the brand r = discounting rate Residual value beyond year n RBn/r or RBn/r-g g= Rate of revenue growth 10/18/10 - BY ANKIT GOR

17. Multiple methods Market value of equity Firm : P/E = Known profits Brand equity Brand Multiple = Brand net profits 10/18/10 - BY ANKIT GOR

18. Stages to determine Brand Multiple 10/18/10 - BY ANKIT GOR

22. Means of evaluating brand strength 10/18/10 - BY ANKIT GOR Evaluation Factor Maximum Score Brand A Brand B Brand C Leadership 25 19 19 10 Stability 15 12 9 7 Market 10 7 6 8 Internationally 25 18 5 2 Trend 10 7 5 7 Support 10 8 7 8 Protection 5 5 3 4 Brand strength 100 76 54 46

23. S-curve 10/18/10 - BY ANKIT GOR

27. “ If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you.” -John Stuart, Chairman of Quaker (ca. 1900) 10/18/10 - BY ANKIT GOR

28. HUMAN CAPITAL VALUATION 10/18/10 - BY ANKIT GOR

41. Good will (Rs in thousands) 10/18/10 - BY ANKIT GOR March 31, 2008 March 31,2009 Balance ( beginning of the period) 23683549 27043223 Additions 3427020 10834 Valuation allowance reversals (67,346) - Balance ( end of the period) 27043223 27054057

42. Other intangible assets (Rs in thousands) 10/18/10 - BY ANKIT GOR Particulars March 31, 2008 Less Amortization March 31, 2009 Less Amortization Software 83,993 83,993 1,00,458 88,659 Bandwidth 20,96,218 96,346 33,63,064 3,07,261 Licences 63,59,042 29,87,002 63,59,402 34,27,900 Licence entry fees 1,08,16,027 31,15,513 1,08,97,940 36,97,713 Brands 1,10,514 92,250 1,10,514 94,990 Distribution networks 11,34,508 11,344,188 11,34,508 11,34,484 Customer relationships 7,28,840 7,23,639 7,28,840 7,28,004 Other intangibles 1,54,659 47,234 1,54,659 60,874 Total 2,14,84,161 82,80,165 2,28,49,385 95,39,885 NET 1,32,03,996 1,33,09,500

45. HUMAN RESOURCE VALUATION AT INFOSYS Assumption : cost of capital 12.18% (Rs. in crores) 10/18/10 - BY ANKIT GOR 2009 2008 Employees no. Software professionals 97349 85013 Support 7501 6174 Total 104850 91187 Value of Human Resources Software professionals 95600 92331 Support 6533 6490 Total 102133 98821

47. INFOSYS-BRAND VALUE Rs. in crores 10/18/10 - BY ANKIT GOR 2009 2008 2007 Profit before interest and tax 6907 5344 4245 Less: non-brand income 426 634 335 Adjusted profit before tax 6481 4710 3910 Inflation factor 1.0000 1.092 1.192 PV of brand profits 6481 5142 4660 Weighted factor 3 2 1 Weighted avg profits 5731 - - Remuneration of capital 801 - - Brand related profits 4930 - - Tax 1676 - - Brand earnings 3254 - - Brand multiple 9.94 - - Brand value 32345 - -

48. Infosys : Intangible assets Intangible Assets / Total Assets = 88.7% In Rs. in crores 10/18/10 - BY ANKIT GOR 2009 Total Assets 152732 Intangible assets Brand value 32345 Human Resources 102133 135478

49. Conclusion 10/18/10 - BY ANKIT GOR

50. 10/18/10 - BY ANKIT GOR