Infosys sitting on huge cash surplus, liquid assets

Call it strong treasury management or attirbute it to its debt-free status, India's
second largest software exporter Infosys Technologies enjoys a strong liquidity position with over Rs 6,000 crore in assets, including cash surplus.

This liquidity makes Infosys flexible to make rapid shifts in the direction of the market, the Nasdaq-listed company said in its annual report adding: "we continue to be debt-free; and maintain sufficient cash to meet our strategic objectives. Liquidity in the balance sheet needs to balance between earning adequate returns and the need to cover financial and business risks.

"Our growth has been financed largely thorugh cash generated from opertions and to a lesser extent, from the proceeds of equity. During 2005-06, our internal cash accruals more adequately covered working capital requirements, capital
expenditure and dividend payments leaving a surplus of Rs 1,612 crore. As on march 2006, the company had liquid assets including investments in liquid mutual funds of Rs 4,463 crore."

This collectively make the liquidity strength of Rs 6,078 crore. These funds have been deposited with banks, highly-rated financial institutions and in liquid mutual funds.