Indian GAAP Press Release
Infosys crosses US$ 3 billion in revenues in the first nine months
Q3 revenues grew sequentially by 4.02%
Revenues expected to grow 20% in Fiscal 2008
Bangalore, India – January 11, 2008
Highlights
Consolidated results for the quarter ended December 31, 2007
- Income was Rs. 4,271 crore for the third quarter ended December 31, 2007; YoY growth was 16.9%
- Net profit after tax* was Rs. 1,231 crore for the quarter ended December 31, 2007; YoY growth was 25.2%
- Earnings per share* increased to Rs. 21.54 from Rs. 17.64 for the corresponding quarter in the previous year; YoY growth was 22.1%
* The net profit for the quarter ended December 31, 2007 includes a reversal of tax provisions amounting to Rs. 50 crore. Excluding this reversal, the earnings per share for the quarter would have been
Rs. 20.66 resulting in a YoY growth of 17.1%.
Others
- 47 new clients were added during the quarter by Infosys and subsidiaries
- Gross addition of 11,683 employees (net 8,100) for the quarter by Infosys and subsidiaries
- 88,601 employees as on December 31, 2007 for Infosys and subsidiaries
“We see several opportunities for growth in the marketplace and have concluded several multi-year, multi-million deals during the quarter,” said S. Gopalakrishnan, CEO and Managing Director. “We believe that our ability to handle large, complex programs using the Global Delivery Model provides a compelling value proposition to global customers seeking efficiency in a challenging macro-environment.”
Business outlook
The company’s outlook (consolidated) for the quarter ending March 31, 2008 and the fiscal year ending March 31, 2008, under Indian GAAP and US GAAP, is as follows:
Outlook under Indian GAAP – consolidated
Quarter ending March 31, 2008*
- Income is expected to be in the range of Rs. 4,477 crore and Rs. 4,501 crore; YoY growth of 18.7% – 19.3%
- Earnings per share** is expected to be Rs. 21.38; YoY growth of 5.3%
Fiscal year ending March 31, 2008*
- Income is expected to be in the range of Rs. 16,627 crore and Rs. 16,651 crore; YoY growth of 19.7% – 19.9%
- Earnings per share*** is expected to be Rs. 81.07; YoY growth of 17.12%
*conversion 1 $ = Rs. 39.41
** Including tax reversal of Rs. 124 crore for the quarter ended March 31, 2007. Excluding the tax reversal the Earnings per share will be Rs. 21.38 and Rs. 18.10 for the quarter ending March 31, 2008 and 2007 respectively; YoY growth of 18.1%
*** Including tax reversal of Rs. 101 crore and Rs. 125 crore for the year ended March 31, 2008 and 2007 respectively. Excluding the tax reversal the Earnings per share will be Rs. 79.30 and Rs. 66.86 for Fiscal 2008 and 2007 respectively; YoY growth of 18.6%
Outlook under US GAAP
Quarter ending March 31, 2008
- Consolidated revenues are expected to be in the range of $ 1,136 million and $ 1,142 million; YoY growth of 31.6% – 32.3%
- Consolidated earnings per American Depositary Share** are expected to be $ 0.54; YoY growth of 17.4%
Fiscal year ending March 31, 2008
- Consolidated revenues are expected to be in the range of $ 4.17 billion and $ 4.18 billion; YoY growth of 35.0% – 35.2%
- Consolidated earnings per American Depositary Share*** are expected to be $ 2.02; YoY growth of 32.0%
** Including tax reversal of US$ 29 mn for the quarter ended March 31, 2007. Excluding the tax reversal the Earnings per ADS will be US$ 0.54 and US$ 0.41 for the quarter ending March 31, 2008 and 2007 respectively; YoY growth of 31.7%
*** Including tax reversal of US$ 25 mn in Fiscal 2008 and US$ 29 mn for Fiscal 2007. Excluding the tax reversal the Earnings per share will be US$ 1.98 and US$ 1.48 for Fiscal 2008 and 2007 respectively; YoY growth of 33.8%
California wage settlement
The Company has voluntarily settled with the California Division of Labor Standards Enforcement (DLSE) towards possible overtime payment to certain employees in California for a total amount of $ 26 million. The payment pertains to the last three years and such backwages will be paid to employees in due course.
Awards and Accolades
Customers, analysts and industry bodies commended Infosys for setting benchmarks in its strategy to enable customers to compete effectively in a dynamic market.
An independent analyst has cited Infosys as a leader in SAP implementation services, noting that “Infosys’ SAP practice is aligned along verticals to ensure that clients get the benefit of its deep vertical process expertise.”
Infosys moved up to No. 14 on FinTech 100, an international annual listing of the top 100 global application and service providers to the financial services industry.
British Telecom and Infosys were awarded the National Outsourcing Association (NOA) award for Innovative Outsourcing Project of the Year 2007.
Infosys entered the Balanced Scorecard Hall of Fame for Executing Strategy on the strength of its innovative strategy planning and execution capabilities.
Infosys was honored with the Sharpening Brand and Competitive Differentiation Marketing Excellence Award from the Information Technology Services Marketing Association (ITSMA) for its success in shifting its perception from a provider of offshoring services to that of a partner that helps companies reshape their businesses in a flattening world.
Expansion of services and significant projects
Infosys added 47 clients during the quarter and won repeat business from existing clients.
Infosys entered into a multi-year multimillion-dollar contract with a leading healthcare company to provide application services and testing support for a critical business platform. Besides potential cost savings of over $ 60 million for the client, the engagement offers benefits such as portfolio integration, knowledge management and a scalable support model. Infosys is also partnering with one of the leading providers of specialized, comprehensive Health Care Support solutions as well as another corporation that provides clinical laboratory services.
A leading European bank selected Infosys as a preferred supplier to reduce the cost of ownership of its application portfolio across business lines.
“We saw strong growth in Europe during the quarter,” said S.D. Shibulal, Chief Operating Officer. “The pricing environment continues to be stable with an upward bias. We increased the depth of client engagements and our top ten customers showed double-digit revenue growth.”
A top global brokerage sought to better manage its IT budget with Infosys’ time-tracking database system. One of the world’s largest asset managers sought Infosys’ help to understand and allocate cost for its infrastructure services. A leading global bank used Infosys’ expertise to build an application to mine and assimilate distributed customer data. Infosys conducted an IT Effectiveness study to improve processes and architecture for one of the world’s largest investment banks.
“We saw strong growth in our financial services vertical during the quarter,” said Ashok Vemuri, Member - Executive Council and Senior Vice President and Head – Banking and Capital Markets. ”We believe that the IT spending environment will be favorable to large offshore players like us, even though the macro-environment is challenging.”
Industry leaders placed their trust in Infosys as a transformation partner. A corporation that designs, manufactures, distributes and services engines and related technologies selected Infosys as its Global Preferred Supplier for applications outsourcing. Infosys was selected for its “ability to act as a change agent to move to a value-based relationship.”
One of the world’s largest automotive suppliers has selected Infosys to head a technology-led business transformation to develop common global business processes and modernize its fragmented legacy IT environment. Infosys has been selected by the world’s leading global logistics provider to maintain its US freight forwarding application portfolio.
An IT/communications service provider and a leading pan-European provider of business communications services have chosen Infosys as a Strategic Partner to deliver managed services to its customers in Asia and Europe. Infosys has developed a 5-year business application strategy to help a leading global telecommunications manufacturer dramatically reduce total cost of ownership and streamline business processes.
A UK telecom leader is working with Infosys to roll out IPTV-based value-added services swiftly through collaborative product development. Infosys is managing the development of a new wireless application platform for a leading US Internet services and online application provider.
A leading intimate and fashion apparel retailer in the US partnered with Infosys to develop and deploy a performance-critical application for merchandise and inventory management. A multi-brand US retailing leader is benefiting from Infosys’ IT infrastructure managed services. A leading consumer product goods company has signed up Infosys for SAP integration and rollout in addition to a suite of application services.
Infosys defined the Enterprise Architecture framework and Enterprise Architecture operating model for one of the world’s largest engineering companies. A leading French energy and utility company with operations across Europe and North America is benefiting from Infosys’ sales force automation and customer service solutions. Infosys built a critical application to manage and maintain audit records for a world leader in product safety testing. In China, a leading capital project lifecycle management consultant has signed up Infosys to build a Microsoft technology-based product for managing projects in the construction industry.
Infosys BPO Limited
FAO Today magazine recognized Infosys BPO with its Provider of the Year award.
Infosys BPO is providing knowledge services and financial accounting services to a leading UK private equity company. A leading US Fortune 100 diversified healthcare benefits company is also partnering with Infosys BPO.
Finacle®
Finacle®, the universal banking solution from Infosys, won five new clients – three from Asia Pacific, one from Europe and one from the Americas.
Process Innovation
During the quarter, Infosys applied for an aggregate of 16 patents in the US and India. With this, Infosys has filed an aggregate of 109 patent applications (pending) in both countries and has been granted two patents by the United States Patent and Trademark Office.
Liquidity and capital expenditure
Cash and cash equivalents, including investments in liquid mutual funds, as on December 31, 2007 was Rs. 7,933 crore (Rs. 4,791 crore as on December 31, 2006). During the quarter, Infosys incurred capital expenditure of Rs. 325 crore. Operating cash flows during the quarter ended December 31, 2007 were Rs. 1,266 crore (Rs. 981 crore for the quarter ended December 31, 2006).
“Cash and cash equivalents crossed US$ 2 billion,” said V. Balakrishnan, Chief Financial Officer. “We also crossed a significant milestone reaching US$ 1 billion in net profits in the last twelve months. The currency environment continues to be challenging.”
Human resources
Infosys added 11,683 (gross) employees during the quarter and continues to invest in creating a strong training and recruitment engine to meet its growth objectives.
“We are encouraged that the recruitment pool for the IT Industry has widened and fears of a large talent shortfall appear to be misplaced,” said T.V. Mohandas Pai, Member of the Board and Head – HRD and Education & Research. “Collective efforts in the last few years have resulted in better depth and breadth of talent availability in the market.”
About Infosys Technologies Ltd.
Infosys (NASDAQ: INFY) defines, designs and delivers IT-enabled business solutions that help Global 2000 companies win in a flat world. These solutions focus on providing strategic differentiation and operational superiority to clients. With Infosys, clients are assured of a transparent business partner, world-class processes, speed of execution and the power to stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over 88,000 employees in over 40 offices worldwide. Infosys is part of the NASDAQ-100 Index. For more information, visit www.infosys.com
Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of the appreciation of the Rupee against the US Dollar, UK Pound and Euro, our ability to manage growth, intense competition in information technology, business process outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, our abi lity to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including o ur Annual Report on Form 20-F for the fiscal year ended March 31, 2007 and Quarterly Report on Form 6-K for the quarters ended June 30, 2007, September 30, 2007 and our other recent filings. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
Contact
Investor Relations | Shekar Narayanan, India | Sandeep Mahindroo, USA |
Media Relations | Bani Paintal Dhawan, India | Peter Mclaughlin, USA |
INFOSYS TECHNOLOGIES LIMITED
Balance Sheet as at | December 31, 2007 | March 31, 2007 |
|
|
|
SOURCES OF FUNDS |
|
|
SHAREHOLDERS' FUNDS |
|
|
Share capital | 286 | 286 |
Reserves and surplus | 13,788 | 10,876 |
| 14,074 | 11,162 |
APPLICATION OF FUNDS |
|
|
FIXED ASSETS |
|
|
Original cost | 4,559 | 3,889 |
Less: Accumulated Depreciation | 2,139 | 1,739 |
Net book value | 2,420 | 2,150 |
Add: Capital work-in-progress | 1,253 | 957 |
| 3,673 | 3,107 |
INVESTMENTS | 942 | 839 |
DEFERRED TAX ASSETS | 97 | 79 |
CURRENT ASSETS, LOANS AND ADVANCES |
|
|
Sundry debtors | 2,421 | 2,292 |
Cash and bank balances | 6,334 | 5,507 |
Loans and advances | 2,221 | 1,162 |
| 10,976 | 8,961 |
LESS: CURRENT LIABILITIES AND PROVISIONS |
|
|
Current liabilities | 1,287 | 1,162 |
Provisions | 327 | 662 |
NET CURRENT ASSETS | 9,362 | 7,137 |
| 14,074 | 11,162 |
The audited Balance Sheet as at December 31, 2007 has been taken on record at the board meeting held on January 11, 2008
INFOSYS TECHNOLOGIES LIMITED
| Profit and Loss Account for the | Quarter ended December 31, | Nine months ended December 31, | ||
| 2007 | 2006 | 2007 | 2006 |
| INCOME |
|
|
|
|
Software services and products | 3,999 | 3,454 | 11,413 | 9,594 |
Software development expenses | 2,219 | 1,888 | 6,504 | 5,299 |
| GROSS PROFIT | 1,780 | 1,566 | 4,909 | 4,295 |
Selling and marketing expenses | 172 | 182 | 541 | 530 |
General and administration expenses | 281 | 235 | 790 | 688 |
| 453 | 417 | 1,331 | 1,218 |
OPERATING PROFIT BEFORE INTEREST AND DEPRECIATION | 1,327 | 1,149 | 3,578 | 3,077 |
Interest |
| - |
| - |
Depreciation | 138 | 129 | 404 | 336 |
| OPERATING PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS | 1,189 | 1,020 | 3,174 | 2,741 |
| Other income | 152 | 60 | 550 | 255 |
| Provision for investments |
| - |
| 3 |
| NET PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS | 1,341 | 1,080 | 3,724 | 2,993 |
Provision for taxation | 155 | 122 | 436 | 340 |
| NET PROFIT AFTER TAX AND BEFORE EXCEPTIONAL ITEMS | 1,186 | 958 | 3,288 | 2,653 |
| Income from sale of investments, net of taxes |
| - |
| 6 |
| Net Profit after Tax and Exceptional Items | 1,186 | 958 | 3,288 | 2,659 |
| Balance Brought Forward | 6,545 | 3,574 | 4,844 | 2,195 |
| Less: Residual dividend paid |
| - |
| 4 |
| Additional dividend tax |
| - |
| 1 |
6,545 | 3,574 | 4,844 | 2,190 | |
| AMOUNT AVAILABLE FOR APPROPRIATION | 7,731 | 4,532 | 8,132 | 4,849 |
DIVIDEND |
|
|
|
|
Interim | - | - | 343 | 278 |
Final | - | - |
| - |
Total dividend | - | - | 343 | 278 |
Dividend tax | - | - | 58 | 39 |
Balance in Profit and Loss Account | 7,731 | 4,532 | 7,731 | 4,532 |
| 7,731 | 4,532 | 8,132 | 4,849 |
| EARNINGS PER SHARE*(Equity shares, par value Rs. 5/- each) |
|
|
|
|
| Before Exceptional Items Basic | 20.77 | 17.20 | 57.58 | 47.82 |
| Diluted | 20.70 | 16.82 | 57.38 | 46.70 |
| After Exceptional Items |
|
|
|
|
| Basic | 20.77 | 17.20 | 57.58 | 47.93 |
| Diluted | 20.70 | 16.82 | 57.38 | 46.81 |
| Number of shares used in computing earnings per share |
|
|
|
|
| Basic | 57,13,46,568 | 55,70,34,398 | 57,12,55,430 | 55,48,77,140 |
| Diluted | 57,32,85,874 | 56,97,17,084 | 57,32,10,538 | 56,81,73,059 |
NOTE:
- The audited Profit & Loss Account for the quarter and nine months ended December 31, 2007 has been taken on record at the board meeting held on January 11, 2008
- A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com
CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
| Consolidated Balance Sheet as at | December 31, 2007 | March 31, 2007 |
|
|
|
SOURCES OF FUNDS |
|
|
SHAREHOLDERS' FUNDS |
|
|
Share capital | 286 | 286 |
Reserves and surplus | 14,018 | 10,969 |
| 14,304 | 11,255 |
MINORITY INTEREST | 5 | 4 |
| 14,309 | 11,259 |
APPLICATION OF FUNDS |
|
|
FIXED ASSETS |
|
|
Original cost | 5,453 | 4,642 |
Less: Accumulated Depreciation | 2,272 | 1,836 |
Net book value | 3,181 | 2,806 |
Add: Capital work-in-progress | 1,305 | 965 |
| 4,486 | 3,771 |
INVESTMENTS | 136 | 25 |
DEFERRED TAX ASSETS | 115 | 92 |
CURRENT ASSETS, LOANS AND ADVANCES |
|
|
Sundry debtors | 2,608 | 2,436 |
Cash and bank balances | 6,679 | 5,871 |
Loans and advances | 2,299 | 1,214 |
| 11,586 | 9,521 |
LESS: CURRENT LIABILITIES AND PROVISIONS |
|
|
Current liabilities | 1,666 | 1,469 |
Provisions | 348 | 681 |
NET CURRENT ASSETS | 9,572 | 7,371 |
| 14,309 | 11,259 |
- Principles of consolidation: The financial statements are prepared in accordance with the principles and procedures for the preparation and presentation of consolidated financial statements as set out in the Accounting Standard on Consolidated Financial Statements prescribed by the Institute of Chartered Accountants of India. The financial statements of the parent company Infosys Technologies Limited (“Infosys” or “company”) and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gains / losses.
- The audited Balance Sheet as at December 31, 2007 has been taken on record at the board meeting held on January 11, 2008
CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Profit and Loss Account for the | Quarter ended December 31, | Nine months ended December 31, | ||
| 2007 | 2006 | 2007 | 2006 |
| INCOME – Software services, products and business process management | 4,271 | 3,655 | 12,150 | 10,121 |
Software development and business process management expenses | 2,325 | 1,938 | 6,725 | 5,437 |
| GROSS PROFIT | 1,946 | 1,717 | 5,425 | 4,684 |
| Selling and marketing expenses | 205 | 236 | 693 | 661 |
| General and administration expenses | 349 | 285 | 972 | 829 |
554 | 521 | 1,665 | 1,490 | |
| OPERATING PROFIT BEFORE INTEREST, DEPRECIATION AND MINORITY INTEREST | 1,392 | 1,196 | 3,760 | 3,194 |
| Interest |
| - |
| - |
| Depreciation | 153 | 141 | 441 | 369 |
| OPERATING PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEMS | 1,239 | 1,055 | 3,319 | 2,825 |
| Other income, net | 158 | 59 | 565 | 253 |
| Provision for investments |
| - |
| 3 |
| NET PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEMS | 1,397 | 1,114 | 3,884 | 3,075 |
| Provision for taxation | 166 | 130 | 474 | 359 |
| NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST | 1,231 | 984 | 3,410 | 2,716 |
| Income from sale of investments |
| - |
| 6 |
| NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST AND EXCEPTIONAL ITEMS | 1,231 | 984 | 3,410 | 2,722 |
| Minority Interest |
| 1 |
| 10 |
| NET PROFIT AFTER TAX, EXCEPTIONAL ITEMS AND MINORITY INTEREST | 1,231 | 983 | 3,410 | 2,712 |
| Balance brought forward | 6,719 | 3,626 | 4,941 | 2,219 |
| Less: Residual dividend paid |
| - |
| 4 |
| Additional dividend tax |
| - |
| 1 |
6,719 | 3,626 | 4,941 | 2,214 | |
| AMOUNT AVAILABLE FOR APPROPRIATION | 7,950 | 4,609 | 8,351 | 4,926 |
| DIVIDEND |
|
|
|
|
| Interim |
| - | 343 | 278 |
| Final |
| - |
| - |
| Total dividend |
| - | 343 | 278 |
| Dividend tax |
| - | 58 | 39 |
| Balance in Profit and Loss Account | 7,950 | 4,609 | 7,950 | 4,609 |
7,950 | 4,609 | 8,351 | 4,926 | |
| EARNINGS PER SHARE*(Equity shares, par value Rs. 5/- each) |
|
|
|
|
| Before Exceptional Items Basic | 21.54 | 17.64 | 59.70 | 48.75 |
| Diluted | 21.47 | 17.24 | 59.49 | 47.61 |
| After Exceptional Items |
|
|
|
|
| Basic | 21.54 | 17.64 | 59.70 | 48.88 |
| Diluted | 21.47 | 17.24 | 59.49 | 47.73 |
| Number of shares used in computing earnings per share |
|
|
|
|
| Basic | 57,13,46,568 | 55,70,34,398 | 57,12,55,430 | 55,48,77,140 |
Diluted | 57,32,85,874 | 56,97,17,084 | 57,32,10,538 | 56,81,73,059 |
NOTE:
The audited Profit & Loss Account for the quarter and nine months ended December 31, 2007 has been taken on record at the board meeting held on January 11, 2008