Exhibit 99.3
Form of Release to Stock Exchanges
Infosys Limited Regd. office: Electronics City, Hosur Road, | CIN : L85110KA1981PLC013115 Website: www.infosys.com email: investors@infosys.com T: 91 80 2852 0261, F: 91 80 2852 0362 |
Statement of Consolidated Audited Results of Infosys Limited and its subsidiaries for the quarter and nine months ended December 31, 2018 prepared in compliance with the Indian Accounting Standards (Ind-AS)
(in crore, except per equity share data)
Particulars | Quarter ended December 31, | Quarter ended September 30, | Quarter ended December 31, | Nine months ended December 31, | Year ended March 31, | |
2018 | 2018 | 2017 | 2018 | 2017 | 2018 | |
Audited | Audited | Audited | Audited | Audited | Audited | |
Revenue from operations | 21,400 | 20,609 | 17,794 | 61,137 | 52,439 | 70,522 |
Other income, net (Refer Note b) | 753 | 739 | 962 | 2,218 | 2,659 | 3,311 |
Total Income | 22,153 | 21,348 | 18,756 | 63,355 | 55,098 | 73,833 |
Expenses | ||||||
Employee benefit expenses | 11,622 | 11,158 | 9,869 | 33,242 | 28,839 | 38,893 |
Cost of technical sub-contractors | 1,618 | 1,523 | 1,041 | 4,432 | 3,191 | 4,297 |
Travel expenses | 625 | 602 | 496 | 1,830 | 1,503 | 1,995 |
Cost of software packages and others | 712 | 606 | 472 | 1,863 | 1,404 | 1,870 |
Communication expenses | 113 | 121 | 120 | 356 | 376 | 489 |
Consultancy and professional charges | 354 | 289 | 238 | 948 | 753 | 1,043 |
Depreciation and amortisation expenses | 580 | 463 | 498 | 1,480 | 1,404 | 1,863 |
Other expenses | 946 | 953 | 741 | 2,725 | 2,293 | 2,924 |
Reduction in the fair value of Disposal Group held for sale (Refer Note 5 below) | – | – | – | 270 | – | 118 |
Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held For Sale" (Refer Note 5 below) | 451 | – | – | 451 | – | – |
Total expenses | 17,021 | 15,715 | 13,475 | 47,597 | 39,763 | 53,492 |
Profit before non-controlling interest / share in net profit / (loss) of associate | 5,132 | 5,633 | 5,281 | 15,758 | 15,335 | 20,341 |
Share in net profit/(loss) of associate, including impairment of associate (Refer Note c) | – | – | – | – | (71) | (71) |
Profit before tax | 5,132 | 5,633 | 5,281 | 15,758 | 15,264 | 20,270 |
Tax expense: (Refer Note a) | ||||||
Current tax | 1,472 | 1,612 | 144 | 4,534 | 3,115 | 4,581 |
Deferred tax | 50 | (89) | 8 | (108) | (190) | (340) |
Profit for the period | 3,610 | 4,110 | 5,129 | 11,332 | 12,339 | 16,029 |
Other comprehensive income | ||||||
Items that will not be reclassified subsequently to profit or loss | ||||||
Remeasurement of the net defined benefit liability/asset, net | (23) | 3 | 18 | (19) | 21 | 55 |
Equity instruments through other comprehensive income, net | 57 | 8 | (2) | 69 | (2) | 7 |
Items that will be reclassified subsequently to profit or loss | ||||||
Fair value changes on derivatives designated as cash flow hedges, net | 56 | (29) | 5 | 36 | (41) | (39) |
Exchange differences on translation of foreign operations | (288) | 334 | (86) | 133 | 121 | 321 |
Fair value changes on investments, net | 37 | (15) | (25) | (23) | 14 | (1) |
Total other comprehensive income, net of tax | (161) | 301 | (90) | 196 | 113 | 343 |
Total comprehensive income for the period | 3,449 | 4,411 | 5,039 | 11,528 | 12,452 | 16,372 |
Profit attributable to: | ||||||
Owners of the company | 3,609 | 4,110 | 5,129 | 11,330 | 12,339 | 16,029 |
Non-controlling interest | 1 | – | – | 2 | – | – |
3,610 | 4,110 | 5,129 | 11,332 | 12,339 | 16,029 | |
Total comprehensive income attributable to: | ||||||
Owners of the company | 3,448 | 4,411 | 5,039 | 11,526 | 12,452 | 16,372 |
Non-controlling interest | 1 | – | – | 2 | – | – |
3,449 | 4,411 | 5,039 | 11,528 | 12,452 | 16,372 | |
Paid up share capital (par value5/- each, fully paid) | 2,176 | 2,176 | 1,088 | 2,176 | 1,088 | 1,088 |
Other equity* | 63,835 | 63,835 | 67,838 | 63,835 | 67,838 | 63,835 |
Earnings per equity share (par value5/- each) (Refer Note a, d and Note 5)** | ||||||
Basic () | 8.30 | 9.45 | 11.27 | 26.06 | 27.03 | 35.53 |
Diluted () | 8.29 | 9.44 | 11.27 | 26.03 | 27.01 | 35.50 |
* | Represents balance as per the audited Balance Sheet of the previous year as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015 |
** | EPS is not annualized for the quarter and nine months ended December 31, 2018, quarter ended September 30, 2018 and quarter and nine months ended December 31, 2017. |
Notes pertaining to the previous quarters / periods
a) | In December 2017, on account of the conclusion of an Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service (“IRS”), the Company had, in accordance with the APA, reversed income tax expense provision of $225 million (1,432 crore), which pertained to previous periods which are no longer required. Consequently, profit for the quarter and nine months ended December 31, 2017 and year ended March 31, 2018 had increased resulting in an increase in Basic earnings per equity share by3.15 ($0.05) (adjusted for September 2018 bonus issue) for the quarter ended December 31, 2017, by2.91 ($0.04) (adjusted for September 2018 bonus issue) for nine months ended December 31, 2017 and by2.94 ($0.05) (adjusted for September 2018 bonus issue) for the year ended March 31, 2018. |
b) | Other income includes200 crore for the three months ended December 31, 2017 and262 crore each for the nine months ended December 31, 2017 and year ended March 31, 2018 towards the interest on income tax refund. |
c) | During the quarter ended June 30, 2017, the Company had written down the entire carrying value of the investment in its associate DWA Nova LLC amounting to71 crore. |
d) | The Company has allotted 2,18,41,91,490 fully paid up equity shares (including treasury shares) of face value5/- each during the three months ended September 30, 2018 pursuant to a bonus issue approved by the shareholders through postal ballot. The bonus shares were issued by capitalization of profits transferred from general reserve. Bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. The bonus shares allotted rank pari passu in all respects and carry the same rights as the existing equity shareholders and are entitled to participate in full, in any dividend and other corporate action, recommended and declared after the new equity shares are allotted.Consequent to the September 2018 bonus issue, the earnings per share has been adjusted for previous periods presented in accordance with Ind AS 33, Earnings per share. |
Notes pertaining to the current quarter
1. | The audited interim consolidated financial statements for the quarter and nine months ended December 31, 2018 have been taken on record by the Board of Directors at its meeting held on January 11, 2019.The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unqualified audit opinion. The information presented above is extracted from the audited interim consolidated financial statements. The interim consolidated financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter. | |
2. Update on capital allocation policy
In line with the capital allocation policy announced in April 2018, the Board, at its meeting on January 11, 2019, approved the Buyback of Equity Shares, from the open market route through the Indian stock exchanges, amounting to8,260 crore (Maximum Buyback Size) (approximately $1,184 million) at a price not exceeding800 per share (Maximum Buyback Price) (approximately $11.46 per share), subject to shareholders' approval by way of Postal Ballot. Further, the Board also approved a special dividend of4/- per share (approximately $0.06 per share) that would result in a payout of approximately2,107 crore (approximately $302 million) (including dividend distribution tax). | ||
After the execution of the above, along with the special dividend (including dividend distribution tax) of2,633 crore ($386 million) already paid in June 2018, the Company would complete the distribution of13,000 crore to the shareholders, which was announced as part of its capital allocation policy in April 2018. | ||
As the USD/INR* exchange rates have moved from April 2018 when the capital allocation policy was announced, the total capital allocation in US$ terms amounts to $1,872 million (comprising $1,184 million pertaining to buyback as mentioned above, $386 million towards special dividend paid in June 2018 and $302 million towards special dividend to be paid to shareholders in January 2019), | ||
* USD/INR = 69.78 as at December 31, 2018 |
3. Board update
Based on the recommendation of the Nomination and Remuneration Committee, the Board approved the re-appointment of Kiran Mazumdar-Shaw as the Lead Independent Director from April 1, 2019 to March 22, 2023, subject to shareholder’ approval.
4. Management change
a. | The Board has appointed Nilanjan Roy as the Chief Financial Officer of the Company effective March 1, 2019. |
b. | Jayesh Sanghrajka was appointed as the Interim Chief Financial Officer effective November 17, 2018. He will resume his responsibilities as Deputy Chief Financial Officer effective March 1, 2019. |
c. | M.D. Ranganath resigned as Chief Financial Officer effective November 16, 2018. The Board placed on record its deep appreciation for the services rendered by him during his tenure as the Chief Financial Officer. |
5. Reclassification of Disposal Group "Held for Sale''
In the three months ended March 31, 2018, the Company had initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya, collectively referred to as the “Disposal Group”. The Disposal Group was classified and presented separately as “held for sale” and was carried at the lower of carrying value and fair value. Consequently, a reduction in the fair value of Disposal Group held for sale amounting to118 crore in respect of Panaya had been recognized in the consolidated statement of profit and loss for the three months and year ended March 31, 2018. During the three months ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to270 crore in respect of Panaya. | ||
During the three months ended December 31, 2018, based on evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that the Disposal Group does not meet the criteria for "Held for Sale" classification because it is no longer highly probable that sale would be consummated by March 31, 2019 (twelve months from date of initial classification as "Held for Sale”) Accordingly, in accordance with Ind AS 105 -" Non current Assets held for Sale and Discontinued Operations", the assets and liabilities of Panaya and Skava have been included on a line by line basis in the consolidated financial statements for the period and as at December 31, 2018. | ||
On reclassification from “Held for Sale”, the assets of Panaya and Skava have been remeasured in the quarter ended December 31, 2018 at the lower of cost and estimated recoverable amount resulting in recognition of additional depreciation and amortization expenses of88 crore and an adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held for Sale" of451 crore (comprising of358 crore towards goodwill and93 crore towards value of customer relationships) in respect of Skava in the consolidated statement of profit and loss for the three months and nine months ended December 31, 2018. |
6. Acquisitions
Fluido Oy
On October 11, 2018, Infosys Consulting Pte Limited (a wholly owned subsidiary of Infosys Limited) acquired 100% of voting interests in Fluido Oy (Fluido), a Nordic-based salesforce advisor and consulting partner in cloud consulting, implementation and training services for a total consideration of upto Euro 65 million (approximately560 crore), comprising of cash consideration of Euro 45 million (approximately388 crore), contingent consideration of upto Euro 12 million (approximately103 crore) and retention payouts of upto Euro 8 million (approximately69 crore), payable to the employees of Fluido over the next three years, subject to their continuous employment with the group. | ||
Infosys Compaz Pte. Ltd ( formerly Trusted Source Pte. Ltd) | ||
On November 16, 2018, Infosys Consulting Pte Limited (a wholly owned subsidiary of Infosys Limited) acquired 60% stake in Infosys Compaz Pte. Ltd, a Singapore based IT services company.The business acquisition was conducted by entering into a share purchase agreement for a total consideration of up to SGD 17 million (approximately91 crore on acquisition date), which includes a cash consideration of SGD 10 million (approximately54 crore) and a contingent consideration of up to SGD 7 million (approximately37 crore on acquisition date). | ||
Proposed acquisition- Hitachi Procurement Service Co. Ltd | ||
On December 14, 2018, Infosys Consulting Pte Limited (a wholly owned subsidiary of Infosys Limited) entered into a definitive agreement to acquire 81% of the shareholding in Hitachi Procurement Service Co., Ltd., a wholly-owned subsidiary of Hitachi Ltd, Japan, for a consideration including base purchase price of up to JPY 2.76 billion (approximately175 crore) and customary closing adjustments, subject to regulatory approvals and fulfilment of closing conditions. |
7. Compensation changes
On recommendation of the Nomination and Remuneration Committee, the Board in its meeting held on January 11, 2019, approved the following-
i. | Grant of annual Restricted Stock Units (RSUs) having a value of3.25 crores to Salil Parekh, Chief Executive Officer and Managing Director, in accordance with the terms of his appointment as approved by the shareholders. The RSUs are issued under 2015 Stock Incentive Compensation Plan ("Plan"). The grant date for these RSUs is February 1, 2019. The RSUs would vest over a period of three years and the exercise price of RSUs will be equal to the par value of the shares. Value of each RSU will be the closing trading price of the share on National Stock Exchange as of the grant date. | |
ii. | Grant of 68,250 RSU’s to U.B. Pravin Rao, Chief Operating Officer and Whole-time Director, based on his performance in fiscal 2018, in accordance with the terms of his employment as approved by the shareholders. The RSUs are issued under the Plan. The grant date for these RSUs is February 1, 2019. These RSUs would vest over a period of four years and the exercise price of RSUs will be equal to the par value of the shares. | |
iii. | Revision of compensation of Key Management Personnel with effect from October 1, 2018 - Mohit Joshi, Ravi Kumar S., Inderpreet Sawhney, Krishnamurthy Shankar, Jayesh Sanghrajka and A.G.S. Manikantha. The revised aggregate compensation of these KMP includes fixed compensation of18.20 crore and target variable compensation of13.60 crore. Additionally, based on fiscal 2018 performance, 372,100 RSU’s were granted under the Plan. The grant date for these RSU’s is February 1, 2019. The RSUs would vest over a period of four years and the exercise price of RSUs will be equal to the par value of the shares. | |
iv. | Grant of 1,874,600 RSUs to 405 eligible employees under the Plan. The grant date for these RSUs is February 1, 2019. The RSUs would vest over a period of four years and the exercise price of RSUs will be equal to the par value of the shares. |
8. Information on dividends for the quarter and nine months ended December 31, 2018
The Board declared a special dividend of4/- per equity share on January 11, 2019. The record date for the payment is January 25, 2019. The specialdividend will be paid on January 28, 2019. | ||
The Board declared an interim dividend of7/- (par value of5/- each) per equity share on October 16 , 2018 and the same was paid on October 30, 2018. The interim dividend declared in the previous year was6.50/- per equity share. (adjusted for September 2018 bonus issue). |
(in)
Particulars | Quarter ended December 31, | Quarter ended September 30, | Quarter ended December 31, | Nine months ended December 31, | Year ended March 31, | |
2018 | 2018 | 2017 | 2018 | 2017 | 2018 | |
Dividend per share (par value5/- each) | ||||||
Interim dividend | – | 7.00 | – | 7.00 | 6.50 | 6.50 |
Final dividend | – | – | – | – | – | 10.25 |
Special dividend | 4.00 | – | – | 4.00 | – | 5.00 |
Note: Dividend per equity share disclosed for previous periods in the above table represents dividends declared previously, retrospectively adjusted for September 2018 bonus issue. | ||
9. Segment reporting (Consolidated - Audited) | ||
(in crore)
Particulars | Quarter ended December 31, | Quarter ended September 30, | Quarter ended December 31, | Nine months ended December 31, | Year ended March 31, | |
2018 | 2018 | 2017 | 2018 | 2017 | 2018 | |
Revenue by business segment | ||||||
Financial Services(1) | 6,953 | 6,644 | 5,838 | 19,672 | 17,286 | 23,172 |
Retail (2) | 3,503 | 3,469 | 2,888 | 10,140 | 8,467 | 11,345 |
Communication (3) | 2,547 | 2,529 | 2,214 | 7,505 | 6,549 | 8,883 |
Energy, Utilities, Resources and Services | 2,741 | 2,527 | 2,135 | 7,643 | 6,125 | 8,297 |
Manufacturing | 2,166 | 1,989 | 1,701 | 5,992 | 4,936 | 6,671 |
Hi Tech | 1,569 | 1,537 | 1,280 | 4,527 | 3,795 | 5,131 |
Life Sciences(4) | 1,335 | 1,321 | 1,167 | 3,916 | 3,485 | 4,698 |
All other segments(5) | 586 | 593 | 571 | 1,742 | 1,796 | 2,325 |
Total | 21,400 | 20,609 | 17,794 | 61,137 | 52,439 | 70,522 |
Less: Inter-segment revenue | – | – | – | – | – | – |
Net revenue from operations | 21,400 | 20,609 | 17,794 | 61,137 | 52,439 | 70,522 |
Segment profit before tax, depreciation and non-controlling interests: | ||||||
Financial Services(1) | 1,820 | 1,776 | 1,567 | 5,157 | 4,724 | 6,370 |
Retail (2) | 1,037 | 1,034 | 886 | 3,016 | 2,458 | 3,303 |
Communication (3) | 607 | 659 | 644 | 1,937 | 1,917 | 2,619 |
Energy, Utilities , Resources and Services | 687 | 596 | 606 | 1,908 | 1,788 | 2,411 |
Manufacturing | 508 | 465 | 364 | 1,383 | 937 | 1,274 |
Hi-Tech | 367 | 418 | 350 | 1,173 | 1,053 | 1,446 |
Life Sciences(4) | 365 | 376 | 353 | 1,095 | 1,042 | 1,391 |
All other segments(5) | 26 | 33 | 48 | 79 | 165 | 199 |
Total | 5,417 | 5,357 | 4,818 | 15,748 | 14,084 | 19,013 |
Less: Other unallocable expenditure | 587 | 463 | 499 | 1,487 | 1,408 | 1,865 |
Add: Unallocable other income | 753 | 739 | 962 | 2,218 | 2,659 | 3,311 |
Less: Reduction in the fair value of Disposal Group held for sale | – | – | – | 270 | – | 118 |
Less: Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held For Sale" | 451 | – | – | 451 | – | – |
Add: Share in net profit/(loss) of associate, including impairment of associate | – | – | – | – | (71) | (71) |
Profit before tax and non-controlling interests | 5,132 | 5,633 | 5,281 | 15,758 | 15,264 | 20,270 |
(1)Financial Services include enterprises in Financial Services and Insurance
(2)Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics
(3)Communication includes enterprises in Communication, Telecom OEM and Media
(4)Life Sciences includes enterprises in Life sciences and Health care
(5) | All other segments include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services |
Notes on segment information
Business segments
During the quarter ended June 30, 2018, the Company internally reorganized some of its business segments to deepen customer relationships, improve focus of sales investments and increase management oversight. Consequent to the internal reorganization, there were changes in the reportable business segments based on “Management approach” as defined under Ind AS 108, Operating Segments, therefore enterprises in Insurance which was earlier considered under the Life Sciences, Healthcare and Insurance business segment are now considered under the Financial Services business segment and enterprises in Communication, Telecom OEM and Media which was earlier under Energy & Utilities, Communication and Services is now shown as a separate business segment. Allocated expenses of segments include expenses incurred for rendering services from the Company's offshore software development centres and on-site expenses, which are categorized in relation to the associated efforts of the segment. Segmental operating income has changed in line with the internal reorganization as well as changes in the allocation method. The previous period figures, extracted from the audited consolidated financial statements, have been presented after incorporating necessary reclassification adjustments pursuant to changes in the reportable segments.
Segmental capital employed
Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. The Management believes that it is not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.
10. Audited financial results of Infosys Limited (Standalone Information)
(in crore)
Particulars | Quarter ended December 31, | Quarter ended September 30, | Quarter ended December 31, | Nine months ended December 31, | Year ended March 31, | |
2018 | 2018 | 2017 | 2018 | 2017 | 2018 | |
Revenue from operations | 18,819 | 18,297 | 15,631 | 54,171 | 45,957 | 61,941 |
Profit before tax (Refer note (a) below) | 4,942 | 5,251 | 5,922 | 14,974 | 15,519 | 19,908 |
Profit for the period (Refer note (a) below) | 3,501 | 3,879 | 6,004 | 10,882 | 12,998 | 16,155 |
Note: The audited results of Infosys Limited for the above mentioned periods are available on our website, www.infosys.com and on the Stock Exchange website www.nseindia.com and www.bseindia.com. The information above has been extracted from the audited interim condensed financial statements as stated.
a) | In the three months ended March 2018, the Company had initiated identification and evaluation of potential buyers for the sale of its investment in subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya. The investment in these subsidiaries was classified and presented separately as “held for sale” and was carried at the lower of carrying value and fair value. Consequently, the Company has recognized a reduction in the fair value of investment amounting to589 crore during the three months and year ended March 31, 2018 in respect of Panaya in the standalone financial statements of Infosys. During the three months ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of investment amounting to265 crore in respect of Panaya. | |
During the three months ended December 31, 2018, based on evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that the investments in Panaya and Skava does not meet the criteria for "Held for Sale" classification because it is no longer highly probable that sale would be consummated by March 31, 2019 (twelve months from date of initial classification as "Held for Sale”) Accordingly, in accordance with Ind AS 105 -" Non current Assets held for Sale and Discontinued Operations", the investment in subsidiaries, Panaya and Skava have been included in non-current investments line item in the standalone financial statements as at December 31, 2018.
On reclassification from “Held for Sale”, the investment in subsidiaries, Panaya and Skava have been remeasured in the quarter ended December 31, 2018 at the lower of cost and estimated recoverable amount resulting in recognition of an adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held for Sale" of469 crore in respect of Skava in the standalone statement of profit and loss for the three months and nine months ended December 31, 2018. |
By order of the Board | ||||||
for Infosys Limited | ||||||
Bengaluru, India | Salil Parekh | |||||
January 11, 2019 | Chief Executive Officer and Managing Director | |||||
The Board has also taken on record the audited condensed consolidated results of Infosys Limited and its subsidiaries for the quarter and nine months ended December 31, 2018, prepared as per International Financial Reporting Standards (IFRS) and reported in US dollars. A summary of the financial statements is as follows:
(in US$ million, except per equity share data)
Particulars | Quarter ended December 31, | Quarter ended September 30, | Quarter ended December 31, | Nine months ended December 31, | Year ended March 31, | |
2018 | 2018 | 2017 | 2018 | 2017 | 2018 | |
Audited | Audited | Unaudited | Audited | Unaudited | Audited | |
Revenues | 2,987 | 2,921 | 2,755 | 8,740 | 8,134 | 10,939 |
Cost of sales | 1,956 | 1,884 | 1,773 | 5,660 | 5,208 | 7,001 |
Gross profit | 1,031 | 1,037 | 982 | 3,080 | 2,926 | 3,938 |
Operating expenses | 356 | 345 | 313 | 1,042 | 960 | 1,279 |
Operating profit | 675 | 692 | 669 | 2,038 | 1,966 | 2,659 |
Other income, net | 105 | 105 | 149 | 317 | 413 | 513 |
Reduction in the fair value of Disposal Group held for sale (Refer Note a below) | – | – | – | (39) | – | (18) |
Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held for Sale" (Refer Note a below) | (65) | – | – | (65) | – | – |
Share in net profit/(loss) of associate, including impairment | – | – | – | – | (11) | (11) |
Profit before income taxes | 715 | 797 | 818 | 2,251 | 2,368 | 3,143 |
Income tax expense | 213 | 216 | 22 | 633 | 453 | 657 |
Net profit | 502 | 581 | 796 | 1,618 | 1,915 | 2,486 |
Earnings per equity share* | ||||||
Basic | 0.12 | 0.13 | 0.17 | 0.37 | 0.42 | 0.55 |
Diluted | 0.12 | 0.13 | 0.17 | 0.37 | 0.42 | 0.55 |
Total assets | 11,872 | 11,288 | 11,889 | 11,872 | 11,889 | 12,255 |
Cash and cash equivalents and current investments | 3,764 | 3,508 | 3,615 | 3,764 | 3,615 | 4,023 |
* | EPS is not annualized for the quarter and nine months ended December 31, 2018, quarter ended September 30, 2018 and quarter and nine months ended December 31, 2017. |
a. | In the three months ended March 2018, the Company had initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya, collectively referred to as the “Disposal Group”. The Disposal Group was classified and presented separately as “held for sale” and was carried at the lower of carrying value and fair value.Consequently, a reduction in the fair value of Disposal Group held for sale amounting to $18 million in respect of Panaya had been recognized in the consolidated statement of comprehensive income for the three months and year ended March 31, 2018. During the three months ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to $39 million in respect of Panaya. |
During the three months ended December 31, 2018, based on evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that the Disposal Group does not meet the criteria for “Held for Sale" classification because it is no longer highly probable that sale would be consummated by March 31, 2019 (twelve months from date of initial classification as “Held for Sale”) Accordingly, in accordance with IFRS 5 -" Non current Assets held for Sale and Discontinued Operations", the assets and liabilities of Panaya and Skava have been included on a line by line basis in the consolidated financial statements for the period and as at December 31, 2018.
On reclassification from “Held for Sale”, the assets of Panaya and Skava have been remeasured in the quarter ended December 31, 2018 at the lower of cost and estimated recoverable amount resulting in recognition of additional depreciation and amortization expenses of $12 million and an adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held for Sale" of $65 million (comprising of $52 million towards goodwill and $13 million towards value of customer relationships) in respect of Skava in the consolidated statement of comprehensive income for the three months and nine months ended December 31, 2018.
Certain statements mentioned in this release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, 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 fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability 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 Infosys has made strategic investments, withdrawal or expiration 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 our Annual Report on Form 20-F for the fiscal year ended March 31, 2018. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law.