Infosys Ltd. — Interim / Quarterly Report 2015

Dec 31, 2014

Infosys Limited

CIN: L05110H/A1961PL/2313115

Regd. Officer: Electronics City, Hosur Road, Bangalore - 560 100, India

Website: www.infosys.com; email: investone@infosys.com; T: 91 80 2852 0261; F: 91 80 2852 0362

Audited financial results of Infosys Limited for the quarter and nine months ended December 31, 2014. (in F) crore, except share and 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,
	2014	2014	2013	2014	2013	2014
Income from software services and products	12,192	11,663	11,034	35,574	32,875	44,241
Expenses:
Employee benefit expenses	6,358	6,349	6,158	18,052	16,297	24,293
Deferred consideration pertaining to acquisition	55	56	60	168	169	228
Cost of technical sub-contractors	777	670	711	2,073	1,956	2,596
Travel expenses	329	366	315	1,035	1,002	1,287
Cost of software packages and others	290	198	276	756	615	929
Communication expenses	116	86	81	294	244	329
Professional charges	114	87	151	248	228	474
Depreciation and amortization expense	229	251	285	672	702	1,101
Other expenses	495	464	374	1,426	1,221	1,635
Total expenses	6,763	6,527	6,411	20,604	24,624	32,913
Profit from operations before other income	3,429	3,336	3,123	9,770	8,341	11,426
Other income	823	833	798	2,446	1,714	2,578
Profit before exceptional item and tax	4,252	4,169	3,831	12,216	10,115	14,002
Profit on transfer of business(1)	-	412	-	412	-	-
Profit before tax	4,252	4,561	3,831	12,026	10,115	14,002
Tax expense	1,197	1,219	1,096	3,466	2,804	3,908
Net Profit for the period	3,855	3,363	3,735	9,140	7,211	10,184
Paid-up equity share capital (par value ₹2- each fully paid)(2)	572	286	286	572	286	286
Reserves and surplus(3)	41,806	41,806	35,772	41,806	35,772	35,772
Earnings per share (par value of ₹5- each)
Before exceptional Item
Basic	26.73	25.94	23.94	76.38	63.98	89.20
Diluted	26.73	25.94	23.94	76.38	63.98	89.20
After exceptional Item
Basic	26.73	29.45	23.94	79.96	63.98	89.20
Diluted	26.73	29.45	23.94	79.96	63.98	89.20
Total Public Shareholding(4)
Number of shares	81,17,98,995	39,66,88,097	38,26,36,705	81,17,98,995	39,26,36,705	39,02,57,429
Percentage of shareholding	70.68	69.08	68.37	70.68	68.37	67.96
Promoters and Promoter Group Shareholding
Pledged / Encumbered
Number of shares
Percentage of shares (as a % of the total shareholding of promoter and promoter group)
Percentage of shares (as a % of the total share capital of the company)
Non - encumbered
Number of shares	15,02,15,638	9,14,08,078	9,15,06,078	15,02,15,638	9,15,08,078	9,15,08,078
Percentage of shares (as a % of the total shareholding of promoter and promoter group)	100.00	100.00	100.00	100.00	100.00	100.00
Percentage of shares (as a % of the total share capital of the company)	13.08	15.92	15.94	13.08	15.94	15.94

(1) Exceptional item pertains to profit on transfer of business to Edgeverve, a wholly owned subsidiary. (2) net of treasury shares (3) Represents the previous accounting year balance as required under Clause 41 of the Listing Agreement.

#Total public shareholding as defined under Clause 40A of the Listing Agreement excludes shares held by the founders and American Depositary Receipt Holders and as at December 31, 2014, also excludes treasury shares.

Notes:

1. The audited financial statements for the quarter and nine months ended December 31, 2014 have been taken on record by the Board of Directors at its meeting held on January 9, 2015. The statutory auditors have expressed an unqualified audit opinion. The information presented above is extracted from the audited standalone financial statements.

2. Changes to the Board

a) The Board, at the meeting held on December 4, 2014, appointed Prof. John W. Etchenendy as an Independent director effective December 4, 2014. b) Dr. Ormur Goswami retired as a Member of the Board effective December 31, 2014. The Board placed on record its deep appreciation for the services rendered by him during his tenure as a director.

§. Mr. Parvathwesam K. will step down as the Chief Risk & Compliance Officer and Company Secretary effective January 10, 2015. The Board placed on record its deep appreciation for the services rendered by him during his tenure.

1. During the quarter ended June 30, 2014, based on internal and external technical evaluation, the management reassessed, with effect from April 1, 2014, the remaining useful life of assets, primarily consisting of buildings and computers. Accordingly, the useful life of certain assets required change from previous estimates. If the Company had continued with the previously assessed useful lives, change for depreciation for the quarter and nine months ended December 31, 2014 would have been higher by ₹50 crore and ₹331 crore respectively, for the assets held as at April 1, 2014.

2. The Company has advised 57,42,35,100 fully paid up equity shares of face value ₹2- each during the quarter ended December 31, 2014 pursuant to a bonus issue approved by the shareholders through postal ballot by capitalization of securities premium account. The record date fixed by the Board of Directors was December 3, 2014. Bonus share of one equity share for every equity share held, and a bonus issue, i.e., 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. Options granted under the stock option plan have been adjusted for bonus shares. The earnings per share has been adjusted for previous periods presented in accordance with Accounting Standard 25, Earnings per share.

6. Information on dividends for the quarter and nine months ended December 31, 2014

An interim dividend of ₹30- per equity share was declared on October 10, 2014 and paid on October 25, 2014. The interim dividend declared in the previous year was ₹20- per equity share.

(in F)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	Nine months ended December 31,		Year ended March 31,
	2014	2014	2013	2014	2013	2014
Dividend per share (per value ₹5- each)
Interim dividend		36.09		36.09	25.09	25.09
Final dividend						43.09
Total dividend		36.09		36.09	25.09	63.09

The final dividend of ₹40- per equity share for fiscal 2014 was approved by the shareholders at the Annual General Meeting of the company held on June 14, 2014 and the same was paid on June 16, 2014.

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1. Other Information (in F cross)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	Nine months ended December 31,		Year ended March 31,
	2014	2014	2013	2014	2013	2014
Staff costs	6,350	6,340	6,159	16,932	18,297	24,350
Items exceeding 10% of aggregate expenditure
Details of other income:
Interest received on deposits with banks and others	669	636	541	1,912	1,554	2,135
Dividend received on investment in mutual fund units	32	40	35	121	108	137
Miscellaneous income, net	25	18	7	49	20	28
Gains / (losses) on foreign currency, net	99	139	120	364	92	278
Total	823	833	798	2,446	1,774	2,276

1. Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended December 31, 2014

Nature of complaints received	Opening balance	Additions	Disposal	Closing balance
Non-receipt of Dividend/Annual report related	-	130	130	-

1. Segment reporting (Standalone-Audited) (in F cross)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	Nine months ended December 31,		Year ended March 31,
	2014	2014	2013	2014	2013	2014
Revenue by industry segment
Financial Services and Insurance (FSI)	4,161	3,992	4,935	12,049	11,451	15,374
Manufacturing (MFSI)	2,820	2,537	2,437	7,596	7,024	9,434
Energy & utilities, Communication and Services (ECS)	2,556	2,534	2,277	7,276	6,522	8,863
Retail, Consumer Packages/ Goods and Logistics (RCL)	2,113	2,097	2,126	6,272	6,042	8,106
Life Sciences and Healthcare (LSH)	742	703	697	2,078	1,935	2,363
Total	12,162	11,863	11,534	35,374	32,875	44,341
Less: Inter-segment revenue
Net revenue from operations	12,192	11,863	11,534	35,374	32,975	44,341
Segment profit before tax and depreciation
Financial Services and Insurance (FSI)	1,285	1,211	1,243	3,837	3,214	4,003
Manufacturing (MFSI)	706	719	659	2,103	1,749	2,409
Energy & utilities, Communication and Services (ECS)	789	796	687	2,167	1,891	2,717
Retail, Consumer Packages/ Goods and Logistics (RCL)	864	862	829	1,964	1,624	2,231
Life Sciences and Healthcare (LSH)	212	199	196	551	455	621
Total	3,838	3,587	3,408	10,442	9,133	12,527
Less: Other unallocable expenditure	229	251	240	672	762	1,101
Add: Unallocable other income	823	833	706	2,446	1,774	2,579
Profit before exceptional item and tax	4,252	4,168	3,831	12,216	10,115	14,002
Exceptional item21	-	412	-	412	-	-
Profit before tax	4,252	4,081	3,831	12,628	10,115	14,002

21 Exceptional item pertains to profit on transfer of business to Edgeverve, a wholly owned subsidiary.

Notes on segment information:

Primary segments

Effective quarter ended March 31, 2014, the Company reorganized its segments, consequent to which the primary reportable segments of the Company are as set out above. The previous period figures, extracted from audited financial statements, have been presented after incorporating necessary reclassification adjustments pursuant to changes in reportable segments.

Segmental capital employed

Assets and liabilities used in the company'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.

By order of the Board

for Infosys Limited

Dr. Vishal Sikka

Chief Executive Officer

and Managing Director

Bengaluru, India

January 5, 2015

Certain statements in this results 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 1996, 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 to the fiscal year ended March 31, 2014 and our Forms 6-9 for the quarters ended June 30, 2014 and September 30, 2014. 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. In addition, please note that the date of this results is January 28, 2015, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. 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.