Infosys Ltd. — Interim / Quarterly Report 2016

Jul 21, 2015

Infosys Limited

CIN: L85110KA1981PLC013115

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

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

Audited financial results of Infosys Limited for the quarter ended June 30, 2015

(in ₹ crore, except equity share and per equity share data)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2015	2015	2014	2015
Income from software services and products	12,738	11,926	11,319	47,300
Expenses:
Employee benefit expenses	6,817	6,183	6,234	25,115
Deferred consideration pertaining to acquisition	46	51	57	219
Cost of technical sub-contractors	965	836	617	2,909
Travel expenses	432	325	340	1,360
Cost of software packages and others	291	223	268	979
Communication expenses	80	90	92	384
Professional charges	132	148	47	396
Depreciation and amortization expense	252	241	192	913
Other expenses	449	550	467	1,976
Total expenses	9,464	8,647	8,314	34,251
Profit from operations before other income	3,274	3,279	3,005	13,049
Other income	719	891	790	3,337
Profit before exceptional item and tax	3,993	4,170	3,795	16,386
Profit on transfer of business(1)	-	-	-	412
Profit before tax	3,993	4,170	3,795	16,798
Tax expense	1,096	1,146	1,075	4,634
Net Profit for the period	2,897	3,024	2,720	12,164
Paid-up equity share capital (par value ₹5/- each fully paid)(2)	1,148	574	286	574
Reserves and surplus	47,494	47,494	41,806	47,494
Earnings per share (par value of ₹5/- each)a
Before exceptional item
Basic	12.61	13.17	11.90	51.17
Diluted	12.61	13.17	11.90	51.17
After exceptional item
Basic	12.61	13.17	11.90	52.96
Diluted	12.61	13.17	11.90	52.96
Total Public Shareholding *
Number of shares	160,06,77,720	80,65,15,515	38,98,49,697	80,65,15,515
Percentage of shareholding	69.69	70.23	67.89	70.23
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	30,04,31,272	15,02,15,636	9,15,08,078	15,02,15,636
Percentage of shares (as a % of the total shareholding of promoter and promoter group)	100.00	100.00	100.00	100.00
Percentage of shares (as a % of the total share capital of the company)	13.08	13.08	15.94	13.08

(1) Exceptional item pertains to profit on transfer of business to EdgeVerve, a wholly owned subsidiary. (2) net of treasury shares for the quarter ended June 30, 2014. a adjusted for bonus issues *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 June 30, 2015 and March 31, 2015 also excludes treasury shares.

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Notes:

1. The audited financial statements for the quarter ended June 30, 2015 have been taken on record by the Board of Directors at its meeting held on July 21, 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) Effective June 5, 2015, K. V. Kamath stepped down from his position as Chairman of the Board and as an Independent Director of the Company. The Board placed on record its deep sense of appreciation for the services rendered by him, during his tenure. b) On June 5, 2015 the Board appointed R. Seshasayee as Non-Executive Chairman of the Board with immediate effect. c) The Board of Directors at its meeting held on June 22, 2015 appointed A.G.S Manikantha as the Company Secretary. d) Effective July 21, 2015, Roopa Kudva has been appointed as the chairperson of the Audit Committee.

1. Investments - Current and proposed

a) On June 2, 2015, Infosys acquired 100% of the voting interests in Kallidus Inc., U.S., d.b.a Skava (Kallidus), a leading provider of digital experience solutions, including mobile commerce and in-shore shopping experiences to large retail clients and 100% of the voting interests of Skava Systems Private Limited, India, an affiliate of Kallidus. The business acquisition was carried out by entering into a share purchase agreement for a cash consideration of ₹578 crore and a contingent consideration of up to ₹128 crore, the payment of which is dependent upon achievement of certain financial targets by Kallidus over a period of 3 years ending on December 31, 2017. b) On April 24, 2015, the Board of Directors of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with EdgeVerve, a wholly owned subsidiary, to transfer the business of Finacle and Edge Services, subject to securing the requisite approval from shareholders through postal ballot. Subsequently, on June 4, 2015, the shareholders have authorized execution of Business Transfer Agreement and related documents with EdgeVerve, with effect from August 1, 2015 or any other date as may be decided by the Board. The company has undertaken a valuation by an independent valuer and accordingly the business will be transferred for a consideration of up to ₹3,400 crore and up to ₹220 crore for Finacle and Edge Services, respectively. c) On June 22, 2015 the shareholders in the Annual General Meeting, have approved to enter into a contract to purchase, lease, transfer, assign or otherwise acquire the healthcare business, including the rights and properties relating thereto, from Infosys Public Services Inc. (IPS), a wholly-owned subsidiary of the Company. This is for an estimated consideration of up to ₹625 crore approximately to be discharged in a manner and on such terms and conditions as may be mutually agreed upon between the Board of Directors of the company and IPS with effect from a date decided by the Board of directors of the Company.

1. Bonus Issue

The Company has allotted 114,84,72,332 fully paid-up shares of face value of ₹5/- each during the quarter ended June 30, 2015, pursuant to bonus issue approved by the shareholders through postal ballot. The book closure date fixed by the Board was June 17, 2015. Bonus share of one equity share for every equity share held, and 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. Units granted under the RSU plan have been adjusted for bonus shares. The earnings per share have been adjusted for previous periods presented in accordance with AS 20, Earnings per share.

1. Information on dividends for the quarter ended June 30, 2015

(In ₹)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2015	2015	2014	2015
Dividend per share (par value ₹5/- each)
Interim dividend (1)	-	-	-	30.00
Final dividend (2)	-	29.50	-	29.50

(1) not adjusted for bonus issues on December 3, 2014 and June 17, 2015 (2) not adjusted for bonus issue on June 17, 2015

The final dividend of ₹29.50/- per equity share (not adjusted for bonus issue on June 17, 2015) for fiscal 2015 was approved by the shareholders at the Annual General Meeting of the Company held on June 22, 2015 and the same was paid on June 23, 2015.

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6. Other Information

(in ₹ crore)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2015	2015	2014	2015
Staff costs	6,817	6,183	6,234	25,115
Items exceeding 10% of aggregate expenditure	-	-	-	-
Details of other income:
Interest received on deposits with banks and others	640	680	608	2,592
Dividend received on investment in mutual fund units	22	25	49	146
Gain on sale of investments	-	10	-	10
Miscellaneous income, net	82	15	6	64
Gains / (losses) on foreign currency, net	(25)	161	127	525
Total	719	891	790	3,337

7. Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended June 30, 2015

Nature of complaints received	Opening balance	Additions	Disposal	Closing balance
Non-receipt of dividend / Annual report	-	106	106	-

8. Segment reporting (Standalone-Audited)

(in ₹ crore)

Particulars	Quarter ended June 30,	Quarter ended March 31,	Quarter ended June 30,	Year ended March 31,
	2015	2015	2014	2015
Revenue by industry segment
Financial Services and Insurance (FSI)	4,353	4,126	3,896	16,175
Manufacturing (MFG)	2,847	2,634	2,439	10,230
Energy & utilities, Communication and Services (ECS)	2,501	2,377	2,289	9,756
Retail, Consumer Packaged Goods and Logistics (RCL)	2,197	2,097	2,062	8,369
Life Sciences and Healthcare (LSH)	840	692	633	2,770
Total	12,738	11,926	11,319	47,300
Less: Inter-segment revenue	-	-	-	-
Net revenue from operations	12,738	11,926	11,319	47,300
Segment profit before tax and depreciation
Financial Services and Insurance (FSI)	1,235	1,268	1,141	4,905
Manufacturing (MFG)	747	695	676	2,798
Energy & utilities, Communication and Services (ECS)	685	733	602	2,920
Retail, Consumer Packaged Goods and Logistics (RCL)	641	656	638	2,620
Life Sciences and Healthcare (LSH)	218	172	140	723
Total	3,526	3,524	3,197	13,966
Less: Other unallocable expenditure	252	245	192	917
Add: Unallocable other income	719	891	790	3,337
Profit before exceptional item and tax	3,993	4,170	3,795	16,386
Exceptional item(1)	-	-	-	412
Profit before tax	3,993	4,170	3,795	16,798

(1) Exceptional item pertains to profit on transfer of business to EdgeVerve, a wholly owned subsidiary.

Notes on segment information:

Primary segments

The Company's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. Revenues represented along industries served constitute the primary basis of the segmental information set out above. Effective April 1, 2015, the Company reorganized its segments to support its objective of delivery innovation. This structure will help deliver services that will reflect the way technology is consumed in layers by the client's enterprise. However the reorganization did not have any impact in the reportable segments as per Accounting Standard 17 'Segment reporting'.

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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

Bangalore, India July 21, 2015

Certain statements 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, 2015. 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 July 21, 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.