EX-19.1 3 f87169exv19w1.txt EXHIBIT 19.1 Exhibit 19.1 INFOSYS TECHNOLOGIES LIMITED Report for the third quarter ended December 31, 2002 [INFOSYS TECHNOLOGIES LIMITED LOGO] At a glance - Indian GAAP (Non-consolidated financials) -------------------------------------------------------------------------------
Rs. in crore, except per share data --------------------------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended December 31, December 31, Year ended ----------------- --------------------- March 31, 2002 2001 2002 2001 2002 ------ ------ -------- -------- ---------- For the period Total revenue 958.64 660.80 2,602.83 1,923.46 2,603.59 Export revenue 945.18 648.35 2,552.93 1,882.93 2,552.47 Operating profit (PBIDTA) 333.49 267.45 931.66 766.89 1,037.63 PBIDTA/ revenues (%) 34.79% 40.47% 35.79% 39.87% 39.85% Profit after tax (PAT) 256.31 206.04 698.93 597.63 807.96 PAT/revenues (%) 26.74% 31.18% 26.85% 31.07% 31.03% Earnings per share* (par value of Rs. 5 each, fully paid) Basic 38.70 31.14 105.57 90.33 122.12 Diluted 38.22 31.02 104.70 89.86 121.37 Dividend per share NA NA 12.50 7.50 20.00 Dividend amount NA NA 82.76 49.63 132.36 Capital expenditure 50.86 53.07 148.66 284.56 322.74 At the end of the period Total assets 2,707.10 1,949.92 2,080.31 Fixed assets - net 754.91 725.29 718.24 Cash and cash equivalents 1,432.21 866.35 1,026.96 Working capital 1,883.96 1,157.86 1,293.41 Total debt -- -- -- Net worth 2,707.10 1,949.92 2,080.31 Equity 33.11 33.08 33.09 Market capitalization 31,613.32 26,871.66 24,654.33 ---------------------------------------------------------------------------------------------------------------------------------
Note: Market capitalization is calculated by considering the share price at National stock exchange on the shares outstanding at the period/year end. * EPS figures have been calculated for the period and have not been annualized. Total Revenue Year ended March 31, 2002 2,603.59 Quarter ended December 31, 2001 660.80 Quarter ended December 31, 2002 958.64
Exports Year ended March 31, 2002 2,552.47 Quarter ended December 31, 2001 648.35 Quarter ended December 31, 2002 945.18
Net Profit from Ordinary Activities Year ended March 31, 2002 807.96 Quarter ended December 31, 2001 206.04 Quarter ended December 31, 2002 256.31
2 Letter to the shareholder Dear shareholder, We are delighted to report another quarter of robust growth. Our Indian GAAP revenues grew by 9.0% over Q2 FY2003 while net profits from ordinary activities witnessed an increase of 13.5%. Our free cash flows during the quarter amounted to Rs. 142.87 crore. Our revenues in US$ terms grew by 9.6% for the quarter as compared to the quarter ended September 30, 2002. Revenue growth comprised of a volume growth of 10.5% and a price decline of 0.9%, over the previous quarter. The overall economic environment continues to be challenging. In this context, customers are becoming more focused on costs and there is a drive for increased efficiency in operations. Hence, global corporations are seeking robust, financially strong, world-class partners in order to outsource their IT requirements. In this regard, we continue to enjoy the confidence of large marque clients. In fact, we have increased our guidance for revenue and EPS for this fiscal. We added 23 new clients during the quarter. Significant wins include Compass Bank, a U.S. Sunbelt-based financial holding company, Swiss Re Insurance Company, one of the world's leading reinsurers, AT&T Wireless, one of the largest wireless service providers in the world, TTPCom, a leading European supplier of mobile technology, Foster Farms, a large U.S. based poultry company, PerformanceRetail, a leading provider of web-architected software applications for the convenience industry and Island Pacific, the merchandise management systems division of SVI Solutions Inc. Further, we established relationships with many prestigious clients in the healthcare industry. This includes Access Dental, a provider of dental care services and insurance, and Bristol-Myers Squibb, a global pharmaceutical and healthcare products company. The trend towards increased offshore outsourcing also implies increased competition. In order to keep ahead, we need to differentiate ourselves by exhibiting better understanding of the clients' business. Towards this, we have been investing in building domain skills and consulting capabilities. Further, increased activity demands a scalable execution model. In this regard, we have demonstrated the scalability of our operations by adding a net of 948 employees without compromising on operational excellence; gross employee addition for the quarter stood at 1,133. Among these were 272 lateral employees, which include people with experience in various industry domains. The Banking Business Unit continued its growth with the implementation of FINACLE(TM) Core Banking in all the six Lagos offices of Broad Bank Nigeria. The bank has implemented both the Retail Banking and the Trade Finance modules. In addition, three offices of Kakawa Discount House, Nigeria started using FINACLE(TM) Core Banking during this quarter. During the quarter, we have purchased non-exclusive global license to ILink, a signature display software, from Integra Microsystems Private Limited, India. This allows us to make proprietary modifications to the source code and transfer certain other rights in ILink to third parties for use along with its banking products. Our clients continue to value our relationship due to our end-to-end service capabilities and industry expertise. By broadening our service offerings, we have managed a higher share of our clients' wallet. In fact, Progeon, our subsidiary, is currently providing services to four of our clients in the Business Process Management space. Further, we continue to enjoy the confidence of global corporations because of our disciplined execution and delivery of services. This is made possible by the dedicated efforts of all Infoscions. On your behalf, we thank them for contributing to yet another successful quarter. /s/ Nandan M. Nilekani /s/ S. Gopalakrishnan Bangalore Nandan M. Nilekani S. Gopalakrishnan January 10, 2003 Chief Executive Officer, Chief Operating Officer President and Managing and Deputy Managing Director Director 3 Auditors' report We have audited the attached Balance Sheet of Infosys Technologies Limited (the Company) as at December 31, 2002, the Profit and Loss Account and the Cash Flow Statement of the Company for the quarter and nine months then ended, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report as follows: (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) in our opinion, proper books of account have been kept by the Company so far as appears from our examination of those books; (c) the Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statements comply with the Accounting Standards issued by the Institute of Chartered Accountants of India, to the extent applicable; and (e) in our opinion and to the best of our information and according to the explanations given to us, the accounts give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2002; (ii) in the case of the Profit and Loss Accounts, of the profit of the Company for the quarter and nine months then ended; and (iii) in the case of the Cash Flow Statements, of the cash flows of the Company for the quarter and nine months ended on that date. for Bharat S Raut & Co. Chartered Accountants S Balasubrahmanyam Partner Bangalore January 10, 2003 4 Balance Sheet as at -------------------------------------------------------------------------------
in Rs. crore ------------------------------------------------------------------------------- December 31, -------------------- March 31, 2002 2001 2002 -------- -------- --------- SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share capital 33.11 33.08 33.09 Reserves and surplus 2,673.99 1,916.84 2,047.22 -------- -------- -------- 2,707.10 1,949.92 2,080.31 ======== ======== ======== APPLICATION OF FUNDS FIXED ASSETS Original cost 1,194.24 849.45 960.60 Less: Depreciation and amortization 525.74 350.61 393.03 -------- -------- -------- Net book value 668.50 498.84 567.57 Add: Capital work-in-progress 86.41 226.45 150.67 -------- -------- -------- 754.91 725.29 718.24 INVESTMENTS 33.20 44.44 44.44 DEFERRED TAX ASSETS 35.03 22.33 24.22 CURRENT ASSETS, LOANS AND ADVANCES Sundry debtors 487.32 310.53 336.73 Cash and bank balances 1,129.87 609.55 772.22 Loans and advances 948.47 634.58 643.87 -------- -------- -------- 2,565.66 1,554.66 1,752.82 Less: Current liabilities 279.38 163.56 126.11 Provisions 402.32 233.24 333.30 -------- -------- -------- NET CURRENT ASSETS 1,883.96 1,157.86 1,293.41 -------- -------- -------- 2,707.10 1,949.92 2,080.31 ======== ======== ========
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS The schedules referred to above and the notes thereon form an integral part of the Balance Sheet. This is the Balance Sheet referred to in our report of even date. for Bharat S Raut & Co. Chartered Accountants S. Balasubrahmanyam N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Partner Chairman and Chief Mentor Chief Executive Officer, Chief Operating Officer Director President and Managing Director and Director Deputy Marti G. Subrahmanyam Managing Director Omkar Goswami Director Philip Yeo Director Director Jitendra Vir Singh Larry Pressler Director K. Dinesh Director Claude Smadja Director Director Rama Bijapurkar S. D. Shibulal Director V. Balakrishnan Director T. V. Mohandas Pai Company Secretary Director and Chief Srinath Batni and Vice President - Financial Officer Director Finance
Bangalore January 10, 2003 5 Profit and loss account for the -------------------------------------------------------------------------------
in Rs. crore except per share data ---------------------------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended December 31, December 31, Year ended ------------------------- ------------------------- March 31, 2002 2001 2002 2001 2002 ---------- ---------- ---------- ---------- ---------- INCOME Software services and products Overseas 945.18 648.35 2,552.93 1,882.93 2,552.47 Domestic 13.46 12.45 49.90 40.53 51.12 ---------- ---------- ---------- ---------- ---------- 958.64 660.80 2,602.83 1,923.46 2,603.59 SOFTWARE DEVELOPMENT EXPENSES 481.62 309.50 1,283.50 902.01 1,224.82 ---------- ---------- ---------- ---------- ---------- GROSS PROFIT 477.02 351.30 1,319.33 1,021.45 1,378.77 SELLING AND MARKETING EXPENSES 73.60 32.85 198.02 93.96 129.79 GENERAL AND ADMINISTRATION EXPENSES 69.93 51.00 189.65 160.60 211.35 ---------- ---------- ---------- ---------- ---------- 143.53 83.85 387.67 254.56 341.14 OPERATING PROFIT (PBIDTA) 333.49 267.45 931.66 766.89 1,037.63 Interest -- -- -- -- -- Depreciation & amortization 49.48 41.33 136.19 115.83 160.65 ---------- ---------- ---------- ---------- ---------- OPERATING PROFIT AFTER INTEREST, DEPRECIATION AND AMORTIZATION 284.01 226.12 795.47 651.06 876.98 Other income 29.80 14.92 72.22 43.07 66.41 Provision for investments -- -- 23.76 -- -- ---------- ---------- ---------- ---------- ---------- PROFIT BEFORE TAX 313.81 241.04 843.93 694.13 943.39 Provision for taxation 57.50 35.00 145.00 96.50 135.43 ---------- ---------- ---------- ---------- ---------- NET PROFIT AFTER TAX 256.31 206.04 698.93 597.63 807.96 ---------- ---------- ---------- ---------- ---------- AMOUNT AVAILABLE FOR APPROPRIATION 256.31 206.04 698.93 597.63 807.96 ---------- ---------- ---------- ---------- ---------- DIVIDEND Interim -- -- 82.76 49.62 49.63 Final -- -- -- -- 82.73 Dividend Tax -- -- -- 5.06 5.06 Amount transferred - general reserve -- -- -- -- 670.54 Balance in Profit and Loss Account 256.31 206.04 616.17 542.95 -- ---------- ---------- ---------- ---------- ---------- 256.31 206.04 698.93 597.63 807.96 ========== ========== ========== ========== ========== EARNINGS PER SHARE (equity shares, par value Rs. 5/- each) Basic 38.70 31.14 105.57 90.33 122.12 Diluted 38.22 31.02 104.70 89.86 121.37 Number of shares used in computing earnings per share Basic 6,62,21,577 6,61,64,388 6,62,02,947 6,61,61,389 6,61,62,274 Diluted 6,70,57,160 6,64,27,919 6,67,55,529 6,65,03,734 6,65,67,575 ========== ========== ========== ========== ==========
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS The schedules referred to above and the notes thereon form an integral part of the Profit and Loss Account. This is the Profit and Loss Account referred to in our report of even date. for Bharat S Raut & Co. Chartered Accountants S. Balasubrahmanyam N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Partner Chairman and Chief Mentor Chief Executive Officer, Chief Operating Officer Director President and Managing Director and Director Deputy Marti G. Subrahmanyam Managing Director Omkar Goswami Director Philip Yeo Director Director Jitendra Vir Singh Larry Pressler Director K. Dinesh Director Claude Smadja Director Director Rama Bijapurkar S. D. Shibulal Director V. Balakrishnan Director T. V. Mohandas Pai Company Secretary Director and Chief Srinath Batni and Vice President - Financial Officer Director Finance
Bangalore January 10, 2003 6 Schedules to the profit and loss account for the -------------------------------------------------------------------------------
in Rs. crore --------------------------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended Year ended December 31, December 31, March 31, --------------------- --------------------- ---------- 2002 2001 2002 2001 2002 -------- -------- -------- -------- ---------- SOFTWARE DEVELOPMENT EXPENSES Salaries and bonus including overseas staff expenses 378.90 252.83 1,019.82 719.81 976.11 Staff welfare 2.13 1.42 5.42 4.86 6.14 Contribution to provident and other funds 8.43 6.51 21.70 19.00 25.63 Foreign travel expenses 41.52 26.05 119.80 82.52 113.12 Consumables 1.77 1.16 4.19 2.23 3.22 Cost of software packages for own use 22.21 8.99 43.27 26.05 34.44 service delivery to clients 2.34 1.53 9.96 7.57 9.17 Provision for post-sales client support (3.76) (0.04) (4.06) 1.01 3.65 Computer maintenance 2.58 2.01 6.96 4.92 7.11 Communication expenses 5.73 7.87 17.99 28.61 36.11 Consultancy charges 19.77 1.17 38.45 5.43 10.12 -------- -------- -------- -------- -------- 481.62 309.50 1,283.50 902.01 1,224.82 ======== ======== ======== ======== ======== SELLING AND MARKETING EXPENSES Salaries and bonus including overseas staff expenses 40.24 14.65 103.25 45.17 61.04 Staff welfare 0.16 0.05 0.47 0.22 0.27 Contribution to provident and other funds 0.23 0.05 0.47 0.12 0.22 Foreign travel expenses 12.25 5.18 30.84 12.67 18.66 Consumables 0.07 -- 0.14 0.01 0.02 Cost of software packages for own use 0.01 0.02 0.04 0.10 0.58 Communication expenses 0.13 0.17 0.37 0.26 0.38 Traveling and conveyance 0.37 0.51 0.82 2.88 3.14 Rent 1.29 0.77 3.40 3.40 4.30 Telephone charges 1.40 0.84 3.92 2.36 3.26 Professional charges 3.03 1.98 8.27 4.09 5.90 Printing and stationery 0.25 0.43 1.02 1.18 1.55 Advertisements 0.33 0.10 0.73 0.13 0.31 Brand building 7.00 2.53 24.36 10.19 13.16 Office maintenance 1.66 0.08 2.16 0.20 0.31 Repairs to plant and machinery -- -- -- 0.01 0.01 Power and fuel 0.04 0.01 0.15 0.05 0.06 Insurance charges 0.03 -- 0.06 -- -- Rates and taxes 0.02 -- 0.25 0.23 0.33 Bank charges and commission 0.03 -- 0.07 0.02 0.03 Commission charges 3.28 4.13 9.50 6.13 10.82 Marketing expenses 1.65 1.19 4.96 3.84 4.67 Sales promotion expenses 0.13 0.16 0.33 0.37 0.44 Other miscellaneous expenses -- -- 2.44 0.33 0.33 -------- -------- -------- -------- -------- 73.60 32.85 198.02 93.96 129.79 ======== ======== ======== ======== ========
7 Schedules to the profit and loss account for the -------------------------------------------------------------------------------
in Rs. crore -------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended Year ended December 31, December 31, March 31, ---------------- ----------------- ---------- 2002 2001 2002 2001 2002 ------ ------ ------ ------ ---------- GENERAL AND ADMINISTRATION EXPENSES Salaries and bonus including overseas staff expenses 15.35 11.40 41.73 34.21 45.48 Contribution to provident and other funds 0.88 0.79 2.42 2.47 2.98 Foreign travel expenses 1.70 0.99 5.65 3.50 4.81 Traveling and conveyance 4.47 4.09 11.13 11.53 15.48 Rent 6.75 5.34 17.50 14.75 20.11 Telephone charges 5.82 2.28 14.83 9.04 11.45 Professional charges 9.37 3.61 23.88 10.09 16.23 Printing and stationery 1.02 0.71 3.68 4.13 4.75 Advertisements 1.05 0.62 2.72 2.04 2.78 Office maintenance 5.03 3.68 12.94 10.26 13.81 Repairs to building 2.06 1.29 5.08 5.07 8.50 Repairs to plant and machinery 1.66 0.58 3.75 1.84 2.48 Power and fuel 5.66 4.68 16.64 14.04 18.90 Insurance charges 2.34 1.47 6.80 3.97 5.34 Rates and taxes 1.33 1.40 3.60 3.10 3.93 Donations 1.52 0.84 4.56 4.82 5.12 Auditor's remuneration audit fees 0.07 0.05 0.20 0.16 0.21 certification charges -- -- -- -- 0.02 out-of-pocket expenses 0.01 0.01 0.02 0.02 0.02 Provision for bad and doubtful debts 0.33 2.77 0.51 13.24 13.09 Provision for doubtful loans and advances (0.02) -- (0.07) 0.06 0.42 Bank charges and commission 0.18 0.04 0.50 0.16 0.68 Commission to non-whole time directors 0.24 0.24 0.72 0.72 0.98 Postage and courier 1.03 0.77 3.00 2.70 3.23 Books and periodicals 0.32 0.29 0.97 0.87 1.14 Research grants -- 0.25 -- 0.75 0.75 Freight charges 0.16 0.17 0.43 0.38 0.52 Professional membership and seminar participation fees 0.86 0.68 2.51 1.59 2.20 Other miscellaneous expenses 0.74 1.96 3.95 5.09 5.94 ------ ------ ------ ------ ------ 69.93 51.00 189.65 160.60 211.35 ====== ====== ====== ====== ====== OTHER INCOME Interest received on deposits with banks and others* 19.52 12.36 55.89 35.96 51.23 Miscellaneous income 1.41 0.49 2.59 1.22 1.92 Exchange differences 8.87 2.07 13.74 5.89 13.26 ------ ------ ------ ------ ------ 29.80 14.92 72.22 43.07 66.41 ====== ====== ====== ====== ====== * Tax deducted at source 4.04 2.16 10.47 5.95 8.28 PROVISION FOR TAXATION Current period/year Income taxes 58.95 38.69 155.81 103.30 143.19 Deferred taxes (1.45) (3.69) (10.81) (6.80) (7.76) ------ ------ ------ ------ ------ 57.50 35.00 145.00 96.50 135.43 ====== ====== ====== ====== ======
8 Extracts of significant accounting policies and notes on accounts ------------------------------------------------------------------------------- Company overview Infosys Technologies Limited ("Infosys") alongwith its majority owned and controlled subsidiary, Progeon Limited ("Progeon"), is a leading global technology and services organization engaged in delivering a comprehensive range of end-to-end solutions to customers. Infosys provides solutions across the entire software and process life-cycles including design, development, implementation, maintenance and management using its Global Delivery Model. Infosys offers the following services: consulting, software development, software re-engineering, systems integration, package evaluation and implementation, software maintenance and business process management services ("BPM"). Infosys also provides proprietary software products for the banking industry. Management's Statement on significant accounting policies contained in the audited financial statements. There are no changes in the accounting policies during the quarter ended December 31, 2002. The significant accounting policies of the company relate to revenue recognition, expenditure, fixed assets and capital work-in-progress, depreciation, retirement benefits to employees-principally gratuity, superannuation and provident fund benefits, research and development, income tax, earning per share, foreign currency transactions and investments. 1.1 Significant accounting policies 1.1.1 Basis of preparation of financial statements The accompanying financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ("GAAP") under the historical cost convention on the accruals basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India ("ICAI") and the provisions of the Companies Act, 1956. These accounting policies have been consistently applied, except for applicable recently issued accounting standards made mandatory by the ICAI effective the current fiscal year that were adopted by the company, as described below. All amounts are stated in Indian Rupees, except as otherwise specified. Effective the current fiscal year, the company has voluntarily adopted the applicable accounting standard on intangible assets, which is mandatory effective the year commencing April 1, 2003. Management has also evaluated the effect of the other recently issued accounting standards such as discontinuing operations, reporting of interests in joint ventures and impairment of assets (although all these accounting standards are not mandatory for the fiscal year ending 2003). These accounting standards do not have a material impact on the financial statements of the company. The preparation of the financial statements in conformity with GAAP requires the management of the company ("Management") to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include accounting for contract costs expected to be incurred to complete software development, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, provision for post sales customer support and the useful lives of fixed assets and intangible assets. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Actual results could differ from those estimates. 1.2 Notes on accounts Pursuant to an application by the management, the Department of Company Affairs in their letter of January 23, 2002 granted the company approval to present the financial statements in Rupees crore. Accordingly, all amounts in the financial statements are presented in Rupees crore, except for per share data and as otherwise stated. All exact amounts are stated with the suffix "/-". One crore equals 10 million. The previous period's/year's figures have been regrouped/reclassified, wherever necessary, to conform to the current period's/year's presentation. 1.2.1 Aggregate expenses Following are the aggregate amounts incurred on certain specific expenses that are required to be disclosed under Schedule VI to the Companies Act, 1956 :
------------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended December 31, December 31, Year ended ------------------- ------------------- March 31, 2002 2001 2002 2001 2002 -------- -------- -------- -------- ---------- Salaries and bonus including overseas staff expenses 434.49 278.88 1,164.80 799.19 1,082.63 Staff welfare 2.29 1.47 5.89 5.08 6.41 Contribution to provident and other funds 9.54 7.35 24.59 21.59 28.83 Foreign travel expenses 55.47 32.22 156.29 98.69 136.59 Consumables 1.84 1.16 4.33 2.24 3.24 Cost of software packages for - own use 22.22 9.01 43.31 26.15 35.02 Cost of software packages for service delivery to clients 2.34 1.53 9.96 7.57 9.17 Computer maintenance 2.58 2.01 6.96 4.92 7.11 Communication expenses 5.86 8.04 18.36 28.87 36.49 Consultancy charges 19.77 1.17 38.45 5.43 10.12 Provision for post-sales client support (3.76) (0.04) (4.06) 1.01 3.65 Traveling and conveyance 4.84 4.60 11.95 14.41 18.62 Rent 8.04 6.11 20.90 18.15 24.41 Telephone charges 7.22 3.12 18.75 11.40 14.71 Professional charges 12.40 5.59 32.15 14.18 22.13 Printing and stationery 1.27 1.14 4.70 5.31 6.30 Advertisements 1.38 0.72 3.45 2.17 3.09 Office maintenance 6.69 3.76 15.10 10.46 14.12 Repairs to building 2.06 1.29 5.08 5.07 8.50 Repairs to plant and machinery 1.66 0.58 3.75 1.85 2.49 Power and fuel 5.70 4.69 16.79 14.09 18.96 Brand building 7.00 2.53 24.36 10.19 13.16 Insurance charges 2.37 1.47 6.86 3.97 5.34 Rates and taxes 1.35 1.40 3.85 3.33 4.26 Commission charges 3.28 4.13 9.50 6.13 10.82 -------------------------------------------------------------------------------------------------------------------
9 1.2.1 Aggregate expenses (continued)
-------------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended Year ended December 31, December 31, March 31, ------------------- --------------------- ---------- 2002 2001 2002 2001 2002 -------- -------- -------- -------- ---------- Donations 1.52 0.84 4.56 4.82 5.12 Auditor's remuneration - audit fees 0.07 0.05 0.20 0.16 0.21 - certification charges -- -- -- -- 0.02 - out-of-pocket expenses 0.01 0.01 0.02 0.02 0.02 Provision for bad and doubtful debts 0.33 2.77 0.51 13.24 13.09 Provision for doubtful loans and advances (0.02) -- (0.07) 0.06 0.42 Bank charges and commission 0.21 0.04 0.57 0.18 0.71 Commission to non-whole time directors 0.24 0.24 0.72 0.72 0.98 Postage and courier 1.03 0.77 3.00 2.70 3.23 Books and periodicals 0.32 0.29 0.97 0.87 1.14 Research grants -- 0.25 -- 0.75 0.75 Freight charges 0.16 0.17 0.43 0.38 0.52 Professional membership and seminar participation fees 0.86 0.68 2.51 1.59 2.20 Marketing expenses 1.65 1.19 4.96 3.84 4.67 Sales promotion expenses 0.13 0.16 0.33 0.37 0.44 Other miscellaneous expenses 0.74 1.96 6.39 5.42 6.27 -------- -------- -------- -------- --------- 625.15 393.35 1,671.17 1,156.57 1,565.96 ======== ======== ======== ======== =========
1.2.2 Obligations on long-term non-cancelable operating leases The lease rentals charged during the period and maximum obligations on long-term non-cancelable operating leases payable as per the rentals stated in the respective agreements are as follows:
---------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended December 31, December 31, Year ended ---------------- ----------------- March 31, 2002 2001 2002 2001 2002 ---- ---- ----- ----- ---------- Lease rentals recognized during the period/year 8.04 6.11 20.90 18.15 19.78 Lease obligations Within one year of the balance sheet date 17.96 16.64 16.95 Due in a period between one year and five years 40.05 49.91 46.90 Due after five years 5.40 7.68 7.20 ----------------------------------------------------------------------------------------------------------------
The operating lease arrangements extend for a maximum of ten years from their respective dates of inception and relate to rented overseas premises. Lease rental commitments on a contract with Progeon Limited ("Progeon"), a subsidiary company, as at December 31, 2002 due to Infosys within one year of the balance sheet date amounted to Rs. 2.46 and due in the period between one year and five years amounted to Rs. 3.76. The lease for premises extends for a maximum period of three years from quarter ended June 30, 2002 (the period of inception). Fixed Assets stated below have been provided on operating lease to Progeon, which is under the same management, as at December 31, 2002:
----------------------------------------------------------------------------------------- Particulars Original cost Accumulated depreciation Net book value ----------------------------------------------------------------------------------------- Building 10.13 0.45 9.68 Plant and machinery 2.06 0.40 1.66 Computers 0.85 0.32 0.53 Furniture & fixtures 1.74 0.50 1.24 ----- ---- ----- Total 14.78 1.67 13.11 ----- ---- -----
The aggregate depreciation charged on the above assets for the quarter and nine months ended December 31, 2002 amounted to Rs. 0.75 and Rs.1.67 respectively. The rental income from Progeon for the quarter and nine months ended December 31, 2002 amounted to Rs.0.62 and Rs.1.16 respectively. 1.2.3 Related party transactions The company entered into related party transactions during the year ended March 31, 2002 with Yantra Corporation, USA, the subsidiary of the company until February 27, 2002, and key management personnel. The transactions with Yantra Corporation comprise sales of Rs. 4.43 during the period from April 1, 2001 until February 27, 2002. The outstanding dues from Yantra Corporation as at December 31, 2002 were Rs.0.07. Such dues as at December 31, 2001 were Rs.0.42 and as at March 31, 2002 were Rs. 0.34. The company entered into related party transactions during the period ended December 31, 2002 with Progeon, the subsidiary company, under the same management. The transactions are set out below.
----------------------------------------------------------------------------------------------------------------- Particulars Quarter ended Nine months ended December 31, 2002 December 31, 2002 ----------------- ----------------- Capital transactions Financing transactions - amount paid to Progeon for issue of 1,22,49,993 fully paid equity shares of Rs 10/- each at par -- 12.25 ---- ---- Revenue transactions Purchase of services -- 2.08 ---- ---- Sale of services Business consulting services 1.83 2.94 Shared services including facilities and personnel 2.94 5.31 ---- ---- 4.77 8.25 ---- ----
10 During the quarter ended December 31, 2002 and nine months ended December 31, 2002 an amount of Rs. 1.50 and Rs. 4.03 respectively has been donated to Infosys Foundation, a not-for-profit trust, in which certain directors of the company are trustees. Donation to the foundation for the quarter ended December 31, 2001, nine months ended December 31, 2001 and year ended March 31, 2002 were Rs. 0.50, Rs. 3.50 and Rs. 3.75 respectively. 1.2.4 Transactions with Key Management personnel Our policy in determining our executive officers for reporting purposes has traditionally been to include all statutory officers and all members of our Management Council. As of April, 2002 in line with our growth and strategic objectives, we divided our Management Council into two levels comprising of senior executives and all other members. In accordance with this policy, our directors and executive officers, which include only senior members of our Management Council, who we believe are our key management personnel. Particulars of remuneration and other benefits provided to key management personnel during the quarters ended December 31, 2002, 2001, nine months ended December 31, 2002, 2001 and the year ended March 31, 2002, are set out below.
------------------------------------------------------------------------------------------------------------------------------------ Salary Contributions Perquisites Commission* Sitting Reimbursement Total to provident and incentives fees of expenses remuneration and other funds ------------------------------------------------------------------------------------------------------------------------------------ Executive Directors Quarter ended December 31, 2002 0.42 0.06 1.88 -- -- -- 2.36 Quarter ended December 31, 2001 0.68 0.07 0.13 -- -- -- 0.88 Nine months ended December 31, 2002 2.19 0.12 3.24 -- -- -- 5.55 Nine months ended December 31, 2001 1.56 0.14 1.01 -- -- -- 2.71 Year ended March 31, 2002 2.01 0.21 1.08 -- -- -- 3.30 ==================================================================================================================================== Independent Directors Quarter ended December 31, 2002 -- -- -- -- -- 0.11 0.11 Quarter ended December 31, 2001 -- -- -- -- -- 0.01 0.01 Nine months ended December 31, 2002 -- -- -- -- 0.05 0.37 0.42 Nine months ended December 31, 2001 -- -- -- -- 0.04 0.18 0.22 Year ended March 31, 2002 -- -- -- 0.96 0.06 0.27 1.29 ====================================================================================================================================
* An amount of Rs. 0.24 and Rs. 0.72 provided during the quarter and nine months ended December 31, 2002, such provision for the quarter and nine months ended December 31, 2001 were Rs. 0.24 and Rs. 0.72 and for the year ended March 31, 2002, Rs. 0.96.
Salary Contributions Perquisites Total Total Outstanding to provident and incentives remuneration loans granted loans and and other funds advances ------------------------------------------------------------------------------------------------------------------------------------ Other Senior Management Personnel Quarter ended December 31, 2002 0.32 0.03 0.61 0.96 -- 0.07 Quarter ended December 31, 2001 0.27 0.02 0.30 0.59 -- 0.09 Nine months ended December 31, 2002 0.91 0.08 0.92 1.91 -- 0.07 Nine months ended December 31, 2001 0.81 0.08 0.67 1.56 -- 0.09 Year ended March 31, 2002 1.10 0.11 0.79 2.00 -- 0.08 ====================================================================================================================================
In addition, the details of stock options granted to non-whole time directors and other senior officers during the quarters ended December 31, 2002, 2001, nine months ended December 31, 2002, 2001 and the year ended March 31, 2002 are as follows:
------------------------------------------------------------------------------------------------------------------------------------ Date of Grant Option plan Number of Exercise price Expiration of options granted (in Rs.) options ------------------------------------------------------------------------------------------------------------------------------------ Non-Wholetime Directors Deepak M. Satwalekar April 11, 2001 1999 7,000 3,215.60 April 11, 2011 Marti G. Subrahmanyam April 11, 2001 1999 6,000 3,215.60 April 11, 2011 Philip Yeo April 11, 2001 1999 3,000 3,215.60 April 11, 2011 Jitendra Vir Singh April 11, 2001 1999 2,000 3,215.60 April 11, 2011 Omkar Goswami April 11, 2001 1999 2,000 3,215.60 April 11, 2011 Larry Pressler April 11, 2001 1999 2,000 3,215.60 April 11, 2011 Rama Bijapurkar April 11, 2001 1999 2,000 3,215.60 April 11, 2011 Claude Smadja July 10, 2002 1999 2,000 3,333.65 October 24, 2011 Other Senior Management Personnel Girish G. Vaidya October 29, 2001 1999 3,000 3,106.75 October 29, 2011 Basab Pradhan October 27, 2001 1998 4,000 2,366.85 October 27, 2011 V. Balakrishnan October 29, 2001 1999 2,000 3,106.75 October 29, 2011 ------------------------------------------------------------------------------------------------------------------------------------
1.2.5 Pro-forma disclosures relating to the Employee Stock Option Plans ("ESOPs") The company's 1994 stock option plan was established prior to the SEBI guidelines on stock options. Had the stock compensation costs for this stock option plan been determined as per the guidelines issued by SEBI, the company's reported net profit would have been reduced to the pro forma amounts indicated below.
----------------------------------------------------------------------------------------------------------------------- Quarter ended Nine months ended Year ended December 31, December 31, March 31, 2002 2001 2002 2001 2002 ----------------------------------------------------------------------------------------------------------------------- Net profit: ----------------------------------------------------------------------------------------------------------------------- - As reported 256.31 206.34 698.93 597.63 807.96 - Adjusted pro forma 250.31 200.11 680.80 579.86 784.18 -----------------------------------------------------------------------------------------------------------------------
11 1.2.6 Intangible Assets During the nine months ended December 31, 2002, the company entered into arrangements to purchase intellectual property rights ("IPR"). Details of the arrangements are as follows: - Purchase of intellectual property rights in the Trade IQ, treasury management product, from IQ Financial Systems Inc., USA ("IQFS") in the first quarter, for the banking group. The aggregate consideration paid was Rs. 18.94 (US$ 3.88 million). Management estimates the useful life of the IPR as two years. - An agreement to purchase IPR in AUTOLAY, a commercial software application product used in the design of high performance structural systems, with the Aeronautical Development Agency, India ("ADA") in the first quarter for the engineering service and consulting practice. The company has a firm commitment to share revenues with ADA for a maximum of US$ 5 million (Rs 24.50) payable by 10 years of the contract date. The ownership of intellectual property in AUTOLAY will transfer to the company on remittance of the consideration to ADA. The committed consideration is recorded as IPR. Management estimates the useful life of the IPR as five years. - Purchase of a non-exclusive global license in ILink, a signature display software, from Integra Microsystems Private Limited, India in the third quarter. The arrangement allows the company to make proprietary modifications to source code and transfer certain other rights in ILink to third parties for use along with its banking products. The consideration amounts to Rs. 0.65. Management estimates the useful life of the license as one year. 1.2.7 Investment activity The following are the particulars of strategic investments made during the quarters and nine months ended December 31, 2002 and December 31, 2001 and year ended March 31, 2002 respectively:
------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended Year ended December 31, December 31, March 31, ------------ ------------ --------- Investee company 2002 2001 2002 2001 2002 ------------------------------------------------------------------------------------------------------------------ Workadia Inc., USA -- -- -- 10.32 10.32 Progeon Limited, India -- -- 12.25 -- -- M-Commerce Ventures Pte. Limited, Singapore -- -- 0.27 -- -- ------------------------------------------------------------------------------------------------------------------ -- -- 12.52 10.32 10.32 ==================================================================================================================
Investments in Workadia Inc., USA ("Workadia") comprise of 4,40,000 fully paid Series "B" convertible preferred stock, par value of US$ 0.001, at US$ 5.00 each. Workadia will provide companies with comprehensive, customizable business intranets through browser accessed hosted portals and also offer consulting services to help customers select and deploy their intranet applications, content and services. Progeon was incorporated on April 3, 2002, and is a majority owned and controlled subsidiary, established to provide business process management and transitioning services. As at the balance sheet date, the company has invested Rs 12.25 in 1,22,49,993 fully paid equity shares in Progeon of face value Rs 10/- each, at par. Progeon seeks to leverage the benefits of service delivery globalization, process redesign and technology to drive efficiency and cost effectiveness in customer business processes. Progeon obtained its financial closure by securing funding of Rs 49.00 from Citicorp International Finance Corporation, USA ("CIFC") in exchange for 43,75,000 cumulative, convertible, redeemable preferred shares of face value Rs 100/- at a premium of Rs 12/- per share. The preference shares are convertible to an equal number of equity shares based on certain events as agreed between the company and CIFC. During the nine months ended December 31, 2002 the company invested Rs 0.27 in M-Commerce Ventures Pte Limited, Singapore ("M-Commerce") for 10 ordinary shares of face value Singapore $ ("S$") 1/- each fully paid at par and 90 redeemable preference shares of face value S$ 1/- each fully paid for a premium of S$ 1,110. Accordingly, the aggregate investment in M-Commerce as at December 31, 2002 amounts to Rs 2.11 (Rs 1.84 as at December 31, 2001 and March 31, 2002). 1.2.8 Segment reporting The company's operations predominantly relate to providing technology and services, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers. The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the note on significant accounting policies. Industry segments at the company are primarily financial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, energy, transportation and logistics companies. Income and direct expenses in relation to segments is categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably. The company believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and directly charged against total income. Fixed assets used in the company's business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made. Customer relationships are driven based on the location of the respective client. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the Rest of the World comprising all other places except, those mentioned above and India. Geographical revenues are segregated based on the location of the customer who is invoiced or in relation to which the revenue is otherwise recognized. 12 Industry segments -------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended Year ended December 31, December 31, March 31, ------------ ------------ --------- 2002 2001 2002 2001 2002 ------------------------------------------------------------------------------------------------------------------------------------ Revenue by Industry segments Financial services 360.79 226.20 982.25 700.23 953.98 Manufacturing 166.23 104.76 442.36 329.00 445.94 Telecom 134.60 100.07 379.19 301.73 406.79 Retail 112.82 89.83 300.59 232.63 320.40 Others 184.20 139.94 498.44 359.87 476.48 Total 958.64 660.80 2,602.83 1,923.46 2,603.59 Less: Inter-segment revenue -- -- -- -- -- Net revenue from operations 958.64 660.80 2,602.83 1,923.46 2,603.59 Segment profit / (loss) before tax and interest: -- -- -- -- -- Financial services 117.62 80.12 319.87 258.02 350.87 Manufacturing 55.98 33.73 148.73 108.49 152.76 Telecom 51.09 49.55 152.00 146.22 191.16 Retail 46.77 43.24 128.37 110.48 151.36 Others 62.03 60.81 182.69 143.68 191.48 Total 333.49 267.45 931.66 766.89 1,037.63 Less: Interest -- -- -- -- -- Less: Other un-allocable expenditure (excluding un-allocable income) 49.48 41.33 136.19 115.83 160.65 Operating profit before tax 284.01 226.12 795.47 651.06 876.98 ------------------------------------------------------------------------------------------------------------------------------------
Geography segments
------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended Year ended December 31, December 31, March 31, --------------------- ------------------------ ----------- 2002 2001 2002 2001 2002 ------------------------------------------------------------------------------------------------------------------------------------ Revenue by Geographic segments North America 708.47 468.50 1,909.05 1,373.10 1,854.10 Europe 157.71 128.39 450.15 372.67 506.84 India 13.46 12.45 49.90 40.53 51.12 Rest of the World 79.00 51.46 193.73 137.16 191.53 Total 958.64 660.80 2,602.83 1,923.46 2,603.59 Less: Inter-segment revenue -- -- -- -- -- Net revenue from operations 958.64 660.80 2,602.83 1,923.46 2,603.59 Segment profit / (loss) before tax and interest: -- -- -- -- -- North America 228.72 186.90 653.76 552.47 739.00 Europe 63.91 51.03 180.38 142.42 197.32 India 1.16 5.05 13.96 13.83 16.32 Rest of the World 39.70 24.47 83.56 58.17 84.99 Total 333.49 267.45 931.66 766.89 1,037.63 Less: Interest -- -- -- -- -- Less: Other un-allocable expenditure (excluding un-allocable income) 49.48 41.33 136.19 115.83 160.65 Operating profit before tax 284.01 226.12 795.47 651.06 876.98 ------------------------------------------------------------------------------------------------------------------------------------
1.2.9 Provisions for investments The Company evaluates all investments for any diminution in their carrying values that is other than temporary. Accordingly, the company provided for an aggregate amount of Rs. 23.76, during the quarter ended September 30, 2002 which consists of Rs.0.75 to JASDIC Park Company, Japan; Rs. 6.85 to Asia Net Media (BVI) Ltd, the British Virgin Islands; Rs. 8.95 to OnMobile Systems Inc (formerly OnScan Inc), USA; Rs.7.21 to Workadia Inc., USA; Rs.10,350/- to The Saraswat Co-operative Bank Limited and Rs.10/- to Software Services Support Education Center Limited. 1.2.10 Reconciliation of basic and diluted shares used in computing earnings per share
------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended Year ended December 31, December 31, March 31, ------------ ------------ --------- 2002 2001 2002 2001 2002 ------------------------------------------------------------------------------------------------------------------------------------ Number of shares considered as basic weighted average shares outstanding 6,62,21,577 6,61,64,388 6,62,02,947 6,61,61,389 6,61,62,274 Add: Effect of dilutive issues of shares/stock options 8,35,583 2,63,531 5,52,582 3,42,345 4,05,301 ------------------------------------------------------------------------------------------------------------------------------------ Number of shares considered as weighted average shares and potential shares outstanding 6,70,57,160 6,64,27,919 6,67,55,529 6,65,03,734 6,65,67,575 ------------------------------------------------------------------------------------------------------------------------------------
A complete set of the audited financial statements is available at www.infosys.com 13 Cash flow statement for the -------------------------------------------------------------------------------
In Rs crore ------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended Year ended December 31, December 31, March 31, ------------ ------------ --------- 2002 2001 2002 2001 2002 ------------------------------------------------------------------------------------------------------------------------------------ CASHFLOWS FROM OPERATING ACTIVITIES Profit before tax 313.81 241.04 843.93 694.13 943.39 Adjustments to reconcile profit before tax to cash provided By operating activities (Profit)/Loss on sale of fixed assets (0.08) 0.01 0.05 (0.01) (0.09) Depreciation and amortization 49.48 41.33 136.19 115.83 160.65 Interest Income (19.52) (12.36) (55.89) (35.96) (51.23) Effect of Deferred Taxes (1.45) (3.69) (10.81) (6.80) (8.69) Provision on long term investments -- -- 23.76 -- -- Income taxes paid during the period/year 1 (64.40) (25.31) (159.94) (104.14) (131.27) Exchange differences on translation of foreign currency deposits -- (0.87) 0.97 (4.69) (13.26) Changes in current assets and liabilities Sundry debtors (29.07) 33.07 (150.59) (8.16) (34.36) Loans and advances 2 (12.61) (12.46) (86.25) (30.56) (39.02) Current liabilities and provisions 3 13.26 (16.23) 124.71 29.65 (5.16) ----------------------------------------------------------------------------------------------------------------------------------- NET CASH GENERATED BY OPERATING ACTIVITIES 249.42 244.53 666.13 649.29 820.96 ----------------------------------------------------------------------------------------------------------------------------------- CASHFLOWS FROM FINANCING ACTIVITIES Proceeds on exercise of stock options 7.47 1.39 10.62 1.80 4.60 Dividends paid during the period/year, including Dividend Tax (82.76) (54.68) (165.49) (109.36) (109.37) ---------------------------------------------------------------------------------------------------------------------------------- NET CASH GENERATED/ USED IN FINANCING ACTIVITIES (75.29) (53.29) (154.87) (107.56) (104.77) ---------------------------------------------------------------------------------------------------------------------------------- CASHFLOWS FROM INVESTING ACTIVITIES Purchases of fixed assets and change in capital work-in-progress 4 (50.86) (53.07) (148.66) (284.56) (322.74) Proceeds on disposal of fixed assets 0.08 0.10 0.25 1.11 1.60 Long-term investments in securities 5 -- -- (12.52) (10.32) (10.32) Interest income 19.52 12.36 55.89 35.96 51.23 ---------------------------------------------------------------------------------------------------------------------------------- NET CASH USED IN INVESTING ACTIVITIES (31.26) (40.61) (105.04) (257.81) (280.23) ---------------------------------------------------------------------------------------------------------------------------------- Effect of exchange differences on translation of foreign currency deposits -- 0.87 (0.97) 4.69 13.26 ---------------------------------------------------------------------------------------------------------------------------------- Net (decrease)/increase in cash and cash equivalents during the period/year 142.87 151.50 405.25 288.61 449.22 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR 1,289.34 714.85 1,026.96 577.74 577.74 ---------------------------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/YEAR 6 1,432.21 866.35 1,432.21 866.35 1,026.96 ==================================================================================================================================
NOTES ON THE STATEMENT OF CASH FLOWS 7 This is the Cash Flow Statement referred to in our report of even date for Bharat S Raut & Co. Chartered Accountants S. Balasubrahmanyam N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Partner Chairman and Chief Mentor Chief Executive Officer, Chief Operating Officer Director President and Managing and Deputy Managing Director Director Marti G. Subrahmanyam Philip Yeo Jitendra Vir Singh Omkar Goswami Director Director Director Director Larry Pressler Claude Smadja Rama Bijapurkar K. Dinesh Director Director Director Director S. D. Shibulal T. V. Mohandas Pai Srinath Batni V. Balakrishnan Bangalore Director Director and Chief Director Company Secretary and January 10, 2003 Financial Officer Vice President - Finance
14 Schedules to the statement of cash flows --------------------------------------------------------------------------------
In Rs crore ------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended Year ended December 31, December 31, March 31, ------------ ------------ --------- 2002 2001 2002 2001 2002 ------------------------------------------------------------------------------------------------------------------------------------ 1 Income taxes paid during the period/year Charge as per the Profit and Loss Account 57.50 35.00 145.00 96.50 135.43 Add: Increase in advance income taxes 65.85 29.22 170.75 109.62 112.51 Less:Increase/(Decrease) in income tax provision (58.95) (38.91) (155.81) (101.98) (116.67) ------------------------------------------------------------------------------------------------------------------------------------ 64.40 25.31 159.94 104.14 131.27 ==================================================================================================================================== 2 Change in loans and advances during the period/year As per the Balance Sheet 948.47 634.58 948.47 634.58 643.87 Less: Deposits with financial institutions and body corporate, included in cash and cash equivalents (302.34) (256.80) (302.34) (256.80) (254.74) Advance income taxes separately considered (407.00) (233.36) (407.00) (233.36) (236.25) ----------------------------------------------------------- 239.13 144.42 239.13 144.42 152.88 Less:Opening balance considered (226.52) (131.96) (152.88) (113.86) (113.86) ------------------------------------------------------------------------------------------------------------------------------------ 12.61 12.46 86.25 30.56 39.02 ==================================================================================================================================== 3 Change in current liabilities and provisions during the period/year As per the Balance Sheet 681.70 396.80 681.70 396.80 459.41 Add/ (Less): Provisions separately considered in the cash flow Statement Income taxes (395.38) (224.88) (395.38) (224.88) (239.57) Dividends -- -- -- -- (82.73) Dividend tax -- -- -- -- -- ----------------------------------------------------------- 286.32 171.92 286.32 171.92 137.11 Less: Non Cash transactions -- -- (24.50) -- -- Less: Opening balance considered (273.06) (188.15) (137.11) (142.27) (142.27) ------------------------------------------------------------------------------------------------------------------------------------ 13.26 (16.23) 124.71 29.65 (5.16) ==================================================================================================================================== 4 Purchases of fixed assets and change in capital work-in-progress As per the Balance Sheet 56.80 62.81 237.42 228.76 342.72 Less: Opening Capital work-in-progress (92.35) (236.19) (150.67) (170.65) (170.65) Less: Non Cash transaction -- -- (24.50) -- -- Add: Closing Capital work-in-progress 86.41 226.45 86.41 226.45 150.67 ------------------------------------------------------------------------------------------------------------------------------------ 50.86 53.07 148.66 284.56 322.74 ==================================================================================================================================== 5 Long-term investments in securities during the period/year As per the Balance Sheet 33.20 44.44 33.20 44.44 44.44 Add: Provisions on investments -- -- 23.76 -- -- ----------------------------------------------------------- 33.20 44.44 56.96 44.44 44.44 Less: Opening balance considered (33.20) (44.44) (44.44) (34.12) (34.12) ------------------------------------------------------------------------------------------------------------------------------------ -- -- 12.52 10.32 10.32 ==================================================================================================================================== 6 Cash and cash equivalents at the end of the period/year As per the Balance Sheet 1,129.87 609.55 1,129.87 609.55 772.22 Add: Deposits with financial institutions and body corporate, included herein 302.34 256.80 302.34 256.80 254.74 ------------------------------------------------------------------------------------------------------------------------------------ 1,432.21 866.35 1,432.21 866.35 1,026.96 ====================================================================================================================================
7. Notes on the statement of cash flows 7.1 Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing, and investing activities of the company are segregated. Cash flows in foreign currencies are accounted at average monthly exchange rates that approximate the actual rates of exchange prevailing at the dates of the transactions. 7.2 The balance of cash and cash equivalents includes Rs 1.94 as at December 31, 2002 (as at December 31, 2001, Rs 1.73 and March 31, 2002, Rs 1.12) set aside for payment of dividends. 7.3 During the nine months ended December 31, 2002, the company entered into an agreement with the Aeronautical Development Agency, India for acquiring the intellectual property rights in AUTOLAY, a commercial software application product used in the design of high performance structural systems. The agreement requires the company to pay a consideration of $ 5 million (approximately Rs. 24.50) by 10 years of the contract date. The intellectual property has been recorded in the books of account along with the corresponding liability, which in substance is a non-cash transaction and hence has been excluded in the statement of cash flows. 7.4 Long-term investments in securities includes Rs. 12.25 invested in Progeon Ltd., a subsidiary, in the nine months ended December 31, 2002. 7.5 The previous year's/period's figures have been recast/ restated, wherever necessary, to conform to the current period's presentation. 15 Consolidated financial statements of Infosys Technologies Limited and its subsidiary -------------------------------------------------------------------------------- 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 laid down under the accounting standard on Consolidated Financial Statements issued by the ICAI. This being the first year of presentation of consolidated financial statements in line with the accounting standards, prior period figures have not been provided as they are unconsolidated and therefore do not permit meaningful comparison. The financial statements of the parent company, Infosys and Progeon 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 consolidated financial statements are prepared applying uniform accounting policies in use at Infosys and Progeon. Management's Statement on significant accounting policies contained in the audited financial statements. There are no changes in the accounting policies during the quarter ended December 31, 2002. The significant accounting policies of the company relate to revenue recognition, expenditure, fixed assets and capital work-in-progress, depreciation, retirement benefits to employees-principally gratuity, superannuation and provident fund benefits, research and development, income tax, earning per share, foreign currency transactions and investments. A complete set of the audited consolidated financial statements is available at www.infosys.com. Auditors' report -------------------------------------------------------------------------------- We have examined the attached Consolidated Balance Sheet of Infosys Technologies Limited (the Company) and its subsidiary Progeon Limited (subsidiary) as at December 31, 2002, and the Consolidated Profit and Loss accounts and the Consolidated Cash Flow Statements for the quarter and nine months then ended. These financial statements are the responsibility of the Infosys Technologies Limited's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared, in all material respects, in accordance with the financial reporting framework generally accepted in India and are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of separate audited financial statements of Infosys Technologies Limited and its subsidiary included in the consolidated financial statements. On the basis of the information and explanation given to us, and on consideration of separate audit reports on individual audited financial statements of Infosys Technologies Limited and its subsidiary, we are of the opinion that: (i) the Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of Infosys Technologies Limited and its subsidiary as at December 31, 2002; and (ii) the Consolidated Profit and Loss Account gives a true and fair view of the consolidated results of operations of Infosys Technologies Limited and its subsidiary for the quarter and nine months then ended; and (iii) the Consolidated Cash Flow Statement, gives a true and fair view of the consolidated cash flows of Infosys Technologies Limited and its subsidiary for the quarter and nine months ended on that date. for Bharat S Raut & Co. Chartered Accountants S Balasubrahmanyam Partner Bangalore January 10, 2003 16 Consolidated Balance Sheet as at --------------------------------------------------------------------------------
in Rs. crore -------------------------------------------------------------------------------- December 31, 2002 -------------------------------------------------------------------------------- SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share capital 33.11 Reserves and surplus 2,670.09 Preference shares issued by subsidiary 49.00 -------------------------------------------------------------------------------- 2,752.20 ================================================================================ APPLICATION OF FUNDS FIXED ASSETS Original cost 1,199.09 Less: Depreciation and amortization 526.48 ------------ Net book value 672.61 Add: Capital work-in-progress 86.42 ------------ 759.03 INVESTMENTS 20.95 DEFERRED TAX ASSETS 35.03 CURRENT ASSETS, LOANS AND ADVANCES Sundry debtors 491.56 Cash and bank balances 1,138.72 Loans and advances 991.57 ------------ 2,621.85 Less: Current liabilities 282.34 Provisions 402.32 ------------ NET CURRENT ASSETS 1,937.19 -------------------------------------------------------------------------------- 2,752.20 ================================================================================
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS The schedules referred to above and the notes thereon form an integral part of the consolidated balance sheet. This is the consolidated balance sheet referred to in our report of even date. for Bharat S Raut & Co. Chartered Accountants S. Balasubrahmanyam N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Partner Chairman and Chief Mentor Chief Executive Officer, Chief Operating Officer and Director President and Managing Deputy Managing Director Director Marti G. Subrahmanyam Philip Yeo Jitendra Vir Singh Omkar Goswami Director Director Director Director Larry Pressler Claude Smadja Rama Bijapurkar K. Dinesh Director Director Director Director S. D. Shibulal T. V. Mohandas Pai Srinath Batni V. Balakrishnan Bangalore Director Director and Chief Financial Director Company Secretary and January 10, 2003 Officer Vice President - Finance
17 Consolidated Profit and Loss Account for the --------------------------------------------------------------------------------
in Rs. crore, except per share data ------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended ------------- ----------------- December 31, 2002 ------------------------------------------------------------------------------------------------------------------------------------ INCOME - Software services, products and business process management Overseas 951.56 2,560.41 Domestic 13.46 49.90 ----------------------------------- 965.02 2,610.31 Software development and business process management expenses 486.04 1,289.46 ----------------------------------- GROSS PROFIT 478.98 1,320.85 SELLING AND MARKETING EXPENSES 75.09 200.61 GENERAL AND ADMINISTRATION EXPENSES 71.21 192.59 ----------------------------------- 146.30 393.20 OPERATING PROFIT (PBIDTA) 332.68 927.65 Interest -- -- Depreciation and amortization 50.05 136.93 ----------------------------------- OPERATING PROFIT AFTER INTEREST, DEPRECIATION AND AMORTIZATION 282.63 790.72 Other income 29.78 73.07 Provision for investments -- 23.76 NET PROFIT BEFORE TAX 312.41 840.03 ----------------------------------- Provision for taxation 57.50 145.00 NET PROFIT AFTER TAX 254.91 695.03 ------------------------------------------------------------------------------------------------------------------------------------ AMOUNT AVAILABLE FOR APPROPRIATION 254.91 695.03 ------------------------------------------------------------------------------------------------------------------------------------ DIVIDEND Interim -- 82.76 ------------------------------------------------------------------------------------------------------------------------------------ Balance in Profit and Loss Account 254.91 612.27 ==================================================================================================================================== EARNINGS PER SHARE (Equity shares, par value Rs. 5/- each) Basic 38.49 104.98 Diluted 38.01 104.12 Number of shares used in computing earnings per share Basic 6,62,21,577 6,62,02,947 Diluted 6,70,57,160 6,67,55,529 ===================================================================================================================================
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS The schedules referred to above and the notes thereon form an integral part of the consolidated profit and loss account. This is the consolidated profit and loss account referred to in our report of even date. for Bharat S Raut & Co. Chartered Accountants S. Balasubrahmanyam N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Partner Chairman and Chief Mentor Chief Executive Officer, Chief Operating Officer and Director President and Managing Deputy Managing Director Director Marti G. Subrahmanyam Philip Yeo Jitendra Vir Singh Omkar Goswami Director Director Director Director Larry Pressler Claude Smadja Rama Bijapurkar K. Dinesh Director Director Director Director S. D. Shibulal T. V. Mohandas Pai Srinath Batni V. Balakrishnan Bangalore Director Director and Chief Director Company Secretary and January 10, 2003 Financial Officer Vice President - Finance
18 Consolidated cash flow statement for the --------------------------------------------------------------------------------
in Rs. crore ------------------------------------------------------------------------------------------------------------------------------------ Quarter ended Nine months ended ------------- ----------------- December 31, 2002 ------------------------------------------------------------------------------------------------------------------------------------ CASHFLOWS FROM OPERATING ACTIVITIES Profit before tax 312.41 840.03 Adjustments to reconcile profit before tax to cash provided By operating activities (Profit)/Loss on sale of fixed assets (0.08) 0.05 Depreciation and amortization 50.05 136.93 Interest income (20.37) (57.87) Effect of deferred taxes (1.45) (10.81) Provisions on long-term investments -- 23.76 Income taxes paid during the period (64.66) (160.35) Exchange differences on translation of foreign currency deposits -- 0.97 Changes in current assets and liabilities Sundry debtors (31.83) (154.83) Loans and advances (13.82) (88.92) Current liabilities and provisions 10.97 127.67 ------------------------------------------------------------------------------------------------------------------------------------ NET CASH GENERATED BY OPERATING ACTIVITIES 241.22 656.63 ------------------------------------------------------------------------------------------------------------------------------------ CASHFLOWS FROM FINANCING ACTIVITIES Proceeds from the issue of preference share capital -- 49.00 Proceeds on exercise of stock options 7.47 10.62 Dividends paid during the period, including dividend tax (82.76) (165.49) ------------------------------------------------------------------------------------------------------------------------------------ NET CASH USED IN FINANCING ACTIVITIES (75.29) (105.87) ------------------------------------------------------------------------------------------------------------------------------------ CASHFLOWS FROM INVESTING ACTIVITIES Purchases of fixed assets and change in capital work-in-progress (52.33) (153.52) Proceeds on disposal of fixed assets 0.08 0.25 Long-term investments in securities -- (0.27) Interest income 20.37 57.87 ------------------------------------------------------------------------------------------------------------------------------------ NET CASH USED IN INVESTING ACTIVITIES (31.88) (95.67) ------------------------------------------------------------------------------------------------------------------------------------ Effect of exchange differences on translation of foreign currency deposits -- (0.97) ------------------------------------------------------------------------------------------------------------------------------------ Net (decrease)/increase in cash and cash equivalents during the period 134.05 454.12 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 1,347.03 1,026.96 ------------------------------------------------------------------------------------------------------------------------------------ CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 1,481.08 1,481.08 ==================================================================================================================================== NOTES ON THE STATEMENT OF CASH FLOWS ------------------------------------------------------------------------------------------------------------------------------------
This is the Cash Flow Statement referred to in our report of even date for Bharat S Raut & Co. Chartered Accountants S. Balasubrahmanyam N. R. Narayana Murthy Nandan M. Nilekani S. Gopalakrishnan Deepak M. Satwalekar Partner Chairman and Chief Mentor Chief Executive Officer, Chief Operating Officer and Director President and Managing Deputy Managing Director Director Marti G. Subrahmanyam Philip Yeo Jitendra Vir Singh Omkar Goswami Director Director Director Director Larry Pressler Claude Smadja Rama Bijapurkar K. Dinesh Director Director Director Director S. D. Shibulal T. V. Mohandas Pai Srinath Batni V. Balakrishnan Bangalore Director Director and Chief Director Company Secretary and January 10, 2003 Financial Officer Vice President - Finance
19 Ratio analysis as per Indian GAAP (Non - consolidated)
Year Quarter Nine months ended ended ended March December 31, December 31, 31, -------------- -------------- ----- 2002 2001 2002 2001 2002 ----- ----- ----- ----- ----- Financial performance Export revenue / total revenue (%) 98.60 98.12 98.08 97.89 98.04 Domestic revenue / total revenue (%) 1.40 1.88 1.92 2.11 1.96 Software development expenses / total revenue (%) 50.24 46.84 49.31 46.90 47.04 Gross profit / total revenue (%) 49.76 53.16 50.69 53.10 52.96 Selling and marketing expenses / total revenue (%) 7.68 4.97 7.61 4.89 4.99 General and administration expenses / total revenue (%) 7.30 7.72 7.29 8.35 8.12 Selling, general and administration expenses / total revenue (%) 14.97 12.69 14.89 13.23 13.11 Employee costs / total revenue (%) 46.56 43.54 45.92 42.94 42.94 Operating profit / total revenue (%) 34.79 40.47 35.79 39.87 39.85 Depreciation and amortization / total revenue (%) 5.16 6.25 5.23 6.02 6.17 Operating profit after depreciation and interest / total revenue (%) 29.63 34.22 30.56 33.85 33.68 Other income / total revenue (%) 3.11 2.26 2.78 2.24 2.55 Provision for investments / total revenue (%) -- -- 0.91 -- -- Profit before tax / total revenue (%) 32.73 36.48 32.42 36.09 36.23 Tax / total revenue (%) 6.00 5.30 5.57 5.02 5.20 Tax / PBT (%) 18.32 14.52 17.18 13.90 14.36 PAT from ordinary activities / total revenue (%) 26.74 31.18 26.85 31.07 31.03 PAT from ordinary activities / average net worth (%) (LTM) 39.05 48.54 39.05 48.54 46.57 ROCE ( PBIT/Average capital employed) (%) (LTM) 46.95 55.90 46.95 55.90 54.37 Return on invested capital (%) (LTM) 73.29 82.05 73.29 82.05 83.10 Capital output ratio (LTM) 1.41 1.55 1.41 1.55 1.50 Invested capital output ratio(LTM) 2.78 2.72 2.78 2.72 2.79 Balance sheet Debt-equity ratio -- -- -- -- -- Debtors turnover ( Days) (LTM) 54 46 54 46 47 Current ratio 3.76 3.92 3.76 3.92 3.82 Cash and cash equivalents / total assets (%) 52.91 44.43 52.91 44.43 49.37 Cash and cash equivalents / total revenue (%) (LTM) 43.63 34.86 43.63 34.86 39.44 Capital expenditure / total revenue (%) (LTM) 5.69 17.02 5.69 17.02 12.40 Depreciation / average gross block (%) (LTM) 17.71 22.71 17.71 22.71 20.18 Technology investment / total revenue (%) (LTM) 3.60 5.47 3.60 5.47 3.93 Year on Year Growth (%) ** Export revenue 46 23 36 42 36 Total revenue 45 23 35 44 37 Operating profit 25 23 21 44 36 Net profit 24 24 17 35 30 Basic EPS 24 24 17 35 30 Per - share data ( period end) Basic earnings per share from ordinary activities (Rs.) 38.70 31.14 105.57 90.33 122.12 Basic cash earnings per share from ordinary activities (Rs.) 46.18 37.38 126.15 107.82 146.40 Book value (Rs.) 408.75 294.69 408.75 294.69 314.31 Price / earning ( LTM) 34.77 34.48 34.77 34.48 30.50 Price / cash earnings ( LTM) 29.00 28.80 29.00 28.80 25.44 Price / book value 11.68 13.78 11.68 13.78 11.85 PE / EPS growth 1.43 1.45 2.06 0.98 1.03 Dividend per share (Rs.) NA NA 12.50 7.50 20.00 ----- ----- ----- ----- -----
** Denotes growth compared with figures of the corresponding period in the previous year. LTM : Last Twelve Months 20 At a glance - US GAAP
US $ millions, except as otherwise stated -------------------------------------------------------------- Quarter ended Nine months ended Year ended December 31, December 31, March 31, -------------------- -------------------- ------ 2002 2001 2002 2001 2002 ------ ------ ------ ------ ------ For the period Revenues 200.01 137.58 537.78 405.37 545.05 Operating income 57.27 45.83 159.15 133.43 178.55 Operating income/revenues (%) 28.63% 33.31% 29.59% 32.92% 32.76% Net income 52.25 41.65 141.80 122.18 164.47 Net income/ revenues (%) 26.12% 30.27% 26.37% 30.14% 30.17% Basic earnings per equity share ($) 0.80 0.64 2.16 1.86 2.51 Cash dividend per equity share ($) NA NA 0.26 0.16 0.35 Capital expenditure 10.80 14.60 30.88 59.98 68.35 At the end of the period Total assets 635.40 439.42 471.16 Property, plant and equipment- net 150.71 150.66 147.21 Cash and cash equivalents 308.56 179.96 210.49 Working capital 387.42 229.70 270.37 Total debt -- -- -- Stockholders' equity 565.13 403.71 442.38 Common stock 8.60 8.60 8.60 Market capitalization 6,586.11 5,581.98 5,053.15 ------ ------ -------- -------- --------
Note: Market capitalization is calculated by considering the Indian market price for the shares outstanding at the period / year end.
Year ended Quarter ended Quarter ended March 31, 2002 December 31, 2001 December 31, 2002 -------------- ----------------- ----------------- Revenues 545.05 137.58 200.01 Operating income 178.55 45.83 57.27 Net income 164.47 41.65 52.25
21 Shareholder information 1. Registered office Electronics City, Hosur Road, Bangalore - 561 229, India Tel.: +91-80-852 0261, Fax: +91-80-852 0362 Homepage: www.infosys.com 2. Listing on stock exchanges In India: National Stock Exchange of India Ltd. (NSE) The Stock Exchange, Mumbai (BSE) Bangalore Stock Exchange Ltd. (BgSE) Outside India: NASDAQ National Market in the United States 3. Par value of equity shares Rs. 5 each fully paid-up 4. Registrar and share transfer agents Karvy Consultants Limited, Share transfers in physical form and Registrars and Share Transfer Agents; other communication regarding share T.K.N. Complex, No. 51/2, Vanivilas Road; certificates, dividends, change of Opposite National College, Basavanagudi; address, etc. may be addressed to: Bangalore 560 004, India. Tel.: +91-80-662-1184, Fax: +91-80-662-1169 E-Mail: kannans@karvy.com
5. Stock market data relating to shares listed in India a. The company's market capitalization is included in the computation of the BSE-30 Sensitive Index (Sensex), the BSE Dollex and S&P CNX NIFTY Index. b. Monthly high and low quotations as well as the volume of shares traded at National, Mumbai and Bangalore Stock Exchanges for the quarter ended December 31,2002 are:
NSE BSE BgSE ------------------------------- ------------------------------- ----------------------- High Low Volume High Low Volume High Low Volume Rs. Rs. Nos. Rs. Rs. Nos. Rs. Rs. Nos. ----- ----- ----------- ----- ----- --------- -- -- -- Oct 2002 3,907 3,350 1,65,67,895 3,916 3,350 75,99,360 -- -- -- Nov 4,673 3,800 1,76,73,197 4,673 3,799 84,42,242 -- -- -- Dec 4,842 4,390 1,81,31,515 4,850 4,386 79,80,629 -- -- -- ----- ----- ----------- ----- ----- --------- -- -- -- Total 5,23,72,607 2,40,22,231 -- ----- ----- ----------- ----- ----- --------- -- -- -- Volume traded/ shares outstanding (%)* December 31, 2002 81.73 37.49 -- December 31, 2001 63.98 37.20 -- ----- ----- ----------- ----- ----- --------- -- -- --
* The number of shares outstanding as of December 31,2002 is 6,40,76,502. The equity shares underlying the American Depositary Shares (ADSs) have been excluded for the purpose of this calculation. 6. Share transfer system Shares sent for physical transfer are effected after giving a notice of 15 days to the seller for sale confirmation. The share transfer committee of the company meets as often as required. The total number of shares transferred in physical form during the three-month period ended December 31,2002 was NIL (quarter ended December 31, 2001 - 2,700). 7. Investors' services - complaints received
Quarter ended ---------------------------------------------------------------------------- December 31, 2002 December 31, 2001 -------------------------------- -------------------------------- Nature of complaints Received Attended to Received Attended to -------- ----------- -------- ----------- Non-receipt of : dividend warrants 79 79 62 62 Share certificates -- -- 2 2 Total 79 79 64 64
The company has attended to most of the investors' grievances/correspondence within a period of 10 days from the date of receipt of the same, during the quarter ended December 31, 2002 except in cases that are constrained by disputes or legal impediments. 8. Legal proceedings There are some pending cases relating to disputes over title to shares, in which the company is made a party. However, these cases are not material in nature. 9. Categories of shareholders as on December 31,
2002 2001 ---------------------------------------------- --------------------------------------------- No. of Voting No. of No. of Voting No. of Category shareholders strength (%) shares held shareholders strength (%) shares held ------------ ------------ ----------- ------------ ------------ ----------- Individuals 72,136 16.82 1,11,42,249 81,805 17.46 1,15,50,817 Companies 2,849 1.16 769,229 2,938 1.02 6,74,037 NRIs / OCBs 789 0.98 649,370 732 0.67 4,42,285 FIIs 330 39.40 2,60,94,390 370 37.99 2,51,39,687 Mutual Funds, Banks, FIIs 211 8.65 57,28,357 193 9.59 63,45,407 Founders and their families 23 28.44 1,88,34,595 23 28.83 1,90,76,960 Trusts 11 1.30 8,58,312 3 1.27 8,40,837 Equity shares underlying American Depositary Shares* 1 3.25 21,52,987 1 3.17 20,99,217 ------------ ------------ ----------- ------------ ------------ ----------- Total 76,350 100.00 6,62,29,489 86,065 100.00 6,61,69,247 ------------ ------------ ----------- ------------ ------------ -----------
*Held by beneficial owners outside India 49 10. Financial calendar (tentative and subject to change) Financial results for the year ending March 31,2003 April 10, 2003 Annual General Meeting for the year ending March 31, 2003 May / June 2003 11. Investors' correspondence in India
For investor matters For queries relating to financial statements V. Balakrishnan T. V. Mohandas Pai Company Secretary & Vice President - Finance Director (F&A) and CFO Investors' Service Cell Infosys Technologies Ltd., Infosys Technologies Ltd., Electronics City Electronics City Hosur Road, Bangalore 561 229, India Hosur Road, Bangalore 561 229, India Tel.: +91-80-852-0396, Fax: +91-80-852- 0754 Tel.: +91-80-852-0440, Fax: +91-80-852-0754 E-mail: mdpai@infosys.com E-mail: balakv@infosys.com
12. Stock Exchange Codes
Reuters code Bridge code Bloomberg code ------------- ------------ ------------- INFY.BO (BSE) IN;INF (BSE) INFO IN (BSE) INFY.NS (NSE) IN;INFN (NSE) NINFO IN (NSE) INFY.O (NASDAQ) US;INFY (NASDAQ)
13. Stock market data relating to American Depositary Shares (ADSs) a. ADS* listed at NASDAQ National Market in the United States b. Ratio of ADS to equity shares 2 ADS for one equity share c. ADS symbol INFY d. The American Depositary Shares issued under the ADS program of the company were listed on the NASDAQ National Market in the United States on March 11, 1999. The monthly high and low quotations as well as the volume of ADSs traded at the NASDAQ National Market for the quarter ended December 31, 2002 are:
High Low -------------------- -------------------- Volume $ Rs. $ Rs. Nos. ----- ----- ----- ----- --------- Oct, 2002 73.46 3,555 50.74 2,455 36,65,800 Nov 86.83 4,199 68.70 3,322 31,52,900 Dec 85.50 4,104 61.95 2,974 40,91,100 Total 1,09,09,800
* 2 ADS = 1 equity share. US $ has been converted into Indian rupees at the monthly closing rates. The number of ADSs outstanding as on December 31,2002 was 43,05,974. The percentage of volume traded to the total float was 253.36%. e. Investor correspondence in P. R. Ganapathy the US may be addressed to Investor Relations Officer Infosys Technologies Limited 34760, Campus Drive Fremont CA 94555, USA. Tel.: +1-510-742-3030, Mobile: +1-510-872-4412, Fax: +1-510-742-2930, E-mail: guns@infosys.com 14. ECS mandate The company has received complaints regarding non-receipt of dividend warrants. All shareholders are requested to update their bank account details with their respective depositories urgently. This would enable the company to service its investors better. A copy of the ECS mandate form is provided elsewhere in the report. The ECS mandate form duly filled-up should be sent to the depository participant with whom the shareholder maintains his/her demat account. 15. Change of address The company has received complaints regarding non-receipt of dividend warrants and other corporate communications. All shareholders are requested to update their current address with their respective depositories immediately. This would enable the company to service its investors better. 50 ELECTRONIC CLEARING SERVICE (CREDIT CLEARING) MANDATE FORM Shareholder's authorization to receive dividends through Electronic Credit Clearing Mechanism 1. Name of the first/sole shareholder -------------------------------------------------------------------------------- 2. Folio No. -------------------------------------------------------------------------------- 3. Particulars of bank account of first/sole shareholder -------------------------------------------------------------------------------- a. Name of the Bank -------------------------------------------------------------------------- b. Branch -------------------------------------------------------------------------- Address of the branch -------------------------------------------------------------------------- Telephone no. of the branch -------------------------------------------------------------------------- c. 9-digit code number of the Bank and Branch appearing on the MICR cheque issued by the bank -------------------------------------------------------------------------- d. Account number (as appearing on the cheque book/passbook) -------------------------------------------------------------------------- e. Account type (S.B. account/current account or cash credit) with code 10/11/13 -------------------------------------------------------------------------- f. Ledger no. / Ledger folio no. (if appearing on the cheque book/passbook) -------------------------------------------------------------------------------- (In lieu of the bank certificate to be obtained as under, please attach a blank cancelled cheque, or photocopy of a cheque or the front page of the savings bank passbook issued to you by your bank, for verification of the above particulars.) -------------------------------------------------------------------------------- I hereby declare that the particulars given above are correct and complete. If the transaction is delayed or not effected at all for reasons of incomplete or incorrect information, I will not hold Infosys Technologies Limited responsible. I have read the option invitation letter and agree to discharge the responsibility expected of me as a participant under the scheme. Date : Place : Signature of the shareholder -------------------------------------------------------------------------------- Certified that the particulars furnished above are correct as per our records. Bank's Stamp Signature of the Authorized Official Date : from the Bank Note: 1. Please fill in the attached Mandate Form and send it to: (i) the Depository Participant who is maintaining your demat account in case your shares are dematerialized. (ii) the address of our Registrars and Share Transfer Agents, M/s. Karvy Consultants Limited, No. 51/2, T.K.N. Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bangalore - 560 004 in case you are holding physical share certificates. 2. Kindly note that the information provided by you should be accurate and complete in all respects and duly certified by your bank. In lieu of the bank certificate, you may attach a blank cancelled cheque or photocopy of a cheque or the front page of the Savings Bank passbook issued to you by your bank, for verification of the above particulars. 3. In case of more than one folio please complete the details on separate sheets. 4. The information provided by you will be treated confidential and would be utilised only for the purpose of effecting the payments meant for you. You also have the right to withdraw from this mode of payment by providing the Company with an advance notice of 6 weeks. Infosys Technologies Limited United States Ohio 6631, Suite E Addison Commerce Parkway, 15305 Dallas Parkway, Suite Dublin Ohio,43017 210 Addison, TX 75001 Tel :(614) 923 3375 Tel :(972) 770 0475 Fax :(614) 923 3384 Fax :(972) 770 0490 Japan Bellevue Izumi Garden Wing (2F) 10900 NE 4th Street #2300 1-6-3, Roppongi, Bellevue, WA 98004 Minato-ku Tel :(425) 990 1028 Tokyo 106 0032 Fax :(425) 990 1029 Tel :81 3 5545 3251 Fax :81 3 5545 3252 Berkeley Heights Two Connell Drive Singapore Suite 4100 30, Raffles Place Berkeley Heights #23-00 Caltex House NJ 07922 Singapore 048622 Tel :(908) 286 3100 Tel :(65) 6233 6820 Fax :(908) 286 3125 Fax :(65) 6233 6905 Fremont Hong Kong 34760 Campus Drive 16F Cheung Kong Centre Fremont, CA 94555 2 Queen's Road Central Tel :(510) 742 3000 Central, Hong Kong Fax :(510) 742 3090 Tel :(852) 2297 2231 Fax :(852) 2297 0066 Lake Forest 25341 Commercentre Drive China Suite 150 14th Floor, IBM Tower, Lake Forest, CA 92630 Pacific Century Place Tel :(949) 455 9161 2A Workers Stadium Road Fax :(949) 609 0694 North, Chaoyang District Beijing 100027 Marietta Tel :86 10 6539 1063 400 Galleria Parkway, Suite 1490, Atlanta Australia GA 30339 Level 4, 90 Mount Street Tel :770 980 7955 North Sydney NSW 2060 Fax :770 980 7956 Tel :(61) 2 9954 0036 Fax :(61) 2 8904 1652 Lisle 2300 Cabot Drive Level 9, Suite 250, Lisle, IL 60532 114, Albert Road Tel :(630) 482 5000 South Melbourne,VIC 3205 Fax :(630) 505 9144 Tel :(61) 3 9685 1600 Fax :(61) 3 9685 1699 Charlotte 900 West trade Street France Charlotte 12 Avenue de l'Arche Faubourg de l'Arche Phoenix 92419 Courbevoie Cedex 10851 N Black Canyon Paris Hwy Tel :(33)1 4691 8456 # 830, Phoenix, AZ 85029 Fax :(33)1 4691 8800 Tel :(602) 944 4855 Fax :(602) 944 4879 Germany TOPAS 1 Quincy Mergenthalerallee 77 Two Adams Place, Quincy 65760 Eschborn/Frankfurt MA 02169 Tel :(49) 6196 9694 0 Tel :(781) 356 3106 Fax :(49) 6196 9694 200 Fax :(781) 356 3150 Belgium Troy Dreve Richelle 161 100 Liberty Center Building N 1410 Waterloo #200, West Big Beaver Troy Brussels MI 48084 Tel :(322) 352 8718 Tel :(248) 524 0320 Fax :(322) 352 8844 Fax :(248) 524 0321 Reddy Building Netherlands K-310, 1st Main Newtonlaan 115, 5th Block, Koramangala 3584 BH Utrecht Bangalore-560 095 The Netherlands Tel :(91) 80 5532591/92 Tel :(31) 0 302106462 Fax :(91) 80 5530391 Fax :(31) 0 302106860 Infosys Towers UK No. 27, Bannerghatta Road 11th Floor, Emerald House 3rd Phase, J. P. Nagar 7/15 Lansdowne Road Bangalore-560 076 Croydon, CR0 2BX, Surrey Tel :(91) 80 6588668 Tel :(44) 20 8774 3300 Fax :(91) 80 6588676 Fax :(44) 20 8686 6631 Mangalore Castle House Kuloor Ferry Road 37-45 Paul Street, Level 2 Kottara London, EC 2A 4LS Mangalore-575 006 Tel :020 7549 6900 Tel :(91) 824 451485-88 Fax :02072518320 Fax :(91) 824 451504 Scandinavia New Delhi Stureplan 4C, 4tr K30, Green Park Main 114 35, Stockholm, Sweden Behind Green Park Market Tel :(46) 8 463 1112 New Delhi-110 066 Fax :(46) 8 463 1114 Tel :(91) 11 26514829-30 Fax :(91) 112 6853366 Switzerland Dreikonigstrasse 31A Pune 8002 Zurich Plot No. 1; Tel :(41) 1 208 3705 Pune Infotech Park Fax :(41) 1 208 3640 At Post Hinjewadi Taluka Mulshi Canada Pune-411 027 5140 Yonge Street Tel :(91) 20 2932800/01 Suite 1400 Fax :(91) 20 2932832 Toronto, Ontario M2N 6L7 Tel :(416) 224 7400 Chennai Fax :(416) 224 7449 No. 138 Old Mahabalipuram Road United Arab Emirates Sholinganallur Y-45, P. O. Box 8230 Chennai-600 119 Sharjah Airport International Tel :(91) 44 24509530/40 Free Zone (Saif Zone) Fax :(91) 44 24500390 Sharjah Tel :(971) 6 5570 000 Bhubaneswar Fax :(971) 6 5571 010 Plot No. E4, Infocity Bhubaneswar-751 024 Argentina Orissa, India Republica Arabe Siria 3149 Tel :(91) 674 2320001-32 - Piso 7 `27' Fax :(91) 674 2320100 1425 Capital Federal Buenos Aires Tel :54 11 4802 0025 India Bangalore Electronics City Hosur Road Bangalore-561 229 Tel :(91) 80 8520261 Fax :(91) 80 8520362 Pavithra Complex #1, 27th Main, 2nd Cross 1st Stage, BTM Layout Bangalore-560 068 Tel :(91) 80 6680182 - 85 Fax :(91) 80 6680181 Mohali (Chandigarh) B 100, Industrial Area Phase 8, Mohali (SAS Nagar)-160 059 Punjab Tel :(91) 172 390510 (91) 172 257191, 92 Fax :(91) 172 254193 Hyderabad Survey No. 210 Manikonda Village Lingampally Rangareddy (Dist) Hyderabad-500 019 Tel :(91) 40 23005222 Fax :(91) 40 23005223 Mumbai 85-C Wing, 8th Floor Mittal Towers Nariman Point Mumbai-400 021 Tel :(91) 22 22882911/ 14 Fax :(91) 22 22846489 Mysore No. 350 Hebbal Electronics City Hootagalli, Mysore-571 186 Tel :(91) 821 404101 Fax :(91) 821 404200 Bankers Visit Infosys at ICICI Bank Ltd. www.infosys.com Bank of America Company Secretary Send e-mail to V. Balakrishnan infosys@infosys.com Auditors call us at Bharat S Raut and Co. within the U.S Chartered Accountants 1-800-ITL INFO Independent Auditors outside the U.S. (US GAAP) 91-80-8520261 KPMG (C) 2003 Infosys Technologies Limited, Bangalore, India. Infosys acknowledges the proprietary rights in the trademarks and product names of other companies mentioned in this document. 52