EX-99.2 3 f13422exv99w2.htm EXHIBIT 99.2 exv99w2
 

Exhibit 99.2
     
Infosys Technologies Limited — Financial Release September 30, 2005
  Indian GAAP Press Release
 
Half-year FY06 revenue reaches US$ 1 billion

Guidance revised upwards. Revenues expected to grow 31% in fiscal 2006
Bangalore, India — October 11, 2005
Highlights
Consolidated results for the quarter ended September 30, 2005
•   Income was Rs. 2,294 crore for the second quarter ended September 30, 2005; YoY growth was 31.16%
•   Net profit was Rs. 606 crore for the second quarter ended September 30, 2005; YoY growth was 35.57%
•   Earnings per share increased to Rs. 22.26 from Rs. 16.71 for the corresponding quarter in the previous year, an increase of 33.21%
•   Interim dividend of Rs. 6.50 per share (130% on par value of Rs. 5 per share) as compared to Rs. 5.00 (100% on par value of Rs. 5 per share) for the corresponding period in the previous year
Others
•   34 new clients were added during the quarter by Infosys and subsidiaries
•   Gross addition of 8,026 employees (Net addition of 6,390 employees) for the quarter by Infosys and subsidiaries
•   46,196 employees as on September 30, 2005 for Infosys and subsidiaries
“We have seen robust growth during the quarter due to our effective focus on offering a broad array of services to our clients,” said Nandan M. Nilekani, CEO, President and Managing Director. “It took us the whole of fiscal 2004 to reach a revenue of US$ 1 billion. We reached the same level in the first six months of this year.”
Business outlook
The company’s outlook (consolidated) for the quarter ending December 31, 2005 and the fiscal year ending March 31, 2006, under Indian GAAP and US GAAP, is as follows:
Outlook under Indian GAAP — consolidated
Quarter ending December 31, 2005*
•   Income is expected to be in the range of Rs. 2,443 crore and Rs. 2,452 crore; YoY growth of 30.25% — 30.73%
•   Earnings per share is expected to be Rs. 23.10; YoY growth of 24.86%
Fiscal year ending March 31, 2006*
•   Income is expected to be in the range of Rs. 9,361 crore and Rs. 9,383 crore; growth of 31.30% — 31.61%
•   Earnings per share is expected to be between Rs. 89.00 and Rs. 89,40; growth of 29.38% — 29.96% before exceptional items
 
*   conversion 1 US$ = Rs. 43.94
Outlook under US GAAP
Quarter ending December 31, 2005
•   Consolidated revenues is expected to be in the range of $ 556 million and $ 558 million; YoY growth of 31.44% — 31.91 %
 
•   Consolidated earnings per American Depositary Share is expected to be $ 0.53; YoY growth of 26.19%
     
 
 
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Infosys Technologies Limited — Financial Release September 30, 2005
  Indian GAAP Press Release
 
Fiscal year ending March 31, 2006
•   Consolidated revenues is expected to be $2.14 billion; growth of 34.42%
•   Consolidated earnings per American Depositary Share is expected to be between $2.04 and $ 2.05; growth of 29.9% — 30.6%
“During this quarter we recruited 8,026 employees (gross), which is the highest ever during any quarter,” said S. Gopalakrishnan, Member of the Board and COO. “Our investments in creating a world-scale global education center coupled with our spend on education and research has enabled us to scale up rapidly.”
Dividend declaration
The company has declared an interim dividend of Rs. 6.50 per share (130% on an equity share of par value of Rs. 5 each) at the board meeting held today. An interim dividend of Rs. 5.00 (100% on an equity share of par value of Rs. 5 each) was declared for the corresponding period in the previous year. The record date for payment of dividend will be October 18, 2005.
Expansion of services and significant projects
Infosys won its single largest multi-year, multi-million dollar contract from ABN AMRO to develop, support and enhance a wide spectrum of applications. This reinforces our belief that the offshoring of large deals is a mega trend. In a continuing partnership with a Swiss market leader in IT outsourcing and business service provisioning services, Infosys is providing a core banking services platform to the private banking sector in Europe. Further, Infosys entered into a high-volume, multi-year strategic engagement with a large hi-tech company to unify its IT systems across multiple branches and subsidiaries.
Infosys is helping clients realize value from investments in Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and other enterprise applications for business transformation.
Infosys is working with a leading certification agency in Europe to implement a next-generation business, CRM and production support system, which will support the client’s evolving business needs. A leading software vendor has engaged Infosys to implement a large end-to-end SAP-enabled business transformation initiative. A leading document management technology company transitioned an existing product to Infosys to optimize its market positioning and operations, leveraging Infosys’ Product Stewardship Program. In addition, Infosys is advising a leading discrete manufacturer on reducing costs through business process outsourcing of HR operations. The strategic engagement includes a PeopleSoft implementation.
Leading companies in the banking, capital markets and financial services sectors are seeking Infosys’ domain expertise and industry-specific solutions to address their business problems. A leading diversified financial services company engaged Infosys to define a strategy for streamlining systems and processes to improve operational efficiency. Infosys’ Operational Risk Management Solution is enabling an investment management and outsourcing company to create an enterprise-wide framework to define, identify, measure, mitigate and report risk across key client business lines.
Infosys’ Independent Validation Services are enhancing the competitiveness of key clients across industries, including an international leader in investment banking and financial services and a leading Europe-based retailer.
“The ABN AMRO deal, signed this quarter, signifies the entry of Infosys into the arena of large, global, multi-year outsourcing contracts and is an endorsement of our competitive business model,” said S. D. Shibulal, Member of the Board and Head — Sales and Delivery. “Our strong customer service engine is enabling us to address client needs effectively.”
     
 
 
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Infosys Technologies Limited — Financial Release September 30, 2005
  Indian GAAP Press Release
 
Finacle®
Finacle®, the universal banking solution from Infosys, further consolidated its position among global Tier 1, Tier 2 and large regional banks, particularly in the strategic Europe market. A global top 100 bank headquartered in Europe licensed Finacle® core banking, CRM, consumer e-banking and wealth management solutions to power its retail banking initiative in India. One of the top 5 banks in Russia licensed Finacle® universal banking solution. One of the top 3 banks in Nigeria signed up Finacle® to power its business transformation initiative. A leading financial services company in Australia will deploy Finacle® core banking and consumer e-banking solutions.
Liquidity and capital expenditure
Cash and cash equivalents, including investments in liquid mutual funds, increased by Rs. 528 crore during the quarter, from Rs. 3,265 crore to Rs. 3,793 crore, after incurring capital expenditure of Rs. 303 crore. Operating cash flows for the quarter ended September 30, 2005 were Rs. 629 crore (Rs. 468 crore for the quarter ended September 30, 2004).
“The pricing environment is stable with an upward bias. We have maintained margins despite record hiring of employees during the quarter,” said T. V. Mohandas Pai, Member of the Board and CFO. “Liquid assets have gone up by Rs. 528 crore. The rupee has depreciated during the quarter creating a more benign margin environment.”
Disaster Relief
Infosys has committed Rs. 1 crore for the relief of flood-affected people in North Karnataka, In addition, the Board unanimously committed Rs. 2 crore for the victims of the October 8 earthquake —Rs. 1 crore for the people in Jammu and Kashmir, and an equal amount for those in Pakistan. The company also committed Rs. 50 lakh to aid the victims of Hurricane Katrina in the US.
“Infosys always has and will be concerned about the welfare of people,” said N. R. Narayana Murthy, Chairman and Chief Mentor. “Caring corporations all over the world respond to natural calamities.”
About the company
Infosys is a leading global technology services firm founded in 1981. Infosys provides end-to-end business solutions that leverage technology for our clients across the entire software life cycle: consulting, design, development, re-engineering, maintenance, system integration, package evaluation and implementation. In addition, Infosys offers software products to the banking industry, as well as business process management services through its majority-owned subsidiary, Progeon. For more information, contact V. Balakrishnan at +91 (80) 2852 0440 in India or visit us on the World Wide Web at www.infosys.com.
     
 
 
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Infosys Technologies Limited — Financial Release September 30, 2005
  Indian GAAP Press Release
 
Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT, business process outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2005 and quarter ended June 30, 2005. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company’s filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
     
 
 
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Infosys Technologies Limited — Financial Release September 30, 2005
  Indian GAAP Press Release
 
INFOSYS TECHNOLOGIES LIMITED
                 
    in Rs. crore   
Balance Sheet as at   September 30, 2005      March 31, 2005   
 
SOURCES OF FUNDS
                
SHAREHOLDERS’ FUNDS
                
Share capital
     136       135  
Reserves and surplus
     6,269       5,107  
     
 
     6,405       5,242  
     
APPLICATION OF FUNDS
                
FIXED ASSETS
                
Original cost
     2,639       2,183  
Less: Depreciation and amortization
     1,165       1,006  
     
Net book value
     1,474       1,177  
Add: Capital work-in-progress
     395       318  
     
 
     1,869       1,495  
INVESTMENTS
     2,438       1,329  
DEFERRED TAX ASSETS
     40       34  
CURRENT ASSETS, LOANS AND ADVANCES
                
Sundry debtors
     1,244       1,253  
Cash and bank balances
     1,292       1,481  
Loans and advances
     1,007       996  
     
 
     3,543       3,730  
LESS: CURRENT LIABILITIES AND PROVISIONS
                
Current liabilities
     641       578  
Provisions
     844       768  
     
NET CURRENT ASSETS
     2,058       2,384  
     
 
     6,405       5,242  
     
NOTE:
The audited Balance Sheet as on September 30, 2005 has been taken on record at the board meeting held on October 11, 2005
     
 
 
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Infosys Technologies Limited — Financial Release September 30, 2005   Indian GAAP Press Release
INFOSYS TECHNOLOGIES LIMITED
                                 
in Rs. crore, except per share data
Profit and Loss Account for the   Quarter ended September 30,   Half-year ended September 30,
    2005     2004     2005     2004  
 
Income from software services and products
     2,170       1,690       4,137       3,161  
Software development expenses
     1,167       910       2,231       1,702  
     
GROSS PROFIT
     1,003       780       1,906       1,459  
 
Selling and marketing expenses
     125       103       244       190  
General and administration expenses
     173       117       310       218  
     
 
     298       220       554       408  
OPERATING PROFIT BEFORE INTEREST, DEPRECIATION AND AMORTIZATION
     705       560       1,352       1,051  
Interest
    —       —       —       —  
Depreciation and amortization
     90       56       165       106  
     
OPERATING PROFIT AFTER INTEREST, DEPRECIATION AND AMORTIZATION
     615       504       1,187       945  
 
Other income
     45       30       76       48  
Provision for investments
     1       —       1       —  
     
NET PROFIT BEFORE TAX
     659       534       1,262       993  
Provision for taxation
     67       79       146       144  
     
NET PROFIT AFTER TAX
     592       455       1,116       849  
     
 
Balance Brought Forward
     1,952       462       1,428       71  
Less: Residual dividend paid
     —       —       —       3  
Additional dividend tax
     —       2       —       2  
     
 
     1,952       460       1,428       66  
     
 
AMOUNT AVAILABLE FOR APPROPRIATION
     2,544       915       2,544       915  
     
Dividend
                                
Interim
     177       134       177       134  
Final
     —       —       —       —  
     
Total dividend
     177       134       177       134  
Dividend tax
     25       17       25       17  
Balance in Profit and Loss Account
     2,342       764       2,342       764  
     
    2,544       915       2,544       915  
     
EARNINGS PER SHARE
(Equity shares, par value Rs. 5/- each)
                                
Basic
     21.75       16.99       41.08       31.76  
Diluted
     21.13       16.61       39.92       31.14  
Number of shares used in computing earnings per share
                                
Basic
     27,21,01,219       26,76,76,465       27,15,48,331       26,74,06,246  
Diluted
     28,00,30,650       27,37,76,678       27,94,45,295       27,27,68,201  
NOTE:
The audited Profit and Loss Account for the quarter ended September 30, 2005 has been taken on record at the board meeting held on October 11, 2005
A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com
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Infosys Technologies Limited — Financial Release September 30, 2005   Indian GAAP Press Release
CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
                 
  in Rs. crore
Consolidated Balance Sheet as at   September 30, 2005   March 31, 2005
 
SOURCES OF FUNDS
                
SHAREHOLDERS’ FUNDS
                
Share capital
     136       135  
Reserves and surplus
     6,323       5,090  
     
 
     6,459       5,225  
MINORITY INTEREST
     52       —  
PREFERENCE SHARES ISSUED BY SUBSIDIARY
     —       94  
     
    6,511       5,319  
     
APPLICATION OF FUNDS
                
FIXED ASSETS
                
Original cost
     2,757       2,287  
Less: Depreciation and amortization
     1,202       1,031  
     
Net book value
     1,555       1,256  
Add: Capital work-in-progress
     398       318  
     
 
     1,953       1,574  
INVESTMENTS
     2,329       1,211  
DEFERRED TAX ASSETS
     52       45  
CURRENT ASSETS, LOANS AND ADVANCES
                
Sundry debtors
     1,334       1,322  
Cash and bank balances
     1,396       1,576  
Loans and advances
     1,050       1,024  
     
 
     3,780       3,922  
LESS: CURRENT LIABILITIES AND PROVISIONS
                
Current liabilities
     751       657  
Provisions
     852       776  
     
NET CURRENT ASSETS
     2,177       2,489  
     
 
     6,511       5,319  
     
Principles of consolidation: The financial statements are prepared in accordance with the principles and procedures for the preparation and presentation of consolidated financial statements as set out in the Accounting Standard on Consolidated Financial Statements prescribed by the Institute of Chartered Accountants of India. The financial statements of the parent company Infosys Technologies Limited (“Infosys” or “company”) and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gains / losses.
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Infosys Technologies Limited — Financial Release September 30, 2005   Indian GAAP Press Release
CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
                                 
in Rs. crore, except per share data
Consolidated Profit and Loss Account for the   Quarter ended September 30,   Half-year ended September 30,
    2005     2004     2005     2004  
 
Income from software services, products and business process management
     2,294       1,749       4,366       3,267  
Software development and business process management expenses
     1,212       927       2,316       1,732  
     
GROSS PROFIT
     1,082       822       2,050       1,535  
 
Selling and marketing expenses
     149       122       291       228  
General and administration expenses
     199       139       361       257  
     
 
     348       261       652       485  
OPERATING PROFIT BEFORE INTEREST, DEPRECIATION AND AMORTIZATION AND MINORITY INTEREST
     734       561       1,398       1,050  
Interest
     —       —       —       —  
Depreciation and amortization
     96       61       176       113  
     
OPERATING PROFIT AFTER INTEREST, DEPRECIATION AND AMORTIZATION AND BEFORE MINORITY INTEREST
     638       500       1,222       937  
 
Other income
     44       30       72       45  
Provision for investments
     1       —       1       —  
     
NET PROFIT BEFORE TAX AND MINORITY INTEREST
     681       530       1,293       982  
 
Provision for taxation
     69       83       150       147  
     
NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST
     612       447       1,143       835  
 
 
Minority Interest
     6       —       6       —  
     
NET PROFIT AFTER TAX AND MINORITY INTEREST
     606       447       1,137       835  
 
Balance brought forward
     1,946       456       1,415       71  
Less: Residual dividend paid
     —       —       —       3  
Additional dividend tax
     —       2       —       2  
     
 
     1,946       454       1415       66  
     
 
AMOUNT AVAILABLE FOR APPROPRIATION
     2,552       901       2,552       901  
     
Dividend
                                
Interim
     177       134       177       134  
Final
    177       134       177       134  
     
Total dividend
     —       —       —       —  
Dividend tax
     25       17       25       17  
Balance in Profit and Loss Account
     2,350       750       2,350       750  
     
 
    2,552       901       2,552       901  
     
EARNINGS PER SHARE
(Equity shares, par value Re. 5/- each)
                                
Basic
     22.26       16.71       41.87       31.25  
Diluted
     21.63       16.34       40.69       30.64  
Number of shares used in computing earnings per share
                                
Basic
     27,21,01,219       26,76,76,465       27,15,48,331       26,74,06,246  
Diluted
     28,00,30,650       27,37,76,678       27,94,45,295       27,27,68,201  
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