EX-99.2 BYLAWS 3 exv99w02.htm FORM OF RELEASE TO STOCK EXCHANGES

Exhibit 99.2
Form of Release to Stock Exchanges

 

 

 

Infosys Limited

Regd. office: Electronics City, Hosur Road, Bengaluru – 560 100, India

CIN : L85110KA1981PLC013115

Website: www.infosys.com

email: investors@infosys.com

T: 91 80 2852 0261, F: 91 80 2852 0362 

 

Statement of Consolidated Audited Results of Infosys Limited and its subsidiaries for the quarter ended June 30, 2018 prepared in compliance with the Indian Accounting Standards (Ind-AS)

 

(in crore, except per equity share data)

Particulars Quarter ended
June 30,
Quarter ended
March 31,
Quarter ended
June 30,
Year ended
March 31,
  2018 2018 2017 2018
  Audited Audited Audited Audited
Revenue from operations  19,128  18,083  17,078 70,522
Other income, net (Refer note c)  726  652  814 3,311
Total Income  19,854  18,735  17,892 73,833
Expenses        
Employee benefit expenses  10,462  10,054  9,366 38,893
Cost of technical sub-contractors  1,291  1,107  1,061 4,297
Travel expenses  603  492  527 1,995
Cost of software packages and others  545  466  440 1,870
Communication expenses  122  113  125 489
Consultancy and professional charges  305  282  246 1,043
Depreciation and amortisation expenses  436  458  450 1,863
Other expenses  827  639  752 2,924
Reduction in the fair value of Disposal Group held for sale ( Refer note a)  270  118 118
Total expenses  14,861  13,729  12,967 53,492
Profit before non-controlling interest / share in net profit / (loss) of associate  4,993  5,006  4,925 20,341
Share in net profit/(loss) of associate, including impairment of associate (Refer Note d)  (71) (71)
Profit before tax  4,993  5,006  4,854 20,270
Tax expense: (Refer Note b)        
Current tax 1,450 1,466 1,499 4,581
Deferred tax (69)  (150)  (128) (340)
Profit for the period  3,612  3,690  3,483 16,029
Other comprehensive income        
Items that will not be reclassified subsequently to profit or loss        
Remeasurement of the net defined benefit liability/asset, net 1 34  (3) 55
Equity instruments through other comprehensive income, net 4  9  – 7
Items that will be reclassified subsequently to profit or loss        
Fair value changes on derivatives designated as cash flow hedge, net  9  2  (66) (39)
Exchange differences on translation of foreign operations 87 200  107 321
Fair value changes on investments, net (45)  (15)  27 (1)
Total other comprehensive income/(loss), net of tax 56  230  65 343
Total comprehensive income for the period  3,668  3,920  3,548 16,372
Paid up share capital (par value 5/- each, fully paid) 1,088 1,088 1,144 1,088
Other equity 63,835 63,835 67,838 63,835
Earnings per equity share (par value 5/- each) (Refer note e)        
Basic () (Refer note a and b) 16.62 16.98 15.24 71.07
Diluted () 16.60 16.97 15.23 71.00

 

Note

 

a)In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company had initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “Disposal Group”). The Company anticipates completion of the sale by March 2019. On reclassification, assets and liabilities in respect of the Disposal Group had been reclassified as “held for sale" and measured at the lower of carrying amount and fair value less cost to sell. Consequently, a reduction in the fair value of Disposal Group held for sale amounting to 118 crore in respect of Panaya had been recognized in the Consolidated Statement of Profit and Loss for the quarter and year ended March 31, 2018.
  
 During quarter ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to 270 crore in respect of Panaya. Consequently, profit for quarter ended June 30, 2018 has decreased by 270 crore resulting in a decrease in Basic earnings per equity share by 1.24 ($0.02) for the quarter ended June 30, 2018.
  
 As of June 30, 2018 assets amounting to 1,867 crore and liabilities amounting to 345 crore in respect of the Disposal Group have been classified as “held for sale".
  
b)

In December 2017, on account of the conclusion of an Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service (“IRS”), the Company had, in accordance with the APA, reversed income tax expense provision of $225 million (1,432 crore), which pertained to previous periods which are no longer required. Consequently, profit for the year ended March 31, 2018 had increased resulting in an increase in Basic Earnings Per equity share by 5.88 ($0.09) for the year ended March 31, 2018.

  
c)Other income includes 262 crore towards interest on income tax refund for the year ended March 31, 2018.
  
d)During the quarter ended June 30, 2017,the Company had written down the entire carrying value of the investment in its associate DWA Nova LLC amounting to 71 crore.
  
e)EPS is not annualized for the quarter ended June 30, 2018, quarter ended March 31, 2018 and quarter ended June 30, 2017. 

  

Notes:

 

1.The audited interim consolidated financial statements for the quarter ended June 30, 2018 have been taken on record by the Board of Directors at its meeting held on July 13, 2018. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unqualified audit opinion. The information presented above is extracted from the audited interim consolidated financial statements. The interim consolidated financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter.MURTHAZA
  
2.Board changes
  
 a) The Board appointed Michael Gibbs as an Independent Director of the Company effective July 13, 2018 for a period of three years, based on the recommendation of the Nomination and Remuneration Committee of the Board.
  
 b) Ravi Venkatesan, Independent Director, has resigned from the company effective May 11, 2018. The Board placed on record its appreciation for the services rendered by him during his tenure.
  
3.Bonus issue
  
 

The Board in its meeting held on July 13, 2018 has considered, approved and recommended a bonus issue of one equity share for every equity share held and a stock dividend of one American Depositary Share (ADS) for every ADS held, as on a record date to be determined. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder would remain unchanged. The Board approved and recommended the issue of bonus shares to celebrate the 25th year of the Company's public listing in India and to further increase the liquidity of its shares. The bonus issue of equity shares and ADSs will be subject to approval by the shareholders, and any other applicable statutory and regulatory approvals.

 

The bonus shares once allotted shall rank pari passu in all respects and carry the same rights as the existing equity shareholders and shall be entitled to participate in full, in any dividend and other corporate action, recommended and declared after the new equity shares are allotted.

  
4.Acquisition of WongDoody Holding Company Inc
  
 On May 22, 2018, Infosys acquired 100% of the voting interests in WongDoody Holding Company Inc., (WongDoody) an US-based, full-service creative and consumer insights agency. The business acquisition was conducted by entering into a share purchase agreement for a total consideration of up to $75 million (approximately 514 crore at the acquisition date), which includes a cash consideration of $38 million (261 crore), contingent consideration of up to $28 million (approximately 192 crore at the acquisition date) and an additional consideration of up to $9 million (approximately 61 crore at the acquisition date), referred to as retention bonus, payable to the employees of WongDoody over the next three years, subject to their continuous employment with the Group.
  
5.Voluntary delisting of American Depositary Shares from Euronext Paris and London 
  
 In line with the announcement made on June 11, 2018, the Company has voluntarily delisted its American Depository Shares (“ADSs”) (ISIN US4567881085) from Euronext Paris and London on July 5, 2018 and its ADS were removed from Euroclear France on July 10, 2018. The primary reason for voluntary delisting from Euronext Paris and London was the low average daily trading volume of Infosys ADSs on these exchanges, which was not commensurate with the related administrative expenses. Infosys ADSs will continue to be listed on the NYSE under the symbol “INFY” and investors can continue to trade their ADSs on the New York Stock Exchange.
  
6.Adoption of Ind AS 115 - Revenue from contracts with customers
  
 Effective April 1, 2018, the Company adopted Ind AS 115 “Revenue from Contracts with Customers” using the cumulative catch-up transition method which is applied to contracts that were not completed as of April 1, 2018. Accordingly, the comparatives have not been retrospectively adjusted. The effect on adoption of Ind AS 115 was insignificant on the financial statements.
  
7.Information on dividends for the quarter ended June 30, 2018
  
 The Board of Directors declared a final dividend of 20.50/- per equity share for the financial year ended March 31, 2018 and a special dividend of 10/- per equity share and the same were approved by the shareholders at the Annual General Meeting held on June 23, 2018 and was paid on June 26, 2018.

 

   (in )

Particulars  Quarter ended
June 30,
 Quarter ended
March 31,
 Quarter ended
June 30,
Year ended
March 31,
  2018 2018 2017 2018
Dividend per share (par value 5/- each)        
 Interim dividend 13.00
 Final dividend  20.50 20.50
 Special dividend 10.00 10.00

 

8. Segment reporting (Consolidated - Audited)

(in crore)

Particulars Quarter ended
June 30,
Quarter ended
March 31,
Quarter ended
June 30,
Year ended
March 31,
  2018 2018 2017 2018
Revenue by business segment      
Financial Services (1) 6,075 5,886 5,631 23,172
Retail (2) 3,169 2,879 2,774 11,345
Communication (3) 2,429 2,334 2,151 8,883
Energy, Utilities , Resources and Services 2,374 2,172 1,932 8,297
Manufacturing 1,837 1,735 1,588 6,671
Hi Tech 1,422 1,335 1,250 5,131
Life Sciences (4) 1,260 1,213 1,126 4,698
All other segments (5) 562 529 626 2,325
Total 19,128 18,083 17,078 70,522
Less: Inter-segment revenue
Net revenue from operations 19,128 18,083 17,078 70,522
Segment profit before tax, depreciation and non-controlling interests:      
Financial Services (1) 1,562 1,638 1,541 6,370
Retail (2) 946 834 771 3,303
Communication (3) 670 697 661 2,619
Energy, Utilities , Resources and Services 624 635 549 2,411
Manufacturing 411 342 267 1,274
Hi Tech 388 392 335 1,446
Life Sciences (4) 354 348 354 1,391
All other segments (5) 19 42 84 199
Total 4,974 4,928 4,562 19,013
Less: Other unallocable expenditure 437 456 451 1,865
Add: Unallocable other income 726 652 814 3,311
Less: Reduction in the fair value of Disposal Group held for sale 270 118 118
Add: Share in net profit/(loss) of associate, including impairment of associate  (71) (71)
Profit before tax and non-controlling interests 4,993 5,006 4,854 20,270

 

 

(1) Financial Services include enterprises in Financial Services and Insurance

(2) Retail includes enterprises in Retail, Consumer Packaged Goods and Logistics

(3) Communication includes enterprises in Communication, Telecom OEM and Media

(4) Life Sciences includes enterprises in Life sciences and Health care

(5)All other segments include operating segments of businesses in India, Japan, China, Infosys Public Services & other enterprises in Public Services

 

Notes on segment information

 

Business segments

 

During the quarter ended June 30, 2018, the Company internally reorganized some of its business segments to deepen customer relationships, improve focus of sales investments and increase management oversight, consequent to which enterprises in Insurance which was earlier considered under the Life Sciences, Healthcare and Insurance business segment are now considered under the Financial Services business segment and enterprises in Communication, Telecom OEM and Media which was earlier under Energy & Utilities, Communication and Services is now shown as a separate business segment. Consequent to the internal reorganization, there were changes in the reportable business segments based on “Management approach” as defined under Ind AS 108, Operating Segments. Allocated expenses of segments include expenses incurred for rendering services from the Company's offshore software development centres and on-site expenses, which are categorized in relation to the associated efforts of the segment. Segmental operating income has changed in line with the internal reorganization as well as changes in the allocation method. The previous period figures, extracted from the audited consolidated financial statements, have been presented after incorporating necessary reclassification adjustments pursuant to changes in the reportable segments.

 

Segmental capital employed

 

Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. The Management believes that it is not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

 

9. Audited financial results of Infosys Limited (Standalone Information)

(in crore)

Particulars  Quarter ended
June 30,
 Quarter ended
March 31,
 Quarter ended
June 30,
Year ended
March 31,
  2018 2018 2017 2018
Revenue from operations 17,056 15,984 14,971 61,941
Profit before tax (Refer note (i) below) 4,782 4,390 4,716 19,908
Profit for the period (Refer note (i) below) 3,503 3,157 3,415 16,155

 

Note: The audited results of Infosys Limited for the above mentioned periods are available on our website, www.infosys.com and on the Stock Exchange website www.nseindia.com and www.bseindia.com. The information above has been extracted from the audited interim condensed financial statements as stated.

 

i) In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the company evaluated its portfolio of businesses and had planned for the sale of its investment in subsidiaries, Kallidus and Skava (together herein referred to as 'Skava') and Panaya. The Company anticipates completion of the sale by March, 2019. On reclassification, investments in these subsidiaries had been reclassified as 'Assets held for sale' and measured at the lower of carrying amount and fair value less cost to sell. Consequently, the Company had recognized a reduction in the fair value of investment amounting to 589 crore in the Statement of Profit and Loss during the quarter ended March 31, 2018, in respect of Panaya in the standalone books of Infosys Limited.

 

During the quarter ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of investment of 265 crore in respect of Panaya. Consequently , profit for the quarter ended June 30, 2018 has decreased by 265 crore resulting in a decrease in Basic earnings per equity share by 1.21 for the quarter ended June 30, 2018 in the standalone books of Infosys Limited.

 

Bengaluru, India
July 13, 2018
By order of the Board
For Infosys Limited
   
  Salil Parekh
Chief executive officer and Managing Director

 

The Board has also taken on record the condensed consolidated results of Infosys Limited and its subsidiaries for the quarter ended June 30, 2018, prepared as per International Financial Reporting Standards (IFRS) and reported in US dollars. A summary of the financial statements is as follows:

 

(in US$ million, except per equity share data)

Particulars Quarter ended
June 30, 2018
Quarter ended
March 31, 2018
Quarter ended
June 30, 2017
Year ended
March 31, 2018
  Audited Unaudited Unaudited Unaudited
Revenues 2,831 2,805 2,651 10,939
Cost of sales  1,819  1,793  1,692 7,001
Gross profit  1,012  1,012  959 3,938
Operating expenses  342  319  321 1,279
Operating profit  670  693  638 2,659
Other income, net  107  100  127 513
Reduction in the fair value of Disposal Group held for sale (Refer note a below)  (39)  (18) (18)
Share in net profit/(loss) of associate, including impairment  (11) (11)
Profit before income taxes  738  775  754 3,143
Income tax expense  204  204  213 657
Net profit  534  571  541 2,486
Earnings per equity share *        
Basic  0.25  0.26  0.24 1.10
Diluted  0.25  0.26  0.24 1.10
Total assets 11,406 12,255 13,178 12,255
Cash and cash equivalents including current investments 3,415 4,023 5,184 4,023

 

* EPS is not annualized for the quarter ended June 30, 2018, quarter ended March 31, 2018 and quarter ended June 30, 2017.

 

a)In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company had initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “Disposal Group”). The Company anticipates completion of the sale by March 2019. On reclassification, assets and liabilities in respect of the Disposal Group had been reclassified as “held for sale" and measured at the lower of carrying amount and fair value less cost to sell. Consequently, a reduction in the fair value of Disposal Group amounting to $18 million in respect of Panaya had been recognized in the Consolidated Profit and Loss for the quarter and year ended March 31, 2018.

 

During the quarter ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to $39 million in respect of Panaya. Consequently, profit for the quarter ended June 30, 2018 has decreased by $ 39 million, resulting in a decrease in Basic earnings per equity share by $0.02 for the quarter ended June 30, 2018.

 

As of June 30, 2018 assets amounting to $273 million and liabilities amounting to $50 million in respect of the disposal group have been classified as “held for sale".

 

Certain statements mentioned in this release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2017. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law.