EX-99.2 BYLAWS 3 exv99w02.htm IFRS INR PRESS RELEASE

 Exhibit 99.2
IFRS INR Press Release

 

 

10.1% CC YoY Revenue Growth in Q3 Leads to Upward Revision in Guidance

Infosys (NYSE: INFY) announces results for the Quarter ended December 31, 2018

 

Bengaluru, India – January 11, 2019

 

“With increased client relevance, we saw double digit (10.1%) year-on-year growth in Q3 on a constant currency basis”, said Salil Parekh, CEO and MD. “We also had another strong quarter in our digital business with 33.1% growth and large deals at $1.57 billion which gives us confidence entering 2019”, he added.

 

*Includes additional depreciation and amortization impact of 0.4% due to reclassification of assets of Panaya and Skava from “Held for Sale”.

 

·Q3 19 revenues grew year-on-year by 20.3% in INR terms; 10.1% in constant currency terms
·Q3 19 revenues grew sequentially by 3.8% in INR terms; 2.7% in constant currency terms
·Digital revenues at $942 million (31.5% of total revenues), year-on-year growth of 33.1% and sequential growth of 5.0% in constant currency terms
·9 months revenues grew by 16.6% in INR terms; 8.1% in constant currency terms
·FY 19 revenue guidance in constant currency revised upward to 8.5%-9.0%; Operating margin guidance retained at 22%-24%
·Announces buyback under open market route of 8,260 crore at a Maximum price of 800 per share
·Announces a special dividend of 4 per share

 

1.Financial Highlights- Consolidated results under International Financial Reporting Standards (IFRS)

 

For the Quarter ended December 31, 2018

Revenues were 21,400 crore, growth of 20.3% YoY and 3.8% QoQ

 

Operating profit was 4,830 crore, growth of 11.8% YoY and decline of 1.3% QoQ#

 

Basic EPS was 8.30, decline of 26.4% YoY#@ and 12.2% QoQ#

For nine months ended December 31, 2018

Revenues were 61,137 crore, growth of 16.6% YoY

 

Operating profit was 14,261 crore, growth of 12.5% YoY

 

Basic EPS was 26.06, decline of 3.6% YoY##@

 

#Includes additional depreciation and amortization expenses of 88 crore for Panaya and Skava. Additionally, Basic EPS includes reduction in fair value of Skava which together resulted in a reduction in EPS by 1.24.
   
## Includes additional depreciation and amortization expenses, reduction in fair value and carrying value of Panaya and Skava, respectively which resulted in a reduction in EPS by 1.86.
   
@ Includes impact on account of conclusion of an APA with the US IRS which has led to an increase in EPS of 3.15 for the quarter ended December 31, 2017 and 2.91 for nine months ended December 31, 2017.

 

“Volume growth was strong and revenue productivity was stable despite Q3 being a seasonally weak quarter. We had good growth across geographies and large business segments”, said Pravin Rao, COO. “Attrition declined during the quarter and we are continuing on the path of increased interventions and employee engagements to reduce it further.”

 

“We saw significant currency volatility during the quarter and managed it effectively by our hedging strategy”, said Jayesh Sanghrajka, Interim CFO. “Cash generation was strong during the quarter. Executing on the capital allocation strategy announced in April 2018, we have announced a share buyback program and a special dividend.”

 

2.Capital Allocation Policy

 

The Board in its meeting held today approved the following:

 

•Buyback of Equity Shares, from the open market route through the Indian stock exchanges, amounting to 8,260 crore (Maximum Buyback Size) (approximately $1,184 million) at a price not exceeding 800 per share (Maximum Buyback Price) (approximately $11.46 per share), subject to shareholders' approval by way of Postal Ballot, and

 

•A Special Dividend of 4/- per share (approximately $0.06 per share) that would result in a payout of approximately 2,107 crore (approximately $302 million) (including dividend distribution tax)

  

After the execution of the above, along with the special dividend (including dividend distribution tax) of 2,633 crore ($386 million) already paid in June 2018, the Company would complete the distribution of 13,000 crore, which was announced as part of its capital allocation policy in April 2018.

 

As the USD/INR* exchange rates have moved from April 2018 when the capital allocation policy was announced, the total capital allocation in US$ terms amounts to $1,872 million (comprising $1,184 million pertaining to buyback as mentioned above, $386 million towards special dividend paid in June 2018 and $302 million towards special dividend to be paid to shareholders in January 2019).

 

* US$ 1= 69.78 as at December 31, 2018

 

3.Assets Held for Sale

 

The company had earlier classified its subsidiaries Kallidus & Skava (together referred to as "Skava”) and Panaya as “Held for Sale”. During the quarter ended December 31, 2018, based on evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that it is no longer highly probable that sale would be consummated by March 31, 2019. Accordingly, Panaya and Skava have been de-classified from “held for sale” in accordance with the requirements of IFRS 5.

 

On de-classification, the Company recognized additional depreciation and amortization expenses of 88 crore and a reduction of 451 crore in the carrying value for Skava. The impact of the same on the Basic Earnings Per Share was a decrease of 1.24 for the quarter ended December 31, 2018.The Company plans to repurpose Skava’s micro services based business and refocus Panaya’s suite of products.

  

4.Board Update

 

Based on the recommendation of the Nomination and Remuneration Committee, the Board approved the re-appointment of Kiran Mazumdar-Shaw as the Lead Independent Director from April 1, 2019 to March 22, 2023, subject to shareholder’ approval

 

“I am delighted that the Infosys Board of Directors has unanimously recommended Kiran Mazumdar-Shaw for reappointment as the Lead Independent Director.”, said Nandan Nilekani, Chairman of the Board. “Kiran has been a pillar of strength to the board, especially over the last eighteen months as we steered the company to stability and growth. As chair of the Nominations & Remuneration Committee, she played a critical role in the CEO and CFO selection process. Her continuity, experience and insights are greatly valued by the Board as it guides the company in executing its strategy in the coming years”, he added.

 

About Infosys

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 45 countries to navigate their digital transformation. With over three decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.

 

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.

  

Safe Harbor

 

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, 2018. 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.

 

Contact

Investor Relations

Sandeep Mahindroo

+91 80 3980 1018

Sandeep_Mahindroo@infosys.com

  
Media Relations

Sarah Vanita Gideon
+91 80 4156 3998 Sarah_Gideon@infosys.com

Chiku Somaiya 
+1 71367 06752

Chiku.Somaiya@infosys.com

 

Infosys Limited and subsidiaries

Audited Condensed Consolidated Balance Sheet as at

(In crore except share data)

  December 31, 2018 March 31, 2018
ASSETS    
Current assets    
Cash and cash equivalents  16,448 19,818
Current investments 9,819 6,407
Trade receivables 14,861 13,142
Unbilled revenue 4,799 4,261
Prepayments and other current assets 5,417 4,313
Derivative financial instruments 418 16
  51,762 47,957
Assets held for sale(4)(5) – 2,060
Total current assets 51,762 50,017
Non-current assets    
Property, plant and equipment 12,680 12,143
Goodwill 3,586 2,211
Intangible assets 756 247
Investment in associate – –
Non-current investments 4,535 5,756
Deferred income tax assets 1,218 1,282
Income tax assets 6,505 6,070
Other non-current assets 1,807 2,164
Total non-current assets 31,087 29,873
Total assets 82,849 79,890
LIABILITIES AND EQUITY    
Current liabilities    
Trade payables 1,525 694
Derivative financial instruments – 42
Current income tax liabilities 1,722 2,043
Client deposits 31 38
Unearned revenue 3,028 2,295
Employee benefit obligations 1,596 1,421
Provisions 582 492
Other current liabilities 8,311 6,756
  16,795 13,781
Liabilities directly associated with assets held for sale(4)(5) – 324
Total current liabilities 16,795 14,105
Non-current liabilities    
Deferred income tax liabilities 533 541
Employee benefit obligations 45 48
Other non-current liabilities 439 272
Total liabilities 17,812 14,966
Equity    
Share capital- 5 par value 4,80,00,00,000 (2,40,00,00,000) equity shares authorized, issued and outstanding 4,347,938,160 (2,173,312,301), net of 20,709,738 (10,801,956) treasury shares, as at December 31, 2018 (March  31, 2018), respectively 2,176 1,088
Share premium 333 186
Retained earnings 58,880 61,241
Cash flow hedge reserves 36 –
Other reserves 2,573 1,583
Capital redemption reserve 56 56
Other components of equity 929 769
Total equity attributable to equity holders of the company 64,983 64,923
Non-controlling interests 54 1
Total equity 65,037 64,924
Total liabilities and equity 82,849 79,890

 

Infosys Limited and subsidiaries

 

Audited Condensed Consolidated Statement of Comprehensive Income for the

 


(In crore except equity share and per equity share data)

 

Three months ended

December 31, 2018

Three months ended

December 31, 2017

 Nine months ended December 31, 2018 Nine months ended December 31, 2017
Revenues 21,400 17,794 61,137 52,439
Cost of sales 14,016 11,450 39,585 33,576
Gross profit 7,384 6,344 21,552 18,863
Operating expenses        
Selling and marketing expenses 1,156 877 3,248 2,612
Administrative expenses 1,398 1,148 4,043 3,575
Total operating expenses 2,554 2,025 7,291 6,187
Operating profit 4,830 4,319 14,261 12,676
Other income, net(3) 753 962 2,218 2,659
Reduction in the fair value of Disposal Group held for sale (4) – – (270) –
Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from “Held from Sale”(5) (451) – (451) –
Share in net profit/(loss) of associate, including impairment(6)

 

–

 

–

 

–

 

(71)

Profit before income taxes 5,132 5,281 15,758 15,264
Income tax expense(7) 1,522 152 4,426 2,925
Net profit 3,610 5,129 11,332 12,339
Other comprehensive income        
Items that will not be reclassified subsequently to profit or loss:        
Re-measurement of the net defined benefit liability/asset, net

 

(23)

 

18

 

(19)

 

21

Equity instruments through other comprehensive income, net

 

57

 

(2)

 

69

 

(2)

Items that will be reclassified subsequently to profit or loss:        
Fair value changes on derivatives designated as cash flow hedge, net

 

56

 

5

 

36

 

(41)

Exchange differences on translation of foreign operations

 

(288)

 

(86)

 

133

 

121

Fair value changes on investments, net 37 (25) (23) 14
Total other comprehensive income/(loss), net of tax

 

(161)

 

(90)

 

196

 

113

Total comprehensive income 3,449 5,039 11,528 12,452
Profit attributable to:        
Owners of the Company   3,609 5,129 11,330 12,339
Non-controlling interests 1 – 2 –
  3,610 5,129 11,332 12,339
Total comprehensive income attributable to:        
Owners of the Company   3,448 5,039 11,526 12,452
Non-controlling interests 1 – 2 –
  3,449 5,039 11,528 12,452
Earnings per equity share(8)        
Basic () 8.30 11.27 26.06 27.03
Diluted () 8.29 11.27 26.03 27.01
Weighted average equity shares used in computing earnings per equity share(8)        
Basic 434,76,73,466 455,01,49,608 434,71,30,342 456,43,73,542
Diluted 435,27,31,387 455,27,63,140 435,27,05,150 456,85,74,984

  

NOTES:

 

1.The audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the three months and nine months ended December 31, 2018 have been taken on record at the Board meeting held on January 11, 2019.

 

2.A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com

 

3.Other income for three months and nine months ended  December 31, 2017 includes interest on income tax refund of 200 crore and 262 crore respectively

 

4.In the three months ended March 2018, Kallidus and Skava (together referred to as "Skava”) and Panaya, were classified as “Held for sale”. Consequently, a reduction in the fair value amounting to 118 crore and 270 crore in respect of Panaya was recognized for the year ended March 31, 2018 and three months ended June 30, 2018, respectively.

 

5.During the three months ended December 31, 2018, based on evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that it is no longer highly probable that sale would be consummated by March 31, 2019. Accordingly, Panaya and Skava have been de-classified from “held for sale” in accordance with IFRS 5.

 

On such reclassification, the Company recognized additional depreciation and amortization expenses of 88 crore and an adjustment in respect of excess of carrying amount over recoverable amount of 451 crore in respect of Skava during the three months ended December 31, 2018.

 

6.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

 

7.During the quarter ended December 31, 2017, on account of the conclusion of an Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service (“IRS”), the Company has reversed income tax expense provision of 1,432 crore which pertains to previous periods which are no longer required

 

8.Previous period share numbers and EPS have been adjusted for September 2018 bonus issue in accordance with IAS 33, Earnings per share