<DOCUMENT>
<TYPE>EX-19.1
<SEQUENCE>3
<FILENAME>f87169exv19w1.txt
<DESCRIPTION>EXHIBIT 19.1
<TEXT>
<PAGE>
Exhibit 19.1
INFOSYS TECHNOLOGIES LIMITED
Report for the third quarter ended December 31, 2002
[INFOSYS TECHNOLOGIES LIMITED LOGO]
<PAGE>
At a glance - Indian GAAP (Non-consolidated financials)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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
------ ------ -------- -------- ----------
<S> <C> <C> <C> <C> <C>
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
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<TABLE>
<S> <C>
Year ended March 31, 2002 2,603.59
Quarter ended December 31, 2001 660.80
Quarter ended December 31, 2002 958.64
</TABLE>
Exports
<TABLE>
<S> <C>
Year ended March 31, 2002 2,552.47
Quarter ended December 31, 2001 648.35
Quarter ended December 31, 2002 945.18
</TABLE>
Net Profit from Ordinary Activities
<TABLE>
<S> <C>
Year ended March 31, 2002 807.96
Quarter ended December 31, 2001 206.04
Quarter ended December 31, 2002 256.31
</TABLE>
2
<PAGE>
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
<PAGE>
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
<PAGE>
Balance Sheet as at
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
in Rs. crore
-------------------------------------------------------------------------------
December 31,
-------------------- March 31,
2002 2001 2002
-------- -------- ---------
<S> <C> <C> <C>
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
======== ======== ========
</TABLE>
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
<TABLE>
<S> <C> <C> <C> <C>
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
</TABLE>
Bangalore
January 10, 2003
5
<PAGE>
Profit and loss account for the
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
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
========== ========== ========== ========== ==========
</TABLE>
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
<TABLE>
<S> <C> <C> <C> <C>
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
</TABLE>
Bangalore
January 10, 2003
6
<PAGE>
Schedules to the profit and loss account for the
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
in Rs. crore
---------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
--------------------- --------------------- ----------
2002 2001 2002 2001 2002
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
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
======== ======== ======== ======== ========
</TABLE>
7
<PAGE>
Schedules to the profit and loss account for the
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
in Rs. crore
--------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
---------------- ----------------- ----------
2002 2001 2002 2001 2002
------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C>
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
====== ====== ====== ====== ======
</TABLE>
8
<PAGE>
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 :
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended
December 31, December 31, Year ended
------------------- ------------------- March 31,
2002 2001 2002 2001 2002
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
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
-------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
1.2.1 Aggregate expenses (continued)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
------------------- --------------------- ----------
2002 2001 2002 2001 2002
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
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
======== ======== ======== ======== =========
</TABLE>
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:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended
December 31, December 31, Year ended
---------------- ----------------- March 31,
2002 2001 2002 2001 2002
---- ---- ----- ----- ----------
<S> <C> <C> <C> <C> <C>
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
----------------------------------------------------------------------------------------------------------------
</TABLE>
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:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Particulars Original cost Accumulated depreciation Net book value
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
----- ---- -----
</TABLE>
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.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Particulars Quarter ended Nine months ended
December 31, 2002 December 31, 2002
----------------- -----------------
<S> <C> <C>
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
---- ----
</TABLE>
10
<PAGE>
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.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Salary Contributions Perquisites Commission* Sitting Reimbursement Total
to provident and incentives fees of expenses remuneration
and other funds
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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
====================================================================================================================================
</TABLE>
* 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.
<TABLE>
<CAPTION>
Salary Contributions Perquisites Total Total Outstanding
to provident and incentives remuneration loans granted loans and
and other funds advances
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
====================================================================================================================================
</TABLE>
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:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Date of Grant Option plan Number of Exercise price Expiration of
options granted (in Rs.) options
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
2002 2001 2002 2001 2002
-----------------------------------------------------------------------------------------------------------------------
Net profit:
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
- 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
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
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:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
------------ ------------ ---------
Investee company 2002 2001 2002 2001 2002
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
==================================================================================================================
</TABLE>
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
<PAGE>
Industry segments
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
------------ ------------ ---------
2002 2001 2002 2001 2002
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Geography segments
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
--------------------- ------------------------ -----------
2002 2001 2002 2001 2002
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
------------ ------------ ---------
2002 2001 2002 2001 2002
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A complete set of the audited financial statements is available at
www.infosys.com
13
<PAGE>
Cash flow statement for the
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
In Rs crore
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
------------ ------------ ---------
2002 2001 2002 2001 2002
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
==================================================================================================================================
</TABLE>
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
<TABLE>
<S> <C> <C> <C> <C>
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
</TABLE>
14
<PAGE>
Schedules to the statement of cash flows
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
In Rs crore
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
------------ ------------ ---------
2002 2001 2002 2001 2002
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
====================================================================================================================================
</TABLE>
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
<PAGE>
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
<PAGE>
Consolidated Balance Sheet as at
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
in Rs. crore
--------------------------------------------------------------------------------
December 31, 2002
--------------------------------------------------------------------------------
<S> <C>
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
================================================================================
</TABLE>
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
<TABLE>
<S> <C> <C> <C> <C>
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
</TABLE>
17
<PAGE>
Consolidated Profit and Loss Account for the
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
in Rs. crore, except per share data
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended
------------- -----------------
December 31, 2002
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
===================================================================================================================================
</TABLE>
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
<TABLE>
<S> <C> <C> <C> <C>
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
</TABLE>
18
<PAGE>
Consolidated cash flow statement for the
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
in Rs. crore
------------------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended
------------- -----------------
December 31, 2002
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This is the Cash Flow Statement referred to in our report of even date
for Bharat S Raut & Co.
Chartered Accountants
<TABLE>
<S> <C> <C> <C> <C>
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
</TABLE>
19
<PAGE>
Ratio analysis as per Indian GAAP (Non - consolidated)
<TABLE>
<CAPTION>
Year
Quarter Nine months ended
ended ended March
December 31, December 31, 31,
-------------- -------------- -----
2002 2001 2002 2001 2002
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
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
----- ----- ----- ----- -----
</TABLE>
** Denotes growth compared with figures of the corresponding period in the
previous year.
LTM : Last Twelve Months
20
<PAGE>
At a glance - US GAAP
<TABLE>
<CAPTION>
US $ millions, except as otherwise stated
--------------------------------------------------------------
Quarter ended Nine months ended Year ended
December 31, December 31, March 31,
-------------------- -------------------- ------
2002 2001 2002 2001 2002
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
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
------ ------ -------- -------- --------
</TABLE>
Note: Market capitalization is calculated by considering the Indian market price
for the shares outstanding at the period / year end.
<TABLE>
<CAPTION>
Year ended Quarter ended Quarter ended
March 31, 2002 December 31, 2001 December 31, 2002
-------------- ----------------- -----------------
<S> <C> <C> <C>
Revenues 545.05 137.58 200.01
Operating income 178.55 45.83 57.27
Net income 164.47 41.65 52.25
</TABLE>
21
<PAGE>
Shareholder information
<TABLE>
<S> <C>
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
</TABLE>
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:
<TABLE>
<CAPTION>
NSE BSE BgSE
------------------------------- ------------------------------- -----------------------
High Low Volume High Low Volume High Low Volume
Rs. Rs. Nos. Rs. Rs. Nos. Rs. Rs. Nos.
----- ----- ----------- ----- ----- --------- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 --
----- ----- ----------- ----- ----- --------- -- -- --
</TABLE>
* 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
<TABLE>
<CAPTION>
Quarter ended
----------------------------------------------------------------------------
December 31, 2002 December 31, 2001
-------------------------------- --------------------------------
Nature of complaints Received Attended to Received Attended to
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Non-receipt of : dividend warrants 79 79 62 62
Share certificates -- -- 2 2
Total 79 79 64 64
</TABLE>
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,
<TABLE>
<CAPTION>
2002 2001
---------------------------------------------- ---------------------------------------------
No. of Voting No. of No. of Voting No. of
Category shareholders strength (%) shares held shareholders strength (%) shares held
------------ ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
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
------------ ------------ ----------- ------------ ------------ -----------
</TABLE>
*Held by beneficial owners outside India
49
<PAGE>
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
<TABLE>
<CAPTION>
For investor matters For queries relating to financial statements
<S> <C>
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
</TABLE>
12. Stock Exchange Codes
<TABLE>
<CAPTION>
Reuters code Bridge code Bloomberg code
------------- ------------ -------------
<S> <C> <C>
INFY.BO (BSE) IN;INF (BSE) INFO IN (BSE)
INFY.NS (NSE) IN;INFN (NSE) NINFO IN (NSE)
INFY.O (NASDAQ) US;INFY (NASDAQ)
</TABLE>
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:
<TABLE>
<CAPTION>
High Low
-------------------- -------------------- Volume
$ Rs. $ Rs. Nos.
----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
* 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
<PAGE>
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.
<PAGE>
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.
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