UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the quarter ended March 31, 2018
Commission File Number 001-35754
Infosys Limited
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant's name into English)
Electronics City, Hosur Road, Bangalore - 560 100, Karnataka, India. +91-80-2852-0261
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:
Form 20-F þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) : o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) : o
TABLE OF CONTENTS
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
SIGNATURES |
INDEX TO EXHIBITS |
EXHIBIT 99.1 |
EXHIBIT 99.2 |
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Infosys Limited (“we” or “the Company”) hereby furnishes the United States Securities and Exchange Commission with copies of the following information concerning our public disclosures regarding our results of operations and financial condition for the quarter and year ended March 31, 2018.
The following information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On April 13, 2018, we announced our results of operations for the quarter and year ended March 31, 2018. We issued press releases announcing our results under International Financial Reporting Standards ("IFRS"), copies of which are attached to this Form 6-K as Exhibit 99.1.
We have placed form of release to stock exchanges concerning our results of operations for the quarter and year ended March 31, 2018 under Ind-AS. A copy of the release to stock exchanges is attached to this Form 6-K as Exhibit 99.2.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Infosys Limited /s/ Inderpreet Sawhney | |
Date: April 13, 2018 |
Inderpreet Sawhney General Counsel and Chief Compliance Officer |
Exhibit No. | Description of Document |
99.1 | IFRS USD press release |
99.2 | Form of Release to Stock Exchanges |
Exhibit 99.1
IFRS USD Press Release
Infosys (NYSE: INFY) announces results for the Quarter and Year ended March 31, 2018
Revenues from Digital offerings at $ 2.79 billion (25.5% of total revenues) for FY 18 which grew at 3.6% sequentially in Q4 in constant currency terms
Entered into a definitive agreement to acquire WongDoody Holding Company, Inc., a US-based digital creative and consumer insights agency
FY 18 revenues grew by 7.2% in USD terms, 5.8% in constant currency terms, with operating margins at 24.3%
Bengaluru, India – April 13, 2018
1. | Highlights of financial results for the quarter and year ended March 31, 2018 |
· | Q4 revenues grew year-on-year by 9.2% in USD terms; 6.4% in constant currency terms |
· | Q4 revenues grew sequentially by 1.8% in USD terms; 0.6 % in constant currency terms |
· | Q4 operating margin improved to 24.7% from 24.3% in Q3 18 |
· | Q4 Basic EPS at $0.26; year-on-year growth of 10.8% |
· | FY 18 Basic EPS at $1.10; year-on-year growth of 17.8% |
· | FY 18 Basic EPS of $1.10 includes positive impact of $0.09 from Advance Pricing Agreement (APA) with the US IRS concluded earlier in the year |
· | Board recommended a final dividend of 20.50 per share ($0.31 per ADS*) and a special dividend of 10 per share ($0.15 per ADS*) |
· | FY 19 revenue guidance in constant currency at 6%-8%; FY 19 operating margin range at 22%-24% |
*USD/INR exchange rate as at March 31, 2018
Financial Highlights
Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended March 31, 2018
· | Revenues were $2,805 million for the quarter ended March 31, 2018 YoY growth of 9.2%; QoQ growth of 1.8% |
· | Operating profit was $693 million for the quarter ended March 31, 2018 YoY growth of 9.3%; QoQ growth of 3.6% |
· | Net profit was $571 million for the quarter ended March 31, 2018 YoY growth of 5.3%; QoQ decline of 28.2%; Q3 FY 18 net profits included positive impact of $225 million on account of conclusion of an APA with the US IRS |
· Basic EPS at $0.26 for the quarter ended March 31, 2018
Consolidated results under International Financial Reporting Standards (IFRS) for the year ended March 31, 2018
· | Revenues were $10,939 million for the year ended March 31, 2018 YoY growth of 7.2% in reported terms; 5.8% in constant currency terms |
· | Operating profit was $2,659 million for the year ended March 31, 2018 |
YoY growth of 5.5% | |
· | Net profit was $2,486 million for the year ended March 31, 2018 |
YoY growth of 16.2% | |
· | FY 18 net profits included impact on account of conclusion of an APA with the US IRS |
“I am pleased with our healthy revenue growth, profitability, and cash generation in Q4. Our robust performance is a reflection of the strong impact we have with our clients and the dedication of our employees. ‘Navigating Your Next’ is our aspiration of how we will partner with each one of our clients.” said Salil Parekh, CEO. “We will execute our strategy around the four pillars of Scaling our Agile Digital business which is today US$2.79 billion in revenue, Energizing our client’s Core technology landscape via AI and automation, Re-skilling our employees, and Expanding our localization in markets such as US, Europe, and Australia.”
“Revenue productivity per employee was stable during the year as the benefits of automation and newer services kicked in. Employee utilization remained healthy.” said Pravin Rao, COO. “During the quarter, we provided highest level of variable payouts in several years. We will be rolling out compensation increases for a large part of our workforce effective April 1st.”
“Our operating margins during the quarter and fiscal 2018 were resilient due to unwavering focus on productivity and operational efficiency, leading to a robust cash generation. During the year, the company implemented the capital allocation policy including the successful closure of $2 billion share buyback program in December 2017 and healthy increase in Dividend Per Share for the year.” said M.D. Ranganath, CFO. “Our margin guidance reflects our emphasis on digital-led growth and focused investments in this journey.”
2. | Outlook for FY 2019 |
The Company’s outlook (consolidated) for the fiscal year ending March 31, 2019, under IFRS is as follows:
· | Revenues are expected to grow 6%-8% in constant currency*; |
· | Revenues are expected to grow 7%-9% in USD terms based on the exchange rates as of March 31, 2018** |
*FY 18 constant currency rates - AUD/USD – 0.78; Euro/USD – 1.18; GBP/USD – 1.33
**Currency rates as of March 31, 2018 - AUD/USD – 0.77; Euro/USD – 1.24; GBP/USD – 1.42
3. | Capital Allocation |
The Board, in its meeting on April 13, 2018, reviewed and approved the Capital Allocation Policy of the Company after taking into consideration the strategic and operational cash requirements of the Company in the medium term.
The key aspects of the Capital Allocation Policy are:
i. | The Board has decided to retain the current policy of returning upto 70 % of the free cash flow of the corresponding Financial Year in such manner, as may be decided by the Board from time to time, subject to applicable laws and requisite approvals, if any. Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend payout includes Dividend Distribution Tax (DDT). | |
ii. | In addition to the above, out of the cash on the Balance Sheet, the Board has identified an amount of upto 13,000 crores ($2 billion*) to be paid to shareholders in the following manner: | |
a) | A special dividend of 10 per share ($0.15 per ADR*) resulting in a payout of approximately 2,600 crore (approximately $400 million*) in June 2018 | |
b) | Identified an amount of upto approximately 10,400 crore (approximately $1,600 million*) to be paid out to shareholders for the Financial Year 2019, in such a manner, to be decided by the Board, subject to applicable laws and requisite approvals, if any. Further announcements in this regard will be made, as appropriate, in due course. |
*USD/INR exchange rate at 65.00
4. | Dividend Payout |
For the Financial Year 2018, the Board recommended a final dividend of 20.50 per share ($0.31 per ADR) amounting to 5,349 crore ($821 million) including DDT. After including the interim dividend of 13 per share, the total dividend for Financial Year 2018 will amount to 33.50 per share resulting in a payout of 8,771 crore ($1,349 million) including DDT, which will amount to approximately 70% of free cash flow for the Financial Year 2018. The total dividend of 33.50 per share is approximately 30% higher than total dividend of 25.75 per share for Financial Year 2017.
The aggregate dividend including the special dividend of 10 per share ($0.15 per ADR) works out to 43.50 per share ($0.67 per ADR) resulting in an aggregate dividend payout of approximately 11,371 crore (approximately $1,749 million), including DDT.
5. | Lead Independent Director |
The Board appointed Kiran Mazumdar-Shaw, Independent Director as the Lead Independent Director of the Board.
6. | Acquisition |
On April 13, 2018, the Company entered into a definitive agreement to acquire WongDoody Holding Company, Inc., a US-based digital creative and consumer insights agency for a total consideration of up to $75 million including contingent consideration and retention payouts, subject to regulatory approvals and fulfillment of closing conditions.
7. | Review of Subsidiaries |
In the quarter ended March 31, 2018, on conclusion of a strategic review of its portfolio of businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “disposal group”). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to 2,060 crore ($316 million) and liabilities amounting to 324 crore ($50 million) in respect of the disposal group have been reclassified and presented as "held for sale".
On reclassification, an impairment loss of 118 crore ($18 million) in respect of Panaya has been recognized in the consolidated profit and loss for the quarter and year ended March 31, 2018. The corresponding write down in the investment value of Panaya in the standalone financial statements of Infosys Ltd. is 589 crore ($90 million).
About Infosys Ltd.
Infosys is a global leader in technology services and consulting. We enable clients in 45 countries to create and execute strategies for their digital transformation. From engineering to application development, knowledge management and business process management, we help our clients find the right problems to solve, and to solve these effectively. Our team of 200,000+ innovators, across the globe, is differentiated by the imagination, knowledge and experience, across industries and technologies that we bring to every project we undertake.
Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise thrive in the digital age.
Safe Harbor
Certain statements in this release, including those concerning our future growth prospects are forward-looking statements regarding our future business expectations, the amount and timing of future dividends and other potential future payments to shareholders, and the intent to identify potential buyers for Skava and Panaya and the anticipated timing to complete such sales, are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited those relating to risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry, capital allocation policy and the ability and timing to identify buyers for Skava and Panaya and to successfully complete such sales. Additional risks that could cause actual results to differ materially are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2017. These filings are available at www.sec.gov. Please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.
Contact
Investor Relations |
Sandeep Mahindroo +91 80 3980 1018 Sandeep_Mahindroo@infosys.com |
|
Media Relations |
Sarah Vanita Gideon Sarah_Gideon@infosys.com |
Chiku Somaiya Chiku.Somaiya@infosys.com |
Infosys Limited and subsidiaries
Unaudited Condensed Consolidated Balance Sheets as at
(Dollars in millions except equity share data)
March 31, 2018 | March 31, 2017 | |
ASSETS | ||
Current assets | ||
Cash and cash equivalents | 3,041 | 3,489 |
Current investments | 982 | 1,538 |
Trade receivables | 2,016 | 1,900 |
Unbilled revenue | 654 | 562 |
Prepayments and other current assets | 662 | 749 |
Derivative financial instruments | 2 | 44 |
7,357 | 8,282 | |
Assets held for sale(4) | 316 | – |
Total current assets | 7,673 | 8,282 |
Non-current assets | ||
Property, plant and equipment | 1,863 | 1,807 |
Goodwill | 339 | 563 |
Intangible assets | 38 | 120 |
Investment in associate | – | 11 |
Non-current investments | 883 | 984 |
Deferred income tax assets | 196 | 83 |
Income tax assets | 931 | 881 |
Other non-current assets | 332 | 123 |
Total non-current assets | 4,582 | 4,572 |
Total assets | 12,255 | 12,854 |
LIABILITIES AND EQUITY | ||
Current liabilities | ||
Trade payables | 107 | 57 |
Derivative financial instruments | 6 | – |
Current income tax liabilities | 314 | 599 |
Client deposits | 6 | 5 |
Unearned revenue | 352 | 274 |
Employee benefit obligations | 218 | 209 |
Provisions | 75 | 63 |
Other current liabilities | 1,036 | 954 |
2,114 | 2,161 | |
Liabilities directly associated with assets held for sale(4) | 50 | – |
Total current liabilities | 2,164 | 2,161 |
Non-current liabilities | ||
Deferred income tax liabilities | 82 | 32 |
Employee benefit obligations | 7 | – |
Other non-current liabilities | 42 | 24 |
Total liabilities | 2,295 | 2,217 |
Equity | ||
Share capital- 5 ($0.16) par value 2,400,000,000 (2,400,000,000) equity shares authorized, issued and outstanding 2,173,312,301 (2,285,655,150), net of 10,801,956 (11,289,514) treasury shares as at March 31, 2018 (March 31, 2017), respectively | 190 | 199 |
Share premium | 247 | 587 |
Retained earnings | 11,587 | 12,190 |
Cash flow hedge reserve | – | 6 |
Other reserves | 244 | – |
Capital redemption reserve | 9 | – |
Other components of equity | (2,317) | (2,345) |
Total equity attributable to equity holders of the company | 9.960 | 10,637 |
Non-controlling interests | – | – |
Total equity | 9,960 | 10,637 |
Total liabilities and equity | 12,255 | 12,854 |
Infosys Limited and subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income
(Dollars in millions except share and per equity share data)
Three months ended March 31, 2018 | Three months ended March 31, 2017 | Year ended March 31, 2018 | Year ended March 31, 2017 | |
Revenues | 2,805 | 2,569 | 10,939 | 10,208 |
Cost of sales | 1,793 | 1,614 | 7,001 | 6,446 |
Gross profit | 1,012 | 955 | 3,938 | 3,762 |
Operating expenses: | ||||
Selling and marketing expenses | 147 | 133 | 552 | 535 |
Administrative expenses | 172 | 188 | 727 | 707 |
Total operating expenses | 319 | 321 | 1,279 | 1,242 |
Operating profit | 693 | 634 | 2,659 | 2,520 |
Other income, net(4)(5) | 82 | 112 | 495 | 459 |
Share in net profit/(loss) of associate, including impairment(6) | – | (4) | (11) | (5) |
Profit before income taxes | 775 | 742 | 3,143 | 2,974 |
Income tax expense(3) | 204 | 199 | 657 | 834 |
Net profit(3) | 571 | 543 | 2,486 | 2,140 |
Other comprehensive income | ||||
Items that will not be reclassified subsequently to profit or loss: | ||||
Re-measurements of the net defined benefit liability/asset, net |
6 |
3 |
9 |
(7) |
Cumulative impact on reversal of unrealized gain on quoted debt securities on adoption of IFRS 9 |
– |
– |
– |
(5) |
Equity instruments through other comprehensive income, net |
1 |
(1) |
1 |
(1) |
Items that will be reclassified subsequently to profit or loss: | ||||
Fair valuation of investments, net | (2) | (2) | – | (2) |
Fair value changes on derivatives designated as cash flow hedge, net |
– |
2 |
(6) |
6 |
Foreign currency translation | (164) | 441 | 18 | 198 |
Total other comprehensive income/(loss), net of tax | (159) | 443 | 22 | 189 |
Total comprehensive income | 412 | 986 | 2,508 | 2,329 |
Profit attributable to: | ||||
Owners of the Company | 571 | 543 | 2,486 | 2,140 |
Non-controlling interests | – | – | – | – |
571 | 543 | 2,486 | 2,140 | |
Total comprehensive income attributable to: | ||||
Owners of the Company | 412 | 986 | 2,508 | 2,329 |
Non-controlling interests | – | – | – | – |
412 | 986 | 2,508 | 2,329 | |
Earnings per equity share(3) | ||||
Basic ($) | 0.26 | 0.24 | 1.10 | 0.94 |
Diluted ($) | 0.26 | 0.24 | 1.10 | 0.94 |
Weighted average equity shares used in computing earnings per equity share | ||||
Basic | 217,32,77,060 | 228,56,54,881 | 225,53,32,322 | 228,56,39,447 |
Diluted | 217,48,08,512 | 228,66,52,003 | 225,75,73,870 | 2,28,63,96,745 |
NOTES:
1. | The unaudited condensed consolidated Balance sheets and Statement of Comprehensive Income for the three months and year ended March 31, 2018 have been taken on record at the Board meeting held on April 13, 2018 |
2. | A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com |
3. | During the quarter ended December 31, 2017, on account of the conclusion of an Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service (“IRS”), the Company has, in accordance with the APA, reversed income tax expense provision of $225 million which pertains to previous periods which are no longer required. Consequently, profit for the quarter ended December 31, 2017 and the year ended March 31, 2018 has increased and therefore has led to an increase in Basic earnings per equity share by $0.10 for quarter ended December 31, 2017 and $0.09 for the year ended March 31, 2018. |
4. | In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “disposal group”). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to $316 million and liabilities amounting to $50 million in respect of the disposal group have been reclassified as “held for sale". On reclassification, the disposal group has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of $18 million in respect of Panaya has been recognized in the consolidated profit and loss for the quarter and year ended March 31, 2018. The disposal group does not constitute a separate major component of the company and therefore has not been classified as discontinued operations |
5. | Other income includes $41 million towards interest on income tax refund for the year ended March 31, 2018 |
6. | During the year ended March 31, 2018, the Company has written down the entire carrying value of the investment in its associate DWA Nova LLC amounting to $11 million. The write-down in the carrying value of investment in associate DWA Nova LLC during the quarter and year ended March 31, 2017 was $3 million. |
Exhibit 99.2
Form of Release to Stock Exchanges
Infosys Limited Regd. office: Electronics City, Hosur Road, Bengaluru – 560 100, India |
CIN : L85110KA1981PLC013115 Website: www.infosys.com email: investors@infosys.com T: 91 80 2852 0261, |
Audited consolidated financial results of Infosys Limited and its subsidiaries for the quarter and year ended March 31, 2018 prepared in compliance with the Indian Accounting Standards (Ind-AS)
(in crore, except per equity share data)
Particulars | Quarter ended March 31, |
Quarter ended December 31, |
Quarter ended March 31, |
Year ended March 31, | |
2018 | 2017 | 2017 | 2018 | 2017 | |
Audited | Audited | Audited | Audited | Audited | |
Revenue from operations | 18,083 | 17,794 | 17,120 | 70,522 | 68,484 |
Other income, net (Refer Note b and c) | 534 | 962 | 746 | 3,193 | 3,080 |
Total Income | 18,617 | 18,756 | 17,866 | 73,715 | 71,564 |
Expenses | |||||
Employee benefit expenses | 10,054 | 9,869 | 9,309 | 38,893 | 37,659 |
Cost of technical sub-contractors | 1,107 | 1,041 | 1,000 | 4,297 | 3,833 |
Travel expenses | 492 | 496 | 474 | 1,995 | 2,235 |
Cost of software packages and others | 466 | 472 | 478 | 1,870 | 1,597 |
Communication expenses | 113 | 120 | 149 | 489 | 549 |
Consultancy and professional charges | 282 | 238 | 229 | 1,043 | 763 |
Depreciation and amortisation expenses | 458 | 498 | 446 | 1,863 | 1,703 |
Other expenses | 639 | 741 | 823 | 2,924 | 3,244 |
Total expenses | 13,611 | 13,475 | 12,908 | 53,374 | 51,583 |
Profit before non-controlling interest / share in net profit / (loss) of associate | 5,006 | 5,281 | 4,958 | 20,341 | 19,981 |
Share in net profit/(loss) of associate, including impairment of associate (Refer Note d) | – | – | (25) | (71) | (30) |
Profit before tax | 5,006 | 5,281 | 4,933 | 20,270 | 19,951 |
Tax expense: (Refer Note a) | |||||
Current tax | 1,466 | 144 | 1,249 | 4,581 | 5,653 |
Deferred tax | (150) | 8 | 81 | (340) | (55) |
Profit for the period (Refer Note a) | 3,690 | 5,129 | 3,603 | 16,029 | 14,353 |
Other comprehensive income | |||||
Items that will not be reclassified subsequently to profit or loss | |||||
Remeasurement of the net defined benefit liability/asset | 34 | 18 | 20 | 55 | (45) |
Equity instruments through other comprehensive income, net | 9 | (2) | (5) | 7 | (5) |
Items that will be reclassified subsequently to profit or loss | |||||
Fair value changes on derivatives designated as cash flow hedges, net | 2 | 5 | 11 | (39) | 39 |
Exchange differences on translation of foreign operations | 200 | (86) | (197) | 321 | (257) |
Fair value changes on investments, net | (15) | (25) | (10) | (1) | (10) |
Total other comprehensive income/(loss), net of tax | 230 | (90) | (181) | 343 | (278) |
Total comprehensive income for the period | 3,920 | 5,039 | 3,422 | 16,372 | 14,075 |
Paid up share capital (par value 5/- each, fully paid) | 1,088 | 1,088 | 1,144 | 1,088 | 1,144 |
Other equity | 63,835 | 67,838 | 67,838 | 63,835 | 67,838 |
Earnings per equity share (par value 5/- each) (Refer Note e) | |||||
Basic () (Refer Note a) | 16.98 | 22.55 | 15.77 | 71.07 | 62.80 |
Diluted () | 16.97 | 22.53 | 15.76 | 71.00 | 62.77 |
Note
a) | During the quarter ended December 31, 2017, on account of the conclusion of an Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service (“IRS”), the Company has, in accordance with the APA, reversed income tax expense provision of $225 million (1,432 crore) which pertains to previous periods which are no longer required. Consequently, profit for the quarter ended December 31, 2017 and the year ended March 31, 2018 has increased and therefore has led to an increase in Basic earnings per equity share by 6.29 ($0.10) for quarter ended December 31, 2017 and 5.88 ($0.09) for the year ended March 31, 2018. |
b) | In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “disposal group”). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to 2,060 crore and liabilities amounting to 324 crore in respect of the disposal group have been reclassified as “held for sale". On reclassification, the disposal group has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of 118 crore in respect of Panaya has been recognized in the consolidated profit and loss for the quarter and year ended March 31, 2018. |
The disposal group does not constitute a separate major component of the company and therefore has not been classified as discontinued operations. | |
c) | Other income includes 200 crore towards interest on income tax refund for the quarter ended December 31, 2017 and 262 crore for the year ended March 31, 2018. |
d) | During the year ended March 31,2018 the Company has written down the entire carrying value of the investment in its associate DWA Nova LLC amounting to 71 crore. The write-down in the carrying value of investment in associate DWA Nova LLC during the quarter and year ended March 31, 2017 was 18 crore. |
e) | EPS is not annualized for the quarter ended March 31, 2018, December 31, 2017 and March 31, 2017. |
Notes:
1. | The audited interim consolidated financial statements for the quarter and year ended March 31, 2018 have been taken on record by the Board of Directors at its meeting held on April 13, 2018. The statutory auditors, Deloitte Haskins & Sells LLP have expressed an unqualified audit opinion. Amounts for the quarter and year ended March 31, 2017 were audited by previous auditors - B S R & Co LLP. The information for the year ended March 31, 2018 presented above is extracted from the audited consolidated financial statements and the information for the quarter ended March 31, 2018 are extracted from the audited interim consolidated financial statements. These financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter. |
2. | The Board appointed Kiran Mazumdar- Shaw, Independent Director as the Lead Independent Director of the Board. |
3. | On April 13, 2018, the Company entered into a definitive agreement to acquire Wongdoody Holding Company Inc., a US-based creative and consumer insights agency for a total consideration of up to $75 million ( approximately 489 crore) including contingent consideration and retention payouts, subject to regulatory approvals and fulfillment of closing conditions |
4. |
Information on dividends for the quarter and year ended March 31, 2018 |
An interim dividend of 13/- (par value of 5/- each) per equity share was declared on October 24, 2017 and the same was paid on November 4, 2017. The interim dividend declared in the previous year was 11/- per equity share. For financial year 2018, the Board recommended a final dividend of 20.50/- per equity share and a special dividend of 10/- per equity share. The payment is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company, to be held on June 23, 2018. The book closure date for the purpose of the Annual General Meeting and payment of final dividend is June 16, 2018. The final dividend declared in the previous year was 14.75/- per equity share. |
(in )
Particulars | Quarter ended March 31, |
Quarter ended December 31, |
Quarter ended March 31, |
Year ended March 31, | |
2018 | 2017 | 2017 | 2018 | 2017 | |
Dividend per share (par value 5/- each) | |||||
Interim dividend | – | – | – | 13.00 | 11.00 |
Final dividend | 20.50 | – | 14.75 | 20.50 | 14.75 |
Special dividend | 10.00 | – | – | 10.00 | – |
5. Consolidated statement of assets and liabilities
(in crore)
Particulars | As at | |
March 31, 2018 | March 31, 2017 | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 10,116 | 9,751 |
Capital work-in-progress | 1,606 | 1,365 |
Goodwill (Refer Note b above) | 2,211 | 3,652 |
Other Intangible assets | 247 | 776 |
Investment in associate | – | 71 |
Financial assets: | ||
Investments | 5,756 | 6,382 |
Loans | 36 | 29 |
Other financial assets | 284 | 309 |
Deferred tax assets (net) | 1,282 | 540 |
Income tax assets (net) | 6,070 | 5,716 |
Other non-current assets | 2,265 | 1,059 |
Total non-current assets | 29,873 | 29,650 |
Current assets | ||
Financial assets | ||
Investments | 6,407 | 9,970 |
Trade receivables | 13,142 | 12,322 |
Cash and cash equivalents | 19,818 | 22,625 |
Loans | 239 | 272 |
Other financial assets | 6,684 | 5,980 |
Other current assets | 1,667 | 2,536 |
47,957 | 53,705 | |
Assets held for sale (Refer Note b above) | 2,060 | – |
Total current assets | 50,017 | 53,705 |
Total assets | 79,890 | 83,355 |
EQUITY AND LIABILITIES | ||
Equity | ||
Equity share capital | 1,088 | 1,144 |
Other equity | 63,835 | 67,838 |
Total equity attributable to equity holders of the Company | 64,923 | 68,982 |
Non-controlling interests | 1 | – |
Total equity | 64,924 | 68,982 |
Liabilities | ||
Non-current liabilities | ||
Financial liabilities | ||
Other financial liabilities | 61 | 70 |
Deferred tax liabilities (net) | 541 | 207 |
Other non-current liabilities | 259 | 83 |
Total non-current liabilities | 861 | 360 |
Current liabilities | ||
Financial liabilities | ||
Trade payables | 694 | 367 |
Others financial liabilities | 6,946 | 6,349 |
Provisions | 492 | 405 |
Income tax liabilities (net) | 2,043 | 3,885 |
Other current liabilities | 3,606 | 3,007 |
13,781 | 14,013 | |
Liabilities directly associated with assets held for sale ( Refer Note b above) | 324 | – |
Total current liabilities | 14,105 | 14,013 |
Total equity and liabilities | 79,890 | 83,355 |
The disclosure is an extract of the audited Consolidated Balance Sheet as at March 31, 2018 and March 31, 2017 prepared in compliance with the Indian Accounting Standards (Ind-AS).
6. Segment reporting (Consolidated - Audited)
(in crore)
Particulars | Quarter ended March 31, |
Quarter ended December 31, |
Quarter ended March 31, |
Year ended March 31, | |
2018 | 2017 | 2017 | 2018 | 2017 | |
Revenue by business segment | – | ||||
Financial Services (FS) | 4,683 | 4,643 | 4,655 | 18,638 | 18,555 |
Manufacturing (MFG) | 1,965 | 1,955 | 1,918 | 7,699 | 7,507 |
Energy & utilities, Communication and Services (ECS) | 4,437 | 4,241 | 3,963 | 16,757 | 15,430 |
Retail, Consumer packaged goods and Logistics (RCL) | 2,830 | 2,837 | 2,710 | 11,104 | 11,225 |
Life Sciences, Healthcare and Insurance (HILIFE) | 2,425 | 2,375 | 2,148 | 9,271 | 8,437 |
Hi-Tech | 1,302 | 1,256 | 1,211 | 5,047 | 5,122 |
All other segments | 441 | 487 | 515 | 2,006 | 2,208 |
Total | 18,083 | 17,794 | 17,120 | 70,522 | 68,484 |
Less: Inter-segment revenue | – | – | – | – | – |
Net revenue from operations | 18,083 | 17,794 | 17,120 | 70,522 | 68,484 |
Segment profit before tax, depreciation and non-controlling interests: | – | ||||
Financial Services (FS) | 1,321 | 1,254 | 1,328 | 5,207 | 5,209 |
Manufacturing (MFG) | 445 | 498 | 472 | 1,819 | 1,848 |
Energy & utilities, Communication and Services (ECS) | 1,219 | 1,145 | 1,120 | 4,550 | 4,431 |
Retail, Consumer packaged goods and Logistics (RCL) | 842 | 834 | 784 | 3,249 | 3,249 |
Life Sciences, Healthcare and Insurance (HILIFE) | 678 | 689 | 596 | 2,575 | 2,308 |
Hi-Tech | 332 | 304 | 291 | 1,224 | 1,277 |
All other segments | 91 | 94 | 70 | 389 | 292 |
Total | 4,928 | 4,818 | 4,661 | 19,013 | 18,614 |
Less: Unallocable expenditure | 456 | 499 | 449 | 1,865 | 1,713 |
Add: Unallocable other income ( Refer Note b above) | 534 | 962 | 746 | 3,193 | 3,080 |
Add: Share in net profit/(loss) of associate, including impairment of associate | – | – | (25) | (71) | (30) |
Profit before tax and non-controlling interests | 5,006 | 5,281 | 4,933 | 20,270 | 19,951 |
Notes on segment information
Business segments
Based on the "management approach" as defined in Ind-AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented along these business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments.
Segmental capital employed
Assets and liabilities used in the Group's business are not identified to any of the reportable segments, as these are used interchangeably between segments. The Management believes that it is not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.
7. Audited financial results of Infosys Limited (Standalone Information)
(in crore)
Particulars | Quarter ended March 31, |
Quarter ended December 31, |
Quarter ended March 31, |
Year ended March 31, | |
2018 | 2017 | 2017 | 2018 | 2017 | |
Revenue from operations | 15,984 | 15,631 | 14,920 | 61,941 | 59,289 |
Profit before tax (Refer Note i below) | 4,390 | 5,922 | 4,783 | 19,908 | 18,938 |
Profit for the period (Refer Note i below) | 3,157 | 6,004 | 3,562 | 16,155 | 13,818 |
Note: The audited results of Infosys Limited for the above mentioned periods are available on our website, www.infosys.com and on the Stock Exchange website www.nseindia.com and www.bseindia.com. The information above has been extracted from the audited standalone finacial statements for the year ended March 31, 2018 and the information for the quarter ended March 31, 2018 are extracted from the audited interim condensed financial statements.
i) In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya . The Company anticipates completion of the sale by March 2019 and accordingly, investments amounting to 1,525 crore in respect of these subsidiaries have been reclassified as “held for sale". On reclassification, these investments has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of 589 crore in respect of Panaya has been recognized in the standalone profit and loss for the quarter and year ended March 31, 2018.
By order of the Board
for Infosys Limited
Bengaluru, India April 13, 2018 |
Salil
Parekh Chief Executive Officer and Managing Director |
The Board has also taken on record the unaudited consolidated results of Infosys Limited and its subsidiaries for the quarter and year ended March 31, 2018, prepared as per International Financial Reporting Standards (IFRS) and reported in US dollars. A summary of the financial statements is as follows:
(in US$ million, except per equity share data)
Particulars | Quarter ended March 31, |
Quarter ended December 31, |
Quarter ended March 31, |
Year ended March 31, | |
2018 | 2017 | 2017 | 2018 | 2017 | |
Revenues | 2,805 | 2,755 | 2,569 | 10,939 | 10,208 |
Cost of sales | 1,793 | 1,773 | 1,614 | 7,001 | 6,446 |
Gross profit | 1,012 | 982 | 955 | 3,938 | 3,762 |
Operating expenses | 319 | 313 | 321 | 1,279 | 1,242 |
Operating profit | 693 | 669 | 634 | 2,659 | 2,520 |
Other income, net ( Refer Note a below) | 82 | 149 | 112 | 495 | 459 |
Share in net profit/(loss) of associate, including impairment | – | – | (4) | (11) | (5) |
Profit before income tax | 775 | 818 | 742 | 3,143 | 2,974 |
Income tax expense | 204 | 22 | 199 | 657 | 834 |
Net profit | 571 | 796 | 543 | 2,486 | 2,140 |
Earnings per equity share * | |||||
Basic | 0.26 | 0.35 | 0.24 | 1.10 | 0.94 |
Diluted | 0.26 | 0.35 | 0.24 | 1.10 | 0.94 |
Total assets | 12,255 | 11,889 | 12,854 | 12,255 | 12,854 |
Cash and cash equivalents including current investments | 4,023 | 3,615 | 5,027 | 4,023 | 5,027 |
* EPS is not annualized for the quarter ended March 31, 2018, quarter ended December 31, 2017 and quarter ended March 31, 2017.
a) In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the Company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “disposal group”). The Company anticipates completion of the sale by March 2019 and accordingly, assets amounting to $316 million and liabilities amounting to $50 million in respect of the disposal group have been reclassified as “held for sale". On reclassification, the disposal group has been measured at the lower of carrying amount and fair value less cost to sell and consequently, an impairment loss of $18 million in respect of Panaya has been recognized in the consolidated profit and loss for the quarter and year ended March 31, 2018.
The disposal group does not constitute a separate major component of the company and therefore has not been classified as discontinued operations.
Certain statements in this release, including those concerning our future growth prospects are forward-looking statements regarding those concerning the amount and timing of future dividends and other potential future payments to shareholders, and the intent to identify potential buyers for Skava and Panaya and the anticipated timing to complete such sales, are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited those relating to risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry, capital allocation policy and the ability and timing to identify buyers for Skava and Panaya and to successfully complete such sales. Additional risks that could cause actual results to differ materially are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2017. These filings are available at www.sec.gov. Please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.