i-flex Solutions Limited Consolidated Balance Sheets

Transcription

1 Consolidated Balance Sheets (Amounts in thousands, except share and per share data) March 31, September 30, Rs Rs $ ASSETS Current assets Cash and cash equivalents 2,082,098 7,566, ,672 Bank deposits 4,780,235 3,628,601 78,968 Accounts receivables, net of allowance of Rs 99,439 and Rs 159,101 5,223,217 6,321, ,579 Accounts receivables - related parties 34, Unbilled accounts receivables 295, ,639 8,958 Marketable securities, available for sale 10,000 9, Prepaid expenses 149, ,868 6,156 Other current assets 797,740 1,818,874 39,584 Total current assets 13,371,769 20,039, ,126 Goodwill 549, ,021 12,318 Intangible assets, net 343, ,088 6,270 Property and equipment, net 2,174,282 2,269,843 49,398 Investment in equity investees 15,616 19, Other investments 33,254 33, Rental deposits 1,206,553 1,623,440 35,330 Restricted cash and cash equivalents 1,883 3, Deferred tax assets 70,762 99,662 2,169 TOTAL ASSETS 17,766,919 24,942, ,828 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Accounts payable 139, ,586 3,451 Accrued employee costs 1,052,549 1,155,347 25,144 Deferred revenue 1,731,980 1,978,711 43,062 Income tax payable 68,647 88,945 1,936 Other current liabilities 988,174 1,203,351 26,188 Obligations under capital leases current 10,371 12, Total current liabilities 3,991,270 4,597, ,049 Deferred revenue 131,838 9, Obligations under capital leases non current 19,653 12, Deferred tax liabilities 1,649 1, Commitments and contingencies Shareholders' equity Equity shares, Rs 5 par value, Authorized: 100,000,000 shares Issued and outstanding, 76,288,367 and 80,983,235 shares, respectively 381, ,916 8,812 Equity shares subscribed 38,900 and 80,800 shares, respectively 10,309 22, Additional paid-in-capital 3,070,283 9,004, ,962 Retained earnings 10,695,295 11,477, ,782 Accumulated other comprehensive loss (74,920) (110,316) (2,401) Deferred stock based compensation - Employees Stock Purchase Scheme ( ESPS ) Trust (459,900) (477,214) (10,386) Total shareholders equity 13,622,509 20,321, ,248 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 17,766,919 24,942, ,828

2 Consolidated Statements of Income (Amounts in thousands, except per share data) Period ended September, Rs $ Revenue 6,293,667 9,084, ,713 Cost of revenue (excluding depreciation and amortization) (3,817,306) (5,340,128) (116,216) Gross profit 2,476,361 3,744,779 81,497 Operating expenses Selling and marketing expenses (987,378) (1,217,225) (26,490) General and administrative expenses (802,451) (1,099,007) (23,917) Depreciation and amortization (226,185) (326,071) (7,096) Operating income 460,347 1,102,476 23,994 Non-operating income (expense), net Interest income 146, ,339 4,316 Other income (expense), net 37, ,246 2,747 Income before income taxes 644,816 1,427,061 31,057 Provision for income taxes (181,619) (212,205) (4,618) Equity in net income (loss) of equity investees (554) 3, Net income 462,643 1,218,495 26,518 Earnings per share Basic Diluted

3 Consolidated Statements of Cash Flows (Amounts in thousands) Period ended September 30, Rs $ Cash flows from operating activities Net Income 1,218,495 26,518 Adjustments to reconcile net income to net cash provided by operating activities Amortization of stock based compensation 2, Depreciation and amortization 326,071 7,096 Provision for doubtful debts, net 63,408 1,380 Mark to Market of Marketable securities Deferred Compensation Cost 53,944 1,174 Deferred tax benefit expense (28,900) (629) Equity in net income loss of equity investee (3,639) (79) 1,632,653 35,531 Changes in operating assets and liabilities Accounts receivables and unbilled receivables (1,309,835) (28,506) Other current assets and other assets (1,514,988) (32,970) Current liabilities and other liabilities 493,236 10,734 Net cash provided by operating activities (698,934) (15,211) Cash flows from investing activities Purchase of property and equipment including capital work-in-progress (433,406) (9,432) Proceeds from sale of property and equipment 11, Proceeds from Bank deposits 4,425,864 96,319 Investment in Bank deposits (3,275,758) (71,290) Proceeds from sale of investment 20, Net cash used in investing activities 748,269 16,284 Cash flows from financing activities Shares subscribed but not issued 22, Issue of shares to Oracle Global (Mauritius) Limited 5,814, ,551 Issue of shares against ESOP scheme 56,151 1,222 Repayment of loan by the ESPS trust 4, Capital lease payments (4,801) (104) Dividend and tax thereon (436,350) (9,496) Net cash (used in) provided by financing activities 5,456, ,759 Net decrease in cash and cash equivalents during the period 5,506, ,832 Effect of exchange rate changes on cash and cash equivalents (21,702) (472) Cash and cash equivalents at the beginning of the period 2,082,098 45,312 Cash and cash equivalents at the end of the period 7,566, ,672 Supplemental Disclosure of Cash Flow Information Taxes paid 458,690 9,982 Accounts payable related to the purchase of property and equipment Assets acquired under capital leases 1,403 31

4 Consolidated Statements of Shareholders Equity Six month period ended September 30, 2006 (Amounts in thousands, except share data) Number Equity shares Par Value Shares subscribed but not issued Additional paidin-capital Retained earnings Accumulated other comprehensive loss Deferred Compensation cost in respect of ESPS Trust Indian rupees Total shareholders' equity Balance at April 1, ,879, ,398 6,546 2,516,636 8,933,133 (54,700) (478,208) 11,297,805 Options exercised , ,309 Shares issued for exercised options 1,408,717 7,044 (6,546) 396, ,128 Fair value of options granted to GE , ,825 Repayment of loan by the ESPS trust , ,500 Deferred stock based compensation - ESPS trust , (99,192) - Cash dividend (428,207) - - (428,207) Comprehensive income Net income ,190, ,190,369 Foreign currency translation (20,220) - (20,220) Comprehensive income ,170,149 Balance at March 31, ,288, ,442 10,309 3,070,283 10,695,295 (74,920) (459,900) 13,622,509 Options exercised , ,001 Shares issued 4,694,868 23,474 (10,309) 5,857, ,871,151 Repayment of loan by the ESPS trust ,925 4,925 Deferred stock based compensation - ESPS trust , (22,239) - Deferred stock based compensation - ESPS trust for the period , ,944 Cash dividend (436,350) - - (436,351) Comprehensive income Net income ,218, ,218,495 Foreign currency translation (35,396) - (35,396) Comprehensive income ,183,100 Balance at September 30, ,983, ,916 22,001 9,004,452 11,477,440 (110,316) (477,214) 20,321,279 US dollar Balance at September 30, ,983,235 8, , ,782 (2,401) (10,386) 442,248

5 Segmental Information The Group has adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, which requires reporting information about operating segments in annual financial statements. It has also established standards for related disclosures about products and services, and geographic areas. Operating segments are defined as components of an enterprise about which separate financial information is available. This information is reviewed and evaluated regularly by the management, in deciding how to allocate resources and in assessing the performance. The Group is organized by business segment. For the management purpose the Group is primarily organized on a worldwide basis into two business segments: a) Product licenses and related activities ( Products ); and b) IT solutions and consulting services ( Services ). c) Knowledge Processing Services ( KPO ) The segments are the basis on which the Group reports its primary segment information to the management. The Product license segment has banking products like the FLEXCUBE suite of products, Microbanker and Daybreak which cater to needs of corporate, retail and investment banking as well as treasury operations and data warehousing requirements. The related activities include enhancements, implementation and maintenance activities. Substantially all of the product revenue relate to FLEXCUBE product. IT solutions and consulting services comprise of bespoke software development, computer software solutions and related consulting services arising from such activities. This segment is further subdivided in the following sub-segments i.e. Business intelligence, Customer relationship management, Brokerage, e-commerce, Internet services and IT and business consulting. Expenses, which are not attributable to a business segment, are shown as unallocated expenses. Cost of revenues comprise of all direct cost towards employee cost, travel cost of software professionals, Professional fees to software vendors and application software cost used for internal use. These costs are direct costs for each segment. The Group allocates expenditure incurred on selling and marketing expenses in the ratio of the revenues between Products and Services, or in the ratio of the efforts spent in marketing products and services, as it is rational and appropriate. General and administrative costs are costs, which primarily comprise of rent, power, communication, repairs and maintenance for a particular segment. Additionally employee costs, rent, power and communication costs for support groups are allocated in the ratio of revenues between the two segments. All other segment revenue and expense are directly attributable to the segments.

6 Segmental Information (continued) Segment assets include all operating assets used by a segment and consist principally of receivables, deposits for premises and property and equipment, net of allowances and provisions. Segment liabilities primarily include deferred revenues, capital lease obligation, advances from customers, accrued employee cost and other current liabilities. While most such assets and liabilities can be directly attributed to individual business segments, the carrying amount of certain assets and liabilities used jointly by both segments is allocated to the segment on a reasonable basis. Assets and liabilities that cannot be allocated between the segments are shown as part of corporate assets. Period ended September 30, 2006 (Rupees in thousands) Particulars Products IT Solutions KPO - Services Corporate Total Revenue 4,588,478 4,302, ,592-9,084,907 Cost of revenue (2,061,095) (3,177,015) (102,018) (5,340,128) Gross profit 2,527,383 1,125,822 91,574-3,744,779 Selling and marketing expenses (1,001,447) (171,634) (44,144) - (1,217,225) General and administrative expenses (350,975) (201,512) (62,941) (483,579) (1,099,007) Depreciation and amortization (167,954) (108,436) (16,046) (33,635) (326,071) Income from operations 1,007, ,240 (31,557) (517,214) 1,102,476 Interest income 198,339 Other income 126,246 Income before provision for income taxes 1,427,061 Provision for income taxes (212,205) Equity in net income of affiliates 3,639 Net income 1,218,495

7 Period ended September 30, 2005 Particulars Products IT Solutions (Rupees in thousands) KPO - Services Corporate Total Revenue 2,864,018 3,333,829 95,820-6,293,667 Cost of revenue (1,388,301) (2,344,837) (84,168) - (3,817,306) Gross profit 1,475, ,992 11,652-2,476,361 Selling and marketing expenses (771,453) (182,370) (33,555) - (987,378) General and administrative expenses (150,012) (144,270) (61,548) (446,621) (802,451) Depreciation and amortization (83,964) (67,125) (16,046) (59,050) (226,185) Income from operations 470, ,227 (99,497) (505,671) 460,347 Interest income 146,813 Other income 37,656 Income before provision for income 644,816 taxes Provision for income taxes (181,619) Equity in net income (loss) of equity investees (554) Net income 462,643