Oracle Financial Services Software Limited

Transcription

1 CONDENSED CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 2010 (Amounts in thousands of Indian Rupees) September 30, 2010 March 31, 2010 SOURCES OF FUNDS Shareholders' funds Share capital 419, ,274 Share application money pending allotment - 8,068 Reserves and surplus Securities premium 9,566,726 9,524,546 General reserve 10,145,191 10,145,191 Foreign currency translation reserve (805,378) (804,309) Gain on dilution of equity investment in joint venture Profit and loss account 28,178,902 23,610,287 Deferred tax liability 83,415 32,911 47,589,207 42,936,875 APPLICATION OF FUNDS Fixed assets Gross block 12,024,444 12,000,159 Less: Accumulated depreciation and amortisation / impairment 3,786,969 3,636,871 Net book value 8,237,475 8,363,288 Capital work-in-progress and advances 1,525,423 1,304,106 9,762,898 9,667,394 Investments Current investments (quoted) 9,982 9,982 Deferred tax assets 451, ,726 Current assets, loans and advances Sundry debtors 5,555,472 6,782,391 Cash and bank balances 25,255,765 22,045,843 Other current assets 3,805,634 2,327,793 Loans and advances 8,723,375 7,724,538 43,340,246 38,880,565 Less: Current liabilities and provisions Current liabilities 4,794,294 4,990,369 Provisions 1,181,198 1,030,423 5,975,492 6,020,792 Net current assets 37,364,754 32,859,773 47,589,207 42,936,875 Notes attached herein form an integral part of the condensed balance sheet.

2 CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 2010 (Amounts in thousands of Indian Rupees, except share data) Six month period ended September 30, Revenue 13,939,433 13,890,347 Cost of revenue (6,632,562) (6,995,924) Gross profit 7,306,871 6,894,423 Operating expenses Selling and marketing expenses (1,256,894) (1,229,907) General and administrative expenses (1,382,539) (1,314,419) Depreciation and amortisation (201,901) (257,826) Operating profit 4,465,537 4,092,271 Non-operating income (expense) Interest income 510, ,102 Foreign exchange gain (loss), net 103,034 (240,428) Other income, net 12,032 5,922 Profit before provision for taxes 5,090,976 4,236,867 Provision for taxes Current tax (1,179,993) (805,153) MAT credit 654, ,842 Deferred tax 2,831 (67,190) Net profit for the period before share of minority interest 4,568,615 3,905,366 Share of minority interest - (1,867) Net profit for the period 4,568,615 3,903,499 Earnings per share of Rs 5/- each (in Rs) Basic Diluted Number of shares used in computing earnings per share Basic 83,871,526 83,769,790 Diluted 83,983,122 83,828,978 Notes attached herein form an integral part of the condensed profit and loss account.

3 Notes annexed to and forming part of the condensed accounts for the six month period ended September 30, 2010 (Amount in thousands of Indian Rupees) 1. Background and nature of operations ( OFSS or the Company ) was incorporated in India with limited liability on September 27, The Company along with its subsidiaries and associate is principally engaged in the business of providing information technology solutions and business process outsourcing services to the financial services industry worldwide. OFSS has a suite of banking products, which caters to the needs of corporate, retail, investment banking, treasury operations and data warehousing. is a subsidiary of Oracle Global (Mauritius) Limited ( Oracle ) with Oracle having 80.44% ownership interest in the Company as at September 30, The Company has following subsidiaries and associate (hereinafter collectively referred as the Group ): Companies Country of Incorporation Ownership Interest Relationship Direct holding Oracle Financial Services Software B.V. The Netherlands 100% Subsidiary Oracle Financial Services Software Pte. Ltd. Singapore 100% Subsidiary Oracle Financial Services Software America, Inc. United States of America 100% Subsidiary ISP Internet Mauritius Company Oracle (OFSS) Processing Services Limited Republic of Mauritius India 100% 100% Subsidiary Subsidiary Oracle (OFSS) ASP Private Limited India 100% Subsidiary Oracle Financial Services Software Chile Limitada Chile 100% Subsidiary Oracle Financial Services Software (Shanghai) Limited Republic of China 100% Subsidiary Login SA France 33% Associate Subsidiaries of Oracle Financial Services Software America, Inc. Oracle Financial Services Software, Inc. United States of America 100% Subsidiary i-flex solutions Inc. (Canada) Canada 100% Subsidiary Mantas Inc. United States of America 100% Subsidiary Subsidiaries of Mantas Inc. Mantas Limited United Kingdom 100% Subsidiary Sotas Inc. United States of America 100% Subsidiary Mantas Singapore Pte. Ltd. Singapore 100% Subsidiary Mantas India Private Limited India 100% Subsidiary Subsidiaries of i-flex solutions Inc. (Canada) Castek Inc. (dissolved on September 1, 2010) United States of America 100% Subsidiary Castek Software Factory Ltd. (dissolved on United States of America 100% Subsidiary September 1, 2010) Castek RBG Inc. (dissolved on September 1, 2010) United States of America 100% Subsidiary Subsidiary of Oracle Financial Services Software B.V. Oracle Financial Services Software SA Greece 100% Subsidiary Subsidiary of Oracle Financial Services Software Pte ltd. Oracle Financial Services Consulting Pte. Ltd. Singapore 100% Subsidiary Subsidiaries of ISP Internet Mauritius Company i-flex Processing Services Inc. United States of America 100% Subsidiary Oracle (OFSS) BPO Services Limited India 100% Subsidiary

4 Notes annexed to and forming part of the condensed accounts for the six month period ended September 30, 2010 (Amount in thousands of Indian Rupees) 2. Accounting policies The Group has followed the same accounting policies in preparing the interim financial statements as were followed for the year ended March 31, 2010 except as follows: With effect from April 1, 2010, the Group changed its policy of revenue recognition for fixed price contracts related to customization projects. Hitherto, such revenue was restricted to the lower of proportionate completed efforts and acceptance received from the customer for the milestone achieved. During the six month period ended September 30, 2010, revenue is recognized using proportionate completion method till contract reaches 90% completion. Balance revenue is recognized on receipt of customer acceptance. As a result of this change in policy, corresponding revenue and net profit of the Group and that of Products segment for the six month period ended September 30, 2010 is higher by Rs 320, During the three month period ended September 30, 2010, the Board of Directors approved a new Employees Stock Option Scheme titled ESOP 2010 Scheme ( the Scheme ) for issue of 618,000 options at an exercise price of Rs 2,050 per option to the eligible employees and directors of the Company and its subsidiaries. As per the Scheme, each of 20% of the total options granted will vest to the eligible employees and directors on completion of 12, 24, 36, 48 and 60 months and is subject to continued employment of the employee or director with the Company or its subsidiaries. Options have exercise period of 10 years. The Company uses the intrinsic value method of accounting for its employee share based compensation plan. As the exercise price of options granted equals the fair market value of the Company s equity share on the date of grant, no compensation expense is recorded by the Company. 4. Commitments and contingent liabilities Particulars September 30, 2010 March 31, 2010 Contracts remaining to be executed on capital account not provided for (net of advances) including capital commitment through issuance of letter of intents of Rs. 898,813 (March 31, 2010 Rs. 979,350) 1,731,167 1,957,451

5 5. SEGMENT INFORMATION a) Product licenses and related activities ('Products') and b) IT solutions and consulting services ('Services') c) Business Processing Services ('BPO-Services') Notes annexed to and forming part of the condensed accounts for the six month period ended September 30, 2010 (Amounts in thousands of Indian Rupees) The Group is organized by business segment and geographically. For management purposes the Group is primarily organised on a worldwide basis into three business segments: Six month period ended September 30, 2010 Particulars Products Services BPO - Services Corporate Eliminations Total Revenue External revenue 9,015,885 4,696, , ,939,433 Inter-segment revenue ,344 - (128,344) - Total revenue 9,015,885 4,696, ,717 - (128,344) 13,939,433 Cost of revenue (3,462,074) (3,045,768) (124,720) - - (6,632,562) Gross profit 5,553,811 1,650, ,997 - (128,344) 7,306,871 Selling and marketing expenses (1,059,769) (157,580) (39,545) - - (1,256,894) General and administrative expenses (486,249) (222,522) (75,210) (598,558) - (1,382,539) Depreciation and amortisation (77,729) (79,104) (9,125) (35,943) - (201,901) Inter segment expense - (128,344) ,344 - Operating profit 3,930,064 1,062, ,117 (634,501) - 4,465,537 Interest income 510,373 Foreign exchange gain, net 103,034 Other income, net 12,032 Profit before provision for taxes 5,090,976 Provision for taxes (522,361) Net profit for the period before share of minority interest 4,568,615 Share of minority interest - Net profit 4,568,615 Other information Capital expenditure by segment 20,316 37, ,134-76,955 Other non cash expenses 146,589 (1,964) 4, ,119 Segment assets 12,593,535 3,936, ,427 36,786,386-53,564,699 Segment liabilities 3,056, , ,125 1,927,390-6,058,907 Shareholders' funds ,505,792-47,505,792

6 Six month period ended September 30, 2009 Particulars Products Services BPO - Services Corporate Eliminations Total Revenue External revenue 8,854,725 4,660, , ,890,347 Inter-segment revenue ,276 - (95,276) - Total revenue 8,854,725 4,660, ,121 - (95,276) 13,890,347 Cost of revenue (3,846,819) (3,004,647) (144,458) - - (6,995,924) Gross profit 5,007,906 1,656, ,663 - (95,276) 6,894,423 Selling and marketing expenses (1,037,514) (152,359) (40,034) - - (1,229,907) General and administrative expenses (444,449) (276,712) (89,816) (503,442) - (1,314,419) Depreciation and amortization (122,777) (91,966) (11,905) (31,178) - (257,826) Inter segment expense - (95,276) ,276 - Operating profit 3,403,166 1,039, ,908 (534,620) - 4,092,271 Interest income 379,102 Foreign exchange loss, net (240,428) Other income, net 5,922 Profit before provision for taxes 4,236,867 Provision for taxes (331,501) Net profit for the period before share of minority interest 3,905,366 Share of minority interest (1,867) Net profit 3,903,499 Other information Capital expenditure by segment 19,724 11,076 6,658 65, ,605 Other non cash expenses 34,695 (23,858) ,837 Segment assets 10,762,932 4,877, ,183 29,001,388-44,901,340 Segment liabilities 3,116, , ,379 1,695,066-5,925,362 Shareholders' funds ,975,978-38,975,978

7 Notes annexed to and forming part of the condensed accounts for the six month period ended September 30, 2010 (Amounts in thousands of Indian Rupees) 6. Aggregate expenses Six month period ended September 30, Salaries and bonus 5,801,057 6,425,174 Staff welfare expenses 256, ,259 Contribution to provident and other funds 251, ,727 Travel related expenses (net of recoveries) 786, ,424 Professional fees 876, ,700 Application software 71,368 97,037 Communication expenses 139, ,812 Rent 445, ,860 Advertising expenses 14,728 32,024 Power 124, ,753 Insurance 9,740 10,805 Repairs and maintenance: Buildings and leasehold premises 11,481 18,771 Computer equipments 29,020 30,522 Others 32,308 26,516 Rates and taxes 22,497 42,997 Finance charge on leased assets 1,070 1,012 Provision for doubtful debts, net 149,079 (203,843) Bad debts ,680 Other expenses 250, ,020 9,271,995 9,540, Employee costs for the six month period ended September 30, 2010 are net of Rs. 238,418 pertaining to write back of bonus provision of earlier year, no longer required due to changes in compensation policy of the Company. General and administrative expenses for the six month period ended September 30, 2010 include provision of Rs. 122,067 in connection with a claim against the Company. Revenue from product licenses and related activities for the six month period ended September 30, 2009 include prior period revenue of Rs. 82,777. Prior period's figures have been reclassified, where necessary to conform with current period's presentation.

8 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 2010 (Amounts in thousands of Indian Rupees) Six month period ended September 30, Net cash provided by operating activities 2,976,167 3,963,440 Net cash (used in) investing activities (6,408,730) (1,551,351) Net cash provided by / (used in) financing activities 27,829 (1,260) Net (decrease) / increase in cash and cash equivalents (3,404,734) 2,410,829 Cash and cash equivalents at beginning of the period 6,854,470 4,912,371 Effect of exchange difference on cash and bank balances 177,642 (129,311) Cash and cash equivalents at end of the period 3,627,378 7,193,889 Cash and bank balances as per balance sheet * 25,255,765 19,501,410 Less: Bank deposits having maturity of more than 90 days (21,621,787) (12,290,750) Margin money deposit account (6,600) (16,771) Cash and cash equivalents at end of the period 3,627,378 7,193,889 * Includes amount kept in unclaimed dividend accounts of Rs. 1,535 (September 30, 2009 Rs. 1,003) not available for use by the Company.