Form 6-K Infosys Ltd For: Dec 31

We hereby furnish 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 ended December 31, 2014.

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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.

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On January 9, 2015, we announced our results of operations for the quarter ended December 31, 2014. We issued press releases announcing our results under International Financial Reporting Standards (“IFRS”) in U.S. dollars and Indian rupees, copies of which are attached to this Form 6-K as Exhibits 99.1 and 99.2, respectively.

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On January 9, 2015, we held a press conference to announce our results, which was followed by a question and answer session with those attending the press conference. The transcript of this press conference is attached to this Form 6-K as Exhibit 99.3.

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We have also made available to the public on our web site, www.infosys.com, a fact sheet that provides details on our profit and loss account summary for the nine months ended December 31, 2014 and 2013 (as per IFRS); revenue by geographical segment, service offering, project type, and industry classification; information regarding our client concentration; employee information and metrics; infrastructure information; and consolidated IT services information. We have attached this fact sheet to this Form 6-K as Exhibit 99.4.

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On January 9, 2015, we also held two teleconferences with investors and analysts to discuss our results. Transcripts of those two teleconferences are attached to this Form 6-K as Exhibits 99.5 and 99.6, respectively.

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Our Chief Executive Officer, Chief Financial Officer and Chief Operating Officer held a question and answer session with Bloomberg TV on January 9, 2015. The transcript of this question and answer session is attached to this Form 6-K as Exhibit 99.7.

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Our Chief Executive Officer, Chief Financial Officer and Chief Operating Officer held a common television address to business television channels on January 9, 2015, addressing analyst questions. The transcript of this address is attached to this Form 6-K as Exhibit 99.8.

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We placed advertisements in certain Indian newspapers concerning our results of operations for the quarter ended December 31, 2014, under IFRS. A copy of the form of this advertisement is attached to this Form 6-K as Exhibit 99.9.

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We have made available to the public on our web site, www.infosys.com, the following: Unaudited Condensed Financial Statements in compliance with IFRS; Audited Financial Statements in compliance with IFRS in Indian Rupees and the Auditors Report; Indian GAAP Standalone Balance Sheet, Standalone Statement of Profit and Loss, Standalone Cash Flow statement, Notes on Accounts and Auditors Report for the quarter and nine months ended December 31, 2014. We have attached these documents to this Form 6-K as Exhibits 99.10, 99.11 and 99.12 respectively.

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SIGNATURES

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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 organized.

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Infosys Limited

/s/ Dr. Vishal Sikka

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Date: January 14, 2015

Dr. Vishal Sikka

Chief Executive Officer

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INDEX TO EXHIBITS

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Exhibit No.	Description of Document
99.1	IFRS USD Press Release
99.2	IFRS INR Press Release
99.3	Transcript of January 9, 2015 press conference
99.4	Fact Sheet regarding Registrant's Profit and Loss Account Summary for the nine months ended December 31, 2014 and 2013 (as per IFRS); Revenue by Geographical Segment, Service Offering, Project Type, and Industry Classification; Information regarding Client Concentration; Employee Information and Metrics; Infrastructure Information; and Consolidated IT Services Information
99.5	Transcript of January 9, 2015 2:00 p.m IST Earnings Call
99.6	Transcript of January 9, 2015 7:00 p.m. IST Earnings Call
99.7	Transcript of January 9, 2015 Bloomberg question and answer session with Company's Officers
99.8	Transcript of January 9, 2015 Common TV address with Company's Officers
99.9	Form of Advertisement placed in Indian Newspapers
99.10	Unaudited Condensed Financial Statements in compliance with IFRS
99.11	Audited Financial Statements in compliance with IFRS in Indian Rupees and the Auditors Report
99.12	Indian GAAP Standalone Balance Sheet, Standalone Statement of Profit and Loss, Standalone Cash Flow statement, Notes on Accounts and Auditors Report for the quarter and nine months ended December 31, 2014

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Exhibit 99.1
IFRS USD Press Release

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Infosys (NYSE: INFY) Announces Results for the Quarter ended December 31, 2014

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Q3 constant currency revenue growth of 2.6% QoQ; 7.9% YoY

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Reported revenues at $ 2,218 million; growth of 0.8% QoQ; 5.6% YoY

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Operating margins at 26.7%; increase of 60 bps QoQ; 170 bps YoY

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Net profit at $ 522 million; growth of 2.2% QoQ; 12.7% YoY

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Volume growth of 4.2% QoQ (best in 3 years); 11.0% YoY

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FY 15 revenue guidance maintained 7%-9% at Sep 30^th exchange rates

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Bangalore, India – January 9, 2015

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Financial Highlights

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Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2014

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Quarter ended December 31, 2014

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Revenues were $ 2,218 million for the quarter ended December 31, 2014
QoQ growth was 2.6% in constant currency; 0.8% in reported terms;
YoY growth was 5.6%

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Net profit was $ 522 million for the quarter ended December 31, 2014
QoQ growth was 2.2%
YoY growth was 12.7%

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Earnings per share (EPS) was $ 0.46 for the quarter ended December 31, 2014
QoQ growth was 2.2%
YoY growth was 12.7%

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Liquid assets including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds were $ 5,532 million as on December 31, 2014 as compared to $ 5,444 million as on September 30, 2014.

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The company has expanded its Innovation Fund from the current $ 100 million to $ 500 million to support the creation of a global eco-system of strategic partners.

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Infosys has pledged `254 crore ($ 40 million) for FY 15 towards Corporate Social Responsibility (CSR) which is primarily being carried out through the Infosys Foundation, its philanthropic arm. The Infosys Foundation is engaged in several programs aimed at alleviating hunger, promoting education, computing literacy, improving health, assisting rural development, supporting arts and helping the destitute.

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Other Highlights

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Infosys and its subsidiaries added 59 clients (gross) during the quarter.

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Gross addition of 13,154 employees during the quarter.

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169,638 employees as on December 31, 2014 at Infosys and its subsidiaries.

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Highest utilization (excluding trainees) in 11 years

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Best volume growth in 3 years

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Made 100% variable payout for Q3

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“We are excited by several breakthrough results in Q3. Our “renew and new” strategy, is being received well by our clients and our ecosystem and we are already seeing its early adoption”, said Dr. Vishal Sikka, CEO and Managing Director. “Based on our strong performance, we are intensifying our efforts to deepen employee engagement, client ecosystem and strengthen our foundation of education as we build a next-generation services company that innovates for consistent profitable growth.”

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“During the quarter, we saw broad-based volume growth, increased utilization and strong client additions”, said U. B. Pravin Rao, Chief Operating Officer. “We have made 100% variable payout for Q3 and have seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters.”

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“Our sequential revenue growth in Q3 was adversely impacted to the extent of 1.8% due to USD appreciation against other major currencies”, said Rajiv Bansal, Chief Financial Officer. “We made required investments keeping in mind short-term priorities and long-term aspirations”

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Business Highlights

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Over this quarter, we have been actively planning and executing the elements required to realize our strategy of renewing the core and innovating into new frontiers, based on a culture of learning and creativity.

We are seeing strong traction and acceptance of our new strategy with clients, as we continue to invest in strategic partnerships, education and automation.

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Deutsche Bank selected Infosys as one of its strategic partners to help consolidate and renew its enterprise application landscape with the benefits of cloud re-platforming, mobile access, analytics and other operational efficiencies.

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A global software products company has chosen Infosys to help renew its core Finance, HR and Legal IT platforms. Infosys, through a multi-year partnership, will leverage its expertise in software development and engineering to co-innovate with the client.

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We have covered over 9,000 employees across the company with design thinking training; more than 400 of these are at senior levels. We have gone further and got our clients to embrace design thinking concepts. We currently have a pipeline of workshops for over 25 clients planned.

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A financial services company selected Infosys as its primary partner for technology services worldwide. Infosys will build a next-generation authorization platform, new mobile payment solutions and help transform the client’s billing systems. Infosys will also renew the client’s application maintenance, testing and production support infrastructure.

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Infosys continues to expand and enter into strategic partnerships to offer new solutions to clients:

Partnered with Tableau Software, a global leader in rapid-fire, easy-to-use business analytics software, to integrate their offerings into the Big Data solutions offered to clients

Entered into an engineering partnership with DreamWorks Animation, through which Infosys will deploy its global talent pool, available across Cloud, Big Data, Java and open source capabilities, to develop next-generation solutions based on DreamWorks technology

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We have partnered with Stanford Global School of Business to create a comprehensive executive education program with a suite of business management skills and courses in corporate innovation processes. This initiative will include 200 executives, each of whom will participate in a part-time, year-long program over three years.

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We have established an Artificial Intelligence (AI) Center of Excellence to enable our developers to infuse AI and machine learning into the development and authoring experience to increase productivity multifold. Till date, 1,000 developers have been trained on machine learning and we plan to train over 500 more every quarter.

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Innovation Fund

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The company has expanded its innovation fund from the current $ 100 million to $ 500 million to support the creation of a global eco-system of strategic partners. The capital will be used to invest into young companies world-wide innovating in areas such as AI, Automation, Internet of Things, Collaboration and Design.

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Awards and Recognition

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Infosys has won Hitachi’s ‘Technical Architect Team of the Year’ award for its exemplary work in architecting an infrastructure transformation solution for a leading US-based financial services provider.

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Infosys was named the partner of the year at a leading global retailer.

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Infosys has been named a ‘Leader’ in Gartner’s Magic Quadrant for Oracle Application Implementation Services, Worldwide for its completeness of vision and its ability to execute.

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Strengthening its leadership position further, Finacle was rated a ‘Leader’ in The Gartner’s Magic Quadrant for International Retail Core Banking 2014, for the eighth time in a row.�Infosys was positioned at the highest level, within the Leaders Quadrant, in ability to execute and furthest in completeness of vision.

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CEB TowerGroup rated Finacle e-Banking and trade finance solutions as ‘Best-in-Class’ solutions for customer experience, design and security, and enterprise support.

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Infosys was named a ‘Leader’ in The Forrester Wave™: BI Service Providers, Q4 2014. It received top scores for experience across multiple geographies and industries, strategic investments in business intelligence, and transparency.

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The American Council for Technology - Industry Advisory Council (ACT-IAC) selected Infosys Marketplace-as-a-Service platform as one of the top 30 finalists for its Igniting Innovation 2015 Awards.

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Infosys BPO won four Gold Awards at the TISS LeapVault Chief Learning Officers Awards 2014 in the categories Best Global L&D Team of the Year, Best Corporate University, Best Virtual Learning Program and Best Induction Training Program.

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Infosys McCamish won the Workflow Management Coalition (WfMC) Global Award for Excellence in Case Management for Insurance.

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Beyond Business

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Infosys has pledged 254 crore ($ 40 million) for FY 15 towards Corporate Social Responsibility (CSR) which is primarily being carried out through the Infosys Foundation, its philanthropic arm. Infosys and its subsidiaries donated $ 10 million and $ 31 million to Infosys Foundation and to Spark-IT for the quarter and nine-months ended December 31, 2014, respectively.

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The Infosys Foundation is engaged in several programs aimed at alleviating hunger, promoting education, improving health, assisting rural development, supporting arts and helping the destitute. Spark-IT is a three-month program launched by the Foundation, to enhance the skill levels of unemployed engineering graduates in the country. It has committed 20 crore ($ 3 million) for this program which will help train 3,000 graduates in the fiscal year 2015.

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During the quarter, Infosys donated $ 2 million to the Institute for Advanced Study (IAS) to create the Infosys Fund that will be used to support visiting scientists and scholars advance their research at the world-renowned institute in Princeton, New Jersey. Through this fund, two scholars across the Institute’s four Schools each year will receive support related to all aspects of the academic appointment and community life that are unique and fundamental aspects of the Institute for Advanced Study experience.

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This quarter, Infosys expanded its Corporate Social Responsibility (CSR) activities in the Americas through its philanthropic arm, the Infosys foundation, USA. It will focus on making quality computer science education widely and easily accessible across communities in the Americas. The company also announced the appointment of Mrs. Sudha Murty, Mrs. Vandana Sikka and Mr. Sandeep Dadlani as the trustees of Infosys Foundation, USA. The initial outlay for Infosys Foundation, USA, will be $ 5 million per annum.

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Management changes

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The company announced that Mr. Parvatheesam Kanchinadham, Chief Risk & Compliance Officer and Company�Secretary, will be leaving the company effective January 10, 2015.�Mr. Parvatheesam has been with the company for the past 12 years and�has contributed in multiple areas. The�company�thanks him for�his contribution.

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Mr. David Kennedy, General Counsel, will assume the role of Chief Compliance Officer. Mr. Manikantha A.G.S., will be the interim Company Secretary.

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About Infosys Ltd

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Infosys is a global leader in consulting, technology, outsourcing and next-generation services. We enable clients, in more than 50 countries, to stay a step ahead of emerging business trends and outperform the competition. We help them transform and thrive in a changing world by co-creating breakthrough solutions that combine strategic insights and execution excellence.

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Visit www.infosys.com to see how Infosys (NYSE: INFY), with US$ 8.25 billion in annual revenues and 165,000+ employees, is helping enterprises renew themselves while also creating new avenues to generate value.

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Safe Harbor

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Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2014 and our Forms 6- K for the quarters ended June 30, 2014 and September 30, 2014. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that the date of this press release is mentioned at the beginning of the release, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. 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.

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Contact

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Investor Relations

Sandeep Mahindroo

+91 80 3980 1018

[email protected]

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Media Relations

Sarah Vanita Gideon, India
+91 80 4156 3373

[email protected]

John Gallagher

Brunswick Group for Infosys, USA

+1 415 316 8060

[email protected]

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Infosys Limited and subsidiaries

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Unaudited Condensed Consolidated Interim Balance Sheets as of

(Dollars in millions except equity share data)

�	December 31, 2014	March 31, 2014
ASSETS	�	�
Current assets	�	�
Cash and cash equivalents	5,080	4,331
Available-for-sale financial assets	239	367
Investment in certificates of deposit	–	143
Trade receivables	1,437	1,394
Unbilled revenue	465	469
Prepayments and other current assets	438	440
Derivative financial instruments	5	36
Total current assets	7,664	7,180
Non-current assets	�	�
Property, plant and equipment	1,385	1,316
Goodwill	330	360
Intangible assets	45	57
Available-for-sale financial assets	214	208
Deferred income tax assets	99	110
Income tax assets	253	254
Other non-current assets	38	37
Total non-current assets	2,364	2,342
Total assets	10,028	9,522
LIABILITIES AND EQUITY	�	�
Current liabilities	�	�
Trade payables	28	29
Derivative Financial Instruments	5	–
Current income tax liabilities	421	365
Client deposits	4	6
Unearned revenue	139	110
Employee benefit obligations	165	159
Provisions	71	63
Other current liabilities	962	792
Total current liabilities	1,795	1,524
Non-current liabilities	�	�
Deferred income tax liabilities	8	11
Other non-current liabilities	10	54
Total liabilities	1,813	1,589
Equity	�	�
Share capital- 5 ($0.16) par value 1,200,000,000 (600,000,000) equity shares authorized, issued and outstanding 1,142,805,132 (571,402,566), net of 5,667,200 (2,833,600) treasury shares as of December 31, 2014 (March 31, 2014), respectively	109	64
Share premium	659	704
Retained earnings	9,592	8,892
Other components of equity	(2,145)	(1,727)
Total equity attributable to equity holders of the company	8,215	7,933
Non-controlling interests	–	–
Total equity	8,215	7,933
Total liabilities and equity	10,028	9,522

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Infosys Limited and subsidiaries

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Unaudited Condensed Consolidated Interim Statements of Comprehensive Income

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(Dollars in millions except share and per equity share data)

�	Three months ended December 31, 2014	Three months ended December 31, 2013	Nine months ended December 31, 2014	Nine months ended December 31, 2013
Revenues	2,218	2,100	6,552	6,157
Cost of sales	1,360	1,341	4,057	3,974
Gross profit	858	759	2,495	2,183
Operating expenses:	�	�	�	�
Selling and marketing expenses	124	104	362	327
Administrative expenses	142	129	430	411
Total operating expenses	266	233	792	738
Operating profit	592	526	1,703	1,445
Other income, net	136	117	419	301
Profit before income taxes	728	643	2,122	1,746
Income tax expense	206	180	607	482
Net profit	522	463	1,515	1,264
Other comprehensive income	�	�	�	�
Items that will not be reclassified to profit or loss:	�	�	�	�
Re-measurement of the net defined benefit liability/(asset)	(2)	4	(6)	10
Items that may be reclassified subsequently to profit or loss:	�	�	�	�
Fair value changes on available-for-sale financial asset	8	(10)	16	(14)
Exchange differences on translation of foreign operations	(169)	91	(428)	(844)
Total other comprehensive income, net of tax	(163)	85	(418)	(848)
Total comprehensive income	359	548	1,097	416
Profit attributable to:	�	�	�	�
Owners of the company	522	463	1,515	1,264
Non-controlling interests	–	–	–	–
�	522	463	1,515	1,264
Total comprehensive income attributable to:	�	�	�	�
Owners of the company	359	548	1,097	416
Non-controlling interests	–	–	–	–
�	359	548	1,097	416
Earnings per equity share	�	�	�	�
Basic ($)	0.46	0.41	1.33	1.11
Diluted ($)	0.46	0.41	1.33	1.11
Weighted average equity shares used in computing earnings per equity share	�	�	�	�
Basic	1,142,805,132	1,142,805,132	1,142,805,132	1,142,805,132
Diluted	1,142,827,396	1,142,805,132	1,142,815,423	1,142,805,132

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NOTE:

1.	The unaudited Condensed Consolidated interim Balance sheets and Condensed Consolidated interim Statements of Comprehensive Income for the three months and nine months ended December 31, 2014 have been taken on record at the Board meeting held on January 9, 2015
2.	A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com

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Exhibit 99.2
IFRS INR Press Release

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Infosys (NSE, BSE: INFY) Announces Results for the Quarter ended December 31, 2014

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Q3 revenues at 13,796 crore; growth of 3.4% QoQ; 5.9% YoY

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Constant currency revenue growth of 2.6% QoQ in US dollar terms

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Operating margins at 26.7%; increase of 60 bps QoQ; 170 bps YoY

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Net profit at 3,250 crore; growth of 5.0% QoQ; 13.0% YoY

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Volume growth of 4.2% QoQ (best in 3 years); 11.0% YoY

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FY 15 revenue guidance maintained 7%-9% at Sep 30^th exchange rates

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Bangalore, India – January 9, 2015

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Financial Highlights

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Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2014

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Quarter ended December 31, 2014

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Revenues were 13,796 crore for the quarter ended December 31, 2014
QoQ growth was 3.4%
YoY growth was 5.9%

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Net profit was 3,250 crore for the quarter ended December 31, 2014
QoQ growth was 5.0%
YoY growth was 13.0%

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Earnings per share (EPS) was 28.44 for the quarter ended December 31, 2014
QoQ growth was 5.0%
YoY growth was 13.0%

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Liquid assets including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds were

34,873 crore as on December 31, 2014 as compared to

33,616 crore as on September 30, 2014.

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The company has expanded its Innovation Fund from the current $ 100 million to $ 500 million to support the creation of a global eco-system of strategic partners.

�

Infosys has pledged

254 crore for FY 15, towards Corporate Social Responsibility (CSR) which is primarily being carried out through the Infosys Foundation, its philanthropic arm. The Infosys Foundation is engaged in several programs aimed at alleviating hunger, promoting education, computing literacy, improving health, assisting rural development, supporting arts and helping the destitute.

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Other Highlights

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Infosys and its subsidiaries added 59 clients (gross) during the quarter.

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Gross addition of 13,154 employees during the quarter.

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169,638 employees as on December 31, 2014 at Infosys and its subsidiaries.

�

Highest utilization (excluding trainees) in 11 years

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Best volume growth in 3 years

�

Made 100% variable payout for Q3

�

Business Highlights

�

We are seeing strong traction and acceptance of our new strategy with clients, as we continue to invest in strategic partnerships, education and automation.

�

Infosys continues to expand and enter into strategic partnerships to offer new solutions to clients:

–

Partnered with Tableau Software, a global leader in rapid-fire, easy-to-use business analytics software, to integrate their offerings into the Big Data solutions offered to clients

–

�

��

Innovation Fund

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Awards and Recognition

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Infosys was named the partner of the year at a leading global retailer.

�

Infosys has been named a ‘Leader’ in Gartner’s Magic Quadrant for Oracle Application Implementation Services, Worldwide for its completeness of vision and its ability to execute.

�

CEB TowerGroup rated Finacle e-Banking and trade finance solutions as ‘Best-in-Class’ solutions for customer experience, design and security, and enterprise support.

�

The American Council for Technology - Industry Advisory Council (ACT-IAC) selected Infosys Marketplace-as-a-Service platform as one of the top 30 finalists for its Igniting Innovation 2015 Awards.

�

Infosys McCamish won the Workflow Management Coalition (WfMC) Global Award for Excellence in Case Management for Insurance.

�

Beyond Business

�

Infosys has pledged 254 crore for FY 15 towards Corporate Social Responsibility (CSR) which is primarily being carried out through the Infosys Foundation, its philanthropic arm. Infosys and its subsidiaries donated 63 crore and 188 crore to Infosys Foundation and to Spark-IT for the quarter and nine-months ended December 31, 2014, respectively.

�

The Infosys Foundation is engaged in several programs aimed at alleviating hunger, promoting education, improving health, assisting rural development, supporting arts and helping the destitute. Spark-IT is a three-month program launched by the Foundation, to enhance the skill levels of unemployed engineering graduates in the country. It has committed 20 crore for this program which will help train 3,000 graduates in the fiscal year 2015.

�

During the quarter, Infosys donated 12 crore ($ 2 million) to the Institute for Advanced Study (IAS) to create the Infosys Fund that will be used to support visiting scientists and scholars advance their research at the world-renowned institute in Princeton, New Jersey. Through this fund, two scholars across the Institute’s four Schools each year will receive support related to all aspects of the academic appointment and community life that are unique and fundamental aspects of the Institute for Advanced Study experience.

�

Management changes

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Mr. David Kennedy, General Counsel, will assume the role of Chief Compliance Officer.� Mr. Manikantha A.G.S., will be the interim Company Secretary.

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About Infosys Ltd

�

Safe Harbor

�

Contact

�

Investor Relations

Sandeep Mahindroo

+91 80 3980 1018

[email protected]

�

Media Relations

Sarah Vanita Gideon, India
+91 80 4156 3373

[email protected]

John Gallagher

Brunswick Group for Infosys, USA

+1 415 316 8060

[email protected]

��

Infosys Limited and subsidiaries

�

Consolidated Balance Sheets as of

(In crore except share data)

�	December 31, 2014	March 31, 2014
ASSETS	�	�
Current assets	�	�
Cash and cash equivalents	32,023	25,950
Available-for-sale financial assets	1,509	2,197
Investment in Certificates of deposit	–	859
Trade receivables	9,061	8,351
Unbilled revenue	2,929	2,811
Prepayments and other current assets	2,761	2,636
Derivative financial instruments	29	215
Total current assets	48,312	43,019
Non-current assets	�	�
Property, plant and equipment	8,732	7,887
Goodwill	2,078	2,157
Intangible assets	282	342
Available-for-sale financial assets	1,350	1,252
Deferred income tax assets	626	656
Income tax assets	1,597	1,522
Other non-current assets	242	220
Total non-current assets	14,907	14,036
Total assets	63,219	57,055
LIABILITIES AND EQUITY	�	�
Current liabilities	�	�
Trade payables	175	173
Derivative financial instruments	31	–
Current income tax liabilities	2,654	2,187
Client deposits	22	40
Unearned revenue	876	660
Employee benefit obligations	1,043	954
Provisions	450	379
Other current liabilities	6,064	4,745
Total current liabilities	11,315	9,138
Non-current liabilities	�	�
Deferred income tax liabilities	54	64
Other non-current liabilities	62	323
Total liabilities	11,431	9,525
Equity	�	�
Share capital- 5 par value 120,00,00,000 (60,00,00,000) equity shares authorized, issued and outstanding 114,28,05,132 (57,14,02,566), net of 56,67,200 (28,33,600) treasury shares, as of December 31, 2014 (March��31, 2014), respectively	572	286
Share premium	2,805	3,090
Retained earnings	47,881	43,584
Other components of equity	530	570
Total equity attributable to equity holders of the company	51,788	47,530
Non-controlling interests	–	–
Total equity	51,788	47,530
Total liabilities and equity	63,219	57,055
�	�	�

�

Infosys Limited and subsidiaries

�

Consolidated Statements of Comprehensive Income

(In crore except share and per equity share data)

�	Three months ended December 31, 2014	Three months ended December 31, 2013	Nine months ended December 31, 2014	Nine months ended December 31, 2013
Revenues	13,796	13,026	39,908	37,258
Cost of sales	8,462	8,321	24,709	24,024
Gross profit	5,334	4,705	15,199	13,234
Operating expenses:	�	�	�	�
Selling and marketing expenses	770	644	2,205	1,985
Administrative expenses	875	802	2,611	2,489
Total operating expenses	1,645	1,446	4,816	4,474
Operating profit	3,689	3,259	10,383	8,760
Other income, net	840	731	2,546	1,818
Profit before income taxes	4,529	3,990	12,929	10,578
Income tax expense	1,279	1,115	3,697	2,922
Net profit	3,250	2,875	9,232	7,656
Other comprehensive income	�	�	�	�
Items that will not be reclassified to profit or loss:	�	�	�	�
Re-measurement of the net defined benefit liability/(asset)	(12)	23	(35)	61
Items that may be reclassified subsequently to profit or loss:	�	�	�	�
Fair value changes on available-for-sale financial asset	56	(56)	101	(77)
Exchange differences on translation of foreign operations	(30)	(11)	(106)	384
Total other comprehensive income, net of tax	14	(44)	(40)	368
Total comprehensive income	3,264	2,831	9,192	8,024
Profit attributable to:	�	�	�	�
Owners of the company��	3,250	2,875	9,232	7,656
Non-controlling interests	–	–	–	–
�	3,250	2,875	9,232	7,656
Total comprehensive income attributable to:	�	�	�	�
Owners of the company��	3,264	2,831	9,192	8,024
Non-controlling interests	–	–	–	–
�	3,264	2,831	9,192	8,024
Earnings per equity share	�	�	�	�
Basic ()	28.44	25.16	80.79	66.99
Diluted ()	28.44	25.16	80.79	66.99
Weighted average equity shares used in computing earnings per equity share	�	�	�	�
Basic	114,28,05,132	114,28,05,132	114,28,05,132	114,28,05,132
Diluted	114,28,27,396	114,28,05,132	114,28,15,423	114,28,05,132

��

NOTE:

1.	The audited Consolidated interim Balance sheets and Consolidated interim Statements of Comprehensive Income for the three months ended and nine months ended December 31, 2014 have been taken on record at the Board meeting held on January 9, 2015.
2.	A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com

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Exhibit 99.3

Press Conference

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press conference

Q3 FY 2015 RESULTS

January 9, 2015

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CORPORATE PARTICIPANTs

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Vishal Sikka

Chief Executive Officer & Managing Director

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Rajiv Bansal

Chief Financial Officer

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Pravin Rao

Chief Operating Officer

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PRESS

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Chandra

ET NOW

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Anya

Reuters News

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Poornima

CNBC

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Bipu

Pankaj

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Sujit John

Times of India

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Pravin Sirish

Bloomberg

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George Thomas

Deccan Herald

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Varun Sood

Economic Times

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Madhavan

Hindustan Times

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Moderator

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Good Evening, everyone and thank you for joining us today, as we announce the Infosys Q3 Results. We will start the press conference by an overview by Vishal on the company’s performance over the last quarter and then we will go into the Q&A. Vishal, if you could join us.

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Vishal Sikka

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Thank you, Sarah. We are all very excited about the results today and the growth that we have announced as well as additional dimensions in which we see our dual strategy of renewing our customers landscape and in parallel renewing our own existing services, as well as helping our clients go into areas, new frontiers, and in parallel building our own new capabilities, is starting to resonate. We are extremely excited about the results, in particular with regard to margins as well as utilization and volume growth which are all very satisfying. In the case of volume growth we have seen highest growth in the last three years of any quarter and if you just look at Q3 of the last five years, in the case of our utilization at 82.7%, we are at the highest utilization in the last eleven years, so we are quite excited about this.

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We have Pravin and Rajiv and I have agreed on a 100% variable bonus payout calculation for the teams in the company once again for the second time in a row.

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And one of the things that I am most excited about is that our Board has agreed to expand our startup investment fund from a $100 mn which is what it used to be, to $500 mn to invest in companies around the world. But what I am particularly excited about is to have a dedicated focus towards India. The reason for that is more and more we see that next-generation innovation that businesses are looking for are going to come from startup companies and we are looking forward to helping startups achieve scale. I read recently in one of the media reports that startups in India, in particular, struggle to achieve scale especially international scale. That is an area that we can really help them and therefore we are very excited about this fund. So with that Pravin and Rajiv, if you have any comments, otherwise we will open it up to Q&A.

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Rajiv Bansal

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We will open it up for questions.

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Chandra

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Chandra from ET NOW. Vishal, just trying to understand this $500 mn. Is it outside the M&A strategy, is it part of that, and also the people who will run it? I mean, you already have Deepak Padaki, you recently hired Ritika Suri. How you are really structuring this team, if you can give us some color on that? Thanks.

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Vishal Sikka

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That is a very good question, Chandra. The $500 mn is dedicated for investments, separate from M&A. This is just something that we will use to invest in partnerships in startups in investments and so forth. We are going to run it out of our Corporate Center. Ritika is presently doing business development and M&A and Deepak is doing strategy, and Deepak is also currently running the fund. But over the next few weeks, we will establish how we will operate this. Whether we create a separate venture fund itself that manages this within the company or we do it directly as investments from the company. We have to structure that. Now that the amount is $500 mn, it is necessary to set that up. I would expect that over the next week or possibly 3-4 weeks you should hear how we will set this up.

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Anya

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Hello, Dr. Sikka, Anya from Reuters News. I had a question about your push towards Artificial Intelligence and Machine Learning. One is, what is the biggest challenge you faced off late and if you have maybe an internal target or a guess estimate of how long it would take for you to see yourself as a big player in the Artificial Intelligence industry and maybe like how much of an investment you are going to see from that?

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Vishal Sikka

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As with all transformations, the biggest one is of course to ensure that the people have the right skills, that the people have the right capabilities. One of the things that we have done-Binod and his team, I do not know if Vinod is in the room, has established a new Artificial Intelligence class in Mysore as well as in our other Delivery Centers. This is a very nice state-of-the-art AI class. It is two weeks long. We have 1,000 people who have gone through this training in Machine Learning and AI related areas in the last quarter. We will expect to see more and more of this. We are seeing around 10 completely new AI-centric projects that we have started at clients, major projects involving complex AI techniques, neural networks to test the stresses on the airframe of an airline, probabilistic networks to determine fraud in retail companies, things of this nature. We have started that already. One way that we will measure this is obviously how many people are aware of technologies like this, another way that we will measure it is how many client projects we have going on. Our endeavor will be to touch certainly the top 100 clients as quickly as possible and over time get to every single client doing at least one of these innovative next-generation projects.

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Participant

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Okay, so you had mentioned that this time you had the highest volume growth in 3 years. So I was just wondering what would you attribute that to? That is my first question. And my second question is, you were talking about the pricing pressure in traditional services. Has it already played out?

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Vishal Sikka

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The volume growth I would only attribute to awesome performance by our amazing team. The pricing pressure, yes, we have seen that. We have seen a downward pricing pressure on what we call revenue productivity per employee that is billed. Rajiv and Pravin can talk more about that. Most of it is probably because of certain one-time kinds of things around this quarter and unique circumstances and so forth. I will make a general longer-term statement and my sense is that you will continue to see downward pressure on prices both in terms of shrinking overall budgets in those areas as well as pressure on the way that those services are delivered. That is simply because for the lack of a better phrase, we can refer to, “it is delivering yesterday’s services in yesterday’s ways”. I believe more and more that time for that has come to an end. This will of course, take a very long time to wind down, but nonetheless the long-term picture is very clear, the future is looking for more innovation, more productivity and more Automation. Clients are looking for that. Therefore, the more that we do in those directions, the better. I do see that there will be, over a longer term, continued downward pressure on these services. But I also see equally, that is why we have the emphasis on the one hand renewing all of our existing services with the power of Automation, with the power of AI and so on to improve productivity, to improve efficiency and in parallel doing these new kinds of things. I believe that productivity improvement in the existing services as well as complimenting them with new services will more than offset the effect of the downward price pressure. It is like the 4x6 pictures used to cost $5, and now they cost basically the price of a paper that they are printed on and there is no point in fighting the 4x6 picture for $5.

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Poornima Murali

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Hi, this is Poornima from CNBC. Why has the revenue per employee gone down? And also can you give us a breakup of margins in terms of volume, pricing, utilization? And when will the attrition rate come down to 13% to 15%, do you have a timeframe? Thank you.

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Vishal Sikka

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As I mentioned, I believe in constant currency terms, the pricing came down by about 1.7% and as reported basis 3.4%. That is related to the traditional ways of doing services as well as many other factors that were specific to Q3 and specific to the circumstances that many projects happen to be in and so forth. I would not focus so much on the particular amount of drop that we saw in that area because if you look at the other side of it, which is the overall revenue per employee in the company, which is a true measure of the improved productivity across the company, there we have gone up. That number which is the revenue per employee on total number of employees in the company, has gone from $52, 300 at the end of Q2 on a 12-month trailing basis ending at Q2, to $52,700 at the end of Q3 over the last 12-month trailing up to Q3. So, that number is going up. If we are successful in renewing ourselves with Automation and AI and complementing and amplifying people’s ability with better software, better innovation, better inventive things, better creativity, then you will see this number going up further. The breakdown on the margins, maybe Rajiv, you can answer this.

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Rajiv Bansal

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If I were to break down the margins, I have to take you through the entire profit and loss account which will be difficult to do. But just to explain the high level numbers, you know the rupee depreciated about 2.5% during the quarter which gave us a benefit of about 60 to 70 basis points and that is what you see flowing to the margins straightaway. A lot of the other operation improvements that we have seen in the quarter- utilization improvement, onsite mix coming down, higher volume growth, have been ploughed back into business to a large extent. During the quarter as we have mentioned earlier, we have rolled out about 5,000 promotions, we have given holiday bonus that Vishal was talking about; 100% payout to employees, we have done salary corrections for a few set of people in specialized skills and technologies. A lot of operational benefits are being ploughed back into business. As we have been stating, we are continuing on our journey of cost optimization, cost rationalization, we will continue to do that, we will continue to look at our cost very carefully. All the savings that we get out of that will be ploughed back into the business to accelerate our growth.

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Participant

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Hi, Vishal. Last quarter also your performance was quite satisfactory and this quarter of course it is extremely good. The one question that everybody would be wondering is, do you call this a turnaround and do you think that the company is now in its way to become a bellwether again and touch industry-leading growth?

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Vishal Sikka

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I think it is too early to say that. I would not quite jump to that conclusion as much as I would love to. I think it is way too early. If we just look at the motions of a services company, this would be a way too early. We have seen early signs however of the strategy taking effect, that is for sure. I gave many examples in the earnings call earlier, perhaps you can see the transcript of that. The several clients that we have worked with over this quarter have worked with us on both renewal of their services as well as offering new kinds of services in parallel. We have started more than 56 projects on our Infosys Information Platform which is our open source-based platform for Big Data and Analytics. We have done for design thinking alone, where we are simply doing design workshops with clients, we already have more than 25 of these design workshops going on. I mentioned already the Artificial Intelligence projects. So, there are lots of signs already of the strategy making its way into the business, but I think in terms of revenues, this will take some time for you to see.

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Participant

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Rajiv, I have a question for you. Why was the guidance given at exchange rate based on September 30^th and not December 31^st? Is this going to be the precedence that you will base it at the beginning of the year and then you will not be changing it according to the currency fluctuation?

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Vishal Sikka

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Maybe before, Rajiv, you answer it; maybe I being in the technologist here delve into this matter. The main thing is that we have seen tremendous currency fluctuation especially over the last few weeks, as all of you know. It impacts all different parts of the world where we do business in different ways and Rajiv can tell you the massive fluctuation that we have seen all around the world. So in Star Trek, Dr. McCoy used to tell Capt. Kirk that, “Damn it Jim, I am a doctor not a bricklayer.” I would be tempted to say, “Damn it Jim, I am a technology and services Company, not a currency speculator.” The reason for the guidance is simply we racked our brains around how to look at this. We know that there was tremendous interest in how the guidance was going to look. All what we know is that our plan has been to execute on a 7% to 9% performance based on what we said on the 10^th of October based on the number of September 30, so, that is what we are sticking to. Rajiv.

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Rajiv Bansal

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I think Vishal answered it all, there is nothing more to say. For the last 2 weeks I was working very hard in trying to forecast the currency for the next quarter and Vishal finally told me “We are in technology business and not in the business of forecasting currency, so, do not do it.” So, I did not do it. That is the reason that guidance is on September 30^th exchange rate. Having said that, you look at the currency fluctuation over the last quarter, it is about 7.5% movement in a quarter can really take all your calculation out of whack. Even if you look at in the last one week alone, we have seen currencies move by around 2%. In such a volatile currency environment, it is not prudent to forecast a guidance on a current exchange rate or what it is likely to be. We decided that we have given guidance as of October 10^th based on September 30^th exchange rate and it is best for us to continue with the guidance as of that date. Having said that, on your question on whether this is how it will continue in future. I think it will depend on how the currency markets are. If the currency markets stabilize, we do not have to take a future call on currency, then we may probably come back and give you a guidance in the current exchange rate.

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Bipu

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Hi, Vishal, Bipu here. Just one question based on the spending pattern of your clients. Where do you see your strategy of renew and new is resonating with them in a sense that you added some 59 clients during the quarter. How many of them really are being serviced from your renewal forecast or the new service you are offering? And second thing is because now we are in January when the clients usually finalize their budgets, what are the indications you are getting from the global clients? Are the budgets going to be more than the previous year or it is going to be flattish and which are the areas they are generally going to spend those?

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Vishal Sikka

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Bipu, my sense of the renew/new is, in the case of clients it applies in a very simple way. They have this dual priority, they have existing systems and processes that they want to improve and renew to bring more efficiency and so forth. Typically in the case of IT, this takes a form of re-platforming systems to run on the Cloud or new open-source technologies, instrumenting systems for mobile access and analytics and things of this nature. But our renewal is about taking our existing services that we have offered for the last many years, Business Process Outsourcing Services, Infrastructure Management, IVS which is the Verification or QA Service, Application Development, Product Engineering and Package Implementations; each one of these we can renew and we have already started to renew on the basis of automation. So for example in IMS, we can bring more and more automation into the way that we manage Infrastructure for our clients. In IVS, in verification, we can use more and more advanced technologies to improve the verification of system to automate more and more verification of systems. In BPO, automation can take many different forms of rule-based systems or other ways of automation around language recognition, image recognition, things of this nature that can simplify and automate more and more repetitive parts of processes instead of having people do these. So the renewal of our existing services will lead to better productivity, better efficiency, more revenue per employee and things of this nature and this is how we would categorize renew. New things are the ones that are not yet there today and there are new kinds of solutions to new kinds of problems whether it is Design Thinking and solutions based on Design Thinking that we develop in new ways or open source technologies for doing Big Data. These are things that we did not do before. Here we can also bring new economics to our clients. So it is a very tangible way to improve the things that we have always done as well as augment those with new kinds of things. What was your second, I think the second…

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Pravin Rao

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On the budget side, it varies by industries. In the Financial Services, we expect budgets in Americas to be flat to marginally down. We expect budget to be up in Europe. If you look at Manufacturing at the sector level, we expect the budgets to be flat but in Automotive and high-tech, we expect budgets to move up whereas in Aerospace we expect the budget to be down. Energy and Utilities as well as in Telecom, given all the sectoral challenges going in those two industries, we expect the budgets to be down. Life Sciences, budgets will be same or marginally up. It is a mixed bag when you look it across the industries and in many cases, I think the budgets are still not finalized. Even in the Retail world, they will start the exercise now post the holiday sales. Holiday sales have been good. With the fuel prices down, there may be some expectation of spend coming back to retailers which could potentially result in them starting the spending cycle but it is early days because they will start the budgeting cycle now. So it is a mixed bag right now what we are seeing.

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Participant

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Hi Dr. Sikka, back to AI, that is my favorite topic. I wanted to know what sectors are going to be big with your push to AI. Do you see Retail or Manufacturing doing well and very specifically what challenges are you facing in this push to AI (Artificial Intelligence) and Machine Learning?

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Vishal Sikka

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My sense is that the biggest challenge is to ensure that people have the capabilities and have the know-how to apply right AI (Artificial Intelligence). AI (Artificial Intelligence) is an umbrella of technologies of various different sorts and to bring those technologies to a right problem is something that requires a lot of skill and this is going to become a next hot skill in the industry. So generating in those capabilities, teaching those capabilities is a big thing. Second bottleneck that I would see is to find the right problems where this technology can be applied. There are already many areas where this can be applied. For complex problems which require complex pattern recognition and things like this, I mentioned earlier an example where we do, where we test the stresses on the frames of an aircraft under extreme conditions and for this, normal technology, modeling technology is not enough. You cannot build, the traditional way to build this used to be to build numerical or quantitative models of the behavior of the plane under different circumstances. Now the planes are so sophisticated and the conditions that they are subjected to, we recently heard about the crash of this plane in Indonesia. So the circumstances to model are too sophisticated to create quantitative known models out of and therefore you use techniques like Neural Networks to create more stochastic or approximate models of the functioning of a complex system like an airplane under stress. So we have done a new approach to do this.

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Another example is in the area of fraud detection for purchases in a Retail for a retailer. I mean, Retail as Pravin mentioned is under extreme pressure these days. Therefore operational efficiency in detecting fraud, in detecting opportunity whether it is to find likely customers or in protecting fraud from existing purchases is an extremely important area. More and more sophisticated techniques need to be used to detect fraud in Retail for example. We have built a system where we built a probabilistic network with different probabilities of various kinds of events and so forth for a large retailer to see if certain transactions are fraudulent or not. Again these technologies used to be more straight forward, rule-based, quantitatively modeled. Now they are becoming more and more approximate and so techniques like Bayesian Networks, Probabilistic Networks are necessary to do this. A totally different area is level 3 Helpdesk where typically people used to be there and this technology requires passing through lots of text, constructing possible answers for possible questions and this kind of a thing. So doing Helpdesk solutions, people are more exception managers but systems are answering the questions for people who are calling in. These kinds of things are necessary.

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One area that we are very excited about is in the Insurance industry. We have done some work to analyze text automatically to extract from text whether there is an opportunity. So for example, if there is a hurricane and there is damage to buildings, this can be created as leads to an Insurance company to call certain people who might be affected or if there was a birth in a family which is there in news stories, then you can call those people because they might need new kind of insurance and things like that. Automatic extraction of hundreds or thousands of new stories to detect insurance opportunities is another one of these areas. There are many such problems for which AI (Artificial Intelligence) techniques can be applied but it is still a very specialized kind of a skill to find these problems. We have to train our consultants to get into these kinds of problem finding where you do not want to unnecessarily bring a technology like this to something where a simpler solution might be a good one. So these are some of the challenges that we see.

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Madhavan

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I have a question on relatedness. This is Madhavan from Hindustan Times. The point I want to ask is given the industry benchmarking with the leaders like TCS, there has been a volume driven growth on that side with twice as much headcount whereas you have been emphasizing on Artificial Intelligence, Automation and Innovation. The real question is apart from strategy, is there an emerging business model divergence within the industry landscape of services. In terms of pricing, apart from pricing issues, does this startup fund $500 mn mean that scope for capital gains increases more than the revenue cliff? Could you throw some light on that please?

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Vishal Sikka

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Yes, that is a very good question. I think that you will see new business models emerging in our world. We already see in many cases pricing based on volumes, pricing based on outcomes and things like that. In my sense, it is too small to quantify as a meaningful part of the business. But we are seeing handful of projects which cover different ways of pricing, different ways of creating project value and so on. More and more projects are going away from the traditional time and materials towards these new kinds of outcomes based. So overtime you will see this increase. We will have more to say about this quantitatively in April. But right now all I can do is confirm your thinking that new business models of this nature will emerge. And yes in the case of startup fund, obviously one very important way that we will measure the success of that is the capital gain and how the fund itself performs. I have done this before in a different life. But in addition to performance of the fund itself from a capital perspective, we are also keen to help participate in the success of startups as they become bigger companies, to help bring them more scale, help bring them more business, to help bring them more engineering, discipline and rigor and so forth, as an extension and amplification of their engineering teams and things like that. It is more than about capital gains, but capital gains is a fundamental part of it.

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Participant

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________________

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Vishal Sikka

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No, we have been dealing with this idea that our education has been a very valued commodity and so people are constantly looking for Infosys trained employees and that has been going on for a while and when we train thousands of people on Artificial Intelligence, many of those will also be in demand and we just see that as a kind of a necessary consequence of our excellence in education and we will deal with that. But to create a thing that here are the ‘renew’ crowd and there is the ‘new’ crowd, this is not something that is right. All of us have to find this within ourselves. Each one of us can renew the things that we do and find new things to do in parallel to that. It is not that there is going to be the ‘renew’ crowd in Infosys and the ‘new’ crowd in Infosys and if when you ask a question and I say no-no this is not for me, you have to ask the ‘new’ guys. This is a wrong way to think about things.

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Pankaj

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Hi, it’s Pankaj from ET. Just a follow-up question, so you made some comments about ‘yesterday’s services’ and how it will take long time to wind down. Now the last time we heard strategic shift in Infosys, there was Infosys 3.0 and then kind of a post-mortem of that we heard things like that the company ignored the bread and butter kind of services. They were commoditized but still they were ignored and that’s one of the reasons for why it kind of went through that period of slump. So when you make these comments about yesterday services and most of your commentary is about some of these new next generation services, you can’t wish away these so called ‘yesterday services’. I mean does it mean you are going to completely give up on those kind of services? Are you confident enough that the pace at which you are getting new kind of services will make up for loss of traditional businesses or what you describe as ‘yesterday services’? So if you kind of explain and clarify that will really help.

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Vishal Sikka

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I don’t even remember how long ago Infosys 3.0 was. It seems like it was long-long time ago, so I don’t even want to go there. I think the important thing to keep in mind with the renew and new is that of course the entire revenue that we have, almost the entire revenue is coming from today’s services which we are in the process of renewing. It is not like we just keep doing the same thing and then all of a sudden, a completely new way of doing things starts to produce all the revenue. When I refer to it as ‘yesterday services’, it is simply referring to the fact that this way of thinking where we deliver this downward spiral that I have referred to of continuously lowering cost, continuously faster hiring and jamming people into projects faster and faster. This is the wrong way to do things. But it is still the renewal of BPO, it is still BPO, it is a BPO with more and more automation, BPO with more and more next-generation capabilities. We have been working with one client in dramatically reducing the number of touches involved in processing and invoice. So touch-free invoicing is the goal and in some clients we see that number as high as 88% touch-free, 90% touch-free. In other clients we see the number is much lower 40%, 45%. We bring more Automation into the processes to see how much of that can be automated. Is that still traditional bread and butter service? Of course it is. So to lose sight of the traditional services and their renewals would be absolutely foolish and this is not what the renew-new strategy is all about. It covers the sum total of what we do today as well as augmenting that with new things. Each capability what we offer today, no matter what it is each of the service lines that we have from IVS, IMS, Business Process Outsourcing, Consulting and Package Implementations, Application Development, Product Engineering; Application Maintenance, Package Implementations, everything is going to go through this renewal based on automation and innovation. And that is today’s bread and butter, it will be better than today’s bread and butter. Does that make sense?

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Sujit John

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Yes. This is a question on attrition, this is John from the Times of India. Over the quarter both you, Vishal and Mr. Rao said that month-on-month attrition has been coming down. Now yet for the quarter as a whole the attrition is up to 20.4 from 20.1, even on a LTM basis I don’t understand the match behind this. If you are saying month-on-month will come down how is the quarter-for-quarter as a whole it’s higher in the September quarter?

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Vishal Sikka

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Let me tell you the simple math on this. The number of people leaving the company month-over-month is coming down fast. The number of people leaving the company quarter-over-quarter is coming down fast. In Q1, 10,600 people left the company, in Q2 10,100 people left the company so that is 500 below. In Q3, 8,090 people left the company so that was almost 12% below. So there is a marked reduction in attrition. We are very happy with that and that is clearly an evidence that the things and interventions and initiatives that we have taken have worked, there is no doubt about that. But we are not satisfied with where the number is at. We don’t want 8,900 people to leave the company in a quarter. We want this number to come down further to the tune of about 12% to 14% when you measure this as an LTM-type number. We expect that we will get to that in the next couple to three quarters. But there is no doubt, the statement that you made that the attrition has gone up, this is absolutely not the case, the number of attrition has been coming down and coming down very significantly.

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Participant

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No, no, in that sense then you should tell also month-by-month how much you are adding. This is not a fair way of putting it that only month-by-month you are leaving and all. And secondly sir, can I ask why are they leaving? You have not explained why people are leaving.

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Rajiv Bansal

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I’ll answer the attrition question first and then I will answer your question.. You have to understand when we calculate on LTM basis, if the attrition is high four quarters back, even if the attrition is low in the last quarter the numbers would not show. So when you look at on an annualized basis which means the last quarter attrition multiplied by four, it has come down from 21.1% in the last quarter to 18.2%. So there is a drop of about 300 basis points in attrition on an annualized basis and that is very significant. As Vishal was saying we have seen almost about 1,700 people reduction in attrition over the last two quarters.

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As the question why people are leaving, as Vishal said in one of the interviews that we have the best training facility. We hire the best and the brightest people from the best engineering colleges and there is always a demand for our people among other competition. So you would always have people leave for better opportunities or the companies, for personal reasons, for higher education. If you ask me why do people leave, you would always see some level of people leave for some reasons but we would be more than comfortable if attrition comes down to 12% to 13% and that is what we are working towards.

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Participant

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Are you also implying that there is no involuntary attrition, there is no appraisal happening in the case of TCS?

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Pravin Rao

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There will always be involuntary attrition. At the end of training, we have some percentage of people who don’t make the cut, they leave. There are times when every year at the end of performance cycle, there are people who don’t measure up to expectations on a consistent basis. So there will always be some percentage of involuntary attrition but the significant percentage of attrition is voluntary. That’s why we say that it is still a continued source of worry for us and we have taken several measures. We will continue to take those measures and we are very hopeful over the next few quarters it should come down.

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Participant

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This also implies that the Infosys employees are very most sought after in the industry. As you said you are the best trained so you are training for the industry?

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Pravin Rao

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Yes.

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Participant

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Two things still I have not convinced maybe because you are also like me not so financial, fair enough. Relating, equating the revenue guidance, linking it to September exchange, whatever September-December doesn’t matter; it doesn’t actually gel with the kind of growth you had in quarter two and quarter three since you took over. You came in August, doesn’t matter. And then the way you have mentioned best in three years, best in five years and all the volume growth has gone up and all? Why is it not that the revenue guidance is maintained since April is the same unlike in the earlier past? And then you are liking it to the exchange which is non-operational. You mean to say your growth will be muted and utilized because of currency being so volatile, then what happens to your hedging, what happened to the hedging, you never say about the it, selectively you tell how much you hedge and what rate you hedge, no transparency in this because nobody is asking. Tell me in simple words, so that we can write for readers, don’t put anything technical. We don’t want knowledge from you, reasons we have to explain to readers or your investors.

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Rajiv Bansal

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Sir, now you have picked up an issue which is as complex as currency and forex and then you say explain in simple language. Let me try. The question was for Mr. Vishal

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Vishal Sikka

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Rajiv addressed the hedging part in the Earnings Call that we had earlier. You see in a services company, right now we have more than 20,000 projects that are underway and most of these projects started months ago. If you just look at the performance of the services company, vast majority of the revenues that we are seeing are coming in from work that was done in the past. Over the course of the quarter, we influenced that by bringing in additional new projects which start, by expanding the scope of existing projects, by finishing projects faster and so forth. There is a limited amount of change that you can make to the financial performance of the company in the short-term. This is just a basic operation of the business. On top of it, there are negative effects from currency which are huge in this case, there are negative effects from some projects and some industries slowing down or stopping that you then have to compensate for and get additional ones and things like that. That is generally the reason why the performance that was given at the beginning of the year 7%-9% has by and large stayed where it has. Am I happy with it? Of course not. I would love to see more. But it is quite amazing to see how the team has rallied and increased utilization to now 82.7%, how we have seen margins grow. And Q3 is traditionally the weakest of the four quarters because of the Christmas holidays and Thanks Giving holidays and all these furloughs in Manufacturing industry and things like this. Despite that, to see such a large volume growth, I mean in the last year’s Q3 you can see how much volume growth we had, that is quite an amazing achievement by our team and that is due to the performance of our team and what they have done in the quarter. Utilization, we have now taken to a level that is highest in 11 years. So that is a good performance. But as a result of this and then on top of this, we have the headwinds from currency which are quite strong in the performance that you see. So we are quite happy overall with the performance and of course our wish is to do much better.

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And then hedging, this is a key part of the financial operation of the company and this is something that Rajiv has a very capable group of people who focus exclusively on this and he can actually share more details on that.

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Participant

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I was busy filing the story I could not hear investors could not pay attention to. Couple of things is, how is the outlook for the economy and the industry, not particularly Infosys. You will coming out with your guidance for next year, I hope so, not like totally you give up like TCS. How is the outlook and then with the fuel prices coming down because the reason they give is there is a slack in global economy, supplies have not come down, whether it will have any kind of positive or what kind of impact?

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Vishal Sikka

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Sir I said earlier that I am a technology renovation services company, not a currency speculator. I would say the same to grand forecast on the state of the economy. I am perhaps the wrong person to ask that.

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Participant

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I am talking from an industry point of view.

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Vishal Sikka

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We can comment on the evolution of the IT and the software-oriented expenses in different industries. Perhaps Pravin you can talk about the Energy industry and what is happening in this regards.

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Pravin Rao

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In the Energy industry there is tremendous pressure because the oil price has come down below $50. At present, in some sense there is a state of panic. We have seen some postponement of projects and we have seen some request for rate cuts and so on. At least from an Energy industry perspective, at least for the near-term till they come to grapple with the new situation, we will continue to expect some volatility. But this also in some sense translates into an opportunity but that will take a period of time to convert this into an opportunity. But there is also relative effect. For instance today consumer spending is limited and a lot times a big percentage of consumer spending gets taken away by fuel and other things. If fuel price is coming down, one could potentially argue that people will have more disposable income to spend, that could mean uptick in Retail. These are early days, we are hopeful that this will probably translate into more spending in Retail, spending coming back to Retail which has been struggling for the last few quarters and so on. There are multiple forces at play. At times it is very difficult to play and the rate at which oil prices are dropping is also so dramatic. It is very difficult to see whether it hit the bottom, whether it will go down further, what the reactions are.

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Participant

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But why only you are singling out focusing or limiting it to consumer spending and all, it will have a cascading positive effect on all other verticals, because there will be more even with enterprises to spend.

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Vishal Sikka

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More broadly, my sense is that every industry is going through a very significant disruption and almost all businesses that I have talked to, in various ways are dealing with the impact of digital technology of computing of software. Therefore, I see a tremendous need for innovative things which impact the next generation strategies of business, I actually see a tremendous need for that. It is true as Pravin said that IT budgets for the known things that we have already budgeted so far and so forth, those are under tremendous pressure because in many ways those were designed for things that are continuing from the past and we have to deal with them in the ways that we have dealt with in the past. There is an ongoing pressure on those and we have to differentiate with better automation and things like that. But the need for new kinds of things, new ways to help businesses in new areas, this is something that I see a dramatic need for that in almost every business. Our endeavor is to while renewing our existing services quickly, build competencies in these new areas which are very strategic to the future of companies. That is why you will see us do more and more in these new areas going forward.

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Participant

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Hey, here is a follow-up question on involuntary attrition. We get to hear about large scale involuntary attrition in some of your peers in the industry so would like to know what is the situation with Infosys? Do you see involuntary attrition going up substantially?

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Vishal Sikka

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This is layoff right? Involuntary attrition, there are so many negatives in the air that it is making my head spin and not only because you are behind me. We are not going to do a layoff. We just rewarded our top 2% of the employees with iPhones and so forth. So no, there are no layoffs happening at Infosys.

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Bipu

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Dr. Sikka, Bipu here once again, just one follow-up question. Actually, I think in one of the earlier interactions here you said at least you are the one who doesn’t believe in enhancing utilization, productivity, you don’t want the employees to be stressed out. It is not healthy sign for any corporate. Now we are talking about utilization is 11 years high or something and I think I heard you in Analyst Call even it can be raised further so you have got aligned to the new scheme of things. May I know your comments sir?

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Pravin Rao

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No, increased utilization doesn’t mean that people are working long hours or anything, they are doing productive work right. I don’t think there is any disconnect between what he said and what it is

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Pravin Shirish

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Pravin Sirish here from Bloomberg. Just a quick question on the Energy industry which we are talking about, are you people sort of ready for a possible Black Swan kind of situation in the Energy industry with oil prices you mentioned continuing to go down. Supposing a couple of clients in the traditional oil field industry or clients are beginning to sort of have to look at liquidation or bankruptcy or whatever. Are you all possibly looking for situations where are you all prepared that if the bottom goes out of the Energy industry some say six clients or three clients or whatever x number, how prepared would you be to lose that revenue or whatever business you get from them?

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Vishal Sikka

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So far we don’t anticipate such a catastrophic scenario happening. We are not thinking about it in that regard. Our sense is I mean we have seen over the last decade many periods like this of volatility and things tend to stabilize over time. Beyond that I will say that the need for value to businesses, innovation and so on, whether it is on the cost side or on the opportunity revenue side is always there, whether the times are good or bad in various degrees. I am not thinking about these events as a catastrophic scenario. We are not planning it accordingly yet at least. We don’t see signs or any need to think of it in those terms yet.

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George Thomas

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I have a question, I am George Thomas from Deccan Herald. Looking at your revenues by geographical segment, we see that still it’s the same story with North America leading. So historically IT companies in India have spoken about trying to diversify but we don’t see that happening here. My question is, your focus on Artificial Intelligence, Automation, etc., won’t it be leading you further into the North American market only because historically in Europe, Automation, Artificial Intelligence, etc., happens or is made possible only when you lay off employees because of social security and other measures in Europe. America is more of a market which is attuned to that, so won’t it be a trap that way for you?

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Vishal Sikka

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See, I absolutely don’t subscribe to the notion that Artificial Intelligence comes at the expense of regular jobs. That is a short-sighted view of the opportunity with AI (Artificial Intelligence) and the effect of AI. There are two different parts to your question – one is around global diversification and growing in other areas and other one is around AI (Artificial Intelligence). So I have written about this a lot. I have worked on this of course better part of my adult life. I see AI (Artificial Intelligence) as helping amplify our humanity, as helping us become more productive. All technology has always aspired to help us do that, we are all right now sitting in the room surrounded by technology that did not exist and it ends up helping us do more, as Prof. Mashelkar said, “More with less for more”. AI (Artificial Intelligence) is just another one of these long cycle of technologies that improves human productivity and so forth. No matter how intelligent a software system gets, at least for the foreseeable future I don’t see a system that is going to replace human creativity, human ingenuity and human imagination. The need for us to be creative, for us to be innovative will continue to be there certainly for as far as I can see. Therefore I don’t see that as a factor in how systems and business needs evolve over the next horizon.

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With regard to the diversification, you are absolutely right. It happens to be the case that the market for our kind of services is the largest in the US but we are very excited about Europe. We are very excited about growth in countries including our own home country here in India. I believe that China can be at least 10x larger for Infosys than it is presently, Japan can be massively larger, Latin America and the Middle East can have tremendous growth. Yes, one of the things that you should expect to see from us in April is better articulation and a more precise articulation of how we see emergence of our business in different parts of the world. But for sure we are not trying to grow just in America and not in other parts of the world.

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Participant

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Also, one last thing on the India business, it has not been a big area of focus for you so far but you have been meeting the Minister on Digital India, now they have also announced GST. Are these opportunities that you see going forward, what’s your take?

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Vishal Sikka

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I mean for sure we see great opportunity within India itself and we have had some growth in last quarter in India and so on. There is of course need to serve the Indian companies. But the much bigger opportunity that I see in us is collectively serving the needs of the broader planet. I think that that is something that we can be very distinguished in, we can grow the software competency, the knowledge competency in India to a level where we can be the best at that and help change many of these industries by using the power of what is available in India. Growing within India to some degree, while it is important, but would miss the point. The point here is more to collect together the innovation capability in India and serve the broader rest of the world.

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Varun Sood

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Hi Vishal, Varun Sood from Economic Times, two questions here. We have heard about the AI (Artificial Intelligence), the next generation technologies and we understand the training is going on as of now. But how we look at some of your competitors most of them have also made IP-related products which they internally use and then they take it to their clients. You are not ready to talk about investments, that’s fair. But at least give us a timeframe say in two years, three years by when Infosys would have those IP-led products in place which it would be using internally as it automates some of their services or maybe it can even take it to its clients because some of your competitors have been using it and they have been working in this field for years now. The second question is, or do you want to answer this first?

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Pravin Rao

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We do have IP-related Automation. We are using it, we have deployed it fairly extensively in the BPO space, we have deployed it in Application Management space, in the Testing space. Now we have started looking at Package Implementations as well in terms of how we can use this automation to improve upgrades, quality of upgrades, speed-to-market and so on. So I think it is wrong to say we don’t have, we do have and we are extremely competitive and that’s one of the reasons why upfront when we bid we are able to bid very aggressively for many of these projects and commit to 30% - 40% upfront productivity improvement because we have this IP where we can do this Automation. Most of the things which we are doing and which probably competition is also doing is also more a rule-based Automation and we have very little application of Cognitive Intelligence and real Artificial Intelligence. That is where we are focusing on. I am sure many of our peers will also be focusing on this because this is where what the industry needs today and who ever does well and succeeds will definitely benefit in the medium to long-term.

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Varun Sood

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The second question is that as you are more focused on these next generation technologies and at the same time you are also focusing on bread and butter deals, last year the timeline what was given by the management was that it is going to take at least three years. Now some of your peers who focused on these next generation technologies seem to have missed the bus, they are in that perennial work-in-progress if you could say so. Won’t you concede that giving any timelines as of now is also risky but more than risky what do you think by when can we at least expect Infosys to have annual growth of say which meets the NASSCOM guidance of 13%? is it 2017, is it 2020, what is it?

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Vishal Sikka

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By the way, to add to what Pravin said to your previous question. We have a world class IP-based product in Finacle with services around it which we are very proud of and continues to be the best product in the industry in core banking. We had an amazing quarter, 5% quarter-on-quarter growth (constant currency) in Finacle in Q3 and EdgeVerve which is now starting to reach scale. I had an amazing session with the EdgeVerve team day before yesterday in their great new space here in Bangalore. We have a tremendous competency and interest in augmenting our humanity with intellectual property and software-based services and so forth.

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To your second question, I think our answer is very straight forward. We had started on a three year journey in the June of 2013, so that would be June of 2016. This is the timeline that we have been maintaining to get back to the industry-leading growth at a consistent high profitability that we have talked about and we look forward to sharing more quantitatively the impact of these various initiatives and what kind of a model we can create to give you better guidance on how to expect growth in different areas and how much will be ‘renew’ and how much ‘new’ and so forth in April.

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Exhibit 99.4

Fact Sheet

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Exhibit 99.5

Earnings Call 1

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earnings call 1

Q3 FY 2015 RESULTS

January 9, 2015

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CORPORATE PARTICIPANTs

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Vishal Sikka

Chief Executive Officer& Managing Director

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Pravin Rao

Chief Operating Officer

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Rajiv Bansal

Chief Financial Officer

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Sandeep Dadlani

Executive Vice President and Head – Retail, CPG and & Logistics

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Mohit Joshi

Executive Vice President and Head – Financial Services

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Rajesh Krishnamurthy

Executive Vice President and Head – Energy, Communications & Services

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ANALYSTS

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Anantha Narayanan

Credit Suisse

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Edward Caso

Wells Fargo

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Nitin Mohta

Macquarie

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Yogesh Agarwal

HSBC

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Mitali Ghosh

Bank of America

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Ankur Rudra

CLSA

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Pinku Pappan

Nomura

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Nitin Padmanabhan

Espirito Santo

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Sandeep Mathangi

IIFL

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Moderator

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Ladies and Gentlemen, Good Day, and Welcome to Infosys Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘*’ then ‘0’ on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Mahindroo. Thank you. And over to you sir.

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Sandeep Mahindroo

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Hello, everyone. Welcome to Infosys Earnings Call to Discuss Q3 15 Financial Results. I am Sandeep from the Investor Relations team. Let me start by wishing everyone a very Happy New Year. Joining us today on this call is CEO and MD – Dr. Vishal Sikka; COO – Mr. Pravin Rao; CFO – Mr. Rajiv Bansal, along with other members of the senior management team. We will start the call with some remarks on the strategy and performance of the company by Dr. Sikka, followed by comments by Mr. Pravin Rao and Mr. Rajiv Bansal. Subsequently, we will open up the call for questions. Before I hand it over to the management team, I would like to remind you that anything which we say which refers to our outlook for the future is a forward-looking statement which must be read in conjunction with the risks that the company faces. A full statement and explanation of these risks is available in our filings with the SEC which can be found on www.sec.gov. I would now like to pass it on to Dr. Vishal Sikka.

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Vishal Sikka

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Thank you, Sandeep. Good Afternoon, everyone and let me first convey my best wishes to all of you for a great year at the beginning of this New Year.

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I would like to begin with a few comments about our progress towards our strategy that I have previously outlined before I get into the details of our company’s performance for the quarter ending December 31, 2014. In October and then again in December of last year, I described broadly our strategy in the areas that we will focus on in the coming years to enable our clients to transform their businesses through software. Over the past 3 months in my meeting with more than 500 client executives and several industry analysts, I am very encouraged to see a strong resonance with the direction that we have embarked upon. The duality of renewing the core and at the same time innovating into new frontiers founded on a culture of learning, creativity and purpose is indeed true for pretty much every business today. It is a challenging duality, one that requires the talent and resources of our company to simultaneously address two distinct challenges, two distinct opportunities. Success and longevity comes from embracing these dual goals and treading a carefully chosen middle path, one which reaches towards the vision of the future without ignoring or disrupting the realities of today. For us at Infosys, it means that we offer our clients the best palette of services and solutions that suit their strategy. It also means fundamentally transforming ourselves while we help to transform each of our clients. Over the holidays and in other forums, I have articulated a message to each of our employees to live this strategy and to contribute to this strategy - every single employee in everything that they do, every project, every account, every service line and every unit of the company.

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Over the last several weeks we have been actively planning and executing on the elements required to realize this strategy and we are already witnessing progress along several fronts. Let me give you some examples:

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Deutsche Bank selected Infosys as one of its strategic partners to help consolidate and renew its enterprise application landscape with the benefits of Cloud re-platforming, mobile access, analytics on big data and other operational efficiencies.

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ICA Gruppen, Sweden’s leading retailer announced a major partnership with us to outsource its IT operations, both IT infrastructure and application-related areas and in addition to cost savings, this change is expected to provide better condition for business development projects within IT.

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Infosys has been a partner to Aimia, the leading loyalty program management company for many years. This partnership is a great example of renewing the core and innovating the new in parallel. Infosys helps Aimia renew their existing core systems for Nectar which is UK’s largest Loyalty program and intelligent shopper solutions and also helping build new innovative loyalty and consumer engagement products.

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A large global software products company has chosen Infosys to help renew their core finance, HR and legal IT platforms and Infosys through a multi-year partnership will leverage its expertise in software development and engineering to co-innovate with our client.

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A financial services company has selected Infosys as their primary partner for technology services worldwide. Infosys will build a next-generation authorization platform, new mobile payment solutions and help transform their billing systems. We will also renew their application maintenance, testing and production infrastructure.

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Discover Financial Services in the US has successfully migrated to Finacle core banking platform. Fully real time, this solution is helping Discover bring new products to market faster, automate compliance and deliver a great banking experience and enhance operational efficiencies. Our Finacle Payment Solution set a new global benchmark, processing over 75 million payments per hour or over 21,000 payments per second. This capability supersedes known inter-bank payment transaction volume required for banks of all sizes and is almost 5x the known volumes processed by the entire US banking system. We believe that with ‘inclusive banking’ becoming the future of banking, this kind of scalability is necessary in a core banking platform.

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Our Infosys Information Platform continues to gain traction. We have already built a pipeline of more than 56 projects across industries and geographies. A Europe-based banking and financial services company is implementing Infosys Information Platform to be able to scale the data infrastructure required for its regulatory reporting to handle a large volume of parallel data flows cost effectively.

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AssistEdge which is our offering for a contact center modernization can process more than 500 contact center transactions per second while a single node of the real-time expertise manager coordinates more than 1,200 concurrent users to resolve escalations and improve first call resolution. A leading telecom provider in the Asia Pacific region chose AssistEdge because it seamlessly layered over 9 disparate enterprise systems and unlocks the business outcomes within 7 weeks.

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TradeEdge which helps global companies grow profitably in emerging markets by extending their reach to billions of new customers, increases their revenues while reducing non-productive inventory. It connects thousands of distributors across more than 75 countries, processes 8 gigabytes of distributor data per hour, and is capable of processing more than 10,000 sales orders per hour. A large US-based global snack foods company has selected TradeEdge to standardize its sales process across the world to increase its market share.

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We established a new partnership with Tableau and with DreamWorks Animation.

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During this quarter we saw the best volume growth that we have seen in recent years. We saw volume growth of 4.2% in Q3. That is the best volume growth of any quarter in the last 3-years, and the best volume growth in Q3 over the last 5 years. But at the same time we saw a drop in the realized revenues per billed employee. I am confident that the measure that we are taking to renew our traditional services and introduce new ways of doing things is the only way to compensate the commoditization of traditional services and to be able to improve our productivity so that we can ‘Do more with less for more’. Towards our absolute revenue per employee, we saw marginal growth from $52,300 per employee for the 12-months lead at the end of Q2 to $52,700 per employee for the 12-months at the end of Q3.

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As we increase our momentum on building out an ecosystem of partners globally, we are very pleased to announce that we have expanded our innovation fund from the current US$100 mn to US$500 mn to support the creation of a global ecosystem of strategic partners. This capital will be used to invest into young companies, innovating in areas such as Artificial Intelligence, Automation, the Internet of Things, Sensors, Collaboration, and Design.

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Let me now talk about the foundation that we are setting for this change through learning and employee engagement. I am most excited about what we have done in the last quarter in terms of taking our learning and education capability to new levels. We will do much more of this in the coming months and years. Infosys is a learning and knowledge-driven company. As long as each and every one of us is focused on this, constantly adding to our own and to the collective pool of knowledge we can aim to do anything that the future requires. I have spoken at length about Design Thinking. I am very happy to report that to date we have covered more than 9000 employees across the company with Design Thinking training and over 400 senior most employees of Infosys have done workshops on Design Thinking at our facility in Mysore and other places. 70% of our front end consultants have already been trained and this is now made a part of our fresher training curriculum. We have gone further and got our clients to embrace Design Thinking concepts. We currently have a pipeline of workshops for more than 25 clients planned in Design Thinking. We believe this will enable a fundamental shift in the way that we approach to solve client problems and solving our own challenges through innovation by being proactive about finding problems in addition to being excellent at solving them.

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We are also working with the Stanford Graduate School of Business to design and deliver a customized strategic leadership development program for our company’s executives.

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In this last quarter, we have taken several steps to increase engagement with our employees in our mission to make Infosys a great place to work. We have set up dedicated teams that are working on and already implemented several changes to simplify policies while stressing accountability and values. Some of these include bring your own device. More than 14,000 employees have now availed of this facility, more flexible work from home and maternity leave policies, increased team engagement budgets and easier transfer policies across our development centers.

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We announced a 100% bonus payout in Q2 and in addition a special holiday bonus to high performing employees. For Q3, we have announced a 100% average bonus payout across the employee base. We want Infosys to be a place where each one of us can pursue a dream career. We have launched an expert track to create the right platform for specialized technologists to emerge, perform, and grow in technology-oriented careers. This in turn will translate into high impact value for our client.

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With all of this we are seeing a reduction in absolute monthly attrition numbers. For this quarter our absolute attrition was around 8,900. Our attrition in Q2 was approximately 10,100 people and in Q1 it was approximately 10,600 people. So we are seeing a steady drop in attrition month-over-month as well as quarter-over-quarter. Rajiv will have more to say on attrition when he speaks.

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We are happy to announce the expansion of the Infosys Foundation activities in the Americas through the Infosys Foundation USA focused on making quality computer science education widely and easily accessible. For Fiscal 2015, Infosys Foundation has pledged Rs. 254 Cr towards Corporate Social Responsibility initiatives in India. You would have also read about Infosys prize ceremony that we had recently in Kolkata earlier this week. We are proud to be associated with the Infosys Science Foundation that recognizes and encourages path-breaking research in the country.

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I am also delighted that Prof. John Etchemendy, the Provost of Stanford University has joined our Board of Directors this quarter. John is a great teacher and his vast knowhow of teaching technology and information will be of immense value to us in the road ahead.

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Let me talk briefly about the key highlights of Q3 Results. Our dollar revenue growth in Q3 was 2.6% in constant currency terms and 0.8% in as reported terms. Q3 is a seasonally soft quarter due to holidays, furloughs and the lower number of working days. I already mentioned the volume growth.

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And with that let me pass on to my colleague Pravin and come back for Q&A later on in the call. Thank you.

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Pravin Rao

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Thanks, Vishal. Hello, Everyone and Happy New Year. Let me cover the recent trends in various segments including our initial expectations on clients’ budgets for calendar year ’15.

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In Financial Services, we had over 3% sequential growth during the quarter. There are differing trends across regions with US banks not spending as aggressively as their European counterparts. Calendar year ’15 budgets in US banks are expected to be flat to marginally down while they are expected to grow in European banks. Budget finalization in some US banks is delayed since banks want to take a cautionary approach. There is also some divergence by size with many large banks under stress while mid-sized banks looking at initiatives to improve client experience and revenue growth. Regulatory pressures and large fines are keeping the overall spending in check. Spending is predominantly driven by new channels around Digital, Security and Analytics and continuing spend on compliance. Deal pipeline in the vertical is strong and decision cycles are stable.

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In Insurance, our growth in Q3 was driven by significant improvement in deal pipeline over the last 1 year. Property and Casualty insurers have increased their discretionary spend. SMAC technologies and customer experience are driving technology investments. Budgets are expected to grow low single digits, in line with the past. In Cards and Payments, digital technology, modernization and security are the top trends. Clients are also increasing spends on digital platforms that leverage social, mobile for marketing and customer services. Budgets are expected to be flat to moderately up.

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Retail and CPG continue to see challenges. Large retailers are growing at modest rates and facing competition from discounters. We are seeing long decision cycles and maniacal cost focus from clients, while spending is being driven by consolidation, shared services and cost takeout. Our growth during the quarter was impacted by ramp downs in a few clients, along with impact from delays in commencement of projects won earlier. Spending remains firm in Analytics, Multi-Channel Commerce, Digital Marketing and ERP rollouts. It is early for the next year budgets to get firmed up since retailers normally start their budgets post closure of the holiday season.

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Growth in Manufacturing was impacted during the quarter due to furloughs. Spending patterns are mixed - good in high-tech and auto, mixed in Industrial and low in Aerospace. There is an improvement in discretionary spend in North America towards customer experience, Digital, Analytics and ERP upgrades. Non-discretionary spend is likely to be flat. Clients are looking at smaller sized projects rather than large transformation programs. Overall deal pipeline has reduced over the last 1 year especially in Americas. We are seeing some slowness in decision cycles in Aerospace and Industrials as many clients are going through challenging times. At a sectoral level, budgets are expected to be flat over calendar year ’14 except for a modest increase in Automotive and reduction in Aerospace.

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Telecom sector continues to struggle with declining top line and bottom line which is squeezing spend and triggering consolidation. Clients are focused on operational efficiency and cost reduction. This is likely to pressure IT budgets in calendar year ’15 which coupled with significant M&A activity in the sector, may impact our growth potential next year. In Energy, due to the drop in oil prices, there is a significant shift towards cost savings and efficiency across the entire value chain. Capital projects as well as on-support projects are likely to see reduction in budgets across US and Europe. Decision cycles have also been severely impacted. On the positive side, large deal pipeline is healthy and several large outsourcing opportunities have emerged. We are trying to accelerate growth through proactive pitches, focus on new markets and bolstering our capabilities.

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Life Sciences sector is witnessing longer sales cycle due to significant M&A activities and impact of patent cliff. Americas is expected to perform better than Europe. There is pressure on non-discretionary spending with most deals in this area focused on cost reduction, technology rationalization and risk management. Overall pipeline has improved over the past 12-months. Clients have still not finalized their budgets, but early indication suggests tight budgets with increased spend in ERP implementations, Cloud, SaaS-based solutions, Analytics and Compliance.

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In Growth Markets, there is a reasonable growth momentum though reported growth is impacted due to decline in local currencies against the US dollar. We have seen increased emphasis in adopting digital strategies, ERP modulation and modernization. Deal pipeline and decision cycles remain steady. There is a budget pressure on clients especially on the discretionary spend.

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In BPO, client conversations are around transformation of the business processes with clients looking up to service providers to take end-to-end ownership of their processes. This is driving a shift from FTE-based pricing to outcome-based and fixed pricing. Though cost continues to drive outsourcing discussions around value and domain expertise are becoming predominant. Decision cycles continue to be longer for large deals. Though we see few large deals in the market, the overall pipeline remains stable.

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Finacle had a growth rebound during the quarter. We expect increased demand in calendar year 2015 especially in Channel Modernization, Analytics, Mobility, Compliance and Payments. Pipeline in Europe is looking healthier with number of banks trying to gain flexibility and economies of scale via infrastructure products and process standardization. Demand from Tier-II segment in the US is improving and some banks are having conversations around core banking replacement. However, due to discretionary profile of this spend, decision cycle remains protracted. Additionally, significant risks and cost of core banking overall remains a concern.

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With regards to Digital, it continues to be amongst the top three agenda for most clients. At this point of digital transformation, customers are focused on portfolio simplifications, Cloud apps, marketing operations and building online presence. Americas are expected to see stronger investment cycles as compared to Europe. Our pipeline is getting stronger and our deal conversion is steady. Though Digital is discretionary in nature, decision making is reasonably quick. We will continue to invest in acquiring consulting capabilities, improving talent through training and forging partnerships and innovation to create business solutions.

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I will now hand over to Rajiv to talk about the financial highlights.

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Rajiv Bansal

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Thank you, Pravin. Good Afternoon everyone.

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Our revenues for the quarter was at Rs.13,796 Cr which is sequential growth of 3.4%. In US dollar terms the revenues were at $2.218 bn which is sequential growth of 0.8%. During the quarter, major global currencies depreciated against the US dollar - Euro depreciated by 5.3%, Australian dollar by 7.5% and British Pound by 5.1%. This impacted our reported revenue growth by 1.8%, the constant currency revenue growth was at 2.6% for the quarter. Q3 is a traditionally weak quarter due to furloughs, holidays, and lower working days. Considering that 2.6% is a good growth for the quarter. As Pravin mentioned, Retail and CPG continues to see challenges and declined by 0.7% in constant currency during the quarter.

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Our gross margins for the quarter increased by 20 basis points to 38.7%. Operating margins for the quarter increased by 60 basis points to 26.7%, mainly on account of 2.5% depreciation of the rupee against the dollar which benefited the operating margins by 0.7%. This is the highest level of gross and operating margin in the last 10 quarters. Our net margins for the quarter was at 23.5%. EPS for the quarter is at Rs. 28.44. Utilization excluding trainees increased to 82.7%. This is the highest level of utilization that we have seen in the last 11-years in any quarter. Utilization including trainees is at 75.7%. Onsite mix for the quarter improved to 28.5%.

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As Vishal mentioned, we have taken multiple measures on attrition front. During the quarter we gave over 5,000 promotions. We have also done selective salary corrections for certain skills and technology streams. Our attrition on an annualized basis is 21.3% for the Group, down from 24.8% last quarter. Our attrition for Infosys Limited is 18.2% on an annualized basis compared to 21.1% last quarter.

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We contributed Rs.63 Cr during the quarter on CSR activities. We have outstanding hedges of $1.076 bn as of 31^st December 2014. Our effective tax rate for the quarter was at 28.2%. Our collections during the quarter were very good as a result of which the DSO has dropped to 61 days as compared to 63 days last quarter. The cash and cash equivalents including available-for-sale asset, certificate of deposits stands at Rs.34,873 Cr as of December 31, 2014.

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Let me now talk about our outlook for FY-’15. As I mentioned earlier, during the quarter all major global currencies depreciated significantly against the US dollar. Even in the last week we witnessed similar volatility in global currencies with Euro depreciating by another 2.5%, Australian dollar depreciating by another 0.9% and GBP by another 3.1%. We therefore believe that it is prudent not to take a view on the currencies and therefore are maintaining our US dollar guidance at 7% to 9% as of September 30^th rates, which was used for the guidance given on October 10, 2014.

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On the margin front, we expect our Q4 operating margins to be around 25% (plus/minus 1%). On the margin front, we believe consistently that we need to keep our margins at narrow band of 25% (plus/minus 1%). There are still opportunities for growth in the business to invest back in the business to accelerate our growth and we continue to do that.

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With that I will throw the floor open for questions.

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Moderator

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Thank you very much. Ladies and Gentlemen we will now begin the question-and-answer session. Our first question is from Anantha Narayan of Credit Suisse. Please go ahead.

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Anantha Narayanan

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Thank you and wish all of you a very Happy and Successful 2015. I had two questions, my first one was to Vishal. Vishal you have detailed some of your thoughts about increasing employee productivity over the next few years, can you give us a sense on what you think utilization levels could be maybe a couple of years from now based on some of the actions that you are taking? And my second question to Rajiv was can you just give us a bit more color on why the realizations dropped in this quarter?

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Vishal Sikka

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Hi Anantha, with regard to the utilization, we did an 82.7% this quarter which is the best that we have done in 11 years. We believe that there is still a little bit more room to take this up probably to 83-84%. So we are working on that with better efficiency, better tools, better technologies, and so forth. And for the other question I will let Rajiv answer that.

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Rajiv Bansal

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Yes, on the pricing front, though reported revenue realized per employee has dropped by 3.4% on blended basis, in constant currency there is a drop of 1.7%. As I mentioned in my opening remark, this is traditionally a week quarter with more holidays, furloughs, and lesser number of working days which just show up on the revenue realized per employee. So if you exclude that impact, there is a very marginal drop which could be quarterly variation because of business mix exchange, clients mix exchange and many-many other factors. And as we have been consistently seeing that you have to look at these numbers on a much broader base on annual basis instead of looking at quarter basis because quarter numbers would vary depending on many-many factors.

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Vishal Sikka

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At the same time I think on the revenue generated per billed employee, long-term we have to keep in view that the traditional services that we have had, will continue to face a downward pricing pressure. That is why it is our endeavor to renew the existing services that we offer through better use of Automation, Artificial Intelligence, better innovation and so forth and also to complement that with new capabilities and new services so that the overall revenue productivity improves, the overall reality, the vision of “Doing more with less for more” as Prof. Mashelkar used to say, can be brought to life.

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Anantha Narayanan

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Thank you Vishal and Rajiv and Happy New Year once again.

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Moderator

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Thank you. Next question is from Edward Caso of Wells Fargo. Please go ahead.

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Edward Caso

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Hi, good day, congratulations on your numbers. Just Rajiv a clarification on the guidance, here the 7% to 9%, should we view that as a constant currency guidance and then we should apply a foreign exchange impact to that so that the reported number range would be below that?

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Rajiv Bansal

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As I mentioned, because the cross-currencies we are seeing so much of volatility in the last three months and as I said even in the last three months we have seen these currencies being very volatile. So instead of we taking a view on the currency in the next quarter, we felt that it is better to keep our guidance at 7%-9% on September 30^th exchange rate which was what we gave on October 10^th. So what you need to do is you need to look at the currency movement between September 30^thrate to the realized rate for the Q3 and Q4 and that would be the impact on the top line.

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Vishal Sikka

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And one thing I would add to that Edward is that our reporting currency is the rupees. So at the end of the day the rupee reporting for revenue growth as well as margins is the primary thing and the others are derived from that. We don’t want to be in the business of speculating on the foreign currency and how that currency fluctuations will work and so forth. Therefore we are preserving our guidance that we gave back in October of 7% to 9% growth, as of the currency on the 30^th of September.

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Moderator

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Next question is from Nitin Mohta of Macquarie. Please go ahead.

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Nitin Mohta

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Thanks for the opportunity, I had two questions. Firstly, if I look at the annual guidance, the implied range for the fourth quarter appears to be quite broad, so just wanted to understand why have you decided not to narrow it down a bit, is the demand environment too fluid? And then I will ask the second one please.

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Rajiv Bansal

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No, we just decided to retain the guidance. We don’t want to keep revising our guidance as we go into the year. So we gave a guidance and we have maintained that guidance from April that we gave except for the cross-currency movements. And we believe it is right for the company to give a guidance and stick to the guidance instead of revising it quarter-after-quarter.

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Nitin Mohta

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Sure. And the second was on margin front, Rajiv you guys obviously had couple of tailwinds this quarter in terms of good utilization as well as INR depreciation benefit. So was just trying to understand, you obviously reiterated your target band but excluding those do you feel comfortable that in the interim when there is pressure on your commoditized business, we should be okay even without these tailwinds.

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Rajiv Bansal

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There are always positives and negatives in a quarter as you go along. You have to look at margins from a much bigger horizon than looking on a quarter-on-quarter basis. What I have been consistently seeing over the last couple of quarters is that we believe that this business can generate a 25% (+/-1%) operating margin. The margins would fluctuate on a quarter-on-quarter basis depending on the need to make investments because as you know though our growth rates have started picking up, we still have a long way to catch up to reach the industry growth rate. We have to invest back in the business to accelerate our growth. As and when the opportunity for investment comes up we are going to invest back irrespective of what the impact it is going to have on the margin. This quarter the rupee did help us and also the improvement in operational parameter that we saw during the quarter, but that’s the reason I was again going back to 25% (+/-1%) instead of sticking operating margin achievement of this quarter because I believe that we need to invest back in the business, invest in employees, invest in technology, invest in software and many-many other areas.

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Nitin Mohta

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Thanks and congrats for the good numbers.

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Moderator

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Thank you. Next question is from Yogesh Agarwal of HSBC. Please go ahead.

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Yogesh Agarwal

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Hi, just have couple of questions. Firstly, Pravin you mentioned that Retail is still quite weak particularly in US. Now with falling crude prices retailers are already talking about a bit of improvement in store sales. So in your all discussions is there a hope that through the year at least Retail demand may pick up some day?

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Sandeep Dadlani

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Hi, this is Sandeep – Head of Retail, CPG, and Logistics, Happy New Year to everybody. So you are right. Early readings from the holiday season in Retail especially in the Americas has been encouraging, 3.5% to 4% growth over last year is what they are saying. If you double-click on that, the physical stores that are actually showing decline of up to 8% same store sales compare to the previous year and then online sales which are picking up at 22% to 23%. So you are absolutely right, we see a hope that retailers are recovering but their spend is largely going to be focused on Digital disruption and new digital-led experiences. That is where you will see spend revive in Retail. As we ended the quarter as well, we could see deal momentum pick up in Retail, in traditional areas of Infrastructure outsourcing and in new areas of Digital disruption. So we are optimistic that these two trends will revive the demand situation in Retail.

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Yogesh Agarwal

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Okay, thanks. And I just have one question for Vishal. Vishal the whole industry and Infosys over the past 10 years, a lot has depended on maintaining the pyramid for the company to absorb the cost inflation and wage inflation every year. Now with growth coming largely from Digital and Agile Development, etc., you believe that the pyramid can be maintained or will the pyramid lose relevance and fresher hiring will have to come down because Agile Development would need much more senior people then maintaining the pyramid?

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Vishal Sikka

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I don’t think so. I had an opportunity to speak to 5,000 of the freshers who were taking Design Thinking class. I was astonished by their openness and by their ability to embrace new ideas and so forth. Of course the employees who are more senior while sometimes with age we become more rigid to new ideas, of course have the benefit of experience and knowhow and how to work in business and deliver additional value. I believe that a great combination of these two is going to continue to be necessary. Of course there is a natural evolution that happens in companies like ours where new people come in and there is a higher attrition than other industries in the world. So I believe that there is natural, healthy sort of a relationship that happens overtime and I don’t see that going through a structural change. I do see however, that the nature of the work that people do will transition more and more towards, on the one hand bringing more and more Automation and productivity and per employee productivity to the existing kind of services that we deliver and there will be more and more people who are delivering these new kinds of services.

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Yogesh Agarwal

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Just sorry, if I may ask just a quick one from Rajiv again. You were just referring to the previous question, the implied guidance for 4Q is (-1%) to 6%, it is not only big but quite a divergence on either side. So just subjectively based on deal pipelines, are things getting better versus 3Q and 2Q so that it just helps us track the progress?

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Rajiv Bansal

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I know you want me to give you the exact number that would help you model it but unfortunately all I can say is that we will be in the range that we have given and we have guidance at the beginning of the year and we want to stick to the guidance of 7% to 9%. It is just that the currencies have moved dramatically over the last quarter or so but we would keep the guidance of 7% to 9% as at September 30^th exchange rate.

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Yogesh Agarwal

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Sure sir, sure will take that. Thanks so much.

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Moderator

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Thank you. Our next question is from Mitali Ghosh of Bank of America. Please go ahead.

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Mitali Ghosh

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Yes, thanks and congratulations on a strong quarter. Could you please share with us the number and TCV of the large deal wins this quarter and overall how does the pipeline look compared to the previous quarter and last year similar time?

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Pravin Rao

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Hi Mitali, we had 3 large deal wins, total TCV of $213 mn. One in Europe, one in Americas and one in rest of the world. Our category of large deal is any deal greater than $50 mn. In addition to these three, we had several sizable deals where the TCV was just marginally below the threshold so we have not reported that in this. Overall, the deal pipeline is healthy and it is across the board. We are seeing pipeline across Applications Service, Maintenance, BPO, Infrastructure Modernization, Transformation and so on.

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Vishal Sikka

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Mitali, perhaps I can add to that. The demand reduction that we see is we have to look at this over a longer term as a structural change that is happening in the industry where the traditional kinds of services or perhaps what we can refer to as ‘yesterday services’ are under a tremendous price pressure. There is a much higher need for bringing more and more efficiency to that, more productivity to that and so forth. But at the same time there is no shortage of need or of demand that I see for innovation. Almost all industries around us including the ones that we have mentioned as being under pressure, are under a tremendous need to rethink their future around digital, around software, around computing technologies. For those kinds of innovation services and next generation kind of solutions, we in fact see a tremendous demand.

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Mitali Ghosh

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Sure, thanks. Also could you perhaps discuss what you are seeing in Europe. Accenture showed some strong growth in Europe, we were wondering whether there is any pick up in discretionary spend that’s being seen in Europe.

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Pravin Rao

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I will request Rajesh to respond to this.

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Rajesh Krishnamurthy

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The discretionary spend in Europe is also under pressure and this is fairly across all segments. If you look at Energy, if you look at Retail or in FS, clearly discretionary spend is under pressure.

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Pravin Rao

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Yes, I think I mean from a growth perspective, on a reported basis we degrew. But on a constant currency basis we saw growth. If we look at from a sector perspective we are seeing better traction in Financial Services in Europe as compared to Americas. In Retail, while in Q3 we had a flat growth, but on the back of couple of deal wins in the last week of this quarter we expect to see some growth momentum in Europe. Manufacturing, as compared to US, I think it is bit muted in Europe. Of course both Telecom and Energy I think globally both are challenged and the impact in Europe is similar to impact in US. So it is a mixed bag. We saw strong performances in Life Sciences this quarter but in the next quarter it may not sustain as we continue to see pressure in that space as well due to M&A and other activities.

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Mitali Ghosh

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Sure sir. Just as a follow-up, in the last few quarters, last 12 months or so Europe has probably been one of the fastest growing regions mainly due to market share gains. Is there something that you continue to expect going forward?

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Pravin Rao

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As I explained across sectors, I think the trends and the momentum is different because of what we are seeing. But by and large I think given all the challenges there is lot of pressure on cost. So at some point in time this has to translate into more off-shoring, more outsourcing and that’s what we have seen in at least Financial Services. But I think once the initial panic of oil price drop and other things settles down, we expect maybe in the couple of quarters this to translate into more off-shoring outsourcing from a cost cutting perspective. That could translate into better growth in Europe as well. So difficult to predict, but I think given the environment we can expect continued momentum there.

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Moderator

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Thank you. Our next question is from Ankur Rudra of CLSA. Please go ahead.

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Ankur Rudra

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Hey, thanks and congrats on a nice quarter in a challenging period. My first question is on discretionary spending. Pravin, you did highlight that you are seeing that was down in a few verticals like Retail, Energy and Telecom but you did see that coming back in certain others. If you could just clarify where you are seeing discretionary spending coming back versus where it is not?

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Pravin Rao

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We are seeing uptick in discretionary spending in Financial Services particularly in Europe, in Manufacturing in high-tech we see uptick in discretionary spending and Auto. In Telecom and Energy we are seeing pressure on both discretionary and nondiscretionary spend. In Insurance and Cards and Payment, again we are seeing uptick in discretionary spend particularly, continued investments in the areas of Analytics, Securities and so on. So it is a mixed bag but largely in Financial Services we are seeing uptick and in some sub-segments in Manufacturing we are seeing some uptick.

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Aukar Rudra

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Okay, if I could just take that point on Financial Services further, if I understand from your commentary where you said you were seeing increased focus on compliance and SMAC projects. But you also said that the large deal pipeline is strong. Can you highlight what is driving the large deal pipeline because typically your discretionary spending tends to be smaller projects?

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Pravin Rao

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In general, I think the large deal pipeline is driven by tremendous focus on cost. Across the board irrespective of how each industry our client is doing, there continues to be a focus on cost cutting and that translates into large deals opportunities for large Infrastructure Outsourcing, opportunities for Shared Services Deal and so on. But I will pass on to Mohit to talk specifically on what he is seeing in the Financial Services space.

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Mohit Joshi

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Thanks. To echo what Pravin said, I think in Financial Services, Digital is one area like in other sectors where we are seeing an upswing. Data is another huge area and that is one where we have been working with our clients on Big Data initiatives and it also ties into the investments that our clients are making in the regulatory and risk space because Data obviously is an integral element of it. So Digital and Data, I think are two areas where discretionary spends are still strong.

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Ankur Rudra

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Alright, thanks for that. Best of luck.

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Moderator

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Thank you. Next question is from Pinku Pappan of Nomura. Please go ahead.

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Pinku Pappan

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Thanks for taking my question. What is your outlook on the Consulting and System Integration space for the next year and could you divide that may be perhaps in US and Europe for the trends you are seeing?

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Pravin Rao

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I think given what we have embarked on in terms of trying to look at more of innovation and more of transformation and so on and even looking at what we are seeing across the industries where clients are really looking at transforming their own businesses, we continue to expect strong demand for Consulting and System Integration Services. We had a good year so far in that space and we expect that trend to continue in the next year as well.

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Vishal Sikka

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And perhaps I can add to that. On Consulting and on Package Systems-oriented work, we see the future again having this dual dimension of renew and new. On the existing best practices, on the existing systems and processes, we see the movement away from being specific to a particular package, that particular system towards becoming more process-oriented and more innovation-oriented. You can think of this as more or less transcending the package and thinking about the underlying process and the system and the landscape rather than a particular packaged application. Whereas on the new areas, we see Consulting taking more and more the form of Design Thinking where the best practices do not exist here, where people do not know what the right way to do something is. We see more and more adoption of techniques like Design Thinking to help us identify the areas of opportunity and to help us more crystallize the unique nature of innovation that we need to bring in and we believe that our Consulting offering and our Consulting teams are at an advantage given both of these dimensions of renewing the existing ways in which Consulting can be brought into system and processes as well as bringing new kinds of Consulting to life.

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Pinku Pappan

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Consulting and System Integration is up 4% if I look at it from a year-on-year perspective for the year ending December ‘14. So I am just trying to understand in your outlook for the next year do you expect it to more or less be in line with the company average or lead? In terms of the broad outlook what do you think the growth will be?

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Pravin Rao

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I think we have not yet looked at next year in detail. We are in the process of looking at it. But our expectation is at least looking at what we are seeing and as Vishal talked about renew and new and the opportunities, we expect the growth probably, at least at this stage in line with the company growth.

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Pinku Pappan

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Okay. Thanks and my last question would be on Application Development. It kind of took a sharp dive this quarter. Just wanted to understand if something specific there that we should read into or it is more of a function because if I look at it the same quarter last year, I think you still showed a growth. So I am just trying to understand is there any particular?

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Pravin Rao

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I do not think there is any secular trend there. By definition Application Development is by nature volatile because there are project stops, project gets completed and so on. So it is unlike application maintenance where there is annuity business. I do not think it is a secular trend. We will see increasing as Vishal also touched upon briefly, we will see increasing focus on Open Source and Application Development on some of the newer technologies. So shift from the traditional legacy technologies to new technologies. But other than that, we do not anticipate any dramatic change in Application Development as a percentage of our service revenues.

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Pinku Pappan

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Thank you so much.

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Moderator

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Thank you. Our next question is from Nitin Padmanabhan of Espirito Santo. Please go ahead.

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Nitin Padmanabhan

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Thanks for taking my question. I had a couple of questions on the Energy and Utility space. One was that there are a lot of global energy majors talking of budget cuts and from that perspective if we look at it, if you could just break it into both the Energy Upstream and the rest of the business which is the Utilities and the downstream. How do you see that panning out, that is one? The second is considering the budget cuts and what we see in the revenue profile today, this quarter there has been a sharp drop in revenues; however, in last quarter there was a 11% increase. So from this quarter’s perspective, is it more to do with some sort of project completions and the actual impact would be seen further going ahead?

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Pravin Rao

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I will request Rajesh to respond.

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Rajesh Krishnamurthy

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Clearly the oil price drop has created a sort of a panic in the Energy segment. We are already seeing pretty tough decisions being taken by the operators and oilfield services companies because projects are getting delayed, investment in upstream is at a standstill. Projects which were initially supposed to be kicked off have been stalled and put on hold, in some cases permanently. I think given the situation where the Brent crude is now below $50 and they could potentially even go down to $40 is what some forecast say, this is going to be a trend and therefore the focus is going to be a lot on cost takeout. While predominantly this is clearly an upstream impact, we do see that some of this will also go to midstream and downstream related areas. Utilities are in a different situation. I think Utilities in the US are still going to continue investing in modernization, in improving the customer experience, etc. In European context because of the uncertainties you get regarding the gas supply, we could see some spike in the cost of production and we could see some operators having to take some tough calls and we also have the regulation related situation in Germany where because of the nuclear power and some clients are going through a separation process. So there is some uncertainty there but I still believe that the Utilities segment could still grow quite well given that there will be need to invest in modernization and so on. The specific question about what happened in Q2 and Q3. Q2 we had a very good quarter and we did had some exceptional one-time revenue which we accrued in the quarter. We did not have the benefit of that in Q3. If you take away the effect of the one-time revenue, we still grew about 2.5% on constant currency terms. So it has been a reasonable quarter and I think the trend for Q4 also is moderate growth.

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Nitin Padmanabhan

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Sure, just one more if I could follow on, how have these upstream utility companies been reacting in terms of IT Services spend perspective? Are they asking for price cuts or are they doing any budget cuts? Are they making those decisions right now or it could be a little longer?

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Rajesh Krishnamurthy

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Yes, some of our large clients are facing budget cuts of their own and clearly we are also facing that. We are already in negotiations with a few of our clients where we will be required to provide some discounts. We are working with our clients to see how we can work with them to help meet their budgetary cuts and also look at what other optimizations we can do to lower the impact for the clients and for us.

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Nitin Padmanabhan

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Would it be possible to give the proportion of revenues that we derive from upstream oil and gas companies?

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Rajesh Krishnamurthy

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I do not think I have that information at this point of time.

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Vishal Sikka

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No, we do not break that down. Traditionally, when you look at specific types of solutions you can make that distinction, but for the general kind of services that we provide to Energy companies, at least we do not make that distinction. I do not believe that people in general make that distinction either.

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Nitin Padmanabhan

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Sure, absolutely. All the best.

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Moderator

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Thank you. Our next question is from Sandeep Muthangi of IIFL. Please go ahead.

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Sandeep Muthangi

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Hi, thanks for taking my question. I have two questions. The first question is clarification on the pricing commentary that you gave earlier. Historically this quarter the furloughs, the impact has been on the volumes. Even last year when the volume growth was 0.2%, you were pretty categorical in saying that the furloughs impacted the volume. But this time around you are saying there was an impact on pricing and so because of that if you exclude that, the pricing pressure is not that severe. So I just wanted to check if there is any change in the way you are reporting these metrics or is there any other reason?

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Rajiv Bansal

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There is no change in the way we report the metrics. This time again, when we reported a 4.2% volume increase, that has got impacted by furloughs and this is after the impact of furloughs that we are reporting 4.2% increase in volumes. At the same time, the impact on the currency which has impacted the realized revenue per employee, it is 1.7% down on a constant currency. As you would also know the number of working days in Q3 are lesser than number of days in Q2. When we report numbers of realized revenue per month, the number of working days does impact the realized revenues because of the number of working days involved in a month. So if you consider all these factors, yes there has been a decline. I am not saying there is no decline, there is a decline in the realized revenue but it is not as significant as it shows up on the numbers. As Vishal also mentioned that we are seeing pricing pressure on commoditized business. Though we are not seeing clients asking for rate cuts but we are seeing on fixed price engagements, more competition, more aggressive pricing and we would expect that more and more parts of the business will get commoditized and that is the reason this whole new and renew strategy. We need to renew our existing services and complement them with all the new technology and new services which will come at a higher price points.

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Sandeep Muthangi

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Right. Fair enough. Thanks for that. My second question is on the key accounts. So for the past 5-6 quarters the growth in the top 10 accounts has been pretty lackluster. I wanted to check if you know this is skewed because of any client specific issues with one or two accounts or because of say Infosys having a fairly high market share or wallet share within these accounts that is making incremental wallet share very difficult.

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Rajiv Bansal

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Again if we look at the client metrics on the quarterly basis you should not read too much of it in on quarterly basis. But having said that when you have a client which is giving you $200-$300 mn of revenue annual basis, growing that account at the same pace always becomes an issue unless you are able to get into newer technologies, newer lines of growth and many other things. Also the large accounts have got impacted. Large accounts we are talking about has got impacted because of holidays and client shutdowns and furloughs. So you should not read too much into quarter-to-quarter numbers. I think it will be better to look at on an annualized basis how these numbers stack up.

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Sandeep Muthangi

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Yeah, I know Rajiv. I am not looking at quarter-on-quarter numbers at all. I am just comparing this year 9-month average versus last year 9-month average and the top 10 accounts have been on average contributing to $490-$495 mn and this is also much below say what the industry leaders’ reports. So I just wanted some clarity on whether these trends will continue in the future because of the high wallet share or these are just some this year’s issue because may be some client has budget problem or something like that?

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Rajiv Bansal

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If you look at some of the reasons why we started seeing our growth rate come down, was over dependence on large clients contributing to our growth and it is line with our strategy of adding more clients. We had 59 client additions during the quarter. They are broad-basing our growth in terms of verticals, geographies, technologies, service offerings. So I think it is a good sign. When your revenue share from the top client starts coming down, it means that you will be having more broad-based growth, you are able to penetrate more clients, and you are adding more clients. If you look at this data point in addition to all other data points that we published in terms of client addition, the growth in by segment, by vertical, I think it is in line with the strategy of having more broad-based growth, more penetrated growth across multiple segments.

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Moderator

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Thank you. Ladies and Gentlemen, that was our last question. I now hand the floor back to Mr. Sandeep Mahindroo for closing comments.

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Sandeep Mahindroo

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Thanks everyone for joining us on this call. We look forward to talking to you again. Have a good day.

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Moderator

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Thank you. On behalf of Infosys that concludes this conference. Thank you for joining us and you may now disconnect your lines.

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Exhibit 99.6

Earnings Call 2

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earnings call-2

Q3 FY 2015 RESULTS

January 9, 2015

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CORPORATE PARTICIPANTs

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Vishal Sikka

Chief Executive Officer& Managing Director

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Pravin Rao

Chief Operating Officer

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Rajiv Bansal

Chief Financial Officer

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Mohit Joshi

Executive Vice President and Head – Financial Services

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Ravi Kumar S.

Executive Vice President and Head – Insurance, Cards and Payments

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Michael Reh

Global Head – Finacle

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ANALYSTS

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Moshe Katri

Cowen

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Joseph Foresi

Janney Montgomery Scott

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Keith Bachman

Bank of Montreal

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James Freeman

SIG

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Ravi Menon

Elara Securities

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Edward Caso

Wells Fargo

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Meyran

William Blair

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Rishi Jhunjhunwala

Goldman Sachs

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Moderator

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Ladies and Gentlemen, Good day and Welcome to Infosys Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘*’ then ‘0’ on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Sandeep Mahindroo. Thank you and over to you.

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Sandeep Mahindroo

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Thanks, Inba. Hello, everyone, and Welcome to Infosys Call to discuss Q3’15 Financial Results. I am Sandeep from the Investor Relations team in Bangalore. Let me start by wishing everyone a Very Happy New Year. Joining us today on this call is CEO and MD – Dr. Vishal Sikka; COO – Mr. Pravin Rao; Mr. CFO – Rajiv Bansal, along with other members of the senior management team. We will start the call with some remarks on the strategy and performance of the company by Dr Sikka, followed by comments by Mr. Pravin Rao and Mr. Rajiv Bansal, subsequently, we will open up the call for questions.

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Before I hand over to the management team I would like to remind you that anything that we say which refers to our outlook for the future is a forward-looking statement which must be read in conjunction with the risk that the company faces. A full statement and explanation of these risks is available in our filings with the SEC which can be found on www.sec.gov.

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I would now like to pass it on to Dr. Vishal Sikka.

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Vishal Sikka

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Thank you, Sandeep. Good Morning and Good Evening. And let me be the first to convey my best wishes to all of you at the beginning of this New Year. I would like to begin with a few comments about our progress towards our strategy that I have previously outlined before I get into some details of our company’s performance for the quarter ending December 31, 2014.

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In October and then again in December of last year, I described broadly our strategy and the areas that we will focus on in the coming years to enable our clients to transform their businesses through software. Over these past 3 months, in my meetings with more than 500 client executives and several industry analysts, I am very encouraged to see strong resonance with the direction that we have embarked upon. The duality of renewing the core systems and processes, and at the same time, innovating into new frontiers, founded on a culture of learning, creativity and purpose, is indeed true for pretty much every business today. It is a challenging duality, one that requires the talent and resources of our company to simultaneously address two distinct challenges, two distinct opportunities. Success and longevity comes from embracing these dual goals and threading a carefully chosen middle path, one which reaches towards the vision of the future without disrupting or ignoring the reality of today. For us at Infosys, it means that we offer our clients the best palette of services and solutions that fit their strategy. It also means fundamentally transforming ourselves while we help to transform each one of our clients.

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Over the holidays and in other forums, I have articulated a message to each of our employees to live this strategy and to contribute to this strategy, every single employee in everything that we do, every project, every client account, every service line and every unit of the company. Over the last several weeks, we have been actively planning and executing the elements required to realize this strategy, and we are already witnessing progress along several fronts. Let me give you some examples:

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Deutsche Bank has selected Infosys as one of its strategic partners to help consolidate and renew its enterprise application landscape with the benefits of cloud re-platforming, mobility, analytics on Big Data and other operational efficiencies. ICA Gruppen, Sweden’s leading retailer, announced a major partnership with us to outsource its IT operations, both IT infrastructure and application-related areas. In addition to cost savings, this change is expected to provide better conditions for business development projects within IT, simultaneously renew and new their systems.

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Infosys has been a partner to Aimia, the leading loyalty program management company for many years. This partnership is a great example of renewing the core, and at the same time, innovating the new. Infosys helps Aimia to renew their existing core systems for Nectar, UK’s largest loyalty program and intelligent shopper solutions, and also helping build new innovative loyalty and consumer engagement products.

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Discover Financial Services in the US has successfully migrated to Finacle core banking platform. Fully real-time, this solution will help Discover bring new products to market faster, automate compliance and deliver a great banking experience and enhance their operational efficiency. Our Finacle Payment Solution set a new global benchmark, processing over 75 mn payments per hour or over 21,000 payments per second. This capability, which we believe is essential for banking systems of the future, supersedes known inter-bank payment transaction volume requirements of banks of all sizes and is almost 5x the known volumes processed by the entire US banking system.

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Our Infosys Information Platform continues to gain traction. We have already built a pipeline of more than 56 projects across industries and geographies in innovative applications for Big Data on our open Infosys Information Platform. A Europe-based banking and financial services company is implementing Infosys Information Platform to be able to scale the data infrastructure required for its regulatory reporting to handle large volumes of parallel data flows cost effectively. We are also implementing a dozen or so projects at customers that use Artificial Intelligence technologies to deliver next-generation solutions for complex new problems. We have established new partnerships with Tableau and DreamWorks Animation to help enter into new areas.

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During this quarter, our volume growth was 4.2%. This is the highest sequential volume growth in the last 3 years over any quarter and the highest third quarter volume growth in the last 6 years. But at the same time, we saw a drop in the realized revenue per billed employee. I am confident that the measures that we are taking to renew our traditional services and to introduce new ways of doing things is the best way, and perhaps the only way to compensate for the commoditization so “we can do more with less for more.”

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Our absolute revenue per employee grew from $52.3 thousand per employee for the 12 months ending 30th September, 2014, to $52.74 thousand per employee for the 12 months ending 31st of December, 2014.

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As we increase our momentum on building out an ecosystem of partners globally, we are pleased to announce that we have expanded our innovation fund from the current $100 mn to $500 mn to support the creation of a global ecosystem of strategic partners and startup companies. This capital will be used to invest into young companies innovating in areas that are strategic for the future, such as Artificial Intelligence, Automation, Internet of Things and Sensor-based technologies, Collaboration and Design and innovative new enterprise applications in these areas.

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Let me now talk about the foundation that we are setting for this change through learning and employee engagement. I am most excited about what we have done in the last quarter to take our learning and education capability to new levels. We will do much more on this in the coming months and years. Infosys is a learning, knowledge-driven company. Our ability to learn new capabilities is crucial to our future success, and I am excited that we are putting our great education and training infrastructure to use to develop these new capabilities.

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I have spoken at length about design thinking. I am happy to report that to-date we have covered over 9,000 employees across the company with design thinking training, with 400 of our senior-most employees recently doing these workshops at our university in Mysore and other places, trained by educator from the Stanford design school and others. 70% of our front-end consultants have already been trained, and this has now been made a part of our fresher training curriculum. We have gone further and got our clients to embrace design thinking concepts. We currently have a pipeline of workshops for over 25 clients planned. We believe this to enable a fundamental shift in the way that we approach solving client problems and solving our own challenges through innovation. Our Artificial Intelligence class that went into effect in October has already trained 1,000 people, and we want to train an additional 500 people in AI technologies per quarter. We are working with Stanford Graduate School of Business to design and deliver a customized strategic leadership development program for our company’s executives.

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In this last quarter, we have taken several steps to increase engagement with our employees in our mission to make Infosys a great place to work. We have set up dedicated teams that are working on and are already implementing several changes to simplify policies while stressing accountability and values. Some of these include bring-your-own-device. More than 14,000 employees have already availed of this benefit to-date. More flexible work from home and maternity leave policies, increased team engagement budgets and easier transfer policies across our development centers.

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We announced a 100% bonus payout for Q2. For Q3, we have announced a 100% average bonus payout across the employee base, as well as a special holiday bonus to high performing employees.

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We want Infosys to be a place where each one of us can pursue a dream career. We have launched an expert track to create a great platform for specialist technologists to emerge, perform and grow and achieve their full potential. This in turn will translate into high impact value for our clients.

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With all of these, we are seeing a reduction in absolute monthly attrition numbers. For the quarter, our absolute attrition was 8,927 for the group, down from 10,128 in Q2, almost a 12% drop, and 10,627 in Q1. Rajiv will talk more about this in his remarks.

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We are happy to announce the expansion of the Infosys Foundation activities in the Americas through the Infosys USA Foundation, focused on making quality computer science education and computer literacy widely and easily accessible.

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For the fiscal year 2015, Infosys Foundation pledged Rs.254 Cr towards Corporate Social Responsibility initiatives in India. Perhaps you have read about the Infosys Prize Ceremony that was held in Kolkata, India earlier this week. We are very proud to be associated with the Infosys Science Foundation that recognizes and encourages path-breaking research in the country.

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I am also delighted that Prof. John Etchemendy, the provost of Stanford University, has joined our Board of Directors this quarter. John is a great teacher, and his vast knowhow of teaching technology and information will be of immense value for us for the road ahead.

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Our financial performance in Q3; our dollar revenue growth in Q3 was 2.6% in constant currency and 0.8% in reported currency. Q3 is a seasonally soft quarter due to holidays, furloughs and low number of working days, so we are very happy with our performance. Rajiv will share additional aspects of our financial performance shortly. With that let me pass this on to Pravin and I will come back for the Q&A session. Thank you.

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Pravin Rao

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Thanks, Vishal. Hello, everyone and Happy New Year. Let me cover the recent trends in various segments, including our initial expectations on client budgets for calendar year ’15.

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In Financial Services, we had over 3% sequential growth during the quarter. There are differing trends across regions, with US banks not spending as aggressively as their European counterparts. Budgets in US banks are expected to be flat to marginally down while they are expected to grow in European banks. Spending is predominantly driven by new channels around Digital, Security and Analytics and in addition, continued spend on compliance. Deal pipeline in the vertical is strong and decision cycles are stable.

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In Insurance, our growth in Q3 was driven by significant improvements in deal pipeline over the last one year. Insurance companies are focusing on modernization programs and on more sophisticated data analytics-based risk assessment programs. They are also talking to us about Telematics and integrating with auto car manufacturers to measure and influence driver behavior and associated risks better. Budgets are expected to grow low single digits in line with the past.

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In Cards and Payments, digital and technology modernization are the top trends. Clients are also increasing spends on digital platforms that leverage social and mobile for marketing and customer services. Budgets are expected to be flat to moderately up.

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Retail and CPG continues to see challenges. Our growth during the quarter was impacted by ramp-downs in a few clients along with impact from delay in commencement of projects won earlier. While spending has been volatile, we see a lot of opportunities in Retail and CPG, particularly strong interest and great conversations in driving a differentiated digital strategy for retailers, not just for their online and mobile world, but also to revitalize their brick-and-mortar stores, leveraging digital. We are taking a strong proactive point of view to market in this space. Apart from the above, we see spend in Analytics, Digital Marketing and ERP rollouts. It is early for the next year budgets to get firmed up since retailers normally start their budgets post closure of their holiday season.

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Growth in Manufacturing was impacted during the quarter due to furloughs, spending patterns are mixed, good in Hi-Tech and Auto, mixed in Industrial and low in Aerospace. There is an improvement in discretionary spend in North America towards customer experience, Digital, Analytics and ERP upgrades. Non-discretionary spend is likely to be flat. Overall deal pipeline has reduced over the last one year especially in Americas. We have seen some slowness in decision cycles in Aerospace and Industrials as many clients are going through challenging times. At a sectoral level, budgets are expected to be flat over calendar year ’14, except for a modest increase in Automotive and reduction in Aerospace.

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Telecom sector continues to struggle with declining top line and bottom line which is squeezing spend and triggering consolidation. Clients are focused on operational efficiency and cost reduction. This is likely to pressure IT budgets in calendar year ’15 which coupled with significant M&A activities in the sector may impact our growth potential next year. In Energy, due to the drop in oil prices, there is a significant shift towards cost savings and efficiency across the entire value chain. Capital projects as well as on-support projects are likely to see large reduction in budgets across US and Europe. Decision cycles have also been severely impacted. On the positive side, however, large deal pipeline is healthy. We are trying to accelerate growth through proactive pitches, focus on new markets and bolstering our capabilities.

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Life Sciences sector is witnessing longer sale cycle due to significant M&A activities and impact of patent cliff. Americas is expected to perform better than Europe. There is pressure on non-discretionary spending with most deals in this area focused on cost reduction, technology rationalization and risk management. Overall pipeline has improved over the past 12 months. Clients have still not finalized their budgets, but early indication suggests tight budgets with increased spend in ERP implementations, cloud, SaaS-based solutions, Analytics and Compliance.

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In growth markets, there is reasonably good momentum in the market, though reported growth is impacted due to decline in local currencies against US dollar. We are seeing increased emphasis in adopting digital strategies, ERP modernizations. Deal pipeline and decision cycles remain steady. There is budget pressure on clients especially on discretionary spend.

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In BPO, client conversations are around transformation of the business processes, with clients looking up to service providers to take end-to-end ownership of their processes. This is driving a shift from FTE-based pricing to output-based and fixed pricing. Though cost continues to drive outsourcing, discussions around value and domain expertise are becoming predominant. Decision cycles continue to be longer for large deals.

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Finacle had a growth rebound during the quarter, we expect increased demand in calendar year 2015 especially in channel modernization, analytics, mobility, compliance, and payments. Pipeline in Europe is looking healthier with a number of banks trying to gain flexibility and economies of scale via infrastructure products and process standardization. Demand from Tier-II segment in the US is improving and some banks are having conversations around core banking replacement. However, due to discretionary profile of the spend, decision cycle remains protracted.

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With regards to Digital, it continues to be amongst the top three agendas for most clients. At this point of digital transformation, customers are focused on portfolio simplifications, cloud apps, marketing operations, building online presence and etc. Our pipeline is getting stronger and deal conversion is steady. Though Digital is discrete spend, decision making is reasonably quick. We continue to invest in consulting capabilities, improving talent through training and forging partnerships and innovation to create business solutions.

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I will now hand over to Rajiv to talk about the financial highlights.

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Rajiv Bansal

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Thank you, Pravin. Good Morning, everyone. Our revenues for the quarter were at $2.218 bn which is a sequential growth of 0.8%. As you are all aware, during the quarter, major global currencies depreciated against the US dollar, for example, Euro depreciated by 5.3%, Australian dollar by 7.5% and GBP by 5.1% against the dollar. This impacted our revenue growth by 1.8%, without which the constant currency growth is at 2.6%. Q3, as you all know, is traditionally a weak quarter due to furloughs, holidays and lower working days. Considering that, I believe 2.6% is a good growth for this quarter.

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As Pravin mentioned, Retail and CPG continues to see challenges and has declined by 0.7% in constant currency during the quarter. Our gross margin for the quarter increased by 20 basis points to 38.7%, operating margins for the quarter went up by 60 basis points to 26.7%. This is the highest level of gross and operating margin in the last 10 quarters. Our net margin for the quarter was at 23.5% and EPS for the quarter is was at $0.46.

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On some of our operational parameters, utilization excluding trainees increased to 82.7% during the quarter. This was the highest level of utilization that we have seen in the last 11-years in any quarters. Utilization including trainees was at 75.7%. Onsite mix improved from 28.7% to 28.5% during the quarter.

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As Vishal mentioned, we have taken multiple measures on attrition part. During the quarter we had given 5,000 promotions and we have also announced 100% variable payout to our employees, we have also done selective salary corrections for certain skills and technology streams. As a result of all these measures, our attrition on an annualized basis is down from 21.3% at the standalone level to 18.1%. We contributed $10 mn during the quarter on CSR activities. We have outstanding hedges of $1.076 bn as of December 31, 2014. Our effective tax rate for the quarter was at 28.2%. Our collections during the quarter were very good, as a result of which the DSO dropped to 61 days as compared to 63 days last quarter. Our cash and cash equivalents including available-for-sale asset and certificate of deposits were at $5.532 bn as of the quarter end.

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Let me now talk about our outlook for FY15. As I mentioned earlier during the quarter, all major global currencies depreciated significantly against the US dollar. Even in the last one week we have seen similar volatility in global currencies, with Euro depreciating by another 2.5%, Australian dollar depreciating by another 0.9% and GBP by another 3.1%. We therefore believe that it is prudent not to take a view on the currencies and are maintaining the guidance at 7% to 9% at September 30^th rates, this is the same rate that we used for giving our guidance on October 10, 2014. We expect our Q4 operating margins to be in the narrow band of 25% (+/-1%) subject to currency movements.

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With that I will open the floor for questions.

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Moderator

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Thank you. Ladies and Gentlemen, we will now begin the question-and-answer session. Our first question is from Moshe Katri of Cowen. Please go ahead.

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Moshe Katri

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Thanks and Congratulations on very strong volume growth numbers. I just wanted to focus on a couple of things and the first thing is related to your commentary regarding the Financial Services vertical. Our survey in December also indicated some challenges there. Pravin, I think it will be helpful if you talk a bit about what is really driving the cautiousness that you are seeing in the Financial Services part of the business in North America? Also we talk about much longer sales cycles, much longer budget decision cycles, I think some color here could help?

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Pravin Rao

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Thanks, Moshe, I will request my colleague, Mohit Joshi, to respond to this.

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Mohit Joshi

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Hi, Moshe. I think overall for Financial Services, we have had a good quarter, right, and I think we are seeing both broad based momentum. In the US specifically, I think we are seeing challenging in some clients, specifically, some of our very large global clients are cutting their IT budgets as they come to the New Year. I think this is partly because of the fairly significant fines that have been levied and obviously that is having an impact on the technology budgets. But overall, I just want to stress that the themes that we spoke about at our analyst conference, right, which is industrialization, digital and risk and compliance, still continue to be the focus areas, and like Pravin mentioned, we are seeing a pickup in activity in the smaller, the regionals and the super regionals. So, for some of the large banks, especially the very large global banks, they are being cautious about their spend because of the fines and the need to attain target return on equity and cost-to-income ratios. So I do not know if that answers your question if you have any follow up to this.

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Vishal Sikka

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Hi, Moshe, this is Vishal. I would add that Digital and especially Big Data, continue to be areas that all banks are looking heavily at investing in. So, while there are secular pressures on the more traditional services on IT budgets, there are areas that are in significant demand and therefore building world-class solutions and competency in those areas, for example, around regulatory reporting, risk analytics, digital, is something that we continue to see tremendous interest in. And also, I would like to ask Ravi to comment on this from an Insurance perspective.

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Ravi Kumar S.

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Yes, Thanks, Vishal. The two segments I work on is Insurance and Cards and Payments. In Insurance, there is a standard refresh cycle which happens pretty much every three years. And as long as we are positioned on those refresh cycles, if we are not an incumbent we would gain some of it. So there is a fair bit of refresh which happens on a regular basis. In addition to it, there is a lot of money spent on risk analytics. Telematics and P&C and to a large extent in Health Insurance, the entire transformation from B2B to B2C. In Cards and Payments, I think there is a fair bit of legacy infrastructure most card companies carry, and they are actually now transforming themselves into digital wallets and the ability to do payments through mobile devices. So their entire infrastructure is going through a huge renewal and we are seeing significant uplift of technology spend in that space.

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Moshe Katri

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Just as a follow-up guys, you have indicated that your pipeline is robust. I know it is too early to talk about fiscal year 2016, but do you think that is unrealistic for us to assume that top line growth could improve from 2015 into 2016? Thank you.

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Vishal Sikka

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Moshe, we will have a better handle on how the strategy that we have laid out will impact quantitatively and what assessment we can therefore give to you in April as I have said before. My sense is that if you look longer-term, the traditional services will continue to see downward pricing pressure and therefore we believe that renewing our existing services to improve productivity through better Automation with use of more Artificial Intelligence and things like this is going to continue to be beneficial; however, at the same time, the next-generation services that are necessary. In almost every industry, there is a tremendous disruption going on. And each, as far as I can see all businesses are looking for ways to continually innovate new areas, and in those areas, we continue to see heavy demand. So our general sense is that whatever downward pressure we see, will be more than compensated by the improved productivity that we see due to renewals in our way of delivering the services as well as the new solutions that we offer. So generally, I continue to be quite optimistic about the future; however, we will share more details about what this could be in quantitatively and what kind of guidance we are looking at when we are together in April. And also, of course, I earlier mentioned the Deutsche Bank example, this is a great example of this particular phenomenon coming to life.

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Moshe Katri

Thank you and congratulations.

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Moderator

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Thank you. Our next question is from Joseph Foresi of Janney Montgomery Scott. Please go ahead.

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Joseph Foresi

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Hi. My first question here is I wonder if you could give us some idea of how we should think about growth given the move to new technologies and then new client additions, in other words will more growth be driven by new clients and how does these shorter digital projects impact what your standard seasonality is?

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Pravin Rao

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We do see growth in both existing clients as well as new clients. There are as Vishal talked about the duality, we have opportunity for renewing the existing landscapes of our clients as well. At the same time we can partner with our clients in terms of transforming their businesses and coming up with taking advantage of some of the newer areas like Cloud, Analytics, Big Data, and so on. So we have a lot of opportunity of mining the accounts and growing within our existing client base. At the same time we also have opportunity for acquiring new accounts and growing those accounts as well.

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Vishal Sikka

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And maybe I can add to that, that generally opportunities to the new existing practices and existing projects as well as bringing new projects to existing clients is of course a huge opportunity. And in parallel of course there is a large portion of the Global 5,000 that we have not yet penetrated and we are quite excited about going after that opportunity both within the United States as well as in other growth markets. And then additional dimension of that that I want to bring up is I mentioned the $500 mn fund that we are adding to our portfolio I believe that that is an area of growth as well over the longer term because startup companies in growth areas need help in scaling themselves and we believe that we can provide that help in bringing them to market and bringing their solutions to scale but also in helping amplify their engineering and development abilities, their operational abilities as well as and of course participating in their financial success. So we expect that that will be another dimension of our growth as we go forward.

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Joseph Foresi

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Yes, I was wondering if you could give us an update on attrition, I think you had given us targets on when you are planning on getting on the rate down before. And any color you can give us on sort of what the personnel is thinking from both an exit and entry standpoint?

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Pravin Rao

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I think while on an LTM basis attrition was marginally up but from an absolute headcount perspective this is the second successive quarter of reduction in number of employees quitting, we had about 12% reduction in number of quits about roughly 8,900 in Q3 versus 10,100 in Q2. And again in Q2 itself we had 5% reduction over Q1 and also if you look at it from a quarterly annualized attrition perspective we have seen a 3% decrease in attrition. So I think from a trend perspective we are comfortable, we believe that many of the things we have done on the attrition front have slowly started seeing the results. At the same time we are still not comfortable with where it is today and we believe that we would be comfortable with more of 12% to 14% attrition and we believe it will probably take another couple of quarters before we reach there. But many things that we have taken I think we are seeing positive impact of engaging with employees in multiple ways and outreach with employee engagement, communication, and outreach activities.

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Joseph Foresi

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Okay. And then the last question from me, I wonder if you can give us an update on just two other metrics. Utilization continues to be sort of on the upper end of the scale, what can we expect from that and what are your thoughts on pricing? Thanks.

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Pravin Rao

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On the utilization front it is about 82% and we are looking at about operating around 80% to 82%. Historically, we have operated around 78% to 80% but this year we are looking at 80% to 82% and upwards. We still believe that we have some headroom, but on a quarterly basis we could see some volatility because in some quarters we have large influx of trainees coming from campuses so you could see some dip in utilization but we are fairly comfortable with operating at the current range and our target is also around this range.

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On the pricing front, pricing is stable but at the same time for some of the traditional services, given the competitive environment, we are under pressure particularly on a deal specific basis and it also varies based on sectors. In some of the sectors or in some of the areas where we are able to come up with transformational opportunities or opportunities in newer areas we are seeing some uptick in pricing. But by and large in some of the traditional areas we are seeing pressure and more recently in the energy space given the challenges around oil prices and other things we are seeing tremendous focus by the client on cutting cost and there we are seeing some increased pressure. But by and large I would assume it is stable but we’ll continue to operate in a competitive market and we’ll continue to be challenged on pricing at least on the existing services.

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Joseph Foresi

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Thank you.

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Moderator

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Thank you. Our next question is from Keith Bachman of Bank of Montreal. Please go ahead.

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Keith Bachman

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Hi, thank you for taking my questions. First I want to talk about margins and the specific question is, if you could talk about the various bits and takes in the most recent reported quarter, the December quarter on what impacted margins. Can you specifically address, I think you mentioned this in the prior call than this one, how much did FX helped in terms of the margins and as you look at the upcoming quarter I know you don’t want to get in the FX prediction business, I certainly understand that, but if FX rates were where they are today, if you look at the March quarter how much help would you get in margins around there but also in the context of not only just FX but if you could talk about how much pricing is also impacting margins. And then I have a follow-up on revenues please.

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Vishal Sikka

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Keith, you are breaking in and out but our sense is that your question is about margin and how do we see this change going forward. Perhaps Rajiv you can answer this.

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Rajiv Bansal

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Keith, let me try and answer this. Margins for the quarter went up by 60 basis points primarily because we saw 2.5% depreciation in the rupee during the quarter. Some of it was set-off because of the cross currency movements, we also saw operational improvement in terms of our utilization going up to 82.7%, strong volume growth of 4.2% onsite mix coming down by 20 basis points. So we saw all around good operational performance which helped us on the margin front. At the same time we also had provisions for doubtful debts coming down in the quarter. So these things helped us in the margin front. At the same time we invested money back in the business based on whatever benefits we got from the operational benefits in terms of what I spoke about 5,000 promotions as we rolled out to our employees, we also gave selective hikes to people in certain technology streams and we also invested in technology and software assets. So our strategy on margins is very straight, we want to keep margins in a narrow band. We still have to invest back in the business, we have to accelerate our growth so we believe a margin of 25% (+/-1%) is what we will target for the further coming quarters. It may vary quarter-on-quarter depending whether I need to make investments. So I would believe that’s a right margin for the coming quarters but at the same time it may vary quarter-on-quarter depending on when there is an opportunity to make investment and we will make those investments.

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Keith Bachman

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Okay, Rajiv thank you. I don’t know if you can hear me any better now but if you look at some March quarters, if you think about it I would assume FX is going to be a help for the March quarter at the same time as you are trying to make investments. So when you say (+/-25%) would you anticipate being above that as you look at the next quarter or so, below that given the forces of investment combined with FX and pricing in particular?

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Rajiv Bansal

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No, as we said during this quarter we had a benefit of a provision for double debt so if you go through the detailed financial statement, we had a provision for double debt provision last quarter and this quarter we had a reversal which helped us roughly about 60 basis points in the margins alone which we invested back. So there are many headwinds and tailwinds in the margin as we speak on a quarter-to-quarter basis. It will be very difficult for me to give you an exact projection of where the margins are likely to be next quarter. But I would still say the same thing, we believe that 25% (+/-1%) is the right margin. If there is an opportunity in a business area to make investments which will help us grow accelerate in that business, we would make our investment, that’s the reason we are talking about a range. As you know our growth rates are still far below the industry average and we want to accelerate our growth, we have been investing back in the business, we are investing in employees, and attrition was one of the big concerns that we had. We have over the last two-three quarters invested heavily back for the employees and some of the early results have started showing up in terms of attrition coming down. So there are still a lot of areas for making investments which were not made for many-many quarters in the past and that’s the reason I am saying though the margins are 26.7% this quarter I still believe that 25% (+/-1%) margin is the right margin for the future.

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Vishal Sikka

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And I would add Keith that our strategy as a company has always been as Mr. Murthy used to say “consistent profitable growth” and I hope that the last 2 quarters have demonstrated that we are sticking to that. We will do what is necessary to invest in areas that are necessary to grow the company, to grow the business, to transform our various areas of capabilities but we will stick to that philosophy of “consistent profitable growth”. And I think the rest is as Rajiv has already talked about.

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Keith Bachman

�

Okay. Well if I could sneak in one follow-up on the revenue side, you mentioned that you are investing for future areas including Analytics, I was wondering how long you see the maturity process unfolding, in other words you are investing in these areas now, when do you think you could see improvement in the top line growth, is this towards the end of this calendar year, when do you think you will see some of the benefits associated with the investments that you are making now and that’s it from me.

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Vishal Sikka

�

My sense is that especially in the Analytics area there is an entirely new reality at hand, the industry has sort of so far addressed Analytics using more traditional proprietary platforms in the Enterprise and I believe that those solutions are no longer adequate for the emerging needs of the enterprises in the future. Therefore we have been working heavily on what we call the Infosys Information Platform which is a collection of open source-based technologies and projects which are Hadoop-based and new emerging projects in this area which are quite exciting and we have been investing heavily in this area and working with our clients. We started this work in late September, early October and we already have 56 projects going on with clients in the area of new kinds of applications on big data. I already mentioned banking and risk analytics, risk reporting, regulatory reporting on trades on massive volumes. We have been working on projects in the areas of predictive maintenance for manufacturing of mining companies, we have been working on projects in the areas of analytics for retail type companies, for fraud detection and things of this nature. So I believe over time my expectation is that every single one of our clients is going to be using these technologies. However specifically what this will mean in terms of revenues and how we will see the emergence of each project and the monetization of each project, we will have more to say quantitatively about that in April. But you can see that the approach that we are following has been followed before by other companies in the open source world, the Red Hats and Hortonworks companies like that which have basically built enterprise ready capabilities around open source stacks and the markets have valued those kind of things.

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Keith Bachman

�

Okay gentlemen, that’s it from me. Many thanks.

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Moderator

�

Thank you. Our next question is from James Freeman of SIG. Please go ahead.

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James Freeman

�

Hi, I wanted to ask first about utilization, how soon Pravin might we see the utilization come down towards your targets?

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Pravin Rao

�

I think what we are operating is around the targets and we are comfortable with the level of utilizations because we said 80% to 82% we are comfortable, it is slightly above 82%. We are comfortable operating at this level. There are some quarters when we have large infusion of fresh graduates, the utilization may drop down but we believe the levels which we are operating today is fairly comfortable.

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James Freeman

�

Next question is with regard to the cash position of the company. Could you share with us your updated philosophy with regard to acquisitions or potentially buybacks?

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Vishal Sikka

�

We continue to be excited about the possibility to acquire companies. As I have mentioned before we are very interested in acquiring next generation capabilities and technologies. We are not interested in acquiring yesterday’s capabilities and technologies. Next generation things would be things like Artificial Intelligence, Automation, new ways to do collaboration across boundaries, new design-oriented technologies and services, capabilities of that sort. There is a tremendous emerging world of Industry 4.0 and sensors and so forth and rethinking the product engineering world with digital technology. So we are quite excited about that area and we are actively looking for great opportunities that we could use to bolster our capabilities. So you should expect to hear from us over the next weeks and months as we make progress on these dimensions. Beyond M&A we are quite excited, one again as I have said before about the investment fund that we are launching to invest in startup companies and participate in their growth both financially as well as from a business perspective and we expect to take better utilization of our cash towards that dimension as well. Beyond that we are working through these details, in fact these days tomorrow we have an offsite on these topics. So over the next 80 or so odd days we are going to continue to refine and quantify our aspirations and our expectations and so forth including our capital allocation plans and things like that and we look forward to sharing that with you with the April earnings.

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James Freeman

�

Thank you Vishal for the complete answers.

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Moderator

�

Thank you. Our next question is from Ravi Menon of Elara Securities. Please go ahead.

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Ravi Menon

�

Thank you. I had just two questions, one, you have already elaborated a lot about the Infosys Information Platform but if you could give some more color on the nature and the size of the project that will be great. And secondly, would you regard this goes an option of Finacle and the recent benchmark tests that you did as indicators for accelerating adoption in the US by mid-size banks. Thanks.

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Vishal Sikka

�

Could you repeat your first question on IIP, I could hear that it was about the IIP but not what the question was.

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Ravi Menon

�

Yes, the size of the projects, if you could give some color on that that would be great.

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Vishal Sikka

�

Across industries there are about a little bit more than 56 right now, they are across industries and across geographies. They are for various different kinds of problems. Some are extensions of existing work that we have been doing with clients, mostly are completely new. Some are being priced based on value that is delivered by the project, some based simply on the effort required. So we want to see how this evolves, we expect that over the course of this quarter that we are now in Q4 we will conclude several handfuls of these projects and then we’ll have a better ability to identify which buckets various projects fall under. But the way we are treating these are, as these are new generation projects, these are extremely agile projects where we deliver value to clients very-very quickly. We do four week POCs, 8 to 10 week projects and so forth and they are relatively high value. So beyond that, it is too early to tell in any kind of meaningful quantitative way what nature these projects will have.

�

And on Finacle I would like to ask Michael who is the head of our Finacle to answer the question.

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Michael Reh

�

Good morning, this is Michael speaking. So basically on Finacle we had a good quarter. In general the business recorded a quarter-over-quarter growth. We had 18 wins and 20 go-lives across the different regions of EMEA, Americas, and APAC. I guess more importantly the momentum is getting better, we are seeing a good uptick in our demand particularly in the western markets. The banks who have delayed their modernization programs in last few years due to the lack of budgets and limited appetite for especially large transformational programs are now actively exploring these kind of options and today we are very well-placed with our services and our advanced platform. You might have seen the announcement coming out from the analysts, Finacle has been awarded as being the leader in the Magic Quadrant from Gartner and also recently we have released our performance benchmark which basically means that we have broken a world record in the number of transactions we are processing and the excitement about that is that the number of volumes we are able to process is exceeding 5x the entire volume of payments we are seeing in the entire US market right now.

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Ravi Menon

�

Great, thank you.

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Moderator

�

Thank you. Next question is from Edward Caso of Wells Fargo. Please go ahead.

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Edward Caso

�

Hi, thank you very much. Got a question around your innovation fund, how you are going to manage any complex both internally on deciding what technologies to work with and externally not having group see you line up with another firm and so forth. How do you work through those complex? Thanks.

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Vishal Sikka

�

Well, we are purely a services company. We have lived for the last 33-34 years on this idea of being open to every single choice that customers have made and so the more the merrier and as many of you perhaps have heard me argue before I would love to be in situations where we have this great problem of multiple competing technologies and solutions to the same problem. I think that kind of situation to be in, is a wonderful situation to be in and we look forward to being more and more in that kind of a situation. But seriously I say that with the tongue in cheek but openness is what it is all about. Assembly of great solutions out of many-many different possibilities is something great to look forward to and we will never see a situation where the choice is like that hamper our ability to deliver great value to clients.

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Edward Caso

�

My other question is, in your earlier call you mentioned the desire to move utilization up to the sort of 83% - 84% level, it is that part of what’s necessary to maintain operating margin around 25% given the ongoing pressure on the traditional offerings?

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Vishal Sikka

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I don’t think so, my sense of it is that originally when I started here of course this was all new to me so it was some out of a desire to see how far can we go and how high can this go and Pravin of course has been at this for a long time and our sense is that there is still headroom here. We see that more as a sign of a healthy operational efficiency in the company to see how high it go. Of course there are structural limits here that we are running into, the amount of time people have to take on vacations and training and other factors that apply. So, however, there are lots of other factors that contribute to margin as well, this would be one of these but certainly not the only one. We are measuring the productivity, the value delivered, new kinds of business models, IP based products and so forth and other contributors to the revenue productivity and to margin. And again as I mentioned earlier if you strictly look at the revenue per FTE that we have delivered, that number has gone up from $52.3 thousand per employee at the end of Q2 for the last 12 months leading up to the end of Q2 to now $52.7 thousand per employee at the end of this last quarter.

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Edward Caso

�

Thank you.

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Moderator

�

Thank you. Our next question is from Anil Doradla of William Blair. Please go ahead.

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Meyran

�

Hi guys, this is Meyran for Anil. I was just curious about kind of you speak about these technologies of yesterday and then the emerging technologies, could you kind of give us a breakdown of percentage wise of the revenue that would still be yesterday then in the percentage that is in new and then kind of the growth that is coming with both of those buckets.

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Vishal Sikka

�

Not yet Meyran and that’s something that we are working through, that we will share with you in April. I have to say that when we say renew of our existing services, that means bringing automation, bringing innovation to all the existing services that we deliver today whether it is Business Process Outsourcing, Business Process Management, IMS or Infrastructure Management or Verification Service, Package Implementations, Product Engineering, Application Development and Maintenance. All of these existing services can be significantly improved, productivity can be improved by the better use of automation, bringing in new technologies into these existing services. So it is all about taking the existing services that we have in offering, the bread and butter services, and helping transform these incrementally without disruption to the business as we go. When I say yesterday services I basically mean an un-renewed service of today, so we are very interested in renewing all of our services and we have no interest in leaving any of our services un-renewed per se. And then the new things are of course completely new things that we did not offer till recently and that is an additional area of growth that we foresee. But how this will breakdown and which part do we expect to contribute, what this we will share more details in April.

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Meyran

�

Okay, thank you. And can you just provide a little update on just the overall competitive landscape and the kind of the competition that you are seeing throughout the different parts of the business? Thank you.

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Pravin Rao

�

We see competition both from global SIs as well as some of our large India peers but at the same time in some of the newer areas, particularly in the areas of Digital we are also seeing competition from agencies, in some of the other areas we are seeing competition from some of the startups. So in general but by and large for some our traditional services the competition remains the same but in new areas we do see competition from startups, digital agencies and so on.

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Moderator

�

Thank you. Our next question is from Rishi Jhunjhunwala of Goldman Sachs. Please go ahead.

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Rishi Jhunjhunwala

�

Yes, thanks for the opportunity. A couple of questions from my side, firstly on the attrition side we have clearly seen a downtick in the attrition rates in this quarter. Just wanted to understand how much of that is related to quarterly aberration because this is a quarter where the attrition is seasonally lower and how much is on the back of the various measures that you have taken. And as a result of those measures that you have been talking about earlier in the call as well, how does that impacted your overall employee cost because that seems to be pretty much flat on a quarter-on-quarter basis as well.

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Vishal Sikka

�

No, I guess that the question was about attrition and the lowering of the attrition rate. We believe that many initiatives that we have taken, that both Rajiv and Pravin talked about as well as I talked about, are showing results as we had expected. Many of these decisions that people take tend to be long-standing decisions that they had already taken several months ago, so we see sort of a residual momentum of these. We definitely want this to improve further and we want the attrition levels to come down to these 12% to 14-15% ranges that are more common in the industry and we expect that we will get there over the next couple or three quarters. The month-by-month as well as the quarter-by-quarter actual numbers have come down significantly and that is something that we see as an encouraging sign but clearly we don’t want 8,900 people or something to the tune of that leaving every quarter and we want this number to continue to come down.

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Rishi Jhunjhunwala

�

Thank you. The second question is, you have been talking Vishal about Automation and Artificial Intelligence and other disruptive technologies. Just wanted to understand how far an outsourcing IT services company is from having these kind of technologies being contributing prominently to the overall revenue growth? The reason why I ask is just trying to understand as to how much of the capability acquiring is going to come from internal development of skills from employees and how much may potentially come from direct M&A.

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Vishal Sikka

�

I didn’t catch the last part of your question, what was the two different options that you mentioned?

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Rishi Jhunjhunwala

�

Internal development of skills in the employee base versus M&A.

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Vishal Sikka

�

This is still very early. I mentioned we have around 12 or so of these what we could call purely AI based projects that are going on, these are awesome and very exciting. We are working on for example testing the stresses on an airframe of an aircraft under extreme pressure using Neural Network Technology or for one client in Retail, we are building a Probabilistic Network to detect fraud in transactions and things of this nature which are extremely exciting and high value and necessary for the future. But I think we have to keep in mind that these are 12 projects out of more than 20,000 projects that we have going on in the company right now. And so it is even too early to tell how quickly these things will start to have what kind of an effect and we expect to have a more precise and quantitative answer for you for these types of things in April.

�

The other part about acquiring the skills from inside versus outside, we expect to see a mix of that. My tendency right now is, again, this is too early to tell and you want to be very open and nimble on a decision like this. Wherever you see something that makes sense you want to be in a position where you can quickly move to acquire it. But having said that my sense is that over a longer term much more of this will be done organically and our sense is that M&A will complement that rather than having M&A be the basis to build this kind of a thing on. We have put together a state-of-the-art Artificial Intelligence class in our Mysore campus as well as in our DCs, a little bit more than 1,000 people have already taken that class, these are the ones that we are putting on some of these projects around Machine Learning and things like this and we expect that we will train 500 people on these technologies every quarter going forward. That means that the kind of scale that we can achieve in building competency in this area organically will continue to be quite substantial.

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Rishi Jhunjhunwala

�

Right. And just a very quick follow-up, if I remember correctly Infosys had entered into a partnership as well with one of the companies which does a lot of Artificial Intelligence, I think it was IPsoft. Just trying to understand is that partnership going anywhere or we are just trying to look at building it internally?

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Pravin Rao

�

We have not really found much traction in the partnership so we are building that capability internally. We already have a platform for Automation and we have seen some decent tractions both on the Application Maintenance as well as Infrastructure Management space and we will continue to invest in that platform.

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Rishi Jhunjhunwala

�

All right, thank you so much.

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Moderator

�

Thank you. Ladies and Gentlemen, that was our last question. I now hand the floor back to Mr. Sandeep Mahindroo for closing comments.

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Sandeep Mahindroo

�

Thanks everyone for joining us on this call and spending time with us. We look forward to talking to you again. Have a good day.

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Moderator

�

Thank you. On behalf of Infosys that concludes this conference. Thank you for joining us and you may now disconnect your lines.

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Exhibit 99.7

Bloomberg TV Call

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BLOOMBERG TV call

Q3 FY 2015 results

January 9, 2015

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CORPORATE PARTICIPANTS

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Vishal Sikka

Chief Executive Officer & Managing Director

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Pravin Rao

Chief Operating Officer

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Rajiv Bansal

Chief Financial Officer

�

interviewer

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Harsha Subramaniam

Bloomberg TV

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Harsha Subramaniam

�

Thanks for joining us on Bloomberg. Joining me is the top management team of Infosys, Vishal Sikka – CEO, Pravin Rao – COO and Rajiv Bansal – CFO of the company. Gentleman, many thanks today for joining us.

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Vishal Sikka

�

Great to be here Harsha.

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Harsha Subramaniam

�

Although we are surprised by the numbers, give me a sense of how you see demand playing out in calendar ‘15, are more clients willing to spend more on IT?

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Vishal Sikka

�

I think that it is sort of a tale of two cities. We see continued pressure from a demand perspective in many industries because the industries themselves are under pressure and as a result their IT budgets are under pressure. But that applies more to what we can refer to as ‘yesterday’s services’. The more and more needs that companies have for innovation and the capabilities to serve those needs are in very high demand. So we see this duality playing out. On the one hand we are renewing all our existing services to bring more automation, more AI (Artificial Intelligence), more innovation to those, better operational efficiencies and so forth because that is an area where the traditional way of working has been under pressure and Pravin can elaborate on that. We have already saw the results of that in this quarter. But the other side of it is the need for next generation kinds of services, innovation services and that is in the extremely high demand.

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Harsha Subramaniam

�

Just a word about Pravin on verticals, we are talking at a time when there has been a dramatic collapse in the oil prices, what kind of impact has that had on some of the verticals that you operate in?

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Pravin Rao

�

I think Energy is under tremendous pressure. There is massive cost cutting going on and some of the clients have come back and asked for some rate cuts and so on. At least at this stage we are seeing some kind of panic. It will take probably couple of quarters for things to stabilize. Barring that I think it has been a mixed thing

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Harsha Subramaniam

�

Would you be able to quantify that at this point?

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Pravin Rao

�

No, will not be able to quantify. It is early days because these things are happening at a very rapid pace and we have slowly started seeing some of the clients coming back with cost cutting, postponements, rate cuts, and so on. But it is difficult to quantify.

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Harsha Subramaniam

�

Sure. Rajiv impact of the cross-currency headwinds, what kind of impact has that had, what is the game plan in managing it?

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Rajiv Bansal

�

If you look at this quarter it was very-very abnormal. You had all the major global currencies depreciating big time against the US dollar. Just to give you an example, Euro depreciated about 5.3%, Australian dollar depreciated by 7.5%, GBP depreciated by 5.1%. These are major movements and it is very difficult to really take a call on these currencies. So what we have done is if you look at the impact on the topline would be visible because you just convert these currencies into dollars and you report the numbers. So we have an impact of about 1.8% on our growth during the quarter. In constant currency terms we have grown by 2.6%. Having said that, even in the last one week we have seen major movements in these currencies. For example, we have seen Euro depreciating by another 2.5% in the last one week. So we are not taking a call on where these currencies would end up in the next quarter. We have kept our guidance at the same rate at 7% to 9% based on September 30^th exchange rate that we gave and we seem confident about these exchange rate guidance that we have given on September 30^th exchange rate.

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Harsha Subramaniam

�

Vishal, broader question about management strategy, you outlined a vision since you took over in August and you said some numbers will perhaps come in April. Could you give us some sense of the direction because the market is keen to know some details?

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Vishal Sikka

�

We will have much more quantitative details in April. We need that time to work through the implications of the strategy of renew and new, including capital allocation and where and how we will spend what money and so forth. We have consistently said that that has to come in April and so we request you to stay tuned for that. What we do see is the early adoption of this strategy. The basic strategy that I have laid out is that every company in the world in every industry and independent of the changes that we see going on, has this dual need for renewing their existing landscape, their existing systems, processes and so forth to bring more operational efficiency, to bring more productivity, to instrument them for mobile access, for analytics, for sensors and so forth moving them to the cloud. That part is complemented by completely new kinds of things, new ways to go digital, new ways to connect to customers, going to new markets and new business models. To serve that we have the same. There is ‘renew’ of our existing services - BPO, IMS and everything that we do in Verification Services, Consulting and Package Implementation. That has to be renewed and that has to be renewed on the basis of innovation, on the basis of automation to improve, better productivity. I have used Prof. Mashelkar’s line shamelessly is 'Doing more business for more” and that is the name there. But in parallel that won’t be enough. If we did that we will continue to grow, how much we will quantify this in April. But in parallel to that we need to do completely new kinds of things and that is the way we have been emphasizing, the work that we have been doing on the Infosys Information Platform which is a new collection of Open Source technologies that can deliver Analytics and Big Data solutions at a price point that just cannot be compared with traditional proprietary’s stack. That’s why we are emphasizing so much on Design Thinking. We did a massive embrace of design thinking in the last quarter. We have trained 9,000 Infoscions on Design Thinking, including top 400 managers of the company have gone through an intense training on that 2-days each kind of a thing. We have put together a new class on Artificial Intelligence that more than a 1000 of our senior people have already taken. We have projects going on in these directions already. We have 56 projects going on in the world of Big Data with the Infosys Information Platform, 25 clients are already working with us on Design Thinking workshops to themselves learn Design Thinking. So all these things are already starting to show traction. In the press release, we mentioned that Deutsche Bank has worked with us on renewal of their application landscape and in parallel they are working with us on analytics. So these are kind of examples of clients that we have been bringing to this renew-new strategy to life.

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Harsha Subramaniam

�

Sure, we will wait till April for the numbers. But one area of concern has been on attrition, I understand there have been quite a few initiatives taken by the company, what’s your own view on how you are addressing this problem?

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Vishal Sikka

�

My view is that we have seen substantial improvement in attrition. There are LTM and these other metrics but if you just look at the actual number of people leaving on a month-over-month basis or quarter-over-quarter basis, we have seen tremendous improvement. This last quarter we saw 8,900 or so people left the company. The quarter before that was roughly 10,100 people, so we saw a significant drop of almost 12% drop quarter-over-quarter. Q1 was 10,600 people had left. So it has been coming down significantly. It is still not where we wanted to be. Pravin, Rajiv and I, we have all said that we will see this coming down over the next quarters. What we see this as a sign that our interventions, our activities have been paying off. We are not quite where want to be yet but we expect that in the next.

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Harsha Subramaniam

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Is there a target?

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Vishal Sikka

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The target is historically, our industry has been around 12% to 14%. We want to roughly come down to that kind of a level. Infosys is a very distinguished company. We have an unbelievable training program that others envy and so our employees are always in high demand and there are lots of skills that are in high demand. So 12% to 14%, what do you think Pravin that sort of numbers?

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Harsha Subramaniam

�

Well played. Margins, 26.7% at this point, I understand that was even in your previous quarter you had a 100 basis points increase. Again, is there a range that you are working with?

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Rajiv Bansal

�

As I said, we will be comfortable in margins at about 25% (+/-1%). This time the margins have improved by 60 basis points primarily because of rupee depreciation and improvement of the operational parameters like utilization, onsite mix coming down and high volume growth. Many such have contributed. But our strategy remains the same, we would want the operating margin to be about 25% (+/-1%). Any upside on the profits would be ploughed back in the business to accelerate our growth, invest in employees, invest in technology, invest in software that we need. So there is a lot of investment that we have laid out. At one end we are looking at cost optimization, cost reduction and cost rationalization while at the same time we are looking at how that money can be ploughed back in the business to accelerate our growth.

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Harsha Subramaniam

�

Sure. Pravin, question about Europe. We are seeing headlines on how the recovery process in Europe is struggling really, how has that impacted business. Are there any specific verticals that have greater impact then others?

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Pravin Rao

�

I think overall on a reported basis we saw a drop but if you look at a constant currency basis this quarter, we had a sequential growth in Europe as well. But overall from a sector perspective we have seen good tractions in Financial Services and Insurance. Retail was muted last quarter but this quarter on the back of few wins, we expect better performance. Manufacturing is soft. Energy globally we have this issue anyway. Telecom also because of top-line challenges and merger & acquisitions, its soft. So net-to-net, I think Financial Services is probably the only one including Insurance is where we are seeing a good traction.

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Harsha Subramaniam

�

This is a question that keeps coming about that the market just wanting to know is about your $5 mn cash pile. There was a letter from your former leadership of this company asking for a buyback. Is this being under active consideration?

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Vishal Sikka

�

That is you are digging up things from a long long time ago.

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Harsha Subramaniam

�

It is a couple of months ago.

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Vishal Sikka

�

Do you remember? Couple of months ago was like a different life. We will lay that out in April together with the rest of the strategy. We will have a detail allocation plan that we will layout and so forth. One thing, I mean our cash and cash equivalents went up to $ 5.53 bn now. We are very proud of that and excited about that. We believe that we want to make judicious use of that for innovation, for bolstering our ability to innovate, getting our additional capabilities in there. One thing that we think the more we get into this new generation, the world around us is being transformed fundamentally by software, by computing technology and yet the IT industry is by and large not serving this need so well. And so I see a tremendous opportunity there and lot of the innovation will come from startup companies.

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Harsha Subramaniam

�

So you mentioned a possibility of an acquisition or are you going to see more traction in that space?

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Vishal Sikka

�

Yes, we are working on that. We have been looking actively for companies in the areas that we want to be in. You should expect to see that coming from us. But again we were not interested in buying yesterday’s technologies, we are interested in bolstering our capabilities in Innovation, Automation, AI (Artificial Intelligence), better Productivity, Collaboration, Design and things like this. But where I was going the start-up point was that we have had a $100 mn investment fund for investing in startup and I am very proud that our Board has approved to expand that to a $ 500 mn fund that we can invest in. I want to dedicate a part of that for innovation coming from Indian startups because there is a lot going on here and I was reading recently that startups in India struggle to get scale. We can bring them to scale, we can invest in them, and we can help expand their ability. So we are very excited about that.

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Harsha Subramaniam

�

One sort of question that keeps coming about, Vishal is the fact that if you look at large deals that somewhere the large multiyear, multimillion dollar deals that Infosys was not in the game for about 12-18 months. Do you consider yourself back in that game in those big ones?

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Vishal Sikka

�

I think that yes, certainly and Pravin can talk a little bit more about this. Many of those deals include infrastructure component and things of this nature that we have structurally not participated in. We do see a lot of opportunity in the large deals as well. Although, overtime you should expect that they will tend to come down over a longer term. So yes, we do see more. This quarter we grew additionally in the big accounts. Pravin, maybe you would want to add here.

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Pravin Rao

�

See, this quarter we have 3 large deal wins. We have our own definition of large deals greater than $50 mn. Total TCV of about $ 213 mn. Apart from that we had about 4 or 5 other deals which are slightly lower than our threshold, so we are not declaring that. Otherwise, the pipeline wise it is fairly decent. Our win rates are fairly decent. The overall TCV value of what we are seeing is coming down. Historically we used to see lot more $200-300 mn. We are seeing that coming down into much smaller pie. But we are very much there, very active in the large deal space. We have recovered in the Infrastructure space, we are getting invited. Earlier about a year back we were not getting invited to Infrastructure deals, today we are getting invited. We are seeing as one of the leaders in the Magic Quadrant and then so on. We are very much active in that play, but the overall size is coming down and our win rate is slightly increasing.

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Harsha Subramaniam

�

One question about your management team as well Vishal, what percentage of you see the leadership is from SAP?

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Vishal Sikka

�

Very small.

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Harsha Subramaniam

�

Is there a target that you have in mind? Is this going to be a SAP Infosys. What I am driving is, the direction which you are taking this company is that going to be…?

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Vishal Sikka

�

No. We have a great management team. We have an awesome management team. Pravin, Rajiv our leaders are a young, passionate team. Of course you continue to make changes and tweak it to serve as the business evolves and so forth. We have made already some changes and so forth. SAP is a tremendous partner for Infosys. They are great friends of ours. I have thousands of friends at SAP and we continue to be great friends and we just went live on HANA, my little girl. She is still my little girl you know, live in somebody else’s house now but handful of people joined us and that is it. There is nothing more to that. Michael Reh, Abdul Razack, Ritika Suri, very small portion of our management team.

�

Harsha Subramaniam

�

Sure. Pricing, when I speak to most companies they give you the impression that there is no scope for uptrend at least this year. Is that the view that you subscribe to?

�

Pravin Rao

�

Yeah, absolutely. Pricing is stable, but in the existing services it is very difficult, it is only downhill. There is continued to be pressure on the traditional services. But there are definitely opportunities in newer areas, in the areas of Big Data, Analytics or if you are able to innovate and come up with offering around our own IIP platform and so on. There we have opportunities for higher price realization and so on. But in the traditional thing, ASM, Infra all those things pricing is under pressure and it will continue to be under pressure.

�

Harsha Subramaniam

�

Rajiv, just a point about utilization. You are seeing some uptick in utilization. What are the contributing factors for that and how do you see that going forward?

�

Rajiv Bansal

�

The utilization is increased to 82.7% that is the highest utilization we have seen in the last 11 years in any quarter and that is something that we are very proud of. At the beginning of the year, we clearly said that we would like the utilization to be about 82% and I would want it to go up to 84%. Why can’t we reach 84? So it is a change in the mind, it is a change in the way we work, is to make people more productive, to utilize their bench time more effectively and I would believe that we can easily reach 83%-84%, we just have to work more smartly. Having said that, you will continue to see quarterly movements here depending on when the trainee batches join because all of us hire from campuses. Right, the big chunk of people come from campuses. The quarter you see a lot of people joining from campus, utilization would trend to drop. But I think on an average. I would be comfortable with 83%-84% utilization and that is something that we all of us are working towards.

�

Harsha Subramaniam

�

You want to add to it?

�

Vishal Sikka

�

I think that, at some point you run into limits with vacation and the time that people have to train and things of this nature but we think that there is a still a little bit room for more upside there. We can take it up to like Rajiv said 83-84%.

�

Harsha Subramaniam

�

Now one final question, Vishal, and this is with respect to if you look at Calendar ‘15, you have obviously gone through a period of transition. You just take it over a new team and so on. What would be the milestones for you to measure yourselves to say that growth is happening because there is a market share loss that has happened, stock is perhaps gaining around. For you what would be the milestones?

�

Vishal Sikka

�

I think on the one hand, on the renewal side the improved productivity, better efficiency, better utilization and more operational efficiency. Pravin has done a lot of work in this area and we have been working heavily on bringing more Automation and so forth. So how much can we improve our productivity on the renewal of our existing services, this should be one of the metrics.

�

Harsha Subramaniam

�

This is bread and butter.

�

Vishal Sikka

�

This is bread and butter, the existing businesses, and so forth. This is something that we cannot disrupt, and we have to continue to grow that. We have to then augment that growth with new things. So one of the things that will measure is how many new projects we are adding with our new platform worked to the Open Source technologies and how much more, how can we get with Design Thinking, more AI-oriented projects for new kinds of things. We already have about 10 projects going on. We are building really amazing Artificial Intelligence-based applications for big companies in Aerospace and Manufacturing and so forth using Neural Networks and things like this which is quite exciting. How many clients have adopted these new kinds of projects, how many people are working on these new kinds of projects and how much revenue is coming from those, these would be some of the metrics. Also I think internally you have to look at how many employees are we covering with the Employee Engagement, with the new ways of educating and learning and so forth. At the end of the day, I think it would end up being around revenue productivity meaning not revenue productivity the way we have done traditionally, but just revenue per employee. And if you look at, there we have seen very minor uptick. We went up from $52.300 per employee on a trailing 12-month ending Q2 to $ 52,700 trailing 12-month ending this quarter which is a good sign. Of course this is very early and probably too early to make anything out of, but at the end of the day if “we are doing more, with less for more” that means that we are generating more revenue per employee.

�

Harsha Subramaniam

�

Many thanks for joining us. Thanks so much and good luck for the next quarter.

�

Vishal Sikka

�

Thank you so much Harsha.

�

Exhibit 99.8

Common TV Address

�

common TV address

Q3 FY 2015 Results

January 9, 2015

��

CORPORATE PARTICIPANTS

�

Vishal Sikka

Chief Executive Officer

�

Pravin Rao

Chief Operating Officer

�

Rajiv Bansal

Chief Financial Officer

�

press

�

Rukmini Rao

Bloomberg TV India

�

Chandra

ET NOW

�

Poornima Murali

CNBC TV18

�

Tariq

Zee Media

�

Vishal Sikka

�

Hi everyone, this is Vishal. We are excited to join you today and share with you the results for the third quarter. We had a very good performance in the third quarter where we saw 2.6% revenue growth in constant currency, 3.4% in rupee terms. We also saw expansion of our margins to 26.7% which is 60 basis points improvement compared to Q2. We achieved this on the basis of very-very good volume growth. We saw volume growth of 4.2% which is the best growth of any quarter in the last three years and the best growth of any Q3 over the last six years. We also had very high utilization. We touched 82.7% utilization in the quarter which is the highest utilization in 11 years. We are extremely excited about these results. We also saw drop in attrition. In absolute terms in Q3, we saw attrition of approximately 8,900 people, compared to 10,100 or so in Q2 and 10,600 in Q1. So we are seeing continued drop in attrition, which we continue to monitor and continue to be excited about as we look to the future. As a result of this achievement, we are announcing 100% variable bonus payout for our units in the company.

�

With that, we would like to open it up to some questions.

�

Rukmini Rao

�

Hello, Gentlemen, this is Rukmini Rao from Bloomberg TV India. Congratulation on the numbers, of course not quite what the street was expecting and we are also surprised with the numbers though. Just wanted to understand from you, Vishal, on what the demand environment is looking for you guys in the next quarter or so, because all of them were expecting a dip in the guidance that you might announce? Also, just wanted to understand, the way the rupee has been reacting, what do you see the impact of this volatility of rupee going forward? Thank you.

�

Vishal Sikka

�

We have seen a tremendous currency fluctuation recently and it leads to in many cases negative results and so forth. I do not want to get into the currency fluctuation business. We are in the technology, innovation and services business. We will leave the currency speculation to others. From a demand perspective, we continue to see good demand. Of course, there are challenges in many industries in Retail, Manufacturing. However, my sense is that there is tremendous need for innovation. Most industries are in a tremendous state of disruption, they need software and a strategy to power themselves with software to invent their future with software, with computing technologies and we continue to see significant need for industries to renovate themselves with the use of innovation. Pravin, do you want to add something on the demand side?

�

Pravin Rao

�

Yes. I think if you look at it from a geography perspective, we are seeing good demand in North America barring a few verticals. Europe is a bit muted. If you look at it from a vertical perspective, in Financial Services, we are seeing good traction, more traction in Europe than in Americas. If you look at Manufacturing, as a sector, we are seeing fairly muted growth in pipeline. But if you look at it from a sub-sector perspective, we are seeing decent traction in Hi-tech and Auto whereas Industrial and Aero are under pressure, RCL (Retail, CPG, Logistics, and Life Sciences) continues to be a bit of a challenge. We continue to expect volatility going into the next quarter as well because that is one area where we are seeing significant transformation of the business model. We will continue to see wins, we will continue to see postponements and it will continue to be some volatility there. Energy is under tremendous pressure. Because of the drop in oil prices, we are seeing massive pricing pressure. We are seeing postponements and so on. So I think for the next two quarters that sector will be bit troubled. In telecom, given the M&A activities happening and the pressure on the top line itself, we will continue to expect some challenges going forward. In Life Sciences, we have had a fantastic quarter, a very strong quarter. Next quarter, pipeline is decent, but remains to be seen. Overall, I think the momentum is good, particularly in Americas getting into this quarter and the next year. Europe is a little bit muted.

�

Vishal Sikka

�

I think it is important to keep in mind that the demand pressure that we see is on the way the services and the way the offerings have been so far. When we look at the innovation and the needs for tomorrow, there continues to be a tremendous demand for that. However, we do see pricing pressure on what I can perhaps informally refer to as ‘yesterday’s services’. We continue to have pressure on those because of the economics, because of the pressure that the businesses themselves are in as Pravin mentioned in Retail, in Energy and other sectors. However, in every industry, there is a tremendous need for innovation. By-the-way, I also wanted to mention that because of the innovation that we see especially from start-ups, one of the things that I have been amazed by is that in India, we have thriving start-up scene. But also the challenge that start-up companies see to scale themselves up to international to serve international needs. So one of the things that I am very excited about is our Board has today approved expanding our start-up fund from $100 mn to $500 mn and we will dedicate part of that just to investing in India.

�

Chandra

�

Hi, Chandra here from ET NOW. Vishal, looks like a new year has started on a good note for you. I was just going to ask about this start-up innovation fund allocation. So this $500 mn, is it part of the cash allocation strategy that you said that you will be talking about. Will there be more such initiatives that we can expect in April because there is a lot of questions on what you are planning to do with the $5.4 bn. If you can tell us about the cash usage strategy? Rajiv, if you can clarify if the guidance 7-9% is in constant currency, because it is said at September 30^th exchange rate? And finally, Pravin, attrition is still 20.4% on an LTM basis, so it has not really come down for you. Why are not the initiatives paying off because you guys have changed the compensation structure, I hear you are handing out iPhones to top performers, why is there no let-up in attrition?

�

Vishal Sikka

�

Yes, you should expect that as we lay out our detailed allocations in April on what the implication of our strategy are in a detailed plan, as a result of that, we will address the cash aspects of that as well. And yes, indeed, this $500 mn is a part of that. But for now, one step at a time. Today we are announcing $500 mn fund and it will take time of course to draw down from this fund, but we are announcing this fund today that we will start to invest in companies from around the world, in the rest of the world as well. But we also want to have a dedicated focus, especially on Indian start-up companies but more to come in the next quarter. We need the additional three months to put together the details of how we will work out all of these things. Then in terms of the guidance, I will let Rajiv address that. I think given the massive fluctuations that we have seen all around the world. We are an Indian company, our reporting currency is rupee, so I think at the end of the day, we have to measure ourselves by how we do in rupee terms, revenue and profitability growth in rupee terms. We do not want to get into the business of speculating on currencies and so forth. What we have done is we are sticking to our plans, we are sticking to our guidance that we gave at the end of September that 7-9% that we mentioned as of the 30^th of September this is what we are holding out as to. Rajiv, do you want to add something?

�

Rajiv Bansal

�

As Vishal already said, most of the global currencies have seen a huge depreciation in the last three months against US dollar. If you look at Australian Dollar, it has depreciated by about 7.5%, GBP and Euro by more than 5% and that kind of currency fluctuation is very difficult to predict. Even if you look at in the last one week, we have seen a lot of depreciation in some of these currencies. I think Australian dollar depreciated by 2% in the last one week itself. So given that we are saying we cannot take a call on how the currency would move in the next three months. We gave a guidance of 7-9% as of October 10^th based on September 30^th exchange rate and we are sticking to that guidance based on the numbers that we see today.

�

Pravin Rao

�

On the attrition front, I think, from a LTM basis, it has marginally increased from 20.1% to 20.4%. But from an absolute headcount perspective, we are seeing 12% reduction in attrition as compared to Q2. Q2 number itself was 5% lower than Q1. From that perspective, we believe that it is trending in the right direction. I have consistently maintained in the last quarter as well that it will take a few quarters for things to stabilize. What we are watching out is the trend. We also continue to focus on employee engagement, employee outreach program and we will continue to do that, but it will take time. It will take a few more quarters. It is a very competitive market. There has been a lot of demand for hot skills, particularly with Infosys with its training programs and other things, I think the employees in Infosys have a pretty big demand in the market, particularly people who have been trained and so on. There are various reasons for it but we believe that many of the efforts we have taken have started yielding dividends. It will probably take a few more quarters for it to come back to where we believe it should be.

�

Rajiv Bansal

�

I will just add here. If you look at the absolute numbers when you are saying the initiatives that we have taken are not paying off. The attrition in absolute terms for IL alone has fallen from 7400 odd people to 6000 people in two quarters. So attrition is down, on an annualized basis, attrition is down from 21.1% last quarter to 18.2% this quarter, there is a 3% drop in attrition in this quarter. So the initiatives that we have taken are paying off, we are in a right direction. But as Pravin said, we still have a way to go. We would like the attrition to be about 12% to 13%, but I think the initiatives we have taken are started paying off. But it is too early in the stage to talk where it is going to be.

�

Poornima Murali

�

Hi, this is Poornima from CNBC TV18. Could you elaborate on the deal pipeline going forward? And also you have had tie-ups with training centers to improve the sales team efficiencies, if you can elaborate on that? And my last question to you is, Dr. Sikka, in the analyst call last time, you did say that you will give quantitative targets for December quarter, if you can also elaborate on that? Thank you.

�

Vishal Sikka

�

In terms of the pipeline, the pipeline is very robust. Pravin already mentioned that, perhaps Pravin can add more color to that. To your second question, we have been working heavily on that on renewing our education, the way that we train. We have had a tremendous emphasis on education all along. We are a very distinguished learning company that values learning as a core capability for life. We have been redoubling on that over the last quarter. One of the initiatives that we have taken is to train our sales people using a very customized program from Stanford University Graduate School of Business. This is a very nice program that we are putting together, it will go into effect in March of this year. That will cover our senior management especially in the sales side. We are very excited about that. We are also preparing an online curriculum also with Stanford, both School of Business and Engineering, to cover everyone at Infosys. One of the things that we did in Q3 that we are very proud of, is roll out Design Thinking massively across the company. More than 9,000 people in Infosys have already been trained on Design Thinking. We did intensive programs covering more than two days each with the top 400 managers of Infosys. We are embracing Design Thinking, I expect that over the next few quarters everyone at Infosys will be touched by this thing. I believe it is fundamentally important for our future because I think that as we look into unchartered territories and helping our clients innovate on their new frontiers, new technologies, new ways of thinking like Design Thinking are necessary; as well as to get us out of this mindset of doing repetitive autonomous tasks and focusing on creativity and imagination on a massive scale.

�

Poornima Murali

�

My last question was during the Analyst Call last time you did say that you will give quantitative targets in the December quarter.

�

Vishal Sikka

�

April. Our statement has constantly been that, because we have been working on understanding the details of our strategy of renewing and new things in parallel, that n April we will provide more tangible guidance in particular on capital allocations and things like that.

�

Tariq

�

Hi, this is Tariq from Zee Media. How is the billing status going forward, is the company planning to revise the billing rates?

�

Pravin Rao

�

Pricing is stable. Obviously, it depends on sector but by and large it is stable. On a deal specific basis, anyway as Vishal calls in terms of ‘old generation services’, there is a lot pricing pressure. You have to go aggressively to win. But other than that I think it is fairly stable. only recent development is in the Energy sector, we are seeing a lot of pressure because of the drop in oil prices, otherwise by and large it is stable.

�

Participant

�

Just one follow-up question on the volume growth, it is the best volume growth in three years according to what you have said. How sustainable is this and were there any factors that helped you this particular quarter, because it is a seasonally weak quarter, yet you posted robust volumes, so is that sustainable going forward, if you can give me some perspective on that?

�

Vishal Sikka

�

Well, it was due to great performance and certainly our expectation is that we will continue to have great performance going forward.

�

Participant

�

Vishal, also wanted to understand from you, on the start-up initiatives, you were looking at a lot of them. Is there anything in the offering that we can see in terms of acquisitions or any significant tie-up and these startups doing work for Infosys going forward?

�

Vishal Sikka

�

Yes, for sure, there is nothing that I can announce right now. We had announced a partnership with DreamWorks Animation earlier and we are in the final discussions with them to invest in a joint venture that will help bring DreamWorks Technologies to other industries like Retail, digital manufacturing of physical goods. We are very excited about that, but please stay tuned for that over the next couple of weeks and you will see more on both these fronts.

�

Poornima Murali

�

Poornima from CNBC. Utilization is at an all-time high. How better can utilization get going forward? And also, how is the US growth because North America has grown significantly this quarter?

�

Pravin Rao

�

Utilization, historically we have been looking at about 78%, but this year we started targeting about 80% to 82%. That is where we are comfortable with at this stage. We expect to sustain it at this level. There may be some quarterly aberrations because next quarter we will have a massive influx of trainees coming from Mysore, so you could potentially find some drop in utilization, but overall this year we are targeting on an average 80% to 82%.

�

Vishal Sikka

�

Thank you very much.

�

Rajiv Bansal

�

Thank you.

��

�

Exhibit 99.9

Form of Advertisement

�

Infosys Limited

Regd. office: Electronics City, Hosur Road, Bangalore – 560 100, India

CIN : L85110KA1981PLC013115

Website: www.infosys.com

email: [email protected]

T: 91 80 2852 0261, F: 91 80 2852 0362�

��

Audited consolidated financial results of Infosys Limited and its subsidiaries for the quarter and nine months ended December 31, 2014 prepared in compliance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

�

(in crore, except share and per equity share data)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	�Nine months ended December 31,		Year ended March 31,
�	2014	2014	2013	2014	2013	2014
Revenues	�13,796	�13,342	�13,026	�39,908	�37,258	�50,133
Cost of sales	�8,462	�8,201	�8,321	�24,709	�24,024	�32,141
Gross profit	�5,334	�5,141	�4,705	�15,199	�13,234	�17,992
Selling and marketing expenses	�770	�769	�644	�2,205	�1,985	�2,625
Administrative expenses	�875	�889	�802	�2,611	�2,489	�3,326
Operating profit	�3,689	�3,483	�3,259	�10,383	�8,760	�12,041
Other income, net	�840	�877	�731	�2,546	�1,818	�2,669
Profit before income taxes	�4,529	�4,360	�3,990	�12,929	�10,578	�14,710
Income tax expense	�1,279	�1,264	�1,115	�3,697	�2,922	�4,062
Net profit	�3,250	�3,096	�2,875	�9,232	�7,656	�10,648
Paid-up equity share capital (par value 5/- each, fully paid)	�572	�286	�286	�572	�286	�286
Share premium, retained earnings and other components of equity ⁽¹⁾	�47,244	�47,244	�39,511	�47,244	�39,511	�39,511
Earnings per share (par value 5/- each)	�	�	�	�	�	�
�Basic	28.44	27.09	�25.16	�80.79	�66.99	93.17
�Diluted	28.44	27.09	�25.16	�80.79	�66.99	93.17
Total Public Shareholding ⁽²⁾	�	�	�	�	�	�
Number of shares	81,17,98,995	39,66,88,097	39,26,38,755	81,17,98,995	39,26,38,755	39,02,57,428
Percentage of shareholding	�70.68	�69.08	�68.37	�70.68	�68.37	�67.96
Promoters and Promoter Group Shareholding	�	�	�	�	�	�
Pledged / Encumbered	�	�	�	�	�	�
�Number of shares	�–	�–	�–	�–	�–	�–
�Percentage of shares (as a % of the total shareholding of promoter and promoter group)	�–	�–	�–	�–	�–	�–
�Percentage of shares (as a % of the total share capital of the Company)	�–	�–	�–	�–	�–	�–
Non-encumbered	�	�	�	�	�	�
�Number of shares	15,02,15,636	9,14,08,078	9,15,08,078	15,02,15,636	9,15,08,078	9,15,08,078
�Percentage of shares (as a % of the total shareholding of promoter and promoter group)	�100.00	�100.00	�100.00	�100.00	�100.00	�100.00
�Percentage of shares (as a % of the total share capital of the Company)	13.08	�15.92	�15.94	13.08	�15.94	�15.94

�

⁽¹⁾

Represents the previous accounting year balance as required under Clause 41 of the Listing Agreement.

⁽²⁾

Total Public Shareholding as defined under Clause 40A of the Listing Agreement excludes shares held by the founders and American Depository Receipt Holders and as at December 31, 2014, also excludes treasury shares.

�

The audited consolidated financial statements for the quarter and nine months ended December 31, 2014 have been taken on record by the Board of Directors at its meeting held on January 9, 2015. The statutory auditors have expressed an unqualified audit opinion. The information presented above is extracted from the audited consolidated financial statements. The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

�

Changes to the Board

The Board, at the meeting held on December 4, 2014, appointed Prof. John W. Etchemendy as an independent director effective December 4, 2014.

Dr. Omkar Goswami retired as a Member of the Board effective December 31, 2014. The Board placed on record its deep appreciation for the services rendered by him during his tenure as a director.

�

Mr. Parvatheesam K. will step down as the Chief Risk & Compliance Officer and Company Secretary effective January 10, 2015. The Board placed on record its deep appreciation for the services rendered by him during his tenure.

�

During the quarter ended June 30, 2014, based on internal and external technical evaluation, the management reassessed, with effect from April 1, 2014, the remaining useful life of assets primarily consisting of buildings and computers. Accordingly, the useful life of certain assets required change from previous estimates. If the group had continued with the previously assessed useful lives, charge for depreciation and cost of sales for the three months and nine months ended December 31, 2014 would have been higher by

101 crore and

356 crore, respectively on assets held at April 1, 2014.

�

The Company has allotted 57,42,36,166 fully paid up equity shares of face value

5/- each during the quarter ended December 31, 2014 pursuant to a bonus issue approved by the shareholders through postal ballot by capitalization of share premium. The record date fixed by the Board of Directors was December 3, 2014. Bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. Options granted under the stock option plan have been adjusted for bonus shares. The earnings per share has been adjusted for previous periods presented in accordance with IAS 33, Earnings per share.

�

Information on dividends for the quarter and nine months ended December 31, 2014

An Interim dividend of

30/- per equity share was declared on October 10, 2014 and paid on October 20, 2014. The interim dividend declared in the previous year was

20/- per equity share.

(in )

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	�Nine months ended December 31,		Year ended March 31,
�	2014	2014	2013	2014	2013	2014
Dividend per share (par value 5/- each)	�	�	�	�	�	�
Interim dividend	–	30.00	–	30.00	20.00	20.00
Final dividend	–	–	–	–	–	43.00
Total dividend	–	30.00	–	30.00	20.00	63.00

��

The final dividend of 43/- per equity share for fiscal 2014 was approved by the shareholders at the Annual General Meeting of the company held on June 14, 2014 and the same was paid on June 16, 2014.

�

Other information (Consolidated - Audited)

(in crore)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	�Nine months ended December 31,		Year ended March 31,
�	2014	2014	2013	2014	2013	2014
Staff costs	�7,546	�7,522	�7,346	�22,423	�21,563	�28,834
Items exceeding 10% of aggregate expenditure	�–	�–	�–	�–	�–	�–
Details of other income:	�	�	�	�	�	�
Interest income on deposits and certificates of deposit	�677	�644	�537	�1,935	�1,574	�2,156
Income from available-for-sale financial assets	�61	�70	�62	�210	�166	�224
Miscellaneous income, net	�19	�15	�12	�41	�31	�59
Gains/(losses) on foreign currency	�83	�148	�120	�360	�47	�230
Total	�840	�877	�731	�2,546	�1,818	�2,669

�

Audited financial results of Infosys Limited (Standalone Information)

(in crore)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	�Nine months ended December 31,		Year ended March 31,
�	2014	2014	2013	2014	2013	2014
Revenues	�12,192	�11,863	�11,534	�35,374	�32,975	�44,341
Profit before exceptional item and tax	�4,252	�4,169	�3,831	�12,216	�10,115	�14,002
Profit on transfer of business*	�–	�412	�–	�412	�–	�–
Profit before tax	�4,252	�4,581	�3,831	�12,628	�10,115	�14,002
Profit for the period	�3,055	�3,365	�2,735	�9,140	�7,311	�10,194

�

Note:	�	The audited results of Infosys Limited for the above mentioned periods are available on our website, www.infosys.com. The information above has been extracted from the audited financial statements as stated.
�*		Exceptional item pertains to profit on transfer of business to Edgeverve, a wholly owned subsidiary.

�

Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended December 31, 2014

�

Nature of complaints received	Opening balance	Additions	Disposal	Closing balance
Non-receipt of dividend / Annual Report related	�–	�130	�130	�–

�

10.

Segment reporting (IFRS Consolidated – Audited)

(in crore)

Particulars	Quarter ended December 31,	Quarter ended September 30,	Quarter ended December 31,	�Nine months ended December 31,		Year ended March 31,
�	2014	2014	2013	2014	2013	2014
Revenue by business segment	�	�	�	�	�	�
Financial Services and Insurance (FSI)	�4,032	�3,818	�3,814	�11,545	�10,949	�14,698
Manufacturing (MFG)	�3,039	�2,918	�2,809	�8,731	�8,044	�10,853
Energy & utilities, Communication and Services (ECS)	�2,245	�2,202	�2,049	�6,467	�5,857	�7,932
Retail, Consumer packaged goods and Logistics (RCL)	�2,184	�2,191	�2,205	�6,526	�6,214	�8,346
Life Sciences and Healthcare (LSH)	�981	�873	�897	�2,678	�2,555	�3,399
Growth Markets (GMU)	�1,315	�1,340	�1,252	�3,961	�3,639	�4,905
Total	�13,796	�13,342	�13,026	�39,908	�37,258	�50,133
Less: Inter-segment revenue	�–	�–	�–	�–	�–	�–
Net revenue from operations	�13,796	�13,342	�13,026	�39,908	�37,258	�50,133
Segment profit before tax, depreciation and non-controlling interests:	�	�	�	�	�	�
Financial Services and Insurance (FSI)	�1,213	�1,124	�1,146	�3,415	�3,160	�4,349
Manufacturing (MFG)	�753	�744	�646	�2,176	�1,747	�2,452
Energy & utilities, Communication and Services (ECS)	�667	�646	�564	�1,801	�1,641	�2,274
Retail, Consumer packaged goods and Logistics (RCL)	�671	�668	�636	�1,996	�1,594	�2,221
Life Sciences and Healthcare (LSH)	�287	�218	�204	�683	�544	�749
Growth Markets (GMU)	�363	�374	�425	�1,098	�1,089	�1,373
Total	�3,954	�3,774	�3,621	�11,169	�9,775	�13,418
Less: Other unallocable expenditure	�265	�291	�362	�786	�1,015	�1,377
Add: Unallocable other income	�840	�877	�731	�2,546	�1,818	�2,669
Profit before tax and non-controlling interests	�4,529	�4,360	�3,990	�12,929	�10,578	�14,710

��

Notes on segment information

�

Business segments

�

Effective quarter ended March 31, 2014, the Company reorganized its segments, consequent to which the business segments of the Company are as set out above. The previous period figures, extracted from the audited consolidated financial statements, have been presented after incorporating necessary reclassification adjustments pursuant to changes in the reportable segments.

�

Segmental capital employed

�

Assets and liabilities used in the Company'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.

�

�	By order of the Board
�	for Infosys Limited
�	�
Bangalore, India	Dr. Vishal Sikka
January 9, 2015	Chief Executive Officer and Managing Director

�

The Board has also taken on record the unaudited condensed consolidated results of Infosys Limited and its subsidiaries for the quarter and nine months ended December 31, 2014, 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 December 31,	Quarter ended September 30,	Quarter ended December 31,	�Nine months ended December 31,		Year ended March 31,
�	2014	2014	2013	2014	2013	2014
Revenues	2,218	2,201	2,100	6,552	6,157	8,249
Cost of sales	�1,360	�1,353	�1,341	�4,057	�3,974	�5,292
Gross profit	�858	�848	�759	�2,495	�2,183	�2,957
Net profit	�522	�511	�463	�1,515	�1,264	�1,751
Earnings per Equity Share	�	�	�	�	�	�
Basic	�0.46	�0.45	�0.41	�1.33	�1.11	�1.53
Diluted	�0.46	�0.45	�0.41	�1.33	�1.11	�1.53
Total assets	10,028	9,989	8,733	10,028	8,733	9,522
Cash and cash equivalents including available-for-sale financial assets (current) and certificates of deposit	5,319	5,232	4,236	5,319	4,236	4,841

�

Certain statements in this advertisement concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2014 and our Forms 6-K for the quarters ended June 30, 2014 and September 30, 2014. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that the date of this advertisement is January 9, 2015, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. 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.

�

Exhibit 99.10

IFRS USD Earnings Release

�

Infosys Limited and Subsidiaries

�

Unaudited Condensed Consolidated Interim Balance Sheets as of

�

(Dollars in millions except equity share data)

�	Note	December 31, 2014	March 31, 2014
ASSETS	�	�	�
Current assets	�	�	�
Cash and cash equivalents	2.1	�5,080	4,331
Available-for-sale financial assets	2.2	�239	367
Investment in certificates of deposit	�	–	143
Trade receivables	�	�1,437	1,394
Unbilled revenue	�	�465	469
Prepayments and other current assets	2.4	�438	440
Derivative financial instruments	2.7	�5	36
Total current assets	�	�7,664	7,180
Non-current assets	�	�	�
Property, plant and equipment	2.5	�1,385	1,316
Goodwill	2.6	�330	360
Intangible assets	�	�45	57
Available-for-sale financial assets	2.2	�214	208
Deferred income tax assets	�	�99	110
Income tax assets	�	�253	254
Other non-current assets	2.4	�38	37
Total Non-current assets	�	�2,364	2,342
Total assets	�	�10,028	9,522
LIABILITIES AND EQUITY	�	�	�
Current liabilities	�	�	�
Trade payables	�	�28	29
Derivative financial instruments	2.7	�5	–
Current income tax liabilities	�	�421	365
Client deposits	�	�4	6
Unearned revenue	�	�139	110
Employee benefit obligations	�	�165	159
Provisions	2.8	�71	63
Other current liabilities	2.9	�962	792
Total current liabilities	�	�1,795	1,524
Non-current liabilities	�	�	�
Deferred income tax liabilities	�	�8	11
Other non-current liabilities	2.9	�10	54
Total liabilities	�	�1,813	1,589
Equity	�	�	�
Share capital - 5 ($0.16) par value 1200,000,000 (600,000,000) equity shares authorized, issued and outstanding 1142,805,132 (571,402,566) net of 5,667,200 (2,833,600) treasury shares, as of December 31, 2014 (March 31, 2014), respectively	�	�109	64
Share premium	�	�659	704
Retained earnings	�	�9,592	8,892
Other components of equity	�	�(2,145)	(1,727)
Total equity attributable to equity holders of the company	�	�8,215	7,933
Non-controlling interests	�	–	–
Total equity	�	�8,215	7,933
Total liabilities and equity	�	�10,028	9,522
Commitments and contingent liabilities	2.5, 2.8, 2.12 and 2.16	�	�

��

The accompanying notes form an integral part of the unaudited condensed consolidated interim financial statements

�

Infosys Limited and Subsidiaries

�

Unaudited Condensed Consolidated Interim Statements of Comprehensive Income

�

(Dollars in millions except share and per equity share data)

�	Note	Three months ended December 31,		Nine months ended December 31,
�	�	2014	2013	2014	2013
Revenues	�	�2,218	�2,100	�6,552	6,157
Cost of sales	2.18	�1,360	�1,341	�4,057	3,974
Gross profit	�	�858	�759	�2,495	2,183
Operating expenses:	�	�	�	�	�
Selling and marketing expenses	2.18	�124	�104	�362	327
Administrative expenses	2.18	�142	�129	�430	411
Total operating expenses	�	�266	�233	�792	738
Operating profit	�	�592	�526	�1,703	1,445
Other income, net	�	�136	�117	�419	301
Profit before income taxes	�	�728	�643	�2,122	1,746
Income tax expense	2.12	�206	�180	�607	482
Net profit	�	�522	�463	�1,515	1,264
Other comprehensive income	�	�	�	�	�
Items that will not be reclassified to profit or loss:	�	�	�	�	�
Re-measurements of the net defined benefit liability/asset	�	�(2)	�4	�(6)	10
�	�	�(2)	�4	�(6)	10
Items that may be reclassified subsequently to profit or loss:	�	�	�	�	�
Fair value changes on available-for-sale financial assets	2.2	�8	�(10)	�16	(14)
Exchange differences on translation of foreign operations	�	�(169)	�91	�(428)	(844)
�	�	�(161)	�81	�(412)	(858)
Total other comprehensive income, net of tax	�	�(163)	�85	�(418)	(848)
Total comprehensive income	�	�359	�548	�1,097	416
Profit attributable to:	�	�	�	�	�
Owners of the company	�	�522	�463	�1,515	1,264
Non-controlling interests	�	–	–	–	–
�	�	�522	�463	�1,515	1,264
Total comprehensive income attributable to:	�	�	�	�	�
Owners of the company	�	�359	�548	�1,097	416
Non-controlling interests	�	�–	�–	�–	–
�	�	�359	�548	�1,097	416
Earnings per equity share	�	�	�	�	�
�Basic ($)	�	�0.46	�0.41	�1.33	1.11
�Diluted ($)	�	�0.46	�0.41	�1.33	1.11
Weighted average equity shares used in computing earnings per equity share	2.13	�	�	�	�
�Basic	�	�1,142,805,132	�1,142,805,132	�1,142,805,132	1,142,805,132
�Diluted	�	�1,142,827,396	�1,142,805,132	�1,142,815,423	1,142,805,132

�

The accompanying notes form an integral part of the unaudited condensed consolidated interim financial statements

�

Infosys Limited and Subsidiaries�

�

Unaudited Condensed Consolidated Interim Statements of Changes in Equity

�

(Dollars in millions except equity share data)�

�	Shares(*)	Share capital	Share premium	Retained earnings	Other components of equity	Total equity attributable to equity holders of the company
Balance as of April 1, 2013	�571,402,566	64	704	7,666	�(1,103)	7,331
Changes in equity for the nine months ended December 31, 2013	�	�	�	�	�	�
Remeasurement of the net defined benefit liability/(asset), net of tax effect (Refer Note 2.12)	–	�–	�–	�–	�10	10
Change in accounting policy -Adoption of Revised IAS 19	�–	�–	�–	�(6)	�9	3
Dividends (including corporate dividend tax)	�–	�–	�–	�(519)	�–	(519)
Fair value changes on available-for-sale financial assets, net of tax effect (Refer Note 2.2 and 2.12)	�–	�–	�–	�–	�(14)	(14)
Net profit	�–	�–	�–	�1,264	�–	1,264
Exchange differences on translation of foreign operations	�–	�–	�–	�–	�(844)	(844)
Balance as of December 31, 2013	�571,402,566	64	704	8,405	�(1,942)	7,231
Balance as of April 1, 2014	�571,402,566	64	704	8,892	�(1,727)	7,933
Changes in equity for the nine months ended December 31, 2014	�	�	�	�	�	�
Increase in share capital on account of bonus issue ^# (Refer Note 2.20)	�571,402,566	�45	�–	�–	�–	45
Amount utilized for bonus issue ^# (Refer Note 2.20)	�–	�–	�(45)	�–	�–	(45)
Remeasurement of the net defined benefit liability/(asset), net of tax effect (Refer Note 2.12)	�–	�–	�–	�–	�(6)	(6)
Dividends (including corporate dividend tax)	�–	�–	�–	�(815)	�–	(815)
Fair value changes on available-for-sale financial assets, net of tax effect (Refer Note 2.2 and 2.12)	�–	�–	�–	�–	�16	16
Net profit	�–	�–	�–	�1,515	�–	1,515
Exchange differences on translation of foreign operations	�–	�–	�–	�–	�(428)	(428)
Balance as of December 31, 2014	�1,142,805,132	109	659	9,592	�(2,145)	8,215

�

net of treasury shares

excludes treasury shares of 5,667,200 as of December 31, 2014 and 2,833,600 each as of April 1, 2014, December 31, 2013 and April 1, 2013, held by consolidated trust

�

The accompanying notes form an integral part of the unaudited condensed consolidated interim financial statements

�

Infosys Limited and Subsidiaries

�

Unaudited Condensed Consolidated Interim Statements of Cash Flows

(Dollars in millions)

�	Nine months ended December 31,
�	2014	2013
Operating activities:	�	�
Net Profit	�1,515	1,264
Adjustments to reconcile net profit to net cash provided by operating activities :	�	�
Depreciation and amortisation	�129	168
Income from available-for-sale financial assets and certificates of deposit	�(40)	(31)
Income tax expense	�607	482
Effect of exchange rate changes on assets and liabilities	�8	10
Deferred purchase price	�29	22
Provisions for doubtful trade receivable	�22	16
Other non-cash item	�10	–
Changes in Working Capital	�	�
Trade receivables	�(138)	(323)
Prepayments and other assets	–	(10)
Unbilled revenue	�(20)	(30)
Trade payables	�3	9
Client deposits	�(3)	2
Unearned revenue	�36	9
Other liabilities and provisions	�164	297
Cash generated from operations	2,322	1,885
Income taxes paid	�(542)	(475)
Net cash provided by operating activities	�1,780	1,410
Investing activities:	�	�
Expenditure on property, plant and equipment, net of sale proceeds, including changes in retention money and capital creditors	�(261)	(322)
Loans to employees	–	(1)
Deposits placed with corporation	�(1)	(26)
Income from available-for-sale financial assets and certificates of deposit	�47	27
Investment in quoted debt securities	–	(155)
Redemption of certificates of deposit	�136	74
Investment in certificates of deposit	–	(181)
Investment in liquid mutual funds	�(2,756)	(2,788)
Redemption of liquid mutual funds	�2,870	2,654
Investment in fixed maturity plan securities	�(5)	(5)
Redemption of fixed maturity plan securities	�5	–
Net cash used in investing activities	�35	(723)
Financing activities:	�	�
Payment of dividend (including corporate dividend tax)	�(815)	(519)
Net cash used in financing activities	�(815)	(519)
Effect of exchange rate changes on cash and cash equivalents	�(251)	(477)
Net increase/(decrease) in cash and cash equivalents	�1,000	168
Cash and cash equivalents at the beginning	�4,331	4,021
Cash and cash equivalents at the end	�5,080	3,712
Supplementary information:	�	�
Restricted cash balance	�57	52

�

The accompanying notes form an integral part of the unaudited condensed consolidated interim financial statements

�

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

�

1. Company Overview and Significant Accounting Policies

�

1.1 Company overview�

�

Infosys Limited (Infosys or the company) along with its controlled trusts, Infosys Limited Employees' Welfare Trust and Infosys Science Foundation, majority owned and controlled subsidiary, Infosys BPO Limited (Infosys BPO) and its wholly owned and controlled subsidiaries, and wholly owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited (Infosys Australia), Infosys Technologies (China) Co. Limited (Infosys China), Infosys Technologies S. DE R.L. de C.V. (Infosys Mexico), Infosys Technologies (Sweden) AB (Infosys Sweden), Infosys Tecnologia do Brasil Ltda (Infosys Brasil), Infosys Public Services, Inc., (Infosys Public Services), Infosys Americas Inc., (Infosys Americas), Edgeverve Systems Limited (Edgeverve), Infosys Technologies (Shanghai) Company Limited (Infosys Shanghai) and Lodestone Holding AG and its controlled subsidiaries (Infosys Lodestone) is a leading global services company. The Infosys group of companies (the Group) provides business consulting, technology, engineering and outsourcing services. In addition, the Group offers software products and platforms.

�

The company is a public limited company incorporated and domiciled in India and has its registered office at Bangalore, Karnataka, India. The company has its primary listings on the Bombay Stock Exchange and National Stock Exchange in India. The company’s American Depositary Shares representing equity shares are also listed on the New York Stock Exchange (NYSE), NYSE Euronext London and NYSE Euronext Paris.

�

1.2 Basis of preparation of financial statements

�

These condensed consolidated interim financial statements have been prepared in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS) and in accordance with IAS 34, Interim Financial Reporting, under the historical cost convention on the accrual basis except for certain financial instruments and prepaid gratuity benefits which have been measured at fair values. Accordingly, these condensed consolidated interim financial statements do not include all the information required for a complete set of financial statements. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and related notes included in the company’s Annual Report on Form 20-F for the year ended March 31, 2014. Accounting policies have been applied consistently to all periods presented in these unaudited condensed consolidated interim financial statements.

�

1.3 Basis of consolidation

�

Infosys consolidates entities which it owns or controls. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

�

The financial statements of the Group companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. These financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the company, are excluded.

�

1.4 Use of estimates

�

The preparation of the financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 1.5. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated interim financial statements.

�

1.5 Critical accounting estimates

�

a. Revenue recognition

�

The company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

�

b. Income taxes

�

The company's two major tax jurisdictions are India and the U.S., though the company also files tax returns in other overseas jurisdictions. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

�

c. Business combinations and intangible assets

�

Business combinations are accounted for using IFRS 3 (Revised), Business Combinations. IFRS 3 requires the identifiable intangible assets and contingent consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets. These valuations are conducted by independent valuation experts.

�

d. Property, plant and equipment

�

Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group's assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

�

1.6 Property, plant and equipment

�

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The group depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

�

Building	22-25 years
Plant and machinery	5 years
Computer equipment	3-5 years
Furniture and fixtures	5 years
Vehicles	5 years

�

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end. (Refer note 2.5)

�

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of comprehensive income when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in net profit in the statement of comprehensive income. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.

�

1.7 Business combinations

�

Business combinations have been accounted for using the acquisition method under the provisions of IFRS 3 (Revised), Business Combinations.

�

The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Group. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.

�

Business combinations between entities under common control by formation of a new company is outside the scope of IFRS 3 (Revised), Business Combinations and is accounted for at carrying value.

�

Transaction costs that the Group incurs in connection with a business combination such as finders’ fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

�

1.8 Employee benefits

�

1.8.1 Gratuity

�

Infosys provides for gratuity, a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment.

�

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method. The company fully contributes all ascertained liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). In case of Infosys BPO and Edgeverve, contributions are made to the Infosys BPO's Employees' Gratuity Fund Trust and Edgeverve Systems Limited Employees' Gratuity Fund Trust. Trustees administer contributions made to the Trusts and contributions are invested in a scheme with Life Insurance Corporation as permitted by law of India.

�

The group has adopted Revised IAS 19 effective April 1, 2013. Pursuant to this adoption, the Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. The amended standard requires immediate recognition of the gains and losses through re-measurements of the net defined benefit liability/ (asset) through other comprehensive income. Further it also requires the interest expense (income) considered in the Profit and Loss to be restricted to the discount rate based on the Government securities yield. The actual return of the portfolio, in excess of such yields is recognized through the other comprehensive income. The Revised IAS 19 also requires effect of any plan amendments to be recognized immediately through the net profits, in the statement of comprehensive income.

�

Previously, the actuarial gains and losses were charged or credited to net profit in the statement of comprehensive income in the period in which they arose and the expected return on plan assets computed based on market expectations were considered as part of the net gratuity cost.

�

The adoption of Revised IAS 19 Employee Benefits did not have a material impact on the consolidated financial statements.

�

1.8.2 Superannuation

�

Certain employees of Infosys are also participants in a defined contribution plan. The company has no further obligations to the Plan beyond its monthly contributions. Certain employees of Infosys BPO are also eligible for superannuation benefit. Infosys BPO has no further obligations to the superannuation plan beyond its monthly contribution which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India. Certain employees of Edgeverve are also participants in the Edgeverve Systems Limited Employees Superannuation Fund Trust ('the Plan') which is a defined contribution plan. The Company has no obligations to the Plan beyond its monthly contributions.

�

1.8.3 Provident fund

�

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The company contributes a part of the contributions to the Infosys Limited Employees' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

�

In respect of Infosys BPO, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Infosys BPO make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The company has no further obligation to the plan beyond its monthly contributions.

�

In respect of Edgeverve Systems Limited, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and the Company make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a Government administered provident fund. The Company has no further obligations under the provident fund plan beyond its monthly contributions.

�

1.8.4 Compensated absences

�

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation using the projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

�

1.8.5 Share - based compensation

�

The Group recognizes compensation expense relating to share-based payments in net profit using a fair-value measurement method in accordance with IFRS 2, Share-Based Payment. Under the fair value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to securities premium.

�

1.9 Earnings per equity share

�

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

�

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

�

1.10�Recent accounting pronouncements

�

1.10.1 Standards issued but not yet effective

�

IFRS 9 Financial Instruments: In November 2009, the International Accounting Standards Board issued IFRS 9, Financial Instruments: Recognition and Measurement, to reduce the complexity of the current rules on financial instruments as mandated in IAS 39. IFRS 9 has fewer classification and measurement categories as compared to IAS 39 and has eliminated the categories of held to maturity, available for sale and loans and receivables. Further it eliminates the rule-based requirement of segregating embedded derivatives and tainting rules pertaining to held to maturity investments. For an investment in an equity instrument which is not held for trading, IFRS 9 permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognized in other comprehensive income would ever be reclassified to profit or loss. IFRS 9, was further amended in October 2010, and such amendment introduced requirements on accounting for financial liabilities. This amendment addresses the issue of volatility in the profit or loss due to changes in the fair value of an entity’s own debt. It requires the entity, which chooses to measure a liability at fair value, to present the portion of the fair value change attributable to the entity’s own credit risk in the other comprehensive income. The effective date for adoption of IFRS 9 is annual periods beginning on or after January 1, 2018, though early adoption is permitted. The Group is currently evaluating the requirements of IFRS 9, and has not yet determined the impact on the condensed consolidated interim financial statements.

�

IFRS 15 Revenue from Contract with Customers: In May 2014, the International Accounting Standards Board issued IFRS 15, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard permits the use of either the retrospective or cumulative effect transition method. The effective date for adoption of IFRS 15 is annual periods beginning on or after January 1, 2017, though early adoption is permitted. The Group has not yet selected a transition method and has not yet evaluated the impact of IFRS 15 on the consolidated financial statements.

�

2. Notes to the Unaudited Condensed Consolidated Interim Financial Statements

�

2.1 Cash and cash equivalents

�

Cash and cash equivalents consist of the following:

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Cash and bank deposits	�4,429	3,729
Deposits with corporations	�651	602
�	�5,080	4,331

�

Cash and cash equivalents as of December 31, 2014 and March 31, 2014 include restricted cash and bank balances of $57 million and $53 million, respectively. The restrictions are primarily on account of cash and bank balances held by irrevocable trusts controlled by the company, bank balances held as margin money deposits against guarantees and balances held in unpaid dividend bank accounts.

�

The deposits maintained by the Group with banks and corporations comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.

�

The table below provides details of cash and cash equivalents:

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Current accounts	�	�
ANZ Bank, Taiwan	�1	–
Banamex Bank, Mexico	�2	–
Bank of America, Mexico	�4	1
Bank of America, USA	�131	119
Barclays Bank, UK	�2	19
Cr�dit Industriel et Commercial Bank, France	�1	1
Citibank N.A., China	�10	9
China Merchants Bank	�1	–
Citibank N.A., EEFC (U.S. dollar account)	�1	–
Citibank N.A., Australia	�3	13
Citibank N.A., Brazil	�6	6
Citibank N.A., India	�–	1
Citibank N.A., Japan	�3	2
Citibank N.A., New Zealand	�1	1
Citibank N.A., South Africa	�–	1
Citibank N.A., Czech Republic	�1	–
Commerzbank, Germany	�8	1
Deutsche Bank, Belgium	�1	2
Deutsche Bank, Czech Republic	�1	–
Deutsche Bank, Czech Republic (Euro account)	�2	1
Deutsche Bank, Czech Republic (U.S. dollar account)	�2	2
Deutsche Bank, France	�2	1
Deutsche Bank, Germany	�6	6
Deutsche Bank, India	�1	1
Deutsche Bank, Netherlands	�1	3
Deutsche Bank, Philippines	�–	1
Deutsche Bank, Philippines (U.S. dollar account)	�1	5
Deutsche Bank, Poland	�1	–
Deutsche Bank, Russia (U.S. dollar account)	�–	2
Deutsche Bank, Singapore	�–	2
Deutsche Bank, Spain	�–	1
Deutsche Bank, Switzerland	�1	1
Deutsche Bank, United Kingdom	�10	12
Deutsche Bank-EEFC, India (Australian dollar account)	�4	1
Deutsche Bank-EEFC, India (Euro account)	�1	1
Deutsche Bank-EEFC, India (U.S. dollar account)	�3	11
Deutsche Bank-EEFC, India (U.K. Pound Sterling account)	�2	2
HSBC Bank, Brazil	�1	1
HSBC Bank, Hong kong	�7	–
ICICI Bank, India	�7	6
ICICI Bank-EEFC, India (U.S. dollar account)	�2	3
ING, Belgium	�1	1
Nordbanken, Sweden	�2	3
Punjab National Bank, India	�–	2
Royal Bank of Scotland, China	�9	6
Royal Bank of Canada, Canada	�6	4
Royal Bank of Scotland, China (U.S. dollar account)	�1	1
State Bank of India, India	�–	1
Union Bank of Switzerland, Switzerland	�4	–
Union Bank of Switzerland, Switzerland (U.S. dollar account)	�1	1
Union Bank of Switzerland, Switzerland (Euro account)	�1	–
Wells Fargo Bank N.A. USA	�8	–
Westpac, Australia	�1	1
	�265	259
Deposit accounts	�	�
Andhra Bank, India	147	126
Allahabad Bank, India	148	169
Axis Bank, India	176	180
Bank of Baroda, India	262	368
Bank of India, India	477	424
Canara Bank, India	370	393
Central Bank of India, India	251	260
Citibank N.A., China	�–	3
Corporation Bank, India	290	189
Deutsche Bank, Poland	25	21
HDFC, India	330	–
ICICI Bank, India	522	501
IDBI Bank, India	234	286
Indusind Bank, India	12	4
ING Vysya Bank, India	16	33
Indian Overseas Bank, India	168	120
Jammu and Kashmir Bank, India	�–	4
Kotak Mahindra Bank, India	9	4
National Australia Bank Limited, Australia	16	15
Oriental Bank of Commerce, India	251	15
Punjab National Bank, India	94	13
State Bank of India, India	9	10
South Indian Bank, India	�–	4
Syndicate Bank, India	96	144
Union Bank of India, India	12	3
Vijaya Bank, India	165	143
Yes Bank, India	84	38
�	�4,164	3,470
Deposits with corporations	�	�
HDFC Limited, India	�651	602
�	�651	602
Total	�5,080	4,331

�

2.2 Available-for-sale financial assets

�

Investments in mutual fund units, quoted debt securities and unquoted equity securities are classified as available-for-sale financial assets.

�

Cost and fair value of these investments are as follows

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Current	�	�
Mutual fund units:	�	�
Liquid mutual fund units	�	�
�Cost and fair value	�215	342
Fixed Maturity Plan Securities	�	�
�Cost	�23	24
�Gross unrealized holding gains	�1	1
�Fair value	�24	25
�	�239	367
Non-current	�	�
Quoted debt securities:	�	�
�Cost	�212	225
�Gross unrealized holding gains/(losses)	�1	(18)
�Fair value	�213	207
Unquoted equity securities:	�	�
�Cost	–	–
�Gross unrealized holding gains	�1	1
�Fair value	�1	1
�	�214	208
Total available-for-sale financial assets	�453	575

�

Mutual fund units:

�

Liquid mutual funds:

�

The fair value of liquid mutual funds as of December 31, 2014 and March 31, 2014 was $215 million and $342 million, respectively. The fair value is based on quoted prices.

�

Fixed maturity plan securities:

�

The fair value of fixed maturity plan securities as of December 31, 2014 and March 31, 2014 is $24 million and $25 million, respectively. The net unrealized gain of less than $1 million, net of taxes, has been recognized in other comprehensive income for each of the three months and nine months ended December 31, 2014. The unrealized gain of less than $1 million, net of taxes of less than $1 million has been recognized in other comprehensive income for the three months and nine months ended December 31, 2013 (Refer to note 2.12). The fair value is based on quotes reflected in actual transactions in similar instruments.

�

Quoted debt securities:

�

The fair value of quoted debt securities as of December 31, 2014 and March 31, 2014 was $213 million and $207 million, respectively. The net unrealized gain of $8 million, net of taxes of $1 million, has been recognized in other comprehensive income for the three months ended December 31, 2014. The net unrealized gain of $16 million, net of taxes $3 million, has been recognized in other comprehensive income for the nine months ended December 31, 2014.

�

The net unrealized loss of $10 million and $14 million, net of taxes of less than $1 million and $1 million, has been recognized in other comprehensive income for the three months and nine months ended December 31, 2013, respectively. The fair value is based on the quoted price. (Refer to note 2.12)

�

2.3 Edgeverve

�

Edgeverve was created as a wholly owned subsidiary to focus on developing and selling products and platforms. On April 15, 2014, the Board of Directors of Infosys has authorized the Company to execute a Business Transfer Agreement and related documents with Edgeverve, subject to securing the requisite approval from shareholders in the Annual General Meeting. Subsequently, at the AGM held on June 14, 2014, the shareholders have authorised the Board to enter into a Business Transfer Agreement and related documents with Edgeverve, with effect from July 1, 2014 or such other date as may be decided by the Board of Directors. The company has undertaken an enterprise valuation by an independent valuer and accordingly the business has been transferred for a consideration of $70 million with effect from July 1, 2014 which is settled through the issue of fully paid up equity shares.

�

The transfer of assets and liabilities is accounted for at carrying values and does not have any impact on the consolidated financial statements.

�

2.4 Prepayments and other assets

�

Prepayments and other assets consist of the following:

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Current	�	�
Rental deposits	�3	2
Security deposits	�1	2
Loans and advances to employees	�33	35
Prepaid expenses ⁽¹⁾	�12	19
Interest accrued and not due	�18	3
Withholding taxes ⁽¹⁾	�209	176
Deposit with corporation	�154	163
Advance payments to vendors for supply of goods ⁽¹⁾	�7	15
Premiums held in trust⁽²⁾	–	23
Other assets	�1	2
�	�438	440
Non-Current	�	�
Loans and advances to employees	�5	6
Security deposits	�11	10
Deposit with corporation	�9	7
Prepaid gratuity ⁽¹⁾	�4	2
Prepaid expenses ⁽¹⁾	�1	2
Rental Deposits	�8	10
�	�38	37
�	�476	477
Financial assets in prepayments and other assets	�243	263

�

⁽¹⁾

Non financial assets

⁽²⁾

Represents premiums collected from policyholders and payable to insurance providers by a service provider maintaining the amounts in a fiduciary capacity (Refer to Note 2.9)

�

Withholding taxes primarily consist of input tax credits. Other assets primarily represent travel advances and other recoverables. Security deposits relate principally to leased telephone lines and electricity supplies.

�

Deposit with corporation represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

�

2.5 Property, plant and equipment

�

Following are the changes in the carrying value of property, plant and equipment for the three months ended December 31, 2014:

(Dollars in millions)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of October 1, 2014	�248	�863	�301	�471	�173	�5	�266	2,327
Additions	�3	�36	�20	�43	�7	�1	–	110
Deletions	–	�–	�–	�(3)	�(1)	�–	�(16)	(20)
Translation difference	�(5)	�(17)	�(7)	�(10)	�(4)	�(1)	�(5)	(49)
Gross carrying value as of December 31, 2014	�246	�882	�314	�501	�175	�5	�245	2,368
Accumulated depreciation as of October 1, 2014	�(2)	�(305)	�(190)	�(343)	�(124)	�(3)	�–	(967)
Depreciation	�–	�(8)	�(10)	�(17)	�(5)	�(1)	�–	(41)
Accumulated depreciation on deletions	�–	�–	�–	�3	�1	�1	�–	5
Translation difference	�–	�7	�4	�7	�2	�–	�–	20
Accumulated depreciation as of December 31, 2014	�(2)	�(306)	�(196)	�(350)	�(126)	�(3)	�–	(983)
Carrying value as of December 31, 2014	�244	�576	�118	�151	�49	�2	�245	1,385
Carrying value as of October 1, 2014	�246	�558	�111	�128	�49	�2	�266	1,360

��

Following are the changes in the carrying value of property, plant and equipment for the three months ended December 31, 2013

(Dollars in millions)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of October 1, 2013	�151	�700	�216	�357	�146	�5	�322	1,897
Additions	�32	�44	�30	�34	�10	�–	�–	150
Deletions	�–	�–	�–	�(1)	�–	�(1)	�(26)	(28)
Translation difference	�1	�8	�2	�3	�2	�2	�5	23
Gross carrying value as of December 31, 2013	�184	�752	�248	�393	�158	�6	�301	2,042
Accumulated depreciation as of October 1, 2013	�–	�(262)	�(150)	�(259)	�(103)	�(3)	�–	(777)
Depreciation	�–	�(12)	�(8)	�(29)	�(5)	�(1)	�–	(55)
Accumulated depreciation on deletions	�–	�–	�–	�1	�–	�1	�–	2
Translation difference	�–	�(3)	�(3)	�(3)	�(1)	�–	�–	(10)
Accumulated depreciation as of December 31, 2013	�–	�(277)	�(161)	�(290)	�(109)	�(3)	�–	(840)
Carrying value as of December 31, 2013	�184	�475	�87	�103	�49	�3	�301	1,202
Carrying value as of October 1, 2013	�151	�438	�66	�98	�43	�2	�322	1,120

Following are the changes in the carrying value of property, plant and equipment for the nine months ended December 31, 2014

(Dollars in millions)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of April 1, 2014	�190	�839	�284	�444	�170	�6	�305	2,238
Additions	�67	�87	�48	�89	�18	�1	�14	324
Deletions	�–	�–	�(2)	�(8)	�(3)	�(1)	�(61)	(75)
Translation difference	�(11)	�(44)	�(16)	�(24)	�(10)	�(1)	�(13)	(119)
Gross carrying value as of December 31, 2014	�246	�882	�314	�501	�175	�5	�245	2,368
Accumulated depreciation as of April 1, 2014	�–	�(300)	�(175)	�(328)	�(117)	�(2)	�–	(922)
Depreciation	�(2)	�(23)	�(32)	�(45)	�(18)	�(1)	�–	(121)
Accumulated depreciation on deletions	�–	�–	�2	�6	�3	�1	�–	12
Translation difference	�–	�17	�9	�17	�6	�(1)	�–	48
Accumulated depreciation as of December 31, 2014	�(2)	�(306)	�(196)	�(350)	�(126)	�(3)	�–	(983)
Carrying value as of December 31, 2014	�244	�576	�118	�151	�49	�2	�245	1,385
Carrying value as of April 1, 2014	�190	�539	�109	�116	�53	�4	�305	1,316

�

Following are the changes in the carrying value of property, plant and equipment for the nine months ended December 31, 2013�

(Dollars in millions)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of April 1, 2013	�157	�773	�231	�347	�147	�5	�306	1,966
Additions	�48	�74	�45	�88	�24	�1	�60	340
Deletions	–	�–	�–	�(3)	�–	�(1)	�(26)	(30)
Translation difference	�(21)	�(95)	�(28)	�(39)	�(13)	�1	�(39)	(234)
Gross carrying value as of December 31, 2013	�184	�752	�248	�393	�158	�6	�301	2,042
Accumulated depreciation as of April 1, 2013	�–	�(275)	�(154)	�(240)	�(103)	�(3)	�–	(775)
Depreciation	�–	�(36)	�(26)	�(80)	�(16)	�(1)	�–	(159)
Accumulated depreciation on deletions	�–	�–	�–	�3	�–	�1	�–	4
Translation difference	�–	�34	�19	�27	�10	�–	�–	90
Accumulated depreciation as of December 31, 2013	�–	�(277)	�(161)	�(290)	�(109)	�(3)	�–	(840)
Carrying value as of December 31, 2013	�184	�475	�87	�103	�49	�3	�301	1,202
Carrying value as of April 1, 2013	�157	�498	�77	�107	�44	�2	�306	1,191

�

Following are the changes in the carrying value of property, plant and equipment for the year ended March 31, 2014:

(Dollars in millions)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of April 1, 2013	�157	�773	�231	�347	�147	�5	�306	1,966
Additions	�48	�136	�73	�125	�33	�2	�60	477
Deletions	�–	�–	�(1)	�(5)	�–	�(1)	�(30)	(37)
Translation difference	�(15)	�(70)	�(19)	�(23)	�(10)	�–	�(31)	(168)
Gross carrying value as of March 31, 2014	�190	�839	�284	�444	�170	�6	�305	2,238
Accumulated depreciation as of April 1, 2013	�–	�(275)	�(154)	�(240)	�(103)	�(3)	�–	(775)
Depreciation	�–	�(49)	�(35)	�(109)	�(21)	�–	�–	(214)
Accumulated depreciation on deletions	�–	�–	�–	�4	�–	�1	�–	5
Translation difference	�–	�24	�14	�17	�7	�–	�–	62
Accumulated depreciation as of March 31, 2014	�–	�(300)	�(175)	�(328)	�(117)	�(2)	�–	(922)
Carrying value as of March 31, 2014	�190	�539	�109	�116	�53	�4	�305	1,316
Carrying value as of April 1, 2013	�157	�498	�77	�107	�44	�2	�306	1,191

�

During the three months ended June 30, 2014, based on internal and external technical evaluation, management reassessed the remaining useful life of assets primarily consisting of buildings and computers with effect from April 1, 2014. Accordingly the useful lives of certain assets required a change from the previous estimates.

�

The existing and revised useful lives are as below:

�

Category of assets	Earlier useful life (Years)	Current useful life (Years)
Building	15	22-25
Plant and machinery	5	5
Computer equipment	2-5	3-5
Furniture and fixtures	5	5
Vehicles	5	5

�

Had the Group continued with the previously assessed useful lives, charge for depreciation and cost of sales for the three months and nine months ended December 31, 2014 would have been higher by $16 million and $59 million, respectively for assets held at April 1, 2014. The revision of the useful lives will result in the following changes in the depreciation expense as compared to the original useful life of the assets:

(Dollars in millions)

Particulars	Fiscal 2015	Fiscal 2016	After Fiscal 2016
Increase /(decrease) in depreciation expense	�(72)	�(24)	96

�

The depreciation expense is included in cost of sales in the condensed consolidated interim statement of comprehensive income.

�

Carrying value of land includes $97 million and $60 million as of December 31, 2014 and March 31, 2014, respectively, towards deposits paid under certain lease-cum-sale agreements to acquire land, including agreements where the company has an option to purchase or renew the properties on expiry of the lease period.

�

The contractual commitments for capital expenditure were $241 million and $227 million as of December 31, 2014 and March 31, 2014, respectively.

�

2.6 Goodwill

�

Following is a summary of changes in the carrying amount of goodwill:

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Carrying value at the beginning	�360	364
Translation differences	�(30)	(4)
Carrying value at the end	�330	360

�

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash generating units (CGU) or groups of CGU’s, which are benefiting from the synergies of the acquisition. The chief operating decision maker reviews the goodwill for any impairment at the operating segment level, which is represented through groups of CGU’s.

�

Effective quarter ended March 31, 2014, the company reorganized its business to strengthen its focus on growing existing client relationships and increasing market share through service differentiation and operational agility. Consequent to the internal reorganization there were changes effected in the segments based on the “management approach” as defined in IFRS 8, Operating Segments. (Refer Note 2.15). Accordingly the goodwill has been allocated to the new operating segments.

�

The following table presents the allocation of goodwill to operating segments:

(Dollars in millions)

Segment	As of
�	December 31, 2014	March 31, 2014
Financial services	68	75
Insurance	48	50
Manufacturing	69	76
Energy, communication and services	32	35
Resources & utilities	15	16
Life sciences and Healthcare	20	22
Retail, consumer packaged goods and logistics	49	54
Growth markets	29	32
Total	330	360

�

The entire goodwill relating to Infosys BPO’s acquisition of McCamish has been allocated to the group of CGU’s which is represented by the 'Insurance' segment.

�

The goodwill relating to Infosys Lodestone and Portland acquisitions has been allocated to the groups of CGU’s which are represented by the entity’s operating segments.

�

The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. The fair value of a CGU is determined based on the market capitalization. The value-in-use is determined based on specific calculations. These calculations use pre-tax cash flow projections over a period of five years, based on financial budgets approved by management and an average of the range of each assumption mentioned below. As of March 31, 2014, the estimated recoverable amount of the CGU exceeded its carrying amount. The recoverable amount was computed based on the fair value being higher than value-in-use and the carrying amount of the CGU was computed by allocating the net assets to operating segments for the purpose of impairment testing. The key assumptions used for the calculations are as follows:

�

�	In %
Long term growth rate	8-10
Operating margins	17-20
Discount rate	13.2

�

The above discount rate is based on the Weighted Average Cost of Capital (WACC) of the Company. These estimates are likely to differ from future actual results of operations and cash flows.

�

2.7 Financial instruments

�

Financial instruments by category

�

The carrying value and fair value of financial instruments by categories as of December 31, 2014 were as follows:

�

(Dollars in millions)

�	Loans and receivables	Financial assets/liabilities at fair value through profit and loss	Available for sale	Trade and other payables	Total carrying value/fair value
Assets:	�	�	�	�	�
Cash and cash equivalents (Refer to Note 2.1)	�5,080	–	–	�–	5,080
Available-for-sale financial assets (Refer to Note 2.2)	�–	�–	�453	�–	453
Trade receivables	�1,437	�–	�–	�–	1,437
Unbilled revenue	�465	�–	�–	�–	465
Prepayments and other assets (Refer to Note 2.4)	�243	�–	�–	�–	243
Derivative financial instruments	�–	�5	�–	�–	5
Total	�7,225	�5	�453	�–	7,683
Liabilities:	�	�	�	�	�
Trade payables	�–	�–	�–	�28	28
Derivative financial instruments	�–	�5	�–	�–	5
Client deposits	�–	�–	�–	�4	4
Employee benefit obligation	�–	�–	�–	�165	165
Other liabilities (Refer note 2.9)	�–	�–	�–	�778	778
Total	�–	�5	�–	�975	980

�

The carrying value and fair value of financial instruments by categories as of March 31, 2014 were as follows:

�

(Dollars in millions)

�	Loans and receivables	Financial assets/liabilities at fair value through profit and loss	Available for sale	Trade and other payables	Total carrying value/fair value
Assets:	�	�	�	�	�
Cash and cash equivalents (Refer to Note 2.1)	4,331	–	–	–	4,331
Available-for-sale financial assets (Refer to Note 2.2)	–	–	575	–	575
Investment in certificates of deposit	143	–	–	–	143
Trade receivables	1,394	–	–	–	1,394
Unbilled revenue	469	–	–	–	469
Prepayments and other assets	263	–	–	–	263
Derivative financial instruments	–	36	–	–	36
Total	6,600	36	575	–	7,211
Liabilities:	�	�	�	�	�
Trade payables	–	–	–	29	29
Client deposits	–	–	–	6	6
Employee benefit obligation	–	–	–	159	159
Other liabilities (Refer note 2.9)	–	–	–	687	687
Total	–	–	–	881	881

�

Fair value hierarchy

�

Level 1 -

Quoted prices (unadjusted) in active markets for identical assets or liabilities.

�

Level 2 -

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

�

Level 3 -

Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

�

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014:

(Dollars in millions)

�	As of December 31, 2014	Fair value measurement at end of the reporting period using
�	�	�Level 1	Level 2	Level 3
Assets	�	�	�	�
Available- for- sale financial asset- Investments in liquid mutual fund units (Refer to Note 2.2)	�215	�215	–	–
Available- for- sale financial asset- Investments in fixed maturity plan securities (Refer to Note 2.2)	�24	�–	�24	–
Available- for- sale financial asset- Investments in quoted debt securities (Refer to Note 2.2)	�213	�213	�–	–
Available- for- sale financial asset- Investments in unquoted equity instruments (Refer to Note 2.2)	�1	�–	�1	–
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	�5	�–	�5	–
Liabilities	�	�	�	�
Derivative financial instruments- loss on outstanding foreign exchange forward and option contracts	�5	�–	�5	–

�

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2014:

(Dollars in millions)

�	As of March 31, 2014	Fair value measurement at end of the reporting period using
�	�	�Level 1	Level 2	Level 3
Assets	�	�	�	�
Available- for- sale financial asset- Investments in liquid mutual fund units (Refer to Note 2.2)	�342	�342	–	–
Available- for- sale financial asset- Investments in fixed maturity plan securities (Refer to Note 2.2)	�25	–	�25	–
Available- for- sale financial asset- Investments in quoted debt securities (Refer to Note 2.2)	�207	�207	–	–
Available- for- sale financial asset- Investments in unquoted equity instruments (Refer to Note 2.2)	�1	–	�1	–
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	�36	–	�36	–

�

Income from financial assets or liabilities that are not at fair value through profit or loss is as follows

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Interest income on deposits and certificates of deposit	�109	�87	�318	261
Income from available-for-sale financial assets	�9	�9	�34	27
�	�118	�96	�352	288

�

Derivative financial instruments

�

The company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace. The following table gives details in respect of outstanding foreign exchange forward and options contracts:

(In millions)

�	As of
�	December 31, 2014	March 31, 2014
Forward contracts	�	�
In U.S. dollars	741	751
In Euro	68	64
In United Kingdom Pound Sterling	73	77
In Australian dollars	90	75
Option contracts	�	�
In U.S. dollars	�65	20

�

The Group recognized a net gain on derivative financial instruments of $9 million and $39 million for the three months ended December 31, 2014 and December 31, 2013, respectively, which is included under other income.

�

The Group recognized a net gain on derivative financial instruments of $36 million and a net loss on derivative financial instruments of $89 million for the nine months ended December 31, 2014 and December 31, 2013, respectively, which is included under other income.

�

The foreign exchange forward and option contracts mature within 12 months. The table below analyses the derivative financial instruments into relevant maturity groupings based on the remaining period as of the balance sheet date:

�

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Not later than one month	�256	�198
Later than one month and not later than three months	�502	�467
Later than three months and not later than one year	�318	�393
�	�1,076	�1,058

�

Financial risk management

�

Financial risk factors

�

The Group's activities expose it to a variety of financial risks - market risk, credit risk and liquidity risk. The Group's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Group is foreign exchange risk. The Group uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Group's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The demographics of the customer including the default risk of the industry and country in which the customer operates also has an influence on credit risk assessment.

�

Market risk

�

The Group operates internationally and a major portion of the business is transacted in several currencies and consequently the Group is exposed to foreign exchange risk through its sales and services in the United States and elsewhere, and purchases from overseas suppliers in various foreign currencies. The Group uses derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Group’s operations are adversely affected as the Indian rupee appreciates / depreciates against these currencies.

�

�The following table gives details in respect of the outstanding foreign exchange forward and option contracts:

�

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Aggregate amount of outstanding forward and option contracts	�1,076	1,058
Gain on outstanding forward and option contracts	�5	36
Loss on outstanding forward and option contracts	�5	–

�

The outstanding foreign exchange forward and option contracts as of December 31, 2014 and March 31, 2014, mature within twelve months.

�

The following table analyses foreign currency risk from financial instruments as of December 31, 2014:

�

(Dollars in millions)

�	U.S. dollars	Euro	United Kingdom Pound Sterling	Australian dollars	Other currencies	Total
Cash and cash equivalents	�149	�23	�14	�23	�87	296
Trade receivables	�945	�190	�85	�79	�84	1,383
Unbilled revenue	�279	�54	�21	�24	�36	414
Other assets	�12	�4	�2	�2	�11	31
Trade payables	�(9)	�(2)	–	�(1)	�(12)	(24)
Client deposits	�(2)	�–	–	–	�(2)	(4)
Accrued expenses	�(109)	�(24)	�(11)	�(4)	�(24)	(172)
Employee benefit obligation	�(67)	�(7)	�(6)	�(23)	�(16)	(119)
Other liabilities	�(98)	�(18)	�(7)	�(9)	�(91)	(223)
Net assets / (liabilities)	�1,100	�220	�98	�91	�73	1,582

�

The following table analyses foreign currency risk from financial instruments as of March 31, 2014:

(Dollars in millions)

�	U.S. dollars	Euro	United Kingdom Pound Sterling	Australian dollars	Other currencies	Total
Cash and cash equivalents	�144	�17	�33	�30	�63	287
Trade receivables	�898	�182	�102	�87	�75	1,344
Unbilled revenue	�271	�64	�22	�32	�41	430
Other assets	�12	�6	�2	�2	�9	31
Trade payables	�(3)	�(3)	�(2)	–	�(16)	(24)
Client deposits	�(3)	�(3)	�–	�–	–	(6)
Accrued expenses	�(127)	�(26)	�(10)	�(6)	�(31)	(200)
Employee benefit obligation	�(64)	�(12)	�(7)	�(22)	�(16)	(121)
Other liabilities	�(75)	�(5)	�–	�(9)	�(50)	(139)
Net assets / (liabilities)	�1,053	�220	�140	�114	�75	1,602

�

For the three months ended December 31, 2014 and December 31, 2013, every percentage point depreciation / appreciation in the exchange rate between the Indian rupee and the U.S. dollar has affected the company's incremental operating margins by approximately 0.52% and 0.46%, respectively.

�

For the nine months ended December 31, 2014 and December 31, 2013, every percentage point depreciation / appreciation in the exchange rate between the Indian rupee and the U.S. dollar has affected the company's incremental operating margins by approximately 0.53% and 0.46%, respectively.

�

Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting period and the current reporting period.

�

Credit risk

�

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to $1,437 million and $1,394 million as of December 31, 2014 and March 31, 2014, respectively and unbilled revenue amounting to $465 million and $469 million as of December 31, 2014 and March 31, 2014, respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in the United States. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Group grants credit terms in the normal course of business.

�

The following table gives details in respect of percentage of revenues generated from top customer and top five customers:

(In %)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Revenue from top customer	3.2	3.7	3.3	3.9
Revenue from top five customers	13.3	14.1	13.5	14.5

�

Financial assets that are neither past due nor impaired

�

Cash and cash equivalents and available-for-sale financial assets are neither past due nor impaired. Cash and cash equivalents include deposits with banks and corporations with high credit-ratings assigned by international and domestic credit-rating agencies. Available-for-sale financial assets include investment in mutual fund units, quoted debt securities and unquoted equity securities. Certificates of deposit represent funds deposited at a bank or other eligible financial institution for a specified time period. Investment in quoted debt securities represents the investments made in debt securities issued by government and quasi government organizations. Of the total trade receivables, $1,050 million and $1,064 million as of December 31, 2014 and March 31, 2014, were neither past due nor impaired.

�

There is no other class of financial assets that is not past due but impaired except for trade receivables of $4 million and $3 million as of December 31, 2014 and March 31, 2014, respectively.

�

Financial assets that are past due but not impaired

The group’s credit period generally ranges from 30-60 days. The age analysis of the trade receivables have been considered from the due date. The age wise break up of trade receivables, net of allowances of $50 million and $33 million as of December 31, 2014 and March 31, 2014, respectively, that are past due, is given below:

�

(Dollars in millions)

�	As of
Period (in days)	December 31, 2014	March 31, 2014
Less than 30	�248	229
31 – 60	�72	42
61 – 90	�35	21
More than 90	�32	38
�	�387	330

�

The reversal of provision for doubtful trade receivable for the three months ended December 31, 2014 was $6 million. The provision for doubtful trade receivables for the nine months ended December 31, 2014 was $22 million.

�

The provision for doubtful trade receivable for the three months and nine months ended December 31, 2013 was $3 million and $16 million, respectively.

�

The movement in the provisions for doubtful trade receivable is as follows:

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,		Year ended March 31,
�	2014	2013	2014	2013	2014
Balance at the beginning	�62	�26	�36	�17	17
Translation differences	�(2)	�1	�(3)	�–	–
Provisions for doubtful trade receivable	�(6)	3	�22	�16	23
Trade receivables written off	–	�(1)	�(1)	�(4)	(4)
Balance at the end	�54	�29	�54	�29	36

�

Liquidity risk

�

As of December 31, 2014, the Group had a working capital of $5,869 million including cash and cash equivalents of $5,080 million and current available-for-sale financial assets of $239 million. As of March 31, 2014, the Group had a working capital of $5,656 million including cash and cash equivalents of $4,331 million, current available-for-sale financial assets of $367 million and investment in certificates of deposit of $143 million.

�

As of December 31, 2014 and March 31, 2014, the outstanding employee benefit obligations were $165 million and $159 million, respectively, which have been fully funded. Further, as of December 31, 2014 and March 31, 2014, the Group had no outstanding bank borrowings. Accordingly, no liquidity risk is perceived.

�

The table below provides details regarding the contractual maturities of significant financial liabilities as of December 31, 2014:

(Dollars in millions)

Particulars	Less than 1 year	1-2 years	2-4 years	4-7 years	Total
Trade payables	�28	�–	�–	�–	28
Client deposits	�4	�–	�–	–	4
Other liabilities (excluding liabilities towards acquisition and incentive accruals - Refer Note 2.9)	�711	�–	�–	�–	711
Incentive accruals on an undiscounted basis (Refer note 2.9)	�–	�–	�1	�2	3
Liability towards acquisitions on an undiscounted basis (Refer Note 2.9)	�75	�–	–	–	75

�

The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2014:

(Dollars in millions)

Particulars	Less than 1 year	1-2 years	2-4 years	4-7 years	Total
Trade payables	�29	�–	�–	–	29
Client deposits	�6	�–	–	�–	6
Other liabilities (excluding liabilities towards acquisition and incentive accruals - Refer Note 2.9)	�640	–	�–	�–	640
Incentive accruals on an undiscounted basis (Refer note 2.9)	�–	�4	�–	�–	4
Liability towards acquisitions on an undiscounted basis (Refer Note 2.9)	�–	�55	�–	�–	55

�

As of December 31, 2014 and March 31, 2014, the Group had outstanding financial guarantees of $7 million and $6 million, towards leased premises. These financial guarantees can be invoked upon breach of any term of the lease agreement. To the Group’s knowledge there has been no breach of any term of the lease agreement as of December 31, 2014 and March 31, 2014.

�

Offsetting of financial assets and financial liabilities:

�

The group offsets a financial asset and a financial liability when it currently has a legally enforceable right to set off the recognised amounts and the group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

�

The following table provides quantitative information about offsetting of derivative financial assets and derivative financial liabilities:

(Dollars in millions)

�	As of		As of
�	December 31, 2014		March 31, 2014
�	Derivative financial asset	Derivative financial liability	Derivative financial asset	Derivative financial liability
Gross amount of recognised financial asset/liability	�6	�(6)	�36	–
Amount set off	�(1)	�1	–	–
Net amount presented in balance sheet	�5	�(5)	�36	–

�

2.8 Provisions

�

Provisions comprise the following:

(Dollars in millions)

�	As of
�	December 31, 2014	March 31, 2014
Provision for post sales client support and other provisions	�71	63
Provision towards visa related matters (Refer to note 2.16)	–	–
�	�71	63

�

Provision for post sales client support and other provisions represents costs associated with providing sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 6 months to 1 year. The movement in the provision for post sales client support and other provisions is as follows:

�

(Dollars in millions)

�	Three months ended December 31, 2014	Nine months ended December 31, 2014
Balance at the beginning	�66	63
Translation differences	�1	(1)
Provision recognized/(reversed)	�6	17
Provision utilized	�(2)	(8)
Balance at the end	�71	71

�

Provision for post sales client support and other provisions for the three months and nine months ended December 31, 2014 and December 31, 2013 is included in cost of sales in the consolidated statement of comprehensive income.

�

Provision towards visa related matters amounting to $35 million (including legal costs) was created and paid during the year ended March 31, 2014.

�

As of December 31, 2014 and March 31, 2014, claims against the company, not acknowledged as debts, net of amounts paid (excluding demands from Indian income tax authorities- Refer to Note 2.12) amounted to $28 million (178 crore) and $27 million (163 crore), respectively.

�

2.9 Other liabilities

�

Other liabilities comprise the following:

(Dollars in millions)

�	As of	�
�	December 31, 2014	March 31, 2014
Current	�	�
Accrued compensation to employees	�359	�266
Accrued expenses	�306	�308
Withholding taxes payable ⁽¹⁾	�186	�152
Retainage	�8	�14
Liabilities of controlled trusts	�24	�25
Premiums held in trust ⁽²⁾	–	�23
Accrued gratuity	�1	�–
Liability towards acquisition of business	�65	�–
Others	�13	�4
�	�962	�792
Non-Current	�	�
Liability towards acquisition of business	�–	�43
Incentive accruals	�2	�4
Deferred income - government grant on land use rights ⁽¹⁾	�8	�7
�	�10	�54
�	�972	�846
Financial liabilities included in other liabilities	�778	�687
Financial liability towards acquisitions on an undiscounted basis	�75	�55
Financial liability towards incentive accruals on an undiscounted basis	�3	�4

�

⁽¹⁾	Non financial liabilities
⁽²⁾	Represents premiums collected from policyholders and payable to insurance providers by a service provider maintaining the amounts in fiduciary capacity (Refer to Note 2.4).

�

Accrued expenses primarily relate to cost of technical sub-contractors, telecommunication charges, legal and professional charges, brand building expenses, overseas travel expenses and office maintenance. Others include unpaid dividend balances.

�

2.10 Employee benefits

�

The Group has adopted Revised IAS 19 with effect from April 1, 2013. The impact on account of the revision in accounting policy was a reduction in retained earnings by $6 million and an increase in other comprehensive income by $9 million. The reduction in retained earnings by $6 million includes a write back of unamortised negative past service cost of $3 million.

�

2.11 Employees' Stock Option Plans (ESOP)

�

2011 RSU Plan (the 2011 Plan): The Company has a 2011 RSU Plan which provides for the grant of restricted stock units (RSUs) to eligible employees of the Company. The Board of Directors recommended establishment of the 2011 Plan to the shareholders on August 30, 2011 and the shareholders approved the recommendation of the Board of Directors on October 17, 2011 through a postal ballot. The maximum aggregate number of shares that may be awarded under the Plan is 56,67,200 shares (currently held by the Infosys Limited Employees' Welfare Trust and adjusted for bonus shares issued) and the plan shall continue in effect for a term of 10 years from the date of initial grant under the plan. The RSUs will be issued at par value of the equity share. The 2011 Plan is administered by the Management Development and Compensation Committee ( the Committee) and through the Infosys Limited Employees' Welfare Trust ( the trust). The Committee is comprised of independent members of the Board of Directors.

�

The company had on August 21, 2014 made a grant of 22,794 restricted stock units to Dr. Vishal Sikka, Chief Executive Officer and Managing Director. However, Dr. Sikka, as of that date, was eligible to receive 27,067 RSUs. The company has on January 9, 2015 corrected the error by granting the differential RSUs. The RSUs will vest over a period of four years from the date of the grant in the proportions specified in the award agreement and expire seven days from the date of vesting. The RSUs will vest subject to achievement of certain key performance indicators as set forth in the award agreement for each applicable year of the vesting tranche and continued employment through each vesting date.

�

The activity in the 2011 Plan during the three months and nine months ended December 31, 2014 is set out below:

�

Particulars	Three months ended December 31, 2014		Nine months ended December 31, 2014
�	Shares arising out of options	Weighted average exercise price ($)	Shares arising out of options	Weighted average exercise price ($)
2011 Plan:	�	�	�	�
Outstanding at the beginning*	�54,134	�0.08	�–	–
Granted*	–	�–	�54,134	0.08
Forfeited and expired	–	�–	�–	–
Exercised	�–	�–	�–	–
Outstanding at the end	�54,134	�0.08	�54,134	0.08
Exercisable at the end	�–	�–	�–	–

�

adjusted for bonus issue (Refer note 2.20)

�

The weighted average remaining contractual life of RSUs outstanding as of December 31, 2014 under the 2011 Plan was 2.64 years.

�

The fair value of each RSU is estimated on the date of grant using the Black-Scholes-Merton valuation model. The expected term of the RSU is estimated based on the vesting term and contractual term of the RSU, as well as expected exercise behaviour of the employee who receives the RSU. Expected volatility during the expected term of the RSU is based on historical volatility of the observed market prices of the company's publicly traded equity shares during a period equivalent to the expected term of the RSU.

�

The fair value of each RSU is estimated on the date of grant using the Black-Scholes-Merton model with the following assumptions:

�

Particulars	Nine months ended December 31, 2014
Weighted average share price ($)	58
Exercise price ($)	0.08
Expected volatility (%)	�30 - 37
Expected life of the option (years)	�1 - 4
Expected dividends (%)	1.84
Risk-free interest rate (%)	�8 - 9

�

The weighted average fair value of RSUs on grant date was approximately $55.

�

During each of the three months and nine months ended December 31, 2014, the company recorded an employee compensation expense of less than $1 million in the statement of comprehensive income.

�

2.12 Income taxes

�

Income tax expense in the consolidated statement of comprehensive income comprises:�

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Current taxes	�	�	�	�
Domestic taxes	�159	156	�478	433
Foreign taxes	�42	32	�132	83
�	201	188	610	516
Deferred taxes	�	�	�	�
Domestic taxes	�5	�(12)	�3	(19)
Foreign taxes	–	�4	�(6)	(15)
�	�5	�(8)	�(3)	(34)
Income tax expense	206	180	607	482

�

Income tax expense for the three months ended December 31, 2014 and December 31, 2013 includes reversals (net of provisions) of $10 million and $3 million, respectively, pertaining to earlier periods.

�

Income tax expense for the nine months ended December 31, 2014 and December 31, 2013 includes reversals (net of provisions) of $18 million and $5 millions, respectively, pertaining to earlier periods.

�

The revision in the useful life of assets held at April 1, 2014 has resulted in a decrease in deferred tax credit by $7 million and $21 million for the three months and nine months ended December 31, 2014 and will result in a decrease in deferred tax credit by $29 million for the year ended March 31, 2015. (Refer to Note 2.5)

�

Entire deferred income tax for the three months and nine months ended December 31, 2014 and December 31, 2013 relates to origination and reversal of temporary differences.

�

A deferred tax liability of $1 million relating to available-for-sale financial assets has been recognized in other comprehensive income for the three months ended December 31, 2014. For the nine months ended December 31, 2014, a deferred tax liability of $1 million and a reversal of deferred tax asset of $2 million, relating to available-for-sale financial assets has been recognized in other comprehensive income.

�

For the three months and nine months ended December 31, 2013, a reversal of deferred tax liability of less than $1 million and $1 million, respectively, relating to available-for-sale financial assets has been recognized in other comprehensive income.

�

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Profit before income taxes	�728	�643	�2,122	1,746
Enacted tax rates in India	33.99%	33.99%	33.99%	33.99%
Computed expected tax expense	�247	219	�721	593
Tax effect due to non-taxable income for Indian tax purposes	�(69)	�(63)	�(203)	(189)
Overseas taxes	�38	24	�102	69
Tax reversals, overseas and domestic	�(10)	�(3)	�(18)	(5)
Effect of differential overseas tax rates	�(3)	�(2)	�(5)	(2)
Effect of exempt non operating income	�(3)	�(3)	�(12)	(9)
Effect of unrecognized deferred tax assets	�1	8	�4	12
Branch profit tax	–	–	–	(8)
Effect of non-deductible expenses	�6	1	�24	30
Additional deduction on research and development expense	�(2)	�(1)	�(7)	(9)
Others	�1	�–	�1	–
Income tax expense	206	180	607	482

�

The applicable Indian statutory tax rate for fiscal 2015 and fiscal 2014 is 33.99%.

�

During the nine months ended December 31, 2014 and December 31, 2013, the company received weighted tax deduction on eligible research and development expenditures based on the approval received from Department of Scientific and Industrial Research (DSIR) on November 23, 2011 which has been renewed up to March 31, 2017 with effect from April 1, 2014. The weighted tax deduction is equal to 200% of such expenditures incurred.

�

The foreign tax expense is due to income taxes payable overseas, principally in the United States. In India, the company has benefited from certain tax incentives that the Government of India had provided to the export of software from the units registered under the Software Technology Parks Scheme (STP) and the company continues to benefit from certain tax incentives for the units registered under the Special Economic Zones Act, 2005 (SEZ). However, the income tax incentives provided by the Government of India for STP units have expired, and all the STP units are now taxable. SEZ units which began providing services on or after April 1, 2005 are eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from the financial year in which the unit commenced the provision of services and 50 percent of such profits or gains for a further five years. Certain tax benefits are also available for a further period of five years subject to the unit meeting defined conditions.

�

As of December 31, 2014, claims against the Group not acknowledged as debts from the Indian Income tax authorities, net of amount paid to the authorities of $272 million (1,714 crore), amounted to $1 million (8 crore). As of March 31, 2014, claims against the Group not acknowledged as debts from the Indian Income tax authorities, net of amount paid to the authorities of $286 million (1,716 crore), amounted to $3 million (19 crore).

�

Demands from the Indian Income tax authorities include payment of additional tax of $246 million (1,548 crore), including interest of $68 million (430 crore) upon completion of their tax review for fiscal 2006, fiscal 2007, fiscal 2008 and fiscal 2009. These income tax demands are mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the Income Tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007, fiscal 2008 and fiscal 2009 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2006, fiscal 2007, fiscal 2008 and fiscal 2009 are pending before the Commissioner of Income tax (Appeals), Bangalore. The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

�

2.13 Earnings per equity share

�

The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share:

�

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Basic earnings per equity share - weighted average number of equity shares outstanding⁽¹⁾⁽²⁾	1,142,805,132	1,142,805,132	1,142,805,132	1,142,805,132
Effect of dilutive common equivalent shares	�22,264	–	�10,291	–
Diluted earnings per equity share - weighted average number of equity shares and common equivalent shares outstanding	1,142,827,396	1,142,805,132	1,142,815,423	1,142,805,132

�

⁽¹⁾	Excludes treasury shares
⁽²⁾	adjusted for bonus issue. Refer Note 2.20

�

For the three months and nine months ended December 31, 2014 and December 31, 2013, there were no outstanding options to purchase equity shares which had an anti-dilutive effect.

�

2.14 Related party transactions

�

Infosys has provided guarantee for performance of certain contracts entered into by its subsidiaries.

�

Transactions with key management personnel

�

The table below describes the compensation to key management personnel which comprise directors and members of the executive council:

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Salaries and other employee benefits to whole-time directors and members of executive council ⁽¹⁾⁽²⁾	�1	2	�4	6
Commission and other benefits to non-executive/ independent directors	�1	–	�1	1
Total	�2	�2	�5	7

^�

⁽¹⁾	Executive Council dissolved effective April 1, 2014 and Executive officers have been appointed with effect from that date.
⁽²⁾	Includes stock compensation expense of less than $ 1 million.

�

2.15 Segment Reporting

�

IFRS 8 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Company's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. During the three months ended March 31, 2014, the Company reorganized its segments to strengthen its focus on growing existing client relationships and increasing market share through service differentiation and operational agility. Consequent to the internal reorganization there were changes effected in the reportable business segments based on the "management approach" as defined in IFRS 8, Operating Segments. The Chief Operating Decision Maker evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments. Accordingly, information has been presented both along business segments and geographic segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

�

Business segments of the company is determined based on (i) industry class of the customers (outside of the growth markets) and; (ii) presence of customers in growth markets across industry classes. Business segments of the Company are primarily enterprises in Financial Services and Insurance (FSI), enterprises in Manufacturing (MFG), enterprises in the Energy & utilities, Communication and Services (ECS), enterprises in Retail, Consumer packaged goods and Logistics (RCL), enterprises in Life Sciences and Healthcare (LSH) and enterprises in Growth Markets (GMU) comprising enterprises in APAC (Asia Pacific) and Africa. The FSI reportable segments have been aggregated to include the Financial Services operating segment and Insurance operating segment and the ECS reportable segment has been aggregated to include Energy, Communication and Services operating segment and Resources & Utilities operating segments. Geographic segmentation is based on business sourced from that geographic region and delivered from both on-site and off-shore. 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. Consequent to the above change in the composition of reportable business segments, the prior year comparatives have been restated.

�

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Allocated expenses of segments include expenses incurred for rendering services from the company's offshore software development centres and on-site expenses, which 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 assets are used interchangeably. Management 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 adjusted against the total income of the Company.

�

Assets and liabilities used in the company's business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

�

Geographical information on revenue and business segment revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

�

2.15.1 Business Segments

�

Three months ended December 31, 2014 and December 31, 2013

(Dollars in millions)

�	FSI	MFG	ECS	RCL	LSH	GMU	Total
Revenues	�648	�488	�360	�351	�158	�213	2,218
�	�615	�453	�330	�356	�144	�202	2,100
Identifiable operating expenses	�301	�247	�166	�157	�74	�102	1,047
�	�282	�229	�153	�160	�75	�91	990
Allocated expenses	�152	�120	�87	�86	�39	�52	536
�	�147	�115	�85	�91	�37	�51	526
Segment profit	�195	�121	�107	�108	�45	�59	635
�	�186	�109	�92	�105	�32	�60	584
Unallocable expenses	�	�	�	�	�	�	43
�	�	�	�	�	�	�	58
Operating profit	�	�	�	�	�	�	592
�	�	�	�	�	�	�	526
Other income, net	�	�	�	�	�	�	136
�	�	�	�	�	�	�	117
Profit before Income taxes	�	�	�	�	�	�	728
�	�	�	�	�	�	�	643
Income tax expense	�	�	�	�	�	�	206
�	�	�	�	�	�	�	180
Net profit	�	�	�	�	�	�	522
�	�	�	�	�	�	�	463
Depreciation and amortisation	�	�	�	�	�	�	43
�	�	�	�	�	�	�	58
Non-cash expenses other than depreciation and amortisation	�	�	�	�	�	�	–
�	�	�	�	�	�	�	–

�

Nine months ended December 31, 2014 and December 31, 2013

(Dollars in millions)

�	FSI	MFG	ECS	RCL	LSH	GMU	Total
Revenues	�1,895	�1,433	�1,061	�1,072	�439	�652	6,552
�	�1,809	�1,329	�968	�1,027	�422	�602	6,157
Identifiable operating expenses	�899	�731	�512	�486	�222	�315	3,165
�	�833	�682	�438	�488	�221	�281	2,943
Allocated expenses	�436	�345	�254	�258	�106	�156	1,555
�	�451	�351	�256	�271	�112	�160	1,601
Segment profit	�560	�357	�295	�328	�111	�181	1,832
�	�525	�296	�274	�268	�89	�161	1,613
Unallocable expenses	�	�	�	�	�	�	129
�	�	�	�	�	�	�	168
Operating profit	�	�	�	�	�	�	1,703
�	�	�	�	�	�	�	1,445
Other income, net	�	�	�	�	�	�	419
�	�	�	�	�	�	�	301
Profit before Income taxes	�	�	�	�	�	�	2,122
�	�	�	�	�	�	�	1,746
Income Tax expense	�	�	�	�	�	�	607
�	�	�	�	�	�	�	482
Net profit	�	�	�	�	�	�	1,515
�	�	�	�	�	�	�	1,264
Depreciation and amortisation	�	�	�	�	�	�	129
�	�	�	�	�	�	�	168
Non-cash expenses other than depreciation and amortisation	�	�	�	�	�	�	–
�	�	�	�	�	�	�	–

�

2.15.2 Geographic Segments

�

Three months ended December 31, 2014 and December 31, 2013

(Dollars in millions)

�	North America	Europe	India	Rest of the World	Total
Revenues	�1,366	�532	�56	�264	2,218
�	�*1,260*	*�522*	*�56*	*�262*	*2,100*
Identifiable operating expenses	�645	�255	�25	�122	1,047
�	�597	�247	�35	�111	990
Allocated expenses	�335	�130	�11	�60	536
�	�322	�132	�12	�60	526
Segment profit	�386	�147	�20	�82	635
�	�341	�143	�9	�91	584
Unallocable expenses	�	�	�	�	43
�	�	�	�	�	58
Operating profit	�	�	�	�	592
�	�	�	�	�	526
Other income, net	�	�	�	�	136
�	�	�	�	�	117
Profit before Income taxes	�	�	�	�	728
�	�	�	�	�	643
Income Tax expense	�	�	�	�	206
�	�	�	�	�	180
Net profit	�	�	�	�	522
�	�	�	�	�	463
Depreciation and amortisation	�	�	�	�	43
�	�	�	�	�	58
Non-cash expenses other than depreciation and amortisation	�	�	�	�	–
�	�	�	�	�	–

�

Nine months ended December 31, 2014 and December 31, 2013

(Dollars in millions)

�	North America	Europe	India	Rest of the World	Total
Revenues	�4,001	�1,597	�156	�798	6,552
�	�*3,754*	*�1,487*	*�158*	*�758*	*6,157*
Identifiable operating expenses	�1,922	�779	�92	�372	3,165
�	�1,811	�713	�79	�340	2,943
Allocated expenses	�962	�382	�32	�179	1,555
�	�1,006	�382	�34	�179	1,601
Segment profit	�1,117	�436	�32	�247	1,832
�	�937	�392	�45	�239	1,613
Unallocable expenses	�	�	�	�	129
�	�	�	�	�	168
Operating profit	�	�	�	�	1,703
�	�	�	�	�	1,445
Other income, net	�	�	�	�	419
�	�	�	�	�	301
Profit before Income taxes	�	�	�	�	2,122
�	�	�	�	�	1,746
Income Tax expense	�	�	�	�	607
�	�	�	�	�	482
Net profit	�	�	�	�	1,515
�	�	�	�	�	1,264
Depreciation and amortisation	�	�	�	�	129
�	�	�	�	�	168
Non-cash expenses other than depreciation and amortisation	�	�	�	�	–
�	�	�	�	�	–

�

2.15.3 Significant clients

�

No client individually accounted for more than 10% of the revenues for the three months and nine months ended December 31, 2014 and December 31, 2013.

�

2.16 Litigation

�

On May 23, 2011, the company received a subpoena from a grand jury in the United States District Court for the Eastern District of Texas. The subpoena required that the company provide to the grand jury certain documents and records related to its sponsorships for, and uses of, B1 business visas.

�

In addition, the U.S. Department of Homeland Security (“DHS”) has reviewed the company’s employer eligibility verifications on Form I-9 with respect to its employees working in the United States. In connection with this review, the company was advised that the DHS has found errors in a significant percentage of its Forms I-9 that the DHS has reviewed, and may impose fines and penalties on the company related to such alleged errors.

�

On October 30, 2013, the company settled the foregoing matters and entered into a Settlement Agreement (“Settlement Agreement”) with the U.S. Attorney, the DHS and the United States Department of State (“State,” and collectively with the U.S. Attorney and the DHS, the “United States”).

�

In the Settlement Agreement, the company denied and disputed all allegations made by the United States, except for the allegation that the company failed to maintain accurate Forms I-9 records for many of its foreign nationals in the United States in 2010 and 2011 as required by law, and that such failure constituted civil violations of certain laws.

�

During the year ended March 31, 2014, the Company recorded a charge related to the settlement agreement (including legal costs) of $35 million related to the matters that were the subject of the Settlement agreement. The said amount was paid prior to December 31, 2013.

�

In addition, the company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the company’s results of operations or financial condition

�

2.17 Corporate Social Responsibility (CSR)

�

Administrative expenses for three months and nine months ended December 31, 2014 includes contribution to Infosys Foundation towards CSR. Consequent to the requirements of the Companies Act, 2013, a CSR committee has been formed by the company to formulate and monitor the CSR policy of the company. The proposed areas for CSR activities are eradication of hunger, poverty and malnutrition and the promotion of education and healthcare and rural development projects. The funds will be allocated to a corpus and utilised through the year on these activities which are specified in Schedule VII of the Indian Companies Act, 2013.

�

2.18 Break-up of expenses

�

Cost of sales

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs	�1,072	�1,058	�3,255	3,169
Deferred purchase price pertaining to acquisition	�10	�8	�29	22
Depreciation and amortisation	�43	�58	�129	168
Travelling costs	�54	�56	�170	178
Cost of technical sub-contractors	�94	�86	�253	254
Cost of software packages for own use	�44	�36	�111	86
Third party items bought for service delivery to clients	�6	�10	�21	23
Operating lease payments	�9	�9	�27	26
Communication costs	�12	�6	�25	19
Repairs and maintenance	�8	�5	�18	14
Provision for post-sales client support	�3	�4	�7	1
Other expenses	�5	�5	�12	14
Total	�1,360	�1,341	�4,057	3,974

�

Sales and marketing expenses

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs	100	84	296	269
Travelling costs	�11	�8	�32	23
Branding and marketing	�7	�6	�19	18
Operating lease payments	�2	�2	�5	5
Consultancy and professional charges	�1	�1	�2	3
Communication costs	�1	�1	�3	3
Other expenses	�2	�2	�5	6
Total	�124	�104	�362	327

�

Administrative expenses

(Dollars in millions)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs	�42	�42	�132	127
Consultancy and professional charges	�18	�25	�39	57
Repairs and maintenance	�27	�20	�68	56
Power and fuel	�9	�9	�28	28
Communication costs	�12	�11	�34	32
Travelling costs	�10	�5	�26	17
Rates and taxes	�7	�3	�16	11
Operating lease payments	�2	�3	�7	9
Insurance charges	�3	�2	�7	6
Provisions for doubtful trade receivable	�(6)	�3	�22	16
Contributions towards CSR (Refer Note 2.17)	�10	–	�31	–
Other expenses (Refer to Note 2.16)	�8	�6	�20	52
Total	�142	�129	�430	411

�

2.19 Dividends

�

The Board of Directors, in their meeting on October 10, 2014, declared an interim dividend of approximately $0.49 per equity share (30 per equity share), which resulted in a cash outflow of approximately $336 million, inclusive of corporate dividend tax.

�

2.20 Share capital and share premium

�

The Company has only one class of shares referred to as equity shares having a par value of 5. The Company has allotted 57,42,36,166 fully paid up equity shares of face value 5/- each during the quarter ended December 31, 2014 pursuant to a bonus issue approved by the shareholders through postal ballot. Record date fixed by the Board of Directors was December 3, 2014. Bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. Options granted under the stock option plan have been adjusted for bonus shares. 56,67,200 and 28,33,600 shares were held by controlled trust, as of December 31, 2014 and March 31, 2014, respectively.

�

The amount received in excess of the par value has been classified as share premium.�Additionally, share-based compensation recognized in net profit in the consolidated statement of comprehensive income is credited to share premium. Amounts have been utilised for bonus issue from share premium account.

�

�Exhibit 99.11

IFRS INR Earnings Release

�

��

Independent Auditors’ Report

�

To the Board of Directors of Infosys Limited

�

We have audited the accompanying consolidated financial statements of Infosys Limited (“the Company”) and subsidiaries, which comprise the consolidated balance sheet as at December 31,�2014, the consolidated statement of comprehensive income for the three months and nine months then ended, consolidated statements of changes in equity and cash flows for the nine months then ended, and a summary of significant accounting policies and other explanatory information.

�

Management’s Responsibility for the Consolidated Financial Statements

�

Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with the International Financial Reporting Standards as issued by International Accounting Standards Board (“IFRS”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

�

Auditor’s Responsibility

�

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

�

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

�

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

��

Opinion

�

In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with IFRS:

�

(a)

in the case of the consolidated balance sheet, of the consolidated financial position of the Company as at December 31, 2014;

(b)

in the case of the consolidated statement of comprehensive income, of the consolidated financial performance for the three months and nine months ended on that date;

(c)

in the case of the consolidated statement of changes in equity, of the consolidated changes in equity for the nine months ended on that date; and

(d)

in the case of the consolidated statement of cash flows, of the consolidated cash flows for the nine months ended on that date.

�

for B S R & Co. LLP

Chartered Accountants

Firm’s Registration Number: 101248W/W-100022

�

Akhil Bansal

Partner

Membership Number: 090906

�

Bangalore

January 9, 2015

�

��

Infosys Limited and subsidiaries

(In crore except share data)

Consolidated Balance Sheets as of	Note	December 31, 2014	March 31, 2014
ASSETS	�	�	�
Current assets	�	�	�
Cash and cash equivalents	2.1	�32,023	25,950
Available-for-sale financial assets	2.2	�1,509	2,197
Investment in certificates of deposit	�	�–	859
Trade receivables	�	�9,061	8,351
Unbilled revenue	�	�2,929	2,811
Prepayments and other current assets	2.4	�2,761	2,636
Derivative financial instruments	2.7	�29	215
Total current assets	�	�48,312	43,019
Non-current assets	�	�	�
Property, plant and equipment	2.5	�8,732	7,887
Goodwill	2.6	�2,078	2,157
Intangible assets	2.6	�282	342
Available-for-sale financial assets	2.2	�1,350	1,252
Deferred income tax assets	2.16	�626	656
Income tax assets	2.16	�1,597	1,522
Other non-current assets	2.4	�242	220
Total non-current assets	�	�14,907	14,036
Total assets	�	�63,219	57,055
LIABILITIES AND EQUITY	�	�	�
Current liabilities	�	�	�
Trade payables	�	�175	173
Derivative financial instruments	2.7	�31	–
Current income tax liabilities	2.16	�2,654	2,187
Client deposits	�	�22	40
Unearned revenue	�	�876	660
Employee benefit obligations	�	�1,043	954
Provisions	2.8	�450	379
Other current liabilities	2.9	�6,064	4,745
Total current liabilities	�	�11,315	9,138
Non-current liabilities	�	�	�
Deferred income tax liabilities	2.16	�54	64
Other non-current liabilities	2.9	�62	323
Total liabilities	�	�11,431	9,525
Equity	�	�	�
Share capital- 5 par value 120,00,00,000 (60,00,00,000) equity shares authorized, issued and outstanding 114,28,05,132 (57,14,02,566) net of 56,67,200 (28,33,600) treasury shares as of December 31, 2014 (March 31, 2014) respectively	�	572	286
Share premium	�	2,805	3,090
Retained earnings	�	47,881	43,584
Other components of equity	�	530	570
Total equity attributable to equity holders of the Company	�	51,788	47,530
Non-controlling interests	�	�–	–
Total equity	�	51,788	47,530
Total liabilities and equity	�	63,219	57,055

The accompanying notes form an integral part of the consolidated interim financial statements

�

As per our report of even date attached

for B S R & Co. LLP

Chartered Accountants

Firm’s Registration No : 101248W/W-100022

for Infosys Limited

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

Infosys Limited and subsidiaries

(In crore except share and per equity share data)

Consolidated Statements of Comprehensive Income	Note	Three months ended December 31,		Nine months ended December 31,
�	�	2014	2013	2014	2013
Revenues	�	�13,796	�13,026	�39,908	37,258
Cost of sales	2.10	�8,462	8,321	�24,709	24,024
Gross profit	�	�5,334	4,705	�15,199	13,234
Operating expenses:	�	�	�	�	�
Selling and marketing expenses	2.10	�770	644	�2,205	1,985
Administrative expenses	2.10	�875	802	�2,611	2,489
Total operating expenses	�	�1,645	1,446	�4,816	4,474
Operating profit	�	�3,689	3,259	�10,383	8,760
Other income, net	2.13	�840	�731	�2,546	1,818
Profit before income taxes	�	�4,529	3,990	�12,929	10,578
Income tax expense	2.16	�1,279	�1,115	�3,697	2,922
Net profit	�	�3,250	2,875	�9,232	7,656
Other comprehensive income	�	�	�	�	�
Items that will not be reclassified to profit or loss	�	�	�	�	�
Remeasurement of the net defined benefit liability/(asset)	2.11	(12)	�23	(35)	61
�	�	(12)	�23	(35)	61
Items that may be reclassified subsequently to profit or loss	�	�	�	�	�
Fair value changes on available-for-sale financial asset	2.2 & 2.16	56	(56)	101	(77)
Exchange differences on translation of foreign operations	�	(30)	(11)	(106)	384
�	�	26	(67)	(5)	307
Total other comprehensive income, net of tax	�	14	(44)	(40)	368
Total comprehensive income	�	�3,264	2,831	9,192	8,024
Profit attributable to:	�	�	�	�	�
Owners of the company	�	�3,250	�2,875	�9,232	7,656
Non-controlling interests	�	�–	�–	�–	–
�	�	�3,250	�2,875	�9,232	7,656
Total comprehensive income attributable to:	�	�	�	�	�
Owners of the company	�	�3,264	2,831	9,192	8,024
Non-controlling interests	�	�–	�–	�–	–
�	�	�3,264	�2,831	9,192	8,024
Earnings per equity share	�	�	�	�	�
Basic ()	�	28.44	25.16	80.79	66.99
Diluted ()	�	28.44	25.16	80.79	66.99
Weighted average equity shares used in computing earnings per equity share	2.17	�	�	�	�
Basic	�	114,28,05,132	114,28,05,132	114,28,05,132	114,28,05,132
Diluted	�	114,28,27,396	114,28,05,132	114,28,15,423	114,28,05,132

�

The accompanying notes form an integral part of the consolidated interim financial statements

�

As per our report of even date attached

for B S R & Co. LLP

Chartered Accountants

Firm’s Registration No : 101248W/W-100022

for Infosys Limited

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

Infosys Limited and subsidiaries

�

Consolidated Statements of Changes in Equity

(In crore except share data)

�	Shares(*)	Share capital	Share premium	Retained earnings	Other components of equity	Total equity attributable to equity holders of the Company
Balance as of April 1, 2013	57,14,02,566	�286	�3,090	�36,114	�307	39,797
Changes in equity for the nine months ended December 31, 2013	�	�	�	�	�	�
Remeasurement of the net defined benefit liability/(asset), net of tax effect ( refer note 2.11 and 2.16)	�–	�–	�–	�–	�61	61
Change in accounting policy -Adoption of Revised IAS 19 (refer note 2.11)	�–	�–	�–	�(35)	�50	15
Dividends (including corporate dividend tax)	�–	�–	�–	�(3,143)	�–	(3,143)
Fair value changes on available-for-sale financial assets, net of tax effect (refer note 2.2 and 2.16)	�–	�–	�–	�–	�(77)	(77)
Net profit	�–	�–	�–	�7,656	�–	7,656
Exchange differences on translation of foreign operations	�–	�–	�–	�–	�384	384
Balance as of December 31, 2013	57,14,02,566	�286	�3,090	�40,592	�725	44,693
Balance as of April 1, 2014	57,14,02,566	�286	�3,090	�43,584	�570	47,530
Changes in equity for the nine months ended December 31, 2014	�	�	�	�	�	�
Increase in share capital on account of bonus issue^# (refer to note 2.12)	57,14,02,566	286	�–	�–	�–	286
Amounts utilised for bonus issue (refer note 2.12)^#	�–	�–	(286)	�–	�–	(286)
Shares issued on exercise of employee stock options	�–	�–	1	�–	�–	1
Remeasurement of the net defined benefit liability/(asset), net of tax effect (refer note 2.11 and 2.16)	�–	�–	�–	�–	�(35)	(35)
Dividends (including corporate dividend tax)	�–	�–	�–	�(4,935)	�–	(4,935)
Fair value changes on available-for-sale financial assets, net of tax effect (refer note 2.2 and 2.16)	�–	�–	�–	�–	101	101
Net profit	�–	�–	�–	�9,232	�–	9,232
Exchange differences on translation of foreign operations	�–	�–	–	–	�(106)	(106)
Balance as of December 31, 2014	114,28,05,132	�572	�2,805	�47,881	�530	51,788

�

net of treasury shares

excludes treasury shares of 5,667,200 as of December 31, 2014 and 2,833,600 each as of April 1, 2014, December 31, 2013 and April 1, 2013, held by consolidated trust

The accompanying notes form an integral part of the consolidated interim financial statements.

�

As per our report of even date attached

�

for B S R & Co. LLP

Chartered Accountants

Firm’s Registration No : 101248W/W-100022

for Infosys Limited

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

Infosys Limited and subsidiaries

(In crore)

Consolidated Statements of Cash Flows	Note	Nine months ended December 31,
�	�	2014	2013
Operating activities:	�	�	�
Net profit	�	9,232	7,656
Adjustments to reconcile net profit to net cash provided by operating activities:	�	�	�
Depreciation and amortization	2.5 and 2.6	�786	1,013
Income tax expense	2.16	�3,697	2,922
Income on available-for-sale financial assets and certificates of deposits	�	�(241)	(190)
Effect of exchange rate changes on assets and liabilities	�	�48	66
Deferred purchase price	�	�179	134
Provision for doubtful account receivables	�	�127	91
Other non-cash item	�	�58	3
Changes in working capital	�	�	�
Trade receivables	�	�(837)	(1,951)
Prepayments and other assets	�	(2)	(58)
Unbilled revenue	�	�(118)	(181)
Trade payables	�	�20	54
Client deposits	�	�(18)	10
Unearned revenue	�	216	53
Other liabilities and provisions	�	1,000	1,793
Cash generated from operations	�	14,147	11,415
Income taxes paid	2.16	�(3,305)	(2,875)
Net cash provided by operating activities	�	10,842	8,540
Investing activities:	�	�	�
Expenditure on property, plant and equipment net of sale proceeds, including changes in retention money and capital creditors	2.5 and 2.9	�(1,592)	(1,953)
Loans to employees	�	�3	(4)
Deposits placed with corporation	�	(9)	(159)
Income on available-for-sale financial assets and certificates of deposit	�	284	167
Investment in quoted debt securities	2.2	�(1)	(939)
Investment in certificates of deposit	�	�–	(1,097)
Redemption of certificates of deposit	�	�830	450
Investment in liquid mutual fund units	�	�(16,791)	(16,885)
Redemption of liquid mutual fund units	�	17,489	16,074
Investment in fixed maturity plan securities	�	�(30)	(30)
Redemption of fixed maturity plan securities	�	30	–
Net cash used in investing activities	�	�213	(4,376)
Financing activities:	�	�	�
Payment of dividends (including corporate dividend tax)	�	�(4,935)	(3,143)
Net cash used in financing activities	�	�(4,935)	(3,143)
Effect of exchange rate changes on cash and cash equivalents	�	�(47)	94
Net increase/(decrease) in cash and cash equivalents	�	6,120	1,021
Cash and cash equivalents at the beginning	2.1	25,950	21,832
Cash and cash equivalents at the end	2.1	32,023	22,947
Supplementary information:	�	�	�
Restricted cash balance	2.1	361	319

�

The accompanying notes form an integral part of the consolidated interim financial statements.

�

As per our report of even date attached

�

for B S R & Co. LLP

Chartered Accountants

Firm’s Registration No : 101248W/W-100022

for Infosys Limited

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

Notes to the Consolidated Interim Financial Statements

�

1. Company Overview and Significant Accounting Policies

�

1.1 Company overview

�

Infosys Limited (Infosys or the company) along with its controlled trusts, Infosys Limited Employees‘ Welfare Trust and Infosys Science Foundation, majority owned and controlled subsidiary, Infosys BPO Limited and its wholly owned and controlled subsidiaries (Infosys BPO), and its wholly owned and controlled subsidiaries Infosys Technologies (Australia) Pty. Limited (Infosys Australia), Infosys Technologies (China) Co. Limited (Infosys China), Infosys Technologies S. DE R.L. de C.V. (Infosys Mexico), Infosys Technologies (Sweden) AB (Infosys Sweden), Infosys Tecnologia do Brasil Ltda (Infosys Brasil), Infosys Public Services, Inc., (Infosys Public Services), Infosys Americas Inc., (Infosys Americas), Edgeverve Systems Limited (Edgeverve), Infosys Technologies (Shanghai) Company Limited (Infosys Shanghai) and Lodestone Holding AG and its controlled subsidiaries (Infosys Lodestone) is a leading global services company. The Infosys group of companies (the Group) provides business consulting, technology, engineering and outsourcing services. In addition, the Group offers software products and platforms.

�

The Group’s consolidated interim financial statements are authorized for issue by the company’s Board of Directors on January 9, 2015.

�

1.2 Basis of preparation of financial statements

�

These consolidated interim financial statements have been prepared in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), under the historical cost convention on the accrual basis except for certain financial instruments and prepaid gratuity benefits which have been measured at fair values. Accounting policies have been applied consistently to all periods presented in these consolidated interim financial statements.

�

1.3 Basis of consolidation

�

1.4 Use of estimates

�

1.5 Critical accounting estimates

�

a. Revenue recognition

�

The group uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the group to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

�

b. Income taxes

�

c. Business combinations and intangible assets

�

d. Property, plant and equipment

�

1.6 Revenue recognition

�

The company derives revenues primarily from software related services and from the licensing of software products. Arrangements with customers for software related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

�

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the balance sheet date is recognized as unbilled revenues. Revenue from fixed-price, fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates. Costs and earnings in excess of billings are classified as unbilled revenue while billings in excess of costs and earnings are classified as unearned revenue. Maintenance revenue is recognised ratably over the term of the underlying maintenance arrangement.

�

In arrangements for software development and related services and maintenance services, the company has applied the guidance in IAS 18, Revenue, by applying the revenue recognition criteria for each separately identifiable component of a single transaction. The arrangements generally meet the criteria for considering software development and related services as separately identifiable components. For allocating the consideration, the company has measured the revenue in respect of each separable component of a transaction at its fair value, in accordance with principles given in IAS 18. The price that is regularly charged for an item when sold separately is the best evidence of its fair value. In cases where the company is unable to establish objective and reliable evidence of fair value for the software development and related services, the company has used a residual method to allocate the arrangement consideration. In these cases the balance of the consideration, after allocating the fair values of undelivered components of a transaction has been allocated to the delivered components for which specific fair values do not exist.

�

License fee revenues are recognized when the general revenue recognition criteria given in IAS 18 are met. Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS). The company has applied the principles given in IAS 18 to account for revenues from these multiple element arrangements. Objective and reliable evidence of fair value has been established for ATS. Objective and reliable evidence of fair value is the price charged when the element is sold separately. When other services are provided in conjunction with the licensing arrangement and objective and reliable evidence of their fair values have been established, the revenue from such contracts are allocated to each component of the contract in a manner, whereby revenue is deferred for the undelivered services and the residual amounts are recognized as revenue for delivered elements. In the absence of objective and reliable evidence of fair value for implementation, the entire arrangement fee for license and implementation is recognized using the percentage-of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the services are performed. ATS revenue is recognised ratably over the period in which the services are rendered.

�

Advances received for services and products are reported as client deposits until all conditions for revenue recognition are met.

�

The company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discounts/ incentives amount to each of the underlying revenue transaction that results in progress by the customer towards earning the discount/ incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the company recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

�

The company presents revenues net of value-added taxes in its statement of comprehensive income.

�

1.7 Property, plant and equipment

�

Building	22-25 years
Plant and machinery	5 years
Computer equipment	3-5 years
Furniture and fixtures	5 years
Vehicles	5 years

�

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end. (Refer note 2.5)

�

1.8 Business combinations

�

Business combinations have been accounted for using the acquisition method under the provisions of IFRS 3 (Revised), Business Combinations.

�

Business combinations between entities under common control by formation of a new company is outside the scope of IFRS 3 (Revised), Business Combinations and is accounted for at carrying value.

�

1.9 Goodwill

�

Goodwill represents the cost of business acquisition in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the cost of business acquisition, a gain is recognized immediately in net profit in the statement of comprehensive income. Goodwill is measured at cost less accumulated impairment losses.

�

1.10 Intangible assets

�

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed at each financial year end.

�

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the company has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use. Research and development costs and software development costs incurred under contractual arrangements with customers are accounted as cost of sales.

�

1.11�Financial instruments

�

Financial instruments of the Group are classified in the following categories: non-derivative financial instruments comprising of loans and receivables, available-for-sale financial assets and trade and other payables; derivative financial instruments under the category of financial assets or financial liabilities at fair value through profit or loss; share capital and treasury shares. The classification of financial instruments depends on the purpose for which those were acquired. Management determines the classification of its financial instruments at initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

�

a. Non-derivative financial instruments

�

(i) Loans and receivables

�

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are measured initially at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss or provisions for doubtful accounts. Loans and receivables are represented by trade receivables, net of allowances for impairment, unbilled revenue, cash and cash equivalents, prepayments, certificates of deposit, and other assets. Cash and cash equivalents comprise cash and bank deposits and deposits with corporations. The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. Certificates of deposit is a negotiable money market instrument for funds deposited at a bank or other eligible financial institution for a specified time period. For these financial instruments, the carrying amounts approximate fair value due to the short maturity of these instruments. Loans and receivables are reclassified to available-for-sale financial assets when the financial asset becomes quoted in an active market.

�

(ii) Available-for-sale financial assets

�

Available-for-sale financial assets are non-derivatives that are either designated in this category or are not classified in any of the other categories. Available-for-sale financial assets are recognized initially at fair value plus transactions costs. Subsequent to initial recognition these are measured at fair value and changes therein, other than impairment losses and foreign exchange gains and losses on available-for-sale monetary items are recognized directly in other comprehensive income. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to net profit in the statement of comprehensive income. These are presented as current assets unless management intends to dispose off the assets after 12 months from the balance sheet date.

�

(iii) Trade and other payables

�

Trade and other payables are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

�

b. Derivative financial instruments

�

Financial assets or financial liabilities, at fair value through profit or loss.

�

This category has two sub-categories wherein, financial assets or financial liabilities are held for trading or are designated as such upon initial recognition. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Derivatives are categorized as held for trading unless they are designated as hedges.

�

The group holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. Although the group believes that these financial instruments constitute hedges from an economic perspective, they do not qualify for hedge accounting under IAS 39, Financial Instruments: Recognition and Measurement. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per IAS 39, is categorized as a financial asset, at fair value through profit or loss.

�

Derivatives are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of comprehensive income when incurred. Subsequent to initial recognition, derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

�

c. Share capital and treasury shares

�

Ordinary Shares

�

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

�

Treasury Shares

�

When any entity within the Group purchases the company's ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from share premium.

�

1.12 Impairment

�

a. Financial assets

�

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset is considered impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

�

(i)�Loans and receivables

�

Impairment loss in respect of loans and receivables measured at amortized cost are calculated as the difference between their carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Such impairment loss is recognized in net profit in the statement of comprehensive income.

�

(ii)�Available-for-sale financial assets

�

Significant or prolonged decline in the fair value of the security below its cost and the disappearance of an active trading market for the security are objective evidence that the security is impaired. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value and is recognized in net profit in the statement of comprehensive income. The cumulative loss that was recognized in other comprehensive income is transferred to net profit in the statement of comprehensive income upon impairment.

�

b. Non-financial assets

�

(i) Goodwill

�

Goodwill is tested for impairment on an annual basis and whenever there is an indication that goodwill may be impaired, relying on a number of factors including operating results, business plans and future cash flows. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Group's cash generating units (CGU) or groups of CGU’s expected to benefit from the synergies arising from the business combination. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU.

�

Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized in net profit in the statement of comprehensive income and is not reversed in the subsequent period.

�

(ii) Intangible assets and property, plant and equipment

�

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

�

If such assets are considered to be impaired, the impairment to be recognized in net profit in the statement of comprehensive income is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset.

�

c. Reversal of impairment loss

�

An impairment loss for financial assets is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of impairment loss for an asset other than goodwill and available- for-sale financial assets that are equity securities is recognized in net profit in the statement of comprehensive income. For available-for-sale financial assets that are equity securities, the reversal is recognized in other comprehensive income.

�

1.13 Fair value of financial instruments

�

In determining the fair value of its financial instruments, the group uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

�

For all other financial instruments the carrying amounts approximate fair value due to the short maturity of those instruments. The fair value of securities, which do not have an active market and where it is not practicable to determine the fair values with sufficient reliability, are carried at cost less impairment.

�

1.14 Provisions

�

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

�

a. Post sales client support

�

The group provides its clients with a fixed-period post sales support for corrections of errors and telephone support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales. The group estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

�

b.�Onerous contracts

�

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Group recognizes any impairment loss on the assets associated with that contract.

�

1.15 Foreign currency

�

Functional currency

�

The functional currency of Infosys, Infosys BPO and Edgeverve is the Indian rupee. The functional currencies for Infosys Australia, Infosys China, Infosys Mexico, Infosys Sweden, Infosys Brasil, Infosys Public Services, Infosys Shanghai, Infosys Lodestone and Infosys Americas are the respective local currencies. These financial statements are presented in Indian rupees (rounded off to crore; one crore equals ten million).

�

Transactions and translations

�

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translations are included in net profit in the statement of comprehensive income. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

�

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

�

The translation of financial statements of the foreign subsidiaries to the functional currency of the company is performed for assets and liabilities using the exchange rate in effect at the balance sheet date and for revenue, expense and cash-flow items using the average exchange rate for the respective periods. The gains or losses resulting from such translation are included in currency translation reserves under other components of equity. When a subsidiary is disposed off, in full, the relevant amount is transferred to net profit in the statement of comprehensive income. However when a change in the parent's ownership does not result in loss of control of a subsidiary, such changes are recorded through equity.

�

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the balance sheet date.

�

1.16 Earnings per equity share

�

1.17 Income taxes

�

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the statement of comprehensive income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

�

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. The group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to share premium.

�

1.18 Employee benefits

�

1.18.1 Gratuity

�

The group has adopted Revised IAS 19 effective April 1, 2013. Pursuant to this adoption, the Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. The amended standard requires immediate recognition of the gains and losses through re-measurements of the net defined benefit liability/ (asset) through other comprehensive income. Further it also requires the interest expense (income) on plan assets to be considered in the Profit and Loss to be restricted to the discount rate based on the Government securities yield. The actual return of the portfolio, in excess of such yields is recognised through the other comprehensive income. The Revised IAS 19 also requires effect of any plan amendments to be recognised immediately through the net profits, in the statement of comprehensive income.

�

The adoption of Revised IAS 19 Employee Benefits did not have a material impact on the consolidated financial statements.

�

1.18.2 Superannuation

�

1.18.3 Provident fund

�

1.18.4 Compensated absences

�

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

�

1.19 Share-based compensation

�

1.20 Dividends

�

Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the company's Board of Directors.

�

1.21 Operating profit

�

Operating profit for the Group is computed considering the revenues, net of cost of sales, selling and marketing expenses and administrative expenses.

�

1.22 Other income

�

Other income is comprised primarily of interest income, dividend income and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Dividend income is recognized when the right to receive payment is established.

�

1.23 Leases

�

Leases under which the group assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognised as an expense on a straight line basis in net profit in the statement of comprehensive income over the lease term.

�

1.24 Government grants

�

The Group recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in net profit in the statement of comprehensive income on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in net profit in the statement of comprehensive income over the periods necessary to match them with the related costs which they are intended to compensate.

�

1.25�Recent accounting pronouncements

�

1.25.1 Standards issued but not yet effective

�

IFRS 9 Financial Instruments: In November 2009, the International Accounting Standards Board issued IFRS 9, Financial Instruments: Recognition and Measurement, to reduce the complexity of the current rules on financial instruments as mandated in IAS 39. IFRS 9 has fewer classification and measurement categories as compared to IAS 39 and has eliminated the categories of held to maturity, available for sale and loans and receivables. Further it eliminates the rule-based requirement of segregating embedded derivatives and tainting rules pertaining to held to maturity investments. For an investment in an equity instrument which is not held for trading, IFRS 9 permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognized in other comprehensive income would ever be reclassified to profit or loss. IFRS 9, was further amended in October 2010, and such amendment introduced requirements on accounting for financial liabilities. This amendment addresses the issue of volatility in the profit or loss due to changes in the fair value of an entity’s own debt. It requires the entity, which chooses to measure a liability at fair value, to present the portion of the fair value change attributable to the entity’s own credit risk in the other comprehensive income. The effective date for adoption of IFRS 9 is annual periods beginning on or after January 1, 2018, though early adoption is permitted. The Group is currently evaluating the requirements of IFRS 9, and has not yet determined the impact on the condensed consolidated interim financial statements.

�

IFRS 15 Revenue from Contract with Customers: In May 2014, the International Accounting Standards Board issued IFRS 15, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard permits the use of either the retrospective or cumulative effect transition method. The effective date for adoption of IFRS 15 is annual periods beginning on or after January 1, 2017, though early adoption is permitted. The group has not yet selected a transition method and has not yet evaluated the impact of IFRS 15 on the consolidated financial statements.

�

2. Notes to the consolidated interim financial statements

�

2.1 Cash and cash equivalents

�

Cash and cash equivalents consist of the following:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Cash and bank deposits	�27,918	�22,342
Deposits with corporations	�4,105	�3,608
�	�32,023	25,950

�

Cash and cash equivalents as of December 31, 2014 and March 31, 2014 include restricted cash and bank balances of 361 crore and 318 crore, respectively. The restrictions are primarily on account of cash and bank balances held by irrevocable trusts controlled by the Company, bank balances held as margin money deposits against guarantees and balances held in unpaid dividend bank accounts.

�

The deposits maintained by the Group with banks and corporations comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.

�

The table below provides details of cash and cash equivalents:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Current Accounts	�	�
ANZ Bank, Taiwan	�4	�1
Banamex Bank, Mexico	�10	–
Bank of America, Mexico	�28	�4
Bank of America, USA	�827	�713
Bank of Baroda, Mauritius	�1	�–�
Bank Zachodni WBK S.A, Poland	�1	�–�
Barclays Bank, UK	�13	�112
Bonz Bank, Australia	�–�	�2
BNP Paribas Bank, Norway	�1	�–�
China Merchants Bank, China	�6	�2
China Merchants Bank, China (U.S Dollar Account)	�–�	�2
Citibank EEFC, India (U.S. Dollar account)	�5	�–�
Citibank N.A, China	�62	�51
Citibank N.A, Costa Rica	�3	�1
Citibank N.A., Czech Republic	�6	�1
Citibank N.A., Australia	�19	�78
Citibank N.A., Brazil	�37	�36
Citibank EEFC, Czech Republic (U.S. Dollar account)	�–�	�1
Citibank N.A., Dubai	�2	�–�
Citibank N.A., India	�1	�2
Citibank N.A., Japan	�16	�11
Citibank N.A., New Zealand	�7	�2
Citibank N.A., Singapore	�2	�4
Citibank N.A., South Africa	�2	�4
Citibank N.A., Thailand	�1	�1
Citibank N.A., USA	�1	�–�
Commerzbank, Germany	�51	�7
Cr�dit Industriel et Commercial Bank, France	�4	�5
Deutsche Bank, India	�7	�8
Deutsche Bank, Philippines	�2	�6
Deutsche Bank, Philippines (U.S. Dollar account)	�8	�29
Deutsche Bank, Poland	�9	�1
Deutsche Bank-EEFC (Australian Dollar account)	�25	�8
Deutsche Bank-EEFC (Euro account)	�5	�8
Deutsche Bank-EEFC (Swiss Franc account)	�–�	�1
Deutsche Bank-EEFC (U.S. Dollar account)	�19	�64
Deutsche Bank-EEFC (United Kingdom Pound Sterling account)	�10	�11
Deutsche Bank, Belgium	�3	�12
Deutsche Bank, Czech Republic	�5	�2
Deutsche Bank, Czech Republic (Euro account)	�13	�8
Deutsche Bank, Czech Republic (U.S. Dollar account)	�11	�14
Deutsche Bank, France	�15	�5
Deutsche Bank, Germany	�37	�33
Deutsche Bank, Netherlands	�4	�17
Deutsche Bank, Russia	�–�	�2
Deutsche Bank, Russia (U.S. Dollar account)	�–�	�13
Deutsche Bank, Singapore	�1	�10
Deutsche Bank, Spain	�–�	�3
Deutsche Bank, Switzerland	�7	�3
Deutsche Bank, Switzerland (U.S. Dollar Account)	�–�	�2
Deutsche Bank, United Kingdom	�62	�74
HDFC Bank-Unpaid dividend account	�1	�1
HSBC Bank, Brazil	�4	�3
HSBC Bank, Hong Kong	�42	�–�
ICICI Bank, India	�44	�36
ICICI Bank-EEFC (Euro account)	�– �	�1
ICICI Bank-EEFC (U.S. Dollar account)	�11	�16
ICICI Bank-EEFC (United Kingdom Pound Sterling account)	�1	�1
ICICI Bank-Unpaid dividend account	�2	�2
ING, Belgium	�5	�3
Nordbanken, Sweden	�11	�17
Punjab National Bank, India	�1	�4
Pudong Development Bank, China	�1	�–�
Raiffeisen Bank, Romania	�–�	�1
Raiffeisen Bank, Czech Republic	�2	�–�
Royal Bank of Scotland, China	�58	�38
Royal Bank of Canada, Canada	�39	�22
Royal Bank of Scotland, China (U.S. Dollar account)	�4	�6
Shanghai Pudong Development Bank, China	�–�	�1
Santander Bank, Argentina	�1	�1
State Bank of India, India	�2	�9
UBS AG (U.S. Dollar Account)	�3	�1
UBS AG, Switzerland	�27	�5
UBS AG, Switzerland (United Kingdom Pound Sterling account)	�1	�–�
UBS AG, Switzerland (Euro Account)	�5	�1
Wells Fargo Bank N.A., USA	�49	�–�
Westpac, Australia	�4	�5
�	�1,671	�1,548
Deposit Accounts	�	�
Andhra Bank	�924	�753
Allahabad Bank	�934	�1,011
Axis Bank	�1,110	�1,080
Bank of Baroda	�1,653	�2,205
Bank of India	�3,009	�2,541
Canara Bank	�2,331	�2,353
Central Bank of India	�1,580	�1,555
Corporation Bank	�1,830	�1,134
Citibank, China	�–�	�19
Deutsche Bank, Poland	�156	�125
HDFC Bank	�2,077	�– �
ICICI Bank	�3,288	�2,999
IDBI Bank	�1,472	�1,713
ING Vysya Bank	�100	�200
Indusind Bank	�75	�25
Indian Overseas Bank	�1,056	�718
Jammu and Kashmir Bank	�–�	�25
Kotak Mahindra Bank	�55	�25
National Australia Bank Limited, Australia	�99	�91
Oriental Bank of Commerce	�1,580	�91
Punjab National Bank	�592	�80
South Indian Bank	�13	�25
State Bank of India	�56	�58
Syndicate Bank	�607	�863
Union Bank of India	�76	�20
Vijaya Bank	�1,042	�855
Yes Bank	�532	�230
�	�26,247	�20,794
Deposits with corporation	�	�
HDFC Limited	�4,105	3,608
�	�4,105	3,608
Total	�32,023	25,950

�

2.2 Available-for-sale financial assets

�

Investments in mutual fund units, quoted debt securities and unquoted equity securities are classified as available-for-sale financial assets.

�

Cost and fair value of the above investments are as follows:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Current	�	�
Mutual fund units:	�	�
Liquid mutual funds	�	�
Cost and fair value	�1,355	2,051
Fixed maturity plan securities	�	�
Cost	�143	�143
Gross unrealised holding gains	�11	�3
Fair value	154	�146
�	�1,509	�2,197
Non-current	�	�
Quoted debt securities:	�	�
Cost	�1,339	�1,351
Gross unrealised holding gain/ (loss)	�2	�(106)
Fair value	�1,341	1,245
Unquoted equity securities:	�	�
Cost	�5	4
Gross unrealised holding gains	�4	3
Fair value	�9	7
�	�1,350	�1,252
Total available-for-sale financial assets	2,859	3,449

�

Mutual fund units:

�

Liquid mutual funds

�

The fair value of liquid mutual funds as of December 31, 2014 and March 31, 2014 is 1,355 crore and 2,051 crore, respectively. The fair value is based on quoted price.

�

Fixed maturity plan securities:

�

The fair value as of December 31, 2014 and March 31, 2014 is 154 crore and 146 crore, respectively. The net unrealized gain of 2 crore, net of taxes 2 crore has been recognized in other comprehensive income for the three months ended December 31, 2014. The net unrealized gain of 4 crore, net of taxes 4 crore has been recognized in other comprehensive income for the nine months ended December 31, 2014. The net unrealized gain of less than 1 crore, net of taxes less than 1 crore has been recognized in other comprehensive income for the three months and nine months ended December 31, 2013, respectively. The fair value is based on quotes reflected in actual transactions in similar instruments. (Refer to note 2.16)

�

Quoted debt securities:

�

The fair value of quoted debt securities as of December 31, 2014 and March 31, 2014 is 1,341 crore and 1,245 crore, respectively. The net unrealized gain of 52 crore and 96 crore, net of taxes less than 1 crore and 12 crore, has been recognized in other comprehensive income for the three months and nine months ended December 31, 2014 respectively. The net unrealized loss of 57 crore and 78 crore, net of taxes of 6 crore and 10 crore has been recognized in other comprehensive income for the three months and nine months ended December 31, 2013, respectively. The fair value is based on the quoted prices. (Refer to note 2.16)

�

2.3 Business combinations

�

During the year ended March 31, 2010, Infosys BPO acquired 100% of the voting interests in Infosys McCamish Systems LLC (McCamish), a business process solutions provider based in Atlanta, Georgia, in the United States. The business acquisition was conducted by entering into Membership Interest Purchase Agreement for a cash consideration of 173 crore and a contingent consideration of upto 93 crore. The fair value of contingent consideration and its undiscounted value on the date of acquisition was 40 crore and 67 crore, respectively.

�

The payment of contingent consideration was dependent upon the achievement of certain revenue targets and net margin targets by McCamish over a period of 4 years ending March 31, 2014. Further, contingent to McCamish signing any deal with total revenues of USD 100 million or more, the aforesaid period could be extended by 2 years.

�

The fair value of the contingent consideration was determined by discounting the estimated amount payable to the previous owners of McCamish on achievement of certain financial targets. The key inputs used for the determination of fair value of contingent consideration were the discount rate of 13.9% and the probabilities of achievement of the net margin and the revenue targets ranging from 50% to 100%.

�

During the year ended March 31, 2013, pursuant to McCamish entering into the asset purchase agreement with Seabury & Smith Inc., an assessment of the probability of McCamish achieving the required revenue and net margin targets pertaining to contingent consideration was conducted. The assessment was based on the actual and projected revenues and net margins pertaining to McCamish post consummation of the asset purchase transaction. The fair value of the contingent consideration and its related undiscounted value was determined at 17 crore and 23 crore, respectively. The contingent consideration was estimated to be in the range between 23 crore and 33 crore.

�

During March 2014, an assessment of the probability of McCamish achieving the required revenue and net margin targets pertaining to the contingent consideration was conducted. The entire contingent consideration was reversed in the statement of comprehensive income as it was estimated that the liability is no longer required.

�

During the year ended March 31, 2013, McCamish entered into an asset purchase agreement with Seabury & Smith Inc., a company providing back office services to life insurers, to purchase its BPO division for a cash consideration of 5 crore and a deferred consideration of 5 crore. Consequent to the transaction, intangible assets on customer contracts and relationships of 5 crore, intangible software of 1 crore and goodwill of 4 crore has been recorded. The intangible customer contracts and relationships and software are amortized over a period of five years and four months, respectively, being management’s estimate of its useful life, based on the life over which economic benefits are expected to be realized. During the year ended March 31,2014, based on an assessment made by the management, deferred consideration of 5 crore has been reversed in the statement of comprehensive income, as the same is no longer payable.

�

On October 22, 2012, Infosys acquired 100% of the voting interests in Lodestone Holding AG, a global management consultancy firm headquartered in Zurich. The business acquisition was conducted by entering into a share purchase agreement for a cash consideration of 1,187 crore and an additional consideration of upto 608 crore, which the company refers to as deferred purchase price, estimated on the date of acquisition, payable to the selling shareholders of Lodestone Holding AG who are continuously employed or otherwise engaged by the Group during the three year period following the date of the acquisition.

�

This transaction is treated as post acquisition employee remuneration expense as per IFRS 3R. For the three months and nine months ended December 31, 2014 and December 31, 2013, a post-acquisition employee remuneration expense of 63 crore and 50 crore and 179 crore and 134 crore respectively, is recorded in cost of sales in the statement of comprehensive income. As of December 31, 2014 and March 31, 2014, the liability towards deferred purchase price amounted to 412 crore and 255 crore, respectively.

�

2.4 Prepayments and other assets

�

Prepayments and other assets consist of the following:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Current	�	�
Rental deposits	�20	10
Security deposits	�3	10
Loans and advances to employees	�210	208
Prepaid expenses⁽¹⁾	�74	116
Interest accrued and not due	�112	21
Withholding taxes⁽¹⁾	�1,316	�1,052
Advance payments to vendors for supply of goods⁽¹⁾	�45	92
Deposit with corporations	�972	979
Premiums held in trust⁽²⁾	�2	135
Other assets	�7	13
�	�2,761	2,636
Non-current	�	�
Loans and advances to employees	�33	38
Deposit with corporation	�59	43
Rental deposits	�52	60
Security deposits	�68	60
Prepaid expenses⁽¹⁾	�8	9
Prepaid gratuity and other benefits⁽¹⁾	�22	10
�	�242	220
�	�3,003	2,856
Financial assets in prepayments and other assets	�1,538	�1,577

�

⁽¹⁾

Non financial assets

⁽²⁾

Represents premiums collected from policyholders and payable to insurance providers by a service provider maintaining the amounts in fiduciary capacity

�

Deposit with corporations represents amounts deposited to settle certain employee-related obligations as and when they arise during the normal course of business.

�

2.5 Property, plant and equipment

�

Following are the changes in the carrying value of property, plant and equipment for the three months ended December 31, 2014:

(In crore)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of October 1, 2014	�1,528	�5,331	�1,859	�2,905	�1,069	�33	�1,643	14,368
Additions	22	225	123	268	43	4	�–	685
Deletions	�–	�–	(3)	(15)	(7)	(2)	(98)	(125)
Translation difference	�–	�–	�–	1	(1)	(1)	�–	(1)
Gross carrying value as of December 31, 2014	1,550	5,556	1,979	3,159	1,104	34	1,545	14,927
Accumulated depreciation as of October 1, 2014	(15)	(1,884)	(1,172)	(2,117)	(764)	(18)	�–	(5,970)
Depreciation	(1)	(48)	(64)	(101)	(32)	(1)	�–	(247)
Accumulated depreciation on deletions	�–	�–	3	14	5	2	�–	24
Translation difference	�–	�–	�–	(1)	(1)	�–	�–	(2)
Accumulated depreciation as of December 31, 2014	�(16)	�(1,932)	�(1,233)	�(2,205)	�(792)	�(17)	�–	(6,195)
Carrying value as of October 1, 2014	1,513	3,447	687	788	305	15	1,643	8,398
Carrying value as of December 31, 2014	1,534	3,624	746	954	312	17	1,545	8,732

�

Following are the changes in the carrying value of property, plant and equipment for the three months ended December 31, 2013:

(In crore)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of October 1, 2013	947	4,380	1,354	2,236	909	33	2,017	11,876
Additions	194	265	179	207	68	3	�–	916
Deletions	�(1)	�–	�(2)	�(11)	�–	�–	�(153)	(167)
Translation difference	�–	1	�(1)	�(3)	�(3)	�–	�–	(6)
Gross carrying value as of December 31, 2013	1,140	4,646	1,530	2,429	974	36	1,864	12,619
Accumulated depreciation as of October 1, 2013	�–	�(1,639)	�(943)	�(1,622)	�(646)	�(16)	�–	(4,866)
Depreciation	�–	�(76)	�(51)	�(182)	�(32)	�(1)	�–	(342)
Accumulated depreciation on deletions	�–	�–	2	11	�–	�–	�–	13
Translation difference	�–	�–	�(1)	�1	�2	�–	�–	2
Accumulated depreciation as of December 31, 2013	�–	�(1,715)	�(993)	�(1,792)	�(676)	�(17)	�–	(5,193)
Carrying value as of October 1, 2013	947	2,741	411	614	263	17	2,017	7,010
Carrying value as of December 31, 2013	1,140	2,931	537	637	298	19	1,864	7,426

�

Following are the changes in the carrying value of property, plant and equipment for the nine months ended December 31, 2014:

(In crore)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of April 1, 2014	1,140	5,026	1,702	2,659	1,017	36	1,832	13,412
Additions	410	530	290	543	107	5	85	1,970
Deletions	�–	�–	(14)	(46)	(19)	(5)	(372)	(456)
Translation difference	�–	�–	1	3	(1)	(2)	�–	1
Gross carrying value as of December 31, 2014	1,550	5,556	1,979	3,159	1,104	34	1,545	14,927
Accumulated depreciation as of April 1, 2014	�–	�(1,794)	�(1,048)	�(1,965)	�(700)	�(18)	�–	(5,525)
Depreciation	(16)	(138)	(197)	(271)	(108)	(4)	�–	(734)
Accumulated depreciation on deletions	�–	�–	12	35	17	4	�–	68
Translation difference	�–	�–	�–	(4)	(1)	1	�–	(4)
Accumulated depreciation as of December 31, 2014	(16)	(1,932)	(1,233)	(2,205)	(792)	(17)	�–	(6,195)
Carrying value as of April 1, 2014	1,140	3,232	654	694	317	18	1,832	7,887
Carrying value as of December 31, 2014	1,534	3,624	746	954	312	17	1,545	8,732

�

Following are the changes in the carrying value of property, plant and equipment for the nine months ended December 31, 2013:

(In crore)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of April 1, 2013	850	4,199	1,254	1,887	800	26	1,660	10,676
Additions	291	446	271	529	148	9	357	2,051
Deletions	�(1)	�–	�(3)	�(20)	�(1)	�(3)	�(153)	(181)
Translation difference	�–	1	8	33	27	4	�–	73
Gross carrying value as of December 31, 2013	1,140	4,646	1,530	2,429	974	36	1,864	12,619
Accumulated depreciation as of April 1, 2013	�–	�(1,497)	�(835)	�(1,304)	�(558)	�(14)	�–	(4,208)
Depreciation	�–	�(218)	�(155)	�(485)	�(98)	�(3)	�–	(959)
Accumulated depreciation on deletions	�–	�–	3	20	�1	2	�–	26
Translation difference	�–	�–	�(6)	�(23)	�(21)	�(2)	�–	(52)
Accumulated depreciation as of December 31, 2013	�–	�(1,715)	�(993)	�(1,792)	�(676)	�(17)	�–	(5,193)
Carrying value as of April 1, 2013	850	2,702	419	583	242	12	1,660	6,468
Carrying value as of December 31, 2013	1,140	2,931	537	637	298	19	1,864	7,426

�

Following are the changes in the carrying value of property, plant and equipment for the year ended March 31, 2014:

(In crore)

�	Land	Buildings	Plant and machinery	Computer equipment	Furniture and fixtures	Vehicles	Capital work-in-progress	Total
Gross carrying value as of April 1, 2013	850	4,199	1,254	1,887	800	26	1,660	10,676
Additions	291	827	445	760	200	11	357	2,891
Deletions	�(1)	�–	�(3)	�(27)	�(2)	�(5)	�(185)	(223)
Translation difference	�–	�–	6	39	19	4	�–	68
Gross carrying value as of March 31, 2014	1,140	5,026	1,702	2,659	1,017	36	1,832	13,412
Accumulated depreciation as of April 1, 2013	�–	�(1,497)	�(835)	�(1,304)	�(558)	�(14)	�–	(4,208)
Depreciation	�–	�(297)	�(213)	�(657)	�(129)	�(5)	�–	(1,301)
Accumulated depreciation on deletions	�–	�–	3	27	�2	3	�–	35
Translation difference	�–	�–	�(3)	�(31)	�(15)	�(2)	�–	(51)
Accumulated depreciation as of March 31, 2014	�–	�(1,794)	�(1,048)	�(1,965)	�(700)	�(18)	�–	(5,525)
Carrying value as of April 1, 2013	850	2,702	419	583	242	12	1,660	6,468
Carrying value as of March 31, 2014	1,140	3,232	654	694	317	18	1,832	7,887

�

During the three months ended June 30, 2014, the management based on internal and external technical evaluation reassessed the remaining useful life of assets primarily consisting of buildings and computers with effect from April 1, 2014. Accordingly the useful lives of certain assets required a change from the previous estimates.

�

The existing and revised useful lives are as below:

�

Category of assets	Earlier useful life (Years)	Current useful life (Years)
Building	�15	�22-25
Plant and machinery	�5	�5
Computer equipment	�2-5	�3-5
Furniture and fixtures	�5	�5
Vehicles	�5	�5

�

Had the group continued with the previously assessed useful lives, charge for depreciation and cost of sales for the three months and nine months ended December 31, 2014 would have been higher by 101 crore and 356 crore, respectively on assets held at April 1, 2014. The revision of the useful lives will result in the following changes in the depreciation expense as compared to the original useful life of the assets.

(In crore)

Particulars	Fiscal 2015	Fiscal 2016	After Fiscal 2016
Increase /(decrease) in depreciation expense	(435)	(144)	579

�

The depreciation expense is included in cost of sales in the consolidated statement of comprehensive income.

�

Carrying value of land includes 613 crore and 359 crore as of December 31, 2014 and March 31, 2014, respectively, towards deposits paid under certain lease-cum-sale agreements to acquire land including agreements where the Company has an option to purchase or renew the properties on expiry of the lease period. The contractual commitments for capital expenditure were 1,518 crore and 1,363 crore, as of December 31, 2014 and March 31, 2014, respectively.

�

2.6 Goodwill and intangible assets

�

Following is a summary of changes in the carrying amount of goodwill:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Carrying value at the beginning	�2,157	�1,976
Translation differences	�(79)	�181
Carrying value at the end	�2,078	�2,157

�

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash generate units (CGU) or groups of CGU’s, which benefit from the synergies of the acquisition. The chief operating decision maker reviews the goodwill for any impairment at the operating segment level, which is represented through groups of CGU’s.

�

Effective quarter ended March 31, 2014, the company reorganized its business to strengthen its focus on growing existing client relationships and increasing market share through service differentiation and operational agility. Consequent to the internal reorganization there were changes effected in the segments based on the “management approach” as defined in IFRS 8, Operating Segments. (Refer Note 2.19). Accordingly the goodwill has been allocated to the new operating segments.

�

The following table presents the allocation of goodwill to operating segments:

(In crore)

Segment	As of
�	December 31, 2014	March 31, 2014
Financial services	428	448
Insurance	306	302
Manufacturing	435	458
Energy, Communication and services	203	�212
Resources & utilities	92	�97
Retail, Consumer packaged goods and logistics	308	321
Life Sciences and Healthcare	125	�130
Growth Markets	181	�189
Total	�2,078	�2,157

�

The entire goodwill relating to Infosys BPO’s acquisition of McCamish has been allocated to the groups of CGU’s which are represented by the Insurance segment.

�

The goodwill relating to Infosys Lodestone and Portland acquisitions has been allocated to the groups of CGU’s which are represented by the entity’s operating segment.

�

�	In %
Long term growth rate	8-10
Operating margins	17-20
Discount rate	13.2

�

The above discount rate is based on the Weighted Average Cost of Capital (WACC) of the Company. These estimates are likely to differ from future actual results of operations and cash flows.

�

Following are the changes in the carrying value of acquired intangible assets for the three months ended December 31, 2014:

(In crore)

�	Customer related	Software related	Sub-contracting rights related	Intellectual property rights related	Land use- rights related	Brand	Others	Total
Gross carrying value as of October 1, 2014	�370	�36	�21	�11	�70	�27	�9	544
Additions	�–	�–	�–	�–	�–	�–	�–	–
Deletions	�–	(17)	�–	�–	�–	�–	�–	(17)
Translation differences	�(2)	�–	�–	�–	�2	�–	�–	–
Gross carrying value as of December 31, 2014	�368	�19	�21	�11	�72	�27	�9	527
Accumulated amortization as of October 1, 2014	(144)	(28)	(21)	(11)	(4)	(26)	(9)	(243)
Amortization expense	�(10)	�(7)	�–	�–	�–	�(1)	�–	(18)
Deletions	�–	�17	�–	�–	�–	�–	�–	17
Translation differences	1	�(1)	�–	�–	(1)	�–	�–	(1)
Accumulated amortization as of December 31, 2014	(153)	(19)	(21)	(11)	(5)	(27)	(9)	(245)
Carrying value as of October 1, 2014	226	8	�–	�–	66	1	�–	301
Carrying value as of December 31, 2014	215	�–	�–	�–	67	�–	�–	282

�

Following are the changes in the carrying value of acquired intangible assets for the three months ended December 31, 2013:

(In crore)

�	Customer related	Software related	Sub-contracting rights related	Intellectual property rights related	Land use- rights related	Brand	Others	Total
Gross carrying value as of October 1, 2013	�391	�36	�21	�11	�72	�29	�9	569
Additions	�–	�–	�–	�–	�–	�–	�–	–
Translation differences	(3)	(1)	�–	�–	�–	�–	�–	(4)
Gross carrying value as of December 31, 2013	�388	�35	�21	�11	�72	�29	�9	565
Accumulated amortization as of October 1, 2013	(106)	(25)	(15)	(11)	(3)	(13)	(5)	(178)
Amortization expense	(11)	(1)	(2)	�–	(1)	(3)	(1)	(19)
Translation differences	1	1	�–	–	1	(1)	�–	2
Accumulated amortization as of December 31, 2013	(116)	(25)	(17)	(11)	(3)	(17)	(6)	(195)
Carrying value as of October 1, 2013	285	11	6	�–	69	16	4	391
Carrying value as of December 31, 2013	272	10	4	�–	69	12	3	370

�

Following are the changes in the carrying value of acquired intangible assets for the nine months ended December 31, 2014:

(In crore)

�	Customer related	Software related	Sub-contracting rights related	Intellectual property rights related	Land use- rights related	Brand	Others	Total
Gross carrying value as of April 1, 2014	�381	�35	�21	�11	�68	�28	�9	553
Additions	�–	�–	�–	�–	�–	�–	�–	–
Deletion	�–	(17)	�–	�–	�–	�–	�–	(17)
Translation differences	(13)	1	�–	�–	4	(1)	�–	(9)
Gross carrying value as of December 31, 2014	368	19	21	11	72	27	9	527
Accumulated amortization as of April 1, 2014	(125)	(26)	(19)	(11)	(3)	(20)	(7)	(211)
Amortization expense	(30)	(9)	(2)	�–	(1)	(8)	(2)	(52)
Deletion	�–	17	�–	�–	�–	�–	�–	17
Translation differences	2	(1)	�–	�–	(1)	1	�–	1
Accumulated amortization as of December 31, 2014	(153)	(19)	(21)	(11)	(5)	(27)	(9)	(245)
Carrying value as of April 1, 2014	256	9	2	�–	65	8	2	342
Carrying value as of December 31, 2014	215	�–	�–	�–	67	�–	�–	282

�

Following are the changes in the carrying value of acquired intangible assets for the nine months ended December 31, 2013:

(In crore)

�	Customer related	Software related	Sub-contracting rights related	Intellectual property rights related	Land use- rights related	Brand	Others	Total
Gross carrying value as of April 1, 2013	�341	�32	�21	�11	�61	�24	�9	499
Additions through business combinations (Refer note 2.3)	�–	�–	�–	�–	�–	�–	�–	–
Additions	�–	�–	�–	�–	�–	�–	�–	–
Translation differences	�47	�3	�–	�–	�11	�5	�–	66
Gross carrying value as of December 31, 2013	�388	�35	�21	�11	�72	�29	�9	565
Accumulated amortization as of April 1, 2013	(80)	(19)	(12)	(11)	(1)	(5)	(3)	(131)
Amortization expense	(32)	(3)	(5)	�–	(1)	(10)	(3)	(54)
Translation differences	(4)	(3)	–	–	(1)	(2)	�–	(10)
Accumulated amortization as of December 31, 2013	(116)	(25)	(17)	(11)	(3)	(17)	(6)	(195)
Carrying value as of April 1, 2013	261	13	9	�–	60	�19	6	368
Carrying value as of December 31, 2013	272	10	4	�–	69	�12	3	370

�

Following are the changes in the carrying value of acquired intangible assets for the year ended March 31, 2014:

(In crore)

�	Customer related	Software related	Sub-contracting rights related	Intellectual property rights related	Land use- rights related	Brand	Others	Total
Gross carrying value as of April 1, 2013	�341	�32	�21	�11	�61	�24	�9	499
Additions through business combinations (Refer note 2.3)	�–	�–	�–	�–	�–	�–	�–	–
Additions	�–	�–	�–	�–	�–	�–	�–	–
Translation differences	�40	�3	�–	�–	�7	�4	�–	54
Gross carrying value as of March 31, 2014	�381	�35	�21	�11	�68	�28	�9	553
Accumulated amortization as of April 1, 2013	(80)	(19)	(12)	(11)	(1)	(5)	(3)	(131)
Amortization expense	(43)	(4)	(7)	�–	(1)	(14)	(4)	(73)
Translation differences	(2)	(3)	�–	�–	(1)	(1)	�–	(7)
Accumulated amortization as of March 31, 2014	(125)	(26)	(19)	(11)	(3)	(20)	(7)	(211)
Carrying value as of April 1, 2013	261	13	9	�–	60	�19	6	368
Carrying value as of March 31, 2014	256	9	2	�–	65	�8	2	342

�

The estimated useful lives and remaining useful life of intangible assets as of December 31, 2014 are as follows:

(in years)

Intangible asset	Asset acquisition/ Business combination	Useful life	Remaining Useful life
Sub-contracting rights	Asset acquisition	3	�–�
Land use rights	Asset acquisition	50	47
Customer contracts and relationships	Philips BPO	7	�–�
Customer contracts and relationships	McCamish	9	4
Customer contracts and relationships	Portland	10	7
Customer contracts and relationships	Seabury and Smith	5	3
Customer contracts	Lodestone	2	�–�
Customer relationships	Lodestone	10	8
Brand	Lodestone	2	�–�

�

The amortization expense is included in cost of sales in the consolidated statement of comprehensive income.

�

Research and development expense recognized in net profit in the consolidated statement of comprehensive income, for the three months and nine months ended December 31, 2014 and December 31, 2013 was 182 crore and 197 crore and 509 crore and 709 crore, respectively.

�

2.7 Financial instruments

�

Financial instruments by category

�

The carrying value and fair value of financial instruments by categories as of December 31, 2014 were as follows:

(In crore)

�	Loans and receivables	Financial assets/ liabilities at fair value through profit and loss	Available for sale	Trade and other payables	Total carrying value/fair value
Assets:	�	�	�	�	�
Cash and cash equivalents (Refer Note 2.1)	�32,023	�–	�–	�–	32,023
Available-for-sale financial assets (Refer Note 2.2)	�–	�–	�2,859	�–	2,859
Investment in certificates of deposit	�–	�–	�–	�–	–
Trade receivables	�9,061	�–	�–	�–	9,061
Unbilled revenue	�2,929	�–	�–	�–	2,929
Prepayments and other assets (Refer Note 2.4)	�1,538	�–	�–	�–	1,538
Derivative financial instruments	�–	�29	�–	�–	29
Total	�45,551	�29	�2,859	�–	48,439
Liabilities:	�	�	�	�	�
Trade payables	�–	�–	�–	�175	175
Derivative financial instruments	�–	�31	�–	�–	31
Client deposits	�–	�–	�–	�22	22
Employee benefit obligations	�–	�–	�–	�1,043	1,043
Other liabilities (Refer Note 2.9)	�–	�–	�–	�4,906	4,906
Total	�–	�31	�–	�6,146	6,177

�

The carrying value and fair value of financial instruments by categories as of March 31, 2014 were as follows:

(In crore)

�	Loans and receivables	Financial assets/ liabilities at fair value through profit and loss	Available for sale	Trade and other payables	Total carrying value/fair value
Assets:	�	�	�	�	�
Cash and cash equivalents (Refer Note 2.1)	�25,950	�–	�–	�–	25,950
Available-for-sale financial assets (Refer Note 2.2)	�–	�–	�3,449	�–	3,449
Investment in certificates of deposit	�859	�–	�–	�–	859
Trade receivables	�8,351	�–	�–	�–	8,351
Unbilled revenue	�2,811	�–	�–	�–	2,811
Prepayments and other assets (Refer Note 2.4)	�1,577	�–	�–	�–	1,577
Derivative financial instruments	�–	�215	�–	�–	215
Total	�39,548	�215	�3,449	�–	43,212
Liabilities:	�	�	�	�	�
Trade payables	�–	�–	�–	�173	173
Client deposits	�–	�–	�–	�40	40
Employee benefit obligations	�–	�–	�–	�954	954
Other liabilities (Refer Note 2.9)	�–	�–	�–	�4,110	4,110
Total	�–	�–	�–	�5,277	5,277

�

Fair value hierarchy

�

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

�

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

�

Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

�

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014:

(In crore)

�	As of December 31, 2014	Fair value measurement at end of the reporting period/year using
�	�	Level 1	Level 2	Level 3
Assets	�	�	�	�
Available- for- sale financial asset- Investments in liquid mutual fund units (Refer Note 2.2)	�1,355	�1,355	�–	–
Available- for- sale financial asset- Investments in fixed maturity plan securities (Refer Note 2.2)	�154	�–	�154	–
Available- for- sale financial asset- Investments in quoted debt securities (Refer Note 2.2)	�1,341	�1,341	�–	–
Available- for- sale financial asset- Investments in unquoted equity instruments (Refer Note 2.2)	�9	�–	�9	–
Derivative financial instruments - gain on outstanding foreign exchange forward and option contracts	�29	�–	�29	–
Liabilities	�	�	�	�
Derivative financial instruments - loss on outstanding foreign exchange forward and option contracts	�31	�–	�31	–

�

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2014:

(In crore)

�	As of March 31, 2014	Fair value measurement at end of the reporting period/year using
�	�	�Level 1	Level 2	Level 3
Assets	�	�	�	�
Available- for- sale financial asset- Investments in liquid mutual fund units (Refer Note 2.2)	�2,051	�2,051	�–	–
Available- for- sale financial asset- Investments in fixed maturity plan securities (Refer Note 2.2)	�146	�–	�146	–
Available- for- sale financial asset- Investments in quoted debt securities (Refer Note 2.2)	�1,245	�1,245	�–	–
Available- for- sale financial asset- Investments in unquoted equity instruments (Refer Note 2.2)	�7	�–	�7	–
Derivative financial instruments- gain on outstanding foreign exchange forward and option contracts	�215	�–	�215	–
Liabilities	�	�	�	�
Derivative financial instruments- loss on outstanding foreign exchange forward and option contracts	�–	�–	�–	–

�

Income from financial assets or liabilities that are not at fair value through profit or loss is as follows:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Interest income on deposits and certificates of deposit	�677	�537	�1,935	1,574
Income from available-for-sale financial assets	�61	�62	�210	166
�	�738	�599	�2,145	1,740

�

Derivative financial instruments

�

The Group holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.

�

The following table gives details in respect of outstanding foreign exchange forward and option contracts:

�

�	As of		As of
�	December 31, 2014		March 31, 2014
�	In million	In crore	In million	In crore
Forward contracts	�	�	�	�
In U.S. dollars	741	4,671	751	4,500
In Euro	68	521	64	531
In United Kingdom Pound Sterling	73	714	77	772
In Australian dollars	90	465	75	415
Option contracts	�	�	�	�
In U.S. dollars	�65	�410	�20	�120
Total forwards and options	�	6,781	�	6,338

�

The Group recognized a net gain on derivative financial instruments of 51 crore and 211 crore during the three and nine months ended December 31, 2014 as against a net gain on derivative financial instruments of 239 crore and a net loss of 554 crore during the three and nine months ended December 31, 2013, which are included in other income.

�

The foreign exchange forward and option contracts mature within twelve months. The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the balance sheet date:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Not later than one month	1,611	�1,185
Later than one month and not later than three months	3,168	�2,795
Later than three months and not later than one year	2,002	�2,358
�	6,781	6,338

�

Financial risk management

�

Financial risk factors

�

The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Group is foreign exchange risk. The Group uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Group's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The demographics of the customer including the default risk of the industry and country in which the customer operates also has an influence on credit risk assessment.

�

Market risk

�

The Group operates internationally and a major portion of the business is transacted in several currencies and consequently the Group is exposed to foreign exchange risk through its sales and services in the United States and elsewhere, and purchases from overseas suppliers in various foreign currencies. The Group holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Group’s operations are adversely affected as the rupee appreciates/ depreciates against these currencies.

�

The following table gives details in respect of the outstanding foreign exchange forward and option contracts:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Aggregate amount of outstanding forward and option contracts	�6,781	�6,338
Gain on outstanding forward and option contracts	29	215
Loss on outstanding forward and option contracts	31	�–�

�

The following table analyzes foreign currency risk from financial instruments as of December 31, 2014:

(In crore)

�	U.S. dollars	Euro	United Kingdom Pound Sterling	Australian dollars	Other currencies	Total
Cash and cash equivalents	�940	�142	�88	�146	�551	1,867
Trade receivables	�5,955	�1,199	�535	�501	�528	8,718
Unbilled revenue	�1,759	�341	�128	�147	�228	2,603
Other assets	�72	�28	�15	�10	�69	194
Trade payables	(60)	(10)	�–	(2)	(77)	(149)
Client deposits	(10)	(1)	�(1)	�(1)	(9)	(22)
Accrued expenses	(690)	(149)	(69)	(24)	(151)	(1,083)
Employee Benefit obligations	�(424)	�(47)	�(36)	�(142)	�(103)	(752)
Other liabilities	�(620)	(113)	(42)	(54)	(575)	(1,404)
Net assets / (liabilities)	6,922	1,390	618	581	461	9,972

�

The following table analyzes foreign currency risk from financial instruments as of March 31, 2014:

(In crore)

�	U.S. dollars	Euro	United Kingdom Pound Sterling	Australian dollars	Other currencies	Total
Cash and cash equivalents	865	102	198	182	376	1,723
Trade receivables	5,378	1,093	610	519	449	8,049
Unbilled revenue	1,624	383	132	194	247	2,580
Other assets	72	39	15	10	52	188
Trade payables	(19)	(17)	(8)	(2)	(98)	(144)
Client deposits	(18)	(17)	�–	�–	(5)	(40)
Accrued expenses	(763)	(156)	(61)	(34)	(184)	(1,198)
Employee benefit obligations	(382)	(73)	(40)	(133)	(98)	(726)
Other liabilities	�(449)	(33)	(3)	(51)	(299)	(835)
Net assets / (liabilities)	6,308	1,321	843	685	440	9,597

�

For the three months ended December 31, 2014 and December 31, 2013, every percentage point depreciation / appreciation in the exchange rate between the Indian rupee and U.S. dollar, has affected the Company's incremental operating margins by approximately 0.52% and 0.46%, respectively.

�

For the nine months ended December 31, 2014 and December 31, 2013, every percentage point depreciation / appreciation in the exchange rate between the Indian rupee and U.S. dollar, has affected the Company's incremental operating margins by approximately 0.53% and 0.46%, respectively.

�

Credit risk

�

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to 9,061crore and 8,351 crore as of December 31, 2014 and March 31, 2014, respectively and unbilled revenue amounting to 2,929 crore and 2,811 crore as of December 31, 2014 and March 31, 2014, respectively. Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers primarily located in the United States. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Group grants credit terms in the normal course of business.

�

The following table gives details in respect of percentage of revenues generated from top customer and top five customers:

(In %)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Revenue from top customer	3.2	3.7	3.3	3.9
Revenue from top five customers	13.3	14.1	13.5	14.5

�

Financial assets that are neither past due nor impaired

�

Cash and cash equivalents, available-for-sale financial assets and investment in certificates of deposit are neither past due nor impaired. Cash and cash equivalents include deposits with banks and corporations with high credit-ratings assigned by international and domestic credit-rating agencies. Available-for-sale financial assets include investment in liquid mutual fund units, quoted debt securities and unquoted equity securities. Certificates of deposit represent funds deposited at a bank or other eligible financial institution for a specified time period. Investment in quoted debt securities represents the investments made in debt securities issued by government and quasi government organizations. Of the total trade receivables, 6,622 crore and 6,377 crore as of December 31, 2014 and March 31, 2014, respectively, were neither past due nor impaired.

�

There is no other class of financial assets that is not past due but impaired except for trade receivables of 27 crore and 18 crore as of December 31, 2014 and March 31, 2014, respectively.

�

Financial assets that are past due but not impaired

�

The Group’s credit period generally ranges from 30-60 days. The age analysis of the trade receivables have been considered from the due date. The age wise break up of trade receivables, net of allowances of 311 crore and 196 crore as of December 31, 2014 and March 31, 2014, respectively, that are past due, is given below:

(In crore)

Period (in days)	As of
�	December 31, 2014	March 31, 2014
Less than 30	1,562	1,369
31 – 60	451	252
61 – 90	223	124
More than 90	203	229
�	2,439	1,974

�

The reversal of provision for doubtful trade receivable for the three months ended December 31, 2014 was 42 crore. The provision for doubtful trade receivables for the nine months ended December 31, 2014 was 127 crore.

�

The provision for doubtful trade receivable for the three months and nine months ended December 31, 2013 was 20 crore and 91 crore, respectively.

(In crore)

�	Three months ended December 31,		Nine months ended December 31,		Year ended March 31,
�	2014	2013	2014	2013	2014
Balance at the beginning	381	161	214	95	95
Translation differences	�–	(1)	2	14	6
Provisions for doubtful accounts receivable (refer note 2.10)	(42)	20	127	91	138
Trade receivables written off	(1)	(3)	(5)	(23)	(25)
Balance at the end	338	177	338	177	214

�

Liquidity risk

�

As of December 31, 2014, the Group had a working capital of 36,997 crore including cash and cash equivalents of 32,023 crore and current available-for-sale financial assets of 1,509 crore. As of March 31, 2014, the Group had a working capital of 33,881 crore including cash and cash equivalents of 25,950 crore, current available-for-sale financial assets of 2,197 crore and investment in certificates of deposit 859 crore.

�

As of December 31, 2014 and March 31, 2014, the outstanding employee benefit obligations were 1,043 crore and 954 crore, respectively, which have been substantially funded. Further, as of December 31, 2014 and March 31, 2014, the Group had no outstanding bank borrowings. Accordingly, no liquidity risk is perceived.

�

The table below provides details regarding the contractual maturities of significant financial liabilities as of December 31, 2014:

(In crore)

Particulars	Less than 1 year	1-2 years	2-4 years	4-7 years	Total
Trade payables	�175	�–	�–	�–	175
Client deposits	�22	�–	�–	�–	22
Other liabilities (excluding liabilities towards acquisition and incentive accruals - Refer Note 2.9)	�4,479	�–	�–	�–	4,479
Incentive accruals on an undiscounted basis (Refer note 2.9)	�–	�–	�6	�14	20
Liability towards other acquisitions on an undiscounted basis (Refer Note 2.9)	�471	�–	�–	�–	471

�

The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2014:

(In crore)

Particulars	Less than 1 year	1-2 years	2-4 years	4-7 years	Total
Trade payables	�173	�–	�–	�–	173
Client deposits	�40	�–	�–	�–	40
Other liabilities ( excluding liabilities towards acquisition and incentive accruals - Refer Note 2.9)	�3,832	�–	�–	�–	3,832
Incentive accruals on an undiscounted basis (Refer note 2.9)	�–	�23	�–	�–	23
Liability towards other acquisitions on an undiscounted basis (Refer Note 2.9)	�–	�330	�–	�–	330

�

As of December 31, 2014 and March 31, 2014, the group had outstanding financial guarantees of 46 crore and 37 crore, respectively, towards leased premises. These financial guarantees can be invoked upon breach of any term of the lease agreement. To the group’s knowledge there has been no breach of any term of the lease agreement as of December 31, 2014 and March 31, 2014.

�

Offsetting of financial assets and financial liabilities:

�

The following table provides quantitative information about offsetting of derivative financial assets and derivative financial liabilities:

(In crore)

�	As of		As of
�	December 31, 2014		March 31, 2014
�	Derivative financial asset	Derivative financial liability	Derivative financial asset	Derivative financial liability
Gross amount of recognised financial asset/liability	�38	�(40)	�215	–
Amount set off	�(9)	�9	�–	–
Net amount presented in balance sheet	�29	�(31)	�215	–

�

2.8 Provisions

�

Provisions comprise the following:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Provision for post sales client support and other provisions	�450	379
Provisions towards visa related matters (Refer note 2.21)	�–	�–
�	450	379

�

Provision for post sales client support and other provisions represents cost associated with providing post sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of 6 months to 1 year. The movement in the provision for post sales client support and other provisions is as follows:

(In crore)

�	Three months ended December 31, 2014	Nine months ended December 31, 2014
Balance at the beginning	409	379
Provision recognized/ (reversed)	40	109
Provision utilized	(14)	(52)
Translation difference	15	14
Balance at the end	450	450

�

Provision for post sales client support and other provisions for the three months and nine months ended December 31, 2014 and December 31, 2013 is included in cost of sales in the statement of comprehensive income.

�

Provision towards visa related matters amounting to 219 crore (including legal costs) was created and paid during the year ended March 31, 2014.

�

As of December 31, 2014 and March 31, 2014, claims against the company, not acknowledged as debts, net of amounts paid (excluding demands from Indian Income tax authorities- Refer note 2.16) amounted to 178 crore and 163 crore, respectively.

�

2.9 Other liabilities

�

Other liabilities comprise the following :

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Current	�	�
Accrued compensation to employees	�2,264	1,594
Accrued expenses	�1,927	1,846
Withholding taxes payable⁽¹⁾	�1,172	912
Retainage	�49	82
Liabilities of controlled trusts	�153	151
Deferred income - government grant on land use rights⁽¹⁾ (Refer Note 2.6)	�1	1
Premiums held in trust⁽²⁾	�2	135
Accrued gratuity	�6	–
Liability towards acquisition of business (Refer note 2.3)	�412	�–
Others	�78	24
�	�6,064	4,745
Non-current	�	�
Liability towards acquisition of business (Refer note 2.3)	�–	255
Incentive accruals	�15	23
Deferred income - government grant on land use rights⁽¹⁾ (Refer Note 2.6)	�47	45
�	�62	323
�	�6,126	5,068
Financial liabilities included in other liabilities	�4,906	�4,110
Financial liability towards acquisitions on an undiscounted basis	471	330
Financial liability towards incentive accruals on an undiscounted basis	20	23

��

⁽¹⁾

Non financial liabilities

�

⁽²⁾

Represents premiums collected from policyholders and payable to insurance providers by a service provider maintaining the amounts in fiduciary capacity.

�

Accrued expenses primarily relates to cost of technical sub-contractors, telecommunication charges, legal and professional charges, brand building expenses, overseas travel expenses and office maintenance. Others include unpaid dividend balances.

�

2.10 Expenses by nature

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs (Refer Note 2.11.4)	7,546	7,346	22,423	21,563
Deferred purchase price pertaining to acquisition (Refer Note 2.3)	63	50	179	134
Depreciation and amortization charges (Refer Note 2.5 and 2.6)	265	361	786	1,013
Travelling costs	465	426	1,387	1,311
Consultancy and professional charges	117	158	254	364
Cost of Software packages for own use	272	228	677	530
Third party items bought for service delivery to clients	37	62	127	137
Communication costs	153	111	376	328
Cost of technical sub-contractors	585	532	1,541	1,535
Power and fuel	57	58	172	171
Repairs and maintenance	218	157	525	423
Rates and taxes	43	20	100	67
Insurance charges	15	13	40	39
Commission to non-whole time directors	2	5	6	8
Branding and marketing expenses	44	38	116	108
Provision for post-sales client support	20	�26	44	9
Provision for doubtful account receivables (Refer Note 2.7)	(42)	20	127	91
Contributions towards CSR (Refer Note 2.20)	63	–	188	–
Operating lease payments (Refer Note 2.14)	77	80	236	237
Others (Refer note 2.21)	107	76	221	430
Total cost of sales, selling and marketing expenses and administrative expenses	10,107	9,767	29,525	28,498

�

2.10.1 Break-up of expenses

�

Cost of sales

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs	6,664	6,563	19,816	19,159
Deferred purchase price pertaining to acquisition (Refer Note 2.3)	63	50	179	134
Depreciation and amortization	265	361	786	1,013
Travelling costs	337	344	1036	1,071
Cost of Software packages for own use	271	226	677	525
Third party items bought for service delivery to clients	37	62	127	137
Cost of technical sub-contractors	585	532	�1,541	1,535
Operating lease payments	54	53	163	156
Communication costs	77	41	153	118
Repairs and maintenance	49	33	109	85
Provision for post-sales client support	20	26	44	9
Others	40	30	78	82
Total	8,462	8,321	24,709	24,024

�

Selling and marketing expenses�

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs	622	523	�1,803	�1,638
Travelling costs	71	49	195	139
Branding and marketing	45	37	116	107
Operating lease payments	9	10	29	30
Communication costs	4	7	17	19
Consultancy and professional charges	6	5	15	17
Others	13	�13	�30	�35
Total	770	644	�2,205	�1,985

�

Administrative expenses

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit costs	260	260	804	766
Consultancy and professional charges	111	153	�239	347
Repairs and maintenance	169	124	�416	338
Power and fuel	57	58	�172	171
Communication costs	72	63	�206	191
Travelling costs	57	33	�156	101
Provision for doubtful accounts receivable	(42)	20	�127	91
Rates and taxes	43	20	�100	67
Insurance charges	15	13	�40	39
Operating lease payments	14	17	�44	51
Commission to non-whole time directors	2	5	�6	8
Contribution towards CSR (Refer Note 2.20)	63	�–	�188	�–
Others (Refer note 2.21)	54	36	�113	319
Total	�875	�802	�2,611	�2,489

�

2.11 Employee benefits

�

2.11.1 Gratuity

�

The following tables set out the funded status of the gratuity plans and the amounts recognized in the Group's financial statements as of December 31, 2014 and March 31, 2014:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Change in benefit obligations	�	�
Benefit obligations at the beginning	707	652
Service cost	72	99
Interest expense	46	47
Remeasurements - Actuarial (gains)/ losses	48	9
Benefits paid	(97)	(100)
Benefit obligations at the end	776	707
Change in plan assets	�	�
Fair value of plan assets at the beginning	717	681
Interest income	51	52
Remeasurements- Return on plan assets excluding amounts included in interest income	2	8
Contributions	119	76
Benefits paid	(97)	(100)
Fair value of plan assets at the end	792	717
Funded status	16	10
Prepaid gratuity benefit	22	10
Accrued gratuity	(6)	�–

�

Amount for the three months and nine months ended December 31, 2014 and December 31, 2013 recognised in net profit in the statement of comprehensive income:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Service cost	24	25	72	74
Net interest on the net defined benefit liability/(asset)	(3)	(1)	(5)	(3)
Net gratuity cost	21	24	67	71

�

Amount for the three months and nine months ended December 31, 2014 and December 31, 2013 recognised in statement of other comprehensive income:

�(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Remeasurements of the net defined benefit liability/ (asset)	�	�	�	�
Actuarial (gains) / losses	14	(25)	48	(56)
(Return) / loss on plan assets excluding amounts included in the net interest on the net defined benefit liability/(asset)	�1	2	(2)	(5)
�	15	(23)	46	(61)

�

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
(Gain)/loss from change in demographic assumptions	�–	(2)	�–	(2)
(Gain)/loss from change in financial assumptions	23	(8)	41	(65)
�	23	(10)	41	(67)

�

The Group has adopted Revised IAS 19 with effect from April 1, 2013. The impact on account of the revision in accounting policy is a reduction in retained earnings by 35 crore and an increase in other comprehensive income by 50 crore. The reduction in retained earnings by 35 crore includes a write back of unamortized negative past service cost by 15 crore.

�

Amounts recognised in statement of comprehensive income has been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows:

�

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Cost of sales	19	21	60	63
Selling and marketing expenses	1	�2	5	5
Administrative expenses	�1	�1	2	3
�	21	24	67	71

�

Effective July 1, 2007, the Company amended its Gratuity Plan, to suspend the voluntary defined death benefit component of the Gratuity Plan. This amendment resulted in a negative past service cost amounting to 37 crore, which was being amortized on a straight-line basis over the average remaining service period of 10 years. On adoption of Revised IAS 19, the unamortized negative past service cost of 15 crore as of March 31, 2013 has been credited to retained earnings.

�

The weighted-average assumptions used to determine benefit obligations as of December 31, 2014 and March 31, 2014 are set out below:

�

�	As of
�	December 31, 2014	March 31, 2014
Discount rate	8.1%	9.2%
Weighted average rate of increase in compensation levels	8.0%	8.0%

�

The weighted-average assumptions used to determine net periodic benefit cost for the three months and nine months ended December 31, 2014 and December 31, 2013 are set out below:

�

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Discount rate	8.1%	8.0%	8.1%	8.0%
Weighted average rate of increase in compensation levels	8.0%	7.3%	8.0%	7.3%
Weighted average duration of defined benefit obligation	6.4 years	9 years	6.4 years	9 years

�

Gratuity is applicable only to employees drawing a salary in Indian rupees and there are no other foreign defined benefit gratuity plans.

�

The Company contributes all ascertained liabilities towards gratuity to the Infosys Limited Employees' Gratuity Fund Trust. In case of Infosys BPO and Edgeverve, contributions are made to the Infosys BPO Employees' Gratuity Fund Trust and Edgeverve Systems Limited Employees Gratuity Fund Trust, respectively. Trustees administer contributions made to the trust. As of December 31, 2014 and March 31, 2014, the plan assets have been primarily invested in insurer managed funds.

�

Actual return on assets for the three months and nine months ended December 31, 2014 and December 31, 2013 were 16 crore and 14 crore and 52 crore and 48 crore, respectively.

�

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The discount rate is based on the government securities yield.

�

As of December 31, 2014, every percentage point increase / decrease in discount rate will affect our gratuity benefit obligation by approximately 39 crore.

�

As of December 31, 2014, every percentage point increase / decrease in weighted average rate of increase in compensation levels will affect our gratuity benefit obligation by approximately 32 crore.

�

The Group expects to contribute 12 crore to the gratuity trusts during the remainder of fiscal 2015.

�

Maturity profile of defined benefit obligation:

(in crore)

Within 1 year	127
1-2 year	128
2-3 year	134
3-4 year	143
4-5 year	151
5-10 years	760

�

Sensitivity for significant actuarial assumptions is computed by varying the actuarial assumptions used for valuation of defined benefit obligation by one percentage.

�

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.

�

2.11.2 Superannuation

�

The Company contributed 55 crore and 53 crore and 161 crore and 152 crore to the superannuation plan during the three months and nine months ended December 31, 2014 and December 31, 2013, respectively.

�

Superannuation contributions have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows:

�

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Cost of sales	48	47	142	135
Selling and marketing expenses	5	4	13	12
Administrative expenses	2	2	6	5
�	55	53	161	152

�

2.11.3 Provident fund

�

The Company has an obligation to fund any shortfall on the yield of the trust’s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The Actuarial Society of India issued the final guidance for measurement of provident fund liabilities during the quarter ended December 31, 2011. The actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at December 31, 2014 and March 31, 2014, respectively.

�

The details of fund and plan asset position are given below:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Plan assets at period end, at fair value	2,872	2,817
Present value of benefit obligation at period end	2,872	2,817
Asset recognized in balance sheet	�–	�–

�

The plan assets have been primarily invested in government securities.

�

Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:

�

�	As of
�	December 31, 2014	March 31, 2014
Government of India (GOI) bond yield	8.1%	9.2%
Remaining term of maturity	7 years	8 years
Expected guaranteed interest rate	8.8%	8.8%

�

The Group contributed 90 crore and 75 crore and 250 crore and 220 crore to the provident fund during the three months and nine months ended December 31, 2014 and December 31, 2013, respectively.

��

Provident fund contributions have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Cost of sales	79	67	221	195
Selling and marketing expenses	7	5	20	17
Administrative expenses	4	3	9	8
�	90	75	250	220

�

2.11.4 Employee benefit costs include:

(In crore)

�	2014	2013	2014	2013
Salaries and bonus*	7,380	7,194	21,944	21,120
Defined contribution plans	69	61	197	176
Defined benefit plans	97	91	282	267
�	7,546	7,346	22,423	21,563

�

Includes stock compensation expense of

1 crore.

The gratuity and provident plans are applicable only to employees drawing a salary in Indian rupees and there are no other foreign defined benefit plans.

�

The employee benefit cost is recognized in the following line items in the statement of comprehensive income:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Cost of sales	6,664	6,563	19,816	19,159
Selling and marketing expenses	�622	�523	�1,803	�1,638
Administrative expenses	260	260	804	766
�	7,546	7,346	22,423	21,563

�

2.12 Equity

�

Share capital and share premium

�

The Company has only one class of shares referred to as equity shares having a par value of 5. The Company has allotted 57,42,36,166 fully paid up equity shares of face value 5/- each during the three months ended December 31, 2014 pursuant to a bonus issue approved by the shareholders through postal ballot. Record date fixed by the Board of Directors was December 3, 2014. Bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. Options granted under the stock option plan have been adjusted for bonus shares. 56,67,200 and 28,33,600 shares were held by controlled trust, as of December 31, 2014 and March 31, 2014, respectively.

�

Retained earnings

�

Retained earnings represent the amount of accumulated earnings of the Group.

�

Other components of equity

�

Other components of equity consist of currency translation, fair value changes on available-for-sale financial assets and remeasurement of net defined benefit liability/asset.

�

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As of December 31, 2014, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure there are no externally imposed capital requirements.

�

The rights of equity shareholders are set out below.

�

2.12.1 Voting

�

Each holder of equity shares is entitled to one vote per share. The equity shares represented by American Depositary Shares (ADS) carry similar rights to voting and dividends as the other equity shares. Each ADS represents one underlying equity share.

�

2.12.2 Dividends

�

The Company declares and pays dividends in Indian rupees. The remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes

�

The amount of per share dividend recognized as distributions to equity shareholders for nine months ended December 31, 2014 and December 31, 2013 was 73.00 and 47.00, respectively.

�

2.12.3 Liquidation

�

In the event of liquidation of the Company, the holders of shares shall be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently, other than the amounts held by irrevocable controlled trusts. The amount distributed will be in proportion to the number of equity shares held by the shareholders. For irrevocable controlled trusts, the corpus would be settled in favour of the beneficiaries.

�

2.12.4 Share options

�

There are no voting, dividend or liquidation rights to the holders of options issued under the Company's share option plans.

�

2.13 Other income

�

Other income consists of the following:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Interest income on deposits and certificates of deposit	677	537	�1,935	�1,574
Exchange gains/ (losses) on forward and options contracts	51	239	211	(554)
Exchange gains/ (losses) on translation of other assets and liabilities	32	(119)	149	601
Income from available-for-sale financial assets	61	62	210	166
Others	19	12	41	31
�	840	731	�2,546	�1,818

�

2.14 Operating leases

�

The Group has various operating leases, mainly for office buildings, that are renewable on a periodic basis. Rental expense for operating leases was 77 crore and 80 crore and 236 crore and 237 crore for the three months and nine months ended December 31, 2014 and December 31, 2013, respectively.

�

The schedule of future minimum rental payments in respect of non-cancellable operating leases is set out below:

(In crore)

�	As of
�	December 31, 2014	March 31, 2014
Within one year of the balance sheet date	198	251
Due in a period between one year and five years	477	563
Due after five years�	228	288

�

A majority of the Group’s operating lease arrangements extend up to a maximum of ten years from their respective dates of inception, and relates to rented overseas premises. Some of these lease agreements have a price escalation clause.

�

2.15 Employees' Stock Option Plans (ESOP)

�

2011 RSU Plan (the 2011 Plan): The Company has a 2011 RSU Plan which provides for the grant of restricted stock units (RSUs) to eligible employees of the Company. The Board of Directors recommended establishment of the 2011 Plan to the shareholders on August 30, 2011 and the shareholders approved the recommendation of the Board of Directors on October 17, 2011 through a postal ballot. The maximum aggregate number of shares that may be awarded under the Plan is 56,67,200 shares (currently held by the Infosys Limited Employees' Welfare Trust and adjusted for bonus shares issued) and the plan shall continue in effect for a term of 10 years from the date of initial grant under the plan. The RSUs will be issued at par value of the equity share. The 2011 Plan is administered by the Management Development and Compensation Committee ( the Committee) and through the Infosys Limited Employees' Welfare Trust ( the trust). The Committee is comprised of independent members of the Board of Directors.The company had on August 21, 2014 made a grant of 22,794 restricted stock units to Dr. Vishal Sikka, Chief Executive Officer and Managing Director. However, Dr. Sikka, as of that date, was eligible to receive 27,067 RSUs. The company has on January 9, 2015 corrected the error by granting the differential RSUs. The RSUs will vest over a period of four years from the date of the grant in the proportions specified in the award agreement and expire seven days from the date of vesting. The RSUs will vest subject to achievement of certain key performance indicators as set forth in the award agreement for each applicable year of the vesting tranche and continued employment through each vesting date.

�

The activity in the 2011 Plan during the three months and nine months ended December 31, 2014 is set out below:

�

Particulars	Three months ended December 31, 2014		Nine months ended December 31, 2014
�	Shares arising out of options	Weighted average exercise price	Shares arising out of options	Weighted average exercise price
2011 Plan:	�	�	�	�
Outstanding at the beginning*	�54,134	�5	�–	�–
Granted^*	�–	�–	�54,134	�5
Forfeited and expired	�–	�–	�–	�–
Exercised	�–	�–	�–	�–
Outstanding at the end	�54,134	�5	�54,134	�5
Exercisable at the end	�–	�–	�–	�–

�

Adjusted for bonus issue. (Refer note 2.12)

�

The weighted average remaining contractual life of RSUs outstanding as of December 31, 2014 under the 2011 Plan was 2.64 years

�

The fair value of each RSU is estimated on the date of grant using the Black-Scholes-Merton valuation model. The expected term of an RSU is estimated based on the vesting term and contractual term of the RSU, as well as expected exercise behaviour of the employee who receives the RSU. Expected volatility during the expected term of the RSU is based on historical volatility of the observed market prices of the company's publicly traded equity shares during a period equivalent to the expected term of the RSU.

�

The fair value of each RSU is estimated on the date of grant using the Black-Scholes-Merton model with the following assumptions:

�

Particulars	Nine months ended December 31, 2014
Weighted average share price ()	3,549
Exercise price ()	5
Expected volatility (%)	30 - 37
Expected life of the option (years)	1 - 4
Expected dividends (%)	1.84
Risk-free interest rate (%)	8 - 9

�

The weighted average fair value of RSUs on grant date was 3,355/-

�

During the three months and nine months ended December 31, 2014, the company recorded an employee compensation expense of less than 1 crore and 1 crore, respectively in the statement of comprehensive income.

�

2.16 Income taxes

�

Income tax expense in the consolidated statement of comprehensive income comprises:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Current taxes	�	�	�	�
Domestic taxes	989	972	2,909	2,622
Overseas taxes	262	197	806	506
�	1,251	1,169	3,715	3,128
Deferred taxes	�	�	�	�
Domestic taxes	27	�(75)	�16	�(114)
Overseas taxes	�1	�21	�(34)	�(92)
�	�28	�(54)	�(18)	�(206)
Income tax expense	1,279	1,115	3,697	2,922

�

Income tax expense for the three months ended December 31, 2014 and December 31, 2013 includes reversals (net of provisions) of 66 crore and 17 crore, respectively, pertaining to earlier periods. Income tax expense for the nine months ended December 31, 2014 and December 31, 2013 includes reversals (net of provisions) of 111 crore and 29 crore, respectively, pertaining to earlier periods.

�

The revision in the useful life of assets held at April 1, 2014 has resulted in a decrease in deferred tax credit by 42 crore and 129 crore for the three months and nine months ended December 31, 2014, respectively and will result in a decrease in deferred tax credit by 172 crore for the year ended March 31, 2015 (Refer note 2.5).

�

Entire deferred income tax for the three months and nine months ended December 31, 2014 and December 31, 2013 relates to origination and reversal of temporary differences.

�

A deferred tax liability of 2 crore relating to available-for-sale financial assets has been recognized in other comprehensive income for the three months ended December 31, 2014. A deferred tax liability of 4 crore and a reversal of deferred tax asset of 12 crore has been recognized in other comprehensive income for the nine months ended December 31, 2014. A reversal of deferred tax liability of 6 crore and 10 crore, respectively for the three months and nine months ended December 31, 2013, relating to available-for-sale financial assets has been recognized in other comprehensive income.

�

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Profit before income taxes	4,529	3,990	12,929	10,578
Enacted tax rates in India	33.99%	33.99%	33.99%	33.99%
Computed expected tax expense	�1,540	�1,356	�4,395	�3,595
Tax effect due to non-taxable income for Indian tax purposes	(424)	(393)	�(1,234)	�(1,143)
Branch profit tax	�–	�–	�–	(47)
Overseas taxes	234	142	618	414
Tax reversals, overseas and domestic	(66)	(17)	(111)	(29)
Effect of exempt income	(21)	(21)	(74)	(58)
Effect of unrecognized deferred tax assets	�4	51	24	74
Effect of differential overseas tax rates	(16)	(5)	(29)	(12)
Effect of non-deductible expenses	37	11	146	183
Additional deduction on research and development expense	(13)	(11)	(42)	(56)
Others	4	�2	�4	1
Income tax expense	1,279	1,115	3,697	2,922

�

The applicable Indian statutory tax rates for fiscal 2015 and fiscal 2014 is 33.99%.

�

The foreign tax expense is due to income taxes payable overseas, principally in the United States of America. In India, the company has benefited from certain tax incentives that the Government of India had provided to the export of software from specially designated software technology parks, or STPs, in India and the company continues to benefit from certain tax incentives for facilities set up under the Special Economic Zones Act, 2005. However, the tax incentives provided by the Government of India for STPs have expired, and all the STP units are now taxable. Under the Special Economic Zones Act, 2005 scheme, units in designated special economic zones which begin providing services on or after April 1, 2005 are eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits or gains for a further five years. Certain tax benefits are also available for a further period of five years subject to the unit meeting defined conditions.

�

Infosys is subject to a 15% Branch Profit Tax (BPT) in the U.S. to the extent its U.S. branch's net profit during the year is greater than the increase in the net assets of the U.S. branch during the year, computed in accordance with the Internal Revenue Code. As of March 31, 2014, Infosys' U.S. branch net assets amounted to approximately 4,283 crore. As of December 31, 2014, the Company has provided for branch profit tax of 318 crore for its U.S branch, as the Company estimates that these branch profits are expected to be distributed in the foreseeable future. The change in provision for branch profit tax includes 15 crore movement on account of exchange rate during the nine months ended December 31, 2014.

�

Deferred income tax liabilities have not been recognized on temporary differences amounting to 3,094 crore and 2,587 crore as of December 31, 2014 and March 31, 2014, respectively, associated with investments in subsidiaries and branches as it is probable that the temporary differences will not reverse in the foreseeable future.

�

The following table provides the details of income tax assets and income tax liabilities as of December 31, 2014 and March 31, 2014:

�

�	As at
�	December 31, 2014	March 31, 2014
Income tax assets	1,597	1,522
Current income tax liabilities	�2,654	2,187
Net current income tax asset/ (liability) at the end	�(1,057)	(665)

�

The gross movement in the current income tax asset/ (liability) for the three months and nine months ended December 31, 2014 and December 31, 2013 is as follows:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Net current income tax asset/ (liability) at the beginning	�(1,149)	�(522)	�(665)	�(237)
Translation differences	�2	8	�7	15
Income tax paid	1,338	1,208	3,305	2,875
Current income tax expense (Refer Note 2.16)	�(1,251)	�(1,169)	�(3,715)	�(3,128)
Income tax on other comprehensive income	�3	�–	11	�–
Net current income tax asset/ (liability) at the end	�(1,057)	�(475)	�(1,057)	�(475)

�

The tax effects of significant temporary differences that resulted in deferred income tax assets and liabilities are as follows:

(In crore)

�	�As of
�	December 31, 2014	March 31, 2014
Deferred income tax assets	�	�
Property, plant and equipment	274	392
Minimum alternate tax credit carry-forwards	4	16
Computer software	56	50
Accrued compensation to employees	51	43
Trade receivables	101	47
Compensated absences	291	268
Accumulated losses	12	4
Available-for-sale financial asset	�–	�12
Post sales client support	119	�98
Others	50	34
Total deferred income tax assets	958	964
Deferred income tax liabilities	�	�
Intangible asset	(53)	(63)
Temporary difference related to branch profits	(318)	(303)
Available-for-sale financial asset	(5)	(1)
Others	(10)	(5)
Total deferred income tax liabilities	(386)	(372)
Deferred income tax assets after set off	626	656
Deferred income tax liabilities after set off	(54)	(64)

�

Deferred tax assets and deferred tax liabilities have been offset wherever the Group has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.

�

The deferred income tax assets and deferred income tax liabilities recoverable within and after 12 months are as follows:

(In crore)

�	�As of
�	December 31, 2014	March 31, 2014
Deferred income tax assets to be recovered after 12 months	411	636
Deferred income tax assets to be recovered within 12 months	547	328
Total deferred income tax assets	958	964
Deferred income tax liabilities to be settled after 12 months	(239)	(281)
Deferred income tax liabilities to be settled within 12 months	(147)	(91)
Total deferred income tax liabilities	(386)	(372)

�

In assessing the realizability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the Group will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

�

The gross movement in the deferred income tax account for the three months and nine months ended December 31, 2014 and December 31, 2013 is as follows:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Net deferred income tax asset at the beginning	�610	�485	�592	�384
Translation differences	(8)	(4)	(22)	(59)
Credits relating to temporary differences (Refer Note 2.16)	(28)	54	18	206
Temporary difference on available-for-sale financial asset	�(2)	�6	�(16)	�10
Net deferred income tax asset at the end	572	541	572	541

�

The credits relating to temporary differences during the nine months ended December 31, 2014 are primarily on account of compensated absences, trade receivables, accrued compensation and post sales client support. The credits relating to temporary differences during the nine months ended December 31, 2013 are primarily on account compensated absences, trade receivables, accumulated losses, accrued compensation to employees, intangibles partially offset by property, plant and equipment.

�

Pursuant to the enacted changes in the Indian Income Tax Laws effective April 1, 2007, a Minimum Alternate Tax (MAT) has been extended to income in respect of which a deduction may be claimed under sections 10A and 10AA of the Income Tax Act. Consequent to the enacted change, Infosys BPO has calculated its tax liability for current domestic taxes after considering MAT. The excess tax paid under MAT provisions being over and above regular tax liability can be carried forward and set off against future tax liabilities computed under regular tax provisions. Infosys BPO was required to pay MAT, and, accordingly, a deferred income tax asset of 4 crore and 16 crore has been recognized on the balance sheet as of December 31, 2014 and March 31, 2014, respectively, which can be carried forward for a period of ten years from the year of recognition.

�

As of December 31, 2014 and March 31, 2014, claims against the group not acknowledged as debts from the Indian Income tax authorities (net of amount paid to statutory authorities of 1,714 crore and 1,716 crore) amounted to 8 crore and 19 crore, respectively.

�

Demands from the Indian Income tax authorities include payment of additional tax of 1,548 crore (1,548 crore), including interest of 430 crore (430 crore) upon completion of their tax review for fiscal 2006, fiscal 2007, fiscal 2008 and fiscal 2009. These income tax demands are mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the Income Tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007, fiscal 2008 and fiscal 2009 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2006, fiscal 2007, fiscal 2008 and fiscal 2009 are pending before the Commissioner of Income tax(Appeals), Bangalore. The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

�

2.17 Earnings per equity share

�

The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share:

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Basic earnings per equity share - weighted average number of equity shares outstanding⁽¹⁾⁽²⁾	114,28,05,132	114,28,05,132	114,28,05,132	114,28,05,132
Effect of dilutive common equivalent shares - share options outstanding	�22,264	�–	�10,291	–
Diluted earnings per equity share - weighted average number of equity shares and common equivalent shares outstanding	114,28,27,396	114,28,05,132	114,28,15,423	114,28,05,132

�

⁽¹⁾

Excludes treasury shares

⁽²⁾

adjusted for bonus issue. Refer Note 2.12

�

For the three months and nine months ended December 31, 2014, and December 31, 2013, there were no outstanding options to purchase equity shares which had an anti-dilutive effect.

�

2.18 Related party transactions

�

List of subsidiaries:

�

Particulars	Country	December 31, 2014	March 31, 2014
Infosys BPO	India	99.98%	99.98%
Infosys China	China	100%	100%
Infosys Mexico	Mexico	100%	100%
Infosys Sweden	Sweden	100%	100%
Infosys Shanghai	China	100%	100%
Infosys Brasil	Brazil	100%	100%
Infosys Public Services, Inc.	U.S.	100%	100%
Infosys Consulting India Limited ⁽¹⁾	India	�–	�–
Infosys Americas ⁽²⁾	U.S.	100%	100%
Infosys BPO s. r. o ⁽³⁾	Czech Republic	99.98%	99.98%
Infosys BPO (Poland) Sp Z.o.o ⁽³⁾	Poland	99.98%	99.98%
Infosys BPO S.DE R.L. DE.C.V ^(3)(12)	Mexico	�–	�–
Infosys McCamish Systems LLC ⁽³⁾	U.S.	99.98%	99.98%
Portland Group Pty Ltd⁽³⁾⁽⁴⁾	Australia	99.98%	99.98%
Portland Procurement Services Pty Ltd⁽⁸⁾	Australia	�–	99.98%
Infosys Australia ⁽⁵⁾	Australia	100%	100%
Edgeverve Systems Limited ⁽¹¹⁾	India	100%	100%
Lodestone Holding AG (Refer to Note 2.3)	Switzerland	100%	100%
Lodestone Management Consultants (Canada) Inc. ^(6)(10)	Canada	�–	�–
Lodestone Management Consultants Inc. ⁽⁶⁾	U.S.	100%	100%
Lodestone Management Consultants Pty Limited ⁽⁶⁾	Australia	100%	100%
Lodestone Management Consultants AG ⁽⁶⁾	Switzerland	100%	100%
Lodestone Augmentis AG ⁽⁹⁾	Switzerland	100%	100%
Hafner Bauer & �dman GmbH ⁽⁶⁾	Switzerland	100%	100%
Lodestone Management Consultants (Belgium) S.A. ⁽⁷⁾	Belgium	99.90%	99.90%
Lodestone Management Consultants GmbH ⁽⁶⁾	Germany	100%	100%
Lodestone Management Consultants Pte Ltd. ⁽⁶⁾	Singapore	100%	100%
Lodestone Management Consultants SAS ⁽⁶⁾	France	100%	100%
Lodestone Management Consultants s.r.o. ⁽⁶⁾	Czech Republic	100%	100%
Lodestone Management Consultants GmbH ⁽⁶⁾	Austria	100%	100%
Lodestone Management Consultants Co., Ltd. ⁽⁶⁾	China	100%	100%
Lodestone Management Consultants Ltd. ⁽⁶⁾	UK	100%	100%
Lodestone Management Consultants B.V. ⁽⁶⁾	Netherlands	100%	100%
Lodestone Management Consultants Ltda. ⁽⁷⁾	Brazil	99.99%	99.99%
Lodestone Management Consultants Sp. z.o.o. ⁽⁶⁾	Poland	100%	100%
Lodestone Management Consultants Portugal, Unipessoal, Lda. ⁽⁶⁾	Portugal	100%	100%
S.C. Lodestone Management Consultants S.R.L. ⁽⁶⁾	Romania	100%	100%
Lodestone Management Consultants S.R.L. ⁽⁶⁾	Argentina	100%	100%
Infosys Canada Public Services Ltd.⁽¹³⁾	Canada	�–	�–

�

⁽¹⁾

⁽²⁾

Incorporated effective June 25, 2013

⁽³⁾

Wholly owned subsidiaries of Infosys BPO.

⁽⁴⁾

On January 4, 2012, Infosys BPO acquired 100% of the voting interest in Portland Group Pty Ltd

⁽⁵⁾

Under liquidation

⁽⁶⁾

Wholly owned subsidiaries of Lodestone Holding AG

⁽⁷⁾

Majority owned and controlled subsidiaries of Lodestone Holding AG

⁽⁸⁾

Wholly owned subsidiary of Portland Group Pty Ltd. Liquidated effective May 14, 2014

⁽⁹⁾

Wholly owned subsidiary of Lodestone Management Consultants AG

⁽¹⁰⁾

Liquidated effective December 31, 2013

⁽¹¹⁾

Incorporated effective February 14, 2014. Refer note below

⁽¹²⁾

Incorporated effective February 14, 2014.

⁽¹³⁾

Incorporated effective December 19, 2014

�

Infosys has provided guarantee for performance of certain contracts entered into by its subsidiaries.

�

List of other related parties:

�

Particulars	Country	Nature of relationship
Infosys Limited Employees' Gratuity Fund Trust	India	Post-employment benefit plan of Infosys
Infosys Limited Employees' Provident Fund Trust	India	Post-employment benefit plan of Infosys
Infosys Limited Employees' Superannuation Fund Trust	India	Post-employment benefit plan of Infosys
Infosys BPO Limited Employees’ Superannuation Fund Trust	India	Post-employment benefit plan of Infosys BPO
Infosys BPO Limited Employees’ Gratuity Fund Trust	India	Post-employment benefit plan of Infosys BPO
Edgeverve Systems Limited Employees Gratuity Fund Trust	India	Post-employment benefit plan of Edgeverve
Edgeverve Systems Limited Employees Superannuation Fund Trust	India	Post-employment benefit plan of Edgeverve
Infosys Limited Employees’ Welfare Trust	India	Controlled trust
Infosys Science Foundation	India	Controlled trust

�

Refer Note 2.11 for information on transactions with post-employment benefit plans mentioned above.

�

Edgeverve

�

Edgeverve was created as a wholly owned subsidiary to focus on developing and selling products and platforms. On April 15, 2014, the Board of Directors of Infosys had authorized the Company to execute a Business Transfer Agreement and related documents with Edgeverve, subject to securing the requisite approval from shareholders in the Annual General Meeting. Subsequently, at the AGM held on June 14, 2014, the shareholders have authorised the Board to enter into a Business Transfer Agreement and related documents with Edgeverve, with effect from July 1, 2014 or such other date as may be decided by the Board of Directors. The company has undertaken an enterprise valuation by an independent valuer and accordingly the business has been transferred for a consideration of $70 million (approximately 421 crore) with effect from July 1, 2014 which is settled through the issue of fully paid up equity shares.

�

The transfer of assets and liabilities is accounted for at carrying values and does not have any impact on the consolidated financial statements.

�

Transactions with key management personnel

�

The table below describes the compensation to key management personnel which comprise directors and members of the executive council:

(In crore)

�	Three months ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Salaries and other employee benefits to whole-time directors and members of executive council⁽¹⁾⁽²⁾	7	14	21	36
Commission and other benefits to non-executive/independent directors	2	2	7	8
Total	9	16	28	44

�

⁽¹⁾

Executive Council dissolved effective April 1, 2014 and Executive officers have been appointed with effect from that date.

⁽²⁾

Includes stock compensation expense of

1 crore.

�

2.19 Segment reporting

�

IFRS 8 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Company's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. Effective quarter ended March 31, 2014, the Company reorganized its segments to strengthen its focus on growing existing client relationships and increasing market share through service differentiation and operational agility. Consequent to the internal reorganization, there were changes effected in the reportable business segments based on the "management approach" as defined in IFRS 8, Operating Segments. The Chief Operating Decision Maker evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments. Accordingly, information has been presented both along business segments and geographic segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

�

Business segments of the company is determined based on (i) industry class of the customers (outside of the growth markets) and; (ii) presence of customers in growth markets across industry classes. Business segments of the Company are primarily enterprises in Financial Services and Insurance (FSI) , enterprises in Manufacturing (MFG), enterprises in the Energy & utilities, Communication and Services (ECS), enterprises in Retail, Consumer packaged goods and logistics (RCL), enterprises in Life Sciences and Healthcare (LSH) and enterprises in Growth Markets (GMU) comprising enterprises in APAC (Asia Pacific) and Africa. The FSI reportable segments has been aggregated to include the Financial Services operating segment and Insurance operating segment and the ECS reportable segment has been aggregated to include Energy, Communication and Services operating segment and, Resources & Utilities operating segments. Geographic segmentation is based on business sourced from that geographic region and delivered from both on-site and off-shore. 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. Consequent to the above change in the composition of reportable business segments, the prior year comparatives have been restated.

�

Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Allocated expenses of segments include expenses incurred for rendering services from the Company's offshore software development centres and on-site expenses, which 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 assets are used interchangeably. Management 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 adjusted against the total income of the Company.

Assets and liabilities used in the Company's business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

�

Geographical information on revenue and business segment revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

�

2.19.1 Business segments

�

Three months ended December 31, 2014 and December 31, 2013

(In crore)

Particulars	FSI	MFG	ECS	RCL	LSH	GMU	Total
Revenues	�4,032	�3,039	�2,245	�2,184	�981	�1,315	13,796
�	�3,814	�2,809	�2,049	�2,205	�897	�1,252	13,026
Identifiable operating expenses	�1,876	�1,540	�1,029	�976	�453	�630	6,504
�	�1,747	�1,419	�952	�992	�464	�563	6,137
Allocated expenses	�943	�746	�549	�537	�241	�322	3,338
�	�921	�744	�533	�577	�229	�264	3,268
Segment profit	�1,213	�753	�667	�671	�287	�363	3,954
�	�1,146	�646	�564	�636	�204	�425	3,621
Unallocable expenses	�	�	�	�	�	�	265
�	�	�	�	�	�	�	362
Operating profit	�	�	�	�	�	�	3,689
�	�	�	�	�	�	�	3,259
Other income, net	�	�	�	�	�	�	840
�	�	�	�	�	�	�	731
Profit before income taxes	�	�	�	�	�	�	4,529
�	�	�	�	�	�	�	3,990
Income tax expense	�	�	�	�	�	�	1,279
�	�	�	�	�	�	�	1,115
Net profit	�	�	�	�	�	�	3,250
�	�	�	�	�	�	�	2,875
Depreciation and amortization	�	�	�	�	�	�	265
�	�	�	�	�	�	�	361
Non-cash expenses other than depreciation and amortization	�	�	�	�	�	�	–
�	�	�	�	�	�	�	1

�

Nine months ended December 31, 2014 and December 31, 2013

(In crore)

Particulars	FSI	MFG	ECS	RCL	LSH	GMU	Total
Revenues	�11,545	�8,731	�6,467	�6,526	�2,678	�3,961	39,908
�	�10,949	�8,044	�5,857	�6,214	�2,555	�3,639	37,258
Identifiable operating expenses	�5,476	�4,454	�3,113	�2,960	�1,350	�1,912	19,265
�	�5,035	�4,127	�2,648	�2,953	�1,332	�1,700	17,795
Allocated expenses	�2,654	�2,101	�1,553	�1,570	�645	�951	9,474
�	�2,754	�2,170	�1,568	�1,667	�679	�850	9,688
Segment profit	�3,415	�2,176	�1,801	�1,996	�683	�1,098	11,169
�	�3,160	�1,747	�1,641	�1,594	�544	�1,089	9,775
Unallocable expenses	�	�	�	�	�	�	786
�	�	�	�	�	�	�	1,015
Operating profit	�	�	�	�	�	�	10,383
�	�	�	�	�	�	�	8,760
Other income, net	�	�	�	�	�	�	2,546
�	�	�	�	�	�	�	1,818
Profit before income taxes	�	�	�	�	�	�	12,929
�	�	�	�	�	�	�	10,578
Income tax expense	�	�	�	�	�	�	3,697
�	�	�	�	�	�	�	2,922
Net profit	�	�	�	�	�	�	9,232
�	�	�	�	�	�	�	7,656
Depreciation and amortization	�	�	�	�	�	�	786
�	�	�	�	�	�	�	1,013
Non-cash expenses other than depreciation and amortization	�	�	�	�	�	�	–
�	�	�	�	�	�	�	2

�

2.19.2 Geographic segments

�

Three months ended December 31, 2014 and December 31, 2013

(In crore)

Particulars	North America	Europe	India	Rest of the World	Total
Revenues	8,494	3,309	347	1,646	�13,796
�	*7,819*	*3,238*	*343*	*1,626*	*�13,026*
Identifiable operating expenses	4,012	1,580	152	760	�6,504
�	3,706	1,534	213	684	�6,137
Allocated expenses	2,083	809	73	373	�3,338
�	1,998	820	73	377	�3,268
Segment profit	2,399	920	122	513	�3,954
�	*2,115*	*884*	57	*565*	*�3,621*
Unallocable expenses	�	�	�	�	�265
�	�	�	�	�	�362
Operating profit	�	�	�	�	�3,689
�	�	�	�	�	*�3,259*
Other income, net	�	�	�	�	�840
�	�	�	�	�	�731
Profit before income taxes	�	�	�	�	�4,529
�	�	�	�	�	*�3,990*
Income tax expense	�	�	�	�	�1,279
�	�	�	�	�	�1,115
Net profit	�	�	�	�	�3,250
�	�	�	�	�	*�2,875*
Depreciation and amortization	�	�	�	�	�265
�	�	�	�	�	�361
Non-cash expenses other than depreciation and amortization	�	�	�	�	�–
�	�	�	�	�	�1

�

Nine months ended December 31, 2014 and December 31, 2013

(In crore)

Particulars	North America	Europe	India	Rest of the World	Total
Revenues	24,368	9,725	952	4,863	�39,908
�	*22,713*	*9,004*	*955*	*4,586*	*37,258*
Identifiable operating expenses	11,704	�4,739	558	2264	�19,265
�	10,951	�4,313	477	�2,054	17,795
Allocated expenses	5,858	�2,329	197	1090	�9,474
�	6,093	�2,311	203	�1,081	9,688
Segment profit	6,806	2,657	197	1,509	�11,169
�	*5,669*	*2,380*	*275*	*1,451*	*9,775*
Unallocable expenses	�	�	�	�	�786
�	�	�	�	�	1,015
Operating profit	�	�	�	�	�10,383
�	�	�	�	�	*8,760*
Other income, net	�	�	�	�	�2,546
�	�	�	�	�	1,818
Profit before income taxes	�	�	�	�	�12,929
�	�	�	�	�	*10,578*
Income tax expense	�	�	�	�	�3,697
�	�	�	�	�	2,922
Net profit	�	�	�	�	�9,232
�	�	�	�	�	*7,656*
Depreciation and amortization	�	�	�	�	�786
�	�	�	�	�	1,013
Non-cash expenses other than depreciation and amortization	�	�	�	�	�–
�	�	�	�	�	�2

�

2.19.3 Significant clients

�

No client individually accounted for more than 10% of the revenues in the three months and nine months ended December 31, 2014 and December 31, 2013.

�

2.20 Corporate Social Responsibility (CSR)

�

As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the company. The proposed areas for CSR activities are, eradication of hunger, poverty and malnutrition, promoting education and healthcare and rural development projects. The funds will be allocated to a corpus and utilised through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

�

2.21 Litigation

�

During the year ended March 31, 2014 the Company recorded a charge related to the settlement agreement (including legal costs) of 219 crore related to the matters that were the subject of the Settlement agreement. The said amount was paid prior to December 31, 2013.

�

Auditor’s Report on Consolidated Quarterly Financial Results and Year to Date Financial Results of Infosys Limited Pursuant to the Clause 41 of the Listing Agreement

�

The Board of Directors of Infosys Limited

�

We have audited the consolidated quarterly financial results of Infosys Limited (‘the Company’) for the quarter ended 31 December 2014 and the consolidated year to date financial results for the period from 1�April 2014 to 31 December 2014 attached herewith, being submitted by the Company pursuant to the requirement of Clause 41 of the Listing Agreement, except for the disclosures regarding ‘Public Shareholding’ and ‘Promoter and Promoter Group Shareholding’ which have been traced from disclosures made by the Management and have not been audited by us. These consolidated quarterly financial results and year to date financial results have been prepared from the consolidated interim financial statements, which are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial results based on our audit of such consolidated interim financial statements, which have been prepared in accordance with the recognition and measurement principles laid down in International Accounting Standard (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standard Board.

�

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion.

�

In our opinion and to the best of our information and according to the explanations given to us, these consolidated quarterly and year to date financial results:

(i)

include the quarterly and year to date financial results of the following entities:

Infosys Limited;

Infosys BPO Limited;

Infosys BPO s.r.o;

Infosys Tecnologia Do Brasil LTDA;

Infosys BPO, S de R.L. de C.V.

Infosys Technologies (Australia) Pty. Limited;

Infosys Technologies (China) Co., Ltd.;

Infosys McCamish Systems, LLC;

Infosys Public Services, Inc.;

10.

Infosys Technologies S. de R.L. de C.V.;

11.

Infosys Technologies (Sweden) AB;

12.

Infosys BPO Poland SP Z O O;

13.

Infosys Technologies (Shanghai) Co., Ltd;

14.

Infosys Americas Inc.;

15.

Portland Group Pty Ltd;

16.

Portland Procurement Services Pty Ltd;

17.

Edgeverve Systems Limited;

18.

Lodestone Holding AG;

19.

Lodestone Management Consultants Inc.;

20.

Lodestone Management Consultants Pty Limited;

21.

Lodestone Management Consultants AG;

22.

Lodestone Augmentis AG;

23.

Hafner Bauer & �dman GmbH;

24.

Lodestone Management Consultants (Belgium) NV;

25.

Lodestone Management Consultants GmbH, Austria;

26.

Lodestone Management Consultants Ltd.;

27.

Lodestone Management Consultants B.V.;

28.

Lodestone Management Consultants Ltda.;

29.

Lodestone Management Consultants Sp. z.o.o.;

30.

Lodestone Management Consultants Portugal, Unipessoal, Lda.;

31.

Lodestone Management Consultants S.R.L..;

32.

Lodestone Management Consultants Pte. Ltd.;

33.

Lodestone Management Consultants SAS;

34.

Lodestone Management Consultants s.r.o.;

35.

Lodestone Management Consultants GmbH, (Germany);

36.

S.C.Lodestone Management Consultants S.R.L.;

37.

Lodestone Management Consultants Co. Ltd;

38.

Infosys Limited Employees’ Welfare Trust; and

39.

Infosys Science Foundation.

�

(ii)

have been presented in accordance with the requirements of Clause 41 of the Listing Agreement in this regard; and

(iii)

give a true and fair view of the consolidated net profit and other financial information for the quarter ended 31 December 2014 as well as the consolidated year to date results for the period from 1 April 2014 to 31 December 2014.

�

Further, we also report that we have, on the basis of the books of account and other records and information and explanations given to us by the management, also verified the consolidated number of shares as well as percentage of shareholdings in respect of aggregate amount of consolidated public shareholdings, as furnished by the Company in terms of Clause 35 of the Listing Agreement and found the same to be correct.

�

for B S R & Co. LLP
Chartered Accountants
Firm’s registration number: 101248W/ W-100022

�

Akhil Bansal
Partner
Membership number: 090906

Bangalore

9 January 2015

�

Exhibit 99.12

Indian GAAP Standalone

�

Independent Auditor’s Report

�

To the Board of Directors of Infosys Limited

�

Report on the Financial Statements

�

We have audited the accompanying financial statements of Infosys Limited (“the Company”), which comprise the balance sheet as at 31 December 2014, the statement of profit and loss for the quarter and nine months then ended and the cash flow statement of the Company for the nine months then ended and a summary of significant accounting policies and other explanatory information.

�

Management’s Responsibility for the Financial Statements

�

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006 which continue to apply under section 133 of the Companies Act, 2013 (‘the Act’) and other accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

�

Auditor’s Responsibility

�

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

�

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

�

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

�

Opinion

�

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and 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 31 December 2014;

(ii)

in the case of the statement of profit and loss, of the profit for the quarter and nine months ended on that date; and

(iii)

in the case of the cash flow statement, of the cash flows for the nine months ended on that date.

��

for B S R & Co. LLP
Chartered Accountants
Firm’s Registration Number: 101248W/W-100022

�

Akhil Bansal
Partner
Membership Number: 090906

�

Bangalore
9 January 2015

��

�

INFOSYS LIMITED

In crore

Balance Sheet as at	Note	December 31, 2014	March 31, 2014
EQUITY AND LIABILITIES	�	�	�
SHAREHOLDERS' FUNDS	�	�	�
Share capital	2.1	�572	286
Reserves and surplus	2.2	�48,615	41,806
�	�	�49,187	42,092
NON-CURRENT LIABILITIES	�	�	�
Deferred tax liabilities (net)	2.3	�–	–
Other long-term liabilities	2.4	�31	364
�	�	�31	364
CURRENT LIABILITIES	�	�	�
Trade payables	2.5	�123	68
Other current liabilities	2.6	�5,857	4,071
Short-term provisions	2.7	�3,785	6,117
�	�	�9,765	10,256
�	�	�58,983	52,712
ASSETS	�	�	�
NON-CURRENT ASSETS	�	�	�
Fixed assets	�	�	�
Tangible assets	2.8	�6,854	5,719
Intangible assets	2.8	�–	13
Capital work-in-progress	�	�926	954
�	�	�7,780	6,686
Non-current investments	2.10	�4,522	3,968
Deferred tax assets (net)	2.3	�530	542
Long-term loans and advances	2.11	�1,907	2,227
Other non-current assets	2.12	�80	52
�	�	�14,819	13,475
CURRENT ASSETS	�	�	�
Current investments	2.10	�1,383	2,749
Trade receivables	2.13	�7,996	7,336
Cash and cash equivalents	2.14	�29,566	24,100
Short-term loans and advances	2.15	�5,219	5,052
�	�	�44,164	39,237
�	�	�58,983	52,712
SIGNIFICANT ACCOUNTING POLICIES	1	�	�

�

As per our report of even date attached

for B S R & Co. LLP

for Infosys Limited

Chartered Accountants

Firm's Registration Number:101248W/W-100022

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

��

INFOSYS LIMITED

�In crore, except share and per equity share data

Statement of Profit and Loss for the	Note	Quarter ended December 31,		Nine months ended December 31,
�	�	2014	2013	2014	2013
Income from software services and products	2.16	�12,192	�11,534	�35,374	32,975
Other income	2.17	�823	�708	�2,446	1,774
Total revenue	�	�13,015	�12,242	�37,820	34,749
Expenses	�	�	�	�	�
Employee benefit expenses	2.18	�6,358	�6,158	�18,932	18,297
Deferred consideration pertaining to acquisition	2.10.1	�55	�60	�168	169
Cost of technical sub-contractors	2.18	�777	�711	�2,073	1,956
Travel expenses	2.18	�329	�315	�1,035	1,002
Cost of software packages and others	2.18	�290	�276	�756	615
Communication expenses	2.18	�116	�81	�294	244
Professional charges	�	�114	�151	�248	338
Depreciation and amortisation expense	2.8	�229	�285	�672	792
Other expenses	2.18	�495	�374	�1,426	1,221
Total expenses	�	�8,763	�8,411	�25,604	24,634
PROFIT BEFORE EXCEPTIONAL ITEM AND TAX	�	�4,252	�3,831	�12,216	10,115
Profit on transfer of business	2.10.2	�–	�–	�412	–
PROFIT BEFORE TAX	�	�4,252	�3,831	�12,628	10,115
Tax expense:	�	�	�	�	�
Current tax	2.19	�1,172	�1,131	�3,491	2,983
Deferred tax	2.19	�25	�(35)	�(3)	(179)
PROFIT FOR THE PERIOD	�	�3,055	�2,735	�9,140	7,311
�	�	�	�	�	�
EARNINGS PER EQUITY SHARE	�	�	�	�	�
Equity shares of par value 5/- each	�	�	�	�	�
Before Exceptional item	�	�	�	�	�
Basic	�	�26.73	�23.94	�76.38	63.98
Diluted	�	�26.73	�23.94	�76.38	63.98
After Exceptional item	�	�	�	�	�
Basic	�	�26.73	�23.94	�79.98	63.98
Diluted	�	�26.73	�23.94	�79.98	63.98
Number of shares used in computing earnings per share	2.33	�	�	�	�
Basic	�	114,28,05,132	114,28,05,132	114,28,05,132	114,28,05,132
Diluted	�	114,28,25,550	114,28,05,132	114,28,14,508	114,28,05,132
SIGNIFICANT ACCOUNTING POLICIES	1	�	�	�	�

�

As per our report of even date attached

for B S R & Co. LLP

for Infosys Limited

Chartered Accountants

Firm's Registration Number:101248W/W-100022

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

�

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

��

INFOSYS LIMITED

In crore

Cash Flow Statement for the	Note	Nine months ended December 31,
�	�	2014	2013
CASH FLOWS FROM OPERATING ACTIVITIES	�	�	�
Profit before tax	�	�12,628	10,115
Adjustments to reconcile profit before tax to cash generated by operating activities	�	�	�
Depreciation and amortisation expense	�	�672	792
Provision for bad and doubtful debts	�	�116	92
Deferred purchase price	�	�168	169
Interest and dividend income	�	�(2,033)	(1,662)
Profit on transfer of business (Refer to note 2.10.2)	�	�(412)	–
Stock compensation expense	�	�1	–
Other non-cash item	�	�46	(7)
Effect of exchange differences on translation of assets and liabilities	�	�38	(42)
Changes in assets and liabilities	�	�	�
Trade receivables	�	�(776)	(1,515)
Loans and advances and other assets	�	�(105)	(610)
Liabilities and provisions	�	�1,445	1,716
�	�	�11,788	9,048
Income taxes paid	�	�(3,116)	(2,694)
NET CASH GENERATED BY OPERATING ACTIVITIES	�	�8,672	6,354
CASH FLOWS FROM INVESTING ACTIVITIES	�	�	�
Payment towards capital expenditure	�	�(1,408)	(1,741)
Proceeds on sale of fixed assets	�	�2	2
Investment in subsidiaries	�	�(132)	(1)
Investment in liquid mutual fund units	�	�(16,304)	(15,627)
Disposal of liquid mutual fund units	�	�16,886	15,027
Investment in certificates of deposit	�	�–	(1,097)
Redemption of certificates of deposit	�	�783	450
Investment in tax free bonds	�	�–	(927)
Interest and dividend received	�	�1,981	1,621
NET CASH USED IN INVESTING ACTIVITIES	�	�1,808	(2,293)
CASH FLOWS FROM FINANCING ACTIVITIES	�	�	�
Loan given to subsidiary	�	�(55)	(11)
Dividends paid (including corporate dividend tax)	�	�(4,935)	(3,144)
NET CASH USED IN FINANCING ACTIVITIES	�	�(4,990)	(3,155)
Effect of exchange differences on translation of foreign currency cash and cash equivalents	�	�(24)	59
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	�	�5,466	965
Add: Bank balances taken over from Infosys Consulting India Limited (Refer to Note 2.27)	�	�–	1
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	�	�24,100	20,401
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	�	�29,566	21,367
SIGNIFICANT ACCOUNTING POLICIES	1	�	�

�

As per our report of even date attached

for B S R & Co. LLP

for Infosys Limited

Chartered Accountants

Firm's Registration Number:101248W/W-100022

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

��

Significant accounting policies

�

Company overview

�

Infosys Limited ('Infosys' or 'the Company') along with its controlled trust, Infosys Science Foundation, majority-owned and controlled subsidiary, Infosys BPO Limited and its controlled subsidiaries ('Infosys BPO') and wholly-owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited ('Infosys Australia'), Infosys Technologies (China) Co. Limited ('Infosys China'), Infosys Technologies S. de R. L. de C. V. ('Infosys Mexico'), Infosys Technologies (Sweden) AB. ('Infosys Sweden'), Infosys Tecnologia DO Brasil LTDA. ('Infosys Brasil'), Infosys Public Services, Inc. USA ('Infosys Public Services'), Infosys Americas Inc., (Infosys Americas), Edgeverve Systems Limited (Edgeverve), Infosys Technologies (Shanghai) Company Limited ('Infosys Shanghai') and Lodestone Holding AG and its controlled subsidiaries ('Infosys Lodestone') is a leading global services corporation. The Company provides business consulting, technology, engineering and outsourcing services to help clients build tomorrow's enterprise. In addition, the Company offers software products and platforms.

�

1 Significant accounting policies

�

1.1 Basis of preparation of financial statements

�

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

�

1.2 Use of estimates

�

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage of completion which requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed tangible assets and intangible assets.

�

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

�

1.3 Revenue recognition

�

Revenue is primarily derived from software development and related services and from the licensing of software products. Arrangements with customers for software development and related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

�

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price and fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized based upon the percentage of completion method. When there is uncertainty as to measurement or ultimate collectability revenue recognition is postponed until such uncertainty is resolved. Cost and earnings in excess of billings are classified as unbilled revenue while billings in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates.

�

Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized ratably over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts, which require significant implementation services, where revenue for the entire arrangement is recognized over the implementation period based upon the percentage-of-completion method. Revenue from client training, support and other services arising due to the sale of software products is recognized as the related services are performed.

�

The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discount / incentive amount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount / incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts using a cumulative catchup approach. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

�

The Company presents revenues net of indirect taxes in its statement of profit and loss.

�

Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sale price and carrying value of the investment. Lease rentals are recognized ratably on a straight line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Company's right to receive dividend is established.

�

1.4 Provisions and contingent liabilities

�

A provision is recognized if, as a result of a past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

�

1.5 Post-sales client support and warranties

�

The Company provides its clients with a fixed-period warranty for corrections of errors and telephone support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in statement of profit and loss. The Company estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions.

�

1.6 Onerous contracts

�

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.

�

1.7 Tangible assets and capital work-in-progress

�

Tangible assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until such assets are ready for use. Capital work-in-progress comprises of the cost of fixed assets that are not yet ready for their intended use at the reporting date.

�

1.8 Intangible assets

�

Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

�

1.9 Depreciation and amortization

�

Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the other fixed assets as follows:

�

Buildings ⁽¹⁾	22-25 years
Plant and machinery⁽¹⁾	5 years
Office equipment	5 years
Computer equipment ⁽¹⁾	3-5 years
Furniture and fixtures ⁽¹⁾	5 years
Vehicles ⁽¹⁾	5 years

�

⁽¹⁾

For these class of assets, based on internal assessment and independent technical evaluation carried out by external valuers the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.

�

Depreciation and amortization methods, useful lives and residual values are reviewed periodically, including at each financial year end. (Refer note 2.8)

�

1.10 Impairment

�

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

�

1.11 Retirement benefits to employees

�

a Gratuity

�

The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company.

�

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by the law. The Company recognizes the net obligation of the gratuity plan in the Balance Sheet as an asset or liability, respectively in accordance with Accounting Standard (AS) 15, 'Employee Benefits'. The Company's overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made, and historical returns. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the statement of profit and loss in the period in which they arise.

�

b Superannuation

�

Certain employees of Infosys are also participants in the superannuation plan ('the Plan') which is a defined contribution plan. The Company has no obligations to the Plan beyond its monthly contributions.

�

c Provident fund

�

Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee’s salary. The Company contributes a part of the contributions to the Infosys Limited Employees’ Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

�

d Compensated absences

�

The employees of the Company are entitled to compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

�

1.12 Share-based payments

�

The company accounts for equity settled stock options as per the accounting treatment prescribed by Securities and Exchange Board of India ( share based employee benefits) Regulations, 2014 and the Guidance Note on Employee Share-based Payments issued by the Institute of Chartered Accountants of India using the intrinsic value method.

�

1.13 Foreign currency transactions

�

Foreign-currency denominated monetary assets and liabilities are translated at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the Statement of profit and loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

�

Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

�

1.14 Forward and options contracts in foreign currencies

�

The Company uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduce the risk or cost to the Company and the Company does not use those for trading or speculation purposes.

�

Effective April 1, 2008, the Company adopted AS 30, 'Financial Instruments: Recognition and Measurement', to the extent that the adoption did not conflict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements.

�

Forward and options contracts are fair valued at each reporting date. The resultant gain or loss from these transactions are recognized in the statement of profit and loss. The Company records the gain or loss on effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the statement of profit and loss of that period. To designate a forward or options contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the statement of profit and loss. Currently hedges undertaken by the Company are all ineffective in nature and the resultant gain or loss consequent to fair valuation is recognized in the statement of profit and loss at each reporting date.

�

1.15 Income taxes

�

Income taxes are accrued in the same period that the related revenue and expenses arise. A provision is made for income tax, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum alternate tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the Balance Sheet if there is convincing evidence that the Company will pay normal tax after the tax holiday period and the resultant asset can be measured reliably. The Company offsets, on a year on year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

�

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets in situation where unabsorbed depreciation and carry forward business loss exists, are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than in situation of unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to statement of profit and loss are credited to the share premium account.

�

1.16 Earnings per share

�

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

�

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

�

1.17 Investments

�

Trade investments are the investments made to enhance the Company’s business interests. Investments are either classified as current or long-term based on Management’s intention. Current investments are carried at the lower of cost and fair value of each investment individually. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

�

1.18 Cash and cash equivalents

�

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

�

1.19 Cash flow statement

�

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

�

1.20 Leases

�

Lease under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognised as an expense on a straight line basis in the statement of profit and loss over the lease term.

�

2 NOTES TO ACCOUNTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2014

�

Amounts in the financial statements are presented in 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 figures have been regrouped/reclassified, wherever necessary to conform to the current period presentation.

�

2.1 SHARE CAPITAL

in crore, except as otherwise stated

Particulars	As at
�	December 31, 2014	March 31, 2014
Authorized	�	�
Equity shares, 5/- par value	�	�
120,00,00,000 (60,00,00,000) equity shares	�600	300
Issued, Subscribed and Paid-Up	�	�
Equity shares, 5/- par value ⁽¹⁾	�572	286
114,28,05,132 (57,14,02,566) equity shares fully paid-up⁽²⁾	�	�
�	�572	286

�

Forfeited shares amounted to 1,500/- (1,500/-)

�

⁽¹⁾

Refer to note 2.33 for details of basic and diluted shares

⁽²⁾

Net of treasury shares 56,67,200 (28,33,600)

The Company has only one class of shares referred to as equity shares having a par value of 5/-. Each holder of equity shares is entitled to one vote per share.

�

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

�

In the period of five years immediately preceding December 31, 2014:

�

The Company has allotted 57,42,36,166 fully paid up equity shares of face value 5/- each during the quarter ended December 31, 2014 pursuant to a bonus issue approved by the shareholders through a postal ballot. The record date fixed by the Board of Directors was December 3, 2014. Bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged. Options granted under the stock option plan have been adjusted for bonus shares.

�

During the year ended March 31, 2014, the amount of dividend per share recognized as distribution to equity shareholder was 63. The dividend for the year ended March 31, 2014 includes 43 per share of final dividend. The total dividend appropriation for the year ended March 31, 2014 amounted to 4,233 crore, including corporate dividend tax of 615 crore.

�

The Board of Directors, in their meeting on October 10, 2014, declared an interim dividend of 30 per equity share. The total dividend appropriation for the nine months ended December 31, 2014 amounted to 2,067 crore including corporate dividend tax of 344 crore.

�

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.

�

The details of shareholder holding more than 5% shares as at December 31, 2014 and March 31, 2014 are set out below :

�

Name of the shareholder	As at December 31, 2014		As at March 31, 2014
�	No. of shares	% held	No. of shares	% held
Deutsche Bank Trust Company Americas (Depository of ADR's - legal ownership)	18,07,90,501	15.74	9,24,70,660	16.10

�

The reconciliation of the number of shares outstanding and the amount of share capital as at December 31, 2014 and March 31, 2014 is set out below:

�

Particulars	As at December 31, 2014		As at March 31, 2014
�	Number of shares	Amount	Number of shares	Amount
Number of shares at the beginning of the period	57,14,02,566	�286	57,42,36,166	287
Add: Bonus shares issued (Including bonus on treasury shares)	57,42,36,166	�287	�–	–
Less: Treasury shares	�2,833,600	�1	�2,833,600	1
Number of shares at the end of the period	114,28,05,132	�572	57,14,02,566	286

�

Stock Option Plan:

�

In accordance with the Securities and Exchange Board of India ( share based employee benefits) Regulations, 2014, the excess of the closing market price on the grant date of the RSUs over the exercise price is amortised on a straight-line basis over the vesting period.

�

The activity in the 2011 Plan during the quarter and nine months ended December 31, 2014 is set out below:

�

Particulars	Quarter ended December 31, 2014		Nine months ended December 31, 2014
�	Shares arising out of options	Weighted average exercise price	Shares arising out of options	Weighted average exercise price
2011 Plan:	�	�	�	�
Outstanding at the beginning*	�54,134	�5	�–	�–
Granted*	�–	�–	�54,134	�5
Forfeited and expired	�–	�–	�–	�–
Exercised	�–	�–	�–	�–
Outstanding at the end	�54,134	�5	�54,134	�5
Exercisable at the end	�–	�–	�–	�–

�

adjusted for bonus issue

�

The weighted average remaining contractual life of RSUs outstanding as of December 31, 2014 under the 2011 Plan was 2.64 years.

�

The differential on stock compensation expense if the ‘fair value’ of the RSU's on the date of the grant were considered instead of the ‘intrinsic value’ during each of the three months and nine months ended December 31, 2014 is less than 1 crore. Consequently, there is no impact on earnings per share.

�

The fair value for the above impact analysis is estimated on the date of grant using the Black-Scholes-Merton model with the following assumptions:

�

Particulars	Nine months ended December 31, 2014
Weighted average share price ()	3,549
Exercise price ()	5
Expected volatility (%)	30 - 37
Expected life of the option (years)	1 - 4
Expected dividends (%)	1.84
Risk-free interest rate (%)	8 - 9

�

The expected term of an RSU is estimated based on the vesting term and contractual term of the RSU, as well as expected exercise behaviour of the employee who receives the RSU. Expected volatility during the expected term of the RSU is based on historical volatility of the observed market prices of the company's publicly traded equity shares during a period equivalent to the expected term of the RSU.

�

The weighted average fair value of RSUs on grant date was 3,355/-

�

During the quarter and nine months ended December 31, 2014, the company recorded an employee compensation expense of less than 1 crore and 1 crore in the statement of profit and loss.

�

2.2 RESERVES AND SURPLUS

in crore

Particulars	As at
�	December 31, 2014	March 31, 2014
Capital reserve - Opening balance	�54	54
Add: Transferred from Surplus	�–	–
�	�54	54
Securities premium account - Opening balance	�3,069	3,065
Add: Reserves on consolidation of trust	�–	4
Less: Amount utilized for issuance of bonus shares (Refer note 2.1)	�286	–
�	�2,783	3,069
Employee Stock Options Outstanding– Opening balance (Refer note 2.1)	�–	–
Additions during the period	�1	–
�	�1	–
General reserve - Opening balance	�8,291	7,270
Add: Transferred from Surplus	�–	1,021
�	�8,291	8,291
Surplus - Opening balance	�30,392	25,383
Add: Net profit after tax transferred from Statement of Profit and Loss	�9,140	10,194
Reserves on consolidation of trust	�–	50
Dividend eliminated on consolidation of trust	�21	13
Reserves on transfer of assets and liabilities of Infosys Consulting India Limited (refer to note 2.27)	�–	6
Amount available for appropriation	�39,553	35,646
Appropriations:	�	�
Interim dividend	�1,723	1,149
Final dividend	�–	2,469
Total dividend	�1,723	3,618
Dividend tax	�344	615
Amount transferred to general reserve	�–	1,021
Surplus- Closing Balance	�37,486	30,392
�	�48,615	41,806

�

2.3 DEFERRED TAXES

in crore

Particulars	As at
�	December 31, 2014	�March 31, 2014
Deferred tax assets	�	�
Fixed assets	�250	�356
Trade receivables	�95	�44
Unavailed leave	�269	�249
Computer software	�56	�50
Accrued compensation to employees	�33	�31
Post sales client support	�118	�98
Others	�27	�17
�	�848	�845
Deferred tax liabilities	�	�
Branch profit tax	�318	�303
�	�318	�303
Deferred tax assets after set-off	�530	�542
Deferred tax liabilities after set-off	�–	�–

�

Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legally enforceable right to set-off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.

�

As at December 31, 2014 and March 31, 2014, the Company has provided for branch profit tax of 318 crore and 303 crore, respectively, for its overseas branches, as the Company estimates that these branch profits would be distributed in the foreseeable future. The change in provision for branch profit tax includes 15 crore movement on account of exchange rate during the nine months ended December 31, 2014.

�

2.4 OTHER LONG-TERM LIABILITIES

in crore

Particulars	As at
�	December 31, 2014	March 31, 2014
Others	�	�
Gratuity obligation - unamortised amount relating to plan amendment (refer to note 2.30)	�4	7
Payable for acquisition of business (refer to note 2.10.1)	�–	330
Rental deposits received from subsidiary (refer to note 2.26)	�27	27
�	�31	364

�

2.5 TRADE PAYABLES

in crore

Particulars	As at
�	December 31, 2014	�March 31, 2014
Trade payables	�123	�68
�	�123	�68
Includes dues to subsidiaries (refer to note 2.26)	�91	�30

�

2.6 OTHER CURRENT LIABILITIES

in crore

Particulars	As at
�	December 31, 2014	�March 31, 2014
Accrued salaries and benefits	�	�
Salaries and benefits	�1,126	�503
Bonus and incentives	�780	�669
Other liabilities	�	�
Provision for expenses ⁽¹⁾	�1,545	�1,296
Retention monies	�45	�72
Withholding and other taxes payable	�951	�834
Gratuity obligation - unamortised amount relating to plan amendment, current (refer to note 2.30)	�4	�4
Other payables⁽²⁾	�124	�63
Advances received from clients	�13	�21
Unearned revenue	�768	�606
Unpaid dividends	�3	�3
Payable for acquisition of business (refer to note 2.10.1)	�471	�–
Mark-to-market forward and options contracts	�27	�–
�	�5,857	�4,071
⁽¹⁾ Includes dues to subsidiaries (refer to note 2.26)	�30	�8
⁽²⁾ Includes dues to subsidiaries (refer to note 2.26)	�19	�3

�

2.7 SHORT-TERM PROVISIONS

in crore

Particulars	As at
�	December 31, 2014	March 31, 2014
Provision for employee benefits	�	�
Unavailed leave	�879	�798
Others	�	�
Proposed dividend	�–	�2,469
Provision for	�	�
Tax on dividend	�–	�420
Income taxes (net of advance tax and TDS)	�2,532	�2,105
Post-sales client support and warranties and other provisions	�374	�325
Provision towards visa related matters (Refer note 2.36)	�–	�–
�	�3,785	�6,117

�

Provision for post-sales client support and warranties and other provisions

�

The movement in the provision for post-sales client support and warranties and other provisions is as follows :

in crore

Particulars	Quarter ended		Nine months ended		Year ended
�	December 31, 2014	December 31, 2013	December 31, 2014	December 31, 2013	March 31, 2014
Balance at the beginning	�345	�190	�325	�199	199
Provision recognized/(reversed)	�38	�72	�90	�46	124
Provision utilised	�(13)	�–	�(46)	�–	–
Exchange difference during the period	�4	�(2)	�5	�15	2
Balance at the end	�374	�260	�374	�260	325

�

Provision for post-sales client support and other provisions are expected to be utilized over a period of 6 months to 1 year.

�

2.8 FIXED ASSETS

�

Following are the changes in the carrying value of fixed assets for the nine months ended December 31, 2014:

in crore, except as otherwise stated

�

Tangible assets

Intangible assets

Total

Particulars

Land-Freehold

Land- Leasehold

Buildings ⁽¹⁾⁽²⁾

Plant and equipment ⁽²⁾

Office equipment ⁽²⁾

Computer equipment ^{(2) (4)}

Furniture and fixtures ⁽²⁾

Vehicles

Total

Intellectual property rights

Total

�

Original cost

�

As at April 1, 2014

�781

�349

�4,878

�1,090

�393

�2,178

�679

�13

�10,361

�59

10,420

Additions/
Adjustments during the period

�141

�268

�531

�183

�99

�490

�92

�2

�1,806

�–

1,806

Deductions/ Retirement during the period

�–

�(3)

�(1)

�(38)

�(7)

�(2)

�(51)

�(17)

(68)

As at December 31, 2014

�922

�617

�5,409

�1,270

�491

�2,630

�764

�13

�12,116

�42

12,158

Depreciation and amortization

�

As at April 1, 2014

�–

�1,754

�671

�215

�1,554

�441

�7

�4,642

�46

4,688

�For the period

�–

�15

�135

�127

�48

�247

�85

�2

�659

�13

672

Deductions/
Adjustments during the period

�–

�(2)

�(1)

�(30)

�(5)

�(1)

�(39)

�(17)

(56)

As at December 31, 2014

�–

�15

�1,889

�796

�262

�1,771

�521

�8

�5,262

�42

5,304

Net book value

�

As at December 31, 2014

�922

�602

�3,520

�474

�229

�859

�243

�5

�6,854

�–

6,854

�

Following are the changes in the carrying value of fixed assets for the nine months ended December 31, 2013:�

in crore, except as otherwise stated

�

Tangible assets

Intangible assets

Total

Particulars

Land-Freehold

Land- Leasehold

Buildings ⁽¹⁾⁽²⁾

Plant and equipment ⁽²⁾

Office equipment ⁽²⁾

Computer equipment ⁽³⁾

Furniture and fixtures ⁽²⁾

Vehicles

Total

Intellectual property rights

Total

�

Original cost

�

As at April 1, 2013

�492

�348

�4,053

�779

�276

�1,525

�518

�10

�8,001

�59

8,060

Additions/
Adjustments during the period

�290

�1

�444

�176

�80

�459

�112

�2

�1,564

�–

1,564

Deductions/ Retirement during the period

�(1)

�–

�(1)

�–

�(15)

�–

�(17)

�–

(17)

As at December 31, 2013

�781

�349

�4,497

�954

�356

�1,969

�630

�12

�9,548

�59

9,607

Depreciation and amortization

�

As at April 1, 2013

�–

�1,467

�547

�159

�1,053

�345

�5

�3,576

�31

3,607

�For the period

�–

�210

�91

�41

�366

�72

�1

�781

�11

792

Deductions/
Adjustments during the period

�–

�(1)

�–

�(15)

�–

�(16)

�–

(16)

As at December 31, 2013

�–

�1,677

�637

�200

�1,404

�417

�6

�4,341

�42

4,383

Net book value

�

As at December 31, 2013

�781

�349

�2,820

�317

�156

�565

�213

�6

�5,207

�17

5,224

�

Following are the changes in the carrying value of fixed assets for the year ended March 31, 2014:

in crore, except as otherwise stated

�

Tangible assets

Intangible assets

Total

Particulars

Land-Freehold

Land- Leasehold

Buildings ⁽¹⁾⁽²⁾

Plant and equipment ⁽²⁾

Office equipment ⁽²⁾

Computer equipment ⁽³⁾

Furniture and fixtures ⁽²⁾

Vehicles

Total

Intellectual property rights

Total

�

Original cost

�

As at April 1, 2013

�492

�348

�4,053

�779

�276

�1,525

�518

�10

�8,001

�59

8,060

Additions/
Adjustments during the period

�290

�1

�825

�312

�117

�672

�161

�3

�2,381

�–

2,381

Deductions/ Retirement during the period

�(1)

�–

�(1)

�–

�(19)

�–

�(21)

�–

(21)

As at March 31, 2014

�781

�349

�4,878

�1,090

�393

�2,178

�679

�13

�10,361

�59

10,420

Depreciation and amortization

�

As at April 1, 2013

�–

�1,467

�547

�159

�1,053

�345

�5

�3,576

�31

3,607

�For the period

�–

�287

�125

�56

�520

�96

�2

�1,086

�15

1,101

Deductions/
Adjustments during the period

�–

�(1)

�–

�(19)

�–

�(20)

�–

(20)

As at March 31, 2014

�–

�1,754

�671

�215

�1,554

�441

�7

�4,642

�46

4,688

Net book value

�

As at March 31, 2014

�781

�349

�3,124

�419

�178

�624

�238

�6

�5,719

�13

5,732

�

Notes:	⁽¹⁾	Buildings include 250/- being the value of 5 shares of 50/- each in Mittal Towers Premises Co-operative Society Limited.
�	⁽²⁾	Includes certain assets provided on cancellable operating lease to subsidiaries
�	⁽³⁾	The opening Balance as of April 1, 2013 includes computer equipment having gross book value of 1 crore (net book value Nil) transferred from Infosys Consulting India Limited ( Refer��note 2.27)
�	⁽⁴⁾	During the nine months ended December 31, 2014, computer equipment having net book value of 8 crore was transferred to Edgeverve Systems Limited (Refer note 2.10.2)

�

During the quarter ended June 30, 2014, the management based on internal and external technical evaluation reassessed the remaining useful life of assets primarily consisting of buildings and computers with effect from April 1, 2014. Accordingly the useful lives of certain assets required a change from the previous estimates.

�

The existing and revised useful lives are as below:

�

Category of assets	Earlier useful life (Years)	Current useful life (Years)
Building	15	22-25
Plant and machinery	5	5
Computer equipment	2-5	3-5
Furniture and fixtures	5	5
Vehicles	5	5

�

Had the Company continued with the previously assessed useful lives, charge for depreciation for the quarter and nine months ended December 31, 2014 would have been higher by 93 crore and 331 crore respectively, for assets held at April 1, 2014. The revision of the useful lives will result in the following changes in the depreciation expense as compared to the original useful life of the assets.

in crore

Particulars	Fiscal 2015	Fiscal 2016	After Fiscal 2016
Increase / (decrease) in depreciation expense	�(404)	�(145)	�549

�

The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of some of these agreements, the Company has the option to purchase or renew the properties on expiry of the lease period.

�

Tangible assets provided on operating lease to subsidiaries as at December 31, 2014 and March 31, 2014 are as follows:

in crore

Particulars	Cost	Accumulated depreciation	Net book value
Buildings	�75	�33	�42
�	�49	�32	�17
Plant and equipment	�7	�1	�6
�	�1	�–	�1
Furniture and fixtures	�6	�1	�5
�	�–	�–	�–
Office equipment	�4	�1	�3
�	�–	�–	�–

�

The aggregate depreciation charged on the above assets during the quarter and nine months ended December 31, 2014 amounted to 3 crore and 4 crore respectively (1 crore and 2 crore for the quarter and nine months ended December 31, 2013, respectively).

�

The rental income from subsidiaries for the quarter and nine months ended December 31, 2014 amounted to 11 crore and 29 crore respectively (4 crore and 13 crore for the quarter and nine months ended December 31, 2013, respectively).

�

2.9 LEASES

�

Obligations on long-term, non-cancellable operating leases

�

The lease rentals charged during the period and the obligations on long-term, non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows:

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Lease rentals recognized during the period	�41	�44	�123	�134

�

in crore

Lease obligations payable	As at
	�December 31, 2014	March 31, 2014
Within one year of the balance sheet date	�102	�125
Due in a period between one year and five years	�277	�314
Due after five years	�175	�218

�

The operating lease arrangements, are renewable on a periodic basis and for most of the leases extend upto a maximum of ten years from their respective dates of inception and relates to rented premises. Some of these lease agreements have price escalation clauses.

�

2.10 INVESTMENTS

in crore, except as otherwise stated

Particulars	As at
�	December 31, 2014	March 31, 2014
Non-current investments	�	�
Long term investments - at cost	�	�
Trade (unquoted)	�	�
Investments in equity instruments of subsidiaries	�	�
Infosys BPO Limited	�	�
3,38,22,319 (3,38,22,319) equity shares of 10/- each, fully paid	�659	659
Infosys Technologies (China) Co. Limited	�107	107
Infosys Technologies (Australia) Pty Limited	�	�
1,01,08,869 (1,01,08,869) equity shares of AUD 0.11 par value, fully paid	�66	66
Infosys Technologies, S. de R.L. de C.V., Mexico	�	�
17,49,99,990 (17,49,99,990) equity shares of MXN 1 par value, fully paid up	�65	65
Infosys Technologies (Sweden) AB	�	�
1,000 (1,000) equity shares of SEK 100 par value, fully paid	�–	–
Infosys Technologia do Brasil Ltda	�	�
3,99,99,999 (3,99,99,999) shares of BRL 1.00 par value, fully paid	�109	109
Infosys Technologies (Shanghai) Company Limited	�326	234
Infosys Consulting India Limited	�	�
Nil (Nil) equity shares of 10/- each, fully paid	�–	–
Infosys Public Services, Inc.	�	�
3,50,00,000 (3,50,00,000) shares of USD 0.50 par value, fully paid	�99	99
Lodestone Holding AG (refer to note 2.10.1)	�	�
23,350 (23,350) - Class A shares of CHF 1,000 each and 29,400 (29,400) - Class B Shares of CHF 100 each, fully paid up	�1,323	1,323
Infosys Americas Inc.	�	�
10,000 (10,000) shares of USD 10 per share, fully paid up	�1	1
Edgeverve Systems Limited (refer to note 2.10.2)	�	�
46,18,39,994 (9,99,994) equity shares of 10/- each, fully paid	�462	1
�	�3,217	2,664
Others (unquoted) (refer to note 2.10.3)	�	�
Investments in equity instruments	�7	6
Less: Provision for investments	�2	2
�	�5	4
Others (quoted)	�	�
Investments in tax free bonds (refer to note 2.10.4)	�1,300	1,300
�	�1,300	1,300
Total non-current investments	�4,522	3,968
�	�	�
Current portion of Long term investments	�	�
Quoted	�	�
Fixed Maturity Plans (refer to note 2.10.5)	�100	100
�	�100	100
Current investments – at the lower of cost and fair value	�	�
Other current investments	�	�
Unquoted	�	�
Liquid mutual fund units (refer to note 2.10.6)	�1,283	1,866
Certificates of deposit (refer to note 2.10.7)	�–	783
�	�1,283	2,649
Total current investments	�1,383	2,749
Total investments	�5,905	6,717
Aggregate amount of quoted investments excluding interest accrued but not due of 35 crore as at December 31, 2014 (48 crore as at March 31, 2014) included under Note 2.15 Short term Loans and advances	�1,400	1,400
Market value of quoted investments	�1,445	1,344
Aggregate amount of unquoted investments	�4,507	5,319
Aggregate amount of provision made for non-current unquoted investments	�2	2

�

Profit on sale of Investment is less than 1 crore each for quarter and nine months ended December 31, 2014 ( 1 crore and 2 crore for the quarter and nine months ended December 31, 2013).

�

2.10.1 Investment in Lodestone Holding AG

�

On October 22, 2012, Infosys acquired 100% of the outstanding share capital of Lodestone Holding AG, a global management consultancy firm headquartered in Zurich, Switzerland. The acquisition was executed through a share purchase agreement for an upfront cash consideration of 1,187 crore and a deferred consideration of upto 608 crore.

�

The deferred consideration is payable to the selling shareholders of Lodestone on the third anniversary of the acquisition date and is contingent upon their continued employment for a period of three years. The investment in Lodestone has been recorded at the acquisition cost and the deferred consideration is being recognised on a proportionate basis over a period of three years from the date of acquisition. An amount of 55 crore and 60 crore, representing the proportionate charge of the deferred consideration has been recognised as an expense during the quarter ended December 31, 2014 and quarter ended December 31, 2013 respectively and 168 crore and 169 crore during nine months ended December 31, 2014 and December 31, 2013 respectively.

�

2.10.2 Investment in Edgeverve Systems Limited

�

On February 14, 2014, a wholly owned subsidiary Edgeverve Systems Limited (Edgeverve) was incorporated. Edgeverve was created to focus on developing and selling products and platforms. On April 15, 2014, the Board of Directors (the Board) of Infosys authorized the Company to execute a Business Transfer Agreement and related documents with Edgeverve, subject to securing the requisite approval from shareholders in the Annual General Meeting. Subsequently, at the AGM held on June 14, 2014, the shareholders have authorized the Board to enter into a Business Transfer Agreement and related documents with Edgeverve, with effect from July 1, 2014 or such other date as may be decided by the Board. The company has undertaken an enterprise valuation by an independent valuer and accordingly the business has been transferred for a consideration of $70 million ( approximately 421 crore) with effect from July 1, 2014. Net assets amounting to 9 crore have also been transferred and accordingly a gain of 412 crore has been recorded as an exceptional item. The consideration has been settled through the issue of fully paid up shares in Edgeverve.

�

2.10.3 Details of Investments

�

The details of non-current other investments in equity instruments as at December 31, 2014 and March 31, 2014 are as follows:

in crore

Particulars	As at
�	�December 31, 2014	March 31, 2014
OnMobile Systems Inc., (formerly Onscan Inc.) USA	�	�
21,54,100 (21,54,100) common stock at USD 0.4348 each, fully paid, par value USD�0.001 each	�4	�4
Merasport Technologies Private Limited	�	�
2,420 (2,420) equity shares at 8,052/- each, fully paid, par value 10/- each	�2	�2
Global Innovation and Technology Alliance	�	�
10,000 (5,000) equity shares at 1,000/- each, fully paid, par value 1,000/- each	�1	�–
�	�7	�6
Less: Provision for investment	�2	�2
�	�5	�4

�

2.10.4 Details of Investments in tax free bonds

�

The balances held in tax free bonds as at December 31, 2014 and March 31, 2014 is as follows:

in crore

Particulars	Face Value	As at December 31, 2014		As at March 31, 2014
�	�	�Units	Amount	�Units	Amount
7.18% Indian Railway Finance Corporation Limited Bonds 19FEB2023	�1,000/-	20,00,000	�201	20,00,000	201
7.34% Indian Railway Finance Corporation Limited Bonds 19FEB2028	�1,000/-	21,00,000	�211	21,00,000	211
7.93% Rural Electrification Corporation Limited Bonds 27MAR2022	�1,000/-	2,00,000	�21	2,00,000	21
8.26% India Infrastructure Finance Company Limited Bonds 23AUG28	�10,00,000/-	1,000	�100	1,000	100
8.30% National Highways Authority of India Bonds 25JAN2027	�1,000/-	5,00,000	�53	5,00,000	53
8.35% National Highways Authority of India Bonds 22NOV2023	�10,00,000/-	1,500	�150	1,500	150
8.46% India Infrastructure Finance Company Limited Bonds 30AUG2028	�10,00,000/-	2,000	�200	2,000	200
8.46% Power Finance Corporation Limited Bonds 30AUG2028	�10,00,000/-	1,500	�150	1,500	150
8.48% India Infrastructure Finance Company Limited Bonds 05SEP2028	�10,00,000/-	�450	�45	�450	45
8.54% Power Finance Corporation Limited Bonds 16NOV2028	�1,000/-	5,00,000	�50	5,00,000	50
8.10% Indian Railway Finance Corporation Limited Bonds 23FEB2027	�1,000/-	5,00,000	�54	5,00,000	54
8.20% Power Finance Corporation Limited Bonds 2022	�1,000/-	5,00,000	�50	5,00,000	50
8.00% Indian Railway Finance Corporation Limited Bonds 2022	�1,000/-	1,50,000	�15	1,50,000	15
�	�	64,56,450	�1,300	64,56,450	1,300

�

2.10.5 Details of Investments in Fixed Maturity Plans

�

The balances held in Fixed Maturity Plans as at December 31, 2014 and March 31, 2014 is as follows:

in crore

Particulars	As at December 31, 2014		As at March 31, 2014
�	�Units	Amount	Units	Amount
UTI - Fixed Term Income Fund Series - XVII –XIII	2,50,00,000	�25	2,50,00,000	�25
HDFC Fixed Maturity Plans - Series 29	2,50,00,000	�25	2,50,00,000	�25
DSP BlackRock FMP Series 146 12M - Dir - Growth	2,50,00,000	�25	2,50,00,000	�25
DSP Black Rock FMP Series 151 12M - Dir - Growth	2,50,00,000	�25	2,50,00,000	�25
�	10,00,00,000	�100	10,00,00,000	�100

�

2.10.6 Details of Investments in liquid mutual fund units

�

The balances held in liquid mutual fund units as at December 31, 2014 is as follows:

in crore

Particulars	�Units	Amount
IDFC Cash Fund Daily Dividend - Direct Plan	27,22,774	�273
Reliance Liquid Fund - Treasury Plan - Direct Daily Dividend Option	23,37,194	�357
UTI-Liquid Cash Plan- Institutional - Direct Plan - Daily Dividend Reinvestment	16,01,715	�163
L & T Liquid Fund Direct Plan - Daily Dividend Reinvestment-Reinvestment Plan	16,80,322	�170
HDFC Liquid Fund - Direct Plan - Daily Dividend Reinvestment	9,85,29,712	�101
ICICI Prudential Liquid - Direct Plan- Daily Dividend	2,18,93,260	�219
�	12,87,64,977	�1,283

�

The balances held in liquid mutual fund units as at March 31, 2014 is as follows:

in crore

Particulars	�Units	Amount
SBI Premier Liquid Fund - Direct Plan - Daily Dividend Reinvestment	14,96,454	�150
IDFC Cash Fund Daily Dividend - Direct Plan	23,95,149	�240
Tata Liquid Fund Direct Plan - Daily Dividend	24,61,026	�274
HDFC Liquid Fund-Direct Plan- Daily Dividend Reinvestment	33,44,09,159	�341
Religare Invesco Liquid Fund-Direct Plan Daily Dividend	12,704	�1
Reliance Liquidity Fund-Direct Plan Daily Dividend Reinvestment Option	35,45,234	�355
L & T Liquid Fund Direct Plan - Daily Dividend Reinvestment	14,82,628	�150
UTI Liquid Cash Plan - Institutional - Direct Plan - Daily Dividend Reinvestment	11,78,546	�120
Birla Sun Life Floating Rate Fund-STP-DD-Direct Reinvestment	2,34,93,259	�235
�	37,04,74,159	�1,866

�

2.10.7 Details of Investments in certificate of deposits

�

There is no balance in certificate of deposits as at December 31, 2014.

�

The balances held in certificates of deposit as at March 31, 2014 is as follows:

in crore

Particulars	Face value	�Units	Amount
Oriental Bank of Commerce	100,000/-	�48,500	�454
IDBI Bank Limited	100,000/-	�10,000	�93
Corporation Bank	100,000/-	�8,000	�75
Union Bank of India	100,000/-	�5,000	�46
Indian Overseas Bank	100,000/-	�5,000	�46
HDFC Bank	100,000/-	�5,000	�46
Vijaya Bank	100,000/-	�2,500	�23
�	�	�84,000	�783

�

2.11 LONG-TERM LOANS AND ADVANCES

in crore

Particulars	As at
�	�December 31, 2014	�March 31, 2014
Unsecured, considered good	�	�
Capital advances	�314	�687
Security deposits	�67	�59
Rental deposits ⁽¹⁾	�45	�48
Other loans and advances	�	�
Advance income taxes (net of provisions)	�1,469	�1,417
Prepaid expenses	�8	�10
Loans and advances to employees	�	�
Housing and other loans	�4	�6
�	�1,907	�2,227
⁽¹⁾ Includes deposits with subsidiaries (refer to note 2.26)	�21	�21

�

2.12 OTHER NON-CURRENT ASSETS

in crore

Particulars	As at
�	�December 31, 2014	March 31, 2014
Others	�	�
Restricted deposits (refer to note 2.34)	�59	�43
Advance to gratuity trust (refer to note 2.30)	�21	�9
�	�80	�52

�

2.13 TRADE RECEIVABLES ⁽¹⁾

in crore

Particulars	As at
�	�December 31, 2014	March 31, 2014
Debts outstanding for a period exceeding six months	�	�
Unsecured	�	�
Considered doubtful	�160	�135
Less: Provision for doubtful debts	�160	�135
�	�–	�–
Other debts	�	�
Unsecured	�	�
Considered good⁽²⁾	�7,996	�7,336
Considered doubtful	�147	�61
�	�8,143	�7,397
Less: Provision for doubtful debts	�147	�61
�	�7,996	�7,336
�	�7,996	�7,336
⁽¹⁾Includes dues from companies where directors are interested	�9	�117
⁽²⁾ Includes dues from subsidiaries (refer to note 2.26)	�247	�129

�

2.14 CASH AND CASH EQUIVALENTS

in crore

Particulars	As at
�	�December 31, 2014	�March 31, 2014
Cash on hand	�–	�–
Balances with banks	�	�
In current and deposit accounts	�25,566	�20,600
Others	�	�
Deposits with financial institutions	�4,000	�3,500
�	�29,566	�24,100
Balances with banks in unpaid dividend accounts	�3	�3
Deposit accounts with more than 12 months maturity	�182	�182
Balances with banks held as margin money deposits against guarantees	�188	�200

�

Cash and cash equivalents as of December 31, 2014 and March 31, 2014 include restricted cash and bank balances of 191 crore and 203 crore, respectively. The restrictions are primarily on account of cash and bank balances held as margin money deposits against guarantees, unpaid dividends and balances held by consolidated trust.

�

The deposits maintained by the Company with banks and financial institutions comprise of time deposits, which can be withdrawn by the Company at any point without prior notice or penalty on the principal.

�

The details of balances as on Balance Sheet dates with banks are as follows:

in crore

Particulars	As at
�	�December 31, 2014	March 31, 2014
�In current accounts	�	�
ANZ Bank, Taiwan	�4	�1
Bank of America, USA	�682	�632
Bank of Baroda, Mauritius	�1	�–
BNP Paribas Bank, Norway	�1	�–
Citibank NA, Australia	�8	�75
Citibank NA, India	�1	�2
Citibank, Dubai	�2	�–
Citibank NA, EEFC (U.S. Dollar account)	�5	�–
Citibank NA, Japan	�16	�11
Citibank NA, New Zealand	�4	�2
Citibank NA, South Africa	�1	�1
Citibank NA, Thailand	�1	�1
Deutsche Bank, Philippines	�2	�–
Deutsche Bank, India	�7	�7
Deutsche Bank-EEFC (Euro account)	�4	�8
Deutsche Bank-EEFC (GBP account)	�10	�11
Deutsche Bank-EEFC (AUD account)	�25	�8
Deutsche Bank-EEFC (U.S. Dollar account)	�19	�63
Deutsche Bank-EEFC (CHF account)	�–	�–
Deutsche Bank, Belgium	�3	�12
Deutsche Bank, France	�15	�5
Deutsche Bank, Germany	�37	�33
Deutsche Bank, Netherlands	�3	�16
Deutsche Bank, Russia	�–	�1
Deutsche Bank, Russia (U.S. Dollar account)	�–	�13
Deutsche Bank, Singapore	�1	�10
Deutsche Bank, Spain	�–	�3
Deutsche Bank, Switzerland	�7	�3
Deutsche Bank, Switzerland (U.S. Dollar account)	�–	�2
Deutsche Bank, UK	�61	�73
Deutsche Bank-EEFC (Swiss Franc account)	�–	�1
HSBC, Hong Kong	�41	�2
ICICI Bank, India	�29	�31
ICICI Bank-EEFC (U.S. Dollar account)	�5	�8
Nordbanken, Sweden	�9	�13
Punjab National Bank, India	�1	�3
Royal Bank of Canada, Canada	�32	�22
State Bank of India	�1	�9
�	�1,038	�1,082

�

in crore

Particulars	As at
�	�December 31, 2014	�March 31, 2014
In deposit accounts	�	�
Allahabad Bank	�854	�931
Andhra Bank	�850	�753
Axis Bank	�1,030	�1,000
Bank of Baroda	�1,604	�2,125
Bank of India	�2,929	�2,461
Canara Bank	�2,062	�2,046
Central Bank of India	�1,500	�1,500
Corporation Bank	�1,750	�1,054
HDFC Bank	�1,997	�–
ICICI Bank	�3,186	�2,976
IDBI Bank	�1,399	�1,650
Indusind Bank	�75	�25
ING Vysya Bank	�100	�200
Indian Overseas Bank	�1,000	�700
Jammu and Kashmir Bank	�–	�25
Kotak Mahindra Bank	�–	�25
Oriental Bank of Commerce	�1,500	�86
Punjab National Bank	�512	�–
Syndicate Bank	�527	�783
Vijaya Bank	�962	�775
Yes Bank	�500	�200
�	�24,337	�19,315
In unpaid dividend accounts	�	�
HDFC Bank - Unpaid dividend account	�1	�1
ICICI bank - Unpaid dividend account	�2	�2
�	�3	�3
In margin money deposits against guarantees	�	�
Canara Bank	�132	�142
State Bank of India	�56	�58
�	�188	�200
Deposits with financial institutions	�	�
HDFC Limited	�4,000	�3,500
�	�4,000	�3,500
Total cash and cash equivalents as per Balance Sheet	�29,566	�24,100

�

2.15 SHORT-TERM LOANS AND ADVANCES

in crore

Particulars	As at
�	�December 31, 2014	�March 31, 2014
Unsecured, considered good	�	�
Loans to subsidiary (refer to note 2.26)	�95	�36
Others	�	�
Advances	�	�
Prepaid expenses	�52	�98
For supply of goods and rendering of services	�36	�72
Withholding and other taxes receivable	�1,180	�987
Others⁽¹⁾	�41	�20
�	�1,404	�1,213
Restricted deposits (refer to note 2.34)	�921	�934
Unbilled revenues⁽²⁾	�2,528	�2,392
Interest accrued but not due	�142	�92
Loans and advances to employees	�	�
Housing and other loans	�53	�64
Salary advances	�135	�127
Security deposits	�1	�8
Mark-to-market forward and options contracts	�28	�217
Rental deposits	�7	�5
�	�5,219	�5,052
Unsecured, considered doubtful	�	�
Loans and advances to employees	�–	�6
�	�5,219	�5,058
Less: Provision for doubtful loans and advances to employees	�–	�6
�	�5,219	�5,052
⁽¹⁾ Includes dues from subsidiaries (refer to note 2.26)	�38	�13
⁽²⁾ Includes dues from subsidiaries (refer to note 2.26)	�4	�–

�

2.16 INCOME FROM SOFTWARE SERVICES AND PRODUCTS

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Income from software services	�11,787	�11,039	�34,186	�31,602
Income from software products	�405	�495	�1,188	�1,373
�	�12,192	�11,534	�35,374	�32,975

�

2.17 OTHER INCOME�

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Interest received on deposits with banks and others	�668	�541	�1,912	�1,554
Dividend received on investment in mutual fund units	�32	�35	�121	�108
Miscellaneous income, net	�25	�7	�49	�20
Gains / (losses) on foreign currency, net	�98	�125	�364	�92
�	�823	�708	�2,446	�1,774

�

2.18 EXPENSES�

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Employee benefit expenses	�	�	�	�
Salaries and bonus including overseas staff expenses	�6,192	�6,049	�18,489	17,991
Contribution to provident and other funds	�132	�84	�379	264
Employee compensation expense (Refer note 2.1)	�–	�–	�1	–
Staff welfare	�34	�25	�63	42
�	�6,358	�6,158	�18,932	18,297
Cost of technical sub-contractors	�	�	�	�
Technical sub-contractors - subsidiaries	�344	�425	�1,002	1,068
Technical sub-contractors - others	�433	�286	�1,071	888
�	�777	�711	�2,073	1,956
Travel expenses	�	�	�	�
Overseas travel expenses	�296	�291	�945	929
Travelling and conveyance	�33	�24	�90	73
�	�329	�315	�1,035	1,002
Cost of software packages and others	�	�	�	�
For own use	�253	�213	�632	477
Third party items bought for service delivery to clients	�37	�63	�124	138
�	�290	�276	�756	615
Communication expenses	�	�	�	�
Telephone charges	�64	�58	�191	176
Communication expenses	�52	�23	�103	68
�	�116	�81	�294	244

�

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Other expenses	�	�	�	�
Office maintenance	�94	�85	�263	235
Power and fuel	�48	�49	�145	142
Brand building	�26	�20	�70	64
Rent	�41	�44	�123	134
Rates and taxes, excluding taxes on income	�38	�17	�86	59
Repairs to building	�34	�9	�59	21
Repairs to plant and machinery	�25	�11	�47	26
Computer maintenance	�19	�29	�69	72
Consumables	�9	�5	�22	13
Insurance charges	�11	�9	�32	25
Provision for post-sales client support and warranties	�12	�20	�28	(6)
Commission to non-whole time directors	�2	�2	�6	7
Provision for bad and doubtful debts and advances	�(42)	�22	�116	92
Auditor's remuneration	�	�	�	�
Statutory audit fees	�–	�–	�1	1
Other services	�–	�–	�–	–
Bank charges and commission	�3	�3	�4	5
�Contributions towards CSR (Refer Note 2.35)	�59	�–	�179	–
�Others	�116	�49	�176	331
�	�495	�374	�1,426	1,221

�

2.19 TAX EXPENSE

in crore

�	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Current tax	�	�	�	�
Income tax	�1,172	�1,131	�3,491	�2,983
Deferred tax	�25	�(35)	�(3)	�(179)
�	�1,197	�1,096	�3,488	�2,804

�

During the quarter ended December 31, 2014 and December 31, 2013, the company had reversal (net of provisions) of 64 crore and 17 crore, respectively, pertaining to tax relating to prior years.

�

During the nine months ended December 31, 2014 and December 31, 2013, the company had a reversal (net of provisions) of 113 crore and 29 crore, respectively, pertaining to tax relating to prior years.

�

The revision in the useful life of assets held at April 1, 2014 has resulted in a decrease in deferred tax credit by 40 crore and 123 crore for the quarter and nine months ended December 31, 2014 respectively and will result in a decrease in deferred tax credit by 165 crore for the year ended March 31, 2015 (Refer note 2.8).

�

Income taxes

�

The provision for taxation includes tax liabilities in India on the company’s global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries as per Indian Income Tax Act, 1961. Infosys' operations are conducted through Software Technology Parks('STPs') and Special Economic Zones ('SEZs'). Income from STPs were tax exempt for the first 10 years from the fiscal year in which the unit commences software development, or March 31, 2011 which ever is earlier. Income from SEZs Unit is fully tax exempt for the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling certain conditions.

�

2.20 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

in crore

Particulars	As at
�	December 31, 2014	�March 31, 2014
Contingent liabilities :	�	�
Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favour of various government authorities and others	�24	�24
Claims against the Company, not acknowledged as debts⁽¹⁾	�166	�169
[Net of amount paid to statutory authorities 1,716 crore (1,716 crore)]	�	�
Commitments :	�	�
Estimated amount of unexecuted capital contracts	�1,133	�827
(net of advances and deposits)	�	�

�

⁽¹⁾

Claims against the company not acknowledged as debts include demand from the Indian Income tax authorities for payment of additional tax of 1,548 crore (1,548 crore), including interest of 430 crore (430 crore) upon completion of their tax review for fiscal 2006, fiscal 2007,fiscal 2008 and fiscal 2009. These income tax demands are mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The tax demand for fiscal 2007, fiscal 2008 and fiscal 2009 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units. The matter for fiscal 2006, fiscal 2007,fiscal 2008 and fiscal 2009 are pending before the Commissioner of Income tax ( Appeals) Bangalore. The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

�

2.21 DERIVATIVE INSTRUMENTS

�

The following table gives details in respect of outstanding foreign exchange forward and option contracts:

�

�	As at
�	December 31, 2014		March 31, 2014
�	in million	in crore	in million	in crore
Forward contracts outstanding	�	�	�	�
In USD	�689	�4,344	�724	�4,338
In Euro	�59	�452	�49	�405
In GBP	�68	�672	�73	�732
In AUD	�90	�465	�75	�415
Options outstanding	�	�	�	�
In USD	�65	�410	�20	�120
�	�	�6,343	�	�6,010

�

As of the Balance Sheet date, the Company's net foreign currency exposures that are not hedged by a derivative instrument or otherwise is Nil (Nil as at March 31, 2014).

�

The foreign exchange forward & option contracts mature within 12 months. The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining period as of the balance sheet date:

�

in crore

Particulars	As at
�	December 31 , 2014	�March 31, 2014
Not later than one month	�1,535	�1,137
Later than one month and not later than three months	�3,043	�2,674
Later than three months and not later than one year	�1,765	�2,199
�	�6,343	�6,010

�

The Company recognized a gain of 53 crore and 227 crore on derivative instruments during the quarter ended December 31, 2014 and December 31, 2013, respectively, which is included in other income.

�

The Company recognized a gain of 210 crore and a loss of 511 crore on derivative instruments during the nine months ended December 31, 2014 and December 31, 2013, respectively, which is included in other income.

�

2.22 QUANTITATIVE DETAILS

�

The Company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under paragraphs�5 (viii)(c) of general instructions for preparation of the statement of profit and loss as per Schedule III to the Companies�Act, 2013.

�

2.23 IMPORTS (VALUED ON THE COST, INSURANCE AND FREIGHT BASIS)

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	�2014	�2013	�2014	�2013
Capital goods	�123	�128	�302	�306
�	�123	�128	�302	�306

�

2.24 ACTIVITY IN FOREIGN CURRENCY

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	�2014	�2013	�2014	�2013
Earnings in foreign currency	�	�	�	�
Income from software services and products	�11,880	�11,233	�34,529	�32,095
Interest received from banks and others	�2	�1	�4	�6
�	�11,882	�11,234	�34,533	�32,101
Expenditure in foreign currency	�	�	�	�
Overseas travel expenses (including visa charges)	�238	�214	�765	�795
Professional charges	�61	�123	�132	�467
Technical sub-contractors - subsidiaries	�290	�385	�849	�954
Overseas salaries and incentives	�4,067	�4,158	�11,877	�12,555
Other expenditure incurred overseas for software development	�937	�475	�2,304	�1,787
�	�5,593	�5,355	�15,927	�16,558
Net earnings in foreign currency	�6,289	�5,879	�18,606	�15,543

�

2.25 DIVIDENDS REMITTED IN FOREIGN CURRENCIES

�

The Company remits the equivalent of the dividends payable to equity shareholders and holders of ADS. For ADS holders the dividend is remitted in Indian rupees to the depository bank, which is the registered shareholder on record for all owners of the Company’s ADSs. The depositary bank purchases the foreign currencies and remits dividends to the ADS holders.

�

The particulars of dividends remitted are as follows:

�

in crore

Particulars	Number of Non-resident share holders	Number of shares to which the dividends relate	Nine months ended December 31,
�	�	�	�2014	�2013
Interim dividend for fiscal 2015	2	8,23,17,281	�247	�–
Final dividend for fiscal 2014	2	9,30,32,691	�400	�–
Interim dividend for fiscal 2014	2	8,76,42,560	�–	�175
Final dividend for fiscal 2013	2	7,19,18,545	�–	�194

�

2.26 RELATED PARTY TRANSACTIONS

�

List of related parties:

�

Name of subsidiaries	Country	Holding as at
�	�	December 31, 2014	March 31, 2014
Infosys BPO	India	99.98%	99.98%
Infosys China	China	100%	100%
Infosys Mexico	Mexico	100%	100%
Infosys Sweden	Sweden	100%	100%
Infosys Shanghai	China	100%	100%
Infosys Brasil	Brazil	100%	100%
Infosys Public Services, Inc.	U.S.	100%	100%
Infosys Consulting India Limited ⁽¹⁾	India	�–	�–
Infosys Americas ⁽²⁾	U.S.	100%	100%
Infosys BPO s. r. o ⁽³⁾	Czech Republic	99.98%	99.98%
Infosys BPO (Poland) Sp Z.o.o ⁽³⁾	Poland	99.98%	99.98%
Infosys BPO S.DE R.L. DE.C.V ^(3)(12)	Mexico	�–	�–
Infosys McCamish Systems LLC ⁽³⁾	U.S.	99.98%	99.98%
Portland Group Pty Ltd⁽³⁾⁽⁴⁾	Australia	99.98%	99.98%
Portland Procurement Services Pty Ltd⁽⁸⁾	Australia	�–	99.98%
Infosys Australia ⁽⁵⁾	Australia	100%	100%
Edgeverve Systems Limited ⁽¹¹⁾	India	100%	100%
Lodestone Holding AG	Switzerland	100%	100%
Lodestone Management Consultants (Canada) Inc. ^(6)(10)	Canada	�–	�–
Lodestone Management Consultants Inc. ⁽⁶⁾	U.S.	100%	100%
Lodestone Management Consultants Pty Limited ⁽⁶⁾	Australia	100%	100%
Lodestone Management Consultants AG ⁽⁶⁾	Switzerland	100%	100%
Lodestone Augmentis AG ⁽⁹⁾	Switzerland	100%	100%
Hafner Bauer & �dman GmbH ⁽⁶⁾	Switzerland	100%	100%
Lodestone Management Consultants (Belgium) S.A. ⁽⁷⁾	Belgium	99.90%	99.90%
Lodestone Management Consultants GmbH ⁽⁶⁾	Germany	100%	100%
Lodestone Management Consultants Pte Ltd. ⁽⁶⁾	Singapore	100%	100%
Lodestone Management Consultants SAS ⁽⁶⁾	France	100%	100%
Lodestone Management Consultants s.r.o. ⁽⁶⁾	Czech Republic	100%	100%
Lodestone Management Consultants GmbH ⁽⁶⁾	Austria	100%	100%
Lodestone Management Consultants Co., Ltd. ⁽⁶⁾	China	100%	100%
Lodestone Management Consultants Ltd. ⁽⁶⁾	UK	100%	100%
Lodestone Management Consultants B.V. ⁽⁶⁾	Netherlands	100%	100%
Lodestone Management Consultants Ltda. ⁽⁷⁾	Brazil	99.99%	99.99%
Lodestone Management Consultants Sp. z.o.o. ⁽⁶⁾	Poland	100%	100%
Lodestone Management Consultants Portugal, Unipessoal, Lda. ⁽⁶⁾	Portugal	100%	100%
S.C. Lodestone Management Consultants S.R.L. ⁽⁶⁾	Romania	100%	100%
Lodestone Management Consultants S.R.L. ⁽⁶⁾	Argentina	100%	100%
Infosys Canada Public Services Ltd.⁽¹³⁾	Canada	–	–

�

⁽¹⁾

⁽²⁾

Incorporated effective June 25, 2013

⁽³⁾

Wholly owned subsidiaries of Infosys BPO.

⁽⁴⁾

On January 4, 2012, Infosys BPO acquired 100% of the voting interest in Portland Group Pty Ltd

⁽⁵⁾

Under liquidation

⁽⁶⁾

Wholly owned subsidiaries of Lodestone Holding AG

⁽⁷⁾

Majority owned and controlled subsidiaries of Lodestone Holding AG

⁽⁸⁾

Wholly owned subsidiary of Portland Group Pty Ltd. Liquidated effective May 14, 2014.

⁽⁹⁾

Wholly owned subsidiary of Lodestone Management Consultant AG

⁽¹⁰⁾

Liquidated effective December 31, 2013

⁽¹¹⁾

Incorporated effective February 14, 2014 (Refer note 2.10.2)

⁽¹²⁾

Incorporated effective February 14, 2014

⁽¹³⁾

Incorporated effective December 19, 2014

�

Infosys has provided guarantee for performance of certain contracts entered into by its subsidiaries.

�

List of other related party

�

Particulars	Country	Nature of relationship
Infosys Limited Employees' Gratuity Fund Trust	India	Post-employment benefit plan of Infosys
Infosys Limited Employees' Provident Fund Trust	India	Post-employment benefit plan of Infosys
Infosys Limited Employees' Superannuation Fund Trust	India	Post-employment benefit plan of Infosys
Infosys Science Foundation	India	Controlled trust

�

Refer Notes 2.30, 2.31 and 2.32 for information on transactions with post-employment benefit plans mentioned above.

�

List of key management personnel	�
Whole time directors	Executive council members (*)
S. D. Shibulal (resigned effective July 31, 2014)	U. Ramadas Kamath
Srinath Batni (resigned effective July 31, 2014)	Chandrashekar Kakal^#
V. Balakrishnan (resigned effective December 31, 2013)	Nandita Gurjar
Ashok Vemuri (resigned effective September 12, 2013)	Stephen R. Pratt (resigned effective January 31, 2014)
B. G. Srinivas (resigned effective June 10, 2014)	Basab Pradhan (resigned effective July 12, 2013)
U B Pravin Rao (effective January 10, 2014)	Prasad Thrikutam^#
Dr. Vishal Sikka (appointed effective June 14, 2014)	Rajiv Bansal
�	Srikantan Moorthy (effective April 1, 2013)
Non-whole-time directors	Sanjay Purohit (effective April 1, 2013)
N. R. Narayana Murthy (resigned effective October 10, 2014)	Ranganath D Mavinakere (effective August 19, 2013)
S. Gopalakrishnan (resigned effective October 10, 2014)	Binod Hampapur Rangadore (effective August 19, 2013)
K.V.Kamath	Nithyanandan Radhakrishnan (effective August 19, 2013)^#
Deepak M. Satwalekar (retired effective November 13, 2013)	V.G. Dheeshjith (effective November 1, 2013)
Dr. Omkar Goswami (retired effective December 31, 2014)	Ganesh Gopalakrishnan (effective November 1, 2013)
David L. Boyles (retired effective January 17, 2014)	Haragopal Mangipudi (effective November 1, 2013)^#
Prof. Jeffrey S. Lehman	Manish Tandon (effective November 1, 2013)
R. Seshasayee	K. Muralikrishna (effective November 1, 2013)
Ann M. Fudge (retired effective June 14, 2014)	S. Ravi Kumar (effective November 1, 2013)
Ravi Venkatesan	Sanjay Jalona�(effective November 1, 2013)
Leo Puri (appointed effective April 11, 2013 and resigned effective August 14, 2013)	Jackie Korhonen (appointed effective November 1, 2013)^#
Kiran Mazumdar Shaw (appointed effective January 10, 2014)	Subrahmanyam Goparaju (appointed effective November 1, 2013 and resigned effective December 27, 2013)
Carol M. Browner (appointed effective April 29, 2014)	�
Prof. John W. Etchemendy (appointed effective December 4, 2014)	# since resigned
�	�
(*) Executive council dissolved effective April 1, 2014	�
Executive Officers (effective April 1, 2014)	�
Rajiv Bansal, Chief Financial Officer	�
Srikantan Moorthy , Group Head of Human Resource Development	�
Parvatheesam K, Company Secretary (effective September 12, 2013)	�
David D. Kennedy, General Counsel ( effective November 1, 2014)	�

�

The details of amounts due to or due from as at December 31, 2014 and March 31, 2014 are as follows:

in crore

Particulars	As at
�	December 31, 2014	�March 31, 2014
Trade Receivables	�	�
Infosys China	�15	�8
Infosys Mexico	�3	�2
Infosys Brasil	�3	�4
Infosys BPO (Including subsidiaries)	�–	�1
Lodestone Holding AG (including subsidiaries)	�21	�16
Edgeverve Systems Limited	�11	�–
Infosys Public Services	�194	�98
�	�247	�129
Loans	�	�
Lodestone Holding AG (including subsidiaries)	�55	�–
Infosys Brasil	�40	�36
�	�95	�36
Other receivables	�	�
Infosys BPO (Including subsidiaries)	�4	�2
Infosys Sweden	�–	�5
Infosys Public Services	�–	�2
Edgeverve Systems Limited	�10	�–
Lodestone Holding AG (including subsidiaries)	�24	�4
�	�38	�13
Unbilled revenues	�	�
Lodestone Holding AG (including subsidiaries)	�1	�–
Infosys BPO (Including subsidiaries)	�3	�–
�	�4	�–
Trade payables	�	�
Infosys China	�10	�14
Infosys BPO (Including subsidiaries)	�5	�4
Infosys Mexico	�1	�1
Infosys Sweden	�4	�6
Lodestone Holding AG (including subsidiaries)	�68	�4
Infosys Brasil	�3	�1
�	�91	�30
Other payables	�	�
Infosys BPO (Including subsidiaries)	�6	�3
Infosys China	�–	�(12)
Infosys Mexico	�2	�2
Lodestone Holding AG (including subsidiaries)	�2	�4
Infosys Brasil	�2	�6
Edgeverve Systems Limited	�6	�–
Infosys Public Services	�1	�–
�	�19	�3
Provision for expenses	�	�
Infosys BPO (Including subsidiaries)	�3	�2
Edgeverve Systems Limited	�27	–
Lodestone Holding AG (including subsidiaries)	�–	�6
�	�30	�8
Rental Deposit given for shared services	�	�
Infosys BPO	�21	�21
Rental Deposit taken for shared services	�	�
Infosys BPO	�27	�27

�

The details of the related party transactions entered into by the Company, in addition to the lease commitments described in note 2.8, for the quarter and nine months ended December 31, 2014 and December 31, 2013 are as follows:

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Capital transactions:	�	�	�	�
Financing transactions	�	�	�	�
Infosys Americas	�–	�–	�–	1
Infosys Shanghai	�92	�–	�92	–
Lodestone Holding AG	�–	�136	�–	136
Edgeverve Systems Limited	�–	�–	�461	–
�	�92	�136	�553	137
Loans	�	�	�	�
Lodestone Holding AG (Including subsidiaries) ⁽¹⁾	�55	�(136)	�55	–
Edgeverve Systems Limited⁽²⁾	�–	�–	�–	–
Infosys Brasil	�–	�11	�–	11
�	�55	�(125)	�55	11
Revenue transactions:	�	�	�	�
Purchase of services	�	�	�	�
Infosys China	�34	�51	�108	182
Lodestone Holding AG (including subsidiaries)	�188	�323	�607	735
Infosys BPO (Including subsidiaries)	�56	�45	�162	136
Infosys Sweden	�10	�1	�32	2
Infosys Mexico	�3	�4	�8	10
Edgeverve Systems limited	�51	�–	�80	–
Infosys Brasil	�2	�1	�5	3
�	�344	�425	�1,002	1,068
Purchase of shared services including facilities and personnel	�	�	�	�
Infosys BPO (including subsidiaries)	�22	�19	�59	55
�	�22	�19	�59	55
Interest income	�	�	�	�
Lodestone Holding AG (including subsidiaries)	�1	�–	�1	4
Infosys Public Services	�–	�2	�–	4
Infosys Brasil	�1	�–	�2	1
�	�2	�2	�3	9
Sale of services	�	�	�	�
Infosys China	�3	�5	�7	6
Infosys Mexico	�3	�7	�8	7
Lodestone Holding AG (including subsidiaries)	�7	�8	�18	10
Infosys Brasil	�3	�2	�6	4
Infosys BPO (including subsidiaries)	�22	�19	�67	54
Edgeverve Systems limited	�15	�–	�31	–
Infosys Public Services	�191	�154	�554	427
�	�244	�195	�691	508
Sale of shared services including facilities and personnel	�	�	�	�
Edgeverve Systems limited	�7	�–	�16	–
Infosys BPO (including subsidiaries)	�10	�9	�29	30
�	�17	�9	�45	30
Profit on transfer fo business	�	�	�	�
Edgeverve Systems limited (Refer Note 2.10.2)	�–	�–	�412	–
�	�–	�–	�412	–

�

⁽¹⁾

During the quarter ended December 31, 2014 loan of 10 crore was given and repaid.

⁽²⁾

During the nine months ended December 31, 2014 loan of 12 crore was given and repaid.

�

The table below describes the compensation to key managerial personnel which comprise directors and members of executive council:

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Salaries and other employee benefits to whole-time directors and members of executive council ⁽¹⁾⁽²⁾	�7	�14	�21	36
Commission and other benefits to non-executive/independent directors	�3	�3	�7	8
Total	�10	�17	�28	44

�

⁽¹⁾

Executive Council dissolved effective April 1, 2014 and Executive officers have been appointed with effect from that date.

⁽²⁾

Includes stock compensation expense of 1 crore.

�

2.27 Merger of Infosys Consulting India Limited

�

The Hon’ble High Court of Karnataka sanctioned the scheme of amalgamation of Infosys Consulting India Limited (ICIL) with Infosys Limited with an effective date of August 23, 2013 and an appointed date of January 12, 2012. ICIL was a wholly owned subsidiary of Infosys Limited and was engaged in software related consultancy services. The merger of ICIL into Infosys Limited has been accounted for under pooling of interest method referred to in Accounting Standard 14, Accounting for Amalgamation (AS-14).

�

All the assets and liabilities of ICIL on and after the appointed date and prior to the effective date have been transferred to Infosys Limited on a going concern basis. As ICIL was a wholly owned subsidiary of Infosys Limited, no shares have been allotted to the shareholders upon the scheme becoming effective.

�

2.28 RESEARCH AND DEVELOPMENT EXPENDITURE

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Expenditure at Department of Scientific and Industrial Research (DSIR) approved R&D centres (eligible for weighted deduction)⁽¹⁾	�	�	�	�
Capital Expenditure	�–	�–	�–	�–
Revenue Expenditure	�39	�66	�124	�199
Other R&D Expenditure	�	�	�	�
Capital Expenditure	�13	�–	�13	�–
Revenue Expenditure	�121	�127	�329	�496
Total R&D Expenditure	�	�	�	�
Capital Expenditure	�13	�–	�13	�–
Revenue Expenditure	�160	�193	�453	�695

�

⁽¹⁾

During the nine months ended December 31, 2014 and December 31, 2013, the company received weighted tax deduction on eligible research and development expenditures based on the approval received from Department of Scientific and Industrial Research (DSIR) on November 23, 2011 which has been renewed up to March 31, 2017 with effect from April 1, 2014.The weighted tax deduction is equal to 200% of such expenditures incurred.

�

The eligible R&D revenue and capital expenditure are 39 crore and Nil for the quarter ended December 31, 2014 and 66 crore and Nil towards revenue and capital expenditure for the quarter ended December 31, 2013.

�

The eligible R&D revenue and capital expenditure are 124 crore and Nil for the nine months ended December 31, 2014 and 199 crore and Nil towards revenue and capital expenditure for the nine months ended December 31, 2013.

�

2.29 SEGMENT REPORTING

�

The Company's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. Effective quarter ended March 31, 2014 , the Company reorganized its business to strengthen its focus on growing existing client relationships and increasing market share through service differentiation and operational agility. Consequent to the internal reorganization there were changes effected in the reportable industry segments based on the "management approach" as laid down in AS 17, Segment reporting and an additional segment, Life Sciences and Healthcare was identified. The Chief Executive Officer evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by industry classes and geographic segmentation of customers. Accordingly, segment information has been presented both along industry classes and geographic segmentation of customers, industry being the primary segment. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

�

Industry segments for the Company are primarily enterprises in Financial Services and Insurance (FSI) , enterprises in Manufacturing (MFG), enterprises in the Energy & utilities, Communication and Services (ECS),enterprises in Retail, Consumer packaged goods and Logistics (RCL) and enterprises in Life Sciences and Healthcare (LSH). Geographic segmentation is based on business sourced from that geographic region and delivered from both on-site and off-shore. 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. Consequent to the above change in the composition of reportable industry segments, the prior year comparatives have been restated.

�

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. Geographical information on revenue and industry revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

�

Industry Segments

�

Quarter ended December 31, 2014 and December 31, 2013:

in crore

Particulars	�FSI	�MFG	�ECS	�RCL	�LSH	�Total
Income from software services and products	�4,161	�2,620	�2,556	�2,113	�742	�12,192
�	�4,005	�2,437	�2,277	�2,128	�687	�11,534
�Identifiable operating expenses	�1,989	�1,330	�1,199	�979	�364	�5,861
�	�1,916	�1,235	�1,084	�1,025	�344	�5,604
�Allocated expenses	�887	�582	�568	�470	�166	�2,673
�	�846	�543	�506	�474	�153	�2,522
�Segmental operating income	�1,285	�708	�789	�664	�212	�3,658
�	�1,243	�659	�687	�629	�190	�3,408
�Unallocable expenses	�	�	�	�	�	�229
�	�	�	�	�	�	�285
�Other income, net	�	�	�	�	�	�823
�	�	�	�	�	�	�708
�Profit before exceptional item and tax	�	�	�	�	�	�4,252
�	�	�	�	�	�	�3,831
�Exceptional item	�	�	�	�	�	�–
�	�	�	�	�	�	�–
�Profit before tax	�	�	�	�	�	�4,252
�	�	�	�	�	�	�3,831
�Tax expense	�	�	�	�	�	�1,197
�	�	�	�	�	�	�1,096
�Profit after taxes and exceptional item	�	�	�	�	�	�3,055
�	�	�	�	�	�	�2,735

�

Nine months ended December 31, 2014 and December 31, 2013:

in crore

Particulars �	�FSI	�MFG	�ECS	�RCL	�LSH	�Total
�Income from software services and products	�12,049	�7,596	�7,379	�6,272	�2,078	�35,374
�	�11,451	�7,024	�6,553	�6,042	�1,905	�32,975
�Identifiable operating expenses	�5,905	�3,853	�3,601	�2,954	�1,078	�17,391
�	�5,574	�3,623	�3,024	�2,999	�1,002	�16,222
�Allocated expenses	�2,507	�1,640	�1,591	�1,354	�449	�7,541
�	�2,563	�1,652	�1,538	�1,419	�448	�7,620
�Segmental operating income	�3,637	�2,103	�2,187	�1,964	�551	�10,442
�	�3,314	�1,749	�1,991	�1,624	�455	�9,133
�Unallocable expenses	�	�	�	�	�	�672
�	�	�	�	�	�	�792
�Other income, net	�	�	�	�	�	�2,446
�	�	�	�	�	�	�1,774
�Profit before exceptional item and tax	�	�	�	�	�	�12,216
�	�	�	�	�	�	�10,115
�Exceptional item	�	�	�	�	�	�412
�	�	�	�	�	�	�–
�Profit before tax	�	�	�	�	�	�12,628
�	�	�	�	�	�	�10,115
�Tax expense	�	�	�	�	�	�3,488
�	�	�	�	�	�	�2,804
�Profit after taxes and exceptional item	�	�	�	�	�	�9,140
�	�	�	�	�	�	�7,311

�

Geographic Segments

�

Quarter ended December 31, 2014 and December 31, 2013:

in crore

Particulars	�North America	�Europe	�India	�Rest of the World	�Total
Income from software services and products	�7,829	�2,625	�358	�1,380	�12,192
�	�7,211	�2,587	�338	�1,398	�11,534
�Identifiable operating expenses	�3,793	�1,277	�143	�648	�5,861
�	�3,475	�1,312	�207	�610	�5,604
�Allocated expenses	�1,740	�580	�69	�284	�2,673
�	�1,604	�570	�65	�283	�2,522
�Segmental operating income	�2,296	�768	�146	�448	�3,658
�	�2,132	�705	�66	�505	�3,408
�Unallocable expenses	�	�	�	�	�229
�	�	�	�	�	�285
�Other income, net	�	�	�	�	�823
�	�	�	�	�	�708
�Profit before exceptional item and tax	�	�	�	�	�4,252
�	�	�	�	�	�3,831
�Exceptional item	�	�	�	�	�–
�	�	�	�	�	�–
�Profit before tax	�	�	�	�	�4,252
�	�	�	�	�	�3,831
�Tax expense	�	�	�	�	�1,197
�	�	�	�	�	�1,096
�Profit after taxes and exceptional item	�	�	�	�	�3,055
�	�	�	�	�	�2,735

�

Nine months ended December 31, 2014 and December 31, 2013:

in crore

Particulars	�North America	�Europe	�India	�Rest of the World	�Total
�Income from software services and products	�22,540	�7,774	�966	�4,094	�35,374
�	�20,895	�7,190	�943	�3,947	�32,975
�Identifiable operating expenses	�11,057	�3,875	�538	�1,921	�17,391
�	�10,304	�3,641	�451	�1,826	�16,222
�Allocated expenses	�4,863	�1,669	�184	�825	�7,541
�	�4,987	�1,627	�183	�823	�7,620
�Segmental operating income	�6,620	�2,230	�244	�1,348	�10,442
�	�5,604	�1,922	�309	�1,298	�9,133
�Unallocable expenses	�	�	�	�	�672
�	�	�	�	�	�792
�Other income, net	�	�	�	�	�2,446
�	�	�	�	�	�1,774
�Profit before exceptional item and tax	�	�	�	�	�12,216
�	�	�	�	�	�10,115
�Exceptional item	�	�	�	�	�412
�	�	�	�	�	�–
�Profit before tax	�	�	�	�	�12,628
�	�	�	�	�	�10,115
�Tax expense	�	�	�	�	�3,488
�	�	�	�	�	�2,804
�Profit after taxes and exceptional item	�	�	�	�	�9,140
�	�	�	�	�	�7,311

�

2.30 GRATUITY PLAN

�

The following table set out the status of the Gratuity Plan as required under AS 15.

�

Reconciliation of opening and closing balances of the present value of the defined benefit obligation and plan assets:

in crore

Particulars	�As at
�	December 31, 2014	March 31, 2014
Obligations at year beginning	668	612
Service cost	67	94
Interest cost	43	45
Transfer of obligation on amalgamation (refer to note 2.27)	–	3
Transfer of obligation (refer to note 2.10.2)	(5)	–
Actuarial (gain)/loss	37	8
Benefits paid	(93)	(94)
Obligations at year/ period end	717	668
Defined benefit obligation liability as at the balance sheet date is fully funded by the Company.	�	�
Change in plan assets	�	�
Plan assets at year beginning, at fair value	677	643
Expected return on plan assets	48	59
Actuarial gain/(loss)	1	(3)
Contributions	105	70
Benefits paid	(93)	(94)
Transfer of plan assets on amalgamation (refer to note 2.27)	–	2
Plan assets at year/ period end, at fair value	738	677
Reconciliation of present value of the obligation and the fair value of the plan assets:	�	�
Fair value of plan assets at the end of the year/period	738	677
Present value of the defined benefit obligations at the end of the year/period	717	668
Re-imbursement (obligation)/asset*	(6)	–
Asset recognized in the balance sheet	15	9
Assumptions	�	�
Interest rate	8.10%	9.20%
Estimated rate of return on plan assets	9.50%	9.55%
Weighted expected rate of salary increase	8.00%	8.00%

�

pertains to transfer of assets to group companies.

in crore

Particulars	�As at
�	December 31, 2014	March 31, 2014	March 31, 2013	March 31, 2012	March 31, 2011
Obligations at year/ period end	�717	�668	612	569	459
Plan assets at year/ period end, at fair value	�738	�677	643	582	459
Funded Status	�21	�9	�31	�13	�–
Experience adjustments:	�	�	�	�	�
(Gain)/loss:	�	�	�	�	�
Experience adjustments on plan liabilities	�(2)	�14	�(49)	�13	�18
Experience adjustments on plan assets	�(1)	�3	�–	�–	�1

�

Net gratuity cost for the quarter and nine months ended December 31, 2014 and December 31, 2013 comprises of the following components:

in crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Gratuity cost for the period	�	�	�	�
Service cost	�22	�24	�67	�71
Interest cost	�14	�11	�43	�34
Expected return on plan assets	�(16)	�(15)	�(48)	�(44)
Actuarial (gain)/loss	�12	�(23)	�36	�(52)
Plan amendment amortization	�(1)	�(1)	�(3)	�(3)
Net gratuity cost	�31	�(4)	�95	�6
Actual return on plan assets	�15	�13	�49	�42

�

As at December 31, 2014 and March 31, 2014, the plan assets have been primarily invested in insurer managed funds. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The Company expects to contribute 10 crore to the gratuity trust during the remainder of fiscal 2015.

�

Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by 37 crore, which is being amortized on a straight line basis to the statement of profit and loss over 10 years representing the average future service period of the employees. The unamortized liability as at December 31, 2014 and March 31, 2014 amounts to 8 crore and 11 crore, respectively and disclosed under 'Other long-term liabilities' and 'other current liabilities'.

�

2.31 PROVIDENT FUND

�

The Company contributed 75 crore and 214 crore towards provident fund during the quarter and nine months ended December 31, 2014, respectively (67 crore and 196 crore during the quarter and nine months ended December 31, 2013, respectively).

�

The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended December 31, 2011. The actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at December 31, 2014, March 31, 2014, March 31, 2013, March 31, 2012, and March 31, 2011.

�

The details of fund and plan asset position are given below:

in crore

Particulars	�As at
�	December 31, 2014	March 31, 2014	March 31, 2013	March 31, 2012	March 31, 2011
Plan assets at period end, at fair value	�2,872	�2,817	�2,399	�1,816	�1,579
Present value of benefit obligation at period end	�2,872	�2,817	�2,399	�1,816	�1,579
Asset recognized in balance sheet	�–	�–	�–	�–	�–

�

Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:

�

Particulars	�As at
�	December 31, 2014	March 31, 2014	March 31, 2013	March 31, 2012	March 31, 2011
Government of India (GOI) bond yield	8.10%	9.20%	7.95%	8.57%	7.98%
Remaining term of maturity	7 years	8 years	8 years	8 years	7 years
Expected guaranteed interest rate	8.75%	8.75%	8.25%	8.25%	9.50%

�

2.32 SUPERANNUATION

�

The Company contributed 55 crore and 160 crore to the Superannuation trust during the quarter and nine months ended December 31, 2014, respectively (54 crore and 152 crore during the quarter and nine months ended December 31, 2013, respectively).

�

2.33 RECONCILIATION OF BASIC AND DILUTED SHARES USED IN COMPUTING EARNINGS PER SHARE

�

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	2014	2013	2014	2013
Number of shares considered as basic weighted average shares outstanding*	114,28,05,132	114,28,05,132	114,28,05,132	114,28,05,132
Effect of dilutive common equivalent shares	�20,418	�–	�9,376	�–
Number of shares considered as weighted average shares and potential shares outstanding	114,28,25,550	114,28,05,132	114,28,14,508	114,28,05,132

�

adjusted for bonus issue. Refer Note 2.1

�

2.34 RESTRICTED DEPOSITS

�

Restricted deposits as at December 31, 2014 comprises 980 crore (977 crore as at March 31, 2014) deposited with financial institutions to settle employee-related obligations as and when they arise during the normal course of business.

�

2.35 CORPORATE SOCIAL RESPONSIBILITY (CSR)

�

As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the company. The proposed areas for CSR activities are eradication of hunger, poverty and malnutrition, promoting education and healthcare and rural development projects. The funds will be allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

�

2.36 LITIGATION

�

2.37 FUNCTION WISE CLASSIFICATION OF STATEMENT OF PROFIT AND LOSS

In crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
�	�2014	2013	�2014	2013
Income from software services and products	�12,192	�11,534	�35,374	�32,975
Software development expenses	�7,149	�6,911	�20,895	�19,991
GROSS PROFIT	�5,043	�4,623	�14,479	�12,984
Selling and marketing expenses	�674	�584	�1,916	�1,823
General and administration expenses	�711	�631	�2,121	�2,028
�	�1,385	�1,215	�4,037	�3,851
OPERATING PROFIT BEFORE DEPRECIATION	�3,658	�3,408	�10,442	�9,133
Depreciation and amortization	�229	�285	�672	�792
OPERATING PROFIT	�3,429	�3,123	�9,770	�8,341
Other income	�823	�708	�2,446	�1,774
PROFIT BEFORE EXCEPTIONAL ITEM AND TAX	�4,252	�3,831	�12,216	�10,115
Profit on transfer of business (refer to note 2.10.2)	�–	�–	�412	�–
PROFIT BEFORE TAX	�4,252	�3,831	�12,628	�10,115
Tax expense:	�	�	�	�
Current tax	�1,172	�1,131	�3,491	�2,983
Deferred tax	�25	�(35)	�(3)	�(179)
PROFIT FOR THE PERIOD	�3,055	�2,735	�9,140	�7,311

�

As per our report of even date attached

for B S R & Co. LLP

for Infosys Limited

Chartered Accountants

Firm's Registration Number:101248W/W-100022

�

Akhil Bansal

Partner

Membership No. 090906

K.V. Kamath

Chairman

Dr. Vishal Sikka

Chief Executive Officer and Managing Director

R.Seshasayee

Director

Bangalore

January 9, 2015

Rajiv Bansal

Chief Financial Officer

Parvatheesam K

Chief Risk & Compliance Officer
and Company Secretary

�

Auditors’ Report on Quarterly Financial Results and Year to Date Financial Results of Infosys Limited Pursuant to the Clause 41 of the Listing Agreement

�

The Board of Directors of Infosys Limited

�

We have audited the quarterly financial results of Infosys Limited (‘the Company’) for the quarter ended 31 December 2014 and year to date financial results for the period from 1 April 2014 to 31 December 2014, attached herewith, being submitted by the Company pursuant to the requirement of Clause 41 of the Listing Agreement, except for the disclosures regarding ‘Public Shareholding’ and ‘Promoter and Promoter Group Shareholding’ which have been traced from disclosures made by the management and have not been audited by us. These quarterly financial results as well as year to date financial results have been prepared on the basis of the interim financial statements, which are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial results based on our audit of such interim financial statements, which have been prepared in accordance with the recognition and measurement principles laid down in Accounting Standard (AS) 25, Interim Financial Reporting, issued under the Companies (Accounting Standards) Rules, 2006 which continue to apply under section 133 of the Companies Act 2013 and other accounting principles generally accepted in India.

�

In our opinion and to the best of our information and according to the explanations given to us, these quarterly and year to date financial results:

�

(i)

are presented in accordance with the requirements of Clause 41 of the Listing Agreement in this regard; and

(ii)

give a true and fair view of the net profit and other financial information for the quarter ended 31 December 2014 as well as the year to date results for the period from 1 April 2014 to 31 December 2014.

�

Further, we also report that we have, on the basis of the books of account and other records and information and explanations given to us by the management, also verified the number of shares as well as percentage of shareholdings in respect of aggregate amount of public shareholdings, as furnished by the Company in terms of Clause 35 of the Listing Agreement and found the same to be correct.

�

for B S R & Co. LLP
Chartered Accountants
Firm’s registration number: 101248W/ W-100022

�

Akhil Bansal
Partner
Membership number: 090906

Bangalore
9 January 2015

�

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