Patni's CY2005 Revenues Up 38% at US$ 450.3 Million (Rs. 20,242 Million); Net Income Higher by 11.3% at US$ 60.9 Million (Rs. 2,736 Million).MUMBAI Mumbai (m  mbī`, m m`bī), formerly Bombay (bŏmbā`), city (1991 pop. , India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. -- Patni Computer Systems Patni Computer Systems Ltd., is a provider of Information Technology services and business solutions. The company employs over 14,000 people, and has 23 international offices across the Americas, Europe and Asia-Pacific,as well as offshore development centers in 8 cities in India. Limited (Patni Patni may refer to:
See: New York Stock Exchange :PTI PTI - Portable Tool Interface ) (MUMBAI:PATNI) (NSI See Network Solutions. NSI - Network Solutions, Inc. :PATNI) today announced its financial results for the year and fourth quarter ended 31 December December: see month. 2005. Performance Highlights Annual Performance (CY 2005 v/s. CY 2004): --Revenues increased by 37.9% to US$ 450.33 million (Rs. 20,242.42 million) from US$ 326.58 million (Rs. 14,131.19 million). --Gross Profit expanded by 30.4% to US$ 161.85 million (Rs. 7,275.21 million) from US$ 124.12 million (Rs. 5,370.68 million). --Operating income was higher by 15.8% at US$ 70.43 million (Rs. 3,165.79 million). --Net income was up 11.3% to US$ 60.87 million (Rs. 2,735.96 million) from US$ 54.68 million (Rs. 2,366.18 million). --The Patni Board declared a dividend of 125%. Sequential Quarter Review (Q4 2005 v/s. Q3 2005): --Revenues increased by 4.8% to US$ 123.90 million (Rs. 5,569.37 million) from US$ 118.28 million (Rs. 5,197.09 million). --Gross Profit was higher by 9.2% to US$ 44.51 million (Rs. 2,000.54 million) from US$ 40.76 million (Rs. 1,790.78 million). --Operating income was up 1.4% at US$ 18.06 million (Rs. 811.85 million) compared to US$ 17.82 million (Rs. 782.78 million). --Net income was at US$ 14.70 million (Rs. 660.93 million) compared to US$ 16.24 million (Rs. 713.58 million). Corresponding Quarter Review (Q4 2005 v/s. Q4 2004): --Revenues increased by 33.6 % to US$ 123.90 million (Rs. 5,569.37 million) from US$ 92.73 million (Rs. 4,012.49 million). --Gross Profit grew 31.1% at US$ 44.51 million (Rs. 2,000.54 million) compared to US$ 33.96 million (Rs. 1,469.39 million). --Operating income increased by 4.4% at US$ 18.06 million (Rs. 811.85 million) compared to US $ 17.30 million (Rs. 748.55 million). --Net income was at US$ 14.70 million (Rs. 660.93 million) from US$ 15.72 million (Rs. 679.99 million). Business Analysis --Revenue contribution from GE reduced to 22.1% in CY 2005 from 31.7% in CY 2004; and to 17.7% in Q4 2005. Revenues from clients other than GE were higher by 57.3% in CY 2005. --U.S. revenues increased by 33.2% in CY 2005; overall, non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. regions grew 71.2% across Europe Europe (y r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Japan, Asia Pacific and all other
regions.--Offshore effort contribution was higher at 64.6% in CY 2005 from 63.4% in CY 2004. Key Corporate Developments in CY 2005: --ADS offering completed successfully - 7.9 million ADSs subscribed at US$ 20.34 each; primary offering created cash flow of approx. US$ 119 million for Patni. --Patni was selected to provide Global Application Development Services to ABN AMRO ABN AMRO Algemene Bank Nederland-Amsterdam Roterdam Bank (Dutch bank) . --Infrastructure expansion initiatives were made across several locations in India. Future Outlook: --Q1 2006 revenues expected to grow by approx. 2% to US$ 126.4 million; net income expected to be 19.0-22.4% higher at US$ 17.5-18.0 million. --CY 2006 revenues expected to grow by 23.9-24.8% to US$ 558-562 million; net income expected to be 40.5-45.4% higher at US$ 85.5-88.5 million. Notes to this release: --Fiscal Year Patni follows a January January: see month. - December fiscal year. The current review covers the financial and operating performance of the Company for the financial year and fourth quarter ended 31 December 2005. --U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). All figures in this release pertain to pertain to verb relate to, concern, refer to, regard, be part of, belong to, apply to, bear on, befit, be relevant to, be appropriate to, appertain to accounts presented as per U.S. GAAP unless stated otherwise. --Percentage analysis Any percentage amounts, as set forth in this release, unless otherwise indicated, have been calculated on the basis of the U.S. Dollar amounts derived from our consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. GAAP, and not on the basis of any translated Rupee RUPEE, comm. law. A denomination of money in Bengal. In the computation of ad valorem duties, it is valued at fifty-five and one half cents. Act of March 2, 1799, s. 61; 1 Story's L. U. S. 627. Vide Foreign coins. 2. amount. Calculation of percentage amounts on the basis of Rupee amounts may lead to results that are different, in a material way, from those calculated as per U.S. Dollar amounts. --Convenience translation We have translated the financial data derived from our consolidated financial statements prepared in accordance with U.S. GAAP for each period at the noon buying rate in the City of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of on the last business day of such period for cable transfers in Rupees as certified See certification. for customs purposes by the Federal Reserve Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. . The translations should not be considered as a representation that such US Dollar amounts have been, could have been or could be converted into Rupees at any particular rate, the rate stated elsewhere in this document, or at all. Investors are cautioned to not rely on such translated amounts. Performance synopsis A summary; a brief statement, less than the whole. A synopsis is a condensation of something—for example, a synopsis of a trial record. During the calendar year ended 31 December 2005, Patni's revenues stood at US$ 450.33 million (Rs. 20,242.42 million), higher by 37.9% over US$ 326.58 million (Rs. 14,131.19 million) in CY 2004. Gross profit was at US$ 161.85 million (Rs. 7,275.21 million), a rise of 30.4% from US$ 124.12 million (Rs. 5,370.68 million). Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and income before income taxes (PBT PBT Provider Backbone Transport (networking technology adding determinism to ethernet) PBT Polybutylene Terephthalate PBT Profit Before Tax PBT Paper Based Test (education) ) reported during the year were at US$ 70.43 million (Rs. 3,165.79 million) and US$ 74.67 million (Rs. 3,356.38 million) respectively, higher by 15.8% and 19.7% compared to the previous year. Net income was at US$ 60.87 million (Rs. 2,735.96 million), up 11.3% compared to US$ 54.68 million (Rs. 2,366.18 million). Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for the year was at US$ 0.48 (Rs. 21.47) in CY 2005, up from US$ 0.44 (Rs. 19.07) in CY 2004. In the fourth quarter ended December 31 2005, Patni's revenues were at US$ 123.90 million (Rs. 5,569.37 million), higher by 33.6% compared to US$ 92.73 million (Rs. 4,012.49 million) in Q4 2004. Gross profit was at US$ 44.51 million (Rs. 2,000.54 million), an increase of 31.1% from US$ 33.96 million (Rs. 1,469.39 million). Operating income and income before income taxes (PBT) reported during the quarter were at US$ 18.06 million (Rs. 811.85 million) and US$ 18.68 million (Rs. 839.54 million) respectively, 4.4% and 5.6% higher than the corresponding quarter last year. Net income was at US$ 14.70 million (Rs. 660.93 million) compared to US$ 15.72 million (Rs. 679.99 million). Diluted EPS for the quarter was at US$ 0.11 (Rs. 5.09). Management comments Commenting on the Q4 2005 performance, Mr. Narendra K Patni, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Patni Computer Systems Ltd., said, "Our performance in CY 2005 once again underscores Patni's ability to deliver sustained growth by leveraging the advantages of its unique and highly scalable business model. During the year being reviewed, we successfully integrated the operations of Cymbal cymbal Percussion instrument consisting of a circular metal plate that is struck with a drumstick or two such plates that are struck together. They were used, often ritually, in Assyria, Israel (from c. , which showed significant growth as Patni's telecom vertical; we consolidated our existing verticals while creating growth opportunities in several emerging areas; we reduced our revenue contribution from both the U.S. region and our largest client GE; we increased our offshore contribution ratio further; and at the same time we continued to invest in our market facing resources and delivery infrastructure. "The successful completion of our ADS offering provides further impetus Impetus is a stimulus or impulse, a moving force that sparks momentum. Impetus may also refer to:
"Moving into CY 2006, we continue to explore and drive further growth opportunities and expect to continue with our strong track record." Speaking on the occasion, Mr. Deepak Deepak (दीपक) is a Sanskrit word meaning lamp, or source of light. In the twentieth century, it became very popular as a first name for male Hindus. Sogani, Chief Financial Officer, Patni, added: "In CY 2005, we have made significant progress towards our objective of creating sustainable growth opportunities through the delivery of a comprehensive basket of high quality IT services. During the year under review, we have expanded our existing offerings and invested in the right areas to expand the further potential for growth. "Patni's operations grew in line with our expectations and the guidance shared with investors. However, we have re-assessed payroll and related taxes in regard to our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and some provision for the entire year has been made in Q4 2005. "Subsequent to our ADS offering, we now have a much larger cash reserve of US$ 290 million that will be actively invested in augmenting growth. We now enter the next fiscal year with a much stronger run rate of business and we are confident that we will maintain our growth trend from a growing number of clients, services and geographies and an overall improvement in our business metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. ." Corporate developments in CY 2005 ADS offering completed successfully Patni successfully completed a combined offering of primary and sponsored secondary American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. Shares in December 2005. A large number of high quality investors subscribed to the 7,906,250 ADSs on offer at a price of US$ 20.34 each. Each ADS represents two underlying equity shares of Rs. 2 each. The primary ADS offering of 6,156,250 ADSs (inclusive of inclusive of prep. Taking into consideration or account; including. the greenshoe option Greenshoe Option An option that allows the underwriting of an IPO to sell additional shares to the public if the demand is high. Notes: The name comes from the fact that the Green Shoe Company was the first to issue this type of option. ) aggregated to about US$ 119 million, net of underwriting commissions Underwriting Commission The fee investment bankers charge for underwriting a security issue. . These cash flows will supplement the resources required for the development of new infrastructure facilities and other general corporate purposes. Patni selected to provide Global Application Development Services to ABN AMRO Patni announced that it has been awarded an Application Development Outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. contract by a leading international bank, ABN AMRO. Patni is one of the five preferred partners to support the bank's IT needs. Global customer forum - PatniConnect Patni successfully concluded its second annual customer forum - 'PatniConnect 2005' - in the U.S. The Patni leadership team interacted with IT and business leaders representing its customer organizations, and with other pre-eminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae industry analysts and professionals who presented their valuable perspectives. Expansion in leadership resources Patni announced the appointment of Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. Theodoor van den Boog as an independent director on the Company's board. Mr. van den Boog has more than 20 years of experience in the software industry, including M&A, public offerings, and funding through private equity and venture capital. Vijay Khare was given the role of Chief Administrative Officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive in addition to his continuing position as Patni's Global Delivery Coordinator. He is responsible for effecting improvements in Patni's operational and organizational backbone to support the growth prospects. Infrastructure expansions In February February: see month. 2005, Patni announced its plans to set up a new 2,000-seat facility in Pune Pune or Poona (both: p `nə), city (1991 pop. 2,493,987), Maharashtra state, W central India. . The Company has earmarked an investment of
Rs. 1 billion for this initiative. Infrastructure expansion at the two
Knowledge Parks in Navi Mumbai  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. and Chennai Chennai (chĕn`nī), formerly Madras (mədrăs`, mədräs`), city (1991 pop. 5,421,985), capital of Tamil Nadu state, SE India, on the Bay of Bengal. progressed as per plan. While Phase I at SIPCOT SIPCOT State Industries Promotion Corporation of Tamil Nadu (India) Park, Chennai was fully commissioned in September September: see month. 2005, the initial facility at Airoli Airoli is a suburb in the city of Navi Mumbai. Airoli is well-connected by S.T. Buses, NMMT buses and BEST buses. In addition to that limited railway services are also available. Around 21 min by bus and 8-10 min by train from Thane and 20 min from Bhandup, or Mulund. , Navi Mumbai is expected to be operational by Q2 2006. In addition, Patni has announced plans to expand its Hyderabad Hyderabad, former state and modern city, India Hyderabad (hī`dərəbăd'), former princely state, S central India. The former princedom of Hyderabad is now divided among the states of Karnataka, Maharashtra, and Andhra Pradesh. facilities to support its fast growing telecom business. In Q2 2005, Patni opened an office at Amsterdam Amsterdam, city, Netherlands Amsterdam (ăm`stərdăm', Dutch ämstərdäm`), city (1994 pop. 724,096), constitutional capital and largest city of the Kingdom of the Netherlands, North Holland prov. to address the Benelux Be·ne·lux An economic union of Belgium, the Netherlands, and Luxembourg, originally established as a customs union in 1948. Noun 1. market. Patni's European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. business continues to show significant expansion and the Company already has an established base of clients in Europe. Management Discussion & Analysis of Performance Restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of accounts - current quarter For the purposes of accounting for payroll and other related taxes for its international operations, the Company has reassessed the amounts provided in its books. Accordingly, the Company has restated the financial statements for fiscal years 2001, 2002, 2003, 2004 and 2005 with a cumulative charge of approx. US$ 11.4 million, including a charge of approx. US$ 1.4 million in CY 2005. Revenues In CY 2005, Patni's revenues were higher by 37.9% at US$ 450.33 million (Rs. 20,242.42 million) compared to US$ 326.58 million (Rs. 14,131.19 million) achieved in CY 2004. During the year, revenue growth achieved in the ongoing, established business streams was augmented by a number of distinctive vertical and technology practices. The year also saw Patni drive significant growth from several new regions and clients, leading to a reduction in business concentration. Overall, the growth in Patni's business was driven by higher delivery volumes, some shift towards offshore contribution and marginally higher realized rates. Patni's Q4 2005 revenues were higher by 4.8% sequentially to US$ 123.90 million (Rs. 5,569.37 million) from US$ 118.28 million (Rs. 5,197.09 million) in the preceding quarter. Growth achieved this quarter was in line with both the management's expectations. Key highlights for the quarter were continued offshore growth; reduction in client concentration; and robust performance delivered by the telecom and product engineering practices. Q4 2005 revenues improved by 33.6% compared to the corresponding quarter last year. Cost of revenues In CY 2005, Patni's cost of revenues increased to US$ 278.07 million (Rs. 12,499.15 million), up 43.8% from US$ 193.44 million (Rs. 8,370.08 million) last year. During the year, Patni expanded the number of its client-facing strategic business units; enhanced its vertical focus; commissioned new facilities and expanded existing facilities; committed more sales and marketing resources; and increased its employee strength by over 2,000 people. Cost of revenues also increased due to salary revisions and higher sub-contractor costs. Cost of revenues during Q4 2005 was up 2.4% at US$ 76.55 million (Rs. 3,440.81 million), as compared to US$ 74.75 million (Rs. 3,284.55 million) in Q3 2005. On a corresponding quarter comparison basis, cost of revenues expanded by 36.5%, primarily due to the business growth related expansion of corporate resources and physical infrastructure. Depreciation on direct assets Depreciation charged on direct assets increased by 15.4% during CY 2005 to US$ 10.41 million (Rs. 468.06 million). While Patni continues to add to its asset base to support its ongoing growth initiatives, some of the planned facilities are currently in pre-commissioning stages and therefore not being depreciated Depreciated may refer to:
In Q4 2005, depreciation on direct assets was higher by 2.8% sequentially at US$ 2.85 million (Rs. 128.02 million) from US$ 2.77 million (Rs. 121.76 million) in Q3 2005. On a corresponding quarter basis, it was higher by 6.5%. In the second half of last year, accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. had been charged at the previous Chennai facility before the operations shifted to the Knowledge Park premises premises n. 1) in real estate, land and the improvements on it, a building, store, shop, apartment, or other designated structure. The exact premises may be important in determining if an outbuilding (shed, cabana, detached garage) is insured or whether a person , increasing the base. Gross profit Gross profit during CY 2005 was higher by 30.4% at US$ 161.85 million (Rs. 7,275.21 million). In Q4 2005, gross profit rose by 9.2% to US$ 44.51 million (Rs. 2,000.54 million) compared to US$ 40.76 million (Rs. 1,790.78 million) in the previous sequential quarter. Compared to the corresponding quarter last year, gross profit was higher by 31.1%. SG&A expenses During CY 2005, Patni's selling, general and administrative (SG&A) expenses were at US$ 85.08 million (Rs. 3,824.39 million), higher by 45.7% over the previous year. Sales and marketing expenses increased by 55.6% to US$ 36.06 million (Rs. 1,620.97 million) and G&A expenses were higher by 39.2% at US$ 49.02 million (Rs. 2,203.42 million) during the year. Several initiatives were undertaken at Patni, with the objective of creating organizational improvements to deliver the next level of growth. Their implementation resulted in an increase in expenditure in a few specific areas. --Increased salary costs following the expansion in front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. sales teams and recruitment of several experienced domain-focused sales people, as well as the front-ended costs of their recruitment. --Engagement of external consultants for enhancing organizational efficiencies, cost reduction and overall operating improvements. --Greater focus on brand building, deepening deep·en tr. & intr.v. deep·ened, deep·en·ing, deep·ens To make or become deep or deeper. Noun 1. deepening - a process of becoming deeper and more profound client engagements and global marketing initiatives. In Q4 2005, sales and marketing expenses were lower by 0.9% at US$ 9.49 million (Rs. 426.39 million), compared to US$ 9.58 million (Rs. 420.78 million) in the previous sequential quarter. G&A expenses were higher by 8.2% at US$ 13.49 million (Rs. 606.55 million) compared to US$ 12.47 million (Rs. 548.00 million). On a corresponding quarter basis, sales and marketing expenses have increased by 53.9% while G&A expenses are up 29.6%. Depreciation on SG&A assets During CY 2005, depreciation provided on Patni's SG&A assets was higher by 107.8% to US$ 4.80 million (Rs. 215.75 million) compared to CY 2004. In Q4 2005, depreciation on Patni's SG&A assets was at US$ 1.35 million (Rs. 60.76 million), higher by 9.1% compared to the previous sequential quarter and by 120.7% from the corresponding quarter last year. Provision for doubtful debts In CY 2005, there was a net credit of US$ 0.15 million (Rs. 6.83 million) in the provisioning for doubtful debts and advances. In CY 2004, Patni had provided US$ 0.50 (Rs. 21.45 million). Patni's days' sales outstanding Days' sales outstanding Average collection period. (DSO See CSO. ) for the year under review improved significantly, leading to a lower requirement for debtors' provisioning. In Q4 2005, a net credit of US$ 0.23 million (Rs. 10.20 million) in the provisioning for doubtful debts compared to a provision of US$ 0.20 million (Rs. 8.58 million) in Q3 2005. In the corresponding quarter last year, Patni had made a similar credit of US$ 0.19 million (Rs. 8.25 million) in its debtors' provisioning to balance the excess provisions in the first three quarters of the year. Foreign exchange gain / loss During CY 2005, Patni booked a forex loss of US$ 1.69 million (Rs. 76.11 million) compared to a loss of US$ 2.08 million (Rs. 90.08 million) in the previous year. During Q4 2005, Patni recorded a foreign exchange loss of US$ 2.34 million (Rs. 105.21 million) as against a gain of US$ 0.54 million (Rs 23.80 million) reported in Q3 2005. In Q3 2005, there had been some gains against realizations on forward cover contracted at higher rates. Patni had recorded a foreign exchange gain of US$ 0.34 million (Rs. 14.71 million) in Q4 2004. Operating income In CY 2005, Patni's operating income increased by 15.8% to US$ 70.43 million (Rs. 3,165.79 million) from US$ 60.84 million (Rs. 2,632.67 million). Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: during the year was 15.6% of revenues. In Q4 2005, operating income was higher by 1.4% sequentially at US$ 18.06 million (Rs. 811.85 million) compared to US$ 17.82 million (Rs. 782.78 million) in the preceding quarter. Operating income was 4.4% higher as compared to the corresponding quarter last year. Operating margin was at 14.6% in Q4 2005 compared to 15.1% in Q3 2005. Other income Other income (including interest and dividend income, net of interest expenses, profit / loss on the sale of investments and other income) was at US$ 4.24 million (Rs. 190.59 million) in CY 2005, higher by 65.8% compared to CY 2004. Other income (including interest and dividend income, net of interest expenses, profit / loss on sale of investments and other income) was at US$ 0.62 million (Rs. 27.70 million) in Q4 2005, lower by 60.6% from US$ 1.56 million (Rs. 68.69 million) in Q3 2005 and higher by 57.6% compared to the corresponding quarter last year. During Q4 2005, Patni had a net non-operating gain of about US$ 1.8 million. This gain includes profit on sale of land and forex losses on account of unutilized ADS proceeds. However, Patni provided for interest of US$ 1.1 million on account of the re-assessed liability for payroll and related taxes, which was entirely accounted for during Q4 2005. Further, other expenses (largely financial in nature), adjusted against other income in Q4 2005, were higher by US$ 0.6 million as compared to Q3 2005. In the preceding quarter, Patni had recorded a profit of about US$ 1.0 million from the sale of some investments. Profit before tax Patni's income before income taxes in CY 2005 was at US$ 74.67 million (Rs. 3,356.38 million) compared to US$ 62.38 million (Rs. 2,699.15 million), an increase of 19.7%. Profit before tax in Q4 2005 was US$ 18.68 million (Rs. 839.54 million), which was lower by 3.6% over the previous sequential quarter and higher by 5.6% over the corresponding quarter last year. Income taxes Provision for income taxes in CY 2005 was at US$ 13.80 million (Rs. 620.43 million), up 79.4% compared to US$ 7.70 million (Rs. 332.97 million) last year. In Q4 2005, Patni provided US$ 3.97 million (Rs. 178.62 million) for taxation, compared to US$ 3.14 million (Rs. 137.89 million) in Q3 2005. The income tax provision in Q4 2005 was 101.1% higher than the corresponding quarter last year. Approx. US$ 1.0 million of this rise is on account of the additional payroll and related tax provisions on a sequential quarter comparison basis and approx. US$ 1.4 million when compared to the corresponding quarter last year. Net income Net income in CY 2005 was higher by 11.3% at US$ 60.87 million (Rs. 2,735.96 million) compared to US$ 54.68 million (Rs. 2,366.18 million) in CY 2004. Net income in Q4 2005 was lower by 9.5% at US$ 14.70 million (Rs. 660.93 million) compared to US$ 16.24 million (Rs. 713.58 million) in Q3 2005. Net income in Q4 2005 was impacted by approx. US$ 1.4 million due to the reassessed provision for payroll and other related taxes and foreign exchange related losses were higher than expected by approx. US$ 0.7 million. In addition, net exceptional non-operating income of US$ 1.0 million was realized during the quarter under review. Net income in Q4 2005 was lower by 6.4% compared to the corresponding quarter last year. Earnings per share Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for CY 2005 were at US$ 0.48 per share (Rs. 21.47 per share) and at US$ 0.11 per share (Rs. 5.09 per share) for the quarter under review. Balance Sheet / Cash Flow perspective The days' sales outstanding (DSO) levels were at 60 days in CY 2005 compared to 80 days in CY 2004 and at 60 days in Q4 2005, compared to 62 days in Q3 2005 and 71 days in Q4 2004. Cash and cash equivalents, including short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, at the end of CY 2005 were at US$ 290.59 million (Rs. 13,062.02 million) compared to US$ 162.77 million (Rs. 7,042.9 million) at the close of the previous year. During the year, Patni's cash increased due to the inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. of US$ 118.78 million (Rs. 5,339.16 million), net of underwriting commissions and issue-related expenses, from the recently concluded ADS offering and net cash of US$ 75.08 million (Rs. 3,374.85 million) generated by Patni's operations. During the year under review, Patni also used US$ 55.78 million (Rs. 2,507.31 million) towards its ongoing capital expenditure program. Revenue analysis Top clients During CY 2005, Patni's client concentration reduced significantly - with its top client GE contributing 22.1% of revenues compared to 31.7% in the previous year. GE revenues during CY 2005 were marginally under US$ 100 million compared to approx. US$ 103.6 million in CY 2004. During the final quarter of CY 2005, Patni re-classified its revenues from Genworth, previously a GE Group company, as non-GE business following its sale by GE. Including Genworth's revenues in Q4 2005 on a pro-forma basis, GE's aggregate revenue contribution would be at the same level as in CY 2004. Revenues from the top 10 clients (excluding GE) were higher by 37.8% during CY 2005. Revenues from clients outside the top 10 grew by 80.6% during the year. During Q4 2005, revenues from GE declined by 20.9% as compared to the previous sequential quarter largely on account of the re-classification of Genworth's revenues. Including Genworth revenues for Q4 2005 on a pro-forma basis, revenues from GE would be lower by approx. 5% as compared to Q3 2005. During Q3 2005, GE revenues had shown significant expansion on account of some specific project opportunities. Revenue contribution from GE was at 17.7% during Q4 2005 compared to 23.4% in Q3 2005 and 27.2% in Q3 2004. Revenue contribution from GE continues to show a downward trend as Patni expands its other engagements and adds more clients. During Q4 2005, ex-GE revenues were higher by 12.6% over Q3 2005 and by 51.0% over Q4 2004. Revenue contribution from top 10 clients (excluding GE) was at 39.2% during Q4 2005 compared to 37.8% in Q3 2005 and 37.4% in Q4 2004. Revenues from clients outside the top 10 showed a rise of 16.3% compared to the previous sequential quarter and increased by 63.0% compared to the corresponding quarter last year. Active / million-dollar relationships The number of million-dollar relationships increased to 61 at the close of CY 2005 and Q4 2005 from 46 at the close of CY 2004 and 60 at the close of the previous sequential quarter. Client acquisition data In CY 2005, Patni added 74 new clients and its active relationships increased to 199 at the close of the year. During Q4 2005, 19 new clients were added in the continuing business, compared to 18 in the sequentially preceding quarter and 17 during Q4 2004. Vertical focus Patni continues to achieve greater vertical diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. in its revenue streams. During CY 2005, revenues from the insurance, manufacturing and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. verticals were higher by 16.7%, 6.7% and 15.1% respectively compared to CY 2004. However, their combined contribution reduced to 65.6% of revenues in CY 2005 from 80.3% in CY 2004. During CY 2005, strong growth was recorded in Patni's telecom vertical, other vertical lines and the product engineering technology practice. The product engineering practice continues to be a key growth area for Patni. This practice grew by 124.5% in CY 2005 and its contribution to revenues increased from 4.6% in CY 2004 to 7.5% in CY 2005. During Q4 2005, this practice grew by 43.7% compared to Q3 2005 and by 161.1% compared to Q2 2004. In Q4 2005, its contribution was 9.7% to Patni's revenues. Geographical contribution During CY 2005, Patni's U.S.-based revenues grew by 33.2%. In addition, Patni saw significant growth from several other regions - Europe grew 59.8%, Japan by 75.6%, Asia Pacific (ex-Japan) by 62.9% and Rest of the World by 253.6%. As a result U.S. contribution to revenues reduced from 87.8% in CY 2004 to 84.8% in CY 2005. During Q4 2005, U.S. revenues were higher by 4.8% sequentially and 30.6% over the corresponding quarter last year. Revenues from the U.S. contributed 84.3% to the overall revenues in Q4 2005. Fixed price / T&M contracts In CY 2005, revenues from T&M and fixed price contracts contributed 59.5% and 40.5% respectively, growing by 42.9% and 31.1% respectively compared to CY 2004. In Q4 2005, revenues from fixed price contracts contributed 39.3% to overall revenues as compared to 43.4% in Q3 2005 and 39.6% in Q4 2004. T&M project revenues were higher by 12.3% and 34.3% compared to the previous sequential quarter and the corresponding quarter last year. About Patni Computer Systems Ltd: About Patni: Patni Computer Systems Limited (NYSE: PTI, BSE See Bombay Stock Exchange. BSE See Boston Stock Exchange (BSE). : PATNI COMPUT, NSE NSE - Network Software Environment: a proprietary CASE framework from Sun Microsystems. : PATNI) is a leading Indian provider of information technology services. Patni offers its services through industry-focused practices, including insurance, manufacturing, financial services, and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , and through technology-focused practices. Patni's service lines include application development, application maintenance and support, packaged software See software package. implementation, infrastructure management services, product engineering services, business process outsourcing Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in and quality assurance services Assurance services have been defined by the American Institute of Certified Public Accountants (AICPA) as 'Independent Professional Services that improve information quality or its context'. . For more information on Patni, please visit www.patni.com. Attached Results and analysis tables --Consolidated Statement of Income (US$) --Consolidated Statement of Income (INR INR In currencies, this is the abbreviation for the Indian Rupee. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ): based on convenience translation
Details of the schedule of events are as follows:
======================================================================
Earnings Release Morning of February 01 2006 (Night of January 31
over the wire 2006 ET, afternoon of February 01 2006 Singapore
services local time)
Earnings Call 6:00-7:00 pm IST (7:30-8:30 am ET, 8:30-9:30 pm
Timing Singapore local time) on Wednesday, February 01
2006
India Toll +91 22 2781 2277/ 5591 7977
Toll free dial-in US: 877-209-0463 Conference
for International UK: 0800-917-4860 ID:
Participants Singapore: 800-101-1350 4724597#
Hong Kong: 800-901-700
Japan: 00531-16-0205
US / International Toll number: +1-706-
643-0283
India Playback Available from 1 February - 4 February 2006 at:
Facility +91-22-2788 0506/ 5591 7979
Playback Facility Available from 1 February - 4 Conference
for US/ February 2006 at: ID:
International US Toll-free: 800-642-1687 4724597#
Participants International Toll number: +1-706-
645-9291
Audio webcast on Available live and an archive of the event can be
www.patni.com accessed till February 16, 2006.
======================================================================
Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. : Certain statements in this release concerning our future growth prospects are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, 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 Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. , our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. networks, liability for damages on our service contracts, the success of the companies in which Patni has made strategic investments, withdrawal of governmental fiscal incentives, political instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability , legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.
PATNI COMPUTER SYSTEMS LIMITED
CONSOLIDATED STATEMENT OF INCOME (US$ '000)
======================================================================
Particulars Shift
2005 2004 %
----------------------------------------------------------------------
Revenues 450,332 326,582 37.9
Cost of revenues 278,068 193,438 43.8
Depreciation 10,413 9,023 15.4
Gross Profit 161,851 124,120 30.4
Sales and marketing expenses 36,062 23,177 55.6
General and administrative expenses 49,019 35,211 39.2
Depreciation 4,800 2,310 107.8
Provision for doubtful debts and advances (152) 498 (130.5)
Foreign exchange (gain) / loss, net 1,693 2,082 (18.7)
Operating income 70,429 60,843 15.8
Initial public offering related expenses - (1,021) (100.0)
Other income / (expense), net 4,240 2,558 65.8
Income before income taxes 74,669 62,379 19.7
Income taxes 13,803 7,695 79.4
Net income 60,867 54,684 11.3
Earning per share
- Basic $0.48 $0.44
- Diluted $0.48 $0.44
======================================================================
Particulars Q4 Q4 Shift Q3 Shift
2005 2004 % 2005 %
----------------------------------------------------------------------
Revenues 123,902 92,731 33.6 118,277 4.8
Cost of revenues 76,547 56,098 36.5 74,751 2.4
Depreciation 2,848 2,675 6.5 2,771 2.8
Gross Profit 44,506 33,959 31.1 40,755 9.2
Sales and marketing expenses 9,486 6,162 53.9 9,576 (0.9)
General and administrative
expenses 13,494 10,415 29.6 12,472 8.2
Depreciation 1,352 612 120.7 1,239 9.1
Provision for doubtful debts
and advances (227) (191) 19.0 195 (216.3)
Foreign exchange (gain) /
loss, net 2,341 (340) (788.7) (542) (532.1)
Operating income 18,061 17,300 4.4 17,815 1.4
Initial public offering
related expenses - - - - -
Other income / (expense),
net 616 391 57.6 1,563 (60.6)
Income before income taxes 18,677 17,691 5.6 19,378 (3.6)
Income taxes 3,974 1,976 101.1 3,138 26.6
Net income 14,704 15,715 (6.4) 16,240 (9.5)
Earning per share
- Basic $0.12 $0.13 $0.13
- Diluted $0.11 $0.12 $0.13
======================================================================
CONSOLIDATED STATEMENT OF INCOME (RS. '000):
BASED ON CONVENIENCE TRANSLATION
======================================================================
Particulars Q4 Q4 Q3
2005 2004 2005 2004 2005
----------------------------------------------------------------------
Exchange rate 44.95 43.27 44.95 43.27 43.94
----------------------------------------------------------------------
Revenues 20,242,420 14,131,187 5,569,374 4,012,483 5,197,093
----------------------------------------------------------------------
Cost of
revenues 12,499,151 8,370,082 3,440,809 2,427,339 3,284,553
----------------------------------------------------------------------
Depreciation 468,056 390,426 128,020 115,756 121,759
----------------------------------------------------------------------
Gross Profit 7,275,214 5,370,678 2,000,544 1,469,387 1,790,781
----------------------------------------------------------------------
Sales and
marketing
expenses 1,620,971 1,002,856 426,387 266,625 420,778
----------------------------------------------------------------------
General and
administrative
expenses 2,203,423 1,523,568 606,547 450,666 547,998
----------------------------------------------------------------------
Depreciation 215,754 99,948 60,755 26,503 54,447
----------------------------------------------------------------------
Provision for
doubtful debts
and advances (6,830) 21,557 (10,204) (8,251) 8,576
----------------------------------------------------------------------
Foreign
exchange
(gain) / loss,
net 76,107 90,080 105,213 (14,706) (23,800)
----------------------------------------------------------------------
Operating
income 3,165,790 2,632,669 811,847 748,552 782,782
----------------------------------------------------------------------
Initial public
offering
related
expenses - (44,183) - - -
----------------------------------------------------------------------
Other income /
(expense), net 190,593 110,667 27,695 16,919 68,692
----------------------------------------------------------------------
Income before
income taxes 3,356,383 2,699,153 839,542 765,470 851,474
----------------------------------------------------------------------
Income taxes 620,426 332,970 178,617 85,482 137,892
----------------------------------------------------------------------
Net income 2,735,956 2,366,183 660,925 679,988 713,582
----------------------------------------------------------------------
Earning per
share
----------------------------------------------------------------------
- Basic 21.76 19.23 5.17 5.44 5.70
----------------------------------------------------------------------
- Diluted 21.47 19.07 5.09 5.40 5.63
======================================================================
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