Change in Def Rev

(Ref to two line items

of cash flow
statement in Exhibit
Reported Revenue ($ million) 4) Adjusted Revenues
1995 6075
1996 9050
1997 11936 858 12794
1998 15262 1470 16732
1999 19747 1351 21098
 Quarter Adjusted Quarterly Rev Difference in
Reported End Def (Reported Rev+Closing Def Revenue (Positive
Year Quarters Renue Rev Rev - Beg Def Ref) effect on Profit)
1995
Q1 1270 Nil 1270 0
Q2 1516 Nil 1516 0
Q3 1627 Nil 1627 0
Q4 1662 0 1662 0
6075 6075 0
1996
Q1 2085 307 2392 307
Q2 2287 495 2475 188
Q3 2311 545 2361 50
Q4 2367 560 2382 15
9050 9610 560
1997
Q1 2405 651 2496 91
Q2 2808 1013 3170 362
Q3 3365 1285 3637 272
Q4 3358 1418 3491 133
11936 12794 858
1998
Q1 3334 1671 3587 253
Q2 3792 2038 4159 367
Q3 3984 2463 4409 425
Q4 4152 2888 4577 425
15262 16732 1470
1999
Q1 4193 3133 4438 245
Q2 5195 3552 5614 419
Q3 4595 4195 5238 643
Q4 5764 4239 5808 44
19747 21098 1351
Reducation in
Liabilities and
Addition to
Networth (Year
End Def
Reveue or Q4
Def Rev)

1418

2888

4239
 1995 1996 1997 1998
R&D Cost (Ref Exhibit 2: Income Statement) 860 1326 1863 2601
60% is capitalized 516 795.6 1117.8 1560.6
40% is expensed 344 530.4 745.2 1040.4
Amortization per annum (2 years 258 398 559 780

Amortization Expenses: 1997 1998

A year before previous year 258 398
Previous year 398 559
Total Amortization 656 957

Capitalized Software Cost (Positive Impact on Total

Assets and Networth): 1997 1998
Previous Year Balance 398 559
Current Year capitalization 1117.8 1560.6
Total Capitalized cost 1516 2120

Positve Effect on Profit (R&D Cost - 40% of R&D Cost

- Amortizatin Exp) 462 604
1999
2970
1782
1188
891

1999
559
780
1339

1999
780
1782
2562

443
 1997
Effect on Income Statement Effect on Earnings:
Reported operating profit 4871
Positive Effect of Def Revenue 858
Positive Effect of Capitalized R&D 462
Adjusted operating profit 6191

Effect on Balance Sheet Effect on Liabilities:

Reported total Liablities 3610
Reduction in liabilites due to reductin in def revenue (Ref Exh 1418
Adjusted total liabilites 2192

Effect on Total Assets:

Reported Total Assets 14387
Positive Effect on Total Assets due to capitalized R&D 1516
Adjusted total assets 15903

Effect on Net Worth:

Reported Net Worth 10777
Postive effect of reduction in deferred revenue 1418
Postivie effect on net worth due to capitalization of R&D 1516
Adjusted Net Worth 13711

Effect on Ratios
ROA ROA, as reported 33.86
ROA, as adjusted 38.93

ROE ROE, as reported 45.20

ROE, as adjusted 45.15

Liabilities to TA Liabilities to TA, as reported 25.0921

Liabilites to TA, as adjusted 13.78391
 1998 1999

6414 9928
1470 1351 Refer to sheet 2
604 443 Refer to Sheet 3
8488 11722

5730 8718
2888 4239 Refer to sheet 2
2842 4479

22357 37156
2120 2562 Refer to Sheet 3
24477 39718

16627 28438
2888 4239 Refer to sheet 2
2120 2562 Refer to Sheet 3
21635 35239

28.69 26.72
34.68 29.51

38.58 34.91
39.23 33.26

25.62956 23.46324
11.61114 11.27692