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INFOSYS has said that it expects its revenues to be flat for the first quarter of 2005-06 because of its customers' pre-occupation with compliance of certain newly introduced US laws on financial controls.

"Because of compliance issues, we expect the growth to be flat during the first quarter (2005-06). But during the next three quarters, we expect it to pick up significantly," the Infosys' Chief Executive Officer, President and Managing Director, Mr Nandan Nilekani, told newspersons.

For the entire fiscal, 2005-06, Infosys expects income to be in the range of Rs 8,890 crore and Rs 9,029 crore posting a growth of between 24.7 per cent and 26.6 per cent

Some of the US laws which companies listed there need to comply with include the Sarbanes-Oxley Act, the Anti-Money Laundering Act and the Patriot Act.

The Sarbanes-Oxley Act of 2002 is considered the most significant of the three as it was enacted to stop financial mismanagement by companies.

The Act seeks increased disclosure from companies regarding executive compensation, insider trading and financial statements. As it requires a considerable amount of money and time to comply with the new regulations, Infosys expects that its clients will be busy with compliance and hence this will temporarily affect Infosys' business. Though Infosys has forecast that the year-on-year growth for the first quarter of 2005-06 will be between 32 per cent and 33.2 per cent, the sequential growth is expected to be flat or very marginal.

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