Welcome to the 23 rd Annual General Meeting

Annual General Meeting © Infosys Technologies Limited Financial Performance V. Balakrishnan Company Secretary and Senior Vice President - Finance

Annual General Meeting June 12, 2004© Infosys Technologies Limited Safe Harbor This presentation may contain certain forward looking statements. The company may not achieve results as expressed or implied by such forward looking statements. Actual results could differ materially from those expressed or implied in such forward looking statements due to a number of factors including those discussed under the head "Risk factors" in the company's filings with the United States Securities and Exchange Commission. Do not place undue reliance on these forward looking statements. This presentation contains references to findings of various reports available in the public domain. The company makes no representation as to their accuracy or that the company subscribes to those findings. They are provided only by way of information.

Annual General Meeting June 12, 2004© Infosys Technologies Limited Highlights *  Achieved billion dollars in revenues during the year  Continued to be the largest listed software exporter in India  Achieved a revenue growth of 41% (in $ terms) as against our guidance of 27% in April 2003  119 clients added during the year  Net addition of 9,758 employees during the year * Consolidated

Annual General Meeting June 12, 2004© Infosys Technologies Limited Highlights  Proposed 3:1 Bonus issue  Recommended one - time special dividend of 2,000% (Rs. 100 per share)  Recommended a final dividend of 300% (Rs. 15 per share)  Paid billion dollar bonus to all employees – approximately US$ 1,000 per employee

Annual General Meeting June 12, 2004© Infosys Technologies Limited ,809 2,266 The year at a glance 3,623 4,761 Income (Rs.cr) 31% 3,544 4,695 Export Income (Rs.cr) Gross Profit (Rs.cr) 32% %

Annual General Meeting June 12, 2004© Infosys Technologies Limited The year at a glance 1,272 1,584 Operating Profit (Rs.cr) 1,159 1,470 PBT (Rs.cr) 958 1,243 PAT (Rs.cr) 25%27% 30%

Annual General Meeting June 12, 2004© Infosys Technologies Limited The year at a glance 50% 48% Gross Profit (%) Operating Profit (%) PAT (%) 35% 33% 26%

Annual General Meeting June 12, 2004© Infosys Technologies Limited Pricing pressure continued… Variation in Per-capita revenues (in US$ terms) * FY 00FY 01FY 02FY 03FY 04 Onsite 8.0%28.9%4.4%(2.5)%(2.9)% Offshore 16.9%22.3%(7.6)%(4.7)%(2.6)% Blended 19.8%27.0%(4.4)%(0.8)%(5.1)% * Software services

Annual General Meeting June 12, 2004© Infosys Technologies Limited US$ – Re rate % As at 31st March (8.69) Average rate for the year (5.32) The Indian rupee had appreciated …

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our response… Strong volume growth FY 00FY 01FY 02FY 03FY 04 Increase in billed person months Onsite5,2447,8424,748 12,59614,184 Offshore 5,00613,61816,796 17,89338,102 Total 10,25021,46021,544 30,48952,286 Change in billed person months (%) Onsite Offshore Total Utilization rates Including trainees (%) Excluding trainees (%)

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our response… Continued to spend more on sales and marketing infrastructure FY 2003FY 2004 Marketing offices (Nos.)3031 Employees (Nos.) Brand Building (Rs. cr)2934 Brand Building exp / Revenue (%)0.80%0.72% Sales & Marketing cost (Rs. cr) Sales & Marketing cost / Revenue (%)7.37% 7.04%

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our response… Maintained tight control on General & Administration expenditure FY 2003FY 2004 Total General & Administration cost / Rev. (%)7.46% 7.29% Total No. of Employees15,35623,377 G&A Personnel1,069 1,337 % to Total Employees6.96% 5.72%

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our response… Actively hedged our net forex receivables ($ mn) FY 2003FY 2004 Forward foreign exchange contracts outstanding as at March Forward contracts booked during the year324759

Annual General Meeting June 12, 2004© Infosys Technologies Limited and delivered on our promise * As per US GAAP (Guidance Vs Performance) * Consolidated Guidance Performance

Annual General Meeting June 12, 2004© Infosys Technologies Limited Strategic investments  Made a provision of Rs crore for strategic investments during the year  The provision was based on the review of their financial condition as well as the business environment in which they operate Rs. Cr Cumulative investments up to March 31, Cumulative billings up to March 31, Less: Provisions / write-off of investments(55.35) Less: Accounts receivables provided for / written-off(10.51) Net benefit142.72

Annual General Meeting June 12, 2004© Infosys Technologies Limited Acquisition of Expert Information Services Pty Limited, Australia  Acquired 100 % equity in Expert Information services Pty. Limited, Australia (Expert). The transaction value was approximately AU$ 32 Mn  Expert is a leading IT service provider in Australia, specializing in design, building & integration of business solutions  Expert, founded in 1994, has a client base of medium and large enterprises spanning across industry sectors  Expert has a strong history of controlled growth and profitability  Subsequent to acquisition, Expert has been renamed as ‘Infosys Technologies (Australia) Pty. Limited’  The company has a total head count of 375 as on March 31, 2004

Annual General Meeting June 12, 2004© Infosys Technologies Limited Formation of a subsidiary in China  Formed a wholly-owned subsidiary – Infosys Technologies (Shanghai) Co. Ltd, in China  Will invest up to US$ 5 Mn in the subsidiary  Main focus is to tap the growing domestic market in China  To hire from the local talent pool and leverage their language skill sets to deliver services for the other markets in Asia-Pacific region

Annual General Meeting June 12, 2004© Infosys Technologies Limited Formation of Infosys Consulting, Inc.  Launched Infosys Consulting, Inc. in Texas, with an investment of up to US $ 20 Mn  Infosys Consulting, Inc. will be a wholly-owned subsidiary of Infosys  A new generation consulting firm – an unconventional approach  Plan to assemble a dream team of top consultants from large consulting firms  To offer our clients more competitively priced projects, practical ways to increase competitiveness and a much higher return on their consulting dollar  A further step towards best Global Delivery Model

Annual General Meeting © Infosys Technologies Limited Revenue segmentation

Annual General Meeting June 12, 2004© Infosys Technologies Limited Geographic segments * N. America Europe ROW India * Consolidated

Annual General Meeting June 12, 2004© Infosys Technologies Limited Business segments * DevelopmentMaintenance Re-engineeringPackage implementation ConsultingTesting Engineering servicesOther services Products * Consolidated

Annual General Meeting June 12, 2004© Infosys Technologies Limited Vertical domains * ManufacturingInsurance Banking & Financial ServicesTelecom RetailEnergy & Utilities Transportation & LogisticsOthers 16.4% 14.3% 23.3% 11.4% 6.8% 9.7% 2.9% 15.2% 14.8% 12.9% 23.7% 11.6% 7.1% 10.3% 3.0% 16.6% * Consolidated

Annual General Meeting June 12, 2004© Infosys Technologies Limited % 63.3% Project segmentation * Fixed Price Time and Material 34.1% 65.9% * Consolidated services

Annual General Meeting June 12, 2004© Infosys Technologies Limited Onsite - offshore segmentation Onsite Offshore 54.7% 45.3% 53.0% 47.0% Revenue Effort % 33.7% 31.6% 68.4%

Annual General Meeting © Infosys Technologies Limited De-risking

Annual General Meeting June 12, 2004© Infosys Technologies Limited Client concentration FY 2002FY 2003FY 2004 Active clients Clients added % of revenue from top client6.1% 5.8%5.0% % of revenue from top 5 clients24.1% 23.4%22.6% % of revenue from top 10 clients39.4% 37.3%36.0% Clients accounting for >5% of revenue221 Million dollar+ clients million dollar+ clients million dollar+ clients million dollar+ clients million dollar+ clients--3 Million dollar clients / total clients 28.3% 33.3%33.3% Repeat Business (%) 88%92%93%

Annual General Meeting © Infosys Technologies Limited Cash management

Annual General Meeting June 12, 2004© Infosys Technologies Limited We have a strong and liquid Balance Sheet (Rs. Crore) Mar 31, 2003%Mar 31, 2004% SOURCES OF FUNDS Share capital Reserves and surplus2, , Total2, , APPLICATION OF FUNDS Fixed assets Investments Deferred tax assets Sundry debtors Cash and equivalents 1, , Other current assets Current liabilities & provisions(703.23)(24) (1,883.52)(58) Total2, , Continued to be a zero-debt company

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our receivables are under control Age profile of accounts receivable >90 Days of sales receivable - 52 days 39% 28.7% 66.1% 1.3% Days of sales receivable - 48 days 1.2% 68.6% 25.6% 4.6%

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our cash flows are strong FY 2003FY 2004 (Rs. Crore) (Rs. Crore) Operating cash flows , Financing cash flows(151.97)(94.48) Proceeds on exercise of stock options Dividends paid(165.49)(216.75) Investing cash flows(153.41)(1,332.01) Purchases of fixed assets(219.26)(429.87) Proceeds on sale of fixed assets Investment in securities(12.53)(1,003.85) Interest income Effect of exchange differences0.97(6.59) Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year1, , Cash and cash equivalents, end of year1, ,839.40

Annual General Meeting June 12, 2004© Infosys Technologies Limited Our cash management policies Financial policies  Maintain liquid assets at  25% of revenue and  40% of total assets  Earn  Return on average capital employed – 2x cost of capital  Return on average invested capital – 3x cost of capital  Our current cost of capital is estimated to be 14.09%  Maintain sufficient cash in the Balance Sheet  To fund ongoing capex requirements to meet growth objectives  To fund operational expenses and other strategic initiatives for the next one year  To maintain business continuance in case of exigencies

Annual General Meeting June 12, 2004© Infosys Technologies Limited Cash management – How we performed DescriptionTargetFY 2002FY 2003FY 2004 ROCE (%)54.4%46.9%48.1% Times cost of Capital ROIC (%)83.1%79.9%137.5% Times cost of Capital Days sales outstanding Cash & equivalents / total assets *40.0%49.4%57.3%85.1% Cash & equivalents / revenue *25.0%39.4%45.2%58.2% A one-time special dividend of Rs crore was recommended by the board * Cash and cash equivalents include investments in liquid mutual funds

Annual General Meeting © Infosys Technologies Limited Other performance indicators

Annual General Meeting June 12, 2004© Infosys Technologies Limited Other performance indicators 46.6% 38.8% 40.7% Return on Average Net Worth (RONW) (%) 54.4% 46.9% 48.1% Return on Capital Employed (ROCE) (%) 83.1% 79.9% 137.5% Return on Invested Capital (ROIC) (%)

Annual General Meeting June 12, 2004© Infosys Technologies Limited Other performance indicators EPS from Ordinary Activities (Rs.) Cash EPS (Rs.) Dividend Payout (%) % 19.9% 78.2%

Annual General Meeting June 12, 2004© Infosys Technologies Limited Other performance indicators Book Value (Rs.) Price Earnings (Multiple) 62,737% 68,259% 83,170% Market Price / Adjusted IPO Price (%)

Annual General Meeting June 12, 2004© Infosys Technologies Limited Strength of the invisibles * FY 2002FY 2003FY 2004 Average age of employees (Yrs) Education index31,385 44,97274,057 Brand value (Rs.Cr)7,257 7,4888,185 EVA (Rs.Cr) Value added (Rs.Cr)2,239 3,0514,185 HR value (Rs.Cr)9,539 10,77821,140 * Consolidated

Annual General Meeting © Infosys Technologies Limited Consolidated Income statement

Annual General Meeting June 12, 2004© Infosys Technologies Limited FY 04 FY 03 % change INCOME – Services, Products and BPM Overseas 4, , % Domestic (12.4%) 4, , % Software development and BPM expenses 2, , % GROSS PROFIT 2, , % Selling and marketing expenses % General and administration expenses % Operating profit before interest, depreciation and amortization 1, , % Interest - - Depreciation and amortization % Operating profit after interest, depreciation and amortization 1, , % Other income % Provision for investments (59.3%) NET PROFIT BEFORE TAX 1, , % Provision for taxation % NET PROFIT AFTER TAX 1, % Income statement

Annual General Meeting © Infosys Technologies Limited Financial Highlights – US GAAP

Annual General Meeting June 12, 2004© Infosys Technologies Limited , Revenues (US$ million) Gross Profit (US$ million) Operating Income (US$ million) %34%37% Financial Highlights – US GAAP

Annual General Meeting June 12, 2004© Infosys Technologies Limited Operating Income (excl. stock comp) (US$ million) Net Income (US$ million) Net Income (excl. stock comp) (US$ million) %37%39% Financial Highlights – US GAAP

Annual General Meeting June 12, 2004© Infosys Technologies Limited Investor services  Share transfers in physical form completed within 15 days  Investor grievances / correspondence attended to within a period of 10 days (except in cases constrained by disputes or legal impediments)  99.53% of the company’s shares are now held in electronic form  Pending share transfer related litigation -17 cases

Annual General Meeting June 12, 2004© Infosys Technologies Limited Community services  Grants of Rs. 12 crore during the year to Infosys Foundation, a not-for-profit trust to support initiatives that benefit society at large  Projects undertaken during the year by Infosys Foundation were in the cause of health care, rural poor & underprivileged, education, art & culture & others  Infosys donated 729 computers to various institutions across India through its initiative  Continued to adhere to the principles of the UN Global Compact Programme  Established Infosys Environment Policy

Annual General Meeting June 12, 2004© Infosys Technologies Limited Awards won during the year  Award for the best presented Annual Report for fiscal 2003 received from The Institute of Chartered Accountants of India. This award was received for the eighth consecutive year.  Asiamoney award for best investor relations in India  Assigned a Corporate Governance Scorecard ‘CGS-8.6’ in a scale of 1 (low) to 10 (high) by Standard & Poor’s

Annual General Meeting © Infosys Technologies Limited Thank You