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

Annual General Meeting June 14, 2003© Infosys Technologies Limited 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 14, 2003© Infosys Technologies Limited Highlights »Achieved a revenue growth of 38% ( in $ terms ) as against our guidance of 18% in April 2002 »92 clients added during the year »Net addition of 4,618 employees during the year »Progeon achieved break-even in Q4 »Dividend Payout at 20% ( Rs. 27 per share – 540% on par value of Rs. 5 ) as compared to 17% in the previous year

Annual General Meeting June 14, 2003© Infosys Technologies Limited ,379 1,809 The year at a glance 2,604 3,623 Income (Rs.cr) 39% 2,552 3,544 Export Income (Rs.cr) Gross Profit (Rs.cr) 39% %

Annual General Meeting June 14, 2003© Infosys Technologies Limited The year at a glance 1,038 1,272 Operating Profit (Rs.cr) 943 1,159 PBT (Rs.cr) PAT (Rs.cr) 23% 19%

Annual General Meeting June 14, 2003© Infosys Technologies Limited The year at a glance 53% 50% Gross Profit (%) Operating Profit (%) PAT (%) 40% 35% 31% 26%

Annual General Meeting June 14, 2003© Infosys Technologies Limited The most challenging year Continued pricing pressure In $ terms FY99FY00FY01 FY02FY03 Revenue growth (%) of which Volume growth (%) Price growth (%) (2.5) (5.0)

Annual General Meeting June 14, 2003© Infosys Technologies Limited The most challenging year Stronger rupee FY 2002FY 2003 Re - USD rate as at 31 st March

Annual General Meeting June 14, 2003© Infosys Technologies Limited The most challenging year »SARS and Iraq war »Weak US economic environment »Increased competition from global players

Annual General Meeting June 14, 2003© Infosys Technologies Limited We responded to the challenge… Strong volume growth and Increased utilization FY 99FY 00FY 01FY 02FY 03 Increase in billed person months Onsite 2,4505,2447,8424,748 12,596 Offshore 5,7075,00613,61816,796 17,893 Total 8,15710,25021,46021,544 30,489 Change in billed person months (%) Onsite Offshore Total Utilization rates Including trainees (%) Excluding trainees (%)

Annual General Meeting June 14, 2003© Infosys Technologies Limited We responded to the challenge… Moved to a higher variable compensation structure FY 2002FY 2003Growth % Revenues ( Rs. crore )2,6043,62339% Total Employee Cost ( Rs. crore )1,1181,677 Total Man-months ( Nos. )1,24,352 1,54,304 Average Per-Capita Cost ( Rs. )89,896 1,08,690 21%

Annual General Meeting June 14, 2003© Infosys Technologies Limited We responded to the challenge… Spent more on sales and marketing infrastructure FY 2002FY 2003 Marketing offices (Nos.)2830 Employees (Nos.) Brand Building (Rs. cr)1329 Brand Building exp/Revenue (%)0.5%0.8% Total Sales & Marketing cost4.99% 7.37% (as a % to revenue)

Annual General Meeting June 14, 2003© Infosys Technologies Limited We responded to the challenge… Tight control on General & Administration expenditure FY 2002FY 2003 Total General & Administration cost8.12% 7.46% (as a % to revenue) Total No. of Employees10,738 15,356 G&A Personnel874 1,069 % to Total Employees8.13% 6.96%

Annual General Meeting June 14, 2003© Infosys Technologies Limited We responded to the challenge… Started actively hedging the net forex receivables ($ mn) FY 2002FY 2003 Forward foreign exchange contracts outstanding as at March

Annual General Meeting June 14, 2003© Infosys Technologies Limited and delivered on our promise As per US GAAP (Guidance Vs Performance)

Annual General Meeting June 14, 2003© Infosys Technologies Limited Strategic investments »Provided for Rs crore towards strategic investments during the year »The provision was based on the review of their financial condition as also 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(46.11) Less: Accounts receivables provided for / written-off(10.64) Net benefit151.48

Annual General Meeting June 14, 2003© Infosys Technologies Limited Acquisitions Acquired IPRs worth Rs crore during the year Rs. cr Banking Business Unit Treasury Management Product16.97 Signature Display Software0.65 Sub-Total17.62 Engineering Service and Consulting Practice AUTOLAY Product24.50 Grand total42.12

Annual General Meeting © Infosys Technologies Limited Revenue segmentation

Annual General Meeting June 14, 2003© Infosys Technologies Limited Geographic segments

Annual General Meeting June 14, 2003© Infosys Technologies Limited Business segments

Annual General Meeting June 14, 2003© Infosys Technologies Limited Vertical domains

Annual General Meeting June 14, 2003© Infosys Technologies Limited Project segmentation

Annual General Meeting June 14, 2003© Infosys Technologies Limited Onsite - offshore segmentation

Annual General Meeting © Infosys Technologies Limited De - risking

Annual General Meeting June 14, 2003© Infosys Technologies Limited Client concentration FY 2001FY 2002FY 2003 Active clients Clients added % of revenue from top client7.3%6.1% 5.8% % of revenue from top 5 clients26.0%24.1% 23.4% % of revenue from top 10 clients39.2%39.4% 37.3% Clients accounting for >5% of revenue322 Million dollar clients million dollar clients million dollar clients million dollar clients36 9 Million dollar clients / total clients 29.3%28.3% 33.3% Repeat Business (%) 87.0% 88.0%92.0%

Annual General Meeting © Infosys Technologies Limited Cash management

Annual General Meeting June 14, 2003© Infosys Technologies Limited We have a strong and liquid Balance Sheet (Rs. crore) Mar 31, 2002%Mar 31, 2003% SOURCES OF FUNDS Share capital Reserves and surplus2, , Total2, , APPLICATION OF FUNDS Fixed assets Investments Deferred tax assets Sundry debtors Cash and equivalents1, , Other current assets Current liabilities & provisions(459.41)(22) (703.23)(25) Total2, , Continued to be a zero-debt company

Annual General Meeting June 14, 2003© Infosys Technologies Limited Our receivables are under control Days of sales receivable - 47 days Days of sales receivable - 52 days Age profile of accounts receivable

Annual General Meeting June 14, 2003© Infosys Technologies Limited Our cash flows are strong FY 2002 (Rs. Crore) FY 2003 (Rs. Crore) Operating cash flows Financing cash flows(104.77)(151.97) Proceeds on exercise of stock options Dividends paid(109.37)(165.49) Investing cash flows(280.23)(153.41) Purchases of fixed assets(322.74)(219.26) Proceeds on sale of fixed assets Long-term investments(10.32)(12.53) Interest income Effect of exchange differences Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year , Cash and cash equivalents, end of year1, ,638.51

Annual General Meeting June 14, 2003© Infosys Technologies Limited Our cash management policies »Financial policies »Maintain liquid assets at »25% of revenue and »40% of total assets »Earn »Return on capital – 2x cost of capital »Return on average invested capital – 3x cost of capital »Our current cost of capital is estimated to be 16.99% »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 14, 2003© Infosys Technologies Limited Cash management – How we performed DescriptionTargetFY 2001FY 2002FY 2003 ROCE (%)62.6%54.4%46.9% Times cost of Capital ROIC (%)105.4%83.1%79.9% Times cost of Capital Days sales outstanding Cash & equivalents / total assets40.0%41.6%49.4%57.3% Cash & equivalents / revenue25.0%30.4%39.4%45.2%

Annual General Meeting © Infosys Technologies Limited Other performance indicators

Annual General Meeting June 14, 2003© Infosys Technologies Limited Other performance indicators 56.1% 46.6% 38.8% Return on Average Net Worth (RONW) (%) 62.6% 54.4% 46.9% Return on Capital Employed (ROCE) (%) 105.4% 83.1% 79.9% Return on Invested Capital (ROIC) (%)

Annual General Meeting June 14, 2003© Infosys Technologies Limited Other performance indicators EPS from Ordinary Activities (Rs.) Cash EPS (Rs.) Dividend Payout (%) % 17.0% 19.9%

Annual General Meeting June 14, 2003© Infosys Technologies Limited Other performance indicators Book Value (Rs.) Price Earnings (Multiple) 68,547 62,737 68,259 Market Price / Adjusted IPO Price (%)

Annual General Meeting June 14, 2003© Infosys Technologies Limited Strength of the invisibles FY 2001FY 2002FY 2003 Average age of employees (yrs) Education index28,72531,385 44,972 Brand value (Rs.cr)5,3767,257 7,488 EVA (Rs.cr) Value added (Rs.cr)1,5632,239 3,043 HR value (Rs.cr)5,1239,539 10,417 Revenue from image enhancing clients (%)52%56%56%

Annual General Meeting © Infosys Technologies Limited Progeon

Annual General Meeting June 14, 2003© Infosys Technologies Limited Performance highlights »Started operations on April 03, 2002 »Break-even in Q4 »539 employees »5 customers »Revenues of Rs crore for the year »Projected revenue of Rs. 76 crore to Rs. 85 crore for next fiscal

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

Annual General Meeting June 14, 2003© Infosys Technologies Limited Revenues (US$ million) Gross Profit (US$ million) Operating Income (US$ million) %22%34%

Annual General Meeting June 14, 2003© Infosys Technologies Limited Operating Income (excl. stock comp) (US$ million) Net Income (US$ million) Net Income (excl. stock comp) (US$ million) %18%

Annual General Meeting June 14, 2003© 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) »99.18% of the company’s shares are now held in electronic form »Pending share transfer related litigation -18 cases

Annual General Meeting June 14, 2003© Infosys Technologies Limited Community services »Grants Rs crore during the year to Infosys Foundation, a not-for-profit trust to support initiatives that benefit society at large. »Continued to adhere to the principles of the UN Global Compact Programme. »Infosys donated 1,490 computers to various institutions across India through its Classrooms initiative launched since January 1999.

Annual General Meeting June 14, 2003© Infosys Technologies Limited Awards won during the year »Award for the best presented Annual Report for fiscal 2002 received from The Institute of Chartered Accountants of India. This award was received for the seventh consecutive year. »Asiamoney award for best investor relations in India for »Infosys was ranked number one in India in The Asset's survey on Best Corporate Governance.

Annual General Meeting © Infosys Technologies Limited Thank You