1. Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Living up to the promise T.V. Mohandas Pai

2. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Agenda ■ Promises made, promises kept ■ Predictability, sustainability, de-risking ■ Corporate Governance ■ Transparency and reporting ■ Acquisitions ■ Current issues – Infosys’ response and position ■ Crisis of confidence in corporations ■ Stock option accounting

3. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited In a challenging business environment… ■ General reduction in technology spending ■ ROI based IT investments by customers ■ Greater outsourcing of technology and offshore becoming mainstream ■ Challenging pricing environment ■ Rationalization of vendors and customers preference for large, end-to-end players Infosys has continued to execute, flawlessly, without diluting the corporation’s core values…

4. Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Promise Vs Performance

5. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Guidance vs Performance - Quarterly

6. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Guidance vs Performance - Annual

7. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited How did we do it? ■ Revenue and cost projections ■ Cost control ■ Re-calibrating Capex ■ Maintaining liquidity

8. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Revenue and cost projections ■ Relationship model gives us a good insight into our Clients’ plans / thinking ■ Over 85% repeat business ■ Implemented a state of the art pipeline visibility system – “InPipe” ■ Senior management is in close touch with key decision makers at important Clients ■ Added several large Fortune 1000 corporations to the Client list ■ De-risked our operations by maintaining a disciplined mix of business ■ Fixed costs budgeted on a conservative revenue assumption – automatic “stretch” built into the system ■ Closely monitored during the course of the quarter / year, should mid- course corrections become necessary ■ However, investments critical for long term growth are protected

9. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Cost management ■ Lowered fixed costs ■ Salary increase linked to attainment of company performance targets (70% of total increase linked to company performance last fiscal) ■ Percentage variable component paid during last fiscal Q1-100% Q2-68% Q3-0% Q4-0% ■ Reduced costs by closely tying recruitment to business needs ■ Just in time recruitment ■ Recruitment based on business outlook ■ Net addition to employees by quarter

10. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Cost management (Continued) ■ Tight control on non-revenue related expenses ■ Reduced recruitment for support (ex-sales & marketing) departments during the year ■ Implemented GDM for non-revenue generating activities in high-cost economies ■ Others cost control initiatives ■ Continuous rationalization of internal policies ■ Re-negotiations with vendors and service providers ■ Rationalization of employee benefits ■ Reduction in discretionary spending ■ Vacating leased premises, etc. ■ Cost savings ■ Cost cuts during the year aggregated 2.4% of revenues (3.5% excluding increase in personnel cost in the US)

11. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Results - the final cost structure

12. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited...recalibrated Capex spending…

13. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited …maintained liquidity to de-risk an uncertain environment…

14. Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Corporate governance

15. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Audit committee ■ Entirely comprised of independent directors ■ Have powers to recommend appointment/termination of auditors to the shareholders ■ Discuss various accounting issues directly with the auditors ■ Internal and external auditors have independent access to the committee ■ The financials are discussed in detail and adopted by the audit committee before being presented to and approved by the full board

16. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Executive compensation ■ Promoter directors are excluded from the stock option plans ■ Statute prohibits providing loans to directors ■ One of the lowest compensation for the senior management in the industry ■ Leadership by example

17. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Operations and disclosure policies ■ Operate through branches worldwide – hence only one legal entity / financials ■ Subsidiaries created only for business and strategic reasons ■ Where the subsidiary requires a different strategy, culture, skill sets, cost structure, etc. ■ No material off-balance sheet items ■ Highest disclosure standards ■ The mantra is “In case of doubt, disclose. Go beyond the statute.” ■ Transparent reporting on all operating and financial metrics at the time of announcing results ■ State of the art website with lots of useful information ■ Easy access to management / frequent investor interactions at conferences, roadshows, etc. ■ Full compliance with laws in all countries / regimes that we operate in

18. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Acquisitions Vs. Alliances ■ Infosys has been searching for a strategic acquisition for 3 years ■ Have not made an acquisition to date because of valuation issues, lack of acquired management commitment, lack of revenue visibility, financial weakness / discipline / viability, etc. ■ Organic growth has remained comfortable, however acquisition of target competencies important for the “next orbit” / differentiation ■ Alliances are a possible via-medium

19. Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Current issues

20. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Crisis of confidence in the market ■ Corporations re-stating their numbers ■ Accounting issues in large corporations ■ Disproportionate executive compensation ■ Questionable off-balance sheet items ■ Lack of basic corporate governance Infosys’ long history of principled corporate governance, conservative financial reporting and transparent corporate structures differentiates us in this environment

21. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Stock option accounting Views so far : ■ Unlike US companies, Indian corporates do not get tax benefits on employees exercising their options ■ Stock option accounting is a non-cash charge which does not alter the overall cash value of a company ■ Black-Scholes model based on historical volatility does not provide fair value of an option ■ Technology companies like Microsoft are against expensing options We are internally debating this issue

22. Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Sarbanes-Oxley Act The act requires all CEOs / CFOs to personally swear to the veracity of their financial statements ■ Infosys fully complies with the act

23. Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Thank You