6-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the quarter ended September 30, 2009

Commission File Number 000-25383

Infosys Technologies Limited

(Exact name of Registrant as specified in its charter)

Not Applicable.

(Translation of Registrant's name into English)

Electronics City, Hosur Road, Bangalore - 560 100, Karnataka, India. +91-80-2852-0261

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

TABLE OF CONTENTS

EXHIBIT 99.1

EXHIBIT 99.2

EXHIBIT 99.3

EXHIBIT 99.4

EXHIBIT 99.5

EXHIBIT 99.6

EXHIBIT 99.7

EXHIBIT 99.8

EXHIBIT 99.9

EXHIBIT 99.10

EXHIBIT 99.11

EXHIBIT 99.12

DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We hereby furnish the United States Securities and Exchange Commission with copies of the following information concerning our public disclosures regarding our results of operations and financial condition for the quarter ended September 30, 2009. The following information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On October 9, 2009, we announced our results of operations for the quarter ended September 30, 2009. We issued press releases announcing our results under International Financial Reporting Standards (“IFRS”) and Indian GAAP, copies of which are attached to this Form 6-K as Exhibits 99.1 and 99.2, respectively.

On October 9, 2009, we held a press conference to announce our results, which was followed by a question and answer session with those attending the press conference. The transcript of this press conference is attached to this Form 6-K as Exhibit 99.3.

In our press conference, we used a presentation entitled "Performance of the Infosys group for the Second Quarter ended September 30, 2009", which we have attached to this Form 6-K as Exhibit 99.4. We have also made available to the public on our web site, www.infosys.com, a fact sheet that provides details on our profit and loss account summary for the quarters ended September 30, 2009 and 2008 (as per Indian GAAP); revenue by geographical segment, service offering, project type, and industry classification; information regarding our client concentration; employee information and metrics; infrastructure information; consolidated IT services information; and reconciliation of accounts as per Indian GAAP and IFRS. We have attached this fact sheet to this Form 6-K as Exhibit 99.5.

On October 9, 2009, we also held two teleconferences with investors and analysts to discuss our results. Transcripts of those two teleconferences are attached to this Form 6-K as Exhibits 99.6 and 99.7, respectively.

Our officers held a question and answer session with analysts from CNBC India on October 9, 2009. The transcript of this question and answer session is attached to this Form 6-K as Exhibit 99.8. We placed advertisements in certain Indian newspapers concerning our results of operations for the quarter ended September 30, 2009, under Indian GAAP. A copy of the form of this advertisement is attached to this Form 6-K as Exhibit 99.9.

We have made available to the public on our web site, www.infosys.com, the following: Unaudited Condensed Financial Statements in compliance with IFRS; Indian GAAP Balance Sheet, Profit & Loss Account, Cash Flow statement, Schedules, Notes on Accounts and Auditors Report for the quarter and half-year ended September 30, 2009; Indian GAAP Consolidated Balance Sheet, Consolidated Profit & Loss Account, Consolidated Cash Flow statement, Consolidated Schedules, Consolidated Notes on Accounts and Auditors Report for the quarter and half-year ended September 30, 2009. We have attached these documents to this Form 6-K as Exhibits 99.10, 99.11, and 99.12, respectively.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.

	Infosys Technologies Limited
	/s/ S. Gopalakrishnan S. Gopalakrishnan
Date: October 14, 2009	Chief Executive Officer

INDEX TO EXHIBITS

Exhibit No.	Description of Document
99.1	IFRS Press Release
99.2	Indian GAAP Press Release
99.3	Transcript of October 9, 2009 Press Conference
99.4	Presentation: Performance of the Infosys group for the Second Quarter ended September 30, 2009
99.5	Fact Sheet regarding Registrant's Profit and Loss Account Summary for the quarters ended September 30, 2009 and 2008 (as per Indian GAAP); Revenue by Geographical Segment, Service Offering, Project Type, and Industry Classification; Information regarding Client Concentration; Employee Information and Metrics; Infrastructure Information; Consolidated IT Services Information; and Reconciliation of Accounts as per Indian GAAP and IFRS
99.6	Transcript of October 9, 2009 2:00 p.m. IST Earnings Call
99.7	Transcript of October 9, 2009 6:00 p.m. IST Earnings Call
99.8	Transcript of October 9, 2009 CNBC India Question and Answer session with Company's Officers
99.9	Form of Advertisement placed in Indian Newspapers
99.10	Unaudited Condensed Financial Statements in compliance with IFRS
99.11	Indian GAAP Balance Sheet, Profit & Loss Account, Cash Flow statement, Schedules, Notes on Accounts and Auditors Report for the quarter and half-year ended September 30, 2009
99.12	Indian GAAP Consolidated Balance Sheet, Consolidated Profit & Loss Account, Consolidated Cash Flow statement, Consolidated Schedules, Consolidated Notes on Accounts and Auditors Report for the quarter and half-year ended September 30, 2009

EX-99.1

Exhibit 99.1
IFRS Press Release

Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter ended September 30, 2009

Q2 revenues sequentially grew by 2.9%

Bangalore, India – October 09, 2009

Highlights

Consolidated results for the quarter ended September 30, 2009

Revenues were $ 1,154 million for the quarter ended September 30, 2009; YoY decline was 5.1%

• Net income after tax was $ 317 million for the quarter ended September 30, 2009; YoY decline was 0.9%
  
• Earnings per American Depositary Share (ADS) was 0.56 for the quarter ended September 30, 2009; YoY growth of 0.0%

“In the second quarter, the business climate has improved,” said S. Gopalakrishnan, CEO and Managing Director. “Clients are now looking to invest in a few strategic initiatives and relationships to maximize value from opportunities when the economic downturn ends.”

Business outlook

The company’s outlook (consolidated) for the quarter ending December 31, 2009 and for the fiscal year ending March 31, 2010, under International Financial Reporting Standards (IFRS), is as follows:

Outlook under IFRS^#

Quarter ending December 31, 2009

• Consolidated revenues are expected to be in the range of $ 1,155 million and $ 1,165 million; YoY decline of 1.4% to 0.5%
• Consolidated earnings per American Depositary Share are expected to be $0.50; YoY decline of 13.8%

Fiscal year ending March 31, 2010

• Consolidated revenues are expected to be in the range of $ 4.60 billion and $ 4.62 billion; YoY decline of 1.3% to 1.0%
• Consolidated earnings per American Depositary Share are expected to be in the range of $ 2.09 and $ 2.10; YoY decline of 7.1% to 6.7%

^# Exchange rates considered for quarters ending December 31, 2009 and March 31, 2010 for  major global currencies: AUD / USD – 0.87; GBP / USD – 1.60; Euro / USD – 1.46

Expansion of services and significant projects

Our strategy through the downturn has been to build our strengths rather than limit ourselves to navigating the challenges. Following this route, we are confident of emerging stronger when the economic environment improves and better poised to deliver enhanced value to all our stakeholders. We are sharpening focus on Research & Development, Intellectual Property-based solutions, and ‘New Engagement Models’ (NEMs) that offer flexible pricing and greater operational control and efficiency to clients. In addition, true to the spirit of our Global Delivery Model, we are continuing to invest and expand in regions such as India, Brazil, Mexico, and China. We have a sales group dedicated to large outsourcing deals that has helped us secure significant projects this year. We believe our expertise in large-scale transition management will differentiate us in the near future.

Clients have been impressed by our engineering services. An industrial products and services company is testing our ‘Enterprise Collaboration Platform’ to transform its intranet from an information repository into a next-generation content hub that engages employees better. A leading mobile service provider selected us as its strategic partner to run its ‘Bid Management Process’. The deal involves setting up our patent-pending ‘Infosys Sales Effectiveness Center’ that will own the bid process, pricing, and contract services. For an apparel manufacturer, we are implementing our ‘Product Master Syndication Solution’ that will support the entire product lifecycle and provide a single source of data. A power major sought our ‘Plant Design and Management System Solution’ that enables collaboration across distributed teams. A large manufacturer selected us as its prime systems integration partner to implement and support our Product Lif ecycle Management solution based on Siemens TeamCenter product.

We continue to focus on large transformational engagements, especially through our consulting and enterprise solution offerings. A broadcasting company partnered with us to develop new digital media services. A service provider for retailers engaged us to develop an Order Management System. A large bank selected us to conduct end-to-end testing as well as user-acceptance testing for the implementation of Finacle™, our core banking solution and integration with other applications. A large bank chose us for end-to-and systems integration in the transformation program of its corporate banking e-channel system. A provider of high-performance networking systems partnered with us for a transformational program to scale up its core engineering processes.

“The global currency markets continue to be extremely volatile, even though we have seen some stability in the rupee against the US dollar this quarter,” said V. Balakrishnan, Chief Financial Officer. “We continue to focus on high quality growth with superior margins. Our balance sheet has been further strengthened with cash and cash equivalents reaching US$ 2.8 billion.”

About Infosys Technologies Ltd.

Infosys (NASDAQ: INFY) defines, designs and delivers IT-enabled business solutions that help Global 2000 companies win in a Flat World. These solutions focus on providing strategic differentiation and operational superiority to clients. With Infosys, clients are assured of a transparent business partner, world-class processes, speed of execution and the power to stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over 105,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. For more information, visit www.infosys.com.

Safe Harbor

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potenti al acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2009 and on Form 6-K for the quarter ended June 30, 2009. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.

Unaudited Consolidated Financial Statements (Condensed) in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS)

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets as of

(Dollars in millions except share data)

	September 30, 2009	March 31,2009
ASSETS
Current assets
Cash and cash equivalents	$2,208	$2,167
Available-for-sale financial assets	670	–
Trade receivables	700	724
Unbilled revenue	164	148
Derivative financial instruments	5	–
Prepayments and other assets	108	81
Total current assets	$3,855	$3,120
Non-current assets
Property, plant and equipment	946	920
Goodwill	144	135
Intangible assets	6	7
Deferred income tax assets	109	88
Income tax assets	59	54
Other non-current assets	69	52
Total non-current assets	1,333	1,256
Total assets	$5,188	$4,376
LIABILITIES AND EQUITY
Current liabilities
Trade payables	$2	$5
Derivative financial instruments	–	22
Current income tax liabilities	137	115
Tax on dividend	–	–
Client deposits	1	1
Unearned revenue	116	65
Employee benefit obligations	29	21
Provisions	22	18
Other current liabilities	354	290
Total current liabilities	661	537
Non-current liabilities
Deferred income tax liabilities	8	7
Employee benefit obligations	48	48
Total liabilities	717	592
Equity
Share capital – Rs. 5 ($0.16) par value 600,000,000 equity shares authorized, issued and outstanding 570,478,093 and 572,830,043 as of September 30, 2009 and March 31, 2009, respectively	64	64
Share premium	681	672
Retained earnings	4,070	3,618
Other components of equity	(344)	(570)
Total equity attributable to equity holders of the company	4,471	3,784
Total liabilities and equity	$5,188	$4,376

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Comprehensive Income

(Dollars in millions except share data)

	Three months ended September 30,		Six months ended September 30,
	2009	2008	2009	2008
Revenues	$1,154	$1,216	$2,276	$2,371
Cost of revenues	662	691	1,305	1,388
Gross profit	492	525	971	983
Operating Expenses:
Selling and marketing expenses	57	68	110	129
General and administrative expenses	85	96	173	183
Total operating expenses	142	164	283	312
Operating Profit	350	361	688	671
Other income/(expense)	8	(28)	15	(46)
Finance income	41	43	89	89
Profit before income taxes	399	376	792	714
Income tax expense	82	56	162	86
Net Profit	$317	$320	$630	$628
Earnings per equity share
Basic ($)	0.56	0.56	1.10	1.10
Diluted ($)	0.56	0.56	1.10	1.10
Weighted average equity shares used in computing earnings per equity share
Basic	570,343,178	569,592,198	570,229,204	569,479,023
Diluted	571,046,545	570,721,306	570,948,478	570,723,017

Contact

Investor Relations	Shekar Narayanan, India +91 (80) 4116 7744 shekarn@infosys.com	Sandeep Mahindroo, USA +1 (646) 254 3133 sandeep_mahindroo@infosys.com
Media Relations	Sarah Vanita Gideon, India +91 (80) 4156 4998 Sarah_Gideon@infosys.com	Peter McLaughlin, USA +1 (213) 268 9363 Peter_McLaughlin@infosys.com

EX-99.2

Exhibit 99.2
Indian GAAP Press Release

Infosys Technologies Announces Results for the Quarter Ended September 30, 2009

Q2 revenues sequentially grew by 2.1%

Bangalore, India – October 09, 2009

Highlights

Consolidated results for the quarter ended September 30, 2009

• Income was Rs. 5,585 crore for the quarter ended September 30, 2009; YoY growth
  was 3.1%
• Net profit after tax was Rs. 1,540 crore for the quarter ended September 30, 2009; YoY growth was 7.5%
• Earnings per share increased to Rs. 26.86 from Rs. 25.02 in the corresponding quarter of the previous year; YoY growth was 7.4%
• Declared an Interim dividend of Rs. 10 per share which is  200% on par value of Rs. 5 per share ( same as previous year)

Others

• 35 clients were added during the quarter by Infosys and its subsidiaries
• Gross addition of 6,069 employees (net addition of 1,548) for the quarter by Infosys and its subsidiaries
• 1,05,453 employees as on September 30, 2009 for Infosys and its subsidiaries

“In the second quarter, the business climate has improved,” said S. Gopalakrishnan, CEO and Managing Director. “Clients are now looking to invest in a few strategic initiatives and relationships to maximize value from opportunities when the economic downturn ends.”

Business outlook

The company’s outlook (consolidated) for the quarter ending December 31, 2009 and for the fiscal year ending March 31, 2010, under Indian GAAP and International Financial Reporting Standards (IFRS) is as follows:

Outlook under Indian GAAP – consolidated*

Quarter ending December 31, 2009

• Income is expected to be in the range of Rs. 5,429 crore and Rs. 5,476 crore; YoY decline
  of 6.2% to 5.4%
• Earnings per share is expected to be in the range of Rs. 23.35 and Rs. 23.56; YoY decline
  of 18.5% to 17.8%

Fiscal year ending March 31, 2010

• Income is expected to be in the range of Rs. 21,961 crore and Rs. 22,055 crore; YoY growth of 1.2% to 1.7%
• Earnings per share is expected to be in the range of Rs. 99.60 and Rs. 100.00; YoY decline
  of 4.8% to 4.4%

* Conversion 1 US$ = Rs. 47.00 considered for quarters ending December 31, 2009 and March 31, 2010.

Outlook under IFRS^#

Quarter ending December 31, 2009

• Consolidated revenues are expected to be in the range of $ 1,155 million and $ 1,165 million; YoY decline of 1.4% to 0.5%
• Consolidated earnings per American Depositary Share are expected to be $ 0.50; YoY decline of 13.8%

Fiscal year ending March 31, 2010

• Consolidated revenues are expected to be in the range of $ 4.60 billion and $ 4.62 billion; YoY decline of 1.3% to 1.0%
• Consolidated earnings per American Depositary Share are expected to be in the range of
  $ 2.09 and $ 2.10; YoY decline of 7.1% to 6.7%

^# Exchange rates considered for quarters ending December 31, 2009 and March 31, 2010 for major global currencies: AUD / USD – 0.87; GBP / USD – 1.60; Euro / USD – 1.46

Awards and recognition

The economic downturn highlighted our innate strengths as industry observers and media presented us a rousing encomium. The Wall Street Journal Asia survey recognized us as the ‘Most Admired Indian Company’ in its Asia 200, an annual ranking of Asia’s leading companies. We have been ranked in Fortune magazine’s 100 Fastest-growing Companies 2009. We are the only Indian IT services company among "the world’s supercharged performers" that are growing even during a downturn. We have been ranked at No. 25 in BusinessWeek’s InfoTech100, a listing of the world’s best performing technology companies in 2009. This list rates technology companies that have managed to meet and exceed expectations despite the downturn.

Expansion of services and significant projects

Our strategy through the downturn has been to build on our strengths rather than limit ourselves to navigating the challenges. Following this route, we are confident of emerging stronger when the economic environment improves and better poised to deliver enhanced value to all our stakeholders. We are sharpening focus on Research & Development, Intellectual Property-based solutions, and ‘New Engagement Models’ (NEMs) that offer flexible pricing and greater operational control and efficiency to clients. In addition, true to the spirit of our Global Delivery Model, we are continuing to invest and expand in regions such as India, Brazil, Mexico, and China. We have a sales group dedicated to large outsourcing deals that has helped us secure significant projects this year. We believe our expertise in large-scale transition management will differentiate us in the near future.

Clients have been impressed by our engineering services. An industrial products and services company is testing our ‘Enterprise Collaboration Platform’ to transform its intranet from an information repository into a next-generation content hub that engages employees better. A leading mobile service provider selected us as its strategic partner to run its ‘Bid Management Process’. The deal involves setting up our patent-pending ‘Infosys Sales Effectiveness Center’ that will own the bid process, pricing, and contract services. For an apparel manufacturer, we are implementing our ‘Product Master Syndication Solution’ that will support the entire product lifecycle and provide a single source of data.A power major sought our ‘Plant Design and Management System Solution’ that enables collaboration across distributed teams. A large manufacturer selected us as its prime systems integration partner to implement and support our Product Lifecy cle Management solution based on the Siemens TeamCenter product.

We continue to focus on large transformational engagements, especially through our consulting and enterprise solution offerings. A broadcasting company partnered with us to develop new digital media services. A service provider for retailers engaged us to develop an Order Management System. A large bank selected us to conduct end-to-end testing as well as user-acceptance testing for Finacle™ implementation and integration with other applications. A large bank chose us for end-to-end systems integration in the transformation program of its corporate banking e-channel system. A provider of high-performance networking systems partnered with us for a transformational program to scale up its core engineering processes.

 “The pricing environment seems to have stabilized,” said S.D. Shibulal, Chief Operating Officer. “There is increasing traction for our system integration services due to Mergers & Acquisition, especially in the Financial Services segment.”

Finacle^TM

Finacle™ continued to grow its business, adding four clients this quarter.  Of these, two were from Europe, Middle East and Africa (EMEA) region and two from the Asia Pacific region.

Eleven client projects went live in the quarter. Of these, eight projects went live in the Asia Pacific region and three in the EMEA region.

Gartner, Inc. has positioned Finacle™ core banking solution in the Leaders Quadrant of the 'Magic Quadrant for International Retail Core Banking (IRCB)' report.

Infosys BPO

A leading bank engaged Infosys BPO to review mortgage documents, validate data across various systems, and remediate the basis of the actual document for 2,000 loans from a portfolio of 10 million loans. A large manufacturer chose Infosys BPO to service select finance, accounting, HR, customer services, and IT helpdesk functions.

New Markets

As the pioneer of the Global Delivery Model and a proponent of a Flat World, we are strengthening our presence across the globe. Our focus particularly has been on powerful emerging markets such as Mexico, Brazil, China, and India.

In a span of two years, we have established multiple services in Mexico, including IT, BPO and Consulting services, and Core Banking solutions for our global clients and those across Latin America. Our Mexico center continues to provide near-shore value proposition to our US clients in Application Development and Maintenance, Enterprise Solutions, and Independent Validation Services. In addition, we have partnered with the country’s government and universities to design and roll out a unique finishing school program for engineering graduates. 

We are setting up our first Development Center in Brazil. This is our second Latin America (Latam) operation, aimed at serving clients which are head quartered either in Brazil, or outside. Through operations in Brazil, we can manage the Portuguese needs of Brazilian clients and with our Mexico operations, we can manage the Spanish needs of the Latam region. In this way, operating from Mexico and Brazil prepares us for growth here.

Our China Development Center has grown in the last one year to deliver BPO and IT services to clients in the US, Europe, and Asia. We have been expanding our delivery capability in horizontal services such as Enterprise Solutions, Independent Validation Services, and Product Engineering as well as investing in contextualizing our Finacle™ Banking Solution for the Chinese market. We are also working closely with the government to tap, and subsequently nurture the IT talent pool in China.

In India, we continue the impetus of the previous quarters. This quarter, we were awarded the eBiz Project by the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India. The project includes designing and developing the eBiz platform, establishing the support IT infrastructure, implementing, maintaining and expanding the eBiz solution and services for the next 10 years.

In emerging markets elsewhere, we continue to maintain our momentum. A mining company engaged us for Sourcing and Procurement as well as Finance and Accounting outsourcing. A telecommunications company selected us to design and implement a Testing Center of Excellence. An agri products and processing business selected us as a strategic global partner for its infrastructure management services.

Process innovation

This quarter, the United States Patent and Trademark Office (USPTO) granted our fourth patent: ‘Automated Software Testing Architecture Using a Multi-level Framework’. The patent discloses a three-level framework for software testing architecture, especially testing complex and domain-intensive products.

During the quarter, Infosys applied for four patents in India and the U.S. With this, Infosys has an aggregate of 203 patent applications (pending) in India and the U.S. and has been granted four patents by USPTO.

Liquidity and capital expenditure

Cash and cash equivalents, including investments in liquid mutual funds, as on September 30, 2009 was Rs. 13,796 (Rs. 8,858 crore as on September 30, 2008).

“The global currency markets continue to be extremely volatile, even though we have seen some stability in the rupee against the US dollar this quarter,” said V. Balakrishnan, Chief Financial Officer. “We continue to focus on high quality growth with superior margins. Our balance sheet has been further strengthened with cash and cash equivalents reaching US$ 2.8 billion.”

Human resources

During the quarter, Infosys and its subsidiaries added 6,069 employees (gross). The net addition during the quarter was 1,548.

“In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling client needs today,” said T. V. Mohandas Pai, Member of the Board and Head – HRD and Education & Research. “We have successfully completed the implementation of iRACE, our program for growth-focused career architecture across the company, thus completely transforming our people strategy.”

About Infosys Technologies Ltd.

Infosys (NASDAQ: INFY) defines, designs and delivers IT-enabled business solutions that help Global 2000 companies win in a Flat World. These solutions focus on providing strategic differentiation and operational superiority to clients. With Infosys, clients are assured of a transparent business partner, world-class processes, speed of execution and the power to stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over 105,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. For more information, visit www.infosys.com.

Safe Harbor

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potenti al acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2009 and on Form 6-K for the quarter ended June 30, 2009. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to u pdate any forward-looking statements that may be made from time to time by or on behalf of the company.

Contact

Investor Relations	Shekar Narayanan, India +91 (80) 4116 7744 shekarn@infosys.com	Sandeep Mahindroo, USA +1 (646) 254 3133 sandeep_mahindroo@infosys.com
Media Relations	Sarah Vanita Gideon, India +91 (80) 4156 4998 Sarah_Gideon@infosys.com	Peter McLaughlin, USA +1 (213) 268 9363 Peter_McLaughlin@infosys.com

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore

Balance Sheet as at	September 30, 2009	March 31, 2009
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	287	286
Reserves and surplus	19,794	17,523
	20,081	17,809
APPLICATION OF FUNDS
FIXED ASSETS
Original cost	6,462	5,986
Less: Accumulated depreciation and amortization	2,579	2,187
Net book value	3,883	3,799
Add: Capital work-in-progress	412	615
	4,295	4,414
INVESTMENTS	4,152	1,005
DEFERRED TAX ASSETS, NET	152	102
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	3,133	3,390
Cash and bank balances	8,243	9,039
Loans and advances	3,572	3,164
	14,948	15,593
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	1,809	1,507
Provisions	1,657	1,798
NET CURRENT ASSETS	11,482	12,288
	20,081	17,809

NOTE: The audited Balance Sheet as at September 30, 2009 has been taken on record at the Board meeting held on October 09, 2009.

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore, except per share data

Profit and Loss Account for the	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Income from software services and products	5,201	5,066	10,305	9,582
Software development expenses	2,851	2,750	5,621	5,361
GROSS PROFIT	2,350	2,316	4,684	4,221
Selling and marketing expenses	234	256	449	472
General and administration expenses	317	342	663	627
	551	598	1,112	1,099
OPERATING PROFIT BEFORE DEPRECIATION	1,799	1,718	3,572	3,122
Depreciation	207	161	408	316
OPERATING PROFIT BEFORE TAX	1,592	1,557	3,164	2,806
Other Income, net	232	77	497	208
NET PROFIT BEFORE TAX	1,824	1,634	3,661	3,014
Provision for taxation	386	244	759	362
NET PROFIT AFTER TAX	1,438	1,390	2,902	2,652
Balance Brought Forward	11,769	7,903	10,305	6,642
Less: Residual dividend paid	–	–	–	1
Additional dividend tax	–	–	–	–
	11,769	7,903	10,305	6,641
AMOUNT AVAILABLE FOR APPROPRIATION	13,207	9,293	13,207	9,293
Dividend
Interim	573	572	573	572
Dividend tax	97	97	97	97
Amount transferred to general reserve	–	–	–	–
Balance in profit and loss account	12,537	8,624	12,537	8,624
	13,207	9,293	13,207	9,293
EARNINGS PER SHARE
Equity shares of par value Rs. 5/- each
Basic	25.08	24.28	50.64	46.34
Diluted	25.05	24.23	50.57	46.24
Number of shares used in computing earnings per share
Basic	57,31,76,778	57,24,25,798	57,30,62,804	57,23,12,623
Diluted	57,38,80,145	57,35,54,906	57,37,82,078	57,35,56,617
Total Public Shareholding @
Number of shares	37,25,67,451	36,82,72,931	37,25,67,451	36,82,72,931
Percentage of shareholding	64.99	64.33	64.99	64.33

NOTE:
1. The audited Profit & Loss Account for the quarter ended September 30, 2009 has been taken on record at the Board meeting held on October 09, 2009
2. A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com
^@ Total public shareholding as defined under clause 40A of the Listing Agreement (excludes shares held by founders and American Depositary Receipt Holders)

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Consolidated Balance Sheet as at	September 30, 2009	March 31, 2009
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	287	286
Reserves and surplus	20,470	17,968
	20,757	18,254
APPLICATION OF FUNDS
FIXED ASSETS
Original cost	7,681	7,093
Less: Accumulated depreciation and amortization	2,858	2,416
Net book value	4,823	4,677
Add: Capital work-in-progress	420	677
	5,243	5,354
INVESTMENTS	3,222	–
DEFERRED TAX ASSETS,NET	182	126
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	3,366	3,672
Cash and bank balances	9,051	9,695
Loans and advances	3,718	3,279
	16,135	16,646
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	2,271	2,004
Provisions	1,754	1,868
NET CURRENT ASSETS	12,110	12,774
	20,757	18,254

NOTE:

1. Principles of consolidation: The financial statements are prepared in accordance with the principles and procedures for the preparation and presentation of consolidated financial statements as set out in the Accounting Standard on Consolidated Financial Statements prescribed by the Institute of Chartered Accountants of India. The financial statements of the parent company Infosys Technologies Limited (“Infosys” or “company”) and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gains / losses.
2. The audited Balance Sheet as at September 30, 2009 has been taken on record at the Board meeting held on October 09, 2009.

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except per share data

Consolidated Profit and Loss Account for the	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Income from software services, products and business process management	5,585	5,418	11,057	10,272
Software development and business process management expenses	2,963	2,891	5,878	5,645
GROSS PROFIT	2,622	2,527	5,179	4,627
Selling and marketing expenses	276	303	537	560
General and administration expenses	413	430	841	794
	689	733	1,378	1,354
OPERATING PROFIT BEFORE DEPRECIATION	1,933	1,794	3,801	3,273
Depreciation	232	177	454	346
OPERATING PROFIT BEFORE TAX	1,701	1,617	3,347	2,927
Other income, net	236	66	505	183
NET PROFIT BEFORE TAX	1,937	1,683	3,852	3,110
Provision for taxation	397	251	785	376
NET PROFIT AFTER TAX	1,540	1,432	3,067	2,734
Balance Brought Forward	12,087	8,129	10,560	6,828
Less: Residual dividend paid	–	–	–	1
Additional dividend tax	–	–	–	–
	12,087	8,129	10,560	6,827
AMOUNT AVAILABLE FOR APPROPRIATION	13,627	9,561	13,627	9,561
Dividend
Interim	573	572	573	572
Dividend tax	97	97	97	97
Amount transferred to general reserve	–	–	–	–
Balance in profit and loss account	12,957	8,892	12,957	8,892
	13,627	9,561	13,627	9,561
EARNINGS PER SHARE
Equity shares of par value Rs. 5/- each
Basic	26.86	25.02	53.52	47.78
Diluted	26.83	24.97	53.45	47.67
Number of shares used in computing earnings per share
Basic	57,31,76,778	57,24,25,798	57,30,62,804	57,23,12,623
Diluted	57,38,80,145	57,35,54,906	57,37,82,078	57,35,56,617
Total Public Shareholding @
Number of shares	37,25,67,451	36,82,72,931	37,25,67,451	36,82,72,931
Percentage of shareholding	64.99	64.33	64.99	64.33

^@ Total public shareholding as defined under clause 40A of the Listing Agreement (excludes shares held by founders and American Depositary Receipt Holders)

EX-99.3

Exhibit 99.3
Press Conference

INFOSYS TECHNOLOGIES LIMITED
PRESS CONFERENCE
Q2 FY 10 RESULTS
OCTOBER 09, 2009

CORPORATE PARTICIPANTS

Kris Gopalakrishnan
Infosys Technologies – CEO and MD

S. D. Shibulal
 Infosys Technologies – COO

V. Balakrishnan
 Infosys Technologies – CFO

Ashok Vemuri
Infosys Technologies – Head – Banking and Capital Markets and Member – Executive Council

BG Srinivas
Infosys Technologies – Head – Manufacturing and Member – Executive Council

Mohandas Pai
Infosys Technologies – Director and Head – HR, E&R, Fac and Adm

Amitabh Chaudhry
Infosys BPO - CEO

MEDIA PARTICIPANTS

Gautam Das
Deccan Chronicle

Balaji
Rediff

Shamit Paul
Business Line

Rahul
Business Today

Biju
Business Standard

Akansha
Cybermedia

Hari
Bloomberg

Sumeet
Reuters

Deepak
Business Standard

Sarah

Good afternoon and welcome everybody to Infosys Q2 Results. We will start off today proceeding with the presentation by Kris on the company’s financial performance. This will be followed by a discussion with Shibu on the company’s operational performance. Kris will then share the financial outlook and then we will head into the Q&A session. In the Q&A session please press the red button in front of you, please state your name and then the question. Over to Kris.

Kris Gopalakrishnan

Thank you Sarah. And good afternoon to everyone. There has been an all round excellent performance this quarter, sequentially the revenue has increased by 2.8%. In constant currency terms the revenue increased by 1.3%, volumes increased by 2.3%, offshore volumes increased by 3%. On the revenue per employee, pricing side, we saw a slight improvement. Blended pricing went up by 0.4%, utilization improved to 73.2%. And we continue to recruit people, this quarter we have added gross 6,000 odd employees. We have announced a compensation increase of 8% in India and 2% outside India. So all round good performance and now I will share some details with you. This is a safe harbor statement.

So the income in Rupees is Rs.5585 Crores for the quarter ended September 30th, year-on-year growth 3.1%. The net profit after tax is Rs. 1540 Crores, year-on-year growth of 7.5%. Earnings per Share increased to Rs. 26.86 from last year’s Rs. 25.02 which is again an year-on-year growth of 7.5%. 35 new clients were added in this quarter. Total, as I said 6069 employees were added at the gross level. The number of employees now stands at 105,000.

Here are the details from the P&L. As I said earnings per share of Rs.26.86 diluted 26.83. Now I will hand it over to Mr. Shibulal for giving you more details about the operations and then I will come back and take you through the guidance. Thank you.

S.D. Shibulal

Good morning everyone. Just to give you some color on the results, we see that the demand environment has stabilized. Clients are making some decisions especially in the area of mergers and acquisitions. Organization in the BFSI segment who have gone through mergers and acquisitions are finally taking those decisions which are required to do rationalization of systems and that is leading to opportunities for us in the BFSI segment as well as in the system integration space, but at the same time clients remain very cautious. As per the client survey which we did recently through our sales folks, we find that the recovery is expected to be protracted and means more are more customers are saying that the recovery will be into late 2010.

They also continue to be selective in spending. So we are seeing stability and caution both simultaneously in the markets. We are not expecting a budget flush end of this year. There may be money left in the budgets but we are not expecting that the clients will spend it because we believe that the organizations will continue to be cautious and conservative in spend. Next year’s budget, we expect to be somewhat flat with a very small upturn.

So here are some of the details, North America versus Europe. Their percentages have remained somewhat same, US has grown marginally. Utilization excluding trainees has gone up to 73%. Our comfort level is 77% to 80%, last quarter it was 71%. Time and material, fixed price there is no material change. Onsite-offshore ratio again there is not much, onsite has marginally come down in revenue terms.

Clients we have added 35 new clients. 3 of them are Fortune 500 clients. Our total number of clients in the Fortune 500 space has reached 112 which is a very good number to have. 330 clients have given us million dollar revenue on LTM basis. And our top client has come down to 4.6%. Growth has been overall all around this quarter, Top 10 customers grew by 5.8% and the remaining grew by 1.8% which means that the contribution to growth came from all our clients. Our accounts receivable are extremely healthy at 56 days.

These are some of the awards and recognitions in this quarter. For example, Fortune Magazine has ranked us one of the 100 Fastest Growing Companies in 2009. We are the only Indian IT services company in the world’s supercharged performers.

Client acquisition and expansion of services - as I said, we are seeing traction in BFSI, retail and some traction in energy and utilities. Manufacturing continues to be challenging. We believe it will take some more time for manufacturing to pickup. From a service line perspective, there is traction in BPO, infrastructure management and system integration. These are some of the specific wins. Finacle continues to grow strong. It added 4 clients this quarter, 2 of them in Europe, Middle East and Africa. 11 clients went live for Finacle this quarter. We have been awarded a new patent this quarter, Automated Service Software Testing Architecture using a multi-level framework. We have applied for 4 new patents in US. And that takes the number to 203.

Here are some of the updates on the new markets. We are setting up a new development center, the first development center in Brazil. The China development center has crossed 1000 people. We are continuing to hire in China.

On the HR front, we have added 6000 people this quarter gross, 1500 people net. Our total number is at 105,000. The lateral recruitment is 1,000 people this quarter. And attrition is about 11%. Update on infrastructure, we have 24 million square feet which can accommodate 106000 people at this point. Another 2 million in construction. So just to conclude as I said, the demand environment has stabilized that is what we are seeing in the market but the clients continue to be cautious and while they are taking decisions, they are cautious about the recovery in the economic market. With that let me hand it back to Kris. Thank you.

Kris Gopalakrishnan

Thanks Shibu. We have revised our guidance upwards. The income is expected to be in the range of Rs. 5429 to Rs. 5496 Crores. Earnings per share are expected to be in the range of Rs. 23.35 to Rs. 23.56. Overall for the year, the income is expected to be in the range of Rs. 21,961 to Rs 22,055 Crores. The numbers are actually better than what we started for the year. And Earning per Share is Rs.99.6 to Rs.100, again better than what we projected. We have assumed a conversion rate of Rs. 47 to a Dollar. We are considering the volatility in the Rupee. We said rather than using the quarter end, we are going to use 47. Rupee is even higher than this at this point.

In summary the model has proved to be resilient, the model has come out to be very strong. Our strategy has been to build on our strengths and I think that is starting to pay off. If you look at our ability to continue to focus on our clients, benefit from consolidation, benefit from all the challenges and the negotiations etc. that have happened in these times, I think we have come out stronger. We have demonstrated that we are able to sustain our margins. So clearly again that shows the robustness and the strength of the model. We are confident that we are going to emerge stronger when the economy improves. We are sharpening our focus on research, development, IP- based solutions, new engagement models, so that we can be flexible, we can meet the expectations of our clients,. The trends are there. We clearly see that trends like cloud computing, utility model and things like that so we are preparing ourselves to take advantage of those things. We are expanding geographically creating centers outside India. We are investing in sales and we believe that our strength in managing large deals, managing large transformational projects, all will help us as the situation improves. Thank you and we are open for Q&A. Thanks

Gautam Das

This is Gautam Das from Deccan Chronicle. Kris, can you put a little more color on the environment and tell us if the era of sequential de-growth is over. Are there enough deals in the market to say that? Thank you

Kris Gopalakrishnan

If you look at this quarter, we are showing a volume growth of 2.3%. revenue growth of 2.8%. If you look at the guidance, we are looking at a sequential growth of app 1% for the next 2 quarters. For next year, we will come back to you at the end of this fiscal year but clearly this year we are saying that yes a small growth we will continue for the next two quarters.

Balaji

The projected revenue guidance, Mr. Gopalakrishnan, average I took as Rs 5368 crores but it is shown that Rs. 5585 crores, an increase of Rs 219 crores. Could you explain from where you got this thing inspite of the currency volatility? For quarter 3 the guidance shows dip both sequentially and also fiscal. And so I would like to know first is how is this in spite of the fiscal guidance that you gave for 2nd Quarter was Rs. 5368 but it has gone up to Rs. 5585 crores, this Rs. 219 crores how much is it because of the exchange rate and how much because of the ….?

V. Balakrishnan

It is mainly because of the cross currency movements, dollar depreciated against all the major currencies. That gave something around $18 million extra revenues that is why the Rupee number is higher as compared to the guidance we had given.

Shamit Paul:  

This is Shamit Paul from Business Line. Question on the business environment, Kris said that it is stable but the clients are still cautious but the 2nd Quarter numbers were good. So do you expect this growth momentum to continue or is it a function of pent up demand that gave deals in this particular quarter?

S. D. Shibulal

So as we said, we are seeing stability and caution both and some decisions are being made. So that is what is driving behavior. Our guidance is a statement of facts as we see it today. So we are considering the current environment, the stability which we are seeing, the deal pipeline and also the caution from the clients in their survey as well as remarks and that is where the guidance is going. So based on that, we have guided for 0.1% to 1% growth in Q3. We believe that the environment will remain stable. At the same time, if there is an opportunity to take more business or to engage with clients on more business, we will definitely do that. We are fully prepared, our utilization is 73%, we have enough leeway in utilization. We are investing in sales and marketing. So we are fully prepared to take advantage of any opportunity which will come through.

Balaji

Sir, my question was not unanswered by Mr. Gopalakrishnan. Sir I was asking that when you have shown that from the projected guidance an increase of Rs.217 Crores and he explained that because of that Dollar depreciated against currencies but for Quarter 3 guidance again you show less and then when you end up, you will again end up more, that will be again because of the currency or is it in revenue coming. The question is it continues to be flat or less than flat?

Kris Gopalakrishnan

See first thing to remember is we have assumed Rupee Dollar exchange rate at 47. So there is an impact because of that. Now will we end up more or not. As Shibu said we have the capacity to take advantage of any opportunity we see. So if the business continues to be robust, continues to be there, we could end up better but right now as we see today, our model shows that we will have a revenue that is what we have given. Based on the model, this is the guidance which we have given.

Balaji

Yeah, but the fiscal year guidance, quarter-on-quarter again it has gone up substantially. It actually touched Rs 220 billion from Rs 217 billion. What could that reason be that you find more revenue coming in 3rd and 4th Quarter?

Kris Gopalakrishnan

We have done better in the first half and then we are saying that this momentum will give us better growth in this 3rd and 4th quarter. So that is reflected in our guidance.

Balaji

In spite of any fluctuation in the currencies, despite that?

Kris Gopalakrishnan

No, currency we have assume to be Rs.47 to the Dollar. If currency moves significantly down, significantly up, yes it will have an impact in spite of the hedging etc. we have today. Our assumption is the exchange rate is 47 for modeling purposes.

Balaji

Okay sir, thank you.

Analyst

A question for Mr. Balakrishnan, what is your hedging position and do you continue with the short-term strategy or do you intend to change it in anyway?

V. Balakrishnan

Our hedging position is around $699 million. We will continue to take a short-term view because extreme volatility continues even now. If you look at all the cross currencies, they moved by around 10% in this quarter and rupee is also behaving in the same way. It has gone up to 46.30 or so from something around 50 at the end of March. So it is very difficult to take a long-term view in a very volatile environment like this. So we will continue to take a short-term view.

Mr. Rahul

This is Rahul from Business Today. Could you give me some more background on this maintaining your margins, what are the specific lines you are talking about that give you perhaps higher margins than the average company margins in terms of maybe systems integration or other service lines?

S. D. Shibulal

So the margins, first of all it is an aspiration for us. We aspire to have one of the best margins in the industry. We have multiple levers by which we can maintain our margins. Of course we have service lines like System Integration, Consulting and Enterprise Solutions some of them giving us higher revenue productivity as well as higher margins. We also have service lines like infrastructure management, independent validation services they do give us better margins due to their higher level of offshore. So then from a client base of course we have clients at varying levels and as I said we have multiple levers which we can use. It is not only these, we have a pyramid structure of the organization, scales benefits from growth, then the investments we make into other initiatives. So there are multiple levers which we can use to manage our margins.

Shamit Paul

Hi this is Shamit again, the volume growth that you have seen has it come mainly from North America and how is Europe doing in that?

Ashok Vemuri

I will address the North America part of it. We have seen actual volume growth in North America compared to previous quarters and this is across multiple sectors. We have seen growth in BFSI, we have seen growth in retail, we are seeing growth in the utility sector which is benefiting from the increased stimulus packages. We are seeing an improvement in outlook for insurance and healthcare as well.

BG Srinivas

With respect to Europe, this quarter we have not seen growth but again not surprisingly so because typically there is always a lag effect and the challenges in Europe continue in terms of demand outlook, unemployment. However, we are seeing traction in terms of client activity and this is across sectors, both in UK and the continent. So this dialog going forward could yield to a pipeline and albeit the growth will pick up, the pace at which the growth will pickup will definitely continue to be muted.

Analyst

Your number of active clients has gone up by 2 while you have added 35 new clients. So have some of the clients left?

Kris Gopalakrishnan

We have a very stringent criteria for considering somebody as a client. There is a LTM level revenue threshold which we need to achieve. So is it possible that some of them have gone off that threshold and that is why this happens. We also have transactional clients right especially in some of them in Finacle, some of them in consulting who comes through for couple of transactions before they stabilize into long-term clients. So during those transactions they might come into the client list and then get dropped off, that is why the net addition and the gross additions are different.

Analyst

Kris like you showed in the chart, client data.

S.D. Shibulal

No it is an LTM basis.

Balaji

Last 12 months, so the last 12 months, you lost out a client of $300 million?

Kris Gopalakrishnan

Yeah so our largest client gives us now 4.6% of revenues. The size of the top 10 has not changed significantly if you look at from a last 12 months perspective but definitely the largest client is now 4.6% revenues. The currency movement has an impact on this also.

Balaji

So in continuation of that, consolidated and standalone inaudible (24:02) client … means it the impact actually of this slowdown _____subsidiaries though there is a profit of 102 addition …

V. Balakrishnan

No today almost all the subsidiaries are profitable except Brazil which is still is in the growth phase. Otherwise BPO is profitable, Australia has some 7% net margin, Infosys Consulting has 6% net margin, China has 12%. So, almost all the subsidiaries are contributing to the group profits now

Biju

This is Biju from Business Standard newspaper. Question for Mr. Kris, you mentioned about your strengthening even in this kind of environment also you are strengthening the sales & marketing side but the expenses last quarter, we can see there is a drop of Rs. 537 crores compared Rs. 560 crores previous quarter, what is the reason? Does it mean that henceforth now you will go on increasing your spends on sales and marketing because you are seeing more traction, thanks?

Kris Gopalakrishnan

It is partly due to currency and partly of course we had to look at some of the marketing-related activities and make sure that given the churning environment in which we are, we need to rationalize some of those things. Going forward, if the growth is there definitely we will start spending more on sales and marketing. Our current assumption is that we will continue to invest in building capacity in sales and marketing. We will continue to recruit in sales and marketing, we are expanding our presence in new markets like Middle East, Latin and South America. We are expanding into businesses like government. We are investing in India. We are investing in China. So all these things will continue. We are, of course, tightly managing the business given the environment in which we are today.

Analyst

Thank you, sir. And other question is the other income, can you give an idea, it has just gone up quite significantly to Rs. 5 crore, what are these incomes? The other income has gone up, so from where did you get this number?

V. Balakrishnan

The other income is basically a function of treasury income we get because of investments we do and also the exchange variations. If you look at last quarter, in Q1, treasury income was Rs. 236 crores, this quarter is Rs. 218 crores, but exchange was positive to an extent of Rs. 31 crores in the first quarter, now it is only Rs. 14 crores. That is the big difference.

Analyst

How will increase in sales and marketing expense impact your margins?

Kris Gopalakrishnan

Given the growth and the efficiency, if you look at the second half of the year the impact comes primarily because of the salary and compensation increase we are giving now. We are able to absorb all other increases we are planning. So the impact is primarily due to the compensation increase.

Analyst

Question for Mr. Shibulal. Sir, you have not mentioned the kind of deals that you won during the quarter, if you could give us an indication of the deals that you have won?

SD Shibulal

Our strategies are seeing traction in the market. We have won transformational deals this quarter, I think the number is two or three. We have won large deals in the first half, nine of them. Some of them are consolidation opportunities where clients have decided to consolidate their partners, reduce it from a large number to a small number and we have benefited from those consolidations. So we had nine large deals won in H1 and transformational deals this quarter. We are working on five instances of M&A related work with financial institutions. So we are seeing traction due to the M&A which happened in the financial services space. If you look at service lines there is growth in infrastructure management which is remote infrastructure management, BPO – process management related work in BPO and in system integration. System integration work is related to what I mentioned on the M&A side.

Akansha

This is Akansha from Cybermedia. I have a question. I would like to know more about your investments in Brazil especially about the Development Center that you are establishing there. You said China has around 1,000 people. How big this would be? And also there is some indication about 2 million square feet under completion. Would like to have some idea about that?

Kris Gopalakrishnan

We have set up our subsidiaries outside of India. We have them in China, Mexico and Brazil. We have just initiated operations in Brazil. It will take obviously some time to grow that. But we have a fairly active roster of clients that are willing to participate in that center. Brazil is clearly to cater to the Brazilian market, local domestic as well as international clients that have a presence there. Mexico, we have opened our second development center in Monterrey. So our total capacity there has actually gone up. And in China, we continue to expand both from capability perspective, adding people, we have expanded the services footprint that we can offer from China, including BPO, Finacle, etc. And these are actually expanding fairly rapidly. So today we can act out of China, address our global clients as well as the local Chinese market. And in Mexico as well we are now initiating coverage of the local Mexican market and use that as a take-off point for addressing the rest of the Latin American ma rket.

Mohandas Pai

We have work in progress in infrastructure in Chennai, in Hyderabad, and in Mysore, and in Thiruvananthapuram where the new campus is coming up. This is in India, not abroad.

Balaji

Mr. Pai, can you explain why 4521 people left this quarter?

Mohandas Pai

Well, a similar number left last quarter

Balaji

Last quarter your addition is 1548.

TV Mohandas Pai

Yes.

Analyst

Last quarter actually it was minus. 945.

TV Mohandas Pai

Last time the gross addition was 3,538 something. Yeah. This time the gross has gone to 6,069. And the people who left is the same, almost the same, it was stabilized. There is a higher attrition in the BPO than in the parent company. In the parent company, attrition has come down to 10.9% LTM. And the voluntary attrition is down to 7.5% from 8.2% the previous quarter. And the involuntary attrition is mostly in the training space. So in the sense that that they have to pass the test of a training and then since larger numbers have come, the numbers are here, in this quarter. Otherwise I think it is normal, attrition has come down. We are hiring people as per the plan. We are increasing the total gross hire this year from 18,000 to 20,000 and the 2,000 extra people that we hire are going to be in the BPO and laterals for the parent company.

Hari

Hari from Bloomberg. Question for any of the executives who might want to talk about. I am just curious do you track the rankings of Infosys by sales and would you know where you stand in terms of, your the world’s x-largest company in terms of services? And also any comments you are going to make on where you want to be in ten years from now and what kind of opportunities you see in. How you are preparing for that? Thank you.

Kris Gopalakrishnan

See, if you look at our vision statement our aspiration is to be the most respected corporation. So yes, we can look at by size and things like that. But what matters is, are you meeting or exceeding the expectations of your clients? We have seen an improvement in our customer satisfaction. Are you able to attract the best and the brightest people to join you and work for you? We believe we have one of the best talents available in the industry. And then are you meeting the expectations of your investors? Investors or analysts will have to answer that question. We tried to give the best performance, overall performance in the industry. And lastly are we good corporate citizens? Are we running the business legally, ethically, etc? And we again believe that we are doing that. So those are the things we look at and those are the things we everyday make sure that we are doing.

Hari

Still would you have a number or how many companies are out there that are larger than you by sales?

Kris Gopalakrishnan

If you look at the technology analyst reports etc., Infosys figures in the leadership quadrant more and more in more and more services. So for example in infrastructure management or enterprise solutions etc., we are clearly seen as in the leadership quadrant today. And that is what we look for. And that is where we want to be positioned as – as a leader in the industry. Typically, there are a few companies who will appear as leaders in the industry and we are part of that leadership quadrant.

Hari

Second part of my question is about your comments on where do you see yourself 10 years from now.

Kris Gopalakrishnan

So somebody was just joking saying that we have to now have an astrologer with us. This is our 28th year of operations. In 1981 the company was founded. And we have grown substantially, done well. What I can say for sure is the company will be strong, company will have significant number of employees, it will be one of the leaders in the industry. What size, what revenue, we cannot even tell you what is next year’s revenue, right? So I cannot talk about 10 years from now.

Hari

My question was not really in terms of revenues or size, more in terms of the nature of work that you do.

Kris Gopalakrishnan

Business is changing. 10 years back, Infosys was primarily a technology solutions company providing application development and maintenance. Today we have full service capabilities all the way from consulting to infrastructure management, system integration and business process management. We have one of the most successful products out of India today in Finacle. So we have a breadth of services, a growing portfolio of IP, solutions etc. The nature of service delivery is changing. Rather than doing projects in time material, fixed price etc, we are more and more delivering services as a utility on a ‘pay-as-you-go’ model. That model will increase in size and we are preparing ourselves for that. So 10 years from now definitely Infosys will look very different in the way it delivers services. It will have significant capability in intellectual property, ownership solutions, etc. So a good mix of consultative services, our traditional operational services and a set of product solutions, etc., What exactly the mix will be maybe one-third, one-third, one-third. But actual numbers we have to wait.

Sumeet

Hi, Sumeet from Reuters news. Your cash and cash equivalents have risen to US$2.8 billion now. And some of you have earlier said that acquisition is like a marriage for Infosys. Is there any plan to date or flirt with someone in the near future or do you strictly believe in staying single and happy?

Kris Gopalakrishnan

Definitely we do look for opportunities to date, for marriage, etc. But let us wait. We will send you the invitation later.

Balaji

$ 2.8 billion you said. But you mentioned in 13,796, is it $49 that rate you put into year-on-year?

V. Balakrishnan

No, we have taken $47 for Rupee for next two quarters. $ 2.8 billion is based on the quarter end rate which is 48.11.

Balaji

And the correlation now with respect to employees retention and then also with in respect to currency fluctuations with the economy improving and then more capital inflows coming. Do you see more volatility and then the Rupee appreciating further?

V. Balakrishnan

Yeah, yeah. That is the biggest problem. Some $ 13 billion came (to India) because of FII money, some $ 10 billion has come because of QIP and ADR. So that is putting lot of pressure on the currency. That is why it has gone back to 46.30 now from something around 50 some two quarters back. But extreme volatility is not only in rupee, even in the cross currency. They are all moving at 10-15% each quarter. That is the biggest challenge for all the export industries.

Balaji

Has board deliberated upon this observation by the government, one minister about the CEO salaries being what it is?

Mohandas Pai

Well honestly, we do not have the issue because we pay our CEO very less. We had a discussion on the CEO salary in this company and we decided some four, five years back, that people who are not founders or substantial shareholders could get a higher compensation and people who are founders and who are shareholders also, they decided they want less. CEO, COO fall in that category and for the reason they said we must set good norms for ourselves and in the company. So we have a CEO and COO who get less than other members of the board and less than other senior members of this company. So we do not have this issue of CEO and COO being paid very high salaries. And 50% of what they get is tied into the performance of the company both the top line and the bottom line. And when things went down over the last three, four quarters, all of us voluntarily took a deep cut in our variable pay, much more than the rest of the company. So the board led by example, the board took the deepest cut followed by the membe rs of the Executive Council, followed by people who hold titles and then the rest of Infosys to demonstrate that in tough time, leaders have to lead and walk the talk and it is not possible that leaders get more compensation in tough times while others are feeling the pain. So I think we are okay. We confirm with all Government of India norms and every norm that you want. And none of us get paid vulgar salaries or outrageous salaries.

Deepak

Mr. Pai, Deepak from Business Standard again. Especially in a period like this, attrition has come down quite significantly across industry, in IT some more. You mentioned that the attrition in the BPO side is more than the parent company and can you just give an idea what the attrition in the BPO and what is the reason? Is it the reason that sometime back shifted some employees from Infosys Technologies to the BPO side of the business? Are they leaving being dissatisfied?

TV Mohandas Pai

Those people have not left. But I will ask Amitabh to answer the question.

Amitabh

Well, the attrition of the BPO industry has always been a multiple of the IT industry for a long period of time. So it is not that Infosys is any different. The BPO industry has had attrition of more than 50% for a long period of time. We have operated anywhere from 25% to 35%. Our attrition has moved up this quarter. It has gone up to about 35% for this quarter, last 12 months was about 33% partly due to the fact that I think we have delayed salary increases for a very, very valid reason. Now we have announced it and hopefully the attrition will fall in line with what we have seen in the past. Also the activity in the BPO industry is picking up a little bit especially from the captive side. So people have had some alternatives outside of Infosys BPO. But overall we are much, much lower than the industry. So we are okay.

Analyst

Question to Ashok sir. You meet your banking clients on a regular basis. Has any of the major banks in the U.S. or Europe offered their technology units for you to buy?

Ashok Vemuri

There are some transactions in the marketplace. Like any other purchase that we would make, we have to evaluate what is the benefit that will accrue to us. What is the leverage that we can have of the asset, both physical as well as intellectual that we would get from such an offer. And we have evaluated any offer that is out there on those parameters.

Analyst

Sorry. Right now you are not evaluating them?

Ashok Vemuri

We are always in a constant state of evaluation. We are in a business. We are always looking at opportunities and those that fit in with our broad strategy, are the ones that we will go ahead with.

Kris Gopalakrishnan

So the last question?

Balaji

IFRS financials, I noticed that in April and then July and now, October, consistently you maintain that in dollar terms, year-on-year and even quarterly it continues to decline, top line revenue. Does that also have to do with the currency? I have to claim that the business climate has improved

Kris Gopalakrishnan

It is not just currency. We had a decline. If you look at the projections for the next two quarters, we are showing an increase, this quarter also we have shown sequentially increase. So sequential increase is starting to come back to the business. On the outlook, we had projected a sequential growth of 1% for next two quarters and next year we will see. But definitely we are projecting growth at this point.

So thank you all very much and looking forward to interacting with you during the quarter. Thanks.

EX-99.4

Exhibit 99.4
Presentation

EX-99.5

exv99w05 - Fact Sheet

EX-99.6

Exhibit 99.6
AFTERNOON CALL

INFOSYS TECHNOLOGIES LIMITED
AFTERNOON EARNINGS CALL
Q2 FY 10 RESULTS
OCTOBER 09, 2009

CORPORATE PARTICIPANTS

Kris Gopalakrishnan
Infosys Technologies – CEO and MD

S. D. Shibulal
Infosys Technologies – COO

V. Balakrishnan
Infosys Technologies – CFO

BG Srinivas
Infosys Technologies – Head – Manufacturing and Member – Executive Council

Subhash Dhar
Infosys Technologies – Head – Communications, Media and Entertainment and Member – Executive Council

Ashok Vemuri
Infosys Technologies – Head – Banking and Capital Markets and Member – Executive Council

Abraham Mathews
Infosys BPO - CFO

MEDIA PARTICIPANTS

Mitali Ghosh
Merrill Lynch

George Price
Stifel Nicolaus

Anthony Miller
Tech Market View

Sandeep Shah
ICICI Securities

Pankaj Kapoor
RBS

Nirav Dalal
Almondz Global Securities

Ashwin Mehta
Motilal Oswal

Tanu Kejriwal
Quantum Asset Management

Diviya Nagarajan
UBS Securities

Rod Bourgeois
Sanford Bernstein

Nitin Padmanabhan
Centrum Broking

Moderator

Ladies and gentlemen, good morning, good afternoon, good evening and welcome to the Infosys’ Second Quarter Earnings Conference Call. As a reminder, all participants’ lines will be in the listen-only mode. At this moment, this conference is being recorded. There will be an opportunity for you to ask questions at the end of today’s opening remarks. Should you need assistance during this conference call, please signal an operator by pressing * and then 0 on your touchtone telephone. I would now like to hand the conference over to Mr. Shekar Narayanan of Infosys Technologies Limited. Thank you and over to you Mr. Narayanan.

Shekar Narayanan

Thanks. Rochelle. Good afternoon, ladies and gentlemen. I am Shekar from the Investor Relations team in Bangalore. We thank you all for joining us today to discuss the financial results for the second quarter ended September 30, 2009. Joining us today in this conference room is CEO and Managing Director – Mr. Kris Gopalakrishnan, COO – Mr. S.D. Shibulal, and CFO – Mr. V. Balakrishnan, along with other members of the senior management. We will start with a brief statement on the performance of the company during the quarter ended September 30, 2009, outlook for the quarter ending December 31, 2009 and year ending 31st March 2010. After that we will open up the discussion for questions and answers. Before I handover to Infosys management, I would like to remind you that anything we say which refers to our outlook for the future is a forward-looking statement and must be read in conjunction with the risk that the company faces. A full statement and explanation of these risks is available with our filings with the SEC which can be found on www.sec.gov. I would now pass it on to Mr. Kris.

Kris Gopalakrishnan
Thanks Shekar and good morning, good afternoon, good evening to everyone wherever you are. Thanks for participating. We had an all round good performance this quarter. Sequentially the revenue grew by 2.8% and in constant currency terms, it increased by 1.3%. Volumes increased sequentially by 2.3%, offshore volumes increased by 3%. Pricing is stable, in fact it went up slightly by 0.4% on blended terms. Utilization improved as against 70.9% last quarter, it was 73.2%. Operating margin is better. We added 6,069 gross employees this quarter and overall we have more than 105,000 employees. The net addition was 1,548. We have improved on our Earnings per Share as against the guidance of $0.51 we did $0.56 and we have revised our guidance for the second half. We have also given compensation increase for our employees in India with giving an increase on an average of 8%, outside India we are giving an increase of about 2%.

When you look at the current environment, there is cautious optimism. Our clients are feeling better. We have to wait till next year’s budgets are finalized towards the end of the year or early part of next calendar year, to see how the budgets pan out. But definitely there is increased activity from our clients. We have benefited from some of the consolidations, some of the deals, large deals we have won are consolidation deals. We have been able to retain our customers. Our top ten customers grew by 5.9% this quarter. So overall it is a good performance and internally we feel that our model has proven again to be robust, to be a de-risked model and externally because the situation is improving, that is reflected in our slight increase in our guidance for the next two quarters. Now I will hand it over to Mr. Shibual to give you more details by industry, by service line, by geography and things like that.

SD Shibulal

Hi, this is Shibulal. Before I start, I will give some color on the pricing situation. Pricing situation seems to have stabilized. Most of the renegotiations are behind us. This quarter we have seen an increase of 0.4% in revenue productivity on reported terms. But on constant currency terms, it has declined by 1.1%. This is a tailwind effect of all the pricing renegotiations which happened over the last few quarters. In the beginning of the year, we had predicted a pricing decrease of 5% for the year. We believe the pricing decrease of about 4.5%-5% will still come through. That is what will happen this year. The impact of the pricing renegotiations will flow through the financials in the next few quarters.

Talking of customer additions - we have added 35 new clients, three of them are Fortune 500. That takes a number of clients in the Fortune 500 list to 112. So we work with 112 of Fortune 500 clients. We have $330 million customers and 21 customers we work more than $50 million on LTM basis. Looking at service lines, we have the traction in infrastructure management, in system integration. Testing is stable. Application development and maintenance has marginally come down. So these are the service lines in which we are seeing traction.

On verticals - banking and capital markets has gained some ground this quarter. Manufacturing has marginally declined. Retail has gained some ground, energy and utilities. So we are seeing traction in banking and capital markets, retail and energy and utilities. We believe manufacturing will take some more time to recover from the downturn. North America has marginally gone up and Europe has marginally come down. This we believe the lag effect of the recovery. While U.S. has stabilized on the demand side or there is some positiveness in decision making happening in U.S., Europe is behind and that is showing in the numbers.

Shifting to employees - we have added 6,000 people gross this quarter, 1,500 net. For the year, we are talking about 20,000 people instead of 18,000 which we talked about last quarter. The additional 2,000 will be partly in BPO and part of it will be laterals in ITL.

Just before I conclude the growth is all around. The top ten grew by 5.8% and the remaining grew by 1.8%. So the growth is all around. So with that let me hand it off to Bala.

V. Balakrishnan

Good afternoon, everybody. It has been a very good quarter. We exceeded the guidance. If you remember, at the beginning of the quarter we said we will do somewhere between $1110 million and $1130 million in revenues. We ended up with $1154 million because we have seen the cross currencies moving in our favor, which gave us around $16 mn-$17 mn of more revenues. So the revenues grew by 2.8%, in constant currency it grew by 1.2%. But we have seen very good volume growth. Volume grew by 2.3% and offshore volume increased by 3% which is a very positive sign. Pricing on reported basis went up by 0.4% but still a decline of 1% when you take it on constant currency basis. Utilization is almost flat as compared to 1st quarter, including trainees even though it has gone up excluding trainees to 73.2% from 70.9%. Gross margins we are able to maintain. Last quarter it was 46.7%, this quarter it is 46.9% and at PBIDT level, the margins went up from 34.1% last quarter to something around 34.6% this qu arter.

In the beginning of the quarter we said the margins in this quarter could come down because of two reasons. One, we want to hire more people onsite and number two, we had to increase our investment in sales and marketing. In terms of onsite hiring, we have given offers for some 126 employees. 72 joined this quarter. Rest of them will join next quarter. The process will continue, we are not going to stop that. On a sales and marketing side, we are incrementally hiring more people as planned. We are not going to change. The incremental growth we have seen from the guidance itself gives us buffer to take on this additional spend. Going forward for the next two quarters the only impact will come because of wage increases. Effective October 1st, we have increased the wages in India by around 8%, outside India by around 2%. Both of that could have impact of something around 200 basis points on operating margin. In the first two quarters, we have seen the operating margins go up. In the next two quarters, it could come down by 200 basis points because of the wage increases. So effectively for the full year on year-on-year basis, the operating margins could move within a narrow band of 50 to 100 basis points because we have seen incremental benefit in the margins coming in the first two quarters and the next two quarters could decline because of wage increases.

EPS was Rs. 26.86. It is much higher than guidance. Our account receivable days are 56 days. We continue to maintain the record, last quarter also it was 56 days. We ended up the quarter with cash of $2.8 billion. Next two quarters, our guidance reflects the environment. We are very cautious about the environment. When we talk to the client we are seeing some stability in the environment but it does not mean clients are opening up their purse and spending more. They are very cautious about the environment. They are very tentative and they are not very clear how the environment is going to move next year. If you look at all the macro numbers whether it is unemployment or retail sales or even the GDP growth, it is still challenging even though there are some green-shoots here and there. So overall we are very cautious in the short-term.

Our guidance reflects that. In the next two quarters, the margins could come down because of the incremental wage hike we have given. All the subsidiaries have become positive except for Brazil and Mexico which are still in the investment phase. Otherwise all the subsidiaries are contributing positively to the bottom line. If you look at the customers, top ten customers grew by 5.9% this quarter on reported basis. On constant currency they grew by 3.5%. So we are seeing overall growth coming from all the customers across the board. In terms of manpower, we earlier guided to 18,000 addition for this fiscal. We have increased it to 20,000 because we are going to hire more laterals and experienced people. We are keeping the model ready for growth. Tomorrow when the growth comes in, we should not be caught by surprise. So we increased the wages, we are increasing the hiring target, we are hiring more laterals. We are continuing with our spend on sales and marketing. We will continue with onsi te hiring and we are keeping the model ready for incremental growth which could come in once the environment fully stabilizes. With this I conclude. Now we can open up the floor for Q&A.

Moderator

Thank you very much, sir. Ladies and gentlemen we will now begin the question and answer session. Our first question is from the line of Mitali Ghosh of Merrill Lynch. Please go ahead.

Mitali Ghosh

Hi. Good afternoon and congratulations to the team on good operations this quarter. Bala, my first question is that in the morning also you commented the environment does look somewhat better as compared to in the last three, four months. But if I look at your constant currency guidance you effectively get flat to marginally down for the full year. So what is really the reason for that?

V. Balakrishnan

What we are saying is there is some stability in the environment. The pricing environment is stable now. We have seen some incremental growth coming in this quarter, slightly higher than what we predicted. Because in the beginning of the quarter we said, the revenue growth could be stable as compared to Q1 but we have seen some incremental growth coming because of higher traction in revenues. But it is too early to say the world has changed. Because when we talk to the clients, they are still cautious about the environment, they are not very clear which direction the economy is going to move. And people are very tentative about next year’s budget. It could take some time. So it is too early to say the world has changed. But there is some optimism in the environment. It has to translate to spending. That could happen only when the environment stabilizes more and clients get more confidence.

Mitali Ghosh

Right. And secondly just on the margins this quarter where you delivered a small increase infact. Like you mentioned, you have done the onsite hiring and invested in selling and marketing as well. So where did the benefit in terms of cost really come this quarter versus your guidance?

V. Balakrishnan

See the margins increased by around 0.2% or so. It is mainly because of the cross-currency because dollar weakened against all the currencies. That gave around $16-$17 million of more revenue. Number two, the volume growth went up. It is more in favor of offshore than onsite. Offshore volumes went up by 3%. That itself gives you buffer on the margin side which helped us to reduce the impact of all the investments we have made. So going forward, if our growth continues because we have assumed some 1% growth for next two quarters at the upper end of the guidance, if that happens we will be able to absorb this investment. The only incremental cost will come because of wage increases what we have done now.

Mitali Ghosh

And just finally, just in terms of the assumption for utilization on this year in your annual assumption of 50-100 basis point decline, what you really assuming on utilization including trainees because this quarter though you hired your utilization actually held flat. So just wondering what the assumption is?

V. Balakrishnan

No, utilization could be somewhere around this because including trainees, it was 67% in Q1, 67.3% in Q2. We are hiring 10,500 more in the next two quarters. So they will be under training. So including training it may not change much. Excluding trainees, it could slightly go up because we increased the training period. So people will not be onboard quickly.

Mitali Ghosh

Right. Thanks a lot.

Moderator

Thank you, Ms. Ghosh. Our next question is from the line of Mr. George Price of Stifel Nicolaus. Please go ahead.

George Price

Hi, everyone. Thanks for taking couple of questions. Bala, it is nice to hear that the brown shoots have turned green. First question is just I wondered if I could get a little bit more color on the types of discretionary projects that are being assumed. I think I heard you mentioned that application and maintenance was down a little bit but systems integration was up. Can you kind of maybe give a little bit more color on what types of projects, what type of work in the systems integration area clients have resumed focus on? Is it middleware, what type of work is it?

Kris Gopalakrishnan

In financial services, we are seeing M&A related work. In fact, about five projects we did in M&A. In retail, there are interesting opportunities. There is a transition happening from print to digital media. Second, retailers are investing and changing their physical store to have lot more interactivity, better customer service etc., So even in this downturn, retailers are investing in technology, retailers are investing in transformation. Of course, energy, utilities, etc., regulatory changes. So each of these sectors we are seeing some interesting work. Some of it is systems integration related, some of it is consulting and some of them it is implementing a new solution. So there are interesting opportunities in each of the verticals.

George Price

Okay, second question. I may have missed it, if I did, apologies. But I do not think I heard you talk much about Infosys Consulting. So wanted to see if you could give us an update on that business where it stands in terms of financials headcount. What your thoughts are in terms of that part of the business going forward and benefiting, integrating, tying into the rest of the business?

SD Shibulal

So Infosys Consulting is profitable now. They have turned positive. They are profitable. See one should not look at Infosys Consulting as a standalone entity when it comes to business because where we do rarely do consulting as a service. What we really do is business transformation. And if you look at it in the industry way, what we are doing is business transformation which is consulting plus enterprise solutions plus system integration. So that is how you should look at it. The consulting and enterprise solutions revenue this quarter have marginally come down and that is expected because that part of the revenue is mostly discretionary spend. But the system integration piece has gone up. We are winning good number of business transformation deals. Last half also we have won quite a few. There are quite a few business transformational deals which are in progress currently. And I believe that we are really getting established in the market as a viable option for doing business transforma tion. These deals are done jointly between Infosys Consulting, our Enterprise Solutions and System Integration practice together. And occasionally it goes along with Finacle also.

George Price

Okay, last question if I could. Thoughts on M&A, where are you guys looking right now given the cash that you have or what stands at the top of the priority stack in terms of M&A?

Kris Gopalakrishnan

So there are three areas or three directions for our M&A. And the reason why we are looking at these things simultaneously or concurrently is that you do not know which one will happen. So first is geography. We are looking at smaller acquisitions to expand into markets like France, Germany, Japan, non-English speaking countries. Second we are looking at acquisitions which can enhance our services capability, our platform-based solutions, business process outsourcing. And the third is faster entry into industry vertical like healthcare, maybe even government. So these are the three directions we are looking at. It is possible that there maybe one company which satisfies all three conditions, then it actually rises in the priority. At any given point of time, we may look at maybe three, four companies which fit these criteria. Then discussions happen at various levels- first to understand whether there is interest, if there is interest, then we meet, discuss. So it is a long drawn-out process. And if you look at hundreds of companies maybe, in some we were close. We do not have a concrete goal, a goal saying that we must do one a quarter or one a year or something like that. We find the right company, at the right valuation which fits our strategy and it is of the right size. The size typically we look at up to maybe 10% of our revenue so that the risk is not that high. These are the parameters we use to evaluate something. And that is where we are.

George Price

Is it fair to say though that unless you find something particularly focused in the U.S. Is it fair to say that something in the U.S. is probably lower down on your priority list?

Kris Gopalakrishnan

No, because it can fit other the two criteria. And so we are very open about the geography. We have laid down the criteria and if it fits these criteria, then we will definitely look at even in U.S.

George Price

Okay, fair enough. Thank you for taking time.

Moderator

Thank you, Mr. Price. Our next question is from the line of Anthony Miller of TechMarketView. Please go ahead.

Anthony Miller

Yes, hello, gentlemen. Shibu, you mentioned that Europe was still very much lagging the U.S. Is it something that you are seeing across all the major countries in Europe or is it specific to the UK or one of the other majors?

SD Shibulal

This is Shibu. Let me ask BG to reply to it. BG looks after European market.

BG Srinivas

Currently, the revenues from UK and the rest of the Continent is in the ratio of 60:40. And we have not seen that significantly change. However the business environment and the demand continues to be high in few sectors which include retail, energy, utilities, pharma, insurance. The banking and capital markets we see fair degree of stabilization and today, there is again dialogue happening with our existing clients. In the next two quarters we are likely to see robust pipeline with the kind of dialogues we are having. However there are certain sectors yet to pick up. That includes manufacturing and telecom. So that is where it is.

Anthony Miller

Okay. Which of the countries do you think will be the first then in Europe to start to show growth again?

BG Srinivas

It will continue to be UK. But again it varies across sectors. In manufacturing, it will be Germany and France. Telecom, we are seeing opportunities both in the Nordics as well as in the Continent Europe. Energy, utilities will be again France and Germany. We are also seeing significant traction in pharma and manufacturing in Switzerland particularly though it is a smaller market and Switzerland contributes to more than 13% of our European revenues today.

Anthony Miller

And just finally, can you tell me what the constant currency change in European revenues was this quarter, please?

V. Balakrishnan

The impact because of constant currency is around 1%. So European revenues for the current quarter is around 23.2% of our revenue but if you look at it in constant currency it could be around 22.6% of our revenues. So the impact is around $10 million.

Anthony Miller

Right. Thanks very much.

Moderator

Thank you Mr. Miller. Our next question is from the line of Sandeep Shah of ICICI Securities. Please go ahead.

Sandeep Shah

Yes sir. If you look at the telecom as a vertical and if you keep aside the top clients, the other clients within the telecom seem decline by roughly around 3.7% despite some deal wins and some of the cross-currency benefits in our favor. What is the reason for that and when do you expect telecom as a pickup vertical. Would it be one of the last vertical or it may be before manufacturing you expect telecom to recover?

Subhash Dhar

Well actually the decline that you see is mostly due to currency. Volume-wise we have gained in most of our top telecom accounts. So that currency actually has changed that. You have to understand that telecom is one of the industries where we are doing majority of our business outside of the United States.

Sandeep Shah

And when do we expect some bit of recovery in this vertical. Can we expect that this maybe the last vertical and can you give your view in terms of OEM as well as in terms of service providers?

Subhash Dhar

I think this quarter if you have seen, we were stable compared to last quarter. So I think the stability is returning to the segment for us. In terms of projects opening up, we are seeing lot more positive conversations including new development and new innovation projects coming in. The budgets would definitely be one of the factors, the new year budgets, 2010 budgets would be one of the factor that that will determine what the spends will be going forward. But we are seeing a slight upswing in terms of spend mood with the clients already.

Sandeep Shah

And this last thing Infosys Consulting as a subsidiary. There is a significant growth q-on-q. So is this an isolated increase or one can expect some follow-up increase in the other service lines in the coming quarters?

SD Shibulal

So we are seeing traction in multiple service lines, in system management, system integration, BPO, Infosys Consulting, we are seeing traction. The traction you are seeing in Infosys Consulting is a result of the wins in business transformation area. We have good wins over the last few quarters in the business transformation space. We are doing multiple business transformational programs at this point in time. So when we have business transformational work, it gets done with Infosys Consulting, Enterprise Solutions and System Integration. And what you are seeing is a result of that in Infosys Consulting.

Sandeep Shah

Okay, thanks.

Moderator

Thank you, Mr. Shah. Our next question is from the line of Pankaj Kapoor of RBS. Please go ahead.

Pankaj Kapoor

Yeah hi sir. I just want to get a flavor on the early signs that you might be picking in on the next year IT budgets. Specifically, if you can talk about your expectation in terms of the budget discussions. Are we seeing them coming back to the normal cycle or you see like last year this again could flow into the first quarter of the calendar year? Second, are we still looking at quarterly budgeting from the clients or you are seeing clients shifting to annual budgeting? Third, in terms of decision-making cycle any changes that you are seeing? And fourth, if you can highlight what is your outlook in terms of a spending pattern going into the next year, are we going to see some pickup in the discretionary spend or you think that the client would be spending more in cost savings area, thanks?

Ashok Vemuri

Hi this is Ashok. So, there are lots of questions, you will have to help me by asking them again so I can keep track of them. From a budgeting perspective, we do expect the budget process to be a little more streamlined as against the experience that we had last time. I will not be able to comment on how long it will take for the budgets to be finalized. But clearly early indicators are that work on budgets has already started and that it looks a little more streamlined from a process perspective. What is your next question?

Pankaj Kapoor

Are we looking at quarterly budgeting like we saw last time or you are looking at shifting the clients back to annual budget. Are we seeing more of those events?

Ashok Vemuri

Too early to comment on because the budgets have not yet being closed on. My guess would be that we will continue to see a quarterly draw down of budgets.

Pankaj Kapoor

Okay and third, are we seeing on the decision-making cycle time any changes here. Are client taking decision much faster now on the stuff on the table?

Ashok Vemuri

So, on the decision-making cycle, the cycle time has not changed. Decisions are still going to the top of the house. The good news is decisions are being taken.

Pankaj Kapoor

Okay fair enough and then lastly in terms of spending. Again based on the early sign that you might be seeing, are you seeing spending again largely concentrated around projects which can give near-term cost savings or are you also seeing a pickup in long-term oriented discretionary spend areas? Thank you.

Ashok Vemuri

We are seeing across the board in Americas, spending happening on those that will yield short-term benefit as well as long-term benefit. Mostly on the regulatory compliance audit areas and financial services. We are seeing spends which are obviously both short-term and will give a dividend in the long run. We are seeing some amount of spend in retail which is gearing up for the holiday season but I guess, the spend will be a function of how the holiday sales actually turn out to be. Manufacturing - there is a much more elongated or a longer drawn out investments and expectation of return. Utility is actually benefiting because of the stimulus. So we are seeing traction there. I would say if that has not necessarily changed in its complexion of short-term return to long-term return.

Pankaj Kapoor

Okay and lastly BG if you can give any sense if you are seeing things any different in Europe? Thank you.

BG Srinivas

Europe will not be significantly different, in the sense that the fundamental challenges continue. If you look at the output, it is still down, unemployment challenges continue, sentiments around unemployment in Europe is even more driven by the political pressures. At the same time, the cost pressure within the clientele across sectors continue. So these have not changed significantly, though the business volume shrinkage has slowed down. That is definitely one positive sign. We also see the fact that clients are getting used to the fact that the cuts may likely to continue in terms of IT budget cuts. My view is it will continue into the next year because most predictions are somewhere middle of next year likely there will be an uptake in the output and the business demand. So, most likely the cost pressures will continue through next year.

Pankaj Kapoor

Thank you I am done.

Moderator

Thank you Mr. Kapoor. Our next question is from the line of Nirav Dalal of Almondz Global Securities, please go ahead.

Nirav Dalal

Yeah hi, can you give me some color on the manufacturing verticals. Are you seeing any new deal wins over there?

BG Srinivas

Within manufacturing, there are certain specific initiatives within the client where we are seeing opportunities. One is this is the time where clients are faced with reduced demand, increased inventory and then they are trying to consolidate their internal operations including shutting down plants. At the same time in the IT landscape, they are looking at consolidation and some companies who do not have shared services, they are moving their internal back office to a shared service. We see seeing increased dialog mostly in the operations as is compared to IT. Clients are also looking at consolidation of multiple ERP platforms and in that context we are seeing initiatives with involved standardization of processes and they are looking at retiring some of the individual instances of packages like SAP and Oracle and consolidation. So these are areas, specifically BPO and consolidation of IT landscape. These are two significant areas where we are seeing opportunities.

Nirav Dalal

Yeah so have deal wins happened in this vertical in this quarter?

BG Srinivas

We have definitely added new clients in the quarter. 7 new clients but again, these are not large volume deals. The traction is likely to pick up in Q3-Q4 as we start ramping up on some of these new wins but overall it will continue to be slow given the fact that this is a sector which will take longer time to recover given the current challenges. If you take the auto sector, because of the stimulus there is some demand uptake but still because of the increased inventories, we do not see this sustaining in the long-term.

Nirav Dalal

Okay fine and can you let me know as to where is the utilization headed for the next two quarters given that more trainees are going to join in. So do you expect an uptake in utilization?

Kris Gopalakrishnan

No, so in the next two quarters because we are still recruiting, we are still bringing in people into training, some will come off the training, etc, utilization would be around the same number for the next two quarters. That is what we have assumed at this point.

Nirav Dalal

Okay fine thank you.

Moderator

Thank you Mr. Dalal. Our next question is from the line of Ashwin Mehta of Motilal Oswal Securities Limited. Please go ahead.

Ashwin Mehta

Hello, hi sir. Just had few questions. In terms of wage inflation this year do you expect that next year as well the wage inflation cycle would be normal or there might be a lower wage inflation in the next year?

Kris Gopalakrishnan

It will depend on the situation next year. Wage inflation is determined by supply and demand. Currently, there is a good supply. So we do not know what will be the situation six months from now, next fiscal etc. It will not be driven by how the companies are doing, more driven by inflation and supply and demand situation.

Ashwin Mehta

But in the next year as well the wage inflation can come in? If it comes in, would come in the 1st Quarter or it can again be somewhat delayed?

Kris Gopalakrishnan

Too early, it is very difficult to say today.

Ashwin Mehta

Okay and secondly in terms of our EBITDA margin expectations for the next 2 quarters, what is the impact that we are building in because of the forex guidance state?

V. Balakrishnan

For the next two quarters we are saying the margins could come down by 200 basis points mainly because of the wage increases. Forex we have taken at 47, if you remember it was around 48.39 for the 2nd quarter average. So we are already assuming some 3-4% appreciation in the rupee because we guided up 47. But majority of the impact for next two quarters could come because of the wage increases.

Ashwin Mehta

Okay and finally in terms of the 2000 additional people that we are wanting to add, are there new areas of strength that we are starting to see and that is one of the reasons why we have decided to recruit these people?

V. Balakrishnan

No, it is going to be across the board. We want to send them the middle layer. We are going to have more experienced people and keep the model ready because tomorrow if the growth comes in, we should not be caught by surprise. We have enough freshers on the ground undergoing training, utilization is low but we need to build a middle layer also. That is what we are doing.

Ashwin Mehta

Okay and just finally in terms of our 4th Quarter implied growth which is 1.2%, 4th quarter would have higher billing days than our 3rd Quarter. So what has gone in into a muted guidance? Is it an expectation that the budgets might actually go into the 4th Quarter?

BG Srinivas

My friend, it is not the utilization which is the big issue. The demand should be there because the growth comes and utilization can go up since we have enough capacity. So leave days do not matter any more. If the demand comes in your utilization will go up, if the demand does not come in your utilization will be low. You have to manage that. So number of days or holidays don’t matter anymore.

Ashwin Mehta

Okay thanks a lot.

Moderator

Thank you Mr. Mehta. Our next question is from the line of Tanu Kejriwal of Quantum Asset Management. Please go ahead.

Janish Shah

Yeah this is Janish here. I have two questions. One is on the pricing where you mentioned that price decline could be in the range around 4.5% -5% and in the previous quarters you had also mentioned that if the environment continues to remain challenging there could further price cuts maybe demanded by the customers. How good or bad is the situation in that context right now? And second is if you can throw a little light on the hedging policies going forward because again the currency markets have started turning little volatile. So what kind of policies or the safe guards you have implemented for the coming quarters on a longer-term basis.

V. Balakrishnan

Pricing environment is stable. We are not seeing it declining like what we have seen in the last couple of quarters. For the guidance purpose, we assume the pricing to remain at the same level like what we saw in Q2 for the next two quarters. If you assume that and compute the average the pricing could decline by around 4.5% from last year. Having said that, we are seeing some stability in pricing. We are not seeing clients asking for some irrational pricing now. Whatever negotiation happened in the past, it will have some tailwind effects in the next few quarters. So you could see decline coming in the next few quarters. But we are not seeing any big change in the pricing environment now. Right now it is stable. On the hedging policy, we continue with the same policy because the volatility is too high. It is very difficult to take a long-term view. We had seen the rupee at 51, went to 39, again it came to 50, again at 46, now has again gone to 46.30 or so. In this kind of a volatile envi ronment it would be very difficult to take a long-term view and it would be foolish to do that also. So we continue to take the short-term view. We will cover our net exporters for two quarters. There is no change in hedging policy as of now.

Janish Shah

Okay, thank you.

Moderator

Thank you our next question is from the line of Diviya Nagarajan of UBS Securities. Please go ahead.

Diviya Nagarajan

Hi congrats on a good quarter, Shibu you spoke about your top 10 clients which have done very well this quarter. Could you just break it down in to what really drove the spending? Did you see any pent-up demand getting released or was it largely a combination of the base effect plus some start-up of projects?

Kris Gopalakrishnan

See the growth came from multiple things. One there was a consolidation of strategic partners and we benefited from that. So some volume increase came from that. There is some interesting work we are doing for some of the companies in terms of their M&A activities. So for the financial services companies, M&A is a driver for business activity and volume growth. There is wide range of companies from financial services, energy & utilities, telecom, healthcare, high-tech and services in the top 10 list and the driver is different in each of these cases.

Diviya Nagarajan

Right, I am also very intrigued by the 8% salary hike that you have announced for the current quarter. Can you tell me how we arrived with this number 8%?

Kris Gopalakrishnan

That’s something we internally decide based on what we believe to be the amount that we need to give, which is fair to the employee, what the company can afford and things like that. Different companies use different models. So we have our own model and that is how we have arrived at 8% average.

Diviya Nagarajan

Right and how much of this is a function of the fact that you also expect to see some pick up in lateral hiring because you yourself have increased a number of lateral hires and that might be a phenomena that you could observe in the rest of the supply. I think earlier in the call you also mentioned that the supply scenario might itself be changing. So what kind of a change are you seeing there?

Kris Gopalakrishnan

So, clearly the market is one of the factors which determined the increase. At the entry level, there is large supply. We believe that we can get the best people anytime now. At the entry level it is not a challenge. At the experience level especially certain key skills, there are challenges and that will determine the salaries for those roles and responsibilities etc. This is an overall number. We are giving for all employees except for those who have been identified for Performance Improvement Programs. Everybody else is getting on an average. Some people will get more some people will get less. This is an average across the company.

Diviya Nagarajan

Great and lastly Bala you said that you are comfortable with the level of S&M spend that you have today and therefore 100 bps increase that we spoke about last quarter could be absorbed with the increase in growth. Could you also then tell us in specific what are the investments that you are seeing because in numbers I do not really see that flowing through and even in dollar terms your S&M spend is more or less flat?

V. Balakrishnan

Most of the spent is in terms of adding more people. We said we will add some 100 sales and marketing people. That is on track. We hired some people in this quarter. We are going to hire rest of them in the next two quarters. Onsite hiring still continues because we are seeing some good growth on offshore side. The offshore volume went up by 3% and also the growth has come incrementally better than what we guided, we are able to absorb those costs. It is a pure manpower cost, it is not some exotic thing we are doing where we are getting somebody else from outside to come and endorse our brand. It is only pure people cost and that is already there in the P&L.

Diviya Nagarajan

Sure thanks and all the best.

Moderator

Thank you Ms. Nagarajan. Our next question is from the line of Rod Bourgeois of Sanford Bernstein. Please go ahead.

Rod Bourgeois

Yes it is nice to see the volume growth reinstate. Can you dimension to what extent this improved volume growth is coming from brand new deals versus previously postponed deals that are now being reinstated. Can you break it into those two categories for us?

Kris Gopalakrishnan

See, it is actually little bit challenging to break that out because of some of the consolidation. The demarcation is gray because it may start off with couple of small extensions but then suddenly you will find that there are large deals coming into those also. So we are not broken that down at this point. Another way of looking at it is that repeat business continuous to be 98%, very high and so that is another way to break this out.

Rod Bourgeois

Great, but would you say that a large portion of your improved sequential growth is due to your larger customers’ consolidating their spending and you are benefiting from that?

Kris Gopalakrishnan

Definitely, 5.8% is the growth rate of top 10 clients. The rest of the clients have given us another 1.8% growth. So the larger clients are growing faster but the difficulty I have is, for some of them we are doing new things, we are doing very interesting work. So that is the difficulty in breaking it up actually.

Rod Bourgeois

I got it, okay. The rupee has appreciated 3% versus your prior rupee guidance assumption. So, this could impact margins by about 130 basis points on an annualized basis. Is your guidance for 200 basis points of sequential margin decline accounting for this rupee impact on top of the salary increase impact that you have already explained?

V. Balakrishnan

The average rupee dollar rate was 48.39 for the 2nd quarter. We are assuming at 47 for the next two quarters. That means the appreciation of around 3-3.5%. It could impact the margin by something around 1.5% but having said that, the growth itself has gone up from what we guided earlier. Second quarter we almost guided for a flat revenue growth. We have done some 2.8% incremental growth. And also the cross currency movements, dollar is declining against all the global currencies. To some extent, that comes and offsets this impact. So incrementally for next two quarters, the impact is mainly due to wage increase as compared to the currency. Having said that the currency appreciates substantially from what we guided at 47 to a dollar, then it could have an incremental impact. Otherwise it will be manageable.

Rod Bourgeois

Right, so if the rupee were to further appreciate would that change your operational plan in anyway? Would you tweak the salary hike plan or some of your sales & marketing investments in anyway or would you let the rupee appreciation flow through into a lower margin and keep your operational plans in place?

V. Balakrishnan

That is a call we have to take when you go through the quarter. Right now the rupee is at the manageable level. It is around 46.30-46.40. If it appreciates substantially then we have to re-look, but having said that we will never cut any investment which will impact our growth in the future. We will make all the right investments and make sure when Shibu keeps talking about some 10 levers, we will use whatever lever are available on the cost side, to make sure the impact is minimize. But if there is very substantial appreciation, it will definitely impact the margins.

Rod Bourgeois

Okay great and one final quick question, if you can answer this, I am assuming there has been some shifting around in your top five clients. Can you give us an idea, your top client a year ago. I am assuming has probably changed in its ranking. What is the ranking of last year’s top client where is the drop in the ranking today?

Kris Gopalakrishnan

These keep changing quarter on quarter and we do not want to give that list of where the relative positions are etc. In fact, we do not want to discuss a particular company or organization and their position within the list.

Rod Bourgeois

Understood. Thanks guys.

Moderator

Thank you Mr. Bourgeois. Our next question is from the line of Nitin Padmanabhan of Centrum Broking. Please go ahead.

Nitin Padmanabhan

Yeah thank you for taking my question. This was regard to retail. As compared to last quarter, this quarter I think we have seen pretty decent growth. Where do you see this particular vertical? Has there been a significant surprising time in terms of the growth that we have seen? Have we won significant deals there? And second thing is, going into the next quarter and the quarter after that, is this sort of growth sustainable and are we confident on a positive trajectory for this vertical per se?

Kris Gopalakrishnan

See, retail is an industry where Infosys has invested significant thought leadership, significant R&D. We have build solutions like Shopping Trip 360. Our position in industry is pretty strong.We have some of the best retailers as our clients. If I remember right, 7 out of the top 10 retailers are our clients or 8 out of the top 10 retailers are our clients. We have strong presence both in the US and the European market. In retail they are going through transformations. One is that ad spending is moving from print to digital. Second the store physical formats are getting changed to provide better customer service. They are also putting new signage and things like that, interactive signage so that customers can find out the status of the product and things like that. We ourselves had announced solutions like Magic Mirror where customers can get better response from the system. So there are many, many things happening in retail. One more thing, there is a move to digitize the supply ch ain, the information flow in the supply chain. So there are many things that are happening in retail, all are technology-driven and this is a strong industry vertical for Infosys. So we feel that there is a strong vertical and it is strength for Infosys and in some sense it is reflected in the growth. Lastly slightly unrelated, in the downturn, people eat less in restaurants, eat more at home. That means grocery chains are not seeing any drop in revenue. In fact they are seeing increase in revenue and they are continuing to spend. So these are some of the reasons why retail is doing well.

Nitin Padmanabhan

Right, per se in terms of retail budgets are decided between January to March. Is that that case?

Kris Gopalakrishnan

Yeah in North America typically budgets are decided on a calendar term.

Nitin Padmanabhan

Right fair enough. In terms of BPO have you seen any sort of supply because I guess you had a conference at Baltimore last time and in what is it that in terms of pricing, is there any sort of competition really driving down pricing on that front? Is that a concern?

Abraham Mathews

As far as pricing is concerned, the pricing environment is fairly stable. There are of course people who are ready to do deals at stupid prices but that will of course not be something which Infosys will do. We will continue to do deals at the prices that we think are right. Apart from that when going from the conference that we had at Baltimore, we did see that there is likely to be an increase scope for outsourcing from the existing customers. That is the sense that we have got from that conference.

Nitin Padmanabhan

Right and lastly if you could just throw some light on the telecom OEM side, are we seeing an uptake there or it is that likely to take quite some time?

Subhash Dhar

Well, the OEM segment obviously has been impacted due to an overall tech impact which happened in the last 4 quarters. But we are not seeing any material change in the business that is coming our way in that segment at this point.

Nitin Padmanabhan

Right, thank you.

Kris Gopalakrishnan

Thank you everyone and unfortunately we have run out of time. Our Investor relationship managers are known to you. So you can connect with them and if you have further questions, may be we can setup separate time to discuss these with you. Thank you again for participating in the call and your support.

Moderator

Thank you gentlemen of the management. Ladies and gentlemen on behalf of the Infosys Technologies Limited that concludes this conference call. Thank you for joining us on the Chorus Call Conferencing service and you may now disconnect your lines. Thank you.

EX-99.7

Exhibit 99.7
EVENING CALL

INFOSYS TECHNOLOGIES LIMITED
EVENING EARNINGS CALL
Q2 FY 10 RESULTS
OCTOBER 09, 2009

CORPORATE PARTICIPANTS

Kris Gopalakrishnan
Infosys Technologies – CEO and MD

S. D. Shibulal
 Infosys Technologies – COO

V. Balakrishnan
 Infosys Technologies – CFO

BG Srinivas
Infosys Technologies – Head – Manufacturing and Member – Executive Council

Subhash Dhar
Infosys Technologies – Head – Communications, Media and Entertainment and Member –
Executive Council

Ashok Vemuri
 Infosys Technologies – Head – Banking and Capital Markets and Member – Executive Council

Abraham Mathews
Infosys BPO - CFO

MEDIA PARTICIPANTS

Avishai Kantor
Cowen and Company

Mark Zgutowicz
Piper Jaffray

Joe Foresi
Janney Montgomerry

Bhavan Suri
William Blair

Ed Caso
Wells Fargo

Glenn Greene
Oppenheimer

Karl Keirstead
Kaufman Brothers

David Grossman
Thomas Weisel Partners

Trip Chowdhary
Global Equities Research

Rod Bourgeois
Sanford Bernstein

George Price
Stifel Nicolaus

Moderator

Ladies and gentlemen good morning, good afternoon, good evening and welcome to the Infosys Second Quarter Earnings conference call. As a reminder all participants’ lines will be in the listen-only mode and this conference is being recorded. There will be an opportunity for you to ask questions at the end of today’s opening remarks. Should you need assistance during this conference call, please signal an operator by pressing * and then 0 on your touchtone telephone. I would now like to hand the conference over to Mr. Sandeep Mahindroo of Infosys Technologies Limited. Thank you and over to you, Mr. Mahindroo.

Sandeep Mahindroo

Thanks Rochelle. Good morning, everyone and welcome to this call to discuss Infosys Financial Results for the quarter ended September 30, 2009. I am Sandeep from the Investor Relations team in New York. Joining us today on this call is CEO & M.D. Mr. Kris Gopalakrishnan, COO Mr. SD Shibulal and CFO Mr. V. Balakrishnan along with other members of the senior management team. We will start the proceedings with a brief statement on the performance of the company for the recently concluded quarter, followed by the outlook for the quarter ending December 31, 2009 and year ending March 31, 2010. Subsequently we will open up the call for Q&A. Before I pass it on to the management team, I would like to remind you that anything that we say which refers to our outlook for the future is a forward-looking statement and must be read in conjunction with the risks that the company faces. A full statement and explanation of these risks is available in our filings with the SEC, which can be found o n www.sec.gov. I will now pass it on to Mr. Gopalakrishnan.

Kris Gopalakrishnan

Thanks, Sandeep and good morning, good afternoon, good evening to everyone. We had another quarter of good performance, all round good performance in all aspects of business, supporting our customers, on the employees’ side as well as how we manage the business. We have seen good performance this quarter. We added 35 clients, the top 10 clients grew 5.9%. Our customer satisfaction has increased even in these tough times. We do a customer satisfaction survey and satisfaction has increased. We have exceeded our guidance at the upper end. Revenue increased sequentially, volumes increased sequentially, pricing is stable, utilizations improved. We have been able to transition some work offshore. So offshore has increased. Our operating margins slightly improved. And we are continuing to add employees. Compared to last quarter there is a net increase in employees this quarter. On the EPS side, we have exceeded again our guidance. Against a guidance of $0.51 we had $0.56. Overall when we d iscuss with clients, they feel that the worst is behind us. This is the second quarter where we are getting that signal from our clients. And of course, we will have to wait for the next budget cycle to see how this is going to be sustained over the next fiscal year. But definitely we feel more confident about the current situation. We have increased our guidance for the rest of the year. We have given a compensation increase for our employees. And all in all as I said, good all round performance. Let me now pass it on to my colleague, Shibulal, to give you more data on the segmentation and things like that.

SD Shibulal

This is Shibulal. As Kris said, the demand environment has stabilized. We are seeing customers willing to talk to us, discuss spending in projects. At the same time, we are also seeing the customers being very cautious and that is understandable given the environment. We are not expecting a budget flush at the end of this year. Even though they have money left, we believe that customers will keep it. We, at this point, expect the budgets to be flat or slightly higher next year.

We have had good client wins this quarter. We have added 35 new clients, three of them in Fortune 500. That makes the total number of clients in the Fortune 500 to 112. 330 customers give us more than a million dollars of revenues in LTM basis. Our top client is today 4.6% of our revenue. Top 10 clients give us 26.2%. The growth has been all around. The top 10 clients grew by 5.8% and the remaining clients, non-top 10 grew by 1.8%. So the growth has been all around.

From a vertical perspective, we have seen better traction in BFSI, retail and energy and utilities. Manufacturing is lagging behind and we believe that makes sense. In BFSI segment, we are working with five clients on the mergers and acquisition related technology work. We are working on system integration opportunities related to the mergers and acquisitions in these cases. From a service perspective, we are seeing better traction in business process management, infrastructure management and in system integration. System integration, as I said is a result of the M&A related work which we are doing in the financial services. Consulting and package implementation has come down marginally this quarter.

From a geographic perspective, U.S. has gone up and Europe has marginally come down. Europe is definitely lagging behind in stability. This is as usual. Because even on the downturn, I think Europe was lagging behind. We have added 6,000 people this quarter and net 1,500. We have increased our recruitment for the year. Now the recruitment for the year is 20,000 and this is in comparison with 18,000 number which we gave you last quarter. The 2,000 additional people will be in BPO and in lateral recruitment in ITL.

Our DSO is extremely healthy. It is 56 days. Last quarter was also 56 days. The DSO below 30 days is 77.9%. With that let me now hand off to Bala to give you the financial details.

V. Balakrishnan

Good evening, everybody. Good morning to some of you on the call. This quarter has been extremely good. We are seeing revenues increasing by 2.8%, in constant currency it grew by 1.2% because most of the major currencies have appreciated against the U.S. dollar. For example, Australian dollar appreciated by 10%, UK pound appreciated by 6% and so also the Euro. So we are seeing the constant currency growth at 1.2% for the quarter. The volume growth had been 2.3% and offshore volume growth of 3%. That is very good news. Pricing was stable. It increased by 0.4% but in terms of constant currency, it declined by 1.1%. The gross profit slightly went up during the quarter and so also the operating margin. Operating margin went up to 30.3%. We guided for $0.51 EPS and we did $0.56. The DSO days are 56 days. The collection has been extremely good. The quality of receivables is extremely good. We are ending the quarter with $2.8 billion of cash.

As far as guidance is concerned, we revised our guidance to reflect the current environment. For the next two quarters, the upper end of the guidance assumes 1% revenue growth. We have increased hiring guidance from 18,000 to 20,000. We are going to hire 2,000 more, mostly in the lateral with the experienced people because we have enough freshers in the system and we need to build a middle layer and keep the model ready for growth when the growth comes in. Top 10 customers grew by around 6% during the current quarter. This is extremely good. In constant currency terms, they grew by 3.5%. Almost all the subsidiaries have become profitable. They are contributing positively to the bottom-line of the group except Brazil which is still in the growth phase, investment phase.

Our guidance for the next two quarters assumes 1% sequential growth in revenues at the upper end of the guidance. For the next two quarters, the margins could get impacted because we have given a wage hike. Starting October 1st, we increased the wages in India by 8% and outside India by 2% which will impact the margin by 2 percentage points. So first two quarters we have seen incremental positive margins. In the next two quarters, it could get impacted by around 200 basis points. So overall for the year, we could be within the 50 to 100 basis points band as compared to last year.

In the beginning of the quarter, we also spoke about some of the investments we are making in terms of hiring more onsite people and also increase in the sales and marketing. We will continue to do that. We have already given some 126 offers for people to join onsite. Of them some 72 people joined during the quarter, rest of them will be joining in the next quarter and we will continue this process in the future quarters also. The incremental growth in revenues and some of the cost initiatives we took has yielded results and that will buffer these investments. So going forward we will be able to absorb these investments and the only incremental impact on the margins could be due to the wage increases which we are giving effective October 1st. So overall for the year the margins could be within a narrow band as compared to last year. It is a very good quarter and the next two quarters our guidance reflects the environment and what feedback we got from the clients. With this I will conclude . We will open up the forum for questions.

Moderator

Thank you very much, sir. We will now begin the question and answer session. Our first question is from the line of Mr. Moshe Katri of Cowen & Company. Please go ahead.

Avishai Kantor

Yes, hi. Avishai Kantor for Moshe Katri. Just a two or three questions to begin. One, can you comment on the major drivers for the strong performance in both BFSI and retail?

Kris Gopalakrishnan

I will start with retail and I will ask my colleague Ashok to talk about some other positives on the BFSI space where we are getting growth. So in retail, one we work with some of the largest retailers in the industry, we have very strong relationship. We work with I think 7 out of the top 10 retailers. Second, retailers are going through couple of very interesting transformations. One is the move from print media to digital media, digital marketing transformation they are going through. Second is digitization of the information flow in the supply chain so they can get near real-time information about sales that is happening in a store all the way down to supply chain. The third is improvements that are happening in the store to provide better customer service, better technology-based environment in the store for self-service and things like that. So there is investment happening in the retail space even now. The third thing is we work with some of the largest grocery companies and in the downturn they are seeing a positive impact on their business. It looks like consumers are eating less in restaurants, buying readymade meals or take-home meals or something like that. And that is also positively impacting retailers. And hence they are investing in technology, they are investing in IT systems. We also benefit from some of the consolidations that are happening which is actually a common theme across many of the industry segments in which we are working. Now let me pass it on to my colleague, Ashok Vemuri who heads the banking and capital markets to talk about the BFSI space and where he sees traction.

Ashok Vemuri

Thanks Kris. So clearly in Q2, we have had about 3.5% growth in the BFSI sector and additions of six new clients in the sector equally distributed between the U.S. and Europe. The good news is that decision-making is now happening. There is increased traction which is getting converted. it is going beyond conversation to actual deal. The bad news is the decision-making is still happening at the top of the house. And it is a fairly longer decision cycle time. So we are seeing interest clearly in the asset management space, we are seeing in securities and investment firms, we are seeing lot of interest in regulatory compliance, risk, internal audit. We have made some good strides in progress on work on M&A related deals. Retail banking is reflecting the high unemployment, so that is little slow. Cards is slow, but with some regulatory changes, etc, we do expect significant portion of the cards business to come our way. Europe is lagging behind. I think there is a phase lag there but aga in, Continental Europe which has not been our stronghold, is showing signs of increased willingness to partner with offshore players. We are seeing traction in Australia. We are seeing traction in Asia as well as ex-Japan and some amount of Japanese clients getting active in regions outside of Japan. So on the whole I would say that we are beginning to see some traction. I would still think we are in the woods, so to speak and we will have to wait to see how the budgets etc. pan out before we actually are able to conclude whether we are in a better position than we were previously.

Avishai Kantor

Thank you. My next question - you had a very nice sequential uptake in client wins from 27 up to 35. Can you please break down the client wins by verticals, basically BFSI, retail and telecom and also what was the sequential growth in your largest client this quarter? Thank you.

SD Shibulal

This is Shibulal. The client wins have been across verticals. As I said, three of them are in Fortune 500. There is no specific vertical where there is a major win. I do not have the sheet in front of me but we had 6 wins in BFSI. The remaining is spread evenly.

Avishai Kantor

Thank you very much.

Moderator

Thank you, Mr. Kantor. Our next question is from the line of Mr. Mark Marostica of Piper Jaffray, please go ahead.

Mark Zgutowicz

Good evening. It is Mark Zgutowicz for Mark Marostica. Just a question on your revenue guidance, a little bit of disconnect here. Your revenue guidance implies relatively flat growth in the second half. Obviously you have seen good volume trends sequentially over the past couple quarters. I am just curious is there something on the horizon that you are seeing that gives you caution there and then along those lines can you speak to your expectations for growth in Europe in the second half?

V. Balakrishnan

Typically the December and March quarters are soft quarters because December is more a holiday season and March because of first quarter when the clients finalize the budget. Our guidance reflects the environment because clients are still very cautious. Even though they are seeing some optimism, they are still cautious about the future and quite possibly, we will have much better visibility when they finalize a budget for next year. That could be somewhere in January timeframe. So we had given a sequential growth of 1% at the upper end of the guidance for next two quarters to reflect what the client is telling us about their business environment. And on Europe, I will ask Shibu to talk.

SD Shibulal

Europe at this point is lagging behind U.S. on stability which is expected because even on the downturn Europe lagged behind U.S. That is what we are seeing. And across the board, UK as well as the Continental Europe is lagging behind. At the same time we are quite positive about Europe in the long run. We are investing in different countries in Continental Europe. We are investing in Germany, in France and we believe that these markets will be of great importance to us in the future.

Mark Zgutowicz

Okay and then just couple of related questions. On headcount, the 2000 incremental that you have added to your guidance there, what percentage of that is lateral and if you could comment on what your fresher and lateral mix is right now?

Mohandas Pai

Well, it is mostly lateral. All of it is laterals for Infosys Technologies and it will be freshers and laterals for the BPO because it is a combination of the corporate level for everybody. So there will be two levels, one for Infosys Technologies, the parent company and for the BPO. The BPO has seen a reduction in the headcount for this quarter compared to the previous quarter. Infy does not require any freshers but requires laterals. Laterals are people of experience of more than two and a half, three years.

Mark Zgutowicz

Your current mix there and sort of maybe trends next year on the lateral hiring side?

Mohandas Pai

We do not have a view on lateral hiring for the next year. We only have a view for this year because we do not have the numbers for next year. And for the lateral hiring for the parent company, the hiring will be in specific areas where we have seen growth like infrastructure management services or where the very specific skills required as in the enterprise solution group and not across the board for all units.

Mark Zgutowicz

What is your current fresher-lateral mix today?

Mohandas Pai

Well, out of 20,000 people that we are going to hire gross today 15,000 will be freshers and 5,000 will be laterals. Our normal percentage could be 60:40. 60 freshers and 40% lateral. But this year, the hiring is less. And the fresher hiring is because of the offers we made last year, not out of necessity but the need to keep our commitment. So the ratio will be slightly different this year.

Mark Zgutowicz

Okay, that is helpful. And then just one quick final question, on the selling and marketing front, can you just talk about investments that you are making here and whether the levels you are running at now as a percent of sales are sustainable through the remainder of this year?

V. Balakrishnan

We had given a guidance. We said we will hire some 100 people this year. We already hired some people this quarter. Next two quarters, we will be hiring balance of them. It will not substantially change as a percentage to revenue because most of the cost is employee cost.

Mark Zgutowicz

Great. Thanks very much.

Moderator

Thank you, Mr. Zgutowicz. Our next question is from the line of Joseph Foresi of Janney Montgomery Scott. Please go ahead.

Joseph Foresi

Hello. My first question here is on discretionary spending. It looks like volumes were up but obviously development look like it is down. Have you seen any pickup in discretionary spending quarter-over-quarter?

Kris Gopalakrishnan

The volumes were up by 2.3% this quarter, onsite volumes 0.5%, offshore volumes 3%. So definitely volumes are up this quarter. We are seeing some discretionary spend happening in retail and BFSI, discretionary project being sanctioned etc. Sometimes maybe due to regulatory changes or related to compliance risk, new risk models in the BFSI space as Ashok talked about, I talked about retail. So there are discretionary spends happening. Maybe “not discretionary” but definitely new projects.

Joseph Foresi

And then it looks like questioning some positive indicators - hiring is increasing, you are putting through wage increases again, pricing is stable. At this point, do you guys get the sense from your clients that you maybe bottomed in the prior quarter now and that things are probably going to improve going forward?

Kris Gopalakrishnan

Yes, we will get a better or more confidence in that when we see the next year’s IT budget. See, this year the IT budgets are estimated to be down by about 6%-8% from last year. Current indications are that IT budgets are going to be flat from the current level to next year which I think is an improvement because that shows that companies are able to maintain the current level of expense going forward. But they are going to put that money to better use, they are going to look for more efficiencies, they are going to look for more flexibility which means outsourcing and variable cost. And we are seeing discretionary spend going up. So the environment definitely is better today than last quarter and seems to be improving.

Joseph Foresi

Okay and then just one last quick question on budgets since you mentioned it. When do you expect to get visibility on those budgets and do you think again visibility will be better next year compared to this year, just so we can get a general timeframe of when things will start to come to picture

Kris Gopalakrishnan

Current indications are that there shall not be too much delay in budget finalization. We expect budgets to be finalized in the first quarter, maybe mid-Jan to mid-Feb.

Joseph Foresi

There is a lack of a flush meaning  that there maybe some pent up demand next year?

Kris Gopalakrishnan

Yes. We expect the flush not to happen this year and the money is to be carried forward to next year’s budget.

Joseph Foresi

Okay. Thank you.

Moderator

Thank you, Mr. Foresi. Our next question is from the line of Bhavan Suri of William Blair & Company. Please go ahead.

Bhavan Suri

Thanks. Hey, guys. Just a couple of questions on the pipeline. Could you just give us a little color on how the pipes looking and what is the quality and size of deals that have been added year-to-date this year?

Kris Gopalakrishnan

See, there is two-part answer to this. One is when you look at large deals, these are deals which require investment of six to eight months of effort and things like that. So here to some extent the pipeline is based on the investments we want to make in such deals. So we do a lot of due diligence. We qualify the deal strictly. And typically we pursue about 12 to 15 deals and we have 12 to 15 deals in the pipeline which we are actually working on. And the good news there is we are seeing confidence returning and clients wanting to close deals. We do not yet know how fast it is going to be, but definitely there is confidence returning on that. The second is our traditional model of working with clients, working with existing relationships and as projects close, typically they start some of the projects so that the capacity can be retained and the knowledge can be retained within the project and things like that. Again, our repeat business has been 98% this quarter which is as strong as it has been in recent past, very strong repeat business. We have not lost any major customers. And one more data point is that our top ten customers grew 5.8% this quarter, much higher than the company. So all these point to better traction at this point.

Bhavan Suri

Couple of quarters ago you had mentioned that deals may enter the pipeline per se, $150 million but by the time discussions are complete, the deal value was much less. Is that pattern still continuing?

Kris Gopalakrishnan

Yes. It is still continuing. That is because the clients are much more sensitive to size, they qualify these things very well, they cut any unnecessary requirement and things like that. So yes. And also sometimes it gets split across multiple suppliers. So there are many reasons why when we finally win, it is much smaller.

Bhavan Suri

Okay. And then just one last quick question on the hiring of sales people and domain experts. It appears that has been tougher than expected. You did not spend in the first quarter, marginal better because you did not hire all the sales experts and the domain resources. Is it tougher to get those? And that seems a little odd given the environment. So a little color on that possibly?

Kris Gopalakrishnan

See, we have been always very selective. First of all, it is difficult to find good people even in this environment. And we have always been very selective. Second, good people are still continuing to work where they are. They are not switching. And so it is sometimes difficult. Third, once we make an offer it takes some time for the person to join. It is not that next day they will come and join. As Bala said, 123 offers, 70 people joined, rest are going to join next quarter. So we are making effort. We are finding the right people, trying to find the right people and bringing them in. We will continue this hiring. It is counterintuitive in some sense but good people are difficult to find even in this environment.

Bhavan Suri

Okay. Great, Kris.

Moderator

Thank you Mr. Suri. Our next question is from the line of Edward Caso of Wells Fargo. Please go ahead.

Edward Caso

Good evening, just wondering if you could give us a sense of the pace of vendor consolidation in your sort of relative wins and losses in that area?

Kris Gopalakrishnan

Ed, out of the 9 large deals in the first half, 3 are consolidation deals. We are able to win most of the consolidations. I cannot see any large one we lost. Some were announced publicly also. Okay one, and Shibu tells me we lost one vendor consolidation but we won 3.

Edward Caso

Could you talk a little bit about your move here to raise wages, I was under this impression you really did not need to do that and maybe talk about why you are doing it at this time and do you expect your competitors particularly the Tier II they have to follow?

Kris Gopalakrishnan

Till now, nobody has done as broadly as Infosys has done. They have talked about some increase to some people. We are giving an average 8% increase in India and 2% outside India. And the reason for this is that we have done reasonably well under the circumstances. We have sustained our margins under these circumstances. It was challenging but we have sustained our margins. And unlike developed markets, in India there is growth. GDP growth is around 7% and it is expected to go to 8% to 9%. We have seen signs of increased attrition in BPO already because as situation improves people start looking for opportunities to switch and things like that. To some extent we felt that it is the right thing to do to reward our employees because we have done well this quarter. Second, we want to make sure that we are able to retain the good people. So we will use this amount wisely and reward the right people.

Edward Caso

Bala could you talk a little bit about your foreign exchange assumptions, particularly against the Rupee-Dollar, did you take the quarter-end number in your guidance. It has moved a fair amount in October, have you taken last night’s close. Can you give us sort of a sense, sort of what numbers you are using and what the impact is to margins in your guidance?

V. Balakrishnan

Normally we take the Rupee-Dollar rate at the end of the quarter to project for the future quarters but whenever there is a drastic change in the currency environment, we do take the current rates. The rupee ended at 48.11 or so to a dollar by end of September but we took 47 for the next two quarters. That means appreciation of something around 3% which will have something around 120 basis points impact on the margins but it is absorbed because we have seen some growth. And incrementally we are guiding for a higher number for the full year. We believe that in the short-term, rupee could appreciate because there is a lot of money coming into the country that is putting pressure on the currency. So next two quarters anyway we assume that 47. If Rupee appreciates substantially from that level, probably it could impact the margin more than what we guided.

Edward Caso

Last question, efforts to sort of combat protectionism in the US particularly as now business is starting to pickup that actually will become a concern. Is your approach in line with that of the approach taken by NASSCOM?

Kris Gopalakrishnan

Yeah we are completely in sync with NASSCOM. We are participating in all initiatives by NASSCOM. This is definitely an area of concern. We do believe and I talked about that as an answer to the previous question that it is challenging to find the people with the right skills even in this environment. So we will work with NASSCOM.

Edward Caso

Thank you.

Moderator

Thank you Mr. Caso. Our next question is from the line of Glenn Greene of Oppenheimer. Please go ahead.

Glenn Greene

Thank you. Just a quick question on pricing, if you just give a little bit more color. You talked about stability but is there any contrast across verticals and geographies any disparities or is it stable across the board?

SD Shibulal

So it is not across the board. We have seen stability in financial services and their focus is on getting system integration done especially wherever there have been structural changes and M&A activities. We are seeing traction in retail because of our thought leadership predominantly. We work with 8 of the top retailers in US and about 9 or 10 of the top retailers across the world and we have invested heavily into retail over the years, so we are seeing traction there. Energy & utility is another space where the downturn impact has been different and we are seeing traction there. In manufacturing, we are not seeing stability which is expected because the retail sales have not picked up. And whatever pickup has happened is still taking care of the inventory overhang. That means that the manufacturing will not pickup and that is what we are seeing in the manufacturing segment. Europe is lagging behind US in being stable. Of course I believe they are lagging behind even in the begin ning in the downturn, so they are lagging behind on stability also.

Glenn Greene

So are you talking about stability in demand or pricing or there is sort of falling and tracking together, the pricing and demand?

SD Shibulal

No, my comments are more related to demand. From a pricing perspective I think we are stable all around. Mostly the pricing renegotiations are behind us. We are not seeing a second round of renegotiations. There are some sporadic ones but that is part of normal business. We will see an impact of the pricing renegotiations which we did last two quarters or four quarters for the next 2 or 3 quarters. This quarter we have seen a downturn in revenue productivity of 1.1% in constant currency. So there is still tailwind defect which will show up. We have predicted a downturn of 5% in revenue productivity from the beginning of the year. For the year we still expect somewhere between 4.5-5%.

Glenn Greene

Okay. And then just back to wage inflation for a second, was this sort of an off cycle wage increase? Is this your normal cycle for doing wage increases or something that prompted you to do it now. And secondarily do you think that this is sort of a range call it mid-to-high single digit wage inflation going forward in out years or is it too early to tell?

Kris Gopalakrishnan

See every year we give a compensation increase in April. That is our cycle. This year we deferred it because of the challenges in the environment and also slowdown etc., but we told our employees that if situation improves we would look at a mid-year increase. We have seen improvement in the situation and we felt that given the environment in India, etc, this is appropriate. Regarding next year we have to wait and see at this point. If let us say overall situation in the industry increase and there is a mismatch between supply and demand, growth picks up and supply is limited, then definitely compensation would go up in the industry.

Glenn Greene

Okay great, thank you very much.

Moderator

Thank you Mr. Greene. Our next question is from the line of Karl Keirstead of Kaufman Brothers. Please go ahead.

Karl Keirstead

Hi, thanks for taking the call. I have got a question about Infosys growth rate relative to overall IT budgets. Kris, you mentioned that IT budgets were down about 6-8% in fiscal 2010 and it looks like Infosys revenues would be about flat. So in other words you outgrew enterprise IT budget by about 6-8%. And I am wondering do you think that relationship is likely to hold or to increase next year and the year after, thanks?

Kris Gopalakrishnan

Offshore growth has always been higher than IT services growth globally. So when you compare offshore industry, you typically look at growth of Indian IT industry. We have been around the same number or slightly better, we have been leading the industry. Now this year NASSCOM has projected a growth of about I think 4-5% for the industry for the year including BPO. So we have to wait and see where we end up at the end of the year.

Karl Keirstead

But do you think it is fair for us to assume that Infosys next year can outgrow overall IT budgets by a similar magnitude, call it 5-10%. Is that a reasonable assumption for now?

Kris Gopalakrishnan

I cannot project out next year. All I can say is that Infosys has been on par or better than industry and I will leave it at that.

Karl Keirstead

Okay thank you.

Moderator

Thank you Mr. Keirstead. Our next question is from the line of David Grossman of Thomas Weisel. Please go ahead.

David Grossman

Hi, I guess the first question I have is on the margins. Despite multiple headwinds you are reporting exceptionally high levels of profitability over the last three quarters even after normalizing for currency. So I guess, the first question that I have is really what underlines the strength and I know you have guided down in the second half of the year to reflect hiring and the decision to put in the annual wage increase but can you perhaps give us some insight into how we should think of the margins in a more normalized environment relative to your historical levels of profitability?

V. Balakrishnan

We have been saying all along that we have multiple levers on the cost side whether it is utilization or revenue productivity or the scale benefits we get on SG&A or the mix of business. We use some of the levers at some point of time to make sure the margins are not impacted. And we also focused much more on the cost side during the year because the environment was bad. We have to make sure that we put the monies in the right areas for us to incrementally grow faster. So if the revenue growth comes in, that itself will be a big buffer for the margins. So we use all these levers at some point of time to make sure the margins are not impacted. Having said that, the currency is one issue which is external to us. We do not how it is going to behave. That could have incremental impact on the margins and also the tax rate. Otherwise I think on a operating level side, we have managed it well and we believe that we have enough levers on the cost side to make sure the impact is minimized.

David Grossman

Right. You have done a great job of managing the margins during this period but I guess I am thinking when you go into a more normalized growth mode, should we expect the margins to come down perhaps to the levels that we saw back in the old kind of 2007/2008 timeframe when you were growing at more normalized rates, again currency aside?

Kris Gopalakrishnan

See David, we have two aspirations 1) Highest margin in our industry and 2) we want to limit it and our limit is because we said it should be highest we said, we should be around a net income of about 26-27%. So in a normal environment we do start investing in multiple new initiatives. Then what happens is investment dollars increase, investment in sales and marketing increases, brand building increases etc. Currently the environment is such that we need to pull back some of those investments. We are being very selective as Bala said. Now we pick and choose, the choice is very, very important to make the right investments in this environment. So we are still investing in few but much less than what we would do in a normal environment.

David Grossman

I see, thank you. And just one other thing, I heard what you were saying about the hiring and the wages and then some of the rationale for that but it is hard not to read it as a fairly kind of a bullish sign despite your cautious outlook. So I guess my question is are you kind of taking some of these actions in response to I guess the strengths, your confidence and the visibility in your pipeline or you are just looking at kind of risk reward in terms of what the actual cost versus the benefit of building a bench in India right now at this point of the cycle?

Kris Gopalakrishnan

So it reflects the confidence in the strength of the model. It reflects our relationship with our customers and our ability to sustain those relationships. Third, even in this environment there are requirements for specific roles and skills etc. So we have to continue to recruit. And lastly yes, if we find an opportunity to build up a certain segment or sector in anticipation of some growth coming in, we would make those investments. So for example we are starting government sector now, public sector. We are investing in India at this point because we believe that is important for the future. So we will continue to make investments in certain sectors for creating future engines of growth. One more point I would like to add. We also honored all the offers we made in campuses and that is the bulk of the recruitment this year. We enhanced the training from 4 months to 6 months. You have seen utilization starting to pickup, so when things improve, we will improve utilization, utilize this peo ple and then start recruitment again.

David Grossman

I see, thank you very much.

Moderator

Thank you Mr. Grossman. Our next question is from the line of Mr. Trip Chowdhry of Global Equities Research. Please go ahead.

Trip Chowdhry

Thank you and good execution, I have two quick questions, first is regarding consolidation, excluding M&A induced consolidation what are you seeing like which systems are getting consolidated and what applications are getting consolidated and where are they moving from like what were they doing before and what are they doing now? And then I have a follow-up question.

Kris Gopalakrishnan

See, it is a very detailed lower level question which technology to which technology. Broadly you can say that when M&A happens you have two systems now, you have to decide and consolidate to one system and this is applicable to financial systems, it is applicable to HR, it is applicable to other platforms they have. So it is typically standard practice in M&A and things like that. It is not about people moving from one technology to another technology. That is also happening but when we talked about consolidation it is about M&A related integration activities.

Trip Chowdhry

Perfect. Other question I had is regarding say capabilities. Have you seen any shift or changes in the business environment? The world before recession, during recession and say post-recession that you think Infosys will need to adjust the capabilities because there maybe some underlying shift maybe in technologies, procurement, anything you are seeing because definitely the world is not the same before recession and during recession and history tells that post-recession maybe very different also. So what are you seeing in that space. Thanks, that’s all

Kris Gopalakrishnan

Yes, it is not always the same thing, right it never goes back to same situation afterwards because that is rather a philosophical statement but let me be very specific. See in this downturn we saw an increased acceptance for “Pay As You Go” model where the customer wants true variability, they want to actually work with you on an operational expense model rather than a CAPEX model and we have seen traction. We have provided those kind of services to our clients. We have for example two clients in HR outsourcing which is priced per employee rather than based on effort and things like that. So that maybe a trend which is going to be sustained beyond this downturn and may see a pickup “Pay As You Go”. This is also based on the trend of Cloud Computing and things like that.

Trip Chowdhry

Very good, thank you.

Moderator

Thank you Mr. Chowdhry. Our next question is from the line of Mr. Rod Bourgeois of Bernstein. Please go ahead.

Rod Bourgeois

Yes guys, I am just trying to understand, in your guidance for the next couple of quarters, are you assuming the current demand environment continues at its same pace. In other words, your commentary today says clients are more optimistic and discretionary spending has improved. Are you assuming those precise trends remain in place or does your guidance leave room or some buffer in case those trends start to falter again?

Kris Gopalakrishnan

See the environment continues to be challenging. This quarter we saw a sequential growth of 2.8% but we have assumed only 1% growth in next two quarter at the upper end. So clearly we are not really going overboard. At this point, we are being cautious and it is based on a model we have. It is based on visibility we have. It is based on our reading of the situations. Typically in the 1st quarter of the calendar year, budgets get finalized. It is better to get visibility into that and then say yes things have really improved. So we want to be cautious at this point. I would not call it buffer, etc. I would just say we want to be cautious.

Rod Bourgeois

Alright. And then just a real quick question on the tax rate side, when you started the year you had a certain plan in place to increase hiring onshore and I presume that affected your tax rate mix and your overall tax rate outlook. Given how your onshore cost ramp-up has played out, is there any material changes to your tax rate outlook for this year and also in the next year based on how the onshore cost are playing out at this point?

Kris Gopalakrishnan

No, the changes in the effective tax rate is based on India rather than outside India because outside India, the mix actually matters and the revenue mix has not changed that much offshore versus onsite. In India we have some tax incentives schemes etc. Some of our units have come out of that and effective tax rate has gone up because of that. That is all. So it is about India.

Rod Bourgeois

So what tax rate range should we look at for the next few quarters and then also for fiscal 2011?

V. Balakrishnan

Right now, the effective tax rate is somewhere around 20-21%, that will remain for the full year. It could change next year depending on how much work we do in SEZ and STPs. Hopefully it could be somewhere around 25%. So this year it could be somewhere between 20% and 21%.

Rod Bourgeois

Thank you guys.

Moderator

Thank you Mr. Bourgeois. Our next question is from the line of Mr. George Price of Stifel Nicolaus. Please go ahead.

George Price

Hi, thanks very much, couple of questions and first I wanted to make sure I understood the 8% wage increase. Does this include any impact from promotions or is this 8% a fully like for like number?

Kris Gopalakrishnan

Everything is included. This is the average including everything. For offshore 8%, onsite 2%.

George Price

Okay, right. So do you have any sense if you took away the upward bias to your wage base from promotions or are you just looking at what raises for people staying at the same level, what would the increase rate be roughly?

Kris Gopalakrishnan

See the number of promotions would not be very large compared to the base. Today, we have effectively about 85,000 employees who would be eligible for some kind of raise in the parent company. And then promotions because we looked at some of the roles and things like that, so we have done some analysis and effectively the impact of the promotions maybe for about a small percentage of people at this point.

George Price

Okay, so it does not sound like much of an impact in that 8%.

Kris Gopalakrishnan

No. So that is why the impact of promotion is very small.

George Price

Okay. And you said that somebody previously asked a question around the wage increase and you said something around the lines of, given the environment in India you thought this was appropriate. So should we think about given the macro growth that is in India relative to the more developed economies where most of your revenue comes from now, should we basically think about wages having a much quicker and more sizeable uptake early in the cycle, more quickly I guess getting back to the kinds of increases that we saw in the last up cycle?

Kris Gopalakrishnan

No, I do not think so, I do not believe so. We have to wait actually. See right now there is actually sufficient supply, we felt it is the right thing to do for our own employees because they have worked very hard in delivering this result. So we have to just look at what the industry does, what our competitors do etc., and what the situation is next year before we can say. At this point, I do not know.

George Price

Okay. You mentioned the uptake in energy & utilities, what kind of work is going on there. You have talked a little bit obviously about what is happening in the BFSI but can you talk about kind of some of the key areas we are seeing strength in terms of types of spending, types of projects in energy & utilities?

Kris Gopalakrishnan

SAP implementation on large chunk. We are doing some interesting work on sustainability in the area of “Smart Grids” and things like that. I am not an expert but something to do with gas meters and things like that. so some very interesting work in energy & utilities. Of course there is some traditional maintenance and sustenance kind of work. We have a broad range of services today, infrastructure management is growing as an interesting service for utility companies, SAP related work and then some innovations related work in sustainability, climate changes, etc.

George Price

Okay. Last question and there was a question before around margins and normalized margin ranges when you get back to more normalized growth range and I want to kind of piggy back on that. I just noticed that since fiscal 2004 sales and marketing if I pull that out as a percentage of revenue, if we kind of look at it on a trailing four quarter basis to do that. On a trailing four quarter basis, sales & marketing since fiscal 2004 is declined from about the mid 7% range to now under 5% for the first time and since fiscal 2Q 08, the absolute dollar spend in sales and marketing has actually been flat to down. I mean what do you think about that trend? How should we think about trend that trend and the implications going forward?

Kris Gopalakrishnan

See sales & marketing is not proportionate to revenues. It is based on the number of customers etc. We see that repeat business is growing. Our customer size is growing that is the number of larger relationships is growing etc. So it does not grow proportionate to revenue, it grows proportionate to probably the relationships. So one of the things we did in this downturn is that we tried to rationalize our customers and about 100 customers give 87% of our revenues. So we did not discontinue any relationship but we kind of brought in more efficiency in our sales and things like that and that did help us with some cost control.

George Price

Okay, great. Thank you very much.

Kris Gopalakrishnan

Thank you everyone. Unfortunately we are completely out of time. Wonderful questions and as always your support has been tremendous, participation has been very good. Our investor relationship mangers are all known to you. So if you have further questions or you want to talk to anyone of us, please put in your request and we will connect back with you. So thank you again and have a wonderful day.

Moderator

Thank you gentlemen of the management. Ladies and gentlemen on behalf of the Infosys Technologies Limited that concludes this conference call. Thank you for joining us on the Chorus Call Conferencing Service and you may now disconnect your lines. Thank you.

EX-99.8

Exhibit 99.8
CNBC India Question and Answer session

INFOSYS TECHNOLOGIES LIMITED
CNBC India Question and Answer session
Q2 FY 10 RESULTS
OCTOBER 09, 2009

CORPORATE PARTICIPANTS

Kris Gopalakrishnan
Infosys Technologies – CEO and MD

S. D. Shibulal
 Infosys Technologies – COO

V. Balakrishnan
 Infosys Technologies – CFO

Ashok Vemuri
Infosys Technologies – Head – Banking and Capital Markets and Member – Executive Council

HR Binod
Infosys Technologies – Head – India Business Unit

Subhash Dhar
Infosys Technologies – Head – Communications, Media and Entertainment and Member-
Executive Council

Mohandas Pai
Infosys Technologies – Director and Head – HR, E&R, Fac and Adm

BG Srinivas
Infosys Technologies – Head – Manufacturing and Member – Executive Council

Udayan                      

Let’s go and ask the management then that what has happened in this quarter to justify this optimism and the change in guidance.  As always, S. Gopalakrishnan, S.D. Shibulal and V. Balakrishnan, joining in to talk about the numbers.  Gentleman, Good morning and thanks for joining in.

Good numbers Kris, what happened? Your guidance was very conservative for the current quarter and you have come out and delivered numbers which are so much ahead of that guidance.  Did something change materially in the middle of the quarter which surprised you?

Kris Gopalakrishnan

We were cautiously optimistic. On one side, yes, the customers are starting to spend money, they are starting to look at new initiatives, they are starting to kick off projects.   Internally, I think we have done a fantastic job in managing our utilization, managing the cause, keeping the morale up and doing a very good job.  So it is a combination of business looking better and everything working internally very well.  So we saw 2.8% growth in the top line, margins have been maintained and utilization increased. We have added employees.  So it is an all round, good performance.

Udayan

Bala, the market was always expecting good numbers and few weeks back we spoke to you and we said no the market ……

Mitali

He slapped it on our wrist….

Udayan

I mean, we asked you, Bala what is going on? When everybody is saying you are doing well, things are looking good on the ground. Your guidance was very pessimistic, you have guided for a 10-11% drop in earnings for the current quarter and you have come in and actually done a sequential increase but you said that was all irrational exuberance.  The   numbers are much better.

V. Balakrishnan        

The numbers are better. Our revenues grew by 2.8%.  If you look in constant currency, it is 1.2% because the cross-currency helps.  Dollar declined against almost all the major currencies.

Udayan

But this is not the only reason which explains these numbers.

V. Balakrishnan        

Let me explain this.  I think the growth has come in. If you look at numbers, it is very positive because we added 35 new clients. The top 10 clients grew by around 6% sequentially which is very good and if you look at the offshore volume it went up by 3%. So that helped us to maintain the margin because offshore when it increases, it is very positive for the margin.  In the beginning of the quarter we said we are going to make certain investments that will impact the margins but the growth itself gave us a lot of buffer and the cost efficiency worked. So we were able to absorb those costs and still maintain the margins.  When I spoke about irrational exuberance, it was more on the expectation of 5% to 6% sequential growth which some of the brokerage firms were talking about.  But I think the currency helped over all and the revenue growth came in better.

Mitali

Shibu, you want to add to that? What exactly happened in your interaction with clients?  Did deals increase in size, did money start coming in easier or you are seeing incrementally fresh deals?

S. D. Shibulal

We are seeing stability in demand. Clients are starting to take decisions especially in the area of mergers and acquisitions and places like that. For e.g. they have done mergers and acquisitions but they have not integrated the systems.  So we are seeing that.  That is what we are seeing in the financial space.  We are working in about five instances where the mergers and acquisitions is a reason for the investment and we are seeing better traction in energy and utilities and in retail.  From the service perspective, we are seeing traction in infrastructure management, business process management. As Bala said, we have added 35 new clients. 3 of them are Fortune 500 which takes our number to 112 at this point.  So we are seeing stability in the market from a demand perspective but at the same time our clients are cautious.  As per the last survey, the recovery is still protracted.  So we need to remain cautious even in this situation.

Mitali

Kris, when you say you were cautiously optimistic in the last quarter what is Rs. 100 (EPS) to a share.  Is it moderately bullish or does it remain cautiously optimistic?

Kris Gopalakrishnan

We should remain cautious at this point.  We have to, because overall globally if you look at, yes there are signs of recovery but there is still concern about how much time it is going to take?  There are some people who still say that it could be a “W.”  In fact we had a couple of banks, our clients actually tell us that they expect probably a dip sometime in October-November.  So it is possible, right?  So in that sense, we have to be cautious.  What has done well for us is, we are able to hold on to our clients and pick-up momentum with our existing clients and internally everything has worked well for us.  Actually I think that is what this result shows.

Udayan

More than any cross-currency gains Kris, what the market is most focused on is whether they can extrapolate this 2.3% kind of volume growth that you have seen.  Do you think that can be sustained or you don’t have visibility on that because that is absolutely central.

Kris Gopalakrishnan

See we have visibility. Now we would like to actually wait for the budgets, right? The budgets will get finalized towards the end of the calendar year.  So we would like to wait for the next budget cycle to get a better feel for how it is going to pan out.  Current projection is that, there will not be a significant increase in the budget for the next year. They are going to be flat. But having said that, the allocation to fewer partners is one thing which has happened.  There has been a consolidation of strategic partners. Infosys has benefited from that and we have been able to sustain our relationships and benefit from that.  So we want to wait till we get a better visibility into the budget, how they are allocated before we say that yes, we are out of the woods.  Till then, we need to be cautious. This year we believe that even though there are budgets, the budgets will not be exhausted. The budgets, to start with, were down by about 6% to 8%.  But they a re not going to flush it out.  If there is some savings, they are going to hold onto it and may be transfer that to the next year’s budget.

Udayan

Shibu, while we are seeing some volume growth which is very encouraging, we haven’t seen any significant pricing improvement in the current quarter?  Does it happen with the lag, when volume starts picking up, eventually you get more pricing flexibility and if yes, by when do you see some even modest improvements happening in pricing?

S. D. Shibulal

Pricing is stable.  Most of the pricing re-negotiations seem to be behind us.  We have done majority of them.  We have seen sporadic ones but that is normal to our business.  The revenue productivity has gone up in reported currency but there has declined in constant currency 1.1% decline in constant currency but up 0.4% in reported currency which means that the pricing re-negotiation which we did last year, the tailwind of that will come through this year because they will have to flow through. In the beginning of the year, we have predicted a 5% downturn in the revenue activity.  We are still talking about 4.5% to 5% because if you take the current pricing, you will see it is 4.5% to 5% (decline in FY 10 over FY 09).  So it is a stable environment at this point in time.

Mitali

Bala, margins are actually better than expectations.  Have you had any salary hike this quarter? Are you factoring any in next quarter? Basically, what is the level you are working with in terms of margins you can hold in Q3?

V. Balakrishnan        

See, we had announced a salary hike across the board and also promotions which is effective from October 1st. In offshore, we are increasing salaries by around 8% and outside India we are increasing it by 2%. So this too will have an impact of something around 200 basis points on the margins for the next two quarters. So overall for the year, we will be able to maintain the operating margin within a narrow band of 50 to 100 basis points, as compared to last year because the first two quarters have been extremely good. We have increased the margin by 100 to 150 basis points. For the full year, it still looks better as compared to last year (H1 FY 10 over H1 FY 09).

Mitali

Kris, I think how the market is viewing this now, it that this quarter is almost a cusp for a company like Infosys. From here on, the growth will be on an upward curve. In the next financial year, actually growth will be above your trend line. In that sense can you say the worst is behind and growth is probably on an upward trajectory now rather than declining?

Kris Gopalakrishnan

So we are in a guiding for sequential growth for next two quarters. We are saying that next two quarters are going to be slightly better than this quarter.  Next fiscal year, we have to wait and we will have better data with the budgets.  Right now, next fiscal year, looks like we will start with the flat budget. But even a flat budget will be better than what it was this year because this year was a sequential decline in budgets. So there was a re-set and things seems to be normalizing at this point

Udayan

Bala, just on the point of margin, you had 34.1% last quarter, 34.6% this quarter, are you saying that the average of the second half would be closer to 33%?

V. Balakrishnan

It could down by 200 basis points. That is the impact of wage hike because 16-17% of the revenues is offshore salaries, that is going up by 8%, 35% is onsite salaries, that is going up by 2%. So impact on the margin is around 200 basis points.

Udayan

So it could come to 32% to 32.5% or there are mitigating things which can cushion it.

V. Balakrishnan        

I do not know, at this point of time that is an impact which will come in incrementally for next two quarters. For the full year the budget could be within the band of 50-100 basis points as compared to last year because the first two quarters have been good.

Udayan

The other point which is a bit of surprise is that you have taken 47 (rupee-dollar rate) to give the guidance for the next quarter. Typically you don’t do that, you take the quarter ending rate. Why have you taken 47 this time?

V. Balakrishnan

See normally we take the quarter end rate whenever we guide for future quarters but whenever there is a drastic change between the quarters close and the day we announce the results, we do take a realistic rate. I think the rupee has come to 46.36 or so. We have taken 47. Rupee is a big challenge because we have seen in the last one year, it going up to 39.50 and coming all the way to 51 and going to 45-46 after the elections, again went to 50, again coming to 46. This kind of volatility is not good for the export sector in this country because it will kill the export sector. People cannot manage this kind of volatility. People were hedged for the next few years when the rupee went to 39. Some of them went broke when the rupee came to 50. Again we are going back to the same regime. I think the exchange volatility is something which the government should manage better, otherwise the export industry will get hurt.

Mitali

What kind of hedges have you taken this quarter Bala?  Because you have traditionally been hedging much lower than your peers.

V. Balakrishnan

Our hedging cover is around $ 699 million. Last quarter was something around $ 598 million. We had increased the hedges but we continue with the short term view. We are going to cover our net exposure for next two quarters at any point of time. We are not going to go beyond that because we believe in the short-term, rupee could be a function of the inflows because a lot of money is coming into our country. Some $ 13 billion has come because of the FII money, some $ 10 billion has come because of QIP’s and ADR’s. That is having a larger impact on the rupee but in the long-term, it is going to be more of a function of what is happening across the globe because the dollar has declined against almost all the currencies. That will have an impact on India also. So long-term we have to watch out, short-term I think we will manage within whatever we are doing today.

Mitali

Shibu on this subject of your top 5 clients what is the experience in the telecom this quarter?

S. D. Shibulal

The top client has come to 4.6%. It is a very important thing to note because the top client was 10.3% in the beginning of last year, it has come to 4.6% and you have to look at the growth and all the other numbers in that background. Our top ten has grown this quarter by 5.9% (reported) and the remaining clients have grown by 1.8% (reported) which means that the growth is all around. In telecom, the growth in many clients has actually been good. In fact this quarter the telecom numbers have remained stable compared with the last year.

Mitali

Your key telecom client, how is that been?

S. D. Shibulal

We don’t comment on a specific client but our largest client has come down to 4.6%.

Udayan

Kris, you are saying that you are cautiously optimistic but the market tries to read between what you are doing. I mean you have raised salaries and not insignificantly. You are now saying that you will hire more people than you thought you would. Is all of that indicating that at a core business level you have a little bit more confidence about the next few months?

Kris Gopalakrishnan

Definitely, we are confident about the future. But when you give guidance, you have to factor in the external environment and things like that. But we are definitely confident and that’s the reason why we are increased hiring from 18,000 to 20,000. We are hiring lot of laterals. We are hiring sales folks, we continue to hire sales folks. We are giving the salary increase. So definitely there is confidence in the business.

Mitali

Bala, what lever will you tend to lean on more than in order to protect margins because traditionally over the past few quarters, SG&A cost has been kept under a very tight range. That has opened up a little bit this quarter. What will you have to lean on now in order to keep the margins intact or even around the 33% mark?

V. Balakrishnan

I think we have a great model now. We are able to manage the costs now much more efficiently. Whatever we have to invest, we are making those investments. In sales and marketing, we continue to invest. Whatever we committed in the beginning of the year we are going to go through that. The growth itself is still a good margin cushion. If we are able to get the growth, that itself will offset some of the incremental costs which is coming in. What we are doing today? Today we are seeing some stability in the environment. Even though our customers are cautious, we are seeing some stability. So we have to prepare the model for  growth. That’s why we are hiring 2,000 people more. We are going to hire more experienced people and keep the model ready, utilization is low, so when the growth comes in we are much better prepared to take the growth than anybody else. So we will make all the investment which is required for the business. We are not going to cut it down but we have a great m odel which enables us to absorb some of these impacts.

Udayan

Shibu, this volume growth that you have seen, where does it come from? Is it principally the BFSI and the retail vertical which has contributed to most of this growth?

S. D. Shibulal

It is BFSI, retail and energy and utilities. Also in the service line, it is system integration, related to M&A activities, infrastructure management, business process management. These are the areas where the growth has come in.

Mitali

Just to scratch this point about budgets as well. The market seems to expect that going into 2010, there is actually going to be a 2-4% increase in budget. December might see a big gush of money, you are not working with that theory right now?

S. D. Shibulal

We are not working with either of those. If you look at any of the reports this year, Gartner, Forrester etc, the budget has come down by 6-8%. So as Kris said, it has reached a new plateau, new level. We expect the budget to be flat or marginally high. So the marginally high could be 1-2%. The budget flush issue - we are still seeing our clients being very cautious. As I said, in our survey with our clients, they are expecting our client recovery to be protracted which means they will continue to be cautious in spending money. Now on the positive side, if you have budget improvement, even marginal, that will lead to spend and the people available in the local markets to take care of that spend will be lower which means that will be good for the industry.

Udayan

On one hand you are saying that you are feeling a bit more confident but you are saying that your clients are cautious. So what exactly is leading to their volume growth? Is it that some temporary ramp-ups are happening but big budget freezing is not happening? Can you explain what exactly is happening on the ground?

Kris Gopalakrishnan

One is when the consolidation happened of suppliers, definitely we have benefitted from that. We have stuck on some volume increases from those consolidations. Second is 35 new clients have been added, last quarter also we added about 27 new clients. We are seeing increased volume from new business that is coming our way. Third is, there is actually volume increase by shifting work offshore, that actually goes to the bottom line also. So all these have helped us.

S. D. Shibulal

Just to add to that, the decision making is I think one of the reasons we are seeing some of the growth. This is the quarter in which we did our customer satisfaction survey and our satisfaction survey which we do every year, has seen a positive trend. It has actually increased considerably which means that the decisions which we took in being closer to the customer, in investing in sales and marketing, in delivering excellence throughout this period has really paid off because our clients are really seeing that trust being built through the tough times. So that is leading to some good opportunities for us.

Mitali

Which will not impact you as much as some of the midcap IT companies Shibu but has that process of vendor consolidation as well ended now?

S. D. Shibulal

I believe that will continue because I think during the growth of this industry, clients have gone ahead with multiple vendors and taken niche players and various other players. Right now the industry is maturing and they are starting to choose very strategic partners and those cannot be more than let’s say 3 or 4 which means that some of the consolidation will continue and we are benefitting from that consolidation. In fact if you look at our large deal wins in last half, we had nine of them and some of them are the consolidation wins where we have benefitted.

Udayan

Will it be fair to say finally Kris that this quarter, you felt the most confident that you have in the last 5 quarters?

Kris Gopalakrishnan

Yes, this quarter we are confident that our model is very strong. It is able to withstand tremendous pressures and outside there are signs of recovery. So definitely from both aspects, inside and outside, there is better confidence at this point of time.

Udayan

Ok. The Infosys management says you should be cautious but we are confident and of course it is being shown in every matrix of internal operations that has been reported over the last few days. Salaries have gone up, so a lot of people will be happy in Bangalore.

Udayan          

You have been hearing the Infosys top management and now more members of the top team and the stock is up 25 rupees at its peak. To talk about the communication verticals, Subhash Dhar, Binod H.R who heads the India business unit which will be very important this time around and Ashok Vemuri who heads their very critical banking and capital market verticals, also joining now. Thanks very much gentlemen for joining in. Ashok, BFSI has had a very good quarter can you take us through what happened and what lead to the volume growth that you saw in this quarter?

Ashok Vemuri

Well couple of things Udayan. One of course is that there is a little more stability in our clients in terms of what they can do now. There is sturdy stability in the top of the house in terms of the churn etc. There is a desire to spend in terms of some of the transactions that need to be concluded which were in discussion stage. They have now moved to a point of actually being transacted. So we are seeing some of that happen. Still cautious, see an exit but definitely still in the woods.

Udayan

But any major wins which makes you confident about big ramp ups going forward in the current quarter?

Ashok Vemuri

We have had some wins and we have had new account openings as well. Of the 35 accounts that we have opened 6 of them are in the BFSI sector but I think the important thing is that a lot of the transactions that were being talked about have actually come to fruition. So there is a pickup from that perspective. Shibu talked about the M&A transactions which have actually come our way, these were in the works for the period of time and they have now finally come to a point where you can actually see the returns from those transactions. So this is both in the US as well as in Europe we are seeing a lot of that happening.

Mitali

Kris was talking about the fact that sentiment amongst your clients still remains quite cautious, what exactly has happened in this quarter then? Has the backlog gotten cleared up?

Ashok Vemuri

Backlog has gotten cleared up to a little extent. There is also an increased amount of interest in spending outside of their home markets. So we are seeing Asia actually pickup in a big way. We are seeing some amount of regulatory and compliance related stuff happening. These are things that they have to do, these are not things that they can put off. So those things that they have to do, they have actually picked up and I think it is not only just backlog but actually a lot of the plans that they had, have come to fruition in the 2nd quarter. So it is just a lucky coincidence that it happened in this particular quarter and got accumulated there.

Mitali

Binod, what about the India experience?

Binod

There are a lot of things looking up in India. There are lot of opportunities in India specially in the government sector and we are the consultants for a very prestigious project in India on the revised APDRP project which is in the Ministry of Power and we are consultants to three states: Rajasthan, Madhya Pradesh and Uttar Pradesh and we see a lot of activity in this space and a lot of movement in which the government are taking these investments very seriously and we are also seeing a lot of traction in the telecom sector in India around the value added services space.

Mitali

Are you going to bid for UID?

Binod

We are waiting for the actual details that are going to come out on the UID and we are going to evaluate it like any other project. We would evaluate our strengths in doing that particular thing and if we feel that we have the strengths in adding value, we will surely bid for it.

Udayan

Subhash, how has it been for communications because when I asked Shibu the top contributors, he singled out BFSI, retail and energy. Has communications had a good quarter?

Subhash Dhar

Communications has been flat this quarter. Given the fact that the spend has been rather anemic this entire fiscal year and over the last couple of quarters I think it has been a good quarter. We are seeing some of our clients increasing their spend and some are postponing some of their spends, it has been a rather flat quarter

Udayan

Can you break it up between geographies what happened in Europe specifically versus the US?

Subhash Dhar

Well actually our relative ratio between US and Europe and the rest of the world has remained the same. There has not been much of a currency issue here at this point in time. Between last quarter and this quarter, we have not seen much of a difference in terms of the spend patterns across geographies.

Mitali

By when do you think Ashok you would be confident to sit down and do pricing negotiations with your clients, on the up?

Ashok Vemuri

That is a little way out. Clearly there is stability, so there is a whole flight to procurement that happened earlier this year that is a happily behind us. But unless you are actually driving point focused solutions and you are addressing more of the transformational and business changing aspects of our clients, I do not think it is rationale to actually expect any price increases. But the investments that we are making in our solutions, in things that we are doing on a be-spoke basis, the M&A aspect of things, the cross border transactions etc, there we are clearly seeing price not being as important an aspect in deciding a deal, as we used to see in other deals.

Udayan

Overall Infosys has managed to bring more work offshore in the current quarter. Has there been true of BFSI specifically?

Ashok Vemuri

Yes, it has been. Most of the stuff that we are doing on a backlog basis or the projectized basis, the offshoring component has increased. But wherever we are doing more of the solutions work, where we are doing actually interface on the business side, there in the earlier periods you will see an increase on the onsite and then you will see an increase in offshore as it progresses. But yes we have benefited from the fact that the offshore component has gone up.

Udayan

Any client losses, because in the $10 million and $30 million category we have seen clients come off a bit anything in BFSI specifically?

Ashok Vemuri

No, we have not lost any clients in BFSI. We have added clients, as I said, both in Europe and the US but not lost anything.

Mitali

Binod for India opportunities what kind of deal sizes is it that India offers to Infosys?

Binod

It is very sector specific, if you look at the BFSI sector then there the deal sizes will be relatively small. But if you look at telecom, for instance the budget allocation is about Rs. 5000 Crores for the BSS/OSS work that BSNL is trying to rollout. So if you look at some of these projects you will find very large to medium-sized projects. So somewhere in the range of Rs. 2000 to 5000 crores is the size of the deal on a TCV basis. These are TCV for about 7 to 10 year period. It involves installation of the software or development of the software installation and maintenance over a period of time.

Udayan

Would it be fair that most of the revenues and the opportunities in India, most of it comes from the government and the public sector rather than the private sector?

Binod

Right now yes. I see a clear 90-10 split there. We are seeing more business coming in the government sector and of course the private sector is very cautious and has slowed down a little but I think they would also pickup because they would also have to start investing in newer technologies or go in for use of standard products which is the case in India. So I find government sector definitely is very large at this point of time.

Mitali

Subhash, how is the pipeline looking for the next 2 quarters because the expectations usually is that the coming quarter is quite one, there is lesser working days, do you expect to see a ramp up or things remaining in steady state?

Subhash

We are seeing telecom clients specially looking at going ahead with their innovation projects which they had put on hold in the past few quarters. They are trying to find that money for doing the innovation projects by doing some of their back-end stuff and consolidating with fewer vendors and pushing stock hopefully offshore as we go forward. So there is a lot more active discussions on deals and projects. So I think it is a little optimistic from what we have seen in the last 4 quarters at least from the discussions. The budgets are still a problem, the budget for this year are baked, next year there are no indications at this point in time what they will be like. So cautious optimism, that is where we are.

Udayan

Telecom has had a rough patch for the last few quarters. We saw declines and this quarter it has been flat. Can you say with some confidence that you have seen the worst and even if you don’t see dramatic improvements, you would not see that kind of declines that were being reported a few quarters back?

Subhash

See one of the things about telecom is that it is a very lumpy spent business because there are few large spenders. So it really comes down to a very few large vendors. I would say more yes than no, on is the worst is behind us at this point.

Mitali

Ashok, apart from BFSI what about the other verticals because that is seen as out of the ICU. What about manufacturing and automotive which were also considered problem spots in the US?

Ashok Vemuri

From a US perspective, manufacturing is going to be in a bit of a slow growth phase. But I think the way to look at manufacturing is not on a quarter-by-quarter basis, but you have to take a longer view on it because the cycle times are long. It has gone through a significant amount of turmoil in the manufacturing sector, if it does exist at all in the US for that matter, mostly outsourced but the width and breadth of what we do in this particular vertical is very large from discrete manufacturing to hi-tech and so on so forth and some of those aspects outside of auto and aerospace etc, are doing fairly well. If you look at the US market as a whole, retail is doing very well, utilities because of the stimulus packages actually doing fairly well, it is a highly regulated industry like BFSI and we are fairly comfortable in highly regulated industries. So we think utilities will do well but overall if you look at the US market, the macro-economic indicators do indicate a slight improvement b ut they are still way below where they used to be. If you take retail banking for example, that’s tracking unemployment.  So retail banking or cards businesses are still not doing very well. Investment banking is doing fairly well. We think that will turnaround faster than overall banking, corporate banking is doing well. A lot of investments happening in core banking transformation, telecom is also fairly stable as Subhash was saying, retail is definitely on the uptake but then we will have to wait and see what happens in the holiday season. So there are many ifs and buts and the fact that macro-economic indicators are still not where we would confidently say that yes we are really out of the woods yet.

Udayan

Thanks gentlemen for joining in today. We will take a quick break on that note.

Udayan

Welcome back the market is flat. Mohan morning, BG morning. So Mohan, salary hike?

Mohandas Pai

Yes we are giving 8% average hike across the board. That means everyone gets something. It is not that everybody is going to get 8% but we are going to give it and I think we are the only large company who is doing it across the board. I think it is important to keep the flock together. So if you look at what we have done in the downturn, three things standout, 1) We did not let go anybody except on performance ground. We have suffered, we had taken the hit, there have been people on the bench for a long period of time, we have put in more money on training, senior people have taken a cut in the salary, others have taken a smaller cut in the salary but we stood by our people. I think that is a very strong message. 2) We have honored all the offers that we did in colleges. So all those young people who come out of colleges with dreams in their eyes, we did not make them wait. We send them letters one year in advance telling please come on so and so date, at so and so hour and join and they have come with their parents and they are very happy and they are staying in Mysore but they have to work slightly harder because the period of training has been elongated. Then Mrs. Gandhi came there I think she was very happy to meet all of them and she saw the place and said this is a wonderful place. And 3) we had said that we will give a salary hike as things improve. So we have given a salary hike now. Things have improved in the sense, our confidence in the marketplace is higher. The fears are subdued right now compared to what it was and we give a salary hike to everybody. So I think we have kept our promises and that shows the kind of company and overall we finished our I-RACE transformation. So our HR strategy is now ready for the next phase of growth in the marketplace where the market is going to be led by sales rather than delivery. So for the IT industry exports from India where we were delivery constrained, now we are going to be sales constraint because we got to fight in the ma rketplace and the fight is going to be much more competitive, it is going to be much more fierce in future. We are seeing consolidation in the global marketplace, companies acquiring everybody and the consolidation means that the big may get bigger, the strong may gets stronger and the competition is going to be more fierce. And we are ready for that from HR angle.

Udayan

What was the salary hike predicated on? Was it because volumes had picked up and you are seeing better business visibility or was it more from an internal pressure or competitive pressure, you could sense some frustration in the employees?

Mohandas Pai

It is a fact that there was stability in the marketplace. We were prepared to take a hit on the earnings to pay our people. That is not the issue at all but we wanted stability because angle of the decline was very steep at the beginning of the year when we said there is not going to be a salary hike. The fears were very wide and the fears have been subdued and that angle of the decline has stabilized and it is stable and we are seeing some kind of growth. So the confidence level is higher and the moment the confident becomes slightly better, we said we must do it and we did it.

Mitali

BG, we understand the spending environment has normalized a little bit in your part of the world, what is the experience been like?

BG Srinivas

Of course the market reality while we are seeing some degree of stabilization and I would say the real good sign is the slowdown in the shrinkage per se, but it is still too early to say that things are back because the output is still low, the demand is low and unemployment is high. So the fundamental challenges continue while I would say because the shrinkage is stabilized, there is room for optimism. We are ourselves seeing more dialogue happening with our clients. So clients are ready to engage though because of the budget cuts, the decision making cycles will continue to be a little slower. So that is definitely reflecting the market sentiments today.

Udayan

Overall we are seeing some volume growth of close to 3% but has it come largely from the US or has Europe seen some volume growth in the current quarter?

BG Srinivas

Not in this current quarter and that is again not surprising because Europe always has a lag effect. Even when the slowdown hit, Europe was growing and then the same thing is happening now. As things stabilized, you will start seeing volume growth because the client activity has increased. We are also proactively investing in adding more CSG headcount in Europe. Our coverage in the Continent Europe, we are expanding both in France and Germany which are the two biggest markets outside UK. And also specifically to some sectors like retail, energy utilities, healthcare and pharma, the traction is definitely there. Manufacturing will take some time for the activities to pickup. On the banking and capital market, even in Europe things have stabilized, activity is picking up as you already heard. The vendor consolidation effort is actually paying dividends in the banking capital market space. The fact that the M&A activity is again shooting up activities within the IT integration and then t hese early signs could lead to more demand in the next two quarters.

Mitali

Say some of the revenue dependence though BG on your key clients like BT, RBS has that been on the decline as well in this quarter?

BG Srinivas

This quarter there has been stabilization, definitely and if you take the top five clients in Europe, except for one, in others things have stabilized and in three of them we have seen an uptake though it is slow.

Mitali

Mohan, where are utilization rates at right now and where do you want them to be in the next few quarters which you are guiding for growth?

Mohandas Pai

We want utilization to be in the high 70s or maybe very low 80s. That’s what our target is, without trainees. With trainees I think it is about 64%. It has come down. The reason is trainees have come on board. But I think we are comfortable about that. But let us remember one thing. With a lower utilization, with a pricing pressure, we have still got our margins and we are still paying salary hikes. And if utilization were to go up, we will have financial flexibility to invest much, much more compared to anybody else. So it is an extremely strong revenue model, it is an extremely strong governance model that we put in place. I just saw somebody sending me an SMS that “Infy is coming out of the recession with its margins up”. To me, it is the testimony to the kind of revenue model that we built in this company and we are very proud of it. In the board meeting today, Narayana Murthy made the remark as Chairman to everybody that look all the people have worked extremely har d during this period of intense pressure to come out successful. Now the market has stabilized. I cannot say we are successful yet because we want to see growth but we have passed a very painful phase and I think we have done quite well.

Udayan

We are going to hire more people as well 2000 people, this despite the fact that utilization is not quite where it should be?

Mohandas Pai

But we are hiring laterals Udayan. The game has changed in the sense that you want to go up the value chain, you may get larger deals, you need more laterals there, the complexity of the work is going up, end-to-end work is going up, you need more laterals and there is demand for more laterals in certain areas like infrastructure management services, enterprise solutions. So we need to get more people there. So we are getting people of a particular caliber, the lateral stream.

Mitali

What exactly has happened on the BPO side of the business, Mohan. We have not talked about that?

Mohandas Pai

BPO has done well. The BPO has grown I think about 3%-4% again and the BPO is seeing good traction. They added on some four clients and the BPO is profitable. Their profitability is quite good, you will be surprised with the numbers. The numbers are quite good. They shrunk in the number of people. They do not have a bench. They are hiring, they are going to hire more people and they shrunk in number of people because their attrition higher, if you do not hire, it stabilizes over a period of time. They added on more capability, they have won some good deals. And now we are seeing in the F&A space, in most large deals across the world where the top tier and in top 2 and they are winning their fair share. So in the BPO space, we are seeing growth again.

Mitali

You were in the CFO’s shoes for a long-time Mohan, is this a crazy situation to work with, the kind of currency volatility we are seeing?

Mohandas Pai

The currency issue is crazy because all parts are moving, so there is no stability and for all parts to move and to manage, you need a cross-currency market in India. I think our foreign exchange policy is behind the needs of Indian corporates because regulators possibly are not understanding the complexity which we have to deal with, you bill in euro, you bill in pounds, you bill in Aussie dollars and you have got assets and liabilites all over the place and the cross currency moves, the market becomes very volatile and India is extremely volatile market. Suddenly the market will collapse, suddenly the market will go the other way for various reasons. We all know that and we need to have the flexible to manage all that and we do not have all of the tools. It is extremely frustrating that we are not empowered to have all the tools in terms of cross currency markets and a liquid market at that and that is a constraint. So you have seen that happening, the dollar is weakening and you have s een the Pound weakening a bit, the Euro is going up, the Yen is getting stronger, the Aussie Dollars is getting stronger, interest rates in Australia has gone up. So I think it is extremely complex.

Udayan

Good luck gentleman. Thanks very much for joining in today, that is Infosys for this quarter. The news is good. They are cautiously optimistic as they always are

EX-99.9

Exhibit 99.9
Form of Advertisement

	Infosys Technologies Limited
	Regd. office: Electronics City, Hosur Road, Bangalore – 560 100, India.

Audited consolidated financial results of Infosys Technologies Limited and its subsidiaries for the quarter and half-year ended September 30, 2009

(in Rs. crore, except per share data)

Particulars	Quarter ended September 30,		Half-year ended September 30,		Year ended March 31,
	2009	2008	2009	2008	2009
Income from software services, products and business process management	5,585	5,418	11,057	10,272	21,693
Software development and business process management expenses	2,963	2,891	5,878	5,645	11,765
Gross profit	2,622	2,527	5,179	4,627	9,928
Selling and marketing expenses	276	303	537	560	1,104
General and administration expenses	413	430	841	794	1,629
Operating profit before depreciation and minority interest	1,933	1,794	3,801	3,273	7,195
Depreciation	232	177	454	346	761
Operating profit before tax and minority interest	1,701	1,617	3,347	2,927	6,434
Other income, net	236	66	505	183	473
Net profit before tax and minority interest	1,937	1,683	3,852	3,110	6,907
Provision for taxation	397	251	785	376	919
Net profit after tax and before minority interest	1,540	1,432	3,067	2,734	5,988
Minority interest	–	–	–	–	–
Net profit after tax and minority interest	1,540	1,432	3,067	2,734	5,988
Paid-up equity share capital (par value Rs. 5/- each, fully paid)	287	286	287	286	286
Reserves and surplus	20,470	15,631	20,470	15,631	17,968
Earnings per share (par value Rs. 5/- each)
Basic	26.86	25.02	53.52	47.78	104.60
Diluted	26.83	24.97	52.45	47.67	104.43
Dividend per share (par value Rs. 5/- each) (Refer Note 2)
Interim dividend	10.00	10.00	10.00	10.00	10.00
Final dividend	–	–	–	–	13.50
Total dividend	10.00	10.00	10.00	10.00	23.50
Total Public Shareholding#
Number of shares	37,25,67,451	36,82,72,931	37,25,67,451	36,82,72,931	36,87,57,435
Percentage of shareholding	64.99	64.33	64.99	64.33	64.37
Promoters and Promoter Group Shareholding
Pledged / Encumbered
Number of shares*	–	16,000	–	16,000	16,000
Percentage of shares (as a % of the total shareholding of promoter and promoter group)	–	0.02	–	0.02	0.02
Percentage of shares (as a % of the total share capital of the company)	–	–	–	–	–
Non-encumbered
Number of shares	9,44,84,978	9,44,68,978	9,44,84,978	9,44,68,978	9,44,68,978
Percentage of shares (as a % of the total shareholding of promoter and promoter group)	100.00	99.98	100.00	99.98	99.98
Percentage of shares (as a % of the total share capital of the company)	16.48	16.49	16.48	16.49	16.49

^# Total public shareholding as defined under Clause 40A of the Listing Agreement (excludes shares held by founders and American Depositary Receipt holders).
* Pledge released on April 13, 2009
Note: The audited results of Infosys Technologies Limited for the quarter and half-year ended September 30, 2009 is available on our website www.infosys.com

Other information:

(in Rs. crore)

Particulars	Quarter ended September 30,		Half-year ended September 30,		Year ended March 31,
	2009	2008	2009	2008	2009
Staff costs	2,978	2,769	5,856	5,402	11,405
Items exceeding 10% of aggregate expenditure	–	–	–	–	–
Details of other income:
Interest on deposits with banks and others	195	190	421	383	871
Dividend on investments in liquid mutual funds	23	1	33	3	5
Miscellaneous income, net	4	1	6	3	36
Gains/(losses) on foreign currency	14	(126)	45	(206)	(439)
Total	236	66	505	183	473

Notes:

1.	The audited financial statements have been taken on record by the Board of Directors at its meeting held on October 9, 2009. There are no qualifications in the auditors’ reports for these periods. The information presented above is extracted from the audited financial statements as stated. The financial statements are prepared in accordance with the principles and procedures for the preparation and presentation of consolidated financial statements as set out in the Accounting Standard on Consolidated Financial Statements mandated by Rule 3 of the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India.
2.	An interim dividend of Rs. 10.00 per share has been declared at the above board meeting. The record date for the payment of the dividend will be October 16, 2009. The interim dividend declared in the previous year was Rs. 10.00 per share.
3.	Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended September 30, 2009.
	Nature of complaints received	Opening balance	Additions	Disposal	Closing balance
	Dividend / Bonus / Annual report related	–	184	184	–

Segment reporting (Consolidated - Audited)

(in Rs. crore)

Particulars	Quarter ended September 30,		Half-year ended September 30,		Year ended March 31,
	2009	2008	2009	2008	2009
Revenue by industry segment
Financial services	1,871	1,804	3,678	3,478	7,358
Manufacturing	1,080	1,090	2,201	1,984	4,289
Telecom	902	1,034	1,824	1,993	3,906
Retail	787	652	1,510	1,242	2,728
Others	945	838	1,844	1,575	3,412
Total	5,585	5,418	11,057	10,272	21,693
Less: Inter-segment revenue	–	–	–	–	–
Net revenue from operations	5,585	5,418	11,057	10,272	21,693
Segment profit before tax, depreciation and minority interest:
Financial services	651	571	1,250	1,052	2,374
Manufacturing	300	349	650	595	1,326
Telecom	352	392	719	743	1,442
Retail	284	204	524	378	888
Others	346	278	658	505	1,165
Total	1,933	1,794	3,801	3,273	7,195
Less: Other un-allocable expenditure	232	177	454	346	761
(excluding un-allocable income)
Operating profit before tax and minority interest	1,701	1,617	3,347	2,927	6,434

Notes on segment information

Principal segments

The company’s operations predominantly relate to providing technology services, delivered to clients globally, operating in various industry segments. Accordingly, revenues represented along industries served constitute the primary basis of the segmental information set out above.

Segmental capital employed

Fixed assets used in the company’s business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and support services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities has been made.

		By order of the Board
		for Infosys Technologies Limited
Bangalore, India	S. D. Shibulal	S. Gopalakrishnan
October 9, 2009	Chief Operating Officer	Chief Executive Officer
	and Director	and Managing Director

The Board has also taken on record the unaudited consolidated results of Infosys Technologies Limited and its subsidiaries for the three months and six months ended September 30, 2009, prepared as per International Financial Reporting Standards (IFRS). A summary of the financial statements is as follows:

(in US$ million, except per ADS data)

Particulars	Three months ended September 30,		Six months ended September 30,		Year endedMarch 31,
	2009	2008	2009	2008	2009
Revenues	1,154	1,216	2,276	2,371	4,663
Cost of sales	662	691	1,305	1,388	2,699
Gross profit	492	525	971	983	1,964
Net income	317	320	630	628	1,281
Earnings per American Depositary Share (ADS)
Basic	0.56	0.56	1.10	1.10	2.25
Diluted	0.56	0.56	1.10	1.10	2.25
Total assets	5,188	4,169	5,188	4,169	4,376
Cash and cash equivalents including available-for-sale financial assets	2,878	1,886	2,878	1,886	2,167

The reconciliation of net profit as per Indian GAAP and IFRS is as follows:

(in US$ million)

Particulars	Three months ended September 30,		Six months ended September 30,		Year ended March 31,
	2009	2008	2009	2008	2009
Consolidated net profit as per Indian GAAP	318	321	631	629	1,284
Amortization of intangible assets	(1)	(1)	(1)	(1)	(2)
Share-based compensation (IFRS 2)	–	–	–	–	(1)
Consolidated net profit as per IFRS	317	320	630	628	1,281

Statements in connection with this release may include forward-looking statements within the meaning of U.S. Securities laws intended to qualify for the “safe harbor” under the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties including those described in our SEC filings available at www.sec.gov including our Annual Report on Form 20-F for the year ended March 31, 2009, and our other recent filings, and actual results may differ materially from those projected by forward-looking statements. We may make additional written and oral forward-looking statements but do not undertake, and disclaim any obligation, to update them.

EX-99.10

Exhibit 99.10
IFRS Earnings Release

Unaudited Consolidated Financial Statements (Condensed) in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS)

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets as of     

(Dollars in millions except share data)

	September 30,  2009	March 31, 2009
ASSETS
Current assets
Cash and cash equivalents	$2,208	$2,167
Available-for-sale financial assets	670	–
Trade receivables	700	724
Unbilled revenue	164	148
Derivative financial instruments	5	–
Prepayments and other assets	108	81
Total current assets	3,855	3,120
Non-current assets
Property, plant and equipment	946	920
Goodwill	144	135
Intangible assets	6	7
Deferred income tax assets	109	88
Income tax assets	59	54
Other non-current assets	69	52
Total non-current assets	1,333	1,256
Total assets	$5,188	$4,376
LIABILITIES AND EQUITY
Current liabilities
Trade payables	$2	$5
Derivative financial instruments	–	22
Current income tax liabilities	137	115
Client deposits	1	1
Unearned revenue	116	65
Employee benefit obligations	29	21
Provisions	22	18
Other current liabilities	354	290
Total current liabilities	661	537
Non-current liabilities
Deferred income tax liabilities	8	7
Employee benefit obligations	48	48
Total liabilities	717	592
Equity
Share capital-Rs. 5 ($0.16) par value 600,000,000 equity shares authorized, issued and outstanding  570,478,093 and 572,830,043  as of September 30, 2009 and March 31, 2009, respectively	64	64
Share premium	681	672
Retained earnings	4,070	3,618
Other components of equity	(344)	(570)
Total equity attributable to equity holders of the company	4,471	3,784
Total liabilities and equity	$5,188	$4,376

The accompanying notes form an integral part of the unaudited consolidated financial statements

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Comprehensive Income   

(Dollars in millions except share data) 

	Three months ended September 30,		Six months ended September 30,
	2009	2008	2009	2008
Revenues	$1,154	$1,216	$2,276	$2,371
Cost of sales	662	691	1,305	1,388
Gross profit	492	525	971	983
Operating expenses:
Selling and marketing expenses	57	68	110	129
Administrative expenses	85	96	173	183
Total operating expenses	142	164	283	312
Operating profit	350	361	688	671
Other income / (expense)	8	(28)	15	(46)
Finance income	41	43	89	89
Profit before income taxes	399	376	792	714
Income tax expense	82	56	162	86
Net profit	$317	$320	$630	$628
Other comprehensive income
Exchange differences on translating foreign operations	(10)	(316)	226	(590)
Total other comprehensive income	$(10)	$(316)	$226	$(590)
Total comprehensive income	$307	$4	$856	$38
Profit attributable to:
Owners of the company	$317	$320	$630	$628
Non-controlling interest	–	–	–	–
	$317	$320	$630	$628
Total comprehensive income attributable to:
Owners of the company	$307	$4	$856	$38
Non-controlling interest	–	–	–	–
	$307	$4	$856	$38
Earnings per equity share
Basic ($)	0.56	0.56	1.10	1.10
Diluted ($)	0.56	0.56	1.10	1.10
Weighted average equity shares used in computing earnings per equity share
Basic	570,343,178	569,592,198	570,229,204	569,479,023
Diluted	571,046,545	570,721,306	570,948,478	570,723,017

The accompanying notes form an integral part of the unaudited consolidated financial statements

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Changes in Equity

(Dollars in millions except share data) 

	Shares	Share capital	Share premium	Retained earnings	Other components of equity	Total equity attributable to equity holders of the company
Balance as of  April 1, 2008	571,995,758	$64	$655	$2,896	$301	$3,916
Changes in equity for the six months ended September 30, 2008
Shares issued	504,097	–	8	–	–	8
Dividends	–	–	–	(424)	–	(424)
Total comprehensive income	–	–	–	628	(590)	38
Balance as of  September 30, 2008	572,499,855	$64	$663	$3,100	$(289)	$3,538
Balance as of April 1, 2009	572,830,043	$64	$672	$3,618	$(570)	$3,784
Changes in equity for the six months ended September 30, 2009
Shares issued	481,650	–	9	–	–	9
Treasury shares*	(2,833,600)	–	–	–	–	–
Reserves on consolidation of trusts	–	–	–	10	–	10
Dividends	–	–	–	(188)	–	(188)
Total comprehensive income	–	–	–	630	226	856
Balance as of  September 30,  2009	570,478,093	$64	$681	$4,070	$(344)	$4,471

The accompanying notes form an integral part of the unaudited consolidated financial statements
*Treasury shares held by controlled trusts consolidated effective July 1, 2009.

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Cash Flow  

(Dollars in millions)

	Six months ended September 30,
	2009	2008
Operating activities:
Net profit	$630	$628
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization	94	81
Income tax expense	162	86
Income on investments	(7)	–
Changes in working capital
Trade receivables	63	(69)
Prepayments and other assets	(31)	18
Unbilled revenue	(8)	(77)
Trade payables	(3)	(8)
Client deposits	–	5
Unearned revenue	47	25
Other liabilities and provisions	31	87
Cash generated from operations	978	776
Income taxes paid	(164)	(76)
Net cash provided by operating activities	$814	$700
Investing activities:
Payment for acquisition of business, net of cash acquired	–	(3)
Expenditure on property, plant and equipment	(71)	(168)
Loans to employees	1	(4)
Non-current deposits placed with corporation	(12)	(12)
Income on investments	7	–
Investment in available-for-sale financial assets	(988)	(60)
Redemption of available-for-sale financial assets	325	76
Net cash used in investing activities	$(738)	$(171)
Financing activities:
Proceeds from issuance of common stock on exercise of employee stock options	9	8
Payment of dividends	(188)	(424)
Net cash used in financing activities	$(179)	$(416)
Effect of exchange rate changes on cash and cash equivalents	144	(285)
Net decrease in cash and cash equivalents	(103)	113
Cash and cash equivalents at the beginning	2,167	2,058
Cash and cash equivalents at the end	$2,208	$1,886
Supplementary information:
Restricted cash balance	$11	$1

The accompanying notes form an integral part of the unaudited consolidated financial statements

Notes to the Unaudited Consolidated Financial Statements

1.1 Company overview

Infosys Technologies Limited (Infosys or the company) along with its majority owned and controlled subsidiary, Infosys BPO Limited (Infosys BPO), wholly owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited (Infosys Australia), Infosys Technologies (China) Co. Limited (Infosys China), Infosys Consulting, Inc. (Infosys Consulting), Infosys Technologies S. DE R.L. de C.V. (Infosys Mexico), Infosys Technologies (Sweden) AB (Infosys Sweden) and Infosys Tecnologia DO Brasil LTDA. (Infosys Brasil) and controlled trusts is a leading global technology services company. The Infosys group of companies (the Group) provides end-to-end business solutions that leverage technology thereby enabling its clients to enhance business performance. The Group's operations are to provide solutions that span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing an d infrastructure management services. In addition, the Group offers software products for the banking industry and business process management services.

The company is a public limited company incorporated and domiciled in India and has its registered office at Bangalore, Karnataka, India. The company has its primary listing on the Bombay Stock Exchange and National Stock Exchange in India. The company's American Depositary Shares representing equity shares are also listed on NASDAQ Global Select Market.

1.2 Basis of preparation of financial statements

These consolidated financial statements as at and for the six months ended September 30, 2009, have been prepared in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), under the historical cost convention on the accrual basis except for certain financial instruments which have been measured at fair values. These financial statements are prepared in accordance with IAS 34, Interim Financial Reporting and should be read in conjunction with the consolidated financial statements and related notes included in the company's Annual Report on Form 20-F for the fiscal year ended March 31, 2009.

Accounting policies have been applied consistently to all periods presented in the consolidated financial statements.

1.3 Basis of consolidation

Infosys consolidates entities which it owns or controls. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable are also taken into account. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Group companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain/ loss from such transactions are eliminated upon consolidation. The consolidated financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the company, are excluded.

1.4 Use of estimates

The preparation of the financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in the consolidated financial statements have been disclosed in Note 1.5. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

1.5 Critical accounting estimates

Revenue recognition

The company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the company to estimate the efforts expended to date as a proportion of the total efforts to be expended. Efforts expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Income taxes

The company's two major tax jurisdictions are India and the U.S., though the company also files tax returns in other foreign jurisdictions. Significant judgments are involved in determining the provision for income taxes including expectation on tax positions which are sustainable on a more likely than not basis.

1.6 Revenue recognition

The company derives revenues primarily from software development and related services, from business process management services and from the licensing of software products. Arrangements with customers for software development and related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the balance sheet date is recognized as unbilled revenues. Revenue from fixed-price, fixed-timeframe contracts is recognized as per the percentage-of-completion method. Efforts expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates. Costs and earnings in excess of billings are classified as unbilled revenue while billings in excess of costs and earnings are classified as unearned revenue. Maintenance revenue is recognized ratably over the term of the underlying maintenance arrangement.

In arrangements for software development and related services and maintenance services, the company has applied the guidance in IAS 18, Revenue, by applying the revenue recognition criteria for each separately identifiable component of a single transaction. The arrangements generally meet the criteria for considering software development and related services as separately identifiable components. For allocating the consideration, the company has measured the revenue in respect of each separable component of a transaction at its fair value, in accordance with principles given in IAS 18. The price that is regularly charged for an item when sold separately is the best evidence of its fair value. In cases where the company is unable to establish objective and reliable evidence of fair value for the software development and related services, the company has used a residual method to allocate the arrangement consideration. In these cases the balance consideration after allocating the fair values of undelivered components of a transaction has been allocated to the delivered components for which specific fair values do not exist.

License fee revenues are recognized when the general revenue recognition criteria given in IAS 18 are met. Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS). The company has applied the principles given in IAS 18 to account for revenues from these multiple element arrangements. Objective and reliable evidence of fair value has been established for ATS. Objective and reliable evidence of fair value is the price charged when the element is sold separately. When other services are provided in conjunction with the licensing arrangement and objective and reliable evidence of their fair values have been established, the revenue from such contracts are allocated to each component of the contract in a manner, whereby revenue is deferred for the undelivered services and the residual amounts are recognized as revenue for delivered elements. In the absence of objective and reliable evidence of fair value for implementation , the entire arrangement fee for license and implementation is recognized as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognized as the services are performed. ATS revenue is recognized ratably over the period in which the services are rendered.

Advances received for services and products, are reported as client deposits until all conditions for revenue recognition are met.

The company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discounts/ incentives amount to each of the underlying revenue transaction that results in progress by the customer towards earning the discount/ incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the company recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

The company presents revenues net of value-added taxes in its consolidated statement of comprehensive income.

1.7 Property, plant and equipment including capital work-in-progress

Property, plant and equipment are stated at cost, less accumulated depreciation and impairments, if any. The direct costs are capitalized until the property, plant and equipment are ready for use, as intended by management. The company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

Buildings	15 years
Plant and machinery	5 years
Computer equipment	2-5 years
Furniture and fixtures	5 years
Vehicles	5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date and the cost of assets not put to use before such date are disclosed under "Capital work-in-progress". Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of comprehensive income when incurred. The cost and related accumulated depreciation are eliminated from the consolidated financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of comprehensive income. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.

1.8 Business combinations

Business combinations have been accounted for using the purchase method under the provisions of IFRS 3 (Revised), Business Combinations. Cash and amounts of consideration that are determinable at the date of acquisition are included in determining the cost of the acquired business.

The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the dates of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.

1.9 Goodwill

Goodwill represents the cost of business acquisition in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess is negative, it is recognized immediately in the statement of comprehensive income.

Goodwill is measured at cost less accumulated impairment losses.

1.10 Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairments. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the company has an intention and ability to complete and use or sell the software and the costs can be measured reliably. Research and development costs and software development costs incurred under contractual arrangements with customers are accounted as cost of sales.

1.11 Financial instruments

Financial instruments of the Group are classified in the following categories: non-derivative financial instruments comprising of loans and receivables, available-for-sale financial assets and trade and other payables; derivative financial instruments under the category of financial assets or financial liabilities at fair value through profit or loss. The classification of financial instruments depends on the purpose for which those were acquired. Management determines the classification of its financial instruments at initial recognition.

a. Non-derivative financial instruments

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are measured initially at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss. Loans and receivables are represented by trade receivables, unbilled revenue, cash and cash equivalents and certificates of deposit. Cash and cash equivalents comprise cash and bank deposits and deposits with banks and financial institutions. The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. Certificates of deposit is a negotiable money market instrument for funds deposited at a bank or other eligible financial institution for a specified time period.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or are not classified in any of the other categories. Available-for-sale financial assets are recognized initially at fair value plus transactions costs. Subsequent to initial recognition these are measured at fair value and changes therein, other than impairment losses and foreign exchange gains and losses on available-for-sale monetary items are recognized directly in other comprehensive income. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to net profit in the statement of comprehensive income. These are presented as current assets unless management intends to dispose off the assets after 12 months from the balance sheet date.

(iii) Trade and other payables

Trade and other payables are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest method.

b. Derivative financial instruments

Financial assets or financial liabilities, at fair value through profit or loss.

This category has two sub-categories wherein, financial assets or financial liabilities are held for trading or are designated as such upon initial recognition. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Derivatives are categorized as held for trading unless they are designated as hedges.

The company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in foreign exchange rates on trade receivables and forecasted cash flows denominated in certain foreign currencies. The counterparty for these contracts is generally a bank or a financial institution. Although the company believes that these financial instruments constitute hedges from an economic perspective, they do not qualify for hedge accounting under IAS 39, Financial Instruments: Recognition and Measurement. Any derivative that is either not designated a hedge, or is so designated but is ineffective per IAS 39, is categorized as a financial asset, at fair value through profit or loss.

Derivatives are recognized initially at fair value and attributable transaction costs are recognized in the statement of comprehensive income when incurred. Subsequent to initial recognition, derivatives are measured at fair value through profit or loss as exchange gains or losses. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

c. Share capital and treasury shares

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

Treasury Shares

When any entity within the Group purchases the company's ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from retained earnings.

1.12 Impairment

a. Financial assets

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset is considered impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

(i) Loans and receivables

Impairment loss in respect of loans and receivables measured at amortized cost are calculated as the difference between their carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Such impairment loss is recognized in net profit in the statement of comprehensive income.

(ii) Available-for-sale financial assets

Significant or prolonged decline in the fair value of the security below its cost and the disappearance of an active trading market for the security are objective evidence that the security is impaired. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value and is recognized in net profit in the statement of comprehensive income. The cumulative loss that was recognized in other comprehensive income is transferred to net profit in the statement of comprehensive income upon impairment.

b. Non-financial assets

(i) Goodwill

Goodwill is tested for impairment on an annual basis and whenever there is an indication that goodwill may be impaired, relying on a number of factors including operating results, business plans and future cash flows. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Group's cash generating units (CGU) expected to benefit from the synergies arising from the business combination. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU.

Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized in the statement of comprehensive income and is not reversed in the subsequent period.

(ii) Intangible assets and property, plant and equipment

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in net profit in the statement of comprehensive income is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset.

c. Reversal of impairment loss

An impairment loss for financial assets is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of impairment loss for an asset other than goodwill and available- for-sale financial assets that are equity securities is recognized in the statement of comprehensive income. For available-for-sale financial assets that are equity securities, the reversal is recognized in other comprehensive income.

1.13 Fair value of financial instruments

In determining the fair value of its financial instruments, the company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

For all other financial instruments the carrying amounts approximate fair value due to the short maturity of those instruments. The fair value of securities, which do not have an active market and where it is not practicable to determine the fair values with sufficient reliability, are carried at cost less impairment.

1.14 Provisions

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

a. Post sales client support

The company provides its clients with a fixed-period post sales support for corrections of errors and telephone support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales. The company estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence.

b. Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Group recognizes any impairment loss on the assets associated with that contract.

1.15 Foreign currency

Functional and presentation currency

The functional currency of Infosys and Infosys BPO is the Indian Rupee. The functional currencies for Infosys Australia, Infosys China, Infosys Consulting, Infosys Mexico, Infosys Sweden and Infosys Brasil are the respective local currencies. The consolidated financial statements are presented in U.S. dollars (rounded off to the nearest million) to facilitate global comparability.

Transactions and translations

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translations are included in net profit in the statement of comprehensive income. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

The translation of functional currencies to U.S. dollars is performed for assets and liabilities using the exchange rate in effect at the balance sheet date and for revenue, expense and cash-flow items using the average exchange rate for the respective periods. The gains or losses resulting from such translation are included in currency translation reserves under other components of equity. When a subsidiary is disposed off, in part or in full, the relevant amount is transferred to net profit in the statement of comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate in effect at the balance sheet date.

1.16 Earnings per share

Basic earnings per share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

1.17 Income taxes

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the statement of comprehensive income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets ar e reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future. The income tax provision for the interim period is made based on the best estimate of the annual aver age tax rate expected to be applicable for the full fiscal year. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to income are credited to share premium.

1.18 Employee benefits

1.18.1 Gratuity

In accordance with the Payment of Gratuity Act, 1972, Infosys provides for gratuity, a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each balance sheet date using the projected unit credit method. The company fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees' Gratuity Fund Trust (the Trust). In case of Infosys BPO, contributions are made to the Infosys BPO's Employees' Gratuity Fund Trust. Trustees administer contributions made to the Trusts and contributions are invested in specific designated instruments as permitted by law and investments are also made in mutual funds that invest in the specific designated instruments.

The Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability, respectively in accordance with IAS 19, Employee benefits. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of comprehensive income in the period in which they arise. When the computation results in a benefit to the Group, the recognized asset is limited to the net total of any unrecognized past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

1.18.2 Superannuation

Certain employees of Infosys are also participants in a defined contribution plan. Until March 2005, the company made monthly contributions under the superannuation plan (the Plan) to the Infosys Technologies Limited Employees' Superannuation Fund Trust (Infosys Superannuation Trust) based on a specified percentage of each covered employee's salary. The company has no further obligations to the Plan beyond its monthly contributions. Effective April 1, 2005, a portion of the monthly contribution amount is being paid directly to the employees as an allowance and the balance amount is contributed to the Infosys Superannuation Trust.

Certain employees of Infosys BPO are also eligible for superannuation benefit. Infosys BPO has no further obligations to the superannuation plan beyond its monthly contribution which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

Certain employees of Infosys Australia are also eligible for superannuation benefit. Infosys Australia has no further obligations to the superannuation plan beyond its monthly contribution.

1.18.3 Provident fund

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The company contributes a part of the contributions to the Infosys Technologies Limited Employees' Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

In respect of Infosys BPO, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Infosys BPO make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The company has no further obligation to the plan beyond its monthly contributions.

1.18.4 Compensated absences

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is measured based on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

1.19 Share-based compensation

The Group recognizes compensation expense relating to share-based payments in net profit using a fair-value measurement method in accordance with IFRS 2, Share-Based Payment. Under the fair value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards. The Group includes a forfeiture estimate in the amount of compensation expense being recognized.

The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton valuation model. The expected term of an option is estimated based on the vesting term and contractual term of the option, as well as expected exercise behavior of the employee who receives the option. Expected volatility during the expected term of the option is based on historical volatility, during a period equivalent to the expected term of the option, of the observed market prices of the company's publicly traded equity shares.

Expected dividends during the expected term of the option are based on recent dividend activity. Risk-free interest rates are based on the government securities yield in effect at the time of the grant.

1.20 Dividends

Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the company's board of directors.

1.21 Operating profit

Operating profit for the Group is computed considering the revenues, net of cost of sales, selling and marketing expenses and administrative expenses.

1.22 Finance income

Finance income comprises interest income on deposits. Interest income is recognized using the effective interest method.

1.23 Dividend income

Dividend income is recognized when the right to receive payment is established.

2 Notes to the unaudited consolidated financial statements

2.1 Cash and cash equivalents

Cash and cash equivalents are as follows:

(Dollars in millions)

	As of
	September 30, 2009	March 31, 2009
Cash and bank deposits	$1,891	$1,911
Deposits with corporations	317	256
	$2,208	$2,167

Cash and cash equivalents as of September 30, 2009 include restricted cash balance of $11 million. The restricted cash balance as of March 31, 2009 was less than $1 million. The restrictions are primarily on account of unclaimed dividends and cash balances held by irrevocable trusts controlled by the company.

The deposits maintained by the Group with corporations comprise of time deposits, which can be withdrawn by the Group at any point without prior notice or penalty on the principal.

(Dollars in millions)

	As of
	September 30, 2009	March 31, 2009
Current Accounts
ABN Amro Bank, China	$3	$1
ABN Amro Bank account in U.S. dollars, China	2	3
Bank of America, U.S.A	37	116
Bank of America, Mexico	4	–
Banamex, Mexico	2	–
Citibank N.A., Australia	4	7
Citibank N.A., Brazil	1	–
Citibank N.A., Czech Republic	1	–
Citibank N.A. account in Euro, Czech Republic	–	1
Citibank N.A. account in U.S. dollars, Czech Republic	1	1
Citibank N.A., Japan	1	–
Citibank N.A., Singapore	1	2
Deutsche Bank, Belgium	1	1
Deutsche Bank, Germany	1	1
Deutsche Bank, India	1	2
Deutsche Bank, Netherlands	2	–
Deutsche Bank, Singapore	3	–
Deutsche Bank, account in U.S. dollars, Philippines,	1	–
Deutsche Bank, United Kingdom	5	11
Deutsche Bank account in U.S dollars, Switzerland	1	–
Deutsche Bank-EEFC account in Euro, India	12	5
Deutsche Bank-EEFC account in Swiss Franc, India	1	1
Deutsche Bank-EEFC account in United Kingdom Pound Sterling, India	1	–
Deutsche Bank-EEFC account in U.S. dollars, India	21	2
HSBC Bank, United Kingdom	–	2
ICICI Bank, India	3	4
ICICI Unclaimed dividend account	1	–
ICICI Bank-EEFC account in United Kingdom Pound Sterling, India	5	1
ICICI Bank-EEFC account in U.S. dollars, India	4	8
National Australia Bank Limited, Australia	6	6
National Australia Bank Limited account in U.S. dollars, Australia	2	2
Standard Chartered Bank, UAE	1	–
Royal Bank of Canada, Canada	2	1
	$131	$178
Deposit Accounts
Andhra Bank, India	17	16
ABN Amro Bank	–	–
Bank of Baroda, India	172	163
Bank of Maharashtra, India	80	106
Barclays Bank, Plc. India	35	28
Canara Bank, India	212	157
Citibank N.A.,Australia	–	–
Citibank N.A., Czech Republic	3	1
Corporation Bank, India	49	68
DBS Bank, India	10	5
Deutsche Bank , Poland	1	–
HDFC Bank, India	3	–
HSBC Bank, India	38	56
ICICI Bank, India	208	110
IDBI Bank, India	116	108
ING Vysya Bank, India	5	10
Indian Overseas Bank	14	–
National Australia Bank Limited, Australia	64	45
Oriental Bank of Commerce	27	–
Punjab National Bank, India	164	95
Standard Chartered Bank, India	–	7
State Bank of Hyderabad, India	43	39
State Bank of India, India	271	416
State Bank of Mysore, India	74	99
Syndicate Bank, India	104	99
The Bank of Nova Scotia, India	2	69
Union Bank of India, India	28	17
Vijaya Bank, India	20	19
	$1,760	$1,733
Deposits with corporations
HDFC Limited, India	$316	$256
Sundaram BNP Paribus Home Finance Limited	1	–
	$317	$256
Total	$2,208	$2,167

2.2   Business Combinations

On April 1, 2008, Infosys Australia acquired 100% of the equity shares of Mainstream Software Pty Limited (MSPL) for a cash consideration of $3 million. Consequent to this acquisition, intellectual property rights amounting to $3 million have been recorded. Considering the economic benefits expected to be obtained from the intellectual property rights the same have been fully amortized during the previous year.

2.3 Income taxes

The provision for income taxes in the statement of comprehensive income comprises:

(Dollars in millions)

	Six months ended September 30,
	2009	2008
Current taxes
Domestic taxes	$144	$70
Foreign taxes	34	47
	$178	$117
Deferred taxes
Domestic taxes	(17)	(30)
Foreign taxes	1	(1)
	$(16)	$(31)
Income tax expense	$162	$86

Entire deferred tax income for the six months ended September 30, 2009 and September 30, 2008 relates to origination and reversal of temporary differences.

The foreign tax expense is due to income taxes payable overseas, principally in the United States of America. The company benefits from certain significant tax incentives provided to software firms under Indian tax laws. These incentives presently include those for facilities set up under the Special Economic Zones Act, 2005 and an exemption from payment of Indian corporate income taxes for a period of ten consecutive years of operation of software development facilities designated as “Software Technology Parks” (the STP Tax Holiday). The STP Tax Holiday is available, beginning from the financial year when the unit started producing computer software or April 1, 1999, whichever is earlier. Most of our STP units have already completed the tax holiday period and for the remaining STP units the tax holiday will expire by fiscal 2011. Under the Special Economic Zones Act, 2005 scheme, units in designated special economic zones which begin providing services on or after April 1, 2005 are eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits or gains for a further five years. Certain tax benefits are also available for a further period of five years subject to the unit meeting defined conditions.

Infosys is subject to a 15% Branch Profit Tax (BPT) in the U.S. to the extent its U.S. branch's net profit during the year is greater than the increase in the net assets of the U.S. branch during the fiscal year, computed in accordance with the Internal Revenue Code. As at March 31, 2009, Infosys' U.S. branch net assets amounted to approximately $481 million. As of September 30, 2009, the company had not triggered the BPT. The company has recorded a deferred tax liability on its net assets in the United States, to the extent it intends to distribute its branch profits in the foreseeable future.

Deferred income tax liabilities have not been recognized on temporary differences associated with investments in subsidiaries and branches as it is probable that the temporary differences will not reverse in the foreseeable future.

The tax effects of significant temporary differences that resulted in deferred income tax assets and liabilities are as follows:

(Dollars in millions)

	As of
	September 30,  2009	March 31, 2009
Deferred income tax assets
Property, plant and equipment	$36	$26
Minimum alternate tax credit carry-forwards	64	56
Others	9	6
Total deferred income tax assets	109	88
Deferred income tax liabilities
Intangible asset	–	–
Temporary difference related to branch profits	(8)	(7)
Total deferred income tax liabilities	(8)	(7)
Deferred income tax assets	$101	$81

In assessing the realizability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

Pursuant to the enacted changes in the Indian Income Tax Laws effective April 1, 2007, a Minimum Alternate Tax (MAT) has been extended to income in respect of which a deduction may be claimed under sections 10A and 10AA of the Income Tax Act; consequently the company has calculated its tax liability for current domestic taxes after considering MAT. The excess tax paid under MAT provisions being over and above regular tax liability can be carried forward and set off against future tax liabilities computed under regular tax provisions. The company was required to pay MAT, and, accordingly, a deferred income tax asset of $64 million and $56 million has been recognized on the balance sheet as of September 30, 2009 and March 31, 2009, respectively, which can be carried forward for a period of ten years from the year of recognition.

2.4 Earnings per share

The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share:

	Six months ended September 30,
	2009	2008
Basic earnings per equity share - weighted average number of equity shares outstanding	570,229,204	569,479,023
Effect of dilutive common equivalent shares - share options outstanding	719,274	1,243,994
Diluted earnings per equity share - weighted average number of equity shares and common equivalent shares outstanding	570,948,478	570,723,017

2.5 Segment reporting

IFRS 8, Operating Segments establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The company's operations predominantly relate to providing IT solutions, delivered to customers located globally, across various industry segments. The Chief Operating Decision Maker evaluates the company's performance and allocates resources based on an analysis of various performance indicators by industry classes and geographic segmentation of customers. Accordingly, segment information has been presented both along industry classes and geographic segmentation of customers. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

Industry segments for the company are primarily financial services comprising enterprises providing banking, finance and insurance services, manufacturing enterprises, enterprises in the telecommunications (telecom) and retail industries, and others such as utilities, transportation and logistics companies. Geographic segmentation is based on business sourced from that geographic region and delivered from both on-site and off-shore. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the Rest of the World comprising all other places except those mentioned above and India.

Revenue in relation to segments is categorized based on items that are individually identifiable to that segment, while expenditure is categorized in relation to the associated turnover of the segment. Allocated expenses of segments include expenses incurred for rendering services from the company's offshore software development centers and on-site expenses. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably. Management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and adjusted against the total income of the company.

Fixed assets used in the company's business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Geographical information on revenue and industry revenue information is collated based on individual customers invoiced or in relation to which the revenue is otherwise recognized.

2.5.1 Industry segments

(Dollars in millions)

Six months ended September 30, 2009	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$757	$453	$375	$311	$380	$2,276
Identifiable operating expenses	305	202	131	124	146	908
Allocated expenses	195	117	96	80	98	586
Segment profit	257	134	148	107	136	782
Unallocable expenses						94
Operating profit						688
Other income						15
Finance income						89
Profit before income taxes						792
Income tax expense						162
Net profit						$630
Depreciation and amortization						$94
Non-cash expenses other than depreciation and amortization						–

Six months ended September 30, 2008	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$803	$457	$460	$287	$364	$2,371
Identifiable operating expenses	343	196	164	121	148	972
Allocated expenses	219	124	124	78	100	645
Segment profit	241	137	172	88	116	754
Unallocable expenses						83
Operating profit						671
Other income						(46)
Finance income						89
Profit before income taxes						714
Income tax expense						86
Net profit						$628
Depreciation and amortization						$81
Non-cash expenses other than depreciation and amortization						–

2.5.2 Geographic segments

(Dollars in millions)

Six months ended September 30, 2009	North America	Europe	India	Rest of the World	Total
Revenues	$1,486	$545	$24	$221	$2,276
Identifiable operating expenses	593	217	8	90	908
Allocated expenses	383	140	6	57	586
Segment profit	510	188	10	74	782
Unallocable expenses					94
Operating profit					688
Other income					15
Finance income					89
Profit before income taxes					792
Income tax expense					162
Net profit					$630
Depreciation and amortization					$94
Non-cash expenses other than depreciation and amortization					–

Six months ended September 30, 2008	North America	Europe	India	Rest of the World	Total
Revenues	$1,470	$658	$29	$214	$2,371
Identifiable operating expenses	626	258	8	80	972
Allocated expenses	400	179	8	58	645
Segment profit	444	221	13	76	754
Unallocable expenses					83
Operating profit					671
Other income					(46)
Finance income					89
Profit before income taxes					714
Income tax expense					86
Net profit					$628
Depreciation and amortization					$81
Non-cash expenses other than depreciation and amortization					–

2.6 Litigation

The company is subject to legal proceedings and claims which have arisen in the ordinary course of its business. The company's management does not reasonably expect that legal actions, when ultimately concluded and determined, will have a material and adverse effect on the results of operations or the financial position of the company.

2.7 Tax contingencies

The company has received demands from the Indian taxation authorities for payment of additional tax of $42 million, including interest of $9 million, upon completion of their tax review for fiscal 2004 and fiscal 2005. The demands for fiscal 2004 and fiscal 2005 were received during fiscal 2007 and fiscal 2009, respectively. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the Income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover.

The company is contesting the demands and management and its tax advisors believe that its position will likely be upheld in the appellate process. No additional provision has been accrued in the financial statements for the tax demands raised. Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company's financial position and results of operations. The tax demand related to fiscal 2004 and 2005 is pending before the Commissioner of Income Tax (Appeals), Bangalore.

2.8 Expenses by nature

Cost of sales

(Dollars in millions)

	Three months ended September 30,		Six months ended September 30,
	2009	2008	2009	2008
Employee benefit costs	$544	$553	$1,066	$1,112
Depreciation and amortization	48	41	94	81
Travelling costs	23	35	47	78
Cost of software packages	16	21	37	40
Cost of technical sub-contractors	15	25	32	45
Consumables	–	2	–	3
Provision for post-sales client support	3	1	3	1
Operating lease payments	4	4	8	9
Communication costs	4	6	9	11
Repairs and maintenance	2	2	3	3
Other expenses	3	1	6	5
Total	$662	$691	$1,305	$1,388

Selling and marketing expenses

	Three months ended September 30,		Six months ended September 30,
	2009	2008	2009	2008
Employee benefit costs	$45	$48	$88	$90
Travelling costs	5	7	9	16
Branding and marketing	5	9	8	13
Commission	1	2	1	3
Operating lease payments	–	–	1	–
Communication costs	–	–	1	–
Consultancy and professional charges	1	2	2	3
Other expenses	–	–	–	4
Total	$57	$68	$110	$129

Administrative expenses

	Three months ended September 30,		Six months ended September 30,
	2009	2008	2009	2008
Employee benefit costs	$28	$25	$53	$49
Consultancy and professional charges	11	16	26	28
Office maintenance	9	9	18	18
Repairs and maintenance	4	4	7	6
Power and fuel	8	8	15	17
Communication costs	7	9	14	18
Commission	1	–	1	–
Travelling costs	4	9	8	16
Allowance for impairment of trade receivables	6	7	10	10
Rates and taxes	1	2	3	4
Insurance charges	1	1	3	3
Operating lease payments	2	1	4	3
Postage and courier	–	–	1	1
Printing and stationery	–	1	1	2
Other expenses	3	4	9	8
Total	$85	$96	$173	$183

EX-99.11

Exhibit 99.11
Standalone

AUDITORS' REPORT TO THE BOARD OF DIRECTORS OF INFOSYS TECHNOLOGIES LIMITED

We have audited the attached Balance Sheet of Infosys Technologies Limited ('the Company') as at 30 September 2009, the Profit and Loss Account of the Company for the quarter and half-year ended on that date and the Cash Flow Statement of the Company for the half-year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that:

(a)	we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(b)	in our opinion, proper books of account have been kept by the Company so far as appears from our examination of those books;
(c)	the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;
(d)	in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006, to the extent applicable; and
(e)	in our opinion and to the best of our information and according to the explanations given to us, the said accounts give a true and fair view in conformity with the accounting principles generally accepted in India:
	(i)	in the case of the Balance Sheet, of the state of affairs of the Company as at 30 September 2009;
	(ii)	in the case of the Profit and Loss Account, of the profit of the Company for the quarter and half-year ended on that date; and
	(iii)	in the case of the Cash Flow Statement, of the cash flows of the Company for the half-year ended on that date.

for  B S R & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
9 October 2009

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore

Balance Sheet as at	Schedule	September 30, 2009	March 31, 2009
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	1	287	286
Reserves and surplus	2	19,794	17,523
		20,081	17,809
APPLICATION OF FUNDS
FIXED ASSETS	3
Original cost		6,462	5,986
Less: Accumulated depreciation and amortization		2,579	2,187
Net book value		3,883	3,799
Add: Capital work-in-progress		412	615
		4,295	4,414
INVESTMENTS	4	4,152	1,005
DEFERRED TAX ASSETS, NET	5	152	102
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	6	3,133	3,390
Cash and bank balances	7	8,243	9,039
Loans and advances	8	3,572	3,164
		14,948	15,593
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	9	1,809	1,507
Provisions	10	1,657	1,798
NET CURRENT ASSETS		11,482	12,288
		20,081	17,809
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23		–
Note: The schedules referred to above are an integral part of the Balance Sheet.

As per our report attached
for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	S. Gopalakrishnan	S. D. Shibulal	Deepak M. Satwalekar
Partner Membership No. 32815	Chairman and Chief Mentor	Chief Executive Officer and Managing Director	Chief Operating Officer and Director	Director
	Prof. Marti G. Subrahmanyam	Claude Smadja	Rama Bijapurkar	Sridar A. Iyengar
	Director	Director	Director	Director
	David L. Boyles	Prof. Jeffrey S. Lehman	K.V.Kamath	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
October 9, 2009	Director	Director	Chief Financial Officer	Company Secretary

INFOSYS TECHNOLOGIES LIMITED

(in Rs. crore)

Profit and Loss account for the	Schedule	Quarter ended September 30,		Half-year ended September 30,
		2009	2008	2009	2008
Income from software services and products		5,201	5,066	10,305	9,582
Software development expenses	11	2,851	2,750	5,621	5,361
GROSS PROFIT		2,350	2,316	4,684	4,221
Selling and marketing expenses	12	234	256	449	472
General and administration expenses	13	317	342	663	627
		551	598	1,112	1,099
OPERATING PROFIT BEFORE DEPRECIATION		1,799	1,718	3,572	3,122
Depreciation		207	161	408	316
OPERATING PROFIT BEFORE TAX		1,592	1,557	3,164	2,806
Other income, net	14	232	77	497	208
NET PROFIT BEFORE TAX		1,824	1,634	3,661	3,014
Provision for taxation (refer to note 23.2.11)	15	386	244	759	362
NET PROFIT AFTER TAX		1,438	1,390	2,902	2,652
Balance Brought Forward		11,769	7,903	10,305	6,642
Less: Residual dividend paid		–	–	–	1
Dividend tax on the above		–	–	–	–
		11,769	7,903	10,305	6,641
AMOUNT AVAILABLE FOR APPROPRIATION		13,207	9,293	13,207	9,293
Interim dividend		573	572	573	572
Dividend tax		97	97	97	97
Amount transferred to general reserve		–	–	–	–
Balance in profit and loss account		12,537	8,624	12,537	8,624
		13,207	9,293	13,207	9,293
EARNINGS PER SHARE
Equity shares of par value Rs. 5/- each
Basic		25.08	24.28	50.64	46.34
Diluted		25.05	24.23	50.57	46.24
Number of shares used in computing earnings per share *
Basic		57,31,76,778	57,24,25,798	57,30,62,804	57,23,12,623
Diluted		57,38,80,145	57,35,54,906	57,37,82,078	57,35,56,617
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23
* Refer to note 23.2.19
Notes: The schedules referred to above are an integral part of the Profit and Loss account.

As per our report attached
for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	S. Gopalakrishnan	S. D. Shibulal	Deepak M. Satwalekar
Partner Membership No. 32815	Chairman and Chief Mentor	Chief Executive Officer and Managing Director	Chief Operating Officer and Director	Director
	Prof. Marti G. Subrahmanyam	Claude Smadja	Rama Bijapurkar	Sridar A. Iyengar
	Director	Director	Director	Director
	David L. Boyles	Prof. Jeffrey S. Lehman	K.V.Kamath	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
October 9, 2009	Director	Director	Chief Financial Officer	Company Secretary

(in Rs. crore)

Cash Flow statement for the	Schedule	Half-year ended September 30,
		2009	2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax		3,661	3,014
Adjustments to reconcile net profit before tax to cash provided by operating activities
(Profit)/ loss on sale of fixed assets		–	–
Depreciation		408	316
Interest and dividend income		(437)	(368)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		–	52
Changes in current assets and liabilities
Sundry debtors		257	(200)
Loans and advances	16	(115)	(458)
Current liabilities and provisions	17	334	496
		4,108	2,852
Income taxes paid	18	(764)	(291)
NET CASH GENERATED BY OPERATING ACTIVITIES		3,344	2,561
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets and change in capital work-in-progress	19	(289)	(600)
Investments in subsidiaries		(75)	(22)
Investments in other securities	20	(3,072)	–
Interest and dividend received	21	409	515
NET CASH USED IN INVESTING ACTIVITIES		(3,027)	(107)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital on exercise of stock options		40	38
Dividends paid including residual dividend		(772)	(1,559)
Dividend tax paid		(131)	(265)
NET CASH USED IN FINANCING ACTIVITIES		(863)	(1,786)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		–	(52)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(546)	616
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		10,289	7,689
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	22	9,743	8,305
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23
Note: The schedules referred to above are an integral part of the Cash Flow statement.

As per our report attached
for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	S. Gopalakrishnan	S. D. Shibulal	Deepak M. Satwalekar
Partner Membership No. 32815	Chairman and Chief Mentor	Chief Executive Officer and Managing Director	Chief Operating Officer and Director	Director
	Prof. Marti G. Subrahmanyam	Claude Smadja	Rama Bijapurkar	Sridar A. Iyengar
	Director	Director	Director	Director
	David L. Boyles	Prof. Jeffrey S. Lehman	K.V.Kamath	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
October 9, 2009	Director	Director	Chief Financial Officer	Company Secretary

(in Rs. crore, except as otherwise stated)

	Schedules to the Balance Sheet as at	September 30, 2009	March 31, 2009
1	SHARE CAPITAL
	Authorized
	Equity shares, Rs. 5/- par value
	60,00,00,000 (60,00,00,000) equity shares	300	300
	Issued, Subscribed and Paid Up
	Equity shares, Rs. 5/- par value*	287	286
	57,33,11,693 (57,28,30,043) equity shares fully paid up
	[Of the above, 53,53,35,478 (53,53,35,478) equity shares, fully paid up have been issued as bonus shares by capitalization of the general reserve]
		287	286
	Forfeited shares amounted to Rs. 1,500/- (Rs. 1,500/-)
	* For details of options in respect of equity shares, refer to note 23.2.10
	Also refer to note 23.2.19 for details of basic and diluted shares
2	RESERVES AND SURPLUS
	Capital reserve	6	6
	Share premium account - Opening balance	2,925	2,851
	Add: Receipts on exercise of employee stock options	39	64
	Income tax benefit arising from exercise of stock options	–	10
		2,964	2,925
	General reserve - Opening balance	4,287	3,705
	Add: Transferred from Profit and Loss account	–	582
		4,287	4,287
	Balance in Profit and Loss account	12,537	10,305
		19,794	17,523

Schedules to the Balance Sheet

3 FIXED ASSETS

(in Rs. crore, except as otherwise stated)

Description	Original cost				Depreciation and amortization				Net book value
	As at	Additions	Deductions/	As at	As at	For the	Deductions	As at	As at	As at
	April 1,	during the period	Retirement during	September 30,	April 1,	period	during	September 30,	September 30,	March 31,
	2009		the period	2009	2009		the period	2009	2009	2009
Land : Free-hold	172	–	–	172	–	–	–	–	172	172
Leasehold	101	42	–	143	–	–	–	–	143	101
Buildings*	2,863	207	–	3,070	532	99	–	631	2,439	2,331
Plant and machinery *	1,100	125	–	1,225	487	120	–	607	618	613
Computer equipment *	1,076	59	16	1,119	833	120	16	937	182	243
Furniture and fixtures *	658	59	–	717	321	69	–	390	327	337
Vehicles	4	–	–	4	2	–	–	2	2	2
Intangible Asset	12	–	–	12	12	–	–	12	–	–
	5,986	492	16	6,462	2,187	408	16	2,579	3,883	3,799
Previous year	4,508	1,822	344	5,986	1,837	694	344	2,187	3,799

Note: Buildings include Rs. 250/- being the value of 5 shares of Rs. 50/- each in Mittal Towers Premises Co-operative Society Limited.
* Includes certain assets provided on operating lease to Infosys BPO, a subsidiary. Please refer to note 23.2.6 for details

(in Rs. crore, except as otherwise stated)

	Schedules to the Balance Sheet as at	September 30, 2009	March 31, 2009
4	INVESTMENTS*
	Long- term investments– at cost
	Trade (unquoted)
	Other investments	11	11
	Less: Provision for investments	11	11
		–	–
	Non-trade (unquoted)
	Subsidiaries
	Infosys BPO Limited**
	3,38,22,319 (3,38,22,319) equity shares of Rs. 10/- each, fully paid	659	659
	Infosys Technologies (China) Co. Limited	65	65
	Infosys Technologies (Australia) Pty Limited
	1,01,08,869 (1,01,08,869) equity shares of AUD 0.11 par value, fully paid	66	66
	Infosys Consulting, Inc.
	5,50,00,000 (4,50,00,000) common stock of USD 1.00 par value, fully paid	243	193
	Infosys Technologies, S. De R.L. De C.V.
	10,99,99,990 (5,99,99,990) shares of MXN 1.00 par value, fully paid	40	22
	Infosys Technologies Sweden AB
	1,000 equity shares of SEK 100 par value, fully paid	–	–
	Infosys Technologies DO Brasil LTDA
	27,07,500 shares of BRL 1.00 par value, fully paid	7	–
		1,080	1,005
	Current investments – at the lower of cost and fair value
	Non-trade (unquoted)
	Liquid mutual fund units	3,072	–
		4,152	1,005
	Aggregate amount of unquoted investments	4,152	1,005
	* Refer to note 23.2.15 for details of investments
	** Investments include 15,81,767 (16,04,867) options of Infosys BPO
5	DEFERRED TAX ASSETS / (LIABILITIES)
	Fixed assets	160	118
	Sundry debtors	16	8
	Other assets	13	13
	Less: Deferred tax liability for branch profit tax	(37)	(37)
		152	102
6	SUNDRY DEBTORS*
	Debts outstanding for a period exceeding six months
	Unsecured
	Considered doubtful	79	39
	Other debts
	Unsecured
	Considered good**	3,133	3,390
	Considered doubtful	71	66
		3,283	3,495
	Less: Provision for doubtful debts	150	105
		3,133	3,390
	* Includes dues from companies where directors are interested	7	8
	** Includes dues from subsidiaries (refer to note 23.2.7)	34	5
7	CASH AND BANK BALANCES
	Cash on hand	–	–
	Balances with scheduled banks **
	In current accounts *	181	101
	In deposit accounts	7,807	8,234
	Balances with non-scheduled banks **
	In current accounts	255	704
		8,243	9,039
	*Includes balance in unclaimed dividend account (refer to note 23.2.23.a)	3	2
	**Refer to note 23.2.12 for details of balances with scheduled and non-scheduled banks
8	LOANS AND ADVANCES
	Unsecured, considered good
	Loans to subsidiary (refer to note 23.2.7)	49	51
	Advances
	Prepaid expenses	30	27
	For supply of goods and rendering of services	7	6
	Advance to gratuity trust	–	–
	Withholding and other taxes receivable	225	149
	Others	6	4
		317	237
	Unbilled revenues	756	738
	Advance income taxes	275	268
	MAT credit entitlement (refer to note 23.2.11)	272	262
	Interest accrued but not due	29	1
	Loans and advances to employees
	Housing and other loans	39	43
	Salary advances	59	62
	Electricity and other deposits	34	37
	Rental deposits	12	13
	Deposits with financial institutions (refer to note 23.2.13)	1,757	1,503
	Mark-to-market gain on forward and options contracts	22	–
		3,572	3,164
	Unsecured, considered doubtful
	Loans and advances to employees	2	2
		3,574	3,166
	Less: Provision for doubtful loans and advances to employees	2	2
		3,572	3,164
9	CURRENT LIABILITIES
	Sundry creditors
	Goods and services *	49	35
	Accrued salaries and benefits
	Salaries	26	38
	Bonus and incentives	376	345
	For other liabilities
	Provision for expenses	448	381
	Retention monies	72	53
	Withholding and other taxes payable	286	206
	Mark-to-market loss on forward and options contracts	–	98
	Gratuity obligation - unamortised amount relating to plan amendment	27	29
	Others	10	3
		1,294	1,188
	Advances received from clients	5	5
	Unearned revenue	507	312
	Unclaimed dividend	3	2
		1,809	1,507
	*Includes dues to subsidiaries (refer to note 23.2.7)	49	21
10	PROVISIONS
	Proposed dividend	573	773
	Provision for
	Tax on dividend	97	131
	Income taxes *	637	575
	Unavailed leave	257	244
	Post-sales client support and warranties**	93	75
		1,657	1,798
	* Refer to note 23.2.11
	** Refer to note 23.2.20

(in Rs. crore, except as otherwise stated)

	Schedules to Profit and Loss account for the	Quarter ended September 30,		Half-year ended   September 30,
		2009	2008	2009	2008
11	SOFTWARE DEVELOPMENT EXPENSES
	Salaries and bonus including overseas staff expenses	2,194	2,081	4,343	4,054
	Overseas group health insurance	31	26	66	73
	Contribution to provident and other funds	64	51	123	97
	Staff welfare	5	22	12	32
	Technical sub-contractors - subsidiaries	293	225	534	435
	Technical sub-contractors - others	56	90	111	158
	Overseas travel expenses	76	109	153	203
	Visa charges and others	14	18	33	77
	Software packages
	For own use	65	80	154	142
	For service delivery to clients	5	6	16	22
	Communication expenses	13	16	26	29
	Computer maintenance	6	7	11	12
	Consumables	6	6	11	11
	Rent	5	6	12	13
	Provision for post-sales client support and warranties	18	7	16	3
		2,851	2,750	5,621	5,361
12	SELLING AND MARKETING EXPENSES
	Salaries and bonus including overseas staff expenses	179	171	350	315
	Overseas group health insurance	1	–	2	2
	Contribution to provident and other funds	1	–	2	1
	Staff welfare	1	2	1	3
	Overseas travel expenses	17	27	32	56
	Visa charges and others	1	–	1	1
	Traveling and conveyance	–	1	1	2
	Commission charges	4	5	6	11
	Brand building	18	29	30	43
	Professional charges	4	7	8	13
	Rent	3	4	6	7
	Marketing expenses	2	4	4	8
	Telephone charges	2	5	5	7
	Communication expenses	1	–	1	1
	Printing and stationery	–	1	–	1
	Advertisements	–	–	–	–
	Sales promotion expenses	–	–	–	1
		234	256	449	472
13	GENERAL AND ADMINISTRATION EXPENSES
	Salaries and bonus including overseas staff expenses	82	68	161	129
	Overseas group health insurance	–	–	–	–
	Contribution to provident and other funds	5	3	9	6
	Professional charges	45	64	109	109
	Telephone charges	29	37	57	68
	Power and fuel	31	33	62	64
	Traveling and conveyance	12	23	25	43
	Overseas travel expenses	2	5	4	9
	Visa charges and others	–	1	–	1
	Office maintenance	38	34	71	67
	Guest house maintenance*	1	–	2	1
	Insurance charges	5	4	12	9
	Printing and stationery	2	3	5	5
	Donations	3	7	23	12
	Rent	7	6	14	10
	Advertisements	1	2	1	3
	Repairs to building	8	7	17	12
	Repairs to plant and machinery	7	5	14	9
	Rates and taxes	7	8	13	16
	Professional membership and seminar participation fees	2	1	4	3
	Postage and courier	2	3	5	5
	Books and periodicals	–	–	1	1
	Provision for bad and doubtful debts	26	25	45	38
	Provision for doubtful loans and advances	–	–	–	–
	Commission to non-whole time directors	1	2	3	3
	Freight charges	–	–	–	–
	Bank charges and commission	1	1	1	1
	Research grants	–	–	5	2
	Auditor's remuneration
	Statutory audit fees	–	–	–	–
	Certification charges	–	–	–	–
	Others	–	–	–	–
	Out of pocket expenses	–	–	–	–
	Miscellaneous expenses	–	–	–	1
		317	342	663	627
	*For non training purposes
14	OTHER INCOME, NET
	Interest received on deposits with banks and others*	187	182	405	368
	Dividend received on investment in liquid mutual funds (non-trade unquoted)	22	–	32	–
	Miscellaneous income, net**	7	5	12	10
	Gains / (losses) on foreign currency, net	16	(110)	48	(170)
		232	77	497	208
	*includes tax deducted at source	15	65	63	75
	**refer to note 23.2.6 and note 23.2.14
15	PROVISION FOR TAXATION
	Income taxes*	438	314	819	495
	MAT credit entitlement	(10)	(60)	(10)	(117)
	Deferred taxes	(42)	(10)	(50)	(16)
		386	244	759	362
	*Refer to note 23.2.11

(in Rs. crore, except as otherwise stated)

	Schedules to Cash Flow statements for the	Half-year ended September 30,
		2009	2008
16	CHANGE IN LOANS AND ADVANCES
	As per the balance sheet*	3,572	2,806
	Less:Gratuity obligation - unamortised amount relating to plan amendment**	27	31
	Deposits with financial institutions included in cash and cash equivalents***	1,500	1,000
	Interest accrued but not due	29	39
	MAT credit entitlement	272	286
	Advance income taxes	275	150
		1,469	1,300
	Less:  Opening balance considered	1,354	842
		115	458
	* includes loans to subsidiary and net of gratuity transitional liability
	** refer to Note 23.2.21
	*** Excludes restricted deposits held with LIC of Rs. 257 crore (Rs.211 crore) for funding leave liability
17	CHANGE IN CURRENT LIABILITIES AND PROVISIONS
	As per the balance sheet	3,466	3,210
	Less: Unclaimed dividend	3	3
	Gratuity obligation - unamortised amount relating to plan amendment	27	31
	Provision for dividend	573	572
	Provision for dividend tax	97	97
	Provision for income taxes	637	520
		2,129	1,987
	Less: Opening balance considered	1,795	1,491
		334	496
18	INCOME TAXES PAID
	Charge as per the profit and loss account	759	362
	Add/(Less): Increase/(Decrease) in advance income taxes	7	(65)
	Increase/(Decrease) in deferred taxes	50	16
	Increase/(Decrease) in MAT credit entitlement	10	117
	(Increase)/Decrease in income tax provision	(62)	(139)
		764	291
19	PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS
	As per the balance sheet	492	587
	Less:  Opening capital work-in-progress	615	1,260
	Add:  Closing capital work-in-progress	412	1,273
		289	600
20	INVESTMENTS IN SECURITIES *
	As per the balance sheet	4,152	986
	Less: Investment in subsidiaries	75	22
	Opening balance considered	1,005	964
		3,072	–
	* Refer to note 23.2.15 for investment and redemptions
21	INTEREST AND DIVIDEND RECEIVED
	Interest and dividend income as per profit and loss account	437	368
	Add: Opening interest accrued but not due	1	186
	Less: Closing interest accrued but not due	29	39
		409	515
22	CASH AND CASH EQUIVALENTS AT THE END
	As per the balance sheet	8,243	7,305
	Add:Deposits with financial institution and body corporate (excluding interest             accrued and not due)*	1,500	1,000
		9,743	8,305
	* Excludes restricted deposits held with LIC of Rs. 257 crore (Rs.211 crore) for funding leave liability (refer to note 23.2.23b)

Schedules to the Financial Statements for the quarter and half-year ended September 30, 2009

23. Significant accounting policies and notes on accounts

Company overview

Infosys Technologies Limited ("Infosys" or "the Company") along with its majority-owned and controlled subsidiary, Infosys BPO Limited ("Infosys BPO") and wholly-owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited ("Infosys Australia"), Infosys Technologies (China) Co. Limited ("Infosys China"), Infosys Consulting Inc. ("Infosys Consulting"), Infosys Technologies S. de R. L. de C. V. ("Infosys Mexico"), Infosys Technologies (Sweden) AB. ("Infosys Sweden") and Infosys Tecnologia DO Brasil LTDA. ("Infosys Brasil") is a leading global technology services corporation. The Company provides end-to-end business solutions that leverage cutting-edge technology, thereby enabling clients to enhance business performance. The Company provides solutions that span the entire software lifecycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addi tion, the Company offers software products for the banking industry.

23.1. Significant accounting policies

23.1.1. Basis of preparation of financial statements

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). These financial statements should be read in conjunction with the annual financial statements for the year ended March 31, 2009. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

23.1.2. Use of estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage of completion which requires the Company to estimate the efforts expended to date as a proportion of the total efforts to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

23.1.3. Revenue recognition

Revenue is primarily derived from software development and related services and from the licensing of software products. Arrangements with customers for software development and related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price and fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized based upon the percentage of completion. When there is uncertainty as to measurement or ultimate collectability revenue recognition is postponed until such uncertainty is resolved. Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates.

Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized ratably over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts, which require significant implementation services, where revenue for the entire arrangement is recognized over the implementation period based upon the percentage-of-completion. Revenue from client training, support and other services arising due to the sale of software products is recognized as the related services are performed.

The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discount / incentive amount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount / incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts using a cumulative catchup approach. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

The Company presents revenues net of value-added taxes in its Profit and Loss account.

Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sale price and carrying value of the investment. Lease rentals are recognized ratably on a straight line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Company's right to receive dividend is established.

23.1.4. Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

23.1.4.a. Post-sales client support and warranties

The Company provides its clients with a fixed-period warranty for corrections of errors and telephone support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in cost of sales. The Company estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions.

23.1.4.b. Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.

23.1.5. Fixed assets, intangible assets and capital work-in-progress

Fixed assets are stated at cost, less accumulated depreciation and impairments, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets, and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

23.1.6. Depreciation and amortization

Depreciation on fixed assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Individual low cost assets (acquired for less than Rs. 5,000/-) are depreciated over a period of one year from the date of acquisition. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the other fixed assets as follows :

Buildings	15 years
Plant and machinery	5 years
Computer equipment	2-5 years
Furniture and fixtures	5 years
Vehicles	5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

23.1.7. Retirement benefits to employees

23.1.7.a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees' Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by the law. The Company recognizes the net obligation of the gratuity plan in the Balance Sheet as an asset or liability, respectively in accordance with Accounting Standard (AS) 15, "Employee Benefits". The Company's overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made, and historical returns. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuar ial assumptions are recognized in the Profit and Loss account in the period in which they arise.

23.1.7.b. Superannuation

Certain employees of Infosys are also participants in the superannuation plan ("the Plan") which is a defined contribution plan. Until March 2005, the Company made contributions under the Plan to the Infosys Technologies Limited Employees' Superannuation Fund Trust ("the Superannuation Trust"). The Company has no further obligations to the Plan beyond its monthly contributions. Effective April 1, 2005, a portion of the monthly contribution amount is paid directly to the employees as an allowance and the balance amount is contributed to the Superannuation Trust.

23.1.7.c. Provident Fund

Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a part of the contributions to the Infosys Technologies Limited Employees' Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

23.1.7.b. Compensated absences

The employees of the Company are entitled to compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is measured based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

23.1.8. Research and development

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably.

23.1.9. Foreign currency transactions

Foreign-currency denominated monetary assets and liabilities are translated at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the profit or loss account. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

23.1.10. Forward and options contracts in foreign currencies

The Company uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduce the risk or cost to the Company and the Company does not use those for trading or speculation purposes.

Effective April 1, 2008, the Company adopted AS 30, "Financial Instruments: Recognition and Measurement", to the extent that the adoption did not conflict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements.

Forward and options contracts are fair valued at each reporting date. The resultant gain or loss from these transactions are recognized in the profit or loss account. The Company records the gain or loss on effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the Profit and Loss account of that period. To designate a forward or options contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the Profit and Loss account. Currently hedges undertaken by the Company are all ineffective in nature and the resultant gain or loss consequent to fair valuation is recognized in the Profit and Loss account at each reporting date.

23.1.11. Income taxes

Income taxes are accrued in the same period that the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum alternate tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the Balance Sheet if there is convincing evidence that the Company will pay normal tax after the tax holiday period and the resultant asset can be measured reliably. The Company offsets, on a year on year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets in case of unabsorbed depreciation and carry forward business loss are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than those relating to unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to Profit and Loss account are credited to the share premium account.

23.1.12. Earnings per share

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

23.1.13. Investments

Trade investments are the investments made to enhance the Company's business interests. Investments are either classified as current or long-term based on Management's intention at the time of purchase. Current investments are carried at the lower of cost and fair value. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

23.1.14. Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

23.1.15. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

23.2. Notes on accounts

Amounts in the financial statements are presented in Rupees crore, except for per share data and as otherwise stated. Certain amounts do not appear due to rounding off, and are detailed in Note 23.3. All exact amounts are stated with the suffix "/-". One crore equals 10 million.

The previous period/ year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation.

23.2.1. Aggregate expenses

The aggregate amounts incurred on expenses are as follows :

in Rs. crore

	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Salaries and bonus including overseas staff expenses	2,455	2,320	4,854	4,498
Contribution to provident and other funds	70	54	134	104
Staff welfare	6	24	13	35
Overseas group health insurance	32	26	68	75
Overseas travel expenses	95	141	189	268
Visa charges and others	15	19	34	79
Traveling and conveyance	12	24	26	45
Technical sub-contractors - subsidiaries	293	225	534	435
Technical sub-contractors - others	56	90	111	158
Software packages			–	–
For own use	65	80	154	142
For service delivery to clients	5	6	16	22
Professional charges	49	71	117	122
Telephone charges	31	42	62	75
Communication expenses	14	16	27	30
Power and fuel	31	33	62	64
Office maintenance	38	34	71	67
Guest house maintenance*	1	–	2	1
Commission and earnout charges	4	5	6	11
Brand building	18	29	30	43
Rent	15	16	32	30
Insurance charges	5	4	12	9
Computer maintenance	6	7	11	12
Printing and stationery	2	4	5	6
Consumables	6	6	11	11
Donations	3	7	23	12
Advertisements	1	2	1	3
Marketing expenses	2	4	4	8
Repairs to building	8	7	17	12
Repairs to plant and machinery	7	5	14	9
Rates and taxes	7	8	13	16
Professional membership and seminar participation fees	2	1	4	3
Postage and courier	2	3	5	5
Provision for post-sales client support and warranties	18	7	16	3
Books and periodicals	–	–	1	1
Provision for bad and doubtful debts	26	25	45	38
Provision for doubtful loans and advances	–	–	–	–
Commission to non-whole time directors	1	2	3	3
Sales promotion expenses	–	–	–	1
Freight charges	–	–	–	–
Bank charges and commission	1	1	1	1
Auditor's remuneration
Statutory audit fees	–	–	–	–
Certification charges	–	–	–	–
Others	–	–	–	–
Out-of-pocket expenses	–	–	–	–
Research grants	–	–	5	2
Miscellaneous expenses	–	–	–	1
	3,402	3,348	6,733	6,460
* for non-training purposes

23.2.2. Capital commitments and contingent liabilities

in Rs. crore

	As at
Particulars	September 30, 2009		March 31, 2009
Estimated amount of unexecuted capital contracts (net of advances and deposits)		248		344
Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favour of various government authorities and others		3		3
Claims against the Company, not acknowledged as debts*		3		3
[Net of amount paid to statutory authorities Rs. 200 crore (Rs. 200 crore)]
	in million	in Rs. Crore	in million	in Rs. Crore
Forward contracts outstanding
In US$	$350	1,684	$245	1,243
In Euro	–	–	€20	135
In GBP	–	–	£15	109
Options contracts outstanding
In US$	$255	1,227	$173	877
In Euro	€6	42	–	–
In GBP	£6	46	–	–

* Claims against the Company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of Rs. 197 crore (Rs. 197 crore), including interest of Rs. 43 crore (Rs. 43 crore) upon completion of their tax review for fiscal 2004 and fiscal 2005, respectively. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The matter for fiscal 2004 and fiscal 2005 is pending before the Commissioner of Income tax (Appeals), Bangalore. The Company is contesting the demand and the Management including its tax advisors believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements f or the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company's financial position and results of operations.

As of the Balance Sheet date, the company's net foreign currency exposures that are not hedged by a derivative instrument or otherwise is Nil. (Rs. 1,136 crore as at March 31, 2009).

23.2.3. Quantitative details

The Company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

23.2.4. Imports (valued on the cost, insurance and freight basis)

in Rs. crore

Particulars	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Capital goods	15	83	36	122
Software packages	5	–	6	1
	20	83	42	123

23.2.5. Activity in foreign currency

in Rs. crore

Particulars	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Earnings in foreign currency (on receipts basis)
Income from software services and products	5,153	4,842	10,421	9,369
Interest received from banks & others	–	–	2	17
Expenditure in foreign currency (on payments basis)
Travel expenses (including visa charges)	82	118	174	268
Professional charges	36	31	63	57
Technical sub-contractors - subsidiaries	293	225	534	435
Salaries	1,478	1,413	2,933	2,728
Other expenditure incurred overseas for software development	240	276	259	434
Net earnings in foreign currency	3,024	2,779	6,460	5,464

23.2.6. Obligations on long-term, non-cancelable operating leases

The lease rentals charged during the period and maximum obligations on long-term, non-cancelable operating leases payable as per the rentals stated in the respective agreements are as follows:

in Rs. crore

	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Lease rentals recognized during the period	15	16	32	30

in Rs. crore

	As at
Lease obligations payable:	September 30, 2009	March 31, 2009
Within one year of the balance sheet date	47	46
Due in a period between one year and five years	144	154
Due after five years	23	30

The operating lease arrangements extend upto a maximum of ten years from their respective dates of inception and relates to rented overseas premises. Some of the lease agreements have a price escalation clause.

Fixed assets provided on operating lease to Infosys BPO, a subsidiary company, as at September 30, 2009 and March 31, 2009:

in Rs. crore

Particulars	Cost	Accumulated	Net book value
Buildings	59	19	40
	59	17	42
Plant and machinery	18	14	4
	18	12	6
Computer equipment	1	1	–
	1	1	–
Furniture and fixtures	3	2	1
	3	2	1
Total	81	36	45
	81	32	49

The aggregate depreciation charged on the above assets during the quarter and half-year ended September 30, 2009 amounted to Rs. 2 crore and Rs. 4 crore, respectively (Rs. 1 crore and Rs. 4 crore for the quarter and half-year ended September 30, 2008, respectively).

The rental income from Infosys BPO for the quarter and half-year ended September 30, 2009 amounted to Rs. 4 crore and Rs. 8 crore, respectively. (Rs. 4 crore and Rs. 8 crore for the quarter and half-year ended September 30, 2008, respectively.)

23.2.7. Related party transactions

List of related parties:

Name of subsidiaries	Country	Holding, as at
		September 30, 2009	March 31, 2009
Infosys BPO	India	99.98%	99.98%
Infosys Australia	Australia	100%	100%
Infosys China	China	100%	100%
Infosys BPO s. r. o *	Czech Republic	99.98%	99.98%
Infosys BPO (Poland) Sp Z.o.o *	Poland	99.98%	99.98%
Infosys BPO (Thailand) Limited *	Thailand	99.98%	99.98%
Mainstream Software Pty Limited**	Australia	100%	100%
Infosys Sweden ***	Sweden	100%	–
Infosys Brasil ****	Brazil	100%	–
Infosys Consulting *****	USA	100%	100%
Infosys Mexico #	Mexico	100%	100%
Infosys Consulting India Limited ##	India	100%	–

*	Infosys BPO s.r.o, Infosys BPO (Poland) Sp Z.o.o and Infosys BPO (Thailand) Limited are wholly owned subsidiaries of Infosys BPO.
**	Mainstream Software Pty Limited is a wholly owned subsidiary of Infosys Australia.
***	During the year ended March 31, 2009, the Company incorporated wholly-owned subsidiary, Infosys Technologies (Sweden) AB, which was capitalized on July 8, 2009.
****	On August 7, 2009 the Company incorporated wholly-owned subsidiary, Infosys Tecnologia DO Brasil LTDA. Additionally during the quarter ended September 30, 2009 the Company invested Rs. 7 crore (BRL 3 million) in the subsidiary.
*****	During the half-year ended September 30, 2009 the Company made an additional investment of Rs. 50 crore (USD 10 million) in Infosys Consulting, which is a wholly owned subsidiary. As of September 30, 2009 and March 31, 2009, the Company has invested an aggregate of Rs. 243 crore (USD 55 million) and Rs.193 crore (USD 45 million), respectively in the subsidiary.
#	During the quarter and half-year ended September 30, 2009 the Company made an additional investment of Rs 18 crore (Mexican Peso 50 million) in Infosys Mexico, which is a wholly owned subsidiary. As of September 30, 2009 and March 31, 2009 the Company has invested an aggregate of Rs. 40 crore (Mexican Peso 110 million) and Rs. 22 crore (Mexican Peso 60 million), respectively in the subsidiary.
##	On August 19, 2009 Infosys Consulting incorporated wholly-owned subsidiary, Infosys Consulting India Limited. Additionally during the quarter ended September 30, 2009 Infosys Consulting invested Rs. 1 crore in the subsidiary.

Infosys guarantees the performance of certain contracts entered into by Infosys BPO.

Details of amounts due to or due from as at September 30, 2009 and March 31, 2009 :

in Rs. crore

Particulars	As at
	September 30, 2009	March 31, 2009
Loans and advances
Infosys China	49	51
Sundry debtors
Infosys China	5	–
Infosys Australia	3	4
Infosys Mexico	1	1
Infosys Consulting	23	–
Infosys BPO (Including subsidiaries)	2	–
Sundry Creditors
Infosys China	11	4
Infosys Australia	13	16
Infosys BPO (Including subsidiaries)	4	1
Infosys Consulting	19	–
Infosys Sweden	2	–
Deposit taken for shared services
Infosys BPO	3	3

The details of the related party transactions entered into by the company and maximum dues from subsidiaries, in addition to the lease commitments described in note 23.2.6, for the quarter and half-year ended September 30, 2009 and September 30, 2008 are as follows:

in Rs. crore

Particulars	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Capital transactions:
Financing transactions
Infosys Consulting	–	22	50	22
Infosys Mexico	18	–	18	–
Infosys Brasil	7	–	7	–
Loans/Advances
Infosys China	–	–	–	9
Revenue transactions:
Purchase of services
Infosys Australia	156	120	292	243
Infosys China	29	18	57	32
Infosys Consulting	94	79	161	147
Infosys Sweden	4	–	5	–
Infosys Mexico	10	8	19	13
Purchase of shared services including facilities and personnel
Infosys BPO (Including subsidiaries)	11	6	30	11
Interest income
Infosys China	1	–	2	1
Sale of services
Infosys Australia	6	1	13	1
Infosys Consulting	9	–	10	4
Sale of shared services including facilities and personnel
Infosys BPO (Including subsidiaries)	17	11	32	24
Infosys Consulting	1	–	2	1
Maximum balances of loans and advances
Infosys Australia	42	42	42	42
Infosys China	49	44	51	44
Infosys Mexico	4	–	4	–
Infosys Consulting	27	26	27	26

During the quarter and half-year ended September 30, 2009, an amount of Nil and Rs. 20 crore (Rs. 5 crore and Rs. 10 crore for the quarter and half-year ended September 30, 2008) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

During the quarter and half-year ended September 30, 2009, an amount of Nil and Rs. 5 crore (Nil for the quarter and half-year ended September 30, 2008) has been granted to Infosys Science Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

23.2.8. Transactions with key management personnel

Key management personnel comprise directors and members of executive council.

Particulars of remuneration and other benefits paid to key management personnel during the quarter and half-year ended September 30, 2009 and September 30, 2008 have been detailed in Schedule 23.3 since the amounts are less than a crore.

23.2.9. Research and development expenditure

in Rs. crore

Particulars	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Capital	1	–	3	–
Revenue	85	51	200	97

23.2.10. Stock option plans

The Company has two Stock Option Plans.

1998 Stock Option Plan ("the 1998 Plan")

The 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January 1998, and is for issue of 1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A compensation committee comprising independent members of the Board of Directors administers the 1998 Plan. All options have been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan.

in Rs. crore

Number of options granted, exercised and forfeited during	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Options outstanding, beginning of period	7,52,637	12,98,838	9,16,759	15,30,447
Less: Exercised	1,66,822	75,213	2,91,184	2,75,602
Forfeited	10,049	7,680	49,809	38,900
Options outstanding, end of period	5,75,766	12,15,945	5,75,766	12,15,945

1999 Stock Option Plan ("the 1999 Plan")

In fiscal 2000, the company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in September 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The compensation committee administers the 1999 Plan. Options were issued to employees at an exercise price that is not less than the fair market value. The 1999 Plan lapsed on June 11, 2009, and consequently no further shares will be issued to employees under this plan.

in Rs. crore

Number of options granted, exercised and forfeited during	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Options outstanding, beginning of period	8,03,084	13,15,327	9,25,806	14,94,693
Less: Exercised	85,694	81,466	1,90,466	2,28,495
Forfeited	2,76,317	1,29,999	2,94,267	1,62,336
Options outstanding, end of period	4,41,073	11,03,862	4,41,073	11,03,862

The aggregate options considered for dilution are set out in note 23.2.19

Proforma accounting for stock option grants

Infosys applies the intrinsic value-based method of accounting for determining compensation cost for its stock-based compensation plan. Had the compensation cost been determined using the fair value approach, the Company's net profit and basic and diluted earnings per share as reported would have reduced to the proforma amounts as indicated :

in Rs. crore

Particulars	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Net profit :
As reported	1,438	1,390	2,902	2,652
Less: Stock-based employee compensation expense	–	2	–	4
Adjusted proforma	1,438	1,388	2,902	2,648
Basic earnings per share as reported	25.08	24.28	50.64	46.34
Proforma basic earnings per share	25.08	24.25	50.64	46.27
Diluted earnings per share as reported	25.05	24.23	50.57	46.24
Proforma diluted earnings per share	25.05	24.21	50.57	46.17

23.2.11. Income taxes

The provision for taxation includes tax liabilities in India on the company's global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries. Infosys has operations in Special Economic Zone (SEZ) and Software Technology Parks (STP). Income from STPs are exempt from tax for the earlier of 10 years commencing from the fiscal year in which the unit commences software development or March 31, 2011. Income from SEZs is fully tax exempt for the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling certain conditions. Pursuant to the changes in the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carried forward and set off against the future tax liabilities. Accordingly a sum of Rs. 272 crore and Rs. 262 crore was carried forward and shown under "Loans and Advances" in the Balance Sheet as at September 30, 2009 a nd March 31, 2009 respectively.

23.2.12. Cash and bank balances

Details of balances as on balance sheet dates with non-scheduled banks:-

in Rs. crore

Balances with non-scheduled banks	As at
	September 30, 2009	March 31, 2009
In Current accounts
ABN Amro Bank, Taiwan	1	2
Bank of America, USA	152	574
Citibank NA, Australia	19	33
Citibank NA, Singapore	4	7
Citibank NA, Thailand	1	1
Citibank NA, Japan	4	2
Citibank NA, New Zealand	1	–
Deutsche Bank, Belgium	3	6
Deutsche Bank, Germany	3	5
Deutsche Bank, Netherlands	7	1
Deutsche Bank, France	1	1
Deutsche Bank, Singapore	15	–
Deutsche Bank, Switzerland	1	–
Deutsche Bank, Switzerland U.S. dollor	4	–
Deutsche Bank, UK	25	58
Deutsche Bank, Spain	–	1
HSBC Bank, UK	1	7
Morgan Stanley Bank, USA	–	–
Royal Bank of Canada, Canada	10	5
Standard Chartered Bank, UAE	3	–
The Bank of Tokyo - Mitsunhishi UFJ,Ltd., Japan	–	1
	255	704

Details of balances as on balance sheet dates with scheduled banks:-

in Rs. crore

Balances with scheduled banks in India	As at
	September 30, 2009	March 31, 2009
In Current accounts
Citibank-Unclaimed dividend account	1	1
Deustche Bank	3	11
Deustche Bank-EEFC account in Euro	56	26
Deustche Bank-EEFC account in Swiss Franc	4	3
Deustche Bank-EEFC account in US dollar	100	11
HDFC Bank-Unclaimed dividend account	1	–
ICICI Bank	10	14
ICICI Bank-EEFC account in US dollar	5	34
ICICI bank-Unclaimed dividend account	1	1
	181	101

in Rs. crore

Balances with scheduled banks in India	As at
	September 30, 2009	March 31, 2009
In Deposit accounts
Andhra Bank	80	80
Bank of Baroda	781	781
Bank of Maharashtra	385	493
Barclays Bank	170	140
Canara Bank	996	794
Corporation Bank	235	335
DBS Bank	49	25
HSBC Bank	182	258
ICICI Bank	980	510
IDBI Bank	500	500
ING Vysya Bank	25	25
Indian Overseas Bank	68	–
Oriental Bank of commerce	95	–
Punjab National Bank	739	480
State Bank of Hyderabad	200	200
State Bank of India	1,278	2,083
State Bank of Mysore	356	500
Syndicate Bank	498	500
The Bank of Nova Scotia	10	350
Union Bank of India	85	85
Vijaya Bank	95	95
	7,807	8,234
Total cash and bank balances as per balance sheet	8,243	9,039

Details of maximum balances during the period with non-scheduled banks:-

in Rs. crore

Maximum balance with non-scheduled banks during the period	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
In current accounts
ABN Amro Bank, Taiwan	2	3	4	3
Bank of America, USA	566	495	634	495
Citibank NA, Australia	134	120	134	120
Citibank NA, New Zealand	1	–	1	–
Citibank NA, Singapore	8	24	45	24
Citibank NA, Japan	16	14	17	21
Citibank NA, Thailand	1	1	1	1
Deutsche Bank, Belgium	47	31	47	33
Deutsche Bank, Germany	31	20	31	26
Deutsche Bank, Netherlands	18	5	18	5
Deutsche Bank, France	6	5	6	5
Deutsche Bank, Spain	2	2	2	2
Deutsche Bank, Singapore	15	–	15	–
Deutsche Bank, Switzerland	16	36	16	36
Deutsche Bank, Switzerland US dollar	5	31	14	31
Deutsche Bank, UK	92	199	183	350
HSBC Bank, UK	2	8	8	8
Morgan Stanley Bank, USA	7	3	7	9
Nordbanken, Sweden	–	1	–	1
Royal Bank of Canada, Canada	22	21	22	21
Standard Chartered Bank, UAE	3		3
Svenska Handelsbanken, Sweden	3	1	3	3
The Bank of Tokyo - Mitsubishi UFJ,Ltd., Japan	2	1	2	6

23.2.13. Loans and advances

Deposits with financial institutions:

in Rs. crore

Particulars	As at
	September 30, 2009	March 31, 2009
HDFC Limited	1,500	1,250
Life Insurance Corporation of India (LIC)	257	253
	1,757	1,503

Maximum balance (including accrued interest) held as deposits with financial institutions and body corporate:

in Rs. crore

	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Deposits with financial institutions and body corporate:
HDFC Limited*	1,540	1,000	1,540	1,056
GE Capital Services India	–	271	–	271
Life Insurance Corporation of India	257	211	257	211

* Deepak M. Satwalekar, Director, is also a Director of HDFC Limited. Except as director in this financial institution, he has no direct interest in any transactions.

Deposit with LIC represents amount deposited to settle employee benefit obligations as and when they arise during the normal course of business. (refer to note 23.2.23.b.)

23.2.14. Fixed assets

Profit / (loss) on disposal of fixed assets during the quarter and half-year ended September 30, 2009 and 2008 is less than Rs. 1 crore and accordingly disclosed under note 23.3.

Depreciation charged to the profit and loss account includes a charge relating to assets costing less than Rs. 5,000/- each and other low value assets.

in Rs. crore

	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Depreciation charged during the period	27	4	52	5

The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of these agreements, the Company has the option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the value of the properties at the time of entering into the lease-cum-sale agreements. These amounts are disclosed as "Land - leasehold" under "Fixed assets" in the financial statements. Additionally, certain land has been purchased for which the company has possession certificate for which sale deeds are yet to be executed as at September 30, 2009.

23.2.15. Details of Investments

in Rs. crore

Particulars	As at
	September 30, 2009	March 31, 2009
Long- term investments
OnMobile Systems Inc., (formerly Onscan Inc.) USA
53,85,251 (53,85,251) common stock at USD 0.4348 each, fully paid, par value USD 0.001 each	9	9
Merasport Technologies Private Limited *
2,420 equity shares at Rs. 8,052 each, fully paid, par value Rs. 10 each	2	2
	11	11
Less: Provision for investment	11	11
	–	–

* During the year ended March 31, 2009, Infosys received 2,420 shares of Mera Sport Technologies Private Limited valued at Rs. 2 crore in lieu of provision of usage rights to the software developed by Infosys. The investment was fully provided for during the year ended March 31, 2009 based on dimunition other than temporary.

Current investments - Liquid mutual fund units

in Rs. crore

Particulars	Number of units as at		Amount as at
	September 30, 2009	March 31, 2009	September 30, 2009	March 31, 2009
Tata Floater Fund - Weekly Dividend	282,715,905	–	285	–
Kotak Floater Long Term Plan - Weekly Dividend	286,766,874	–	289	–
Reliance Medium Term Fund - Weekly Dividend Plan	167,818,695	–	287	–
Birla Sunlife Short Term Fund - Institutional - Fortnightly Dividend	230,957,734	–	234	–
ICICI Prudential Flexible Income Plan Premium - Weekly Dividend	272,162,489	–	287	–
HSBC Floating Rate Long Term Institutional Weekly Dividend Payout	57,834,130	–	65	–
IDFC Money Manager Fund - Treasury Plan - Super Institutional Plan C - Weekly Dividend	287,646,558	–	288	–
UTI Treasury Advantage Fund - Institutional Weekly Dividend Plan - Payout	2,857,115	–	286	–
HDFC Floating Rate Income Fund - Short Term	288,020,616	–	292	–
DWS Ultra Short Term Fund - Institutional Weekly Dividend	73,497,511	–	74	–
Principal Floating Rate Fund FMP-Institutional Option - Dividend Payout Weekly	110,977,804	–	111	–
SBI - SHF - Ultra Short Term Fund - Institutional Plan - Weekly Dividend Payout	287,747,358	–	290	–
Religare Ultra Short Term Fund - Institutional Weekly Dividend	283,478,377	–	284	–
			3,072	-
At cost			403	–
At fair value			2,669	–
			3,072	-

Details of investments in and disposal of securities during the quarter and half-year ended September 30, 2009 and September 30, 2008:

in Rs. crore

Particulars	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Investment in securities
Subsidiary- Infosys Consulting	–	22	50	22
Subsidiary- Infosys Mexico	18	–	18	–
Subsidiary - Infosys Brasil	7	–	7	–
Liquid mutual fund units	2,559	–	4,450	–
	2,584	22	4,525	22
Redemption / disposal of investment in securities
Liquid mutual fund units	639	–	1,378	–
	639	–	1,378	–
Net movement in investments	1,945	22	3,147	22

Investment purchased and sold during the half-year ended September 30, 2009 :

in Rs. crore

Name of the fund	Face Value Rs./-	Units	Cost
Birla Sunlife Short Term Fund - Institutional - Fortnightly Dividend	10	75,972,511.15	77
DSP Blackrock Strategic Bond Fund - Institutional Plan - Monthly Dividend	1,000	490,829.78	50
DBS Chola Freedom Income - Short Term Fund - Weekly Dividend	10	81,967,367.98	86
HDFC Floating Rate Income Fund - Short Term	10	54,233,678.13	55
ICICI Prudential Floating Rate Plan - D - Weekly Dividend	10	238,835,962.78	239
IDFC Money Manager Fund - Treasury Plan - Super Institutional Plan C Weekly Dividend	10	197,785,672.33	198
Reliance Medium Term Fund - Weekly Dividend Plan - D	10	2,924,746.28	5
UTI Treasury Advantage Fund - Institutional Weekly Dividend Payout	1000	1,851,457.99	186
HSBC Floating Rate Long Term Institutional Weekly Dividend Payout	10	76,486,725.211	86
DWS Ultra Short Term Fund - Institutional Weekly Dividend	10	392,770,332.47	396

Investment purchased and sold during the half-year September 30, 2008 : Nil

23.2.16. Segment reporting

The Company's operations predominantly relate to providing end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments. Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers.

The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the significant accounting policies.

Industry segments at the Company are primarily financial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, transportation and logistics companies.

Income and direct expenses in relation to segments is categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably. The Company believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and directly charged against total income.

Fixed assets used in the Company's business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made.

Customer relationships are driven based on the location of the respective client. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the Rest of the World comprising all other places except, those mentioned above and India.

Geographical revenues are segregated based on the location of the customer who is invoiced or in relation to which the revenue is otherwise recognized.

Industry Segments

Quarter ended September 30, 2009 and September 30, 2008:

in Rs. crore

	Financial	Manufacturing	Telecom	Retail	Others	Total
Revenues	1,781	967	778	778	897	5,201
	1,721	989	908	646	802	5,066
Identifiable operating expenses	761	453	334	317	376	2,241
	727	398	362	278	338	2,103
Allocated expenses	397	216	174	174	200	1,161
	423	243	223	159	197	1,245
Segmental operating income	623	298	270	287	321	1,799
	571	348	323	209	267	1,718
Unallocable expenses						207
						161
Operating income						1,592
						1,557
Other income (expense), net						232
						77
Net profit before taxes						1,824
						1,634
Income taxes						386
						244
Net profit after taxes						1,438
						1,390

Half-year ended September 30, 2009 and September 30, 2008:

in Rs. crore

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	3,505	1,962	1,599	1,493	1,746	10,305
	3,311	1,785	1,753	1,228	1,505	9,582
Identifiable operating expenses	1,489	897	655	611	721	4,373
	1,454	760	715	542	661	4,132
Allocated expenses	802	450	367	342	399	2,360
	805	434	426	299	364	2,328
Segmental operating income	1,214	615	577	540	626	3,572
	1,052	591	612	387	480	3,122
Unallocable expenses						408
						316
Operating income						3,164
						2,086
Other income (expense), net						497
						208
Net profit before taxes						3,661
						3,014
Income taxes						759
						362
Net profit after taxes						2,902
						2,652

Geographic Segments

Quarter ended September 30, 2009 and September 30, 2008:

in Rs. crore

	North America	Europe	India	Rest of the World	Total
Revenues	3,511	1,127	70	493	5,201
	3,189	1,351	62	464	5,066
Identifiable operating expenses	1,457	503	19	262	2,241
	1,351	534	8	210	2,103
Allocated expenses	784	251	16	110	1,161
	783	332	15	115	1,245
Segmental operating income	1,270	373	35	121	1,799
	1,055	485	39	139	1,718
Unallocable expenses					207
					161
Operating income					1,592
					1,557
Other income (expense), net					232
					77
Net profit before taxes					1,824
					1,634
Income taxes					386
					244
Net profit after taxes					1,438
					1,390

Quarter ended September 30, 2009 and September 30, 2008:

in Rs. crore

	North America	Europe	India	Rest of the World	Total
Revenues	6,870	2,332	119	984	10,305
	6,091	2,510	125	856	9,582
Identifiable operating expenses	2,855	977	37	504	4,373
	2,662	1,006	35	429	4,132
Allocated expenses	1,573	534	28	225	2,360
	1,480	610	30	208	2,328
Segmental operating income	2,442	821	54	255	3,572
	1,949	894	60	219	3,122
Unallocable expenses					408
					316
Operating income					3,164
					2,806
Other income (expense), net					497
					208
Net profit before taxes					3,661
					3,014
Income taxes					759
					362
Net profit after taxes					2,902
					2,652

23.2.17. Provision for doubtful debts

Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customer's ability to settle. The Company normally provides for debtor dues outstanding for 180 days or longer as at the Balance Sheet date. As at September 30, 2009 the company has provided for doubtful debts of Rs. 71 crore (Rs. 66 crore as at March 31, 2009) on dues from certain customers although the outstanding amounts were less than 180 days old, since the amounts were considered doubtful of recovery. The company pursues the recovery of the dues, in part or full.

23.2.18. Dividends remitted in foreign currencies

The Company remits the equivalent of the dividends payable to the holders of ADS (ADS holders) in Indian Rupees to the depository bank, which is the registered shareholder on record for all owners of the Company's ADSs. The depositary bank purchases the foreign currencies and remits dividends to the ADS holders.

Particulars of dividends remitted:

in Rs. crore

Particulars	Number of shares to which the dividends relate	Quarter ended September 30,		Half year ended September 30,
		2009	2008	2009	2008
Final dividend for fiscal 2009	10,73,97,313	–	–	145	–
Final dividend for fiscal 2008	10,95,11,049	–	–	–	79
Special dividend for fiscal 2008	10,95,11,049	–	–	–	219

23.2.19. Reconciliation of basic and diluted shares used in computing earnings per share

Particulars	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Number of shares considered as basic weighted average shares outstanding	57,31,76,778	57,24,25,798	57,30,62,804	57,23,12,623
Add: Effect of dilutive issues of shares/stock options	7,03,367	11,29,108	7,19,274	12,43,994
Number of shares considered as weighted average shares and potential shares outstanding	57,38,80,145	57,35,54,906	57,37,82,078	57,35,56,617

23.2.20 Provision for post-sales client support and warranties

The movement in the provision for post-sales client support and warranties is as follows :

in Rs. crore

Particulars	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Balance at the beginning	75	34	75	43
Provision recognized/(reversed)	18	7	16	3
Provision utilised	–	–	–	(5)
Exchange difference during the period	–	–	2	–
Balance at the end	93	41	93	41

Provision for post-sales client support is expected to be utilized over a period of 6 months to 1 year.

23.2.21. Gratuity Plan

The following table set out the status of the Gratuity Plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation and plan assets :

in Rs. crore

Particulars	As at
	September 30, 2009	March 31, 2009	March 31, 2008	March 31, 2007
Obligations at period beginning	256	217	221	180
Service Cost	41	47	47	44
Interest cost	9	15	16	14
Actuarial (gain)/ loss	(3)	–	(9)	–
Benefits paid	(13)	(23)	(21)	(17)
Amendment in benefit plans	–	–	(37)	–
Obligations at period end	290	256	217	221
Defined benefit obligation liability as at the balance sheet is fully funded by the company
Change in plan assets
Plans assets at period beginning, at fair value	256	229	221	167
Expected return on plan assets	12	16	18	16
Actuarial gain/ (loss)	–	5	2	3
Contributions	35	29	9	52
Benefits paid	(13)	(23)	(21)	(17)
Plans assets at period end, at fair value	290	256	229	221
Reconciliation of present value of the obligation and the fair value of the plan assets:
Fair value of plan assets at the end of the period	290	256	229	221
Present value of the defined benefit obligations at the end of the period	290	256	217	221
Asset recognized in the balance sheet	–	–	12	–
Assumptions
Interest rate	7.14%	7.01%	7.92%	7.99%
Estimated rate of return on plan assets	9.45%	7.01%	7.92%	7.99%
Weighted Expected rates of salary increase	7.27%	5.10%	5.10%	5.10%

in Rs. crore

	Quarter ended September 30,		Half year ended September 30,
	2009	2008	2009	2008
Gratuity cost for the period
Service cost	24	12	41	17
Interest cost	5	4	9	9
Expected return on plan assets	(6)	(5)	(12)	(10)
Actuarial (gain)/loss	(2)	(4)	(3)	(2)
Plan amendment amortization	(1)	(1)	(2)	(2)
Net gratuity cost	20	6	33	12
Actual return on plan assets	6	5	12	10

Gratuity cost, as disclosed above, is included under salaries and bonus and is segregated between software development expenses, selling and marketing expenses and general and administration expenses on the basis of number of employees.

As of September 30, 2009 and March 31, 2009, the plan assets have been primarily invested in government securtities. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by Rs. 37 crore, which is being amortised on a straight line basis to the net profit and loss account over 10 years representing the average future service period of the employees. The unamortized liability as at September 30, 2009 and March 31, 2009 amounted to Rs. 27 crore and Rs. 29 crore, respectively and disclosed under "Current Liabilities".

The company expects to contribute approximately Rs. 35 crore to the gratuity trust during fiscal 2010.

23.2.22.a Provident Fund

The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the Company's actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.

The company contributed Rs. 36 crore and Rs. 72 crore during the quarter and half-year ended September 30, 2009, respectively. (Rs. 34 crore and Rs. 66 crore during the quarter and half-year ended September 30, 2008, respectively).

23.2.22.b Superannuation

The company contributed Rs. 14 crore and Rs. 27 crore to the Superannuation Trust during the quarter and half-year ended September 30, 2009, respectively (Rs. 13 crore and Rs. 26 crore during the quarter and half-year ended September 30, 2008, respectively).

23.2.23 Cashflow statement

23.2.23.a Unclaimed dividend

The balance of cash and cash equivalents includes Rs. 3 crore as at September 30, 2009 (Rs. 2 crore as at March 31, 2009) set aside for payment of dividends.

23.2.23.b Restricted cash

Deposits with financial institutions and body corporate as at September 30, 2009 include Rs. 257 crore (Rs. 253 crore as at March 31, 2009) deposited with Life Insurance Corporation of India to settle employee benefit obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and is hence not considered "cash and cash equivalents".

23.3 Details of rounded off amounts

The financial statements are represented in Rs. crore as per the approval received from Department of Company Affairs (DCA) earlier. Those items which were not represented in the financial statement due to rounding off to the nearest Rs. crore are given as follows :

Balance Sheet Items

in Rs. crore

Schedule	Description	As at
		September 30, 2009	March 31, 2009
3	Fixed assets
	Vehicles
	Addition during the period	0.50	1.04
	Deletion during the period from original cost	0.30	–
	Depreciation and amortisation	0.35	0.57
	Deletion during the period from depreciation	0.04	–
4	Investments
	Investment in Infosys Sweden	0.06	–
7	Cash on Hand	–	0.01
23.2.7	Related party transactions
	Debtors
	Infosys BPO s.r.o.	0.18	0.02
	Infosys China	5.42	0.16
	Infosys Consulting	22.81	0.34
	Infosys Thailand	0.01	0.01
	Infosys Mexico	0.57	0.58
	Infosys Sweden	0.01	0.06
	Infosys Brasil	0.25	–
	Creditors
	Infosys BPO s.r.o.	0.02	0.09
	Infosys Mexico	(0.05)	0.04
23.2.13	Balances with scheduled banks
	- HDFC Bank- Unclaimed dividend account	0.78	0.46
	- Deutsche Bank - EEFC account in United Kingdom Pound Sterling	0.01	0.05
	Balances with non-scheduled banks
	- ABN Amro Bank, Copenhagen, Denmark	0.26	0.06
	- Deutsche Bank, Zurich, Switzerland	0.45	0.22
	- Deutsche Bank, Zurich, Switzerland U.S. dollars	4.49	0.05
	- Deutsche Bank, Russia	0.43	–
	- Deutsche Bank, Spain	0.27	0.57
	- Bank of Baroda, Mauritius	0.01	0.06
	-Nordbanken, Sweden	0.33	0.05
	- The Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan	0.19	0.59
23.2.13	Maximum Balances with non-scheduled banks
	- ABN Amro Bank, Denmark	0.39	0.01
	- Deutsche Bank Russia	0.43	–
	-Nordbanken, Sweden	0.48	1.17

Profit & Loss Items

in Rs. crore

Schedule	Description	Quarter ended September 30,		Half-year ended September 30,
		2009	2008	2009	2008
12	Selling and Marketing expenses
	Printing & Stationery	(0.04)	0.24	0.34	0.48
	Office maintenance	0.01	0.11	0.07	0.20
	Computer maintenance	0.02	–	0.04	–
	Software Packages for own use	0.06	–	0.06	0.02
	Sales Promotion expenses	0.07	0.85	0.16	–
	Consumables	0.01	0.10	0.01	0.12
	Staff welfare	0.42	–	0.77	–
	Advertisements	(0.17)	–	(0.14)	–
	Comunication Expenses	0.35	0.38	0.58	–
	Insurance charges	0.01	–	0.01	–
	Rates and taxes	0.01	–	0.01	–

Profit & Loss Items

in Rs. crore

Schedule	Description	Quarter ended September 30,		Half year ended September 30,
		2009	2008	2009	2008
13	General and Administrative expenses
	Provision for doubtful loans and advances	0.10	029	0.10	0.30
	Overseas group health insurance	0.23	0.17	0.43	(0.05)
	Visa charges others	0.23	–	0.31	–
	Auditor's remuneration :
	Statutory audit fees	0.17	0.14	0.34	0.31
	Certification charges	0.01	0.01	0.03	0.02
	Out-of-pocket expenses	0.01	0.01	0.02	0.02
	Frieght charges	0.30	0.19	0.47	0.38
	Research grants	(0.32)	0.43	4.97	–
	Bank charges and commission	0.49	0.36	0.88	–
	Miscellaneous expenses	0.08	–	0.10	–
	Advertisements	0.47	1.53	1.02	2.93
	Residual dividend paid	–	–	0..25	0.72
	Additional dividend tax	–	–	0.04	0.12
23.2.1	Aggregate expenses
	Provision for doubtful loans and advances	0.01	0.29	010	0.30
	Sales promotion expenses	0.07	0.85	0.16	–
	Auditor's remuneration :
	Statutory audit fees	0.17	0.14	0.34	0.31
	Certification charges	0.01	0.01	0.03	0.02
	Out-of-pocket expenses	0.01	0.01	0.02	0.02
	Frieght charges	0.30	0.19	0.47	0.38
	Research grants	(0.32)	0.43	4.97	–
	Bank charges and commission	0.49	0.36	0.88	–
	Miscellaneous expenses	0.08	–	0.10	–
23.2.7	Related party transactions
	Revenue transactions
	Sale of services - Infosys BPO s.r.o.	0.08	–	0.16	–
	Sale of services - Infosys BPO (Thailand) Limited	–	–	0.07	–
	Puchase -Infosys China	0.20	–	0.38	–
23.2.15	Profit on disposal of fixed assets, included in miscellaneous income	–	0.05	–	0.06

Cash Flow Statement Items

in Rs. crore

Schedule	Description	Half yearended June 30,
		2009	2008
Cash Flow	Profit / (loss) on sale of fixed assets	–	0.06
Statement	Proceeds on disposal of fixed assets	–	0.08

Transactions with key management personnel

Key management personnel comprise directors and members of executive council.

Particulars of remuneration and other benefits paid to whole-time directors and members of executive council during the quarter and half-year ended September 30, 2009 and September 30, 2008 :

in Rs. crore

Name	Salary	Contributions to provident and other funds	Perquisites and incentives	Total Remuneration
Co-Chairman*
Nandan M. Nilekani	0.01	–	0.09	0.10
	0.08	0.03	0.04	0.15
	0.09	0.02	0.23	0.34
	0.14	0.04	0.22	0.40
Chief Executive Officer and Managing Director
S. Gopalakrishnan	0.08	0.02	0.13	0.23
	0.08	0.03	0.04	0.15
	0.16	0.04	0.29	0.49
	0.14	0.04	0.23	0.41
Chief Operating Officer and Director
S. D. Shibulal	0.08	0.02	0.12	0.22
	0.07	0.02	0.04	0.13
	0.16	0.04	0.25	0.45
	0.13	0.03	0.22	0.38
Whole-time Directors
K. Dinesh	0.08	0.02	0.13	0.23
	0.08	0.02	0.04	0.14
	0.16	0.04	0.29	0.49
	0.14	0.03	0.22	0.39
T. V. Mohandas Pai	0.09	0.02	0.42	0.53
	0.09	0.02	0.22	0.33
	0.18	0.04	1.68	1.90
	0.18	0.04	1.23	1.45
Srinath Batni	0.09	0.02	0.26	0.37
	0.09	0.03	0.12	0.24
	0.18	0.03	1.35	1.56
	0.17	0.04	0.87	1.08
Chief Financial Officer
V. Balakrishnan	0.07	0.02	1.08	1.17
	0.07	0.01	0.06	0.14
	0.14	0.04	1.61	1.79
	0.14	0.03	1.50	1.67
Executive Council Members
Ashok Vemuri	0.53	–	1.16	1.69
	0.47	–	0.09	0.56
	1.06	–	1.76	2.82
	0.90	–	1.55	2.45
Chandra Shekar Kakal	0.07	0.01	0.93	1.01
	0.07	0.02	0.05	0.14
	0.14	0.02	1.39	1.55
	0.13	0.03	0.90	1.06
B.G. Srinivas	0.47	–	1.39	1.86
	0.49	–	0.06	0.55
	0.92	–	1.87	2.79
	0.95	–	1.82	2.77
Subhash B. Dhar	0.06	0.02	0.72	0.80
	0.06	0.01	0.05	0.12
	0.12	0.03	1.11	1.26
	0.11	0.03	0.77	0.91

*Effective July 9, 2009, Mr. Nandan M Nilekani has relinquished the positions of Co-Chairman, Member of the Board and employee of Infosys.

Particulars of remuneration and other benefits of non-executive/ independent directors for the quarter and half-year ended September 30, 2009 and September 30, 2008 :

Name	Commission	Sitting fees	Reimbursement of expenses	Total remuneration
Non-Whole time Directors
Deepak M Satwalekar	0.17	–	–	0.17
	0.18	–	–	0.18
	0.33	–	–	0.33
	0.33	–	–	0.33
Prof.Marti G. Subrahmanyam	0.17	–	0.02	0.19
	0.18	–	–	0.18
	0.34	–	0.09	0.43
	0.33	–	0.15	0.48
Dr.Omkar Goswami	0.14	–	0.01	0.15
	0.15	–	0.01	0.16
	0.28	–	0.02	0.30
	0.27	–	0.02	0.29
Claude Smadja	0.16	–	0.10	0.26
	0.17	–	0.10	0.27
	0.32	–	0.15	0.47
	0.32	–	0.15	0.47
Rama Bijapurkar	0.13	–	0.01	0.14
	0.14	–	–	0.14
	0.26	–	0.02	0.28
	0.26	–	0.01	0.27
Sridar A. Iyengar	0.17	–	0.10	0.27
	0.18	–	0.05	0.23
	0.33	–	0.15	0.48
	0.33	–	0.14	0.47
David L. Boyles	0.16	–	0.04	0.20
	0.17	–	0.06	0.23
	0.32	–	0.07	0.39
	0.32	–	0.13	0.45
Prof. Jeffrey S. Lehman	0.16	–	–	0.16
	0.17	–	0.05	0.22
	0.32	–	0.13	0.45
	0.31	–	0.17	0.48
K.V.Kamath	0.12	–	0.01	0.13
	–	–	–	–
	0.23	–	0.01	0.24
	–	–	–	–
N. R. Narayana Murthy *	0.15	–	–	0.15
	0.16	–	–	0.16
	0.30	–	–	0.30
	0.29	–	–	0.29

* Non-executive chairman of the board and chief mentor.

Auditors' Report on Quarterly Financial Results and Year to Date Financial Results of Infosys Technologies Limited Pursuant to the Clause 41 of the Listing Agreement

To
The Board of Directors of Infosys Technologies Limited

We have audited the quarterly financial results of Infosys Technologies Limited ('the Company') for the quarter ended 30 September 2009 and the year to date financial results for the period from 1 April 2009 to 30 September 2009, attached herewith, being submitted by the Company pursuant to the requirement of Clause 41 of the Listing Agreement. These quarterly financial results as well as the year to date financial results have been prepared on the basis of the interim financial statements, which are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial results based on our audit of such interim financial statements, which have been prepared in accordance with the recognition and measurement principles laid down in Accounting Standard (AS) 25, Interim Financial Reporting, prescribed by the Companies (Accounting Standards) Rules, 2006 as per section 211 (3C) of the Companies Act, 1956 and other accounting principles generally acce pted in India.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion.

In our opinion and to the best of our information and according to the explanations given to us, these quarterly financial results as well as the year to date financial results:

(i)	are presented in accordance with the requirements of Clause 41 of the Listing Agreement in this regard; and;
(ii)	give a true and fair view of the net profit and other financial information for the quarter ended 30 September 2009 as well as the year to date results for the period from 1 April 2009 to 30 September 2009.

Further, we also report that we have, on the basis of the books of account and other records and information and explanations given to us by the management, also verified the number of shares as well as percentage of shareholdings in respect of aggregate amount of public shareholdings, as furnished by the Company in terms of Clause 35 of the Listing Agreement and found the same to be correct.

for  B S R & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
9 October 2009

EX-99.12

Exhibit 99.12
Consolidated

AUDITORS' REPORT TO THE BOARD OF DIRECTORS OF INFOSYS TECHNOLOGIES LIMITED

We have audited the attached consolidated Balance Sheet of Infosys Technologies Limited ('the Company') and its subsidiaries (collectively referred to as the 'Infosys Group') as at 30 September 2009, the consolidated Profit and Loss Account of the Infosys Group for the quarter and half-year ended on that date and the consolidated Cash Flow Statement of the Infosys Group for the half year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that the consolidated financial statements have been prepared by the Company's management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements and AS 25, Interim Financial Reporting, prescribed by the Companies (Accounting Standards) Rules, 2006.

In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a)	in the case of the consolidated Balance Sheet, of the state of affairs of the Infosys Group as at 30 September 2009;
(b)	in the case of the consolidated Profit and Loss account, of the profit of the Infosys Group for the quarter and half-year ended on that date; and
(c)	in the case of the consolidated Cash Flow Statement, of the cash flows of the Infosys Group for the half-year ended on that date.

for   B S R & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
9 October 2009

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Consolidated Balance Sheet as at	Schedule	September 30, 2009	March 31, 2009
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	1	287	286
Reserves and surplus	2	20,470	17,968
		20,757	18,254
MINORITY INTEREST		–	–
		20,757	18,254
APPLICATION OF FUNDS
FIXED ASSETS	3
Original cost		7,681	7,093
Less: Accumulated depreciation and amortization		2,858	2,416
Net book value		4,823	4,677
Add: Capital work-in-progress		420	677
		5,243	5,354
INVESTMENTS	4	3,222	–
DEFERRED TAX ASSETS, NET	5	182	126
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	6	3,366	3,672
Cash and bank balances	7	9,051	9,695
Loans and advances	8	3,718	3,279
		16,135	16,646
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	9	2,271	2,004
Provisions	10	1,754	1,868
NET CURRENT ASSETS		12,110	12,774
		20,757	18,254
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	24

Note: The schedules referred to above form an integral part of the consolidated Balance Sheet.

As per our report attached
for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	S. Gopalakrishnan	S. D. Shibulal	Deepak M. Satwalekar
Partner Membership No. 32815	Chairman and Chief Mentor	Chief Executive Officer and Managing Director	Chief Operating Officer and Director	Director
	Prof. Marti G. Subrahmanyam	Claude Smadja	Rama Bijapurkar	Sridar A. Iyengar
	Director	Director	Director	Director
	David L. Boyles	Prof. Jeffrey S. Lehman	K.V.Kamath	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
October 9, 2009	Director	Director	Chief Financial Officer	Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except per share data

Consolidated Profit and Loss account for the	Schedule	Quarter ended September 30,		Half-year ended September 30,
		2009	2008	2009	2008
Income from software services, products and business process management		5,585	5,418	11,057	10,272
Software development and business process management expenses	11	2,963	2,891	5,878	5,645
GROSS PROFIT		2,622	2,527	5,179	4,627
Selling and marketing expenses	12	276	303	537	560
General and administration expenses	13	413	430	841	794
		689	733	1,378	1,354
OPERATING PROFIT BEFORE DEPRECIATION AND MINORITY INTEREST		1,933	1,794	3,801	3,273
Depreciation		232	177	454	346
OPERATING PROFIT BEFORE TAX AND MINORITY INTEREST		1,701	1,617	3,347	2,927
Other income, net	14	236	66	505	183
NET PROFIT BEFORE TAX AND MINORITY INTEREST		1,937	1,683	3,852	3,110
Provision for taxation (refer to note 24.2.8)	15	397	251	785	376
NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST		1,540	1,432	3,067	2,734
Minority interest		–	–	–	–
NET PROFIT AFTER TAX AND MINORITY INTEREST		1,540	1,432	3,067	2,734
Balance Brought Forward		12,087	8,129	10,560	6,828
Less: Residual dividend paid		–	–	–	1
Dividend tax on the above		–	–	–	–
		12,087	8,129	10,560	6,827
AMOUNT AVAILABLE FOR APPROPRIATION		13,627	9,561	13,627	9,561
Interim dividend		573	572	573	572
Dividend tax		97	97	97	97
Amount transferred to General Reserve		–	–	–	–
Balance in profit and loss account		12,957	8,892	12,957	8,892
		13,627	9,561	13,627	9,561
EARNINGS PER SHARE
Equity shares of par value Rs. 5/- each
Basic		26.86	25.02	53.52	47.78
Diluted		26.83	24.97	53.45	47.67
Number of shares used in computing earnings per share *
Basic		57,31,76,778	57,24,25,798	57,30,62,804	57,23,12,623
Diluted		57,38,80,145	57,35,54,906	57,37,82,078	57,35,56,617
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	24

* Refer to note 24.2.16

Notes:The schedules referred to above form an integral part of the consolidated Profit and Loss account.

As per our report attached
for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	S. Gopalakrishnan	S. D. Shibulal	Deepak M. Satwalekar
Partner Membership No. 32815	Chairman and Chief Mentor	Chief Executive Officer and Managing Director	Chief Operating Officer and Director	Director
	Prof. Marti G. Subrahmanyam	Claude Smadja	Rama Bijapurkar	Sridar A. Iyengar
	Director	Director	Director	Director
	David L. Boyles	Prof. Jeffrey S. Lehman	K.V.Kamath	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
October 9, 2009	Director	Director	Chief Financial Officer	Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Consolidated Cash Flow statement for the	Schedule	Half-year ended September 30,
		2009	2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax and minority interest		3,852	3,110
Adjustments to reconcile net profit before tax to cash provided by operating activities
(Profit)/ loss on sale of fixed assets		–	–
Depreciation		454	346
Interest and dividend income		(454)	(386)
Profit on sale of investments		–	(1)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		50	54
Effect of exchange differences on translation of subsidiaries		66	20
Changes in current assets and liabilities
Sundry debtors	16	306	(238)
Loans and advances	17	(158)	(455)
Current liabilities and provisions	18	311	481
		4,427	2,931
Income taxes paid	19	(795)	(329)
NET CASH GENERATED BY OPERATING ACTIVITIES		3,632	2,602
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets and change in capital work-in-progress	20	(343)	(728)
Payment for purchase of business, net of cash acquired		(1)	(9)
Payment for acquisition of shared service centre		–	(6)
Investments in/ disposal of securities	21	(3,222)	73
Proceeds from disposal of fixed assets		–	1
Interest and dividend received	22	428	530
NET CASH USED IN INVESTING ACTIVITIES		(3,138)	(139)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital on exercise of stock options		40	38
Dividends paid including residual dividend		(772)	(1,559)
Dividend tax paid		(131)	(265)
NET CASH USED IN FINANCING ACTIVITIES		(863)	(1,786)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		(50)	(54)
NET (DECREASE)/ INCREASE IN CASH AND CASH EQUIVALENTS		(419)	623
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		10,993	8,235
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	23	10,574	8,858
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	24

Note: The schedules referred to above form an integral part of the consolidated Cash flow statement.

As per our report attached
for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	S. Gopalakrishnan	S. D. Shibulal	Deepak M. Satwalekar
Partner Membership No. 32815	Chairman and Chief Mentor	Chief Executive Officer and Managing Director	Chief Operating Officer and Director	Director
	Prof. Marti G. Subrahmanyam	Claude Smadja	Rama Bijapurkar	Sridar A. Iyengar
	Director	Director	Director	Director
	David L. Boyles	Prof. Jeffrey S. Lehman	K.V.Kamath	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
October 9, 2009	Director	Director	Chief Financial Officer	Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except as otherwise stated

Schedules to the Consolidated Balance Sheet as at		September 30, 2009	March 31, 2009
1	SHARE CAPITAL
	Authorized
	Equity shares, Rs. 5/- par value
	60,00,00,000 (60,00,00,000) equity shares	300	300
	Issued, Subscribed and Paid Up
	Equity shares, Rs. 5/- par value*	287	286
	57,33,11,693 (57,28,30,043) equity shares fully paid up
	[Of the above, 53,53,35,478 (53,53,35,478) equity shares, fully paid up have been issued as bonus shares by capitalization of the general reserve]
		287	286
	Forfeited shares amounted to Rs.1,500/- (Rs.1,500/-)
	* For details of options in respect of equity shares, refer to note 24.2.7
	Also refer to note 24.2.16 for details of basic and diluted shares
2	RESERVES AND SURPLUS
	Capital reserve	6	6
	Foreign currency translation reserve	59	(7)
	Share premium account - As at April 1,	2,925	2,851
	Add: Receipts on exercise of employee stock options	39	64
	Income tax benefit arising from exercise of stock options	–	10
		2,964	2,925
	General reserve - As at April 1,	4,484	3,802
	Add: Transfer from Profit and Loss account	–	682
		4,484	4,484
	Balance in Profit and Loss account	12,957	10,560
		20,470	17,968

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

Schedules to the Consolidated Balance Sheet

3	FIXED ASSETS
										in Rs. crore, except as otherwise stated
	Particulars	Original cost				Depreciation and amortization				Net book value
		As at April 1, 2009	Additions/ Adjustments	Deletions/ Retirement/ Adjustments	As at September 30, 2009	As at April 1, 2009	For the period	Deletions/ Adjustments	As at September 30, 2009	As at September 30, 2009	As at March 31, 2009
	Goodwill	689	–	–	689	–	–	–	–	689	689
	Land: Free-hold	172	–	–	172	–	–	–	–	172	172
	Leasehold	113	41	–	154	–	–	–	–	154	113
	Buildings	2,913	239	–	3,152	535	102	–	637	2,515	2,378
	Plant and machinery	1,183	152	–	1,335	521	129	(1)	651	684	662
	Computer equipment	1,233	100	16	1,317	960	139	14	1,085	232	273
	Furniture and fixtures	720	71	1	790	359	78	(1)	438	352	361
	Leasehold improvements	54	1	–	55	28	6	–	34	21	26
	Vehicles	4	1	–	5	1	–	–	1	4	3
	Intellectual property right	12	–	–	12	12	–	–	12	–	–
		7,093	605	17	7,681	2,416	454	12	2,858	4,823	4,677
	Previous year	5,439	1,999	345	7,093	1,986	761	331	2,416	4,677

Note: Buildings include Rs. 250/- being the value of 5 shares of Rs. 50/- each in Mittal Towers Premises Co-operative Society Limited

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except as otherwise stated

Schedules to the Consolidated Balance Sheet as at		September 30, 2009	March 31, 2009
4	INVESTMENTS
	Long- term investments – at cost
	Trade (unquoted)
	Other investments	13	12
	Less: Provision made for investments	13	12
		–	–
	Current investments – at the lower of cost and fair value
	Non-trade (unquoted)
	Liquid mutual funds units *	3,222	–
		3,222	–
	Aggregate amount of unquoted investments	3,222	–
	* Refer note 24.2.11
5	DEFERRED TAX ASSETS / (LIABILITIES)
	Fixed assets	171	128
	Sundry debtors	16	8
	Others	32	27
	Less: Deferred tax liability for branch profit tax	(37)	(37)
		182	126
6	SUNDRY DEBTORS
	Debts outstanding for a period exceeding six months
	Unsecured
	Considered good	–	–
	Considered doubtful	84	40
	Other debts
	Unsecured
	Considered good*	3,366	3,672
	Considered doubtful	71	66
		3,521	3,778
	Less: Provision for doubtful debts	155	106
		3,366	3,672
	* Includes dues from companies where directors are interested	7	8
7	CASH AND BANK BALANCES
	Cash on hand	–	–
	Balances with scheduled banks **
	In current accounts *	234	124
	In deposit accounts	8,095	8,551
	Balances with non-scheduled banks **
	In deposit accounts	327	232
	In current accounts	395	788
		9,051	9,695
	*Includes balance in unclaimed dividend account (Refer note 24.2.21.a)	3	2
	**Refer to note 24.2.20 for details of balances with scheduled and non-scheduled banks
8	LOANS AND ADVANCES
	Unsecured, considered good
	Advances
	Prepaid expenses	37	35
	For supply of goods and rendering of services	16	15
	Advance to gratuity trust / provident fund trust	1	1
	Interest accrued and not due	32	6
	Withholding and other taxes receivable	246	167
	Others	20	8
		352	232
	Unbilled revenues	788	750
	Advance income taxes	283	274
	MAT credit entitlement (refer to note 24.2.8)	307	284
	Loans and advances to employees
	Housing and other loans	39	43
	Salary advances	75	74
	Electricity and other deposits	36	37
	Rental deposits	34	34
	Deposits with financial institutions (refer to note 24.2.9)	1,780	1,551
	Mark-to-market gain on forward and options contracts	24	–
		3,718	3,279
	Unsecured, considered doubtful
	Loans and advances to employees	2	3
		3,720	3,282
	Less: Provision for doubtful loans and advances to employees	2	3
		3,718	3,279
9	CURRENT LIABILITIES
	Sundry creditors
	Goods and services	10	27
	Accrued salaries and benefits
	Salaries	65	71
	Bonus and incentives	482	472
	For other liabilities
	Provision for expenses	723	666
	Retention monies	74	55
	Withholding and other taxes payable	303	218
	Mark-to-market loss on forward and options contracts	–	114
	Payable for acquisition of subsidiary	2	3
	Gratuity obligation - unamortised amount	27	29
	Others	15	11
		1,701	1,666
	Advances received from clients	7	5
	Unearned revenue	560	331
	Unclaimed dividend*	3	2
		2,271	2,004
	*Refer to note 24.2.21.a
10	PROVISIONS
	Proposed dividend	573	773
	Provision for
	Tax on dividend	97	131
	Income taxes*	659	581
	Unavailed leave	320	291
	Post-sales client support and warranties #	105	92
		1,754	1,868
	* Refer to note 24.2.8
	#Refer to note 24.2.17

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except as otherwise stated

Schedules to Consolidated Profit and Loss account for the		Quarter ended September 30,		Half-year ended September 30,
		2009	2008	2009	2008
11	SOFTWARE DEVELOPMENT AND BUSINESS PROCESS MANAGEMENT EXPENSES
	Salaries and bonus including overseas staff expenses	2,516	2,344	4,948	4,578
	Overseas group health insurance	32	27	68	74
	Contribution to provident and other funds	73	59	141	114
	Staff welfare	4	25	14	39
	Overseas travel expenses	110	155	229	335
	Traveling and conveyance	–	–	–	–
	Technical sub-contractors	72	113	154	198
	Software packages
	For own use	71	86	165	151
	For service delivery to clients	5	6	16	22
	Communication expenses	21	26	46	47
	Rent	18	18	38	37
	Computer maintenance	7	7	13	13
	Consumables	6	8	12	13
	Provision for post-sales client support and warranties	18	7	16	3
	Miscellaneous expenses	10	10	18	21
		2,963	2,891	5,878	5,645
12	SELLING AND MARKETING EXPENSES
	Salaries and bonus including overseas staff expenses	216	203	423	379
	Overseas group health insurance	1	1	2	3
	Contribution to provident and other funds	1	1	2	2
	Staff welfare	1	2	1	3
	Overseas travel expenses	20	34	40	68
	Traveling and conveyance	1	2	2	3
	Brand building	19	30	31	44
	Commission charges	4	5	6	11
	Professional charges	5	8	9	14
	Rent	3	4	7	8
	Marketing expenses	2	5	6	11
	Telephone charges	2	4	5	7
	Printing and stationery	–	1	1	1
	Advertisements	–	1	–	1
	Sales promotion	–	1	–	2
	Communication expenses	1	1	2	2
	Miscellaneous expenses	–	–	–	1
		276	303	537	560
13	GENERAL AND ADMINISTRATION EXPENSES
	Salaries and bonus including overseas staff expenses	127	101	244	200
	Overseas group health insurance	2	2	3	2
	Contribution to provident and other funds	5	4	10	8
	Staff welfare	–	–	–	–
	Overseas travel expenses	6	10	10	18
	Traveling and conveyance	16	26	31	49
	Telephone charges	34	43	67	79
	Professional charges	52	71	124	123
	Power and fuel	38	39	74	75
	Office maintenance	44	42	86	79
	Guesthouse maintenance	1	–	2	1
	Insurance charges	7	6	16	13
	Printing and stationery	2	4	6	7
	Rates and taxes	8	9	16	17
	Donations	4	7	24	12
	Rent	11	7	19	12
	Advertisements	–	2	1	3
	Professional membership and seminar participation fees	3	2	5	4
	Repairs to building	8	8	17	14
	Repairs to plant and machinery	8	6	15	10
	Postage and courier	2	3	6	6
	Books and periodicals	1	2	2	2
	Recruitment and training	1	1	2	3
	Provision for bad and doubtful debts	29	30	48	45
	Provision for doubtful loans and advances	–	1	–	1
	Commission to non-whole time directors	1	2	3	3
	Auditor's remuneration
	Statutory audit fees	1	1	1	1
	Bank charges and commission	1	–	1	1
	Freight charges	1	–	1	–
	Research grants	(1)	–	5	2
	Miscellaneous expenses	1	1	2	4
		413	430	841	794
14	OTHER INCOME, NET
	Interest received on deposits with banks and others*	195	190	421	383
	Dividend received on investment in liquid mutual funds (non-trade unquoted)	23	1	33	3
	Miscellaneous income, net (refer to note 24.2.10)	4	1	6	3
	Gains/ (losses) on foreign currency	14	(126)	45	(206)
		236	66	505	183
	*includes tax deducted at source	15	65	65	76
15	PROVISION FOR TAXATION
	Income taxes*	464	326	861	518
	MAT credit entitlement	(23)	(65)	(23)	(125)
	Deferred taxes	(44)	(10)	(53)	(17)
		397	251	785	376
	* Refer to note 24.2.8

 CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except as otherwise stated

Schedules to Consolidated Cash Flow statement for the		Half-year ended September 30,
		2009	2008
16	CHANGE IN SUNDRY DEBTORS
	As per the Balance Sheet	3,366	3,535
	Less: Opening balance considered	(3,672)	(3,297)
		(306)	238
17	CHANGE IN LOANS AND ADVANCES
	As per the Balance Sheet*	3,718	2,891
	Less: Gratuity obligation - unamortised amount relating to plan amendment **	(27)	(31)
	Deposits with financial institutions, included in cash and cash equivalents ***	(1,523)	(1,037)
	MAT credit entitlement	(307)	(300)
	Advance income taxes	(283)	(152)
	Interest accrued and not due	(32)	(42)
		1,546	1,329
	Less: Opening balance considered	(1,388)	(874)
		158	455
	* Net of gratuity transitional liability
	**Refer to note 24.2.18
	*** Excludes restricted deposits held with LIC of Rs.257 crore (Rs.211 crore) for funding leave liability
18	CHANGE IN CURRENT LIABILITIES AND PROVISIONS
	As per the Balance Sheet	4,025	3,637
	Less: Unclaimed dividend	(3)	(3)
	Gratuity obligation - unamortised amount relating to plan ammendment	(27)	(31)
	Payable for acquisition of subsidiary	(2)	(4)
	Provision for dividends	(573)	(572)
	Provision for tax on dividend	(97)	(97)
	Provision for income taxes	(659)	(525)
		2,664	2,405
	Less: Opening balance considered	(2,353)	(1,924)
		311	481
19	INCOME TAXES PAID
	Charge as per the Profit and Loss Account	785	376
	Add: Increase / (Decrease) in advance income taxes	9	(66)
	Increase / (Decrease) in deferred taxes	56	17
	Increase / (Decrease) in MAT credit entitlement	23	125
	Less: (Increase) / Decrease in income tax provision	(78)	(123)
		795	329
20	PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS
	Additions as per Balance Sheet*	600	668
	Less: Opening capital work-in-progress	(677)	(1,324)
	Add: Closing capital work-in-progress	420	1,384
		343	728
	*Excludes effect of exchange rate fluctuations of Rs.5 Crore, as at September 30, 2009
21	INVESTMENTS IN / (DISPOSAL OF) SECURITIES *
	As per the Balance Sheet	3,222	–
	Less: Profit on sale of liquid mutual funds	–	(1)
	Less: Opening balance considered	–	(72)
		3,222	(73)
	* Refer to note 24.2.11 for details of investments and redemptions
22	INTEREST AND DIVIDEND RECEIVED
	Interest and dividend income as per profit and loss account	454	386
	Add: Opening interest accrued but not due	6	186
	Less: Closing interest acrrued but not due	(32)	(42)
		428	530
23	CASH AND CASH EQUIVALENTS AT THE END
	As per the Balance Sheet	9,051	7,821
	Add: Deposits with financial institution and body corporate (excluding interest accrued and not due)**	1,523	1,037
		10,574	8,858
	** Excludes restricted deposits held with LIC of Rs. 257 crore (Rs. 211 crore) for funding leave liability

Schedules to the Consolidated Financial Statements for the quarter ended September 30, 2009

24. Significant accounting policies and notes on accounts

Company overview

Infosys Technologies Limited ("Infosys" or "the company") along with its majority owned and controlled subsidiary, Infosys BPO Limited ("Infosys BPO") and wholly owned and controlled subsidiaries, Infosys Technologies (Australia) Pty. Limited ("Infosys Australia"), Infosys Technologies (China) Co. Limited ("Infosys China"), Infosys Consulting, Inc.("Infosys Consulting"), Infosys Technologies S. De R.L. de C.V. ("Infosys Mexico"), Infosys Technologies (Sweden) AB ("Infosys Sweden") and Infosys Tecnologia Do Brasil LTDA. ("Infosys Brasil") is a leading global technology services corporation. The group of companies ("the Group") provides end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance. The Group provides solutions that span the entire software life cycle encompassing technical consulting, design, development, re-engineering, mainten ance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the Group offers software products for the banking industry, business consulting and business process management services.

24.1. Significant accounting policies

24.1.1. Basis of preparation of financial statements

The consolidated financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair value. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006 and guidelines issued by the Securities and Exchange Board of India (SEBI). These financial statements should be read in conjunction with the annual financial statements for the year ended March 31, 2009. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The consolidated financial statements are prepared in accordance with the principles and procedures required for the preparation and presentation of consolidated financial statements as laid down under the Accounting Standard (AS) 21, “Consolidated Financial Statements”. The financial statements of Infosys - the parent company, Infosys BPO, Infosys China, Infosys Australia, Infosys Mexico, Infosys Consulting and Infosys Sweden have been combined on a line-by-line basis by adding together book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and transactions and resulting unrealized gain/loss. The consolidated financial statements are prepared by applying uniform accounting policies in use at the Group. Minority interests have been excluded. Minority interests represent that part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the company.

24.1.2. Use of estimates

The preparation of the financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage-of-completion which requires the Group to estimate the efforts expended to date as a proportion of the total efforts to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the consolidated financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset other than goodwill is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in previous years.

24.1.3. Revenue recognition

Revenue is primarily derived from software development and related services, licensing of software products and business process management. Arrangements with customers are either on a fixed price, fixed timeframe or on a time and material basis.

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price, fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized based upon the percentage-of-completion. When there is uncertainty as to measurement or ultimate collectability revenue recognition is postponed until such uncertainty is resolved. Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current estimates.

Annual Technical Services revenue and revenue from fixed-price maintenance contracts are recognized ratably over the period in which services are rendered. Revenue from the sale of user licenses for software applications is recognized on transfer of the title in the user license, except in case of multiple element contracts, which require significant implementation services, where revenue for the entire arrangement is recognized over the implementation period based upon the percentage of completion. Revenue from client training, support and other services arising due to the sale of software products is recognized as the related services are performed.

The Group accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discount / incentive amount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount / incentive Also, when the level of discount varies with increases in levels of revenue transactions, the Group recognizes the liability based on its estimate of the customer's future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Group recognizes changes in the estimated amount of obligations for discounts using a cumulative catch-up approach. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

The Group presents revenues net of value-added taxes in its consolidated profit and loss account.

Profit on sale of investments is recorded on transfer of title from the Group and is determined as the difference between the sale price and carrying value of the investment. Lease rentals are recognized ratably on a straight line basis over the lease term. Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Group's right to receive dividend is established.

24.1.4. Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Group has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

24.1.4.a. Post-sales client support and warranties

The Group provides its clients with a fixed-period warranty for corrections of errors and call support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded and included in cost of sales The Group estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions.

24.1.4.b. Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.

24.1.5. Fixed assets, including goodwill, intangible assets and capital work-in-progress

Fixed assets are stated at cost, less accumulated depreciation and impairments, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Goodwill comprises the excess of purchase consideration over the fair value of the net assets of the acquired enterprise.

24.1.6. Depreciation and amortization

Depreciation on fixed assets is provided on the straight-line method based on useful lives of assets as estimated by the Management. Depreciation for assets purchased/sold during the period is proportionately charged. Individual low cost assets (acquired for less than Rs. 5,000/-) are depreciated over a period of one year from the date of acquisition. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Group for its use. Leasehold improvements are written off over the lower of the remaining primary period of lease or the life of the asset. Management estimates the useful lives for the other fixed assets as follows :

Buildings	15 years
Plant and machinery	5 years
Computer equipment	2-5 years
Furniture and fixtures	5 years
Vehicles	5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

24.1.7. Retirement benefits to employees

24.1.7.a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, Infosys provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan") covering eligible employees of the company and Infosys BPO. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Group.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The company fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees' Gratuity Fund Trust ("the Trust"). In case of Infosys BPO, contributions are made to the Infosys BPO's Employees' Gratuity Fund Trust. Trustees administer contributions made to the Trusts and contributions are invested in specific instruments, as permitted by the law. The Group recognizes the net obligation of the Gratuity plan in the consolidated Balance Sheet as an asset or liability, respectively in accordance with AS 15, “Employee Benefits”. The Group's overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made and historical returns. The di scount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the consolidated profit and loss account in the period in which they arise.

24.1.7.b. Superannuation

Certain employees of Infosys are also participants in the superannuation plan (“the Plan”) which is a defined contribution plan. Until March 2005, the Company made contributions under the Plan to the Infosys Technologies Limited Employees' Superannuation Fund Trust. The Company had no further obligations to the Plan beyond its monthly contributions. Certain employees of Infosys BPO and Infosys Australia were also eligible for superannuation benefit. Infosys BPO and Infosys Australia made monthly provisions under the superannuation plan based on a specified percentage of each covered employee's salary. Infosys BPO had no further obligations to the superannuation plan beyond its monthly provisions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

Effective April 1, 2005, a portion of the monthly contribution amount is paid directly to the employees as an allowance and the balance amount is contributed to the Infosys Superannuation Trust.

24.1.7.c. Provident fund

Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a part of the contributions to the Infosys Technologies Limited Employees' Provident Fund Trust. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

In respect of Infosys BPO, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Infosys BPO make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. Infosys BPO has no further obligations under the provident fund plan beyond its monthly contributions.

24.1.7.d. Compensated absences

The employees of the Group are entitled to compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is measured based on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

24.1.8. Research and development

Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably.

24.1.9. Foreign currency transactions

Foreign currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the profit or loss account. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

The functional currency of Infosys and Infosys BPO is the Indian Rupee. The functional currencies for Infosys Australia, Infosys China, Infosys Consulting, Infosys Mexico, Infosys Sweden and Infosys Brasil are their respective local currencies. The translation of financial statements of the foreign subsidiaries from the local currency to the functional currency of the Company is performed for Balance Sheet accounts using the exchange rate in effect at the Balance Sheet date and for revenue, expense and cash-flow items using a monthly average exchange rate for the respective periods and the resulting difference is presented as foreign currency translation reserve included in “Reserves and Surplus”. When a subsidiary is disposed off, in part or in full, the relevant amount is transferred to profit or loss.

24.1.10. Forward contracts and options in foreign currencies

The Group uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduce the risk or cost to the Group and the Group does not use those for trading or speculation purposes.

Effective April 1, 2008, the Group adopted AS 30, “Financial Instruments : Recognition and Measurement”, to the extent that the adoption did not conflict with existing accounting standards and other authoritative pronouncements of Company Law and other regulatory requirements.

Forward and options contracts are fair valued at each reporting date. The resultant gain or loss from these transactions is recognized in the profit or loss account. The Group records the gain or loss on effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are complete. On completion, the gain or loss is transferred to the consolidated Profit and Loss account of that period. To designate a forward or options contract as an effective hedge, management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. In the absence of a designation as effective hedge, a gain or loss is recognized in the consolidated Profit and Loss account. Currently, the hedges undertaken by the Group are all ineffective in nature and the resultant gain or loss consequent to fair valuation is recognized in the consolidated Profit and Loss account at each reporting date.

24.1.11.Income taxes

Income taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. MAT paid in accordance to the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the consolidated Balance Sheet if there is convincing evidence that the Group will pay normal tax after the tax holiday period and the resultant asset can be measured reliably. The Group offsets, on a year-on-year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The differences that result between the profit offered for income taxes and the profit as per the financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets in case of unabsorbed depreciation and carry forward business loss are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than those related to unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate applicable for the full fiscal year for each of the consolidated entities. Tax benefits of deductions earned on exercise of employee share options in excess of compensation charged to the consolidated Profit and Loss account are credited to the share premium account.

24.1.12. Earnings per share

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the consolidated financial statements by the Board of Directors.

24.1.13. Investments

Trade investments are the investments made to enhance the Group's business interests. Investments are either classified as current or long-term based on Management's intention at the time of purchase. Current investments are carried at lower of cost and fair value. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

24.1.14. Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Group considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

24.1.15. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated.

24.2. Notes on accounts

Amounts in the financial statements are presented in Rupees crore, except for per share data and as otherwise stated. Certain amounts do not appear due to rounding off, and are detailed in note 24.3. All exact amounts are stated with the suffix “/-”. One crore equals 10 million.

The previous period / year figures have been regrouped / reclassified, wherever necessary to conform to the current presentation.

24.2.1. Aggregate expenses

The aggregate amounts incurred on expenses are as follows:

in Rs. crore

	Quarter ended September 30,		Half-year ended  September 30,
	2009	2008	2009	2008
Salaries and bonus including overseas staff expenses	2,859	2,648	5,615	5,157
Overseas group health insurance	35	30	73	79
Contribution to provident and other funds	79	64	153	124
Staff welfare	5	27	15	42
Overseas travel expenses	136	199	279	421
Traveling and conveyance	17	28	33	52
Technical sub-contractors	72	113	154	198
Software packages
For own use	71	86	165	151
For service delivery to clients	5	6	16	22
Professional charges	57	79	133	137
Telephone charges	36	47	72	86
Communication expenses	22	27	48	49
Power and fuel	38	39	74	75
Office maintenance	44	42	86	79
Guesthouse maintenance*	1	–	2	1
Rent	32	29	64	57
Brand building	19	30	31	44
Commission and earnout charges	4	5	6	11
Insurance charges	7	6	16	13
Printing and stationery	2	5	7	8
Computer maintenance	7	7	13	13
Consumables	6	8	12	13
Rates and taxes	8	9	16	17
Advertisements	–	3	1	4
Donations	4	7	24	12
Marketing expenses	2	5	6	11
Professional membership and seminar participation fees	3	2	5	4
Repairs to building	8	8	17	14
Repairs to plant and machinery	8	6	15	10
Postage and courier	2	3	6	6
Provision for post-sales client support and warranties	18	7	16	3
Books and periodicals	1	2	2	2
Recruitment and training	1	1	2	3
Provision for bad and doubtful debts	29	30	48	45
Provision for doubtful loans and advances	–	1	–	1
Commission to non-whole time directors	1	2	3	3
Sales promotion expenses	–	1	–	2
Auditor's remuneration
Statutory audit fees	1	1	1	1
Bank charges and commission	1	–	1	1
Freight charges	1	–	1	–
Research grants	(1)	–	5	2
Miscellaneous expenses	11	11	20	26
	3,652	3,624	7,256	6,999

* For non-training purpose

24.2.2. Capital commitments and contingent liabilities

in Rs. crore

Particulars	As at
	September 30, 2009		March 31, 2009
Estimated amount of unexecuted capital contracts
(net of advances and deposits)		275		372
Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favour of various government authorities and others		18		17
Claims against the Company, not acknowledged as debts
[Net of amount paid to statutory authorities of Rs. 200 crore (Rs. 200 crore)*]		3		4
	in million	in Rs. crore	in million	in Rs. crore
Forward contracts outstanding
In US $	$370	1,780	$278	1,407
In Euro	€ 4	25	€ 27	179
In GBP	£5	38	£21	149
Options contracts outstanding
In US $	$273	1,313	$173	877
In Euro	€ 6	42	–	–
In GBP	£6	46	–	–

* Claims against the Company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of Rs. 197 crore (Rs. 197 crore), including interest of Rs. 43crore (Rs. 43 crore) upon completion of their tax review for fiscal 2004 and fiscal 2005, respectively. The tax demands are mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income tax Act. The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. The matter for fiscal 2004 and fiscal 2005 is pending before the Commissioner of Income tax (Appeals), Bangalore.The Company is contesting the demand and the Management including its tax advisors believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial sta tements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company's financial postion and results of operations.

24.2.3.Obligations on long-term, non-cancelable operating leases

The lease rentals charged for the quarter and half-year ended September 30, 2009 and September 30, 2008 and maximum obligations on long-term non-cancelable operating leases payable as per the rentals stated in the respective agreements:-

in Rs. crore

Particulars	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Lease rentals recognized during the period	32	29	64	57
				in Rs. crore
			As at
Lease obligations payable			September 30, 2009	March 31, 2009
Within one year of the balance sheet date			86	80
Due in a period between one year and five years			214	223
Due after five years			69	72

The operating lease arrangements extend upto a maximum of ten years from their respective dates of inception and relates to rented overseas premises and car rentals. Some of these lease agreements have price escalation clause.

24.2.4.Related party transactions

During the quarter and half-year ended September 30, 2009, an amount of Rs. 1 crore and Rs. 21 crore (Rs. 5 crore and Rs. 10 crore for the quarter and half-year ended September 30, 2008) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

During the quarter and half-year ended September 30, 2009, an amount of Nil and Rs. 5 crore (Nil for the quarter and half-year ended September 30, 2008) has been granted to Infosys Science Foundation, a not-for-profit foundation, in which certain directors of the Company are trustees.

24.2.5.Transactions with key management personnel

Particulars of remuneration and other benefits paid to key management personnel during the quarter and half-year ended September 30, 2009 and September 30, 2008 have been detailed in Schedule 24.3, since the amounts are less than a crore.

24.2.6.Research and development expenditure

in Rs. crore

Particulars	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Capital	1	–	3	–
Revenue	85	51	200	97

24.2.7.Stock option plans

The Company has two Stock Option Plans that are currently operational.

1998 Stock Option Plan (“the 1998 Plan”)

The 1998 Plan was approved by the Board of Directors in December 1997 and by the shareholders in January 1998, and is for issue of 1,17,60,000 ADSs representing 1,17,60,000 equity shares. All options under the 1998 Plan are exercisable for ADSs representing equity shares. A Compensation Committee comprising independent members of the Board of Directors administers the 1998 Plan. All options have been granted at 100% of fair market value. The 1998 Plan lapsed on January 6, 2008, and consequently no further shares will be issued to employees under this plan.

Number of options granted, exercised and forfeited during the	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Options outstanding, beginning of period	7,52,637	12,98,838	9,16,759	15,30,447
Less: Exercised	1,66,822	75,213	2,91,184	2,75,602
Forfeited	10,049	7,680	49,809	38,900
Options outstanding, end of period	5,75,766	12,15,945	5,75,766	12,15,945

1999 Stock Option Plan (“the 1999 Plan”)

In fiscal 2000, the Company instituted the 1999 Plan. The shareholders and the Board of Directors approved the plan in September 1999, which provides for the issue of 5,28,00,000 equity shares to the employees. The Compensation Committee administers the 1999 Plan. Options will be issued to employees at an exercise price that is not less than the fair market value. The 1999 Plan lapsed on June 11, 2009, and consequently no further shares will be issued to employees under this plan.

Number of options granted, exercised and forfeited during the	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Options outstanding, beginning of period	8,03,084	13,15,327	9,25,806	14,94,693
Less: Exercised	85,694	81,466	1,90,466	2,28,495
Forfeited	2,76,317	1,29,999	2,94,267	1,62,336
Options outstanding, end of period	4,41,073	11,03,862	4,41,073	11,03,862

The aggregate options considered for dilution are set out in note 24.2.16

Proforma Accounting for Stock Option Grants

Guidance note on "Accounting for employee share based payments" issued by Institute of Chartered Accountants of India establishes financial accounting and reporting principles for employee share based payment plans. The guidance note applies to employee share based payment plans, the grant date in respect of which falls on or after April 1, 2005.

As allowed by the guidance note, Infosys has elected to continue to apply the intrinsic value-based method of accounting described above, and has adopted the disclosure requirements of the guidance note "Accounting for employee share based payments". Had the compensation cost for Infosys's stock-based compensation plan been determined in a manner consistent with the fair value approach described in guidance note, the Company's net profit and basic and diluted earnings per share as reported would have reduced to the proforma amounts as indicated :

Particulars	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Net Profit:
As Reported	1,540	1,432	3,067	2,734
Less: Stock-based employee compensation expense	–	2	–	4
Adjusted Proforma	1,540	1,430	3,067	2,730
Basic Earnings per share as reported	26.86	25.02	53.52	47.78
Proforma Basic Earnings per share	26.86	24.98	53.52	47.70
Diluted Earnings per share as reported	26.83	24.97	53.45	47.67
Proforma Diluted Earnings per share	26.83	24.93	53.45	47.60

24.2.8.Income taxes

The provision for taxation includes tax liabilities in India on the Company's global income as reduced by exempt incomes and any tax liabilities arising overseas on income sourced from those countries. Infosys has operations in Special Economic Zone (SEZ) and Software Technology Parks (STP). Income from STPs are exempt from tax for the earlier of 10 years commencing from the fiscal year in which the unit commences software development or March 31, 2011. Income from SEZs are fully tax exempt for the first 5 years, 50% exempt for the next 5 years and 50% exempt for another 5 years subject to fulfilling certain conditions. Pursuant to the amendments in the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). MAT liability can be carried forward and set off against the future tax liabilities. Accordingly a sum of Rs. 307 crore and Rs. 284 crore was carried forward and disclosed under "Loans and Advances" in the Balanc e Sheet as at September 30, 2009 and March 31, 2009.

24.2.9. Loans and advances

in Rs. crore

Particulars	As at
	September 30, 2009	March 31, 2009
Deposits with financial institutions:
HDFC Limited*	1,523	1,298
Life Insurance Corporation of India	257	253
	1,780	1,551

* Deepak M. Satwalekar, Director, is also a Director of HDFC Limited. Except as director in this financial institution, he has no direct interest in any transactions.

Deposit with Life Insurance Corporation of India represents amount deposited to settle employee benefit obligations as and when they arise during the normal course of business. (Refer to note 24.2.21.b.)

24.2.10. Fixed assets

Profit / loss on disposal of fixed assets during the quarter and half-year ended September 30, 2009 and September 30, 2008 is less than Rs.1 crore and accordingly disclosed in note 24.3.

The Company has entered into lease-cum-sale agreements to acquire certain properties. In accordance with the terms of these agreements, the Company has the option to purchase the properties on expiry of the lease period. The Company has already paid 99% of the value of the properties at the time of entering into the lease-cum-sale agreements. These amounts are disclosed as “Land - leasehold” under “Fixed assets” in the financial statements. Additionally, certain land has been purchased for which the Company has possession certificate for which sale deeds are yet to be executed as at September 30, 2009.

24.2.11. Details of investments

Details of investments in and disposal of securities for the quarter and half-year ended September 30, 2009 and September 30, 2008:

in Rs. crore

Particulars	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Investment in securities
Liquid mutual fund units	2,832	96	4,800	258
	2,832	96	4,800	258
Redemption / Disposal of Investment in securities
Liquid mutual fund units	762	250	1,578	330
	762	250	1,578	330
Net movement in investment	2,070	(154)	3,222	(72)

24.2.12. Holding of Infosys in its subsidiaries

in Rs. crore

Name of the subsidiary		As at
	Country of incorporation	September 30, 2009	March 31, 2009
Infosys BPO	India	99.98%	99.98%
Infosys Australia	Australia	100%	100%
Infosys China	China	100%	100%
Infosys BPO s.r.o.*	Czech Republic	99.98%	99.98%
Infosys BPO (Poland) Sp Z.o.o *	Poland	99.98%	99.98%
Infosys BPO (Thailand) Limited *	Thailand	99.98%	99.98%
Mainstream Software Pty Limited**	Australia	100%	100%
Infosys Sweden ***	Sweden	100%	–
Infosys Brasil ****	Brazil	100%	–
Infosys Consulting *****	USA	100%	100%
Infosys Mexico #	Mexico	100%	100%
Infosys Consulting India Limited ##	India	100%	–

*	Infosys BPO s.r.o, Infosys BPO (Poland) Sp Z.o.o and Infosys BPO (Thailand) Limited are wholly owned subsidiaries of Infosys BPO.
**	Mainstream Software Pty. Limited is a wholly owned subsidiary of Infosys Australia.
***	During the year ended March 31, 2009, the Company incorporated wholly-owned subsidiary, Infosys Technologies (Sweden) AB, which was capitalised on July 8, 2009.
****	On August 7, 2009 the Company incorporated wholly-owned subsidiary, Infosys Tecnologia DO Brasil LTDA. Additionally during the quarter ended September 30, 2009 the Company invested Rs. 7 crore (BRL 3 million) in the subsidiary.
*****	During the half-year ended September 30, 2009 the Company made an additional investment of Rs. 50 crore (USD 10 million) in Infosys Consulting, which is a wholly owned subsidiary. As of September 30, 2009 and March 31, 2009, the Company has invested an aggregate of Rs. 243 crore (USD 55 million) and Rs.193 crore (USD 45 million), respectively in the subsidiary.
#	During the quarter and half-year ended September 30, 2009 the Company made an additional investment of Rs 18 crore (Mexican Peso 50 million) in Infosys Mexico , which is a wholly owned subsidiary. As of September 30, 2009 and March 31, 2009 the Company has invested an aggregate of Rs. 40 crore (Mexican Peso 110 million) and Rs. 22 crore (Mexican Peso 60 million), respectively in the subsidiary.
##	On August 19, 2009 Infosys Consulting incorporated wholly-owned subsidiary, Infosys Consulting India Limited. Additionally during the quarter ended September 30, 2009 Infosys Consulting invested Rs. 1 crore in the subsidiary.

24.2.13. Provision for doubtful debts

Periodically, the Group evaluates all customer dues to the Group for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could effect the customer's ability to settle. The Group normally provides for debtor dues outstanding for 180 days or longer as at the Balance Sheet date. As at September 30, 2009, the Group has provided for doubtful debts of Rs. 71 crore (Rs. 66 crore as at March 31, 2009) on dues from certain customers although the outstanding amounts were less than 180 days old, since the amounts were considered doubtful of recovery. The Group pursues the recovery of the dues, in part or full.

24.2.14.  Segment reporting

The Group's operations predominantly relate to providing end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance, delivered to customers globally operating in various industry segments.  Accordingly, revenues represented along industry classes comprise the primary basis of segmental information set out in these financial statements. Secondary segmental reporting is performed on the basis of the geographical location of customers.

The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. These are as set out in the note on significant accounting policies.

Industry segments at the Group are primarily financial services comprising customers providing banking, finance and insurance services; manufacturing companies; companies in the telecommunications and the retail industries; and others such as utilities, transportation and logistics companies.

Income and direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainder of the costs are categorized in relation to the associated turnover of the segment.  Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying services are used interchangeably.  The Group believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as “unallocated” and directly charged against total income.

Fixed assets used in the business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments.  Accordingly, no disclosure relating to total segment assets and liabilities are made.

Customer relationships are driven based on the location of the respective client.  North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and the west), Ireland and the United Kingdom; and the Rest of the World comprising all other places except, those mentioned above and India.

Geographical revenues are segregated based on the location of the customer who is invoiced or in relation to which the revenue is otherwise recognized.

Industry segments

Quarter ended September 30, 2009 and September 30, 2008:

in Rs. crore

Particulars	Financial Services	Manufacturing	Telecom	Retail	Others	Total
Revenues	1,871	1,080	902	787	945	5,585
	1,804	1,090	1,034	652	838	5,418
Identifiable operating expenses	753	510	325	307	364	2,259
	737	441	358	268	330	2,134
Allocated expenses	467	270	225	196	235	1,393
	496	300	284	180	230	1,490
Segmental operating income	651	300	352	284	346	1,933
	571	349	392	204	278	1,794
Unallocable expenses						232
						177
Operating income						1,701
						1,617
Other income/(expense), net						236
						66
Net profit before taxes						1,937
						1,683
Income taxes						397
						251
Net profit after taxes						1,540
						1,432

Half-year ended September 30, 2009 and September 30, 2008:

in Rs. crore

Particulars	Financial Services	Manufacturing	Telecom	Retail	Others	Total
Revenues	3,678	2,201	1,824	1,510	1,844	11,057
	3,478	1,984	1,993	1,242	1,575	10,272
Identifiable operating expenses	1,481	984	635	598	712	4,410
	1,479	848	707	525	642	4,201
Allocated expenses	947	567	470	388	474	2,846
	947	541	543	339	428	2,798
Segmental operating income	1,250	650	719	524	658	3,801
	1,052	595	743	378	505	3,273
Unallocable expenses						454
						346
Operating income						3,347
						2,927
Other income/(expense), net						505
						183
Net profit before taxes						3,852
						3,110
Income taxes						785
						376
Net profit after taxes						3,067
						2,734

Geographic segments

Quarter ended September 30, 2009 and September 30, 2008:

in Rs. crore

Particulars	North America	Europe	India	Rest of the World	Total
Revenues	3,680	1,295	70	540	5,585
	3,327	1,526	68	497	5,418
Identifiable operating expenses	1,473	536	19	230	2,258
	1,372	583	7	172	2,134
Allocated expenses	918	323	17	136	1,394
	915	419	19	137	1,490
Segmental operating income	1,289	436	34	174	1,933
	1,040	524	42	188	1,794
Unallocable expenses					232
					177
Operating income					1,701
					1,617
Other income (expense), net					236
					66
Net profit before taxes					1,937
					1,683
Income taxes					397
					251
Net profit after taxes					1,540
					1,432

Half-year ended September 30, 2009 and September 30, 2008:

in Rs. crore

Particulars	North America	Europe	India	Rest of the World	Total
Revenues	7,220	2,644	119	1,074	11,057
	6,366	2,855	129	922	10,272
Identifiable operating expenses	2,882	1,055	39	433	4,409
	2,702	1,117	34	348	4,201
Allocated expenses	1,858	681	30	278	2,847
	1,733	777	36	252	2,798
Segmental operating income	2,480	908	50	363	3,801
	1,931	961	59	322	3,273
Unallocable expenses					454
					346
Operating income					3,347
					2,927
Other income (expense), net					505
					183
Net profit before taxes					3,852
					3,110
Income taxes					785
					376
Net profit after taxes					3,067
					2,734

24.2.15. Dividends remitted in foreign currencies

The Company remits the equivalent of the dividends payable to the holders of ADS (ADS holders) in Indian Rupees to the depository bank, which is the registered shareholder on record for all owners of the Company's ADSs. The depositary bank purchases the foreign currencies and remits dividends to the ADS holders.

Particulars of dividends remitted :

in Rs. crore

Particulars		Quarter ended September 30,		Half-year ended September 30,
	Number of shares to which the dividends relate	2009	2008	2009	2008
Final dividend for fiscal 2009	10,73,97,313	–	–	145	–
Final dividend for fiscal 2008	10,95,11,049	–	–	–	79
Special dividend for fiscal 2008	10,95,11,049	–	–	–	219

24.2.16. Reconciliation of basic and diluted shares used in computing earnings per share

	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Number of shares considered as basic weighted average shares outstanding	57,31,76,778	57,24,25,798	57,30,62,804	57,23,12,623
Add: Effect of dilutive issues of shares/stock options	7,03,367	11,29,108	7,19,274	12,43,994
Number of shares considered as weighted average shares and potential shares outstanding	57,38,80,145	57,35,54,906	57,37,82,078	57,35,56,617

24.2.17.Provision for post-sales client support and warranties

The movement in the provision for post-sales client support and warranties is as follows :

in Rs. crore

	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Balance at the beginning	85	46	92	53
Provision recognized/(reversed)	18	7	16	3
Provision utilized	2	1	(3)	(2)
Exchange differences during the period	–	–	–	–
Balance at the end	105	54	105	54

Provision for post-sales client support is expected to be utilized over a period of 6 months to 1 year.

24.2.18.Gratuity Plan

The following table set out the status of the gratuity plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation and plan assets :

in Rs. crore

	As at
	September 30, 2009	March 31, 2009	March 31, 2008	March 31, 2007
Obligations at period beginning	267	224	225	183
Service cost	44	51	50	45
Interest cost	9	16	17	14
Actuarial loss / (gain)	(2)	1	(8)	(1)
Benefits paid	(15)	(25)	(23)	(16)
Amendement in benefit plan	–	–	(37)	–
Obligations at period end	303	267	224	225
Defined benefit obligation liability as at the Balance Sheet is fully funded by the Group.
Change in plan assets
Plans assets at period beginning, at fair value	268	236	225	170
Expected return on plan assets	12	17	18	16
Actuarial gain	–	5	2	3
Contributions	38	35	14	54
Benefits paid	(15)	(25)	(23)	(18)
Plans assets at period end, at fair value	303	268	236	225
Reconciliation of present value of the obligation and the fair value of the plan assets :
Fair value of plan assets at the end of the period	303	268	236	225
Present value of the defined benefit obligations at the end of the period	303	267	224	225
Asset recognized in the Balance Sheet	–	1	12	–
Assumptions
Interest rate	7.14%	7.01%	7.92%	7.99%
Estimated rate of return on plan assets	9%-9.45%	7.01%	7.92%	7.99%
Weighted expected rate of salary increase	7.27%	5.10%	5.10%	5.10%

in Rs. Crore

	Quarter ended September 30,		Half-year ended September 30,
	2009	2008	2009	2008
Gratuity cost for the period
Service cost	25	11	44	17
Interest cost	4	5	9	10
Expected return on plan assets	(6)	(5)	(12)	(10)
Actuarial gain	1	(3)	(2)	(1)
Plan amendment amortization	(1)	(1)	(2)	(2)
Net gratuity cost	23	7	37	14
Actual return on plan assets	6	6	12	11

Gratuity cost, as disclosed above, is included under salaries and bonus and is segregated between software development expenses, selling and marketing expenses and general and administration expenses on the basis of number of employees.

As of September 30, 2009 and March 31, 2009, the plan assets have been primarily invested in government securities. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Effective July 1, 2007, the Company revised the employee death benefits provided under the gratuity plan, and included all eligible employees under a consolidated term insurance cover. Accordingly, the obligations under the gratuity plan reduced by Rs.37 crore, which is being amortised on a straight line basis to the net Profit and Loss account over 10 years representing the average future service period of the employees. The unamortized liability as at September 30, 2009 and March 31, 2009 amounted to Rs. 27 crore and Rs. 29 crore, respectively and is disclosed under "Current Liabilities".

The group expects to contribute approximately Rs. 38 crore to the gratuity trusts during fiscal 2010.

24.2.19.a. Provident Fund

The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the Company's actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.

The Company contributed Rs. 43 crore and Rs. 82 crore and Rs. 38 crore and Rs. 74 crore during the quarter and half-year ended September 30, 2009 and September 30, 2008 respectively.

24.2.19.b. Superannuation

The Company contributed Rs. 22 crore and Rs. 43 crore and Rs. 21 crore and Rs. 37 crore during the quarter and half-year ended September 30, 2009 and September 30, 2008 respectively.

24.2.20.Cash and bank balances

Details of balances as on Balance Sheet dates with scheduled banks :

in Rs. crore

Balances with scheduled banks in India	As at
	September 30, 2009	March 31, 2009
In current account
Citibank-Unclaimed dividend account	1	1
Citibank NA	1	–
Deustche Bank	5	13
Deustche Bank-EEFC account in Euro	58	27
Deustche Bank-EEFC account in Swiss Franc	3	3
Deustche Bank-EEFC account in United Kingdom Pound Sterling	3	–
Deustche Bank-EEFC account in U.S. dollar	101	12
HDFC Bank-Unclaimed dividend account	1	–
ICICI Bank	15	18
ICICI Bank-EEFC account in Euro	1	1
ICICI Bank-EEFC account in United Kingdom Pound Sterling	25	6
ICICI Bank-EEFC account in U.S. dollar	19	42
ICICI bank-Unclaimed dividend account	1	1
	234	124
In deposit account
Andhra Bank	80	80
Bank of Baroda	829	829
Bank of Maharashtra	385	537
Barclays Bank	170	140
Canara Bank	1,012	794
Corporation Bank	235	343
DBS Bank	49	25
HDFC Bank	16	–
HSBC Bank	182	283
ICICI Bank	980	560
IDBI Bank	550	550
ING Vysya Bank	25	53
Indian Overseas Bank	68	–
Oriental Bank of Commerce	129	–
Punjab National Bank	789	480
Standard Chartered Bank	–	38
State Bank of Hyderabad	200	200
State Bank of India	1,302	2,109
State Bank of Mysore	356	500
Syndicate Bank	498	500
The Bank of Nova Scotia	10	350
Union Bank of India	135	85
Vijaya Bank	95	95
	8,095	8,551

Details of balances as on Balance Sheet dates with non-scheduled banks :

in Rs. Crore

Balances with non-scheduled banks	As at
	September 30, 2009	March 31, 2009
In current account
ABN Amro Bank, China	12	6
ABN Amro Bank, China U.S. dollar	11	14
ABN Amro Bank, Taiwan	1	1
Bank of America, Mexico	21	2
Bank of America, USA	177	587
Banamex, Mexico	7	–
Citibank NA, Australia	20	33
Citibank NA, Brazil	4	–
Citibank NA, Czech Republic	3	–
Citibank NA, Czech Republic Euro account	2	3
Citibank NA, Czech Republic U.S. dollar	3	4
Citibank NA, Japan	4	2
Citibank NA, New Zealand	1	–
Citibank NA, Singapore	4	7
Citibank NA, Thailand	1	1
Deutsche Bank, Belgium	3	6
Deutsche Bank, France	1	1
Deutsche Bank, Germany	3	5
Deutsche Bank, Netherlands	7	1
Deustche Bank, Philiphines	1	1
Deustche Bank, Philiphines U.S. dollar	6	1
Deustche Bank, Poland	1	–
Deustche Bank, Poland Euro account	1	–
Deustche Bank, Singapore	15	–
Deutsche Bank, Spain	–	1
Deustche Bank, Thailand	1	2
Deustche Bank, Thailand U.S dollar	1	–
Deutsche Bank, UK	25	58
Deutsche Bank, Switzerland U.S.dollar	5	–
HSBC Bank, UK	1	8
ICICI Bank, UK	1	–
National Australia Bank Limited, Australia	27	30
National Australia Bank Limited, Australia U.S. dollar	11	7
Nordbanken, Sweden	1	–
Royal Bank of Canada, Canada	10	6
Standard Chartered Bank , UAE	3	–
The Bank of Tokyo-Mitsubishi UFJ Ltd., Japan	–	1
	395	788
In deposit accounts
Citibank N.A., Czech Republic	12	4
Deutsche Bank , Poland	7	–
National Australia Bank Limited, Australia	308	228
	327	232
Total Cash and bank balances as per balance sheet	9,051	9,695

24.2.21. Cash flow statement

24.2.21.a. Unclaimed dividend

The balance of cash and cash equivalents includes Rs. 3 crore as at September 30, 2009 (Rs. 2 crore as at March 31, 2009) set aside for payment of dividends.

24.2.21.b. Restricted cash

Deposits with financial institutions and body corporate as at September 30, 2009 include Rs. 257 crore (Rs. 253 crore as at March 31, 2009) deposited with Life Insurance Corporation of India to settle employee benefit obligations as and when they arise during the normal course of business. This amount is considered as restricted cash and is hence not considered "cash and cash equivalents".

24.3.Details of rounded off amounts

The financial statements are represented in Rs. crore as per the approval received from Department of Company Affairs (DCA) earlier. Those items which were not represented in the financial statement due to rounding off to the nearest Rs. crore are given as follows :

Balance Sheet Items

in Rs. crore

Schedule	Description	As at
		September 30, 2009	March 31, 2009
Balance Sheet
3	Fixed assets
	Deductions/retirements
	Leasehold improvements	–	0.04
	Plant and Machinery	0.04
	Vehicles
	Addition during the year	–	0.23
	Deletions during the period	0.04
	Depreciation provided during the year	0.35	–
	Depreciation on assets sold during the period	0.03	0.05
7	Cash on hand	0.12	0.07
	Scheduled banks-Current Accounts
	Citibank N.A.	–	0.12
	State Bank of India	0.01	0.01
	Non-scheduled banks-Current Account
	ABN Amro Bank, Denmark	0.26	0.06
	Banamex, Mexico	7.04	0.02
	Bank of Baroda, Mauritius	0.01	0.06
	China Merchants Bank, China	0.13	0.17
	Citibank N.A., Czech Republic	2.87	0.29
	Citibank N.A., Poland	–	0.01
	Deustche Bank, Moscow	0.42	–
	Deustche Bank, Poland	1.05	0.21
	Deustche Bank, Poland Euro account	1.12	0.12
	Deustche Bank, Spain	0.29	0.57
	Deutsche Bank,Zurich, Switzerland	0.44	0.22
	ICICI Bank, UK	0.87	0.09
	Nordbanken, Sweden	0.51	0.11
	PNC Bank, USA	0.02	0.03
	Shanghai Pudong Development Bank, China	0.05	0.01
	The Bank of Tokyo - Mitsubishi UFJ, Ltd.,Japan	0.16	0.59

Profit & Loss Items

in Rs. crore

Schedule	Description	Quarter ended September 30,		Half-year ended September 30,
		2009	2008	2009	2008
Profit and Loss
	Minority interest	0.01	–	0.02	–
	Provision for Investment	0.20	–	0.40	–
	Residual dividend paid	–	–	0.25	–
	Additional dividend tax	–	–	0.04	–
12	Selling and Marketing expenses
	Printing and stationery	–	0.30	–	0.60
	Office maintenance	0.03	0.12	0.09	0.23
	Consumables	0.02	0.11	0.03	0.14
	Software for own use	0.06	–	0.06	0.02
	Insurance charges	0.06	0.07	0.14	0.13
	Sales promotion	0.12	–	0.20	–
	Advertisements	(0.16)	–	(0.14)	–
	Miscellaneous expense	0.33	–	0.50	–
	Computer Maintenance	0.02	–	0.04	–
	Rates and Taxes	0.02	–	0.02	–
13	General and Administrative expenses
	Provision for doubtful loans and advances	0.07	–	0.17	–
	Auditor's remuneration :
	Statutory audit fees	–	–	–	–
	Out-of-pocket expenses	0.01	0.01	0.03	0.02
	Certification charges	0.01	0.01	0.02	0.02
	Bank charges and commission	–	–	–	–
	Freight charges	–	0.23	–	0.47
24.2.1	Aggregate expenses
	Provision for doubtful loans and advances	–	–	–	–
	Auditor's remuneration :
	Certification charges	0.01	0.01	0.03	0.02
	Out-of-pocket expenses	0.01	0.01	0.02	0.02
	Sales promotion	–	–	–	–
	Bank charges and commission	–	–	–	–
	Freight charges	–	0.23	–	0.47
24.2.10	Profit/ (Loss) on disposal of fixed assets, included in miscellaneous income	–	0.05	–	0.09

Cash Flow Statement Items

in Rs. crore

Schedule	Description	Half-year ended September 30,
		2009	2008
Cash Flow	Profit/ loss on sale of fixed assets	–	0.09
Statement	Proceeds on disposal of fixed assets	–	0.25

Transactions with key management personnel

Key management personnel comprise directors and members of the executive council.

Particulars of remuneration and other benefits paid to whole-time directors and members of executive council during the quarter and half-year ended September 30, 2009 and September 30, 2008 are as follows:

in Rs. crore

Name	Salary	Contributions to provident and other funds	Perquisites and incentives	Total Remuneration
Co-Chairman*
Nandan M. Nilekani	0.01	–	0.09	0.10
	0.08	0.03	0.04	0.15
	0.09	0.02	0.23	0.34
	0.14	0.04	0.22	0.40
Chief Executive Officer and Managing Director
S. Gopalakrishnan	0.08	0.02	0.13	0.23
	0.08	0.03	0.04	0.15
	0.16	0.04	0.29	0.49
	0.14	0.04	0.23	0.41
Chief Operating Officer and Director
S. D. Shibulal	0.08	0.02	0.12	0.22
	0.07	0.02	0.04	0.13
	0.16	0.04	0.25	0.45
	0.13	0.03	0.22	0.38
Whole-time directors
K. Dinesh	0.08	0.02	0.13	0.23
	0.08	0.02	0.04	0.14
	0.16	0.04	0.29	0.49
	0.14	0.03	0.22	0.39
T. V. Mohandas Pai	0.09	0.02	0.42	0.53
	0.09	0.02	0.22	0.33
	0.18	0.04	1.68	1.90
	0.18	0.04	1.23	1.45
Srinath Batni	0.09	0.02	0.26	0.37
	0.09	0.03	0.12	0.24
	0.18	0.03	1.35	1.56
	0.17	0.04	0.87	1.08
Chief Financial Officer
V. Balakrishnan	0.07	0.02	1.08	1.17
	0.07	0.01	0.06	0.14
	0.14	0.04	1.61	1.79
	0.14	0.03	1.50	1.67
Executive Council Members
Ashok Vemuri	0.53	–	1.16	1.69
	0.47	–	0.09	0.56
	1.06	–	1.76	2.82
	0.90	–	1.55	2.45
Chandra Shekar Kakal	0.07	0.01	0.93	1.01
	0.07	0.02	0.05	0.14
	0.14	0.02	1.39	1.55
	0.13	0.03	0.90	1.06
B.G. Srinivas	0.47	–	1.39	1.86
	0.49	–	0.06	0.55
	0.92	–	1.87	2.79
	0.95	–	1.82	2.77
Subhash B. Dhar	0.06	0.02	0.72	0.80
	0.06	0.01	0.05	0.12
	0.12	0.03	1.11	1.26
	0.11	0.03	0.77	0.91

*Effective July 9, 2009, Mr. Nandan M Nilekani has relinquished the positions of Co-Chairman, Member of the Board and employee of Infosys.

Particulars of remuneration and other benefits of non-executive/ independent directors for the quarter and half-year ended September 30, 2009 and September 30, 2008:

Name	Commission	Sitting fees	Reimbursement of expenses	Total Remuneration
Non-Whole time directors
Deepak M. Satwalekar	0.17	–	–	0.17
	0.18	–	–	0.18
	0.33	–	–	0.33
	0.33	–	–	0.33
Prof.Marti G. Subrahmanyam	0.17	–	0.02	0.19
	0.18	–	–	0.18
	0.34	–	0.09	0.43
	0.33	–	0.15	0.48
Dr.Omkar Goswami	0.14	–	0.01	0.15
	0.15	–	0.01	0.16
	0.28	–	0.02	0.30
	0.27	–	0.02	0.29
Claude Smadja	0.16	–	0.10	0.26
	0.17	–	0.10	0.27
	0.32	–	0.15	0.47
	0.32	–	0.15	0.47
Rama Bijapurkar	0.13	–	0.01	0.14
	0.14	–	–	0.14
	0.26	–	0.02	0.28
	0.26	–	0.01	0.27
Sridar A. Iyengar	0.20	–	0.10	0.30
	0.21	–	0.05	0.26
	0.39	–	0.15	0.54
	0.39	–	0.14	0.53
David L. Boyles	0.16	–	0.04	0.20
	0.17	–	0.06	0.23
	0.32	–	0.07	0.39
	0.32	–	0.13	0.45
Prof. Jeffrey S. Lehman	0.16	–	–	0.16
	0.17	–	0.05	0.22
	0.32	–	0.13	0.45
	0.31	–	0.17	0.48
K.V.Kamath	0.12	–	0.01	0.13
	–	–	–	–
	0.23	–	0.01	0.24
	–	–	–	–
N. R. Narayana Murthy*	0.15	–	–	0.15
	0.16	–	–	0.16
	0.30	–	–	0.30
	0.29	–	–	0.29

* Non-executive chairman of the board and chief mentor.

Auditors' Report on Consolidated Quarterly Financial Results and Consolidated Year to Date Financial Results of Infosys Technologies Limited Pursuant to the Clause 41 of the Listing Agreement

To
The Board of Directors of Infosys Technologies Limited

We have audited the consolidated quarterly financial results of Infosys Technologies Limited ('the Company') for the quarter ended 30 September 2009 and the consolidated year to date financial results for the period from 1 April 2009 to 30 September 2009, attached herewith, being submitted by the Company pursuant to the requirement of Clause 41 of the Listing Agreement. These consolidated quarterly financial results as well as the consolidated year to date financial results have been prepared from consolidated interim financial statements, which are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial results based on our audit of such consolidated interim financial statements, which have been prepared in accordance with the recognition and measurement principles laid down in Accounting Standard (AS) 25, Interim Financial Reporting, prescribed by the Companies (Accounting Standards) Rules, 2006 as per section 211 (3C) of the Companies Act, 1956 and other accounting principles generally accepted in India.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion.

In our opinion and to the best of our information and according to the explanations given to us, these consolidated quarterly financial results as well as the consolidated year to date financial results:

(i) include the quarterly financial results and year to date financial results of the following entities:

(a)	Infosys BPO Limited;
(b)	Infosys BPO s.r.o;
(c)	Infosys Consulting Inc.;
(d)	Infosys Consulting India Limited
(e)	Infosys Technologia DO Brasil LTDA
(f)	Infosys Technologies (Australia) Pty Limited;
(g)	Mainstream Software Pty Limited;
(h)	Infosys Technologies (China) Co. Limited;
(i)	Infosys Technologies S. de R.L.de C.V;
(j)	Infosys Technologies (Sweden) AB;
(k)	Infosys BPO (Poland) Sp z.o.o; and
(l)	Infosys BPO (Thailand) Limited.

(ii)	have been presented in accordance with the requirements of Clause 41 of the Listing Agreement in this regard; and
(iii)	give a true and fair view of the consolidated net profit and other financial information for the quarter ended 30 September 2009 as well as the consolidated year to date results for the period from 1 April 2009 to 30 September 2009.

Further, we also report that we have, on the basis of the books of account and other records and information and explanations given to us by the management, also verified the consolidated number of shares as well as percentage of shareholdings in respect of aggregate amount of consolidated public shareholdings, as furnished by the Company in terms of Clause 35 of the Listing Agreement and found the same to be correct.

for   B S R & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
9 October 2009